SECOND DIVISION
|
NAPOLEON
MAGNO, Petitioner, - versus - GONZALO
FRANCISCO and REGINA VDA.
DE LAZARO, Respondents. |
G.R. No. 168959 Present: CARPIO, Acting
C.J., Chairperson, BRION, DEL CASTILLO, ABAD, and PEREZ, JJ. Promulgated: March 25, 2010 |
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D E C I S I O N
CARPIO, Acting
C.J.:
The Case
Napoleon
Magno (petitioner) filed this Petition for Review[1] to
reverse the Court of Appeals’ (CA) Decision[2]
dated 4 July 2005 in CA-G.R. SP No.
84467. In the assailed decision, the CA set aside the Department of Agrarian
Reform Adjudication Board’s (DARAB) Decision dated 8 January 2004 and
reinstated the Decision dated 22 December 1993 of the Provincial Agrarian
Reform Adjudicator (PARAD) of Cabanatuan City. The
PARAD dismissed petitioner’s action for collection of lease rentals and ejectment against Gonzalo
Francisco and Regina Vda. De Lazaro
(respondents).
The Facts
Petitioner
is the owner of a 5.3 hectare lot (lot) which is a portion of an agricultural
land identified as Lot No. 593 situated in Brgy. San
Fernando, Cabiao, Nueva Ecija. Petitioner’s lot is part of the 13 parcels of land
registered in the name of petitioner’s mother, Maria Candelaria
Salud Talens (Talens). Talens’ landholding
totals 61 hectares, more or less.
Petitioner
acquired the lot through a Deed of Sale executed by Talens
on 28 July 1972,[3] but the
sale was only registered on 3 September 1986.[4] At
the time of the sale, Gonzalo Francisco and Manuel Lazaro
tenanted the land and their separate areas of tillage were 2.8 and 2.5
hectares, respectively.[5]
Petitioner
entered into a written contract of agricultural leasehold with Manuel Lazaro on 5 October 1972[6]
and with Gonzalo Francisco on 7 August 1980.[7] In
the leasehold contract, Manuel Lazaro was obliged to
pay a lease rental of 35 cavans during the regular
season, and 20 cavans during dayatan cropping season. Gonzalo
Francisco, on the other hand, was required to pay a lease rental of 35 cavans during the regular season and 25 cavans
during the cropping season.[8]
Gonzalo Francisco and Manuel Lazaro (who
was succeeded by his surviving spouse Regina Vda.
De Lazaro upon his death) complied with the conditions
of the agricultural leasehold until the regular season of April 1991 when they
stopped paying rentals despite petitioner’s repeated demands.[9]
Respondents believed that they have fully paid the price of the lot under the Barangay Committee on Land Production’s (BCLP) valuation.[10]
On
10 January 1990, Gonzalo Francisco was issued Emancipation Patent (EP) No.
416156 covering an area of 27,284 square meters. On the same date, Manuel Lazaro was also issued EP No. 416157[11]
covering an area of 25,803 square meters.[12]
On
19 May 1993, petitioner filed with PARAD of Cabanatuan
City a complaint for ejectment and collection of
lease rentals against respondents. At the time of filing of the complaint,
respondent Francisco and respondent Lazaro were
already in arrears of 155 cavans and 145 cavans, respectively.[13]
Respondents
sought the dismissal of the complaint invoking the following arguments:
1.
The
leasehold contracts are without force and effect since the lot was under the
Operation Land Transfer (OLT) program pursuant to Presidential Decree No. (PD)
27.[14]
The sale executed by Talens was merely designed to
exclude the land from OLT coverage.
2.
Since the lot value, as determined and approved by the
Department of Agrarian Reform (DAR), has been paid, the collection of lease
rentals is now moot.
3.
Respondents
are now considered owners-cultivators of their respective landholdings and
cannot be ejected.[15]
On
22 December 1993, the PARAD of Cabanatuan City
dismissed the case for lack of merit.[16]
On
appeal, the DARAB rendered a Decision dated 8 January 2004, the dispositive portion of which states:
WHEREFORE, in view of all the foregoing
considerations, the decision appealed from is hereby SET ASIDE and a NEW
DECISION is hereby rendered:
1.
Finding
and declaring the Deed of Absolute sale binding upon respondents Gonzalo
Francisco and Regina vda. De Lazaro;
2.
Maintaining
the agricultural leasehold relationship between landowner-petitioner Napoleon Magno and respondents-lessees Gonzalo Francisco and Regina vda. De Lazaro; accordingly,
declaring the Contracts of Agricultural Leasehold respectively entered into by
and between the said parties still subsisting and in full force and effect;
3.
Ordering
respondents Gonzalo Francisco and Regina vda. De Lazaro to pay severally their lease rentals in arrears
covering the period from the regular season of (April) 1991 up to and until the
final restoration or proper reinstatement of the lease contracts in question.
SO ORDERED.[17]
Respondents
filed a petition for review with the CA assailing the DARAB’s
decision. On 4 July 2005, the CA rendered a decision, the dispositive
portion of which reads:
WHEREFORE, premises considered, the petition
is GRANTED. The assailed decision dated January 8, 2004 is REVERSED and SET
ASIDE and the decision of the PARAD-Cabanatuan City
dated December 22, 1993 is hereby REINSTATED.
SO ORDERED.[18]
Aggrieved
by the CA’s decision reinstating the decision of the PARAD of Cabanatuan City, petitioner elevated the case before this
Court.
Ruling of the PARAD of Cabanatuan City
The
PARAD stated that on 10 January 1990, EPs were issued to respondents. Then, in
the conferences held on 8 March and 9 August 1990, Municipal Agrarian Reform
Officer (MARO) Rogelio C. Palomo found out that the
lot is covered by the OLT program and the DAR-Central Office had not received
any petition for OLT exemption. The PARAD noted that in the final land
valuation conference, a thorough computation of the paid lease rentals was
conducted. The PARAD believed that respondents are no longer liable to pay the
lease rentals because respondents are now considered owners of their respective
landholdings. The PARAD stated that from 1990, respondents have fully paid the
amount of the lot as evidenced by the land valuation under the BCLP scheme
prepared by DAR officials.[19]
The
PARAD relied on the 2nd Indorsement
submitted by PARAD Benjamin M. Yambao (PARAD Yambao) that the lot is covered by OLT and that the
farmer-beneficiaries including respondents have fully paid for the lot. The 2nd
Indorsement reads:
Respectfully returned to Mr. Enrique S.
Valenzuela, PARO, NEPARO, Cabanatuan City, the herein
Claim Folder thru BCLP of Ms. Candelaria S. Talens covered by TCT No. 7390 containing an area of 26
hectares, more or less, situated at San Fernando, Norte, Cabiao,
Nueva Ecija which this
Office after an appraisal of the documents attached and as per his comments
therein, the landholding in question appears to have been subjected to an
Operation Land Transfer pursuant to PD 27; that a BCLP has already been
prepared and approved by the authorities concerned, and that as per findings,
the subject landholding has already been FULLY PAID by the
farmer-beneficiaries. Let it be emphasized that the landholding in question was
covered by P.D. No. 27 and not pursuant to RA No. 6657, for which reason any
valuation to be made in the landholding in question should be within the
memorandum circular implementing P.D. 27 and not under memorandum circular
implementing RA No. 6657. Besides, as per his findings thereto, the land in
question is now fully paid. By that the valuation process is a fait accompli.
With that, it is now the honest opinion of the undersigned that any action to
be taken thereto is within the administrative prerogative of that office
there-being no formal complaint nor protest filed before this office, pursuant
to DARAB Procedures this Office could not take possible action thereof unless
and under a formal complaint of protest is lodge before this office, either the
landowner or by the farmer-beneficiaries.[20]
The
PARAD took note of the fact that the Deed of Absolute Sale executed by Talens, where she conveyed her land to different persons
including petitioner for P1 and other valuable considerations, was
suspicious in nature. The PARAD reasoned that the sale was consummated on 28
July 1972 but the registration occurred in 1986. The PARAD believed that the
sale made by Talens was a device to circumvent PD 27
in order to exclude her land from OLT coverage. The PARAD noted that when the
claim folder was prepared, processed and approved by the BCLP, Talens was still declared the landowner of 26 hectares
including petitioner’s lot. The PARAD explained that petitioner also failed to
file a formal complaint or protest on the land valuation prepared by DAR
officials before the proper forum. Since petitioner is estopped
from claiming that respondents are still his tenants, respondents are not
liable to pay lease rentals to petitioner.[21]
Ruling of the DARAB
The
DARAB found a different state of facts. The DARAB re-examined the pleadings
filed and evidence submitted by the parties and found that petitioner, together
with his siblings, wrote then Ministry of Agrarian Reform (MAR) Minister Conrado F. Estrella (Minister Estrella) for exemption of their properties from OLT
coverage by way of a letter-protest dated 19 May 1974. Minister Estrella acted with dispatch and gave the following
instruction to then District Officer Gene Bernardo, which reads:
D/O Gene Bernardo,
Please
look into this petition and get the facts. Verify and make your report and
recommendation.
Sgd. CFE
5/26/74[22]
The
DARAB stated that petitioner wrote another letter dated 25 December 1975 to
Minister Estrella seeking to exercise his right of
retention. The DARAB ruled that these letters belie the PARAD’s
finding that petitioner is estopped from claiming
that respondents are still his tenants.[23]
The
DARAB stated that in 1974, Minister Estrella issued
MAR Memorandum Circular No. 8, Series of 1974 declaring that transfers of
ownership of lands covered by PD 27 executed by landowners after 21 October
1972 shall all be considered acts committed to circumvent PD 27. This
memorandum circular was further amended by an undated Memorandum which
provides:
With respect to transfers of ownership of
lands covered by P.D. 27, you shall be guided by the following:
Transfers
of ownership of lands covered by a Torrens Certificate of Title duly executed
prior to October 21, 1972 but not registered with the Register of Deeds
concerned before said date in accordance with the Land Registration Act (Act
No. 496) shall not be considered a valid transfer of ownership insofar as the
tenants-farmers are concerned and therefore the lands shall be placed under
Operation Land Transfer.
Transfers
of ownership of unregistered lands x x x executed prior to October 21, 1972, whether registered or
not, with the Register of Deeds concerned, pursuant to Act No. 3344 may be
considered a valid transfer/conveyance as between the parties subject to the
verification of the due execution of the conveyance/transfer in accordance with
the formalities prescribed by law.
In
order that the foregoing transfers of ownership mentioned in the preceding
paragraphs maybe binding upon the tenant, such tenant should have knowledge of
the transaction prior to October 21, 1972, have recognized the persons of the
new owners and have been paying rental to such new owners.” (Emphasis in the
original)[24]
The
DARAB ruled that respondents as petitioner’s tenants had knowledge of the Deed
of Sale executed on 28 July 1972 and had recognized petitioner as the new owner
and paid rentals to him. Since all the requirements have been met and
satisfied, the sale between petitioner and Talens is
binding upon respondents. The DARAB ruled that respondents are still
tenant-lessees of petitioner and shall be entitled to security of tenure and
obligated to comply with their duty to pay the lease rentals in accordance with
the terms and conditions of their leasehold contract.[25]
Ruling of the Court of Appeals
The
CA stated that the EPs are public documents and are prima facie evidence of the
facts stated therein. The EPs are presumably issued in the regular performance
of an official duty. The CA ruled that petitioner has not presented any
evidence showing that the issuance of the EPs was tainted with defects and
irregularities; hence, they are entitled to full faith and credit.[26]
The
CA, quoting the 2nd Indorsement issued by
PARAD Yambao, held that the matter of OLT coverage of
petitioner’s lot has been settled. The CA also upheld the PARAD’s
ruling that respondents have fully paid the value of the lot.[27]
The
CA ruled that the factual findings and conclusion of the PARAD of Cabanatuan City are supported with substantial evidence as
opposed to the DARAB’s findings of fact.[28]
Issue
Petitioner
submits this sole issue for our consideration: Whether unregistered EPs issued
to agricultural lessees which appear to be irregular
on their face can defeat the landowner’s rights to agricultural leasehold
rentals.[29]
Ruling of the Court
We
grant the petition.
Petitioner
contends that the CA committed grave error because the evidence on record is
bereft of any showing that certificates of land transfer (CLTs)
have been issued to respondents and that the EPs have been registered with the
Register of Deeds of Nueva Ecija.[30]
Petitioner points out that the CA disregarded a significant fact that the land
valuation came after the issuance of the EPs; hence, the issuance of the EPs
was tainted with irregularity because it was violative
of Section 2 of PD 266. [31]
Petitioner claims that his
retention rights and rights to land rentals from respondents cannot be defeated
by patently fraudulent EPs.
Petitioner
also alleges that MARO Palomo had no authority in
fact or law to determine the just compensation. Assuming that MARO Palomo had the authority, petitioner cannot be bound by the
determination of just compensation because petitioner was not present and could
not have signified his agreement during the land valuation conferences.[32]
Respondents
claim that in appeals in agrarian cases, the findings of fact of the PARAD, as
affirmed by the CA, are final and conclusive especially if they are based on
substantial evidence.[33]
Respondents
allege that in the Order dated 10 October 2002, this
case was forwarded to DAR Secretary. The dispositive
portion of the Order reads:
WHEREFORE, premises considered, the
proceeding in this case is hereby suspend (sic) until the submission of the
result of the administrative determination of the coverage of the subject
landholding in dispute to this Board. Let the entire records of the
above-entitled case be forwarded to the office of the DAR Secretary to effect
such determination as stated above.
Respondents argue that the DAR has
not yet submitted the result of the administrative determination of the lot in
dispute to the DARAB. Respondents contend that the DARAB’s
decision dated 8 January 2004 was issued without jurisdiction.[34]
Findings of Fact
It
is well-settled that this Court is not a trier of
facts. The factual findings of the CA are regarded as final, binding and
conclusive upon this Court, especially when supported by substantial evidence.
However, there are recognized exceptions[35]
to this rule, such as when the factual findings of the CA are contrary to those
of the quasi-judicial agency. In this case, the factual findings of the CA and
the DARAB are conflicting; thus, we are compelled to look at the factual milieu
of this case and review the records.[36]
The CA had also overlooked certain relevant facts undisputed by the parties,
which, if properly considered, would justify a different conclusion.
Petitioner
claims that upon the proclamation of PD 27 on 21 October 1972, Talens no longer owned the land consisting of 61 hectares.
Therefore, petitioner together with his siblings filed their Petitions for
Exemption with respect to their landholdings.[37]
In
a letter dated 19 May 1974, petitioner together with his siblings requested
Minister Estrella to certify that Talens’
61-hectare land, which was sold to her ten children, is exempt from the OLT
coverage.[38]
In
another letter dated 26 December 1975, petitioner informed Minister Estrella that he would like to exercise his retention right
of five hectares on the lot he owned.[39]
A
document entitled “Date Notice Send” presented as Exhibit “1” by the
respondents and signed by MARO Palomo stated that
conferences[40] for
land valuation were held but petitioner failed to appear. MARO Palomo stated that the lot was subjected to BCLP valuation
and after a thorough computation, respondents together
with other farmer-beneficiaries were declared as having fully paid for their
areas of cultivation. MARO Palomo recommended the
approval of the BCLP claim folders and the issuance of the EPs to the
farmer-beneficiaries.[41]
A
document entitled “Lease Rentals Paid” presented as Exhibit “1-A,”[42]
reveals:
On
18 December 1991, PARAD Yambao issued a 2nd
Indorsement stating that Talens’
land is covered by OLT and the farmer-beneficiaries have fully paid the land
such that the valuation process is only a fait accompli.[43]
On
2 January 1992, Provincial Agrarian Reform Officer (PARO) Enrique S. Valenzuela
issued a 3rd Indorsement stating that a
formal complaint or protest should be filed first by the landowner or the
farmer-beneficiaries before the DARAB can take possible action.[44]
On
22 September 1994, PARO Rogelio M. Chaves issued a certification stating that
Manuel Lazaro and Gonzalo Francisco both paid the sum
of P82,774.50 and P87,730.70 as lease
rentals from 1973 to 1990 representing
full payment of the land value owned and registered in the name of Talens with an area of 2.5803 and 2.7284 hectares,
respectively.[45]
In
a letter dated 1 April 1997, Atty. Teodoro C. Linsangan, Register of Deeds III wrote to Mr. Emmanuel N. Paralisan, CARP[46]
Program Director of the Land Registration Authority. The Register of Deeds
acknowledged receipt of the EPs issued to Gonzalo Francisco and his associates.
However, the Register of Deeds stated that they cannot effect
registration because there is a pending case filed by PARO Chaves at the
Regional Trial Court of Gapan: In Re: Cad. Case No.
081 – for reconstitution of mutilated TCT No. 7390 (Mother Title), where the
EPs were taken.[47]
In
an Order dated 10 October 2002, the DARAB suspended the case proceedings until
the submission of the result of the administrative determination of the coverage
of the subject lot in dispute. The DARAB ordered the entire records to be
forwarded to the office of the DAR Secretary to effect such determination of
OLT coverage.[48]
On
8 January 2004, the DARAB rendered a decision declaring the Deed of Absolute
Sale between petitioner and Talens as binding upon
the respondents. The DARAB also declared that the agricultural leasehold
relationship between petitioner and respondents still subsists. The DARAB
ordered respondents to pay the lease rentals from April 1991 until the proper
reinstatement of the lease contracts.
OLT Coverage
In
Department of Agrarian Reform v. Abdulwahid,[49]
the Court, quoting Centeno v. Centeno,[50]
held:
[T]he DAR is vested with the primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have
the exclusive jurisdiction over all matters involving the implementation of the
agrarian reform program. The DARAB has primary, original and appellate
jurisdiction “to determine and adjudicate all agrarian disputes, cases, controversies,
and matters or incidents involving the implementation of the Comprehensive
Agrarian Reform Program under RA No. 6657, E.O. Nos. 229, 228 and 129-A, R.A.
No. 3844 as amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws and
their implementing rules and regulations.”
Agrarian
dispute as defined in Section 3(d) of Republic Act (RA) No. 6657[51]
refers “to any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands
devoted to agriculture, including disputes concerning farmworkers’
associations or representation of persons in negotiating, fixing, maintaining,
changing or seeking to arrange terms or conditions of such tenurial
arrangements. It includes any controversy relating to compensation of lands
acquired under this Act and other terms and conditions of transfer of ownership
from landowners to farmworkers, tenants and other
agrarian reform beneficiaries, whether the disputants stand in the proximate
relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee.”
Section
3, Rule II of the 2003 DARAB Rules of Procedure provides:
SECTION 3. Agrarian Law Implementation Cases.
The
Adjudicator or the Board shall have no jurisdiction over matters involving the administrative
implementation of RA No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent
rules and administrative orders, which shall be under the exclusive prerogative
of and cognizable by the Office of the Secretary of the DAR in accordance with
his issuances, to wit:
3.1
Classification and identification of
landholdings for coverage under the agrarian reform program and the initial issuance of CLOAs and EPs, including protests or oppositions thereto
and petitions for lifting of such coverage;
3.2
Classification,
identification, inclusion, exclusion, qualification, or disqualification of
potential/actual farmer-beneficiaries;
3.3
Subdivision
surveys of land under CARP;
3.4
Recall,
or cancellation of provisional lease rentals, Certificates of Land Transfers (CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree
(PD) No. 816, including the issuance, recall, or cancellation of EPs or CLOAs not yet registered with the Register of Deeds;
3.5
Exercise
of the right of retention by the landowner;
3.6
Application
for exemption from coverage under Section 10 of RA 6657;
3.7
Application
for exemption pursuant to Department of Justice (DOJ) Opinion No. 44 (1990);
3.8
Exclusion
from CARP coverage of agricultural land used for livestock, swine, and poultry
raising;
3.9
Cases of
exemption/exclusion of fish pond and prawn farms from the coverage of CARP
pursuant to RA 7881;
3.10 Issuance of Certificate of Exemption for land
subject of Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) found
unsuitable for agricultural purposes;
3.11 Application for conversion of agricultural
land to residential, commercial, industrial, or other non-agricultural uses and
purposes including protests or oppositions thereto;
3.12 Determination of the rights of agrarian
reform beneficiaries to homelots;
3.13 Disposition of excess area of the
tenant’s/farmer-beneficiary’s landholdings;
3.14 Increase in area of tillage of a
tenant/farmer-beneficiary;
3.15 Conflict of claims in landed estates
administered by DAR and its predecessors; or
3.16 Such other agrarian cases, disputes, matters
or concerns referred to it by the Secretary of the DAR. (Boldfacing supplied)
It
is undisputed that petitioner and respondents have an established tenancy
relationship, such that the complaint for collection of back rentals and ejectment is classified as an agrarian dispute and under
the jurisdiction of the PARAD and thereafter by the DARAB. However, in view of
the conflicting claims where petitioner asserted ownership over the lot and respondents
emphasized that the lot is subject to OLT coverage, there is a need to
ascertain if the lot is under the agrarian reform program. Since the
classification and identification of landholdings for coverage under the
agrarian reform program are Agrarian Law Implementation cases, the DAR
Secretary should first resolve this issue. In Sta. Ana v. Carpo,[52]
we held:
Verily, there is an established tenancy
relationship between petitioner and respondents in this case. An action for Ejectment for Non-Payment of lease rentals is clearly an
agrarian dispute, cognizable at the initial stage by the PARAD and thereafter
by the DARAB. But issues with respect to
the retention rights of the respondents as landowners and the
exclusion/exemption of the subject land from the coverage of agrarian reform
are issues not cognizable by the PARAD and the DARAB, but by the DAR Secretary
because, as aforementioned, the same are Agrarian Law Implementation (ALI)
Cases. (Boldfacing supplied)
Therefore,
the PARAD of Cabanatuan City had no authority to
render a decision declaring the lot under OLT coverage. In fact, when the case
was appealed, the DARAB acknowledged that it had no jurisdiction on the OLT
coverage. In an Order dated 10 October 2002, the DARAB suspended the case
proceedings until the submission of the result of the administrative
determination of the lot and thus submitted the entire records to the DAR
Secretary. Respondents themselves admitted in their Memorandum that the DAR has
not submitted the result of its administrative determination of the lot to the
DARAB. It is therefore essential that the DAR Secretary should first resolve
the issue on the lot’s inclusion or exclusion from OLT coverage before a final
determination of this case can be had.
Proof
necessary for the resolution of the issues on OLT coverage and petitioner’s
right of retention should be introduced in the proper forum. The Office of the
DAR Secretary is in a better position to resolve these issues being the agency
lodged with such authority since it has the necessary expertise on the matter.[53]
We
sustain the DARAB’s ruling declaring the Contracts of
Agricultural Leasehold entered into by petitioner and respondents still
subsisting and in full force and effect. We modify the DARAB’s
ruling ordering respondents to pay severally their lease rentals in arrears
covering the period from the regular season of April 1991 until the final
determination on the OLT coverage of the lot.
Wherefore,
we GRANT the petition. We SET ASIDE the assailed Decision of the
Court of Appeals in CA-G.R. SP No. 84467. We REINSTATE with MODIFICATION the Decision of the Department of
Agrarian Reform Adjudication Board dated 8 January 2004 in DARAB Case No. 2404
(Reg. Case No. 2332 “NE”93) without prejudice to the rights of the parties to
seek recourse from the Office of the Department of Agrarian Reform (DAR)
Secretary on the issues they have raised.
SO ORDERED.
ANTONIO
T. CARPIO
Acting Chief Justice
WE CONCUR:
ARTURO D. BRION
Associate
Justice
MARIANO
C. DEL CASTILLO ROBERTO
A. ABAD
Associate Justice Associate Justice
JOSE PORTUGAL PEREZ
Associate Justice
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution, I certify that the conclusions
in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court’s Division.
ANTONIO T. CARPIO Acting Chief Justice