ASSOCIATION OF SMALL LANDOWNERS V.

SECRETARY OF DAR

July 14, 1989

Brief background:
Article XIII of the Constitution on Social Justice and Human Rights includes a call for the adoption by
the State of an agrarian reform program. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the
lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof.
RA 3844 was enacted in 1963. Agricultural Land Reform Code
P.D. No. 27 was promulgated in 1972 to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum retention limits for landowners. In 1987, President
Corazon Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of PD 27 and
providing for the valuation of still unvalued lands covered by the decree as well as the manner of their
payment.
In 1987, P.P. No. 131, instituting a comprehensive agrarian reform program (CARP) was enacted; later,
E.O. No. 229, providing the mechanics for its (PP131s) implementation, was also enacted. After which is the
enactment of R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This law, while considerably
changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as they are not
inconsistent with its provisions.
FACTS:
The Association of Small Landowners in the Philippines, Inc. sought exception from the land
distribution scheme provided for in R.A. 6657. The Association is comprised of landowners of ricelands and
cornlands whose landholdings do not exceed 7 hectares. They invoke that since their landholdings are less than
7 hectares, they should not be forced to distribute their land to their tenants under R.A. 6657 for they
themselves have shown willingness to till their own land. In short, they want to be exempted from agrarian
reform program because they claim to belong to a different class.
ISSUE:
Whether or not the laws being challenged is a valid exercise of Police power or Power of Eminent Domain.
RULING:
The promulgation of PD 27 by President Marcos was valid in Exercise of Police power and Eminent Domain.
RA 6657 is likewise valid. The carrying out of the regulation under CARP becomes necessary to deprive 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 and the Physical possession of said excess and all beneficial rights accruing to the owner in favour of the
farmer.
A stature may be sustained under the police power only if there is concurrence of the lawful subject and
method.
Subject and purpose of the Agrarian reform is valid. However, what is to be determined is the method
employed to achieve it.
Police Power through the Power of Eminent Domain, though there are traditional distinction between the
police power and the power of eminent domain, property condemned under police power is noxious or
intended for noxious purpose, the compensation for the taking of such property is not subject to compensation,
unlike the taking of the property in Eminent Domain or the power of expropriation which requires the
payment of just compensation to the owner of the property expropriated.

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, et al., petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

FACTS
The association of the Small Landowners of the Philippines invokes the right of retention granted by PD 27 to
owners of rice and corn lands not exceeding 7 hectares as long as they are cultivating the sawith intention to
cultivate the same. Their respected lands do not exceed the statutory limits but are occupied by tenants who are
actually cultivating such lands.
Because PD No. 316 provides that no tenant-farmer in agricultural land primarily devoted to rice and corn shall
be ejected or removed from his farm holding until such time as the respective rights of the tenant-farmers and
the land owners shall have been determined, they petitioned the court for a writ of mandamus to compel the
DAR Secretary to issue the IRR, as they could not eject their tenants and so are unable to enjoy their right of
retention.
ISSUE
Whether or not the assailed statutes are valid exercises of police power.
Whether or not the content and manner of just compensation provided for the CARP is violative of the
Constitution.
Whether or not the CARP and EO 228 contravene a well accepted principle of eminent domain by divesting the
land owner of his property even before actual payment to him in full of just compensation
HELD
Yes. The subject and purpose of agrarian reform have been laid down by the Constitution itself, which satisfies
the first requirement of the lawful subject. However, objection is raised to the manner fixing the just
compensation, which it is claimed is judicial prerogatives. However, there is no arbitrariness in the provision as
the determination of just compensation by DAR is only preliminary unless accepted by all parties concerned.
Otherwise, the courts will still have the right to review with finality the said determination.
No. Although the traditional medium for payment of just compensation is money and no other, what is being
dealt with here is not the traditional exercise of the power and eminent domain. This is a revolutionary kind of
expropriation, which involves not mere millions of pesos. The initially intended amount of P50B may not be
enough, and is in fact not even fully available at the time. The invalidation of the said section resulted in the
nullification of the entire program.
No. EO 228 categorically stated that all qualified farmer-beneficiaries were deemed full owners of the land they
acquired under PP 27, after proof of full payment of just compensation. The CARP Law, for its part, conditions
the transfer of possession and ownership of the land to the government on the receipt by the landowner of the
corresponding payment or the deposit of DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner.

ISSUE:

1. Whether or not there was a violation of the equal protection clause.

2. Whether or not there is a violation of due process.
3. Whether or not just compensation, under the agrarian reform program, must be in terms of cash.

HELD:
1. No. The Association had not shown any proof that they belong to a different class exempt from the agrarian
reform program. Under the law, classification has been defined as the grouping of persons or things similar to
each other in certain particulars and different from each other in these same particulars. To be valid, it must
conform to the following requirements:
(1) it must be based on substantial distinctions;
(2) it must be germane to the purposes of the law;
(3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class.
Equal protection simply means that all persons or things similarly situated must be treated alike both as to the
rights conferred and the liabilities imposed. The Association have not shown that they belong to a different
class and entitled to a different treatment. The argument that not only landowners but also owners of other
properties must be made to share the burden of implementing land reform must be rejected. There is a
substantial distinction between these two classes of owners that is clearly visible except to those who will not
see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in
providing for a valid classification. Its decision is accorded recognition and respect by the courts of justice
except only where its discretion is abused to the detriment of the Bill of Rights. In the contrary, it appears that
Congress is right in classifying small landowners as part of the agrarian reform program.
2. No. It is true that the determination of just compensation is a power lodged in the courts. However, there is
no law which prohibits administrative bodies like the DAR from determining just compensation. In fact, just
compensation can be that amount agreed upon by the landowner and the government even without judicial
intervention so long as both parties agree. The DAR can determine just compensation through appraisers and if
the landowner agrees, then judicial intervention is not needed. What is contemplated by law however is that,
the just compensation determined by an administrative body is merely preliminary. If the landowner does not
agree with the finding of just compensation by an administrative body, then it can go to court and the
determination of the latter shall be the final determination. This is even so provided by RA 6657:
Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in traditional exercise of eminent
domain. The agrarian reform program is a revolutionary exercise of eminent domain. The program will require
billions of pesos in funds if all compensation have to be made in cash if everything is in cash, then the
government will not have sufficient money hence, bonds, and other securities, i.e., shares of stocks, may be
used for just compensation.