[O.P. Case No. 98-H-8493.  January 07, 2000.]

IN RE: PETITION FOR RETENTION OF SEVEN (7) HECTARES TENANTED RICELAND UNDER OPERATION LAND TRANSFER PURSUANT TO PD 27,

CONSOLACION D. OLBES, petitioner.

IN RE: PETITION FOR EXEMPTION FROM THE COVERAGE OF LAND TRANSFER AND/OR CANCELLATION OF ANY OR ALL CERTIFICATES OF LAND TRANSFER COVERING PARCELS OF LAND COVERED BY TAX DECLARATION NO. 22-360, SITUATED AT SAN ROQUE, BACON, SORSOGON; TAX DECLARATION NO. 06-168; SITUATED AT BUENAVISTA, BACON SORSOGON; AND TAX DECLARATION NO. 272; SITUATED AT BON-OT, BACON, SORSOGON,

CONSOLACION VDA. DE OLBES, BELEN, RODRIGO, RENITA, AMADO, NORMA, BUENAVENTURA, MANUEL, TOMAS, ESTER, ROBERTO. EMILIA, FE, and ROGELIO. all surnamed OBLES, represented by RODRIGO OLBES, Atty.-in-Fact, petitioners-appellees, vs. Heirs of PACIFICO DIESTA, rep. by SANDY DIESTA, and heirs of SIXTO DISCAYA, rep. by CELSO DISCAYA, DOMINGO BANARES, HONESTO CORRAL, ONOFRE DUAZO, SEGUNDO DEPALAC, rep. by NILDA DEPALAC, respondents-appellants.

D E C I S I O N

          This resolves the appeal of respondents-appellants from the Order dated August 8, 1997 of then Secretary Ernesto D. Garilao of the Department of Agrarian Reform (DAR), the decretal portion of which reads, to wit:

          "WHEREFORE, In View of All the Above, Order is hereby issued denying the instant Motion for Reconsideration dated 05 September 1995 which is treated as an Appeal filed by the heirs of the late Pacifico Diesta, heirs of Sixto Discaya, heirs of Sofia Doma, Onofre Duazo, Domingo Banares, Honesto Corral, Carlito Deligero, Segundo Depalac, and Francisco Discaya for utter lack of merit. The subject riceland and "other agricultural lands" adjudicated to the heirs of the late Quirino Olbes are hereby declared exempted from the coverage of OLT and/or CARP without prejudice to the rights of any concerned farmers or tenants thereof to prove in a separate appropriate action that indeed such heirs presently own agricultural lands wherein the area of which is sufficient enough to be placed under CARP. The PARO concerned shall initiate the filing of Petition for Cancellation of any registered Emancipation Patent or Certificate of Land Transfer, if there be any, covering the subject rice land. However, any unregistered Emancipation Patent or Certificate of land Transfer generated covering said land is hereby revoked/cancelled accordingly. The MARO concerned is hereby directed to assist, any tenant-farmer on the subject land and the landowners thereof to execute Leasehold Contract pursuant to the existing agrarian law and its allied issuances. The landowners of the subject landholdings are hereby directed to respect the rights of the tenant-farmers and to maintain them in their peaceful possession and cultivation thereof as agricultural lessees. Any Order inconsistent herewith is hereby revoked and/or modified accordingly.

          As far as this Office is concerned, this case is hereby considered closed.

          SO ORDERED."

          The facts of this case are undisputed.

          Quirino Olbes, husband of Consolacion D. Olbes and father of the rest of petitioners-appellees, died on March 10, 1969, leaving several parcels of land as follows: a 14.9531-hectare riceland, 11.4464 hectares of which are tenanted, and a 50.948-hectare other agricultural land, all situated at Bon-ot, Buenavesta, and San Roque, Bacon, Sorsogon. Upon the effectivity of Presidential Decree (PD) No. 27 on October 21, 1972, the tenanted portion of the subject land (11.4464 has.) was placed under Operation Land Transfer (OLT) and, accordingly, the tenants therein were issued their respective Certificates of Land Transfer (CLTs) and eventually, Emancipation Patents (EPs).

          On January 27, 1976, petitioner-appellee Consolacion D. Olbers filed a petition for retention pursuant to the provision of PD 27. She declared as her landholding a 14.9531-hectare riceland and a 37.1864-hectare other agricultural land.

          On August 16, 1985, or during the pendency of said petition, petitioner-appellee Consolacion D. Olbes, joined by her thirteen (13) children, filed a separate petition for OLT Exemption/CLT Cancellation, claiming co-ownership of the properties left by the late Quirino Olbes. Acting on the petition, Officer-In-Charge (OIC) Pavio M. Villanueva, DAR Region V Agrarian Reform Team, in his 1st Indorsement dated September 10, 1985, opined that petitioners-appellees' landholding is covered by OLT pursuant to Letter of Instructions (LOI) No. 474, which placed under OLT tenanted rice/corn land seven (7) hectares or less in area under certain conditions.

          On April 24, 1989, the Regional Director for Region V, Jose S. Llames, issued a Resolution denying the said petition for retention on the ground that the landholding she (Consolacion Olbes) declared (14.9531 has. riceland and 37.1864 other agricultural lands) fell within the ambit of LOI No. 474, in relation to PD 27. Neither a motion for reconsideration nor an appeal was filed within the period allowed by law. It was only on April 19, 1995, or almost six (6) years, that she bothered to question the adverse resolution through a motion for reconsideration.

          On September 16, 1995, the tenant-beneficiaries on the 11.4464-hectare riceland, herein respondents-appellants, expressed their opposition to the belated filing of the motion for reconsideration.

          On August 1, 1996, Regional Director for Region V Percival Dalugdug issued an Order jointly resolving the motion for reconsideration of petitioner-appellee Consolacion D. Olbes and her separate petition, together with her children, for OLT Exemption/CLT Cancellation, the dispositive portion of which reads as follows:

          "WHEREFORE, premises considered, Order is hereby issued:

1.      Denying the Motion for Reconsideration of Consolacion Olbes to retain her tenanted rice land, but granting the retention of five (5) hectares of her other agricultural land pursuant to R.A. 6657;

2.      Granting each heir (child of Quirino Olbes) the retention of the tenanted riceland/or exemption thereof from the coverage of OLT pursuant to PD 27;

3.      Directing the MARO to assist the individual landowners in the identification of the area covered by CLTs & EPs which are declared exempted from PD 27, and the segregation thereof from the area or portion covered by OLT;

4.      Cancelling all CLT issued to tenant within the areas affected by the exemption and/or directing parties to file necessary cancellation proceedings before the DARAB with respect to Emancipation Patents issued to tenants therein;

5.      In no case shall the tenants within the affected area be dispossessed of the landholding they shall continue their peaceful possession and cultivation under a system of leasehold;

6.      Upholding the validity of Emancipation Patents within the riceland area owned by Consolacion Olbes;

7.      Placing under compulsary acquisition all other agricultural lands of Consolacion Olbes, not disposed and registered as of June 15, 1988; effectivity of CARP, taking into consideration par. 4-7, Sec. 7, R.A. 6657; if landowners has not voluntarily offered for sale to the Republic of the Philippines thru the DAR;

8.      Directing the MARO concerned to assist the petitioner (Consolacion) in the determination of her retention area under R.A. 6657.

          SO ORDERED."

          Not satisfied, respondents-appellants filed on September 5, 1996 a motion for reconsideration, which was treated as an appeal to the Office of the DAR Secretary.

          On August 8, 1997, then DAR Secretary Ernesto D. Garilao issued an order denying respondents-appellants' appeal, the dispositive portion of which is quoted at the outset. Their motion for reconsideration having been denied in an Order dated May 25, 1998, respondents-appellants have interposed this recourse.

          The appeal is without merit.

          Respondents-appellants, invoking laches and prescription, maintain that the petition for retention of Consolacion D. Olbes had already been resolved in a final and executory resolution dated April 24, 1989, while her petition, together with her children, for OLT Exemption/CLT Cancellation had already been ruled upon in the 1st Indorsement dated September 10, 1985 of OIC Pavio M. Villanueva, both denying the reliefs prayed for. The adverse judgments, they added, were never questioned, within the period allowed by law, either through a motion for reconsideration or appeal, until after the lapsed of a considerable period of time. Hence, petitioners-appellees' cause are now barred by precription and laches.

          The contention is without merit.

          While Consolacion Olbes indeed did not seek reconsideration of, or interpose an appeal from the Resolution dated April 24, 1989, it cannot be denied that during the pendency of said petition or on August 16, 1985, Consolacion D. Olbes, and her children filed a separate petition for OLT Exemption/CLT Cancellation. To us, no legal impediment exists for Consolacion D. Olbes joining her 13 children in a separate petition for OLT Exemption/CLT Cancellation involving the same land subject of her petition for retention. As one of the heirs, and necessarily a co-owner of the property of the late Quirino Olbes, she stands to be affected by whatever decision that may be rendered in said petition. In fine, she may be properly considered an indispensable party. Indispensable parties are those with such an interest in the controversy that a final decree would necessarily affect their rights, so that the courts cannot proceed without their presence (Seno vs. Mangubat, 156 SCRA 113 [1987]). Besides, the subsequent denial of her petition for retention pursuant to the provision of PD 27 did not foreclose the exercise of her retention right in accordance with the provision of R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988, which new right could be another basis in asking for OLT exemption/CLT cancellation. In the leading case of Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 175 SCRA 343 [1989], the Supreme Court ruled that:

          "Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under the conditions therein prescribed."

          Contrary to respondents-appellants' assertion, the 1st Indorsement dated September 10, 1985 of OIC Pavio M. Villanueva did not finally dispose of the petition ofr OLT exemption/CLT cancellation. The said "1st Indorsement" was nothing more but an opinion on the subject petition for OLT exemption/CLT cancellation, which at best, is merely recommendatory. As the DAR Secretary put it, "an Opinion of a Team Leader (OIC Pavio M. Villanueva) is not at all valid Order. It is the Regional Director who should make and Order. A Team Leader has only a recommendatory prerogative." (p. 4 of the appealed Order dated August 8, 1997)

          As also revealed by the records, the petition for OLT exemption/CLT cancellation proceeded in its regular course after its filing, with respondents-appellants filing an opposiiton thereto dated September 16, 1995. After evaluating the arguments raised in their respective pleadings and the evidence adduced, the Regional Director for Region V finally resolved the petition per his Order dated August 1, 1996. While it appears that the Order included an adjudication of an earlier petition for retention of Consolacion D. Olbes, which was revived through a belated filing of a motion for reconsideration, the same, however, is merely incidental and considered only because of the similarity of the subject matter involved in the two petitions. But its inclusion, albeit incidental, does not detract from the fact that said Order resolved mainly the petition for OLT exemption/CLT cancellation of the heirs of Quirino Olbes, including Consolacion D. Olbes.

          Clearly, therefore, the defense of laches and prescription is, under the attendant factual circumstances, unavailing.

          Respondents-appellants' posture that they became absolute owners of the subject riceland (11.4464-hectare) by the issuance of CLTs/EPs in their favor cannot be accorded cogency. Under PD 27, a landowner is entitled to a retention area of seven (7) hectares, while R.A. 6657, allows him to retain five (5) hectares. The Supreme Court, in Association of Small Landowners in the Philippines, Inc., et al. versus Honorable Secretary of Agrarian Reform, Supra, further recognizes such right, when it held that "landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the retention rights granted by R.A. 6657 under the conditions therein prescribed."

          A landowner can exercise his right of retention over and above the right of the farmer-beneficiary t to own a land. Accordingly, any award of the land to the latter will have to be recalled and cancelled to give way to the former's right of retention.

          "Petitioners' contention that the Secretary of Agrarian Reform had no more authority or jurisdiction to cancel Certificates of Land Transfer after they had been issued to the tenants-beneficiaries, is not correct. The issuance, recall or cancellation of certificates of land transfer fall within the the Secretary's administrative jurisdiction as implementor of P.D. 27. Having found that certain heirs, of Dr. Sison were entitled to retain their ricelands (which did not exceed seven [7] hectares) and had been illegally denied that right, Secretary Juico properly ordered the cancellation of the Certificates of Land Transfer which had been erroneously issued to petitioners." (Tenant of the Estate of Dr. Jose Sison vs. Court of Appeals, 210 SCRA 545 [1992])

          The effects of the presence of CLT/EP-holders in the retained area are set forth in DAR Administrative Order No. 04, Series of 1991, entitled "Supplemental Guidelines Governing the Exercise of Retention Rights by Landowners Under Presidential Decree No. 27", which provides that:

          "7.        Where there are CLT or EP-holders in the area to be retained, the DAR shall immediately inform the tenants concerned and provide them the opportunity to dispute or contest the landowner's claim. Moreover, the DAR shall ensure that the affected tenants, should they so desire, will be given priority in the distribution of other lands of the landowner or other lands identified by the DAR for redistribution, subject to the rights of those already in place.

          The same tenants may opt to remain in the retained area as leaseholders, in which case, the required lease agreements shall be executed in accordance with existing laws, rules and regulations. The tenant must exercise this option within a period of one (1) year from the time the landowner manifest his choice of the area of retention"

          Finally, respondents-appellants question the selection of their tenanted riceland as the retention area of petitioner-appellees, obviously implying that a tenanted riceland cannot be the subject of retention.

          We do not agree.

          The prerogative of choosing which portion will be retained belongs to the landowner. He can select any portion of his landholding, whether tenanted or not. If he chose the tenanted land, the DAR cannot do anything except persuade him to select other lands to prevent or minimize the possible dislocation of farmer-beneficiaries, but certainly cannot compel him. This is clearly provided in DAR Administrative Order No 04, Series of 1991, supra, thus:

          "6.        A landowner who owns lands other than rice and corn shall be persuaded to select the area he will retain from these other lands to prevent or minimize the possible dislocation of farmer-beneficiaries who have been issued Certificates of Land Transfer (CLTs) or Emancipation Patents (EPs)."

          WHEREFORE, foregoing premises considered, the assailed Order dated August 8, 1997 is hereby AFFIRMED and the instant appeal DISMISSED.

          SO ORDERED.

          Manila, Philippines.

By authority of the President:

(SGD.) RONALDO B. ZAMORA

Executive Secretary

Copy furnished:

Atty. Henry D. Diesta

Mr. Rodrigo Olbes

Department of Agrarian Reform