CASE DIGEST: Vales vs. Galinato

G.R. No. 180134, March 05, 2014




On March 3, 1972, Spouses Vales executed a Deed of sale conveying five (5) parcels of registered agricultural land with an aggregate area of 20.3168 hectares, to their three (3) children, herein petitioners. The sale however was not registered, hence, title to the subject lands remained in the names of Sps. Vales. At the time of the sale, the subject lands were tenanted.

Several months after the sale, PD No. 27 was passed decreeing the emancipation of tenants. As required under Letter of Instruction No. 41, petitioners executed a sworn declaration that they are the co-owners of the subject lands. This notwithstanding, the lands were placed under the coverage of the governments Operation Land Transfer (OLT) Program as properties belonging to Sps. Vales and not to herein petitioners.

Invoking the landowners retention rights provided under PD 27, petitioners filed, on December 23, 1975, a letter-requestfor the retention of the subject lands with the Office of the Agrarian Reform Team No. 06-24-185, which, however, was not acted upon. Meanwhile, petitioners entered into several Agricultural Leasehold Contracts with several tenants. The following year, 1988, Emancipation Patents were issued to certain tenants of the subject lands. Petitioners claimed, however, that such issuances were made without their knowledge and despite their vehement protest and opposition.

On January 12, 1988, petitioners filed a petition asking for the resolution of their earlier petition, exemptioin of the lands from the coverage of OLT Program and the affirmation of their right to retain seven (7) has.

The DAR Regional Director denied the petition, holding that ownership over the properties remained with Sps. Vales and that the sale did not bind the tenants concerned and no retention rights were transferred to petitioners. On appeal, the DAR Secretary initially reversed the ruling of the Regional Director but upon motion by the respondents, the Secretary reversed its earlier decision holding that the tenants must be shown to have acquired actual knowledge of the sale which transpired in 1972 but it appears from the evidence that they only knew of the sale on 1997. As such, petitioners never became the owners of the subject lands, warranting therefore the denial on their petition.

CA likewise denied their appeal, holding that since their predecessors-in-interest (i.e., Sps. Vales) were not entitled to exemption and retention under PD 27 given that their aggregate landholdings consist of 58.606 has, neither could petitioners avail of said rights under RA 6657. In this relation, the CA noted that while PD 27 allows a covered landowner to retain not more than seven (7) has. of his land, if his aggregate landholdings do not exceed 24 has., on the other hand, under LOI 474, where his aggregate landholdings exceed 24 has., the entire landholding inclusive of the seven (7) has. or less of tenanted rice or corn lands will be covered without any right of retention.

ISSUE: Whether or not the subject lands are exempt from OLT program coverage and whether the petitioners are entitled to avail any retention right

HELD: No. CA decision affirmed

Civil Law: Requirements for transfer of ownership to be binding upon tenants under PD 27

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: (a) the land must be devoted to rice or corn crops; and (b) 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.

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 landholdingsdo 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.

May 7, 1982 DAR Memorandum provides that tenants should (a) have actual knowledge of unregistered transfers of ownership of lands covered by Torrens Certificate of Titles prior to October 21, 1972, (b) have recognized the persons of the new owners, and (c) have been paying rentals/amortization to such new ownersin order to validate the transfer and bind the tenants to the same.

In order that the foregoing transfers of ownership 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.

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. It may therefore 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.

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.