Association of Small Landowners in the Philippines, Inc.

vs Secretary of Agrarian Reform

These are four consolidated cases questioning the constitutionality of the Comprehensive Agrarian Reform
Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or R.A. No. 3844).

Brief background: Article XIII of the Constitution on Social Justice and Human Rights includes a call for the
adoption by the State of an agrarian reform program. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands
they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. RA 3844 was enacted
in 1963. P.D. No. 27 was promulgated in 1972 to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum retention limits for landowners. In 1987, President
Corazon Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of PD 27 and
providing for the valuation of still unvalued lands covered by the decree as well as the manner of their payment.
In 1987, P.P. No. 131, instituting a comprehensive agrarian reform program (CARP) was enacted; later, E.O. No.
229, providing the mechanics for its (PP131’s) implementation, was also enacted. Afterwhich is the enactment of
R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with its
provisions.

[Two of the consolidated cases are discussed below]

G.R. No. 78742: (Association of Small Landowners vs Secretary)

The Association of Small Landowners in the Philippines, Inc. sought exception from the land distribution scheme
provided for in R.A. 6657. The Association is comprised of landowners of ricelands and cornlands whose
landholdings do not exceed 7 hectares. They invoke that since their landholdings are less than 7 hectares, they
should not be forced to distribute their land to their tenants under R.A. 6657 for they themselves have shown
willingness to till their own land. In short, they want to be exempted from agrarian reform program because they
claim to belong to a different class.

G.R. No. 79777: (Manaay vs Juico)

Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229) on the ground that
these laws already valuated their lands for the agrarian reform program and that the specific amount must be
determined by the Department of Agrarian Reform (DAR). Manaay averred that this violated the principle in
eminent domain which provides that only courts can determine just compensation. This, for Manaay, also violated
due process for under the constitution, no property shall be taken for public use without just compensation.

Manaay also questioned the provision which states that landowners may be paid for their land in bonds and not
necessarily in cash. Manaay averred that just compensation has always been in the form of money and not in bonds.

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

2. Whether or not there is a violation of due process.

3. Whether or not just compensation, under the agrarian reform program, must be in terms of cash.

HELD:
1. No. The Association had not shown any proof that they belong to a different class exempt from the agrarian
reform program. Under the law, classification has been defined as the grouping of persons or things similar to each
other in certain particulars and different from each other in these same particulars. To be valid, it must conform to
the following requirements:

(1) it must be based on substantial distinctions;

(2) it must be germane to the purposes of the law;

(3) it must not be limited to existing conditions only; and

(4) it must apply equally to all the members of the class.

Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights
conferred and the liabilities imposed. The Association have not shown that they belong to a different class and
entitled to a different treatment. The argument that not only landowners but also owners of other properties must be
made to share the burden of implementing land reform must be rejected. There is a substantial distinction between
these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on
this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is
accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment
of the Bill of Rights. In the contrary, it appears that Congress is right in classifying small landowners as part of the
agrarian reform program.

2. No. It is true that the determination of just compensation is a power lodged in the courts. However, there is no law
which prohibits administrative bodies like the DAR from determining just compensation. In fact, just compensation
can be that amount agreed upon by the landowner and the government – even without judicial intervention so long
as both parties agree. The DAR can determine just compensation through appraisers and if the landowner agrees,
then judicial intervention is not needed. What is contemplated by law however is that, the just compensation
determined by an administrative body is merely preliminary. If the landowner does not agree with the finding of just
compensation by an administrative body, then it can go to court and the determination of the latter shall be the final
determination. This is even so provided by RA 6657:

Section 16 (f): Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for
final determination of just compensation.

3. No. Money as [sole] payment for just compensation is merely a concept in traditional exercise of eminent domain.
The agrarian reform program is a revolutionary exercise of eminent domain. The program will require billions of
pesos in funds if all compensation have to be made in cash – if everything is in cash, then the government will not
have sufficient money hence, bonds, and other securities, i.e., shares of stocks, may be used for just compensation.

People vs. Adillo

Facts: The defendant- appellee Elias Adillo was a share-tenant of one Saturnino L. Rebong on aparcel of
rice land situated at Victoria, Laguna. On January 4, 1962, he was charged before the Court of First
Instance of Laguna for violation of Section 39 of the Agricultural Tenancy Act. He allegedly did then and
there wilfully, unlawfully and feloniously reap and thresh a portion of palay planted on said piece of land
without the knowledge and consent of Saturnino Rebong and even before a date has been fixed for the
reaping and threshing of the palay, to the damage and prejudice of Saturnino Rebong. On August 24,
1964, the counsel for the defendant-appellee1moved for the quashal of the information on the submission
that the Agricultural Tenancy Act, on which the accusatory pleading against defendant- appellee was
based, has been repealed or abrogated by the new Agricultural Land Reform Code, thereby resulting in
the extinction of defendant- appellee's criminal responsibility for pre-reaping and pre-threshing under the
former law. The lower court favorably resolved the motion and ordered the dismissal of the case.

Issue: Whether or not the penal liability of a share-tenant for pre-reaping or pre-threshing under the
Agricultural Tenancy Act (Republic Act No. 1199, enacted on August 30, 1954) has been obliterated by
the Agricultural Land Reform Code (Republic Act No. 3844, enacted on August 8, 1963) and the
subsequent agrarian laws.
Held: Yes. It will be noted that Section 39 of the Agricultural Tenancy Act of 1954 (Republic Act No.
1199) which prohibited either the tenant or landholder, without mutual consent, to reap or thresh a portion
of the crop at any time previous to the date set for its threshing and penalized any violation thereof by
either party is no longer found in the Agricultural Land Reform Code(Republic Act No. 3844, as amended
by Republic Act No. 6389) for the obvious reason that agricultural share tenancy provided in the
Agricultural Tenancy Act of 1954 has already been abolished by the new Code. The omission of such
provision as Section 39 of the Agricultural Tenancy Act of 1954 in the new Code operates as an implied
repeal of said provision. Agricultural share tenancy was declared "to be contrary to public policy and shall
be abolished.
” The injunction against pre-reaping and pre-threshing under the Agricultural Tenancy Act of 1954 has
lost its operative force and effect, and the penal sanction therein subdued. Specifically, Section 39 of
the Act, upon which the accusatory pleading against defendant-appellee is predicted, is no longercarried
in the subsequent agrarian laws and decrees and its violation thereof considered no longeran offense. As a
result, it would be illogical to prosecute or sentence defendant-appellee for suchoffense which no longer
exists.

Ruling: The order of dismissal of the information against defendant-appellee (Adillo) for violation of
Section 39 of the Agricultural Tenancy Act (Republic Act No. 1199) is hereby affirmed without
pronouncement as to costs.

Gabriel v. Pangilinan

Gabriel filed a complaint against Pangilinan claiming she is the owner of a 169,507 sqm fishpond in barrioSta.
Ursula, Pampanga. An oral contract of lease with a yearly rental was entered between them. Defendant was notified
that the contract would be terminated, but upon request was extended for another year.

Defendant moved for the dismissal of the complaint claiming that the trial court had no jurisdiction. It should
properly pertain to the Court of Agrarian Relations, there being an agricultural leasehold tenancy relationship
between the parties. Upon opposition by plaintiff, the motion was denied. The defendant filed his answer that the
land was originally verbally leased to him by the plaintiff's father, Potenciano for as long as the defendant wanted,
subject to the condition that he would convert the major portion into a fishpond and that which was already a
fishpond be improved at his expense, which would be reimbursed by Potenciano Gabriel or his heirs at the
termination of the lease. Plaintiff also assured him that he could continue leasing as long as he wanted since she was
not in a position to attend to it personally.

Parties were ordered to adduce evidence for the purpose of determining which Court shall take cognizance of the
case.

It appears that the defendant ceased to work on planting fingerlings, repairing dikes and such, personally with the
aid of helpers since he became ill and incapacitated. His daughter, Pilar Pangilinan, took over who said that she
helps her father in administering the leased property, conveying his instructions to the workers. Excepting Pilar who
is residing near the fishpond, defendant’s other children are all professionals; a lawyer, an engineer, and a priest all
residing in Manila. None of these has been seen working on the fishpond.

Defendant: relationship between the parties is an agricultural leasehold tenancy governed by Republic Act No. 1199,
as amended, pursuant to section 35 of Republic Act No. 3844, and the present case is within the original and
exclusive jurisdiction of the Court of Agrarian Relations.
Plaintiff: defendant ceased to work the fishpond personally or with the aid of the members of his immediate farm
household (Section 4, Republic Act No. 1199) the tenancy relationship between the parties has been extinguished
(Section 9, id.) and become of civil lease and therefore the trial court properly assumed jurisdiction over the case.

Trial Court: The lease contract is a civil lease governed by the New Civil Code. No tenancy relationship exists
between the plaintiff and the defendant as defined by Republic Act No. 1199. Court is vested with jurisdiction to try
and decide this case. Reconsideration by the defendant was denied. He appealed to this Court.

ISSUES:1. Lower court erred in considering the relationship of appellee and appellant as that of a civil lease and not
a leasehold tenancy under Rep. Act No. 1199 as amended.

2. The lower court erred in not holding that the Court of First Instance is without jurisdiction, the cue being that of
an agrarian relation in nature pursuant to Rep Act. No. 1199.

HELD:

Important differences between a leasehold tenancy and a civil law lease. The leasehold tenancy is limited to
agricultural land; that of civil law lease may be either rural or urban property. As to attention and cultivation, the law
requires the leasehold tenant to personally attend to, and cultivate the agricultural land, whereas the civil law lessee
need not personally cultivate or work the thing leased. As to purpose, the landholding in leasehold tenancy is
devoted to agriculture, whereas in civil law lease, the purpose may be for any other lawful pursuits. As to the law
that governs, the civil law lease is governed by the Civil Code, whereas leasehold tenancy is governed by special
laws.

The requisites for leasehold tenancy under the Agricultural Tenancy Act to exist:

1. land worked by the tenant is an agricultural land;

2. land is susceptible of cultivation by a single person together with members of his immediate farm household;

3. must be cultivated by the tenant either personally or with the aid of labor available from members of his
immediate farm household;

4. land belongs to another; and

5. use of the land by the tenant is for a consideration of a fixed amount in money or in produce or in both

There is no doubt that the land is agricultural land. It is a fishpond and the Agricultural Tenancy Act, which refers to
"agricultural land", specifically mentions fishponds and prescribes the consideration for the use thereof. The mere
fact that a person works an agricultural land does not necessarily make him a leasehold tenant within the purview of
Sec 4 of Republic Act No. 1199. He may still be a civil law lessee unless the other requisites as above enumerated
are complied with.

The court doesn’t want to decide on the second requisite since it wasn’t raised. For the third requisite, the tenancy
agreement was severed in 1956 when he ceased to work the fishpond personally because he became ill and
incapacitated. Not even did the members of appellant's immediate farm household work the land. Only the members
of the family of the tenant and such other persons, whether related to the tenant or not, who are dependent upon him
for support and who usually help him to operate the farm enterprise are included in the term "immediate farm
household".

Republic Act No. 1199 is explicit in requiring the tenant and his immediate family to work the land. A person, in
order to be considered a tenant, must himself and with the aid available from his immediate farm household cultivate
the land. Persons, therefore, who do not actually work the land cannot be considered tenants; and he who hires
others whom he pays for doing the cultivation of the land, ceases to hold, and is considered as having abandoned the
land as tenant within the meaning of sections 5 and 8of Republic Act. No. 1199, and ceases to enjoy the status,
rights, and privileges of one.

We are, therefore, constrained to agree with the court a quo that the relationship between the appellee Trinidad
Gabriel and appellant Eusebio Pangilinan was not a leasehold tenancy under Republic Act No. 1199. Hence, this
case was not within the original and exclusive jurisdiction of the Court of Agrarian Relations.

IN VIEW OF THE FOREGOING, the decision of the Court of First Instance of Pampanga in its Civil Case No.
1823, appealed from, is affirmed, with costs against the appellants.

VALENCIA vs. COURT OF APPEALS, ET AL.

G.R. No. 122363, 401 SCRA 666 April 29, 2003

BELLOSILLO, J.:

Facts: The property in dispute involves two (2) parcels of land situated in Canlaon City in Negros Oriental. On 7
May 1957 Valencia acquired the first parcel from Bonifacio Supnet, on 22 October 1962 Valencia entered into a ten
(10)-year civil law lease agreement over his two (2) parcels of land with Henson. Before the ten (10)-year lease
expired, without objection from Henson, Valencia leased the property for five (5) years to Fr. Flores under a civil
law lease concept beginning 21 August 1970 or until 30 June1975 after which the lease was cancelled .The lease
agreement between Valencia and Fr.Flores was subject to a prohibition against subleasing or encumbering the land
without Valencia's written consent. During the period of lease, Henson instituted Cresenciano and Marciano Frias to
work on the property, also during the lease of Fr. Flores he designated 13 persons as overseer and when the lease
agreement between the Petitioner and Fr. Flores expired, Petitioner demanded to vacate the property and instead the
private respondents continued cultivating the premises and refused to comply. On March 20, 1976, Valencia filed a
letter to protest to DAR Regional Office in Cebu City, while the private respondents without the knowledge of the
Petitioner, applied for the Certificates of Land Transfer(CLTs) under the Operation Land Transfer (OLT) Program
pursuant to PD No. 27claiming they were bona fide tenants of the property. Upon issuance of the Certificate of Land
Transfer to the private respondents, the Petitioner instituted the filing of the second letter contending the cancellation
of CLTs.

Issue: Whether or not a contract of civil law lease prohibits a civil law lessee from employing a tenant on the land
subject matter of the lease agreement? Otherwise stated, can petitioner’s civil law lessee, Fr. Flores, install tenants
on the subject premises without express authority to do so under Art. 1649 of the Civil Code, more so when the
lessee is expressly prohibited from doing so, as in the instant case?

Held: Contrary to the impression of private respondents, Sec. 6 of R. A. No. 3844, as amended,does not
automatically authorize a civil law lessee to employ a tenant without theconsent of the landowner. The lessee must
be so specifically authorized. For the right tohire a tenant is basically a personal right of a landowner, except as may
be provided by law.

But certainly nowhere in Sec. 6 does it say that a civil law lessee of a landholding is automatically authorized to
install a tenant thereon. A different interpretation would create a perverse and absurd situation where a person who
wants to be a tenant, and taking advantage of this perceived ambiguity in the law, asks a third person to become a
civil law lessee of the landowner. Incredibly, this tenant would technically have a better right over the property than
the landowner himself. This tenant would then gain security of tenure, and eventually become owner of the land by
operation of law. This is most unfair to the hapless and unsuspecting landowner who entered into a civil law lease
agreement in good faith only to realize later on that he can no longer regain possession of his property due to the
installation of a tenant by the civil law lessee. On the other hand, under the express provision of Art. 1649 of the
Civil Code, the lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the
contrary . In the case before us, not only is there no stipulation to the contrary; the lessee is expressly prohibited
from subleasing or encumbering the land, which includes installing a leasehold tenant thereon since the right to do
so is an attribute of ownership. Plainly stated therefore, a contract of civil law lease can prohibit a civil law lessee
from employing a tenant on the land subject matter of the lease agreement. An extensive and correct discussion of
the statutory interpretation of Sec. 6 of R. A. No. 3844, as amended, is provided by the minority view in Bernas v.
Court of Appeals. When Sec. 6 provides that the agricultural leasehold relations shall be limited to the person who
furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who
personally cultivates the same, it assumes that there is already an existing agricultural leasehold relation, i.e., a
tenant or agricultural lessee already works the land. The epigraph of Sec. 6 merely states who are " Parties to
Agricultural Leasehold Relations," which assumes that there is already a leasehold tenant on the land; not until then.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 32669
dated 27 July 1995 and its Resolution dated 22 September1995 denying the Motion for Reconsideration are
REVERSED and SET ASIDE.