December 13, 1996
DAR OPINION NO. 116-96
ATTY . AUGUSTUS D. VELARDE
Suites 303-304, Velarde Bldg.
General P. Santos Drive
Koronadal, South Cotabato
Dear Atty. Velarde:
This has reference to, your letter requesting for clarification on the following queries, to wit:
1. Is the non-registration of sale of agricultural lands prior to the effectivity of R.A. 6657 (Comprehensive Agrarian Reform Law) on 15 June 1988 null and void for purposes of determining the aggregate landholding of the landowner?
2. Does the term "homestead" used in Section 6 of R.A. 6657 refer to those lands granted by the government to small settlers and includes Free Patents? Are these exempt landholdings included in the consideration of total landholdings?
3. Is the issuance of Certificate of Land Transfer (CLT) a ground for refusal by the tenant to pay his rentals? Is the deposit by the tenant of his lease rentals with the Land Bank of the Philippines who accepts the same for deposit countenanced by the DAR? What is the remedy of a landowner whose tenant mortgaged or sold assigned his farmlot covered by CLT to another worker and leaves or abandons the land? Can he eject the transferee and will the DAR help him oust the transferee and cancel the CLT of the deserter-tenant?
4. Are lands zoned for residential, commercial and industrial by local government units automatically placed subject property outside the coverage of CARL?
5. How can a landowner whose land covered by P.D. 27 get a higher price for his land which has not been paid up to the present? How will he proceed?
6. Is there no limit to the claim of the tenant for disturbance compensation?
7. In 1987 Notre Dame of Marbel University bought a 20-hectare land owned by Governor Morales on installment basis payable up to 1992. Hence, it immediately took possession and used it for campus purposes of its agricultural college department but failed to register the sale prior to September 14, 1988 because there is no segregation yet of the title. The Provincial Agrarian Reform Officer (PARO) denied the request for issuance of DAR Clearance to effect the registration of the sale on the ground that it exceeds the retention limit of the seller. Is the requirement of Section 6 (last paragraph) of R.A. 6657 unconstitutional for it impairs the obligation of contracts?
Anent your first query, the last paragraph of Section 6 of R.A. 6657 (Comprehensive Agrarian Reform Law) expressly provides that "upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of possession of private lands executed by the original landowner in violation of this Act shall be null and void. Provided, however, that those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act". Clearly, the aforequoted provision taints with invalidity the non-registration of transactions both before and after the effectivity of R.A. 6657.
However, DOJ Opinion No. 41, Series of 1992 allows registration of transactions even after the period prescribed by law for registration. The allowance for late registration is predicated on the theory that after all the excess in the retention area of the landowner will end in DAR hands anyway. There can be no circumvention of landholding in excess of retention area because the government thru the DAR will acquire the same for distribution to qualified-beneficiaries.
Anent your second query, homestead land is not the same as free patent land. While its disposition are governed by Commonwealth Act 141 (Public Land Act), they are treated differently. Notably, they differ in the manner of acquisition because the law prescribes different procedures in obtaining homestead and free patents like the number of years of occupation/possession, area requirement of cultivation, etc.
Moreover, exempt landholdings are not considered in the determination of total landholdings since only lands suitable for agriculture are covered under CARP. This is clear from Section 4 of R.A. 6657 which provides that. "the Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including the lands of the public domain suitable for agriculture."
Anent your third query, issuance of Certificate of Land Transfer (CLT) is not a ground for a tenant to refuse to pay his rentals. As held by the Supreme Court in the case of "Engracia Vinzons-Magana vs. Hon. Conrado Estrella" (201 SCRA 536), the mere issuance of CLT does not vest in the farmer/grantee ownership of the land described therein. At most, the certificate merely evidences the government's recognition of the grantee as the party qualified to avail of the statutory mechanisms for the acquisition of ownership of the land tilled by him as provided under Presidential Decree No. 27. Neither is this recognition permanent nor irrevocable. Thus, failure on the part of the farmer/grantee to comply with his obligation to pay his lease rentals or amortization payments when they fall due for a period of two (2) years to the landowner or agricultural lessor is a ground for forfeiture of his Certificate of Land Transfer (Section 2; P.D. 816; Pagtalunan vs. Tamayo, G.R. No. 54281, March 19, 1990).
The deposit of lease rentals by the tenant with the Land Bank of the Philippines is sanctioned by law. DAR Department Memorandum Circular No. 6, Series of 1978 allow tenants to deposit their lease rentals with the LBP in case of refusal of landowners to accept lease rentals/amortizations or to issue receipts to tenants evidencing payments thereof.
Likewise, Section 2 of P.D. 816 expressly provides that illegal acts committed by tenants, shall upon hearing and final judgment, forfeit the CLT issued in his favor, if his farmholding is already covered by such CLT. Conversely, any agricultural lessee whose landholding is not yet covered by a CLT, upon hearing and judgment, loses his right to be issued a CLT under P.D. 27 for his farmholding.
Anent your fourth query, land use reclassification by itself does not place the subject property outside the purview of the Comprehensive Agrarian Reform Program since it merely specifies how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, commercial as embodied in the land use plan. In other words, it merely allocates lands to different activities or classes of land uses, evolved and enacted through the town planning and zoning process. It is not synonymous with conversion under Section 65 of R.A. 6657 for while the authority to reclassify is lodged with the local government units, the authority to convert remains with the DAR.
Anent your fifth query, the valuation of lands covered by P.D. 27 is governed by Section 2 of Executive Order No. 228 which expressly provides that "the valuation of rice and corn lands covered by P.D. No. 27 shall be based on the average gross production determined by the Barangay Committee on Land Production in accordance with Department Memorandum Circular No. 26, series of 1973 and related issuances and regulation of the Department of Agrarian Reform. The average gross production per hectare shall be multiplied by two and a half (2.5) the product of which shall be multiplied by Thirty Five Pesos (P35.00), the government support price for one cavan of 50 kilos of palay on October 21, 1972, or Thirty One Pesos (P31.00), the government support price for one cavan of 50 kilos of corn on October 21, 1972, and the amount arrived at shall be the value of the rice and corn lands, as the case may be, for the purpose of determining its cost to the farmer and compensation to the landowner.
To address the problems of the landowners who are complaining of the lower valuation of their landholdings, DAR issued Administrative Order No. 13, Series of 1994 (copy attached) granting the increment of six percent (6%) yearly interest compounded annually on lands covered by P.D. 27 and Executive Order No. 228.
Anent your sixth query, Section 7 of RA 6389 expressly provides that "the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the average of the gross harvests on his landholding during the last five preceding calendar years."
Anent your last query, the enactment of RA 6657 (CARL) is not unconstitutional for it does not impair the obligation of contracts. The validity of RA 6657 has been sustained by the Supreme Court in the case of "Association of Small Landowners vs. Secretary of Agrarian Reform" (175 SCRA 343) pursuant to the police power of the state because there is the concurrence of the lawful subject and method in the enactment of said laws. Consequently, as an inherent power of the state it may even override the constitutional guaranty of non-impairment of obligations of contract.
We hope to have clarified the matters with you.
Very truly yours,
(SGD.) LORENZO R. REYES
OIC-Undersecretary
LAFMA