EN BANC

[G.R. No. 86889 : December 4, 1990.]

192 SCRA 51
LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, Respondent.
DECISION
PARAS, J.:
This is a petition for prohibition with prayer for restraining order and/or preliminary and
permanent injunction against the Honorable Secretary of the Department of Agrarian
Reform for acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law of 1988 and in promulgating
the Guidelines and Procedure Implementing Production and Profit Sharing under R.A. No.
6657, insofar as the same apply to herein petitioner, and further from performing an act in
violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes
the raising of livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and
Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and 32
of R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and
Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry
business and together with others in the same business allegedly stands to be adversely
affected by the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17
and Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law
and of the Guidelines and Procedures Implementing Production and Profit Sharing under
R.A. No. 6657 promulgated on January 2, 1989 and the Rules and Regulations
Implementing Section 11 thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp.
2-36).
: rd

Hence, this petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or
restraining order be issued enjoining public respondents from enforcing the same, insofar as
they are made to apply to Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms'
prayer for the issuance of a preliminary injunction in its Manifestation dated May 26, and
31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said
Motion for Reconsideration regarding the injunctive relief, after the filing and approval by
this Court of an injunction bond in the amount of P100,000.00. This Court also gave due

course to the petition and required the parties to file their respective memoranda (Rollo, p.
119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as his
Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to
apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the
definition of "Agricultural, Agricultural Enterprise or Agricultural Activity."
(b) Section 11 which defines "commercial farms" as "private agricultural lands
devoted to commercial, livestock, poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the
authority to summarily determine the just compensation to be paid for lands covered
by the Comprehensive Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in Section 13

". . . (W)hereby three percent (3%) of the gross sales from the production of such
lands are distributed within sixty (60) days of the end of the fiscal year as
compensation to regular and other farmworkers in such lands over and above the
compensation they currently receive: Provided, That these individuals or entities
realize gross sales in excess of five million pesos per annum unless the DAR, upon
proper application, determine a lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten (10%) of
the net profit after tax shall be distributed to said regular and other farmworkers
within ninety (90) days of the end of the fiscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A.
No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law
includes the raising of livestock, poultry and swine in its coverage as well as the
Implementing Rules and Guidelines promulgated in accordance therewith.
:-cralaw

The constitutional provision under consideration reads as follows:

ARTICLE XIII
x x x
AGRARIAN AND NATURAL RESOURCES REFORM
Section 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 rights of
small landowners. The State shall further provide incentives for voluntary landsharing.

x x x"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its
entirety. In fact, it acknowledges the correctness of the decision of this Court in the
case of the Association of Small Landowners in the Philippines, Inc. vs. Secretary of
Agrarian Reform (G.R. 78742, 14 July 1989) affirming the constitutionality of the
Comprehensive Agrarian Reform Law. It, however, argued that Congress in enacting
the said law has transcended the mandate of the Constitution, in including land
devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p. 131).
Livestock or poultry raising is not similar to crop or tree farming. Land is not the
primary resource in this undertaking and represents no more than five percent (5%)
of the total investment of commercial livestock and poultry raisers. Indeed, there are
many owners of residential lands all over the country who use available space in
their residence for commercial livestock and raising purposes, under "contractgrowing arrangements," whereby processing corporations and other commercial
livestock and poultry raisers (Rollo, p. 10). Lands support the buildings and other
amenities attendant to the raising of animals and birds. The use of land is incidental
to but not the principal factor or consideration in productivity in this industry.
Including backyard raisers, about 80% of those in commercial livestock and poultry
production occupy five hectares or less. The remaining 20% are mostly corporate
farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is
embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b)
of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition
(1954), defines the following words:
"Agriculture the art or science of cultivating the ground and raising and harvesting
crops, often, including also, feeding, breeding and management of livestock, tillage,
husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for profit.
Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo,
pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in constitutional
construction is to ascertain and thereafter assure the realization of the purpose of the
framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure
Administration, 31 SCRA 413 [1970]).
: rd

Ascertainment of the meaning of the provision of Constitution begins with the language of
the document itself. The words used in the Constitution are to be given their ordinary
meaning except where technical terms are employed in which case the significance thus
attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413
[1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or of
doubtful meaning, the courts may consider the debates in the constitutional convention as
throwing light on the intent of the framers of the Constitution. It is true that the intent of
the convention is not controlling by itself, but as its proceeding was preliminary to the
adoption by the people of the Constitution the understanding of the convention as to what
was meant by the terms of the constitutional provision which was the subject of the

deliberation, goes a long way toward explaining the understanding of the people when they
ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183 [1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the
meaning of the word "agricultural," clearly show that it was never the intention of the
framers of the Constitution to include livestock and poultry industry in the coverage of the
constitutionally-mandated agrarian reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166 of
R.A. 3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds,
fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture."
Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of
agricultural land from such lands as commercial and industrial lands and residential
properties because all of them fall under the general classification of the word "agricultural".
This proposal, however, was not considered because the Committee contemplated that
agricultural lands are limited to arable and suitable agricultural lands and therefore, do not
include commercial, industrial and residential lands (Record, CONCOM, August 7, 1986, Vol.
III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed
several questions, among others, quoted as follows:
x x x
"Line 19 refers to genuine reform program founded on the primary right of farmers
and farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed
under this provision because it speaks of the primary right of farmers and
farmworkers to own directly or collectively the lands they till. As also mentioned by
Commissioner Tadeo, farmworkers include those who work in piggeries and poultry
projects.
I was wondering whether I am wrong in my appreciation that if somebody puts up a
piggery or a poultry project and for that purpose hires farmworkers therein, these
farmworkers will automatically have the right to own eventually, directly or
ultimately or collectively, the land on which the piggeries and poultry projects were
constructed. (Record, CONCOM, August 2, 1986, p. 618).
x x x
The questions were answered and explained in the statement of then Commissioner
Tadeo, quoted as follows:
x x x
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan.
Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural
worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang
inilagay namin dito ay farm worker kaya hindi kasama ang piggery, poultry at
livestock workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes
"private agricultural lands devoted to commercial livestock, poultry and swine raising" in the
definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial
activities are made to be covered by the agrarian reform program of the State. There is
simply no reason to include livestock and poultry lands in the coverage of agrarian reform.
(Rollo, p. 21).

Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of
R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute
and implement "production-sharing plans" (pending final redistribution of their landholdings)
whereby they are called upon to distribute from three percent (3%) of their gross sales and
ten percent (10%) of their net profits to their workers as additional compensation is
unreasonable for being confiscatory, and therefore violative of due process (Rollo, p. 21).
:-cra law

It has been established that this Court will assume jurisdiction over a constitutional question
only if it is shown that the essential requisites of a judicial inquiry into such a question are
first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal
rights susceptible of judicial determination, the constitutional question must have been
opportunely raised by the proper party, and the resolution of the question is unavoidably
necessary to the decision of the case itself (Association of Small Landowners of the
Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310;
Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with
constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced
that this must be done. In arriving at this conclusion, its only criterion will be the
Constitution and God as its conscience gives it in the light to probe its meaning and discover
its purpose. Personal motives and political considerations are irrelevancies that cannot
influence its decisions. Blandishment is as ineffectual as intimidation, for all the awesome
power of the Congress and Executive, the Court will not hesitate "to make the hammer fall
heavily," where the acts of these departments, or of any official, betray the people's will as
expressed in the Constitution (Association of Small Landowners of the Philippines, Inc. v.
Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico,
G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional
powers, it becomes the duty of the judiciary to declare what the other branches of the
government had assumed to do, as void. This is the essence of judicial power conferred by
the Constitution "(I)n one Supreme Court and in such lower courts as may be established by
law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973
Constitution and which was adopted as part of the Freedom Constitution, and Article VIII,
Section 1 of the 1987 Constitution) and which power this Court has exercised in many
instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and
32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in
its coverage as well as the Implementing Rules and Guidelines promulgated in accordance
therewith, are hereby DECLARED null and void for being unconstitutional and the writ of
preliminary injunction issued is hereby MADE permanent.
SO ORDERED.
Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Gancayco, Padilla,
Bidin, Grio-Aquino, Medialdea and Regalado, JJ., concur.
Feliciano, J., is on leave.
Separate Opinions
SARMIENTO, J., concurring:
I agree that the petition be granted.

It is my opinion however that the main issue on the validity of the assailed provisions of
R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988) and its Implementing Rules
and Guidelines insofar as they include the raising of livestock, poultry, and swine in their
coverage cannot be simplistically reduced to a question of constitutional construction.
It is a well-settled rule that construction and interpretation come only after it has been
demonstrated that application is impossible or inadequate without them. A close reading
however of the constitutional text in point, specifically, Sec. 4, Art. XIII, particularly the
phrase, ". . . in case of other farmworkers, to receive a just share of the fruits thereof,"
provides a basis for the clear and possible coverage of livestock, poultry, and swine raising
within the ambit of the comprehensive agrarian reform program. This accords with the
principle that every presumption should be indulged in favor of the constitutionality of a
statute and the court in considering the validity of a statute should give it such reasonable
construction as can be reached to bring it within the fundamental law. 1
The presumption against unconstitutionality, I must say, assumes greater weight when a
ruling to the contrary would, in effect, defeat the laudable and noble purpose of the law,
i.e., the welfare of the landless farmers and farmworkers in the promotion of social justice,
by the expedient conversion of agricultural lands into livestock, poultry, and swine raising
by scheming landowners, thus, rendering the comprehensive nature of the agrarian
program merely illusory.
The instant controversy, I submit, boils down to the question of whether or not the assailed
provisions violate the equal protection clause of the Constitution (Article II, section 1) which
teaches simply that all persons or things similarly situated should be treated alike, both as
to rights conferred and responsibilities imposed. 2
There is merit in the contention of the petitioner that substantial distinctions exist between
land directed purely to cultivation and harvesting of fruits or crops and land exclusively used
for livestock, poultry and swine raising, that make real differences, to wit:
x x x
No land is tilled and no crop is harvested in livestock and poultry farming. There are no
tenants nor landlords, only employers and employees.
Livestock and poultry do not sprout from land nor are they "fruits of the land."
Land is not even a primary resource in this industry. The land input is inconsequential that
all the commercial hog and poultry farms combined occupy less than one percent (1%)
(0.4% for piggery, 0.2% for poultry) of the 5.45 million hectares of land supposedly
covered by the CARP. And most farms utilize only 2 to 5 hectares of land.
: nad

In every respect livestock and poultry production is an industrial activity. Its use of an
inconsequential portion of land is a mere incident of its operation, as in any other
undertaking, business or otherwise.
The fallacy of defining livestock and poultry production as an agricultural enterprise is
nowhere more evident when one considers that at least 95% of total investment in these
farms is in the form of fixed assets which are industrial in nature.
These include (1) animal housing structures and facilities complete with drainage, waterers,
blowers, misters and in some cases even piped-in music; (2) feedmills complete with
grinders, mixers, conveyors, exhausts, generators, etc.; (3) extensive warehousing facilities
for feeds and other supplies; (4) anti-pollution equipment such as bio-gas and digester
plants augmented by lagoons and concrete ponds; (5) deepwells, elevated water tanks,
pumphouses and accessory facilities; (6) modern equipment such as sprayers, pregnancy

testers, etc.; (7) laboratory facilities complete with expensive tools and equipment; and a
myriad other such technologically advanced appurtances.
How then can livestock and poultry farmlands be arable when such are almost totally
occupied by these structures?
The fallacy of equating the status of livestock and poultry farmworkers with that of
agricultural tenants surfaces when one considers contribution to output. Labor cost of
livestock and poultry farms is no more than 4% of total operating cost. The 98% balance
represents inputs not obtained from the land nor provided by the farmworkers inputs
such as feeds and biochemicals (80% of the total cost), power cost, cost of money and
several others.
Moreover, livestock and poultry farmworkers are covered by minimum wage law rather than
by tenancy law. They are entitled to social security benefits where tenant-farmers are not.
They are paid fixed wages rather than crop shares. And as in any other industry, they
receive additional benefits such as allowances, bonuses, and other incentives such as free
housing privileges, light and water.
Equating livestock and poultry farming with other agricultural activities is also fallacious in
the sense that like the manufacturing sector, it is a market for, rather than a source of
agricultural output. At least 60% of the entire domestic supply of corn is absorbed by
livestock and poultry farms. So are the by-products of rice (rice-bran), coconut (copra
meal), banana (banana pulp meal), and fish (fish meal). 3
x x x
In view of the foregoing, it is clear that both kinds of lands are not similarly situated and
hence, cannot be treated alike. Therefore, the assailed provisions which allow for the
inclusion of livestock and poultry industry within the coverage of the agrarian reform
program constitute invalid classification and must accordingly be struck down as repugnant
to the equal protection clause of the Constitution.
chan robles vi rt ual law li bra ry

Endnotes
SARMIENTO, J., concurring:

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 86186 May 8, 1992

RAFAEL GELOS, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and ERNESTO ALZONA, respondents.
Balagtas P. Ilagan for petitioner.
Emil Capulong, Jr., for private respondent.

CRUZ, J.:
The Court is asked to determine the real status of the petitioner, who claims to be a tenant of the
private respondent and entitled to the benefits of tenancy laws. The private respondent objects,
contending that the petitioner is only a hired laborer whose right to occupy the subject land ended
with the termination of their contract of employment.
The subject land is a 25,000 square meter farmland situated in Cabuyao, Laguna, and belonging
originally to private respondent Ernesto Alzona and his parents in equal shares. On July 5, 1970,
they entered into a written contract with petitioner Rafael Gelos employing him as their laborer on
the land at the stipulated daily wage of P5.00. 1 On September 4, 1973, after Alzona had bought his
parents' share and acquired full ownership of the land, he wrote Gelos to inform him of the termination of
his services and to demand that he vacate the property. Gelos refused and continued working on the
land.

On October 1, 1973, Gelos went to the Court of Agrarian Relations and asked for the fixing of the
agricultural lease rental on the property. He later withdrew the case and went to the Ministry of
Agrarian Reform, which granted his petition. For his part, Alzona filed a complaint for illegal detainer
against Gelos in the Municipal Court of Cabuyao, but this action was declared "not proper for trial" by
the Ministry of Agrarian Reform because of the existence of a tenancy relationship between the
parties. Alzona was rebuffed for the same reason when he sought the assistance of the Ministry of
Labor and later when he filed a complaint with the Court of Agrarian Relations for a declaration of
non-tenancy and damages against Gelos. On appeal to the Office of the President, however, the
complaint was declared proper for trial and so de-archived and reinstated.
After hearing, the Regional Trial Court of San Pablo City (which had taken over the Court of Agrarian
Relations under PB 129) rendered a decision dated April 21, 1987, dismissing the complaint. 2 It
found Gelos to be a tenant of the subject property and entitled to remain thereon as such. The plaintiff
was also held liable in attorney's fees and costs.

The decision was subsequently reversed by the Court of Appeals. In its judgment promulgated on
November 25, 1988, 3 it held that Gelos was not a tenant of the land in question and ordered him to
surrender it to Alzona. He was also held liable for the payment of P10,000.00 as attorney's fees and the
costs of the suit.

The basic question the petitioner now raises before the Court is essentially factual and therefore not
proper in a petition for review under Rule 45 of the Rules of Court. Only questions of law may be
raised in this kind of proceeding. The settled rule is that the factual findings of the Court of Appeals
are conclusive on even this Court as long as they are supported by substantial evidence. The
petitioner has not shown that his case comes under any of those rare exceptions on such findings
may be validly reversed by this Court.
It is true that in Talavera v. Court of Appeals, 4 we held that a factual conclusion made by the trial court
that a person is a tenant farmer, if it is supported by the minimum evidence demanded by law, is final and
conclusive and cannot be reversed by the appellate tribunals except for compelling reasons. In the case
at bar, however, we find with the respondent court that there was such a compelling reason. A careful
examination of the record reveals that, indeed, the trial court misappreciated the facts when it ruled that
the petitioner was a tenant of the private respondent.

The circumstance that the findings of the respondent court do not concur with those of the trial court
does not, of course, call for automatic reversal of the appellate court. Precisely, the function of the
appellate court is to review and, if warranted, reverse the findings of the trial court. Disagreement
between the two courts merely calls on us to make a specially careful study of their respective
decisions to determine which of them should be preferred as more conformable to the facts at hand.
The Court has made this careful study and will sustain the decision of the respondent court.
The contract of employment dated July 5, 1970, written in Tagalog and entitled "Kasunduan ng
Upahang Araw," reads pertinently as follows:
1. Ang Unang Panig ay siyang may-ari at nagtatangkilik ng isang lagay na lupa,
sinasaka, na tumatayo sa Nayon ng Baclaran, Cabuyao, Laguna, na siyang gagawa
at sasaka sa lupa, samantalang ang Ikalawang Panig ay magiging upahan at
katulong sa paggawa ng lupa.
2. Ang Unang Panig ay gustong ipagpatuloy ang pagbubungkal at paggawa ng bukid
na binabanggit sa itaas at ang Ikalawang Panig ay may ibig na magpaupa sa
paggawa sa halagang P5.00 sa bawat araw, walong oras na trabaho gaya ng mga
sumusunod: Patubigan ng linang; pagpapahalabas ng mga pilapil; pagpapaaldabis
sa unang araw ng pag-aararo; pagpapalinis ng damo sa ibabaw ng pilapil;
pagpapakamot (unang pagpapasuyod), pagpapahalang at pagpapabalasaw
(ikalawa't ikatlong pagpapasuyod); isang tao sa pagsasabog ng abono una sa
pagpapantay ng linang; bago magtanim; isang tao sa pagaalaga ng dapog; upa sa
isang tao ng magbobomba ng gamot laban sa pagkapit ng mga kulisap (mayroon at
wala); sa nag-we-weeder; upa sa mga tao na maggagamas at magpapatubig ng
palay; magsasapaw ng mga pilapil at iba pa.
3. Ang Unang Panig at ang Ikalawang Panig ay nagkasundo na ang huli ay gagawa
sa bukid ayon sa nabanggit sa itaas bilang katulong at upahan lamang. Ang Unang
Panig bukod sa sila ang gagawa at magsasaka ay maaaring umupa ng iba pang tao
manggagawa sa upahang umiiral sang-ayon sa batas katulad ng pag-aararo,
pagpapahulip, pagpapagamas, pagbobomba, pagweweeder, pagsasabog ng abono,

pagbobomba ng gamot, pagpapatubig at iba pang mga gawain. Maaaring alisin ang
Ikalawang Panig sa pagpapatrabaho sa ano mang oras ng Unang Panig.
4. Ipinatatanto ng Ikalawang Panig na siya ay hindi kasama sa bukid kundi upahan
lamang na binabayaran sa bawa't araw ng kanyang paggawa sa bukid na nabanggit.
It is noted that the agreement provides that "ang Ikalawang Panig (meaning Gelos) ay may ibig na
magpaupa sa paggawa sa halagang P5.00 sa bawa't araw, walong oras na trabaho" (The Second
Party desires to lease his services at the rate of P5.00 per day, eight hours of work) and that
"Ipinatatanto ng Ikalawang Panig na siya ay hindi kasama sa bukid kundi upahan lamang na
binabayaran sa bawa't araw ng kanyang paggawa sa bukid na nabanggit.'' (The Second Party
makes it known that he is not a farm tenant but only a hired laborer who is paid for every day of work
on the said farm.)
These stipulations clearly indicate that the parties did not enter into a tenancy agreement but only a
contract of employment. The agreement is a lease of services, not of the land in dispute. This
intention is quite consistent with the undisputed fact that three days before that agreement was
concluded, the former tenant of the land, Leocadio Punongbayan, had executed an instrument in
which he voluntarily surrendered his tenancy rights to the private respondent. 5 It also clearly
demonstrates that, contrary to the petitioner's contention, Alzona intended to cultivate the land himself
instead of placing it again under tenancy.

The petitioner would now disavow the agreement, but his protestations are less than convincing. His
wife's testimony that he is illiterate is belied by his own testimony to the contrary in another
proceeding. 6 Her claim that they were tricked into signing the agreement does not stand up against the
testimony of Atty. Santos Pampolina, who declared under his oath as a witness (and as an attorney and
officer of the court) that he explained the meaning of the document to Gelos, who even read it himself
before signing it. 7 Atty. Pampolina said the agreement was not notarized because his commission as
notary public was good only for Manila and did not cover Laguna, where the document was executed. 8 At
any rate, the lack of notarization did not adversely affect the veracity and effectiveness of the agreement, which, significantly, Gelos and his
wife do not deny having signed.

Gelos points to the specific tasks mentioned in the agreement and suggests that they are the work of
a tenant and not of a mere hired laborer. Not so. The work specified is not peculiar to tenancy. What
a tenant may do may also be done by a hired laborer working under the direction of the landowner,
as in the case at bar. It is not the nature of the work involved but the intention of the parties that
determines the relationship between them.
As this Court has stressed in a number of cases, 9 "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."

Gelos presented receipts 10 for fertilizer and pesticides he allegedly bought and applied to the land of the
private respondent, but the latter insists that it was his brother who bought them, being an agriculturist
and in charge of the technical aspect of the farm. Moreover, the receipts do not indicate to which
particular landholding the fertilizers would be applied and, as pointed out by the private respondent, could
refer to the other parcels of land which Gelos was tenanting.

The petitioner's payment of irrigation fees from 1980 to 1985 to the National Irrigation Administration
on the said landholding is explained by the fact that during the pendency of the CAR case, the
Agrarian Reform Office fixed a provisional leasehold rental after a preliminary finding that Gelos was
the tenant of the private respondent. As such, it was he who had to pay the irrigation fees.

Incidentally, Section 12, subpar. (r) of PD 946 provides that the Secretary's determination of the
tenancy relationship is only preliminary and cannot be conclusive on the lower court.
It is noteworthy that, except for the self-serving testimony of the petitioner's wife, the records of this
case are bereft of evidence regarding the sharing of harvest between Gelos and Alzona. No less
importantly, as the Court of Appeals observed, the petitioner has not shown that he paid rentals on
the subject property from 1970 to 1973, before their dispute arose.
A tenant is defined under Section 5(a) of Republic Act No. 1199 as 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 or
ascertainable in produce or in money or both, under the leasehold tenancy system. (Emphasis
supplied)
For this relationship to exist, it is necessary that: 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 harvest or payment of rental. In the absence of any
of these requisites, an occupant of a parcel of land, or a cultivator thereof, or planter thereon, cannot
qualify as a de jure tenant. 11
On the other hand, the indications of an employer-employee relationship are: 1) the selection and
engagement of the employee; 2) the payment of wages; 3) the power of dismissal; and 4) the power
to control the employee's
conduct although the latter is the most important element. 12
According to a well-known authority on the subject, 13 tenancy relationship is distinguished from farm
employer-farm worker relationship in that: "In farm employer-farm worker relationship, the lease is one of
labor with the agricultural laborer as the lessor of his services and the farm employer as the lessee
thereof. In tenancy relationship, it is the landowner who is the lessor, and the tenant the lessee of
agricultural land. The agricultural worker works for the farm employer and for his labor be receives a
salary or wage regardless of whether the employer makes a profit. On the other hand, the tenant derives
his income from the agricultural produce or harvest."

The private respondent, instead of receiving payment of rentals or sharing in the produce of the land,
paid the petitioner lump sums for specific kinds of work on the subject lot or gave him vales, or
advance payment of his wages as laborer thereon. The petitioner's wife claims that Alzona made her
husband sign the invoices all at one time because he allegedly needed them to reduce his income
taxes. Even assuming this to be true, we do not think that made the said payments fictitious,
especially so since the petitioner never denied having received them.
The other issue raised by the petitioner, which is decidedly legal, is easily resolved. There being no
tenancy relationship, the contention that the private respondent's complaint has prescribed under
Section 38 of R.A. 3844 must also fail. That section is not applicable. It must be noted that at the
very outset, Alzona rejected the petitioner's claim of agricultural tenancy and immediately instituted
his action for unlawful detainer in accordance with Section 1, Rule 70 of the Rules of Court. As it
happened, the said case was held not proper for trial by the Ministry of Agrarian Reform. He then
resorted to other remedies just so he could recover possession of his land and, finally, in 1979, he
yielded to the jurisdiction of the defunct Court of Agrarian Relations by filing there an action for
declaration of non-tenancy. The action, which was commenced in 1979, was within the ten-year
prescriptive period provided under Article 1144 of the Civil Code for actions based on a written
contract. *

The Court quotes with approval the following acute observations made by Justice Alicia Sempio-Diy:
It might not be amiss to state at this juncture that in deciding this case in favor of
defendant, the lower court might have been greatly influenced by the fact that
defendant is a mere farmer who is almost illiterate while plaintiff is an educated
landlord, such that it had felt that it was its duty to be vigilant for the protection of
defendant's interests. But the duty of the court to protect the weak and the
underprivileged should not be carried out to such an extent as to deny justice to the
landowner whenever truth and justice happen to be on his side. Besides, defendant's
economic position vis a visthe plaintiff does not necessarily make him the
underprivileged party in this case, for as testified by plaintiff which defendant never
denied, the small land in question was the only landholding of plaintiff when he and
his father bought the same, at which time he was just a lowly employee who did not
even have a house of his own and his father, a mere farmer, while defendant was the
agricultural tenant of another piece of land and also owns his own house, a sari
sari store, and a caritela. Plaintiff also surmised that it was only after defendant had
been taken into its wings by the Federation of Free Farmers that he started claiming
to be plaintiff's agricultural tenant, presumably upon the Federation's instigation and
advice. And we cannot discount this possibility indeed, considering that during the
early stages of the proceedings this case, defendant even counter-proposed to
plaintiff that he would surrender the land in question to the latter if plaintiff would
convey to him another piece of land adjacent to the land in question, almost one ha.
in area, that plaintiff had also acquired after buying the land in question, showing that
defendant was not as ignorant as he would want the Court to believe and had the
advice of people knowledgeable on agrarian matters.
This Court has stressed more than once that social justice or any justice for that matter is for
the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in
case of reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom the
Constitution fittingly extends its sympathy and compassion. But never is it justified to prefer the poor
simply because they are poor, or to reject the rich simply because they are rich, for justice must
always be served, for poor and rich alike, according to the mandate of the law.
WHEREFORE, the challenged decision of the Court of Appeals is AFFIRMED and the petition is
DENIED, with costs against the petitioner. It is so ordered.
Narvasa, C.J., Grio-Aquino, Medialdea and Bellosillo, JJ., concur

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-27797 August 26, 1974
TRINIDAD GABRIEL, plaintiff-appellee,
vs.
EUSEBIO PANGILINAN, defendant-appellant.
Mariano Manahan, Jr. for plaintiff-appellee.
Virgilio M. Pablo for defendant-appellant.
Armando M. Laki for movant.

ZALDIVAR, J.:p
This appeal from the decision, dated December 26, 1963, of the Court of First Instance of
Pampanga in its Civil Case No. 1823, was certified to this Court by the Court of Appeals for the
reason that the jurisdiction of an inferior court is involved.
During the pendency of this case before this Court, under date of April 29, 1972, Atty. Virgilio M.
Pablo, counsel for the appellant Eusebio Pangilinan, gave notice to this Court that said appellant
died on April 3, 1964, and was survived by his children, who are his legal heirs, namely: Salvador
Pangilinan, Santos Pangilinan, Mariano Pangilinan, Carlos Pangilinan and Pilar Pangilinan de
Avante. For the purposes of this case the appellant Eusebio Pangilinan, therefore, is substituted by
his heirs herein named.
Under date of November 20, 1973, Atty. Amando M. Laki filed a motion with this Court advising that
appellee Trinidad Gabriel died on June 14, 1967, and was survived by her heirs and successors-ininterest, namely: Corazon O. Gabriel, married to Lamberto Ignacio; Ernesto O. Gabriel; Ester O.
Gabriel, married to Emmanuel Padua; Generoso O. Gabriel, Marciano O. Gabriel and Pablo O.
Gabriel, and prayed that appellee Trinidad Gabriel be substituted by her heirs herein named. By
order of this Court of December 4, 1973 the prayer for substitution was granted.
In its resolution dated April 19, 1967 certifying the case to this Court, the Court of Appeals made the
following findings, which We adopt:
On June 18, 1960 Trinidad Gabriel filed a complaint in the Court of First Instance of
Pampanga against Eusebio Pangilinan alleging that she is the owner of a fishpond
situated in barrio Sta. Ursula, Betis, Pampanga and measuring about 169,507 square
meters; that sometime during the last war she entered into an oral contract of lease
thereof with the defendant on a year to year basis, i.e., from January 1 to December
31, at a rental of P1,200, plus the amount of real estate taxes, payable in advance in
the month of January; that desiring to develop and cultivate the fishpond by herself,
she notified the defendant in a letter dated June 26, 1957 that she was terminating

the contract as of December 31, 1957; that upon request of the defendant, she
extended the lease for another year; that on November 19, 1958 she again wrote the
defendant that he should surrender possession of the fishpond on January 1, 1959,
which demand he however ignored. Plaintiff accordingly prayed that the defendant
be ordered to restore the possession of the fishpond to her and to pay her P1,200,
plus the amount of real estate taxes, a year from 1959, attorney's fees and costs.
The defendant moved for the dismissal of the complaint on the ground that the trial
court had no jurisdiction over the case which properly pertains to the Court of
Agrarian Relations, there being an agricultural leasehold tenancy relationship
between the parties. Upon opposition by the plaintiff, the motion was denied. The
defendant thereafter filed his answer with counterclaim alleging, inter alia, that the
land in question was originally leased to him, also verbally, by the plaintiff's father,
Potenciano Gabriel in 1923 for as long as the defendant wanted subject to the
condition that he would convert the major portion into a fishpond and the part which
was already a fishpond be improved at his expense which would be reimbursed by
Potenciano Gabriel or his heirs at the termination of the lease for whatever cause;
that when the plaintiff became the owner of the property through inheritance, she told
the defendant that she would honor her father's contract with the defendant, and
likewise assured him that he could continue leasing the property, whose original
rental of P400.00 a year had been progressively increased to P1,200.00, for as long
as he wanted since she was not in a position to attend to it personally. As a special
defense, the defendant reiterated the alleged lack of jurisdiction of the trial court to
take cognizance of the case.
On February 12, 1962 the trial court issued an order herein below quoted in full:
The plaintiff sinks to eject the defendant from the fishpond described in the complaint
which is under lease to the said defendant, who, however, refuses to vacate. Instead,
he has impugned the jurisdiction of this Court contending that the action should have
been filed with the Court of Agrarian Relations, which has original and exclusive
jurisdiction, as their relationship is one of leasehold tenancy.
After the motion to dismiss was denied on the basis of the allegations of the
complaint, the parties were ordered to adduce evidence for the purpose of
determining which Court shall take cognizance of the case.
It appears that the fishpond is presently in the possession of the defendant, who
originally leased it from the father of the plaintiff. Upon the death of the said father,
the fishpond was inherited by the plaintiff. It is now covered by T.C.T. No. 1634 and
is registered in her name. It contains an area of 169,507.00 square meters. The
rental is on a yearly basis.
It also appears that the defendant has ceased to work personally with the aid of
helpers the aforecited fishpond since 1956 he became ill and incapacitated. His
daughter, Pilar Pangilinan, took over. She testified that she helps her father in
administering the leased property, conveying his instructions to the workers, Urbano
Maninang, Isidro Bernal and Marciano Maninang. The names of Ire, Juan and
Aguedo Viada have been mentioned as the laborers who were paid for the repair of
the dikes. Bernardo Cayanan, a nephew of the defendant, acts as the watcher. He
has lived separately since he got married. Excepting Pilar Pangilinan. who is residing
near the fishpond, the other children of the defendant are all professions; a lawyer,

an engineer, and a priest all residing in Manila. None of these persons has been
seen working on the fishpond.
The above are the material and pertinent facts upon which we enter this order.
After a study of the facts and in the light of the provisions of the Tenancy Law,
Republic Act No. 1199, particularly Sections 4 and 9, as amended. it seems clear
that his case does not fall within the purview of said Act. The lease contract is
manifestly a civil lease governed by the New Civil Code. Considering the area of the
fishpond, 16 hectares, more or less, the fact that neither the defendant, who is
physically incapacitated, or his daughter is Personally cultivating the fishpond or
through the employment of mechanical farm implements, and the further fact that the
persons named above are not members of the immediate farm household of the
defendant, the conclusion is that no tenancy relationship exists between the plaintiff
and the defendant as defined by Republic Act No. 1199, as amended.
We are, therefore, of the opinion and so hold that this Court is vested with jurisdiction
to try and decide this case. After this order has become final, the plaintiff may
request for the setting of the initial trial.
The defendant does not contest the findings of facts therein made by the trial court.
After the parties adduced their respective evidence on the merits, decision was
rendered wherein the trial court Pursuant to Article 1197 of the Civil Code, fixed the
period of the low up to June 30, 1964, the defendant on said date to surrender
possession of the fishpond to the plaintiff and to pay the rentals due the latter. The
plaintiff, on her part, was required upon surrender of on to her, to pay the defendant
the sum of P1,000.00 as reimbursement of the expenses he incurred in improving
the fishpond, and upon failure by either party to pay the amount due the other, the
same would bear interest at the legal rate until full payment is made.
A reconsideration by the defendant having been denied, he appealed to this Court
and assigned the following errors:
1. The lower court erred in considering the relationship of appellee and appellant as
that of a civil lease, in accordance with the Civil Code of the Philippines and not a
leasehold tenancy under Rep. Act No. 1199 as amended.
2. The lower court erred in not holding that the Court of First Instance is without
jurisdiction, the cue being that of an agrarian relation in nature pursuant to Rep Act.
NO. 1199 as amended.
3. The lower court erred in appreciating the evidence of the appellant particularly the
basis for the expenditure for the development of the fishpond in question.
4. The lower court erred in rendering judgment in favor of the appellant in them easily
amount of one thousand pesos for reimbursement and for seven hundred pesos for
the cost of the floodgate.
Anent the question of jurisdiction, it is an admitted fact that plaintiff leased the fishpond to the
defendant in 1943 without a fixed term, the annual rental payable at the end of the year (Exhibit C,

Deposition of plaintiff, Dec. 13, 1962, pp. 2 and 3). It is likewise undisputed that the work in the
fishpond consisted in letting out the water so algae (lumut) would grow or if algae would not grow,
getting some from the river and putting them in the fishpond, changing the dirty water with fresh
water, repairing leaks in the dikes, and planting of fingerlings and attending to them; that these were
done by defendant, with some help; that he personally attended to the fishpond until 1956 when he
became ill; that thereafter his nephew Bernardo Cayanan, who was living with him, helped in the
work to be done in the fishpond and his daughter Pilar Pangilinan helped in the management,
conveying his instructions to the workers (t.s.n., pp. 4-8, Magat).
Upon the foregoing facts, the defendant insists that the relationship between the parties is an
agricultural leasehold tenancy governed by Republic Act No. 1199, as amended, pursuant to section
35 of Republic Act No. 3844, and the present case is therefore within the original and exclusive
jurisdiction of the Court of Agrarian Relations. Plaintiff, on the other hand, maintains in effect that
since defendant has ceased to work the fishpond personally or with the aid of the members of his
immediate farm household (Section 4, Republic Act No. 1199) the tenancy relationship between the
parties has been extinguished (Section 9, id.) and become of civil lease and therefore the trial court
properly assumed jurisdiction over the case.
It does appear that the controversy on the issue of jurisdiction calls for the interpretation of
cultivating or working the land by the tenant personally or with the aid of the members of his
immediate farm household. 1
Those are the findings and conclusions of facts made by the Court of Appeals which, as a general
rule, bind this Court. 2
1. Let Us now discuss the issues raised in this appeal. First, was the relationship between the
appellee and appellant a leasehold tenancy or a civil law lease?
There are important differences between a leasehold tenancy and a civil law lease. The subject
matter of leasehold tenancy is limited to agricultural land; that of civil law lease may be either rural or
urban property. As to attention and cultivation, the law requires the leasehold tenant to personally
attend to, and cultivate the agricultural land, whereas the civil law lessee need not personally
cultivate or work the thing leased. As to purpose, the landholding in leasehold tenancy is devoted to
agriculture, whereas in civil law lease, the purpose may be for any other lawful pursuits. As to the
law that governs, the civil law lease is governed by the Civil Code, whereas leasehold tenancy is
governed by special laws. 3
In order that leasehold tenancy under the Agricultural Tenancy Act may exist, the following requisites
must concur.
1. That the land worked by the tenant is an agricultural land;
2. That the land is susceptible of cultivation by a single person together with members of his
immediate farm household;
3. That the land must be cultivated by the tenant either personally or with the aid of labor available
from members of his immediate farm household;
4. That the land belongs to another; and

5. That the use of the land by the tenant is for a consideration of a fixed amount in money or in
produce or in both. 4
Were the foregoing requisites present in the instant case?
There is no doubt that the land in question is agricultural land. It is a fishpond and the Agricultural
Tenancy Act, which refers to "agricultural land", specifically mentions fishponds and prescribes the
consideration for the use thereof. Thus Section 46(c) of said Act provides that "the consideration for
the use of sugar lands, fishponds, salt beds and of lands devoted to the raising of livestock shall be
governed by stipulation between the parties". This Court has already ruled that "land in which fish is
produced is classified as agricultural land." 5 The mere fact, however, that a person works an
agricultural land does not necessarily make him a leasehold tenant within the purview of section 4 of
Republic Act No. 1199. He may still be a civil law lessee unless the other requisites as above enumerated
are complied with.

Regarding the second requisite, it is to be noted that the land in question has an area of 169,507
square meters, or roughly 17 hectares of fishpond. The question of whether such a big parcel of land
is susceptible of being worked by the appellant's family or not has not been raised, and We see no
need of tarrying on this point. So, We pass to the third requisite, to wit, whether the tenant himself
personally or with the aid of his immediate family worked the land.
Assuming that appellant had previously entered in 1923 into an agreement of leasehold tenancy with
Potenciano Gabriel, appellee's father, such tenancy agreement was severed in 1956 when he
ceased to work the fishpond personally because he became ill and incapacitated. Not even did the
members of appellant's immediate farm household work the land in question. Only the members of
the family of the tenant and such other persons, whether related to the tenant or not, who are
dependent upon him for support and who usually help him to operate the farm enterprise are
included in the term "immediate farm household" 6 The record shows who helped work the land in
question, and We quote:

It also appears that the defendant has ceased to work personally with the aid of
helpers the aforecited fishpond since 1956 when he became ill and incapacitated.
His daughter, Pilar Pangilinan took over. She testified that she helps her father in
administering the leased property, conveying his instructions to the workers, Urbano
Maninang, Isidro Bernal and Marciano Maninang. The names of Ire, Juan and
Aguedo Viada have been mentioned as the laborers who were paid for the repair of
the dikes. Bernardo Cayanan, a nephew of the defendant, acts as the watcher. He
has lived separately since he got married. Excepting Pilar Pangilinan, who is residing
near the fishpond, the other children of the defendant are all professionals: a lawyer,
an engineer, and a priest all residing in Manila. None of these persons has been
seen working on the fishpond. 7
The law is explicit in requiring the tenant and his immediate family to work the land. Thus Section 5
(a) of Republic Act No. 1199, as amended, defines a "tenant" as 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. Section 8 of the same Act limits
the relation of landholder and tenant to the person who furnishes the land and to the person who
actually works the land himself with the aid of labor available from within his immediate farm
household. Finally, Section 4 of the same Act requires for the existence of leasehold tenancy that
the tenant and his immediate farm household work the land. It provides that 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 fixed amount in money or in produce or in
both.
A person, in order to be considered a tenant, must himself and with the aid available from his
immediate farm household cultivate the land. Persons, therefore, who do not actually work the land
cannot be considered tenants;8 and he who hires others whom he pays for doing the cultivation of the
land, ceases to hold, and is considered as having abandoned the land as tenant within the meaning of
sections 5 and 8 of Republic Act. No. 1199, and ceases to enjoy the status, rights, and privileges of one.

We are, therefore, constrained to agree with the court a quo that the relationship between the
appellee Trinidad Gabriel and appellant Eusebio Pangilinan was not a leasehold tenancy under
Republic Act No. 1199. Hence, this case was not within the original and exclusive jurisdiction of the
Court of Agrarian Relations. 9
2. Regarding the second assignment of error, We accordingly rule that the Court of First Instance
correctly assumed jurisdiction over the case at bar, this being a case of civil law lease.
3. We deem it unnecessary to discuss the third and fourth assigned errors as these are issues
involving findings of facts which have been settled by the lower court, and unless there is grave
abuse of discretion, which we do not find in the record of the case, We shall not venture to discuss
the merits of the factual findings of the court a quo.
IN VIEW OF THE FOREGOING, the decision of the Court of First Instance of Pampanga in its Civil
Case No. 1823, appealed from, is affirmed, with costs against the appellants.
This decision should apply to the heirs and successors-in-interest of the original parties, as named in
this decision. In consonance with the decision of the lower court, the heirs and successors-in-interest
of appellant Eusebio Pangilinan should deliver the possession of the fishpond in question to the
heirs and successors-in-interest of appellee Trinidad Gabriel; and said heirs and successors-ininterest of appellant Eusebio Pangilinan should pay the heirs and successors-in-interest of appellee
Trinidad Gabriel the accrued rentals. From January 1, 1960, at the rate of P1,200.00 a year, until the
actual delivery of the possession of the fishpond as herein ordered, with interest at the legal rate
until full payment is made.
IT IS SO ORDERED.
Fernando, Antonio, Fernandez and Aquino, JJ., concur.
Barredo, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-20700

February 27, 1969

FIDEL TEODORO, petitioner,

vs.
FELIX MACARAEG and COURT OF AGRARIAN RELATIONS, Second Regional District, Sala
II, respondents.
Jose A. Buendia and Agustin A. Pelmoka for petitioner.
Jesus A. Garcia for respondent Felix Macaraeg.
CASTRO, J.:
Before us for review, upon a petition for certiorari, are the decision of the respondent Court of
Agrarian Relations of September 7, 1962 in CAR case 558-Gba. 68 (Nueva Ecija), ordering the
herein petitioner Fidel Teodoro to reinstate the herein private respondent Felix Macaraeg (the
petitioner in the agrarian court) to his "former landhoding ... and to keep him as the true and lawful
tenant in accordance with law," and the resolution of the same court of November 27, 1962
condemning Teodoro to pay or deliver to Macaraeg as damages "82 cavans of palay or its
equivalent value in the amount of P820.00 computed at the rate of P10.00 per cavan, plus interest at
10% until fully paid."
We turn to the factual milieu.
On June 7, 1961 Macaraeg filed a petition with the Court of Agrarian Relations (Second Regional
District, sala II, Guimba, Nueva Ecija) praying, inter alia, that (1) an interlocutory order be issued to
restrain Teodoro and Jose Niegos (the respondents below), from ejecting him from his landholding
pending resolution of his petition; and (2) after due trial, he be maintained as the lawful tenant in the
disputed landholding.
Macaraeg alleged that he is a leasehold tenant of Teodoro cultivating a farmholding situated in the
municipality of Talugtug, Nueva Ecija, of an area of four (4) hectares devoted to rice culture, and that
he has worked said land "as a tenant for the last seven years"; that on March 2, 1961 he received a
letter from Teodoro and his wife advising him that the aforesaid landholding will be given to another
tenant, on the pretext that he (Macaraeg) "is contracting be a tenant of another in said landholding";
that forthwith, Teodoro placed a new tenant, Jose Niegos, in the disputed land; that subsequently,
Niegos repeatedly forbade him from working on said riceland; that in order to avoid trouble, he
refrained from forcibly entering the landholding, but with the advent of the planting season, it became
imperative that the agrarian court order his reinstatement and restrain Teodoro and Niegos from
committing further acts of dispossession.
In his answer with counterclaim dated June 19, 1961, Teodoro categorically denied that Macaraeg
was his tenant, claiming that "ever since he became the owner of around 39 hectares of riceland in
Kalisitan, Talugtug, N. Ecija, he had always leased all of it under civil lease and he had never given
any portion of it under tenancy." He further alleged that after the expiration of his lease contract with
Macaraeg in January, 1961, his wife twice notified Macaraeg to renew his contract for the then
incoming agricultural year 1961-62, but the latter "verbally told Mrs. Teodoro that he was no longer

interested to work on the land and he was giving it up as he had left the place already." Teodoro also
claims that it was only after Macaraeg had abandoned the farmland that he decided to lease it to
Niegos.
On his part, Niegos seasonably answered, disclaming any knowledge that Macaraeg is the tenant of
Teodoro, and averring that he entered the landholding in good faith clothed with the proper authority
from the other respondent (Teodoro) and with the consent and confirmity of the petitioner
(Macaraeg) who allowed him to work on the same"; and that Macaraeg "has no more interests in the
cultivation of the landholding as could be gleaned from his actuations, like the failure to clean the
land during the months of March and April, and his failure to prepare his seed bed in the month of
May which is the period for broadcasting seedling in the community".
On February 6, 1962, when the hearing of the present controversy was nearing completion in the
respondent agrarian court but before the case was submitted for decision, Macaraeg filed a
"supplemental petition", claiming damages as a a result of his dispossession. Said petition was given
due course by the court commissioner and the requisite hearing was set for March 9, 1962. Both
Teodoro and Niegos interposed their respective answers, identically asserting that the same was
filed out of time and that the failure of Macaraeg to claim earlier his alleged damages amounted to a
fatal neglect which could no longer be cured at that very late stage of the proceedings. Nonetheless,
hearing on the said petition was disclosed that as "a result of his (Macaraeg's) ejectment, he became
destitute" since he had no "income except from those derived from transplanting and reaping
wherein he earned the amount of P30.00". It was further proved that "for the aqricultural year 196162, Jose Niegos realized a gross harvest of 110 cavans out of which he paid his rental to Fidel
Teodoro in the amount of 42 cavans and 23 kilos."
On September 7, 1962 the decision under review was rendered, with the following dispositive
portion:
IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, judgment is hereby rendered in
favor of petitioner Felix Macaraeg and against respondents Fidel Teodoro and Jose Niegos
in the tenor and disposition hereinbelow provided, to wit:
1. Jose Niegos is hereby ordered to vacate the landholding in question with an approximate
area of four (4) hectares, situated at Barrio Kalisitan, Talugtug Nueva Ecija, in favor of herein
petitioner and to refrain from molesting or in any manner disturbing his peaceful possession
and cultivation thereof, subject to the condition that said respondent shall have harvested
and threshed his crop which he planted for the current agricultural year;
2. Conformably with the preceding paragraph, Fidel Teodoro is hereby ordered to reinstate
said petitioner to his former landholding aforestated and to keep him as the true and lawful
tenant in accordance with law;
3. Declaring Exhibit A as a leasehold tenancy contract between the parties for the
agricultural year 1960-61 as the term is understood under our tenancy law; as a
consequence hereof, Exhibit 4-Teodoro and Exhibit 5-Niegos, i.e. contract of lease between
Fidel Teodoro and Jose Niegos is hereby declared void and of no legal effect; and
4. Dismissing petitioner's claim for damages as embodied in his supplemental petition.
Teodoro and Niegos filed separate motions for reconsideration which were denied by the respondent
agrarian court in its resolution of November 27, 1962. However, in the same resolution, the court a
quo reconsidered, upon motion of Macaraeg, its ruling denying the latter's prayer for damages, thus:

With respect to petitioner's claim for damages as embodied in his supplemental petition,
wherein evidence was adduced in support thereof, we believe that its admission is in
accordance with Section 2, Rule 17 of the Rules of Court of the Philippines, same not being
for the purpose of delaying the proceedings. And, the fact that the Court of Agrarian
Relations shall not be bound strictly by the technical rules of evidence but "shall act
according to justice and equity and substantial merits of the case", we believe that the
evidence to support the claim for damages received during the hearings before the court
commissioner is meritorious (Secs. 10 and 11 RA 1267, as amended). Hence, petitioner is
entitled to recover damages claimed by him from his landholder in the amount of 85 cavans
of palay which is equal to the two years rental of his landholding less his earnings during the
same period in the amount of P30.00 only or is equivalent to 3 cavans of palay. In fine, Fidel
Teodoro is liable to pay to petitioner the amount of 82 cavans of palay or its cash value of
P820.00, computed at P10.00 per cavan plus interest at 10% until fully paid.
After Teodoro's motion to reconsider the foregoing resolution was denied, he interposed on January
5, 1963 the present petition, imputing to the court the following errors:
1. In holding that Macaraeg became a tenant of Teodoro by virtue of the "Contract of Lease"
which they executed in April, 1960;
2. Assuming that the foregoing contract was in effect a leasehold tenancy agreement making
Macaraeg a tenant of Teodoro in not finding the former guilty of abandonment, an act which
terminated their tenancy relation; and
3. In condemning Teodoro to pay damages to Macaraeg for the alleged dispossession,
despite the fact that the claim for damages embodied in the abovementioned "Supplemental
Petition" below were about to be terminated.
The pertinent provisions of the disputed "Contract of Lease" between Teodoro and Macaraeg read
as follows:
That the LESSOR is the registered owner of a certain parcel of land situated at Talugtug,
Nueva Ecija, containing an area of THIRTY NINE (39) HECTARES, more or less;
That for and in consideration of the rental of Nine (9) cavans of palay per hectare for one
agricultural year, the LESSOR hereby lets and leases and the LESSEE hereby accepts an
undivided portion 4 Hectares of the abovementioned property under the following terms
and conditions:
1. That this contract of lease shall only be for the agricultural year 1960-61;
2. That the LESSEE shall give a guaranty to answer for the payment of the lease
consideration of this contract;
3. That the rental of 38.7 cavans of palay per hectare shall be paid unto the LESSOR not
later than January, 1961;
4. That the corresponding rental must be brought to the Poblacion of Muoz, Nueva Ecija, to
be deposited to any bonded Warehouse at the expense of the LESSEE and in the name of
the LESSOR;

5. That the rental must be of the same variety as that produced by the LESSEE;
6. That the LESSOR shall pay for the real property taxes corresponding to the property
leased;
7. That violation of any of the terms of this contract shall be sufficient ground to terminate the
same with damages against the guilty party;
8. That the property leased shall be used or utilized for agricultural enterprise only;
9. That in case of default on the part of the LESSEE to pay the lease consideration when the
same becomes due and payable and the collection for the same reaches the court, the
LESSEE hereby binds himself to pay the cost of the suit including reasonable attorney's
fees. (Emphasis supplied)
I. Teodoro contends that the language and tenor of the aforesaid contract clearly manifest the
intention of the parties to enter into an ordinary civil lease contract, not a leasehold tenancy
agreement as alleged by Macaraeg and sustained by the agrarian court. To start with, Teodoro
stresses, the parties denominated the said covenant as a "Contract of Lease", which assigned title
discloses their mutual intention to execute an ordinary lease contract, for, otherwise, if they had
intended to create a leasehold tenancy relation, they could have accordingly captioned their
agreement "with the word tenancy or some other word of similar import". Moreover, Teodoro points
out that "in the contract of lease in question it is significant to note that the words landlord and tenant
were conspicuous by their complete absence".
The foregoing stance assumed by Teodoro is patently untenable, in the face of the principal features
and stipulations of the contract in controversy and the pertinent provisions of existing law on
leasehold tenancy. It bears emphasis that the title, label or rubric given to a contract cannot be used
to camouflage the real import of an agreement as evinced by its main provisions. Moreover, it is
basic that a contract is what the law defines it to be, and not what it is called by the contracting
parties. 1
As correctly expressed by the respondent court, "viewed from the four corners of Exhibit A, we have
no doubt that the leasehold tenancy contract entered into between petitioner (Macaraeg) and Fidel
Teodoro is a pure and simple leasehold tenancy contract as the term is understood under our
tenancy laws." This observation of the agrarian court finds anchor in the pertinent provision of the
Agricultural Tenancy Act. Thus, section 4 of Rep. Act 1199, as amended by Rep. Act 2263, provides
that
Leasehold tenancy exists when a person who, either personally or with the aid of labor
available from members of his immediate farm household, undertaken to cultivate a piece of
agricultural land susceptible of cultivation by a single person together with members of his
immediate farm household, belonging to a legally possessed by another in consideration of a
fixed amount in money or in produced or in both.
Furthermore, section 42 of the Agricultural Tenancy Act defines a landlord-lessor as
Any person, natural or judicial, either as owner, lessee, usufructuary or legal possessor of
agricultural land, who lets, leases or rents to another said property for purposes of
agricultural production and for a price certain of ascertainable either in amount of money or
produced;

while a tenant-lessee is defined as

any person who, with the consent of the former (landlord-lessor), tills, cultivates or operates
said land, susceptible of cultivation by one individual, personally or with the aid of labor
available from among his own immediate farm household.
Gleaned from the foregoing provisions, the following could be synthesized as the principal elements
of a lease-hold tenancy contract or relation:
1. The object of the contract or the relationship is an agricultural land which is leased or
rented for the purpose of agricultural production;
2. The size of the landholding must be such that it is susceptible of personal cultivation by a
single personwith assistance from the members of his immediate farm household;
3. The tenant-lessee must actually and personally till, cultivate or operate said land, solely or
with the aid of labor from his immediate farm household; and
4. The landlord-lessor, who is either the lawful owner or the legal possessor of the land,
leases the same to the tenant-lessee for a price certain or ascertainable either in a amount of
money or produce.
Reverting to the controverted "Contract of Lease", we are of the consensus that it indubitably
contains the forgoing essential elements of a leasehold tenancy agreement.
The landholding in dispute is unmistakably an agricultural land devoted to agricultural production.
More specifically, the parties stipulated that "the property leased shall be used or utilized for
agricultural enterprise only". (Emphasis supplied). Furthermore, the parties also agreed that the
farmland must be used for rice production as could be inferred from the stipulation that "the rental of
nine (9) cavans of palay per hectare for one agricultural year ... must be of the same variety (of
palay) as that produced by the LESSEE". (Emphasis supplied)
The land is definitely susceptible of cultivation by a single person as it is of an area of only four and
A half (4-) hectares. This Court has held 2 that even a bigger area may be cultivated personally by
the tenant, singly or with the help of the members of his immediate farm household.
From the stipulation that "the rental must be of the same variety as that produced by the LESSEE", it
can reasonably be inferred that the intention of the parties was that Macaraeg personally work the
land, which he did as found by the Agrarian Court, thus: "In the instant
case, petitioner (Macaraeg) cultivated the landholdingbelonging to said respondent (Teodoro) for the
agricultural year 1960-61 in consideration of a fixed annual rental." (Emphasis supplied) Moreover,
there is no evidence that Macaraeg did not personally cultivate the land in dispute. Neither did
Teodoro allege, much less prove, that Macaraeg availed of outside assistance in the cultivation of
the said riceland.
Teodoro is the registered owner of the disputed landholding and he delivered the possession thereof
to Macaraeg in consideration of a rental certain to be paid in produce. Evidently, there was a valid
leasehold tenancy agreement. Moreover, the provision that the rental be accounted in terms of
produce 9 cavans per hectare is an unmistakable earmark, considering the other stipulations,
that the parties did actually enter into a leasehold tenancy relation.

Teodoro further argues, however, that the aforesaid "Contract of Lease" cannot possibly be
construed as establishing a leasehold tenancy relation because the parties themselves ignored and
repudiated the very essence of tenancy security of tenure when they stipulated that "this
agreement shall only be for the agricultural year 1960-61".
This argument is unacceptable. The mere fact that the parties fixed and limited the duration of their
lease contract to only one agricultural year, does not remove the relationship which they created
from the purview of leasehold tenancy, considering the general import of their agreement which
irreversibly leads to and clearly justifies tenancy coverage. It is fundamental that the tenant-lessee's
security of tenure subsists notwithstanding the termination of the contract which initially established
the tenancy relation. In the language of the law, the "expiration of the period of the contract as fixed
by the parties ... does not of itself extinguish the relationship". 3 This is a "practical consequence of
the distinction between the tenancy contract which is fixed by the parties, and the tenancy
relationship which is maintained and governed by law". 4 Furthermore, section 49 of the Agricultural
Tenancy Act provides that
Notwithstanding any agreement or provision of law as to the period of future surrender of the
land, in all cases where land devoted to any agricultural purpose is held under any system of
tenancy, the tenant shall not be dispossessed of his holdings by the landholder except for
any of the causes hereinafter enumerated and only after the same has been proved before
and the dispossession is authorized bye the court." (Emphasis supplied)
The abovecited provision does not permit the parties to stipulate at what future time the tenant shall
leave or surrender the land. Thus, this Court has held 5 that an agreement whereby the tenant was
required to return to the landlord his landholding after one crop year cannot justify the tenant's
dispossession after the said period because such agreement is expressly proscribed by law.
Still vehemently contending that he never intended to enter into any tenancy relation with Macaraeg,
Teodoro finally argues that construing the abovementioned "Contract of Lease" as a leasehold
tenancy agreement would amount to a judicial negation of his freedom to contract.
Needless to stress, this Court frowns upon and rejects any attempt to nullify the legitimate exercise
of the right to contract. We agree with Teodoro that as a landholder he has full liberty to enter into a
civil lease contract covering his property. What we want to indelibly impress, however, is that once a
landowner enters into a contract of lease whereby his land is to be devoted to agricultural production
and said landholding is susceptible of personal cultivation by the lessee, solely or with help of labor
coming from his immediate farm household, then such contract is of the very essence of a leasehold
agreement, and perforce comes under the direct coverage of the tenancy laws. Otherwise, it would
be easy to subvert, under the guise of the liberty to contract, the intendment of the law of protecting
the underprivileged and ordinarily credulous farmer from the unscrupulous schemes and pernicious
practices of the landed gentry.
II. We now come to the second assignment of error. Teodoro posits that granting the establishment
of a leasehold tenancy relation between him and Macaraeg by virtue of the aforesaid "Contract of
Lease", the agrarian court nevertheless erred in not finding Macaraeg guilty of abandonment, an act
which terminates the tenancy relation and justifies the ejectment of the tenant. In support of his
thesis, Teodoro points out that Macaraeg committed a positive act of abandonment when he offered
to vacate his leasehold in favor of a certain Luciano Claus, and only after "he could not have his own
way of placing Luciano Claus as his successor" did he try to "recover the land holding". Assuming
the veracity of the foregoing allegation, a tenant's offer or intention to surrender his hold on the
condition that the person named by him should be accepted as his successor, does not of itself
constitute abandonment of his farmland.

"The word 'abandon', in its ordinary sense, means to forsake entirely; to forsake or renounce utterly.
The dictionaries trace this word to the root idea of 'putting under a ban'. The emphasis is on the
finality and the publicity with which some thing or body is thus put in the control of another, and
hence the meaning of giving up absolutely, with intent never again to resume or claim one's rights or
interests." 6 In other words, the act of abandonment constitutes actual, absolute and irrevocable
desertion of one's right or property. In the case at bar, Macaraeg merely intended to vacate his
leasehold possession on the condition that a certain Claus be taken as his successor. Hence, his act
did not constitute desertion of his leasehold as it was a mere intended surrender of the same. And
as correctly espoused by the counsel for the respondent court, it is "only through the actual
surrender of the land that tenancy relation terminates; no amount of intention to surrender severs the
relationship". Furthermore, the said act of Macaraeg was not an absolute renunciation of his
leasehold possession, as it was in fact clearly conditional.
However, Teodoro also claims, with characteristic certitude that Macaraeg did actually abandon
work on the land in dispute and that even the decision under review contains a finding to this effect.
We find no statement in the agrarian court's decision sustaining Teodoro's view. On the contrary, we
perceive truth in the respondent court's counsel's manifestation that
The only times that the tenant herein did not work the land were (1) during the time it was
undergoing its regular dry season fallow, and, ... (2) after he was prohibited from plowing the
land by a certain Niegos, an agent of petitioner. Failure to cultivate during the dry season
fallow definitely does not amount to abandonment (Cf. De la Cruz vs. Asociacion Zangera
Casilan et al., 83 Phil. 214). Likewise, failure to cultivate the land by reason of the forcible
prohibition to do so by a third party cannot also amount to abandonment, for abandonment
presupposes free will.
Anent the charge of abandonment, it is also pertinent to note that four days after Macaraeg received
a letter from Teodoro and his wife advising him that the landholding in question will be given to
another tenant, he lost no time in inquiring from the Tenancy Mediation Commission at Cabanatuan
City about his rights as a leasehold tenant. It would appear therefore that Macaraeg's immediate
reaction to his landlord's design to dispossess him negates the act of abandonment imputed to him.
Moreover, Teodoro's pretension that Macaraeg had abandoned the disputed landholding was
squarely rejected by the agrarian court, thus:
In the instant case, while petitioner had intentions to surrender his landholding to respondent
after the harvest for the agricultural (year) 1960-61 which led the latter to advise the former
not to give his landholding to Luciano Claus, yet that surrender did not materialize because
said petitioner had apparently changed his mind. For as early as March 6, 1961, petitioner
went to the Office of the Tenancy Mediation Commission, Cabanatuan City for consultation.
As a matter of fact, said Commission wrote a letter to Fidel Teodoro and his wife advising
them to enjoin their overseer, Benito Ismael, from ejecting petitioner.
During the intervening period, Fidel Teodoro and his wife entered into another lease contract
of tenancy with Jose Niegos. For this reason, Mariano Niegos, son of Jose Niegos,
prevented petitioner from plowing his landholding when he found him in the premises on
June 1, 1961. However, notwithstading this incident, Fidel Teodoro opened the door for
negotiations. In fact, as late as June 23, 1961, when petitioner went to the house of Fidel
Teodoro in Manila, a conference was set for that purpose at the house of Benito Ismael
in Muoz, Nueva Ecija which did not take place because of the absence of petitioner. Under
these circumstances, it appears to our mind that while negotiations for settlement were still

pending, yet petitioner has not, in truth and in fact, surrendered his landholding. (Emphasis
supplied)
We are not at liberty to reverse the foregoing finding of fact in the absence of any proof that it is
unfounded or was arbitrarily arrived at or that the Court had failed to consider important evidence to
the contrary. 7 This Court has consistently ruled that the findings of fact of the Court of Agrarian
Relations will not be disturbed on appeal where there is substantial evidence to support them. 8 In the
case at bar, the finding of fact by the by the respondent court anent the issue of abandonment rests
on substantial evidence.
III. Toward the end of the proceedings in the respondent court, Macaraeg interposed a pleading
which he denominated "supplemental petition", wherein he asked for damages as a result of his
dispossession. The said "supplemental petition" was given due course by the hearing commissioner
and Macaraeg was allowed to present evidence in support thereof. On the basis of the evidence
thus adduced, the respondent court awarded damages to Macaraeg as decreed in its
abovementioned resolution of November 27, 1962.
Teodoro maintains that the respondent court erred in admitting the said "supplemental pleading" on
the basis of section 2, Rule 17 (now section 3 of Rule 10 of the Revised Rules of Court) which
exclusively pertains to amendment of pleadings, and has nothing to do with the interposition of
supplemental pleadings which is separately governed by section 5 of Rule 17 (now section 5 of Rule
10). Teodoro avers, moreover, that since Macaraeg filed his claim for damages only when the
hearing below was about to end, his inaction must be considered as a waiver of such claim or that
he should be considered guilty of fatal negligence.
In resolving this last assignment of error, attentions must be centered on the liberal policy which
frees the Court of Agrarian Relations from the fetters of formalistic procedure. As aptly observed in
one case,9
Social justice would be a meaningless term if in a situation like the present, an element of
rigidity would be affixed to procedure precepts and made to cover the matter. Flexibility
should not be ruled out. Precisely, what is sought to be accomplished, by such a
fundamental principle expressly so declared by the Constitution (Art. II, sec. 5) is the
effectiveness of the community's effort to assist the economically underprivileged. For under
existing conditions, without such succor and support, they might not, unaided, be able to
secure justice for themselves....
Moreover, there is equally the obligation on the part of the State to afford protection to labor.
The responsibility is incumbent then, not only on the legislative and executive branches but
also on the judiciary, to translate this pledge into a living reality. The present case is an
appropriate occasion for the discharge of such a trust. To preclude relief under the
circumstances herein disclosed would be to fail to submit to the dictates of a plain
constitutional duty. That we should not allow to happen.
Since the abovementioned "supplemental pleading" was filed without intent to delay the
proceedings, the agrarian court exercised sound discretion in giving it due course in order that "the
real matter in dispute and all matters in the action in dispute between the parties may, as far as
possible, be completely determined in a single proceeding". Moreover Teodoro has no reason to
complain, for he was accorded every opportunity to controvert Macaraeg's claim for damages, but
apparently he did not, as in fact he does not here traverse the substantiality of the award.
lawphi 1.nt

Significantly, the Court of Agrarian Relations is not restricted to the specific relief claimed or
demanding made by the parties to the dispute, but may include in the order or decision any matter or
determination which may be deemed necessary and expedient for the purpose of settling the dispute
or of preventing further disputes, provided said matter for determination has been established by
competent evidence during the hearing". 10 In words, the respondent court could have determined
Macaraeg's claim for damages even without his "supplemental petition", provided there was proof to
substantiate such claim (and such requisite evidence was not wanting). Hence if the agrarian court
could, have awarded damages in favor of Macaraeg even in the absence of a specific prayer; then
there is no conceivable reason to bar the respondent court from granting the same with the
interposition of the aforesaid "supplemental petition" which explicitly and unmistakeably prays for
damages resulting from Macaraeg's dispossession.
We hasten to modify however, the award of damages in so far as it deducts from the total amount
recoverable by Macaraeg the sum of P30 or its equivalent of 3 cavans of palay, representing his
earnings during the period of his unlawful ejectment. This part of the award contravenes section
27(1) of the Agricultural Tenancy Act which makes the erring landlord "liable to the tenant for
damages to the extent of the landholder's participation in the harvest in addition to the tenant's right
under Section twenty-two of this Act". And section 22(1) provides that the "tenant shall be free to
work elsewhere whenever the nature of his farm obligations warrants his temporary absence from
his holdings". Consequently, Macaraeg's measly earning of P30 during the period of his
dispossession should not be deducted from the total amount of damages due to him. Interpreting the
abovecited section 27(1) in relation to section 22(1), this Court, speaking through Mr. Justice J.B.L.
Reyes held that
The earnings of the tenants during the period of unlawful ejectment are not now deductible
from the award of damages. In the case of Potenciano vs. Estefani L-7690, promulgated on
27 July 1955, this Court, on grounds of equity, ruled to deduct such income but said case
was decided under the prior law, Act 4054. The above-quoted Section 27(1) of Republic Act
No. 1199, as amended, which is the one applicable to the present case, not only provides for
a quantum of damages to the tenant, based on the landlord's share in the harvest, but adds
thereto his right under section 22, which states:
(1) the tenant shall be free to work elsewhere whenever the nature of his farm
obligations warrants his temporary absence from his holdings.
This right, although already granted under section 20 of Act 4054, was not then a right
additional to the recovery of damages consequent to unlawful dismissal, but under Republic
Act 1199, as amended, it is to be added to the damages recoverable.11
ACCORDINGLY, the decision and resolution under review are hereby affirmed, with the sole
modification that the earnings of the herein respondent during the period of his dispossession shall
not be deducted from the award of damages. Cost against the petitioner.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Capistrano,
Teehankee and Barredo, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 85611 April 6, 1990
VICTORIANO ZAMORAS, petitioner,
vs.
ROQUE SU, JR., ANITA SU HORTELLANO and NATIONAL LABOR RELATIONS
COMMISSION, respondents.
Paulo V. Briones for petitioner.
Pacifico C. Cimafranca for private respondents.

GRIO-AQUINO, J.:
The issue in this petition is whether, upon the established facts, the petitioner was an employee or
tenant of the private respondents.
The petitioner, Victoriano Zamoras, was hired by the respondent, Roque Su, Jr., in 1957
as overseer of his coconut land in Asenario, Dapitan City. Zamoras was charged with the task of
having the land titled in Su's name, and of assigning portions to be worked by tenants, supervising
the cleaning, planting, care and cultivation of the land, the harvesting of coconuts and selling of the
copra. As compensation, Su paid Zamoras a salary of P2,400 per month plus one-third (1/3) of the
proceeds of the sales of copra which normally occurred every two months. Another one-third of the
proceeds went to the tenants and the other third to Su. This system of sharing was regularly
observed up to September, 1981. As the coconut plantation yielded an average harvest of 21,000
nuts worth P18,900, based on the current market price of P3 per kilo, Zamoras' share amounted to
P6,300 every two months.
In May, 1981, Su informed Zamoras in writing that he obtained a loan from the other respondent,
Anita Su Hortellano, and that he authorized her to harvest the coconuts from his property "while the
loan was outstanding" (p. 8, Rollo). Su sent Zamoras a letter dated May 29, 1981 informing him that
he was being laid-off temporarily until Su could obtain a loan from the Development Bank of the
Philippines with which to pay Anita. However, Zamoras was not allowed anymore to work as
overseer of the plantation. Without his knowledge and consent, Hortellano harvested the coconuts
without giving him his one-third share of the copra sales.
On August 8, 1983, Zamoras filed in the Regional Arbitration Branch of the Ministry of Labor and
Employment in Zamboanga City a complaint against Roque Su, Jr. and Anita Su Hortellano for
illegal termination and breach of contract with damages of not less than P75,600 as his uncollected
share of the copra sales from September 15, 1981 to August 1983.
The officer-in-charge of the NLRC Sub-Regional Office in Dipolog City who investigated the case
submitted the following findings which were adopted by the Labor Arbiter

The record would show that the respondent, Atty. Roque Su, Jr., is a resident of 976A Gerardo Avenue Extension, Lahug, Cebu City and at the same time an employee
in the government up to the present, while the land wherein the complainant herein
was employed by the respondent as overseer of the land since 1957 up to and until
his termination from the service sometime in September 1981 without just cause or
causes duly authorized by law and after due process. That to prove that complainant
was the overseer of the land owned by the respondent are the sworn declaration of
the three witnesses, namely: Vicente Amor, Narcisa Arocha, and Wilfredo Bernaldes
who are presently working as tenants of the respondent. That the three witnesses
testified that they knew the complainant personally who has been working as
overseer of the land because it was through him, the complainant, that they were
allowed to work and/or occupy the land as tenants ever since up to the present. In
fact, they further declared that they do not know personally the owner of the land and
besides, they have not seen personally the said owner as their dealing were directly
done thru the complainant. That they always received their share of the produce from
the complainant for every two months up to 1981.
xxx xxx xxx
It is very clear in the evidence of record that complainant was an employee of the
respondent. This fact is even admitted by the respondent in his answer by way of
controverting the claim of the complainant. (pp. 44-45, Rollo.)
On July 30, 1986, the Labor Arbiter rendered a decision holding that Zamoras, as overseer of the
respondent's plantation, was a regular employee whose services were necessary and desirable to
the usual trade or business of his employer. The Labor Arbiter held that the dismissal of Zamoras
was without just cause, hence, illegal. The private respondents were ordered to reinstate him to his
former position as overseer of the plantation and to pay him backwages equivalent to P31,975.83 in
the event that he opted not to be reinstated or that his reinstatement was not feasible.
The private respondents appealed to the National Labor Relations Commission, alleging that the
Labor Arbiter erred:
1. in disregarding respondents' evidence (a financial report showing the yearly copra sales from
1973 to 1977), proving that complainant's one-third share of the copra sales amounted to P5,985.16
only and not P6,300 per harvest;
2. in not holding that the complainant can no longer be reinstated for he is already dead; and
3. in not finding that no employer-employee relationship existed between the parties.
On September 16, 1988, the NLRC rendered a decision reversing the Labor Arbiter. It held that "the
right to control test used in determining the existence of an employer-employee relationship is
unavailing in the instant case and that what exists between the parties is a landlord-tenant
relationship" (p. 32, Rollo), because such functions as introducing permanent improvements on the
land, assigning portions to tenants, supervising the cleaning, planting, care and cultivation of the
plants, and deciding where and to whom to sell the copra are attributes of a landlord-tenant
relationship, hence, jurisdiction over the case rests with the Court of Agrarian Relations.
Zamoras filed this petition, assailing the NLRC's decision.
There is merit in the petition.

The NLRC's conclusion that a landlord-tenant relationship existed between Su and Zamoras is not
supported by the evidence which shows that Zamoras was hired by Su not as a tenant but as
overseer of his coconut plantation. As overseer, Zamoras hired the tenants and assigned their
respective portions which they cultivated under Zamoras' supervision. The tenants dealt directly with
Zamoras and received their one-third share of the copra produce from him. The evidence also
shows that Zamoras, aside from doing administrative work for Su, regularly managed the sale of
copra processed by the tenants. There is no evidence that Zamoras cultivated any portion of Su's
land personally or with the aid of his immediate farm household. In fact the respondents never raised
the issue of tenancy in their answer.
Under Section 5 (a) of R.A. No. 1199, a tenant is "a person who by himself, or with the aid available
from within his immediate 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 or for a price
certain or ascertainable in produce or in money or both, under the leasehold tenancy system"
(Matienzo vs. Servidad, 107 SCRA 276). Agricultural tenancy is defined 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, whether in produce or in money, or both" (Sec. 3, R.A. No. 1199; 50
O.G. 4655-56; Miguel Carag vs. CA, et al., 151 SCRA 44).
The essential requisites of a tenancy relationship are: (1) the parties are the landholder and the
tenant; (2) the subject is the agricultural holding; (3) there is consent between the parties; (4) the
purpose is agricultural production; (5) there is personal cultivation by the tenant; and (6) there is a
sharing of harvests between landlord and tenant (Antonio Castro vs. CA and De la Cruz, G.R. L34613, January 26, 1989; Tiongson vs. CA, 130 SCRA 482; Guerrero vs. CA, 142 SCRA 138).
The element of personal cultivation of the land, or with the aid of his farm household, essential in
establishing a landlord-tenant or a lessor-lessee relationship, is absent in the relationship between
Su and Zamoras (Co vs. IAC, 162 SCRA 390; Graza vs. CA, 163 SCRA 39), for Zamoras did not
cultivate any part of Su's plantation either by himself or with the help of his household.
On the other hand, the following circumstances are indicative of an employer-employee relationship
between them:
1. Zamoras was selected and hired by Su as overseer of the coconut plantation.
2. His duties were specified by Su.
3. Su controlled and supervised the performance of his duties. He determined to whom Zamoras
should sell the copra produced from the plantation.
4. Su paid Zamoras a salary of P2,400 per month plus one-third of the copra sales every two months
as compensation for managing the plantation.
Since Zamoras was an employee, not a tenant of Su, it is the NLRC, not the Court of Agrarian
Relations, that has jurisdiction to try and decide Zamora's complaint for illegal dismissal (Art. 217,
Labor Code; Manila Mandarin Employees Union vs. NLRC, 154 SCRA 368; Jacqueline Industries
Dunhill Bags Industries, et al. vs. NLRC, et al., 69 SCRA 242).
WHEREFORE, the assailed decision is reversed and a new one is entered, declaring Zamoras to be
an employee of respondent Roque Su, Jr. and that his dismissal was illegal and without lawful

cause. He is entitled to reinstatement with backwages, but because he is dead and may no longer
be reinstated, the private respondents are ordered to pay to his heirs the backwages due him, as
well as his share of the copra sales from the plantation for a period of three (3) years from his illegal
dismissal in September, 1981, plus separation pay in lieu of reinstatement. Costs against the private
respondents.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 98028 January 27, 1992

GREGORIO CASTILLO, petitioner,
vs.
COURT OF APPEALS and ALBERTO IGNACIO, respondents.
Sumulong Law Offices for petitioner.
Bureau of Agrarian Legal Assistance for private respondent.

GUTIERREZ, JR., J.:

This is a petition for review of the Court of Appeals decision which reversed and set aside the
decision of the Regional Trial Court in Civil Case No. 8302-M and declared respondent Alberto
Ignacio as agricultural tenant of the petitioner.
On July 18, 1985, a complaint for injunction was filed by private respondent Alberto Ignacio against
petitioner Gregorio Castillo with the Regional Trial Court of Malolos, Bulacan.
It is alleged in the complaint that the respondent is the agricultural tenant of the petitioner in the
latter's parcel of land consisting of 9,920 square meters with fruit-bearing trees situated in Cut-cut,
Pulilan, Bulacan; that sometime in April 1985, the petitioner requested the respondent to allow him to
construct a resthouse in said land, and as a token of goodwill, the respondent agreed, which
agreement is embodied in a "Kasunduan" (Exhibit "C") between them; that in violation of said
agreement, the petitioner started to cut fruit-bearing trees on the land in question and filled with
adobe stones the area devoted by the private respondent to the planting of vegetables.
The complaint asked for the issuance of a writ of preliminary injunction to enjoin the petitioner from
further cutting fruit-bearing trees and from committing further acts of dispossession against the
private respondent. The injunction was granted.
The petitioner, on the other hand, contends that the private respondent is not his agricultural tenant;
that respondent Alberto Ignacio is merely a "magsisiga" (smudger) of the landholding in question;
that he did not ask permission from the private respondent to construct a rest house on subject land,
since as owner thereof, he had the right to do so; that he was merely exercising his right of
ownership when he cut certain trees in the subject premises; that when the barangay captain failed
to settle the conflict and the matter was referred to the MAR-BALA (Ministry of Agrarian ReformBureau of Agrarian Legal Assistance) Office in Malolos, Bulacan, Atty. Benjamin Yambao of the
MAR (Ministry of Agrarian Reform) prepared the "Kasunduan" attached to the respondent's
complaint, but when he (petitioner) said that he had some misgivings about some words therein,
Atty. Yambao assured him that he need not worry because the respondent could not be a

"kasamang magsasaka" of his mango land because there is nothing to cultivate or till in said land,
but he still corrected the last part of par. 4 of said "Kasunduan" by making it read "sa kanilang
matiwasay na kaugnayan" before signing the same.
On September 28, 1988, the trial court rendered judgment declaring that no tenancy relationship
exists between the petitioner and the private respondent. The dispositive portion of the decision
reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered:
a) dismissing the above-entitled case, with costs against the plaintiff;
b) lifting the preliminary injunction issued on September 18, 1985 and declaring the
same legally inefficacious henceforth; and
c) directing the plaintiff no pay unto the defendant the amount of P10,000.00 as and
for attorney's fees.
From the above decision, the private respondent appealed to the Court of Appeals which reversed
and set aside the decision of the trial court. The respondent appellate court declared that there
exists a tenancy relationship between Alberto Ignacio and Gregorio Castillo and permanently
enjoined the latter from disturbing the respondent's peaceful possession as tenant of said land.
Hence, the instant petition was filed, with the petitioner assigning the following errors as the issues
raised to us:
I
The Court of Appeals (Fourth Division) committed clear and patent error in reversing
the decision of the Regional Trial Court which is fully supported not only by
substantial evidence but by overwhelming evidence.
II
The Court of Appeals committed clear and reversible error and grave abuse of
discretion in declaring that "the relationship between plaintiff-appellant and
defendant-appellee over the mango land in question as one of agricultural tenancy"
despite the patent judicial admission of respondent Ignacio that he is merely a
"magsisiga" of the mango land under litigation.
III
The Court of Appeals committed grave abuse of discretion in permanently enjoining
petitioner "from disturbing plaintiff-appellant's peaceful possession as tenant of said
land," although private respondent is not in physical possession of the land,
respondent Ignacio being merely and admittedly a "magsisiga" of the mango land in
question.
IV

The Court of Appeals committed clear and patent error in not ordering the
termination of any and all relationships between petitioner and private respondent,
the latter having failed to perform the work of "magsisiga" on the subject parcel of
land and instead he obstructs the driveway by scattering rubbish, dry leaves, dirt and
other rubbish, preventing the petitioner from proceeding to the premises of the land
by putting up a barb wire fence which are acts of harrassment, disturbing the
peaceful possession of petitioner and which acts are inimical to the continuation of
any kind of relationship between Gregorio Castillo and Alberto Ignacio.
The issue to be resolved in the present petition is whether or not a tenancy relationship exists
between the parties.
The Agricultural Tenancy Act defines "agricultural tenancy" as
. . . the physical possession by a person of a 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. (Sec. 3, R.A. No. 1199; 50 O.G. 4655-56).
As held in the case of Qua v. Court of Appeals (198 SCRA 236 [1991]), the essential requisites of
tenancy relationship are: (1) the parties are the landowner and the tenant; (2) the subject is
agricultural land; (3) the purpose is agricultural production; (4) there is consideration which consist of
sharing the harvest; (5) there is consent to the tenant to work on the land and (6) there is personal
cultivation by him.
From the foregoing definition, the petitioner insists that for a person to claim tenancy relationship, he
must be an occupant or must be in physical possession of the agricultural land. He alleges that,
Alberto Ignacio, being a mere smudger (magsisiga) of the mango land, no tenancy relationship can
exist between them absent the element of physical possession.
In Gagola v. Court of Agrarian Relations (18 SCRA 992 [1966]), the Court held that a tenant has
possession of the land only through personal cultivation. Thus, in the instant case, the key factor in
ascertaining the existence of a landowner-tenant relationship is whether or not there is personal
cultivation of the land by the private respondent.
The trial court noted that:
Let alone or notwithstanding the use of the phrase "kasamang magsasaka" in the
Kasunduan(Exhibit C) relied upon by the plaintiff, there is no dispute that the actual
role ever played by the plaintiff vis-a-vis the land in litigation was that of a mere
"magsisiga" (smudger). Stated differently, plaintiff has never performed on the
property in question any of the acts of cultivation contemplated by the law as
essential to the creation of an agricultural tenancy relationship. In fine, it is the sense
of the Court that absent the important factor of cultivation, no tenancy relationship
has ever existed between the plaintiff and the defendant over the property involved in
the instant case. At most and at best, the contractual relationship between them was
purely civil nature consisting solely of the seasonal engagement of plaintiff's services
as "magsisiga" or "taga-suob."
On this matter, the appellate court disagreed and noted instead that personal cultivation by
respondent Ignacio of petitioner land is clearly spelled out or admitted in the "Kasunduan" (Exhibit

"C") in view of the aforementioned provision therein that nobody except petitioner and the members
of his family could enter said land without said petitioner's written permission.
We agree with the trial court that the element of personal cultivation is absent. The main thrust of the
petitioner's argument is that the respondent Court of Appeals is mandated by law to affirm the
decision of the Regional Trial Court, acting as an Agrarian Court, 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, the private respondent contends that the
findings of fact of the Court of Appeals are final and conclusive on the parties and on the Supreme
Court.
After painstakingly going over the records of the petition, we find no strong and cogent reason which
justifies the appellate court's deviation from the findings and conclusions of the trial court. As pointed
out in Hernandez v.Intermediate Appellate Court (189 SCRA 758 [1990]), in agrarian cases, all that
is required is mere substantial evidence. Hence, the agrarian court's findings of fact which went
beyond the minimum evidentiary support demanded by law, that is supported by substantial
evidence, are final and conclusive and cannot be reversed by the appellate tribunal.
Moreover, and as significantly held in Qua v. Court of Appeals (supra), the fact that the source of
livelihood of the private respondents is not derived from the lots they are allegedly tenanting is
indicative of non-agricultural tenancy relationship.
Under the facts obtaining in the case, respondent Ignacio is a businessman by occupation and this is
his principal source of income. He manufacturers hollow blocks. He also has a piggery and poultry
farm as well as a hardware store on the land adjoining the subject land. To add to that, the
respondent farms the riceland of one Dr. Luis Santos. It is thus evident that the working hours of the
respondent as a businessman and his other activities do not permit him to undertake the work and
obligations of a real tenant. This is further supported by the undisputed fact that the respondent
cannot even personally perform the work of a smudger because on October 22, 1986, the
respondent hired some 20 people who are not members of his family to cut and burn the grass in the
premises of the subject land.
Anent the element of consent, the petitioner contends that the best evidence and imperishable proof
of the relationship of the parties is that shown in the complaint filed by private respondent with the
barangay captain Tomas Mercado that he is a mere "magsisiga" of the mango trees on the subject
parcel of land. On the other hand, the respondent appellate court said that the best proof of the
existence of tenancy relationship is the "Kasunduan" (Exhibit "C") and that under Section 7, Rule
130 of the Revised Rules of Court, 'when the subject of inquiry is the contents of a document, no
evidence shall be admissible other than the original document itself,' subject only to certain
exceptions. Inasmuch as substantial evidence does not only require the presence of a mere scintilla
of evidence (Berenguer, Jr. v. CA, 164 SCRA 433 [1988] citing Ang Tibay v. Court of Industrial
Relations, 69 Phil. 635 [1940]), we rule that there is no concrete evidence on record sufficient to
establish that the element of consent is present. But even assuming arguendo that the element of
consent is present, we declared in De los Reyes v. Espineli (30 SCRA 574 [1969]) that absent the
element of personal cultivation, one cannot be a tenant even if he is so designated in the written
agreement of the parties.
With respect to the requisite of sharing the harvests, the respondent appellate court considered the
receipt (Exhibit "E") signed by the petitioner's son Walderado Castillo as its evidence. On this point,
the petitioner has correctly argued that the receipt is inadmissible on the ground that he did not
participate in its execution.

The maxim "res inter alios acta altere nocere non debet," found in Section 28, Rule 130, Rules of
Court applies, for as stated in Gevero v. Intermediate Appellant Court (189 SCRA 201 [1990]) the
right of a party cannot be prejudiced by an act, declaration, or omission of another.
Also in pari materia is Caballes v. Department of Agrarian Reform (168 SCRA 247 [1988]), that the
fact of sharing alone is not sufficient to establish a tenancy relationship. Well-settled is the rule that
all the requisites must concur in order to create a 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. (Qua v. Court of
Appeals, supraciting Tiongson v. Court of Appeals, 130 SCRA 482 [1984]).
However, with respect to the award of attorney's fees by the trial court, the award of P10,000.00 is
unwarranted since the action appears to have been filed in good faith. There should be no penalty
on the right to litigate. (Ilocos Norte Electric Company v. Court of Appeals, 179 SCRA 5 [1989] citing
Espiritu v. Court of Appeals, 137 SCRA 50 [1985]).
WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals is hereby
REVERSED and SET ASIDE and the decision of the Regional Trial Court is REINSTATED with the
MODIFICATION that the award of attorney's fees is DELETED.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.