G.R. No. 217943, June 06, 2016
J. MELLIZA ESTATE DEVELOPMENT COMPANY, INC., REPRESENTED BY ITS DIRECTOR, ATTY. RAFAEL S. VILLANUEVA, Petitioner, v. ROSENDO SIMOY, GREGORIO SIMOY AND CONSEJO SIMOY, Respondents.
D E C I S I O N
LEONARDO-DE CASTRO, J.:
This petition for review under Rule 45 of the Rules of Court challenges the August 27, 2014 Decision1 and the March 24, 2015 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 04944, which affirmed the July 10, 2009 Decision3 and the January 25, 2010 Resolution4 of the Office of the President (OP). The issuances of the OP reversed and set aside the June 20, 2005 Order5 of the Secretary of the Department of Agrarian Reform (DAR) granting the application for retention filed by the petitioner, J. Melliza Estate Development Company, Inc. (petitioner).
The CA summarized the facts of the case as follows:
The present controversy arose from an application for retention filed by Melizza Estate Development Company, Inc., (petitioner) over a portion of the landholding situated at Barangay San Jose, San Miguel, Iloilo, identified as Lot No. 665, covered by Transfer Certificate of Title No. T-76786 containing an area of 87,313 square meters, or 8.7313 hectares and registered in the name of the petitioner.
The said lot was transferred to respondents Rosendo Simoy, Gregorio Simoy and Consejo Simoy, as evidenced by TCT No. EP-7881, TCT No. EP-7882, TCT No. EP-7880 and TCT No. EP - 7883, which were registered in the Register of Deeds for the Province of Iloilo on 30 August 1998, pursuant to Emancipation Patent (EP) Nos. A-112160, A-112161, A-112163, A- 112164-H issued by the Department of Agrarian Reform (DAR). Respondents were farmer-beneficiaries of the landholding chosen by the petitioner as its retention area under Presidential Decree No. 27. Hence, petitioner sought to cancel the said EPs on the ground that it applied to retain the land subject of the EPs.
The Municipal Agrarian Reform Office (MARO) of Malo, Iloilo, recommended the approval of the application for retention to which the Provincial Agrarian Reform Office (PARO) for Iloilo province concurred in an endorsement letter to the Regional Director of DAR Regional Office No. 6. In an Order, dated 22 May 2001, by the Regional Director, the latter upheld petitioner's right of retention and approved its chosen retention area by citing Section 6 of RA 6657 which provides for a five (5) hectare retention limit for landowners.
Consequently, respondents filed a Motion for Reconsideration on the ground that the petitioner had already availed of its right of conversion over the 55.01 hectares located at Barangay Jibao-an, Pavia, Iloilo, hence, it should be disqualified from other landholdings. However, the Motion was denied by the Regional Director in his Order dated 9 July 2001 ruling that the arguments advanced by the movants have already been considered and exhaustively discussed.
Subsequently, respondents filed their Notice of Appeal but the same was denied by the Regional Director in an Order of Finality dated 07 August 2001, on the ground that the appeal was filed out of time.
Aggrieved, respondents appealed their case to the Secretary of Agrarian Reform. In resolving the appeal, the DAR Secretary, in his Order dated 20 June 2005, still found the appeal devoid of merit and affirmed the findings of the Regional Director.
Undaunted, respondents filed their Memorandum on Appeal with the Office of the President on 21 July 2005. In a Decision, dated 10 July 2009, the Office of the President resolved to give due course to the appeal and reversed and set aside the Order issued by the DAR Secretary. Thereafter, petitioner moved for reconsideration of the decision of the Office of the President but the same was denied in a Resolution dated 25 January 2010.6
WHEREFORE, with the foregoing disquisition, the instant petition is DISMISSED for lack of merit.
Accordingly, the assailed Decision dated 10 July 2009 and Resolution dated 25 January 2010 of the Office of the President in O.P. Case No. 05-H-250 are hereby AFFIRMED.
THE COURT OF APPEALS ERRED IN SUSTAINING THE DECISION OF THE OFFICE OF THE PRESIDENT THAT ALTHOUGH PETITIONER IS "ENTITLED TO RETENTION," YET "IT IS NOW BARRED TO EXERCISE SUCH RIGHT" BY REASON OF ALLEGED DELAY OR LACHES, WHEN THERE IS NO SUCH CIRCUMSTANCE PRESENT IN THE CASE, AS PETITIONER FILED ITS APPLICATION FOR RETENTION PURSUANT TO THE PROVISION OF R.A. 6657 AND OF THE NEW RETENTION RIGHTS PRONOUNCED BY THE SUPREME COURT IN THE CASE OF "ASSOCIATION OF SMALL LANDOWNERS OF THE PHILS., INC., ET. AL V. HONORABLE SECRETARY OF AGRARIAN REFORM" AND FOLLOWING THE APPLICABLE DAR ADMINISTRATIVE ORDER ON THE MATTER.
THE COURT OF APPEALS ERRED IN DISREGARDING THE DECISIONS OF THE DAR REGIONAL DIRECTOR AND THE DAR SECRETARY IN THE EXERCISE OF THEIR PRIMARY JURISDICTION AND COMPETENCE AS ADMINISTRATIVE BODIES SPECIALIZED IN IMPLEMENTING AGRARIAN REFORM LAWS WHEN IT GRANTED PETITIONER RETENTION RIGHTS, INSTEAD OF RESPECTING THEIR DECISION IN DUE RESPECT TO THE EXPRESS PROVISION OF SECTION 54 OF R.A. 6657 THAT "THE FINDINGS OF FACT OF THE DAR SHALL BE FINAL AND CONCLUSIVE IF BASED ON SUBSTANTIAL EVIDENCE."
CONSEQUENTLY, THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE OFFICE OF THE PRESIDENT IN DENYING PETITIONER THE EXERCISE OF ITS RETENTION RIGHTS, INSTEAD OF SUSTAINING THE EARLIER DECISIONS OF THE REGIONAL DIRECTOR AND THE DAR SECRETARY.8
Section 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.12
The right of retention, as protected and enshrined in the Constitution, balances the effects of compulsory land acquisition by granting the landowner the right to choose the area to be retained subject to legislative standards. Necessarily, since the said right is granted to limit the effects of compulsory land acquisition against the landowner, it is a prerequisite that the land falls under the coverage of the OLT Program of the government. If the land is beyond the ambit of the OLT Program, the landowner need not — as he should not — apply for retention since the appropriate remedy would be for him to apply for exemption. As explained in the case of Daez v. CA (Daez):
Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or corn lands. The requisites for coverage under the OLT program are the following: (1) the land must be devoted to rice or corn crops; and (2) there must be a system of share-crop or lease-tenancy obtaining therein. If either requisite is absent, a landowner may apply for exemption. If either of these requisites is absent, the land is not covered under OLT. Hence, a landowner need not apply for retention where his ownership over the entire landholding is intact and undisturbed.
If the land is covered by the OLT Program which hence, renders the right of retention operable, PD 27 — issued on October 21, 1972 — confers in favor of covered landowners who cultivate or intend to cultivate an area of their tenanted rice or corn land the right to retain an area of not more than seven (7) has thereof. Subsequently, or on June 10, 1998, Congress passed R.A. 6657 which modified the retention limits under PD 27. In particular, Section 6 of RA 6657 states that covered landowners are allowed to retain a portion of their tenanted agricultural land not, however, to exceed an area of five (5) has. and, further thereto, provides that an additional three (3) has. 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. In the case of Heirs of Aurelio Reyes v. Garilao (Reyes), however, the Court held that a landowner's retention rights under RA 6657 are restricted by the conditions set forth in LOI 474 issued on October 21, 1976 which reads:WHEREAS, last year I ordered that small landowners of tenanted rice/corn lands with areas of less than twenty-four hectares but above seven hectares shall retain not more than seven hectares of such lands except when they own other agricultural lands containing more than seven hectares or land used for residential, commercial, industrial or other urban purposes from which they derive adequate income to support themselves and their families;Based on the above-cited provisions, it may be readily observed that LOI 474 amended PD 27 by removing any right of retention from persons who own:
WHEREAS, the Department of Agrarian Reform found that in the course of implementing my directive there are many landowners of tenanted rice/corn lands with areas of seven hectares or less who also own other agricultural lands containing more than seven hectares or lands used for residential, commercial, industrial or other urban purposes where they derive adequate income to support themselves and their families;
WHEREAS, it is therefore necessary to cover said lands under the Land Transfer Program of the government to emancipate the tenant-farmers therein.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby order the following:
1. You shall undertake to place under the Land Transfer Program of the government pursuant to Presidential Decree No. 27, all tenanted rice/corn lands with areas of seven hectares or less belonging to landowners who own other agricultural lands of more than seven hectares in aggregate areas or lands used for residential, commercial, industrial or other urban purposes from which they derive adequate income to support themselves and their families.
2. Landowners who may choose to be paid the cost of their lands by the Land Bank of the Philippines shall be paid in accordance with the mode of payment provided in Letter of Instructions No. 273 dated May 7,1973.cralawred(a) other agricultural lands of more than seven (7) has. in aggregate areas; orTo clarify, in Santiago v. Ortiz-Luis, the Court, citing the cases of Ass'n. of Small Landowners and Reyes, stated that while landowners who have not yet exercised their retention rights under PD 27 are entitled to new retention rights provided for by RA 6657, the limitations under LOI 474 would equally apply to a landowner who filed an application under RA 6657.
(b) lands used for residential, commercial, industrial or other urban purposes from which they derive adequate income to support themselves and their families.
Nevertheless, while the CA properly upheld the denial of the petition for retention, the Court must point out that the November 24, 2009 DARCO Order inaccurately phrased Romulo Sandueta's entitlement to the remaining 14.0910-hectare landholding, outside of the 4.6523-hectare subject portion, as a vestige of his retention right. Since the 14.0910-hectare landholding was not shown to be tenanted and, hence, outside the coverage of the OLT Program, there would be no right of retention, in its technical sense, to speak of. Keeping with the Court's elucidation in Daez, retention is an agrarian reform law concept which is only applicable when the land is covered by the OLT Program; this is not, however, the case with respect to the 14.0910-hectare landholding. Thus, if only to correct any confusion in terminology, Romulo Sandueta's right over the 14.0910-hectare landholding should not be deemed to be pursuant to any retention right but rather to his ordinary right of ownership as it appears from the findings of the DAR that the landholding is not covered by the OLT Program.14 [Emphases Supplied]
TCT No. 76779 (2.6884 has.)
TCT No. 76780 (.2894 ha.)
TCT No. 76781 (.4791 has.)
TCT No. 76782 (.1934 ha.)
TCT No. 76783 (6.3882 has.)
TCT No. 76784 (1.0739 ha.)
TCT No. 76785 (2.3539 has.)
TCT No. 76786 (8.7313 has.)
TCT No. 76787 (1.5738 has.)
TCT No. 76788 (39. 4806 has.)
TCT No. 76789 (.9943 ha.)
In this case, the DARAB and the Court of Appeals agreed that respondents' total landholding is 25.2548 hectares, and that 9.8683 hectares thereof was riceland, which was subjected to Operation Land Transfer, while 15.3864 hectares was sugarland. In addition, the PARAD and the DARAB found that the 15.3864 hectares of sugarland was subdivided by respondents into a 4.8836 subdivision lot to support themselves and their family; hence, under LOI No. 474 and Administrative Order No. 4, series of 1991, the PARAD and the DARAB held that respondents are no longer entitled to retain seven hectares of the land subject to Operation Land Transfer. The decisions of the PARAD and the DARAB are supported by the Court's ruling in Heirs of Aurelio Reyes v. Garilao cited above. As the PARAD and the DARAB found that respondents are disqualified to retain the parcel of land, which is the subject matter of this case, there was no ground to cancel the emancipation patent of petitioner; hence, the DARAB affirmed the decision of the PARAD dismissing respondents' complaint for lack of merit.19 [Emphases Supplied]
In this case, records reveal that aside from the 4.6523-hectare tenanted riceland covered by the OLT Program, i.e. the subject portion, petitioners' predecessors-in-interest, Sps. Sandueta, own other agricultural lands with a total area of 14.0910 has_which therefore triggers the application of the first disqualifying condition under LOI 474 as above-highlighted. As such, petitioners, being mere successors-in-interest, cannot be said to have acquired any retention right to the subject portion. Accordingly, the subject portion would fall under the complete coverage of the OLT Program hence, the 5 and 3-hectare retention limits as well as the landowner's right to choose the area to be retained under Section 6 of RA 6657 would not apply altogether.20 [Emphasis and Underscoring Supplied]
1Rollo, pp. 66-78. Penned by Associate Justice Marie Christine Azcarraga-Jacob and concurred in by Associate Justices Ramon Paul L. Hernando and Marilyn B. Lagura-Yap.
2 Id. at 92-96.
3 Id. at 206-210.
4 Id. at 168-170.
5 Id. at 183-188.
6 Id. at 67-68.
7 Id. at 78.
8 Id. at 40-41.
9 256 Phil. 777(1989).
10 382 Phil. 742 (2000).
11 526 Phil. 808 (2006).
12Department of Agrarian Reform v. Carriedo, G.R. No. 176549, January 20, 2016.
13 721 Phil, 883(2013).
14 Id. at 890-894.
15Rollo, pp. 195-199.
16 Id. at 200-205.
17 Id. at 264-325.
18 694 Phil. 605(2012).
19 Id. at 634 (2012).
20Supra note 15, at 893-894 (2013).