GENEROSO QUIBAN, PETITIONER, VS. HON. WALERICO B. BUTALID, PRESIDING JUDGE, BRANCH 26, REGIONAL TRIAL COURT, 8TH JUDICIAL REGION, SAN JUAN, SOUTHERN LEYTE AND MEDARDO A. SALUDO,…

The validity of a compromise agreement and the legal effect of
the issuance of a Certificate of Land Transfer are the issues brought to the
fore in this petition.

On November 20, 1987,
private respondent filed a complaint against petitioner for recovery of shares
as rental of a portion of land based on agricultural leasehold contract or its
equivalent with damages in the Regional Trial Court of San Juan, Southern
Leyte docketed as Civil Case No. R-329.

In due course, on July 6,
1989, a compromise agreement was submitted to the court by counsel of the parties.  The agreement was approved by the court on
the same date.  It contains the following
terms and conditions:

“1. That defendant
agreed as he does hereby agree to pay
the amount of P38,010.00 to the plaintiff in two (2) installments:  First Installment to be paid on or before September 30, 1989; and the Second
Installment after the first harvest of 1990.

2.   That the amount stated above is the price or
total money value of the back rentals of plaintiff’s land consisting of 271.5
cavans of palay.

3.   That plaintiff agrees to the proposal of
defendant and the parties herein do hereby declare that they shall be bound by
the terms and conditions stated in this Compromise Agreement, and plaintiff
voluntarily agrees to withdraw his case and other claims for damages and
attorney’s fees; likewise, defendant agrees to withdraw all his claims for
damages and/or counterclaim and the like, as averred of in the Answer.”^[1]

On August 2, 1989,
petitioner filed an urgent motion for reconsideration of the said order of
approval of said compromise agreement on the ground that the same is null and
void and does not bind him and that the court has no jurisdiction on the matter
as it is with the Department of Agrarian Reform.  An opposition thereto was filed by private
respondent.  A supplemental pleading was
filed by petitioner in support of his motion attaching thereto a copy of the
Certificate of Land Transfer issued on October
20, 1980 and Original Certificate of Title dated September 22, 1988, pursuant to
Emancipation Patent No. A-069083 covering the property in question, both issued
in favor of petitioner.

On September 21, 1989,
the trial court denied the motion for reconsideration.

Hence, this petition wherein it is alleged that the trial court
committed a grave abuse of discretion amounting to lack or excess of
jurisdiction based on the following grounds:

“I

RESPONDENT COURT/JUDGE COMMITTED A GRAVE ERROR OF LAW IN APPROVING
AND NOW THREATENING TO EXECUTE A COMPROMISE AGREEMENT THAT IS NOT SIGNED BY THE
DEFENDANT OR THE PARTY CONCERNED.

II

RESPONDENT COURT/JUDGE COMMITTED A GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN TAKING COGNIZANCE OF, AND LATER UPHOLDING
(THE) LEASE AGREEMENT WHERE THE LEASEHOLD RELATIONSHIP HAS BEEN TERMINATED BY
THE ISSUANCE OF A CERTIFICATE OF LAND TRANSFER AND CERTIFICATE OF TITLE UNDER
AN EMANCIPATION PATENT.”^[2]

This case can very well be referred to the Court of Appeals which
has concurrent jurisdiction over cases of this nature.  However, due to
the issues involved and to avoid any further delay, the Court opted to act on
it.

An examination of the compromise agreement shows that the same is
not signed petitioner who is the party in interest in the case and who would be
bound by the terms and conditions of the same. 
The compromise was signed by his daughter Agripina
Sarsale over the name of petitioner.  It has not been shown that Agripina has a special power of attorney from
petitioner.  She was not duly authorized
in any other manner by petitioner to sign for and in his behalf and thus bind
him.  On the contrary, Agripina stated in her sworn statement that she did not
voluntarily sign the same because she was only forced to do so by the two
lawyers and the judge and that she was afraid to go to jail if she did not do
so.  She also stated that she did not
have any authority to sign the same in behalf of her father.^[3]

A compromise agreement is not valid and binding when a party in
the case has not signed the same.  If any
person signs for and in behalf of such party without being duly authorized to
do so, the said agreement is void and has no legal effect.

However, to the mind of the Court, what should have been
sufficient basis for the trial court to set aside the compromise agreement is
the fact that petitioner was issued a Certificate of Land Transfer covering the
said property on October 20, 1980 and the Original Certificate of Title No. 601
pursuant to Emancipation Patent No. A-069083.^[4]

Obviously, the land in question is covered by Presidential Decree
No. 27 and its disposition is under the jurisdiction of the Department of
Agrarian Reform which has issued the corresponding Certificate of Land Transfer
and Original Certificate of Title in favor of the petitioner.  The matter of lease rental and valuation of
the property falls under the provisions of
Executive Order No. 228 of July 17, 1987 which provide
as follows:

“SECTION 1.  All qualified
farmer beneficiaries are now deemed full owners as of October 21, 1972 of the land they
acquired by virtue of Presidential Decree No. 27 (hereinafter referred to as
P.D. No. 27).

“SECTION 2.  Henceforth, the
valuation of rice and corn lands covered by P.D. No. 27 shall be based on the
average gross production determined by the Barangay
Committee on Land Production in accordance with Department Memorandum Circular
No. 26, series of 1973 and related issuances and regulation of the Department
of Agrarian Reform.  The average gross
production per hectare shall be
multiplied by two and a half (2-1/2), the product of which shall be multiplied
by Thirty Five Pesos (P35.00), the government support price for one cavan of 50 kilos of palay on
October 21, 1972, or Thirty One Pesos (P31.00), the government support price
for one cavan of 50 kilos of corn on October 21,
1972, and the amount arrived at shall be the value of the rice and corn land,
as the case may be, for the purpose of determining its cost to the farmer and
compensation to the landowner.

“Lease rentals paid to the landowner by the farmer beneficiary
after October 21, 1972,
shall be considered as advance payment for the land.  In the event of dispute with the landowner
regarding the amount of lease rental
paid by the farmer beneficiary, the Department of Agrarian Reform and the Barangay Committee on Land Production concerned shall
resolve the dispute within thirty (30) days from its submission pursuant to
Department of Agrarian Reform Memorandum Circular No. 26, series of 1973, and
other pertinent issuances.  In the event
a party questions in court the resolution of the dispute, the landowner’s
compensation claim shall still be processed for payment and the proceeds shall
be held in trust by the Trust Department of the Land Bank in accordance with
the provisions of Section 5 hereof, pending the resolution of the dispute
before the court.”(Underscoring supplied.)

Consequently, the trial court has no jurisdiction over the case,
much less to pass upon the issue of payment of rentals.

It must he emphasized that once a Certificate of Land Transfer
has been issued to a tenant covering the property under the supervision of and
in compliance with the implementing rules and regulations of the Department of
Agrarian Reform, he is thereby deemed to be the owner of the agricultural land
in question.  There is no more landlord
and tenant relationship and all that remains is for the Department of Agrarian
Reform to determine the valuation of the land in accordance with existing rules
and regulations for purposes of compensation to the land owner.

WHEREFORE, the questioned orders of the trial court dated
July 6, 1989 and September 21, 1989 are hereby reversed and set aside and
another judgment is hereby rendered dismissing the complaint, without
pronouncement as to costs.  Let the
records of the case be referred to the Department of Agrarian Reform for
appropriate action.

SO ORDERED.

Narvasa, (Chairman), Cruz, Griño-Aquino, and Medialdea, JJ., concur.

^[1]
Page 11, Rollo.

^[2]
Page 14, Rollo.

^[3]
Annex H to the Petition.

^[4]
Annexes A and B to Urgent Motion for Reconsideration of the Order which is
marked as Annex D to the Petition; pages 48-49, Rollo.