Papunan vs. DARAB

The DARAB has jurisdiction only over the cancellation of emancipation patents that are registered with the Register of Deeds; the cancellation of unregistered emancipation patents falls within the exclusive administrative jurisdiction of the Secretary of the Department of Agrarian Reform. Rights over agrarian reform-covered landholdings are not legally transferable and are deemed outside the commerce of man, except through authorized transfer actions with the conformity of the Samahang Nayon.

The case involves three parcels of agricultural land in Barangay Bantug, Marawa, Jaen, Nueva Ecija, covered by Presidential Decree No. 27, the land reform program of then-President Ferdinand Marcos. Angelina R. Rodriguez was the original farmer-beneficiary under PD 27, holding Certificate of Land Transfer (CLT) Nos. 0341310, 0341311, and 0341312. The dispute centers on the proper beneficiary of the land and the authority to cancel emancipation patents, implicating the jurisdictional boundaries between the DARAB's quasi-judicial powers and the DAR Secretary's administrative functions under the Comprehensive Agrarian Reform Law (RA 6657) and related issuances.

The subject of the controversy consists of three parcels of agricultural land with areas of 16,227, 6,587, and 9,009 square meters, respectively, situated in Barangay Bantug, Marawa, Jaen, Nueva Ecija. Angelina R. Rodriguez was the original beneficiary under PD 27 of the said parcels, covered by Certificate of Land Transfer (CLT) Nos. 0341310, 0341311, and 0341312. On July 21, 1981, Angelina Rodriguez waived her rights over the landholdings in favor of private respondent Marcos Rodriguez by virtue of a Sinumpaang Salaysay duly executed and thumbmarked by her, which waiver was concurred in by the Samahang Nayon of Marawa, Jaen, Nueva Ecija in its Kapasyahan Blg. 15. Thereafter, Marcos Rodriguez possessed and cultivated the landholdings as tenant-beneficiary under PD 27.

On July 21, 1988, Marcos Rodriguez obtained a loan from petitioner Graciano Padunan for P50,000 with the subject landholdings as collateral. The loan agreement was embodied in a Kasunduan which further provided that Padunan was authorized to possess and cultivate the land for two years and/or until repayment of the mortgage debt. On January 10, 1990, Emancipation Patent (EP) Nos. 414430, 414440, and 414448 covering the subject parcels were issued to Angelina Rodriguez, even though she had already waived her rights over the land in favor of Marcos Rodriguez on July 21, 1981. On October 9, 1990, Angelina Rodriguez executed, for the second time, a waiver of rights by way of sale, this time in favor of Padunan for the sum of P55,000.

Claiming ownership over the land, Padunan started constructing a house and a warehouse thereon. Objecting to the construction, Marcos Rodriguez filed, on November 5, 1990, a case for injunction before the Provincial Agrarian Reform Adjudication Board (PARAD) of Nueva Ecija. The PARAD found that Angelina Rodriguez no longer had any rights over the subject parcels as early as July 21, 1981, when she executed the Sinumpaang Salaysay waiving her rights in favor of Marcos Rodriguez, a waiver duly confirmed by the local Samahang Nayon in its Kapasyahan Blg. 15 in accordance with existing laws and DAR issuances. The DARAB categorically ruled that nothing in the evidence showed that Padunan was a tenant-beneficiary of the subject land, finding him to be a mere mortgagee whose rights end after the expiration of the mortgage contract and the corresponding obligations are met. The Court of Appeals affirmed these factual findings, ruling that the EPs issued to Angelina Rodriguez were issued by mistake due to inadvertence and that the annulment thereof was a correction of an administrative error within the exclusive competence of the DARAB.

• Jurisdiction over EP Cancellation: Petitioner argued that the DAR Secretary has exclusive jurisdiction to cancel EPs, pursuant to Section 12(b)(5) of PD 946, which provides that it is the Secretary of Agrarian Reform who has jurisdiction, among other things, to issue, recall, and cancel Certificates of Land Transfer.
• Due Process — Non-Party Registered Owner: Petitioner argued that the conclusion of the Court of Appeals that the DARAB could cancel the EPs even if the registered owner to whom the patent was issued is not a party to the case is patently contrary to the Bill of Rights.
• Due Process — Issues Not Raised in Pleadings: Petitioner argued that the Court of Appeals' conclusion that the DARAB could decide the case on issues not raised in the pleadings is patently contrary to the Bill of Rights.
• Substantial Evidence: Petitioner argued that the Court of Appeals sanctioned the DARAB's departure from the established rule that its decisions must be supported by substantial evidence.
• Factual Findings: Petitioner argued that the Court of Appeals, the DARAB, and the PARAD failed to consider that Angelina Rodriguez waived her rights over the subject landholdings in his favor with the conformity of the local Samahang Nayon, and that he possessed and cultivated the land in accordance with the laudable objectives of land reform while Marcos Rodriguez mortgaged and abandoned the same.

• DARAB Jurisdiction: Private respondent Marcos Rodriguez argued that it is the DARAB which has jurisdiction, based on Rule II, Section 1, paragraph (f) of the DARAB Revised Rules of Procedure (1989), which provides that the DARAB has primary jurisdiction over "cases involving the issuance of Certificates of Land Transfer (CLTs), Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs), and the administrative correction thereof."
• DARAB Statutory Basis: Public respondent DARAB argued that its jurisdiction to cancel erroneously issued EPs is enshrined in Section 50 of RA 6657, which provides that the DARAB has original, primary, and exclusive jurisdiction over agrarian reform matters and/or those related to agrarian reform implementation.

• Factual Findings: Whether the Court of Appeals' factual findings — that Marcos Rodriguez was the lawful tenant-beneficiary and Padunan only a mortgagee — should be reviewed by the Supreme Court.
• Jurisdiction over Unregistered EPs: Whether the DARAB or the Secretary of the Department of Agrarian Reform has jurisdiction to cancel the unregistered emancipation patents issued in the name of Angelina Rodriguez.
• Administrative Correction: Whether the cancellation of the subject EPs by the DARAB fell within the ambit of mere "administrative correction" under the old DARAB rules.

• Factual Findings: No. Only questions of law may be reviewed by the Supreme Court in an appeal by certiorari under Rule 45, and findings of fact by the Court of Appeals are final and conclusive, especially when they coincide with those of the DARAB, an administrative body with expertise on matters within its specific and specialized jurisdiction.
• Jurisdiction over Unregistered EPs: The Secretary of the Department of Agrarian Reform has jurisdiction. Under Administrative Order No. 06-00, issued pursuant to Sections 49 and 50 of RA 6657, the Agrarian Reform Secretary has exclusive jurisdiction over the issuance, recall, or cancellation of EPs/CLOAs that are not yet registered with the Register of Deeds.
• Administrative Correction: No. "Administrative correction" refers only to the rectification of wrong or insufficient information in the patent, not to something as substantial as the actual cancellation thereof, as defined in DAR Administrative Order No. 02, Series of 1994.

• Factual Findings: The Court noted that Padunan raised not only questions of law but also issues of fact. It is a well-settled rule that only questions of law may be reviewed by the Supreme Court in an appeal by certiorari. Findings of fact by the Court of Appeals are final and conclusive and cannot be reviewed on appeal to the Supreme Court, more so if the factual findings of the Court of Appeals coincide with those of the DARAB, an administrative body with expertise on matters within its specific and specialized jurisdiction. The only time the Court will disregard the factual findings of the Court of Appeals is when these are based on speculation, surmises, or conjectures or when these are not based on substantial evidence. No reason existed to disregard the findings of fact, as they were borne out by the record and supported by substantial evidence. The subject land was mortgaged to Padunan by Marcos Rodriguez on July 21, 1988, by virtue of the Kasunduan. However, instead of cultivating the land until payment of the mortgage debt, Padunan claimed ownership and constructed a house and warehouse based on the alleged waiver of rights executed by Angelina Rodriguez on October 9, 1990. It was found that Angelina Rodriguez no longer had any rights over the subject parcels as early as July 21, 1981, when she executed the Sinumpaang Salaysay waiving her rights in favor of Marcos Rodriguez, a waiver duly confirmed by the local Samahang Nayon. Thus, Marcos Rodriguez was already the lawful tenant-beneficiary at the time Angelina Rodriguez entered into the questionable agreement with Padunan, making the second transfer null and void ab initio and Padunan at best a mere mortgagee. Since Angelina Rodriguez no longer had any rights over the parcels, the EPs issued to her on January 10, 1990, were clearly issued by mistake, as EPs can only be issued to agrarian reform beneficiaries.

• Jurisdiction over Unregistered EPs: The Court stated that it is the law that confers jurisdiction and not the rules; jurisdiction over a subject matter is conferred by the Constitution or the law, and rules of procedure yield to substantive law. It was therefore incorrect for Marcos Rodriguez to argue that the DARAB derives its jurisdiction from the DARAB Rules of Procedure; the DARAB derives its jurisdiction from RA 6657. Section 50 of RA 6657 confers jurisdiction on the DARAB over agrarian reform cases or controversies. Under Section 1, Rule II of the DARAB New Rules of Procedure, issued on May 30, 1994, the DARAB has exclusive original jurisdiction over cases involving the issuance, correction, and cancellation of CLOAs and EPs which are registered with the Land Registration Authority. The grounds for cancellation of registered EPs were summarized by DAR Memorandum Order No. 02, Series of 1994, and a study of these grounds shows that it requires the exercise by the DAR of its quasi-judicial power through its adjudicating arm, DARAB. However, for EPs that are unregistered like the one issued to Angelina Rodriguez, the answer can be found in Administrative Order No. 06-00, issued on August 30, 2000, which provides for the Rules of Procedure for Agrarian Law Implementation (ALI) Cases, issued pursuant to Sections 49 and 50 of RA 6657. Under Section 2 of the said Rules, the Agrarian Reform Secretary has exclusive jurisdiction over the issuance, recall, or cancellation of EPs/CLOAs that are not yet registered with the Register of Deeds. Since the erroneously issued EPs in the name of Angelina Rodriguez were unregistered, it is the Secretary of Agrarian Reform who has the authority to cancel the same. The Court disagreed with the Court of Appeals for two reasons: first, at the time of the promulgation of the Court of Appeals decision on August 14, 1997, the 1994 DARAB New Rules of Procedure had long taken effect, and such rules clearly provide that the DARAB has jurisdiction only over the cancellation of registered EPs but not those that are not; second, even if the Court of Appeals ruling were based on the old DARAB rules (the 1989 DARAB Revised Rules of Procedure), the cancellation by the DARAB of the subject EPs did not fall within the ambit of mere administrative correction.

• Administrative Correction: The Court held that "administrative correction" refers only to the rectification of wrong or insufficient information in the patent and not to something as substantial as the actual cancellation thereof. The meaning of "administrative correction" is provided in DAR Administrative Order No. 02, Series of 1994, which states that administrative corrections may include non-identification of spouse, corrections of civil status, corrections of technical descriptions, and other matters related to agrarian reform. The cancellation of the subject EPs was therefore beyond the scope of administrative correction and fell within the exclusive jurisdiction of the DAR Secretary.

• Jurisdiction is conferred by law, not by rules — Jurisdiction over a subject matter is conferred by the Constitution or the law, and rules of procedure yield to substantive law. The Court applied this principle to reject the argument that the DARAB derived its jurisdiction from the DARAB Rules of Procedure, holding instead that the DARAB's jurisdiction derives from RA 6657.

• Finality of factual findings of the Court of Appeals — Findings of fact by the Court of Appeals are final and conclusive and cannot be reviewed on appeal to the Supreme Court, more so if they coincide with those of an administrative body with expertise on matters within its specific and specialized jurisdiction. The only exception is when these findings are based on speculation, surmises, or conjectures, or when they are not based on substantial evidence.

• Rights over agrarian reform land are not freely transferable — Rights over agrarian reform-covered landholdings under the agrarian reform program are not legally transferable and are deemed outside the commerce of man. However, substitution through a transfer action authorized under existing laws and DAR issuances, with the conformity of the Samahang Nayon, is permissible, as the designated farmer-beneficiary is replaced by another qualified farmer-beneficiary.

• Jurisdiction over cancellation of EPs — The DARAB has exclusive jurisdiction over cases involving the issuance, correction, and cancellation of CLOAs and EPs that are registered with the Land Registration Authority. The Secretary of the Department of Agrarian Reform has exclusive jurisdiction over the issuance, recall, or cancellation of EPs/CLOAs that are not yet registered with the Register of Deeds, in the exercise of administrative functions under Administrative Order No. 06-00.

• Administrative correction distinguished from cancellation — "Administrative correction" refers only to the rectification of wrong or insufficient information in the patent, such as non-identification of spouse, corrections of civil status, corrections of technical descriptions, and other matters related to agrarian reform, and not to something as substantial as the actual cancellation of the patent.

• "It is a well-settled rule that only questions of law may be reviewed by the Supreme Court in an appeal by certiorari. Findings of fact by the Court of Appeals are final and conclusive and cannot be reviewed on appeal to the Supreme Court, more so if the factual findings of the Court of Appeals coincide with those of the DARAB, an administrative body with expertise on matters within its specific and specialized jurisdiction." — This passage establishes the standard of review in Rule 45 petitions and explains why the Court declined to disturb the factual findings of the lower tribunals.

• "Clearly therefore, private respondent Marcos Rodriguez was already the lawful tenant-beneficiary of the subject land under PD 27 at the time Angelina Rodriguez entered into the questionable agreement with petitioner Graciano Padunan, thus making the second transfer null and void ab initio and Padunan at best a mere mortgagee of the subject landholdings by virtue of the Kasunduan between him and private respondent Marcos Rodriguez." — This passage states the ratio decidendi on the substantive issue of who was the lawful beneficiary and why the second waiver was invalid.

• "Clearly, the cancellation of EPs that are not yet registered with the Register of Deeds falls within the authority of the Agrarian Reform Secretary or DAR officials duly designated by him, in the exercise of his/their administrative functions. And since, in the case at bar, the erroneously issued EPs in the name of Angelina Rodriguez were unregistered, it is the Secretary of Agrarian Reform who has the authority to cancel the same." — This passage articulates the controlling rule on the jurisdictional issue, distinguishing between registered and unregistered EPs.

• "It must be stated at the outset that it is the law that confers jurisdiction and not the rules. Jurisdiction over a subject matter is conferred by the Constitution or the law and rules of procedure yield to substantive law. Otherwise stated, jurisdiction must exist as a matter of law." — This passage states the foundational principle that jurisdiction derives from substantive law, not from procedural rules.

• People vs. Casiano, 111 Phil 73 (1961) — Cited for the principle that jurisdiction over a subject matter is conferred by the Constitution or the law, and rules of procedure yield to substantive law.
• Solangon vs. Salazar, G.R. No. 125944, June 29, 2001 — Cited for the rule that only questions of law may be reviewed by the Supreme Court in an appeal by certiorari.
• J.R. Blanco vs. Quasha, 318 SCRA 373 (1999) — Cited for the same rule on the scope of review in certiorari appeals.
• Fuentes vs. Court of Appeals, 268 SCRA 703 (1997) — Cited for the same rule on the scope of review in certiorari appeals.
• Titong vs. Court of Appeals, 287 SCRA 102 (1998) — Cited for the finality of factual findings of the Court of Appeals.
• Atillo III vs. Court of Appeals, 266 SCRA 596 (1997) — Cited for the finality of factual findings of the Court of Appeals.
• Corpus vs. Grospe, 333 SCRA 425, 435 (2000) — Cited for the principle that factual findings of the Court of Appeals coinciding with those of an administrative body with expertise are given great respect.
• Milestone Realty & Co., Inc. and William Perez vs. Court of Appeals, G.R. No. 135999, April 19, 2002 — Cited for the exception to the finality of factual findings, i.e., when based on speculation, surmises, or conjectures or not based on substantial evidence.
• Baricuatro vs. Court of Appeals, G.R. No. 105902, February 9, 2002 — Cited for the same exception to the finality of factual findings.
• Paris vs. Alfeche, G.R. No. 139083, August 30, 2001 — Cited for the proposition that EPs can only be issued to agrarian reform beneficiaries.
• Vda. de Dela Cruz vs. Abille, 352 SCRA 691 (2001) — Cited for the same proposition on the issuance of EPs.
• Pagtalunan vs. Tamayo, 183 SCRA 252 (1990) — Cited for the same proposition on the issuance of EPs.

• Section 50, RA 6657 (Comprehensive Agrarian Reform Law of 1988) — Vests the DAR with primary jurisdiction to determine and adjudicate agrarian reform matters and grants it exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the DA and DENR. The Court applied this provision as the statutory basis for the DARAB's quasi-judicial powers.
• Section 1, Rule II, DARAB New Rules of Procedure (1994) — Grants the DARAB exclusive original jurisdiction over cases involving the issuance, correction, and cancellation of CLOAs and EPs which are registered with the Land Registration Authority. The Court applied this rule to distinguish the DARAB's jurisdiction over registered EPs from the DAR Secretary's jurisdiction over unregistered ones.
• Section 2, Administrative Order No. 06-00 (Rules of Procedure for Agrarian Law Implementation Cases, August 30, 2000) — Provides that the DAR Secretary has exclusive jurisdiction over the issuance, recall, or cancellation of EPs or CLOAs not yet registered with the Register of Deeds. The Court applied this provision to determine that the Secretary, not the DARAB, had jurisdiction to cancel the unregistered EPs in this case.
• Section 12(b)(5), PD 946 — Provides that the Secretary of Agrarian Reform has jurisdiction to issue, recall, and cancel Certificates of Land Transfer. Cited by petitioner to support his argument on the DAR Secretary's exclusive jurisdiction.
• DAR Administrative Order No. 02, Series of 1994 — Defines "administrative corrections" as including non-identification of spouse, corrections of civil status, corrections of technical descriptions, and other matters related to agrarian reform. The Court applied this to distinguish administrative correction from actual cancellation of EPs.
• Section 1, Rule 45, 1997 Rules of Civil Procedure — Limits appeals by certiorari to questions of law. The Court applied this rule to decline review of the factual findings of the Court of Appeals.

Puno, Panganiban, and Morales, JJ., concurred. Sandoval-Gutierrez, J., took no part.