Chapter 1 – Case No.

01

Heirs of Leonilo P. Nuñez, Sr. v. Heirs of Gabino T. Villanoza

G.R. No. 218666, April 26, 2017, 825 SCRA 264
Leonen, J. / Second Division

FACTS

Leonilo Sebastian Nuñez originally owned a land measuring more or less 2.833
hectares located at Barangay Castellano, San Leonardo, Nueva Ecija. Leonilo
mortgaged this property to then Com Savings Bank or Royal Savings and Loan
Association, now GSIS Family Bank, to secure a loan. Leonilo failed to pay the
amortization but the GSI did not make any action to collect the payment due at
the time until the loan matured in 1978.

Gabino T. Villanoza started tilling Leonilo’s land in 1981.

The GSIS extrajudicially foreclosed the mortgaged property 19 years later

including the land tenanted by Villanoza. A new title was issued in the name of
the new owner, GSIS Family Bank.

Leonilo filed a complaint before the Regional Trial Court (RTC) to annul the
extrajudicial foreclosure sale. Leonilo argued that an action to foreclose the
mortgage prescribed after 10 years.

While the case was pending at the RTC, the DAR sent a Notice of Coverage
(NOC) under Republic Act No. 6657 or the Comprehensive Agrarian Reform
Program to GSIS Family Bank, then landowner of the disputed property. Neither
GSIS Family Bank nor Leonilo exercised any right of retention within 60 days
from this NOC.

The government compulsorily acquired from GSIS Family Bank the said
disputed land. The bank's land title was cancelled, and issued a new title in the
name of the Republic of the Philippines. The Department of Agrarian Reform put
a portion of the said land under agrarian reform. Later on, the Department of
Agrarian Reform (DAR) issued an emancipation patent or Certificate of Land
Ownership Award (CLOA) to Villanoza.

During the pendency of the case, Leonilo died and was substituted by his heirs.
The Regional Trial Court (RTC) found that GSIS Family Bank's cause of action
had prescribed. Therefore, the extrajudicial foreclosure of real estate mortgage
against Sebastian was null and void. The Heirs of Sebastian applied to retain the
land before the DAR Region III.

The DAR Region III denied the heirs’ Application for Retention and ordered the
release of CLOA in favor of Villanoza. Villanoza then registered his Certificate of
Land Ownership Award title under the Torrens system. On November 24, 2004,
the Certificate of Land Ownership Award title was cancelled and a new regular
title, was issued in the name of Villanoza.

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 Chapter 1 – Case No. 01

ISSUE

Whether or not the Certificate of Land Ownership Award (CLOA) awarded to

Gabino Villanoza as farmer-tenant beneficiary valid.

RULING

Yes, the Certificate of Land Ownership Award (CLOA) awarded to Gabino

Villanoza as farmer-tenant beneficiary is valid.

Presidential Decree No. 27 declared the full ownership of the land to qualified
farmer beneficiaries including farmer-tenants. When PD No. 27 was superseded
by Republic Act No. 6657 (Comprehensive Agrarian Reform Law) when it was
enacted in 1988, the new law also provided for the compulsory land acquisition
scheme, which empowers the government to acquire private agricultural lands
for distribution to tenant-farmers. Under this law, a qualified farmer beneficiary
is given an emancipation patent, called the Certificate of Land Ownership
(CLOA), which serves as conclusive proof of his or her ownership of the land.

Here, Villanoza is a tenant-farmer in the disputed land. By being such, he

qualified as a farmer beneficiary under the law, which allowed him to be issued
with a CLOA by the DAR, the authority for such.

Hence, the CLOA awarded to a qualified farmer beneficiary such as farmer-

tenants is valid.