Asociacion de Agricultores de Talisay-Silay Inc., et al. vs.

Talisay-Silay Milling
Co. Inc., et al.
GRN L-19937; February 19, 1979
A
REPUBLIC ACT 809 IS A SOCIAL JUSTICE AND POLICE POWER MEASURE FOR
THE PROMOTION OF LABOR CONDITIONS IN SUGAR PLANTATIONS, HENCE
WHATEVER RATIONAL DEGREE OF CONSTRAINT IT EXERTS ON FREEDOM OF
CONTRACT AND EXISTING CONTRACTUAL OBLIGATIONS IS
CONSTITUTIONALLY PERMISSIBLE.
Despite very strongly persuasive arguments to the contrary of the
distinguished lawyers supporting the position of the centrals, the Court has
arrived at the conclusion that Republic Act 809 was conceived and enacted
as a social legislation designed primarily to ameliorate the condition of the
laborers in the sugar plantations, and the fact that at the same time the
planters would also be benefited by it does not detract from if it does not add
to such basic purpose of the Act. We do not deem it necessary to make here
an extended historical account of how the statute came into being.
Police Power
It is therefore beyond cavil that dealing as it did with the unfortunate plight
of the farm laborers crying for just and urgent amelioration and confronted
with the usual constitutional objections whenever contractual relations are
sought to be regulated, Congress ultimately availed of the state's police
power, in the face of which all arguments about freedom of contract and
impairment of contractual obligations have generally been held not to
prevail. In Lutz vs. Araneta (G.R. No. L-2859, Dec. 22, 1959), this Court
recognized the propriety of exercising 'police power when it is needed to do
so in order that our sugar industry may be stabilized, and to that end, it was
held that the legislature could provide that the distribution of benefits from
the proceeds of sugar be readjusted among the components of the industry
to enable it to resist the added strain of the increase in taxes that it had to
sustain then. With at least equal persuasiveness must such reasoning obtain
when the readjustment of the distribution of proceeds is impelled by the
need to render social justice among all the participants in the industry,
specially the laborers.
True it is that, as counsel for the centrals contend, police power cannot be
resorted to just any time the legislature wishes, but it is not correct to say
that it is indispensable that exceptional circumstances must exist before
police power can be exercised. As very aptly pointed out by the able amicus
curiae, Attys. Taada, Teehankee and Carreon, gone are the days when
courts could "be found adhering to the doctrine that interference with

contracts can only be justified by exceptional circumstances", for the "test of

validity today under the due process clause, even in the case of legislation
interfering with existing contracts, is reasonableness, as held by this
Honorable Supreme Court in the case of People vs. Zeta.3 In other words,
freedom from arbitrariness, capriciousness and whimsicality is the test of
constitutionality." (p. 17, Brief of Amicus Cuiae in Behalf of Silay-Saravia
Planters' Association, Attys. Taada, Teehankee and Carreon.) And there is
not enough showing here of unreasonableness in the legislation in question.
Quite to the contrary, as will be discussed anon, We find all the provisions of
the impugned act to be germane to the end being pursued.
Social justice
But it is not police power alone that sustains the validity of the statutory
provision in dispute. Having in-view its primary objective to promote the
interests of labor, it can never be possible that the State would be bereft of
constitutional authority to enact legislations of its kind. Here, in the
Philippines, whenever any government measure designed for the
advancement of the working class is impugned on constitutional grounds and
shadows of doubt are cast over the scope of the State's prerogative in
respect thereto, the imperious mandate of the social justice ideal
consecrated in our fundamental laws, both the old and the new,4 asserts its
majesty, calling upon the courts to accord utmost consideration to the spirit
animating the act assailed, not just for the sake of enforcing the explicit
social justice provisions of the article on "Declaration of Principles and State
Policies", but more fundamentally, to serve the sacred cause of human
dignity, which is actually what lies at the core of those constitutional
precepts as it is also the decisive element always in the determination of any
controversy between capital and labor.
Thus, Section 5 of Article II of the Constitution of 1935, under the aegis of
which the law in question was enacted, made it one of the declared
principles to which the people committed themselves that "the promotion of
social justice to insure the well being and economic security of all the people
should be the concern of the State." More specifically in regard to labor,
there was also Section 6 of Article XIX, to the effect that "the State shall
afford protection to labor... and shall regulate the relation between ... labor
and capital in industry and in agriculture."5 It is difficult to conceive of any
legislation more aptly rooted in the declared principle and the plain
injunction of the old Constitution just quoted than the Act under discussion
which is a law to regulate the relations between the centrals and the planters
with the primordial objective of protecting and promoting the interests of
labor.-In regard then to the arguments of the centrals relative to due process
and the sanctity of contractual obligations as well as the freedom of contract,
We hold that more cogently than in regard to the exertion of police power as
discussed above, the criterion for determining whether or not social justice

has been overextended in any given case is nothing more than the economic
viability or feasibility of the proposed law in favor of labor, and certainly not
the existence of exceptional circumstances. In other words, as long as capital
in industry or agriculture will not be fatally prejudiced to the extent of
incurring losses as a result of its enforcement, any legislation to improve
labor conditions would be valid, provided the assailed legislation is more or
less demanded as a measure to improve the situation in which the workers
and laborers are actually found. And in the case at bar, there is not even a
pretension that the finances of the centrals would be anywhere in the red as
a result of the enforcement of Republic Act 809.
In the light of the foregoing considerations, We do not find the position of the
Central that Section I of Republic Act 809 interferes unconstitutionally with
existing contracts and the freedom of all the parties concerned in entering
into new ones to be sufficiently persuasive.
B
THE ACT DOES NOT VIOLATE THE EQUAL PROTECTION CLAUSE.
No unequal protection of the laws
It is next argued that the challenged Act denies equal protection of the laws
in several ways to the different groups of laborers in the sugar industry. For
instance, it is pointed out that whereas it alleviates the condition of the
workers in some sugar plantations, it does not provide for similar treatment
to the laborers in the centrals. In fact, it is stressed, even among those
working in the sugar farms, there is unequal treatment, not only because
Section 1 of the law expressly excludes from its application milling districts
with centrals having an actual production of less than one hundred fifty
thousand piculs of refined sugar, but also according to the schedule
prescribed in the same section, the share of the planters together with the
resultant share of the laborers is made proportional to the amount of
production of the corresponding mills instead of being uniform. So also it is
decried that even as among milling districts producing not less than 150,000
piculs, only the laborers working in the plantations within the districts where
the majority of the planters do not have written milling contracts with the
respective centrals are entitled to the benefits ordained by the law and not
all the laborers in all plantations where the planters have been given
increase in their shares, regardless of the existence of such majority.
Petition dismissed being moot and academic.