THIRD DIVISION
DON PEPE HENSON
ENTERPRISE,
REPRESENTED BY ITS
MANAGING PARTNER,MR. ARISTIDES R.
SUAREZ,
Petitioners,
G.R.
No.
140496
August 17, 2004
-versus-
MARIANO DAVID,
JUAN
PANGILINAN, MARCIAL DAYRIT,
AND MELQUIADES DE
GUZMAN,
Respondents.
chanroblesvirtualawlibrary
D E C I S I O N
CARPIO
MORALES, J.:chanroblesvirtuallawlibrary
.
Petitioner Don Pepe Henson
Enterprise, represented by its Managing Partner Aristides R. Suarez,
appeals
from the decision of the Court of Appeals in CA-G.R. SP No. 47768, “Don
Pepe Henson Enterprise v. Mariano David, et al.”
Petitioner, a partnership,
is the registered owner of a parcel of agricultural land covered by
Transfer
Certificate of Title (TCT) No. 47053 issued by the Registry of Deeds of
Angeles City, containing an area of more or less 19 hectares, and
located
at Barangay Pampang, Angeles City.cralaw:red
A portion of the land,
with an aggregate area of 5.5 hectares, is being tilled by petitioner’s
tenants—respondents Mariano David, Juan Pangilinan, Marcial Dayrit and
Melquiades de Guzman.cralaw:red
That a landlord-tenant
relationship exists between the parties was settled by this Court in
Don
Pepe Henson Enterprises v. Pangilinan[1]
wherein herein respondents were held to be entitled to security of
tenure
as tenants. During the pendency of that case, however, the
portion
tilled by respondents was placed under the Operation Land Transfer
Program
of the Department of Agrarian Reform (DAR) pursuant to P.D. No. 27, the
Tenant Emancipation Decree, resulting in the issuance of Certificates
of
Land Transfer in favor of respondents. The corresponding Emancipation
Patents
and Transfer Certificates of Title were consequently issued in
respondents’
name.cralaw:red
Months after the promulgation
of this Court’s decision in Don Pepe Henson,[2]
petitioner filed on September 30, 1988 a complaint, which was later
amended,
for “Declaration of Nullity, Violation of P.D. No. 816 and Damages”
against
respondents before the Department of Agrarian Reform Adjudication Board
(DARAB) Regional Office III in San Fernando, Pampanga.cralaw:red
In its complaint, petitioner
raised four causes of action.cralaw:red
For its first cause
of action, petitioner challenged the coverage of its land under P.D.
No.
27, it alleging that the land is devoted to sugarcane production and
is,
therefore, outside the coverage of said law which applies only to
“private
agricultural lands primarily devoted to rice and corn;” that the
land is exempt from P.D. No. 27 as it is not owned by the partnership
but
by each of the partners in common, each of whom is entitled to the
retention
limit of 7 hectares; that the issuance of Certificates of Land
Transfer,
the survey by the Bureau of Lands of the portion of the land awarded to
respondents, and the issuance of Emancipation Patents are null and
void,
prior notice thereof to petitioner not having been given.chanrobles virtual law library
For its second cause
of action, petitioner complained about respondents not paying rentals
nor
sharing their harvest, thus forfeiting their Certificates of Land
Transfer
pursuant to P.D. No. 816, “PROVIDING THAT
TENANT-FARMERS/AGRICULTURAL
LESSEES SHALL PAY THE LEASEHOLD RENTALS WHEN THEY FALL DUE AND
PROVIDING
PENALTIES THEREFOR.”
As its third cause of
action, petitioner questioned the formation of the Barangay Committee
on
Land Production as well as its valuation of the land, it alleging that
the said committee was organized without notice to petitioner and the
committee’s
valuation of the land was made through collusion with employees of the
DAR.cralaw:red
Finally, for its fourth
cause of action, petitioner claimed for damages.cralaw:red
Respondents, in their
Answer with Counterclaim, claimed, among other things, that while the
bulk
of petitioner’s land is devoted to sugarcane, their farmholding is
covered
by P.D. No. 27 because it has always been devoted to palay and
vegetables,
it citing the decision in Don Pepe Henson[3]
and the principle of conclusiveness of judgment.chanrobles virtual law library
On their failure to
pay rentals, respondents claimed that they actually offered to pay them
to petitioner which, did not, however, accept the same, it having
refused
to recognize them as tenants, thus drawing them to consign the rentals
in court. Respondents thus concluded that since P.D. No. 816 only
contemplates deliberate non-payment, they cannot be divested of their
farmholding.cralaw:red
As for petitioner’s
allegation that it was not informed of the formation of the Barangay
Committee
on Land Production as well as its claim that the valuation of the land
was fraudulently made, respondents denied the same.cralaw:red
The Provincial Adjudicator,
by Decision of 21 February 1992, rendered judgment in favor of
petitioner,
the dispositive portion of which reads:
“WHEREFORE,
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered in favor of
the
plaintiff and against the defendants, as follows:
(1) Declaring the
coverage
of defendants’ landholdings under P.D. No. 27 and the Certificates of
Land
Transfer and Emancipation Patents issued to them as null and void;
(2) Declaring the
defendants
to have forfeited their respective rights over the subject landholdings;
(3) Ordering the
defendants
to vacate peacefully their respective landholdings and surrender
possession
thereof to plaintiff;
(4) Ordering
defendants
to pay plaintiff 14 cavans per hectare/per annum as lease rentals for
agricultural
years 1988 to 1991 & every year thereafter, up to and until they
finally
vacate the subject landholdings;
(5) Ordering the
defendants
to pay to plaintiff the amount of P3,000.00 as attorney’s fees.chanrobles virtual law library
“No pronouncement
as
to costs.” (Underscoring supplied)
Aggrieved, respondents
appealed to the DARAB before which they raised the following issues: I
WHETHER OR NOT THE
5.5
HECTARE LANDHOLDING OF DEFENDANTS-APPELLANTS ARE COVERED BY THE LAND
REFORM
PROGRAM OF THE GOVERNMENT MORE SPECIFICALLY UNDER P.D. NO. 27
II
WHETHER OR NOT
DEFENDANTS-APPELLANTS
VIOLATED P.D. 816 NOTWITHSTANDING THE FACT THAT PLAINTIFF-APPELLEE
REFUSED
TO RECEIVE RENTAL PAYMENT AS IT DOES NOT RECOGNIZE THE FORMER AS ITS
TENANTS.
III
WHETHER OR NOT THERE
WAS COLLUSION BETWEEN DEFENDANTS-APPELLANTS AND CERTAIN EMPLOYEES OF
THE
DEPARTMENT OF AGRARIAN REFORM RE THE ISSUANCE OF THE EMANCIPATION
PATENTS.
The DARAB, by Decision
of October 24, 1997, reversed the decision of the Provincial
Adjudicator
and dismissed the complaint of petitioner.cralaw:red
Petitioner thus appealed
to the Court of Appeals on the following grounds:
(1) THAT THE
HONORABLE
ADJUDICATION BOARD GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION
IN DECLARING THAT THE LAND SUBJECT OF THE CASE WAS PROPERLY AND LEGALLY
COVERED UNDER P.D. NO. 27, DESPITE THE CLEAR ADMISSION OF DENIAL OF DUE
PROCESS;
(2) THAT THE
HONORABLE
ADJUDICATION BOARD GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION
IN DECLARING THAT THE RESPONDENTS DID NOT VIOLATE PRESIDENTIAL DECREE
NO.
816, BY APPLYING ITS OWN CONCLUSION AS ITS BASIS RATHER THAN THE
EVIDENCE
PRESENTED; AND
(3) THAT THE
HONORABLE
ADJUDICATION BOARD HAS INDEED ABUSED ITS DISCRETION AMOUNTING TO LACK
OF
JURISDICTION IN REVERSING THE DECISION OF THE PROVINCIAL ADJUDICATOR
WITHOUT
ANY JUSTIFIABLE BASIS IN LAW AND IN FACT.
By Decision of June
29, 1999, the Court of Appeals, sustaining the finding that the
farmholding
of respondents was covered by P.D. No. 27, held, however, that the
issuance
of the Certificates of Land Transfer, Emancipation Patents, and TCTs to
respondents was vitiated due to the violation of petitioner’s right to
due process.cralaw:red
Significantly, the appellate
court also held that there is no proof that the farmholding has been
paid
for by respondents who “do no[t] even seem to know how much they paid
and
for how many years.” Nonetheless, the appellate court held that
respondents
cannot be ejected because they were deemed owners thereof upon the
effectivity
of P.D. No. 27 on 21 October 1972, it citing Locsin v. Valenzuela[4]
whIch held:chanrobles virtual law library
“x
x x It follows that in respect of
land
subjected to Operation Land Transfer, the tenants-farmers became owners
of the land they tilled as of the effective date of Presidential Decree
No. 27, i.e., 21 October 1972. Pending full payment of the cost of the
land to the old landowner by the Land Bank of the Philippines, the
leasehold
system was "provisionally maintained" but the "lease rentals" paid by
the
tenants-farmers prior to such full payment by the Land Bank to the old
landowner, would be credited no longer as rentals but rather as
"amortization
payments" of the price of the land, the un-amortized portion being
payable
by the Land Bank. In respect of lands brought within the coverage of
Operation
Land Transfer, the leasehold system was legally and effectively
terminated
immediately on 21 October 1972 (notwithstanding the curious statement
in
Department Circular No. 8 that it was "provisionally
maintained").
x x x ”[5]chanrobles virtual law library
Hence, instead of
ordering
the ejectment of respondents, the appellate court annulled respondents’
Certificates of Land Transfer, Emancipation Patents, and TCTs but gave
them the opportunity to apply anew for the issuance of such documents,
this time ensuring that due process would be observed. Thus the
appellate
court disposed:
“WHEREFORE,
the Decision of the DARAB herein reviewed is hereby rendered (sic)
ANNULLING
the Emancipation Patents and Transfer Certificates of Title issued to
the
respondents and to Melquiades and Adriano de Guzman, WITHOUT PREJUDICE
to their applying for the issuance of new patents and certificates to
them,
after observance of due process of law.”
Hence, petitioner’s
present
petition for review under Rule 45 anchored to the following grounds:
(1) THAT THE
HONORABLE
COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION
IN AFFIRMING THAT THE LAND SUBJECT OF THE CASE IS COVERED UNDER P.D.
NO.
27, DESPITE THE FACT THAT IT IS CLEARLY A PART OF A LANDHOLDING
PRIMARILY
DEVOTED TO THE CULTIVATION OF SUGARCANE AND ITS AREA IS OUTSIDE THE
COVERAGE
OF THE LAW AS FOUND BY THE PROVINICIAL ADJUDICATOR OF THE DEPARTMENT OF
AGRARIAN REFORM IN ITS DECISION DATED FEBRUARY 21, 1992;
(2) THAT THE
HONORABLE
COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION
WHEN IT REFUSED TO APPLY P.D. NO. 816 AND EJECT THE RESPONDENTS FROM
PETITIONER’S
LAND, DESPITE THE CLEAR PRONOUNCEMENT OF THE LAW AND EXISTING EVIDENCE
ON RECORD. (Underscoring supplied.)
Petitioner prays for
the
modification of the challenged decision such that the imposition of a
qualification
on the annulment of the Certificates of Land Transfer, Emancipation
Patents
and TCTs, that it is “without prejudice to respondents’ applying
for the issuance of new patents and certificates to them, after
observance
of due process of law,” be deleted, and that respondents be ordered
ejected.chanrobles virtual law library
With regard to the first
ground to which the present petition is anchored, this Court holds that
while it is undisputed that the bulk of the 19-hectare land of
petitioner
is devoted to sugarcane production, the 5.5 hectare portion thereof –
the
farmholding of respondents – is devoted to palay, hence, such
farmholding
is covered by P.D. No. 27. The petition itself quotes approvingly
the Decision of the Provincial Adjudicator that “Undisputed is the fact
that the 5.5 hectares is devoted to planting of palay while the rest of
the nineteen (19) hectares are devoted to sugarcane production.”[6]
(Underscoring supplied.)
Petitioner’s attempt
to show that the farmholding awarded to respondents is exempt from the
coverage of P.D. No. 27 in light of its size, fails.cralaw:red
While the farmholding
contains only 5.5 hectares, Letter of Instruction (LOI) No. 474
addressed
to the Secretary of Agrarian Reform directs as follows :
“1. You
shall
undertake to place under the Land Transfer Program of the government
pursuant
to Presidential Decree No. 27, all tenanted rice/corn lands with areas
of seven hectares or less belonging to landowners who own other
agricultural
lands of more than seven hectares in aggregate areas or lands used for
residential, commercial, industrial or other urban purposes from which
they derive adequate income to support themselves and their
families.”
(Underscoring and emphasis supplied.)
If the 5.5-hectare
farmholding
is deducted from the 19-hectare property of petitioner, petitioner
still
has 13.5 hectares of farmland. The 5.5 hectare farmholding of the
land was thus legally disposed to respondents under the Operation Land
Transfer Program.chanrobles virtual law library
Still, petitioner posits
that the directive of LOI 474 notwithstanding, the farmholding is
exempt
from P.D. No. 27 as the 19-hectare land is not owned by the partnership
but by at least twenty-three (23) partners in common. And since
each
of these partners is entitled to the 7-hectare retention limit,
petitioner
concludes that the aggregate area of 19 hectares is exempt from said
law.cralaw:red
Petitioner’s position
does not lie. A partnership has a juridical personality separate
from the individual partners.[7]
The appellate court has found as a fact that petitioner is the
registered
owner of the land.[8]
This Court sees no reason to alter this finding, especially since this
is a petition for review in which only questions of law should be
entertained
as a general rule. Suffice it to state that petitioner, in so
positing,
contradicts itself, it having stated in its present petition that it is
“the absolute owner of a parcel of land x
x
x covered by Transfer Certificate of Title No. 47053.”[9]
The land being then owned by a single entity, a partnership, it is
among
those covered by the Operation Land Transfer Program pursuant to LOI
474.cralaw:red
As to the second ground
of the petition, petitioner seeks the ejectment of respondents from the
farmholding on the basis of two laws that may alternatively be applied,
P.D. No. 816 if the land is covered by P.D. No. 27, and R.A. 3844,
Section
36[10]
if it is not. In view of this Court’s finding that the land is
covered
by P.D. 27, the applicability of Section 36 of R.A. 3844 is ruled
out.
This leaves for consideration the remaining question of whether
respondents
should be ejected for alleged violation of P.D. No. 816.chanrobles virtual law library
Petitioner does not
state specifically what section of P.D. No. 816 it is invoking.
It
is gathered from the context of the petition, however, that it is
referring
to Section 2 thereof which reads:
“Section 2.
That any agricultural lessee of a rice or corn land under Presidential
Decree No. 27 who deliberately refuses and/or continues to refuse to
pay
the rentals or amortization payments when they fall due for a period of
two (2) years shall, upon hearing and final judgment, forfeit the
Certificate
of Land Transfer issued in his favor, if his farmholding is already
covered
by such Certificate of Land Transfer and his farmholding;”
(Underscoring
supplied.)
The Court of Appeals,
in
its challenged decision, held:
x
x
x There is no proof that the petitioner has been paid for its
land.
The respondents do no (sic) even seem to know how much they paid and
for
how many years. In fact, they are still insisting that they are
depositing
‘rentals’ in court.[11]
While the appellate
court
did not state whether the failure to pay was deliberate and/or
continuous,
as reflected above, petitioner filed the complaint before the DARAB
Regional
Office III as far back as September 30, 1988. No proof of payment
having been proffered and given after the lapse of a considerable
length
of time from the filing of the complaint, it can be assumed that no
payment
has been made and that such failure to pay was either deliberate or
continuing,
or both.
Respondents have
asserted
though that they have been paying through consignation by depositing
rentals
in court. The appellate court was not convinced, however, of the
veracity of such claim, and neither is this Court, no documentary
evidence
having been presented in support thereof.chanrobles virtual law library
There being then a deliberate
and/or continuing refusal to pay amortization payments, P.D. No. 816
applies.
It should be noted, however, that Section 2 thereof covers only those
farmholdings
“already covered by such Certificate of Land Transfer”.cralaw:red
In the present case,
the Court of Appeals ruled that the Certificates of Land Transfer,
Emancipation
Patents, and TCTs issued to respondents were vitiated due to the
violation
of petitioner’s right to due process, and should, therefore, be
annulled.
Since this particular ruling is not being challenged by any party,
there
appears to be no reason to disturb it.cralaw:red
The Certificates of
Land Transfer, Emancipation Patents and TCTs being void then, it would
be incongruous to apply Section 2 of P.D. No. 816. What should
apply
instead is Section 3 of the same law which reads:
“Section
3.
That any agricultural lessee whose landholding is not yet covered by a
Certificate of Land Transfer and who shall continue not to pay his
lease
rentals or amortization payments when they fall due for a period of two
(2) years to the landowner/agricultural lessor shall, upon proper
hearing
and judgment, lose his right to be issued a Certificate of Land
Transfer
under Presidential Decree No. 27 and his farmholding;” (Emphasis
and underscoring supplied.)chanrobles virtual law library
Therefore, in so far as
that the appellate court allowed respondents to apply for new patents
and
certificates, its decision is not in accordance with Section 3 of P.D.
No. 816 which operates to deprive respondents of their “right to be
issued
Certificate[s] of Land Transfer under P.D. No. 27 and [their]
farmholding.”
On this score, respondents’ ejectment is proper.
While in Locsin[12]
the pertinent portion of which was priorly quoted, this Court held that
tenant-farmers covered by P.D. No. 27 were deemed owners of the land
they
tilled as of October 21, 1972, the date of effectivity of the said
decree,
in respondents’ case, while they likewise were deemed owners of their
farmholding,
their “ownership” was subject to the provision of P.D. No. 816, Section
3, which they violated.chanrobles virtual law library
WHEREFORE, the challenged
decision of the Court of Appeals is hereby AFFIRMED with the
MODIFICATION
that the annulment of respondents’ Certificates of Land Transfer,
Emancipation
Patents, and Transfer Certificates of Title covering their farmholding
is WITH PREJUDICE to their applying for new patents and certificates,
and
they are ordered to peacefully vacate their farmholding.cralaw:red
SO ORDERED.cralaw:red
Panganiban, J., (Chairman),
and Corona, J., concur.
Sandoval-Gutierrez,
J., on leave.
____________________________
Endnotes:
[1]
161 SCRA 687 (1988).
[2]
Id.chanrobles virtual law library
[3]
Id.chanrobles virtual law library
[4]
194 SCRA 194 (1991).
[5]
Ibid. at 203-204.
[6]
Rollo, at 19.chanrobles virtual law library
[7]
Civil Code, art. 1768.
[8]
Rollo, at 28.
[9]
Id. at 10.chanrobles virtual law library
[10]
SEC.36. Possession of Landholding; Exceptions. – Notwithstanding
any agreement as to the period or future surrender of the land, an
agricultural
lessee shall continue in the enjoyment and possession of his
landholding
except when his dispossession has been authorized by the Court in a
judgment
that is final and executory if after due hearing it is shown that:chanroblesvirtuallawlibrary
x
x xchanrobles virtual law library
(6)
The agricultural lessee does not pay the lease rental when it falls
due:
Provided, That if the nonpayment of the rental shall be due to crop
failure
to the extent of seventy-five per centum as a result of a fortuitous
event,
the nonpayment shall not be a ground for dispossession, although the
obligation
to pay the rental due that particular crop is not thereby extinguished;
x x x
[11]
Id. at 34.chanrobles virtual law library
[12]
Supra. |