G.R. No. 122363 - Valencia vs. Court of Appeals

Petitioner Victor G. Valencia, a government retiree, owned two parcels of agricultural land in Barangay Linothangan, Canlaon City, Negros Oriental.
The first parcel (23.7279 hectares) was covered by Transfer Certificate of Title (TCT) No. H-T-137, acquired in 1957; the second (6.4397 hectares) was covered by Homestead Application No. HA-231601.
Valencia previously leased the lands under civil law leases first to Glicerio Henson (10 years) and subsequently to Fr. Andres Flores (5 years) with clauses prohibiting subleasing and encumbering without owner's consent.
Respondents, private individuals allegedly cultivating the lands, claimed tenancy and received Certificates of Land Transfer (CLTs) under Presidential Decree No. 27 despite Valencia’s protests.

1961: Valencia and tenant Jesus Besario terminated the landlord-tenant relationship; Valencia regained possession.
1962-1970: Valencia executed a lease to Henson; then a subsequent lease to Fr. Flores from 1970-1975, subject to subleasing prohibition.
Respondents were designated by lessees to farm the lands and shared produce with lessees; they later became recipients of CLTs under the government's Operation Land Transfer (OLT) Program.
1975: Lease with Fr. Flores expired; Valencia demanded respondents vacate, but they refused and continued cultivation.
1976: Valencia filed a letter of protest with the Minister and later DAR Regional Office over possession and issuance of CLTs to respondents.
1985: DAR issued CLTs to respondents during ongoing investigations.
1988: Valencia and respondent Mantac entered into a leasehold contract; an administrative investigation was conducted by DAR hearing officer Atty. Vilmo Ampong.

Bautista, Valencia’s appointed overseer, collected shares of produce from respondents without Valencia’s authority; Valencia was not paid the landowner’s share.
Some respondents subleased parts of the property to third parties, violating typical agricultural tenancy norms.
The DAR Regional Office dismissed Valencia’s protest and upheld respondent’s right to continue possession, contrary to the hearing officer’s recommendation to cancel the CLTs.
Valencia filed appeals through administrative and judicial channels, including an appeal to the Office of the President following DAR Memo. Circular No. 3, series of 1994.

1991-1993: DAR Secretary and Executive Secretary affirmed DAR Regional Office’s decisions with modifications.
1995: Court of Appeals dismissed Valencia’s appeal on technical grounds, holding that the appeal was filed late and DAR Memo. Circular No. 3 conflicted with R.A. No. 6657 and Supreme Court Administrative Circular No. 1-95.
Valencia filed a Petition for Review on Certiorari with the Supreme Court seeking reversal of the Court of Appeals decision.

Whether DAR Memo. Circular No. 3, series of 1994, providing a mode of appeal to the Office of the President from decisions of the Secretary of Agrarian Reform, is valid and does not conflict with R.A. No. 6657 and Supreme Court rules.
Whether the doctrine of exhaustion of administrative remedies requires appeal to the Court of Appeals directly, bypassing the Office of the President as provided in DAR Memo. Circular No. 3.
Whether a civil law lessee under a lease agreement containing an express prohibition on subleasing or encumbering the land may validly install tenants on the leased agricultural land.
Whether respondents claiming tenancy have established a valid agricultural leasehold relationship entitling them to Certificates of Land Transfer.
Whether petitioner Valencia is entitled to retain certain portions of his land under the retention limits provided by law, excluding those covered by Presidential Decree No. 27.