This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms'
1. [G.R. No. 86889 : December 4, 1990.]
192 SCRA 51
LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, Respondent.
DECISION
PARAS, J.:
This is a petition for prohibition with prayer for restraining order and/or preliminary and
permanent injunction against the Honorable Secretary of the Department of Agrarian
Reform for acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1988 and in promulgating
the Guidelines and Procedure Implementing Production and Profit Sharing under R.A. No.
6657, insofar as the same apply to herein petitioner, and further from performing an act in
violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes
the raising of livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and
Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and
32 of R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and
Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry
business and together with others in the same business allegedly stands to be adversely
affected by the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17
and Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law
and of the Guidelines and Procedures Implementing Production and Profit Sharing under
R.A. No. 6657 promulgated on January 2, 1989 and the Rules and Regulations
Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo,
pp. 2-36).: rd
Hence, this petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or
restraining order be issued enjoining public respondents from enforcing the same, insofar
as they are made to apply to Luz Farms and other livestock and poultry raisers.
prayer for the issuance of a preliminary injunction in its Manifestation dated May 26, and
31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said
Motion for Reconsideration regarding the injunctive relief, after the filing and approval by
this Court of an injunction bond in the amount of P100,000.00. This Court also gave due
course to the petition and required the parties to file their respective memoranda (Rollo, p.
119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as his
Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to
apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the
definition of "Agricultural, Agricultural Enterprise or Agricultural Activity."
(b) Section 11 which defines "commercial farms" as "private agricultural lands
devoted to commercial, livestock, poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the
authority to summarily determine the just compensation to be paid for lands
covered by the Comprehensive Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in Section
13 —
". . . (W)hereby three percent (3%) of the gross sales from the production of such
lands are distributed within sixty (60) days of the end of the fiscal year as
compensation to regular and other farmworkers in such lands over and above the
compensation they currently receive: Provided, That these individuals or entities
realize gross sales in excess of five million pesos per annum unless the DAR, upon
proper application, determine a lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten (10%)
of the net profit after tax shall be distributed to said regular and other
farmworkers within ninety (90) days of the end of the fiscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of
R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law
includes the raising of livestock, poultry and swine in its coverage as well as the
Implementing Rules and Guidelines promulgated in accordance therewith.:-cralaw
The constitutional provision under consideration reads as follows:
 ARTICLE XIII
x x x
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program founded
on the right of farmers and regular farmworkers, who are landless, to own directly
or collectively the lands they till or, in the case of other farmworkers, to receive a
just share of the fruits thereof. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities
and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations, and subject to the payment of
just compensation. In determining retention limits, the State shall respect the
rights of small landowners. The State shall further provide incentives for voluntary
land-sharing.
x x x"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its
entirety. In fact, it acknowledges the correctness of the decision of this Court in
the case of the Association of Small Landowners in the Philippines, Inc.
vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming the
constitutionality of the Comprehensive Agrarian Reform Law. It, however, argued
that Congress in enacting the said law has transcended the mandate of the
Constitution, in including land devoted to the raising of livestock, poultry and
swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar to
crop or tree farming. Land is not the primary resource in this undertaking and
represents no more than five percent (5%) of the total investment of commercial
livestock and poultry raisers. Indeed, there are many owners of residential lands
all over the country who use available space in their residence for commercial
livestock and raising purposes, under "contract-growing arrangements," whereby
processing corporations and other commercial livestock and poultry raisers (Rollo,
p. 10). Lands support the buildings and other amenities attendant to the raising of
animals and birds. The use of land is incidental to but not the principal factor or
consideration in productivity in this industry. Including backyard raisers, about
80% of those in commercial livestock and poultry production occupy five hectares
or less. The remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is
embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b)
of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition
(1954), defines the following words:
"Agriculture — the art or science of cultivating the ground and raising and
harvesting crops, often, including also, feeding, breeding and management of
livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock — domestic animals used or raised on a farm, especially for profit.
Farm — a plot or tract of land devoted to the raising of domestic or other animals." (Rollo,
pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in constitutional
construction is to ascertain and thereafter assure the realization of the purpose of the
framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure
Administration, 31 SCRA 413 [1970]).: rd
Ascertainment of the meaning of the provision of Constitution begins with the language of
the document itself. The words used in the Constitution are to be given their ordinary
meaning except where technical terms are employed in which case the significance thus
attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA
413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or of
doubtful meaning, the courts may consider the debates in the constitutional convention as
throwing light on the intent of the framers of the Constitution. It is true that the intent of
the convention is not controlling by itself, but as its proceeding was preliminary to the
adoption by the people of the Constitution the understanding of the convention as to what
was meant by the terms of the constitutional provision which was the subject of the
deliberation, goes a long way toward explaining the understanding of the people when
they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the
meaning of the word "agricultural," clearly show that it was never the intention of the
framers of the Constitution to include livestock and poultry industry in the coverage of the
constitutionally-mandated agrarian reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166
of R.A. 3844, as laud devoted to any growth, including but not limited to crop lands,
saltbeds, fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III,
p. 11).
The intention of the Committee is to limit the application of the word "agriculture."
Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of
agricultural land from such lands as commercial and industrial lands and residential
properties because all of them fall under the general classification of the word
"agricultural". This proposal, however, was not considered because the Committee
contemplated that agricultural lands are limited to arable and suitable agricultural lands
and therefore, do not include commercial, industrial and residential lands (Record,
CONCOM, August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed
several questions, among others, quoted as follows:
x x x
"Line 19 refers to genuine reform program founded on the primary right of farmers
and farmworkers. I wonder if it means that leasehold tenancy is thereby
proscribed under this provision because it speaks of the primary right of farmers
and farmworkers to own directly or collectively the lands they till. As also
mentioned by Commissioner Tadeo, farmworkers include those who work in
piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody puts up
a piggery or a poultry project and for that purpose hires farmworkers therein,
these farmworkers will automatically have the right to own eventually, directly or
ultimately or collectively, the land on which the piggeries and poultry projects
were constructed. (Record, CONCOM, August 2, 1986, p. 618).
x x x
The questions were answered and explained in the statement of then
Commissioner Tadeo, quoted as follows:
x x x
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan.
Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural
worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang
inilagay namin dito ay farm worker kaya hindi kasama ang piggery, poultry at
livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes
"private agricultural lands devoted to commercial livestock, poultry and swine raising" in
the definition of "commercial farms" is invalid, to the extent that the aforecited agro-
industrial activities are made to be covered by the agrarian reform program of the State.
There is simply no reason to include livestock and poultry lands in the coverage of
agrarian reform. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32
of R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to
execute and implement "production-sharing plans" (pending final redistribution of their
landholdings) whereby they are called upon to distribute from three percent (3%) of their
gross sales and ten percent (10%) of their net profits to their workers as additional
compensation is unreasonable for being confiscatory, and therefore violative of due
process (Rollo, p. 21).:-cralaw
It has been established that this Court will assume jurisdiction over a constitutional
question only if it is shown that the essential requisites of a judicial inquiry into such a
question are first satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the constitutional question
must have been opportunely raised by the proper party, and the resolution of the question
is unavoidably necessary to the decision of the case itself (Association of Small
Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v.
Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July
1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with
constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced
that this must be done. In arriving at this conclusion, its only criterion will be the
Constitution and God as its conscience gives it in the light to probe its meaning and
discover its purpose. Personal motives and political considerations are irrelevancies that
cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the
awesome power of the Congress and Executive, the Court will not hesitate "to make the
hammer fall heavily," where the acts of these departments, or of any official, betray the
people's will as expressed in the Constitution (Association of Small Landowners of the
Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R.
79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional
powers, it becomes the duty of the judiciary to declare what the other branches of the
government had assumed to do, as void. This is the essence of judicial power conferred by
the Constitution "(I)n one Supreme Court and in such lower courts as may be established
by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973
Constitution and which was adopted as part of the Freedom Constitution, and Article VIII,
Section 1 of the 1987 Constitution) and which power this Court has exercised in many
instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13
and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and
swine in its coverage as well as the Implementing Rules and Guidelines promulgated in
accordance therewith, are hereby DECLARED null and void for being unconstitutional and
the writ of preliminary injunction issued is hereby MADE permanent.
SO ORDERED.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla,
Bidin, Griño-Aquino, Medialdea and Regalado, JJ., concur.
Feliciano, J., is on leave.
Separate Opinions
SARMIENTO, J., concurring:
I agree that the petition be granted.
It is my opinion however that the main issue on the validity of the assailed provisions of
R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988) and its Implementing Rules
and Guidelines insofar as they include the raising of livestock, poultry, and swine in their
coverage cannot be simplistically reduced to a question of constitutional construction.
It is a well-settled rule that construction and interpretation come only after it has been
demonstrated that application is impossible or inadequate without them. A close reading
however of the constitutional text in point, specifically, Sec. 4, Art. XIII, particularly the
phrase, ". . . in case of other farmworkers, to receive a just share of the fruits thereof,"
provides a basis for the clear and possible coverage of livestock, poultry, and swine raising
within the ambit of the comprehensive agrarian reform program. This accords with the
principle that every presumption should be indulged in favor of the constitutionality of a
statute and the court in considering the validity of a statute should give it such reasonable
construction as can be reached to bring it within the fundamental law. 1
The presumption against unconstitutionality, I must say, assumes greater weight when a
ruling to the contrary would, in effect, defeat the laudable and noble purpose of the law,
i.e., the welfare of the landless farmers and farmworkers in the promotion of social justice,
by the expedient conversion of agricultural lands into livestock, poultry, and swine raising
by scheming landowners, thus, rendering the comprehensive nature of the agrarian
program merely illusory.
The instant controversy, I submit, boils down to the question of whether or not the
assailed provisions violate the equal protection clause of the Constitution (Article II,
section 1) which teaches simply that all persons or things similarly situated should be
treated alike, both as to rights conferred and responsibilities imposed. 2
There is merit in the contention of the petitioner that substantial distinctions exist between
land directed purely to cultivation and harvesting of fruits or crops and land exclusively
used for livestock, poultry and swine raising, that make real differences, to wit:
x x x
No land is tilled and no crop is harvested in livestock and poultry farming. There are no
tenants nor landlords, only employers and employees.
Livestock and poultry do not sprout from land nor are they "fruits of the land."
Land is not even a primary resource in this industry. The land input is inconsequential that
all the commercial hog and poultry farms combined occupy less than one percent (1%)
(0.4% for piggery, 0.2% for poultry) of the 5.45 million hectares of land supposedly
covered by the CARP. And most farms utilize only 2 to 5 hectares of land.: nad
In every respect livestock and poultry production is an industrial activity. Its use of an
inconsequential portion of land is a mere incident of its operation, as in any other
undertaking, business or otherwise.
The fallacy of defining livestock and poultry production as an agricultural enterprise is
nowhere more evident when one considers that at least 95% of total investment in these
farms is in the form of fixed assets which are industrial in nature.
These include (1) animal housing structures and facilities complete with drainage,
waterers, blowers, misters and in some cases even piped-in music; (2) feedmills complete
with grinders, mixers, conveyors, exhausts, generators, etc.; (3) extensive warehousing
facilities for feeds and other supplies; (4) anti-pollution equipment such as bio-gas and
digester plants augmented by lagoons and concrete ponds; (5) deepwells, elevated water
tanks, pumphouses and accessory facilities; (6) modern equipment such as sprayers,
pregnancy testers, etc.; (7) laboratory facilities complete with expensive tools and
equipment; and a myriad other such technologically advanced appurtances.
How then can livestock and poultry farmlands be arable when such are almost totally
occupied by these structures?
The fallacy of equating the status of livestock and poultry farmworkers with that of
agricultural tenants surfaces when one considers contribution to output. Labor cost of
livestock and poultry farms is no more than 4% of total operating cost. The 98% balance
represents inputs not obtained from the land nor provided by the farmworkers — inputs
such as feeds and biochemicals (80% of the total cost), power cost, cost of money and
several others.
Moreover, livestock and poultry farmworkers are covered by minimum wage law rather
than by tenancy law. They are entitled to social security benefits where tenant-farmers are
not. They are paid fixed wages rather than crop shares. And as in any other industry, they
receive additional benefits such as allowances, bonuses, and other incentives such as free
housing privileges, light and water.
Equating livestock and poultry farming with other agricultural activities is also fallacious in
the sense that like the manufacturing sector, it is a market for, rather than a source of
agricultural output. At least 60% of the entire domestic supply of corn is absorbed by
livestock and poultry farms. So are the by-products of rice (rice-bran), coconut (copra
meal), banana (banana pulp meal), and fish (fish meal). 3
x x x
In view of the foregoing, it is clear that both kinds of lands are not similarly situated and
hence, cannot be treated alike. Therefore, the assailed provisions which allow for the
inclusion of livestock and poultry industry within the coverage of the agrarian reform
program constitute invalid classification and must accordingly be struck down as
repugnant to the equal protection clause of the Constitution.chanrobles virtual law library
2. G.R. No. 156965 October 12, 2006
FROILAN DE GUZMAN, ANGEL MARCELO and NICASIO MAGBITANG, petitioners,
vs.
THE COURT OF APPEALS, OFFICE OF THE PRESIDENT, and the MUNICIPALITY OF
BALIUAG, BULACAN,respondents.
D E C I S I O N
Tinga, J.:
On appeal via a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure are the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. SP No.
55710. The Decision affirmed the Resolution dated 4 October 1999 of the Office of the
President dismissing petitioners' appeal from the Order of the Secretary of Agrarian
Reform declaring that the disputed property cannot be placed under the coverage of the
agrarian reform program or the Operation Land Transfer.
The following factual antecedents are matters of record.
Petitioners Froilan De Guzman, Angel Marcelo and Nicasio Magbitang were among the
tenants of a parcel of land situated at Barangay Pagala, Baliuag, Bulacan. The land,
measuring six (6) hectares, was formerly owned by the Vergel De Dios family. Sometime
in 1979, respondent Municipality of Baliuag, Bulacan (municipality) sought the
expropriation of the land before the now defunct Court of Agrarian Relations. During the
pendency of the expropriation proceedings, the municipality and petitioners entered into a
compromise agreement, whereby petitioners irrevocably withdrew their opposition to the
expropriation of the land in consideration of the payment of a disturbance compensation
of P25,000.00 per hectare or P2.50 per square meter. Petitioners also waived "all claims
and demands" against the municipality. The Court of Agrarian Relations approved said
compromise agreement in its decisions dated 16 April 1979 and 9 August 1979.3
From the records, it can be gathered that the municipality eventually acquired ownership
of the land through expropriation but allowed petitioners to continue cultivating their lots
pending the construction of the Baliuag Wholesale Complex Market. For this arrangement,
petitioners remitted rentals to the municipal treasurer. Despite the lapse of several years,
construction of the market did not push through. This prompted petitioners, who had
continually occupied and cultivated the land, to file in 1996 a petition with the Municipal
Agrarian Reform Office (MARO) of Baliuag, praying that the land be placed under the
Operation Land Transfer (OLT) in accordance with Presidential Decree (P.D.) No. 27.4
Following the filing of their petition for CARP coverage before the MARO, petitioners filed a
complaint on 13 May 1997 with the Department of Agrarian Reform Adjudication Board
(DARAB) against the municipality. In their complaint docketed as DARAB Case No. 03-02-
5054'97, petitioners prayed for the issuance of a preliminary injunction or temporary
restraining order to secure their peaceful possession over the land. The Provincial
Adjudicator rendered judgment in favor of petitioners on 17 July 1997. The dispositive
portion of the decision reads:
WHEREFORE, premises considered, the Board finds the plaintiffs a [sic] bona-fide
farmer[-]beneficiaries of agrarian reform[.] [A]ccordingly, judgment is hereby
rendered as follows:
1. Directing the the [sic] respondent, Municipality of Baliuag, Bulacan[,]
represented by Honorable Mayor Edilberto Tengco and all other persons acting in
their behalf to permanently cease and desist from dumping garbage in the
premises in question;
2. Directing the respondent to maintain petitioners in peaceful possession over the
disputed property.
SO ORDERED.5
On 6 January 1997, the Regional Director of the Department of Agrarian Reform (DAR)
issued an order granting the petition and declaring the land as covered by OLT. 6 The
municipality moved for its reconsideration in vain. Following the denial of its motion for
reconsideration, the municipality elevated the matter to the DAR Secretary who, in his
Order dated 8 August 1997, reversed the Order of 6 January 1997 of the Regional
Director.7 Petitioners, aggrieved this time, filed an appeal with the Office of the President.
On 1 July 1999, Executive Secretary Ronaldo B. Zamora, by authority of the President,
dismissed petitioners' appeal and affirmed the order of the DAR Secretary.8
Undaunted, petitioners filed a petition for review with the Court of Appeals, which prayed
for the reversal of the Order of 1 July 1999 issued by the Office of the President on the
grounds that the land remained agricultural and that the Office of the President erred in
relying upon the certification issued by the Housing and Land Use Regulatory Board
(HLURB) classifying the land as commercial. They also argued that under the provisions of
Administrative Order (A.O.) No. 20, series of 1992, the conversion of the land for non-
agricultural purposes was disallowed.
On 30 January, 2002, the Court of Appeals rendered the assailed Decision, dismissing
petitioners' appeal. Upholding the non-agricultural classification of the land, the Court of
Appeals ruled that the land could no longer be subject of the comprehensive agrarian
reform law (CARL). The Court of Appeals also denied petitioners' motion for
reconsideration in the assailed Resolution dated January 20, 2003.
Hence, the instant petition, imputing the following errors to the Court of Appeals:
I.
WITH ALL DUE RESPECT, THE COURT OF APPEALS COMMITTED GRAVE AND
MANIFEST ERROR IN LAW WHEN IT FAILED TO CONSIDER THAT THE SUBJECT
LANDHOLDING SHOULD HAVE BEEN COVERED BY OPERATION LAND TRANSFER
PURSUANT TO P.D. NO. 27 DUE TO THE FAILURE OF THE LANDOWNER TO CARRY
OUT ITS CONVERSION FROM AGRICULTURAL LAND FOR A LONG PERIOD OF TIME.
II.
THE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT UPHOLD (sic)
THE RECLASSIFICATION OF THE SUBJECT LANDHOLDING.
III.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT
DISREGARDED THE PROVISIONS OF THE O.P. ADMINISTRATIVE ORDER NO. 20
SERIES OF 1992 WHICH CLEARLY PROVIDES THE NON NEGOTIABILITY OF
IRRIGATED PRIME AGRICULTURAL LANDS TO NON-AGRICULTURAL PURPOSES.9
Essentially, the main issue to be resolved is whether the subject land can be reclassified to
agricultural after the purpose of its conversion to a non-agricultural land had not
materialized.
Petitioners contend that despite the conversion of the land for a commercial purpose, they
have remained tenants of the land devoting it for agricultural production. Though the
earlier tenancy relationship had been terminated upon the payment of disturbance
compensation pursuant to the 1979 compromise agreement, petitioners posit that a
tenancy relationship was created anew between them and the municipality when the latter
allowed petitioners to cultivate the land after the expropriation proceeding.
The petition has no merit.
Under Section 3(c) of Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), an agricultural land refers to land devoted to
agricultural activity as defined therein and not classified as mineral, forest, residential,
commercial or industrial land. The deliberations of the Constitutional Commission confirm
this limitation. "Agricultural lands" are only those lands which are "arable and suitable
agricultural lands" and "do not include commercial, industrial and residential lands."10
In Natalia Realty, Inc. vs. Department of Agrarian Reform,11 it was held that lands not
devoted to agricultural activity are outside the coverage of CARL including lands previously
converted to non-agricultural uses prior to the effectivity of CARL by government agencies
other than the DAR. This rule has been reiterated in a number of subsequent cases.
Despite claims that the areas have been devoted for agricultural production, the Court has
upheld the "non-agricultural" classification made by the NHA over housing and
resettlements projects,12 zoning ordinances passed by local government units classifying
residential areas,13 and certifications over watershed areas issued by the Department of
Environment and Natural Resources (DENR).14
The DAR itself has recognized the prospective application of R.A. No. 6657, insofar as it
provides under Section 3(c) thereof that lands classified as non-agricultural prior to the
effectivity of the CARL are not covered by the CARL. Thus, DAR Administrative Order No.
1, series of 1990 provides:
Agricultural land refers to those devoted to agricultural activity as defined in R.A.
[No.] 6657 and not classified as mineral or forest by the Department of
Environment and Natural Resources (DENR) and its predecessor agencies, and not
classified in town plans and zoning ordinances as approved by the Housing Land
Use Regulatory Board (HLURB) and its preceding competent authorities prior to 15
June 1988 for residential, commercial or industrial use. (Emphasis supplied.}
That the subject land had been reclassified from agricultural to non-agricultural is not
disputed. The records reveal that as early as 1980, the municipality had passed a zoning
ordinance which identified the subject land as the site of the wholesale market complex.
As per certification issued by the HLURB, the land is within the zoning plan approved by
the National Coordinating Council for Town Planning, Housing and Zoning.
Petitioners also theorize that they earned a vested right over the land when a tenancy
relationship was established anew between them and the municipality subsequent to the
latter's acquisition of the land. In support of this theory, petitioners cite minutes of
meetings and resolutions passed by the municipality's Sanggunian, purportedly indicating
the municipality's recognition of their status as tenants of the subject landholding.
Petitioners' theory does not persuade the Court.
A segment of the minutes of the meeting of the municipality's Sanggunian dated 27 May
1988, which petitioners cite to bolster their theory, is quoted below:
 Tumindig din at namahayag ang ating Punong Bayan Kgg. Reynaldo S. del Rosario
at sinabing sa kasulukuyan ay hindi pa naman kailangan ng Pamahalaang Bayan
ang nasabing lupa ngunit kung ito ay kakailangan na ay kinakailangang umalis sila
dito ng mahinusay, walang pasubali at maluwag sa kanilang kalooban, kung kaya't
iminungkahi niya na gumawa ng isang nakasulat na kasunduan na ang nakasaad
ay kusang-loob silang aalis sa nasabing lupa pagdating ng panahon na ito ay
kailanganin na ng Pamahalaang Bayan.15
The aforequoted minutes clearly show that petitioners' use and possession of the land was
by mere tolerance of the municipality and subject to the condition that petitioners would
voluntarily vacate the land when the need would arise. In the same minutes,
the Sanggunian resolved to authorize then Mayor Reynaldo S. del Rosario to enter into an
agreement in writing with petitioners concerning the latter's temporary cultivation of the
land as hired labor.
As discussed earlier, the land had ceased to be classified as agricultural when the
municipality extended petitioners' occupation of the land. After the municipality acquired
ownership over the land through expropriation and passed the ordinance converting said
land into a commercial area, any transaction entered into by the municipality involving the
land was governed by the applicable civil law in relation to laws on local government. At
this point, agrarian laws no longer governed the relationship between petitioners and the
municipality. While it was not established whether the relationship between petitioners and
the municipality was that of a lessor and lessee or that of an employer and laborer, as the
supposed written agreement was not offered in evidence, the fact remains that the subject
land had already been identified as commercial in the zoning ordinance.
Certainly, petitioners' occupation of the land, made possible as it was by the tolerance of
the municipality, was subject to its peremptory right to terminate. As absolute owner of
the land, the municipality is entitled to devote the land for purposes it deems appropriate.
It is noteworthy that even prior to its expropriation and reclassification, the land was
never placed under the coverage of the agrarian reform program. Although it appears that
petitioners had been tilling the land as tenants of the Vergel De Dios family, the
municipality's predecessor-in-interest, the records do not show that petitioners had
applied for coverage of the land under the agrarian reform program. Before a claimant
becomes a qualified beneficiary of agrarian reform, the administrative process for
coverage under the CARP must be initiated. The mere fact of cultivating an agricultural
land does not ipso jure vest ownership right in favor of the tiller. Since petitioners had not
applied for CARP coverage prior to the reclassification of the land to commercial, their
occupation by mere tolerance cannot ripen into absolute ownership.
Petitioners further argue that the municipality's failure to realize the commercial project
operates to reinstate the original status of the land as agricultural. In support of this
theory, petitioners cite Section 36 (1) of R.A. No. 3844, or the Agriculture Land Reform
Code, unaware that the provision had been amended by R.A. 6389, entitled, "An Act
Amending Republic Act Numbered Thirty Eight Hundred and Forty Four, As Amended,
Otherwise Known As the Agricultural Land Reform Code and For Other Purposes."
Before its amendment, Section 36 (1), R.A. No. 3844 provided:
Sec. 36. Possession of Landholding; Exceptions.—Notwithstanding any agreement
as to the period or future surrender, of the land, an agricultural lessee shall
continue in the enjoyment and possession of his landholding except when his
dispossession has been authorized by the Court in a judgment that is final and
executory if after due hearing it is shown that:
(1) The agricultural lessor-owner or a member of his immediate family will
personally cultivate the landholding or will convert the landholding, if suitably
located, into residential, factory, hospital or school site or other useful non-
agricultural purposes: Provided, That the agricultural lessee shall be entitled to
disturbance compensation equivalent to five years rental on his landholding in
addition to his rights under Sections twenty-five and thirty-four, except when the
land owned and leased by the agricultural lessor, is not more than five hectares, in
which case instead of disturbance compensation the lessee may be entitled to an
advanced notice of at least one agricultural year before ejectment proceedings are
filed against him: Provided, further, That should the landholder not cultivate the
land himself for three years or fail to substantially carry out such conversion within
one year after the dispossession of the tenant, it shall be presumed that he acted
in bad faith and the tenant shall have the right to demand possession of the land
and recover damages for any loss incurred by him because of said dispossessions.
With the enactment of the amendatory law, the condition imposed on the landowner to
implement the conversion of the agricultural land to a non-agricultural purpose within a
certain period was deleted. Section 36 (1), R.A. No. 3844, as amended, now reads:
Sec. 36. Possession of Landholding; Exceptions.– Notwithstanding any agreement
as to the period or future surrender, of the land, an agricultural lessee shall
continue in the enjoyment and possession of his landholding except when his
dispossession has been authorized by the Court in a judgment that is final and
executory if after due hearing it is shown that:
(1) The landholding is declared by the department head upon recommendation of
the National Planning Commission to be suited for residential, commercial,
industrial or some other urban purposes: Provided, That the agricultural lessee
shall be entitled to disturbance compensation equivalent to five times the average
of gross harvests on his landholding during the last five preceding calendar years;
 x x x x16
The amendment is the Legislature's recognition that the optimal use of some lands may
not necessarily be for agriculture. Thus, discretion is vested on the appropriate
government agencies to determine the suitability of a land for residential, commercial,
industrial or other purposes. With the passage of the CARL, the conversion of agricultural
lands to non-agricultural uses was retained and the imposition on the landowner to
implement within a time frame the proposed non-agricultural use of the land was done
away with.
as their continuous tillage of the land and the non-commencement of the construction of
the market complex did not strip the land of its classification as commercial.
Petitioners' reliance on the provisions of A.O. No. 20, series of 1992, issued by then
President Fidel Ramos is misplaced. A.O. No. 20, which sets forth the guidelines to be
observed by local government units and government agencies on agricultural land use
conversion, cannot be applied to the subject land for the reason that the land had already
been classified as commercial long before its issuance. Indeed, A.O. No. 20 cannot be
applied retroactively.

Moreover, in Pasong Bayabas Farmers Association, Inc. v. Court of Appeals,17 the Court WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and
declared categorically that the failure of the landowner therein to complete the housing Resolution of the Court of Appeals in CA-G.R. SP No. 55710 are AFFIRMED. Costs against
project did not have the effect of reverting the property to its classification as agricultural petitioners.
land, although the order of conversion issued by the then Minister of Agrarian Reform
obliged the landowner to commence the physical development of the housing project SO ORDERED.
within one year from receipt of the order of conversion.18 In said case, a vast tract of land
claimed to be cultivated by its tenants formed part of the subdivision plan of a housing
project approved by the National Planning Commission and Municipal Council of Carmona
and subsequently declared by the Provincial Board of Cavite as composite of the industrial
areas of Carmona, Dasmariñas, Silang and Trece Martirez. Because the reclassification of
the property by the Municipal Council of Carmona to non-agricultural land took place
before the effectivity of the CARL, the Court held that Section 65 of R.A. No. 6657 cannot
be applied retroactively.19

More importantly, the Court in Pasong Bayabas recognized the power of local government
units to adopt zoning ordinances, citing Section 3 of R.A. No. 2264,20 to wit:

Section 3 of Rep. Act No. 2264, amending the Local Government Code, specifically
empowers municipal and/or city councils to adopt zoning and subdivision
ordinances or regulations in consultation with the National Planning Commission. A
zoning ordinance prescribes, defines, and apportions a given political subdivision
into specific land uses as present and future projection of needs. The power of the
local government to convert or reclassify lands to residential lands to non-
agricultural lands reclassified is not subject to the approval of the Department of
Agrarian Reform. Section 65 of Rep. Act No. 6657 relied upon by the petitioner
applies only to applications by the landlord or the beneficiary for the conversion of
lands previously placed under agrarian reform law after the lapse of five years
from its award. It does not apply to agricultural lands already converted as
residential lands prior to the passage of Rep. Act No. 6657.21

Thus, the zoning ordinance passed by the municipality sometime in 1980 reclassifying the
subject land as commercial and future site of a market complex operated to take away the
"agricultural" status of the subject property. Subsequent events cited by petitioners such
G.R. No. 78742 July 14, 1989 In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules
for his life on his way to Mycenae after performing his eleventh labor. The two wrestled
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. mightily and Hercules flung his adversary to the ground thinking him dead, but Antaeus
GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, rose even stronger to resume their struggle. This happened several times to Hercules'
CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. increasing amazement. Finally, as they continued grappling, it dawned on Hercules that
SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, Antaeus was the son of Gaea and could never die as long as any part of his body was
TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air,
FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, beyond the reach of the sustaining soil, and crushed him to death.
CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs. Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent. the powerful Antaeus weakened and died.

G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA,
HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE,
INC., Victorias Mill District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the
elemental forces of life and death, of men and women who, like Antaeus need the
sustaining strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the
distribution of this precious resource among our people. But it is more than a slogan.
Through the brooding centuries, it has become a battle-cry dramatizing the increasingly
urgent demand of the dispossessed among us for a plot of earth as their place in the sun.

G.R. No. 79744 July 14, 1989 Recognizing this need, the Constitution in 1935 mandated the policy of social justice to
"insure the well-being and economic security of all the people," 1 especially the less
INOCENTES PABICO, petitioner, privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the
vs. State shall regulate the acquisition, ownership, use, enjoyment and disposition of private
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, property and equitably diffuse property ownership and profits." 2 Significantly, there was
HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE also the specific injunction to "formulate and implement an agrarian reform program
PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO aimed at emancipating the tenant from the bondage of the soil." 3
AVANCENA and ROBERTO TAAY, respondents.
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also
G.R. No. 79777 July 14, 1989 adopted one whole and separate Article XIII on Social Justice and Human Rights,
containing grandiose but undoubtedly sincere provisions for the uplift of the common
people. These include a call in the following words for the adoption by the State of an
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
agrarian reform program:
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF
THE PHILIPPINES, respondents. SEC. 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. To this
end, the State shall encourage and undertake the just distribution of all
CRUZ, J.: agricultural lands, subject to such priorities and reasonable retention limits
as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the payment of just
 compensation. In determining retention limits, the State shall respect the
right of small landowners. The State shall further provide incentives for
voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had
already been enacted by the Congress of the Philippines on August 8, 1963, in line with
the above-stated principles. This was substantially superseded almost a decade later by
P.D. No. 27, which was promulgated on October 21, 1972, along with martial law, to
provide for the compulsory acquisition of private lands for distribution among tenant-
farmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust
for agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No.
228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing
for the valuation of still unvalued lands covered by the decree as well as the manner of
their payment. This was followed on July 22, 1987 by Presidential Proclamation No. 131,
instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229, providing
the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took
over legislative power from the President and started its own deliberations, including
extensive public hearings, on the improvement of the interests of farmers. The result,
after almost a year of spirited debate, was the enactment of R.A. No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino
signed on June 10, 1988. This law, while considerably changing the earlier mentioned
enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent
with its provisions. 4
The above-captioned cases have been consolidated because they involve common legal
questions, including serious challenges to the constitutionality of the several measures
mentioned above. They will be the subject of one common discussion and resolution, The
different antecedents of each case will require separate treatment, however, and will first
be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and
229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by
petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants
and owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of
these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter
alia of separation of powers, due process, equal protection and the constitutional limitation
that no private property shall be taken for public use without just compensation.
They contend that President Aquino usurped legislative power when she promulgated E.O.
No. 228. The said measure is invalid also for violation of Article XIII, Section 4, of the
Constitution, for failure to provide for retention limits for small landowners. Moreover, it
does not conform to Article VI, Section 25(4) and the other requisites of a valid
appropriation.
In connection with the determination of just compensation, the petitioners argue that the
same may be made only by a court of justice and not by the President of the Philippines.
They invoke the recent cases of EPZA v. Dulay 5 andManotok v. National Food
Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights is payable
in money or in cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also
deprives the petitioners of their property rights as protected by due process. The equal
protection clause is also violated because the order places the burden of solving the
agrarian problems on the owners only of agricultural lands. No similar obligation is
imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be
the owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and
so violated due process. Worse, the measure would not solve the agrarian problem
because even the small farmers are deprived of their lands and the retention rights
guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in
the earlier cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and
Corn Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The
determination of just compensation by the executive authorities conformably to the
formula prescribed under the questioned order is at best initial or preliminary only. It does
not foreclose judicial intervention whenever sought or warranted. At any rate, the
challenge to the order is premature because no valuation of their property has as yet been
made by the Department of Agrarian Reform. The petitioners are also not proper parties
because the lands owned by them do not exceed the maximum retention limit of 7
hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not
provide for retention limits on tenanted lands and that in any event their petition is a class
suit brought in behalf of landowners with landholdings below 24 hectares. They maintain
that the determination of just compensation by the administrative authorities is a final
ascertainment. As for the cases invoked by the public respondent, the constitutionality of
P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was the
validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O.
Nos. 228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No.
6657. Nevertheless, this statute should itself also be declared unconstitutional because it
suffers from substantially the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz,
owner of a 1. 83- hectare land, who complained that the DAR was insisting on the
implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had
reached with his tenant on the payment of rentals. In a subsequent motion dated April 10,
1989, he adopted the allegations in the basic amended petition that the above- mentioned
enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District,
Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization
composed of 1,400 planter-members. This petition seeks to prohibit the implementation of
Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform
Program as decreed by the Constitution belongs to Congress and not the President.
Although they agree that the President could exercise legislative power until the Congress
was convened, she could do so only to enact emergency measures during the transition
period. At that, even assuming that the interim legislative power of the President was
properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for
violating the constitutional provisions on just compensation, due process, and equal
protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the
Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to
cover the estimated cost of the Comprehensive Agrarian Reform Program from 1987 to
1992 which shall be sourced from the receipts of the sale of the assets of the Asset
Privatization Trust and Receipts of sale of ill-gotten wealth received through the
Presidential Commission on Good Government and such other sources as government may
deem appropriate. The amounts collected and accruing to this special fund shall be
considered automatically appropriated for the purpose authorized in this Proclamation the
amount appropriated is in futuro, not in esse. The money needed to cover the cost of the
contemplated expropriation has yet to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but no such
payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6,
thereof provides that the Land Bank of the Philippines "shall compensate the landowner in
an amount to be established by the government, which shall be based on the owner's
declaration of current fair market value as provided in Section 4 hereof, but subject to
certain controls to be defined and promulgated by the Presidential Agrarian Reform
Council." This compensation may not be paid fully in money but in any of several modes
that may consist of part cash and part bond, with interest, maturing periodically, or direct
payment in cash or bond as may be mutually agreed upon by the beneficiary and the
landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made to
make a careful study of the sugar planters' situation. There is no tenancy problem in the
sugar areas that can justify the application of the CARP to them. To the extent that the
sugar planters have been lumped in the same legislation with other farmers, although they
are a separate group with problems exclusively their own, their right to equal protection
has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of
Sugarcane Planters (NASP) which claims a membership of at least 20,000 individual sugar
planters all over the country. On September 10, 1987, another motion for intervention was
filed, this time by Manuel Barcelona, et al., representing coconut and riceland owners.
Both motions were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program
and that, in any event, the appropriation is invalid because of uncertainty in the amount
appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide
for an initial appropriation of fifty billion pesos and thus specifies the minimum rather than
the maximum authorized amount. This is not allowed. Furthermore, the stated initial
amount has not been certified to by the National Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear
and convincing evidence the necessity for the exercise of the powers of eminent domain,
and the violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the
expropriation of the said land for an amount equal to the government assessor's valuation
of the land for tax purposes. On the other hand, if the landowner declares his own
valuation he is unjustly required to immediately pay the corresponding taxes on the land,
in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity
for the expropriation as explained in the "whereas" clauses of the Proclamation and
submits that, contrary to the petitioner's contention, a pilot project to determine the
feasibility of CARP and a general survey on the people's opinion thereon are not
indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to
show that they belong to a different class and should be differently treated. The Comment
also suggests the possibility of Congress first distributing public agricultural lands and
scheduling the expropriation of private agricultural lands later. From this viewpoint, the
petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition is against the
payment of public money without the corresponding appropriation. There is no rule that
only money already in existence can be the subject of an appropriation law. Finally, the
earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as an
initial amount, is actually the maximum sum appropriated. The word "initial" simply means
that additional amounts may be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf,
assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised,
Serrano contends that the measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed
in the title;
(3) The power of the President to legislate was terminated on July 2,
1987; and
(4) The appropriation of a P50 billion special fund from the National
Treasury did not originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in
violation of due process and the requirement for just compensation, placed his landholding
under the coverage of Operation Land Transfer. Certificates of Land Transfer were
subsequently issued to the private respondents, who then refused payment of lease
rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small
landholding under Operation Land transfer and asked for the recall and cancellation of the
Certificates of Land Transfer in the name of the private respondents. He claims that on
December 24, 1986, his petition was denied without hearing. On February 17, 1987, he
filed a motion for reconsideration, which had not been acted upon when E.O. Nos. 228 and
229 were issued. These orders rendered his motion moot and academic because they
directly effected the transfer of his land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the
Philippines.
(2) The said executive orders are violative of the constitutional provision
that no private property shall be taken without due process or just
compensation.
(3) The petitioner is denied the right of maximum retention provided for
under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before
Congress convened is anomalous and arbitrary, besides violating the doctrine of
separation of powers. The legislative power granted to the President under the Transitory
Provisions refers only to emergency measures that may be promulgated in the proper
exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due
process of law and to the retention of his small parcels of riceholding as guaranteed under
Article XIII, Section 4 of the Constitution. He likewise argues that, besides denying him
just compensation for his land, the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after
October 21, 1972 shall be considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the
inclusion of even small landowners in the program along with other landowners with lands
consisting of seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the
motion for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As
for the validity of the issuance of E.O. Nos. 228 and 229, he argues that they were
enacted pursuant to Section 6, Article XVIII of the Transitory Provisions of the 1987
Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first
Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated
on October 21. 1972, the tenant-farmer of agricultural land was deemed the owner of the
land he was tilling. The leasehold rentals paid after that date should therefore be
considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed
was resolved on December 14, 1987. An appeal to the Office of the President would be
useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the
validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners
of rice and corn lands not exceeding seven hectares as long as they are cultivating or
intend to cultivate the same. Their respective lands do not exceed the statutory limit but
are occupied by tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn
shall be ejected or removed from his farmholding until such time as the
respective rights of the tenant- farmers and the landowner shall have been
determined in accordance with the rules and regulations implementing
P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right
of retention because the Department of Agrarian Reform has so far not issued the
implementing rules required under the above-quoted decree. They therefore ask the Court
for a writ of mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI
474 removing any right of retention from persons who own other agricultural lands of
more than 7 hectares in aggregate area or lands used for residential, commercial,
industrial or other purposes from which they derive adequate income for their family. And
even assuming that the petitioners do not fall under its terms, the regulations
implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July
10, 1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying
Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978,
(Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated
December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by
Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing for a
Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their
Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file
the corresponding applications for retention under these measures, the petitioners are now
barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this
case notwithstanding the pendency of their appeal to the President of the Philippines.
Moreover, the issuance of the implementing rules, assuming this has not yet been done,
involves the exercise of discretion which cannot be controlled through the writ
of mandamus. This is especially true if this function is entrusted, as in this case, to a
separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to
them because they do not own more than seven hectares of agricultural land. Moreover,
assuming arguendo that the rules were intended to cover them also, the said measures
are nevertheless not in force because they have not been published as required by law and
the ruling of this Court in Tanada v. Tuvera.10 As for LOI 474, the same is ineffective for
the additional reason that a mere letter of instruction could not have repealed the
presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to
annul the acts of either the legislative or the executive or of both when not conformable to
the fundamental law. This is the reason for what some quarters call the doctrine of judicial
supremacy. Even so, this power is not lightly assumed or readily exercised. The doctrine of
separation of powers imposes upon the courts a proper restraint, born of the nature of
their functions and of their respect for the other departments, in striking down the acts of
the legislative and the executive as unconstitutional. The policy, indeed, is a blend of
courtesy and caution. To doubt is to sustain. The theory is that before the act was done or
the law was enacted, earnest studies were made by Congress or the President, or both, to
insure that the Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of the
Supreme Court who took part in the deliberations and voted on the issue during their
session en banc.11 And as established by judge made doctrine, the Court will assume
jurisdiction over a constitutional question only if it is shown that the essential requisites of
a judicial inquiry into such a question are first satisfied. Thus, there must be an actual
case or controversy involving a conflict of legal rights susceptible of judicial determination,
the constitutional question must have been opportunely raised by the proper party, and
the resolution of the question is unavoidably necessary to the decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases before
us, we hold that the same is satisfied by the petitioners and intervenors because each of
them has sustained or is in danger of sustaining an immediate injury as a result of the
acts or measures complained of. 13 And even if, strictly speaking, they are not covered by
the definition, it is still within the wide discretion of the Court to waive the requirement
and so remove the impediment to its addressing and resolving the serious constitutional
questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino
although they were invoking only an indirect and general interest shared in common with
the public. The Court dismissed the objection that they were not proper parties and ruled
that "the transcendental importance to the public of these cases demands that they be
settled promptly and definitely, brushing aside, if we must, technicalities of procedure."
We have since then applied this exception in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted
with constitutional issues like the ones now before it, it will not hesitate to declare a law or
act invalid when it is convinced that this must be done. In arriving at this conclusion, its
only criterion will be the Constitution as God and its conscience give it the light to probe its
meaning and discover its purpose. Personal motives and political considerations are
irrelevancies that cannot influence its decision. Blandishment is as ineffectual as
intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate
to "make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the
acts of these departments, or of any public official, betray the people's will as expressed in
the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that —
... when the judiciary mediates to allocate constitutional boundaries, it
does not assert any superiority over the other departments; it does not in
reality nullify or invalidate an act of the Legislature, but only asserts the
solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to
establish for the parties in an actual controversy the rights which that
instrument secures and guarantees to them. This is in truth all that is
involved in what is termed "judicial supremacy" which properly is the
power of judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more
serious challenges to the constitutionality of the several measures involved in these
petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under
martial law has already been sustained in Gonzales v. Estrella and we find no reason to
modify or reverse it on that issue. As for the power of President Aquino to promulgate
Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under Section 6 of the
Transitory Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the
Congress of the Philippines was formally convened and took over legislative power from
her. They are not "midnight" enactments intended to pre-empt the legislature because
E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc. No. 131 and
E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to say that these
measures ceased to be valid when she lost her legislative power for, like any statute, they
continue to be in force unless modified or repealed by subsequent law or declared invalid
by the courts. A statute does not ipso facto become inoperative simply because of the
dissolution of the legislature that enacted it. By the same token, President Aquino's loss of
legislative power did not have the effect of invalidating all the measures enacted by her
when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they
shall be suppletory to R.A. No. 6657 whenever not inconsistent with its
provisions. 17 Indeed, some portions of the said measures, like the creation of the P50
billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have
been incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not
conform to the requirements of a valid appropriation as specified in the Constitution.
Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide for
the creation of said fund, for that is not its principal purpose. An appropriation law is one
the primary and specific purpose of which is to authorize the release of public funds from
the treasury. 19 The creation of the fund is only incidental to the main objective of the
proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and
Section 25(4) of Article VI, are not applicable. With particular reference to Section 24, this
obviously could not have been complied with for the simple reason that the House of
Representatives, which now has the exclusive power to initiate appropriation measures,
had not yet been convened when the proclamation was issued. The legislative power was
then solely vested in the President of the Philippines, who embodied, as it were, both
houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be
invalidated because they do not provide for retention limits as required by Article XIII,
Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for such
limits now in Section 6 of the law, which in fact is one of its most controversial provisions.
This section declares:
Retention Limits. — Except as otherwise provided in this Act, no person
may own or retain, directly or indirectly, any public or private agricultural
land, the size of which shall vary according to factors governing a viable
family-sized farm, such as commodity produced, terrain, infrastructure,
and soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner
exceed five (5) hectares. Three (3) hectares may be awarded to each child
of the landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the land or
directly managing the farm; Provided, That landowners whose lands have
been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall
have only one subject, to be expressed in its title, deserves only short attention. It is
settled that the title of the bill does not have to be a catalogue of its contents and will
suffice if the matters embodied in the text are relevant to each other and may be inferred
from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance, by
whatever name it was called, had the force and effect of law because it came from
President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the
petitioners do in G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27
because the former was only a letter of instruction. The important thing is that it was
issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to
comply with the requirement for publication as this Court held in Tanada v.
Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2 of
the Civil Code, they could not have any force and effect if they were among those
enactments successfully challenged in that case. LOI 474 was published, though, in the
Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of
mandamus cannot issue to compel the performance of a discretionary act, especially by a
specific department of the government. That is true as a general proposition but is subject
to one important qualification. Correctly and categorically stated, the rule is that
mandamus will lie to compel the discharge of the discretionary duty itself but not to
control the discretion to be exercised. In other words, mandamus can issue to require
action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty
imposed by law, the courts will intervene by the extraordinary legal
remedy of mandamus to compel action. If the duty is purely ministerial,
the courts will require specific action. If the duty is purely discretionary,
the courts by mandamus will require action only. For example, if an
inferior court, public official, or board should, for an unreasonable length of
time, fail to decide a particular question to the great detriment of all
parties concerned, or a court should refuse to take jurisdiction of a cause
when the law clearly gave it jurisdiction mandamus will issue, in the first
case to require a decision, and in the second to require that jurisdiction be
taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a plain,
speedy and adequate remedy available from the administrative authorities, resort to the
courts may still be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent
domain that logically preclude the application of both powers at the same time on the
same subject. In the case of City of Baguio v. NAWASA, 24for example, where a law
required the transfer of all municipal waterworks systems to the NAWASA in exchange for
its assets of equivalent value, the Court held that the power being exercised was eminent
domain because the property involved was wholesome and intended for a public use.
Property condemned under the police power is noxious or intended for a noxious purpose,
such as a building on the verge of collapse, which should be demolished for the public
safety, or obscene materials, which should be destroyed in the interest of public morals.
The confiscation of such property is not compensable, unlike the taking of property under
the power of expropriation, which requires the payment of just compensation to the
owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of
the police power in a famous aphorism: "The general rule at least is that while property
may be regulated to a certain extent, if regulation goes too far it will be recognized as a
taking." The regulation that went "too far" was a law prohibiting mining which might cause
the subsidence of structures for human habitation constructed on the land surface. This
was resisted by a coal company which had earlier granted a deed to the land over its mine
but reserved all mining rights thereunder, with the grantee assuming all risks and waiving
any damage claim. The Court held the law could not be sustained without compensating
the grantor. Justice Brandeis filed a lone dissent in which he argued that there was a valid
exercise of the police power. He said:
Every restriction upon the use of property imposed in the exercise of the
police power deprives the owner of some right theretofore enjoyed, and is,
in that sense, an abridgment by the State of rights in property without
making compensation. But restriction imposed to protect the public health,
safety or morals from dangers threatened is not a taking. The restriction
here in question is merely the prohibition of a noxious use. The property
so restricted remains in the possession of its owner. The state does not
appropriate it or make any use of it. The state merely prevents the owner
from making a use which interferes with paramount rights of the public.
Whenever the use prohibited ceases to be noxious — as it may because of
further changes in local or social conditions — the restriction will have to
be removed and the owner will again be free to enjoy his property as
heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police
power and the power of eminent domain, with the latter being used as an implement of
the former like the power of taxation. The employment of the taxing power to achieve a
police purpose has long been accepted. 26 As for the power of expropriation, Prof. John J.
Costonis of the University of Illinois College of Law (referring to the earlier case of Euclid
v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power)
makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the Police
and eminent domain powers on different planets. Generally speaking, they
viewed eminent domain as encompassing public acquisition of private
property for improvements that would be available for public use," literally
construed. To the police power, on the other hand, they assigned the less
intrusive task of preventing harmful externalities a point reflected in the
Euclid opinion's reliance on an analogy to nuisance law to bolster its
support of zoning. So long as suppression of a privately authored harm
bore a plausible relation to some legitimate "public purpose," the pertinent
measure need have afforded no compensation whatever. With the
progressive growth of government's involvement in land use, the distance
between the two powers has contracted considerably. Today government
often employs eminent domain interchangeably with or as a useful
complement to the police power-- a trend expressly approved in the
Supreme Court's 1954 decision in Berman v. Parker, which broadened the
reach of eminent domain's "public use" test to match that of the police
power's standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted
areas in the District of Columbia as a proper exercise of the police power. On the role of
eminent domain in the attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's
Capital should be beautiful as well as sanitary, there is nothing in the Fifth
Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it
through the exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the
U.S Supreme Court sustained the respondent's Landmarks Preservation Law under which
the owners of the Grand Central Terminal had not been allowed to construct a multi-story
office building over the Terminal, which had been designated a historic landmark.
Preservation of the landmark was held to be a valid objective of the police power. The
problem, however, was that the owners of the Terminal would be deprived of the right to
use the airspace above it although other landowners in the area could do so over their
respective properties. While insisting that there was here no taking, the Court nonetheless
recognized certain compensatory rights accruing to Grand Central Terminal which it said
would "undoubtedly mitigate" the loss caused by the regulation. This "fair compensation,"
as he called it, was explained by Prof. Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central was
authorized to transfer to neighboring properties the authorized but unused rights accruing
to the site prior to the Terminal's designation as a landmark — the rights which would
have been exhausted by the 59-story building that the city refused to countenance atop
the Terminal. Prevailing bulk restrictions on neighboring sites were proportionately
relaxed, theoretically enabling Penn Central to recoup its losses at the Terminal site by
constructing or selling to others the right to construct larger, hence more profitable
buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of
compensable taking is concerned. To the extent that the measures under challenge merely
prescribe retention limits for landowners, there is an exercise of the police power for the
regulation of private property in accordance with the Constitution. But where, to carry out
such regulation, it becomes necessary to deprive such owners of whatever lands they may
own in excess of the maximum area allowed, there is definitely a taking under the power
of eminent domain for which payment of just compensation is imperative. The taking
contemplated is not a mere limitation of the use of the land. What is required is the
surrender of the title to and the physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an
exercise not of the police power but of the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several
measures before us are challenged as violative of the due process and equal protection
clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention
limits are prescribed has already been discussed and dismissed. It is noted that although
they excited many bitter exchanges during the deliberation of the CARP Law in Congress,
the retention limits finally agreed upon are, curiously enough, not being questioned in
these petitions. We therefore do not discuss them here. The Court will come to the other
claimed violations of due process in connection with our examination of the adequacy of
just compensation as required under the power of expropriation.
The argument of the small farmers that they have been denied equal protection because
of the absence of retention limits has also become academic under Section 6 of R.A. No.
6657. Significantly, they too have not questioned the area of such limits. There is also the
complaint that they should not be made to share the burden of agrarian reform, an
objection also made by the sugar planters on the ground that they belong to a particular
class with particular interests of their own. However, no evidence has been submitted to
the Court that the requisites of a valid classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other
in certain particulars and different from each other in these same particulars. 31 To be
valid, it must conform to the following requirements: (1) it must be based on substantial
distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited
to existing conditions only; and (4) it must apply equally to all the members of the
class. 32 The Court finds that all these requisites have been met by the measures here
challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be treated
alike both as to the rights conferred and the liabilities imposed. 33 The petitioners have not
shown that they belong to a different class and entitled to a different treatment. The
argument that not only landowners but also owners of other properties must be made to
share the burden of implementing land reform must be rejected. There is a substantial
distinction between these two classes of owners that is clearly visible except to those who
will not see. There is no need to elaborate on this matter. In any event, the Congress is
allowed a wide leeway in providing for a valid classification. Its decision is accorded
recognition and respect by the courts of justice except only where its discretion is abused
to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police
power only if there is a concurrence of the lawful subject and the lawful method. Put
otherwise, the interests of the public generally as distinguished from those of a particular
class require the interference of the State and, no less important, the means employed are
reasonably necessary for the attainment of the purpose sought to be achieved and not
unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform have
been laid down by the Constitution itself, we may say that the first requirement has been
satisfied. What remains to be examined is the validity of the method employed to achieve
the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the
individual are concerned, the end does not justify the means. It is not enough that there
be a valid objective; it is also necessary that the means employed to pursue it be in
keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts.
There is no question that not even the strongest moral conviction or the most urgent
public need, subject only to a few notable exceptions, will excuse the bypassing of an
individual's rights. It is no exaggeration to say that a, person invoking a right guaranteed
under Article III of the Constitution is a majority of one even as against the rest of the
nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of Article III
of the Constitution. With regard to his property, the owner enjoys the added protection of
Section 9, which reaffirms the familiar rule that private property shall not be taken for
public use without just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to
forcibly acquire private lands intended for public use upon payment of just
compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the
purchaser, in which case an ordinary deed of sale may be agreed upon by
the parties. 35 It is only where the owner is unwilling to sell, or cannot
accept the price or other conditions offered by the vendee, that the power
of eminent domain will come into play to assert the paramount authority of
the State over the interests of the property owner. Private rights must
then yield to the irresistible demands of the public interest on the time-
honored justification, as in the case of the police power, that the welfare of
the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute
(as indeed no power is absolute). The limitation is found in the constitutional injunction
that "private property shall not be taken for public use without just compensation" and in
the abundant jurisprudence that has evolved from the interpretation of this principle.
Basically, the requirements for a proper exercise of the power are: (1) public use and (2)
just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the
State should first distribute public agricultural lands in the pursuit of agrarian reform
instead of immediately disturbing property rights by forcibly acquiring private agricultural
lands. Parenthetically, it is not correct to say that only public agricultural lands may be
covered by the CARP as the Constitution calls for "the just distribution of all agricultural
lands." In any event, the decision to redistribute private agricultural lands in the manner
prescribed by the CARP was made by the legislative and executive departments in the
exercise of their discretion. We are not justified in reviewing that discretion in the absence
of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments
when they decide what is known as the political question. As explained by Chief Justice
Concepcion in the case of Tañada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance,
namely, a question of policy. It refers to "those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity;
or in regard to which full discretionary authority has been delegated to the
legislative or executive branch of the government." It is concerned with
issues dependent upon the wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted with the
enlargement of judicial power, which now includes the authority of the courts "to
determine whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the
Government." 37 Even so, this should not be construed as a license for us to reverse the
other departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the
CARP the redistribution of private landholdings (even as the distribution of public
agricultural lands is first provided for, while also continuing apace under the Public Land
Act and other cognate laws). The Court sees no justification to interpose its authority,
which we may assert only if we believe that the political decision is not unwise, but illegal.
We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the
entire St. Mary's river between the American bank and the international
line, as well as all of the upland north of the present ship canal,
throughout its entire length, was "necessary for the purpose of navigation
of said waters, and the waters connected therewith," that determination is
conclusive in condemnation proceedings instituted by the United States
under that Act, and there is no room for judicial review of the judgment of
Congress ... .
As earlier observed, the requirement for public use has already been settled for us by the
Constitution itself No less than the 1987 Charter calls for agrarian reform, which is the
reason why private agricultural lands are to be taken from their owners, subject to the
prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131
and R.A. No. 6657 are only an elaboration of the constitutional injunction that the State
adopt the necessary measures "to encourage and undertake the just distribution of all
agricultural lands to enable farmers who are landless to own directly or collectively the
lands they till." That public use, as pronounced by the fundamental law itself, must be
binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more
thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from its
owner by the expropriator. 39 It has been repeatedly stressed by this Court that the
measure is not the taker's gain but the owner's loss. 40 The word "just" is used to intensify
the meaning of the word "compensation" to convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions contemplate more than
a mere regulation of the use of private lands under the police power. We deal here with an
actual taking of private agricultural lands that has dispossessed the owners of their
property and deprived them of all its beneficial use and enjoyment, to entitle them to the
just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the
following conditions concur: (1) the expropriator must enter a private property; (2) the
entry must be for more than a momentary period; (3) the entry must be under warrant or
color of legal authority; (4) the property must be devoted to public use or otherwise
informally appropriated or injuriously affected; and (5) the utilization of the property for
public use must be in such a way as to oust the owner and deprive him of beneficial
enjoyment of the property. All these requisites are envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon
its taking possession of the condemned property, as "the compensation is a public charge,
the good faith of the public is pledged for its payment, and all the resources of taxation
may be employed in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law
provides that:
Upon receipt by the landowner of the corresponding payment or, in case of
rejection or no response from the landowner, upon the deposit with an
accessible bank designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to
issue a Transfer Certificate of Title (TCT) in the name of the Republic of
the Philippines. The DAR shall thereafter proceed with the redistribution of
the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is
claimed is entrusted to the administrative authorities in violation of judicial prerogatives.
Specific reference is made to Section 16(d), which provides that in case of the rejection or
disregard by the owner of the offer of the government to buy his land-
... the DAR shall conduct summary administrative proceedings to
determine the compensation for the land by requiring the landowner, the
LBP and other interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days from the receipt of the
notice. After the expiration of the above period, the matter is deemed
submitted for decision. The DAR shall decide the case within thirty (30)
days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed to the courts of
justice and may not be usurped by any other branch or official of the government. EPZA v.
Dulay 44 resolved a challenge to several decrees promulgated by President Marcos
providing that the just compensation for property under expropriation should be either the
assessment of the property by the government or the sworn valuation thereof by the
owner, whichever was lower. In declaring these decrees unconstitutional, the Court held
through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited
decrees constitutes impermissible encroachment on judicial prerogatives.
It tends to render this Court inutile in a matter which under this
Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would
still have the power to determine the just compensation for the property,
following the applicable decrees, its task would be relegated to simply
stating the lower value of the property as declared either by the owner or
the assessor. As a necessary consequence, it would be useless for the
court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of
private property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the strict
application of the decrees during the proceedings would be nothing short
of a mere formality or charade as the court has only to choose between
the valuation of the owner and that of the assessor, and its choice is
always limited to the lower of the two. The court cannot exercise its
discretion or independence in determining what is just or fair. Even a
grade school pupil could substitute for the judge insofar as the
determination of constitutional just compensation is concerned.
 xxx SEC. 18. Valuation and Mode of Compensation. — The LBP shall
compensate the landowner in such amount as may be agreed upon by the
In the present petition, we are once again confronted with the same landowner and the DAR and the LBP, in accordance with the criteria
question of whether the courts under P.D. No. 1533, which contains the provided for in Sections 16 and 17, and other pertinent provisions hereof,
same provision on just compensation as its predecessor decrees, still have or as may be finally determined by the court, as the just compensation for
the power and authority to determine just compensation, independent of the land.
what is stated by the decree and to this effect, to appoint commissioners
for such purpose. The compensation shall be paid in one of the following modes, at the
option of the landowner:
This time, we answer in the affirmative.
(1) Cash payment, under the following terms and conditions:
xxx
(a) For lands above fifty (50) hectares,
It is violative of due process to deny the owner the opportunity to prove insofar as the excess hectarage is
that the valuation in the tax documents is unfair or wrong. And it is concerned — Twenty-five percent (25%)
repulsive to the basic concepts of justice and fairness to allow the cash, the balance to be paid in government
haphazard work of a minor bureaucrat or clerk to absolutely prevail over financial instruments negotiable at any
the judgment of a court promulgated only after expert commissioners time.
have actually viewed the property, after evidence and arguments pro and
con have been presented, and after all factors and considerations essential (b) For lands above twenty-four (24)
to a fair and just determination have been judiciously evaluated. hectares and up to fifty (50) hectares —
Thirty percent (30%) cash, the balance to
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the be paid in government financial
arbitrariness that rendered the challenged decrees constitutionally objectionable. Although instruments negotiable at any time.
the proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. (c) For lands twenty-four (24) hectares and
But more importantly, the determination of the just compensation by the DAR is not by below — Thirty-five percent (35%) cash,
any means final and conclusive upon the landowner or any other interested party, for the balance to be paid in government
Section 16(f) clearly provides: financial instruments negotiable at any
time.
Any party who disagrees with the decision may bring the matter to the
court of proper jurisdiction for final determination of just compensation. (2) Shares of stock in government-owned or controlled corporations, LBP
preferred shares, physical assets or other qualified investments in
The determination made by the DAR is only preliminary unless accepted by all parties accordance with guidelines set by the PARC;
concerned. Otherwise, the courts of justice will still have the right to review with finality
the said determination in the exercise of what is admittedly a judicial function. (3) Tax credits which can be used against any tax liability;

The second and more serious objection to the provisions on just compensation is not as (4) LBP bonds, which shall have the following features:
easily resolved.
(a) Market interest rates aligned with 91-
This refers to Section 18 of the CARP Law providing in full as follows: day treasury bill rates. Ten percent (10%)
of the face value of the bonds shall mature
every year from the date of issuance until PARC shall determine the percentages
the tenth (10th) year: Provided, That mentioned above;
should the landowner choose to forego the
cash portion, whether in full or in part, he (vi) Payment for tuition fees of the
shall be paid correspondingly in LBP bonds; immediate family of the original
bondholder in government universities,
(b) Transferability and negotiability. Such colleges, trade schools, and other
LBP bonds may be used by the landowner, institutions;
his successors-in- interest or his assigns,
up to the amount of their face value, for (vii) Payment for fees of the immediate
any of the following: family of the original bondholder in
government hospitals; and
(i) Acquisition of land or other real
properties of the government, including (viii) Such other uses as the PARC may
assets under the Asset Privatization from time to time allow.
Program and other assets foreclosed by
government financial institutions in the
The contention of the petitioners in G.R. No. 79777 is that the above provision is
same province or region where the lands
unconstitutional insofar as it requires the owners of the expropriated properties to accept
for which the bonds were paid are situated;
just compensation therefor in less than money, which is the only medium of payment
allowed. In support of this contention, they cite jurisprudence holding that:
(ii) Acquisition of shares of stock of
government-owned or controlled
The fundamental rule in expropriation matters is that the owner of the
corporations or shares of stock owned by
property expropriated is entitled to a just compensation, which should be
the government in private corporations;
neither more nor less, whenever it is possible to make the assessment,
than the money equivalent of said property. Just compensation has always
(iii) Substitution for surety or bail bonds for been understood to be the just and complete equivalent of the loss which
the provisional release of accused persons, the owner of the thing expropriated has to suffer by reason of the
or for performance bonds; expropriation . 45 (Emphasis supplied.)

(iv) Security for loans with any In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
government financial institution, provided
the proceeds of the loans shall be invested
It is well-settled that just compensation means the equivalent for the
in an economic enterprise, preferably in a
value of the property at the time of its taking. Anything beyond that is
small and medium- scale industry, in the
more, and anything short of that is less, than just compensation. It means
same province or region as the land for
a fair and full equivalent for the loss sustained, which is the measure of
which the bonds are paid;
the indemnity, not whatever gain would accrue to the expropriating entity.
The market value of the land taken is the just compensation to which the
(v) Payment for various taxes and fees to owner of condemned property is entitled, the market value being that sum
government: Provided, That the use of of money which a person desirous, but not compelled to buy, and an
these bonds for these purposes will be owner, willing, but not compelled to sell, would agree on as a price to be
limited to a certain percentage of the given and received for such property. (Emphasis supplied.)
outstanding balance of the financial
instruments; Provided, further, That the
In the United States, where much of our jurisprudence on the subject has been derived,
the weight of authority is also to the effect that just compensation for property
expropriated is payable only in money and not otherwise. Thus —
The medium of payment of compensation is ready money or cash. The
condemnor cannot compel the owner to accept anything but money, nor
can the owner compel or require the condemnor to pay him on any other
basis than the value of the property in money at the time and in the
manner prescribed by the Constitution and the statutes. When the power
of eminent domain is resorted to, there must be a standard medium of
payment, binding upon both parties, and the law has fixed that standard
as money in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of
things, be regarded as a reliable and constant standard of
compensation. 48
"Just compensation" for property taken by condemnation means a fair
equivalent in money, which must be paid at least within a reasonable time
after the taking, and it is not within the power of the Legislature to
substitute for such payment future obligations, bonds, or other valuable
advantage. 49(Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been
paid in the past solely in that medium. However, we do not deal here with the traditional
excercise of the power of eminent domain. This is not an ordinary expropriation where
only a specific property of relatively limited area is sought to be taken by the State from
its owner for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of
whatever kind as long as they are in excess of the maximum retention limits allowed their
owners. This kind of expropriation is intended for the benefit not only of a particular
community or of a small segment of the population but of the entire Filipino nation, from
all levels of our society, from the impoverished farmer to the land-glutted owner. Its
purpose does not cover only the whole territory of this country but goes beyond in time to
the foreseeable future, which it hopes to secure and edify with the vision and the sacrifice
of the present generation of Filipinos. Generations yet to come are as involved in this
program as we are today, although hopefully only as beneficiaries of a richer and more
fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And,
finally, let it not be forgotten that it is no less than the Constitution itself that has ordained
this revolution in the farms, calling for "a just distribution" among the farmers of lands
that have heretofore been the prison of their dreams but can now become the key at least
to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us, we
estimate that hundreds of billions of pesos will be needed, far more indeed than the
amount of P50 billion initially appropriated, which is already staggering as it is by our
present standards. Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they
called for agrarian reform as a top priority project of the government. It is a part of this
assumption that when they envisioned the expropriation that would be needed, they also
intended that the just compensation would have to be paid not in the orthodox way but a
less conventional if more practical method. There can be no doubt that they were aware of
the financial limitations of the government and had no illusions that there would be
enough money to pay in cash and in full for the lands they wanted to be distributed among
the farmers. We may therefore assume that their intention was to allow such manner of
payment as is now provided for by the CARP Law, particularly the payment of the balance
(if the owner cannot be paid fully with money), or indeed of the entire amount of the just
compensation, with other things of value. We may also suppose that what they had in
mind was a similar scheme of payment as that prescribed in P.D. No. 27, which was the
law in force at the time they deliberated on the new Charter and with which they
presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical
agreement among the members regarding the meaning to be given the concept of just
compensation as applied to the comprehensive agrarian reform program being
contemplated. There was the suggestion to "fine tune" the requirement to suit the
demands of the project even as it was also felt that they should "leave it to Congress" to
determine how payment should be made to the landowner and reimbursement required
from the farmer-beneficiaries. Such innovations as "progressive compensation" and
"State-subsidized compensation" were also proposed. In the end, however, no special
definition of the just compensation for the lands to be expropriated was reached by the
Commission. 50
On the other hand, there is nothing in the records either that militates against the
assumptions we are making of the general sentiments and intention of the members on
the content and manner of the payment to be made to the landowner in the light of the
magnitude of the expenditure and the limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and manner of the
just compensation provided for in the afore- quoted Section 18 of the CARP Law is not
violative of the Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all this Court is not a
cloistered institution removed from the realities and demands of society or oblivious to the
need for its enhancement. The Court is as acutely anxious as the rest of our people to see
the goal of agrarian reform achieved at last after the frustrations and deprivations of our
peasant masses during all these disappointing decades. We are aware that invalidation of
the said section will result in the nullification of the entire program, killing the farmer's
hopes even as they approach realization and resurrecting the spectre of discontent and
dissent in the restless countryside. That is not in our view the intention of the Constitution,
and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to be
made fully in money, we find further that the proportion of cash payment to the other
things of value constituting the total payment, as determined on the basis of the areas of
the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the
smaller the land, the bigger the payment in money, primarily because the small landowner
will be needing it more than the big landowners, who can afford a bigger balance in bonds
and other things of value. No less importantly, the government financial instruments
making up the balance of the payment are "negotiable at any time." The other modes,
which are likewise available to the landowner at his option, are also not unreasonable
because payment is made in shares of stock, LBP bonds, other properties or assets, tax
credits, and other things of value equivalent to the amount of just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and
small, not a little inconvenience. As already remarked, this cannot be avoided.
Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know
they are of the need for their forebearance and even sacrifice, will not begrudge us their
indispensable share in the attainment of the ideal of agrarian reform. Otherwise, our
pursuit of this elusive goal will be like the quest for the Holy Grail.
The recognized rule, indeed, is that title to the property expropriated shall pass from the
owner to the expropriator only upon full payment of the just compensation. Jurisprudence
on this settled principle is consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the
condemnor until the judgment fixing just compensation is entered and paid, but the
condemnor's title relates back to the date on which the petition under the Eminent Domain
Act, or the commissioner's report under the Local Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is complete at the time
of entry, title to the property taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title
to property does not pass to the condemnor until just compensation had actually been
made. In fact, the decisions appear to be uniformly to this effect. As early as 1838,
in Rubottom v. McLure, 54 it was held that "actual payment to the owner of the condemned
property was a condition precedent to the investment of the title to the property in the
State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the
Court of Appeals of New York said that the construction upon the statutes was that the fee
did not vest in the State until the payment of the compensation although the authority to
enter upon and appropriate the land was complete prior to the payment. Kennedy further
said that "both on principle and authority the rule is ... that the right to enter on and use
the property is complete, as soon as the property is actually appropriated under the
authority of law for a public use, but that the title does not pass from the owner without
his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:

If the laws which we have exhibited or cited in the preceding discussion

The complaint against the effects of non-registration of the land under E.O. No. 229 does
are attentively examined it will be apparent that the method of
not seem to be viable any more as it appears that Section 4 of the said Order has been
expropriation adopted in this jurisdiction is such as to afford absolute
superseded by Section 14 of the CARP Law. This repeats the requisites of registration as
reassurance that no piece of land can be finally and irrevocably taken from
embodied in the earlier measure but does not provide, as the latter did, that in case of
an unwilling owner until compensation is paid ... . (Emphasis supplied.)
failure or refusal to register the land, the valuation thereof shall be that given by the
provincial or city assessor for tax purposes. On the contrary, the CARP Law says that the
just compensation shall be ascertained on the basis of the factors mentioned in its Section It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October
17 and in the manner provided for in Section 16. 21, 1972 and declared that he shall "be deemed the owner" of a portion of land consisting
of a family-sized farm except that "no title to the land owned by him was to be actually
issued to him unless and until he had become a full-fledged member of a duly recognized
The last major challenge to CARP is that the landowner is divested of his property even
farmers' cooperative." It was understood, however, that full payment of the just
before actual payment to him in full of just compensation, in contravention of a well-
compensation also had to be made first, conformably to the constitutional requirement.
accepted principle of eminent domain.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October
21, 1972 of the land they acquired by virtue of Presidential Decree No. 27.
(Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said decree, after
proof of full-fledged membership in the farmers' cooperatives and full payment of just
compensation. Hence, it was also perfectly proper for the Order to also provide in its
Section 2 that the "lease rentals paid to the landowner by the farmer- beneficiary after
October 21, 1972 (pending transfer of ownership after full payment of just compensation),
shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the land
to the government on receipt by the landowner of the corresponding payment or the
deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank.
Until then, title also remains with the landowner. 57 No outright change of ownership is
contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily
transferring title before the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D.
No. 27, as recognized under E.O. No. 228, are retained by him even now under R.A. No.
6657. This should counter-balance the express provision in Section 6 of the said law that
"the landowners whose lands have been covered by Presidential Decree No. 27 shall be
allowed to keep the area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original homestead at the
time of the approval of this Act shall retain the same areas as long as they continue to
cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the
appeal filed by the petitioners with the Office of the President has already been resolved.
Although we have said that the doctrine of exhaustion of administrative remedies need not
preclude immediate resort to judicial action, there are factual issues that have yet to be
examined on the administrative level, especially the claim that the petitioners are not
covered by LOI 474 because they do not own other agricultural lands than the subjects of
their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the
petitioners have not yet exercised their retention rights, if any, under P.D. No. 27, the
Court holds that they are entitled to the new retention rights provided for by R.A. No.
6657, which in fact are on the whole more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have been the
subject of bitter attack from those who point to the shortcomings of these measures and
ask that they be scrapped entirely. To be sure, these enactments are less than perfect;
indeed, they should be continuously re-examined and rehoned, that they may be sharper
instruments for the better protection of the farmer's rights. But we have to start
somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but
grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The CARP
Law is not a tried and tested project. On the contrary, to use Justice Holmes's words, "it is
an experiment, as all life is an experiment," and so we learn as we venture forward, and, if
necessary, by our own mistakes. We cannot expect perfection although we should strive
for it by all means. Meantime, we struggle as best we can in freeing the farmer from the
iron shackles that have unconscionably, and for so long, fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian
reform program are removed, to clear the way for the true freedom of the farmer. We
may now glimpse the day he will be released not only from want but also from the
exploitation and disdain of the past and from his own feelings of inadequacy and
helplessness. At last his servitude will be ended forever. At last the farm on which he toils
will be his farm. It will be his portion of the Mother Earth that will give him not only the
staff of life but also the joy of living. And where once it bred for him only deep despair,
now can he see in it the fruition of his hopes for a more fulfilling future. Now at last can he
banish from his small plot of earth his insecurities and dark resentments and "rebuild in it
the music and the dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229
are SUSTAINED against all the constitutional objections raised in the
herein petitions.
2. Title to all expropriated properties shall be transferred to the State only
upon full payment of compensation to their respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No. 27
are retained and recognized.
 4. Landowners who were unable to exercise their rights of retention under
P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657
under the conditions therein prescribed.

5. Subject to the above-mentioned rulings all the petitions are

DISMISSED, without pronouncement as to costs.

SO ORDERED.
4. G.R. No. 178895
Lopez Agri-Business Corp. (SNLABC). Each Petition partially assails the Court of Appeals
REPUBLIC OF THE PHILIPPINES, Decision dated 30 June 2006[2] with respect to the application for exemption of four
represented by the DEPARTMENT OF
parcels of land - located in Mati, Davao Oriental and owned by SNLABC - from Republic Act
AGRARIAN REFORM, through the HON.
SECRETARY NASSER C. PANGANDAMAN, No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL).
Petitioner,
- versus -
There is little dispute as to the facts of the case, as succinctly discussed by the Court of
SALVADOR N. LOPEZ AGRI-BUSINESS Appeals and adopted herein by the Court, to wit:
CORP., represented by SALVADOR N.
LOPEZ, JR., President and General Subject of this petition are four (4) parcels of land with an
Manager, aggregate area of 160.1161 hectares registered in the name of Salvador
Respondent. N. Lopez Agri-Business Corporation. Said parcels of land are hereinafter
x- - - - - - - - - - - - - - - - - - - - - xSALVADOR described as follows:
N. LOPEZ AGRI-BUSINESS CORP.,
represented by SALVADOR N. LOPEZ, JR., Title No. Area Location
President and General Manager,
TCT No. T-12635 (Lot 1454-A & 1296) 49.5706 has. Bo. Limot,
Petitioner, G.R. No. 179071
Mati, Davao Oriental
TCT No. T-12637 (Lot 1298) 42.6822 has. Bo. Don Enrique
Present:
Lopez, Mati, Dvo.
- versus -
Or.
CARPIO MORALES, J.,
Chairperson, TCT No. T-12639 (Lot 1293-B) 67.8633 has. Bo. Don Enrique
DEPARTMENT OF AGRARIAN REFORM, BRION, Lopez, Mati, Dvo.
through the Honorable Secretary, BERSAMIN, Or.
Respondent. VILLARAMA, JR., and
SERENO, JJ. On August 2, 1991, Municipal Agrarian Reform Officer (MARO)
Socorro C. Salga issued a Notice of Coverage to petitioner with regards
Promulgated: (sic) to the aforementioned landholdings which were subsequently placed
under Compulsory Acquisition pursuant to R.A. 6657 (Comprehensive
January 10, 2011 Agrarian Reform Law).
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
On December 10, 1992, petitioner filed with the Provincial Agrarian
DECISION Reform Office (PARO), Davao Oriental, an Application for Exemption of the
lots covered by TCT No. T-12637 and T-12639 from CARP coverage. It
alleged that pursuant to the case of Luz Farms v. DAR Secretary said
parcels of land are exempted from coverage as the said parcels of land
SERENO, J.: with a total area of 110.5455 hectares are used for grazing and habitat of
petitioners 105 heads of cattle, 5 carabaos, 11 horses, 9 heads of goats
and 18 heads of swine, prior to the effectivity of the Comprehensive
Before us are two Rule 45 Petitions[1] filed separately by the Department of Agrarian Reform Law (CARL).

Agrarian Reform (DAR), through the Office of the Solicitor General, and by the Salvador N. On December 13, 1992 and March 1, 1993, the MARO conducted
an onsite investigation on the two parcels of land confirming the presence
of the livestock as enumerated. The Investigation Report dated March 9,
1993 stated:
That there are at least 2[5] to 30 heads of cows
that farrow every year and if the trend of farrowing persist
(sic), then the cattle shall become overcrowded and will
result to scarcity of grasses for the cattle to graze;
That during the week cycle, the herds are being
moved to the different adjacent lots owned by the
corporation. It even reached Lot 1454-A and Lot 1296.
Thereafter, the herds are returned to their respective night
chute corrals which are constructed under Lot 1293-B
and Lot 1298.
xxx
That the age of coconut trees planted in the area
are already 40 to 50 years and have been affected by the
recent drought that hit the locality.
That the presence of livestocks (sic) have already
existed in the area prior to the Supreme Court decision on
LUZ FARMS vs. Secretary of Agrarian Reform. We were
surprised however, why the management of the
corporation did not apply for Commercial Farm Deferment
(CFD) before, when the two years reglamentary (sic)
period which the landowner was given the chance to file
their application pursuant to R.A. 6657, implementing
Administrative Order No. 16, Series of 1989;
However, with regards to what venture comes (sic)
first, coconut or livestocks (sic), majority of the
farmworkers including the overseer affirmed that the
coconut trees and livestocks (sic) were (sic)
simultaneously and all of these were inherited by his
(applicant) parent. In addition, the financial statement
showed 80% of its annual income is derived from the
livestocks (sic) and only 20% from the coconut industry.
Cognitive thereto, we are favorably recommending
for the exemption from the coverage of CARP based on
LUZ FARMS as enunciated by the Supreme Court the
herein Lot No. 1293-B Psd-65835 under TCT No. T-12639
except Lot No. 1298, Cad. 286 of TCT No. T-12637 which
is already covered under the Compulsory Acquisition (CA)
Scheme and had already been valued by the Land
Valuation Office, Land Bank of the Philippines.
On June 24, 1993, TCT No. T-12635 covering Lots 1454-A & 1296
was cancelled and a new one issued in the name of the Republic of
the Philippines under RP T-16356. On February 7, 1994, petitioner through
its President, Salvador N. Lopez, Jr., executed a letter-affidavit addressed
to the respondent-Secretary requesting for the exclusion from CARP
coverage of Lots 1454-A and 1296 on the ground that they needed the
additional area for its livestock business. On March 28, 1995, petitioner
filed before the DAR Regional Director of Davao City an application for the
exemption from CARP coverage of Lots 1454-A and 1296 stating that it
has been operating grazing lands even prior to June 15, 1988 and that the
said two (2) lots form an integral part of its grazing land.
The DAR Regional Director, after inspecting the properties, issued
an Order dated March 5, 1997 denying the application for exemption of
Lots 1454-A and 1296 on the ground that it was not clearly shown that the
same were actually, directly and exclusively used for livestock raising since
in its application, petitioner itself admitted that it needs the lots for
additional grazing area. The application for exemption, however of the
other two (2) parcels of land was approved.
On its partial motion for reconsideration, petitioner argued that
Lots 1454-A & 1296 were taken beyond the operation of the CARP
pursuant to its reclassification to a Pollutive Industrial District (Heavy
Industry) per Resolution No. 39 of the Sangguniang Bayan of Mati, Davao
Oriental, enacted on April 7, 1992. The DAR Regional Director denied the
Motion through an Order dated September 4, 1997, ratiocinating that the
reclassification does not affect agricultural lands already issued a Notice of
Coverage as provided in Memorandum Circular No. 54-93: Prescribing the
Guidelines Governing Section 20 of R.A. 7160.
Undaunted, petitioner appealed the Regional Directors Orders to
respondent DAR. On June 10, 1998, the latter issued its assailed Order
affirming the Regional Directors ruling on Lots 1454-A & 1296 and further
declared Lots 1298 and 1293-B as covered by the CARP. Respondent ruled
in this wise considering the documentary evidence presented by petitioner
such as the Business Permit to engage in livestock, the certification of
ownership of large cattle and the Corporate Income Tax Returns, which
were issued during the effectivity of the Agrarian Reform Law thereby
debunking petitioners claim that it has been engaged in livestock farming
 since the 1960s. Respondent further ruled that the incorporation by the
Lopez family on February 12, 1988 or four (4) months before the
effectivity of R.A. 6657 was an attempt to evade the noble purposes of the
said law.
On October 17, 2002, petitioners Motion for Reconsideration was
denied by respondent prompting the former to file the instant petition.[3]
In the assailed Decision dated 30 June 2006,[4] the Court of Appeals partially granted the
SNLABC Petition and excluded the two (2) parcels of land (Transfer Certificate of Title
[TCT] Nos. T-12637 and T-12639) located in Barrio Don Enrique Lopez (the Lopez lands)
from coverage of the CARL.
However, it upheld the Decisions of the Regional Director[5] and the DAR[6] Secretary
denying the application for exemption with respect to Lots 1454-A and 1296 (previously
under TCT No. T-12635) in Barrio Limot (the Limot lands). These lots were already
covered by a new title under the name of the Republic of the Philippines (RP T-16356).
The DAR and SNLABC separately sought a partial reconsideration of the assailed
Decision of the Court of Appeals, but their motions for reconsideration were subsequently
denied in the Court of Appeals Resolution dated 08 June 2007.[7]
The DAR and SNLABC elevated the matter to this Court by filing separate Rule 45 Petitions
(docketed as G.R. No. 178895[8] and 179071,[9] respectively), which were subsequently
ordered consolidated by the Court.
The main issue for resolution by the Court is whether the Lopez and Limot lands of
SNLABC can be considered grazing lands for its livestock business and are thus exempted
from the coverage of the CARL under the Courts ruling in Luz Farms v. DAR.[10] The DAR
questions the disposition of the Court of Appeals, insofar as the latter allowed the
exemption of the Lopez lands, while SNLABC assails the inclusion of the Limot lands within
the coverage of the CARL.
The Court finds no reversible error in the Decision of the Court of Appeals and dismisses
the Petitions of DAR and SNLABC.
Preliminarily, in a petition for review on certiorari filed under Rule 45, the issues
that can be raised are, as a general rule, limited to questions of law.[11] However, as
pointed out by both the DAR and SNLABC, there are several recognized exceptions
wherein the Court has found it appropriate to re-examine the evidence presented.[12] In
this case, the factual findings of the DAR Regional Director, the DAR Secretary and the CA
are contrary to one another with respect to the following issue: whether the Lopez lands
were actually, directly and exclusively used for SNLABCs livestock business; and whether
there was intent to evade coverage from the Comprehensive Agrarian Reform Program
(CARP) based on the documentary evidence. On the other hand, SNLABC argues that
these authorities misapprehended and overlooked certain relevant and undisputed facts as
regards the inclusion of the Limot lands under the CARL. These circumstances fall within
the recognized exceptions and, thus, the Court is persuaded to review the facts and
evidence on record in the disposition of these present Petitions.
The Lopez lands of SNLABC are actually and directly
being used for livestock and are thus exempted from
the coverage of the CARL.
Briefly stated, the DAR questions the object or autoptic evidence relied upon by
the DAR Regional Director in concluding that the Lopez lands were actually, directly and
exclusively being used for SNLABCs livestock business prior to the enactment of the CARL.
In Luz Farms v. Secretary of the Department of Agrarian Reform,[13] the Court declared
unconstitutional the CARL provisions[14] that included lands devoted to livestock under the
coverage of the CARP. The transcripts of the deliberations of the Constitutional
Commission of 1986 on the meaning of the word "agricultural" showed that it was never
the intention of the framers of the Constitution to include the livestock and poultry
industry in the coverage of the constitutionally mandated agrarian reform program of the
government.[15] Thus, lands devoted to the raising of livestock, poultry and swine have
been classified as industrial, not agricultural, and thus exempt from agrarian reform.[16]
Under the rules then prevailing, it was the Municipal Agrarian Reform Officer (MARO) who
was primarily responsible for investigating the legal status, type and areas of the land
sought to be excluded;[17] and for ascertaining whether the area subject of the application
for exemption had been devoted to livestock-raising as of 15 June 1988.[18] The MAROs
authority to investigate has subsequently been replicated in the current DAR guidelines
regarding lands that are actually, directly and exclusively used for livestock raising.[19] As
the primary official in charge of investigating the land sought to be exempted as livestock
land, the MAROs findings on the use and nature of the land, if supported by substantial
evidence on record, are to be accorded greater weight, if not finality.
Verily, factual findings of administrative officials and agencies that have acquired
expertise in the performance of their official duties and the exercise of their primary
jurisdiction are generally accorded not only respect but, at times, even finality if such
findings are supported by substantial evidence.[20] The Court generally accords great
respect, if not finality, to factual findings of administrative agencies because of their
special knowledge and expertise over matters falling under their jurisdiction.[21]
In the instant case, the MARO in its ocular inspection[22] found on the Lopez lands
several heads of cattle, carabaos, horses, goats and pigs, some of which were covered by
several certificates of ownership. There were likewise structures on the Lopez lands used
for its livestock business, structures consisting of two chutes where the livestock were
kept during nighttime. The existence of the cattle prior to the enactment of the CARL was
positively affirmed by the farm workers and the overseer who were interviewed by the
MARO. Considering these factual findings and the fact that the lands were in fact being
used for SNLABCs livestock business even prior to 15 June 1988, the DAR Regional
Director ordered the exemption of the Lopez lands from CARP coverage. The Court gives
great probative value to the actual, on-site investigation made by the MARO as affirmed
by the DAR Regional Director. The Court finds that the Lopez lands were in fact actually,
directly and exclusively being used as industrial lands for livestock-raising.
Simply because the on-site investigation was belatedly conducted three or four
years after the effectivity of the CARL does not perforce make it unworthy of belief or unfit
to be offered as substantial evidence in this case. Contrary to DARs claims, the lack of
information as regards the initial breeders and the specific date when the cattle were first
introduced in the MAROs Report does not conclusively demonstrate that there was no
livestock-raising on the Lopez lands prior to the CARL. Although information as to these
facts are significant, their non-appearance in the reports does not leave the MARO without
any other means to ascertain the duration of livestock-raising on the Lopez lands, such as
interviews with farm workers, the presence of livestock infrastructure, and evidence of
sales of cattle all of which should have formed part of the MAROs Investigation Report.
Hence, the Court looks with favor on the expertise of the MARO in determining
whether livestock-raising on the Lopez lands has only been recently conducted or has been
a going concern for several years already. Absent any clear showing of grave abuse of
discretion or bias, the findings of the MARO - as affirmed by the DAR Regional Director -
are to be accorded great probative value, owing to the presumption of regularity in the
performance of his official duties.[23]
The DAR, however, insisted in its Petition[24] on giving greater weight to the
inconsistencies appearing in the documentary evidence presented, and noted by the DAR
Secretary, in order to defeat SNLABCs claim of exemption over the Lopez lands. The Court
is not so persuaded.
In the Petition, the DAR argued that that the tax declarations covering the Lopez lands
characterized them as agricultural lands and, thus, detracted from the claim that they
were used for livestock purposes. The Court has since held that there is no law or
jurisprudence that holds that the land classification embodied in the tax declarations is
conclusive and final nor would proscribe any further inquiry; hence, tax declarations are
clearly not the sole basis of the classification of a land.[25] Applying the foregoing
principles, the tax declarations of the Lopez lands as agricultural lands are not conclusive
or final, so as to prevent their exclusion from CARP coverage as lands devoted to
livestock-raising. Indeed, the MAROs on-site inspection and actual investigation showing
that the Lopez lands were being used for livestock-grazing are more convincing in the
determination of the nature of those lands.
Neither can the DAR in the instant case assail the timing of the incorporation of SNLABC
and the latters operation shortly before the enactment of the CARL. That personsemploy
tactics to precipitously convert their lands from agricultural use to industrial livestock is
not unheard of; they even exploit the creation of a new corporate vehicle to operate the
livestock business to substantiate the deceitful conversion in the hopes of evading CARP
coverage. Exemption from CARP, however, is directly a function of the lands usage, and
not of the identity of the entity operating it. Otherwise stated, lands actually, directly and
exclusively used for livestock are exempt from CARP coverage, regardless of the change of
owner.[26] In the instant case, whether SNLABC was incorporated prior to the CARL is
immaterial, since the Lopez lands were already being used for livestock-grazing purposes
prior to the enactment of the CARL, as found by the MARO. Although the managing entity
had been changed, the business interest of raising livestock on the Lopez lands still
remained without any indication that it was initiated after the effectivity of the CARL.
As stated by SNLABC, the Lopez lands were the legacy of Don Salvador Lopez, Sr. The
ownership of these lands was passed from Don Salvador Lopez, Sr., to Salvador N. Lopez,
Jr., and subsequently to the latters children before being registered under the name of
SNLABC. Significantly, SNLABC was incorporated by the same members of the Lopez
family, which had previously owned the lands and managed the livestock business. [27] In
all these past years, despite the change in ownership, the Lopez lands have been used for
purposes of grazing and pasturing cattle, horses, carabaos and goats. Simply put, SNLABC
was chosen as the entity to take over the reins of the livestock business of the Lopez
family. Absent any other compelling evidence, the inopportune timing of the incorporation
of the SNLABC prior to the enactment of the CARL was not by itself a categorical
manifestation of an intent to avoid CARP coverage.
Furthermore, the presence of coconut trees, although an indicia that the lands may be
agricultural, must be placed within the context of how they figure in the actual, direct and
exclusive use of the subject lands. The DAR failed to demonstrate that the Lopez lands
were actually and primarily agricultural lands planted with coconut trees. This is in fact
contradicted by the findings of its own official, the MARO. Indeed, the DAR did not adduce
any proof to show that the coconut trees on the Lopez lands were used for agricultural
business, as required by the Court in DAR v. Uy,[28] wherein we ruled thus:
It is not uncommon for an enormous landholding to be
intermittently planted with trees, and this would not necessarily detract it
from the purpose of livestock farming and be immediately considered as
an agricultural land. It would be surprising if there were no trees on the
land. Also, petitioner did not adduce any proof to show that the coconut
trees were planted by respondent and used for agricultural business or
were already existing when the land was purchased in 1979. In the
present case, the area planted with coconut trees bears an insignificant
value to the area used for the cattle and other livestock-raising, including
the infrastructure needed for the business. There can be no presumption,
other than that the coconut area is indeed used for shade and to augment
the supply of fodder during the warm months; any other use would be only
be incidental to livestock farming. The substantial quantity of livestock
heads could only mean that respondent is engaged in farming for this
purpose. The single conclusion gathered here is that the land is entirely
devoted to livestock farming and exempted from the CARP.
On the assumption that five thousand five hundred forty-eight (5,548) coconut trees were
existing on the Lopez land (TCT No. T-12637), the DAR did not refute the findings of the
MARO that these coconut trees were merely incidental. Given the number of livestock
heads of SNLABC, it is not surprising that the areas planted with coconut trees on the
Lopez lands where forage grass grew were being used as grazing areas for the livestock. It
was never sufficiently adduced that SNLABC was primarily engaged in agricultural business
on the Lopez lands, specifically, coconut-harvesting. Indeed, the substantial quantity of
SNLABCs livestock amounting to a little over one hundred forty (140) livestock heads, if
measured against the combined 110.5455 hectares of land and applying the DAR-
formulated ratio, leads to no other conclusion than that the Lopez lands were exclusively
devoted to livestock farming.[29]
In any case, the inconsistencies appearing in the documentation presented (albeit
sufficiently explained) pale in comparison to the positive assertion made by the MARO in
its on-site, actual investigation - that the Lopez lands were being used actually, directly
and exclusively for its livestock-raising business. The Court affirms the findings of the DAR
Regional Director and the Court of Appeals that the Lopez lands were actually, directly and
exclusively being used for SNLABCs livestock business and, thus, are exempt from CARP
coverage.
The Limot lands of SNLABC are not actually
and directly being used for livestock and
should thus be covered by the CARL.
In contrast, the Limot lands were found to be agricultural lands devoted to coconut trees
and rubber and are thus not subject to exemption from CARP coverage.
In the Report dated 06 April 1994, the team that conducted the inspection found that the
entire Limot lands were devoted to coconuts (41.5706 hectares) and rubber (8.000
hectares) and recommended the denial of the application for exemption.[30] Verily, the
Limot lands were actually, directly and exclusively used for agricultural activities, a fact
that necessarily makes them subject to the CARP. These findings of the inspection team
were given credence by the DAR Regional Director who denied the application, and were
even subsequently affirmed by the DAR Secretary and the Court of Appeals.
SNLABC argues that the Court of Appeals misapprehended the factual circumstances and
overlooked certain relevant facts, which deserve a second look. SNLABCs arguments fail to
convince the Court to reverse the rulings of the Court of Appeals.
In the 07 February 1994 Letter-Affidavit addressed to the DAR Secretary, SNLABC
requested the exemption of the Limot lands on the ground that the corporation needed the
additional area for its livestock business. As pointed out by the DAR Regional Director, this
Letter-Affidavit is a clear indication that the Limot lands were not directly, actually and
exclusively used for livestock raising. SNLABC casually dismisses the clear import of their
Letter-Affidavit as a poor choice of words. Unfortunately, the semantics of the declarations
of SNLABC in its application for exemption are corroborated by the other attendant factual
circumstances and indicate its treatment of the subject properties as non-livestock.
Verily, the MARO itself, in the Investigation Report cited by no less than SNLABC,
found that the livestock were only moved to the Limot lands sporadically and were not
permanently designated there. The DAR Secretary even described SNLABCs use of the
area as a seasonal extension of the applicants grazing lands during the summer.
Therefore, the Limot lands cannot be claimed to have been actually, directly and
exclusively used for SNLABCs livestock business, especially since these were only
intermittently and secondarily used as grazing areas. The said lands are more suitable --
and are in fact actually, directly and exclusively being used -- for agricultural purposes.
SNLABCs treatment of the land for non-livestock purposes is highlighted by its
undue delay in filing the application for exemption of the Limot lands. SNLABC filed the
application only on 07 February 1994, or three years after the Notice of Coverage was
issued; two years after it filed the first application for the Lopez lands; and a year after the
titles to the Limot lands were transferred to the Republic. The SNLABC slept on its rights
and delayed asking for exemption of the Limot lands. The lands were undoubtedly being
used for agricultural purposes, not for its livestock business; thus, these lands are subject
to CARP coverage. Had SNLABC indeed utilized the Limot lands in conjunction with the
livestock business it was conducting on the adjacent Lopez lands, there was nothing that
would have prevented it from simultaneously applying for a total exemption of all the
lands necessary for its livestock.
 The defense of SNLABC that it wanted to save first the Lopez lands where the
corrals and chutes were located, before acting to save the other properties does not help
its cause. The piecemeal application for exemption of SNLABC speaks of the value or
importance of the Lopez lands, compared with the Limot lands, with respect to its livestock
business. If the Lopez and the Limot lands were equally significant to its operations and
were actually being used for its livestock business, it would have been more reasonable for
it to apply for exemption for the entire lands. Indeed, the belated filing of the application
for exemption was a mere afterthought on the part of SNLABC, which wanted to increase
the area of its landholdings to be exempted from CARP on the ground that these were
being used for its livestock business.

In any case, SNLABC admits that the title to the Limot lands has already been
transferred to the Republic and subsequently awarded to SNLABCs farm workers.[31] This
fact only demonstrates that the land is indeed being used for agricultural activities and not
for livestock grazing.

The confluence of these factual circumstances leads to the logical conclusion that
the Limot lands were not being used for livestock grazing and, thus, do not qualify for
exemption from CARP coverage. SNLABCs belated filing of the application for exemption of
the Limot lands was a ruse to increase its retention of its landholdings and an attempt to
save these from compulsory acquisition.

WHEREFORE, the Petitions of the Department of Agrarian Reform and the Salvador N.
Lopez Agri-Business Corp. are DISMISSED, and the rulings of the Court of Appeals and
the DAR Regional Director are hereby AFFIRMED.

SO ORDERED.
5. G.R. No. 162070
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known
DEPARTMENT OF AGRARIAN REFORM, represented by SECRETARY
as the Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its
JOSE MARI B. PONCE (OIC)
Petitioner,
coverage farms used for raising livestock, poultry and swine.
- versus -,
DELIA T. SUTTON, ELLA T.
SUTTON-SOLIMAN and Promulgated:
HARRY T. SUTTON, On December 4, 1990, in an en banc decision in the case of Luz Farms v.
Respondents. October 19, 2005
x-----------------------------------x Secretary of DAR,[2] this Court ruled that lands devoted to livestock and poultry-raising

DECISION are not included in the definition of agricultural land. Hence, we declared as

unconstitutional certain provisions of the CARL insofar as they included livestock farms in
PUNO, J.:
the coverage of agrarian reform.

This is a petition for review filed by the Department of Agrarian Reform (DAR) of the
In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal

Decision and Resolution of the Court of Appeals, dated September 19, 2003 and February
request to withdraw their VOS as their landholding was devoted exclusively to cattle-

4, 2004, respectively, which declared DAR Administrative Order (A.O.) No. 9, series of
raising and thus exempted from the coverage of the CARL.[3]

1993, null and void for being violative of the Constitution.

On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate,

The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has
inspected respondents land and found that it was devoted solely to cattle-raising and

been devoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to the
breeding. He recommended to the DAR Secretary that it be exempted from the coverage

then existing agrarian reform program of the government, respondents made a voluntary
of the CARL.

offer to sell (VOS)[1] their landholdings to petitioner DAR to avail of certain incentives
On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their
under the law.
VOS and requested the return of the supporting papers they submitted in connection

therewith.[4] Petitioner ignored their request.

 On December 27, 1993, DAR issued A.O. No. 9, series of 1993,[5] which
provided that only portions of private agricultural lands used for the raising of livestock,
poultry and swine as of June 15, 1988 shall be excluded from the coverage of the CARL. In
determining the area of land to be excluded, the A.O. fixed the following retention
limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per 1 head of animal shall be
retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for
every 21 heads of cattle shall likewise be excluded from the operations of the CARL.
On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider
as final and irrevocable the withdrawal of their VOS as, under the Luz Farms
doctrine, their entire landholding is exempted from the CARL. [6]
On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued
Order[7] partially granting the application of respondents for exemption from the coverage
of CARL. Applying the retention limits outlined in the DAR A.O. No. 9, petitioner
exempted 1,209 hectares of respondents land for grazing purposes, and a maximum of
102.5635 hectares for infrastructure. Petitioner ordered the rest of respondents
landholding to be segregated and placed under Compulsory Acquisition.
Respondents moved for reconsideration. They contend that their entire landholding
should be exempted as it is devoted exclusively to cattle-raising. Their motion was
denied.[8] They filed a notice of appeal[9] with the Office of the President assailing: (1) the
reasonableness and validity of DAR A.O. No. 9, s. 1993, which provided for a ratio
between land and livestock in determining the land area qualified for exclusion from the
CARL, and (2) the constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz Farms
case which declared cattle-raising lands excluded from the coverage of agrarian reform.
On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner
DAR.[10] It ruled that DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms
case as the A.O. provided the guidelines to determine whether a certain parcel of land is
being used for cattle-raising. However, the issue on the constitutionality of the
assailed A.O. was left for the determination of the courts as the sole arbiters of
such issue.
an On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O.
No. 9, s. 1993, void for being contrary to the intent of the 1987 Constitutional Commission
to exclude livestock farms from the land reform program of the government. The
dispositive portion reads:
WHEREFORE, premises considered, DAR Administrative Order No. 09,
Series of 1993 is hereby DECLARED null and void. The assailed order of
the Office of the President dated 09 October 2001 in so far as it affirmed
the Department of Agrarian Reforms ruling that petitioners landholding is
covered by the agrarian reform program of the government
is REVERSED and SET ASIDE.
SO ORDERED.[11]
Hence, this petition.
The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, The fundamental rule in administrative law is that, to be valid, administrative rules

which prescribes a maximum retention limit for owners of lands devoted to livestock and regulations must be issued by authority of a law and must not contravene the

raising. provisions of the Constitution.[13] The rule-making power of an administrative agency

Invoking its rule-making power under Section 49 of the CARL, petitioner submits that it may not be used to abridge the authority given to it by Congress or by the

issued DAR A.O. No. 9 to limit the area of livestock farm that may be retained by a Constitution. Nor can it be used to enlarge the power of the administrative agency

landowner pursuant to its mandate to place all public and private agricultural lands under beyond the scope intended. Constitutional and statutory provisions control with

the coverage of agrarian reform. Petitioner also contends that the A.O. seeks to remedy respect to what rules and regulations may be promulgated by administrative

reports that some unscrupulous landowners have converted their agricultural farms to agencies and the scope of their regulations.[14]

livestock farms in order to evade their coverage in the agrarian reform program.
In the case at bar, we find that the impugned A.O. is invalid as it contravenes the
Petitioners arguments fail to impress.
Constitution. The A.O. sought to regulate livestock farms by including them in the

coverage of agrarian reform and prescribing a maximum retention limit for their
Administrative agencies are endowed with powers legislative in nature, i.e., the power
ownership. However, the deliberations of the 1987 Constitutional Commission show
to make rules and regulations. They have been granted by Congress with the authority to
a clear intent to exclude, inter alia, all lands exclusively devoted to livestock,
issue rules to regulate the implementation of a law entrusted to them. Delegated rule-
swine and poultry- raising. The Court clarified in the Luz Farms case that livestock,
making has become a practical necessity in modern governance due to the increasing
swine and poultry-raising are industrial activities and do not fall within the definition of
complexity and variety of public functions. However, while administrative rules and
agriculture or agricultural activity. The raising of livestock, swine and poultry is different
regulations have the force and effect of law, they are not immune from judicial
from crop or tree farming. It is an industrial, not an agricultural, activity. A great portion
review.[12]They may be properly challenged before the courts to ensure that they do not
of the investment in this enterprise is in the form of industrial fixed assets, such as:
violate the Constitution and no grave abuse of administrative discretion is committed by
animal housing structures and facilities, drainage, waterers and blowers, feedmill with
the administrative body concerned.
grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for impugned A.O., it was seeking to address the reports it has received that some

feeds and other supplies, anti-pollution equipment like bio-gas and digester plants unscrupulous landowners have been converting their agricultural lands to livestock farms

augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, to avoid their coverage by the agrarian reform. Again, we find neither merit nor logic in

sprayers, and other technological appurtenances.[15] this contention. The undesirable scenario which petitioner seeks to prevent with

the issuance of the A.O. clearly does not apply in this case. Respondents family
Clearly, petitioner DAR has no power to regulate livestock farms which have
acquired their landholdings as early as 1948. They have long been in the business of
been exempted by the Constitution from the coverage of agrarian reform. It has
breeding cattle in Masbate which is popularly known as the cattle-breeding capital of the
exceeded its power in issuing the assailed A.O.
Philippines.[18]Petitioner DAR does not dispute this fact. Indeed, there is no evidence on

The subsequent case of Natalia Realty, Inc. v. DAR[16] reiterated our ruling in record that respondents have just recently engaged in or converted to the business of

the Luz Farms case. In Natalia Realty, the Court held that industrial, commercial and breeding cattle after the enactment of the CARL that may lead one to suspect that

residential lands are not covered by the CARL.[17] We stressed anew that while Section 4 respondents intended to evade its coverage. It must be stressed that what the CARL

of R.A. No. 6657 provides that the CARL shall cover all public and private prohibits is the conversion of agricultural lands for non-agricultural purposes after

agricultural lands, the term agricultural land does not include lands classified as the effectivity of the CARL. There has been no change of business interest in the

mineral, forest, residential, commercial or industrial. Thus, in Natalia Realty, even case of respondents.

portions of the Antipolo Hills Subdivision, which are arable yet still undeveloped, could
Moreover, it is a fundamental rule of statutory construction that the reenactment
not be considered as agricultural lands subject to agrarian reform as these lots were
of a statute by Congress without substantial change is an implied legislative approval and
already classified as residential lands.
adoption of the previous law. On the other hand, by making a new law, Congress seeks to

A similar logical deduction should be followed in the case at bar. Lands devoted to raising supersede an earlier one.[19] In the case at bar, after the passage of the 1988 CARL,

of livestock, poultry and swine have been classified as industrial, not agricultural, lands Congress enacted R.A. No. 7881[20] which amended certain provisions of the CARL.

and thus exempt from agrarian reform. Petitioner DAR argues that, in issuing the
Specifically, the new law changed the definition of the terms agricultural activity

and commercial farming by dropping from its coverage lands that are devoted to

commercial livestock, poultry and swine-raising.[21] With this significant

modification, Congress clearly sought to align the provisions of our agrarian laws

with the intent of the 1987 Constitutional Commission to exclude livestock farms

from the coverage of agrarian reform.

In sum, it is doctrinal that rules of administrative bodies must be in harmony with

the provisions of the Constitution. They cannot amend or extend the Constitution. To be

valid, they must conform to and be consistent with the Constitution. In case of conflict

between an administrative order and the provisions of the Constitution, the latter

prevails.[22] The assailed A.O. of petitioner DAR was properly stricken down as

unconstitutional as it enlarges the coverage of agrarian reform beyond the scope intended

by the 1987 Constitution.

IN VIEW WHEREOF, the petition is DISMISSED. The assailed Decision and

Resolution of the Court of Appeals, dated September 19, 2003 and February 4, 2004,

respectively, are AFFIRMED. No pronouncement as to costs.

SO ORDERED.