Title
Heirs of Sandueta vs. Robles
Case
G.R. No. 203204
Decision Date
Nov 20, 2013
Heirs of Sandueta sought retention of 4.65-hectare riceland under RA 6657 but were denied due to ownership of 14.09 hectares of other agricultural lands, disqualifying them under LOI 474. SC upheld DAR and CA rulings.
right of retention
agricultural land
ownership

Case Summary (G.R. No. 203204)

Factual Background

The dispute focused on the subject portion, the 4.6523-hectare riceland component of Lot No. 3419 covered by the OLT Program. The original owner, Diosdado Jasmin, had instituted tenants over the subject portion prior to its sale to the Sanduetas. Under the OLT Program, the tenants were emancipated through EPs, thereby placing the subject portion within the agrarian reform system that recognized retention rights for qualified covered landowners.

Petitioners later sought to exercise retention over the subject portion. In the meantime, the DAR also treated the Sanduetas as landowners of a larger agricultural estate. Besides the 4.6523-hectare OLT-covered portion, the records showed that the Sanduetas owned an aggregate of 14.0910 has. of other agricultural lands. The presence of these additional lands became decisive because LOI 474 imposed disqualifying limitations on certain landowners’ retention rights where they owned other agricultural lands above specified thresholds.

Initiation of the DAR Proceedings and Petitioners’ Claims

On July 7, 2005, petitioners filed with the DAR District Office in Dipolog City a petition seeking to exercise their right of retention over the subject portion under **Section 6 of RA 6657. They invoked the rule in Assn. of Small Landowners in the Phils., Inc. v. Hon. Secretary of Agrarian Reform and sought additional reliefs: the annulment of the tenants’ EPs and an order compelling the tenants to pay back rentals.

The initial referral proceeded through DAR administrative channels. The Municipal Agrarian Reform Officer investigated and recommended denial of the petition. The Provincial Agrarian Reform Officer (PARO), while likewise recommending denial, indicated that petitioners could nonetheless be granted a 5-hectare retention area, to be taken from the portion of Lot No. 3419 not covered by the OLT Program.

DAR Regional Office Ruling and the Denial of Retention Over the OLT-Covered Portion

On April 5, 2006, the DAR Regional Office No. IX, through Regional Director Julita R. Ragandang, issued an order adopting the PARO’s recommendation. The Director reasoned that although a landowner who failed to exercise retention under P.D. 27 could still avail of a retention right under Section 6 of RA 6657 not exceeding 5 has., such an award was distinct from the additional 3 has. each that may be granted to children who meet the statutory qualifications under Section 6 and the other conditions under Section 22 of RA 6657.

The Director treated petitioners as absentee landowners who had left the cultivation of the subject portion entirely to the tenants. Based on this finding, she concluded that petitioners were not entitled to retain under Section 6 because they did not satisfy the requirement of actual cultivation or direct management. She therefore denied the petition for retention over the OLT-covered subject portion. Even with this denial, she granted to decedent Romulo Sandueta a retention of 5 has. taken from Lot No. 3419’s portion not covered by the OLT Program.

When petitioners moved for reconsideration, the Director denied the motion in an Order dated July 14, 2006, explaining that landowners covered by P.D. 27 who failed to exercise retention—leading to the issuance of tenants’ EPs—had no right to choose the specific area to be retained. She further invoked LOI 474, stating that landowners owning less than 24 has. of tenanted rice lands but also owning more than 7 has. of other agricultural lands could not retain their tenanted rice lands. Since petitioners failed to exercise or manifest their intention to retain prior to the tenants’ EPs, and because they owned about 14.0910 has. of other agricultural lands, she declared them disentitled to choose a retained area of 5 has., which she indicated could instead be accommodated in other holdings not covered by the OLT Program.

DAR Secretary’s Affirmance and the Court of Appeals’ Ruling

On appeal, Secretary Pangandaman issued the November 24, 2009 DARCO Order, affirming in toto the Regional Director’s April 5, 2006 order.

Petitioners then went to the Court of Appeals, which in its Decision dated April 26, 2012 affirmed the DAR’s denial of retention. The CA held, in substance, that the subject portion was properly covered by the OLT Program under LOI 474. It also ruled that petitioners did not have an absolute right to choose their retention area because of their ownership of 14.0910 has. of other agricultural lands. The CA accordingly affirmed the dismissal of petitioners’ retention petition under Section 6 of RA 6657.

Petitioners’ motion for reconsideration was denied in a Resolution dated August 14, 2012, prompting the instant petition.

Issue Presented

The essential issue was whether petitioners were entitled to avail of any retention right under Section 6 of RA 6657 with respect to the OLT-covered 4.6523-hectare subject portion.

The Court’s Reasoning on Retention, OLT Coverage, and Exemption

The Court began by reiterating that retention is a constitutionally protected mechanism that balances the consequences of compulsory land acquisition by allowing a covered landowner to choose the area to be retained, subject to legislative standards. This balance, the Court stressed, presupposed that the land fell within the scope of the OLT Program. If the land was beyond the ambit of the OLT Program, the landowner would not need retention and should instead seek exemption.

In explaining the distinct concept of exemption versus retention, the Court relied on Daez v. CA, where it was held that P.D. 27 covered tenanted rice or corn lands requiring that the land be devoted to rice or corn crops and that a system of share-crop or lease-tenancy existed. If either requisite was absent, the land was not covered by OLT and the landowner would apply for exemption, not retention. Conversely, where the land was OLT-covered, retention became relevant.

Application of Statutory Limits and LOI 474 Restrictions

The Court then traced the evolution from P.D. 27 to RA 6657. Under P.D. 27, covered landowners cultivating or intending to cultivate tenanted rice or corn land could retain up to 7 has.. With the enactment of RA 6657 on June 10, 1998, Section 6 reduced retention limits by generally setting the cap at 5 has., while awarding an additional 3 has. to each child subject to qualifications, including that the child be at least fifteen (15) years of age and be actually tilling or directly managing the farm.

The Court further explained that LOI 474 imposed restrictions on these retention rights. In Heirs of Aurelio Reyes v. Garilao, the Court had recognized that LOI 474 removed retention rights from landowners who, among others, owned other agricultural lands totaling more than 7 has. or held lands used for certain urban purposes from which they derived adequate income. The Court emphasized that LOI 474 amended the retention scheme under P.D. 27 by denying retention where the disqualifying conditions were present.

The Court also cited Santiago v. Ortiz-Luis, which clarified that while landowners who had not yet exercised their P.D. 27 retention rights could obtain new retention rights under RA 6657, the limitations under LOI 474 applied equally to applications filed under RA 6657. Thus, even if RA 6657 expanded statutory retention rights in one sense, LOI 474 could still disqualify the landowner based on ownership conditions.

Disqualification of Petitioners and Characterization of Romulo Sandueta’s Entitlement

Applying these principles, the Court noted that beyond the 4.6523-hectare OLT-covered subject portion, petitioners’ predecessors owned other agricultural lands totaling 14.0910 has. The Court held that this triggered the first disqualifying condition under LOI 474. Since petitioners were mere successors-in-interest, they could not be said to have acquired any retention right over the subject portion. The subject portion therefore fell under complete OLT coverage, with the consequence that the 5 and 3-hectare retention limits, as well as the landowner’s right to choose the retention area under Section 6 of RA 6657, did not apply.

While the Court agreed with the CA’s ultimate denial of retention, it corrected a specific terminology issue in the November 24, 2009 DARCO Order. The DARCO Order had inaccurately described Romulo Sandueta’s entitlement to the remaining 14.0910-hectare landholding outside the OLT-covered subject portion as a “vestige of his retention right.” The Court explained that this 14.0910-hectare landholding was not shown to be tenanted and therefore lay outsi

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