G.R. No. L-60269 September 13, 1991
ENGRACIA VINZONS-MAGANA, petitioner, vs. HON. CONRADO ESTRELLA, as Minister of Agrarian Reform, SALVADOR PEJO, as Regional Director, Ministry of Agrarian Reform, and JUANA S. VDA. DE PAITAN, respondents.

FACTS

Petitioner Engracia Vinzons-Magana owned a tenanted riceland in Camarines Norte cultivated by Domingo Paitan. On October 20, 1977, Magana filed a petition with the Court of Agrarian Relations to terminate the leasehold agreement, citing Paitan’s non-payment of rentals, inability to cultivate due to illness, and alleged subleasing. The presiding judge referred the case to the Department of Agrarian Reform for certification as required by Presidential Decree No. 316, but the DAR did not act on this request for over three years.
Instead, on July 10, 1980, the DAR placed the land under the Land Transfer Program via Memorandum Circular No. 11, Series of 1978, which implemented Letter of Instructions No. 474. This LOI mandated the coverage of tenanted rice/corn lands seven hectares or less owned by landowners holding more than seven hectares of agricultural land in aggregate. Following the procedures, a Certificate of Land Transfer was awarded to Domingo Paitan. Consequently, lease rentals were deposited with the Land Bank as amortization, prompting Magana to file this petition challenging the constitutionality of LOI 474 and Memorandum Circular No. 11 and seeking cancellation of the CLT.

ISSUE

The primary issue is whether Letter of Instructions No. 474 and Memorandum Circular No. 11, Series of 1978, are constitutional, and whether the issuance of a Certificate of Land Transfer without prior expropriation and payment of just compensation constitutes a violation of due process.

RULING

The Supreme Court dismissed the petition, upholding the constitutionality of the challenged issuances. The Court ruled that the constitutionality of Presidential Decree No. 27, the foundational agrarian reform law from which LOI 474 derives, is settled jurisprudence. Specifically, LOI 474 was validated in Zurbano v. Estrella, where it was held not to be class legislation nor a deprivation of property without due process. The Court noted that LOI 474 was duly published, complying with the publication requirement established in Tanada v. Tuvera.
Memorandum Circular No. 11 was sustained as a valid implementing rule that merely clarifies the guidelines of LOI 474. As an administrative regulation, it carries the force of law. On the claim of confiscation, the Court explained that the issuance of a Certificate of Land Transfer does not immediately vest ownership in the grantee but merely qualifies him to avail of the mechanisms for ownership acquisition under P.D. No. 27. The determination of just compensation remains a judicial function. The landowner is not without recourse, as she can challenge the DAR’s preliminary valuation in the proper courts. Furthermore, the CLT is not irrevocable; failure by the grantee to pay amortizations for two years is a ground for its forfeiture. Thus, the petition was dismissed without prejudice to Magana filing the appropriate action for final determination of just compensation.