Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-61617 July 2, 1985

DR. TOLOMEO ZURBANO and BELEN B. ZURBANO, petitioners,

vs.
HONORABLE CONRADO ESTRELLA, MINISTER OF AGRARIAN REFORM,
HONORABLE SALVADOR PEJO, REGIONAL DIRECTOR OF MINISTRY OF
AGRARIAN REFORM, and IGNACIO BALBAERA, respondents.

Jose Lozada Lapak for respondents.

The Solicitor General for respondents.

FERNANDO, C.J.:

By far, one of the most far-reaching governmental reforms, acclaimed both here and
abroad, is Presidential Decree No. 27 issued on October 21, 1972, decreeing the
emancipation of the tenants from the bondage of the soil and transferring the ownership
of the land they till. Its validity was assumed in Chavez v. Zobel, 1 and upheld in Gonzales
v. Estrella. 2 It could not have been otherwise. The Constitution explicitly provides: The
State shall formulate and implement an agrarian reform program aimed at emancipating
the tenant from the bondage of the soil and achieving the goals enunciated in this
Constitution. 3The Constitution is worded in the future tense; the State is to formulate
and implement a vitally needed program. t was signed on November 30, 1972. It is worth
recalling that a month and nine days earlier, to be exact, on October 21, 1972, the epochal
Presidential Decree No. 27 was issued by President Marcos.

Thereafter. under a Letter of Instruction dated October 21, 1976, 4 the President directed
the then Secretary, now Minister of Agrarian Reform, to "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 ill 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. 5

It is the validity of such Letter of Instruction that is assailed in this prohibition proceeding
on the ground that it is class legislation and, therefore, violative of the equal protection
guarantee; that it is "a form of tyrannical imposition by a strong and powerful state" and,
as such, violative of the due process clause; and that it would as applied to petitioners, be
a taking of private property without just compensation. 6
Petitioners-spouses in this prohibition proceeding alleged that they are the owners of
agricultural lands, with six (6) parcels planted to coconuts, 56 hectares in area and two
(2) parcels of riceland, 1.86 hectares in size. 7It is further alleged that said "coconut lands
which are scattered in different barrios are very far from the poblacion of Labo where
petitioners reside which they could not even visit due to the unsettled peace and order
conditions," resulting in their only productive property being the ricelands. 8 On August
10, 1982, "petitioners received a communication from respondent Salvador Pejo of Region
V of the Ministry of Agrarian Reform informing them that the processing of the land
transfer had been initiated and requiring them to submit to the Regional Office all the
necessary documents pertinent to their claim" otherwise, the farmer-beneficiaries would
be issued the corresponding emancipation patents. 9 When they asked why a small piece
of property of only 1.86 hectares of riceland should be under Presidential Decree No. 27,
they were informed that the text of the letter of Instruction No. 474 calls for the two
parcels of ricelands being included in the Land Transfer Program. 10

The Solicitor General, in the Comment 11 he was required to file, stated that the total area
of the landholding of the petitioners is 56.14 hectares in coconut lands and two parcels of
riceland of 1.86 hectares. It was further stated that on August 2, 1982, respondent
Director Pejo did take the initial steps for the issuance of the Emancipation Patent to the
farmer beneficiaries based on the existing record of his office and earnestly required the
utmost cooperation from petitioners, but despite the initiation of the proceeding for the
land transfer claim, there was failure to extend such cooperation. He denied that the
Letter of Instruction assailed is unconstitutional, setting forth its background as an
implementing measure of Presidential Decree No. 27, the validity of which is not in
doubt. 12 He prayed for the dismissal of the petition. His Comment is considered as the
Answer.

The plea for dismissal must be granted. There is no legal basis for declaring Letter of
Instruction No. 474 void on its face on equal protection, due process and taking of private
property without just compensation grounds. The Constitution decrees no less than the
emancipation of tenants, and there are safeguards therein to assure that there be no
arbitrariness or injustice in its enforcement. There are, moreover, built-in safeguards to
preclude any unlawful taking of private property.

1. There is no merit to the contention that Letter of Instruction No. 474 denies equal
protection. To condemn as class legislation an executive act intended to promote the
welfare of tenants is to ignore not only the letter of the Constitution—incidentally cited in
the petition itself—requiring the "formulation and implementation of an agrarian reform
program aimed at emancipating the tenant from the bondage of the soil 13 but also the
nation's history. Among the highlights in the proceedings in the First Constitutional
Convention was the reference by then Delegate Miguel Cuaderno to the sad plight of the
national hero, Jose Rizal, reflective of the evil spawned by the tenancy system. 14

In Ramas v. Court of Agrarian Relations, 15 sustaining the validity of the Agricultural

Tenancy Act, 16 there is this relevant excerpt: The history of land tenancy, especially in
Central Luzon, is a dark spot in the social life and history of the people. It was among the
tenants of Central Luzon that the late Pedro Abad Santos acting as a saviour of the tenant
class which for generations has been relegated to a life of bondage, without hope of
salvation or improvement, enunciated a form of socialism as a remedy for the pitiful
condition of the tenants of Central Luzon. It was in Central Luzon also that the tenants
forming the PKM organization of tenants and, during the war, the Hukbalahap, rose in
arms against the constituted authority as their only salvation from permanent thraldom.
According to statistics, whereas at the beginning of the century we had only 19% of the
people belonging to the tenant class, after 60 years the prevailing percentage has reached
30%. It is the desire to improve the condition of the peasant class that must have impelled
the Legislature to adopt the provisions as a whole of the Agricultural Tenancy Act, and
particularly Section 14 of Said Act. 17Then came the Agricultural Land Reform Code, 18an
enactment that extended even greater benefits to tenants. It was declared valid in
Association of Rice and Corn Producers of the Philippines v. Land reform Council. 19Thus
was manifested anew, the concern shown for their rights, even if thereby the interest of
the property owners would be adversely affected. No heed was paid to the claim that there
was a denial of equal protection. finally, Presidential Decree No. 27, which anticipated
what was to be constitutional mandate that tenants in rice and corn lands be freed from
bondage of soil was issued. Again, this Court in the cited case of Gonzales v.
Estrella, 20had no difficulty dismissing a petition that it be declared unconstitutional. Nor
did counsel even insinuate a possible violation of the equal protection guarantee. In the
face of such consistent course of action dictated by the commitment of the fundamental
law to the Ideal of putting an end tot he evils of tenancy, any argument that thereby
landholders would be adversely affected is an exercise in futility—except on showing that
in implementing such mandate, there is arbitrariness or unfairness. To that aspect of the
case, we now turn.

2. There is no merit to the contention that the Letter of Instruction No. 474 amounts to
deprivation of property without due process of law. All that it provides is that the
Secretary then, now the Minister, of Agrarian Reform, is to take charge of Land Transfer
Program pursuant to the Presidential Decree No. 27. Landholders with tenanted rice/corn
lands with areas of seven hectares or less are included if they 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. 21It is manifest that there is no departure from
constitutional restraints. The attack on due process ground is unavailing as on the face of
the challenged measure fairness and justice may easily discerned. Nothing in its language
lend support to the contention that consequences so harsh and drastic would attend its
implementation. In language, scheme, and framework, this Letter of Instruction reveals
the plan and purpose to attain the goal envisioned by the Constitution but with due regard
to the landowners affected. There is a saving clause. They are exempt from its operation
if it be shown that from the other lands owned by them of more than seven hectares in
aggregate areas if agricultural, or other areas, whether residential, commercial, or
industrial, or lands devoted to other urban purposes, they are unable to derive adequate
income to support themselves and their families. Where then is the arbitrariness? Where
is the injustice?

3. Neither is there any merit tot he contention that there would be the taking of property
for public use without just compensation. The Constitution itself imposes the duty on the
State to emancipate the tenants from the bondage of the soil. What is more, even a month
before its adoption by the 1971-1972 Constitutional Convention, Presidential Decree No.
27 was issued. Its validity, to repeat, was unanimously sustained by this Tribunal. No
other conclusion could have been reached, conforming as it did to what the fundamental
law ordained. The only remaining question then is the compensation to be awarded the
landowner. That is provided for in the Decree. Thus: "For the purpose of determining the
cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value
of the land shall be equivalent to two and one-half (2½) times the average harvest of three
normal crop years immediately preceding the promulgation of this Decree; The total cost
of the land, including interest at the rate of six (6) per centum per annum, shall be paid
by the tenant in fifteen (15) years of (15) equal annual amortization. 22Nor is this all. This
petition may be premature. There are, as pointed out, built-in safeguards to assure that
landowners are not to be deprived of such lots "from which they derive adequate income
for the support of themselves and their families." If petitioners could show that the
application of the Letter of Instruction to them would be visited by the failure to meet that
standard, they are exempt. They would have then no valid cause for complaint.

WHEREFORE, the petition is dismissed for lack of merit. No costs.

Teehankee, Makasiar, Aquino, Concepcion, Jr., Abad Santos, Melencio-Herrera, Plana,

Escolin, Relova, Gutierrez, Jr., De la Fuente, Cuevas and Alampay, JJ., concur.
DIGEST:

ZURBANO vs ESTRELLA
137 SCRA 333 (1989)
FACTS:
PD 27 (October 21, 1972), decreeing the emancipation of the tenants from the
bondage of the soil and transferring the ownership of the land they till. Petitioners
challenged the validity of the Letter of Instruction from the President directing the
Minister of Agrarian Reform to “undertake to place under the Land transfer
Program of the government pursuant to PD 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 will 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”, on the ground that :

a. it is class legislation and, therefore, violative of the equal protection

guarantee;
b. that it is “a form of tyrannical imposition by a strong and powerful state”
and, as such, violative of the due process clause; and
c. that it would as applied to petitioners, be a taking of private property
without just compensation.

1. Petitioner-spouses are owners of agricultural lands, with 6 parcels planted to

coconuts, 56 hectares in are and 2 parcels of Riceland, 1.86 hectares in size.
2. The 2 parcels of Riceland were being included in the Land Transfer Program.
3. Dir. Pejo (Minister of Agrarian Reform) denied that the Letter of Instruction assailed
is unconstitutional, setting forth its background as an implementing measure of
PD 27, the validity of which is not in doubt.
SC: DISMISSED.
1. There is no legal basis for declaring Letter of Instruction No. 474 void on its face
on equal protection, due process and taking of private property without just
compensation grounds.
2. The Constitution decrees no less than the emancipation of tenants, and there are
safeguards therein to assure that there be no arbitrariness or injustice in its
enforcement. There are, moreover built-in safeguards to preclude any unlawful
taking of the private property.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-18814 July 31, 1962

ANACLETO P. NAVARRO, applicant-appellant,

vs.
THE DIRECTOR OF LANDS, oppositor-appellee.

Francisco Ventura for applicant-appellant.

Office of the Solicitor General for oppositor-appellee.

MAKALINTAL, J.:

This is an appeal by Anacleto P. Navarro from the order of the Court of First Instance of Manila
dated July 1, 1959, dismissing his application for registration of lots Nos. 1 and 2 of Plan PSU-
117149, both residential properties located in Malate along the Dewey Boulevard.

The application was filed on February 6, 1958 and docketed as Case No. N-53, L.R.C. Rec. No. N-
14566. The Director of Lands interposed an opposition, alleging that the lots applied for are part of
the public domain belonging to the Republic of the Philippines. Evidence was submitted by the
applicant on February 11 and March 30, 1959, after which the hearing was adjourned to June 18. On
May 8 of the same year the Director of Lands filed a motion to dismiss on two grounds: (1) that the
application was barred by prior judgment and (2) that the same was improper application for judicial
confirmation of imperfect title under Section 48, paragraph (b), of Public Land Law, as amended by
Republic Act No. 1942, which applies only to public agricultural lands and not to those which are
residential in character. The trial court, in its order from which this appeal has been taken, sustained
the motion on both grounds.

It appears that sometime in 1950 the Director of Lands instituted a cadastral proceeding in the Court
of First Instance of Manila (G.L.R.C. Cad. Rec. No. 6, G.L.R.C. Cad. Case No. 1) to settle and
adjudicate title to the same lots now in litigation. The Republic of the Philippines claimed them as
part of the public domain. One Caridad Guillen Cortez filed an answer and was later on substituted
by appellant Anacleto P. Navarro, who sought registration of the properties in his name pursuant to
the provision of Section 48, paragraph (b), of the Public Land Act. In the decision of the aforesaid
Court dated July 17, 1954 his claim was denied and the two lots were declared public lands. The
case was appealed to the Court of Appeals, which rendered a decision of affirmance on June 29,
1957 (CA-G.R. No. L-13983-R). Still unsatisfied, Navarro elevated the case to this Court for review
by certiorari, but the petition was dismissed "for being factual and for lack of merit" in a resolution
dated September 6, 1957.

The plea of res judicata must be upheld. The requisites of this plea are: (1) the former judgment
must be final; (2) it must have been rendered by a court having jurisdiction of the subject matter and
the parties; (3) it must be a judgment on the merits; and (4) there must be, between the first and
second actions, (a) identity of parties (b) identity of subject matter and (c) identity of cause of action.
The only controversy here is with respect to the last element, namely, identity of cause of action, the
others being concededly present. In the case of De la Rosa vs. Director of Lands, et al., G.R. No. L-
6311, Feb. 28, 1955; 53 O.G. No. 13, p. 4092 this Court held:
 The parcel of land (Lot No. 4) sought to be registered being the same lot already declared
public land in Land Registration Case No. 295, G.L.R.O. No. 30055, where the herein
appellant and the Director of Lands were parties and the applicant therein failed to establish
title secured from the Spanish Government or possession of the land in accordance with the
Public Land Act then in force, the decision in the former case declaring Lot No. 4 as part of
the public domain must be deemed res judicata.

The cause of action in both the present case and the former cadastral proceeding is the registration
of the two lots in question. The specific issue involved is whether the lots applied for are part of the
public domain or have so far been possessed by appellant that he must be deemed to have acquired
title thereto which is sufficient for registration in his name. The declaration by final judgment in the
cadastral proceeding that they are public lands settled this issue once and for all.

It is contended that the basis for such declaration was the insufficiency of appellant's evidence in the
former case to prove continuous possession by him and by his predecessors-in-interest since July
26, 1894, as required by the Public Land Law before its amendment by Republic Act No. 1942, and
that since in the present case his claim is based on possession only for a period of thirty years
immediately preceding the filing of his new application in 1958, in accordance with the amendatory
law, the issue has entirely changed and consequently he should have been allowed to prove such
claim. Even on this theory, however, we note that both in the decision of the Court of First Instance
in the cadastral case and in the decision of affirmance rendered by the Court of Appeals, the fact as
well as the length of the alleged possession of appellant and his predecessors-in-interest were
placed in issue and duly passed upon. The appellate court stated therein:

The evidence of appellant Anacleto P. Navarro stems mainly from his own testimony. He
declared that since 1936, he was lessee of the two lots from the spouses Emilio Arceo and
Margarita Jimenez. He fenced it and built a dike because when it was low tide, part of the
land was submerged in water. He made fillings on the property, planted coconuts thereon
and built two houses, which were destroyed during the liberation of Manila. Sometime later
he heard that the property was sold to Rosario Dumlao, who, in turn, sold it to Bernardino
Landeta; that thereafter the latter sold the land to Caridad Guillen Cortez from whom he
(appellant Anacleto P. Navarro) leased and later bought to property. Appellant Navarro
admits that neither Caridad Guillen Cortez nor her predecessors ever declared the land in
question for taxation purposes; and that none of them paid taxes on said land.

We start with the statement that it is a rule long familiar in this jurisdiction that all lands are
presumed to be a part of the public domain; that to overcome this presumption, evidence
must be more than a mere preponderance and that vague and indecisive proofs are
insufficient even in the absence of opposition on the part of the government.

Considering the averment in appellant's answer to the effect that his title over the two lots is
supposed to have been derived from Margarita Jimenez, the question of whether or not the
latter, that is Margarita Jimenez, ever became owner of the property looms large in the
resolution of the present case. To begin with, it is well to remember, as a pivotal point, that
said Margarita Jimenez only claims ownership over Lot No. 2 which is the smaller of the two
lots. Of course, she made a statement that Lot No. 1 is not included in her claim, but that if,
in fairness, it be disclosed at the hearing that some of it is really owned by her, she would
also include that portion in her claim. This vague and uncertain claim to Lot No. 1 remains
what it is, uncertain. Unable to pin-point her alleged property, Margarita Jimenez, was, during
the course of the trial, taken to the place. And true enough, she laid claim to Lot No. 2 and
also but to a small fraction of Lot No. 1.
On the face of this uncertain evidence, we are persuaded to state that right at this point, Lot
No. 1 should be excluded from appellant's claim and declared public land.

Inspite of the averment that the two lots in controversy constitute privately owned property,
the evidence is unanimous to the effect that none of the alleged owners ever declared the
land for taxation purposes. None of them ever paid taxes on the property. It has been
truthfully said that tax declarations and tax receipts constitute evidence of great weight in
support of possession or ownership. Tupaz, et al. vs. Ricamora, et al., 37 Gaceta Official,
No. 28, pp. 617, 618; Director of Lands vs. Aaron, et al., CA-G.R. No. 10337-R, October 28,
1954; Director of Lands vs. Baligod, et al., CA-G.R. No. 8749-R, May 13, 1955; Director of
Lands vs. Depositario, et al., CA-G.R. No. 10308-R, May 20, 1955; Angeles, et al. vs. Duran,
et al., CA-G.R. No. 16233-R, March 4, 1957. Any owner, the most ignorant included, knows
his obligation of seeing to it that his real property is declared for taxation purposes and that
he regularly pay the taxes thereon. This obligation could perhaps have escaped the attention
of one person. But to say that all the alleged owners from Juana Guinto, thru Margarita
Jimenez and her husband Francisco Arceo, Bernardino Landeta, Caridad Guillen Cortez and
finally appellant Anacleto P. Navarro forgot to declare the property for taxation purposes and
to pay the taxes thereon, is utterly unbelievable. Moraza vs. El Director de Terrenos, 37
Gaceta Official, No. 129, pp. 2819, 2821. Paraphrasing Mr. Justice Torres in Cruzado vs.
Bustos and Escaler, 34 Phil. 17, 35, none of the foregoing persons ever did "believe himself
to be the owner of the land he claims."

One look at the sketch, Exhibit 1, and sketch, Exhibit 2, of the Director of Lands, will readily
show why lots 1 and 2 in question could not have been private property. The whole of Lot
No. 1 and part of Lot No. 2 were originally under water forming part of Manila Bay; while the
remainder or upper portion of Lot No. 2 forms part of the mouth of Estero Maytubig which
flows into the Bay.

Then there is the oral evidence for the government.

Novardo Advincula, Civil Engineer of the Bureau of Public Works, testified as follows: When
the government proposed to extend Dewey Boulevard, he was assigned to locate the right of
way from Cortabitarte to Libertad. He used the plan Exhibit 1 of the Bureau of Lands and
was guided by the technical description furnished by the said bureau in his job to locate
exactly the proposed line of the right of way. In 1939 he made an ocular inspection of the
place. It was then that he found that the two lots in question were under water; so much so,
that at that time there were bancas tied to the poles in that place and that there were no
improvements on the land. Of course, the place at present is no longer under water as it was
drained and filled up by the Bureau of Public Works which dredged the Manila Bay and
pumped the dredged soil from the Bay into the area and throughout Dewey Boulevard
Extension. This filling was made before the war.

Another witness, Enrique Alcantara, surveyor of the Bureau of Lands, testified: He knows the
land in question because he was ordered by the Chief Surveyor to identify the adjoining
owners; that the land, consisting of the two lots described in plan Exhibit A has not been
included in the cadastral survey in 1913-1914 because the said lands were outside the
shore-line of Manila Bay. He likewise declared that he executed survey of Dewey Boulevard
Extension in 1935; that at that time he had to wade from Vito Cruz to Libertad for the reason
that the water thereon was hip deep and that Lots Nos. 1 and 2 were under water and no
improvements were found thereon. In 1951, so this witness continued, he made an
investigation of the adjoining owners of the land in question and that, then he found that said
lots were already filled up. Not knowing who the owners of the two lots were, he tried to
 gather information from the Office of the City Assessor of Manila. The said Office gave out a
written statement to the effect that the lots aforesaid definitely were never declared for
taxation or assessment purposes. The fact that the property in question was under water
prior to the filling thereof is corroborated by appellant Navarro himself. Navarro testified that
in the year he leased the land, he built a dike as part of the land was submerged under water
during low tide. During the course of the ocular inspection, Margarita Jimenez declared that
the land she was claiming became high "thru the sand thrown from the sea by means of the
machinery" probably belonging to the government. Tr. ocular inspection, p. 8.

True it is, that there is testimony in the record calculated to show that when Margarita
Jimenez and her husband acquired this property in 1907, they were informed by their
vendor, Jacinto Villalon — not Juana Guinto — that said Villalon had been in possession of
the land since the Spanish regime. However, the exact date such alleged possession by
Villalon commenced has not been established, and neither appellant nor any of his alleged
predecessors in interest, has shown acquisition of the land by composition title from the
Spanish government or by possessory information title or by any of the legal modes of
acquiring public lands.

Upon the facts, the conclusion is irresistible that appellant's evidence is utterly inadequate to
support his claim of ownership over the lots in question.

It is quite clear from the foregoing that the Court of Appeals, in dismissing appellant's claim in the
cadastral case, found it as a fact that he had not possessed the lands in question for even the thirty
years now asserted by him. Such finding is conclusive on the question of possession and precludes
any new litigation concerning it.

The foundation principle upon which the doctrine of res judicata rests is that parties ought not
to be permitted to litigate the same issue more than once; that, when a right or fact has been
judicially tried and determined by a court of competent jurisdiction, or an opportunity for such
trial has been given, the judgment of the court, so long as it remains unreversed, should be
conclusive upon the parties, and those in privity with them in law or estate. (National Bank
vs. Barreto, 52 Phil. 818, 824; Escudero vs. Flores, et al., G.R. No. L-7401, June 25, 1955).

One further point may be noted: When Republic Act No. 1942 was approved on June 22, 1957,
appellant's appeal in the cadastral case was still pending in the Court of Appeals and after it was
decided therein he filed before us a petition for review by certiorari, invoking precisely the provision
of the new law requiring only continuous possession, under claim of ownership, for a period of thirty
years to entitle the possessor to apply for judicial confirmation of his imperfect title. The dismissal of
the petition by this Court for lack of merit, therefore, constituted an adjudication of appellant's claim
in the light of such new legislation.

Having thus sustained appellee's plea that this case is already barred by prior judgment, we deem it
unnecessary to pass upon the second legal point raised by him, namely, that the lots in question
being residential in character, they do not fall within the purview of Section 48, paragraph (b), of the
Public Land Law, as amended by Republic Act No. 1942, and hence cannot be the subject of judicial
confirmation of an imperfect title.

WHEREFORE, the order appealed from is affirmed, with costs against appellant.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Paredes, Dizon and
Regala, JJ., concur.
Reyes, J.B.L., J., took no part.
 SECOND DIVISION

G.R. No. 133507 February 17, 2000

EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D. DAEZ, petitioners,

vs.
THE HON. COURT OF APPEALS MACARIO SORIENTES, APOLONIO MEDIANA, ROGELIO
MACATULAD and MANUEL UMALI, respondents.

DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals2 dated January
28, 1998 which denied the application of petitioner heirs of Eudosia Daez for the retention of a
4.1685-hectare riceland pursuant to Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law3, thereby reversing the Decision4 of then Executive Secretary
Ruben D. Torres and the Order5 of then Deputy Executive Secretary Renato C. Corona, both of
which had earlier set aside the Resolution6 and Order7 of then Department of Agrarian Reform (DAR)
Secretary Ernesto D. Garilao denying exemption of the same riceland from coverage under
Presidential Decree (P.D.) No. 27.

The pertinent facts are:

Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in Barangay Lawa,
Meycauayan, Bulacan which was being cultivated by respondents Macario Soriente, Rogelio
Macatulad, Apolonio Mediana and Manuel Umali under a system of share-tenancy. The said land
was subjected to the Operation Land Transfer (OLT) Program under Presidential Decree (P.D.) No.
278 as amended by Letter of Instruction (LOI) No. 4749. Thus, the then Ministry of Agrarian Reform
acquired the subject land and issued Certificates of Land Transfer (CLT) on December 9, 1980 to
private respondents as beneficiaries.

However, on May 31, 1981, private respondents signed an affidavit, allegedly under duress, stating
that they are not share tenants but hired laborers10. Armed with such document, Eudosia Daez
applied for the exemption of said riceland from coverage of P.D. No. 27 due to non-tenancy as well
as for the cancellation of the CLTs issued to private respondents. 1âwphi1.nêt

In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared ownership
over 41.8064 hectares of agricultural lands located in Meycauayan, Bulacan and fourteen (14)
hectares of riceland, sixteen (16) hectares of forestland, ten (10) hectares of "batuhan" and 1.8064
hectares of residential lands11 in Penaranda, Nueva Ecija. Included in their 41.8064-hectare
landholding in Bulacan, was the subject 4,1685-hectare riceland in Meycauayan.

On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying Eudosia Daez's
application for exemption upon finding that her subject land is covered under LOI No. 474, petitioner
being owner of the aforesaid agricultural lands exceeding seven (7) hectares12.

On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong requesting for
reconsideration of Undersecretary Medina's order. But on January 16, 199213 Secretary Leong
affirmed the assailed order upon finding private respondents to be bonafide tenants of the subject
land. Secretary Leong disregarded private respondents' May 31, 1981 affidavit for having been
executed under duress because he found that Eudosia's son, Adriano, who was then the incumbent
Vice-Mayor of Meycauayan, pressured private respondents into signing the same.
Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of Appeals via a
petition for certiorari. The Court of Appeals, however, sustained the order of Secretary Leong in a
decision dated April 29, 1992. Eudosia pursued her petition before this court but we denied it in a
minute resolution dated September 18, 1992. We also denied her motion for reconsideration on
November 9, 1992.

Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents (EPs) to private
respondents. Thereafter, the Register of Deeds of Bulacan issued the corresponding Transfer
Certificates of Title (TCTs).

Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her,
Eudosia Daez next filed an application for retention of the same riceland, this time under R.A. No.
6657.

In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B. Bernardo allowed
Eudosia Daez to retain the subject riceland but he denied the application of her eight (8) children to
retain three (3) hectares each for their failure to prove actual tillage of the land or direct management
thereof as required by law14. Aggrieved, they appealed to the DAR.

On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order of Regional
Director Bernardo in a Resolution,15 the decretal portion of which reads, viz.:

WHEREFORE, premises considered, this Resolution is hereby issued setting aside with
FINALITY the Order dated March 22, 1994 of the Regional Director of DAR Region III.

The records of this case is remanded to the Regional Office for immediate implementation of
the Order dated January 16, 1992 of this office as affirmed by the Court of Appeals and the
Supreme Court.

SO ORDERED.

Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19, 199516.

She appealed Secretary Garilao's decision to the Office of the President which ruled in her favor.
The dispositive portion of the Decision17 of then Executive Secretary reads:

WHEREFORE, the resolution and order appealed from are hereby SET ASIDE and
judgment is rendered authorizing the retention by Eudosia Daez or her heirs of the 4.1685-
hectare landholding subject thereof.

SO ORDERED.18

Aggrieved, private respondents sought from the Court of Appeals, a review of the decision of the
Office of the President.

On January 28, 1999, the said Decision of the Office of the President was reversed. The Court of
Appeals ordered, thus:

WHEREFORE, the assailed decision of July 5, 1996 and Order dated October 23, 1996 of
the public respondents are REVERSED AND SET ASIDE, and the Resolution and Order of
 DAR Secretary Ernesto D. Garilao respectively dated August 26, 1994 and January 19, 1995
are REINSTATED.

SO ORDERED.

Hence, this petition which assigns the following errors:

I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT DISTINCTION

BETWEEN EXEMPTION FROM AGRARIAN REFORM COVERAGE AND THE RIGHT OF
RETENTION OF LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN ADVERSE
DECISION IN THE FORMER WILL FORECLOSE FURTHER ACTION TO ENFORCE THE LATTER
CONSIDERING THAT THEY CONSTITUTE SEPARATE AND DISTINCT CAUSES OF ACTION
AND, THEREFORE, ENFORCEABLE SEPARATELY AND IN SEQUEL.

II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE PRINCIPLE
OF RES JUDICATA DESPITE THE FACT THAT THE PREVIOUS CASE CITED (EXEMPTION
FROM COVERAGE DUE TO NON-TENANCY) AND THE PRESENT CASE (RETENTION RIGHT)
ARE OF DIFFERENT CAUSES OF ACTION.

III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED/OPINED THAT THERE
WAS A CUT-OFF DATE (AUGUST 27, 1985) FOR LANDOWNERS TO APPLY FOR EXEMPTION
OR RETENTION UNDER PD 27 AND THOSE WHO FAILED TO FILE THEIR
APPLICATIONS/PETITIONS ARE DEEMED TO HAVE WAIVED THEIR RIGHTS.

IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT PETITIONERS

(RESPONDENTS THEREIN) ARE GUILTY OF ESTOPPEL.

V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LAND
SUBJECT OF THIS CASE IS NO LONGER OWNED BY PETITIONERS SINCE PRIVATE
RESPONDENTS HAVE ALREADY BEEN ISSUED NOT ONLY THEIR RESPECTIVE
CERTIFICATES OF LAND TRANSFER BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF TITLE
OVER THE DISPUTED AREA.19

We grant the petition.

First. Exemption and retention in agrarian reform are two (2) distinct concepts.

P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice
or corn lands. The requisites for coverage under the OLT program are the following: (1) the land
must be devoted to rice or corn crops; and (2) there must be a system of share-crop or lease-
tenancy obtaining therein. If either requisite is absent, a landowner may apply for exemption. If either
of these requisites is absent, the land is not covered under OLT. Hence, a landowner need not apply
for retention where his ownership over the entire landholding is intact and undisturbed.

P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is irrigated,
a three (3)-hectare lot constituting a family size farm. However, said law allows a covered landowner
to retain not more than seven (7) hectares of his land if his aggregate landholding does not exceed
twenty-four (24) hectares. Otherwise, his entire landholding is covered without him being entitled to
any retention right20.
Consequently, a landowner may keep his entire covered landholding if its aggregate size does not
exceed the retention limit of seven (7) hectares. In effect, his land will not be covered at all by the
OLT program although all requisites for coverage are present. LOI No. 474 clarified the effective
coverage of OLT to include tenanted rice or corn lands of seven (7) hectares or less, if the
landowner owns other agricultural lands of more than seven (7) hectares. The term "other
agricultural lands" refers to lands other than tenanted rice or corn lands from which the landowner
derives adequate income to support his family.

Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or
corn crops even if it is tenanted; or (2) the land is untenanted even though it is devoted to rice or
corn crops.

On the other hand, the requisites for the exercise by the landowner of his right of retention are the
following: (1) the land must be devoted to rice or corn crops; (2) there must be a system of share-
crop or lease-tenancy obtaining therein; and (3) the size of the landholding must not exceed twenty-
four (24) hectares, or it could be more than twenty-four (24) hectares provided that at least seven (7)
hectares thereof are covered lands and more than seven (7) hectares of it consist of "other
agricultural lands".

Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT and
those for the grant of an application for the exercise of a landowner's right of retention, are different.

Hence, it is incorrect to posit that an application for exemption and an application for retention are
one and the same thing. Being distinct remedies, finality of judgment in one does not preclude the
subsequent institution of the other. There was, thus, no procedural impediment to the application
filed by Eudosia Daez for the retention of the subject 4.1865-hectare riceland, even after her appeal
for exemption of the same land was denied in a decision that became final and executory.

Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject
4.1685 riceland.

The right of retention is a constitutionally guaranteed right, which is subject to qualification by the
legislature21. It serves to mitigate the effects of compulsory land acquisition by balancing the rights of
the landowner and the tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner22. A retained area, as its name denotes, is land which
is not supposed to anymore leave the landowner's dominion, thus sparing the government from the
inconvenience of taking land only to return it to the landowner afterwards, which would be a
pointless process.

In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian
Reform23, we held that landowners who have not yet exercised their retention rights under P.D. No.
27 are entitled to the new retention rights under R.A. No. 665724. We disregarded the August 27,
1985 deadline imposed by DAR Administrative Order No. 1, series of 1985 on landowners covered
by OLT. However, if a landowner filed his application for retention after August 27, 1985 but he had
previously filed the sworn statements required by LOI Nos. 41, 45 and 52, he is still entitled to the
retention limit of seven (7) hectares under P.D. No. 2725. Otherwise, he is only entitled to retain five
(5) hectares under R.A. No. 6657.

Sec. 6 of R.A. No. 6657, which provides, viz.:

Sec. 6. Retention Limits — Except as otherwise provided in this Act, no person may own or
retain, directly or indirectly, any public or private agricultural land, the size of which shall vary
 according to factors governing a viable family-size, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the
following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is
actually tilling the land or directly managing the farm; Provided, That landowners whose land
have been covered by Presidential Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of this Act
shall retain the same areas as long as they continue to cultivate said homestead.

The right to choose the area to be retained, which shall be compact or contiguous, shall
pertain to the landowner. Provided, however, That in case the area selected for retention by
the landowner is tenanted, the tenant shall have the option to choose whether to remain
therein or be a beneficiary in the same or another agricultural land with similar or comparable
features. In case the tenant chooses to remain in the retained area, he shall be considered a
leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant
chooses to be a beneficiary in another agricultural land, he loses his right as a lease-holder
to the land retained by the landowner. The tenant must exercise this option within a period of
one (1) year from the time the landowner manifests his choice of the area for retention.

In all cases, the security of tenure of the farmers or farmworkers on the land prior to the
approval of this Act shall be respected.

Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer
of possession of private lands executed by the original landowner in violation of this Act shall
be null and void; Provided, however, That those executed prior to this Act shall be valid only
when registered with the Register of Deeds within a period of three (3) months after the
effectivity of this Act. Thereafter, all Register of Deeds shall inform the DAR within thirty (3)
days of any transaction involving agricultural lands in excess of five (5) hectares26.

defines the nature and incidents of a landowner's right of retention. For as long as the area to be
retained is compact or contiguous and it does not exceed the retention ceiling of five (5) hectares, a
landowner's choice of the area to be retained, must prevail. Moreover, Administrative Order No. 4,
series of 1991,27 which supplies the details for the exercise of a landowner's retention rights, likewise
recognizes no limit to the prerogative of the landowner, although he is persuaded to retain other
lands instead to avoid dislocation of farmers.

Without doubt, this right of retention may be exercised over tenanted land despite even the issuance
of Certificate of Land Transfer (CLT) to farmer-beneficiaries.28 What must be protected, however, is
the right of the tenants to opt to either stay on the land chosen to be retained by the landowner or be
a beneficiary in another agricultural land with similar or comparable features.29

Finally. Land awards made pursuant to the government's agrarian reform program are subject to the
exercise by a landowner, who is so qualified, of his right of retention.

Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands. Thereafter, they
are issued Emancipation Patents (EPs) after compliance with all necessary conditions. Such EPs,
upon their presentation to the Register of Deeds, result in the issuance of the corresponding transfer
certificates of title (TCT) in favor of the beneficiaries mentioned therein30.
Under R.A. No. 6657, the procedure has been simplified31. Only Certificates of Land Ownership
Award (CLOAs) are issued, in lieu of EPs, after compliance with all prerequisites. Thereafter, upon
presentation of the CLOAs to the Register of Deeds, TCTs are issued to the designated
beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from retaining
the area covered thereby. Under Administrative Order No. 2, series of 199432, an EP or CLOA may
be cancelled if the land covered is later found to be part of the landowner's retained area.

A certificate of title accumulates in one document a comprehensive statement of the status of the fee
held by the owner of a parcel of land.33 As such, it is a mere evidence of ownership and it does not
constitute the title to the land itself. It cannot confer title where no title has been acquired by any of
the means provided by law34.

Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a
homestead patent because the land covered was not part of the public domain and as a result, the
government had no authority to issue such patent in the first place35. Fraud in the issuance of the
patent, is also a ground for impugning the validity of a certificate of title36. In other words, the
invalidity of the patent or title is sufficient basis for nullifying the certificate of title since the latter is
merely an evidence of the former.

In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland were
issued without Eudosia Daez having been accorded her right of choice as to what to retain among
her landholdings. The transfer certificates of title thus issued on the basis of those CLTs cannot
operate to defeat the right of the heirs of deceased Eudosia Daez to retain the said 4.1685 hectares
of riceland.

WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals,
dated January 28, 1998, is REVERSED and SET ASIDE and the Decision of the Office of the
President, dated July 5, 1996, is hereby REINSTATED. In the implementation of said decision,
however, the Department of Agrarian Reform is hereby ORDERED to fully accord to private
respondents their rights under Section 6 of R.A. No. 6657. 1âwphi1.nêt

No costs.

SO ORDERED.

Bellosillo and Mendoza, JJ., concur.

Quisumbing, J., took no part. Prior official action.
Buena, J., is on leave.