September 25, 1998
DAR OPINION NO. 96-98
MR. GONZALO B. MISA
President
Pinugay Development Association, Inc.
Pinugay, Baras/Antipolo, Rizal
Dear Mr. Misa:
This refers to your letter of 22 June 1998 requesting for an opinion whether or not the suggestions contained therein are tenable. Your letter, as we see it, relates to the following Tan Yu Group of properties:
Phil. American Manufacturing And Marketing Corp. 25.00 Ha.
New Development Corporation of Asia 41.95 Ha.
Alexander Development Corp. 74.85 Ha.
Yupangco Cotton Mills 42.50 Ha.
New Homes Realty Corp. 48.00 Ha.
Alliance Development Corp. 7.80 Ha
The AIC Development Corp. 57.49 Ha.
Hereunder are our comments and observations on your suggestions:
1. Since all the properties of Tan Yu Group have been foreclosed or sold to Manila Banking Corp., DAR has to have all the titles annotated in the name of Manila Banking Corporation. In this way, the Tan Yu Group loses any connection to the properties. Manila Bank cannot claim the properties because the bank has been liquidated and the foreclosed/sold properties already covered by agrarian reform.
With respect to this suggestion, we believe that the same had been partly answered in our Opinion No. 43, S. 1998. Nevertheless, please note that Section 63 of Presidential Decree No. 1529 enumerates the procedures on foreclosure of mortgage, that is, judicial and extrajudicial foreclosures. In both cases, the certificate of title of the mortgagor shall not automatically be cancelled if there exists a redemption right of the mortgagor. Thus, in applying this to the instant case, we believe that the Tan Yu Group of properties may still be in the name of each corresponding landowner. Therefore, the annotations in the EPs may still validly be in the name of Tan Yu Group.
2. Since all of Pinugay Estate was covered under the National Land Reform Council which recognized it to be a leasehold (rice and corn) district and by PD 27/EO 228 which again recognized it as a rice and corn area, the undistributed portions of Pinugay Estate should already be distributed, as advised by the above mentioned DAR memos.
A reading of the pertinent memoranda you attached in your letter reveals that some of the Tan Yu Group of properties such as that covered by TCT No. 5536 in the name of Philippine American Manufacturing and Marketing Corp. are being processed for their eventual distribution to qualified farmer-beneficiaries. However, since these Tan Yu Group of properties are all being applied for exemption, we advise that we wait until a final decision is made over the subject petitions for exemption.
3. Since the Tan Yu Group of properties lie within Baras, void the application for exemption based on the Lungsod Silangan proclamation (which does not cover Baras).
Anent this suggestion, please be informed that corresponding Orders all dated 15 June 1998 were issued by then Secretary Ernesto D. Garilao denying the Petitions for Exemption filed by Atty. Rommel De Leon for Alexander Development Corp., New Development Corp. of Asia, Yupangco Cotton Mills, Inc., AIC Development Corporation, and New Homes Realty Corporation; and by Angel Tolentino for Alliance Development Corp., and Phil-Am Manufacturing and Mktg. Corp. These Orders were issued on the basis that the petitioners failed to comply with the submission of complete documentary requirements in support of the Applications for Exemption, and a finding that subject properties are not within the area of Lungsod Silangan. However, said Orders are now subject of Motions for Reconsideration dated 15 July 1998.
4. Direct Land Bank to accept all payments of DAR beneficiaries for EP lands instead of putting these payments on escrow.
Payments by OLT beneficiaries, are governed by the following provision of Executive Order No. 228:
"SECTION 6. The total cost of the land including interest rate of six percent (6%) per annum. . . shall be paid by the farmer-beneficiary or his heirs to the Land Bank over a period of up to twenty (20) years in twenty (20) equal annual amortizations. . . ."
Clearly, the provision speaks of payments made to Land Bank of the Philippines, not payment in escrow. We agree, therefore, with your suggestion that payment should be accepted by LBP but this Department has yet to wait, however, until such time that the Petitions for Exemption involving the properties subject of your letter are finally determined to be not exempted from agrarian reform program before it could rightfully direct the Land Bank to accept all payments of the ARBs.
5. Process all other properties of Tan Yu Group for subdivision survey and EP distribution.
Anent this suggestion, since the Tan Yu Group of properties are subject of several Petitions for Exemption we believe that the undertaking of the subdivision survey, if there should be any, and the distribution of EPs, are to be suspended until such time that these properties are finally declared to be indeed not exempt from the agrarian reform program.
6. Direct Land Bank to refrain from dictating the classification of lands and DAR titles.
Anent this suggestion, the LBP under the premises and circumstances is not actually dictating the land classification or titles to be issued (i.e., CLOAs instead of EPs) to beneficiaries but, rather, it is only acting as such on the basis of the letter-report by the Municipal Agrarian Reform Officer (MARO) dated 29 November 1995 that the subject landholdings are being planted by the farmers to fruit trees instead of rice and corn.
7. Compel LBP to follow DAR recommendations.
While DAR, not LBP, is the one legally mandated to determine and recommend whether a particular landholding is covered by P.D. No. 27 or R.A. No. 6657 and to issue the corresponding EP or CLOA, as the case may be, the supervening applications for exemption on the subject landholdings have perforce interposed on the previous issue such that there is likewise of necessity the need to resolve said applications for exemption before all the other attendant issues could properly he addressed. In view thereof, we are constrained to wait for the final resolution of the subject applications for exemption, after which, we could then act accordingly.
Thank you for communicating with us and we hope to have clarified the matters with you.
Very truly yours,
(SGD.) DANILO T. LARA
Undersecretary for Legal Affairs, and Policy and Planning
Copy furnished:
Office of the Director
DAR — Region IV
Capitol Compound, Pasig City
The Provincial Agrarian Reform Officer
DAR-Provincial Office
Teresa, Rizal