[DARCO ORDER NO. CASE-10-02632.  October 19, 2010.]
A-9999-07-MS-002-05

IN RE: ILLEGAL SALE OF TCT NO. 193/CLOA NO. 72603 LOCATED IN SUDLON, CEBU

TIRSO RICAMATA and GEMMA GABUTERO, respondents-appellants.

ORDER

For consideration is an appeal of respondents from the Order dated 18 December 2007 issued by Regional Director Datu Yusoph B. Mama of DAR Region VII, Cebu City, the decretal portion of which reads:

"WHEREFORE, in view of the foregoing, ORDER is hereby issued:

1.         DIRECTING the PARO of Cebu to file before the Adjudication Board for the Cancellation of Sale of the landholding under Lot No. 18451-31, Bsd-07-018527, with Transfer Certificate of Title (TCT) No. 193/Certificate of Land Ownership Award No. 72603 containing an area of 0.7911 hectare, more or less;

2.         DIRECTING Lot No. 18451-31, Bsd-07-018527 (OLT) with an area of 0.7911 hectare covered with Transfer Certificate of Title (TCT) No. 193/Certificate of Land Ownership Award No. 72603 as vacant;

3.         DISQUALIFYING Tirso Ricamata as farmer-beneficiary and imposing Perpetual Disqualification to the said FB.

4.         DIRECTING the MARO concerned to identify a qualified farmer beneficiary as new re-allocatee.

SO ORDERED."

Pursuant to Section 24 of Republic Act No. 6657 (RA 6657), the spouses Tirso Ricamata and Gemma Gabutero (appellants) were awarded lot No. 18451-31 with an area of 7,911 square meters covered by Transfer Certificate of Title No. 193/CLOA No. 72603 (Rollo, p. 83) and registered in the Registry of Deeds on 26 July 1991.

Subsequently, the spouses/appellants mortgaged the aforementioned lot to Land Bank of the Philippines (LBP). In order to pay for their loan with the bank, the appellants borrowed money from Delfin Y. Ngo on a 'capacity to pay' basis and from their harvest.

On 22 August 2005, Municipal Agrarian Reform Officer (MARO) Letecia Decena conducted an ocular inspection on the property and found that the land of the appellants was left barren and was purportedly sold to Delfin Y. Ngo for P316,440.00. This sale was allegedly affirmed by Ricamata personally before the said MARO as mentioned in the officer's Field Investigation Report (Rollo, p. 30). In addition, there was an undated, unsigned (by the buyers) and unnotarized Deed of Conditional Sale allegedly executed by the Ricamatas in favor of Ngo (Rollo, p. 29) to prove the fact of sale. It was recommended by the MARO that, such sale being in violation of M.C. 19 (series of 1996) which prohibits the sale of lands acquired by virtue of being a beneficiary of agrarian reform law, appellants should be disqualified as farmer-beneficiaries and their title should be cancelled.

The Regional Director (RD) Datu Yusoph B. Mama, acting on said recommendation, issued the assailed Order on 19 December 2007.

A letter complaint which was treated as a Motion for Reconsideration was thereafter filed by the appellants but this motion was denied by the RD.

Hence, this appeal.

The spouses Ricamata contend that a serious error was committed in the findings of fact. They allege that the Deed of conditional Sale has no probative value for the following reasons: (a) appellants expressed their reservation by refusing to appear before a notary public when required; (b) the document merely served as proof of their indebtedness with no intention to convey the property which is why it was undated, the signature incomplete, and unregistered; and (c) even if complete on its face, the Deed of Conditional Sale may be assailed as not expressing the intention of appellants and, at best, treated as an equitable mortgage that may not result to any transfer of ownership.

Based on the evidence on record, we believe the Ricamata's contention that the transaction they entered into with Delfin Ngo was simply one of loan with the land as collateral. After all, if indeed the transaction was one of sale, then the buyer (Ngo) would have ensured that the Deed of Conditional Sale was dated, completely signed, and notarized. As the Deed of Conditional Sale now stands, it did not effectively transfer real rights and cannot be the basis for a valid transfer of the land to Ngo. It is more reasonable and more in keeping with the natural order of things, to consider the transaction as one of loan with equitable mortgage.

Moreover, assuming arguendo that the Ricamatas transferred the land to Ngo, such "sale" was executed more than ten (10) years after the land was awarded to them.

Section 27, R.A. No. 6657, explicitly provides that lands awarded to beneficiaries of CARP may not be sold, transferred or conveyed except through hereditary succession, or to the government or to the LBP, or to the qualified FB for a period of ten (10) years. Thereafter, any transaction, sale, transfer or conveyance made (after the 10 year prohibitory period) does not constitute a violation of agrarian reform law. It may be argued therefore that the Ricamatas were free to alienate their landholding and that they did not violate any law which would justify their perpetual disqualification as farmer-beneficiaries.

WHEREFORE, premises considered, the instant appeal is GRANTED. The Order dated 19 December 2007 of Director Datu Yusoph Mama of Region VII, Cebu City is hereby recalled and SET ASIDE and a NEW ORDER is issued directing the Regional Director of Region VII to maintain and uphold the validity and integrity of the TCT No. 193/CLOA No. 72603 containing an area of 0.7911 hectare issued to herein respondent Tirso Ricamata.

SO ORDERED.

Diliman, Quezon City, October 19, 2010.

(SGD.) VIRGILIO R. DE LOS REYES
Secretary