The Supreme Court has clarified the extent of a landowner’s right to choose retained land under agrarian reform, especially when the landowner has sold a portion of the land covered by Operation Land Transfer (OLT). The Court ruled that while landowners generally have the prerogative to select their retained area, this right is limited when they sell portions of their land without Department of Agrarian Reform (DAR) clearance. In such cases, the DAR can include the sold portion as part of the landowner’s retained area to prevent them from exceeding the maximum retention limit, but the landowner retains the right to choose the remaining area, subject to certain conditions protecting the rights of tenants.

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This case revolves around Renato L. Delfino, Sr., who owned several parcels of agricultural land in Laguna before Presidential Decree No. 27 (PD 27) took effect. A portion of his riceland, tenanted by Avelino and Angel Anasao, was placed under Operation Land Transfer (OLT). Delfino later sold a 2-hectare portion of his land to SM Prime Holdings, Inc. without prior DAR clearance. Subsequently, Delfino applied for retention rights over the entire property, leading to a dispute regarding which portions he could retain, considering the prior sale. The legal question at the heart of this case is whether the DAR can validly include the land sold to SM Prime Holdings, Inc. as part of Delfino’s retained area, and to what extent Delfino retains the right to choose the remaining portion of his retained land.

The Supreme Court addressed the interplay between the landowner’s right to choose their retention area and the DAR’s authority to ensure compliance with agrarian reform laws. The Court acknowledged the constitutional right of landowners to retain a portion of their agricultural land, as guaranteed by Section 6 of Republic Act No. 6657 (RA 6657), also known as the Comprehensive Agrarian Reform Law. This right aims to balance the interests of landowners and landless farmers, preventing social justice from becoming a tool for injustice against landowners. The law states:

SEC. 6. Retention Limits – Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private agricultural land…but in no case shall retention by the landowner exceed five (5) hectares.

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner.

However, this right is not absolute, especially when the landowner has acted in a manner that potentially undermines the goals of agrarian reform. The Court considered the implications of Delfino’s sale of a portion of his land to SM Prime Holdings, Inc. without DAR clearance. This action complicated the determination of his retained area, as it raised questions about whether he could still claim the full retention area despite having already disposed of a portion of his land.

The Court recognized the principle of immutability of final judgments, which generally prevents the modification of decisions that have become final and executory. However, the Court also acknowledged exceptions to this rule, including circumstances where the execution of the judgment would be unjust or inequitable due to events that transpired after the judgment became final. In this case, the Court found that the clarification made by the DAR Secretary in the February 2, 2006 Order fell under this exception, as it aimed to prevent Delfino from circumventing the five-hectare retention limit by including the land he had already sold. The Court reasoned that Delfino could not simultaneously enjoy the proceeds of the sale and exercise the right of retention to the maximum extent.

While the Court upheld the DAR Secretary’s decision to include the sold land as part of Delfino’s retained area, it also affirmed the landowner’s right to choose the remaining three hectares of his retention area. The Court cited the case of Daez v. Court of Appeals, emphasizing that the right of retention can be exercised over tenanted land, even if Certificates of Land Ownership Award (CLOAs) or Emancipation Patents (EPs) have been issued to tenant-farmers, provided that the rights of the tenants are protected. According to the Supreme Court:

For as long as the area to be retained is compact or contiguous and it does not exceed the retention ceiling of five (5) hectares, a landowner’s choice of the area to be retained, must prevail.

What must be protected, however, is the right of the tenants to opt to either stay on the land chosen to be retained by the landowner or be a beneficiary in another agricultural land with similar or comparable features.

The Court clarified that the DAR cannot dictate the specific location of the remaining three hectares, as this would encroach on the landowner’s prerogative to choose their retained area. However, this right is subject to the condition that the rights of any affected tenants are protected, allowing them to choose whether to remain on the retained land as leaseholders or to become beneficiaries of other agricultural land.

Regarding the Exemption Order allegedly issued by the DAR Regional Director, the Court noted that this matter was raised for the first time on appeal and was not considered during the proceedings before the Regional Director and the Office of the President. Therefore, the Court declined to consider this issue, as it would violate the principles of fair play and due process. The Court also addressed the argument that the petition should be dismissed due to the failure of all co-heirs to sign the verification and certification against forum-shopping, citing Iglesia Ni Cristo v. Judge Ponferrada, the Court reiterated that substantial compliance is sufficient when one of the heirs, with sufficient knowledge and belief, signs the verification and certification, especially when all parties share a common interest in the subject matter.

FAQs

What is the key issue in this case?	The key issue is determining the extent of a landowner’s right to choose retained land under agrarian reform, especially when a portion of the land has been sold without DAR clearance. The Court balances the landowner’s right to retention with the DAR’s authority to enforce agrarian reform laws.
Can a landowner retain land that is already covered by Emancipation Patents (EPs)?	Yes, the right of retention can be exercised even over land covered by EPs, but the rights of the tenant-farmers must be protected. The tenants must have the option to either stay on the retained land as leaseholders or become beneficiaries of other agricultural land.
What happens if a landowner sells a portion of their land without DAR clearance?	The DAR can include the sold portion as part of the landowner’s retained area to prevent them from exceeding the maximum retention limit of five hectares. This ensures that the landowner does not benefit from both the sale and the full retention rights.
Does the landowner still have a right to choose which area to retain after selling a portion of the land?	Yes, the landowner retains the right to choose the remaining portion of their retained land, subject to the condition that the rights of affected tenants are protected. The DAR cannot dictate the specific location of the retained area.
What is the significance of the Daez v. Court of Appeals case in this ruling?	The Daez case affirms the landowner’s right to choose their retained area, as long as it is compact or contiguous and does not exceed the retention limit. It also emphasizes the importance of protecting the rights of tenant-farmers affected by the retention.
What is the principle of immutability of final judgments?	The principle of immutability of final judgments means that a decision that has become final and executory can no longer be modified or altered, even if there are errors of fact or law. However, there are exceptions to this rule, such as when circumstances arise that make the execution of the judgment unjust or inequitable.
Why was the Exemption Order not considered by the Supreme Court?	The Exemption Order was not considered because it was raised for the first time on appeal and was not presented during the proceedings before the Regional Director and the Office of the President. Raising it at a later stage would violate principles of fair play and due process.
What is the requirement for verification and certification against forum shopping?	The verification and certification against forum shopping must generally be signed by all plaintiffs in a case. However, substantial compliance is sufficient when one of the plaintiffs, with sufficient knowledge and belief, signs the verification and certification, especially when all parties share a common interest in the subject matter.

In conclusion, the Supreme Court’s decision clarifies that while landowners have the right to choose their retained area under agrarian reform, this right is not absolute and can be limited when they engage in actions that undermine the goals of agrarian reform, such as selling land without DAR clearance. The DAR has the authority to include the sold land as part of the retained area, but the landowner retains the right to choose the remaining portion, subject to the protection of tenant’s rights. This ruling underscores the importance of balancing the rights of landowners and landless farmers in the implementation of agrarian reform laws.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Renato L. Delfino, Sr. v. Avelino K. Anasao, G.R. No. 197486, September 10, 2014