Cases - agrarian reform law

8/17/2019 Cases - agrarian reform law

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G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JANITO D. GOME!,

GERARDO ". ALARCIO, FELIPE A. GICO, JR., "ERNARDO M. ALMONTE, CANTO RAMIR ".

CA"RITO, ISIDRO T. GICO, FELISA I. LLAMIDO, FASTO J. SAL#A, RE$NALDO G. ESTRADA,

FELISA C. "ATISTA, ESMENIA J. CA"E, TEODORO ". MADRIAGA, AREA J. PRESTOSA,

EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSELO M. MORALES, "ENJAMIN R.

SEGISMNDO, CIRILA A. JOSE % NAPOLEON S. FERRER, petitioners,

vs.

HONORA"LE SECRETAR$ OF AGRARIAN REFORM, respondent.

G.R. No. 79&1' July 14, 1989

ARSENIO AL. ACNA, NEWTON JISON, #ICTORINO FERRARIS, DENNIS JERE!A, HERMINIGILDO

GSTILO, PALINO D. TOLENTINO ()* PLANTERS+ COMMITTEE, INC., #-o/(0 Mll D0/-,

#-o/(0, N/o0 O--*)(l, petitioners,

vs.

JO3ER ARRO$O, PHILIP E. JICO ()* PRESIDENTIAL AGRARIAN REFORM CONCIL,respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PA"ICO, petitioner,

vs.

HON. PHILIP E. JICO, SECRETAR$ OF THE DEPARTMENT OF AGRARIAN REFORM, HON.

JO3ER ARRO$O, EECTI#E SECRETAR$ OF THE OFFICE OF THE PRESIDENT, ()* M00/0.

SAL#ADOR TALENTO, JAIME A"OGADO, CONRADO A#ANCENA ()* RO"ERTO TAA$,

respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAA$ ()* AGSTIN HERMANO, JR., petitioners,

vs.

HON. PHILIP ELLA JICO, (0 S-/(/y o5 A/(/() R5o/6, ()* LAND "AN3 OF THE

PHILIPPINES, respondents.

CR!, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his

way to Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung his

adversary to the ground thinking him dead, but Antaeus rose even stronger to resume their struggle. This

happened several times to Hercules' increasing amaement. !inally, as they continued grappling, it

dawned on Hercules that Antaeus was the son of "aea and could never die as long as any part of his

body was touching his Mother #arth. Thus forewarned, Hercules then held Antaeus up in the air, beyond

the reach of the sustaining soil, and crushed him to death.

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Mother #arth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful

Antaeus weakened and died.

The cases before us are not as fanciful as the foregoing tale. $ut they also tell of the elemental forces of

life and death, of men and women who, like Antaeus need the sustaining strength of the precious earth to

stay alive.

%&and for the &andless% is a slogan that underscores the acute imbalance in the distribution of this

precious resource among our people. $ut it is more than a slogan. Through the brooding centuries, it has

become a battlecry dramatiing the increasingly urgent demand of the dispossessed among us for a plot

of earth as their place in the sun.

(ecogniing this need, the )onstitution in *+- mandated the policy of social ustice to %insure the well

being and economic security of all the people,% 1 especially the less privileged. In *+/, the new

)onstitution affirmed this goal adding specifically that %the 0tate shall regulate the ac1uisition, ownership,

use, enoyment and disposition of private property and e1uitably diffuse property ownership and profits.% 2

0ignificantly, there was also the specific inunction to %formulate and implement an agrarian reform

program aimed at emancipating the tenant from the bondage of the soil.%&

The )onstitution of *+2/ was not to be outdone. $esides echoing these sentiments, it also adopted one

whole and separate Article 3III on 0ocial 4ustice and Human (ights, containing grandiose but

undoubtedly sincere provisions for the uplift of the common people. These include a call in the following

words for the adoption by the 0tate of an agrarian reform program5

0#). 6. The 0tate 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 ust share of the fruits

thereof. To this end, the 0tate shall encourage and undertake the ust distribution of all

agricultural lands, subect to such priorities and reasonable retention limits as the

)ongress may prescribe, taking into account ecological, developmental, or e1uity

considerations and subect to the payment of ust compensation. In determining retention

limits, the 0tate shall respect the right of small landowners. The 0tate shall further

provide incentives for voluntary landsharing.

#arlier, in fact, (.A. 7o. 266, otherwise known as the Agricultural &and (eform )ode, had already been

enacted by the )ongress of the 8hilippines on August 2, *+9, in line with the abovestated principles.

This was substantially superseded almost a decade later by 8.:. 7o. ;/, which was promulgated on


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0ubse1uently, with its formal organiation, the revived )ongress of the 8hilippines took over legislative

power from the 8resident and started its own deliberations, including e=tensive public hearings, on the

improvement of the interests of farmers. The result, after almost a year of spirited debate, was the

enactment of (.A. 7o. 99-/, otherwise known as the )omprehensive Agrarian (eform &aw of *+22,

which 8resident A1uino signed on 4une *@, *+22. This law, while considerably changing the earlier

mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent

with its provisions. 4

The abovecaptioned cases have been consolidated because they involve common legal 1uestions,

including serious challenges to the constitutionality of the several measures mentioned above. They will

be the subect of one common discussion and resolution, The different antecedents of each case will

re1uire separate treatment, however, and will first be e=plained hereunder.

".(. 7o. /+///

01uarely raised in this petition is the constitutionality of 8.:. 7o. ;/, #.


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In his )omment, the 0olicitor "eneral stresses that 8.:. 7o. ;/ has already been upheld in the earlier

cases of Chavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association o !ice and Corn Producers o the

Phili""ines, #nc. v. $he National %and !eor& Council. 9 The determination of ust compensation by the

e=ecutive authorities conformably to the formula prescribed under the 1uestioned order is at best initial or

preliminary only. It does not foreclose udicial 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

:epartment of Agrarian (eform. The petitioners are also not proper parties because the lands owned by

them do not e=ceed the ma=imum retention limit of / hectares.

(eplying, the petitioners insist they are proper parties because 8.:. 7o. ;/ 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 ;6 hectares. They maintain that the determination of ust compensation by the

administrative authorities is a final ascertainment. As for the cases invoked by the public respondent, the

constitutionality of 8.:. 7o. ;/ was merely assumed in Chavez , while what was decided in Gonzales was

the validity of the imposition of martial law.

In the amended petition dated 7ovember ;;, *-22, it is contended that 8.:. 7o. ;/, #.e=cept 0ections ;@ and ;*? have been impliedly repealed by (.A. 7o. 99-/. 7evertheless, thisstatute 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 4une *, *+22 by icente )ru, owner of a *. 2

hectare land, who complained that the :A( was insisting on the implementation of 8.:. 7o. ;/ and #.


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government may deem appropriate. The amounts collected and accruing to this special fund shall be

considered automatically appropriated for the purpose authoried in this 8roclamation the amount

appropriated is in futuro, not in esse. The money needed to cover the cost of the contemplated

e=propriation has yet to be raised and cannot be appropriated at this time.

!urthermore, they contend that taking must be simultaneous with payment of ust compensation as it is

traditionally understood, i.e., with money and in full, but no such payment is contemplated in 0ection - of

the #.7A08? which claims a membership of at least ;@,@@@ individual sugar planters all over the country.


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The petitioner contends that the issuance of #.@. 7os. ;;2 and ;;+ shortly before )ongress convened is

anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power

granted to the 8resident under the Transitory 8rovisions refers only to emergency measures that may be

promulgated in the proper e=ercise of the police power.

The petitioner also invokes his rights not to be deprived of his property without due process of law and to

the retention of his small parcels of riceholding as guaranteed under Article 3III, 0ection 6 of the

)onstitution. He likewise argues that, besides denying him ust compensation for his land, the provisions

of #.


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the above1uoted decree. They therefore ask the )ourt for a writ of mandamus to compel the respondent

to issue the said rules.

In his )omment, the public respondent argues that 8.:. 7o. ;/ has been amended by &Interim "uidelines on (etention by 0mall &andowners, with an accompanying (etention "uide

Table?, Memorandum )ircular 7o. ** dated April ;*, *+/2, >Implementation "uidelines of &)larificatory "uidelines on )overage of 8.:.

7o. ;/ and (etention by 0mall &andowners?, and :A( Administrative 8roviding for a )utoff :ate for &andowners to Apply for (etention andEor to 8rotest the )overage of their

&andholdings under


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constitutional 1uestion must have been opportunely raised by the proper party, and the resolution of the

1uestion is unavoidably necessary to the decision of the case itself. 12

Bith particular regard to the re1uirement 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 inury as a result of the acts or measures complained of. 1& And even

if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the )ourt

to waive the re1uirement and so remove the impediment to its addressing and resolving the serious

constitutional 1uestions raised.

In the first #mergency 8owers )ases, 14 ordinary citiens and ta=payers were allowed to 1uestion the

constitutionality of several e=ecutive orders issued by 8resident Fuirino although they were invoking only

an indirect and general interest shared in common with the public. The )ourt dismissed the obection that

they were not proper parties and ruled that %the transcendental importance to the public of these cases

demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of

procedure.% Be have since then applied this e=ception in many other cases. 1

The other abovementioned re1uisites have also been met in the present petitions.

In must be stressed that despite the inhibitions pressing upon the )ourt when confronted with

constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid when it is

convinced that this must be done. In arriving at this conclusion, its only criterion will be the )onstitution as

"od and its conscience give it the light to probe its meaning and discover its purpose. 8ersonal motives

and political considerations are irrelevancies that cannot influence its decision. $landishment is as

ineffectual as intimidation.

!or all the awesome power of the )ongress and the #=ecutive, the )ourt will not hesitate to %make the

hammer fall, and heavily,% to use 4ustice &aurel's pithy language, where the acts of these departments, or

of any public official, betray the people's will as e=pressed in the )onstitution.

It need only be added, to borrow again the words of 4ustice &aurel, that G

... when the udiciary mediates to allocate constitutional boundaries, it does not assert

any superiority over the other departmentsD it does not in reality nullify or invalidate an act

of the &egislature, but only asserts the solemn and sacred obligation assigned to it by the

)onstitution to determine conflicting claims of authority under the )onstitution and to

establish for the parties in an actual controversy the rights which that instrument secures

and guarantees to them. This is in truth all that is involved in what is termed %udicial

supremacy% which properly is the power of udicial review under the )onstitution. 1

The cases before us categorically raise constitutional 1uestions that this )ourt must categorically resolve. And so we shall.

II

Be proceed first to the e=amination of the preliminary issues before resolving the more serious

challenges to the constitutionality of the several measures involved in these petitions.

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The promulgation of 8.:. 7o. ;/ by 8resident Marcos in the e=ercise of his powers under martial law has

already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue.

As for the power of 8resident A1uino to promulgate 8roc. 7o. ** and #.


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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 subect. In the case of City o

'a(uio v. NA)A*A, 24 for e=ample, where a law re1uired the transfer of all municipal waterworks systems

to the 7ABA0A in e=change for its assets of e1uivalent value, the )ourt held that the power being

e=ercised was eminent domain because the property involved was wholesome and intended for a public

use. 8roperty condemned under the police power is no=ious or intended for a no=ious purpose, such as a

building on the verge of collapse, which should be demolished for the public safety, or obscene materials,

which should be destroyed in the interest of public morals. The confiscation of such property is not

compensable, unlike the taking of property under the power of e=propriation, which re1uires the payment

of ust compensation to the owner.

In the case of Pennsylvania Coal Co. v. Mahon, 2 4ustice Holmes laid down the limits of the police power

in a famous aphorism5 %The general rule at least is that while property may be regulated to a certain

e=tent, if regulation goes too far it will be recognied as a taking.% The regulation that went %too far% was a

law prohibiting mining which might cause the subsidence of structures for human habitation constructed

on the land surface. This was resisted by a coal company which had earlier granted a deed to the land

over its mine but reserved all mining rights thereunder, with the grantee assuming all risks and waiving

any damage claim. The )ourt held the law could not be sustained without compensating the grantor.4ustice $randeis filed a lone dissent in which he argued that there was a valid e=ercise of the police

power. He said5

#very restriction upon the use of property imposed in the e=ercise of the police power

deprives the owner of some right theretofore enoyed, and is, in that sense, an

abridgment by the 0tate of rights in property without making compensation. $ut restriction

imposed to protect the public health, safety or morals from dangers threatened is not a

taking. The restriction here in 1uestion is merely the prohibition of a no=ious use. The

property so restricted remains in the possession of its owner. The state does not

appropriate it or make any use of it. The state merely prevents the owner from making a

use which interferes with paramount rights of the public. Bhenever the use prohibited

ceases to be no=ious G as it may because of further changes in local or social conditions

G the restriction will have to be removed and the owner will again be free to enoy his

property as heretofore.

(ecent trends, however, would indicate not a polariation but a mingling of the police power and the

power of eminent domain, with the latter being used as an implement of the former like the power of

ta=ation. The employment of the ta=ing power to achieve a police purpose has long been accepted. 2 As

for the power of e=propriation, 8rof. 4ohn 4. )ostonis of the niversity of Illinois )ollege of &aw >referring

to the earlier case of #uclid v. Ambler (ealty )o., ;/; 0 9-, which sustained a oning law under the

police power? makes the following significant remarks5

#uclid, moreover, was decided in an era when udges located the 8olice and eminentdomain powers on different planets. "enerally speaking, they viewed eminent domain as

encompassing public ac1uisition of private property for improvements that would be

available for public use,% literally construed. To the police power, on the other hand, they

assigned the less intrusive task of preventing harmful e=ternalities a point reflected in the

#uclid opinion's reliance on an analogy to nuisance law to bolster its support of oning.

0o long as suppression of a privately authored harm bore a plausible relation to some

legitimate %public purpose,% the pertinent measure need have afforded no compensation

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whatever. Bith the progressive growth of government's involvement in land use, the

distance between the two powers has contracted considerably. Today government often

employs eminent domain interchangeably with or as a useful complement to the police

power a trend e=pressly approved in the 0upreme )ourt's *+-6 decision in $erman v.

8arker, which broadened the reach of eminent domain's %public use% test to match that of

the police power's standard of %public purpose.% 27

The $erman case sustained a redevelopment proect and the improvement of blighted areas in the

:istrict of )olumbia as a proper e=ercise of the police power.


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favor of the farmerbeneficiary. This is definitely an e=ercise not of the police power but of the power of

eminent domain.

Bhether as an e=ercise of the police power or of the power of eminent domain, the several measures

before us are challenged as violative of the due process and e1ual protection clauses.

The challenge to 8roc. 7o. ** and #.*? it must be based on substantial distinctionsD >;? it must be germane to the

purposes of the lawD >? it must not be limited to e=isting conditions onlyD and >6? it must apply e1ually to

all the members of the class. &2 The )ourt finds that all these re1uisites have been met by the measures

here challenged as arbitrary and discriminatory.

#1ual 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

reected. There is a substantial distinction between these two classes of owners that is clearly visible

e=cept to those who will not see. There is no need to elaborate on this matter. In any event, the )ongress

is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and

respect by the courts of ustice e=cept only where its discretion is abused to the detriment of the $ill of

(ights.

It is worth remarking at this uncture that a statute may be sustained under the police power only if there is

a concurrence of the lawful subect and the lawful method. 8ut otherwise, the interests of the public

generally as distinguished from those of a particular class re1uire the interference of the 0tate and, no

less important, the means employed are reasonably necessary for the attainment of the purpose soughtto be achieved and not unduly oppressive upon individuals. &4 As the subect and purpose of agrarian

reform have been laid down by the )onstitution itself, we may say that the first re1uirement has been

satisfied. Bhat remains to be e=amined is the validity of the method employed to achieve the

constitutional goal.


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necessary that the means employed to pursue it be in keeping with the )onstitution. Mere e=pediency will

not e=cuse constitutional shortcuts. There is no 1uestion that not even the strongest moral conviction or

the most urgent public need, subect only to a few notable e=ceptions, will e=cuse the bypassing of an

individual's rights. It is no e=aggeration to say that a, person invoking a right guaranteed under Article III

of the )onstitution is a maority of one even as against the rest of the nation who would deny him that

right.

That right covers the person's life, his liberty and his property under 0ection * of Article III of the

)onstitution. Bith regard to his property, the owner enoys the added protection of 0ection +, which

reaffirms the familiar rule that private property shall not be taken for public use without ust compensation.

This brings us now to the power of eminent domain.

I

#minent domain is an inherent power of the 0tate that enables it to forcibly ac1uire

private lands intended for public use upon payment of ust compensation to the owner.

as indeed no

power is absolute?. The limitation is found in the constitutional inunction that %private property shall not be

taken for public use without ust compensation% and in the abundant urisprudence that has evolved from

the interpretation of this principle. $asically, the re1uirements for a proper e=ercise of the power are5 >*?

public use and >;? ust compensation.

&et us dispose first of the argument raised by the petitioners in ".(. 7o. /+*@ that the 0tate should first

distribute public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing

property rights by forcibly ac1uiring private agricultural lands. 8arenthetically, it is not correct to say that

only public agricultural lands may be covered by the )A(8 as the )onstitution calls for %the ust

distribution of all agricultural lands.% In any event, the decision to redistribute private agricultural lands in

the manner prescribed by the )A(8 was made by the legislative and e=ecutive departments in the

e=ercise of their discretion. Be are not ustified in reviewing that discretion in the absence of a clear

showing that it has been abused.

A becoming courtesy admonishes us to respect the decisions of the political departments when they

decide what is known as the political 1uestion. As e=plained by )hief 4ustice )oncepcion in the case of

$a-ada v. Cuenco5 &

The term %political 1uestion% connotes what it means in ordinary parlance, namely, a

1uestion of policy. It refers to %those 1uestions which, under the )onstitution, are to be

decided by the people in their sovereign capacityD or in regard to which full discretionary

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authority has been delegated to the legislative or e=ecutive branch of the government.% It

is concerned with issues dependent upon the wisdom, not legality, of a particular

measure.

It is true that the concept of the political 1uestion has been constricted with the enlargement of udicial

power, which now includes the authority of the courts %to determine whether or not there has been a

grave abuse of discretion amounting to lack or e=cess of urisdiction on the part of any branch or

instrumentality of the "overnment.% &7 #ven so, this should not be construed as a license for us to reverse

the other departments simply because their views may not coincide with ours.

The legislature and the e=ecutive have been seen fit, in their wisdom, to include in the )A(8 the

redistribution of private landholdings >even as the distribution of public agricultural lands is first provided

for, while also continuing apace under the 8ublic &and Act and other cognate laws?. The )ourt sees no

ustification to interpose its authority, which we may assert only if we believe that the political decision is

not unwise, but illegal. Be do not find it to be so.

In .*. v. Chandler/Dunbar )ater Po+er Co&"any , &8 it was held5

)ongress having determined, as it did by the Act of March ,*+@+ that the entire 0t.

Mary's river between the American bank and the international line, as well as all of the

upland north of the present ship canal, throughout its entire length, was %necessary for

the purpose of navigation of said waters, and the waters connected therewith,% that

determination is conclusive in condemnation proceedings instituted by the nited 0tates

under that Act, and there is no room for udicial review of the udgment of )ongress ... .

As earlier observed, the re1uirement for public use has already been settled for us by the )onstitution

itself 7o less than the *+2/ )harter calls for agrarian reform, which is the reason why private agricultural

lands are to be taken from their owners, subect to the prescribed ma=imum retention limits. The purposes

specified in 8.:. 7o. ;/, 8roc. 7o. ** and (.A. 7o. 99-/ are only an elaboration of the constitutional

inunction that the 0tate adopt the necessary measures %to encourage and undertake the ust distribution

of all agricultural lands to enable farmers who are landless to own directly or collectively the lands they

till.% That public use, as pronounced by the fundamental law itself, must be binding on us.

The second re1uirement, i.e., the payment of ust compensation, needs a longer and more thoughtful

e=amination.

4ust compensation is defined as the full and fair e1uivalent of the property taken from its owner by the

e=propriator. &9 It has been repeatedly stressed by this )ourt that the measure is not the taker's gain but

the owner's loss. 4' The word %ust% is used to intensify the meaning of the word %compensation% to convey

the idea that the e1uivalent to be rendered for the property to be taken shall be real, substantial, full,

ample. 41

It bears repeating that the measures challenged in these petitions contemplate more than a mere

regulation of the use of private lands under the police power. Be deal here with an actual taking of private

agricultural lands that has dispossessed the owners of their property and deprived them of all its

beneficial use and enoyment, to entitle them to the ust compensation mandated by the )onstitution.

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As held in !e"ublic o the Phili""ines v. Castellvi , 42 there is compensable taking when the following

conditions concur5 >*? the e=propriator must enter a private propertyD >;? the entry must be for more than a

momentary periodD >? the entry must be under warrant or color of legal authorityD >6? the property must be

devoted to public use or otherwise informally appropriated or inuriously affectedD and >-? the utiliation of

the property for public use must be in such a way as to oust the owner and deprive him of beneficial

enoyment of the property. All these re1uisites are envisioned in the measures before us.

Bhere the 0tate itself is the e=propriator, it is not necessary for it to make a deposit upon its taking

possession of the condemned property, as %the compensation is a public charge, the good faith of the

public is pledged for its payment, and all the resources of ta=ation may be employed in raising the

amount.% 4& 7evertheless, 0ection *9>e? of the )A(8 &aw provides that5

pon receipt by the landowner of the corresponding payment or, in case of reection or

no response from the landowner, upon the deposit with an accessible bank designated by

the :A( of the compensation in cash or in &$8 bonds in accordance with this Act, the

:A( shall take immediate possession of the land and shall re1uest the proper (egister of

:eeds to issue a Transfer )ertificate of Title >T)T? in the name of the (epublic of the

8hilippines. The :A( shall thereafter proceed with the redistribution of the land to the1ualified beneficiaries.

d?, which provides that in case of the reection or disregard by the owner of the offer of the

government to buy his land

... the :A( shall conduct summary administrative proceedings to determine the

compensation for the land by re1uiring the landowner, the &$8 and other interested

parties to submit evidence as to the ust compensation for the land, within fifteen >*-?

days from the receipt of the notice. After the e=piration of the above period, the matter is

deemed submitted for decision. The :A( shall decide the case within thirty >@? days

after it is submitted for decision.

To be sure, the determination of ust compensation is a function addressed to the courts of ustice and

may not be usurped by any other branch or official of the government. EPZA v. Dulay 44 resolved a

challenge to several decrees promulgated by 8resident Marcos providing that the ust compensation for

property under e=propriation should be either the assessment of the property by the government or the

sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional,

the )ourt held through Mr. 4ustice Hugo #. "utierre, 4r.5

The method of ascertaining ust compensation under the aforecited decrees constitutes

impermissible encroachment on udicial prerogatives. It tends to render this )ourt inutilein a matter which under this )onstitution is reserved to it for final determination.

Thus, although in an e=propriation proceeding the court technically would still have the

power to determine the ust compensation for the property, following the applicable

decrees, its task would be relegated to simply stating the lower value of the property as

declared either by the owner or the assessor. As a necessary conse1uence, it would be

useless for the court to appoint commissioners under (ule 9/ of the (ules of )ourt.

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Moreover, the need to satisfy the due process clause in the taking of private property is

seemingly fulfilled since it cannot be said that a udicial proceeding was not had before

the actual taking. However, the strict application of the decrees during the proceedings

would be nothing short of a mere formality or charade as the court has only to choose

between the valuation of the owner and that of the assessor, and its choice is always

limited to the lower of the two. The court cannot e=ercise its discretion or independence in

determining what is ust or fair. #ven a grade school pupil could substitute for the udge

insofar as the determination of constitutional ust compensation is concerned.

= = =

In the present petition, we are once again confronted with the same 1uestion of whether

the courts under 8.:. 7o. *-, which contains the same provision on ust compensation

as its predecessor decrees, still have the power and authority to determine ust

compensation, independent of what is stated by the decree and to this effect, to appoint

commissioners for such purpose.

This time, we answer in the affirmative.

= = =

It is violative of due process to deny the owner the opportunity to prove that the valuation

in the ta= documents is unfair or wrong. And it is repulsive to the basic concepts of ustice

and fairness to allow the haphaard work of a minor bureaucrat or clerk to absolutely

prevail over the udgment of a court promulgated only after e=pert 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 ust

determination have been udiciously evaluated.

A reading of the aforecited 0ection *9>d? will readily show that it does not suffer from the arbitrariness that

rendered the challenged decrees constitutionally obectionable. 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. $ut more importantly, the determination of the ust

compensation by the :A( is not by any means final and conclusive upon the landowner or any other

interested party, for 0ection *9>f? clearly provides5

Any party who disagrees with the decision may bring the matter to the court of proper

urisdiction for final determination of ust compensation.

The determination made by the :A( is only preliminary unless accepted by all parties concerned.


19/77

0#). *2. aluation and Mode of )ompensation. G The &$8 shall compensate the

landowner in such amount as may be agreed upon by the landowner and the :A( and

the &$8, in accordance with the criteria provided for in 0ections *9 and */, and other

pertinent provisions hereof, or as may be finally determined by the court, as the ust

compensation for the land.

The compensation shall be paid in one of the following modes, at the option of the

landowner5

>*? )ash payment, under the following terms and conditions5

>a? !or lands above fifty >-@? hectares, insofar as the

e=cess hectarage is concerned G Twentyfive percent

>;-? cash, the balance to be paid in government

financial instruments negotiable at any time.

>b? !or lands above twentyfour >;6? hectares and up to

fifty >-@? hectares G Thirty percent >@? cash, thebalance to be paid in government financial instruments

negotiable at any time.

>c? !or lands twentyfour >;6? hectares and below G

Thirtyfive percent >-? cash, the balance to be paid in

government financial instruments negotiable at any time.

>;? 0hares of stock in governmentowned or controlled corporations, &$8 preferred

shares, physical assets or other 1ualified investments in accordance with guidelines set

by the 8A()D

>? Ta= credits which can be used against any ta= liabilityD

>6? &$8 bonds, which shall have the following features5

>a? Market interest rates aligned with +*day treasury bill

rates. Ten percent >*@? of the face value of the bonds

shall mature every year from the date of issuance until

the tenth >*@th? year5 8rovided, That should the

landowner choose to forego the cash portion, whether in

full or in part, he shall be paid correspondingly in &$8

bondsD

>b? Transferability and negotiability. 0uch &$8 bonds

may be used by the landowner, his successorsin

interest or his assigns, up to the amount of their face

value, for any of the following5

>i? Ac1uisition of land or other real properties of the

government, including assets under the Asset

Page 19 of 77


20/77

8rivatiation 8rogram and other assets foreclosed by

government financial institutions in the same province or

region where the lands for which the bonds were paid

are situatedD

>ii? Ac1uisition of shares of stock of governmentowned

or controlled corporations or shares of stock owned by

the government in private corporationsD

>iii? 0ubstitution for surety or bail bonds for the

provisional release of accused persons, or for

performance bondsD

>iv? 0ecurity for loans with any government financial

institution, provided the proceeds of the loans shall be

invested in an economic enterprise, preferably in a small

and medium scale industry, in the same province or

region as the land for which the bonds are paidD

>v? 8ayment for various ta=es and fees to government5

8rovided, That the use of these bonds for these

purposes will be limited to a certain percentage of the

outstanding balance of the financial instrumentsD

8rovided, further, That the 8A() shall determine the

percentages mentioned aboveD

>vi? 8ayment for tuition fees of the immediate family of

the original bondholder in government universities,

colleges, trade schools, and other institutionsD

>vii? 8ayment for fees of the immediate family of the

original bondholder in government hospitalsD and

>viii? 0uch other uses as the 8A() may from time to

time allow.

The contention of the petitioners in ".(. 7o. /+/// is that the above provision is unconstitutional insofar

as it re1uires the owners of the e=propriated properties to accept ust compensation therefor in less than

money, which is the only medium of payment allowed. In support of this contention, they cite

urisprudence holding that5

The fundamental rule in e=propriation matters is that the owner of the property

e=propriated is entitled to a ust compensation, which should be neither more nor less,

whenever it is possible to make the assessment, than the money e1uivalent of said

property. 4ust compensation has always been understood to be the ust and complete

e1uivalent of the loss which the owner of the thing e=propriated has to suffer by reason of

the e=propriation . 4 >#mphasis supplied.?

Page 20 of 77


21/77

In 4.M. Tuaon )o. v. &and Tenure Administration, 4 this )ourt held5

It is wellsettled that ust compensation means the e1uivalent 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 ust compensation. It means a fair and full e1uivalent for the loss sustained, which is

the measure of the indemnity, not whatever gain would accrue to the e=propriating entity.

The market value of the land taken is the ust 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. >#mphasis

supplied.?

In the nited 0tates, where much of our urisprudence on the subect has been derived, the weight of

authority is also to the effect that ust compensation for property e=propriated is payable only in money

and not otherwise. Thus G

The medium of payment of compensation is ready money or cash. The condemnor

cannot compel the owner to accept anything but money, nor can the owner compel orre1uire the condemnor to pay him on any other basis than the value of the property in

money at the time and in the manner prescribed by the )onstitution and the statutes.

Bhen the power of eminent domain is resorted to, there must be a standard medium of

payment, binding upon both parties, and the law has fi=ed that standard as money in

cash. 47 >#mphasis supplied.?

8art cash and deferred payments are not and cannot, in the nature of things, be regarded

as a reliable and constant standard of compensation. 48

%4ust compensation% for property taken by condemnation means a fair e1uivalent in

money, which must be paid at least within a reasonable time after the taking, and it is not

within the power of the &egislature to substitute for such payment future obligations,

bonds, or other valuable advantage. 49 >#mphasis supplied.?

It cannot be denied from these cases that the traditional medium for the payment of ust compensation is

money and no other. And so, conformably, has ust compensation been paid in the past solely in that

medium. However, we do not deal here with the traditional e=cercise of the power of eminent domain.

This is not an ordinary e=propriation where only a specific property of relatively limited area is sought to

be taken by the 0tate from its owner for a specific and perhaps local purpose.

Bhat we deal with here is a revolutionary kind of e=propriation.

The e=propriation before us affects all private agricultural lands whenever found and of whatever kind aslong as they are in e=cess of the ma=imum retention limits allowed their owners. This kind of e=propriation

is intended for the benefit not only of a particular community or of a small segment of the population but of

the entire !ilipino nation, from all levels of our society, from the impoverished farmer to the landglutted

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 !ilipinos. "enerations yet to come are as involved in this program as we are today, although

hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow

Page 21 of 77


22/77

through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the )onstitution

itself that has ordained this revolution in the farms, calling for %a ust distribution% among the farmers of

lands that have heretofore been the prison of their dreams but can now become the key at least to their

deliverance.

0uch a program will involve not mere millions of pesos. The cost will be tremendous. )onsidering the vast

areas of land subect to e=propriation under the laws before us, we estimate that hundreds of billions of

pesos will be needed, far more indeed than the amount of 8-@ billion initially appropriated, which is

already staggering as it is by our present standards. 0uch amount is in fact not even fully available at this

time.

Be assume that the framers of the )onstitution were aware of this difficulty when they called for agrarian

reform as a top priority proect of the government. It is a part of this assumption that when they envisioned

the e=propriation that would be needed, they also intended that the ust compensation would have to be

paid not in the orthodo= way but a less conventional if more practical method. There can be no doubt that

they were aware of the financial limitations of the government and had no illusions that there would be

enough money to pay in cash and in full for the lands they wanted to be distributed among the farmers.

Be may therefore assume that their intention was to allow such manner of payment as is now providedfor by the )A(8 &aw, particularly the payment of the balance >if the owner cannot be paid fully with

money?, or indeed of the entire amount of the ust compensation, with other things of value. Be may also

suppose that what they had in mind was a similar scheme of payment as that prescribed in 8.:. 7o. ;/,

which was the law in force at the time they deliberated on the new )harter and with which they

presumably agreed in principle.

The )ourt has not found in the records of the )onstitutional )ommission any categorical agreement

among the members regarding the meaning to be given the concept of ust compensation as applied to

the comprehensive agrarian reform program being contemplated. There was the suggestion to %fine tune%

the re1uirement to suit the demands of the proect even as it was also felt that they should %leave it to

)ongress% to determine how payment should be made to the landowner and reimbursement re1uired

from the farmerbeneficiaries. 0uch innovations as %progressive compensation% and %0tatesubsidied

compensation% were also proposed. In the end, however, no special definition of the ust compensation for

the lands to be e=propriated was reached by the )ommission. '


23/77

Accepting the theory that payment of the ust compensation is not always re1uired to be made fully in

money, we find further that the proportion of cash payment to the other things of value constituting the

total payment, as determined on the basis of the areas of the lands e=propriated, is not unduly oppressive

upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily

because the small landowner will be needing it more than the big landowners, who can afford a bigger

balance in bonds and other things of value. 7o less importantly, the government financial instruments

making up the balance of the payment are %negotiable at any time.% The other modes, which are likewise

available to the landowner at his option, are also not unreasonable because payment is made in shares of

stock, &$8 bonds, other properties or assets, ta= credits, and other things of value e1uivalent to the

amount of ust compensation.

Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little

inconvenience. As already remarked, this cannot be avoided. 7evertheless, it is devoutly hoped that

these countrymen of ours, conscious as we know they are of the need for their forebearance and even

sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform.


24/77

was complete prior to the payment. Jennedy further said that %both on principle and authority the rule is ...

that the right to enter on and use the property is complete, as soon as the property is actually

appropriated under the authority of law for a public use, but that the title does not "ass ro& the o+ner

+ithout his consent, until 2ust co&"ensation has been &ade to hi&.3


25/77

In connection with these retained rights, it does not appear in ".(. 7o. /2/6; that the appeal filed by the

petitioners with the


26/77

6. &andowners who were unable to e=ercise their rights of retention under 8.:. 7o. ;/

shall enoy the retention rights granted by (.A. 7o. 99-/ under the conditions therein

prescribed.

-. 0ubect to the abovementioned rulings all the petitions are :I0MI00#:, without

pronouncement as to costs.

0<


27/77

ASSOCIATION OF SMALL LANDOWNERS V. SECRETARY OF DAR, G.R. No. 78742 (175 SCRA 343),

J!" 14, 1#8#

CONSTITUTIONAL LAW II

FUNDAMENTAL POWERS OF THE STATEPOLICE POWER

G.R. No. 78742 July 14, 18

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOME!,

GERARDO ". ALARCIO, FELIPE A. GUICO, JR., "ERNARDO M. ALMONTE, CANUTO RAMIR ".

CA"RITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SAL#A, RE$NALDO G.

ESTRADA, FELISA C. "AUTISTA, ESMENIA J. CA"E, TEODORO ". MADRIAGA, AUREA J.

PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO, CONSUELO M. MORALES,

"ENJAMIN R. SEGISMUNDO, CIRILA A. JOSE % NAPOLEON S. FERRER, petitioners,

&'.

HONORA"LE SECRETAR$ OF AGRARIAN REFORM, respondent.

G.R. No. 7(1) July 14, 18

ARSENIO AL. ACUNA, NEWTON JISON, #ICTORINO FERRARIS, DENNIS JERE!A,

HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO *+ PLANTERS- COMMITTEE, INC.,

#/0o*' Mll D'0/0, #/0o*', N3o' O//+0*l, petitioners,

&'.

JOER ARRO$O, PHILIP E. JUICO *+ PRESIDENTIAL AGRARIAN REFORM

COUNCIL, respondents.

G.R. No. 7744 July 14, 18

INOCENTES PA"ICO, petitioner,&'.

HON. PHILIP E. JUICO, SECRETAR$ OF THE DEPARTMENT OF AGRARIAN REFORM, HON.

JOER ARRO$O, E5ECUTI#E SECRETAR$ OF THE OFFICE OF THE PRESIDENT, *+ M'''.

SAL#ADOR TALENTO, JAIME A"OGADO, CONRADO A#ANCENA *+ RO"ERTO

TAA$, respondents.

G.R. No. 7777 July 14, 18

NICOLAS S. MANAA$ *+ AGUSTIN HERMANO, JR., petitioners,

&'.

HON. PHILIP ELLA JUICO, *' S/0*y o6 A3**+ R6o, *+ LAND "AN OF THE

PHILIPPINES,respondents.

CRU!, J.:

FACTS

These are consolidated cases involving common legal questions including

serious challenges to the constitutionality of R.A. No. 6657 also known as the

!omprehensive Agrarian Reform "aw of #$%%

Page 27 of 77


28/77

&n '.R. No. 7$777( the petitioners are questioning the ).* No. +7 and ,.- Nos.

++% and ++$ on the grounds inter alia of separation of powers( due process(

equal protection and the constitutional limitation that no private property

shall e taken for pulic use without /ust compensation.

&n '.R. No. 7$0#1( the petitioners in this case claim that the power to

provide for a !omprehensive Agrarian Reform )rogram as decreed y the

!onstitution elongs to the !ongress and not to the )resident( the also allege

that )roclamation No. #0# and ,.- No. ++$ should e annulled for violation of

the constitutional provisions on /ust compensation( due process and equal

protection. They contended that the taking must e simultaneous with payment

of /ust compensation which such payment is not contemplated in 2ection 5 of

the ,.- No. ++$.

&n '.R. No. 7$733( the petitioner argues that ,.- Nos. ++% and ++$ were

invalidly issued y the )resident and that the said e4ecutive orders

violate the constitutional provision that no private property shall e taken

without due process or /ust compensation which was denied to the petitioners.

&n '.R. No 7%73+ the petitioners claim that they cannot e/ect their tenants

and so are unale to en/oy their right of retention ecause the *epartment ofAgrarian Reform has so far not issued the implementing rules of the decree.

They therefore ask the onorale !ourt for a writ of mandamus to compel the

respondents to issue the said rules.

ISSUE

hether or not the laws eing challenged is a valid e4ercise of )olice power

or )ower of ,minent *omain.

RULING

)olice )ower through the )ower of ,minent *omain( though there

are traditional distinction etween the police power and the power of eminent

domain( property condemned under police power is no4ious or intended for

no4ious purpose( the compensation for the taking of such property is not

su/ect to compensation( unlike the taking of the property in ,minent *omain

or the power of e4propriation which requires the payment of /ust compensation

to the owner of the property e4propriated.

Page 28 of 77


29/77

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

192 SCRA 51

LUZ FARS , Petitioner, vs. !"# "$N$RA%L# S#CR#!AR& $F !"# D#'AR!#N! $F

AGRAR(AN R#F$R , Respondent.

D # C ( S ( $ N

'ARAS, J.:

This is a petition for prohibition with prayer for restraining order and/or preliminary andpermanent injunction against the Honorable Secretary of the Department of Agrarian

Reform for acting without jurisdiction in enforcing the assailed provisions of R.A. o. !!"#$

otherwise %nown as the &omprehensive Agrarian Reform 'aw of ()** and in promulgatingthe +uidelines and ,rocedure -mplementing ,roduction and ,rofit Sharing under R.A. o.

!!"#$ insofar as the same apply to herein petitioner$ and further from performing an act inviolation of the constitutional rights of the petitioner.

As gathered from the records$ the factual bac%ground of this case$ is as follows

n 0une (1$ ()**$ the ,resident of the ,hilippines approved R.A. o. !!"#$ which includes

the raising of livestoc%$ poultry and swine in its coverage 2Rollo$ p. *13.

n 0anuary 4$ ()*)$ the Secretary of Agrarian Reform promulgated the +uidelines and,rocedures -mplementing ,roduction and ,rofit Sharing as embodied in Sections (5 and 54

of R.A. o. !!"# 2Rollo$ p. *13.

n 0anuary )$ ()*)$ the Secretary of Agrarian Reform promulgated its Rules andRegulations implementing Section (( of R.A. o. !!"# 2&ommercial 6arms3. 2Rollo$ p. *(3.

'u7 6arms$ petitioner in this case$ is a corporation engaged in the livestoc% and poultrybusiness and together with others in the same business allegedly stands to be adversely

affected by the enforcement of Section 52b3$ Section (($ Section (5$ Section (!2d3 and (#and Section 54 of R.A. o. !!"# otherwise %nown as &omprehensive Agrarian Reform 'aw

and of the +uidelines and ,rocedures -mplementing ,roduction and ,rofit Sharing underR.A. o. !!"# promulgated on 0anuary 4$ ()*) and the Rules and Regulations

-mplementing Section (( thereof as promulgated by the DAR on 0anuary )$ ()*) 2Rollo$ pp.485!3. rd

Hence$ this petition praying that aforesaid laws$ guidelines and rules be declaredunconstitutional. 9eanwhile$ it is also prayed that a writ of preliminary injunction or

restraining order be issued enjoining public respondents from enforcing the same$ insofar asthey are made to apply to 'u7 6arms and other livestoc% and poultry raisers.

This &ourt in its Resolution dated 0uly :$ ()5) resolved to deny$ among others$ 'u7 6arms;prayer for the issuance of a preliminary injunction in its 9anifestation dated 9ay 4!$ and 5($

()*). 2Rollo$ p. )*3.

'ater$ however$ this &ourt in its Resolution dated August 4:$ ()*) resolved to grant said

9otion for Reconsideration regarding the injunctive relief$ after the filing and approval bythis &ourt of an injunction bond in the amount of ,(11$111.11. This &ourt also gave due

course to the petition and re


30/77

The petitioner filed its 9emorandum on September !$ ()*) 2Rollo$ pp. (5(8(!*3.

n December 44$ ()*)$ the Solicitor +eneral adopted his &omment to the petition as his9emorandum 2Rollo$ pp. (*!8(*#3.

'u7 6arms C---

? ? ?

A+RAR-A AD ATRA' R>SR&>S R>6R9

Section :. The State shall$ by law$ underta%e an agrarian reform program founded onthe right of farmers and regular farmwor%ers$ who are landless$ to own directly or

collectively the lands they till or$ in the case of other farmwor%ers$ to receive a justshare of the fruits thereof. To this end$ the State shall encourage and underta%e the

just distribution of all agricultural lands$ subject to such priorities and reasonableretention limits as the &ongress may prescribe$ ta%ing into account ecological$

developmental$ or e


31/77

'u7 6arms contended that it does not see% the nullification of R.A. !!"# in itsentirety. -n fact$ it ac%nowledges the correctness of the decision of this &ourt in the

case of the Association of Small 'andowners in the ,hilippines$ -nc. vs. Secretary of Agrarian Reform 2+.R. #*#:4$ (: 0uly ()*)3 affirming the constitutionality of the

&omprehensive Agrarian Reform 'aw. -t$ however$ argued that &ongress in enactingthe said law has transcended the mandate of the &onstitution$ in including land

devoted to the raising of livestoc%$ poultry and swine in its coverage 2Rollo$ p. (5(3.'ivestoc% or poultry raising is not similar to crop or tree farming. 'and is not theprimary resource in this underta%ing and represents no more than five percent 2"B3

of the total investment of commercial livestoc% and poultry raisers. -ndeed$ there are

many owners of residential lands all over the country who use available space in theirresidence for commercial livestoc% and raising purposes$ under =contract8growing

arrangements$= whereby processing corporations and other commercial livestoc% andpoultry raisers 2Rollo$ p. (13. 'ands support the buildings and other amenities

attendant to the raising of animals and birds. The use of land is incidental to but notthe principal factor or consideration in productivity in this industry. -ncluding

bac%yard raisers$ about *1B of those in commercial livestoc% and poultry productionoccupy five hectares or less. The remaining 41B are mostly corporate farms 2Rollo$

p. ((3.

n the other hand$ the public respondent argued that livestoc% and poultry raising is

embraced in the term =agriculture= and the inclusion of such enterprise under Section 52b3of R.A. !!"# is proper. He cited that ebster;s -nternational Dictionary$ Second >dition

2()":3$ defines the following words

=Agriculture @ the art or science of cultivating the ground and raising and harvestingcrops$ often$ including also$ feeding$ breeding and management of livestoc%$ tillage$

husbandry$ farming.

-t includes farming$ horticulture$ forestry$ dairying$ sugarma%ing . . .

'ivestoc% @ domestic animals used or raised on a farm$ especially for profit.

6arm @ a plot or tract of land devoted to the raising of domestic or other animals.= 2Rollo$

pp. *48*53.

The petition is impressed with merit.

The


32/77

The transcripts of the deliberations of the &onstitutional &ommission of ()*! on themeaning of the word =agricultural$= clearly show that it was never the intention of the

framers of the &onstitution to include livestoc% and poultry industry in the coverage of theconstitutionally8mandated agrarian reform program of the +overnment.

The &ommittee adopted the definition of =agricultural land= as defined under Section (!! of R.A. 5*::$ as laud devoted to any growth$ including but not limited to crop lands$ saltbeds$

fishponds$ idle and abandoned land 2Record$ &&9$ August #$ ()*!$ ol. ---$ p. ((3.

The intention of the &ommittee is to limit the application of the word =agriculture.=

&ommissioner 0amir proposed to insert the word =ARAI'>= to distinguish this %ind 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 &ommittee contemplated that

agricultural lands are limited to arable and suitable agricultural lands and therefore$ do notinclude commercial$ industrial and residential lands 2Record$ &&9$ August #$ ()*!$ ol.

---$ p. 513.

-n the interpellation$ then &ommissioner Regalado 2now a Supreme &ourt 0ustice3$ posed

several


33/77

whereby they are called upon to distribute from three percent 25B3 of their gross sales andten percent 2(1B3 of their net profits to their wor%ers as additional compensation is

unreasonable for being confiscatory$ and therefore violative of due process 2Rollo$ p. 4(3.8cralaw

-t has been established that this &ourt will assume jurisdiction over a constitutional &'AR>D null and void for being unconstitutional and the writ of preliminary injunction issued is hereby 9AD> permanent.

S RD>R>D.

Page 33 of 77


34/77

$G.R. No. 78517. F%&''" 27, 1#8#.

GA*INO ALITA, JES+S J+LIAN, JR., JES+S J+LIAN, SR., EDRO RICALDE, VICENTE RICALDE

- ROLANDO SALAMAR, Petitioners, /. T0E 0ONORA*LE CO+RT OF AEALS, ENRI+E M.

REYES, A M. REYES - FE M. REYES, Respondents.

*'% o A''- L%! A666-%, o' Petitioners.

L%o-'o N . !% o' E-'9% R%"%6, E. A!.

Ao!o S. A:- o' Private Respondents.

SYLLA*+S

1. AGRARIAN REFORM LAW; PRES. DECREE NO. 27; DOES NOT COVER LANDS OBTAINED THROUGHA HOMESTEAD PATENT. — The pi!"#$ i%%&e i% 'he"he( !( )!" $#)*% !+"#i)e* "h(!&,h h!-e%"e#* p#"e)" #(e!e(e* +/ "he A,(#(i#) Re0!(- &)*e( P.D. 27. The &e%"i!) e("#i)$/ #$$% 0!( # )e,#"ie #)%'e(. We #,(ee 'i"h "he

pe"i"i!)e(% i) %#/i), "h#" P.D. 27 *e(eei), "he e-#)ip#"i!) !0 "e)#)"% 0(!- "he +!)*#,e !0 "he %!i$ #)* "(#)%0e((i),"! "he- !')e(%hip !0 "he $#)* "he/ "i$$ i% # %'eepi), %!i#$ $e,i%$#"i!) # (e-e*i#$ -e#%&(e p(!-&$,#"e* p&(%)" "!"he %!i#$ 3&%"ie p(eep"% !0 "he C!)%"i"&"i!). H!'ee( %&h !)"e)"i!) #))!" +e i)!4e* "! *e0e#" "he e(/

p&(p!%e !0 "he e)#"-e)" !0 "he P&+$i L#)* A" !( C!--!)'e#$"h A" N!. 151. Th&% 6The H!-e%"e#* A" h#% +ee) e)#"e* 0!( "he 'e$0#(e #)* p(!"e"i!) !0 "he p!!(. The $#' ,ie% # )ee*/ i"ie) # piee !0 $#)* 'he(e he -#/ +&i$* # -!*e%" h!&%e 0!( hi-%e$0 #)* 0#-i$/ #)* p$#)" 'h#" i% )ee%%#(/ 0!( %&+%i%"e)e #)* 0!( "he %#"i%0#"i!) !0$i0e8% !"he( )ee*%. The (i,h" !0 "he i"ie)% "! "hei( h!-e% #)* "! "he "hi),% )ee%%#(/ 0!( "hei( %&+%i%"e)e i% #% i"#$#% "he (i,h" "! $i0e i"%e$0. The/ h#e # (i,h" "! $ie 'i"h # e("#i) *e,(ee !0 !-0!(" #% +e!-e h&-#) +ei),% #)* "heS"#"e 'hih $!!4% #0"e( "he 'e$0#(e !0 "he pe!p$e8% h#ppi)e%% i% &)*e( # *&"/ "! %#0e,(* "he %#"i%0#"i!) !0 "hi% i"#$(i,h".6 9P#"(ii! . B#/!, 112 SCRA 5:

2. COMPREHENSIVE AGRARIAN REFORM LAW OF 1>:7; MAINTAINS THEINAPPLICABILIT? OF P.D. 27 OVER HOMESTEAD GRANTEES. — I" i% '!("h/ !0 )!"e "h#" "he )e'$/

p(!-&$,#"e* C!-p(ehe)%ie A,(#(i#) Re0!(- L#' !0 1. Re"e)"i!) Li-i"% . . ..6 . . P(!i*e* 0&("he( Th#" !(i,i)#$ h!-e%"e#* ,(#)"ee% !( "hei(*i(e" !-p&$%!(/ hei(% 'h! %"i$$ !') "he !(i,i)#$ h!-e%"e#* #" "he "i-e !0 "he #pp(!#$ !0 "hi% A" %h#$$ (e"#i) "he%#-e #(e#% #% $!), #% "he/ !)"i)&e "! &$"i#"e %#i* h!-e%"e#*.6

D E C I S I O N

ARAS, J.;

Be0!(e U% i% # pe"i"i!) %ee4i), "he (ee(%#$ !0 "he *ei%i!) (e)*e(e* +/ "he (e%p!)*e)" C!&(" !0 Appe#$% @@ !)

M#(h 1


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6. E3e"i), 0(!- "he $#)* "he %!#$$e* "e)#)"% )#-e$/; G#+i)! A$i"# e%&% &$i#) S(. e%&% &$i#) (. Pe*(!Ri#$*e Vie)"e Ri#$*e #)* R!$#)*! S#$#-#( #% "he !')e(% '!&$* '#)" "! &$"i#"e "he 0#(-h!$*i), "he-%e$e%.

6N! p(!)!&)e-e)" #% "! !%"%.

SO ORDERED.6 9p. 1 R!$$!

The 0#"% #(e &)*i%p&"e*. The %&+3e" -#""e( !0 "he #%e !)%i%"% !0 "'! 92 p#(e$% !0 $#)* #&i(e* +/ p(i#"e(e%p!)*e)"%8 p(e*ee%%!(%i)i)"e(e%" "h(!&,h h!-e%"e#* p#"e)" &)*e( "he p(!i%i!)% !0 C!--!)'e#$"h A" N!.151. S#i* $#)*% #(e %i""e* #" G&i$i)#) T&),#'#) #-+!#),# *e$ S&(.

P(i#"e (e%p!)*e)"% he(ei) #(e *e%i(!&% !0 pe(%!)#$$/ &$"i#"i), "he%e $#)*% +&" pe"i"i!)e(% (e0&%e "! ##"e (e$/i),!) "he p(!i%i!)% !0 P.D. 27 #)* P.D. 1> #)* #pp&("e)#)" (e,&$#"i!)% i%%&e* +/ "he "he) Mi)i%"(/ !0 A,(#(i#)Re0!(- 9MAR 0!( %h!(" )!' Dep#("-e)" !0 A,(#(i#) Re0!(- 9DAR 0!( %h!(".

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6The H!-e%"e#* A" h#% +ee) e)#"e* 0!( "he 'e$0#(e #)* p(!"e"i!) !0 "he p!!(. The $#' ,ie% # )ee*/ i"ie) # piee !0 $#)* 'he(e he -#/ +&i$* # -!*e%" h!&%e 0!( hi-%e$0 #)* 0#-i$/ #)* p$#)" 'h#" i% )ee%%#(/ 0!( %&+%i%"e)e#)* 0!( "he %#"i%0#"i!) !0 $i0e8% !"he( )ee*%. The (i,h" !0 "he i"ie)% "! "hei( h!-e% #)* "! "he "hi),% )ee%%#(/ 0!("hei( %&+%i%"e)e i% #% i"#$ #% "he (i,h" "! $i0e i"%e$0. The/ h#e # (i,h" "! $ie 'i"h # e("#i) *e,(ee !0 !-0!(" #%

+e!-e h&-#) +ei),% #)* "he S"#"e 'hih $!!4% #0"e( "he 'e$0#(e !0 "he pe!p$e8% h#ppi)e%% i% &)*e( # *&"/ "!%#0e,(* "he %#"i%0#"i!) !0 "hi% i"#$ (i,h".6 9P#"(ii! . B#/!, 112 SCRA 5:

I) "hi% (e,#(* "he Phi$ippi)e C!)%"i"&"i!) $i4e'i%e (e%pe"% "he %&pe(i!(i"/ !0 "he h!-e%"e#*e(%8 (i,h"% !e( "he (i,h"%!0 "he "e)#)"% ,(#)"ee* +/ "he A,(#(i#) Re0!(- %"#"&"e. I) p!i)" i% Se"i!) > !0 A("i$e III !0 "he 1. The S"#"e %h#$$ #pp$/ "he p(i)ip$e% !0 #,(#(i#) (e0!(- !( %"e'#(*%hip 'he)ee( #pp$i#+$e i)#!(*#)e 'i"h $#' i) "he *i%p!%i"i!) !( &"i$i#"i!) !0 !"he( )#"&(#$ (e%!&(e% i)$&*i), $#)*% !0 p&+$i *!-#i)&)*e( $e#%e !( !)e%%i!) %&i"#+$e "! #,(i&$"&(e %&+3e" "! p(i!( (i,h"% h!-e%"e#* (i,h"% !0 %-#$$ %e""$e(% #)* "he(i,h"% !0 i)*i,e)!&% !--&)i"ie% "! "hei( #)e%"(#$ $#)*%.6(#$#' i("#' $i+(#(/

A**i"i!)#$$/ i" i% '!("h/ !0 )!"e "h#" "he )e'$/ p(!-&$,#"e* C!-p(ehe)%ie A,(#(i#) Re0!(- L#' !0 1. Re"e)"i!) Li-i"% . . .

6. . . P(!i*e* 0&("he( Th#" !(i,i)#$ h!-e%"e#* ,(#)"ee% !( "hei( *i(e" !-p&$%!(/ hei(% 'h! %"i$$ !') "he !(i,i)#$h!-e%"e#* #" "he "i-e !0 "he #pp(!#$ !0 "hi% A" %h#$$ (e"#i) "he %#-e #(e#% #% $!), #% "he/ !)"i)&e "! &$"i#"e %#i*h!-e%"e#*.6(#$#' i("#' $i+(#(/

WHEREFORE p(e-i%e% !)%i*e(e* "he *ei%i!) !0 "he (e%p!)*e)" C!&(" !0 Appe#$% %&%"#i)i), "he *ei%i!) !0 "heRe,i!)#$ T(i#$ C!&(" i% he(e+/ AFFIRMED.

SO ORDERED.

Page 36 of 77


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$G.R. No. 13#


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he"#(e% e#h 0!( he( hi$*(e) &)*e( "he C!-p(ehe)%ie A,(#(i#) Re0!(- L#' 9CARL "he "e)#)"% #(e )!"%&pp!%e* "! #&i(e "he %&+3e" $#)* #)* "he E-#)ip#"i!) P#"e)"% p(eipi"#"e$/ i%%&e* "! "he- #(e )&$$ #)* !i* 0!(

+ei), !)"(#(/ "! $#'. Pe"i"i!)e( 0&("he( #$$e,e* "h#" %he !')% "he %&+3e" p(!pe("/ !e(e* +/ OCT N!. P5>:7 '#% #pp(!e* "h&% %he i%e)"i"$e* "! (e"#i) "he #(e# "! "he e$&%i!) !0 he( "e)#)"%. A% (e,#(*% TCT N!. =27: pe"i"i!)e( h#% #pp$ie* 0!((e"e)"i!) !0 %ee) he"#(e% pe( Le""e( !0 Re"e)"i!) #""#he* #% A))e B8 "h#" "he $#)*% %&+3e" !0 "he i)%"#)"

pe"i"i!) #(e !e(e* +/ H!-e%"e#* P#"e)"% #)* #% *ei*e* +/ "he S&p(e-e C!&(" i) "he #%e% !0 P#"(ii! . B#/&,9112 SCRA 51 #)* A$i"# . C!&(" !0 Appe#$% 917 SCRA 7> "he h!-e%"e#*e(% #)* "hei( hei(% h#e "he (i,h" "!&$"i#"e "hei( h!-e%"e#*% pe(%!)#$$/ 'hih i% # %&pe(i!( (i,h" !e( "h#" !0 "e)#)"0#(-e(%.

6Pe"i"i!)e( -!e* 0!( "he #)e$$#"i!) #)* (e#$$ !0 "he E-#)ip#"i!) P#"e)"% i%%&e* "! p(i#"e (e%p!)*e)"%0#(-e(%#)* "! (e%"!(e "! pe"i"i!)e( #)* he( hi$*(e) "he !')e(%hip #)* &$"i#"i!) !0 "he %&+3e" $!"% p$&% p#/-e)" !0 +#4(e)"#$% 0(!- "he "i-e "he/ %"!ppe* p#/i), "he %#-e &)"i$ e3e"e* "he(e0(!-.

6Re%p!)*e)"% 0i$e* "hei( #)%'e( *#"e* M#/ 2


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He)e "hi% Pe"i"i!). >

The I%%&e%

I) he( Me-!(#)*&- pe"i"i!)e( %&+-i"% "he 0!$$!'i), i%%&e% 0!( !&( !)%i*e(#"i!)3,h#)(!+$e%.!-.ph6I Whe"he( !( )!" "he !(i,i)#$ h!-e%"e#*% i%%&e* &)*e( "he p&+$i $#)* #" #(eJ ee-p"e* 0(!- "he !pe(#"i!) !0 $#)*(e0!(-.

6II. G(#)"i), #(,&e)*! "h#" h!-e%"e#*% #(e )!" ee-p" 'he"he( !( )!" "he E-#)ip#"i!) P#"e)"% i%%&e* "! "he(e%p!)*e)"% #(e #$i* )!"'i"h%"#)*i), $#4 !0 p#/-e)" !0 3&%" !-pe)%#"i!).

6III. O) "he #%%&-p"i!) "h#" h!-e%"e#*% #(e ee-p" 0(!- $#)* (e0!(- #)*!( "he e-#)ip#"i!) p#"e)"% #(e i$$e,#$$/i%%&e* he)e !i* #) "he (e%p!)*e)"% +e e3e"e* 0(!- "he p(e-i%e% i) &e%"i!)6 7

The C!&("8% R&$i),

The Pe"i"i!) i% p#("$/ -e(i"!(i!&%. Re%p!)*e)"% #(e e)"i"$e* "! "he $#)*% "he/ "i$$ %&+3e" "! "he *e"e(-i)#"i!) #)* p#/-e)" !0 3&%" !-pe)%#"i!) "! pe"i"i!)e(.

Fi(%" I%%&eh#)(!+1e% i("$ 1#' $i+(#(/

Pe"i"i!)e(8% H!-e%"e#*% N!"

Ee-p" 0(!- L#)* Re0!(-

Pe"i"i!)e( !)"e)*% "h#" +e#&%e "he %&+3e" p(!pe("ie% #(e !e(e* +/ h!-e%"e#* p#"e)"% "he/ #(e ee-p" 0(!- "he!pe(#"i!) !0 $#)* (e0!(-. I) %&pp!(" !0 he( p!%i"i!) %he i"e% "he #%e% A$i"# . CA = #)* P#"(ii! . B#/&, < i)'hih "he C!&(" (&$e* "h#" h!-e%"e#*e(% h#* # %&pe(i!( (i,h" "! &$"i#"e "hei( h!-e%"e#*% #% #,#i)%" "hei( "e)#)"%.

Pe"i"i!)e(8% !)"e)"i!) i% 'i"h!&" $e,#$ +#%i%. P(e%i*e)"i#$ De(ee 9PD N!. 27 &)*e( 'hih "he E-#)ip#"i!)P#"e)"% %!&,h" "! +e #)e$e* he(e 'e(e i%%&e* "! (e%p!)*e)"% #pp$ie% "! #$$ "e)#)"e* p(i#"e #,(i&$"&(#$ $#)*%

p(i-#(i$/ *e!"e* "! (ie #)* !() &)*e( # %/%"e- !0 %h#(e(!p !( $e#%e"e)#)/ 'he"he( $#%%i0ie* #% $#)*e* e%"#"e!( )!".6 1 The $#' -#4e% )! eep"i!)% 'h#"%!ee( i) i"% !e(#,e. N!'he(e "he(ei) *!e% i" #ppe#( "h#" $!"%!+"#i)e* +/ h!-e%"e#* p#"e)"% #(e ee-p" 0(!- i"% !pe(#"i!).(#$#' (e*

The -#""e( i% -#*e ee) $e#(e( +/ Dep#("-e)" Me-!(#)*&- Ci(&$#( N!. 2 Se(ie% !0 1


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U)*!&+"e*$/ "he(e0!(e %he h#% )! (i,h" "! (e"#i) #)/ p!("i!) !0 he( $#)*h!$*i),%.

Ee) &)*e( "he &((e)" p(i-#(/ $#' !) #,(#(i#) (e0!(- Rep&+$i A" 9RA N!. >>:7 "! 'hih "he #pp$i#"i!) !0 PD27 i% %&pp$e"!(/ pe"i"i!)e(8% $#)*% #(e %&+3e" "! $#)* (e0!(-. The %#i* A" $#/% *!') "he (i,h"% !0 h!-e%"e#*,(#)"ee% #% 0!$$!'%h#)(!+1e% i(" 1#' 1i+(#(/

6SECTION >. Re"e)"i!) Li-i"%.—Eep" #% !"he('i%e p(!i*e* i) "hi% A" )! pe(%!) -#/ !') !( (e"#i) *i(e"$/ !( i)*i(e"$/ #)/ p&+$i !( p(i#"e #,(i&$"&(#$ $#)* "he %ie !0 'hih %h#$$ #(/ #!(*i), "! 0#"!(% ,!e()i), # i#+$e0#-i$/%ie* 0#(- %&h #% !--!*i"/ p(!*&e* "e((#i) i)0(#%"(&"&(e #)* %!i$ 0e("i$i"/ #% *e"e(-i)e* +/ "heP(e%i*e)"i#$ A,(#(i#) Re0!(- C!&)i$ 9PARC (e#"e* he(e&)*e( +&" i) )! #%e %h#$$ (e"e)"i!) +/ "he $#)*!')e(eee* 0ie 9: he"#(e%. Th(ee 9 he"#(e% -#/ +e #'#(*e* "! e#h hi$* !0 "he $#)*!')e( %&+3e" "! "he 0!$$!'i),$i0i#"i!)% 91 "h#" he i% #" $e#%" 0i0"ee) 91: /e#(% !0 #,e; #)* 92 "h#" he i% #"$$/ "i$$i), "he $#)* !( *i(e"$/-#)#,i), "he 0#(-; P(!i*e* Th#" $#)*!')e(% 'h!%e $#)*% h#e +ee) !e(e* +/ PD 27 %h#$$ +e #$$!'e* "! 4eep"he #(e# !(i,i)#$$/ (e"#i)e* +/ "he- "he(e&)*e(; P(!i*e* 0&("he( Th#" !(i,i)#$ h!-e%"e#* ,(#)"ee% !( "hei( *i(e"!-p&$%!(/ hei(% 'h! %"i$$ !') "he !(i,i)#$ h!-e%"e#* #" "he "i-e !0 "he #pp(!#$ !0 "hi% A" %h#$$ (e"#i) "he %#-e#(e#% #% $!), #% "he/ !)"i)&e "! &$"i#"e %#i* h!-e%"e#*.6 9 Emphasis supplied

I)*i%p&"#+$/ h!-e%"e#* ,(#)"ee% !( "hei( *i(e" !-p&$%!(/ hei(% #) !') #)* (e"#i) "he !(i,i)#$ h!-e%"e#*% !)$/0!( 6#% $!), #% "he/ !)"i)&e "! &$"i#"e6 "he-. Th#" p#(e$% !0 $#)* #(e !e(e* +/ h!-e%"e#* p#"e)"% 'i$$ )!"#&"!-#"i#$$/ ee-p" "he- 0(!- "he !pe(#"i!) !0 $#)* (e0!(-. I" i% "he 0#" !0 !)"i)&e* &$"i#"i!) +/ "he !(i,i)#$

,(#)"ee% !( "hei( *i(e" !-p&$%!(/ hei(% "h#" %h#$$ ee-p" "hei( $#)*% 0(!- $#)* (e0!(- !e(#,e.

I) "he p(e%e)" #%e #% p(ei!&%$/ p!i)"e* !&" )ei"he( pe"i"i!)e( )!( he( hei(% #(e pe(%!)#$$/ &$"i#"i), "he %&+3e"h!-e%"e#*%. The DAR #)* "he CA 0!&)* "h#" (e%p!)*e)"% 'e(e "he !)e% 'h! h#* +ee) &$"i#"i), "hei( (e%pe"ie

p!("i!)% !0 "he *i%p&"e* p(!pe("ie%.

H!'ee( pe"i"i!)e( #) (e"#i) 0ie 9: he"#(e% i) #!(*#)e 'i"h Se"i!) > !0 RA >>:7 'hih (e&i(e% )!$i0/i), !)*i"i!) 0!( "he $#)*!')e( "! +e e)"i"$e* "! (e"#i) %&h #(e#. Thi% (&$i), i% i) $i)e 'i"h A%%!i#"i!) !0S-#$$ L#)*!')e(% i) "he Phi$ippi)e% I). . Se(e"#(/ !0 A,(#(i#) Re0!(- 0(!- 'hih 'e &!"eh#)(!+1e%i(" 1#' 1i+(#(/

6. . . I) #)/ ee)" #%%&-i), "h#" "he pe"i"i!)e(% h#e )!" /e" ee(i%e* "hei( (e"e)"i!) (i,h"% i0 #)/ &)*e( PD N!. 27"he C!&(" h!$*% "h#" "he/ #(e e)"i"$e* "! "he )e' (e"e)"i!) (i,h"% p(!i*e* 0!( +/ RA N!. >>:7 'hih i) 0#" #(e !)

"he 'h!$e -!(e $i+e(#$ "h#) "h!%e ,(#)"e* +/ "he *e(ee.6(#$#' i("#' $i+(#(/

Pe"i"i!)e(8% hei(% h!'ee( #(e )!" e)"i"$e* "! #'#(*% !0 "h(ee 9 he"#(e% e#h %i)e "he/ #(e )!" #"$$/ "i$$i), "he p#(e$% !( *i(e"$/ -#)#,i), "he 0#(-.h#)(!+1e% i(" 1#' 1i+(#(/

P#"(ii! . B#/&, #)* A$i"# . CA

N!" App$i#+$e

Pe"i"i!)e( i)%i%"% "h#" "he #ppe$$#"e !&(" i,)!(e* "he (&$i), !0 "he C!&(" i) P#"(ii! . B#/&, 11 #)* A$i"# . CA. 12She (e$ie% !) "he 0!$$!'i), p(!)!&)e-e)" i) P#"(ii! 6We h!$* "h#" "he -!(e p#(#-!&)" #)* %&pe(i!( p!$i/!)%i*e(#"i!) i% "! &ph!$* "he (i,h" !0 "he h!-e%"e#*e( #)* hi% hei(% "! !') #)* &$"i#"e pe(%!)#$$/ "he $#)*#&i(e* 0(!- "he S"#"e 'i"h!&" +ei), e)&-+e(e* +/ "e)#)/ (e$#"i!)%.6 1 She #$%! i"e% "he %"#"e-e)" i) A$i"# "h#"

"he i)#pp$i#+i$i"/ !0 P.D. 27 "! $#)*% !e(e* +/ h!-e%"e#* p#"e)"% $i4e "h!%e !0 "he p(!pe("/ i) &e%"i!)6 0i)*%%&pp!(" i) "he #0!(ei"e* Se"i!) > !0 RA >>:7. 15 A $!%e( $!!4 #" "he%e #%e% %h!'% "h#" "he/ #(e )!" #pp$i#+$e "!"he i%%&e% i) "he p(e%e)" #%e.

I) P#"(ii! "he !')e( #)* hi% hei(% h#* p(ei!&%$/ &$"i#"e* "he h!-e%"e#* 'hih '#% $#"e( %!$* +&" %&+%e&e)"$/(e!)e/e* "! "he 0!(-e(. A0"e( "he (e!)e/#)e "he !')e(8% hei(% '#)"e* "! (e%&-e "hei( &$"i#"i!) !0 "heh!-e%"e#* +&" "he p(ei!&% +&/e(8% "e)#)"% *i* )!" '#)" "! $e#e i". I) A$i"# "he !')e( '#% #$%! *e%i(!&% !0

pe(%!)#$$/ &$"i#"i), "he h!-e%"e#*; +&" "he "e)#)"% )!" '#)"i), "! (e$i)&i%h i" 'e(e #%%e("i), "hei( !') (i,h" "!!)"i)&e &$"i#"i), i". Th&% &)*e( "he%e i(&-%"#)e% "he C!&(" &phe$* "he (i,h" !0 "he h!-e%"e#* !')e(% !e("h#" !0 "he "e)#)"%.

Page 40 of 77


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I) "he #%e #" +#( pe"i"i!)e( he(%e$0 h#% )!" pe(%!)#$$/ &$"i#"e* "he p#(e$% !0 $#)*. Nei"he( h#% %he !( he( hei(%ep(e%%e* #" #)/ "i-e #)/ *e%i(e "! &$"i#"e "he- pe(%!)#$$/. She i% i)!4i), /e" i% $e#($/ )!" i)"e)*i), "! ee(#"$$/ ee(i%e he( #$$e,e* (i,h" #% h!-e%"e#*e( "! !') #)* pe(%!)#$$/ &$"i#"e "he-.

Th&% "he (&$i),% i) +!"h P#"(ii! #)* A$i"# 'hih #(e i) $i)e 'i"h "he %"#"e !+3e"ie !0 0!%"e(i), !')e(&$"i#"!(%hip 1: #)* !0 #+!$i%hi), "e)#)/ 1> '!&$* +e i)#pp$i#+$e "! "he p(e%e)" #%e. Si)e pe"i"i!)e( #)* he(hei(% h#e ei)e* )! i)"e)"i!) !0 #"$$/ &$"i#"i), "he $#)*% !( ee) *i(e"$/ -#)#,i), "he 0#(- "he/ 'i$$&)*!&+"e*$/ !)"i)&e "! +e #+%e)"ee $#)*$!(*%. The(e0!(e "! +$i)*$/ #)* i)*i%(i-i)#"e$/ #pp$/ "he (&$i), i) "hei"e* #%e% '!&$* +e "#)"#-!&)" "! e)!&(#,i), 0e&*#$i%"i p(#"ie% #)* ,!i), #,#i)%" "he e(/ e%%e)e !0 #,(#(i#)(e0!(-. Thi% 'e #))!" %#)"i!)

Se!)* I%%&eh#)(!+1e% i("$ 1#' $i+(#(/

&%" C!-pe)%#"i!)

I" i% &)*i%p&"e* "h#" "he %&+3e" p#(e$% 'e(e !e(e* +/ Ope(#"i!) L#)* T(#)%0e( &)*e( PD 27 #)* "h#" p(i#"e(e%p!)*e)"% 'e(e i*e)"i0ie* #% +e)e0ii#(ie%. I) 0#" E-#)ip#"i!) P#"e)"% h#e #$(e#*/ +ee) i%%&e* "! "he-.

Pe"i"i!)e( h!'ee( $#i-% "h#" %he '#% )!" p#i* 3&%" !-pe)%#"i!) #)* "h&% p(#/% 0!( "he #)e$$#"i!) !0 "he

E-#)ip#"i!) P#"e)"% i%%&e* "! (e%p!)*e)"% &)*e( PD 27. She !)"e)*% "h#" 6i" i% i$$e,#$ 0!( "he DAR "! "#4e p(!pe("/ 'i"h!&" 0&$$ p#/-e)" !0 3&%" !-pe)%#"i!);J &)"i$ 0&$$ p#/-e)" i% *!)e "he "i"$e #)* !')e(%hip (e-#i) 'i"h"he $#)*h!$*e(.6 17

Pe"i"i!)e(8% !)"e)"i!) h#% -e(i". Se"i!) 2 !0 PD 2>> %"#"e%h#)(!+1e% i("$ 1#' $i+(#(/

A0"e( "he "e)#)"0#(-e( %h#$$ h#e 0&$$/ !-p$ie* 'i"h "he (e&i(e-e)"% 0!( # ,(#)" !0 "i"$e &)*e( P(e%i*e)"i#$ De(ee N!. 27 #) E-#)ip#"i!) P#"e)" #)*!( G(#)" %h#$$ +e i%%&e* +/ "he Dep#("-e)" !0 A,(#(i#) Re0!(- !) "he +#%i% !0 #*&$/ #pp(!e* %&(e/ p$#).6 h#)(!+1e% i(" 1#' 1i+(#(/

O) "he !"he( h#)* p#(#,(#ph% = #)* < !0 PD 27 (e#*% #% 0!$$!'%3,h#)(!+$e%.!-.ph

6F!( "he p&(p!%e !0 *e"e(-i)i), "he !%" !0 "he $#)* "! +e "(#)%0e((e* "! "he "e)#)"0#(-e( p&(%)" "! "hi% De(ee

"he #$&e !0 "he $#)* %h#$$ +e e&i#$e)" "! "'! #)* !)eh#$0 92 12 "i-e% "he #e(#,e h#(e%" !0 "h(ee )!(-#$ (!p/e#(% i--e*i#"e$/ p(ee*i), "he p(!-&$,#"i!) !0 "hi% De(ee;

6The "!"#$ !%" !0 "he $#)* i)$&*i), i)"e(e%" #" "he (#"e !0 %i 9> pe( e)"&- pe( #))&- %h#$$ +e p#i* +/ "he "e)#)"i) 0i0"ee) 91: /e#(% !0 0i0"ee) 91: e$ #))$ #-!("i#"i!)%.J6

A$"h!&,h &)*e( "he $#' "e)#)" 0#(-e(% #(e #$(e#*/ *ee-e* !')e(% !0 "he $#)* "he/ "i$$ "he/ #(e %"i$$ (e&i(e* "! p#/"he !%" !0 "he $#)* i)$&*i), i)"e(e%" 'i"hi) 0i0"ee) /e#(% +e0!(e "he "i"$e i% "(#)%0e((e* "! "he-. Th&% "he C!&("he$* i) A%%!i#"i!) !0 S-#$$ L#)*!')e(% i) "he Phi$ippi)e% . Se(e"#(/ !0 A,(#(i#) Re0!(- 1=

6I" i% "(&e "h#" PD 27 ep(e%%$/ !(*e(e* "he e-#)ip#"i!) !0 "e)#)"0#(-e(% #% !0 O"!+e( 21 1


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$#)*!')e( #))!" 3&%" +e #%%&-e*; i" -&%" +e *e"e(-i)e* 'i"h e("#i)"/ +e0!(e "he $#)* "i"$e% #(e "(#)%0e((e*.

A$"h!&,h EO 22= p(!i*e% "h#" "he "!"#$ $e#%e (e)"#$% p#i* 0!( "he $#)*% 0(!- O"!+e( 21 1>:7 %h!&$* )!" #pp$/ "! (ie #)* !() $#)*% &)*e( PD 27. Se"i!) 7: !0 RA>>:7 $e#($/ %"#"e% "h#" "he p(!i%i!)% !0 PD 27 #)* EO 22= %h#$$ !)$/ h#e # %&pp$e"!(/ e00e". Se"i!) 7 !0 "he A"#$%! p(!i*e% —

SECTION 7. P(i!(i"ie%. — The DAR i) !!(*i)#"i!) 'i"h "he PARC %h#$$ p$#) #)* p(!,(#- "he #&i%i"i!) #)**i%"(i+&"i!) !0 #$$ #,(i&$"&(#$ $#)*% "h(!&,h # pe(i!* !0 91 /e#(% 0(!- "he e00e"ii"/ !0 "hi% A". L#)*% %h#$$ +e#&i(e* #)* *i%"(i+&"e* #% 0!$$!'%h#)(!+1e% i("$ 1#' $i+(#(/

Ph#%e O)e Rie #)* C!() $#)*% &)*e( P.D. 27; #$$ i*$e !( #+#)*!)e* $#)*%; #$$ p(i#"e $#)*% !$&)"#(i$/ !00e(e* +/"he !')e(% 0!( #,(#(i#) (e0!(-; . . . #)* #$$ !"he( $#)*% !')e* +/ "he ,!e()-e)" *e!"e* "! !( %&i"#+$e 0!(#,(i&$"&(e 'hih %h#$$ +e #&i(e* #)* *i%"(i+&"e* i--e*i#"e$/ &p!) "he e00e"ii"/ !0 "hi% A" 'i"h "hei-p$e-e)"#"i!) "! +e !-p$e"e* 'i"hi) # pe(i!* !0 )!" -!(e "h#) 0!&( 95 /e#(% 9 Emphasis supplied .

Thi% e$!&e)"$/ *e-!)%"(#"e% "h#" RA >>:7 i)$&*e% PD 27 $#)*% #-!), "he p(!pe("ie% 'hih "he DAR %h#$$ #&i(e#)* *i%"(i+&"e "! "he $#)*$e%%. A)* "! 0#i$i"#"e "he #&i%i"i!) #)* *i%"(i+&"i!) "he(e!0 Se%. 1> 17 #)* 1= !0 "he A"%h!&$* +e #*he(e* "!. I) A%%!i#"i!) !0 S-#$$ L#)*!')e(% !0 "he Phi$ippi)e% . Se(e"#(/ !0 A,(#(i#) Re0!(- "hi%C!&(" #pp$ie* "he p(!i%i!)% 9!0 RA >>:7 "! (ie #)* !() $#)*% 'he) i" &phe$* "he !)%"i"&"i!)#$i"/ !0 "he p#/-e)"!0 3&%" !-pe)%#"i!) 0!( PD 27 $#)*% "h(!&,h "he *i00e(e)" -!*e% %"#"e* i) Se. 1=.6(#$#' i("#' $i+(#(/

I) *e"e(-i)i), "he #-!&)" "! +e p#i* pe"i"i!)e( #$$ $e#%e (e)"#$% p#i* +/ (e%p!)*e)"% "! he( #0"e( O"!+e( 21 1>:7 ep(e%%$/ %"#"e% "h#" 6#"$ "e)#)""i$$e(% i)"he $#)*h!$*i), %h#$$ )!" +e e3e"e* !( (e-!e* "he(e0(!-.6 F&("he(-!(e "he(e i% )! (e#%!) 0!( e3e"i), "he "i$$e(%'i"h (e%pe" "! "he #(e# !0 0ie he"#(e% 'hih pe"i"i!)e( -#/ h!!%e "! (e"#i). Se"i!) > !0 RA >>:7 0&("he(%"#"e%3,h#)(!+$e%.!-.ph

6The (i,h" "! h!!%e "he #(e# "! +e (e"#i)e* 'hih %h#$$ +e !-p#" !( !)"i,&!&% %h#$$ pe("#i) "! "he $#)*!')e(;

Page 42 of 77


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P(!i*e* h!'ee( Th#" i) #%e "he #(e# %e$e"e* 0!( (e"e)"i!) +/ "he $#)* !')e( i% "e)#)"e* "he "e)#)" %h#$$ h#e"he !p"i!) "! h!!%e 'he"he( "! (e-#i) "he(ei) !( +e # +e)e0ii#(/ i) "he %#-e !( #)!"he( #,(i&$"&(#$ $#)* 'i"h%i-i$#( !( !-p#(#+$e 0e#"&(e%. I) #%e "he "e)#)" h!!%e% "! (e-#i) i) "he (e"#i)e* #(e# he %h#$$ +e !)%i*e(e* #$e#%e h!$*e( #)* %h#$$ $!%e hi% (i,h" "! +e # +e)e0ii#(/ &)*e( "hi% A". I) #%e "he "e)#)" h!!%e% "! +e # +e)e0ii#(/i) #)!"he( #,(i&$"&(#$ $#)* he $!%e% hi% (i,h" #% # $e#%eh!$*e( "! "he $#)* (e"#i)e* +/ "he $#)*!')e(. The "e)#)"-&%" ee(i%e "hi% !p"i!) 'i"hi) # pe(i!* !0 !)e 91 /e#( 0(!- "he "i-e "he $#)*!')e( -#)i0e%"% hi% h!ie !0 "he#(e# 0!( (e"e)"i!)6 h#)(!+1e% i(" 1#' 1i+(#(/

I) #$$ #%e% "he %e&(i"/ !0 "e)&(e !0 "he 0#(-e(% !( 0#(- '!(4e(% !) "he $#)* p(i!( "! "he #pp(!#$ !0 "hi% A" %h#$$ +e (e%pe"e*.6(#$#' i("#' $i+(#(/

The &((e)" p(!i%i!) !) (e"e)"i!) (e-!e% "he )ee%%i"/ p(e%e)" &)*e( PD 27 !0 e3e"i), #"$ "i$$e(%. U)*e( "he&((e)" $#' $#)*!')e(% 'h! *! )!" pe(%!)#$$/ &$"i#"e "hei( $#)*% #(e )! $!),e( (e&i(e* "! *! %! i) !(*e( "!$i0/ 0!( "he (e"e)"i!) !0 #) #(e# )!" eee*i), 0ie he"#(e%. I)%"e#* "he/ #(e )!' (e&i(e* "! -#i)"#i) "he #"$"i$$e( !0 "he #(e# (e"#i)e* %h!&$* "he $#""e( h!!%e "! (e-#i) "he(ei).

WHEREFORE "he Pe"i"i!) i% p#("i#$$/ GRANTED. The #%%#i$e* Dei%i!) !0 "he C!&(" !0 Appe#$% i% he(e+/ SETASIDE. The Dei%i!) !0 "he p(!i)i#$ #,(#(i#) (e0!(- #*3&*i#"!( i% REINSTATED 'i"h "he -!*i0i#"i!) "h#" "he$e#%e (e)"#$% 'hih (e%p!)*e)"% h#e #$(e#*/ p#i* "! pe"i"i!)e( #0"e( O"!+e( 21 1


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$G.R. NO. 154&%' 27, 2>15= *#"e* N!e-+e( 27 21;#)*(#$#'$i+(#(/

9+ "he CA% (e%!$&"i!) !0 &)e 1 22 i) "he %#-e #%e *e)/i), SEARBEMCO% -!"i!) 0!( (e!)%i*e(#"i!).

T0E FACT+AL ANTECEDENTS

O) #)(/ 2>7 he"#(e% -!(e !( $e%% #)* 'hih i% p$#)"e* #)* #&"h!(ie* &)*e( $e""e( !0 i)%"(&"i!) )!. 7 1


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A)/ *i%p&"e #(i%i), 0(!- !( i) !))e"i!) 'i"h "he BPPA +e"'ee) "he p#("ie% %h#$$ +e 0i)#$$/ %e""$e* "h(!&,h#(+i"(#"i!). T! &!"e "he BPPA

I. ARBITRATION OF DISPUTE

A$$ *i%p&"e% #(i%i), i) !))e"i!) 'i"h "hi% A,(ee-e)" %h#$$ +e 0i)#$$/ %e""$e* &)*e( "he R&$e% !0 C!)i$i#"i!) #)*A(+i"(#"i!) !0 "he I)"e()#"i!)#$ Ch#-+e( !0 C!--e(e +/ "h(ee 9 A(+i"(#"!(% #pp!i)"e* i) #!(*#)e 'i"h %#i*R&$e%. The A(+i"(#"i!) %h#$$ +e he$* i) # e)&e "! +e #,(ee* +/ "he p#("ie%. &*,-e)" &p!) "he #'#(* (e)*e(e* -#/

+e e)"e(e* i) #)/ Phi$ippi)e C!&(" h#i), 3&(i%*i"i!) !( #pp$i#"i!) -#/ +e -#*e "! %&h !&(" 0!( 3&*ii#$#ep"#)e !0 "he #'#(* #)* #% !(*e( !0 e)0!(e-e)" #% "he #%e -#/ +e.

O) Dee-+e( 11 2 DOLE 0i$e* # !-p$#i)" 'i"h "he Re,i!)#$ T(i#$ C!&(": 9 RTC #,#i)%" SEARBEMCO "he%p!&%e% E$$/ #)* M/()# A+&3!% 9 spouses Abuos #)* O(i+#)e Se(ie% I). 9Oribane! 0!( %pei0i pe(0!(-#)e#)* *#-#,e% 'i"h # p(#/e( 0!( "he i%%)e !0 # '(i" !0 p(e$i-i)#(/ i)3&)"i!) #)* !0 # "e-p!(#(/ (e%"(#i)i), !(*e(.DOLE #$$e,e* "h#" SEARBEMCO %!$* #)* *e$ie(e* "! O(i+#)e "h(!&,h "he %p!&%e% A+&3!% "he +#)#)#% (e3e"e*

+/ DOLE i) i!$#"i!) !0 p#(#,(#ph :9p A("i$e V !0 "he BPPA 'hih $i-i"e* "he %#$e !0 (e3e"e* +#)#)#% 0!(6*!-e%"i )!)ep!(" !)%&-p"i!).6 DOLE 0&("he( #$$e,e* "h#" O(i+#)e i% $i4e'i%e #) ep!("e( !0 +#)#)#% #)* i%

i"% *i(e" !-pe"i"!(.

DOLE )#((#"e* i) i"% !-p$#i)" h!' SEARBEMCO %!$* #)* *e$ie(e* "he (e3e"e* +#)#)#% "! O(i+#)e "h(!&,h "he%p!&%e% A+&3!%

5= 6CONSUL6 -#(4e* +!e% 'e(e p#4e* #)* 4)!'i),$/ %!$* +/ *e0e)*#)" SEARBEMCO "!ORIBANE SERVICES INC. "h(!&,h *e0e)*#)"% A+&3!% 'h! #((ie* #)* $!#*e* "he %#-e !) +!#(* # (e* I%&&F!('#(*e( +e#(i), p$#"e )!. LCV


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SEARBEMCO (e%p!)*e* 'i"h # -!"i!) "! *i%-i%% !) "he ,(!&)*% !0 $#4 !0 3&(i%*i"i!) !e( "he %&+3e" -#""e( !0"he $#i- $#4 !0 #&%e !0 #"i!) 0#i$&(e "! %&+-i" "! #(+i"(#"i!) 'hih i% # !)*i"i!) p(ee*e)" "! "he 0i$i), !0 #!-p$#i)" #)* "he !-p$#i)"% *e0e"ie e(i0i#"i!) #)* e("i0i#"i!) !0 )!)0!(&- %h!ppi),.> SEARBEMCO#(,&e* "h#"

1 "he Dep#("-e)" !0 A,(#(i#) Re0!(- A*3&*i#"i!) B!#(* 9 DARAB h#% e$&%ie 3&(i%*i"i!) !e( "he #"i!) 0i$e* +/ DOLE p&(%)" "! Se"i!)% 1 #)* 9e !0 A*-i)i%"(#"ie O(*e( N!. :71 9 RA "o. ''() ; #)*(#$#'$i+(#(/

2 "he A(+i"(#"i!) C$#&%e !0 "he BPPA i% )!" #pp$i#+$e #% #%i*e 0(!- SEARBEMCO DOLE i-p$e#*e* !"he(

p#("ie% 9i.e.* "he %p!&%e% A+&3!% #)* O(i+#)e 'h! #(e )!" p#("ie% "! "he BPPA #% *e0e)*#)"%.

11

S&+%e&e)"$/ DOLE 0i$e* !) Fe+((/ 2 21 #) #-e)*e* !-p$#i)"12 "he #-e)*-e)" !)%i%"i), !0 "heVe(i0i#"i!) #)* Ce("i0i#"i!) #,#i)%" 0!(&- %h!ppi), 0!( DOLE ee&"e* +/ D#)i$! C. K&i)"! DOLE% !)eM#)#,e(.

T0E RTC R+LING

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SEARBEMCO -!e* 0!( "he (e!)%i*e(#"i!) !0 "he RTC O(*e( .15 The RTC *e)ie* "he -!"i!) 0!( $#4 !0 -e(i" i)

i"% O(*e( !0 &$/ 12 21.1:

T0E CA R+LING

O) &$/ 2> 21 SEARBEMCO 0i$e* # 6B%! /! o- o' certiorar i 1> 'i"h "he CA #$$e,i), ,(#e #+&%e !0*i%(e"i!) !) "he p#(" !0 "he RTC 0!( *e)/i), i"% -!"i!) "! *i%-i%% #)* "he %&+%e&e)" -!"i!) 0!( (e!)%i*e(#"i!).

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