Title
Saguinsin vs. Liban
Case
G.R. No. 189312
Decision Date
Jul 11, 2016
Cristino sold land post-PD 27, violating agrarian reform laws; SC ruled sale void, denying petitioner’s retention claim due to tenancy coverage and procedural lapses.
retention rights
original owner
procedural issues

Case Summary (G.R. No. 189312)

Factual Background

On June 23, 1952, Cristino purchased from Pedro Espero a parcel of agricultural land measuring ten point nine five two four (10.9524) hectares in Bacayan, Baggao, Cagayan, later covered by a transfer certificate of title in Cristino’s name (TCT No. T-1336). On October 21, 1972, PD No. 27 was promulgated, launching the OLT program to transfer ownership to qualified tenant-farmers or farmer-beneficiaries of rice or corn lands they cultivated, while limiting landowner retention to not more than seven hectares.

Cristino’s land became subject to OLT. On March 21, 1975, he sold seven hectares of the covered lot to Lito Sibbaluca. On October 12, 1976, Cristino sold the remaining three point nine five two four (3.9524) hectares to petitioner. For that latter transaction, Cristino executed an Affidavit of Non-Tenancy stating that the property sold to petitioner was not tenanted. After PD No. 27 took effect, Emancipation Patents (EPs) were issued on December 4, 1987 and February 19, 1988 in favor of farmer-beneficiaries, including respondents, over the property.

On May 24, 1991, Isabel, Cristino’s widow, filed an application for retention of the 3.9524-hectare property sold to petitioner under Republic Act (RA) No. 6657. In her application, Isabel invoked retention and described the property as titled under TCT No. T-36360, indicating that her late husband had sold the property to petitioner in 1976, and asserting that such sale was contrary to PD No. 27. In 1991, the Provincial Agrarian Reform Office (PARO) recommended granting Isabel’s application, recalling and canceling the CLT/EPs awarded to the farmer-beneficiaries, and requiring execution of a leasehold contract between the landowner and the farmer-beneficiaries. PARO reasoned that the sale to petitioner did not affect OLT coverage because the property belonged to spouses Cristino and Isabel in 1972 when PD No. 27 took effect.

In 1995, a DAR Regional Office (DARRO) officer affirmed the PARO ruling and authorized Isabel to withdraw amortizations deposited by tenants. The DARRO also declared Cristino’s sale to petitioner null and void for violating DAR Memorandum Circular No. 8, Series of 1974, which prohibited transfer of ownership of tenanted rice/corn lands after October 21, 1972, except in circumstances allowed by law. The DARRO found that the land was devoted to palay and was tenanted. Before that January 30, 1995 order could fully play out, Isabel died, and no heir was substituted in subsequent proceedings.

Petitioner’s Application, DARRO Actions, and Respondents’ Challenges

After Isabel’s death, on May 12, 1998, petitioner filed a Petition for Clarificatory Order with the DARRO, asserting ownership based on the October 12, 1976 contract of sale and seeking to substitute herself as applicant so that retention would be granted to her. The DARRO ruled in petitioner’s favor on August 24, 1998, affirming the earlier DARRO order with modification by striking off Isabel as applicant and substituting petitioner, reasoning that retention was available to petitioner as legal owner of the property.

Respondents moved for reconsideration, arguing that (1) no hearing or investigation was conducted in the retention proceedings, thereby violating their constitutional right to due process, and (2) the sale to petitioner was void for violating PD No. 27 and related DAR memorandum circulars. The DARRO denied reconsideration and held that the property was not tenanted at the time of sale, consistent with the sale documents, and thus that MC No. 2-A was not violated. It further concluded that because petitioner was the owner, she had the personality to be granted retention, and that the property area was within the retention limit.

Respondents appealed to the DAR, but the DAR Secretary dismissed the appeal. The DAR Secretary explained that violation of MC No. 8 was not a ground to deprive a landowner of retention. The DAR Secretary treated Cristino as the landowner for purposes of determining retention eligibility even if the sale to petitioner was void, and reasoned that the tenants were not prejudiced because the area sold to petitioner was part of the retained area. The DAR Secretary also found that the property remained covered by PD No. 27 as tenanted rice and corn land.

Office of the President and Court of Appeals Proceedings

Respondents then appealed to the Office of the President (OP). The OP granted the appeal and denied Isabel’s application as substituted by petitioner. The OP held that the right of retention was not absolute. It treated the voluntary conveyance after the effectivity of PD No. 27 as an implied relinquishment of the right. The OP also found that the deed of sale and Affidavit of Non-Tenancy were self-serving and could not overcome the agrarian officials’ findings that farmer-beneficiaries were occupying the land.

Petitioner appealed to the CA. On May 20, 2009, the CA affirmed the OP. It reasoned that it was not proven that Cristino had no knowledge of the OLT coverage of his property, and it presumed that Cristino had already exercised the retention right over the first seven hectares sold to Lito. Thus, the subsequent sale of the remaining property to petitioner allegedly exceeded the retention limit and should no longer be treated as within the allowable retention area. The CA also upheld the findings that the land was tenanted, and it concluded that the sale was prohibited under MC No. 18-81 in relation to MC No. 2-A. On August 25, 2009, the CA denied petitioner’s motion for reconsideration, leading to the present petition.

Issues Raised by the Parties

Petitioner maintained that she had a right of retention because: (a) the land was not covered by PD No. 27; (b) the land was within the legal retention limit and not subject to distribution; (c) she was a purchaser in good faith; and (d) the property was already registered in her name.

Respondents countered that petitioner had no retention right because she was merely a successor-in-interest arising from an illegal conveyance, given that: (a) the property was tenanted; and (b) Cristino had already exercised the retention right when he sold the seven hectares to Lito.

Legal Basis and Reasoning

The Court held that the requisites for OLT coverage under PD No. 27 required that: (a) the land must be devoted to rice or corn crops; and (b) a system of share-crop or lease-tenancy obtains. Petitioner’s main defense relied on the claim that, at the time of the October 12, 1976 sale, the land was not tenanted, as supposedly evidenced by the deed of sale and Cristino’s Affidavit of Non-Tenancy, and that respondents failed to prove the land was devoted primarily to rice and corn.

The Court rejected that approach. It noted that the existence of tenancy had already been declared by the DAR, OP, and CA, and that only the DARRO had declared otherwise, basing its conclusion solely on Cristino’s affidavit. The Court found the affidavit self-serving and viewed it as executed merely to satisfy the supposed requisites for the sale to petitioner. It also referred to a MARO Memorandum dated October 16, 1990, where petitioner had acknowledged that respondents were bonafide tenant-tillers of the property even before the sale was consummated.

The Court further stressed procedural limits in a petition for review on certiorari under Rule 45: it reiterated that the Supreme Court is not a trier of facts, and it does not reweigh evidence. It also observed that petitioner never disputed tenancy or OLT coverage before the DARRO proceedings where findings were made, and that the argument that respondents failed to prove the land’s rice and corn character was raised only in petitioner’s reply before the CA. The Court held that issues or legal theories not brought to the attention of the trial tribunal could not be raised for the first time on appeal. Having established tenancy and rice/corn use, the Court sustained OLT coverage under PD No. 27.

On the effect of the prohibitions in DAR issuances, the Court discussed the regulatory framework. It recalled that, under PD No. 27, the DAR issued Memorandum Circular (MC) Nos. 2 and 2-A in 1973, and MC No. 8 in 1974. The Court quoted the explicit prohibition in MC No. 2-A, which among others forbade transfer of ownership after October 21, 1972, except to the actual tenant-farmer tiller. It also explained that MC No. 8 later modified earlier circulars but maintained a similar policy by prohibiting acts undermining PD No. 27, including transferring ownership to tenanted rice and/or corn lands after October 21, 1972, except under strict conformity with PD No. 27.

The Court also addressed petitioner’s reliance on good faith. It noted that petitioner raised the good faith theory only in the current petition for review, and, even then, the Court found she was not a buyer in good faith. It reasoned that she was aware the property was tenanted at the time of sale, and it treated Isabel’s own retention application—despite substitution—to acknowledge that the property was covered by the OLT and that the sale was contrary to PD No. 27. It found the position internally inconsistent, because petitioner invoked a retention right while simultaneously denying that OLT coverage applied. The Court further ruled that a certificate of title could not always be treated as conclusive proof of ownership, emphasizing that registration does not vest ownership and may be disputed when the real parties’ rights exist outside the title.

Given that the property was tenanted rice and/or corn land, the Court held that it was under OLT coverage and could not have been validly sold after October 21, 1972. Accordingly, the sale between Cristino and petitioner was void, and petitioner, not being the owner by virtue of that void sale, had no right of retention over the property. The Court held that ownership reverted to Cristino.

Cristino’s Heirs and the Right of Retention

Although ownership reverted to

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