Department of Agrarian Reform vs. Robles

The DARAB has jurisdiction over petitions for annulment of deeds of sale and cancellation of titles involving agricultural lands under the coverage of the CARP, even in the absence of a tenancy relationship, if the case is an “agrarian reform matter” — including a sale allegedly executed in violation of retention limits and without DAR clearance — and is referred by the DAR Secretary to the Adjudicator under the 2003 DARAB Rules of Procedure. The term “agricultural lands under the coverage of the CARP” in Section 1(1.5) of the Rules includes all private agricultural lands as defined in Section 4 of R.A. No. 6657, not limited to lands already under DAR administration or for which a notice of coverage has been issued.

Eduardo Reyes, married to Nenita P. Reyes, owned two parcels of agricultural land in Barangay Ambiling, Magdalena, Laguna, covered by TCT Nos. T‑85055 (195,366 sq. m.) and T‑116506 (7,431 sq. m.). He subdivided the larger tract into five lots. On April 17, 1997, he sold the subdivided lots and the smaller parcel to the six respondents — Igmidio, Randy, Mary Krist, Anne Jamaica, John Carlo, and Christine Ann Robles — through separate deeds of absolute sale. Each of the individual lots sold was under five hectares, but the aggregate area of the landholdings exceeded the 5‑hectare retention limit under the CARL. The deeds were not immediately registered; Eduardo died on October 28, 2000, while the public records still showed him as the registered owner. The DAR later learned that the properties had been conveyed and that no DAR clearance, as required by Administrative Order No. 01‑89, was secured before registration.

• Ownership and the 1997 Sales: Eduardo Reyes, the original registered owner of two agricultural properties in Magdalena, Laguna (TCT Nos. T‑85055 and T‑116506, with areas of approximately 195,366 and 7,431 square meters), subdivided the larger parcel into five lots. On April 17, 1997, he executed separate deeds of absolute sale covering specific lots in favor of each respondent: Igmidio D. Robles (38,829 sq. m.), Randy V. Robles (39,896 sq. m.), Mary Krist B. Malimban (38,904 sq. m.), Anne Jamaica G. Robles (38,595 sq. m.), John Carlo S. Robles (39,142 sq. m.), and Christine Anne V. Robles (7,431 sq. m.). Each individual lot was under the 5‑hectare retention ceiling, but the aggregate area exceeded that limit.

• Registration and DAR’s Discovery: The deeds of absolute sale were registered with the Registry of Deeds of Laguna only on May 3, 2005, resulting in the issuance of new transfer certificates of title in respondents’ names. In the interim, Eduardo died on October 28, 2000. The DAR Municipal Office in Magdalena received a letter from respondents’ counsel on September 8, 2005 informing it of the sale; DAR then verified with the Registry of Deeds and confirmed the transfers. On May 26, 2006, the Provincial Agrarian Reform Officer II (PARO) filed the petition for annulment of the deeds of sale and cancellation of titles, alleging that the sales were executed without the prior DAR clearance required by Administrative Order No. 01‑89 and in violation of Section 6, paragraph 4 of R.A. No. 6657, which voids transfers of private agricultural lands made by the original landowner in excess of the retention limits after the effectivity of the CARL.

• Notices of Coverage: Before discovering the registered sale, the DAR issued Notices of Coverage under the compulsory acquisition scheme. A notice dated September 8, 2004 was sent to Julieta R. Gonzales (surviving spouse of Eduardo) and another dated November 23, 2004 to Nenita Reyes (daughter), because the Register of Deeds still reflected Eduardo as the registered owner. The DAR later acknowledged that, under DAR Memorandum Circular No. 18‑04, it should have also issued coverage notices to respondents as the new owners, but it did not. The DAR maintained that issuing such notices to respondents would validate the allegedly illegal transfer.

• Post‑Sale Tenancy Documents: After the deeds of sale were executed, deeds of surrender of tenancy rights dated July 10, 1997 were signed by alleged tenants in favor of respondents Igmidio and Christina Robles. Identically‑worded certifications from the Barangay Agrarian Reform Committee (BARC) Chairman and the Barangay Chairman of Ambiling, dated August 29, 1997, stated that the property covered by TCT No. T‑85055 (195,366 sq. m.) was a coconut land without any tenant and could be converted to non‑agricultural uses. These documents were presented by respondents and noted by the Court as casting doubt on the validity of the transfer, suggesting a possible circumvention of CARP coverage.

• Jurisdiction under DARAB Rules: DAR argued that its petition fell squarely within the jurisdiction of the DARAB. Citing DAR Memorandum Circular No. 02‑01, which expressly directs the PARO to file a petition for annulment of deeds of conveyance before the PARAD for violations of Section 6, paragraph 4 of R.A. No. 6657, DAR maintained that the DARAB’s jurisdiction is not limited to agrarian disputes but extends to other matters involving the implementation of agrarian laws under Section 1(1.5) and (1.9) of Rule II of the 2003 DARAB Rules of Procedure.

• Validity of Notices of Coverage: DAR asserted that the notices of coverage were duly served on the heirs of Eduardo because public records still named him owner. The heirs even opposed coverage, demonstrating that the properties were under CARP. The failure to issue notices to respondents did not defeat jurisdiction; issuing such notices would have erroneously recognized an invalid transfer.

• Coverage under CARP: DAR contended that under Section 4 of R.A. No. 6657, the CARP covers all private lands devoted to or suitable for agriculture, and the subject properties fall within that scope. No notice of coverage is required for a land to be considered under CARP coverage for jurisdictional purposes; exempting the lands would undermine the agrarian reform program.

• Lack of Agrarian Dispute: Respondents countered that the DARAB’s jurisdiction requires an agrarian dispute, which in turn requires a tenancy relationship between the parties. Relying on Dandoy v. Tongson and Department of Agrarian Reform v. Paramount Holdings Equities, Inc., they pointed out that the petition was not brought on behalf of any tenant, farmworker, or beneficiary and contained no allegation of tenurial arrangements.

• Invalid Notice of Coverage: Respondents argued that the notices of coverage were belatedly issued to the wrong persons — the heirs of Eduardo, not the present owners. Without a valid notice of coverage to the actual landowners, the properties were never effectively placed under the CARP, depriving the DARAB of jurisdiction.

• Lands Not Under DAR Administration: Respondents maintained that under Section 1(1.9) of the 2003 DARAB Rules, the DARAB’s jurisdiction over annulment of deeds of sale is limited to lands already under the administration and disposition of DAR or the Land Bank of the Philippines — i.e., lands already acquired and distributed to beneficiaries. The subject lands were not such.

• Innocent Purchasers and Indefeasibility of Title: Respondents claimed to be purchasers in good faith and for value, having bought the lands and paid a fair price without notice of any adverse claim. They invoked Section 32 of P.D. No. 1529, arguing that after one year from the entry of the decree of registration, the corresponding certificates of title become incontrovertible and cannot be collaterally attacked. They stressed that the original and derivative titles bore no annotation of any agrarian reform lien.

• Scope of DARAB Jurisdiction: Whether the DARAB has jurisdiction over a petition for annulment of deeds of absolute sale and cancellation of titles founded on an alleged violation of the CARL’s retention limits and lack of DAR clearance, despite the absence of a tenancy relationship or agrarian dispute between the parties.

• Necessity of Notice of Coverage: Whether a notice of coverage must have been issued to the present landowners to place the lands under CARP coverage and thereby vest the DARAB with jurisdiction under Section 1(1.5), Rule II of the 2003 DARAB Rules of Procedure.

• Effect of Statutory Liens and Indefeasibility of Title: Whether the absence of annotated agrarian reform liens on the certificates of title, and the claimed indefeasibility of Torrens titles after one year, bar the DAR’s petition seeking annulment of the deeds of sale and cancellation of the titles.

• Scope of DARAB Jurisdiction: The DARAB’s jurisdiction is not confined to agrarian disputes that require a tenancy relationship. Section 50 of R.A. No. 6657 vests the DAR with primary jurisdiction to “determine and adjudicate agrarian reform matters,” a term broader than “agrarian dispute” and not defined by the statute. Section 1(1.13), Rule II of the 2003 DARAB Rules of Procedure expressly confers jurisdiction over “such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR.” DAR Memorandum Circular No. 02‑01 specifically referred petitions for annulment of deeds of conveyance executed in violation of Section 6, paragraph 4 of R.A. No. 6657 to the PARAD. Thus, the petition, though it did not involve a tenancy relationship, constituted an agrarian reform matter cognizable by the DARAB. Additionally, the petition fell within Section 1(1.5) of the same Rules, covering cases “involving the sale, alienation, pre‑emption and redemption of agricultural lands under the coverage of the CARL.” No tenancy is required under that provision. The Department of Agrarian Reform v. Paramount Holdings Equities, Inc. was distinguished: in that case, the lands had been classified as industrial before the effectivity of the CARL and no notice of coverage had been issued, whereas here the petition alleged that a notice of coverage had been issued and the transfer appeared designed to evade the retention limits.

• Necessity of Notice of Coverage: A notice of coverage is not a prerequisite for DARAB jurisdiction over cases involving the sale of agricultural lands under CARP coverage. The phrase “agricultural lands under the coverage of the CARP” in Section 1(1.5) encompasses all private agricultural lands as defined in Section 4 of R.A. No. 6657, not merely those for which a notice of coverage has been issued or those already under the administration of the DAR. This construction follows Sarne v. Maquiling, which interpreted the similarly‑worded provision in the 1994 DARAB Rules. The issuance of a notice of coverage to the heirs rather than to respondents, attributable to the unregistered status of the deeds when the notices were sent, did not oust the DARAB of jurisdiction. In any case, the individual lots sold to each respondent were all within the 5‑hectare retention limit; requiring a notice of coverage to the new owners as a condition for jurisdiction would defeat the purpose of preventing evasion of the retention ceilings.

• Effect of Statutory Liens and Indefeasibility of Title: The retention limits and prohibitions on transfer under Section 6 of R.A. No. 6657 constitute statutory liens on the registered land, even without annotation. Under Section 44 of P.D. No. 1529 (Property Registration Decree), a statutory lien includes “[a]ny disposition of the property or limitation on the use thereof by virtue of, or pursuant to, Presidential Decree No. 27 or any other law or regulations on agrarian reform.” These liens bind the whole world, and respondents are charged with constructive knowledge that the transfer might be illegal as a circumvention of the CARP. The Torrens system’s rule of indefeasibility after one year protects only the certificate of title as evidence of ownership; it does not bar a direct action challenging the validity of the underlying transfer of title. The DAR’s petition assails the legality of the conveyance, not merely the certificates, and is therefore not a collateral attack prohibited by Section 32 of P.D. No. 1529.

• “Agrarian Reform Matters” under Section 50, R.A. No. 6657 — The term “agrarian reform matters” is broader than “agrarian dispute” and is not limited to controversies involving tenurial arrangements. It includes cases referred to the DARAB by the DAR Secretary that involve the implementation of agrarian laws, even in the absence of a tenancy relationship. The DARAB’s quasi‑judicial jurisdiction covers such matters under Section 1(1.13), Rule II of the 2003 DARAB Rules of Procedure.

• Scope of “Agricultural Lands under the Coverage of the CARP” in DARAB Rules — In Rule II, Section 1(1.5) of the 2003 DARAB Rules of Procedure, the phrase “agricultural lands under the coverage of the CARL” refers to all private lands devoted to or suitable for agriculture as defined in Section 4 of R.A. No. 6657. It is not restricted to lands already under the administration and disposition of the DAR or the Land Bank of the Philippines, nor does it require the prior issuance of a notice of coverage. The jurisdictional grant is determined by the character of the land and the allegations of the petition, not by the issuance of an administrative notice.

• Statutory Liens for Agrarian Reform under Section 44 of P.D. No. 1529 — The retention limits and the prohibition on transfers under Section 6 of R.A. No. 6657 are statutory liens on registered land that bind subsequent purchasers even if not annotated on the certificate of title. A purchaser is deemed to have constructive notice of these limitations and cannot claim good faith to defeat an action seeking the annulment of the sale for violation of the CARL.

• Distinction between Certificate of Title and Title/Ownership — A certificate of title is merely evidence of ownership; its registration under the Torrens system does not create or vest ownership. The indefeasibility of a Torrens title after one year under Section 32 of P.D. No. 1529 protects the certificate against collateral attack, but does not preclude a direct proceeding challenging the legality of the transfer of ownership itself.

• “The Court cannot restrict the DARAB’s quasi-judicial jurisdiction only to those involving agrarian disputes where tenancy relationship exists between the parties, for it should also include other ‘agrarian reform matters’ which do not fall under the exclusive jurisdiction of the Office of the Secretary of DAR, the Department of Agriculture and the Department of Environment and Natural Resources, as well as the Special Agrarian Courts.”

• “The phrase ‘agricultural lands under the coverage of the CARP’ includes all private lands devoted to or suitable for agriculture, as defined under Section 4 of R.A. No. 6657. … It is worthy to note that in the enumeration defining the DARAB’s jurisdiction, it is only in paragraph (c) … that the phrase ‘involving lands under the administration and disposition of the DAR or LBP’ is used. That the same proviso does not appear in paragraph (e) … could only mean that it was never intended to be so limited.”

• “Registering a piece of land under the Torrens System does not create or vest title, because registration is not a mode of acquiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property described therein.”

• Sarne v. Hon. Maquiling, 431 Phil. 675 (2002) — Followed; interpreted the identical provision in the 1994 DARAB Rules to mean that the phrase “agricultural lands under the coverage of the CARP” includes all private agricultural lands under Section 4 of R.A. No. 6657, and is not limited to lands under DAR or LBP administration. Applied to construe Section 1(1.5) of the 2003 DARAB Rules.

• Department of Agrarian Reform v. Paramount Holdings Equities, Inc., G.R. No. 176838, June 13, 2013, 698 SCRA 324 — Distinguished; in that case, the petition lacked any allegation of a notice of coverage and the lands had been classified as industrial long before the CARL’s effectivity. Here, the petition alleged a notice of coverage and the transfer appeared designed to evade the retention limits, making the case an agrarian reform matter within DARAB jurisdiction.

• Heirs of Julian dela Cruz v. Heirs of Alberto Cruz, 512 Phil. 389 (2005) — Followed for the principle that jurisdiction over the nature and subject matter of a petition is determined by the material allegations therein and the relief prayed for, not by defenses raised by the respondent.

• Roxas & Co., Inc. v. Court of Appeals, 378 Phil. 727 (1999) — Cited to emphasize the importance of the notice of coverage as a requirement of administrative due process in compulsory acquisition, but not as a jurisdictional element for DARAB cases involving sales of agricultural lands.

• Heirs of Clemente Ermac v. Heirs of Vicente Ermac, 451 Phil. 368 (2003) — Cited for the rule that a certificate of title is merely evidence of ownership and registration does not create or vest title; a direct attack on the validity of a transfer is not barred by the indefeasibility of the certificate.

• Lacbayan v. Samoy, Jr., 661 Phil. 307 (2011) — Cited for the distinction between certificate of title (the document) and title (ownership itself); what cannot be collaterally attacked is the certificate, not the title.

• Section 6, paragraph 4, R.A. No. 6657 (Comprehensive Agrarian Reform Law) — Provides that any sale, disposition, lease, management contract, or transfer of possession of private lands executed by the original landowner in violation of the Act after its effectivity shall be null and void. It served as the substantive basis of the DAR’s petition.

• Section 50, R.A. No. 6657 — Vests the DAR with primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the Department of Agriculture and the Department of Environment and Natural Resources. The Court read this as encompassing not only agrarian disputes but also broader agrarian reform matters.

• Section 3(d), R.A. No. 6657 — Defines “agrarian dispute” as any controversy relating to tenurial arrangements over lands devoted to agriculture. The Court clarified that DARAB jurisdiction is not limited to cases falling strictly within this definition.

• Section 4, R.A. No. 6657 — Defines the scope of the CARP as covering, among others, all private lands devoted to or suitable for agriculture. The Court used this provision to construe the phrase “agricultural lands under the coverage of the CARP” in the DARAB Rules.

• Section 1(1.5) and (1.13), Rule II, 2003 DARAB Rules of Procedure — Section 1(1.5) grants the Adjudicator primary and exclusive original jurisdiction over cases involving the sale, alienation, pre‑emption, and redemption of agricultural lands under the coverage of the CARL. Section 1(1.13) grants jurisdiction over other agrarian cases, disputes, matters, or concerns referred by the DAR Secretary. Both provisions were relied upon to uphold the PARAD’s jurisdiction.

• Section 44, P.D. No. 1529 (Property Registration Decree) — Enumerates statutory liens affecting registered land, including (Fourth) any disposition or limitation on the use of property by virtue of agrarian reform laws. The retention limits under R.A. No. 6657 were held to be such a lien, binding respondents even without annotation.

• DAR Administrative Order No. 01‑89, Series of 1989 — Rules and Procedures Governing Land Transactions, requiring DAR clearance for the sale and registration of agricultural lands. Its violation was pleaded as part of the DAR’s cause of action.

• DAR Memorandum Circular No. 02‑01, Series of 2001 — Guidelines on Annulment of Deeds of Conveyance of Lands Covered by the CARP Executed in Violation of Section 6, Paragraph 4 of R.A. No. 6657. It directed the PARO to file a petition for annulment before the PARAD, thereby referring the matter to the DARAB and bringing it within the Adjudicator’s jurisdiction under Section 1(1.13).

Presbitero J. Velasco, Jr. (Chairperson), Martin S. Villarama, Jr., Bienvenido L. Reyes, Francis H. Jardeleza.