Case Digest: Vales v. Galinato, GR No. 180134, March 5, 2014

 

CASE TITLE: Vales v. Galinato
GR No/ Date: G.R. No. 180134, March 5, 2014
PETITIONERS: Rafael Vales Cecilia Vales-Vasquez, Yasmin Vales-Jacinto Represented by: Dasal, Laurel, Llasos and Associates	RESPONDENTS: Ma. Luz Choresca Galinato Ernesto Choresca Teofilo Amado, Lorna Parian Medianero Rebecca Porcal Vivencio Ordoyo Represented by: Traviña Law Office
ACTION WITH THE SUPREME COURT: Petition for Review on Certiorari
PONENTE: Perlas-Bernabe., J.
FACTS: On March 3, 1972, Spouses Perfecto and Marietta Vales executed a Deed of Sale conveying five parcels of agricultural land with an aggregate area of 20.3168 hectares to their three children, Rafael Vales, Cecilia Vales-Vasquez, and Yasmin Vales-Jacinto. At the time of the sale, the subject lands were tenanted. The sale was not registered. The land titles remained in the names of the spouses. On October 21, 1972, Presidential Decree No. 27 (PD 27) was passed, emancipating tenants. On November 21, 1972, Rafael Vales executed a sworn declaration, asserting that he and his sisters are co-owners of the subject lands. The lands were placed under the government's Operation Land Transfer (OLT) Program as properties belonging to Sps. Vales, not the petitioners. In 1975, the petitioners filed a letter requesting retention of the lands under PD 27, which was not acted upon by the  the Office of the Agrarian Reform, In 1980, the petitioners filed a petition with the Ministry of Agrarian Reform-Region VI to be certified as owners of the lands they declared for tax purposes since November 29, 1972, and sought partition for obtaining titles for their shares.  This petition remained unresolved for nearly two decades. Between July and August 1987, petitioners entered into Agricultural Leasehold Contracts with several tenants, which were registered with the Municipal Treasurer of Cabatuan. In 1998,  Emancipation Patents were issued to certain tenants, allegedly without petitioners' knowledge and against their protest. The petitioners filed a petition before the Department of Agrarian Reform (DAR) seeking: Resolution of the unresolved 1980 petition. Exemption of the lands from the OLT Program. Affirmation of their right to retain seven hectares under PD 27. DAR Regional Director's Order: Ruled that ownership of the subject lands remained with Sps. Vales because the petitioners failed to register the sale before October 21, 1972, as required by a DAR Memorandum. The sale did not bind the tenants, and no retention rights were transferred to the petitioners. Petitions for exemption and retention were denied, and the lands were placed under the OLT Program, with Emancipation Patents issued to the tenants. DAR Secretary's Orders: December 11, 2002:  Reversed the DAR Regional Director’s decision, granting the petitions for exemption and retention, subject to LOI 474. The DAR Secretary found that tenants had knowledge of the sale and recognized petitioners as owners by paying rent to them. September 25, 2003:  Reversed this decision, stating the tenants only learned of the sale in 1977, invalidating the ownership claim. Office of the President (OP) Decisions:  December 30, 2003: Affirmed the DAR Secretary’s decision.  Petitioners argued they acquired ownership by intestate succession after Perfecto Vales' death in 1985. April 6, 2004: Reversed its decision recognizing petitioners' right to retention as heirs, exempting their shares from the OLT Program. August 19, 2004: Modified this ruling, stating petitioners should be considered as one landowner, allowing only a 7-hectare exemption. September 5, 2005: Reinstated the December 30, 2003 decision, citing non-registration of the sale and lack of tenant knowledge before October 21, 1972, as reasons for invalidating the transfer. Court of Appeals (CA): Denied the appeal, holding that: Petitioners could not claim exemption and retention rights under RA 6657, as their predecessors (Sps. Vales) were not entitled under PD 27 due to landholdings exceeding 24 hectares. Under PD 27 and LOI 474, the entire landholding would be covered if it exceeded 24 hectares, leaving no retention rights.
ISSUE: Whether: the subject lands are exempt from OLT Program coverage; NO petitioners are entitled to avail of any retention right under existing agrarian laws. NO
PETITIONER ARGUMENTS:	DEFENSE:
PREVAILING PARTY: Respondents
DECISION/DOCTRINE:    The petition lacks merit. A. Legal Parameters of Exemption and Retention in Agrarian Reform PD 27, which implemented the OLT Program of the government, covers tenanted rice or corn lands. The requisites for coverage under the OLT Program are the following: the land must be devoted to rice or corn crops; and there must be a system of share-crop or lease-tenancy obtaining therein.  If either requisite is absent, a landowner may apply for exemption since the land would not be considered as covered under the OLT Program. Accordingly, 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, the landowner who cultivates or intends to cultivate an area of his tenanted rice or corn land has the right to retain an area of not more than seven (7) has. thereof, on the condition that his aggregate landholdings do not exceed 24 has. as of October 21, 1972. Otherwise, his entire landholdings are covered by the OLT Program without him being entitled to any retention right.  Similarly, by virtue of LOI 474, if the landowner, as of October 21 1976, owned less than 24 has. of tenanted rice or corn lands, but additionally owned  other agricultural lands of more than 7 has., whether tenanted or not, whether cultivated or not, and regardless of the income derived therefrom, or lands used for residential, commercial, industrial or other urban purposes, from which he derives adequate income to support himself and his family his entire landholdings shall be similarly placed under OLT Program coverage, without any right of retention.  As stated in DAR Administrative Order No. 4, series of 1991, or the Supplemental Guidelines Governing the Exercise of Retention Rights by Landowners Under Presidential Decree No. 27,  issued on April 26, 1991:  x x x x B. Policy Statements Landowners covered by PD 27 are entitled to retain seven hectares, except those whose entire tenanted rice and corn lands are subject of acquisition and distribution under Operation Land Transfer (OLT). An owner of tenanted rice and corn lands may not retain these lands under the following cases:  If he, as of 21 October 1972, owned more than 24 hectares of tenanted rice and corn lands; By virtue of LOI 474, if he as of 21 October 1976, owned less than 24 hectares of tenanted rice or corn lands, but additionally owned the following:  - Other agricultural lands of more than seven hectares, whether tenanted or not, whether cultivated or not, and regardless of the income derived therefrom; or - Lands used for residential, commercial, industrial or other urban purposes, from which he derives adequate income to support himself and his family.   Subsequently, or on June 10, 1998, Congress passed RA 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 exceeding 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 certain qualifications.  While landowners who have not yet exercised their rights of retention under PD 27 are entitled to the new retention rights provided by RA 6657, a landowner who filed an application under RA 6657 shall be subject to the limitations stated under LOI 474 as above stated. B. Propriety of the Denial of the Petition for Exemption Petitioners sought exemption of the subject lands from the OLT Program of the government by claiming ownership thereof on the basis of a sale thereof by the registered owners, i.e., Sps. Vales, executed on March 3, 1972. However, said transaction, in order to be valid and equally deemed as binding against the tenants concerned, should be examined in line with the provisions of the May 7, 1982 DAR Memorandum, to wit: 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 tenant-farmers are concerned and therefore the land shall be placed under [the OLT Program]. Transfer of ownership of unregistered lands (ownership may be evidenced by tax declaration, deeds of conveyance) 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 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 two paragraphs may be binding upon the tenants, such tenants should have knowledge of such transfers/conveyance prior to October 21, 1972, have recognized the persons of the new owners, and have been paying rentals/amortization to such new owners.   Tersely put, the May 7, 1982 DAR Memorandum provides that tenants should have actual knowledge of unregistered transfers of ownership of lands covered by Torrens Certificate of Titles prior to October 21, 1972,  have recognized the persons of the new owners, and  have been paying rentals/amortization to such new owners in order to validate the transfer and bind the tenants to the same. In the case at bar, it is undisputed that the subject sale was not registered or even annotated on the certificates of title covering the subject lands. More importantly, the CA, which upheld the final rulings of the DAR Secretary and the OP, found that the tenants categorically belied having actual knowledge of the said sale, and that the tenants still recognized Sps. Vales as the landowners. In this regard, petitioners failed to show any justifiable reason to warrant a contrary finding Thus, keeping in mind that the factual findings of the CA are generally accorded with finality absent any sufficient countervailing reason therefor, it may be concluded that petitioners failed to comply with the requirements stated under the May 7, 1982 DAR Memorandum. As a result, the subject sale could not be considered as valid, especially as against the tenants and/or their relatives - particularly, herein respondents. The subject lands were therefore correctly placed under the OLT Program of the government, which thereby warranted the denial of the petition for exemption. C. Propriety of the Denial of the Petition for Retention Anent the issue on retention, suffice it to state that Sps. Vales had no right to retain the subject lands considering that their aggregate landholdings, consisting of 58.6060 has., exceeded the 24-hectare landholding limit as above-explained.  Consequently, the subject lands would fall under the complete coverage of the OLT Program, without any right of retention on petitioners’ part, either under PD 27 or RA 6657, being mere successors-in-interest of Sps. Vales by virtue of intestate succession. In this respect, the denial of the petition for retention was likewise proper. D. Propriety of the Reconsideration of the DAR Secretary’s December 11, 2002 Order Finally, the Court finds no merit in petitioners’ claim that the December 11, 2002 Order of the DAR Secretary granting the petitions for exemption and retention had already attained finality and can no longer be reconsidered, reversed or modified, especially on a second motion for reconsideration which is a prohibited pleading.  In his September 25, 2003 Order, the DAR Secretary explained that a “palpable mistake” and “patent error” had been committed in determining the date of the filing of respondents’ motion for reconsideration, which upon review, was shown to have been timely filed, warranting reconsideration of his earlier order. Settled is the rule that issues of retention and non-coverage of a land under agrarian reform are within the domain of the DAR Secretary. By virtue of such special competence, he should be given an opportunity, even on a second motion for reconsideration, to rectify the errors he may have committed. The time-honored rule is that if a remedy within the administrative machinery can still be had by giving the administrative officer concerned every opportunity to decide on the matter that comes within his jurisdiction, then such remedy should be priorly exhausted. Besides, rules of procedure are construed liberally in administrative proceedings as administrative bodies are not bound by the technicalities applicable to courts of law, hence, should not be used to override substantial justice as in this case. All told, the Court finds no cogent reason to reverse the denial of the tribunals a quo of the petitions for exemption and retention herein considered. WHEREFORE, the petition is DENIED. The Decision dated July 25, 2007 and the Resolution dated September 27, 2007 of the Court of Appeals in CA-G.R. SP No. 01130 are hereby AFFIRMED. SO ORDERED.