SECONDDIVISION

[G.R.No.135999.April19,2002]

MILESTONEREALTYandCO.,INC.andWILLIAML.PEREZ,petitioners, vs. HON.

COURT OF APPEALS, DELIA RAZON PEA and RAYMUNDO EUGENIO,
respondents.

DECISION
QUISUMBING,J.:

PetitionersMilestoneRealty&Co.,Inc.(Milestoneforbrevity)andWilliamPerezseekthereversalofthe
decision[1]datedMay29,1998oftheCourtofAppealsinCAG.R.SPNO.39987.Saiddecisionaffirmedthat
oftheDepartmentofAgrarianReformAdjudicationBoard(DARAB),[2] whichhaddeclaredrespondentDelia
Razon Pea as the bona fide tenant of a lot in Bulacan, and voided the sale of said lot thereby reversing the
decisionoftheProvincialAgrarianReformAdjudicator(PARAD).[3]
Thefactsasculledfromtherecordsareasfollows:
SpousesAlfonsoOlympiaandCarolinaZacariasandSpousesClaroZacariasandCristinaLorenzowerethe
coowners of an agricultural land identified as Lot 616 of the Malinta Estate. Said lot has an area of 23,703
square meters, covered by Transfer Certificate of Title (TCT) No. 26019, located at Karuhatan, Valenzuela,
Bulacan,nowValenzuelaCity.Eventually, Carolina became the owner of the property by virtue of a Deed of
Extrajudicial Settlement executed on October 17, 1976 by the heirs of Alfonso Olympia, one of whom is
FranciscoOlympia,ontheirrespectivesharesafterAlfonsosdeathandbyanAffidavitofSettlementexecuted
onJune24,1992bythespousesClaroandCristinaZacariasontheirsharesintheproperty.
Meanwhile, Anacleto Pea who was a tenant of the property and a holder of a Certificate of Agricultural
LeaseholdissuedonFebruary23,1982,hadahouseconstructedonthelot.Hehadseveralchildrenonthefirst
marriage, among whom are Emilio Pea and Celia Segovia, who also had their houses constructed on the
property.OnFebruary4,1986,Anacleto,whowasalready78yearsoldandawidower,marriedDeliaRazon,
then only 29 years old. On February 17, 1990, Anacleto died intestate and was survived by Delia and his
childreninhisfirstmarriage,includingEmilio.
Emilio and Delia, the latter with the help of respondent Raymundo Eugenio, her soninlaw, continued
tillingandcultivatingtheproperty.OnJanuary22,1992,Emiliosignedahandwrittendeclarationthathewas
thetenantinthelandandhewasreturningthelandholdingtoCarolinaZacariasinconsiderationofthesumof
P1,500,000asdisturbancecompensation.Heinitiallyoptedfora1,000squaremeterhomelotbutlaterchanged
hismind.Afterreceiptofthemoney,heexecutedaKatibayangPaglilipatngPagmamayari.
In the meantime, petitioner William Perez, Joseph Lim, Willy Lim, Winston Lim, Edgar Lim, and Jaime
Lim established Milestone as incorporators, in order to acquire and develop the aforesaid property and the
adjacentparcel,LotNo.617oftheMalintaEstate.
On July 30, 1992, Carolina Zacarias executed a deed of sale transfering the Lot No. 616 to petitioner
MilestoneforP7,110,000.TCTNo.26019wascancelledandinlieuthereof,TCTNo.25433wasissuedinthe
nameofMilestone.Onthesamedate,theadjoiningLotNo.617coveredbyTCTNo.V25431wasissuedunder
thenameofpetitionerWilliamPerezwhosubsequentlysoldthesametoMilestoneonthebasisofwhichTCT
No.V26481wasissuedtoit.Thus,Milestonebecametheowneroftheadjoininglots,LotNos.616and617of
theMalintaEstatewithatotalareaofthree(3)hectares.Developmentofthepropertythencommenced.
 On October 13, 1992, private respondents Delia Razon Pea and Raymundo Eugenio filed a complaint
againstEmilioPea,CarolinaZacariasandherbrotherFranciscoOlympia,andWilliamPerezwiththePARAD,
whichwasamendedonJanuary6,1993toimpleadMilestoneasrespondent,prayinginteraliatodeclareasnull
andvoidthesalebyCarolinatoPerezandbythelattertoMilestone,andtorecognizeandrespectthetenancyof
privaterespondentsDeliaandRaymundo.
Inheranswer,CarolinaZacariasdeclaredthatshechoseEmilioPeaashertenantbeneficiaryonthesaid
propertywithin30daysafterthedeathofAnacleto,conformablywithSection9ofRepublicActNo.3844.[4]
OnJuly28,1993,thePARADrenderedadecisiondismissingthecomplaintasfollows:[5]

WHEREFORE,upontheforegoingpremises,judgmentisherebyrendered:

1.Dismissingtheinstantcomplaint
2.DissolvingthewritofPreliminaryInjunctionissuedonMay24,1993
3.Directing the Cashier of the DAR Regional Office at Pasig, Metro Manila to release to the Petitioners or
their duly authorized representative, the cash bond posted in the amount of Fifteen Thousand Pesos
[P15,000.00].
4.Nopronouncementastocosts.

SOORDERED.

Inthedecision,thePARADruledthattheorderofpreferencecitedinSection9ofRepublicAct3844isnot
absolute and may be disregarded for valid cause.[6] It also took note that Emilios two siblings have openly
recognizedEmilioasthelegitimatesuccessortoAnacletostenancyrights.[7]
Delia Razon Pea and Raymundo Eugenio appealed from the PARADs decision to the DARAB. On
September 5, 1995, the DARAB reversed the decision of PARAD, the dispositive portion of which reads as
follows:

WHEREFORE,premisesconsidered,theinstantappealisherebyGRANTED.TheDecisiondatedJuly28,1993
isREVERSED.

Judgmentisissued:

1.DeclaringDeliaRazonPeathebonafidetenantoverthelandholdinginquestion
2.Declaringtheseriesofpurchaseandsaleofthelandholdinginquestionasillegal,hence,nullandvoid
3.Directing the Register of Deeds to cancel TCT No. V26485 and all subsequent titles obtained thereafter
overthelandholdingnamedunderWilliamL.PerezandMilestoneRealtyandCo.,Inc.
4.Allowing Delia Razon Pea to exercise her right of redemption over the land within the prescribed period
grantedbylaw
5. Enjoining all RespondentsAppellees to desist from further disturbing Delia Razon Pea in the peaceful
possessionandcultivationoftheland
6. Directing the DARDOJ Task Force on Illegal Conversion to file appropriate charges before the Special
AgrarianCourtasregardsthecriminalaspectofthiscase.

SOORDERED.[8]

InreversingthePARADsdecision,theDARABnotedthatCarolinasaffidavitdidnotshowanycategorical
admissionthatshemadeherchoicewithintheone(1)monthperiodexcepttostatethatwhenAnacletodied,the
right of the deceased was inherited by Emilio Pea which could only mean that she recognized Emilio Pea by
forceofcircumstanceunderanebuloustimeframe.[9]
 InapetitionforreviewtotheCourtofAppeals,thelatteraffirmedtheDARABsdecision,thus:

Weareconvinced,beyondcavil,inthepresentrecourse,thatthePetitionersCarolinaOlympiaandFrancisco
Olympiafailedtochoose,withinthestatutoryperiodtherefor,anytenantinsubstitutionofAnacletoPea,the
erstwhiledeceasedtenantonthelandholding,andthat,withoutpriororsimultaneousnoticetoPrivate
RespondentDeliaPea,thePetitionersmadetheirchoiceofPetitionerEmilioPeaassubstitutetenantonlyin
January,1992,aftertheyhadagreedtosellthepropertytothePetitionerMilestoneRealty&Co.,Inc.

INSUM,then,WefindnoreversibleerrorcommittedbytheDARABunderitsoppungedDecision.

INTHELIGHTOFALLTHEFOREGOING,thePetitionisdeniedduecourseandisherebydismissed.The
appealedDecisionisherebyAFFIRMED.WithcostsagainstthePetitioners.

SOORDERED.[10]

Subsequently,petitionersfiledaMotionforReconsiderationoftheCAsdecision.Saidmotionwasdenied
onOctober12,1998.

Hence,thispetitionassigningthefollowingerrorsallegedlycommittedbyrespondentCourtofAppeals:[11]
I

THERESPONDENTCOURTOFAPPEALSERREDWITHGRAVEABUSEOFDISCRETION
AMOUNTINGTOLACKOREXCESSOFJURISDICTIONINTHECONSTRUCTIONAND
APPLICATIONOFSECTION9OFREPUBLICACT3844BYHOLDINGTHATPRIVATE
RESPONDENTDELIARAZONPEAHASSUCCEEDEDTOHERDECEASEDHUSBANDS
LEASEHOLDRIGHTBYOPERATIONOFLAW.

II

THERESPONDENTCOURTOFAPPEALSERREDINDECLARINGTHESALEBYTHE
LANDOWNERTOPETITIONERWILLIAML.PEREZ,ANDBYTHELATTERTOPETITIONER
MILESTONEREALTY&CO.,INC.ASNULLANDVOID,ANDINORDERINGTHE
CANCELLATIONOFTHEIRRESPECTIVETITLES.[12]

Thesetwoassignederrorstenderedissuesarticulatedinpetitionersmemorandumasfollows:
1. Whether or not Emilio Pea was validly chosen by Carolina Zacarias as the new tenant over the
landholdingunderdisputewithinone(1)monthfromthedeathofhisfatherAnacleto,asprescribedbySection9
ofR.A.3844,asamended
2.WhetherornotDeliaRazonPeawasabonafideordejuretenantoverthelandholdinginquestiontobe
accordedtheallegedrightstosecurityoftenureandofredemptionundertheagrarianreformlaws
3.Whether or not Emilio Pea validly renounced or otherwise caused the extinction of his tenancy rights
overthesubjectproperty
4.WhetherornotthesalesofthesubjectpropertybyCarolinaZacariastoWilliamPerezandbythelatterto
Milestone were null and void, hence merited the declaration of nullity and cancellation of the respondents
respectivetitles
5.WhetherornotillegalconversionwascommittedbyMilestone.
Insum,wefindthefollowingrelevantissuesnowforourresolution:
1.WhetherornotDeliaRazonPeahasarightoffirstpriorityoverEmilioPeainsucceedingtothetenancy
rightsofAnacletooverthesubjectlandholding.
 2.WhetherornotthesalesofthesubjectlotsbyCarolinaZacariastoWilliamPerezandthentoMilestone
arenullandvoid.
At the outset, it bears stressing that there appears to be no dispute as to tenancy relationship between
CarolinaZacariasandthelateAnacletoPea.Thecontroversycentersonwhoistherightfulandlegalsuccessor
toAnacletostenancyrights.RelevanttotheresolutionofthefirstissueisSection9ofRepublicActNo.3844,
otherwiseknownastheCodeofAgrarianReforms,whichprovidesasfollows:

SEC.9.AgriculturalLeaseholdRelationNotExtinguishedbyDeathorIncapacityoftheParties.Incaseof
deathorpermanentincapacityoftheagriculturallesseetoworkhislandholding,theleaseholdshallcontinue
betweentheagriculturallessorandthepersonwhocancultivatethelandholdingpersonally,chosenbythe
agriculturallessorwithinonemonthfromsuchdeathorpermanentincapacity,fromamongthefollowing:(a)the
survivingspouse(b)theeldestdirectdescendantbyconsanguinityor(c)thenexteldestdescendantor
descendantsintheorderoftheirage:Provided,Thatincasethedeathorpermanentincapacityoftheagricultural
lesseeoccursduringtheagriculturalyear,suchchoiceshallbeexercisedattheendofthatagriculturalyear:
Provided,further,Thatintheeventtheagriculturallessorfailstoexercisehischoicewithintheperiodsherein
provided,thepriorityshallbeinaccordancewiththeorderhereinestablished.

Incaseofdeathorpermanentincapacityoftheagriculturallessor,theleaseholdshallbindhislegalheirs.

PetitionerscontendthatSection9doesnotrequireanyformormannerinwhichthechoiceshouldbemade.
[13] They assail the Court of Appeals for heavily relying on the findings of the DARAB that there was no
convincingproofthatCarolinaexercisedherrighttochoosefromamongthequalifiedheirsareplacementfor
the deceased tenant,[14] when in fact a choice was made. In support thereof, petitioners invoke Carolinas
affidavit and her Answer to the complaint in the PARAD, both dated November 16, 1992 where Carolina
recognizedEmilioPeaasthesuccessortoAnacletostenancyrights.PetitionersarguedthatDeliacouldnothave
qualified as a successortenant to Anacleto due to lack of personal cultivation.[15] Further, she had not been
payingrentontheland.
Responding to petitioners contentions, respondents argue that Carolina did not choose the successor to
AnacletostenancyrightswithinonemonthfromthedeathofAnacleto.Respondentsnotethatitwasonlyafter
the lapse of two (2) years from the death of Anacleto on February 17, 1990, that both Carolina and Emilio
claimedintheirrespectiveaffidavitsthatEmilioinheritedtherightsofAnacletoasatenant.[16] According to
respondents,suchinactiontomakeachoicewithinthetimeframerequiredbylawisequivalenttowaiveron
Carolinasparttochooseasubstitutetenant.[17]Also,itappearsthatCarolinamadethechoiceinfavorofEmilio
Pea only by force of circumstance, i.e., when she was in the process of negotiating the sale of the land to
petitionersPerezandMilestone.[18]
Onthisscore,weagreewithprivaterespondents.AsfoundbyboththeDARABandtheCourtofAppeals,
Carolina had failed to exercise her right to choose a substitute for the deceased tenant, from among those
qualified,withinthestatutoryperiod.[19] No cogent reason compels us to disturb the findings of the Court of
Appeals. As a general rule, findings of fact of the Court of Appeals are final and conclusive and cannot be
reviewed on appeal by the Supreme Court, provided they are borne out by the record or based on substantial
evidence.[20]
Section 9 of Republic Act No. 3844 is clear and unequivocal in providing for the rules on succession to
tenancy rights. A close examination of the provision leaves no doubt as to its rationale of providing for
continuityinagriculturalleaseholdrelationincaseofdeathorincapacityofaparty.Tothisend,itprovidesthat
incaseofdeathorpermanentincapacityoftheagriculturallesseetoworkhislandholding,theleaseholdshall
continue between the agricultural lessor and the person who can cultivate the landholding personally. In the
same vein, the leasehold shall bind the legal heirs of the agricultural lessor in case of death or permanent
incapacityofthelatter.Itistoachievethiscontinuityofrelationshipthattheagriculturallessorismandatedby
lawtochooseasuccessortenantwithinonemonthfromthedeathorincapacityoftheagriculturallesseefrom
amongthefollowing:(1)survivingspouse(2)eldestdirectdescendantbyconsanguinityor(3)thenexteldest
directdescendantordescendantsintheorderoftheirage.Shouldthelessorfailtoexercisehischoicewithinone
monthfromthedeathofthetenant,thepriorityshallbeinaccordancewiththeaforementionedorder.InManuel
vs.CourtofAppeals,[21]weruledthat:

Agriculturalleaseholdrelationshipisnotextinguishedbythedeathorincapacityoftheparties.Incasethe
agriculturallesseediesorisincapacitated,theleaseholdrelationshallcontinuebetweentheagriculturallessor
andanyofthelegalheirsoftheagriculturallesseewhocancultivatethelandholdingpersonally,intheorderof
preferenceprovidedunderSection9ofRepublicAct3844,aschosenbythelessorwithinonemonthfromsuch
deathorpermanentincapacity.SincepetitionerRodolfoManuelfailedtoexercisehisrightofchoicewithin
thestatutoryperiod,EdwardoswidowEnriqueta,whoisfirstintheorderofpreferenceandwhocontinued
workingonthelandholdinguponherhusbandsdeath,succeededhimasagriculturallessee.Thus,Enriqueta
issubrogatedtotherightsofherhusbandandcouldexerciseeveryrightEduardohadasagriculturallessee,
includingtherightsofpreemptionandredemption.

Applying Section 9 of Republic Act 3844, in the light of prevailing jurisprudence, it is undeniable that
respondentDeliaRazonPea,thesurvivingspouseoftheoriginaltenant,AnacletoPea,isthefirstintheorderof
preference to succeed to the tenancy rights of her husband because the lessor, Carolina Zacarias, failed to
exerciseherrightofchoicewithintheonemonthperiodfromthetimeofAnacletosdeath.
Petitioners cannot find succor in the declarations of Emilio Pea and the affidavit of Carolina Zacarias,
stating that Emilio succeeded to the tenancy rights of Anacleto.In the first place, Carolinas affidavit and her
AnswerfiledbeforethePARADwerebothexecutedin1992,oralmosttwoyearsafterthedeathofAnacletoon
February17,1990,waybeyondtheonemonthperiodprovidedforinSection9ofRepublicAct3844.Secondly,
asfoundbytheDARAB,ascrutinyofCarolinasdeclarationwillshowthatshenevercategoricallyaverredthat
shemadeherchoicewithintheone(1)monthperiod.Instead,shenarratedpassivelythatwhenAnacletodied,
therightofthedeceasedwasinheritedbyEmilioPea,promptingtheDARABtoconcludeitmerelyconnotes
thatsherecognizedEmilioPeabyforceofcircumstanceunderanebuloustimeframe.[22]
PetitionersfurtherarguethatDeliacannotqualifyastenantevenontheassumptionthatshewastherightful
successortoAnacletostenancyrights,becauseshedidnotpersonallycultivatethelandanddidnotpayrent.In
essence,petitionersurgethisCourttoascertainandevaluatecertainmaterialfactswhich,howeverarenotwithin
theprovinceofthisCourttoconsiderinapetitionforreview.Determinationofpersonalcultivationandrental
paymentsarefactualissuesbeyondthereachofthispetition.Wellestablishedistherulethatinanappealvia
certiorari,onlyquestionsoflawmaybereviewed.[23]
Onthesecondissue,however,weareunabletoagreewiththerulingofrespondentCourtofAppealsandof
DARABthatthesaleofthelandinquestionshouldbedeclarednullandvoid.Thereisnolegalbasisforsuch
declaration.Lestitbeforgotten,itisCarolinaZacariaswhoistheownerofthesubjectlandandbothEmilioPea
andDeliaRazonPeaonlysucceededtothetenancyrightsofAnacleto.
As an owner, Carolina has the right to dispose of the property without other limitations than those
establishedbylaw.[24]ThisattributeofownershipisimpliedlyrecognizedinSections10,11and12ofRepublic
Act No. 3844,[25] where the law allows the agricultural lessor to sell the landholding, with or without the
knowledgeoftheagriculturallesseeandatthesametimerecognizestherightofpreemptionandredemptionof
the agricultural lessee. Thus, the existence of tenancy rights of agricultural lessee cannot affect nor derogate
fromtherightoftheagriculturallessorasownertodisposeoftheproperty.The onlyrightofthe agricultural
lesseeorhissuccessorininterestistherightofpreemptionand/orredemption.
Inthecaseatbar,itisundisputedthatCarolinabecametheabsoluteownerofthesubjectlandholdingby
virtueofDeedofExtrajudicialSettlementandAffidavitofSettlementexecutedbytheotherheirsofAlfonso
OlympiaandSpousesClaroandCristinaZacarias.Astheowner,itiswithinherrighttoexecuteadeedofsale
ofsaidlandholding,withoutprejudicehowevertothetenancyrightsandtherightofredemptionofDeliaRazon
Pea.InManuel,[26]weheldthatthetenancyrelationshipisnotaffectedorseveredbythechangeofownership.
Thenewownerisundertheobligationtorespectandmaintainthetenantslandholding.Inturn,DeliaRazonPea,
asthesuccessortenant,hasthelegalrightofredemption.Thisrightofredemptionisstatutoryincharacter.It
attachestoaparticularlandholdingbyoperationoflaw.[27]
Finally,astothequestionofillegalconversionoftheland,sufficeittostatethatsuchdeterminationisnot
within the jurisdiction of this Court and is not proper in a petition for review on certiorari as it requires
evaluationandexaminationofpertinentfacts.
WHEREFORE,thepetitionisPARTIALLYGRANTED.TheassaileddecisionoftheCourtofAppealsin
CAG.R.SPNo.39987isAFFIRMEDinsofarasitrecognizesDeliaRazonPeaasthesuccessorofAnacleto
Peaasthetenant,therebyallowinghertoexerciseherrightofredemptionoverthelandwithintheprescribed
periodgrantedbylaw.However,saiddecisionisREVERSEDandSETASIDEinsofarasitdeclaredthesaleof
saidlandholdingnullandvoid.INLIEUTHEREOF,SAIDSALEBYCAROLINAZACARIASISHEREBY
DECLARED VALID, SUBJECT TO THE TENANCY RIGHTS AND RIGHT OF REDEMPTION by the
TENANTLESSEE,privaterespondentDeliaRazonPea.
Nopronouncementsastocosts
SOORDERED.
Bellosillo,(Chairman),Mendoza,andDeLeon,Jr.,JJ.,concur.
Corona,J.,nopartinthedeliberations.

[1]Rollo,pp.2540.

[2]Id.at58.

[3]Id.at44.

[4]Sec.9.AgriculturalLeaseholdRelationNotExtinguishedbyDeathorIncapacityoftheParties.Incaseofdeathorpermanent
incapacityoftheagriculturallesseetoworkinhislandholding,theleaseholdshallcontinuebetweentheagriculturallessorandthe
person who can cultivate the landholding personally, chosen by the agricultural lessor within one month from such death or
permanentincapacity,fromamongthefollowing:(a)thesurvivingspouse(b)theeldestdirectdescendantbyconsanguinityor(c)
thenexteldestdescendantordescendantsintheorderoftheirage:xx:Provided,further,Thatintheeventtheagriculturallessorfails
toexercisehischoicewithintheperiodshereinprovided,thepriorityshallbeinaccordancewiththeorderhereinestablished.xx
[5]Rollo,p.57.

[6]Id.at52.

[7]Id.at54.

[8]Id.at81.

[9]Id.at66.

[10]Id.at40.

[11]Id.at118.

[12]Id.at11.

[13]Id.at120.

[14]Ibid.

[15]Id.at133.

[16]Id.at109.

[17]Id.at110.
[18]Ibid.

[19]Id.at30.

[20]SpousesZacariasBatingal,etal.vs.CourtofAppeals,etal.,G.R.No.128636,February1,2001,p.8.

[21]G.R.No.L44686,118SCRA477,481482(1982).

[22]Supra,note9.

[23]JosefinaandMamertoR.Palonvs.GilandFlocerfidaS.NinoBrillante,et.al.,G.R.No.138042,February28,2001,p.14.

[24]Article428,CivilCodeofthePhilippines.

[25]Section10.AgriculturalLeaseholdRelationNotExtinguishedbyExpirationofPeriod,etc.Theagriculturalleaseholdrelation
underthisCodeshallnotbeextinguishedbymereexpirationofthetermorperiodinaleaseholdcontractnorbythesale,alienation
ortransferofthelegalpossessionofthelandholding.Incasetheagriculturallessorsells,alienatesortransfersthelegalpossession
of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the
agriculturallessor.
Section11.LesseesRightofPreemptionIncasetheagriculturallessordecidestosellthelandholding,theagriculturallesseeshall
havethepreferentialrighttobuythesameunderreasonabletermsandconditions:Provided,Thattheentirelandholdingofferedfor
salemustbepreemptedbytheDepartmentofAgrarianReformuponpetitionofthelesseeoranyofthemxxx
Section12.LesseesRightofRedemption.Incasethelandholdingissoldtoathirdpersonwithouttheknowledgeoftheagricultural
lessee,thelattershallhavetherighttoredeemthesameatareasonablepriceandconsideration:xxx
[26]Supra,note21at481.

[27]Cuaovs.CourtofAppeals,etal.,G.R.No.107159,237SCRA122,138139(1994).