DOJ OPINION NO. 115, s. 1990
June 14, 1990

The Acting Secretary
Department of Agrarian Reform
Diliman, Quezon City

S i r :

        This refers to your query on whether the two-year period prescribed in Section 31 of the Comprehensive Agrarian Reform Law (R.A. No. 6657) within which the Presidential Agrarian Reform Council ("PARC") shall act on stock distribution plans of corporate landowners is directory, rather than mandatory, in nature.

        You state that under DAR Administrative Order No. 10, series of 1988, corporate landowners are required to submit their stock distribution plans and obtain approval thereof within two (2) years from the effectivity of R.A. 6657; that in line therewith, then DAR Secretary Miriam Defensor Santiago announced that the deadline for submission of stock distribution plans was January 31, 1990 to give the PARC sufficient time to act thereon; that there are at present 34 stock distribution schemes pending approval by the PARC; and that the deadline for the approval of these pending plans is June 14, 1990.

        Section 31 of R.A. 6657 insofar as pertinent, reads:

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"Upon certification by the DAR, corporations owning agricultural lands may give their qualified beneficiaries the right to purchase such proportion of the capital stock of the corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to the company's total assets, under such terms and conditions as may be agreed upon by them. In no case shall the compensation received by the workers at the time the shares of stocks are distributed be reduced. The same principle shall be applied to associations, with respect to their equity or participation.

Corporations or associations which voluntarily divest a proportion of their capital stock, equity or participation in favor of their workers or other qualified beneficiaries under this section shall be deemed to have complied with the provisions of this Act; Provided, That the following conditions are complied with:"

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"If within two (2) years from the approval of this Act, the land or stock transfer envisioned above is not made or realized or the plan for such stock distribution approved by the PARC within the same period, the agricultural land of the corporate owners or corporation shall be subject to the compulsory coverage of this Act." (Emphasis supplied)

        It is believed that the two-year period prescribed in the last paragraph of the foregoing statutory provisions is merely directory in character.

        The rule is that a statutory provision regulating the manner in which public officials shall perform an official duty and the time for such performance will generally be construed as directory (Crawford, Statutory Construction, pp. 529 & 535 — 536). Thus, it was held that "where a statute directs the doing of a thing in a certain time, without any negative words restraining the doing of it afterwards, the provision as to time is generally directory, and not a limitation of authority; and in such case, where no injury appears to have resulted, the fact that the act was performed after the time limited will not of itself render it invalid" (O' Neal vs. Spencer, 47 S.E. 2d 646; Horkan vs. Beasley, 75 S.E. 341). In Marcelino vs. Cruz, Jr. (121 SCRA 51), the constitutional provision mandating that the maximum period within which a case or matter shall be decided or resolved from its submission shall be three months for inferior courts (Section 11 [1], Article X, of the New Constitution) was construed by the Supreme court as merely directory and that no compliance by the courts with the said provision does not result in loss of jurisdiction. Also, in a previous opinion, this Department had occasion to rule that the "six month" period provided in Proclamation No. 50 is merely directory, it appearing that the said period was provided merely for facilitation and not for prescription purposes (Sec. of Justice Op. No. 210, s. 1988).

        The foregoing construction applies equally to the provision of law under consideration. It bears stress that in the instant case, there is no word of absolute prohibition against the PARC to act beyond the period fixed therein. The provision only states that the failure of the PARC to act within the two-year period will result in the subjection of the land area "to the compulsory coverage of" R.A. 6657. To our mind, there is nothing substantial in this consequence since upon the law's effectivity, all agricultural lands are already covered by said law. Thus, no public or private rights will have been injured or impaired if the stock option plan is acted upon after the two-year period. Indeed, it is submitted that the legal provision in issue was included with the view to the proper, orderly and prompt conduct of the PARC's business; there is no indication therein that compliance therewith is essential to the validity of its action. Hence, it is merely directory (Francisco, Statutory Construction, 2nd Ed., p. 404 citing 439 C.J. S. 631).

        Moreover, it is presumed that the stock option plans pending approval by the PARC were submitted on or before the January 31 deadline set by that Department. Thus, to suggest that the two-year period is mandatory such that failure of the PARC to act thereon prior to the expiration of said period will result in the compulsory acquisition of the land area pursuant to Section 16 of R.A. 6657 would work to the injustice of the corporate landowners, the reason being that these landowners had nothing to do with the inability of the PARC to timely act on their plans. Accordingly, it was said that where an injustice would result from construing statutory provisions as mandatory, a provision directing the performance of a public duty may be interpreted as directory (Lacourse vs. McLellan & De Graw, 3 Dom. L.R. 73 cited in Francisco, Id., p. 406).

        Please be guided accordingly.

Very truly yours,

FRANKLIN M. DRILON

Secretary