JANETTE PEÑA AND BOB GUINTO, PETITIONERS, VS. DEPARTMENT OF AGRARIAN REFORM, DOMINGO QUIANI, SR., ALFONSO PEREZ, RICARDO MANGUAN, LEON RIVERA, CASIMIRO H. MANGUAN, ROBERT CUBAS,…

Peña versus Department of Agrarian Reform

The Case

This is a petition for review on certiorari filed by Janette Peña and Bob Guinto against the Department of Agrarian Reform and a group of farmer-claimants led by Domingo Quiani, Senior. The petitioners hold a Torrens certificate of title over a parcel of land in Tarlac City, and they ask the Supreme Court to set aside the orders of the Department of Agrarian Reform Secretary, which directed the cancellation of their title and the reallocation of the land to the farmer-claimants. The case matters because it draws the boundary between the quasi-judicial jurisdiction of the Department of Agrarian Reform and the protection that the Torrens system gives to registered owners, and because it shows when a litigant may go straight to the courts without first exhausting administrative remedies.

Procedural History

The farmer-claimants filed a Petition for Reallocation before the Department of Agrarian Reform. The Regional Director dismissed the petition for lack of sufficient basis, finding no substantial evidence that the claimants were entitled to reallocation. The claimants appealed to the Department Secretary, who at first affirmed the Regional Director. On motion for reconsideration, however, the Secretary reversed himself. He ordered the Provincial Agrarian Reform Program Officer to initiate proceedings for the cancellation of the titles issued to Andresito Boiser, Junior and to Janette Peña, to initiate reallocation proceedings, and to cause the issuance of new titles in the names of qualified farmer-beneficiaries. The Secretary denied the motion for reconsideration of Peña and Guinto.

Peña and Guinto then filed a Petition for Review with the Court of Appeals. The Court of Appeals dismissed the petition on two grounds: failure to observe the principle of exhaustion of administrative remedies, since appeals from the Secretary lie to the Office of the President, and several procedural infirmities, including a defective jurat, blurred annexes, and the absence of certified true copies. The Court of Appeals denied reconsideration. Hence, Peña and Guinto filed this petition for review on certiorari before the Supreme Court.

Facts

The Cruz and Sioson Estate, formerly the Valdez Estate, covers about 150 hectares in Barangay Balingcanaway, Tarlac City. Since 1990, landless farmers, including Quiani and his companions, allegedly occupied and cultivated portions of the estate and paid lease rentals to its administrators. They claimed that the property had been placed under the Comprehensive Agrarian Reform Program and distributed to farmer-beneficiaries, and that the awardees later illegally sold their portions to Peña, Guinto, and others, so that the land ended up in the names of relatives or nominees of the landowners.

In 2003, the land now covered by the petitioners' title was sold to Peña and Guinto. Their title, containing more or less seven hectares, traces back to a homestead patent and passed through several owners before reaching them. The title of their immediate predecessors-in-interest carried an annotation stating that the property was not tenanted, was not covered by Operation Land Transfer under Presidential Decree Number 27, and was not covered by Republic Act Number 6657.

The farmer-claimants filed a Petition for Reallocation with the Department of Agrarian Reform. Peña and Guinto opposed it, insisting that the land is not for sale, that it falls outside the coverage of the agrarian reform law because it was distributed under earlier land reform statutes, that reallocating it would violate their retention rights, and that no tenancy relationship exists between them and the claimants.

Issues

• Whether or not the Court of Appeals properly dismissed the Petition for Review of Peña and Guinto for failure to exhaust administrative remedies.
• Whether or not the Department of Agrarian Reform had jurisdiction to take cognizance of the Petition for Reallocation over land conveyed to the petitioners by sale.
• Whether or not the Petition for Reallocation amounted to a prohibited collateral attack on the petitioners' Torrens title.

Applicable Provisions

Section 33 of Department of Agrarian Reform Administrative Order Number 03-03 provides:

SECTION 33. Appeals. Appeals from the decision of the Secretary may be taken to the OP within fifteen (15) days from receipt thereof. The filing of an appeal within the proper period stays execution of the subject decision, unless the OP orders immediate execution of the DAR decision upon such terms and conditions that are just and reasonable, pursuant to Section 4 of OP Administrative Order (AO) No. 18 dated February 12, 1987, or the applicable rule.

This provision states the general rule that an aggrieved party must first appeal the Secretary's decision to the Office of the President.

Section 34 of the same Administrative Order provides:

SECTION 34. Judicial review. In cases where the appellant opts to elevate his appeal directly to a judicial forum, the governing procedure shall be the pertinent provisions of the Rules of Court, until and unless the judicial forum dismisses the appeal for failure to exhaust administrative remedies.

This provision allows a direct appeal to the courts, but only where the case falls under an exception to the principle of exhaustion of administrative remedies.

Section 50 of Republic Act Number 6657, as amended by Republic Act Number 9700, provides:

Section 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR)[.]

This provision defines the outer limit of the Department's jurisdiction, which the Court uses to test the validity of the Secretary's orders.

Section 48 of Presidential Decree Number 1529 provides:

Section 48. Certificate not subject to collateral attack. — A certificate of title shall not be subject to collateral attack. It cannot be altered, modified[,] or canceled except in a direct proceeding in accordance with law.

This provision protects the petitioners' title from being canceled as an incident of a reallocation proceeding.

Ruling

On the first issue, the Court ruled that the petition must be granted. The Court acknowledged that under Section 33 of Administrative Order Number 03-03, appeals from the Secretary may be taken to the Office of the President, but it harmonized that provision with Section 34, which permits direct judicial review unless the court dismisses the appeal for failure to exhaust administrative remedies. The Court held that the principle of exhaustion is not inflexible, and that two recognized exceptions apply here: where the challenged administrative act is patently illegal, amounting to lack of jurisdiction, and where the question involved is purely legal and will ultimately have to be decided by the courts. In the interest of judicial economy, the Court resolved the case directly instead of remanding it to the Court of Appeals.

On the second issue, the Court held that the Department of Agrarian Reform erred in taking cognizance of the Petition for Reallocation. The land was conveyed to the petitioners by way of a sale, not through any agrarian reform program. Since the land lies outside the ambit of agrarian reform, the challenged orders of the Secretary are patently illegal, resting on an exercise of jurisdiction that does not exist.

On the third issue, the Court held that the Petition for Reallocation was in substance a collateral attack on the petitioners' Torrens title. Although captioned as a petition for reallocation, it challenged the transfer of the property and necessarily sought the cancellation of the petitioners' certificates of title so that the land could be subdivided and titled in favor of new beneficiaries. A Torrens title is irrevocable and may be challenged only in a direct proceeding. The Court stressed that while land validly awarded under agrarian reform may be canceled for violations of the conditions of the award, cancellation must be undertaken in accordance with the governing laws and rules, in a direct action instituted for that purpose.

Doctrine

First, the principle of exhaustion of administrative remedies admits of recognized exceptions, among them that the challenged administrative act is patently illegal, amounting to lack of jurisdiction, and that the question involved is purely legal and will ultimately have to be decided by the courts. Where these exceptions obtain, direct resort to the courts is proper.

Second, the quasi-judicial jurisdiction of the Department of Agrarian Reform under Section 50 of Republic Act Number 6657 covers matters involving the implementation of the agrarian reform program. Land acquired by sale, outside any agrarian reform program, falls beyond that jurisdiction, and any order issued over it is void for want of jurisdiction.

Third, under Section 48 of Presidential Decree Number 1529, a Torrens certificate of title cannot be altered, modified, or canceled except in a direct proceeding in accordance with law. A petition for reallocation that necessarily results in the cancellation of a registered title is a prohibited collateral attack.

Disposition

The Supreme Court granted the petition, set aside the dismissal by the Court of Appeals, and nullified the orders of the Department of Agrarian Reform Secretary for having been issued without jurisdiction.

Remember This

The one line to memorize: a Torrens title may be canceled only in a direct proceeding, and the Department of Agrarian Reform has no jurisdiction over land that was never placed under the agrarian reform program. Examiners like to use this case on the exceptions to the exhaustion of administrative remedies and on the distinction between a direct and a collateral attack on a certificate of title.