February 9, 1998

DAR OPINION NO. 15-98

Percival C . Dalugdug

Regional Director

DAR Region V

Lakandula Drive, Gogon

Legazpi City

Dear Director Dalugdug:

This has reference to the query seeking opinion on the issues posed therein, to wit;

1.         Is the OIC-PARO authorized to determine the payment of disturbance compensation?

2.         Are non-tenant farmers entitled to disturbance compensation?

3.         Which has jurisdiction to determine disturbance compensation, the PARO or the PARAD?

4.         In the event that the PARO determines disturbance compensation, would it not result to encroachment on the power of the adjudication board?

5.         Pending the resolution of the foregoing issue, can the execution of the Municipal Trial Court's order of ejecting the farmer-occupants be stayed by a mere order of an administrative officer like the PARO?

As culled from the facts of the case, the subject property has an aggregate area of 27.8049 hectares situated at Triangulo, Concepcion Pequena, Naga City and owned by spouses Conrado and Carmenlita Estrella; that said property was later mortgaged to Manila Banking Corporation by the spouse, who unfortunately failed to redeem the same; that after the foreclosure sale has been effected, Unihomes Development Corporation [now Ruby Shelter Corporation] bought the same and eventually a Deed of Sale was executed in its favor, which remained annotated on the title and unregistered with the Register of Deeds; that sometime in 1984, Unihomes Development Corporation mortgaged the subject property to Manila Bank title of which was consolidated in its name only in 1987; that the default of Unihomes Development Corporation in making payments brought difficulty to Manila Bank in instituting foreclosure proceedings since the title remains registered in its name and the other deeds of conveyance remained unregistered; that to effect the transfer of title in the name of Unihomes Development Corporation and later facilitate the foreclosure proceedings, Manila Bank requested the Register of Deeds to register the transactions and at the same time inscribed the same on the title but said request was denied by ROD because the certificate of non-tenancy from the Department of Agrarian Reform was not obtained; that after denial by the ROD, Manila Bank sought DAR's assistance for it to issue Certificate of non-tenancy, nonetheless, Atty. Josefina Sidiangco, then Assistant Secretary for Legal Affairs likewise denied said request and even declared that the Deed of Sale executed in favor of Unihomes Development Corporation is void; that on 28 September 1992, Unihomes Development likewise filed an application for exclusion of subject property from CARP coverage after a Transfer Certificate of Title has been issued to it; that pending the result of the application for exclusion, Unihomes Development Corporation likewise file an application for conversion on 29 December 1992; that as an opposition to said application, 18 farmer-tillers filed a petition for inclusion of said land; that then OIC-PARO Atty. Ramon Regalado issued an order directing the formation of ad hoc committee to investigate the matter and eventually came up with the findings that said lands are exempt from CARP coverage and further recommended for the exclusion of said properties; that on 27 July 1993, a memorandum addressed to Secretary Ernesto D. Garilao was issued by then OIC-Regional Director Romeo Perez regarding the petition for exclusion filed by Unihomes Development Corporation and petition for inclusion filed by Antonio Lagdaan; that on 25 May 1994, an order was issued by Secretary Garilao giving due course to the petition for exclusion and denying the petition for inclusion filed by Antonio Lagdaan; that the Court of Appeals in its decision dated 23 November 1994 Likewise Denied the petition for review brought before it and upheld the order issued by DAR Secretary dated May 1994; and that in connection with the Court of Appeals decision, Regional Director Percival Dalugdug issued an order dated 20 May 1997 causing the immediate implementation of said order.

Anent the first query, Provincial Agrarian Reform Officers [PAROs] are not clothed with authority to determine the payment of disturbance compensation. This inevitable conclusion is apparent, from the DARAB New Rules of Procedure (Rule II Section 1.b) which Expressly provides that the DARAB shall have primary and exclusive jurisdiction, both original and appellate, of determine and adjudicate all matters involving the fixing of disturbance compensation. By parity of reasoning, it is obvious that the PARO shall overstep his authority if he determines the payment of disturbance compensation. Specifically, only matters involving strictly the administrative implementation of R. A. No. 6657 are lodged with the PAROs.

Anent the second query, only recognized and qualified tenant-farmers are entitled to payment of disturbance compensation. The payment of disturbance compensation as provided and contemplated under Section 36 of R. A. No. 3844 (as amended by R.A. No. 6389) pertains to the compensation given to the affected agricultural lessees in cases of legal conversion, that is, in cases where the use of the land for purposes other than agricultural is approved by DAR upon the application of the landowner. As held by the Supreme Court in the case of Pagtalunan vs. Tamayo, G.R. No. 54281, March 13, 1990, payment of disturbance compensation only of the landowner. The award of disturbance compensation is designed to provide qualified tenant-farmers with the wherewithal during the period that they are looking for another employment.

Anent the third query, the jurisdiction to determine the payment of disturbance compensation is lodged with the PARAD in the exercise of his adjudicatory function, This is so because it is classified as an agrarian dispute or case which the PARAD alone could determine as provided for by law.

Anent the fourth query and corollary to the preceding query, the PARO who assumes jurisdiction over the payment of disturbance compensation clearly encroaches on matters which do not belong to him. In other words, he shall be overstepping in the exercise of his authority.

Anent the last query, execution of the MTC's order directing the ejectment of farmers-occupants cannot as a matter of good policy and in deference to the principle of jurisdictional independence be stayed by the order of an administrative officer like the PARO; the rationale is that they perform their functions independently. Specifically, a court of justice like the MTC exercises its judicial functions, whereas the PARO is limited to the exercise of his administrative function. Moreover, since the subject landholding has already been declared exempt excluded from CARP coverage, the MTC's order directing the ejectment of the farmers-occupants should now be executed as a matter of course without prejudice, however, to the payment of commensurate compensation to said occupants. Evidently, this is but logical to avoid circuity and waste of time, notwithstanding the pendency of the resolution of the foregoing issues on the determination of just compensation, if at all still warranted.

Please be guided accordingly.

Very truly yours,

(SGD.) ARTEMIO A. ADASA, JR.

Undersecretary for Legal Affairs, and Policy and Planning

Copy furnished

Jose Z. Grageda

Provincial Agrarian Reform Officer

DARPO, Del Rosario

Naga City