Department of Agrarian Reform, Quezon City & Pablo Mendoza vs. Romeo C. Carriedo

Manila

SPECIAL THIRD DIVISION

[ G.R. No. 176549. October 10, 2018 ]

DEPARTMENT OF AGRARIAN REFORM, QUEZON CITY & PABLO MENDOZA, PETITIONERS, V. ROMEO C. CARRIEDO, RESPONDENT.

RESOLUTION

JARDELEZA, J.:

We resolve the motion for reconsideration1'filed by the Department of Agrarian Reform (DAR) of the Decision2'dated January 20, 2016.

At the onset, we note that the DAR was not given the opportunity to participate in the proceedings before the Court of Appeals and before this Court, until it filed its motion for reconsideration of this Court's Decision. In its motion for reconsideration, the DAR contends that the agency had been denied due process when it was not afforded the opportunity to refute the allegations against the validity of DAR Administrative Order No. 5, Series of 20063'(AO 05-06) before the Court of Appeals and before this Court.4'It argues that the basic requirement of due process has not been accorded to the agency because it was not even notified of the petition filed before the Court of Appeals; nor did the Court of Appeals notify the DAR of the proceedings and its Decision.5'The DAR, therefore, insists that the Decision dated January 20, 2016 be reconsidered by this Court especially so that the issues involve the enforcement and validity of its regulations.6

We agree with the DAR. Being the government agency legally mandated to implement the Comprehensive Agrarian Reform Law of 19887'(CARL) and the primary agency vested with the expertise on the technicalities of the CARL,8'the DAR's position on the issues raised before us deserves cogent consideration. In fact, the CARL specifically empowers the DAR to issue rules and regulations, whether substantive or procedural, to carry out the objects and purposes of the law.9'Administrative rules and regulations ordinarily deserve to be given weight and respect by the courts in view of the rule-making authority given to those who formulate them and their specific expertise in their respective fields.10'In this case, it cannot be denied that the DAR possesses the special knowledge and acquired expertise on the implementation of the agrarian reform program. To pay no heed to its position on the issues raised before us ignores the basic precepts of due process. Therefore, under these circumstances, we are impelled to revisit our Decision, this time taking into account the arguments and position of the DAR.

To reiterate, the core issue before us is whether Romeo C. Carriedo's (Carriedo) previous sale of his landholdings to Peoples' Livelihood Foundation, Inc. (PLFI) can be treated as the exercise of his retention rights, such that he cannot lawfully claim the subject landholding as his retained area anymore.11'The issue necessarily touches on the validity of Item No. 4 of AO 05-06 and the relevant provisions of the CARL. Further, the issue of whether Certificates of Land Ownership Awards (CLOAs) possess the indefeasibility accorded to a Torrens certificate of title is likewise raised before this Court.

We will discuss the issues'in seriatim.

On the validity of Item No. 4, AO 05-06

The Decision adjudged Item No. 4 of AO 05-06 as'ultra vires'for providing terms which appear to expand or modify some provisions of the CARL.12'The DAR argues that this ruling sets back the Comprehensive Agrarian Reform Program by upsetting its established substantive and procedural components. Particularly, the DAR contends that the nullification of Item No. 4 of AO 05-06 disregarded the long-standing procedure where the DAR treats a sale (without its clearance) as valid based on the doctrine of estoppel, and that the sold portion is treated as the landowner's retained area.13

Applying Item No. 4 of AO 05-06 to the facts of this case, the DAR submits that the subject landholding cannot be considered as the retained area of Carriedo anymore because he has already exercised his right of retention when he previously sold his landholdings without DAR clearance.14'The DAR specifies that sometime in June 1990, Carriedo unilaterally sold to PLFI his agricultural landholdings with approximately 58.3723 hectares. The DAR, therefore, argues that Carriedo's act of disposing his landholdings is tantamount to the exercise of his right of retention under the law.15

Item No. 4 of AO 05-06, provides:

II. STATEMENT OF POLICIES

x x x x

4. Where the transfer/sale involves more than the five (5) hectare retention area, the transfer is considered violative of Sec. 6 of R.A. No. 6657.

In case of multiple or series of transfers/sales, the first five (5) hectares sold/conveyed without DAR clearance and the corresponding titles issued by the Register of Deeds (ROD) in the name of the transferee shall, under the principle of estoppel, be considered valid and shall be treated as the transferor/s' retained area but in no case shall the transferee exceed the five-hectare landholding ceiling pursuant to Sections 6, 70 and 73(a) of R.A. No. 6657. Insofar as the excess area is concerned, the same shall likewise be covered considering that the transferor has no right of disposition since CARP coverage has been vested as of 15 June 1988. Any landholding still registered in the name of the landowner after earlier dispositions totaling an aggregate of five (5) hectares can no longer be part of his retention area and therefore shall be covered under CARP.

The DAR's argument has merit.

The Constitution mandates for an agrarian reform program, thus:

ARTICLE XIII

Agrarian and Natural Resources Reform

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. (Emphasis supplied.)

To give life to the foregoing Constitutional provision, the CARL provides, among others:

Sec. 2. Declaration of Principles and Policies. -It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive the'highest consideration to promote social justice'and to move the nation toward sound rural development and industrialization, and the establishment of owner cultivatorship of economic-size farms as the basis of Philippine agriculture.

To this end,'a more equitable distribution and ownership of land, with due regard to the rights of landowners to just compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and farmworkers with the opportunity to enhance their dignity and improve the quality of their lives through greater productivity of agricultural lands. (Emphasis supplied.)

Both the Constitution and CARL underscore the underlying principle of the agrarian reform program, that is,'to endeavor a more equitable and just distribution of agricultural lands taking into account, among others, equity considerations.'We find merit in the DAR's contention that the objective of AO 05-06 is equitable16'that in order to ensure the effective implementation of the CARL, previous sales of landholding (without DAR clearance) should be treated as the exercise of retention rights of the landowner, as embodied in Item No. 4 of the said administrative order.17

The equity in this policy of AO 05-06 is apparent and easily discernible. By selling his landholdings, it is reasonably presumed that the landowner already received an amount (as purchase price) commensurate to the just compensation conformable with the constitutional and statutory requirement. At this point, equity dictates that he cannot claim anymore, either in the guise of his retention area or otherwise, that which he already received in the previous sale of his land.

In'Delfino, Sr. v. Anasao,18'the issue of whether the inclusion of the two-hectare portion sold by Delfino to SM Prime Holdings, Inc. (without DAR clearance) resulted in the diminution of his retention rights was raised before this Court. In that case, Delfino was adjudged by the DAR to be entitled to five hectares of retention area, to be taken out from the tenanted area that he owns. Subsequently, however, and without prior clearance from the DAR, Delfino sold two hectares of land to SM Prime Holdings, Inc. This supervening event prompted the DAR Secretary to clarify his previous Order (albeit the same having already attained finality) and'found it fair and equitable to include the two-hectare portion sold to SM Prime Holdings, Inc. as part of Delfino's retention area. Consequently, Delfino is now entitled only to the balance of three hectares. Upon motion for reconsideration by Delfino, the DAR Secretary explained that the clarification was made'in order not to circumvent the five-hectare limitation as said landowner "cannot [be allowed to] simultaneously enjoy x x x the proceeds of the [sale] and at the same time exercise the right of retention under CARP.'"19'This Court upheld the clarification issued by the DAR Secretary insofar as in holding that Delfino had partially exercised his right of retention when he sold two hectares to SM Prime Holdings, Inc. after his application for retention was granted by the DAR.20'We do not see any reason why the same principle cannot be applied in this case.

In relation to this, we also take note of the submissions of the DAR pertaining to the "immense danger to the implementation of CARP" that it perceives to arise as a consequence of our Decision. Particularly, DAR posits that the Decision "will provide landowners unbridled freedom to dispose any or all of their agricultural properties without DAR clearance and still at a moment's notice decide which of those lands he wishes to retain,'to the prejudice not only of the tenants and/or farmer beneficiaries but of the entire CARP as well."21'It further posits that to allow Carriedo to claim the subject landholdings as his retained area "will in effect put on hold the implementation of [the] CARP to wait for the landowner, despite selling majority of his agricultural landholdings, and despite receiving compensation for the same, to still be able to choose the retention area."22

The DAR, therefore, maintains that AO 05-06 is the regulation adopted by the agency precisely in order to prevent these perceived dangers in the implementation of the CARL. The policy behind AO 05-06 should deter any attempt to circumvent the provisions of the CARL which may arise under a factual milieu similar in this case.

We also agree with the DAR on this point.

AO 05-06 is in consonance with the Stewardship Doctrine, which has been held to be the property concept in Section 6,23'Article II of the 1973 Constitution. Under this concept, private property is supposed to be held by the individual only as a trustee for the people in general, who are its real owners. As a mere steward, the individual must exercise his rights to the property not for his own exclusive and selfish benefit but for the good of the entire community or nation.24'Property use must not only be for the benefit of the owner but of society as well. The State, in the promotion of social justice, may regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits.25'It has been held that Presidential Decree No. 27, one of the precursors of the CARL, embodies this policy and concept.26

This interpretation is consistent with the objective of the agrarian reform program, which is, of course, land distribution to the landless farmers and farmworkers.27'The objective is carried out by Item No. 4 of AO 05-06 as it provides for the consequences in situations where a landowner had sold portions of his/her land with an area more than the statutory limitation of five hectares. In this scenario, Item No. 4 of AO 05-06 treats the sale of the first five hectares as the exercise of the landowner's retention rights. The reason is that, effectively, the landowner has already chosen, and in fact has already disposed of, and has been duly compensated for, the area he is entitled to retain under the law.

Further, Item No. 4 of AO 05-06 is consistent with Section 7028'of the CARL as the former likewise treats the sale of the first five hectares (in case of multiple/series of transactions) as valid, such that the same already constitutes the retained area of the landowner. This legal consequence arising from the previous sale of land therefore eliminates the prejudice, in terms of equitable land distribution, that may befall the landless farmers and farmworkers.

We note that records also bear that the previous sale of Carriedo's landholdings was made in violation of the law, being made without the clearance of the DAR.29'To rule that Carriedo is still entitled to retain the subject landholding will, in effect, reward the violation, which this Court cannot allow. We emphasize that the right of retention serves to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the tenant, and by implementing the doctrine that social justice was not meant to perpetrate an injustice against the landowner.30'In this case, however, Carriedo claims his right over the subject landholding'not'because he was "deprived" of a portion of his land as a consequence of compulsory land coverage, but precisely because he already previously sold his landholdings, so that the subject landholding is the only portion left for him.

Although constitutionally guaranteed, the exercise of a landowner's right of retention should not be done without due regard to other considerations which may affect the implementation of the agrarian reform program. This is especially true when such exercise pays no heed to the intent of the law, or worse, when such exercise amounts to its circumvention.

In view of the foregoing, we hold that Item No. 4 of AO 05-06 is valid. Indeed, the issue in this case is more than the mere claim of an individual to his retained area, but had been, at the onset, an issue of the implementation of the CARL in line with the mandate and objective as set forth in the Constitution.

On Certificate of Land Ownership Award

The Decision also adjudged that CLOAs are not equivalent to a Torrens certificate of title, and thus are not indefeasible.31'The DAR disagrees and submits that this ruling relegated Emancipation Patents and CLOAs to the status of a Certificate of Land Transfer, which is merely part of the preparatory steps for the eventual issuance of a certificate of title.32

We agree with the DAR. A Certificate of Land Ownership Award or CLOA is a document evidencing ownership of the land granted or awarded to the beneficiary by the DAR, and contains the restrictions and conditions provided for in the CARL and otl1er applicable laws.33

Section 24 of the CARL, as amended,34'reads:

Sec. 24. Award to Beneficiaries. - The rights and responsibilities of the beneficiaries shall commence from their receipt of a duly registered emancipation patent or certificate of land ownership award and their actual physical possession of the awarded land. Such award shall be completed in not more than one hundred eighty (180) days from the date of registration of the title in the name of the Republic of the Philippines:'Provided, That the emancipation patents, the certificates of land ownership award, and other titles issued under any agrarian reform program shall be indefeasible and imprescriptible after one (1) year from its registration with the Office of the Registry of Deeds, subject to the conditions, limitations and qualifications of this Act, the property registration decree, and other pertinent laws.'The emancipation patents or the certificates of land ownership award being titles brought under the operation of the torrens system, are conferred with the same indefeasibility and security afforded to all titles under the said system, as provided for by Presidential Decree No. 1529, as amended by Republic Act No. 6732.'(Emphasis supplied.)

Further, in'Estribillo v. Department of Agrarian Reform,35'we held that:

The rule in this jurisdiction, regarding public land patents and the character of the certificate of title that may be issued by virtue thereof, is that where land is granted by the government to a private individual, the corresponding patent therefor is recorded, and the certificate of title is issued to the grantee; thereafter, the land is automatically brought within the operation of the Land Registration Act, the title issued to the grantee becoming entitled to all the safeguards provided in Section 38 of the said Act. In other words, upon expiration of one year from its issuance, the certificate of title shall become irrevocable and indefeasible like a certificate issued in a registration proceeding. (Emphasis and italics omitted.)

The EPs themselves, like the Certificates of Land Ownership Award (CLOAs) in Republic Act No. 6657 (the Comprehensive Agrarian Reform Law of 1988), are enrolled in the Torrens system of registration. The Property Registration Decree in fact devotes Chapter IX on the subject of EPs. Indeed, such EPs and CLOAs are, in themselves, entitled to be as indefeasible as certificates of title issued in registration proceedings.36'(Citation omitted.)

We, however, note that the issue involving the issuance, recall, or cancellation of CLOAs is lodged with the DAR,37'which has primary jurisdiction over the matter.38

WHEREFORE, premises considered, the motion for reconsideration filed by the Department of Agrarian Reform is hereby'GRANTED, and the Decision dated January 20, 2016 is'REVERSED and SET ASIDE. Item No. 4 of DAR Administrative Order No. 05, Series of 2006 is hereby declared'VALID.

SO ORDERED.

Peralta (Chairperson), Leonen, and'A. Reyes, Jr., JJ., concur.

J. Reyes, Jr., J., on official leave.

NOTICE OF JUDGMENT

November 13, 2018

Sirs / Mesdames:

Please take notice that on'October 10, 2018'a Decision, copy attached hereto, was rendered by the Supreme Court in the above-entitled case, the original of which was received by this Office on November 13, 2018 at 10:10 a.m.

Very truly yours,

(Sgd.) WILFREDO V. LAPITANDivision Clerk of Court

Footnotes

1'Dated March 22, 2016.'Rollo, pp. 297-330.

2'781 SCRA 301.

3'Guidelines on the Acquisition and Distribution of Agricultural Lands Subject of Conveyance Under Section 6, 70 and 73(a) of R.A. No. 6657.

4'Rollo, p. 323.

5'Id.'at 324.

6'Id.'at 333-334.

7'Republic Act No. 6657.

8'See'Rom v. Roxas & Company, Inc., G.R. No. 169331, September 5, 2011, 656 SCRA 691,707, citing'Roxas & Co., Inc. v. Court of Appeals, G.R. No. 127876, December 17, 1999, 321 SCRA 106, 153-154, 164;'San Miguel Properties, Inc. v. Perez, G.R. No. 166836, September 4, 2013, 705 SCRA 38, 59-60; and'Alfonso v. Land Bank of the Philippines, G.R. Nos. 181912 & 183347, November 29, 2016, 811 SCRA 27, 122.

9'Republic Act No. 6657, Sec. 49.'Rules and Regulations. ' The PARC and the DAR shall have the power to issue rules and regulations, whether substantive or procedural, to carry out the objects and purposes of this Act. Said rules shall take effect ten (10) days after publication in two (2) national newspapers of general circulation.

10'Chamber of Real Estate and Builders' Associations, Inc. v. Romulo, G.R. No. 160756, March 9, 2010, 614 SCRA 605, 639-640.

11'Department of Agrarian Reform, Quezon City v. Carriedo, supra'note 2 at 306, 316-317.

12'Department of Agrarian Reform, Quezon City v. Carriedo, supra'note 2 at 328-330.

13'Rollo, pp. 297-298.

14'Id.'at 304.

15'Id.'at 307-308.

16'Id.'at 309.

17'Id.'at 310-311.

18'G.R. No. 197486, September 10, 2014, 734 SCRA 672.

19'Id.'at 677-683.

20'Id.'at 688-689.

21'Rollo, p. 308. Emphasis supplied.

22'Id.'at 308-309.

23'Sec. 6. The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits.

24'Mataas na Lupa Tenants Assoc., Inc. v. Dimayuga, G.R. No. L-32049, June 25, 1984, 130 SCRA 30, 42-43.

25'Almeda v. Court of Appeals, G.R. No. L-43800, July 29, 1977, 78 SCRA 194, 199.

26'See'Almeda v. Court of Appeals, supra, where this Court held that:

It is to be noted that under the new Constitution, property ownership is impressed with social function. Property use must not only be for the benefit of the owner but of society as well. The State, in the promotion of social justice, may "regulate the acquisition, ownership, use, enjoyment and disposition of'private'property, and equitably diffuse property... ownership and profits." One governmental policy of recent date projects the emancipation of tenants from the bondage of the soil and the transfer to them of the ownership of the land they till. This is Presidential Decree No. 27 of October 21, 1972, ordaining that all tenant farmers "of private agricultural devoted to rice and corn under a system of sharecrop or lease-tenancy, whether classified as landed estates or not" shall be deemed "owner of a portion constituting family-size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated." (Citations and italics omitted.)

27'CONSTITUTION, Article XIII, Sec. 4; See also Republic Act No. 6657, Sec. 2., which states:

Sec. 2. Declaration of Principles and Policies. - It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive the highest consideration to promote social justice and to move the nation toward sound rural development and industrialization, and the establishment of owner cultivatorship of economic-size farms as the basis of Philippine agriculture.

xxxx

The objective is enlivened by the provisions on Chapter VII of the CARL which is entitled "Land Redistribution," to wit: Section 22 (Qualified Beneficiaries); Section 23 (Distribution Limit); Section 24 (Award to Beneficiaries); Section 25 (Award Ceilings for Beneficiaries); and Section 26 (Payment by Beneficiaries).

28'Sec. 70. Disposition of Private Agricultural Lands. ' The sale or disposition of agricultural lands retained by a landowner as a consequence of Section 6 hereof shall be valid as long as the total landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not exceed the landholding ceiling provided for in this Act. x x x

29'Republic Act No. 6657, Sec. 6. Retention Limits.- x x x

Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of private lands executed by the original landowner in violation of the Act shall be null and void:'Provided, however, That those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within (30) days of any transaction involving agricultural lands in excess of five (5) hectares.

30'Danan v. Court of Appeals, G.R. No. 132759, October 25, 2005, 474 SCRA 113, 128.

31'Department of Agrarian Reform, Quezon City v. Carriedo,'supra'note 2 at 333.

32'Rollo, pp. 297-298.

33'Lebrudo v. Loyola, G.R. No. 181370, March 9, 2011, 645 SCRA 156, 161. See also'Roxas & Co., Inc. v. Court of Appeals, G.R. No. 127876, December 17, 1999, 321 SCRA 106.

34'Republic Act No. 9700, An Act Strengthening the Comprehensive Agrarian Reform Program (CARP), Extending the Acquisition and Distribution of All Agricultural Lands, Instituting Necessary Reforms, Amending for the Purpose Certain Provisions of Republic Act No. 6657, Otherwise Known as the Comprehensive Agrarian Reform Law of 1988, as Amended, and Appropriating Funds Therefor.

35'G.R. No. 159674, June 30, 2006, 494 SCRA 218.

36'Id.'at 237-238, citing'Lahora v. Dayanghirang, Jr., G.R. No. L-28565, January 30, 1971, 37 SCRA 346, 350.

37'See'Aninao v. Asturias Chemical Industries, Inc.,'G.R. No. 160420, July 28, 2005, 464 SCRA 526, 542-543.

38'See'Bagongahasa v. Romualdez, G.R. No. 179844, March 23, 2011, 646 SCRA 338, 350-351.