ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUI…

In ancient mythology, Antaeus was a terrible
giant who blocked and challenged Hercules for his life on his way to Mycenae after performing his eleventh labor.  The two wrestled mightily and Hercules flung
his adversary to the ground thinking him dead, but Antaeus
rose even stronger to resume their struggle. 
This happened several times to Hercules’ increasing amazement. 
Finally, as they continued grappling, it dawned on
Hercules that Antaeus was the son of Gaea and could
never die as long as any part of his body was touching his Mother Earth.  Thus forewarned, Hercules then
held Antaeus up in the air, beyond the
reach of the sustaining soil, and crushed him to death.

Mother Earth.  The sustaining soil.  The giver of life, without whose invigorating
touch even the powerful Antaeus weakened and died.

The cases before us are
not as fanciful as the foregoing tale. 
But they also tell of the
elemental forces of life and death, of men and women who, like Antaeus, need the sustaining strength of the precious earth
to stay alive.

“Land for the
Landless” is a slogan that underscores the acute imbalance in the distribution of this precious resource
among our people.  But it is more than a slogan.  Through
the brooding centuries, it has become a battlecry
dramatizing the increasingly urgent
demand of the dispossessed among us
for a plot of earth as their
place in the sun.

Recognizing this need,
the Constitution in 1935 mandated the policy of social justice to
“insure the well-being and economic security of all the people,”^[1] especially the less privileged.  In 1973, the new Constitution affirmed this
goal, adding specifically that “the State shall regulate the acquisition,
ownership, use, enjoyment and disposition of private property and equitably
diffuse property ownership and profits.”^[2] Significantly, there was also the specific
injunction to “formulate and implement an agrarian reform program aimed at
emancipating the tenant from the bondage of the soil.”^[3]

The Constitution of 1987
was not to be outdone.  Besides echoing
these sentiments, it also adopted one whole and separate Article XIII on Social
Justice and Human Rights, containing grandiose but undoubtedly sincere
provisions for the uplift of the common people. 
These include a call in the following words for the adoption by the
State of an agrarian reform program:

SEC. 4.  The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers,
who are landless, to own directly or
collectively the lands they till or, in the case of other farmworkers,
to receive a just share of the fruits thereof. 
To this end, the State shall encourage and undertake the just
distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or
equity considerations, and subject to the payment of just compensation.  In determining retention limits, the State
shall respect the right of small landowners. 
The State shall further provide incentives for voluntary land-sharing.

Earlier, in fact, R.A.
No. 3844, otherwise known as the Agricultural Land Reform Code, had already
been enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated
principles.  This was substantially
superseded almost a decade later by P.D. No. 27, which was promulgated on
October 21, 1972, along with martial law, to provide for the compulsory
acquisition of private lands for distribution among tenant-farmers and to
specify maximum retention limits for landowners.

The people power
revolution of 1986 did not change and indeed even energized the thrust for
agrarian reform.  Thus, on July 17,
1987, President
Corazon C. Aquino issued E.O. No. 228, declaring full
land ownership in favor of the beneficiaries of P.D. No. 27 and providing for
the valuation of still unvalued lands covered by the decree as well as the
manner of their payment.  This was
followed on July 22, 1987 by Presidential Proclamation No. 131,
instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229,
providing the mechanics for its implementation.

Subsequently, with its
formal organization, the revived Congress of the Philippines took over legislative power from the
President and started its own deliberations, including extensive public
hearings, on the improvement of the interests of farmers.  The result, after almost a year of spirited
debate, was the enactment of R.A. No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, which President Aquino
signed on June 10, 1988.  This
law, while considerably changing the earlier mentioned enactments, nevertheless
gives them suppletory effect insofar as they are not
inconsistent with its provisions.^[4]

The above-captioned cases have been consolidated because they
involve common legal questions, including serious challenges to the
constitutionality of the several measures mentioned above.  They will be the subject of one common
discussion and resolution.  The different
antecedents of each case will require separate treatment, however, and will
first be explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D.
No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.

The subjects of this petition are a 9-hectare riceland
worked by four tenants and owned by petitioner Nicolas Manaay
and his wife and a 5-hectare riceland worked by four
tenants and owned by petitioner Agustin Hermano,
Jr.  The tenants were declared full
owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and
229 on grounds inter alia of
separation of powers, due process, equal protection and the constitutional
limitation that no private property shall be taken for public use without just
compensation.

They contend that President Aquino
usurped legislative power when she promulgated E.O. No. 228.  The said measure is invalid also for
violation of Article XIII, Section 4, of the Constitution, for failure to
provide for retention limits for small landowners.  Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a valid
appropriation.

In connection with the
determination of just compensation, the petitioners argue that the same may be
made only by a court of justice and
not by the President of the Philippines.  They
invoke the recent cases of EPZA v. Dulay^[5] and Manotok v.
National Food Authority.^[6] Moreover, the just compensation contemplated
by the Bill of Rights is payable in
money or in cash and not in the
form of bonds or other things of value.

In considering the
rentals as advance payment on the land, the executive
order also deprives the petitioners of their property rights as protected by
due process.  The equal protection clause
is also violated because the order places the burden of solving the agrarian
problems on the owners only of agricultural lands.  No similar obligation is imposed on the
owners of other properties.

The petitioners also
maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners
of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and
so violated due process.  Worse, the
measure would not solve the agrarian problem because even the small farmers are
deprived of their lands and the retention rights guaranteed by the Constitution.

In his Comment, the
Solicitor General stresses that P.D. No. 27 has already been upheld in the
earlier cases of Chavez v. Zobel,^[7] Gonzales v. Estrella,^[8] and Association of Rice and Corn Producers of the Philippines, Inc. v. the National Land Reform
Council.^[9] The determination of just compensation by
the executive authorities conformably to the formula prescribed under the
questioned order is at best initial or preliminary only.  It does not foreclose judicial intervention
whenever sought or warranted.  At any
rate, the challenge to the order is premature because no valuation of their
property has as yet been made by the Department of Agrarian
Reform.  The petitioners are also not
proper parties because the lands owned by them do not exceed the maximum
retention limit of 7 hectares.

Replying, the petitioners
insist they are proper parties because P.D. No. 27 does not provide for
retention limits on tenanted lands and that in any event their petition is a
class suit brought in behalf of landowners with landholdings below 24 hectares.  They maintain that the determination of just
compensation by the administrative authorities is a final ascertainment.  As for the cases invoked by the public
respondent, the constitutionality of P.D. No. 27 was merely assumed in Chavez,
while what was decided in Gonzales was the validity of the imposition of
martial law.

In the amended petition
dated November 22, 1988, it is contended that P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have
been impliedly repealed by R.A. No. 6657. 
Nevertheless, this statute should itself also be declared
unconstitutional because it suffers from substantially the same infirmities as
the earlier measures.

A petition for
intervention was filed with leave of Court on June 1, 1988 by Vicente Cruz, owner of a 1.83-hectare
land, who complained that the DAR was insisting on the implementation of P.D.
No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his
tenant on the payment of rentals.  In a
subsequent motion dated April 10, 1989, he adopted the allegations in the basic
amended petition that the above-mentioned enactments have been impliedly
repealed by R.A. No. 6657.

G.R. No. 79310

The petitioners herein
are landowners and sugar planters in the Victorias
Mill District, Victorias, Negros Occidental.  Co-petitioner Planters’ Committee, Inc. is an
organization composed of 1,400 planter-members. 
This petition seeks to prohibit the implementation of Proc. No. 131 and
E.O. No. 229.

The petitioners claim
that the power to provide for a Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to Congress and not the President.  Although they
agree that the President could exercise legislative power until the Congress was convened, she could do so only to enact emergency measures during the
transition period.  At that, even
assuming that the interim legislative power of the President was properly
exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for
violating the constitutional provisions on just compensation, due process, and
equal protection.

They also argue that
under Section 2 of Proc. No. 131 which provides:

Agrarian Reform Fund. – There is hereby created a special
fund, to be known as the Agrarian Reform Fund, an initial amount of FIFTY
BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the
Comprehensive Agrarian Reform Program
from 1987 to 1992 which shall be sourced from the receipts of the sale of the
assets of the Asset Privatization Trust and Receipts of sale of ill-gotten
wealth received through the Presidential Commission on Good Government and such
other sources as government may deem appropriate.  The amounts collected and accruing to this
special fund shall be considered automatically appropriated for
the purpose authorized in this Proclamation.

the amount appropriated is in futuro, not in esse.  The money
needed to cover the cost of the contemplated expropriation has yet to be raised and cannot be appropriated at this time.

Furthermore, they contend
that taking must be simultaneous with payment of just compensation as it is
traditionally understood, i.e., with money and in full, but no such payment is
contemplated in Section 5 of the E.O. No. 229. 
On the contrary, Section 6 thereof provides that the Land Bank of the
Philippines “shall compensate the landowner in an amount to be established
by the government, which shall be based on the owner’s declaration of current
fair market value as provided in Section 4 hereof, but subject to certain
controls to be defined and promulgated by the Presidential Agrarian Reform
Council.” This compensation may not be paid fully in money but in any of several modes that may consist of part cash and part bond,
with interest, maturing periodically, or direct payment in cash or bond as may
be mutually agreed upon by the beneficiary and the landowner or as may be
prescribed or approved by the PARC.

The petitioners also
argue that in the issuance of the two measures, no effort was made to make a
careful study of the sugar planters’ situation. 
There is no tenancy problem in the sugar areas that can justify the application
of the CARP to them.  To the extent that
the sugar planters have been lumped in the same legislation with other farmers,
although they are a separate group with problems
exclusively their own, their right to equal protection has been violated.

A motion for intervention
was filed on August 27, 1987 by the National Federation of Sugarcane
Planters (NASP) which claims a membership of at least 20,000 individual
sugar planters all over the country.  On September 10, 1987, another motion
for intervention was filed, this time by Manuel Barcelona, et al.,
representing coconut and riceland owners. 
Both motions were granted by the Court.

NASP alleges that
President Aquino had no authority to fund the Agrarian
Reform Program and that, in any event, the appropriation is invalid because of
uncertainty in the amount appropriated. 
Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the minimum rather than
the maximum authorized amount.  This is
not allowed.  Furthermore, the stated initial
amount has not been certified to by the
National Treasurer as actually available.

Two additional arguments
are made by Barcelona, to wit, the failure to establish by clear
and convincing evidence the necessity for the exercise of the powers of eminent
domain, and the violation of the fundamental right to own property.

The petitioners also
decry the penalty for non-registration of the lands, which is the expropriation
of the said land for an amount equal to the government assessor’s valuation of
the land for tax purposes.  On the other
hand, if the landowner declares his own valuation, he is unjustly required to
immediately pay the corresponding taxes on the land, in violation of the
uniformity rule.

In his consolidated
Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229.  He also justifies the necessity for the
expropriation as explained in the “whereas” clauses
of the Proclamation and submits that, contrary to the petitioner’s contention,
a pilot project to determine the feasibility of CARP and a general survey on
the people’s opinion thereon are not indispensable prerequisites to its
promulgation.

On the alleged violation
of the equal protection clause, the sugar planters have failed to show that
they belong to a different class and should be differently treated.  The Comment also suggests the possibility of
Congress first distributing public agricultural lands and scheduling the
expropriation of private agricultural lands later.  From this viewpoint, the petition for
prohibition would be premature.

The public respondent also points out that the constitutional prohibition is
against the payment of public money without the corresponding
appropriation.  There is no rule that
only money already in existence can be the subject of an appropriation
law.  Finally, the earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually the maximum sum appropriated.  The word “initial” simply means
that additional amounts may be appropriated later when necessary.

On April
11, 1988, Prudencio Serrano, a coconut planter, filed
a petition on his own behalf, assailing the constitutionality of E.O. No.
229.  In addition to the arguments
already raised, Serrano contends that the measure is unconstitutional because:

(1)   Only public lands
should be included in the CARP;

(2)   E.O. No. 229 embraces
more than one subject which is not expressed in the title;

(3)   The power of the
President to legislate was terminated on July
2, 1987; and

(4)   The appropriation of
a P50 billion special fund from the National Treasury did not originate from
the House of Representatives.

G.R. No. 79744

The petitioner alleges
that the then Secretary of Department of Agrarian Reform, “in violation of
due process and the requirement for just compensation, placed his landholding
under the coverage of Operation Land Transfer Certificates of Land Transfer
were subsequently issued to the private respondents, who then refused payment
of lease rentals to him.

On September
3, 1986, the
petitioner protested the erroneous inclusion of his small landholding under
Operation Land Transfer and asked for the recall and cancellation of the
Certificates of Land Transfer in the name of the private respondents.  He claims that on December 24, 1986, his petition was denied without
hearing.  On February 17, 1987, he filed a motion for reconsideration,
which had not been acted upon when E.O. Nos. 228 and 229 were issued.  These orders rendered his motion moot and
academic because they directly effected the transfer of his land to the private
respondents.

The petitioner now argues
that:

(1)   E.O. Nos. 228 and 229
were invalidly issued by the President of the Philippines.

(2)   The said executive
orders are violative of the constitutional provision
that no private property shall be taken without due process or just
compensation.

(3)   The petitioner is denied the right of
maximum retention provided for under the 1987 Constitution.

The petitioner contends
that the issuance of E.O Nos. 228 and 229 shortly before Congress convened is
anomalous and arbitrary, besides violating the doctrine of separation of
powers.  The legislative power granted to
the President under the Transitory Provisions refers only to emergency measures
that may be promulgated in the proper exercise of the police power.

The petitioner also invokes his rights not to be deprived of his
property without due process of law and to the retention of his small parcels
of riceholding as guaranteed under Article XIII,
Section 4 of the Constitution.  He
likewise argues that, besides denying him just compensation for his land, the
provisions of E.O. No. 228 declaring
that:

Lease rentals paid to the landowner by the farmer-beneficiary after
October 21, 1972 shall be
considered as advance payment for the land.

is an unconstitutional taking of a vested
property right.  It is also his
contention that the inclusion of even small landowners in the program along
with other landowners with lands consisting of seven hectares or more is
undemocratic.

In his Comment, the Solicitor General submits that the petition
is premature because the motion for reconsideration filed with the Minister of
Agrarian Reform is still unresolved.  As
for the validity of the issuance of E.O. Nos. 228 and 229, he argues that they
were enacted pursuant to Section 6, Article XVIII of the Transitory Provisions
of the 1987 Constitution which reads:

The incumbent president shall continue to exercise legislative
powers until the first Congress is convened.

On the issue of just compensation; his position is that when P.D.
No. 27 was promulgated on October 21,
1972, the tenant-farmer of agricultural land was deemed the owner
of the land he was tilling.  The
leasehold rentals paid after that date should therefore be considered
amortization payments.

In his Reply to the
public respondents, the petitioner maintains that the motion he filed was
resolved on December 14, 1987.  An
appeal to the Office of the President would be useless with the promulgation of
E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public
respondent’s acts.

G.R. No. 78742

The petitioners in this
case invoke the right of retention granted by P.D. No. 27 to owners of rice and
corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same. 
Their respective lands do not exceed the statutory limit but are
occupied by tenants who are actually cultivating such lands.

According to P.D. No.
316, which was promulgated in implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice
and corn shall be ejected or removed from his farmholding
until such time as the respective rights of the tenant-farmers and the
landowner shall have been determined in accordance with the rules and
regulations implementing P.D. No. 27.

The petitioners claim
they cannot eject their tenants and so are unable to enjoy their right of
retention because the Department of Agrarian Reform has so far not issued the
implementing rules required under the above-quoted decree.  They therefore ask the Court for a writ of mandamus
to compel the respondent to issue the
said rules.

In his Comment, the
public respondent argues that P.D. No. 27 has been amended by LOI 474 removing
any right of retention from persons who own other agricultural lands of more
than 7 hectares in aggregate area or lands used for residential, commercial,
industrial or other purposes from which they derive adequate income for their
family.  And even assuming that the
petitioners do not fall under its terms, the regulations implementing P.D. No.
27 have already been issued, to wit, the Memorandum dated July 10, 1975
(Interim Guidelines on Retention by Small Landowners, with an accompanying
Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978,
(Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated
December 29, 1981 (Clarificatory Guidelines on
Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR
Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for
Landowners to Apply for Retention and/or to Protest the Coverage of their
Landholdings under Operation Land Transfer pursuant to P.D. No. 27).  For failure to file the corresponding
applications for retention under these measures, the petitioners are now barred
from invoking this right.

The public respondent also stresses that the petitioners have
prematurely initiated this case notwithstanding the pendency
of their appeal to the President of the Philippines.  Moreover, the issuance of the implementing
rules, assuming this has not yet been done, involves the exercise of discretion
which cannot be controlled through the writ of mandamus.  This is especially true if this
function is entrusted, as in this case,
to a separate department of the government.

In their Reply, the
petitioners insist that the above-cited measures are not applicable to them because
they do not own more than seven
hectares of agricultural land.  Moreover,
assuming arguendo that the rules were intended to cover them
also, the said measures are nevertheless not in force because they have not
been published as required by law and the ruling of this Court in Tañada v. Tuvera.^[10] As for LOI 474, the same is ineffective for
the additional reason that a mere letter of instruction could not have repealed
the presidential decree.

I

Although holding neither
purse nor sword and so regarded as the weakest of the three departments of the
government, the judiciary is nonetheless vested with the power to annul the
acts of either the legislative or the executive or of both when not conformable
to the fundamental law.  This is the
reason for what some quarters call the doctrine of judicial supremacy.  Even so, this power is not lightly assumed or
readily exercised.  The doctrine of
separation of powers imposes upon the courts a proper restraint, born
of the nature of their functions and of their respect for the other
departments, in striking down the acts of the legislative and the executive as
unconstitutional.  The policy, indeed, is
a blend of courtesy and caution.  To
doubt is to sustain.  The theory is that
before the act was done or the law was
enacted, earnest studies were
made by Congress or the President, or both, to insure that the Constitution
would not be breached.

In addition, the
Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the
concurrence of a majority of the members of the Supreme Court who took part in
the deliberations and voted on the issue during their session en banc.^[11] And as established by judge-made doctrine,
the Court will assume jurisdiction over a constitutional question only if it is
shown that the essential requisites of a judicial inquiry into such a question are first satisfied. 
Thus, there must be an actual case or controversy involving a conflict
of legal rights susceptible of judicial determination, the constitutional
question must have been opportunely raised by the proper party, and the
resolution of the question is unavoidably necessary to the decision of the case
itself.^[12]

With particular regard to
the requirement of proper party as applied in the cases before us, we hold that
the same is satisfied by the petitioners and intervenors
because each of them has sustained or is in danger of sustaining an immediate
injury as a result of the acts or measures complained of.^[13]
And even if, strictly speaking, they are not covered by the definition, it is
still within the wide discretion of the Court to waive the requirement and so
remove the impediment to its addressing and resolving the serious
constitutional questions raised.

In the first Emergency
Powers Cases,^[14] ordinary citizens and taxpayers were allowed
to question the constitutionality of several executive orders issued by
President Quirino although they were invoking only an
indirect and general interest shared in common with the public.  The Court dismissed the objection that they
were not proper parties and ruled that “the transcendental importance to the
public of these cases demands that they be settled promptly and definitely,
brushing aside, if we must, technicalities of procedure.” We have since
then applied this exception in many other cases.^[15]

The other above-mentioned
requisites have also been met in the present petitions.

It must be stressed that despite
the inhibitions pressing upon the Court when confronted with constitutional issues
like the ones now before it, it will not hesitate to declare a law or act
invalid when it is convinced that this must be done.  In arriving at this conclusion, its only
criterion will be the Constitution as God and its conscience gives it the light
to probe its meaning and discover its purpose. 
Personal motives and political considerations are irrelevancies that
cannot influence its decision.  Blandishment is as ineffectual as
intimidation.  For all the awesome power
of the Congress and the Executive, the Court will not hesitate to “make
the hammer fall, and heavily,” to use Justice Laurel’s pithy language, where the acts of these departments, or of any public official, betray the
people’s will as expressed in the Constitution.

It need only be added, to
borrow again the words of Justice
Laurel, that –

x  x
 x when the
judiciary mediates to allocate constitutional boundaries, it does not assert
any superiority over the other
departments; it does not in reality nullify or invalidate an act of the
Legislature, but only asserts the
solemn and sacred obligation assigned to it by the Constitution to determine conflicting
claims of authority under the Constitution and to establish for the parties in
an actual controversy the rights which that instrument secures and guarantees
to them.  This is in truth all that is
involved in what is termed “judicial supremacy” which properly is the
power of judicial review under the Constitution.^[16]

The cases before us
categorically raise constitutional questions that this Court must categorically
resolve.  And so we shall.

II

We proceed first to the examination of the
preliminary issues before resolving the more serious challenges to the
constitutionality of the several measures involved in these petitions.

The promulgation of P.D. No. 27 by President Marcos in the
exercise of his powers under martial law has already been sustained in Gonzales
v. Estrella and we find no reason to modify or
reverse it on that issue.  As for the
power of President Aquino to promulgate Proc. No. 131
and E.O. Nos. 228 and 229, the same was authorized under Section 6 of the
Transitory Provisions of the 1987 Constitution, quoted above.

The said measures were issued by President Aquino
before July 27, 1987, when
the Congress of the Philippines
was formally convened and took over legislative power from her.  They are not “midnight” enactments
intended to pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987, and the
other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July
22, 1987.  Neither is it correct to say
that these measures ceased to be valid when she lost her legislative power for,
like any statute, they continue to be in force unless modified or repealed by
subsequent law or declared invalid by the courts.  A statute does not ipso facto become
inoperative simply because of the dissolution of the legislature that enacted
it.  By the same token, President Aquino’s loss of legislative power did not have the effect
of invalidating all the measures enacted by her when and as long as she
possessed it.

Significantly, the Congress she is alleged to have undercut has
not rejected but in fact substantially affirmed the challenged measures and has
specifically provided that they shall be suppletory
to R.A. No. 6657 whenever not inconsistent with its provisions.^[17]
Indeed, some portions of the said measures, like the creation of the P50
billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No.
229, have been incorporated by reference in the CARP Law.^[18]

That fund, as earlier
noted, is itself being questioned on
the ground that it does not
conform to the requirements of a valid appropriation as specified in the Constitution.  Clearly, however, Proc. No. 131 is not an
appropriation measure even if it does provide for the creation of said fund,
for that is not its principal purpose. 
An appropriation law is one the primary and specific purpose of which is
to authorize the release of public funds from the treasury.^[19]
The creation of the fund is only incidental to the main objective of the
proclamation, which is agrarian reform.

It should follow that the
specific constitutional provisions invoked, to wit, Section 24 and Section
25(4) of Article VI, are not applicable. 
With particular reference
to Section 24, this obviously could not have been complied with for the simple
reason that the House of Representatives, which now has the exclusive power to
initiate appropriation measures, had not yet been convened when the
proclamation was issued.  The legislative
power was then solely vested in the President of the Philippines, who embodied, as it were, both houses of Congress.

The argument of some of
the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated
because they do not provide for retention limits as required by Article
XIII, Section 4 of the Constitution is no longer tenable.  R.A. No. 6657 does provide for such limits
now in Section 6 of the law, which in
fact is one of its most
controversial provisions.  This section
declares:

Retention Limits. – Except as otherwise provided in
this Act, no person may own or retain, directly or indirectly, any public or
private agricultural land, the size of which shall vary according to factors
governing a viable family-sized farm, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created
hereunder, but in no case shall retention by the landowner exceed five (5)
hectares.  Three (3) hectares may be
awarded to each child of the landowner, subject to the following
qualifications:  (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the land or
directly managing the farm; Provided, That landowners whose lands have been
covered by Presidential Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder, further, That
original homestead grantees or direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain the
same areas as long as they continue to cultivate said homestead.

The argument that E.O.
No. 229 violates the constitutional requirement that a bill shall have only one subject, to be expressed in its title,
deserves only short attention.  It is
settled that the title of the bill does not have to be a catalogue of its
contents and will suffice if the matters embodied in the text are relevant to
each other and may be inferred from the title.^[20]

The Court wryly observes
that during the past dictatorship, every presidential issuance, by whatever
name it was called, had the force and effect of law because it came from President
Marcos.  Such are the ways of
despots.  Hence, it is futile to argue,
as the petitioners do in G.R. No. 79744, that LOI 474 could not have repealed
P.D. No. 27 because the former was only a letter of
instruction.  The important thing is that
it was issued by President Marcos, whose word was law during that time.

But for all their
peremptoriness, these issuances from the President Marcos still had to comply
with the requirement for publication as this Court held in Tañada
v. Tuvera.^[21] Hence, unless published in the Official
Gazette in accordance with Article 2 of the Civil Code, they could not have any
force and effect if they were among those enactments successfully challenged in
that case.  (LOI 474 was published,
though, in the Official Gazette dated November 29, 1976.)

Finally, there is the
contention of the public respondent in G.R. No. 78742 that the writ of mandamus
cannot issue to compel the performance
of a discretionary act, especially by a specific department of the
government.  That is true as a general
proposition but is subject to one important qualification.  Correctly and categorically stated, the rule
is that mandamus will
lie to compel the discharge of the discretionary duty itself but not to control
the discretion to be exercised.  In other
words, mandamus can issue to require action only but not specific
action.

Whenever a duty is imposed upon a public official and an
unnecessary and unreasonable delay in the exercise of such duty occurs, if it
is a clear duty imposed by law, the courts will intervene by the extraordinary legal remedy of mandamus
to compel action.  If the duty is
purely ministerial, the courts will require specific action.  If the duty is purely discretionary, the
courts by mandamus will require action only.  For example, if an inferior court, public
official, or board should, for an unreasonable length of time, fail to decide a
particular question to the great detriment of all parties concerned, or a
court should refuse to take
jurisdiction of a cause when the law clearly gave it jurisdiction, mandamus
will issue, in the first case to require a decision, and in the second to
require that jurisdiction be taken of the cause.^[22]

And while it is true that
as a rule the writ will not be proper as long as
there is still a plain, speedy and adequate remedy available from the
administrative authorities, resort to the courts may still be permitted if the
issue raised is a question of law.^[23]

III

There are traditional distinctions
between the police power and the power of eminent domain that logically
preclude the application of both powers at the same time on the same subject. 
In the case of City of Baguio v. NAWASA,^[24]
for example, where a law required the transfer of all municipal waterworks
systems to the NAWASA in exchange for its assets of equivalent value, the Court
held that the power being exercised was
eminent domain because the property involved was wholesome and intended
for a public use.  Property condemned under
the police power is noxious or intended for a noxious purpose, such as a building on the verge of collapse,
which should be demolished for the public safety, or obscene materials, which
should be destroyed in the interest of public morals.  The confiscation of such property is not
compensable, unlike the taking of property under the power of expropriation, which requires the payment
of just compensation to the owner.

In the case of
Pennsylvania Coal Co. v. Mahon,^[25] Justice Holmes laid down the limits of the
police power in a famous aphorism: 
“The general rule at least is that while property may be regulated
to a certain extent, if regulation goes too far it
will be recognized as a taking.”
The regulation that went “too far” was a law prohibiting mining which
might cause the subsidence of structures for human habitation constructed on
the land surface.  This was resisted by a coal company which had earlier
granted a deed to the land over its mine but reserved all mining rights thereunder, with
the grantee assuming all risks and waiving any damage claim.  The Court held the law could not be sustained
without compensating the grantor. 
Justice Brandeis filed a lone dissent in which he argued that there was a valid exercise of the police power. 
He said:

Every restriction upon the use of property imposed in the exercise
of the police power deprives the owner of some right theretofore enjoyed, and
is, in that sense, an abridgment by the
State of rights in property without making compensation.  But restriction imposed to protect the public
health, safety or morals from dangers threatened is not a taking.  The restriction here in question is merely
the prohibition of a noxious use.  The property
so restricted remains in the possession of its owner.  The state does not appropriate it or make any
use of it.  The state merely prevents the
owner from making a use which interferes with paramount rights of the public.  Whenever the use prohibited ceases to be
noxious – as it may because of further changes in local or social conditions –
the restriction will have to be removed and the owner will again be free to
enjoy his property as heretofore.

Recent trends, however,
would indicate not a polarization but a mingling of the police power and
the power of eminent domain, with the latter being used as an implement of the
former like the power of taxation.  The
employment of the taxing power to achieve a police purpose has long been
accepted.^[26] As for the power of expropriation, Prof.
John J. Costonis of the University of Illinois
College of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the
police power) makes the following significant remarks:

Euclid,
moreover, was decided in an era when judges located the police and eminent
domain powers on different planets. 
Generally speaking, they viewed eminent domain as encompassing public acquisition of private
property for improvements that would be available for “public use,”
literally construed.  To the police
power, on the other hand, they assigned the less intrusive task of preventing
harmful externalities, a point reflected in the Euclid opinion’s reliance on an analogy to nuisance law to bolster its
support of zoning.  So long as
suppression of a privately
authored harm bore a plausible relation to some legitimate “public
purpose,” the pertinent measure need have afforded no compensation
whatever.  With the progressive growth of
government’s involvement in land use, the distance between the two powers has
contracted considerably.  Today
government often employs eminent domain interchangeably with or as a useful
complement to the police power – a trend expressly approved in the Supreme
Court’s 1954 decision in Berman v. Parker, which broadened the reach of
eminent domain’s “public use” test to match that of the police
power’s standard of “public purpose.”^[27]

The Berman case sustained
a redevelopment project and the improvement of blighted areas in the District of Columbia as a proper exercise of the police
power.  On the role of eminent domain in
the attainment of this purpose, Justice Douglas declared:

If those who govern the District of Columbia
decide that the Nation’s Capital should be beautiful as well as sanitary, there
is nothing in the Fifth Amendment that stands in the way.

Once the object is within the authority of Congress, the right to
realize it through the exercise of eminent domain is clear.  For
the power of eminent domain is merely the means to the end.^[28]

In Penn Central
Transportation Co. v. New York City,^[29] decided by a 6-3 vote in 1978, the U.S
Supreme Court sustained the respondent’s Landmarks Preservation Law under which
the owners of the Grand Central Terminal had not been allowed to construct a
multi-story office building over the Terminal, which had been designated a
historic landmark.  Preservation of the
landmark was held to be a valid objective of the police power.  The problem, however, was that the owners of
the Terminal would be deprived of the right to use the airspace above it
although other landowners in the area could do so over their respective
properties.  While insisting that there
was here no taking, the Court nonetheless recognized certain compensatory
rights accruing to Grand Central Terminal which it said would “undoubtedly
mitigate” the loss caused by the
regulation.  This “fair
compensation,” as he called it, was explained by Prof. Costonis in this wise:

In return for retaining the
Terminal site in its pristine landmark
status, Penn Central was authorized to transfer to neighboring properties the
authorized but unused rights accruing to the site prior to the Terminal’s
designation as a landmark – the rights which would have been exhausted by the
59-story building that the city refused to countenance atop the Terminal.  Prevailing bulk restrictions on neighboring
sites were proportionately relaxed,
theoretically enabling Penn
Central to recoup its losses at the Terminal site by constructing or selling to others the
right to construct larger, hence more profitable buildings on the
transferee sites.^[30]

The cases before us
present no knotty complication insofar as the question of compensable taking is
concerned.  To
the extent that the measures under challenge merely prescribe retention limits
for landowners, there is an exercise of the police power for the regulation of
private property in accordance with the Constitution.  But where, to carry out such regulation, it
becomes necessary to deprive such owners of whatever lands they may own in
excess of the maximum area allowed, there is definitely a taking under the power of eminent domain for
which payment of just compensation is imperative.  The taking contemplated is not a mere
limitation of the use of the land.  What
is required is the surrender of the title to and the physical possession of the
said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. 
This is definitely an exercise not of the police power but of the power
of eminent domain.

Whether as an exercise of
the police power or of the power of eminent domain, the several measures before us are challenged as violative of the due process
and equal protection clauses.

The challenge to Proc.
No. 131 and E.O. Nos. 228 and 229 on the ground that no retention limits are prescribed
has already been discussed and dismissed. 
It is noted that although they excited many bitter exchanges during the
deliberation of the CARP Law in Congress, the retention limits finally agreed
upon are, curiously enough, not being questioned in these petitions.  We therefore do not discuss them here.  The Court will come to the other claimed violations
of due process in connection with our examination
of the adequacy of just compensation as required under the power of
expropriation.

The argument of the small
farmers that they have been denied equal protection because of the absence of
retention limits has also become academic under Section 6 of R.A. No.
6657.  Significantly, they too have not
questioned the area of such limits. 
There is also the complaint that they should not be made to share the
burden of agrarian reform, an objection also made by the sugar planters on the
ground that they belong to a particular class with particular interests of
their own.  However, no evidence has been
submitted to the Court that the requisites of a valid classification have been
violated.

Classification has been
defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars.^[31]
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.^[32] The
Court finds that all these requisites have been met by the measures here
challenged as arbitrary and discriminatory.

Equal protection simply
means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities imposed.^[33] The petitioners have not shown that they
belong to a different class and entitled to a different
treatment.  The argument that not
only landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected.  There is a substantial distinction between
these two classes of owners that is clearly visible except to those who will
not see.  There is no need to elaborate
on this matter.  In any event, the Congress
is allowed a wide leeway in providing for a valid classification.  Its decision is
accorded recognition and respect by the courts of justice except only where its
discretion is abused to the detriment of the Bill of Rights.

It is worth remarking at
this juncture that a statute may be sustained under the police power only if
there is a concurrence of the lawful subject and the lawful method.  Put otherwise, the interests of the public
generally as distinguished from those of a particular class require the
interference of the State and, no less important, the means employed are
reasonably necessary for the attainment of the purpose sought to be achieved
and not unduly oppressive upon individuals.^[34]
As the subject and purpose of agrarian reform have been laid down by the
Constitution itself, we may say that the first requirement has been
satisfied.  What remains to be examined
is the validity of the method employed
to achieve the constitutional goal.

One of the basic
principles of the democratic system is that where the rights of the individual
are concerned, the end does not justify the means.  It is not enough that there be a valid
objective; it is also necessary that the means employed to pursue it be in
keeping with the Constitution.  Mere
expediency will not excuse constitutional shortcuts.  There is no question that not even the
strongest moral conviction or the most urgent public need, subject only to a
few notable exceptions, will excuse the bypassing of an individual’s rights.  It is no exaggeration to say that a person
invoking a right guaranteed under Article III of the Constitution is a majority
of one even as against the rest
of the nation who would deny him that right.

That right covers the
person’s life, his liberty and his property under Section 1 of Article III of
the Constitution.  With regard to
his property, the owner enjoys the added protection of Section 9, which
reaffirms the familiar rule that private property shall not be taken for public
use without just compensation.

This brings us now to the
power of eminent domain.

IV

Eminent domain is an
inherent power of the State that
enables it to forcibly acquire
private lands intended for public use upon payment of just compensation to the
owner.  Obviously, there is no need to
expropriate where the owner is willing to sell under terms also acceptable to
the purchaser, in which case an ordinary deed of sale may be agreed upon by the
parties.^[35] It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee,
that the power of eminent domain will come into play to assert the paramount
authority of the State over the interests of the property owner.  Private rights must then yield to the
irresistible demands of the public interest on the time-honored
justification, as in the case of the police power, that the welfare of the
people is the supreme law.

But for all its primacy and urgency, the power of expropriation
is by no means absolute (as indeed no power is absolute).  The limitation is found in the constitutional
injunction that “private property shall not be taken for public use
without just compensation” and in the abundant jurisprudence that has
evolved from the interpretation of this principle.  Basically, the requirements for a proper
exercise of the power are:  (1) public
use and (2) just compensation.

Let us dispose first of the argument raised by the petitioners in
G.R. No. 79310 that the State should first distribute public agricultural lands
in the pursuit of agrarian reform instead of immediately disturbing property
rights by forcibly acquiring private agricultural lands.  Parenthetically,
it is not correct to say that only public agricultural lands may be covered by
the CARP as the Constitution calls for “the just distribution of all agricultural
lands.” In any event, the decision to redistribute private agricultural
lands in the manner prescribed by the CARP was made by the legislative and
executive departments in the
exercise of their discretion.  We are not
justified in reviewing that discretion
in the absence of a clear showing that it has been abused.

A becoming courtesy admonishes us to respect the decisions of the
political departments when they decide what is known as the political
question.  As explained by Chief Justice Concepcion in the case of Tañada
v. Cuenco:^[36]

The term “political question” connotes what it means in
ordinary parlance, namely, a question of policy.  It refers to “those questions which,
under the Constitution, are to be decided by the people in their sovereign capacity; or in regard to which full
discretionary authority has been delegated to the legislative or executive
branch of the government.” It is concerned with issues dependent upon the
wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been
constricted with the enlargement of judicial power, which now includes the
authority of the courts “to
determine whether or not there has been a grave abuse of discretion amounting
to lack or excess of jurisdiction on the part of any branch or instrumentality
of the Government. “^[37] Even so, this should not be construed as a
license for us to reverse the other departments simply because their views may
not coincide with ours.

The legislature and the
executive have seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public
agricultural lands is first provided for, while also continuing apace under the
Public Land Act and other cognate laws). 
The Court sees no justification to interpose its authority,
which we may assert only if we believe that the political decision is not
unwise, but illegal.  We do not find it to be so.

In U.S. v. Chandler-Dunbar Water Power Company,^[38] it was held:

Congress having determined, as it did by the Act of March 3, 1909
that the entire St. Mary’s river between the American bank and the
international line, as well as all of the upland
north of the present ship canal, throughout its entire length, was “necessary for the purpose of navigation of said waters, and the
waters connected therewith,” that determination is conclusive in
condemnation proceedings instituted by the United States under that Act, and
there is no room for judicial review of the judgment of Congress x x x.

As earlier observed, the
requirement for public use has already been settled for us by the Constitution itself. 
No less than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural lands are to be
taken from their owners, subject to the prescribed maximum retention
limits.  The purposes specified in P.D.
No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the
constitutional injunction that the State adopt the necessary measures
“to encourage and undertake the just distribution of all agricultural
lands to enable farmers who are landless to own directly or collectively the
lands they till.” That public use, as pronounced by the fundamental law
itself, must be binding on us.

The second requirement,
i.e., the payment of just compensation, needs a longer and more
thoughtful examination.

Just compensation is
defined as the full and fair equivalent of the property taken from its owner by
the expropriator.^[39] It has been repeatedly stressed by this Court
that the measure is not the taker’s gain but the owner’s loss.^[40] The word “just” is used
to intensify the meaning of the word
“compensation” to
convey the idea that the equivalent to be rendered for the property to be taken
shall be real, substantial, full, ample.^[41]

It bears repeating that
the measures challenged in these petitions contemplate more than a mere
regulation of the use of private lands under the police power.  We deal here with an actual taking of private
agricultural lands that has dispossessed the owners of their property and
deprived them of all its beneficial use and enjoyment, to entitle them to the
just compensation mandated by the Constitution.

As held in Republic of
the Philippines v. Castellvi,^[42] there is compensable taking when the following
conditions concur:  (1) the expropriator
must enter a private property; (2) the entry must be for
more than a momentary period; (3) the entry must be under
warrant or color of legal authority; (4) the property must be devoted to public
use or otherwise informally appropriated or injuriously affected; and (5) the
utilization of the property for public use must be in such a way as to oust the
owner and deprive him of beneficial enjoyment of the property.  All these requisites are envisioned in the measures
before us.

Where the State itself is
the expropriator, it is not necessary for it to make a deposit upon its taking possession of the
condemned property, as “the compensation is a public charge, the
good faith of the public is pledged for its payment, and all the resources of
taxation may be employed in raising the amount.”^[43] Nevertheless, Section 16(e) of the CARP Law
provides that:

Upon receipt by the landowner of the corresponding payment or, in
case of rejection or no response from the landowners upon the deposit with an
accessible bank designated by the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR shall take immediate possession of
the land and shall request the proper Register of Deeds to issue a Transfer
Certificate of Title (TCT) in the name of the Republic of the Philippines.  The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.

Objection is raised,
however, to the manner of fixing the just compensation, which it is claimed is
entrusted to the administrative authorities in violation of judicial
prerogatives.  Specific reference is made
to Section 16(d), which provides that in case of the rejection or disregard by
the owner of the offer of the government to buy his land –

x  x  x the DAR shall
conduct summary administrative proceedings to determine the compensation for
the land by requiring the landowner, the LBP and other interested parties to
submit evidence as to the just compensation for the land, within fifteen (15)
days from the receipt of the notice. 
After the expiration of the
above period, the matter is deemed submitted for decision.  The DAR shall decide the case within thirty
(30) days after it is submitted for decision.

To be sure, the
determination of just compensation is a function addressed to the courts of
justice and may not be usurped by any other branch or official of the
government.  EPZA v. Dulay^[44] resolved a challenge to several decrees promulgated
by President Marcos providing that the just compensation for property under
expropriation should be either the assessment of the property by the government
or the sworn valuation thereof by the owner, whichever was
lower.  In declaring these decrees
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment
on judicial prerogatives.  It tends to
render this Court inutile in a matter which under the Constitution is reserved to it for final determination.

Thus, although in an expropriation proceeding the court technically
would still have the power to determine the just compensation for the property,
following the applicable decrees, its task would be relegated to simply stating the lower value of the property as declared either by the owner
or the assessor.  As a necessary
consequence, it would be useless for
the court to appoint commissioners under Rule 67 of the Rules of Court.  Moreover, the need to satisfy the due process
clause in the taking of private property is seemingly fulfilled since it cannot
be said that a judicial proceeding was not had before the actual taking. 
However, the strict application of the decrees during the proceedings
would be nothing short of a mere formality
or charade as the court has only to choose between the valuation of the owner
and that of the assessor, and its choice is always limited to the lower of the
two.  The court cannot exercise its
discretion or independence in determining what is just or fair.  Even a grade school pupil could substitute
for the judge insofar as the determination of constitutional just compensation
is concerned.

x    x    x

In the present petition, we are once again confronted with the same
question of whether the courts under P.D. No. 1533, which contains the same
provision on just compensation as its predecessor decrees, still have the power
and authority to determine just compensation, independent of what is stated by
the decree and to this effect, to appoint commissioners for such purpose.

This time, we answer in the affirmative.

x    x    x

It is violative of due process to deny
the owner the opportunity to prove that the valuation in the tax documents is
unfair or wrong.  And it is repulsive to
the basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail
over the judgment of a court promulgated only after expert commissioners have
actually viewed the property, after evidence and arguments pro and con have been presented, and after all
factors and considerations essential to a fair and just determination have been
judiciously evaluated.

A reading of the aforecited Section 16(d) will readily show that it does not
suffer from the arbitrariness that rendered the challenged decrees
constitutionally objectionable.  Although
the proceedings are described as summary, the landower
and other interested parties are nevertheless allowed an opportunity to submit
evidence on the real value of the property. 
But more importantly, the determination of the just compensation by the
DAR is not by any means final and conclusive upon the landowner or any
other interested party, for Section 16(f) clearly provides:

Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just compensation.

The determination made by
the DAR is only preliminary unless
accepted by all parties concerned. 
Otherwise, the courts of justice will still have the right to review with finality the
said determination in the exercise of what is admittedly a judicial function.

The second and more
serious objection to the provisions on just compensation is not as easily
resolved.  This refers to Section 18 of
the CARP Law providing in full as follows:

SEC. 18.  Valuation and
Mode of Compensation. – The LBP shall compensate the landowner in such
amount as may be agreed upon by the landowner and the DAR and the LBP, in
accordance with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as
may be finally determined by the court,
as the just compensation for the land.

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

(1)  Cash payment, under the following terms and
conditions:

(a)  For lands above fifty
(50) hectares, insofar as the excess hectarage is
concerned – Twenty-five percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any time.

(b)  For lands above
twenty-four (24) hectares and up to fifty (50) hectares – Thirty percent (30%)
cash, the balance to be paid in government financial instruments negotiable at any time.

(c)  For lands twenty-four
(24) hectares and below – Thirty-five percent (35%) cash, the balance to be
paid in government financial instruments negotiable at any time.

(2)  Shares of stock in
government-owned or controlled corporations, LBP preferred shares, physical
assets or other qualified investments in accordance with guidelines set by the
PARC;

(3)  Tax credits which can be
used against any tax liability;

(4)  LBP bonds, which shall
have the following features:

(a)  Market interest rates
aligned with 91-day treasury bill rates. 
Ten percent (10%) of the face value of the bonds shall mature every year
from the date of issuance until the tenth (10th) year:  Provided, That should the landowner
choose to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;

(b)  Transferability and
negotiability.  Such LBP bonds may be
used by the landowner, his successors-in-interest or his assigns, up to the
amount of their face value, for any of the following:

(i) 
Acquisition of land or other real properties of the government,
including assets under the Asset Privatization Program and other assets
foreclosed by government financial institutions in the same province or region
where the lands for which the bonds were paid are situated;

(ii)  Acquisition of shares of
stock of government-owned or controlled corporations or shares of stock owned
by the government in private corporations;

(iii)  Substitution for
surety or bail bonds for the provisional release of accused persons, or for
performance bonds;

(iv)  Security for loans with
any government financial institution, provided the proceeds of the loans shall
be invested in an economic enterprise, preferably in a small and medium-scale
industry, in the same province or region as the land for which the bonds are
paid;

(v)  Payment for various
taxes and fees to government:  Provided,
That the use of these bonds for these purposes will be limited to a certain
percentage of the outstanding balance of the financial instruments:  Provided, further, That the
PARC shall determine the percentages mentioned above;

(vi)  Payment for tuition
fees of the immediate family of the original bondholder in government
universities, colleges, trade schools, and other institutions;

(vii)  Payment for fees of
the immediate family of the original bondholder in government hospitals; and

(viii)  Such other uses as the PARC may from time to
time allow.

The contention of the
petitioners in G.R. No. 79777 is that the above provision is
unconstitutional insofar as it requires the owners of the expropriated
properties to accept just compensation therefor in
less than money, which is the only medium of payment allowed.  In support of this contention, they cite
jurisprudence holding that:

The fundamental rule in expropriation matters is that the owner of
the property expropriated is entitled to
a just compensation, which should be neither more nor less, whenever it
is possible to make the assessment,
than the money equivalent of
said property.  Just compensation has always
been understood to be the just and complete equivalent of the loss which the
owner of the thing expropriated has to suffer by reason of the expropriation.^[45] (Emphasis supplied.)

In  J.M. Tuazon Co. v. Land Tenure
Administration,^[46] this Court held:

It is well-settled that just compensation means the equivalent for
the value of the property at the time of its taking.  Anything beyond that is more, and anything
short of that is less, than just compensation. 
It means a fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain
would accrue to the expropriating entity. 
The market value of the land taken is the just compensation to which the
owner of condemned property is entitled, the market value being that sum
of money which a person desirous,
but not compelled to buy, and an owner, willing, but not compelled to sell,
would agree on as a price to be
given and received for such property. 
(Emphasis supplied.)

In the United States, where much of our jurisprudence on the
subject has been derived, the weight of authority is also to the effect that
just compensation for property expropriated is payable only in money
and not otherwise.  Thus –

The medium of payment of compensation is ready money or cash.  The condemnor cannot
compel the owner to accept anything but money, nor can the owner compel
or require 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.  When the power of eminent domain is resorted
to, there must be a standard medium of payment, binding upon both parties, and
the law has fixed that standard as money in cash.^[47]
(Emphasis supplied.)

Part cash and deferred payments are not and cannot, in the nature
of things, be regarded as a reliable and constant standard of compensation.^[48]

“Just compensation” for property taken by condemnation
means a fair equivalent in money, which must be paid at least within a
reasonable time after the taking, and it is not within the power of the
Legislature to substitute for such payment future obligations, bonds, or other
valuable advantage.^[49]
(Emphasis supplied.)

It cannot be denied from these cases that the traditional medium
for the payment of just compensation is money and no other.  And so, conformably, has just compensation
been paid in the past solely in that medium. 
However, we do not deal here with the traditional exercise of the
power of eminent domain.  This is not an ordinary expropriation where
only a specific property of relatively limited area is sought to be taken by
the State from its owner for a
specific and perhaps local purpose.  What
we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private
agricultural lands wherever found and of whatever kind as long as they are in excess of the maximum retention limits
allowed their owners.  This kind of
expropriation is intended for the benefit not only of a particular community or
of a small segment of the population but of the entire Filipino nation, from
all levels of our society, from the impoverished farmer to the land-glutted
owner.  Its purpose does not cover only
the whole territory of this country but goes beyond in time to the foreseeable
future, which it hopes to secure and edify with the vision and the sacrifice of
the present generation of Filipinos. 
Generations yet to come are as involved in this program as we are today, although hopefully
only as beneficiaries of a richer and more fulfilling life we will guarantee to
them tomorrow through our thoughtfulness today. 
And, finally, let it not
be forgotten that it is no less than the Constitution itself that has ordained
this revolution in the farms, calling for “a just distribution” among
the farmers of lands that have heretofore been the prison of their dreams but
can now become the key at last to their deliverance.

Such a program will involve not mere millions of pesos.  The cost will be tremendous.  Considering the vast areas of land subject to
expropriation under the laws before us, we estimate that hundreds of billions
of pesos will be needed, far more
indeed than the amount of P50 billion initially appropriated, which is already
staggering as it is by our present standards. 
Such amount is in fact not even fully available at this time.

We assume that the framers of the Constitution were aware of this
difficulty when they called for agrarian reform as a top priority project of
the government.  It is a part of this
assumption that when they envisioned the expropriation that would be needed,
they also intended that the just compensation would have to be paid not in the
orthodox way but a less conventional if more practical method.  There can be no doubt that they were aware of
the financial limitations of the government
and had no illusions that there would be enough money to pay in cash and in
full for the lands they wanted to be distributed among the farmers.  We may therefore assume that their intention
was to allow such manner of payment as is now provided for by the CARP Law,
particularly the payment of the balance (if the owner cannot be paid fully with
money), or indeed of the entire amount of the just compensation, with other
things of value.  We may also suppose that
what they had in mind was a similar scheme of payment as that prescribed in
P.D. No. 27, which was the law in force at the time they deliberated on the new
Charter and with which they presumably agreed in principle.

The Court has not found in the records of the Constitutional
Commission any categorical agreement among the members regarding the meaning to
be given the concept of just compensation as applied to the comprehensive
agrarian reform program being contemplated. 
There was the suggestion to “fine tune” the requirement to
suit the demands of the project even as it was also felt that they should
“leave it to Congress” to determine how payment should be made to the
landowner and reimbursement required from the farmer-beneficiaries.  Such innovations as “progressive
compensation” and “State-subsidized compensation” were also
proposed.  In the end, however, no
special definition of the just compensation for the lands to be expropriated
was reached by the Commission.^[50]

On the other hand, there
is nothing in the records either that militate against the assumptions we are
making of the general sentiments and intention of the members on the content
and manner of the payment to be made to the landowner in the light of the
magnitude of the expenditure and the limitations of the expropriator.

With these assumptions,
the Court hereby declares that the content and manner of the just compensation
provided for in the afore-quoted Section 18 of the CARP Law is not violative
of the Constitution.  We do not mind admitting that a
certain degree of pragmatism has influenced our decision on this issue, but
after all this Court is not a cloistered
institution removed from the realities and demands of society or oblivious to
the need for its enhancement.  The Court
is as acutely anxious as the rest of our people to see the goal of agrarian
reform achieved at last after the frustrations and deprivations of our peasant masses during all these
disappointing decades.  We are aware that
invalidation of the said section will result in the nullification of the entire
program, killing the farmer’s hopes even as they approach realization and
resurrecting the spectre of discontent and dissent in
the restless countryside.  That is not in
our view the intention of the Constitution, and that is not what we shall
decree today.

Accepting the theory that payment of the just compensation is not
always required to be made fully in money, we find further that the proportion
of cash payment to the other things of value constituting the total payment, as
determined on the basis of the areas of the lands expropriated, is not unduly
oppressive upon the landowner.  It is
noted that the smaller the land, the bigger the payment in money, primarily
because the small landowner will be needing it more than the big landowners,
who can afford a bigger balance in bonds and other things of value.  No less importantly, the government financial
instruments making up the balance of the payment are “negotiable at any
time.” The other modes, which are likewise available to the landowner at
his option, are also not unreasonable because payment is made in shares of
stock, LBP bonds, other properties or assets,
tax credits, and other things of value equivalent to the amount of just
compensation.

Admittedly, the compensation contemplated in the law will cause
the landowners, big and small, not a little inconvenience.  As already remarked, this cannot be
avoided.  Nevertheless, it is devoutly hoped that these countrymen of ours,
conscious as we know they are of the need for their forebearance
and even sacrifice, will not begrudge us their indispensable share in the
attainment of the ideal of agrarian reform. 
Otherwise, our pursuit of this elusive goal will be like the
quest for the Holy Grail.

The complaint against the
effects of non-registration of the land under E.O. No. 229 does not seem to be
viable any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the CARP Law.  This repeats the requisites of registration
as embodied in the earlier measure but
does not provide, as the latter did, that in case of failure or refusal to
register the land, the valuation thereof shall be that given by the
provincial or city assessor for tax purposes. 
On the contrary, the CARP Law says
that the just compensation shall be ascertained on the basis of the factors
mentioned in its Section 17 and in the manner provided for in Section 16.

The last major challenge
to CARP is that the landowner is divested of his property even before actual
payment to him in full of just compensation, in contravention of a
well-accepted principle of eminent domain.

The recognized rule,
indeed, is that title to the property
expropriated shall pass from the
owner to the expropriator only upon full payment of the just compensation.  Jurisprudence on this settled principle is
consistent both here and in other democratic jurisdictions.  Thus:

Title to property which is the subject of condemnation proceedings
does not vest the condemnor until the judgment fixing
just compensation is entered and paid, but the condemnor’s
title relates back to the date on which the petition under the Eminent Domain
Act, or the commissioner’s report under the Local Improvement Act, is filed.^[51]

x  x  x although the
right to appropriate and use land taken for a canal is complete at the time of
entry, title to the property
taken  remains in the owner until payment
is actually  made.^[52] (Emphasis supplied.)

In Kennedy v. Indianapolis,^[53]
the US Supreme Court cited several cases holding that title to property does
not pass to the condemnor until just compensation had
actually been made.  In fact, the
decisions appear to be uniformly to           this
effect.  As early as 1838, in Rubottom v. McLure,^[54]
it was held that “actual payment to the owner of the condemned property
was a condition precedent to the investment of the title to the property in the
State” albeit “not to the appropriation of it to public use.” In
Rexford v. Knight,^[55]
the Court of Appeals of New York
said that the construction upon the statutes was that the fee did not vest in
the State until the payment of the compensation although the authority to enter
upon and appropriate the land was complete prior to the payment.  Kennedy
further said that “both on principle and authority the rule is x x x that the right to enter on
and use the property is complete, as soon as the property is actually
appropriated under the authority of law for a public use, but
that the title does not pass from the owner without his consent, until just
compensation has been made to him.”

Our own Supreme Court has
held in Visayan Refining Co. v. Camus
and Paredes,^[56] that:

If the laws which we have exhibited or cited in the preceding
discussion are attentively examined it will be apparent that the method of
expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece of land can be
finally and irrevocably taken from an unwilling owner until compensation is
paid x  x  x.  (Emphasis supplied.)

It is true that P.D. No.
27 expressly ordered the emancipation of tenant-farmer as of October 21, 1972 and declared that he shall “be deemed the
owner” of a portion of land consisting of a family-sized farm except that
“no title to the land owned by him was to be actually issued to him unless
and until he had become a full-fledged member of a duly recognized farmers’
cooperative.” It was understood, however, that full payment of the just
compensation also had to be made first, conformably to the constitutional
requirement.

When E.O. No. 228,
categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of
October 21, 1972 of the
land they acquired by virtue of Presidential Decree No. 27. (Emphasis
supplied.)

it
was obviously referring to lands already validly acquired under the said
decree, after proof of full-fledged membership in the farmers’ cooperatives and
full payment of just compensation. 
Hence, it was also perfectly proper for the Order to also provide in its
Section 2 that the “lease rentals paid to the landowner by the
farmer-beneficiary after October 21, 1972 (pending transfer of ownership after full
payment of just compensation), shall be considered as advance payment for the land.”

The CARP Law, for its
part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the
deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank.  Until then, title also remains
with the landowner.^[57] No outright change of ownership is
contemplated either.

Hence, the argument that
the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.

It is worth stressing at
this point that all rights acquired by the tenant-farmer under P.D. No. 27,
as recognized under E.O. No. 228, are retained by him even now under R.A.
No. 6657.  This should counterbalance the
express provision in Section 6 of the said law that “the landowners whose
lands have been covered by Presidential Decree No. 27 shall be allowed to keep
the area originally retained by them thereunder, further, That original homestead grantees
or direct compulsory heirs who still own the original homestead at the time of
the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead.”

In connection with these
retained rights, it does not appear in G.R. No. 78742 that the appeal filed by
the petitioners with the Office of the President has already been
resolved.  Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude immediate
resort to judicial action, there are factual issues that have yet to be
examined on the administrative level, especially the claim that the petitioners
are not covered by LOI 474 because they do not own other agricultural lands
than the subjects of their petition. 
Obviously, the Court cannot resolve these issues.  In any event, assuming that
the petitioners have not yet exercised their retention rights, if any, under
P.D. No. 27, the Court holds that they are entitled to the new retention rights
provided for by R.A. No. 6657, which in fact are on the whole more liberal than
those granted by the decree.

V

The CARP Law and the
other enactments also involved in these cases have been the subject of bitter attack from those who point
to the shortcomings of these measures and ask that they be scrapped
entirely.  To be sure, these enactments are
less than perfect; indeed, they should be continuously re-examined and rehoned, that they may be sharper instruments for the
better protection of the farmer’s rights.  But we have to start somewhere.  In the pursuit of agrarian reform, we do not
tread on familiar ground but grope on terrain fraught with pitfalls and
expected difficulties.  This is
inevitable.  The CARP Law is not a tried
and tested project.  On the contrary, to
use Justice Holmes’s words, “it is an experiment, as all life is an
experiment,” and so we learn as we venture forward, and, if necessary, by
our own mistakes.  We cannot expect
perfection although we should strive for it by all means.  Meantime, we struggle as best we can in
freeing the farmer from the iron shackles that have unconscionably, and for so
long, fettered his soul to the soil.

By the decision we reach
today, all major legal obstacles to the comprehensive agrarian reform program
are removed, to clear the way for the true freedom of the farmer.  We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of the
past and from his own feelings of inadequacy and helplessness.  At last his servitude will be ended
forever.  At last the farm on which he
toils will be his farm.  It will
be his portion of the Mother Earth that will give him not only the staff of
life but also the joy of living.  And where once it bred for him only deep
despair, now can he see in it the fruition of his hopes for a more fulfilling
future.  Now at last can he banish from
his small plot of earth his insecurities
and dark resentments and “rebuild in
it the music and the dream.”

WHEREFORE, the
Court holds as follows:

1.  R.A. No. 6657, P.D. No.
27, Proc. No. 131, and E.O. Nos. 228
and 229 are SUSTAINED against all the constitutional objections raised in the
herein petitions.

2.  Title to all
expropriated properties shall be transferred to the State only upon full
payment of compensation to their respective owners.

3.  All rights previously
acquired by the tenant-farmers under P.D. No. 27 are retained and recognized.

4.  Landowners who were
unable to exercise their rights of retention under P.D. No. 27 shall enjoy the
retention rights granted by R.A. No. 6657 under the conditions therein
prescribed.

5.  Subject to the
above-mentioned rulings, all the petitions are DISMISSED, without pronouncement
as to costs.

SO ORDERED.

Fernan, C.J., Narvasa,
Melencio-Herrera, Gutierrez, Jr., Paras,
Feliciano, Gancayco, Padilla, Bidin,
Sarmiento, Cortes, Griño-Aquino,
Medialdea, and
Regalado, JJ., concur.

---

^[1]
Art. II, Sec. 5.

^[2]
1973 Constitution, Art. II, Sec. 6.

^[3]
Ibid., Art. XIV, Sec. 12.

^[4]
R.A. No. 6657, Sec. 15.

^[5]
149 SCRA 305.

^[6]
150 SCRA 89.

^[7]
55 SCRA 26.

^[8]
91 SCRA 294.

^[9]
113 SCRA 798.

^[10]
136 SCRA 27; 146 SCRA 446.

^[11]
Art. VIII, Sec. 4(2).

^[12]
Dumlao v. COMELEC, 95 SCRA 392.

^[13]
Ex Parte Levitt,
303 US 633.

^[14]
Araneta v. Dinglasan,
84 Phil. 368.

^[15]
Pascual v. Secretary of Public Works, 110 Phil. 331; PHILCONSA v. Gimenez, 15 SCRA 479; Sanidad v.
COMELEC, 73 SCRA 333.

^[16]
Angara v. Electoral Commission, 63 Phil 139.

^[17]
R.A. No. 6657, Sec. 75.

^[18]
Ibid., Sec. 63.

^[19]
Bengzon v. Secretary of Justice, 299 US
410.

^[20]
Alalayan v. NPC, 24 SCRA 172; Sumulong v. COMELEC, 73 Phil. 288; Tio v. Videogram
Regulatory Board, 151 SCRA 208.

^[21]
Supra.

^[22]
Lamb v. Phipps, 22 Phil. 456.

^[23]
Malabanan v. Ramento,
129 SCRA 359; Español v. Chairman, Philippine
Veterans Administration, 137 SCRA 314.

^[24]
106 Phil. 144.

^[25]
260 US 393.

^[26]
Powell v. Pennsylvania, 127 US 678; Lutz v. Araneta,
98 Phil. 148; Tio v. Videogram
Regulatory Board, supra.

^[27]
John J. Costonis,
“The Disparity Issue:  A Context for
the Grand Central Terminal Decision,” Harvard Law Review, Vol. 91:40,
1977, p. 404.

^[28]
348 US 1954.

^[29]
438 US 104.

^[30]
See note 27.

^[31]
International Harvester Co. v. Missouri, 234 US 199.

^[32]
People v. Cayat,
68 Phil. 12.

^[33]
Ichong v. Hernandez, 101 Phil. 1155.

^[34]
US v. Toribio,
15 Phil. 85; Fabie v. City of Manila, 21 Phil. 486; Case v. Board of
Health, 24 Phil. 256.

^[35]
Noble v. City of Manila, 67 Phil. 1.

^[36]
100 Phil. 1101.

^[37]
1987 Constitution, Art. VIII, Sec. 1.

^[38]
57 L ed. 1063.

^[39]
Manila Railroad Co. v. Velasquez, 32 Phil. 286.

^[40]
Province of Tayabas v. Perez, 66 Phil. 467; J.M. Tuazon &
Co., Inc. v. Land Tenure Administration, 31 SCRA 413; Municipality of Daet
v. Court of Appeals, 93 SCRA 503; Manotok v.
National Housing Authority, 150 SCRA 89.

^[41]
City of Manila v. Estrada,
25 Phil. 208.

^[42]
58 SCRA 336.

^[43]
Lewis, Law of Eminent Domain, 3rd
Edition, pp. 1166-1167.

^[44]
149 SCRA 305.

^[45]
Manila Railroad Co. v. Velasquez,
32 Phil. 286; Province
of Tayabas v. Perez, supra,
at note 40.

^[46]
31 SCRA 413.

^[47]
Mandl v. City of Phoenix,
18 p 2d 273.

^[48]
Sacremento Southern R. co. v. Heilbron, 156 Cal. 408, 104 pp. 979, 980.

^[49]
City of Waterbury v. Platt Bros. & Co., 56 A 856, 76 Conn, 435 citing Butler v. Ravine Road Sewer Com’rs, 39 N.J.L. 665; Bloodgood v.
Mohawk v. H.R.R. Co., N.Y. 18 Wend. 9 35, 31 Am. Dec. 313; Sanborn  v. Helden,
51 Cal 266; Burlington & C.R.
Co. v. Schweikart, 14 p 329, 10 Colo, 178; 23 Words and Phrases, pl. 460.

^[50]
Record of the Constitutional Commission,
Vol. 2, pp. 647, 704; Vol. 3, pp. 16-20, 243-247.

^[51]
Chicago Park Dist. v. Downey Coal Co., 1 Ill 2d 54.

^[52]
Kennedy v. Indianapolis, 103
US 599, 26 L ed
550.

^[53]
Ibid.

^[54]
4 Blkf., 508.

^[55]
11 NY 314.

^[56]
40 Phil. 550.

^[57]
Sec. 16(d).