175 SCRA 343 – Political Law – Constitutional Law – Bill of Rights – Equal Protection –

Valid Classification
Eminent Domain – Just Compensation
These are four consolidated cases questioning the constitutionality of the
Comprehensive Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian Land
Reform Code or R.A. No. 3844).
Brief background: Article XIII of the Constitution on Social Justice and Human Rights
includes a call for the adoption by the State of an agrarian reform program. 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. RA 3844
was enacted in 1963. P.D. No. 27 was promulgated in 1972 to provide for the
compulsory acquisition of private lands for distribution among tenant-farmers and to
specify maximum retention limits for landowners. In 1987, President Corazon
Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of
PD 27 and providing for the valuation of still unvalued lands covered by the decree as
well as the manner of their payment. In 1987, P.P. No. 131, instituting a comprehensive
agrarian reform program (CARP) was enacted; later, E.O. No. 229, providing the
mechanics for its (PP131’s) implementation, was also enacted. Afterwhich is the
enactment of R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This law,
while considerably changing the earlier mentioned enactments, nevertheless gives them
suppletory effect insofar as they are not inconsistent with its provisions.
[Two of the consolidated cases are discussed below]
G.R. No. 78742: (Association of Small Landowners vs Secretary)
The Association of Small Landowners in the Philippines, Inc. sought exception from the
land distribution scheme provided for in R.A. 6657. The Association is comprised of
landowners of ricelands and cornlands whose landholdings do not exceed 7 hectares.
They invoke that since their landholdings are less than 7 hectares, they should not be
forced to distribute their land to their tenants under R.A. 6657 for they themselves have
shown willingness to till their own land. In short, they want to be exempted from agrarian
reform program because they claim to belong to a different class.
G.R. No. 79777: (Manaay vs Juico)
Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and
229) on the ground that these laws already valuated their lands for the agrarian reform
program and that the specific amount must be determined by the Department of
Agrarian Reform (DAR). Manaay averred that this violated the principle in eminent
domain which provides that only courts can determine just compensation. This, for
Manaay, also violated due process for under the constitution, no property shall be taken
for public use without just compensation.
Manaay also questioned the provision which states that landowners may be paid for
their land in bonds and not necessarily in cash. Manaay averred that just compensation
has always been in the form of money and not in bonds.
ISSUE:
1. Whether or not there was a violation of the equal protection clause.
2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be in
terms of cash.
HELD:
1. No. The Association had not shown any proof that they belong to a different class
exempt from the agrarian reform program. Under the law, 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. 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.
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. The
Association 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. In the
contrary, it appears that Congress is right in classifying small landowners as part of the
agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the
courts. However, there is no law which prohibits administrative bodies like the DAR from
determining just compensation. In fact, just compensation can be that amount agreed
upon by the landowner and the government – even without judicial intervention so long
as both parties agree. The DAR can determine just compensation through appraisers
and if the landowner agrees, then judicial intervention is not needed. What is
contemplated by law however is that, the just compensation determined by an
administrative body is merely preliminary. If the landowner does not agree with the
finding of just compensation by an administrative body, then it can go to court and the
determination of the latter shall be the final determination. This is even so provided by
RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the
court of proper jurisdiction for final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in traditional
exercise of eminent domain. The agrarian reform program is a revolutionary exercise of
eminent domain. The program will require billions of pesos in funds if all compensation
have to be made in cash – if everything is in cash, then the government will not have
sufficient money hence, bonds, and other securities, i.e., shares of stocks, may be used
for just compensation.