G.R. No. 168959; March 25, 2010
NAPOLEON MAGNO, Petitioner, vs. GONZALO FRANCISCO and REGINA VDA. DE LAZARO, Respondents.

FACTS

Petitioner Napoleon Magno is the owner of a 5.3-hectare agricultural lot in Nueva Ecija, which he acquired from his mother, Maria Candelaria Salud Talens, through a Deed of Sale executed on July 28, 1972, but registered only on September 3, 1986. At the time of the sale, respondents Gonzalo Francisco and Manuel Lazaro (succeeded by his spouse Regina Vda. de Lazaro upon his death) were tenants on the land. Petitioner entered into written agricultural leasehold contracts with them, obligating them to pay fixed lease rentals. Respondents complied until the regular season of April 1991, when they stopped paying, believing they had fully paid for the land under the Barangay Committee on Land Production’s (BCLP) valuation. On January 10, 1990, Emancipation Patents (EPs) were issued to respondents. On May 19, 1993, petitioner filed a complaint for ejectment and collection of lease rentals against respondents before the Provincial Agrarian Reform Adjudicator (PARAD) of Cabanatuan City. The PARAD dismissed the complaint, ruling the land was covered by the Operation Land Transfer (OLT) program under P.D. No. 27, the sale was a device to circumvent the law, and respondents had fully paid for the land. The Department of Agrarian Reform Adjudication Board (DARAB) reversed the PARAD, declaring the sale binding, maintaining the leasehold relationship, and ordering respondents to pay arrears. The Court of Appeals reinstated the PARAD’s dismissal.

ISSUE

Whether the Court of Appeals erred in reinstating the PARAD decision which dismissed petitioner’s action for collection of lease rentals and ejectment, thereby upholding the validity of the Emancipation Patents issued to respondents and finding the land transfer to petitioner ineffective against them.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals Decision. The Court held that the Emancipation Patents issued to respondents are conclusive evidence of ownership after the lapse of one year from its registration, pursuant to DAR Administrative Order No. 02, Series of 1994. The EPs, registered in 1990, had become incontrovertible by the time petitioner filed his complaint in 1993. The Court found that the land was indeed covered by P.D. No. 27, as the mother landowner’s property exceeded the seven-hectare retention limit. The purported sale to petitioner in 1972 was deemed a circumvention of the agrarian reform law, as it was executed shortly after P.D. No. 27’s effectivity and registered only in 1986. The Court noted that petitioner failed to timely challenge the issuance of the EPs or the land valuation. Furthermore, the Court ruled that the issuance of the EPs extinguished the agricultural leasehold relationship and any obligation to pay lease rentals, as respondents had become full owners. The findings of the PARAD and the Court of Appeals, being supported by evidence, were upheld.