1.
GONZALES v CA constitutional prohibition against transferring private
Gonzales vs Court of Appeals
G..R. No. 36213
June 29, 1989
Facts:
The petitioners leased a lot in the subdivision on which they
built their house, and, by tolerance of the subdivision owner,
they cultivated some vacant adjoining lots. The Court of
Agrarian Relations, as well as the Court of Appeals, ruled that
"the plaintiffs are not de jure agricultural tenants."
On October 26, 1988, Lucia A. Sison filed a motion to be
substituted in lieu of the private respondents Andres Agcaoile
(who died on May 20, 1976) and Leonora Agcaoile (who died
on March 22, 1979) as she inherited, and is now the registered
owner of, nine (9) unsold lots in the subdivision covered.
On February 22, 1989, this Court granted her motion. The facts
of this case are not disputed and are recited in the appealed
decision dated December 6, 1972 of the Court of Appeals.
Issue:
W/N an agricultural tenancy relationship can be created over
land embraced in an approved residential subdivision.
Held:
There is no merit in the petitioners' argument that inasmuch as
residential and commercial lots may be considered
"agricultural" (Krivenko vs. Register of Deeds, 79 Phil. 461) an
agricultural tenancy can be established on land in a residential
subdivision. The Krivenko decision interpreting the
agricultural land to individuals, corporations, or associations
not qualified to acquire or hold lands of the public domain,
save in the case of hereditary succession (Art. XIII Sec. 5, 1935
Constitution; later Art. XIV, Sec. 14, 1973 Constitution; Art.
XII, Sec. 7, 1987 Constitution) has nothing to do with
agricultural tenancy. An agricultural leasehold cannot be
established on land which has ceased to be devoted to
cultivation or farming because of its conversion into a
residential subdivision.
Petitioners may not invoke Section 36(l) of Republic Act No.
3844 which provides that "when the lessor-owner fails to
substantially carry out the conversion of his agricultural land
into a subdivision within one year after the dispossession of the
lessee, the lessee shall be entitled to reinstatement and
damages," for the petitioners were not agricultural lessees or
tenants of the land before its conversion into a residential
subdivision in 1955. Not having been dispossessed by the
conversion of the land into a residential subdivision, they may
not claim a right to reinstatement.
On the other hand, the petitioners' tactic of entering the
subdivision as lessee of a homelot and thereafter cultivating
some unsold lots ostensibly for temporary use as a home
garden, but covertly for the purpose of later claiming the land
as "tenanted" farm lots, recalls the fable of the camel that
sought shelter inside its master's tent during a storm, and once
inside, kicked its master out of the tent. Here, the private
respondents' tolerance of the petitioners' supposedly temporary
use of some vacant lots in the subdivision was seized by the
latter as a weapon to deprive the respondents of their land.
WHEREFORE, finding no reversible error in the decision of
the Court of Appeals, We deny the petition for review for lack
of merit.
2. LUZ FARMS V SEC OF DAR
Luz Farms v. Secretary of DAR
G.R. No. 86889 December 4, 1990
Facts:
On 10 June 1988, RA 6657 was approved by the President of
the Philippines, which includes, among others, the raising of
livestock, poultry and swine in its coverage.
Petitioner Luz Farms, a corporation engaged in the livestock
and poultry business, avers that it would be adversely affected
by the enforcement of sections 3(b), 11, 13, 16 (d), 17 and 32
of the said law. Hence, it prayed that the said law be declared
unconstitutional. The mentioned sections of the law provies,
among others, the product-sharing plan, including those
engaged in livestock and poultry business.
Luz Farms further argued that livestock or poultry raising is not
similar with crop or tree farming. That the land is not the
primary resource in this undertaking and represents no more
than 5% of the total investments of commercial livestock and
poultry raisers. That the land is incidental but not the principal
factor or consideration in their industry. Hence, it argued that it
should not be included in the coverage of RA 6657 which
covers agricultural lands.
Issue: Whether or not certain provisions of RA 6657 is
unconstitutional for including in its definition of Agriculture
the livestock and poultyr industry?
Ruling:
The Court held YES.
Looking into the transcript of the Constitutional Commission
on the meaning of the word agriculture, it showed that the
framers never intended to include livestock and poultry
industry in the coverage of the constitutionally mandated
agrarian reform program of the government.
Further, Commissioner Tadeo pointed out that the reasin why
they used the term farmworkers rather than agricultural
workers in the said law is because agricultural workers
includes the livestock and poultry industry, hence, since they
do not intend to include the latter, they used farmworkers to
have distinction.
Hence, there is merit on the petitioners argument that the
product-sharing plan applied to corporate farms in the
contested provisions is unreasonable for being consficatory and
violative of the due process of law.
3. ASSOCIATION OF SMALL LANDOWNDERS IN THE
PHILS V. SEC. 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 sufficient money hence, bonds, and other securities, i.e., shares
also owners of other properties must be made to share the of stocks, may be used for just compensation.
burden of implementing land reform must be rejected. There is
a substantial distinction between these two classes of owners
4. QUISMUNDO V CA
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 5. MORTA V OCCIDENTAL
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 6. HACIENDA LUISITA V PARC (PRESIDENTIAL
funds if all compensation have to be made in cash if AGRARIAN REFORM COUNCIL)
everything is in cash, then the government will not have
Hacienda Luisita vs PARC
Case Digest GR 171101 July 5 2011 Nov 22 2011
Facts:
In 1988, RA 6657 or the CARP law was passed. It is a program
aimed at redistributing public and private agricultural lands to
farmers and farmworkers who are landless. One of the lands
covered by this law is the Hacienda Luisita, a 6,443-hectare
mixed agricultural-industrial-residential expanse straddling
several municipalities of Tarlac. Hacienda Luisita was bought
in 1958 from the Spanish owners by the Tarlac Development
Corporation (TADECO), which is owned and/or controlled by
Jose Cojuanco Sr., Group. Back in 1980, the Martial Law
administration filed an expropriation suit against TADECO to
surrender the Hacienda to the then Ministry of Agrarian
Reform (now DAR) so that the land can be distributed to the
farmers at cost. The RTC rendered judgment ordering
TADECO to surrender Hacienda Luisita to the MAR.
In 1988, the OSG moved to dismiss the governments case
against TADECO. The CA dismissed it, but the dismissal was
subject to the condition that TADECO shall obtain the approval
of FWB (farm worker beneficiaries) to the SDP (Stock
Distribution Plan) and to ensure its implementation.
Sec 31 of the CARP Law allows either land transfer or stock
transfer as two alternative modes in distributing land ownership
to the FWBs. Since the stock distribution scheme is the
preferred option of TADECO, it organized a spin-off
corporation, the Hacienda Luisita Inc. (HLI), as vehicle to
facilitate stock acquisition by the farmers.
After conducting a follow-up referendum and revision of terms
of the Stock Distribution Option Agreement (SDOA) proposed
by TADECO, the Presidential Agrarian Reform Council
(PARC), led by then DAR Secretary Miriam Santiago,
approved the SDP of TADECO/HLI through Resolution 89-12-
2 dated Nov 21, 1989.
From 1989 to 2005, the HLI claimed to have extended those
benefits to the farmworkers. Such claim was subsequently
contested by two groups representing the interests of the
farmers the HLI Supervisory Group and the AMBALA. In
2003, each of them wrote letter petitions before the DAR
asking for the renegotiation of terms and/or revocation of the
SDOA. They claimed that they havent actually received those
benefits in full, that HLI violated the terms, and that their lives
havent really improved contrary to the promise and rationale
of the SDOA.
The DAR created a Special Task Force to attend to the issues
and to review the terms of the SDOA and the Resolution 89-
12-2. Adopting the report and the recommendations of the Task
Force, the DAR Sec recommended to the PARC (1) the
revocation of Resolution 89-12-2 and (2) the acquisition of
Hacienda Luisita through compulsory acquisition scheme.
Consequently, the PARC revoked the SDP of TADECO/HLI
and subjected those lands covered by the SDP to the mandated
land acquisition scheme under the CARP law. These acts of the
PARC was assailed by HLI via Rule 65.
On the other hand, FARM, an intervenor, asks for the
invalidation of Sec. 31 of RA 6657, insofar as it affords the
corporation, as a mode of CARP compliance, to resort to stock
transfer in lieu of outright agricultural land transfer. For
FARM, this modality of distribution is an anomaly to be
annulled for being inconsistent with the basic concept of
agrarian reform ingrained in Sec. 4, Art. XIII of the
Constitution.
Issue 1: W/N PARC has the authority to revoke the Stock
Distribution Plan or SDP
Yes. Under Sec. 31 of RA 6657, as implemented by DAO 10,
the authority to approve the plan for stock distribution of the
corporate landowner belongs to PARC. It may be that RA 6657
or other executive issuances on agrarian reform do not
explicitly vest the PARC with the power to revoke/recall an
approved SDP, but such power or authority is deemed
possessed by PARC under the principle of necessary
implication, a basic postulate that what is implied in a statute is
as much a part of it as that which is expressed.Following this
doctrine, the conferment of express power to approve a plan for
stock distribution of the agricultural land of corporate owners
necessarily includes the power to revoke or recall the approval
of the plan.
Issue 2: W/N the Court may exercise its power of judicial
review over the constitutionality of Sec 31 of RA 6657
No. First, the intervenor FARM failed to challenged the
constitutionality of RA 6657, Sec 31 at the earliest possible
opportunity. It should have been raised as early as Nov 21,
1989, when PARC approved the SDP of HLI or at least within
a reasonable time thereafter. Second, the constitutionality of
RA 6657 is not the very lis mota of this case. Before the SC,
the lis mota of the petitions filed by the HLI is whether or not
the PARC acted with grave abuse of discretion in revoking the
SDP of HLI. With regards to the original positions of the
groups representing the interests of the farmers, their very lis
mota is the non-compliance of the HLI with the SDP so that the
the SDP may be revoked. Such issues can be resolved without
delving into the constitutionality of RA 6657.
Hence, the essential requirements in passing upon the
constitutionality of acts of the executive or legislative
departments have not been met in this case.
Issue 3: W/N Sec 31 of RA 6657 is consistent with the
Constitutions concept of agrarian reform
Yes. The wording of the Art XIII, Sec 4 of the Constitution is
unequivocal: the farmers and regular farmworkers have a right
to own directly or collectively the lands they till.The basic law
allows two (2) modes of land distribution: direct and indirect
ownership. Direct transfer to individual farmers is the most
commonly used method by DAR and widely accepted. Indirect
transfer through collective ownership of the agricultural land is
the alternative to direct ownership of agricultural land by
individual farmers. Sec. 4 EXPRESSLY authorizes collective
ownership by farmers. No language can be found in the 1987
Constitution that disqualifies or prohibits corporations or
cooperatives of farmers from being the legal entity through
which collective ownership can be exercised.The word
collective is defined as indicating a number of persons or
things considered as constituting one group or aggregate, while
collectively is defined as in a collective sense or manner; in a
mass or body. By using the word collectively, the Constitution
allows for indirect ownership of land and not just outright
agricultural land transfer. This is in recognition of the fact that
land reform may become successful even if it is done through
the medium of juridical entities composed of farmers.The stock
distribution option devised under Sec. 31 of RA 6657 hews
with the agrarian reform policy, as instrument of social justice
under Sec. 4 of Article XIII of the Constitution. Albeit land
ownership for the landless appears to be the dominant theme of
that policy, the Court emphasized that Sec. 4, Article XIII of
the Constitution, as couched, does not constrict Congress to
passing an agrarian reform law planted on direct land transfer
to and ownership by farmers and no other, or else the
enactment suffers from the vice of unconstitutionality. If the
intention were otherwise, the framers of the Constitution would
have worded said section in a manner mandatory in character.
ISSUES:
I. Whether or not the operative fact doctrine is applicable to
the present case
II. Whether or not Sec. 31 of RA 6657 or the Comprehensive
Agrarian Reform Law of 1988 is constitutional
III. Whether or not the Court properly determined the coverage
of compulsory acquisition
IV. Whether or not the matter on just compensation has been
correctly passed upon by the Court
V. Whether or not the subject agricultural lands may be sold to
third parties though they have not been fully paid
VI. Whether HLI violated any of the provisions under the SDP
VII. Whether or not the ruling that the qualified FWBs should
be given an option to remain as stockholders of HLI is valid
HELD:
(1) The Operative Fact Doctrine is not limited to invalid or
unconstitutional laws. Contrary to the stance of respondents,
the operative fact doctrine does not only apply to laws
subsequently declared unconstitutional or unlawful, as it also
applies to executive acts subsequently declared as invalid. The
"operative fact" doctrine is embodied in De Agbayani v. Court
of Appeals, wherein it is stated that a legislative or executive
act, prior to its being declared as unconstitutional by the courts,
is valid and must be complied with. Evidently, the operative
fact doctrine is not confined to statutes and rules and
regulations issued by the executive department that are
accorded the same status as that of a statute or those which are
quasi-legislative in nature.
(2) As We have succinctly discussed in Our July 5, 2011
Decision, it took the Farmworkers Agrarian
Reform Movement (FARM) some eighteen (18) years from
November 21, 1989 before it challenged the
constitutionality of Sec. 31 of RA 6657. The question of
constitutionality will not be passed upon by the Court unless it
is properly raised and presented in an appropriate case at the
first opportunity. FARM is, therefore, remiss in belatedly
questioning the constitutionality of Sec. 31 of RA 6657. The
second requirement that the constitutional question should be
raised at the earliest possible opportunity is clearly wanting.
The last but the most important requisite that the constitutional
issue must be the very lis mota of the case does not likewise
obtain. The lis mota aspect is not present, the constitutional
issue tendered not being critical to the resolution of the case.
The unyielding rule has been to avoid, whenever plausible, an
issue assailing the constitutionality of a statute or governmental
act. If some other grounds exist by which judgment can be
made without touching the constitutionality of a law, such
recourse is favored. Based on the foregoing disquisitions, We
maintain that this Court is NOT compelled to rule on the
constitutionality of Sec. 31 of RA 6657.
(3) FARM argues that this Court ignored certain material
facts when it limited the maximum area to be covered to
4,915.75 hectares, whereas the area that should, at the least,
be covered is 6,443 hectares, which is the agricultural land
allegedly covered by RA 6657 and previously held by
Tarlac Development Corporation (Tadeco). We cannot
subscribe to this view. Since what is put in issue before the
Court is the propriety of the revocation of the SDP, which only
involves 4,915.75 has. of agricultural land and not 6,443 has.,
then We are constrained to rule only as regards the 4,915.75
has. of agricultural land.
(4) In Our July 5, 2011 Decision, We stated that "HLI shall
be paid just compensation for the remaining agricultural
land that will be transferred to DAR for land distribution
to the FWBs." We also ruled that the date of the "taking" is
November 21, 1989, when PARC approved HLIs SDP per
PARC Resolution No. 89-12-2.
We maintain that the date of "taking" is November 21, 1989,
the date when PARC approved HLIs SDP per PARC
Resolution No. 89-12-2, in view of the fact that this is the time
that the FWBs were considered to own and possess the
agricultural lands in Hacienda Luisita. To be precise, these
lands became subject of the agrarian reform coverage through
the stock distribution scheme only upon the approval of the
SDP, that is, November 21, 1989. Thus, such approval is akin
to a notice of coverage ordinarily issued under compulsory
acquisition.
(5) There is a view that since the agricultural lands in
Hacienda Luisita were placed under CARP coverage
through the SDOA scheme on May 11, 1989, then the 10-
year period prohibition on the transfer of awarded lands
under RA 6657 lapsed on May 10, 1999, and, consequently,
the qualified FWBs should already be allowed to sell these
lands with respect to their land interests to third parties,
including HLI, regardless of whether they have fully paid
for the lands or not. The proposition is erroneous. Under RA
6657 and DAO 1, the awarded lands may only be transferred or
conveyed after ten (10) years from the issuance and registration
of the emancipation patent (EP) or certificate of land ownership
award (CLOA). Considering that the EPs or CLOAs have not
yet been issued to the qualified FWBs in the instant case, the
10-year prohibitive period has not even started. Significantly,
the reckoning point is the issuance of the EP or CLOA, and not
the placing of the agricultural lands under CARP coverage.
(6) AMBALA and FARM reiterate that improving the
economic status of the FWBs is among the legal obligations
of HLI under the SDP and is an imperative imposition by
RA 6657 and DAO 10. FARM further asserts that "[i]f that
minimum threshold is not met, why allow [stock distribution
option] at all, unless the purpose is not social justice but a
political accommodation to the powerful."
Contrary to the assertions of AMBALA and FARM, nowhere
in the SDP, RA 6657 and DAO 10 can it be inferred that
improving the economic status of the FWBs is among the legal
obligations of HLI under the SDP or is an imperative
imposition by RA 6657 and DAO 10, a violation of which
would justify discarding the stock distribution option.
(7) Upon a review of the facts and circumstances, We
realize that the FWBs will never have control over these
agricultural lands for as long as they remain as
stockholders of HLI. In line with Our finding that control over
agricultural lands must always be in the hands of the farmers,
We reconsider our ruling that the qualified FWBs should be
given an option to remain as stockholders of HLI, inasmuch as
these qualified FWBs will never gain control given the present
proportion of shareholdings in HLI.
Moreover, bearing in mind that with the revocation of the
approval of the SDP, HLI will no longer be operating under
SDP and will only be treated as an ordinary private
corporation; the FWBs who remain as stockholders of HLI will
be treated as ordinary stockholders and will no longer be under
the protective mantle of RA 6657.
In addition to the foregoing, in view of the operative fact
doctrine, all the benefits and homelots received by all the
FWBs shall be respected with no obligation to refund or return
them, since, as We have mentioned in our July 5, 2011
Decision, "the benefits x x x were received by the FWBs as
farmhands in the agricultural enterprise of HLI and other fringe
benefits were granted to them pursuant to the existing
collective bargaining agreement with Tadeco."