1

1. G.R. No. 103302 August 12, 1993

against NATALIA and EDIC before the DAR Regional Adjudicator

to restrain petitioners from developing areas under cultivation by
NATALIA REALTY, INC., AND ESTATE DEVELOPERS AND SAMBA members. 8 The Regional Adjudicator temporarily
INVESTORS CORP., petitioners,
restrained petitioners from proceeding with the development of the
vs.
subdivision. Petitioners then moved to dismiss the complaint; it was
DEPARTMENT OF AGRARIAN REFORM, SEC. BENJAMIN T.denied. Instead, the Regional Adjudicator issued on 5 March 1991 a
LEONG and DIR. WILFREDO LEANO, DAR REGION IV,Writ of Preliminary Injunction.
respondents.
Petitioners NATALIA and EDIC elevated their cause to the DAR
Lino M. Patajo for petitioners.
Adjudication Board (DARAB); however, on 16 December 1991 the
DARAB merely remanded the case to the Regional Adjudicator for
The Solicitor General for respondents.
further proceedings. 9
In the interim, NATALIA wrote respondent Secretary of Agrarian
Reform reiterating its request to set aside the Notice of Coverage.
Neither respondent Secretary nor respondent Director took action on
BELLOSILLO, J.:
the protest-letters, thus compelling petitioners to institute this
Are lands already classified for residential, commercial or industrial proceeding more than a year thereafter.
use, as approved by the Housing and Land Use Regulatory Board
and its precursor agencies 1 prior to 15 June 1988, 2 covered by NATALIA and EDIC both impute grave abuse of discretion to
R.A. 6657, otherwise known as the Comprehensive Agrarianrespondent DAR for including undedeveloped portions of the
Reform Law of 1988? This is the pivotal issue in this petition for Antipolo Hills Subdivision within the coverage of the CARL. They
certiorari assailing the Notice of Coverage 3 of the Department of argue that NATALIA properties already ceased to be agricultural
Agrarian Reform over parcels of land already reserved as townsite lands when they were included in the areas reserved by presidential
fiat for the townsite reservation.
areas before the enactment of the law.
Petitioner Natalia Realty, Inc. (NATALIA, for brevity) is the owner Public respondents through the Office of the Solicitor General
of three (3) contiguous parcels of land located in Banaba, Antipolo, dispute this contention. They maintain that the permits granted
Rizal, with areas of 120.9793 hectares, 1.3205 hectares and 2.7080 petitioners were not valid and binding because they did not comply
hectares, or a total of 125.0078 hectares, and embraced in Transfer with the implementing Standards, Rules and Regulations of P.D.
Certificate of Title No. 31527 of the Register of Deeds of the 957, otherwise known as "The Subdivision and Condominium
Buyers Protective Decree," in that no application for conversion of
Province of Rizal.
the NATALIA lands from agricultural residential was ever filed with
On 18 April 1979, Presidential Proclamation No. 1637 set aside the DAR. In other words, there was no valid conversion. Moreover,
20,312 hectares of land located in the Municipalities of Antipolo, public respondents allege that the instant petition was prematurely
San Mateo and Montalban as townsite areas to absorb the filed because the case instituted by SAMBA against petitioners
population overspill in the metropolis which were designated as the before the DAR Regional Adjudicator has not yet terminated.
Lungsod Silangan Townsite. The NATALIA properties are situated Respondents conclude, as a consequence, that petitioners failed to
fully exhaust administrative remedies available to them before
within the areas proclaimed as townsite reservation.
coming to court.
Since private landowners were allowed to develop their properties
into low-cost housing subdivisions within the reservation, petitioner The petition is impressed with merit. A cursory reading of the
Estate Developers and Investors Corporation (EDIC, for brevity), as Preliminary Approval and Locational Clearances as well as the
developer of NATALIA properties, applied for and was granted Development Permits granted petitioners for Phases I, II and III of
preliminary approval and locational clearances by the Human the Antipolo Hills Subdivision reveals that contrary to the claim of
Settlements Regulatory Commission. The necessary permit for public respondents, petitioners NATALIA and EDIC did in fact
Phase I of the subdivision project, which consisted of 13.2371 comply with all the requirements of law.
hectares, was issued sometime in 1982; 4 for Phase II, with an area
of 80,000 hectares, on 13 October 1983; 5 and for Phase III, which Petitioners first secured favorable recommendations from the
consisted of the remaining 31.7707 hectares, on 25 April 1986. 6 Lungsod Silangan Development Corporation, the agency tasked to
Petitioner were likewise issued development permits 7 after oversee the implementation of the development of the townsite
complying with the requirements. Thus the NATALIA properties reservation, before applying for the necessary permits from the
Human Settlements Regulatory
later became the Antipolo Hills Subdivision.
Commission. 10 And, in all permits granted to petitioners, the
On 15 June 1988, R.A. 6657, otherwise known as the Commission
"Comprehensive Agrarian Reform Law of 1988" (CARL, for stated invariably therein that the applications were in "conformance"
brevity), went into effect. Conformably therewith, respondent 11 or "conformity" 12 or "conforming" 13 with the implementing
Department of Agrarian Reform (DAR, for brevity), through its Standards, Rules and Regulations of P.D. 957. Hence, the argument
Municipal Agrarian Reform Officer, issued on 22 November 1990 a of public respondents that not all of the requirements were complied
Notice of Coverage on the undeveloped portions of the Antipolo with cannot be sustained.
Hills Subdivision which consisted of roughly 90.3307 hectares.
NATALIA immediately registered its objection to the notice of As a matter of fact, there was even no need for petitioners to secure
a clearance or prior approval from DAR. The NATALIA properties
Coverage.
were within the areas set aside for the Lungsod Silangan
EDIC also protested to respondent Director Wilfredo Leano of the Reservation. Since Presidential Proclamation No. 1637 created the
DAR Region IV Office and twice wrote him requesting the townsite reservation for the purpose of providing additional housing
to the burgeoning population of Metro Manila, it in effect converted
cancellation of the Notice of Coverage.
for residential use what were erstwhile agricultural lands provided
On 17 January 1991, members of the Samahan ng Magsasaka sa all requisites were met. And, in the case at bar, there was
Bundok Antipolo, Inc. (SAMBA, for the brevity), filed a complaint compliance with all relevant rules and requirements. Even in their
applications for the development of the Antipolo Hills Subdivision,

2
the predecessor agency of HLURB noted that petitioners NATALIA meaning and intent of Section 3 (c) of R.A. No. 6657. " Not being
and EDIC complied with all the requirements prescribed by P.D. deemed "agricultural lands," they are outside the coverage of
957.
CARL.
The implementing Standards, Rules and Regulations of P.D. 957 Anent the argument that there was failure to exhaust administrative
applied to all subdivisions and condominiums in general. On the remedies in the instant petition, suffice it to say that the issues raised
other hand, Presidential Proclamation No. 1637 referred only to the in the case filed by SAMBA members differ from those of
Lungsod Silangan Reservation, which makes it a special law. It is a petitioners. The former involve possession; the latter, the propriety
basic tenet in statutory construction that between a general law and of including under the operation of CARL lands already converted
a special law, the latter prevails. 14
for residential use prior to its effectivity.
Interestingly, the Office of the Solicitor General does not contest the Besides, petitioners were not supposed to wait until public
conversion of portions of the Antipolo Hills Subdivision which have respondents acted on their letter-protests, this after sitting it out for
already been developed. 15 Of course, this is contrary to its earlier almost a year. Given the official indifference, which under the
position that there was no valid conversion. The applications for the circumstances could have continued forever, petitioners had to act to
developed and undeveloped portions of subject subdivision were assert and protect their interests. 20
similarly situated. Consequently, both did not need prior DAR
approval.
In fine, we rule for petitioners and hold that public respondents
gravely abused their discretion in issuing the assailed Notice of
We now determine whether such lands are covered by the CARL. Coverage of 22 November 1990 by of lands over which they no
Section 4 of R.A. 6657 provides that the CARL shall "cover, longer have jurisdiction.
regardless of tenurial arrangement and commodity produced, all
public and private agricultural lands." As to what constitutes WHEREFORE, the petition for Certiorari is GRANTED. The
"agricultural land," it is referred to as "land devoted to agricultural Notice of Coverage of 22 November 1990 by virtue of which
activity as defined in this Act and not classified as mineral, forest, undeveloped portions of the Antipolo Hills Subdivision were placed
residential, commercial or industrial land." 16 The deliberations of under CARL coverage is hereby SET ASIDE.
the Constitutional Commission confirm this limitation.
"Agricultural lands" are only those lands which are "arable and SO ORDERED.
suitable agricultural lands" and "do not include commercial,
industrial and residential lands." 17
Based on the foregoing, it is clear that the undeveloped portions of
the Antipolo Hills Subdivision cannot in any language be considered
as "agricultural lands." These lots were intended for residential use.
They ceased to be agricultural lands upon approval of their
inclusion in the Lungsod Silangan Reservation. Even today, the
areas in question continued to be developed as a low-cost housing
subdivision, albeit at a snail's pace. This can readily be gleaned from
the fact that SAMBA members even instituted an action to restrain
petitioners from continuing with such development. The enormity of
the resources needed for developing a subdivision may have delayed
its completion but this does not detract from the fact that these lands
are still residential lands and outside the ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the
coverage of CARL. These include lands previously converted to
non-agricultural uses prior to the effectivity of CARL by
government agencies other than respondent DAR. In its Revised
Rules and Regulations Governing Conversion of Private
Agricultural Lands to Non-Agricultural Uses, 18 DAR itself defined
"agricultural land" thus
. . . Agricultural lands refers to those devoted to agricultural activity
as defined in R.A. 6657 and not classified as mineral or forest by the
Department of Environment and Natural Resources (DENR) and its
predecessor agencies, and not classified in town plans and zoning
ordinances as approved by the Housing and Land Use Regulatory
Board (HLURB) and its preceding competent authorities prior to 15
June 1988 for residential, commercial or industrial use.
Since the NATALIA lands were converted prior to 15 June 1988,
respondent DAR is bound by such conversion. It was therefore error
to include the undeveloped portions of the Antipolo Hills
Subdivision within the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a query by
the Secretary of Agrarian Reform, noted in an Opinion 19 that lands
covered by Presidential Proclamation No. 1637, inter alia, of which
the NATALIA lands are part, having been reserved for townsite
purposes "to be developed as human settlements by the proper land
and housing agency," are "not deemed 'agricultural lands' within the

3
2. EN BANC
[G.R. No. 86889 : December 4, 1990.]

injunctive relief, after the filing and approval by this Court of an

injunction bond in the amount of P100,000.00. This Court also gave
due course to the petition and required the parties to file their
respective memoranda (Rollo, p. 119).

192 SCRA 51
The petitioner filed its Memorandum on September 6, 1989 (Rollo,
LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARYpp. 131-168).
OF THE DEPARTMENT OF AGRARIAN REFORM, Respondent.
On December 22, 1989, the Solicitor General adopted his Comment
to the petition as his Memorandum (Rollo, pp. 186-187).
DECISION

PARAS, J.:

Luz Farms questions the following provisions of R.A. 6657, insofar

as they are made to apply to it:
(a) Section 3(b) which includes the "raising of livestock (and
poultry)" in the definition of "Agricultural, Agricultural Enterprise
or Agricultural Activity."

(b) Section 11 which defines "commercial farms" as "private

agricultural lands devoted to commercial, livestock, poultry and
This is a petition for prohibition with prayer for restraining order swine raising . . ."
and/or preliminary and permanent injunction against the Honorable
Secretary of the Department of Agrarian Reform for acting without (c) Section 13 which calls upon petitioner to execute a productionjurisdiction in enforcing the assailed provisions of R.A. No. 6657, sharing plan.
otherwise known as the Comprehensive Agrarian Reform Law of
1988 and in promulgating the Guidelines and Procedure (d) Section 16(d) and 17 which vest on the Department of Agrarian
Implementing Production and Profit Sharing under R.A. No. 6657, Reform the authority to summarily determine the just compensation
insofar as the same apply to herein petitioner, and further from to be paid for lands covered by the Comprehensive Agrarian Reform
performing an act in violation of the constitutional rights of the Law.
petitioner.
(e) Section 32 which spells out the production-sharing plan
As gathered from the records, the factual background of this case, is mentioned in Section 13
as follows:
". . . (W)hereby three percent (3%) of the gross sales from the
On June 10, 1988, the President of the Philippines approved R.A. production of such lands are distributed within sixty (60) days of the
No. 6657, which includes the raising of livestock, poultry and swine end of the fiscal year as compensation to regular and other
farmworkers in such lands over and above the compensation they
in its coverage (Rollo, p. 80).
currently receive: Provided, That these individuals or entities realize
On January 2, 1989, the Secretary of Agrarian Reform promulgated gross sales in excess of five million pesos per annum unless the
the Guidelines and Procedures Implementing Production and Profit DAR, upon proper application, determine a lower ceiling.
Sharing as embodied in Sections 13 and 32 of R.A. No. 6657
In the event that the individual or entity realizes a profit, an
(Rollo, p. 80).
additional ten (10%) of the net profit after tax shall be distributed to
On January 9, 1989, the Secretary of Agrarian Reform promulgated said regular and other farmworkers within ninety (90) days of the
its Rules and Regulations implementing Section 11 of R.A. No. end of the fiscal year . . ."
6657 (Commercial Farms). (Rollo, p. 81).
The main issue in this petition is the constitutionality of Sections
Luz Farms, petitioner in this case, is a corporation engaged in the 3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive Agrarian
livestock and poultry business and together with others in the same Reform Law of 1988), insofar as the said law includes the raising of
business allegedly stands to be adversely affected by the livestock, poultry and swine in its coverage as well as the
enforcement of Section 3(b), Section 11, Section 13, Section 16(d) Implementing Rules and Guidelines promulgated in accordance
and 17 and Section 32 of R.A. No. 6657 otherwise known as therewith.:-cralaw
Comprehensive Agrarian Reform Law and of the Guidelines and
Procedures Implementing Production and Profit Sharing under R.A. The constitutional provision under consideration reads as follows:
No. 6657 promulgated on January 2, 1989 and the Rules and
Regulations Implementing Section 11 thereof as promulgated by the ARTICLE XIII
DAR on January 9, 1989 (Rollo, pp. 2-36).: rd
x x x
Hence, this petition praying that aforesaid laws, guidelines and rules
be declared unconstitutional. Meanwhile, it is also prayed that a writ AGRARIAN AND NATURAL RESOURCES REFORM
of preliminary injunction or restraining order be issued enjoining
public respondents from enforcing the same, insofar as they are Section 4. The State shall, by law, undertake an agrarian reform
made to apply to Luz Farms and other livestock and poultry raisers. program founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands they till
This Court in its Resolution dated July 4, 1939 resolved to deny, or, in the case of other farmworkers, to receive a just share of the
among others, Luz Farms' prayer for the issuance of a preliminary fruits thereof. To this end, the State shall encourage and undertake
injunction in its Manifestation dated May 26, and 31, 1989. (Rollo, the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may
p. 98).
prescribe, taking into account ecological, developmental, or equity
Later, however, this Court in its Resolution dated August 24, 1989 considerations, and subject to the payment of just compensation. In
resolved to grant said Motion for Reconsideration regarding the determining retention limits, the State shall respect the rights of

4
small landowners. The State shall further provide incentives for subject of the deliberation, goes a long way toward explaining the
voluntary land-sharing.
understanding of the people when they ratified it (Aquino, Jr. v.
Enrile, 59 SCRA 183 [1974]).
x x x"
The transcripts of the deliberations of the Constitutional
Luz Farms contended that it does not seek the nullification of R.A. Commission of 1986 on the meaning of the word "agricultural,"
6657 in its entirety. In fact, it acknowledges the correctness of the clearly show that it was never the intention of the framers of the
decision of this Court in the case of the Association of Small Constitution to include livestock and poultry industry in the
Landowners in the Philippines, Inc. vs. Secretary of Agrarian coverage of the constitutionally-mandated agrarian reform program
Reform (G.R. 78742, 14 July 1989) affirming the constitutionality of the Government.
of the Comprehensive Agrarian Reform Law. It, however, argued
that Congress in enacting the said law has transcended the mandate The Committee adopted the definition of "agricultural land" as
of the Constitution, in including land devoted to the raising of defined under Section 166 of R.A. 3844, as laud devoted to any
livestock, poultry and swine in its coverage (Rollo, p. 131). growth, including but not limited to crop lands, saltbeds, fishponds,
Livestock or poultry raising is not similar to crop or tree farming. idle and abandoned land (Record, CONCOM, August 7, 1986, Vol.
Land is not the primary resource in this undertaking and represents III, p. 11).
no more than five percent (5%) of the total investment of
commercial livestock and poultry raisers. Indeed, there are many The intention of the Committee is to limit the application of the
owners of residential lands all over the country who use available word "agriculture." Commissioner Jamir proposed to insert the word
space in their residence for commercial livestock and raising "ARABLE" to distinguish this kind of agricultural land from such
purposes, under "contract-growing arrangements," whereby lands as commercial and industrial lands and residential properties
processing corporations and other commercial livestock and poultry because all of them fall under the general classification of the word
raisers (Rollo, p. 10). Lands support the buildings and other "agricultural". This proposal, however, was not considered because
amenities attendant to the raising of animals and birds. The use of the Committee contemplated that agricultural lands are limited to
land is incidental to but not the principal factor or consideration in arable and suitable agricultural lands and therefore, do not include
productivity in this industry. Including backyard raisers, about 80% commercial, industrial and residential lands (Record, CONCOM,
of those in commercial livestock and poultry production occupy five August 7, 1986, Vol. III, p. 30).
hectares or less. The remaining 20% are mostly corporate farms
(Rollo, p. 11).
In the interpellation, then Commissioner Regalado (now a Supreme
Court Justice), posed several questions, among others, quoted as
On the other hand, the public respondent argued that livestock and follows:
poultry raising is embraced in the term "agriculture" and the
inclusion of such enterprise under Section 3(b) of R.A. 6657 is x x x
proper. He cited that Webster's International Dictionary, Second
Edition (1954), defines the following words:
"Line 19 refers to genuine reform program founded on the primary
right of farmers and farmworkers. I wonder if it means that
"Agriculture the art or science of cultivating the ground and leasehold tenancy is thereby proscribed under this provision because
raising and harvesting crops, often, including also, feeding, breedingit speaks of the primary right of farmers and farmworkers to own
and management of livestock, tillage, husbandry, farming.
directly or collectively the lands they till. As also mentioned by
Commissioner Tadeo, farmworkers include those who work in
It includes farming, horticulture, forestry, dairying, sugarmaking . . . piggeries and poultry projects.
Livestock domestic animals used or raised on a farm, especially I was wondering whether I am wrong in my appreciation that if
for profit.
somebody puts up a piggery or a poultry project and for that
purpose hires farmworkers therein, these farmworkers will
Farm a plot or tract of land devoted to the raising of domestic or automatically have the right to own eventually, directly or
other animals." (Rollo, pp. 82-83).
ultimately or collectively, the land on which the piggeries and
poultry projects were constructed. (Record, CONCOM, August 2,
The petition is impressed with merit.
1986, p. 618).
The question raised is one of constitutional construction. The x x x
primary task in constitutional construction is to ascertain and
thereafter assure the realization of the purpose of the framers in the The questions were answered and explained in the statement of then
adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure Commissioner Tadeo, quoted as follows:
Administration, 31 SCRA 413 [1970]).: rd
x x x
Ascertainment of the meaning of the provision of Constitution
begins with the language of the document itself. The words used in "Sa pangalawang katanungan ng Ginoo ay medyo hindi kami
the Constitution are to be given their ordinary meaning except nagkaunawaan. Ipinaaalam ko kay Commissioner Regalado na hindi
where technical terms are employed in which case the significance namin inilagay ang agricultural worker sa kadahilanang kasama rito
thus attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure ang piggery, poultry at livestock workers. Ang inilagay namin dito
Administration, 31 SCRA 413 [1970]).
ay farm worker kaya hindi kasama ang piggery, poultry at livestock
workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is generally held that, in construing constitutional provisions
which are ambiguous or of doubtful meaning, the courts may It is evident from the foregoing discussion that Section II of R.A.
consider the debates in the constitutional convention as throwing 6657 which includes "private agricultural lands devoted to
light on the intent of the framers of the Constitution. It is true that commercial livestock, poultry and swine raising" in the definition of
the intent of the convention is not controlling by itself, but as its "commercial farms" is invalid, to the extent that the aforecited agroproceeding was preliminary to the adoption by the people of the industrial activities are made to be covered by the agrarian reform
Constitution the understanding of the convention as to what was program of the State. There is simply no reason to include livestock
meant by the terms of the constitutional provision which was the and poultry lands in the coverage of agrarian reform. (Rollo, p. 21).

5
Separate Opinions
Hence, there is merit in Luz Farms' argument that the requirement in
Sections 13 and 32 of R.A. 6657 directing "corporate farms" which
include livestock and poultry raisers to execute and implement
"production-sharing plans" (pending final redistribution of their SARMIENTO, J., concurring:
landholdings) whereby they are called upon to distribute from three
percent (3%) of their gross sales and ten percent (10%) of their net I agree that the petition be granted.
profits to their workers as additional compensation is unreasonable
for being confiscatory, and therefore violative of due process (Rollo, It is my opinion however that the main issue on the validity of the
p. 21).:-cralaw
assailed provisions of R.A. 6657 (the Comprehensive Agrarian
Reform Law of 1988) and its Implementing Rules and Guidelines
It has been established that this Court will assume jurisdiction over insofar as they include the raising of livestock, poultry, and swine in
a constitutional question only if it is shown that the essential their coverage cannot be simplistically reduced to a question of
requisites of a judicial inquiry into such a question are first satisfied. constitutional construction.
Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the It is a well-settled rule that construction and interpretation come
constitutional question must have been opportunely raised by the only after it has been demonstrated that application is impossible or
proper party, and the resolution of the question is unavoidably inadequate without them. A close reading however of the
necessary to the decision of the case itself (Association of Small constitutional text in point, specifically, Sec. 4, Art. XIII,
Landowners of the Philippines, Inc. v. Secretary of Agrarian particularly the phrase, ". . . in case of other farmworkers, to receive
Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, a just share of the fruits thereof," provides a basis for the clear and
G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRApossible coverage of livestock, poultry, and swine raising within the
343).
ambit of the comprehensive agrarian reform program. This accords
with the principle that every presumption should be indulged in
However, despite the inhibitions pressing upon the Court when favor of the constitutionality of a statute and the court in considering
confronted with constitutional issues, it will not hesitate to declare a the validity of a statute should give it such reasonable construction
law or act invalid when it is convinced that this must be done. In as can be reached to bring it within the fundamental law. 1
arriving at this conclusion, its only criterion will be the Constitution
and God as its conscience gives it in the light to probe its meaning The presumption against unconstitutionality, I must say, assumes
and discover its purpose. Personal motives and political greater weight when a ruling to the contrary would, in effect, defeat
considerations are irrelevancies that cannot influence its decisions. the laudable and noble purpose of the law, i.e., the welfare of the
Blandishment is as ineffectual as intimidation, for all the awesome landless farmers and farmworkers in the promotion of social justice,
power of the Congress and Executive, the Court will not hesitate "to by the expedient conversion of agricultural lands into livestock,
make the hammer fall heavily," where the acts of these departments, poultry, and swine raising by scheming landowners, thus, rendering
or of any official, betray the people's will as expressed in the the comprehensive nature of the agrarian program merely illusory.
Constitution (Association of Small Landowners of the Philippines,
Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, The instant controversy, I submit, boils down to the question of
G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. whether or not the assailed provisions violate the equal protection
79777, 14 July 1989).
clause of the Constitution (Article II, section 1) which teaches
simply that all persons or things similarly situated should be treated
Thus, where the legislature or the executive acts beyond the scope alike, both as to rights conferred and responsibilities imposed. 2
of its constitutional powers, it becomes the duty of the judiciary to
declare what the other branches of the government had assumed to There is merit in the contention of the petitioner that substantial
do, as void. This is the essence of judicial power conferred by the distinctions exist between land directed purely to cultivation and
Constitution "(I)n one Supreme Court and in such lower courts as harvesting of fruits or crops and land exclusively used for livestock,
may be established by law" (Art. VIII, Section 1 of the 1935 poultry and swine raising, that make real differences, to wit:
Constitution; Article X, Section I of the 1973 Constitution and
which was adopted as part of the Freedom Constitution, and Article x x x
VIII, Section 1 of the 1987 Constitution) and which power this
Court has exercised in many instances (Demetria v. Alba, 148 No land is tilled and no crop is harvested in livestock and poultry
SCRA 208 [1987]).
farming. There are no tenants nor landlords, only employers and
employees.
PREMISES CONSIDERED, the instant petition is hereby
GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar Livestock and poultry do not sprout from land nor are they "fruits of
as the inclusion of the raising of livestock, poultry and swine in its the land."
coverage as well as the Implementing Rules and Guidelines
promulgated in accordance therewith, are hereby DECLARED null Land is not even a primary resource in this industry. The land input
and void for being unconstitutional and the writ of preliminaryis inconsequential that all the commercial hog and poultry farms
injunction issued is hereby MADE permanent.
combined occupy less than one percent (1%) (0.4% for piggery,
SO ORDERED.

0.2% for poultry) of the 5.45 million hectares of land supposedly

covered by the CARP. And most farms utilize only 2 to 5 hectares of
land.: nad

Fernan (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz,

Gancayco, Padilla, Bidin, Grio-Aquino, Medialdea and Regalado, In every respect livestock and poultry production is an industrial
JJ., concur.
activity. Its use of an inconsequential portion of land is a mere
incident of its operation, as in any other undertaking, business or
Feliciano, J., is on leave.
otherwise.

The fallacy of defining livestock and poultry production as an

agricultural enterprise is nowhere more evident when one considers

6
that at least 95% of total investment in these farms is in the form of
fixed assets which are industrial in nature.
These include (1) animal housing structures and facilities complete
with drainage, waterers, blowers, misters and in some cases even
piped-in music; (2) feedmills complete with grinders, mixers,
conveyors, exhausts, generators, etc.; (3) extensive warehousing
facilities for feeds and other supplies; (4) anti-pollution equipment
such as bio-gas and digester plants augmented by lagoons and
concrete ponds; (5) deepwells, elevated water tanks, pumphouses
and accessory facilities; (6) modern equipment such as sprayers,
pregnancy testers, etc.; (7) laboratory facilities complete with
expensive tools and equipment; and a myriad other such
technologically advanced appurtances.
How then can livestock and poultry farmlands be arable when such
are almost totally occupied by these structures?
The fallacy of equating the status of livestock and poultry
farmworkers with that of agricultural tenants surfaces when one
considers contribution to output. Labor cost of livestock and poultry
farms is no more than 4% of total operating cost. The 98% balance
represents inputs not obtained from the land nor provided by the
farmworkers inputs such as feeds and biochemicals (80% of the
total cost), power cost, cost of money and several others.
Moreover, livestock and poultry farmworkers are covered by
minimum wage law rather than by tenancy law. They are entitled to
social security benefits where tenant-farmers are not. They are paid
fixed wages rather than crop shares. And as in any other industry,
they receive additional benefits such as allowances, bonuses, and
other incentives such as free housing privileges, light and water.
Equating livestock and poultry farming with other agricultural
activities is also fallacious in the sense that like the manufacturing
sector, it is a market for, rather than a source of agricultural output.
At least 60% of the entire domestic supply of corn is absorbed by
livestock and poultry farms. So are the by-products of rice (ricebran), coconut (copra meal), banana (banana pulp meal), and fish
(fish meal). 3
x x x
In view of the foregoing, it is clear that both kinds of lands are not
similarly situated and hence, cannot be treated alike. Therefore, the
assailed provisions which allow for the inclusion of livestock and
poultry industry within the coverage of the agrarian reform program
constitute invalid classification and must accordingly be struck
down as repugnant to the equal protection clause of the
Constitution.

7
3. G.R. No. 100091 October 22, 1992

13,000 students, so that the school community has an academic

population (student, faculty and non-academic staff) of almost
CENTRAL MINDANAO UNIVERSITY REPRESENTED ITS 15,000. To cope with the increase in its enrollment, it has expanded
PRESIDENT DR. LEONARDO A. CHUA, petitioner,
and improved its educational facilities partly from government
vs.
appropriation and partly by self-help measures.
THE
DEPARTMENT
OF
AGRARIAN
REFORM
ADJUDICATION BOARD, THE COURT OF APPEALS and True to the concept of a land grant college, the school embarked on
ALVIN OBRIQUE, REPRESENTING BUKIDNON FREE self-help measures to carry out its educational objectives, train its
FARMERS AGRICULTURAL LABORERS ORGANIZATIONstudents, and maintain various activities which the government
(BUFFALO), respondents.
appropriation could not adequately support or sustain. In 1984, the
CMU approved Resolution No. 160, adopting a livelihood program
called "Kilusang Sariling Sikap Program" under which the land
resources of the University were leased to its faculty and employees.
This arrangement was covered by a written contract. Under this
CAMPOS, JR., J.:
program the faculty and staff combine themselves to groups of five
This is a Petition for Review on Certiorari under Rule 65 of the members each, and the CMU provided technical know-how,
Rules of Court to nullify the proceedings and decision of the practical training and all kinds of assistance, to enable each group to
Department of Agrarian Reform Adjudication Board (DARAB for cultivate 4 to 5 hectares of land for the lowland rice project. Each
brevity) dated September 4, 1989 and to set aside the decision the group pays the CMU a service fee and also a land use participant's
decision * of the Court of Appeals dated August 20, 1990, affirming fee. The contract prohibits participants and their hired workers to
the decision of the DARAB which ordered the segregation of 400 establish houses or live in the project area and to use the cultivated
hectares of suitable, compact and contiguous portions of the Central land as a collateral for any kind of loan. It was expressly stipulated
Mindanao University (CMU for brevity) land and their inclusion in that no landlord-tenant relationship existed between the CMU and
the Comprehensive Agrarian Reform Program (CARP for brevity) the faculty and/or employees. This particular program was
for distribution to qualified beneficiaries, on the ground of lack of conceived as a multi-disciplinary applied research extension and
productivity program to utilize available land, train people in
jurisdiction.
modern agricultural technology and at the same time give the
This case originated in a complaint filed by complainants calling faculty and staff opportunities within the confines of the CMU
themselves as the Bukidnon Free Farmers and Agricultural Laborers reservation to earn additional income to augment their salaries. The
Organization (BUFFALO for brevity) under the leadership of Alvin location of the CMU at Musuan, Bukidnon, which is quite a
Obrique and Luis Hermoso against the CMU, before the distance from the nearest town, was the proper setting for the
Department of Agrarian Reform for Declaration of Status as adoption of such a program. Among the participants in this program
were Alvin Obrique, Felix Guinanao, Joven Caballero, Nestor
Tenants, under the CARP.
Pulao, Danilo Vasquez, Aronio Pelayo and other complainants.
From the records, the following facts are evident. The petitioner, the Obrique was a Physics Instructor at the CMU while the others were
CMU, is an agricultural educational institution owned and run by employees in the lowland rice project. The other complainants who
the state located in the town of Musuan, Bukidnon province. It were not members of the faculty or non-academic staff CMU, were
started as a farm school at Marilang, Bukidnon in early 1910, in hired workers or laborers of the participants in this program. When
response to the public demand for an agricultural school in petitioner Dr. Leonardo Chua became President of the CMU in July
Mindanao. It expanded into the Bukidnon National Agricultural 1986, he discontinued the agri-business project for the production of
High School and was transferred to its new site in Managok near rice, corn and sugar cane known as Agri-Business Management and
Training Project, due to losses incurred while carrying on the said
Malaybalay, the provincial capital of Bukidnon.
project. Some CMU personnel, among whom were the
In the early 1960's, it was converted into a college with campus at complainants, were laid-off when this project was discontinued. As
Musuan, until it became what is now known as the CMU, but still Assistant Director of this agri-business project, Obrique was found
primarily an agricultural university. From its beginning, the school guilty of mishandling the CMU funds and was separated from
was the answer to the crying need for training people in order to service by virtue of Executive Order No. 17, the re-organization law
develop the agricultural potential of the island of Mindanao. Those of the CMU.
who planned and established the school had a vision as to the future
development of that part of the Philippines. On January 16, 1958 the Sometime in 1986, under Dr. Chua as President, the CMU launched
President of the Republic of the Philippines, the late Carlos P.a self-help project called CMU-Income Enhancement Program
Garcia, "upon the recommendation of the Secretary of Agriculture (CMU-IEP) to develop unutilized land resources, mobilize and
and Natural Resources, and pursuant to the provisions of Section 53, promote the spirit of self-reliance, provide socio-economic and
of Commonwealth Act No. 141, as amended", issued Proclamation technical training in actual field project implementation and
No. 476, withdrawing from sale or settlement and reserving for the augment the income of the faculty and the staff.
Mindanao Agricultural College, a site which would be the future
campus of what is now the CMU. A total land area comprising Under the terms of a 3-party Memorandum of Agreement 2 among
3,080 hectares was surveyed and registered and titled in the name of the CMU, the CMU-Integrated Development Foundation (CMUIDF) and groups or "seldas" of 5 CMU employees, the CMU would
the petitioner under OCT Nos. 160, 161 and 162. 1
provide the use of 4 to 5 hectares of land to a selda for one (1)
In the course of the cadastral hearing of the school's petition for calendar year. The CMU-IDF would provide researchers and
registration of the aforementioned grant of agricultural land, several specialists to assist in the preparation of project proposals and to
tribes belonging to cultural communities, opposed the petition monitor and analyze project implementation. The selda in turn
claiming ownership of certain ancestral lands forming part of the would pay to the CMU P100 as service fee and P1,000 per hectare
tribal reservations. Some of the claims were granted so that what as participant's land rental fee. In addition, 400 kilograms of the
was titled to the present petitioner school was reduced from 3,401 produce per year would be turned over or donated to the CMU-IDF.
The participants agreed not to allow their hired laborers or member
hectares to 3,080 hectares.
of their family to establish any house or live within vicinity of the
In the early 1960's, the student population of the school was less project area and not to use the allocated lot as collateral for a loan. It
than 3,000. By 1988, the student population had expanded to some was expressly provided that no tenant-landlord relationship would
exist as a result of the Agreement.

8
In the same paragraph of their complaint, complainants claim that
Initially, participation in the CMU-IEP was extended only to they are landless peasants. This allegation requires proof and should
workers and staff members who were still employed with the CMU not be accepted as factually true. Obrique is not a landless peasant.
and was not made available to former workers or employees. In the The facts showed he was Physics Instructor at CMU holding a very
middle of 1987, to cushion the impact of the discontinuance of the responsible position was separated from the service on account of
rice, corn and sugar cane project on the lives of its former workers, certain irregularities he committed while Assistant Director of the
the CMU allowed them to participate in the CMU-IEP as special Agri-Business Project of cultivating lowland rice. Others may, at the
participants.
moment, own no land in Bukidnon but they may not necessarily be
so destitute in their places of origin. No proof whatsoever appears in
Under the terms of a contract called Addendum To Existing the record to show that they are landless peasants.
Memorandum of Agreement Concerning Participation To the CMUIncome Enhancement Program, 3 a former employee would be The evidence on record establish without doubt that the
grouped with an existing selda of his choice and provided one (1) complainants were originally authorized or given permission to
hectare for a lowland rice project for one (1) calendar year. He occupy certain areas of the CMU property for a definite purpose
would pay the land rental participant's fee of P1,000.00 per hectare to carry out certain university projects as part of the CMU's program
but on a charge-to-crop basis. He would also be subject to the same of activities pursuant to its avowed purpose of giving training and
prohibitions as those imposed on the CMU employees. It was also instruction in agricultural and other related technologies, using the
expressly provided that no tenant-landlord relationship would exist land and other resources of the institution as a laboratory for these
as a result of the Agreement.
projects. Their entry into the land of the CMU was with the
permission and written consent of the owner, the CMU, for a limited
The one-year contracts expired on June 30, 1988. Some contracts period and for a specific purpose. After the expiration of their
were renewed. Those whose contracts were not renewed were privilege to occupy and cultivate the land of the CMU, their
served with notices to vacate.
continued stay was unauthorized and their settlement on the CMU's
land was without legal authority. A person entering upon lands of
The non-renewal of the contracts, the discontinuance of the rice, another, not claiming in good faith the right to do so by virtue of
corn and sugar cane project, the loss of jobs due to termination or any title of his own, or by virtue of some agreement with the owner
separation from the service and the alleged harassment by school or with one whom he believes holds title to the land, is a squatter. 4
authorities, all contributed to, and precipitated the filing of the Squatters cannot enter the land of another surreptitiously or by
complaint.
stealth, and under the umbrella of the CARP, claim rights to said
property as landless peasants. Under Section 73 of R.A. 6657,
On the basis of the above facts, the DARAB found that the private persons guilty of committing prohibited acts of forcible entry or
respondents were not tenants and cannot therefore be beneficiaries illegal detainer do not qualify as beneficiaries and may not avail
under the CARP. At the same time, the DARAB ordered the themselves of the rights and benefits of agrarian reform. Any such
segregation of 400 hectares of suitable, compact and contiguous person who knowingly and wilfully violates the above provision of
portions of the CMU land and their inclusion in the CARP for the Act shall be punished with imprisonment or fine at the discretion
distribution to qualified beneficiaries.
of the Court.
The petitioner CMU, in seeking a review of the decisions of the In view of the above, the private respondents, not being tenants nor
respondents DARAB and the Court of Appeals, raised the following proven to be landless peasants, cannot qualify as beneficiaries under
issues:
the CARP.
1.)
Whether or not the DARAB has jurisdiction to hear and The questioned decision of the Adjudication Board, affirmed in toto
decide Case No. 005 for Declaration of Status of Tenants and by the Court of Appeals, segregating 400 hectares from the CMU
coverage of land under the CARP.
land is primarily based on the alleged fact that the land subject
hereof is "not directly, actually and exclusively used for school sites,
2.)
Whether or not respondent Court of Appeals committed because the same was leased to Philippine Packing Corporation
serious errors and grave abuse of discretion amounting to lack of (now Del Monte Philippines)".
jurisdiction in dismissing the Petition for Review on Certiorari and
affirming the decision of DARAB.
In support of this view, the Board held that the "respondent
University failed to show that it is using actually, really, truly and in
In their complaint, docketed as DAR Case No. 5, filed with the fact, the questioned area to the exclusion of others, nor did it show
DARAB, complainants Obrique, et al. claimed that they are tenants that the same is directly used without any intervening agency or
of the CMU and/or landless peasants claiming/occupying a part or person", 5 and "there is no definite and concrete showing that the
portion of the CMU situated at Sinalayan, Valencia, Bukidnon and use of said lands are essentially indispensable for educational
Musuan, Bukidnon, consisting of about 1,200 hectares. We agree purposes". 6 The reliance by the respondents Board and Appellate
with the DARAB's finding that Obrique, et. al. are not tenants. Tribunal on the technical or literal definition from Moreno's
Under the terms of the written agreement signed by Obrique, et. al., Philippine Law Dictionary and Black's Law Dictionary, may give
pursuant to the livelihood program called "Kilusang Sariling Sikap the ordinary reader a classroom meaning of the phrase "is actually
Program", it was expressly stipulated that no landlord-tenant directly and exclusively", but in so doing they missed the true
relationship existed between the CMU and the faculty and staff meaning of Section 10, R.A. 6657, as to what lands are exempted or
(participants in the project). The CMU did not receive any share excluded from the coverage of the CARP.
from the harvest/fruits of the land tilled by the participants. What
the CMU collected was a nominal service fee and land use The pertinent provisions of R.A. 6657, otherwise known as the
participant's fee in consideration of all the kinds of assistance given Comprehensive Agrarian Reform Law of 1988, are as follows:
to the participants by the CMU. Again, the agreement signed by the
participants under the CMU-IEP clearly stipulated that no landlord- Sec. 4. SCOPE. The Comprehensive Agrarian Reform Law of
tenant relationship existed, and that the participants are not share 1988 shall cover, regardless of tenurial arrangement and commodity
croppers nor lessees, and the CMU did not share in the produce of produced, all public and private agricultural lands as provided in
the participants' labor.
Proclamation No. 131 and Executive Order No. 229 including other
lands of the public domain suitable for agriculture.

9
More specifically, the following lands are covered by the No. of Hectares
Percentage
Comprehensive Agrarian Reform Program:
a.
Livestock and Pasture
1,016.40 33
(a)
All alienable and disposable lands of the public domain
devoted to or suitable for agriculture. No reclassification of forest of b.
Upland Crops
616
20
mineral lands to agricultural lands shall be undertaken after the
approval of this Act until Congress, taking into account ecological, c.
Campus and Residential sites 462
15
developmental and equity considerations, shall have determined by
law, the specific limits of the public domain;
d.
Irrigated rice
400.40 13
(b)
All lands of the public domain in excess of the specific e.
Watershed and forest reservation
308
10
limits ad determined by Congress in the preceding paragraph;
f.
Fruit and Trees Crops
154
5
(c)
All other lands owned by the Government devoted to or
suitable for agriculture; and
g.
Agricultural
Experimental stations
123.20 4
(d)
All private lands devoted to or suitable for agriculture
regardless of the agricultural products raised or that can be raised 3,080.00 100%
thereon.
The first land use plan of the CARP was prepared in 1975 and since
Sec. 10 EXEMPTIONS AND EXCLUSIONS. Lands actually,then it has undergone several revisions in line with changing
directly and exclusively used and found to be necessary for parks, economic conditions, national economic policies and financial
wildlife, forest reserves, reforestration, fish sanctuaries and breeding limitations and availability of resources. The CMU, through
grounds, watersheds and mangroves, national defense, school sites Resolution No. 160 S. 1984, pursuant to its development plan,
and campuses including experimental farm stations operated by adopted a multi-disciplinary applied research extension and
public or private schools for educational purposes, seeds and productivity program called the "Kilusang Sariling Sikap Project"
seedlings research and pilot production centers, church sites and (CMU-KSSP). The objectives 9 of this program were:
convents appurtenant thereto, mosque sites and Islamic centers
appurtenant thereto, communal burial grounds and cemeteries, penal 1.
Provide researches who shall assist in (a) preparation of
colonies and penal farms actually worked by the inmates, proposal; (b) monitor project implementation; and (c) collect and
government and private research and quarantine centers and all analyze all data and information relevant to the processes and
lands with eighteen percent (18%) slope and over, except those results of project implementation;
already developed shall be exempt from the coverage of this Act.
(Emphasis supplied).
2.
Provide the use of land within the University reservation
for the purpose of establishing a lowland rice project for the party of
The construction given by the DARAB to Section 10 restricts the the Second Part for a period of one calendar year subject to
land area of the CMU to its present needs or to a land area presently,discretionary renewal by the Party of the First Part;
actively exploited and utilized by the university in carrying out its
present educational program with its present student population and 3.
Provide practical training to the Party of the Second Part
academic facility overlooking the very significant factor of on the management and operation of their lowland project upon
growth of the university in the years to come. By the nature of the request of Party of the Second Part; and
CMU, which is a school established to promote agriculture and
industry, the need for a vast tract of agricultural land and for future 4.
Provide technical assistance in the form of relevant
programs of expansion is obvious. At the outset, the CMU was livelihood project specialists who shall extend expertise on
conceived in the same manner as land grant colleges in America, a scientific methods of crop production upon request by Party of the
type of educational institution which blazed the trail for the Second Part.
development of vast tracts of unexplored and undeveloped
agricultural lands in the Mid-West. What we now know as Michigan In return for the technical assistance extended by the CMU, the
State University, Penn State University and Illinois State University, participants in a project pay a nominal amount as service fee. The
started as small land grant colleges, with meager funding to support self-reliance program was adjunct to the CMU's lowland rice
their ever increasing educational programs. They were given project.
extensive tracts of agricultural and forest lands to be developed to
support their numerous expanding activities in the fields of The portion of the CMU land leased to the Philippine Packing
agricultural technology and scientific research. Funds for the Corporation (now Del Monte Phils., Inc.) was leased long before the
support of the educational programs of land grant colleges came CARP was passed. The agreement with the Philippine Packing
from government appropriation, tuition and other student fees, Corporation was not a lease but a Management and Development
private endowments and gifts, and earnings from miscellaneous Agreement, a joint undertaking where use by the Philippine Packing
sources. 7 It was in this same spirit that President Garcia issued Corporation of the land was part of the CMU research program,
Proclamation No. 476, withdrawing from sale or settlement and with the direct participation of faculty and students. Said contracts
reserving for the Mindanao Agricultural College (forerunner of the with the Philippine Packing Corporation and others of a similar
CMU) a land reservation of 3,080 hectares as its future campus. It nature (like MM-Agraplex) were made prior to the enactment of
was set up in Bukidnon, in the hinterlands of Mindanao, in order R.A. 6657 and were directly connected to the purpose and
that it can have enough resources and wide open spaces to grow as objectives of the CMU as an educational institution. As soon as the
an agricultural educational institution, to develop and train future objectives of the agreement for the joint use of the CMU land were
farmers of Mindanao and help attract settlers to that part of the achieved as of June 1988, the CMU adopted a blue print for the
country.
exclusive use and utilization of said areas to carry out its own
research and agricultural experiments.
In line with its avowed purpose as an agricultural and technical
school, the University adopted a land utilization program to develop As to the determination of when and what lands are found to be
and exploit its 3080-hectare land reservation as follows: 8
necessary for use by the CMU, the school is in the best position to
resolve and answer the question and pass upon the problem of its

10
needs in relation to its avowed objectives for which the land was jurisdiction over all matters involving the implementation of
given to it by the State. Neither the DARAB nor the Court ofagrarian reform. . . .
Appeals has the right to substitute its judgment or discretion on this
matter, unless the evidentiary facts are so manifest as to show that Section 17 of Executive Order No. 129-A is merely a repetition of
the CMU has no real for the land.
Section 50, R.A. 6657. There is no doubt that the DARAB has
jurisdiction to try and decide any agrarian dispute in the
It is our opinion that the 400 hectares ordered segregated by the implementation of the CARP. An agrarian dispute is defined by the
DARAB and affirmed by the Court of Appeals in its Decision dated same law as any controversy relating to tenurial rights whether
August 20, 1990, is not covered by the CARP because:
leasehold, tenancy stewardship or otherwise over lands devoted to
agriculture. 10
(1)
It is not alienable and disposable land of the public
domain;
In the case at bar, the DARAB found that the complainants are not
share tenants or lease holders of the CMU, yet it ordered the
(2)
The CMU land reservation is not in excess of specific "segregation of a suitable compact and contiguous area of Four
limits as determined by Congress;
Hundred hectares, more or less", from the CMU land reservation,
and directed the DAR Regional Director to implement its order of
(3)
It is private land registered and titled in the name of its segregation. Having found that the complainants in this agrarian
lawful owner, the CMU;
dispute for Declaration of Tenancy Status are not entitled to claim as
beneficiaries of the CARP because they are not share tenants or
(4)
It is exempt from coverage under Section 10 of R.A. 6657 leaseholders, its order for the segregation of 400 hectares of the
because the lands are actually, directly and exclusively used and CMU land was without legal authority. w do not believe that the
found to be necessary for school site and campus, including quasi-judicial function of the DARAB carries with it greater
experimental farm stations for educational purposes, and for authority than ordinary courts to make an award beyond what was
establishing seed and seedling research and pilot production centers. demanded by the complainants/petitioners, even in an agrarian
(Emphasis supplied).
dispute. Where the quasi-judicial body finds that the
complainants/petitioners are not entitled to the rights they are
Under Section 4 and Section 10 of R.A. 6657, it is crystal clear that demanding, it is an erroneous interpretation of authority for that
the jurisdiction of the DARAB is limited only to matters involving quasi-judicial body to order private property to be awarded to future
the implementation of the CARP. More specifically, it is restricted beneficiaries. The order segregation 400 hectares of the CMU land
to agrarian cases and controversies involving lands falling within was issued on a finding that the complainants are not entitled as
the coverage of the aforementioned program. It does not include beneficiaries, and on an erroneous assumption that the CMU land
those which are actually, directly and exclusively used and found to which is excluded or exempted under the law is subject to the
be necessary for, among such purposes, school sites and campuses coverage of the CARP. Going beyond what was asked by the
for setting up experimental farm stations, research and pilot complainants who were not entitled to the relief prayed the
production centers, etc.
complainants who were not entitled to the relief prayed for,
constitutes a grave abuse of discretion because it implies such
Consequently, the DARAB has no power to try, hear and adjudicate capricious and whimsical exercise of judgment as is equivalent to
the case pending before it involving a portion of the CMU's titled lack of jurisdiction.
school site, as the portion of the CMU land reservation ordered
segregated is actually, directly and exclusively used and found by The education of the youth and agrarian reform are admittedly
the school to be necessary for its purposes. The CMU has constantly among the highest priorities in the government socio-economic
raised the issue of the DARAB's lack of jurisdiction and has programs. In this case, neither need give way to the other. Certainly,
questioned the respondent's authority to hear, try and adjudicate the there must still be vast tracts of agricultural land in Mindanao
case at bar. Despite the law and the evidence on record tending to outside the CMU land reservation which can be made available to
establish that the fact that the DARAB had no jurisdiction, it made landless peasants, assuming the claimants here, or some of them,
the adjudication now subject of review.
can qualify as CARP beneficiaries. To our mind, the taking of the
CMU land which had been segregated for educational purposes for
Whether the DARAB has the authority to order the segregation of a distribution to yet uncertain beneficiaries is a gross
portion of a private property titled in the name of its lawful owner, misinterpretation of the authority and jurisdiction granted by law to
even if the claimant is not entitled as a beneficiary, is an issue we the DARAB.
feel we must resolve. The quasi-judicial powers of DARAB are
provided in Executive Order No. 129-A, quoted hereunder in so far The decision in this case is of far-reaching significance as far as it
as pertinent to the issue at bar:
concerns state colleges and universities whose resources and
research facilities may be gradually eroded by misconstruing the
Sec. 13. AGRARIAN REFORM ADJUDICATION BOARD exemptions from the CARP. These state colleges and universities
There is hereby created an Agrarian Reform Adjudication Board are the main vehicles for our scientific and technological
under the office of the Secretary. . . . The Board shall assume the advancement in the field of agriculture, so vital to the existence,
powers and functions with respect to adjudication of agrarian reform growth and development of this country.
cases under Executive Order 229 and this Executive Order . . .
It is the opinion of this Court, in the light of the foregoing analysis
Sec. 17. QUASI JUDICIAL POWERS OF THE DAR. The and for the reasons indicated, that the evidence is sufficient to
DAR is hereby vested with quasi-judicial powers to determine and sustain a finding of grave abuse of discretion by respondents Court
adjudicate agrarian reform matters and shall have exclusive original of Appeals and DAR Adjudication Board. We hereby declare the
jurisdiction over all matters including implementation of Agrarian decision of the DARAB dated September 4, 1989 and the decision
Reform.
of the Court of Appeals dated August 20, 1990, affirming the
decision of the quasi-judicial body, as null and void and hereby
Section 50 of R.A. 6658 confers on the DAR quasi-judicial powers order that they be set aside, with costs against the private
as follows:
respondents.
The DAR is hereby vested with primary jurisdiction to determine SO ORDERED
and adjudicate agrarian reform matters and shall have original

11
4. G.R. No. 112526

October 12, 2001

In October 1986 to August 1987, petitioner filed with the Municipal

STA. ROSA REALTY DEVELOPMENT CORPORATION, Trial Court, Cabuyao, Laguna separate complaints for forcible entry
petitioner,
against respondents.5
vs.
COURT OF APPEALS, JUAN B. AMANTE, FRANCISCO L. After the filing of the ejectment cases, respondents petitioned the
ANDAL, LUCIA ANDAL, ANDREA P. AYENDE, LETICIA P.Department of Agrarian Reform (DAR) for the compulsory
BALAT, FILOMENA B. BATINO, ANICETO A. BURGOS,acquisition of the SRRDC property under the CARP.
JAIME A. BURGOS, FLORENCIA CANUBAS, LORETO A.
CANUBAS, MAXIMO A. CANUBAS, REYNALDO CARINGAL, On August 11, 1989, the Municipal Agrarian Reform Officer
QUIRINO C. CASALME, BENIGNO A. CRUZAT, ELINO A. (MARO) of Cabuyao, Laguna issued a notice of coverage to
CRUZAT, GREGORIO F. CRUZAT, RUFINO C. CRUZAT,petitioner and invited its officials or representatives to a conference
SERGIO CRUZAT, SEVERINO F. CRUZAT, VICTORIA DE on August 18, 1989.6 During the meeting, the following were
SAGUN, SEVERINO DE SAGUN, FELICISIMO A. GONZALES, present: representatives of petitioner, the Land Bank of the
FRANCISCO A. GONZALES, GREGORIO GONZALES, Philippines, PARCCOM, PARO of Laguna, MARO of Laguna, the
LEODEGARIO N. GONZALES, PASCUAL P. GONZALES, BARC Chairman of Barangay Casile and some potential farmer
ROLANDO A. GONZALES, FRANCISCO A. JUANGCO,beneficiaries, who are residents of Barangay Casile, Cabuyao,
GERVACIO A. JUANGCO, LOURDES U. LUNA, ANSELMO M. Laguna. It was the consensus and recommendation of the assembly
MANDANAS, CRISANTO MANDANAS, EMILIO M.that the landholding of SRRDC be placed under compulsory
MANDANAS, GREGORIO A. MANDANAS, MARIO G.acquisition.
MANDANAS, TEODORO MANDANAS, CONSTANCIO B.
MARQUEZ, EUGENIO B. MARQUEZ, ARMANDO P.On August 17, 1989, petitioner filed with the Municipal Agrarian
MATIENZO, DANIEL D. MATIENZO, MAXIMINO MATIENZO, Reform Office (MARO), Cabuyao, Laguna a "Protest and
PACENCIA P. MATIENZO, DOROTEA L. PANGANIBAN, Objection" to the compulsory acquisition of the property on the
JUANITO T. PEREZ, MARIANITO T. PEREZ, SEVERO M. ground that the area was not appropriate for agricultural purposes.
PEREZ, INOCENCIA S. PASQUIZA, BIENVENIDO F. PETATE, The area was rugged in terrain with slopes of 18% and above and
IGNACIO F. PETATE, JUANITO PETATE, PABLO A. PLATON, that the occupants of the land were squatters, who were not entitled
PRECILLO V. PLATON, AQUILINO B. SUBOL, CASIANO T.to any land as beneficiaries.7
VILLA, DOMINGO VILLA, JUAN T. VILLA, MARIO C. VILLA,
NATIVIDAD A. VILLA, JACINTA S. ALVARADO, RODOLFO On August 29, 1989, the farmer beneficiaries together with the
ANGELES, DOMINGO A. CANUBAS, EDGARDO L. BARC chairman answered the protest and objection stating that the
CASALME, QUIRINO DE LEON, LEONILO M. ENRIQUEZ, slope of the land is not 18% but only 5-10% and that the land is
CLAUDIA
P.
GONZALES,
FELISA
R.
LANGUE,suitable and economically viable for agricultural purposes, as
QUINTILLANO LANGUE, REYNALDO LANGUE, ROMEO S. evidenced by the Certification of the Department of Agriculture,
LANGUE, BONIFACIO VILLA, ROGELIO AYENDE, ANTONIO municipality of Cabuyao, Laguna.8
B. FERNANDEZ, ZACARIAS HERRERA, ZACARIAS
HERRERA, REYNARIO U. LAZO, AGAPITO MATIENZO, On September 8, 1989, MARO Belen dela Torre made a summary
DIONISIO F. PETATE, LITO G. REYES, JOSE M. SUBOL, investigation report and forwarded the Compulsory Acquisition
CELESTINO G. TOPI NO, ROSA C. AMANTE, SOTERA Folder Indorsement (CAFI) to the Provincial Agrarian Reform
CASALME, REMIGIO M. SILVERIO, THE SECRETARY OF Officer (hereafter, PARO).9
AGRARIAN REFORM, DEPARTMENT OF AGRARIAN
REFORM ADJUDICATION BOARD, LAND BANK OF THE On September 21, 1989, PARO Durante Ubeda forwarded his
PHILIPPINES, REGISTER OF DEEDS OF LAGUNA,endorsement of the compulsory acquisition to the Secretary of
DEPARTMENT OF ENVIRONMENT AND NATURALAgrarian Reform.
RESOURCES REGIONAL EXECUTIVE DIRECTOR FOR
REGION IV, and REGIONAL AGRARIAN REFORM OFFICER On November 23, 1989, Acting Director Eduardo C. Visperas of the
FOR REGION IV, respondents.
Bureau of Land Acquisition and Development, DAR forwarded two
(2) Compulsory Acquisition Claim Folders covering the landholding
PARDO, J.:
of SRRDC, covered by TCT Nos. T-81949 and T-84891 to the
President, Land Bank of the Philippines for further review and
The case before the Court is a petition for review on certiorari of the evaluation.10
decision of the Court of Appeals1 affirming the decision of the
Department of Agrarian Reform Adjudication Board2 (hereafter On December 12, 1989, Secretary of Agrarian Reform Miriam
DARAB) ordering the compulsory acquisition of petitioner's Defensor Santiago sent two (2) notices of acquisition11 to
property under the Comprehensive Agrarian Reform Program petitioner, stating that petitioner's landholdings covered by TCT
(CARP).
Nos. 81949 and 84891, containing an area of 188.2858 and 58.5800
hectares, valued at P4,417,735.65 and P1,220,229.93, respectively,
Petitioner Sta. Rosa Realty Development Corporation (hereafter,had been placed under the Comprehensive Agrarian Reform
SRRDC) was the registered owner of two parcels of land, situated at Program.
Barangay Casile, Cabuyao, Laguna covered by TCT Nos. 81949 and
84891, with a total area of 254.6 hectares. According to petitioner, On February 6, 1990, petitioner SRRDC in two letters12 separately
the parcels of land are watersheds, which provide clean potable addressed to Secretary Florencio B. Abad and the Director, Bureau
water to the Canlubang community, and that ninety (90) light of Land Acquisition and Distribution, sent its formal protest,
industries are now located in the area.3
protesting not only the amount of compensation offered by DAR for
the property but also the two (2) notices of acquisition.
Petitioner alleged that respondents usurped its rights over the
property, thereby destroying the ecosystem. Sometime in December On March 17, 1990, Secretary Abad referred the case to the
1985, respondents filed a civil case4 with the Regional Trial Court, DARAB for summary proceedings to determine just compensation
Laguna, seeking an easement of a right of way to and from under R. A. No. 6657, Section 16.
Barangay Casile. By way of counterclaim, however, petitioner
sought the ejectment of private respondents.

12
On March 23, 1990, the LBP returned the two (2) claim folders of the case were classified as "industrial Park" per Sanguniang
previously referred for review and evaluation to the Director of Bayan Resolution No. 45-89 dated March 29, 1989.14
BLAD mentioning its inability to value the SRRDC landholding due
to some deficiencies.
To avert any opportunity that the DARAB might distribute the lands
to the farmer beneficiaries, on April 30, 1991, petitioner filed a
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote petition15 with DARAB to disqualify private respondents as
Land Bank President Deogracias Vistan to forward the two (2) claim beneficiaries. However, DARAB refused to address the issue of
folders involving the property of SRRDC to the DARAB for it to beneficiaries.
conduct summary proceedings to determine the just compensation
for the land.
In the meantime, on January 20, 1992, the Regional Trial Court,
Laguna, Branch 24, rendered a decision,16 finding that private
On April 6, 1990, petitioner sent a letter to the Land Bank of the respondents illegally entered the SRRDC property, and ordered
Philippines stating that its property under the aforesaid land titles them evicted.
were exempt from CARP coverage because they had been classified
as watershed area and were the subject of a pending petition for land On July 11, 1991, DAR Secretary Benjamin T. Leong issued a
conversion.
memorandum directing the Land Bank of the Philippines to open a
trust account in favor of SRRDC, for P5,637,965.55, as valuation
On May 10, 1990, Director Narciso Villapando of BLAD turned for the SRRDC property.
over the two (2) claim folders (CACF's) to the Executive Director of
the DAR Adjudication Board for proper administrative valuation. On December 19, 1991, DARAB promulgated a decision, the
Acting on the CACF's, on September 10, 1990, the Board decretal portion of which reads:
promulgated a resolution asking the office of the Secretary of
Agrarian Reform (DAR) to first resolve two (2) issues before it "WHEREFORE, based on the foregoing premises, the Board hereby
proceeds with the summary land valuation proceedings.13
orders:
The issues that need to be threshed out were as follows: (1) whether "1. The dismissal for lack of merit of the protest against the
the subject parcels of land fall within the coverage of the compulsory coverage of the landholdings of Sta. Rosa Realty
Compulsory Acquisition Program of the CARP; and (2) whether the Development Corporation (Transfer Certificates of Title Nos. 81949
petition for land conversion of the parcels of land may be granted. and 84891 with an area of 254.766 hectares) in Barangay Casile,
Municipality of Cabuyao, Province of Laguna under the
On December 7, 1990, the Office of the Secretary, DAR, through Comprehensive Agrarian Reform Program is hereby affirmed;
the Undersecretary for Operations (Assistant Secretary for Luzon
Operations) and the Regional Director of Region IV, submitted a "2. The Land Bank of the Philippines (LBP) to pay Sta. Rosa Realty
report answering the two issues raised. According to them, firstly, Development Corporation the amount of Seven Million Eight
by virtue of the issuance of the notice of coverage on August 11, Hundred Forty-One Thousand, Nine Hundred Ninety Seven Pesos
1989, and notice of acquisition on December 12, 1989, the propertyand Sixty-Four centavos (P7,841,997.64) for its landholdings
is covered under compulsory acquisition. Secondly, Administrative covered by the two (2) Transfer Certificates of Title mentioned
Order No. 1, Series of 1990, Section IV D also supports the DAR above. Should there be a rejection of the payment tendered, to open,
position on the coverage of the said property. During the if none has yet been made, a trust account for said amount in the
consideration of the case by the Board, there was no pending name of Sta. Rosa Realty Development Corporation;
petition for land conversion specifically concerning the parcels of
land in question.
"3. The Register of Deeds of the Province of Laguna to cancel with
dispatch Transfer certificate of Title Nos. 84891 and 81949 and new
On February 19, 1991, the Board sent a notice of hearing to all the one be issued in the name of the Republic of the Philippines, free
parties interested, setting the hearing for the administrative from liens and encumbrances;
valuation of the subject parcels of land on March 6, 1991. However,
on February 22, 1991, Atty. Ma. Elena P. Hernandez-Cueva, counsel "4 The Department of Environment and Natural Resources either
for SRRDC, wrote the Board requesting for its assistance in the through its Provincial Office in Laguna or the Regional Office,
reconstruction of the records of the case because the records could Region IV, to conduct a final segregation survey on the lands
not be found as her co-counsel, Atty. Ricardo Blancaflor, who covered by Transfer certificate of Title Nos. 84891 and 81949 so the
originally handled the case for SRRDC and had possession of all the same can be transferred by the Register of Deeds to the name of the
records of the case was on indefinite leave and could not be Republic of the Philippines;
contacted. The Board granted counsel's request and moved the
hearing to April 4, 1991.
"5. The Regional Office of the Department of Agrarian Reform
through its Municipal and Provincial Agrarian Reform Office to
On March 18, 1991, SRRDC submitted a petition to the Board for take immediate possession on the said landholding after Title shall
the latter to resolve SRRDC's petition for exemption from CARP have been transferred to the name of the Republic of the
coverage before any administrative valuation of their landholding Philippines, and distribute the same to the immediate issuance of
could be had by the Board.
Emancipation Patents to the farmer-beneficiaries as determined by
the Municipal Agrarian Reform Office of Cabuyao, Laguna."17
On April 4, 1991, the initial DARAB hearing of the case was held
and subsequently, different dates of hearing were set without On January 20, 1992, the Regional Trial Court, Laguna, Branch 24,
objection from counsel of SRRDC. During the April 15, 1991 rendered a decision in Civil Case No. B-233318 ruling that
hearing, the subdivision plan of subject property at Casile, Cabuyao, respondents were builders in bad faith.
Laguna was submitted and marked as Exhibit "5" for SRRDC. At
the hearing on April 23, 1991, the Land Bank asked for a period of On February 6, 1992, petitioner filed with the Court of Appeals a
one month to value the land in dispute.
petition for review of the DARAB decision.19 On November 5,
1993, the Court of Appeals promulgated a decision affirming the
At the hearing on April 23, 1991, certification from Deputy Zoning decision of DARAB. The decretal portion of the Court of Appeals
Administrator Generoso B. Opina was presented. The certification decision reads:
issued on September 8, 1989, stated that the parcels of land subject

13
"WHEREFORE, premises considered, the DARAB decision dated
September 19, 1991 is AFFIRMED, without prejudice to petitioner d.) In case of rejection or failure to reply, the DAR shall conduct
Sta. Rosa Realty Development Corporation ventilating its case with summary administrative proceedings to determine the compensation
the Special Agrarian Court on the issue of just for the land requiring the landowner, the LBP and other interested
compensation."20Hence, this petition.21
parties to submit fifteen (15) days from receipt of the notice. After
the expiration of the above period, the matter is deemed submitted
On December 15, 1993, the Court issued a Resolution which reads: for decision. The DAR shall decide the case within thirty (30) days
after it is submitted for decision.
"G. R. Nos. 112526 (Sta. Rosa Realty Development Corporation vs.
Court of Appeals, et. al.) Considering the compliance, dated e.) Upon receipt by the landowner of the corresponding payment, or,
December 13, 1993, filed by counsel for petitioner, with the in case of rejection or no response from the landowner, upon the
resolution of December 8, 1993 which required petitioner to post a deposit with an accessible bank designated by the DAR of the
cash bond or surety bond in the amount of P1,500,000.00 Pesos compensation in cash or in LBP bonds in accordance with this act,
before issuing a temporary restraining order prayed for, manifesting the DAR shall make immediate possession of the land and shall
that it has posted a CASH BOND in the same amount with the request the proper Register of Deeds to issue Transfer Certificate of
Cashier of the Court as evidenced by the attached official receipt no. Titles (TCT) in the name of the Republic of the Philippines. The
315519, the Court resolved to ISSUE the Temporary Retraining DAR shall thereafter proceed with the redistribution of the land to
Order prayed for.
the qualified beneficiaries.
"The Court therefore, resolved to restrain: (a) the Department of f.) Any party who disagrees with the decision may bring the matter
Agrarian Reform Adjudication Board from enforcing its decision to the court23 of proper jurisdiction for final determination of just
dated December 19, 1991 in DARAB Case No. JC-R-IV-LAG- compensation.
0001, which was affirmed by the Court of Appeals in a Decision
dated November 5, 1993, and which ordered, among others, the In compulsory acquisition of private lands, the landholding, the
Regional Office of the Department of Agrarian Reform through its landowners and farmer beneficiaries must first be identified. After
Municipal and Provincial Reform Office to take immediate identification, the DAR shall send a notice of acquisition to the
possession of the landholding in dispute after title shall have been landowner, by personal delivery or registered mail, and post it in a
transferred to the name of the Republic of the Philippines and to conspicuous place in the municipal building and barangay hall of
distribute the same through the immediate issuance of Emancipation the place where the property is located.
Patents to the farmer-beneficiaries as determined by the Municipal
Agrarian Officer of Cabuyao, Laguna, (b) The Department of Within thirty (30) days from receipt of the notice of acquisition, the
Agrarian Reform and/or the Department of Agrarian Reform landowner, his administrator or representative shall inform the DAR
Adjudication Board, and all persons acting for and in their behalf of his acceptance or rejection of the offer.
and under their authority from entering the properties involved in
this case and from introducing permanent infrastructures thereon; If the landowner accepts, he executes and delivers a deed of transfer
and (c) the private respondents from further clearing the said in favor of the government and surrenders the certificate of title.
properties of their green cover by the cutting or burning of trees and Within thirty (30) days from the execution of the deed of transfer,
other vegetation, effective today until further orders from this the Land Bank of the Philippines (LBP) pays the owner the
Court."22
purchase price. If the landowner accepts, he executes and delivers a
deed of transfer in favor of the government and surrenders the
The main issue raised is whether the property in question is covered certificate of title. Within thirty days from the execution of the deed
by CARP despite the fact that the entire property formed part of a of transfer, the Land Bank of the Philippines (LBP) pays the owner
watershed area prior to the enactment of R. A. No. 6657.
the purchase price. If the landowner rejects the DAR's offer or fails
to make a reply, the DAR conducts summary administrative
Under Republic Act No. 6657, there are two modes of acquisition ofproceedings to determine just compensation for the land. The
private land: compulsory and voluntary. In the case at bar, the landowner, the LBP representative and other interested parties may
Department of Agrarian Reform sought the compulsory acquisition submit evidence on just compensation within fifteen days from
of subject property under R. A. No. 6657, Section 16, to wit:
notice. Within thirty days from submission, the DAR shall decide
the case and inform the owner of its decision and the amount of just
"Sec. 16. Procedure for Acquisition of Private Lands. For compensation.
purposes of acquisition of private lands, the following procedures
shall be followed:
Upon receipt by the owner of the corresponding payment, or, in case
of rejection or lack of response from the latter, the DAR shall
a.) After having identified the land, the landowners and the deposit the compensation in cash or in LBP bonds with an
beneficiaries, the DAR shall send its notice to acquire the land to the accessible bank. The DAR shall immediately take possession of the
owners thereof, by personal delivery or registered mail, and post the land and cause the issuance of a transfer certificate of title in the
same in a conspicuous place in the municipal building and barangay name of the Republic of the Philippines. The land shall then be
hall of the place where the property is located. Said notice shall redistributed to the farmer beneficiaries. Any party may question the
contain the offer of the DAR to pay corresponding value in decision of the DAR in the special agrarian courts (provisionally the
accordance with the valuation set forth in Sections 17, 18, and other Supreme Court designated branches of the regional trial court as
pertinent provisions hereof.
special agrarian courts) for final determination of just compensation.
b.) Within thirty (30) days from the date of the receipt of written The DAR has made compulsory acquisition the priority mode of
notice by personal delivery or registered mail, the landowner, his land acquisition to hasten the implementation of the Comprehensive
administrator or representative shall inform the DAR of his Agrarian Reform Program (CARP). Under Sec. 16 of the CARL, the
acceptance or rejection of the offer.
first step in compulsory acquisition is the identification of the land,
the landowners and the farmer beneficiaries. However, the law is
c.) If the landowner accepts the offer of the DAR, the LBP shall pay silent on how the identification process shall be made. To fill this
the landowner the purchase price of the land within thirty (30) days gap, on July 26, 1989, the DAR issued Administrative Order No. 12,
after he executes and delivers a deed of transfer in favor of the series of 1989, which set the operating procedure in the
government and other muniments of title.
identification of such lands. The procedure is as follows:

14
A. The Municipal Agrarian Reform Officer (MARO), with the C. DAR Central Office, specifically through the Bureau of Land
assistance of the pertinent Barangay Agrarian Reform Committee Acquisition and Distribution (BLAD), shall:
(BARC), shall:
1. Within three days from receipt of the case folder from the PARO,
1. Update the masterlist of all agricultural lands covered under the review, evaluate and determine the final land valuation of the
CARP in his area of responsibility; the masterlist should include property covered by the case folder. A summary review and
such information as required under the attached CARP masterlist evaluation report shall be prepared and duly certified by the BLAD
form which shall include the name of the landowner, landholding Director and the personnel directly participating in the review and
area, TCT/OCT number, and tax declaration number.
final valuation.
2. Prepare the Compulsory Acquisition Case Folder (CACF) for 2. Prepare, for the signature of the Secretary or her duly authorized
each title (OCT/TCT) or landholding covered under Phase I and II representative, a notice of acquisition (CARP Form 8) for the
of the CARP except those for which the landowners have already subject property. Serve the notice to the landowner personally or
filed applications to avail of other modes of land acquisition. A case through registered mail within three days from its approval. The
folder shall contain the following duly accomplished forms:
notice shall include among others, the area subject of compulsory
acquisition, and the amount of just compensation offered by DAR.
a) CARP CA Form 1MARO investigation report
3. Should the landowner accept the DAR's offered value, the BLAD
b) CARP CA Form No 2 Summary investigation report findings shall prepare and submit to the Secretary for approval the order of
and evaluation
acquisition. However, in case of rejection or non-reply, the DAR
Adjudication Board (DARAB) shall conduct a summary
c) CARP CA Form 3Applicant's Information sheet
administrative hearing to determine just compensation, in
accordance with the procedures provided under Administrative
d) CARP CA Form 4 Beneficiaries undertaking
Order No. 13, series of 1989. Immediately upon receipt of the
DARAB's decision on just compensation, the BLAD shall prepare
e) CARP CA Form 5 Transmittal report to the PARO
and submit to the Secretary for approval the required order of
acquisition.
The MARO/BARC shall certify that all information contained in the
above-mentioned forms have been examined and verified by him 4. Upon the landowner's receipt of payment, in case of acceptance,
and that the same are true and correct.
or upon deposit of payment in the designated bank, in case of
rejection or non-response, the Secretary shall immediately direct the
3. Send notice of coverage and a letter of invitation to a pertinent Register of Deeds to issue the corresponding Transfer
conference/meeting to the landowner covered by the Compulsory Certificate of Title (TCT) in the name of the Republic of the
Case Acquisition Folder. Invitations to the said conference meeting Philippines. Once the property is transferred, the DAR, through the
shall also be sent to the prospective farmer-beneficiaries, the BARC PARO, shall take possession of the land for redistribution to
representatives, the Land Bank of the Philippines (LBP) qualified beneficiaries."
representative, and the other interested parties to discuss the inputs
to the valuation of the property.
Administrative Order No. 12, Series of 1989 requires that the
Municipal Agrarian Reform Officer (MARO) keep an updated
He shall discuss the MARO/BARC investigation report and solicit master list of all agricultural lands under the CARP in his area of
the views, objection, agreements or suggestions of the participants responsibility containing all the required information. The MARO
thereon. The landowner shall also ask to indicate his retention area. prepares a Compulsory Acquisition Case Folder (CACF) for each
The minutes of the meeting shall be signed by all participants in the title covered by CARP. The MARO then sends the landowner a
conference and shall form an integral part of the CACF.
"Notice of Coverage" and a "letter of invitation" to a "conference/
meeting" over the land covered by the CACF. He also sends
4. Submit all completed case folders to the Provincial Agrarian invitations to the prospective farmer-beneficiaries, the
Reform Officer (PARO).
representatives of the Barangay Agrarian Reform Committee
(BARC), the Land Bank of the Philippines (LBP) and other
B. The PARO shall:
interested parties to discuss the inputs to the valuation of the
property and solicit views, suggestions, objections or agreements of
1. Ensure the individual case folders are forwarded to him by his the parties. At the meeting, the landowner is asked to indicate his
MAROs.
retention area.
2. Immediately upon receipt of a case folder, compute the valuation The MARO shall make a report of the case to the Provincial
of the land in accordance with A.O. No. 6, series of 1988. The Agrarian Reform Officer (PARO) who shall complete the valuation
valuation worksheet and the related CACF valuation forms shall be of the land. Ocular inspection and verification of the property by the
duly certified correct by the PARO and all the personnel who PARO shall be mandatory when the computed value of the estate
participated in the accomplishment of these forms.
exceeds P500,000.00. Upon determination of the valuation, the
PARO shall forward all papers together with his recommendation to
3. In all cases, the PARO may validate the report of the MARO the Central Office of the DAR. The DAR Central Office,
through ocular inspection and verification of the property. This specifically, the Bureau of Land Acquisition and Distribution
ocular inspection and verification shall be mandatory when the (BLAD) shall prepare, on the signature of the Secretary or his duly
computed value exceeds P500,000 per estate.
authorized representative, a notice of acquisition of the subject
property. From this point, the provisions of R. A. No. 6657, Section
4. Upon determination of the valuation, forward the case folder, 16 shall apply.
together with the duly accomplished valuation forms and his
recommendations, to the Central Office.
For a valid implementation of the CARP Program, two notices are
required: (1) the notice of coverage and letter of invitation to a
The LBP representative and the MARO concerned shall be preliminary conference sent to the landowner, the representative of
furnished a copy each of his report.
the BARC, LBP, farmer beneficiaries and other interested parties

15
pursuant to DAR A. O. No. 12, series of 1989; and (2) the notice of defines and apportions a given political subdivision into specific
acquisition sent to the landowner under Section 16 of the CARL.
land uses as present and future projection of needs."27
The importance of the first notice, that is, the notice of coverage and In Natalia Realty, Inc. v. Department of Agrarian Reform28 we held
the letter of invitation to a conference, and its actual conduct cannot that lands classified as non-agricultural prior to the effectivity of the
be understated. They are steps designed to comply with the CARL may not be compulsorily acquired for distribution to farmer
requirements of administrative due process. The implementation of beneficiaries.
the CARL is an exercise of the State's police power and the power
of eminent domain. To the extent that the CARL prescribes retention However, more than the classification of the subject land as PARK
limits to the landowners, there is an exercise of police power for the is the fact that subsequent studies and survey showed that the
regulation of private property in accordance with the Constitution. parcels of land in question form a vital part of a watershed area.29
But where, to carry out such regulation, the owners are deprived of
lands they own in excess of the maximum area allowed, there is also Now, petitioner has offered to prove that the land in dispute is a
a taking under the power of eminent domain. The taking "watershed or part of the protected area for watershed purposes."
contemplated is not mere limitation of the use of the land. What is Ecological balances and environmental disasters in our day and age
required is the surrender of the title to and physical possession of seem to be interconnected. Property developers and tillers of the
the excess and all beneficial rights accruing to the owner in favor of land must be aware of this deadly combination. In the case at bar,
the farmer beneficiary.
DAR included the disputed parcels of land for compulsory
acquisition simply because the land was allegedly devoted to
In the case at bar, DAR has executed the taking of the property in agriculture and was titled to SRRDC, hence, private and alienable
question. However, payment of just compensation was not in land that may be subject to CARP.
accordance with the procedural requirement. The law required
payment in cash or LBP bonds, not by trust account as was done by However, the scenario has changed, after an in-depth study, survey
DAR.
and reassessment. We cannot ignore the fact that the disputed
parcels of land form a vital part of an area that need to be protected
In Association of Small Landowners in the Philippines v. Secretary for watershed purposes. In a report of the Ecosystems Research and
of Agrarian Reform, we held that "The CARP Law, for its part, Development Bureau (ERDB), a research arm of the DENR,
conditions the transfer of possession and ownership of the land to regarding the environmental assessment of the Casile and Kabangathe government on receipt of the landowner of the corresponding an river watersheds, they concluded that:
payment or the deposit by the DAR of the compensation in cash or
LBP bonds with an accessible bank. Until then, title also remains "The Casile barangay covered by CLOA in question is situated in
with the landowner. No outright change of ownership is the heartland of both watersheds. Considering the barangays
contemplated either."24
proximity to the Matangtubig waterworks, the activities of the
farmers which are in conflict with proper soil and water
Consequently, petitioner questioned before the Court of Appeals conservation practices jeopardize and endanger the vital
DARAB's decision ordering the compulsory acquisition of waterworks. Degradation of the land would have double edge
petitioner's property.25 Here, petitioner pressed the question of detrimental effects. On the Casile side this would mean direct
whether the property was a watershed, not covered by CARP.
siltation of the Mangumit river which drains to the water
impounding reservoir below. On the Kabanga-an side, this would
Article 67 of the Water Code of the Philippines (P. D. No. 1067) mean destruction of forest covers which acts as recharged areas of
provides:
the Matang Tubig springs. Considering that the people have little if
no direct interest in the protection of the Matang Tubig structures
"Art. 67. Any watershed or any area of land adjacent to any surface they couldn't care less even if it would be destroyed.
water or overlying any ground water may be declared by the
Department of Natural resources as a protected area. Rules and The Casile and Kabanga-an watersheds can be considered a most
Regulations may be promulgated by such Department to prohibit or vital life support system to thousands of inhabitants directly and
control such activities by the owners or occupants thereof within the indirectly affected by it. From these watersheds come the natural
protected area which may damage or cause the deterioration of the God-given precious resource water. x x x x x
surface water or ground water or interfere with the investigation,
use, control, protection, management or administration of such Clearing and tilling of the lands are totally inconsistent with sound
waters."
watershed management. More so, the introduction of earth
disturbing activities like road building and erection of permanent
Watersheds may be defined as "an area drained by a river and its infrastructures. Unless the pernicious agricultural activities of the
tributaries and enclosed by a boundary or divide which separates it Casile farmers are immediately stopped, it would not be long before
from adjacent watersheds." Watersheds generally are outside the these watersheds would cease to be of value. The impact of
commerce of man, so why was the Casile property titled in the name watershed degredation threatens the livelihood of thousands of
of SRRDC? The answer is simple. At the time of the titling, the people dependent upon it. Toward this, we hope that an acceptable
Department of Agriculture and Natural Resources had not declared comprehensive watershed development policy and program be
the property as watershed area. The parcels of land in Barangay immediately formulated and implemented before the irreversible
Casile were declared as "PARK" by a Zoning Ordinance adopted by damage finally happens.
the municipality of Cabuyao in 1979, as certified by the Housing
and Land Use Regulatory Board. On January 5, 1994, the Hence, the following are recommended:
Sangguniang Bayan of Cabuyao, Laguna issued a Resolution26
voiding the zoning classification of the land at Barangay Casile as 7.2 The Casile farmers should be relocated and given financial
Park and declaring that the land is now classified as agricultural assistance.
land.
7.3 Declaration of the two watersheds as critical and in need of
The authority of the municipality of Cabuyao, Laguna to issue immediate rehabilitation.
zoning classification is an exercise of its police power, not the
power of eminent domain. "A zoning ordinance is defined as a local
city or municipal legislation which logically arranges, prescribes,

16
7.4 A comprehensive and detailed watershed management plan and involved to resolve the issue of its coverage by the Comprehensive
program be formulated and implemented by the Canlubang Estate in Land Reform Program.
coordination with pertinent government agencies."30
In the meantime, the effects of the CLOAs issued by the DAR to
The ERDB report was prepared by a composite team headed by Dr.supposed farmer beneficiaries shall continue to be stayed by the
Emilio Rosario, the ERDB Director, who holds a doctorate degree temporary restraining order issued on December 15, 1993, which
in water resources from U.P. Los Banos in 1987; Dr. Medel shall remain in effect until final decision on the case.
Limsuan, who obtained his doctorate degree in watershed
management from Colorado University (US) in 1989; and Dr. No costs.
Antonio M. Dano, who obtained his doctorate degree in Soil and
Water management Conservation from U.P. Los Banos in 1993.
SO ORDERED.
Also, DENR Secretary Angel Alcala submitted a Memorandum for
the President dated September 7, 1993 (Subject: PFVR HWI Ref.:
933103 Presidential Instructions on the Protection of Watersheds of
the Canlubang Estates at Barrio Casile, Cabuyao, Laguna) which
reads:
"It is the opinion of this office that the area in question must be
maintained for watershed purposes for ecological and environmental
considerations, among others. Although the 88 families who are the
proposed CARP beneficiaries will be affected, it is important that a
larger view of the situation be taken as one should also consider the
adverse effect on thousands of residents downstream if the
watershed will not be protected and maintained for watershed
purposes.
"The foregoing considered, it is recommended that if possible, an
alternate area be allocated for the affected farmers, and that the
Canlubang Estates be mandated to protect and maintain the area in
question as a permanent watershed reserved."31
The definition does not exactly depict the complexities of a
watershed. The most important product of a watershed is water
which is one of the most important human necessity. The protection
of watersheds ensures an adequate supply of water for future
generations and the control of flashfloods that not only damage
property but cause loss of lives. Protection of watersheds is an
"intergenerational responsibility" that needs to be answered now.
Another factor that needs to be mentioned is the fact that during the
DARAB hearing, petitioner presented proof that the Casile property
has slopes of 18% and over, which exempted the land from the
coverage of CARL. R. A. No. 6657, Section 10, provides:
"Section 10. Exemptions and Exclusions. Lands actually, directly
and exclusively used and found to be necessary for parks, wildlife,
forest reserves, reforestration, fish sanctuaries and breeding
grounds, watersheds and mangroves, national defense, school sites
and campuses including experimental farm stations operated by
public or private schools for educational purposes, seeds and
seedlings research and pilot production centers, church sites and
convents appurtenent thereto, communal burial grounds and
cemeteries, penal colonies and penal farms actually worked by the
inmates, government and private research and quarantine centers,
and all lands with eighteen percent (18%) slope and over, except
those already developed shall be exempt from coverage of this Act."
Hence, during the hearing at DARAB, there was proof showing that
the disputed parcels of land may be excluded from the compulsory
acquisition coverage of CARP because of its very high slopes.
To resolve the issue as to the true nature of the parcels of land
involved in the case at bar, the Court directs the DARAB to conduct
a re-evaluation of the issue.
IN VIEW WHEREOF, the Court SETS ASIDE the decision of the
Court of Appeals in CA-G. R. SP No. 27234.
In lieu thereof, the Court REMANDS the case to the DARAB for
re-evaluation and determination of the nature of the parcels of land

17
5. EN BANC

the DAR Secretary that it be exempted from the coverage of the

CARL.

DEPARTMENT OF AGRARIAN G.R. No. 162070

REFORM, represented by SECRETARY
JOSE MARI B. PONCE (OIC), Present:
Petitioner, Davide, C.J.,
Puno,
Panganiban,
Quisumbing,
Ynares-Santiago,
Sandoval-Gutierrez,
Carpio,
- versus - Austria-Martinez,
Corona,
Carpio Morales,
Callejo, Sr.,
Azcuna,
Tinga,
Chico-Nazario and
Garcia, JJ.
DELIA T. SUTTON, ELLA T.
SUTTON-SOLIMAN and Promulgated:
HARRY T. SUTTON,
Respondents. October 19, 2005
x-----------------------------------x

On April 27, 1993, respondents reiterated to petitioner DAR the

withdrawal of their VOS and requested the return of the supporting
papers they submitted in connection therewith.[4] Petitioner ignored
their request.

DECISION

On December 27, 1993, DAR issued A.O. No. 9, series of 1993,[5]

which provided that only portions of private agricultural lands used
for the raising of livestock, poultry and swine as of June 15, 1988
shall be excluded from the coverage of the CARL. In determining
the area of land to be excluded, the A.O. fixed the following
retention limits, viz: 1:1 animal-land ratio (i.e., 1 hectare of land per
1 head of animal shall be retained by the landowner), and a ratio of
1.7815 hectares for livestock infrastructure for every 21 heads of
cattle shall likewise be excluded from the operations of the CARL.
On February 4, 1994, respondents wrote the DAR Secretary and
advised him to consider as final and irrevocable the withdrawal of
their VOS as, under the Luz Farms doctrine, their entire landholding
is exempted from the CARL.[6]
On September 14, 1995, then DAR Secretary Ernesto D. Garilao
issued an Order[7] partially granting the application of respondents
for exemption from the coverage of CARL. Applying the retention
limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209
hectares of respondents land for grazing purposes, and a maximum
of 102.5635 hectares for infrastructure. Petitioner ordered the rest of
respondents landholding to be segregated and placed under
Compulsory Acquisition.

PUNO, J.:

Respondents moved for reconsideration. They contend that their

entire landholding should be exempted as it is devoted exclusively
to cattle-raising. Their motion was denied.[8] They filed a notice of
This is a petition for review filed by the Department of Agrarian appeal[9] with the Office of the President assailing: (1) the
Reform (DAR) of the Decision and Resolution of the Court of reasonableness and validity of DAR A.O. No. 9, s. 1993, which
Appeals, dated September 19, 2003 and February 4, 2004, provided for a ratio between land and livestock in determining the
respectively, which declared DAR Administrative Order (A.O.) No. land area qualified for exclusion from the CARL, and (2) the
9, series of 1993, null and void for being violative of the constitutionality of DAR A.O. No. 9, s. 1993, in view of the Luz
Farms case which declared cattle-raising lands excluded from the
Constitution.
coverage of agrarian reform.
The case at bar involves a land in Aroroy, Masbate, inherited by
respondents which has been devoted exclusively to cow and calf On October 9, 2001, the Office of the President affirmed the
breeding. On October 26, 1987, pursuant to the then existing impugned Order of petitioner DAR.[10] It ruled that DAR A.O. No.
agrarian reform program of the government, respondents made a 9, s. 1993, does not run counter to the Luz Farms case as the A.O.
voluntary offer to sell (VOS)[1] their landholdings to petitioner provided the guidelines to determine whether a certain parcel of
land is being used for cattle-raising. However, the issue on the
DAR to avail of certain incentives under the law.
constitutionality of the assailed A.O. was left for the determination
On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. of the courts as the sole arbiters of such issue.
6657, also known as the Comprehensive Agrarian Reform Law
(CARL) of 1988, took effect. It included in its coverage farms used On appeal, the Court of Appeals ruled in favor of the respondents. It
declared DAR A.O. No. 9, s. 1993, void for being contrary to the
for raising livestock, poultry and swine.
intent of the 1987 Constitutional Commission to exclude livestock
On December 4, 1990, in an en banc decision in the case of Luz farms from the land reform program of the government. The
Farms v. Secretary of DAR,[2] this Court ruled that lands devoted to dispositive portion reads:
livestock and poultry-raising are not included in the definition of WHEREFORE, premises considered, DAR Administrative Order
agricultural land. Hence, we declared as unconstitutional certain No. 09, Series of 1993 is hereby DECLARED null and void. The
provisions of the CARL insofar as they included livestock farms in assailed order of the Office of the President dated 09 October 2001
in so far as it affirmed the Department of Agrarian Reforms ruling
the coverage of agrarian reform.
In view of the Luz Farms ruling, respondents filed with petitioner that petitioners landholding is covered by the agrarian reform
DAR a formal request to withdraw their VOS as their landholding program of the government is REVERSED and SET ASIDE.
was devoted exclusively to cattle-raising and thus exempted from SO ORDERED.[11]
Hence, this petition.
the coverage of the CARL.[3]
The main issue in the case at bar is the constitutionality of DAR
A.O. No. 9, series of 1993, which prescribes a maximum retention
On December 21, 1992, the Municipal Agrarian Reform Officer of limit for owners of lands devoted to livestock raising.
Aroroy, Masbate, inspected respondents land and found that it was
devoted solely to cattle-raising and breeding. He recommended to

18
Invoking its rule-making power under Section 49 of the CARL, considered as agricultural lands subject to agrarian reform as these
petitioner submits that it issued DAR A.O. No. 9 to limit the area of lots were already classified as residential lands.
livestock farm that may be retained by a landowner pursuant to its
mandate to place all public and private agricultural lands under the A similar logical deduction should be followed in the case at bar.
coverage of agrarian reform. Petitioner also contends that the A.O. Lands devoted to raising of livestock, poultry and swine have been
seeks to remedy reports that some unscrupulous landowners have classified as industrial, not agricultural, lands and thus exempt from
converted their agricultural farms to livestock farms in order to agrarian reform. Petitioner DAR argues that, in issuing the
evade their coverage in the agrarian reform program.
impugned A.O., it was seeking to address the reports it has received
that some unscrupulous landowners have been converting their
agricultural lands to livestock farms to avoid their coverage by the
agrarian reform. Again, we find neither merit nor logic in this
Administrative agencies are endowed with powers legislative in contention. The undesirable scenario which petitioner seeks to
nature, i.e., the power to make rules and regulations. They have prevent with the issuance of the A.O. clearly does not apply in this
been granted by Congress with the authority to issue rules to case. Respondents family acquired their landholdings as early as
regulate the implementation of a law entrusted to them. Delegated 1948. They have long been in the business of breeding cattle in
rule-making has become a practical necessity in modern governance Masbate which is popularly known as the cattle-breeding capital of
due to the increasing complexity and variety of public functions. the Philippines.[18] Petitioner DAR does not dispute this fact.
However, while administrative rules and regulations have the force Indeed, there is no evidence on record that respondents have just
and effect of law, they are not immune from judicial review.[12] recently engaged in or converted to the business of breeding cattle
They may be properly challenged before the courts to ensure that after the enactment of the CARL that may lead one to suspect that
they do not violate the Constitution and no grave abuse of respondents intended to evade its coverage. It must be stressed that
administrative discretion is committed by the administrative body what the CARL prohibits is the conversion of agricultural lands for
non-agricultural purposes after the effectivity of the CARL. There
concerned.
has been no change of business interest in the case of respondents.
Petitioners arguments fail to impress.

The fundamental rule in administrative law is that, to be valid,

administrative rules and regulations must be issued by authority of a Moreover, it is a fundamental rule of statutory construction that the
law and must not contravene the provisions of the Constitution.[13] reenactment of a statute by Congress without substantial change is
The rule-making power of an administrative agency may not be an implied legislative approval and adoption of the previous law. On
used to abridge the authority given to it by Congress or by the the other hand, by making a new law, Congress seeks to supersede
Constitution. Nor can it be used to enlarge the power of the an earlier one.[19] In the case at bar, after the passage of the 1988
administrative agency beyond the scope intended. Constitutional CARL, Congress enacted R.A. No. 7881[20] which amended
and statutory provisions control with respect to what rules and certain provisions of the CARL. Specifically, the new law changed
regulations may be promulgated by administrative agencies and the the definition of the terms agricultural activity and commercial
farming by dropping from its coverage lands that are devoted to
scope of their regulations.[14]
commercial livestock, poultry and swine-raising.[21] With this
significant modification, Congress clearly sought to align the
In the case at bar, we find that the impugned A.O. is invalid as it provisions of our agrarian laws with the intent of the 1987
contravenes the Constitution. The A.O. sought to regulate livestock Constitutional Commission to exclude livestock farms from the
farms by including them in the coverage of agrarian reform and coverage of agrarian reform.
prescribing a maximum retention limit for their ownership.
However, the deliberations of the 1987 Constitutional Commission
show a clear intent to exclude, inter alia, all lands exclusively In sum, it is doctrinal that rules of administrative bodies must be in
devoted to livestock, swine and poultry- raising. The Court clarified harmony with the provisions of the Constitution. They cannot
in the Luz Farms case that livestock, swine and poultry-raising are amend or extend the Constitution. To be valid, they must conform to
industrial activities and do not fall within the definition of and be consistent with the Constitution. In case of conflict between
agriculture or agricultural activity. The raising of livestock, swine an administrative order and the provisions of the Constitution, the
and poultry is different from crop or tree farming. It is an industrial, latter prevails.[22] The assailed A.O. of petitioner DAR was
not an agricultural, activity. A great portion of the investment in this properly stricken down as unconstitutional as it enlarges the
enterprise is in the form of industrial fixed assets, such as: animal coverage of agrarian reform beyond the scope intended by the 1987
housing structures and facilities, drainage, waterers and blowers, Constitution.
feedmill with grinders, mixers, conveyors, exhausts and generators,
extensive warehousing facilities for feeds and other supplies, anti- IN VIEW WHEREOF, the petition is DISMISSED. The assailed
pollution equipment like bio-gas and digester plants augmented by Decision and Resolution of the Court of Appeals, dated September
lagoons and concrete ponds, deepwells, elevated water tanks, 19, 2003 and February 4, 2004, respectively, are AFFIRMED. No
pumphouses, sprayers, and other technological appurtenances.[15] pronouncement as to costs.
Clearly, petitioner DAR has no power to regulate livestock farms SO ORDERED.
which have been exempted by the Constitution from the coverage of
agrarian reform. It has exceeded its power in issuing the assailed
A.O.
The subsequent case of Natalia Realty, Inc. v. DAR[16] reiterated
our ruling in the Luz Farms case. In Natalia Realty, the Court held
that industrial, commercial and residential lands are not covered by
the CARL.[17] We stressed anew that while Section 4 of R.A. No.
6657 provides that the CARL shall cover all public and private
agricultural lands, the term agricultural land does not include lands
classified as mineral, forest, residential, commercial or industrial.
Thus, in Natalia Realty, even portions of the Antipolo Hills
Subdivision, which are arable yet still undeveloped, could not be

19
Cases of Tenancy (Who are Beneficiaries of CARP)

has not shown that his case comes under any of those rare
exceptions on such findings may be validly reversed by this Court.

1. G.R. No. 86186 May 8, 1992

It is true that in Talavera v. Court of Appeals, 4 we held that a
RAFAEL GELOS, petitioner,
factual conclusion made by the trial court that a person is a tenant
vs.
farmer, if it is supported by the minimum evidence demanded by
THE HONORABLE COURT OF APPEALS and ERNESTOlaw, is final and conclusive and cannot be reversed by the appellate
ALZONA, respondents.
tribunals except for compelling reasons. In the case at bar, however,
we find with the respondent court that there was such a compelling
Balagtas P. Ilagan for petitioner.
reason. A careful examination of the record reveals that, indeed, the
trial court misappreciated the facts when it ruled that the petitioner
Emil Capulong, Jr., for private respondent.
was a tenant of the private respondent.
The circumstance that the findings of the respondent court do not
concur with those of the trial court does not, of course, call for
automatic reversal of the appellate court. Precisely, the function of
CRUZ, J.:
the appellate court is to review and, if warranted, reverse the
The Court is asked to determine the real status of the petitioner, who findings of the trial court. Disagreement between the two courts
claims to be a tenant of the private respondent and entitled to the merely calls on us to make a specially careful study of their
benefits of tenancy laws. The private respondent objects, contending respective decisions to determine which of them should be preferred
that the petitioner is only a hired laborer whose right to occupy the as more conformable to the facts at hand.
subject land ended with the termination of their contract of
The Court has made this careful study and will sustain the decision
employment.
of the respondent court.
The subject land is a 25,000 square meter farmland situated in
Cabuyao, Laguna, and belonging originally to private respondent The contract of employment dated July 5, 1970, written in Tagalog
Ernesto Alzona and his parents in equal shares. On July 5, 1970, and entitled "Kasunduan ng Upahang Araw," reads pertinently as
they entered into a written contract with petitioner Rafael Gelos follows:
employing him as their laborer on the land at the stipulated daily
Ang Unang Panig ay siyang may-ari at nagtatangkilik ng
wage of P5.00. 1 On September 4, 1973, after Alzona had bought 1.
his parents' share and acquired full ownership of the land, he wrote isang lagay na lupa, sinasaka, na tumatayo sa Nayon ng Baclaran,
Gelos to inform him of the termination of his services and to Cabuyao, Laguna, na siyang gagawa at sasaka sa lupa, samantalang
demand that he vacate the property. Gelos refused and continued ang Ikalawang Panig ay magiging upahan at katulong sa paggawa
ng lupa.
working on the land.
Ang Unang Panig ay gustong ipagpatuloy ang
On October 1, 1973, Gelos went to the Court of Agrarian Relations 2.
pagbubungkal
at paggawa ng bukid na binabanggit sa itaas at ang
and asked for the fixing of the agricultural lease rental on the
property. He later withdrew the case and went to the Ministry of Ikalawang Panig ay may ibig na magpaupa sa paggawa sa halagang
Agrarian Reform, which granted his petition. For his part, Alzona P5.00 sa bawat araw, walong oras na trabaho gaya ng mga
filed a complaint for illegal detainer against Gelos in the Municipal sumusunod: Patubigan ng linang; pagpapahalabas ng mga pilapil;
Court of Cabuyao, but this action was declared "not proper for trial" pagpapaaldabis sa unang araw ng pag-aararo; pagpapalinis ng damo
by the Ministry of Agrarian Reform because of the existence of a sa ibabaw ng pilapil; pagpapakamot (unang pagpapasuyod),
at
pagpapabalasaw
(ikalawa't
ikatlong
tenancy relationship between the parties. Alzona was rebuffed for pagpapahalang
pagpapasuyod);
isang
tao
sa
pagsasabog
ng
abono
una sa
the same reason when he sought the assistance of the Ministry of
pagpapantay
ng
linang;
bago
magtanim;
isang
tao
sa
pagaalaga
ng
Labor and later when he filed a complaint with the Court of
Agrarian Relations for a declaration of non-tenancy and damages dapog; upa sa isang tao ng magbobomba ng gamot laban sa pagkapit
against Gelos. On appeal to the Office of the President, however, the ng mga kulisap (mayroon at wala); sa nag-we-weeder; upa sa mga
complaint was declared proper for trial and so de-archived and tao na maggagamas at magpapatubig ng palay; magsasapaw ng mga
pilapil at iba pa.
reinstated.
Ang Unang Panig at ang Ikalawang Panig ay nagkasundo
After hearing, the Regional Trial Court of San Pablo City (which 3.
na
ang
huli
ay gagawa sa bukid ayon sa nabanggit sa itaas bilang
had taken over the Court of Agrarian Relations under PB 129)
rendered a decision dated April 21, 1987, dismissing the complaint. katulong at upahan lamang. Ang Unang Panig bukod sa sila ang
2 It found Gelos to be a tenant of the subject property and entitled to gagawa at magsasaka ay maaaring umupa ng iba pang tao
remain thereon as such. The plaintiff was also held liable in manggagawa sa upahang umiiral sang-ayon sa batas katulad ng pagaararo, pagpapahulip, pagpapagamas, pagbobomba, pagweweeder,
attorney's fees and costs.
pagsasabog ng abono, pagbobomba ng gamot, pagpapatubig at iba
The decision was subsequently reversed by the Court of Appeals. In pang mga gawain. Maaaring alisin ang Ikalawang Panig sa
its judgment promulgated on November 25, 1988, 3 it held that pagpapatrabaho sa ano mang oras ng Unang Panig.
Gelos was not a tenant of the land in question and ordered him to
Ipinatatanto ng Ikalawang Panig na siya ay hindi kasama
surrender it to Alzona. He was also held liable for the payment of 4.
sa
bukid
kundi
upahan lamang na binabayaran sa bawa't araw ng
P10,000.00 as attorney's fees and the costs of the suit.
kanyang paggawa sa bukid na nabanggit.
The basic question the petitioner now raises before the Court is
essentially factual and therefore not proper in a petition for review It is noted that the agreement provides that "ang Ikalawang Panig
under Rule 45 of the Rules of Court. Only questions of law may be (meaning Gelos) ay may ibig na magpaupa sa paggawa sa halagang
raised in this kind of proceeding. The settled rule is that the factual P5.00 sa bawa't araw, walong oras na trabaho" (The Second Party
findings of the Court of Appeals are conclusive on even this Court desires to lease his services at the rate of P5.00 per day, eight hours
as long as they are supported by substantial evidence. The petitioner of work) and that "Ipinatatanto ng Ikalawang Panig na siya ay hindi
kasama sa bukid kundi upahan lamang na binabayaran sa bawa't
araw ng kanyang paggawa sa bukid na nabanggit.'' (The Second

20
Party makes it known that he is not a farm tenant but only a hired A tenant is defined under Section 5(a) of Republic Act No. 1199 as a
laborer who is paid for every day of work on the said farm.)
person who himself and with the aid available from within his
immediate farm household cultivates the land belonging to or
These stipulations clearly indicate that the parties did not enter into possessed by another, with the latter's consent, for purposes of
a tenancy agreement but only a contract of employment. The production, sharing the produce with the landholder under the share
agreement is a lease of services, not of the land in dispute. This tenancy system, or paying to the landholder a price-certain or
intention is quite consistent with the undisputed fact that three days ascertainable in produce or in money or both, under the leasehold
before that agreement was concluded, the former tenant of the land, tenancy system. (Emphasis supplied)
Leocadio Punongbayan, had executed an instrument in which he
voluntarily surrendered his tenancy rights to the private respondent. For this relationship to exist, it is necessary that: 1) the parties are
5 It also clearly demonstrates that, contrary to the petitioner's the landowner and the tenant; 2) the subject is agricultural land; 3)
contention, Alzona intended to cultivate the land himself instead of there is consent; 4) the purpose is agricultural production; 5) there is
placing it again under tenancy.
personal cultivation; and 6) there is sharing of harvest or payment of
rental. In the absence of any of these requisites, an occupant of a
The petitioner would now disavow the agreement, but his parcel of land, or a cultivator thereof, or planter thereon, cannot
protestations are less than convincing. His wife's testimony that he qualify as a de jure tenant. 11
is illiterate is belied by his own testimony to the contrary in another
proceeding. 6 Her claim that they were tricked into signing the On the other hand, the indications of an employer-employee
agreement does not stand up against the testimony of Atty. Santos relationship are: 1) the selection and engagement of the employee;
Pampolina, who declared under his oath as a witness (and as an 2) the payment of wages; 3) the power of dismissal; and 4) the
attorney and officer of the court) that he explained the meaning of power to control the employee's
the document to Gelos, who even read it himself before signing it. 7 conduct although the latter is the most important element. 12
Atty. Pampolina said the agreement was not notarized because his
commission as notary public was good only for Manila and did not According to a well-known authority on the subject, 13 tenancy
cover Laguna, where the document was executed. 8 At any rate, the relationship is distinguished from farm employer-farm worker
lack of notarization did not adversely affect the veracity and relationship in that: "In farm employer-farm worker relationship, the
effectiveness of the agreement, which, significantly, Gelos and his lease is one of labor with the agricultural laborer as the lessor of his
wife do not deny having signed.
services and the farm employer as the lessee thereof. In tenancy
relationship, it is the landowner who is the lessor, and the tenant the
Gelos points to the specific tasks mentioned in the agreement and lessee of agricultural land. The agricultural worker works for the
suggests that they are the work of a tenant and not of a mere hired farm employer and for his labor be receives a salary or wage
laborer. Not so. The work specified is not peculiar to tenancy. What regardless of whether the employer makes a profit. On the other
a tenant may do may also be done by a hired laborer working under hand, the tenant derives his income from the agricultural produce or
the direction of the landowner, as in the case at bar. It is not the harvest."
nature of the work involved but the intention of the parties that
determines the relationship between them.
The private respondent, instead of receiving payment of rentals or
sharing in the produce of the land, paid the petitioner lump sums for
As this Court has stressed in a number of cases, 9 "tenancy is not a specific kinds of work on the subject lot or gave him vales, or
purely factual relationship dependent on what the alleged tenant advance payment of his wages as laborer thereon. The petitioner's
does upon the land. It is also a legal relationship. The intent of the wife claims that Alzona made her husband sign the invoices all at
parties, the understanding when the farmer is installed, and as in this one time because he allegedly needed them to reduce his income
case, their written agreements, provided these are complied with and taxes. Even assuming this to be true, we do not think that made the
are not contrary to law, are even more important."
said payments fictitious, especially so since the petitioner never
denied having received them.
Gelos presented receipts 10 for fertilizer and pesticides he allegedly
bought and applied to the land of the private respondent, but the The other issue raised by the petitioner, which is decidedly legal, is
latter insists that it was his brother who bought them, being an easily resolved. There being no tenancy relationship, the contention
agriculturist and in charge of the technical aspect of the farm. that the private respondent's complaint has prescribed under Section
Moreover, the receipts do not indicate to which particular 38 of R.A. 3844 must also fail. That section is not applicable. It
landholding the fertilizers would be applied and, as pointed out by must be noted that at the very outset, Alzona rejected the petitioner's
the private respondent, could refer to the other parcels of land which claim of agricultural tenancy and immediately instituted his action
Gelos was tenanting.
for unlawful detainer in accordance with Section 1, Rule 70 of the
Rules of Court. As it happened, the said case was held not proper for
The petitioner's payment of irrigation fees from 1980 to 1985 to the trial by the Ministry of Agrarian Reform. He then resorted to other
National Irrigation Administration on the said landholding is remedies just so he could recover possession of his land and, finally,
explained by the fact that during the pendency of the CAR case, the in 1979, he yielded to the jurisdiction of the defunct Court of
Agrarian Reform Office fixed a provisional leasehold rental after a Agrarian Relations by filing there an action for declaration of nonpreliminary finding that Gelos was the tenant of the private tenancy. The action, which was commenced in 1979, was within the
respondent. As such, it was he who had to pay the irrigation fees. ten-year prescriptive period provided under Article 1144 of the Civil
Incidentally, Section 12, subpar. (r) of PD 946 provides that the Code for actions based on a written contract. *
Secretary's determination of the tenancy relationship is only
preliminary and cannot be conclusive on the lower court.
The Court quotes with approval the following acute observations
made by Justice Alicia Sempio-Diy:
It is noteworthy that, except for the self-serving testimony of the
petitioner's wife, the records of this case are bereft of evidence It might not be amiss to state at this juncture that in deciding this
regarding the sharing of harvest between Gelos and Alzona. No less case in favor of defendant, the lower court might have been greatly
importantly, as the Court of Appeals observed, the petitioner has not influenced by the fact that defendant is a mere farmer who is almost
shown that he paid rentals on the subject property from 1970 to illiterate while plaintiff is an educated landlord, such that it had felt
1973, before their dispute arose.
that it was its duty to be vigilant for the protection of defendant's
interests. But the duty of the court to protect the weak and the
underprivileged should not be carried out to such an extent as to

21
deny justice to the landowner whenever truth and justice happen to
be on his side. Besides, defendant's economic position vis a vis the
plaintiff does not necessarily make him the underprivileged party in
this case, for as testified by plaintiff which defendant never denied,
the small land in question was the only landholding of plaintiff
when he and his father bought the same, at which time he was just a
lowly employee who did not even have a house of his own and his
father, a mere farmer, while defendant was the agricultural tenant of
another piece of land and also owns his own house, a sari sari store,
and a caritela. Plaintiff also surmised that it was only after
defendant had been taken into its wings by the Federation of Free
Farmers that he started claiming to be plaintiff's agricultural tenant,
presumably upon the Federation's instigation and advice. And we
cannot discount this possibility indeed, considering that during the
early stages of the proceedings this case, defendant even counterproposed to plaintiff that he would surrender the land in question to
the latter if plaintiff would convey to him another piece of land
adjacent to the land in question, almost one ha. in area, that plaintiff
had also acquired after buying the land in question, showing that
defendant was not as ignorant as he would want the Court to believe
and had the advice of people knowledgeable on agrarian matters.
This Court has stressed more than once that social justice or any
justice for that matter is for the deserving, whether he be a
millionaire in his mansion or a pauper in his hovel. It is true that, in
case of reasonable doubt, we are called upon to tilt the balance in
favor of the poor, to whom the Constitution fittingly extends its
sympathy and compassion. But never is it justified to prefer the poor
simply because they are poor, or to reject the rich simply because
they are rich, for justice must always be served, for poor and rich
alike, according to the mandate of the law.
WHEREFORE, the challenged decision of the Court of Appeals is
AFFIRMED and the petition is DENIED, with costs against the
petitioner. It is so ordered.

22
2. G.R. No. L-27797

August 26, 1974

TRINIDAD GABRIEL, plaintiff-appellee,

vs.
EUSEBIO PANGILINAN, defendant-appellant.
Mariano Manahan, Jr. for plaintiff-appellee.
Virgilio M. Pablo for defendant-appellant.
Armando M. Laki for movant.

verbally, by the plaintiff's father, Potenciano Gabriel in 1923 for as

long as the defendant wanted subject to the condition that he would
convert the major portion into a fishpond and the part which was
already a fishpond be improved at his expense which would be
reimbursed by Potenciano Gabriel or his heirs at the termination of
the lease for whatever cause; that when the plaintiff became the
owner of the property through inheritance, she told the defendant
that she would honor her father's contract with the defendant, and
likewise assured him that he could continue leasing the property,
whose original rental of P400.00 a year had been progressively
increased to P1,200.00, for as long as he wanted since she was not
in a position to attend to it personally. As a special defense, the
defendant reiterated the alleged lack of jurisdiction of the trial court
to take cognizance of the case.

ZALDIVAR, J.:p

On February 12, 1962 the trial court issued an order herein below
This appeal from the decision, dated December 26, 1963, of the quoted in full:
Court of First Instance of Pampanga in its Civil Case No. 1823, was
certified to this Court by the Court of Appeals for the reason that the The plaintiff sinks to eject the defendant from the fishpond
described in the complaint which is under lease to the said
jurisdiction of an inferior court is involved.
defendant, who, however, refuses to vacate. Instead, he has
During the pendency of this case before this Court, under date of impugned the jurisdiction of this Court contending that the action
April 29, 1972, Atty. Virgilio M. Pablo, counsel for the appellant should have been filed with the Court of Agrarian Relations, which
Eusebio Pangilinan, gave notice to this Court that said appellant has original and exclusive jurisdiction, as their relationship is one of
died on April 3, 1964, and was survived by his children, who are his leasehold tenancy.
legal heirs, namely: Salvador Pangilinan, Santos Pangilinan,
Mariano Pangilinan, Carlos Pangilinan and Pilar Pangilinan de After the motion to dismiss was denied on the basis of the
Avante. For the purposes of this case the appellant Eusebio allegations of the complaint, the parties were ordered to adduce
evidence for the purpose of determining which Court shall take
Pangilinan, therefore, is substituted by his heirs herein named.
cognizance of the case.
Under date of November 20, 1973, Atty. Amando M. Laki filed a
motion with this Court advising that appellee Trinidad Gabriel died It appears that the fishpond is presently in the possession of the
on June 14, 1967, and was survived by her heirs and successors-in- defendant, who originally leased it from the father of the plaintiff.
interest, namely: Corazon O. Gabriel, married to Lamberto Ignacio; Upon the death of the said father, the fishpond was inherited by the
Ernesto O. Gabriel; Ester O. Gabriel, married to Emmanuel Padua; plaintiff. It is now covered by T.C.T. No. 1634 and is registered in
Generoso O. Gabriel, Marciano O. Gabriel and Pablo O. Gabriel, her name. It contains an area of 169,507.00 square meters. The
and prayed that appellee Trinidad Gabriel be substituted by her heirs rental is on a yearly basis.
herein named. By order of this Court of December 4, 1973 the
It also appears that the defendant has ceased to work personally with
prayer for substitution was granted.
the aid of helpers the aforecited fishpond since 1956 he became ill
In its resolution dated April 19, 1967 certifying the case to this and incapacitated. His daughter, Pilar Pangilinan, took over. She
Court, the Court of Appeals made the following findings, which Wetestified that she helps her father in administering the leased
property, conveying his instructions to the workers, Urbano
adopt:
Maninang, Isidro Bernal and Marciano Maninang. The names of Ire,
On June 18, 1960 Trinidad Gabriel filed a complaint in the Court ofJuan and Aguedo Viada have been mentioned as the laborers who
First Instance of Pampanga against Eusebio Pangilinan alleging that were paid for the repair of the dikes. Bernardo Cayanan, a nephew
she is the owner of a fishpond situated in barrio Sta. Ursula, Betis, of the defendant, acts as the watcher. He has lived separately since
Pampanga and measuring about 169,507 square meters; that he got married. Excepting Pilar Pangilinan. who is residing near the
sometime during the last war she entered into an oral contract of fishpond, the other children of the defendant are all professions; a
lease thereof with the defendant on a year to year basis, i.e., from lawyer, an engineer, and a priest all residing in Manila. None of
January 1 to December 31, at a rental of P1,200, plus the amount of these persons has been seen working on the fishpond.
real estate taxes, payable in advance in the month of January; that
desiring to develop and cultivate the fishpond by herself, she The above are the material and pertinent facts upon which we enter
notified the defendant in a letter dated June 26, 1957 that she was this order.
terminating the contract as of December 31, 1957; that upon request
of the defendant, she extended the lease for another year; that on After a study of the facts and in the light of the provisions of the
November 19, 1958 she again wrote the defendant that he should Tenancy Law, Republic Act No. 1199, particularly Sections 4 and 9,
surrender possession of the fishpond on January 1, 1959, which as amended. it seems clear that his case does not fall within the
demand he however ignored. Plaintiff accordingly prayed that the purview of said Act. The lease contract is manifestly a civil lease
defendant be ordered to restore the possession of the fishpond to her governed by the New Civil Code. Considering the area of the
and to pay her P1,200, plus the amount of real estate taxes, a year fishpond, 16 hectares, more or less, the fact that neither the
defendant, who is physically incapacitated, or his daughter is
from 1959, attorney's fees and costs.
Personally cultivating the fishpond or through the employment of
The defendant moved for the dismissal of the complaint on the mechanical farm implements, and the further fact that the persons
ground that the trial court had no jurisdiction over the case which named above are not members of the immediate farm household of
properly pertains to the Court of Agrarian Relations, there being an the defendant, the conclusion is that no tenancy relationship exists
agricultural leasehold tenancy relationship between the parties. between the plaintiff and the defendant as defined by Republic Act
Upon opposition by the plaintiff, the motion was denied. The No. 1199, as amended.
defendant thereafter filed his answer with counterclaim alleging,
inter alia, that the land in question was originally leased to him, also We are, therefore, of the opinion and so hold that this Court is
vested with jurisdiction to try and decide this case. After this order

23
has become final, the plaintiff may request for the setting of the Those are the findings and conclusions of facts made by the Court
initial trial.
of Appeals which, as a general rule, bind this Court. 2
The defendant does not contest the findings of facts therein made by1. Let Us now discuss the issues raised in this appeal. First, was the
the trial court.
relationship between the appellee and appellant a leasehold tenancy
or a civil law lease?
After the parties adduced their respective evidence on the merits,
decision was rendered wherein the trial court Pursuant to Article There are important differences between a leasehold tenancy and a
1197 of the Civil Code, fixed the period of the low up to June 30, civil law lease. The subject matter of leasehold tenancy is limited to
1964, the defendant on said date to surrender possession of the agricultural land; that of civil law lease may be either rural or urban
fishpond to the plaintiff and to pay the rentals due the latter. The property. As to attention and cultivation, the law requires the
plaintiff, on her part, was required upon surrender of on to her, to leasehold tenant to personally attend to, and cultivate the
pay the defendant the sum of P1,000.00 as reimbursement of the agricultural land, whereas the civil law lessee need not personally
expenses he incurred in improving the fishpond, and upon failure bycultivate or work the thing leased. As to purpose, the landholding in
either party to pay the amount due the other, the same would bear leasehold tenancy is devoted to agriculture, whereas in civil law
interest at the legal rate until full payment is made.
lease, the purpose may be for any other lawful pursuits. As to the
law that governs, the civil law lease is governed by the Civil Code,
A reconsideration by the defendant having been denied, he appealed whereas leasehold tenancy is governed by special laws. 3
to this Court and assigned the following errors:
In order that leasehold tenancy under the Agricultural Tenancy Act
1. The lower court erred in considering the relationship of appellee may exist, the following requisites must concur.
and appellant as that of a civil lease, in accordance with the Civil
Code of the Philippines and not a leasehold tenancy under Rep. Act 1. That the land worked by the tenant is an agricultural land;
No. 1199 as amended.
2. That the land is susceptible of cultivation by a single person
2. The lower court erred in not holding that the Court of First together with members of his immediate farm household;
Instance is without jurisdiction, the cue being that of an agrarian
relation in nature pursuant to Rep Act. NO. 1199 as amended.
3. That the land must be cultivated by the tenant either personally or
with the aid of labor available from members of his immediate farm
3. The lower court erred in appreciating the evidence of the household;
appellant particularly the basis for the expenditure for the
development of the fishpond in question.
4. That the land belongs to another; and
4. The lower court erred in rendering judgment in favor of the 5. That the use of the land by the tenant is for a consideration of a
appellant in them easily amount of one thousand pesos for fixed amount in money or in produce or in both. 4
reimbursement and for seven hundred pesos for the cost of the
floodgate.
Were the foregoing requisites present in the instant case?
Anent the question of jurisdiction, it is an admitted fact that plaintiff There is no doubt that the land in question is agricultural land. It is a
leased the fishpond to the defendant in 1943 without a fixed term, fishpond and the Agricultural Tenancy Act, which refers to
the annual rental payable at the end of the year (Exhibit C, "agricultural land", specifically mentions fishponds and prescribes
Deposition of plaintiff, Dec. 13, 1962, pp. 2 and 3). It is likewise the consideration for the use thereof. Thus Section 46(c) of said Act
undisputed that the work in the fishpond consisted in letting out the provides that "the consideration for the use of sugar lands,
water so algae (lumut) would grow or if algae would not grow,fishponds, salt beds and of lands devoted to the raising of livestock
getting some from the river and putting them in the fishpond, shall be governed by stipulation between the parties". This Court
changing the dirty water with fresh water, repairing leaks in the has already ruled that "land in which fish is produced is classified as
dikes, and planting of fingerlings and attending to them; that these agricultural land." 5 The mere fact, however, that a person works an
were done by defendant, with some help; that he personally attended agricultural land does not necessarily make him a leasehold tenant
to the fishpond until 1956 when he became ill; that thereafter his within the purview of section 4 of Republic Act No. 1199. He may
nephew Bernardo Cayanan, who was living with him, helped in the still be a civil law lessee unless the other requisites as above
work to be done in the fishpond and his daughter Pilar Pangilinan enumerated are complied with.
helped in the management, conveying his instructions to the
workers (t.s.n., pp. 4-8, Magat).
Regarding the second requisite, it is to be noted that the land in
question has an area of 169,507 square meters, or roughly 17
Upon the foregoing facts, the defendant insists that the relationship hectares of fishpond. The question of whether such a big parcel of
between the parties is an agricultural leasehold tenancy governed by land is susceptible of being worked by the appellant's family or not
Republic Act No. 1199, as amended, pursuant to section 35 of has not been raised, and We see no need of tarrying on this point.
Republic Act No. 3844, and the present case is therefore within the So, We pass to the third requisite, to wit, whether the tenant himself
original and exclusive jurisdiction of the Court of Agrarian personally or with the aid of his immediate family worked the land.
Relations. Plaintiff, on the other hand, maintains in effect that since
defendant has ceased to work the fishpond personally or with the aid Assuming that appellant had previously entered in 1923 into an
of the members of his immediate farm household (Section 4, agreement of leasehold tenancy with Potenciano Gabriel, appellee's
Republic Act No. 1199) the tenancy relationship between the parties father, such tenancy agreement was severed in 1956 when he ceased
has been extinguished (Section 9, id.) and become of civil lease and to work the fishpond personally because he became ill and
therefore the trial court properly assumed jurisdiction over the case. incapacitated. Not even did the members of appellant's immediate
farm household work the land in question. Only the members of the
It does appear that the controversy on the issue of jurisdiction calls family of the tenant and such other persons, whether related to the
for the interpretation of cultivating or working the land by the tenant tenant or not, who are dependent upon him for support and who
personally or with the aid of the members of his immediate farm usually help him to operate the farm enterprise are included in the
household. 1
term "immediate farm household" 6 The record shows who helped
work the land in question, and We quote:

24
fishpond in question to the heirs and successors-in-interest of
It also appears that the defendant has ceased to work personally with appellee Trinidad Gabriel; and said heirs and successors-in-interest
the aid of helpers the aforecited fishpond since 1956 when he of appellant Eusebio Pangilinan should pay the heirs and
became ill and incapacitated. His daughter, Pilar Pangilinan took successors-in-interest of appellee Trinidad Gabriel the accrued
over. She testified that she helps her father in administering the rentals. From January 1, 1960, at the rate of P1,200.00 a year, until
leased property, conveying his instructions to the workers, Urbano the actual delivery of the possession of the fishpond as herein
Maninang, Isidro Bernal and Marciano Maninang. The names of Ire, ordered, with interest at the legal rate until full payment is made.
Juan and Aguedo Viada have been mentioned as the laborers who
were paid for the repair of the dikes. Bernardo Cayanan, a nephew IT IS SO ORDERED.
of the defendant, acts as the watcher. He has lived separately since
he got married. Excepting Pilar Pangilinan, who is residing near the
fishpond, the other children of the defendant are all professionals: a
lawyer, an engineer, and a priest all residing in Manila. None of
these persons has been seen working on the fishpond. 7
The law is explicit in requiring the tenant and his immediate family
to work the land. Thus Section 5 (a) of Republic Act No. 1199, as
amended, defines a "tenant" as a person who, himself and with the
aid available from within his immediate farm household, cultivates
the land belonging to, or possessed by, another, with the latter's
consent for purposes of production sharing the produce with the
landholder under the share tenancy system, or paying to the
landholder a price certain in produce or in money or both, under the
leasehold tenancy system. Section 8 of the same Act limits the
relation of landholder and tenant to the person who furnishes the
land and to the person who actually works the land himself with the
aid of labor available from within his immediate farm household.
Finally, Section 4 of the same Act requires for the existence of
leasehold tenancy that the tenant and his immediate farm household
work the land. It provides that leasehold tenancy exists when a
person, who either personally or with the aid of labor available from
members of his immediate farm household, undertakes to cultivate a
piece of agricultural land susceptible of cultivation by a single
person together with members of his immediate farm household,
belonging to, or legally possessed by, another in consideration of a
fixed amount in money or in produce or in both.
A person, in order to be considered a tenant, must himself and with
the aid available from his immediate farm household cultivate the
land. Persons, therefore, who do not actually work the land cannot
be considered tenants; 8 and he who hires others whom he pays for
doing the cultivation of the land, ceases to hold, and is considered as
having abandoned the land as tenant within the meaning of sections
5 and 8 of Republic Act. No. 1199, and ceases to enjoy the status,
rights, and privileges of one.
We are, therefore, constrained to agree with the court a quo that the
relationship between the appellee Trinidad Gabriel and appellant
Eusebio Pangilinan was not a leasehold tenancy under Republic Act
No. 1199. Hence, this case was not within the original and exclusive
jurisdiction of the Court of Agrarian Relations. 9
2. Regarding the second assignment of error, We accordingly rule
that the Court of First Instance correctly assumed jurisdiction over
the case at bar, this being a case of civil law lease.
3. We deem it unnecessary to discuss the third and fourth assigned
errors as these are issues involving findings of facts which have
been settled by the lower court, and unless there is grave abuse of
discretion, which we do not find in the record of the case, We shall
not venture to discuss the merits of the factual findings of the court
a quo.
IN VIEW OF THE FOREGOING, the decision of the Court of First
Instance of Pampanga in its Civil Case No. 1823, appealed from, is
affirmed, with costs against the appellants.
This decision should apply to the heirs and successors-in-interest of
the original parties, as named in this decision. In consonance with
the decision of the lower court, the heirs and successors-in-interest
of appellant Eusebio Pangilinan should deliver the possession of the

25
3 G.R. No. L-20700

February 27, 1969

actuations, like the failure to clean the land during the months of
March and April, and his failure to prepare his seed bed in the
month of May which is the period for broadcasting seedling in the
community".

FIDEL TEODORO, petitioner,

vs.
FELIX MACARAEG and COURT OF AGRARIAN RELATIONS,
Second Regional District, Sala II, respondents.
On February 6, 1962, when the hearing of the present controversy
was nearing completion in the respondent agrarian court but before
Jose A. Buendia and Agustin A. Pelmoka for petitioner.
the case was submitted for decision, Macaraeg filed a "supplemental
Jesus A. Garcia for respondent Felix Macaraeg.
petition", claiming damages as a a result of his dispossession. Said
petition was given due course by the court commissioner and the
CASTRO, J.:
requisite hearing was set for March 9, 1962. Both Teodoro and
Niegos interposed their respective answers, identically asserting that
Before us for review, upon a petition for certiorari, are the decision the same was filed out of time and that the failure of Macaraeg to
of the respondent Court of Agrarian Relations of September 7, 1962 claim earlier his alleged damages amounted to a fatal neglect which
in CAR case 558-Gba. 68 (Nueva Ecija), ordering the herein could no longer be cured at that very late stage of the proceedings.
petitioner Fidel Teodoro to reinstate the herein private respondent Nonetheless, hearing on the said petition was disclosed that as "a
Felix Macaraeg (the petitioner in the agrarian court) to his "former result of his (Macaraeg's) ejectment, he became destitute" since he
landhoding ... and to keep him as the true and lawful tenant in had no "income except from those derived from transplanting and
accordance with law," and the resolution of the same court of reaping wherein he earned the amount of P30.00". It was further
November 27, 1962 condemning Teodoro to pay or deliver to proved that "for the aqricultural year 1961-62, Jose Niegos realized
Macaraeg as damages "82 cavans of palay or its equivalent value in a gross harvest of 110 cavans out of which he paid his rental to Fidel
the amount of P820.00 computed at the rate of P10.00 per cavan, Teodoro in the amount of 42 cavans and 23 kilos."
plus interest at 10% until fully paid."
On September 7, 1962 the decision under review was rendered, with
We turn to the factual milieu.
the following dispositive portion:

On June 7, 1961 Macaraeg filed a petition with the Court of IN VIEW OF ALL THE FOREGOING CONSIDERATIONS,
Agrarian Relations (Second Regional District, sala II, Guimba, judgment is hereby rendered in favor of petitioner Felix Macaraeg
Nueva Ecija) praying, inter alia, that (1) an interlocutory order be and against respondents Fidel Teodoro and Jose Niegos in the tenor
issued to restrain Teodoro and Jose Niegos (the respondents below), and disposition hereinbelow provided, to wit:
from ejecting him from his landholding pending resolution of his
petition; and (2) after due trial, he be maintained as the lawful tenant 1. Jose Niegos is hereby ordered to vacate the landholding in
in the disputed landholding.
question with an approximate area of four (4) hectares, situated at
Barrio Kalisitan, Talugtug Nueva Ecija, in favor of herein petitioner
Macaraeg alleged that he is a leasehold tenant of Teodoro and to refrain from molesting or in any manner disturbing his
cultivating a farmholding situated in the municipality of Talugtug, peaceful possession and cultivation thereof, subject to the condition
Nueva Ecija, of an area of four (4) hectares devoted to rice culture, that said respondent shall have harvested and threshed his crop
and that he has worked said land "as a tenant for the last seven which he planted for the current agricultural year;
years"; that on March 2, 1961 he received a letter from Teodoro and
his wife advising him that the aforesaid landholding will be given to 2. Conformably with the preceding paragraph, Fidel Teodoro is
another tenant, on the pretext that he (Macaraeg) "is contracting be a hereby ordered to reinstate said petitioner to his former landholding
tenant of another in said landholding"; that forthwith, Teodoro aforestated and to keep him as the true and lawful tenant in
placed a new tenant, Jose Niegos, in the disputed land; that accordance with law;
subsequently, Niegos repeatedly forbade him from working on said
riceland; that in order to avoid trouble, he refrained from forcibly 3. Declaring Exhibit A as a leasehold tenancy contract between the
entering the landholding, but with the advent of the planting season, parties for the agricultural year 1960-61 as the term is understood
it became imperative that the agrarian court order his reinstatement under our tenancy law; as a consequence hereof, Exhibit 4-Teodoro
and restrain Teodoro and Niegos from committing further acts of and Exhibit 5-Niegos, i.e. contract of lease between Fidel Teodoro
dispossession.
and Jose Niegos is hereby declared void and of no legal effect; and
In his answer with counterclaim dated June 19, 1961, Teodoro 4. Dismissing petitioner's claim for damages as embodied in his
categorically denied that Macaraeg was his tenant, claiming that supplemental petition.
"ever since he became the owner of around 39 hectares of riceland
in Kalisitan, Talugtug, N. Ecija, he had always leased all of it under Teodoro and Niegos filed separate motions for reconsideration
civil lease and he had never given any portion of it under tenancy." which were denied by the respondent agrarian court in its resolution
He further alleged that after the expiration of his lease contract with of November 27, 1962. However, in the same resolution, the court a
Macaraeg in January, 1961, his wife twice notified Macaraeg to quo reconsidered, upon motion of Macaraeg, its ruling denying the
renew his contract for the then incoming agricultural year 1961-62, latter's prayer for damages, thus:
but the latter "verbally told Mrs. Teodoro that he was no longer
interested to work on the land and he was giving it up as he had left With respect to petitioner's claim for damages as embodied in his
the place already." Teodoro also claims that it was only after supplemental petition, wherein evidence was adduced in support
Macaraeg had abandoned the farmland that he decided to lease it to thereof, we believe that its admission is in accordance with Section
Niegos.
2, Rule 17 of the Rules of Court of the Philippines, same not being
for the purpose of delaying the proceedings. And, the fact that the
On his part, Niegos seasonably answered, disclaming any Court of Agrarian Relations shall not be bound strictly by the
knowledge that Macaraeg is the tenant of Teodoro, and averring that technical rules of evidence but "shall act according to justice and
he entered the landholding in good faith clothed with the proper equity and substantial merits of the case", we believe that the
authority from the other respondent (Teodoro) and with the consent evidence to support the claim for damages received during the
and confirmity of the petitioner (Macaraeg) who allowed him to hearings before the court commissioner is meritorious (Secs. 10 and
work on the same"; and that Macaraeg "has no more interests in the 11 RA 1267, as amended). Hence, petitioner is entitled to recover
cultivation of the landholding as could be gleaned from his damages claimed by him from his landholder in the amount of 85

26
cavans of palay which is equal to the two years rental of his ordinary civil lease contract, not a leasehold tenancy agreement as
landholding less his earnings during the same period in the amount alleged by Macaraeg and sustained by the agrarian court. To start
of P30.00 only or is equivalent to 3 cavans of palay. In fine, Fidel with, Teodoro stresses, the parties denominated the said covenant as
Teodoro is liable to pay to petitioner the amount of 82 cavans of a "Contract of Lease", which assigned title discloses their mutual
palay or its cash value of P820.00, computed at P10.00 per cavan intention to execute an ordinary lease contract, for, otherwise, if
plus interest at 10% until fully paid.
they had intended to create a leasehold tenancy relation, they could
have accordingly captioned their agreement "with the word tenancy
After Teodoro's motion to reconsider the foregoing resolution was or some other word of similar import". Moreover, Teodoro points
denied, he interposed on January 5, 1963 the present petition, out that "in the contract of lease in question it is significant to note
imputing to the court the following errors:
that the words landlord and tenant were conspicuous by their
complete absence".
1. In holding that Macaraeg became a tenant of Teodoro by virtue of
the "Contract of Lease" which they executed in April, 1960;
The foregoing stance assumed by Teodoro is patently untenable, in
the face of the principal features and stipulations of the contract in
2. Assuming that the foregoing contract was in effect a leasehold controversy and the pertinent provisions of existing law on
tenancy agreement making Macaraeg a tenant of Teodoro in not leasehold tenancy. It bears emphasis that the title, label or rubric
finding the former guilty of abandonment, an act which terminated given to a contract cannot be used to camouflage the real import of
their tenancy relation; and
an agreement as evinced by its main provisions. Moreover, it is
basic that a contract is what the law defines it to be, and not what it
3. In condemning Teodoro to pay damages to Macaraeg for the is called by the contracting parties. 1
alleged dispossession, despite the fact that the claim for damages
embodied in the abovementioned "Supplemental Petition" below As correctly expressed by the respondent court, "viewed from the
were about to be terminated.
four corners of Exhibit A, we have no doubt that the leasehold
tenancy contract entered into between petitioner (Macaraeg) and
The pertinent provisions of the disputed "Contract of Lease"Fidel Teodoro is a pure and simple leasehold tenancy contract as the
between Teodoro and Macaraeg read as follows:
term is understood under our tenancy laws." This observation of the
agrarian court finds anchor in the pertinent provision of the
That the LESSOR is the registered owner of a certain parcel of land Agricultural Tenancy Act. Thus, section 4 of Rep. Act 1199, as
situated at Talugtug, Nueva Ecija, containing an area of THIRTY amended by Rep. Act 2263, provides that
NINE (39) HECTARES, more or less;
Leasehold tenancy exists when a person who, either personally or
That for and in consideration of the rental of Nine (9) cavans of with the aid of labor available from members of his immediate farm
palay per hectare for one agricultural year, the LESSOR hereby lets household, undertaken to cultivate a piece of agricultural land
and leases and the LESSEE hereby accepts an undivided portion 4 susceptible of cultivation by a single person together with members
Hectares of the abovementioned property under the following of his immediate farm household, belonging to a legally possessed
terms and conditions:
by another in consideration of a fixed amount in money or in
produced or in both.
1. That this contract of lease shall only be for the agricultural year
1960-61;
Furthermore, section 42 of the Agricultural Tenancy Act defines a
landlord-lessor as
2. That the LESSEE shall give a guaranty to answer for the payment
of the lease consideration of this contract;
Any person, natural or judicial, either as owner, lessee, usufructuary
or legal possessor of agricultural land, who lets, leases or rents to
3. That the rental of 38.7 cavans of palay per hectare shall be paid another said property for purposes of agricultural production and for
unto the LESSOR not later than January, 1961;
a price certain of ascertainable either in amount of money or
produced;
4. That the corresponding rental must be brought to the Poblacion of
Muoz, Nueva Ecija, to be deposited to any bonded Warehouse at while a tenant-lessee is defined as
the expense of the LESSEE and in the name of the LESSOR;
any person who, with the consent of the former (landlord-lessor),
5. That the rental must be of the same variety as that produced by tills, cultivates or operates said land, susceptible of cultivation by
the LESSEE;
one individual, personally or with the aid of labor available from
among his own immediate farm household.
6. That the LESSOR shall pay for the real property taxes
corresponding to the property leased;
Gleaned from the foregoing provisions, the following could be
synthesized as the principal elements of a lease-hold tenancy
7. That violation of any of the terms of this contract shall be contract or relation:
sufficient ground to terminate the same with damages against the
guilty party;
1. The object of the contract or the relationship is an agricultural
land which is leased or rented for the purpose of agricultural
8. That the property leased shall be used or utilized for agricultural production;
enterprise only;
2. The size of the landholding must be such that it is susceptible of
9. That in case of default on the part of the LESSEE to pay the lease personal cultivation by a single person with assistance from the
consideration when the same becomes due and payable and the members of his immediate farm household;
collection for the same reaches the court, the LESSEE hereby binds
himself to pay the cost of the suit including reasonable attorney's 3. The tenant-lessee must actually and personally till, cultivate or
fees. (Emphasis supplied)
operate said land, solely or with the aid of labor from his immediate
farm household; and
I. Teodoro contends that the language and tenor of the aforesaid
contract clearly manifest the intention of the parties to enter into an

27
4. The landlord-lessor, who is either the lawful owner or the legal except for any of the causes hereinafter enumerated and only after
possessor of the land, leases the same to the tenant-lessee for a price the same has been proved before and the dispossession is authorized
certain or ascertainable either in a amount of money or produce.
bye the court." (Emphasis supplied)
Reverting to the controverted "Contract of Lease", we are of the The abovecited provision does not permit the parties to stipulate at
consensus that it indubitably contains the forgoing essential what future time the tenant shall leave or surrender the land. Thus,
elements of a leasehold tenancy agreement.
this Court has held 5 that an agreement whereby the tenant was
required to return to the landlord his landholding after one crop year
The landholding in dispute is unmistakably an agricultural land cannot justify the tenant's dispossession after the said period
devoted to agricultural production. More specifically, the parties because such agreement is expressly proscribed by law.
stipulated that "the property leased shall be used or utilized for
agricultural enterprise only". (Emphasis supplied). Furthermore, the Still vehemently contending that he never intended to enter into any
parties also agreed that the farmland must be used for rice tenancy relation with Macaraeg, Teodoro finally argues that
production as could be inferred from the stipulation that "the rental construing the abovementioned "Contract of Lease" as a leasehold
of nine (9) cavans of palay per hectare for one agricultural year ... tenancy agreement would amount to a judicial negation of his
must be of the same variety (of palay) as that produced by the freedom to contract.
LESSEE". (Emphasis supplied)
Needless to stress, this Court frowns upon and rejects any attempt to
The land is definitely susceptible of cultivation by a single person as nullify the legitimate exercise of the right to contract. We agree with
it is of an area of only four and A half (4-) hectares. This Court has Teodoro that as a landholder he has full liberty to enter into a civil
held 2 that even a bigger area may be cultivated personally by the lease contract covering his property. What we want to indelibly
tenant, singly or with the help of the members of his immediate impress, however, is that once a landowner enters into a contract of
farm household.
lease whereby his land is to be devoted to agricultural production
and said landholding is susceptible of personal cultivation by the
From the stipulation that "the rental must be of the same variety as lessee, solely or with help of labor coming from his immediate farm
that produced by the LESSEE", it can reasonably be inferred that household, then such contract is of the very essence of a leasehold
the intention of the parties was that Macaraeg personally work the agreement, and perforce comes under the direct coverage of the
land, which he did as found by the Agrarian Court, thus: "In the tenancy laws. Otherwise, it would be easy to subvert, under the
instant case, petitioner (Macaraeg) cultivated the landholding guise of the liberty to contract, the intendment of the law of
belonging to said respondent (Teodoro) for the agricultural year protecting the underprivileged and ordinarily credulous farmer from
1960-61 in consideration of a fixed annual rental." (Emphasis the unscrupulous schemes and pernicious practices of the landed
supplied) Moreover, there is no evidence that Macaraeg did not gentry.
personally cultivate the land in dispute. Neither did Teodoro allege,
much less prove, that Macaraeg availed of outside assistance in the II. We now come to the second assignment of error. Teodoro posits
cultivation of the said riceland.
that granting the establishment of a leasehold tenancy relation
between him and Macaraeg by virtue of the aforesaid "Contract of
Teodoro is the registered owner of the disputed landholding and he Lease", the agrarian court nevertheless erred in not finding
delivered the possession thereof to Macaraeg in consideration of a Macaraeg guilty of abandonment, an act which terminates the
rental certain to be paid in produce. Evidently, there was a valid tenancy relation and justifies the ejectment of the tenant. In support
leasehold tenancy agreement. Moreover, the provision that the rental of his thesis, Teodoro points out that Macaraeg committed a positive
be accounted in terms of produce 9 cavans per hectare is an act of abandonment when he offered to vacate his leasehold in favor
unmistakable earmark, considering the other stipulations, that the of a certain Luciano Claus, and only after "he could not have his
parties did actually enter into a leasehold tenancy relation.
own way of placing Luciano Claus as his successor" did he try to
"recover the land holding". Assuming the veracity of the foregoing
Teodoro further argues, however, that the aforesaid "Contract of allegation, a tenant's offer or intention to surrender his hold on the
Lease" cannot possibly be construed as establishing a leasehold condition that the person named by him should be accepted as his
tenancy relation because the parties themselves ignored and successor, does not of itself constitute abandonment of his farmland.
repudiated the very essence of tenancy security of tenure
when they stipulated that "this agreement shall only be for the "The word 'abandon', in its ordinary sense, means to forsake
agricultural year 1960-61".
entirely; to forsake or renounce utterly. The dictionaries trace this
word to the root idea of 'putting under a ban'. The emphasis is on the
This argument is unacceptable. The mere fact that the parties fixed finality and the publicity with which some thing or body is thus put
and limited the duration of their lease contract to only one in the control of another, and hence the meaning of giving up
agricultural year, does not remove the relationship which they absolutely, with intent never again to resume or claim one's rights or
created from the purview of leasehold tenancy, considering the interests." 6 In other words, the act of abandonment constitutes
general import of their agreement which irreversibly leads to and actual, absolute and irrevocable desertion of one's right or property.
clearly justifies tenancy coverage. It is fundamental that the tenant- In the case at bar, Macaraeg merely intended to vacate his leasehold
lessee's security of tenure subsists notwithstanding the termination possession on the condition that a certain Claus be taken as his
of the contract which initially established the tenancy relation. In the successor. Hence, his act did not constitute desertion of his
language of the law, the "expiration of the period of the contract as leasehold as it was a mere intended surrender of the same. And as
fixed by the parties ... does not of itself extinguish the relationship". correctly espoused by the counsel for the respondent court, it is
3 This is a "practical consequence of the distinction between the "only through the actual surrender of the land that tenancy relation
tenancy contract which is fixed by the parties, and the tenancy terminates; no amount of intention to surrender severs the
relationship which is maintained and governed by law". 4 relationship". Furthermore, the said act of Macaraeg was not an
Furthermore, section 49 of the Agricultural Tenancy Act provides absolute renunciation of his leasehold possession, as it was in fact
that
clearly conditional.
Notwithstanding any agreement or provision of law as to the period However, Teodoro also claims, with characteristic certitude that
of future surrender of the land, in all cases where land devoted to Macaraeg did actually abandon work on the land in dispute and that
any agricultural purpose is held under any system of tenancy, the even the decision under review contains a finding to this effect. We
tenant shall not be dispossessed of his holdings by the landholder find no statement in the agrarian court's decision sustaining

28
Teodoro's view. On the contrary, we perceive truth in the respondent (now section 3 of Rule 10 of the Revised Rules of Court) which
court's counsel's manifestation that
exclusively pertains to amendment of pleadings, and has nothing to
do with the interposition of supplemental pleadings which is
The only times that the tenant herein did not work the land were (1) separately governed by section 5 of Rule 17 (now section 5 of Rule
during the time it was undergoing its regular dry season fallow, 10). Teodoro avers, moreover, that since Macaraeg filed his claim
and, ... (2) after he was prohibited from plowing the land by a for damages only when the hearing below was about to end, his
certain Niegos, an agent of petitioner. Failure to cultivate during the inaction must be considered as a waiver of such claim or that he
dry season fallow definitely does not amount to abandonment (Cf. should be considered guilty of fatal negligence.
De la Cruz vs. Asociacion Zangera Casilan et al., 83 Phil. 214).
Likewise, failure to cultivate the land by reason of the forcible In resolving this last assignment of error, attentions must be
prohibition to do so by a third party cannot also amount to centered on the liberal policy which frees the Court of Agrarian
abandonment, for abandonment presupposes free will.
Relations from the fetters of formalistic procedure. As aptly
observed in one case,9
Anent the charge of abandonment, it is also pertinent to note that
four days after Macaraeg received a letter from Teodoro and his Social justice would be a meaningless term if in a situation like the
wife advising him that the landholding in question will be given to present, an element of rigidity would be affixed to procedure
another tenant, he lost no time in inquiring from the Tenancy precepts and made to cover the matter. Flexibility should not be
Mediation Commission at Cabanatuan City about his rights as a ruled out. Precisely, what is sought to be accomplished, by such a
leasehold tenant. It would appear therefore that Macaraeg's fundamental principle expressly so declared by the Constitution
immediate reaction to his landlord's design to dispossess him (Art. II, sec. 5) is the effectiveness of the community's effort to
negates the act of abandonment imputed to him.
assist the economically underprivileged. For under existing
conditions, without such succor and support, they might not,
Moreover, Teodoro's pretension that Macaraeg had abandoned the unaided, be able to secure justice for themselves....
disputed landholding was squarely rejected by the agrarian court,
thus:
Moreover, there is equally the obligation on the part of the State to
afford protection to labor. The responsibility is incumbent then, not
In the instant case, while petitioner had intentions to surrender his only on the legislative and executive branches but also on the
landholding to respondent after the harvest for the agricultural judiciary, to translate this pledge into a living reality. The present
(year) 1960-61 which led the latter to advise the former not to give case is an appropriate occasion for the discharge of such a trust. To
his landholding to Luciano Claus, yet that surrender did not preclude relief under the circumstances herein disclosed would be to
materialize because said petitioner had apparently changed his fail to submit to the dictates of a plain constitutional duty. That we
mind. For as early as March 6, 1961, petitioner went to the Office of should not allow to happen.
the Tenancy Mediation Commission, Cabanatuan City for
consultation. As a matter of fact, said Commission wrote a letter to Since the abovementioned "supplemental pleading" was filed
Fidel Teodoro and his wife advising them to enjoin their overseer, without intent to delay the proceedings, the agrarian court exercised
Benito Ismael, from ejecting petitioner.
sound discretion in giving it due course in order that "the real matter
in dispute and all matters in the action in dispute between the parties
During the intervening period, Fidel Teodoro and his wife entered may, as far as possible, be completely determined in a single
into another lease contract of tenancy with Jose Niegos. For this proceeding". Moreover Teodoro has no reason to complain, for he
reason, Mariano Niegos, son of Jose Niegos, prevented petitioner was accorded every opportunity to controvert Macaraeg's claim for
from plowing his landholding when he found him in the premises ondamages, but apparently he did not, as in fact he does not here
June 1, 1961. However, notwithstading this incident, Fidel Teodoro traverse the substantiality of the award.lawphi1.nt
opened the door for negotiations. In fact, as late as June 23, 1961,
when petitioner went to the house of Fidel Teodoro in Manila, a Significantly, the Court of Agrarian Relations is not restricted to the
conference was set for that purpose at the house of Benito Ismael in specific relief claimed or demanding made by the parties to the
Muoz, Nueva Ecija which did not take place because of the dispute, but may include in the order or decision any matter or
absence of petitioner. Under these circumstances, it appears to our determination which may be deemed necessary and expedient for
mind that while negotiations for settlement were still pending, yet the purpose of settling the dispute or of preventing further disputes,
petitioner has not, in truth and in fact, surrendered his landholding. provided said matter for determination has been established by
(Emphasis supplied)
competent evidence during the hearing". 10 In words, the
respondent court could have determined Macaraeg's claim for
We are not at liberty to reverse the foregoing finding of fact in the damages even without his "supplemental petition", provided there
absence of any proof that it is unfounded or was arbitrarily arrived was proof to substantiate such claim (and such requisite evidence
at or that the Court had failed to consider important evidence to the was not wanting). Hence if the agrarian court could, have awarded
contrary. 7 This Court has consistently ruled that the findings of fact damages in favor of Macaraeg even in the absence of a specific
of the Court of Agrarian Relations will not be disturbed on appeal prayer; then there is no conceivable reason to bar the respondent
where there is substantial evidence to support them. 8 In the case at court from granting the same with the interposition of the aforesaid
bar, the finding of fact by the by the respondent court anent the issue "supplemental petition" which explicitly and unmistakeably prays
of abandonment rests on substantial evidence.
for damages resulting from Macaraeg's dispossession.
III. Toward the end of the proceedings in the respondent court, We hasten to modify however, the award of damages in so far as it
Macaraeg interposed a pleading which he denominated deducts from the total amount recoverable by Macaraeg the sum of
"supplemental petition", wherein he asked for damages as a result of P30 or its equivalent of 3 cavans of palay, representing his earnings
his dispossession. The said "supplemental petition" was given due during the period of his unlawful ejectment. This part of the award
course by the hearing commissioner and Macaraeg was allowed to contravenes section 27(1) of the Agricultural Tenancy Act which
present evidence in support thereof. On the basis of the evidence makes the erring landlord "liable to the tenant for damages to the
thus adduced, the respondent court awarded damages to Macaraeg extent of the landholder's participation in the harvest in addition to
as decreed in its abovementioned resolution of November 27, 1962. the tenant's right under Section twenty-two of this Act". And section
22(1) provides that the "tenant shall be free to work elsewhere
Teodoro maintains that the respondent court erred in admitting the whenever the nature of his farm obligations warrants his temporary
said "supplemental pleading" on the basis of section 2, Rule 17 absence from his holdings". Consequently, Macaraeg's measly

29
earning of P30 during the period of his dispossession should not be
deducted from the total amount of damages due to him. Interpreting
the abovecited section 27(1) in relation to section 22(1), this Court,
speaking through Mr. Justice J.B.L. Reyes held that
The earnings of the tenants during the period of unlawful ejectment
are not now deductible from the award of damages. In the case of
Potenciano vs. Estefani L-7690, promulgated on 27 July 1955, this
Court, on grounds of equity, ruled to deduct such income but said
case was decided under the prior law, Act 4054. The above-quoted
Section 27(1) of Republic Act No. 1199, as amended, which is the
one applicable to the present case, not only provides for a quantum
of damages to the tenant, based on the landlord's share in the
harvest, but adds thereto his right under section 22, which states:
(1) the tenant shall be free to work elsewhere whenever the nature
of his farm obligations warrants his temporary absence from his
holdings.
This right, although already granted under section 20 of Act 4054,
was not then a right additional to the recovery of damages
consequent to unlawful dismissal, but under Republic Act 1199, as
amended, it is to be added to the damages recoverable.11
ACCORDINGLY, the decision and resolution under review are
hereby affirmed, with the sole modification that the earnings of the
herein respondent during the period of his dispossession shall not be
deducted from the award of damages. Cost against the petitioner.

30
G.R. No. 85611

April 6, 1990

That they always received their share of the produce from the
complainant for every two months up to 1981.

VICTORIANO ZAMORAS, petitioner,

vs.
xxx
xxx
xxx
ROQUE SU, JR., ANITA SU HORTELLANO and NATIONAL
LABOR RELATIONS COMMISSION, respondents.
It is very clear in the evidence of record that complainant was an
employee of the respondent. This fact is even admitted by the
Paulo V. Briones for petitioner.
respondent in his answer by way of controverting the claim of the
Pacifico C. Cimafranca for private respondents.
complainant. (pp. 44-45, Rollo.)
On July 30, 1986, the Labor Arbiter rendered a decision holding that
Zamoras, as overseer of the respondent's plantation, was a regular
employee whose services were necessary and desirable to the usual
The issue in this petition is whether, upon the established facts, the trade or business of his employer. The Labor Arbiter held that the
petitioner was an employee or tenant of the private respondents.
dismissal of Zamoras was without just cause, hence, illegal. The
private respondents were ordered to reinstate him to his former
The petitioner, Victoriano Zamoras, was hired by the respondent, position as overseer of the plantation and to pay him backwages
Roque Su, Jr., in 1957 as overseer of his coconut land in Asenario, equivalent to P31,975.83 in the event that he opted not to be
Dapitan City. Zamoras was charged with the task of having the land reinstated or that his reinstatement was not feasible.
titled in Su's name, and of assigning portions to be worked by
tenants, supervising the cleaning, planting, care and cultivation of The private respondents appealed to the National Labor Relations
the land, the harvesting of coconuts and selling of the copra. As Commission, alleging that the Labor Arbiter erred:
compensation, Su paid Zamoras a salary of P2,400 per month plus
one-third (1/3) of the proceeds of the sales of copra which normally 1.
in disregarding respondents' evidence (a financial report
occurred every two months. Another one-third of the proceeds went showing the yearly copra sales from 1973 to 1977), proving that
to the tenants and the other third to Su. This system of sharing was complainant's one-third share of the copra sales amounted to
regularly observed up to September, 1981. As the coconut plantation P5,985.16 only and not P6,300 per harvest;
yielded an average harvest of 21,000 nuts worth P18,900, based on
the current market price of P3 per kilo, Zamoras' share amounted to 2.
in not holding that the complainant can no longer be
P6,300 every two months.
reinstated for he is already dead; and
GRIO-AQUINO, J.:

In May, 1981, Su informed Zamoras in writing that he obtained a 3.

in not finding that no employer-employee relationship
loan from the other respondent, Anita Su Hortellano, and that he existed between the parties.
authorized her to harvest the coconuts from his property "while the
loan was outstanding" (p. 8, Rollo). Su sent Zamoras a letter dated On September 16, 1988, the NLRC rendered a decision reversing
May 29, 1981 informing him that he was being laid-off temporarily the Labor Arbiter. It held that "the right to control test used in
until Su could obtain a loan from the Development Bank of the determining the existence of an employer-employee relationship is
Philippines with which to pay Anita. However, Zamoras was not unavailing in the instant case and that what exists between the
allowed anymore to work as overseer of the plantation. Without his parties is a landlord-tenant relationship" (p. 32, Rollo), because such
knowledge and consent, Hortellano harvested the coconuts without functions as introducing permanent improvements on the land,
giving him his one-third share of the copra sales.
assigning portions to tenants, supervising the cleaning, planting,
care and cultivation of the plants, and deciding where and to whom
On August 8, 1983, Zamoras filed in the Regional Arbitration to sell the copra are attributes of a landlord-tenant relationship,
Branch of the Ministry of Labor and Employment in Zamboanga hence, jurisdiction over the case rests with the Court of Agrarian
City a complaint against Roque Su, Jr. and Anita Su Hortellano for Relations.
illegal termination and breach of contract with damages of not less
than P75,600 as his uncollected share of the copra sales from Zamoras filed this petition, assailing the NLRC's decision.
September 15, 1981 to August 1983.
There is merit in the petition.
The officer-in-charge of the NLRC Sub-Regional Office in Dipolog
City who investigated the case submitted the following findings The NLRC's conclusion that a landlord-tenant relationship existed
which were adopted by the Labor Arbiter
between Su and Zamoras is not supported by the evidence which
shows that Zamoras was hired by Su not as a tenant but as overseer
The record would show that the respondent, Atty. Roque Su, Jr., is a of his coconut plantation. As overseer, Zamoras hired the tenants
resident of 976-A Gerardo Avenue Extension, Lahug, Cebu City and and assigned their respective portions which they cultivated under
at the same time an employee in the government up to the present, Zamoras' supervision. The tenants dealt directly with Zamoras and
while the land wherein the complainant herein was employed by the received their one-third share of the copra produce from him. The
respondent as overseer of the land since 1957 up to and until his evidence also shows that Zamoras, aside from doing administrative
termination from the service sometime in September 1981 without work for Su, regularly managed the sale of copra processed by the
just cause or causes duly authorized by law and after due process. tenants. There is no evidence that Zamoras cultivated any portion of
That to prove that complainant was the overseer of the land owned Su's land personally or with the aid of his immediate farm
by the respondent are the sworn declaration of the three witnesses, household. In fact the respondents never raised the issue of tenancy
namely: Vicente Amor, Narcisa Arocha, and Wilfredo Bernaldes in their answer.
who are presently working as tenants of the respondent. That the
three witnesses testified that they knew the complainant personallyUnder Section 5 (a) of R.A. No. 1199, a tenant is "a person who by
who has been working as overseer of the land because it was himself, or with the aid available from within his immediate
through him, the complainant, that they were allowed to work household, cultivates the land belonging to or possessed by another,
and/or occupy the land as tenants ever since up to the present. In with the latter's consent for purposes of production, sharing the
fact, they further declared that they do not know personally the produce with the landholder or for a price certain or ascertainable in
owner of the land and besides, they have not seen personally the produce or in money or both, under the leasehold tenancy system"
said owner as their dealing were directly done thru the complainant. (Matienzo vs. Servidad, 107 SCRA 276). Agricultural tenancy is

31
defined as "the physical possession by a person of land devoted to
agriculture, belonging to or legally possessed by another for the
purpose of production through the labor of the former and of the
members of his immediate farm household in consideration of
which the former agrees to share the harvest with the latter or to pay
a price certain or ascertainable, whether in produce or in money, or
both" (Sec. 3, R.A. No. 1199; 50 O.G. 4655-56; Miguel Carag vs.
CA, et al., 151 SCRA 44).
The essential requisites of a tenancy relationship are: (1) the parties
are the landholder and the tenant; (2) the subject is the agricultural
holding; (3) there is consent between the parties; (4) the purpose is
agricultural production; (5) there is personal cultivation by the
tenant; and (6) there is a sharing of harvests between landlord and
tenant (Antonio Castro vs. CA and De la Cruz, G.R. L-34613,
January 26, 1989; Tiongson vs. CA, 130 SCRA 482; Guerrero vs.
CA, 142 SCRA 138).
The element of personal cultivation of the land, or with the aid of
his farm household, essential in establishing a landlord-tenant or a
lessor-lessee relationship, is absent in the relationship between Su
and Zamoras (Co vs. IAC, 162 SCRA 390; Graza vs. CA, 163
SCRA 39), for Zamoras did not cultivate any part of Su's plantation
either by himself or with the help of his household.
On the other hand, the following circumstances are indicative of an
employer-employee relationship between them:
1.
Zamoras was selected and hired by Su as overseer of the
coconut plantation.
2.

His duties were specified by Su.

3.
Su controlled and supervised the performance of his
duties. He determined to whom Zamoras should sell the copra
produced from the plantation.
4.
Su paid Zamoras a salary of P2,400 per month plus onethird of the copra sales every two months as compensation for
managing the plantation.
Since Zamoras was an employee, not a tenant of Su, it is the NLRC,
not the Court of Agrarian Relations, that has jurisdiction to try and
decide Zamora's complaint for illegal dismissal (Art. 217, Labor
Code; Manila Mandarin Employees Union vs. NLRC, 154 SCRA
368; Jacqueline Industries Dunhill Bags Industries, et al. vs. NLRC,
et al., 69 SCRA 242).
WHEREFORE, the assailed decision is reversed and a new one is
entered, declaring Zamoras to be an employee of respondent Roque
Su, Jr. and that his dismissal was illegal and without lawful cause.
He is entitled to reinstatement with backwages, but because he is
dead and may no longer be reinstated, the private respondents are
ordered to pay to his heirs the backwages due him, as well as his
share of the copra sales from the plantation for a period of three (3)
years from his illegal dismissal in September, 1981, plus separation
pay in lieu of reinstatement. Costs against the private respondents.
SO ORDERED.

32
5, G.R. No. 98028 January 27, 1992
GREGORIO CASTILLO, petitioner,
vs.
COURT OF APPEALS and ALBERTO IGNACIO, respondents.
Sumulong Law Offices for petitioner.
Bureau of Agrarian Legal Assistance for private respondent.

b)
lifting the preliminary injunction issued on September 18,
1985 and declaring the same legally inefficacious henceforth; and
c)
directing the plaintiff no pay unto the defendant the
amount of P10,000.00 as and for attorney's fees.
From the above decision, the private respondent appealed to the
Court of Appeals which reversed and set aside the decision of the
trial court. The respondent appellate court declared that there exists
a tenancy relationship between Alberto Ignacio and Gregorio
Castillo and permanently enjoined the latter from disturbing the
respondent's peaceful possession as tenant of said land.

GUTIERREZ, JR., J.:

Hence, the instant petition was filed, with the petitioner assigning
This is a petition for review of the Court of Appeals decision which the following errors as the issues raised to us:
reversed and set aside the decision of the Regional Trial Court in
Civil Case No. 8302-M and declared respondent Alberto Ignacio as I
agricultural tenant of the petitioner.
The Court of Appeals (Fourth Division) committed clear and patent
On July 18, 1985, a complaint for injunction was filed by private error in reversing the decision of the Regional Trial Court which is
respondent Alberto Ignacio against petitioner Gregorio Castillo with fully supported not only by substantial evidence but by
overwhelming evidence.
the Regional Trial Court of Malolos, Bulacan.
It is alleged in the complaint that the respondent is the agricultural II
tenant of the petitioner in the latter's parcel of land consisting of
9,920 square meters with fruit-bearing trees situated in Cut-cut, The Court of Appeals committed clear and reversible error and
Pulilan, Bulacan; that sometime in April 1985, the petitioner grave abuse of discretion in declaring that "the relationship between
requested the respondent to allow him to construct a resthouse in plaintiff-appellant and defendant-appellee over the mango land in
said land, and as a token of goodwill, the respondent agreed, which question as one of agricultural tenancy" despite the patent judicial
agreement is embodied in a "Kasunduan" (Exhibit "C") between admission of respondent Ignacio that he is merely a "magsisiga" of
them; that in violation of said agreement, the petitioner started to cut the mango land under litigation.
fruit-bearing trees on the land in question and filled with adobe
stones the area devoted by the private respondent to the planting of III
vegetables.
The Court of Appeals committed grave abuse of discretion in
The complaint asked for the issuance of a writ of preliminary permanently enjoining petitioner "from disturbing plaintiffinjunction to enjoin the petitioner from further cutting fruit-bearing appellant's peaceful possession as tenant of said land," although
trees and from committing further acts of dispossession against the private respondent is not in physical possession of the land,
respondent Ignacio being merely and admittedly a "magsisiga" of
private respondent. The injunction was granted.
the mango land in question.
The petitioner, on the other hand, contends that the private
respondent is not his agricultural tenant; that respondent Alberto IV
Ignacio is merely a "magsisiga" (smudger) of the landholding in
question; that he did not ask permission from the private respondent The Court of Appeals committed clear and patent error in not
to construct a rest house on subject land, since as owner thereof, he ordering the termination of any and all relationships between
had the right to do so; that he was merely exercising his right of petitioner and private respondent, the latter having failed to perform
ownership when he cut certain trees in the subject premises; that the work of "magsisiga" on the subject parcel of land and instead he
when the barangay captain failed to settle the conflict and the matter obstructs the driveway by scattering rubbish, dry leaves, dirt and
was referred to the MAR-BALA (Ministry of Agrarian Reform- other rubbish, preventing the petitioner from proceeding to the
Bureau of Agrarian Legal Assistance) Office in Malolos, Bulacan, premises of the land by putting up a barb wire fence which are acts
Atty. Benjamin Yambao of the MAR (Ministry of Agrarian Reform) of harrassment, disturbing the peaceful possession of petitioner and
prepared the "Kasunduan" attached to the respondent's complaint, which acts are inimical to the continuation of any kind of
but when he (petitioner) said that he had some misgivings about relationship between Gregorio Castillo and Alberto Ignacio.
some words therein, Atty. Yambao assured him that he need not
worry because the respondent could not be a "kasamang magsasaka" The issue to be resolved in the present petition is whether or not a
of his mango land because there is nothing to cultivate or till in said tenancy relationship exists between the parties.
land, but he still corrected the last part of par. 4 of said "Kasunduan"
by making it read "sa kanilang matiwasay na kaugnayan" before The Agricultural Tenancy Act defines "agricultural tenancy" as
signing the same.
. . . the physical possession by a person of a land devoted to
On September 28, 1988, the trial court rendered judgment declaring agriculture belonging to or legally possessed by, another for the
that no tenancy relationship exists between the petitioner and the purpose of production through the labor of the former and of the
private respondent. The dispositive portion of the decision reads as members of his immediate farm household, in consideration of
which the former agrees to share the harvest with the latter, or to
follows:
pay a price certain, either in produce or in money, or in both. (Sec.
WHEREFORE, premises considered, judgment is hereby rendered: 3, R.A. No. 1199; 50 O.G. 4655-56).
a)
dismissing the above-entitled case, with costs against the As held in the case of Qua v. Court of Appeals (198 SCRA 236
[1991]), the essential requisites of tenancy relationship are: (1) the
plaintiff;
parties are the landowner and the tenant; (2) the subject is
agricultural land; (3) the purpose is agricultural production; (4) there

33
is consideration which consist of sharing the harvest; (5) there is subject land. To add to that, the respondent farms the riceland of one
consent to the tenant to work on the land and (6) there is personal Dr. Luis Santos. It is thus evident that the working hours of the
cultivation by him.
respondent as a businessman and his other activities do not permit
him to undertake the work and obligations of a real tenant. This is
From the foregoing definition, the petitioner insists that for a person further supported by the undisputed fact that the respondent cannot
to claim tenancy relationship, he must be an occupant or must be in even personally perform the work of a smudger because on October
physical possession of the agricultural land. He alleges that, Alberto 22, 1986, the respondent hired some 20 people who are not
Ignacio, being a mere smudger (magsisiga) of the mango land, no members of his family to cut and burn the grass in the premises of
tenancy relationship can exist between them absent the element of the subject land.
physical possession.
Anent the element of consent, the petitioner contends that the best
In Gagola v. Court of Agrarian Relations (18 SCRA 992 [1966]), the evidence and imperishable proof of the relationship of the parties is
Court held that a tenant has possession of the land only through that shown in the complaint filed by private respondent with the
personal cultivation. Thus, in the instant case, the key factor in barangay captain Tomas Mercado that he is a mere "magsisiga" of
ascertaining the existence of a landowner-tenant relationship is the mango trees on the subject parcel of land. On the other hand, the
whether or not there is personal cultivation of the land by the private respondent appellate court said that the best proof of the existence
respondent.
of tenancy relationship is the "Kasunduan" (Exhibit "C") and that
under Section 7, Rule 130 of the Revised Rules of Court, 'when the
The trial court noted that:
subject of inquiry is the contents of a document, no evidence shall
be admissible other than the original document itself,' subject only
Let alone or notwithstanding the use of the phrase "kasamang to certain exceptions. Inasmuch as substantial evidence does not
magsasaka" in the Kasunduan (Exhibit C) relied upon by the only require the presence of a mere scintilla of evidence (Berenguer,
plaintiff, there is no dispute that the actual role ever played by the Jr. v. CA, 164 SCRA 433 [1988] citing Ang Tibay v. Court of
plaintiff vis-a-vis the land in litigation was that of a mere Industrial Relations, 69 Phil. 635 [1940]), we rule that there is no
"magsisiga" (smudger). Stated differently, plaintiff has never concrete evidence on record sufficient to establish that the element
performed on the property in question any of the acts of cultivation of consent is present. But even assuming arguendo that the element
contemplated by the law as essential to the creation of an of consent is present, we declared in De los Reyes v. Espineli (30
agricultural tenancy relationship. In fine, it is the sense of the Court SCRA 574 [1969]) that absent the element of personal cultivation,
that absent the important factor of cultivation, no tenancy one cannot be a tenant even if he is so designated in the written
relationship has ever existed between the plaintiff and the defendant agreement of the parties.
over the property involved in the instant case. At most and at best,
the contractual relationship between them was purely civil nature With respect to the requisite of sharing the harvests, the respondent
consisting solely of the seasonal engagement of plaintiff's services appellate court considered the receipt (Exhibit "E") signed by the
as "magsisiga" or "taga-suob."
petitioner's son Walderado Castillo as its evidence. On this point, the
petitioner has correctly argued that the receipt is inadmissible on the
On this matter, the appellate court disagreed and noted instead that ground that he did not participate in its execution.
personal cultivation by respondent Ignacio of petitioner land is
clearly spelled out or admitted in the "Kasunduan" (Exhibit "C") in The maxim "res inter alios acta altere nocere non debet," found in
view of the aforementioned provision therein that nobody except Section 28, Rule 130, Rules of Court applies, for as stated in Gevero
petitioner and the members of his family could enter said land v. Intermediate Appellant Court (189 SCRA 201 [1990]) the right of
without said petitioner's written permission.
a party cannot be prejudiced by an act, declaration, or omission of
another.
We agree with the trial court that the element of personal cultivation
is absent. The main thrust of the petitioner's argument is that the Also in pari materia is Caballes v. Department of Agrarian Reform
respondent Court of Appeals is mandated by law to affirm the (168 SCRA 247 [1988]), that the fact of sharing alone is not
decision of the Regional Trial Court, acting as an Agrarian Court, if sufficient to establish a tenancy relationship. Well-settled is the rule
the findings of fact in said decision are supported by substantial that all the requisites must concur in order to create a tenancy
evidence and the conclusions stated therein are not clearly against relationship between the parties and the absence of one or more
the law and jurisprudence. On the other hand, the private respondent requisites do not make the alleged tenant a de facto tenant as
contends that the findings of fact of the Court of Appeals are final contradistinguished from a de jure tenant. This is so because unless
and conclusive on the parties and on the Supreme Court.
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
After painstakingly going over the records of the petition, we find Program of the Government under existing tenancy laws. (Qua v.
no strong and cogent reason which justifies the appellate court's Court of Appeals, supra citing Tiongson v. Court of Appeals, 130
deviation from the findings and conclusions of the trial court. As SCRA 482 [1984]).
pointed out in Hernandez v. Intermediate Appellate Court (189
SCRA 758 [1990]), in agrarian cases, all that is required is mere However, with respect to the award of attorney's fees by the trial
substantial evidence. Hence, the agrarian court's findings of fact court, the award of P10,000.00 is unwarranted since the action
which went beyond the minimum evidentiary support demanded by appears to have been filed in good faith. There should be no penalty
law, that is supported by substantial evidence, are final and on the right to litigate. (Ilocos Norte Electric Company v. Court of
conclusive and cannot be reversed by the appellate tribunal.
Appeals, 179 SCRA 5 [1989] citing Espiritu v. Court of Appeals,
137 SCRA 50 [1985]).
Moreover, and as significantly held in Qua v. Court of Appeals
(supra), the fact that the source of livelihood of the private WHEREFORE, the petition is GRANTED. The decision of the
respondents is not derived from the lots they are allegedly tenanting respondent Court of Appeals is hereby REVERSED and SET
is indicative of non-agricultural tenancy relationship.
ASIDE and the decision of the Regional Trial Court is
REINSTATED with the MODIFICATION that the award of
Under the facts obtaining in the case, respondent Ignacio is a attorney's fees is DELETED.
businessman by occupation and this is his principal source of
income. He manufacturers hollow blocks. He also has a piggery and SO ORDERED.
poultry farm as well as a hardware store on the land adjoining the

34
6. G.R. No. 85041 August 5, 1993

and Bernas, the former cannot be expected to be bound by or to

honor the relationship or tie between Benigno and the latter
(Bernas).

GRACIANO BERNAS, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and NATIVIDAD Hence, this petition by Bernas.
BITO-ON DEITA, respondents.
The issue for resolution by the Court is concisely stated by the
Rodriguez Dadivas for petitioner.
respondent appellate court as follows: whether the agricultural
leasehold established by Benigno Bito-on in favor of Graciano
Orlanda Bigcas-Lumawag for private respondent.
Bernas is binding upon the owner of the land, Natividad Bito-on,
who disclaims any knowledge of, or participation in the same.

PADILLA, J.:

In ruling for the private respondent (Natividad), the respondent

appellate court held that:

Petitioner Graciano Bernas is before this Court assailing the Indeed, no evidence has been adduced to clarify the nature of the
decision * of the respondent appellate court dated 19 August 1988 in "dugo" transaction between plaintiff and her brother Benigno BitoCA G.R. SP No. 14359 (CAR), which reversed the decision ** of on. What seems apparent is that Benigno Bito-on was gratuitously
the Regional Trial Court of Roxas City, Branch 18, in Civil Case allowed to utilize the land to help him in financing the schooling of
No. V-5146 entitled "Natividad Bito-on Deita, et al. vs, Graciano his children. Whether the transaction is one of usufruct, which right
Bernas." As disclosed by the records and the evidence of both may be leased or alienated, or one of commodatum, which is purely
personal in character, the beneficiary has the obligation to return the
parties, the facts involved in the controversy are as follows:
property upon the expiration of the period stipulated, or
Natividad Bito-on Deita is the owner of Lots Nos. 794, 801, 840 and accomplishment of the purpose for, which it was constituted (Art.
848 of the Cadastral Survey of Panay, Capiz, with a total area of 612, Art. 1946, Civil Code). Accordingly, it is believed that one who
5,831 square meters. Out of liberality, Natividad entrusted the lots derives his right from the usufructuary/bailee, cannot refuse to
by way of "dugo" to her brother, Benigno Bito-on, so that he could return the property upon the expiration of the contract. In this case,
use the fruits thereof to defray the cost of financing his children's Benigno Bito-on returned the property lent to him on May 13, 1985
schooling in Manila. Prior to April 1978, these agricultural lots had to the owners, the plaintiff herein. We do not see how the defendant
been leased by one Anselmo Billones but following the latter's death can have a better right to the property than Benigno Bito-on, who
and consequent termination of the lease, petitioner Graciano Bernas admittedly possessed the land for a limited period. There is no
took over and worked on the land. Benigno and Bernas worked out privity of contract between the owner of the land and the cultivator.
a production-sharing arrangement whereby the first provided for all 1
the expenses and the second worked the land, and after harvest, the
two (2) deducted said expenses and divided the balance of the At this point, it is appropriate to point out that, contrary to the
harvest between the two of them. The owner, Natividad, played no appreciation of the respondent appellate court, the general law on
property and contracts, embodied in the Civil Code of the
part in this arrangement as she was not privy to the same.
Philippines, finds no principal application on the present conflict.
In 1985, the lots were returned by Benigno to his sister Natividad, Generalibus specialia derogant. The environmental facts of the case
as all his children had by then finished their schooling. When at bar indicate that this is not a mere case of recovery of ownership
Natividad, and her husband sought to take over possession of the or possession of property. Had this been so, then the Court would
lots, Bernas refused to relinquish, claiming that he was an have peremptorily dismissed the present petition. The fact, however,
agricultural leasehold lessee instituted on the land, by Benigno and, that cultivated agricultural land is involved suffices for the Court to
pause and review the legislation directly relevant and applicable at
as such, he is entitled to security of tenure under the law.
the time this controversy arose.
Faced with this opposition from Bernas, Natividad filed an action
with the Regional Trial Court for Recovery of Possession, In this regard, it would appear that Republic Act No. 1199, invoked
Ownership and Injunction with Damages. After trial, the court a quo by the trial court, had already been rendered inoperative by the
held in favor of the defendant (Bernas) and dismissed the complaint, passage of Republic Act No. 3844, as amended, otherwise known as
ruling that from the record and the evidence presented, notably the the Agricultural Land Reform Code (Code, for brevity). The former,
testimony of the plaintiff's own brother Benigno, Bernas was indeed also known as the Agricultural Tenancy Act of the Philippines and
a leasehold tenant under the provisions of Republic Act No. 1199 approved in August 1954 had sought to establish a system of
and an agricultural leasehold lessee under Republic Act No. 3844, agricultural tenancy relations between the tenant and the landholder,
having been so instituted by the usufructuary of the land (Benigno). defining two (2) systems of agricultural tenancy: the share and the
As such, according to the trial court, his tenurial rights cannot be leasehold tenancy. At this point, however, further discussion of the
foregoing would appear futile, for the Code, enacted in August,
disturbed save for causes provided by law.
1963, had expressly declared agricultural share tenancy to be
Aggrieved, the plaintiff (Natividad) appealed to the Court of contrary to public policy and abolished the same. As for leasehold
Appeals, contending that the "dugo" arrangement between her and tenancy relations entered into prior to the effectivity of the Code, the
her brother Benigno was not in the nature of a usufruct (as held by rights and obligations arising therefrom were deemed to continue to
the court a quo), but actually a contract of commodatum. This being exist until modified by the parties thereto in accordance with the
the case, Benigno, the bailee in the commodatum, could neither lend provisions of the Code. 2 Thus, for all intents and purposes,
nor lease the properties loaned, to a third person, as such Republic Act No. 3844 is the governing statute in the petition at bar.
relationship (of bailor-bailee) is one of personal character. This The pertinent provisions therefore state as follows:
time, her contentions were sustained, with the respondent appellate
court, reversing the trial court's decision, ruling that having only Sec. 5. Establishment of Agricultural Leasehold
derived his rights from the usufructuary/bailee, Bernas had no better Relations. The agricultural leasehold relation shall be established
right to the property than the latter who admittedly was entrusted by operation of law in accordance with Section four of this Code
with the property only for a limited period. Further, according to the and, in other, cases, either orally or in writing, expressly or
appellate court, there being no privity of contract between Natividad impliedly.

35
Sec. 6. Parties to Agricultural Leasehold Relation. The provisions of this Code unless his failure is caused by fortuitous
agricultural leasehold relation shall be limited to the person who event or force majeure:
furnishes the landholding, either as owner, civil law lessee,
usufructuary, or legal possessor, and the person who personally (3)
the agricultural lessee planted crops or used the
cultivates the same. (emphasis supplied).
landholding for a purpose other than what had been previously
agreed upon;
Sec. 7. Tenure of Agricultural Leasehold Relation. The
Agricultural Leasehold Relation once established shall confer upon (4)
the agricultural lessee failed to adopt proven farm
the agricultural lessee the right to continue working on the practices as determined under paragraph 3 of Section twenty-nine;
landholding until such leasehold relationship is extinguished. The
agricultural lessee shall be entitled to security of tenure on his (5)
the land or other substantial permanent improvement
landholding and cannot be ejected therefrom unless authorized bythereon is substantially damaged or destroyed or has unreasonably
the Court for causes herein provided. (emphasis supplied)
deteriorated through the fault or negligence of the agricultural
lessee;
Sec. 8. Extinguishment of Agricultural Leasehold
Relation. The agricultural leasehold relation established under (6)
the agricultural lessee does not pay the lease rental when
this Code shall be extinguished by:
it falls due: Provided, That if the nonpayment of the rental shall be
due to crop failure to the extent of seventy-five per centum as a
(1)
Abandonment of the landholding without the knowledge result of a fortuitous event, the non-payment shall not be a rental
of the agricultural lessor;
due that particular crop year, is not thereby extinguished; or
(2)
Voluntary surrender of the landholding by the agricultural (7)
the lessee employed a sub-lessee on his landholding in
lessee, written notice of which shall be served three months in violation of the terms of paragraph 2 of Section twenty seven.
advance; or
Sec. 37. Burden of Proof. The burden of proof to show the
(3)
Absence of the persons under Section nine to succeed to existence of a lawful cause for the ejectment of an agricultural
the lessee in the event of death of permanent incapacity of the lessee shall rest upon the agricultural lessor.
lessee.
There is no dispute, as it is admitted by the parties in this case, that
xxx
xxx
xxx
Benigno Bito-on was granted possession of the property in question
by reason of the liberality of his sister, Natividad (the private
Sec. 10. Agricultural Leasehold Relation Not Extinguished byrespondent). In short, he (Benigno) was the LEGAL POSSESSOR
Expiration of Period, etc. The agricultural leasehold relation of the property and, as such, he had the authority and capacity to
under this Code shall not be extinguished by mere expiration of the enter into an agricultural leasehold relation with Bernas.
term or period in a leasehold contract nor by the sale, alienation or Consequently, there is no need to dwell on the contentions of the
transfer of the legal possession of the landholding. In case the private respondent that, her brother Benigno was not a usufructuary
agricultural lessor sells, alienates or transfers the legal possession of of the property but actually a bailee in commodatum. Whatever was
the landholding, the purchaser or transferee thereof shall be the true nature of his designation, he (Benigno) was the LEGAL
subrogated to the rights and substituted to the obligations of the POSSESSOR of the property and the law expressly grants him, as
agricultural lessor.
legal possessor, authority and capacity to institute an agricultural
leasehold lessee on the property he legally possessed.
xxx
xxx
xxx
In turn, having been instituted by Benigno as an agricultural
Sec. 36. Possession
of
Landholding;
Exceptions.
leasehold lessee, Bernas is vested by law with the rights accruing
Notwithstanding any agreement as to the period or future surrender thereto, including the right to continue working the landholding
of the land, an agricultural lessee shall continue in the enjoyment until such lease is legally extinguished, and the right to be protected
and possession of his landholding except when his dispossession has in his tenure i. e., not to be ejected from the land, save for the causes
been authorized by the Court in a judgment that is final and provided by law, and as appropriately determined by the courts. In
executory if after due hearing it is shown that:
this connection, there is no clear indication in the record that the
circumstances or conditions envisioned in Section 36 of Republic
(1)
The agricultural lessor-owner or a member of his Act. No. 3844, as amended, for termination of the agricultural lease
immediate family will personally cultivate the landholding or will relation, have supervened, and therefore Bernas' right to the
convert the landholding, if suitably located, into residential, factory, possession of the property remains indisputable. This conclusion is
hospital or school site or other useful non-agricultural purposes: buttressed by Sec. 37 of the Code which provides that:
Provided, That the agricultural lessee shall, be entitled to
disturbance compensation equivalent to five years rental on his Sec. 37. Burden of Proof. The burden of proof to show the
landholding in addition to his rights under Sections twenty-five and existence of a lawful cause for the ejectment of an agricultural
thirty-four, except when the land owned and leased by the lessee shall rest upon the agricultural lessor.
agricultural lessor is not more than five hectares, in which case
instead of disturbance compensation the lessee may be entitled to an As to any suggestion that the agricultural lease of Bernas may have
advanced notice of at least one agricultural year before ejectment terminated because the landowner (Natividad) has decided to
proceedings are filed against him: Provided, further, That should the cultivate the land herself, we submit that this Court is not in a
landholder not cultivate the land himself for three years or fail to position to settle this issue in this case, not only because of
substantially carry out such conversion within one year after the insufficient evidence to determine whether or not, the grounds
dispossession of the tenant, it shall be presumed that he acted in bad provided by law for termination of the agricultural leasehold
faith and the tenant shall have the right to demand possession of the relation are present but, more importantly, because the issue of
land and recover damages for any loss incurred by him because of termination of the agricultural leasehold relationship by reason of
said dispossession; 3
the landowner's alleged decision to till the land herself, was not
squarely raised nor adequately litigated in the trial court. 4 It will be
(2)
the agricultural lessee failed to substantially comply with noted that while Natividad in her complaint with the court a quo
any of the terms and conditions of the contract or any of the alleged, among others, that "on 20 May 1985, the plaintiffs spouses

36
were already in the process of taking over the land by employing a tenure as an Agricultural Leasehold Lessee thereof; and plaintiffs to
tractor operator to commence plowing the land," this allegation was pay the costs of the suit.
denied by Bernas in his answer. But the main thrust of Natividad's
complaint was that she had no privity with Bernas and that the latter In the Court of Appeals, the litigated issue was
should vacate the land because Benigno (from whom Bernas had
received his right to possess) had himself ceased to have any rights xxx
xxx
xxx
to the land. Faced with these allegations, the court a quo in its pretrial order dated 9 September 1985 formulated the issues in this The legal issue that presents itself is whether the agricultural
case, without objection from the parties, as follows:
leasehold established by Benigno Bito-on was binding upon the
owner of the land, plaintiff Natividad Bito-on, who disclaims
ISSUES
knowledge of any arrangement with defendant Bernas. The lower
court held that the "dugo" arrangement was in the nature of
1.
Is defendant an agricultural leasehold lessee of the parcels usufruct, and that the act of the usufructuary as legal possessor was
of land described in the Complaint?
sufficient to establish tenancy relations.
2.
Whether the parties are entitled to damages claims byxxx
xxx
xxx 5
them in their respective pleadings.
The long settled rule in this jurisdiction is that a party is not allowed
In short, the parties went to trial on the merits on the basis of the to change his theory of the case or his cause of action on appeal. 6
foregoing issues. Private respondent did not object to the above We have previously held that "courts of justice have no jurisdiction
issues as formulated; neither can it be plausibly contended now that or power to decide question not in issue" 7 and that a judgment
the first issue (i.e. whether Bernas is an agricultural leasehold going outside the issues and purporting to adjudicate something
lessee) embraces the issue of whether Natividad has validly upon which the parties were not heard is not merely irregular, but
terminated the agricultural leasehold because of a decision to extrajudicial and invalid. 8 The rule is based on the fundamental
cultivate the land herself, since under sec. 36(1) of the Code (before tenets of fair play and, in the present case, the Court is properly
its amendment by Section 7 of Rep. Act No. 6389), the landowner's compelled not to go beyond the issue litigated in the court a quo and
right to take over possession of his land for personal cultivation in the Court of Appeals of whether or not the petitioner, Graciano
ASSUMES that it is under a valid and subsisting agricultural Bernas, is an agricultural leasehold lessee by virtue of his
leasehold and he must obtain an order from the court to dispossess installation as such by Benigno Bito-on, the legal possessor of the
the agricultural leasehold lessee who otherwise is entitled to landholding at the time Bernas was so installed and, consequently
continued use and possession of the landholding. In other words, if entitled to security of tenure on the land. Should grounds for the
Natividad had really intended to raise as an issue that she had dispossession of Bernas, as an agricultural leasehold lessee,
validly terminated Bernas' agricultural leasehold, she or her counsel subsequently arise, then and only then can the private respondent
could have expressly included among the issues for determination (land owner) initiate a separate action to dispossess the lessee, and
the question of whether or not she had complied with the in that separate action, she must allege and prove compliance with
requirements of the law for dispossessing the agricultural leasehold Sec. 36(1) of the Code which consist of, among others, a one year
lessee because she, as landowner, had decided to personally advance notice to the agricultural leasehold lessee (the land
cultivate the landholding. But she did not.
involved being less than 5 hectares) and readiness to pay him the
damages required also by the Code.
The trial court in its decision dated 20 October 1987 (latter appealed
to the Court of Appeals) held (consistent with the formulated issues The issue of whether or not Bernas planted crops or used the land in
in the case) that
a manner contrary to what was agreed upon between Natividad and
Benigno, and thereby constituting a ground for terminating the
xxx
xxx
xxx
leasehold relationship under Sec. 36, par. 3 of Rep. Act No. 3844
likewise cannot be passed upon by this Court since the issue was
As to issues, parties presented only two (2) issues and which are:
never raised before the courts below. Furthermore, there is no
showing that Natividad and Benigno agreed that only certain types
1.
Whether or not defendant is an agricultural leasehold of crops could be planted on the land. What is clear is, that the
lessee of the parcels of land described in the complaint;
"dugo" arrangement was made so that Benigno could use the
produce of the land to provide for the schooling of his children. The
2.
Whether the parties are entitled to damages claimed by alleged conversion by Bernas of the land to riceland was made
them in their respective pleadings.
necessary for the land to produce more and thus meet the needs of
Benigno. It was consistent with the purpose of making the land
(Pre-Trial Order dated September 9, 1985, p. 41 records)
more productive that Benigno installed an agricultural lessee. It may
be recalled that when Natividad called on Benigno to testify as a
and finally disposed as follows:
witness, he stated that the produce of the land was given to him by
Bernas to defray the expenses of his children (p. 3, trial court
From the above discussions, this Court opines that defendant was a decision). The inevitable conclusion is therefore not that there was
share tenant on the parcels of land subject of the complaint, and an use of the land different from the purpose for which it was allegedly
agricultural leasehold lessee under the provisions of the Agricultural intended by Natividad and Benigno but rather that the installation of
Land Reform Code as amended by Presidential Decrees on the the agricultural lessee was made necessary so that the land could
matter.
produce more to better serve the needs of the beneficiary (Benigno).
No damages as damages were proved or established by evidence by Additionally, it can be stated that the agricultural leasehold
the defendant.
relationship in this case was created between Benigno as
agricultural lessor-legal possessor, on the one hand, and Bernas as
WHEREFORE, and in view of the above considerations, a decision agricultural leasehold lessee, on the other. The agricultural leasehold
is rendered dismissing plaintiffs complaint, and declaring defendant relationship was not between Natividad and Bernas. As Sec. 6 of the
as the agricultural leasehold lessee on Lot Nos. 794, 801, 840 and Code states:
848 of the Cadastral Survey of Panay, Capiz, with an area of 5,831
square meters, situated at Calitan, Panay, Capiz, with security of

37
Sec. 6. Parties to Agricultural Leasehold Relations. The court), had in fact become moot and academic (even before it was
agricultural leasehold relations shall be limited to the person who hypothetically raised). The issued had been resolved by legislation
furnishes the landholding, either as owner, civil law lessee, unmistakably against the landowner.
usufructuary, or legal possessor, and the person who personally
cultivates the same. (emphasis supplied)
It may of course he argued that "she (Natividad) did not authorize
her brother (Benigno) to install a tenant thereon." (TSN, 13
There was, as admitted by all, no privity or tie between Natividad February 1986, p. 6).
and Bernas. Therefore, even if Bernas had improperly used the lots
as ricelands, it was Benigno who could have objected thereto since Even if there was a lack of authorization (from Natividad) for
it was his (the legal possessor's) landholding that was being Benigno to install a tenant, it still follows, in our view, that Benigno
"improperly" used. But he (Benigno) did not. It is not for Natividad as legal possessor of the landholding, could install an agricultural
(as landowner) to now complain that Bernas used the land "for a lessee on the landholding. For, as defined in Section 166 (3) of the
purpose other than what had been previously agreed upon." Bernas Code, an agricultural lessor is a natural or juridical person who,
had no agreement with her as to the purpose for which the land was either as owner, civil law lessee, usufructuary or legal possessor lets
to be used. That they were converted into ricelands (also for or grants to another the cultivation and use of his land for a price
agricultural production) can only mean that the same (conversion) certain. Nothing in said section, it will be noted, requires that the
was approved by Benigno (the undisputed agricultural lessor-legal civil law lessee, usufructuary or legal possessor should have the
possessor). It is thus clear that sec. 36, par 3 of the Code cannot be prior authorization of the landowner in order to let or grant to
used to eject Bernas.
another the cultivation or use of the landholding.
The Court, must, in our view, keep in mind the policy of the State Another question comes up; did Natividad expressly prohibit
embodied in the fundamental law and in several special statutes, of Benigno from installing a tenant on the land? Nothing in the
promoting economic and social stability in the countryside byevidence shows that Benigno was expressly prohibited by Natividad
vesting the actual tillers and cultivators of the soil, with rights to the from installing a tenant on the landholding. And even if there was an
continued use and enjoyment of their landholdings until they are express prohibition on the part of Natividad (landowner) for
validly dispossessed in accordance with law. At this stage in the Benigno not to install an agricultural leasehold lessee, it is to be
country's land reform program, the agricultural lessee's right to noted that any such arrangement (prohibition) was solely between
security of tenure must be "firmed-up" and not negated by Natividad and Benigno. There is no evidence to show that Bernas
inferences from facts not clearly established in the record nor was aware or informed of any such arrangement between Natividad
litigated in the courts below. Hand in hand with diffusion of and Benigno. Neither was such arrangement (prohibition), if any,
ownership over agricultural lands, it is sound public policy to recorded in the registry of deeds to serve as notice to third persons
encourage and endorse a diffusion of agricultural land use in favor (as Bernas) and to the whole world for that matter. Consequently, if
of the actual tillers and cultivators of the soil. It is one effective way there was indeed such a prohibition (which is not borne out by the
in the development of a strong and independent middle-class in records) imposed by Natividad on Benigno, a violation thereof may
society.
give rise to a cause of action for Natividad against Benigno but
Bernas is no less an agricultural leasehold lessee, for the law
In confirmation we believe of the foregoing views, Section 36 of (Section 166 (2) of the Code) defines an agricultural lessee as a
Rep. Act No. 3844 (the Code) was expressly amended by Section 7 person who by himself and with the help available from within his
of Rep. Act No. 6389 which replaced paragraph 1, Section 36 of the immediate farm household cultivates the land belonging to or
Code providing for personal cultivation by the landowner as a possessed by another (in this case Benigno) with the latter's consent
ground for ejectment or dispossession of the agricultural leasehold for purposes of production for a price certain in money or in
lessee with the following provision:
produce or both.
Sec. 7. Section 36 (1) of the same Code is hereby amended to read Ponce vs. Guevarra, L-19629 and L-19672-92, 31 March 1954 (10
as follows:
SCRA 649) provides dramatic support to the security of tenure of
Bernas in the case at bar. In the Ponce case, the owner (Ponce) had
(1)
The landholding is declared by the department head upon leased his agricultural land to Donato (the lessee) for a stipulated
recommendation of the National Planning Commission to be suited period with a provision in the lease contract prohibiting Donato
for residential, commercial, industrial or some other urban purposes: from sub-leasing the land without the written consent of the owner
Provided, That the agricultural lessee shall be entitled to disturbance (Ponce). Notwithstanding these "express prohibition", Donato subcompensation equivalent to five times the average of the gross leased the land without the consent of Ponce (the owner). When the
harvest of his landholding during the last five preceding calendar lease contract expired, Donato returned the land to Ponce but the
years;
sub-lessees (tenants) refused to vacate, claiming security of' tenure
under the tenancy laws then enforced. One of the contentions of
While it is true that in the case of Ancheta vs. Court of Appeals, 200 Ponce (the owner) in seeking to dispossess the sub-lessees (tenants)
SCRA 407, the Court, stated that:
was that these tenants entered into possession of the land under a
violation of the lease contract by Donato (the lessee).
It is well settled that RA 6389, which removed personal cultivation
as a ground for ejectment of tenant/lessee, cannot be given Over-ruling the above contention, this Court held:
retroactive effect in the absence of statutory provision for
retroactivity or a clear implication of the law to that effect.
It is true that the subleasing of said land to respondents herein
(tenants) without the written consent of the petitioner (owner),
however, Rep. Act No. 6389 was approved on 10 September 1971. 9 constituted a violation of the original contract of lease. The breach
The complaint in this case was filed on 21 June 1985 or long after of contract was committed, however, by Donato (the lessee), . . . .
the approval of Rep. Act No. 6389. By reason of the provision
therein eliminating personal cultivation by the landowner as a Of course, in the same Ponce case, the Court observed that Ponce
ground for ejectment or dispossession of the agricultural leasehold renewed his lease contract for another year with Donato, knowing at
lessee, any issue of whether or not the Court of Appeals decision the time of such renewal that the land had been sub-leased to the
should nonetheless be affirmed because the landowner had shown tenants, thereby injecting the principle of estoppel against Ponce
her intention or decided to personally cultivate the land (assuming vis-a-vis the tenants. But, as we view it, the ratio decidendi in the
without admitting that the issue was properly raised before the trial Court's decision is to the effect that the sub-lessees (tenants) were

38
entitled to security of tenure on the land they were cultivating, while Section 10 of the Code provides:
notwithstanding the undisputed fact that they became sub-lessees
(tenants) of the land as a result of a violation by the lessee (Donato) Sec. 10. Agricultural Leasehold Relation Not Extinguished by
of an express provision in the lease contract prohibiting him from Expiration of Period, etc. The agricultural leasehold relation
sub-leasing the land.
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
What more in the case of Bernas whose right to security of tenure as transfer of the legal possession of the landholding. In case the
an agricultural leasehold lessee is conferred and protected agricultural lessor. sells, alienates or transfers the legal possession of
categorically, positively and clearly by the provisions of the Code the landholding, the purchaser or transferee thereof shall be
(Republic Act. 3844)?
subrogated to the rights and substituted to the obligations of the
agricultural lessor. (emphasis supplied).
It is of course possible to construe Sec. 6 of the Code which
provides:
and Section 36 of the Code provides:
SEC 6. Parties to Agricultural Leasehold Relations. The Possession of Landholding; Exceptions. Notwithstanding any
agricultural leasehold relation shall be limited to the person who agreement as to the period or future surrender of the land, an
furnishes the landholding, either as owner, civil law lessee, agricultural lessee shall continue in the enjoyment and possession of
usufructuary, or legal possessor, and the person who personally his landholding
cultivates the same. (emphasis supplied).
. . . . (emphasis supplied)
in the following manner:

Clearly the return of legal possession from Benigno to Natividad

cannot prejudice the rights of Bernas as an agricultural leasehold
. . . it assumes that there is already an existing agricultural leasehold lessee. The grounds for ejectment of an agricultural leasehold lessee
relation, i.e. a tenant or agricultural lessee already works the land. are provided for by law. The enumeration is exclusive and no other
As may be gleaned from the epigraph of Sec. 6, it merely states who grounds can justify termination of the lease. The policy and letter of
are "Parties to Agricultural Leasehold Relations," which means that the law are clear on this point. The relatively small area of the
there is already a leasehold tenant on the land. But this is precisely agricultural landholding involved (a little over half a hectare) would
what We are still asked to determine in these proceedings. appear, in our view, to be of no consequence in this case. Here, the
(dissenting opinion, p. 11.)
issue is not how much area may be retained in ownership by the
land owner Natividad but the issue is whether Bernas is a duly
It would appear from the above interpretation of Sec. 6 of the Code constituted agricultural leasehold lessee of the agricultural
that in the absence of a judicial determination or declaration of an landholding (regardless of its area) and entitled to security of tenure
agricultural leasehold relation, such relation does not or cannot even therein. And, as abundantly shown, the Code is definitely and
exist. We view this posture as incorrect for an agricultural leasehold clearly on his side of this issue.
relationship exists by operation of law when there is a concurrence
of an agricultural lessor and an agricultural lessee. As clearly stated It should be pointed out that the report and recommendation of the
in Section 5 of the code.
investigating officer of the Ministry of Agrarian Reform (MAR)
finding that Bernas is not an agricultural leasehold should deserve
Sec. 5. Establishment of Agricultural Leasehold Relations. The little consideration. It should be stressed, in this connection, that
agricultural leasehold relation shall be established by operation of said report and recommendation is congenitally defective because
law in accordance with Section four of this Code and, in other cases,
either orally or in writing, expressly or impliedly.
a.
it was based solely on the evidence presented by
In other words, in the case at bar, from the moment Benigno, as Natividad, Bernas did not participate in said investigation.
legal possessor (and, therefore, an agricultural lessor) granted this
cultivation and use of the landholding to Bernas in exchange or b.
the findings in the report are not supported by law or
consideration for a sharing in the harvest, an agricultural leasehold jurisprudence but are merely the opinion and conclusions of the
relationship emerged between them "by operation of law".
investigator whose knowledge of the Code and the case Law
appears to be sadly inadequate.
The fact that the transfer from Natividad to Benigno was gratuitous,
we believe, is of no consequence as far as the nature and status of c.
whether or not an agricultural leasehold relation exists in
Benigno's possession of the landholding is concerned. He became any case is basically a question of law and cannot be left to the
the legal possessor thereof from the viewpoint of the Code. And as determination or opinion of a MAR-investigator on the basis of onelegal possessor, he had the right and authority, also under the Code, sided evidence.
to install or institute an agricultural leasehold lessee on his
landholding, which was exactly what he did, i.e. install Bernas as an This Court has ruled in Qua v. Court of Appeals, 198 SCRA 236 that
agricultural leasehold lessee.

The argument that Benigno's (and consequently, Bernas') possession . . . as regards relations between litigants in land cases, the findings
was meant to last for a limited period only, may appeal to logic, but and conclusions of the Secretary of Agrarian Reform, being
it finds no support in the Code which has its own underlying public preliminary in nature, are not in any way binding on the trial courts
policy to promote. For Section 7 of the Code provides:
which must endeavor to arrive at their own independent
conclusions.
Sec. 7. Tenure of Agricultural Leasehold Relation. The
Agricultural Leasehold Relation once established shall confer upon The ruling finds support in the case of Graza v. CA (163 SCRA 39)
the agricultural lessee the right to continue working on the citing Section 12 of PD No. 946 expressly stating that "the
landholding until such leasehold relationship is extinguished. The preliminary determination of the relationship between the
agricultural lessee shall be entitled to security of tenure on his contending parties by the Secretary of Agrarian Reform or his
landholding and cannot be ejected therefrom unless authorized authorized representative, is not binding upon the court, judge or
herein-provided. (emphasis supplied)
hearing officer to whom the case is certified as a proper case for
trial. Said court, judge or hearing officer, after hearing, may

39
confirm, reverse or modify said preliminary determination as the
evidence and substantial merits of the case may warrant." The court Puno and Vitug, JJ. took no part.
a quo in the case at bar tried the case on the merits, receiving the
evidence of both parties and arrived at a conclusion different from
that of the MAR investigator. It is to be noted that even the Court of
Appeals (which decided for Natividad) found no use for the MAR
investigator's report and recommendation, for obvious reasons. It is
clear that the question of the existence of an agricultural leasehold
relationship is a question of law which is properly within the
province of the courts.
Separate Opinions
The certification of the President of the Agrarian Reform
Beneficiaries Association, Panay chapter "issued upon the request of
Mrs. Deita" (meaning Natividad) that Bernas is not in the masterlist
of tenants, should likewise be disregarded. Since when, it may be BELLOSILLO, J., dissenting:
noted, was the legal question of agricultural leasehold relationship
made to depend on a certification of such an association's president? This may be a faint echo in the wilderness but it is the quaint voice
of a woman yearning for justice from this court of last resort. The
The argument, that Bernas is not a lawful tenant of Natividad based majority opinion would leave her alone where she is, to wallow in
on the doctrine in the case of Lastimoza v. Blanco (1 SCRA 231) is her own misery, and despite her long and winding travails all for
also not correct. The cited case does not support the desired the love of a brother in need there is no light at the end of the
conclusion. In the Lastimoza case, a certain Nestor Panada had an tunnel. There is no relief in sight for her plight. Her only fault was
oral contract of tenancy with a certain Gallego who was then in to lend her four (4) small parcels of land to her brother so that the
possession of the parcel of land. The latter however was ejected latter could use the fruits thereof for the education of his children in
after the Court of First Instance ruled in a land registration Manila. Now, she cannot get them back because her brother allowed
proceeding that it was Lastimoza who was the true owner of the his brother-in-law, who now claims security of tenure as tenant, to
land. The Court in effect ruled that Gallego was an unlawful work the lands.
possessor and thus Panada cannot be a lawful tenant. The factual
background of the Lastimoza case and the present Bernas case are Worse, the brother-in-law continues to cultivate the landholdings,
totally different; the first case cannot be applied to the second. even converting the orchards into ricelands as though they were his
When Bernas was instituted by Benigno as an agricultural lessee, own and constructing a house of a strong materials thereon, without
Benigno was a legal possessor of the landholding in question. No paying any rent!
one can dispute this.
Before seeking judicial relief, private respondent went to the
The dissenting opinion states that ". . . it is not correct to say that Ministry of Agrarian Reform (MAR) as required by law, 1 and
every legal possessor, be he a usufructuary, or a bailee, is authorized obtained a favorable finding that there was no tenancy relationship
as a matter of right to employ a tenant. His possession can be between her and her brother's brother-in-law. But the courts below
limited by agreement of the parties or by operation of law." (p. 13) disregarded this important piece of evidence which speaks
Even assuming arguendo that this is a correct legal statement, there eloquently of the merit of her cause. MAR certified that petitioner
is absolutely no showing that the possession of Benigno was limited was not a tenant of private respondent, hence, the case was proper
by his agreement with Natividad (as to prohibit him from instituting for trial.
a tenant) or by operation of law; and because there is a total failure
to disprove and even dispute that Benigno was a legal possessor at The finding of MAR was confirmed by the Agrarian Reform
the time Bernas was installed by him as an agricultural lessee, then Beneficiaries Association (ARBA) when its President certified after
Bernas validly became an agricultural leasehold lessee of the land an investigation that petitioner did not appear in the Master List of
and is protected by the law from ejectment except for causes tenant beneficiaries of the barangay. Even his older brother, the
specified therein.
barangay captain, after conducting his own investigation, refused to
certify that petitioner was a tenant of the holdings of private
Finally, in relation to the dissenting opinion, it may be wise to respondent.
repeat the statement of the Court in Jose D. Lina, Jr. vs. Isidro
Cario (G.R. No. 100127, 23 April 1993) thus
Is private respondent indeed bereft of any remedy in law to recover
possession of her landholdings she who did not employ
The Court believes that petitioner's argument cogent though it petitioner nor authorize anyone to employ him as tenant on her land;
may be as a social and economic comment is most appropriately she who is not even paid any rent by petitioner for the use of her
addressed, not to a court which must take the law as it is actually landholdings; she whose landholdings have been converted by
written, but rather to the legislative authority which can, if it wishes, petitioner from orchards to ricelands and on which he constructed a
change the language and content of the law. (emphasis supplied)
house of strong materials, both without first securing authority from
her? Under the circumstances, we can only hope that posterity will
In the case at bar, the language, policy and intent of the law are not condemn us for the fate of private respondent and the many
clear; this Court cannot interpose its own views as to alter them. others who may be similarly situated.
That would be judicial legislation.
My conscience prompts me to dissent from the majority opinion and
WHEREFORE the petition is GRANTED. The decision of the to vote for the affirmance of the decision of the Court of Appeals,
respondent appellate court, is REVERSED and SET ASIDE and that not necessarily on the basis of its rationale, but mainly because I do
of the Regional Trial Court. REINSTATED. Costs against the not subscribe to the view that a usufructuary or legal possessor
private respondent.
under Sec. 6, R.A. 3844, as amended, is automatically authorized to
SO ORDERED.
Cruz, Bidin, Grio-Aquino, Regalado, Romero, Nocon and
Quiason, JJ., concur.

employ a tenant without the consent of the landowner. For, the right
to hire a tenant is basically a personal right of a landowner, except
as may be provided by law. But, certainly nowhere in Sec. 6 of R.A.

40
3844 does it say that a legal possessor of a landholding is assigned to the case, conducted his investigation and thereafter
automatically authorized to install a tenant thereon.
issued a resolution 5 sustaining the complaint of Natividad Bito-on
Dieta and concluding, among others that
Natividad Bito-on Deita owns Lots 794, 801, 840 and 848 of the
Cadastral Survey of Panay, Capiz. Lots 794 and 801, with areas of . . . out of petitioner's benevolence, generosity and pity of his elder
943 square meters (Exh. "C") and 855 square meters (Exh. "B"'), brother's financial hardship, she had the aforesaid lots entrusted to
respectively, are coconut Lands; Lot 840, with an area of 1,000 her brother in the nature of DUGO so that (the) latter then possessed
square meters (Exh. "D"), is planted to bananas, while Lot 848, with the land and enjoy(ed) the . . . fruits thereon for the above purpose
an area of 1,146 square meters (Exh. "A"), is riceland. Lot 840 was beginning the year 1978 up to the 2nd crop of 1985; that upon the
the owner's homelot on which stood before the family home. surrender or giving back in her favor of the land subject of 'DUGO'
Although the trial court found that the total area of the four (4) lots, there now appears the respondent claiming to be the tenant-tiller on
which are not contiguous, was 5,831 square meters, a closer the land who would not relinquish the land in her favor alleging and
examination of their tax declarations (Exhs. "A" to "D") reveals that contending to have been instituted by Monica Bernales who is her
their total productive area is only 3,844 square meters, which can be sister-in-law.
smaller than a residential lot in a plush village in Metro Manila.
xxx
xxx
xxx
After Natividad recovered these lots from a former tenant in April
1978, she entrusted them to her brother, Benigno Bito-on, so that the It is observed in this letter-petition (that) Filipino family adhered
latter may be able to support the education of his children in Manila. solidarity, sympathy and pity by extending financial help of (to) a
2 She did not authorize her brother to install a tenant thereon. 3 close relative by consanguinity. Apparently under the circumstance,
After successfully retrieving a landholding from a tenant at that the "DUGO" trustee for the benefit of his school children in Manila
time, no landowner in his right mind would give his land in tenancyis Benigno Bito-on
again to avoid the operation of P.D. 27, then at its peak and dreaded . . . . Petitioner feeling morally bound . . . made the institution of
by landowners as an unjust deprivation of property rights.
"DUGO" relationship among them in order to contributes a solution
thereof. But ultimately after the 2nd cropping of 1985 and after the
Thereafter, without the knowledge, much less consent, of Natividad, school children of Benigno Bito-on had graduated in college, he
Benigno entered into some arrangement with his brother-in-law, returned the property to petitioner as evidenced by Exh. "E".
Graciano Bernas, to work the lands. But Natividad was unaware of
this arrangement as she was staying in Manila where her husband Now comes to the surprise of petitioner, the respondent spring(s)
was then employed. It was not until the latter's retirement and the out and assert(s) his alleged right to tillage so as to prevent
return of the family to Panay, Capiz, that she learned that Graciano landowner to repossess the land subject of "DUGO" upon return
was already working the lands, converting Lots 794, 801 and 840 which is co-terminous with the period thereof.
into ricelands, and constructing on Lot 840 a house of concrete
hollow blocks.
On such core, no law or jurisprudence recognizes the right of
respondent. Be that as it may, as now happens, with Benigno BitoIt bears emphasizing that, the transfer of possession between on nor his wife Natividad (Monica) Bernas was legally authorized
Natividad and Benigno was not coupled with any consideration; to institute somebody to be tenant-tiller under the circumstance of
rather, it was pure magnanimity on the part of Natividad on account "DUGO" . . . so as to be entitled to invoke any right or privilege
of her "dugo" or blood relation with Benigno, which Atty. Herminio under our Agrarian Laws.
R. Pelobello, Trial Attorney II and MAR Investigating Officer,
explains
xxx
xxx
xxx
A "DUGO" system is a personal grant of privilege and a privilege IN VIEW OF THE FOREGOING CONSIDERATIONS, it is now
personally granted cannot be delegated or extended to someone else the honest opinion of the undersigned to recommend as it is hereby
but (is) personal (in) nature. Once the "DUGO" grantee or trustee recommended that the petitioner, Natividad Bito-on Deita, be
returns the subject matter of "DUGO", the relationship is terminated entitled to the possession, use and enjoyment of the lots subject of
. . . . In this instance, Exh. "E" is an expressive documentary 'DUGO' and further, that the respondent constructively and actually
evidence of return of "DUGO" property by constructive mode of delivers to her the same lots indicated in this resolution, upon
returning of possession, use and enjoyment of property; same receipt of copy hereof.
therefore deserves credence to the exclusion of any interested
person in tillage therein.
The foregoing resolution of the MAR Investigating Officer may not
be well crafted, but it is expressive of his finding that Graciano
On 13 May 1985, his children having finished schooling in Manila, Bernas was not a tenant-tiller and, consequently, it recommend that
Benigno returned possession of the property to Natividad, in faithful "the petitioner, Natividad Bito-on Deita, be entitled to the
compliance with their agreement. However, Graciano refused to possession, use and enjoyment of the lots subject of 'DUGO', and
vacate the premises claiming at first that he was installed thereon byfurther, that the respondent (Graciano Bernas) constructively and
Benigno, although after Benigno denied this allegation, petitioner actually delivers to her the same lots indicated in this
changed his theory by presenting Monica Bernales Bito-on, wife of resolution . . . ." concluding that "no law or jurisprudence
Benigno, to testify that she was the civil law lessee who installed recognizes the right of respondent."
Graciano on the lands. This, despite the crux of the evidence spread
on record that it was Benigno Bito-on who was given the physical While Natividad went through the normal legal procedure to obtain
possession of the lands by his sister Natividad, and not Monica who relief, Graciano refused to attend the formal investigation and
is only her sister-in-law. Incidentally, Monica is the sister of the hearing conducted by the MAR, much less heed its
wife of Graciano Bernas.
recommendation. If Graciano was a law-abiding citizen and
believed that the law was on his side, he should have submitted to
On 17 May 1985, fazed by the refusal of Graciano to vacate, the fact-finding investigation by an administrative agency pursuant
Natividad filed a letter-petition 4 with the Ministry of Agrarian to law.
Reform (MAR) seeking clarification of the actual status of Graciano
vis-a-vis her landholdings. Accordingly, Graciano was summoned at On 24 May 1985, a mediation conference between Natividad and
least three (3) times but the latter refused to attend the scheduled Graciano was held at the residence of Brgy. Captain Felipe Bernas,
hearings. Consequently, Atty. Herminio R. Pelobello, who was older brother of Graciano, but it also proved fruitless as Graciano

41
continued to refuse to vacate subject landholdings. To top it all, The resolution of this issue hinges on the proper interpretation of
Brgy. Captain Bernas sided with Graciano and refused to issue a Sec. 6 of R.A. 3844, as amended, otherwise known as "The
certification as required under P.D. 1508. If Graciano was indeed a Agricultural Land Reform Code," which provides:
tenant of the landholdings, his older brother could have easily issued
the required certification.
Sec. 6 Parties to Agricultural Leasehold Relations. The
agricultural leasehold relations shall be limited to the person who
Consequently, the certification had to be issued by Sulpicio Bering, furnishes the landholding, either as owner, civil law lessee,
ARBA President, Panay Chapter, 6 dated 27 May 1985, at Barangayusufructuary, or legal possessor, and the person who personally
Calitan, Panay, Capiz, which confirmed the factual findings of the cultivates the same.
MAR Investigating Officer
(emphasis ours).
This is to certify that undersigned in his capacity as President of Those who hold that Graciano is a leasehold tenant anchor their
Agrarian Reform Beneficiaries Association (ARBA), Panayproposition on the above provision of Sec. 6 as they find Benigno a
Chapter, had attended last May 24, 1985 the mediation "legal possessor" of the lands and so could legally install a tenant
confrontation among Mrs. Natividad Bito-on-Dieta and Mr.thereon.
Graciano Bernas accompanied by his wife Adela Bernales that took
place right at the residence of Brgy. Captain Felipe Bernas. That the I strongly disagree. When Sec. 6 provides that the agricultural
outcome of the conference was fruitless as the Barangay Captain leasehold relations shall be limited to the person who furnishes the
was siding with his younger brother Graciano Bernas, and he (Brgy. landholding, either as owner, civil law lessee, usufructuary, or legal
Captain) vehemently refused to issue any certification as required possessor, and the person who personally cultivates the same, it
under P.D. 1508.
assumes that there is an existing agricultural leasehold relation, i. e.,
a tenant or agricultural lessee already works the land. As may be
Hence undersigned as President of ARBA Panay Chapter herebygleaned from the epigraph of Section 6, it merely states who are
manifest and certify that Graciano Bernas is not among those whose "Parties to Agricultural Leasehold Relations," which means that
names are entered in our masterlist of tenants so as to suffice as a there is already a leasehold tenant on the land. But this is precisely
bona fide member of Agrarian Reform Beneficiaries Association in what we are still asked to determine in these proceedings.
Panay, Capiz. It is further stated that Mr. Graciano Bernas is not a
leasehold tenant of landowner Mrs. natividad Bito-on Dieta in To better understand Sec. 6, R.A. 3844, let us refer to its precursor,
Barangay Calitan, Panay, Capiz (emphasis supplied).
Sec. 8, R.A. 1199, as amended, which provides:
This certification is being issued to Mrs. Dieta in lieu of the refusal Sec. 8. Limitation of Relation. The relation of landholder and
on the part(s) of Brgy. Captain to issue such under the provision of tenant shall be limited to the person who furnishes land, either as
P.D. 1508.
owner, lessee, usufructuary, or legal possessor, and to the person
who actually works the land himself with the aid of labor available
On 21 June 1985, after all her efforts to recover through from within his immediate farm household.
administrative means failed, Natividad finally instituted an action in
the Regional Trial Court of Capiz. But, in deciding the case, the trial Again, Sec. 8 of R.A. 1199 assumes the existence of a tenancy
court completely disregarded the result of the administrative relation. But, as its epigraph states, it is a "Limitation of Relation,"
investigation conducted by Atty. Herminio R. Pelobello of the MAR and the purpose is merely to limit the tenancy "to the person who
(Exh. "6") and the Certification of the President of ARBA (Exh. furnishes land, either as owner, lessee, usufructuary, or legal
"E") and ruled in favor of Graciano, holding that the transaction possessor, and to the person who actually works the land himself
between Natividad and Benigno was in the nature of a usufruct so with the aid of labor available from within his immediate farm
that the latter was legally capacitated to install Graciano as an household." Otherwise stated, once the tenancy relation is
agricultural lessee whose tenurial right could not be disturbed established, the parties to that relation are limited to the persons
except for causes enumerated under Sec. 36 of R.A. 3844, as therein stated. But, obviously, inherent in their right to install a
amended, 7 and that Natividad failed to establish any of the causes tenant is their authority to do so; otherwise, without such authority,
for his termination.
they cannot install a tenant on the landholding. But, definitely,
neither Sec. 6 of R.A. 3844 nor Sec. 8 of R.A. 1199 automatically
Natividad elevated her cause to the Court of Appeals contending authorizes the persons named therein to employ a tenant on the
that the transaction between her and her brother Benigno was not in landholding.
the nature of usufruct but rather one of commodatum. As such,
Benigno, as bailee in commodatum, could neither lend nor lease the According to Santos and Macalino, considered authorities on the
property loaned to him to a third person since the relationship land reform, the reasons Sec. 6, R.A. 3844, and 8, R.A. 1199, in
between the bailor and bailee is personal in character. She also limiting the relationship to the lessee and the lessor is "to discourage
established with her evidence that Graciano converted without her absenteeism on the part of the lessor and the custom, of co-tenancy"
authority three (3) of her parcels of land, particularly those planted under which "the tenant (lessee) employs another to do the farm
to coconut and banana, to ricelands, which is a ground to terminate work for him, although it is he with whom the landholder (lessor)
a tenant, assuming that Graciano was.
deals directly. Thus, under this custom, the one who actually works
the land gets the short end of the bargain, for the nominal or
The contention of Natividad was sustained by the Court of Appeals, 'capitalist' lessee hugs for himself a major portion of the harvest." 9
which ordered the ejectment of Graciano. The Court of Appeals This custom has bred exploitation, discontent and confusion . . . .
ruled that having merely derived his right over the property from the The 'kasugpong,' 'kasapi,' or 'katulong' also works at the pleasure of
bailee, Graciano could have no better right than bailee Benigno who the nominal tenant." 10 When the new law, therefore, limited
possessed the landholdings only for a special purpose and for a tenancy relation to the landholder and the person who actually
limited period of time. The spring cannot rise higher than its source works the land himself with the aid of labor available from within
his immediate farm household, it eliminated the nominal tenant or
Hence, this petition for review on certiorari filed by Graciano middle man from the picture. 11
seeking reversal of the decision 8 of the Court of Appeals on the
issue of whether he is an agricultural lessee of the landholdings Another noted authority on land reform, Dean Jeremias U.
entitled to security of tenure.
Montemayor, 12 explains the reason for Sec. 8, R.A. 1199, the
precursor of Sec. 6, R.A. 3844:

42
cultivate it and Benigno only has to keep watch over it against stray
Since the law establishes a special relationship in tenancy with animals and protect his harvests. If we take away from this area of
important consequences, it properly pinpoints the persons to whom 1,000 square meters the homelot reserved for the owner, the
said relationship shall apply. The spirit of the law is to prevent both remaining portion for production cannot be more than 800 square
landholder absenteeism and tenant absenteeism. Thus, it would meters. It can be less, depending on the size of the homelot.
seem that the discretionary powers and important duties of the
landholder, like the choice of crop or seed, cannot be left to the will Before Graciano converted Lots 714, 801 and 840 into ricelands, the
or capacity of an agent or overseer, just as the cultivation of the land only riceland then was Lot 848, with an area of 1,146 square meters
cannot be entrusted by the tenant to some other people. Tenancy (Exh. "A"). This is too small for an economic family-size farm to
relationship has been held to be of a personal character (see Secs. 37 sustain Benigno and his family even if he works it himself.
and 44, R.A. 1199, as amended; emphasis supplied).
Considering the size of the landholdings, which have a total
To argue that simply because Benigno is considered a usufructuary productive area of only 3,844 square meters per their tax
or legal possessor, or a bailee in commodatum for that matter, he is declarations, there may not be enough produce to pay for the
automatically authorized to employ a tenant on the landholding is to educational expenses of his children if Benigno to hire another
beg the question. For, it is not correct to say that every legal person to cultivate the land and share the produce thereof. As a
possessor, be he a usufructuary or a bailee, is authorized as a matter matter of fact, to minimize expenses, the children of Benigno and
of right to employ a tenant. His possession can be limited by Monica stayed with Natividad while schooling in Manila.
agreement of the parties or by operation of law. In the case before
Us, it is obvious that the tenure of the legal possessor was Since lots 714, 801 and 840 are planted to coconut and banana trees,
understood to be only during the limited period when the children of they are classified as lands planted to permanent crops.
Benigno were still schooling in Manila.
Consequently, in order for a person to be considered a tenant of
these lands, he must have planted the crops himself before they
As already stated, Sec. 6 simply enumerates who are the parties to became fruit-bearing. But, in the case before us, the coconut and
an existing contract of agricultural tenancy, which presupposes that banana trees were already fruit-bearing at the time Graciano
a tenancy already exists. It does not state that those who furnish the commenced to work on the lands, hence, he cannot be considered a
landholding, i.e., either as owner, civil law lessee, usufructuary, or tenant of these lands.
legal possessor, are authomatically authorized to employ a tenant on
the landholding. The reason is obvious. The legal possession, may Consequently, the transfer of possession of the landholding from
be restrictive. Even the owner himself may not be free to install a Natividad to Benigno should be strictly viewed as one for the
tenant, as when his ownership or possession is encumbered or is cultivation alone of Benigno, himself a farm worker, who was not
subject to a lien or condition that he should not employ a tenant authorized by Natividad to employ a tenant. Benigno's possession
thereon. This contemplates a situation where the property may be was limited only to the enjoyment of the fruits thereof, subject to the
intended for some other specific purpose allowable by law, such as, will of landowner Natividad. Benigno was not empowered to install
its conversion into a subdivision.
a tenant. 14
In the case at bar, the transfer of possession was purely gratuitous. It Benigno therefore possessed the land as a mere possessor-cultivator.
was not made for any consideration except for the "dugo" or blood As such, he was required to personally till or cultivate the land and
relationship between Natividad and Benigno. Consequently, the use the produce thereof to defray the cost of education of his
generation of rights arising therefrom should be strictly construed in children. Natividad, who entrusted her landholdings to Benigno,
favor of Natividad. In fact, for lack of consideration, she may take was still the agricultural owner-cultivator, who is "any person who,
back the land at any time unless she allows a reasonable time for providing capital and management, personally cultivates his own
Benigno to harvest the produce of what he may have planted land with the aid of his immediate family and household." 15 It
thereon as a possessor in good faith. There is not even any valid must then be held that the cultivation of Benigno was also the
obligation on her part to keep Benigno in possession, except as cultivation of Natividad. Indeed, the fact that the lands were free of
herein adverted to, much less should she be deprived of such tenants when Natividad entrusted them to Benigno was indicative of
possession just because another person was employed by her brother her intention to maintain that condition of the landholdings and have
to work the land.
them tended personally by Benigno himself.
Under the doctrine laid down in Lastimoza v. Blanco, 13 Graciano Accordingly, neither Benigno nor Graciano can be a lessee-tenant
cannot be a lawful tenant of Natividad for the reason that Benigno, who enjoys security of tenure. Benigno could only be an encargado
after failing to return the landholding to Natividad, already became of his sister Natividad, merely enjoying the produce thereof for the
a deforciant, and a deforciant cannot install a lawful tenant who is intended beneficiaries, his children studying in Manila.
entitled to security of tenure. Incidentally, Benigno and Graciano
being brothers-in-law, their wives being sisters, and living in a small Our attention may be invited to settled jurisprudence that the
barangay, Graciano cannot profess ignorance of the very nature of existence of an agricultural leasehold relationship is not terminated
the possession of Benigno as well as the restrictions to his by changes of ownership in case of sale, or transfer of legal
possession.
possession as in lease. 16 But, again, this assumes that a tenancy has
already been established. In the instant case, no such relationship
It may be relevant to consider, for a better appreciation of the facts, was ever created between Natividad and Graciano, the former
the actual condition of the landholdings. As already adverted to, having simply given her land to Benigno without any authority to
Lots 794 and 801 are coconut lands with an area of 943 square install a tenant thereon, 17 and only for a limited duration as it was
meters (Exh. "C") and 855 square meters (Exh. "B"), respectively,coterminous with the schooling of Benigno's children in Manila.
or a total area of 1,798 square meters. With this meager area for the
two (2) coconut lands, there is indeed no reason to have them In a number of cases, this Court has sustained the preservation of an
tenanted. The coconut lands need not be cultivated when the agricultural leasehold relationship between landholder and tenant
coconut trees are already fruit-bearing. Benigno only had to ensure despite the change of ownership or transfer of legal possession from
that the fruits thereof were not stolen.
one person to another. But in all these cases, the facts legally
justified the preservation of such relationship. For example, in
Lot 840 has an area of 1,000 square meters (Exh. "D") and is Endaya v. Court of Appeals, 18 Salen v. Dinglasan, 19 Catorce v.
planted to bananas. Like the coconut lands, no tenant is needed to Court of Appeals, 20 and Co. v Court of Appeals, 21 the tenants

43
were found to have been instituted by the previous landowners or the parties. Such factual finding, unless found to be baseless, binds
owners in fee simple. Consequently, the change of ownership of the the court because the law gives exclusive authority to MAR to
land did not terminate the tenancy relationship already existing. In determine preliminary the issue of tenancy relationship between the
Novesteras v. Court of Appeals, 22 it was the present landowner contending parties before the court may assume jurisdiction over an
himself who instituted the agricultural leasehold relation. In Ponce agrarian dispute or controversy. 29
v. Guevarra, 23 although the civil law lessee was barred from
installing a tenant under the terms of the original contract of lease, Indeed, the Investigating Officer of MAR correctly found that no
the landowner nonetheless extended the lifetime of the lease. tenancy relation existed between Natividad and Graciano. 30 Such
Finally, in Joya v. Pareja, 24 the lessor-landowner negotiated for the factual finding by an administrative agency as the MAR is entitled
better terms with the tenant of the civil law lessee upon expiration to the greatest respect and is binding and conclusive upon this court,
of the lease.
except when it is patently arbitrary or capricious, or is not supported
by substantial evidence. 31 Regrettably, these vital informations
As may be gleaned from all these seven (7) cases, the landowner established in the trial court were simply ignored, to the great
himself had a hand in either installing the tenant, or confirming the prejudice of respondent Natividad who, under the majority opinion,
tenancy relation by extending it, or negotiating directly with the will find herself helplessly without a remedy and all because she
tenant for the better terms upon expiration of the civil lease. For, upheld the true Filipino tradition of family solidarity by providing
indeed, the right to install a tenant is a personal right that belongs to succor to a blood brother who needed assistance for the educational
the landowner, 25 except perhaps in civil lease when the lessee is advancement of his children.
authorized to sublease the leased premises unless expressly
prohibited by agreement of the parties. 26
It may be worth to emphasize that neither the decision of the Court
of Appeals nor the discussions in this case mention the unauthorized
Thus, the agricultural leasehold relations were preserved in these conversion by Graciano of Lots 794, 801 and 840 into ricelands,
cases because the "legal possessors: therein were clearly clothed thereby impairing the original nature and value of the lands. If for
with legal authority or capacity to install tenants. But even assuming this reason alone, assuming that he was lawfully installed as tenant,
that they were not so authorized as in the Ponce case where the civil Graciano's tenancy should be terminated under Sec. 36, par. (3), for
law lessee was expressly barred from installing a tenant under their planting crops or using the landholdings for a purpose other than for
contract of lease, the subsequent actions of the landowners in which they were dedicated.
extending the lifetime of the lease, or in negotiating for better terms
with the tenants, placed the landowners in estoppel from contesting While this may not have been expressly raised as an issue, it is
the agricultural leasehold relations. Consequently, the tenants in nevertheless related or incidental to the issues presented by the
those cases may be categorized as tenants de jure enjoying tenurial parties for which evidence was adduced in the trial court by private
security guaranteed by the Agricultural tenancy Law, 27 now by the respondent without objection from petitioner. We should not
Agricultural Land Reform Code, as amended. This is not the case disregard the evidence if only to arrive at a fair and just conclusion.
before us.
Some may have apprehensions that should Sec. 6 of R.A. 3844 be
In an attempt to bolster his theory that he was tenant of the construed as not to vest the legal possessor with automatic authority
landholding, Graciano presented no less than the wife of Benigno, to install tenants, it would in effect open the floodgates to their
Monica Bernales-Bito-on, who testified that she was the civil law ejectment on the mere pretext that the legal possessor was not so
lessee who installed Graciano as tenant. Interestingly, Monica is the authorized by the landowner. This is a more imagined than real. The
sister of Adela Bernales, wife of Graciano. But why should Monica landowner has the burden of proving that the legal possessor was
be the civil law lessee and not her husband Benigno who is the not authorized to install tenants and, more often than not, the legal
brother of landowner Natividad? It is highly improbable that instead possessor is so empowered. In civil law, lease, for the instance,
of Natividad constituting her brother Benigno as the possessor of where there is consideration, the general rule is that the lessee can
the lands, it was Monica who was entrusted with them. That is sublease the leased holding unless there is an express prohibition
contrary to common practice an experience. Even The trial court against subletting in the contract itself. 32 Thus, in order for the
itself found the version of Graciano incredible when it held that lessee to be barred from subletting, the contract of lease must
Benigno was the legal possessor in the concept of usufructuary. Yet, expressly stipulate to that effect." In this case, the transaction
it ignored this discrepancy which could have destroyed the between brother and sister was not for any material consideration
credibility of Graciano when in fact it could have totally negated nor was it intended to defeat any purpose of law. There is not even
or disregarded Graciano's assertion of tenancy derived from Monica any insinuation that Benigno was only being used by Natividad to
as civil law lessee. The conclusion is not farfetched that Benigno oust Graciano from the lands.
and Monica were just entrusted with the four (4) lots, three (3) of
which were orchards until their unauthorized conversion to In any event, should the majority still hold that Sec. 6 of R.A. 3844
ricelands by Graciano, so that the former could avail of the produce authorizes the persons therein enumerated to institute a tenant
thereof for the purpose already stated.
automatically, although I strongly disagree, it should at most be
made to apply only to transfers of legal possession where there is
Moreover, the claim of Graciano that he was the duly appointed material consideration, and not where such transfers are absolutely
tenant is belied by a certification issued by the President of the gratuitous or purely out of benevolence because of personal or
Agrarian Reform Beneficiaries Association (ARBA), Panayblood relationship. Unfortunately for Natividad, her benevolence
Chapter, stating that, as of 27 May 1985, Graciano Bernas was does not seem to evoke reciprocal benevolence from this Court.
neither enrolled in the Master List of tenant beneficiaries nor
registered as a leasehold tenant of Natividad in Barangay Calitan. 28 FOR ALL THE FOREGOING CONSIDERATIONS, I have to
If he was truly a tenant, he should been vigilant enough to protect dissent from the majority opinion and reiterate my vote to AFFIRM
his rights and thus have his name registered. After all, at that time, the judgment under review.
his older brother was the barangay captain of Calitan where the
property is situated.
Meanwhile, I can only hope that, in the end, the real meaning of
justice in this case is attained.
When Natividad invoked Sec. 2, P.D. 316, by referring her
ejectment case to the Ministry of Agrarian Reform for preliminary Feliciano, Davide, Jr. and Melo, JJ., concur.
determination, MAR accordingly certified that it was proper for
trial, an indication that there was no tenancy relationship between

44

# Separate Opinions

the owner's homelot on which stood before the family home.

Although the trial court found that the total area of the four (4) lots,
which are not contiguous, was 5,831 square meters, a closer
examination of their tax declarations (Exhs. "A" to "D") reveals that
their total productive area is only 3,844 square meters, which can be
smaller than a residential lot in a plush village in Metro Manila.

BELLOSILLO, J., dissenting:

After Natividad recovered these lots from a former tenant in April

1978, she entrusted them to her brother, Benigno Bito-on, so that the
This may be a faint echo in the wilderness but it is the quaint voice latter may be able to support the education of his children in Manila.
of a woman yearning for justice from this court of last resort. The 2 She did not authorize her brother to install a tenant thereon. 3
majority opinion would leave her alone where she is, to wallow in After successfully retrieving a landholding from a tenant at that
her own misery, and despite her long and winding travails all for time, no landowner in his right mind would give his land in tenancy
the love of a brother in need there is no light at the end of the again to avoid the operation of P.D. 27, then at its peak and dreaded
tunnel. There is no relief in sight for her plight. Her only fault was by landowners as an unjust deprivation of property rights.
to lend her four (4) small parcels of land to her brother so that the
latter could use the fruits thereof for the education of his children in Thereafter, without the knowledge, much less consent, of Natividad,
Manila. Now, she cannot get them back because her brother allowed Benigno entered into some arrangement with his brother-in-law,
his brother-in-law, who now claims security of tenure as tenant, to Graciano Bernas, to work the lands. But Natividad was unaware of
work the lands.
this arrangement as she was staying in Manila where her husband
was then employed. It was not until the latter's retirement and the
Worse, the brother-in-law continues to cultivate the landholdings, return of the family to Panay, Capiz, that she learned that Graciano
even converting the orchards into ricelands as though they were his was already working the lands, converting Lots 794, 801 and 840
own and constructing a house of a strong materials thereon, without into ricelands, and constructing on Lot 840 a house of concrete
paying any rent!
hollow blocks.
Before seeking judicial relief, private respondent went to the It bears emphasizing that, the transfer of possession between
Ministry of Agrarian Reform (MAR) as required by law, 1 and Natividad and Benigno was not coupled with any consideration;
obtained a favorable finding that there was no tenancy relationship rather, it was pure magnanimity on the part of Natividad on account
between her and her brother's brother-in-law. But the courts below of her "dugo" or blood relation with Benigno, which Atty. Herminio
disregarded this important piece of evidence which speaks R. Pelobello, Trial Attorney II and MAR Investigating Officer,
eloquently of the merit of her cause. MAR certified that petitioner explains
was not a tenant of private respondent, hence, the case was proper
for trial.
A "DUGO" system is a personal grant of privilege and a privilege
personally granted cannot be delegated or extended to someone else
The finding of MAR was confirmed by the Agrarian Reform but (is) personal (in) nature. Once the "DUGO" grantee or trustee
Beneficiaries Association (ARBA) when its President certified after returns the subject matter of "DUGO", the relationship is terminated
an investigation that petitioner did not appear in the Master List of . . . . In this instance, Exh. "E" is an expressive documentary
tenant beneficiaries of the barangay. Even his older brother, the evidence of return of "DUGO" property by constructive mode of
barangay captain, after conducting his own investigation, refused to returning of possession, use and enjoyment of property; same
certify that petitioner was a tenant of the holdings of private therefore deserves credence to the exclusion of any interested
respondent.
person in tillage therein.
Is private respondent indeed bereft of any remedy in law to recover On 13 May 1985, his children having finished schooling in Manila,
possession of her landholdings she who did not employBenigno returned possession of the property to Natividad, in faithful
petitioner nor authorize anyone to employ him as tenant on her land; compliance with their agreement. However, Graciano refused to
she who is not even paid any rent by petitioner for the use of her vacate the premises claiming at first that he was installed thereon by
landholdings; she whose landholdings have been converted by Benigno, although after Benigno denied this allegation, petitioner
petitioner from orchards to ricelands and on which he constructed a changed his theory by presenting Monica Bernales Bito-on, wife of
house of strong materials, both without first securing authority from Benigno, to testify that she was the civil law lessee who installed
her? Under the circumstances, we can only hope that posterity will Graciano on the lands. This, despite the crux of the evidence spread
not condemn us for the fate of private respondent and the many on record that it was Benigno Bito-on who was given the physical
others who may be similarly situated.
possession of the lands by his sister Natividad, and not Monica who
is only her sister-in-law. Incidentally, Monica is the sister of the
My conscience prompts me to dissent from the majority opinion and wife of Graciano Bernas.
to vote for the affirmance of the decision of the Court of Appeals,
not necessarily on the basis of its rationale, but mainly because I do On 17 May 1985, fazed by the refusal of Graciano to vacate,
not subscribe to the view that a usufructuary or legal possessor Natividad filed a letter-petition 4 with the Ministry of Agrarian
under Sec. 6, R.A. 3844, as amended, is automatically authorized to Reform (MAR) seeking clarification of the actual status of Graciano
employ a tenant without the consent of the landowner. For, the right vis-a-vis her landholdings. Accordingly, Graciano was summoned at
to hire a tenant is basically a personal right of a landowner, except least three (3) times but the latter refused to attend the scheduled
as may be provided by law. But, certainly nowhere in Sec. 6 of R.A. hearings. Consequently, Atty. Herminio R. Pelobello, who was
3844 does it say that a legal possessor of a landholding is assigned to the case, conducted his investigation and thereafter
automatically authorized to install a tenant thereon.
issued a resolution 5 sustaining the complaint of Natividad Bito-on
Dieta and concluding, among others that
Natividad Bito-on Deita owns Lots 794, 801, 840 and 848 of the
Cadastral Survey of Panay, Capiz. Lots 794 and 801, with areas of . . . out of petitioner's benevolence, generosity and pity of his elder
943 square meters (Exh. "C") and 855 square meters (Exh. "B"'), brother's financial hardship, she had the aforesaid lots entrusted to
respectively, are coconut Lands; Lot 840, with an area of 1,000 her brother in the nature of DUGO so that (the) latter then possessed
square meters (Exh. "D"), is planted to bananas, while Lot 848, with the land and enjoy(ed) the . . . fruits thereon for the above purpose
an area of 1,146 square meters (Exh. "A"), is riceland. Lot 840 was beginning the year 1978 up to the 2nd crop of 1985; that upon the

45
surrender or giving back in her favor of the land subject of 'DUGO' Calitan, Panay, Capiz, which confirmed the factual findings of the
there now appears the respondent claiming to be the tenant-tiller on MAR Investigating Officer
the land who would not relinquish the land in her favor alleging and
contending to have been instituted by Monica Bernales who is her This is to certify that undersigned in his capacity as President of
sister-in-law.
Agrarian Reform Beneficiaries Association (ARBA), Panay
Chapter, had attended last May 24, 1985 the mediation
xxx
xxx
xxx
confrontation among Mrs. Natividad Bito-on-Dieta and Mr.
Graciano Bernas accompanied by his wife Adela Bernales that took
It is observed in this letter-petition (that) Filipino family adhered place right at the residence of Brgy. Captain Felipe Bernas. That the
solidarity, sympathy and pity by extending financial help of (to) a outcome of the conference was fruitless as the Barangay Captain
close relative by consanguinity. Apparently under the circumstance, was siding with his younger brother Graciano Bernas, and he (Brgy.
the "DUGO" trustee for the benefit of his school children in Manila Captain) vehemently refused to issue any certification as required
is Benigno Bito-on
under P.D. 1508.
. . . . Petitioner feeling morally bound . . . made the institution of
"DUGO" relationship among them in order to contributes a solution Hence undersigned as President of ARBA Panay Chapter hereby
thereof. But ultimately after the 2nd cropping of 1985 and after the manifest and certify that Graciano Bernas is not among those whose
school children of Benigno Bito-on had graduated in college, he names are entered in our masterlist of tenants so as to suffice as a
returned the property to petitioner as evidenced by Exh. "E".
bona fide member of Agrarian Reform Beneficiaries Association in
Panay, Capiz. It is further stated that Mr. Graciano Bernas is not a
Now comes to the surprise of petitioner, the respondent spring(s) leasehold tenant of landowner Mrs. natividad Bito-on Dieta in
out and assert(s) his alleged right to tillage so as to prevent Barangay Calitan, Panay, Capiz (emphasis supplied).
landowner to repossess the land subject of "DUGO" upon return
which is co-terminous with the period thereof.
This certification is being issued to Mrs. Dieta in lieu of the refusal
on the part(s) of Brgy. Captain to issue such under the provision of
On such core, no law or jurisprudence recognizes the right of P.D. 1508.
respondent. Be that as it may, as now happens, with Benigno Bitoon nor his wife Natividad (Monica) Bernas was legally authorized On 21 June 1985, after all her efforts to recover through
to institute somebody to be tenant-tiller under the circumstance of administrative means failed, Natividad finally instituted an action in
"DUGO" . . . so as to be entitled to invoke any right or privilege the Regional Trial Court of Capiz. But, in deciding the case, the trial
under our Agrarian Laws.
court completely disregarded the result of the administrative
investigation conducted by Atty. Herminio R. Pelobello of the MAR
xxx
xxx
xxx
(Exh. "6") and the Certification of the President of ARBA (Exh.
"E") and ruled in favor of Graciano, holding that the transaction
IN VIEW OF THE FOREGOING CONSIDERATIONS, it is nowbetween Natividad and Benigno was in the nature of a usufruct so
the honest opinion of the undersigned to recommend as it is hereby that the latter was legally capacitated to install Graciano as an
recommended that the petitioner, Natividad Bito-on Deita, be agricultural lessee whose tenurial right could not be disturbed
entitled to the possession, use and enjoyment of the lots subject of except for causes enumerated under Sec. 36 of R.A. 3844, as
'DUGO' and further, that the respondent constructively and actually amended, 7 and that Natividad failed to establish any of the causes
delivers to her the same lots indicated in this resolution, upon for his termination.
receipt of copy hereof.
Natividad elevated her cause to the Court of Appeals contending
The foregoing resolution of the MAR Investigating Officer may not that the transaction between her and her brother Benigno was not in
be well crafted, but it is expressive of his finding that Graciano the nature of usufruct but rather one of commodatum. As such,
Bernas was not a tenant-tiller and, consequently, it recommend that Benigno, as bailee in commodatum, could neither lend nor lease the
"the petitioner, Natividad Bito-on Deita, be entitled to the property loaned to him to a third person since the relationship
possession, use and enjoyment of the lots subject of 'DUGO', and between the bailor and bailee is personal in character. She also
further, that the respondent (Graciano Bernas) constructively and established with her evidence that Graciano converted without her
actually delivers to her the same lots indicated in this authority three (3) of her parcels of land, particularly those planted
resolution . . . ." concluding that "no law or jurisprudence to coconut and banana, to ricelands, which is a ground to terminate
recognizes the right of respondent."
a tenant, assuming that Graciano was.
While Natividad went through the normal legal procedure to obtain The contention of Natividad was sustained by the Court of Appeals,
relief, Graciano refused to attend the formal investigation and which ordered the ejectment of Graciano. The Court of Appeals
hearing conducted by the MAR, much less heed its ruled that having merely derived his right over the property from the
recommendation. If Graciano was a law-abiding citizen and bailee, Graciano could have no better right than bailee Benigno who
believed that the law was on his side, he should have submitted to possessed the landholdings only for a special purpose and for a
the fact-finding investigation by an administrative agency pursuant limited period of time. The spring cannot rise higher than its source
to law.
Hence, this petition for review on certiorari filed by Graciano
On 24 May 1985, a mediation conference between Natividad and seeking reversal of the decision 8 of the Court of Appeals on the
Graciano was held at the residence of Brgy. Captain Felipe Bernas, issue of whether he is an agricultural lessee of the landholdings
older brother of Graciano, but it also proved fruitless as Graciano entitled to security of tenure.
continued to refuse to vacate subject landholdings. To top it all,
Brgy. Captain Bernas sided with Graciano and refused to issue a The resolution of this issue hinges on the proper interpretation of
certification as required under P.D. 1508. If Graciano was indeed a Sec. 6 of R.A. 3844, as amended, otherwise known as "The
tenant of the landholdings, his older brother could have easily issued Agricultural Land Reform Code," which provides:
the required certification.
Sec. 6 Parties to Agricultural Leasehold Relations. The
Consequently, the certification had to be issued by Sulpicio Bering, agricultural leasehold relations shall be limited to the person who
ARBA President, Panay Chapter, 6 dated 27 May 1985, at Barangayfurnishes the landholding, either as owner, civil law lessee,

46
usufructuary, or legal possessor, and the person who personally or capacity of an agent or overseer, just as the cultivation of the land
cultivates the same.
cannot be entrusted by the tenant to some other people. Tenancy
(emphasis ours).
relationship has been held to be of a personal character (see Secs. 37
and 44, R.A. 1199, as amended; emphasis supplied).
Those who hold that Graciano is a leasehold tenant anchor their
proposition on the above provision of Sec. 6 as they find Benigno a To argue that simply because Benigno is considered a usufructuary
"legal possessor" of the lands and so could legally install a tenant or legal possessor, or a bailee in commodatum for that matter, he is
thereon.
automatically authorized to employ a tenant on the landholding is to
beg the question. For, it is not correct to say that every legal
I strongly disagree. When Sec. 6 provides that the agricultural possessor, be he a usufructuary or a bailee, is authorized as a matter
leasehold relations shall be limited to the person who furnishes the of right to employ a tenant. His possession can be limited by
landholding, either as owner, civil law lessee, usufructuary, or legal agreement of the parties or by operation of law. In the case before
possessor, and the person who personally cultivates the same, it Us, it is obvious that the tenure of the legal possessor was
assumes that there is an existing agricultural leasehold relation, i. e., understood to be only during the limited period when the children of
a tenant or agricultural lessee already works the land. As may be Benigno were still schooling in Manila.
gleaned from the epigraph of Section 6, it merely states who are
"Parties to Agricultural Leasehold Relations," which means that As already stated, Sec. 6 simply enumerates who are the parties to
there is already a leasehold tenant on the land. But this is precisely an existing contract of agricultural tenancy, which presupposes that
what we are still asked to determine in these proceedings.
a tenancy already exists. It does not state that those who furnish the
landholding, i.e., either as owner, civil law lessee, usufructuary, or
To better understand Sec. 6, R.A. 3844, let us refer to its precursor, legal possessor, are authomatically authorized to employ a tenant on
Sec. 8, R.A. 1199, as amended, which provides:
the landholding. The reason is obvious. The legal possession, may
be restrictive. Even the owner himself may not be free to install a
Sec. 8. Limitation of Relation. The relation of landholder and tenant, as when his ownership or possession is encumbered or is
tenant shall be limited to the person who furnishes land, either as subject to a lien or condition that he should not employ a tenant
owner, lessee, usufructuary, or legal possessor, and to the person thereon. This contemplates a situation where the property may be
who actually works the land himself with the aid of labor available intended for some other specific purpose allowable by law, such as,
from within his immediate farm household.
its conversion into a subdivision.
Again, Sec. 8 of R.A. 1199 assumes the existence of a tenancy In the case at bar, the transfer of possession was purely gratuitous. It
relation. But, as its epigraph states, it is a "Limitation of Relation," was not made for any consideration except for the "dugo" or blood
and the purpose is merely to limit the tenancy "to the person who relationship between Natividad and Benigno. Consequently, the
furnishes land, either as owner, lessee, usufructuary, or legal generation of rights arising therefrom should be strictly construed in
possessor, and to the person who actually works the land himself favor of Natividad. In fact, for lack of consideration, she may take
with the aid of labor available from within his immediate farm back the land at any time unless she allows a reasonable time for
household." Otherwise stated, once the tenancy relation is Benigno to harvest the produce of what he may have planted
established, the parties to that relation are limited to the persons thereon as a possessor in good faith. There is not even any valid
therein stated. But, obviously, inherent in their right to install a obligation on her part to keep Benigno in possession, except as
tenant is their authority to do so; otherwise, without such authority, herein adverted to, much less should she be deprived of such
they cannot install a tenant on the landholding. But, definitely,possession just because another person was employed by her brother
neither Sec. 6 of R.A. 3844 nor Sec. 8 of R.A. 1199 automatically to work the land.
authorizes the persons named therein to employ a tenant on the
landholding.
Under the doctrine laid down in Lastimoza v. Blanco, 13 Graciano
cannot be a lawful tenant of Natividad for the reason that Benigno,
According to Santos and Macalino, considered authorities on the after failing to return the landholding to Natividad, already became
land reform, the reasons Sec. 6, R.A. 3844, and 8, R.A. 1199, in a deforciant, and a deforciant cannot install a lawful tenant who is
limiting the relationship to the lessee and the lessor is "to discourage entitled to security of tenure. Incidentally, Benigno and Graciano
absenteeism on the part of the lessor and the custom, of co-tenancy" being brothers-in-law, their wives being sisters, and living in a small
under which "the tenant (lessee) employs another to do the farm barangay, Graciano cannot profess ignorance of the very nature of
work for him, although it is he with whom the landholder (lessor) the possession of Benigno as well as the restrictions to his
deals directly. Thus, under this custom, the one who actually works possession.
the land gets the short end of the bargain, for the nominal or
'capitalist' lessee hugs for himself a major portion of the harvest." 9 It may be relevant to consider, for a better appreciation of the facts,
This custom has bred exploitation, discontent and confusion . . . . the actual condition of the landholdings. As already adverted to,
The 'kasugpong,' 'kasapi,' or 'katulong' also works at the pleasure of Lots 794 and 801 are coconut lands with an area of 943 square
the nominal tenant." 10 When the new law, therefore, limited meters (Exh. "C") and 855 square meters (Exh. "B"), respectively,
tenancy relation to the landholder and the person who actually or a total area of 1,798 square meters. With this meager area for the
works the land himself with the aid of labor available from within two (2) coconut lands, there is indeed no reason to have them
his immediate farm household, it eliminated the nominal tenant or tenanted. The coconut lands need not be cultivated when the
middle man from the picture. 11
coconut trees are already fruit-bearing. Benigno only had to ensure
that the fruits thereof were not stolen.
Another noted authority on land reform, Dean Jeremias U.
Montemayor, 12 explains the reason for Sec. 8, R.A. 1199, theLot 840 has an area of 1,000 square meters (Exh. "D") and is
precursor of Sec. 6, R.A. 3844:
planted to bananas. Like the coconut lands, no tenant is needed to
cultivate it and Benigno only has to keep watch over it against stray
Since the law establishes a special relationship in tenancy with animals and protect his harvests. If we take away from this area of
important consequences, it properly pinpoints the persons to whom 1,000 square meters the homelot reserved for the owner, the
said relationship shall apply. The spirit of the law is to prevent both remaining portion for production cannot be more than 800 square
landholder absenteeism and tenant absenteeism. Thus, it would meters. It can be less, depending on the size of the homelot.
seem that the discretionary powers and important duties of the
landholder, like the choice of crop or seed, cannot be left to the will

47
Before Graciano converted Lots 714, 801 and 840 into ricelands, the installing a tenant under the terms of the original contract of lease,
only riceland then was Lot 848, with an area of 1,146 square meters the landowner nonetheless extended the lifetime of the lease.
(Exh. "A"). This is too small for an economic family-size farm to Finally, in Joya v. Pareja, 24 the lessor-landowner negotiated for the
sustain Benigno and his family even if he works it himself.
better terms with the tenant of the civil law lessee upon expiration
of the lease.
Considering the size of the landholdings, which have a total
productive area of only 3,844 square meters per their tax As may be gleaned from all these seven (7) cases, the landowner
declarations, there may not be enough produce to pay for the himself had a hand in either installing the tenant, or confirming the
educational expenses of his children if Benigno to hire another tenancy relation by extending it, or negotiating directly with the
person to cultivate the land and share the produce thereof. As a tenant for the better terms upon expiration of the civil lease. For,
matter of fact, to minimize expenses, the children of Benigno and indeed, the right to install a tenant is a personal right that belongs to
Monica stayed with Natividad while schooling in Manila.
the landowner, 25 except perhaps in civil lease when the lessee is
authorized to sublease the leased premises unless expressly
Since lots 714, 801 and 840 are planted to coconut and banana trees, prohibited by agreement of the parties. 26
they are classified as lands planted to permanent crops.
Consequently, in order for a person to be considered a tenant of Thus, the agricultural leasehold relations were preserved in these
these lands, he must have planted the crops himself before they cases because the "legal possessors: therein were clearly clothed
became fruit-bearing. But, in the case before us, the coconut and with legal authority or capacity to install tenants. But even assuming
banana trees were already fruit-bearing at the time Graciano that they were not so authorized as in the Ponce case where the civil
commenced to work on the lands, hence, he cannot be considered a law lessee was expressly barred from installing a tenant under their
tenant of these lands.
contract of lease, the subsequent actions of the landowners in
extending the lifetime of the lease, or in negotiating for better terms
Consequently, the transfer of possession of the landholding from with the tenants, placed the landowners in estoppel from contesting
Natividad to Benigno should be strictly viewed as one for the the agricultural leasehold relations. Consequently, the tenants in
cultivation alone of Benigno, himself a farm worker, who was not those cases may be categorized as tenants de jure enjoying tenurial
authorized by Natividad to employ a tenant. Benigno's possession security guaranteed by the Agricultural tenancy Law, 27 now by the
was limited only to the enjoyment of the fruits thereof, subject to the Agricultural Land Reform Code, as amended. This is not the case
will of landowner Natividad. Benigno was not empowered to install before us.
a tenant. 14
In an attempt to bolster his theory that he was tenant of the
Benigno therefore possessed the land as a mere possessor-cultivator.landholding, Graciano presented no less than the wife of Benigno,
As such, he was required to personally till or cultivate the land and Monica Bernales-Bito-on, who testified that she was the civil law
use the produce thereof to defray the cost of education of his lessee who installed Graciano as tenant. Interestingly, Monica is the
children. Natividad, who entrusted her landholdings to Benigno, sister of Adela Bernales, wife of Graciano. But why should Monica
was still the agricultural owner-cultivator, who is "any person who, be the civil law lessee and not her husband Benigno who is the
providing capital and management, personally cultivates his own brother of landowner Natividad? It is highly improbable that instead
land with the aid of his immediate family and household." 15 It of Natividad constituting her brother Benigno as the possessor of
must then be held that the cultivation of Benigno was also the the lands, it was Monica who was entrusted with them. That is
cultivation of Natividad. Indeed, the fact that the lands were free of contrary to common practice an experience. Even The trial court
tenants when Natividad entrusted them to Benigno was indicative of itself found the version of Graciano incredible when it held that
her intention to maintain that condition of the landholdings and have Benigno was the legal possessor in the concept of usufructuary. Yet,
them tended personally by Benigno himself.
it ignored this discrepancy which could have destroyed the
credibility of Graciano when in fact it could have totally negated
Accordingly, neither Benigno nor Graciano can be a lessee-tenant or disregarded Graciano's assertion of tenancy derived from Monica
who enjoys security of tenure. Benigno could only be an encargado as civil law lessee. The conclusion is not farfetched that Benigno
of his sister Natividad, merely enjoying the produce thereof for the and Monica were just entrusted with the four (4) lots, three (3) of
intended beneficiaries, his children studying in Manila.
which were orchards until their unauthorized conversion to
ricelands by Graciano, so that the former could avail of the produce
Our attention may be invited to settled jurisprudence that the thereof for the purpose already stated.
existence of an agricultural leasehold relationship is not terminated
by changes of ownership in case of sale, or transfer of legal Moreover, the claim of Graciano that he was the duly appointed
possession as in lease. 16 But, again, this assumes that a tenancy has tenant is belied by a certification issued by the President of the
already been established. In the instant case, no such relationship Agrarian Reform Beneficiaries Association (ARBA), Panay
was ever created between Natividad and Graciano, the former Chapter, stating that, as of 27 May 1985, Graciano Bernas was
having simply given her land to Benigno without any authority to neither enrolled in the Master List of tenant beneficiaries nor
install a tenant thereon, 17 and only for a limited duration as it was registered as a leasehold tenant of Natividad in Barangay Calitan. 28
coterminous with the schooling of Benigno's children in Manila.
If he was truly a tenant, he should been vigilant enough to protect
his rights and thus have his name registered. After all, at that time,
In a number of cases, this Court has sustained the preservation of an his older brother was the barangay captain of Calitan where the
agricultural leasehold relationship between landholder and tenant property is situated.
despite the change of ownership or transfer of legal possession from
one person to another. But in all these cases, the facts legally When Natividad invoked Sec. 2, P.D. 316, by referring her
justified the preservation of such relationship. For example, in ejectment case to the Ministry of Agrarian Reform for preliminary
Endaya v. Court of Appeals, 18 Salen v. Dinglasan, 19 Catorce v. determination, MAR accordingly certified that it was proper for
Court of Appeals, 20 and Co. v Court of Appeals, 21 the tenants trial, an indication that there was no tenancy relationship between
were found to have been instituted by the previous landowners or the parties. Such factual finding, unless found to be baseless, binds
owners in fee simple. Consequently, the change of ownership of the the court because the law gives exclusive authority to MAR to
land did not terminate the tenancy relationship already existing. In determine preliminary the issue of tenancy relationship between the
Novesteras v. Court of Appeals, 22 it was the present landowner contending parties before the court may assume jurisdiction over an
himself who instituted the agricultural leasehold relation. In Ponce agrarian dispute or controversy. 29
v. Guevarra, 23 although the civil law lessee was barred from

48
Indeed, the Investigating Officer of MAR correctly found that no
tenancy relation existed between Natividad and Graciano. 30 Such
factual finding by an administrative agency as the MAR is entitled
to the greatest respect and is binding and conclusive upon this court,
except when it is patently arbitrary or capricious, or is not supported
by substantial evidence. 31 Regrettably, these vital informations
established in the trial court were simply ignored, to the great
prejudice of respondent Natividad who, under the majority opinion,
will find herself helplessly without a remedy and all because she
upheld the true Filipino tradition of family solidarity by providing
succor to a blood brother who needed assistance for the educational
advancement of his children.
It may be worth to emphasize that neither the decision of the Court
of Appeals nor the discussions in this case mention the unauthorized
conversion by Graciano of Lots 794, 801 and 840 into ricelands,
thereby impairing the original nature and value of the lands. If for
this reason alone, assuming that he was lawfully installed as tenant,
Graciano's tenancy should be terminated under Sec. 36, par. (3), for
planting crops or using the landholdings for a purpose other than for
which they were dedicated.
While this may not have been expressly raised as an issue, it is
nevertheless related or incidental to the issues presented by the
parties for which evidence was adduced in the trial court by private
respondent without objection from petitioner. We should not
disregard the evidence if only to arrive at a fair and just conclusion.
Some may have apprehensions that should Sec. 6 of R.A. 3844 be
construed as not to vest the legal possessor with automatic authority
to install tenants, it would in effect open the floodgates to their
ejectment on the mere pretext that the legal possessor was not so
authorized by the landowner. This is a more imagined than real. The
landowner has the burden of proving that the legal possessor was
not authorized to install tenants and, more often than not, the legal
possessor is so empowered. In civil law, lease, for the instance,
where there is consideration, the general rule is that the lessee can
sublease the leased holding unless there is an express prohibition
against subletting in the contract itself. 32 Thus, in order for the
lessee to be barred from subletting, the contract of lease must
expressly stipulate to that effect." In this case, the transaction
between brother and sister was not for any material consideration
nor was it intended to defeat any purpose of law. There is not even
any insinuation that Benigno was only being used by Natividad to
oust Graciano from the lands.
In any event, should the majority still hold that Sec. 6 of R.A. 3844
authorizes the persons therein enumerated to institute a tenant
automatically, although I strongly disagree, it should at most be
made to apply only to transfers of legal possession where there is
material consideration, and not where such transfers are absolutely
gratuitous or purely out of benevolence because of personal or
blood relationship. Unfortunately for Natividad, her benevolence
does not seem to evoke reciprocal benevolence from this Court.
FOR ALL THE FOREGOING CONSIDERATIONS, I have to
dissent from the majority opinion and reiterate my vote to AFFIRM
the judgment under review.

49
7. G.R. No. 70736 March 16, 1987

In compliance with the order of the Court of Appeals, the CAR

admitted additional evidence.

BONIFACIO L. HILARIO and EDUARDA M. BUENCAMINO

HILARIO, petitioners,
On December 19, 1983, the CAR admitted the petitioners' third
vs.
party complaint filed with leave against the Philippine National
HONORABLE INTERMEDIATE APPELLATE COURT AND Bank (PNB) which states that in the event that judgment would be
SALVADOR BALTAZAR, respondents.
rendered against them under the original complaint, the PNB must
contribute, indemnify, and reimburse the spouses the full amount of
Bonifacio L. Hilario for petitioners.
the judgment.
Alberto Mala, Jr. for private respondent.

GUTIERREZ, JR., J.:

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:

This is a petition for review on certiorari of the Court of Appeals'

decision declaring Salvador Baltazar a leasehold tenant entitled to WHEREFORE, judgment is hereby rendered declaring plaintiff not
security of tenure on a parcel of land consisting of 1,740 square to be a tenant on the landholding described in the complaint and
ordering his ejectment therefrom.
meters.
On January 13, 1981, Salvador Baltazar filed a verified complaint The third-party complaint is hereby dismissed for lack of merit. (pp.
with the Court of Agrarian Relations, Branch VI at Baliuag, Bulacan 25- 26, Rollo)
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 Again, respondent Salvador Baltazar appealed to the then
2 hectares situated in San Miguel, Bulacan, which was previously Intermediate Appellate Court (IAC).
owned by one Socorro Vda. de Balagtas; that on or about December
27, 1980, and thereafter, the spouses Hilario began to threaten him The IAC, however, reversed the decision of the CAR and held that:
to desist from entering and cultivating a portion of the aforesaid
land with an area of 4,000 square meters and otherwise committed ... [T]he decision appealed from is hereby SET ASIDE, and another
acts in violation of his security of tenure; that the Hilarios were one entered declaring plaintiff-appellant ii leasehold tenant entitled
contemplating the putting up of a fence around the said portion of to security of tenure on the land in question consisting of 1,740
4,000 square meters and that unless restrained by the court, they square meters. Costs against defendants-appellees. (p. 31, Rollo)
would continue to do so to his great irreparable injury.
Consequently, the spouses Hilarios filed this petition for review
Baltazar claims that he became a tenant of Socorro P. Vda. de making the following assignments of errors:
Balagtas on the latter's two-hectare landholding located at San Juan,
THE INTERMEDIATE APPELLATE COURT ERRED
San Miguel, Bulacan by virtue of a "Kasunduan" executed between I.
IN
DISTURBING
THE FINDINGS OF FACTS AND DECISION
them on January 8, 1979, He states that he erected his house and
OF
THE
COURT
OF
AGRARIAN RELATIONS (CAR) WHICH IS
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 SUPPORTED BY SUBSTANTIAL EVIDENCE.
Balagtas, he allegedly gave the share pertaining to the landowner to
THE INTERMEDIATE APPELLATE COURT ERRED
her daughter Corazon Pengzon. It was only in December, 1980 that II.
IN
SUBSTITUTION
(SIC) THE FINDINGS OF FACTS OF CAR,
he came to know that a portion of the 2 hectares or 4,000 square
OF
ITS
OWN
FINDINGS.
meters is already owned by the Hilarios.
THE INTERMEDIATE APPELLATE COURT ERRED
On the other hand, the petitioners aver that they acquired the III.
landholding of 4,000 square meters from the Philippine National IN NOT AFFIRMING THE DECISION OF CAR, FINDING THE
Bank (PNB) after it had been foreclosed by virtue of a deed of sale LOTS IN QUESTION WITH AN AREA OF 1,740 SQUARE
AS
RESIDENTIAL
LOT
AND
PRIVATE
executed between Bonifacio Hilario and the PNB. The former METERS
owner Corazon Pengzon testified that she owned only two lots-Lot RESPONDENT NOT TO BE A TENANT.
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 We agree with the respondent court when it stated that it can affirm
other 2 lots were owned by Ruben Ocampo and Juan Mendoza. She on appeal the findings of the CAR only if there is substantial
further testified that in 1964 at the time of the partition of the evidence to support them. However, after a careful consideration of
property, she declared the property for classification purposes as the records of the case, we find no valid reason to deviate from the
"bakuran" located in the Poblacion and had no knowledge that there findings of the CAR. The evidence presented by the petitioners is
more than sufficient to justify the conclusion that private respondent
were other things planted in it except bananas and pomelos.
Salvador Baltazar is not a tenant of the landholding in question.
On November 27, 1981, the Court of Agrarian Relations (CAR) in
determining whether or not respondent Baltazar is the tenant of the Salvador Baltazar claims: that he is working on the land in question
petitioners ruled that the land in question is not an agricultural pursuant to a "kasunduan" executed between him and Socorro
landholding but plain "bakuran," hence, Baltazar is not a tenant on Balagtas. The contract covers a two-hectare parcel of land. The
disputed landholding is only 4,000 square meters more or less,
the land.
although Baltazar claims that this area is a portion of the two
On January 30, 1982, the Court of Appeals, however, remanded the hectares in the contract. He testified that sometime in 1965, he
case to the lower court for further proceedings on the ground that relinquished 1.5 hectares of the two hectares subject of the
the findings of the Court of Agrarian Relations (CAR) were not "kasunduan" to Nemesio Ocampo, Juan Mendoza, Miguel Ocampo
and Miguel Viola and what remained under his cultivation was 1/2
supported by substantial evidence.
hectare owned by Corazon Pengson. He stated that when Socorro
Balagtas died, no new contract was executed. However, he insists

50
that the old contract was continued between Corazon Pengson and case and she would not have accepted any share from the produce of
himself. (Rollo, p. 23).
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
This claim is controverted by the testimony of Corazon Pengson later on purchased by the spouses Hilarios.
herself which we quote as follows:
We note the CAR's finding:
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 Tenancy relationship is indivisible. The two-hectare land subject of
your mother how did you
plaintiff's alleged contract with Socorro Balagtas having been
parcelled
into
seven
(7)
and
possession
thereof
Q ... administer this landholding in 1963, 1964, 1965, 1966, etc?
relinquished/surrendered in 1965 results in the termination of
plaintiff's tenancy relationship with the previous owner/landholder.
A What I did is to fix the title of ownership, sir.
Such being the case, he cannot now claim that the landholding in
question consisting of 4,000 square meters, more or less, is being
COURT:
cultivated by him under the old contract. The owner thereof
Corazon Pengson has no tenancy relationship with him (plaintiff).
Q What else?
(p. 25, Rollo)
A None other, Your Honor.

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
Q After the death of your mother in 1962, have you seen Mr.square meters. We agree with the CAR when it said:
Salvador Baltazar in this landholding in question?
The law accords the landholder the right to initially choose his
A Yes, Your Honor.
tenant to work on his land. For this reason, tenancy relationship can
only be created with the consent of the true and lawful landholder
Q What was he doing?
through lawful means and not by imposition or usurpation. So the
mere cultivation of the land by usurper cannot confer upon him any
WITNESS:
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,
A We are neighbors, Your Honor, sometimes he visits and goes to 130 SCRA 482) (Ibid)
our place and we used to meet there, Your Honor.
And in the case of Tuazon v. Court of Appeals (118 SCRA 484), this
Q What was the purpose of his visit and your meeting in this Court had the occasion to explain:
landholding?
xxx
xxx
xxx
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 ... Tenancy is not a purely factual relationship dependent on what
Honor.
the alleged tenant does upon the land. It is also a legal relationship.
The intent of the parties, the understanding when the farmer is
Q You mean to say he stays in this subject landholding consisting of installed, and, as in this case, their written agreements, provided
7,000 square meters?
these are complied with and are not contrary to law, are even more
important."
A After the survey it turned outThe respondent court ruled that the fact that the land in question is
A . . . that he is occupying another lot which I learned that property located in the poblacion does not necessarily make it residential.
does not belong to us, Your Honor.
The conclusion is purely speculative and conjectural, We note that
Q what was your arrangement regarding his stay in that landholding the evidence presented by the petitioners sufficiently establishes that
which you don't own?
the land in question is residential and not agricultural.
A He said that he had a contract with my late mother which I don't As we stated in Tiongson v. Court of Appeals (supra) "the key factor
know; in order not to cause any trouble because I will be bothered in in ascertaining whether or not there is a landowner-tenant
my business, I told him to continue, Your Honor.
relationship in this case is the nature of the disputed property."
Q What do you mean when youCOURT:
(continuing)
. . .told him to continue?

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.

A What I mean to say is that he can stay there although I don't

understand the contract with my mother, Your Honor.
Respondent Baltazar is a full-time government employee working in
the Bureau of Plant Industry.
Q Was he paying rentals for his stay in that lot?
The disputed lots were acquired at a foreclosure sale from the
A No, Your Honor (T.S.N., pp. 15-19, hearing of August 5, 1981). Philippine National Bank. They were purchased as residential lots
and the deed of sale describes them as "residential." The inspection
Corazon Pengson further explained that she did not receive any and appraisal report of the PNB classified the land as residential.
share from the produce of the land from 1964 up to the filing of the The declaration of real property on the basis of which taxes are paid

51
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 non-agricultural unless there is clearly preponderant
evidence to show that it is agricultural.
The respondent court also failed to note that the alleged tenant pays
no rental or share to the landowners. Baltazar made a vague
allegation that he shared 70-30 and 50-50 of the produce in his
favor. The former owner flatly denied that she ever received
anything from him,
The requirements set by law for the existence of a tenancy
relationship, to wit: (1) The parties are the landholder and tenant; (2)
The subject is agricultural land; (3) The purpose is agricultural
production; and (4) There is consideration; have not been met by the
private respondent.
We held in Tiongson v. Court of Appeals, cited above that:
All these requisites are necessary in order to create tenancy
relationship between the parties and the absence of one or more
requisites do not make the alleged tenant a de facto tenant as contradistinguished from a de jure tenant. This is so because unless a
person has established his status as a 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.

52
8 G.R. No. 88113 October 23, 1992

20,200 square meters, located at San Pioquinto, Malvar, Batangas,

and owned by the defendants; ordering Pedro Fideli to vacate the
SPOUSES TITUS L. ENDAYA and GLENDA TRINIDAD;landholding deliver possession thereof to the defendants; and
SPOUSES RICO L. ENDAYA and NANETTE AQUINO; andordering the amount of P8,000.00 deposited under Account No.
SPOUSES JOSEPHINE L. ENDAYA and LEANDRO BANTUG, 2940029826 Civil Case No. T-430 to be withdrawn and delivered to
petitioners,
the defendants, No. pronouncement as to costs.
vs.
COURT OF APPEALS and PEDRO FIDELI, respondents.
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.
ROMERO, J.:
Assailed in this petition for review on certiorari is the decision of Petitioners impugn the Court of Appeals' declaration that private
the Court of Appeals in CA-.G.R. No. 15724 dated April 26, 1989 1 respondent is an agricultural lessee of the subject landholding
reversing the judgment of the Regional Trial Court of Tanauan, contending that when the original landowners, the Spouses San
Batangas (Branch 6) in Civil Case No. T-430 2 and holding that Diego, entered into a lease contract with Regino Cassanova, the
private respondent is an agricultural lessee in the land of petitioner agricultural leasehold relationship between the Spouses San Diego
and private respondent, the existence of which petitioners do not
whose security of tenure must be respected by the latter.
dispute, was thereby terminated. Petitioners argue that a landowner
cannot have a civil law lease contract with one person and at the
The antecedent facts are as follows:
same time have an agricultural leasehold agreement with another
The Spouses Natividad Trinidad and Cesar San Diego owned a over the same land. It is further argued that because private
piece of agricultural land consisting of 20,200 square meters respondent consented to the lease contract between the Spouses San
situated at San Pioquinto, Malvar, Batangas, devoted to rice and Diego and Cassanova, signing as he did the lease agreement and the
corn. As far back as 1934, private respondent Fideli has been renewal contract as witness thereof, private respondent has waived
cultivating this land as a tenant of the Spouses respondent Fideli has his rights as an agricultural lessee.
been cultivating this land as a tenant of the Spouses San Diego
under a fifty-fifty (50-50) sharing agreement. This fact, petitioners These contentions are without merit.
do not dispute.
R.A. No. 3844 (1963), as amended By R.A. No. 6839 (1971), which
On May 2, 1974, a lease contract was executed between the Spouses is the relevant law governing the events at hand, abolished share
San Diego and one Regino Cassanova for a period of four years tenancy throughout the Philippines from 1971 and established the
from May 1974 up to May 1978. 3 The lease contract obliged agricultural leasehold system by operation of law. 11 Section 7 of
Cassanova to pay P400.00 per hectare per annum and gave him the the said law gave agricultural lessees security of tenure by providing
authority to oversee the planting of crops on the land. 4 Private the following: "The agricultural leasehold relation once established
shall confer upon the agricultural lessee the right to continue
respondent signed this lease contract as one of two witnesses. 5
working on the landholding until such leasehold relation is
The lease contract was subsequently renewed to last until May 1980 extinguished. The agricultural lessee shall be entitled to security of
but the rental was raised to P600.00. Again, private respondent tenure on his landholding and cannot be ejected therefrom unless
authorized by the Court for causes herein provided." 12 The fact
signed the contract as witness. 6
that the landowner entered into a civil lease contract over the subject
During the entire duration of the lease contract between the Spouses landholding and gave the lessee the authority to oversee the farming
San Diego and Cassanova, private respondent continuouslyof the land, as was done in this case, is not among the causes
cultivated the land, sharing equally with Cassanova the net produce provided by law for the extinguishment of the agricultural leasehold
relation. 13 On the contrary, Section 10 of the law provides:
of the harvests.
On January 6, 1980, the Spouses San Diego sold the land to Sec. 10. Agricultural Leasehold Relation Not Extinguished by
petitioners for the sum of P26,000.00. The sale was registered with Expiration of Period, etc. The agricultural leasehold relation
the Register of Deeds of Batangas and a Transfer Certificate of Title under this code shall not be extinguished by mere expiration of the
was duly issued on January 7, 1981. 7 Private respondent continued term or period in a leasehold contract nor by the sale, alienation or
to farm the land although petitioners claim that private respondent transfer of the legal possession of the landholding. In case the
was told immediately after the sale to vacate the land. 8 In any case, agricultural lessor sells, alienates or transfers the legal possession of
it is undisputed that private respondent deposited with the Luzon the landholding, the purchaser or transferee thereof shall be
Development Bank an amount of about P8,000.00 as partial subrogated to the rights and substituted to the obligations of the
payment of the landowner's share in the harvest for the years 1980 agricultural lessor.
until 1985. 9
Hence, transactions involving the agricultural land over which an
Due to petitioners persistent demand for private respondent to agricultural leasehold subsists resulting in change of ownership,
vacate the land, private respondent filed in April 1985 a complaint e.g., sale, or transfer of legal possession, such as lease, will not
10 with the Regional Trial Court of Tanauan, Batangas praying that terminate the right of the agricultural lessee who is given protection
by the law by making such rights enforceable against the transferee
he be declared the agricultural tenant of petitioners.
or the landowner's successor in interest. 14
After trial, the trial court decided in favor of petitioners by holding
that private respondent is not an agricultural lessee of the land now Illustrative of the legal principles outlined above is Catorce v. Court
owned by petitioners. The dispositive portion of the RTC decision of Appeals 15 where the person holding a mortgage over the farm
land subject of an agricultural leasehold took possession thereof
reads:
pursuant to the mortgage and ousted the agricultural lessee. Upon
WHEREFORE, judgment is hereby rendered dismissing plaintiff's complaint for reinstatement filed by the agricultural lessee, the then
complaint to be declared a tenant of the landholding consisting of Court of Agrarian Relations ordered the mortgagee to deliver
possession over the land to the agricultural lessee but his decision

53
was reversed by the Court of Appeals. In reversing the Court of
Appeals' judgment and reinstating the Agrarian Court's decision, the It is our considered judgment, since the return by the lessee of the
Court, through Justice Melencio-Herrera, noted, among other leased property to the lessor upon the expiration of the contract
considerations, that "tenants are guaranteed security of tenure, involves also a transfer of legal possession, and taking into account
meaning, the continued enjoyment and possession of their the manifest intent of the lawmaking body in amending the law, i.e.,
landholding except when their dispossession had been authorized byto provide the tenant with security of tenure in all cases of transfer
virtue of a final and executory judgment, which is not so in the case of legal possession, that the instant case falls within and is governed
at bar." 16 Implicit in the decision is the recognition that the transfer by the provisions of Section 9 of Republic Act 1199, as amended by
of possession to the mortgage did not terminate the agricultural Republic Act 2263. (Joya v. Pareja, 106 Phil, 645).
leasehold nor prejudice the security of tenure of the agricultural
lessee.
. . . that the tenant may proceed against the transferee of the land to
enforce obligation incurred by the former landholder such
Closer, to although not identical with the factual setting of the case obligation . . . falls upon the assignee or transferee of the land
at bar is Novesteras v. Court of Appeals. 17 Petitioner in said case pursuant to Sec. 9 abovementioned. Since respondent are in turn
was a share tenant of the respondent over two parcels of land. free to proceed against the former landholder for reimbursement, it
Respondent entered into a contract of civil lease with Rosenda is not iniquitous to hold them responsible to the tenant for said
Porculas for a term of three years. Porculas did not farm the land obligations. Moreover, it is the purpose of Republic Act 1199,
himself but left it to petitioner to till the land. After the expiration of particularly Sec. 9 thereof, to insure that the right of the tenant to
the lease between respondent and Porculas, petitioner entered into receive his lawful share of the produce to receive this lawful share
an agreement denominated as a contract of civil lease with of the produce of the land is unhampered by the transfer of said land
respondent. On expiration of this lease contract, respondent denied from one landholder to another. (Almarinez v. Potenciano, 120 Phil.
petitioner possession over the land. Resolving the rights and 1154.). 19
obligations of the parties, the Court, through Justice Paras, held that
the petitioner therein became an agricultural tenant of respondent by In the instant case, private respondent has been cultivating the
virtue of R.A. No. 3844 (1963), as amended by R.A. No 6839 subject farm landholding with a fifty-fifty (50-50) sharing
(1971). The lease contract between the respondent and Porculas did arrangement with the Spouses San Diego, petitioners' predecessorsnot terminate the agricultural leasehold relationship between in-interest. The passage of R.A. 6839 in 1971, amending R.A. 3844
petitioner and respondent. If at all, the said lease agreement, coupled (1963), secured to private respondent all the rights pertaining to an
by the fact that Porculas allowed petitioner to continue cultivating in agricultural lessee. The execution of a lease agreement between the
his capacity as tenant of the subject landholding, served to Spouses San Diego and Regino Cassanova in 1974 did not terminate
strengthen petitioner's security of tenure as an agricultural tenant of private respondent's status as an agricultural lessee. The fact that
the farmland in question. Accordingly, the subsequent contract private respondent knew of, and consented to, the said lease contract
between petitioner and respondent denominated as a contract of by signing as witness to the agreement may not be construed as a
civil lease was held by the Court to be in fact an agricultural waiver of his rights as an agricultural lessee. On the contrary, it was
leasehold agreement.
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
Again, in Coconut Cooperative Marketing Association, Inc. owners directly as he used to. No provision may be found in the
(COCOMA) v. Court of Appeals, 18 it was held that the agricultural lease contract and the renewal contract even intimating that private
leasehold is preserved, notwithstanding the transfer of the legal respondent has waived his rights as an agricultural lessee. Militating
possession of the subject landholding, with the transferee, against petitioners' theory that the agricultural leasehold was
COCOMA in that case, being accountable to the agricultural lessees terminated or waived upon the execution of the lease agreement
for their rights. The Court, through Justice Padilla, summarized the between the San Diegos and Cassanova is the fact the latter desisted
rule as follows:
from personally cultivating the land but left it to private respondent
to undertake the farming, the produce of the land being shared
There is also no question that, in this case, there was a transfer of between Cassanova and private respondent, while the former paid
the legal possession of the land from one landholder to another P400.00 and later P600.00 per hectare per annum to the San Diegos,
(Fule to petitioner COCOMA). In connection therewith, Republic as agreed upon in the lease contract.
Act 3844, Sec. 10 states:
Petitioners, however, insist that private respondent can no longer be
Sec. 10. Agricultural Leasehold Relation Not Extinguished byconsidered the agricultural lessee of their farm land because after
Expiration of Period, etc. The agricultural leasehold relation they purchased the land from the Spouses San Diego in 1980,
under this Code shall not be extinguished by mere expiration of the private respondent did not secure their permission to cultivate the
term or period in a leasehold contract nor by the sale, alienation or land as agricultural lessee.
transfer of the legal possession of the landholding. In case the
agricultural lessor sells, alienates or transfers the legal possession of It is true that the Court has ruled that agricultural tenancy is not
the landholding, purchaser or transferee thereof shall be subrogated created where the consent the true and lawful owners is absent. 20
to the rights and substituted to the obligations of the agricultural But this doctrine contemplates a situation where an untenanted farm
lessor.
land is cultivated without the landowner's knowledge or against her
will or although permission to work on the farm was given, there
Further, in several cases, this Court sustained the preservation of the was no intention to constitute the worker as the agricultural lessee of
landholder-tenant relationship, in cases of transfer of legal the farm land. 21 The rule finds no application in the case at bar
possession:
where the petitioners are successors-in-interest to a tenanted land
over which an agricultural leasehold has long been established. The
. . . in case of transfer or in case of lease, as in the instant case, the consent given by the original owners to constitute private
tenancy relationship between the landowner and his tenant should respondent as the agricultural lessee of the subject landholding
be preserved in order to insure the well-being of the tenant or binds private respondents whom as successors-in-interest of the
protect him from being unjustly dispossessed by the transferee or Spouses San Diego, step into the latter's shows, acquiring not only
purchaser of the land; in other words, the purpose of the law in their rights but also their obligations. 22
question is to maintain the tenants in the peaceful possession and
cultivation of the land or afford them protection against unjustified Contradicting their position that no agricultural leasehold exists
dismissal from their holdings. (Primero v. CAR, 101 Phil. 675);
over the land they acquired from the Spouses San Diego, petitioners

54
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 fiftyfifty (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.

55
9 G.R. No. 78214 December 5, 1988

As a result, the Regional Director of MAR Regional VII, issued a

certification 1 dated January 24, 1 983, stating that said Criminal
YOLANDA CABALLES, petitioner,
Case No. 4003 was not proper for hearing on the bases of the
vs.
following findings:
DEPARTMENT OF AGRARIAN REFORM, HON. HEHERSON T.
ALVAREZ and BIENVENIDO ABAJON, respondents.
That herein accused is a bona-fide tenant of the land owned by the
complaining witness, which is devoted to bananas;

SARMIENTO, J.:

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

Before us is a petition for certiorari seeking the annulment of an That this arose out of or is connected with agrarian relations.
Order issued by the public respondent Ministry of Agrarian
Reform , now the Department of Agrarian Reform (DAR), through From the said certification, the petitioner appealed to the then MAR,
its then Minister, the Hon. Heherson Alvarez, finding the existence now the respondent DAR. Acting on said appeal, the respondent
of a tenancy relationship between the herein petitioner and the DAR, through its then Minister Conrado Estrella, reversed the
private respondent and certifying the criminal case for malicious previous certification in its Order 2 of February 3, 1986, declaring
mischief filed by the petitioner against the private respondent as not Criminal Case No. 4003 as proper for trial as "the land involved is a
residential lot consisting of only 60 square meters whereon the
proper for trial.
house of the accused is constructed and within the industrial zone of
the town as evinced from the Certification issued by the Zoning
The facts as gathered by the MAR are as follows:
Administrator of Talisay, Cebu."
The landholding subject of the controversy, which consists of only
sixty (60) square meters (20 meters x 3 meters) was acquired by the Upon motion for reconsideration filed by Abajon, the respondent
spouses Arturo and Yolanda Caballes, the latter being the petitioner DAR, through its new Minister, herein respondent Heherson
herein, by virtue of a Deed of Absolute Sale dated July 24, 1978 Alvarez, issued an Orders dated November 15, 1986, setting aside
executed by Andrea Alicaba Millenes This landholding is part of Lot the previous Order 3 dated February 3, 1986, and certifying said
No. 3109-C, which has a total area of about 500 square meters, criminal case as not proper for trial, finding the existence of a
situated at Lawaan Talisay, Cebu. The remainder of Lot No. 3109-C tenancy relationship between the parties, and that the case was
was subseconsequently sold to the said spouses by Macario Alicaba designed to harass the accused into vacating his tillage.
and the other members of the Millenes family, thus consolidating
ownership over the entire (500-square meter) property in favor of In the summary investigation conducted by the DAR, the former
landowner, Andrea Millenes, testified that Bienvenido Abajon
the petitioner.
dutifully gave her 50% share of the produce of the land under his
In 1975, before the sale in favor of the Caballes spouses, private cultivation. The grandson of Andrea Millenes, Roger Millenes,
respondent Bienvenido Abajon constructed his house on a portion of corroborated the testimony of the former, stating that he received
the said landholding, paying a monthly rental of P2.00 to the owner,said share from Abajon. Roger Millenes further testified that the
Andrea Millenes. The landowner likewise allowed Abajon to plant present owners received in his presence a bunch of bananas from the
on a portion of the land, agreeing that the produce thereof would be accused representing or 50% of the two bunches of bananas
shared by both on a fitfy-fifty basis. From 1975-1977, Abajon gathered after Caballes had acquired the property. 4
planted corn and bananas on the landholding. In 1978, he stopped
planting corn but continued to plant bananas and camote. During From these factual findings, the DAR concluded that Abajon was a
those four years, he paid the P2.00 rental for the lot occupied by his tenant of Andrea Millenes, the former owner, who had testified that
she shared the produce of the land with Abajon as truer thereof. 5
house, and delivered 50% of the produce to Andrea Millenes.
Thus, invoking Sec. 10 of RA 3844, as amended, which provides
Sometime in March 1979, after the property was sold, the new that "[T]he agricultural leasehold relation under this Code shall not
owners, Arturo and Yolanda Caballes, told Abajon that the poultry be extinguished by mere expiration of the term or period in a
they intended to build would be close to his house and pursuaded leasehold contract nor by the sale, alienation or transfer of the legal
him to transfer his dwelling to the opposite or southern portion of possession of the landholding"; and that "(I)n case the agricultural
the landholding. Abajon offered to pay the new owners rental on the lessor sells, alienates or transfers the legal possession of the
land occupied by his house, but his offer was not accepted. Later, landholding, the purchaser or transferee thereof shall be subrogated
the new owners asked Abajon to vacate the premises, saying that to the rights and substituted to the obligations of the agricultural
they needed the property. But Abajon refused to leave. The parties lessor," the MAR ruled that 'the new owners are legally bound to
had a confrontation before the Barangay Captain of Lawaan in respect the tenancy, notwithstanding their claim that the portion
Talisay, Cebu but failed to reach an agreement. All the efforts tilled by Abajon was small, consisting merely of three (3) meters
exerted by the landowners to oust Abajon from the landholding wide and twenty (20) meters long, or a total of sixty (60) square
meters." 6
were in vain as the latter simply refused to budge.
On April 1, 1982, the landowner, Yolanda Caballes, executed an Hence, this petition for certiorari alleging that:
Affidavit stating that immediately after she reprimanded Abajon for
Respondents DAR and Hon. Heherson T. Alvarez
harvesting bananas and jackfruit from the property without her I.
committed
"grave abuse of power and discretion amounting to lack
knowledge, the latter, with malicious and ill intent, cut down the
banana plants on the property worth about P50.00. A criminal case of jurisdiction" in holding that private respondent Abajon is an
for malicious mischief was filed against Abajon and which was agricultural tenant even if he is cultivating only a 60-square meter (3
docketed as Criminal Case No. 4003. Obviously, all the planting on x 20 meters) portion of a commercial lot of the petitioner.
the property, including that of the banana plants, had been done by
Public respondents gravely erred in holding that Criminal
Abajon. On September 30, 1982, upon motion of the defense inII.
open court pursuant to PD 1038, the trial court ordered the referral Case No. 4003 is not proper for trial and hearing by the court. 7
of the case to the Regional Office No. VII of the then MAR for a
preliminary determination of the relationship between the parties.

56
We hold that the private respondent cannot avail of the benefits even 500, square meters and located in an urban area and in. the
afforded by RA 3844, as amended. To invest him with the status of a heart of an industrial or commercial zone at that. Tenancy status
tenant is preposterous.
arises only if an occupant of a parcel of land has been given its
possession for the primary purpose of agricultural production. The
Section 2 of said law provides:
circumstances of this case indicate that the private respondent's
status is more of a caretaker who was allowed by the owner out of
It is the policy of the State:
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
(1)
To establish cooperative-cultivatorship among those who the said portion.
live and work on the land as tillers, owner-cultivatorship and the
economic family-size farm as the basis of Philippine agriculture Agricultural production as the primary purpose being absent in the
and, as a consequence, divert landlord capital in agriculture to arrangement, it is clear that the private respondent was never a
industrial development;
tenant of the former owner, Andrea Millenes. Consequently, Sec. 10
of RA of 3844, as amended, does not apply. Simply stated, the
xxx
xxx
xxx
private respondent is not a tenant of the herein petitioner.
RA 3844, as amended, defines an economic family-size farm as "an Anent the second assignment of error, the petitioner argues that
area of farm land that permits efficient use of labor and capital since Abajon, is not an agricultural tenant, the criminal case for
resources of the farm family and will produce an income sufficient malicious mischief filed against him should be declared as proper
to provide a modest standard of living to meet a farm family's needs for trial so that proceedings in the lower court can resume.
for food, clothing, shelter, and education with possible allowance
for payment of yearly installments on the land, and reasonable Notwithstanding our ruling that the private respondent is not a
reserves to absorb yearly fluctuations in income." 8
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 private respondent only occupied a miniscule portion (60 the interest of justice. Remand to the Municipal Court of Talisay,
square meters) of the 500-square meter lot. Sixty square meters of Cebu, would not serve the ends of justice at all, nor is it necessary,
land planted to bananas, camote, and corn cannot by any stretch of because this High Tribunal is in a position to resolve with finality
the imagination be considered as an economic family-size farm. the dispute before it. This Court, in the public interest, and towards
Surely, planting camote, bananas, and corn on a sixty-square meter the expeditious administration of justice, has decided to act on the
piece of land can not produce an income sufficient to provide a merits and dispose of the case with finality. 11
modest standard of living to meet the farm family's basic needs. The
private respondent himself admitted that he did not depend on the The criminal case for malicious mischief filed by the petitioner
products of the land because it was too small, and that he took on against the private respondent for allegedly cutting down banana
carpentry jobs on the side. 9 Thus, the order sought to be reviewed trees worth a measly P50.00 will take up much of the time and
is patently contrary to the declared policy of the law stated above. attention of the municipal court to the prejudice of other more
pressing cases pending therein. Furthermore, the private respondent
The DAR found that the private respondent shared the produce of will have to incur unnecessary expenses to finance his legal battle
the land with the former owner, Andrea Millenes. This led or against the petitioner if proceedings in the court below were to
misled, the public respondents to conclude that a tenancyresume. Court litigants have decried the long and unnecessary delay
relationship existed between the petitioner and the private in the resolution of their cases and the consequent costs of such
respondent because, the public respondents continue, by operation litigations. The poor, particularly, are victims of this unjust judicial
of Sec. 10 of R.A. 3844, as amended, the petitioner new owner is dawdle, Impoverished that they are they must deal with unjust legal
subrogated to the rights and substituted to the obligations of the procrastination which they can only interpret as harassment or
supposed agricultural lessor (the former owner).
intimidation brought about by their poverty, deprivation, and
despair. It must be the mission of the Court to remove the
We disagree.
misperceptions aggrieved people have of the nature of the
dispensation of justice. If justice can be meted out now, why wait
The essential requisites of a tenancy relationship are:
for it to drop gently from heaven? Thus, considering that this case
involves a mere bagatelle the Court finds it proper and compelling
1.
The parties are the landowner and the tenant;
to decide it here and now, instead of further deferring its final
2.
The subject is agricultural land;
termination.
3.
There is consent;
4.
The purpose is agricultural production;
As found by the DAR, the case for malicious mischief stemmed
5.
There is personal cultivation; and
from the petitioner's affidavit stating that after she reprimanded
6.
There is sharing of harvests.
private respondent Abajon for harvesting bananas and jackfruit from
the property without her knowledge, the latter, with ill intent, cut the
All these requisites must concur in order to create a tenancy banana trees on the property worth about P50.00.
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 This was corroborated by a certain Anita Duaban, a friend of the
thereon, a de jure tenant. This is so because unless a person has petitioner, who likewise executed an affidavit to the effect that she
established his status as a de jure tenant, he is not entitled to security saw the private respondent indiscriminately cutting the banana trees.
of tenure nor is he covered by the Land Reform Program of the 12
Government under existing tenancy laws. 10
The Revised Penal Code, as amended, provides that "any person
Therefore, the fact of sharing alone is not sufficient to establish a who shall deliberately cause to the property of another any damage
tenancy relationship. Certainly, it is not unusual for a landowner to not falling within the terms of the next preceding chapter shall be
accept some of the produce of his land from someone who plants guilty of malicious mischief." 13
certain crops thereon. This is a typical and laudable provinciano trait
of sharing or patikim, a native way of expressing gratitude for favor The elements of the crime of malicious mischief are:
received. This, however, does not automatically make the tillersharer a tenant thereof specially when the area tilled is only 60, or

57
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.

58
10 G.R. No. 76225 March 31, 1992
ESPIRIDION TANPINGCO, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, and
HORCA, SR., respondents.

Was respondent Court correct in sustaining the validity of the

conversion of the subject tenanted riceland into a school site?
III
BENEDICTO
Was it correct in ruling that a tenant is not entitled to payment of
disturbance compensation in case his tenanted landholding is
donated and converted into a school site?

Anent the first assignment of error, the petitioner anchors his

contention mainly on Section 17 of Presidential Decree No. 946
May a tenanted parcel of land be donated by the landowner so that it which provides:
GUTIERREZ, JR., J.:

can be the site of a public high school without securing the consent
of the tenant-lessee? Who bears the responsibility of paying Sec. 17. Pleading, Hearing, Limitation on Postponements. The
disturbance compensation? These are the issues raised in this case. defendant shall file answer to the complaint (not a motion to
dismiss), within a non-extendible period of ten (10) days from
On May 10, 1985, a complaint for payment of disturbance service of
compensation with damages was filed by petitioner Espiridion summons . . .
Tanpingco against respondent Benedicto Horca, Sr. with the
In Sucaldito and De Guzman v. Hon. Montejo (193 SCRA 556
Regional Trial Court of Palo, Leyte.
[1991]), the Court declared that where the law speaks in clear and
It is alleged in the complaint that the petitioner is the tenant-lessee categorical language, there is no room for interpretation. However,
in the respondent's parcel of agricultural riceland situated at Brgy. technicalities may be disregarded in order to resolve the case on its
Buenavista, Jaro, Leyte under a leasehold contract entered into merits. (Ruiz v. Court of Appeals, G.R. No. 93454, September 13,
sometime in April, 1976; that in a letter dated April 9, 1985, the 1991 citing Tesoro v. Mathay, 185 SCRA 124 [1990]).
respondent through his representative informed him to desist from
working on the subject land, having already donated the same on On this point, the respondent appellate court noted that:
February 3, 1985; that the respondent openly ordered the petitioner
to vacate the landholding and is determined to oust him from the The rationale of the rule requiring a defendant in an agrarian case to
premises in violation of the law; that the petitioner is willing to file an answer and not a motion to dismiss is to expedite the
accept payment of disturbance compensation in an amount proceedings. The filing of the motion to dismiss and the granting
computed in accordance with law and in the alternative to remain as thereof by the lower court based upon indubitable grounds precisely
expedited the proceedings and conforms with the spirit and intention
tenant-lessee of the subject riceland.
of P.D. 946 which requires courts trying agrarian cases to employ
On July 5, 1985, the case was called for pre-trial following which every reasonable means to ascertain the facts of every case in
the trial court gave the respondent until July 9, 1985 to file his accordance with justice and equity without regard to technicalities
answer. The respondent filed instead a Motion to Dismiss alleging of law and procedure and empowering the Court to adopt any
principally that the complaint states no cause of action because the appropriate measure or procedure in any situation or matter not
respondent is not the real party-in-interest having already donated provided for or covered by the Decree (Section 16, 3rd and 4th
the subject land to the Ministry of Education, Culture, and Sports, sentences, P.D. 946).
Region VIII, as a school site of the Buenavista Barangay High
School; and that the donation not having in anyway benefited the We, therefore, take exception to the literal application of Section 17
respondent, no disturbance compensation is due the petitioner since of P.D. No. 946 for as stated in Salonga v. Warner Barnes and Co.,
under Section 36 (1) of the Agrarian Reform Code as amended, Ltd. (88 Phil. 125 [1951], an action is brought for a practical
disturbance compensation holds true only in cases wherein the purpose, nay to obtain actual and positive relief. If the party sued
lessor-owner derives financial benefits from the conversion of the upon is not the proper party, any decision that may be rendered
against him would be futile, for it cannot be enforced or executed.
agricultural land into non-agricultural purposes.
The effort that may be employed will be wasted.
The trial court granted the respondent's Motion to Dismiss and
Section 2, Rule 3 of the Rules of Court requires that every action
denied the petitioner's Motion for Reconsideration.
must be prosecuted in the name of the real party-in-interest. A
On June 20, 1986, the Intermediate Appellate Court rendered the corollary proposition to this rule is that an action must be brought
decision now assailed, the dispositive portion of which reads as against the real party-in-interest, or against a party which may be
bound by the judgment to be rendered therein (Salonga v. Warner
follows:
Barnes and Co., Ltd. supra citing Salmon and Pacific Commercial
WHEREFORE, finding no merit in the instant appeal, the same is Co., v. Tan Cuenco, 36 Phil. 556 [1917]). The real party-in-interest
is one who stands to be benefited or be injured by the judgment, or
hereby DISMISSED with costs taxed against the appellant.
the party entitled to the avails of the suit (Rebollido v. Court of
From the aforesaid decision, petitioner Esperidion Tanpingco Appeals, 170 SCRA 800 [1989] citing Samahan ng mga
interposed the present petition under the following assignment of Nangungupahan sa Azcarraga Textile Market, Inc., et al. v. Court of
Appeals, 165 SCRA 598 [1988]). If the suit is not brought against
errors.
the real party-in-interest, a motion to dismiss may be filed on the
ground that the complaint states no cause of action (Section 1(g),
I
Rule 16, Rules of Court).
Was it proper for the trial court to grant the Motion to Dismis filed
by the defendant inspite of explicit mandate against such action as Hence, the resolution of the dispute hinges upon the determination
of whether or not the private respondent is the real party-in-interest
contained in Section 17 of P.D. No. 946?
against whom the suit should be brought.
II

59
The private respondent bolsters his claim that he is not the real WHEREFORE, the petition is hereby DENIED. The decision dated
party-in-interest on Section 10 of Republic Act No. 3844 (Code of 20 June 1986 of the Intermediate Appellate Court is AFFIRMED.
Agrarian Reforms of the Philippines) which provides that:
No pronouncement as to costs.
. . . In the case the agricultural lessor sells, alienates or transfers the SO ORDERED.
legal possession of the landholding, the purchaser or transferee
thereof shall be subrogated to the rights and substituted to the
obligation of the agricultural lessor.
In effect, the private respondent is of the view that the Ministry of
Education, Culture and Sports, as donee, became the new lessor of
the agricultural lessee by operation of law and is therefore the real
party-in-interest against whom the claim for disturbance
compensation should be directed.
We agree with the contentions of the private respondent. The
petitioner should have impleaded the Ministry of Education, Culture
and Sports as the party-defendant for as stated in Roman Catholic
Archbishop of Manila v. Court of Appeals (198 SCRA 300 [1991]),
a donation, as a mode of acquiring ownership, results in an effective
transfer of title over the property from the donor to the donee and
once a donation is accepted, the donee becomes the absolute owner
of the property donated.
Under Article 428 of the New Civil Code, the owner has the right to
dispose of a thing without other limitations than those established
by law. As an incident of ownership therefore, there is nothing to
prevent a landowner from donating his naked title to the land.
However, the new owner must respect the rights of the tenant.
Section 7 of R.A. No. 3844, as amended (Code of Agrarian Reforms
of the Philippines) gives the agricultural lessee the right to work on
the landholding once the leasehold relationship is established. It also
entitles him to security of tenure on his landholding. He can only be
ejected by the court for cause. Time and again, this Court has
guaranteed the continuity and security of tenure of a tenant even in
cases of a mere transfer of legal possession. As elucidated in the
case of Bernardo v. Court of Appeals (168 SCRA 439 [1988]),
security of tenure is a legal concession to agricultural lessees which
they value as life itself and deprivation of their landholdings is
tantamount to deprivation of their only means of livelihood. Also,
under Section 10 of the same Act, the law explicitly provides that
the leasehold relation is not extinguished by the alienation or
transfer of the legal possession of the landholding. The only
instances when the agricultural leasehold relationship is
extinguished are found in Section 8, 28 and 36 of the Code of
Agrarian Reforms of the Philippines. The donation of the land did
not terminate the tenancy relationship. However, the donation itself
is valid.
Considering that the tenant in the case at bar is willing to accept
payment of disturbance compensation in exchange for his right to
cultivate the landholding in question, the real issue is who should
pay the compensation. We rule that the Ministry of Education,
Culture and Sports as the new owner cannot oust the petitioner from
the subject riceland and build a public high school thereon until
after there is payment of the disturbance compensation in
accordance with Section 36 (1) of R.A. No. 3844, as amended.
In view of the foregoing, we are of the opinion and so hold that the
trial court correctly dismissed the complaint for payment of
disturbance compensation because the private respondent is not the
real party-in-interest. And having arrived at this conclusion, we do
not deem it necessary to pass upon the other errors assigned by the
petitioner for as stated in Filamer Christian Institute v. Court of
Appeals (190 SCRA 485 [1990]), a person who was not impleaded
in the complaint could not be bound by the decision rendered
therein, for no man shall be affected by a proceeding to which he is
a stranger. The remedy then of the petitioner is to claim his
disturbance compensation from the new owner or whatever agency,
local or national, is in a position to pay for it.

60
[G.R. No. 126425. August 12, 1998]

tenancy tenure on any land sold if devoted to rice and corn culture,
defendants ejected the plaintiffs without court order, and therefore
POLICARPIO NISNISAN AND ERLINDA NISNISAN,plaintiffs were deprived of their only livelihood;
petitioners, vs. COURT OF APPEALS, PACITA MANCERA,
WENCESLAO MANCERA and SILVESTRE POLANCOS,3. That, in disregard of and to subvert PD No. 27, defendants
respondents.
induced plaintiff Policarpio Nisnisan to sign a prepared affidavit
DECISION
which he did not know nor understood the correct import purporting
MARTINEZ, J.:
that he has surrendered his tenancy holdings; that the execution of
said affidavit was without the knowledge, consent, and participation
This petition for review on certiorari filed under Rule 45 of the of his tenant spouse, Erlinda Nisnisan;
Revised Rules of Court assails the decision[1] of the Court of
Appeals in CA-G.R. CV No. 39416 affirming en toto the 4. That, despite that plaintiffs and defendants agreed that in case of
decision[2] of the Regional Trial Court (Branch 21) of Bansalan, sale or transfer of ownership of the tenanted portion the security of
Davao del Sur, in Civil Case No. XXI-5 (86), which dismissed tenure of the plaintiffs follows the land as established under PD. No.
petitioners complaint for reinstatement of tenancy holding filed 27, but that after the sale, the defendants persisted in ejecting the
against private respondents spouses Pacita Mancera and Wenceslao plaintiffs from said tenancy holdings; that despite plaintiffs availing
Mancera.
of the provisions of PD No. 1508, no settlement and/or conciliation
was reached in the Office of the Lupon Tagapayapa, as a result in
The facts as culled from the record are as follows:
case No. 70 a certification to file action has been issued;
Spouses Gavino and Florencia Nisnisan are the owners of a parcel 5. That, plaintiffs have been deprived of their income from said land
of land denominated as Lot No. 2510, Cad 275 located at Dolo, holdings as tenant thereof under PD No. 27; defendants therefore
Bansalan, Davao del Sur, with an area of 4.9774 hectares, covered are liable for damages:
by Original Certificate of Title No. (P-11676)-2151. Petitioner
Policarpio Nisnisan, son of Gavino Nisnisan, has been cultivating Traversing the allegation in the complaint with regard to the prayer
one hectare of the aforesaid land since 1961.
for reinstatement of tenancy holding of petitioners Nisnisan spouses,
which is the sole subject matter in this petition, the private
On April 1, 1976, Gavino Nisnisan and petitioner Policarpio respondents Mancera spouses countered that the Nisnisan spouses
Nisnisan entered into a leasehold tenancy contract[3] which have no cause of action, the latter having voluntarily surrendered
stipulates a sharing arrangement of 1/3:2/3 of the harvest, the bigger their landholding.[6]
share being given to the latter.
On June 25, 1992, the trial court rendered a decision dismissing the
On December 28, 1978, Gavino Nisnisan sold two hectares of their complaint ruling that the petitioners-spouses allegation of tenancy is
land, including the land tenanted by petitioners-spouses Policarpio repudiated by the affidavit executed by Gavino Nisnisan to the
and Erlinda Nisnisan, to private respondents-spouses Wenceslao effect that the subject land is not tenanted. The trial court
Mancera and Pacita H. Mancera.
ratiocinated in this wise:
As a result of the sale, petitioners-spouses were ousted from their As to the claim of reinstatement by Policarpio Nisnisan, it appears
landholding. Hence, on November 24, 1982, petitioners-spouses from the affidavit (Exhibit X for the Court) of Gavino Nisnisan
instituted an action[4] for reinstatement of tenancy holding against which was executed and filed with the Office of the Register of
private respondent spouses Wenceslao and Pacita Mancera before Deeds of Davao del Sur, and recorded as Entry No. 117718, per
the Court of Agrarian Relations (CAR) in Davao City. The case was memorandum of encumbrances of Original Certificate of Title No.
later transferred to the Regional Trial Court when the CAR was (P-11676)-2151 (Exhibit A/5-C) that the said land is not tenanted.
abolished. The said complaint was dismissed without prejudice on This claim therefore by no less than plaintiff Gavino Nisnisan, has
December 16, 1985.
totally shattered the claim of tenancy of Policarpio Nisnisan. A
fortiori therefore the claim for reinstatement has to fail.[7]
Sometime in 1983, Gavino Nisnisan demanded from the Mancera
spouses to repurchase the said land but the latter refused. Hence, on The above-quoted ruling of the trial court was affirmed by the
November 3, 1986, spouses Gavino and Florencia Nisnisan, respondent Court of Appeals in its Decision dated November 20,
together with the petitioners-spouses Policarpio and Erlinda 1995 which substantially adopted the trial courts findings, thus:
Nisnisan, filed a complaint with the Regional Trial Court for: (a)
repurchase of the subject land under the Public Land Act, (b) The Memorandum of Encumbrances of appellant Gavinos OCT No.
declaration of nullity of the instrument of sale and Transfer (P-11676)-2151 (Exhibits A to A-3) contain two entries of affidavit
Certificate of Title No. T-15954, (c) reinstatement of tenancy of non-tenancy. The first is Entry No. 72086 for Affidavit of Nonholding and (d) damages.[5] The complaint alleged among others, Tenancy under Justice Circular No. 31. The second Entry No.
117718 for Affidavit of Non-Tenancy executed by Gavino Nisnisan,
xxxxxxxxx
vendor. Also appellants-spouses Gavino and Florencia Nisnisan
executed a Joint Affidavit dated January 28, 1985 wherein they
FOURTH CAUSE OF ACTION
averred the following:
1. Plaintiffs herein are agricultural tenants-lessees under the 9. That it is not true that our son and his wife were our tenants in the
Provisions of PD No. 27 on a portion of one (1) hectare of that said land as they did not give any share to us nor did we ask for it
parcel of land sold by plaintiffs to the defendants by virtue of the and any semblance of tenancy they did have was only a ploy that
conveyance dated March 31, 1982; said tenanted portion is devoted did enable them to borrow under the Masagana 99 programs of the
and cultivated by tenants plaintiffs to lowland rice culture as shown government which they did ultimately failed to pay but which we
by an accomplished OTAC FORM No. 56-B with the land owner paid as parents if only to save our son from being prosecuted and
prior to the aforementioned sale;
jailed for estafa.[8]
2. That, despite the verbal agreement between defendants vendee Aggrieved by the Court of Appeals decision, petitioners-spouses
and plaintiffs tenants for plaintiffs herein to continue and cultivate now come to this Court on the sole issue of: Whether or not
their tenancy holdings in pursuant to PD No. 27 availing security of

61
petitioners Spouses Policarpio and Erlinda Nisnisan voluntarily
surrendered their tenancy holding.
xxxxxxxxxxxx
We find merit in the petition.

The above-quoted document evidences the leasehold tenancy

relationship between Gavino Nisnisan and petitioner Policarpio
The finding of the Court of Appeals that the petitioners-spouses are Nisnisan. It clearly shows that the subject land is agricultural; that
not tenants of the subject land holding is erroneous. While there are petitioner Policarpio Nisnisan is obligated to cultivate the same by
annotations in Gavino Nisnisans certificate of title (Entry No. 72086 planting rice thereon; and, that there is sharing of the harvests
for Affidavit of Non-Tenancy under Justice Circular No. 31 and between the said parties. It is clear that essential elements of
Entry No. 117718 for Affidavit of Non-Tenancy executed by Gavinotenancy relationship[10] are present in this case, namely:
Nisnisan) that the subject land is not tenanted, said annotations are
not conclusive proof of the real relationship between Gavino 1. the parties are the landowner and the tenant
Nisnisan and petitioner Policarpio Nisnisan and are not binding
upon the court. As we have ruled in Cuao vs. Court of Appeals,[9] 2. the subject matter is agricultural land
We believe and so hold that such annotation cannot be regarded as 3. there is consent
conclusive upon the courts of justice as to the legal nature and
incidents of the relationship between the landowner(s) in this case 4. the purpose is agricultural production
and private respondents. Firstly, the annotation serves basically as
notice to all persons of the existence of the Certification issued by 5. there is personal cultivation by the tenants
Mr. Eugenio Bernardo, but neither adds to the validity or
correctness of that certification nor converts a defective and invalid 6. there is sharing of harvests between parties
instrument into a valid one as between the parties. Secondly, the
certification issued by Mr. Eugenio Bernardo of the MAR (Ministry Significantly, this documentary evidence of leasehold tenancy
of Agrarian Reform) is very much like the certifications issued by relationship was never rebutted by the private respondents-spouses.
the Secretary of Agrarian Reform and other officials of the MinistryFurthermore, this leasehold tenancy contract cannot be defeated by
and later the Department of Agrarian Reform concerning the the aforementioned affidavit of non-tenancy executed by Gavino
existence of tenancy relationships in respect of agricultural lands Nisnisan, which is obviously self-serving.
from which persons, who claim to be tenants, are sought to be
ejected. It is well-settled that the findings of or certifications issued Private respondents likewise impliedly admitted in their answer to
by the Secretary of Agrarian Reform, or his authorized the complaint that petitioners-spouses are tenants when they alleged
representative, in a given locality concerning the presence or that petitioners-spouses have voluntarily surrendered the subject
absence of a tenancy relationship between the contending parties are landholding.[11] This brings us to the issue of whether or not
merely preliminary or provisional and not binding upon the courts. petitioners-spouses have indeed voluntarily surrendered the subject
(Underscoring Ours)
landholding. Upon perusal of the record of the case, we find private
respondents contention baseless. Other than their bare allegations,
Moreover, petitioners-spouses have sufficiently shown that they are private respondents failed to present any evidence to show that
the tenants of the spouses Gavino and Florencia Nisnisan as petitioners-spouses surrendered their landholding voluntarily after
evidenced by a document entitled Panagsabutan Sa Abang Sa Yuta the private respondents purchased the subject property. Moreover,
(Exhibit D), executed by Gavino Nisnisan and Policarpio Nisnisan the filing of the complaint for reinstatement of leasehold tenancy by
on April 1, 1976, acknowledged before the Municipal Trial Court petitioners-spouses against private respondents before the CAR
Judge Mariano C. Tupas of Bansalan, Davao del Sur, and registered militates against the private respondents claim that petitionersbefore the Municipal Treasurers Office, portions of which read:
spouses voluntarily surrendered their landholding to them.
xxxxxxxxxxxx

Under Section 8 of Republic Act No. 3844,[12] voluntary surrender,

as a mode of extinguishing agricultural leasehold tenancy relations,
2 Nga ang yuta nga giasoy sa itaas pagatamnan sa NAGA-ABANG must be convincingly and sufficiently proved by competent
SA YUTA ug humay x x x sa panahon sa ting-ulan ug humay x x x evidence. The tenants intention to surrender the landholding cannot
sa panahon sa ting-init sulod sa termino niining kasabutan, ubos sa be presumed, much less determined by mere implication.[13]
mga kondisyones nga mao;
Based on the foregoing disquisition, it is clear that petitionersxxxxxxxxxxxx
spouses are agricultural lessees and are therefore entitled to security
of tenure as mandated by Section 10 of Republic Act 3844:
4. Nga ang naasoy nga yuta pagaabangan ug x x x 15 ka bakid nga x
x x humay sa tag 50 kilos kada bakid para sa panuig, ug 15 ka bakid Section 10. Agricultural Leasehold Relation Not Extinguished by
nga x x x humay sa tag 50 kilos kada bakid para sa pangulilang x x Expiration of Period, etc.- The agricultural leasehold relation under
x;
this Code shall not be extinguished by mere expiration of the term
or period in a leasehold contract nor by the sale, alienation or
5. Nga ang abang para sa tuig tingtanum adto ibayad sa transfer of the legal possession of the landholding. In case the
NAGAPAABANG o sa iyang piniyalan sa sulod sa 3 ka adlaw agricultural lessor sells, alienates or transfers the legal possession of
sukad sa petsa sa ting-ani x x x ihatud sa balay sa nagpa-abang o the landholdings, the purchaser or transferee thereof shall be
kon kagustuhan sa NAGAPAABANG SA YUTA, mahimo iyang subrogated to the rights and substituted to the obligations of the
kuha-on ang abang sa petsa sa tinggiok x x x .
agricultural lessor. (Underscoring Ours)
6. Nga kon pananglitan, ang maong tanum madaut nga balor ug Thus, the agricultural leasehold relation cannot be extinguished by
75% tungod sa mga hinungdan nga dili tinuyo (fortuituos event or the mere expiration of the term or period in an agricultural leasehold
force majeure) ang NAGA-ABANG SA YUTA DILI mapugos sa contract nor by the sale, alienation or transfer of the legal possession
pagbayad sa gikasabutan abang alang nianang tuiga, apan of the landholding. He can only be ejected for cause[14], which,
kinahangalan pagbayaran niya kanang maong abang pinaagi sa data- however, is absent in the case at bar.
data sa sukad sa 50% (kuarta o humay sa kada ting-ani mag sugod
sa sunod nga ting tanum hangtud nga maimpas ang bayranan;

62
WHEREFORE, the Decision of the Court of Appeals dated
November 20, 1995 is hereby MODIFIED in that, petitioners- SO ORDERED.
spouses Policarpio and Erlinda Nisnisan are declared tenants and
AFFIRMED in all other respects.