G.R. No. L-38891. July 31, 1984.
Republic of the Philippines, Represented by the Ministry of Agrarian Reform, petitioner, vs. Carminia Siochi represented by her Attorney-in-fact, Andres E. Siochi Jr., respondents.

FACTS

Carminia Siochi is the registered owner of a parcel of land in Malabon, Rizal, originally part of the Tambobong Estate acquired by the government under Commonwealth Act No. 539 . The title contained three annotated restrictions: (1) a prohibition against alienation without government consent for five years; (2) a prohibition, except by hereditary succession, against transfer to any person not landless and qualified; and (3) a stipulation that violation of the first two conditions is ground for reversion to the government. In 1973, Siochi petitioned the Court of First Instance of Rizal for the cancellation of these restrictions, arguing the five-year period had lapsed.
The government, through the then Department of Agrarian Reform, opposed the cancellation of restrictions 2 and 3, conceding only that restriction 1 had prescribed. The lower court granted Siochi’s petition in full, ordering the cancellation of all restrictions. It ruled that perpetuating the annotations would constitute an unlawful restraint on ownership under Article 428 of the Civil Code, interpreting the limitations as intended only for the five-year period stated in the first restriction.

ISSUE

Whether the second and third restrictions annotated on the title are perpetual encumbrances that may be cancelled after the lapse of the five-year period stated in the first restriction.

RULING

The Supreme Court granted the petition and set aside the lower court’s order regarding restrictions 2 and 3. The legal logic is anchored on the statutory and administrative framework governing the disposition of acquired landed estates. The Court clarified that the five-year period explicitly mentioned in the title refers only to the first restriction requiring government consent for alienation. Restrictions 2 and 3, derived from Sections 17 and 18 of Land Registration Order No. R-3, are distinct and perpetual conditions imposed to effectuate the constitutional and statutory policy of breaking up landed estates and preventing excessive land concentration.
These perpetual conditions, which prohibit transfer to non-landless individuals and provide for reversion upon violation, were imposed pursuant to a valid administrative order having the force of law. They are binding on all subsequent owners as annotated encumbrances and are not contrary to law, morals, or public policy. Their purpose is to ensure the land remains with the landless, a fundamental objective of the agrarian reform program under Commonwealth Act No. 539 and the Constitution. Therefore, they do not constitute an invalid restraint on ownership but are lawful limitations established by statute. The lower court erred in conflating the temporal limit of the first restriction with the enduring nature of the second and third.