G.R. No. 164846; June 18, 2008
STA. MONICA INDUSTRIAL AND DEVELOPMENT CORPORATION, petitioner, vs. THE DEPARTMENT OF AGRARIAN REFORM REGIONAL DIRECTOR FOR REGION III, PROVINCIAL AGRARIAN REFORM OFFICER OF BULACAN, MUNICIPAL AGRARIAN REFORM OFFICER OF CALUMPIT, BULACAN, and BASILIO DE GUZMAN, respondent.

FACTS

Asuncion Trinidad owned agricultural land in Bulacan, with Basilio De Guzman as her registered agricultural leasehold tenant. De Guzman was issued Certificates of Land Transfer and later petitioned the DAR for the issuance of an emancipation patent. The DAR Regional Director issued an order placing Trinidad’s landholdings under the coverage of Operation Land Transfer and directing the issuance of an emancipation patent in favor of De Guzman. Trinidad’s motion for reconsideration was denied.
Subsequently, petitioner Sta. Monica Industrial and Development Corporation filed a petition for certiorari with the Court of Appeals, assailing the DAR order. Sta. Monica claimed it purchased a portion of the land from Trinidad in 1986 and had a Transfer Certificate of Title issued in its name. It argued a denial of due process, as it was not furnished a notice of coverage under CARP. De Guzman countered that the sale was void for lack of the required DAR clearance under P.D. No. 27, which prohibits transfers of covered land except to tenant-beneficiaries.

ISSUE

Whether the Court of Appeals correctly dismissed Sta. Monica’s petition, ruling that it was not a real party-in-interest entitled to question the DAR order.

RULING

Yes, the Supreme Court affirmed the Court of Appeals’ dismissal. The legal logic is anchored on the nullity of the land sale and the doctrine of piercing the corporate veil. The sale from Trinidad to Sta. Monica was void ab initio for violating the explicit prohibition under P.D. No. 27 and its implementing rules, which require DAR clearance for any transfer of land covered by agrarian reform. Since no clearance was obtained, the sale produced no legal effect. Consequently, Trinidad remained the legal owner of the property, and Sta. Monica acquired no valid title or interest. Having no legitimate interest in the land, Sta. Monica was not a real party-in-interest and lacked standing to challenge the DAR order.
Furthermore, the Court pierced the corporate veil, noting that Trinidad was the treasurer of Sta. Monica. The corporation was used as a mere smokescreen to circumvent agrarian laws and perpetuate a form of feudal servitude, thwarting the social justice objectives of CARP. The corporate fiction was disregarded to prevent its use for improper purposes. On the procedural issue, the Court found no denial of due process. As the corporation’s treasurer, Trinidad had constructive notice of the proceedings, and her knowledge was imputed to the corporation. The petition was therefore denied.