HOSPICIO DE SAN JOSE De Barili, Barili , Petitioner VS DEPARTMENT DEPARTMENT OF AGRARIAN REFORM,Respondent.September REFORM,Respondent.September 23, 2005 FACTS Petitioner Hospicio de San Jose de Barili (Hospicio) is a charitable orani!ation created as a bod" corporate in #$25 b" %ct &o. 323$. 'he la as enacted in order to ormall" accept the oer made b" Pedro Pedro *+i and Benina *+i to establish a home or the care and s+pport, ree o chare, o indient inalids and incapacitated and helpless persons. 'he Hospicio as to be maintained ith the reen+es o the personal and real properties to be endoed b" the *+is and other donors. Section - o %ct &o. 323$ proides that t/he personal and real propert" donated to the Hospicio/ b" its o+nders or b" other persons shall not be sold +nder an" consideration. n #0 ctober #$1, the epartment o %rarian Reorm Reional ice (%RR) Reion V44 iss+ed an order ordainin that to parcels o land oned b" the Hospicio be placed +nder peration and 'ranser in aor o tent"6to (22) tillers thereo as beneiciaries. Presidential ecree (P..) &o. 2, a land reorm la, as cited as leal basis or the order. 'he Hospicio iled a motion or the reconsideration o the order ith the epartment o %rarian Reorm (%R) Secretar", citin the aorementioned Section - o %ct &o. 323$. 4t ar+ed that %ct &o. 323$ is a special la, hich co+ld not hae been repealed b" P.. &o. 2, a eneral la, or b" the latters eneral repealin cla+se. 'he Secretar" o %R re7ected the motion. 'he *o+rt o %ppeals airmed the decision o the %R Secretar" that Section - o %rticle 3-3$ as e8pressl" repealed b" P 2 and R% 995 :nsatisied ith the *o+rt o %ppeals ecision, the Hospicio loded the present Petition or Reie. 'he Hospicio allees that P.. &o. 2, the *%R, and ;8ec+tie rder &o. -0/ all iolate Section #0, %rticle 444 o the *onstit+tion, hich proides that no la impairin the obliation o contracts shall be passed. , representin respondent %R, bl+ntl" replies that %ct &o. 323$ as repealed b" P.. P.. &o. 2 and Rep. %ct &o. 995, hich do not e8empt lands oned oned b" eleemos"nar" or charitable instit+tions nstit+tions rom the coerae o those ararian reorm las.
ISSUE 4S the land transer +nder the P 2 and *%R can be considered as conentional Sale +nder *iil as?
WON te !ale "roi#ited $%der Sectio% & o' Act No. ()(* i%cl$de! e+e% a 'orced !ale.
A& P.. &o. 2 and the *%R, both enacted to implement the +rentl" needed polic" o ararian reorm, iolate the non6 impairment o contracts cla+se +nder the Bill o Rihts.
RULING No. 4t is a Forced a Forced Sale. #. The obligation arises by compulsion of law @ @ Section - o %ct &o. 323$ prohibits the sale +nder an" consideration o the lands donated to the Hospicio. B+t the land transers mandated +nder P.. &o. 2 cannot be considered a conentional sale +nder o+r ciil las.>enerall", las.>enerall", sale arises o+t o a contract+al obliation. 'h+s, it m+st meet the irst essential re=+isite o eer" contract that is the presence o consent.#3/ *onsent implies an act o olition in enterin into the areement. 'he absence or itiation o consent renders the sale either oid or oidable.4n this case, the depriation o the Hospicios propert" did not arise as a conse=+ence o the Hospicios consent to the transer. 'here as no meetin o minds beteen the Hospicio, on one hand, and the %R or the tenants, on the other, on the properties and the ca+se hich are to constit+te the contract that is to sere +ltimatel" as the basis or the transer o onership o the s+b7ect lands. 4nstead, the obliation to transer arises b" comp+lsion o la, partic+larl" P.. P.. &o. 2. No. It contemplates a conventional sale. Therefore, it cannot be exempted from PD 27 or !"P where the sale involved is forced sale. The prohibition does not apply. #. The word sale pertains to its concept in civil law with the consent being present # 'he contemporaneo+s constr+ction o Section - indicates that the prohibition intended b" the craters o the la pertained onl" to conentional sales, and not orced sales. 'he la as prom+lated in #$25, or hen the Spanish *iil *ode o #11$ as in eect. 'he proisions in the *iil *ode reerrin to orced sales ere not deried rom the Spanish *iil *ode. n the other hand, the consens+al nat+re o the contract o sale, and o contracts in eneral, is reconi!ed +nder the Spanish *iil *ode. :nder %rticle #29# o the Spanish *iil *ode, there is no contract +nless the consent o the contractin parties e8ists.;identl", the ord sale, as contemplated b" the ramers o the la in #$25, pertains to its concept in ciil la, ith the re=+isite o consent bein present. 4t cannot reer to sales or dispositions that arise b" operation o la, s+ch as t hro+h 7+dicial e8ec+tion, or, as in this case, e8propriation.'h+s, e can hardl" characteri!e the ac=+isition o the s+b7ect properties rom the Hospicio or the beneit o the tenants as a sale, ithin the contemplation o Section - o %ct &o. 323$. 'he transer arises rom comp+lsion o la, and not the desire o an" parties. ;en i the Hospicio had ol+ntaril" oered to s+rrender its properties to ararian reorm, the res+ltin transaction o+ld not be considered as a conentional sale, since the obliation is created not o+t o the mandate o the parties, b+t the ill o the la.,Notela.,Note- 'he co+rt re+sed to r+le that Section - o %ct 323$ is repealed. 4nstead, it r+led on non6applicabilit" o the prohibition in s.-, %ct 323$.) No. Ae hae held that the States e8ercise o police poers ma" preail oer obliations imposed b" priate contracts. ;speciall" in point is abilin . &H%,33/ herein a la a+thori!in the e8propriation o properties in aor o =+aliied s=+atter amilies as challened on the basis o the non6 impairment cla+se. 'he *o+rt heldC The stated ob$ective of the decree, namely, to resolve the land tenure problem in the !gno%&everi'a area to allow the implementation of the comprehensive development plans for this depressed community, provides the $ustification for the exercise of the police power of the (tate. The police power of the (tate has been described described as )the most essential, insistent and illimitable of powers.) powers.) It is a power inherent in the the (tate, plenary, plenary, )suitably vague and far from precisely defined, rooted in the conception that man in organi'ing the state and imposing upon the government limitations to safeguard constitutional rights did not intend thereby to enable individual citi'ens or group of citi'ens to obstruct unreasonably the enactment of such salutary measure to ensure communal peace, safety, good order and welfare. The ob$ection raised by petitioners that P.D. *o. +- impairs the obligations of contract is without merit. The constitutional guaranty of non%impairment of obligations of contract is limited by and sub$ect to the exercise of the police power of the (tate in the interest of public health, safety, morals and general welfare./01
