G.R. No. 176549. October 10, 2018.
DEPARTMENT OF AGRARIAN REFORM, QUEZON CITY & PABLO MENDOZA, PETITIONERS, V. ROMEO C. CARRIEDO, RESPONDENT.

FACTS

The case originated from a dispute over land coverage under the Comprehensive Agrarian Reform Program (CARP). Respondent Romeo Carriedo previously sold a portion of his agricultural landholdings to Peoples’ Livelihood Foundation, Inc. (PLFI) without securing the required DAR clearance. The DAR, applying its Administrative Order No. 5, Series of 2006 (AO 05-06), treated that prior sale as Carriedo’s exercise of his right of retention. Consequently, the DAR ruled that a different landholding subsequently claimed by Carriedo as his retained area could no longer be excluded from CARP coverage and ordered its distribution to agrarian reform beneficiaries, including petitioner Pablo Mendoza. Carriedo challenged this order, and the Court of Appeals ruled in his favor, declaring Item No. 4 of AO 05-06 ultra vires. The Supreme Court initially affirmed this decision.

ISSUE

The core issue is whether the Supreme Court’s prior Decision should be reconsidered due to the DAR’s denial of due process, and substantively, whether Item No. 4 of AO 05-06 is a valid exercise of the DAR’s rule-making power in treating a prior unauthorized sale as the exercise of a landowner’s retention right.

RULING

The Supreme Court granted the motion for reconsideration, reversed its prior Decision, and upheld the validity of Item No. 4 of AO 05-06. The Court held that the DAR was denied fundamental due process as it was not notified of the proceedings before the Court of Appeals or this Court, depriving it of the opportunity to defend its own regulation. As the constitutional and statutory agency vested with primary jurisdiction and specialized expertise to implement agrarian reform, the DAR’s position was indispensable for a complete resolution of the case. On the merits, the Court ruled that AO 05-06 is a valid implementation of the Comprehensive Agrarian Reform Law (CARL). The administrative order operationalizes the statutory policy by providing that a landowner who sells agricultural land without DAR clearance is deemed to have chosen the area sold as his retained portion, applying the principle of estoppel. This interpretation prevents a landowner from circumventing retention limits through unauthorized sales and then claiming another area, thereby ensuring the equitable distribution of land central to the agrarian reform program. The regulation is consistent with the CARL’s intent and does not unlawfully amend the law. Consequently, Carriedo’s prior sale to PLFI constituted an exercise of his retention right, barring him from claiming the subject landholding as a retained area.