TWELFTH DIVISION

[CA-G.R. CV No. 38851.  August 31, 1998.]

JUANITO DU TAGALOG, plaintiff-appellant, vs. TIMOTEO SIPE, SR., and TIMOTEO SIPE, JR., defendants-appellees.

D E C I S I O N

UMALI, J p:

This is an appeal from the decision of the Regional Trial Court, Branch 23 of General Santos City dated May 28, 1992 in Civil Case No. 4529 entitled " JUANITO DU TAGALOG versus TIMOTEO SIPE, SR. and TIMOTEO SIPE, JR." for Declaration of Homestead as exempt from the coverage of Agrarian Reform under P.D. 27 and Nullification of Land Transfer Certificates issued pursuant to P.D. 27, the dispositive portion of which reads:

"WHEREFORE, judgment is hereby rendered DISMISSING the complaint of the plaintiff against the defendants.

SO ORDERED. "(Rollo, p. 47)

The facts of the case as found by the trial court are as follows:

"In his complaint, plaintiff alleged that he acquired his 8-hectare homestead situated in Barangay Aglamang, Polomolok, South Cotabato when he was issued Homestead Patent No. 114121 and Original Certificate of Title No. (P28373) P-10543 on October 13, 1966, "that notwithstanding the inapplicability of P.D. 27 to lands obtained through homestead patent, there are two extant land transfer certificates covering plaintiff's above homestead, issued under the inapplicable P.D. 27, which land transfer certificates perforce must be vacated and nullified; Land Transfer Certificate No. 1601, issued in favor of defendant Timoteo Sipe, Jr. and Land Transfer Certificate No. 1602, in favor of defendant Timoteo Sipe, Sr." "that as owner of the homestead, plaintiff desires, and has decided, to cultivate and operate himself the homestead; and that all this time that defendants have been harvesting the subject homestead, at least seven (7) harvests went exclusively to them, each defendant depriving plaintiff of the sum of not less than Fifty Thousand (P50,000.00) Pesos, representing the value of the harvest due but not delivered, to plaintiff as his share as owner of the homestead".

He prayed that the court declare that the Agrarian Reform under P.D. 27 does not cover homestead land, particularly the homestead obtained through Homestead Patent No. 114121 and titled under OCT No. (P-28373) P-10543 in the name of the plaintiff Juanito Du Tagalog; "nullifying Land Transfer Certificates No. 1601 and No. 1602 issued under P.D. 27 in favor of the defendant Timoteo Sipe, Jr. and the defendant Timoteo Sipe, Sr., respectively", and ordering them to vacate plaintiff's homestead as plaintiff wants to cultivate and operate the homestead himself as owner thereof; and ordering the defendants to pay the plaintiff the sum of not less than Fifty Thousand (P50,000.00) Pesos each, representing the value of harvest due, but not delivered, to plaintiff as his share as owner of the homestead.

For failure of the defendants to file their answers, the Court, on motion of the plaintiff, declared the defendants in default in its order of September 9, 1991. On September 24, 1991, the plaintiff presented evidence.

At the hearing, plaintiff established all the allegations in his complaint. He presented OCT No. P-10543 evidencing his homestead, as Exhibit "A"; Land Transfer Certificate of Title No. 1601 in the name of Timoteo Sipe, Jr. as Exhibit "B"; and Land Transfer Certificate No. 1602 in the name of Timoteo Sipe, Sr. as Exhibit "C", both of which were issued to the defendants "pursuant to the provisions of the P.D. No. 27" (Exhibits "B-1" and "C-1").

He believes that his homestead is not covered by P.D. 27. He cites in his complaint the case of Alita, et al. vs. Court of Appeals, et al (170 SCRA 706) that homesteads are not covered by the Agrarian Reform under P.D. 27. He said that he did not consider the Sipe's as tenants "because we share whatever is the profit as all the plants are my expenses". (tsn, p. 6) The principal crop of the land is corn.

The plaintiff alleged in his complaint, and proved at the trial that Land Transfer Certificate Nos. 1601 and 1602 were issued to defendants Timoteo Sipe, Jr. and Timoteo Sipe, Sr., pursuant to P.D. No. 27 (Exhibits "B" and "B-1", Exhibits "C" and "C-1"), on December 12, 1986 and May 20, 1988, respectively." (Report, pp. 57-58)

After the presentation of evidence by the plaintiff, the case was submitted for decision. The trial court rendered judgment dismissing the complaint filed by the plaintiff. In dismissing the complaint, the trial court stated that it has no other recourse but to dismiss the complaint on the ground that the new jurisprudence enunciated in the case of Association of Small Landowners in the Philippines, Inc. versus Secretary of Agrarian Reform, 175 SCRA 343-393, totally supersedes the case of Alita, et. al. versus Court of Appeals, et. al., 170 SCRA 706-710 (Record, pp. 58-59).

From the said judgment of the lower court, the plaintiff instituted this instant appeal. The lone assignment of error posed before this court is as follows:

THE TRIAL COURT ERRED IN HOLDING THAT THE RULING IN ALITA, ET. AL. VS. COURT OF APPEALS, ET. AL. (170 SCRA 706) — THAT HOMESTEADS ARE NOT COVERED BY AGRARIAN REFORM UNDER P.D. 27 — HAS BEEN REVERSED AND ABANDONED IN THE CASE OF ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC. VS. SECRETARY OF AGRARIAN REFORM (175 SCRA 343) AND THAT, CONSEQUENTLY, PLAINTIFF — APPELLANT'S HOMESTEAD IS SUBJECT TO THE COVERAGE OF P.D. 27. (Rollo, pp. 29-30)

Plaintiff-appellant maintained that the decision in Alita, et. al. vs. Court of Appeals, et. al., ibid, declaring that homesteads are not covered by the agrarian reform under P.D. 27 was not overturned by the ruling in Association of Small Landowners in the Phil., Inc. vs. Secretary of Agrarian Reform, ibid, for the simple reason that the issue of applicability of P.D. 27 to homestead was never raised in the Association of Small Landowners case. Plaintiff-appellant also pointed out that the issues raised on the Association of Small Landowners case were questions on:

"(1)   Constitutionality of Republic Act 6657, P.D. 27, Proclamation 131 and Executive Orders 228 and 229.

(2)     When title to expropriated properties is transferred to the State.

(3)     Status of rights previously acquired by the tenant-farmers under P.D. 27 in the light of provisions of Republic Act 6657, otherwise known as the Comprehensive Agrarian Reform Law.

(4)     Whether landowners who were unable to exercise their rights of retention under P.D. 27 may enjoy the retention rights granted by Republic Act 6657" (Rollo, p. 31).

Appellant further pointed out that the resolution of these issues is embodied in the dispositive portion of the decision of the said case, to wit:

"WHEREFORE, the Court holds as follows:

"1.        R.A. No. 6657, P.D. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the constitutional objections raised in the herein petitions.

"2.        Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to their respective owners.

"3.        All rights previously acquired by the tenant-farmer under P.D. No. 27 are retained and recognized.

"4.        Landowners who are unable to exercise their rights granted by R.A. 6657 under the conditions therein prescribed.

"5.        Subject to the above-mentioned rulings, all petition are DISMISSED, without pronouncement as to costs." (Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 175 SCRA 393)

Appellant maintained that the decision in Small Landowners case quoted by the trial court is bereft of any statement, direct or indirect, that it reversed Alita, et. al. vs. Court of Appeals, et. al., ibid. What the decision stated is that "all rights acquired by the tenant-farmer under P.D. 27, as recognized under E.O. No. 228, are reiterated even now under R.A No. 6657 and these rights do not include the right to land transfer under P.D. 27 which decree is inapplicable to homesteads, because the Supreme Court said so in Alita, et. al. vs. Court of Appeals, et. al., ibid.

Appellees, despite receipt of the Appellant's Brief did not file any appellee's brief. As a result this appeal was submitted for decision.

The main issue in this case is whether or not the ruling of the Supreme Court in Alita et. al. vs. Court of Appeals et. al., ibid., has been overruled by the ruling of the Supreme Court in the Association of Small Landowners Association vs. Secretary of Agrarian Reform, ibid.

We answer in the negative

This Court deems to review the ruling pronounced by the Supreme Court in the above quoted cases. The Supreme Court in the case of Alita, et. al. vs. Court of Appeals, et. al., ibid., enunciated the following rulings and we quote:

"We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from the bondage of the soil and transferring to them ownership of the land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the social justice precepts of the Constitution. However, such contention cannot be invoked to defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No. 141. Thus:

"The Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right.' (Patricio v. Bayog, 112 SCRA 45).

In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders' right over the right of the tenant guaranteed by the Agrarian Reform statute. In point is Section 6 of Article XII of the 1987 Philippine Constitution which provides:

"Section 6.    The State shall apply the principles of agrarian reform or stewardship, whenever applicable in accordance with law, in the disposition or utilization of other natural resources, including lands of public domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities to their ancestral lands.'

Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead patents like those of the property in question reading.

"Section 6.    Retention Limits. . .

". . . Provided further, That original homestead grantees or their 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" (pp. 709-710).

It is very clear from the Alita case that lands obtained through homestead patent are not covered by P.D. 27. The land in question should not have been placed under the coverage of P.D. 27 for the same is exempted from its coverage.

On the other hand, the ruling of the Supreme Court in the Association of Small Landowners vs. Secretary of Agrarian Reform, ibid., which has been invoked by the trial court in dismissing the case is stated as follows:

"It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should counterbalance the express provision in Section 6 of the said law that "the landowners whose lands 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". (p. 391)

This ruling of the Supreme Court could not have overturned the previous ruling in the Alita case. As aptly pointed out by the plaintiff-appellant that the issue of applicability of P.D. 27 to homestead was never raised in the said case. In fact, the same ruling of the Supreme Court had also recognized the rights of the original homestead grantees or their direct compulsory heirs in stating 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 (Association of Small Landowners of the Phils, Inc., vs. Secretary of Agrarian Reform, ibid.)" Thus, the superiority of the homesteaders' right over the right of the tenant as guaranteed by the Agrarian Reform statute and Section 6 of Article XII of the 1987 Philippine Constitution must be given paramount consideration.

Granting arguendo that the ruling in Alita case was overturned by the ruling in Association of Small Landowners case, the lower court still must have overlooked the pronouncement made by the Supreme Court in the ruling in the latter case when it states that:

"It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared that he shall 'be deemed the owner' of a portion of land consisting of a family-sized farm except that "no title to the land owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly recognized farmer's cooperative." It was understood, however, that full payment of the just compensation also had to be made first, conformably to the constitutional requirement." (p. 390)

The said pronouncement requires that before the title of the land is issued to beneficiaries the full payment of the value of the land must first be made. Until then, the title remains to the owner of the land. In this wise, the lower court failed to consider the testimony of the plaintiff-appellant when he testified that:

"ATTY. ALFONSO:

Q         A while ago Mr. Witness, you stated that you are petitioning this Honorable Court for the cancellation of these 2 land transfer certificates, why?

A.        Yes, sir, because I believe my homestead farm lot is not covered by P.D. 27.

Q.        What is the basis of such belief if any?

A.        There is an order of the Supreme Court regarding this homestead titled lands, it is not covered by P.D. 27.

Q         Mr. Witness, in connection with the issuance of these 2 land transfer certificates of title, were you notified of any proceedings respecting such issuances?

A.        No, sir. And in fact I believe they can not issue this certificate without paying me the fair compensation of my land.

Q.        So you were present in any hearing in connection with the issuance of these certificates of land transfer?

A.        No sir.

Q         Are you sure of that you were not present?

A.        There was a notice of hearing but I received it late already. Let us say the hearing was January 1, I received the notice January 10 already.

Q.        After the actual hearing?

A.        After the actual hearing and it is already late so how can I be present in that actual hearing."

(TSN, Sept. 24, 1991, pp. 5-6)

From the foregoing testimony of the plaintiff-appellant, it also revealed that the procedural due process mandated by the Constitution was not followed.

It is, therefore, appropriate to point out that this court takes judicial notice of the fact that agrarian reform has became a paramount task in view of the inequitable distribution of ownership of land in the Philippines. The government in charge of its implementation, however, is not given unbridled authority when exercising its power in pursuit of solutions of these problems. The basic rules still have to be followed, which are as follows: "no person shall be deprived of life, liberty, or property without due process of law, nor shall be denied equal protection of the laws (Art. 3, Section 1, 1987 Constitution); private property shall not be taken for public use without just compensation) (Art. 3, Section 9, 1987 Constitution). As pronounced by the Supreme Court in the case of Filstream Int'l. Inc. vs. CA, et. al., G.R. No. 125218, January 23, 1988, that:

"Indeed, it must be emphasized that the State has a paramount interest in exercising its power of eminent domain for the general good considering that the right of the State to expropriate private property as long as it is for public use always take precedence over the interest of private property owners.

However, we must not lose sight of the fact that individual rights affected by the exercise of such rights are also entitled to protection, bearing in mind that the exercise of this superior right cannot override the guarantee of due process extended by law to owners of the property to be expropriated. In this regard, vigilance over compliance with due process requirements is in order."

In the case at bar, the records showed that no due process was accorded to the plaintiff-appellant when his property was taken away from him whereby he can ventilate his view nor any just compensation was given to him with regards to the taking of his property. Evidently there was a violation of petitioner-appellant constitutional rights which must accordingly be rectified.

WHEREFORE, the appeal is hereby GRANTED. The court hereby SETS ASIDE the decision rendered by the lower court dated May 28, 1992 and enters a new judgment as follows:

(1)       Declaring Land Transfer Certificates Nos. 1601 and 1602 in the name of defendants-appellees TIMOTEO SIPE, SR and TIMOTEO SIPE, JR., respectively, as null and void for having been issued under the inapplicable rule of P.D. 27;

(2)       Ordering the Register of Deeds of General Santos City to issue a new Certificate of Title in lieu of the cancelled Original Certificate of Title No. (P-28373) P-10543 in favor of plaintiff-appellant Juanito Du Tagalog;

(3)       Ordering defendants-appellees to vacate the lands covered by Land Transfer Certificate Nos. 1601 and 1602; and

(4)       Ordering defendants-appellees to pay plaintiff-appellant the amount of FIFTY THOUSAND PESOS (P50,000.00) as actual damages representing the value of the undelivered share in the harvest of the lands covered by Land Transfer Certificate Nos. 1601 and 1602.

SO ORDERED.

Ynares-Santiago and Callejo, Sr., JJ., concur.