G.R. No. 78742 July 14, 1989 Mother Earth. The sustaining soil.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D.
GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE,
CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA,
REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B.
MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO,
CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON
S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA,
HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC.,
Victorias Mill District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM,
HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT,
and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCENA and
ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES, respondents.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his
life on his way to Mycenae after performing his eleventh labor. The two wrestled mightily and
Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules' increasing amazement. Finally,
as they continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and could
never die as long as any part of his body was touching his Mother Earth. Thus forewarned,
Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed
him to death.
1 | JESSIE DELA PEA
powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental
forces of life and death, of men and women who, like Antaeus need the sustaining strength of
the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of
this precious resource among our people. But it is more than a slogan. Through the brooding
centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure
the well-being and economic security of all the people," 1 especially the less privileged. In 1973,
the new Constitution affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse
property ownership and profits." 2 Significantly, there was also the specific injunction to
"formulate and implement an agrarian reform program aimed at emancipating the tenant from
the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also
adopted one whole and separate Article XIII on Social Justice and Human Rights, containing
grandiose but undoubtedly sincere provisions for the uplift of the common people. These include
a call in the following words for the adoption by the State of an agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are landless,
to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural
lands, subject to such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or
equity considerations and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-
sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had
already been enacted by the Congress of the Philippines on August 8, 1963, in line with the
above-stated principles. This was substantially superseded almost a decade later by P.D. No.
27, which was promulgated on October 21, 1972, along with martial law, to provide for the
compulsory acquisition of private lands for distribution among tenant-farmers and to specify
maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust for
agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228,
declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the
valuation of still unvalued lands covered by the decree as well as the manner of their payment.
This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for
its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took over
legislative power from the President and started its own deliberations, including extensive public
hearings, on the improvement of the interests of farmers. The result, after almost a year of
spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988. This law, while
considerably changing the earlier mentioned enactments, nevertheless gives them suppletory
effect insofar as they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve common legal
questions, including serious challenges to the constitutionality of the several measures
mentioned above. They will be the subject of one common discussion and resolution, The
different antecedents of each case will require separate treatment, however, and will first be
explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and
R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by
petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and
owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands
by E.O. No. 228 as qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of
separation of powers, due process, equal protection and the constitutional limitation that no
private property shall be taken for public use without just compensation.
They contend that President Aquino usurped legislative power when she promulgated E.O. No.
228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution,
for failure to provide for retention limits for small landowners. Moreover, it does not conform to
Article VI, Section 25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners argue that the same
may be made only by a court of justice and not by the President of the Philippines. They invoke
the recent cases of EPZA v. Dulay 5and Manotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in cash and not in the
form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also deprives
the petitioners of their property rights as protected by due process. The equal protection clause
is also violated because the order places the burden of solving the agrarian problems on the
owners only of agricultural lands. No similar obligation is imposed on the owners of other
properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the
owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so
violated due process. Worse, the measure would not solve the agrarian problem because even
the small farmers are deprived of their lands and the retention rights guaranteed by the
Constitution.
2 | JESSIE DELA PEA
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the
earlier cases of Chavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn
Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The determination of
just compensation by the executive authorities conformably to the formula prescribed under the
questioned order is at best initial or preliminary only. It does not foreclose judicial intervention
whenever sought or warranted. At any rate, the challenge to the order is premature because no
valuation of their property has as yet been made by the Department of Agrarian Reform. The
petitioners are also not proper parties because the lands owned by them do not exceed the
maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for
retention limits on tenanted lands and that in any event their petition is a class suit brought in
behalf of landowners with landholdings below 24 hectares. They maintain that the determination
of just compensation by the administrative authorities is a final ascertainment. As for the cases
invoked by the public respondent, the constitutionality of P.D. No. 27 was merely assumed
in Chavez, while what was decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos.
228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657.
Nevertheless, this statute should itself also be declared unconstitutional because it suffers from
substantially the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of
a 1. 83- hectare land, who complained that the DAR was insisting on the implementation of P.D.
No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant on
the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations
in the basic amended petition that the above- mentioned enactments have been impliedly
repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias,
Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of
1,400 planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and
E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program
as decreed by the Constitution belongs to Congress and not the President. Although they agree
that the President could exercise legislative power until the Congress was convened, she could
do so only to enact emergency measures during the transition period. At that, even assuming
that the interim legislative power of the President was properly exercised, Proc. No. 131 and
E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian
Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the
estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall
be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and
Receipts of sale of ill-gotten wealth received through the Presidential Commission on Good
Government and such other sources as government may deem appropriate. The amounts
collected and accruing to this special fund shall be considered automatically appropriated for the
purpose authorized in this Proclamation the amount appropriated is in futuro, not in esse. The
money needed to cover the cost of the contemplated expropriation has yet to be raised and
cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just compensation
as it is traditionally understood, i.e., with money and in full, but no such payment is contemplated
in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank
of the Philippines "shall compensate the landowner in an amount to be established by the
government, which shall be based on the owner's declaration of current fair market value as
provided in Section 4 hereof, but subject to certain controls to be defined and promulgated by
the Presidential Agrarian Reform Council." This compensation may not be paid fully in money
but in any of several modes that may consist of part cash and part bond, with interest, maturing
periodically, or direct payment in cash or bond as may be mutually agreed upon by the
beneficiary and the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made to make
a careful study of the sugar planters' situation. There is no tenancy problem in the sugar areas
that can justify the application of the CARP to them. To the extent that the sugar planters have
been lumped in the same legislation with other farmers, although they are a separate group with
problems exclusively their own, their right to equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane
Planters (NASP) which claims a membership of at least 20,000 individual sugar planters all over
the country. On September 10, 1987, another motion for intervention was filed, this time by
Manuel Barcelona, et al., representing coconut and riceland owners. Both motions were granted
by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and
that, in any event, the appropriation is invalid because of uncertainty in the amount appropriated.
Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum
authorized amount. This is not allowed. Furthermore, the stated initial amount has not been
certified to by the National Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and
convincing evidence the necessity for the exercise of the powers of eminent domain, and the
violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the expropriation
of the said land for an amount equal to the government assessor's valuation of the land for tax
purposes. On the other hand, if the landowner declares his own valuation he is unjustly required
to immediately pay the corresponding taxes on the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the
expropriation as explained in the "whereas" clauses of the Proclamation and submits that,
contrary to the petitioner's contention, a pilot project to determine the feasibility of CARP and a
general survey on the people's opinion thereon are not indispensable prerequisites to its
promulgation.
3 | JESSIE DELA PEA
On the alleged violation of the equal protection clause, the sugar planters have failed to show
that they belong to a different class and should be differently treated. The Comment also
suggests the possibility of Congress first distributing public agricultural lands and scheduling the
expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition
would be premature.
The public respondent also points out that the constitutional prohibition is against the payment of
public money without the corresponding appropriation. There is no rule that only money already
in existence can be the subject of an appropriation law. Finally, the earmarking of fifty billion
pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually the
maximum sum appropriated. The word "initial" simply means that additional amounts may be
appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf,
assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised,
Serrano contends that the measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in
the title;
(3) The power of the President to legislate was terminated on July 2, 1987;
and
(4) The appropriation of a P50 billion special fund from the National
Treasury did not originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of
due process and the requirement for just compensation, placed his landholding under the
coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to
the private respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding
under Operation Land transfer and asked for the recall and cancellation of the Certificates of
Land Transfer in the name of the private respondents. He claims that on December 24, 1986, his
petition was denied without hearing. On February 17, 1987, he filed a motion for reconsideration,
which had not been acted upon when E.O. Nos. 228 and 229 were issued. These orders
rendered his motion moot and academic because they directly effected the transfer of his land to
the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the
Philippines.
 (2) The said executive orders are violative of the constitutional provision that
no private property shall be taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for
under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress
convened is anomalous and arbitrary, besides violating the doctrine of separation of powers.
The legislative power granted to the President under the Transitory Provisions refers only to
emergency measures that may be promulgated in the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due process of
law and to the retention of his small parcels of riceholding as guaranteed under Article XIII,
Section 4 of the Constitution. He likewise argues that, besides denying him just compensation
for his land, the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after October
21, 1972 shall be considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the inclusion
of even small landowners in the program along with other landowners with lands consisting of
seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the motion
for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity
of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section
6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first Congress is
convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on
October 21. 1972, the tenant-farmer of agricultural land was deemed the owner of the land he
was tilling. The leasehold rentals paid after that date should therefore be considered
amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed was
resolved on December 14, 1987. An appeal to the Office of the President would be useless with
the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public
respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice
and corn lands not exceeding seven hectares as long as they are cultivating or intend to
cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by
tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
4 | JESSIE DELA PEA
No tenant-farmer in agricultural lands primarily devoted to rice and corn
shall be ejected or removed from his farmholding until such time as the
respective rights of the tenant- farmers and the landowner shall have been
determined in accordance with the rules and regulations implementing P.D.
No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of
retention because the Department of Agrarian Reform has so far not issued the implementing
rules required under the above-quoted decree. They therefore ask the Court for a writ of
mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474
removing any right of retention from persons who own other agricultural lands of more than 7
hectares in aggregate area or lands used for residential, commercial, industrial or other
purposes from which they derive adequate income for their family. And even assuming that the
petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already
been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by
Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No.
11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No.
18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and
Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing
for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their
Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the
corresponding applications for retention under these measures, the petitioners are now barred
from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the
issuance of the implementing rules, assuming this has not yet been done, involves the exercise
of discretion which cannot be controlled through the writ of mandamus. This is especially true if
this function is entrusted, as in this case, to a separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to them
because they do not own more than seven hectares of agricultural land. Moreover, assuming
arguendo that the rules were intended to cover them also, the said measures are nevertheless
not in force because they have not been published as required by law and the ruling of this Court
in Tanada v. Tuvera. 10 As for LOI 474, the same is ineffective for the additional reason that a
mere letter of instruction could not have repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to annul the
acts of either the legislative or the executive or of both when not conformable to the fundamental
law. This is the reason for what some quarters call the doctrine of judicial supremacy. Even so,
this power is not lightly assumed or readily exercised. The doctrine of separation of powers
imposes upon the courts a proper restraint, born of the nature of their functions and of their
respect for the other departments, in striking down the acts of the legislative and the executive
as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain.
The theory is that before the act was done or the law was enacted, earnest studies were made
by Congress or the President, or both, to insure that the Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of the
Supreme Court who took part in the deliberations and voted on the issue during their session en
banc. 11 And as established by judge made doctrine, the Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a judicial inquiry into
such a question are first satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the constitutional question must have
been opportunely raised by the proper party, and the resolution of the question is unavoidably
necessary to the decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases before us, we
hold that the same is satisfied by the petitioners and intervenors because each of them has
sustained or is in danger of sustaining an immediate injury as a result of the acts or measures
complained of. 13 And even if, strictly speaking, they are not covered by the definition, it is still
within the wide discretion of the Court to waive the requirement and so remove the impediment
to its addressing and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino although
they were invoking only an indirect and general interest shared in common with the public. The
Court dismissed the objection that they were not proper parties and ruled that "the
transcendental importance to the public of these cases demands that they be settled promptly
and definitely, brushing aside, if we must, technicalities of procedure." We have since then
applied this exception in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid
when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be
the Constitution as God and its conscience give it the light to probe its meaning and discover its
purpose. Personal motives and political considerations are irrelevancies that cannot influence its
decision. Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to
"make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of
these departments, or of any public official, betray the people's will as expressed in the
Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional boundaries, it does
not assert any superiority over the other departments; it does not in reality
nullify or invalidate an act of the Legislature, but only asserts the solemn
and sacred obligation assigned to it by the Constitution to determine
conflicting claims of authority under the Constitution and to establish for the
parties in an actual controversy the rights which that instrument secures and
guarantees to them. This is in truth all that is involved in what is termed
"judicial supremacy" which properly is the power of judicial review under the
Constitution. 16
5 | JESSIE DELA PEA
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial
law has already been sustained in Gonzales v. Estrella and we find no reason to modify or
reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and
E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of
the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the Congress
of the Philippines was formally convened and took over legislative power from her. They are not
"midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued on
July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued
on July 22, 1987. Neither is it correct to say that these measures ceased to be valid when she
lost her legislative power for, like any statute, they continue to be in force unless modified or
repealed by subsequent law or declared invalid by the courts. A statute does not ipso
facto become inoperative simply because of the dissolution of the legislature that enacted it. By
the same token, President Aquino's loss of legislative power did not have the effect of
invalidating all the measures enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they shall be
suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed, some
portions of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No.
131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the CARP
Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not conform to
the requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc.
No. 131 is not an appropriation measure even if it does provide for the creation of said fund, for
that is not its principal purpose. An appropriation law is one the primary and specific purpose of
which is to authorize the release of public funds from the treasury. 19 The creation of the fund is
only incidental to the main objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section
25(4) of Article VI, are not applicable. With particular reference to Section 24, this obviously
could not have been complied with for the simple reason that the House of Representatives,
which now has the exclusive power to initiate appropriation measures, had not yet been
convened when the proclamation was issued. The legislative power was then solely vested in
the President of the Philippines, who embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be
invalidated because they do not provide for retention limits as required by Article XIII, Section 4
of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in
Section 6 of the law, which in fact is one of its most controversial provisions. This section
declares:
 Retention Limits. Except as otherwise provided in this Act, no person
may own or retain, directly or indirectly, any public or private agricultural
land, the size of which shall vary according to factors governing a viable
family-sized farm, such as commodity produced, terrain, infrastructure, and
soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner
exceed five (5) hectares. Three (3) hectares may be awarded to each child
of the landowner, subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the land or directly
managing the farm; Provided, That landowners whose lands have been
covered by Presidential Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder, further, That original homestead
grantees or direct compulsory heirs who still own the original homestead at
the time of the approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only
one subject, to be expressed in its title, deserves only short attention. It is settled that the title of
the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in
the text are relevant to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance, by
whatever name it was called, had the force and effect of law because it came from President
Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R.
No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a
letter of instruction. The important thing is that it was issued by President Marcos, whose word
was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to comply
with the requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless
published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not
have any force and effect if they were among those enactments successfully challenged in that
case. LOI 474 was published, though, in the Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of
mandamus cannot issue to compel the performance of a discretionary act, especially by a
specific department of the government. That is true as a general proposition but is subject to one
important qualification. Correctly and categorically stated, the rule is that mandamus will lie to
compel the discharge of the discretionary duty itself but not to control the discretion to be
exercised. In other words, mandamus can issue to require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty
imposed by law, the courts will intervene by the extraordinary legal remedy
of mandamus to compel action. If the duty is purely ministerial, the courts
will require specific action. If the duty is purely discretionary, the courts
by mandamus will require action only. For example, if an inferior court,
public official, or board should, for an unreasonable length of time, fail to
decide a particular question to the great detriment of all parties concerned,
or a court should refuse to take jurisdiction of a cause when the law clearly
gave it jurisdiction mandamus will issue, in the first case to require a
decision, and in the second to require that jurisdiction be taken of the
cause. 22
6 | JESSIE DELA PEA
And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy
and adequate remedy available from the administrative authorities, resort to the courts may still
be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent domain
that logically preclude the application of both powers at the same time on the same subject. In
the case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all
municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value,
the Court held that the power being exercised was eminent domain because the property
involved was wholesome and intended for a public use. Property condemned under the police
power is noxious or intended for a noxious purpose, such as a building on the verge of collapse,
which should be demolished for the public safety, or obscene materials, which should be
destroyed in the interest of public morals. The confiscation of such property is not compensable,
unlike the taking of property under the power of expropriation, which requires the payment of just
compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the
police power in a famous aphorism: "The general rule at least is that while property may be
regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The
regulation that went "too far" was a law prohibiting mining which might cause the subsidence of
structures for human habitation constructed on the land surface. This was resisted by a coal
company which had earlier granted a deed to the land over its mine but reserved all mining
rights thereunder, with the grantee assuming all risks and waiving any damage claim. The Court
held the law could not be sustained without compensating the grantor. Justice Brandeis filed a
lone dissent in which he argued that there was a valid exercise of the police power. He said:
Every restriction upon the use of property imposed in the exercise of the
police power deprives the owner of some right theretofore enjoyed, and is,
in that sense, an abridgment by the State of rights in property without
making compensation. But restriction imposed to protect the public health,
safety or morals from dangers threatened is not a taking. The restriction
here in question is merely the prohibition of a noxious use. The property so
restricted remains in the possession of its owner. The state does not
appropriate it or make any use of it. The state merely prevents the owner
from making a use which interferes with paramount rights of the public.
Whenever the use prohibited ceases to be noxious as it may because of
further changes in local or social conditions the restriction will have to be
removed and the owner will again be free to enjoy his property as
heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police power and
the power of eminent domain, with the latter being used as an implement of the former like the
power of taxation. The employment of the taxing power to achieve a police purpose has long
been accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University of
Illinois College of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365,
which sustained a zoning law under the police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the Police
and eminent domain powers on different planets. Generally speaking, they
viewed eminent domain as encompassing public acquisition of private
 property for improvements that would be available for public use," literally
construed. To the police power, on the other hand, they assigned the less
intrusive task of preventing harmful externalities a point reflected in the
Euclid opinion's reliance on an analogy to nuisance law to bolster its support
of zoning. So long as suppression of a privately authored harm bore a
plausible relation to some legitimate "public purpose," the pertinent measure
need have afforded no compensation whatever. With the progressive
growth of government's involvement in land use, the distance between the
two powers has contracted considerably. Today government often employs
eminent domain interchangeably with or as a useful complement to the
police power-- a trend expressly approved in the Supreme Court's 1954
decision in Berman v. Parker, which broadened the reach of eminent
domain's "public use" test to match that of the police power's standard of
"public purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted areas in
the District of Columbia as a proper exercise of the police power. On the role of eminent domain
in the attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's Capital
should be beautiful as well as sanitary, there is nothing in the Fifth
Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it
through the exercise of eminent domain is clear.
28
For the power of eminent domain is merely the means to the end.
29
In Penn Central Transportation Co. v. New York City, decided by a 6-3 vote in 1978, the U.S
Supreme Court sustained the respondent's Landmarks Preservation Law under which the
owners of the Grand Central Terminal had not been allowed to construct a multi-story office
building over the Terminal, which had been designated a historic landmark. Preservation of the
landmark was held to be a valid objective of the police power. The problem, however, was that
the owners of the Terminal would be deprived of the right to use the airspace above it although
other landowners in the area could do so over their respective properties. While insisting that
there was here no taking, the Court nonetheless recognized certain compensatory rights
accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused
by the regulation. This "fair compensation," as he called it, was explained by Prof. Costonis in
this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central was
authorized to transfer to neighboring properties the authorized but unused rights accruing to the
site prior to the Terminal's designation as a landmark the rights which would have been
exhausted by the 59-story building that the city refused to countenance atop the Terminal.
Prevailing bulk restrictions on neighboring sites were proportionately relaxed, theoretically
enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to
others the right to construct larger, hence more profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of compensable
taking is concerned. To the extent that the measures under challenge merely prescribe retention
limits for landowners, there is an exercise of the police power for the regulation of private
7 | JESSIE DELA PEA
property in accordance with the Constitution. But where, to carry out such regulation, it becomes
necessary to deprive such owners of whatever lands they may own in excess of the maximum
area allowed, there is definitely a taking under the power of eminent domain for which payment
of just compensation is imperative. The taking contemplated is not a mere limitation of the use of
the land. What is required is the surrender of the title to and the physical possession of the said
excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is
definitely an exercise not of the police power but of the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several
measures before us are challenged as violative of the due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits
are prescribed has already been discussed and dismissed. It is noted that although they excited
many bitter exchanges during the deliberation of the CARP Law in Congress, the retention limits
finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore
do not discuss them here. The Court will come to the other claimed violations of due process in
connection with our examination of the adequacy of just compensation as required under the
power of expropriation.
The argument of the small farmers that they have been denied equal protection because of the
absence of retention limits has also become academic under Section 6 of R.A. No. 6657.
Significantly, they too have not questioned the area of such limits. There is also the complaint
that they should not be made to share the burden of agrarian reform, an objection also made by
the sugar planters on the ground that they belong to a particular class with particular interests of
their own. However, no evidence has been submitted to the Court that the requisites of a valid
classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other in
certain particulars and different from each other in these same particulars. 31 To be valid, it must
conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must
be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and
(4) it must apply equally to all the members of the class. 32 The Court finds that all these
requisites have been met by the measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be treated alike
both as to the rights conferred and the liabilities imposed. 33 The petitioners have not shown that
they belong to a different class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the burden of
implementing land reform must be rejected. There is a substantial distinction between these two
classes of owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect by the courts of justice
except only where its discretion is abused to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police power only
if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests
of the public generally as distinguished from those of a particular class require the interference
of the State and, no less important, the means employed are reasonably necessary for the
attainment of the purpose sought to be achieved and not unduly oppressive upon
individuals. 34 As the subject and purpose of agrarian reform have been laid down by the
Constitution itself, we may say that the first requirement has been satisfied. What remains to be
examined is the validity of the method employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the individual are
concerned, the end does not justify the means. It is not enough that there be a valid objective; it
is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere
expediency will not excuse constitutional shortcuts. There is no question that not even the
strongest moral conviction or the most urgent public need, subject only to a few notable
exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a,
person invoking a right guaranteed under Article III of the Constitution is a majority of one even
as against the rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of Article III of the
Constitution. With regard to his property, the owner enjoys the added protection of Section 9,
which reaffirms the familiar rule that private property shall not be taken for public use without just
compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly
acquire private lands intended for public use upon payment of just
compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the
purchaser, in which case an ordinary deed of sale may be agreed upon by
the parties. 35 It is only where the owner is unwilling to sell, or cannot accept
the price or other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the paramount authority of the
State over the interests of the property owner. Private rights must then yield
to the irresistible demands of the public interest on the time-honored
justification, as in the case of the police power, that the welfare of the
people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute (as
indeed no power is absolute). The limitation is found in the constitutional injunction that "private
property shall not be taken for public use without just compensation" and in the abundant
jurisprudence that has evolved from the interpretation of this principle. Basically, the
requirements for a proper exercise of the power are: (1) public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State
should first distribute public agricultural lands in the pursuit of agrarian reform instead of
immediately disturbing property rights by forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural lands." In any event, the
decision to redistribute private agricultural lands in the manner prescribed by the CARP was
made by the legislative and executive departments in the exercise of their discretion. We are not
justified in reviewing that discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments when
they decide what is known as the political question. As explained by Chief Justice Concepcion in
the case of Taada v. Cuenco: 36
8 | JESSIE DELA PEA
The term "political question" connotes what it means in ordinary parlance,
namely, a question of policy. It refers to "those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity; or
in regard to which full discretionary authority has been delegated to the
legislative or executive branch of the government." It is concerned with
issues dependent upon the wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted with the enlargement of
judicial power, which now includes the authority of the courts "to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government." 37 Even so, this should not be construed as a
license for us to reverse the other departments simply because their views may not coincide with
ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first
provided for, while also continuing apace under the Public Land Act and other cognate laws).
The Court sees no justification to interpose its authority, which we may assert only if we believe
that the political decision is not unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the
entire St. Mary's river between the American bank and the international line,
as well as all of the upland north of the present ship canal, throughout its
entire length, was "necessary for the purpose of navigation of said waters,
and the waters connected therewith," that determination is conclusive in
condemnation proceedings instituted by the United States under that Act,
and there is no room for judicial review of the judgment of Congress ... .
As earlier observed, the requirement for public use has already been settled for us by the
Constitution itself No less than the 1987 Charter calls for agrarian reform, which is the reason
why private agricultural lands are to be taken from their owners, subject to the prescribed
maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No.
6657 are only an elaboration of the constitutional injunction that the State adopt the necessary
measures "to encourage and undertake the just distribution of all agricultural lands to enable
farmers who are landless to own directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more
thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from its owner
by the expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the
taker's gain but the owner's loss. 40 The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the property to be
taken shall be real, substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions contemplate more than a
mere regulation of the use of private lands under the police power. We deal here with an actual
taking of private agricultural lands that has dispossessed the owners of their property and
deprived them of all its beneficial use and enjoyment, to entitle them to the just compensation
mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the
following conditions concur: (1) the expropriator must enter a private property; (2) the entry must
be for more than a momentary period; (3) the entry must be under warrant or color of legal
authority; (4) the property must be devoted to public use or otherwise informally appropriated or
injuriously affected; and (5) the utilization of the property for public use must be in such a way as
to oust the owner and deprive him of beneficial enjoyment of the property. All these requisites
are envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its
taking possession of the condemned property, as "the compensation is a public charge, the
good faith of the public is pledged for its payment, and all the resources of taxation may be
employed in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of
rejection or no response from the landowner, upon the deposit with an
accessible bank designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to
issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the redistribution of the
land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is
entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference
is made to Section 16(d), which provides that in case of the rejection or disregard by the owner
of the offer of the government to buy his land-
... the DAR shall conduct summary administrative proceedings to determine
the compensation for the land by requiring the landowner, the LBP and
other interested parties to submit evidence as to the just compensation for
the land, within fifteen (15) days from the receipt of the notice. After the
expiration of the above period, the matter is deemed submitted for decision.
The DAR shall decide the case within thirty (30) days after it is submitted for
decision.
To be sure, the determination of just compensation is a function addressed to the courts of
justice and may not be usurped by any other branch or official of the government. EPZA v.
Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing
that the just compensation for property under expropriation should be either the assessment of
the property by the government or the sworn valuation thereof by the owner, whichever was
lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E.
Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited decrees
constitutes impermissible encroachment on judicial prerogatives. It tends to
render this Court inutile in a matter which under this Constitution is reserved
to it for final determination.
9 | JESSIE DELA PEA
Thus, although in an expropriation proceeding the court technically would
still have the power to determine the just compensation for the property,
following the applicable decrees, its task would be relegated to simply
stating the lower value of the property as declared either by the owner or the
assessor. As a necessary consequence, it would be useless for the court to
appoint commissioners under Rule 67 of the Rules of Court. Moreover, the
need to satisfy the due process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial proceeding was not
had before the actual taking. However, the strict application of the decrees
during the proceedings would be nothing short of a mere formality or
charade as the court has only to choose between the valuation of the owner
and that of the assessor, and its choice is always limited to the lower of the
two. The court cannot exercise its discretion or independence in determining
what is just or fair. Even a grade school pupil could substitute for the judge
insofar as the determination of constitutional just compensation is
concerned.
xxx
In the present petition, we are once again confronted with the same
question of whether the courts under P.D. No. 1533, which contains the
same provision on just compensation as its predecessor decrees, still have
the power and authority to determine just compensation, independent of
what is stated by the decree and to this effect, to appoint commissioners for
such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to prove that
the valuation in the tax documents is unfair or wrong. And it is repulsive to
the basic concepts of justice and fairness to allow the haphazard work of a
minor bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the
property, after evidence and arguments pro and con have been presented,
and after all factors and considerations essential to a fair and just
determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the
arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the
proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But
more importantly, the determination of the just compensation by the DAR is not by any means
final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly
provides:
Any party who disagrees with the decision may bring the matter to the court
of proper jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties (a) Market interest rates aligned
concerned. Otherwise, the courts of justice will still have the right to review with finality the said with 91-day treasury bill rates. Ten
determination in the exercise of what is admittedly a judicial function. percent (10%) of the face value of
the bonds shall mature every year
from the date of issuance until the
The second and more serious objection to the provisions on just compensation is not as easily
tenth (10th) year: Provided, That
resolved.
should the landowner choose to
forego the cash portion, whether in
This refers to Section 18 of the CARP Law providing in full as follows: full or in part, he shall be paid
correspondingly in LBP bonds;
SEC. 18. Valuation and Mode of Compensation. The LBP shall
compensate the landowner in such amount as may be agreed upon by the (b) Transferability and negotiability.
landowner and the DAR and the LBP, in accordance with the criteria Such LBP bonds may be used by
provided for in Sections 16 and 17, and other pertinent provisions hereof, or the landowner, his successors-in-
as may be finally determined by the court, as the just compensation for the interest or his assigns, up to the
land. amount of their face value, for any
of the following:
The compensation shall be paid in one of the following modes, at the option
of the landowner: (i) Acquisition of land or other real
properties of the government,
including assets under the Asset
(1) Cash payment, under the following terms and conditions: Privatization Program and other
assets foreclosed by government
(a) For lands above fifty (50) financial institutions in the same
hectares, insofar as the excess province or region where the lands
hectarage is concerned Twenty- for which the bonds were paid are
five percent (25%) cash, the situated;
balance to be paid in government
financial instruments negotiable at
(ii) Acquisition of shares of stock of
any time. government-owned or controlled
corporations or shares of stock
(b) For lands above twenty-four owned by the government in
(24) hectares and up to fifty (50) private corporations;
hectares Thirty percent (30%)
cash, the balance to be paid in (iii) Substitution for surety or bail
government financial instruments bonds for the provisional release of
negotiable at any time.
accused persons, or for
performance bonds;
(c) For lands twenty-four (24)
hectares and below Thirty-five
(iv) Security for loans with any
percent (35%) cash, the balance to government financial institution,
be paid in government financial provided the proceeds of the loans
instruments negotiable at any time.
shall be invested in an economic
enterprise, preferably in a small
(2) Shares of stock in government-owned or controlled corporations, LBP and medium- scale industry, in the
preferred shares, physical assets or other qualified investments in same province or region as the
accordance with guidelines set by the PARC; land for which the bonds are paid;

(3) Tax credits which can be used against any tax liability; (v) Payment for various taxes and
fees to government: Provided, That
the use of these bonds for these
(4) LBP bonds, which shall have the following features: purposes will be limited to a certain

10 | JESSIE DELA PEA

 percentage of the outstanding
balance of the financial
instruments; Provided, further, That
the PARC shall determine the
percentages mentioned above;
(vi) Payment for tuition fees of the
immediate family of the original
bondholder in government
universities, colleges, trade
schools, and other institutions;
(vii) Payment for fees of the
immediate family of the original
bondholder in government
hospitals; and
(viii) Such other uses as the PARC
may from time to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional
insofar as it requires the owners of the expropriated properties to accept just compensation
therefor in less than money, which is the only medium of payment allowed. In support of this
contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the
property expropriated is entitled to a just compensation, which should be
neither more nor less, whenever it is possible to make the assessment, than
the money equivalent of said property. Just compensation has always been
understood to be the just and complete equivalent of the loss which the
owner of the thing expropriated has to suffer by reason of the expropriation
. 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the value
of the property at the time of its taking. Anything beyond that is more, and
anything short of that is less, than just compensation. It means a fair and full
equivalent for the loss sustained, which is the measure of the indemnity, not
whatever gain would accrue to the expropriating entity. The market value of
the land taken is the just compensation to which the owner of condemned
property is entitled, the market value being that sum of money which a
person desirous, but not compelled to buy, and an owner, willing, but not
compelled to sell, would agree on as a price to be given and received for
such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been derived, the
weight of authority is also to the effect that just compensation for property expropriated is
payable only in money and not otherwise. Thus
11 | JESSIE DELA PEA
The medium of payment of compensation is ready money or cash. The
condemnor cannot compel the owner to accept anything but money, nor can
the owner compel or require the condemnor to pay him on any other basis
than the value of the property in money at the time and in the manner
prescribed by the Constitution and the statutes. When the power of eminent
domain is resorted to, there must be a standard medium of payment,
binding upon both parties, and the law has fixed that standard as money in
cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of
48
things, be regarded as a reliable and constant standard of compensation.
"Just compensation" for property taken by condemnation means a fair
equivalent in money, which must be paid at least within a reasonable time
after the taking, and it is not within the power of the Legislature to substitute
for such payment future obligations, bonds, or other valuable
advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been paid in
the past solely in that medium. However, we do not deal here with the traditional excercise of the
power of eminent domain. This is not an ordinary expropriation where only a specific property of
relatively limited area is sought to be taken by the State from its owner for a specific and
perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of whatever
kind as long as they are in excess of the maximum retention limits allowed their owners. This
kind of expropriation is intended for the benefit not only of a particular community or of a small
segment of the population but of the entire Filipino nation, from all levels of our society, from the
impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole
territory of this country but goes beyond in time to the foreseeable future, which it hopes to
secure and edify with the vision and the sacrifice of the present generation of Filipinos.
Generations yet to come are as involved in this program as we are today, although hopefully
only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow
through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the
Constitution itself that has ordained this revolution in the farms, calling for "a just distribution"
among the farmers of lands that have heretofore been the prison of their dreams but can now
become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us, we
estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of
P50 billion initially appropriated, which is already staggering as it is by our present standards.
Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they called for
agrarian reform as a top priority project of the government. It is a part of this assumption that
when they envisioned the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less conventional if more
practical method. There can be no doubt that they were aware of the financial limitations of the
government and had no illusions that there would be enough money to pay in cash and in full for
the lands they wanted to be distributed among the farmers. We may therefore assume that their
intention was to allow such manner of payment as is now provided for by the CARP Law,
particularly the payment of the balance (if the owner cannot be paid fully with money), or indeed
of the entire amount of the just compensation, with other things of value. We may also suppose
that what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27,
which was the law in force at the time they deliberated on the new Charter and with which they
presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical
agreement among the members regarding the meaning to be given the concept of just
compensation as applied to the comprehensive agrarian reform program being contemplated.
There was the suggestion to "fine tune" the requirement to suit the demands of the project even
as it was also felt that they should "leave it to Congress" to determine how payment should be
made to the landowner and reimbursement required from the farmer-beneficiaries. Such
innovations as "progressive compensation" and "State-subsidized compensation" were also
proposed. In the end, however, no special definition of the just compensation for the lands to be
expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the assumptions
we are making of the general sentiments and intention of the members on the content and
manner of the payment to be made to the landowner in the light of the magnitude of the
expenditure and the limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and manner of the just
compensation provided for in the afore- quoted Section 18 of the CARP Law is not violative of
the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced
our decision on this issue, but after all this Court is not a cloistered institution removed from the
realities and demands of society or oblivious to the need for its enhancement. The Court is as
acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after
the frustrations and deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization and resurrecting the
spectre of discontent and dissent in the restless countryside. That is not in our view the intention
of the Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to be made
fully in money, we find further that the proportion of cash payment to the other things of value
constituting the total payment, as determined on the basis of the areas of the lands expropriated,
is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the
payment in money, primarily because the small landowner will be needing it more than the big
landowners, who can afford a bigger balance in bonds and other things of value. No less
importantly, the government financial instruments making up the balance of the payment are
"negotiable at any time." The other modes, which are likewise available to the landowner at his
option, are also not unreasonable because payment is made in shares of stock, LBP bonds,
other properties or assets, tax credits, and other things of value equivalent to the amount of just
compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and small,
not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is
devoutly hoped that these countrymen of ours, conscious as we know they are of the need for
their forebearance and even sacrifice, will not begrudge us their indispensable share in the
12 | JESSIE DELA PEA
attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like
the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does not
seem to be viable any more as it appears that Section 4 of the said Order has been superseded
by Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the
earlier measure but does not provide, as the latter did, that in case of failure or refusal to register
the land, the valuation thereof shall be that given by the provincial or city assessor for tax
purposes. On the contrary, the CARP Law says that the just compensation shall be ascertained
on the basis of the factors mentioned in its Section 17 and in the manner provided for in Section
16.
The last major challenge to CARP is that the landowner is divested of his property even before
actual payment to him in full of just compensation, in contravention of a well- accepted principle
of eminent domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from the owner
to the expropriator only upon full payment of the just compensation. Jurisprudence on this
settled principle is consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the condemnor
until the judgment fixing just compensation is entered and paid, but the condemnor's title relates
back to the date on which the petition under the Eminent Domain Act, or the commissioner's
report under the Local Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is complete at the time of
entry, title to the property taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to
property does not pass to the condemnor until just compensation had actually been made. In
fact, the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v.
McLure, 54 it was held that "actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the State" albeit "not to the
appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York said
that the construction upon the statutes was that the fee did not vest in the State until the
payment of the compensation although the authority to enter upon and appropriate the land was
complete prior to the payment. Kennedy further said that "both on principle and authority the rule
is ... that the right to enter on and use the property is complete, as soon as the property is
actually appropriated under the authority of law for a public use, but that the title does not pass
from the owner without his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford absolute reassurance that no
piece of land can be finally and irrevocably taken from an unwilling owner
until compensation is paid ... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21,
1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a
family-sized farm except that "no title to the land owned by him was to be actually issued to him
unless and until he had become a full-fledged member of a duly recognized farmers'
cooperative." It was understood, however, that full payment of the just compensation also had to
be made first, conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October
21, 1972 of the land they acquired by virtue of Presidential Decree No. 27.
(Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said decree, after proof of
full-fledged membership in the farmers' cooperatives and full payment of just compensation.
Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease
rentals paid to the landowner by the farmer- beneficiary after October 21, 1972 (pending transfer
of ownership after full payment of just compensation), shall be considered as advance payment
for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to
the government on receipt by the landowner of the corresponding payment or the deposit by the
DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also
remains with the landowner. 57 No outright change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily transferring
title before the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27,
as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This
should counter-balance the express provision in Section 6 of the said law that "the landowners
whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal
filed by the petitioners with the Office of the President has already been resolved. Although we
have said that the doctrine of exhaustion of administrative remedies need not preclude
immediate resort to judicial action, there are factual issues that have yet to be examined on the
administrative level, especially the claim that the petitioners are not covered by LOI 474 because
they do not own other agricultural lands than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners
have not yet exercised their retention rights, if any, under P.D. No. 27, the Court holds that they
are entitled to the new retention rights provided for by R.A. No. 6657, which in fact are on the
whole more liberal than those granted by the decree.
V
13 | JESSIE DELA PEA
The CARP Law and the other enactments also involved in these cases have been the subject of
bitter attack from those who point to the shortcomings of these measures and ask that they be
scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be
continuously re-examined and rehoned, that they may be sharper instruments for the better
protection of the farmer's rights. But we have to start somewhere. In the pursuit of agrarian
reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and expected
difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to
use Justice Holmes's words, "it is an experiment, as all life is an experiment," and so we learn as
we venture forward, and, if necessary, by our own mistakes. We cannot expect perfection
although we should strive for it by all means. Meantime, we struggle as best we can in freeing
the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to
the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform
program are removed, to clear the way for the true freedom of the farmer. We may now glimpse
the day he will be released not only from want but also from the exploitation and disdain of the
past and from his own feelings of inadequacy and helplessness. At last his servitude will be
ended forever. At last the farm on which he toils will be his farm. It will be his portion of the
Mother Earth that will give him not only the staff of life but also the joy of living. And where once
it bred for him only deep despair, now can he see in it the fruition of his hopes for a more fulfilling
future. Now at last can he banish from his small plot of earth his insecurities and dark
resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229
are SUSTAINED against all the constitutional objections raised in the herein
petitions.
2. Title to all expropriated properties shall be transferred to the State only
upon full payment of compensation to their respective owners.
3. All rights previously acquired by the tenant- farmers under P.D. No. 27
are retained and recognized.
4. Landowners who were unable to exercise their rights of retention under
P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under
the conditions therein prescribed.
5. Subject to the above-mentioned rulings all the petitions are DISMISSED,
without pronouncement as to costs.
SO ORDERED.
FIRST DIVISION
G.R. No. 173329 December 21, 2009
SUSAN G. PO and LILIA G. MUTIA, Petitioners, By Resolution5 of October 19, 2005, the appellate court, holding that petitioners should have
vs. appealed the DARAB Decision via Rule 43, instead of Rule 65, dismissed petitioners petition for
OMERO DAMPAL,* Respondent. certiorari.

DECISION Petitioners thereupon filed before the appellate court a Motion for Leave to Amend Petition and
for Admission of Amended Petition, which motion was denied by Resolution6 of March 28, 2006.
In denying the motion, the appellate court held that dismissal due to error in the mode of appeal
CARPIO MORALES, J.:
cannot be reconsidered by the mere expediency of filing an amended petition. Moreover, it noted
that it was filed out of time.
On December 19, 1984, two farm lots located in Manolo Fortich, Bukidnon which were covered
by OCT No. P-4146 and OCT No. 4147, with an approximate area of 2.5773 and 2.0651
Petitioners moved for reconsideration of the appellate courts March 28, 2006 Resolution,
hectares, respectively, were mortgaged for P33,000.00 by the spouses Florencio and Ester
alleging that their error in the choice of remedy was excusable as they relied on Sec. 1, Rule XIV
Causin, through their attorney-in-fact Manuel Causin, to the now-defunct Rural Bank of
of the DARAB Revised Rules of Procedure, reading:
Tagoloan, Inc.

Sec. 1. Appeal to the Board. An appeal may be taken to the Board from a resolution, decision
For failure to pay the obligation, the bank foreclosed the mortgage and sold the lots at public
or final order of the Adjudicator that completely disposes of the case by either or both of the
auction on July 8, 1992 to petitioner Susan G. Po (Susan) who was the highest bidder. OCT No.
parties within a period of fifteen (15) days from receipt of the resolution/decision/final order
P-4146 and OCT No. 4147 were subsequently cancelled and TCT No. T-39280 and TCT No.
appealed from or of the denial of the movants motion for reconsideration in accordance with
39281 were, in their stead, issued in Susans favor, following the spouses Causins failure to
section 12, Rule X by:
redeem the property.

1.1 filing a Notice of Appeal with the Adjudicator who rendered the decision or final
On September 13, 1993, Susan sold the lot covered by TCT No. 39281 to her herein co-
order appealed from;
petitioner Lilia G. Mutia (Lilia) who was issued TCT No. T-40193.

1.2 furnishing copies of said Notice of Appeal to all parties and the Board; and
On September 29, 1994, the spouses Causin and their tenant-herein respondent Omero Dampal
(Dampal) filed with the Regional Trial Court of Manolo Fortich a complaint against the bank
for Annulment of the Real Estate Mortgage and Sale, docketed as Civil Case No. 94-280 (the 1.3 paying an appeal fee of Seven Hundred Pesos (Php700.00) to the DAR Cashier
civil case). where the Office of the Adjudicator is situated or through postal money order, payable
to the DAR Cashier where the Office of the Adjudicator is situated, at the option of the
appellant.
While the civil case was pending or on June 16, 1997, Dampal filed a complaint against Susan
and Lilia before the Department of Agrarian Reform Adjudication Board (DARAB) Region X,
for Legal Redemption with Preliminary Mandatory Injunction, docketed as DARAB Case No. X- A pauper litigant shall be exempt from the payment of the appeal fee.
05-361.
Proof of service of Notice of Appeal to the affected parties and to the Board and payment of
By Decision1 of September 16, 1997, the Regional Adjudicator of DARAB Region X disallowed appeal fee shall be filed, within the reglementary period, with the Adjudicator a quo and shall
the redemption prayed for on the ground of prescription, albeit he declared that Dampal is form part of the records of the case.
entitled to security of tenure as a tenant; and that although Dampal was not given notice in
writing of the public auction sale, he was deemed to have knowledge thereof because of the civil
Non-compliance with the foregoing shall be a ground for dismissal of the appeal. (underscoring
case for annulment, hence, there was substantial compliance with the rules.
supplied)

Dampals motion for reconsideration having been denied by Order2 dated October 28, 1997, he
By Resolution7 of May 22, 2006, the appellate court denied the motion for reconsideration,
appealed to the DARAB Central Office where it was docketed as DARAB Case No. 7315.
holding that nothing in the above-quoted Sec. 1 of Rule XIV states that the remedy of an
aggrieved party from an adverse decision of the DARAB is by certiorari, and that the applicable
By Decision3 of October 19, 2004, the DARAB Central Office reversed the Adjudicators ruling. It rule is Sec. 1, Rule XV of the 2003 DARAB Revised Rules of Procedure.
held that Dampal, as a tenant, had the right to redeem the mortgage in the amount
of P40,000.00 plus interest; and that the right had not prescribed, owing to the lack
On petitioners attribution of the faux pas to their counsel, the appellate court held that they are
of written notice to him and to the DAR of the sale. It accordingly ordered the cancellation of the
bound thereby. Hence, this petition.
title issued in favor of Susan and that of Lilia and the issuance of new ones in Dampals favor,
upon his payment of the redemption amount. Susan and Lilias motion for reconsideration of the
said Decision was denied by Resolution4 of July 7, 2005, hence, they appealed via certiorari to Petitioners assert that the appellate court, in dismissing their petition due to technicality, denied
the Court of Appeals. them the opportunity to establish the merits of their case. They maintain that Dampals right of

14 | JESSIE DELA PEA

redemption has prescribed, he having admitted Susans acquisition of title to the property as
early as 1993 but that it was only in 1997 that he filed the action for redemption before the
DARAB. They thus conclude that the need for sending him notice in writing could be dispensed
with; and that Dampals inaction estopped him from asserting his right as a tenant.
The petition is bereft of merit.
The earlier-quoted Sec. 1 of Rule XIV of the DARAB Revised Rules of Procedure dwells
on how appeals to the DARAB Board from the decisions, resolutions or final orders of
the Adjudicator are to be taken. How petitioners could have been misled to file their appeal
from the DARABs Decision to the Court of Appeals via certiorari escapes comprehension.
Under Rule 43 of the Rules of Court, appeals from the decisions of the DARAB should be filed
with the Court of Appeals by verified petition for review. Thus, Sec. 1 of Rule 43 provides:
SECTION 1. Scope. This Rule shall apply to appeals from judgments or final orders of the
Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by
any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies
are the Civil Service Commission, Central Board of Assessment Appeals, Securities and
Exchange Commission, Office of the President, Land Registration Authority, Social Security
Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer,
National Electrification Administration, Energy Regulatory Board, National Telecommunications
Commission, Department of Agrarian Reform under Republic Act No. 6657, Government
Service Insurance System, Employees Compensation Commission, Agricultural Inventions
Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments,
Construction Industry Arbitration Commission, and voluntary arbitrators authorized by
law.1avvphi1
SECTION 2. Where to appeal. An appeal under this Rule may be taken to the Court of
Appeals within the period and in the manner herein provided, whether the appeal involves
questions of fact, of law, or mixed questions of fact and law.
SECTION 3. How appeal taken. Appeal shall be taken by filing a verified petition for
review x x x (emphasis and underscoring supplied)
Sec. 1, Rule XV of the 2003 DARAB Revised Rules of Procedure provides:
Section 1. Appeal to the Court of Appeals. - Any decision, order, resolution, award or ruling of
the Board on any agrarian dispute or any matter pertaining to the application, implementation,
enforcement, interpretation of agrarian reform laws or rules and regulations promulgated
thereunder, may be brought on appeal within fifteen (15) days from receipt of a copy thereof, to
the Court of Appeals in accordance with the Rules of Court. (underscoring supplied)
While a petition for certiorari, when availed of as a wrong remedy, is dismissible, there are
exceptions thereto, viz: (a) when public welfare and the advancement of public policy dictates;
(b) when the broader interest of justice so requires; (c) when the writs issued are null and void;
or (d) when the questioned order amounts to an oppressive exercise of judicial authority. 8 None
of these circumstances is present in the case at bar, however.lavvphil
15 | JESSIE DELA PEA
The denial9 by the appellate court of petitioners "MOTION FOR LEAVE TO AMEND PETITION
AND FOR ADMISSION OF AMENDED PETITION" filed on October 28, 2005 is thus in order.
For the records show that petitioners filed the petition for certiorari on the last day of the 15-day
period to appeal or on October 5, 2005.
The belated filing of the Amended Petition is inexcusable.
Time and again, we held that rules of procedure exist for a noble purpose, and to disregard such
rules, in the guise of liberal construction, would be to defeat such purpose. Procedural rules
are not to be disdained as mere technicalities. They may not be ignored to suit the
convenience of a party. Adjective law ensures the effective enforcement of substantive rights
through the orderly and speedy administration of justice. Rules are not intended to hamper
litigants or complicate litigation; they help provide a vital system of justice where suitors
may be heard following judicial procedure and in the correct forum. Public order and our
system of justice are well served by a conscientious observance by the parties of the
procedural rules.10(emphasis supplied)
Technicality aside, on the merits, petitioners failed to establish that in deciding the case, the
DARAB committed grave abuse of discretion.
In its disquisition, the DARAB held that absence of written notice to the tenant of the sale, as
well as to the DAR, is indispensable, particularly in view of Sec. 12 of Republic Act No. 3844, as
amended by Republic Act No. 6389, which mandates that the 180-day period must be reckoned
from the notice in writing upon registration of the sale.
Sec. 12 of Republic Act No. 3844 or the Agricultural Land Reform Code of 1963, as amended by
Republic Act No. 6389, otherwise known as the Code of Agrarian Reforms of the Philippines,
provides:
Sec. 12. Lessees right of redemption. In case the landholding is sold to a third person
without the knowledge of the agricultural lessee, the latter shall have the right to redeem
the same at a reasonable price and consideration: Provided, That where there are two or more
agricultural lessees, each shall be entitled to said right of redemption only to the extent of the
area actually cultivated by him. The right of redemption under this Section may be
exercised within one hundred eighty days from notice in writing which shall be served by
the vendee on all lessees affected and the Department of Agrarian Reform upon the
registration of the sale, and shall have priority over any other right of legal
redemption. The redemption price shall be the reasonable price of the land at the time of the
sale. (emphasis supplied)
The admitted lack of written notice on Dampal and the DAR thus tolled the running of the
prescriptive period. Petitioners contention that Dampal must be considered to have had
constructive knowledge thereof fails in light of the express requirement for notice to be in writing.
WHEREFORE, the petition is DENIED.
SO ORDERED.
G.R. No. 164340 November 28, 2008
OTILIA STA. ANA,petitioner,
vs.
SPOUSES LEON G. CARPO and AURORA CARPO, respondents.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil
Procedure seeking the reversal of the Court of Appeals (CA) Decision2 dated March 5, 2004
which reversed and set aside the Decision3 of the Department of Agrarian Reform Adjudication
Board (DARAB) dated June 24, 1998 and reinstated the Decision4 of the Provincial Agrarian
Reform Adjudicator (PARAD) of Laguna dated October 12, 1993.
The Facts
Respondent Leon Carpo5 (Leon) and his brother Francisco G. Carpo are the registered co-
owners of a parcel of land designated as Lot No. 2175 of the Santa Rosa Estate Subdivision,
situated at Sta. Rosa, Laguna, covered by Transfer Certificate of Title (TCT) No. T-172726 of the
Register of Deeds of Laguna, with an area of 91,337 square meters, more or less. A portion
thereof, consisting of 3.5 hectares, pertained to Leon and his wife, respondent Aurora Carpo. It
was devoted to rice and corn production (subject land) and was tenanted by one Domingo
Pastolero (Domingo), husband of Adoracion Pastolero (Adoracion). 7 When Domingo passed
away, Adoracion together with her son Elpidio Pastolero, assumed the tenancy rights of
Domingo over the subject land.
However, on December 29, 1983, Adoracion, by executing a notarized Pinanumpaang
Salaysay8 with the conformity of Leon, and for a consideration of P72,500.00, transferred her
rights in favor of petitioner Otilia Sta. Ana9 (petitioner) who, together with her husband, Marciano
de la Cruz (Marciano), became the new tenants of the subject land.
At the outset, the parties had a harmonious tenancy relationship. 10 Unfortunately, circumstances
transpired which abraded the relationship. The Department of Agrarian Reform (DAR) mediated
in order to amicably settle the controversy, but no settlement was reached by the parties. Thus,
the instant case.
In their Complaint for Ejectment due to Non-Payment of Lease Rentals11 dated December 1,
1989, respondents alleged that it was their agreement with petitioner and Marciano to increase
the existing rentals from 36 cavans to 45 cavans, and that, if respondents wanted to repossess
the property, they only had to pay the petitioner the amount of P72,500.00, the same amount
paid by the latter to Adoracion. Respondents further averred that despite repeated demands,
petitioner refused to pay the actual rentals from July 1985 to September 1989, in violation of
Presidential Decree (P.D.) No. 817; and that the subject land had been declared, upon the
recommendation of the Human Settlements Committee, suitable for commercial and industrial
purposes, per Zoning Ordinance of 1981 of the Municipality of Sta. Rosa, Laguna. Respondents
prayed that petitioner be ejected from the subject land and be directed to pay P75,016.00 as
unpaid rentals.
In their Answer12 dated January 26, 1990, petitioner and Marciano denied that there was an
agreement to increase the existing rental which was already fixed at 36 cavans of palay, once or
16 | JESSIE DELA PEA
twice a year depending on the availability of irrigation water; that neither was there an
agreement as to the future surrender of the land in favor of the respondents; that they did not
refuse to pay the rentals because they even sent verbal and written notices to the respondents,
advising them to accept the same; and that in view of the latters failure to respond, petitioner
and Marciano were compelled to sell the harvest and to deposit the proceeds thereof in Savings
Account No. 9166 with the Universal Savings Bank at Sta. Rosa, Laguna under the names of
Leon and Marciano. As their special affirmative defense, petitioner and Marciano claimed that
Marciano is a farmer-beneficiary of the subject land pursuant to P.D. 27. Petitioner and Marciano
prayed for the outright dismissal of the complaint and for the declaration of Marciano as full
owner of the subject land.
Thereafter, trial on the merits ensued.
The PARADs Ruling
On October 12, 1993, the PARAD ruled that petitioner and Marciano deliberately defaulted in the
payment of the rentals due the respondents. The PARAD found that the deposit made with
Republic Planters Bank was actually in the names of petitioner and Marciano, hence, personal to
them. The PARAD also found that it was only during the hearing that petitioner and Marciano
deposited the amount of P40,000.00 with the Universal Savings Bank for the unpaid rentals. As
such the PARAD considered the deposits as late payments and as implied admission that
indeed petitioner and Marciano did not pay the past rentals when they fell due. The PARAD
further held and disposed thus:
The intent of the defendant to subject the said area under PD 27 should pass the
criteria set. Foremost is the determination of the aggregate riceland of plaintiff. He
must have more than seven (7) hectares of land principally devoted to the planting of
palay. Area over seven (7) hectares shall be the one to be covered by PD 27 on
Operation Land Transfer (OLT). In the case at bar, defendants failed to prove that
plaintiff has more than the required riceland. In fact the subject 3.5 hectares are jointly
owned by two. Hence, coverage for OLT is remote.
Defendant claimed that plaintiff is covered by LOI 474, and therefore, he is zero
retention of area. In reference to said law, wherein it provides landowner with other
agricultural land of more than 7 hectares, or have other industrial lands from where he
and his family derived resources, then, the owner cannot retain any riceland.
However, this is not applicable in the instant case, as the defendant failed to prove
that plaintiff has other source of income from where they will derive their sustenance.
WHEREFORE, in view of the foregoing, Judgment is hereby rendered:
a) Ordering the ejectment of defendant from the subject landholding for non-
payment of lease rentals;
b) Ordering the defendant Marciano de la Cruz to surrender the possession
and cultivation of the subject land to herein plaintiffs;
c) Ordering the defendant to pay as actual damage the amount
of P75,016.00 corresponding to the unpaid rentals from July 18, 1985 up to
September 16, 1989[; and]
 d) [D]eclaring the subject land not covered by Presidential Decree No. 27,
Republic Act [No.] 6657, and Executive Order No. 228.
SO ORDERED.
Petitioner and Marciano sought relief from the DARAB.13
The DARABs Ruling
On June 24, 1998, the DARAB held:
It is a fundamental rule in this jurisdiction that for non-payment of lease rentals to
warrant the dispossession and ejectment of a tenant, the same must be made in a
willful and deliberate manner (Cabero v. Caturna, et al., CA-G.R. 05886-R, March 10,
1977). For a valid ouster or ejectment of a farmer-tenant, the willful and deliberate
intent not to pay lease rentals and/or share can be ascertained when there is a
determination of will not to do a certain act.
Considering the circumstances obtaining in this case, it cannot be concluded that the
defendants-appellants deliberately failed or refused to pay their lease rentals. It was
not the fault of defendants-appellants herein that the rentals did not reach the
plaintiffs-appellees because the latter choose to lend a deaf ear to the notices sent to
them. Clearly, therefore plaintiffs-appellees failed to show by substantial evidence that
the defendants-appellants deliberately failed or refused to pay their lease rentals. It
has been held that the mere failure of a tenant to pay the landowners share does not
necessarily give the latter the right to eject the former when there is lack of deliberate
intent on the part of the tenant to pay (Roxas y Cia v. Cabatuando, 1 SCRA 1106).
Thus:
WHEREFORE, finding the appeal interposed by the defendants-appellants to be
meritorious, the Decision appealed from is hereby SET ASIDE and another judgment
issued as follows:
1. Enjoining plaintiffs-appellees to respect the peaceful possession and
cultivation of the land in suit by the defendants-appellants; and
2. Directing the MARO of Sta. Rosa, Laguna to assist the parties in the
proper accounting of lease rentals to be paid by the defendants-appellants
to the plaintiffs-appellees.
No costs.
SO ORDERED.
Aggrieved, respondents appealed to the CA. On April 16, 2003, Marciano passed away.14
The CAs Ruling
17 | JESSIE DELA PEA
On March 5, 2004, the CA affirmed the factual findings of the PARAD that petitioner and
Marciano failed to pay the rentals and that there was no valid tender of payment. The CA added
that this failure to pay was tainted with bad faith and deliberate intent. Thus, petitioner and
Marciano did not legally comply with their duties as tenants. Moreover, the CA held that the
subject land was not covered by P.D. 27, Republic Act (R.A.) No. 6657 and Executive Order
(E.O.) No. 228, since the same had become a residential, commercial and industrial land, to wit:
In the case at bar, We opted to give more weight to the petitioners contention that the
"subject landholding is for residential, commercial, and industrial purposes as declared
by zoning ordinance of 1981 of the town of Sta. Rosa, Laguna upon recommendation
of the Human Settlement Committee xxx." The vicinity map of the subject landholding
shows that it is almost beside Nissan Motors Technopa[r]k and surrounded by the
South Expressway and several companies such as the Coca-Cola Bottlers
Philippines, Inc. and Toyota Motors Philippines along the Pulong Santa Cruz, National
Road. The vicinity map shows therefore that the subject landholding is a residential,
commercial, and industrial area exempted from the coverage of P.D. No. 27, Republic
Act. No. 6657 and Executive Order No. 228.
The CA ruled in favor of the respondents in this wise:
WHEREFORE, premises considered and pursuant to applicable law and
jurisprudence on the matter, the present Petition is hereby GRANTED. Accordingly,
the decision of the Department of Agrarian Reform Adjudication Board-Central Office,
Elliptical Road, Diliman, Quezon City (promulgated on June 24, 1998) is
hereby REVERSED and SET ASIDE and a new one entered- REINSTATING the
decision of the Department of Agrarian Reform Adjudication Board-Region IV, Office
of the Provincial Adjudicator, Sta. Cruz, Laguna (dated October 12, 1993). No
pronouncement as to costs.
SO ORDERED.
Petitioner filed a Motion for Reconsideration15 assailing the aforementioned Decision which the
CA, however, denied in its Resolution16 dated June 28, 2004.
Hence, this Petition based on the following grounds:
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ARROGATING
UPON ITSELF WHAT IS OTHERWISE DARS POWER TO DETERMINE WHETHER
THE SUBJECT AGRICULTURAL LAND HAS
BECOME RESIDENTIAL/INDUSTRIAL/COMMERCIAL.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT
EQUATED "LAND RECLASSIFICATION" WITH "LAND CONVERSION" FOR
PURPOSES OF DETERMINING THE PROPRIETY OF EJECTMENT OF AN
AGRICULTURAL LESSEE.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT FAILED
TO NOTE THAT AN EJECTMENT SUIT BASED ON A CLAIM OF NON-PAYMENT
OF LEASE RENTAL IS DIAMETRICALLY ANTITHETICAL TO THE CLAIM THAT
THE SUBJECT LAND IS NO LONGER AGRICULTURAL BUT "A RESIDENTIAL,
 COMMERCIAL AND INDUSTRIAL AREA EXEMPTED FROM THE COVERAGE OF
P.D. NO. 27, REPUBLIC ACT NO. 6657 AND EXECUTIVE ORDER NO. 228.
THE DECISION DATED MARCH 5, 2004--INSOFAR AS IT ADOPTED THE FINDING
OF DARAB-REGION IV, OFFICE OF THE PROVINCIAL ADJUDICATOR, STA.
CRUZ, LAGUNA INSTEAD OF THAT OF THE DARAB-CENTRAL--IS VIOLATIVE OF
SEC. 14, ART. VIII OF THE 1987 CONSTITUTION FOR HAVING DECIDED
WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND
THE LAW ON WHICH SAID DECISION IS BASED.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN RESORTING TO
SURMISES AND CONJECTURES WHEN IT RULED THAT THE FAILURE OF THE
HEREIN PETITIONER AND HER DECEASED HUSBAND TO DELIVER THE LEASE
RENTALS TO HEREIN RESPONDENTS, WAS DONE SO IN BAD FAITH AND WITH
DELIBERATE INTENT TO DEPRIVE THE LAND OWNERS THEREOF.
Petitioner asseverates that there is no evidence to support respondents' claim that the failure to
pay the lease rentals was tainted with malevolence, as the records are replete with acts
indicative of good faith on the part of the petitioner and Marciano and bad faith on the part of
respondents.
Moreover, petitioner claimed that the power to determine whether or not the subject land is non-
agricultural, hence, exempt from the coverage of the Comprehensive Agrarian Reform Law
(CARL), lies with the DAR, and not with the courts; that mere reclassification by way of a zoning
ordinance does not warrant the dispossession of a tenant but conversion does, and entitles the
tenant to payment of disturbance compensation; the legal concepts of reclassification and
conversion are separate and distinct from each other; that respondents' complaint before the
PARAD alleged and established the fact that the subject land is a riceland, therefore,
agricultural; that the CA failed to explain why it upheld the findings of the PARAD on the issue of
non-payment of lease rentals; and that though the issue of non-payment of lease rentals is a
question of fact, due to the conflict of the factual findings of the PARAD and CA with those of the
DARAB, petitioner asks that this Court review the evidence on record, and pursuant to the CA
decision in Cabero v. Caturna, et al.,17 rule on whether petitioner willfully and deliberately
refused to pay lease rentals as to warrant her dispossession from the subject land. 18
On the other hand, respondents aver that petitioner and her family are wealthy, as they own
numerous properties in Sta. Rosa, Laguna including a luxurious house; 19 that, as such, petitioner
cannot be considered as a landless tenant deserving the protection of agrarian reform laws; that
the DARAB negated the highest degree of respect the factual findings of the PARAD deserved;
that petitioner's claims that Marciano repeatedly made verbal and written notices 20 for Leon to
accept their lease rentals were fraudulent designs to disguise the deliberate intent of petitioner
not to pay the lease rentals; that when Leon went to petitioner's residence, petitioner did not pay
the P10,000.00 due as lease rentals; that during the hearing before the PARAD, when
respondents' counsel requested that they be furnished a bank certificate as to the existence of
said bank deposits in Republic Planters Bank as of April 20, 1987 and October 1, 1987,
petitioner herself commented, "Nagdeposito ho talaga kami sa pangalan namin";21 that the
statement of petitioner is an admission that bank deposits, if any, were made, not in the name of
Leon as contained in the written notices, but rather in the names of petitioner and Marciano; that
such certificate was not introduced in evidence and that upon inquiry, said deposits do not
actually exist; that per recent inquiry, the bank deposit in Universal Savings Bank only
contains P1,020.19 due to previous withdrawals made by Marciano; that the foregoing
circumstances indicate a pattern of fraudulent misrepresentations by the petitioner to mislead
the DARAB into believing that petitioner and Marciano did not deliberately refuse to pay the
18 | JESSIE DELA PEA
lease rentals; that from July 18, 1985 up to the present, petitioner failed to pay the lease rentals
showing again, the deliberate refusal to pay; that this default on the part of the petitioner has
been recurring for several years already, thus depriving the respondents as landowners of their
share of the subject land in violation of the principle of social justice; that as raised in
respondents Omnibus Supplemental Motion for Reconsideration22 before the DARAB and as
found by the CA based on its vicinity map,23 the subject land is of a residential, commercial and
industrial character, exempted from agrarian reform coverage; and that the DARAB erred in not
finding the sale of the tenancy rights of Adoracion to petitioner and Marciano for P72,500.00
violative of P.D. 27 even if the same was with Leon's consent. The sale, respondents contend
was therefore, null and void ab initio, not susceptible of any ratification.24
Our Ruling
Before we resolve this case on the merits, a procedural issue must be disposed of.
Respondents strongly argue that the instant Petition was filed out of time because, while
petitioner originally claimed to have received her copy of the CA Resolution25 dated June 28,
2004, denying her Motion for Reconsideration,26 on July 12, 2004, petitioner eventually admitted,
after respondents showed proof to the contrary, that she actually received the said Resolution on
July 7, 2004.27 Thus, petitioner had only up to July 22, 2004 to appeal the CA's ruling to this
Court. In this case, petitioner filed her Motion28 for Extension of Time to File Petition for Review
on Certiorari (Motion) on July 23, 2004. As such, there was no more period to extend. Further,
the instant Petition was filed on August 27, 2004, or three (3) days beyond the thirty-day
extended period. Hence, respondents submit that the CA decision had already become final and
executory.29
Petitioner alleges that on July 15, 2004, she met with her counsel to engage the latter's legal
services. During said meeting, counsel asked petitioner about the date of receipt of the assailed
CA Resolution. Petitioner replied that she received her copy on July 12, 2004. On July 20, 2004,
counsel filed an Entry of Appearance with the CA.30 On July 23, 2004, petitioner through counsel
filed the Motion for Extension of Time to File Petition for Review. On August 11, 2004, petitioner
received a copy of respondents' Opposition to the Motion. Thereafter, upon verification,
petitioner admitted that she received the copy of the CA Resolution on July 7, 2004. Thus, her
Motion was admittedly filed one day late. Petitioner begs the indulgence of this Court for her
oversight and mistake, attributing the same to her lack of education and old age.
Rules of procedure are merely tools designed to facilitate the attainment of justice. If the
application of the Rules would tend to frustrate rather than to promote justice, it is always within
our power to suspend the rules or except a particular case from their operation. Law and
jurisprudence grant to courts the prerogative to relax compliance with the procedural rules, even
the most mandatory in character, mindful of the duty to reconcile the need to put an end to
litigation speedily and the parties' right to an opportunity to be heard. 31
Our recent ruling in Tanenglian v. Lorenzo32 is instructive:
We have not been oblivious to or unmindful of the extraordinary situations that merit
liberal application of the Rules, allowing us, depending on the circumstances, to set
aside technical infirmities and give due course to the appeal. In cases where we
dispense with the technicalities, we do not mean to undermine the force and effectivity
of the periods set by law. In those rare cases where we did not stringently apply the
procedural rules, there always existed a clear need to prevent the commission of a
 grave injustice. Our judicial system and the courts have always tried to maintain a
healthy balance between the strict enforcement of procedural laws and the guarantee
that every litigant be given the full opportunity for the just and proper disposition of his
cause.
In this case, petitioner was one day late in filing her Motion for Extension. To deny the Petition
on this ground alone is too harsh a penalty for a days delay, taking into consideration the time,
resources and effort spent by petitioner and even by the respondents, in order to pursue this
case all the way to this Court. Thus, we dispense with the apparent procedural defect and
resolve this case on the merits. The ends of justice are better served when cases are
determined on the merits with all parties given full opportunity to ventilate their causes and
defenses rather than on technicality or some procedural imperfections. 33
The Petition is impressed with merit.
In sum, there are two (2) ultimate issues that require resolution in this case:
1) Whether the CA erred in ruling that the subject land had already become
residential, commercial and/or industrial, thus, excluded from the coverage of our laws
on agrarian reform; and
2) Whether the petitioner, as an agricultural tenant, failed to pay her lease rentals
when the same fell due as to warrant her dispossession of the subject land.
On the first issue, we rule in the affirmative.
To recapitulate, the instant case sprang from a Complaint for Ejectment based on Non-Payment
of lease rentals. Though an allegation was made by the respondents that the land had been
declared, upon the recommendation of the Human Settlements Committee, suitable for
commercial and industrial purposes, per Zoning Ordinance of 1981 of the Municipality of Sta.
Rosa, no argument was advanced by respondents to support such allegation, in the same way
that no prayer for the ejectment of the tenants was raised based on that allegation. The PARAD
held that petitioner should be ejected for non-payment of lease rentals. It also ruled that the
subject land is not covered by P.D. No. 27, R.A. No. 6657, and E.O. No. 228, not on the basis of
the allegation in the complaint, but on the respondents' right of retention.
On appeal, the DARAB concentrated on the issue of petitioners failure to pay lease rentals.
When the DARAB ruled that petitioner and Marciano did not deliberately fail to pay said rentals,
respondents raised a new issue in their Omnibus Motion that the transaction between Adoracion
and petitioner was void in violation of P.D. No. 27, despite the conformity of Leon. This issue
was not resolved by the DARAB.
Finally, when the case reached the CA, the appellate court affirmed the findings of the PARAD
that petitioner and Marciano deliberately and in bad faith did not pay the lease rentals. The CA,
however, also held that the subject land had already become a residential, commercial and
industrial area based on the vicinity map showing that the land was surrounded by commercial
and industrial establishments.
Without doubt, the PARAD acted without jurisdiction when it held that the subject land was no
longer covered by our agrarian laws because of the retention rights of the respondents. The CA
19 | JESSIE DELA PEA
likewise acted without jurisdiction when it ruled that the land had become non-agricultural based
on a zoning ordinance of 1981 on the strength of a mere vicinity map. These rulings violated
the doctrine of primary jurisdiction.
The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which
jurisdiction has initially been lodged in an administrative body of special competence. For
agrarian reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more
specifically, in the Department of Agrarian Reform Adjudication Board (DARAB). Executive
Order 229 vested the DAR with (1) quasi-judicial powers to determine and adjudicate agrarian
reform matters; and (2) jurisdiction over all matters involving the implementation of agrarian
reform, except those falling under the exclusive original jurisdiction of the Department of
Agriculture and the Department of Environment and Natural Resources.34
In Department of Agrarian Reform v. Abdulwahid,35 we held:
As held by this Court in Centeno v. Centeno [343 SCRA 153], "the DAR is vested with
the primary jurisdiction to determine and adjudicate agrarian reform matters and shall
have the exclusive jurisdiction over all matters involving the implementation of the
agrarian reform program." The DARAB has primary, original and appellate jurisdiction
"to determine and adjudicate all agrarian disputes, cases, controversies, and matters
or incidents involving the implementation of the Comprehensive Agrarian Reform
Program under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A, R.A. No. 3844 as
amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws and their
implementing rules and regulations."
Under Section 3 (d) of R.A. No. 6657 (CARP Law), "agrarian dispute" is defined to
include "(d) . . . any controversy relating to tenurial arrangements, whether leasehold,
tenancy, stewardship or otherwise over lands devoted to agriculture, including
disputes concerning farmworkers associations or representation of persons in
negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of
such tenurial arrangements. It includes any controversy relating to compensation of
lands acquired under this Act and other terms and conditions of transfer of ownership
from landowners to farmworkers, tenants and other agrarian reform beneficiaries,
whether the disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee."
Simply put, agrarian disputes, as defined by law and settled in jurisprudence, are within the
primary and exclusive original jurisdiction of the PARAD and the DARAB, while issues of
retention and non-coverage of a land under agrarian reform, among others, are within the
domain of the DAR Secretary.
Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure provides:
SECTION 3. Agrarian Law Implementation Cases. The Adjudicator or the Board
shall have no jurisdiction over matters involving the administrative implementation of
RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL)
of 1988 and other agrarian laws as enunciated by pertinent rules and administrative
orders, which shall be under the exclusive prerogative of and cognizable by the Office
of the Secretary of the DAR in accordance with his issuances, to wit:
 3.1 Classification and identification of landholdings for coverage under the
agrarian reform program and the initial issuance of CLOAs and EPs,
including protests or oppositions thereto and petitions for lifting of such
coverage;
3.2 Classification, identification, inclusion, exclusion, qualification, or
disqualification of potential/actual farmer-beneficiaries;
3.3 Subdivision surveys of land under CARP;
3.4 Recall, or cancellation of provisional lease rentals, Certificates of Land
Transfers (CLTs) and CARP Beneficiary Certificates (CBCs) in cases
outside the purview of Presidential Decree (PD) No. 816, including the
issuance, recall, or cancellation of EPs or CLOAs not yet registered with the
Register of Deeds;
3.5 Exercise of the right of retention by the landowner;
3.6 Application for exemption from coverage under Section 10 of RA 6657;
3.7 Application for exemption pursuant to Department of Justice (DOJ)
Opinion No. 44 (1990);
3.8 Exclusion from CARP coverage of agricultural land used for livestock,
swine, and poultry raising;
3.9 Cases of exemption/exclusion of fish pond and prawn farms from the
coverage of CARP pursuant to RA 7881;
3.10 Issuance of Certificate of Exemption for land subject of Voluntary Offer
to Sell (VOS) and Compulsory Acquisition (CA) found unsuitable for
agricultural purposes;
3.11 Application for conversion of agricultural land to residential,
commercial, industrial, or other non-agricultural uses and purposes
including protests or oppositions thereto;
3.12 Determination of the rights of agrarian reform beneficiaries to
homelots;
3.13 Disposition of excess area of the tenants/farmer-beneficiary's
landholdings;
3.14 Increase in area of tillage of a tenant/farmer-beneficiary;
3.15 Conflict of claims in landed estates administered by DAR and its
predecessors; or
20 | JESSIE DELA PEA
3.16 Such other agrarian cases, disputes, matters or concerns referred to it
by the Secretary of the DAR.
Verily, there is an established tenancy relationship between petitioner and respondents in this
case. An action for Ejectment for Non-Payment of lease rentals is clearly an agrarian dispute,
cognizable at the initial stage by
the PARAD and thereafter by the DARAB.36 But issues with respect to the retention rights of the
respondents as landowners and the exclusion/exemption of the subject land from the coverage
of agrarian reform are issues not cognizable by the PARAD and the DARAB, but by the DAR
Secretary because, as aforementioned, the same are Agrarian Law Implementation (ALI) Cases.
It has not escaped our notice that, as this case progressed and reached a higher level in the
hierarchy of tribunals, the respondents would, invariably, proffer an additional theory or defense,
in order to effect petitioners eviction from the land. As a consequence, the simple issue of
ejectment based on non-payment of rentals has been muddled.
Proof necessary for the resolution of the issue of the land being covered by, or
excluded/exempted from, P.D. No. 27, R.A. No. 6657, and other pertinent agrarian laws, as well
as of the issue of the right of retention of the respondents, was not offered in evidence. Worse,
the PARAD resolved the issue of retention even if it was not raised by the respondents at that
level, and even if the PARAD had no jurisdiction over the same.
Likewise, the CA ruled that the land had ceased being agricultural on the basis of a mere vicinity
map, in open disregard of the Doctrine of Primary Jurisdiction, since the issue was within the
province of the Secretary of DAR.
We take this opportunity to remind the PARAD and the CA that "courts of justice have no power
to decide a question not in issue." A judgment that goes beyond the issues, and purports to
adjudicate something on which the parties were not heard, is extra-judicial, irregular and invalid.
This norm applies not only to courts of justice, but also to quasi-judicial
bodies such as the PARAD. Accordingly, premature and irregular were the PARAD ruling on the
retention rights of the respondents, and the CA decision on the non-agricultural character of the
land subject of this controversy -- these issues not having passed the scrutiny of the DAR
Secretary -- are premature and irregular.37
Thus, we cannot allow ourselves to fall into the same error as that committed by the PARAD and
the CA, and resolve the issue of the non-agricultural nature of the subject land by receiving, at
this stage, pieces of evidence and evaluating the same, without the respondents having first
introduced them in the proper forum. The Office of the DAR Secretary is in a better position to
resolve the issues on retention and exclusion/exemption from agrarian reform coverage, being
the agency lodged with such authority inasmuch it possesses the necessary expertise on the
matter.38
Likewise, we refrain from entertaining the issue raised by respondents that petitioner and her
family are not landless tenants and are therefore not deserving of any protection under our laws
on agrarian reform, because fairness and due process dictate that issues not raised in the
proceedings below should not be raised for the first time on appeal. 39
On the second issue, we rule in the negative.
Under Section 37 of Republic Act No. 3844,40 as amended, coupled with the fact that the
respondents are the complainants themselves, the burden of proof to show the existence of a
lawful cause for the ejectment of the petitioner as an agricultural lessee rests upon the
respondents as agricultural lessors.41 This proceeds from the principle that a tenancy
relationship, once established, entitles the tenant to security of tenure. Petitioner can only be
ejected from the agricultural landholding on grounds provided by law. 42 Section 36 of the same
law pertinently provides:
Sec. 36. Possession of Landholding; Exceptions. Notwithstanding any agreement as
to the period or future surrender, of the land, an agricultural lessee shall continue in
the enjoyment and possession of his landholding except when his dispossession has
been authorized by the Court in a judgment that is final and executory if after due
hearing it is shown that:
xxxx
(6) The agricultural lessee does not pay the lease rental when it falls due: Provided,
That if the non-payment of the rental shall be due to crop failure to the extent of
seventy-five per centum as a result of a fortuitous event, the non-payment shall not be
a ground for dispossession, although the obligation to pay the rental due that
particular crop is not thereby extinguished;
xxxx
Respondents failed to discharge such burden. The agricultural tenant's failure to pay the lease
rentals must be willful and deliberate in order to warrant his dispossession of the land that he
tills.
Petitioner's counsel opines that there appears to be no decision by this Court on the matter; he
thus submits that we should use the CA decision in Cabero v. Caturna. This is not correct. In an
En Banc Decision by this Court in Roxas y Cia v. Cabatuando, et al.,43 we held that under our
law and jurisprudence, mere failure of a tenant to pay the landholder's share does not
necessarily give the latter the right to eject the former when there is lack of deliberate intent on
the part of the tenant to pay. This ruling has not been overturned.
The term "deliberate" is characterized by or results from slow, careful, thorough calculation and
consideration of effects and consequences.44 The term "willful," on the other hand, is defined as
one governed by will without yielding to reason or without regard to reason. 45
We agree with the findings of the DARAB that it was not the fault of petitioner that the lease
rentals did not reach the respondents because the latter chose to ignore the notices sent to
them. To note, as early as November 10, 1986, Marciano executed an Affidavit 46 stating that
Leon refused to receive the respective lease rentals consisting of 37 cavans for November 1985
and July 1986. For 1987, Marciano wrote Leon two letters47 informing him of the availability of
the lease rentals for April and October of the same year. On April 27, 1988, Marciano sought
DAR intervention and mediation with respect to the execution of a leasehold contract and the
fixing of the leasehold rentals.48 Meetings were set but respondents failed to attend.49 The
dispute was referred to the barangay but the parties failed to amicably settle.50
21 | JESSIE DELA PEA
These factual circumstances negate the PARAD findings of Marcianos and petitioner's
deliberate and willful intent not to pay lease rentals. Good faith was clearly demonstrated by
Marciano and petitioner when, because respondents refused to accept the proffered payment,
they even went to the point of seeking government intervention in order to address their
problems with respondents. Absent such deliberate and willful refusal to pay lease rentals,
petitioner's ejectment from the subject land is not justified.
WHEREFORE, the instant Petition is GRANTED. The assailed Decision of the Court of Appeals
in CA-G.R. SP No. 60640 is hereby REVERSED and SET ASIDE. The Decision of the
Department of Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 in DARAB
Case No. 2203 is REINSTATED without prejudice to the rights of respondent-spouses Leon and
Aurora Carpo to seek recourse from the Office of the Department of Agrarian Reform (DAR)
Secretary on the other issues they raised. No costs.
SO ORDERED.
G.R. No. 175098, August 26, 2015
ISMAEL V. CRISOSTOMO, Petitioner, v. MARTIN P. VICTORIA, Respondent.
DECISION
LEONEN, J.:
This resolves a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of
Civil Procedure praying that the July 31, 2006 Decision1 and the October 20, 2006
Resolution2 of the Court of Appeals Eighth Division in CA-G.R. SP No. 94107 be
reversed and set aside, and that the April 4, 2005 Decision3 and March 17, 2006
Resolution4 of the Department of Agrarian Reform Adjudication Board be reinstated.
The assailed July 31, 2006 Decision of the Court of Appeals reversed and set aside
the April 4, 2005 Decision and March 17, 2006 Resolution of the Department of
Agrarian Reform Adjudication Board. It recognized respondent Martin P. Victoria
(Victoria) as the bona fide tenant of a parcel of riceland owned by petitioner Ismael
V. Crisostomo (Crisostomo). The assailed October 20, 2006 Resolution of the Court
of Appeals denied Crisostomo's Motion for Reconsideration.
The April 4, 2005 Decision and March 17, 2006 Resolution of the Department of
Agrarian Reform Adjudication Board sustained the April 7, 2003 Decision5 of the
Office of the Provincial Agrarian Reform Adjudicator of Bulacan, which ruled in favor
of Crisostomo in his action to eject Victoria from the subject riceland.
In a Complaint for Ejectment filed before the Office of the Provincial Agrarian
Reform Adjudicator of Bulacan, Crisostomo alleged that he, along with his deceased
brother Jose Crisostomo, were the registered owners of a parcel of riceland with an
area of 562,694 square meters. This was covered by Transfer Certificate of Title No.
T-68421 and located in Sta. Barbara, Baliuag, Bulacan. On June 21, 1973, he and
his brother allegedly entered into a lease contract with David Hipolito (Hipolito) over
a portion of the riceland (disputed portion). The contract was supposedly in effect
until Hipolito's death on December 2, 1999. As Hipolito died without any known
heirs, Crisostomo was set to reclaim possession and to take over cultivation of the
disputed portion. However, in January 2000, Victoria entered the disputed portion
and began cultivating it without the knowledge and consent of Crisostomo.
Crisostomo confronted Victoria, who insisted that he had tenancy rights over the
disputed portion.6
In his Answer, Victoria claimed that Hipolito was his uncle. He alleged that even
during the lifetime of Hipolito, it was he who was doing farmwork on the disputed
portion and that he did so with Crisostomo's knowledge. He added that from the
time Hipolito became bedridden, it was he who performed all duties pertaining to
tenancy, including the delivery of lease rentals and corresponding shares in the
harvest to Crisostomo. He asserted that Crisostomo's act of receiving lease rentals
from him amounted to implied consent, which gave rise to a tenancy relationship
between them.7
In its April 7, 2003 Decision,8 the Office of the Provincial Agrarian Reform
Adjudicator of Bulacan ruled in favor of Crisostomo and ordered Victoria, together
with all persons claiming rights under him, to vacate the disputed portion and
surrender its possession to Crisostomo.9
The Office of the Provincial Agrarian Reform Adjudicator, noting that the essential
element of consent was absent, held that Victoria could not be deemed the tenant
of the disputed portion. It further held that implied tenancy could not arise in a
situation where another person is validly instituted as tenant and is enjoying
recognition as such by the landowner.10
In its April 4, 2005 Decision,11 the Department of Agrarian Reform Adjudication
Board denied Victoria's Appeal. In its March 17, 2006 Resolution,12 it denied
Victoria's Motion for Reconsideration.
In its assailed July 31, 2006 Decision,13 the Court of Appeals Eighth Division
reversed the rulings of the Office of the Provincial Agrarian Reform Adjudicator of
Bulacan and of the Department of Agrarian Reform Adjudication Board. It
recognized Victoria as bona fide tenant of the disputed portion.
The Court of Appeals reasoned that "Hipolito, as the legal possessor, could legally
allow [Victoria] to work and till the landholding"14 and that Crisostomo was bound
by Hipolito's act. It added that Crisostomo "had been receiving his share of the
harvest from [Victoria], as evidenced by the numerous receipts indicating so."15 It
emphasized that "[t]he receipts rendered beyond dispute [Victoria's] status as the
agricultural tenant on the landholding."16 It further noted that as an agricultural
tenant, Victoria was entitled to security of tenure who, absent any of the grounds
for extinguishing agricultural leasehold relationships, "should not be deprived of but
should continue his tenancy on the landholding."17
In its assailed October 20, 2006 Resolution,18 the Court of Appeals Eighth Division
denied Crisostomo's Motion for Reconsideration.
Hence, this Petition was filed.
For resolution is the issue of whether respondent Martin P. Victoria is a bona fide
tenant of the disputed portion.
22 | JESSIE DELA PEA
I
Section 6 of Republic Act No. 3844, otherwise known as the Agricultural Land
Reform Code, identifies the recognized parties in an agricultural leasehold relation:
SECTION 6. Parties to Agricultural Leasehold Relation. The agricultural leasehold
relation shall be limited to the person who furnishes the landholding, either as
owner, civil law lessee, usufructuary, or legal possessor, and the person who
personally cultivates the same.
Proceeding from Section 6 of the Agricultural Land Reform Code, the Court of
Appeals capitalized on Hipolito's supposed status as "legal possessor" of the
disputed portion, a status that was deemed to emanate from his having been the
lessee. Thus, the Court of Appeals concluded that "Hipolito, as the legal possessor,
could legally allow [respondent] to work and till the landholding"19 thereby making
respondent a tenant whose security of tenure petitioner must now respect.
The Court of Appeals is in error. Hipolito's status as the acknowledged tenant did
not clothe him with the capacity to designate respondent as a tenant.
This court has settled that tenancy relations cannot be an expedient artifice for
vesting in the tenant rights over the landholding which far exceed those of the
landowner. It cannot be a means for vesting a tenant with security of tenure, such
that he or she is effectively the landowner.
Even while agrarian reform laws are pieces of social legislation, landowners are
equally entitled to protection. In Calderon v. Dela Cruz:20
It is true that RA 3844 is a social legislation designed to promote economic and
social stability and must be interpreted liberally to give full force and effect to its
clear intent. This liberality in interpretation, however, should not accrue in favor of
actual tillers of the land, the tenant- farmers, but should extend to landowners as
well. . . . The landowners deserve as much consideration as the tenants themselves
in order not to create an economic dislocation, where tenants are solely favored but
the landowners become impoverished.21 (Emphasis supplied, citation omitted)
In Valencia v. Court of Appeals,22 this court grappled with the consequences of a
lessee's employment of farmhands who subsequently claimed the status of tenants.
Insisting on a tenant's right to security of tenure, these farmhands refused to
vacate and surrender possession of the subject land despite the landowner's
demands:
Contrary to the impression of private respondents, Sec. 6 of R.A. No. 3844, as
amended, does not automatically authorize a civil law lessee to employ a tenant
without the consent of the landowner. The lessee must be so specifically authorized.
For the right to hire a tenant is basically a personal right of a landowner, except as
may he provided by law. But certainly nowhere in Sec. 6 does it say that a civil law
lessee of a landholding is automatically authorized to install a tenant thereon. A
different interpretation would create a perverse and absurd situation where a person
who wants to be a tenant, and taking advantage of this perceived ambiguity in the
law, asks a third person to become a civil law lessee of the landowner. Incredibly,
this tenant would technically have a better right over the property than the
landowner himself. This tenant would then gain security of tenure, and eventually
become owner of the land by operation of law. This is most unfair to the hapless
and unsuspecting landowner who entered into a civil law lease agreement in good
faith only to realize later on that he can no longer regain possession of his property
due to the installation of a tenant by the civil law lessee.

On the other hand, under the express provision of Art. 1649 of the Civil Code, the
lessee cannot assign the lease without the consent of the lessor, unless there is a
stipulation to the contrary. In the case before us, not only is there no stipulation to
the contrary; the lessee is expressly prohibited from subleasing or encumbering the
land, which includes installing a leasehold tenant thereon since the right to do so is
an attribute of ownership. Plainly stated therefore, a contract of civil law lease can
prohibit a civil law lessee from employing a tenant on the land subject matter of the
lease agreement. An extensive and correct discussion of the statutory interpretation
of Sec. 6 of R.A. No. 3844, as amended, is provided by the minority view in Bernas
v. Court of Appeals.23 (Emphasis supplied)
As explained in Valencia, Section 6 of the Agricultural Land Reform Code was not
designed to vest in the enumerated personsthe owner, civil law lessee,
usufructuary, or legal possessora capacity that they did not previously have.
Stated otherwise, Section 6 was not the enabling legislation that, from the moment
of its adoption, was to "allow"24 them, as the Court of Appeals posits, to furnish
landholding to another who shall personally cultivate it, thereby making that other
person a tenant.
Valencia explained that Section 6 of the Agricultural Land Reform Code is a
subsequent restatement of a "precursor"25 provision: Section 8 of Republic Act No.
1199. This precursor reads:
SECTION 8. Limitation of Relation. The relation of landholder and tenant shall be
limited to the person who furnishes land, either as owner, lessee, usufructuary, or
legal possessor, and to the person who actually works the land himself with the aid
of labor available from within his immediate farm household.
Valencia noted that Section 8 assumed a pre-existing tenancy relation. From its
epigraph "Limitation of Relation," the import and effect of Section 8 is not to enable
or (to use the word of the Court of Appeals) to "allow" the persons enumerated to
make a tenant of another person. Rather, it is simply to settle that whatever
relation exists, it shall be limited to two persons only: first, the person who
furnished the land; and second, the person who actually works the land. "Once the
tenancy relation is established, the parties to that relation are limited to the persons
therein stated."26
As it was with the precursor, Section 8 of Republic Act No. 1199, so it is with
Section 6 of the Agricultural Land Reform Code:
Section 6 as already stated simply enumerates who are the parties to an existing
contract of agricultural tenancy, which presupposes that a tenancy already exists. It
does not state that those who furnish the landholding, i.e., either as owner, civil law
lessee, usufructuary, or legal possessor, are automatically authorized to employ a
tenant on the landholding. The reason is obvious. The civil lease agreement may be
restrictive. Even the owner himself may not be free to install a tenant, as when his
ownership or possession is encumbered or is subject to a lien or condition that he
should not employ a tenant thereon. This contemplates a situation where the
property may be intended for some other specific purpose allowed by law, such as,
its conversion into an industrial estate or a residential subdivision.27
Limiting the relation to these two persons, as well as preventing others from
intruding into this relation, is in keeping with the rationale for adopting Section 6 of
the Agricultural Land Reform Code:
According to Mr. Justice Guillermo S. Santos and CAR Executive Judge Artemio C.
Macalino, respected authorities on agrarian reform, the reason for Sec. 6 of R.A. No.
23 | JESSIE DELA PEA
3844 and Sec. 8 of R.A. No. 1199 in limiting the relationship to the lessee and the
lessor is to "discourage absenteeism on the part of the lessor and the custom of co-
tenancy" under which "the tenant (lessee) employs another to do the farm work for
him, although it is he with whom the landholder (lessor) deals directly. Thus, under
this practice, the one who actually works the land gets the short end of the bargain,
for the nominal or 'capitalist' lessee hugs for himself a major portion of the
harvest." This breeds exploitation, discontent and confusion. . . . The kasugpong,
kasapi, or katulong also works at the pleasure of the nominal tenant. When the new
law, therefore, limited tenancy relation to the landholder and the person who
actually works the land himself with the aid of labor available from within his
immediate farm household, it eliminated the nominal tenant or middleman from the
picture.
Another noted authority on land reform, Dean Jeremias U. Montemayor, explains
the rationale for Sec. 8 of R.A. No. 1199, the precursor of Sec. 6 of R.A. No. 3844:
Since the law establishes a special relationship in tenancy with important
consequences, it properly pinpoints the persons to whom said relationship shall
apply. The spirit of the law is to prevent both landholder absenteeism and tenant
absenteeism. Thus, it would seem that the discretionary powers and important
duties of the landholder, like the choice of crop or seed, cannot be left to the will or
capacity of an agent or overseer, just as the cultivation of the land cannot be
entrusted by the tenant to some other people. Tenancy relationship has been held
to be of a personal character.28 (Citations omitted)
The Court of Appeals banks on the following statement made by this court in its
1988 Decision in Co v. Intermediate Appellate Court:29
As long as the legal possessor of the land constitutes a person as a tenant-farmer
by virtue of an express or implied lease, such an act is binding on the owner of the
property even if he himself may not have given his consent to such an
arrangement. This is settled jurisprudence. The purpose of the law is to protect the
tenant-farmer's security of tenure, which could otherwise be arbitrarily terminated
by an owner simply manifesting his non-conformity to the relationship.30 (Citation
omitted)
However, the factual context in Co, which engendered the quoted pronouncement,
is not entirely identical with that of this case. This statement should, thus, not be
taken as binding in this case.
Co involved a parcel which was originally owned by Toribio Alarcon. Sometime
before the Second World War, Alarcon entered into a tenancy relation with Miguel
Alfonso. In 1955, Alarcon leased out the same parcel to Republic Broadcasting
System (DZBB). During this time, Alfonso maintained his tenancy. In 1968, Joveno
Roaring started helping Alarcon cultivate the land. Subsequently, Roaring took over
the cultivation "in his own right."31 Roaring's status as such was consolidated when,
with Alfonso's death in 1976, he took over the tenancy. Much later, the parcel was
acquired by Philippine Commercial and Industrial Bank in a foreclosure sale. The
parcel was then acquired by Anderson Co and, still much later, by Jose Chua. As Co
and Chua asked Roaring to vacate the parcel, Roaring filed a Complaint for
maintenance of possession and damages.32
The statement from Co that the Court of Appeals quoted was made in the course of
this court's consideration of Roaring's relation with DZBB. As this court recounted,
DZBB was the party receiving shares from the harvest. Thus, DZBB exercised and
benefitted from the rights and prerogatives that normally accrue to the landowner.
Stated otherwise, in Co, there was a clear finding that DZBB stood in the shoes of
the landowner:
We also find that Roaring, besides paying rentals, regularly shared the harvest from
the lot with the DZBB, which accepted the same and included it in the raffle of
prizes held during the regular Christmas program for its employees. That the DZBB
was not much interested in such share and that its board of directors had not
adopted a resolution recognizing the agricultural lease in favor of Roaring should not
signify that the lease does not exist. The acts of the DZBB clearly show that it had
impliedly allowed Roaring, in his own right, to continue with the original lease
arrangement it had with his father-in-law. Notably, the latter's possession and
cultivation of the land from the time it was leased to the DZBB in 1955 and until his
death in 1976 were never questioned by the company.
As long as the legal possessor of the land constitutes a person as a tenant-farmer
by virtue of an express or implied lease, such an act is binding on the owner of the
property even if he himself may not have given his consent to such an
arrangement. This is settled jurisprudence. The purpose of the law is to protect the
tenant-farmer's security of tenure, which could otherwise be arbitrarily terminated
by an owner simply manifesting his non-conformity to the relationship.33
There is nothing in this case to indicate that Hipolito exercised rights and
prerogatives that accrue to the landowner and which could imply that he was in
such a situation where he could exercise a landowner's competencies. Hipolito was
not clothed with authority to "allow" respondent to be the tenant himself. Hipolito,
as lessee, was entitled to possession of the disputed portion, and legally so. He was,
in this sense, a "legal possessor." However, his capacities ended here. There was
nothing that authorized him to enter into a tenancy relation with another.
II
Even if Section 6 of the Agricultural Land Reform Code were to be interpreted
loosely, petitioner as the landowner never consented to making respondent a
tenant.
This court has settled the requisites for tenancy, the core of which is the element of
consent. All these requisites must be demonstrated by substantial evidence;
otherwise, the person claiming to be a tenant is not entitled to security of tenure:
Tenants are defined as persons who in themselves and with the aid available
from within their immediate farm households cultivate the land belonging to or
possessed by another, with the latters consent, for purposes of production, sharing
the produce with the landholder under the share tenancy system, or paying to the
landholder a price certain or ascertainable in produce or money or both under the
leasehold tenancy system.
Based on the foregoing definition of a tenant, entrenched in jurisprudence are the
following essential elements of tenancy: 1) the parties are the landowner and the
tenant or agricultural lessee; 2) the subject matter of the relationship is an
agricultural land; 3) there is consent between the parties to the relationship; 4) the
purpose of the relationship is to bring about agricultural production; 5) there is
personal cultivation on the part of the tenant or agricultural lessee; and 6) the
harvest is shared between landowner and tenant or agricultural lessee. The
presence of all these elements must be proved by substantial evidence. Unless a
person has established his status as a de jure tenant, he is not entitled to security
24 | JESSIE DELA PEA
of tenure and is not covered by the Land Reform Program of the Government under
existing tenancy laws. Tenancy relationship cannot be presumed. Claims that one is
a tenant do not automatically give rise to security of tenure.34 (Emphasis supplied)
This court has previously recognized implied consent as sufficing to vest security of
tenure in a person claiming to be a tenant. In Ponce v. Guevarra35 and Joya v.
Pareja,36 this court considered the landowners' acts of personally negotiating for
extensions and for better terms with the persons purporting to be tenants as having
placed them in estoppel or otherwise demonstrating their ratification of tenancy.
Here, the Court of Appeals relied on petitioner's having supposedly received shares
of the harvest from respondent and his issuance of the corresponding receipts as
demonstrating his implied consent to respondent's tenancy.
We disagree.
While the receipts issued by petitioner bore respondent's name, petitioner never
failed to similarly indicate the name of David Hipolito, the person who, petitioner
maintains, is the valid lessee. Petitioner annexed copies of several of these receipts
to his Petition. These receipts consistently indicated:
J.G.N. TRADING
Tarcan, Conception, Baliwag, Bulacan
No. ...
Petsa ...........
Tinanggap kay MARTIN VICTORIA (DAVID HIPOLITO) ng STA. BARBARA, BALIUAG,
BULACAN and kabuuang . . . kaban ng palay na may timbang . . . kilo.37
Petitioner may have acknowledged actual delivery made by respondent. However,
his consistent inclusion of Hipolito's name indicates that, to his mind, it was still
Hipolito, albeit through another person making actual delivery, sharing the produce
with him. Respondent was recognized only as an agent acting for Hipolito.
Concededly, there is some ambiguity to these receipts. For instance, ' one could
make a case for saying that respondent and Hipolito were co-tenants cooperating in
delivering the produce to petitioner. Indeed, the receipts could have used more
definite language such as "for the account of," "on behalf of," or "para kay." We
reiterate however, the requisites of tenancy must be established by substantial
evidence. Logically, it is for the person averring tenancy to adduce such evidence.
Here, the evidence does not work to respondent's interest. At best, it evinces an
ambiguity; at worst, it proves that he was only an agent.
Just as damaging to respondent's cause is petitioner's act of demanding that
respondent vacate and surrender possession of the disputed portion as soon as
Hipolito died. Stated otherwise, as soon as the lease period that petitioner and
Hipolito agreed upon expired, petitioner expected that the disputed portion was to
be restored to his possession.
This definitively settles that, in petitioner's mind, only Hipolito was entitled to
possession precisely because it was only with Hipolito that petitioner agreed to cede
possession for a definite duration. Conversely, this definitively settles that petitioner
never recognized respondent as having any personal right to possess the disputed
portion.
The Court of Appeals merely noted that petitioner issued receipts to respondent and
stopped at that. As we have demonstrated, a more exacting consideration of the
totality of petitioner's actions belies any consent or subsequent ratification of
respondent's alleged tenancy.
To hold that respondent is the bona fide tenant of the disputed portion would be to
extend petitioner's dispossession for a period much longer that he had originally
contemplated. It puts him at the mercy of a person whom he recognized as a
tenant. This is precisely the "economic dislocation" that this court warned against
in Calderon. To hold as such would be to permit agrarian reform laws to be used as
a convenient artifice for investing in a supposed tenant rights that far exceed those
of the owner.
WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed
Decision dated July 31, 2006 and the assailed Resolution dated October 20, 2006 of
the Court of Appeals Eighth Division in CA-G.R. SP No. 94107, which recognized
respondent Martin P. Victoria as the bona fide tenant of the disputed portion,
are REVERSED and SET ASIDE. The July 4, 2005 Decision and March 17, 2006
Resolution of the Department of Agrarian Reform Adjudication Board
are REINSTATED.
Respondent Martin P. Victoria and all those claiming rights under him are ordered to
vacate and surrender possession of the disputed portion to petitioner Ismael V.
Crisostomo.
SO ORDERED.
G.R. No. 180476 June 26, 2013
RAYMUNDO CODERIAS, as represented by his Attorney-In-Fact, MARLON M.
CODERIAS, Petitioner,
vs.
ESTATE OF JUAN CIDOCO, represented by its Administrator, DR. RAUL R.
CARAG, Respondent.
DECISION
DEL CASTILLO, J.:
The Court cannot sanction the use of force to evict beneficiaries of land reform. Eviction using
force is reversion to the feudal system, where the landed elite have free rein over their poor
vassals. In effect, might is right.
This Petition for Review on Certiorari1 seeks the reversal of the April 27, 2007 Decision2 of the
Court of Appeals (CA) and its November 5, 2007 Resolution3 denying petitioner's Motion for
Reconsideration4 in CA-G.R. SP No. 86149.
Factual Antecedents
25 | JESSIE DELA PEA
The deceased Juan O. Chioco (Chioco) owned a 4-hectare farm in Lupao, Nueva Ecija (the
farm). As tiller of the farm,5 petitioner Raymundo Coderias was issued a Certificate of Land
Transfer (CLT) on April 26, 1974.6
In 1980, individuals connected with Chioco who was a former Governor of Nueva Ecija
threatened to kill petitioner if he did not leave the farm. His standing crops (corn and vegetables)
and house were bulldozed. For fear of his life, petitioner, together with his family, left the farm.7
In 1993 upon learning of Chiocos death, petitioner and his family re-established themselves on
the farm.8 On March 9, 19959 petitioner filed with the Department of Agrarian Reform
Adjudication Board (DARAB) in Talavera, Nueva Ecija a Petition10 against respondent Chiocos
estate praying that his possession and cultivation of the farm be respected; that the
corresponding agricultural leasehold contract between them be executed; that he be awarded
actual damages for the destruction of his house, his standing crops, unrealized harvest from
1980 up to 1993, attorneys fees and costs of litigation.11 The case was docketed as DARAB
Case No. 1572-NNE-95.
Respondent moved to dismiss12 the Petition, contending that petitioners cause of action has
prescribed under Section 3813 of Republic Act (RA) No. 3844,14 as amended, since the alleged
dispossession took place in 1980 but the Petition was filed only in 1995, or beyond the statutory
three-year period for filing such claims. Petitioner filed an opposition15 arguing that his
tenure/tillage should be deemed uninterrupted since his departure was due to threats made by
Chiocos henchmen; thus, the three-year prescriptive period should not be applied to his case.
Ruling of the Provincial Agrarian Reform Adjudicator (PARAD)
On September 10, 1996, the PARAD issued a Decision16 dismissing the Petition on the ground
of prescription. It adopted respondents argument, adding that although petitioner was forcibly
evicted from the farm, he was not without remedy under the law to assert his rights. Yet, he filed
the Petition only after 14 years, or in 1995. He is thus guilty of laches and is deemed to have
abandoned his rights and privileges under the agrarian laws.
Ruling of the DARAB
Petitioner appealed17 to the DARAB, which appeal was docketed as DARAB Case No. 6066.
On December 8, 2003, the DARAB issued a Decision,18 decreeing as follows:
WHEREFORE, the appealed decision is hereby set aside. A new judgment is entered:
1. Ordering the Respondent-Appellee to respect and maintain the Petitioner-Appellant
in his peaceful possession and cultivation of the subject landholding; and
2. Ordering the Respondent-Appellee to reimburse Raymundo Coderias of the money
equivalent representing the latters unrealized harvest from 1980 to 1993 or if he has
not been allowed to re-enter up to the time this decision is rendered then his share
from the harvest should be computed from 1980 to the present, and ordering the
MARO of the municipality to assist the parties in the computation thereof.
SO ORDERED.19
Respondent filed a Motion for Reconsideration20 which, in an August 3, 2004 Resolution,21 the
DARAB denied.
Ruling of the Court of Appeals
Respondent went up to the CA by Petition for Review,22 insisting that petitioners cause of action
has been barred by prescription and laches.
On April 27, 2007, the CA rendered the assailed Decision, the dispositive portion of which reads,
as follows:
WHEREFORE, in view of the foregoing, the Decision, dated December 8, 2003, and the
Resolution, dated August 3, 2004, of the DARABCentral Office in DARAB Case No. 6066 are
hereby SET ASIDE. The Decision, dated September 10, 1996 of the Provincial Adjudicator in
DARAB Case No. 1572 NNE 95 is ordered REINSTATED. No costs.
23
SO ORDERED.
The CA held that undoubtedly, a tenancy relation existed between Chioco and petitioner under
RA 3844.24Nevertheless, it found that petitioners action had prescribed, in that the complained
acts occurred in 1980 but petitioner filed DARAB Case No. 1572-NNE-95 only in 1995, or
beyond the three-year prescriptive period under Section 38 of RA 3844. The CA held that this
delayed action by petitioner amounts to laches as well.25
26
On May 23, 2007, petitioner filed a Manifestation with Motion for Reconsideration. However,
the CA denied the same via the assailed November 5, 2007 Resolution.
Petitioner thus timely filed the instant Petition for Review on Certiorari.
Issue
In this Petition which seeks a reversal of the CA pronouncement and reinstatement of the
December 8, 2003 DARAB Decision, petitioner submits this lone issue for the Courts resolution:
AS A RULE, THE FINDINGS OF FACT OF THE COURT OF APPEALS ARE FINAL AND
CONCLUSIVE AND CANNOT BE REVIEWED ON APPEAL TO THE SUPREME COURT.
HOWEVER, THE FINDINGS OF FACT OF THE COURT OF APPEALS MAY BE REVIEWED
BY THE SUPREME COURT ON APPEAL BY CERTIORARI WHERE THERE IS GRAVE
ABUSE OF DISCRETION. AT BAR, THE HONORABLE COURT OF APPEALS GRAVELY
ABUSED ITS DISCRETION IN FINDING THAT PRESCRIPTION HAD SET IN SINCE IT
DISREGARD [sic] THE PRINCIPLE LAID DOWN IN SECTIONS 3, 3.1, AND 3.2, RULE I OF
THE 2003 DARAB RULES OF PROCEDURE.27
Petitioners Arguments
26 | JESSIE DELA PEA
Petitioner contends in his Petition and Reply28 that the three-year prescriptive period under
Section 38 of RA 3844 should be counted from the time that the intimidation by Chioco ceased
upon his death. Petitioner argues that while the intimidation and threats against him and his
family continued, the prescriptive period to file a case under RA 3844 should not run.
Petitioner adds that Section 38 should not be applied to his case, as Sections 3, 3.1 and 3.2,
Rule I29 of the 2003 DARAB Rules of Procedure allow for the relaxation of technical rules,
procedures, and evidence, as well as the adoption of measures that are appropriate and
applicable to agrarian disputes. He likewise cites the pronouncement of the DARAB to the effect
that Section 38 is not applicable because the case filed was precisely to obtain security and
protection from Chiocos acts of intimidation against him, which continued until Chiocos death in
1993. Since it was Chiocos threats and intimidation which drove him away and kept him from
returning to the farm and filing the appropriate case, petitioner suggests that the applicable
prescriptive period should be reckoned from the time that he returned to the farm when the
threats and intimidation ceased.
Respondents Arguments
Respondent, in its Comment,30 insists that petitioners cause of action had prescribed. It also
argues that, as correctly found by the CA, Section 38 of RA 3844 should apply in determining
whether petitioners cause of action has prescribed. RA 3844 is a special law and its provisions
on prescription not those of the Civil Code, which is a general law should apply to the parties
agrarian dispute.
Our Ruling
The Court grants the Petition.
Petitioner availed of the remedy of Petition for Review on Certiorari, but claimed that the CA
committed grave abuse of discretion, which accusation properly pertains to an original Petition
for Certiorari under Rule 65. However, this should not affect his case for the CA committed a
glaring error on a question of law which must be reversed.
It must be recalled from the facts that the farm has been placed under the coverage of RA 3844.
It is also undisputed that a tenancy relation existed between Chioco and petitioner. In fact, a CLT
had been issued in favor of the petitioner; thus, petitioner already had an expectant right to the
farm.31 A CLT serves as "a provisional title of ownership over the landholding while the lot owner
is awaiting full payment of just compensation or for as long as the tenant-farmer is an amortizing
owner. This certificate proves inchoate ownership of an agricultural land primarily devoted to rice
and corn production. It is issued in order for the tenant-farmer to acquire the land he was
tilling."32 Since the farm is considered expropriated and placed under the coverage of the land
reform law,33Chioco had no right to evict petitioner and enter the property. More significantly,
Chioco had no right to claim that petitioners cause of action had prescribed.
x x x The Land Reform Code forges by operation of law, between the landowner and the farmer
be he a leasehold tenant or temporarily a share tenant a vinculum juris with certain vital
consequences, such as security of tenure of the tenant and the tenant's right to continue in
possession of the land he works despite the expiration of the contract or the sale or transfer of
the land to third persons, and now, more basically, the farmer's pre-emptive right to buy the land
he cultivates under Section 11 of the Code, as well as the right to redeem the land, if sold to a
third person without his knowledge, under Section 12 of this Code.
To strengthen the security of tenure of tenants, Section 10 of R.A. No. 3844 provides that the return to Nueva Ecija. He could not file the case anywhere else; any other agrarian tribunal or
agricultural leasehold relation shall not be extinguished by the sale, alienation or transfer of the agency would have declined to exercise jurisdiction.
legal possession of the landholding. With unyielding consistency, we have held that transactions
involving the agricultural land over which an agricultural leasehold subsists resulting in change of
Notably, on various instances, we have set aside technicalities for reasons of equity. We are
ownership, such as the sale or transfer of legal possession, will not terminate the rights of the
inclined to apply the same liberality in view of the peculiar situation in this case.35
agricultural lessee who is given protection by the law by making such rights enforceable against
the transferee or the landowner's successor in interest. x x x
It is worth reiterating at this juncture that respondent had no right to claim prescription because a
CLT had already been issued in favor of petitioner. The farm is considered expropriated and
In addition, Section 7 of the law enunciates the principle of security of tenure of the tenant, such
placed under the coverage of the land reform law. As such, respondent had neither the right to
that it prescribes that the relationship of landholder and tenant can only be terminated for causes
evict petitioner nor to claim prescription. In Catorce v. Court of Appeals, 36 this Court succinctly
provided by law. x x x Security of tenure is a legal concession to agricultural lessees which they
held:
value as life itself and deprivation of their landholdings is tantamount to deprivation of their only
means of livelihood. Perforce, the termination of the leasehold relationship can take place only
for causes provided by law. x x x34 (Emphasis supplied and citations omitted) Petitioner had been adjudged the bona fide tenant of the landholding in question. Not only did
respondent fail to controvert this fact, but he even impliedly admitted the same in his Answer to
petitioners Complaint when he raised, as one of his defenses, the alleged voluntary surrender of
The CA has failed to recognize this vinculum juris, this juridical tie, that exists between the
the landholding by petitioner. Respondent Court should have taken this fact into consideration
petitioner and Chioco, which the latter is bound to respect.
for tenants are guaranteed security of tenure, meaning, the continued enjoyment and
possession of their landholding except when their dispossession had been authorized by virtue
Under Section 8 of RA 3844, the agricultural leasehold relation shall be extinguished only under of a final and executory judgment, which is not so in the case at bar.
any of the following three circumstances, to wit: "(1) abandonment of the landholding without the
knowledge of the agricultural lessor; (2) voluntary surrender of the landholding by the agricultural
The Agricultural Land Reform Code has been designed to promote economic and social stability.
lessee, written notice of which shall be served three months in advance; or (3) absence of the
Being a social legislation, it must be interpreted liberally to give full force and effect to its clear
persons under Section 9 to succeed the lessee x x x." None of these is obtaining in this case. In
intent, which is to achieve a dignified existence for the small farmers and to make them more
particular, petitioner cannot be said to have abandoned the landholding. It will be recalled that
independent, self-reliant and responsible citizens, and a source of genuine strength in our
Chioco forcibly ejected him from the property through threats and intimidation. His house was
democratic society.37
bulldozed and his crops were destroyed. Petitioner left the farm in 1980 and returned only in
1993 upon learning of Chiocos death. Two years after, or in 1995, he filed the instant Petition.
At any rate, respondent cannot legally invoke the strict application of the rules on prescription
because the failure of petitioner to immediately file the Petition was due to its own
Indeed, Section 38 of RA 3844 specifically provides that "an action to enforce any cause of
maneuvers.38 This Court should not allow respondent to profit from its threats and intimidation.
action under this Code shall be barred if not commenced within three years after such cause of
Besides, if we subscribe to respondents ratiocination that petitioners cause of action had
action accrued." In this case, we deem it proper to reckon petitioners cause of action to have
already prescribed, it would lead to an absurd situation wherein a tenant who was unlawfully
accrued only upon his knowledge of the death of Chioco in 1993, and not at the time he was
deprived of his landholding would be barred from pursuing his rightful claim against the
forcibly ejected from the landholding in 1980. For as long as the intimidation and threats to
transgressor.39
petitioners life and limb existed, petitioner had a cause of action against Chioco to enforce the
recognition of this juridical tie. Since the threats and intimidation ended with Chiocos death,
petitioners obligation to file a case to assert his rights as grantee of the farm under the agrarian We have ruled time and again that litigants should have the amplest opportunity for a proper and
laws within the prescriptive period commenced. These rights, as enumerated above, include the just disposition of their cause free, as much as possible, from the constraints of procedural
right to security of tenure, to continue in possession of the land he works despite the expiration technicalities. In the interest of its equity jurisdiction, the Court may disregard procedural lapses
of the contract or the sale or transfer of the land to third persons, the pre-emptive right to buy the so that a case may be resolved on its merits. Rules of procedure should promote, not defeat,
land, as well as the right to redeem the land, if sold to a third person without his knowledge. substantial justice. Hence, the Court may opt to apply the Rules liberally to resolve substantial
issues raised by the parties.
Petitioner may not be faulted for acting only after Chioco passed away for his life and the lives of
members of his family are not worth gambling for a piece of land. The bulldozing of his house Rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted
his castle is only an example of the fate that could befall them. Under the circumstances, it is to help secure, not override, substantial justice, and thereby defeat their very ends. Indeed, rules
therefore understandable that instead of fighting for the farm, petitioner opted to leave and keep of procedure are mere tools designed to expedite the resolution of cases and other matters
his family safe. Any man who cherishes his family more than the most valuable material thing in pending in court. A strict and rigid application of the rules that would result in technicalities that
his life would have done the same. tend to frustrate rather than promote justice must be avoided. 40

Force and intimidation restrict or hinder the exercise of the will, and so long as they exist, "It is a better rule that courts, under the principle of equity, will not be guided or bound strictly by
petitioner is deprived of his free will. He could not occupy his farm, plant his crops, tend to them, the statute of limitations or the doctrine of laches when to do so, manifest wrong or injustice
and harvest them. He could not file an agrarian case against Chioco, for that meant having to would result."41 It must also be emphasized that "the statute of limitations has been devised to

27 | JESSIE DELA PEA

operate primarily against those who slept on their rights and not against those desirous to act
but cannot do so for causes beyond their control."42
Petitioners tenure on the farm should be deemed uninterrupted since he could not set foot
thereon. And if he could not make the required payments to Chioco or the Land Bank of the
Philippines, petitioner should not be faulted. And, since his tenure is deemed uninterrupted, any
benefit or advantage from the land should accrue to him as well.
Our law on agrarian reform is a legislated promise to emancipate poor farm families from the
bondage of the soil. P.D. No. 27 was promulgated in the exact same spirit, with mechanisms
which hope to forestall a reversion to the antiquated and inequitable feudal system of land
ownership. It aims to ensure the continued possession, cultivation and enjoyment by the
beneficiary of the land that he tills which would certainly not be possible where the former owner
is allowed to reacquire the land at any time following the award in contravention of the
governments objective to emancipate tenant-farmers from the bondage of the soil.43
WHEREFORE, the Petition is GRANTED. The April 27, 2007 Decision and November 5, 2007
Resolution of the Court of Appeals in CA-G.R. SP No. 86149 are hereby ANNULLED and SET
ASIDE. The December 8, 2003 Decision of the Department of Agrarian Reform Adjudication
Board is ordered REINSTATED and AFFIRMED.
SO ORDERED.
G.R. No. 174588 December 11, 2013
DAV AO NEW TOWN DEVELOPMENT CORPORATION, Petitioner,
vs.
SPOUSES GLORIA ESPINO SALIGA and CESAR SALIGA, and SPOUSES DEMETRIO
EHARA and ROBERTA SUGUE EHARA, Respondents.
DECISION
BRION, J.:
We pass upon the petition for review on certiorari, 1 under Rule 45 of the Rules of Court,
challenging the March 28, 2006 decision2 and the September 5, 2006 resolution3 of the Court of
Appeals (CA) in CA-G.R. SP No. 79377. This CA ruling affirmed the January 12, 2001
decision4 of the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case
No. 7775. The DARAB set aside the July 6, 1998 decision5 of the Provincial Agrarian Reform
Adjudicator (PARAD) that ruled in favor of petitioner Davao New Town Development
Corporation (DNTDC).
The Factual Antecedents
At the root of the present controversy are two parcels of land 4.9964 hectares6 and 2.5574
hectares7 (subject property) - situated in Catalunan Pequeo, Davao City and originally
registered in the name of Atty. Eugenio Mendiola (deceased).
28 | JESSIE DELA PEA
On February 5, 1998,8 the respondents - spouses Gloria Espino Saliga and Cesar
Saliga (spouses Saliga) and spouses Demetrio Ehara and Roberta Sugue Ehara (spouses
Ehara), (collectively referred to as respondents) - filed before the Office of the PARAD in Davao
City a complaint for injunction, cancellation of titles and damages against DNTDC. They
amended this complaint on February 13, 1998.
In their complaint and amended complaint, the respondents claimed that they and their parents,
from whom they took over the cultivation of the landholding, had been tenants of the property as
early as 1965. On August 12, 1981, the respondents and Eugenio executed a five-year lease
contract.9 While they made stipulations regarding their respective rights and obligations over the
landholding, the respondents claimed that the instrument was actually a device Eugenio used to
evade the land reform law.
The respondents also argued that pursuant to the provisions of Presidential Decree (P.D.) No.
27, they, as tenants, were deemed owners of the property beginning October 21, 1972 (the Acts
effectivity date); thus, the subsequent transfer of the property to DNTDC was not valid. The
respondents added that DNTDC could not have been a buyer in good faith as it did not verify the
status of the property whether tenanted or not tenanted - prior to its purchase. The
respondents submitted, among others, the pertinent tax declarations showing that the property
was agricultural as of 1985.
In its answer, DNTDC alleged in defense that it purchased the property in good faith from the
previous owners (Paz M. Flores and Elizabeth M. Nepumuceno)10 in 1995. At that time, the
alleged tenancy relationship between the respondents and Eugenio had already expired
following the expiration of their lease contracts in 1986. DNTDC also claimed that prior to the
sale, the Davao City Office of the Zoning Administrator confirmed that the property was not
classified as agricultural; it pointed out that the affidavit of non-tenancy executed by the vendors
affirmed the absence of any recognized agricultural lessees on the property. DNTDC added that
the property had already been classified to be within an "urban/urbanizing zone" in the "1979-
2000 Comprehensive Land Use Plan for Davao City" that was duly adopted by the City Council
of Davao City and approved by the Human Settlement Regulatory Commission (HSRC) (now the
Housing and Land Use Regulatory Board [HLURB]).
In its decision of July 6, 1998, the PARAD ordered the DNTDC to pay the spouses Saliga the
sum of 20,000.00 and the spouses Ehara the sum of 15,000.00 as disturbance
compensation, and to allocate to each of the respondent spouses a 150-square meter homelot.
While the PARAD conceded that the respondents were tenants of the property, it nevertheless
ruled that the property had already been reclassified from agricultural to non-agricultural uses
prior to June 15, 1988, the date when Republic Act (R.A.) No. 6657 (the Comprehensive
Agrarian Reform Law of 1988) took effect. Thus, since R.A. No. 6657 covers only agricultural
lands, the property fell outside its coverage.
The respondents appealed the case to the DARAB.
The ejectment case before the MTCC
Pending resolution of the appeal before the DARAB, DNTDC filed before the Municipal Trial
Court in Cities (MTCC) of Davao City a complaint for unlawful detainer11 against Demetrio
Ehara, Jr., Reynaldo Saliga and Liza Saliga, the children of respondent spouses Ehara and
spouses Saliga. DNTDC claimed that it owned the 2.5574-hectare portion of the property which
the respondents children had been occupying by its mere tolerance. Despite its repeated
demands, the respondents children refused to vacate and continued to illegally occupy it.
In their answer, the respondents children raised the issue of lack of jurisdiction, arguing that the
case involved an agrarian dispute. They contended that the law considers them immediate
members of the farm household, to whom R.A. No. 3844 and R.A. No. 6657 extend tenurial
security. Thus, they claimed that they, as tenants, were entitled to continue occupying the
disputed portion.
On December 20, 2000, the MTCC rendered its decision12 granting the DNTDCs complaint and
ordering the respondents children to vacate the 2.5574-hectare portion of the property. The
MTCC ruled that the respondents children were not tenants of the property because they failed
to prove that their stay on the premises was by virtue of a tenancy agreement and because they
had been occupying portions different from their parents landholding. The MTCC also ruled that
the 2.5574-hectare portion was no longer agricultural and was thus removed from the coverage
of R.A. No. 6657.
The prohibition case before the RTC
The respondents children did not appeal the MTCC decision. Instead, on June 1, 2001, they
filed before the Regional Trial Court (RTC), Branch 17, Davao City a petition for
Prohibition13 against DNTDC to enjoin the execution of the MTCC decision. They repeated the
defenses and allegations in their pleading before the MTCC. The children of the spouses Saliga
Liza and Reynaldo - however added that Cesar had already died; hence, they were filing the
prohibition case in their own right as heirs/successors-in-interest of Cesar.
On November 29, 2001, the respondents children and DNTDC entered into a compromise
agreement.14 The respondents children undertook to voluntarily and peacefully vacate the
2.5574-hectare portion of the property and to remove and demolish their respective houses built
on its premises, while DNTDC agreed to give each of them the amount of 20,000.00 as
financial assistance. The RTC approved the compromise agreement in its December 7, 2001
decision.15
The Ruling of the DARAB
In its decision16 of January 12, 2001, the DARAB reversed and set aside the PARADs ruling.
The DARAB ordered DNTDC and all persons acting in its behalf to respect and maintain the
respondents in the peaceful possession and cultivation of the property, and the Municipal
Agrarian Reform Officer (MARO) to enjoin the DNTDC from disturbing and/or molesting the
respondents in their peaceful possession and cultivation of it.
As the PARAD did, the DARAB declared that a tenancy relationship existed between Eugenio
and the respondents, which was not extinguished by the expiration of the five-year term stated in
their lease contracts. Thus, when DNTDC purchased the property, it had been subrogated to the
rights and obligations of the previous landowner pursuant to the provisions of R.A. No. 3844. 17
Unlike the PARAD, however, the DARAB was not convinced that the property had already been
reclassified to non-agricultural uses so as to remove it from the coverage of R.A. No. 6657. With
Administrative Order No. 5, series of 1994 as basis, the DARAB held that the alleged
reclassification of the property did not and could not have divested the respondents of their
29 | JESSIE DELA PEA
rights as "deemed owners" under P.D. No. 27. The DARAB also pointed out that while Davao
City Ordinance No. 363, series of 1982 (adopting the Comprehensive Development Plan of
Davao City), reclassified the property to be within the "urban/urbanizing zone," the DNTDC did
not submit the required certifications from the HLURB, adopting the zoning ordinance, and from
the DAR, approving the conversion to make the reclassification valid.
When the DARAB denied the DNTDCs motion for reconsideration in its August 28, 2003
resolution,18 the DNTDC elevated the case to the CA via a petition for review.19
The Ruling of the CA
In its March 28, 2006 decision,20 the CA affirmed in toto the January 12, 2001 decision of the
DARAB. The CA similarly declared that the tenancy relationship established between the
respondents and Eugenio was not extinguished by the expiration of the five-year term of their
lease contracts or by the subsequent transfer of the property to DNTDC. The CA noted that both
the DARAB and the PARAD arrived at the same findings and that the DNTDC impliedly admitted
in its pleadings the existence of the tenancy relationship.
The CA was also convinced that the property was still agricultural and was, therefore, covered
by R.A. No. 6657. While the CA conceded that the conversion of the use of lands that had been
reclassified as residential, commercial or industrial, prior to the effectivity of R.A. No. 6657, no
longer requires the DARs approval, the CA pointed out that the landowner must first comply with
certain pre-conditions for exemption and/or conversion. Among other requirements, the
landowner must secure an exemption clearance from the DAR. This exemption clearance shall
be issued after the landowner files the certifications issued by the deputized zoning
administrator, stating that the land had been reclassified, and by the HLURB, stating that it had
approved the pertinent zoning ordinance, with both the reclassification and the approval carried
out prior to June 15, 1988.
In this case, the CA held that DNTDC failed to secure and present any exemption clearance.
The CA also pointed out that: (1) Davao City Ordinance No. 363, series of 1982, adopting the
Comprehensive Development Plan of Davao City did not substantially show that it had
reclassified the property from agricultural to non-agricultural uses; (2) DNTDC failed to submit
during the proceedings before the PARAD and the DARAB the HLURB certification allegedly
approving Davao City Ordinance No. 363, series of 1982; (3) while DNTDC attached to its
motion for reconsideration of the DARABs decision a certification from the HLURB stating that
by resolution (Resolution No. R-39-4) dated July 31, 1980, it approved the Comprehensive
Development Plan, yet at the time of the alleged HLURB approval, the pertinent zoning
ordinance - Davao City Ordinance No. 363, series of 1982 - adopting such plan had not yet been
enacted; and (4) the HLURB certification that DNTDC presented referred to a parcel of land
subject of another case.
DNTDC filed the present petition after the CA denied its motion for reconsideration21 in the CAs
September 5, 2006 resolution.22
The Petition
In its present petition,23 DNTDC argues that the CA seriously erred when it: (1) failed to consider
the fact that the respondents violated the compromise agreement; (2) ruled that a tenancy
relationship exists between it and the respondents; and (3) declared that the subject property is
agricultural.24
Directly addressing the CAs ruling, DNTDC argues that: first, the respondents, in the We resolve to GRANT the petition.
compromise agreement, categorically agreed to voluntarily vacate the property upon receipt of
the stated financial assistance. Since the RTC approved the compromise agreement and the
Preliminary considerations
respondents had already received the agreed financial assistance, the CA should have
considered these incidents that immediately bound the respondents to comply with their
undertaking to vacate. At the outset, we reiterate the settled rule that only questions of law may be raised in a petition
for review on certiorari under Rule 45 of the Rules of Court.27 Questions of facts are not allowed
in a Rule 45 petition because this Court is not a trier of facts. 28 The Court generally accords
Second, no tenancy relationship exists between DNTDC and the respondents. DNTDC
respect, if not finality, to the factual findings of quasi-judicial bodies, among them is the DARAB,
maintains that while a tenancy relationship existed between the respondents and Eugenio, this
as these bodies are deemed experts in their respective fields. 29The question of the existence of
relationship was terminated when the MTCC ordered the respondents to vacate the property. It
a tenancy relationship intertwined with the question of reclassification requires for its resolution a
emphasizes that this MTCC decision that ordered the respondents to vacate the property had
review of the factual findings of the agricultural tribunals and of the CA. These are questions we
already become final and executory upon the respondents failure to seasonably appeal. DNTDC
cannot generally touch in a Rule 45 petition.
adds that after the respondents lease contract with Eugenio expired and the latter simply
allowed the former to continue occupying the property, the respondents became bound by an
implied promise to vacate its premises upon demand. Thus, when, as the new owner, it Nevertheless, the case also presents a legal question as the issue of tenancy relationship is
demanded the return of the property, the respondents were obligated to comply with their both factual and legal. Moreover, the findings of the PARAD conflict with those of the DARAB.
implied promise to vacate. These circumstances impel us to disregard the above general rule and to address both the
presented factual and legal issues in view of their social justice implications and the duty to do
justice that this Court has sworn to uphold.
Finally, the property is no longer agricultural, contrary to the findings of the DARAB and the CA.
DNTDC points out that the proceedings before the PARAD had sufficiently addressed this issue,
which the CA recognized in the assailed decision. Thus, DNTDC contends that the findings of We now resolve the merits of the petition.
the PARAD should prevail over those of the DARAB.
The subject property had been
In its reply25 to the respondents comment, DNTDC additionally argues that the MTCC and the
RTC cases are closely intertwined with and relevant to the present case. It points out that
reclassified as non-agricultural prior
Reynaldo and Liza categorically stated in their petition in the RTC case that they were suing in
their own right as heirs/successors-in-interest of Cesar. Consequently, the spouses Saliga, as
represented and succeeded by Reynaldo and Liza, are bound by the compromise agreement to June 15, 1988; hence, they are no
that the latter signed in the RTC case.
longer covered by R.A. No. 6657
The Case for the Respondents
At the core of the controversy is the questioned reclassification of the property to non-agricultural
In their comment,26 the respondents argue that the MTCC and the RTC cases do not bear any uses. This issue is intertwined with and on which depends the resolution of the issue concerning
significance to the present controversy. They point out that the parties in the MTCC and the RTC the claimed agricultural leasehold relationship.
cases, aside from DNTDC, were Demetrio Ehara, Jr., Reynaldo and Liza who are undeniably
different from them.
In reversing the PARAD and holding that the property was still agricultural, the DARAB
considered the Comprehensive Development Plan (approved by the HSRC through Board
Relying on the ruling of the CA, the respondents also argue that a tenancy relationship exists Resolution R-39-4 dated July 31, 1980) and Davao City Ordinance No. 363, series of 1982
between them and DNTDC and that the property is still agricultural. The respondents quoted in (adopting the Comprehensive Development Plan) as invalid reclassification measures. It gave as
toto the CAs discussions on these issues to support their position. reason the absence of the requisite certification from the HLURB and the approval of the DAR.
In the alternative, and citing P.D. No. 27, in relation with R.A. No. 6657, as basis, the DARAB
The Issues considered the alleged reclassification ineffective so as to free the property from the legal effects
of P.D. No. 27 that deemed it taken under the governments operation land
transfer (OLT) program as of October 21, 1972.
In sum, the issues for our resolution are: (1) whether the property had been reclassified from
agricultural to non-agricultural uses prior to June 15, 1988 so as to remove it from the coverage
We differ from, and cannot accept, the DARABs position.
of R.A. No. 6657; (2) whether an agricultural leasehold or tenancy relationship exists between
DNTDC and the respondents; and (3) whether the compromise agreement signed by the
respondents children in the RTC case binds the respondents. We hold that the property had been reclassified to non-agricultural uses and was, therefore,
already outside the coverage of the Comprehensive Agrarian Reform Law (CARL) after it took
The Courts Ruling effect on July 15, 1988.

30 | JESSIE DELA PEA

1. Power of the local government units to
reclassify lands from agricultural to nonagricultural
uses; the DAR approval is not
required
Indubitably, the City Council of Davao City has the authority to adopt zoning resolutions and
ordinances. Under Section 3 of R.A. No. 226430 (the then governing Local Government
Code), municipal and/or city officials are specifically empowered to "adopt zoning and
subdivision ordinances or regulations in consultation with the National Planning
Commission."31
In Pasong Bayabas Farmers Asso., Inc. v. Court of Appeals,32 the Court held that this power of
the local government units to reclassify or convert lands to non-agricultural uses is not subject to
the approval of the DAR.33 There, the Court affirmed the authority of the Municipal Council of
Carmona to issue a zoning classification and to reclassify the property in dispute from
agricultural to residential through the Councils Kapasiyahang Bilang 30, as approved by the
HSRC.
In the subsequent case of Junio v. Secretary Garilao,34 this Court clarified, once and for all, that
"with respect to areas classified and identified as zonal areas not for agricultural uses, like those
approved by the HSRC before the effectivity of RA 6657 on June 15, 1988, the DARs clearance
is no longer necessary for conversion."35 The Court in that case declared the disputed
landholding as validly reclassified from agricultural to residential pursuant to Resolution No.
5153-A of the City Council of Bacolod.
Citing the cases of Pasong Bayabas Farmers Asso., Inc. and Junio, this Court arrived at
significantly similar ruling in the case of Agrarian Reform Beneficiaries Association (ARBA) v.
Nicolas.36
Based on these considerations, we hold that the property had been validly reclassified as non-
agricultural land prior to June 15, 1988. We note the following facts established in the records
that support this conclusion: (1) the Davao City Planning and Development Board prepared the
Comprehensive Development Plan for the year 1979-2000 in order to provide for a
comprehensive zoning plan for Davao City; (2) the HSRC approved this Comprehensive
Development Plan through Board Resolution R-39-4 dated July 31, 1980; (3) the HLURB
confirmed the approval per the certification issued on April 26, 2006; 37 (4) the City Council of
Davao City adopted the Comprehensive Development Plan through its Resolution No. 894 and
City Ordinance No. 363, series of 1982;38 (5) the Office of the City Planning and Development
Coordinator, Office of the Zoning Administrator expressly certified on June 15, 1995 that per City
Ordinance No. 363, series of 1982 as amended by S.P. Resolution No. 2843, Ordinance No.
561, series of 1992, the property (located in barangay Catalunan Pequeo) is within an
"urban/urbanizing" zone;39 (6) the Office of the City Agriculturist confirmed the above
classification and further stated that the property is not classified as prime agricultural land and
is not irrigated nor covered by an irrigation project as certified by the National Irrigation
Administration, per the certification issued on December 4, 1998;40 and (7) the HLURB, per
certification dated May 2, 1996,41 quoted the April 8, 1996 certification issued by the Office of the
City Planning and Development Coordinator stating that "the Mintal District which includes
31 | JESSIE DELA PEA
barangay Catalunan Pequeo, is identified as one of the urbaning [sic] district centers and
priority areas and for development and investments in Davao City."
We note that while the DNTDC attached, to its motion for reconsideration of the DARABs
decision, the May 2, 1996 certification of the HLURB, both the DARAB and the CA simply
brushed this aside on technicality. The CA reasoned that the certificate was belatedly presented
and that it referred to a parcel of lot subject of another case, albeit, similarly involving DNTDC,
as one of the parties, and property located within the same district.
We cannot support this position of the CA for the following reasons: first, while, generally,
evidence submitted past the presentation-of-evidence stage is no longer admissible and should
be disregarded for reasons of fairness, strict application of this general rule may be relaxed. By
way of exception, we relax the application of the rules when, as here, the merits of the case call
for, and the governing rules of procedure explicitly command, a relaxation. Under Section 3,
Rule I of the 1994 DARAB New Rules of Procedure (the governing DARAB rules), the DARAB
shall not be bound by technical rules of procedure and evidence provided under the Rules of
Court, which shall not apply even in a suppletory character, and shall employ all reasonable
means to ascertain facts of every case.
Time and again, this Court has held that "rules of procedure ought not to be applied in a very
rigid, technical sense, for they are adopted to help secure, not override, substantial
justice."42 Thus, while DNTDC, in this case, attached the May 2, 1996 HLURB certification only
in its motion for reconsideration, the DARAB should have considered it, especially in the light of
the various documents that DNTDC presented to support its position that the property had
already been reclassified as non-agricultural land prior to June 15, 1988.
And second, granting arguendo that the May 2, 1996 HLURB certification was issued in relation
to another case that involved a different parcel of land, it is not without value. The clear-cut
declarations of the HLURB in the certification, which the DARAB and the CA should have
considered and which we find sufficiently convincing, show that Catalunan Pequeo (where the
property lies) is classified as within the urbanizing district centers of Davao City. Thus, for all
intents and purposes, the May 2, 1996 HLURB certification satisfied the purpose of this
requirement, which is to establish by sufficient evidence the propertys reclassification as non-
agricultural land prior to June 15, 1988.
Considering that the property is no longer agricultural as of June 15, 1988, it is removed from the
operation of R.A. No. 6657. By express provision, the CARL covers only those public or private
lands devoted or suitable for agriculture,43 the operative word being agricultural. Under Section
3(c) of R.A. No. 6657, agricultural lands refer to lands devoted to agricultural activity and not
otherwise classified as mineral, forest, residential, commercial, or industrial land. 44 In its
Administrative Order No. 1, series of 1990,45 the DAR further explained the term "agricultural
lands" as referring to "those devoted to agricultural activity as defined in R.A. 6657 and x x x 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." If only to emphasize, we reiterate only
those parcels of land specifically classified as agricultural are covered by the CARL; any parcel
of land otherwise classified is beyond its ambit.
2. No vested rights over the
property accrued to the
respondents under P.D. No. 27
Under P.D. No. 27, tenant-farmers of rice and corn agricultural lands are "deemed owners" of
the land that they till as of October 21, 1972. Under these terms, vested rights cannot simply be
taken away by the expedience of adopting zoning plans and ordinances reclassifying an
agricultural land to an "urban/urbanizing" area.
We need to clarify, however, that while tenant farmers of rice and corn lands are "deemed
owners" as of October 21, 1972 following the provisions of P.D. No. 27, this policy should not be
interpreted as automatically vesting in them absolute ownership over their respective tillage. The
tenant-farmers must still first comply with the requisite preconditions, i.e., payment of just
compensation and perfection of title before acquisition of full ownership. 46
In Del Castillo v. Orciga,47 the Court explained that land transfer under P.D. No. 27 is effected in
two (2) stages: first, the issuance of a certificate of land transfer (CLT); and second, the
issuance of an emancipation patent (EP). The first stage - issuance of the CLT - serves as the
governments recognition of the tenant farmers inchoate right as "deemed owners" of the land
that they till.48 The second stage issuance of the EP perfects the title of the tenant farmers
and vests in them absolute ownership upon full compliance with the prescribed
requirements.49As a preliminary step, therefore, the CLT immediately serves as the tangible
evidence of the governments recognition of the tenant farmers inchoate right and of the
subjection of the particular landholding to the governments OLT program.
In this case, the record does not show that the respondents had been issued CLTs. The CLT
could have been their best evidence of the governments recognition of their inchoate right as
"deemed owners" of the property. Similarly, the record does not show that the government had
placed the property under its OLT program or that the government, through the MARO,
recognized the respondents as the actual tenants of the property on the relevant date, thereby
sufficiently vesting in them such inchoate right.
Consequently, this Court can safely conclude that no CLTs had ever been issued to the
respondents and that the government never recognized any inchoate right on the part of the
respondents as "deemed owners" of the property. In effect, therefore, no vested rights under
P.D. No. 27, in relation to R.A. No. 6657, accrued to the respondents such that when the
property was reclassified prior to June 15, 1988, it did not fall, by clear legal recognition within
the coverage of R.A. No. 6657.
Interestingly, the contract of lease executed between Eugenio and the respondents shows that
the property was primarily planted with coconut and coffee trees and, secondarily with several
fruit-bearing trees. By its explicit terms, P.D. No. 27 applies only to private agricultural lands
primarily devoted to rice and corn production. Thus, the property could never have been covered
by P.D. No. 27 as it was not classified as rice and corn land.
For these reasons, we hold that the property is no longer agricultural and that the CA erred when
it affirmed the DARABs ruling that the property notwithstanding the various documents that
unquestionably established the contrary was agricultural .
No tenancy relationship exists between
DNTDC and the respondents; the
32 | JESSIE DELA PEA
tenancy relationship between the
respondents and Eugenio ceased
when the property was reclassified
In Solmayor v. Arroyo,50 the Court outlined the essential requisites of a tenancy relationship, all
of which must concur for the relationship to exist, namely:
1. The parties are the landowner and the tenant;
2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation; and
6. There is sharing of harvests.
The absence of any of these requisites does not make an occupant a cultivator, or a planter,
a de jure tenant.51Consequently, a person who is not a de jure tenant is not entitled to security of
tenure nor covered by the land reform program of the government under any existing tenancy
laws.52
In this case, we hold that no tenancy relationship exists between DNTDC, as the owner of the
property, and the respondents, as the purported tenants; the second essential requisite as
outlined above the subject is agricultural land is lacking. To recall, the property had already
been reclassified as non-agricultural land. Accordingly, the respondents are not de jure tenants
and are, therefore, not entitled to the benefits granted to agricultural lessees under the
provisions of P.D. No. 27, in relation to R.A. No. 6657.
We note that the respondents, through their predecessors-in-interest, had been tenants of
Eugenio as early as 1965. Under Section 7 of R.A. No. 3844, once the leasehold relation is
established, the agricultural lessee is entitled to security of tenure and acquires the right to
continue working on the landholding. Section 10 of this Act further strengthens such tenurial
security by declaring that the mere expiration of the term or period in a leasehold contract, or the
sale, alienation or transfer of the legal possession of the landholding shall not extinguish the
leasehold relation; and in case of sale or transfer, the purchaser or transferee is subrogated to
the rights and obligations of the landowner/lessor. By the provisions of Section 10, mere
expiration of the five-year term on the respondents lease contract could not have caused the
termination of any tenancy relationship that may have existed between the respondents and
Eugenio.
Still, however, we cannot agree with the position that the respondents are the tenants of
DNTDC. This is because, despite the guaranty, R.A. No. 3844 also enumerates the instances
that put an end to the lessees protected tenurial rights. Under Section 7 of R.A. No. 3844, the
right of the agricultural lessee to continue working on the landholding ceases when the leasehold controversy concerning only the issue of physical possession over the disputed 2.5574-hectare
relation is extinguished or when the lessee is lawfully ejected from the landholding. Section portion subject of the ejectment case before the MTCC.
853 enumerates the causes that terminate a relationship, while Section 36 enumerates the
grounds for dispossessing the agricultural lessee of the landholding. 54
And second, the issues involved in the cases before the MTCC and the RTC are different from
the issues involved in the present case. In the ejectment case before the MTCC, the sole issue
Notably, under Section 36(1) of R.A. No. 3844, as amended by Section 7 of R.A. No. was possession de Jure, while in the prohibition case before the RTC, the issue was the
6389,55 declaration by the department head, upon recommendation of the National Planning propriety of the execution of the decision of the MTCC in the ejectment case. In contrast, the
Commission, to be suited for residential, commercial, industrial or some other urban purposes, issues in the present controversy that originated from the PARAD boil down to the respondents'
terminates the right of the agricultural lessee to continue in its possession and enjoyment. The averred rights, as tenants of the property.
approval of the conversion, however, is not limited to the authority of the DAR or the courts. In
the case of Pasong Bayabas Farmers Asso., Inc. v. Court of Appeals,56 and again in Junio v.
With these considerations, therefore, whatever decision that the MTCC in the ejectment case
Secretary Garilao,57 the Court essentially explained that the reclassification and conversion of
arrived at, which was limited to possession de jure of the disputed 2.5574-hectare portion of the
agricultural lands to non-agricultural uses prior to the effectivity of R.A. No. 6657, on June 15,
property, could not have affected any right that the respondents may have had, as tenants, over
1988, was a coordinated effort of several government agencies, such as local government units
the property. Consequently, any agreement that the respondents' children had entered into in
and the HSRC.
the R TC case could not have bound the respondents in the present controversy as the
respondents' claim over the property and their alleged right to continue in its possession clearly
In effect, therefore, whether the leasehold relationship between the respondents and Eugenio go beyond mere possession de Jure, whether of the 2.5574-hectare portion of the property that
had been established by virtue of the provisions of R.A. No. 3844 or of the five-year lease was subject of the ejectment case before the MTCC or of the entire property in the present case.
contract executed in 1981, this leasehold relationship had been terminated with the
reclassification of the property as non-agricultural land in 1982. The expiration the five-year
WHEREFORE, in view of these considerations, we hereby GRANT the petition, and
lease contract in 1986 could not have done more than simply finally terminate any leasehold
accordingly REVERSE and SET ASIDE the decision dated March 28, 2006 and the resolution
relationship that may have prevailed under the terms of that contract.
dated September 5, 2006 of the Court of Appeals in CA-G.R. SP No. 79377.
We REINSTATE the decision dated July 6, 1998 and the resolution dated September 8, 1998 of
Consequently, when the DNTDC purchased the property in 1995, there was no longer any the PARAD in DARAB Case No. XI-1418-DC-98.
tenancy relationship that could have subrogated the DNTDC to the rights and obligations of the
previous owner. We, therefore, disagree with the findings of the CA, as it affirmed the DARAB
SO ORDERED.
that a tenancy relationship exists between DNTDC and the respondents.

G.R. No. 145568 November 17, 2005

The respondents are not bound by

HEIRS OF ENRIQUE TAN, SR., namely, NORMA TAN, JEANETTE TAN, JULIETA TAN,
the November 29, 2001 compromise
ROMMEL TAN, and ENRIQUE TAN, JR., All represented by ROMMEL TAN, Petitioners,
vs.
agreement before the RTC REYNALDA POLLESCAS, Respondent.

The respondents argue that the compromise agreement of Demetrio Ehara, Jr., Reynaldo and DECISION
Liza entered into with DNTDC on November 29, 2001 and approved by the RTC on December
7, 2001 does not and cannot bind them as they are different from the former.
CARPIO, J.:

We agree for two plain reasons.

The Case

First, the respondents position on this matter finds support in logic. Indeed, as the respondents
Before the Court is a petition for review1 of the Decision2 of the Court of Appeals promulgated on
have well pointed out and contrary to DNTDCs position, this similarity in their last names or
31 August 2000 in CA-G.R. SP No. 48823. The Court of Appeals affirmed the decision of the
familial relationship cannot automatically bind the respondents to any undertaking that their
Department of Agrarian Reform Adjudication Board ordering petitioners to respect respondents
children in the RTC case had agreed to. This is because DNTDC has not shown that the
possession and cultivation of the land.
respondents had expressly or impliedly acquiesced to their children's undertaking; that the
respondents had authorized the latter to bind them in the compromise agreement; or that the
respondents' cause of action in the instant case arose from or depended on those of their The Antecedents
children in the cases before the MTCC and the RTC. Moreover, the respondents' children and
DNTDC executed the compromise agreement in the RTC case with the view of settling the

33 | JESSIE DELA PEA

Petitioners Norma Tan, Jeanette Tan, Julieta Tan, Rommel3 Tan and Enrique Tan, Jr. ("Tan
Heirs") are co-owners of a coconut farmland ("Land") located at Labo, Ozamis City with an area
of 25,780 square meters.4
Esteban Pollescas ("Esteban") was the original tenant of the Land. Upon Estebans death in
1991, his son Enrique Pollescas ("Enrique") succeeded him and was appointed as tenant by the
landowner Enrique Tan ("Tan").5
However, respondent Reynalda Pollescas ("Reynalda"), Estebans surviving second spouse,
demanded that Tan recognize her as Estebans successor. Tan did not accede. Thus, Reynalda
filed with the Department of Agrarian Reform Adjudication Board of Ozamis City ("DARAB-
Ozamis") a complaint for Annulment of Compromise Agreement, Quieting of Tenancy
Relationship and damages.6
In its Decision dated 28 April 1993, the DARAB-Ozamis declared Reynalda as the lawful tenant
of the Land. The DARAB-Ozamis apportioned the harvests between the Tan Heirs and
Reynalda based on the customary sharing system which is 2/3 to the landowner and 1/3 to the
tenant.7
On the following harvest dates, 11 and 19 of June, 9 September, 6 and 13 of December 1993,
Reynalda failed to deliver to the Tan Heirs 2/3 of the harvests amounting to P3,656.70. The Tan
Heirs demanded Reynalda to pay such amount.8 However, Reynalda ignored the demand.
Consequently, the Tan Heirs filed a complaint for estafa against Reynalda with the Municipal
Trial Court in Cities, Ozamis City, Branch 2.9 The trial court found Reynalda guilty of estafa10 and
sentenced her to five months of arresto mayor maximum to two years of prision
correccional minimum and ordered her to pay the Tan Heirs P3,656.70, the amount which she
misappropriated.11
Subsequently, for Reynaldas continued failure to deliver their share, the Tan Heirs filed with the
DARAB, Misamis Occidental ("DARAB-Misamis Occidental") an ejectment case.12
On 18 September 1996, the DARAB-Misamis Occidental13 ruled in favor of the Tan Heirs. The
DARAB-Misamis Occidental disposed of the case in this wise:
WHEREFORE, premises considered, decision is hereby rendered terminating the tenancy
relationship of herein parties.
Consequently, respondent Reynalda Pollescas is ordered to vacate the subject landholding and
turn-over its possession and cultivation to the plaintiffs.
The MARO of Ozamis City is likewise ordered to investigate and verify in the subject landholding
if there are actual farmer-cultivators in the area who may qualify as lessees thereof, who then
should be placed under leasehold pursuant to the mandate of Section 12, R.A. 6657.
SO ORDERED.14
Aggrieved by the decision, Reynalda appealed to the DARAB, Diliman, Quezon City ("DARAB").
The DARAB reversed the decision of the DARAB-Misamis Occidental, to wit:
34 | JESSIE DELA PEA
WHEREFORE, premises considered, the appealed decision dated 18 September 1996 is hereby
REVERSED and SET ASIDE and a new one is rendered ordering the landowners to respect the
peaceful possession and cultivation of the subject landholding.
Respondent-Appellant is hereby ordered to pay her unpaid leasehold rentals.
SO ORDERED.15
The Tan Heirs appealed the decision of the DARAB to the Court of Appeals. The Court of
Appeals affirmed the decision of the DARAB ordering the Tan Heirs to respect Reynaldas
possession and cultivation of the Land.
Hence, this petition.
The Ruling of the Court of Appeals
In affirming the decision of the DARAB, the Court of Appeals cited Roxas y Cia v. Cabatuando,
et al.16 where this Court held that "x x x mere failure of a tenant to pay the landholders share
does not necessarily give the latter the right to eject the former when there is lack of deliberate
intent on the part of the tenant to pay x x x."
The Court of Appeals held that Reynaldas failure to deliver the full amount of the Tan Heirs
share could not be considered as a willful and deliberate intent to deprive the Tan Heirs of their
share. The Court of Appeals held that Reynalda honestly believed that she was entitled to a
share of the harvests in 1992-1993 while the case for Annulment of Compromise Agreement
was pending before the DARAB-Ozamis. Reynalda also believed that she could effect a set-off
for her 1992-1993 share from the 1994 share of the Tan Heirs.
The Court of Appeals further declared that the rental must be legal to consider non-payment of
such as a ground for ejectment. The appellate court stated that:
x x x for a tenants failure to pay rental to come within the intendment of the law as a ground for
ejectment, it is imperative that the rental must be legal. What the law contemplates is the
deliberate failure of the tenant to pay the legal rental, not the failure to pay an illegal rental. A
stipulation in a leasehold contract requiring a lessee to pay an amount in excess of the amount
allowed by law is considered contrary to law, morals or public policy. Such contract is null and
void as to the excess.
It is noteworthy that Section 34 of RA 3844 provides that the consideration for the lease of
riceland and lands devoted to other crops shall not be more than the equivalent of twenty-five
per centum of the average normal harvest. The tenant is obliged to pay a maximum of 25% of
the normal harvest and not two thirds as in the case at bar. Thus, even admitting that a set-off
was effected in favor of respondent for her 1992-1993 share, yet enough is left to cover the 25%
share of the petitioners for the 1994 crop.17
Citing Section 8 of Republic Act No. 3844 ("RA 3844"), the Court of Appeals also held "[t]here is
nothing in the law that makes failure to deliver share a ground for extinguishment of leasehold
agreement."18 Reynaldas failure to deliver fully the share of the Tan Heirs is not sufficient to
disturb the agricultural leasehold relation.19
 The Issues
In their Memorandum, the Tan Heirs raise the following issues:
I
WHETHER THERE IS NO EXCEPTION TO THE GROUNDS FOR EXTINGUISHMENT OF
LEASEHOLD RELATION UNDER SECTION 8 OF RA 3844.
II
WHETHER THE COURT OF APPEALS CORRECTLY RULED THAT REYNALDA IS OBLIGED
TO PAY ONLY 1/4 OR 25% OF THE NORMAL HARVEST AND NOT 2/3 WHEN THE
SUBJECT LAND WAS NOT YET PLACED UNDER THE LEASEHOLD SYSTEM PURSUANT
TO SECTION 12 OF RA 6657.20
The Ruling of the Court
The petition lacks merit.
At the outset, the Court declares that RA 6657 is the governing statute in this case.
On 8 August 1963, RA 3844 or the Agricultural Land Reform Code21 abolished and outlawed
share tenancy and put in its stead the agricultural leasehold system.22 On 10 September 1971,
Republic Act No. 6389 ("RA 6389") amending RA 3844 ("RA 3844 as amended") declared share
tenancy relationships as contrary to public policy.23RA 6389 did not entirely repeal Republic Act
No. 119924 and RA 3844 even if RA 6389 substantially modified them.25 Subsequently, Republic
Act No. 6657 or the Comprehensive Agrarian Reform Law of 1988 ("RA 6657") took effect on 15
June 1988. RA 6657 only expressly repealed Section 35 of RA 3844 as amended. 26 Thus, RA
6657 is the prevailing law in this case. The harvests in dispute are for the years 1992-1993 or
after the effectivity of RA 6657.
No ground for dispossession of landholding
Section 7 of RA 3844 as amended provides that once there is a leasehold relationship, as in the
present case, the landowner cannot eject the agricultural tenant from the land unless authorized
by the court for causes provided by law.27 RA 3844 as amended expressly recognizes and
protects an agricultural leasehold tenants right to security of tenure. 28
Section 36 of RA 3844 as amended enumerates the grounds for dispossession of the tenants
landholding, to wit:
SEC. 36. Possession of Landholding; Exceptions.Notwithstanding any agreement as to the
period or future surrender of the land, an agricultural lessee shall continue in the enjoyment and
possession of his landholding except when his dispossession has been authorized by the Court
in a judgment that is final and executory if after due hearing it is shown that:
35 | JESSIE DELA PEA
(1) The landholding is declared by the department head upon recommendation of the National
Planning Commission to be suited for residential, commercial, industrial or some other urban
purposes: Provided, That the agricultural lessee shall be entitled to disturbance compensation
equivalent to five times the average of the gross harvests on his landholding during the last five
preceding calendar years;
(2) The agricultural lessee failed to substantially comply with any of the terms and conditions of
the contract or any of the provisions of this Code unless his failure is caused by fortuitous event
or force majeure;
(3) The agricultural lessee planted crops or used the landholding for a purpose other than what
had been previously agreed upon;
(4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph
3 of Section twenty-nine;
(5) The land or other substantial permanent improvement thereon is substantially damaged or
destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural
lessee;
(6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the
non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as
a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although
the obligation to pay the rental due that particular crop is not thereby extinguished; or
(7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2
of Section twenty-seven.
In the instant case, the Tan Heirs seek Reynaldas ejectment from the Land on the ground of
non-payment of lease rental.
The Court agrees with the Court of Appeals that for non-payment of the lease rental to be a valid
ground to dispossess the agricultural lessee of the landholding, the amount of the lease rental
must first of all be lawful. If the amount of lease rental claimed exceeds the limit allowed by law,
non-payment of lease rental cannot be a ground to dispossess the agricultural lessee of the
landholding.
Section 34 of RA 3844 as amended29 mandates that "not x x x more than" 25% of the average
normal harvest shall constitute the just and fair rental for leasehold. In this case, the Tan Heirs
demanded Reynalda to deliver 2/3 of the harvest as lease rental, which clearly exceeded the
25% maximum amount prescribed by law. Therefore, the Tan Heirs cannot validly dispossess
Reynalda of the landholding for non-payment of rental precisely because the lease rental
claimed by the Tan Heirs is unlawful.
Even assuming Reynalda agreed to deliver 2/3 of the harvest as lease rental, Reynalda is not
obliged to pay such lease rental for being unlawful. There is no legal basis to demand payment
of such unlawful lease rental. The courts will not enforce payment of a lease rental that violates
the law. There was no validly fixed lease rental demandable at the time of the harvests. Thus,
Reynalda was never in default.
Reynalda and the Tan Heirs failed to agree on a lawful lease rental. Accordingly, the DAR must
first fix the provisional lease rental payable by Reynalda to the Tan Heirs pursuant to the second
paragraph of Section 34 of RA 3844 as amended.30 Until the DAR has fixed the provisional lease
rental, Reynalda cannot be in default in the payment of lease rental since such amount is not yet
determined. There can be no delay in the payment of an undetermined lease rental because it is
impossible to pay an undetermined amount. That Reynalda is not yet in default in the payment of
the lease rental is a basic reason why she cannot be lawfully ejected from the Land for non-
payment of rental.31
No ground for extinguishment of leasehold relation
The Court also holds that there is no ground for the extinguishment of leasehold relation in this
case.
Only in the instances stated in Sections 8 and 28 of RA 3844 as amended can leasehold relation
be terminated. These provisions read:
SEC. 8. Extinguishment of Agricultural Leasehold Relation.The agricultural leasehold relation
established under this Code shall be extinguished by:
(1) Abandonment of the landholding without the knowledge of the agricultural lessor;
(2) Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall
be served three months in advance; or
(3) Absence of the persons under Section nine to succeed to the lessee, in the event of death or
permanent incapacity of the lessee.
SEC. 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year.The
agricultural lessee may terminate the leasehold during the agricultural year for any of the
following causes:
(1) Cruel, inhuman or offensive treatment of the agricultural lessee or any member of his
immediate farm household by the agricultural lessor or his representative with the knowledge
and consent of the lessor;
(2) Non-compliance on the part of the agricultural lessor with any of the obligations imposed
upon him by the provisions of this Code or by his contract with the agricultural lessee;
(3) Compulsion of the agricultural lessee or any member of his immediate farm household by the
agricultural lessor to do any work or render any service not in any way connected with farm work
or even without compulsion if no compensation is paid;
(4) Commission of a crime by the agricultural lessor or his representative against the agricultural
lessee or any member of his immediate farm household; or
(5) Voluntary surrender due to circumstances more advantageous to him and his family.
36 | JESSIE DELA PEA
The case of Garchitorena v. Panganiban which the Tan Heirs invoked to justify the
extinguishment of leasehold relation does not appear on page 339 of Volume 8 of the Supreme
Court Reports Annotated. What is printed on such page is the case of Republic v. Perez with
docket number L-16112 and promulgated on 29 June 1963. For making a wrong citation, the
Court admonishes Atty. Jesus S. Anonat, counsel for the Tan Heirs, to be more careful when
citing jurisprudence. The Court reminds him of his duty not to knowingly misquote the text of a
decision or authority32 lest he be guilty of misleading the Court.
WHEREFORE, the Court DENIES the petition and AFFIRMS the assailed Decision dated 31
August 2000 of the Court of Appeals in CA-G.R. SP No. 48823. The Court REMANDS this case
to the Department of Agrarian Reform for the determination of the provisional lease rental. Costs
against petitioners.
SO ORDERED.
G.R. No. 179643 June 3, 2013
ERNESTO L. NATIVIDAD, Petitioner,
vs.
FERNANDO MARIANO, ANDRES MARIANO and DOROTEO GARCIA, Respondents.
DECISION
BRION, J.:
We resolve in this Rule 45 petition for review on certiorari1 the challenge to the November 28,
2006 decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 89365. The assailed decision
affirmed the February 21, 2005 decision3 of the Department of Agrarian Reform Adjudication
Board (DARAB) in DARAB Case No. 10051. The DARAB ruling, in turn, reversed the
decision4 dated October 27, 1999 of the Provincial Agrarian Reform Adjudication (PARAD) of
Nueva Ecija granting the petition for ejectment and collection of back lease rentals filed by
petitioner Ernesto L. Natividad against respondents Fernando Mariano, Andres Mariano and
Doroteo Garcia.
The Factual Antecedents
At the core of the dispute in this case is a 66,997 square meter parcel of agricultural land
(subject property) situated in Sitio Balanti, Gapan, Nueva Ecija, owned and registered in the
name of Esperanza Yuzon under Transfer Certificate of Title No. NT-15747. The respondents
are the tenants of the subject property.5
On December 23, 1998, Ernesto filed with the PARAD a petition6 for ejectment and collection of
back lease rentals against the respondents. In his petition, Ernesto alleged that he purchased
the subject property in a public auction held on July 17, 1988. Immediately after the purchase,
he verbally demanded that the respondents pay the lease rentals. Despite his repeated
demands, the respondents refused to pay, prompting him to orally request the respondents to
vacate the subject property. He filed the petition when the respondents refused his demand to
vacate.
Although duly served with summons, the respondents failed to answer Ernestos petition and
were deemed to have waived their right to present evidence. The PARAD allowed the case to
proceed ex parte.
The PARAD granted Ernestos petition in its October 27, 1999 decision, and ordered the
respondents to vacate the subject property and to pay the lease rentals in arrears. The PARAD
found merit in Ernestos unrebutted allegations.
The respondents did not appeal the decision despite due notice. 7 Thus, the PARADs decision
became final and executory, and on April 6, 2000, the PARAD granted Ernestos motion for the
issuance of a writ of execution.8
On May 4, 2000, the respondents, through a private law firm, filed an Appearance and Petition
for Relief from Judgment9 (first petition) on the ground of excusable negligence. The
respondents claimed that their inexperience and lack of knowledge of agrarian reform laws and
the DARAB Rules of Procedure prevented them from appearing before the PARAD in due
course; these also led to their belated discovery of the approved Barangay Committee for Land
Production (BCLP) valuation. They cited these reasons as their excusable negligence justifying
the grant of the relief from judgment prayed for.
In answer to Ernestos allegations, the respondents denied knowledge of Ernestos purchase of
the subject property and, alternatively, disputed the validity of the purchase. They averred that
they had been paying lease rentals to the landowner. In support of their position, the
respondents attached copies of rental payment receipts10 for the crop years 1988-1998 issued
by Corazon Quiambao and Laureano Quiambao, the authorized representatives of Aurora
Yuzon.11 They added that Diego Mariano, the father of respondents Andres and Fernando, and
respondent Doroteo were issued Certificates of Land Transfer (CLTs) on July 28, 1973.12 Andres
and Fernando added that, as heirs of Diego, they are now the new beneficiaries or allocatees of
the lots covered by Diegos CLT.13 Finally, the respondents pointed out that as of the year 2000,
they have an approved valuation report issued by the BCLP.
On June 7, 2000, the PARAD denied the respondents first petition, finding no sufficient basis for
its grant.14 The PARAD declared that none of the grounds for the grant of a petition for relief
exists and can be invoked against its October 27, 1999 decision, or could have prevented the
respondents from taking an appeal. The records show that the respondents were duly notified of
the scheduled hearing date and of the issuance of its decision; despite due notices, the
respondents failed to appear and to appeal, for which reasons the decision became final. Lastly,
the PARAD considered that the respondents petition had been filed out of time. On July 13,
2000, the PARAD denied15 the respondents motion for reconsideration of the June 7, 2000
order.16
On June 23, 2000, the respondents, this time represented by the Agrarian Legal Assistance,
Litigation Division of the Department of Agrarian Reform (DAR), filed a second Petition for Relief
from Judgment (second petition).17The respondents repeated the allegations in their first petition,
but added lack of sufficient financial means as the reason that prevented them from seeking
appropriate legal assistance.
On July 20, 2000, the PARAD denied the respondents second petition based on technical
grounds. When the PARAD denied their subsequent motion for reconsideration, 18 the
respondents appealed to the DARAB.19
37 | JESSIE DELA PEA
The Ruling of the DARAB
On February 21, 2005, the DARAB granted the respondents appeal and reversed the PARADs
October 27, 1999 decision.20 The DARAB ordered Ernesto to maintain the respondents in the
peaceful possession and cultivation of the subject property, and at the same time ordered the
respondents to pay the rentals in arrears as computed by the Municipal Agrarian Reform Officer
(MARO). Unlike the PARAD, the DARAB found the evidence insufficient to support Ernestos
allegation that the respondents did not pay the lease rentals. The respondents respective
receipts of payment, the DARAB noted, controverted Ernestos claim.
Ernesto appealed the February 21, 2005 DARAB decision to the CA via a petition for review
under Rule 43 of the Rules of Court.21
The Ruling of the CA
In its November 28, 2006 decision, the CA denied Ernestos petition for review for lack of
merit.22 The CA declared that Ernesto failed to prove by clear, positive and convincing evidence
the respondents failure to pay the lease rentals and, in fact, never repudiated the authority of
Corazon and Laureano to receive rental payments from the respondents. The CA ruled that
under Section 7 of Republic Act (R.A.) No. 3844, once a leasehold relationship is established,
the landowner-lessor is prohibited from ejecting a tenant-lessee unless authorized by the court
for causes provided by law. While non-payment of lease rentals is one of the enumerated
causes, the landowner (Ernesto) bears the burden of proving that: (1) the tenant did not pay the
rentals; and (2) the tenant did not suffer crop failure pursuant to Section 36 of R.A. No. 3844. As
Ernesto failed to prove these elements, no lawful cause existed for the ejectment of the
respondents as tenants.
The CA also declared that the DARAB did not err in taking cognizance of the respondents
appeal and in admitting mere photocopies of the respondents receipts of their rental payments.
The CA held that the DARAB Rules of Procedure and the provisions of R. A. No. 6657 (the
Comprehensive Agrarian Reform Law of 1988) specifically authorize the DARAB to ascertain the
facts of every case and to decide on the merits without regard to the laws technicalities. The CA
added that the attendant facts and the respondents substantive right to security of tenure except
the case from the application of the doctrine of immutability of judgments.
Finally, the CA noted that the issues Ernesto raised were factual in nature. It was bound by
these findings since the findings of the DARAB were supported by substantial evidence.
Ernesto filed the present petition after the CA denied his motion for reconsideration23 in its
August 10, 2007 resolution.24
The Petition
Ernesto imputes on the CA the following reversible errors: first, the finding that he authorized
Corazon and Laureano to receive the respondents lease rentals on his behalf; second, the
conclusion that the respondents cannot be ejected since they were excused from paying lease
rentals to him for lack of knowledge of the legality of the latters acquisition of the subject
property; and third, the ruling that the final and fully executed decision of the PARAD could still
be reopened or modified.
Ernesto argues that the respondents admission in their pleadings and the rental receipts, which
they submitted to prove payment, evidently show that the respondents paid the lease rentals to
Corazon and Laureano as representatives of Esperanza and not as his representatives. 25
Ernesto further insists that the respondents cannot deny knowledge of the legality of his
acquisition of the subject property and are, therefore, not excused from paying the lease rentals
to him. He claims that the respondents had long since known that he is the new owner of the
subject property when the petition for the annulment of the levy and execution sale, which the
respondents filed against him, was decided in his favor.26
Finally, Ernesto claims that the CA erred in disregarding the doctrine of immutability of final
judgments simply on the respondents feigned ignorance of the rules of procedure and of the
free legal assistance offered by the DARAB. Ernesto maintains that despite due receipt of their
respective copies of the PARADs decision, the respondents nevertheless still failed to seek
reconsideration of or to appeal the PARADs decision. Ernesto concludes that the respondents
inaction rendered the PARADs decision final and fully executed, barring its reopening or
modification.27
The Case for the Respondents
In their comment,28 the respondents maintain that Ernestos purchase of the subject property is
null and void. The respondents contend that both Diego and Doroteo acquired rights over the
subject property when they were granted a CLT in 1973.29 Ernestos subsequent purchase of the
subject property via the execution sale cannot work to defeat such rights as any sale of property
covered by a CLT violates the clear and express mandate of Presidential Decree (P.D.) No. 27,
i.e., that title to land acquired pursuant to the Act is not transferable. 30 In fact, when - through the
PARADs final decision - he ejected the respondents from the subject property, Ernesto also
violated R.A. No. 6657.31
The respondents further contend that the doctrine of immutability of judgments does not apply
where substantive rights conferred by law are impaired, such as the situation obtaining in this
case. The courts power to suspend or disregard rules justified the action taken by the DARAB
(as well as the CA in affirming the former) in altering the decision of the PARAD although it had
been declared final.32
Lastly, the respondents posit that the CA did not err in upholding the DARABs ruling since the
findings of facts of quasi-judicial bodies, when supported by substantial evidence, as in this
case, bind the CA.33
The Issue
The case presents to us the core issue of whether Ernesto had sufficient cause to eject the
respondents from the subject property.
The Courts Ruling
We DENY the petition.
Preliminary considerations
38 | JESSIE DELA PEA
As a preliminary matter, we reiterate the rule that a petition for review on certiorari under Rule 45
of the Rules of Court shall raise only questions of law.34 A question that invites a review of the
factual findings of the lower tribunals or bodies is beyond the scope of this Courts power of
review35 and generally justifies the dismissal of the petition.
The Court, as a rule, observes this Rule 45 proscription as this Court is not a trier of facts. 36 The
resolution of factual issues is the function of the lower tribunals or bodies whose findings, when
duly supported by substantial evidence and affirmed by the CA, bind this Court. 37
The reviewable question sanctioned by a Rule 45 petition is one that lies solely on what the law
provides on the given set of circumstances.38 In the present petition, Ernesto essentially argues
that the CA erred in ruling that he failed to sufficiently prove any cause to eject the respondents
from the subject property. In effect, Ernesto asks this Court to re-examine and reevaluate the
probative weight of the evidence on record. These are factual inquiries beyond the reach of this
petition.39
Under exceptional circumstances, however, we have deviated from the above rules. In the
present case, the PARAD gave credit to Ernestos claim that the respondents did not pay the
lease rentals. The DARAB, in contrast, found Ernestos claim unsubstantiated. This conflict in
the factual conclusions of the PARAD and the DARAB on the alleged non-payment by the
respondents of the lease rentals is one such exception to the rule that only questions of law are
to be resolved in a Rule 45 petition.40 Thus, we set aside the above rules under the
circumstances of this case, and resolve it on the merits.
On the issue of the DARABs grant of the respondents appeal;
Doctrine of immutability of judgments
We cannot blame Ernesto for insisting that the PARAD decision can no longer be altered. The
doctrine of immutability of final judgments, grounded on the fundamental principle of public
policy and sound practice, is well settled. Indeed, once a decision has attained finality, it
becomes immutable and unalterable and may no longer be modified in any respect,41 whether
the modification is to be made by the court that rendered it or by the highest court of the
land.42 The doctrine holds true even if the modification is meant to correct erroneous conclusions
of fact and law.43 The judgment of courts and the award of quasi-judicial agencies must, on
some definite date fixed by law, become final even at the risk of occasional errors. 44 The only
accepted exceptions to this general rule are the correction of clerical errors, the so-called nunc
pro tunc entries which cause no prejudice to any party, void judgments, and whenever
circumstances transpire after the finality of the decision which render its execution unjust and
inequitable.45
This doctrine of immutability of judgments notwithstanding, we are not persuaded that the
DARAB and the CA erred in reopening, and ruling on the merits of the case. The broader
interests of justice and equity demand that we set aside procedural rules as they are, after all,
intended to promote rather than defeat substantial justice. 46 If the rigid and pedantic application
of procedural norms would frustrate rather than promote justice, the Court always has the power
to suspend the rules or except a particular case from its operation, 47 particularly if defects of
jurisdiction appear to be present. This is the precise situation that we presently find before this
Court.
In the present petition, the DARAB granted the respondents appeal, despite the lapse of ten
months from the respondents notice of the PARADs decision, because the PARAD denied the
respondents petition for relief from judgment simply on a sweeping declaration that none of the
grounds for the grant of the petition exists and that the petition had been filed out of time. The
records, however, sufficiently contradict the PARADs reasons for denying the respondents
petition for relief; not only do we find justifiable grounds for its grant, we also find that the
respondents filed their petition well within the prescriptive period. Thus, the PARAD effectively
and gravely abused its discretion and acted without jurisdiction in denying the petition for relief
from judgment.
A petition for relief from the judgment of the PARAD is governed by Section 4, Rule IX of the
1994 DARAB Rules of Procedure48 (the governing DARAB rules at the time Ernesto filed his
complaint). It reads in part:
SECTION 4. Relief from Judgment. A petition for relief from judgment must be verified and must
be based on grounds of fraud, accident, mistake and excusable neglect x x x; Provided, that the
petition is filed with the Adjudicator a quo within three (3) months from the time the fraud,
accident, mistake or excusable neglect was discovered and six (6) months from notice of order,
resolution or decision from which relief is sought. [italics supplied; emphasis ours]
A reading of Section 4 shows that four grounds justify the grant of the petition for relief from
judgment, namely: fraud, accident, mistake and excusable negligence. The same provision also
presents two periods that must be observed for such grant 90 days and six months.
In their first and second petitions, the respondents invoked the ground of excusable negligence.
They alleged that they failed to appear before the PARAD due to their inexperience and
ignorance of agrarian reform laws and of the DARAB Rules of Procedure, as well as indigence.
These circumstances their averred ignorance coupled with financial constraints if not outright
poverty - taken altogether sufficiently convince us that the respondents negligence is more than
excusable and constitutes a justifiable ground for the grant of their petition for relief.
We are also convinced that the respondents complied with the twin period requirement set by
Section 4, Rule IX of the 1994 DARAB Rules of Procedure. First, the records show that the
respondents received a copy of the PARADs October 27, 1999 decision on December 10, 1999,
at the earliest; they filed their first petition on May 4, 2000 or five months after. Second, following
our above discussion that the respondents had sufficiently shown grounds for the grant of their
petition, we perforce count the 90-day period from the respondents discovery of their excusable
negligence. We construe this date as the time when the respondents discovered the adverse
consequence of their failure to answer, seek reconsideration or appeal the PARADs decision,
which was when they were evicted from the subject property on June 9, 2000 49 or 35 days
before they filed their first petition. Clearly, the respondents filed their petition well within 6
months from their notice of the PARADs decision and within 90 days from the discovery of their
excusable negligence.
Based on these considerations, we are convinced that the DARAB did not err in granting the
respondents appeal despite the procedural lapses. Under Section 3, Rule I of the 1994 DARAB
Rules of Procedure,50 the DARAB and its adjudicators "shall not be bound by technical rules of
procedure and evidence as prescribed in the Rules of Court, but shall proceed to hear and
decide all agrarian cases, disputes or controversies in a most expeditious manner, employing all
reasonable means to ascertain the facts of every case in accordance with justice and equity."
The same provision is essentially embodied in R.A. No. 3844 upon which Ernesto heavily relied.
39 | JESSIE DELA PEA
In our view, considerations of equity, justice and jurisdiction surround this case, justifying the
relaxation of the rules and the DARABs grant of the respondents appeal.
In sum, we rule that the DARAB correctly allowed the respondents appeal despite the lapse of
the reglementary period. Accordingly, we cannot impute error on the CA in not reversing the
DARABs decision simply under the doctrine of immutability of judgments.
Non-payment of lease rentals as ground for eviction of tenants;
Landowner with burden to prove sufficient cause for eviction
Section 7 of R.A. No. 3844 ordains that once the tenancy relationship is established, a tenant or
agricultural lessee is entitled to security of tenure.51 Section 36 of R.A. No. 3844 strengthens this
right by providing that the agricultural lessee has the right to continue the enjoyment and
possession of the landholding and shall not be disturbed in such possession except only upon
court authority in a final and executory judgment, after due notice and hearing, and only for the
specifically enumerated causes.52 The subsequent R.A. No. 6657 further reiterates, under its
Section 6, that the security of tenure previously acquired shall be respected. Finally, in order to
protect this right, Section 37 of R.A. No. 3844 rests the burden of proving the existence of a
lawful cause for the ejectment of the agricultural lessee on the agricultural lessor. 53
Ernestos petition for ejectment against the respondents was anchored precisely on the latters
alleged non-payment of the lease rentals beginning 1988 until 1998 despite his repeated verbal
demands. When confronted with the respondents defense of due payment with supporting
documentary evidence of it, Ernesto countered that their payments should not be considered as
he did not authorize Corazon and Laureano to receive the payments on his behalf.
These allegations pose to us three essential points that we need to address. First, whether
Ernesto indeed made demands on the respondents for the payment of the lease rentals; second,
assuming that Ernesto made such demands, whether the respondents deliberately failed or
continuously refuse to pay the lease rentals; and third, whether the lease rentals paid by the
respondents to Corazon and Laureano are valid.
We rule in the NEGATIVE on the first point.
Our review of the records shows that Ernesto did not present any evidence, such as the affidavit
of the person or persons present at that time, to prove that he demanded from the respondents
the payment of the lease rentals. We, therefore, cannot accord any merit to his claim that he
made such demands. His allegation, absent any supporting evidence, is nothing more than a
hollow claim under the rule that he who alleges a fact has the burden of proving it as mere
allegation is not evidence.54 Thus, Ernesto should be deemed to have made his demand only at
the time he filed the petition for ejectment before the PARAD. At this point, the respondents were
not yet in delay55 and could not be deemed to have failed in the payment of their lease rentals.
We again rule in the NEGATIVE on the second point.
Non-payment of the lease rentals whenever they fall due is a ground for the ejectment of an
agricultural lessee under paragraph 6, Section 36 of R.A. No. 3844.56 In relation to Section 2 of
Presidential Decree (P.D.) No. 816,57 deliberate refusal or continued refusal to pay the lease
rentals by the agricultural lessee for a period of two (2) years shall, upon hearing and final
judgment, result in the cancellation of the CLT issued in the agricultural lessees favor.
The agricultural lessee's failure to pay the lease rentals, in order to warrant his dispossession of
the landholding, must be willful and deliberate and must have lasted for at least two (2) years.
The term "deliberate" is characterized by or results from slow, careful, thorough calculation and
consideration of effects and consequences, while the term "willful" is defined, as one governed
by will without yielding to reason or without regard to reason. 58 Mere failure of an agricultural
lessee to pay the agricultural lessor's share does not necessarily give the latter the right to eject
the former absent a deliberate intent on the part of the agricultural lessee to pay.59
In the present petition, we do not find the respondents alleged non-payment of the lease rentals
sufficient to warrant their dispossession of the subject property. The respondents alleged non-
payment did not last for the required two-year period. To reiterate our discussion above, the
respondents rental payments were not yet due and the respondents were not in default at the
time Ernesto filed the petition for ejectment as Ernesto failed to prove his alleged prior verbal
demands. Additionally, assuming arguendo that the respondents failed to pay the lease rentals,
we do not consider the failure to be deliberate or willful. The receipts on record show that the
respondents had paid the lease rentals for the years 1988-1998. To be deliberate or willful, the
non-payment of lease rentals must be absolute, i.e., marked by complete absence of any
payment. This cannot be said of the respondents case. Hence, without any deliberate and willful
refusal to pay lease rentals for two years, the respondents ejectment from the subject property,
based on this ground, is baseless and unjustified.
Finally, we rule in the AFFIRMATIVE on the third point.
Ernesto purchased the subject property in 1988. However, he only demanded the payment of
the lease rentals in 1998. All the while, the respondents had been paying the lease rentals to
Corazon and Laureano. With no demand coming from Ernesto for the payment of the lease
rentals for ten years, beginning from the time he purchased the subject property, the
respondents thus cannot be faulted for continuously paying the lease rentals to Corazon and
Laureano. Ernesto should have demanded from the respondents the payment of the lease rental
soon after he purchased the subject property. His prolonged inaction, whether by intention or
negligence, in demanding the payment of the lease rentals or asserting his right to receive such
rentals, at the very least, led the respondents to consider Corazon and Laureano to still be the
authorized payees of the lease rentals, given the absence of any objection on his part.
Import of the respondents CLT
Diego and respondent Doroteo were undoubtedly awarded CLTs over the subject property
pursuant to P.D. No. 27. Thus, we agree with their position that they have acquired rights over
the subject property and are in fact deemed owners of it.
A CLT is a document that evidences an agricultural lessees inchoate ownership of an
agricultural land primarily devoted to rice and corn production.60 It is the provisional title of
ownership61 issued to facilitate the agricultural lessees acquisition of ownership over the
landholding. The transfer of the landholding to the agricultural lessee under P.D. No. 27 is
accomplished in two stages: (1) issuance of a CLT to a farmer-beneficiary as soon as the DAR
transfers the landholding to the farmer-beneficiary in recognition that said person is a "deemed
owner"; and (2) issuance of an Emancipation Patent as proof of full ownership of the landholding
upon full payment of the annual amortizations or lease rentals by the farmer-beneficiary.62
40 | JESSIE DELA PEA
The CLTs of Diego and of respondent Doroteo were issued in 1973. Thus, as of 1973, Diego
and respondent Doroteo were deemed the owners of the subject property pursuant to P.D. No.
27, but subject to the compliance with certain conditions and requirements, one of which was the
full payment of the monthly amortization or lease rentals to acquire absolute ownership.63
In the event the tenant-farmer defaults in the payment of the amortization, P.D. No. 27 ordains
that the amortization due shall be paid by the farmers cooperative where the defaulting tenant-
farmer is a member, with the cooperative having a right of recourse against the farmer. Thus, if
the tenant-farmer defaults, the landowner is assured of payment since the farmers cooperative
will assume the obligation. In the present petition, the records show that the respondents were
members of a Samahang Nayon. Pursuant to P.D. No. 27, Ernesto should have claimed the
unpaid lease rentals or amortizations from the respondents Samahang Nayon.
Executive Order (E.O.) No. 228, issued on July 17, 1987, modified P.D. No. 27 on the manner of
payment and provided for different modes of payment of the value of the land to the landowner.
The pertinent portion reads:
SECTION 3. Compensation shall be paid to the landowners in any of the following modes, at the
option of the landowners:
(a) Bond payment over ten (10) years, with ten percent (10%) of the value of the land
payable immediately in cash, and the balance in the form of LBP bonds;
(b) Direct payment in cash or in kind by the farmer-beneficiaries with the terms to be
mutually agreed upon by the beneficiaries and landowners and subject to the approval
of the Department of Agrarian Reform; and
(c) Other modes of payment as may be prescribed or approved by the Presidential
Agrarian Reform Council. [emphases supplied]
In the event a dispute arises between the landowner and the tenant-farmer on the amount of the
lease rentals, Section 2 of E.O. No. 228 provides that the DAR and the concerned BCLP shall
resolve the dispute. In any case, the Land Bank of the Philippines shall still process the payment
of the landowners compensation claim, which it shall hold in trust for the landowner, pending
resolution of the dispute. Thus, under this scheme, as with P.D. No. 27, the landowner is
assured of payment of the full value of the land under E.O. No. 228.
With the enactment of R.A. No. 6657 on June 10, 1988, the manner and the mode of payment
were further modified with the options available to the landowner, provided as follows:
"SECTION 18. Valuation and Mode of Compensation. x x x
xxxx
(1) Cash payment, x x x;
(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares,
physical assets or other qualified investments in accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds." (emphases ours; italics supplied)
Following these guarantees to the landowner under P.D. No. 27 and E.O No. 228, as well as
R.A. No. 6657, the clear rule is that notwithstanding the non-payment of the amortization to the
landowner, the tenant-farmer retains possession of the landholding.64 In addition, we point out
that under P.D. No. 27 and R.A. No. 6657, the transfer or waiver of the landholding acquired by
virtue of P.D. No. 27 is prohibited, save only by hereditary succession or to the Government;
effectively, reversion of the landholding to the landholder is absolutely proscribed. In light of this
decree, we hold that the DARAB correctly reversed the decision of the PARAD, which ordered
the respondents to surrender the possession of the subject property to Ernesto as this was in
clear contravention of the objectives of the agrarian reform laws.
Nevertheless, we cannot agree with the DARABs ruling that the MARO should assist the parties
in executing a new leasehold contract. To recall, Diego and respondent Doroteo are valid
holders of CLTs. Also, as of the year 2000, the concerned BCLP has already issued an
approved valuation for the subject property. Under these circumstances, the proper procedure is
for Ernesto and the DAR to agree on the manner of processing the compensation payment for
the subject property. Hence, pursuant to R.A. No. 6657, E.O. No. 228, in relation to Department
Memorandum Circular No. 26, series of 1973, and the related issuances and regulation of the
DAR, we must remand the case to the DAR for the proper determination of the manner and
mode of payment of the full value of the subject property to Ernesto.1wphi1
As a final note, we observe that on April 11, 1988, Diego waived his right over the 3-hectare.lot
covered by his CLT (which formed part of the subject property) in favor of his two sons, Andres
and Fernando, with each obtaining an equal half interest. This arrangement directly contravenes
Ministry Memorandum Circular Nd. -19, series of 1978. This memorandum circular specifically
proscribes the partition of the landholding; should the farmer-beneficiary have several heirs, as
in this case, the ownership and cultivation of the landholding must ultimately be consolidated in
one heir who possesses the requisite qualifications.65 Thus, under paragraph 2 of the
memorandum circular, Andres and Fernando must agree on one of them to be the sole owner
and cultivator of the lot covered by Diego's CLT.
WHEREFORE, in view of these considerations, we AFFIRM with MODIFICATION the decision
dated November 28, 2006 and the resolution dated August 10, 2007 of the Court of Appeals in
CA-G.R. Sp No. 89365. Petitioner Ernesto L. Natividad is ORDERED to immediately surrender
possession of the subject property to the respondents, and the DARAB is directed to ensure the
immediate restoration of possession of the subject property to the respondents. We REMAND
the case to the Department of Agrarian Reform for the: (1) proper determination of the manner
and mode of payment of the full value of the land to petitioner Emesto L. Natividad in
accordance with R.A. No. 6657, Executive Order No. 228, Department Memorandum Circular
No. 26, series of 1973, and other related issuances and regulation of the Department of Agrarian
Reform; and (2) proper determination of the successor-in-interest of Diego Mariano as the
farmer-beneficiary to the landholding covered by his CLT, in accordance with the provisions of
Ministry Memorandum Circular No. 19, series of 1978. No costs.
SO ORDERED.
G.R. No. 190276 April 2, 2014
41 | JESSIE DELA PEA
EUFROCINA NIEVES, as represented by her attorney-in-fact, LAZARO VILLAROSA,
JR., Petitioner,
vs.
ERNESTO DULDULAO and FELIPE PAJARILLO, Respondents.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated June 4, 2009 and the
Resolution3 dated November 5, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 105438
which set aside the Decision4 dated December 13, 2007 and the Resolution5 dated March 13,
2008 of the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No.
14727, holding that the tenancy relations between petitioner Eufrocina Nieves (petitioner) and
respondents Ernesto Duldulao (Ernesto) and Felipe Pajarillo (Felipe) remain valid and
enforceable.
The Facts
Petitioner is the owner of a piece of agricultural rice land with an area of six (6) hectares, more
or less, located at Dulong Bayan, Quezon, Nueva Ecija (subject land). Ernesto and Felipe
(respondents) are tenants and cultivators of the subject land6 who are obligated to each pay
leasehold rentals of 45 cavans of palay for each cropping season, 7 one in May and the other in
December.8
Claiming that Ernesto and Felipe failed to pay their leasehold rentals since 1985 which had
accumulated to 446.5 and 327 cavans of palay, respectively, petitioner filed a petition on March
8, 2006 before the DARAB Office of the Provincial Adjudicator (PARAD), seeking the ejectment
of respondents from the subject land for non-payment of rentals.9
Prior to the filing of the case, a mediation was conducted before the Office of the Municipal
Agrarian Reform Officer and Legal Division in 2005 where respondents admitted being in default
in the payment of leasehold rentals equivalent to 200 and 327 cavans of palay, respectively, and
promised to pay the same.10 Subsequently, however, in his answer to the petition, Ernesto
claimed that he merely inherited a portion of the back leasehold rentals from his deceased
father, Eugenio Duldulao, but proposed to pay the arrearages in four (4) installments beginning
the dayatan cropping season in May 2006.11 On the other hand, Felipe denied incurring any
back leasehold rentals, but at the same time proposed to pay whatever there may be in six (6)
installments, also beginning the dayatan cropping season in May 2006.12 Both respondents
manifested their lack of intention to renege on their obligations to pay the leasehold rentals due,
explaining that the supervening calamities, such as the flashfloods and typhoons that affected
the area prevented them from complying.13
The PARAD's Ruling
In a Decision14 dated July 6, 2006, the PARAD declared that the tenancy relations between the
parties had been severed by respondents failure to pay their back leasehold rentals, thereby
ordering them to vacate the subject land and fulfill their rent obligations.
With respect to Ernesto, the PARAD did not find merit in his claim that the obligation of his father The petition is meritorious.
for back leasehold rentals, amounting to 446 cavans of palay, had been extinguished by his
death. It held that upon the death of the leaseholder, the leasehold relationship continues
Agricultural lessees, being entitled to security of tenure, may be ejected from their landholding
between the agricultural lessor and the surviving spouse or next of kin of the deceased as
only on the grounds provided by law.25 These grounds the existence of which is to be proven
provided by law; hence, the leasehold rent obligations subsist and should be paid. 15
by the agricultural lessor in a particular case26 are enumerated in Section 36 of Republic Act
No. (RA) 3844,27 otherwise known as the "Agricultural Land Reform Code," which read as
As for Felipe, the PARAD found that his unpaid leasehold rentals had accumulated to 327 follows:
cavans of palay, and that his refusal to pay was willful and deliberate, warranting his ejectment
from the subject land.16
Section 36. Possession of Landholding; Exceptions. - Notwithstanding any agreement as to the
period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and
Dissatisfied, respondents elevated the case on appeal. possession of his landholding except when his dispossession has been authorized by the Court
in a judgment that is final and executory if after due hearing it is shown that:
The DARAB Proceedings
(1) The landholding is declared by the department head upon recommendation of the
National Planning Commission to be suited for residential, commercial, industrial or
On April 16, 2007, the DARAB issued an Order17 deputizing the DARAB Provincial Sheriff of
some other urban purposes: Provided, That the agricultural lessee shall be entitled to
Nueva Ecija and the Municipal Agrarian Reform Officer of Talavera, Nueva Ecija to supervise
disturbance compensation equivalent to five times the average of the gross harvests
the harvest of palay over the subject land. However, when the Sheriff proceeded to implement
on his landholding during the last five preceding calendar years; (as amended by RA
the same on April 27, 2007, he found that the harvest had been completed and the proceeds
6389)
therefrom had been used to pay respondents other indebtedness. 18

(2) The agricultural lessee failed to substantially comply with any of the terms and
On December 13, 2007, the DARAB issued a Decision19 affirming the findings of the PARAD
conditions of the contract or any of the provisions of this Code unless his failure is
that indeed, respondents were remiss in paying their leasehold rentals and that such omission
caused by fortuitous event or force majeure;
was willful and deliberate, justifying their ejectment from the subject land.20

(3) The agricultural lessee planted crops or used the landholding for a purpose other
Unperturbed, respondents elevated the matter to the CA.
than what had been previously agreed upon;

The CA Ruling
(4) The agricultural lessee failed to adopt proven farm practices as determined under
paragraph 3 of Section twenty-nine;
In a Decision21 dated June 4, 2009, the CA granted respondents petition for review, thereby
reversing the ruling of the DARAB terminating the tenancy relations of the parties. While it found
(5) The land or other substantial permanent improvement thereon is substantially
respondents to have been remiss in the payment of their leasehold rentals, it held that the
damaged or destroyed or has unreasonably deteriorated through the fault or
omission was not deliberate or willful. Notwithstanding the DARABs findings with respect to the
negligence of the agricultural lessee;
amounts of respondents rental arrearages, the CA gave full credence to their assertions and
observed that Felipe failed to pay only 293 cavans of palay or 16.28% of the total leasehold
rentals due from 1985 to 2005, while Ernesto failed to pay only 107.5 cavans of palay or 6% of (6) The agricultural lessee does not pay the lease rental when it falls due: Provided,
the total leasehold rentals.22 Relying on the Courts ruling in the case of De Tanedo v. De La That if the non-payment of the rental shall be due to crop failure to the extent of
Cruz23 (De Tanedo), the CA then concluded that respondents substantially complied with their seventy-five per centum as a result of a fortuitous event, the non-payment shall not be
obligation to pay leasehold rentals, and, hence, could not be ejected from the subject land a ground for dispossession, although the obligation to pay the rental due that
despite their failure to meet their rent obligations as they became due. particular crop is not thereby extinguished; or

Aggrieved, petitioner filed a motion for reconsideration which was, however, denied by the CA in (7) The lessee employed a sub-lessee on his landholding in violation of the terms of
a Resolution24dated November 5, 2009, hence this petition. paragraph 2 of Section twenty-seven. (Emphases supplied)

The Issue Before the Court
The sole issue for the Courts resolution is whether or not the CA correctly reversed the
DARABs ruling ejecting respondents from the subject land.
To eject the agricultural lessee for failure to pay the leasehold rentals under item 6 of the above-
cited provision, jurisprudence instructs that the same must be willful and deliberate in order to
warrant the agricultural lessees dispossession of the land that he tills. As explained in the case
of Sta. Ana v. Spouses Carpo:28

The Courts Ruling

42 | JESSIE DELA PEA

Under Section 37 of Republic Act No. 3844, as amended, coupled with the fact that the
respondents are the complainants themselves, the burden of proof to show the existence of a
lawful cause for the ejectment of the petitioner as an agricultural lessee rests upon the
respondents as ag-ricultural lessors. This proceeds from the principle that a tenancy relation-
ship, once established, entitles the tenant to security of tenure. Petitioner can only be ejected
from the agricultural landholding on grounds provided by law. Section 36 of the same law
pertinently provides:
Sec. 36. Possession of Landholding; Exceptions. Notwithstanding any agreement as to the
period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and
possession of his landholding except when his dispossession has been authorized by the Court
in a judgment that is final and executory if after due hearing it is shown that:
xxxx
(6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the
non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as
a result of a fortuitous event, the non-payment shall not be a ground for disposses-sion, although
the obligation to pay the rental due that particular crop is not thereby extinguished;
xxxx
Respondents failed to discharge such burden. The agricultural tenant's failure to pay the lease
rentals must be willful and deliberate in order to warrant his dispossession of the land that he
tills.
Petitioners counsel opines that there appears to be no decision by this Court on the matter; he
thus submits that we should use the CA decision in Cabero v. Caturna. This is not correct. In an
En Banc Decision by this Court in Roxas y Cia v. Cabatuando, et al.,29 we held that under our
law and jurisprudence, mere failure of a tenant to pay the landholder's share does not
necessarily give the latter the right to eject the former when there is lack of deliberate intent on
the part of the tenant to pay. This ruling has not been overturned.
x x x x30 (Emphases supplied; citations omitted)
In the present case, petitioner seeks the dispossession of respondents from the subject land on
the ground of non-payment of leasehold rentals based on item 6, Section 36 of RA 3844. While
respondents indeed admit that they failed to pay the full amount of their respective leasehold
rentals as they become due, they claim that their default was on account of the debilitating
effects of calamities like flashfloods and typhoons. This latter assertion is a defense provided
under the same provision which, if successfully established, allows the agricultural lessee to
retain possession of his landholding. The records of this case are, however, bereft of any
showing that the aforestated claim was substantiated by any evidence tending to prove the
same. Keeping in mind that bare allegations, unsubstantiated by evidence, are not equivalent to
proof,31 the Court cannot therefore lend any credence to respondents fortuitous event defense.
Respondents failure to pay leasehold rentals to the landowner also appears to have been willful
and deliberate. They, in fact, do not deny and therefore admit32 the landowners assertion
that their rental arrearages have accumulated over a considerable length of time, i.e., from 1985
to 2005 but rely on the fortuitous event defense, which as above-mentioned, cannot herein be
43 | JESSIE DELA PEA
sustained. In the case of Antonio v. Manahan33 (Antonio), the Court, notwithstanding the tenants
failure to prove their own fortuitous event theory, pronounced that their failure to pay the
leasehold rentals was not willful and deliberate. The records in said case showed that the
landowner actually rejected the rentals, which amounted only to 2 years-worth of arrearages,
i.e., 1993 and 2001, tendered by the tenants therein due to their supposed poor quality. This
circumstance was taken by the Court together with the fact that said tenants even exerted efforts
to make up for the rejected rentals through the payments made for the other years. In another
case, i.e., Roxas v. Cabatuando34 (Roxas), the Court similarly held that the tenants therein did
not willfully and deliberately fail to pay their leasehold rentals since they had serious doubts as to
the legality of their contract with respect to their non-sharing in the coconut produce, which thus
prompted them to withhold their remittances in good faith. In contrast to Antonio and Roxas, the
landowner in this case never rejected any rental payment duly tendered by respondents or their
predecessors-in-interest. Neither was the legality of their agricultural leasehold contract with the
landowner ever put into issue so as to intimate that they merely withheld their remittances in
good faith. Thus, with the fortuitous event defense taken out of the equation, and considering the
examples in Antonio and Roxas whereby the elements of willfulness and deliberateness were
not found to have been established, the Court is impelled to agree with the DARAB that
respondents herein willfully and deliberately chose not to pay their leasehold rentals to the
landowner when they fell due. The term "willful" means "voluntary and intentional, but not
necessarily malicious,"35 while the term "deliberate" means that the act or omission is
"intentional," "premeditated" or "fully considered."36 These qualities the landowner herein had
successfully established in relation to respondents default in this case. Accordingly, their
dispossession from the subject land is warranted under the law.
At this juncture, the Court finds it apt to clarify that respondents purported substantial
compliance as erroneously considered by the CA to justify its ruling against their
dispossession is applicable only under the parameters of item 2, Section 36 of RA 3844, which
is a separate and distinct provision from item 6 thereof. Item 2, Section 36 of RA 3844 applies to
cases where the agricultural lessee failed to substantially comply with any of the terms and
conditions of the contract or any of the provisions of the Agricultural Land Reform Code, unless
his failure is caused by fortuitous event or force majeure; whereas item 6 refers to cases where
the agricultural lessee does not pay the leasehold rental when it falls due, provided that the
failure to pay is not due to crop failure to the extent of seventy-five per centum as a result of a
fortuitous event.
As the present dispute involves the non-payment of leasehold rentals, it is item 6 and not item
2 of the same provision which should apply. Examining the text of item 6, there is no indication
that the agricultural lessees substantial compliance with his rent obligations could be raised as a
defense against his dispossession. On the other hand, item 2 states that it is only the agricultural
lessees "failure to substantially comply" with the terms and conditions of the agricultural
leasehold contract or the provisions of the Agricultural Land Reform Code which is deemed as a
ground for dispossession. Thus, it may be reasonably deduced that the agricultural lessees
substantial compliance negates the existence of the ground of dispossession provided under
item 2. While the failure to pay leasehold rentals may be construed to fall under the general
phraseology of item 2 that is a form of non-compliance "with any of the terms and conditions of
the contract or any of the provisions of this Code,"37 it is a long-standing rule in statutory
construction that general legislation must give way to special legislation on the same subject,
and generally is so interpreted as to embrace only cases in which the special provisions are not
applicable - lex specialis derogat generali.38 In other words, where two statutes are of equal
theoretical application to a particular case, the one specially designed therefor should
prevail.39 Thus, consistent with this principle, the Court so holds that cases covering an
agricultural lessees non-payment of leasehold rentals should be examined under the
parameters of item 6, Section 36 of RA 3844 and not under item 2 of the same provision which
applies to other violations of the agricultural leasehold contract or the provisions of the
Agricultural Land Reform Code, excluding the failure to pay rent. In these latter cases,
substantial compliance may as above-explained be raised as a defense against
dispossession.
In this relation, the Court observes that the CAs reliance in the De Tanedo ruling was altogether
misplaced for the simple reason that the substantial compliance defense in that case was
actually invoked against a violation of a peculiar term and condition of the parties agricultural
leasehold contract, particularly requiring the payment of advance rentals "pursuant to [the
agricultural lessees] agreement with the landholders,"40 and not his mere failure to pay the
leasehold rentals regularly accruing within a particular cropping season, as in this case.
In fact, the Court, in De Tanedo, applied the substantial compliance defense only in relation to
Section 50(b) of RA 1199,41 otherwise known as the "Agricultural Tenancy Act of the
Philippines," which is the predecessor provision of item 2, Section 36 of RA 3844. Section 50(b)
of RA 1199 states that:
Section 50. Causes for the Dispossession of a Tenant. - Any of the following shall be a sufficient
cause for the dispossession of a tenant from his holdings:
xxxx
(b) When the current tenant violates or fails to comply with any of the terms and conditions of the
contract or any of the provisions of this Act: Provided, however, That this subsection shall not
apply when the tenant has substantially complied with the contract or with the provisions of this
Act.
On other hand, the predecessor provision of item 6, Section 36 of RA 3844 is Section 50(c) of
RA 1199, which reads as follows:
Section 50. Causes for the Dispossession of a Tenant. - Any of the following shall be a sufficient
cause for the dispossession of a tenant from his holdings:
xxxx
(c) The tenant's failure to pay the agreed rental or to deliver the landholder's share: Provided,
however, That this shall not apply when the tenant's failure is caused by a fortuitous event or
force majeure.
The Courts application of the substantial compliance defense in relation to Section 50(b) of RA
1199, as well as the agricultural lessors failure to actually raise in their ejectment complaint the
ground of failure to pay leasehold rentals, is evident from the following excerpt of the De Tanedo
Decision:42
In the decision appealed from as well as in the resolution of the Court of Appeals forwarding this
case to us, it has been found that the rentals for the agricultural years 1958 to 1961, inclusive,
had all been fully satisfied, although not in advance as agreed upon. This is admitted by the
petitioners-appellants. We agree with the Court a quo that the delay in payment does not justify
the drastic remedy of ejectment, considering Section 50(b) of Republic Act 1199, which states
that while violation by the tenant of any of the terms and conditions of the tenancy contract shall
44 | JESSIE DELA PEA
be a ground to eject him, yet this provision shall not apply where there has been substantial
compliance. With reference to the rental for the crop-year 1962-63, failure to pay the same was
not alleged in the original or amended complaints below, and hence may not be considered for
the first time on appeal. (Emphases and underscoring supplied)
In any case, the Court never mentioned Section 50(c) of RA 1199 in De Tanedo.1wphi1 Thus,
a reading thereof only shores up the point earlier explained that the substantial compliance
defense is only available in cases where the ground for dispossession is the agricultural lessees
violation of the terms and conditions of the agricultural leasehold contract or the provisions of the
Agricultural Land Reform Code, and not in cases where the ground for dispossession is the
agricultural lessee's failure to pay rent. Verily, agricultural leasehold rentals, as in rentals in
ordinary lease contracts, constitute fixed payments which the lessor has both the right and
expectation to promptly receive in consideration of being deprived of the full enjoyment and
possession of his property. Unless caused by a fortuitous event, or reprieved by virtue of a
finding that the non-payment of leasehold rentals was not actually willful and deliberate, there
appears to be no credible justification, both in reason and in law, to deny the agricultural lessor
the right to recover his property and thereby eject the agricultural lessee in the event that the
latter fails to comply with his rent obligations as they fall due. Indeed, while the Constitution
commands the government to tilt the balance in favor of the poor and the underprivileged
whenever doubt arises in the interpretation of the law, the jural postulates of social justice should
not sanction any false sympathy towards a certain class, nor be used to deny the landowner's
rights,43 as in this case.
In fine, the Court affirms the DARAB Decision granting the petition for dispossession with the
modification, however, on the amount of rental arrearages to be paid considering that an action
to enforce any cause of action under RA 3844 shall be barred if not commenced within three (3)
years after it accrued.44 Accordingly, respondents are held liable to pay petitioner only the
pertinent rental arrearages reckoned from the last three (3) cropping years prior to the filing of
the petition before the Office of the PARAD on March 8, 200645 or from the May 2003 cropping
season, until they have vacated the subject land.
WHEREFORE, the petition is GRANTED. The Decision dated June 4, 2009 and the Resolution
dated November 5, 2009 of the Court of Appeals in CA-GR. SP No. 105438 are REVERSED
and SET ASIDE. The Decision dated December 13, 2007 of the Department of Agrarian Reform
Adjudication Board in DARAB Case No. 14727 is REINSTATED and AFFIRMED with the
MODIFICATION ordering respondents Ernesto Duldulao and Felipe Pajarillo to pay petitioner
Eufrocina Nieves the pertinent rental arrearages reckoned from the May 2003 cropping season,
until they have vacated the landholding subject of this case.
SO ORDERED.
SECOND DIVISION
[G. R. No. 140164. September 6, 2002]
DIONISIA L. REYES, petitioner, vs. RICARDO L. REYES, LAZARO L. REYES, NARCISO L.
REYES and MARCELO L. REYES, respondents.
 DECISION 3. No pronouncement as to costs.
QUISUMBING, J.:
SO ORDERED.[2]
This petition assails the decision[1] dated September 20, 1999 of the Court of Appeals in
CA-G.R. SP No. 47033, which reversed that of the Department of Agrarian Reform Adjudication
Board (DARAB-Central Office) in DARAB Case No. 3625. The DARAB-Central Office had Respondents then seasonably appealed the PARADs judgment to the DARAB-Central
affirmed the ruling of the Provincial Adjudicator, DARAB-Region III in Case No. 249-Bul-91, Office. In its decision of September 1, 1997, however, the DARAB-Central Office disposed of the
declaring petitioner Dionisia L. Reyes the lawful agricultural lessee of a parcel of land in Bulacan appeal as follows:
owned by the late Marciano Castro, and thus she is entitled to security of tenure.

After a thorough review of the records including the memoranda of the parties, we find this WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit and
petition meritorious. the subject decision AFFIRMED.
The parties are among the nine children of the late Felizardo J. Reyes, who prior to his
death was the agricultural tenant of the land subject of this uncivil dispute over tenancy rights.
SO ORDERED.[3]
The core question in this petition is, who among the parties should be considered the lawful and
rightful tenant of the Castro property? The DARAB ruled in favor of petitioner, the appellate court
held otherwise. In affirming the ruling of the PARAD, the DARAB Central Office found that pursuant to the
agricultural lease contract entered into between Dionisia and the Castros, the former was
As disclosed by the record, the instant case stemmed from a complaint for reinstatement designated by the latter to substitute the late Felizardo Reyes as tenant. It held:
with damages filed with the DARAB Region III Office by Dionisia Reyes on April 22, 1991
against her four younger brothers, herein respondents. She alleged that her father, the late
Felizardo Reyes, was the tenant of a two-hectare agricultural lot in Parulan, Plaridel, Bulacan, When an agricultural tenant dies, the choice for the substitute tenant is given to the land owner. It
owned by Marciano Castro. After her fathers death on February 17, 1989, she and Marciano
Castro, through the latters son and attorney-in-fact, Ramon R. Castro, executed a leasehold is the latter who has the option to place a new tenant of his choice on the land. That choice is,
contract naming her as the agricultural lessee of the property. However, sometime before the however, not absolute as it shall be exercised from among the surviving compulsory heirs of the
start of the planting of the dry season crop in 1989, herein respondents forcibly entered the area
and occupied a one-hectare portion of the property. They claimed to be the tenants thereof. deceased tenant. Hence, the surviving heirs cannot preempt that choice by deciding among
Respondents then paid rent to the Castros overseer, Armando Duran, and continued to occupy themselves who shall take-over the cultivation or opting to cultivate the land collectively. It is only
half of the property to petitioners damage and prejudice.
when the landowner fails to exercise such right, or waive the same, that the survivors may agree
In their answer, respondents denied Dionisias claim that she was the bona fide leasehold
among themselves regarding the cultivation. The law is specific on the matter as so provided in
tenant. They claimed that they inherited the lease rights to the property from their deceased
father. Respondents pointed out that petitioner was a woman who could not possibly work or till Section 9, Republic Act No. 3844[4]
the land by herself. They likewise averred that they were the ones actually cultivating the portion
occupied by them. Hence, petitioners claim to be the lawful agricultural lessee had no basis,
either in fact or in law. xxx

After attempts to amicably solve the dispute failed, the DARAB Provincial Adjudicator
(PARAD) ruled for petitioner, thus:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Ordering respondents Ricardo Reyes, Lazaro Reyes, Narciso Reyes and Marcelo Reyes to
respect the tenurial status of herein petitioner Dionisia Reyes over the disputed landholding;
2. Ordering respondents to return the one-hectare portion which had been taken forcibly and to
cease and desist from molesting, interfering, occupying petitioners peaceful possession over the
disputed landholding;
Neither is their argument that Plaintiff-Appellee, being a woman, is not capable of discharging
the demands of farming, valid. This Board finds said argument anachronistic with the changing
times of great awareness of the potentials of women. Women today are found manning our
commerce and industry, and agriculture is no exception.[5]
In accordance with Section 54 of the Comprehensive Agrarian Reform Law (R. A. No.
6657),[6] respondents elevated the case to the Court of Appeals, which docketed their appeal as
CA-G.R. SP No. 47033. On appeal, respondents changed their theory. They abandoned their
argument that they had inherited the tenancy rights of their late father and instead postulated
that an implied tenancy had been created when the Castros overseer accepted rentals totaling
40 cavans of palay from them on behalf of the owner. As earlier stated, the appellate court
reversed the decision of the DARAB-Central Office. The decretal portion of its decision reads:

45 | JESSIE DELA PEA

WHEREFORE, premises considered, the petition is hereby GRANTED. The respondent is ordered
to respect the tenurial status of petitioners over the one (1) hectare portion of the two (2) hectare-
property of Ramon R. Castro situated in Barangay Parulan, Plaridel, Bulacan.
No costs.
SO ORDERED.[7]
The Court of Appeals held that an implied tenancy existed between herein respondents
and the landowner because:
In point of time, Ricardo Reyes actual possession and cultivation of the subject property came
earlier than the possession of respondent Dionisia Reyes by virtue of the said leasehold contract
executed on November 6, 1989. Further, Armando Duran testified that he served as the overseer
of the subject property from the period 1967 to 1993, since the time of Antonio Castro, after
which, during the time of Marciano Castro up to the time of the administration of the subject
property by Ramon R. Castro who inherited the same (TSN July 12, 1994, pp. 3, 9; Rollo, pp. 98,
104). In effect, Armando Duran was still the overseer of the subject property after the death of
Felizardo Reyes on February 17, 1989 and was still the overseer of the subject property when he
allowed petitioners to continue the tenancy thereof left by the late Felizardo. The fact that
Armando Duran was the overseer for a period of sixteen (16) years, the petitioners were made to
believe of his authority from the Castro family relative to the administration of the subject
property. On this account, the acquiescence of Duran in allowing or permitting petitioner Ricardo
Reyes to posses and cultivate of the one (1) hectare subject property immediately after the death
of Felizardo is binding to the Castro family including Ramon Castro, the new landowner.[8]
The appellate court then went on to rule that by virtue of this implied tenancy created in
favor of herein respondents, the leasehold contract between the Castros and petitioner could be
made effective only on the other one - hectare portion of the disputed property.
Hence, the instant petition, anchored on the following assignment of errors:
A.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN
DISREGARDING THE SUBSTANTIAL EVIDENCE RULE BY OVERTURNING
THE BINDING FINDINGS OF FACT OF THE DARAB PROVINCIAL
ADJUDICATOR AND THE NATIONAL DARAB ITSELF.
B.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN
HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE
BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN
46 | JESSIE DELA PEA
INFERENCE, THAT HEREIN RESPONDENTS WERE MADE TO BELIEVE
THAT THE OVERSEER HAD AUTHORITY FROM THE LANDOWNER TO
INSTITUTE TENANT/S FOR THE LAND, UPON THE BARE PREMISE THAT
THE OVERSEER WAS SUCH FOR 16 YEARS.
C.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN
HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE
BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN
INFERENCE, THAT THE ACQUIESCENCE OF THE OVERSEER TO
RICARDO REYES POSSESSION AND CULTIVATION OF THE 1-HECTARE
PORTION OF THE LAND IMMEDIATELY AFTER THE DEATH OF THE
ORIGINAL TENANT IS BINDING ON THE LANDOWNER.
D.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN
HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE
BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN INFERENCE
THAT AN IMPLIED TENANCY WAS ESTABLISHED BETWEEN THE
LANDOWNER AND HEREIN RESPONDENTS RICARDO L. REYES, ET AL.,
UPON THE BARE PREMISE THAT THE OVERSEER HAD ALLOWED THEM
TO CONTINUE THE LEASEHOLD RELATION LEFT BY THE ORIGINAL
TENANT AS TO THE 1-HECTARE PORTION OF THE LAND.
E.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN
HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE
BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN
INFERENCE, THAT HEREIN PETITIONER DIONISIA L. REYES CANNOT BE
CONSIDERED A TENANT EVEN IF SO DESIGNATED IN A WRITTEN
CONTRACT, UPON THE BARE PREMISE THAT THE 1-HECTARE PORTION
OF THE LAND WAS IN THE ACTUAL POSSESSION OF HEREIN
RESPONDENTS RICARDO L. REYES, ET AL.
F.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN
HOLDING, WITHOUT BASIS IN FACT AND LAW, BUT MERELY ON THE
BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN
INFERENCE, THAT HEREIN RESPONDENTS RICARDO L. REYES, ET AL.
HAVE SQUARELY MET THE REQUIREMENTS OF THE LAW FOR THE
EXISTENCE OF A TENANCY RELATIONSHIP BETWEEN THEM AND THE
LANDOWNER.[9]
The grounds relied upon by petitioner can be reduced to only two issues, to wit:
(1) Did the Court of Appeals err in disregarding the substantial evidence rule with respect to the
DARAB findings?
(2) Did the appellate court commit a reversible error of law in finding that respondents had
satisfactorily met the requirements of a tenancy relationship?
 At the outset, respondents are reminded of the time-honored rule that in the interests of
fair play and substantial justice, a party is barred from changing his theory of the case on appeal.
On the first issue, petitioner pleads that in agrarian cases, the power of appellate review is
limited to questions of law and findings of fact of the DARAB, when supported by substantial
evidence, shall be binding upon the Court of Appeals. Hence, the appellate court cannot make
its own findings of fact and substitute the same in lieu of the findings of the DARAB, unless there
was grave abuse of discretion on the part of the DARAB. Consequently, it was error for the
appellate court to make its own finding that respondent Ricardo Reyes assumed possession and
cultivation of the land from the time Felizardo died. Petitioner points out that this finding by the
Court of Appeals contradicted the finding of the DARAB that petitioner Dionisia Reyes took over
the cultivation of the property after their fathers death. Petitioner further stresses that the finding
by the appellate court of Ricardos previous possession runs counter to the finding of the DARAB
that Ricardo was a mere usurper who forcibly took over the disputed one-hectare portion. The
appellate court also erred in finding that Ricardo and other respondents were made to believe
that overseer Duran had authority to bind the Castro family to allow them to possess and
cultivate the lot. This is because the DARAB found that Durans authority was limited only to
collecting rentals from tenants duly appointed by the Castros, and Duran was in bad faith in
accepting two rentals from Ricardo and his co-respondents.
Respondents argue that Duran being the overseer of the landowner is an extension of the
latters personality as an agent of the Castros. Ramon Castro, who succeeded after Marciano
Castros death, in allowing his overseer to accept agricultural rentals from respondents is now
estopped from denying that the latter are his tenants. Moreover, they should be given the
opportunity to work the land since this is after all what their late father, Felizardo, wanted before
his demise.
In Malate vs. Court of Appeals, we held that:
In appeals in agrarian cases, the only function required of the Court of Appeals is to determine
whether the findings of fact of the Court of Agrarian Relations are supported by substantial
evidence. And substantial evidence has been defined to be such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion and its absence is not shown
by stressing that there is contrary evidence on record, direct or circumstantial, and where the
findings of fact of the agrarian court are supported by substantial evidence, such findings are
conclusive and binding on the appellate court.[10]
Stated differently, the appellate court cannot make its own findings of fact and substitute
the same for the findings of fact of the DARAB.
A perusal of the assailed decision clearly shows that nowhere did the Court of Appeals
rule that the findings of fact of the DARAB Region III Provincial Adjudicator or the DARAB-
Central Office were unsupported by substantial evidence. Nor did the appellate court hold that
said findings were made with grave abuse of discretion on the part of the agrarian quasi-judicial
agencies. An examination of the record categorically shows that the findings of fact of the
DARAB were supported by substantial evidence. Perforce, the Malate ruling must apply to the
instant case. The finding of the DARAB that petitioner, by virtue of the contract of agricultural
leasehold entered into between her and the Castros, is the substitute tenant of the latter
in lieu of her deceased father, is binding upon the appellate court and this Court. Equally
conclusive upon the court a quo and this Court is the finding by the DARAB that respondents
47 | JESSIE DELA PEA
were mere usurpers who failed to present any proof as to the existence of a tenancy relationship
between them and the Castro family.
On the second issue, the appellate court found that an implied tenancy was created when
Duran, the ex-overseer of the Castros, acquiesced in the taking over and cultivation of a one-
hectare portion of the land. It went on to rule that the Castros were estopped from denying this
implied tenancy in view of the fact that they had allowed Duran, as their agent, to accept rentals
from respondents.
Before us, petitioner asserts that Duran cannot be deemed an implied agent of the
Castros under Article 1869 of the Civil Code[11] since there are neither acts nor omissions of
either Marciano Castro or Ramon Castro from which to imply an agency. She also submits that
there is no estoppel to bind the Castros to the acts of Duran, since the former had no knowledge
of the assumption by Duran of their authority. Furthermore, the landowners made no false
representations or deception vis--vis respondents. Hence, the elements of estoppel are not
present in this instance.
Respondents aver that an implied tenancy existed in view of the fact that Duran was
undisputably the overseer of the landowner. They add that Duran, as overseer, accepted 20
cavans of palay as rentals on October 17, 1990 and another 20 cavans on April 1, 1991 from
Ricardo. Receipt of these rentals was properly documented. [12] Duran then delivered the rentals
to Elena Castro, sister of Ramon, who in turn delivered the rentals to the latter. An implied
tenancy was created between respondents and Ramon, said the respondents, since Duran as
overseer of the landholding was the extension of the personality of the landowner. They aver
that in effect, a delivery of rentals to Duran was a delivery to an agent of the landowner. They
argue that having accepted the rental payments made to his agent, Ramon is now estopped
from denying the existence of an implied tenancy between him and respondents.
We find respondents contentions far from persuasive.
The present dispute involves an agricultural leasehold. The governing law is R.A. No.
3844,[13] which, except for Section 35 thereof, was not specifically repealed by the passage of
the Comprehensive Agrarian Reform Law of 1988 (R.A. No. 6657), but was intended to have
suppletory effect to the latter law.[14] Under R.A. 3844, two modes are provided for in the
establishment of an agricultural leasehold relation: (1) by operation of law in accordance with
Section 4 of the said act; or (2) by oral or written agreement, either express or implied.[15] By
operation of law simply means the abolition of the agricultural share tenancy system and the
conversion of share tenancy relations into leasehold relations. The other method is the
agricultural leasehold contract, which may either be oral or in writing. In the instant case, it is not
disputed that an agricultural leasehold contract was entered into between petitioner and Ramon
Castro. Respondents, however, insist that an agricultural leasehold contract over a one-hectare
portion of the landholding arose as a result of the actions of Ramons overseer, who must be
viewed as the latters agent. They conclude that because of this implied leasehold, the
application of the contract between petitioner and the landowner should be limited to the
remaining portion of the property.
Respondents reasoning is flawed. While undoubtedly Duran was an agent of Ramon, he
was not a general agent of the latter with respect to the landholding. The record shows that as
overseer, Durans duties and responsibilities were limited to issu(ing) receipt(s), selling mangoes
and bamboo trees and all other things saleable.[16] Thus, by his own admission, Duran was a
special agent under Article 1876 of the Civil Code.[17] Durans duties and responsibilities as a
special agent do not include the acceptance of rentals from persons other than the tenant so
designated by the landowner. Durans authority as a special agent likewise excludes the power
to appoint tenants or successor-tenants. Clearly, Duran acted beyond the limits of his authority
as an agent. We cannot agree with the Court of Appeals did that since Duran had been the
overseer of the Castros for 16 years, he thereby made respondents believe he had full authority
from the Castro family relative to the administration of the subject property. Regardless of the
number of years that Duran had been the overseer of the Castros, there is absolutely no
showing that he was ever authorized to appoint tenants or successor-tenants for the Castros,
nor to accept rentals from the persons he would appoint. Absent substantial evidence to show
Durans authority from the Castros to give consent to the creation of a tenancy relationship, his
actions could not give rise to an implied tenancy. In fact, Duran admitted that he was aware of
the existence of the leasehold contract between petitioner and the Castros, naming the former
as the successor-tenant to the property.[18] Since an implied tenancy between the same
landowners and respondents is incompatible with this express and written leasehold contract
and given the absolute lack of substantial evidence to support the existence of an implied
tenancy, the express tenancy contract must be maintained.

Respondents contend, however, that Ramon Castro, having received the 40 cavans from
Duran, is now estopped to deny the existence of an implied tenancy. We find nothing in the
records, however, to support respondents stance. Duran testified that he did not deliver the
palay rentals to Ramon, but to his sister, who in turn told him that she had forwarded the palay to
Ramon.[19] Duran had no personal knowledge that Ramon received the rentals which the former
had allegedly delivered to the latters sister. His testimony with respect to the receipt by Ramon
of the rentals is hearsay and has no probative value. The receipts issued to respondents do not
bear the name and signature of Ramon Castro. Given these circumstances, Ramon Castro
cannot be deemed estopped from denying the existence of a tenancy relationship between him
and respondents.

One final note. Respondents original stance before the DARAB that they had inherited or
succeeded to the tenancy rights of their late father is likewise erroneous. As correctly found by
the DARAB:

Defendants-Appellants should not confuse the law on succession provided for in the Civil Code of
the Philippines with succession in agrarian cases. In the former, (the) statute spreads the estate of
the deceased throughout his heirs; while in agrarian laws, the security of tenure of the deceased
tenant shall pass on to only one (1) heir in the manner provided for in Section 9 [20]

We are thus constrained to conclude that respondents original stance as well as new
theory of implied tenancy is without merit.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R.
SP No. 47033 is REVERSED and SET ASIDE. The judgment of the DARAB in DARAB Case
No. 3625 affirming the decision of the Provincial Adjudicator of DARAB Region III in DARAB
Case No. 249-Bul-91 is hereby REINSTATED. No pronouncement as to costs.

SO ORDERED.

48 | JESSIE DELA PEA