August 29, 1994

DAR OPINION NO. 64-94

Mr. Arturo A. Cabauatan

DAR, Bayombong

Nueva Vizcaya

Dear Mr. Cabauatan:

This has reference to the queries raised in your letter of 16 June 1994 regarding a 16.8660-hectare property covered by TCT No. P-1772 situated at Nagtipunan, Bansing, Bayombong, Nueva Vizcaya.

As stated in your letter, a Complaint for Specific Performance (Civil Case No. 5774) was filed on 13 February 1992 before the Regional Trial Court at Bayombong, Nueva Vizcaya by Antonio Beleno, et al. against defendant, to enforce his alleged offer to sell seven hectares of said 16-hectare property; that on 23 June 1992, pending resolution of the case, four Certificates of Land Ownership Award were registered in the names of four of the defendant-landowner's children involving 11.5222 hectares of said 16 hectares under the Voluntary Land Transfer scheme; that when the case was called for pre-trial conference, the parties entered into a Compromise Agreement which became the basis for the order issued by Judge Jose B. Rosales dated 21 January 1994 in said Civil Case No. 5774. In the Compromise Agreement, the defendant agreed to allow the plaintiffs to continue occupying his land as tenants thereof and to seek the help of the Department of Agrarian Reform for the execution of the leasehold contract between them with the rentals to be fixed in accordance with existing laws, rules and regulations.

With said background, you pose the following queries:

1)        Can the Compromise Agreement as approved by the court be legally implemented? If the answer is in the affirmative, how can the agreement be reconciled with the provision in R.A. 6657. that VLT preferred beneficiaries thereof should be actual occupants or directly managing the farm?.

If the answer is in the negative, will there be no contempt liability?

Anent your first query, it is submitted that the Compromise Agreement may be legally implemented so long as it does not contravene the mandate under CARL to redistribute the property in favor of qualified beneficiaries. It should be noted that the Complaint pertains only to 7 hectares of the 16.8660-hectare landholding. It should likewise be noted that prior to the Compromise Agreement and the approval thereof by the Court, 11.5222 hectares of the property had already been covered under CARL in favor of the children of the landowner under the VLT scheme, leaving about 5.3438 hectares as not yet covered under CARL. Since each landowner is entitled to a maximum of 5 hectares as his retained area, the agreement to place a portion of the property under leasehold may be implemented, but only to the extent of the 5-hectare portion, and provided that the same is within the retention of the landowner. Should the 5.3438-hectare portion not fall within the landowner's retention, the same may be redistributed to qualified FBs pursuant to CARL, giving priority to tenants/farmers already in place.

It is believed that there can be no contempt liability because it is understood that the Compromise Agreement should not be contrary to law, in this case CARL, which mandates the redistribution of the property outside retention to qualified beneficiaries.

Please be guided accordingly.

Very truly yours,

(SGD.) HECTOR D. SOLIMAN
Assistant Secretary
Legal Affairs Office