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 (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.