THIRD DIVISION

[G.R. No. 133706. May 7, 2002.]

FRANCISCO ESTOLAS , petitioner, vs . ADOLFO MABALOT , respondent.

Bince Viray & Associates for petitioner.

Public Attorney's Office for respondent.

SYNOPSIS

Subject agricultural land was awarded to respondent by virtue of PD 27 in 1973 and

a CLT was issued in his favor. In need of money for medical expenses, respondent passed
on the property to petitioner for P5,800.00 and P200.00 worth of rice. According to
respondent, that was a verbal mortgage. According to petitioner, a sale had taken place
and a transfer certi cate of title was issued in petitioner's name. Unable to redeem the
property respondent led a complaint for reconveyance with the DAR o ce which found
his act of surrendering the land in favor of petitioner as constituting an abandonment
thereof. The DAR Central O ce, however, reversed the assailed order and directed the
petitioner to return the land to respondent. The CA also held that the transfer of the land to
petitioner was void and that there was no abandonment because respondent tried to
redeem the property but petitioner asked for a high purchase rice. IcDHaT

On appeal, the Supreme Court held: that land awarded under PD 27 cannot be
transferred except to the grantee's heirs by hereditary succession, or back to the
government by other legal means; the law is clear and leaves no room for interpretation;
agrarian laws must be liberally interpreted in favor of the grantees; the property was not
abandoned as respondent continues to claim dominion over the land; and that even if
respondent did indeed abandon subject property, any transfer may only be made in favor
of the government.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; AGRARIAN LAWS; CONSTRUED. — This

Court has always ruled that agrarian laws must be interpreted liberally in favor of the
grantees in order to give full force and effect to the clear intent of such laws: "to achieve a
digni ed existence for the small farmers"; and to make them "more independent, self-
reliant and responsible citizens, and a source of genuine strength in our democratic
society." Neither are we convinced that an award under PD 27 may be transferred to
another in case the grantee abandons it. The law is explicit. Title acquired pursuant to PD
27 shall not be transferable except to the grantee's heirs by hereditary succession, or back
to the government by other legal means. AaDSTH

2. ID.; ID.; P.D. NO. 27; TITLE ACQUIRED PURSUANT THERETO MAY BE
TRANSFERRED ONLY TO GRANTEE'S HEIRS BY HEREDITARY SUCCESSION OR BACK TO
THE GOVERNMENT BY OTHER LEGAL MEANS. — PD 27 speci cally provides that title to
land acquired pursuant to its mandate or to that of the Land Reform Program of the
government shall not be transferable except to the grantee's heirs by hereditary
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 succession, or back to the government by other legal means.
3. STATUTORY CONSTRUCTION; WHEN THE LAW IS CLEAR THERE IS NO ROOM
FOR INTERPRETATION; CASE AT BAR. — The law is explicit. Title acquired pursuant to PD
27 shall not be transferable except to the grantee's heirs by hereditary succession, or back
to the government by other legal means. If a statute is clear, plain and free from ambiguity,
it must be given its literal meaning and applied without any interpretation. This rule rests
on the presumption that the words employed by the legislature correctly express its intent
and preclude the courts from construing the law differently. Similarly, a statute should be
so construed as to effectuate its intent, advance the remedy and suppress any mischief
contemplated by the framers. HAaECD

4. LABOR AND SOCIAL LEGISLATION; AGRARIAN LAWS; ABANDONMENT;

REQUISITES; ABSENT IN CASE AT BAR. — For abandonment to exist, the following
requisites must be proven: (a) a clear and absolute intention to renounce a right or claim or
to desert a right or property and (b) an external act by which that intention is expressed or
carried into effect. There must be an actual, not merely a projected, relinquishment;
otherwise, the right or claim is not vacated or waived and, thus, susceptible of being
appropriated by another. Administrative Order No. 2, issued on March 7, 1994, de nes
abandonment or neglect as a "willful failure of the agrarian reform bene ciary, together
with his farm household, to cultivate, till or develop his land to produce any crop, or to use
the land for any speci c economic purpose continuously for a period of two calendar
years." In the present case, no such "willful failure" has been demonstrated. Quite the
contrary, respondent has continued to claim dominion over the land.
5. ID.; ID.; P.D. NO. 27.; PROPER PROCEDURE FOR REALLOCATION OF
FARMHOLDINGS; CASE AT BAR. — Furthermore, even if respondent did indeed abandon his
right to possess and cultivate the subject land, any transfer of the property may only be
made in favor of the government. In Corpuz v. Grospe, the Court held that there was a valid
transfer of the land after the farmer-grantee had signed his concurrence to the Samahang
Nayon Resolution surrendering his possession of the landholding. This voluntary surrender
to the Samahang Nayon constituted a surrender or transfer to the government itself. Such
action forms part of the mechanism for the disposition and the reallocation of
farmholdings of tenant-farmers who refuse to become bene ciaries of PD 27. Under
Memorandum Circular No. 8-80 of the then Ministry of Agrarian Reform, the Samahan shall,
upon notice from the agrarian reform team leader, recommend other tenant-farmers who
shall be substituted to all rights and obligations of the abandoning or surrendering tenant-
farmer. Such cooperative or samahan is established precisely to provide a strong social
and economic organization that will ensure that farmers will reap and enjoy the bene ts of
agrarian reform. In the present case, there was no valid transfer in favor of the government.
It was petitioner himself who requested the DAR to cancel respondent's CLT and to issue
another one in his favor. Unlike in the above-cited case, respondent's land was not turned
over to the government or to any entity authorized by the government to reallocate the
farmholdings of tenant-farmers who refuse to become bene ciaries of PD 27. Petitioner
cannot, by himself, take over a farmer-bene ciary's landholding, allegedly on the ground
that it was abandoned. The proper procedure for reallocation must be followed to ensure
that there was indeed an abandonment, and that the subsequent bene ciary is a quali ed
farmer-tenant as provided by law.

DECISION
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 PANGANIBAN , J : p

Agrarian laws must be interpreted liberally in favor of the grantee, in order to give full
force and effect to their clear intent, which is "to achieve a digni ed existence for the small
farmers" and to make them "more independent, self-reliant and responsible citizens, and a
source of genuine strength in our democratic society."
The Case
Before us is a Petition for Review on Certiorari assailing the April 7, 1998 Decision 1
of the Court of Appeals 2 (CA) in CA-G.R. SP No. 38268. The decretal portion of the
assailed Decision reads thus:
"WHEREFORE, in view of the foregoing, the Petition is hereby DENIED DUE
COURSE and consequently, DISMISSED. No pronouncement as to costs." 3

The Facts
The facts of the case are summarized by the CA as follows:
"On November 11, 1973, a Certi cate of Land Transfer (hereinafter referred
to as CLT) was issued in favor of respondent over a 5,000 square meter lot
(hereinafter referred to as subject land) located in Barangay Samon, Sta. Maria,
Pangasinan. Sometime in May, 1978, needing money for medical treatment,
respondent passed on the subject land to the petitioner for the amount of
P5,800.00 and P200.00 worth of rice. According to respondent, there was only a
verbal mortgage; while according to petitioner, a sale had taken place. Acting on
the transfer, the DAR o cials in Sta. Maria, Pangasinan authorized the survey
and issuance of an Emancipation Patent, leading to the issuance of a Transfer
Certificate of Title No. 3736 on December 4, 1987, in favor of the petitioner.

"Sometime in May, 1988, respondent led a Complaint against the

petitioner before the Barangay Lupon in Pangasinan for the purpose of redeeming
the subject land. When no amicable settlement was reached, the case was
referred to the Department of Agrarian Reform's (hereinafter referred to as DAR)
regional office at Pilar, Sta. Maria, Pangasinan.

"On July 8, 1988, Atty. Linda F. Peralta of the DAR's District O ce

submitted her investigation report finding that respondent merely gave the subject
land to petitioner as guarantee for the payment of a loan he had incurred from the
latter; and recommending that the CLT remain in the name of respondent and that
the money loan be returned to petitioner.

"Meanwhile, in a letter, dated September 20, 1988, petitioner insisted that

the subject land had been sold to him by respondent and requested the DAR to
cancel the CLT in respondent's name. Another investigation was conducted on
the matter which led to the Order dated March 9, 1989, issued by DAR Regional
Director Antonio M. Nuesa. In the said Order, the DAR found the act of respondent
in surrendering the subject land in favor of petitioner as constituting
abandonment thereof, and denied respondent's prayer for redemption of the
subject land. Respondent's request for reinvestigation was denied in a Resolution,
dated April 11, 1989.

"Thus, on May 3, 1989, respondent appealed the case to the DAR Central
O ce which, on August 28, 1990, issued an Order reversing the assailed Order of
DAR Regional Director Antonio M. Nuesa and ordering the petitioner to return the
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 subject land to respondent. Petitioner's Motion for Reconsideration was denied on
June 8, 1992. He led an Appeal with the O ce of the President which was
dismissed in a Decision dated August 29, 1994. Petitioner's Motion for
Reconsideration of the said Decision was also denied in an Order dated
November 28, 1994. Likewise, petitioner's second Motion for Reconsideration was
denied in an Order dated July 5, 1995." 4

Ruling of the Court of Appeals

The appellate court ruled that the subject land had been acquired by respondent by
virtue of Presidential Decree (PD) No. 27. This law prohibits the transfer of the land except
by hereditary succession to the heirs or by other legal modes to the government. Hence,
the transfer of the subject land to petitioner is void; it should be returned to respondent.
The CA further held that respondent had not effectively abandoned the property,
because he tried to redeem it in 1981 and 1983. The effort, however, failed because
petitioner had demanded P15,000 for it. The appellate court also noted that respondent
continued to hold on to the Certi cate of Land Transfer (CLT) covering the subject land,
and that he "would not have even thought of bringing an action for the recovery of the
same if he honestly believed that he had already given it up in favor of [petitioner]." 5
Hence, this recourse. 6
Issues
In his anemic 6-page Memorandum, 7 petitioner raises the following issues:
"A. Whether or not in law there is a valid abandonment made by Respondent
Mabalot.

B. Whether the act of Respondent Mabalot in conveying to petitioner the right

to possess and cultivate the disputed parcel of land constitutes a valid
abandonment thereby rendering the property available for transfer to other
bonafide farmers.
C. Whether the continuous possession and cultivation by petitioner since
1976 up to the present has ripened into ownership over the five thousand
(5,000) square meters parcel in dispute.

D. Whether the issuance of an emancipation patent and thereafter a transfer

certificate of title in the name of petitioner has validated and legitimized
possession and ownership over the disputed property." 8

The main issue may be worded as follows: did respondent abandon the subject
property, thereby making it available to other qualified farmer-grantees?
The Court's Ruling
The Petition has no merit.
Main Issue:
Abandonment
The subject property was awarded to respondent by virtue of PD 27. On November
11, 1973, 9 a CLT was issued in his favor. PD 27 speci cally provides that when private
agricultural land — whether classi ed as landed estate or not — is primarily devoted to rice
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 and corn under a system of sharecrop or lease tenancy, the tenant farmers thereof shall be
deemed owners of a portion constituting a family-size farm of ve (5) hectares if not
irrigated, and three (3) hectares if irrigated.
Petitioner avers that respondent neither protested when the former had the subject
land surveyed and planted with 40 mango trees, nor attempted to return the money he had
borrowed from petitioner in 1976. Because the lot has been abandoned by respondent, the
bene ciary, and because PD 27 does not prohibit the transfer of properties acquired under
it, petitioner theorizes that the Department of Agrarian Reform (DAR) may award the land
to another qualified farmer-grantee. 1 0
Non-transferability of
Land Awarded Under PD 27
We do not agree. PD 27 speci cally provides that title to land acquired pursuant to
its mandate or to that of the Land Reform Program of the government shall not be
transferable except to the grantee's heirs by hereditary succession, or back to the
government by other legal means. The law is clear and leaves no room for interpretation.
Upon the promulgation of PD 27, farmer-tenants were deemed owners of the land
they were tilling. Their emancipation gave them the rights to possess, cultivate and enjoy
the landholding for themselves. These rights were granted by the government to them as
the tillers and to no other. Thus, to insure their continuous possession and enjoyment of
the property, they could not, under the law, effect any transfer except back to the
government or, by hereditary succession, to their successors. 1 1
Furthermore, this Court has always ruled that agrarian laws must be interpreted
liberally in favor of the grantees in order to give full force and effect to the clear intent of
such laws: "to achieve a digni ed existence for the small farmers"; and to make them
"more independent, self-reliant and responsible citizens, and a source of genuine strength
in our democratic society." 1 2
Neither are we convinced that an award under PD 27 may be transferred to another
in case the grantee abandons it. The law is explicit. Title acquired pursuant to PD 27 shall
not be transferable except to the grantee's heirs by hereditary succession, or back to the
government by other legal means.
If a statute is clear, plain and free from ambiguity, it must be given its literal meaning
and applied without any interpretation. 1 3 This rule rests on the presumption that the
words employed by the legislature correctly express its intent and preclude the courts
from construing the law differently. 1 4 Similarly, a statute should be so construed as to
effectuate its intent, advance the remedy and suppress any mischief contemplated by the
framers. 15
This Court is not unaware of the various subterfuges resorted to by unscrupulous
individuals, who have sought to deprive grantees of their land by taking advantage of
loopholes in the law and the ignorance of poor bene ciaries. Consequently, the farmers
who were intended to be protected and uplifted by these laws nd themselves back to
where they started, sometimes worse. This vicious cycle must be stopped. 1 6
No Abandonment
The CA correctly opined that respondent has not abandoned the subject land. It
said: AIDTHC

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 ". . . It appears that respondent tried to pay off the loan and redeem the
subject land in 1981 and in 1983, but did not succeed because of petitioner's
demands for the payment of P15,000.00 (see Petition, Annex 'G', p. 1; Rollo, p. 29).
It likewise appears that respondent did not deliver to petitioner his CLT which
remains in his possession to date (see Comment, p. 5; Rollo, p. 48a). Finally;
respondent 'would not have even thought of bringing an action for the recovery of
the same if he honestly believed that he had already given it up in favor of
(petitioner); he would not waste his time, effort and money, especially if he is
poor, to prosecute an unworthy action.'" 1 7

For abandonment to exist, the following requisites must be proven: (a) a clear and
absolute intention to renounce a right or claim or to desert a right or property and (b) an
external act by which that intention is expressed or carried into effect. There must be an
actual, not merely a projected, relinquishment; otherwise, the right or claim is not vacated
or waived and, thus, susceptible of being appropriated by another. 1 8 Administrative Order
No. 2, issued on March 7, 1994, de nes abandonment or neglect as a "willful failure of the
agrarian reform bene ciary, together with his farm household, to cultivate, till or develop
his land to produce any crop, or to use the land for any speci c economic purpose
continuously for a period of two calendar years." In the present case, no such "willful
failure" has been demonstrated. Quite the contrary, respondent has continued to claim
dominion over the land.
No Valid Reallocation
Furthermore, even if respondent did indeed abandon his right to possess and
cultivate the subject land, any transfer of the property may only be made in favor of the
government. In Corpuz v. Grospe , 1 9 the Court held that there was a valid transfer of the
land after the farmer-grantee had signed his concurrence to the Samahang Nayon
Resolution surrendering his possession of the landholding. This voluntary surrender to the
Samahang Nayon constituted a surrender or transfer to the government itself.
Such action forms part of the mechanism for the disposition and the reallocation of
farmholdings of tenant-farmers who refuse to become bene ciaries of PD 27. Under
Memorandum Circular No. 8-80 of the then Ministry of Agrarian Reform, the Samahan shall,
upon notice from the agrarian reform team leader, recommend other tenant-farmers who
shall be substituted to all rights and obligations of the abandoning or surrendering tenant-
farmer. Such cooperative or samahan is established precisely to provide a strong social
and economic organization that will ensure that farmers will reap and enjoy the bene ts of
agrarian reform. 2 0
In the present case, there was no valid transfer in favor of the government. It was
petitioner himself who requested the DAR to cancel respondent's CLT and to issue another
one in his favor. 2 1 Unlike in the above-cited case, respondent's land was not turned over to
the government or to any entity authorized by the government to reallocate the
farmholdings of tenant-farmers who refuse to become bene ciaries of PD 27. Petitioner
cannot, by himself, take over a farmer-bene ciary's landholding, allegedly on the ground
that it was abandoned. The proper procedure for reallocation must be followed to ensure
that there was indeed an abandonment, and that the subsequent bene ciary is a quali ed
farmer-tenant as provided by law.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioner.
SO ORDERED.
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 Melo, Vitug, Sandoval-Gutierrez and Carpio, JJ., concur.

Footnotes
1. Rollo, pp. 20-23.
2. Twelfth Division. Penned by Justice Consuelo Ynares-Santiago (Division chairman, now
a member of this Court) and concurred in by Justices Bernardo Ll. Salas and Demetrio
G. Demetria (members).
3. Assailed Decision, p. 3; rollo, p. 22.
4. Ibid., pp. 1-2; ibid.; pp. 20-21.
5. Id., p. 3; id., p. 22.
6. The case was deemed submitted for decision on October 26, 2000, upon the submission
of the Memorandum for petitioner; and re-raffled to the undersigned ponente on March
12, 2001 after the previous ponente, who was a member of the Second Division of the
Court, had inhibited himself.
7. Signed by Atty. Ronald G. Dinos; Attys. Arceli A. Rubin, Amelia C. Garchitorena and
Isabelito E. Sicat signed the Memorandum for respondent.

8. Petitioner's Memorandum, p. 3; rollo, p. 135. Original in upper case.

9. CA rollo, p. 13.
10. Rollo, p. 15.
11. Torres v. Ventura, 187 SCRA 96, July 2, 1990.
12. Catorce v. Court of Appeals, 129 SCRA 210, 215 May 11, 1984, per Melencio-Herrera, J.
13. Agpalo, Statutory Construction, 2nd ed., 1990, p. 94.
14. Espiritu v. Cipriano, 55 SCRA 533, February 15, 1974, as cited; ibid.
15. United States v. Go Chico, 14 Phil. 128, September 15, 1909; Tañada and Macapagal v.
Cuenco et al., 103 Phil. 1051, February 28, 1957; Villanueva v. City of Iloilo, 26 SCRA 578,
December 28, 1968; Matabuena v. Cervantes, 38 SCRA 284, March 31, 1971, as cited in
Agpalo; supra, note 9, p. 97.
16. Torres v. Ventura, supra.
17. CA Decision, p. 3; rollo, p. 22.
18. Medrana v. Office of the President, 188 SCRA 818, August 21, 1990.
19. 333 SCRA 425, June 13, 2000.

20. Ibid.
21. CA rollo, p. 14.

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