REPUBLIC OF THE PHILIP­PINES, REPRESENTED BY THE MINISTRY OF AGRARIAN REFORM, PETITIONER, VS. CARMINIA SIOCHI, REPRESENTED BY HER ATTORNEY-IN-FACT, ANDRES E. SIOCHI, JR., RESPON…

This is a petition to review the Order of the defunct Court of First
Instance of Rizal in LRC Case No. C-1459.

Carminia Siochi is the registered owner of a piece of land situated in
Malabon, Rizal, covered by Transfer Certificate of Title No. 212043 of
the Registry of Deeds for Rizal. The land was formerly a part of the
Tambobong Estate which was acquired by the government in 1947 pursuant
to Commonwealth Act No. 539. The law authorized the President of the
Philippines to subdivide the estate into home lots “for resale at
reasonable prices and under such conditions as he may fix.” (Sec. 1.)

Siochi’s transfer certificate of title contains the following restrictions:

“1. That it shall not be sold, assigned, encumbered, mortgaged or
transferred within the period of five (5) years from the date hereof
with­out first obtaining the written consent of the Se­cretary of
Agriculture and Natural Resources;

“2. That except by hereditary succession, it shall not be
conveyed, transferred or assigned in favor of any person who is not
landless and disqualified to acquire or own land in the Philippines;

“3. That violation of either of the next two preceding paragraphs
shall be sufficient ground for the Secretary of Agriculture and Natural
Resources or his duly authorized representative to take such action as
may be necessary for the reversion of the land to the government.”

In a petition dated November 13, 1973, Siochi asked the court a quo to cancel the restrictions “inasmuch as the period of five (5) years has already expired.”

The petition was partly opposed by the then Department of Agrarian
Reform in representation of the Government of the Philippines; it did
not object to the cancellation of restriction No. 1 “for the reason that
the period of five (5) years therein stated had already prescribed; it
however interposes vigorous opposition to the cancellation of conditions
nos. 2 and 3.”

The court a quo granted the petition; it ordered the
cancella­tion of the restrictions annotated on TCT No. 212043. In
granting the petition, the court said:

“Upon a mature deliberation of the two (2) opposing contentions,
the court is inclined to agree with the contentions of the petitioner
that the annotations at the back of the title No. 212043 covering Lot
No. 16, Block 5, be cancelled. To perpetuate the annotations of
encumbrances at the back as the oppositor would like the Court to do
would be in effect a restraint of ownership which is in violation of
law, particularly Art. 428 of the Civil Code.

‘Art. 428. The owner has the right to enjoy and dispose of a thing
without any other limitation than those established by law.’

“If the encumbrance at the back is allowed to be a perpetual
provision for the owner to dispose such property, it will be in
violation of said article. The Court holds that the limitation embodied
in 1, 2 and 3 is only for a period of five (5) years and the five (5)
years had elapsed since those encumbrances were annotated on January 10,
1968. The intention of law as envisioned in Commonwealth Act 539,
could not have meant a perpetual limitation of right of ownership to a
deserving awardee, because if that was the intention, the law would have
clearly made it so.” (Rollo, pp. 54-55.)

The oppositor has elevated the case to this Court for review in a petition for certiorari filed on August 14, 1974.

To use a favorite expression of Chief Justice Enrique M. Fernando, the
petition is highly impressed with merit because in a decision penned by
Justice Juvenal K. Guerrero and promulgated as recently as August 17,
1981, in a case on all fours with this one, the Court held:

“Conditions No. (2) and (3) are found or provided in Section 17
and 18 of Land Registration Order No. R-3 under the subject ‘Rules and
Regulations Governing the Acquisition and Disposition of Landed Estate,’
approved November 15, 1951 by the Secretary of Agri­culture and Natural
Resources. These sections pro­vide as follows:

’16. Prohibition to Alienate. – The applicant shall not sell,
assign, encumber, mortgage or transfer, his rights under the agreement
to sell or in the property subject thereof without first obtaining the
written consent of the Secretary of Agriculture and Natural Resources
and this condition shall subsist until the lapse of five (5) years from
the date of the execution of the final deed of sale in his favor and
shall be annotated as an encumbrance on the certificate of title of the
property that may be issued in his favor.

’17. Conveyance of Lands, Covered by Final Deeds of Sale. –
Except by hereditary succession, no lands acquired hereunder shall be
transferred or assigned to any in­dividual unless he be landless and not
other­wise disqualified from acquiring and owning lands in the
Philippines. This prohibition shall be made a condition in all deeds of
sale and shall be annotated as encumbrance in the certificate of title.

’18. Violation of the two preceding paragraphs: its effect. –
Any sale, assignment, encumbrance, mortgage, or transfer made in
violation of the pro­visions to the next two preceding paragraphs hereof
is null and void, and shall be suffi­cient ground for the Secretary of
Agriculture and Natural Resources to cancel the deed of sale and to
order the reversion of the land to the government and the forfeiture of
whatever payments made on account thereof. In case, however, a deed of
sale has already been issued, the violation of the said pro­visions
shall be sufficient ground for the Secretary of Agriculture and Natural
Resources to take appropriate action in court with a view to obtaining
the reversion of the land involved to the government. All lands
reverted to the government shall be disposed of as vacant lot.’

xxx       xxx       xxx

“Conditions Nos. 2 and 3, having been imposed pursuant to an
Administrative Order which has the force and effect of the law, are
therefore binding upon any person who acquires title to the same, it
appearing that said Conditions are annotated as encumbrances on the back
of the Certificate of Title of the land. Moreover, the said Conditions
are not contrary to law, morals, customs, or public policy. In fact,
these Conditions had been im­posed inorder to implement more effectively
the main purpose of the constitutional provision which is to break up
landed estates into reasona­bly small portions and to discourage the
con­centration of excessive landed wealth in an entity or a few
individuals. (Republic vs. Baylosis, 96 Phil. 461) Incidentally, the
New Constitution of 1973 provided a modification of the original
provision in the 1935 Constitution, thus: ‘The National Assembly may
authorize, upon payment of just compensation, the expropriation of
private lands to be subdivided into small lots and conveyed at cost to
deserving citizens.'” (De Gallego vs. Land Authority, L-26848, August
17, 1981, 106 SCRA 598, 604-606.)

WHEREFORE, the petition is hereby granted; the Order of the court a quo is set aside insofar as it orders the cancel­lation of restrictions Nos. 2 and 3. Costs against the respondent.
SO ORDERED.

Makasiar, (Chairman), Aquino, Concepcion, Jr., Guerrero, Escolin, and Cuevas, JJ., concur.