May 28, 1996
DAR OPINION NO. 29-96
Atty. Cynthia M. Sulit
Maxino-Martinez & Partners Law Offices
Suites 201-202, N.B. Kwan Bldg.
Perdices St., Dumaguete City
Dear Atty. Sulit:
This has reference to your request for assistance regarding the 13.1641-hectare agricultural land registered in the name of the Rural Bank of Bais, Inc. (RBBI), situated at Mana-ol, Sta. Agueda, Pamplona, Negros Oriental.
You state that subject property was offered by RBBI for CARP coverage under the VOS Scheme; that on March 12, 1992, the property was sold by the bank to your clients, Mr. Elmer Aguilar and Ms. Elenita Aguilar; that the bank withdrew its VOS by sending a letter to Land Bank Manager Ruel Romarate, copy furnished then PARO Rodulfo Navarro and DAR Region VII OIC-Director Nevino Cardente; that your application for DAR Clearance for the registration of said sale was denied, because according to MARO Reynaldo Santos, the landholding had already been covered under CARP and that Certificates of Land Ownership Award (CLOAs) had been issued to some agrarian reform beneficiaries. You question the issuance of said CLOAs, on the ground that the property was sold to your clients as early as 12 March 1992 and that the bank withdrew its offer on 22 March of the same year. You assert that title to the property could be transferred to the Aguilars in view of Section 6 of RA 7881 which in effect authorizes the banks to sell, transfer or convey foreclosed agricultural lands under the General Banking Act.
DAR Administrative Order No. 5, Series of 1992 (copy attached) provides the instances under which landowners are allowed to withdraw their application for the coverage of their landholding under the VOS Scheme, to wit:
1. If the subject landholding is part of the landowner's retained area, provided the landowner has not yet received any payment;
2. If the landowner wants to shift the mode of acquisition from VOS to Voluntary Land Transfer/Direct Payment Scheme;
3. If the offered land is to be covered in 1994 and the landowner wants to wait for the compulsory coverage under Phase III-B. If the Notice of Valuation has been served, however, the withdrawal may no longer be allowed.
4. If the DAR determines the landholding to be more suitable for a town site, resettlement or institutional site to address a calamity situation. It should be noted that this case is limited to calamity situations. Further, the approval of the withdrawal of the VOS does not automatically authorize the land use conversion of the land. The owner must still apply for conversion.
As the-reason for the bank's withdrawal of its VOS application does not fall under any of the foregoing instances, the property still remains to be under the coverage of CARP and as such is subject for redistribution to qualified farmer-beneficiaries as mandated by RA 6657.
As regards the sale by RBBI of subject property to your clients, it is noted that said sale was effected during the pendency of a case involving the same landholding before the Department of Agrarian Reform Adjudication Board for "Revaluation of Property Under VOS" (per Investigation Report of our Legal Officer at the MARO Office). Be that as it may, it is submitted that the sale is allowed under Section 71 of CARL. However, the same Section 71 provides that said property is subject to acquisition under Section 16 of R.A. 6657 (copy of M.C. No. 5, series of 1996 attached).
Since the property is subject to acquisition and redistribution to qualified farmer-beneficiaries pursuant to CARL, the issuance of the CLOAs covering the same is believed in order. The sale of the property to your clients vested them with the legal personality to collect payment of the compensation thereon under CARP and to the other rights granted to them as such payees.
We hope to have clarified matters with you.
Very truly yours,
(SGD.) LORENZO R. REYES
OIC-Undersecretary
LAFMA
Copy furnished:
OSEC
Doc. No. 96010316