SIMEON C. FAJARDO, SUBSTITUTED BY ROSALINA VDA. DE FAJARDO, AND BERNARDO D. TOLENTINO, SUBSTITUTED BY NATIVIDAD BAUTISTA VDA. DE TOLENTINO, PETITIONERS, VS. MOONYEN B. RETIZOS, …

Fajardo versus Retizos

The Case

This is a petition for review brought by Simeon Fajardo and Bernardo Tolentino, later substituted by their surviving heirs, against Moonyeen Retizos, Nelin Retizos, and Mavourneen Retizos, the children and legal heirs of the original landowner Virginia Briones-Retizos. The tenants of a tenanted rice land in Cabanatuan City sought the issuance of emancipation patents under Operation Land Transfer, while the landowners' heirs opposed on the ground of their right of retention. The case matters because it draws the sharp line between exemption and retention in agrarian reform, and because it holds that the right of retention survives the landowner's death and may be exercised belatedly by her heirs.

Procedural History

The tenants filed a letter-petition with the Department of Agrarian Reform Regional Office III for the issuance of emancipation patents. The Regional Director issued an Order provisionally denying the petition pending payment of just compensation, but directing the Provincial and Municipal Agrarian Reform Officers to proceed with coverage of the land and to process the claim folders. The landowners' heirs filed a Notice of Appeal that was unsigned by counsel, and the Regional Director treated it as not properly filed and ordered immediate implementation of his Order. The Department of Agrarian Reform later dismissed the Notice of Appeal and affirmed the Regional Director, and the DAR Secretary denied the heirs' Motion for Partial Reconsideration. The heirs then appealed to the Office of the President, which reversed and set aside the DAR orders and exempted the entire land from the coverage of the agrarian reform law. The Office of the President denied the tenants' Motion for Reconsideration, and the tenants came to the Supreme Court by petition for review under Rule 43.

Facts

When Presidential Decree Number 27, the Tenants Emancipation Decree, took effect in 1972, Simeon Fajardo, Bernardo Tolentino, and Romeo Tadeo were the tenants of a tenanted rice land of 10.5899 hectares in Barangay San Isidro, Cabanatuan City, registered in the name of Virginia Briones-Retizos under Transfer Certificate of Title Number 16393.

Virginia died on September 8, 1982. Ownership of the land passed by hereditary succession to her husband Isidro Retizos and their children, the herein respondents. A Final Survey was conducted in 1987 and emancipation patents were issued, but they could not be registered: no claim folder had been prepared, the land had earlier been subdivided by the landowner into twelve lots, the original certificate of title had been cancelled, and the Register of Deeds refused registration.

In 1998 the tenants petitioned for the issuance of emancipation patents. The heirs opposed, claiming that portions were covered by their own titles and that they were exercising their right of retention. The Regional Director provisionally denied the petition but ordered coverage to proceed. After the DAR affirmed him and the DAR Secretary denied reconsideration, the Office of the President reversed and exempted the land from agrarian reform coverage. The heirs later filed a Sworn Application for retention under Republic Act Number 6657, which was approved.

Issues

• Whether or not the respondents, as heirs of the original landowner, have the right to retain the land even though their predecessor never exercised that right during her lifetime.
• Whether or not the transfer of ownership to the respondents by hereditary succession violated Presidential Decree Number 27 or Department Memorandum Circular Number 8, series of 1974, so as to disqualify them from retaining.
• Whether or not the land is covered by Operation Land Transfer, such that the right of retention is operable at all.
• Whether or not the respondents are entitled to retain the entire landholding of 10.5899 hectares.

Applicable Provisions

Presidential Decree Number 27 provides on the landowner's retention:

In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now cultivate it.

This is the source of the right of retention invoked by the respondents and upheld by the Court.

Section 4, Article XIII of the 1987 Constitution, cited by the Court, provides:

In determining retention limits, the State shall respect the right of small landowners.

The Court treats the right of retention as a constitutional right intended to protect small landowners, which is why it may not be defeated by mere delay.

Ruling

On the first issue, the Court held that neither Presidential Decree Number 27 nor Republic Act Number 6657 provides that a landowner loses the right of retention by failing to exercise it during his lifetime. Virginia's unexercised right passed by inheritance to her heirs, who exercised it in 2010, and the Court held that the right was exercised belatedly does not affect its efficacy. It relied on the rule that those who failed to file the required application for retention under Presidential Decree Number 27 may do so under Republic Act Number 6657.

On the second issue, the Court held that the transfer to the respondents was by hereditary succession upon Virginia's death in 1982, and did not violate Presidential Decree Number 27 or Department Memorandum Circular Number 8. A Torrens title is merely evidence of title and not a mode of acquiring ownership, so the later issuance of titles in 1997 did not change the fact that ownership passed in 1982.

On the third issue, the Court distinguished the two concepts. Exemption applies where the land is outside Operation Land Transfer because either requisite is absent, namely that the land be devoted to rice or corn, and that a system of share-crop or lease tenancy obtain. Retention, on the other hand, presupposes coverage. Here the land was rice land and tenanted, so the right of retention was operable.

On the fourth issue, the Court found no evidence that the respondents owned other agricultural lands exceeding seven hectares in the aggregate, or urban lands producing adequate income. Since the respondents and their father were each entitled to retain seven hectares, or twenty-eight hectares in all, and the land is only 10.5899 hectares, they may retain the entire landholding.

Doctrine

Exemption and retention are distinct: exemption is the remedy where the land is outside Operation Land Transfer, while retention limits compulsory acquisition of land that is covered. The right of retention is a constitutional right of small landowners, and it is not lost by the landowner's failure to exercise it during his lifetime; it passes to his heirs, who may exercise it even belatedly, including under Republic Act Number 6657. Hereditary succession is not a prohibited transfer under Presidential Decree Number 27, and a Torrens title is only evidence of title, not a mode of acquiring ownership.

Disposition

The petition was denied, and the Decision and Resolution of the Office of the President exempting the land from agrarian reform coverage were affirmed.

Remember This

Memorize the line that exemption and retention are two distinct concepts, and that the right of retention is constitutional, inheritable, and may be exercised belatedly. Examiners use this case to test the coverage requisites of Operation Land Transfer and the survival of the retention right in the hands of heirs.