G.R. No. 133507 February 17, 2000
Eudosia Daez and/or Her Heirs, Rep. by Adriano D. Daez, petitioners, vs. The Hon. Court of Appeals, Macario Sorientes, Apolonio Mediana, Rogelio Macatulad and Manuel Umali, respondents.

FACTS

Eudosia Daez owned a 4.1685-hectare riceland in Bulacan cultivated by respondents as share tenants. The land was placed under Operation Land Transfer (OLT) under P.D. No. 27, and Certificates of Land Transfer (CLTs) were issued to respondents in 1980. Daez applied for exemption from coverage, claiming the respondents were not tenants but hired laborers. This application was denied by the DAR, a decision ultimately affirmed by the Supreme Court in 1992. Subsequently, Emancipation Patents and titles were issued to the respondents. After the final denial of her exemption plea, Daez filed a new application for retention of the same land under the newer Comprehensive Agrarian Reform Law ( R.A. No. 6657 ). The DAR Secretary denied this retention application. The Office of the President reversed the DAR, authorizing retention. The Court of Appeals then reversed the Office of the President, reinstating the DAR’s denial.

ISSUE

Whether the petitioner’s application for retention under R.A. No. 6657 is barred by the prior final judgment denying her application for exemption from coverage under P.D. No. 27.

RULING

The Supreme Court REVERSED the Court of Appeals and REINSTATED the decision of the Office of the President, authorizing retention. The legal logic is that the right of retention and an application for exemption are distinct causes of action. The earlier final judgment pertained solely to the issue of exemption under the old law (P.D. No. 27), which was based on a finding that tenancy relationships existed, thus mandating coverage. This did not constitute res judicata on the separate issue of the landowner’s right of retention under the new law ( R.A. No. 6657 ). Retention is a constitutionally guaranteed privilege to small landowners, separate from the question of whether the land is subject to reform. The Court held that the petitioner, having filed her application for retention under R.A. 6657 after its effectivity, was entitled to have it evaluated on its own merits pursuant to the new law’s provisions, irrespective of the prior concluded proceedings on exemption. The Court further clarified that there was no statutory cut-off date that waived such a right, and the petitioner’s failure to apply for retention earlier under P.D. No. 27 did not forfeit her right to apply under the subsequently enacted R.A. No. 6657 .