GR 109568; (August, 2002) (Digest)
G.R. No. 109568 & G.R. No. 113454, August 8, 2002
ROLANDO SIGRE and LAND BANK OF THE PHILIPPINES, petitioners,
vs.
COURT OF APPEALS and LILIA Y. GONZALES, as co-administratrix of the Estate of Matias Yusay, respondents.
FACTS
Private respondent Lilia Y. Gonzales, as co-administratrix of the Estate of Matias Yusay, filed a petition for prohibition and mandamus with the Court of Appeals seeking to prohibit the Land Bank of the Philippines (LBP) from accepting leasehold rentals from tenant Ernesto Sigre (predecessor of petitioner Rolando Sigre) and to compel LBP to turn over previously remitted rentals. Ernesto Sigre, a tenant on the estate’s irrigated rice land in Iloilo, stopped paying rentals to the landowner in the 1991-1992 agricultural year and instead remitted them to the LBP pursuant to DAR Memorandum Circular No. 6, Series of 1978. This circular provided that payment of lease rentals to landowners terminates on the date the value of the land is established, after which tenant-farmers shall pay lease rentals/amortizations to the LBP. Private respondent assailed the validity of Memorandum Circular No. 6 and the constitutionality of P.D. No. 27. The Court of Appeals declared Memorandum Circular No. 6 null and void, directed LBP to return the rentals to private respondent, and ordered Sigre to pay rentals directly to her. The appellate court ruled that the circular conflicted with P.D. No. 816, that P.D. No. 27’s formula for determining land cost was unconstitutional as it limited judicial prerogative on just compensation, and that P.D. No. 27 was no longer applicable due to R.A. No. 6657 . Hence, these consolidated petitions for review.
ISSUE
1. Whether DAR Memorandum Circular No. 6, Series of 1978 is valid.
2. Whether there is an irreconcilable conflict between Memorandum Circular No. 6 and P.D. No. 816.
3. Whether P.D. No. 27 is unconstitutional for setting a formula to determine just compensation.
4. Whether P.D. No. 27 has been impliedly repealed by R.A. No. 6657 .
RULING
1. Yes, DAR Memorandum Circular No. 6 is valid. The power of subordinate legislation allows administrative bodies to implement broad policies by filling in details. The circular is germane to the objects and purposes of P.D. No. 27, which is the emancipation of tenants by transferring land ownership. The circular was promulgated to address problems in implementing the land reform program, such as ensuring lease rental payments are applied to amortizations and preventing perpetual obligation. Since it seeks to accomplish the purpose of P.D. No. 27, it is valid and has the force of law.
2. No, there is no irreconcilable conflict between Memorandum Circular No. 6 and P.D. No. 816. P.D. No. 816 provides that tenant-farmers shall pay lease rentals to the landowner until the property’s value is determined. Memorandum Circular No. 6 mandates payment to LBP after the land value is established. There is no inconsistency; the circular merely provides guidelines for implementing P.D. No. 816. Under both, payment of lease rentals terminates when the land value is established, after which amortizations are paid to LBP, with prior rentals credited as partial payment.
3. No, P.D. No. 27 is not unconstitutional. The Supreme Court has consistently sustained P.D. No. 27 against constitutional objections. The formula for determining land value (2.5 x average harvest of three normal crop years preceding October 21, 1972) is a valid exercise of police power and eminent domain. Just compensation under P.D. No. 27 is not a judicial but an executive function, and the courts’ role is limited to reviewing administrative determinations for arbitrariness.
4. No, P.D. No. 27 has not been impliedly repealed by R.A. No. 6657 . R.A. No. 6657 explicitly recognizes P.D. No. 27 and provides that its implementation shall proceed. Rights already vested under P.D. No. 27 are retained. The Comprehensive Agrarian Reform Law ( R.A. No. 6657 ) complements, not supplants, P.D. No. 27.
The consolidated petitions are GRANTED. The Decision of the Court of Appeals is NULLIFIED and SET ASIDE, and the petition in CA-G.R. SP No. 28906 is DISMISSED for lack of merit.