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    Estolas V Mabalot (Agrarian Laws)

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    Eileen Eika Dela Cruz-Lee
    1) The case involved a 2.88 hectare agricultural land that was awarded to Prisco Quirino through a Certificate of Land Transfer under Presidential Decree 27. Prisco later entered into a "deed of conditional sale" with Ernesto Bayagna, allowing Ernesto possession for 12 years if a loan was not repaid. 2) The Supreme Court ruled that the deed of conditional sale was actually an equitable mortgage based on its conditions. However, it violated agrarian laws by transferring possession to a non-qualified beneficiary. 3) Prisco abandoned the land by surrendering possession to Ernesto for 11 years without justification, which is a ground for cancellation. The Court reinstated the D

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    Estolas V Mabalot (Agrarian Laws)

    Uploaded by

    Eileen Eika Dela Cruz-Lee
    75 views4 pages
    1) The case involved a 2.88 hectare agricultural land that was awarded to Prisco Quirino through a Certificate of Land Transfer under Presidential Decree 27. Prisco later entered into a "deed of conditional sale" with Ernesto Bayagna, allowing Ernesto possession for 12 years if a loan was not repaid. 2) The Supreme Court ruled that the deed of conditional sale was actually an equitable mortgage based on its conditions. However, it violated agrarian laws by transferring possession to a non-qualified beneficiary. 3) Prisco abandoned the land by surrendering possession to Ernesto for 11 years without justification, which is a ground for cancellation. The Court reinstated the D

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    Estolas v Mabalot (Agrarian Laws)

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    1) The case involved a 2.88 hectare agricultural land that was awarded to Prisco Quirino through a Certificate of Land Transfer under Presidential Decree 27. Prisco later entered into a "deed of conditional sale" with Ernesto Bayagna, allowing Ernesto possession for 12 years if a loan was not repaid. 2) The Supreme Court ruled that the deed of conditional sale was actually an equitable mortgage based on its conditions. However, it violated agrarian laws by transferring possession to a non-qualified beneficiary. 3) Prisco abandoned the land by surrendering possession to Ernesto for 11 years without justification, which is a ground for cancellation. The Court reinstated the D

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    75 views4 pages

    Estolas V Mabalot (Agrarian Laws)

    Uploaded by

    Eileen Eika Dela Cruz-Lee
    1) The case involved a 2.88 hectare agricultural land that was awarded to Prisco Quirino through a Certificate of Land Transfer under Presidential Decree 27. Prisco later entered into a "deed of conditional sale" with Ernesto Bayagna, allowing Ernesto possession for 12 years if a loan was not repaid. 2) The Supreme Court ruled that the deed of conditional sale was actually an equitable mortgage based on its conditions. However, it violated agrarian laws by transferring possession to a non-qualified beneficiary. 3) Prisco abandoned the land by surrendering possession to Ernesto for 11 years without justification, which is a ground for cancellation. The Court reinstated the D

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 4

    Republic of the Philippines

    SUPREME COURT
    Manila
    SECOND DIVISION
    G.R. No. 198770

    November 12, 2012

    AURELIA GUA-AN AND SONIA GUA-AN MAMON, Petitioners,


    vs.
    GERTRUDES QUIRINO, represented by ELMER QUIRINO, Respondent.
    DECISION
    PERLAS-BERNABE, J.:
    Assailed in the instant Petition for Review on Certiorari under Rule 45 of the Rules of Court are
    the Decision1 dated February 25, 2011 and Resolution2 dated September 15, 2011 rendered
    by the Court of Appeals (CA) in CA-G.R. SP. No. 00589-MIN which set aside the December
    29, 2004 Decision3 of the Department of Agrarian Reform Adjudication Board (DARAB) and
    afforded respondent the preferential right of redemption over the subject landholdings.
    The Factual Antecedents
    Subject of the instant case is a 2.8800 hectare agricultural land situated in Batangan, Valencia,
    Bukidnon known as Lot 0899, covered by Certificate of Land Transfer (CLT) No. 0-025227 in
    the name of Prisco Quirino, Sr.+ (Prisco+) issued by the Ministry (now Department) of Agrarian
    Reform on October 16, 1979 pursuant to Presidential Decree (P.D.) No. 27. On February 27,
    1985, Prisco+ executed a Deed of Conditional Sale (deed) covering the subject landholding to
    Ernesto Bayagna (Ernesto) under the following conditions:
    x x x that the condition of this sale is that I, Prisco Quirino, Sr. and my heirs hereby [reserve
    our] right to redeem or repurchase the herein subject parcel of land by returning to Ernesto
    Bayagna or his heirs the same amount of Forty thousand Pesos (P40,000.00), Philippine
    currency, after the lapse of eight (8) years from the date of execution of this instrument and if
    the subject land is not redeemed or repurchased after the said eight years, there shall be an
    automatic extension of four (4) years from the date the [eighth] year expires, and if after the 4
    term expires, and I, Prisco Quirino, Sr., or my heirs still [fail] to redeem or repurchase the
    herein subject land, Ernesto Bayagna or his heirs shall continue to possess and enjoy the
    subject land until it is finally redeemed or repurchased. After the P40,000.00 is returned to
    Ernesto Bayagna or his heirs, the latter shall be obligated to return peacefully the subject land
    without any tenant or lessee.4
    Ernesto thereupon possessed and cultivated the subject land for more than 10 years before
    Prisco+ offered to redeem the same in 1996, which was refused. Instead, Ernesto allowed the

    former owner of the land, petitioner Aurelia Gua-An (Aurelia), through her daughter, petitioner
    Sonia Gua-An Mamon (Sonia), to redeem the lot. Subsequently, Prisco+ passed away.
    On January 30, 1998, respondent Gertrudes Quirino, Prisco's widow, represented by their son,
    Elmer, filed before the Office of the Agrarian Reform Regional Adjudicator (RARAD) a
    Complaint for Specific Performance, Redemption, Reinstatement and Damages with
    Application for Writ of Preliminary Injunction and TRO against Ernesto and petitioners.
    In their Answer, petitioners averred that Prisco's+ right over the subject land was merely
    inchoate for failure to establish payment of just compensation to the landowner; the deed was
    null and void for being violative of the law and public policy; and that the failure to consign the
    redemption money effectively bars the redemption prayed for.
    For his part, Ernesto averred that he allowed petitioners to redeem the lot because Prisco+
    failed to appear on the agreed date for redemption and on the information that the subject land
    was erroneously awarded to the latter.
    On May 6, 1998, the RARAD dismissed the complaint for lack of merit.
    The DARAB Ruling
    In the Decision5 dated December 29, 2004, the DARAB denied respondent's appeal and
    declared Prisco+ to have violated agrarian laws and of having abandoned the land by his
    failure to cultivate the same continuously for a period of more than two (2) calendar years. It
    canceled CLT No. 0-025227 in Prisco's+ name and ordered the Municipal Agrarian Reform
    Officer (MARO) to reallocate the subject landholding to a qualified beneficiary.
    The CA Ruling
    On petition for review, the CA reversed and set aside6 the DARAB's decision. It ruled that the
    pacto de retro sale between Prisco+ and Ernesto was a mere equitable mortgage, hence, not a
    prohibited transaction under P.D. 27, which is limited to "transfers or conveyances of title to a
    landholding acquired under the Land Reform Program of the Government." Having acquired
    the subject land as a "qualified beneficiary," Prisco+ and his heirs possess security of tenure
    thereon and could not be dispossessed thereof except for cause and only through a final and
    executory judgment. Thus, the CA afforded the heirs of Prisco+ the preferential right of
    redemption over the subject landholding.
    In the instant petition, petitioners insist that since respondent failed to tender and consign the
    redemption money, the latter has no cause of action against them. Moreover, considering that
    Prisco+ was not the absolute owner of the subject property, he cannot validly mortgage the
    same. Besides, Prisco+ had lost his rights as a farmer-beneficiary when he transacted with
    Ernesto in violation of the provisions of Section 73(f)7 of Republic Act (R.A.) No. 6657, as
    amended (Comprehensive Agrarian Reform Law of 1988).
    Our Ruling

    The petition is meritorious.


    It bears to stress that upon the promulgation of P.D. 27, farmer-tenants were deemed owners
    of the land they were tilling and given the rights to possess, cultivate and enjoy the landholding
    for themselves.8 Thus, P.D. 27 specifically prohibited any transfer of such landholding except
    to the government or by hereditary succession. Section 279 of R.A. 6657 further allowed
    transfers to the Land Bank of the Philippines (LBP) and to other qualified beneficiaries.
    Consequently, any other transfer constitutes a violation of the above proscription and is null
    and void for being contrary to law.10 Relevant on this point is Ministry of Agrarian Reform
    Memorandum Circular No. 7, series of 1979 which provides:
    "Despite the x x x prohibition, x x x many farmer-beneficiaries of P.D. 27 have transferred their
    ownership, rights and/or possession of their farms/homelots to other persons or have
    surrendered the same to their former landowners. All these transactions/surrenders are
    violative of P.D. 27 and therefore null and void."
    A perusal of the Deed of Conditional Sale reveals the real intention of the parties not to enter
    into a contract of sale but merely to secure the payment of the P40,000.00 loan of Prisco+.
    This is evident from the fact that the latter was given the right to repurchase the subject
    property even beyond the 12-year (original and extended) period, allowing in the meantime the
    continued possession of Ernesto pending payment of the consideration. Under these
    conditions and in accordance with Article 160211 of the Civil Code, the CA did not err in
    adjudging the pacto de retro sale to be in reality an equitable mortgage.
    However, contrary to the finding of the CA, the subject transaction is covered by the prohibition
    under P.D. No. 27 and R.A. No. 6657 which include transfer of possession of the landholding
    to the vendee a retro, Ernesto, who, not being a qualified beneficiary, remained in possession
    thereof for a period of eleven (11) years. Hence, notwithstanding such possession, the latter
    did not acquire any valid right or title thereto, especially since he failed to take any positive
    measure to cause the cancellation of Prisco's+ CLT No. 0-025227 despite the long lapse of
    time.
    On the other hand, the redemption made by petitioner Aurelia was ineffective and void since
    reversion of the landholding to the former owner is likewise proscribed under P.D. No. 27 in
    accordance with its policy of holding such lands under trust for the succeeding generations of
    farmers.12
    However, while CLT No. 0-025227 remains in Prisco's+ name, the Court cannot turn a blind
    eye to the fact that Prisco+ surrendered possession and cultivation of the subject land to
    Ernesto, not for a mere temporary period, but for a period of 11 years without any justifiable
    reason. Such act constituted abandonment despite his avowed intent to resume possession of
    the land upon payment of the loan. As defined in DAR Administrative Order No. 2, series of
    1994, abandonment is a willful failure of the agrarian reform beneficiary, together with his farm
    household, "to cultivate, till, or develop his land to produce any crop, or to use the land for any
    specific economic purpose continuously for a period of two calendar years." It is a ground for

    cancellation by the DARAB of an award to the agrarian reform beneficiary. Consequently,


    respondent and/or Prisco's+ heirs had lost any right to redeem the subject landholding.
    In fine, we find the DARAB Decision finding Prisco+ to have violated agrarian laws, canceling
    his CLT and ordering the reallocation of the subject land to be more in accord with the law and
    jurisprudence.
    WHEREFORE, the assailed Decision dated February 25, 2011 and Resolution dated
    September 15, 2011 of the Court of Appeals in CA-G.R. SP. No. 00589-MIN are hereby SET
    ASIDE. The DARAB Decision dated December 29, 2004 is REINSTATED.
    SO ORDERED.

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