MAGDALENA CORUÑA, JORGE CORUÑA, ESTATE OF ALBERTO CORUÑA, ROSITA CORUÑA, ESTATE OF BENJAMIN CORUÑA, JUANITA ELIZALDE, FLORA ACOSTA, LORETO CORUÑA, AND ESTATE OF JOSE CORUÑA, PET…

Coruña versus Coruña

The Case

This is a petition for review on certiorari brought by the heirs of Julieta Vasquez Coruña against their former tenants, farmer-beneficiaries who had been issued emancipation patents and certificates of land transfer under Presidential Decree No. 27. The petitioners ask the Supreme Court to annul those patents, insisting that the tenants were never their tenants, that the retention limit was violated, and that the patents were issued before the tenants had paid the value of the land. The case matters because it settles, with unusual clarity, the rule that an emancipation patent may issue only after full payment of the land's value, and yet it also protects the tenant's possession even after the patent is cancelled.

Procedural History

The petitioners filed two separate complaints before the Provincial Agrarian Reform Adjudication Board of Bacolod City, one for each of the two lots, seeking cancellation and nullification of the emancipation patents and certificates of land transfer. In a decision dated 22 December 1994, the Provincial Adjudicator dismissed both complaints for utter lack of merit. The petitioners moved for reconsideration, which was denied, and then appealed to the Department of Agrarian Reform Adjudication Board. The Board affirmed the decision of the Provincial Adjudicator in full. The petitioners then went up to the Court of Appeals on a petition for review, which was denied in a decision dated 14 December 2001; their motion for reconsideration was likewise denied by resolution dated 23 May 2002. Hence, this petition for review on certiorari before the Supreme Court.

Facts

Julieta Vasquez Coruña owned two parcels of land in Negros Occidental: Lot No. 1176-A in Himaya, Hinigaran, with an area of 119.3830 hectares, and Lot No. 350-B in Payao, Binalbagan, with an area of 25.2513 hectares. When she died intestate on 30 September 1972, the properties passed to her children, the petitioners in this case. Lot No. 1176-A was tilled by one group of tenants and Lot No. 350-B by another group, the private respondents.

On 28 June 1994, the petitioners filed their two complaints before the Provincial Adjudicator. They alleged that both lots were primarily devoted to sugar production, with only about 9.92 hectares of Lot No. 1176-A and about 8.10 hectares of Lot No. 350-B used for rice and corn. Because the properties were still under co-ownership, each petitioner's pro-indiviso share of the rice and corn area was far below the seven-hectare retention limit under Presidential Decree No. 27. They further alleged that the respondents were never their tenants, and that the respondents had failed to pay rentals and amortizations.

The respondents answered that they and their predecessors-in-interest had been tenants, paying the landowners' shares, and that the Department of Agrarian Reform had recognized them as farmer-beneficiaries when Presidential Decree No. 27 took effect. They claimed they had been paying amortizations through the Land Bank of the Philippines and paying the real property taxes. The Provincial Adjudicator found the tenancy relationship proved by receipts signed by petitioner Jorge Coruña and by the respondents' affidavits, and found that the respondents had been identified by the Department of Agrarian Reform as farmer-beneficiaries. The adjudicator also held that the petitioners were no longer entitled to the seven-hectare retention because each already owned around 12.7614 hectares of other agricultural land.

Issues

• Whether or not the emancipation patents and certificates of land transfer issued to the respondents are null and void for having been issued prior to the full payment of the amortization required under Presidential Decree No. 27.
• Whether or not the payments made by the respondents to the Land Bank of the Philippines are valid amortization payments under Presidential Decree No. 27.

Applicable Provisions

Section 2 of Presidential Decree No. 266 provides:

After the tenant-farmer shall have fully complied with the requirements for a grant of title under Presidential Decree No. 27, an Emancipation Patent and/or Grant shall be issued by the Department of Agrarian Reform on the basis of a duly approved survey plan.

This is the provision the petitioners invoke, and the Court reads it as requiring full compliance, including full payment, before a patent may issue.

Paragraphs 8 and 9 of Presidential Decree No. 27 provide:

For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value of the land shall be equivalent to two and one-half times the average harvest of three normal crop years immediately preceding the promulgation of this Decree.

The total cost of the land, including interest at the rate of six per centum per annum, shall be paid by the tenant in fifteen years of fifteen equal annual amortizations.

These paragraphs establish that the transfer of ownership is conditioned on payment of the cost of the land within fifteen years.

Section 22 of Republic Act No. 6657 provides:

Actual tenant-tillers in the landholding shall not be ejected or removed therefrom.

This provision preserves the respondents' possession even after their patents are cancelled.

Ruling

On the first issue, the Court ruled partly in favor of the petitioners. It held that although tenant-farmers are deemed owners of the land they till, they are still required to pay the cost of the land, including interest, within fifteen years before title is transferred to them. Valuation of the land is only one aspect of agrarian reform; full compensation is another. The respondents submitted only land valuation summaries and average gross production data, which do not meet the requirement. The Court quoted its earlier ruling in the case of Paris versus Alfeche:

Although, under the law, tenant farmers are already deemed owners of the land they till, they are still required to pay the cost of the land, including interest, within fifteen years before the title is transferred to them.

The respondents, as debtors, bore the burden of showing with legal certainty that the obligation had been discharged by payment, and they failed to do so. The Court declared the emancipation patents null and void, but held that the respondents should remain in possession of the lands, because Section 22 of Republic Act No. 6657 forbids their ejectment.

On the second issue, the Court ruled against the petitioners. It held that there is neither inconsistency nor incompatibility between Presidential Decree No. 816 and DAR Memorandum Circular No. 6, Series of 1978. Under both, payment of lease rentals to the landowner terminates on the date the value of the land is established; thereafter, the tenant-farmers pay amortizations to the Land Bank. Since the value of the lands here had been determined by the Barangay Committee on Land Production and adopted by the Land Bank, the respondents were authorized to course their payments through the Land Bank. The payments to the Land Bank were therefore valid.

Doctrine

An emancipation patent under Presidential Decree No. 27 may issue only after the farmer-beneficiary has fully complied with the requirements of the decree, including full payment of the value of the land. The farmer is deemed owner from the effectivity of the decree, but absolute ownership vests only upon full payment. The farmer, as debtor, bears the burden of proving payment with legal certainty. Once the value of the land is established by the Barangay Committee on Land Production, amortization payments coursed through the Land Bank of the Philippines are valid. And even where the patent is cancelled, the actual tenant-tiller may not be ejected from the landholding.

Disposition

The petition was partially granted; the decision of the Court of Appeals was modified by declaring the emancipation patents issued to the respondents null and void, while the respondents remain in possession of the disputed lands.

Remember This

Memorize the line: an emancipation patent presupposes full payment, and its issuance conclusively vests absolute ownership. Examiners use this case to test the distinction between deemed ownership under Presidential Decree No. 27 and absolute ownership upon full payment, and to test the tenant's protection from ejectment under Section 22 of Republic Act No. 6657.