G.R. No. 133706 ; May 7, 2002
FRANCISCO ESTOLAS, petitioner, vs. ADOLFO MABALOT, respondent.

FACTS

Respondent Adolfo Mabalot was issued a Certificate of Land Transfer (CLT) over a 5,000-square-meter lot in 1973 under Presidential Decree No. 27. In 1978, needing funds for medical treatment, Mabalot transferred possession of the land to petitioner Francisco Estolas. Mabalot claimed the transaction was a mere verbal mortgage to secure a loan, while Estolas insisted it was an absolute sale. Based on this transfer, the Department of Agrarian Reform (DAR) authorized a survey and eventually issued an Emancipation Patent and Transfer Certificate of Title in Estolas’s name in 1987.
In 1988, Mabalot filed a complaint seeking to redeem the land. After investigations, the DAR Regional Director initially ruled in 1989 that Mabalot had abandoned the land, denying redemption. However, the DAR Central Office reversed this in 1990, ordering Estolas to return the land. This order was upheld by the Office of the President. Estolas appealed to the Court of Appeals, which dismissed his petition, prompting this appeal to the Supreme Court.

ISSUE

Did respondent Mabalot abandon the landholding awarded to him under P.D. No. 27, thereby making it available for transfer to another qualified farmer-grantee like petitioner Estolas?

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court held that there was no valid abandonment by Mabalot. Abandonment requires a clear, absolute, and irrevocable intent to renounce a right, coupled by an overt act of relinquishment. Mabalot’s act of transferring possession due to a financial need, which he consistently claimed was merely a mortgage, did not constitute abandonment. His subsequent actions—attempting to redeem the land in 1981 and 1983, retaining his CLT, and formally initiating a complaint for recovery—positively demonstrated his intent to retain ownership.
Crucially, the Court emphasized that lands acquired under P.D. No. 27 are non-transferable, except by hereditary succession or to the government. Any unauthorized transfer to a private individual, such as the purported sale to Estolas, is void. The subsequent issuance of an Emancipation Patent and title to Estolas did not cure this fundamental defect, as the transfer violated the law’s prohibitive policy. The proper procedure for reallocating an abandoned landholding must involve the government or an authorized entity, not a private takeover. Therefore, Mabalot remained the lawful beneficiary entitled to the land.