Association of Small Landowners in the Philippines vs.

Secretary of Agrarian Reform

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 (PP131s)
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.
Paat vs. Court of Appeals
PAAT v CA
G.R. No. 111107
January 10, 1997

FACTS:

On May 19, 1989 when the truck of private respondent Victoria de Guzman while on its way
to Bulacan from San Jose, Baggao, Cagayan, was seized by the Department of Environment
and Natural Resources (DENR, for brevity) personnel in Aritao, Nueva Vizcaya because the
driver could not produce the required documents for the forest products found concealed in
the truck.

LOWER COURTS:

* CENRO: Petitioner Jovito Layugan, the Community Environment and Natural Resources
Officer (CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order of confiscation of the
truck and gave the owner thereof fifteen (15) days within which to submit an explanation
why the truck should not be forfeited. Private respondents, however, failed to submit the
required explanation.

* RED- DENR: On June 22, 1989,i[1] Regional Executive Director Rogelio Baggayan of DENR
sustained petitioner Layugan's action of confiscation and ordered the forfeiture of the truck
invoking Section 68-A of Presidential Decree No. 705 as amended by Executive Order No.
277. Private respondents filed a letter of reconsideration dated June 28, 1989 of the June
22, 1989 order of Executive Director Baggayan, which was, however, denied in a
subsequent order of July 12, 1989.ii[2]

* DENR-SECRETARY (Pending resolution)

* RTC (action for replevin): denied motion to dismiss by Paat (DENR-RED)

* CA (review): denied, has legal questions involved.

ISSUES & RULINGS:

(1) Without violating the principle of exhaustion of administrative remedies, may an action
for replevin prosper to recover a movable property which is the subject matter of an
administrative forfeiture proceeding in the Department of Environment and Natural
Resources pursuant to Section 68-A of P. D. 705, as amended, entitled The Revised Forestry
Code of the Philippines?

NO, before a party is allowed to seek the intervention of the court, it is a pre-condition that
he should have availed of all the means of administrative processes afforded him. Hence, if
a remedy within the administrative machinery can still be resorted to by giving the
administrative officer concerned every opportunity to decide on a matter that comes within
his jurisdiction then such remedy should be exhausted first before court's judicial power can
be sought. The premature invocation of court's intervention is fatal to one's cause of action.

(2) Are the Secretary of DENR and his representatives empowered to confiscate and forfeit
conveyances used in transporting illegal forest products in favor of the government?
YES.

SECTION 68-A. Administrative Authority of the Department or His Duly Authorized

Representative To Order Confiscation. In all cases of violation of this Code or other forest
laws, rules and regulations, the Department Head or his duly authorized representative,
may order the confiscation of any forest products illegally cut, gathered, removed, or
possessed or abandoned, and all conveyances used either by land, water or air in the
commission of the offense and to dispose of the same in accordance with pertinent laws,
regulations and policies on the matter. (Underline ours)

It is, thus, clear from the foregoing provision that the Secretary and his duly authorized
representatives are given the authority to confiscate and forfeit any conveyances utilized in
violating the Code or other forest laws, rules and regulations. The phrase to dispose of the
same is broad enough to cover the act of forfeiting conveyances in favor of the
government. The only limitation is that it should be made in accordance with pertinent
laws, regulations or policies on the matter.

SECTION 68. xxx

xxx

The court shall further order the confiscation in favor of the government of the timber or
any forest products cut, gathered, collected, removed, or possessed, as well as the
machinery, equipments, implements and tools illegaly [sic] used in the area where the
timber or forest products are found. (Underline ours)

A reading, however, of the law persuades us not to go along with private respondents'
thinking not only because the aforequoted provision apparently does not mention nor
include conveyances that can be the subject of confiscation by the courts, but to a large
extent, due to the fact that private respondents' interpretation of the subject provision
unduly restricts the clear intention of the law and inevitably reduces the other provision of
Section 68-A.

It is interesting to note that Section 68-A is a new provision authorizing the DENR to
confiscate, not only conveyances,' but forest products as well. On the other hand,
confiscation of forest products by the court' in a criminal action has long been provided for
in Section 68. If as private respondents insist, the power on confiscation cannot be
exercised except only through the court under Section 68, then Section 68-A would have no
purpose at all.

it is clear that a suit for replevin can not be sustained against the petitioners for the subject
truck taken and retained by them for administrative forfeiture proceedings in pursuant to
Section 68-A of the P. D. 705, as amended.

Section 68-A of P.D. 705, as amended, unquestionably warrants the confiscation as well as
the disposition by the Secretary of DENR or his duly authorized representatives of the
conveyances used in violating the provision of forestry laws. Evidently, the continued
possession or detention of the truck by the petitioners for administrative forfeiture
proceeding is legally permissible, hence , no wrongful detention exists in the case at bar.

OBITER DICTA:
(1) the principle of exhaustion of administrative remedies as tested by a battery of cases is
not an ironclad rule. This doctrine is a relative one and its flexibility is called upon by the
peculiarity and uniqueness of the factual and circumstantial settings of a case. Hence, it is
disregarded

(1) when there is a violation of due process,

(2) when the issue involved is purely a legal question,
(3) when the administrative action is patently illegal amounting to lack or excess of
jurisdiction,
(4) when there is estoppel on the part of the administrative agency concerned,
(5) when there is irreparable injury,
(6) when the respondent is a department secretary whose acts as an alter ego of the
President bears the implied and assumed approval of the latter,
(7) when to require exhaustion of administrative remedies would be unreasonable,
(8) when it would amount to a nullification of a claim,
(9) when the subject matter is a private land in land case proceedings,
(10) when the rule does not provide a plain, speedy and adequate remedy, and
(11) when there are circumstances indicating the urgency of judicial intervention.

(2) the enforcement of forestry laws, rules and regulations and the protection, development
and management of forest lands fall within the primary and special responsibilities of the
Department of Environment and Natural Resources.

(3) The essence of due process is simply an opportunity to be heard, or as applied to

administrative proceedings, an opportunity to explain one's side or an opportunity to seek a
reconsideration of the action or ruling complained of. A formal or trial type hearing is not at
all times and in all instances essential. The requirements are satisfied when the parties are
afforded fair and reasonable opportunity to explain their side of the controversy at hand.
What is frowned upon is the absolute lack of notice or hearing.