Land Ti Full Text Luz Farms V Sec of Dar To Philippine Banking V Lui She

Land Titles and Deeds |1
[G.R. No. 86889 : December 4, 1990.]

LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM,
Respondent.
PARAS, J.:
This is a petition for prohibition with prayer for restraining order and/or preliminary and permanent
injunction against the Honorable Secretary of the Department of Agrarian Reform for acting without
jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988 and in promulgating the Guidelines and Procedure Implementing Production
and Profit Sharing under R.A. No. 6657, insofar as the same apply to herein petitioner, and further from
performing an act in violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes the raising of
livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and Procedures
Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of R.A. No. 6657 (Rollo, p.
80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and Regulations implementing
Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and together
with others in the same business allegedly stands to be adversely affected by the enforcement of Section
3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as
Comprehensive Agrarian Reform Law and of the Guidelines and Procedures Implementing Production and
Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules and Regulations
Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp. 2-36).: rd
Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional.
Meanwhile, it is also prayed that a writ of preliminary injunction or restraining order be issued enjoining
public respondents from enforcing the same, insofar as they are made to apply to Luz Farms and other
livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms' prayer for the
issuance of a preliminary injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said Motion for
Reconsideration regarding the injunctive relief, after the filing and approval by this Court of an injunction
bond in the amount of P100,000.00. This Court also gave due course to the petition and required the parties
to file their respective memoranda (Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as his Memorandum
(Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of "Agricultural,
Agricultural Enterprise or Agricultural Activity."
(b) Section 11 which defines "commercial farms" as "private agricultural lands devoted to commercial,
livestock, poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to summarily
determine the just compensation to be paid for lands covered by the Comprehensive Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in Section 13 —
". . . (W)hereby three percent (3%) of the gross sales from the production of such lands are distributed within
sixty (60) days of the end of the fiscal year as compensation to regular and other farmworkers in such lands
over and above the compensation they currently receive: Provided, That these individuals or entities realize
gross sales in excess of five million pesos per annum unless the DAR, upon proper application, determine a
lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten (10%) of the net profit after tax
shall be distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal
year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the
Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock, poultry
and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance
therewith.:-cralaw
The constitutional provision under consideration reads as follows:
ARTICLE XIII
x x x
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. 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. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological, developmental, or equity
considerations, and subject to the payment of just compensation. In determining retention limits, the State
shall respect the rights of small landowners. The State shall further provide incentives for voluntary land-
sharing.
x x x"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In fact, it acknowledges
the correctness of the decision of this Court in the case of the Association of Small Landowners in the
Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14 July 1989) affirming the constitutionality
of the Comprehensive Agrarian Reform Law. It, however, argued that Congress in enacting the said law has
transcended the mandate of the Constitution, in including land devoted to the raising of livestock, poultry
and swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree farming.
Land is not the primary resource in this undertaking and represents no more than five percent (5%) of the
total investment of commercial livestock and poultry raisers. Indeed, there are many owners of residential
lands all over the country who use available space in their residence for commercial livestock and raising
purposes, under "contract-growing arrangements," whereby processing corporations and other commercial
livestock and poultry raisers (Rollo, p. 10). Lands support the buildings and other amenities attendant to the
raising of animals and birds. The use of land is incidental to but not the principal factor or consideration in
productivity in this industry. Including backyard raisers, about 80% of those in commercial livestock and
poultry production occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p.
11).
On the other hand, the public respondent argued that livestock and poultry raising is embraced in the term
"agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper. He cited that
Webster's International Dictionary, Second Edition (1954), defines the following words:
"Agriculture — the art or science of cultivating the ground and raising and harvesting crops, often, including
also, feeding, breeding and management of livestock, tillage, husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock — domestic animals used or raised on a farm, especially for profit.
Farm — a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in constitutional construction is
to ascertain and thereafter assure the realization of the purpose of the framers in the adoption of the
Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).: rd
Ascertainment of the meaning of the provision of Constitution begins with the language of the document
itself. The words used in the Constitution are to be given their ordinary meaning except where technical
terms are employed in which case the significance thus attached to them prevails (J.M. Tuazon & Co. vs.
Land Tenure Administration, 31 SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or of doubtful meaning,
the courts may consider the debates in the constitutional convention as throwing light on the intent of the
framers of the Constitution. It is true that the intent of the convention is not controlling by itself, but as its
proceeding was preliminary to the adoption by the people of the Constitution the understanding of the
convention as to what was meant by the terms of the constitutional provision which was the subject of the
deliberation, goes a long way toward explaining the understanding of the people when they ratified it
(Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the word
"agricultural," clearly show that it was never the intention of the framers of the Constitution to include
livestock and poultry industry in the coverage of the constitutionally-mandated agrarian reform program of
the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A. 3844, as
laud devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle and abandoned
land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture." Commissioner Jamir
proposed to insert the word "ARABLE" to distinguish this kind of agricultural land from such lands as
commercial and industrial lands and residential properties because all of them fall under the general
classification of the word "agricultural". This proposal, however, was not considered because the Committee
contemplated that agricultural lands are limited to arable and suitable agricultural lands and therefore, do
not include commercial, industrial and residential lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed several questions,
among others, quoted as follows:
x x x
"Line 19 refers to genuine reform program founded on the primary right of farmers and farmworkers. I
wonder if it means that leasehold tenancy is thereby proscribed under this provision because it speaks of
the primary right of farmers and farmworkers to own directly or collectively the lands they till. As also
mentioned by Commissioner Tadeo, farmworkers include those who work in piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a poultry
project and for that purpose hires farmworkers therein, these farmworkers will automatically have the right
to own eventually, directly or ultimately or collectively, the land on which the piggeries and poultry projects
were constructed. (Record, CONCOM, August 2, 1986, p. 618).
x x x
The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as
follows:
x x x
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay
Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama rito ang
piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi kasama ang piggery,
poultry at livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural
lands devoted to commercial livestock, poultry and swine raising" in the definition of "commercial farms" is
invalid, to the extent that the aforecited agro-industrial activities are made to be covered by the agrarian
reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage
of agrarian reform. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657
directing "corporate farms" which include livestock and poultry raisers to execute and implement
"production-sharing plans" (pending final redistribution of their landholdings) whereby they are called upon
to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net profits to their
workers as additional compensation is unreasonable for being confiscatory, and therefore violative of due
process (Rollo, p. 21).:-cralaw
It has been established that this Court will assume jurisdiction over a constitutional question only if it is
shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there
must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination,
the constitutional question must have been opportunely raised by the proper party, and the resolution of
the question is unavoidably necessary to the decision of the case itself (Association of Small Landowners of
the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico,
G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it will
not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this
conclusion, its only criterion will be the Constitution and God as its conscience gives it in the light to probe
its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that
cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the awesome power of
the Congress and Executive, the Court will not hesitate "to make the hammer fall heavily," where the acts of
these departments, or of any official, betray the people's will as expressed in the Constitution (Association
of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo,
G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes
the duty of the judiciary to declare what the other branches of the government had assumed to do, as void.
This is the essence of judicial power conferred by the Constitution "(I)n one Supreme Court and in such lower
courts as may be established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the
1973 Constitution and which was adopted as part of the Freedom Constitution, and Article VIII, Section 1 of
the 1987 Constitution) and which power this Court has exercised in many instances (Demetria v. Alba, 148
SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No.
6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well as the
Implementing Rules and Guidelines promulgated in accordance therewith, are hereby DECLARED null and
void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE permanent.
SO ORDERED.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla, Bidin, Griño-Aquino,
Medialdea and Regalado, JJ., concur.
Feliciano, J., is on leave.
Separate Opinions
SARMIENTO, J., concurring:

I agree that the petition be granted.
It is my opinion however that the main issue on the validity of the assailed provisions of R.A. 6657 (the
Comprehensive Agrarian Reform Law of 1988) and its Implementing Rules and Guidelines insofar as they
include the raising of livestock, poultry, and swine in their coverage cannot be simplistically reduced to a
question of constitutional construction.
It is a well-settled rule that construction and interpretation come only after it has been demonstrated that
application is impossible or inadequate without them. A close reading however of the constitutional text in
point, specifically, Sec. 4, Art. XIII, particularly the phrase, ". . . in case of other farmworkers, to receive a just
share of the fruits thereof," provides a basis for the clear and possible coverage of livestock, poultry, and
swine raising within the ambit of the comprehensive agrarian reform program. This accords with the
principle that every presumption should be indulged in favor of the constitutionality of a statute and the
court in considering the validity of a statute should give it such reasonable construction as can be reached
to bring it within the fundamental law. 1
The presumption against unconstitutionality, I must say, assumes greater weight when a ruling to the
contrary would, in effect, defeat the laudable and noble purpose of the law, i.e., the welfare of the landless
farmers and farmworkers in the promotion of social justice, by the expedient conversion of agricultural lands
into livestock, poultry, and swine raising by scheming landowners, thus, rendering the comprehensive nature
of the agrarian program merely illusory.
The instant controversy, I submit, boils down to the question of whether or not the assailed provisions violate
the equal protection clause of the Constitution (Article II, section 1) which teaches simply that all persons or
things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. 2
There is merit in the contention of the petitioner that substantial distinctions exist between land directed
purely to cultivation and harvesting of fruits or crops and land exclusively used for livestock, poultry and
swine raising, that make real differences, to wit:
x x x
No land is tilled and no crop is harvested in livestock and poultry farming. There are no tenants nor landlords,
only employers and employees.
Livestock and poultry do not sprout from land nor are they "fruits of the land."
Land is not even a primary resource in this industry. The land input is inconsequential that all the commercial
hog and poultry farms combined occupy less than one percent (1%) (0.4% for piggery, 0.2% for poultry) of
the 5.45 million hectares of land supposedly covered by the CARP. And most farms utilize only 2 to 5 hectares
of land.: nad
In every respect livestock and poultry production is an industrial activity. Its use of an inconsequential portion
of land is a mere incident of its operation, as in any other undertaking, business or otherwise.
The fallacy of defining livestock and poultry production as an agricultural enterprise is nowhere more evident
when one considers that at least 95% of total investment in these farms is in the form of fixed assets which
are industrial in nature.
These include (1) animal housing structures and facilities complete with drainage, waterers, blowers, misters
and in some cases even piped-in music; (2) feedmills complete with grinders, mixers, conveyors, exhausts,
generators, etc.; (3) extensive warehousing facilities for feeds and other supplies; (4) anti-pollution
equipment such as bio-gas and digester plants augmented by lagoons and concrete ponds; (5) deepwells,
elevated water tanks, pumphouses and accessory facilities; (6) modern equipment such as sprayers,
pregnancy testers, etc.; (7) laboratory facilities complete with expensive tools and equipment; and a myriad
other such technologically advanced appurtances.
How then can livestock and poultry farmlands be arable when such are almost totally occupied by these
structures?
The fallacy of equating the status of livestock and poultry farmworkers with that of agricultural tenants
surfaces when one considers contribution to output. Labor cost of livestock and poultry farms is no more
than 4% of total operating cost. The 98% balance represents inputs not obtained from the land nor provided
by the farmworkers — inputs such as feeds and biochemicals (80% of the total cost), power cost, cost of
money and several others.
Moreover, livestock and poultry farmworkers are covered by minimum wage law rather than by tenancy
law. They are entitled to social security benefits where tenant-farmers are not. They are paid fixed wages
rather than crop shares. And as in any other industry, they receive additional benefits such as allowances,
bonuses, and other incentives such as free housing privileges, light and water.
Equating livestock and poultry farming with other agricultural activities is also fallacious in the sense that
like the manufacturing sector, it is a market for, rather than a source of agricultural output. At least 60% of
the entire domestic supply of corn is absorbed by livestock and poultry farms. So are the by-products of rice
(rice-bran), coconut (copra meal), banana (banana pulp meal), and fish (fish meal). 3
x x x
In view of the foregoing, it is clear that both kinds of lands are not similarly situated and hence, cannot be
treated alike. Therefore, the assailed provisions which allow for the inclusion of livestock and poultry
industry within the coverage of the agrarian reform program constitute invalid classification and must
accordingly be struck down as repugnant to the equal protection clause of the Constitution.
G.R. No. 78742 July 14, 1989
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B.

ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO,
FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE,
TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSUELO
M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO,
PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, Negros
Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO,
EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME
ABOGADO, CONRADO AVANCENA and ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,

vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE PHILIPPINES,
respondents.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his
way to Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung his
adversary to the ground thinking him dead, but Antaeus rose even stronger to resume their struggle. This
happened several times to Hercules' increasing amazement. Finally, as they continued grappling, it dawned
on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his body was
touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air, beyond the reach of
the sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful
Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of life
and death, of men and women who, like Antaeus need the sustaining strength of the precious earth to stay
alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious
resource among our people. But it is more than a slogan. Through the brooding centuries, it has become a
battle-cry dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as
their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-
being and economic security of all the people," 1 especially the less privileged. In 1973, the new Constitution
affirmed this goal adding specifically that "the State shall regulate the acquisition, ownership, use,
enjoyment and disposition of private property and equitably diffuse property ownership and profits." 2
Significantly, there was also the specific injunction to "formulate and implement an agrarian reform program
aimed at emancipating the tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one
whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but undoubtedly
sincere provisions for the uplift of the common people. These include a call in the following words for the
adoption by the State of an agrarian reform program:
SEC. 4. 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. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations
and subject to the payment of just compensation. In determining retention limits, the State shall respect the
right of small landowners. The State shall further provide incentives for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been
enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated principles. This
was substantially superseded almost a decade later by P.D. No. 27, which was promulgated on October 21,
1972, along with martial law, to provide for the compulsory acquisition of private lands for distribution
among tenant-farmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian
reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land
ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued lands
covered by the decree as well as the manner of their payment. This was followed on July 22, 1987 by
Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and E.O.
No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative
power from the President and started its own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year of spirited debate, was the
enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which
President Aquino signed on June 10, 1988. This law, while considerably changing the earlier mentioned
enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with its
provisions. 4
The above-captioned cases have been consolidated because they involve common legal questions, including
serious challenges to the constitutionality of the several measures mentioned above. They will be the subject
L a n d T i t l e s a n d D e e d s | 10
of one common discussion and resolution, The different antecedents of each case will require separate
treatment, however, and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No.
6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas
Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin
Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified farmers under
P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of
powers, due process, equal protection and the constitutional limitation that no private property shall be
taken for public use without just compensation.
They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said
measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to provide for
retention limits for small landowners. Moreover, it does not conform to Article VI, Section 25(4) and the
other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners argue that the same may be
made only by a court of justice and not by the President of the Philippines. They invoke the recent cases of
EPZA v. Dulay 5 and Manotok v. National Food Authority. 6 Moreover, the just compensation contemplated
by the Bill of Rights is payable in money or in cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also deprives the petitioners
of their property rights as protected by due process. The equal protection clause is also violated because the
order places the burden of solving the agrarian problems on the owners only of agricultural lands. No similar
obligation is imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the
lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse, the
measure would not solve the agrarian problem because even the small farmers are deprived of their lands
and the retention rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier cases
of Chavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of the Philippines,
Inc. v. The National Land Reform Council. 9 The determination of just compensation by the executive
authorities conformably to the formula prescribed under the questioned order is at best initial or preliminary
only. It does not foreclose judicial intervention whenever sought or warranted. At any rate, the challenge to
the order is premature because no valuation of their property has as yet been made by the Department of
Agrarian Reform. The petitioners are also not proper parties because the lands owned by them do not exceed
the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention
limits on tenanted lands and that in any event their petition is a class suit brought in behalf of landowners
with landholdings below 24 hectares. They maintain that the determination of just compensation by the
administrative authorities is a final ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was the
validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and 229
(except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this statute should
itself also be declared unconstitutional because it suffers from substantially the same infirmities as the
earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1. 83-
hectare land, who complained that the DAR was insisting on the implementation of P.D. No. 27 and E.O. No.
228 despite a compromise agreement he had reached with his tenant on the payment of rentals. In a
subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended petition that the
above- mentioned enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros
Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400 planter-members.
This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as decreed
by the Constitution belongs to Congress and not the President. Although they agree that the President could
exercise legislative power until the Congress was convened, she could do so only to enact emergency
measures during the transition period. At that, even assuming that the interim legislative power of the
President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for violating
the constitutional provisions on just compensation, due process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform Fund, an
initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the
Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the receipts of the
sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received through
the Presidential Commission on Good Government and such other sources as government may deem
appropriate. The amounts collected and accruing to this special fund shall be considered automatically
appropriated for the purpose authorized in this Proclamation the amount appropriated is in futuro, not in
esse. The money needed to cover the cost of the contemplated expropriation has yet to be raised and cannot
be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is
traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section 5 of
the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank of the Philippines "shall
compensate the landowner in an amount to be established by the government, which shall be based on the
owner's declaration of current fair market value as provided in Section 4 hereof, but subject to certain
controls to be defined and promulgated by the Presidential Agrarian Reform Council." This compensation
may not be paid fully in money but in any of several modes that may consist of part cash and part bond, with
interest, maturing periodically, or direct payment in cash or bond as may be mutually agreed upon by the
beneficiary and the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful
study of the sugar planters' situation. There is no tenancy problem in the sugar areas that can justify the
application of the CARP to them. To the extent that the sugar planters have been lumped in the same
legislation with other farmers, although they are a separate group with problems exclusively their own, their
right to equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters
(NASP) which claims a membership of at least 20,000 individual sugar planters all over the country. On
September 10, 1987, another motion for intervention was filed, this time by Manuel Barcelona, et al.,
representing coconut and riceland owners. Both motions were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in any
event, the appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of Proc. No.
131 and Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion pesos and thus
specifies the minimum rather than the maximum authorized amount. This is not allowed. Furthermore, the
stated initial amount has not been certified to by the National Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing
evidence the necessity for the exercise of the powers of eminent domain, and the violation of the
fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the said
land for an amount equal to the government assessor's valuation of the land for tax purposes. On the other
hand, if the landowner declares his own valuation he is unjustly required to immediately pay the
corresponding taxes on the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in favor
of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as explained in the
"whereas" clauses of the Proclamation and submits that, contrary to the petitioner's contention, a pilot
project to determine the feasibility of CARP and a general survey on the people's opinion thereon are not
indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to show that they
belong to a different class and should be differently treated. The Comment also suggests the possibility of
Congress first distributing public agricultural lands and scheduling the expropriation of private agricultural
lands later. From this viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition is against the payment of public
money without the corresponding appropriation. There is no rule that only money already in existence can
be the subject of an appropriation law. Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund,
although denominated as an initial amount, is actually the maximum sum appropriated. The word "initial"
simply means that additional amounts may be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the
constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano contends that the
measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;
(3) The power of the President to legislate was terminated on July 2, 1987; and
(4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the
House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process
and the requirement for just compensation, placed his landholding under the coverage of Operation Land
Transfer. Certificates of Land Transfer were subsequently issued to the private respondents, who then
refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under
Operation Land transfer and asked for the recall and cancellation of the Certificates of Land Transfer in the
name of the private respondents. He claims that on December 24, 1986, his petition was denied without
hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted upon when
E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic because they
directly effected the transfer of his land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.
(2) The said executive orders are violative of the constitutional provision that no private property shall be
taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is
anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power
granted to the President under the Transitory Provisions refers only to emergency measures that may be
promulgated in the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due process of law and to
the retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the Constitution.
He likewise argues that, besides denying him just compensation for his land, the provisions of E.O. No. 228
declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be considered as
advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even
small landowners in the program along with other landowners with lands consisting of seven hectares or
more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the motion for
reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the
issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section 6, Article XVIII of
the Transitory Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21.
1972, the tenant-farmer of agricultural land was deemed the owner of the land he was tilling. The leasehold
rentals paid after that date should therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on
December 14, 1987. An appeal to the Office of the President would be useless with the promulgation of E.O.
Nos. 228 and 229, which in effect sanctioned the validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn
lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same. Their
respective lands do not exceed the statutory limit but are occupied by tenants who are actually cultivating
such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed from
his farmholding until such time as the respective rights of the tenant- farmers and the landowner shall have
been determined in accordance with the rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention
because the Department of Agrarian Reform has so far not issued the implementing rules required under
the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel the respondent
to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any
right of retention from persons who own other agricultural lands of more than 7 hectares in aggregate area
or lands used for residential, commercial, industrial or other purposes from which they derive adequate
income for their family. And even assuming that the petitioners do not fall under its terms, the regulations
implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July 10, 1975 (Interim
Guidelines on Retention by Small Landowners, with an accompanying Retention Guide Table), Memorandum
Circular No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No.
18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by Small
Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for
Landowners to Apply for Retention and/or to Protest the Coverage of their Landholdings under Operation
Land Transfer pursuant to P.D. No. 27). For failure to file the corresponding applications for retention under
these measures, the petitioners are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this case notwithstanding
the pendency of their appeal to the President of the Philippines. Moreover, the issuance of the implementing
rules, assuming this has not yet been done, involves the exercise of discretion which cannot be controlled
through the writ of mandamus. This is especially true if this function is entrusted, as in this case, to a separate
department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they
do not own more than seven hectares of agricultural land. Moreover, assuming arguendo that the rules were
intended to cover them also, the said measures are nevertheless not in force because they have not been
published as required by law and the ruling of this Court in Tanada v. Tuvera.10 As for LOI 474, the same is
ineffective for the additional reason that a mere letter of instruction could not have repealed the presidential
decree.
Although holding neither purse nor sword and so regarded as the weakest of the three departments of the
government, the judiciary is nonetheless vested with the power to annul the acts of either the legislative or
the executive or of both when not conformable to the fundamental law. This is the reason for what some
quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed or readily
exercised. The doctrine of separation of powers imposes upon the courts a proper restraint, born of the
nature of their functions and of their respect for the other departments, in striking down the acts of the
legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To
doubt is to sustain. The theory is that before the act was done or the law was enacted, earnest studies were
made by Congress or the President, or both, to insure that the Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality,
requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in the
deliberations and voted on the issue during their session en banc.11 And as established by judge made
doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the essential
requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or
controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional
question must have been opportunely raised by the proper party, and the resolution of the question is
unavoidably necessary to the decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases before us, we hold that the
same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of
sustaining an immediate injury as a result of the acts or measures complained of. 13 And even if, strictly
speaking, they are not covered by the definition, it is still within the wide discretion of the Court to waive
the requirement and so remove the impediment to its addressing and resolving the serious constitutional
questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the
constitutionality of several executive orders issued by President Quirino although they were invoking only
an indirect and general interest shared in common with the public. The Court dismissed the objection that
they were not proper parties and ruled that "the transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of
procedure." We have since then applied this exception in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with constitutional
issues like the ones now before it, it will not hesitate to declare a law or act invalid when it is convinced that
this must be done. In arriving at this conclusion, its only criterion will be the Constitution as God and its
conscience give it the light to probe its meaning and discover its purpose. Personal motives and political
considerations are irrelevancies that cannot influence its decision. Blandishment is as ineffectual as
intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the
hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of these departments, or of
any public official, betray the people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that —
... when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over
the other departments; it does not in reality nullify or invalidate an act of the Legislature, but only asserts
the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in an actual controversy the rights which
that instrument secures and guarantees to them. This is in truth all that is involved in what is termed "judicial
supremacy" which properly is the power of judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that this Court must categorically resolve.
And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more serious challenges
to the constitutionality of the several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has
already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue. As
for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was
authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the Congress of the
Philippines was formally convened and took over legislative power from her. They are not "midnight"
enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987, and the
other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct
to say that these measures ceased to be valid when she lost her legislative power for, like any statute, they
continue to be in force unless modified or repealed by subsequent law or declared invalid by the courts. A
statute does not ipso facto become inoperative simply because of the dissolution of the legislature that
enacted it. By the same token, President Aquino's loss of legislative power did not have the effect of
invalidating all the measures enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially affirmed
the challenged measures and has specifically provided that they shall be suppletory to R.A. No. 6657
whenever not inconsistent with its provisions. 17 Indeed, some portions of the said measures, like the
creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have
been incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the
requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is not
an appropriation measure even if it does provide for the creation of said fund, for that is not its principal
purpose. An appropriation law is one the primary and specific purpose of which is to authorize the release
of public funds from the treasury. 19 The creation of the fund is only incidental to the main objective of the
proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of
Article VI, are not applicable. With particular reference to Section 24, this obviously could not have been
complied with for the simple reason that the House of Representatives, which now has the exclusive power
to initiate appropriation measures, had not yet been convened when the proclamation was issued. The
legislative power was then solely vested in the President of the Philippines, who embodied, as it were, both
houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because
they do not provide for retention limits as required by Article XIII, Section 4 of the Constitution is no longer
tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact is one of its
most controversial provisions. This section declares:
Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary according to factors governing
a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as
determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the
landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that
he is actually tilling the land or directly managing the farm; Provided, That landowners whose lands have
been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them
thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same areas as long as they continue to
cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one subject,
to be expressed in its title, deserves only short attention. It is settled that the title of the bill does not have
to be a catalogue of its contents and will suffice if the matters embodied in the text are relevant to each
other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name
it was called, had the force and effect of law because it came from President Marcos. Such are the ways of
despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could not have
repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is that it was
issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to comply with the
requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless published in the Official
Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect if they were
among those enactments successfully challenged in that case. LOI 474 was published, though, in the Official
Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus cannot
issue to compel the performance of a discretionary act, especially by a specific department of the
government. That is true as a general proposition but is subject to one important qualification. Correctly and
categorically stated, the rule is that mandamus will lie to compel the discharge of the discretionary duty itself
but not to control the discretion to be exercised. In other words, mandamus can issue to require action only
but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the exercise
of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the extraordinary legal
remedy of mandamus to compel action. If the duty is purely ministerial, the courts will require specific action.
If the duty is purely discretionary, the courts by mandamus will require action only. For example, if an inferior
court, public official, or board should, for an unreasonable length of time, fail to decide a particular question
to the great detriment of all parties concerned, or a court should refuse to take jurisdiction of a cause when
the law clearly gave it jurisdiction mandamus will issue, in the first case to require a decision, and in the
second to require that jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and
adequate remedy available from the administrative authorities, resort to the courts may still be permitted if
the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent domain that logically
preclude the application of both powers at the same time on the same subject. In the case of City of Baguio
v. NAWASA, 24 for example, where a law required the transfer of all municipal waterworks systems to the
NAWASA in exchange for its assets of equivalent value, the Court held that the power being exercised was
eminent domain because the property involved was wholesome and intended for a public use. Property
condemned under the police power is noxious or intended for a noxious purpose, such as a building on the
verge of collapse, which should be demolished for the public safety, or obscene materials, which should be
destroyed in the interest of public morals. The confiscation of such property is not compensable, unlike the
taking of property under the power of expropriation, which requires the payment of just compensation to
the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police power in
a famous aphorism: "The general rule at least is that while property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking." The regulation that went "too far" was a law
prohibiting mining which might cause the subsidence of structures for human habitation constructed on the
land surface. This was resisted by a coal company which had earlier granted a deed to the land over its mine
but reserved all mining rights thereunder, with the grantee assuming all risks and waiving any damage claim.
The Court held the law could not be sustained without compensating the grantor. Justice Brandeis filed a
lone dissent in which he argued that there was a valid exercise of the police power. He said:
Every restriction upon the use of property imposed in the exercise of the police power deprives the owner
of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property
without making compensation. But restriction imposed to protect the public health, safety or morals from
dangers threatened is not a taking. The restriction here in question is merely the prohibition of a noxious
use. The property so restricted remains in the possession of its owner. The state does not appropriate it or
make any use of it. The state merely prevents the owner from making a use which interferes with paramount
rights of the public. Whenever the use prohibited ceases to be noxious — as it may because of further
changes in local or social conditions — the restriction will have to be removed and the owner will again be
free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police power and the power
of eminent domain, with the latter being used as an implement of the former like the power of taxation. The
employment of the taxing power to achieve a police purpose has long been accepted. 26 As for the power
of expropriation, Prof. John J. Costonis of the University of Illinois College of Law (referring to the earlier case
of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power) makes the
following significant remarks:
Euclid, moreover, was decided in an era when judges located the Police and eminent domain powers on
different planets. Generally speaking, they viewed eminent domain as encompassing public acquisition of
private property for improvements that would be available for public use," literally construed. To the police
power, on the other hand, they assigned the less intrusive task of preventing harmful externalities a point
reflected in the Euclid opinion's reliance on an analogy to nuisance law to bolster its support of zoning. So
long as suppression of a privately authored harm bore a plausible relation to some legitimate "public
purpose," the pertinent measure need have afforded no compensation whatever. With the progressive
growth of government's involvement in land use, the distance between the two powers has contracted
considerably. Today government often employs eminent domain interchangeably with or as a useful
complement to the police power-- a trend expressly approved in the Supreme Court's 1954 decision in
Berman v. Parker, which broadened the reach of eminent domain's "public use" test to match that of the
police power's standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted areas in the District
of Columbia as a proper exercise of the police power. On the role of eminent domain in the attainment of
this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as
sanitary, there is nothing in the Fifth Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it through the exercise of eminent
domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S Supreme Court
sustained the respondent's Landmarks Preservation Law under which the owners of the Grand Central
Terminal had not been allowed to construct a multi-story office building over the Terminal, which had been
designated a historic landmark. Preservation of the landmark was held to be a valid objective of the police
power. The problem, however, was that the owners of the Terminal would be deprived of the right to use
the airspace above it although other landowners in the area could do so over their respective properties.
While insisting that there was here no taking, the Court nonetheless recognized certain compensatory rights
accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused by the
regulation. This "fair compensation," as he called it, was explained by Prof. Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to
transfer to neighboring properties the authorized but unused rights accruing to the site prior to the
Terminal's designation as a landmark — the rights which would have been exhausted by the 59-story building
that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were
proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the Terminal site by
constructing or selling to others the right to construct larger, hence more profitable buildings on the
transferee sites. 30
The cases before us present no knotty complication insofar as the question of compensable taking is
concerned. To the extent that the measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such owners
of whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under
the power of eminent domain for which payment of just compensation is imperative. The taking
contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to
and the physical possession of the said excess and all beneficial rights accruing to the owner in favor of the
farmer-beneficiary. This is definitely an exercise not of the police power but of the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several measures before
us are challenged as violative of the due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are
prescribed has already been discussed and dismissed. It is noted that although they excited many bitter
exchanges during the deliberation of the CARP Law in Congress, the retention limits finally agreed upon are,
curiously enough, not being questioned in these petitions. We therefore do not discuss them here. The Court
will come to the other claimed violations of due process in connection with our examination of the adequacy
of just compensation as required under the power of expropriation.
The argument of the small farmers that they have been denied equal protection because of the absence of
retention limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too have not
questioned the area of such limits. There is also the complaint that they should not be made to share the
burden of agrarian reform, an objection also made by the sugar planters on the ground that they belong to
a particular class with particular interests of their own. However, no evidence has been submitted to the
Court that the requisites of a valid classification have been violated.
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. 31 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. 32 The Court finds that all these requisites have been met by the measures here
challenged as arbitrary and discriminatory.
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. 33 The petitioners 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.
It is worth remarking at this juncture that a statute may be sustained under the police power only if there is
a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public
generally as distinguished from those of a particular class require the interference of the State and, no less
important, the means employed are reasonably necessary for the attainment of the purpose sought to be
achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform have
been laid down by the Constitution itself, we may say that the first requirement has been satisfied. What
remains to be examined is the validity of the method employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the individual are concerned,
the end does not justify the means. It is not enough that there be a valid objective; it is also necessary that
the means employed to pursue it be in keeping with the Constitution. Mere expediency will not excuse
constitutional shortcuts. There is no question that not even the strongest moral conviction or the most
urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual's
rights. It is no exaggeration to say that a, person invoking a right guaranteed under Article III of the
Constitution is a majority of one even as against the rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of Article III of the Constitution.
With regard to his property, the owner enjoys the added protection of Section 9, which reaffirms the familiar
rule that private property shall not be taken for public use without just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended
for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary
deed of sale may be agreed upon by the parties. 35 It is only where the owner is unwilling to sell, or cannot
accept the price or other conditions offered by the vendee, that the power of eminent domain will come
into play to assert the paramount authority of the State over the interests of the property owner. Private
rights must then yield to the irresistible demands of the public interest on the time-honored justification, as
in the case of the police power, that the welfare of the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power
is absolute). The limitation is found in the constitutional injunction that "private property shall not be taken
for public use without just compensation" and in the abundant jurisprudence that has evolved from the
interpretation of this principle. Basically, the requirements for a proper exercise of the power are: (1) public
use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first
distribute public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing
property rights by forcibly acquiring private agricultural lands. Parenthetically, it is not correct to say that
only public agricultural lands may be covered by the CARP as the Constitution calls for "the just distribution
of all agricultural lands." In any event, the decision to redistribute private agricultural lands in the manner
prescribed by the CARP was made by the legislative and executive departments in the exercise of their
discretion. We are not justified in reviewing that discretion in the absence of a clear showing that it has been
abused.
A becoming courtesy admonishes us to respect the decisions of the political departments when they decide
what is known as the political question. As explained by Chief Justice Concepcion in the case of Tañada v.
Cuenco: 36
The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It
refers to "those questions which, under the Constitution, are to be decided by the people in their sovereign
capacity; or in regard to which full discretionary authority has been delegated to the legislative or executive
branch of the government." It is concerned with issues dependent upon the wisdom, not legality, of a
particular measure.
It is true that the concept of the political question has been constricted with the enlargement of judicial
power, which now includes the authority of the courts "to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality
of the Government." 37 Even so, this should not be construed as a license for us to reverse the other
departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first provided
for, while also continuing apace under the Public Land Act and other cognate laws). The Court sees no
justification to interpose its authority, which we may assert only if we believe that the political decision is
not unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river between
the American bank and the international line, as well as all of the upland north of the present ship canal,
throughout its entire length, was "necessary for the purpose of navigation of said waters, and the waters
connected therewith," that determination is conclusive in condemnation proceedings instituted by the
United States under that Act, and there is no room for judicial review of the judgment of Congress ... .
As earlier observed, the requirement for public use has already been settled for us by the Constitution itself
No less than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural lands
are to be taken from their owners, subject to the prescribed maximum retention limits. The purposes
specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the constitutional
injunction that the State adopt the necessary measures "to encourage and undertake the just distribution
of all agricultural lands to enable farmers who are landless to own directly or collectively the lands they till."
That public use, as pronounced by the fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful
examination.
Just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the taker's gain but
the owner's loss. 40 The word "just" is used to intensify the meaning of the word "compensation" to convey
the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full, ample.
41
It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation
of the use of private lands under the police power. We deal here with an actual taking of private agricultural
lands that has dispossessed the owners of their property and deprived them of all its beneficial use and
enjoyment, to entitle them to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following
conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more than a
momentary period; (3) the entry must be under warrant or color of legal authority; (4) the property must be
devoted to public use or otherwise informally appropriated or injuriously affected; and (5) the utilization of
the property for public use must be in such a way as to oust the owner and deprive him of beneficial
enjoyment of the property. All these requisites are envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking
possession of the condemned property, as "the compensation is a public charge, the good faith of the public
is pledged for its payment, and all the resources of taxation may be employed in raising the amount." 43
Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from
the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash
or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic
of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified
beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted
to the administrative authorities in violation of judicial prerogatives. Specific reference is made to Section
16(d), which provides that in case of the rejection or disregard by the owner of the offer of the government
to buy his land-
... the DAR shall conduct summary administrative proceedings to determine the compensation for the land
by requiring the landowner, the LBP and other interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the
above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30)
days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed to the courts of justice and may
not be usurped by any other branch or official of the government. EPZA v. Dulay 44 resolved a challenge to
several decrees promulgated by President Marcos providing that the just compensation for property under
expropriation should be either the assessment of the property by the government or the sworn valuation
thereof by the owner, whichever was lower. In declaring these decrees unconstitutional, the Court held
through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this
Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would still have the power to determine
the just compensation for the property, following the applicable decrees, its task would be relegated to
simply stating the lower value of the property as declared either by the owner or the assessor. As a necessary
consequence, it would be useless for the court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of private property is seemingly fulfilled
since it cannot be said that a judicial proceeding was not had before the actual taking. However, the strict
application of the decrees during the proceedings would be nothing short of a mere formality or charade as
the court has only to choose between the valuation of the owner and that of the assessor, and its choice is
always limited to the lower of the two. The court cannot exercise its discretion or independence in
determining what is just or fair. Even a grade school pupil could substitute for the judge insofar as the
determination of constitutional just compensation is concerned.
xxx
In the present petition, we are once again confronted with the same question of whether the courts under
P.D. No. 1533, which contains the same provision on just compensation as its predecessor decrees, still have
the power and authority to determine just compensation, independent of what is stated by the decree and
to this effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.

xxx
It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the property, after evidence and
arguments pro and con have been presented, and after all factors and considerations essential to a fair and
just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that
rendered the challenged decrees constitutionally objectionable. Although the proceedings are described as
summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit
evidence on the real value of the property. But more importantly, the determination of the just
compensation by the DAR is not by any means final and conclusive upon the landowner or any other
interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise,
the courts of justice will still have the right to review with finality the said determination in the exercise of
what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner in such amount
as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided
for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the
court, as the just compensation for the land.
The compensation shall be paid in one of the following modes, at the option of the landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned — Twenty-five
percent (25%) cash, the balance to be paid in government financial instruments negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares — Thirty percent (30%) cash,
the balance to be paid in government financial instruments negotiable at any time.
(c) For lands twenty-four (24) hectares and below — Thirty-five percent (35%) cash, the balance to be
paid in government financial instruments negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical
assets or other qualified investments in accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of
the bonds shall mature every year from the date of issuance until the tenth (10th) year: Provided, That should
the landowner choose to forego the cash portion, whether in full or in part, he shall be paid correspondingly
in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors-in-
interest or his assigns, up to the amount of their face value, for any of the following:
(i) Acquisition of land or other real properties of the government, including assets under the Asset
Privatization Program and other assets foreclosed by government financial institutions in the same province
or region where the lands for which the bonds were paid are situated;
(ii) Acquisition of shares of stock of government-owned or controlled corporations or shares of stock

owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or for
performance bonds;
(iv) Security for loans with any government financial institution, provided the proceeds of the loans shall
be invested in an economic enterprise, preferably in a small and medium- scale industry, in the same
province or region as the land for which the bonds are paid;
(v) Payment for various taxes and fees to government: Provided, That the use of these bonds for these
purposes will be limited to a certain percentage of the outstanding balance of the financial instruments;
Provided, further, That the PARC shall determine the percentages mentioned above;
(vi) Payment for tuition fees of the immediate family of the original bondholder in government
universities, colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar as
it requires the owners of the expropriated properties to accept just compensation therefor in less than
money, which is the only medium of payment allowed. In support of this contention, they cite jurisprudence
holding that:
The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled to
a just compensation, which should be neither more nor less, whenever it is possible to make the assessment,
than the money equivalent of said property. Just compensation has always been understood to be the just
and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of
the expropriation . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the value of the property at the time of its
taking. Anything beyond that is more, and anything short of that is less, than just compensation. It means a
fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain
would accrue to the expropriating entity. The market value of the land taken is the just compensation to
which the owner of condemned property is entitled, the market value being that sum of money which a
person desirous, but not compelled to buy, and an owner, willing, but not compelled to sell, would agree on
as a price to be given and received for such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been derived, the weight of
authority is also to the effect that just compensation for property expropriated is payable only in money and
not otherwise. Thus —
The medium of payment of compensation is ready money or cash. The condemnor cannot compel the owner
to accept anything but money, nor can the owner compel or require the condemnor to pay him on any other
basis than the value of the property in money at the time and in the manner prescribed by the Constitution
and the statutes. When the power of eminent domain is resorted to, there must be a standard medium of
payment, binding upon both parties, and the law has fixed that standard as money in cash. 47 (Emphasis
supplied.)
Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable and
constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair equivalent in money, which must be
paid at least within a reasonable time after the taking, and it is not within the power of the Legislature to
substitute for such payment future obligations, bonds, or other valuable advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of just compensation is
money and no other. And so, conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional excercise of the power of eminent domain. This
is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken
by the State from its owner for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of whatever kind as
long as they are in excess of the maximum retention limits allowed their owners. This kind of expropriation
is intended for the benefit not only of a particular community or of a small segment of the population but of
the entire Filipino nation, from all levels of our society, from the impoverished farmer to the land-glutted
owner. Its purpose does not cover only the whole territory of this country but goes beyond in time to the
foreseeable future, which it hopes to secure and edify with the vision and the sacrifice of the present
generation of Filipinos. Generations yet to come are as involved in this program as we are today, although
hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through
our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the Constitution itself that
has ordained this revolution in the farms, calling for "a just distribution" among the farmers of lands that
have heretofore been the prison of their dreams but can now become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast
areas of land subject to expropriation under the laws before us, we estimate that hundreds of billions of
pesos will be needed, far more indeed than the amount of P50 billion initially appropriated, which is already
staggering as it is by our present standards. Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian
reform as a top priority project of the government. It is a part of this assumption that when they envisioned
the expropriation that would be needed, they also intended that the just compensation would have to be
paid not in the orthodox way but a less conventional if more practical method. There can be no doubt that
they were aware of the financial limitations of the government and had no illusions that there would be
enough money to pay in cash and in full for the lands they wanted to be distributed among the farmers. We
may therefore assume that their intention was to allow such manner of payment as is now provided for by
the CARP Law, particularly the payment of the balance (if the owner cannot be paid fully with money), or
indeed of the entire amount of the just compensation, with other things of value. We may also suppose that
what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27, which was the law
in force at the time they deliberated on the new Charter and with which they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical agreement among
the members regarding the meaning to be given the concept of just compensation as applied to the
comprehensive agrarian reform program being contemplated. There was the suggestion to "fine tune" the
requirement to suit the demands of the project even as it was also felt that they should "leave it to Congress"
to determine how payment should be made to the landowner and reimbursement required from the farmer-
beneficiaries. Such innovations as "progressive compensation" and "State-subsidized compensation" were
also proposed. In the end, however, no special definition of the just compensation for the lands to be
expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the assumptions we are
making of the general sentiments and intention of the members on the content and manner of the payment
to be made to the landowner in the light of the magnitude of the expenditure and the limitations of the
expropriator.
With these assumptions, the Court hereby declares that the content and manner of the just compensation
provided for in the afore- quoted Section 18 of the CARP Law is not violative of the Constitution. We do not
mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but after all
this Court is not a cloistered institution removed from the realities and demands of society or oblivious to
the need for its enhancement. The Court is as acutely anxious as the rest of our people to see the goal of
agrarian reform achieved at last after the frustrations and deprivations of our peasant masses during all
these disappointing decades. We are aware that invalidation of the said section will result in the nullification
of the entire program, killing the farmer's hopes even as they approach realization and resurrecting the
spectre of discontent and dissent in the restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to be made fully in
money, we find further that the proportion of cash payment to the other things of value constituting the
total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive
upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily
because the small landowner will be needing it more than the big landowners, who can afford a bigger
balance in bonds and other things of value. No less importantly, the government financial instruments
making up the balance of the payment are "negotiable at any time." The other modes, which are likewise
available to the landowner at his option, are also not unreasonable because payment is made in shares of
stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the amount
of just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little
inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these
countrymen of ours, conscious as we know they are of the need for their forebearance and even sacrifice,
will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform. Otherwise,
our pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be
viable any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the CARP
Law. This repeats the requisites of registration as embodied in the earlier measure but does not provide, as
the latter did, that in case of failure or refusal to register the land, the valuation thereof shall be that given
by the provincial or city assessor for tax purposes. On the contrary, the CARP Law says that the just
compensation shall be ascertained on the basis of the factors mentioned in its Section 17 and in the manner
provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property even before actual
payment to him in full of just compensation, in contravention of a well- accepted principle of eminent
domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is
consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the condemnor until the
judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the date
on which the petition under the Eminent Domain Act, or the commissioner's report under the Local
Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to
the property taken remains in the owner until payment is actually made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property does
not pass to the condemnor until just compensation had actually been made. In fact, the decisions appear to
be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was held that "actual payment to
the owner of the condemned property was a condition precedent to the investment of the title to the
property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the Court
of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the State
until the payment of the compensation although the authority to enter upon and appropriate the land was
complete prior to the payment. Kennedy further said that "both on principle and authority the rule is ... that
the right to enter on and use the property is complete, as soon as the property is actually appropriated under
the authority of law for a public use, but that the title does not pass from the owner without his consent,
until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be
apparent that the method of expropriation adopted in this jurisdiction is such as to afford absolute
reassurance that no piece of land can be finally and irrevocably taken from an unwilling owner until
compensation is paid ... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and
declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except
that "no title to the land owned by him was to be actually issued to him unless and until he had become a
full-fledged member of a duly recognized farmers' cooperative." It was understood, however, that full
payment of the just compensation also had to be made first, conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they
acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged
membership in the farmers' cooperatives and full payment of just compensation. Hence, it was also perfectly
proper for the Order to also provide in its Section 2 that the "lease rentals paid to the landowner by the
farmer- beneficiary after October 21, 1972 (pending transfer of ownership after full payment of just
compensation), shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the
compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner. 57 No outright change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before
the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as recognized
under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should counter-balance the
express provision in Section 6 of the said law that "the landowners whose lands have been covered by
Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further,
That original homestead grantees or direct compulsory heirs who still own the original homestead at the
time of the approval of this Act shall retain the same areas as long as they continue to cultivate said
homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the
petitioners with the Office of the President has already been resolved. Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude immediate resort to judicial action,
there are factual issues that have yet to be examined on the administrative level, especially the claim that
the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the subjects
of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet
exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are entitled to the new
retention rights provided for by R.A. No. 6657, which in fact are on the whole more liberal than those granted
by the decree.
The CARP Law and the other enactments also involved in these cases have been the subject of bitter attack
from those who point to the shortcomings of these measures and ask that they be scrapped entirely. To be
sure, these enactments are less than perfect; indeed, they should be continuously re-examined and rehoned,
that they may be sharper instruments for the better protection of the farmer's rights. But we have to start
somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but grope on terrain
fraught with pitfalls and expected difficulties. This is inevitable. The CARP Law is not a tried and tested
project. On the contrary, to use Justice Holmes's words, "it is an experiment, as all life is an experiment," and
so we learn as we venture forward, and, if necessary, by our own mistakes. We cannot expect perfection
although we should strive for it by all means. Meantime, we struggle as best we can in freeing the farmer
from the iron shackles that have unconscionably, and for so long, fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program are
removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of the past and from his own feelings
of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on which he toils
will be his farm. It will be his portion of the Mother Earth that will give him not only the staff of life but also
the joy of living. And where once it bred for him only deep despair, now can he see in it the fruition of his
hopes for a more fulfilling future. Now at last can he banish from his small plot of earth his insecurities and
dark resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the
constitutional objections raised in the herein petitions.
2. Title to all expropriated properties shall be transferred to the State only upon full payment of
compensation to their respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and recognized.
4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the
retention rights granted by R.A. No. 6657 under the conditions therein prescribed.
5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement as to
costs.
SO ORDERED.
G.R. No. 103302 August 12, 1993
NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND INVESTORS CORP., Petitioners, vs. DEPARTMENT OF
AGRARIAN REFORM, SEC. BENJAMIN T. LEONG and DIR. WILFREDO LEANO, DAR REGION IV, Respondents.
Lino M. Patajo for petitioners.chanrobles virtual law library
The Solicitor General for respondents.
BELLOSILLO, J.:
Are lands already classified for residential, commercial or industrial use, as approved by the Housing and
Land Use Regulatory Board and its precursor agencies 1prior to 15 June 1988, 2covered by R.A. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1988? This is the pivotal issue in this petition
for certiorari assailing the Notice of Coverage 3of the Department of Agrarian Reform over parcels of land
already reserved as townsite areas before the enactment of the law.chanroblesvirtualawlibrarychanrobles
virtual law library
Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner of three (3) contiguous parcels of land
located in Banaba, Antipolo, Rizal, with areas of 120.9793 hectares, 1.3205 hectares and 2.7080 hectares, or
a total of 125.0078 hectares, and embraced in Transfer Certificate of Title No. 31527 of the Register of Deeds
of the Province of Rizal.chanroblesvirtualawlibrarychanrobles virtual law library
On 18 April 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of land located in the
Municipalities of Antipolo, San Mateo and Montalban as townsite areas to absorb the population overspill
in the metropolis which were designated as the Lungsod Silangan Townsite. The NATALIA properties are
situated within the areas proclaimed as townsite reservation.chanroblesvirtualawlibrarychanrobles virtual
law library
Since private landowners were allowed to develop their properties into low-cost housing subdivisions within
the reservation, petitioner Estate Developers and Investors Corporation (EDIC, for brevity), as developer of
NATALIA properties, applied for and was granted preliminary approval and locational clearances by the
Human Settlements Regulatory Commission. The necessary permit for Phase I of the subdivision project,
which consisted of 13.2371 hectares, was issued sometime in 1982; 4for Phase II, with an area of 80,000
hectares, on 13 October 1983; 5and for Phase III, which consisted of the remaining 31.7707 hectares, on 25
April 1986. 6Petitioner were likewise issued development permits 7after complying with the requirements.
Thus the NATALIA properties later became the Antipolo Hills
Subdivision.chanroblesvirtualawlibrarychanrobles virtual law library
On 15 June 1988, R.A. 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988" (CARL,
for brevity), went into effect. Conformably therewith, respondent Department of Agrarian Reform (DAR, for
brevity), through its Municipal Agrarian Reform Officer, issued on 22 November 1990 a Notice of Coverage
on the undeveloped portions of the Antipolo Hills Subdivision which consisted of roughly 90.3307 hectares.
NATALIA immediately registered its objection to the notice of
Coverage.chanroblesvirtualawlibrarychanrobles virtual law library
EDIC also protested to respondent Director Wilfredo Leano of the DAR Region IV Office and twice wrote him
requesting the cancellation of the Notice of Coverage.chanroblesvirtualawlibrarychanrobles virtual law
library
On 17 January 1991, members of the Samahan ng Magsasaka sa Bundok Antipolo, Inc. (SAMBA, for the
brevity), filed a complaint against NATALIA and EDIC before the DAR Regional Adjudicator to restrain
petitioners from developing areas under cultivation by SAMBA members. 8The Regional Adjudicator
temporarily restrained petitioners from proceeding with the development of the subdivision. Petitioners
then moved to dismiss the complaint; it was denied. Instead, the Regional Adjudicator issued on 5 March
1991 a Writ of Preliminary Injunction.chanroblesvirtualawlibrarychanrobles virtual law library
Petitioners NATALIA and EDIC elevated their cause to the DAR Adjudication Board (DARAB); however, on 16
December 1991 the DARAB merely remanded the case to the Regional Adjudicator for further proceedings.
9chanrobles virtual law library
In the interim, NATALIA wrote respondent Secretary of Agrarian Reform reiterating its request to set aside
the Notice of Coverage. Neither respondent Secretary nor respondent Director took action on the protest-
letters, thus compelling petitioners to institute this proceeding more than a year
thereafter.chanroblesvirtualawlibrarychanrobles virtual law library
NATALIA and EDIC both impute grave abuse of discretion to respondent DAR for including undedeveloped
portions of the Antipolo Hills Subdivision within the coverage of the CARL. They argue that NATALIA
properties already ceased to be agricultural lands when they were included in the areas reserved by
presidential fiat for the townsite reservation.chanroblesvirtualawlibrarychanrobles virtual law library
Public respondents through the Office of the Solicitor General dispute this contention. They maintain that
the permits granted petitioners were not valid and binding because they did not comply with the
implementing Standards, Rules and Regulations of P.D. 957, otherwise known as "The Subdivision and
Condominium Buyers Protective Decree," in that no application for conversion of the NATALIA lands from
agricultural residential was ever filed with the DAR. In other words, there was no valid conversion. Moreover,
public respondents allege that the instant petition was prematurely filed because the case instituted by
SAMBA against petitioners before the DAR Regional Adjudicator has not yet terminated. Respondents
conclude, as a consequence, that petitioners failed to fully exhaust administrative remedies available to
them before coming to court.chanroblesvirtualawlibrarychanrobles virtual law library
The petition is impressed with merit. A cursory reading of the Preliminary Approval and Locational
Clearances as well as the Development Permits granted petitioners for Phases I, II and III of the Antipolo Hills
Subdivision reveals that contrary to the claim of public respondents, petitioners NATALIA and EDIC did in
fact comply with all the requirements of law.chanroblesvirtualawlibrarychanrobles virtual law library
Petitioners first secured favorable recommendations from the Lungsod Silangan Development Corporation,
the agency tasked to oversee the implementation of the development of the townsite reservation, before
applying for the necessary permits from the Human Settlements Regulatory
Commission. 10And, in all permits granted to petitioners, the Commission
stated invariably therein that the applications were in "conformance" 11or "conformity" 12or "conforming"
13with the implementing Standards, Rules and Regulations of P.D. 957. Hence, the argument of public
respondents that not all of the requirements were complied with cannot be
sustained.chanroblesvirtualawlibrarychanrobles virtual law library
As a matter of fact, there was even no need for petitioners to secure a clearance or prior approval from DAR.
The NATALIA properties were within the areas set aside for the Lungsod Silangan Reservation. Since
Presidential Proclamation No. 1637 created the townsite reservation for the purpose of providing additional
housing to the burgeoning population of Metro Manila, it in effect converted for residential use what were
erstwhile agricultural lands provided all requisites were met. And, in the case at bar, there was compliance
with all relevant rules and requirements. Even in their applications for the development of the Antipolo Hills
Subdivision, the predecessor agency of HLURB noted that petitioners NATALIA and EDIC complied with all
the requirements prescribed by P.D. 957.chanroblesvirtualawlibrarychanrobles virtual law library
The implementing Standards, Rules and Regulations of P.D. 957 applied to all subdivisions and
condominiums in general. On the other hand, Presidential Proclamation No. 1637 referred only to the
Lungsod Silangan Reservation, which makes it a special law. It is a basic tenet in statutory construction that
between a general law and a special law, the latter prevails. 14chanrobles virtual law library
Interestingly, the Office of the Solicitor General does not contest the conversion of portions of the Antipolo
Hills Subdivision which have already been developed. 15Of course, this is contrary to its earlier position that
there was no valid conversion. The applications for the developed and undeveloped portions of subject
subdivision were similarly situated. Consequently, both did not need prior DAR
approval.chanroblesvirtualawlibrarychanrobles virtual law library
We now determine whether such lands are covered by the CARL. Section 4 of R.A. 6657 provides that the
CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural
activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land."
16The deliberations of the Constitutional Commission confirm this limitation. "Agricultural lands" are only
those lands which are "arable and suitable agricultural lands" and "do not include commercial, industrial and
residential lands." 17chanrobles virtual law library
Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot in
any language be considered as "agricultural lands." These lots were intended for residential use. They ceased
to be agricultural lands upon approval of their inclusion in the Lungsod Silangan Reservation. Even today,
the areas in question continued to be developed as a low-cost housing subdivision, albeit at a snail's pace.
This can readily be gleaned from the fact that SAMBA members even instituted an action to restrain
petitioners from continuing with such development. The enormity of the resources needed for developing a
subdivision may have delayed its completion but this does not detract from the fact that these lands are still
residential lands and outside the ambit of the CARL.chanroblesvirtualawlibrarychanrobles virtual law library
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands
previously converted to non-agricultural uses prior to the effectivity of CARL by government agencies other
than respondent DAR. In its Revised Rules and Regulations Governing Conversion of Private Agricultural
Lands to Non-Agricultural Uses, 18DAR itself defined "agricultural land" thus -
. . . Agricultural lands refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified
as mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessor
agencies, and not classified in town plans and zoning ordinances as approved by the Housing and Land Use
Regulatory Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential,
commercial or industrial use.
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such conversion.
It was therefore error to include the undeveloped portions of the Antipolo Hills Subdivision within the
coverage of CARL.chanroblesvirtualawlibrarychanrobles virtual law library
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform, noted
in an Opinion 19that lands covered by Presidential Proclamation No. 1637, inter alia, of which the NATALIA
lands are part, having been reserved for townsite purposes "to be developed as human settlements by the
proper land and housing agency," are "not deemed 'agricultural lands' within the meaning and intent of
Section 3 (c) of R.A. No. 6657. " Not being deemed "agricultural lands," they are outside the coverage of
CARL.chanroblesvirtualawlibrarychanrobles virtual law library
Anent the argument that there was failure to exhaust administrative remedies in the instant petition, suffice
it to say that the issues raised in the case filed by SAMBA members differ from those of petitioners. The
former involve possession; the latter, the propriety of including under the operation of CARL lands already
converted for residential use prior to its effectivity.chanroblesvirtualawlibrarychanrobles virtual law library
Besides, petitioners were not supposed to wait until public respondents acted on their letter-protests, this
after sitting it out for almost a year. Given the official indifference, which under the circumstances could
have continued forever, petitioners had to act to assert and protect their interests. 20chanrobles virtual law
library
In fine, we rule for petitioners and hold that public respondents gravely abused their discretion in issuing the
assailed Notice of Coverage of 22 November 1990 by of lands over which they no longer have
jurisdiction.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, the petition for Certiorari is GRANTED. The Notice of Coverage of 22 November 1990 by virtue
of which undeveloped portions of the Antipolo Hills Subdivision were placed under CARL coverage is hereby
SET ASIDE.chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED.
G.R. No. L-630 November 15, 1947
ALEXANDER A. KRIVENKO, petitioner-appellant,

vs.
THE REGISTER OF DEEDS, CITY OF MANILA, respondent and appellee.
Gibbs, Gibbs, Chuidian and Quasha of petitioner-appellant.

First Assistant Solicitor General Reyes and Solicitor Carreon for respondent-appellee.
Marcelino Lontok appeared as amicus curies.
MORAN, C.J.:
Alenxander A. Kriventor alien, bought a residential lot from the Magdalena Estate, Inc., in December of 1941,
the registration of which was interrupted by the war. In May, 1945, he sought to accomplish said registration
but was denied by the register of deeds of Manila on the ground that, being an alien, he cannot acquire land
in this jurisdiction. Krivenko then brought the case to the fourth branch of the Court of First Instance of
Manila by means of a consulta, and that court rendered judgment sustaining the refusal of the register of
deeds, from which Krivenko appealed to this Court.
There is no dispute as to these facts. The real point in issue is whether or not an alien under our Constitution
may acquire residential land.
It is said that the decision of the case on the merits is unnecessary, there being a motion to withdraw the
appeal which should have been granted outright, and reference is made to the ruling laid down by this Court
in another case to the effect that a court should not pass upon a constitutional question if its judgment may
be made to rest upon other grounds. There is, we believe, a confusion of ideas in this reasoning. It cannot
be denied that the constitutional question is unavoidable if we choose to decide this case upon the merits.
Our judgment cannot to be made to rest upon other grounds if we have to render any judgment at all. And
we cannot avoid our judgment simply because we have to avoid a constitutional question. We cannot, for
instance, grant the motion withdrawing the appeal only because we wish to evade the constitutional; issue.
Whether the motion should be, or should not be, granted, is a question involving different considerations
now to be stated.
According to Rule 52, section 4, of the Rules of Court, it is discretionary upon this Court to grant a withdrawal
of appeal after the briefs have been presented. At the time the motion for withdrawal was filed in this case,
not only had the briefs been prensented, but the case had already been voted and the majority decision was
being prepared. The motion for withdrawal stated no reason whatsoever, and the Solicitor General was
agreeable to it. While the motion was pending in this Court, came the new circular of the Department of
Justice, instructing all register of deeds to accept for registration all transfers of residential lots to aliens. The
herein respondent-appellee was naturally one of the registers of deeds to obey the new circular, as against
his own stand in this case which had been maintained by the trial court and firmly defended in this Court by
the Solicitor General. If we grant the withdrawal, the the result would be that petitioner-appellant Alexander
A. Krivenko wins his case, not by a decision of this Court, but by the decision or circular of the Department
of Justice, issued while this case was pending before this Court. Whether or not this is the reason why
appellant seeks the withdrawal of his appeal and why the Solicitor General readily agrees to that withdrawal,
is now immaterial. What is material and indeed very important, is whether or not we should allow
interference with the regular and complete exercise by this Court of its constitutional functions, and whether
or not after having held long deliberations and after having reached a clear and positive conviction as to
what the constitutional mandate is, we may still allow our conviction to be silenced, and the constitutional
mandate to be ignored or misconceived, with all the harmful consequences that might be brought upon the
national patromony. For it is but natural that the new circular be taken full advantage of by many, with the
circumstance that perhaps the constitutional question may never come up again before this court, because
both vendors and vendees will have no interest but to uphold the validity of their transactions, and very
unlikely will the register of deeds venture to disobey the orders of their superior. Thus, the possibility for
this court to voice its conviction in a future case may be remote, with the result that our indifference of
today might signify a permanent offense to the Constitution.
All thse circumstances were thoroughly considered and weighted by this Court for a number of days and the
legal result of the last vote was a denial of the motion withdrawing the appeal. We are thus confronted, at
this stage of the proceedings, with our duty, the constitutional question becomes unavoidable. We shall then
proceed to decide that question.
Article XIII, section 1, of the Constitutional is as follows:
Article XIII. — Conservation and utilization of natural resources.
SECTION 1. All agricultural, timber, and mineral lands of the public domain, water, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be
limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital
of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time of the
inaguration of the Government established uunder this Constitution. Natural resources, with the exception
of public agricultural land, shall not be alienated, and no licence, concession, or lease for the exploitation,
development, or utilization of any of the natural resources shall be granted for a period exceeding twenty-
five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water "power" in which cases beneficial use may
be the measure and the limit of the grant.
The scope of this constitutional provision, according to its heading and its language, embraces all lands of
any kind of the public domain, its purpose being to establish a permanent and fundamental policy for the
conservation and utilization of all natural resources of the Nation. When, therefore, this provision, with
reference to lands of the public domain, makes mention of only agricultural, timber and mineral lands, it
means that all lands of the public domain are classified into said three groups, namely, agricultural, timber
and mineral. And this classification finds corroboration in the circumstance that at the time of the adoption
of the Constitution, that was the basic classification existing in the public laws and judicial decisions in the
Philippines, and the term "public agricultural lands" under said classification had then acquired a technical
meaning that was well-known to the members of the Constitutional Convention who were mostly members
of the legal profession.
As early as 1908, in the case of Mapa vs. Insular Government (10 Phil., 175, 182), this Court said that the
phrase "agricultural public lands" as defined in the Act of Congress of July 1, 1902, which phrase is also to be
found in several sections of the Public Land Act (No. 926), means "those public lands acquired from Spain
which are neither mineral for timber lands." This definition has been followed in long line of decisions of this
Court. (See Montano vs. Insular Government, 12 Phil., 593; Ibañez de Aldecoa vs. Insular Government, 13
Phil., 159; Ramos vs. Director of Lands, 39 Phil., 175; Jocson vs. Director of Forestry, 39 Phil., 560; Ankron vs.
Government of the Philippines, 40 Phil., 10.) And with respect to residential lands, it has been held that since
they are neither mineral nor timber lands, of necessity they must be classified as agricultural. In Ibañez de
Aldecoa vs. Insular Government (13 Phil., 159, 163), this Court said:
Hence, any parcel of land or building lot is susceptible of cultivation, and may be converted into a field, and
planted with all kinds of vegetation; for this reason, where land is not mining or forestal in its nature, it must
necessarily be included within the classification of agricultural land, not because it is actually used for the
purposes of agriculture, but because it was originally agricultural and may again become so under other
circumstances; besides, the Act of Congress contains only three classification, and makes no special provision
with respect to building lots or urban lands that have ceased to be agricultural land.
In other words, the Court ruled that in determining whether a parcel of land is agricultural, the test is not
only whether it is actually agricultural, but also its susceptibility to cultivation for agricultural purposes. But
whatever the test might be, the fact remains that at the time the Constitution was adopted, lands of the
public domain were classified in our laws and jurisprudence into agricultural, mineral, and timber, and that
the term "public agricultural lands" was construed as referring to those lands that were not timber or
mineral, and as including residential lands. It may safely be presumed, therefore, that what the members of
the Constitutional Convention had in mind when they drafted the Constitution was this well-known
classification and its technical meaning then prevailing.
Certain expressions which appear in Constitutions, . . . are obviously technical; and where such words have
been in use prior to the adoption of a Constitution, it is presumed that its framers and the people who ratified
it have used such expressions in accordance with their technical meaning. (11 Am. Jur., sec. 66, p. 683.) Also
Calder vs. Bull, 3 Dall. [U.S.], 386; 1 Law. ed., 648; Bronson vs. Syverson, 88 Wash., 264; 152 P., 1039.)
It is a fundamental rule that, in construing constitutions, terms employed therein shall be given the meaning
which had been put upon them, and which they possessed, at the time of the framing and adoption of the
instrument. If a word has acquired a fixed, technical meaning in legal and constitutional history, it will be
presumed to have been employed in that sense in a written Constitution. (McKinney vs. Barker, 180 Ky., 526;
203 S.W., 303; L.R.A., 1918 E, 581.)
Where words have been long used in a technical sense and have been judicially construed to have a certain
meaning, and have been adopted by the legislature as having a certain meaning prior to a particular statute
in which they are used, the rule of construction requires that the words used in such statute should be
construed according to the sense in which they have been so previously used, although the sense may vary
from strict literal meaning of the words. (II Sutherland, Statutory Construction, p. 758.)
Therefore, the phrase "public agricultural lands" appearing in section 1 of Article XIII of the Constitution must
be construed as including residential lands, and this is in conformity with a legislative interpretation given
after the adoption of the Constitution. Well known is the rule that "where the Legislature has revised a
statute after a Constitution has been adopted, such a revision is to be regarded as a legislative construction
that the statute so revised conforms to the Constitution." (59 C.J., 1102.) Soon after the Constitution was
adopted, the National Assembly revised the Public Land Law and passed Commonwealth Act No. 141, and
sections 58, 59 and 60 thereof permit the sale of residential lots to Filipino citizens or to associations or
corporations controlled by such citizens, which is equivalent to a solemn declaration that residential lots are
considered as agricultural lands, for, under the Constitution, only agricultural lands may be alienated.
It is true that in section 9 of said Commonwealth Act No. 141, "alienable or disposable public lands" which
are the same "public agriculture lands" under the Constitution, are classified into agricultural, residential,
commercial, industrial and for other puposes. This simply means that the term "public agricultural lands"
has both a broad and a particular meaning. Under its broad or general meaning, as used in the Constitution,
it embraces all lands that are neither timber nor mineral. This broad meaning is particularized in section 9 of
Commonwealth Act No. 141 which classifies "public agricultural lands" for purposes of alienation or
disposition, into lands that are stricly agricultural or actually devoted to cultivation for agricultural puposes;
lands that are residential; commercial; industrial; or lands for other purposes. The fact that these lands are
made alienable or disposable under Commonwealth Act No. 141, in favor of Filipino citizens, is a conclusive
indication of their character as public agricultural lands under said statute and under the Constitution.
It must be observed, in this connection that prior to the Constitution, under section 24 of Public Land Act
No. 2874, aliens could acquire public agricultural lands used for industrial or residential puposes, but after
the Constitution and under section 23 of Commonwealth Act No. 141, the right of aliens to acquire such kind
of lands is completely stricken out, undoubtedly in pursuance of the constitutional limitation. And, again,
prior to the Constitution, under section 57 of Public Land Act No. 2874, land of the public domain suitable
for residence or industrial purposes could be sold or leased to aliens, but after the Constitution and under
section 60 of Commonwealth Act No. 141, such land may only be leased, but not sold, to aliens, and the
lease granted shall only be valid while the land is used for the purposes referred to. The exclusion of sale in
the new Act is undoubtedly in pursuance of the constitutional limitation, and this again is another legislative
construction that the term "public agricultural land" includes land for residence purposes.
Such legislative interpretation is also in harmony with the interpretation given by the Executive Department
of the Government. Way back in 1939, Secretary of Justice Jose Abad Santos, in answer to a query as to
"whether or not the phrase 'public agricultural lands' in section 1 of Article XII (now XIII) of the Constitution
may be interpreted to include residential, commercial, and industrial lands for purposes of their disposition,"
rendered the following short, sharp and crystal-clear opinion:
Section 1, Article XII (now XIII) of the Constitution classifies lands of the public domain in the Philippines into
agricultural, timber and mineral. This is the basic classification adopted since the enactment of the Act of
Congress of July 1, 1902, known as the Philippine Bill. At the time of the adoption of the Constitution of the
Philippines, the term 'agricultural public lands' and, therefore, acquired a technical meaning in our public
laws. The Supreme Court of the Philippines in the leading case of Mapa vs. Insular Government, 10 Phil., 175,
held that the phrase 'agricultural public lands' means those public lands acquired from Spain which are
neither timber nor mineral lands. This definition has been followed by our Supreme Court in many
subsequent case. . . .
Residential commercial, or industrial lots forming part of the public domain must have to be included in one
or more of these classes. Clearly, they are neither timber nor mineral, of necessity, therefore, they must be
classified as agricultural.
Viewed from another angle, it has been held that in determining whether lands are agricultural or not, the
character of the land is the test (Odell vs. Durant, 62 N.W., 524; Lorch vs. Missoula Brick and Tile Co., 123
p.25). In other words, it is the susceptibility of the land to cultivation for agricultural purposes by ordinary
farming methods which determines whether it is agricultural or not (State vs. Stewart, 190 p. 129).
Furthermore, as said by the Director of Lands, no reason is seen why a piece of land, which may be sold to a
person if he is to devote it to agricultural, cannot be sold to him if he intends to use it as a site for his home.
This opinion is important not alone because it comes from a Secratary of Justice who later became the Chief
Justice of this Court, but also because it was rendered by a member of the cabinet of the late President
Quezon who actively participated in the drafting of the constitutional provision under consideration. (2
Aruego, Framing of the Philippine Constitution, p. 598.) And the opinion of the Quezon administration was
reiterated by the Secretary of Justice under the Osmeña administration, and it was firmly maintained in this
Court by the Solicitor General of both administrations.
It is thus clear that the three great departments of the Government — judicial, legislative and executive —
have always maintained that lands of the public domain are classified into agricultural, mineral and timber,
and that agricultural lands include residential lots.
Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public agricultural
land, shall not be aliented," and with respect to public agricultural lands, their alienation is limited to Filipino
citizens. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens
may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor
of aliens. It is partly to prevent this result that section 5 is included in Article XIII, and it reads as follows:
Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned
except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in
the Philippines.
This constitutional provision closes the only remaining avenue through which agricultural resources may leak
into aliens' hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens
if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of
Filipino citizens. Undoubtedly, as above indicated, section 5 is intended to insure the policy of nationalization
contained in section 1. Both sections must, therefore, be read together for they have the same purpose and
the same subject matter. It must be noticed that the persons against whom the prohibition is directed in
section 5 are the very same persons who under section 1 are disqualified "to acquire or hold lands of the
public domain in the Philippines." And the subject matter of both sections is the same, namely, the non-
transferability of "agricultural land" to aliens. Since "agricultural land" under section 1 includes residential
lots, the same technical meaning should be attached to "agricultural land under section 5. It is a rule of
statutory construction that "a word or phrase repeated in a statute will bear the same meaning throughout
the statute, unless a different intention appears." (II Sutherland, Statutory Construction, p. 758.) The only
difference between "agricultural land" under section 5, is that the former is public and the latter private. But
such difference refers to ownership and not to the class of land. The lands are the same in both sections,
and, for the conservation of the national patrimony, what is important is the nature or class of the property
regardless of whether it is owned by the State or by its citizens.
Reference is made to an opinion rendered on September 19, 1941, by the Hon. Teofilo Sison, then Secretary
of Justice, to the effect that residential lands of the public domain may be considered as agricultural lands,
whereas residential lands of private ownership cannot be so considered. No reason whatsoever is given in
the opinion for such a distinction, and no valid reason can be adduced for such a discriminatory view,
particularly having in mind that the purpose of the constitutional provision is the conservation of the national
patrimony, and private residential lands are as much an integral part of the national patrimony as the
residential lands of the public domain. Specially is this so where, as indicated above, the prohibition as to
the alienable of public residential lots would become superflous if the same prohibition is not equally applied
to private residential lots. Indeed, the prohibition as to private residential lands will eventually become more
important, for time will come when, in view of the constant disposition of public lands in favor of private
individuals, almost all, if not all, the residential lands of the public domain shall have become private
residential lands.
It is maintained that in the first draft of section 5, the words "no land of private ownership" were used and
later changed into "no agricultural land of private ownership," and lastly into "no private agricultural land"
and from these changes it is argued that the word "agricultural" introduced in the second and final drafts
was intended to limit the meaning of the word "land" to land actually used for agricultural purposes. The
implication is not accurate. The wording of the first draft was amended for no other purpose than to clarify
concepts and avoid uncertainties. The words "no land" of the first draft, unqualified by the word
"agricultural," may be mistaken to include timber and mineral lands, and since under section 1, this kind of
lands can never be private, the prohibition to transfer the same would be superfluous. Upon the other hand,
section 5 had to be drafted in harmony with section 1 to which it is supplementary, as above indicated.
Inasmuch as under section 1, timber and mineral lands can never be private, and the only lands that may
become private are agricultural lands, the words "no land of private ownership" of the first draft can have
no other meaning than "private agricultural land." And thus the change in the final draft is merely one of
words in order to make its subject matter more specific with a view to avoiding the possible confusion of
ideas that could have arisen from the first draft.
If the term "private agricultural lands" is to be construed as not including residential lots or lands not strictly
agricultural, the result would be that "aliens may freely acquire and possess not only residential lots and
houses for themselves but entire subdivisions, and whole towns and cities," and that "they may validly buy
and hold in their names lands of any area for building homes, factories, industrial plants, fisheries,
hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of
other uses and purposes that are not, in appellant's words, strictly agricultural." (Solicitor General's Brief, p.
6.) That this is obnoxious to the conservative spirit of the Constitution is beyond question.
One of the fundamental principles underlying the provision of Article XIII of the Constitution and which was
embodied in the report of the Committee on Nationalization and Preservation of Lands and other Natural
Resources of the Constitutional Convention, is "that lands, minerals, forests, and other natural resources
constitute the exclusive heritage of the Filipino nation. They should, therefore, be preserved for those under
the sovereign authority of that nation and for their posterity." (2 Aruego, Framing of the Filipino Constitution,
p. 595.) Delegate Ledesma, Chairman of the Committee on Agricultural Development of the Constitutional
Convention, in a speech delivered in connection with the national policy on agricultural lands, said: "The
exclusion of aliens from the privilege of acquiring public agricultural lands and of owning real estate is a
necessary part of the Public Land Laws of the Philippines to keep pace with the idea of preserving the
Philippines for the Filipinos." (Emphasis ours.) And, of the same tenor was the speech of Delegate Montilla
who said: "With the complete nationalization of our lands and natural resources it is to be understood that
our God-given birthright should be one hundred per cent in Filipino hands . . .. Lands and natural resources
are immovables and as such can be compared to the vital organs of a person's body, the lack of possession
of which may cause instant death or the shortening of life. If we do not completely antionalize these two of
our most important belongings, I am afraid that the time will come when we shall be sorry for the time we
were born. Our independence will be just a mockery, for what kind of independence are we going to have if
a part of our country is not in our hands but in those of foreigners?" (Emphasis ours.) Professor Aruego says
that since the opening days of the Constitutional Convention one of its fixed and dominating objectives was
the conservation and nationalization of the natural resources of the country. (2 Aruego, Framing of the
Philippine Constitution, p 592.) This is ratified by the members of the Constitutional Convention who are
now members of this Court, namely, Mr. Justice Perfecto, Mr. Justice Briones, and Mr. Justice Hontiveros.
And, indeed, if under Article XIV, section 8, of the Constitution, an alien may not even operate a small jitney
for hire, it is certainly not hard to understand that neither is he allowed to own a pieace of land.
This constitutional intent is made more patent and is strongly implemented by an act of the National
Assembly passed soon after the Constitution was approved. We are referring again to Commonwealth Act
No. 141. Prior to the Constitution, there were in the Public Land Act No. 2874 sections 120 and 121 which
granted aliens the right to acquire private only by way of reciprocity. Said section reads as follows:
SEC. 120. No land originally acquired in any manner under the provisions of this Act, nor any permanent
improvement on such land, shall be encumbered, alienated, or transferred, except to persons, corporations,
associations, or partnerships who may acquire lands of the public domain under this Act; to corporations
organized in the Philippine Islands authorized therefor by their charters, and, upon express authorization by
the Philippine Legislature, to citizens of countries the laws of which grant to citizens of the Philippine Islands
the same right to acquire, hold, lease, encumber, dispose of, or alienate land, or permanent improvements
thereon, or any interest therein, as to their own citizens, only in the manner and to the extent specified in
such laws, and while the same are in force but not thereafter.
SEC. 121. No land originally acquired in any manner under the provisions of the former Public Land Act
or of any other Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in
the Philippine Islands with regard to public lands, terrenos baldios y realengos, or lands of any other
denomination that were actually or presumptively of the public domain or by royal grant or in any other
form, nor any permanent improvement on such land, shall be encumbered, alienated, or conveyed, except
to persons, corporations, or associations who may acquire land of the public domain under this Act; to
corporate bodies organized in the Philippine Islands whose charters may authorize them to do so, and, upon
express authorization by the Philippine Legislature, to citizens of the countries the laws of which grant to
citizens of the Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate
land or pemanent improvements thereon or any interest therein, as to their own citizens, and only in the
manner and to the extent specified in such laws, and while the same are in force, but not thereafter:
Provided, however, That this prohibition shall not be applicable to the conveyance or acquisition by reason
of hereditary succession duly acknowledged and legalized by competent courts, nor to lands and
improvements acquired or held for industrial or residence purposes, while used for such purposes: Provided,
further, That in the event of the ownership of the lands and improvements mentioned in this section and in
the last preceding section being transferred by judicial decree to persons,corporations or associations not
legally capacitated to acquire the same under the provisions of this Act, such persons, corporations, or
associations shall be obliged to alienate said lands or improvements to others so capacitated within the
precise period of five years, under the penalty of such property reverting to the Government in the contrary
case." (Public Land Act, No. 2874.)
It is to be observed that the pharase "no land" used in these section refers to all private lands, whether
strictly agricultural, residential or otherwise, there being practically no private land which had not been
acquired by any of the means provided in said two sections. Therefore, the prohibition contained in these
two provisions was, in effect, that no private land could be transferred to aliens except "upon express
authorization by the Philippine Legislature, to citizens of Philippine Islands the same right to acquire, hold,
lease, encumber, dispose of, or alienate land." In other words, aliens were granted the right to acquire
private land merely by way of reciprocity. Then came the Constitution and Commonwealth Act No. 141 was
passed, sections 122 and 123 of which read as follows:
SEC. 122. No land originally acquired in any manner under the provisions of this Act, nor any permanent
improvement on such land, shall be encumbered, alienated, or transferred, except to persons, corporations,
associations, or partnerships who may acquire lands of the public domain under this Act or to corporations
organized in the Philippines authorized thereof by their charters.
SEC. 123. No land originally acquired in any manner under the provisions of any previous Act, ordinance,
royal order, royal decree, or any other provision of law formerly in force in the Philippines with regard to
public lands terrenos baldios y realengos, or lands of any other denomination that were actually or
presumptively of the public domain, or by royal grant or in any other form, nor any permanent improvement
on such land, shall be encumbered, alienated, or conveyed, except to persons, corporations or associations
who may acquire land of the public domain under this Act or to corporate bodies organized in the Philippines
whose charters authorize them to do so: Provided, however, That this prohibition shall not be applicable to
the conveyance or acquisition by reason of hereditary succession duly acknowledged and legalized by
competent courts: Provided, further, That in the event of the ownership of the lands and improvements
mentioned in this section and in the last preceding section being transferred by judicial decree to persons,
corporations or associations not legally capacitated to acquire the same under the provisions of this Act,
such persons, corporations, or associations shall be obliged to alienate said lands or improvements to others
so capacitated within the precise period of five years; otherwise, such property shall revert to the
Government.
These two sections are almost literally the same as sections 120 and 121 of Act No. 2874, the only difference
being that in the new provisions, the right to reciprocity granted to aliens is completely stricken out. This,
undoubtedly, is to conform to the absolute policy contained in section 5 of Article XIII of the Constitution
which, in prohibiting the alienation of private agricultural lands to aliens, grants them no right of reciprocity.
This legislative construction carries exceptional weight, for prominent members of the National Assembly
who approved the new Act had been members of the Constitutional Convention.
It is said that the lot question does not come within the purview of sections 122 and 123 of Commonwealth
Act No. 141, there being no proof that the same had been acquired by one of the means provided in said
provisions. We are not, however, diciding the instant case under the provisions of the Public Land Act, which
have to refer to land that had been formerly of the public domain, otherwise their constitutionality may be
doubtful. We are deciding the instant case under section 5 of Article XIII of the Constitution which is more
comprehensive and more absolute in the sense that it prohibits the transfer to alien of any private
agricultural land including residential land whatever its origin might have been.
And, finally, on June 14, 1947, the Congress approved Republic Act No. 133 which allows mortgage of
"private real property" of any kind in favor of aliens but with a qualification consisting of expressly prohibiting
aliens to bid or take part in any sale of such real property as a consequence of the mortgage. This prohibition
makes no distinction between private lands that are strictly agricultural and private lands that are residental
or commercial. The prohibition embraces the sale of private lands of any kind in favor of aliens, which is
again a clear implementation and a legislative interpretation of the constitutional prohibition. Had the
Congress been of opinion that private residential lands may be sold to aliens under the Constitution, no
legislative measure would have been found necessary to authorize mortgage which would have been
deemed also permissible under the Constitution. But clearly it was the opinion of the Congress that such sale
is forbidden by the Constitution and it was such opinion that prompted the legislative measure intended to
clarify that mortgage is not within the constitutional prohibition.
It is well to note at this juncture that in the present case we have no choice. We are construing the
Constitution as it is and not as we may desire it to be. Perhaps the effect of our construction is to preclude
aliens, admitted freely into the Philippines from owning sites where they may build their homes. But if this
is the solemn mandate of the Constitution, we will not attempt to compromise it even in the name of amity
or equity. We are satisfied, however, that aliens are not completely excluded by the Constitution from the
use of lands for residential purposes. Since their residence in the Philippines is temporary, they may be
granted temporary rights such as a lease contract which is not forbidden by the Constitution. Should they
desire to remain here forever and share our fortunes and misfortunes, Filipino citizenship is not impossible
to acquire.
For all the foregoing, we hold that under the Constitution aliens may not acquire private or public agricultural
lands, including residential lands, and, accordingly, judgment is affirmed, without costs.
Feria, Pablo, Perfecto, Hilado, and Briones, JJ., concur.

G.R. No. 108998 August 24, 1994
REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
THE COURT OF APPEALS AND SPOUSES MARIO B. LAPIÑA AND FLOR DE VEGA, respondents.
Byron V. Belarmino and Juan B. Belarmino for private respondents.
BIDIN, J.:
Can a foreign national apply for registration of title over a parcel of land which he acquired by purchase while
still a citizen of the Philippines, from a vendor who has complied with the requirements for registration under
the Public Land Act (CA 141)?
The Republic would have us rule on the negative and asks this Court to nullify the decision of the appellate
court which affirmed the judgment of the court a quo in granting the application of respondent spouses for
registration over the lots in question.
On June 17, 1978, respondent spouses bought Lots 347 and 348, Cad. s38-D, as their residence with a total
area of 91.77 sq. m. situated in San Pablo City, from one Cristeta Dazo Belen (Rollo, p. 41). At the time of the
purchase, respondent spouses where then natural-born Filipino citizens.
On February 5, 1987, the spouses filed an application for registration of title of the two (2) parcels of land
before the Regional Trial Court of San Pablo City, Branch XXXI. This time, however, they were no longer
Filipino citizens and have opted to embrace Canadian citizenship through naturalization.
An opposition was filed by the Republic and after the parties have presented their respective evidence, the
court a quo rendered a decision confirming private respondents' title to the lots in question, the dispositive
portion of which reads as follows:
WHEREFORE, in view of the foregoing, this Court hereby approves the said application and confirms the title
and possession of herein applicants over Lots 347 and 348, Ap-04-003755 in the names of spouses Mario B.
Lapiña and Flor de Vega, all of legal age, Filipino citizens by birth but now Canadian citizens by naturalization
and residing at 14 A. Mabini Street, San Pablo City and/or 201-1170-124 Street, Edmonton, Alberta T5M-
OK9, Canada.
Once this Decision becomes final, let the corresponding decree of registration be issued. In the certificate of
title to be issued, there shall be annotated an easement of .265 meters road right-of-way.
SO ORDERED. (Rollo, p. 25)
On appeal, respondent court affirmed the decision of the trial court based on the following ratiocination:
In the present case, it is undisputed that both applicants were still Filipino citizens when they bought the
land in controversy from its former owner. For this reason, the prohibition against the acquisition of private
lands by aliens could not apply. In justice and equity, they are the rightful owners of the subject realty
considering also that they had paid for it quite a large sum of money. Their purpose in initiating the instant
action is merely to confirm their title over the land, for, as has been passed upon, they had been the owners
of the same since 1978. It ought to be pointed out that registration is not a mode of acquiring ownership.
The Torrens System was not established as a means for the acquisition of title to private land. It is intended
merely to confirm and register the title which one may already have (Municipality of Victorias vs. Court of
Appeals, G.R. No. L-31189, March 31, 1987). With particular reference to the main issue at bar, the High
Court has ruled that title and ownership over lands within the meaning and for the purposes of the
constitutional prohibition dates back to the time of their purchase, not later. The fact that the applicants-
appellees are not Filipino citizens now cannot be taken against them for they were not disqualified from
acquiring the land in question (Bollozos vs. Yu Tieng Su, G.R. No. L-29442, November 11, 1987). (Rollo, pp.
27-28)
Expectedly, respondent court's disposition did not merit petitioner's approval, hence this present recourse,
which was belatedly filed.
Ordinarily, this petition would have been denied outright for having been filed out of time had it not been
for the constitutional issue presented therein.
At the outset, petitioner submits that private respondents have not acquired proprietary rights over the
subject properties before they acquired Canadian citizenship through naturalization to justify the
registration thereof in their favor. It maintains that even privately owned unregistered lands are presumed
to be public lands under the principle that lands of whatever classification belong to the State under the
Regalian doctrine. Thus, before the issuance of the certificate of title, the occupant is not in the jurisdical
sense the true owner of the land since it still pertains to the State. Petitioner further argued that it is only
when the court adjudicates the land to the applicant for confirmation of title would the land become
privately owned land, for in the same proceeding, the court may declare it public land, depending on the
evidence.
As found by the trial court:
The evidence thus presented established that applicants, by themselves and their predecessors-in-interest,
had been in open, public, peaceful, continuous, exclusive and notorious possession and occupation of the
two adjacent parcels of land applied for registration of title under a bona-fide claim of ownership long before
June 12, 1945. Such being the case, it is conclusively presumed that all the conditions essential to the
confirmation of their title over the two adjacent parcels of land are sought to be registered have been
complied with thereby entitling them to the issuance of the corresponding certificate of title pursuant to the
provisions of Presidential Decree No. 1529, otherwise known as the Property Registration Decree. (Rollo, p.
26)
Respondent court echoed the court a quo's observation, thus:
The land sought to be registered has been declared to be within the alienable and disposable zone
established by the Bureau of Forest Development (Exhibit "P"). The investigation conducted by the Bureau
of Lands, Natural Resources District (IV-2) reveals that the disputed realty had been occupied by the
applicants "whose house of strong materials stands thereon"; that it had been declared for taxation purposes
in the name of applicants-spouses since 1979; that they acquired the same by means of a public instrument
entitled "Kasulatan ng Bilihang Tuluyan" duly executed by the vendor, Cristeta Dazo Belen, on June 17, 1978
(Exhibits "I" and "J"); and that applicants and their predecessors in interest had been in possession of the
land for more than 30 years prior to the filing of the application for registration. But what is of great
significance in the instant case is the circumstance that at the time the applicants purchased the subject lot
in 1978, both of them were Filipino citizens such that when they filed their application for registration in
1987, ownership over the land in dispute had already passed to them. (Rollo, p., 27)
The Republic disagrees with the appellate court's concept of possession and argues:
17. The Court of Appeals found that the land was declared for taxation purposes in the name of
respondent spouses only since 1979. However, tax declarations or reality tax payments of property are not
conclusive evidence of ownership. (citing cases)
18. Then again, the appellate court found that "applicants (respondents) and their predecessors-in-
interest had been in possession of the land for more than 30 years prior to the filing of the application for
registration." This is not, however, the same as saying that respondents have been in possession "since June
12, 1945." (PD No. 1073, amending Sec. 48 [b], CA NO. 141; sec. also Sec. 14, PD No. 1529). So there is a void
in respondents' possession. They fall short of the required possession since June 12, 1945 or prior thereto.
And, even if they needed only to prove thirty (30) years possession prior to the filing of their application (on
February 5, 1987), they would still be short of the required possession if the starting point is 1979 when,
according to the Court of Appeals, the land was declared for taxation purposes in their name. (Rollo, pp. 14-
15)
The argument is myopic, to say the least. Following the logic of petitioner, any transferee is thus foreclosed
to apply for registration of title over a parcel of land notwithstanding the fact that the transferor, or his
predecessor-in-interest has been in open, notorious and exclusive possession thereof for thirty (30) years or
more. This is not, however, what the law provides.
As petitioner itself argues, Section 48 of the Public Land Act (CA 141) reads:
Sec. 48. The following-described citizens of the Philippines, occupying lands of the public domain or
claiming interest therein, but whose titles have not been perfected or completed, may apply to the Court of
First Instance (now Regional Trial Court) of the province where the land is located for confirmation of their
claims and the issuance of a certificate of title therefor under the Land Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of agricultural lands of the public domain, under a bona
fide claim of acquisition or ownership, for at least thirty years immediately preceding the filing of the
application for confirmation of title except when prevented by wars or force majeure. These shall be
conclusively presumed to have performed all the conditions essential to a Government grant and shall be
entitled to a certificate of title under the provisions of this chapter. (Emphasis supplied)
As amended by PD 1073:
Sec. 4. The provisions of Section 48(b) and Section 48(c), Chapter VIII, of the Public Land Act are
hereby amended in the sense that these provisions shall apply only to alienable and disposable lands of the
public domain which have been in open, continuous, exclusive and notorious possession and occupation by
the applicant himself or thru his predecessor-in-interest, under a bona fide claim of acquisition or ownership,
since June 12, 1945.
It must be noted that with respect to possession and occupation of the alienable and disposable lands of the
public domain, the law employs the terms "by themselves", "the applicant himself or through his
predecessor-in-interest". Thus, it matters not whether the vendee/applicant has been in possession of the
subject property for only a day so long as the period and/or legal requirements for confirmation of title has
been complied with by his predecessor-in-interest, the said period is tacked to his possession. In the case at
bar, respondents' predecessors-in-interest have been in open, continuous, exclusive and notorious
possession of the disputed land not only since June 12, 1945, but even as early as 1937. Petitioner does not
deny this except that respondent spouses, in its perception, were in possession of the land sought to be
registered only in 1978 and therefore short of the required length of time. As aforesaid, the disputed parcels
of land were acquired by private respondents through their predecessors-in-interest, who, in turn, have been
in open and continued possession thereof since 1937. Private respondents stepped into the shoes of their
predecessors-in-interest and by virtue thereof, acquired all the legal rights necessary to confirm what could
otherwise be deemed as an imperfect title.
At this juncture, petitioner's reliance in Republic v. Villanueva (114 SCRA 875 [1982]) deserves scant
consideration. There, it was held that before the issuance of the certificate of title, the occupant is not in the
juridical sense the true owner of the land since it still pertains to the State.
Suffice it to state that the ruling in Republic v. Villanueva (supra), has already been abandoned in the 1986
case of Director of Lands v. Intermediate Appellate Court (146 SCRA 509; and reiterated in Director of Lands
v. Iglesia ni Cristo, 200 SCRA 606 [1991]) where the Court, through then Associate Justice, now Chief Justice
Narvasa, declared that:
(The weight of authority is) that open, exclusive and undisputed possession of alienable public land for the
period prescribed by law creates the legal fiction whereby the land, upon completion of the requisite period
ipso jure and without the need of judicial or other sanction, ceases to be public land and becomes private
property. . . .
Herico in particular, appears to be squarely affirmative:
. . . Secondly, under the provisions of Republic Act

No. 1942, which the respondent Court held to be inapplicable to the petitioner's case, with the latter's
proven occupation and cultivation for more than 30 years since 1914, by himself and by his predecessors-in-
interest, title over the land has vested on petitioner so as to segregate the land from the mass of public land.
Thereafter, it is no longer disposable under the Public Land Act as by free patent . . .
xxx xxx xxx
As interpreted in several cases, when the conditions as specified in the foregoing provision are complied
with, the possessor is deemed to have acquired, by operation of law, a right to a grant, a government grant,
without the necessity of a certificate of title being issued. The land, therefore, ceases to be of the public
domain and beyond the authority of the Director of Lands to dispose of. The application for confirmation is
mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by
the patent and the Torrens title to be issued upon the strength of said patent.
Nothing can more clearly demonstrate the logical inevitability of considering possession of public land which
is of the character and duration prescribed by the statute as the equivalent of an express grant from the
State than the dictum of the statute itself (Section 48 [b]) that the possessor(s) ". . . shall be conclusively
presumed to have performed all the conditions essential to a Government grant and shall be entitled to a
certificate of title ..." No proof being admissible to overcome a conclusive presumption, confirmation
proceedings would, in truth be little more than a formality, at the most limited to ascertaining whether the
possession claims is of the required character and length of time; and registration thereunder would not
confer title, but simply recognize a title already vested. The proceedings would not originally convert the
land from public to private land, but only confirm such a conversion already affected by operation of law
from the moment the required period of possession became complete. As was so well put in Cariño, ". .
.(There are indications that registration was expected from all, but none sufficient to show that, for want of
it, ownership actually gained would be lost. The effect of the proof, wherever made, was not to confer title,
but simply to establish it, as already conferred by the decree, if not by earlier law. (Emphasis supplied)
Subsequent cases have hewed to the above pronouncement such that open, continuous and exclusive
possession for at least 30 years of alienable public land ipso jure converts the same to private property
(Director of Lands v. IAC, 214 SCRA 604 [1992]; Pineda v. CA, 183 SCRA 602 [1990]). This means that
occupation and cultivation for more than 30 years by an applicant and his predecessors-in-interest, vest title
on such applicant so as to segregate the land from the mass of public and (National Power Corporation v.
CA, 218 SCRA 41 [1993]).
The Public Land Act requires that the applicant must prove that (a) the land is alienable public land and (b)
his possession, in the concept above stated, must be either since time immemorial or for the period
prescribed in the Public Land Act (Director of Lands v. Buyco, 216 SCRA 78 [1992]). When the conditions set
by law are complied with, the possessor of the land, by operation of law, acquires a right to a grant, a
government grant, without the necessity of a certificate of title being issued (National Power Corporation v.
CA, supra). As such, the land ceases to be a part of the public domain and goes beyond the authority of the
Director of Lands to dispose of.
In other words, the Torrens system was not established as a means for the acquisition of title to private land
(Municipality of Victorias v. CA, 149 SCRA 32 [1987]). It merely confirms, but does not confer ownership. As
could be gleaned from the evidence adduced, private respondents were able to establish the nature of
possession of their predecessors-in-interest. Evidence was offered to prove that their predecessors-in-
interest had paid taxes on the subject land and introduced improvements thereon (Exhibits "F" to "F9"). A
certified true copy of the affidavit executed by Cristeta Dazo and her sister Simplicia was also formally offered
to prove that the subject parcels of land were inherited by vendor Cristeta Dazo from her father Pedro Dazo
with the conformity of her only sister Simplicia (Exhibit "G"). Likewise, a report from the Bureau of Lands
was presented in evidence together with a letter from the Bureau of Forest Development, to prove that the
questioned lots were part of the alienable and disposable zone of the government and that no forestry
interest was affected (CA GR No. 28953, Records, p. 33).
In the main, petitioner seeks to defeat respondents' application for registration of title on the ground of
foreign nationality. Accordingly, the ruling in Director of Lands v. Buyco (supra) supports petitioner's thesis.
We disagree.
In Buyco, the applicants therein were likewise foreign nationals but were natural-born Filipino citizens at the
time of their supposed acquisition of the property. But this is where the similarity ends. The applicants in
Buyco sought to register a large tract of land under the provisions of the Land Registration Act, and in the
alternative, under the provisions of the Public Land Act. The land registration court decided in favor of the
applicants and was affirmed by the appellate court on appeal. The Director of Lands brought the matter
before us on review and we reversed.
This Court, speaking through Justice Davide, Jr., stated:
As could be gleaned from the evidence adduced, the private respondents do not rely on fee simple
ownership based on a Spanish grant or possessory information title under Section 19 of the Land Registration
Act; the private respondents did not present any proof that they or their predecessors-in-interest derived
title from an old Spanish grant such as (a) the "titulo real" or royal grant (b) the "concession especial" or
especial grant; (c) the "composicion con el estado" title or adjustment title; (d) the "titulo de compra" or title
by purchase; and (e) the "informacion posesoria" or possessory information title, which could become a
"titulo gratuito" or a gratuitous title (Director of Forestry v. Muñoz, 23 SCRA 1183 [1968]). The primary basis
of their claim is possession, by themselves and their predecessors-in-interest, since time immemorial.
If indeed private respondents and their predecessors have been in possession since time immemorial, the
rulings of both courts could be upheld for, as this Court stated in Oh Cho v. Director of Lands (75 Phil. 890
[1946]):
. . . All lands that were not acquired from the Government, either by purchase or by grant, belong to the
public domain. An exception to the rule would be any land that should have been in the possession of an
occupant and of his predecessors in interest since time immemorial, for such possession would justify the
presumption that the land had never been part of the public domain or that if had been a private property
even before the Spanish conquest (Cariño v. Insular Government, 41 Phil 935 [1909]; 212 U.S. 449; 53 Law.
Ed., 594) The applicant does not come under the exception, for the earliest possession of the lot by his first
predecessor in interest began in 1880.
. . . alienable public land held by a possessor, personally or through his predecessors-in-interest, openly,
continuously and exclusively for the prescribed statutory period (30 years under the Public Land Act, as
amended) is converted to private property by the mere lapse or completion of said period, ipso jure.
(Director of Lands v. Intermediate Appellate Court, supra)
It is obvious from the foregoing rule that the applicant must prove that (a) the land is alienable public land
and (b) his possession, in the concept above stated, must be either since time immemorial, as ruled in both
Cariño and Susi, or for the period prescribed in the Public Land Act. As to the latter, this Court, in Gutierrez
Hermanos v. Court of Appeals (178 SCRA 37 [1989]), adopted the rule enunciated by the Court of Appeals,
per then Associate Justice Hugo R. Gutierrez, Jr., . . ., that an applicant for registration under Section 48 of
the Public Land Act must secure a certification from the Government that the lands which he claims to have
possessed as owner for more than thirty (30) years are alienable and disposable. It is the burden of the
applicant to prove its positive averments.
In the instant case, private respondents offered no evidence at all to prove that the property subject of the
application is an alienable and disposable land. On the contrary, the entire property . . . was pasture land
(and therefore inalienable under the then 1973 Constitution).
. . . (P)rivate respondents' evidence miserably failed to establish their imperfect title to the property in
question. Their allegation of possession since time immemorial, . . ., is patently baseless. . . . When referring
to possession, specifically "immemorial possession," it means possession of which no man living has seen
the beginning, and the existence of which he has learned from his elders (Susi v. Razon, supra). Such
possession was never present in the case of private respondents. . . .
. . ., there does not even exist a reasonable basis for the finding that the private respondents and their
predecessors-in-interest possessed the land for more than eighty (80) years, . . .
xxx xxx xxx
To this Court's mind, private respondents failed to prove that (their predecessor-in-interest) had possessed
the property allegedly covered by Tax Declaration No. 15853 and made the subject of both his last will and
testament and the project of partition of his estate among his heirs — in such manner as to remove the same
from the public domain under the Cariño and Susi doctrines. Thus, (when the predecessor-in-interest) died
on 31 May 1937, he transmitted no right whatsoever, with respect to the said property, to his heirs. This
being the case, his possession cannot be tacked to that of the private respondents for the latter's benefit
pursuant to Section 48(b) of the Public Land Act, the alternative ground relied upon in their application . . .
xxx xxx xxx
Considering that the private respondents became American citizens before such filing, it goes without saying
that they had acquired no vested right, consisting of an imperfect title, over the property before they lost
their Philippine citizenship. (Emphasis supplied)
Clearly, the application in Buyco were denied registration of title not merely because they were American
citizens at the time of their application therefor. Respondents therein failed to prove possession of their
predecessor-in-interest since time immemorial or possession in such a manner that the property has been
segregated from public domain; such that at the time of their application, as American citizens, they have
acquired no vested rights over the parcel of land.
In the case at bar, private respondents were undoubtedly natural-born Filipino citizens at the time of the
acquisition of the properties and by virtue thereof, acquired vested rights thereon, tacking in the process,
the possession in the concept of owner and the prescribed period of time held by their predecessors-in-
interest under the Public Land Act. In addition, private respondents have constructed a house of strong
materials on the contested property, now occupied by respondent Lapiñas mother.
But what should not be missed in the disposition of this case is the fact that the Constitution itself allows
private respondents to register the contested parcels of land in their favor. Sections 7 and 8 of Article XII of
the Constitution contain the following pertinent provisions, to wit:
Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to acquire or hold lands of the public domain.
Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines
who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided
by law. (Emphasis supplied)
Section 8, Article XII of the 1987 Constitution above quoted is similar to Section 15, Article XIV of the then
1973 Constitution which reads:
Sec. 15. Notwithstanding the provisions of Section 14 of this Article, a natural-born citizen of the
Philippines who has lost his citizenship may be a transferee of private land, for use by him as his residence,
as the Batasang Pambansa may provide.
Pursuant thereto, Batas Pambansa Blg. 185 was passed into law, the relevant provision of which provides:
Sec. 2. Any natural-born citizen of the Philippines who has lost his Philippine citizenship and who has
the legal capacity to enter into a contract under Philippine laws may be a transferee of a private land up to
a maximum area of one thousand square meters, in the case of urban land, or one hectare in the case of
rural land, to be used by him as his residence. In the case of married couples, one of them may avail of the
privilege herein granted; Provided, That if both shall avail of the same, the total area acquired shall not
exceed the maximum herein fixed.
In case the transferee already owns urban or rural lands for residential purposes, he shall still be entitled to
be a transferee of an additional urban or rural lands for residential purposes which, when added to those
already owned by him, shall not exceed the maximum areas herein authorized.
From the adoption of the 1987 Constitution up to the present, no other law has been passed by the
legislature on the same subject. Thus, what governs the disposition of private lands in favor of a natural-
born Filipino citizen who has lost his Philippine citizenship remains to be BP 185.
Even if private respondents were already Canadian citizens at the time they applied for registration of the
properties in question, said properties as discussed above were already private lands; consequently, there
could be no legal impediment for the registration thereof by respondents in view of what the Constitution
ordains. The parcels of land sought to be registered no longer form part of the public domain. They are
already private in character since private respondents' predecessors-in-interest have been in open,
continuous and exclusive possession and occupation thereof under claim of ownership prior to June 12, 1945
or since 1937. The law provides that a natural-born citizen of the Philippines who has lost his Philippine
citizenship may be a transferee of a private land up to a maximum area of 1,000 sq.m., if urban, or one (1)
hectare in case of rural land, to be used by him as his residence (BP 185).
It is undisputed that private respondents, as vendees of a private land, were natural-born citizens of the
Philippines. For the purpose of transfer and/or acquisition of a parcel of residential land, it is not significant
whether private respondents are no longer Filipino citizens at the time they purchased or registered the
parcels of land in question. What is important is that private respondents were formerly natural-born citizens
of the Philippines, and as transferees of a private land, they could apply for registration in accordance with
the mandate of Section 8, Article XII of the Constitution. Considering that private respondents were able to
prove the requisite period and character of possession of their predecessors-in-interest over the subject lots,
their application for registration of title must perforce be approved.
The dissenting opinion, however, states that the requirements in BP 185, must also be complied with by
private respondents. Specifically, it refers to Section 6, which provides:
Sec. 6. In addition to the requirements provided for in other laws for the registration of titles to lands,
no private land shall be transferred under this Act, unless the transferee shall submit to the register of deeds
of the province or city where the property is located a sworn statement showing the date and place of his
birth; the names and addresses of his parents, of his spouse and children, if any; the area, the location and
the mode of acquisition of his landholdings in the Philippines, if any; his intention to reside permanently in
the Philippines; the date he lost his Philippine citizenship and the country of which he is presently a citizen;
and such other information as may be required under Section 8 of this Act.
The Court is of the view that the requirements in Sec. 6 of BP 185 do not apply in the instant case since said
requirements are primarily directed to the register of deeds before whom compliance therewith is to be
submitted. Nowhere in the provision is it stated, much less implied, that the requirements must likewise be
submitted before the land registration court prior to the approval of an application for registration of title.
An application for registration of title before a land registration court should not be confused with the
issuance of a certificate of title by the register of deeds. It is only when the judgment of the land registration
court approving the application for registration has become final that a decree of registration is issued. And
that is the time when the requirements of Sec. 6, BP 185, before the register of deeds should be complied
with by the applicants. This decree of registration is the one that is submitted to the office of the register of
deeds for issuance of the certificate of title in favor of the applicant. Prior to the issuance of the decree of
registration, the register of deeds has no participation in the approval of the application for registration of
title as the decree of registration is yet to be issued.
G.R. No. L-17587 September 12, 1967
PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINA SANTOS Y CANON FAUSTINO,
deceased, plaintiff-appellant,
vs.
LUI SHE in her own behalf and as administratrix of the intestate estate of Wong Heng, deceased,
defendant-appellant.
Nicanor S. Sison for plaintiff-appellant.

Ozaeta, Gibbs & Ozaeta for defendant-appellant.
CASTRO, J.:
Justina Santos y Canon Faustino and her sister Lorenzo were the owners in common of a piece of land in
Manila. This parcel, with an area of 2,582.30 square meters, is located on Rizal Avenue and opens into
Florentino Torres street at the back and Katubusan street on one side. In it are two residential houses with
entrance on Florentino Torres street and the Hen Wah Restaurant with entrance on Rizal Avenue. The sisters
lived in one of the houses, while Wong Heng, a Chinese, lived with his family in the restaurant. Wong had
been a long-time lessee of a portion of the property, paying a monthly rental of P2,620.
On September 22, 1957 Justina Santos became the owner of the entire property as her sister died with no
other heir. Then already well advanced in years, being at the time 90 years old, blind, crippled and an invalid,
she was left with no other relative to live with. Her only companions in the house were her 17 dogs and 8
maids. Her otherwise dreary existence was brightened now and then by the visits of Wong's four children
who had become the joy of her life. Wong himself was the trusted man to whom she delivered various
amounts for safekeeping, including rentals from her property at the corner of Ongpin and Salazar streets
and the rentals which Wong himself paid as lessee of a part of the Rizal Avenue property. Wong also took
care of the payment; in her behalf, of taxes, lawyers' fees, funeral expenses, masses, salaries of maids and
security guard, and her household expenses.
"In grateful acknowledgment of the personal services of the lessee to her," Justina Santos executed on
November 15, 1957 a contract of lease (Plff Exh. 3) in favor of Wong, covering the portion then already leased
to him and another portion fronting Florentino Torres street. The lease was for 50 years, although the lessee
was given the right to withdraw at any time from the agreement; the monthly rental was P3,120. The
contract covered an area of 1,124 square meters. Ten days later (November 25), the contract was amended
(Plff Exh. 4) so as to make it cover the entire property, including the portion on which the house of Justina
Santos stood, at an additional monthly rental of P360. For his part Wong undertook to pay, out of the rental
due from him, an amount not exceeding P1,000 a month for the food of her dogs and the salaries of her
maids.
On December 21 she executed another contract (Plff Exh. 7) giving Wong the option to buy the leased
premises for P120,000, payable within ten years at a monthly installment of P1,000. The option, written in
Tagalog, imposed on him the obligation to pay for the food of the dogs and the salaries of the maids in her
household, the charge not to exceed P1,800 a month. The option was conditioned on his obtaining Philippine
citizenship, a petition for which was then pending in the Court of First Instance of Rizal. It appears, however,
that this application for naturalization was withdrawn when it was discovered that he was not a resident of
Rizal. On October 28, 1958 she filed a petition to adopt him and his children on the erroneous belief that
adoption would confer on them Philippine citizenship. The error was discovered and the proceedings were
abandoned.
On November 18, 1958 she executed two other contracts, one (Plff Exh. 5) extending the term of the lease
to 99 years, and another (Plff Exh. 6) fixing the term of the option of 50 years. Both contracts are written in
Tagalog.
In two wills executed on August 24 and 29, 1959 (Def Exhs. 285 & 279), she bade her legatees to respect the
contracts she had entered into with Wong, but in a codicil (Plff Exh. 17) of a later date (November 4, 1959)
she appears to have a change of heart. Claiming that the various contracts were made by her because of
machinations and inducements practiced by him, she now directed her executor to secure the annulment of
the contracts.
On November 18 the present action was filed in the Court of First Instance of Manila. The complaint alleged
that the contracts were obtained by Wong "through fraud, misrepresentation, inequitable conduct, undue
influence and abuse of confidence and trust of and (by) taking advantage of the helplessness of the plaintiff
and were made to circumvent the constitutional provision prohibiting aliens from acquiring lands in the
Philippines and also of the Philippine Naturalization Laws." The court was asked to direct the Register of
Deeds of Manila to cancel the registration of the contracts and to order Wong to pay Justina Santos the
additional rent of P3,120 a month from November 15, 1957 on the allegation that the reasonable rental of
the leased premises was P6,240 a month.
In his answer, Wong admitted that he enjoyed her trust and confidence as proof of which he volunteered
the information that, in addition to the sum of P3,000 which he said she had delivered to him for safekeeping,
another sum of P22,000 had been deposited in a joint account which he had with one of her maids. But he
denied having taken advantage of her trust in order to secure the execution of the contracts in question. As
counterclaim he sought the recovery of P9,210.49 which he said she owed him for advances.
Wong's admission of the receipt of P22,000 and P3,000 was the cue for the filing of an amended complaint.
Thus on June 9, 1960, aside from the nullity of the contracts, the collection of various amounts allegedly
delivered on different occasions was sought. These amounts and the dates of their delivery are P33,724.27
(Nov. 4, 1957); P7,344.42 (Dec. 1, 1957); P10,000 (Dec. 6, 1957); P22,000 and P3,000 (as admitted in his
answer). An accounting of the rentals from the Ongpin and Rizal Avenue properties was also demanded.
In the meantime as a result of a petition for guardianship filed in the Juvenile and Domestic Relations Court,
the Security Bank & Trust Co. was appointed guardian of the properties of Justina Santos, while Ephraim G.
Gochangco was appointed guardian of her person.
In his answer, Wong insisted that the various contracts were freely and voluntarily entered into by the
parties. He likewise disclaimed knowledge of the sum of P33,724.27, admitted receipt of P7,344.42 and
P10,000, but contended that these amounts had been spent in accordance with the instructions of Justina
Santos; he expressed readiness to comply with any order that the court might make with respect to the sums
of P22,000 in the bank and P3,000 in his possession.
The case was heard, after which the lower court rendered judgment as follows:
[A]ll the documents mentioned in the first cause of action, with the exception of the first which is the lease
contract of 15 November 1957, are declared null and void; Wong Heng is condemned to pay unto plaintiff
thru guardian of her property the sum of P55,554.25 with legal interest from the date of the filing of the
amended complaint; he is also ordered to pay the sum of P3,120.00 for every month of his occupation as
lessee under the document of lease herein sustained, from 15 November 1959, and the moneys he has
consigned since then shall be imputed to that; costs against Wong Heng.
From this judgment both parties appealed directly to this Court. After the case was submitted for decision,
both parties died, Wong Heng on October 21, 1962 and Justina Santos on December 28, 1964. Wong was
substituted by his wife, Lui She, the other defendant in this case, while Justina Santos was substituted by the
Philippine Banking Corporation.
Justina Santos maintained — now reiterated by the Philippine Banking Corporation — that the lease contract
(Plff Exh. 3) should have been annulled along with the four other contracts (Plff Exhs. 4-7) because it lacks
mutuality; because it included a portion which, at the time, was in custodia legis; because the contract was
obtained in violation of the fiduciary relations of the parties; because her consent was obtained through
undue influence, fraud and misrepresentation; and because the lease contract, like the rest of the contracts,
is absolutely simulated.
Paragraph 5 of the lease contract states that "The lessee may at any time withdraw from this agreement." It
is claimed that this stipulation offends article 1308 of the Civil Code which provides that "the contract must
bind both contracting parties; its validity or compliance cannot be left to the will of one of them."
We have had occasion to delineate the scope and application of article 1308 in the early case of Taylor v. Uy
Tieng Piao.1 We said in that case:
Article 1256 [now art. 1308] of the Civil Code in our opinion creates no impediment to the insertion in a
contract for personal service of a resolutory condition permitting the cancellation of the contract by one of
the parties. Such a stipulation, as can be readily seen, does not make either the validity or the fulfillment of
the contract dependent upon the will of the party to whom is conceded the privilege of cancellation; for
where the contracting parties have agreed that such option shall exist, the exercise of the option is as much
in the fulfillment of the contract as any other act which may have been the subject of agreement. Indeed,
the cancellation of a contract in accordance with conditions agreed upon beforehand is fulfillment.2
And so it was held in Melencio v. Dy Tiao Lay 3 that a "provision in a lease contract that the lessee, at any
time before he erected any building on the land, might rescind the lease, can hardly be regarded as a
violation of article 1256 [now art. 1308] of the Civil Code."
The case of Singson Encarnacion v. Baldomar 4 cannot be cited in support of the claim of want of mutuality,
because of a difference in factual setting. In that case, the lessees argued that they could occupy the
premises as long as they paid the rent. This is of course untenable, for as this Court said, "If this defense
were to be allowed, so long as defendants elected to continue the lease by continuing the payment of the
rentals, the owner would never be able to discontinue it; conversely, although the owner should desire the
lease to continue the lessees could effectively thwart his purpose if they should prefer to terminate the
contract by the simple expedient of stopping payment of the rentals." Here, in contrast, the right of the
lessee to continue the lease or to terminate it is so circumscribed by the term of the contract that it cannot
be said that the continuance of the lease depends upon his will. At any rate, even if no term had been fixed
in the agreement, this case would at most justify the fixing of a period5 but not the annulment of the
contract.
Nor is there merit in the claim that as the portion of the property formerly owned by the sister of Justina
Santos was still in the process of settlement in the probate court at the time it was leased, the lease is invalid
as to such portion. Justina Santos became the owner of the entire property upon the death of her sister
Lorenzo on September 22, 1957 by force of article 777 of the Civil Code. Hence, when she leased the property
on November 15, she did so already as owner thereof. As this Court explained in upholding the sale made
by an heir of a property under judicial administration:
That the land could not ordinarily be levied upon while in custodia legis does not mean that one of the heirs
may not sell the right, interest or participation which he has or might have in the lands under administration.
The ordinary execution of property in custodia legis is prohibited in order to avoid interference with the
possession by the court. But the sale made by an heir of his share in an inheritance, subject to the result of
the pending administration, in no wise stands in the way of such administration.6
It is next contended that the lease contract was obtained by Wong in violation of his fiduciary relationship
with Justina Santos, contrary to article 1646, in relation to article 1941 of the Civil Code, which disqualifies
"agents (from leasing) the property whose administration or sale may have been entrusted to them." But
Wong was never an agent of Justina Santos. The relationship of the parties, although admittedly close and
confidential, did not amount to an agency so as to bring the case within the prohibition of the law.
Just the same, it is argued that Wong so completely dominated her life and affairs that the contracts express
not her will but only his. Counsel for Justina Santos cites the testimony of Atty. Tomas S. Yumol who said
that he prepared the lease contract on the basis of data given to him by Wong and that she told him that
"whatever Mr. Wong wants must be followed."7
The testimony of Atty. Yumol cannot be read out of context in order to warrant a finding that Wong
practically dictated the terms of the contract. What this witness said was:
Q Did you explain carefully to your client, Doña Justina, the contents of this document before she signed it?
A I explained to her each and every one of these conditions and I also told her these conditions were quite
onerous for her, I don't really know if I have expressed my opinion, but I told her that we would rather not
execute any contract anymore, but to hold it as it was before, on a verbal month to month contract of lease.
Q But, she did not follow your advice, and she went with the contract just the same?
A She agreed first . . .
Q Agreed what?
A Agreed with my objectives that it is really onerous and that I was really right, but after that, I was called
again by her and she told me to follow the wishes of Mr. Wong Heng.
xxx xxx xxx
Q So, as far as consent is concerned, you were satisfied that this document was perfectly proper?
xxx xxx xxx
A Your Honor, if I have to express my personal opinion, I would say she is not, because, as I said before,
she told me — "Whatever Mr. Wong wants must be followed."8
Wong might indeed have supplied the data which Atty. Yumol embodied in the lease contract, but to say this
is not to detract from the binding force of the contract. For the contract was fully explained to Justina Santos
by her own lawyer. One incident, related by the same witness, makes clear that she voluntarily consented
to the lease contract. This witness said that the original term fixed for the lease was 99 years but that as he
doubted the validity of a lease to an alien for that length of time, he tried to persuade her to enter instead
into a lease on a month-to-month basis. She was, however, firm and unyielding. Instead of heeding the
advice of the lawyer, she ordered him, "Just follow Mr. Wong Heng."9 Recounting the incident, Atty. Yumol
declared on cross examination:
Considering her age, ninety (90) years old at the time and her condition, she is a wealthy woman, it is just
natural when she said "This is what I want and this will be done." In particular reference to this contract of
lease, when I said "This is not proper," she said — "You just go ahead, you prepare that, I am the owner, and
if there is any illegality, I am the only one that can question the illegality."10
Atty. Yumol further testified that she signed the lease contract in the presence of her close friend,
Hermenegilda Lao, and her maid, Natividad Luna, who was constantly by her side.11 Any of them could have
testified on the undue influence that Wong supposedly wielded over Justina Santos, but neither of them was
presented as a witness. The truth is that even after giving his client time to think the matter over, the lawyer
could not make her change her mind. This persuaded the lower court to uphold the validity of the lease
contract against the claim that it was procured through undue influence.
Indeed, the charge of undue influence in this case rests on a mere inference12 drawn from the fact that
Justina Santos could not read (as she was blind) and did not understand the English language in which the
contract is written, but that inference has been overcome by her own evidence.
Nor is there merit in the claim that her consent to the lease contract, as well as to the rest of the contracts
in question, was given out of a mistaken sense of gratitude to Wong who, she was made to believe, had
saved her and her sister from a fire that destroyed their house during the liberation of Manila. For while a
witness claimed that the sisters were saved by other persons (the brothers Edilberto and Mariano Sta.
Ana)13 it was Justina Santos herself who, according to her own witness, Benjamin C. Alonzo, said "very
emphatically" that she and her sister would have perished in the fire had it not been for Wong.14 Hence the
recital in the deed of conditional option (Plff Exh. 7) that "[I]tong si Wong Heng ang siyang nagligtas sa aming
dalawang magkapatid sa halos ay tiyak na kamatayan", and the equally emphatic avowal of gratitude in the
lease contract (Plff Exh. 3).
As it was with the lease contract (Plff Exh. 3), so it was with the rest of the contracts (Plff Exhs. 4-7) — the
consent of Justina Santos was given freely and voluntarily. As Atty. Alonzo, testifying for her, said:
[I]n nearly all documents, it was either Mr. Wong Heng or Judge Torres and/or both. When we had
conferences, they used to tell me what the documents should contain. But, as I said, I would always ask the
old woman about them and invariably the old woman used to tell me: "That's okay. It's all right."15
But the lower court set aside all the contracts, with the exception of the lease contract of November 15,
1957, on the ground that they are contrary to the expressed wish of Justina Santos and that their
considerations are fictitious. Wong stated in his deposition that he did not pay P360 a month for the
additional premises leased to him, because she did not want him to, but the trial court did not believe him.
Neither did it believe his statement that he paid P1,000 as consideration for each of the contracts (namely,
the option to buy the leased premises, the extension of the lease to 99 years, and the fixing of the term of
the option at 50 years), but that the amount was returned to him by her for safekeeping. Instead, the court
relied on the testimony of Atty. Alonzo in reaching the conclusion that the contracts are void for want of
consideration.
Atty. Alonzo declared that he saw no money paid at the time of the execution of the documents, but his
negative testimony does not rule out the possibility that the considerations were paid at some other time as
the contracts in fact recite. What is more, the consideration need not pass from one party to the other at
the time a contract is executed because the promise of one is the consideration for the other.16
With respect to the lower court's finding that in all probability Justina Santos could not have intended to part
with her property while she was alive nor even to lease it in its entirety as her house was built on it, suffice
it to quote the testimony of her own witness and lawyer who prepared the contracts (Plff Exhs. 4-7) in
question, Atty. Alonzo:
The ambition of the old woman, before her death, according to her revelation to me, was to see to it that
these properties be enjoyed, even to own them, by Wong Heng because Doña Justina told me that she did
not have any relatives, near or far, and she considered Wong Heng as a son and his children her
grandchildren; especially her consolation in life was when she would hear the children reciting prayers in
Tagalog.17
She was very emphatic in the care of the seventeen (17) dogs and of the maids who helped her much, and
she told me to see to it that no one could disturb Wong Heng from those properties. That is why we thought
of the ninety-nine (99) years lease; we thought of adoption, believing that thru adoption Wong Heng might
acquire Filipino citizenship; being the adopted child of a Filipino citizen.18
This is not to say, however, that the contracts (Plff Exhs. 3-7) are valid. For the testimony just quoted, while
dispelling doubt as to the intention of Justina Santos, at the same time gives the clue to what we view as a
scheme to circumvent the Constitutional prohibition against the transfer of lands to aliens. "The illicit
purpose then becomes the illegal causa"19 rendering the contracts void.
Taken singly, the contracts show nothing that is necessarily illegal, but considered collectively, they reveal
an insidious pattern to subvert by indirection what the Constitution directly prohibits. To be sure, a lease to
an alien for a reasonable period is valid. So is an option giving an alien the right to buy real property on
condition that he is granted Philippine citizenship. As this Court said in Krivenko v. Register of Deeds:20
[A]liens are not completely excluded by the Constitution from the use of lands for residential purposes. Since
their residence in the Philippines is temporary, they may be granted temporary rights such as a lease contract
which is not forbidden by the Constitution. Should they desire to remain here forever and share our fortunes
and misfortunes, Filipino citizenship is not impossible to acquire.
But if an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of which the
Filipino owner cannot sell or otherwise dispose of his property,21 this to last for 50 years, then it becomes
clear that the arrangement is a virtual transfer of ownership whereby the owner divests himself in stages
not only of the right to enjoy the land ( jus possidendi, jus utendi, jus fruendi and jus abutendi) but also of
the right to dispose of it ( jus disponendi) — rights the sum total of which make up ownership. It is just as if
today the possession is transferred, tomorrow, the use, the next day, the disposition, and so on, until
ultimately all the rights of which ownership is made up are consolidated in an alien. And yet this is just exactly
what the parties in this case did within the space of one year, with the result that Justina Santos' ownership
of her property was reduced to a hollow concept. If this can be done, then the Constitutional ban against
alien landholding in the Philippines, as announced in Krivenko v. Register of Deeds,22 is indeed in grave peril.
It does not follow from what has been said, however, that because the parties are in pari delicto they will be
left where they are, without relief. For one thing, the original parties who were guilty of a violation of the
fundamental charter have died and have since been substituted by their administrators to whom it would
be unjust to impute their guilt.23 For another thing, and this is not only cogent but also important, article
1416 of the Civil Code provides, as an exception to the rule on pari delicto, that "When the agreement is not
illegal per se but is merely prohibited, and the prohibition by law is designed for the protection of the
plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered." The
Constitutional provision that "Save in cases of hereditary succession, no private agricultural land shall be
transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands
of the public domain in the Philippines"24 is an expression of public policy to conserve lands for the Filipinos.
As this Court said in Krivenko:
It is well to note at this juncture that in the present case we have no choice. We are construing the
Constitution as it is and not as we may desire it to be. Perhaps the effect of our construction is to preclude
aliens admitted freely into the Philippines from owning sites where they may build their homes. But if this is
the solemn mandate of the Constitution, we will not attempt to compromise it even in the name of amity or
equity . . . .
For all the foregoing, we hold that under the Constitution aliens may not acquire private or public agricultural
lands, including residential lands, and, accordingly, judgment is affirmed, without costs.25
That policy would be defeated and its continued violation sanctioned if, instead of setting the contracts aside
and ordering the restoration of the land to the estate of the deceased Justina Santos, this Court should apply
the general rule of pari delicto. To the extent that our ruling in this case conflicts with that laid down in
Rellosa v. Gaw Chee Hun 26 and subsequent similar cases, the latter must be considered as pro tanto
qualified.
The claim for increased rentals and attorney's fees, made in behalf of Justina Santos, must be denied for lack
of merit.
And what of the various amounts which Wong received in trust from her? It appears that he kept two classes
of accounts, one pertaining to amount which she entrusted to him from time to time, and another pertaining
to rentals from the Ongpin property and from the Rizal Avenue property, which he himself was leasing.
With respect to the first account, the evidence shows that he received P33,724.27 on November 8, 1957 (Plff
Exh. 16); P7,354.42 on December 1, 1957 (Plff Exh. 13); P10,000 on December 6, 1957 (Plff Exh. 14) ; and
P18,928.50 on August 26, 1959 (Def. Exh. 246), or a total of P70,007.19. He claims, however, that he settled
his accounts and that the last amount of P18,928.50 was in fact payment to him of what in the liquidation
was found to be due to him.
He made disbursements from this account to discharge Justina Santos' obligations for taxes, attorneys' fees,
funeral services and security guard services, but the checks (Def Exhs. 247-278) drawn by him for this
purpose amount to only P38,442.84.27 Besides, if he had really settled his accounts with her on August 26,
1959, we cannot understand why he still had P22,000 in the bank and P3,000 in his possession, or a total of
P25,000. In his answer, he offered to pay this amount if the court so directed him. On these two grounds,
therefore, his claim of liquidation and settlement of accounts must be rejected.
After subtracting P38,442.84 (expenditures) from P70,007.19 (receipts), there is a difference of P31,564
which, added to the amount of P25,000, leaves a balance of P56,564.3528 in favor of Justina Santos.
As to the second account, the evidence shows that the monthly income from the Ongpin property until its
sale in Rizal Avenue July, 1959 was P1,000, and that from the Rizal Avenue property, of which Wong was the
lessee, was P3,120. Against this account the household expenses and disbursements for the care of the 17
dogs and the salaries of the 8 maids of Justina Santos were charged. This account is contained in a notebook
(Def. Exh. 6) which shows a balance of P9,210.49 in favor of Wong. But it is claimed that the rental from both
the Ongpin and Rizal Avenue properties was more than enough to pay for her monthly expenses and that,
as a matter of fact, there should be a balance in her favor. The lower court did not allow either party to
recover against the other. Said the court:
[T]he documents bear the earmarks of genuineness; the trouble is that they were made only by Francisco
Wong and Antonia Matias, nick-named Toning, — which was the way she signed the loose sheets, and there
is no clear proof that Doña Justina had authorized these two to act for her in such liquidation; on the contrary
if the result of that was a deficit as alleged and sought to be there shown, of P9,210.49, that was not what
Doña Justina apparently understood for as the Court understands her statement to the Honorable Judge of
the Juvenile Court . . . the reason why she preferred to stay in her home was because there she did not incur
in any debts . . . this being the case, . . . the Court will not adjudicate in favor of Wong Heng on his
counterclaim; on the other hand, while it is claimed that the expenses were much less than the rentals and
there in fact should be a superavit, . . . this Court must concede that daily expenses are not easy to compute,
for this reason, the Court faced with the choice of the two alternatives will choose the middle course which
after all is permitted by the rules of proof, Sec. 69, Rule 123 for in the ordinary course of things, a person will
live within his income so that the conclusion of the Court will be that there is neither deficit nor superavit
and will let the matter rest here.
Both parties on appeal reiterate their respective claims but we agree with the lower court that both claims
should be denied. Aside from the reasons given by the court, we think that the claim of Justina Santos
totalling P37,235, as rentals due to her after deducting various expenses, should be rejected as the evidence
is none too clear about the amounts spent by Wong for food29 masses30 and salaries of her maids.31 His
claim for P9,210.49 must likewise be rejected as his averment of liquidation is belied by his own admission
that even as late as 1960 he still had P22,000 in the bank and P3,000 in his possession.
ACCORDINGLY, the contracts in question (Plff Exhs. 3-7) are annulled and set aside; the land subject-matter
of the contracts is ordered returned to the estate of Justina Santos as represented by the Philippine Banking
Corporation; Wong Heng (as substituted by the defendant-appellant Lui She) is ordered to pay the Philippine
Banking Corporation the sum of P56,564.35, with legal interest from the date of the filing of the amended
complaint; and the amounts consigned in court by Wong Heng shall be applied to the payment of rental from
November 15, 1959 until the premises shall have been vacated by his heirs. Costs against the defendant-
appellant.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and Angeles, JJ., concur.
Separate Opinions
FERNANDO, J., concurring:
With the able and well-written opinion of Justice Castro, I am in full agreement. The exposition of the facts
leaves nothing to be desired and the statement of the law is notable for its comprehensiveness and clarity.
This concurring opinion has been written solely to express what I consider to be the unfortunate and
deplorable consequences of applying the pari delicto concept, as was, to my mind, indiscriminately done, to
alien landholding declared illegal under the Krivenko doctrine in some past decisions.
It is to be remembered that in Krivenko v. The Register of Deeds of Manila,1 this Court over strong dissents
held that residential and commercial lots may be considered agricultural within the meaning of the
constitutional provision prohibiting the transfer of any private agricultural land to individuals, corporations
or associations not qualified to acquire or hold lands of the public domain in the Philippines save in cases of
hereditary succession.
That provision of the Constitution took effect on November 15, 1935 when the Commonwealth Government
was established. The interpretation as set forth in the Krivenko decision was only handed down on
November 15, 1947. Prior to that date there were many who were of the opinion that the phrase agricultural
land should be construed strictly and not be made to cover residential and commercial lots. Acting on that
belief, several transactions were entered into transferring such lots to alien vendees by Filipino-vendors.
After the Krivenko decision, some Filipino vendors sought recovery of the lots in question on the ground that
the sales were null and void. No definite ruling was made by this Court until September of 1953, when on
the 29th of said month, Rellosa v. Gaw Chee Hun,2 Bautista v. Uy Isabelo,3 Talento v. Makiki,4 Caoile v. Chiao
Peng5 were decided.
Of the four decisions in September, 1953, the most extensive discussion of the question is found in Rellosa
v. Gaw Chee Hun, the opinion being penned by retired Justice Bautista Angelo with the concurrence only of
one Justice, Justice Labrador, also retired. Former Chief Justice Paras as well as the former Justices Tuason
and Montemayor concurred in the result. The necessary sixth vote for a decision was given by the then
Justice Bengzon, who had a two-paragraph concurring opinion disagreeing with the main opinion as to the
force to be accorded to the two cases,6 therein cited. There were two dissenting opinions by former Justices
Pablo and Alex Reyes. The doctrine as announced in the Rellosa case is that while the sale by a Filipino-
vendor to an alien-vendee of a residential or a commercial lot is null and void as held in the Krivenko case,
still the Filipino-vendor has no right to recover under a civil law doctrine, the parties being in pari delicto.
The only remedy to prevent this continuing violation of the Constitution which the decision impliedly
sanctions by allowing the alien vendees to retain the lots in question is either escheat or reversion. Thus: "By
following either of these remedies, or by approving an implementary law as above suggested, we can enforce
the fundamental policy of our Constitution regarding our natural resources without doing violence to the
principle of pari delicto."7
Were the parties really in pari delicto? Had the sale by and between Filipino-vendor and alien-vendee
occurred after the decision in the Krivenko case, then the above view would be correct that both Filipino-
vendor and alien-vendee could not be considered as innocent parties within the contemplation of the law.
Both of them should be held equally guilty of evasion of the Constitution.
Since, however, the sales in question took place prior to the Krivenko decision, at a time when the
assumption could be honestly entertained that there was no constitutional prohibition against the sale of
commercial or residential lots by Filipino-vendor to alien-vendee, in the absence of a definite decision by the
Supreme Court, it would not be doing violence to reason to free them from the imputation of evading the
Constitution. For evidently evasion implies at the very least knowledge of what is being evaded. The new
Civil Code expressly provides: "Mistakes upon a doubtful or difficult question of law may be the basis of good
faith."8
According to the Rellosa opinion, both parties are equally guilty of evasion of the Constitution, based on the
broader principle that "both parties are presumed to know the law." This statement that the sales entered
into prior to the Krivenko decision were at that time already vitiated by a guilty knowledge of the parties
may be too extreme a view. It appears to ignore a postulate of a constitutional system, wherein the words
of the Constitution acquire meaning through Supreme Court adjudication.1awphîl.nèt
Reference may be made by way of analogy to a decision adjudging a statute void. Under the orthodox theory
of constitutional law, the act having been found unconstitutional was not a law, conferred no rights, imposed
no duty, afforded no protection.9 As pointed out by former Chief Justice Hughes though in Chicot County
Drainage District v. Baxter State Bank:10 "It is quite clear, however, that such broad statements as to the
effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a
statute, prior to such a determination, is an operative fact and may have consequences which cannot justly
be ignored. The past cannot always be erased by a new judicial declaration. The effect of subsequent ruling
as to invalidity may have to be considered in various aspects, — with respect to particular relations,
individual and corporate, and particular conduct, private and official. Questions of rights claimed to have
become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of
public policy in the light of the nature both of the statute and of its previous application, demand
examination."
After the Krivenko decision, there is no doubt that continued possession by alien-vendee of property
acquired before its promulgation is violative of the Constitution. It is as if an act granting aliens the right to
acquire residential and commercial lots were annulled by the Supreme Court as contrary to the provision of
the Constitution prohibiting aliens from acquiring private agricultural land.
The question then as now, therefore, was and is how to divest the alien of such property rights on terms
equitable to both parties. That question should be justly resolved in accordance with the mandates of the
Constitution not by a wholesale condemnation of both parties for entering into a contract at a time when
there was no ban as yet arising from the Krivenko decision, which could not have been anticipated.
Unfortunately, under the Rellosa case, it was assumed that the parties, being in pari delicto, would be left in
the situation in which they were, neither being in a position to seek judicial redress.
Would it not have been more in consonance with the Constitution, if instead the decision compelled the
restitution of the property by the alien-vendee to the Filipino-vendor? Krivenko decision held in clear, explicit
and unambigous language that: "We are deciding the instant case under section 5 of Article XIII of the
Constitution which is more comprehensive and more absolute in the sense that it prohibits the transfer to
aliens of any private agricultural land including residential land whatever its origin might have been . . . . This
prohibition [Rep. Act No. 133] makes no distinction between private lands that are strictly agricultural and
private lands that are residential or commercial. The prohibition embraces the sale of private lands of any
kind in favor of aliens, which is again a clear implementation and a legislative interpretation of the
constitutional prohibition. . . . It is well to note at this juncture that in the present case we have no choice.
We are construing the Constitution as it is and not as we may desire it to be. Perhaps the effect of our
construction is to preclude aliens, admitted freely into the Philippines, from owning sites where they may
build their homes. But if this is the solemn mandate of the Constitution, we will not attempt to compromise
it even in the name of amity or equity."11
Alien-vendee is therefore incapacitated or disqualified to acquire and hold real estate. That incapacity and
that disqualification should date from the adoption of the Constitution on November 15, 1935. That
incapacity and that disqualification, however, was made known to Filipino-vendor and to alien-vendee only
upon the promulgation of the Krivenko decision on November 15, 1947. Alien-vendee, therefore, cannot be
allowed to continue owning and exercising acts of ownership over said property, when it is clearly included
within the Constitutional prohibition. Alien-vendee should thus be made to restore the property with its
fruits and rents to Filipino-vendor, its previous owner, if it could be shown that in the utmost good faith, he
transferred his title over the same to alien-vendee, upon restitution of the purchase price of course.
The Constitution bars alien-vendees from owning the property in question. By dismissing those suits, the lots
remained in alien hands. Notwithstanding the solution of escheat or reversion offered, they are still at the
moment of writing, for the most part in alien hands. There have been after almost twenty years no
proceedings for escheat or reversion.
Yet it is clear that an alien-vendee cannot consistently with the constitutional provision, as interpreted in the
Krivenko decision, continue owning and exercising acts of ownership over the real estate in question. It ought
to follow then, if such a continuing violation of the fundamental law is to be put an end to, that the Filipino-
vendor, who in good faith entered into, a contract with an incapacitated person, transferring ownership of
a piece of land after the Constitution went into full force and effect, should, in the light of the ruling in the
Krivenko case, be restored to the possession and ownership thereof, where he has filed the appropriate case
or proceeding. Any other construction would defeat the ends and purposes not only of this particular
provision in question but the rest of the Constitution itself.
The Constitution frowns upon the title remaining in the alien-vendees. Restoration of the property upon
payment of price received by Filipino vendor or its reasonable equivalent as fixed by the court is the answer.
To give the constitutional provision full force and effect, in consonance with the dictates of equity and justice,
the restoration to Filipino-vendor upon the payment of a price fixed by the court is the better remedy. He
thought he could transfer the property to an alien and did so. After the Krivenko case had made clear that
he had no right to sell nor an alien-vendee to purchase the property in question, the obvious solution would
be for him to reacquire the same. That way the Constitution would be given, as it ought to be given, respect
and deference.
It may be said that it is too late at this stage to hope for such a solution, the Rellosa opinion, although
originally concurred in by only one justice, being too firmly imbedded. The writer however sees a welcome
sign in the adoption by the Court in this case of the concurring opinion of the then Justice, later Chief Justice,
Bengzon. Had it been followed then, the problem would not be still with us now. Fortunately, it is never too
late — not even in constitutional adjudication.

Land Ti Full Text Luz Farms V Sec of Dar To Philippine Banking V Lui She

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Land Titles and Deeds |1

[G.R. No. 86889 : December 4, 1990.]

(c) Section 13 which calls upon petitioner to execute a production-sharing plan.

The constitutional provision under consideration reads as follows:

AGRARIAN AND NATURAL RESOURCES REFORM

It includes farming, horticulture, forestry, dairying, sugarmaking . . .

Livestock — domestic animals used or raised on a farm, especially for profit.

The petition is impressed with merit.

Feliciano, J., is on leave.

SARMIENTO, J., concurring:

I agree that the petition be granted.

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B.

G.R. No. 79310 July 14, 1989

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner,

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,

G.R. No. 79777

G.R. No. 79310

(1) Only public lands should be included in the CARP;

G.R. No. 79744

The petitioner now argues that:

G.R. No. 78742

This brings us now to the power of eminent domain.

In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:

This time, we answer in the affirmative.

This refers to Section 18 of the CARP Law providing in full as follows:

(1) Cash payment, under the following terms and conditions:

(4) LBP bonds, which shall have the following features:

(ii) Acquisition of shares of stock of government-owned or controlled corporations or shares of stock

In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

What we deal with here is a revolutionary kind of expropriation.

When E.O. No. 228, categorically stated in its Section 1 that:

WHEREFORE, the Court holds as follows:

G.R. No. 103302 August 12, 1993

Lino M. Patajo for petitioners.chanrobles virtual law library

The Solicitor General for respondents.

G.R. No. L-630 November 15, 1947

ALEXANDER A. KRIVENKO, petitioner-appellant,

Gibbs, Gibbs, Chuidian and Quasha of petitioner-appellant.

Article XIII, section 1, of the Constitutional is as follows:

Article XIII. — Conservation and utilization of natural resources.

Feria, Pablo, Perfecto, Hilado, and Briones, JJ., concur.

G.R. No. 108998 August 24, 1994

REPUBLIC OF THE PHILIPPINES, petitioner,

Byron V. Belarmino and Juan B. Belarmino for private respondents.

SO ORDERED. (Rollo, p. 25)

As found by the trial court:

Respondent court echoed the court a quo's observation, thus:

xxx xxx xxx

Herico in particular, appears to be squarely affirmative:

. . . Secondly, under the provisions of Republic Act

xxx xxx xxx

This Court, speaking through Justice Davide, Jr., stated:

xxx xxx xxx

xxx xxx xxx

G.R. No. L-17587 September 12, 1967

Nicanor S. Sison for plaintiff-appellant.

A She agreed first . . .

xxx xxx xxx

xxx xxx xxx

FERNANDO, J., concurring: