Agrarian Law

Agrarian Law and Social Legislation Atty. Steve Paolo Arellano Mercano

I.

Definition COMPREHENSIVE AGRARIAN REFORM LAW OF 1988 REPUBLIC ACT NO. 6657

SECTION 3. Definitions. - For the purpose of this Act, unless the context indicates otherwise: (a)

Agrarian Reform means the redistribution of lands, regardless of crops or fruits produced, to farmers and regular farm workers who are landless, irrespective of tenurial arrangement, to include the totality of factors and support services designed to lift the economic status of the beneficiaries and all other arrangements alternative to the physical redistribution of lands, such as production or profitsharing, labor administration, and the distribution of shares of stock which will allow beneficiaries to receive a just share of the fruits of the lands they work.

b.) 1987 Constitution Article 13 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 right of small landowners. The State shall further provide incentives for voluntary land-sharing. Section 5. The State shall recognize the right of farmers, farmworkers, and landowners, as well as cooperatives, and other independent farmers' organizations to participate in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial, production, marketing, and other support services. Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition or utilization of other natural resources, including lands of the public domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their

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ancestral lands. The State may resettle landless farmers and farmworkers in its own agricultural estates which shall be distributed to them in the manner provided by law. Section 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of the communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and research, adequate financial, production, and marketing assistance, and other services. The State shall also protect, develop, and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources. Section 8. The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment creation, and privatization of public sector enterprises. Financial instruments used as payment for their lands shall be honored as equity in enterprises of their choice. C. Other Important Definitions (b) Agriculture, Agricultural Enterprise or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit trees, including the harvesting of such farm products, and other farm activities and practices performed by a farmer in conjunction with such farming operations done by persons whether natural of juridical. (As amended by R. A. 7881)chan robles virtual law library

(c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land. (d) Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farm workers' associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farm workers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee. (f) Farmer refers to a natural person whose primary livelihood is cultivation of land or the production of agricultural crops either by himself, or primarily with the assistance of his immediate farm household, whether the land is

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owned by him, or by another person under a leasehold or share tenancy agreement or arrangement with the owner thereof. (g) Farmworker is a natural person who renders service for value as an employee or laborer in an agricultural enterprise or farm regardless of whether his compensation is paid on a daily, weekly, monthly or "pakyaw" basis. The term includes an individual whose work has ceased as a consequence of, or in connection with, a pending agrarian dispute who has not obtained a substantially equivalent and regular farm employment. (h) Regular Farmworker is a natural person who is employed on a permanent basis by an agricultural enterprise or farm. (i) Seasonal Farmworker is a natural person who is employed on a recurrent, periodic or intermittent basis by an agricultural enterprise or farm, whether as a permanent or a non-permanent laborer, such as "dumaan", "sacada", and the like. (j) Other Farmworker is a farmworker who does not fall under paragraphs (g), (h) and (i). (k) Cooperatives shall refer to organizations composed primarily of small agricultural producers, farmers, farm workers, or other agrarian reform beneficiaries who voluntarily organize themselves for the purpose of pooling land, human, technological, financial or other economic resources, and operated on the principle of one member, one vote. A juridical person may be a member of a cooperative, with the same rights and duties as a natural person. D. CARL applicability depends on the existence of an agrarian dispute; elements of an agrarian tenancy relationship: Cases:

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STANFILCO EMPLOYEES AGRARIAN REFORM BENEFICIARIES MULTI-PURPOSE COOPERATIVE vs. DOLE PHILIPPINES, INC., GR 154048

FACTS:

On January 29, 1998, petitioner as seller, and respondent as buyer, entered into a Banana Production and Purchase Agreement (BPPA). The BPPA provided that SEARBEMCO shall sell exclusively to DOLE, and the latter shall buy from the former, all Cavendish bananas of required specifications to be planted on the land owned by SEARBEMCO.

On December 11, 2000, DOLE filed a complaint with the RTC against SEARBEMCO, the spouses Elly and Myrna Abujos (spouses Abujos), and Oribanex Services, Inc. (Oribanex) for specific performance and damages, with a prayer for the issuance of a writ of preliminary injunction and of a temporary restraining order. DOLE alleged that SEARBEMCO sold and delivered to Oribanex, through the spouses Abujos, the bananas rejected by DOLE, in violation of paragraph 5(p), Article V of the BPPA which limited the sale of rejected bananas for "domestic non-export consumption." DOLE further alleged that Oribanex is likewise an exporter of bananas and is its direct competitor.

ISSUE:

Whether or not RTC has jurisdiction over the subject matter of the complaint of DOLE, considering that the case involves an agrarian dispute within the exclusive jurisdiction of the DARAB.

HELD:

DOLE’s complaint falls within the jurisdiction of the regular courts, not the DARAB. SEARBEMCO mainly relies on Section 50 of RA No. 6657 and the characterization of the controversy as an agrarian dispute or as an agrarian reform matter in contending that the present controversy falls within the competence of the DARAB and not of the regular courts.

The BPPA, SEARBEMCO claims, is a joint venture and a production, processing and marketing agreement, as defined under Section 5 (c) (i) and (ii) of DAR AO No. 2-99; hence, any dispute arising from the BPPA is within the exclusive jurisdiction of the DARAB. SEARBEMCO also asserts that the parties’ relationship in the present case is not only that of buyer and seller, but also that of supplier of land covered by the CARP and of manpower on the part of SEARBEMCO, and supplier of agricultural inputs, financing and technological expertise on the

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part of DOLE. Therefore, SEARBEMCO concludes that the BPPA is not an ordinary contract, but one that involves an agrarian element and, as such, is imbued with public interest.

Additionally, the inclusion of third parties in the complaint supports our declaration that the present case does not fall under DARAB’s jurisdiction. DARAB’s quasi-judicial powers under Section 50 of RA No. 6657 may be invoked only when there is prior certification from the Barangay Agrarian Reform Committee (or BARC) that the dispute has been submitted to it for mediation and conciliation, without any success of settlement. Since the present dispute need not be referred to arbitration (including mediation or conciliation) because of the inclusion of third parties, neither SEARBEMCO nor DOLE will be able to present the requisite BARC certification that is necessary to invoke DARAB’s jurisdiction; hence, there will be no compliance with Section 53 of RA No. 6657. MENDOZA vs. GERMINO, GR 165676

FACTS:

THE petitioner filed a complaint with the (MTC) of Sta. Rosa, Nueva Ecija against respondent Narciso Germino for forcible entry, claiming that they were the registered owners of a fivehectare parcel of land in Soledad, Sta. Rosa, Nueva Ecija (subject property). On his answer, respondent claimed, among others, that his brother, was the plaintiffs' agricultural lessee and he merely helped the latter in the cultivation as a member of the immediate farm household. After several postponements, the plaintiffs filed a motion to remand the case to the Department of Agrarian Reform Adjudication Board (DARAB), in view of the tenancy issue raised by respondent Narciso. The MTC issued an order remanding the case to the DARAB for further proceedings. PARAD found that the respondents were mere usurpers of the subject property, and ordered the respondents to vacate the subject property, and pay the plaintiffs 500 cavans of palay as actual damages. On appeal to DARAB, respondent argued that the case should have been dismissed because the MTC's referral to the DARAB was void with the enactment of Republic Act (R.A.) No. 6657. DARAB affirmed the PARAD decision. CA, however, set aside the DARAB decision and remanded the case to the MTC for further proceedings.

ISSUE:

Whether the MTC or the DARAB has jurisdiction over the case.

HELD:

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The CA committed no reversible error in setting aside the DARAB decision. While we lament the lapse of time this forcible entry case has been pending resolution, we are not in a position to resolve the dispute between the parties since the evidence required in courts is different from that of administrative agencies.

It is a basic rule that jurisdiction over the subject matter is determined by the allegations in the complaint. It is determined exclusively by the Constitution and the law. It cannot be conferred by the voluntary act or agreement of the parties, or acquired through or waived, enlarged or diminished by their act or omission, nor conferred by the acquiescence of the court. Well to emphasize, it is neither for the court nor the parties to violate or disregard the rule, this matter being legislative in character. Under Batas Pambansa Blg. 129, as amended by R.A. No. 7691, the MTC shall have exclusive original jurisdiction over cases of forcible entry and unlawful detainer. Furthermore, allegation of tenancy does not divest the MTC of jurisdiction.

Under Section 50 of R.A. No. 6657, as well as Section 34 of Executive Order No. 129-A, the DARAB has primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program, and other agrarian laws and their implementing rules and regulations.

An agrarian dispute refers to any controversy relating to, among others, tenancy over lands devoted to agriculture. For a case to involve an agrarian dispute, the following essential requisites of an agricultural tenancy relationship must be present: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of harvest or payment of rental.

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E. Constitutionality of the CARL Association of Small Landowners vs Sec. of Dar

“Equal Protection” These are 3 cases consolidated questioning the constitutionality of the Agrarian Reform Act. Article XIII on Social Justice and Human Rights includes a call for the adoption by the State of an agrarian reform program. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. RA 3844, Agricultural Land Reform Code, had already been enacted by Congress on August 8, 1963. This was substantially superseded almost a decade later by PD 27, which was promulgated on Oct 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. On July 17, 1987, Cory issued EO 228, declaring full land ownership in favor of the beneficiaries of PD 27 and providing for the valuation of still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987 by PP 131, instituting a comprehensive agrarian reform program (CARP), and EO 229, providing the mechanics for its implementation. Afterwhich is the enactment of RA 6657, Comprehensive Agrarian Reform Law of 1988, which Cory signed on June 10. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with its provisions. 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 maintain that in declaring the beneficiaries under PD 27 to be the owners of the lands occupied by them, EO 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 Sol-Gen asserted that 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. ISSUE: Whether or not there was a violation of the equal protection clause. HELD: The SC ruled affirming the Sol-Gen. 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 Sec 6 of RA 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

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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. 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. 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. 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.

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Luz Farms v. DAR Secretary GR No. 86889 4 December 1990 Paras, J.

In 1988, RA 6657 was approved by the President of the Philippines. It includes the raising of livestock, poultry, and swine in its coverage.

W/N the CARL should include the raising of livestock, poultry and swine in its coverage.

In 1989, the Secretary of Agrarian Reform promulgated the IRR of Secs. 11, 13, and 39 of the said law. Luz Farms, a corporation engaged in the livestock and poultry business, allegedly stands to be adversely affected by the enforcement of certain sections of RA 6657, of the Guidelines and Procedures Implementing Production and Profit Sharing under RA 6657, and of the IRR of Section 11. It prays that the aforesaid statutes be declared unconstitutional.

W/N the requirement in Sections 13 and 32 of RA 6657 directing “corporate farms” to execute and implement “production-sharing plans” is unreasonable for being confiscatory and violative of due process, with respect to livestock and poultry raisers. Separate Opinion: Sarmiento, J. W/N the assailed provisions violate the equal protection clause of the Constitution.

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NO. It was never the intention of the framers of the Constitution to include the livestock and poultry industry in the coverage of the agrarian reform program of the government. The intention of the Committee was to limit the application of the word “agriculture”. Thus, Section II of RA 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.

Raising of livestock, poultry, and swine are excluded from the coverage of the CARL.

YES. As there is no reason to include livestock and poultry lands in the coverage of agrarian reform, there is no need to call upon them to distribute from 3% of their gross sales and 10% of their net profits to their workers as additional compensation.

NO. 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: 1. There are no tenants nor landlords in livestock and poultry businesses; 2. Livestock and poultry do not sprout from land; 3. Land is not a primary resource; 4. Livestock and poultry production are industrial activities; 5. Livestock and poultry farmworkers are covered by

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minimum wage law rather than by tenancy law.

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

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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 landsharing. 1. 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 2. 3. 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. Laws involved 1. 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. 2. R.A. No. 3844, otherwise known as the Agricultural Land Reform Code 3. E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 4. Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program 5. and E.O. No. 229, providing the mechanics for its implementation. 6. R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988 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. 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.

1ST CASE G.R. No. 79777 -9 hectare and 5 hectare 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.

Separation of powers They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228.

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No retention limits 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.

Does not conform with valid requisites of Special appropriation Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a valid appropriation. ( A special appropriations bill shall specify the purpose for which it is intended, and shall be

supported by funds actually available as certified by the National Treasurer, or to be raised by a corresponding revenue proposal therein.) 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.

DUE PROCESS 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 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.

Equal protection 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.

Create more problems 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 7 8 cases of Chavez v. Zobel, Gonzales v. Estrella, and Association of Rice and Corn Producers of the 9 Philippines, Inc. v. The National Land Reform Council. 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.

Class suit 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.

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Determination of just compensation FINAL They maintain that the determination of just compensation by the administrative authorities is a final ascertainment. 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. 83hectare 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 National Federation of Sugarcane Planters (NASP) 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 plantermembers. seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.

Special Appropriation 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

Separation of powers 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. 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.

Just Compensation 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.

Equal Protection

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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.

Answer by solicitor general the Solicitor General first invokes the presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229. 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. 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.

G.R. No. 79744 – Small land owner 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. 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.

Separation of Powers 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.

Due Process 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.

Just Compensation 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.

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is an unconstitutional taking of a vested property right.

Reply 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.

G.R. No. 78742 Right of retention less than seven hectares 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 tenantfarmers 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.

Reply 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 even assuming that the petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already been issued 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.

Answer of petitioner

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No publication 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

Supreme Court discussion Power of the court 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. 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 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.

Issues: Proper party 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

PD no 27 sustained and E.O 228 and E.O 229 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 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. 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.

Valid Appropriation on the ground that it does not conform to the requirements of a valid appropriation as specified in the Constitution

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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 19 purpose of which is to authorize the release of public funds from the treasury. The creation of the fund is only incidental to the main objective of the proclamation, which is agrarian reform.

Retention Limits 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 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.

Mandamus 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.

Second Discussion 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 24 Baguio v. NAWASA, 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. 25

In the case of Pennsylvania Coal Co. v. Mahon, Justice HolmesThe 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

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Police Power 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. 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. 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.

Just compensation 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.

Equal protection 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. There is a substantial distinction between these two classes of owners

Eminent Domain/Due Process/Judicial Prerogative 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. *unwilling to sell 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." Why public and private agricultural lands? Well that is a political question The term "political question" connotes what it means in ordinary parlance, namely, a question of policy.

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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. 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. Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. 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. 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 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. 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. 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. 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. 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.

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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. 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: 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. just compensation for property expropriated is payable only in money and not otherwise.\ "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. 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.

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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. 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. We may therefore assume that their intention was to allow such manner of payment as is now provided for by the CARP Law 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 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. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail. 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 51 Improvement Act, is filed. ... 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. 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

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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 fullfledged 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. 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. 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.

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Luz farms vs Sec. of DAR Facts: 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 this petition praying that the laws, guidelines and rules be declared unconstitutional. 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.

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(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. 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 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 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)

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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 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

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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

"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). xxx

xxx

xxx

The questions were answered and explained in the statement of then Commissioner Tadeo, quoted as follows:

xxx

xxx

xxx

"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 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 agroindustrial 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.

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here 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). 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 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. 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.

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SEC. 31. Corporate Landowners. - Corporate landowners may voluntarily transfer ownership over their agricultural landholdings to the Republic of the Philippines pursuant to Section 20 hereof or to qualified beneficiaries, under such terms and conditions consistent with this Act, as they may agree upon, subject to confirmation by the DAR. Upon certification by the DAR, corporations owning agricultural lands may give their qualified beneficiaries the right to purchase such proportion of the capital stock of the corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to the company's total assets, under such terms and conditions as may be agreed upon by them. In no case shall the compensation received by the workers at the time the shares of stocks are distributed be reduced. The same principle shall be applied to associations, with respect to their equity or participation. Corporations or associations which voluntarily divest a proportion of their capital stock, equity or participation in favor of their workers or other qualified beneficiaries under this section shall be deemed to have complied with the provisions of this Act: Provided, That the following condition are complied with: (a) In order to safeguard the right of beneficiaries who own shares of stocks to dividends and other financial benefits, the books of the corporation or association shall be subject to periodic audit by certified public accountants chosen by the beneficiaries; (b) Irrespective of the value of their equity in the corporation or association, the beneficiaries shall be assured of at least one (1) representative in the board of directors, or in a management or executive committee, if one exists, of the corporation or association; (c) Any shares acquired by such workers and beneficiaries shall have the same rights and features as all other shares; and (d) Any transfer of shares of stocks by the original beneficiaries shall be void ab initio unless said transaction is in favor of a qualified and registered beneficiary within the same corporation. If within two (2) years from the approval of this Act, the land or stock transfer envisioned above is not made or realized or the plan for such stock distribution approved by the PARC within the same period, the agricultural land of the corporate owners or corporation shall be subject to the compulsory coverage of this Act.

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Hacienda Luisita vs PARC Facts: THE FACTS In 1958, the Spanish owners of Compañia General de Tabacos de Filipinas (Tabacalera) sold Hacienda Luisita and the Central Azucarera de Tarlac, the sugar mill of the hacienda, to the Tarlac Development Corporation (Tadeco), then owned and controlled by the Jose Cojuangco Sr. Group. The Central Bank of the Philippines assisted Tadeco in obtaining a dollar loan from a US bank. Also, the GSIS extended a PhP5.911 million loan in favor of Tadeco to pay the peso price component of the sale, with the condition that “the lots comprising the Hacienda Luisita be subdivided by the applicant-corporation and sold at cost to the tenants, should there be any, and whenever conditions should exist warranting such action under the provisions of the Land Tenure Act.” Tadeco however did not comply with this condition. On May 7, 1980, the martial law administration filed a suit before the Manila RTC against Tadeco, et al., for them to surrender Hacienda Luisita to the then Ministry of Agrarian Reform (MAR) so that the land can be distributed to farmers at cost. Responding, Tadeco alleged that Hacienda Luisita does not have tenants, besides which sugar lands – of which the hacienda consisted – are not covered by existing agrarian reform legislations. The Manila RTC rendered judgment ordering Tadeco to surrender Hacienda Luisita to the MAR. Therefrom, Tadeco appealed to the CA. On March 17, 1988, during the administration of President Corazon Cojuangco Aquino, the Office of the Solicitor General moved to withdraw the government’s case against Tadeco, et al. The CA dismissed the case, subject to the PARC’s approval of Tadeco’s proposed stock distribution plan (SDP) in favor of its farmworkers. [Under EO 229 and later RA 6657, Tadeco had the option of availing stock distribution as an alternative modality to actual land transfer to the farmworkers.] On August 23, 1988, Tadeco organized a spin-off corporation, herein petitioner HLI, as vehicle to facilitate stock acquisition by the farmworkers. For this purpose, Tadeco conveyed to HLI the agricultural land portion (4,915.75 hectares) and other farm-related properties of Hacienda Luisita in exchange for HLI shares of stock. On May 9, 1989, some 93% of the then farmworker-beneficiaries (FWBs) complement of Hacienda Luisita signified in a referendum their acceptance of the proposed HLI’s Stock Distribution Option Plan (SODP). On May 11, 1989, the SDOA was formally entered into by Tadeco, HLI, and the 5,848 qualified FWBs. This attested to by then DAR Secretary Philip Juico. The SDOA embodied the basis and mechanics of HLI’s SDP, which was eventually approved by the PARC after a follow-up referendum conducted by the DAR on October 14, 1989, in which 5,117 FWBs, out of 5,315 who participated, opted to receive shares in HLI. On August 15, 1995, HLI applied for the conversion of 500 hectares of land of the hacienda from agricultural to industrial use, pursuant to Sec. 65 of RA 6657. The DAR

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approved the application on August 14, 1996, subject to payment of three percent (3%) of the gross selling price to the FWBs and to HLI’s continued compliance with its undertakings under the SDP, among other conditions. On December 13, 1996, HLI, in exchange for subscription of 12,000,000 shares of stocks of Centennary Holdings, Inc. (Centennary), ceded 300 hectares of the converted area to the latter. Subsequently, Centennary sold the entire 300 hectares for PhP750 million to Luisita Industrial Park Corporation (LIPCO), which used it in developing an industrial complex. From this area was carved out 2 parcels, for which 2 separate titles were issued in the name of LIPCO. Later, LIPCO transferred these 2 parcels to the Rizal Commercial Banking Corporation (RCBC) in payment of LIPCO’s PhP431,695,732.10 loan obligations to RCBC. LIPCO’s titles were cancelled and new ones were issued to RCBC. Apart from the 500 hectares, another 80.51 hectares were later detached from Hacienda Luisita and acquired by the government as part of the Subic-Clark-Tarlac Expressway (SCTEX) complex. Thus, 4,335.75 hectares remained of the original 4,915 hectares Tadeco ceded to HLI. Such, was the state of things when two separate petitions reached the DAR in the latter part of 2003. The first was filed by the Supervisory Group of HLI (Supervisory Group), praying for a renegotiation of the SDOA, or, in the alternative, its revocation. The second petition, praying for the revocation and nullification of the SDOA and the distribution of the lands in the hacienda, was filed by Alyansa ng mga Manggagawang Bukid ng Hacienda Luisita (AMBALA). The DAR then constituted a Special Task Force (STF) to attend to issues relating to the SDP of HLI. After investigation and evaluation, the STF found that HLI has not complied with its obligations under RA 6657 despite the implementation of the SDP. On December 22, 2005, the PARC issued the assailed Resolution No. 2005-32-01, recalling/revoking the SDO plan of Tadeco/HLI. It further resolved that the subject lands be forthwith placed under the compulsory coverage or mandated land acquisition scheme of the CARP. From the foregoing resolution, HLI sought reconsideration. Its motion notwithstanding, HLI also filed a petition before the Supreme Court in light of what it considers as the DAR’s hasty placing of Hacienda Luisita under CARP even before PARC could rule or even read the motion for reconsideration. PARC would eventually deny HLI’s motion for reconsideration via Resolution No. 2006-34-01 dated May 3, 2006.

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Issues: Who can Approve and revoke stock distribution plans under the CARL? What was the basis? (1) THE PARC has jurisdiction to revoke HLI’s SDP under the doctrine of necessary implication. Under Sec. 31 of RA 6657, as implemented by DAO 10, the authority to approve the plan for stock distribution of the corporate landowner belongs to PARC. Contrary to petitioner HLI’s posture, PARC also has the power to revoke the SDP which it previously approved. It may be, as urged, that RA 6657 or other executive issuances on agrarian reform do not explicitly vest the PARC with the power to revoke/recall an approved SDP. Such power or authority, however, is deemed possessed by PARC under the principle of necessary implication, a basic postulate that what is implied in a statute is as much a part of it as that which is expressed. Following the doctrine of necessary implication, it may be stated that the conferment of express power to approve a plan for stock distribution of the agricultural land of corporate owners necessarily includes the power to revoke or recall the approval of the plan. To deny PARC such revocatory power would reduce it into a toothless agency of CARP, because the very same agency tasked to ensure compliance by the corporate landowner with the approved SDP would be without authority to impose sanctions for non-compliance with it.

Is SEC. 31 Unconstitutional? [The Court actually refused to pass upon the constitutional question because it was not raised at the earliest opportunity and because the resolution thereof is not the lis mota of the case. Moreover, the issue has been rendered moot and academic since SDO is no longer one of the modes of acquisition under RA 9700.] When the Court is called upon to exercise its power of judicial review over, and pass upon the constitutionality of, acts of the executive or legislative departments, it does so only when the following essential requirements are first met, to wit: (1) there is an actual case or controversy; (2) that the constitutional question is raised at the earliest possible opportunity by a proper party or one with locus standi; and (3) the issue of constitutionality must be the very lis mota of the case. Not all the foregoing requirements are satisfied in the case at bar. While there is indeed an actual case or controversy, intervenor FARM, composed of a small minority of 27 farmers, has yet to explain its failure to challenge the constitutionality of Sec. 31 of RA 6657 as early as November 21, 1989 when PARC approved the SDP of Hacienda Luisita or at least within a reasonable time thereafter, and why its members received benefits from the SDP without so much of a protest. It was only on December 4, 2003 or 14 years after approval of the SDP that said plan and approving resolution were sought to be revoked, but not, to stress, by FARM or any of

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its members, but by petitioner AMBALA. Furthermore, the AMBALA petition did NOT question the constitutionality of Sec. 31 of RA 6657, but concentrated on the purported flaws and gaps in the subsequent implementation of the SDP. Even the public respondents, as represented by the Solicitor General, did not question the constitutionality of the provision. On the other hand, FARM, whose 27 members formerly belonged to AMBALA, raised the constitutionality of Sec. 31 only on May 3, 2007 when it filed its Supplemental Comment with the Court. Thus, it took FARM some eighteen (18) years from November 21, 1989 before it challenged the constitutionality of Sec. 31 of RA 6657 which is quite too late in the day. The FARM members slept on their rights and even accepted benefits from the SDP with nary a complaint on the alleged unconstitutionality of Sec. 31 upon which the benefits were derived. The Court cannot now be goaded into resolving a constitutional issue that FARM failed to assail after the lapse of a long period of time and the occurrence of numerous events and activities which resulted from the application of an alleged unconstitutional legal provision. The last but the most important requisite that the constitutional issue must be the very lis mota of the case does not likewise obtain. The lis mota aspect is not present, the constitutional issue tendered not being critical to the resolution of the case. The unyielding rule has been to avoid, whenever plausible, an issue assailing the constitutionality of a statute or governmental act. If some other grounds exist by which judgment can be made without touching the constitutionality of a law, such recourse is favored. The lis mota in this case, proceeding from the basic positions originally taken by AMBALA (to which the FARM members previously belonged) and the Supervisory Group, is the alleged non-compliance by HLI with the conditions of the SDP to support a plea for its revocation. And before the Court, the lis mota is whether or not PARC acted in grave abuse of discretion when it ordered the recall of the SDP for such noncompliance and the fact that the SDP, as couched and implemented, offends certain constitutional and statutory provisions. To be sure, any of these key issues may be resolved without plunging into the constitutionality of Sec. 31 of RA 6657. Moreover, looking deeply into the underlying petitions of AMBALA, et al., it is not the said section per se that is invalid, but rather it is the alleged application of the said provision in the SDP that is flawed. It may be well to note at this juncture that Sec. 5 of RA 9700, amending Sec. 7 of RA 6657, has all but superseded Sec. 31 of RA 6657 vis-à-vis the stock distribution component of said Sec. 31. In its pertinent part, Sec. 5 of RA 9700 provides: ―[T]hat after June 30, 2009, the modes of acquisition shall be limited to voluntary offer to sell and compulsory acquisition.‖ Thus, for all intents and purposes, the stock distribution scheme under Sec. 31 of RA 6657 is no longer an available option under existing law. The question of whether or not it is unconstitutional should be a moot issue.

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Did the Supreme Court Uphold the stock revocation of the SDP? (3) YES, the revocation of the HLI’s SDP valid. [NO, the PARC did NOT gravely abuse its discretion in revoking the subject SDP and placing the hacienda under CARP’s compulsory acquisition and distribution scheme.] The revocation of the approval of the SDP is valid: (1) the mechanics and timelines of HLI’s stock distribution violate DAO 10 because the minimum individual allocation of each original FWB of 18,804.32 shares was diluted as a result of the use of ―man days‖ and the hiring of additional farmworkers; (2) the 30-year timeframe for HLIto-FWBs stock transfer is contrary to what Sec. 11 of DAO 10 prescribes. In our review and analysis of par. 3 of the SDOA on the mechanics and timelines of stock distribution, We find that it violates two (2) provisions of DAO 10. Par. 3 of the SDOA states: 3. At the end of each fiscal year, for a period of 30 years, the SECOND PARTY [HLI] shall arrange with the FIRST PARTY [TDC] the acquisition and distribution to the THIRD PARTY [FWBs] on the basis of number of days worked and at no cost to them of one-thirtieth (1/30) of 118,391,976.85 shares of the capital stock of the SECOND PARTY that are presently owned and held by the FIRST PARTY, until such time as the entire block of 118,391,976.85 shares shall have been completely acquired and distributed to the THIRD PARTY.

[I]t is clear as day that the original 6,296 FWBs, who were qualified beneficiaries at the time of the approval of the SDP, suffered from watering down of shares. As determined earlier, each original FWB is entitled to 18,804.32 HLI shares. The original FWBs got less than the guaranteed 18,804.32 HLI shares per beneficiary, because the acquisition and distribution of the HLI shares were based on ―man days‖ or ―number of days worked‖ by the FWB in a year’s time. As explained by HLI, a beneficiary needs to work for at least 37 days in a fiscal year before he or she becomes entitled to HLI shares. If it falls below 37 days, the FWB, unfortunately, does not get any share at year end. The number of HLI shares distributed varies depending on the number of days the FWBs were allowed to work in one year. Worse, HLI hired farmworkers in addition to the original 6,296 FWBs, such that, as indicated in the Compliance dated August 2, 2010 submitted by HLI to the Court, the total number of farmworkers of HLI as of said date stood at 10,502. All these farmworkers, which include the original 6,296 FWBs, were given shares out of the 118,931,976.85 HLI shares representing the 33.296% of the total outstanding capital stock of HLI. Clearly, the minimum individual allocation of each original FWB of 18,804.32 shares was diluted as a result of the use of ―man days‖ and the hiring of additional farmworkers. Going into another but related matter, par. 3 of the SDOA expressly providing for a 30-year timeframe for HLI-to-FWBs stock transfer is an arrangement contrary to what Sec. 11 of DAO 10 prescribes. Said Sec. 11 provides for the implementation of the approved stock distribution plan within three (3) months from receipt by the corporate

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landowner of the approval of the plan by PARC. In fact, based on the said provision, the transfer of the shares of stock in the names of the qualified FWBs should be recorded in the stock and transfer books and must be submitted to the SEC within sixty (60) days from implementation. To the Court, there is a purpose, which is at once discernible as it is practical, for the three-month threshold. Remove this timeline and the corporate landowner can veritably evade compliance with agrarian reform by simply deferring to absurd limits the implementation of the stock distribution scheme. Evidently, the land transfer beneficiaries are given thirty (30) years within which to pay the cost of the land thus awarded them to make it less cumbersome for them to pay the government. To be sure, the reason underpinning the 30-year accommodation does not apply to corporate landowners in distributing shares of stock to the qualified beneficiaries, as the shares may be issued in a much shorter period of time. Taking into account the above discussion, the revocation of the SDP by PARC should be upheld [because of violations of] DAO 10. It bears stressing that under Sec. 49 of RA 6657, the PARC and the DAR have the power to issue rules and regulations, substantive or procedural. Being a product of such rule-making power, DAO 10 has the force and effect of law and must be duly complied with. The PARC is, therefore, correct in revoking the SDP. Consequently, the PARC Resolution No. 89-12-2 dated November 21, l989 approving the HLI’s SDP is nullified and voided.

Does the Non-impairment clause bar the court from reviewing the validity of a partially implemented SDP? A law authorizing interference, when appropriate, in the contractual relations between or among parties is deemed read into the contract and its implementation cannot successfully be resisted by force of the non-impairment guarantee. There is, in that instance, no impingement of the impairment clause, the non-impairment protection being applicable only to laws that derogate prior acts or contracts by enlarging, abridging or in any manner changing the intention of the parties. Impairment, in fine, obtains if a subsequent law changes the terms of a contract between the parties, imposes new conditions, dispenses with those agreed upon or withdraws existing remedies for the enforcement of the rights of the parties. Necessarily, the constitutional proscription would not apply to laws already in

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effect at the time of contract execution, as in the case of RA 6657, in relation to DAO 10, vis-à-vis HLI’s SDOA. As held in Serrano v. Gallant Maritime Services, Inc.: The prohibition [against impairment of the obligation of contracts] is aligned with the general principle that laws newly enacted have only a prospective operation, and cannot affect acts or contracts already perfected; however, as to laws already in existence, their provisions are read into contracts and deemed a part thereof. Thus, the non-impairment clause under Section 10, Article II [of the Constitution] is limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by enlarging, abridging or in any manner changing the intention of the parties thereto. (Emphasis supplied.)

Needless to stress, the assailed Resolution No. 2005-32-01 is not the kind of issuance within the ambit of Sec. 10, Art. III of the Constitution providing that “[n]o law impairing the obligation of contracts shall be passed.”

Administartive Order no.2 series of 2009 5. The child of an LO shall be given preference in the distribution of his/her parent's land pursuant to existing rules and regulations on award to children of LOs provided he/she meets all of the following criteria: 5.1 Filipino citizen; 5.2 At least fifteen (15) years of age; and 5.3 Actual tiller or directly managing the farm as of the time of the conduct of field investigation of the landholding under CARP. However, only untenanted portions of the landholding may be subject to award to qualified children of the LO and actual tenant-tillers in the landholding shall not be ejected or removed therefrom. An LO's child cannot claim that he/she is directly managing the farm or a specific area of tillage, if the same has tenants or lessees, considering that the tenants on the land have the right to directly manage the land or area of tillage with the obligation to pay the LO lease rental therefor.

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