December 11, 1995
DAR OPINION NO. 83-95
Atty. Dionisio E. Velasco, Jr.
Chief, Legal Division
DAR Provincial Office
Bayombong, Nueva Vizcaya
Dear Atty. Velasco:
This is in reply to your letter seeking clarification on the following queries, to wit:
1. Can the holder of an EP/CLOA who has fully paid his amortization make use of said EP/CLOA as security for a loan with a bank or any financial institution? If in the affirmative, may the bank or financial institution foreclose on the mortgage in case the mortgagor fails to pay his obligation?
2. a) As to EP — What is the effect of the provision that it shall not be transferred except by hereditary succession or to the government in accordance with the provision of PD 27?
b) As to CLOA — What is the effect of the provision that it shall not be sold, transferred or conveyed except through hereditary succession or to the government or the Land Bank of the Philippines or to other qualified beneficiaries for a period of ten (10) years?
3. a) Who will implement or execute the Order of the Secretary of the DAR that has becomes final and executory?
b) What is the effect under the agrarian reform laws if the tenant refuses to enter into a leasehold contract and fails to deliver the lease rentals as ordained in the DAR Order for a period of two years or more to the landowner or his authorized representative?
4. a) What is the effect under the agrarian reform laws if the tenant refuses to enter into a leasehold contract with the new landowner or his authorized representative and likewise refuses to deliver the lease rentals for a period of two years or more?
Anent your first query, it is submitted that the use of an EP or CLOA covering a fully-paid farmlot as collateral for a loan is allowed. The mortgage may be foreclosed, subject to the DAR guidelines on the transfer of awarded lands. Said DAR guidelines are being finalized and will be issued shortly.
Anent your query on the provision relative to the transfer of title to land acquired pursuant to PD 27 and other agrarian laws, EO 228 provides that ownership of lands acquired by the farmer-beneficiary may be transferred after full payment of amortizations. However, aforesaid provision does not operate as a blanket authority for the indiscriminate transfer of awarded lands, and certain criteria which are set forth in RA 6657 must be satisfied in order that transfer over awarded lands can be effected. On the other hand, if the land has not yet been fully paid, the rights to the land may be transferred or conveyed, with prior approval of the DAR, to a qualified beneficiary who shall cultivate the same.
Anent your query as to who shall implement the final and executory Order issued by the DAR Secretary, Executive Order No. 129-A provides that the Regional Office within its administrative region is responsible for the implementation of laws, policies, plans, programs, projects, rules and regulation of the Department. Moreover, Department M.C. No. 10, Series of 1994 provides that the Order/Resolution of cases arising from the Administrative Implementation of Agrarian Reform Law issued by the Secretary shall be sent to the field office for purposes of implementation. It is therefore clear that the Regional Director is tasked to implement final and executory DAR Orders/Resolutions involving cases within his region.
Anent your query on the refusal of the tenant to deliver the lease rentals to the adjudge owner as directed in the DAR Order, the same constitutes a ground for his ejectment, hence, the landowner has the option of filing an ejectment case against the tenant before the DARAB for non-payment of lease rentals pursuant to Sec. 36 of RA 3844, as amended.
As regards your last query, the deliberate refusal to recognize the new landowner (per order of the court) and non-payment of lease rentals to him for a period of two years is a ground for his ejectment, hence the corresponding case may be filed against him.
We advise, however, that prior to the filing of any case against the tenant, a mediation conference be conducted to thresh out differences between the parties.
Please be guided accordingly.
Very truly yours,
(SGD.) HECTOR D. SOLIMAN
Assistant Secretary Legal Affairs Office
Copy furnished:
The Regional Director
DAR, Tuguegarao, Cagayan
PARO Alfredo Alog
DAR, Bayombong, Nueva Vizcaya
Atty. Pepito P. Planta
Regional Chief Legal Division
DAR, Tuguegarao, Cagayan