cases agrarian

7/21/2019 Cases Agrarian

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Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN TE PILIPPINES, 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,

vs.

ONORA"LE SECRETAR$ OF AGRARIAN REFORM, respondent.

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

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

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

N/o0 O--*)(l, petitioners,

vs.

JO3ER ARRO$O, PILIP E. JUICO ()* PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PA"ICO, petitioner,

vs.

ON. PILIP E. JUICO, SECRETAR$ OF TE DEPARTMENT OF AGRARIAN REFORM, ON. JO3ERARRO$O, EECUTI#E SECRETAR$ OF TE OFFICE OF TE 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$ ()* AGUSTIN ERMANO, JR., petitioners,

vs.

ON. PILIP ELLA JUICO, (0 S-/(/y o5 A/(/() R5o/6, ()* LAND "AN3 OF TE

PILIPPINES,respondents.

CRU!,J.:

In ancient mytholoy, Antaeus !as a terrible iant !ho bloc"ed and challened #ercules for his life on his !ay

to Mycenae after performin his eleventh labor. $he t!o !restled mihtily and #ercules flun his adversary to

the round thin"in him dead, but Antaeus rose even stroner to resume their strule. $his happened several

times to #ercules% increasin ama&ement. 'inally, as they continued rapplin, it da!ned on #ercules that

Antaeus !as the son of (aea and could never die as lon as any part of his body !as touchin his Mother


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Earth. $hus fore!arned, #ercules then held Antaeus up in the air, beyond the reach of the sustainin soil, and

crushed him to death.

Mother Earth. $he sustainin soil. $he iver of life, !ithout !hose invioratin touch even the po!erful Antaeus

!ea"ened and died.

$he cases before us are not as fanciful as the foreoin tale. But they also tell of the elemental forces of life

and death, of men and !omen !ho, li"e Antaeus need the sustainin strenth of the precious earth to stay

alive.)*and for the *andless) is a sloan that underscores the acute imbalance in the distribution of this precious

resource amon our people. But it is more than a sloan. $hrouh the broodin centuries, it has become a

battle+cry dramati&in the increasinly urent demand of the dispossessed amon us for a plot of earth as their

place in the sun.

Reconi&in this need, the Constitution in -/ mandated the policy of social 0ustice to )insure the !ell+bein

and economic security of all the people,) 1especially the less privileed. In -1, the ne! Constitution affirmed

this oal addin specifically that )the 2tate shall reulate the ac3uisition, o!nership, use, en0oyment and

disposition of private property and e3uitably diffuse property o!nership and profits.) 22inificantly, there !as

also the specific in0unction to )formulate and implement an ararian reform proram aimed at emancipatin the

tenant from the bondae of the soil.) &

$he Constitution of -41 !as not to be outdone. Besides echoin these sentiments, it also adopted one !hole

and separate Article 5III on 2ocial 6ustice and #uman Rihts , containin randiose but undoubtedly sincere

provisions for the uplift of the common people. $hese include a call in the follo!in !ords for the adoption by

the 2tate of an ararian reform proram7

2EC. 8. $he 2tate shall, by la!, underta"e an ararian reform proram founded on the riht

offarmers and reular farm!or"ers, !ho are landless, to o!n directly or collectively the lands

they till or, in the case of other farm!or"ers, to receive a 0ust share of the fruits thereof. $o this

end, the 2tate shall encourae and underta"e the 0ust distribution of all aricultural lands,

sub0ect to such priorities and reasonable retention limits as the Conress may prescribe, ta"in

into account ecoloical, developmental, or e3uity considerations and sub0ect to the payment of

0ust compensation. In determinin retention limits, the 2tate shall respect the riht of small

lando!ners. $he 2tate shall further provide incentives for voluntary land+sharin.

Earlier, in fact, R.A. No. 488, other!ise "no!n as the Aricultural *and Reform Code, had already been

enacted by the Conress of the Philippines on Auust 4, -9, in line !ith the above+stated principles. $his

!as substantially superseded almost a decade later by P.:. No. ;1, !hich !as promulated on


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$he above+captioned cases have been consolidated because they involve common leal 3uestions, includin

serious challenes to the constitutionality of the several measures mentioned above. $hey !ill be the sub0ect

of one common discussion and resolution, $he different antecedents of each case !ill re3uire separate

treatment, ho!ever, and !ill first be e=plained hereunder.

(.R. No. 1-111

23uarely raised in this petition is the constitutionality of P.:. No. ;1, E.


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constitutionality of P.:. No. ;1 !as merely assumed in Chavez, !hile !hat !as decided in Gonzales!as the

validity of the imposition of martial la!.

In the amended petition dated November ;;, /44, it is contended that P.:. No. ;1, E.e=cept 2ections ;@ and ;? have been impliedly repealed by R.A. No. 99/1. 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 !as filed !ith leave of court on 6une , -44 by icente Cru&, o!ner of a . 4+

hectare land, !ho complained that the :AR !as insistin on the implementation of P.:. No. ;1 and E.


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application of the CARP to them. $o the e=tent that the suar planters have been lumped in the same

leislation !ith other farmers, althouh they are a separate roup !ith problems e=clusively their o!n, their

riht to e3ual protection has been violated.

A motion for intervention !as filed on Auust ;1,-41 by the National 'ederation of 2uarcane Planters

>NA2P? !hich claims a membership of at least ;@,@@@ individual suar planters all over the country.


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>8? $he appropriation of a P/@ billion special fund from the National $reasury did not oriinate

from the #ouse of Representatives.

(.R. No. 1-188

$he petitioner allees that the then 2ecretary of :epartment of Ararian Reform, in violation of due process

and the re3uirement for 0ust compensation, placed his landholdin under the coverae of ? $he petitioner is denied the riht of ma=imum retention provided for under the -41

Constitution.

$he petitioner contends that the issuance of E.@. Nos. ;;4 and ;;- shortly before Conress convened is

anomalous and arbitrary, besides violatin the doctrine of separation of po!ers. $he leislative po!er ranted

to the President under the $ransitory Provisions refers only to emerency measures that may be promulatedin the proper e=ercise of the police po!er.

$he petitioner also invo"es his rihts not to be deprived of his property !ithout due process of la! and to the

retention of his small parcels of riceholdin as uaranteed under Article 5III, 2ection 8 of the Constitution. #e

li"e!ise arues that, besides denyin him 0ust compensation for his land, the provisions of E.


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Implementation (uidelines of *Clarificatory (uidelines on Coverae of P.:. No. ;1 and Retention by 2mall *ando!ners?,

and :AR Administrative Providin for a Cut+off :ate for *ando!ners to Apply for

Retention andor to Protest the Coverae of their *andholdins under


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ineffective for the additional reason that a mere letter of instruction could not have repealed the presidential

decree.

I

Althouh holdin neither purse nor s!ord and so rearded as the !ea"est of the three departments of the

overnment, the 0udiciary is nonetheless vested !ith the po!er to annul the acts of either the leislative or the

e=ecutive or of both !hen not conformable to the fundamental la!. $his is the reason for !hat some 3uarters

call the doctrine of 0udicial supremacy. Even so, this po!er is not lihtly assumed or readily e=ercised. $he

doctrine of separation of po!ers imposes upon the courts a proper restraint, born of the nature of their

functions and of their respect for the other departments, in stri"in do!n the acts of the leislative and the

e=ecutive as unconstitutional. $he policy, indeed, is a blend of courtesy and caution. $o doubt is to sustain.

$he theory is that before the act !as done or the la! !as enacted, earnest studies !ere made by Conress or

the President, or both, to insure that the Constitution !ould not be breached.

In addition, the Constitution itself lays do!n strinent conditions for a declaration of unconstitutionality,

re3uirin therefor the concurrence of a ma0ority of the members of the 2upreme Court !ho too" part in the

deliberations and voted on the issue durin their session en banc.11And as established by 0ude made

doctrine, the Court !ill assume 0urisdiction over a constitutional 3uestion only if it is sho!n that the essential

re3uisites of a 0udicial in3uiry into such a 3uestion are first satisfied. $hus, there must be an actual case orcontroversy involvin a conflict of leal rihts susceptible of 0udicial determination, the constitutional 3uestion

must have been opportunely raised by the proper party, and the resolution of the 3uestion is unavoidably

necessary to the decision of the case itself. 12

ith particular reard to the re3uirement of proper party as applied in the cases before us, !e hold that the

same is satisfied by the petitioners and intervenors because each of them has sustained or is in daner of

sustainin an immediate in0ury as a result of the acts or measures complained of. 1&And even if, strictly

spea"in, they are not covered by the definition, it is still !ithin the !ide discretion of the Court to !aive the

re3uirement and so remove the impediment to its addressin and resolvin the serious constitutional 3uestions

raised.

In the first Emerency Po!ers Cases, 14ordinary citi&ens and ta=payers !ere allo!ed to 3uestion the

constitutionality of several e=ecutive orders issued by President Fuirino althouh they !ere invo"in only an

indirect and eneral interest shared in common !ith the public. $he Court dismissed the ob0ection that they

!ere not proper parties and ruled that )the transcendental importance to the public of these cases demands

that they be settled promptly and definitely, brushin aside, if !e must, technicalities of procedure.) e have

since then applied this e=ception in many other cases. 1

$he other above+mentioned re3uisites have also been met in the present petitions.

In must be stressed that despite the inhibitions pressin upon the Court !hen confronted !ith constitutionalissues li"e the ones no! before it, it !ill not hesitate to declare a la! or act invalid !hen it is convinced that this

must be done. In arrivin at this conclusion, its only criterion !ill be the Constitution as (od and its conscience

ive it the liht to probe its meanin and discover its purpose. Personal motives and political considerations are

irrelevancies that cannot influence its decision. Blandishment is as ineffectual as intimidation.

'or all the a!esome po!er of the Conress and the E=ecutive, the Court !ill not hesitate to )ma"e the

hammer fall, and heavily,) to use 6ustice *aurel%s pithy lanuae, !here the acts of these departments, or of

any public official, betray the people%s !ill as e=pressed in the Constitution.


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It need only be added, to borro! aain the !ords of 6ustice *aurel, that G

... !hen the 0udiciary 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

*eislature, but only asserts the solemn and sacred obliation assined to it by the Constitution

to determine conflictin claims of authority under the Constitution and to establish for the parties

in an actual controversy the rihts !hich that instrument secures and uarantees to them. $his

is in truth all that is involved in !hat is termed )0udicial supremacy) !hich properly is the po!er

of 0udicial revie! under the Constitution. 1

$he cases before us cateorically raise constitutional 3uestions that this Court must cateorically resolve. And

so !e shall.

II

e proceed first to the e=amination of the preliminary issues before resolvin the more serious challenes to

the constitutionality of the several measures involved in these petitions.

$he promulation of P.:. No. ;1 by President Marcos in the e=ercise of his po!ers under martial la! hasalready been sustained inGonzales v. Estrellaand !e find no reason to modify or reverse it on that issue. As

for the po!er of President A3uino to promulate Proc. No. and E.8? of Article

I, are not applicable. ith particular reference to 2ection ;8, this obviously could not have been complied

!ith for the simple reason that the #ouse of Representatives, !hich no! has the e=clusive po!er to initiate


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appropriation measures, had not yet been convened !hen the proclamation !as issued. $he leislative po!er

!as then solely vested in the President of the Philippines, !ho embodied, as it !ere, both houses of Conress.

$he arument of some of the petitioners that Proc. No. and E.PARC? created hereunder, but in no case shall retention by the lando!ner e=ceed five >/?

hectares. $hree >? hectares may be a!arded to each child of the lando!ner, sub0ect to the

follo!in 3ualifications7 >? that he is at least fifteen >/? years of aeD and >;? that he is actually

tillin the land or directly manain the farmD Provided, $hat lando!ners !hose lands have

been covered by Presidential :ecree No. ;1 shall be allo!ed to "eep the area oriinally

retained by them thereunder, further, $hat oriinal homestead rantees or direct compulsory

heirs !ho still o!n the oriinal homestead at the time of the approval of this Act shall retain thesame areas as lon as they continue to cultivate said homestead.

$he arument that E.


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should, for an unreasonable lenth of time, fail to decide a particular 3uestion to the reat

detriment of all parties concerned, or a court should refuse to ta"e 0urisdiction of a cause !hen

the la! clearly ave it 0urisdiction mandamus !ill issue, in the first case to re3uire a decision,

and in the second to re3uire that 0urisdiction be ta"en of the cause. 22

And !hile it is true that as a rule the !rit !ill not be proper as lon as there is still a plain, speedy and ade3uate

remedy available from the administrative authorities, resort to the courts may still be permitted if the issue

raised is a 3uestion of la!. 2&

III

$here are traditional distinctions bet!een the police po!er and the po!er of eminent domain that loically

preclude the application of both po!ers at the same time on the same sub0ect. In the case of City o 'a(uio v.

NA)A*A, 24for e=ample, !here a la! re3uired the transfer of all municipal !ater!or"s systems to the

NAA2A in e=chane for its assets of e3uivalent value, the Court held that the po!er bein e=ercised !as

eminent domain because the property involved !as !holesome and intended for a public use. Property

condemned under the police po!er is no=ious or intended for a no=ious purpose, such as a buildin on the

vere of collapse, !hich should be demolished for the public safety, or obscene materials, !hich should be

destroyed in the interest of public morals. $he confiscation of such property is not compensable, unli"e theta"in of property under the po!er of e=propriation, !hich re3uires the payment of 0ust compensation to the

o!ner.

In the case of Pennsylvania Coal Co. v. Mahon, 26ustice #olmes laid do!n the limits of the police po!er in a

famous aphorism7 )$he eneral rule at least is that !hile property may be reulated to a certain e=tent, if

reulation oes too far it !ill be reconi&ed as a ta"in.) $he reulation that !ent )too far) !as a la! prohibitin

minin !hich miht cause the subsidence of structures for human habitation constructed on the land surface.

$his !as resisted by a coal company !hich had earlier ranted a deed to the land over its mine but reserved

all minin rihts thereunder, !ith the rantee assumin all ris"s and !aivin any damae claim. $he Court held

the la! could not be sustained !ithout compensatin the rantor. 6ustice Brandeis filed a lone dissent in !hich

he arued that there !as a valid e=ercise of the police po!er. #e said7

Every restriction upon the use of property imposed in the e=ercise of the police po!er deprives

the o!ner of some riht theretofore en0oyed, and is, in that sense, an abridment by the 2tate of

rihts in property !ithout ma"in compensation. But restriction imposed to protect the public

health, safety or morals from daners threatened is not a ta"in. $he restriction here in 3uestion

is merely the prohibition of a no=ious use. $he property so restricted remains in the possession

of its o!ner. $he state does not appropriate it or ma"e any use of it. $he state merely prevents

the o!ner from ma"in a use !hich interferes !ith paramount rihts of the public. henever the

use prohibited ceases to be no=ious G as it may because of further chanes in local or social

conditions G the restriction !ill have to be removed and the o!ner !ill aain be free to en0oyhis property as heretofore.

Recent trends, ho!ever, !ould indicate not a polari&ation but a minlin of the police po!er and the po!er of

eminent domain, !ith the latter bein used as an implement of the former li"e the po!er of ta=ation. $he

employment of the ta=in po!er to achieve a police purpose has lon been accepted. 2As for the po!er of

e=propriation, Prof. 6ohn 6. Costonis of the Hniversity of Illinois Collee of *a! >referrin to the earlier case of

Euclid v. Ambler Realty Co., ;1; H2 9/, !hich sustained a &onin la! under the police po!er? ma"es the

follo!in sinificant remar"s7


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Euclid, moreover, !as decided in an era !hen 0udes located the Police and eminent domain

po!ers on different planets. (enerally spea"in, they vie!ed eminent domain as encompassin

public ac3uisition of private property for improvements that !ould be available for public use,)

literally construed. $o the police po!er, on the other hand, they assined the less intrusive tas"

of preventin harmful e=ternalities a point reflected in the Euclid opinion%s reliance on an

analoy to nuisance la! to bolster its support of &onin. 2o lon as suppression of a privately

authored harm bore a plausible relation to some leitimate )public purpose,) the pertinent

measure need have afforded no compensation !hatever. ith the proressive ro!th of

overnment%s involvement in land use, the distance bet!een the t!o po!ers has contracted

considerably. $oday overnment often employs eminent domain interchaneably !ith or as a

useful complement to the police po!er++ a trend e=pressly approved in the 2upreme Court%s

-/8 decision in Berman v. Par"er, !hich broadened the reach of eminent domain%s )public use)

test to match that of the police po!er%s standard of )public purpose.) 27

$he Berman case sustained a redevelopment pro0ect and the improvement of blihted areas in the :istrict of

Columbia as a proper e=ercise of the police po!er.


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not a mere limitation of the use of the land. hat is re3uired is the surrender of the title to and the physical

possession of the said e=cess and all beneficial rihts accruin to the o!ner in favor of the farmer+beneficiary.

$his is definitely an e=ercise not of the police po!er but of the po!er of eminent domain.

hether as an e=ercise of the police po!er or of the po!er of eminent domain, the several measures before

us are challened as violative of the due process and e3ual protection clauses.

$he challene to Proc. No. and E.? it must be based on substantial distinctionsD >;? it must be ermane to the purposes of the

la!D >? it must not be limited to e=istin conditions onlyD and >8? it must apply e3ually to all the members of the

class. &2$he Court finds that all these re3uisites have been met by the measures here challened as arbitrary

and discriminatory.

E3ual protection simply means that all persons or thins similarly situated must be treated ali"e both as to the

rihts conferred and the liabilities imposed. &&$he petitioners have not sho!n that they belon to a different

class and entitled to a different treatment. $he arument that not only lando!ners but also o!ners of other

properties must be made to share the burden of implementin land reform must be re0ected. $here is a

substantial distinction bet!een these t!o classes of o!ners that is clearly visible e=cept to those !ho !ill not

see. $here is no need to elaborate on this matter. In any event, the Conress is allo!ed a !ide lee!ay in

providin for a valid classification. Its decision is accorded reconition and respect by the courts of 0ustice

e=cept only !here its discretion is abused to the detriment of the Bill of Rihts.

It is !orth remar"in at this 0uncture that a statute may be sustained under the police po!er only if there is a

concurrence of the la!ful sub0ect and the la!ful method. Put other!ise, the interests of the public enerally as

distinuished from those of a particular class re3uire the interference of the 2tate and, no less important, the

means employed are reasonably necessary for the attainment of the purpose souht to be achieved and notunduly oppressive upon individuals. &4As the sub0ect and purpose of ararian reform have been laid do!n by

the Constitution itself, !e may say that the first re3uirement has been satisfied. hat remains to be e=amined

is the validity of the method employed to achieve the constitutional oal.


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e=aeration to say that a, person invo"in a riht uaranteed under Article III of the Constitution is a ma0ority

of one even as aainst the rest of the nation !ho !ould deny him that riht.

$hat riht covers the person%s life, his liberty and his property under 2ection of Article III of the Constitution.

ith reard to his property, the o!ner en0oys the added protection of 2ection -, !hich reaffirms the familiar

rule that private property shall not be ta"en for public use !ithout 0ust compensation.

$his brins us no! to the po!er of eminent domain.

I

Eminent domain is an inherent po!er of the 2tate that enables it to forcibly ac3uire private lands

intended for public use upon payment of 0ust compensation to the o!ner. as indeed no po!er is

absolute?. $he limitation is found in the constitutional in0unction that )private property shall not be ta"en for

public use !ithout 0ust compensation) and in the abundant 0urisprudence that has evolved from the

interpretation of this principle. Basically, the re3uirements for a proper e=ercise of the po!er are7 >? public use

and >;? 0ust compensation.

*et us dispose first of the arument raised by the petitioners in (.R. No. 1-@ that the 2tate should first

distribute public aricultural lands in the pursuit of ararian reform instead of immediately disturbin property

rihts by forcibly ac3uirin private aricultural lands. Parenthetically, it is not correct to say that only publicaricultural lands may be covered by the CARP as the Constitution calls for )the 0ust distribution of all

aricultural lands.) In any event, the decision to redistribute private aricultural lands in the manner prescribed

by the CARP !as made by the leislative and e=ecutive departments in the e=ercise of their discretion. e are

not 0ustified in revie!in that discretion in the absence of a clear sho!in that it has been abused.

A becomin courtesy admonishes us to respect the decisions of the political departments !hen they decide

!hat is "no!n as the political 3uestion. As e=plained by Chief 6ustice Concepcion in the case of $a-ada v.

Cuenco7 &

$he term )political 3uestion) connotes !hat it means in ordinary parlance, namely, a 3uestion of

policy. It refers to )those 3uestions !hich, under the Constitution, are to be decided by the

people in their soverein capacityD or in reard to !hich full discretionary authority has been

deleated to the leislative or e=ecutive branch of the overnment.) It is concerned !ith issues

dependent upon the !isdom, not leality, of a particular measure.

It is true that the concept of the political 3uestion has been constricted !ith the enlarement of 0udicial po!er,

!hich no! includes the authority of the courts )to determine !hether or not there has been a rave abuse of

discretion amountin to lac" or e=cess of 0urisdiction on the part of any branch or instrumentality of the

(overnment.) &7Even so, this should not be construed as a license for us to reverse the other departments

simply because their vie!s may not coincide !ith ours.


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$he leislature and the e=ecutive have been seen fit, in their !isdom, to include in the CARP the redistribution

of private landholdins >even as the distribution of public aricultural lands is first provided for, !hile also

continuin apace under the Public *and Act and other conate la!s?. $he Court sees no 0ustification to

interpose its authority, !hich !e may assert only if !e believe that the political decision is not un!ise, but

illeal. e do not find it to be so.

In .*. v. Chandler/Dunbar )ater Po+er Co&"any,&8it !as held7

Conress havin determined, as it did by the Act of March ,-@- that the entire 2t. Mary%s river

bet!een the American ban" and the international line, as !ell as all of the upland north of the

present ship canal, throuhout its entire lenth, !as )necessary for the purpose of naviation of

said !aters, and the !aters connected there!ith,) that determination is conclusive in

condemnation proceedins instituted by the Hnited 2tates under that Act, and there is no room

for 0udicial revie! of the 0udment of Conress ... .

As earlier observed, the re3uirement for public use has already been settled for us by the Constitution itself No

less than the -41 Charter calls for ararian reform, !hich is the reason !hy private aricultural lands are to

be ta"en from their o!ners, sub0ect to the prescribed ma=imum retention limits. $he purposes specified in P.:.

No. ;1, Proc. No. and R.A. No. 99/1 are only an elaboration of the constitutional in0unction that the 2tateadopt the necessary measures )to encourae and underta"e the 0ust distribution of all aricultural lands to

enable farmers !ho are landless to o!n directly or collectively the lands they till.) $hat public use, as

pronounced by the fundamental la! itself, must be bindin on us.

$he second re3uirement, i.e., the payment of 0ust compensation, needs a loner and more thouhtful

e=amination.

6ust compensation is defined as the full and fair e3uivalent of the property ta"en from its o!ner by the

e=propriator. &9It has been repeatedly stressed by this Court that the measure is not the ta"er%s ain but the

o!ner%s loss.4'$he !ord )0ust) is used to intensify the meanin of the !ord )compensation) to convey the idea

that the e3uivalent to be rendered for the property to be ta"en shall be real, substantial, full, ample. 41

It bears repeatin that the measures challened in these petitions contemplate more than a mere reulation of

the use of private lands under the police po!er. e deal here !ith an actual ta"in of private aricultural lands

that has dispossessed the o!ners of their property and deprived them of all its beneficial use and en0oyment,

to entitle them to the 0ust compensation mandated by the Constitution.

As held in !e"ublic o the Phili""ines v. Castellvi, 42there is compensable ta"in !hen the follo!in conditions

concur7 >? the e=propriator must enter a private propertyD >;? the entry must be for more than a momentary

periodD >? the entry must be under !arrant or color of leal authorityD >8? the property must be devoted to

public use or other!ise informally appropriated or in0uriously affectedD and >/? the utili&ation of the property for

public use must be in such a !ay as to oust the o!ner and deprive him of beneficial en0oyment of the property.

All these re3uisites are envisioned in the measures before us.

here the 2tate itself is the e=propriator, it is not necessary for it to ma"e a deposit upon its ta"in possession

of the condemned property, as )the compensation is a public chare, the ood faith of the public is pleded for

its payment, and all the resources of ta=ation may be employed in raisin the amount.) 4&Nevertheless,

2ection 9>e? of the CARP *a! provides that7

Hpon receipt by the lando!ner of the correspondin payment or, in case of re0ection or no

response from the lando!ner, upon the deposit !ith an accessible ban" desinated by the :AR


16/93

of the compensation in cash or in *BP bonds in accordance !ith this Act, the :AR shall ta"e

immediate possession of the land and shall re3uest the proper Reister of :eeds to issue a

$ransfer Certificate of $itle >$C$? in the name of the Republic of the Philippines. $he :AR shall

thereafter proceed !ith the redistribution of the land to the 3ualified beneficiaries.

d?,

!hich provides that in case of the re0ection or disreard by the o!ner of the offer of the overnment to buy his

land+

... the :AR shall conduct summary administrative proceedins to determine the compensation

for the land by re3uirin the lando!ner, the *BP and other interested parties to submit evidence

as to the 0ust compensation for the land, !ithin fifteen >/? days from the receipt of the notice.

After the e=piration of the above period, the matter is deemed submitted for decision. $he :AR

shall decide the case !ithin thirty >@? days after it is submitted for decision.

$o be sure, the determination of 0ust compensation is a function addressed to the courts of 0ustice and may not

be usurped by any other branch or official of the overnment. EPZA v. Dulay44resolved a challene to several

decrees promulated by President Marcos providin that the 0ust compensation for property undere=propriation should be either the assessment of the property by the overnment or the s!orn valuation

thereof by the o!ner, !hichever !as lo!er. In declarin these decrees unconstitutional, the Court held throuh

Mr. 6ustice #uo E. (utierre&, 6r.7

$he method of ascertainin 0ust compensation under the aforecited decrees constitutes

impermissible encroachment on 0udicial preroatives. It tends to render this Court inutile in a

matter !hich under this Constitution is reserved to it for final determination.

$hus, althouh in an e=propriation proceedin the court technically !ould still have the po!er to

determine the 0ust compensation for the property, follo!in the applicable decrees, its tas"

!ould be releated to simply statin the lo!er value of the property as declared either by theo!ner or the assessor. As a necessary conse3uence, it !ould be useless for the court to

appoint commissioners under Rule 91 of the Rules of Court. Moreover, the need to satisfy the

due process clause in the ta"in of private property is seeminly fulfilled since it cannot be said

that a 0udicial proceedin !as not had before the actual ta"in. #o!ever, the strict application of

the decrees durin the proceedins !ould be nothin short of a mere formality or charade as

the court has only to choose bet!een the valuation of the o!ner and that of the assessor, and

its choice is al!ays limited to the lo!er of the t!o. $he court cannot e=ercise its discretion or

independence in determinin !hat is 0ust or fair. Even a rade school pupil could substitute for

the 0ude insofar as the determination of constitutional 0ust compensation is concerned.

= = =

In the present petition, !e are once aain confronted !ith the same 3uestion of !hether the

courts under P.:. No. /, !hich contains the same provision on 0ust compensation as its

predecessor decrees, still have the po!er and authority to determine 0ust compensation,

independent of !hat is stated by the decree and to this effect, to appoint commissioners for

such purpose.

$his time, !e ans!er in the affirmative.


17/93

= = =

It is violative of due process to deny the o!ner the opportunity to prove that the valuation in the

ta= documents is unfair or !ron. And it is repulsive to the basic concepts of 0ustice and fairness

to allo! the hapha&ard !or" of a minor bureaucrat or cler" to absolutely prevail over the

0udment of a court promulated only after e=pert commissioners have actually vie!ed the

property, after evidence and aruments pro and con have been presented, and after all factors

and considerations essential to a fair and 0ust determination have been 0udiciously evaluated.

A readin of the aforecited 2ection 9>d? !ill readily sho! that it does not suffer from the arbitrariness that

rendered the challened decrees constitutionally ob0ectionable. Althouh the proceedins are described as

summary, the lando!ner and other interested parties are nevertheless allo!ed an opportunity to submit

evidence on the real value of the property. But more importantly, the determination of the 0ust compensation by

the :AR is not by any means final and conclusive upon the lando!ner or any other interested party, for 2ection

9>f? clearly provides7

Any party !ho disarees !ith the decision may brin the matter to the court of proper

0urisdiction for final determination of 0ust compensation.

$he determination made by the :AR is only preliminary unless accepted by all parties concerned. ? Cash payment, under the follo!in terms and conditions7

>a? 'or lands above fifty >/@? hectares, insofar as the e=cess

hectarae is concerned G $!enty+five percent >;/? cash, the

balance to be paid in overnment financial instruments neotiable

at any time.

>b? 'or lands above t!enty+four >;8? hectares and up to fifty >/@?

hectares G $hirty percent >@? cash, the balance to be paid in

overnment financial instruments neotiable at any time.

>c? 'or lands t!enty+four >;8? hectares and belo! G $hirty+five

percent >/? cash, the balance to be paid in overnment

financial instruments neotiable at any time.


18/93

>;? 2hares of stoc" in overnment+o!ned or controlled corporations, *BP preferred shares,

physical assets or other 3ualified investments in accordance !ith uidelines set by the PARCD

>? $a= credits !hich can be used aainst any ta= liabilityD

>8? *BP bonds, !hich shall have the follo!in features7

>a? Mar"et interest rates alined !ith -+day treasury bill rates.

$en percent >@? of the face value of the bonds shall mature

every year from the date of issuance until the tenth >@th? year7

Provided, $hat should the lando!ner choose to foreo the cash

portion, !hether in full or in part, he shall be paid correspondinly

in *BP bondsD

>b? $ransferability and neotiability. 2uch *BP bonds may be used

by the lando!ner, his successors+in+ interest or his assins, up to

the amount of their face value, for any of the follo!in7

>i? Ac3uisition of land or other real properties of the overnment,includin assets under the Asset Privati&ation Proram and other

assets foreclosed by overnment financial institutions in the same

province or reion !here the lands for !hich the bonds !ere paid

are situatedD

>ii? Ac3uisition of shares of stoc" of overnment+o!ned or

controlled corporations or shares of stoc" o!ned by the

overnment in private corporationsD

>iii? 2ubstitution for surety or bail bonds for the provisional release

of accused persons, or for performance bondsD

>iv? 2ecurity for loans !ith any overnment 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 reion as the land for !hich the

bonds are paidD

>v? Payment for various ta=es and fees to overnment7 Provided,

$hat the use of these bonds for these purposes !ill be limited to a

certain percentae of the outstandin balance of the financial

instrumentsD Provided, further, $hat the PARC shall determine thepercentaes mentioned aboveD

>vi? Payment for tuition fees of the immediate family of the oriinal

bondholder in overnment universities, collees, trade schools,

and other institutionsD

>vii? Payment for fees of the immediate family of the oriinal

bondholder in overnment hospitalsD and

>viii? 2uch other uses as the PARC may from time to time allo!.


19/93

$he contention of the petitioners in (.R. No. 1-111 is that the above provision is unconstitutional insofar as it

re3uires the o!ners of the e=propriated properties to accept 0ust compensation therefor in less than money,

!hich is the only medium of payment allo!ed. In support of this contention, they cite 0urisprudence holdin

that7

$he fundamental rule in e=propriation matters is that the o!ner of the property e=propriated is

entitled to a 0ust compensation, !hich should be neither more nor less, !henever it is possible

to ma"e the assessment, than the money e3uivalent of said property. 6ust compensation has

al!ays been understood to be the 0ust and complete e3uivalent of the loss !hich the o!ner of

the thin e=propriated has to suffer by reason of the e=propriation . 4>Emphasis supplied.?

In 6.M. $ua&on Co. v. *and $enure Administration, 4this Court held7

It is !ell+settled that 0ust compensation means the e3uivalent for the value of the property at the

time of its ta"in. Anythin beyond that is more, and anythin short of that is less, than 0ust

compensation. It means a fair and full e3uivalent for the loss sustained, !hich is the measure of

the indemnity, not !hatever ain !ould accrue to the e=propriatin entity. $he mar"et value of

the land ta"en is the 0ust compensation to !hich the o!ner of condemned property is entitled,

the mar"et value bein that sum of money !hich a person desirous, but not compelled to buy,and an o!ner, !illin, but not compelled to sell, !ould aree on as a price to be iven and

received for such property. >Emphasis supplied.?

In the Hnited 2tates, !here much of our 0urisprudence on the sub0ect has been derived, the !eiht of authority

is also to the effect that 0ust compensation for property e=propriated is payable only in money and not

other!ise. $hus G

$he medium of payment of compensation is ready money or cash. $he condemnor cannot

compel the o!ner to accept anythin but money, nor can the o!ner compel or re3uire the

condemnor to pay him on any other basis than the value of the property in money at the time

and in the manner prescribed by the Constitution and the statutes. hen the po!er of eminentdomain is resorted to, there must be a standard medium of payment, bindin upon both parties,

and the la! has fi=ed that standard as money in cash. 47>Emphasis supplied.?

Part cash and deferred payments are not and cannot, in the nature of thins, be rearded as a

reliable and constant standard of compensation. 48

)6ust compensation) for property ta"en by condemnation means a fair e3uivalent in money,

!hich must be paid at least !ithin a reasonable time after the ta"in, and it is not !ithin the

po!er of the *eislature to substitute for such payment future obliations, bonds, or other

valuable advantae. 49>Emphasis supplied.?

It cannot be denied from these cases that the traditional medium for the payment of 0ust compensation is

money and no other. And so, conformably, has 0ust compensation been paid in the past solely in that medium.

#o!ever, !e do not deal here !ith the traditional e=cercise of the po!er of eminent domain. $his is not an

ordinary e=propriation !here only a specific property of relatively limited area is souht to be ta"en by the 2tate

from its o!ner for a specific and perhaps local purpose.

hat !e deal !ith here is a revolutionary "ind of e=propriation.


20/93

$he e=propriation before us affects all private aricultural lands !henever found and of !hatever "ind as lon

as they are in e=cess of the ma=imum retention limits allo!ed their o!ners. $his "ind of e=propriation is

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

entire 'ilipino nation, from all levels of our society, from the impoverished farmer to the land+lutted o!ner. Its

purpose does not cover only the !hole territory of this country but oes beyond in time to the foreseeable

future, !hich it hopes to secure and edify !ith the vision and the sacrifice of the present eneration of 'ilipinos.

(enerations yet to come are as involved in this proram as !e are today, althouh hopefully only as

beneficiaries of a richer and more fulfillin life !e !ill uarantee to them tomorro! throuh our thouhtfulness

today. And, finally, let it not be forotten that it is no less than the Constitution itself that has ordained this

revolution in the farms, callin for )a 0ust distribution) amon the farmers of lands that have heretofore been the

prison of their dreams but can no! become the "ey at least to their deliverance.

2uch a proram !ill involve not mere millions of pesos. $he cost !ill be tremendous. Considerin the vast

areas of land sub0ect to e=propriation under the la!s before us, !e estimate that hundreds of billions of pesos

!ill be needed, far more indeed than the amount of P/@ billion initially appropriated, !hich is already

staerin as it is by our present standards. 2uch amount is in fact not even fully available at this time.

e assume that the framers of the Constitution !ere a!are of this difficulty !hen they called for ararian

reform as a top priority pro0ect of the overnment. It is a part of this assumption that !hen they envisioned thee=propriation that !ould be needed, they also intended that the 0ust compensation !ould have to be paid not in

the orthodo= !ay but a less conventional if more practical method. $here can be no doubt that they !ere

a!are of the financial limitations of the overnment and had no illusions that there !ould be enouh money to

pay in cash and in full for the lands they !anted to be distributed amon the farmers. e may therefore

assume that their intention !as to allo! such manner of payment as is no! provided for by the CARP *a!,

particularly the payment of the balance >if the o!ner cannot be paid fully !ith money?, or indeed of the entire

amount of the 0ust compensation, !ith other thins of value. e may also suppose that !hat they had in mind

!as a similar scheme of payment as that prescribed in P.:. No. ;1, !hich !as the la! in force at the time they

deliberated on the ne! Charter and !ith !hich they presumably areed in principle.

$he Court has not found in the records of the Constitutional Commission any cateorical areement amon the

members reardin the meanin to be iven the concept of 0ust compensation as applied to the

comprehensive ararian reform proram bein contemplated. $here !as the suestion to )fine tune) the

re3uirement to suit the demands of the pro0ect even as it !as also felt that they should )leave it to Conress) to

determine ho! payment should be made to the lando!ner and reimbursement re3uired from the farmer+

beneficiaries. 2uch innovations as )proressive compensation) and )2tate+subsidi&ed compensation) !ere

also proposed. In the end, ho!ever, no special definition of the 0ust compensation for the lands to be

e=propriated !as reached by the Commission. '


21/93

entire proram, "illin the farmer%s hopes even as they approach reali&ation and resurrectin the spectre of

discontent and dissent in the restless countryside. $hat is not in our vie! the intention of the Constitution, and

that is not !hat !e shall decree today.

Acceptin the theory that payment of the 0ust compensation is not al!ays re3uired to be made fully in money,

!e find further that the proportion of cash payment to the other thins of value constitutin the total payment,

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

lando!ner. It is noted that the smaller the land, the bier the payment in money, primarily because the small

lando!ner !ill be needin it more than the bi lando!ners, !ho can afford a bier balance in bonds and other

thins of value. No less importantly, the overnment financial instruments ma"in up the balance of the

payment are )neotiable at any time.) $he other modes, !hich are li"e!ise available to the lando!ner at his

option, are also not unreasonable because payment is made in shares of stoc", *BP bonds, other properties or

assets, ta= credits, and other thins of value e3uivalent to the amount of 0ust compensation.

Admittedly, the compensation contemplated in the la! !ill cause the lando!ners, bi and small, not a little

inconvenience. As already remar"ed, this cannot be avoided. Nevertheless, it is devoutly hoped that these

countrymen of ours, conscious as !e "no! they are of the need for their forebearance and even sacrifice, !ill

not berude us their indispensable share in the attainment of the ideal of ararian reform. Emphasis supplied.?

In Jennedy v. Indianapolis, &the H2 2upreme Court cited several cases holdin that title to property does not

pass to the condemnor until 0ust compensation had actually been made. In fact, the decisions appear to be

uniformly to this effect. As early as 44, in !ubotto& v. Mc%ure, 4it !as held that )actual payment to the

o!ner of the condemned property !as a condition precedent to the investment of the title to the property in the

2tate) albeit )not to the appropriation of it to public use.) In!e0ord v. 1ni(ht,the Court of Appeals of Ne!

or" said that the construction upon the statutes !as that the fee did not vest in the 2tate until the payment of

the compensation althouh the authority to enter upon and appropriate the land !as complete prior to the


22/93

payment. Jennedy further said that )both on principle and authority the rule is ... that the riht to enter on and

use the property is complete, as soon as the property is actually appropriated under the authority of la! 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


23/93


24/93

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 12787 D-6/ 17, 1999

ROAS % CO., INC., petitioner,vs.TE ONORA"LE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM, SECRETAR$ OFAGRARIAN REFORM, DAR REGIONAL DIRECTOR FOR REGION I#, MUNICIPAL AGRARIAN REFORMOFFICER OF NASUG"U, "ATANGAS ()* DEPARTMENT OF AGRARIAN REFORM ADJUDICATION"OARD,respondents.

PUNO, J.:

$his case involves three >? haciendas in Nasubu, Batanas o!ned by petitioner and the validity of theac3uisition of these haciendas by the overnment under Republic Act No. 99/1, the Comprehensive ArarianReform *a! of -44.

Petitioner Ro=as K Co. is a domestic corporation and is the reistered o!ner of three haciendas, namely,#aciendas Palico, Banilad and Cayla!ay, all located in the Municipality of Nasubu, Batanas. #aciendaPalico is ,@;8 hectares in area and is reistered under $ransfer Certificate of $itle >$C$? No. -4/. $his land iscovered by $a= :eclaration Nos. @89/, @899, @894, @81@, @;8 and @/8. #acienda Banilad is ,@/@ hectaresin area, reistered under $C$ No. -;8 and covered by $a= :eclaration Nos. @;9, @;1 and @-@. #aciendaCayla!ay is 491.8/1 hectares in area and is reistered under $C$ Nos. $+8899;, $+8899, $+88998 and $+8899/.

$he events of this case occurred durin the incumbency of then President Cora&on C. A3uino. In 'ebruary-49, President A3uino issued Proclamation No. promulatin a Provisional Constitution. As head of theprovisional overnment, the President e=ercised leislative po!er )until a leislature is elected and convenedunder a ne! Constitution.) 1In the e=ercise of this leislative po!er, the President sined on 6uly ;;, -41,Proclamation No. institutin a Comprehensive Ararian Reform Proram and E=ecutive


25/93

Palico, !hich !as )scheduled for compulsory ac3uisition this year under the Comprehensive Ararian ReformProram.) 4

@+4 slope?) and actually occupied and cultivated by 8 tillersof suarcane. In the second Report, the MAR< identified as )flat to undulatin) appro=imately - hectaresunder $a=:eclaration No. @;8 !hich also had several actual occupants and tillers of suarcaneD !hile in thethird Report, the MAR< found appro=imately 1/ hectare under $a= :eclaration No. @/8 as )flat to undulatin)!ith actual occupants and tillersalso of suarcane. 7


26/93


27/93

8? titles G $C$ Nos. $+8899;, $+8899, $+88998 and $+8899/. ;? separate Resolutions acceptin petitioner%s voluntary offer to sell#acienda Cayla!ay, particularly $C$ Nos. $+88998 and $+8899. &'$he Resolutions !ere addressed to7

Ro=as K Company, Inc.

1th 'lr. Cacho+(on&ales Bld.

Auirre, *easpi illae

Ma"ati, M. M &1


28/93

8? *etter dated :ecember /, --; issued by Reynaldo H. (arcia of the Municipal Plannin K:evelopment, Coordinator and :eputi&ed Lonin Administrator addressed to Mrs. Alicia P.*oarta advisin that the Municipality of Nasubu, Batanas has no ob0ection to the conversionof the lands sub0ect of referenced titles to non+aricultural. &7

BA? !ith respondent :AR Ad0udication Board>:ARAB? prayin for the cancellation of the C*


29/93

N? !hen the 3uestion raised is purely lealD >;? !hen the administrative body is inestoppelD >? !hen the act complained of is patently illealD >8? !hen there is urent need for 0udicialinterventionD >/? !hen the respondent acted in disreard of due processD >9? !hen the respondent is adepartment secretary !hose acts, as an alter eo of the President, bear the implied or assumed approval ofthe latterD >1? !hen irreparable damae !ill be sufferedD >4? !hen there is no other plain, speedy and ade3uate

remedyD >-? !hen stron public interest is involvedD >@? !hen the sub0ect of the controversy is private landDand >? in 9uo +arrantoproceedins. 42

Petitioner rihtly souht immediate redress in the courts. $here !as a violation of its rihts and to re3uire it toe=haust administrative remedies before the :AR itself !as not a plain, speedy and ade3uate remedy.

Respondent :AR issued Certificates of *and C*

$here!as no receipt by petitioner of any compensation for any of the lands ac3uired by the overnment.

$he "ind of compensation to be paid the lando!ner is also specific. $he la! provides that the deposit must bemade only in )cash) or )*BP bonds.) 4Respondent :AR%s openin of trust account deposits in petitioner% sname !ith the *and Ban" of the Philippines does not constitute payment under the la!. $rust account depositsare not cash or *BP bonds. $he replacement of the trust account !ith cash or *BP bonds did not i"soactocure the lac" of compensationD for essentially, the determination of this compensation !as marred by lac"of due process. In fact, in the entire ac3uisition proceedins, respondent :AR disrearded the basicre3uirements of administrative due process. Hnder these circumstances, the issuance of the C*


30/93

2ec. 9. Procedure or Ac9uisition o Private %ands. G 'or purposes of ac3uisition of privatelands, the follo!in procedures shall be follo!ed7

a?.Ater havin( identiied the land, the lando+ners and the beneiciaries, theDA! shall send its notice to ac9uire the land to the o+ners thereo, by "ersonaldelivery or re(istered &ail, and "ost the sa&e in a cons"icuous "lace in themunicipal buildin and baranay hall of the place !here the property is located.2aid notice shall contain the offer of the :AR to pay a correspondin value inaccordance !ith the valuation set forth in 2ections 1, 4, and other pertinentprovisions hereof.

b? ithin thirty >@? days from the date of receipt of !ritten notice by personaldelivery or reistered mail, the lando!ner, his administrator or representativeshall inform the :AR of his acceptance or re0ection of the offer.

c? If the lando!ner accepts the offer of the :AR, the *BP shall pay the lando!nerthe purchase price of the land !ithin thirty >@? days after he e=ecutes anddelivers a deed of transfer in favor of the (overnment and surrenders theCertificate of $itle and other muniments of title.

d? In case of re0ection or failure to reply, the :AR shall conduct summaryadministrative proceedins to determine the compensation for the land re3uirinthe lando!ner, the *BP and other interested parties to submit evidence as to the

0ust compensation for the land, !ithin fifteen >/? days from receipt of the notice.After the e=piration of the above period, the matter is deemed submitted fordecision. $he :AR shall decide the case !ithin thirty >@? days after it issubmitted for decision.

e? Hpon receipt by the lando!ner of the correspondin payment, or, in case ofre0ection or no response from the lando!ner, upon the deposit !ith an accessibleban" desinated by the :AR of the compensation in cash or in *BP bonds inaccordance !ith this Act, the :AR shall ta"e immediate possession of the land

and shall re3uest the proper Reister of :eeds to issue a $ransfer Certificate of$itle >$C$? in the name of the Republic of the Philippines. $he :AR shallthereafter proceed !ith the redistribution of the land to the 3ualified beneficiaries.

f? Any party !ho disarees !ith the decision may brin the matter to the court ofproper 0urisdiction for final determination of 0ust compensation.

In the compulsory ac3uisition of private lands, the landholdin, the lando!ners and the farmer beneficiariesmust first be identified. After identification, the :AR shall send a Notice of Ac3uisition to the lando!ner, bypersonal delivery or reistered mail, and post it in a conspicuous place in the municipal buildin and baranayhall of the place !here the property is located. ithin thirty days from receipt of the Notice of Ac3uisition, thelando!ner, his administrator or representative shall inform the :AR of his acceptance or re0ection of the offer. If

the lando!ner accepts, he e=ecutes and delivers a deed of transfer in favor of the overnment and surrendersthe certificate of title. ithin thirty days from the e=ecution of the deed of transfer, the *and Ban" of thePhilippines >*BP? pays the o!ner the purchase price. If the lando!ner re0ects the :AR%s offer or fails to ma"e areply, the :AR conducts summary administrative proceedins to determine 0ust compensation for the land. $helando!ner, the *BP representative and other interested parties may submit evidence on 0ust compensation!ithin fifteen days from notice. ithin thirty days from submission, the :AR shall decide the case and informthe o!ner of its decision and the amount of 0ust compensation. Hpon receipt by the o!ner of the correspondinpayment, or, in case of re0ection or lac" of response from the latter, the :AR shall deposit the compensation incash or in *BP bonds !ith an accessible ban". $he :AR shall immediately ta"e possession of the land andcause the issuance of a transfer certificate of title in the name of the Republic of the Philippines. $he land shallthen be redistributed to the farmer beneficiaries. Any party may 3uestion the decision of the :AR in the reularcourts for final determination of 0ust compensation.


31/93

$he :AR has made compulsory ac3uisition the priority mode of the land ac3uisition to hasten theimplementation of the Comprehensive Ararian Reform Proram >CARP?. 4Hnder 2ection 9 of the CAR*,the first step in compulsory ac3uisition is the identification of the land, the lando!ners and thebeneficiaries. 8o+ever,the la+ is silent on ho+ the identiication "rocess &ust be &ade.$o ill in this (a",theDA! issued on 6uly >;, ?@@ Ad&inistrative :rder No.?>, *eries or ?@@, +hich set the o"eratin( "rocedure inthe identiication o such lands. $he procedure is as follo!s7

II. CAC'? for each title>


32/93

;. Immediately upon receipt of a case folder, compute the valuation of the land inaccordance !ith A.


33/93

$he MAR< shall ma"e a report of the case to the Provincial Ararian Reform PAR


34/93

b? Intervie! applicants and assist them in thepreparation of the Application 'or Potential CARPBeneficiary >CARP 'orm No. ?.

c? 2creen prospective farmer+beneficiaries and forthose found 3ualified, cause the sinin of therespective Application to Purchase and 'armer%sHnderta"in >CARP 'orm No. 8?.

d? Complete the 'ield Investiation Report basedon the result of the ocular inspectioninvestiationof the property and documents submitted. 2ee to itthat 'ield Investiation Report is duly accomplishedand sined by all concerned.

/. MAR*BP?D

b. $hose !ere a Conversion


53/93

In addition to the :AR circulars and orders !hich :AR itself has not observed, the petitioner has submitted amunicipal map of Nasubu, Batanas >Anne= )E), Manifestation dated 6uly ;, ---?. $he eoraphicallocation of Palico, Banilad, and Cayla!ay in relation to the (:'I property, no! Batulao $ourist Resort, sho!sthat the properties sub0ect of this case are e3ually, if not more so, appropriate for conversion as the (:'Iresort.

Petitioner%s application for the conversion of its lands from aricultural to non+aricultural !as meant to stop the:AR from proceedin !ith the compulsory ac3uisition of the lands and to see" a clear and authoritativedeclaration that said lands are outside of the coverae of the CAR* and can not be sub0ected to ararianreform.

Petitioner assails respondent%s refusal to convert its lands to non+aricultural use and to reconi&e PresidentialProclamation No. /;@, statin that respondent :AR has not been consistent in its treatment of applications ofthis nature. It points out that in the other case involvin ad0oinin lands in Nasubu, Batanas, respondent:AR ordered the conversion of the lands upon application of (roup :evelopers and 'inanciers, Inc.Respondent :AR, in that case, issued an ;8- 2CRA 8-, at /1 --/?, this Court struc" do!n as null and void :AR Administrative CircularNo. -, 2eries of --@, !hich provides for the openin of trust accounts in lieu of the deposit in cash or in bondscontemplated in 2ection 9 >e? of RA 99/1.


54/93

It is very e=plicit therefrom >2ection 9 e? that the deposit must be made only in )cash) or in)*BP bonds.) No!here does it appear nor can it be inferred that the deposit can be made in anyother form. If it !ere the intention to include a )trust account) amon the valid modes of deposit,that should have been made e=press, or at least, 3ualifyin !ords ouht to have appeared from!hich it can be fairly deduced that a )trust account) is allo!ed. In sum, there is no ambiuity in2ection 9>e? of RA 99/1 to !arrant an e=panded construction of the term )deposit.)

=== === ===

In the present suit, the :AR clearly overstepped the limits of its po!ers to enact rules andreulations !hen it issued Administrative Circular No. -. $here is no basis in allo!in theopenin of a trust account in behalf of the lando!ner as compensation for his property because,as heretofore discussed, section 9>e? of RA 99/1 is very specific that the deposit must bemade only in )cash) or in )*BP bonds.) In the same vein, petitioners cannot invo"e *RA CircularNos. ;-, ;-+A and /8 because these implementin reulations cannot out!eih the clearprovision of the la!. Respondent court therefore did not commit any error in stri"in do!n

Administrative Circular No. - for bein null and void.

$here bein no valid payment of 0ust compensation, title to petitioner%s landholdins cannot be validlytransferred to the (overnment. A close scrutiny of the procedure laid do!n in 2ection 9 of RA 99/1 sho!s the

clear leislative intent that there must first be payment of the fair value of the land sub0ect to ararian reform,either directly to the affected lando!ner or by deposit of cash or *BP bonds in the :AR+desinated ban",before the :AR can ta"e possession of the land and re3uest the reister of deeds to issue a transfer certificateof title in the name of the Republic of the Philippines. $his is only proper inasmuch as title to private propertycan only be ac3uired by the overnment after payment of 0ust compensation InAssociation o *&all%ando+ners in the Phili""ines v.*ecretary o A(rarian !eor&>1/ 2CRA 8, - -4-?, this Court held7

$he CARP *a!, for its part, conditions the transfer of possession and o!nership of the land tothe overnment on receipt of the lando!ner of the correspondin payment or the deposit by the:AR of the compensation in cash or *BP bonds !ith an accessible ban". Hntil then, title alsoremains !ith the lando!ner. No outriht chane of o!nership is contemplated either.

Necessarily, the issuance of the C*Constitution, Art.III, 2ec. -?. #ence, to deprive petitioner of the benefit of the %and 'ank rulin on the mere e=pedient that itcame later than the actual e=propriation !ould be repunant to petitioner%s fundamental rihts.

$he controllin last t!o >;? paes of the"onenciastate7

'inally, !e stress that the failure of respondent :AR to comply !ith the re3uisites of dueprocess in the ac3uisition proceedins does not ive this Court the po!er to nullify the C*


55/93

these farmers have been cultivatin their lands. It oes aainst the basic precepts of 0ustice,fairness and e3uity to deprive these people, throuh no fault of their o!n, of the land they till.

Anyho!, the farmer beneficiaries hold the property in trust for the rihtful o!ner of the land.

I disaree !ith the vie! that this Court cannot nullify illeally issued C*Resolution dated 6anuary 1, --1, p. 9?

:AR Administrative issued on Auust 4, --9D Anne= )') of Petitioner%sManifestation? outlines the procedure for the reconveyance to lando!ners of properties found to be outside thecoverae of CARP. :AR itself ac"no!ledes that they can administratively cancel C*


56/93

;. 8as as conti(uous "ro"erties t+o haciendas o !o0as y Ciaand found by Ararian Reform$eam *eader Benito iray to be )enerally rollin, hilly and mountainous and strudded >sic? !ithlon and narro! rides and deep ores. Ravines are steep rade endin in lo! dry cree"s.)

. Is found in an. area !here )it is 3uite difficult to provide statistics on rice and corn yieldsbecause there are no permanent sites planted. Cultivation is by 1ain(inMethod.)

8. #s conti(uous to !o0as Pro"erties in the sa&e area +here 3the "eo"le entered the "ro"ertysurre"titiously and +ere diicult to sto"because of the !ide area of the t!o haciendas and thatthe principal crop of the area is suar . . ..) >emphasis supplied?.

I aree !ith petitioner that under :AR A< No. @, 2eries of --9, and unli"e lands covered by $orrens $itles,the properties fallin under improperly issued C*


57/93

In the recent case of )8on. Carlos :. Fortich, et.al.vs. 8on. !enato C. Corona, et.al.) >(.R. No. 8/1, April;8, --4?, this Court found the C*


58/93

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

HACIENDA LUISITA, INCORPORATED,

Petitioner,

LUISITA INDUSTRIAL PARK CORPORATION

and RIZAL COMMERCIAL BANKING

CORPORATION,

Petitioners-in-Interention,

- ersus -

PRESIDENTIAL AGRARIAN REFORM

COUNCIL; SECRETARY NASSER

PANGANDAMAN OF THE DEPARTMENT OF

AGRARIAN REFORM; ALYANSA NG MGAMANGGAGAWANG BUKID NG HACIENDA

LUISITA, RENE GALANG, NOEL MALLARI,

and JULIO SUNIGA!"#and hi SUPER!ISORY

GROUP OF THE HACIENDA LUISITA, INC"

and WINDSOR ANDAYA,

Respon$ents%

G"R" N#" $%$$&$

Present&

CORONA,C.J.,

CARPIO,

'E(ASCO, )R%,

(EONAR*O-*E CASTRO,

BRION,

PERA(TA,

BERSAMIN,

*E( CASTI((O,

ABA*,

'I((ARAMA, )R%,PERE+,

MEN*O+A, an$

SERENO,

REES,

PER(AS-BERNABE,JJ%

Proul.ate$&

Noeber //, /0""

1-----------------------------------------------------------------------------------------1

R E S O L U T I O N

!ELASCO, JR",J"'

2or resolution are the 3"4Motion for Clarification and Partial Reconsideration$ate$ )ul5 /", /0"" file$ b5

petitioner 6acien$a (uisita, Inc% 36(I47 3/4Motion for Partial Reconsideration$ate$ )ul5 /0, /0"" file$ b5 public

respon$ents Presi$entialA.rarian Refor Council 3PARC4 an$ *epartent of A.rarian Refor 3*AR47 384Motion for

Reconsideration$ate$ )ul5 "9, /0"" file$ b5 priate respon$ent Al5ansa n. .a Man..a.a:an. Bu;i$ sa 6acien$a

(uisita 3AMBA(A47 3


59/93

A.rarian Refor Moeent, Inc% 32ARM47 3=4Motion for Reconsideration$ate$ )ul5 /", /0"" file$ b5 priate

respon$ents Noel Mallari, )ulio Suni.a, Superisor5 >roup of 6acien$a (uisita, Inc% 3Superisor5 >roup4

an$ ?in$sor An$a5a 3collectiel5 referre$ to as @Mallari, et al%47 an$ 34 Motion for Reconsideration$ate$ )ul5 //, /0""

file$ b5 priate respon$ents Rene >alan. an$ AMBA(A%!/#

On )ul5 =, /0"", this Court proul.ate$ a *ecision!8#in the aboe-captione$ case, $en5in. the petition file$ b5

6(I an$ affirin. Presi$ential A.rarian Refor Council 3PARC4 Resolution No% /00=-8/-0" $ate$ *eceber //, /00=

an$ PARC Resolution No% /00-8INA( 2?Bs

O2 ,/9 T6E UNSPENT OR UNUSE* BA(ANCE O2 T6E PROCEE*S O2 T6E SA(E O2 T6E=00 6ECTARES AN* 0%=" 6ECTARES O2 T6E 6(I (AN*, BECAUSE&

3"4 T6E PROCEE*S O2 T6E SA(E BE(ON> TO T6E CORPORATION, 6(I, AS CORPORATE

CAPITA( AN* ASSETS INSUBSTITUTION 2OR T6E PORTIONS O2 ITS (AN* ASSET ?6IC6

?ERE SO(* TO T6IR* PART7

3/4 TO *ISTRIBUTE T6E CAS6 SA(ES PROCEE*S O2 T6E PORTIONS O2 T6E (AN* ASSET

TO T6E 2?Bs, ?6O ARE STOCF6O(*ERS O2 6(I, IS TO *ISSO('E T6E CORPORATION

AN* *ISTRIBUTE T6E PROCEE*S AS (IDUI*ATIN> *I'I*EN*S ?IT6OUT E'EN PAIN>

T6E CRE*ITORS O2 T6E CORPORATION7

384 T6E *OIN> O2 SAI* ACTS ?OU(* 'IO(ATE T6E STRIN>ENT PRO'ISIONS O2

T6E CORPORATION CO*E AN* CORPORATE PRACTICE%

B

IT IS NOT PROPER, EIT6ER IN (A? OR IN EDUIT, TO RECFON T6E PAMENT O2 )USTCOMPENSATION 2ROM NO'EMBER /", "99 ?6EN T6E PARC, T6EN UN*ER T6E

C6AIRMANS6IP O2 *AR SECRETAR MIRIAM *E2ENSOR-SANTIA>O, APPRO'E* T6ESTOCF *ISTRIBUTION P(AN 3S*P4 PROPOSE* B TA*ECOG6(I, BECAUSE&

3"4 T6AT PARC RESO(UTION NO% 9-"/-/ *ATE* NO'EMBER /", "99 ?AS NOT T6E

@ACTUA( TAFIN> O2 T6E TA*ECOHsG6(IHs A>RICU(TURA( (AN*7

3/4 T6E RECA(( OR RE'OCATION UN*ER RESO(UTION NO% /00=-8/-0" O2 T6AT S*P B

T6E NE? PARC UN*ER T6E C6AIRMANS6IP O2 *AR SECRETAR NASSER

PAN>AN*AMAN ON *ECEMBER //, /00= OR " EARS EAR(IER ?6EN T6E S*P ?AS

APPRO'E* *I* NOT RESU(T IN @ACTUA( TAFIN> ON NO'EMBER /", "997

384 TO PA T6E )UST COMPENSATION AS O2 NO'EMBER /", "99 OR // EARS BACF

?OU(* BE ARBITRAR, UN)UST, AN* OPPRESSI'E, CONSI*ERIN> T6E IMPRO'EMENTS,EPENSES IN T6E MAINTENANCE AN* PRESER'ATION O2 T6E (AN*, AN* RISE IN (AN*

PRICES OR 'A(UE O2 T6E PROPERT%

On the other han$, PARC an$ *AR, throu.h the Office of the Solicitor >eneral 3OS>4, raise the follo:in. issues

in theirMotion for Partial Reconsideration$ate$ )ul5 /0, /0""&

T6E *OCTRINE O2 OPERATI'E 2ACT *OES NOT APP( TO T6IS CASE 2OR T6E

2O((O?IN> REASONS&

I
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60/93

T6ERE IS NO (A? OR RU(E ?6IC6 6AS BEEN IN'A(I*ATE* ON T6E >ROUN* O2

UNCONSTITUTIONA(IT7 AN*

II

T6IS *OCTRINE IS A RU(E O2 EDUIT ?6IC6 MA BE APP(IE* ON( IN T6E ABSENCE O2

A (A?% IN T6IS CASE, T6ERE IS A POSITI'E (A? ?6IC6 MAN*ATES T6E *ISTRIBUTION

O2 T6E (AN* AS A RESU(T O2 T6E RE'OCATION O2 T6E STOCF *ISTRIBUTION P(AN

3S*P4%

2or its part, AMBA(A poses the follo:in. issues in itsMotion for Reconsideration$ate$ )ul5 "9, /0""&

I

T6E MA)ORIT O2 T6E MEMBERS O2 T6E 6ONORAB(E COURT, ?IT6 *UE RESPECT,

ERRE* IN 6O(*IN> T6AT SECTION 8" O2 REPUB(IC ACT =J 3RA =J4 IS

CONSTITUTIONA(%

II

T6E MA)ORIT O2 T6E MEMBERS O2 T6E 6ONORAB(E COURT, ?IT6 *UE RESPECT,ERRE* IN 6O(*IN> T6AT ON( T6E !PARCHS# APPRO'A( O2 6(IHs PROPOSA( 2OR STOCF

*ISTRIBUTION UN*ER CARP AN* T6E !S*P# ?ERE RE'OFE* AN* NOT T6E STOCF

*ISTRIBUTION OPTION A>REEMENT 3S*OA4%

III


ERRE* IN APP(IN> T6E *OCTRINE O2 OPERATI'E 2ACTS AN* IN MAFIN> T6E !2?Bs#

C6OOSE TO OPT 2OR ACTUA( (AN* *ISTRIBUTION OR TO REMAIN AS STOCF6O(*ERS

O2 !6(I#%

I'


ERRE* IN 6O(*IN> T6AT IMPRO'IN> T6E ECONOMIC STATUS O2 2?Bs IS NOT AMON>

T6E (E>A( OB(I>ATIONS O2 6(I UN*ER T6E S*P AN* AN IMPERATI'E IMPOSITION B

!RA =J# AN* *EPARTMENT O2 A>RARIAN RE2ORM A*MINISTRATI'E OR*ER NO% "0

3*AO "04%

'

T6E 6ONORAB(E COURT, ?IT6 *UE RESPECT, ERRE* IN 6O(*IN> T6AT T6E

CON'ERSION O2 T6E A>RICU(TURA( (AN*S *I* NOT 'IO(ATE T6E CON*ITIONS O2 RA

=J AN* *AO "0%

'I

T6E 6ONORAB(E COURT, ?IT6 *UE RESPECT, ERRE* IN 6O(*IN> T6AT PETITIONER IS

ENTIT(E* TO PAMENT O2 )UST COMPENSATION% S6OU(* T6E 6ONORAB(E COURT

A22IRM T6E ENTIT(EMENT O2 T6E PETITIONER TO )UST COMPENSATION, T6E SAME

S6OU(* BE PE>>E* TO 2ORT T6OUSAN* PESOS 3PhP


61/93

T6E 6ONORAB(E COURT, ?IT6 *UE RESPECT, ERRE* IN 6O(*IN> T6AT

(UISITA IN*USTRIA( PARF CORP% 3(IPCO4 AN* RI+A( COMMERCIA(

BANFIN> CORPORATION 3RCBC4 ARE INNOCENT PURC6ASERS 2OR 'A(UE%

In itsMotion for Reconsideration$ate$ )ul5 /", /0"", 2ARM siilarl5 puts forth the follo:in. issues&

I

T6E 6ONORAB(E SUPREME COURT S6OU(* 6A'E STRUCF *O?N SECTION 8" O2 !RA=J# 2OR BEIN> UNCONSTITUTIONA(% T6E CONSTITUTIONA(IT ISSUE T6AT ?AS

RAISE* B T6E RESPON*ENTS-INTER'ENORS IS T6ELIS MOTAO2 T6E CASE%

II

T6E 6ONORAB(E SUPREME COURT S6OU(* NOT 6A'E APP(IE* T6E *OCTRINE O2

@OPERATI'E 2ACT TO T6E CASE% T6E OPTION >I'EN TO T6E 2ARMERS TO REMAIN AS

STOCF6O(*ERS O2 6ACIEN*A (UISITA IS EDUI'A(ENT TO AN OPTION 2OR 6ACIEN*A

(UISITA TO RETAIN (AN* IN *IRECT 'IO(ATION O2 T6E COMPRE6ENSI'E A>RARIAN

RE2ORM (A?% T6E *ECEPTI'E STOCF *ISTRIBUTION OPTION G STOCF *ISTRIBUTION

P(AN CANNOT )USTI2 SUC6 RESU(T, ESPECIA(( A2TER T6E SUPREME COURT 6AS

A22IRME* ITS RE'OCATION%

III

T6E 6ONORAB(E SUPREME COURT S6OU(* NOT 6A'E CONSI*ERE* !(IPCO# AN*

!RCBC# AS INNOCENT PURC6ASERS2OR 'A(UE IN T6E INSTANT CASE%

Mallari, et al%, on the other han$,a$ance the follo:in. .roun$s in support of theirMotion for

Reconsideration$ate$ )ul5 /", /0""&

3"4 T6E 6OME(OTS REDUIRE* TO BE *ISTRIBUTE* 6A'E A(( BEEN *ISTRIBUTE*

PURSUANT TO T6E MEMORAN*UM O2 A>REEMENT% ?6AT REMAINS MERE( IS T6E

RE(EASE O2 TIT(E 2ROM T6E RE>ISTER O2 *EE*S%

3/4 T6ERE 6AS BEEN NO *I(UTION O2 S6ARES% CORPORATE RECOR*S ?OU(* S6O?

T6AT I2 E'ER NOT A(( O2 T6E ",0I'EN TO T6E ACTUA( ORI>INA(

2ARM?ORFER BENE2ICIAR, T6E RECIPIENT O2 T6E *I22ERENCE IS T6E NET O2 FIN OR

C6I(*REN O2 SAI* ORI>INA( !2?Bs#% 6ENCE, ?E RESPECT2U(( SUBMIT T6AT SINCET6E S6ARES ?ERE >I'EN TO T6E SAME @2AMI( BENE2ICIAR, T6IS S6OU(* BE

*EEME* AS SUBSTANTIA( COMP(IANCE ?IT6 T6E PRO'ISIONS O2 SECTION < O2 *AO "0%

384 T6ERE 6AS BEEN NO 'IO(ATION O2 T6E 8-MONT6 PERIO* TO IMP(EMENT T6E !S*P#

AS PRO'I*E* 2OR B SECTION "" O2 *AO "0 AS T6IS PRO'ISION MUST BE REA* IN (I>6T

O2 SECTION "0 O2 EECUTI'E OR*ER NO% //9, T6E PERTINENT PORTION O2 ?6IC6

REA*S, @T6E APPRO'A( B T6E PARC O2 A P(AN 2OR SUC6 STOCF *ISTRIBUTION, AN*

ITS INITIA( IMP(EMENTATION, S6A(( BE *EEME* COMP(IANCE ?IT6 T6E (AN**ISTRIBUTION REDUIREMENT O2 T6E CARP%

3I'EN TO T6EM

UN*ER T6E S*P% IT ?OU(* BE UN2AIR I2 T6E ARE A((O?E* TO >ET T6E (AN* AN* AT

T6E SAME TIME 6O(* ON TO T6E BENE2ITS T6E RECEI'E* PURSUANT TO T6E S*P IN

T6E SAME ?A AS T6OSE ?6O ?I(( C6OOSE TO STA ?IT6 T6E S*O%


62/93

(astl5, Rene >alan. an$ AMBA(A, throu.h the Public Interest (a: Center 3PI(C4, subit the follo:in.

.roun$s in support of theirMotion for Reconsideration$ate$ )ul5 //, /0""&

I

T6E 6ONORAB(E COURT, ?IT6 *UE RESPECT, >RA'E( ERRE* IN OR*ERIN> T6E

6O(*IN> O2 A 'OTIN> OPTION INSTEA* O2 TOTA(( RE*ISTRIBUTIN> T6E SUB)ECT

(AN*S TO !2?Bs# in !6(I#%

A% T6E 6O(*IN> O2 A 'OTIN> OPTION 6AS NO (E>A( BASIS% T6E RE'OCATION O2 T6E

!S*P# CARRIES ?IT6 IT T6E RE'OCATION O2 T6E !S*OA#%

B% >I'IN> T6E !2?Bs# T6E OPTION TO REMAIN AS STOCF6O(*ERS O2 6(I ?IT6OUT

MAFIN> T6E NECESSAR C6AN>ES IN T6E CORPORATE STRUCTURE ?OU(* ON(

SUB)ECT T6EM TO 2URT6ER MANIPU(ATION AN* 6AR*S6IP%

C% OT6ER 'IO(ATIONS COMMITTE* B 6(I UN*ER T6E !S*OA# AN* PERTINENT (A?S

)USTI2 TOTA( (AN* RE*ISTRIBUTION O2 6ACIEN*A (UISITA%

II

T6E 6ONORAB(E COURT, ?IT6 *UE RESPECT, >RA'E( ERRE* IN 6O(*IN> T6AT T6E

!RCBC# AN* !(IPCO# ARE INNOCENT PURC6ASERS 2OR 'A(UE O2 T6E 800-6ECTARE

PROPERT IN 6ACIEN*A (UISITA T6AT ?AS SO(* TO T6EM PRIOR TO T6E INCEPTION O2

T6E PRESENT CONTRO'ERS%

Ultiatel5, the issues for Our consi$eration are the follo:in.& 3"4 applicabilit5 of the operatie fact $octrine7 3/4

constitutionalit5 of Sec% 8" of RA =J or the Comprehensive Agrarian Reform Law of !""7 384 coera.e of copulsor5

acuisition7 3


63/93

:oul$ result in ineuit5 an$ preKu$ice to the far:or;ers% !J# The fore.oin. ie:s are also siilarl5 share$ b5 Rene

>alan. an$ AMBA(A, throu.h the PI(C%!#In a$$ition, 2ARM posits that the option .ien to the 2?Bs is euialent to

an option for 6(I to retain lan$ in $irect iolation of RA =J%!9#

2a3O(/0ai1/ Fa* D#*0in/ N# Li4i/d # In1a)id #0 Un*#ni5i#na) La6

Contrar5 to the stance of respon$ents, the operatie fact $octrine $oes not onl5 appl5 to la:s subseuentl5

$eclare$ unconstitutional or unla:ful, as it also applies to e1ecutie acts subseuentl5 $eclare$ as inali$% As ?e hae

$iscusse$ in Our )ul5 =, /0"" *ecision&

That the operatie fact $octrine suarel5 applies to e1ecutie actsLLin this case, the approal b5

PARC of the 6(I proposal for stoc; $istributionLLis :ell-settle$ in our Kurispru$ence% In Chave# v.

$ational %o&sing A&thorit', ?e hel$&

Petitioner postulates that the @operatie fact $octrine is inapplicable to thepresent case because it is an euitable $octrine :hich coul$ not be use$ to countenance

an ineuitable result that is contrar5 to its proper office%

On the other han$, the petitioner Solicitor >eneral ar.ues that the e1istence of thearious a.reeents ipleentin. the SM*RP is an operatie fact that can no lon.er be

$isturbe$ or sipl5 i.nore$, citin.Rieta v. People of the Philippines%

The ar.uent of the Solicitor >eneral is eritorious%

The @operatie fact $octrine is ebo$ie$ in(e Ag)a'ani v. Co&rt of Appeals,

:herein it is state$ that a le.islatie or/7/*5i1/ a*, prior to its bein. $eclare$ as

unconstitutional b5 the courts, is ali$ an$ ust be coplie$ :ith, thus&

111 111 111

This $octrine :as reiterate$ in the ore recent case of Cit' of Ma*ati v. Civil

Service Commission, :herein :e rule$ that&

Moreoer, :e certainl5 cannot nullif5 the Cit5 >oernents or$er of

suspension, as :e hae no reason to $o so, uch less retroactiel5 appl5 such

nullification to $eprie priate respon$ent of a copellin. an$ ali$ reason for not filin.

the leae application%F#0 a 6/ ha1/ h/)d, a 1#id a* h#58h in )a6 a 4/0/ *0a( #.

(a(/0 n#n/h/)/ *#n./0 )/8ii4a*- 5(#n (a a* #0 #4ii#n d#n/ in 0/)ian*/

h/0/#."Conseuentl5, the e1istence of a statute or /7/*5i1/ #0d/0prior to its bein.

a$Ku$.e$ oi$ is an operatie fact to :hich le.al conseuences are attache$% It :oul$

in$ee$ be .hastl5 unfair to preent priate respon$ent fro rel5in. upon the or$er ofsuspension in lieu of a foral leae application%

The applicabilit5 of the operatie fact $octrine to e1ecutie acts :as further e1plicate$ b5 this

Court inRieta v. People, thus&

Petitioner conten$s that his arrest b5 irtue of Arrest Search an$ Seiure Or$er

3ASSO4 No% eneral Or$er

No% 0, issue$ b5 then Presi$ent 2er$inan$ E% Marcos :as subseuentl5 $eclare$ b5
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101.htm#_ftn9


64/93

the Court, in Ta+ada v. T&vera, 88 to hae no force an$ effect% Thus, he asserts, an5

ei$ence obtaine$ pursuant thereto is ina$issible in ei$ence%

?e $o not a.ree% In Ta+ada, the Court a$$resse$ the possible effects of its

$eclaration of the inali$it5 of arious presi$ential issuances% *iscussin. therein ho:

such a $eclaration i.ht affect acts $one on a presuption of their ali$it5, the Court

sai$&

@% % %% In siilar situations in the past this Court ha$ ta;en the

pra.atic an$ realistic course set forth inChicot Co&nt' (rainage(istrict vs. ,a-ter ,an*to :it&

The courts belo: hae procee$e$ on the theor5 that the Act of

Con.ress, hain. been foun$ to be unconstitutional, :as not a la:7 that it

:as inoperatie, conferrin. no ri.hts an$ iposin. no $uties, an$ hence

affor$in. no basis for the challen.e$ $ecree% % % % It is uite clear,

ho:eer, that such broa$ stateents as to the effect of a $eterination of

unconstitutionalit5 ust be ta;en :ith ualifications% The actual

e1istence of a statute, prior to !the $eterination of its inali$it5#, is an

operatie fact an$ a5 hae conseuences :hich cannot Kustl5 be

i.nore$% The past cannot al:a5s be erase$ b5 a ne: Ku$icial $eclaration%

The effect of the subseuent rulin. as to inali$it5 a5 hae to beconsi$ere$ in arious aspects :ith respect to particular con$uct,

priate an$ official% Duestions of ri.hts claie$ to hae becoe este$,

of status, of prior $eterinations $eee$ to hae finalit5 an$ acte$ upon

accor$in.l5, of public polic5 in the li.ht of the nature both of the statute

an$ of its preious application, $ean$ e1aination% These uestions are

aon. the ost $ifficult of those :hich hae en.a.e$ the attention of

courts, state an$ fe$eral, an$ it is anifest fro nuerous $ecisions thatan all-inclusie stateent of a principle of absolute retroactie inali$it5

cannot be Kustifie$%H

111 111 111

@Siilarl5, the ipleentationG enforceent of presi$ential

$ecrees prior to their publication in the Official >aette is an operatie

fact :hich a5 hae conseuences :hich cannot be Kustl5 i.nore$% The

past cannot al:a5s be erase$ b5 a ne: Ku$icial $eclaration % % % that an all-

inclusie stateent of a principle of absolute retroactie inali$it5

cannot be Kustifie$%H

The Chicot $octrine cite$ in Ta+adaa$ocates that, prior to the nullification of a

statute, there is an iperatie necessit5 of ta;in. into account its actual e1istence as an

operatie fact ne.atin. the acceptance of @a principle of absolute retroactie inali$it5%

?hateer :as $one :hile the le.islatie or the /7/*5i1/ a*:as in operation shoul$ be

$ul5 reco.nie$ an$ presue$ to be ali$ in all respects% Th/ ASSO ha 6a i5/d in$9%9 5nd/0 G/n/0a) O0d/0 N#" :& )#n8 +/.#0/ #50 D/*ii#n in Taadaand h/

a00/ #. (/ii#n/0 i an #(/0ai1/ .a* ha *an n# )#n8/0 +/ di50+/d #0 i4()-

i8n#0/d" 3Citations oitte$7 ephasis in the ori.inal%4

Bearin. in in$ that PARC Resolution No% 9-"/-/!"0#LLan e1ecutie actLL:as $eclare$ inali$ in the instan

case, the operatie fact $octrine is clearl5 applicable%
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/171101.htm#_ftn10


65/93

Nonetheless, the inorit5 is of the persistent ie: that the applicabilit5 of the operatie fact $octrine shoul$ be

liite$ to statutes an$ rules an$ re.ulations issue$ b5 the e1ecutie $epartent that are accor$e$ the sae status as that of

a statute or those :hich are uasi-le.islatie in nature% Thus, the inorit5 conclu$es that the phrase @e1ecutie act use$

in the case of(e Ag)a'ani v. Philippine $ational ,an*!""#refers onl5 to acts, or$ers, an$ rules an$ re.ulations that hae

the force an$ effect of la:% The inorit5 also a$e ention of the Concurrin. Opinion of )ustice Enriue 2ernan$o

inM&nicipalit' of Mala)ang v. ,enito,!"/#:here it :as suppose$l5 a$e e1plicit that the operatie fact $octrine applies to

e1ecutie acts, :hich are ultiatel5 uasi-le.islatie in nature%

?e $isa.ree% 2or one, neither the(e Ag)a'anicase nor theM&nicipalit' of Mala)angcase elaborates :ha

@e1ecutie act ean% Moreoer, :hile or$ers, rules an$ re.ulations issue$ b5 the Presi$ent or the e1ecutie branch hae

fi1e$ $efinitions an$ eanin. in the A$inistratie Co$e an$ Kurispru$ence, the phrase @e1ecutie act $oes not hae

such specific $efinition un$er e1istin. la:s% It shoul$ be note$ that in the cases cite$ b5 the inorit5, no:here can it be

foun$ that the ter @e1ecutie act is confine$ to the fore.oin.% Contraril5, the ter @e1ecutie act is broa$ enou.h to

encopass $ecisions of a$inistratie bo$ies an$ a.encies un$er the e1ecutie $epartent :hich are subseuentl5

reo;e$ b5 the a.enc5 in uestion or nullifie$ b5 the Court%

A case in point is the concurrent appointent of Ma.$an.al B% Ela 3Ela4 as Chairan of the Presi$ential

Coission on >oo$ >oernent 3PC>>4 an$ as Chief Presi$ential (e.al Counsel 3CP(C4 :hich :as $eclare$

unconstitutional b5 this Court inP&)lic Interest Center Inc. v. /lma%!"8# In sai$ case, this Court rule$ that the concurrent

appointent of Ela to these offices is in iolation of Section J, par% /, Article I-B of the "9J Constitution, since these

are incopatible offices% Notabl5, the appointent of Ela as Chairan of the PC>> an$ as CP(C is, :ithout a uestion

an e1ecutie act% Prior to the $eclaration of unconstitutionalit5 of the sai$ e1ecutie act, certain acts or transactions :ere

a$e in .oo$ faith an$ in reliance of the appointent of Ela :hich cannot Kust be set asi$e or inali$ate$ b5 itssubseuent inali$ation%

In Tan v. ,arrios,!"


66/93

or the a.encies un$er the e1ecutie $epartent% This $octrine, in the interest of Kustice an$ euit5, can be applie$ liberall5

an$ in a broa$ sense to encopass sai$ $ecisions of the e1ecutie branch% In ;eepin. :ith the $ean$s of euit5, the

Court can appl5 the operatie fact $octrine to acts an$ conseuences that resulte$ fro the reliance not onl5 on a la: or

e1ecutie act :hich is uasi-le.islatie in nature but also on $ecisions or or$ers of the e1ecutie branch :hich :ere later

nullifie$% This Court is not unin$ful that such acts an$ conseuences ust be reco.nie$ in the hi.her interest of Kustice,

euit5 an$ fairness%

Si.nificantl5, a $ecision a$e b5 the Presi$ent or the a$inistratie a.encies has to be coplie$ :ith because it

has the force an$ effect of la:, sprin.in. fro the po:ers of the Presi$ent un$er the Constitution an$ e1istin. la:s% Prior

to the nullification or recall of sai$ $ecision, it a5 hae pro$uce$ acts an$ conseuences in conforit5 to an$ in reliance

of sai$ $ecision, :hich ust be respecte$% It is on this score that the operatie fact $octrine shoul$ be applie$ to acts an$

conseuences that resulte$ fro the ipleentation of the PARC Resolution approin. the S*P of 6(I%

More iportantl5, respon$ents, an$ een the inorit5, faile$ to clearl5 e1plain ho: the option to rea

cases agrarian

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