I. Basic Principles of Agrarian Reform A. Constitution

- Art. II Section 10. The State shall promote social justice in all phases of national development. Art. XIII Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

B. Social JusticeCALALANG, vs. A. D. WILLIAMS, G.R. No. 47800. December 2, 1940 G.R. No. 47800. December 2, 1940MAXIMO CALALANG, petitioner, vs. A. D. WILLIAMS, ET AL., respondents

Facts:The National Traffic Commission, in its resolution of 17 July 1940, resolved to recommend to the Director of Public Works and to the Secretary of Public Works and Communications that animal-drawn vehicles be prohibited from passing along Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante Bridge to traffic. The Chairman of the National Traffic Commission, on 18 July 1940, recommended to the Director of Public Works the adoption of the measure proposed in the resolution, in pursuance of the provisions of Commonwealth Act 548, which authorizes said Director of Public Works, with the approval of the Secretary of Public Works and Communications, to promulgate rules and regulations to regulate and control the use of and traffic on national roads.On 2 August 1940, the Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications, recommended to the latter the approval of the recommendation made by the Chairman of the National Traffic Commission, with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion thereof extending from the railroad crossing at Antipolo Street to Azcarraga Street. On 10 August 1940, the Secretary of Public Works and Communications, in his second indorsement addressed to the Director of Public Works, approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during the hours as indicated, for a period of 1 year from the date of the opening of the Colgante Bridge to traffic. The Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be enforced the rules and regulations thus adopted.Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before the Supreme court the petition for a writ of prohibition against A. D. Williams, as Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila.

Issues:1) Whether the rules and regulations promulgated by the Director of Public Works infringe upon the constitutional precept regarding the promotion of social justice to insure the well-being and economic security of all the people?2) Whether or not there is undue delegation of legislative power?

Ruling:1) The promotion of social justice is to be achieved not through a mistaken sympathy towards any given group. Social justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of interdependence among divers and diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest number."2) There is no undue delegation of legislative power. Commonwealth Act 548 does not confer legislative powers to the Director of Public Works. The authority conferred upon them and under which they promulgated the rules and regulations now complained of is not to determine what public policy demands but merely to carry out the legislative policy laid down by the National Assembly in said Act, to wit, “to promote safe transit upon and avoid obstructions on, roads and streets designated as national roads by acts of the National Assembly or by executive orders of the President of the Philippines” and to close them temporarily to any or all classes of traffic “whenever the condition of the road or the traffic makes such action necessary or advisable in the public convenience and interest.”The delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the ascertainment of the facts and circumstances upon which the application of said law is to be predicated.

To promulgate rules and regulations on the use of national roads and to determine when and how long a national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the requirements of public convenience and interest, is an administrative function which cannot be directly discharged by the National Assembly.It must depend on the discretion of some other government official to whom is confided the duty of determining whether the proper occasion exists for executing the law. But it cannot be said that the exercise of such discretion is the making of the law.

C. Police power - granted power to govern, and to make, adopt, and enforce laws for the protection and preservation of public health, justice, morals, order, safety and security, and welfare. It also gives a government the right to take private property for public use under the doctrine of eminent domain. Although police power is fundamental and essential (and cannot be surrendered or transferred) it is subject to constitution-imposedlimitations such as due process and supremacy of the law of the land.

Eminent Domain - involves the power and right of the state (through its government) to appropriate or take private property to be used for a public purpose. This process of taking is popularly known as expropriation. A compulsory sale to the government, it places a limitation on one’s property rights. That is why, before the government can validly take any private property, it must comply with strict legal requirements. This is in accord with the Constitution which says: “no person shall be deprived of property without due process of law”D. Constitutional Issues

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., petitioner vs. HONORABLE SECRETARY OF AGRARIAN REFORM, respondent. G.R. No. 78742 July 14, 1989

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious resource among our people. But it is more than a slogan. Through the brooding centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as their place in the sun.

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and economic security of all the people," especially the less privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the State shall regulate the acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership and profits." Significantly, there was also the specific injunction to "formulate and implement an agrarian reform program aimed at emancipating the tenant from the bondage of the soil."

Facts:

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by tenants who are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed from his farmholding until such time as the respective rights of the tenant- farmers and the landowner shall have been determined in accordance with the rules and regulations implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because the Department of Agrarian Reform has so far not issued the implementing rules required under the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel the respondent to issue the said rules.

The public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any right of retention from persons who own other agricultural lands of more than 7 hectares in aggregate area or lands used for residential, commercial, industrial or other purposes from which they derive adequate income for their family. And even assuming that the petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the corresponding applications for retention under these measures, the petitioners are now barred from invoking this right.

The petitioners insist that the above-cited measures are not applicable to them because they do not own more than seven hectares of agricultural land.

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the common people. These include a call in the following words for the adoption by the State of an agrarian reform program:

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations and subject to the payment of just compensation. In determining retention limits, the State shall respect the right of small landowners. The State shall further provide incentives for voluntary land-sharing.

Issue:

Whether or not all rights acquired by the tenant-farmer under P.D. No. 27, as recognized under E.O. No. 228, are retained by him even under R.A. No. 6657.

Held:

P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except that "no title to the land owned by him was to be actually issued to him unless and until he had become a full-fledged member of a duly recognized farmers' cooperative." It was understood, however, that full payment of the just compensation also had to be made first, conformably to the constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by virtue of Presidential Decree No. 27.

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change of ownership is contemplated either.

This should counter-balance the express provision in Section 6 of the said law that "the landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, that original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead."

R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact is one of its most controversial provisions.

Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm; Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead.

All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and recognized. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under the conditions therein prescribed. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement as to costs.

II. Agricultural Tenancy - is the physical possession by a person of land devoted to agriculture belonging to, or legally possessed by, another for the purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price certain or ascertainable, either in produce or in money, or in both

A. Elements - (1) the parties are the landowner and the tenant or agricultural lessee; (2) the subject matter of the relationship is agricultural land; (3) there is consent between the parties to the relationship; (4) the purpose of the relationship is to bring about agricultural production; (5) there is personal cultivation on the part of the tenant or agricultural lessee; and (6) the harvest is shared between the landowner and the tenant or agricultural lessee.

CASES:a. Cayetano and Tiongson vs CA (G.R. No. L-62626)

In this petition for review on certiorari of the decision of the Court of, Appeal declaring the existence of a landholder-tenant relationship and ordering the private respondent's reinstatement, the petitioners contend that the appellate court committed an error of law in:

1. Disregarding the findings of fact of the Court of Agrarian Relations which are supported by substantial evidence; and

2. Substituting the findings of fact of the Court of Agrarian Relations with its own findings.

Briefly, the facts of the case as found by the Court of Agrarian Relations, Seventh Regional District, Branch 1 at Pasig, Metro Manila are as follows: Sometime in 1946, the late Severino Manotok donated and transferred to his eight (8) children and two (2) grandchildren namely: Purificacion Manotok, Eliza Manotok, Perpetua manotok, Filomena Manotok, Severino Manotok, Jr., Jesus Manotok, Rahula Ignacio Manotok, Severino Manotok III, Fausto Manotok and Rosa Manotok, a thirty-four-hectare lot located in Payong, Old Balara, Quezon City covered by a certificate of title. Severino Manotok who was appointed judicial guardian of his minor children 'accepted on their behalf the aforesaid donation. At that time, there were no tenants or other persons occupying the said property.

In that same year, Teodoro Macaya accompanied by Vicente Herrera, the overseer of the property, went to the house of Manotok in Manila and pleaded that he be allowed to live on the Balara property so that he could at the same time guard the property and prevent the entry of squatters and the theft of the fruits and produce of the fruit trees planted by the owner. Manotok allowed Macaya to stay in the property as a guard (bantay) but imposed the conditions that at any time that the owners of the property needed or wanted to take over the property, Macaya and his family should vacate the property immediately; that while he could raise animals and plant on the property, he could do so only for his personal needs; that he alone could plant and raise animals on the property; and that the owners would have no responsibility or liability for said activities of Macaya. Macaya was allowed to use only three (3) hectares. These conditions, however, were not put in writing.

On December 5, 1950, the property-owners organized themselves into a corporation engaged primarily in the real estate business known as the Manotok Realty, Inc. The owners transferred the 34-hectare lot to the corporation as part of their capital contribution or subscription to the capital stock of the corporation.

From 1946 to 1956, Macaya did not pay, as he was not required to pay anything to the owners or corporation whether in cash or in kind for his occupancy or use of the property. However, the corporation noted that the realty taxes on the property had increased considerably and found it very burdensome to pay the said taxes while on the other hand, Macaya had contributed nothing nor even helped in the payment of the taxes. Thus, Macaya upon the request of the owners agreed to help by remitting ten (10) cavans of palay every year as his contribution for the payment of the realty taxes beginning 1957.

On June 5, 1964, the corporation requested Macaya to increase his contribution from ten (10) cavans to twenty (20) cavans of palay effective 1963 because the assessed value of the property had increased considerably. Macaya] agreed.

In 1967, Macaya informed the corporation that he could not afford anymore to deliver any palay because the palay dried up. He further requested that in the ensuring years, he be allowed to contribute only ten (10) cavans of palay. The corporation said that if that was the case, he might as well not deliver anymore. Thus, from 1967 up to 1976, Macaya did not deliver any palay.

On January 31, 1974, Manotok Realty, Inc. executed a "Unilateral Deed of Conveyance" of the property in favor of Patricia Tiongson, Pacita Go, Roberto Laperal III, Elisa Manotok, Rosa Manotok, Perpetua M. Bocanegra, Filomena M. Sison, Severino Manotok, Jr., Jesus Manotok, Ignacio S. Manotok, Severino Manotok III and Fausto Manotok.

Sometime in 1974, Macaya was informed by the Manotoks that they needed the property to construct their houses thereon. Macaya agreed but pleaded that he be allowed to harvest first the planted rice before vacating the property.

However, he did not vacate the property as verbally promised and instead expanded the area he was working on.

In 1976, the Manotoks once more told Macaya to vacate the entire property including those portions tilled by him. At this point, Macaya had increased his area from three (3) hectares to six (6) hectares without the knowledge and consent of the owners. As he was being compelled to vacate the property, Macaya brought the matter to the Department (now Ministry) of Agrarian Reforms. The Manotoks, during the conference before the officials of the Department insisted that Macaya and his family vacate the property. They threatened to bulldoze Macaya's landholding including his house, thus prompting Macaya to file an action for peaceful possession, injunction, and damages with preliminary injunction before the Court of Agrarian Relations.

The sole issue to be resolved in the present petition is whether or not a tenancy relationship exists between the parties. The Court of Agrarian Relations found that Macaya is not and has never been a share or leasehold tenant of Severino Manotok nor of his successors-in-interest over the property or any portion or portions thereof but has only been hired as a watchman or guard (bantay) over the same. On Macaya's appeal from the said decision, the respondent appellate court declared the existence of an agricultural tenancy relationship and ordered Macaya's reinstatement to his landholding.

Since what is involved ed is agricultural tenancy, we refer to Republic Act No. 1199 as amended by Republic Act No. 2263. Section 3 thereof defines agricultural tenancy as:

xxx xxx xxx

... the physical possession by a person of land devoted to agriculture belonging to, or legally possessed by, another for the purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price certain, either in produce or in money, or in both.

Thus, the essential requisites of tenancy relationship are: 1) the parties are the landholder and the tenant; 2) the subject is agricultural land; 3) there is consent; 4) the purpose is agricultural production; and 5) there is consideration (Agustin, Code of Agrarian Reforms of the Philippines, 1981, p. 19). As

xxx xxx xxx

All these requisites are necessary in order to create tenancy relationship between the parties and the absence of one or more requisites do not make the alleged tenant a de facto tenant, as contra-distinguished from a de jure tenant, This is so because unless a person has established his status as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws. ...

The key factor in ascertaining whether or not there is a landowner-tenant relationship in this case is the nature of the disputed property.

Is the thirty-four (34) hectare lot, of which the six (6) hectares occupied by the private respondent form a part, against agricultural land? If not, the rules on agrarian reform do not apply.

From the year 1948 up to the present, the tax declarations of real property and the annual receipts for real estate taxes paid have always classified the land as "residential". The property is in Balara, Quezon City, Metro Manila, not far from the correctly held by the trial court:

University of the Philippines and near some fast growing residential subdivisions. The Manotok family is engaged in the business of developing subdivisions in Metro Manila, not in farming.

The trial court observed that a panoramic view of the property shows that the entire 34 hectares is rolling forestal land without any flat portions except the small area which could be planted to palay. The photographs of the disputed area show that flush to the plantings of the private respondent are adobe walls separating expensive looking houses and residential lots from the palay and newly plowed soil. Alongside the plowed or narrowed soil are concrete culverts for the drainage of residential subdivisions. The much bigger portions of the property are not suitable for palay or even vegetable crops.

The trial court noted that in a letter dated April 12, 1977, the City Engineer of Quezon City certified on the basis of records in his office that the property in question falls within the category of "Residential I Zone."

The respondent court ignored all the above considerations and noted instead that the appellees never presented the tax declarations for the previous year, particularly for 1946, the year when Macaya began cultivating the property. It held that while the petitioners at that time might have envisioned a panoramic residential area of the disputed property, then cogonal with some forest, that vision could not materialize due to the snail pace of urban development to the peripheral areas of Quezon City where the disputed property is also located and pending the consequent rise of land values. As a matter of fact, it found that the houses found thereon were constructed only in the 70's.

Whatever "visions" the owners may have had in 1946, the fact remains that the land has always been officially classified as "residential" since 1948. The areas surrounding the disputed six hectares are now dotted with residences and, apparently, only this case has kept the property in question from being developed together with the rest of the lot to which it belongs. The fact that a caretaker plants rice or corn on a residential lot in the middle of a residential subdivision in the heart of a metropolitan area cannot by any strained interpretation of law convert it into agricultural land and subject it to the agrarian reform program.

On this score alone, the decision of the respondent court deserves to be reversed.

Another requisite is that the parties must be landholder and tenant. Rep. Act No. 11 99 as amended defines a landholder —

Sec. 5(b) A landholder shall mean a person, natural or juridical, who, either as owner, lessee, usufructuary, or legal possessor, lets or grants to another the use or cultivation of his land for a consideration either in shares under the share tenancy system, or a price certain under the leasehold tenancy system.

On the other hand, a tenant is defined as —

Sec. 5(a) A tenant shall mean a person who, himself and with the aid available from within his immediate farm household, cultivates the land belonging to, or possessed by, another with the latter's consent for purposes of production, sharing the produce with the landholder under the share tenancy system or paying to the landholder a price certain in produce or in money or both, under the leasehold tenancy system.

Under these definitions, may Macaya be considered as a tenant and Manotok as a landholder? Significant, as the trial court noted, is that the parties have not agreed as to their contributions of the several items of productions such as expenses for transplanting, fertilizers, weeding and application of insecticides, etc. In the absence of an agreement as to the respective contributions of the parties or other terms and conditions of their tenancy agreement, the lower court concluded that no tenancy relationship was entered into between them as tenant and landholder.

On this matter, the respondent Appellate Court disagreed. It held that:

... Whether the appellant was instituted as tenant therein or as bantay, as the appellees preferred to call him, the inevitable fact is that appellant cleared, cultivated and developed the once unproductive and Idle property for agricultural production. Appellant and Don Severino have agreed and followed a system of sharing the produce of the land whereby, the former takes care of all expenses for cultivation and production, and the latter is only entitled to 10 cavans of rice per harvest. This is the essense of leasehold tenancy.

It should be noted, however, that from 1967 to the present, Macaya did not deliver any cavans of palay to the petitioners as the latter felt that if Macaya could no longer deliver the twenty (20) cavans of palay, he might as well not deliver any. The decision of the petitioners not to ask for anymore contributions from Macaya reveals that there was no tenancy relationship ever agreed upon by the parties. Neither can such relationship be implied from the facts as there was no agreed system of sharing the produce of the property. Moreover, from 1946 to 1956 at which time, Macaya was also planting rice, there was no payment whatsoever. At the most and during the limited period when it was in force, the arrangement was a civil lease where the lessee for a fixed price leases the property while the lessor has no responsibility whatsoever for the problems of production and enters into no agreement as to the sharing of the costs of fertilizers, irrigation, seedlings, and other items. The private respondent, however, has long stopped in paying the annual rents and violated the agreement when he expanded the area he was allowed to use. Moreover, the duration of the temporary arrangement had expired by its very terms.

Going over the third requisite which is consent, the trial court observed that the property in question previous to 1946 had never been tenanted. During that year, Vicente Herrera was the overseer. Under these circumstances, coupled by the fact that the land is forested and rolling, the lower court could not see its way clear to sustain Macaya's contention that Manotok had given his consent to enter into a verbal tenancy contract with him. The lower court further considered the fact that the amount of ten (10) cavans of palay given by Macaya to the owners from 1957 to 1964 which was later increased to twenty (20) cavans of palay from 1964 to 1966 was grossly disproportionate to the amount of taxes paid by the owners. The lot was taxed as residential land in a metropolitan area. There was clearly no intention on the part of the owners to devote the property for agricultural production but only for residential purposes. Thus, together with the third requisite, the fourth requisite which is the purpose was also not present.

The last requisite is consideration. This is the produce to be divided between the landholder and tenant in proportion to their respective contributions. We agree with the trial court that this was also absent.

As earlier stated, the main thrust of petitioners' argument is that the law makes it mandatory upon the respondent Court of Appeals to affirm the decision of the Court of Agrarian Relations if the findings of fact in said decision are supported by substantial evidence, and the conclusions stated therein are not clearly against the law and jurisprudence. On the other hand, private respondent contends that the findings of the Court of Agrarian Relations are based not on substantial evidence alone but also on a misconstrued or misinterpreted evidence, which as a result thereof, make the conclusions of the Court of Agrarian Relations clearly contrary to law and jurisprudence.

After painstakingly going over the records of the case, we find no valid and cogent reason which justifies the appellate court's deviation from the findings and conclusions of the lower court. It is quite clear from the 44-page decision of the trial court, that the latter has taken extra care and effort in weighing the evidence of both parties of the case. We find the conclusions of the respondent appellate court to be speculative and conjectural.

It bears re-emphasizing that from 1946 to 1956, there was no agreement as to any system of sharing the produce of the land. The petitioners did not get anything from the harvest and private respondent Macaya was using and cultivating the land free from any charge or expense. The situation was rather strange had there been a tenancy agreement between Don Severino and Macaya.

From 1957 to 1964, Macaya was requested to contribute ten (10) cavans a year for the payment of the realty taxes. The receipts of these contributions are evidenced by the following exhibits quoted below:

(a) Exhibit "4" adopted and marked as Exhibit "K" for plaintiff (Macaya):

Ukol sa taon 1961

Tinanggap naniin kay G. Teodoro Macaya ang sampung (10) cavan na palay bilang tulong niya sa pagbabayad ng amillaramiento sa lupa ng corporation na nasa Payong, Q.C. na kaniyang binabantayan.

(b) Exhibit "9" adopted and marked as Exhibit "L" for plaintiff (Macaya):

Tinanggap namin kay Ginoong Teodoro Macaya ang TATLONG (3) kabang palay bilang kapupunan sa DALAWAMPUNG (20) kabang palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1963 ng lupang ari ng Manotok Realty, Inc. na nasa Payong, Quezon City, na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANGTIRAHAN.

c) Exhibit "10" adopted and marked as Exhibit "N" for plaintiff (Macaya):

Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1964 ng lupang ari ng Manotok Realty Inc., na nasa Payong, Quezon City, na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANG TAHANAN.

d) Exhibit "11" adopted and marked as Exhibit "M" for plaintiff (Macaya):

Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang ng palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1965 ng lupang ari ng Manotok Realty, Inc., na nasa Payong, Quezon City, na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANG TAHANAN.

From the above-quoted exhibits, it clearly appears that the payment of the cavans of palay was Macaya's contribution for the payment of the real estate taxes; that the nature of the work of Macaya is that of a watchman or guard (bantay); and, that the services of Macaya as such watchman or guard (bantay) shall continue until the property shall be converted into a subdivision for residential purposes.

The respondent appellate court disregarded the receipts as self-serving. While it is true that the receipts were prepared by petitioner Perpetua M. Bocanegra, Macaya nevertheless signed them voluntarily. Besides, the receipts were written in the vernacular and do not require knowledge of the law to fully grasp their implications.

Furthermore, the conclusion of the respondent appellate court to the effect that the receipts having been prepared by one of the petitioners who happens to be a lawyer must have been so worded so as to conceal the real import of the transaction is highly speculative. There was nothing to conceal in the first place since the primary objective of the petitioners in allowing Macaya to live on the property was for security purposes. The presence of Macaya would serve to protect the property from squatters. In return, the request of Macaya to raise food on the property and cultivate a three-hectare portion while it was not being developed for housing purposes was granted.

We can understand the sympathy and compassion which courts of justice must feel for people in the same plight as Mr. Macaya and his family. However, the petitioners have been overly generous and understanding of Macaya's problems. For ten years from 1946 to 1956, he lived on the property, raising animals and planting crops for personal use, with only his services as "bantay" compensating for the use of another's property. From 1967 to the present, he did not contribute to the real estate taxes even as he dealt with the land as if it were his own. He abused the generosity of the petitioners when he expanded the permitted area for cultivation from three hectares to six or eight hectares. Mr. Macaya has refused to vacate extremely valuable residential land contrary to the clear agreement when he was allowed to enter it. The facts of the case show that even Mr. Macaya did not consider himself as a true and lawful tenant and did not hold himself out as one until he was asked to vacate the property.

WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals is hereby REVERSED and SET ASIDE and the decision of the Court of Agrarian Relations is AFFIRMED.

SO ORDERED.b. Caballes vs DAR (G.R. No. 78214)

Before us is a petition for certiorari seeking the annulment of an Order issued by the public respondent Ministry of Agrarian Reform (MAR), now

the Department of Agrarian Reform (DAR), through its then Minister, the Hon. Heherson Alvarez, finding the existence of a tenancy relationship

between the herein petitioner and the private respondent and certifying the criminal case for malicious mischief filed by the petitioner against the

private respondent as not proper for trial. LLphil

The facts as gathered by the MAR are as follows:

The landholding subject of the controversy, which consists of only sixty (60) square meters (20 meters x 3 meters) was acquired by the spouses

Arturo and Yolanda Caballes, the latter being the petitioner herein, by virtue of a Deed of Absolute Sale dated July 24, 1978 executed by Andrea

Alicaba Millenes. This landholding is part of Lot No. 3109-C, which has a total area of about 500 square meters, situated at Lawa-an, Talisay, Cebu.

The remainder of Lot No. 3109-C was subsequently sold to the said spouses by Macario Alicaba and the other members of the Millenes family, thus

consolidating ownership over the entire (500-square meter) property in favor of the petitioner.

In 1975, before the sale in favor of the Caballes spouses, private respondent Bienvenido Abajon constructed his house on a portion of the said

landholding, paying a monthly rental of P2.00 to the owner, Andrea Millenes. The landowner likewise allowed Abajon to plant on a portion of the

land, agreeing that the produce thereof would be shared by both on a fifty-fifty basis. From 1975-1977, Abajon planted corn and bananas on the

landholding. In 1978, he stopped planting corn but continued to plant bananas and camote. During those four years, he paid the P2.00 rental for

the lot occupied by his house, and delivered 50% of the produce to Andrea Millenes.

Sometime in March 1979, after the property was sold, the new owners, Arturo and Yolanda Caballes, told Abajon that the poultry they

intended to build would be close to his house and pursuaded him to transfer his dwelling to the opposite or southern portion of the landholding.

Abajon offered to pay the new owners rental on the land occupied by his house, but his offer was not accepted. Later, the new owners asked

Abajon to vacate the premises, saying that they needed the property. But Abajon refused to leave. The parties had a confrontation before the

Barangay Captain of Lawa-an in Talisay, Cebu but failed to reach an agreement. All the efforts exerted by the landowners to oust Abajon from the

landholding were in vain as the latter simply refused to budge. LLphil

On April 1, 1982, the landowner, Yolanda Caballes, executed an Affidavit stating that immediately after she reprimanded Abajon for harvesting

bananas and jackfruit from the property without her knowledge, the latter, with malicious and ill intent, cut down the banana plants on the

property worth about P50.00. A criminal case for malicious mischief was filed against Abajon and which was docketed as Criminal Case No. 4003.

Obviously, all the planting on the property, including that of the banana plants, had been done by Abajon. On September 30, 1982, upon motion of

the defense in open court pursuant to PD 1038, the trial court ordered the referral of the case to the Regional Office No. VII of the then MAR for a

preliminary determination of the relationship between the parties. As a result, the Regional Director of MAR Regional VII, issued a

certification 1 dated January 24, 1983, stating that said Criminal Case No. 4003 was not proper for hearing on the bases of the following findings:

That herein accused is a bona-fide tenant of the land owned by the complaining witness, which is devoted to bananas;

That this case is filed patently to harass and/or eject the tenant from his farmholding, which act is prohibited b law; and

That this arose out of or is connected with agrarian relations.

From the said certification, the petitioner appealed to the then MAR, now the respondent DAR. Acting on said appeal, the respondent DAR,

through its then Minister Conrado Estrella, reversed the previous certification in its Order 2 of February 3, 1986, declaring Criminal Case No. 4003 as

proper for trial as "the land involved is a residential lot consisting of only 60 square meters whereon the house of the accused is constructed and

within the industrial zone of the town as evinced from the Certification issued by the Zoning Administrator of Talisay, Cebu."

Upon motion for reconsideration filed by Abajon, the respondent DAR, through its new Minister, herein respondent Heherson Alvarez, issued

an Order 3 dated November 15, 1986, setting aside the previous Order dated February 3, 1986, and certifying said criminal case as not proper for

trial, finding the existence of a tenancy relationship between the parties, and that the case was designed to harass the accused into vacating his

tillage.

In the summary investigation conducted by the DAR, the former landowner, Andrea Millenes, testified that Bienvenido Abajon dutifully gave

her 50% share of the produce of the land under his cultivation. The grandson of Andrea Millenes, Roger Millenes, corroborated the testimony of

the former, stating that he received said share from Abajon. Roger Millenes further testified that the present owners received in his presence a

bunch of bananas from the accused representing 1/2 or 50% of the two bunches of bananas gathered after Caballes had acquired the property. 4

From these factual findings, the DAR concluded that Abajon was a tenant of Andrea Millenes, the former owner, who had testified that she

shared the produce of the land with Abajon as tiller thereof. 5 Thus, invoking Sec. 10 of RA 3844, as amended, which provides that "[T]he

agricultural leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the

sale, alienation or transfer of the legal possession of the landholding"; and that "(I)n case the agricultural lessor sells, alienates or transfers the legal

possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the

agricultural lessor," the MAR ruled that "the new owners are legally bound to respect the tenancy, notwithstanding their claim that the portion

tilled by Abajon was small, consisting merely of three (3) meters wide and twenty (20) meters long, or a total of sixty (60) square meters." 6

Hence, its petition for certiorari alleging that:

I. Respondents DAR and Hon. Heherson T. Alvarez committed "grave abuse of power and discretion amounting to lack of jurisdiction"

in holding that private respondent Abajon is an agricultural tenant even if he is cultivating only a 60-square meter (3 x 20 meters) portion

of a commercial lot of the petitioner.

II. Public respondents gravely erred in holding that Criminal Case No. 4003 is not proper for trial and hearing by the court. 7

We hold that the private respondent cannot avail of the benefits afforded by RA 3844, as amended. To invest him with the status of a tenant is

preposterous.

Section 2 of said law provides:

It is the policy of the State:

(1) To establish cooperative-cultivatorship among those who live and work on the land as tillers, owner-cultivatorship and the economic family-

size farm as the basis of Philippine agriculture and, as a consequence, divert landlord capital in agriculture to industrial development;

xxx xxx xxx

RA 3844, as amended, defines an economic family-size farm as "an area of farm land that permits efficient use of labor and capital resources of

the farm family and will produce an income sufficient to provide a modest standard of living to meet a farm family's needs for food, clothing,

shelter, and education with possible allowance for payment of yearly installments on the land, and reasonable reserves to absorb yearly

fluctuations in income." 8

The private respondent only occupied a miniscule portion (60 square meters) of the 500-square meter lot. Sixty square meters of land planted

to bananas, camote, and corn cannot by any stretch of the imagination be considered as an economic family-size farm. Surely, planting camote,

bananas, and corn on a sixty-square meter piece of land can not produce an income sufficient to provide a modest standard of living to meet the

farm family's basic needs. The private respondent himself admitted that he did not depend on the products of the land because it was too small,

and that he took on carpentry jobs on the side. 9 Thus, the order sought to be reviewed is patently contrary to the declared policy of the law stated

above.

The DAR found that the private respondent shared the produce of the land with the former owner, Andrea Millenes. This led, or misled, the

public respondents to conclude that a tenancy relationship existed between the petitioner and the private respondent because, the public

respondents continue, by operation of Sec. 10 of R. A. 3844, as amended, the petitioner new owner is subrogated to the rights and substituted to

the obligations of the supposed agricultural lessor (the former owner).

We disagree.

The essential requisites of a tenancy relationship are:

1. The parties are the landowner and the tenant;

2. The subject is agricultural land;

3. There is consent;

4. The purpose is agricultural production;

5. There is personal cultivation; and

6. There is sharing of harvests.

All these requisites must concur in order to create a tenancy relationship between the parties. The absence of one does not make an occupant

of a parcel of land, or a cultivator thereof, or a planter thereon, a de jure tenant. This is so because unless a person has established his status as

a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy

laws. 10

Therefore, the fact of sharing alone is not sufficient to establish a tenancy relationship. Certainly, it is not unusual for a landowner to accept

some of the produce of his land from someone who plants certain crops thereon. This is a typical and laudable provinciano trait of sharing

or patikim, a native way of expressing gratitude for favor received. This, however, does not automatically make the tiller-sharer a tenant thereof

specially when the area tilled is only 60, or even 500, square meters and located in an urban area and in the heart of an industrial or commercial

zone at that. Tenancy status arises only if an occupant of a parcel of land has been given its possession for the primary purpose of agricultural

production. The circumstances of this case indicate that the private respondent's status is more of a caretaker who was allowed by the owner out

of benevolence or compassion to live in the premises and to have a garden of some sort at its southwestern side rather than a tenant of the said

portion.

Agricultural production as the primary purpose being absent in the arrangement, it is clear that the private respondent was never a tenant of

the former owner, Andrea Millenes. Consequently, Sec. 10 of RA of 3844, as amended, does not apply. Simply stated, the private respondent is not

a tenant of the herein petitioner.

Anent the second assignment of error, the petitioner argues that since Abajon, is not an agricultural tenant, the criminal case for malicious

mischief filed against him should be declared as proper for trial so that proceedings in the lower court can resume.

Notwithstanding our ruling that the private respondent is not a tenant of the petitioner, we hold that the remand of the case to the lower

court for the resumption of the criminal proceedings is not in the interest of justice. Remand to the Municipal Court of Talisay, Cebu, would not

serve the ends of justice at all, nor is it necessary, because this High Tribunal is in a position to resolve with finality the dispute before it. This Court,

in the public interest, and towards the expeditious administration of justice, has decided to act on the merits and dispose of the case with finality. 11

The criminal case for malicious mischief filed by the petitioner against the private respondent for allegedly cutting down banana trees worth a

measly P50.00 will take up much of the time and attention of the municipal court to the prejudice of other more pressing cases pending therein.

Furthermore, the private respondent will have to incur unnecessary expenses to finance his legal battle against the petitioner if proceedings in the

court below were to resume. Court litigants have decried the long and unnecessary delay in the resolution of their cases and the consequent costs

of such litigations. The poor, particularly, are victims of this unjust judicial dawdle. Impoverished that they are they must deal with unjust legal

procrastination which they can only interpret as harassment or intimidation brought about by their poverty, deprivation, and despair. It must be

the mission of the Court to remove the misperceptions aggrieved people have of the nature of the dispensation of justice. If justice can be meted

out now, why wait for it to drop gently from heaven? Thus, considering that this case involves a mere bagatelle, the Court finds it proper and

compelling to decide it here and now, instead of further deferring its final termination.

As found by the DAR, the case for malicious mischief stemmed from the petitioner's affidavit stating that after she reprimanded private

respondent Abajon for harvesting bananas and jackfruit from the property without her knowledge, the latter, with ill intent, cut the banana trees

on the property worth about P50.00.

This was corroborated by a certain Anita Duaban, a friend of the petitioner, who likewise executed an affidavit to the effect that she saw the

private respondent indiscriminately cutting the banana trees. 12

The Revised Penal Code, as amended, provides that "any person who shall deliberately cause to the property of another any damage not

falling within the terms of the next preceding chapter shall be guilty of malicious mischief." 13

The elements of the crime of malicious mischief are:

1. The offender deliberately caused damage to the property of another;

2. The damage caused did not constitute arson or crimes involving destructions.

3. The damage was caused maliciously by the offender.

After a review of the facts and circumstances of this case, we rule that the aforesaid criminal case against the private respondent be dismissed.

The private respondent can not be held criminally liable for malicious mischief in cutting the banana trees because, as an authorized occupant

or possessor of the land, and as planter of the banana trees, he owns said crops including the fruits thereof. The private respondent's possession of

the land is not illegal or in bad faith because he was allowed by the previous owners to enter and occupy the premises. In other words, the private

respondent worked the land in dispute with the consent of the previous and present owners. Consequently, whatever the private respondent

planted and cultivated on that piece of property belonged to him and not to the landowner. Thus, an essential element of the crime of malicious

mischief, which is "damage deliberately caused to the property of another," is absent because the private respondent merely cut down his own

plantings. prcd

WHEREFORE, the Order of public respondents dated November 15, 1986 is SET ASIDE and Criminal Case No. 4003, is hereby DISMISSED. Let a

copy of this decision be sent to the Municipal Trial Court of Talisay, Cebu for appropriate action. This Decision is IMMEDIATELY EXECUTORY.

No costs.

SO ORDERED.c. Hilario vs. IAC (G.R. No. 70736)

This is a petition for review on certiorari of the Court of Appeals' decision declaring Salvador Baltazar a leasehold tenant entitled to security of

tenure on a parcel of land consisting of 1,740 square meters.

On January 13, 1981, Salvador Baltazar filed a verified complaint with the Court of Agrarian Relations, Branch VI at Baliuag, Bulacan alleging

that since January, 1955 he had been in continuous possession as a share tenant of a parcel of land with an area of about 2 hectares situated in San

Miguel, Bulacan, which was previously owned by one Socorro Vda. de Balagtas; that on or about December 27, 1980, and thereafter, the spouses

Hilario began to threaten him to desist from entering and cultivating a portion of the aforesaid land with an area of 4,000 square meters and

otherwise committed acts in violation of his security of tenure; that the Hilarios were contemplating the putting up of a fence around the said

portion of 4,000 square meters and that unless restrained by the court, they would continue to do so to his great irreparable injury.

Baltazar claims that he became a tenant of Socorro P. Vda. de Balagtas on the latter's two hectare landholding located at San Juan, San Miguel,

Bulacan by virtue of a "Kasunduan" executed between them on January 8, 1979. He states that he erected his house and planted "halaman," the

produce of which was divided at 70-30 and 50-50 (sic) in his favor. After the death of Socorro P. Vda. de Balagtas, he allegedly gave the share

pertaining to the landowner to her daughter Corazon Pengzon. It was only in December, 1980 that he came to know that a portion of the 2

hectares or 4,000 square meters is already owned by the Hilarios.

On the other hand, the petitioners aver that they acquired the landholding of 4,000 square meters from the Philippine National Bank (PNB)

after it had been foreclosed by virtue of a deed of sale executed between Bonifacio Hilario and the PNB. The former owner Corazon Pengzon

testified that she owned only two lots — Lot 427-B with an area of 841 square meters and Lot 427-C with an area of 899 square meters with a total

area of 1,740 square meters. The other 2 lots were owned by Ruben Ocampo and Juan Mendoza. She further testified that in 1964 at the time of

the partition of the property, she declared the property for classification purposes as "bakuran" located in the Poblacion and had no knowledge

that there were other things planted in it except bananas and pomelos.

On November 27, 1981, the Court of Agrarian Relations (CAR) in determining whether or not respondent Baltazar is the tenant of the

petitioners ruled that the land in question is not an agricultural landholding but plain "bakuran," hence, Baltazar is not a tenant on the land.

On January 30, 1982, the Court of Appeals, however, remanded the case to the lower court for further proceedings on the ground that the

findings of the Court of Agrarian Relations (CAR) were not supported by substantial evidence.

In compliance with the order of the Court of Appeals, the CAR admitted additional evidence.

On December 19, 1983, the CAR admitted the petitioners' third party complaint filed with leave against the Philippine National Bank (PNB)

which states that in the event that judgment would be rendered against them under the original complaint, the PNB must contribute, indemnify,

and reimburse the spouses the full amount of the judgment.

On the basis of the parties' and their witnesses' affidavits containing detailed narrations of facts and documentary exhibits which served as

their direct testimonies pursuant to PD 946, the CAR found that there was no tenancy relationship existing between Baltazar and the former

owner, Corazon Pengzon. The dispositive portion of the decision reads:

"WHEREFORE, judgment is hereby rendered declaring plaintiff not to be a tenant on the landholding described in the complaint and ordering his

ejectment therefrom.

"The third-party complaint is hereby dismissed for lack of merit." (pp. 25-26, Rollo)

Again, respondent Salvador Baltazar appealed to the then Intermediate Appellate Court (IAC).

The IAC, however, reversed the decision of the CAR and held that:

". . . [T]he decision appealed from is hereby SET ASIDE, and another one entered declaring plaintiff-appellant a leasehold tenant entitled to security

of tenure on the land in question consisting of 1,740 square meters. Costs against defendants-appellees." (p. 31, Rollo).

Consequently, the spouses Hilarios filed this petition for review making the following assignments of errors:

I. THE INTERMEDIATE APPELLATE COURT ERRED IN DISTURBING THE FINDINGS OF FACTS AND DECISION OF THE COURT OF AGRARIAN

RELATIONS (CAR) WHICH IS SUPPORTED BY SUBSTANTIAL EVIDENCE.

II. THE INTERMEDIATE APPELLATE COURT ERRED IN SUBSTITUTION (SIC) THE FINDINGS OF FACTS OF CAR, OF ITS OWN FINDINGS.

III. THE INTERMEDIATE APPELLATE COURT ERRED IN NOT AFFIRMING THE DECISION OF CAR, FINDING THE LOTS IN QUESTION WITH AN AREA OF

1,740 SQUARE METERS AS RESIDENTIAL LOT AND PRIVATE RESPONDENT NOT TO BE A TENANT.

We agree with the respondent court when it stated that it can affirm on appeal the findings of the CAR only if there is substantial evidence to

support them. However, after a careful consideration of the records of the case, we find no valid reason to deviate from the findings of the CAR.

The evidence presented by the petitioners is more than sufficient to justify the conclusion that private respondent Salvador Baltazar is not a tenant

of the landholding in question.

Salvador Baltazar claims: that he is working on the land in question pursuant to a "kasunduan" executed between him and Socorro Balagtas.

The contract covers a two-hectare parcel of land. The disputed landholding is only 4,000 square meters more or less, although Baltazar claims that

this area is a portion of the two hectares in the contract. He testified that sometime in 1965, he relinquished 1.5 hectares of the two hectares

subject of the "kasunduan" to Nemesio Ocampo, Juan Mendoza, Miguel Ocampo and Miguel Viola and what remained under his cultivation was

1/2 hectare owned by Corazon Pengson. He stated that when Socorro Balagtas died, no new contract was executed. However, he insists that the

old contract was continued between Corazon Pengson and himself. (Rollo, p. 23).

This claim is controverted by the testimony of Corazon Pengson herself which we quote as follows:

"Q After the death of your mother in 1965, what step, if any, have you taken, regarding this subject

landholding or after the death of your mother how did you —

"Q . . . administer this landholding in 1963, 1964, 1965, 1966, etc?

"A What I did is to fix the title of ownership, sir.

COURT:

"Q What else?

"A None other, Your Honor.

"Q After the death of your mother in 1962, have you seen Mr. Salvador Baltazar in this landholding in

question?

"A Yes, Your Honor.

"Q What was he doing?

WITNESS:

"A We are neighbors, Your Honor, sometimes he visits and goes to our place and we used to meet

there, Your Honor.

"Q What was the purpose of his visit and your meeting in this landholding?

"A Sometimes when he visits our place he tells us that there are some bananas to be harvested and

sometimes there are other fruits, your Honor.

"Q You mean to say he stays in this subject landholding consisting of 7,000 square meters?

"A After the survey it turned out —

"A . . . that he is occupying another lot which I learned that property does not belong to us, Your Honor.

"Q What was your arrangement regarding his stay in that landholding which you don't own?

"A He said that he had a contract with my late mother which I don't know; in order not to cause any

trouble because I will be bothered in my business, I told him to continue, Your Honor.

"Q What do you mean when you —

COURT:

(continuing)

. . . told him to continue?

"A What I mean to say is that he can stay there although I don't understand the contract with my

mother, Your Honor.

"Q Was he paying rentals for his stay in that lot?

"A No, Your Honor" (T.S.N., pp. 15-19, hearing of August 5, 1981).

Corazon Pengson further explained that she did not receive any share from the produce of the land from 1964 up to the filing of the case and

she would not have accepted any share from the produce of the land because she knew pretty well that she was no longer the owner of the lot

since 1974 when it was foreclosed by the bank and later on purchased by the spouses Hilarios.

We note the CAR's finding:

"Tenancy relationship is indivisible. The two-hectare land subject of plaintiff's alleged contract with Socorro Balagtas having been parcelled into

seven (7) and possession thereof relinquished/surrendered in 1965 results in the termination of plaintiff's tenancy relationship with the previous

owner/landholder. Such being the case, he cannot now claim that the landholding in question consisting of 4,000 square meters, more or less, is

being cultivated by him under the old contract. The owner thereof Corazon Pengson has no tenancy relationship with him (plaintiff). (p. 25, Rollo)

From the foregoing, it is clear that Corazon Pengson did not give her consent to Baltazar to work on her land consisting of only 1,740 square

meters. We agree with the CAR when it said:

"The law accords the landholder the right to initially choose his tenant to work on his land. For this reason, tenancy relationship can only be created

with the consent of the true and lawful landholder though lawful means and not by imposition or usurpation. So the mere cultivation of the land by

usurper cannot confer upon him any legal right to work the land as tenant and enjoy the protection of security of tenure of the law (Spouses

Tiongson v. Court of Appeals, 130 SCRA 482)" (Ibid).

And in the case of Tuazon v. Court of Appeals (118 SCRA 484), this Court had the occasion to explain:

xxx xxx xxx

". . . Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It is also a

legal relationship. The intent of the parties, the understanding when the farmer is installed, and, as in this case, their

written agreements, provided these are complied with and are not contrary to law, are even more important."

The respondent court ruled that the fact that the land in question is located in the poblacion does not necessarily make it residential.

The conclusion is purely speculative and conjectural, We note that the evidence presented by the petitioners sufficiently establishes that the

land in question is residential and not agricultural.

As we stated in Tiongson v. Court of Appeals (supra) "the key factor in ascertaining whether or not there is a landowner-tenant relationship in

this case is the nature of the disputed property."

The records show that the disputed property, only 1,740 square meters in area, is actually located in the poblacion of San Miguel, Bulacan not

far from the municipal building and the church. It is divided into two lots — Lot 427-B with an area of 841 square meters and Lot 427-C with an area

of 899 square meters. Two other lots which the respondent claims to cultivate as "tenant" were originally owned by Ruben Ocampo and Juan

Mendoza, not Corazon Pengson, through whom the respondent traces his alleged tenancy rights.

Respondent Baltazar is a full-time government employee working in the Bureau of Plant Industry.

The disputed lots were acquired at a foreclosure sale from the Philippine National Bank. They were purchased as residential lots and the deed

of sale describes them as "residential." The inspection and appraisal report of the PNB classified the land as residential. The declaration of real

property on the basis of which taxes are paid and approved by the Acting Provincial Assessor of Bulacan classifies the land as residential. The tax

declarations show that the 841 square meter lot is assessed for tax purposes at P25,236.00 while the 899 square meter lot is assessed at

P26,920.00. The owner states that the land has only bananas and pomelos on it. But even if the claim of the private respondent that some corn was

planted on the lots is true, this does not convert residential land into agricultural land.

The presumption assumed by the appellate court, that a parcel of land which is located in a poblacion is not necessarily devoted to residential

purposes, is wrong. It should be the other way around. A lot inside the poblacion should be presumed residential, or commercial or non-agricultural

unless there is clearly preponderant evidence to show that it is agricultural.

The respondent court also failed to note that the alleged tenant pays no rental or share to the landowners. Baltazar made a vague allegation

that he shared 70-30 and 50-50 of the produce in his favor. The former owner flatly denied that she ever received anything from him.

The requirements set by law for the existence of a tenancy relationship, to wit: (1) The parties are the landholder and tenant; (2) The subject is

agricultural land; (3) The purpose is agricultural production; and (4) There is consideration; have not been met by the private respondent.

We held in Tiongson v. Court of Appeals, cited above that:

"All these requisites are necessary in order to create tenancy relationship between the parties and the absence of one or more requisites do not

make the alleged tenant a de facto tenant as contradistinguished from a de jure tenant. This is so because unless a person has established his status

as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy

laws. . . ." (emphasis supplied).

WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals is hereby REVERSED and SET ASIDE and the decision of

the Court of Agrarian Relations is AFFIRMED.

SO ORDERED.d. Qua vs CA (G.R. No. 95318)

This case deals with the issue of whether or not private respondents possess the status of agricultural tenants entitled to, among others, the use

and possession of a home lot.

Respondent Court of Appeals, 1 in denying due course to the petition for certiorari filed by petitioner, stated the antecedents of this case in the

lower courts as follows:

. . . [O]n July 17, 1986, petitioner Lourdes Peña Qua filed a complaint for ejectment with damages against private respondents claiming that she is

the owner of a parcel of residential land, Lot No. 2099 of the Malinao Cadastre, situated at Poblacion, Tinapi, Malinao, Albay, with an area of 346

square meters, which is registered in her name under TCT T-70368; that inside the land in question is an auto repair shop and three houses, all

owned by private respondents; and that said respondents' stay in the land was by mere tolerance and they are in fact nothing but squatters who

settled on the land without any agreement between her (sic), paying no rents to her nor realty taxes to the government.

In their answer, private respondent Carmen Carillo, surviving spouse of the late Salvador Carillo (and [respectively the] mother and mother-in-law

of the other [private] respondents), alleged that the lot in question is a farm lot [home lot] because she and her late husband were tenants of the

same including the two other lots adjoining the lot in question, Lots No. 2060 and 2446, which also belong to petitioner; that as tenants, they could

not just be ejected without cause; that it was not petitioner who instituted them as tenants in the land in question but the former owner,

Leovigildo Peña, who permitted the construction of the auto repair shop, the house of Carmen Carillo and the other two houses.

After trial, the Municipal Court [found private respondents to be mere squatters and] rendered judgment 2 ordering . . . [them] to vacate and

remove their houses and [the] auto repair shop from the lot in question and to pay the petitioner attorney's fees and a monthly rental of P200.00.

On appeal to respondent [Regional Trial] Court, the judgment was modified by ordering the case dismissed [insofar as] Carmen Carillo [was

concerned being qualified as an agricultural tenant and] declaring that the home lot and her house standing thereon should be respected. 3

Believing that even private respondent Carmen Carillo does not qualify as an agricultural tenant, petitioner pursues her cause before this

forum citing only one ground for the entertainment of her petition, to wit:

THAT PUBLIC RESPONDENT [Court of Appeals] COMMITTED GRAVE ABUSE OF DISCRETION AND ACTED CONTRARY TO THE ADMITTED FACTS AND

APPLICABLE JURISPRUDENCE, AMOUNTING TO LACK OF JURISDICTION, FOR DENYING DUE COURSE TO THE PETITIONER'S CRY FOR JUSTICE AND

FOR DISMISSING THE PETITION. 4

The Court agrees and finds that respondent Court of Appeals committed a grave abuse of discretion in dismissing the petition for review of the

decision of the Regional Trial Court, the same being replete with inconsistencies and unfounded conclusions. Because of this jurisdictional issue

raised by petitioner, the Court hereby treats this petition as a special civil action for certiorari under Rule 65 of the Rules of Court. 5

The Regional Trial Court 6 made the following observations:

The land in question is a measly three hundred forty six (346) square meters and adjoining another two (2) lots which are separately titled having

two thousand four hundred thirteen (2,413) square meters and eight thousand two hundred ninety eight (8,298) square meters — the three (3)

lots having a total area of eleven thousand fifty seven (11,057) square meters, more or less, or over a hectare of land owned by the plaintiff or by

her predecessors-in-interest.

In the 346 square meters lot stand (sic) four (4) structures, [to wit]: an auto repair shop, a house of [private respondent] Carmen Carillo and two (2)

other houses owned or occupied by the rest of the [private respondents] . . .; in other words, the [private respondents] almost converted the entire

area as their homelot for their personal aggrandizement, believing that they are all tenants of the [petitioner]

Claimed, the defendants planted five hundred (500) coconut trees and only fifty (50) coconut trees survived in the land in question and/or in the

entire area of the three lots. Such an evidence (sic) is very untruthful, unless it is a seed bed for coconut trees as the area is so limited. But found

standing in the area in question or in the entire three (3) lots are only seven (7) coconut trees, the harvest of which is [allegedly] 2/3 share for the

[petitioner] and the 1/3 share for the [private respondents].The share, if ever there was/were, could not even suffice [to pay] the amount of taxes of

the land (sic) paid religiously by the [petitioner] yearly. 7 (Emphasis supplied.)

It is clear from the foregoing that the source of livelihood of private respondents is not derived from the lots they are allegedly tenanting. This

conclusion is further supported by private respondent Carmen Carillo's assertion that the auto repair shop was constructed with the consent of

petitioner's predecessor-in-interest for whom her husband served as a driver-mechanic. 8

From private respondents' manner of caring for the lots, it is also apparent that making the same agriculturally viable was not the main

purpose of their occupancy, or else they should have immediately replanted coconut trees in place of those that did not survive. Indeed, the

location of their auto repair shop being near the poblacion and along the highway, private respondents chose to neglect the cultivation and

propagation of coconuts, having earned, through the automobile repair shop, more than enough not only for their livelihood but also for the

construction of two other dwelling houses thereon. It is also intimated by the Regional Trial Court that there is no direct evidence to confirm that

the parties herein observed the sharing scheme allegedly set-up between private respondents and petitioner's predecessor-in-interest.

Notwithstanding the foregoing indicia of a non-agricultural tenancy relationship, however, the Regional Trial Court decided in favor of private

respondent Carmen Carillo and ruled, thus: cdll

In View of the Foregoing, and Premises considered, the Court renders judgment:

1. Ordering defendants, namely: Eduardo Carillo, Josephine P. Carillo, Rebecca Carillo, Maria Cepres, Cecilio Cepres and Salvador Carillo, Jr., to

vacate and remove their two (2) houses and the auto repair shop from the premises in question, and restoring the area to the lawful owner, the

herein plaintiff;

2. Ordering said six defendants to pay the plaintiff jointly and severally the amount of Four Thousand (P4,000.00) Pesos as attorney's fees and

litigation expenses;

3. Ordering said six defendants to pay plaintiff the sum of One Hundred Seventy One Pesos and Thirty Six Centavos (P171.36) monthly, for the

use of the area in question, commencing July 17, 1986 the date the plaintiff filed this action in Court, up to the time the defendants vacate the area

in question and restore the same to the plaintiff peacefully.

4. And ordering said six (6) defendants to pay the costs proportionately.

The case against defendant, Carmen Carillo, is hereby ordered DISMISSED. The home lot and where her house stands is respected. And without

pronouncement as to its costs (sic).

IT IS SO ORDERED. 9 (Emphasis supplied.).

Without explaining why, the Regional Trial Court chose not to believe the findings of the Municipal Circuit Trial Court and instead, adopted the

recommendation of the Regional Director for Region V, acting for the Secretary of the Department of Agrarian Reform, without making separate

findings and arriving at an independent conclusion as to the nature of the relationship between the parties in this case. This is evident in the

following excerpt of the judgment of the Regional Trial Court:

The dispositive part of the Resolution of this Civil Case No. T-1317 for Ejectment with Damages, Referral Case No. 880054 states and is quoted

verbatim:

"WHEREFORE, premises considered, we are constrained to issue the following resolutions:

1) Certifying this case as NOT PROPER FOR TRIAL in as far as the homelot and house built thereon by the spouses

Carmen Carillo (sic);

2) Advising the plaintiff to institute proper cause of action in as far as the auto repair shop and the two (2)

houses erected on her landholdings by the children of tenant-farmer Salvador Carillo since they appear as not the lawful

tenants thereat.

SO RESOLVED.

xxx xxx xxx

From the foregoing dispositive part of the resolution penned down by the Regional Director, it defines and explains the status of each of the

defendants. 10

Time and again, the Court has ruled that, as regards relations between litigants in land cases, the findings and conclusions of the Secretary of

Agrarian Reform, being preliminary in nature, are not in any way binding on the trial courts 11 which must endeavor to arrive at their own

independent conclusions.

Had the Regional Trial Court hearkened to this doctrine, proceeded to so conduct its own investigation and examined the facts of this case, a

contrary conclusion would have been reached, and the findings of the Municipal Circuit Trial Court, sustained, particularly when the circumstances

obtaining in this case are examined in the light of the essential requisites set by law for the existence of a tenancy relationship, thus: (1) the parties

are the landowner and the tenant; (2) the subject is agricultural land; (3) the purpose is agricultural production; and (4) there is consideration. 12 It

is also understood that (5) there is consent to the tenant to work on the land, that (6) there is personal cultivation by him and that the

consideration consists of sharing the harvest. 13

It is contended by petitioner that the parcel of land occupied by private respondents, Lot No. 2099, with an area of only 346 square meters is

residential in nature, being situated near thepoblacion of Malinao, Albay, and as evidenced by the tax declaration obtained by petitioner to this

effect. Indeed, the municipal trial court judge ordered the ejectment of the private respondents on this basis. On the other hand, private

respondents aver that the lot is agricultural being bounded by two other agricultural lands planted to coconuts titled in the name of petitioner and

all three parcels being cultivated by them.

The Court is not prepared to affirm the residential status of the land merely on the basis of the tax declaration, in the absence of further

showing that all the requirements for conversion of the use of land from agricultural to residential prevailing at the start of the controversy in this

case have been fully satisfied. 14

Be that as it may and recognizing the consent to the presence of private respondents on the property as given by petitioner's predecessor-in-

interest, the situation obtaining in this case still lacks, as discussed earlier, three of the afore-enumerated requisites, namely: agricultural

production, personal cultivation and sharing of harvests.

The Court reiterates the ruling in Tiongson v. Court of Appeals, 15 that

All these requisites are necessary in order to create tenancy relationship between the parties and the absence of one or more requisites do (sic) not

make the alleged tenant a de facto tenant as contradistinguished from a de jure tenant. This is so because unless a person has established his status

as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy

laws.

Under the foregoing, private respondent Carmen Carillo is not entitled to be considered an agricultural tenant. Therefore, she may be not

allowed the use of a home lot, a privilege granted by Section 35 of Republic Act No. 3844, as amended, in relation to Section 22 (3) of Republic Act

No. 1199, as amended, 16 only to persons satisfying the qualifications of agricultural tenants of coconut lands.

WHEREFORE, the petition is GRANTED. The decision of respondent Court of Appeals is hereby SET ASIDE and a new one is issued REINSTATING

the decision of the Municipal Circuit Trial Court of Malinao-Tiwi, Albay, Fifth Judicial Region dated 19 August 1987. No pronouncement as to costs.

SO ORDERED.e. Guerrero vs. CA (G.R. No. L-44570) – Cultivation

Whether or not a tenancy relationship exists between the parties Manuel Guerrero, et al and Apolinario Benitez, et al. as to determine their respective rights and obligations to one another is the issue in this petition to review the decision of the then Court of Appeals, now the Intermediate Appellate Court, which affirmed in toto the decision of the Court of Agrarian Relations in CAR Case No. 6793-NE (SA-Q) '73, the dispositive portion of which reads:

In view of all the foregoing, judgment is hereby rendered:

(1) ordering defendants-spouses Manuel and Maria Guerrero to reinstate plaintiff Apolinario Benitez to the 10-hectare portion of the 16-hectare coconut holding in question, located at Bo. San Joaquin, Maria Aurora Sub-province Quezon and to maintain said plaintiff in the peaceful possession and cultivation thereof, with all the rights accorded and obligations imposed upon him by law;

(2) ordering defendants Paulino and Rogelio both surnamed Latigay to vacate the said ten-hectare portion and deliver possession thereof to plaintiff Apolinario Benitez;

(3) ordering defendants-spouses Manuel and Maria Guerrero to pay damages to plaintiffs in the amount of P14,911.20 beginning from July, 1973 and to pay the same amount every year thereafter until plaintiff is effectively reinstated to the ten-hectare portion;

(4) denying plaintiff-tenants' prayer for reconstruction of the copra cottage: and

(5) ordering defendants-spouses Manuel and Maria Guerrero to pay plaintiff the amount of P200.00 by way of litigation expenses.

All other claims of the parties are denied. With costs against defendants-spouses.

The petitioners adopt the respondent court's findings of fact excepting, however, to its conclusion that tenancy relations exist between the petitioners and the respondents, thus:

In 1969, plaintiff Apolinario Benitez was taken by defendants- spouses Manuel and Maria Guerrero to take care of their 60 heads of cows which were grazing within their 21-hectare coconut plantation situated at Bo. San Joaquin, Maria Aurora, Subprovince of Aurora, Quezon. Plaintiff was allowed for that purpose to put up a hut within the plantation where he and his family stayed. In addition to attending to the cows, he was made to clean the already fruitbearing coconut trees, burn dried leaves and grass and to do such other similar chores. During harvest time which usually comes every three months, he was also made to pick coconuts and gather the fallen ones from a 16-hectare portion of the 21-hectare plantation. He had to husk and split the nuts and then process its meat into copra in defendants' copra kiln. For his work related to the coconuts, he shared 1/3 of the proceeds from the copra he processed and sold in the market. For attending to the cows he was paid P500 a year.

Sometime in the early part of 1973, plaintiff was refrained from gathering nuts from the 10-hectare portion of the 16-hectare part of the plantation from where he used to gather nuts. He felt aggrieved by the acts of defendants and he brought the matter to the attention of the Office of Special Unit in the Office of the President in Malacanang, Manila. This led to an execution of an agreement, now marked as Exh. D, whereby defendants agreed, among others, to let plaintiff work on the 16-hectare portion of the plantation as tenant thereon and that their relationship will be guided by the provisions of republic Act No. 1199. The Agricultural Tenancy Act of the Philippines.

Then in July, 1973, he was again refrained from gathering nuts from the 10-hectare portion of the plantation with threats of bodily harm if he persists to gather fruits therefrom. Defendant spouses, the Guerreros, then assigned defendants Rogelio and Paulino Latigay to do the gathering of the nuts and the processing thereof into copra. Defendants Guerreros also caused to be demolished a part of the cottage where plaintiff and his family lived, thus, making plaintiffs feel that they (defendants) meant business. Hence, this case for reinstatement with damages.

The lower court formulated four (4) issues by which it was guided in the resolution of the questions raised by the pleadings and evidence and we pertinently quote as follows:

(1) whether or not plaintiff is the tenant on the coconut landholding in question consisting of sixteen (16) hectares;

(2) In The affirmative, whether or not he was unlawfully dispossessed of ten (10) hectare thereof;

(3) Whether or not the parties are entitled to actual and moral damages, attorney's fees and litigation expenses.

This petition for review poses the following questions of law:

I

Whether or not with the passage of Presidential Decree 1038 only last October 21, 1976, Republic Act 6389 otherwise known as the Code of Agrarian Reforms has repealed in their entirety the Agricultural Tenancy Act (Republic Act 1199) and the Agricultural Reform Code (Republic Act 3844) abrogating or nullifying therefore all agricultural share tenancy agreements over all kinds of lands, as the one involved in the case at bar-over coconut plantation-and hence, the complaint below as well as the challenged decision by the courts below, based as they are on such share tenancy agreements, have lost their validity cessante ratio legis, cessat ipsa lex.

II

Assuming arguendo that said laws have not thus been repealed, is respondent Benitez hereunder the undisputed fact of the case as found by the courts below a share tenant within the purview of the said laws, i.e., Republic Acts 1199 and 3844, or a mere farmhand or farm worker as such relationship were extensively discussed in Delos Reyes vs. Espinelli, 30 SCRA 574. (Copied verbatim from Petition, p. 31- rollo)

Petitioner insists in this petition that Benitez was a mere farmhand or laborer who was dismissed as an employee from the landholding in question and not ousted therefrom as tenant. Whether a person is a tenant or not is basically a question of fact and the findings of the respondent court and the trial court are, generally, entitled to respect and non-disturbance.

The law defines "agricultural tenancy" as the physical possession by a person of land devoted to agriculture, belonging to or legally possessed by another for the purpose of production through the labor of the former and of the members of his immediate farm household in consideration of

which the former agrees to share the harvest with the latter or to pay a price certain or ascertainable, either in produce or in money, or in both (Section 3, Republic Act 1199, The Agricultural tenancy Act, as amended.)

With petitioner reference to this case, "share tenancy" exists whenever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land with the aid of labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant in proportion to their respective contributions (Sec. 4, RA 1199; Sec. 166(25) RA 3844, Agricultural Land Reform Code).

In contrast, a farmhand or agricultural laborer is "any agricultural salary or piece worker but is not limited to a farmworker of a particular farm employer unless this Code expressly provides otherwise, and any individual whose work has ceased as a consequence of, or in connection with, a current agrarian dispute or an unfair labor practice and who has not obtained a substantially equivalent and regular employment" (Sec. 166(15) RA 3844, Agricultural Land Reform Code).

The petitioners contend that the two courts below applied erroneous definitions of "tenancy" found in repealed laws. They assert that the Agricultural Tenancy Act and the Agricultural Land Reform Code have been superseded by the Code of Agrarian Reforms, Rep. Act 6389, which the trial court and the Court of Appeals failed to cite and apply.

There is no question that the latest law on land and tenancy reforms seeks to abolish agricultural share tenancy as the basic relationship governing farmers and landowners in the country.

On August 8, 1963, Republic Act 3844 abolished and outlawed share tenancy and put in its stead the agricultural leasehold system. On September 10, 1971, Republic Act 6389 amending Republic Act 3844 declared share tenancy relationships as contrary to public policy. On the basis of this national policy, the petitioner asserts that no cause of action exists in the case at bar and the lower court's committed grave error in upholding the respondent's status as share tenant in the petitioners' landholding.

The petitioners' arguments are regressive and, if followed, would turn back the advances in agrarian reform law. The repeal of the Agricultural Tenancy Act and the Agricultural Land Reform Code mark the movement not only towards the leasehold system but towards eventual ownership of land by its tillers. The phasing out of share tenancy was never intended to mean a reversion of tenants into mere farmhands or hired laborers with no tenurial rights whatsoever.

It is important to note that the Agricultural Tenancy Act (RA 1199) and the Agricultural Land Reform Code (RA 3844) have not been entirely repealed by the Code of Agrarian Reform (RA 6389) even if the same have been substantially modified by the latter.

However, even assuming such an abrogation of the law, the rule that the repeal of a statute defeats all actions pending under the repealed statute is a mere general principle. Among the established exceptions are when vested rights are affected and obligations of contract are impaired. (Aisporna vs. Court of Appeals, 108 SCRA 481).

The records establish the private respondents' status as agricultural tenants under the legal definitions.

Respondent Benitez has physically possessed the landholding continuously from 1969 until he was ejected from it. Such possession of longstanding is an essential distinction between a mere agricultural laborer and a real tenant within the meaning of the tenancy law (Moreno, Philippine Law Dictionary, 1972 Edition), a tenant being one who, has the temporary use and occupation of land or tenements belonging to another (Bouvier's Law Dictionary, Vol. II, p. 3254) for the purpose of production (Sec. 3, Republic Act 1199; delos Reyes vs. Espinelli, 30 SCRA 574). Respondent Benitez lives on the landholding. He built his house as an annex to the petitioner's copra kiln. A hired laborer would not build his own house at his expense at the risk of losing the same upon his dismissal or termination any time. Such conduct is more consistent with that of an agricultural tenant who enjoys security of tenure under the law.

Cultivation is another important factor in determining the existence of tenancy relationships. It is admitted that it had been one Conrado Caruruan, with others, who had originally cleared the land in question and planted the coconut trees, with the respondent coming to work in the landholding only after the same were already fruit bearing. The mere fact that it was not respondent Benitez who had actually seeded the land does not mean that he is not a tenant of the land. The definition of cultivation is not limited merely to the tilling, plowing or harrowing of the land. It includes the promotion of growth and the care of the plants, or husbanding the ground to forward the products of the earth by general industry. The raising of coconuts is a unique agricultural enterprise. Unlike rice, the planting of coconut seedlings does not need harrowing and plowing. Holes are merely dug on the ground of sufficient depth and distance, the seedlings placed in the holes and the surface thereof covered by soil. Some coconut trees are planted only every thirty to a hundred years. The major work in raising coconuts begins when the coconut trees are already fruitbearing. Then it is cultivated by smudging or smoking the plantation, taking care of the coconut trees, applying fertilizer, weeding and watering, thereby increasing the produce. The fact that respondent Benitez, together with his family, handles all phases of farmwork from clearing the landholding to the processing of copra, although at times with the aid of hired laborers, thereby cultivating the land, shows that he is a tenant, not a mere farm laborer. (delos Reyes vs. Espinelli, supra Marcelo vs. de Leon, 105 Phil. 1175).

Further indicating the existence of a tenancy relationship between petitioners and respondent is their agreement to share the produce or harvest on a "tercio basis" that is, a 1/3 to 2/3 sharing in favor of the petitioner-landowners. Though not a positive indication of the existence of tenancy relations perse the sharing of harvest taken together with other factors characteristic of tenancy shown to be present in the case at bar, strengthens the claim of respondent that indeed, he is a tenant. The case of delos Reyes vs. Espinelli (supra) clearly explains the matter thus:

The agricultural laborer works for the employer, and for his labor he receives a salary or wage, regardless of whether the employer makes a profit. On the other hand, the share tenant par ticipates in the agricultural produce. His share is necessarily dependent on the amount of harvest.

Hence, the lower court's computation of damages in favor of respondent based on the number of normal harvests. In most cases, we have considered the system of sharing produce as convincing evidence of tenancy relations.

The petitioners entered into an agreement on May 2, 1973 which in clear and categorical terms establishes respondent as a tenant, to wit:

AGREEMENT

This agreement entered into by and between Manuel Guerrero hereinafter referred to as the landowner and Apolinario Benitez hereinafter referred to as tenant.

xxx xxx xxx

The petitioners, however, contend that the word "tenant" in the aforequoted agreement was used to mean a hired laborer farm employee as understood agreed upon by the parties. The fact that their relationship would be guided by the provisions of Republic Act 1199 or the Agricultural Tenancy Act of the Philippines militates against such an assertion. It would be an absurdity for Republic Act 1199 to govern an employer-employee relationship. If as the petitioners insist a meaning other than its general acceptation had been given the word "tenant", the instrument should have so stated '. Aided by a lawyer, the petitioners, nor the respondent could not be said to have misconstrued the same. In clear and categorical terms, the private respondent appears to be nothing else but a tenant:

Finally, comes the admission by the petitioners' counsel of the respondent's status as tenant:

ATTY. ESTEBAN:

Q You said you are living at San Joaquin, who cause the sowing of the lumber you made as annex in the house?

ATTY. NALUNDASAN

Please remember that under the law, tenant is given the right to live in the holding in question. We admit him as tenant.

x x x x x x x x x

(Apolinario Benitez on Redirect, TSN, June 25, 1974, pp. 4950).

The respondent's status as agricultural tenant should be without question.

Once a tenancy relationship is established, the tenant has the right to continue working until such relationship is extinguished according to law.

The Agricultural Tenancy Act of 1954 (Republic Act 1199), the Agricultural Land Reform Code of 1963 (Republic Act 3844), the Code of Agrarian Reforms (Republic Act 6389) and Presidential Decree 1038 (Strengthening the Security of Tenure of Tenant Tillers in Non-Rice/Corn Producing Agricultural Lands) all provide for the security of tenure of agricultural tenants. Ejectment may be effected only for causes provided by law, to wit:

l) Violation or failure of the tenant to comply with any of the terms and conditions of the tenancy contract or any of the provisions of the Agricultural Tenancy Act;

2) The tenant's failure to pay the agreed rental or to deliver the landholder's share unless the tenant's failure is caused by a fortuitous event or force majeure;

3) Use by the tenant of the land for purposes other than that specified by the agreement of the parties;

4) Failure of the tenant to follow proven farm practices:

5) Serious injury to the land caused by the negligence of the tenant;

6) Conviction by a competent court of a tenant or any member of his immediate family or farm household of a crime against the landholder or a member of his immediate family. (Section 50, Rep. Act 1199).

None of the above causes exists in the case at bar. The respondent has been unlawfully deprived of his right to security of tenure and the Court of Agrarian Reforms did not err in ordering the reinstatement of respondent as tenant and granting him damages therefor.

Before we close this case, it is pertinent to reiterate that the respondent's right as share tenant do not end with the abolition of share tenancy. As the law seeks to "uplift the farmers from poverty, ignorance and stagnation to make them dignified, self-reliant, strong and responsible citizens ... active participants in nation-building", agricultural share tenants are given the right to leasehold tenancy as a first step towards the ultimate status of owner-cultivator, a goal sought to be achieved by the government program of land reform.

It is true that leasehold tenancy for coconut lands and sugar lands has not yet been implemented. The policy makers of government are still studying the feasibility of its application and the consequences of its implementation. Legislation still has to be enacted. Nonetheless, wherever it may be implemented, the eventual goal of having strong and independent farmers working on lands which they own remains. The petitioners' arguments which would use the enactment of the Agrarian Reform Code as the basis for setting back or eliminating the tenurial rights of the tenant have no merit.

WHEREFORE, the petition is DISMISSED for lack of merit. The decision of the appellate court is AFFIRMED. No costs.

SO ORDERED.B. Right of security of tenure

a. Talavera vs CA (G.R. No. 77830)

b. The Court is asked to examine whether or not the Court of Appeals committed reversible error in its finding that there was no voluntary surrender of the landholding in question on the part of respondent Laxamana as tenant.

c. This petition for review on certiorari assails the decision of the respondent appellate court which affirmed in toto the judgment rendered by the Regional Trial Court of the Third Judicial Region, Branch LXVI, Capas, Tarlac on July 21, 1986.

d. The dispositive portion of the trial court's decision reads:

e. WHEREFORE, judgment is hereby rendered in favor of the plaintiff and ordering the defendants:

f. (1) To reinstate Jose Laxamana as their tenant on the landholding in question;

g. (2) To pay him the sum of FIVE THOUSAND PESOS (P5,000.00) value of 50 cavans of palay at the rate of P100.00 per cavan as his share for the agricultural year 1984-85;

h. (3) To continue paying him the same amount as damages, every agricultural year thereafter until his actual reinstatement. (CA Decision, p. 2; Rollo, p. 16)

i. The facts pertinent to the case at bar are as follows:

j. On July 10, 1984, an action for recovery of possession was instituted by the private respondent against the petitioners over a parcel of agricultural land with an area of 21,081 square meters located at Brgy. Sto. Domingo 11, Sitio Tambo, Capas, Tarlac.

k. The complaint alleged, among others, that respondent Laxamana had been a bonafide tenant of the aforesaid parcel of land since 1958 until the petitioners took possession thereof sometime in 1984; that respondent Laxamana had been in continuous possession and cultivation of the said landholding since 1958 but the petitioners, for unknown reasons and without the knowledge of respondent Laxamana, planted palay thereon in 1984 through force and intimidation after plowing and harrowing were done by respondent Laxamana; and that due to the petitioners' illegal actions, respondent Laxamana suffered damages in the amount of P500.00 and the price equivalent to sixty-five (65) cavans of palay per agricultural year from the time of his dispossession until his reinstatement as tenant over the landholding in question.

l. In their answer, the petitioners counter-alleged, among others, that their tenancy relationship with respondent Laxamana was terminated pursuant to a document captioned "Casunduan" executed on March 30, 1973 whereby the latter sold his rights and interests

over the agricultural landholding under litigation for a consideration of P1,000.00; that respondent Laxamana was not actually a tenant of the petitioners and whatever tenancy rights the former had exercised over the landholding in question were voluntarily surrendered by him upon the execution of the aforesaid document; that respondent Laxamana had only himself to blame for the litigation expenses resulting from his baseless and patently frivolous complaint; and that respondent Laxamana was no longer entitled to the amount equivalent to 65 cavans of palay per agricultural year as claimed since he was no longer a tenant of the petitioners.

m. After trial, the private respondent obtained a favorable judgment from which the petitioners appealed to the respondent Court.

n. In a decision promulgated on March 3, 1987, the Court of Appeals affirmed the lower court's holding that the Casunduan even if assumed to be valid did not constitute "voluntary surrender" as contemplated by law, hence, respondent Laxamana ought to be reinstated as tenant of the petitioners' landholding.

o. Consequently, this petition was filed to seek a reversal of the decision of the appellate court. According to the petitioners, the Court of Appeals erred:

p. I

q. IN HOLDING THAT PRIVATE RESPONDENT DID NOT VOLUNTARILY SURRENDER THE LANDHOLDING IN QUESTION.

r. II

s. IN OVERLOOKING THE PROBATIVE VALUE OF A WRITTEN INSTRUMENT ENTITLED 'CASUNDUAN' WHICH SHOWS VOLUNTARY SURRENDER. (Rollo, p. 4)

t. The petitioners bolster their claim that respondent Laxamana is no longer their tenant over the landholding in question by invoking the rule on parol evidence with respect to the probative value of the "Casunduan" executed by respondent Laxamana on March 30, 1973. They further argue that the execution of the "Casunduan" clearly showed the intention of respondent Laxamana to surrender whatever rights he had as tenant over the said landholding. Hence, we are presented with the issue of whether or not by virtue of the "Casunduan" dated March 30, 1973, respondent Laxamana as tenant is deemed to have surrendered voluntarily the subject landholding to its owners — the petitioners.

u. The evidence on record and the petitioners' arguments are not enough to overcome the rights of the private respondent provided in the Constitution and agrarian statutes which have been upheld by this Court.

v. The very essence of agricultural tenancy lies in the cardinal rule that an agricultural tenant enjoys security of tenurial status. The Code of Agrarian Reforms of the Philippines (Republic Act No. 3844, as amended) specifically enumerates the grounds for the extinguishment of agricultural leasehold relations. Section 8 of the said Code provides:

w. Extinguishment of agricultural leasehold relation. — The agricultural leasehold relation established under this Code shall be extinguished by:

x. (1) Abandonment of the landholding without the knowledge of the agricultural lessor;

y. (2) Voluntary surrender of the land holding by the agricultural lessee, written notice of which shall be served three months in advance; or

z. (3) Absence of the persons under Section rune to succeed to the lessee, in the event of death or permanent incapacity of the lessee.

aa. The petitioners invoke voluntary surrender under Paragraph 2 of Section 8 as the reason for the end of the tenancy relationship.

bb. Voluntary surrender, as a mode of extinguishment of tenancy relations, does not require any court authorization considering that it involves the tenant's own volition. (see Jacinto v. Court of Appeals, 87 SCRA 263 [1978]). To protect the tenant's right to security of tenure, voluntary surrender, as contemplated by law, must be convincingly and sufficiently proved by competent evidence. The tenant's intention to surrender the landholding cannot be presumed, much less determined by mere implication. Otherwise, the right of a tenant to security of tenure becomes an illusory one.

cc. Standing by itself, the March 30, 1973 Casunduan indicates, as contended by the petitioners, a voluntary relinquishment of tenancy rights. It states that on his own initiative, Jose Laxamana went to the Talaveras and requested that he be allowed to sell his "puesto cung asican" or "the plot I am farming" to the couple. A subscribing witness, Ermela Lumanlan testified on the voluntary sale of tenancy rights for P1,000.00, her signing as a witness at the bottom of the contract, and Laxamana's signing the document.

dd. The argument of the private respondent that under Section 28 of the Agrarian Reform Code, a voluntary surrender to be valid must be "due to circumstances more advantageous to him and his family" is double-edged. There appears no question that Laxamana needed money to pay for the expenses incident to the illness of his wife which led to her death. The money was to his advantage.

ee. The basic issue in this case is-what did Laxamana give up in return for the P1,000.00? The case is marked by poor handling at the trial stage and it is not clear whether or not the P1,000.00 was a result of the usual paternalistic arrangements between landlords and tenants where the latter meekly approach the landlords in their hours of need or something else.

ff. In the first place, the agreement was prepared by petitioner Visitacion A. Talavera. Laxamana could hardly sign his own name. He was clearly at a disadvantage in the execution of the contract and the wording of the agreement. The intention to give up the landholding must be gleaned from evidence in addition to the document which was signed by an ignorant and illiterate peasant in an hour of emotional stress and financial need.

gg. Second, and most important, Laxamana continued to work on the farm from 1973 up to 1984 when the petitioners ejected him. As stated by the appellate court, why did it take the petitioners more than ten years to enforce the Casunduan?

hh. The Talaveras claim that they cultivated the land themselves from 1973 to 1984 when the complaint was filed. This claim is belied by Exhibits A and B. In Exhibit A, barangay captain Francisco Manayang reports to the team leader of the Ministry of Agrarian Reform that, per his own personal knowledge, Jose Laxamana has been tilling the disputed land since 1958. Exhibit B is an affidavit to the same effect by Manayang, Mr. Porfirio Manabat who is president of the Agrarian Reform Beneficiaries Association, and a certain Romeo dela Cruz all of whom are residents of the barangay where the land is located. Significantly, Laxamana is a resident of Sitio Tambo, Barangay Sto. Domingo II where the disputed land is situated while the Talaveras reside in another barangay, Arangureng, of Capas, Tarlac. We see no reason why the factual findings of the trial court and the appellate court should be reversed insofar as the continuous cultivation from 1973 to 1984 is concerned.

ii. Third, it is not shown why Laxamana should voluntarily give up his sole source of livelihood even if he needed money to pay off his debts. Or what he did from 1973 to 1984 if the claim of the Talaveras that they worked the land themselves is correct. We are more inclined to believe that Laxamana was forced by circumstances to sign something he did not fully understand and then went right back to the farm and continued to work on it until 1984.

jj. It is true that Cristobal Gamido, Jr., officer-in-charge of the Agrarian Reform Team issued on May 8, 1986 a certification that the contested land is not tenanted. However, the basis for the certification whether or not Mr. Gamido merely read the Casunduan literally is not shown. It cannot overcome the more convincing evidence of persons actually residing where the land is located.

kk. Tenancy relations cannot be bargained away except for the strong reasons provided by law which must be convincingly shown by evidence in line with the State's policy of achieving a dignified existence for the small farmers free from pernicious institutional restraints and practices (Sec. 2 [2], Code of Agrarian Reforms).

ll. We, therefore, rule that except for compelling reasons clearly proved the determination that a person is a tenant-farmer, a factual conclusion made by the trial court on the basis of evidence directly available to it, will not be reversed on appeal and will be binding on us. (see Macaraeg v. Court of Appeals, G.R. No. 48008, January 20, 1989; Co v. Intermediate Appellate Court, 162 SCRA 390 [1988]).

mm. WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The decision of the Court of Appeals dated March 3, 1987 is AFFIRMED.

nn. SO ORDERED.b. Endaya vs. CA (G.R. No. 88113)

Assailed in this petition for review on certiorari is the decision of the Court of Appeals in CA-.G.R. No. 15724 dated April 26, 1989 1 reversing the judgment of the Regional Trial Court of Tanauan, Batangas (Branch 6) in Civil Case No. T-430 2 and holding that private respondent is an agricultural lessee in the land of petitioner whose security of tenure must be respected by the latter.

The antecedent facts are as follows:

The Spouses Natividad Trinidad and Cesar San Diego owned a piece of agricultural land consisting of 20,200 square meters situated at San Pioquinto, Malvar, Batangas, devoted to rice and corn. As far back as 1934, private respondent Fideli has been cultivating this land as a tenant of the Spouses respondent Fideli has been cultivating this land as a tenant of the Spouses San Diego under a fifty-fifty (50-50) sharing agreement. This fact, petitioners do not dispute.

On May 2, 1974, a lease contract was executed between the Spouses San Diego and one Regino Cassanova for a period of four years from May 1974 up to May 1978. 3 The lease contract obliged Cassanova to pay P400.00 per hectare per annum and gave him the authority to oversee the planting of crops on the land. 4 Private respondent signed this lease contract as one of two witnesses. 5

The lease contract was subsequently renewed to last until May 1980 but the rental was raised to P600.00. Again, private respondent signed the contract as witness. 6

During the entire duration of the lease contract between the Spouses San Diego and Cassanova, private respondent continuously cultivated the land, sharing equally with Cassanova the net produce of the harvests.

On January 6, 1980, the Spouses San Diego sold the land to petitioners for the sum of P26,000.00. The sale was registered with the Register of Deeds of Batangas and a Transfer Certificate of Title was duly issued on January 7, 1981. 7 Private respondent continued to farm the land although petitioners claim that private respondent was told immediately after the sale to vacate the land. 8 In any case, it is undisputed that private respondent deposited with the Luzon Development Bank an amount of about P8,000.00 as partial payment of the landowner's share in the harvest for the years 1980 until 1985. 9

Due to petitioners persistent demand for private respondent to vacate the land, private respondent filed in April 1985 a complaint 10 with the Regional Trial Court of Tanauan, Batangas praying that he be declared the agricultural tenant of petitioners.

After trial, the trial court decided in favor of petitioners by holding that private respondent is not an agricultural lessee of the land now owned by petitioners. The dispositive portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered dismissing plaintiff's complaint to be declared a tenant of the landholding consisting of 20,200 square meters, located at San Pioquinto, Malvar, Batangas, and owned by the defendants; ordering Pedro Fideli to vacate the landholding deliver possession thereof to the defendants; and ordering the amount of P8,000.00 deposited under Account No. 2940029826 Civil Case No. T-430 to be withdrawn and delivered to the defendants, No. pronouncement as to costs.

On appeal, the Court of Appeals reversed the RTC decision and declared private respondent to be the agricultural lessee of the subject landholding. Hence, this petition wherein private respondent's status as an agricultural lessee and his security of tenure as such are being disputed by petitioners.

Petitioners impugn the Court of Appeals' declaration that private respondent is an agricultural lessee of the subject landholding contending that when the original landowners, the Spouses San Diego, entered into a lease contract with Regino Cassanova, the agricultural leasehold relationship between the Spouses San Diego and private respondent, the existence of which petitioners do not dispute, was thereby terminated. Petitioners argue that a landowner cannot have a civil law lease contract with one person and at the same time have an agricultural leasehold agreement with another over the same land. It is further argued that because private respondent consented to the lease contract between the Spouses San Diego and Cassanova, signing as he did the lease agreement and the renewal contract as witness thereof, private respondent has waived his rights as an agricultural lessee.

These contentions are without merit.

R.A. No. 3844 (1963), as amended By R.A. No. 6839 (1971), which is the relevant law governing the events at hand, abolished share tenancy throughout the Philippines from 1971 and established the agricultural leasehold system by operation of law. 11 Section 7 of the said law gave agricultural lessees security of tenure by providing the following: "The agricultural leasehold relation once established shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized by the Court for causes herein provided." 12The fact that the landowner entered into a civil lease contract over the subject landholding and gave the lessee the authority to oversee the farming of the land, as was done in this case, is not among the causes provided by law for the extinguishment of the agricultural leasehold relation. 13 On the contrary, Section 10 of the law provides:

Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. — The agricultural leasehold relation under this code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding. In case the agricultural lessor sells, alienates or transfers the legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor.

Hence, transactions involving the agricultural land over which an agricultural leasehold subsists resulting in change of ownership, e.g., sale, or transfer of legal possession, such as lease, will not terminate the right of the agricultural lessee who is given protection by the law by making such rights enforceable against the transferee or the landowner's successor in interest. 14

Illustrative of the legal principles outlined above is Catorce v. Court of Appeals 15 where the person holding a mortgage over the farm land subject of an agricultural leasehold took possession thereof pursuant to the mortgage and ousted the agricultural lessee. Upon complaint for reinstatement filed by the agricultural lessee, the then Court of Agrarian Relations ordered the mortgagee to deliver possession over the land to the agricultural lessee but his decision was reversed by the Court of Appeals. In reversing the Court of Appeals' judgment and reinstating the Agrarian Court's decision, the Court, through Justice Melencio-Herrera, noted, among other considerations, that "tenants are guaranteed security of tenure, meaning, the continued enjoyment and possession of their landholding except when their dispossession had been authorized by virtue of a final and executory judgment, which is not so in the case at bar." 16 Implicit in the decision is the recognition that the transfer of possession to the mortgage did not terminate the agricultural leasehold nor prejudice the security of tenure of the agricultural lessee.

Closer, to although not identical with the factual setting of the case at bar is Novesteras v. Court of Appeals. 17Petitioner in said case was a share tenant of the respondent over two parcels of land. Respondent entered into a contract of civil lease with Rosenda Porculas for a term of three years. Porculas did not farm the land himself but left it to petitioner to till the land. After the expiration of the lease between respondent and Porculas, petitioner entered into an agreement denominated as a contract of civil lease with respondent. On expiration of this lease contract, respondent denied petitioner possession over the land. Resolving the rights and obligations of the parties, the Court, through Justice Paras, held that the petitioner therein became an agricultural tenant of respondent by virtue of R.A. No. 3844 (1963), as amended by R.A. No 6839 (1971). The lease contract between the respondent and Porculas did not terminate the agricultural leasehold relationship between petitioner and respondent. If at all, the said lease agreement, coupled by the fact that Porculas allowed petitioner to continue cultivating in his capacity as tenant of the subject landholding, served to strengthen petitioner's security of tenure as an agricultural tenant of the farmland in question. Accordingly, the subsequent contract between petitioner and respondent denominated as a contract of civil lease was held by the Court to be in fact an agricultural leasehold agreement.

Again, in Coconut Cooperative Marketing Association, Inc. (COCOMA) v. Court of Appeals, 18 it was held that the agricultural leasehold is preserved, notwithstanding the transfer of the legal possession of the subject landholding, with the transferee, COCOMA in that case, being accountable to the agricultural lessees for their rights. The Court, through Justice Padilla, summarized the rule as follows:

There is also no question that, in this case, there was a transfer of the legal possession of the land from one landholder to another (Fule to petitioner COCOMA). In connection therewith, Republic Act 3844, Sec. 10 states:

Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. — The agricultural leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding. In case the agricultural lessor sells, alienates or transfers the legal possession of the landholding, purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor.

Further, in several cases, this Court sustained the preservation of the landholder-tenant relationship, in cases of transfer of legal possession:

. . . in case of transfer or in case of lease, as in the instant case, the tenancy relationship between the landowner and his tenant should be preserved in order to insure the well-being of the tenant or protect him from being unjustly dispossessed by the transferee or purchaser of the land; in other words, the purpose of the law in question is to maintain the tenants in the peaceful possession and cultivation of the land or afford them protection against unjustified dismissal from their holdings. (Primero v. CAR, 101 Phil. 675);

It is our considered judgment, since the return by the lessee of the leased property to the lessor upon the expiration of the contract involves also a transfer of legal possession, and taking into account the manifest intent of the lawmaking body in amending the law, i.e., to provide the tenant with security of tenure in all cases of transfer of legal possession, that the instant case falls within and is governed by the provisions of Section 9 of Republic Act 1199, as amended by Republic Act 2263. (Joya v. Pareja, 106 Phil, 645).

. . . that the tenant may proceed against the transferee of the land to enforce obligation incurred by the former landholder such obligation . . . falls upon the assignee or transferee of the land pursuant to Sec. 9 abovementioned. Since respondent are in turn free to proceed against the former landholder for reimbursement, it is not iniquitous to hold them responsible to the tenant for said obligations. Moreover, it is the purpose of Republic Act 1199, particularly Sec. 9 thereof, to insure that the right of the tenant to receive his lawful share of the produce to receive this lawful share of the produce of the land is unhampered by the transfer of said land from one landholder to another. (Almarinez v. Potenciano, 120 Phil. 1154.). 19

In the instant case, private respondent has been cultivating the subject farm landholding with a fifty-fifty (50-50) sharing arrangement with the Spouses San Diego, petitioners' predecessors-in-interest. The passage of R.A. 6839 in 1971, amending R.A. 3844 (1963), secured to private respondent all the rights pertaining to an agricultural lessee. The execution of a lease agreement between the Spouses San Diego and Regino

Cassanova in 1974 did not terminate private respondent's status as an agricultural lessee. The fact that private respondent knew of, and consented to, the said lease contract by signing as witness to the agreement may not be construed as a waiver of his rights as an agricultural lessee. On the contrary, it was his right to know about the lease contract since, as a result of the agreement, he had to deal with a new person instead of with the owners directly as he used to. No provision may be found in the lease contract and the renewal contract even intimating that private respondent has waived his rights as an agricultural lessee. Militating against petitioners' theory that the agricultural leasehold was terminated or waived upon the execution of the lease agreement between the San Diegos and Cassanova is the fact the latter desisted from personally cultivating the land but left it to private respondent to undertake the farming, the produce of the land being shared between Cassanova and private respondent, while the former paid P400.00 and later P600.00 per hectare per annum to the San Diegos, as agreed upon in the lease contract.

Petitioners, however, insist that private respondent can no longer be considered the agricultural lessee of their farm land because after they purchased the land from the Spouses San Diego in 1980, private respondent did not secure their permission to cultivate the land as agricultural lessee.

It is true that the Court has ruled that agricultural tenancy is not created where the consent the true and lawful owners is absent. 20 But this doctrine contemplates a situation where an untenanted farm land is cultivated without the landowner's knowledge or against her will or although permission to work on the farm was given, there was no intention to constitute the worker as the agricultural lessee of the farm land. 21 The rule finds no application in the case at bar where the petitioners are successors-in-interest to a tenanted land over which an agricultural leasehold has long been established. The consent given by the original owners to constitute private respondent as the agricultural lessee of the subject landholding binds private respondents whom as successors-in-interest of the Spouses San Diego, step into the latter's shows, acquiring not only their rights but also their obligations. 22

Contradicting their position that no agricultural leasehold exists over the land they acquired from the Spouses San Diego, petitioners also pray for the termination of the tenancy of private respondent allegedly due to: (a) non-payment of the agricultural lease rental; and (b) animosity between the landowners and the agricultural lessee. The Court, however, observes that nowhere in the petitioners' Answer to private respondent's Complaint or in the other pleadings filed before the trial court did petitioners allege grounds for the termination of the agricultural leasehold. Well-settled is the rule that issues not raised in the trial court cannot be raised for the first time on appeal. 23

In fine, the Court, after a painstaking examination of the entire records of the case and taking into account the applicable law, as well as the relevant jurisprudence, rules that private respondent is the agricultural lessee over the land owned by petitioners. As such, private respondent's security of tenure must be respected by petitioners.

The Court, however, notes from the records of the case that private respondent has unilaterally decided to pay only 25% of the net harvests to petitioners. 24 Since the agreement of private respondent with the Spouses San Diego, the original owners, was for a fifty-fifty (50-50) sharing of the net produce of the land, the same sharing agreement should be maintained between petitioners and private respondents, without prejudice to a renegotiation of the terms of the leasehold agreement.

WHEREFORE, premises considered, the Petition is DISMISSED and the decision of the Court of Appeals AFFIRMED. Private respondent is hereby ordered to pay the back rentals from 1980 until 1992 plus interest at the legal rate. An accounting of the production of the subject landholding is to be made by private respondent to the Regional Trial Court of Tanauan, Batangas which shall determine the amount due to petitioners based on the rate ordered above.

SO ORDERED.

c. Milestone Realty vs CA (G.R. No. 135999) – succession

Petitioners Milestone Realty & Co., Inc. (“Milestone” for brevity) and William Perez seek the reversal of the decision [1] dated May 29, 1998 of the Court of Appeals in CA-G.R. SP NO. 39987. Said decision affirmed that of the Department of Agrarian Reform Adjudication Board (DARAB),[2] which had declared respondent Delia Razon Peña as the bona fide tenant of a lot in Bulacan, and voided the sale of said lot thereby reversing the decision of the Provincial Agrarian Reform Adjudicator (PARAD).[3]

The facts as culled from the records are as follows:

Spouses Alfonso Olympia and Carolina Zacarias and Spouses Claro Zacarias and Cristina Lorenzo were the co-owners of an agricultural land identified as Lot 616 of the Malinta Estate. Said lot has an area of 23,703 square meters, covered by Transfer Certificate of Title (TCT) No. 26019, located at Karuhatan, Valenzuela, Bulacan, now Valenzuela City. Eventually, Carolina became the owner of the property by virtue of a Deed of Extrajudicial Settlement executed on October 17, 1976 by the heirs of Alfonso Olympia, one of whom is Francisco Olympia, on their respective shares after Alfonso’s death and by an Affidavit of Settlement executed on June 24, 1992 by the spouses Claro and Cristina Zacarias on their shares in the property.

Meanwhile, Anacleto Peña who was a tenant of the property and a holder of a Certificate of Agricultural Leasehold issued on February 23, 1982, had a house constructed on the lot. He had several children on the first marriage, among whom are Emilio Peña and Celia Segovia, who also had their houses constructed on the property. On February 4, 1986, Anacleto, who was already 78 years old and a widower, married Delia Razon, then only 29 years old. On February 17, 1990, Anacleto died intestate and was survived by Delia and his children in his first marriage, including Emilio.

Emilio and Delia, the latter with the help of respondent Raymundo Eugenio, her son-in-law, continued tilling and cultivating the property. On January 22, 1992, Emilio signed a handwritten declaration that he was the tenant in the land and he was returning the landholding to Carolina Zacarias in consideration of the sum of P1,500,000 as “disturbance compensation”. He initially opted for a 1,000 square meter homelot but later changed his mind. After receipt of the money, he executed a “Katibayang Paglilipat ng Pag-mamay-ari”.

In the meantime, petitioner William Perez, Joseph Lim, Willy Lim, Winston Lim, Edgar Lim, and Jaime Lim established Milestone as incorporators, in order to acquire and develop the aforesaid property and the adjacent parcel, Lot No. 617 of the Malinta Estate.

On July 30, 1992, Carolina Zacarias executed a deed of sale transfering the Lot No. 616 to petitioner Milestone for P7,110,000. TCT No. 26019 was cancelled and in lieu thereof, TCT No. 25433 was issued in the name of Milestone. On the same date, the adjoining Lot No. 617 covered by TCT No. V-25431 was issued under the name of petitioner William Perez who subsequently sold the same to Milestone on the basis of which TCT No. V-26481 was issued to it. Thus, Milestone became the owner of the adjoining lots, Lot Nos. 616 and 617 of the Malinta Estate with a total area of three (3) hectares. Development of the property then commenced.

On October 13, 1992, private respondents Delia Razon Peña and Raymundo Eugenio filed a complaint against Emilio Peña, Carolina Zacarias and her brother Francisco Olympia, and William Perez with the PARAD, which was amended on January 6, 1993 to implead Milestone as respondent, praying inter alia to declare as null and void the sale by Carolina to Perez and by the latter to Milestone, and to recognize and respect the tenancy of private respondents Delia and Raymundo.

In her answer, Carolina Zacarias declared that she chose Emilio Peña as her tenant-beneficiary on the said property within 30 days after the death of Anacleto, conformably with Section 9 of Republic Act No. 3844. [4]On July 28, 1993, the PARAD rendered a decision dismissing the complaint as follows:[5]

WHEREFORE, upon the foregoing premises, judgment is hereby rendered:

1. Dismissing the instant complaint;

2. Dissolving the writ of Preliminary Injunction issued on May 24, 1993;

3. Directing the Cashier of the DAR Regional Office at Pasig, Metro Manila to release to the Petitioners or their duly authorized representative, the cash bond posted in the amount of Fifteen Thousand Pesos [P15,000.00].

4. No pronouncement as to costs.

SO ORDERED.

In the decision, the PARAD ruled that the order of preference cited in Section 9 of Republic Act 3844 is not absolute and may be disregarded for valid cause.[6] It also took note that Emilio’s two siblings have openly recognized Emilio as the legitimate successor to Anacleto’s tenancy rights.[7]

Delia Razon Peña and Raymundo Eugenio appealed from the PARAD’s decision to the DARAB. On September 5, 1995, the DARAB reversed the decision of PARAD, the dispositive portion of which reads as follows:

WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The Decision dated July 28, 1993 is REVERSED.

Judgment is issued:

1. Declaring Delia Razon Peña the bona-fide tenant over the landholding in question;

2. Declaring the series of purchase and sale of the landholding in question as illegal, hence, null and void;

3. Directing the Register of Deeds to cancel TCT No. V-26485 and all subsequent titles obtained thereafter over the landholding named under William L. Perez and Milestone Realty and Co., Inc.;

4. Allowing Delia Razon Peña to exercise her right of redemption over the land within the prescribed period granted by law;

5. Enjoining all Respondents-Appellees to desist from further disturbing Delia Razon Peña in the peaceful possession and cultivation of the land;

6. Directing the DAR-DOJ Task Force on Illegal Conversion to file appropriate charges before the Special Agrarian Court as regards the criminal aspect of this case.

SO ORDERED. [8]

In reversing the PARAD’s decision, the DARAB noted that Carolina’s affidavit did not show any categorical admission that she made her choice within the one (1) month period except to state that “when Anacleto died, the right of the deceased was inherited by Emilio Peña” which could only mean that she recognized Emilio Peña by force of circumstance under a nebulous time frame. [9]

In a petition for review to the Court of Appeals, the latter affirmed the DARAB’s decision, thus:

We are convinced, beyond cavil, in the present recourse, that the Petitioners Carolina Olympia and Francisco Olympia failed to choose, within the statutory period therefor, any tenant in substitution of Anacleto Peña, the erstwhile deceased tenant on the landholding, and that, without prior or simultaneous notice to Private Respondent Delia Peña, the Petitioners made their choice of Petitioner Emilio Peña as substitute tenant only in January, 1992, after they had agreed to sell the property to the Petitioner Milestone Realty & Co., Inc.

IN SUM, then, We find no reversible error committed by the DARAB under its oppunged Decision.

IN THE LIGHT OF ALL THE FOREGOING, the Petition is denied due course and is hereby dismissed. The appealed Decision is hereby AFFIRMED. With costs against the Petitioners.

SO ORDERED.[10]

Subsequently, petitioners filed a Motion for Reconsideration of the CA’s decision. Said motion was denied on October 12, 1998.

Hence, this petition assigning the following errors allegedly committed by respondent Court of Appeals: [11]

I

THE RESPONDENT COURT OF APPEALS ERRED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN THE CONSTRUCTION AND APPLICATION OF SECTION 9 OF REPUBLIC ACT 3844 BY HOLDING THAT PRIVATE RESPONDENT DELIA RAZON PEÑA HAS SUCCEEDED TO HER DECEASED HUSBAND’S LEASEHOLD RIGHT BY OPERATION OF LAW.

II

THE RESPONDENT COURT OF APPEALS ERRED IN DECLARING THE SALE BY THE LANDOWNER TO PETITIONER WILLIAM L. PEREZ, AND BY THE LATTER TO PETITIONER MILESTONE REALTY & CO., INC. AS NULL AND VOID, AND IN ORDERING THE CANCELLATION OF THEIR RESPECTIVE TITLES.[12]

These two assigned errors tendered issues articulated in petitioners’ memorandum as follows:

1. Whether or not Emilio Peña was validly chosen by Carolina Zacarias as the new tenant over the landholding under dispute within one (1) month from the death of his father Anacleto, as prescribed by Section 9 of R.A. 3844, as amended;

2. Whether or not Delia Razon Peña was a bona fide or de jure tenant over the landholding in question to be accorded the alleged rights to security of tenure and of redemption under the agrarian reform laws;

3. Whether or not Emilio Peña validly renounced or otherwise caused the extinction of his tenancy rights over the subject property;

4. Whether or not the sales of the subject property by Carolina Zacarias to William Perez and by the latter to Milestone were null and void, hence merited the declaration of nullity and cancellation of the respondents’ respective titles;

5. Whether or not illegal conversion was committed by Milestone.

In sum, we find the following relevant issues now for our resolution:

1. Whether or not Delia Razon Peña has a right of first priority over Emilio Peña in succeeding to the tenancy rights of Anacleto over the subject landholding.

2. Whether or not the sales of the subject lots by Carolina Zacarias to William Perez and then to Milestone are null and void.

At the outset, it bears stressing that there appears to be no dispute as to tenancy relationship between Carolina Zacarias and the late Anacleto Peña. The controversy centers on who is the rightful and legal successor to Anacleto’s tenancy rights. Relevant to the resolution of the first issue is Section 9 of Republic Act No. 3844, otherwise known as the Code of Agrarian Reforms, which provides as follows:

SEC. 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of the Parties. - In case of death or permanent incapacity of the agricultural lessee to work his landholding, the leasehold shall continue between the agricultural lessor and the person who can cultivate the landholding personally, chosen by the agricultural lessor within one month from such death or permanent incapacity, from among the following: (a) the surviving spouse; (b) the eldest direct descendant by consanguinity; or (c) the next eldest descendant or descendants in the order of their age: Provided, That in case the death or permanent incapacity of the agricultural lessee occurs during the agricultural year, such choice shall be exercised at the end of that agricultural year: Provided, further, That in the event the agricultural lessor fails to exercise his choice within the periods herein provided, the priority shall be in accordance with the order herein established.

In case of death or permanent incapacity of the agricultural lessor, the leasehold shall bind his legal heirs.

Petitioners contend that Section 9 does not require any form or manner in which the choice should be made. [13] They assail the Court of Appeals for heavily relying on the findings of the DARAB that there was no convincing proof that Carolina exercised her right to choose from among the qualified heirs a replacement for the deceased tenant, [14] when in fact a choice was made. In support thereof, petitioners invoke Carolina’s affidavit and her Answer to the complaint in the PARAD, both dated November 16, 1992 where Carolina recognized Emilio Peña as the successor to

Anacleto’s tenancy rights. Petitioners argued that Delia could not have qualified as a successor-tenant to Anacleto due to lack of personal cultivation.[15] Further, she had not been paying rent on the land.

Responding to petitioners’ contentions, respondents argue that Carolina did not choose the successor to Anacleto’s tenancy rights within one month from the death of Anacleto. Respondents note that it was only after the lapse of two (2) years from the death of Anacleto on February 17, 1990, that both Carolina and Emilio claimed in their respective affidavits that Emilio inherited the rights of Anacleto as a tenant. [16] According to respondents, such inaction to make a choice within the time frame required by law is equivalent to waiver on Carolina’s part to choose a substitute tenant.[17] Also, it appears that Carolina made the choice in favor of Emilio Peña only by force of circumstance, i.e., when she was in the process of negotiating the sale of the land to petitioners Perez and Milestone.[18]

On this score, we agree with private respondents. As found by both the DARAB and the Court of Appeals, Carolina had failed to exercise her right to choose a substitute for the deceased tenant, from among those qualified, within the statutory period. [19] No cogent reason compels us to disturb the findings of the Court of Appeals. As a general rule, findings of fact of the Court of Appeals are final and conclusive and cannot be reviewed on appeal by the Supreme Court, provided they are borne out by the record or based on substantial evidence. [20]

Section 9 of Republic Act No. 3844 is clear and unequivocal in providing for the rules on succession to tenancy rights. A close examination of the provision leaves no doubt as to its rationale of providing for continuity in agricultural leasehold relation in case of death or incapacity of a party. To this end, it provides that in case of death or permanent incapacity of the agricultural lessee to work his landholding, the leasehold shall continue between the agricultural lessor and the person who can cultivate the landholding personally. In the same vein, the leasehold shall bind the legal heirs of the agricultural lessor in case of death or permanent incapacity of the latter. It is to achieve this continuity of relationship that the agricultural lessor is mandated by law to choose a successor-tenant within one month from the death or incapacity of the agricultural lessee from among the following: (1) surviving spouse; (2) eldest direct descendant by consanguinity; or (3) the next eldest direct descendant or descendants in the order of their age. Should the lessor fail to exercise his choice within one month from the death of the tenant, the priority shall be in accordance with the aforementioned order. In Manuel vs. Court of Appeals,[21] we ruled that:

Agricultural leasehold relationship is not extinguished by the death or incapacity of the parties. In case the agricultural lessee dies or is incapacitated, the leasehold relation shall continue between the agricultural lessor and any of the legal heirs of the agricultural lessee who can cultivate the landholding personally, in the order of preference provided under Section 9 of Republic Act 3844, as chosen by the lessor within one month from such death or permanent incapacity. Since petitioner Rodolfo Manuel failed to exercise his right of choice within the statutory period, Edwardo’s widow Enriqueta, who is first in the order of preference and who continued working on the landholding upon her husband’s death, succeeded him as agricultural lessee. Thus, Enriqueta is subrogated to the rights of her husband and could exercise every right Eduardo had as agricultural lessee, including the rights of pre-emption and redemption.

Applying Section 9 of Republic Act 3844, in the light of prevailing jurisprudence, it is undeniable that respondent Delia Razon Peña, the surviving spouse of the original tenant, Anacleto Peña, is the first in the order of preference to succeed to the tenancy rights of her husband because the lessor, Carolina Zacarias, failed to exercise her right of choice within the one month period from the time of Anacleto’s death.

Petitioners cannot find succor in the declarations of Emilio Peña and the affidavit of Carolina Zacarias, stating that Emilio succeeded to the tenancy rights of Anacleto. In the first place, Carolina’s affidavit and her Answer filed before the PARAD were both executed in 1992, or almost two years after the death of Anacleto on February 17, 1990, way beyond the one month period provided for in Section 9 of Republic Act 3844. Secondly, as found by the DARAB, a scrutiny of Carolina’s declaration will show that she never categorically averred that she made her choice within the one (1) month period. Instead, she narrated passively that “when Anacleto died, the right of the deceased was inherited by Emilio Peña,” prompting the DARAB to conclude it merely “connotes that she recognized Emilio Peña by force of circumstance under a nebulous time frame.”[22]

Petitioners further argue that Delia cannot qualify as tenant even on the assumption that she was the rightful successor to Anacleto’s tenancy rights, because she did not personally cultivate the land and did not pay rent. In essence, petitioners urge this Court to ascertain and evaluate certain material facts which, however are not within the province of this Court to consider in a petition for review. Determination of personal cultivation and rental payments are factual issues beyond the reach of this petition. Well established is the rule that in an appeal via certiorari, only questions of law may be reviewed.[23]

On the second issue, however, we are unable to agree with the ruling of respondent Court of Appeals and of DARAB that the sale of the land in question should be declared null and void. There is no legal basis for such declaration. Lest it be forgotten, it is Carolina Zacarias who is the owner of the subject land and both Emilio Peña and Delia Razon Peña only succeeded to the tenancy rights of Anacleto.

As an owner, Carolina has the right to dispose of the property without other limitations than those established by law. [24] This attribute of ownership is impliedly recognized in Sections 10, 11 and 12 of Republic Act No. 3844, [25] where the law allows the agricultural lessor to sell the landholding, with or without the knowledge of the agricultural lessee and at the same time recognizes the right of preemption and redemption of the agricultural lessee. Thus, the existence of tenancy rights of agricultural lessee cannot affect nor derogate from the right of the agricultural lessor as owner to dispose of the property. The only right of the agricultural lessee or his successor in interest is the right of preemption and/or redemption.

In the case at bar, it is undisputed that Carolina became the absolute owner of the subject landholding by virtue of Deed of Extrajudicial Settlement and Affidavit of Settlement executed by the other heirs of Alfonso Olympia and Spouses Claro and Cristina Zacarias. As the owner, it is within her right to execute a deed of sale of said landholding, without prejudice however to the tenancy rights and the right of redemption of Delia Razon Peña. In Manuel,[26] we held that the tenancy relationship is not affected or severed by the change of ownership. The new owner is under the obligation to respect and maintain the tenant’s landholding. In turn, Delia Razon Peña, as the successor tenant, has the legal right of redemption. This right of redemption is statutory in character. It attaches to a particular landholding by operation of law.[27]

Finally, as to the question of illegal conversion of the land, suffice it to state that such determination is not within the jurisdiction of this Court and is not proper in a petition for review on certiorari as it requires evaluation and examination of pertinent facts.

WHEREFORE, the petition is PARTIALLY GRANTED. The assailed decision of the Court of Appeals in CA-G.R. SP No. 39987 is AFFIRMED in so far as it recognizes Delia Razon Peña as the successor of Anacleto Peña as the tenant, thereby allowing her to exercise her right of redemption over the land within the prescribed period granted by law. However, said decision is REVERSED and SET ASIDE insofar as it declared the sale of said landholding null and void. IN LIEU THEREOF, SAID SALE BY CAROLINA ZACARIAS IS HEREBY DECLARED VALID, SUBJECT TO THE TENANCY RIGHTS AND RIGHT OF REDEMPTION by the TENANT-LESSEE, private respondent Delia Razon Peña.

No pronouncements as to costs

SO ORDERED.

d. Villaviza vs Panganiban (G.R. No. L-19760) – Prescription of action

1. AGRICULTURAL TENANCY; PRESCRIPTION OF ACTION FOR VIOLATION OF SECURITY OF TENURE OF TENANT. — A tenant's right to be

respected in his tenure under Republic Act 1199, as amended, is an obligation of the landholder created by law, and an action for violation

thereof prescribes in ten years under No. 2 of Article 1144 of the Civil Code.

2. ID.; EJECTED TENANT'S EARNINGS ELSEWHERE NOT DEDUCTED FROM DAMAGES. — Under section 27 (1) of Republic Act 1199, as

amended, an illegally ejected tenant's earnings elsewhere may not be deducted from but is to be added to the damages granted him upon

reinstatement.

D E C I S I O N

REYES, J.B.L., J p:

Review of the decision of the Court of Agrarian Relations, Cabanatuan City, in its Case No. 2088-NE-60, the dispositive portion of which reads:

"WHEREFORE, judgment is hereby rendered ordering respondent Quirino Capalad to pay the petitioners as follows:

1. Jose Aguilar P297.00

2. Agapito Neuda 264.75

3. Sixto Malarulat 264.25

4. Rafael Alamon 164.00

5. Petronilo Aguilar 335.25

6. Eulogio Samaniego 219.00

7. Castor Rufino 234.00.

The following respondents are hereby ordered to vacate their respective landholdings in favor of the petitioners, subject to the provisions

of pars. 3 and 4, Sec. 22 R.A. No. 1199, as amended, the indemnity in the aforestated paragraphs, supra, shall be paid by respondent

Quirino Capalad:

Respondents Petitioners

1. Alejo Pramel 1. Jose Aguilar

2. Severino Padilla 2. Agapito Neuda

3. Domingo Villaviza 3. Rafael Alamon

4. Marcelo Villaviza 4. Petronilo Aguilar

5. Cirilo Ramos 5. Eulogio Samaniego

6. Ciriaco Pizaro 6. Castor Rufino

7. Cesario Villaviza 7. Sixto Malarulat

Ben Morelos

Juan Morelos

SO ORDERED."

The lower court found that the above-named respondents (petitioners below) were tenants since 1944 in a riceland situated in Aliaga, Nueva

Ecija, and owned by Domingo Fajardo. Fajardo gave out the land for lease (civil lease) to the petitioner, Quirino Capalad, starting with the crop year

1955-56. The said lessee, in June, 1955, plowed the land by machinery, and installed, as his tenants, his above-named co-petitioners in this Court,

so that when the respondents went back to their respective landholdings to prepare them for planting they found the land already cultivated. The

respondents- tenants demanded their re-instatement, but every time they did, which they did yearly until the present suit was filed, Quirino

Capalad promised, but never fulfilled, to reinstate them for the agricultural year following said demands.

As grounds for the petition for review, the petitioners claim grave abuse of discretion by the Agrarian Court and a lack of substantive evidence

to support its findings.

The above claim is wild and reckless and definitely without merit, since the decision itself contains the recitals of the testimonies of the

witnesses upon which the court based its findings, and the petitioners do not question the existence and adequacy of these testimonies. That the

court believed the evidence for the respondents, rather than those for the petitioners is the tenancy court's prerogative, and, as a reviewing court,

the Supreme Court will not weigh anew the evidence all that this Court is called upon to do, insofar as the evidence is concerned, is to find out if

the conclusion of the lower court is supported by substantive evidence; and the present case is, as hereinbefore explained.

A tenant's right to be respected in his tenure under Republic Act 1199, as amended, is an obligation of the landholder created by law and an

action for violation hereof prescribes in ten years under No. 2 of Article 1144 of the Civil Code. The respondents were ousted from their

landholdings in June, 1955, and they filed the present action on 31 March 1960; therefore, the period of limitation had not expired.

The tenancy court found that the ejected tenants-respondents have engaged in gainful occupations since their illegal ejectment and had

delayed the filing of the case, and for these reasons the court made an award for damages against Quirino Capalad equivalent to only two harvests

based on the landholder's share for the crop year 1954-1955.

The premises for the award are erroneous. Under section 27(1) of Republic Act 1199, as amended, a tenant's earnings may not be deducted

from the damages because the said section positively provides that the tenant's freedom to earn elsewhere is to be added ("in addition") to his

right to damages in case of illegal ejectment (Lustre, et al. vs. CAR, et al., L-19654, March 21, 1964). Nor can it be said that the respondents-tenants

are guilty of laches for having unnecessarily delayed the filing of the case, because the delay was attributed to Capalad's promises to reinstate

them.

The amount of the award to each respondent should not, however be disturbed because the respondents non-appeal from the decision

indicates their satisfaction therewith and a waiver of any amounts other than those indicated in the decision (David v. de la Cruz, et al., L-11656, 18

April 1958; Dy, et al. vs. Kuizon, L-16654, 30 Nov. 1961).

FOR THE FOREGOING CONSIDERATIONS, the decision under review is hereby affirmed, with costs against the petitioners.

C. Right of pre-emption and redemption

a. Basbas vs Entena (G.R. No. L-21812)

This is an agrarian case. Three questions of consequential effects are raised: first, is there a tenant's right of redemption in sugar and coconut

lands; second, is prior tender or judicial consignation of the redemption price a condition precedent for the valid exercise of the right of

redemption; and third, does the Court of Agrarian Relations have jurisdiction over complaints for redemption of sugar and coconut lands.

Respondent Eulogio Gonzales is an agricultural share tenant of Glicerio, Sinfroso, Susana, Maria, Sebastian, Rufina, Bienvenido, Besmark and

Cesar, all surnamed Angeles, on their 46,529-square land situated in Tanauan, Batangas, and devoted to sugar cane and coconuts. On September

30, 1968, the landowners sold the property to petitioners-spouses Leonila Laurel Almeda and Venancio Almeda without notifying respondent-

tenant in writing of the sale. The document of sale was registered with the Register of Deeds of Tanauan, Batangas on March 21, 1969.

Respondent-tenant thus seeks the redemption of the land in a complaint filed on March 27, 1971, pursuant to the provisions of Sections 11 and 12

of the Code of Agrarian Reforms, with the Court of Agrarian Relations at Lipa City.

Answering the complaint, petitioners-spouses state, among other things, that long before the execution of the deed of sale, Glicerio Angeles

and his nephew Cesar Angeles first offered the sale of the land to respondent Gonzales, but the latter said that he had no money; that respondent-

tenant, instead, went personally to the house of petitioners-spouses and implored them to buy the land for fear that if someone else would buy

the land, he may not be taken in as tenant; that respondent-tenant is a mere dummy of someone deeply interested in buying the land; that

respondent-tenant made to tender of payment or any valid consignation in court at the time he filed the complaint for redemption.

At the hearing of May 29, 1973 the parties waived their right to present evidence and, instead, agreed to file simultaneous memoranda upon

which the decision of the court would be based.

On October 10, 1973, the Agrarian Court rendered judgment authorizing, the respondent-tenant, Eulogio Gonzales, to redeem the tenanted

land for P24,000.00, the said amount to be deposited by him with the Clerk of Court within fifteen (15) days from receipt of the decision.

Petitioners-spouses excepted to the ruling of the Agrarian Court and appealed the case to the Court of Appeals. On January 30, 1976, the

Appellate Court, however, affirmed the decision of the Agrarian Court. Denied of their motions for reconsideration, petitioners-spouses instituted

the present petition for review.

We find the appeal to be impressed with merits.

1. Prior to the enactment of the Agricultural Land Reform Code (RA 3844), no right of preference in the sale

of the land under cultivation was enjoyed by the tenant-farmer. The absence of this right freely opened the way to the

landlords to ease out their tenants from the land by ostensible conveyance of said land to another tenant who, in turn,

sues for the ejectment of the first tenant on ground of personal cultivation. While many of these sales were simulated,

the tenant is oftenly evicted from the land because of the formal transfer of ownership in the land. 1 On August 8, 1963,

the Agricultural Land Reform Code was passed, impressed with the policy of the State, among other things, "(t)o

establish owner-cultivatorship and the economic family-size farm as the basis of Philippine agriculture; to achieve a

dignified existence of the small farmers free from pernicious institutional restraints and practices; to make the small

farmers more independent, self-reliant and responsible citizens, and a source of genuine strength in our democratic

society." 2 More importantly, a new right was given to the tenants-farmers: the right of pre-emption and redemption. It

bolsters their security of tenure and further encourages them to become owner-cultivators. 3 Thus, Section II provides:

"In case the agricultural lessor decides to sell the landholding, the agricultural lessee shall have the preferential right to

buy the same under reasonable terms and conditions . . . The right of pre-emption under this Section may be exercised

within one hundred eighty days from notice in writing, which shall be served by the owner on all lessees affected and the

Department of Agrarian Reform. If the agricultural lessee agrees with the terms and conditions of the sale, he must give

notice in writing to the agricultural lessor of his intention to exercise his right of pre-emption within the balance of one

hundred eighty days' period still available to him, but in any case not less than thirty days. He must either tender

payment of, or present a certificate from the land bank that it shall make payment pursuant to section eighty of this

Code on the price of the landholding to the agricultural lessor. If the latter refuses to accept such tender or presentment,

he may consign it with the court." As protection of this right, Section 12 was inserted: "In case the landholding is sold to a

third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a

reasonable price and consideration. . . . The right of redemption under this section may be exercised within one hundred

eighty days from notice in writing which shall be served by the vendee on all lessees affected and the Department of

Agrarian Reform upon the registration of the sale, and shall have priority over any other right of legal redemption. The

redemption price shall be the reasonable price of the land at the time of the sale." 4 In the precedential case of Hidalgo v.

Hidalgo, 5 this right was held applicable to both leasehold tenants and share tenants.

Presently, We are faced with an intricate question: is this right of redemption available to tenants

in sugar and coconut lands? We answer yes. Among those exempted from the automatic conversion to agricultural

leasehold upon the effectivity of the Agricultural Land Reform Code in 1963 or even after its amendments (Code of

Agrarian Reforms) are sugar lands. Section 4 thereof states: "Agricultural share tenancy throughout the country, as

herein defined, is hereby declared contrary to public policy and shall be automatically converted to agricultural leasehold

upon the effectivity of this section. . . .Provided, That in order not to jeopardize international commitments, lands

devoted to crops covered by marketing allotments shall be made the subject of a separate proclamation by the President

upon recommendation of the department head that adequate provisions, such as the organization of cooperatives

marketing agreement, or similar other workable arrangements, have been made to insure efficient management on all

matters requiring synchronization of the agricultural with the processing phases of such crops . . ." Sugar is, of course,

one crop covered by marketing allotments. In other words, this section recognizes share tenancy in sugar lands until after

a special proclamation is made, which proclamation shall have the same effect of an executive proclamation of the

operation of the Department of Agrarian Reform in any region or locality; the share tenants in the lands affected will

become agricultural lessees at the beginning of the agricultural year next succeeding the year in which the proclamation

is made. 6 But, there is nothing readable or even discernible in the law denying to tenants in sugar lands the right of pre-

emption and redemption under the Code. The exemption is purely limited to the tenancy system; it does not exclude the

other rights conferred by the Code, such as the right of pre-emption and redemption. In the same manner, coconut lands

are exempted from the Code only with respect to the consideration and tenancy system prevailing, implying that in other

matters — the right of pre-emption and redemption which does not refer to the consideration of the tenancy — the

provisions of the Code apply. Thus, Section 35 states: "Notwithstanding the provisions of the preceding Sections, in the

case of fishponds, saltbeds and lands principally planted to citrus, coconuts, cacao, coffee, durian, and other similar

permanent trees at the time of the approval of this Code, the consideration, as well as the tenancy system prevailing,

shall be governed by the provisions of Republic Act Numbered Eleven Hundred and Ninety-Nine, as amended."

It is to be noted that under the new Constitution, property ownership is impressed with social function.

Property use must not only be for the benefit of the owner but of society as well. The State, in the promotion of social

justice, may "regular the acquisition, ownership, use, enjoyment and disposition ofprivate property, and equitably diffuse

property . . . ownership and profits." 7One governmental policy of recent date projects the emancipation of tenants from

the bondage of the soil and the transfer to them of the ownership of the land they till. This is Presidential Decree No. 27

of October 21, 1972, ordaining that all tenant farmers "of private agricultural lands devoted to rice and corn under a

system of sharecrop or lease-tenancy, whether classified as landed estates or not" shall be deemed "owner of a portion

constituting a family-size farm of five (5) hectares if not irrigated and there (3) hectares if irrigated." 8

2. Nevertheless, while the Code secures to the tenant-farmer this right of redemption, in particular, the

exercise thereof must be in accordance with the law in order to be valid. "The timely exercise of the right of legal

redemption," said the Court in Basbas v. Entena, 9 "requires either tender of the price or valid consignation thereof." The

statutory periods within which the right must be exercised "would be rendered meaningless and of easy evasion unless

the redemptioner is required to make an actual tender in good faith of what he believed to be reasonable price of the

land sought to be redeemed." "The existence of the right of redemption operates to depress the market value of the

land until the period expires, and to render that period indefinite by permitting the tenant to file a suit for redemption,

with either party unable to foresee when final judgment will terminate the action, would render nugatory the period of

two years (180 days under the new law) fixed by the statute for making the redemption and virtually paralyze any efforts

of the landowner to realize the value of his land. No buyer can be expected to acquire it without any certainty as to the

amount for which least his investment in case of redemption. In the meantime, the landowner's needs and obligations

cannot be met. It is doubtful if any such result was intended by the statute, absent clear wording to that effect." 10 In

Bona-fide redemption necessarily imports a seasonable and valid tender of the entire repurchase price. The right of a

redemptioner to pay a "reasonable price" does not excuse him from the duty to make proper tender of the price that can

be honestly deemed reasonable under the circumstances, without prejudice to final arbitration by the courts. "It is not

difficult to discern why the redemption price should either be fully offered in legal tender or else validly consigned in

court. Only by such means can the buyer become certain that the offer to redeem is one made seriously and in good

faith. A buyer cannot be expected to entertain an offer of redemption without attendant evidence that the redemptioner

can, and is willing to accomplish the repurchase immediately. A different rule would leave the buyer open to harassment

by speculators or crackpots, as well as to unnecessary prolongation of the redemption period, contrary to the policy of

the law. While consignation of the tendered price is not always necessary because legal redemption is not made to

discharge a pre-existing debt (Asturias Sugar Central v. Cane Molasses Co., 60 Phil. 253), a valid tender is indispensable,

for the reasons already stated. Of course, consignation of the price would remove all controversy as to the

redemptioner's ability to pay at the proper time." 11

In the case before Us, neither prior tender nor judicial consignation of the redemption price accompanied the

filing of the redemption suit. In fact, the Agrarian Court had yet to order, when it rendered its decision on October 10,

1973 (complaint was filed on March 27, 1971), respondent-tenant to deposit the amount of P24,000.00 as redemption

price with the Clerk of Court within fifteen (15) days from receipt of the decision. The absence of such tender or

consignation leaves Us, therefore, with no alternative but to declare that respondent-tenant had failed to exercise his

right of redemption in accordance with law.

3. Reliance cannot be placed upon the case of Hidalgo v. Hidalgo 12as excuse for the failure to make the

requisite tender or consignation in court, because the Court did not rule therein that prior tender or judicial consignation

of the redemption price is not required for the valid exercise of the right of redemption. In that case, the spouses Igmidio

Hidalgo and Martina Rosales were the share tenants of Policarpio Hidalgo on his 22, 876-square meter agricultural land

in Lumil, San Jose, Batangas, while the spouses Hilario Aguila and Adela Hidalgo were his tenants on a 7,638 square

meter land. Policarpio Hidalgo sold these lands without notifying his tenants; and so, the tenants filed petitions before

the Court of Agrarian Relations seeking the redemption of the lands under Section 12 of the Code. The Agrarian Court

dismissed the petitioners for the reason that the right of redemption is available to leasehold tenants only but not to

share tenants. On review, the Court ruled that while the Agrarian Court "correctly focused on the sole issue of law" —

whether the right of redemption granted 12 of Republic Act No. 3844 is applicable to share tenants — it (Agrarian Court)

"arrived at its erroneous conclusion that the right of redemption granted by Section 12 of the Land Reform Code is

available to leasehold tenants only but not to share tenants." The Court said that "(t)he Code intended . . . to afford the

farmers who transitionally continued to be share tenants after its enactment but who inexorably would be agricultural

lessees by virtue of the Code's proclaimed abolition of tenancy, the same priority and preferential right as those other

share tenants, who upon the enactment of the Code or soon thereafter were earlier converted by fortuitous

circumstance into agricultural lessees, to acquire the lands under their cultivation in the event of their voluntary sale by

the owner or of their acquisition, by expropriation or otherwise, by the Land Authority." But, the Court did not rule that

tender of payment or consignation of the redemption price in court is not a requisite in the valid exercise of the right of

redemption. In fact, it said that "(i)n the absence of any provision in the Code as to the manner of and amounts payable

on redemption, the pertinent provisions of the Civil Code apply in a suppletory character" which, of course, imposes

tender of payment or judicial consignation of the repurchase price as condition for valid redemption. Besides, it is

noteworthy that in that case petitioners-tenants' possession of funds and compliance with the requirements of

redemption were not questioned, the case having been submitted and decided on the sole legal issue of the right of

redemption being available to them as share tenants.

4. As a consequence, the Court of Agrarian Relations has jurisdiction over suits for redemption, like the

present case, of sugar and coconut lands. Section 154 of the Agricultural Land Reform Code, as amended, states: "The

Court of Agrarian Relations shall have original and exclusive jurisdiction over (1) all cases or actions involving matter,

controversies, disputes, or money claims arising from agrarian relations . . ." Since this case involves a matter,

controversy or dispute "arising from agrarian relations" — whether respondent-tenant on sugar and coconut lands has

the right of redemption — it is definite that the Agrarian Court has jurisdiction to hear and decide the same. 13 The Court

of Agrarian Relations came into being for the enforcement of all laws and regulations governing the relations between

capital and labor on all agricultural lands under any system of cultivation with original and exclusive jurisdiction over the

entire Philippines, to consider, investigate, decide and settle all questions, matters, controversies, or disputes involving

or arising from such relationship. 14

ACCORDINGLY, the appealed decision of the Court of Appeals is hereby reversed and set aside. Respondent

Eulogio Gonzales is hereby held not to have validly exercised his right of redemption over his tenanted agricultural land.

No costs.

SO ORDERED.

D. Lawful Consideration

- Case: Tan vs Pollescas (G.R. No. 145568)

Bef or e t h i s Cour t i s a p etiti on f or certiorar i und er Ru le 65 of the Ru les o f Co urt qu es tion ing the

Dec i s io n [ 1 ] dated J anuar y 1 4 , 19 9 9 pr omul gat ed b y th e Co urt o f Ap pea ls ( CA) in CA-G. R . SP No. 4 39 05 whi ch

affi rmed in toto the Dec i s io n dat ed J un e 1 0, 19 94 of the Adju di cation Bo ard o f th e D ep artment o f Agr ar i an Refo rm

(DARAB) ; and the CA Res ol utio n [ 2 ] dated Nov ember 8 , 19 99 w hi ch deni ed t he petitio ners ’ Mo tion fo r Reco ns i deratio n.

The p eti tion o r i g i nated f ro m a n action fo r e jectment fi led wi th t he D ARAB p r i nc i pa l ly o n the gro und s of n on-

pay ment of lease renta ls an d sub- l eas ing wi tho ut the know ledg e an d con sent of the own er s of a parce l of

agr icu l tu ra l lan d, co ns i sting of 2 . 22 7 7 hectar es , mor e o r l es s , dev oted to r i ce a nd mango pro duc tion, lo cated at

Baran gay O bon g, Bas i s ta , Pan gas i nan and reg i s tered in the n ame of N i co l asa Tamond ong Vda. d e Perez , predecesso r-

in - i nter est of th e petitio ners , und er Tra nsfer Certifi cate o f T i t l e (TCT) No. T - 31 82 2 .

The fa cts d ec l ar ed by th e DARAB, as su ppo rted by the ev i dence on reco rd, ar e c l ear :

On Ja nuar y 28 , 19 73 , N ico l asa Tamo ndo ng Vda. de P erez so l d the pr op er ty wi th a r ig ht to repur chase i n fav o r of [ r es pon dent] Mi gu el Res u l t ay w ho w as a l r eady c u lti vati ng the sub ject l and und er a 5 0 -5 0 shar in g ba s is of th e r i ce har vest . After sa i d sa le , Mig ue l Resu l ta y s top ped d el i ver i ng the sh ares t o N ico la sa Tamon don g an d i t w as d ur i ng th i s p er i od or so metime i n 19 76 , that [ r espon dent] Mi gue l Resu l tay co nstitu ted [ respo ndent] Bas i l io Cay aby ab to wo rk o n a on e- ha l f (1 /2 ) hectar e po rtio n o f the l and dev oted to r i ce u nder an ag reed lease rent a l ag reement o f sev en (7) cav ans p er c r opp in g seaso n (T .S .N . , Febr uar y 16 , 19 89 , pp. 7 -9 ) .

On Ju ly 1 5 , 1 9 77 , N ico la sa Tamon don g Vd a. de P er ez d ied. She i s surv i ved by her ch i l dren

[p eti tioner s her e i n] . On N ov emb er 29 , 1 98 3, [petiti oners ] P ur i fi cac io n and F eder i co Ros ar i o repu rcha sed the

subj ect p rop er ty f ro m [r espon dent] Mi gue l Resu l tay i n th e tot a l amoun t o f P 16 ,0 0 0. 00 as ev i denced by a docu men t denomi nated as D EED OF RESA LE O F LAND U NDER PACTO DE RETRO . Thereafter , defend ant Mi gu el Resu l tay r es umed h i s de l i v er y of 5 0% shar e of th e r i ce har vest to the p la i ntiff s-he ir s [ petitio ners ] th ro ugh [p eti tioner s ] Pur i ficac i o n an d Feder ico Ro sar i o on the p orti on of 1 .6 hectar es of th e lan d p l ant ed to r i ce [ s i c ] whi l e the o ther one- ha l f h ec tare p orti on of th i s 2 . 2 27 7 of hectar es la nd [ s i c ] con tinued to be cu l tiv ated b y defenda nt Bas i l io Cay aby ab who th en dea l t d i r ect ly wi th [ petition er s ] P ur ifi cac i on a nd Feder i co Ro sar i o . On Nov ember 2 8, 1 9 86 , Bas i l i o Ca yab yab depo s i t ed wi th the Gang ano’ s F ami l y R i ce Mi l l a t Ma l i mpec , Bayamb ang, P angas i nan a t ota l o f fo urt een (1 4) cav ans at fo rt y- fi ve ( 45 ) k i l os per cav an of pa l ay .

On December 20 , 1 9 86 , [petitio ner] F ed er ic o Ro sar i o rece i ved f ro m [ respo ndent ] Bas i l i o

Cay aby ab s ev en ( 7) cav ans at fo rt y- fi ve ( 45 ) k i l os per cav an of c l ean an d dr y pa l ay r ep resenting l eas e renta l f or 1 98 4 and a l so sev en ( 7) cav ans at f or ty- fi ve ( 45 ) k i l os per c avan of c l ean a nd d ry pa l ay repr es en ting lease r enta l f or 19 8 5, or a tota l o f fo urt een (1 4) cav ans o f c lean and dry pa l ay .

On Febr uary 1 , 19 89 , [p eti tioner ] Pur ifi cac i on Rosar io rece iv ed f ro m [ respo ndent] Bas i l i o

Cay aby ab t he to ta l amou nt o f Php 2 ,5 11 .6 0 repr esen ting the l ease rent a ls fo r 19 85 an d 1 98 6 . [ 3 ]

On Febr uary 1 6 , 1 98 9 , [ petitio ner] P ur i fi cac i on Rosar io rece iv ed f ro m [ respo ndent] Cay ab yab

the amo unt of P 1 , 22 8 .5 0 repr es en ting the l ease renta l fo r 1 98 8 . On May 2 5 , 19 9 0, [ petitio ner] Feder i co Rosar io rece iv ed f r om [ respo ndent] Cay aby ab sev en

(7 ) cav ans of pa lay at 4 5 k i l os per c avan . On December 11 , 1 99 0 , [p eti tion er ] Feder ico Rosar io rece iv ed f r om def en dant Cay aby ab

seven (7 ) cav ans of pa l ay . So metime i n 19 88 , [ respo ndent ] Mi gue l Resu l tay wh o i s a l r ea dy o l d and sen i l e wa s

par a ly z ed . How ev er , [ the] shar es of [ petitio ner] Pu r i fic ac io n Ro sar i o f r om the r ice h arv est w er e be in g d el i ver ed .

On N ov emb er 24 , 1 98 8, [petiti oners ] fi led th e i nsta nt comp la i nt f or e j ec tmen t of d ef endan ts

f r om the l and o n the gro und s that : a ) [ resp ond en t] Mi gue l Resu l tay de l iv ered o n ly 3 3. 3 0 cav ans o f pa l ay t o them (p l a i ntiff s) ; b ) [ resp ond en ts ] Mi gue l Resu l t ay an d Feder i co Bani qu ed c onst ruct ed t he ir ow n res i dential hou ses on th e su bject l andh ol d i ng w ith out t he ir kn owl edge and c onsent ; c ) [ r espon dent] Mi gu el Resu l tay i s no w o ld an d sen i le and i s no l o nger cap abl e o f do in g the necessar y manual w or k ; and , d ) du e to o l d a ge , [ resp ond en t] Mig ue l Resu l tay sub- leased the l and to [ r espon dents ] F ed er ico Ban iqu ed and Bas i l i o Cay aby ab wi thou t [ petitio ners ’ ] kn ow ledg e and cons en t .

[Respo ndent s ] co ntr ov er ted the a l legati ons o f [ petitio ners ] by a verr in g that : 1 ) [ respo ndent]

Feder i co Bani qued is on ly a h i red f arm wor ker w ho con stru cted a shanty ins id e the d i spu ted la ndho ld in g fo r the pu rpo se o f g uard in g the p l ants i ns i de the lan d; 2) [ r esp ond en t] Mi gue l Resu l t ay has been cu l tiv ating t he l and s in ce 1 97 3 a nd he had co nstr ucted h i s ho use on th e l and i t se l f ; 3 ) the net h arv es t du r i ng the ag r i cu l tura l year of 1 98 7 was twenty - on e (21 ) cava ns an d o ne (1 ) c an, and i t was d i v i ded int o 5 0 -5 0 bas i s ; 4 ) [ r es pon dent] Bas i l i o Cay aby ab i s an ag r i cu l tur a l lessee o n a po rtio n

of one- ha l f hectar e o f th e l and p ay i ng a l ease renta l of seven (7 ) cav ans o f pa l ay ; and 5 ) the lease renta l of seven (7 ) cav ans w hi ch i s b e i ng p a id by Bas i l i o Cay aby ab i s excess iv e a nd unj ustifi abl e con s id er i ng t hat h e can pro duce 1 4 to 18 ca van s o f p a lay . [ 4 ]

The O ffi ce o f th e P ro v i nc i a l Agrar i an Ref or m A dju dic ator identi fied th e i ssues as f o l l ows : first , wh et her

respo ndent Mig ue l Res u l t ay or h i s w i f e , r espo ndent Mer ced es Resu l tay , i s en tit l ed to remai n as agr icu l t ura l l essee

of th e lan d i n q uestio n wi th respo ndent Feder i co Bani qued as t he ir h i red far m wo rker ; and, secon d, wheth er

respo ndent Bas i l i o Cay aby ab i s en tit l ed t o remai n as an ag r i cu l tura l l es see o n the one- ha l f hectar e r i ce l and p or tion

of th e lan dho ld ing i n q uestion . [ 5 ]

On Ju ne 1 4, 1 99 1, the Offi ce of th e Pr ov i nc i a l Agra r i an Refo rm Adju di cator pr omul ga ted i t s d ec i s i on , t he

d i spo s iti ve p or tion of wh ich read s :

WHEREFO RE, j udgment i s hereby r endered: 1 . Dec l ar i ng [ r es pon dent] Mercedes Resu l tay as hav i ng succeeded [ respo ndent ] Mi gu el Resu l tay as ag r i cu l tur a l less ee o f the l and in qu esti on as o f the time th e fo rmer suff er ed a s t ro ke whi ch par a ly z ed h i m; 2 . D i spo ssess i ng th e [ respo ndent ] Bas i l i o Ca yab yab fo r de l i ber ate n on- pay ment of the 19 8 6, 19 8 7, 19 8 8 and 1 9 89 l ease renta l of the o ne-h a l f ( 1/2) hectar e r i ce la nd p or tion until t he fi l i ng of th is comp la i nt aga i nst h i m; 3 . Or der i ng [ respo ndent ] Feder ico Bani qued to r e fra in f ro m f ur ther per f or min g far mwo rks on the r i ce lan d i n questio n; 4 . D i spo ssess i ng [ respo ndent ] Mercedes Res u l tay f ro m the r i ce l and por tion o f th e l and i n questio n wh ich s he r eta in ed after g i v in g the on e- ha l f (1 /2) h ec tare po rtio n to [ respo ndent ] Bas i l i o Cay aby ab; 5 . Main ta i n i ng [ resp ond en t] Mer cedes Resu l tay as agr icu l tu ra l l essee on the n on- r i ce la nd p or tion of th e lan d i n q uestio n. [ 6 ]

In sup por t o f the f or eg oi ng , th e Offi ce o f t he Pr ov i nc i a l Agr ar i an Ref orm Adj udi cato r h el d that a l th oug h

respo ndent Merc ed es Resu l tay succeeded resp ond en t Mi gu el Resu l tay a fter a s t r oke whi ch caus ed h is p ara l y s is , she

d i d n ot per fo rm the f arm w or k on the l and i n q uestion ; tha t , f or th is reaso n, she h i r ed respo ndent Feder i co

Bani qued to wor k f or her ; that the h i r i ng o f r espon dent Ban iq ued amo unted to a “ subs tantial n on- co mp l i ance of

her ob l i gatio n” as an agr icu l tu ra l tenant and a gr oun d f or d i spo ssess i on und er Sectio n 36 , p arag raph 2 , [ 7 ] o f

Rep ubl ic Ac t No. 38 44 , as amend ed ; that a l tho ugh t he r ecei pt o f th e l ease r enta l s by petition er Feder i co Ro sar i o i s

in d i cativ e o f resp ond en t Caya by ab’s s t atus as an ag r i cu l tur a l l essee o n the on e- ha l f h ect are r i ce lan d por tio n, he

sho ul d be ev i c ted on the gro und of de l i berat e r ef usa l to p ay r en ta l ; that resp ond en t Bani qued i s mer el y a h i r ed

far m l abo rer a nd, thus , h e “h as no b etter r i gh t tha n ( r espon dent) spo uses Mi gue l Resu l tay an d Mercedes Resu ltay

who h i r ed h i m;” and that the no n- r i ce lan d p orti on where respo ndent spo uses Resu l tay r es ide does not appear to

hav e b een su bl eas ed o r g i v en to any th i r d part y f or f arm wo rk and , hence , th ey sho ul d remai n i n pos ses s io n o f the

same. [ 8 ]

Res pon dents a ppea l ed to the D ARAB. On Ju ne 1 0, 1 99 4, the DARAB pr omul ga ted i t s d ec i s i on , t he decreta l

po rtio n o f whi ch s tates :

WHEREFO RE, the assa i led j udg ment d ated Ju ne 14 , 1 99 1 i s h er eby REVERSED a nd SET AS I DE . Mig ue l and Mer cedes Resu l tay ar e dec lar ed to be agr i cu l tur a l tenant s o n th e lan d th ey ti l l . L ikewi se , Bas i l io Caya by ab is mai nta ined i n peacefu l po ssess i o n and enj oy men t of the lan d he ti l l s as an agr i cu l tura l l essee . The resp ons i b l e o ffici a l s o f the Depa rtment of Agr ar i an Ref or m in the Pr ov i nce of Pan gas i nan, sp ec i fi ca l ly i n the Muni c i pa l i ty of Bas i s ta , Pan gas i nan are h er eby or dered t o fi x t he l eas e renta l o n t he l and be ing cu l tiv ated by Mig ue l and Mer cedes Resu l tay i n acco rdan ce wi th p er tinent agr ar i an l aw s , r u l es and regu lati ons . IT IS SO O RDERED. [ 9 ]

The DARAB dec lar ed th at r esp ond en t Cay aby ab is a bona fi de agr icu l tu ra l l essee; that he su bstan tial l y co mpl ied

wi th h is ob l i gati on to de l i v er th e lan dho ld er s ’ shar e and was not remi ss i n p ay ing th e renta l s w henever they f e l l

due ; that h e co ul d no t be f au l ted fo r seemin g l y d el ay ed pay men t of l ease renta l s aft er the ins titutio n of the

comp la i nt on Nov ember 2 4 , 1 9 88 , n or co uld he b e b l amed fo r the co nf us i on in the a ccoun ting and l i qu ida tion of

har vests s i nce the petitio ners g ave r i se to i t by re fu s i ng to r ecei v e p ro mp t l y h i s tender o f l ease renta l s ; that

petitio ner P ur ifi cac i on Rosar i o h er se l f ad mi tted in her tes timony that she rece i ved the r en ta l pay ments ; that the

con c lu s io n that respo ndent Mer cedes Resu l tay , a s suc ces sor of h er o ld and para ly z ed hus band Mig ue l Resu l ta y , d i d

no t herse l f per f or m t he f arm w ork o n the la nd had n o fac tua l bas i s ; that th e b urden to pro v e th e av erment tha t she

d i d no t actua l l y per fo rm her ob l i gati ons as a n agr i cu l tu ra l ten ant rest ed w it h the petition er s and th ey f a i l ed to

d i schar ge th at bu rden; that the h i r ing o f t he serv i ces of a far m l abor er t o d o c er ta i n p i ece wo rk or on an occas i o na l

bas i s i s not p ro hib i t ed b y l aw, as lo ng as th e ag r i cu l tur a l tenan t herse l f cu l tiv ates the far m and manag es i t wi th d ue

d i l i gence ; th at the h i r i ng o f a far m lab orer t o do a c er ta i n phase o f far min g i s , i n i t se l f , a genera l l y acc ep ted

pra ctice i n a f armi ng co mmuni ty ; that resp ond en t Mer cedes Resu ltay had f a i thf u l ly and r e l i g i ous ly shar ed the r i ce

pro duc e wi th t he p eti tioner s ; that th er e i s no lega l i mpediment f or respo ndent Mi gue l Resu l ta y to bu i ld h is h ous e

wi th i n t he l andho l d i ng , and ne i t her d id petitio ners adduc e any co ncrete ev id en ce to sho w t hat r espo ndent Ba niq ued

had co nstr ucted a ho use thereo n, s i nce Bani qued, who i s o n l y a f arm he lp er , mere l y bu i l t a shan ty w hi ch i s not a

dwel l i ng co ntempl ated by law ; tha t petitio ners fa i l ed to pr ov e the ex i s tence o f any o ther law fu l ca use f or the

e jectment o f the r es pon dents ; and that s in ce the j ur i d i ca l r e l atio nshi p between th e par ties app ear s to b e a sha re

tenancy wh ich i s co ntra ry to l aw and p ubl ic p o l ic y , i t sh oul d be co nver ted to a l ea seh ol d pur suan t to l aw and

ex isti ng r u l es and regu lati ons .

On Febr uary 1 1 , 1 99 7 , t he DARAB d en ied petitio ners ’ Motio n fo r Recon s i deratio n.

On Apr i l 1 6 , 1 99 7, petiti oners fi led a P etiti on fo r Rev iew wi th the CA, ra i s i ng the f o l l owi ng gr ou nds:1 . That pub l i c resp ond en t Adju di cation Bo ard g ro ss l y mi sapp rec i ated the es tab l i s hed facts a nd ev i dence ad duced in the ab ov e-entit l ed c ase ; 2 . That t he Dec i s i on dated Jun e 10 , 19 94 an d Reso luti on dated Febru ary 1 1, 1 99 7 render ed by pub l i c respo ndent Ad jud ica tion Bo ard i n the i nstan t case , were co ntra ry to ex is ting ag rar ian l aws a nd ju r i spru dence app l i cab l e o n th e matter at i s sue ; an d 3 . That due to publ i c respo ndent Adj udi catio n Boa rd’ s patent and gro ss err ors c ommi tted i n th e i s suances of the assa i led Dec i s io n a nd Reso lu tion, petiti oners suff ered n ot on l y i r r ep arabl e da ma ge and pre j ud i ce but a l so caused grav e i n j ustice t o p eti tioner s . [ 1 0 ]

On Ja nuar y 1 4, 19 99 , th e CA rend er ed the assa i l ed D ec is i o n whi ch affi rmed in toto the DARAB ru l i ng . In

par ticul ar , the CA agr eed wi th the DARAB that no fact ua l bas i s suppo rt ed the av erment that respo ndent Mer cedes

Res ult ay d id n ot co mply wi th h er ob l i gatio ns as an ag r i cu l tur a l tenan t ; that th e h i r ing of a f arm he l per i n i t se l f i s

no t pr ohi b i ted; that the l and in questi on had not been aba ndo ned as i t i s activ e ly be ing cu l tiv ated by the

respo ndent s ; th at r esp ond en t sp ous es hav e been pa y i ng the i r s hares and renta l s t o t he l ando wners , h er e i n

petitio ners ; th at respo ndent Mercedes Resu l tay succeeded her i ncapac i tat ed h usban d, co -r espon dent Mi gue l

Res u l t ay , by opera tion o f l aw; th at respo ndent Cay aby ab i s a bona fide agr icu l tu ra l lessee on t he o ne-h a l f hectar e

r i ce lan d p orti on; that the ev id en ce c l ear ly show s th at h e pa i d th e lease r enta l s f ro m 1 98 4 to 19 89 ; t hat t here was

no d el ay in p ay ment ; that petitio ner P ur i fi cac i on Ros ar i o admi tted the rece i pt of these pay men ts ; that w hi le the

wi thdr awal o f depos i ted renta l s by the p eti tion er s l i tis penden tia sho ul d no t b e con stru ed as a reco gni tio n o f the

tenancy r e lati onsh ip between them and respo ndent Cay aby ab, the f act that petition er F ed er ico Ro sar i o rece iv ed o n

December 20 , 1 98 6 t he l ease renta l perta in i ng to 1 98 4 as w el l as the renta l fo r 1 98 6 i s i ndeed in d ic ative o f

respo ndent Cay ab yab ’s s tat us as an ag r i cu l tura l l es see o f the on e- ha l f h ect are ; and th at respo ndent Cay aby ab h ad

no con sc i ous i ntent t o u n l awf u l l y depr i ve th e la ndho ld er s o f the i r sh are i n the f arm p roc eeds , co ns i der i ng that they

had rece iv ed f ro m Cay aby ab in 19 8 9 and 1 9 90 th e renta l s f or th e oth er y ears . [ 1 1 ]

Petitio ners mo ved to recon s i der , bu t the CA deni ed t he mo tion thro ugh i t s Reso lu tion d ated Nov ember 8 ,

19 9 9, a co py o f whi ch w as r ecei v ed by t he petitio ners on Nov ember 1 5 , 1 9 99 .

Twenty -t wo d ays l a ter , or o n December 7 , 19 99 , p etiti oner s fi l ed the in stant P etition f or Certiorar i und er Ru le

65 .

Petitio ners ra i se th e fo l l o wi ng i ssu es befo re t h i s Co urt :

1 . Whether or no t p ubl ic respo ndent s Ho nor abl e Cou rt of Appea l s a nd Ho no rabl e Adj udi catio n Boar d (DARAB) g ro ss l y e rr ed in d ec l ar ing pr i v ate r espo ndents Mercedes Resu l tay and Bas i l i o Cay aby ab as agr ic u l t ura l l essees o ver the l and hol d i ng co- ow ned b y the petiti oners ;

2 . Whether or no t th e dec l aratio ns of pr iv ate r es pon dents a s agr i cu l tura l l essees by the pub l i c respo ndent s are cont rar y to the es tab l i s hed facts , addu ced ev i dences [s ic ] , l aw and ju r i spru dence app l i cab l e o n th e matter ; a nd

3 . Whether o r no t ho nor abl e p ubl ic r es pon dents co mmi tted gr av e abu se o f d iscr etion i n dec l ar i ng pr iv ate resp ond en ts as agr icu l tu ra l lessees ov er th e l andh ol d i ng co -o wned by the petitio ners . [ 1 2 ]

Mea nwhi l e , on May 3 0 , 20 0 2, Ar tur o Resu l tay , on e o f th e ch i l dren o f r esp ond en t Mig ue l Resu l tay , as we l l as

respo ndent Cay aby ab, fi led a Mani festa tion and Motio n w it h th e Cour t s t ating that respo ndent Mig ue l Res u l t ay had

passed away o n Ju ly 6 , 19 9 3. Hence , a s pr ay ed fo r , Mi gue l Resu l tay i s deemed su bstitu ted by Ar tur o Resu ltay . The

par ties sub mitted the ir r es pective memo rand a.

The i nstan t P etiti on fo r Certiorar i “b ased o n Rul e 6 5” mu st f a i l .

U nder Ru l e 6 5 , the petitio ners must s how that th ey hav e no p l a i n , s peed y, and adequ ate r emedy i n the

or d i nary c our se of l aw aga i nst the err or th at th ey s eek to co rr ec t . A r emedy i s cons ider ed “ p l a in , sp eedy , and

adequat e” i f i t wi l l pro mpt l y re l iev e the p eti tion er s f ro m the i n j ur i o us eff ect s o f t he ju dgment and the acts of th e

lo wer cou rt or agency . [ 1 3 ] In th i s case , a n app ea l under Ru l e 45 by w ay of p etiti on fo r r ev i ew o n certiorar i was not

on ly av a i l ab l e but a l so a sp eedy and ad eq uate remedy . [ 1 4 ] When the petitio ners r ece i v ed o n No vember 1 5, 19 99 a

cop y of the CA Resol utio n d ated No vember 8 , 1 99 9 deny i ng t he ir Moti on fo r Reco ns i deratio n, and absent any mo tion

fo r extens io n, they had unti l Nov ember 3 0, 1 99 9 , o r 15 day s la t er , w it h i n wh ich to per f ect th ei r appea l . They d i d

no t . What th ey cho se to do was to fi l e a “ P etiti on f or Certiorar i ” “ based o n Sectio n 1 , Ru le 6 5” onD ec ember 7 , 1 99 9 ,

repeating i n essenc e the i ssues and argu men ts a l ready heard by the CA . The petitio ners canno t l o dge a spec i a l c iv i l

actio n of certiorar i to make go od th e l os s of t he r ig ht o f or d i nary app ea l . In v i ew of th i s ser i ous p ro ced ura l e rr or ,

the i nst ant p eti tion sho ul d be d is miss ed .

U nder Ru le 4 5 , th e reg l emen tary p er io d to appea l i s 1 5 day s f ro m no tice of j udg men t o r d en ia l o f the mo tion

fo r recon s id er atio n. Ru l e 45 i s c l ear that dec is io ns , fi na l or ders or reso lu tion s o f t he CA i n any case , i . e . , regar d less

of the natur e o f th e acti on o r pr oceedi ngs i nv ol v ed , may b e ap pea led to th i s Cour t by fi l i ng a petitio n fo r r ev i ew ,

whi ch wo uld be b ut a con tinuati on of the a ppe l l a te p ro ces s o ver the o r i g i na l cas e. [ 1 5 ] A sp ec i a l c i v i l acti on under

Ru l e 65 o f t he Ru l es of Co urt wi l l not cur e the f a i l ur e to timely fi l e a p etiti on fo r r ev i ew o n certiorar i und er Ru l e 45

of the Ru les o f Cou rt . [ 1 6 ] The r emed ies of appea l in t he o rd in ary cour se of l aw an d that o f certiorar i und er Ru le 65 of

the Rev i sed Rules o f Co urt ar e mut ua l ly exc lu s iv e and no t a l ternativ e or c umul ativ e. [ 1 7 ] A petitio n under Ru l e 6 5 i s

an i nd ep en dent ac tion that canno t b e av a i l ed o f as a substi tute f or the lo st r emedy of an ord in ary ap pea l , i nc l ud i ng

that und er Ru l e 45 , espec ia l l y i f s uch lo ss o r lap se was occa s io ned b y on e’ s o wn

negl ect o r e r ror i n t he cho ic e of remedi es . [ 1 8 ] And under Sectio n 5 ( f ) o f Ru le 5 6 of th e Ru l es of Co urt , an erro r in

the ch oi ce or mo de of ap pea l , as i n th i s cas e, mer i t s a n o utr i gh t d i smi ssa l .

But ev en i f th i s Co urt sho ul d excus e the pr ocedu ra l l apse i n the i nterest of su bstan tial ju stice , t he same

resu l t o bta i ns , b eca use the dec is i o ns and r es o l utio ns of the DARAB and CA , as we l l as th ei r fi ndi ng s of fact , a re in

acco rd wi th l aw and jur is pru dence .

The determi natio n o f perso na l cu ltiv atio n i s a fa ctua l i s sue a nd r equi res t he exer c i se of a fun ction no t wi th in

the p rov i nce o f th i s Co urt . Wel l estab l i shed i s the r u l e that i n an appea l v i a c erti orar i , on l y qu esti ons of l aw may be

rev iewed. [ 1 9 ] And so, to o, i s th e ru l e th at i n ag rar ian cases , the on l y f unctio n o f the ap pe l l a te co urt s i s to d eter mine

wheth er the find in gs of fact o f th e ag rar ian c our ts , su ch as the DARAB o r , i t s pr ed ec ess or , the Cou rt of Agr ar i an

Rel atio ns , a re suppo rt ed b y su bstan tial ev id en ce, and wh er e t hey ar e so supp or ted, suc h fin din gs ar e co nc l us i ve and

b i nd i ng upo n t he appe l l a te cou rts . [ 2 0 ]

Petitio ners in s i s t th at r es pon dent sp ous es Mig ue l and Mer cedes Resu l tay d i d not per f or m i n th ei r perso na l

capac i ty the majo r ph ases of t he f arm wo rk o ver th e l and i n qu es tion, but th ro ugh h i r ed h ands . Both t he CA an d the

DARAB are of the same opi n i on t hat th i s negati ve av er men t has no factu a l b as is . Whi le i t i s co nceded i n a l l qu arters

that respo ndent Bani qued is a h i r ed far m wo rker , f ro m th i s f act a lo ne , i t canno t b e in ferr ed th at r esp ond en t

Mer cedes Resu lt ay i s no t actua l l y per fo rmi ng her o b l ig ation s as an agr ic u l t ura l tenant o r , s tated ot herwi se , th at she

d i d no t cu l tivat e th e l and i n pers on o r thr ou gh ot her memb er s of the immedi ate hou sehol d . U nder Sectio n 3 7 of

Rep ubl ic Ac t No. 38 44 , as amend ed , and co upl ed wi th th e f act that th e p etiti oner s are the compl a i nant s themse lv es ,

the bur den of pro of to sh ow th e ex i s tence of a l awf u l cause fo r th e e jectment o f an ag r i cu l tur a l l essee r es ts upo n

them, s in ce they ar e the ag r i cu l tur a l lesso rs . [ 2 1 ] Th i s pr oceeds f ro m th e pr i nc i p l e tha t a t en ancy r e l atio nshi p , o nce

estab l i shed, entit les the tenant t o a secur i ty of tenur e. She can o n l y be e jected f ro m th e ag r i cu l tur a l l andh ol d i ng

on g ro unds p ro v i ded by la w. [ 2 2 ] Sectio n 36 of the same l aw enumer ates the gro und s fo r d i spo ssess i on o f th e

tenant ’ s l and hol d i ng . Sec . 36 . Possess i on o f Landh ol d in g; Excepti ons . - Not wi thstan di ng any agr eement as to the

per i od or f utur e sur render , o f the l and, an agr icu l tu ra l l essee sha l l co ntinue in the en j oy ment a nd po ssess i on o f h i s l andho l d i ng except when h i s d i spo ssess i o n has been auth or i z ed by t he Co ur t in a ju dgment that i s fin a l and execut or y i f aft er du e hear i ng i t i s sh own that :

(1 ) The a gr i cu l tur a l l esso r - own er or a member o f h i s i mmedi ate fa mi l y w i l l perso na l ly cu l tiv ate the l and hol d i ng or w i l l con ver t the lan dho ld i ng , i f su i tab ly l oc ated, int o r es id en tial , fact or y , hosp it a l o r scho ol s i te o r o ther us ef u l non -ag r i cu l tura l pu rpo ses : Pr ov id ed ; Th at the agr icu l tu ra l lessee sha l l b e entit led to d i s tur bance comp en sation eq uiv a l ent to fi v e y ears r en ta l o n h i s lan dho ld in g in a ddi tion t o h i s r i gh ts under S ection s twenty - fiv e a nd th i r t y- fo ur , excep t when the la nd ow ned and l eased by the agr i cu l tur a l l esso r , i s no t mor e th an fiv e hectares , in w hi ch case in stead of d i s tur bance co mp en satio n the lessee may b e entit led to an adv anced no tice of a t l east o ne agr icu l tu ra l y ear befo re e jectment pro ceed in gs a re fi led aga i nst h i m: P rov i ded, fu rther , That sho ul d the l and hol der not cu l tiv ate th e lan d h i mse l f f or th ree y ear s o r fa i l to sub stantial l y carr y ou t su ch con vers io n wi th i n o ne y ear aft er the d i spo ssess i on o f the tenan t , i t sha l l b e pr esumed that he acted in bad fa i th a nd the tenant s ha l l hav e the r i ght to demand po ssess i on of t he l and a nd reco ver damages fo r a ny l oss in curr ed by h im because o f sa i d d i spo ssess i o ns .

(2 ) The agr ic u l t ura l l essee fa i l ed to su bstan tial l y co mpl y wi th a ny of th e terms a nd

con di tions o f th e co ntr act or any of t he p ro v i s i ons o f th is Co de un l ess h i s fa i l ure i s caused by fo rtu i to us ev ent or forc e maj eure ;

(3 ) The agr ic u l t ura l l essee p l anted cro ps o r used t he l andho l d i ng f or a pur pose other than what had been pr ev i ou s l y agreed upo n;

(4 ) The a gr i cu l tur a l l essee f a i led to ado pt pro v en f arm pr actices as determi ned un der par agrap h 3 o f Section twent y- n i ne ;

(5 ) The l and or oth er su bstan tial permanent i mpro vement thereon i s su bstanti al l y damaged or destr oy ed o r has u nreaso nabl y deter io rated thr oug h th e fau l t or neg l i gence o f t he agr icu l tu ra l l essee;

(6 ) The a gr i cu l tur a l l essee d oes no t pay the lease renta l wh en i t f a l l s du e: P ro v i ded, Th at i f th e no n-p ayment of th e renta l s ha l l be due t o c rop f a i l ur e to the extent of sev en ty- fi ve p er centu m as a resu l t o f a fo rtu i to us ev en t , the no n- pay men t sha l l n ot be a gr oun d fo r d i spo ssess i on , a l thou gh the o b l ig ation to pay t he rent a l due th at pa rticul ar c ro p i s not ther eb y exti ngui shed; or

(7 ) The l es see empl o yed a su b- l essee on h i s l and hol d i ng i n v i o l ation o f t he terms of par agrap h 2 o f Section twent y- sev en .

The petitio ners fa i l ed to d i schar ge th at b urden. They in vo ke Gabr i e l v . Pan gi l i nan [ 2 3 ] wher e the Co urt he ld :[ 2 4 ]

A perso n, i n o rder to be cons ider ed a t en ant , mus t h i ms el f an d wi th the a i d av a i l ab l e f r om

h i s immedi ate far m h ous eh ol d cu l tiv ate the lan d. P erso ns , t herefo re , wh o do not ac tua l ly wo rk the la nd cann ot be con s i dered tenants ; and he who h i res oth er s who m he pay s fo r do in g the cu l tiv ation of the lan d, ceases to h ol d , an d i s c ons i der ed as h av i ng abando ned the l and as tenan t wi th i n the mea nin g of section s 5 and 8 of Rep ubl ic Act N o. 11 99 , an d cea ses t o en jo y the s tatus , r i ght s , and pr i v i l eges o f on e.

But prec i se l y , as d i scuss ed abo ve , i t fa l l s upo n the

petitio ners to demo nst rate th ro ugh subs tantial ev id en ce that the r espon dents d i d no t ac tua l ly c u lti vat e the l and in

or der to c ons i der t he l atter as h av i ng ab ando ned the same. I t do es not f o l l ow th at , i f th e tenan t h i res a far m w or ker

to do certa i n phases of the f arm wo rk , then t he tenant entire l y ceases a l l cu l tiv atio n.

Res pon dent Ban iqu ed h i mse l f testi fied that he was be in g p a id fo r a cert a in phas e of wo rk . [ 2 5 ]

In the recent p ast , the Co urt has he ld that the empl o yment of f arm l abo rers to per f or m so me aspects of fa rm

wo rk d oes no t pr ec lud e the ex i s tence o f an ag r i cu l tur a l leaseho ld re l atio nshi p , pr ov id ed tha t an agr icu l tu ra l l essee

do es n ot l ea ve the entire pro cess of cu l tiv ation i n th e ha nds o f h i red he l pers . In deed , wh i l e t he l aw exp l i c i t ly

requi r es th e ag r i cu l tur a l l essee an d h i s immedi ate fami ly to wor k on th e l and, th i s Cour t nev er the l ess h as dec l ared

that the h i r in g o f far m la bor er s b y the tenan t o n a tempor ary , occas io na l , or emer gency bas is do es no t negat e the

ex is t en ce of the e l emen t o f “ per sona l cu l tivati on” essenti al in a t en ancy o r ag r i cu l tur a l leaseho l d r e l atio nshi p . [ 2 6 ]

The f or egoi ng pro nou ncemen ts are no th i ng new ; t he Co ur t , qu oting es tab l i s hed autho r i ty , has r ecog niz ed as

far bac k in 1 96 2

that the mere f act that the ag r i cu l tura l lessee d i d not do a l l the w ork h i msel f but tempo ra r i l y uti l i zed t he serv i ces

of o thers to he lp h i m, does not mea n th at he v i o l ated the requ ir ement s pr ov i ded by law and ju r i spr udence ; i t w ou ld

hav e been o therw ise

had the less ee entire l y en trusted the w or k to oth er per son s and

emp lo y ed l abor ers on a perman ent bas i s . The l aw do es no t pr ohi b i t the tenan t o r th e la ndo wner who wo rks the l and

h i mse l f to av a i l occas i o na l ly o f the he l p o f oth er s . [ 2 7 ]

Petitio ners main ta i n th at r es pon dent sp ous es Res u l tay sub - l eased a por tion of th e la nd i n questio n to

respo ndent Cay aby ab, and that the empl oy ment of a su b- lessee wh o is not a member of the ten ant ’ s i mmed iat e

ho usehol d , and wi tho ut the kno wl edge and con sen t o f the l ando wner , i s p ro hi b i t ed by l aw. [ 2 8 ] To s uppo rt th i s

con tention , petitio ners r ef er to a d ec i s i on r endered by the CA. [ 2 9 ] Fur ther , petition er s av er that r esp ond en t

Cay aby ab de l iber ate ly re f used to p ay th e l ease r enta l s fo r the per i o d cov er i ng 1 98 6 t o 19 8 9. Even i f Cay aby ab

attempted to p ay th e r en ta l s by d ep os i ting them dur i ng the pendency of the case , petitio ners ar gue , th ei r

wi thdr awal , h owev er , w as made w it h leav e o f co ur t , pr ompted b y extreme human n eeds , and o n the con diti on th at

the r ec ei pts sha l l no t b e used as ev i dence o f any tenan cy re l ation shi p .

These mi xed questio ns o f fa ct and l aw are i nterr e l ated, and hav e been c orr ect l y r eso l ved by the CA and th e

DARAB who se dec is io ns ar e su ppo rted by subs tantial ev i dence as i t appears o n the reco rd. Th i s Cour t affir ms the CA

dec i s io n w hi ch , in tur n , uph el d in tot o the D ARAB’s fi nd in g th at r es pon dent Cay aby ab i s a bona fi de agr icu l tu ra l

less ee , [ 3 0 ] as w el l as the fi ndi ng that he d u ly pa i d th e renta l s , to wi t :

There i s n o fac tua l bas i s whi ch sh a l l lead t o a con c lu s io n tha t [ r esp ond en t] Bas i l io Cay aby ab de l i ber ate ly r ef used to pay th e lease r enta l s o n th e la nd f or th e c ro ppi ng year s o f 19 86 , 19 87 , 19 88 and 1 98 9 . Ev i dence on recor ds c l ea r l y sh ow[ s] that Bas i l io Caya by ab was no t remi ss of h i s ob l i gatio n to pay l ease rent a ls when they fa l l du e. Fo r t he c ro ppi ng y ea rs o f 19 8 4 a nd 1 9 85 , h e pa i d t o [p eti tioner ] Feder ico Ro sar io a tota l amou nt of fo urt een (1 4 ) cav ans as ev i denced by a rece i pt dated

December 2 0 , 1 98 6 (Exh i b i t “ 3 ” , Def en dants ) . The l eas e renta l s due f or the c r op pi ng y ears of 1 98 6 and 1 98 7 i n th e to ta l amoun t of f ou rteen (1 4) cav ans w ere depos i ted by [ respo ndent Cay aby ab] wi th Gangan o’s F ami l y R ice Mi l l a t Mal i mpec , Bay amban g, P angas in an on No v ember 2 8 , 19 8 6. These renta l s whi ch were co nv er ted i nto i t s mo ney equi v a lent of P hp 2 , 51 1. 6 0 were r ece i ved by [p eti tioner ] Pur ifi cac i on Ros ar i o on Febr uary 1 , 19 89 (Exh. “ 1 ” Defendan ts ) . The act of depo s i ting the lease renta l s d ue on the lan d su ppo rts the c l a i m of [ respo ndent ] Ca yab yab tha t [ petition er s ] , spec i fica l l y P ur ifi cac i on Ro sar i o , re f used to acc ep t pay men t of l ease renta l s f r om th e f or mer . Th i s fact b ec omes ev i dent f rom th e a l l eg ation s con ta in ed in th e co mpl a in t i t se l f a nd a l so f ro m th e dec l aratio n of [p etiti oner s ] and the ir wi tnesses themse l ves that [ resp ond en t] Cay aby ab i s no t a tenant on the l and but a mere sub- less ee w ho was in stitut ed by [ respo ndent s ] Mig ue l and Mer ced es Res u lt ay wi tho ut t he kno wl ed ge and co nsent o f [p eti tioner s ] . One sh oul d no t l ose s i ght o f the cor rect co nc l us i on ar r i ved at in the assa i led [ DARAB] dec i s i on t hat [ respon dent ] Ca yaby ab i s a bon a fid e ag r i cu l t ura l l essee .

The l ease renta l s du e f or 1 9 88 harv est seaso n amoun ting to seven (7 ) cav ans w as depos i ted by [ r es pon dent] Cay ab yab w it h the Rura l Bank of San Car lo s (T . S . N. , Febr uar y 1 , 1 98 9, pp. 2- 3) , but i t was wi thdr awn and ackno wl ed ged to ha ve b een rece iv ed b y [petiti oner] Ro sar i o on Febr uary 1 6 , 19 9 4 (Exh. “ 4 ” , Def en dants , p . 8 , Ro l l o) . The l eas e renta l d ue fo r the 1 98 9 har vest season amou nting to sev en (7 ) cava ns was r ece i v ed b y [ petitio ner] F eder i co Ros ar i o o n May 2 5 , 19 9 0. Thus , the tota l amou nt of lease renta ls du e f or a p er i od o f (6 ) y ear s f r om 1 98 4 to 19 89 was f or ty - tw o (4 2) cav ans . Do cumentar y pro of su ch as rece ip ts s how that [ respo ndent] Cay aby ab pa i d exact l y f or ty - tw o cav ans dur i ng th i s per i o d of time. He c oul d no t be fau l ted f or t he s eemi ng l y d el ay ed pay ment of lease renta l s aft er t he i nstitu tion of th e compl a i nt on Nov ember 2 4, 1 98 8 , n or cou ld he be b la med fo r the co nfu s io n i n the acco unting and l iq u i datio n of h arv ests s i nce , as d i scu ssed ear l ie r , [p eti tioner s ] g ave r i se to i t by re fu s in g to r ecei v e p romp t ly the tender o f l ease renta l s made by [ r espon dent] Cay aby ab. x x x

x x x F in a l l y , the i ssue on p ayment o f l ease r enta l s i s u ndo ubtedl y reso l v ed by t he a dmis s io n of [ petitio ner] Pu r i fica c io n Ro sar i o herse l f when she testifi ed i n the f o l lo wi ng manner –

Q — So , i n 19 86 , 1 98 7 , 19 8 8 and 1 9 89 nagdede l i ver sa i ny o s i Cay aby ab ng r enta sa lu pa .A — O po. Q — S i gur ado kayo ?A — U ntil 1 99 1 pa l a . ” (T . S . N. , S ep temb er 2 9, 1 99 2, p . 7 ) .

We fi nd n o cogent reaso n t o fi nd ot herwi se th an t he abo ve q uot ed fi ndi ngs of pu bl ic

respo ndent Adj udi catio n Bo ard. [ 3 1 ] (emphas i s supp l i ed)

Wi th respect to the questio n of whether t he w it hdr awal s made wi th leav e of co ur t may pr e jud ice the

petitio ners , the CA apt l y he l d : [ 3 2 ]

Fur thermo re , whi l e i t i s t r ue that the a ppro v ed wi thd rawa l of the d ep os i ted r enta l s th er eon

by th e [petiti oners ] shou ld no t be cons trued as r ec ogn itio n of tenancy re lati ons hip , i t i s l i kewi se t r ue that the act of [ petitio ner] Feder ico Ros ar i o in rece i v i ng f r om [ resp ond en t] Bas i l i o Cay aby ab o n December 20 , 1 98 6 t he l ease renta l of seven (7 ) cav ans o f pa l ay fo r 1 98 4 and anot her seven (7 ) cav ans of pa l ay f or 19 86 i s ind ica tive of h i s be in g [an ] ag r i cu l tura l l es see o f the on e- ha l f ( 1/2 ) hectar e r ice l and po rtio n o f the l and i n questio n. Bes id es , i t s hou ld b e no ted, th at in cases fo r e jectment o f a tenan t f or fa i l ur e to pay l ea se renta l s , ther e must be a co nsc i o us i ntent to un l awf u l l y depr i v e the l and hol der of h i s share , wh ich i s no t so i n the case a t bar espec i a l ly co ns i der i ng that , o n Febr uary 1 , 19 89 , [ petitio ner] Pur ifi cac i on Ro sar io rece iv ed f r om [r espo ndent] Bas i l i o Cay aby ab th e tot a l amoun t o f Php 2 , 51 1 .6 0 repr es en ting the l ease rent a ls fo r 19 85 an d 1 98 6, an d o n F eb ruar y 16 , 19 8 9, t he amo unt o f P hp 1 ,2 28 . 50 representin g the l eas e r en ta l f or 19 88 ; on May 2 5, 1 9 89 , [p eti tioner ] Feder ico Ro sar io rece iv ed f r om [ respo ndent] Cay aby ab seven (7 ) cav ans o f pa l ay at 45 k i l o s per cav an; and o n December 1 1, 1 9 90 , [ petition er ] F ed er ico Rosar io rece iv ed f r om [ respo ndent] Cay aby ab s ev en ( 7) cav ans o f pa l ay .

Th i s Cour t has he l d that r en ta l p ay ment s are fact ua l i s su es b ey o nd the reach o f an ap pea l v i a certiorar i , as

on ly questio ns o f l aw may b e r ev i ewed. [ 3 3 ] L ikewi se , th e qu es tion o f wh et her a perso n i s an agr icu l tu ra l tenant o r

no t i s ba s ica l l y a q uestion o f f act . [ 3 4 ]

Apar t f r om the fo rego in g fi ndi ngs o f th e co urt s a quo , there i s ev i dence on th e r eco rd , unr ebutted by

petitio ners and c onfi rmed by the D ARAB, s how in g th at r es pon dent Mi gu el Resu l tay co nstit uted r espon dent Ca yab yab

as an agr i cu l tura l l es see by v i r tue of a co ntr act of lease entered i nto by t hem at t he ti me th e f or mer o wn ed t he l and

as v endee a ret ro be fo re i t s redemptio n by the petitio ners in 1 98 3. [ 3 5 ] Hence , w hen t he petitio ners repur chased the

la nd, th ey ar e deemed to hav e assumed th is l ease b y v i r tue o f sub rog atio n. Res pon dent Cay aby ab h i mse l f testifi ed

that at t he ti me o f the redemptio n and r evers io n of own er sh i p , h e w as made to s i gn a r ece i pt descr ib in g the par cel

he cu l tiva ted in o rder t o ackno wl edge that he had r ecei v ed the lan d f r om the petitio ners and the ir predecesso r- in -

in terest . [ 3 6 ]

As s tated ab ov e , in agrar i an cases , w hen the appe l la t e co urt s confi rm th at the fin di ngs o f fa ct of t he

agr ar i an c our ts ar e bo rne o ut by the recor d o r based o n s ubsta ntial ev i dence , such fi ndi ngs are conc l us iv e and

b i nd i ng on the ap pe l l a te co ur ts . [ 3 7 ] Acco rd i ng l y , th i s Co urt wi l l not d i s tur b th e fact ua l fi ndi ngs of th e DARAB, as

affi rmed by the CA, that r espon dent Cay aby ab was a n agr i cu l tu ra l lessee of t he s ubj ect l and , co ns i der i ng th at th i s

con c lu s io n was s uppo rted by su bstanti al ev i dence . [ 3 8 ]

As cor rect l y noted b y th e DA RAB, i t ap pears th at the jur id ica l re l atio nshi p o f the par ties i s sti l l go vern ed b y

agr icu l tu ra l sh are tenan cy . The re l atio nshi p s hou ld be co nv er ted i nto a leaseho l d . On Augu st 8 , 19 63 , R .A . No.

38 4 4, the Ag r i cu l tur a l Land Ref or m Cod e, abo l i sh ed and ou t la wed sh are tenan cy and put in i t s s tea d th e agr i cu l tu ra l

leaseho l d sy stem. On S eptember 10 , 1 97 1 , R .A . No . 6 38 9 , amendi ng R . A . N o. 38 44 , dec l ared sh are tenancy

re l ation shi ps as co ntra ry to pu bl i c po l i cy . R . A . No. 3 84 4, as amen ded by R. A . No. 6 38 9, i s th e g ov er n i ng s t atute in

th i s case . [ 3 9 ] Petitio ners fi l ed t he ir compl a i nt on Nov ember 2 4, 1 9 88 or lo ng aft er the appr ov a l o f R . A . N o. 63 89 but

befo re R . A . No . 66 57 , oth er wi se kno wn as th e Compr ehens i ve A grar ia n Refo rm Law of 1 98 8 . Not abl y , R . A . No.

66 5 7 on ly expr es s ly repea led Sectio n 3 5 of R . A . No. 3 8 44 . [ 4 0 ]

Sectio ns 4 an d 5 [ 4 1 ] o f R . A . No. 3 84 4 pr ov i de fo r the auto matic con ver s io n of shar e tena ncy t o agr ic u l t ura l

leaseho l d . The l ease renta l sho ul d be determi ned in ac cor dance wi th Sectio n 1 2 [ 4 2 ] o f R . A . No. 6 65 7 i n re l atio n to

Sectio n 3 4 [ 4 3 ] o f R . A . No. 38 44 , as amended, an d ex i sting ru l es an d r eg ul ation s .

I t i s an estab l i shed so c i a l and ec ono mic fact that the esca latio n of po vert y i s the d r i v i ng fo rce behin d th e

po l i tica l d i s tu rban ces tha t hav e i n t he past comp ro mi sed the peace an d secu r i ty of th e peopl e as we l l as th e

con tinui ty o f the nati onal o rd er . To s ubdu e these acu te d i s tur bances , the leg i s l a tur e ov er t he co urse o f the h is t ory

of th e natio n pa ssed a ser i es of l aws ca l cu l ated to acce l erate ag rar ian re f or m, u ltimat el y to ra ise t he mater i a l

s tand ards of l i v i ng and e l i min ate d i sco ntent . [ 4 4 ] Agr ar i an r e fo rm i s a perce i ved so l uti on to soc i a l i nstab i l i ty . The

ed ic ts of soc i a l justi ce f ou nd i n the Cons titutio n and th e p ubl ic p o l ic i es that u nderw r i te t hem, the extrao rd i nar y

natio nal exp er ienc e, and the pr ev a i l i ng natio nal co nsc i o usness , a l l comman d the great d ep artments o f go v er nment

to ti l t th e ba l anc e i n fav o r of the poo r an d under pr i v i l eged whenev er reaso nabl e dou bt ar i ses i n the in ter pr eta tion

of th e law . But a nnexed to th e great and sacred char ge of p rot ecti ng the weak i s the d i ametr i c f unc tion to put every

effo rt to a rr i v e at an eq uit ab l e so l ution fo r a l l par ties con cer ned: the ju ra l pos tu l ates of soc i a l justi ce can not s h i e l d

i l l ega l a cts , no r do they sanctio n fa l se sy mpathy to war ds a certa i n c l ass , n or y et sho ul d they deny j ustic e to the

la ndo wner whenev er t r uth and jus tice happ en to be o n h er s i de . [ 4 5 ] In the occup ation o f t he l eg a l questio ns in a l l

agr ar i an d i spu tes w ho se o utco mes c an s i gn i fic ant l y aff ect soc i e ta l harmo ny , the co ns i deratio ns o f so c ia l adv anta ge

must be we i ghed, [ 4 6 ] an i nq ui ry i nto the p rev a i l i ng soc i a l i nterests i s necessar y in the a d ju stment

of co nfl icti ng d eman ds and expectatio ns o f the peo pl e, [ 4 7 ] and the so c i a l in terdependenc e of these i nter es ts ,

reco gni zed. [ 4 8 ]

WHER EFORE , the i nstan t petitio n is DEN IED and the ass a i l ed D ec is i o n and Resol utio n o f the Co urt of Ap pea ls

are AF FIR MED .

Cost s ag a in st petiti oners .

SO O RD ERED .

F. Share tenancy, abolition -- RA 1199, Sec 4

Section 4. Systems of Agricultural Tenancy; Their Definitions. - Agricultural tenancy is classified into leasehold tenancy and share tenancy.

Share tenancy exists whenever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land personally with the aid of labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant in proportion to their respective contributions.

Leasehold tenancy exists when a person who, either personally or with the aid of labor available from members of his immediate farm household, undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single person together with members of his immediate farm household, belonging to or legally possessed by, another in consideration of a price certain or ascertainable to be paid by the person cultivating the land either in percentage of the production or in a fixed amount in money, or in both.

Related Jurisprudence

a. Hidalgo vs Hidalgo (G.R. No. L-25326)

b. Two petitions for review of decisions of the Court of Agrarian Relations dismissing petitioners' actions as sharetenants for the enforcerment of the right to redeem agricultural lands, under the provisions of section 12 of the Agricultural Land Reform Code. As the same issue of law is involved and the original landowner and vendees in both cases are the same, the two cases are herein jointly decided.

c. Respondent-vendor Policarpio Hidalgo was until the time of the execution of the deeds of sale on September 27, 1963 and March 2, 1964 in favor of his seven above-named private co-respondents, the owner of the 22,876-square meter and 7,638-square meter agricultural parcels of land situated in Lumil, San Jose, Batangas, described in the decisions under review.

d. In Case L-25326, respondent-vendor sold the 22,876-square meter parcel of land, together with two other parcels of land for P4,000.00. Petitioners-spouses Igmidio Hidalgo and Martina Resales, as tenants thereof, alleging that the parcel worked by them as tenants is fairly worth P1,500.00, "taking into account the respective areas, productivities, accessibilities, and assessed values of three lots, seek by way of redemption the execution of a deed of sale for the same amount of P1,500.00 by respondents-vendees 1 in their favor.

e. In Case L-25327, respondent-vendor sold the 7,638-square meter parcel of land for P750.00, and petitioners-spouses Hilario Aguila and Adela Hidalgo as tenants thereof, seek by way of redemption the execution of a deed of sale for the same price of P750.00 by respondents-vendees in their favor.

f. As stated in the decisions under review, since the parties stipulated on the facts in both cases, petitioners-tenants have for several years been working on the lands as share tenants. No 90-day notice of intention to sell the lands for the exercise of the right of pre-emption prescribed by section 11 of the Agricultural Land Reform Code (Republic Act No. 3844, enacted on August 8, 1963) was given by respondent-vendor to petitioners-tenants. Subsequently, the deeds of sale executed by respondent-vendor were registered by respondents register of deeds and provincial assessor of Batangas in the records of their respective offices notwithstanding the non-execution by respondent-vendor of the affidavit required by section 13 of the Land Reform Code. 2 The actions for redemption were

timely filled on March 26, 1965 by petitioners-tenants within the two-year prescriptive period from registration of the sale, prescribed by section 12 of the said Code.

g. The agrarian court rendered on July 19, 1965 two identical decisions dismissing the petitions for redemption.

h. It correctly focused on the sole issue of law as follows: "(T)he only issue in this case is whether or not plaintiffs, asshare tenants, are entitled to redeem the parcel of land they are working from the purchasers thereof, where no notice was previously given to them by the vendor, who was their landholder, of the latter's intention to sell the property and where the vendor did not execute the affidavit required by Sec. 13 of Republic Act No. 3844 before the registration of the deed of sale. In other words, is the right of redemption granted by Sec. 12 of Republic Act No. 3844 applicable to share tenants?"

i. But proceeding from several erroneous assumptions and premises, it arrived at its erroneous conclusion that the right of redemption granted by section 12 of the Land Reform Code is available to leasehold tenants only but not toshare tenants, and thus dismissed the petitions: "(S)ec 12 of Republic Act No. 3844, which comes under Chapter I of said Act, under the heading 'Agricultural Leasehold System,' reads as follows:

j. 'SEC. 12. Lessee's Right of Redemption. — In case the landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price and consideration: Provided: further, That where there are two or more agricultural lessees, each shall be entitled to said right of redemption only to the extent of the area actually cultivated by him. The right of redemption under this Section may be exercised within two years from the registration of the sale, and shall have priority over any other right of legal redemption.'

k. The systems of agricultural tenancy recognized in this jurisdiction are share tenancy and leaseholdtenancy. (Sec. 4, Republic Act No. 1199; Sec. 4, Republic Act No. 3844). A share tenant is altogether different from a leasehold tenant and their respective rights and obligations are not co-extensive or co-equal. (See Secs. 22 to 41, inclusive, and Secs. 42 to 48, inclusive, of Republic Act No. 1199; see also Secs. 4 to 38, inclusive, of Republic Act No. 3844).

l. It is our considered view that the right of redemption granted by Section 12 of Republic Act No. 3844 is applicable to leasehold tenants only, but not to share tenants, because said provision of law clearly, definitely, and unequivocally grants said right to the 'agricultural lessee,' and to nobody else. In enacting the Agricultural Land Reform Code, Congress was fully aware of the existence of sharetenancy and in fact provided for the abolition of the agricultural share tenancy system. (Sec. 4, Republic Act No. 3844.) If it were the intention of Congress to grant the right of redemption to sharetenants, it would have unmistakably and unequivocally done so. We cannot extend said right to sharetenants through judicial legislation, wherever our sympathies may lie.

m. The agrarian court fell into several erroneous assumptions and premises in holding that agricultural share tenancy remains recognized in this jurisdiction; that "a share tenant is altogether different from a leasehold tenant and their respective rights and obligations are not co-extensive or co-equal"; and that the right of redemption granted by section 12 of the Land Reform Code" is applicable to leasehold tenants only, but not to share tenants, because said provision of law clearly, definitely, and unequivocally grants said right to the 'agricultural lessee,' and to nobody else."

n. 1. The very essence of the Agricultural Land Reform Code is the abolition of agricultural share tenancy as proclaimed in its title. Section 4 of the Code expressly outlaws agricultural share tenancy as "contrary to public policy" and decrees its abolition. 3 Section 2 of the Code expressly declares it to be the policy of the State, inter alia, "to establish owner cultivatorship and the economic family-size farm as the basis of Philippine agriculture and, as a consequence, divert landlord capital in agriculture to industrial development; to achieve a dignified existence for the small farmers free from pernicious institutional restraints and practices; ... and to make the small farmersmore independent, self-reliant and responsible citizens, and a source of strength in our democratic society." 4 It was error, therefore, for the agrarian court to state the premise after the Land Reform Code had already been enacted, that "the systems of agricultural tenancy recognized in this jurisdiction are share tenancy and leasehold tenancy." A more accurate statement of the premise is that based on the transitory provision in the first proviso of section 4 of the Code, i.e. that existing share tenancy contracts are allowed to continue temporarily in force and effect, notwithstanding their express abolition, until whichever of the following events occurs earlier: (a) the end of the agricultural year when the National Land Reform Council makes the proclamation declaring the region or locality a land reform area; or (b) the shorter period provided in the share tenancy contracts expires; or (c) the share tenant sooner exercises his option to elect the leaseholdsystem.

o. In anticipation of the expiration of share tenancy contracts — whether by contractual stipulation or the tenant's exercise of his option to elect the leasehold system instead or by virtue of their nullity — occuring before the proclamation of the locality as a land reform area, the same section 4 has further declared in the third proviso thereof that in such event, the tenant shall continue in possession of the land for cultivation and "there shall be presumed to exist a leasehold relationship under the provisions of this Code."

p. 2. The foregoing exposes the error of the agrarian court's corollary premise that "a share tenant is altogether different from a leasehold tenant." The agrarian court's dictum that "their respective rights and obligations are not co-extensive or co-equal "refer to

their contractual relations with the landowner, with respect to the contributions given, management, division or payment of the produce. 5

q. But the Land Reform Code forges by operation of law, between the landowner and the farmer — be a leaseholdtenant or temporarily a share tenant — a vinculum juris with certain vital juridical consequences, such as security of tenure of the tenant and the tenant's right to continue in possession of the land he works despite the expiration of the contract or the sale or transfer of the land to third persons, and now, more basically, the farmer's pre-emptiveright to buy the land he cultivates under section 11 of the Code 6 as well as the right to redeem the land, if sold to a third person without his knowledge, under section 12 of the Code.

r. This is an essential and indispensable mandate of the Code to implement the state's policy of establishing owner-cultivatorship and to achieve a dignified and self-reliant existence for the small farmers that would make them a pillar of strength of our Republic. Aside from expropriation by the Land Authority of private agricultural land for resale in economic family-size farm units "to bona fide tenants, occupants and qualified farmers," 7 the purchase by farmers of the lands cultivated by them, when the owner decides to sell the same — through rights of pre-emption and redemption — are the only means prescribed by the Code to achieve the declared policy of the State.

s. 3. The agrarian court therefore facilely let itself fall into the error of concluding that the right of redemption (as well as necessarily the right of pre-emption) imposed by the Code is available to leasehold tenants only and excludesshare tenants for the literal reason that the Code grants said rights only to the "agricultural lessee and to nobody else." For one, it immediately comes to mind that the Code did not mention tenants, whether leasehold or sharetenants, because it outlaws share tenancy and envisions the agricultural leasehold system as its replacement. Thus, Chapter I of the Code, comprising sections 4 to 38, extensively deals with the establishment of "agriculturalleasehold relation," defines the parties thereto and the rights and obligations of the "agricultural lessor" and of the "agricultural lessee" (without the slightest mention of leasehold tenants) and the statutory consideration or rental for the leasehold to be paid by the lessee. There is a studied omission in the Code of the use of the term tenant in deference to the "abolition of tenancy" as proclaimed in the very title of the Code, and the elevation of the tenant's status to that of lessee.

t. Then, the terms "agricultural lessor" and "agricultural lessee" are consistently used throughout the Chapter and carried over the particular sections (11 and 12) on pre-emption and redemption. The agrarian court's literal construction would wreak havoc on and defeat the proclaimed and announced legislative intent and policy of the State of establishing owner-cultivatorship for the farmers, who invariably were all share tenants before the enactment of the Code and whom the Code would now uplift to the status of lessees.

u. A graphic instance of this fallacy would be found in section 11 providing that "In case the agricultural lessor decides to sell the landholding the agricultural lessee shall have the preferential right to buy the same under reasonable terms and conditions." It will be seen that the term "agricultural lessor" is here used interchangeably with the term "landowner"; which conflicts with the Code's definition of "agricultural lessor" to mean "a person natural or juridical, who, either as owner, civil law lessee, usufructuary, or legal possessor, lets or grants to another the cultivation and use of his land for a price certains." 8 Obviously, the Code precisely referred to the "agricultural lessor (who) decides to sell the landholding," when it could have more precisely referred to the "landowner," who alone as such, rather than a civil law lessee, usufructuary or legal possessor, could sell the landholding, but it certainly cannot be logically contended that the imprecision should defeat the clear spirit and intent of the provision.

v. 4. We have, here, then a case of where the true intent of the law is clear that calls for the application of the cardinal rule of statutory construction that such intent or spirit must prevail over the letter thereof, for whatever is within the spirit of a statute is within the statute, since adherence to the letter would result in absurdity, injustice and contradictions and would defeat the plain and vital purpose of the statute.

w. Section 11 of the Code providing for the "agricultural lessee's" preferential right to buy the land he cultivates provides expressly that "the entire landholding offered for sale must be pre-empted by the Land Authority if the landowner so desires, unless the majority of the lessees object to such acquisition," presumably for being beyond their capabilities. Taken together with the provisions of Chapter III of the Code on the organization and functions of the Land Authority and Chapter VII on the Land Project Administration and the creation and functions of the National Land Reform Council, (in which chapters the legislature obviously was not laboring under the inhibition of referring to the term tenants as it was in Chapter I establishing the agricultural leasehold system and decreeing the abolition ofshare tenancy, 9 the Code's intent, policy and objective to give both agricultural lessees and farmers who transitionally continue to be share tenants notwithstanding the Code's enactment, the same priority and preferential rights over the lands under their cultivation, in the event of acquisition of the lands, by expropriation or voluntary sale, for distribution or resale that may be initiated by the Land Authority or the National Land Reform Council, are clearly and expressly stated.

x. Thus Chapter III, section 51 of the Code decrees it the responsibility of the Land Authority "(1) To initiate and prosecute expropriation proceedings for the acquisition of private agricultural lands as defined in Section one hundred sixty-six of chapter XI of this Code for the purpose of subdivision into economic family — size farm units and resale of said farm units to bona fide tenants, occupants and qualified farmers ... and "(2) To help bona fide farmers without lands of agricultural owner-cultivators of uneconomic-size farms to acquire and own economic family-size farm units ...."

y. Similarly, Chapter VII, section 128 of the Code, in enjoining the National Land Reform Council to formulate the necessary rules and regulations to implement the Code's provisions for selection of agricultural land to be acquired and distributed and of the beneficiaries of

the family farms, ordains the giving of the same priority "to the actual occupants personally cultivating the land either as agricultural lessees or otherwise with respect to the area under their cultivation."

z. 5. It would certainly result in absurdity, contradictions and injustice if a share tenant would be denied the rights of pre-emption and redemption which he seeks to exercise on his own resources, notwithstanding that the National Land Reform Council has not yet proclaimed that all the government machineries and agencies in the region or locality envisioned in the Code are operating — which machineries and agencies, particularly, the Land Bank were precisely created "to finance the acquisition by the Government of landed estates for division and resale to small landholders, as well as the purchase of the landholding by the agricultural lessee from the landowner." 10 The non-operation in the interval of the Land Bank and the government machineries and agencies in the region which are envisioned in the Code to assist the share tenant in shedding off the yoke of tenancy and afford him the financial assistance to exercise his option of electing the leasehold system and his preferential right of purchasing the land cultivated by him could not possibly have been intended by Congress to prevent the exercise of any of these vital rights by a share tenant who is able to do so, e.g. to purchase the land, on his own and without government assistance. It would be absurd and unjust that while the government is unable to render such assistance, the share tenant would be deemed deprived of the very rights granted him by the Code which he is in a position to exercise even without government assistance.

aa. 6. Herein lies the distinction between the present case and Basbas vs. Entena 11 where the Court upheld the agrarian court's dismissal of the therein tenant's action to redeem the landholding sold to a third party by virtue of the tenant's failure to tender payment or consign the purchase price of the property. There, the tenant-redemptioner was shown by the evidence to have no funds and had merely applied for them to the Land Authority which was not yet operating in the locality and hence, the Court held that no part of the Code "indicates or even hints that the 2-year redemption period will not commence to run (indefinitely) until the tenant obtains financing from the Land Bank, or stops the tenant from securing redemption funds from some other source." 12 In the present case, the petitioners-tenants' possession of funds and compliance with the requirements of redemption are not questioned, the case having been submitted and decided on the sole legal issue of the right of redemption being available to them as share tenants. The clear and logical implication of Basbas is where the tenant has his own resources or secures redemption funds from sources other than the Land Bank or government agencies under the Code, the fact that the locality has not been proclaimed a land reform area and that such government machineries and agencies are not operating therein is of no relevance and cannot prejudice the tenant's rights under the Code to redeem the landholding.

bb. 7. Even from the landowner's practical and equitable viewpoint, the landowner is not prejudiced in the least by recognizing the share tenant's right of redemption. The landowner, having decided to sell his land, has gotten his price therefor from his vendees. (The same holds true in case of the tenant's exercise of the pre-emptive right by the tenant who is called upon to pay the landowner the price, if reasonable, within ninety days from the landowner's written notice.) As for the vendees, neither are they prejudiced for they will get back from the tenant-redemptioner the price that they paid the vendor, if reasonable, since the Code grants the agricultural lessee or tenant the top priority of redemption of the landholding cultivated by him and expressly decrees that the same "shall have priority over any other right of legal redemption." In the absence of any provision in the Code as to manner of and amounts payable on redemption, the pertinent provisions of the Civil Code apply in a suppletory character. 13 Hence, the vendees would be entitled to receive from the redemptioners the amount of their purchase besides "(1) the expenses of the contract, and any other legitimate payments made by reason of the sale; (and) (2) the necessary and useful expenses made on the thing sold." 14

cc. 8. The historical background for the enactment of the Code's provisions on pre-emption and redemption further strengthens the Court's opinion. It is noted by Dean Montemayor 15 that "(T)his is a new right which has not been granted to tenants under the Agricultural Tenancy Act. It further bolsters the security of tenure of the agricultural lessee and further encourages agricultural lessees to become owner-cultivators.

dd. In the past, a landlord often ostensibly sold his land being cultivated by his tenant to another tenant, who in turn filed a petition for ejectment against the first tenant on the ground of personal cultivation. While many of such sales were simulated, there was a formal transfer of title in every case, and the first tenant was invariably ordered ejected.

ee. There is indication in this case of the same pattern of sale by the landowner to another tenant, 16 in order to effect the ejectment of petitioners-tenants. This is further bolstered by the fact that the sales were executed by respondent-vendor on September 27, 1963 and March 2, 1954 shortly after the enactment on August 8, 1963 of the Land Reform Code — which furnishes still another reason for upholding ... petitioners-tenants' right of redemption, for certainly a landowner cannot be permitted to defeat the Code's clear intent by precipitately disposing of his lands, even before the tenant has been given the time to exercise his newly granted option to elect the new agricultural leasehold system established by the Code as a replacement for the share tenancy outlawed by it.

ff. 9. Clearly then, the Code intended, as above discussed, to afford the farmers' who transitionally continued to be share tenants after its enactment but who inexorably would be agricultural lessees by virtue of the Code's proclaimed abolition of tenancy, the same priority and preferential right as those other share tenants, who upon the enactment of the Code or soon thereafter were earlier converted by fortuitous circumstance into agricultural lessees, to acquire the lands under their cultivation in the event of their voluntary sale by the owner or of their acquisition, by expropriation or otherwise, by the Land Authority. It then becomes the court's duty to enforce the intent and will of the Code, for "... (I)n fact, the spirit or intention of a statute prevails over the letter thereof.' (Tañada vs. Cuenco, L-10520, Feb. 23, 1957, citing 82 C.J.S., p. 526.) A statute 'should be construed according to its spirit or intention, disregarding as far as necessary, the

letter of the law.' (Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 855.) By this, we do not correct the act of the Legislature, but rather ... carry out and give due course to 'its intent.' (Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 850)." 17 The Court has consistently held in line with authoritative principles of statutory construction that, it will reject a narrow and literal interpretation, such as that given by the agrarian court, that would defeat and frustrate rather than foster and give life to the law's declared policy and intent. 18 Finally, under the established jurisprudence of the Court, in the interpretation of tenancy and labor legislation, it will be guided by more than just an inquiry into the letter of the law as against its spirit and will ultimately resolve grave doubts in favor of the tenant and worker. 19

gg. The agrarian court's dismissal of the cases at bar should therefore be reversed and petitioners-tenants' right to redeem the landholdings recognized section 12 of the Code.

hh. In Case L-25326, however, the deed of sale executed by respondent-vendor in favor of respondents-vendees for the price of P4,000.00 covers three parcels of land, while what is sought to be redeemed is only the first parcel of land of 22,876 square meters, described in the deed. Petitioners-tenants' allegation that the proportionate worth of said parcel "taking into account the respective areas, productivities, accessibilities and assessed values of the three lots," is P1,500.00, was traversed by respondents in their answer, with the claim that "the said land is fairly worth P20,000.00. 20 While the vendor would be bound by, and cannot claim more than, the price stated in the deed, and the Code precisely provides that the farmer shall have "the preferential right to buy the (landholding) under reasonable terms and conditions" or "redeem the same at a reasonable price and consideration" 21 with a view to affording the farmer the right to seek judicial assistance and relief to fix such reasonable price and terms when the landowner places in the notice to sell or deed an excessive or exorbitant amount in collusion with the vendee, we note that in this case the deed of sale itself acknowledged that the selling price of P4,000.00 therein stated was not the fair price since an additional consideration therein stated was that the vendees would support the vendor during his lifetime and take care of him, should he fall ill, and even assumed the expenses of his burial upon his death:

ii. Ang halagang P4,000.00 ay hindi kaulat sa tunay na halaga ng mga lupa subalit ang mga bumili ay may katungkulan na sostentohin ako habang ako'y nabubuhay, ipaanyo at ipagamot ako kung ako ay may sakit, saka ipalibing ako kung ako ay mamatay sa kanilang gastos at ito ay isa sa alang-alang o consideracion ng bilihang ito.

jj. Under these circumstances, since the agrarian court did not rule upon conflicting claims of the parties as to what was the proportionate worth of the parcel of land in the stated price of P4,000.00 — whether P1,500.00 as claimed by petitioners or a little bit more, considering the proportionate values of the two other parcels, but the whole total is not to exceed the stated price of P4,000.00, since the vendor is bound thereby — and likewise, what was the additional proportionate worth of the expenses assumed by the vendees, assuming that petitioners are not willing to assume the same obligation, the case should be remanded to the agrarian court solely for the purpose of determining the reasonable price and consideration to be paid by petitioners for redeeming the landholding, in accordance with these observations.

kk. In Case L-25327, there is no question as to the price of P750.00 paid by the vendees and no additional consideration or expenses, unlike in Case L-25326, supra, assumed by the vendees. Hence, petitioners therein are entitled to redeem the landholding for the same stated price.

ll. ACCORDINGLY, the decisions appealed from are hereby reversed, and the petitions to redeem the subject landholdings are granted.

mm. In Case L-25326, however, the case is remanded to the agrarian court solely for determining the reasonable price to be paid by petitioners therein to respondents-vendees for redemption of the landholding in accordance with the observations hereinabove made.

nn. No pronouncement as to costs.

G. Latest A.O. on LeaseholdThe Department of Agrarian Reform issued guidelines for all tenants of coconut landholdings that have been affected by natural disasters.

Administrative Order No. 2 which was introduced on Feb. 26, published on Mar. 4 and will take effect 10 days thereafter, seeks to improve the

economic condition of the agricultural lessees-tenants on coconut lands devastated by calamities such as super typhoon Yolanda.

Eliasem Castillo, DAR regional director, made it clear during a press conference last Mar. 11 that no tenant shall be ejected due to the non-payment

of lease rentals as a result of such devastation.

"Based on AO 2, a tenant-lessee shall negotiate a new leasehold agreement with the landowner." The same order also states that the tenancy

relationship has been extinguished by a fortuitous event.

A fortuitous event refers not only to event that is unforeseeable, but also that which is foreseeable but inevitable. It may be an act of God or

natural occurrence such as flood or typhoon, or an act of man such as riot, strike or war.

DAR consultant Augusto Quijano stressed that an affected tenant-lessee shall be allowed to cut and transport coconut trees. "The Philippine

Coconut Authority in its Memorandum Circular No. 05 series of 2013 allows them, provided that the necessary permit is complied with pursuant to

RA 10593." The tenant-lessee should also observe the existing policies, rules and regulations.

Freeman ( Article MRec ), pagematch: 1, sectionmatch:

AO 2 also specifies the 75-25 percent sharing scheme in favor of the tenant- lessee after all cost deductions are applied in the processing of the

coconut lumbers, from cutting to hauling.

Planting temporary crops are also allowed during the rehabilitation period of coconut trees or when production has not yet attained its average

normal harvest. /JMD (FREEMAN)