FIRST DIVISION

[G.R. No. 47800. December 2, 1940.]

MAXIMO CALALANG,
Respondents.

Petitioner,

v.

A.

D.

WILLIAMS,

ET

AL.,

Maximo Calalang in his own behalf.

Solicitor General Ozaeta and Assistant Solicitor General Amparo
for respondents Williams, Fragante and Bayan
City Fiscal Mabanag for the other respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT
No. 648; DELEGATION OF LEGISLATIVE POWER; AUTHORITY OF DIRECTOR
OF PUBLIC WORKS AND SECRETARY OF PUBLIC WORKS AND
COMMUNICATIONS TO PROMULGATE RULES AND REGULATIONS. The
provisions of section 1 of Commonwealth Act No. 648 do not confer
legislative power upon the Director of Public Works and the Secretary of
Public Works and Communications. The authority therein conferred upon
them and under which they promulgated the rules and regulations now
complained of is not to determine what public policy demands but merely
to carry out the legislative policy laid down by the National Assembly in
said Act, to wit, "to promote safe transit upon, and avoid obstructions on,
roads and streets designated as national roads by acts of the National
Assembly or by executive orders of the President of the Philippines" and to
close them temporarily to any or all classes of traffic "whenever the
condition of the road or the traffic thereon makes such action necessary or
advisable in the public convenience and interest." The delegated power, if
at all, therefore, is not the determination of what the law shall be, but
merely the ascertainment of the facts and circumstances upon which the
application of said law is to be predicated. To promulgate rules and
regulations on the use of national roads and to determine when and how
long a national road should be closed to traffic, in view of the condition of
the road or the traffic thereon and the requirements of public convenience
and interest, is an administrative function which cannot be directly
discharged by the National Assembly. It must depend on the discretion of
some other government official to whom is confided the duty of
determining whether the proper occasion exists for executing the law. But
it cannot be said that the exercise of such discretion is the making of the
law.
2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL
AUTHORITY. Commonwealth Act No. 548 was passed by the National
Assembly in the exercise of the paramount police power of the state. Said
Act, by virtue of which the rules and regulations complained of were
promulgated, aims to promote safe transit upon and avoid obstructions on
national roads, in the interest and convenience of the public. In enacting

said law, therefore, the National Assembly was prompted by considerations

of public convenience and welfare. It was inspired by a desire to relieve
congestion of traffic, which is, to say the least, a menace to public safety.
Public welfare, then, lies at the bottom of the enactment of said law, and
the state in order to promote the general welfare may interfere with
personal liberty, with property, and with business and occupations. Persons
and property may be subjected to all kinds of restraints and burdens, in
order to secure the general comfort, health, and prosperity of the state
(U.S. v. Gomer Jesus, 31 Phil., 218). To this fundamental aim of our
Government the rights of the individual are subordinated. Liberty is a
blessing without which life is a misery, but liberty should not be made to
prevail over authority because then society will fall into anarchy. Neither
should authority be made to prevail over liberty because then the
individual will fall into slavery. The citizen should achieve the required
balance of liberty and authority in his mind through education and,
personal discipline, so that there may be established the resultant
equilibrium, which means peace and order and happiness for all. The
moment greater authority is conferred upon the government, logically so
much is withdrawn from the residuum of liberty which resides in the
people. The paradox lies in the fact that the apparent curtailment of liberty
is precisely the very means of insuring its preservation.
3. ID.; ID.; SOCIAL JUSTICE. Social justice is "neither communism, nor
despotism, nor atomism, nor anarchy," but the humanization of laws and
the equalization of social and economic forces by the State so that justice
in its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure
economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally, through
the adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all governments
on the time-honored principle of salus populi est suprema lex. Social
justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the
protection that should be equally and evenly extended to all groups as a
combined force in our social and economic life, consistent with the
fundamental and paramount objective of the state of promoting the health,
comfort, and quiet of all persons, and of bringing about "the greatest good
to the greatest number."
DECISION
LAUREL, J.:
Maximo Calalang, in his capacity as a private citizen and as a taxpayer of
Manila, brought before this court this petition for a writ of prohibition
against the respondents, A. D. Williams, as Chairman of the National Traffic
Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan,
as Acting Secretary of Public Works and Communications; Eulogio
Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting

Chief of Police of Manila.

It is alleged in the petition that the National Traffic Commission, in its
resolution of July 17, 1940, resolved to recommend to the Director of Public
Works and to the Secretary of Public Works and Communications that
animal-drawn vehicles be prohibited from passing along Rosario Street
extending from Plaza Calderon de la Barca to Dasmarias Street, from 7:30
a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal
Avenue extending from the railroad crossing at Antipolo Street to Echague
Street, from 7 a.m. to 11 p.m., from a period of one year from the date of
the opening of the Colgante Bridge to traffic; that the Chairman of the
National Traffic Commission, on July 18, 1940 recommended to the Director
of Public Works the adoption of the measure proposed in the resolution
aforementioned, in pursuance of the provisions of Commonwealth Act No.
548 which authorizes said Director of Public Works, with the approval of the
Secretary of Public Works and Communications, to promulgate rules and
regulations to regulate and control the use of and traffic on national roads;
that on August 2, 1940, the Director of Public Works, in his first
indorsement to the Secretary of Public Works and Communications,
recommended to the latter the approval of the recommendation made by
the Chairman of the National Traffic Commission as aforesaid, with the
modification that the closing of Rizal Avenue to traffic to animal-drawn
vehicles be limited to the portion thereof extending from the railroad
crossing at Antipolo Street to Azcarraga Street; that on August 10, 1940,
the Secretary of Public Works and Communications, in his second
indorsement addressed to the Director of Public Works, approved the
recommendation of the latter that Rosario Street and Rizal Avenue be
closed to traffic of animal-drawn vehicles, between the points and during
the hours as above indicated, for a period of one year from the date of the
opening of the Colgante Bridge to traffic; that the Mayor of Manila and the
Acting Chief of Police of Manila have enforced and caused to be enforced
the rules and regulations thus adopted; that as a consequence of such
enforcement, all animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above-mentioned to the detriment not only of
their owners but of the riding public as well.
It is contended by the petitioner that Commonwealth Act No. 548 by which
the Director of Public Works, with the approval of the Secretary of Public
Works and Communications, is authorized to promulgate rules and
regulations for the regulation and control of the use of and traffic on
national roads and streets is unconstitutional because it constitutes an
undue delegation of legislative power. This contention is untenable. As was
observed by this court in Rubi v. Provincial Board of Mindoro (39 Phil, 660,
700), "The rule has nowhere been better stated than in the early Ohio case
decided by Judge Ranney, and since followed in a multitude of cases,
namely: The true distinction therefore is between the delegation of power
to make the law, which necessarily involves a discretion as to what it shall
be, and conferring an authority or discretion as to its execution, to be
exercised under and in pursuance of the law. The first cannot be done; to
the latter no valid objection can be made. (Cincinnati, W. & Z. R. Co. v.
Commrs. Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief

Justice Marshall in Wayman v. Southard (10 Wheat., 1) may be committed

by the Legislature to an executive department or official. The Legislature
may make decisions of executive departments or subordinate officials
thereof, to whom it has committed the execution of certain acts, final on
questions of fact. (U.S. v. Kinkead, 248 Fed., 141.) The growing tendency in
the decisions is to give prominence to the necessity of the case."cralaw
virtua1aw library
Section
1
of
Commonwealth
follows:jgc:chanrobles.com.ph

Act

No.

548

reads

as

"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads
and streets designated as national roads by acts of the National Assembly
or by executive orders of the President of the Philippines, the Director of
Public Works, with the approval of the Secretary of Public Works and
Communications, shall promulgate the necessary rules and regulations to
regulate and control the use of and traffic on such roads and streets. Such
rules and regulations, with the approval of the President, may contain
provisions controlling or regulating the construction of buildings or other
structures within a reasonable distance from along the national roads. Such
roads may be temporarily closed to any or all classes of traffic by the
Director of Public Works and his duly authorized representatives whenever
the condition of the road or the traffic thereon makes such action
necessary or advisable in the public convenience and interest, or for a
specified period, with the approval of the Secretary of Public Works and
Communications."cralaw virtua1aw library
The above provisions of law do not confer legislative power upon the
Director of Public Works and the Secretary of Public Works and
Communications. The authority therein conferred upon them and under
which they promulgated the rules and regulations now complained of is not
to determine what public policy demands but merely to carry out the
legislative policy laid down by the National Assembly in said Act, to wit, "to
promote safe transit upon and avoid obstructions on, roads and streets
designated as national roads by acts of the National Assembly or by
executive orders of the President of the Philippines" and to close them
temporarily to any or all classes of traffic "whenever the condition of the
road or the traffic makes such action necessary or advisable in the public
convenience and interest." The delegated power, if at all, therefore, is not
the determination of what the law shall be, but merely the ascertainment
of the facts and circumstances upon which the application of said law is to
be predicated. To promulgate rules and regulations on the use of national
roads and to determine when and how long a national road should be
closed to traffic, in view of the condition of the road or the traffic thereon
and the requirements of public convenience and interest, is an
administrative function which cannot be directly discharged by the
National Assembly. It must depend on the discretion of some other
government official to whom is confided the duty of determining whether
the proper occasion exists for executing the law. But it cannot be said that
the exercise of such discretion is the making of the law. As was said in
Lockes Appeal (72 Pa. 491): "To assert that a law is less than a law,

because it is made to depend on a future event or act, is to rob the

Legislature of the power to act wisely for the public welfare whenever a law
is passed relating to a state of affairs not yet developed, or to things future
and impossible to fully know." The proper distinction the court said was
this: "The Legislature cannot delegate its power to make the law; but it can
make a law to delegate a power to determine some fact or state of things
upon which the law makes, or intends to make, its own action depend. To
deny this would be to stop the wheels of government. There are many
things upon which wise and useful legislation must depend which cannot
be known to the law-making power, and, must, therefore, be a subject of
inquiry and determination outside of the halls of legislation." (Field v. Clark,
143 U. S. 649, 694; 36 L. Ed. 294.)
In the case of People v. Rosenthal and Osmea, G.R. Nos. 46076 and
46077, promulgated June 12, 1939, and in Pangasinan Transportation v.
The Public Service Commission, G.R. No. 47065, promulgated June 26,
1940, this Court had occasion to observe that the principle of separation of
powers has been made to adapt itself to the complexities of modern
governments, giving rise to the adoption, within certain limits, of the
principle of "subordinate legislation," not only in the United States and
England but in practically all modern governments. Accordingly, with the
growing complexity of modern life, the multiplication of the subjects of
governmental regulations, and the increased difficulty of administering the
laws, the rigidity of the theory of separation of governmental powers has,
to a large extent, been relaxed by permitting the delegation of greater
powers by the legislative and vesting a larger amount of discretion in
administrative and executive officials, not only in the execution of the laws,
but also in the promulgation of certain rules and regulations calculated to
promote public interest.
The petitioner further contends that the rules and regulations promulgated
by the respondents pursuant to the provisions of Commonwealth Act No.
548 constitute an unlawful interference with legitimate business or trade
and abridge the right to personal liberty and freedom of locomotion.
Commonwealth Act No. 548 was passed by the National Assembly in the
exercise of the paramount police power of the state.
Said Act, by virtue of which the rules and regulations complained of were
promulgated, aims to promote safe transit upon and avoid obstructions on
national roads, in the interest and convenience of the public. In enacting
said law, therefore, the National Assembly was prompted by considerations
of public convenience and welfare. It was inspired by a desire to relieve
congestion of traffic. which is, to say the least, a menace to public safety.
Public welfare, then, lies at the bottom of the enactment of said law, and
the state in order to promote the general welfare may interfere with
personal liberty, with property, and with business and occupations. Persons
and property may be subjected to all kinds of restraints and burdens, in
order to secure the general comfort, health, and prosperity of the state
(U.S. v. Gomez Jesus, 31 Phil., 218). To this fundamental aim of our
Government the rights of the individual are subordinated. Liberty is a
blessing without which life is a misery, but liberty should not be made to

prevail over authority because then society will fall into anarchy. Neither
should authority be made to prevail over liberty because then the
individual will fall into slavery. The citizen should achieve the required
balance of liberty and authority in his mind through education and personal
discipline, so that there may be established the resultant equilibrium,
which means peace and order and happiness for all. The moment greater
authority is conferred upon the government, logically so much is withdrawn
from the residuum of liberty which resides in the people. The paradox lies
in the fact that the apparent curtailment of liberty is precisely the very
means of insuring its preservation.
The scope of police power keeps expanding as civilization advances. As
was said in the case of Dobbins v. Los Angeles (195 U.S. 223, 238; 49 L. ed.
169), "the right to exercise the police power is a continuing one, and a
business lawful today may in the future, because of the changed situation,
the growth of population or other causes, become a menace to the public
health and welfare, and be required to yield to the public good." And in
People v. Pomar (46 Phil., 440), it was observed that "advancing civilization
is bringing within the police power of the state today things which were not
thought of as being within such power yesterday. The development of
civilization, the rapidly increasing population, the growth of public opinion,
with an increasing desire on the part of the masses and of the government
to look after and care for the interests of the individuals of the state, have
brought within the police power many questions for regulation which
formerly were not so considered."cralaw virtua1aw library
The petitioner finally avers that the rules and regulations complained of
infringe upon the constitutional precept regarding the promotion of social
justice to insure the well-being and economic security of all the people. The
promotion of social justice, however, is to be achieved not through a
mistaken sympathy towards any given group. Social justice is "neither
communism, nor despotism, nor atomism, nor anarchy," but the
humanization of laws and the equalization of social and economic forces by
the State so that justice in its rational and objectively secular conception
may at least be approximated. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of measures
calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social
equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or
extra-constitutionally, through the exercise of powers underlying the
existence of all governments on the time-honored principle of salus populi
est suprema lex.
Social justice, therefore, must be founded on the recognition of the
necessity of interdependence among divers and diverse units of a society
and of the protection that should be equally and evenly extended to all
groups as a combined force in our social and economic life, consistent with
the fundamental and paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of bringing about "the
greatest good to the greatest number."cralaw virtua1aw library

In view of the foregoing, the writ of prohibition prayed for is hereby denied,
with costs against the petitioner. So ordered.
Avancea, C.J., Imperial, Diaz. and Horrilleno. JJ. concur.

EN BANC
G.R. No. 78742 July 14, 1989
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC.,
JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR.,
BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T.
GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G.
ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B.
MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA
C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO,
CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS,
DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO
and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias,
Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN
REFORM COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF
AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY
OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR
TALENTO, JAIME ABOGADO, CONRADO AVANCENA and ROBERTO
TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and
LAND BANK OF THE PHILIPPINES, respondents.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and
challenged Hercules for his life on his way to Mycenae after performing his
eleventh labor. The two wrestled mightily and Hercules flung his adversary
to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules' increasing
amazement. Finally, as they continued grappling, it dawned on Hercules
that Antaeus was the son of Gaea and could never die as long as any part
of his body was touching his Mother Earth. Thus forewarned, Hercules then
held Antaeus up in the air, beyond the reach of the sustaining soil, and

crushed him to death.

Mother Earth. The sustaining soil. The giver of life, without whose
invigorating touch even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also
tell of the elemental forces of life and death, of men and women who, like
Antaeus need the sustaining strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in
the distribution of this precious resource among our people. But it is more
than a slogan. Through the brooding centuries, it has become a battle-cry
dramatizing the increasingly urgent demand of the dispossessed among us
for a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of
social justice to "insure the well-being and economic security of all the
people," 1 especially the less privileged. In 1973, the new Constitution
affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property
and equitably diffuse property ownership and profits." 2 Significantly, there
was also the specific injunction to "formulate and implement an agrarian
reform program aimed at emancipating the tenant from the bondage of the
soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these
sentiments, it also adopted one whole and separate Article XIII on Social
Justice and Human Rights, containing grandiose but undoubtedly sincere
provisions for the uplift of the common people. These include a call in the
following words for the adoption by the State of an agrarian reform
program:
SEC. 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are landless,
to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural
lands, subject to such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or
equity considerations and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary landsharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land
Reform Code, had already been enacted by the Congress of the Philippines
on August 8, 1963, in line with the above-stated principles. This was
substantially superseded almost a decade later by P.D. No. 27, which was
promulgated on October 21, 1972, along with martial law, to provide for
the compulsory acquisition of private lands for distribution among tenantfarmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even
energized the thrust for agrarian reform. Thus, on July 17, 1987, President
Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in
favor of the beneficiaries of P.D. No. 27 and providing for the valuation of
still unvalued lands covered by the decree as well as the manner of their
payment. This was followed on July 22, 1987 by Presidential Proclamation
No. 131, instituting a comprehensive agrarian reform program (CARP), and

E.O. No. 229, providing the mechanics for its implementation.

Subsequently, with its formal organization, the revived Congress of the
Philippines took over legislative power from the President and started its
own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year of
spirited debate, was the enactment of R.A. No. 6657, otherwise known as
the Comprehensive Agrarian Reform Law of 1988, which President Aquino
signed on June 10, 1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect insofar
as they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve
common legal questions, including serious challenges to the
constitutionality of the several measures mentioned above. They will be
the subject of one common discussion and resolution, The different
antecedents of each case will require separate treatment, however, and
will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O.
Nos. 228 and 229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four
tenants and owned by petitioner Nicolas Manaay and his wife and a 5hectare riceland worked by four tenants and owned by petitioner Augustin
Hermano, Jr. The tenants were declared full owners of these lands by E.O.
No. 228 as qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on
grounds inter alia of separation of powers, due process, equal protection
and the constitutional limitation that no private property shall be taken for
public use without just compensation.
They contend that President Aquino usurped legislative power when she
promulgated E.O. No. 228. The said measure is invalid also for violation of
Article XIII, Section 4, of the Constitution, for failure to provide for retention
limits for small landowners. Moreover, it does not conform to Article VI,
Section 25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners
argue that the same may be made only by a court of justice and not by the
President of the Philippines. They invoke the recent cases of EPZA v. Dulay
5
and Manotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in
cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive
order also deprives the petitioners of their property rights as protected by
due process. The equal protection clause is also violated because the order
places the burden of solving the agrarian problems on the owners only of
agricultural lands. No similar obligation is imposed on the owners of other
properties.
The petitioners also maintain that in declaring the beneficiaries under P.D.
No. 27 to be the owners of the lands occupied by them, E.O. No. 228
ignored judicial prerogatives and so violated due process. Worse, the
measure would not solve the agrarian problem because even the small
farmers are deprived of their lands and the retention rights guaranteed by
the Constitution.

In his Comment, the Solicitor General stresses that P.D. No. 27 has already
been upheld in the earlier cases of Chavez v. Zobel, 7 Gonzales v. Estrella, 8
and Association of Rice and Corn Producers of the Philippines, Inc. v. The
National Land Reform Council. 9 The determination of just compensation by
the executive authorities conformably to the formula prescribed under the
questioned order is at best initial or preliminary only. It does not foreclose
judicial intervention whenever sought or warranted. At any rate, the
challenge to the order is premature because no valuation of their property
has as yet been made by the Department of Agrarian Reform. The
petitioners are also not proper parties because the lands owned by them
do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27
does not provide for retention limits on tenanted lands and that in any
event their petition is a class suit brought in behalf of landowners with
landholdings below 24 hectares. They maintain that the determination of
just compensation by the administrative authorities is a final
ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what
was decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that
P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have been
impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself
also be declared unconstitutional because it suffers from substantially the
same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by
Vicente Cruz, owner of a 1. 83- hectare land, who complained that the DAR
was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite
a compromise agreement he had reached with his tenant on the payment
of rentals. In a subsequent motion dated April 10, 1989, he adopted the
allegations in the basic amended petition that the above- mentioned
enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias
Mill District, Victorias, Negros Occidental. Co-petitioner Planters'
Committee, Inc. is an organization composed of 1,400 planter-members.
This petition seeks to prohibit the implementation of Proc. No. 131 and E.O.
No. 229.
The petitioners claim that the power to provide for a Comprehensive
Agrarian Reform Program as decreed by the Constitution belongs to
Congress and not the President. Although they agree that the President
could exercise legislative power until the Congress was convened, she
could do so only to enact emergency measures during the transition
period. At that, even assuming that the interim legislative power of the
President was properly exercised, Proc. No. 131 and E.O. No. 229 would still
have to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known
as the Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS
(P50,000,000,000.00) to cover the estimated cost of the Comprehensive
Agrarian Reform Program from 1987 to 1992 which shall be sourced from

the receipts of the sale of the assets of the Asset Privatization Trust and
Receipts of sale of ill-gotten wealth received through the Presidential
Commission on Good Government and such other sources as government
may deem appropriate. The amounts collected and accruing to this special
fund shall be considered automatically appropriated for the purpose
authorized in this Proclamation the amount appropriated is in futuro, not in
esse. The money needed to cover the cost of the contemplated
expropriation has yet to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment
of just compensation as it is traditionally understood, i.e., with money and
in full, but no such payment is contemplated in Section 5 of the E.O. No.
229. On the contrary, Section 6, thereof provides that the Land Bank of the
Philippines "shall compensate the landowner in an amount to be
established by the government, which shall be based on the owner's
declaration of current fair market value as provided in Section 4 hereof, but
subject to certain controls to be defined and promulgated by the
Presidential Agrarian Reform Council." This compensation may not be paid
fully in money but in any of several modes that may consist of part cash
and part bond, with interest, maturing periodically, or direct payment in
cash or bond as may be mutually agreed upon by the beneficiary and the
landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no
effort was made to make a careful study of the sugar planters' situation.
There is no tenancy problem in the sugar areas that can justify the
application of the CARP to them. To the extent that the sugar planters have
been lumped in the same legislation with other farmers, although they are
a separate group with problems exclusively their own, their right to equal
protection has been violated.
A motion for intervention was filed on August 27,1987 by the National
Federation of Sugarcane Planters (NASP) which claims a membership of at
least 20,000 individual sugar planters all over the country. On September
10, 1987, another motion for intervention was filed, this time by Manuel
Barcelona, et al., representing coconut and riceland owners. Both motions
were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian
Reform Program and that, in any event, the appropriation is invalid
because of uncertainty in the amount appropriated. Section 2 of Proc. No.
131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the minimum rather
than the maximum authorized amount. This is not allowed. Furthermore,
the stated initial amount has not been certified to by the National Treasurer
as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to
establish by clear and convincing evidence the necessity for the exercise of
the powers of eminent domain, and the violation of the fundamental right
to own property.
The petitioners also decry the penalty for non-registration of the lands,
which is the expropriation of the said land for an amount equal to the
government assessor's valuation of the land for tax purposes. On the other
hand, if the landowner declares his own valuation he is unjustly required to
immediately pay the corresponding taxes on the land, in violation of the

uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the
presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229.
He also justifies the necessity for the expropriation as explained in the
"whereas" clauses of the Proclamation and submits that, contrary to the
petitioner's contention, a pilot project to determine the feasibility of CARP
and a general survey on the people's opinion thereon are not indispensable
prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters
have failed to show that they belong to a different class and should be
differently treated. The Comment also suggests the possibility of Congress
first distributing public agricultural lands and scheduling the expropriation
of private agricultural lands later. From this viewpoint, the petition for
prohibition would be premature.
The public respondent also points out that the constitutional prohibition is
against the payment of public money without the corresponding
appropriation. There is no rule that only money already in existence can be
the subject of an appropriation law. Finally, the earmarking of fifty billion
pesos as Agrarian Reform Fund, although denominated as an initial
amount, is actually the maximum sum appropriated. The word "initial"
simply means that additional amounts may be appropriated later when
necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on
his own behalf, assailing the constitutionality of E.O. No. 229. In addition to
the arguments already raised, Serrano contends that the measure is
unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in
the title;
(3) The power of the President to legislate was terminated on July 2, 1987;
and
(4) The appropriation of a P50 billion special fund from the National
Treasury did not originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian
Reform, in violation of due process and the requirement for just
compensation, placed his landholding under the coverage of Operation
Land Transfer. Certificates of Land Transfer were subsequently issued to the
private respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of
his small landholding under Operation Land transfer and asked for the
recall and cancellation of the Certificates of Land Transfer in the name of
the private respondents. He claims that on December 24, 1986, his petition
was denied without hearing. On February 17, 1987, he filed a motion for
reconsideration, which had not been acted upon when E.O. Nos. 228 and
229 were issued. These orders rendered his motion moot and academic
because they directly effected the transfer of his land to the private
respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the
Philippines.

(2) The said executive orders are violative of the constitutional provision
that no private property shall be taken without due process or just
compensation.
(3) The petitioner is denied the right of maximum retention provided for
under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly
before Congress convened is anomalous and arbitrary, besides violating
the doctrine of separation of powers. The legislative power granted to the
President under the Transitory Provisions refers only to emergency
measures that may be promulgated in the proper exercise of the police
power.
The petitioner also invokes his rights not to be deprived of his property
without due process of law and to the retention of his small parcels of
riceholding as guaranteed under Article XIII, Section 4 of the Constitution.
He likewise argues that, besides denying him just compensation for his
land, the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after
October 21, 1972 shall be considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his
contention that the inclusion of even small landowners in the program
along with other landowners with lands consisting of seven hectares or
more is undemocratic.
In his Comment, the Solicitor General submits that the petition is
premature because the motion for reconsideration filed with the Minister of
Agrarian Reform is still unresolved. As for the validity of the issuance of
E.O. Nos. 228 and 229, he argues that they were enacted pursuant to
Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution
which reads:
The incumbent president shall continue to exercise legislative powers until
the first Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was
promulgated on October 21. 1972, the tenant-farmer of agricultural land
was deemed the owner of the land he was tilling. The leasehold rentals
paid after that date should therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the
motion he filed was resolved on December 14, 1987. An appeal to the
Office of the President would be useless with the promulgation of E.O. Nos.
228 and 229, which in effect sanctioned the validity of the public
respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No.
27 to owners of rice and corn lands not exceeding seven hectares as long
as they are cultivating or intend to cultivate the same. Their respective
lands do not exceed the statutory limit but are occupied by tenants who
are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of
P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn
shall be ejected or removed from his farmholding until such time as the
respective rights of the tenant- farmers and the landowner shall have been
determined in accordance with the rules and regulations implementing P.D.

No. 27.
The petitioners claim they cannot eject their tenants and so are unable to
enjoy their right of retention because the Department of Agrarian Reform
has so far not issued the implementing rules required under the abovequoted decree. They therefore ask the Court for a writ of mandamus to
compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been
amended by LOI 474 removing any right of retention from persons who
own other agricultural lands of more than 7 hectares in aggregate area or
lands used for residential, commercial, industrial or other purposes from
which they derive adequate income for their family. And even assuming
that the petitioners do not fall under its terms, the regulations
implementing P.D. No. 27 have already been issued, to wit, the
Memorandum dated July 10, 1975 (Interim Guidelines on Retention by
Small Landowners, with an accompanying Retention Guide Table),
Memorandum Circular No. 11 dated April 21, 1978, (Implementation
Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated
December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and
Retention by Small Landowners), and DAR Administrative Order No. 1,
series of 1985 (Providing for a Cut-off Date for Landowners to Apply for
Retention and/or to Protest the Coverage of their Landholdings under
Operation Land Transfer pursuant to P.D. No. 27). For failure to file the
corresponding applications for retention under these measures, the
petitioners are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely
initiated this case notwithstanding the pendency of their appeal to the
President of the Philippines. Moreover, the issuance of the implementing
rules, assuming this has not yet been done, involves the exercise of
discretion which cannot be controlled through the writ of mandamus. This
is especially true if this function is entrusted, as in this case, to a separate
department of the government.
In their Reply, the petitioners insist that the above-cited measures are not
applicable to them because they do not own more than seven hectares of
agricultural land. Moreover, assuming arguendo that the rules were
intended to cover them also, the said measures are nevertheless not in
force because they have not been published as required by law and the
ruling of this Court in Tanada v. Tuvera. 10 As for LOI 474, the same is
ineffective for the additional reason that a mere letter of instruction could
not have repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest
of the three departments of the government, the judiciary is nonetheless
vested with the power to annul the acts of either the legislative or the
executive or of both when not conformable to the fundamental law. This is
the reason for what some quarters call the doctrine of judicial supremacy.
Even so, this power is not lightly assumed or readily exercised. The
doctrine of separation of powers imposes upon the courts a proper
restraint, born of the nature of their functions and of their respect for the
other departments, in striking down the acts of the legislative and the
executive as unconstitutional. The policy, indeed, is a blend of courtesy
and caution. To doubt is to sustain. The theory is that before the act was

done or the law was enacted, earnest studies were made by Congress or
the President, or both, to insure that the Constitution would not be
breached.
In addition, the Constitution itself lays down stringent conditions for a
declaration of unconstitutionality, requiring therefor the concurrence of a
majority of the members of the Supreme Court who took part in the
deliberations and voted on the issue during their session en banc. 11 And as
established by judge made doctrine, the 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. 12
With particular regard to the requirement of proper party as applied in the
cases before us, we hold that the same is satisfied by the petitioners and
intervenors because each of them has sustained or is in danger of
sustaining an immediate injury as a result of the acts or measures
complained of. 13 And even if, strictly speaking, they are not covered by the
definition, it is still within the wide discretion of the Court to waive the
requirement and so remove the impediment to its addressing and resolving
the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers
were allowed to question the constitutionality of several executive orders
issued by President Quirino although they were invoking only an indirect
and general interest shared in common with the public. The Court
dismissed the objection that they were not proper parties and ruled that
"the transcendental importance to the public of these cases demands that
they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure." We have since then applied this exception in
many other cases. 15
The other above-mentioned requisites have also been met in the present
petitions.
In must be stressed that despite the inhibitions pressing upon the Court
when confronted with constitutional issues like the ones now before it, 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 as God and its conscience give it the light to probe its
meaning and discover its purpose. Personal motives and political
considerations are irrelevancies that cannot influence its decision.
Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court
will not hesitate to "make the hammer fall, and heavily," to use Justice
Laurel's pithy language, where the acts of these departments, or of any
public official, betray the people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional boundaries, it
does not assert any superiority over the other departments; it does not in
reality nullify or invalidate an act of the Legislature, but only asserts the
solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to

establish for the parties in an actual controversy the rights which that
instrument secures and guarantees to them. This is in truth all that is
involved in what is termed "judicial supremacy" which properly is the
power of judicial review under the Constitution. 16
The cases before us categorically raise constitutional questions that this
Court must categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before
resolving the more serious challenges to the constitutionality of the several
measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his
powers under martial law has already been sustained in Gonzales v.
Estrella and we find no reason to modify or reverse it on that issue. As for
the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos.
228 and 229, the same was authorized under Section 6 of the Transitory
Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987,
when the Congress of the Philippines was formally convened and took over
legislative power from her. They are not "midnight" enactments intended
to pre-empt the legislature because E.O. No. 228 was issued on July 17,
1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were
both issued on July 22, 1987. Neither is it correct to say that these
measures ceased to be valid when she lost her legislative power for, like
any statute, they continue to be in force unless modified or repealed by
subsequent law or declared invalid by the courts. A statute does not ipso
facto become inoperative simply because of the dissolution of the
legislature that enacted it. By the same token, President Aquino's loss of
legislative power did not have the effect of invalidating all the measures
enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected
but in fact substantially affirmed the challenged measures and has
specifically provided that they shall be suppletory to R.A. No. 6657
whenever not inconsistent with its provisions. 17 Indeed, some portions of
the said measures, like the creation of the P50 billion fund in Section 2 of
Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been
incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it
does not conform to the requirements of a valid appropriation as specified
in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation
measure even if it does provide for the creation of said fund, for that is not
its principal purpose. An appropriation law is one the primary and specific
purpose of which is to authorize the release of public funds from the
treasury. 19 The creation of the fund is only incidental to the main objective
of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit,
Section 24 and Section 25(4) of Article VI, are not applicable. With
particular reference to Section 24, this obviously could not have been
complied with for the simple reason that the House of Representatives,
which now has the exclusive power to initiate appropriation measures, had
not yet been convened when the proclamation was issued. The legislative
power was then solely vested in the President of the Philippines, who

embodied, as it were, both houses of Congress.

The argument of some of the petitioners that Proc. No. 131 and E.O. No.
229 should be invalidated because they do not provide for retention limits
as required by Article XIII, Section 4 of the Constitution is no longer
tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the
law, which in fact is one of its most controversial provisions. This section
declares:
Retention Limits. Except as otherwise provided in this Act, no person
may own or retain, directly or indirectly, any public or private agricultural
land, the size of which shall vary according to factors governing a viable
family-sized farm, such as commodity produced, terrain, infrastructure, and
soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner
exceed five (5) hectares. Three (3) hectares may be awarded to each child
of the landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the land or
directly managing the farm; Provided, That landowners whose lands have
been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement
that a bill shall have only one subject, to be expressed in its title, deserves
only short attention. It is settled that the title of the bill does not have to be
a catalogue of its contents and will suffice if the matters embodied in the
text are relevant to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every
presidential issuance, by whatever name it was called, had the force and
effect of law because it came from President Marcos. Such are the ways of
despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744,
that LOI 474 could not have repealed P.D. No. 27 because the former was
only a letter of instruction. The important thing is that it was issued by
President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos
still had to comply with the requirement for publication as this Court held in
Tanada v. Tuvera. 21 Hence, unless published in the Official Gazette in
accordance with Article 2 of the Civil Code, they could not have any force
and effect if they were among those enactments successfully challenged in
that case. LOI 474 was published, though, in the Official Gazette dated
November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742
that the writ of mandamus cannot issue to compel the performance of a
discretionary act, especially by a specific department of the government.
That is true as a general proposition but is subject to one important
qualification. Correctly and categorically stated, the rule is that mandamus
will lie to compel the discharge of the discretionary duty itself but not to
control the discretion to be exercised. In other words, mandamus can issue
to require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty

imposed by law, the courts will intervene by the extraordinary legal

remedy of mandamus to compel action. If the duty is purely ministerial, the
courts will require specific action. If the duty is purely discretionary, the
courts by mandamus will require action only. For example, if an inferior
court, public official, or board should, for an unreasonable length of time,
fail to decide a particular question to the great detriment of all parties
concerned, or a court should refuse to take jurisdiction of a cause when the
law clearly gave it jurisdiction mandamus will issue, in the first case to
require a decision, and in the second to require that jurisdiction be taken of
the cause. 22
And while it is true that as a rule the writ will not be proper as long as there
is still a plain, speedy and adequate remedy available from the
administrative authorities, resort to the courts may still be permitted if the
issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power
of eminent domain that logically preclude the application of both powers at
the same time on the same subject. In the case of City of Baguio v.
NAWASA, 24 for example, where a law required the transfer of all municipal
waterworks systems to the NAWASA in exchange for its assets of
equivalent value, the Court held that the power being exercised was
eminent domain because the property involved was wholesome and
intended for a public use. Property condemned under the police power is
noxious or intended for a noxious purpose, such as a building on the verge
of collapse, which should be demolished for the public safety, or obscene
materials, which should be destroyed in the interest of public morals. The
confiscation of such property is not compensable, unlike the taking of
property under the power of expropriation, which requires the payment of
just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down
the limits of the police power in a famous aphorism: "The general rule at
least is that while property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking." The regulation
that went "too far" was a law prohibiting mining which might cause the
subsidence of structures for human habitation constructed on the land
surface. This was resisted by a coal company which had earlier granted a
deed to the land over its mine but reserved all mining rights thereunder,
with the grantee assuming all risks and waiving any damage claim. The
Court held the law could not be sustained without compensating the
grantor. Justice Brandeis filed a lone dissent in which he argued that there
was a valid exercise of the police power. He said:
Every restriction upon the use of property imposed in the exercise of the
police power deprives the owner of some right theretofore enjoyed, and is,
in that sense, an abridgment by the State of rights in property without
making compensation. But restriction imposed to protect the public health,
safety or morals from dangers threatened is not a taking. The restriction
here in question is merely the prohibition of a noxious use. The property so
restricted remains in the possession of its owner. The state does not
appropriate it or make any use of it. The state merely prevents the owner
from making a use which interferes with paramount rights of the public.
Whenever the use prohibited ceases to be noxious as it may because of

further changes in local or social conditions the restriction will have to

be removed and the owner will again be free to enjoy his property as
heretofore.
Recent trends, however, would indicate not a polarization but a mingling of
the police power and the power of eminent domain, with the latter being
used as an implement of the former like the power of taxation. The
employment of the taxing power to achieve a police purpose has long been
accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the
University of Illinois College of Law (referring to the earlier case of Euclid v.
Ambler Realty Co., 272 US 365, which sustained a zoning law under the
police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the Police
and eminent domain powers on different planets. Generally speaking, they
viewed eminent domain as encompassing public acquisition of private
property for improvements that would be available for public use," literally
construed. To the police power, on the other hand, they assigned the less
intrusive task of preventing harmful externalities a point reflected in the
Euclid opinion's reliance on an analogy to nuisance law to bolster its
support of zoning. So long as suppression of a privately authored harm
bore a plausible relation to some legitimate "public purpose," the pertinent
measure need have afforded no compensation whatever. With the
progressive growth of government's involvement in land use, the distance
between the two powers has contracted considerably. Today government
often employs eminent domain interchangeably with or as a useful
complement to the police power-- a trend expressly approved in the
Supreme Court's 1954 decision in Berman v. Parker, which broadened the
reach of eminent domain's "public use" test to match that of the police
power's standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement
of blighted areas in the District of Columbia as a proper exercise of the
police power. On the role of eminent domain in the attainment of this
purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's
Capital should be beautiful as well as sanitary, there is nothing in the Fifth
Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it
through the exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3
vote in 1978, the U.S Supreme Court sustained the respondent's
Landmarks Preservation Law under which the owners of the Grand Central
Terminal had not been allowed to construct a multi-story office building
over the Terminal, which had been designated a historic landmark.
Preservation of the landmark was held to be a valid objective of the police
power. The problem, however, was that the owners of the Terminal would
be deprived of the right to use the airspace above it although other
landowners in the area could do so over their respective properties. While
insisting that there was here no taking, the Court nonetheless recognized
certain compensatory rights accruing to Grand Central Terminal which it
said would "undoubtedly mitigate" the loss caused by the regulation. This
"fair compensation," as he called it, was explained by Prof. Costonis in this

wise:
In return for retaining the Terminal site in its pristine landmark status, Penn
Central was authorized to transfer to neighboring properties the authorized
but unused rights accruing to the site prior to the Terminal's designation as
a landmark the rights which would have been exhausted by the 59-story
building that the city refused to countenance atop the Terminal. Prevailing
bulk restrictions on neighboring sites were proportionately relaxed,
theoretically enabling Penn Central to recoup its losses at the Terminal site
by constructing or selling to others the right to construct larger, hence
more profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question
of compensable taking is concerned. To the extent that the measures under
challenge merely prescribe retention limits for landowners, there is an
exercise of the police power for the regulation of private property in
accordance with the Constitution. But where, to carry out such regulation,
it becomes necessary to deprive such owners of whatever lands they may
own in excess of the maximum area allowed, there is definitely a taking
under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the
title to and the physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer-beneficiary. This is
definitely an exercise not of the police power but of the power of eminent
domain.
Whether as an exercise of the police power or of the power of eminent
domain, the several measures before us are challenged as violative of the
due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground
that no retention limits are prescribed has already been discussed and
dismissed. It is noted that although they excited many bitter exchanges
during the deliberation of the CARP Law in Congress, the retention limits
finally agreed upon are, curiously enough, not being questioned in these
petitions. We therefore do not discuss them here. The Court will come to
the other claimed violations of due process in connection with our
examination of the adequacy of just compensation as required under the
power of expropriation.
The argument of the small farmers that they have been denied equal
protection because of the absence of retention limits has also become
academic under Section 6 of R.A. No. 6657. Significantly, they too have not
questioned the area of such limits. There is also the complaint that they
should not be made to share the burden of agrarian reform, an objection
also made by the sugar planters on the ground that they belong to a
particular class with particular interests of their own. However, no evidence
has been submitted to the Court that the requisites of a valid classification
have been violated.
Classification has been defined as the grouping of persons or things similar
to each other in certain particulars and different from each other in these
same particulars. 31 To be valid, it must conform to the following
requirements: (1) it must be based on substantial distinctions; (2) it must
be germane to the purposes of the law; (3) it must not be limited to
existing conditions only; and (4) it must apply equally to all the members

of the class. 32 The Court finds that all these requisites have been met by
the measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated
must be treated alike both as to the rights conferred and the liabilities
imposed. 33 The petitioners have not shown that they belong to a different
class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected. There is a
substantial distinction between these two classes of owners that is clearly
visible except to those who will not see. There is no need to elaborate on
this matter. In any event, the Congress is allowed a wide leeway in
providing for a valid classification. Its decision is accorded recognition and
respect by the courts of justice except only where its discretion is abused
to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under
the police power only if there is a concurrence of the lawful subject and the
lawful method. Put otherwise, the interests of the public generally as
distinguished from those of a particular class require the interference of
the State and, no less important, the means employed are reasonably
necessary for the attainment of the purpose sought to be achieved and not
unduly oppressive upon individuals. 34 As the subject and purpose of
agrarian reform have been laid down by the Constitution itself, we may say
that the first requirement has been satisfied. What remains to be examined
is the validity of the method employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the
rights of the individual are concerned, the end does not justify the means.
It is not enough that there be a valid objective; it is also necessary that the
means employed to pursue it be in keeping with the Constitution. Mere
expediency will not excuse constitutional shortcuts. There is no question
that not even the strongest moral conviction or the most urgent public
need, subject only to a few notable exceptions, will excuse the bypassing
of an individual's rights. It is no exaggeration to say that a, person invoking
a right guaranteed under Article III of the Constitution is a majority of one
even as against the rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under
Section 1 of Article III of the Constitution. With regard to his property, the
owner enjoys the added protection of Section 9, which reaffirms the
familiar rule that private property shall not be taken for public use without
just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly
acquire private lands intended for public use upon payment of just
compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the
purchaser, in which case an ordinary deed of sale may be agreed upon by
the parties. 35 It is only where the owner is unwilling to sell, or cannot
accept the price or other conditions offered by the vendee, that the power
of eminent domain will come into play to assert the paramount authority of
the State over the interests of the property owner. Private rights must then
yield to the irresistible demands of the public interest on the time-honored

justification, as in the case of the police power, that the welfare of the
people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no
means absolute (as indeed no power is absolute). The limitation is found in
the constitutional injunction that "private property shall not be taken for
public use without just compensation" and in the abundant jurisprudence
that has evolved from the interpretation of this principle. Basically, the
requirements for a proper exercise of the power are: (1) public use and (2)
just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No.
79310 that the State should first distribute public agricultural lands in the
pursuit of agrarian reform instead of immediately disturbing property rights
by forcibly acquiring private agricultural lands. Parenthetically, it is not
correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural
lands." In any event, the decision to redistribute private agricultural lands
in the manner prescribed by the CARP was made by the legislative and
executive departments in the exercise of their discretion. We are not
justified in reviewing that discretion in the absence of a clear showing that
it has been abused.
A becoming courtesy admonishes us to respect the decisions of the
political departments when they decide what is known as the political
question. As explained by Chief Justice Concepcion in the case of Taada v.
Cuenco: 36
The term "political question" connotes what it means in ordinary parlance,
namely, a question of policy. It refers to "those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity; or
in regard to which full discretionary authority has been delegated to the
legislative or executive branch of the government." It is concerned with
issues dependent upon the wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted
with the enlargement of judicial power, which now includes the authority of
the courts "to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." 37 Even so, this should not
be construed as a license for us to reverse the other departments simply
because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to
include in the CARP the redistribution of private landholdings (even as the
distribution of public agricultural lands is first provided for, while also
continuing apace under the Public Land Act and other cognate laws). The
Court sees no justification to interpose its authority, which we may assert
only if we believe that the political decision is not unwise, but illegal. We do
not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the
entire St. Mary's river between the American bank and the international
line, as well as all of the upland north of the present ship canal, throughout
its entire length, was "necessary for the purpose of navigation of said
waters, and the waters connected therewith," that determination is
conclusive in condemnation proceedings instituted by the United States

under that Act, and there is no room for judicial review of the judgment of
Congress ... .
As earlier observed, the requirement for public use has already been
settled for us by the Constitution itself No less than the 1987 Charter calls
for agrarian reform, which is the reason why private agricultural lands are
to be taken from their owners, subject to the prescribed maximum
retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and
R.A. No. 6657 are only an elaboration of the constitutional injunction that
the State adopt the necessary measures "to encourage and undertake the
just distribution of all agricultural lands to enable farmers who are landless
to own directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a
longer and more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property
taken from its owner by the expropriator. 39 It has been repeatedly stressed
by this Court that the measure is not the taker's gain but the owner's loss.
40
The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for
the property to be taken shall be real, substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions
contemplate more than a mere regulation of the use of private lands under
the police power. We deal here with an actual taking of private agricultural
lands that has dispossessed the owners of their property and deprived
them of all its beneficial use and enjoyment, to entitle them to the just
compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable
taking when the following conditions concur: (1) the expropriator must
enter a private property; (2) the entry must be for more than a momentary
period; (3) the entry must be under warrant or color of legal authority; (4)
the property must be devoted to public use or otherwise informally
appropriated or injuriously affected; and (5) the utilization of the property
for public use must be in such a way as to oust the owner and deprive him
of beneficial enjoyment of the property. All these requisites are envisioned
in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to make
a deposit upon its taking possession of the condemned property, as "the
compensation is a public charge, the good faith of the public is pledged for
its payment, and all the resources of taxation may be employed in raising
the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of
rejection or no response from the landowner, upon the deposit with an
accessible bank designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to
issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the redistribution of the
land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just
compensation, which it is claimed is entrusted to the administrative
authorities in violation of judicial prerogatives. Specific reference is made

to Section 16(d), which provides that in case of the rejection or disregard

by the owner of the offer of the government to buy his land... the DAR shall conduct summary administrative proceedings to
determine the compensation for the land by requiring the landowner, the
LBP and other interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days from the receipt of the
notice. After the expiration of the above period, the matter is deemed
submitted for decision. The DAR shall decide the case within thirty (30)
days after it is submitted for decision.
To be sure, the determination of just compensation is a function addressed
to the courts of justice and may not be usurped by any other branch or
official of the government. EPZA v. Dulay 44 resolved a challenge to several
decrees promulgated by President Marcos providing that the just
compensation for property under expropriation should be either the
assessment of the property by the government or the sworn valuation
thereof by the owner, whichever was lower. In declaring these decrees
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited
decrees constitutes impermissible encroachment on judicial prerogatives. It
tends to render this Court inutile in a matter which under this Constitution
is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would
still have the power to determine the just compensation for the property,
following the applicable decrees, its task would be relegated to simply
stating the lower value of the property as declared either by the owner or
the assessor. As a necessary consequence, it would be useless for the
court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of
private property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the strict
application of the decrees during the proceedings would be nothing short
of a mere formality or charade as the court has only to choose between the
valuation of the owner and that of the assessor, and its choice is always
limited to the lower of the two. The court cannot exercise its discretion or
independence in determining what is just or fair. Even a grade school pupil
could substitute for the judge insofar as the determination of constitutional
just compensation is concerned.
xxx
In the present petition, we are once again confronted with the same
question of whether the courts under P.D. No. 1533, which contains the
same provision on just compensation as its predecessor decrees, still have
the power and authority to determine just compensation, independent of
what is stated by the decree and to this effect, to appoint commissioners
for such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to prove
that the valuation in the tax documents is unfair or wrong. And it is
repulsive to the basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to absolutely prevail over
the judgment of a court promulgated only after expert commissioners have

actually viewed the property, after evidence and arguments pro and con
have been presented, and after all factors and considerations essential to a
fair and just determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not
suffer from the arbitrariness that rendered the challenged decrees
constitutionally objectionable. Although the proceedings are described as
summary, the landowner and other interested parties are nevertheless
allowed an opportunity to submit evidence on the real value of the
property. But more importantly, the determination of the just compensation
by the DAR is not by any means final and conclusive upon the landowner
or any other interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to the
court of proper jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by
all parties concerned. Otherwise, the courts of justice will still have the
right to review with finality the said determination in the exercise of what is
admittedly a judicial function.
The second and more serious objection to the provisions on just
compensation is not as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall
compensate the landowner in such amount as may be agreed upon by the
landowner and the DAR and the LBP, in accordance with the criteria
provided for in Sections 16 and 17, and other pertinent provisions hereof,
or as may be finally determined by the court, as the just compensation for
the land.
The compensation shall be paid in one of the following modes, at the
option of the landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is
concerned Twenty-five percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares
Thirty percent (30%) cash, the balance to be paid in government
financial instruments negotiable at any time.
(c) For lands twenty-four (24) hectares and below Thirty-five percent
(35%) cash, the balance to be paid in government financial instruments
negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP
preferred shares, physical assets or other qualified investments in
accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent
(10%) of the face value of the bonds shall mature every year from the date
of issuance until the tenth (10th) year: Provided, That should the
landowner choose to forego the cash portion, whether in full or in part, he
shall be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the
landowner, his successors-in- interest or his assigns, up to the amount of
their face value, for any of the following:

(i) Acquisition of land or other real properties of the government, including

assets under the Asset Privatization Program and other assets foreclosed
by government financial institutions in the same province or region where
the lands for which the bonds were paid are situated;
(ii) Acquisition of shares of stock of government-owned or controlled
corporations or shares of stock owned by the government in private
corporations;
(iii) Substitution for surety or bail bonds for the provisional release of
accused persons, or for performance bonds;
(iv) Security for loans with any government financial institution, provided
the proceeds of the loans shall be invested in an economic enterprise,
preferably in a small and medium- scale industry, in the same province or
region as the land for which the bonds are paid;
(v) Payment for various taxes and fees to government: Provided, That the
use of these bonds for these purposes will be limited to a certain
percentage of the outstanding balance of the financial instruments;
Provided, further, That the PARC shall determine the percentages
mentioned above;
(vi) Payment for tuition fees of the immediate family of the original
bondholder in government universities, colleges, trade schools, and other
institutions;
(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above
provision is unconstitutional insofar as it requires the owners of the
expropriated properties to accept just compensation therefor in less than
money, which is the only medium of payment allowed. In support of this
contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the
property expropriated is entitled to a just compensation, which should be
neither more nor less, whenever it is possible to make the assessment,
than the money equivalent of said property. Just compensation has always
been understood to be the just and complete equivalent of the loss which
the owner of the thing expropriated has to suffer by reason of the
expropriation . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the value
of the property at the time of its taking. Anything beyond that is more, and
anything short of that is less, than just compensation. It means a fair and
full equivalent for the loss sustained, which is the measure of the
indemnity, not whatever gain would accrue to the expropriating entity. The
market value of the land taken is the just compensation to which the owner
of condemned property is entitled, the market value being that sum of
money which a person desirous, but not compelled to buy, and an owner,
willing, but not compelled to sell, would agree on as a price to be given and
received for such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has
been derived, the weight of authority is also to the effect that just
compensation for property expropriated is payable only in money and not
otherwise. Thus

The medium of payment of compensation is ready money or cash. The

condemnor cannot compel the owner to accept anything but money, nor
can the owner compel or require the condemnor to pay him on any other
basis than the value of the property in money at the time and in the
manner prescribed by the Constitution and the statutes. When the power
of eminent domain is resorted to, there must be a standard medium of
payment, binding upon both parties, and the law has fixed that standard as
money in cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of
things, be regarded as a reliable and constant standard of compensation. 48
"Just compensation" for property taken by condemnation means a fair
equivalent in money, which must be paid at least within a reasonable time
after the taking, and it is not within the power of the Legislature to
substitute for such payment future obligations, bonds, or other valuable
advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the
payment of just compensation is money and no other. And so, conformably,
has just compensation been paid in the past solely in that medium.
However, we do not deal here with the traditional excercise of the power of
eminent domain. This is not an ordinary expropriation where only a specific
property of relatively limited area is sought to be taken by the State from
its owner for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever
found and of whatever kind as long as they are in excess of the maximum
retention limits allowed their owners. This kind of expropriation is intended
for the benefit not only of a particular community or of a small segment of
the population but of the entire Filipino nation, from all levels of our
society, from the impoverished farmer to the land-glutted owner. Its
purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and
edify with the vision and the sacrifice of the present generation of Filipinos.
Generations yet to come are as involved in this program as we are today,
although hopefully only as beneficiaries of a richer and more fulfilling life
we will guarantee to them tomorrow through our thoughtfulness today.
And, finally, let it not be forgotten that it is no less than the Constitution
itself that has ordained this revolution in the farms, calling for "a just
distribution" among the farmers of lands that have heretofore been the
prison of their dreams but can now become the key at least to their
deliverance.
Such a program will involve not mere millions of pesos. The cost will be
tremendous. Considering the vast areas of land subject to expropriation
under the laws before us, we estimate that hundreds of billions of pesos
will be needed, far more indeed than the amount of P50 billion initially
appropriated, which is already staggering as it is by our present standards.
Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this
difficulty when they called for agrarian reform as a top priority project of
the government. It is a part of this assumption that when they envisioned
the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less

conventional if more practical method. There can be no doubt that they

were aware of the financial limitations of the government and had no
illusions that there would be enough money to pay in cash and in full for
the lands they wanted to be distributed among the farmers. We may
therefore assume that their intention was to allow such manner of payment
as is now provided for by the CARP Law, particularly the payment of the
balance (if the owner cannot be paid fully with money), or indeed of the
entire amount of the just compensation, with other things of value. We may
also suppose that what they had in mind was a similar scheme of payment
as that prescribed in P.D. No. 27, which was the law in force at the time
they deliberated on the new Charter and with which they presumably
agreed in principle.
The Court has not found in the records of the Constitutional Commission
any categorical agreement among the members regarding the meaning to
be given the concept of just compensation as applied to the
comprehensive agrarian reform program being contemplated. There was
the suggestion to "fine tune" the requirement to suit the demands of the
project even as it was also felt that they should "leave it to Congress" to
determine how payment should be made to the landowner and
reimbursement required from the farmer-beneficiaries. Such innovations as
"progressive compensation" and "State-subsidized compensation" were
also proposed. In the end, however, no special definition of the just
compensation for the lands to be expropriated was reached by the
Commission. 50
On the other hand, there is nothing in the records either that militates
against the assumptions we are making of the general sentiments and
intention of the members on the content and manner of the payment to be
made to the landowner in the light of the magnitude of the expenditure
and the limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and
manner of the just compensation provided for in the afore- quoted Section
18 of the CARP Law is not violative of the Constitution. We do not mind
admitting that a certain degree of pragmatism has influenced our decision
on this issue, but after all this Court is not a cloistered institution removed
from the realities and demands of society or oblivious to the need for its
enhancement. The Court is as acutely anxious as the rest of our people to
see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the
nullification of the entire program, killing the farmer's hopes even as they
approach realization and resurrecting the spectre of discontent and dissent
in the restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always
required to be made fully in money, we find further that the proportion of
cash payment to the other things of value constituting the total payment,
as determined on the basis of the areas of the lands expropriated, is not
unduly oppressive upon the landowner. It is noted that the smaller the
land, the bigger the payment in money, primarily because the small
landowner will be needing it more than the big landowners, who can afford
a bigger balance in bonds and other things of value. No less importantly,

the government financial instruments making up the balance of the

payment are "negotiable at any time." The other modes, which are likewise
available to the landowner at his option, are also not unreasonable
because payment is made in shares of stock, LBP bonds, other properties
or assets, tax credits, and other things of value equivalent to the amount
of just compensation.
Admittedly, the compensation contemplated in the law will cause the
landowners, big and small, not a little inconvenience. As already remarked,
this cannot be avoided. Nevertheless, it is devoutly hoped that these
countrymen of ours, conscious as we know they are of the need for their
forebearance and even sacrifice, will not begrudge us their indispensable
share in the attainment of the ideal of agrarian reform. Otherwise, our
pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O.
No. 229 does not seem to be viable any more as it appears that Section 4
of the said Order has been superseded by Section 14 of the CARP Law. This
repeats the requisites of registration as embodied in the earlier measure
but does not provide, as the latter did, that in case of failure or refusal to
register the land, the valuation thereof shall be that given by the provincial
or city assessor for tax purposes. On the contrary, the CARP Law says that
the just compensation shall be ascertained on the basis of the factors
mentioned in its Section 17 and in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his
property even before actual payment to him in full of just compensation, in
contravention of a well- accepted principle of eminent domain.
The recognized rule, indeed, is that title to the property expropriated shall
pass from the owner to the expropriator only upon full payment of the just
compensation. Jurisprudence on this settled principle is consistent both
here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does
not vest the condemnor until the judgment fixing just compensation is
entered and paid, but the condemnor's title relates back to the date on
which the petition under the Eminent Domain Act, or the commissioner's
report under the Local Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is
complete at the time of entry, title to the property taken remains in the
owner until payment is actually made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases
holding that title to property does not pass to the condemnor until just
compensation had actually been made. In fact, the decisions appear to be
uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was
held that "actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the
State" albeit "not to the appropriation of it to public use." In Rexford v.
Knight, 55 the Court of Appeals of New York said that the construction upon
the statutes was that the fee did not vest in the State until the payment of
the compensation although the authority to enter upon and appropriate
the land was complete prior to the payment. Kennedy further said that
"both on principle and authority the rule is ... that the right to enter on and
use the property is complete, as soon as the property is actually
appropriated under the authority of law for a public use, but that the title

does not pass from the owner without his consent, until just compensation
has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford absolute reassurance that
no piece of land can be finally and irrevocably taken from an unwilling
owner until compensation is paid ... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenantfarmer as October 21, 1972 and declared that he shall "be deemed the
owner" of a portion of land consisting of a family-sized farm except that "no
title to the land owned by him was to be actually issued to him unless and
until he had become a full-fledged member of a duly recognized farmers'
cooperative." It was understood, however, that full payment of the just
compensation also had to be made first, conformably to the constitutional
requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October
21, 1972 of the land they acquired by virtue of Presidential Decree No. 27.
(Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said
decree, after proof of full-fledged membership in the farmers' cooperatives
and full payment of just compensation. Hence, it was also perfectly proper
for the Order to also provide in its Section 2 that the "lease rentals paid to
the landowner by the farmer- beneficiary after October 21, 1972 (pending
transfer of ownership after full payment of just compensation), shall be
considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and
ownership of the land to the government on receipt by the landowner of
the corresponding payment or the deposit by the DAR of the compensation
in cash or LBP bonds with an accessible bank. Until then, title also remains
with the landowner. 57 No outright change of ownership is contemplated
either.
Hence, the argument that the assailed measures violate due process by
arbitrarily transferring title before the land is fully paid for must also be
rejected.
It is worth stressing at this point that all rights acquired by the tenantfarmer under P.D. No. 27, as recognized under E.O. No. 228, are retained by
him even now under R.A. No. 6657. This should counter-balance the
express provision in Section 6 of the said law that "the landowners whose
lands have been covered by Presidential Decree No. 27 shall be allowed to
keep the area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No.
78742 that the appeal filed by the petitioners with the Office of the
President has already been resolved. Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude
immediate resort to judicial action, there are factual issues that have yet to

be examined on the administrative level, especially the claim that the

petitioners are not covered by LOI 474 because they do not own other
agricultural lands than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming
that the petitioners have not yet exercised their retention rights, if any,
under P.D. No. 27, the Court holds that they are entitled to the new
retention rights provided for by R.A. No. 6657, which in fact are on the
whole more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have
been the subject of bitter attack from those who point to the shortcomings
of these measures and ask that they be scrapped entirely. To be sure, these
enactments are less than perfect; indeed, they should be continuously reexamined and rehoned, that they may be sharper instruments for the
better protection of the farmer's rights. But we have to start somewhere. In
the pursuit of agrarian reform, we do not tread on familiar ground but
grope on terrain fraught with pitfalls and expected difficulties. This is
inevitable. The CARP Law is not a tried and tested project. On the contrary,
to use Justice Holmes's words, "it is an experiment, as all life is an
experiment," and so we learn as we venture forward, and, if necessary, by
our own mistakes. We cannot expect perfection although we should strive
for it by all means. Meantime, we struggle as best we can in freeing the
farmer from the iron shackles that have unconscionably, and for so long,
fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the
comprehensive agrarian reform program are removed, to clear the way for
the true freedom of the farmer. We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of
the past and from his own feelings of inadequacy and helplessness. At last
his servitude will be ended forever. At last the farm on which he toils will be
his farm. It will be his portion of the Mother Earth that will give him not only
the staff of life but also the joy of living. And where once it bred for him
only deep despair, now can he see in it the fruition of his hopes for a more
fulfilling future. Now at last can he banish from his small plot of earth his
insecurities and dark resentments and "rebuild in it the music and the
dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are
SUSTAINED against all the constitutional objections raised in the herein
petitions.
2. Title to all expropriated properties shall be transferred to the State only
upon full payment of compensation to their respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No. 27
are retained and recognized.
4. Landowners who were unable to exercise their rights of retention under
P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under
the conditions therein prescribed.
5. Subject to the above-mentioned rulings all the petitions are DISMISSED,
without pronouncement as to costs.
SO ORDERED.

FIRST DIVISION
G.R. No. L-62626 July 18, 1984
SPOUSES CAYETANO and PATRICIA TIONGSON, SPOUSES EDWARD
and PACITA GO, SPOUSES ROBERTO and MYRNA LAPERAL III, ELISA
R. MANOTOK, SPOUSES IGNACIO and PACITA MANOTOK, SEVERINO
MANOTOK, JR., SPOUSES FAUSTO and MILAGROS MANOTOK, ROSA
R. MANOTOK, Minors MIGUEL A. B. SISON and MA. CRISTINA E.
SISON, represented by their judicial guardian FILOMENA M. SISON,
SPOUSES MAMERTO and PERPETUA M. BOCANEGRA, GEORGE M.
BOCANEGRA, represented by his judicial guardian MAMERTO
BOCANEGRA, SPOUSES FRANCISCO and FILOMENA SISON, JOSE
CLEMENTE MANOTOK, SPOUSES JESUS and THELMA MANOTOK,
Minors PHILIP MANOTOK, MARIA TERESA MANOTOK and RAMON
SEVERINO MANOTOK, represented by their judicial guardian
SEVERINO MANOTOK, JR., Minors JESUS JUDE MANOTOK, JR. and
JOSE MARIA MANOTOK, represented by their judicial guardian
JESUS MANOTOK, petitioners,
vs.
HONORABLE COURT OF APPEALS and TEODORO S. MACAYA,
respondents.
Romeo J. Callejo and Gil Venerando R. Racho for petitioners.
David Advincula Jr. and Jose J. Francisco for respondents.
GUTIERREZ, JR., J.:
In this petition for review on certiorari of the decision of the Court of,
Appeal declaring the existence of a landholder-tenant relationship and
ordering the private respondent's reinstatement, the petitioners contend
that the appellate court committed an error of law in:
1. Disregarding the findings of fact of the Court of Agrarian Relations which
are supported by substantial evidence; and
2. Substituting the findings of fact of the Court of Agrarian Relations with
its own findings.
Briefly, the facts of the case as found by the Court of Agrarian Relations,
Seventh Regional District, Branch 1 at Pasig, Metro Manila are as follows:
Sometime in 1946, the late Severino Manotok donated and transferred to
his eight (8) children and two (2) grandchildren namely: Purificacion
Manotok, Eliza Manotok, Perpetua manotok, Filomena Manotok, Severino
Manotok, Jr., Jesus Manotok, Rahula Ignacio Manotok, Severino Manotok III,
Fausto Manotok and Rosa Manotok, a thirty-four-hectare lot located in
Payong, Old Balara, Quezon City covered by a certificate of title. Severino
Manotok who was appointed judicial guardian of his minor children
'accepted on their behalf the aforesaid donation. At that time, there were
no tenants or other persons occupying the said property.
In that same year, Teodoro Macaya accompanied by Vicente Herrera, the
overseer of the property, went to the house of Manotok in Manila and
pleaded that he be allowed to live on the Balara property so that he could
at the same time guard the property and prevent the entry of squatters
and the theft of the fruits and produce of the fruit trees planted by the
owner. Manotok allowed Macaya to stay in the property as a guard (bantay)
but imposed the conditions that at any time that the owners of the

property needed or wanted to take over the property, Macaya and his
family should vacate the property immediately; that while he could raise
animals and plant on the property, he could do so only for his personal
needs; that he alone could plant and raise animals on the property; and
that the owners would have no responsibility or liability for said activities of
Macaya. Macaya was allowed to use only three (3) hectares. These
conditions, however, were not put in writing.
On December 5, 1950, the property-owners organized themselves into a
corporation engaged primarily in the real estate business known as the
Manotok Realty, Inc. The owners transferred the 34-hectare lot to the
corporation as part of their capital contribution or subscription to the
capital stock of the corporation.
From 1946 to 1956, Macaya did not pay, as he was not required to pay
anything to the owners or corporation whether in cash or in kind for his
occupancy or use of the property. However, the corporation noted that the
realty taxes on the property had increased considerably and found it very
burdensome to pay the said taxes while on the other hand, Macaya had
contributed nothing nor even helped in the payment of the taxes. Thus,
Macaya upon the request of the owners agreed to help by remitting ten
(10) cavans of palay every year as his contribution for the payment of the
realty taxes beginning 1957.
On June 5, 1964, the corporation requested Macaya to increase his
contribution from ten (10) cavans to twenty (20) cavans of palay effective
1963 because the assessed value of the property had increased
considerably. Macaya] agreed.
In 1967, Macaya informed the corporation that he could not afford anymore
to deliver any palay because the palay dried up. He further requested that
in the ensuring years, he be allowed to contribute only ten (10) cavans of
palay. The corporation said that if that was the case, he might as well not
deliver anymore. Thus, from 1967 up to 1976, Macaya did not deliver any
palay.
On January 31, 1974, Manotok Realty, Inc. executed a "Unilateral Deed of
Conveyance" of the property in favor of Patricia Tiongson, Pacita Go,
Roberto Laperal III, Elisa Manotok, Rosa Manotok, Perpetua M. Bocanegra,
Filomena M. Sison, Severino Manotok, Jr., Jesus Manotok, Ignacio S.
Manotok, Severino Manotok III and Fausto Manotok.
Sometime in 1974, Macaya was informed by the Manotoks that they
needed the property to construct their houses thereon. Macaya agreed but
pleaded that he be allowed to harvest first the planted rice before vacating
the property.
However, he did not vacate the property as verbally promised and instead
expanded the area he was working on.
In 1976, the Manotoks once more told Macaya to vacate the entire
property including those portions tilled by him. At this point, Macaya had
increased his area from three (3) hectares to six (6) hectares without the
knowledge and consent of the owners. As he was being compelled to
vacate the property, Macaya brought the matter to the Department (now
Ministry) of Agrarian Reforms. The Manotoks, during the conference before
the officials of the Department insisted that Macaya and his family vacate
the property. They threatened to bulldoze Macaya's landholding including
his house, thus prompting Macaya to file an action for peaceful possession,

injunction, and damages with preliminary injunction before the Court of

Agrarian Relations.
The sole issue to be resolved in the present petition is whether or not a
tenancy relationship exists between the parties. The Court of Agrarian
Relations found that Macaya is not and has never been a share or
leasehold tenant of Severino Manotok nor of his successors-in-interest over
the property or any portion or portions thereof but has only been hired as a
watchman or guard (bantay) over the same. On Macaya's appeal from the
said decision, the respondent appellate court declared the existence of an
agricultural tenancy relationship and ordered Macaya's reinstatement to
his landholding.
Since what is involved ed is agricultural tenancy, we refer to Republic Act
No. 1199 as amended by Republic Act No. 2263. Section 3 thereof defines
agricultural tenancy as:
xxx xxx xxx
... the physical possession by a person of land devoted to agriculture
belonging to, or legally possessed by, another for the purpose of
production through the labor of the former and of the members of his
immediate farm household, in consideration of which the former agrees to
share the harvest with the latter, or to pay a price certain, either in
produce or in money, or in both.
Thus, the essential requisites of tenancy relationship are: 1) the parties are
the landholder and the tenant; 2) the subject is agricultural land; 3) there
is consent; 4) the purpose is agricultural production; and 5) there is
consideration (Agustin, Code of Agrarian Reforms of the Philippines, 1981,
p. 19). As
xxx xxx xxx
All these requisites are necessary in order to create tenancy relationship
between the parties and the absence of one or more requisites do not
make the alleged tenant a de facto tenant, as contra-distinguished from a
de jure tenant, This is so because unless a person has established his
status as a de jure tenant, he is not entitled to security of tenure nor is he
covered by the Land Reform Program of the Government under existing
tenancy laws. ...
The key factor in ascertaining whether or not there is a landowner-tenant
relationship in this case is the nature of the disputed property.
Is the thirty-four (34) hectare lot, of which the six (6) hectares occupied by
the private respondent form a part, against agricultural land? If not, the
rules on agrarian reform do not apply.
From the year 1948 up to the present, the tax declarations of real property
and the annual receipts for real estate taxes paid have always classified
the land as "residential". The property is in Balara, Quezon City, Metro
Manila, not far from the correctly held by the trial court:
University of the Philippines and near some fast growing residential
subdivisions. The Manotok family is engaged in the business of developing
subdivisions in Metro Manila, not in farming.
The trial court observed that a panoramic view of the property shows that
the entire 34 hectares is rolling forestal land without any flat portions
except the small area which could be planted to palay. The photographs of
the disputed area show that flush to the plantings of the private
respondent are adobe walls separating expensive looking houses and

residential lots from the palay and newly plowed soil. Alongside the plowed
or narrowed soil are concrete culverts for the drainage of residential
subdivisions. The much bigger portions of the property are not suitable for
palay or even vegetable crops.
The trial court noted that in a letter dated April 12, 1977, the City Engineer
of Quezon City certified on the basis of records in his office that the
property in question falls within the category of "Residential I Zone."
The respondent court ignored all the above considerations and noted
instead that the appellees never presented the tax declarations for the
previous year, particularly for 1946, the year when Macaya began
cultivating the property. It held that while the petitioners at that time might
have envisioned a panoramic residential area of the disputed property,
then cogonal with some forest, that vision could not materialize due to the
snail pace of urban development to the peripheral areas of Quezon City
where the disputed property is also located and pending the consequent
rise of land values. As a matter of fact, it found that the houses found
thereon were constructed only in the 70's.
Whatever "visions" the owners may have had in 1946, the fact remains
that the land has always been officially classified as "residential" since
1948. The areas surrounding the disputed six hectares are now dotted with
residences and, apparently, only this case has kept the property in
question from being developed together with the rest of the lot to which it
belongs. The fact that a caretaker plants rice or corn on a residential lot in
the middle of a residential subdivision in the heart of a metropolitan area
cannot by any strained interpretation of law convert it into agricultural land
and subject it to the agrarian reform program.
On this score alone, the decision of the respondent court deserves to be
reversed.
Another requisite is that the parties must be landholder and tenant. Rep.
Act No. 11 99 as amended defines a landholder
Sec. 5(b) A landholder shall mean a person, natural or juridical, who, either
as owner, lessee, usufructuary, or legal possessor, lets or grants to another
the use or cultivation of his land for a consideration either in shares under
the share tenancy system, or a price certain under the leasehold tenancy
system.
On the other hand, a tenant is defined as
Sec. 5(a) A tenant shall mean a person who, himself and with the aid
available from within his immediate farm household, cultivates the land
belonging to, or possessed by, another with the latter's consent for
purposes of production, sharing the produce with the landholder under the
share tenancy system or paying to the landholder a price certain in
produce or in money or both, under the leasehold tenancy system.
Under these definitions, may Macaya be considered as a tenant and
Manotok as a landholder? Significant, as the trial court noted, is that the
parties have not agreed as to their contributions of the several items of
productions such as expenses for transplanting, fertilizers, weeding and
application of insecticides, etc. In the absence of an agreement as to the
respective contributions of the parties or other terms and conditions of
their tenancy agreement, the lower court concluded that no tenancy
relationship was entered into between them as tenant and landholder.
On this matter, the respondent Appellate Court disagreed. It held that:

... Whether the appellant was instituted as tenant therein or as bantay, as

the appellees preferred to call him, the inevitable fact is that appellant
cleared, cultivated and developed the once unproductive and Idle property
for agricultural production. Appellant and Don Severino have agreed and
followed a system of sharing the produce of the land whereby, the former
takes care of all expenses for cultivation and production, and the latter is
only entitled to 10 cavans of rice per harvest. This is the essense of
leasehold tenancy.
It should be noted, however, that from 1967 to the present, Macaya did not
deliver any cavans of palay to the petitioners as the latter felt that if
Macaya could no longer deliver the twenty (20) cavans of palay, he might
as well not deliver any. The decision of the petitioners not to ask for
anymore contributions from Macaya reveals that there was no tenancy
relationship ever agreed upon by the parties. Neither can such relationship
be implied from the facts as there was no agreed system of sharing the
produce of the property. Moreover, from 1946 to 1956 at which time,
Macaya was also planting rice, there was no payment whatsoever. At the
most and during the limited period when it was in force, the arrangement
was a civil lease where the lessee for a fixed price leases the property
while the lessor has no responsibility whatsoever for the problems of
production and enters into no agreement as to the sharing of the costs of
fertilizers, irrigation, seedlings, and other items. The private respondent,
however, has long stopped in paying the annual rents and violated the
agreement when he expanded the area he was allowed to use. Moreover,
the duration of the temporary arrangement had expired by its very terms.
Going over the third requisite which is consent, the trial court observed
that the property in question previous to 1946 had never been tenanted.
During that year, Vicente Herrera was the overseer. Under these
circumstances, coupled by the fact that the land is forested and rolling, the
lower court could not see its way clear to sustain Macaya's contention that
Manotok had given his consent to enter into a verbal tenancy contract with
him. The lower court further considered the fact that the amount of ten
(10) cavans of palay given by Macaya to the owners from 1957 to 1964
which was later increased to twenty (20) cavans of palay from 1964 to
1966 was grossly disproportionate to the amount of taxes paid by the
owners. The lot was taxed as residential land in a metropolitan area. There
was clearly no intention on the part of the owners to devote the property
for agricultural production but only for residential purposes. Thus, together
with the third requisite, the fourth requisite which is the purpose was also
not present.
The last requisite is consideration. This is the produce to be divided
between the landholder and tenant in proportion to their respective
contributions. We agree with the trial court that this was also absent.
As earlier stated, the main thrust of petitioners' argument is that the law
makes it mandatory upon the respondent Court of Appeals to affirm the
decision of the Court of Agrarian Relations if the findings of fact in said
decision are supported by substantial evidence, and the conclusions stated
therein are not clearly against the law and jurisprudence. On the other
hand, private respondent contends that the findings of the Court of
Agrarian Relations are based not on substantial evidence alone but also on
a misconstrued or misinterpreted evidence, which as a result thereof, make

the conclusions of the Court of Agrarian Relations clearly contrary to law

and jurisprudence.
After painstakingly going over the records of the case, we find no valid and
cogent reason which justifies the appellate court's deviation from the
findings and conclusions of the lower court. It is quite clear from the 44page decision of the trial court, that the latter has taken extra care and
effort in weighing the evidence of both parties of the case. We find the
conclusions of the respondent appellate court to be speculative and
conjectural.
It bears re-emphasizing that from 1946 to 1956, there was no agreement
as to any system of sharing the produce of the land. The petitioners did not
get anything from the harvest and private respondent Macaya was using
and cultivating the land free from any charge or expense. The situation
was rather strange had there been a tenancy agreement between Don
Severino and Macaya.
From 1957 to 1964, Macaya was requested to contribute ten (10) cavans a
year for the payment of the realty taxes. The receipts of these
contributions are evidenced by the following exhibits quoted below:
(a) Exhibit "4" adopted and marked as Exhibit "K" for plaintiff (Macaya):
Ukol sa taon 1961
Tinanggap naniin kay G. Teodoro Macaya ang sampung (10) cavan na palay
bilang tulong niya sa pagbabayad ng amillaramiento sa lupa ng
corporation na nasa Payong, Q.C. na kaniyang binabantayan.
(b) Exhibit "9" adopted and marked as Exhibit "L" for plaintiff (Macaya):
Tinanggap namin kay Ginoong Teodoro Macaya ang TATLONG (3) kabang
palay bilang kapupunan sa DALAWAMPUNG (20) kabang palay na kanyang
tulong sa pagbabayad ng amillaramiento para sa taong 1963 ng lupang ari
ng Manotok Realty, Inc. na nasa Payong, Quezon City, na kanyang
binabantayan
samantalang
hindi
pa
ginagawang
SUBDIVISION
PANGTIRAHAN.
c) Exhibit "10" adopted and marked as Exhibit "N" for plaintiff (Macaya):
Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20)
kabang palay na kanyang tulong sa pagbabayad ng amillaramiento para sa
taong 1964 ng lupang ari ng Manotok Realty Inc., na nasa Payong, Quezon
City, na kanyang binabantayan samantalang hindi pa ginagawang
SUBDIVISION PANG TAHANAN.
d) Exhibit "11" adopted and marked as Exhibit "M" for plaintiff (Macaya):
Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20)
kabang ng palay na kanyang tulong sa pagbabayad ng amillaramiento
para sa taong 1965 ng lupang ari ng Manotok Realty, Inc., na nasa Payong,
Quezon City, na kanyang binabantayan samantalang hindi pa ginagawang
SUBDIVISION PANG TAHANAN.
From the above-quoted exhibits, it clearly appears that the payment of the
cavans of palay was Macaya's contribution for the payment of the real
estate taxes; that the nature of the work of Macaya is that of a watchman
or guard (bantay); and, that the services of Macaya as such watchman or
guard (bantay) shall continue until the property shall be converted into a
subdivision for residential purposes.
The respondent appellate court disregarded the receipts as self-serving.
While it is true that the receipts were prepared by petitioner Perpetua M.
Bocanegra, Macaya nevertheless signed them voluntarily. Besides, the

receipts were written in the vernacular and do not require knowledge of the
law to fully grasp their implications.
Furthermore, the conclusion of the respondent appellate court to the effect
that the receipts having been prepared by one of the petitioners who
happens to be a lawyer must have been so worded so as to conceal the
real import of the transaction is highly speculative. There was nothing to
conceal in the first place since the primary objective of the petitioners in
allowing Macaya to live on the property was for security purposes. The
presence of Macaya would serve to protect the property from squatters. In
return, the request of Macaya to raise food on the property and cultivate a
three-hectare portion while it was not being developed for housing
purposes was granted.
We can understand the sympathy and compassion which courts of justice
must feel for people in the same plight as Mr. Macaya and his family.
However, the petitioners have been overly generous and understanding of
Macaya's problems. For ten years from 1946 to 1956, he lived on the
property, raising animals and planting crops for personal use, with only his
services as "bantay" compensating for the use of another's property. From
1967 to the present, he did not contribute to the real estate taxes even as
he dealt with the land as if it were his own. He abused the generosity of the
petitioners when he expanded the permitted area for cultivation from three
hectares to six or eight hectares. Mr. Macaya has refused to vacate
extremely valuable residential land contrary to the clear agreement when
he was allowed to enter it. The facts of the case show that even Mr.
Macaya did not consider himself as a true and lawful tenant and did not
hold himself out as one until he was asked to vacate the property.
WHEREFORE, the petition is GRANTED. The decision of the respondent
Court of Appeals is hereby REVERSED and SET ASIDE and the decision of
the Court of Agrarian Relations is AFFIRMED.
SO ORDERED.
SECOND DIVISION
G.R. No. 78214 December 5, 1988
YOLANDA CABALLES, petitioner,
vs.
DEPARTMENT OF AGRARIAN REFORM, HON. HEHERSON T. ALVAREZ
and BIENVENIDO ABAJON, respondents.
SARMIENTO, J.:
Before us is a petition for certiorari seeking the annulment of an Order
issued by the public respondent Ministry of Agrarian Reform , now the
Department of Agrarian Reform (DAR), through its then Minister, the Hon.
Heherson Alvarez, finding the existence of a tenancy relationship between
the herein petitioner and the private respondent and certifying the criminal
case for malicious mischief filed by the petitioner against the private
respondent as not proper for trial.
The facts as gathered by the MAR are as follows:
The landholding subject of the controversy, which consists of only sixty
(60) square meters (20 meters x 3 meters) was acquired by the spouses
Arturo and Yolanda Caballes, the latter being the petitioner herein, by
virtue of a Deed of Absolute Sale dated July 24, 1978 executed by Andrea

Alicaba Millenes This landholding is part of Lot No. 3109-C, which has a
total area of about 500 square meters, situated at Lawaan Talisay, Cebu.
The remainder of Lot No. 3109-C was subseconsequently sold to the said
spouses by Macario Alicaba and the other members of the Millenes family,
thus consolidating ownership over the entire (500-square meter) property
in favor of the petitioner.
In 1975, before the sale in favor of the Caballes spouses, private
respondent Bienvenido Abajon constructed his house on a portion of the
said landholding, paying a monthly rental of P2.00 to the owner, Andrea
Millenes. The landowner likewise allowed Abajon to plant on a portion of
the land, agreeing that the produce thereof would be shared by both on a
fitfy-fifty basis. From 1975-1977, Abajon planted corn and bananas on the
landholding. In 1978, he stopped planting corn but continued to plant
bananas and camote. During those four years, he paid the P2.00 rental for
the lot occupied by his house, and delivered 50% of the produce to Andrea
Millenes.
Sometime in March 1979, after the property was sold, the new owners,
Arturo and Yolanda Caballes, told Abajon that the poultry they intended to
build would be close to his house and pursuaded him to transfer his
dwelling to the opposite or southern portion of the landholding. Abajon
offered to pay the new owners rental on the land occupied by his house,
but his offer was not accepted. Later, the new owners asked Abajon to
vacate the premises, saying that they needed the property. But Abajon
refused to leave. The parties had a confrontation before the Barangay
Captain of Lawaan in Talisay, Cebu but failed to reach an agreement. All
the efforts exerted by the landowners to oust Abajon from the landholding
were in vain as the latter simply refused to budge.
On April 1, 1982, the landowner, Yolanda Caballes, executed an Affidavit
stating that immediately after she reprimanded Abajon for harvesting
bananas and jackfruit from the property without her knowledge, the latter,
with malicious and ill intent, cut down the banana plants on the property
worth about P50.00. A criminal case for malicious mischief was filed
against Abajon and which was docketed as Criminal Case No. 4003.
Obviously, all the planting on the property, including that of the banana
plants, had been done by Abajon. On September 30, 1982, upon motion of
the defense in open court pursuant to PD 1038, the trial court ordered the
referral of the case to the Regional Office No. VII of the then MAR for a
preliminary determination of the relationship between the parties. As a
result, the Regional Director of MAR Regional VII, issued a certification 1
dated January 24, 1 983, stating that said Criminal Case No. 4003 was not
proper for hearing on the bases of the following findings:
That herein accused is a bona-fide tenant of the land owned by the
complaining witness, which is devoted to bananas;
That thin case is filed patently to harass and/or eject the tenant from his
farmholding, which act is prohibited by law; and
That this arose out of or is connected with agrarian relations.
From the said certification, the petitioner appealed to the then MAR, now
the respondent DAR. Acting on said appeal, the respondent DAR, through
its then Minister Conrado Estrella, reversed the previous certification in its
Order 2 of February 3, 1986, declaring Criminal Case No. 4003 as proper for
trial as "the land involved is a residential lot consisting of only 60 square

meters whereon the house of the accused is constructed and within the
industrial zone of the town as evinced from the Certification issued by the
Zoning Administrator of Talisay, Cebu."
Upon motion for reconsideration filed by Abajon, the respondent DAR,
through its new Minister, herein respondent Heherson Alvarez, issued an
Orders dated November 15, 1986, setting aside the previous Order 3 dated
February 3, 1986, and certifying said criminal case as not proper for trial,
finding the existence of a tenancy relationship between the parties, and
that the case was designed to harass the accused into vacating his tillage.
In the summary investigation conducted by the DAR, the former
landowner, Andrea Millenes, testified that Bienvenido Abajon dutifully gave
her 50% share of the produce of the land under his cultivation. The
grandson of Andrea Millenes, Roger Millenes, corroborated the testimony of
the former, stating that he received said share from Abajon. Roger Millenes
further testified that the present owners received in his presence a bunch
of bananas from the accused representing or 50% of the two bunches of
bananas gathered after Caballes had acquired the property. 4
From these factual findings, the DAR concluded that Abajon was a tenant of
Andrea Millenes, the former owner, who had testified that she shared the
produce of the land with Abajon as truer thereof. 5 Thus, invoking Sec. 10 of
RA 3844, as amended, which provides that "[T]he agricultural leasehold
relation under this Code shall not be extinguished by mere expiration of
the term or period in a leasehold contract nor by the sale, alienation or
transfer of the legal possession of the landholding"; and that "(I)n case the
agricultural lessor sells, alienates or transfers the legal possession of the
landholding, the purchaser or transferee thereof shall be subrogated to the
rights and substituted to the obligations of the agricultural lessor," the MAR
ruled that 'the new owners are legally bound to respect the tenancy,
notwithstanding their claim that the portion tilled by Abajon was small,
consisting merely of three (3) meters wide and twenty (20) meters long, or
a total of sixty (60) square meters." 6
Hence, this petition for certiorari alleging that:
I. Respondents DAR and Hon. Heherson T. Alvarez committed "grave abuse
of power and discretion amounting to lack of jurisdiction" in holding that
private respondent Abajon is an agricultural tenant even if he is cultivating
only a 60-square meter (3 x 20 meters) portion of a commercial lot of the
petitioner.
II. Public respondents gravely erred in holding that Criminal Case No. 4003
is not proper for trial and hearing by the court. 7
We hold that the private respondent cannot avail of the benefits afforded
by RA 3844, as amended. To invest him with the status of a tenant is
preposterous.
Section 2 of said law provides:
It is the policy of the State:
(1) To establish cooperative-cultivatorship among those who live and work
on the land as tillers, owner-cultivatorship and the economic family-size
farm as the basis of Philippine agriculture and, as a consequence, divert
landlord capital in agriculture to industrial development;
xxx xxx xxx
RA 3844, as amended, defines an economic family-size farm as "an area of
farm land that permits efficient use of labor and capital resources of the

farm family and will produce an income sufficient to provide a modest

standard of living to meet a farm family's needs for food, clothing, shelter,
and education with possible allowance for payment of yearly installments
on the land, and reasonable reserves to absorb yearly fluctuations in
income." 8
The private respondent only occupied a miniscule portion (60 square
meters) of the 500-square meter lot. Sixty square meters of land planted to
bananas, camote, and corn cannot by any stretch of the imagination be
considered as an economic family-size farm. Surely, planting camote,
bananas, and corn on a sixty-square meter piece of land can not produce
an income sufficient to provide a modest standard of living to meet the
farm family's basic needs. The private respondent himself admitted that he
did not depend on the products of the land because it was too small, and
that he took on carpentry jobs on the side. 9 Thus, the order sought to be
reviewed is patently contrary to the declared policy of the law stated
above.
The DAR found that the private respondent shared the produce of the land
with the former owner, Andrea Millenes. This led or misled, the public
respondents to conclude that a tenancy relationship existed between the
petitioner and the private respondent because, the public respondents
continue, by operation of Sec. 10 of R.A. 3844, as amended, the petitioner
new owner is subrogated to the rights and substituted to the obligations of
the supposed agricultural lessor (the former owner).
We disagree.
The essential requisites of a tenancy relationship are:
1. The parties are the landowner and the tenant;
2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation; and
6. There is sharing of harvests.
All these requisites must concur in order to create a tenancy relationship
between the parties. The absence of one does not make an occupant of a
parcel of land, or a cultivator thereof, or a planter thereon, a de jure
tenant. This is so because unless a person has established his status as a
de jure tenant, he is not entitled to security of tenure nor is he covered by
the Land Reform Program of the Government under existing tenancy laws.
10

Therefore, the fact of sharing alone is not sufficient to establish a tenancy

relationship. Certainly, it is not unusual for a landowner to accept some of
the produce of his land from someone who plants certain crops thereon.
This is a typical and laudable provinciano trait of sharing or patikim, a
native way of expressing gratitude for favor received. This, however, does
not automatically make the tiller-sharer a tenant thereof specially when the
area tilled is only 60, or even 500, square meters and located in an urban
area and in. the heart of an industrial or commercial zone at that. Tenancy
status arises only if an occupant of a parcel of land has been given its
possession for the primary purpose of agricultural production. The
circumstances of this case indicate that the private respondent's status is
more of a caretaker who was allowed by the owner out of benevolence or
compassion to live in the premises and to have a garden of some sort at its

southwestern side rather than a tenant of the said portion.

Agricultural production as the primary purpose being absent in the
arrangement, it is clear that the private respondent was never a tenant of
the former owner, Andrea Millenes. Consequently, Sec. 10 of RA of 3844, as
amended, does not apply. Simply stated, the private respondent is not a
tenant of the herein petitioner.
Anent the second assignment of error, the petitioner argues that since
Abajon, is not an agricultural tenant, the criminal case for malicious
mischief filed against him should be declared as proper for trial so that
proceedings in the lower court can resume.
Notwithstanding our ruling that the private respondent is not a tenant of
the petitioner, we hold that the remand of the case to the lower court for
the resumption of the criminal proceedings is not in the interest of justice.
Remand to the Municipal Court of Talisay, Cebu, would not serve the ends
of justice at all, nor is it necessary, because this High Tribunal is in a
position to resolve with finality the dispute before it. This Court, in the
public interest, and towards the expeditious administration of justice, has
decided to act on the merits and dispose of the case with finality. 11
The criminal case for malicious mischief filed by the petitioner against the
private respondent for allegedly cutting down banana trees worth a measly
P50.00 will take up much of the time and attention of the municipal court
to the prejudice of other more pressing cases pending therein.
Furthermore, the private respondent will have to incur unnecessary
expenses to finance his legal battle against the petitioner if proceedings in
the court below were to resume. Court litigants have decried the long and
unnecessary delay in the resolution of their cases and the consequent
costs of such litigations. The poor, particularly, are victims of this unjust
judicial dawdle, Impoverished that they are they must deal with unjust
legal procrastination which they can only interpret as harassment or
intimidation brought about by their poverty, deprivation, and despair. It
must be the mission of the Court to remove the misperceptions aggrieved
people have of the nature of the dispensation of justice. If justice can be
meted out now, why wait for it to drop gently from heaven? Thus,
considering that this case involves a mere bagatelle the Court finds it
proper and compelling to decide it here and now, instead of further
deferring its final termination.
As found by the DAR, the case for malicious mischief stemmed from the
petitioner's affidavit stating that after she reprimanded private respondent
Abajon for harvesting bananas and jackfruit from the property without her
knowledge, the latter, with ill intent, cut the banana trees on the property
worth about P50.00.
This was corroborated by a certain Anita Duaban, a friend of the petitioner,
who likewise executed an affidavit to the effect that she saw the private
respondent indiscriminately cutting the banana trees. 12
The Revised Penal Code, as amended, provides that "any person who shall
deliberately cause to the property of another any damage not falling within
the terms of the next preceding chapter shall be guilty of malicious
mischief." 13
The elements of the crime of malicious mischief are:
1. The offender deliberately caused damage to the property of another;
2. The damage caused did not constitute arson or crimes involving

destruction;
3. The damage was caused maliciously by the offender.
After a review of the facts and circumstances of this case, we rule that the
aforesaid criminal case against the private respondent be dismissed.
The private respondent can not be held criminally liable for malicious
mischief in cutting the banana trees because, as an authorized occupant or
possessor of the land, and as planter of the banana trees, he owns said
crops including the fruits thereof The private respondent's possession of
the land is not illegal or in bad faith because he was snowed by the
previous owners to enter and occupy the premises. In other words, the
private respondent worked the land in dispute with the consent of the
previous and present owners. Consequently, whatever the private
respondent planted and cultivated on that piece of property belonged to
him and not to the landowner. Thus, an essential element of the crime of
malicious mischief, which is "damage deliberately caused to the property
of another," is absent because the private respondent merely cut down his
own plantings.
WHEREFORE, the Order of public respondents dated November 15, 1986 is
SET ASIDE and Criminal Case No. 4003, is hereby DISMISSED. Let a copy of
this decision be sent to the Municipal Trial Court of Talisay, Cebu for
appropriate action. This Decision is IMMEDIATELY EXECUTORY.
No costs.
SO ORDERED.
SECOND DIVISION
G.R. No. 70736 March 16, 1987
BONIFACIO L. HILARIO and EDUARDA M. BUENCAMINO HILARIO,
petitioners,
vs.
HONORABLE INTERMEDIATE APPELLATE COURT AND SALVADOR
BALTAZAR, respondents.
Bonifacio L. Hilario for petitioners.
Alberto Mala, Jr. for private respondent.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari of the Court of Appeals' decision
declaring Salvador Baltazar a leasehold tenant entitled to security of
tenure on a parcel of land consisting of 1,740 square meters.
On January 13, 1981, Salvador Baltazar filed a verified complaint with the
Court of Agrarian Relations, Branch VI at Baliuag, Bulacan alleging that
since January, 1955 he had been in continuous possession as a share
tenant of a parcel of land with an area of about 2 hectares situated in San
Miguel, Bulacan, which was previously owned by one Socorro Vda. de
Balagtas; that on or about December 27, 1980, and thereafter, the spouses
Hilario began to threaten him to desist from entering and cultivating a
portion of the aforesaid land with an area of 4,000 square meters and
otherwise committed acts in violation of his security of tenure; that the
Hilarios were contemplating the putting up of a fence around the said
portion of 4,000 square meters and that unless restrained by the court,
they would continue to do so to his great irreparable injury.
Baltazar claims that he became a tenant of Socorro P. Vda. de Balagtas on

the latter's two-hectare landholding located at San Juan, San Miguel,

Bulacan by virtue of a "Kasunduan" executed between them on January 8,
1979, He states that he erected his house and planted "halaman," the
produce of which was divided at 70-30 and 50-50 (sic) in his favor. After the
death of Socorro P. Vda. de Balagtas, he allegedly gave the share
pertaining to the landowner to her daughter Corazon Pengzon. It was only
in December, 1980 that he came to know that a portion of the 2 hectares
or 4,000 square meters is already owned by the Hilarios.
On the other hand, the petitioners aver that they acquired the landholding
of 4,000 square meters from the Philippine National Bank (PNB) after it had
been foreclosed by virtue of a deed of sale executed between Bonifacio
Hilario and the PNB. The former owner Corazon Pengzon testified that she
owned only two lots-Lot 427-B with an area of 841 square meters and Lot
427-C with an area of 899 square meters with a total area of 1,740 square
meters. The other 2 lots were owned by Ruben Ocampo and Juan Mendoza.
She further testified that in 1964 at the time of the partition of the
property, she declared the property for classification purposes as
"bakuran" located in the Poblacion and had no knowledge that there were
other things planted in it except bananas and pomelos.
On November 27, 1981, the Court of Agrarian Relations (CAR) in
determining whether or not respondent Baltazar is the tenant of the
petitioners ruled that the land in question is not an agricultural landholding
but plain "bakuran," hence, Baltazar is not a tenant on the land.
On January 30, 1982, the Court of Appeals, however, remanded the case to
the lower court for further proceedings on the ground that the findings of
the Court of Agrarian Relations (CAR) were not supported by substantial
evidence.
In compliance with the order of the Court of Appeals, the CAR admitted
additional evidence.
On December 19, 1983, the CAR admitted the petitioners' third party
complaint filed with leave against the Philippine National Bank (PNB) which
states that in the event that judgment would be rendered against them
under the original complaint, the PNB must contribute, indemnify, and
reimburse the spouses the full amount of the judgment.
On the basis of the parties' and their witnesses' affidavits containing
detailed narrations of facts and documentary exhibits which served as their
direct testimonies pursuant to PD 946, the CAR found that there was no
tenancy relationship existing between Baltazar and the former owner,
Corazon Pengzon. The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered declaring plaintiff not to be a
tenant on the landholding described in the complaint and ordering his
ejectment therefrom.
The third-party complaint is hereby dismissed for lack of merit. (pp. 25- 26,
Rollo)
Again, respondent Salvador Baltazar appealed to the then Intermediate
Appellate Court (IAC).
The IAC, however, reversed the decision of the CAR and held that:
... [T]he decision appealed from is hereby SET ASIDE, and another one
entered declaring plaintiff-appellant ii leasehold tenant entitled to security
of tenure on the land in question consisting of 1,740 square meters. Costs
against defendants-appellees. (p. 31, Rollo)

Consequently, the spouses Hilarios filed this petition for review making the
following assignments of errors:
I. THE INTERMEDIATE APPELLATE COURT ERRED IN DISTURBING THE
FINDINGS OF FACTS AND DECISION OF THE COURT OF AGRARIAN
RELATIONS (CAR) WHICH IS SUPPORTED BY SUBSTANTIAL EVIDENCE.
II. THE INTERMEDIATE APPELLATE COURT ERRED IN SUBSTITUTION (SIC)
THE FINDINGS OF FACTS OF CAR, OF ITS OWN FINDINGS.
III. THE INTERMEDIATE APPELLATE COURT ERRED IN NOT AFFIRMING THE
DECISION OF CAR, FINDING THE LOTS IN QUESTION WITH AN AREA OF
1,740 SQUARE METERS AS RESIDENTIAL LOT AND PRIVATE RESPONDENT
NOT TO BE A TENANT.
We agree with the respondent court when it stated that it can affirm on
appeal the findings of the CAR only if there is substantial evidence to
support them. However, after a careful consideration of the records of the
case, we find no valid reason to deviate from the findings of the CAR. The
evidence presented by the petitioners is more than sufficient to justify the
conclusion that private respondent Salvador Baltazar is not a tenant of the
landholding in question.
Salvador Baltazar claims: that he is working on the land in question
pursuant to a "kasunduan" executed between him and Socorro Balagtas.
The contract covers a two-hectare parcel of land. The disputed landholding
is only 4,000 square meters more or less, although Baltazar claims that this
area is a portion of the two hectares in the contract. He testified that
sometime in 1965, he relinquished 1.5 hectares of the two hectares subject
of the "kasunduan" to Nemesio Ocampo, Juan Mendoza, Miguel Ocampo
and Miguel Viola and what remained under his cultivation was 1/2 hectare
owned by Corazon Pengson. He stated that when Socorro Balagtas died, no
new contract was executed. However, he insists that the old contract was
continued between Corazon Pengson and himself. (Rollo, p. 23).
This claim is controverted by the testimony of Corazon Pengson herself
which we quote as follows:
Q After the death of your mother in 1965, what step, if any, have you
taken, regarding this subject landholding or after the death of your mother
how did you
Q ... administer this landholding in 1963, 1964, 1965, 1966, etc?
A What I did is to fix the title of ownership, sir.
COURT:
Q What else?
A None other, Your Honor.
Q After the death of your mother in 1962, have you seen Mr. Salvador
Baltazar in this landholding in question?
A Yes, Your Honor.
Q What was he doing?
WITNESS:
A We are neighbors, Your Honor, sometimes he visits and goes to our place
and we used to meet there, Your Honor.
Q What was the purpose of his visit and your meeting in this landholding?
A Sometimes when he visits our place he tens us that there are some
bananas to be harvested and sometimes there are other fruits, your Honor.
Q You mean to say he stays in this subject landholding consisting of 7,000
square meters?

A After the survey it turned outA . . . that he is occupying another lot which I learned that property does
not belong to us, Your Honor.
Q what was your arrangement regarding his stay in that landholding which
you don't own?
A He said that he had a contract with my late mother which I don't know; in
order not to cause any trouble because I will be bothered in my business, I
told him to continue, Your Honor.
Q What do you mean when youCOURT:
(continuing)
. . .told him to continue?
A What I mean to say is that he can stay there although I don't understand
the contract with my mother, Your Honor.
Q Was he paying rentals for his stay in that lot?
A No, Your Honor (T.S.N., pp. 15-19, hearing of August 5, 1981).
Corazon Pengson further explained that she did not receive any share from
the produce of the land from 1964 up to the filing of the case and she
would not have accepted any share from the produce of the land because
she knew pretty well that she was no longer the owner of the lot since
1974 when it was foreclosed by the bank and later on purchased by the
spouses Hilarios.
We note the CAR's finding:
Tenancy relationship is indivisible. The two-hectare land subject of
plaintiff's alleged contract with Socorro Balagtas having been parcelled into
seven (7) and possession thereof relinquished/surrendered in 1965 results
in the termination of plaintiff's tenancy relationship with the previous
owner/landholder. Such being the case, he cannot now claim that the
landholding in question consisting of 4,000 square meters, more or less, is
being cultivated by him under the old contract. The owner thereof Corazon
Pengson has no tenancy relationship with him (plaintiff). (p. 25, Rollo)
From the foregoing, it is clear that Corazn Pengson did not give her
consent to Baltazar to work on her land consisting of only 1,740 square
meters. We agree with the CAR when it said:
The law accords the landholder the right to initially choose his tenant to
work on his land. For this reason, tenancy relationship can only be created
with the consent of the true and lawful landholder through lawful means
and not by imposition or usurpation. So the mere cultivation of the land by
usurper cannot confer upon him any legal right to work the land as tenant
and enjoy the protection of security of tenure of the law (Spouses Tiongson
v. Court of Appeals, 130 SCRA 482) (Ibid)
And in the case of Tuazon v. Court of Appeals (118 SCRA 484), this Court
had the occasion to explain:
xxx xxx xxx
... Tenancy is not a purely factual relationship dependent on what the
alleged tenant does upon the land. It is also a legal relationship. The intent
of the parties, the understanding when the farmer is installed, and, as in
this case, their written agreements, provided these are complied with and
are not contrary to law, are even more important."
The respondent court ruled that the fact that the land in question is located
in the poblacion does not necessarily make it residential.

The conclusion is purely speculative and conjectural, We note that the

evidence presented by the petitioners sufficiently establishes that the land
in question is residential and not agricultural.
As we stated in Tiongson v. Court of Appeals (supra) "the key factor in
ascertaining whether or not there is a landowner-tenant relationship in this
case is the nature of the disputed property."
The records show that the disputed property, only 1,740 square meters in
area, is actually located in the poblacion of San Miguel, Bulacan not far
from the municipal building and the church. It is divided into two lots-Lot
427-B with an area of 841 square meters and Lot 427-C with an area of 899
square meters. Two other lots which the respondent claims to cultivate as
"tenant" were originally owned by Ruben Ocampo and Juan Mendoza, not
Corazon Pengson, through whom the respondent traces his alleged tenancy
rights.
Respondent Baltazar is a full-time government employee working in the
Bureau of Plant Industry.
The disputed lots were acquired at a foreclosure sale from the Philippine
National Bank. They were purchased as residential lots and the deed of
sale describes them as "residential." The inspection and appraisal report of
the PNB classified the land as residential. The declaration of real property
on the basis of which taxes are paid and approved by the Acting Provincial
Assessor of Bulacan classifies the land as residential. The tax declarations
show that the 841 square meter lot is assessed for tax purposes at
P25,236.00 while the 899 square meter lot is assessed at P26,920.00. The
owner states that the land has only bananas and pomelos on it. But even if
the claim of the private respondent that some corn was planted on the lots
is true, this does not convert residential land into agricultural land.
The presumption assumed by the appellate court, that a parcel of land
which is located in a poblacion is not necessary devoted to residential
purposes, is wrong. It should be the other way around. A lot inside the
poblacion should be presumed residential or commercial or nonagricultural unless there is clearly preponderant evidence to show that it is
agricultural.
The respondent court also failed to note that the alleged tenant pays no
rental or share to the landowners. Baltazar made a vague allegation that
he shared 70-30 and 50-50 of the produce in his favor. The former owner
flatly denied that she ever received anything from him,
The requirements set by law for the existence of a tenancy relationship, to
wit: (1) The parties are the landholder and tenant; (2) The subject is
agricultural land; (3) The purpose is agricultural production; and (4) There
is consideration; have not been met by the private respondent.
We held in Tiongson v. Court of Appeals, cited above that:
All these requisites are necessary in order to create tenancy relationship
between the parties and the absence of one or more requisites do not
make the alleged tenant a de facto tenant as contra-distinguished from a
de jure tenant. This is so because unless a person has established his
status as a dejure tenant, he is not entitled to security of tenure nor is he
covered by the Land Reform Program of the Government under existing
tenancy laws ... (emphasis supplied).
WHEREFORE, the petition is GRANTED. The decision of the respondent
Court of Appeals is hereby REVERSED and SET ASIDE and the decision of

the Court of Agrarian Relations is AFFIRMED.

SO ORDERED.
FIRST DIVISION
G.R. No. 95318
June 11, 1991
LOURDES PEA QUA, assisted by her husband, JAMES QUA,
petitioner,
vs.
HONORABLE COURT OF APPEALS (SECOND DIVISION), CARMEN
CARILLO, EDUARDO CARILLO, JOSEPHINE CARILLO, REBECCA
CARILLO, MARIA CEPRES, CECILIO CEPRES and SALVADOR CARILLO,
JR., respondents.
Brotamonte Law Office for petitioner.Isabel E. Florin for private
respondents
GANCAYCO, J.:
This case deals with the issue of whether or not private respondents
possess the status of agricultural tenants entitled to, among others, the
use and possession of a home lot.
Respondent Court of Appeals,1 in denying due course to the petition for
certiorari filed by petitioner, stated the antecedents of this case in the
lower courts as follows:
. . . [O]n July 17, 1986, petitioner Lourdes Pea Qua filed a complaint for
ejectment with damages against private respondents claiming that she is
the owner of a parcel of residential land, Lot No. 2099 of the Malinao
Cadastre, situated at Poblacion, Tinapi, Malinao, Albay, with an area of 346
square meters, which is registered in her name under TCT T-70368; that
inside the land in question is an auto repair shop and three houses, all
owned by private respondents; and that said respondents' stay in the land
was by mere tolerance and they are in fact nothing but squatters who
settled on the land without any agreement between her (sic), paying no
rents to her nor realty taxes to the government.
In their answer, private respondent Carmen Carillo, surviving spouse of the
late Salvador Carillo (and [respectively the] mother and mother-in-law of
the other [private] respondents), alleged that the lot in question is a farm
lot [home lot] because she and her late husband were tenants of the same
including the two other lots adjoining the lot in question, Lots No. 2060 and
2446, which also belong to petitioner; that as tenants, they could not just
be ejected without cause; that it was not petitioner who instituted them as
tenants in the land in question but the former owner, Leovigildo Pea who
permitted the construction of the auto repair shop, the house of Carmen
Carillo and the other two houses.
After trial, the Municipal Court [found private respondents to be mere
squatters and] rendered judgment2 ordering . . . [them] to vacate and
remove their houses and [the] auto repair shop from the lot in question
and to pay the petitioner attorney's fees and a monthly rental of P200.00.
On appeal to respondent [Regional Trial] Court, the judgment was modified
by ordering the case dismissed [insofar as] Carmen Carillo [was concerned
being qualified as an agricultural tenant and] declaring that the home lot
and her house standing thereon should be respected.3
Believing that even private respondent Carmen Carillo does not qualify as

an agricultural tenant, petitioner pursues her cause before this forum

citing only one ground for the entertainment of her petition, to wit:
THAT PUBLIC RESPONDENT [Court of Appeal] COMMITTED GRAVE ABUSE OF
DISCRETION AND ACTED CONTRARY TO THE ADMITTED FACTS AND
APPLICABLE JURISPRUDENCE, AMOUNTING TO LACK OF JURISDICTION, FOR
DENYING DUE COURSE TO THE PETITIONER'S CRY FOR JUSTICE AND FOR
DISMISSING THE PETITION.4
The Court agrees and finds that respondent Court of Appeals committed a
grave abuse of discretion in dismissing the petition for review of the
decision of the Regional Trial Court, the same being replete with
inconsistencies and unfounded conclusions. Because of this jurisdictional
issue raised by petitioner, the Court hereby treats this petition as a special
civil action for certiorari under Rule 65 of the Rules of Court.5
The Regional Trial Court6 made the following observations:
The land in question is a measly three hundred forty six (346) square
meters and adjoining another two (2) lots which are separately titled
having two thousand four hundred thirteen (2,413) square meters and
eight thousand two hundred ninety eight (8,298) square meters the
three (3) lots having a total area of eleven thousand fifty seven (11,057)
square meters, more or less, or over a hectare of land owned by the
plaintiff or by her predecessors-in-interest.
In the 346 square meters lot stand (sic) four (4) structures, [to wit]: an auto
repair shop, a house of [private respondent] Carmen Carillo and two (2)
other houses owned or occupied by the rest of the [private respondents] . .
.; in other words, the [private respondents] almost converted the entire
area as their home lot for their personal aggrandizement, believing that
they are all tenants of the [petitioner].
Claimed, the defendants planted five hundred (500) coconut trees and only
fifty (50) coconut trees survived in the land in question and/or in the entire
area of the three lots. Such an evidence (sic) is very untruthful, unless it is
a seed bed for coconut trees as the area is so limited. But found standing
in the area in question or in the entire three (3) lots are only seven (7)
coconut trees, the harvest of which is [allegedly] 2/3 share for the
[petitioner] and the 1/3 share for the [private respondents]. The share, if
ever there was/were, could not even suffice [to pay] the amount of taxes of
the land (sic) paid religiously by the [petitioner] yearly. 7 (Emphasis
supplied.)
It is clear from the foregoing that the source of livelihood of private
respondents is not derived from the lots they are allegedly tenanting. This
conclusion is further supported by private respondent Carmen Carillo's
assertion that the auto repair shop was constructed with the consent of
petitioner's predecessor-in-interest for whom her husband served as a
driver-mechanic.8
From private respondents' manner of caring for the lots, it is also apparent
that making the same agriculturally viable was not the main purpose of
their occupancy, or else they should have immediately replanted coconut
trees in place of those that did not survive. Indeed, the location of their
auto repair shop being near the poblacion and along the highway, private
respondents chose to neglect the cultivation and propagation of coconuts,
having earned, through the automobile repair shop, more than enough not
only for their livelihood but also for the construction of two other dwelling

houses thereon. It is also intimated by the Regional Trial Court that there is
no direct evidence to confirm that the parties herein observed the sharing
scheme allegedly set-up between private respondents and petitioner's
predecessor-in-interest.
Notwithstanding the foregoing indicia of a non-agricultural tenancy
relationship, however, the Regional Trial Court decided in favor of private
respondent Carmen Carillo and ruled, thus:
In View of the Foregoing, and Premises considered, the Court renders
judgment:
1. Ordering defendants, namely: Eduardo Carillo, Josephine P. Carillo,
Rebecca Carillo, Maria Cepres, Cecilio Cepres and Salvador Carillo, Jr., to
vacate and remove their two (2) houses and the auto repair shop from the
premises in question, and restoring the area to the lawful owner, the herein
plaintiff;
2. Ordering said six defendants to pay the plaintiff jointly and severally the
amount of Four Thousand (P4,000.00) Pesos as attorney's fees and
litigation expenses;
3. Ordering said six defendants to pay plaintiff the sum of One Hundred
Seventy One Pesos and Thirty Six Centavos (P171.36) monthly, for the use
of the area in question, commencing July 17, 1986 the date the plaintiff
filed this action in Court, up to the time the defendants vacate the area in
question and restore the same to the plaintiff peacefully.
4. And ordering said six (6) defendants to pay the costs proportionately.
The case against defendant, Carmen Carillon is hereby ordered
DISMISSED. The home lot and where her house stands is respected. And
without pronouncement as to its costs (sic).
IT IS SO ORDERED.9 (Emphasis supplied.)
Without explaining why, the Regional Trial Court chose not to believe the
findings of the Municipal Circuit Trial Court and instead, adopted the
recommendation of the Regional Director for Region V, acting for the
Secretary of the Department of Agrarian Reform, without making separate
findings and arriving at an independent conclusion as to the nature of the
relationship between the parties in this case. This is evident in the
following excerpt of the judgment of the Regional Trial Court:
The dispositive part of the Resolution of this Civil Case No. T-1317 for
Ejectment with Damages, Referral Case No. 880054 states and is quoted
verbatim:
WHEREFORE, premises considered, we are constrained to issue the
following resolutions:
1) Certifying this case as NOT PROPER FOR TRIAL in as far as the home lot
and house built thereon by the spouses Carmen Carillo (sic);
2) Advising the plaintiff to institute proper cause of action in as far as the
auto repair shop and the two (2) houses erected on her landholdings by the
children of tenant-farmer Salvador Carillo since they appear as not the
lawful tenants thereat.
SO RESOLVED.
xxx
xxx
xxx
From the foregoing dispositive part of the resolution penned down by the
Regional Director, it defines and explains the status of each of the
defendants.10
Time and again, the Court has ruled that, as regards relations between

litigants in land cases, the findings and conclusions of the Secretary of

Agrarian Reform, being preliminary in nature, are not in any way binding on
the trial courts11 which must endeavor to arrive at their own independent
conclusions.
Had the Regional Trial Court hearkened to this doctrine, proceeded to so
conduct its own investigation and examined the facts of this case, a
contrary conclusion would have been reached, and the findings of the
Municipal Circuit Trial Court, sustained, particularly when the
circumstances obtaining in this case are examined in the light of the
essential requisites set by law for the existence of a tenancy relationship,
thus: (1) the parties are the landowner and the tenant; (2) the subject is
agricultural land; (3) the purpose is agricultural production; and (4) there is
consideration.12 It is also understood that (5) there is consent to the tenant
to work on the land, that (6) there is personal cultivation by him and that
the consideration consists of sharing the harvest. 13
It is contended by petitioner that the parcel of land occupied by private
respondents, Lot No. 2099, with an area of only 346 square meters is
residential in nature, being situated near the poblacion of Malinao, Albay,
and as evidenced by the tax declaration obtained by petitioner to this
effect.1wphi1 Indeed, the municipal trial court judge ordered the
ejectment of the private respondents on this basis. On the other hand,
private respondents aver that the lot is agricultural being bounded by two
other agricultural lands planted to coconuts titled in the name of petitioner
and all three parcels being cultivated by them.
The Court is not prepared to affirm the residential status of the land merely
on the basis of the tax declaration, in the absence of further showing that
all the requirements for conversion of the use of land from agricultural to
residential prevailing at the start of the controversy in this case have been
fully satisfied.14
Be that as it may and recognizing the consent to the presence of private
respondents on the property as given by petitioner's predecessor-ininterest, the situation obtaining in this case still lacks, as discussed earlier,
three of the afore-enumerated requisites, namely: agricultural production,
personal cultivation and sharing of harvests.
The Court reiterates the ruling in Tiongson v. Court of Appeals,15 that
All these requisites are necessary in order to create tenancy relationship
between the parties and the absence of one or more requisites do (sic) not
make the alleged tenant a de facto tenant as contradistinguished from a
de jure tenant. This is so because unless a person has established his
status as a de jure tenant, he is not entitled to security of tenure nor is he
covered by the Land Reform Program of the Government under existing
tenancy laws.
Under the foregoing, private respondent Carmen Carillo is not entitled to
be considered an agricultural tenant. Therefore, she may be not allowed
the use of a home lot, a privilege granted by Section 35 of Republic Act No.
3844, as amended, in relation to Section 22 (3) of Republic Act No. 1199,
as amended,16 only to persons satisfying the qualifications of agricultural
tenants of coconut lands.
WHEREFORE, the petition is GRANTED. The decision of respondent Court of
Appeals is hereby SET ASIDE and a new one is issued REINSTATING the
decision of the Municipal Circuit Trial Court of Malinao-Tiwi, Albay, Fifth

Judicial Region dated 19 August 1987. No pronouncement as to costs.

SO ORDERED.
SECOND DIVISION
G.R. No. L-44570 May 30, 1986
MANUEL GUERRERO and MARIA GUERRERO, petitioners,
vs.
HON. COURT OF APPEALS, and APOLINARIO BENITEZ, respondents.
A.D. Guerrero for petitioners.
Bureau of Legal Assistance for private respondents.
GUTIERREZ, JR., J.:
Whether or not a tenancy relationship exists between the parties Manuel
Guerrero, et al and Apolinario Benitez, et al. as to determine their
respective rights and obligations to one another is the issue in this petition
to review the decision of the then Court of Appeals, now the Intermediate
Appellate Court, which affirmed in toto the decision of the Court of Agrarian
Relations in CAR Case No. 6793-NE (SA-Q) '73, the dispositive portion of
which reads:
In view of all the foregoing, judgment is hereby rendered:
(1) ordering defendants-spouses Manuel and Maria Guerrero to reinstate
plaintiff Apolinario Benitez to the 10-hectare portion of the 16-hectare
coconut holding in question, located at Bo. San Joaquin, Maria Aurora Subprovince Quezon and to maintain said plaintiff in the peaceful possession
and cultivation thereof, with all the rights accorded and obligations
imposed upon him by law;
(2) ordering defendants Paulino and Rogelio both surnamed Latigay to
vacate the said ten-hectare portion and deliver possession thereof to
plaintiff Apolinario Benitez;
(3) ordering defendants-spouses Manuel and Maria Guerrero to pay
damages to plaintiffs in the amount of P14,911.20 beginning from July,
1973 and to pay the same amount every year thereafter until plaintiff is
effectively reinstated to the ten-hectare portion;
(4) denying plaintiff-tenants' prayer for reconstruction of the copra cottage:
and
(5) ordering defendants-spouses Manuel and Maria Guerrero to pay plaintiff
the amount of P200.00 by way of litigation expenses.
All other claims of the parties are denied. With costs against defendantsspouses.
The petitioners adopt the respondent court's findings of fact excepting,
however, to its conclusion that tenancy relations exist between the
petitioners and the respondents, thus:
In 1969, plaintiff Apolinario Benitez was taken by defendants- spouses
Manuel and Maria Guerrero to take care of their 60 heads of cows which
were grazing within their 21-hectare coconut plantation situated at Bo. San
Joaquin, Maria Aurora, Subprovince of Aurora, Quezon. Plaintiff was allowed
for that purpose to put up a hut within the plantation where he and his
family stayed. In addition to attending to the cows, he was made to clean
the already fruitbearing coconut trees, burn dried leaves and grass and to
do such other similar chores. During harvest time which usually comes
every three months, he was also made to pick coconuts and gather the

fallen ones from a 16-hectare portion of the 21-hectare plantation. He had

to husk and split the nuts and then process its meat into copra in
defendants' copra kiln. For his work related to the coconuts, he shared 1/3
of the proceeds from the copra he processed and sold in the market. For
attending to the cows he was paid P500 a year.
Sometime in the early part of 1973, plaintiff was refrained from gathering
nuts from the 10-hectare portion of the 16-hectare part of the plantation
from where he used to gather nuts. He felt aggrieved by the acts of
defendants and he brought the matter to the attention of the Office of
Special Unit in the Office of the President in Malacanang, Manila. This led to
an execution of an agreement, now marked as Exh. D, whereby defendants
agreed, among others, to let plaintiff work on the 16-hectare portion of the
plantation as tenant thereon and that their relationship will be guided by
the provisions of republic Act No. 1199. The Agricultural Tenancy Act of the
Philippines.
Then in July, 1973, he was again refrained from gathering nuts from the 10hectare portion of the plantation with threats of bodily harm if he persists
to gather fruits therefrom. Defendant spouses, the Guerreros, then
assigned defendants Rogelio and Paulino Latigay to do the gathering of the
nuts and the processing thereof into copra. Defendants Guerreros also
caused to be demolished a part of the cottage where plaintiff and his
family lived, thus, making plaintiffs feel that they (defendants) meant
business. Hence, this case for reinstatement with damages.
The lower court formulated four (4) issues by which it was guided in the
resolution of the questions raised by the pleadings and evidence and we
pertinently quote as follows:
(1) whether or not plaintiff is the tenant on the coconut landholding in
question consisting of sixteen (16) hectares;
(2) In The affirmative, whether or not he was unlawfully dispossessed of
ten (10) hectare thereof;
(3) Whether or not the parties are entitled to actual and moral damages,
attorney's fees and litigation expenses.
This petition for review poses the following questions of law:
I
Whether or not with the passage of Presidential Decree 1038 only last
October 21, 1976, Republic Act 6389 otherwise known as the Code of
Agrarian Reforms has repealed in their entirety the Agricultural Tenancy Act
(Republic Act 1199) and the Agricultural Reform Code (Republic Act 3844)
abrogating or nullifying therefore all agricultural share tenancy agreements
over all kinds of lands, as the one involved in the case at bar-over coconut
plantation-and hence, the complaint below as well as the challenged
decision by the courts below, based as they are on such share tenancy
agreements, have lost their validity cessante ratio legis, cessat ipsa lex.
II
Assuming arguendo that said laws have not thus been repealed, is
respondent Benitez hereunder the undisputed fact of the case as found by
the courts below a share tenant within the purview of the said laws, i.e.,
Republic Acts 1199 and 3844, or a mere farmhand or farm worker as such
relationship were extensively discussed in Delos Reyes vs. Espinelli, 30
SCRA 574. (Copied verbatim from Petition, p. 31- rollo)
Petitioner insists in this petition that Benitez was a mere farmhand or

laborer who was dismissed as an employee from the landholding in

question and not ousted therefrom as tenant. Whether a person is a tenant
or not is basically a question of fact and the findings of the respondent
court and the trial court are, generally, entitled to respect and nondisturbance.
The law defines "agricultural tenancy" as the physical possession by a
person of land devoted to agriculture, belonging to or legally possessed by
another for the purpose of production through the labor of the former and
of the members of his immediate farm household in consideration of which
the former agrees to share the harvest with the latter or to pay a price
certain or ascertainable, either in produce or in money, or in both (Section
3, Republic Act 1199, The Agricultural tenancy Act, as amended.)
With petitioner reference to this case, "share tenancy" exists whenever two
persons agree on a joint undertaking for agricultural production wherein
one party furnishes the land and the other his labor, with either or both
contributing any one or several of the items of production, the tenant
cultivating the land with the aid of labor available from members of his
immediate farm household, and the produce thereof to be divided between
the landholder and the tenant in proportion to their respective
contributions (Sec. 4, RA 1199; Sec. 166(25) RA 3844, Agricultural Land
Reform Code).
In contrast, a farmhand or agricultural laborer is "any agricultural salary or
piece worker but is not limited to a farmworker of a particular farm
employer unless this Code expressly provides otherwise, and any individual
whose work has ceased as a consequence of, or in connection with, a
current agrarian dispute or an unfair labor practice and who has not
obtained a substantially equivalent and regular employment" (Sec. 166(15)
RA 3844, Agricultural Land Reform Code).
The petitioners contend that the two courts below applied erroneous
definitions of "tenancy" found in repealed laws. They assert that the
Agricultural Tenancy Act and the Agricultural Land Reform Code have been
superseded by the Code of Agrarian Reforms, Rep. Act 6389, which the trial
court and the Court of Appeals failed to cite and apply.
There is no question that the latest law on land and tenancy reforms seeks
to abolish agricultural share tenancy as the basic relationship governing
farmers and landowners in the country.
On August 8, 1963, Republic Act 3844 abolished and outlawed share
tenancy and put in its stead the agricultural leasehold system. On
September 10, 1971, Republic Act 6389 amending Republic Act 3844
declared share tenancy relationships as contrary to public policy. On the
basis of this national policy, the petitioner asserts that no cause of action
exists in the case at bar and the lower court's committed grave error in
upholding the respondent's status as share tenant in the petitioners'
landholding.
The petitioners' arguments are regressive and, if followed, would turn back
the advances in agrarian reform law. The repeal of the Agricultural Tenancy
Act and the Agricultural Land Reform Code mark the movement not only
towards the leasehold system but towards eventual ownership of land by
its tillers. The phasing out of share tenancy was never intended to mean a
reversion of tenants into mere farmhands or hired laborers with no tenurial
rights whatsoever.

It is important to note that the Agricultural Tenancy Act (RA 1199) and the
Agricultural Land Reform Code (RA 3844) have not been entirely repealed
by the Code of Agrarian Reform (RA 6389) even if the same have been
substantially modified by the latter.
However, even assuming such an abrogation of the law, the rule that the
repeal of a statute defeats all actions pending under the repealed statute is
a mere general principle. Among the established exceptions are when
vested rights are affected and obligations of contract are impaired.
(Aisporna vs. Court of Appeals, 108 SCRA 481).
The records establish the private respondents' status as agricultural
tenants under the legal definitions.
Respondent Benitez has physically possessed the landholding continuously
from 1969 until he was ejected from it. Such possession of longstanding is
an essential distinction between a mere agricultural laborer and a real
tenant within the meaning of the tenancy law (Moreno, Philippine Law
Dictionary, 1972 Edition), a tenant being one who, has the temporary use
and occupation of land or tenements belonging to another (Bouvier's Law
Dictionary, Vol. II, p. 3254) for the purpose of production (Sec. 3, Republic
Act 1199; delos Reyes vs. Espinelli, 30 SCRA 574). Respondent Benitez
lives on the landholding. He built his house as an annex to the petitioner's
copra kiln. A hired laborer would not build his own house at his expense at
the risk of losing the same upon his dismissal or termination any time.
Such conduct is more consistent with that of an agricultural tenant who
enjoys security of tenure under the law.
Cultivation is another important factor in determining the existence of
tenancy relationships. It is admitted that it had been one Conrado
Caruruan, with others, who had originally cleared the land in question and
planted the coconut trees, with the respondent coming to work in the
landholding only after the same were already fruit bearing. The mere fact
that it was not respondent Benitez who had actually seeded the land does
not mean that he is not a tenant of the land. The definition of cultivation is
not limited merely to the tilling, plowing or harrowing of the land. It
includes the promotion of growth and the care of the plants, or husbanding
the ground to forward the products of the earth by general industry. The
raising of coconuts is a unique agricultural enterprise. Unlike rice, the
planting of coconut seedlings does not need harrowing and plowing. Holes
are merely dug on the ground of sufficient depth and distance, the
seedlings placed in the holes and the surface thereof covered by soil. Some
coconut trees are planted only every thirty to a hundred years. The major
work in raising coconuts begins when the coconut trees are already
fruitbearing. Then it is cultivated by smudging or smoking the plantation,
taking care of the coconut trees, applying fertilizer, weeding and watering,
thereby increasing the produce. The fact that respondent Benitez, together
with his family, handles all phases of farmwork from clearing the
landholding to the processing of copra, although at times with the aid of
hired laborers, thereby cultivating the land, shows that he is a tenant, not a
mere farm laborer. (delos Reyes vs. Espinelli, supra Marcelo vs. de Leon,
105 Phil. 1175).
Further indicating the existence of a tenancy relationship between
petitioners and respondent is their agreement to share the produce or
harvest on a "tercio basis" that is, a 1/3 to 2/3 sharing in favor of the

petitioner-landowners. Though not a positive indication of the existence of

tenancy relations perse the sharing of harvest taken together with other
factors characteristic of tenancy shown to be present in the case at bar,
strengthens the claim of respondent that indeed, he is a tenant. The case
of delos Reyes vs. Espinelli (supra) clearly explains the matter thus:
The agricultural laborer works for the employer, and for his labor he
receives a salary or wage, regardless of whether the employer makes a
profit. On the other hand, the share tenant par ticipates in the agricultural
produce. His share is necessarily dependent on the amount of harvest.
Hence, the lower court's computation of damages in favor of respondent
based on the number of normal harvests. In most cases, we have
considered the system of sharing produce as convincing evidence of
tenancy relations.
The petitioners entered into an agreement on May 2, 1973 which in clear
and categorical terms establishes respondent as a tenant, to wit:
AGREEMENT
This agreement entered into by and between Manuel Guerrero hereinafter
referred to as the landowner and Apolinario Benitez hereinafter referred to
as tenant.
xxx xxx xxx
The petitioners, however, contend that the word "tenant" in the
aforequoted agreement was used to mean a hired laborer farm employee
as understood agreed upon by the parties. The fact that their relationship
would be guided by the provisions of Republic Act 1199 or the Agricultural
Tenancy Act of the Philippines militates against such an assertion. It would
be an absurdity for Republic Act 1199 to govern an employer-employee
relationship. If as the petitioners insist a meaning other than its general
acceptation had been given the word "tenant", the instrument should have
so stated '. Aided by a lawyer, the petitioners, nor the respondent could not
be said to have misconstrued the same. In clear and categorical terms, the
private respondent appears to be nothing else but a tenant:
Finally, comes the admission by the petitioners' counsel of the
respondent's status as tenant:
ATTY. ESTEBAN:
Q You said you are living at San Joaquin, who cause the sowing of the
lumber you made as annex in the house?
ATTY. NALUNDASAN
Please remember that under the law, tenant is given the right to live in the
holding in question. We admit him as tenant.
xxxxxxxxx
(Apolinario Benitez on Redirect, TSN, June 25, 1974, pp. 4950).
The respondent's status as agricultural tenant should be without question.
Once a tenancy relationship is established, the tenant has the right to
continue working until such relationship is extinguished according to law.
The Agricultural Tenancy Act of 1954 (Republic Act 1199), the Agricultural
Land Reform Code of 1963 (Republic Act 3844), the Code of Agrarian
Reforms (Republic Act 6389) and Presidential Decree 1038 (Strengthening
the Security of Tenure of Tenant Tillers in Non-Rice/Corn Producing
Agricultural Lands) all provide for the security of tenure of agricultural
tenants. Ejectment may be effected only for causes provided by law, to wit:
l) Violation or failure of the tenant to comply with any of the terms and

conditions of the tenancy contract or any of the provisions of the

Agricultural Tenancy Act;
2) The tenant's failure to pay the agreed rental or to deliver the
landholder's share unless the tenant's failure is caused by a fortuitous
event or force majeure;
3) Use by the tenant of the land for purposes other than that specified by
the agreement of the parties;
4) Failure of the tenant to follow proven farm practices:
5) Serious injury to the land caused by the negligence of the tenant;
6) Conviction by a competent court of a tenant or any member of his
immediate family or farm household of a crime against the landholder or a
member of his immediate family. (Section 50, Rep. Act 1199).
None of the above causes exists in the case at bar. The respondent has
been unlawfully deprived of his right to security of tenure and the Court of
Agrarian Reforms did not err in ordering the reinstatement of respondent
as tenant and granting him damages therefor.
Before we close this case, it is pertinent to reiterate that the respondent's
right as share tenant do not end with the abolition of share tenancy. As the
law seeks to "uplift the farmers from poverty, ignorance and stagnation to
make them dignified, self-reliant, strong and responsible citizens ... active
participants in nation-building", agricultural share tenants are given the
right to leasehold tenancy as a first step towards the ultimate status of
owner-cultivator, a goal sought to be achieved by the government program
of land reform.
It is true that leasehold tenancy for coconut lands and sugar lands has not
yet been implemented. The policy makers of government are still studying
the feasibility of its application and the consequences of its
implementation. Legislation still has to be enacted. Nonetheless, wherever
it may be implemented, the eventual goal of having strong and
independent farmers working on lands which they own remains. The
petitioners' arguments which would use the enactment of the Agrarian
Reform Code as the basis for setting back or eliminating the tenurial rights
of the tenant have no merit.
WHEREFORE, the petition is DISMISSED for lack of merit. The decision of
the appellate court is AFFIRMED. No costs.
SO ORDERED.
THIRD DIVISION
G.R. No. 77830 February 27, 1990
VICTOR TALAVERA and VISITACION AGUSTIN TALAVERA, petitioners,
vs.
HON. COURT OF APPEALS and JOSE LAXAMANA, respondents.
Wilfredo I. Untalan counsel for petitioners.
Bureau of Agrarian Legal Assistance for private respondent.
GUTIERREZ, JR., J.:
The Court is asked to examine whether or not the Court of Appeals
committed reversible error in its finding that there was no voluntary
surrender of the landholding in question on the part of respondent
Laxamana as tenant.
This petition for review on certiorari assails the decision of the respondent

appellate court which affirmed in toto the judgment rendered by the

Regional Trial Court of the Third Judicial Region, Branch LXVI, Capas, Tarlac
on July 21, 1986.
The dispositive portion of the trial court's decision reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and
ordering the defendants:
(1) To reinstate Jose Laxamana as their tenant on the landholding in
question;
(2) To pay him the sum of FIVE THOUSAND PESOS (P5,000.00) value of 50
cavans of palay at the rate of P100.00 per cavan as his share for the
agricultural year 1984-85;
(3) To continue paying him the same amount as damages, every
agricultural year thereafter until his actual reinstatement. (CA Decision, p.
2; Rollo, p. 16)
The facts pertinent to the case at bar are as follows:
On July 10, 1984, an action for recovery of possession was instituted by the
private respondent against the petitioners over a parcel of agricultural land
with an area of 21,081 square meters located at Brgy. Sto. Domingo 11,
Sitio Tambo, Capas, Tarlac.
The complaint alleged, among others, that respondent Laxamana had been
a bonafide tenant of the aforesaid parcel of land since 1958 until the
petitioners took possession thereof sometime in 1984; that respondent
Laxamana had been in continuous possession and cultivation of the said
landholding since 1958 but the petitioners, for unknown reasons and
without the knowledge of respondent Laxamana, planted palay thereon in
1984 through force and intimidation after plowing and harrowing were
done by respondent Laxamana; and that due to the petitioners' illegal
actions, respondent Laxamana suffered damages in the amount of P500.00
and the price equivalent to sixty-five (65) cavans of palay per agricultural
year from the time of his dispossession until his reinstatement as tenant
over the landholding in question.
In their answer, the petitioners counter-alleged, among others, that their
tenancy relationship with respondent Laxamana was terminated pursuant
to a document captioned "Casunduan" executed on March 30, 1973
whereby the latter sold his rights and interests over the agricultural
landholding under litigation for a consideration of P1,000.00; that
respondent Laxamana was not actually a tenant of the petitioners and
whatever tenancy rights the former had exercised over the landholding in
question were voluntarily surrendered by him upon the execution of the
aforesaid document; that respondent Laxamana had only himself to blame
for the litigation expenses resulting from his baseless and patently
frivolous complaint; and that respondent Laxamana was no longer entitled
to the amount equivalent to 65 cavans of palay per agricultural year as
claimed since he was no longer a tenant of the petitioners.
After trial, the private respondent obtained a favorable judgment from
which the petitioners appealed to the respondent Court.
In a decision promulgated on March 3, 1987, the Court of Appeals affirmed
the lower court's holding that the Casunduan even if assumed to be valid
did not constitute "voluntary surrender" as contemplated by law, hence,
respondent Laxamana ought to be reinstated as tenant of the petitioners'
landholding.

Consequently, this petition was filed to seek a reversal of the decision of

the appellate court. According to the petitioners, the Court of Appeals
erred:
I
IN HOLDING THAT PRIVATE RESPONDENT DID NOT VOLUNTARILY
SURRENDER THE LANDHOLDING IN QUESTION.
II
IN OVERLOOKING THE PROBATIVE VALUE OF A WRITTEN INSTRUMENT
ENTITLED 'CASUNDUAN' WHICH SHOWS VOLUNTARY SURRENDER. (Rollo, p.
4)
The petitioners bolster their claim that respondent Laxamana is no longer
their tenant over the landholding in question by invoking the rule on parol
evidence with respect to the probative value of the "Casunduan" executed
by respondent Laxamana on March 30, 1973. They further argue that the
execution of the "Casunduan" clearly showed the intention of respondent
Laxamana to surrender whatever rights he had as tenant over the said
landholding. Hence, we are presented with the issue of whether or not by
virtue of the "Casunduan" dated March 30, 1973, respondent Laxamana as
tenant is deemed to have surrendered voluntarily the subject landholding
to its owners the petitioners.
The evidence on record and the petitioners' arguments are not enough to
overcome the rights of the private respondent provided in the Constitution
and agrarian statutes which have been upheld by this Court.
The very essence of agricultural tenancy lies in the cardinal rule that an
agricultural tenant enjoys security of tenurial status. The Code of Agrarian
Reforms of the Philippines (Republic Act No. 3844, as amended) specifically
enumerates the grounds for the extinguishment of agricultural leasehold
relations. Section 8 of the said Code provides:
Extinguishment of agricultural leasehold relation. The agricultural
leasehold relation established under this Code shall be extinguished by:
(1) Abandonment of the landholding without the knowledge of the
agricultural lessor;
(2) Voluntary surrender of the land holding by the agricultural lessee,
written notice of which shall be served three months in advance; or
(3) Absence of the persons under Section rune to succeed to the lessee, in
the event of death or permanent incapacity of the lessee.
The petitioners invoke voluntary surrender under Paragraph 2 of Section 8
as the reason for the end of the tenancy relationship.
Voluntary surrender, as a mode of extinguishment of tenancy relations,
does not require any court authorization considering that it involves the
tenant's own volition. (see Jacinto v. Court of Appeals, 87 SCRA 263
[1978]). To protect the tenant's right to security of tenure, voluntary
surrender, as contemplated by law, must be convincingly and sufficiently
proved by competent evidence. The tenant's intention to surrender the
landholding cannot be presumed, much less determined by mere
implication. Otherwise, the right of a tenant to security of tenure becomes
an illusory one.
Standing by itself, the March 30, 1973 Casunduan indicates, as contended
by the petitioners, a voluntary relinquishment of tenancy rights. It states
that on his own initiative, Jose Laxamana went to the Talaveras and
requested that he be allowed to sell his "puesto cung asican" or "the plot I

am farming" to the couple. A subscribing witness, Ermela Lumanlan

testified on the voluntary sale of tenancy rights for P1,000.00, her signing
as a witness at the bottom of the contract, and Laxamana's signing the
document.
The argument of the private respondent that under Section 28 of the
Agrarian Reform Code, a voluntary surrender to be valid must be "due to
circumstances more advantageous to him and his family" is double-edged.
There appears no question that Laxamana needed money to pay for the
expenses incident to the illness of his wife which led to her death. The
money was to his advantage.
The basic issue in this case is-what did Laxamana give up in return for the
P1,000.00? The case is marked by poor handling at the trial stage and it is
not clear whether or not the P1,000.00 was a result of the usual
paternalistic arrangements between landlords and tenants where the latter
meekly approach the landlords in their hours of need or something else.
In the first place, the agreement was prepared by petitioner Visitacion A.
Talavera. Laxamana could hardly sign his own name. He was clearly at a
disadvantage in the execution of the contract and the wording of the
agreement. The intention to give up the landholding must be gleaned from
evidence in addition to the document which was signed by an ignorant and
illiterate peasant in an hour of emotional stress and financial need.
Second, and most important, Laxamana continued to work on the farm
from 1973 up to 1984 when the petitioners ejected him. As stated by the
appellate court, why did it take the petitioners more than ten years to
enforce the Casunduan?
The Talaveras claim that they cultivated the land themselves from 1973 to
1984 when the complaint was filed. This claim is belied by Exhibits A and
B. In Exhibit A, barangay captain Francisco Manayang reports to the team
leader of the Ministry of Agrarian Reform that, per his own personal
knowledge, Jose Laxamana has been tilling the disputed land since 1958.
Exhibit B is an affidavit to the same effect by Manayang, Mr. Porfirio
Manabat who is president of the Agrarian Reform Beneficiaries Association,
and a certain Romeo dela Cruz all of whom are residents of the barangay
where the land is located. Significantly, Laxamana is a resident of Sitio
Tambo, Barangay Sto. Domingo II where the disputed land is situated while
the Talaveras reside in another barangay, Arangureng, of Capas, Tarlac. We
see no reason why the factual findings of the trial court and the appellate
court should be reversed insofar as the continuous cultivation from 1973 to
1984 is concerned.
Third, it is not shown why Laxamana should voluntarily give up his sole
source of livelihood even if he needed money to pay off his debts. Or what
he did from 1973 to 1984 if the claim of the Talaveras that they worked the
land themselves is correct. We are more inclined to believe that Laxamana
was forced by circumstances to sign something he did not fully understand
and then went right back to the farm and continued to work on it until
1984.
It is true that Cristobal Gamido, Jr., officer-in-charge of the Agrarian Reform
Team issued on May 8, 1986 a certification that the contested land is not
tenanted. However, the basis for the certification whether or not Mr.
Gamido merely read the Casunduan literally is not shown. It cannot
overcome the more convincing evidence of persons actually residing where

the land is located.

Tenancy relations cannot be bargained away except for the strong reasons
provided by law which must be convincingly shown by evidence in line with
the State's policy of achieving a dignified existence for the small farmers
free from pernicious institutional restraints and practices (Sec. 2 [2], Code
of Agrarian Reforms).
We, therefore, rule that except for compelling reasons clearly proved the
determination that a person is a tenant-farmer, a factual conclusion made
by the trial court on the basis of evidence directly available to it, will not be
reversed on appeal and will be binding on us. (see Macaraeg v. Court of
Appeals, G.R. No. 48008, January 20, 1989; Co v. Intermediate Appellate
Court, 162 SCRA 390 [1988]).
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby
DISMISSED. The decision of the Court of Appeals dated March 3, 1987 is
AFFIRMED.
SO ORDERED.
THIRD DIVISION
G.R. No. 88113 October 23, 1992
SPOUSES TITUS L. ENDAYA and GLENDA TRINIDAD; SPOUSES RICO
L. ENDAYA and NANETTE AQUINO; and SPOUSES JOSEPHINE L.
ENDAYA and LEANDRO BANTUG, petitioners,
vs.
COURT OF APPEALS and PEDRO FIDELI, respondents.
ROMERO, J.:
Assailed in this petition for review on certiorari is the decision of the Court
of Appeals in CA-.G.R. No. 15724 dated April 26, 1989 1 reversing the
judgment of the Regional Trial Court of Tanauan, Batangas (Branch 6) in
Civil Case No. T-430 2 and holding that private respondent is an agricultural
lessee in the land of petitioner whose security of tenure must be respected
by the latter.
The antecedent facts are as follows:
The Spouses Natividad Trinidad and Cesar San Diego owned a piece of
agricultural land consisting of 20,200 square meters situated at San
Pioquinto, Malvar, Batangas, devoted to rice and corn. As far back as 1934,
private respondent Fideli has been cultivating this land as a tenant of the
Spouses respondent Fideli has been cultivating this land as a tenant of the
Spouses San Diego under a fifty-fifty (50-50) sharing agreement. This fact,
petitioners do not dispute.
On May 2, 1974, a lease contract was executed between the Spouses San
Diego and one Regino Cassanova for a period of four years from May 1974
up to May 1978. 3 The lease contract obliged Cassanova to pay P400.00
per hectare per annum and gave him the authority to oversee the planting
of crops on the land. 4 Private respondent signed this lease contract as one
of two witnesses. 5
The lease contract was subsequently renewed to last until May 1980 but
the rental was raised to P600.00. Again, private respondent signed the
contract as witness. 6
During the entire duration of the lease contract between the Spouses San

Diego and Cassanova, private respondent continuously cultivated the land,

sharing equally with Cassanova the net produce of the harvests.
On January 6, 1980, the Spouses San Diego sold the land to petitioners for
the sum of P26,000.00. The sale was registered with the Register of Deeds
of Batangas and a Transfer Certificate of Title was duly issued on January 7,
1981. 7 Private respondent continued to farm the land although petitioners
claim that private respondent was told immediately after the sale to vacate
the land. 8 In any case, it is undisputed that private respondent deposited
with the Luzon Development Bank an amount of about P8,000.00 as partial
payment of the landowner's share in the harvest for the years 1980 until
1985. 9
Due to petitioners persistent demand for private respondent to vacate the
land, private respondent filed in April 1985 a complaint 10 with the Regional
Trial Court of Tanauan, Batangas praying that he be declared the
agricultural tenant of petitioners.
After trial, the trial court decided in favor of petitioners by holding that
private respondent is not an agricultural lessee of the land now owned by
petitioners. The dispositive portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered dismissing plaintiff's complaint
to be declared a tenant of the landholding consisting of 20,200 square
meters, located at San Pioquinto, Malvar, Batangas, and owned by the
defendants; ordering Pedro Fideli to vacate the landholding deliver
possession thereof to the defendants; and ordering the amount of
P8,000.00 deposited under Account No. 2940029826 Civil Case No. T-430
to be withdrawn and delivered to the defendants, No. pronouncement as to
costs.
On appeal, the Court of Appeals reversed the RTC decision and declared
private respondent to be the agricultural lessee of the subject landholding.
Hence, this petition wherein private respondent's status as an agricultural
lessee and his security of tenure as such are being disputed by petitioners.
Petitioners impugn the Court of Appeals' declaration that private
respondent is an agricultural lessee of the subject landholding contending
that when the original landowners, the Spouses San Diego, entered into a
lease contract with Regino Cassanova, the agricultural leasehold
relationship between the Spouses San Diego and private respondent, the
existence of which petitioners do not dispute, was thereby terminated.
Petitioners argue that a landowner cannot have a civil law lease contract
with one person and at the same time have an agricultural leasehold
agreement with another over the same land. It is further argued that
because private respondent consented to the lease contract between the
Spouses San Diego and Cassanova, signing as he did the lease agreement
and the renewal contract as witness thereof, private respondent has
waived his rights as an agricultural lessee.
These contentions are without merit.
R.A. No. 3844 (1963), as amended By R.A. No. 6839 (1971), which is the
relevant law governing the events at hand, abolished share tenancy
throughout the Philippines from 1971 and established the agricultural
leasehold system by operation of law. 11 Section 7 of the said law gave
agricultural lessees security of tenure by providing the following: "The
agricultural leasehold relation once established shall confer upon the
agricultural lessee the right to continue working on the landholding until

such leasehold relation is extinguished. The agricultural lessee shall be

entitled to security of tenure on his landholding and cannot be ejected
therefrom unless authorized by the Court for causes herein provided." 12
The fact that the landowner entered into a civil lease contract over the
subject landholding and gave the lessee the authority to oversee the
farming of the land, as was done in this case, is not among the causes
provided by law for the extinguishment of the agricultural leasehold
relation. 13 On the contrary, Section 10 of the law provides:
Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of
Period, etc. The agricultural leasehold relation under this code shall not
be extinguished by mere expiration of the term or period in a leasehold
contract nor by the sale, alienation or transfer of the legal possession of
the landholding. In case the agricultural lessor sells, alienates or transfers
the legal possession of the landholding, the purchaser or transferee thereof
shall be subrogated to the rights and substituted to the obligations of the
agricultural lessor.
Hence, transactions involving the agricultural land over which an
agricultural leasehold subsists resulting in change of ownership, e.g., sale,
or transfer of legal possession, such as lease, will not terminate the right of
the agricultural lessee who is given protection by the law by making such
rights enforceable against the transferee or the landowner's successor in
interest. 14
Illustrative of the legal principles outlined above is Catorce v. Court of
Appeals 15 where the person holding a mortgage over the farm land subject
of an agricultural leasehold took possession thereof pursuant to the
mortgage and ousted the agricultural lessee. Upon complaint for
reinstatement filed by the agricultural lessee, the then Court of Agrarian
Relations ordered the mortgagee to deliver possession over the land to the
agricultural lessee but his decision was reversed by the Court of Appeals.
In reversing the Court of Appeals' judgment and reinstating the Agrarian
Court's decision, the Court, through Justice Melencio-Herrera, noted,
among other considerations, that "tenants are guaranteed security of
tenure, meaning, the continued enjoyment and possession of their
landholding except when their dispossession had been authorized by virtue
of a final and executory judgment, which is not so in the case at bar." 16
Implicit in the decision is the recognition that the transfer of possession to
the mortgage did not terminate the agricultural leasehold nor prejudice the
security of tenure of the agricultural lessee.
Closer, to although not identical with the factual setting of the case at bar
is Novesteras v. Court of Appeals. 17 Petitioner in said case was a share
tenant of the respondent over two parcels of land. Respondent entered into
a contract of civil lease with Rosenda Porculas for a term of three years.
Porculas did not farm the land himself but left it to petitioner to till the
land. After the expiration of the lease between respondent and Porculas,
petitioner entered into an agreement denominated as a contract of civil
lease with respondent. On expiration of this lease contract, respondent
denied petitioner possession over the land. Resolving the rights and
obligations of the parties, the Court, through Justice Paras, held that the
petitioner therein became an agricultural tenant of respondent by virtue of
R.A. No. 3844 (1963), as amended by R.A. No 6839 (1971). The lease
contract between the respondent and Porculas did not terminate the

agricultural leasehold relationship between petitioner and respondent. If at

all, the said lease agreement, coupled by the fact that Porculas allowed
petitioner to continue cultivating in his capacity as tenant of the subject
landholding, served to strengthen petitioner's security of tenure as an
agricultural tenant of the farmland in question. Accordingly, the
subsequent contract between petitioner and respondent denominated as a
contract of civil lease was held by the Court to be in fact an agricultural
leasehold agreement.
Again, in Coconut Cooperative Marketing Association, Inc. (COCOMA) v.
Court of Appeals, 18 it was held that the agricultural leasehold is preserved,
notwithstanding the transfer of the legal possession of the subject
landholding, with the transferee, COCOMA in that case, being accountable
to the agricultural lessees for their rights. The Court, through Justice
Padilla, summarized the rule as follows:
There is also no question that, in this case, there was a transfer of the legal
possession of the land from one landholder to another (Fule to petitioner
COCOMA). In connection therewith, Republic Act 3844, Sec. 10 states:
Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of
Period, etc. The agricultural leasehold relation under this Code shall not
be extinguished by mere expiration of the term or period in a leasehold
contract nor by the sale, alienation or transfer of the legal possession of
the landholding. In case the agricultural lessor sells, alienates or transfers
the legal possession of the landholding, purchaser or transferee thereof
shall be subrogated to the rights and substituted to the obligations of the
agricultural lessor.
Further, in several cases, this Court sustained the preservation of the
landholder-tenant relationship, in cases of transfer of legal possession:
. . . in case of transfer or in case of lease, as in the instant case, the
tenancy relationship between the landowner and his tenant should be
preserved in order to insure the well-being of the tenant or protect him
from being unjustly dispossessed by the transferee or purchaser of the
land; in other words, the purpose of the law in question is to maintain the
tenants in the peaceful possession and cultivation of the land or afford
them protection against unjustified dismissal from their holdings. (Primero
v. CAR, 101 Phil. 675);
It is our considered judgment, since the return by the lessee of the leased
property to the lessor upon the expiration of the contract involves also a
transfer of legal possession, and taking into account the manifest intent of
the lawmaking body in amending the law, i.e., to provide the tenant with
security of tenure in all cases of transfer of legal possession, that the
instant case falls within and is governed by the provisions of Section 9 of
Republic Act 1199, as amended by Republic Act 2263. (Joya v. Pareja, 106
Phil, 645).
. . . that the tenant may proceed against the transferee of the land to
enforce obligation incurred by the former landholder such obligation . . .
falls upon the assignee or transferee of the land pursuant to Sec. 9
abovementioned. Since respondent are in turn free to proceed against the
former landholder for reimbursement, it is not iniquitous to hold them
responsible to the tenant for said obligations. Moreover, it is the purpose of
Republic Act 1199, particularly Sec. 9 thereof, to insure that the right of the
tenant to receive his lawful share of the produce to receive this lawful

share of the produce of the land is unhampered by the transfer of said land
from one landholder to another. (Almarinez v. Potenciano, 120 Phil.
1154.). 19
In the instant case, private respondent has been cultivating the subject
farm landholding with a fifty-fifty (50-50) sharing arrangement with the
Spouses San Diego, petitioners' predecessors-in-interest. The passage of
R.A. 6839 in 1971, amending R.A. 3844 (1963), secured to private
respondent all the rights pertaining to an agricultural lessee. The execution
of a lease agreement between the Spouses San Diego and Regino
Cassanova in 1974 did not terminate private respondent's status as an
agricultural lessee. The fact that private respondent knew of, and
consented to, the said lease contract by signing as witness to the
agreement may not be construed as a waiver of his rights as an
agricultural lessee. On the contrary, it was his right to know about the
lease contract since, as a result of the agreement, he had to deal with a
new person instead of with the owners directly as he used to. No provision
may be found in the lease contract and the renewal contract even
intimating that private respondent has waived his rights as an agricultural
lessee. Militating against petitioners' theory that the agricultural leasehold
was terminated or waived upon the execution of the lease agreement
between the San Diegos and Cassanova is the fact the latter desisted from
personally cultivating the land but left it to private respondent to undertake
the farming, the produce of the land being shared between Cassanova and
private respondent, while the former paid P400.00 and later P600.00 per
hectare per annum to the San Diegos, as agreed upon in the lease
contract.
Petitioners, however, insist that private respondent can no longer be
considered the agricultural lessee of their farm land because after they
purchased the land from the Spouses San Diego in 1980, private
respondent did not secure their permission to cultivate the land as
agricultural lessee.
It is true that the Court has ruled that agricultural tenancy is not created
where the consent the true and lawful owners is absent. 20 But this doctrine
contemplates a situation where an untenanted farm land is cultivated
without the landowner's knowledge or against her will or although
permission to work on the farm was given, there was no intention to
constitute the worker as the agricultural lessee of the farm land. 21 The rule
finds no application in the case at bar where the petitioners are
successors-in-interest to a tenanted land over which an agricultural
leasehold has long been established. The consent given by the original
owners to constitute private respondent as the agricultural lessee of the
subject landholding binds private respondents whom as successors-ininterest of the Spouses San Diego, step into the latter's shows, acquiring
not only their rights but also their obligations. 22
Contradicting their position that no agricultural leasehold exists over the
land they acquired from the Spouses San Diego, petitioners also pray for
the termination of the tenancy of private respondent allegedly due to: (a)
non-payment of the agricultural lease rental; and (b) animosity between
the landowners and the agricultural lessee. The Court, however, observes
that nowhere in the petitioners' Answer to private respondent's Complaint
or in the other pleadings filed before the trial court did petitioners allege

grounds for the termination of the agricultural leasehold. Well-settled is the

rule that issues not raised in the trial court cannot be raised for the first
time on appeal. 23
In fine, the Court, after a painstaking examination of the entire records of
the case and taking into account the applicable law, as well as the relevant
jurisprudence, rules that private respondent is the agricultural lessee over
the land owned by petitioners. As such, private respondent's security of
tenure must be respected by petitioners.
The Court, however, notes from the records of the case that private
respondent has unilaterally decided to pay only 25% of the net harvests to
petitioners. 24 Since the agreement of private respondent with the Spouses
San Diego, the original owners, was for a fifty-fifty (50-50) sharing of the
net produce of the land, the same sharing agreement should be
maintained between petitioners and private respondents, without prejudice
to a renegotiation of the terms of the leasehold agreement.
WHEREFORE, premises considered, the Petition is DISMISSED and the
decision of the Court of Appeals AFFIRMED. Private respondent is hereby
ordered to pay the back rentals from 1980 until 1992 plus interest at the
legal rate. An accounting of the production of the subject landholding is to
be made by private respondent to the Regional Trial Court of Tanauan,
Batangas which shall determine the amount due to petitioners based on
the rate ordered above.
SO ORDERED.
SECOND DIVISION
[G.R. No. 135999. April 19, 2002]
MILESTONE REALTY and CO., INC. and WILLIAM L. PEREZ,
petitioners, vs. HON. COURT OF APPEALS, DELIA RAZON PEA and
RAYMUNDO EUGENIO, respondents.
DECISION
QUISUMBING, J.:
Petitioners Milestone Realty & Co., Inc. (Milestone for brevity) and
William Perez seek the reversal of the decision [if !supportFootnotes][1][endif] dated May
29, 1998 of the Court of Appeals in CA-G.R. SP NO. 39987. Said decision
affirmed that of the Department of Agrarian Reform Adjudication Board
(DARAB),[if !supportFootnotes][2][endif] which had declared respondent Delia Razon Pea
as the bona fide tenant of a lot in Bulacan, and voided the sale of said lot
thereby reversing the decision of the Provincial Agrarian Reform
Adjudicator (PARAD).[if !supportFootnotes][3][endif]
The facts as culled from the records are as follows:
Spouses Alfonso Olympia and Carolina Zacarias and Spouses Claro
Zacarias and Cristina Lorenzo were the co-owners of an agricultural land
identified as Lot 616 of the Malinta Estate. Said lot has an area of 23,703
square meters, covered by Transfer Certificate of Title (TCT) No. 26019,
located at Karuhatan, Valenzuela, Bulacan, now Valenzuela City. Eventually,
Carolina became the owner of the property by virtue of a Deed of
Extrajudicial Settlement executed on October 17, 1976 by the heirs of
Alfonso Olympia, one of whom is Francisco Olympia, on their respective
shares after Alfonsos death and by an Affidavit of Settlement executed on
June 24, 1992 by the spouses Claro and Cristina Zacarias on their shares in
the property.

Meanwhile, Anacleto Pea who was a tenant of the property and a

holder of a Certificate of Agricultural Leasehold issued on February 23,
1982, had a house constructed on the lot. He had several children on the
first marriage, among whom are Emilio Pea and Celia Segovia, who also
had their houses constructed on the property. On February 4, 1986,
Anacleto, who was already 78 years old and a widower, married Delia
Razon, then only 29 years old. On February 17, 1990, Anacleto died
intestate and was survived by Delia and his children in his first marriage,
including Emilio.
Emilio and Delia, the latter with the help of respondent Raymundo
Eugenio, her son-in-law, continued tilling and cultivating the property. On
January 22, 1992, Emilio signed a handwritten declaration that he was the
tenant in the land and he was returning the landholding to Carolina
Zacarias in consideration of the sum of P1,500,000 as disturbance
compensation. He initially opted for a 1,000 square meter homelot but
later changed his mind. After receipt of the money, he executed a
Katibayang Paglilipat ng Pag-mamay-ari.
In the meantime, petitioner William Perez, Joseph Lim, Willy Lim,
Winston Lim, Edgar Lim, and Jaime Lim established Milestone as
incorporators, in order to acquire and develop the aforesaid property and
the adjacent parcel, Lot No. 617 of the Malinta Estate.
On July 30, 1992, Carolina Zacarias executed a deed of sale
transfering the Lot No. 616 to petitioner Milestone for P7,110,000. TCT No.
26019 was cancelled and in lieu thereof, TCT No. 25433 was issued in the
name of Milestone. On the same date, the adjoining Lot No. 617 covered by
TCT No. V-25431 was issued under the name of petitioner William Perez
who subsequently sold the same to Milestone on the basis of which TCT No.
V-26481 was issued to it. Thus, Milestone became the owner of the
adjoining lots, Lot Nos. 616 and 617 of the Malinta Estate with a total area
of three (3) hectares. Development of the property then commenced.
On October 13, 1992, private respondents Delia Razon Pea and
Raymundo Eugenio filed a complaint against Emilio Pea, Carolina Zacarias
and her brother Francisco Olympia, and William Perez with the PARAD,
which was amended on January 6, 1993 to implead Milestone as
respondent, praying inter alia to declare as null and void the sale by
Carolina to Perez and by the latter to Milestone, and to recognize and
respect the tenancy of private respondents Delia and Raymundo.
In her answer, Carolina Zacarias declared that she chose Emilio Pea
as her tenant-beneficiary on the said property within 30 days after the
death of Anacleto, conformably with Section 9 of Republic Act No. 3844. [if !
supportFootnotes][4][endif]
On July 28, 1993, the PARAD rendered a decision
dismissing the complaint as follows:[if !supportFootnotes][5][endif]
WHEREFORE, upon the foregoing premises, judgment is hereby rendered:
1. Dismissing the instant complaint;
2. Dissolving the writ of Preliminary Injunction issued on May 24, 1993;
3. Directing the Cashier of the DAR Regional Office at Pasig, Metro Manila
to release to the Petitioners or their duly authorized representative, the
cash bond posted in the amount of Fifteen Thousand Pesos [P15,000.00].
4. No pronouncement as to costs.
SO ORDERED.
In the decision, the PARAD ruled that the order of preference cited in

Section 9 of Republic Act 3844 is not absolute and may be disregarded for
valid cause.[if !supportFootnotes][6][endif] It also took note that Emilios two siblings
have openly recognized Emilio as the legitimate successor to Anacletos
tenancy rights.[if !supportFootnotes][7][endif]
Delia Razon Pea and Raymundo Eugenio appealed from the PARADs
decision to the DARAB. On September 5, 1995, the DARAB reversed the
decision of PARAD, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, the instant appeal is hereby GRANTED.
The Decision dated July 28, 1993 is REVERSED.
Judgment is issued:
1. Declaring Delia Razon Pea the bona-fide tenant over the landholding in
question;
2. Declaring the series of purchase and sale of the landholding in question
as illegal, hence, null and void;
3. Directing the Register of Deeds to cancel TCT No. V-26485 and all
subsequent titles obtained thereafter over the landholding named under
William L. Perez and Milestone Realty and Co., Inc.;
4. Allowing Delia Razon Pea to exercise her right of redemption over the
land within the prescribed period granted by law;
5. Enjoining all Respondents-Appellees to desist from further disturbing
Delia Razon Pea in the peaceful possession and cultivation of the land;
6. Directing the DAR-DOJ Task Force on Illegal Conversion to file appropriate
charges before the Special Agrarian Court as regards the criminal aspect of
this case.
SO ORDERED. [if !supportFootnotes][8][endif]
In reversing the PARADs decision, the DARAB noted that Carolinas
affidavit did not show any categorical admission that she made her choice
within the one (1) month period except to state that when Anacleto died,
the right of the deceased was inherited by Emilio Pea which could only
mean that she recognized Emilio Pea by force of circumstance under a
nebulous time frame.[if !supportFootnotes][9][endif]
In a petition for review to the Court of Appeals, the latter affirmed
the DARABs decision, thus:
We are convinced, beyond cavil, in the present recourse, that the
Petitioners Carolina Olympia and Francisco Olympia failed to choose, within
the statutory period therefor, any tenant in substitution of Anacleto Pea,
the erstwhile deceased tenant on the landholding, and that, without prior
or simultaneous notice to Private Respondent Delia Pea, the Petitioners
made their choice of Petitioner Emilio Pea as substitute tenant only in
January, 1992, after they had agreed to sell the property to the Petitioner
Milestone Realty & Co., Inc.
IN SUM, then, We find no reversible error committed by the DARAB under
its oppunged Decision.
IN THE LIGHT OF ALL THE FOREGOING, the Petition is denied due course
and is hereby dismissed. The appealed Decision is hereby AFFIRMED. With
costs against the Petitioners.
SO ORDERED.[if !supportFootnotes][10][endif]
Subsequently, petitioners filed a Motion for Reconsideration of the
CAs decision. Said motion was denied on October 12, 1998.
Hence, this petition assigning the following errors allegedly
committed by respondent Court of Appeals:[if !supportFootnotes][11][endif]

I
THE RESPONDENT COURT OF APPEALS ERRED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN THE
CONSTRUCTION AND APPLICATION OF SECTION 9 OF REPUBLIC ACT 3844
BY HOLDING THAT PRIVATE RESPONDENT DELIA RAZON PEA HAS
SUCCEEDED TO HER DECEASED HUSBANDS LEASEHOLD RIGHT BY
OPERATION OF LAW.
II
THE RESPONDENT COURT OF APPEALS ERRED IN DECLARING THE SALE BY
THE LANDOWNER TO PETITIONER WILLIAM L. PEREZ, AND BY THE LATTER
TO PETITIONER MILESTONE REALTY & CO., INC. AS NULL AND VOID, AND IN
ORDERING THE CANCELLATION OF THEIR RESPECTIVE TITLES. [if !supportFootnotes]
[12][endif]

These two assigned errors tendered issues articulated in petitioners

memorandum as follows:
1. Whether or not Emilio Pea was validly chosen by Carolina Zacarias
as the new tenant over the landholding under dispute within one (1) month
from the death of his father Anacleto, as prescribed by Section 9 of R.A.
3844, as amended;
2. Whether or not Delia Razon Pea was a bona fide or de jure tenant
over the landholding in question to be accorded the alleged rights to
security of tenure and of redemption under the agrarian reform laws;
3. Whether or not Emilio Pea validly renounced or otherwise caused
the extinction of his tenancy rights over the subject property;
4. Whether or not the sales of the subject property by Carolina
Zacarias to William Perez and by the latter to Milestone were null and void,
hence merited the declaration of nullity and cancellation of the
respondents respective titles;
5. Whether or not illegal conversion was committed by Milestone.
In sum, we find the following relevant issues now for our resolution:
1. Whether or not Delia Razon Pea has a right of first priority over
Emilio Pea in succeeding to the tenancy rights of Anacleto over the subject
landholding.
2. Whether or not the sales of the subject lots by Carolina Zacarias
to William Perez and then to Milestone are null and void.
At the outset, it bears stressing that there appears to be no dispute
as to tenancy relationship between Carolina Zacarias and the late Anacleto
Pea. The controversy centers on who is the rightful and legal successor to
Anacletos tenancy rights. Relevant to the resolution of the first issue is
Section 9 of Republic Act No. 3844, otherwise known as the Code of
Agrarian Reforms, which provides as follows:
SEC. 9. Agricultural Leasehold Relation Not Extinguished by Death or
Incapacity of the Parties. - In case of death or permanent incapacity of the
agricultural lessee to work his landholding, the leasehold shall continue
between the agricultural lessor and the person who can cultivate the
landholding personally, chosen by the agricultural lessor within one month
from such death or permanent incapacity, from among the following: (a)
the surviving spouse; (b) the eldest direct descendant by consanguinity; or
(c) the next eldest descendant or descendants in the order of their age:
Provided, That in case the death or permanent incapacity of the
agricultural lessee occurs during the agricultural year, such choice shall be

exercised at the end of that agricultural year: Provided, further, That in the
event the agricultural lessor fails to exercise his choice within the periods
herein provided, the priority shall be in accordance with the order herein
established.
In case of death or permanent incapacity of the agricultural lessor, the
leasehold shall bind his legal heirs.
Petitioners contend that Section 9 does not require any form or
manner in which the choice should be made. [if !supportFootnotes][13][endif] They assail
the Court of Appeals for heavily relying on the findings of the DARAB that
there was no convincing proof that Carolina exercised her right to choose
from among the qualified heirs a replacement for the deceased tenant, [if !
supportFootnotes][14][endif]
when in fact a choice was made. In support thereof,
petitioners invoke Carolinas affidavit and her Answer to the complaint in
the PARAD, both dated November 16, 1992 where Carolina recognized
Emilio Pea as the successor to Anacletos tenancy rights. Petitioners argued
that Delia could not have qualified as a successor-tenant to Anacleto due
to lack of personal cultivation. [if !supportFootnotes][15][endif] Further, she had not been
paying rent on the land.
Responding to petitioners contentions, respondents argue that
Carolina did not choose the successor to Anacletos tenancy rights within
one month from the death of Anacleto. Respondents note that it was only
after the lapse of two (2) years from the death of Anacleto on February 17,
1990, that both Carolina and Emilio claimed in their respective affidavits
that Emilio inherited the rights of Anacleto as a tenant. [if !supportFootnotes][16][endif]
According to respondents, such inaction to make a choice within the time
frame required by law is equivalent to waiver on Carolinas part to choose a
substitute tenant.[if !supportFootnotes][17][endif] Also, it appears that Carolina made
the choice in favor of Emilio Pea only by force of circumstance, i.e., when
she was in the process of negotiating the sale of the land to petitioners
Perez and Milestone.[if !supportFootnotes][18][endif]
On this score, we agree with private respondents. As found by both
the DARAB and the Court of Appeals, Carolina had failed to exercise her
right to choose a substitute for the deceased tenant, from among those
qualified, within the statutory period. [if !supportFootnotes][19][endif] No cogent reason
compels us to disturb the findings of the Court of Appeals. As a general
rule, findings of fact of the Court of Appeals are final and conclusive and
cannot be reviewed on appeal by the Supreme Court, provided they are
borne out by the record or based on substantial evidence. [if !supportFootnotes][20]
[endif]

Section 9 of Republic Act No. 3844 is clear and unequivocal in

providing for the rules on succession to tenancy rights. A close
examination of the provision leaves no doubt as to its rationale of providing
for continuity in agricultural leasehold relation in case of death or
incapacity of a party. To this end, it provides that in case of death or
permanent incapacity of the agricultural lessee to work his landholding, the
leasehold shall continue between the agricultural lessor and the person
who can cultivate the landholding personally. In the same vein, the
leasehold shall bind the legal heirs of the agricultural lessor in case of
death or permanent incapacity of the latter. It is to achieve this continuity
of relationship that the agricultural lessor is mandated by law to choose a
successor-tenant within one month from the death or incapacity of the

agricultural lessee from among the following: (1) surviving spouse; (2)
eldest direct descendant by consanguinity; or (3) the next eldest direct
descendant or descendants in the order of their age. Should the lessor fail
to exercise his choice within one month from the death of the tenant, the
priority shall be in accordance with the aforementioned order. In Manuel
vs. Court of Appeals,[if !supportFootnotes][21][endif] we ruled that:
Agricultural leasehold relationship is not extinguished by the death or
incapacity of the parties. In case the agricultural lessee dies or is
incapacitated, the leasehold relation shall continue between the
agricultural lessor and any of the legal heirs of the agricultural lessee who
can cultivate the landholding personally, in the order of preference
provided under Section 9 of Republic Act 3844, as chosen by the lessor
within one month from such death or permanent incapacity. Since
petitioner Rodolfo Manuel failed to exercise his right of choice
within the statutory period, Edwardos widow Enriqueta, who is
first in the order of preference and who continued working on the
landholding upon her husbands death, succeeded him as
agricultural lessee. Thus, Enriqueta is subrogated to the rights of her
husband and could exercise every right Eduardo had as agricultural lessee,
including the rights of pre-emption and redemption.
Applying Section 9 of Republic Act 3844, in the light of prevailing
jurisprudence, it is undeniable that respondent Delia Razon Pea, the
surviving spouse of the original tenant, Anacleto Pea, is the first in the
order of preference to succeed to the tenancy rights of her husband
because the lessor, Carolina Zacarias, failed to exercise her right of choice
within the one month period from the time of Anacletos death.
Petitioners cannot find succor in the declarations of Emilio Pea and
the affidavit of Carolina Zacarias, stating that Emilio succeeded to the
tenancy rights of Anacleto. In the first place, Carolinas affidavit and her
Answer filed before the PARAD were both executed in 1992, or almost two
years after the death of Anacleto on February 17, 1990, way beyond the
one month period provided for in Section 9 of Republic Act 3844. Secondly,
as found by the DARAB, a scrutiny of Carolinas declaration will show that
she never categorically averred that she made her choice within the one
(1) month period. Instead, she narrated passively that when Anacleto died,
the right of the deceased was inherited by Emilio Pea, prompting the
DARAB to conclude it merely connotes that she recognized Emilio Pea by
force of circumstance under a nebulous time frame. [if !supportFootnotes][22][endif]
Petitioners further argue that Delia cannot qualify as tenant even on
the assumption that she was the rightful successor to Anacletos tenancy
rights, because she did not personally cultivate the land and did not pay
rent. In essence, petitioners urge this Court to ascertain and evaluate
certain material facts which, however are not within the province of this
Court to consider in a petition for review. Determination of personal
cultivation and rental payments are factual issues beyond the reach of this
petition. Well established is the rule that in an appeal via certiorari, only
questions of law may be reviewed.[if !supportFootnotes][23][endif]
On the second issue, however, we are unable to agree with the
ruling of respondent Court of Appeals and of DARAB that the sale of the
land in question should be declared null and void. There is no legal basis
for such declaration. Lest it be forgotten, it is Carolina Zacarias who is the

owner of the subject land and both Emilio Pea and Delia Razon Pea only
succeeded to the tenancy rights of Anacleto.
As an owner, Carolina has the right to dispose of the property
without other limitations than those established by law. [if !supportFootnotes][24][endif]
This attribute of ownership is impliedly recognized in Sections 10, 11 and
12 of Republic Act No. 3844,[if !supportFootnotes][25][endif] where the law allows the
agricultural lessor to sell the landholding, with or without the knowledge of
the agricultural lessee and at the same time recognizes the right of
preemption and redemption of the agricultural lessee. Thus, the existence
of tenancy rights of agricultural lessee cannot affect nor derogate from the
right of the agricultural lessor as owner to dispose of the property. The only
right of the agricultural lessee or his successor in interest is the right of
preemption and/or redemption.
In the case at bar, it is undisputed that Carolina became the absolute
owner of the subject landholding by virtue of Deed of Extrajudicial
Settlement and Affidavit of Settlement executed by the other heirs of
Alfonso Olympia and Spouses Claro and Cristina Zacarias. As the owner, it
is within her right to execute a deed of sale of said landholding, without
prejudice however to the tenancy rights and the right of redemption of
Delia Razon Pea. In Manuel,[if !supportFootnotes][26][endif] we held that the tenancy
relationship is not affected or severed by the change of ownership. The
new owner is under the obligation to respect and maintain the tenants
landholding. In turn, Delia Razon Pea, as the successor tenant, has the
legal right of redemption. This right of redemption is statutory in character.
It attaches to a particular landholding by operation of law. [if !supportFootnotes][27]
[endif]

Finally, as to the question of illegal conversion of the land, suffice it

to state that such determination is not within the jurisdiction of this Court
and is not proper in a petition for review on certiorari as it requires
evaluation and examination of pertinent facts.
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed decision of
the Court of Appeals in CA-G.R. SP No. 39987 is AFFIRMED in so far as it
recognizes Delia Razon Pea as the successor of Anacleto Pea as the tenant,
thereby allowing her to exercise her right of redemption over the land
within the prescribed period granted by law. However, said decision is
REVERSED and SET ASIDE insofar as it declared the sale of said
landholding null and void. IN LIEU THEREOF, SAID SALE BY CAROLINA
ZACARIAS IS HEREBY DECLARED VALID, SUBJECT TO THE TENANCY RIGHTS
AND RIGHT OF REDEMPTION by the TENANT-LESSEE, private respondent
Delia Razon Pea.
No pronouncements as to costs
SO ORDERED.
EN BANC
G.R. No. L-19760
April 30, 1964
MARCELO VILLAVIZA, ET AL., petitioners,
vs.
JUDGE TOMAS PANGANIBAN, ET AL., respondents.
Alejandro C. Villaviza for petitioners.Ipac and Fajardo for respondent Judge
Tomas Panganiban.Manuel Cordero for other respondents.
REYES, J.B.L., J.:

Review of the decision of the Court of Agrarian Relations, Cabanatuan City,

in its Case No. 2088-NE-60, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering respondent Quirino
Capalad to pay the petitioners as follows:
1. Jose Aguilar
P297.00
2. Agapito Neuda
264.75
3. Sixto Malarulat
264.25
4. Rafael Alamon
164.00
5. Petronilo Aguilar
335.25
6. Eulogio Samaniego
219.00
7. Castor Rufino
234.00
The following respondents are hereby ordered to vacate their respective
landholdings in favor of the petitioners, subject to the provisions of pars. 3
and 4, Sec. 22, R.A. No. 1199, as amended, the indemnity in the
aforestated paragraphs, supra, shall be paid by respondent Quirino
Capalad:
Respondents

Petitioners

1. Alejo Pramel

1. Jose Aguilar

2. Severino Padilla

2. Agapito Neuda

3. Domingo Villaviza

3. Rafael Alamon

4. Marcelo Villaviza

4. Petronilo Aguilar

5. Cirilo Ramos

5. Eulogio Samaniego

6. Ciriaco Pizaro

6. Castor Rufino

7. Cesario Villaviza
Ben Morelos
Juan Morelos

7. Sixto Malarulat

)
)

SO ORDERED.
The lower court found that the above-named respondents (petitioners
below) were tenants since 1944 in a riceland situated in Aliaga, Nueva
Ecija, and owned by Domingo Fajardo. Fajardo gave out the land for lease
(civil lease) to the petitioner, Quirino Capalad, starting with the crop year
1955-56. The said lessee, in June, 1955, plowed the land by machinery,
and installed, as his tenants his above-named in this Court, so that when
the respondents went back to their respective landholdings to prepare
them for planting they found the land already cultivated. The respondentstenants demanded their reinstatement, but everytime they did, which they
did yearly until the present suit was filed, Quirino Capalad promised but
never fulfilled, to reinstate them for the agricultural year following said
demands.
As grounds for the petition for review, the petitioners claim grave abuse of

discretion by the Agrarian Court and a lack of substantive evidence to

support its findings.
The above claim is wild and reckless and definitely without merit, since the
decision itself contains the recitals of the testimonies of the witnesses upon
which the court based its findings, and the petitioners do not question the
existence and adequacy of these testimonies. That the court believed the
evidence for the respondents rather than those for the petitioners is the
tenancy court's prerogative, and, as a reviewing court, the Supreme Court
will not weigh anew the evidence; all that this Court is called upon to do,
insofar as the evidence is concerned is to find out if the conclusion of the
lower court is supported by substantive evidence; and the present case is,
as hereinbefore explained.
A tenant's right to be respected in his tenure under Republic Act 1199, as
amended, is an obligation of the landholder created by law, and an action
for violation thereof prescribes in ten years under No. 2 of Article 1144 of
the Civil Code. The respondents were ousted from their landholdings in
June, 1955, they filed the present action on 31 March 1960; therefore, the
period of limitation had not expired.
The tenancy court found that the ejected tenants-respondents have
engaged in gainful occupations since their illegal ejectment and had
delayed the filing of the case, and for these reasons the court made an
award for damages against Quirino Capalad equivalent to only two
harvests based on the landholder's share for the crop year 1954-1955.
1wph1.t
The premises for the award are erroneous. Under section 27(1) of Republic
Act 1199, as amended, a tenant's earnings may not be deducted from the
damages because the said section positively provides that the tenant's
freedom to earn elsewhere is to be added ("in addition") to his right to
damages in case of illegal ejectment (Lustre, et al. vs. CAR, et al., L-19654,
March 21, 1964). Nor can it be said that the respondents-tenants are guilty
of laches for having unnecessarily delayed to Capalad's promises to
reinstate them.
The amount of the award to each respondent should not, however, be
disturbed because the respondents' non-appeal from the decision indicates
their satisfaction therewith and a waiver of any amounts other than those
indicated in the decision (David V. de la Cruz, et al., L-11656, 18 April 1958;
Dy, et al. vs. Kuizon, L-16654, 30 Nov. 1961).
FOR THE FOREGOING CONSIDERATIONS, the decision under review is
hereby affirmed, with costs against the petitioners.

EN BANC
G.R. No. L-26255
June 30, 1969
PABLO BASBAS, plaintiff-appellant,
vs.
RUFINO ENTENA, FLAVIANO TIBAY and ANGELINA ENTENA
(Spouses), and R. M. RESURRECCION as acting Registrar of Deeds
of the Province of Laguna, defendants-appellees.
Sabio, Bonifacio and De Jesus for plaintiff-appellant.Domingo T. Zaballa for
defendants-appellees.
REYES, J.B.L., J.:

This is an appeal from the decision of the Court of Agrarian Relations, in

CAR Case No. 1478, Laguna '65, on the sole question of whether tender of
payment and judicial consignation of the purchase price are necessary
before a tenant-lessee may avail himself of the right of pre-emption or of
redemption provided in Sections 11 and 12 of the Agricultural Land Reform
Code.
In the action filed by tenant Pablo Basbas in the Court of Agrarian Relations
against the alleged landholder or landholders Rufino Entena and the
spouses Flaviano Tibay and Angelina Entena, the parties agreed to
stipulate on the following facts:
1. That plaintiff Pablo Basbas is the leasehold tenant of a 1- hectare
parcel of riceland, known as Lot No. 1520 of the Sta. Rosa Estate
Subdivision, located at Barrio Dila, Sta. Rosa, Laguna, formerly owned by
defendant Rufino Entena and presently owned by spouses Flaviano Tibay
and Angelina Entena, his co-defendants.
2. That on April 11, 1964, defendant Rufino Entena executed a deed of sale
of the aforementioned lot in favor of defendant spouses Flaviano Tibay and
Angelina Entena.
3. That on May 25, 1964, defendant Rufino Entena sent a letter, marked as
Exhibit 'I', to plaintiff, to which the latter sent a reply dated June 4, 1964,
marked as Exhibit 'A'.
4. That under date of June 4, 1964, plaintiff wrote a letter, marked as
Exhibit 'B', to the Governor of the Land Authority, to which he received a
reply from the Acting Officer in Charge of the Land Authority, dated June
22, 1964, which is marked as Exhibit 'C', of which reply (Exhibit 'C')
defendants have not been given copy or otherwise informed.
5. That the deed of sale mentioned in paragraph 2 hereof, was registered
in the office of the register of deeds of Laguna on May 26, 1964. The
certification of the Register of Deeds respecting said sale is marked as
Exhibit 'D'.
6. That defendant Rufino Entena and his wife Aniceta Carapatan executed
an affidavit, dated April 11, 1964, marked as Exhibit 'I' defendant
Register of Deeds.
7. That defendant spouses Flaviano Tibay and Angelina Entena are son-inlaw and daughter, respectively, of defendant Rufino Entena, and said
spouses live separately from their father.
8. That plaintiff has not deposited any sum of money in this Court to cover
the pre-emption or redemption price.
Exhibit 'I' mentioned above (No. 3, Stipulation) refers to a letter sent by
Rufino Entena to the tenant, to the effect that the landholding was being
put up for sale at P13,000.00 per hectare and the tenant being given 90
days within which to communicate his intention to purchase the same:
otherwise, the land would be offered to other buyers (page 1 folder of
exhibits). Exhibit "A" (No. 3, Stipulation) is the tenant's reply to the
landholder dated June 4, 1964, accepting the latter's offer to sell the land,
although disagreeing to the quoted price therefor. The tenant in the same
letter informed the landholder that he was enlisting the aid of the
government in purchasing the land, as allowed by law. Exhibit "3" (No. 4,
Stipulation) is the tenant's letter of June 4, 1964 addressed to the Governor
of the Land Authority, asking the help of said agency to acquire the land he
was working on and which was being offered for sale. Exhibit "C" (No. 4,

Stipulation) is the answer of the Acting Officer in Charge of the Land

Authority, informing the tenant that his petition was already being
processed and definite action thereon will be taken as soon as the Land
Bank shall have been fully organized. Exhibit "1-Register of Deeds" (No. 6,
Stipulation) is the sworn affidavit of the spouses Rufino Entena and Aniceta
Carapatan, dated April 11, 1964, attesting to the alleged fact that the
tenant, Pablo Basbas, was fully notified of the sale of their land 90 days
before said conveyance, and that the tenant had refused, or failed to
exercise, the right of pre-emption granted him under the Agricultural Land
Reform Code (page 6, folder of exhibits). The submission of this affidavit
enabled the registration on May 26, 1964 of the deed of sale in favor of
vendees Flaviano Tibay and Angelina Entena.
On the basis of the aforequoted stipulation of facts, the Agrarian Court
dismissed the case, reasoning that as the plaintiff failed to make tender of
payment and consignation of the purchase price the landowner cannot be
compelled to sell the property to him. Plaintiff-tenant thus interposed the
present appeal.
The appellant-tenant's claim to preference in purchasing the land he is
working on, in case the said land is to be sold, or to his right to redeem it in
2 years should the land be sold without his knowledge, is predicated upon
Sections 11 and 12 of the Agricultural Land Reform Code (Republic Act
3844):
SEC. 11. Lessee's Right of Pre-emption. In case the agricultural lessor
decides to sell the landholding, the agricultural lessee shall have the
preferential right to buy the same under reasonable terms and conditions:
Provided, That the entire landholding offered for sale must be pre-empted
by the Land Authority if the owner so desires unless the majority of the
lessees object to such acquisitions: Provided, further, That where there are
two or more agricultural lessees, each shall be entitled to said preferential
right only to the extent of the area actually cultivated by him. The right of
pre-emption under this section may be exercised within ninety days from
notice in writing, which shall be served by the owner an all lessees
affected.
SEC. 12. Lessee's Right of Redemption. In case the landholding is sold to
a third person without the knowledge of the agricultural lessee, the latter
shall have the right to redeem the same at a reasonable price and
consideration: Provided, That the entire landholding sold must be
redeemed: Provided, further, That where there are two or more agricultural
lessees, each shall be entitled to said right of redemption only to the
extent of the area actually cultivated by him. The right of redemption
under this Section may be exercised within two years from the registration
of the sale, and shall have priority over any other right of legal redemption.
The case herein, which positively is an exercise by the tenant of his right to
redeem the landholding, 1 was nevertheless dismissed, the Agrarian Court
considering as fatal the tenant's failure to tender payment or consign the
purchase price of the property.
It is argued for the appellant-lessee that the Court of Agrarian Relations
erred in dismissing the action for non-tender of the redemption price, since
the law nowhere requires such tender, and, furthermore, the tenant is not
bound to redeem his landholding at the price for which it was sold, but only
at a reasonable price and consideration.

We find that no error was committed in dismissing the case. In the first
place, there is no showing that the Land Reform Council has proclaimed
that the government machineries and agencies in the region are already
operating, as required by section 4 of Republic Act 3844.
In the second place, granting that sections 11 and 12 are operative, yet in
Torres de Conejero, et al. vs. Court of Appeals, et al., L-21812, April 29,
1966, 16 SCRA 775, this Court ruled that the timely exercise of the right of
legal redemption requires either tender of the price or valid consignation
thereof. Said the Court in said case (16 SCRA pages 781-782):
It is not difficult to discern why the redemption price should either be fully
offered in legal tender or else validly consigned in court. Only by such
means can the buyer become certain that the offer to redeem is one made
seriously and in good faith. A buyer can not be expected to entertain an
offer of redemption without attendant evidence that the redemptioner can,
and is willing to accomplish the repurchase immediately. A different rule
would leave the buyer open to harassment by speculators or crackpots, as
well as to unnecessary prolongation of the redemption period, contrary to
the policy of the law. While consignation of the tendered price is not always
necessary because legal redemption is not made to discharge a preexisting debt (Asturias Sugar Central vs. Cane Molasses Co., 60 Phil. 253),
a valid tender is indispensable, for the reasons already stated. Of course,
consignation of the price would remove all controversy as to the
redemptioner's ability to pay at the proper time.
This Court further elaborated the point in its ruling on the motion to
reconsider in the Torres case (16 SCRA, pages 783-784):
3. Whether or not the petitioners exercised diligence in asserting their
willingness to pay is irrelevant. Redemption by the co-owners of the vendor
within 30 days is not a matter of intent, but is effectuated only by
payment, or valid tender, of the price within said period. How the
redemptioners raise the money is immaterial; timeliness and completeness
of payment or tender are the things that matter.
4. The offer of the redemption price is not bona fide where it is shown that
the offerer could not have made payment in due time if the offer had been
accepted. Note that the co-owners' right to redeem, being granted by law,
is binding on the purchaser of the undivided share by operation of law, and
the latter's consent or acceptance is not required for the existence of the
right of redemption. The only matter to be investigated by the courts,
therefore, is the timely exercise of the right, and the only way to exercise it
is by a valid payment or tender within the 30 days Prefixed by the Civil
Code.
That the legal redemptioner is only required to pay a reasonable price is no
obstacle to the requirement of tender, as ruled also in the Torres case (16
SCRA, page 781):
It is, likewise, argued that tender of the price is excused because Article
1620 of the new Civil Code allows the redemptioner to pay only a
reasonable price if the price of alienation is grossly excessive, and that the
reasonableness of the price to be paid can only be determined by the
courts. We think that the right of a redemptioner to pay a reasonable price
under Article 1620 does not excuse him from the duty to make proper
tender of the price that can be honestly deemed reasonable under the
circumstances, without prejudice to final arbitration by the courts; nor does

it authorize said redemptioner to demand that the vendee accept payment

by installments, as petitioners have sought to do.
In our opinion, the foregoing considerations are applicable to redemption
(and pre-emption) under sections 11 and 12 of the Land Reform Act. Both
under said law and under Article 1620 of the Civil Code, the right of legal
redemption must be exercised within specified time limits: and the
statutory periods would be rendered meaningless and of easy evasion
unless the redemptioner is required to make an actual tender in good faith
of what he believed to be the reasonable price of the land sought to be
redeemed. The existence of the right of redemption operates to depress
the market value of the land until the period expires, and to render that
period indefinite by permitting the tenant to file a suit for redemption, with
either party unable to foresee when final judgment will terminate the
action, would render nugatory the period of two years fixed by the statute
for making the redemption and virtually paralyze any efforts of the
landowner to realize the value of his land. No buyer can be expected to
acquire it without any certainty as to the amount for which it may be
redeemed, so that he can recover at least his investment in case of
redemption. In the meantime, the landowner's needs and obligations
cannot be met. It is doubtful if any such result was intended by the statute,
absent clear wording to that effect.1awphil.nt
The situation becomes worse when, as shown by the evidence in this case,
the redemptioner has no funds and must apply for them to the Land
Authority, which, in turn, must depend on the availability of funds from the
Land Bank. It then becomes practically certain that the landowner will not
be able to realize the value of his property for an indefinite time beyond
the two years redemption period.
The appellant herein, like the appellants in the Torres case, urge that this
Court has ruled that previous tender of the redemption money is not
indispensable in De la Cruz vs. Marcelino, 84 Phil. 709, and Torio vs. Del
Rosario, 93 Phil. 800. It was, however, pointed out in the Torres decision
that in the two cases relied upon by appellant the redemptioners had
consigned or deposited in court the redemption price when action was
filed, for which reason prior tender was held excused. In the case now
before us, there was neither prior tender nor did judicial consignation
accompany the filing of the suit. Furthermore, in the cases aforesaid, the
Court took into account the brevity of the periods (9 days) allowed by the
law operating at the time (Civil Code of 1889); in the case at bar the
statute grants the tenant two years to redeem.
It may be added that unless tender or consignation is made requisite to the
valid exercise of the tenant's right to redeem, everytime a redemption is
attempted, a case must be filed in court to ascertain the reasonable price.
On the other hand, a prior tender by the tenant of the price that he
considers reasonable affords an opportunity to avoid litigation, for the
landowner may well decide to accept a really reasonable offer, considering
that he would thereby save the attorney's fees and the expense of
protracted litigation.
Section 74 of the Land Reform Act (Republic Act No. 3844) establishes a
"Land Bank of the Philippines" intended "to finance the acquisition by the
Government of landed estates for division and resale to small landholders,
as well as the purchase of the landholding by the agricultural lessee from

the landowner." No expression in this part of the law, however, indicates, or

even hints, that the 2-year redemption period will not commence to ran
until the tenant obtains financing from the Land Bank, or stops the tenant
from securing redemption funds from some other source. The
considerations expressed in this decision on the confiscatory result of
requiring the landowner to wait an indefinite time until the lessee acquires
the means for making the redemption militate against construing the
statement of purposes for which the Land Bank is created (section 74) as
condition precedent to the alienation of a landholding.
WHEREFORE, the appealed order granting the motion to dismiss the
complaint is affirmed. No costs.
Concepcion, C.J., Makalintal, Zaldivar, Sanchez, Castro, Fernando,
Capistrano,Teehankee and Barredo, JJ., concur.Dizon, J., took no part.

EN BANC
G.R. No. L-26255
June 30, 1969
PABLO BASBAS, plaintiff-appellant,
vs.
RUFINO ENTENA, FLAVIANO TIBAY and ANGELINA ENTENA
(Spouses), and R. M. RESURRECCION as acting Registrar of Deeds
of the Province of Laguna, defendants-appellees.
Sabio, Bonifacio and De Jesus for plaintiff-appellant.Domingo T. Zaballa for
defendants-appellees.
REYES, J.B.L., J.:
This is an appeal from the decision of the Court of Agrarian Relations, in
CAR Case No. 1478, Laguna '65, on the sole question of whether tender of
payment and judicial consignation of the purchase price are necessary
before a tenant-lessee may avail himself of the right of pre-emption or of
redemption provided in Sections 11 and 12 of the Agricultural Land Reform
Code.
In the action filed by tenant Pablo Basbas in the Court of Agrarian Relations
against the alleged landholder or landholders Rufino Entena and the
spouses Flaviano Tibay and Angelina Entena, the parties agreed to
stipulate on the following facts:
1. That plaintiff Pablo Basbas is the leasehold tenant of a 1- hectare
parcel of riceland, known as Lot No. 1520 of the Sta. Rosa Estate
Subdivision, located at Barrio Dila, Sta. Rosa, Laguna, formerly owned by
defendant Rufino Entena and presently owned by spouses Flaviano Tibay
and Angelina Entena, his co-defendants.
2. That on April 11, 1964, defendant Rufino Entena executed a deed of sale
of the aforementioned lot in favor of defendant spouses Flaviano Tibay and
Angelina Entena.
3. That on May 25, 1964, defendant Rufino Entena sent a letter, marked as
Exhibit 'I', to plaintiff, to which the latter sent a reply dated June 4, 1964,
marked as Exhibit 'A'.
4. That under date of June 4, 1964, plaintiff wrote a letter, marked as
Exhibit 'B', to the Governor of the Land Authority, to which he received a
reply from the Acting Officer in Charge of the Land Authority, dated June
22, 1964, which is marked as Exhibit 'C', of which reply (Exhibit 'C')
defendants have not been given copy or otherwise informed.

5. That the deed of sale mentioned in paragraph 2 hereof, was registered

in the office of the register of deeds of Laguna on May 26, 1964. The
certification of the Register of Deeds respecting said sale is marked as
Exhibit 'D'.
6. That defendant Rufino Entena and his wife Aniceta Carapatan executed
an affidavit, dated April 11, 1964, marked as Exhibit 'I' defendant
Register of Deeds.
7. That defendant spouses Flaviano Tibay and Angelina Entena are son-inlaw and daughter, respectively, of defendant Rufino Entena, and said
spouses live separately from their father.
8. That plaintiff has not deposited any sum of money in this Court to cover
the pre-emption or redemption price.
Exhibit 'I' mentioned above (No. 3, Stipulation) refers to a letter sent by
Rufino Entena to the tenant, to the effect that the landholding was being
put up for sale at P13,000.00 per hectare and the tenant being given 90
days within which to communicate his intention to purchase the same:
otherwise, the land would be offered to other buyers (page 1 folder of
exhibits). Exhibit "A" (No. 3, Stipulation) is the tenant's reply to the
landholder dated June 4, 1964, accepting the latter's offer to sell the land,
although disagreeing to the quoted price therefor. The tenant in the same
letter informed the landholder that he was enlisting the aid of the
government in purchasing the land, as allowed by law. Exhibit "3" (No. 4,
Stipulation) is the tenant's letter of June 4, 1964 addressed to the Governor
of the Land Authority, asking the help of said agency to acquire the land he
was working on and which was being offered for sale. Exhibit "C" (No. 4,
Stipulation) is the answer of the Acting Officer in Charge of the Land
Authority, informing the tenant that his petition was already being
processed and definite action thereon will be taken as soon as the Land
Bank shall have been fully organized. Exhibit "1-Register of Deeds" (No. 6,
Stipulation) is the sworn affidavit of the spouses Rufino Entena and Aniceta
Carapatan, dated April 11, 1964, attesting to the alleged fact that the
tenant, Pablo Basbas, was fully notified of the sale of their land 90 days
before said conveyance, and that the tenant had refused, or failed to
exercise, the right of pre-emption granted him under the Agricultural Land
Reform Code (page 6, folder of exhibits). The submission of this affidavit
enabled the registration on May 26, 1964 of the deed of sale in favor of
vendees Flaviano Tibay and Angelina Entena.
On the basis of the aforequoted stipulation of facts, the Agrarian Court
dismissed the case, reasoning that as the plaintiff failed to make tender of
payment and consignation of the purchase price the landowner cannot be
compelled to sell the property to him. Plaintiff-tenant thus interposed the
present appeal.
The appellant-tenant's claim to preference in purchasing the land he is
working on, in case the said land is to be sold, or to his right to redeem it in
2 years should the land be sold without his knowledge, is predicated upon
Sections 11 and 12 of the Agricultural Land Reform Code (Republic Act
3844):
SEC. 11. Lessee's Right of Pre-emption. In case the agricultural lessor
decides to sell the landholding, the agricultural lessee shall have the
preferential right to buy the same under reasonable terms and conditions:
Provided, That the entire landholding offered for sale must be pre-empted

by the Land Authority if the owner so desires unless the majority of the
lessees object to such acquisitions: Provided, further, That where there are
two or more agricultural lessees, each shall be entitled to said preferential
right only to the extent of the area actually cultivated by him. The right of
pre-emption under this section may be exercised within ninety days from
notice in writing, which shall be served by the owner an all lessees
affected.
SEC. 12. Lessee's Right of Redemption. In case the landholding is sold to
a third person without the knowledge of the agricultural lessee, the latter
shall have the right to redeem the same at a reasonable price and
consideration: Provided, That the entire landholding sold must be
redeemed: Provided, further, That where there are two or more agricultural
lessees, each shall be entitled to said right of redemption only to the
extent of the area actually cultivated by him. The right of redemption
under this Section may be exercised within two years from the registration
of the sale, and shall have priority over any other right of legal redemption.
The case herein, which positively is an exercise by the tenant of his right to
redeem the landholding, 1 was nevertheless dismissed, the Agrarian Court
considering as fatal the tenant's failure to tender payment or consign the
purchase price of the property.
It is argued for the appellant-lessee that the Court of Agrarian Relations
erred in dismissing the action for non-tender of the redemption price, since
the law nowhere requires such tender, and, furthermore, the tenant is not
bound to redeem his landholding at the price for which it was sold, but only
at a reasonable price and consideration.
We find that no error was committed in dismissing the case. In the first
place, there is no showing that the Land Reform Council has proclaimed
that the government machineries and agencies in the region are already
operating, as required by section 4 of Republic Act 3844.
In the second place, granting that sections 11 and 12 are operative, yet in
Torres de Conejero, et al. vs. Court of Appeals, et al., L-21812, April 29,
1966, 16 SCRA 775, this Court ruled that the timely exercise of the right of
legal redemption requires either tender of the price or valid consignation
thereof. Said the Court in said case (16 SCRA pages 781-782):
It is not difficult to discern why the redemption price should either be fully
offered in legal tender or else validly consigned in court. Only by such
means can the buyer become certain that the offer to redeem is one made
seriously and in good faith. A buyer can not be expected to entertain an
offer of redemption without attendant evidence that the redemptioner can,
and is willing to accomplish the repurchase immediately. A different rule
would leave the buyer open to harassment by speculators or crackpots, as
well as to unnecessary prolongation of the redemption period, contrary to
the policy of the law. While consignation of the tendered price is not always
necessary because legal redemption is not made to discharge a preexisting debt (Asturias Sugar Central vs. Cane Molasses Co., 60 Phil. 253),
a valid tender is indispensable, for the reasons already stated. Of course,
consignation of the price would remove all controversy as to the
redemptioner's ability to pay at the proper time.
This Court further elaborated the point in its ruling on the motion to
reconsider in the Torres case (16 SCRA, pages 783-784):
3. Whether or not the petitioners exercised diligence in asserting their

willingness to pay is irrelevant. Redemption by the co-owners of the vendor

within 30 days is not a matter of intent, but is effectuated only by
payment, or valid tender, of the price within said period. How the
redemptioners raise the money is immaterial; timeliness and completeness
of payment or tender are the things that matter.
4. The offer of the redemption price is not bona fide where it is shown that
the offerer could not have made payment in due time if the offer had been
accepted. Note that the co-owners' right to redeem, being granted by law,
is binding on the purchaser of the undivided share by operation of law, and
the latter's consent or acceptance is not required for the existence of the
right of redemption. The only matter to be investigated by the courts,
therefore, is the timely exercise of the right, and the only way to exercise it
is by a valid payment or tender within the 30 days Prefixed by the Civil
Code.
That the legal redemptioner is only required to pay a reasonable price is no
obstacle to the requirement of tender, as ruled also in the Torres case (16
SCRA, page 781):
It is, likewise, argued that tender of the price is excused because Article
1620 of the new Civil Code allows the redemptioner to pay only a
reasonable price if the price of alienation is grossly excessive, and that the
reasonableness of the price to be paid can only be determined by the
courts. We think that the right of a redemptioner to pay a reasonable price
under Article 1620 does not excuse him from the duty to make proper
tender of the price that can be honestly deemed reasonable under the
circumstances, without prejudice to final arbitration by the courts; nor does
it authorize said redemptioner to demand that the vendee accept payment
by installments, as petitioners have sought to do.
In our opinion, the foregoing considerations are applicable to redemption
(and pre-emption) under sections 11 and 12 of the Land Reform Act. Both
under said law and under Article 1620 of the Civil Code, the right of legal
redemption must be exercised within specified time limits: and the
statutory periods would be rendered meaningless and of easy evasion
unless the redemptioner is required to make an actual tender in good faith
of what he believed to be the reasonable price of the land sought to be
redeemed. The existence of the right of redemption operates to depress
the market value of the land until the period expires, and to render that
period indefinite by permitting the tenant to file a suit for redemption, with
either party unable to foresee when final judgment will terminate the
action, would render nugatory the period of two years fixed by the statute
for making the redemption and virtually paralyze any efforts of the
landowner to realize the value of his land. No buyer can be expected to
acquire it without any certainty as to the amount for which it may be
redeemed, so that he can recover at least his investment in case of
redemption. In the meantime, the landowner's needs and obligations
cannot be met. It is doubtful if any such result was intended by the statute,
absent clear wording to that effect.1awphil.nt
The situation becomes worse when, as shown by the evidence in this case,
the redemptioner has no funds and must apply for them to the Land
Authority, which, in turn, must depend on the availability of funds from the
Land Bank. It then becomes practically certain that the landowner will not
be able to realize the value of his property for an indefinite time beyond

the two years redemption period.

The appellant herein, like the appellants in the Torres case, urge that this
Court has ruled that previous tender of the redemption money is not
indispensable in De la Cruz vs. Marcelino, 84 Phil. 709, and Torio vs. Del
Rosario, 93 Phil. 800. It was, however, pointed out in the Torres decision
that in the two cases relied upon by appellant the redemptioners had
consigned or deposited in court the redemption price when action was
filed, for which reason prior tender was held excused. In the case now
before us, there was neither prior tender nor did judicial consignation
accompany the filing of the suit. Furthermore, in the cases aforesaid, the
Court took into account the brevity of the periods (9 days) allowed by the
law operating at the time (Civil Code of 1889); in the case at bar the
statute grants the tenant two years to redeem.
It may be added that unless tender or consignation is made requisite to the
valid exercise of the tenant's right to redeem, everytime a redemption is
attempted, a case must be filed in court to ascertain the reasonable price.
On the other hand, a prior tender by the tenant of the price that he
considers reasonable affords an opportunity to avoid litigation, for the
landowner may well decide to accept a really reasonable offer, considering
that he would thereby save the attorney's fees and the expense of
protracted litigation.
Section 74 of the Land Reform Act (Republic Act No. 3844) establishes a
"Land Bank of the Philippines" intended "to finance the acquisition by the
Government of landed estates for division and resale to small landholders,
as well as the purchase of the landholding by the agricultural lessee from
the landowner." No expression in this part of the law, however, indicates, or
even hints, that the 2-year redemption period will not commence to ran
until the tenant obtains financing from the Land Bank, or stops the tenant
from securing redemption funds from some other source. The
considerations expressed in this decision on the confiscatory result of
requiring the landowner to wait an indefinite time until the lessee acquires
the means for making the redemption militate against construing the
statement of purposes for which the Land Bank is created (section 74) as
condition precedent to the alienation of a landholding.
WHEREFORE, the appealed order granting the motion to dismiss the
complaint is affirmed. No costs.
Concepcion, C.J., Makalintal, Zaldivar, Sanchez, Castro, Fernando,
Capistrano,Teehankee and Barredo, JJ., concur.Dizon, J., took no part.

FIRST DIVISION
[G.R. NO. 145568 November 17, 2005]
HEIRS OF ENRIQUE TAN, SR., namely, NORMA TAN, JEANETTE TAN,
JULIETA TAN, ROMMEL TAN, and ENRIQUE TAN, JR., All represented
by ROMMEL TAN, Petitioners, v. REYNALDA POLLESCAS, Respondent.
DECISION
CARPIO, J.:
The Case
Before the Court is a Petition for Review 1 of the Decision2 of the Court of
Appeals promulgated on 31 August 2000 in CA-G.R. SP No. 48823. The
Court of Appeals affirmed the decision of the Department of Agrarian

Reform Adjudication Board ordering petitioners to respect respondent's

possession and cultivation of the land.
The Antecedents
Petitioners Norma Tan, Jeanette Tan, Julieta Tan, Rommel3 Tan and Enrique
Tan, Jr. ("Tan Heirs") are co-owners of a coconut farmland ("Land") located
at Labo, Ozamis City with an area of 25,780 square meters.4
Esteban Pollescas ("Esteban") was the original tenant of the Land. Upon
Esteban's death in 1991, his son Enrique Pollescas ("Enrique") succeeded
him and was appointed as tenant by the landowner Enrique Tan ("Tan").5
However, respondent Reynalda Pollescas ("Reynalda"), Esteban's surviving
second spouse, demanded that Tan recognize her as Esteban's successor.
Tan did not accede. Thus, Reynalda filed with the Department of Agrarian
Reform Adjudication Board of Ozamis City ("DARAB-Ozamis") a complaint
for Annulment of Compromise Agreement, Quieting of Tenancy Relationship
and damages.6
In its Decision dated 28 April 1993, the DARAB-Ozamis declared Reynalda
as the lawful tenant of the Land. The DARAB-Ozamis apportioned the
harvests between the Tan Heirs and Reynalda based on the customary
sharing system which is 2/3 to the landowner and 1/3 to the tenant.7
On the following harvest dates, 11 and 19 of June, 9 September, 6 and 13
of December 1993, Reynalda failed to deliver to the Tan Heirs 2/3 of the
harvests amounting to P3,656.70. The Tan Heirs demanded Reynalda to
pay such amount.8 However, Reynalda ignored the demand.
Consequently, the Tan Heirs filed a complaint for estafa against Reynalda
with the Municipal Trial Court in Cities, Ozamis City, Branch 2.9 The trial
court found Reynalda guilty of estafa10 and sentenced her to five months
of arresto mayor maximum to two years of prision correccional minimum
and ordered her to pay the Tan Heirs P3,656.70, the amount which she
misappropriated.11
Subsequently, for Reynalda's continued failure to deliver their share, the
Tan Heirs filed with the DARAB, Misamis Occidental ("DARAB-Misamis
Occidental") an ejectment case.12
On 18 September 1996, the DARAB-Misamis Occidental13 ruled in favor of
the Tan Heirs. The DARAB-Misamis Occidental disposed of the case in this
wise:
WHEREFORE, premises considered, decision is hereby rendered
terminating the tenancy relationship of herein parties.
Consequently, respondent Reynalda Pollescas is ordered to vacate the
subject landholding and turn-over its possession and cultivation to the
plaintiffs.
The MARO of Ozamis City is likewise ordered to investigate and verify in
the subject landholding if there are actual farmer-cultivators in the area
who may qualify as lessees thereof, who then should be placed under
leasehold pursuant to the mandate of Section 12, R.A. 6657.
SO ORDERED.14
Aggrieved by the decision, Reynalda appealed to the DARAB, Diliman,
Quezon City ("DARAB"). The DARAB reversed the decision of the DARABMisamis Occidental, to wit:
WHEREFORE, premises considered, the appealed decision dated 18
September 1996 is hereby REVERSED and SET ASIDE and a new one is
rendered ordering the landowners to respect the peaceful possession and

cultivation of the subject landholding.

Respondent-Appellant is hereby ordered to pay her unpaid leasehold
rentals.
SO ORDERED.15
The Tan Heirs appealed the decision of the DARAB to the Court of Appeals.
The Court of Appeals affirmed the decision of the DARAB ordering the Tan
Heirs to respect Reynalda's possession and cultivation of the Land.
Hence, this petition.
The Ruling of the Court of Appeals
In affirming the decision of the DARAB, the Court of Appeals cited Roxas y
Cia v. Cabatuando, et al.16 where this Court held that "x x x mere
failure of a tenant to pay the landholder's share does not necessarily give
the latter the right to eject the former when there is lack of deliberate
intent on the part of the tenant to pay x x x."
The Court of Appeals held that Reynalda's failure to deliver the full amount
of the Tan Heirs' share could not be considered as a willful and deliberate
intent to deprive the Tan Heirs of their share. The Court of Appeals held
that Reynalda honestly believed that she was entitled to a share of the
harvests in 1992-1993 while the case for Annulment of Compromise
Agreement was pending before the DARAB-Ozamis. Reynalda also believed
that she could effect a set-off for her 1992-1993 share from the 1994 share
of the Tan Heirs.
The Court of Appeals further declared that the rental must be legal to
consider non-payment of such as a ground for ejectment. The appellate
court stated that:
x x x for a tenant's failure to pay rental to come within the intendment of
the law as a ground for ejectment, it is imperative that the rental must be
legal. What the law contemplates is the deliberate failure of the tenant to
pay the legal rental, not the failure to pay an illegal rental. A stipulation in
a leasehold contract requiring a lessee to pay an amount in excess of the
amount allowed by law is considered contrary to law, morals or public
policy. Such contract is null and void as to the excess.
It is noteworthy that Section 34 of RA 3844 provides that the consideration
for the lease of riceland and lands devoted to other crops shall not be more
than the equivalent of twenty-five per centum of the average normal
harvest. The tenant is obliged to pay a maximum of 25% of the normal
harvest and not two thirds as in the case at bar. Thus, even admitting that
a set-off was effected in favor of respondent for her 1992-1993 share, yet
enough is left to cover the 25% share of the petitioners for the 1994
crop.17
Citing Section 8 of Republic Act No. 3844 ("RA 3844"), the Court of Appeals
also held "[t]here is nothing in the law that makes failure to deliver share a
ground for extinguishment of leasehold agreement."18 Reynalda's failure
to deliver fully the share of the Tan Heirs is not sufficient to disturb the
agricultural leasehold relation.19
The Issues
In their Memorandum, the Tan Heirs raise the following issues:
I
WHETHER THERE IS NO EXCEPTION TO THE GROUNDS FOR
EXTINGUISHMENT OF LEASEHOLD RELATION UNDER SECTION 8 OF RA
3844.

II
WHETHER THE COURT OF APPEALS CORRECTLY RULED THAT REYNALDA IS
OBLIGED TO PAY ONLY 1/4 OR 25% OF THE NORMAL HARVEST AND NOT 2/3
WHEN THE SUBJECT LAND WAS NOT YET PLACED UNDER THE LEASEHOLD
SYSTEM PURSUANT TO SECTION 12 OF RA 6657.20
The Ruling of the Court
The petition lacks merit.
At the outset, the Court declares that RA 6657 is the governing statute in
this case.
On 8 August 1963, RA 3844 or the Agricultural Land Reform Code21
abolished and outlawed share tenancy and put in its stead the agricultural
leasehold system.22 On 10 September 1971, Republic Act No. 6389 ("RA
6389") amending RA 3844 ("RA 3844 as amended") declared share
tenancy relationships as contrary to public policy.23 RA 6389 did not
entirely repeal Republic Act No. 119924 and RA 3844 even if RA 6389
substantially modified them.25 Subsequently, Republic Act No. 6657 or the
Comprehensive Agrarian Reform Law of 1988 ("RA 6657") took effect on 15
June 1988. RA 6657 only expressly repealed Section 35 of RA 3844 as
amended.26 Thus, RA 6657 is the prevailing law in this case. The harvests
in dispute are for the years 1992-1993 or after the effectivity of RA 6657.
No ground for dispossession of landholding
Section 7 of RA 3844 as amended provides that once there is a leasehold
relationship, as in the present case, the landowner cannot eject the
agricultural tenant from the land unless authorized by the court for causes
provided by law.27 RA 3844 as amended expressly recognizes and protects
an agricultural leasehold tenant's right to security of tenure.28
Section 36 of RA 3844 as amended enumerates the grounds for
dispossession of the tenant's landholding, to wit:
SEC. 36. Possession of Landholding; Exceptions. Notwithstanding any
agreement as to the period or future surrender of the land, an agricultural
lessee shall continue in the enjoyment and possession of his landholding
except when his dispossession has been authorized by the Court in a
judgment that is final and executory if after due hearing it is shown that:
(1) The landholding is declared by the department head upon
recommendation of the National Planning Commission to be suited for
residential, commercial, industrial or some other urban purposes: Provided,
That the agricultural lessee shall be entitled to disturbance compensation
equivalent to five times the average of the gross harvests on his
landholding during the last five preceding calendar years;
(2) The agricultural lessee failed to substantially comply with any of the
terms and conditions of the contract or any of the provisions of this Code
unless his failure is caused by fortuitous event or force majeure;
(3) The agricultural lessee planted crops or used the landholding for a
purpose other than what had been previously agreed upon;
(4) The agricultural lessee failed to adopt proven farm practices as
determined under paragraph 3 of Section twenty-nine;
(5) The land or other substantial permanent improvement thereon is
substantially damaged or destroyed or has unreasonably deteriorated
through the fault or negligence of the agricultural lessee;
(6) The agricultural lessee does not pay the lease rental when it falls due:
Provided, That if the non-payment of the rental shall be due to crop failure

to the extent of seventy-five per centum as a result of a fortuitous event,

the non-payment shall not be a ground for dispossession, although the
obligation to pay the rental due that particular crop is not thereby
extinguished; or
(7) The lessee employed a sub-lessee on his landholding in violation of the
terms of paragraph 2 of Section twenty-seven.
In the instant case, the Tan Heirs seek Reynalda's ejectment from the Land
on the ground of non-payment of lease rental.
The Court agrees with the Court of Appeals that for non-payment of the
lease rental to be a valid ground to dispossess the agricultural lessee of the
landholding, the amount of the lease rental must first of all be lawful. If the
amount of lease rental claimed exceeds the limit allowed by law, nonpayment of lease rental cannot be a ground to dispossess the agricultural
lessee of the landholding.
Section 34 of RA 3844 as amended29 mandates that "not x x x more
than" 25% of the average normal harvest shall constitute the just and fair
rental for leasehold. In this case, the Tan Heirs demanded Reynalda to
deliver 2/3 of the harvest as lease rental, which clearly exceeded the 25%
maximum amount prescribed by law. Therefore, the Tan Heirs cannot
validly dispossess Reynalda of the landholding for non-payment of rental
precisely because the lease rental claimed by the Tan Heirs is unlawful.
Even assuming Reynalda agreed to deliver 2/3 of the harvest as lease
rental, Reynalda is not obliged to pay such lease rental for being unlawful.
There is no legal basis to demand payment of such unlawful lease rental.
The courts will not enforce payment of a lease rental that violates the law.
There was no validly fixed lease rental demandable at the time of the
harvests. Thus, Reynalda was never in default.
Reynalda and the Tan Heirs failed to agree on a lawful lease rental.
Accordingly, the DAR must first fix the provisional lease rental payable by
Reynalda to the Tan Heirs pursuant to the second paragraph of Section 34
of RA 3844 as amended.30 Until the DAR has fixed the provisional lease
rental, Reynalda cannot be in default in the payment of lease rental since
such amount is not yet determined. There can be no delay in the payment
of an undetermined lease rental because it is impossible to pay an
undetermined amount. That Reynalda is not yet in default in the payment
of the lease rental is a basic reason why she cannot be lawfully ejected
from the Land for non-payment of rental.31
No ground for extinguishment of leasehold relation
The Court also holds that there is no ground for the extinguishment of
leasehold relation in this case.
Only in the instances stated in Sections 8 and 28 of RA 3844 as amended
can leasehold relation be terminated. These provisions read:
SEC. 8. Extinguishment of Agricultural Leasehold Relation. 'The agricultural
leasehold relation established under this Code shall be extinguished by:
(1) Abandonment of the landholding without the knowledge of the
agricultural lessor;
(2) Voluntary surrender of the landholding by the agricultural lessee,
written notice of which shall be served three months in advance; or
(3) Absence of the persons under Section nine to succeed to the lessee, in
the event of death or permanent incapacity of the lessee.
SEC. 28. Termination of Leasehold by Agricultural Lessee During

Agricultural Year. 'The agricultural lessee may terminate the leasehold

during the agricultural year for any of the following causes:
(1) Cruel, inhuman or offensive treatment of the agricultural lessee or any
member of his immediate farm household by the agricultural lessor or his
representative with the knowledge and consent of the lessor;
(2) Non-compliance on the part of the agricultural lessor with any of the
obligations imposed upon him by the provisions of this Code or by his
contract with the agricultural lessee;
(3) Compulsion of the agricultural lessee or any member of his immediate
farm household by the agricultural lessor to do any work or render any
service not in any way connected with farm work or even without
compulsion if no compensation is paid;
(4) Commission of a crime by the agricultural lessor or his representative
against the agricultural lessee or any member of his immediate farm
household; or
(5) Voluntary surrender due to circumstances more advantageous to him
and his family.
The case of Garchitorena v. Panganibanwhich the Tan Heirs invoked to
justify the extinguishment of leasehold relation does not appear on page
339 of Volume 8 of the Supreme Court Reports Annotated. What is printed
on such page is the case of Republic v. Perez with docket number L16112 and promulgated on 29 June 1963. For making a wrong citation, the
Court admonishes Atty. Jesus S. Anonat, counsel for the Tan Heirs, to be
more careful when citing jurisprudence. The Court reminds him of his duty
not to knowingly misquote the text of a decision or authority32 lest he be
guilty of misleading the Court.
WHEREFORE, the Court DENIES the petition and AFFIRMS the assailed
Decision dated 31 August 2000 of the Court of Appeals in CA-G.R. SP No.
48823. The Court REMANDS this case to the Department of Agrarian
Reform for the determination of the provisional lease rental. Costs against
petitioners.
SO ORDERED.

EN BANC
G.R. No. L-25326 May 29, 1970
IGMIDIO HIDALGO and MARTINA ROSALES, petitioners,
vs.
POLICARPIO
HIDALGO,
SERGIO
DIMAANO,
MARIA
ARDE,
SATURNINO HIDALGO, BERNARDINA MARQUEZ, VICENTE DIMAANO,
ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF DEEDS
and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS,
respondents.
G.R. No. L-25327 May 29, 1970
HILARIO AGUILA and ADELA HIDALGO, petitioners,
vs.
POLICARPIO
HIDALGO,
SERGIO
DIMAANO,
MARIA
ARDE,
SATURNINO HIDALGO, BERNARDINA MARQUEZ, VICENTE DIMAANO,
ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF DEEDS

and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS,

respondents.
Jose O. Lara for petitioners.
Pedro Panganiban y Tolentino for respondents.
TEEHANKEE, J.:
Two petitions for review of decisions of the Court of Agrarian Relations
dismissing petitioners' actions as share tenants for the enforcerment of the
right to redeem agricultural lands, under the provisions of section 12 of the
Agricultural Land Reform Code. As the same issue of law is involved and
the original landowner and vendees in both cases are the same, the two
cases are herein jointly decided.
Respondent-vendor Policarpio Hidalgo was until the time of the execution
of the deeds of sale on September 27, 1963 and March 2, 1964 in favor of
his seven above-named private co-respondents, the owner of the 22,876square meter and 7,638-square meter agricultural parcels of land situated
in Lumil, San Jose, Batangas, described in the decisions under review.
In Case L-25326, respondent-vendor sold the 22,876-square meter parcel
of land, together with two other parcels of land for P4,000.00. Petitionersspouses Igmidio Hidalgo and Martina Resales, as tenants thereof, alleging
that the parcel worked by them as tenants is fairly worth P1,500.00,
"taking into account the respective areas, productivities, accessibilities,
and assessed values of three lots, seek by way of redemption the
execution of a deed of sale for the same amount of P1,500.00 by
respondents-vendees 1 in their favor.
In Case L-25327, respondent-vendor sold the 7,638-square meter parcel of
land for P750.00, and petitioners-spouses Hilario Aguila and Adela Hidalgo
as tenants thereof, seek by way of redemption the execution of a deed of
sale for the same price of P750.00 by respondents-vendees in their favor.
As stated in the decisions under review, since the parties stipulated on the
facts in both cases, petitioners-tenants have for several years been
working on the lands as share tenants. No 90-day notice of intention to sell
the lands for the exercise of the right of pre-emption prescribed by section
11 of the Agricultural Land Reform Code (Republic Act No. 3844, enacted
on August 8, 1963) was given by respondent-vendor to petitioners-tenants.
Subsequently, the deeds of sale executed by respondent-vendor were
registered by respondents register of deeds and provincial assessor of
Batangas in the records of their respective offices notwithstanding the nonexecution by respondent-vendor of the affidavit required by section 13 of
the Land Reform Code. 2 The actions for redemption were timely filled on
March 26, 1965 by petitioners-tenants within the two-year prescriptive
period from registration of the sale, prescribed by section 12 of the said
Code.
The agrarian court rendered on July 19, 1965 two identical decisions
dismissing the petitions for redemption.
It correctly focused on the sole issue of law as follows: "(T)he only issue in
this case is whether or not plaintiffs, as share tenants, are entitled to
redeem the parcel of land they are working from the purchasers thereof,
where no notice was previously given to them by the vendor, who was their
landholder, of the latter's intention to sell the property and where the
vendor did not execute the affidavit required by Sec. 13 of Republic Act No.

3844 before the registration of the deed of sale. In other words, is the right
of redemption granted by Sec. 12 of Republic Act No. 3844 applicable to
share tenants?"
But proceeding from several erroneous assumptions and premises, it
arrived at its erroneous conclusion that the right of redemption granted by
section 12 of the Land Reform Code is available to leasehold tenants only
but not to share tenants, and thus dismissed the petitions: "(S)ec 12 of
Republic Act No. 3844, which comes under Chapter I of said Act, under the
heading 'Agricultural Leasehold System,' reads as follows:
'SEC. 12. Lessee's Right of Redemption. In case the landholding is sold
to a third person without the knowledge of the agricultural lessee, the
latter shall have the right to redeem the same at a reasonable price and
consideration: Provided: further, That where there are two or more
agricultural lessees, each shall be entitled to said right of redemption only
to the extent of the area actually cultivated by him. The right of
redemption under this Section may be exercised within two years from the
registration of the sale, and shall have priority over any other right of legal
redemption.'
The systems of agricultural tenancy recognized in this jurisdiction are
share tenancy and leasehold tenancy. (Sec. 4, Republic Act No. 1199; Sec.
4, Republic Act No. 3844). A share tenant is altogether different from a
leasehold tenant and their respective rights and obligations are not coextensive or co-equal. (See Secs. 22 to 41, inclusive, and Secs. 42 to 48,
inclusive, of Republic Act No. 1199; see also Secs. 4 to 38, inclusive, of
Republic Act No. 3844).
It is our considered view that the right of redemption granted by Section 12
of Republic Act No. 3844 is applicable to leasehold tenants only, but not to
share tenants, because said provision of law clearly, definitely, and
unequivocally grants said right to the 'agricultural lessee,' and to nobody
else. In enacting the Agricultural Land Reform Code, Congress was fully
aware of the existence of share tenancy and in fact provided for the
abolition of the agricultural share tenancy system. (Sec. 4, Republic Act No.
3844.) If it were the intention of Congress to grant the right of redemption
to share tenants, it would have unmistakably and unequivocally done so.
We cannot extend said right to share tenants through judicial legislation,
wherever our sympathies may lie.
The agrarian court fell into several erroneous assumptions and premises in
holding that agricultural share tenancy remains recognized in this
jurisdiction; that "a share tenant is altogether different from a leasehold
tenant and their respective rights and obligations are not co-extensive or
co-equal"; and that the right of redemption granted by section 12 of the
Land Reform Code" is applicable to leasehold tenants only, but not to share
tenants, because said provision of law clearly, definitely, and unequivocally
grants said right to the 'agricultural lessee,' and to nobody else."
1. The very essence of the Agricultural Land Reform Code is the abolition of
agricultural share tenancy as proclaimed in its title. Section 4 of the Code
expressly outlaws agricultural share tenancy as "contrary to public policy"
and decrees its abolition. 3 Section 2 of the Code expressly declares it to
be the policy of the State, inter alia, "to establish owner cultivatorship and
the economic family-size farm as the basis of Philippine agriculture and, as
a consequence, divert landlord capital in agriculture to industrial

development; to achieve a dignified existence for the small farmers free

from pernicious institutional restraints and practices; ... and to make the
small farmers more independent, self-reliant and responsible citizens, and
a source of strength in our democratic society." 4 It was error, therefore, for
the agrarian court to state the premise after the Land Reform Code had
already been enacted, that "the systems of agricultural tenancy recognized
in this jurisdiction are share tenancy and leasehold tenancy." A more
accurate statement of the premise is that based on the transitory provision
in the first proviso of section 4 of the Code, i.e. that existing share tenancy
contracts are allowed to continue temporarily in force and effect,
notwithstanding their express abolition, until whichever of the following
events occurs earlier: (a) the end of the agricultural year when the National
Land Reform Council makes the proclamation declaring the region or
locality a land reform area; or (b) the shorter period provided in the share
tenancy contracts expires; or (c) the share tenant sooner exercises his
option to elect the leasehold system.
In anticipation of the expiration of share tenancy contracts whether by
contractual stipulation or the tenant's exercise of his option to elect the
leasehold system instead or by virtue of their nullity occuring before the
proclamation of the locality as a land reform area, the same section 4 has
further declared in the third proviso thereof that in such event, the tenant
shall continue in possession of the land for cultivation and "there shall be
presumed to exist a leasehold relationship under the provisions of this
Code."
2. The foregoing exposes the error of the agrarian court's corollary premise
that "a share tenant is altogether different from a leasehold tenant." The
agrarian court's dictum that "their respective rights and obligations are not
co-extensive or co-equal "refer to their contractual relations with the
landowner, with respect to the contributions given, management, division
or payment of the produce. 5
But the Land Reform Code forges by operation of law, between the
landowner and the farmer be a leasehold tenant or temporarily a share
tenant a vinculum juris with certain vital juridical consequences, such as
security of tenure of the tenant and the tenant's right to continue in
possession of the land he works despite the expiration of the contract or
the sale or transfer of the land to third persons, and now, more basically,
the farmer's pre-emptive right to buy the land he cultivates under section
11 of the Code 6 as well as the right to redeem the land, if sold to a third
person without his knowledge, under section 12 of the Code.
This is an essential and indispensable mandate of the Code to implement
the state's policy of establishing owner-cultivatorship and to achieve a
dignified and self-reliant existence for the small farmers that would make
them a pillar of strength of our Republic. Aside from expropriation by the
Land Authority of private agricultural land for resale in economic familysize farm units "to bona fide tenants, occupants and qualified farmers," 7
the purchase by farmers of the lands cultivated by them, when the owner
decides to sell the same through rights of pre-emption and redemption
are the only means prescribed by the Code to achieve the declared
policy of the State.
3. The agrarian court therefore facilely let itself fall into the error of
concluding that the right of redemption (as well as necessarily the right of

pre-emption) imposed by the Code is available to leasehold tenants only

and excludes share tenants for the literal reason that the Code grants said
rights only to the "agricultural lessee and to nobody else." For one, it
immediately comes to mind that the Code did not mention tenants,
whether leasehold or share tenants, because it outlaws share tenancy and
envisions the agricultural leasehold system as its replacement. Thus,
Chapter I of the Code, comprising sections 4 to 38, extensively deals with
the establishment of "agricultural leasehold relation," defines the parties
thereto and the rights and obligations of the "agricultural lessor" and of the
"agricultural lessee" (without the slightest mention of leasehold tenants)
and the statutory consideration or rental for the leasehold to be paid by
the lessee. There is a studied omission in the Code of the use of the term
tenant in deference to the "abolition of tenancy" as proclaimed in the very
title of the Code, and the elevation of the tenant's status to that of lessee.
Then, the terms "agricultural lessor" and "agricultural lessee" are
consistently used throughout the Chapter and carried over the particular
sections (11 and 12) on pre-emption and redemption. The agrarian court's
literal construction would wreak havoc on and defeat the proclaimed and
announced legislative intent and policy of the State of establishing ownercultivatorship for the farmers, who invariably were all share tenants before
the enactment of the Code and whom the Code would now uplift to the
status of lessees.
A graphic instance of this fallacy would be found in section 11 providing
that "In case the agricultural lessor decides to sell the landholding the
agricultural lessee shall have the preferential right to buy the same under
reasonable terms and conditions." It will be seen that the term "agricultural
lessor" is here used interchangeably with the term "landowner"; which
conflicts with the Code's definition of "agricultural lessor" to mean "a
person natural or juridical, who, either as owner, civil law lessee,
usufructuary, or legal possessor, lets or grants to another the cultivation
and use of his land for a price certains." 8 Obviously, the Code precisely
referred to the "agricultural lessor (who) decides to sell the landholding,"
when it could have more precisely referred to the "landowner," who alone
as such, rather than a civil law lessee, usufructuary or legal possessor,
could sell the landholding, but it certainly cannot be logically contended
that the imprecision should defeat the clear spirit and intent of the
provision.
4. We have, here, then a case of where the true intent of the law is clear
that calls for the application of the cardinal rule of statutory construction
that such intent or spirit must prevail over the letter thereof, for whatever
is within the spirit of a statute is within the statute, since adherence to the
letter would result in absurdity, injustice and contradictions and would
defeat the plain and vital purpose of the statute.
Section 11 of the Code providing for the "agricultural lessee's" preferential
right to buy the land he cultivates provides expressly that "the entire
landholding offered for sale must be pre-empted by the Land Authority if
the landowner so desires, unless the majority of the lessees object to such
acquisition," presumably for being beyond their capabilities. Taken together
with the provisions of Chapter III of the Code on the organization and
functions of the Land Authority and Chapter VII on the Land Project
Administration and the creation and functions of the National Land Reform

Council, (in which chapters the legislature obviously was not laboring under
the inhibition of referring to the term tenants as it was in Chapter I
establishing the agricultural leasehold system and decreeing the abolition
of share tenancy, 9 the Code's intent, policy and objective to give both
agricultural lessees and farmers who transitionally continue to be share
tenants notwithstanding the Code's enactment, the same priority and
preferential rights over the lands under their cultivation, in the event of
acquisition of the lands, by expropriation or voluntary sale, for distribution
or resale that may be initiated by the Land Authority or the National Land
Reform Council, are clearly and expressly stated.
Thus Chapter III, section 51 of the Code decrees it the responsibility of the
Land Authority "(1) To initiate and prosecute expropriation proceedings for
the acquisition of private agricultural lands as defined in Section one
hundred sixty-six of chapter XI of this Code for the purpose of subdivision
into economic family size farm units and resale of said farm units to
bona fide tenants, occupants and qualified farmers ... and "(2) To help
bona fide farmers without lands of agricultural owner-cultivators of
uneconomic-size farms to acquire and own economic family-size farm units
...."
Similarly, Chapter VII, section 128 of the Code, in enjoining the National
Land Reform Council to formulate the necessary rules and regulations to
implement the Code's provisions for selection of agricultural land to be
acquired and distributed and of the beneficiaries of the family farms,
ordains the giving of the same priority "to the actual occupants personally
cultivating the land either as agricultural lessees or otherwise with respect
to the area under their cultivation."
5. It would certainly result in absurdity, contradictions and injustice if a
share tenant would be denied the rights of pre-emption and redemption
which he seeks to exercise on his own resources, notwithstanding that the
National Land Reform Council has not yet proclaimed that all the
government machineries and agencies in the region or locality envisioned
in the Code are operating which machineries and agencies, particularly,
the Land Bank were precisely created "to finance the acquisition by the
Government of landed estates for division and resale to small landholders,
as well as the purchase of the landholding by the agricultural lessee from
the landowner." 10 The non-operation in the interval of the Land Bank and
the government machineries and agencies in the region which are
envisioned in the Code to assist the share tenant in shedding off the yoke
of tenancy and afford him the financial assistance to exercise his option of
electing the leasehold system and his preferential right of purchasing the
land cultivated by him could not possibly have been intended by Congress
to prevent the exercise of any of these vital rights by a share tenant who is
able to do so, e.g. to purchase the land, on his own and without
government assistance. It would be absurd and unjust that while the
government is unable to render such assistance, the share tenant would be
deemed deprived of the very rights granted him by the Code which he is in
a position to exercise even without government assistance.
6. Herein lies the distinction between the present case and Basbas vs.
Entena 11 where the Court upheld the agrarian court's dismissal of the
therein tenant's action to redeem the landholding sold to a third party by
virtue of the tenant's failure to tender payment or consign the purchase

price of the property. There, the tenant-redemptioner was shown by the

evidence to have no funds and had merely applied for them to the Land
Authority which was not yet operating in the locality and hence, the Court
held that no part of the Code "indicates or even hints that the 2-year
redemption period will not commence to run (indefinitely) until the tenant
obtains financing from the Land Bank, or stops the tenant from securing
redemption funds from some other source." 12 In the present case, the
petitioners-tenants' possession of funds and compliance with the
requirements of redemption are not questioned, the case having been
submitted and decided on the sole legal issue of the right of redemption
being available to them as share tenants. The clear and logical implication
of Basbas is where the tenant has his own resources or secures redemption
funds from sources other than the Land Bank or government agencies
under the Code, the fact that the locality has not been proclaimed a land
reform area and that such government machineries and agencies are not
operating therein is of no relevance and cannot prejudice the tenant's
rights under the Code to redeem the landholding.
7. Even from the landowner's practical and equitable viewpoint, the
landowner is not prejudiced in the least by recognizing the share tenant's
right of redemption. The landowner, having decided to sell his land, has
gotten his price therefor from his vendees. (The same holds true in case of
the tenant's exercise of the pre-emptive right by the tenant who is called
upon to pay the landowner the price, if reasonable, within ninety days from
the landowner's written notice.) As for the vendees, neither are they
prejudiced for they will get back from the tenant-redemptioner the price
that they paid the vendor, if reasonable, since the Code grants the
agricultural lessee or tenant the top priority of redemption of the
landholding cultivated by him and expressly decrees that the same "shall
have priority over any other right of legal redemption." In the absence of
any provision in the Code as to manner of and amounts payable on
redemption, the pertinent provisions of the Civil Code apply in a suppletory
character. 13 Hence, the vendees would be entitled to receive from the
redemptioners the amount of their purchase besides "(1) the expenses of
the contract, and any other legitimate payments made by reason of the
sale; (and) (2) the necessary and useful expenses made on the thing sold."
14

8. The historical background for the enactment of the Code's provisions on

pre-emption and redemption further strengthens the Court's opinion. It is
noted by Dean Montemayor 15 that "(T)his is a new right which has not
been granted to tenants under the Agricultural Tenancy Act. It further
bolsters the security of tenure of the agricultural lessee and further
encourages agricultural lessees to become owner-cultivators.
In the past, a landlord often ostensibly sold his land being cultivated by his
tenant to another tenant, who in turn filed a petition for ejectment against
the first tenant on the ground of personal cultivation. While many of such
sales were simulated, there was a formal transfer of title in every case, and
the first tenant was invariably ordered ejected.
There is indication in this case of the same pattern of sale by the
landowner to another tenant, 16 in order to effect the ejectment of
petitioners-tenants. This is further bolstered by the fact that the sales were
executed by respondent-vendor on September 27, 1963 and March 2, 1954

shortly after the enactment on August 8, 1963 of the Land Reform Code
which furnishes still another reason for upholding ... petitioners-tenants'
right of redemption, for certainly a landowner cannot be permitted to
defeat the Code's clear intent by precipitately disposing of his lands, even
before the tenant has been given the time to exercise his newly granted
option to elect the new agricultural leasehold system established by the
Code as a replacement for the share tenancy outlawed by it.
9. Clearly then, the Code intended, as above discussed, to afford the
farmers' who transitionally continued to be share tenants after its
enactment but who inexorably would be agricultural lessees by virtue of
the Code's proclaimed abolition of tenancy, the same priority and
preferential right as those other share tenants, who upon the enactment of
the Code or soon thereafter were earlier converted by fortuitous
circumstance into agricultural lessees, to acquire the lands under their
cultivation in the event of their voluntary sale by the owner or of their
acquisition, by expropriation or otherwise, by the Land Authority. It then
becomes the court's duty to enforce the intent and will of the Code, for "...
(I)n fact, the spirit or intention of a statute prevails over the letter thereof.'
(Taada vs. Cuenco, L-10520, Feb. 23, 1957, citing 82 C.J.S., p. 526.) A
statute 'should be construed according to its spirit or intention,
disregarding as far as necessary, the letter of the law.' (Lopez & Sons, Inc.
vs. Court of Tax Appeals, 100 Phil. 855.) By this, we do not correct the act
of the Legislature, but rather ... carry out and give due course to 'its intent.'
(Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 850)." 17 The Court
has consistently held in line with authoritative principles of statutory
construction that, it will reject a narrow and literal interpretation, such as
that given by the agrarian court, that would defeat and frustrate rather
than foster and give life to the law's declared policy and intent. 18 Finally,
under the established jurisprudence of the Court, in the interpretation of
tenancy and labor legislation, it will be guided by more than just an inquiry
into the letter of the law as against its spirit and will ultimately resolve
grave doubts in favor of the tenant and worker. 19
The agrarian court's dismissal of the cases at bar should therefore be
reversed and petitioners-tenants' right to redeem the landholdings
recognized section 12 of the Code.
In Case L-25326, however, the deed of sale executed by respondentvendor in favor of respondents-vendees for the price of P4,000.00 covers
three parcels of land, while what is sought to be redeemed is only the first
parcel of land of 22,876 square meters, described in the deed. Petitionerstenants' allegation that the proportionate worth of said parcel "taking into
account the respective areas, productivities, accessibilities and assessed
values of the three lots," is P1,500.00, was traversed by respondents in
their answer, with the claim that "the said land is fairly worth P20,000.00.
20
While the vendor would be bound by, and cannot claim more than, the

price stated in the deed, and the Code precisely provides that the farmer
shall have "the preferential right to buy the (landholding) under reasonable
terms and conditions" or "redeem the same at a reasonable price and
consideration" 21 with a view to affording the farmer the right to seek
judicial assistance and relief to fix such reasonable price and terms when
the landowner places in the notice to sell or deed an excessive or
exorbitant amount in collusion with the vendee, we note that in this case
the deed of sale itself acknowledged that the selling price of P4,000.00
therein stated was not the fair price since an additional consideration
therein stated was that the vendees would support the vendor during his
lifetime and take care of him, should he fall ill, and even assumed the
expenses of his burial upon his death:
Ang halagang P4,000.00 ay hindi kaulat sa tunay na halaga ng mga lupa
subalit ang mga bumili ay may katungkulan na sostentohin ako habang
ako'y nabubuhay, ipaanyo at ipagamot ako kung ako ay may sakit, saka
ipalibing ako kung ako ay mamatay sa kanilang gastos at ito ay isa sa
alang-alang o consideracion ng bilihang ito.
Under these circumstances, since the agrarian court did not rule upon
conflicting claims of the parties as to what was the proportionate worth of
the parcel of land in the stated price of P4,000.00 whether P1,500.00 as
claimed by petitioners or a little bit more, considering the proportionate
values of the two other parcels, but the whole total is not to exceed the
stated price of P4,000.00, since the vendor is bound thereby and
likewise, what was the additional proportionate worth of the expenses
assumed by the vendees, assuming that petitioners are not willing to
assume the same obligation, the case should be remanded to the agrarian
court solely for the purpose of determining the reasonable price and
consideration to be paid by petitioners for redeeming the landholding, in
accordance with these observations.
In Case L-25327, there is no question as to the price of P750.00 paid by the
vendees and no additional consideration or expenses, unlike in Case L25326, supra, assumed by the vendees. Hence, petitioners therein are
entitled to redeem the landholding for the same stated price.
ACCORDINGLY, the decisions appealed from are hereby reversed, and the
petitions to redeem the subject landholdings are granted.
In Case L-25326, however, the case is remanded to the agrarian court
solely for determining the reasonable price to be paid by petitioners
therein to respondents-vendees for redemption of the landholding in
accordance with the observations hereinabove made.
No pronouncement as to costs.