GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), PETITIONER, VS. APOLINARIO TEODORO, EMETERIO ENRIQUEZ, HEIRS OF LUCENA ANGELES, REPRESENTED BY GREGORIO ROQUE, ISIDRA ROQUE, FRANCISC…

GSIS versus Teodoro

The Case

This is a petition for review filed by the Government Service Insurance System, or GSIS, against Apolinaro Teodoro, Emeterio Enriquez, and the heirs of Lucena Angeles, represented by Gregorio Roque, among others. The respondents are tenant-farmers who were issued Emancipation Patents over ricelands in Malolos, Bulacan. They sued to annul a mortgage that Maunlad Homes, Incorporated had constituted in favor of GSIS over those same lands, and to cancel the annotation of that mortgage on their titles. The case matters because it tests two things at once: whether the Department of Agrarian Reform Adjudication Board has jurisdiction over a mortgage cancellation suit, and whether a supervening final order of the agrarian secretary can render such a suit moot and strip the farmer-beneficiaries of the very titles on which they sued.

Procedural History

The respondents filed their complaint for annulment of mortgage and cancellation of annotation, with damages, before the Office of the Provincial Agrarian Reform Adjudicator. The Provincial Adjudicator dismissed the complaint for lack of jurisdiction, holding that the matter belonged to the regular courts. The respondents appealed to the Department of Agrarian Reform Adjudication Board. The Board reversed the Provincial Adjudicator, ruled that it had jurisdiction, annulled the conveyances to Maunlad Homes as void, declared the mortgage without force and effect as against the respondents' ownership, ordered the Register of Deeds of Bulacan to cancel the mortgage annotation, and directed Maunlad Homes to pay moral damages. GSIS moved for reconsideration, arguing that the case had been mooted by a later order of the agrarian secretary; the Board denied the motion. GSIS then came to the Supreme Court by petition for review.

Facts

Spouses Isberto Crisostomo and Elena Aldaba owned a large tract of land in Malolos, Bulacan, aggregating 91.96145 hectares, which they left to their children. Of this, 80.1676 hectares were ricelands, and 12.1842 hectares of those ricelands were tenanted by the respondents and were placed under Operation Land Transfer pursuant to Presidential Decree Number 27.

Between May 1988 and March 1995, the children of the spouses transferred 40.1769 hectares to Maunlad Homes, Incorporated, and the conveyances included the 12.1842 hectares of ricelands in suit. Maunlad Homes then obtained a loan from GSIS in June 1995, using 24.268 hectares, including the subject ricelands, as collateral; the mortgage was annotated on its title. Earlier, the landowners had applied for retention, and the Regional Director granted them 44.8659 hectares in March 1995. On appeal, the DAR Secretary reversed that grant in November 1998, declaring the heirs not qualified to retain. Consequently, Emancipation Patents were registered in the names of the respondents in April 1999, and the GSIS mortgage was carried over as an annotation on those patent titles.

The heirs moved for reconsideration of the Secretary's order. While that was pending, the respondents filed their complaint in November 2000 to cancel the mortgage annotation. In August 2006, the DAR OIC-Secretary granted the heirs' motion for reconsideration, awarding them forty-nine hectares of retention, including the 12.1842 hectares covered by the respondents' patent, and lifting the Operation Land Transfer coverage over that land. That order was affirmed by the Office of the President and by the Supreme Court, and an Entry of Judgment was issued.

Issues

• Whether or not the Department of Agrarian Reform Adjudication Board had jurisdiction over the complaint for annulment of mortgage and cancellation of annotation.
• Whether or not the respondents' appeal was rendered moot and academic by the August 2006 order of the DAR OIC-Secretary granting the landowners' retention, which had become final.

Applicable Provisions

Section 6 of Republic Act Number 6657, which the Board invoked in voiding the conveyances to Maunlad Homes, provides:

Except as otherwise provided in this Act, no owner or possessor of agricultural land may lease or sell such land except to the government, the tenants or lessees thereof, or to such other person or entity as may be authorized by law.

This provision is the anchor of the Board's ruling that the sale to Maunlad Homes was void, and therefore that the mortgage built upon it could not bind the respondents' land.

Ruling

On the first issue, the Court did not need to resolve the jurisdictional question on the merits. It held that the Board committed a reversible error in granting the appeal, but it rested that conclusion on mootness rather than on a correction of the Board's jurisdictional reasoning.

On the second issue, the Court ruled for GSIS. A case is moot and academic when it ceases to present a justiciable controversy by virtue of supervening events, so that adjudication would be of no practical value or use. The Court held that the August 2006 order of the DAR OIC-Secretary, affirmed by the Office of the President and by the Supreme Court with an Entry of Judgment, had precisely that effect. The order granted the landowners retention and lifted the Operation Land Transfer coverage over the 12.1842 hectares. The necessary consequence was the cancellation or nullification of the Emancipation Patent titles registered in the respondents' names. Having lost those titles, the respondents no longer had any personality or cause of action, because their complaint rested entirely on their averred ownership under those patents. The Court put the point plainly:

Thus, respondents based their complaint on their Emancipation Patents which no longer exist by virtue of a final judgment awarding the questioned lots to the children/heirs of Isberto Crisostomo and Elena Aldaba as part of their retained land.

Having so ruled, the Court found no need to resolve the other issues raised by the parties.

Doctrine

A case is moot and academic when a supervening event removes any justiciable controversy, leaving no actual substantial relief that a party could obtain. Courts generally dismiss such a case, save for the recognized exceptions, such as a compelling constitutional issue requiring controlling principles, or a question capable of repetition yet evading review. Where a final order of the agrarian secretary grants landowners a right of retention and lifts Operation Land Transfer coverage over land already covered by Emancipation Patents, the patents are necessarily cancelled, and the farmer-beneficiaries lose the title on which any suit for cancellation of a mortgage over that land depends. Jurisdiction over agrarian mortgage disputes under the Board's rules is thus rendered academic once the underlying title disappears.

Disposition

The petition was granted; the Decision and Resolution of the Department of Agrarian Reform Adjudication Board were reversed and set aside, and the respondents' appeal was dismissed for mootness.

Remember This

The one line to memorize: a final retention order that lifts Operation Land Transfer coverage cancels the Emancipation Patents, and with them the farmer's cause of action, rendering the suit moot. Examiners use this case to test mootness by supervening final judgment and the effect of retention on emancipation patents.