[G.R. No. 106593.

November 16, 1999]

NATIONAL HOUSING AUTHORITY, petitioners, vs. HONORABLE MAURO T. ALLARDE, Presiding Judge
of the Regional Trial Court, Branch 123, Kalookan City and SPOUSES RUFINO AND JUANITA MATEO,
respondents.

DECISION

PURISIMA, J.:

Before the Court is a Petition for Certiorari under Rule 65 of the Revised Rules of Court assailing the
Order,[1] dated April 8, 1992, of Branch 123 of the Regional Trial Court of Kalookan City,[2] in Civil
Case No. C-15325, which granted the motion of the herein private respondents for the issuance
of a writ of preliminary injunction, and the Order[3] of August 4, 1992, denying petitioner's motion
for reconsideration.

The facts that matter may be culled as follows:

Lots 836 and 839, registered in the name of the Republic of the Philippines, and covered by
Transfer Certificates of Title No. 34624 and No. 34627, respectively, were acquired by the Republic
on April 2, 1938 from Philippine Trust Company.[4] Said lots form part of the Tala Estate in Bagong
Silang, Kalookan City, which, on April 26, 1971, was reserved by Proclamation No. 843 for, among
others, the housing programs of the National Housing Authority.

According to private respondent Rufino Mateo, he had lived in the disputed lots since his birth in
1928. In 1959, he started farming and working on a six-hectare portion of said lots, after the death
of his father who had cultivated a thirteen-hectare portion of the same lots.[5]

On September 1, 1983, the National Housing Authority notified the respondent spouses of the
scheduled development of the Tala Estate including the lots in question, warning them that it
would not be responsible for any damage which may be caused to the crops planted on the
said lots.[6]

In 1989, private respondent Rufino Mateo filed with the Department of Agrarian Reform a petition
for the award to them of subject disputed lots under the Comprehensive Agrarian Reform
Program (CARP).[7]

In January 1992, in pursuance of the implementation of Proclamation No. 843, petitioner caused
the bulldozing of the ricefields of private respondents, damaging the dikes and irrigations thereon,
in the process.

On March 18, 1992, the respondent spouses, relying on their claim that subject lots are agricultural
land within the coverage of the CARP,[8] brought before the respondent Regional Trial Court a
complaint for damages with prayer for a writ of preliminary injunction, to enjoin the petitioner
from bulldozing further and making constructions on the lots under controversy. Petitioner
traversed such complaint, contending that the said lots which were previously reserved by
Proclamation No. 843 for housing and resettlement purposes, are not covered by the CARP as
they are not agricultural lands within the definition and contemplation of Section 3 (c) of R. A.
No. 6657.[9]

On April 8, 1992, the respondent Court issued its assailed Order granting private respondents
prayer for a writ of preliminary injunction; opining and ruling thus:

"x x x

The Court, after considering the testimony of herein plaintiff Rufino Mateo as well as the Agrarian
Reform Officer, Danilo San Gil, that the herein plaintiffs have been occupying the subject
property and actual tillers/farmers of the land owned by the government and registered in the
name of, and administered by, the NHA, the land being an agricultural land and is, therefore,
covered by the Comprehensive Agrarian reform Program (CARP), is of the opinion that in order
to maintain the status quo of the subject property that the aforesaid prayer for the issuance of
the said writ should be, as it is hereby, GRANTED.

WHEREFORE, upon the filing by the herein plaintiffs of a bond, in the amount of P5,000.00 duly
approved by this Court, let a writ of preliminary injunction be immediately issued restraining the
defendants herein from bulldozing and making any constructions on the land farmed and tilled
by plaintiffs located in Phase IX, Bagong Silang, Kalookan City, designated as lot 836 of the Tala
Estate and of dispossessing them of said land, or until further orders by this Court.

SO ORDERED[10]

Dissatisfied therewith, the petitioner presented a Motion for Reconsideration, pointing out that the
preliminary injunction thus issued is a blatant violation of P.D. No. 1818, which proscribes the
issuance of injunctive writs against the execution or implementation of government infrastructure
projects. But on August 4, 1992, the said motion was denied by respondent Courts second Order
under attack.

Undaunted, petitioner found its way to this Court via the Petition under consideration, theorizing
that:

I.

RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION AMOUNTING TO LACK OF JURISDICTION IN

RENDERING HIS ORDER OF APRIL 8, 1992 GRANTING RESPONDENTS SPOUSES APPLICATION FOR
PRELIMINARY INJUCNTION AND ISSUING THE WRIT OF PRELIMINARY INJUNCTION DATED APRIL 15,
1992, BECAUSE HE HAD NO JURISDICTION TO ISSUE IT AND THEY ARE NOT ENTITLED TO IT.

II

RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION AMOUNTING TO LACK OF JURISDICTION IN

RENDERING HIS ORDER OF AUGUST 4, 1992 DENYING PETITIONERS MOTION FOR RECONSIDERATION
AND ADDENDUM THERETO ON THE FINDING THAT THE GROUNDS RAISED THEREIN ARE EVIDENCIARY
IN NATURE, DESPITE THE FACT THAT THEY ARE ALL SETTLED LEGAL QUESTIONS.[11]

As a rule, direct recourse to this Court is not allowed unless there are special or important grounds
for the issuance of extra-ordinary writs.[12] In the case of Garcia vs. Burgos,[13] where pure
questions of law were raised, this Court, mindful of P.D. No. 1818, entertained a direct invocation
of its jurisdiction to issue extraordinary writs, realizing the serious consequences of delay in essential
government projects.[14] So also, in Republic vs. Silverio,[15] a similar case involving government
infrastructure projects, the Court Took cognizance of an original action for Certiorari against a
Regional Trial Court.

In light of the foregoing, the Court believes, and so holds, that the present case merits
consideration by the Court. To the end that the prosecution and progress of government projects
vital to the national economy be not disrupted or hampered, this Court should pass upon and
resolve the questions of law raised by the petitioner.

The pivotal issues for resolution here are: 1) Whether or not the Compressive Agrarian Reform Law
(CARL) covers government lands reserved for specific public purposes prior to the effectivity of
said law; and 2) Whether or not housing, plants and resettlements are "infrastructure projects"
within the contemplation of P.D. No. 1818.

The petition is impressed with merit.

In Natalia Realty, Inc. vs. Department of Agrarian Reform,[16] the Court succinctly held that lands
reserved for, or converted to, non-agricultural uses by government agencies other than the
Department of Agrarian Reform, prior to the effectivity of Republic Act No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law (CARL), are not considered and treated as
agricultural lands and therefore, outside the ambit of said law,[17] on the basis of the following
disquisition:

"x x x Section 4 of R.A. 6657 provides that the CARL shall 'cover, regardless of tenurial arrangement
and commodity produced, all public and private agricultural lands.' As to what constitutes
'agricultural land,' it is referred to as 'lands devoted to agricultural activity as defined in this Act
and not classified as mineral, forest, residential, commercial or industrial land. The deliberations
of the Constitutional Commission confirm this limitation. 'Agricultural lands' are only those lands
which are 'arable and suitable agricultural lands' and 'do not include commercial, industrial and
residential lands'

Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision
cannot in any language be considered as 'agricultural lands.' These lots were intended for
residential use. They ceased to be agricultural lands upon approval of their inclusion in the
Lungsod Silangan Reservation. x x x"[18]

Thus, since as early as April 26, 1971, the Tala Estate (including the disputed lots) was reserved,
inter alia, under Presidential Proclamation No. 843, for the housing program of the National
Housing Authority, the same has been categorized as not being devoted to the agricultural
activity contemplated by Section 3 (c) of R.A. No. 6657,[19] and is, therefore, outside the
coverage of the CARL. Verily, the assailed Orders of the respondent Court declaring the lots under
controversy as "agricultural land" and restraining the petitioner from involving the same in its
housing project thereon, are evidently bereft of any sustainable basis.

Section 1 of Presidential Decree No. 1818, provides:

SECTION 1. No court in the Philippines shall have jurisdiction to issue any restraining order,
preliminary injunction, or preliminary mandatory injunction in any case, dispute, or controversy
involving an infrastructure project, or a mining, fishery, forest or other natural resource
development project of the government, or any public utility operated by the government,
including among others public utilities for the transport of the goods or commodities, stevedoring
and arrastre contracts, to prohibit any person or persons, entity or government official from
proceeding with, or continuing the execution or implementation of any such project, or the
operation of such public utility, or pursuing any lawful activity necessary for such execution,
implementation or operation (Emphasis supplied)

Clearly, the aforecited provision of law in point prohibits the Courts of the land from issuing
injunctive writs against the implementation or execution of government infrastructure
projects.[20]

Untenable is private respondents contention that the housing and resettlement projects at stake
are not infrastructure projects within the purview of Presidential Decree No. 1818.[21]

As regards the definition of infrastructure projects, the Court stressed in Republic of the Philippines
vs. Salvador Silverio and Big Bertha Construction:[22]

The term infrastructure projects means construction, improvement and rehabilitation of roads,
and bridges, railways, airports, seaports, communication facilities, irrigation, flood control and
drainage, water supply and sewage systems, shore protection, power facilities, national buildings,
school buildings, hospital buildings, and other related construction projects that form part of the
government capital investment.[23]
Applying the principle ejusdem generis, the Court is of the view, and so holds, that the
government projects involved (2) For the various plants and installations of the National Housing
Corporation, for its future expansion and for its staff and pilot housing development,[24] and (5)
For housing, resettlement sites and other uses necessary and related to an integrated social and
economic development of the entire estate and environs, x x x.[25] are infrastructure projects.
The various plants and installations, staff and pilot housing development projects, and
resettlement sites related to an integrated social and economic development of the entire estate
are construction projects forming part of the government capital investment, undertaken in
compliance with the mandate of the Constitution for the state to embark upon a continuing
program of urban land reform and housing envisioned to provide at affordable cost decent
housing and basic services to the unprivileged and homeless in urban centers and resettlement
areas.[26]

The questioned Orders of respondent Court (which is bound to follow P.D. No.1818),[27] enjoining
or preventing the implementation of subject housing and resettlement projects under the
administration of the National Housing Authority, are repugnant to Presidential Decree No. 1818.
Well-settled to the point of being elementary is the doctrine that before a writ of preliminary
injunction may issue, there must be a clear showing by the complaint of a right to be protected
and that the acts against which the writ is to be directed infringe such right.[28] Here, it is
decisively clear that the private respondents have no right to the relief sought for.

Premises studiedly viewed in proper perspective, the Court is of the irresistible finding and
conclusion that the respondent Court gravely abused its discretion in issuing the challenged
Orders in Civil Case No. C-15325.

WHEREFORE, the petition is GRANTED; the Orders, dated April 8, 1992 and August 4, 1992,
respectively, of the Regional Trial Court of Kalookan City, in Civil Case No. C-15325 are hereby SET
ASIDE; and the writ of preliminary injunction issued by virtue thereof DISSOLVED. Costs against the
private respondents.

SO ORDERED.
[G.R. No. 108941. July 6, 2000]

REYNALDO BEJASA AND ERLINDA BEJASA, petitioners, vs. THE HONORABLE COURT OF APPEALS,
Special Sixteenth Division, ISABEL CANDELARIA and JAMIE DINGLASAN, respondents.

DECISION

PARDO, J.:

This is a petition[1] assailing the decision of the Court of Appeals[2] reversing the decision of the
Regional Trial Court, Calapan, Oriental Mindoro[3] and ordering petitioners Reynaldo and Erlinda
Bejasa (hereinafter referred to as "the Bejasas") to surrender the possession of the disputed
landholdings to respondent Isabel Candelaria ("hereinafter referred to as Candelaria") and to
pay her annual rental from 1986, attorneys fees, litigation expenses and costs.[4]

Inescapably, the appeal involves the determination of a factual issue. Whether a person is a
tenant is a factual question.[5] The factual conclusions of the trial court and the Court of Appeals
are contradictory and we are constrained to review the same.[6]

We state the undisputed incidents.

This case involves two (2) parcels of land covered by TCT No. T-58191[7] and TCT No. T-59172,[8]
measuring 16 hectares and 6 hectares more or less, situated in Barangay Del Pilar, Naujan,
Oriental Mindoro. The parcels of land are indisputably owned by Isabel Candelaria.

On October 20, 1974, Candelaria entered into a three-year lease agreement over the land with
Pio Malabanan (hereinafter referred to as "Malabanan"). In the contract, Malabanan agreed
among other things: "to clear, clean and cultivate the land, to purchase or procure calamansi,
citrus and rambutan seeds or seedlings, to attend and care for whatever plants are thereon
existing, to make the necessary harvest of fruits, etc."[9]

Sometime in 1973, Malabanan hired the Bejasas to plant on the land and to clear it. The Bejasas
claim that they planted citrus, calamansi, rambutan and banana trees on the land and
shouldered all expenses of production.

On May 3, 1977, Candelaria gave Malabanan a six-year usufruct over the land, modifying their
first agreement. As per the agreement, Malabanan was under no obligation to share the harvests
with Candelaria.[10]

Sometime in 1983, Malabanan died.

On September 21, 1984, Candelaria constituted respondent Jaime Dinglasan (hereinafter

referred to as "Jaime) as her attorney-in-fact, having powers of administration over the disputed
land.[11]

On October 26, 1984, Candelaria entered into a new lease contract over the land with Victoria
Dinglasan, Jaimes wife (hereinafter referred to as "Victoria"). The contract had a term of one
year.[12]

On December 30, 1984, the Bejasas agreed to pay Victoria rent of P15,000.00 in consideration of
an "aryenduhan" or "pakyaw na bunga"[13] agreement, with a term of one year. The agreement
is below quoted:[14]

"Ako si Victoria Dinglasan bilang tagapamahala ni Isabel Candelaria ay ipinaaryendo kay

Reynaldo Bejasa ang lupang dating aryendo ni Pio Malabanan sa nasabing Ginang Buhat sa
ika-30 ng Disyembre 1984 hanggang Ika-30 ng Disyembre 1985. Ako ay tumanggap sa kanya ng
pitong libong piso at ito ay daragdagan pa niya ng walong libong piso (P8,000) dito sa katapusan
ng buwan ng Disyembre 1984.
(signed)

Reynaldo Bejasa

(signed)

Victoria Dinglasan

"Witness

"(unintelligible)

"(unintelligible)"

During the first week of December 1984, the Bejasas paid Victoria P7,000.00 as agreed. The
balance of P8,000.00 was not fully paid. Only the amount of P4,000.00 was paid on January 11,
1985.[15]

After the aryenduhan expired, despite Victorias demand to vacate the land, the Bejasas
continued to stay on the land and did not give any consideration for its use, be it in the form of
rent or a shared harvest.[16]

On April 7, 1987, Candelaria and the Dinglasans again entered into a three-year lease agreement
over the land.[17] The special power of attorney in favor of Jaime was also renewed by
Candelaria on the same date.[18]

On April 30, 1987, Jaime filed a complaint before the Commission on the Settlement of Land
Problems ("COSLAP"), Calapan, Oriental Mindoro seeking ejectment of the Bejasas.

On May 26, 1987, COSLAP dismissed the complaint.

Sometime in June 1987, Jaime filed a complaint with the Regional Trial Court, Calapan Oriental,
Mindoro[19] against the Bejasas for "Recovery of possession with preliminary mandatory injunction
and damages." The case was referred to the Department of Agrarian Reform ("DAR").

On December 28, 1987, the DAR certified that the case was not proper for trial before the civil
courts.[20]

The trial court dismissed Jaimes complaint, including the Bejasas counterclaim for leasehold,
home lot and damages.

On February 15, 1988, the Bejasas filed with the Regional Trial Court of Calapan, Oriental Mindoro
a complaint for "confirmation of leasehold and home lot with recovery of damages."[21] against
Isabel Candelaria and Jaime Dinglasan.[22]

On February 20, 1991, after trial, the trial court ruled in favor of the Bejasas.[23] First, they reasoned
that a tenancy relationship was established.[24] This relationship can be created by and between
a "person who furnishes the landholding as owner, civil law lessee, usufructuary, or legal possessor
and the person who personally cultivates the same."[25] Second, as bona-fide tenant-tillers, the
Bejasas have security of tenure.[26] The lower court ruled:[27]

"ACCORDINGLY, judgment is hereby rendered in favor of the plaintiffs and against the
defendants, as follows:

"(1) Ordering the defendants to maintain plaintiffs in the peaceful possession and cultivation of
the lands in question and to respect plaintiffs security of tenure on the landholdings of Isabel
Candelaria and the home lot presently occupied by them;
"(2) Confirming the leasehold tenancy system between the plaintiffs as the lawful tenant-tillers
and the landholder, Isabel Candelaria, with the same lease rental of P20,000.00 per calendar
year for the use of the lands in question and thereafter, same landholdings be placed under the
operation land transfer pursuant to Republic Act No. 6657;

"(3) Ordering the defendants to pay jointly and severally the plaintiffs the amount of P115,500.00
representing the sale of calamansi which were unlawfully gathered by Jaime Dinglasan and his
men for the period July to December, 1987 and which were supported by receipts and duly
proven, with formal written accounting, plus the sum of P346,500.00 representing the would-be
harvests on citrus, calamansi, rambutan and bananas for the years 1988, 1989 and 1990, with
legal rate of interest thereon from the date of the filing of the instant complaint until fully paid;

"(4) Ordering the defendants to pay plaintiffs jointly and severally the amount of P30,000.00 as
attorneys fee and expenses of litigation; and

"(5) Authorizing the plaintiffs as tenant-farmers to litigate as pauper not only in this Court but up
to the appellate courts in accordance with Section 16 of P. D. No. 946.

"SO ORDERED."

On February 20, 1991, respondents filed their notice of appeal.[28]

On February 9, 1993, the Court of Appeals promulgated a decision reversing the trial courts
ruling.[29] Reasoning: First, not all requisites necessary for a leasehold tenancy relationship were
met.[30] There was no consent given by the landowner. The consent of former civil law lessee,
Malabanan, was not enough to create a tenancy relationship.[31] Second, when Malabanan
engaged the services of the Bejasas, he only constituted them as mere overseers and did not
make them "permanent tenants". Verily, even Malabanan knew that his contract with Candelaria
prohibited sublease.[32] Third, the contract ("aryenduhan") between the Bejasas and Victoria, by
its very terms, expired after one year. The contract did not provide for sharing of harvests, means
of production, personal cultivation and the like.[33] Fourth, sharing of harvest was not proven. The
testimony of Reynaldo Bejasa on this point is self-serving. Fifth, the element of personal cultivation
was not proven. Reynaldo Bejasa himself admitted that he hired laborers to clear and cultivate
the land.[34] The Court of Appeals disposed of the case, thus:[35]

"WHEREFORE, premises considered, the judgment appealed from is hereby REVERSED and SET
ASIDE. The interlocutory order issued on September 5, 1988 is DISSOLVED and the appellees are
hereby ordered to surrender possession of the disputed landholdings to appellant Isabel
Candelaria and pay her the amount of P15,000.00 in annual rents commencing from 1986 plus
attorneys fees and litigation expenses of P35,000.00 and costs.

"SO ORDERED."

Hence, this appeal filed on March 3, 1993.[36]

The issue raised is whether there is a tenancy relationship in favor of the Bejasas.

The elements of a tenancy relationship are:[37]

(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.

After examining the three relevant relationships in this case, we find that there is no tenancy
relationship between the parties.

Malabanan and the Bejasas. True, Malabanan (as Candelarias usufructuary) allowed the Bejasas
to stay on and cultivate the land.

However, even if we assume that he had the authority to give consent to the creation of a
tenancy relation, still, no such relation existed.

There was no proof that they shared the harvests.

Reynaldo Bejasa testified that as consideration for the possession of the land, he agreed to deliver
the landowners share (1/5 of the harvest) to Malabanan.[38] Only Reynaldo Bejasas word was
presented to prove this. Even this is cast into suspicion. At one time Reynaldo categorically stated
that 25% of the harvest went to him, that 25% was for Malabanan and 50% went to the landowner,
Candelaria.[39] Later on he stated that the landowners share was merely one fifth.[40]

In Chico v. Court of Appeals,[41] we faulted private respondents for failing to prove sharing of
harvests since "no receipt, or any other evidence was presented."[42] We added that "Self serving
statements ... are inadequate; proof must be adduced."[43]

Candelaria and the Bejasas. Between them, there is no tenancy relationship. Candelaria as
landowner never gave her consent.

The Bejasas admit that prior to 1984, they had no contact with Candelaria.[44] They
acknowledge that Candelaria could argue that she did not know of Malabanans arrangement
with them.[45] True enough Candelaria disavowed any knowledge that the Bejasas during
Malabanans lease possessed the land.[46] However, the Bejasas claim that this defect was cured
when Candelaria agreed to lease the land to the Bejasas for P20,000.00 per annum, when
Malabanan died in 1983.[47] We do not agree. In a tenancy agreement, consideration should
be in the form of harvest sharing. Even assuming that Candelaria agreed to lease it out to the
Bejasas for P20,000 per year,[48] such agreement did not create a tenancy relationship, but a
mere civil law lease.

Dinglasan and the Bejasas. Even assuming that the Dinglasans had the authority as civil law
lessees of the land to bind it in a tenancy agreement, there is no proof that they did.

Again, there was no agreement as to harvest sharing. The only agreement between them is the
"aryenduhan",[49] which states in no uncertain terms the monetary consideration to be paid, and
the term of the contract.

Not all the elements of tenancy being met, we deny the petition.

WHEREFORE, we AFFIRM the decision of the Court of Appeals of February 9, 1993, in toto.

No costs.

SO ORDERED.

[G.R. No. 122276. November 20, 2001]

RODRIGO ALMUETE and ANA ALMUETE, petitioners, vs. MARCELO ANDRES and THE COURT OF
APPEALS, respondents.

DECISION

YNARES-SANTIAGO, J.:

The subject of this controversy is a parcel of agricultural land identified as Lot 8449 Pls-967, located
at San Vicente, Angadanan, Isabela, measuring approximately 72,587 square meters. Way back
on March 25, 1957, this parcel was awarded by the then National Resettlement and Rehabilitation
Administration (NARRA) to petitioner Rodrigo Almuete. Since then, Rodrigo Almuete exercised
exclusive possession of the property, cultivating it and planting thereon narra, fruit trees, rice, corn
and legumes. For some twenty-two (22) years, Rodrigo Almuete and his family farmed the subject
property peacefully and exclusively.

However, unknown to Rodrigo Almuete, on August 17, 1979, an Agrarian Reform Technologist by
the name of Leticia Gragasin filed a field investigation and inspection report stating, among
others, that the whereabouts of the original awardee of the subject property, Rodrigo Almuete,
was unknown and that he had waived all his rights as a NARRA settler due to his poor health
beyond his control and financial hardship. Gragasin also stated therein that the actual occupant
of the land is Marcelo Andres since April 1967 to date. She recommended to the Director of the
Ministry of Agrarian Reform (MAR) in Tuguegarao, Cagayan that the award in favor of Rodrigo
Almuete be cancelled and that the land be awarded to respondent Marcelo Andres.
Consequently, Marcelo Andres was allowed to file his homestead application. To further support
his application, Marcelo Andres represented to the MAR (now DAR) officials that sometime in
1965, Rodrigo Almuete sold the subject property to one Victor Masiglat, who gave the former a
radiophono set as consideration therefor. Since Victor Masiglat was disqualified from acquiring
the subject property owing to his also being a NARRA awardee, he transferred the said property
to Marcelo Andres in exchange for one (1) carabao and the sum of Six Hundred Pesos (P600.00).
These successive transfers were not covered by written contracts between the parties.

On the strength of the MAR Regional Directors recommendation and Marcelo Andres
representations, the latter was granted and issued a homestead patent.

In the meantime, unaware that the NARRA award in his favor had been cancelled and that a
homestead patent had been issued to Marcelo Andres, Rodrigo Almuete and his family,
particularly his daughter Ana Almuete, continued to cultivate and farm the subject property. In
1982, Rodrigo Almuete built a house in Barangay Fortune, Alicia, Isabela, where he resided while
working as a driver for a rice mill. From time to time, he would visit the farm to deliver supplies and
pay wages to the laborers who worked therein.

In 1988, the DAR Regional Director recommended the transfer of ownership over the subject
property to Marcelo Andres. On July 7, 1988, the DAR issued Original Certificate of Title (OCT) No.
P-52521 in the name of Marcelo Andres, which certificate was registered in the Registry of Deeds
of Isabela on January 26, 1989.

Shortly thereafter, Marcelo Andres, accompanied by ten (10) other persons armed with bolos
and other bladed implements, entered the subject property, claiming exclusive right of ownership
and possession. They felled the narra trees, converting the same to lumber, and destroyed the
mongos planted by the Almuetes. Marcelo Andres gained control, and took possession, of
approximately half of the subject property.

Rodrigo Almuete wasted no time in complaining to the DAR authorities of Marcelo Andres
encroachment into and occupation of the subject property. It was only then that he learned that
the subject property had been titled in the name of Marcelo Andres and that the award in his
favor had been cancelled because he had allegedly abandoned the subject property. Upon
Rodrigo Almuetes inquiry, the records of the local office of the Department of Environment and
Natural Resources (DENR) showed that he was still the listed owner of the subject property.

Consequently, Rodrigo Almuete and his daughter, Ana Almuete, filed an action for
reconveyance and recovery of possession against Marcelo Andres with the Regional Trial Court
of Cauayan, Isabela, Branch 20, docketed as Civil Case No. Br-20-530.

On November 26, 1993, the trial court rendered judgment as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant
Marcelo Andres:

(1) declaring plaintiff Rodrigo Almuete owner of the land in question, now covered by Original
Certificate of Title No. P-52521 in the name of the defendant Marcelo Andres;

(2) ordering the defendant Marcelo Andres and/or his representatives to vacate the land in
question and deliver the peaceful possession thereof to the plaintiffs;

(3) ordering the defendant Marcelo Andres to reconvey at his expense, the title, OCT No. P-52521,
to the plaintiff Rodrigo Almuete; and

(4) ordering the defendant Marcelo Andres to pay to the plaintiffs P13,000.00 by way of attorneys
fees.

Costs against the defendant.

SO ORDERED.[1]

The trial court found that Marcelo Andres did not acquire any right over the subject property
when he supposedly bought it from Victor Masiglat because the latter never acquired ownership
from the original owner, Rodrigo Almuete. Besides, defendant Marcelo Andres could not present
any valid document to prove his acquisition of the said property. It also found that Rodrigo
Almuete did not abandon the subject property. Rather, Leticia Gragasin of the MAR made
obviously false assertions in her report, knowingly misleading the Regional Director into cancelling
the name of Rodrigo Almuete as an awardee and issuing the homestead patent in the name of
Marcelo Andres. Hence, the cancellation of Rodrigo Almuetes award and the issuance of the
homestead patent in favor of Marcelo Andres were perpetrated through fraud.

Marcelo Andres failed to appeal; thus, the trial courts decision became final and executory. On
February 15, 1994, a writ of execution was issued. Marcelo Andres filed a motion to quash the writ
of execution, but the trial court did not act on it on the ground that it had no more jurisdiction
over the case.[2]

Marcelo Andres filed a petition for certiorari before the Court of Appeals, stating at the outset
that his counsel had failed to file a timely motion for reconsideration of the decision or an appeal
due to sheer ignorance of the law.[3] In his petition, Andres assailed the trial courts jurisdiction
over the nature as well as the subject matter of the case. He argued that since the subject
property was agricultural land covered by a homestead patent, exclusive jurisdiction was with
the Department of Agrarian Reform Adjudication Board (or DARAB), not with the regular courts.
Respondent Andres also stressed that the original action was for ejectment, which was
cognizable by the municipal trial courts, not by the Regional Trial Courts. Consequently, for want
of jurisdiction, the trial courts decision was null and void; and cannot be enforced by writ of
execution or any other legal means.

On August 9, 1995, the Court of Appeals rendered the impugned Decision, disposing as follows:

WHEREFORE, finding the petition meritorious, the writ of certiorari prayed for is GRANTED.
Judgment is rendered DISMISSING Civil Case No. Br. 20-530 of the Regional Trial Court, Branch 20,
Cauayan, Isabela and declaring the decision rendered therein, the order granting the motion for
execution and the writ of execution issued NULL and VOID. In the event the writ of execution has
been carried out, respondent Court is ordered to restore petitioner in possession of the land, to
cancel whatever new title may have been issued to private respondents, to reinstate petitioners
OCT P-52521, and the restitution of whatever sums collected from petitioner as expenses of
reconveyance or attorneys fees. Respondent Court is ordered to restore the status quo before
the complaint, the decision and the writ of execution.

SO ORDERED.[4]

Petitioners moved for the reconsideration of the decision. On October 6, 1995, the Court of
Appeals issued the assailed Resolution,[5] denying the motion for reconsideration.

Hence, the instant petition for review, ascribing to the Court of Appeals grave abuse of discretion
amounting to lack or excess of jurisdiction when:

I. it gave due course to the Petition for Certiorari of the respondent Marcelo Andres, dated June
10, 1994, questioning the Decision of the Regional Trial Court, Branch 20, Cauayan, Isabela, dated
November 26, 1993, clearly seven (7) months after the decision of the Regional Trial Court;

II. it did not consider and give weight to the contention of petitioners that this case is not as
Agrarian Dispute, hence, it does not fall within the exclusive jurisdiction of the Department of
Agrarian Reform Adjudication Board, but to the Regional Trial Court;

III. it did not consider and give weight to the fact that private respondent Marcelo Andres entered
into the land allocated to the petitioners by the National Resettlement and Rehabilitation
Administration (NARRA), by the use of guns and boloes;

IV. in not awarding, recognizing and honoring the vested interest of the petitioners on that parcel
of land identified as Lot 8449, Pls-967-D (identical with Lot 196, Pls-81 of the NARRA) with an area
of 72,587 square meters, awarded to them by the government thru the NARRA.[6]

The petition is impressed with merit.

The action filed by petitioners before the trial court was for recovery of possession and
reconveyance of title. The issue to be resolved was who between petitioner Rodrigo Almuete
and respondent Marcelo Andres has a better right to the subject property considering that both
of them are awardees of the same property. It was thus a controversy relating to ownership of
the farmland, which is beyond the ambit of the phrase agrarian dispute. No juridical tie of
landowner and tenant was alleged between petitioners and respondent, let alone that which
would so characterize the relationship as an agrarian dispute.[7] In fact, petitioner and
respondent were contending parties for the ownership of the same parcel of land.[8]

Rule II, Section 1 of the Revised Rules of Procedure of the DARAB, provides:

Section 1. Primary, Original and Appellate Jurisdiction. --- The Agrarian Reform Adjudication Board
shall have primary jurisdiction, both original and appellate, to determine and adjudicate all
agrarian disputes, cases, controversies, and matters or incidents involving the implementation of
the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Order Nos.
229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, P.D. No. 27
and other agrarian laws and their implementing rules and regulations.

Agrarian dispute is defined under Section 3(d) of Republic Act No. 6657, as:

(d) Agrarian Dispute refers to 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.

From the foregoing, it is clear that the jurisdiction of the DARAB is limited to cases involving a
tenancy relationship between the parties. The following elements are indispensable to establish
a tenancy relationship:

(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 the landowner and the tenant or agricultural lessee.[9]

The Court of Appeals, therefore, gravely erred when it granted the petition for certiorari and held
that the trial court had no jurisdiction over the subject matter of the action between petitioners
and respondent. The action filed by petitioners was cognizable by the regular courts.
Consequently, the Regional Trial Court of Cauayan, Isabela was competent to try and decide
Civil Case No. 20-530. Its decision was, thus, valid and can no longer be disturbed, after having
attained finality. Nothing more can be done with the decision except to enforce it.

Respondents contention that the action below was an ejectment suit is untenable. Basic is the
rule that in actions for ejectment, the only issue is possession. This is not true as regards the case
below, which principally involved the question of ownership, or more accurately, the validity of
the homestead patent awarded to petitioner vis--vis that awarded to respondent.

It is true that the caption of the Amended Complaint includes ejectment in the description of the
nature of the suit. However, it is not the caption of the pleading but the allegations therein that
determine the nature of the action.[10] A close perusal of the Amended Complaint filed before
the court a quo indubitably shows that petitioners, as plaintiffs therein, prayed for the cancellation
of the certificate of title in the name of Marcelo Andres, and that they be declared the absolute
owners of the land in dispute.[11]

On a final procedural note, the Court of Appeals erred in giving due course to the special civil
action for certiorari. A basic requisite for such action to lie is that there is no appeal, nor any plain,
speedy and adequate remedy in the ordinary course of law. Certiorari is a remedy of last recourse
and is a limited form of review. Its principal function is to keep inferior tribunals within their
jurisdiction. Certiorari cannot be used as a substitute for the lost remedy of appeal. Respondent
lost that remedy by his failure to appeal.[12]

WHEREFORE, in view of all the foregoing, the instant petition for review is GRANTED. The assailed
Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 34314 are REVERSED and SET
ASIDE.

SO ORDERED.

SECOND DIVISION

[G.R. No. 105586. December 15, 1993.]

REMIGIO ISIDRO, Petitioner, v. THE HON. COURT OF APPEALS (SEVENTH DIVISION) and NATIVIDAD
GUTIERREZ, Respondents.

Joventino A. Cornista for Petitioner.

Yolanda Quisumbing-Javellana & Associates for Private Respondent.

SYLLABUS

1. REMEDIAL LAW; JURISDICTION; JURISDICTION OVER SUBJECT MATTER OF ACTION; DETERMINED

FROM ALLEGATIONS OF COMPLAINT; NOT DEPENDENT UPON DEFENSES RAISED IN THE ANSWER OR
MOTION TO DISMISS. — It is basic that whether or not a court has jurisdiction over the subject
matter of an action is determined from the allegations of the complaint. As held in Multinational
Village Homeowners’ Association, Inc., v. Court of Appeals, Et. Al.: (203 SCRA 104 [1991]):
"Jurisdiction over the subject-matter is determined upon the allegations made in the complaint,
irrespective of whether the plaintiff is entitled or not entitled to recover upon the claim asserted
therein — a matter resolved only after and as a result of the trial. Neither can the jurisdiction of
the court be made to depend upon the defenses made by the defendant in his answer or motion
to dismiss. If such were the rule, the question of jurisdiction would depend almost entirely upon
the defendant.." . . It is well settled jurisprudence that a court does not lose its jurisdiction over an
unlawful detainer case by the simple expedient of a party raising as a defense therein the alleged
existence of a tenancy relationship between the parties. The court continues to have the
authority to hear the evidence for the purpose precisely of determining whether or not it has
jurisdiction. And upon such hearing, if tenancy is shown to be the real issue, the court should
dismiss the case for lack of jurisdiction.

2. LABOR LAWS AND SOCIAL LEGISLATION; COMPREHENSIVE AGRARIAN REFORM PROGRAM (R.A.
NO. 6657); AGRARIAN DISPUTE; DEFINED. — An agrarian dispute refers to 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 Republic Act No. 6657 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 . . . But a case involving an agricultural land does not automatically
make such case an agrarian dispute upon which the DARAB has jurisdiction. The mere fact that
the land is agricultural does not ipso facto make the possessor an agricultural lessee or tenant.
The law provides for conditions or requisites before he can qualify as one and the land being
agricultural is only one of them. The law states that an agrarian dispute must be a controversy
relating to a tenurial arrangement over lands devoted to agriculture. And as previously
mentioned, such arrangement may be leasehold, tenancy or stewardship.

3. ID.; ID.; AGRICULTURAL LAND; DEFINED; AGRICULTURAL ACTIVITY; DEFINED. — It is settled that a
fishpond is an agricultural land. An agricultural land refers to land devoted to agricultural activity
as defined in Republic Act No. 6657 and not classified as mineral, forest, residential, commercial
or industrial land. Republic Act No. 6657 defines agricultural activity as the cultivation of the soil,
planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting
of such farm products, and other farm activities, and practices performed by a farmer in
conjunction with such farming operations done by persons whether natural or juridical.

4. ID.; TENANCY RELATIONSHIP; REQUISITES. — Tenancy is not a purely factual relationship

dependent on what the alleged tenant does upon the land. It is also a legal relationship. The
intent of the parties, the understanding when the farmer is installed, and their written agreements,
provided these are complied with and are not contrary to law, are even more important. The
essential requisites of a tenancy relationship are: (1) the parties are the landowner and the tenant:
(2) the subject matter is agricultural land; (3) there is consent; (4) the purpose is agricultural
production; (5) there is personal cultivation by the tenant; and (6) there is a sharing of harvests
between the parties. All these requisites must concur in order to create a tenancy relationship
between the parties. The absence of one does not make an occupant of a parcel of land, or a
cultivator thereof, or a planter thereon, a de jure tenant. Unless a person establishes his status as
a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform
Program of the government under existing tenancy laws (Caballes v. DAR, Et Al., G.R. No. 78214,
December 5, 1988).

5. ID.; REPUBLIC ACT NO. 3844; AGRICULTURAL LESSEE; DEFINED; AGRICULTURAL LESSOR; DEFINED;
CASE AT BAR. — An agricultural lessee as defined in Sec. 116(2) of Republic Act No. 3844, is a
person who, by himself and with the aid available from within his immediate farm household,
cultivates the land belonging to, or possessed by, another with the latter’s consent for purposes
of production, for a price certain in money or in produce or both. An agricultural lessor, on the
other hand, is a natural or juridical person who, either as owner, civil law lessee, usufructuary, or
legal possessor lets or grants to another the cultivation and use of his land for a price certain.
Based on the statutory definitions of a tenant or a lessee, it is clear that there is no tenancy or
agricultural/leasehold relationship existing between the petitioner and the private Respondent.
There was no contract or agreement entered into by the petitioner with the private respondent
nor with the overseer of the private respondent, for petitioner to cultivate the land for a price
certain or to share his harvests. Petitioner has failed to substantiate his claim that he was paying
rent for the use of the land.

6. ID.; DOCTRINE ENUNCIATED IN BERNAS VS. THE HONORABLE COURT OF APPEALS, G.R. NO. 85041,
5 AUGUST 1993, NOT APPLICABLE TO CASE AT BAR. — The present case should be distinguished
from the recent case of Bernas v. The Honorable Court of Appeals. (G.R. No. 85041, 5 August
1993) In the Bernas case, the land occupant (Bernas) had a production-sharing agreement with
the legal possessor (Benigno Bito-on) while the records in this case fail to show that herein
petitioner (Isidro) was sharing the harvest or paying rent for his use of the land. Moreover, the
agreement between the overseer (Garcia) and herein petitioner was for petitioner to occupy
and use the land by mere tolerance of the owner. Petitioner Isidro failed to refute that Garcia
allowed him to use the land subject to the condition that petitioner would vacate it upon
demand. In the Bernas case, the petitioner (Bernas) was able to establish the existence of an
agricultural tenancy or leasehold relationship between him and the legal possessor. The evidence
in this case, on the other hand, fails to prove that petitioner Isidro, was an agricultural tenant or
lessee.

DECISION

PADILLA, J.:

This is a petition for review on certiorari of the decision * of the respondent Court of Appeals dated
27 February 1992 in CA-G.R. SP No. 26671 ordering petitioner to vacate the land in question and
surrender possession thereof to the private respondent; and its 21 May 1992 resolution denying
petitioner’s motion for reconsideration for lack of merit.

The facts which gave rise to this petition are as follows:chanrob1es virtual 1aw library

Private respondent Natividad Gutierrez is the owner of a parcel of land with an area of 4.5
hectares located in Barrio Sta. Cruz, Gapan, Nueva Ecija. In 1985, Aniceta Garcia, sister of private
respondent and also the overseer of the latter, allowed petitioner Remigio Isidro to occupy the
swampy portion of the abovementioned land, consisting of one (1) hectare, in order to augment
his (petitioner’s) income to meet his family’s needs. The occupancy of a portion of said land was
subject to the condition that petitioner would vacate the land upon demand. Petitioner
occupied the land without paying any rental and converted the same into a
fishpond.chanrobles law library

In 1990, private respondent through her overseer demanded from petitioner the return of the
land, but the latter refused to vacate and return possession of said land, claiming that he had
spent effort and invested capital in converting the same into a fishpond.

A complaint for unlawful detainer was filed by private respondent against petitioner before the
Municipal Trial Court (MTC) of Gapan, Nueva Ecija which was docketed as Civil Case No. 4120.
Petitioner set up the following defenses: (a) that the complaint was triggered by his refusal to
increase his lease rental; (b) the subject land is a fishpond and therefore is agricultural land; and
(c) that lack of formal demand to vacate exposes the complaint to dismissal for insufficiency of
cause of action. 1

Based on an ocular inspection of the subject land, the trial court found that the land in question
is a fishpond 2 and, thus, in a decision dated 30 May 1991, the said trial court dismissed the
complaint, ruling that the land is agricultural and therefore the dispute over it is agrarian which is
under the original and exclusive jurisdiction of the courts of agrarian relations as provided in Sec.
12(a) of Republic Act No. 946 (now embodied in the Revised Rules of Procedure of the
Department of Agrarian Reform Adjudication Board). 3

An appeal was filed by private respondent before the Regional Trial Court (RTC) of Gapan, Nueva
Ecija, docketed as Civil Case No. 889. In due course, the RTC rendered a decision on 5 November
1991 concurring with the findings of the MTC and affirming in toto the trial court’s
decision.chanrobles law library

The RTC decision held that:jgc:chanrobles.com.ph

"Even conceding for the sake of argument that the defendant-appellee was allowed by the
plaintiff-appellant, through her sister Aniceta Garcia (her administratrix over the land in question)
to occupy and use the landholding in question on condition that the defendant would vacate
the same upon demand of the owner or plaintiff herein, without paying any rental either in cash
or produce, under these facts there was a tenurial arrangement within the meaning of Sec. 3(d)
of RA 6657, thereby placing the dispute involved in this case within the jurisdiction of the DARAB.
Perhaps, it would be different if the defendant was merely a trespasser, without any right
whatsoever, when he entered and occupied the subject landholding. The defendant, as a
matter of fact, was a legal possessor of the land in question and therefore to determine his rights
and obligations over the said property, the DARAB is the proper forum for such issue." 4

Not satisfied with the decision of the RTC, private respondent appealed to the respondent Court
of Appeals and the appeal was docketed as CA-G.R. SP No. 26671. On 27 February 1992, as
earlier stated, the respondent Court of Appeals reversed and set aside the decision of the RTC,
ordering petitioner to vacate the parcel of land in question and surrender possession thereof to
private respondent, and to pay private respondent the sum of P5,000.00 as and for attorney’s
fees and expenses of litigation. 5

The respondent Court of Appeals ruled that:jgc:chanrobles.com.ph

"The agrarian dispute over which the DAR may have jurisdiction by virtue of its quasi-judicial power
is that which involves tenurial arrangements, whether leasehold, tenancy, stewardship or
otherwise, over lands devoted to agriculture. Tenurial arrangement is concerned with the act or
manner of putting into proper order the rights of holding a piece of agricultural land between
the landowner and the farmer of farmworker.cralawnad

"In the case at bar, there can be no dispute that between the parties herein there is no tenurial
arrangement, whether leasehold, tenancy, stewardship or otherwise, over the land in dispute.
Other than his bare allegation in the Answer with Counterclaim, and his affidavit, private
respondent has not shown prima facie that he is a tenant of the petitioner. The affidavits of his
witnesses Antonio Samin and Daniel Villareal attest to the fact that they acted as mediators in
the dispute between the parties herein sometime in October 1990, but no settlement was arrived
at, and that the subject land is a fishpond. To the same effect is the affidavit of Feliciano Garcia.
Absent any prima facie proof that private respondent has a tenancy relationship with petitioner,
the established fact is that private respondent is possessing the property in dispute by mere
tolerance, and when such possession ceased as such upon demand to vacate by the petitioner,
private respondent became a squatter in said land. We hold that the Municipal Trial Court of
Gapan, Nueva Ecija has jurisdiction over the unlawful detainer case." 6

Petitioner moved for reconsideration of the foregoing decision but, also as earlier stated, it was
denied in a resolution dated 21 May 1992 7 for lack of merit.

Hence, this petition for review under Rule 45 of the Rules of Court.

Petitioner raises the following issue:jgc:chanrobles.com.ph

"WHETHER OR NOT THE MUNICIPAL COURT HAS THE JURISDICTION IN THIS CASE AND WHETHER THE
PUBLIC RESPONDENT COULD LEGALLY EJECT THE PETITIONER CONSIDERING THE
FOLLOWING:chanrob1es virtual 1aw library

1. THAT THE SUBJECT IS A FISHPOND AND UNDER THE LAW AND JURISPRUDENCE FISHPONDS ARE
CLASSIFIED AS AGRICULTURAL LANDS;

2. THAT BEING AN AGRICULTURAL LAND THE SAME IS GOVERNED BY OUR TENANCY LAWS WHERE
RULE 70 OF THE RULES OF COURT CANNOT BE SIMPLY APPLIED; AND

3. THAT UNDER THE RULES OF THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD,
THE DETERMINATION OF WHETHER A PERSON WORKING ON A FISHPOND IS A TENANT OR NOT IS
CLEARLY WITHIN THE EXCLUSIVE JURISDICTION OF THE DARAB." 8

The petition is devoid of merit. We hold for the private Respondent.

It is basic that whether or not a court has jurisdiction over the subject matter of an action is
determined from the allegations of the complaint. As held in Multinational Village Homeowners’
Association, Inc., v. Court of Appeals, Et. Al.: 9chanrobles.com : virtual law library

"Jurisdiction over the subject-matter is determined upon the allegations made in the complaint,
irrespective of whether the plaintiff is entitled or not entitled to recover upon the claim asserted
therein — a matter resolved only after and as a result of the trial. Neither can the jurisdiction of
the court be made to depend upon the defenses made by the defendant in his answer or motion
to dismiss. If such were the rule, the question of jurisdiction would depend almost entirely upon
the defendant."cralaw virtua1aw library

In her complaint before the court a quo, private respondent stated that she is the owner of a
parcel of land situated in Barrio Sta Cruz, Gapan, Nueva Ecija, which petitioner is illegally
occupying; that petitioner has taken advantage of the tolerance of her (private respondent’s)
sister in allowing him to occupy the land on the condition that he (petitioner) would vacate the
land upon demand. Because of petitioner’s refusal to vacate the land, private respondent’s
remedy, as owner of said land, was to file an action for unlawful detainer with the Municipal Trial
Court.

In his answer to the complaint, petitioner alleged that the land involved in the dispute is an
agricultural land and hence, the case must be filed with the Court of Agrarian Relations (not the
MTC). Moreover, petitioner contended that it was his refusal to increase his lease rental (implying
tenancy) that prompted the private respondent to sue him in court. 10
It is well settled jurisprudence that a court does not lose its jurisdiction over an unlawful detainer
case by the simple expedient of a party raising as a defense therein the alleged existence of a
tenancy relationship between the parties. 11 The court continues to have the authority to hear
the evidence for the purpose precisely of determining whether or not it has jurisdiction. And upon
such hearing, if tenancy is shown to be the real issue, the court should dismiss the case for lack of
jurisdiction. 12chanrobles law library

The MTC dismissed the unlawful detainer complaint primarily on the ground that the subject land
is agricultural and therefore the question at issue is agrarian. In this connection, it is well to recall
that Section 1, Rule II of the Revised Rules of Procedure, 13 provides that the Agrarian Reform
Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the
implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657,
Executive Order Nos. 229, 228 and 129-A, Republic Act No. 3844 as amended by Republic Act
No. 6389, Presidential Decree No. 27 and other agrarian laws and their implementing rules and
regulations.

An agrarian dispute refers to 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 Republic Act No.
6657 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.
14chanrobles.com:cralaw:red

It is irrefutable in the case at bar that the subject land which used to be an idle, swampy land
was converted by the petitioner into a fishpond. And it is settled that a fishpond is an agricultural
land. An agricultural land refers to land devoted to agricultural activity as defined in Republic
Act No. 6657 15 and not classified as mineral, forest, residential, commercial or industrial land. 16
Republic Act No. 6657 defines agricultural activity as the cultivation of the soil, planting of crops,
growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm
products, and other farm activities, and practices performed by a farmer in conjunction with such
farming operations done by persons whether natural or juridical. 17

But a case involving an agricultural land does not automatically make such case an agrarian
dispute upon which the DARAB has jurisdiction. The mere fact that the land is agricultural does
not ipso facto make the possessor an agricultural lessee or tenant. The law provides for conditions
or requisites before he can qualify as one and the land being agricultural is only one of them. 18
The law states that an agrarian dispute must be a controversy relating to a tenurial arrangement
over lands devoted to agriculture. And as previously mentioned, such arrangement may be
leasehold, tenancy or stewardship.

Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon
the land. It is also a legal relationship. The intent of the parties, the understanding when the farmer
is installed, and their written agreements, provided these are complied with and are not contrary
to law, are even more important. 19

The essential requisites of a tenancy relationship are: (1) the parties are the landowner and the
tenant: (2) the subject matter is agricultural land; (3) there is consent; (4) the purpose is agricultural
production; (5) there is personal cultivation by the tenant; and (6) there is a sharing of harvests
between the parties. All these requisites must concur in order to create a tenancy relationship
between the parties. The absence of one does not make an occupant of a parcel of land, or a
cultivator thereof, or a planter thereon, a de jure tenant. Unless a person establishes his status as
a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform
Program of the government under existing tenancy laws (Caballes v. DAR, Et Al., G.R. No. 78214,
December 5, 1988). 20chanrobles lawlibrary : rednad

Furthermore, an agricultural lessee as defined in Sec. 116(2) of Republic Act No. 3844, is a person
who, by himself and with the aid available from within his immediate farm household, cultivates
the land belonging to, or possessed by, another with the latter’s consent for purposes of
production, for a price certain in money or in produce or both. An agricultural lessor, on the other
hand, is a natural or juridical person who, either as owner, civil law lessee, usufructuary, or legal
possessor lets or grants to another the cultivation and use of his land for a price certain. 21

Based on the statutory definitions of a tenant or a lessee, it is clear that there is no tenancy or
agricultural/leasehold relationship existing between the petitioner and the private Respondent.
There was no contract or agreement entered into by the petitioner with the private respondent
nor with the overseer of the private respondent, for petitioner to cultivate the land for a price
certain or to share his harvests. Petitioner has failed to substantiate his claim that he was paying
rent for the use of the land.

Whether or not private respondent knew of the conversion by petitioner of the idle, swampy land
into a fishpond is immaterial in this case. The fact remains that the existence of all the requisites
of a tenancy relationship was not proven by the petitioner. And in the absence of a tenancy
relationship, the complaint for unlawful detainer is properly within the jurisdiction of the Municipal
Trial Court, as provided in Sec. 33 of Batas Pambansa Blg. 129.

Having established that the occupancy and possession by petitioner of the land in question is by
mere tolerance, private respondent had the legal right to demand upon petitioner to vacate the
land. And as correctly ruled by the respondent appellate court:chanrobles.com : virtual law
library

". . . His (petitioner’s) lawful possession became illegal when the petitioner (now private
respondent) through her sister made a demand on him to vacate and he refused to comply with
such demand. Such is the ruling in Pangilinan v. Aguilar, 43 SCRA 136, 144, wherein it was
held:chanrob1es virtual 1aw library

‘While possession by tolerance is lawful, such possession becomes illegal upon demand to vacate
is made by the owner and the possessor by tolerance refuses to comply with such demand (Prieto
v. Reyes, 14 SCRA 432; Yu v. De Lara, 6 SCRA 786, 788; Amis v. Aragon, L-4684, April 28, 1957). A
person who occupies the land of another at the latter’s tolerance or permission, without any
contract between them, is necessarily bound by an implied promise that he will vacate upon
demand, failing which a summary action for ejectment is the proper remedy against him (Yu v.
De Lara, supra).’" 22

The present case should be distinguished from the recent case of Bernas v. The Honorable Court
of Appeals. 23 In the Bernas case, the land occupant (Bernas) had a production-sharing
agreement with the legal possessor (Benigno Bito-on) while the records in this case fail to show
that herein petitioner (Isidro) was sharing the harvest or paying rent for his use of the land.
Moreover, the agreement between the overseer (Garcia) and herein petitioner was for petitioner
to occupy and use the land by mere tolerance of the owner. Petitioner Isidro failed to refute that
Garcia allowed him to use the land subject to the condition that petitioner would vacate it upon
demand. In the Bernas case, the petitioner (Bernas) was able to establish the existence of an
agricultural tenancy or leasehold relationship between him and the legal possessor. The evidence
in this case, on the other hand, fails to prove that petitioner Isidro, was an agricultural tenant or
lessee.

WHEREFORE, the petition is DENIED. The questioned decision and resolution of the Court of
Appeals are hereby AFFIRMED. Costs against the petitioner.SO ORDERED.
FIRST DIVISION

[G.R. No. 103103. June 17, 1996.]

ENRIQUE P. SUPLICO, LOLITA T. SUPLICO, ENRIQUE T. SUPLICO, JR. and DAVID T. SUPLICO, Petitioners,
v. HON. COURT OF APPEALS and FEDERICO ARMADA, Respondents.

DECISION
VITUG, J.:

For review in the instant petition is the 29th November 1991 decision 1 of the Court of Appeals
affirming that of the Regional Trial Court of Negros Occidental, Branch 54, 2 Bacolod City, in CAR
Case No. 109, which has declared private respondent Federico Armada to be a bona fide
agricultural lessee, instead of a mere farm laborer, of Isabel D. Tupas in Barangay Taloc, Bago
City.

Isabel Tupas was the registered owner of a parcel of rice land, designated Lot No. 901-B-1, with
an area of 120,000 square meters (12 hectares), in Taloc, Bago City, under TCT No. T-26014. 3 On
24 February 1977, she leased her landholding, excluding the 33,438-square-meter portion already
tenanted by one Jose Jacinto, for the amount of P10,000.00 to petitioner Enrique P. Suplico, her
brother-in-law, under a contract that was set to expire on 31 May 1982. 4

Some time in 1979, Armada started tilling an area of 32,945 square meters, identified to be Lot
No. 901-B-1-D, 5 of the farmland under an agreement with Enrique Suplico. Armada undertook to
till the land while Suplico agreed to provide the farm implements and work animals. Suplico was
to receive from Armada 62 cavans from the palay harvest per crop yield by way of rental for the
use not only of the land but also of the work animals and a hand tractor. 6 Private respondent
resided with his family in a farmhouse on the land.

When, years later, Suplico threatened to eject Armada from the property, Armada initiated, on
03 May 1982, an action for damages and injunction against Suplico in the Court of Agrarian
Relations ("CAR") in Bacolod City. 7 The complaint averred that Armada was the tenant-farmer
of around 2.5 hectares of the property of Isabel Tupas having been instituted as such tenant in
1979 by her administrator, herein petitioner Enrique Suplico, to whom he religiously paid the fixed
rental of 62 cavans of palay per crop yield.

An order was issued by the CAR meanwhile restraining Suplico, his agents and representatives,
from harassing, molesting, threatening, and committing acts of dispossession against, Armada.

In his answer with counterclaim, Suplico interposed the special defense that Armada was not a
tenant-farmer but a seasonal hired farm laborer with a fixed compensation, and that his services
could be terminated anytime before or, at the worst case, upon the expiration of their contract
in May 1982. Suplico added that Armada unlawfully appropriated for himself the whole produce
of the first yield for the crop year 1982-83.

On 14 February 1983, Isabel Tupas, represented by her attorney-in- fact Lolita T. Suplico (sister of
Isabel and the wife of Enrique P. Suplico), intervened in the case. She alleged that she had no
contractual relationship with Armada nor did she impliedly tolerate his continued possession of
the land. She prayed that Armada be ejected from her landholding. 10 On even date, Isabel
Tupas filed a complaint for ejectment against Armada and his wife, Leticia, in the Municipal Trial
Court ("MTC") of Bago City. 11 The complaint, however, was dismissed on 15 May 1985 for lack of
jurisdiction, 12 following the certification issued by the Regional Director of the then Ministry of
Agrarian Reform, Region VI, Iloilo City, that the case was not proper for trial and hearing by the
MTC on account of the existence of tenancy over the land involved.

On 28 June 1984, the complaint for damages and injunction was referred by the trial court 13 to
the Ministry of Agrarian Reform ("MAR") for a summary determination of the relationship of the
parties, as well as for a certification on whether or not the case was proper for trial, in accordance
with Memorandum Circular No. 29 of the MAR, implementing P.D. No. 316 14 in conjunction with
P.D. No. 27. 15 The trial of the case resumed after the MAR Director for Region 6, Iloilo City, had
certified that the case was proper for trial and hearing. 16

On 28 March 1987, Isabel Tupas donated the whole property to her sister, Lolita T. Suplico, and
her nephews, Enrique Suplico, Jr., and David Suplico. On 17 May 1988, she moved to be dropped
as intervenor and asked that her donees of the property be instead named as substitutes.
Finally, on 18 January 1990, the trial court rendered its decision declaring private respondent a
bona fide agricultural lessee. The dispositive portion of the decision
stated:jgc:chanrobles.com.ph

"WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:jgc:chanrobles.com.ph

"1. Declaring plaintiff FEDERICO ARMADA a bona fide agricultural lessee of the landholding in
question with an area of two and a half (2 1/2) hectares more or less belonging to the intervenors;

"2. Permanently enjoining the defendant/intervenors from ejecting or removing plaintiff from his
landholding aforementioned situated in sitio Langka, Brgy. Taloc, Bago City;

"3. Ordering the plaintiffs to pay to the defendant/intervenors two hundred fifty-four (254) cavans
of palay as back rentals or their money equivalent, less whatever amount may have been paid
or deposited with the court after this date; and

"4. Dismissing all other claims and counterclaims for damages for lack of and/or insufficiency of
evidence.

"So Ordered." 17

The contending parties all appealed the decision to the Court of Appeals.

The Court of Appeals, on 29 November 1991, affirmed the decision of the court a quo and
considered Armada to be a share tenant.

The instant petition, in main, raises the sole issue of whether or not private respondent Armada
should be held a tenant farmer entitled to security of tenure or a mere hired farm laborer.

The Court sees no reason to disturb the findings of both courts below. The facts found by the
appellate court, sustaining the court a quo, readily converge towards one conclusion, and it is
that tenancy did exist between the parties.

Firstly, private respondent was in actual possession of the land, 18 and he there resided, with his
family, in a farmhouse just like what a farm tenant normally would. 19 Secondly, private
respondent and his wife were personally doing the farm work of plowing, planting, weeding and
harvesting the area. The occasional and temporary hiring of persons outside of the immediate
household, so long as the tenant himself had control in the farmwork, was not essentially opposed
to the status of tenancy. 20 Thirdly, the management of the farm was left entirely to private
respondent who defrayed the cultivation expenses. 21 Fourthly, private respondent shared the
harvest of the land, depositing or delivering to petitioner Enrique Suplico the agreed 62 cavans
of palay per crop yield. Jesus Mesias, the licensed ricemiller of Taloc, attested to Suplico’s having
received from private respondent the cash value of the rental payments from "the first crop of
1979 and each crop thereafter up to the first crop of 1983, inclusive." 22 The rental payments
made thereafter were received by petitioner Lolita Suplico, 23 court appointed police officers,
24 or the barangay captain.25cralaw:red

Parenthetically, during the pendency of this appeal, the Secretary of Agrarian Reform has issued
an emancipation patent denominated Transfer Certificate of Title No. EP-2064 in the name of
private respondent over 26,622 square meters of Lot No. 901-B-1-C-2-B, Bsd-06-002040, of the
operation land transfer. In a pleading, dated 01 December 1994, 26 petitioners point to anomalies
supposedly attending the issuance of TCT No. EP-2064. Regrettably, these allegations are matters
that should first be ventilated and tried, not here, but in the proper forum.

WHEREFORE, the instant petition for review on certiorari is DENIED. No costs.

SO ORDERED.
[G.R. No. 78517. February 27, 1989.]

GABINO ALITA, JESUS JULIAN, JR., JESUS JULIAN, SR., PEDRO RICALDE, VICENTE RICALDE and
ROLANDO SALAMAR, Petitioners, v. THE HONORABLE COURT OF APPEALS, ENRIQUE M. REYES, PAZ
M. REYES and FE M. REYES, Respondents.

Bureau of Agrarian Legal Assistance, for Petitioners.

Leonardo N . Zulueta for Enrique Reyes, Et. Al.

Adolfo S. Azcuna for Private Respondents.

SYLLABUS

1. AGRARIAN REFORM LAW; PRES. DECREE NO. 27; DOES NOT COVER LANDS OBTAINED THROUGH
A HOMESTEAD PATENT. — The pivotal issue is whether or not lands obtained through homestead
patent are covered by the Agrarian Reform under P.D. 27. The question certainly calls for a
negative answer. We agree with the petitioners in saying that P.D. 27 decreeing the
emancipation of tenants from the bondage of the soil and transferring to them ownership of the
land they till is a sweeping social legislation, a remedial measure promulgated pursuant to the
social justice precepts of the Constitution. However, such contention cannot be invoked to
defeat the very purpose of the enactment of the Public Land Act or Commonwealth Act No.
141. Thus, "The Homestead Act has been enacted for the welfare and protection of the poor. The
law gives a needy citizen a piece of land where he may build a modest house for himself and
family and plant what is necessary for subsistence and for the satisfaction of life’s other needs.
The right of the citizens to their homes and to the things necessary for their subsistence is as vital
as the right to life itself. They have a right to live with a certain degree of comfort as become
human beings, and the State which looks after the welfare of the people’s happiness is under a
duty to safeguard the satisfaction of this vital right." (Patricio v. Bayog, 112 SCRA 45)

2. COMPREHENSIVE AGRARIAN REFORM LAW OF 1988 (RA NO. 6657); MAINTAINS THE
INAPPLICABILITY OF P.D. 27 OVER HOMESTEAD GRANTEES. — It is worthy of note that the newly
promulgated Comprehensive Agrarian Reform Law of 1988 or Republic Act No. 6657 likewise
contains a proviso supporting the inapplicability of P.D. 27 to lands covered by homestead
patents like those of the property in question, reading, "Section 6. Retention Limits . . .." . . Provided
further, That original homestead grantees or their 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."

DECISION

PARAS, J.:

Before Us is a petition seeking the reversal of the decision rendered by the respondent Court of
Appeals ** on March 3, 1987 affirming the judgment of the court a quo dated April 29, 1986, the
dispositive portion of the trial court’s decision reading as follows;

"WHEREFORE, the decision rendered by this Court on November 5, 1982 is hereby reconsidered
and a new judgment is hereby rendered:jgc:chanrobles.com.ph

"1. Declaring that Presidential Decree No. 27 is inapplicable to lands obtained thru the homestead
law;

"2. Declaring that the four registered co-owners will cultivate and operate the farmholding
themselves as owners thereof; and

"3. Ejecting from the land the so-called tenants, namely; Gabino Alita, Jesus Julian, Sr., Jesus
Julian, Jr., Pedro Ricalde, Vicente Ricalde and Rolando Salamar, as the owners would want to
cultivate the farmholding themselves.

"No pronouncement as to costs.

SO ORDERED." (p. 31, Rollo)

The facts are undisputed. The subject matter of the case consists of two (2) parcels of land,
acquired by private respondents’ predecessors-in-interest through homestead patent under the
provisions of Commonwealth Act No. 141. Said lands are situated at Guilinan, Tungawan,
Zamboanga del Sur.
Private respondents herein are desirous of personally cultivating these lands, but petitioners refuse
to vacate, relying on the provisions of P.D. 27 and P.D. 316 and appurtenant regulations issued
by the then Ministry of Agrarian Reform (MAR for short), now Department of Agrarian Reform (DAR
for short).

On June 18, 1981, private respondents (then plaintiffs), instituted a complaint against Hon.
Conrado Estrella as then Minister of Agrarian Reform, P.D. Macarambon as Regional Director of
MAR Region IX, and herein petitioners (then defendants) for the declaration of P.D. 27 and all
other Decrees, Letters of Instructions and General Orders issued in connection therewith as
inapplicable to homestead lands.

Defendants filed their answer with special and affirmative defenses of July 8, 1981.

Subsequently, on July 19, 1982, plaintiffs filed an urgent motion to enjoin the defendants from
declaring the lands in litigation under Operation Land Transfer and from being issued land transfer
certificates to which the defendants filed their opposition dated August 4, 1982.

On November 5, 1982, the then Court of Agrarian Relations 16th Regional District, Branch IV,
Pagadian City (now Regional Trial Court, 9th Judicial Region, Branch XVIII) rendered its decision
dismissing the said complaint and the motion to enjoin the defendants was denied.

On January 4, 1983, plaintiffs moved to reconsider the Order of dismissal, to which defendants
filed their opposition on January 10, 1983.

Thus, on April 29, 1986, the Regional Trial Court issued the aforequoted decision prompting
defendants to move for a reconsideration but the same was denied in its Order dated June 6,
1986.

On appeal to the respondent Court of Appeals, the same was sustained in its judgment rendered
on March 3, 1987, thus:jgc:chanrobles.com.ph

"WHEREFORE, finding no reversible error thereof, the decision appealed from is hereby AFFIRMED.

"SO ORDERED." (p. 34, Rollo)

Hence, the present petition for review on certiorari.

The pivotal issue is whether or not lands obtained through homestead patent are covered by the
Agrarian Reform under P.D. 27.

The question certainly calls for a negative answer.

We agree with the petitioners in saying that P.D. 27 decreeing the emancipation of tenants from
the bondage of the soil and transferring to them ownership of the land they till is a sweeping
social legislation, a remedial measure promulgated pursuant to the social justice precepts of the
Constitution. However, such contention cannot be invoked to defeat the very purpose of the
enactment of the Public Land Act or Commonwealth Act No. 141. Thus,

"The Homestead Act has been enacted for the welfare and protection of the poor. The law gives
a needy citizen a piece of land where he may build a modest house for himself and family and
plant what is necessary for subsistence and for the satisfaction of life’s other needs. The right of
the citizens to their homes and to the things necessary for their subsistence is as vital as the right
to life itself. They have a right to live with a certain degree of comfort as become human beings,
and the State which looks after the welfare of the people’s happiness is under a duty to safeguard
the satisfaction of this vital right." (Patricio v. Bayog, 112 SCRA 45)

In this regard, the Philippine Constitution likewise respects the superiority of the homesteaders’
rights over the rights of the tenants guaranteed by the Agrarian Reform statute. In point is Section
6 of Article XIII of the 1987 Philippine Constitution which provides:
"Section 6. The State shall apply the principles of agrarian reform or stewardship, whenever
applicable in accordance with law, in the disposition or utilization of other natural resources,
including lands of public domain under lease or concession suitable to agriculture, subject to
prior rights, homestead rights of small settlers, and the rights of indigenous communities to their
ancestral lands."

Additionally, it is worthy of note that the newly promulgated Comprehensive Agrarian Reform
Law of 1988 or Republic Act No. 6657 likewise contains a proviso supporting the inapplicability of
P.D. 27 to lands covered by homestead patents like those of the property in question, reading,

"Section 6. Retention Limits . . .

". . . Provided further, That original homestead grantees or their 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."cralaw virtua1aw library

WHEREFORE, premises considered, the decision of the respondent Court of Appeals sustaining
the decision of the Regional Trial Court is hereby AFFIRMED.

SO ORDERED.

SECOND DIVISION

[G.R. No. 133507. February 17, 2000.]

EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D. DAEZ, Petitioners, v. THE HON. COURT OF
APPEALS, MACARIO SORIENTES, APOLONIO MEDIANA, ROGELIO MACATULAD and MANUEL UMALI,
Respondents.

DECISION

DE LEON, JR., J.:

Before us is a petition for review on certiorari of the Decision 1 of the Court of Appeals 2 dated
January 28, 1998 which denied the application of petitioner heirs of Eudosia Daez for the retention
of a 4.1685-hectare riceland pursuant to Republic Act (R.A.) No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law 3 , thereby reversing the Decision 4 of then Executive
Secretary Ruben D. Torres and the Order 5 of then Deputy Executive Secretary Renato C. Corona,
both of which had earlier set aside the Resolution 6 and Order 7 of then Department of Agrarian
Reform (DAR) Secretary Ernesto D. Garilao denying exemption of the same riceland from
coverage under Presidential Decree (P.D.) No. 27.

The pertinent facts are:

Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in Barangay Lawa,
Meycauayan, Bulacan which was being cultivated by respondents Macario Soriente, Rogelio
Macatulad, Apolonio Mediana and Manuel Umali under a system of share-tenancy. The said
land was subjected to the Operation Land Transfer (OLT) Program under Presidential Decree
(P.D.) No. 27 8 as amended by Letter of Instruction (LOI) No. 474 9 . Thus, the then Ministry of
Agrarian Reform acquired the subject land and issued Certificates of Land Transfer (CLT) on
December 9, 1980 to private respondents as beneficiaries.

However, on May 31, 1981, private respondents signed an affidavit, allegedly under duress,
stating that they are not share tenants but hired laborers 10 . Armed with such document, Eudosia
Daez applied for the exemption of said riceland from coverage of P.D. No. 27 due to non-tenancy
as well as for the cancellation of the CLTs issued to private respondents.

In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared
ownership over 41.8064 hectares of agricultural lands located in Meycauayan, Bulacan and
fourteen (14) hectares of riceland, sixteen (16) hectares of forestland, ten (10) hectares of
"batuhan" and 1.8064 hectares of residential lands 11 in Peñaranda, Nueva Ecija. Included in their
41.8064-hectare landholding in Bulacan, was the subject 4.1685-hectare riceland in
Meycauayan.

On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying Eudosia Daez’s
application for exemption upon finding that her subject land is covered under LOI No. 474,
petitioner being owner of the aforesaid agricultural lands exceeding seven (7) hectares. 12

On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong requesting for
reconsideration of Undersecretary Medina’s order. But on January 16, 1992 13 Secretary Leong
affirmed the assailed order upon finding private respondents to be bona fide tenants of the
subject land. Secretary Leong disregarded private respondents’ May 31, 1981 affidavit for having
been executed under duress because he found that Eudosia’s son, Adriano, who was then the
incumbent Vice-Mayor of Meycauayan, pressured private respondents into signing the same.

Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of Appeals via a
petition for certiorari. The Court of Appeals, however, sustained the order of Secretary Leong in a
decision dated April 29, 1992. Eudosia pursued her petition before this court but we denied it in a
minute resolution dated September 18, 1992. We also denied her motion for reconsideration on
November 9, 1992.

Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents (EPs) to private
respondents. Thereafter, the Register of Deeds of Bulacan issued the corresponding Transfer
Certificates of Title (TCTs).

Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her,
Eudosia Daez next filed an application for retention of the same riceland, this time under R.A. No.
6657.

In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B. Bernardo allowed
Eudosia Daez to retain the subject riceland but he denied the application of her eight (8) children
to retain three (3) hectares each for their failure to prove actual tillage of the land or direct
management thereof as required by law 14 . Aggrieved, they appealed to the DAR.
On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order of Regional
Director Bernardo in a Resolution, 15 the decretal portion of which reads, viz.:

"WHEREFORE, premises considered, this Resolution is hereby issued setting aside with FINALITY the
Order dated March 22, 1994 of the Regional Director of DAR Region III.

The records of this case is remanded to the Regional Office for immediate implementation of the
Order dated January 16, 1992 of this office as affirmed by the Court of Appeals and the Supreme
Court.

SO ORDERED."cralaw virtua1aw library

Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19, 1995 16 .

She appealed Secretary Garilao’s decision to the Office of the President which ruled in her favor.
The dispositive portion of the Decision 17 of then Executive Secretary reads:jgc:

"WHEREFORE, the resolution and order appealed from are hereby SET ASIDE and judgment is
rendered authorizing the retention by Eudosia Daez or her heirs of the 4.1685-hectare landholding
subject thereof.

SO ORDERED." 18

Aggrieved, private respondents sought from the Court of Appeals, a review of the decision of the
Office of the President.

On January 28, 1999, the said Decision of the Office of the President was reversed. The Court of
Appeals ordered, thus:

"WHEREFORE, the assailed decision of July 5, 1996 and Order dated October 23, 1996 of the public
respondents are REVERSED AND SET ASIDE, and the Resolution and Order of DAR Secretary Ernesto
D. Garilao respectively dated August 26, 1994 and January 19, 1995 are REINSTATED.

SO ORDERED."

Hence, this petition which assigns the following errors:

"I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT DISTINCTION BETWEEN
EXEMPTION FROM AGRARIAN REFORM COVERAGE AND THE RIGHT OF RETENTION OF
LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN ADVERSE DECISION IN THE FORMER WILL
FORECLOSE FURTHER ACTION TO ENFORCE THE LATTER CONSIDERING THAT THEY CONSTITUTE
SEPARATE AND DISTINCT CAUSES OF ACTION AND, THEREFORE, ENFORCEABLE SEPARATELY AND IN
SEQUEL.

II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE PRINCIPLE OF RES JUDICATA
DESPITE THE FACT THAT THE PREVIOUS CASE CITED (EXEMPTION FROM COVERAGE DUE TO NON-
TENANCY) AND THE PRESENT CASE (RETENTION RIGHT) ARE OF DIFFERENT CAUSES OF ACTION.

III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED/OPINED THAT THERE WAS A CUT-
OFF DATE (AUGUST 27, 1985) FOR LANDOWNERS TO APPLY FOR EXEMPTION OR RETENTION UNDER
P.D. 27 AND THOSE WHO FAILED TO FILE THEIR APPLICATIONS/PETITIONS ARE DEEMED TO HAVE
WAIVED THEIR RIGHTS.

IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT PETITIONERS (RESPONDENTS
THEREIN) ARE GUILTY OF ESTOPPEL.

V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LAND SUBJECT OF THIS
CASE IS NO LONGER OWNED BY PETITIONERS SINCE PRIVATE RESPONDENTS HAVE ALREADY BEEN
ISSUED NOT ONLY THEIR RESPECTIVE CERTIFICATES OF LAND TRANSFER BUT ALSO THEIR INDIVIDUAL
CERTIFICATES OF TITLE OVER THE DISPUTED AREA." 19
We grant the petition.

First. Exemption and retention in agrarian reform are two (2) distinct concepts.

P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice
or corn lands. The requisites for coverage under the OLT program are the following: (1) the land
must be devoted to rice or corn crops; and (2) there must be a system of share-crop or lease-
tenancy obtaining therein. If either requisite is absent, a landowner may apply for exemption. If
either of these requisites is absent, the land is not covered under OLT. Hence, a landowner need
not apply for retention where his ownership over the entire landholding is intact and undisturbed.

P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is
irrigated, a three (3)-hectare lot constituting a family size farm. However, said law allows a
covered landowner to retain not more than seven (7) hectares of his land if his aggregate
landholding does not exceed twenty-four (24) hectares. Otherwise, his entire landholding is
covered without him being entitled to any retention right 20 .

Consequently, a landowner may keep his entire covered landholding if its aggregate size does
not exceed the retention limit of seven (7) hectares. In effect, his land will not be covered at all
by the OLT program although all requisites for coverage are present. LOI No. 474 clarified the
effective coverage of OLT to include tenanted rice or corn lands of seven (7) hectares or less, if
the landowner owns other agricultural lands of more than seven (7) hectares. The term "other
agricultural lands" refers to lands other than tenanted rice or corn lands from which the landowner
derives adequate income to support his family.

Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or
corn crops even if it is tenanted; or (2) the land is untenanted even though it is devoted to rice or
corn crops.

On the other hand, the requisites for the exercise by the landowner of his right of retention are
the following: (1) the land must be devoted to rice or corn crops; (2) there must be a system of
share-crop or lease-tenancy obtaining therein; and (3) the size of the landholding must not
exceed twenty-four (24) hectares, or it could be more than twenty-four (24) hectares provided
that at least seven (7) hectares thereof are covered lands and more than seven (7) hectares of
it consist of "other agricultural lands" .

Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT
and those for the grant of an application for the exercise of a landowner’s right of retention, are
different.

Hence, it is incorrect to posit that an application for exemption and an application for retention
are one and the same thing. Being distinct remedies, finality of judgment in one does not
preclude the subsequent institution of the other. There was, thus, no procedural impediment to
the application filed by Eudosia Daez for the retention of the subject 4.1865-hectare riceland,
even after her appeal for exemption of the same land was denied in a decision that became
final and executory.

Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject
4.1685 riceland.

The right of retention is a constitutionally guaranteed right, which is subject to qualification by the
legislature 21 . It serves to mitigate the effects of compulsory land acquisition by balancing the
rights of the landowner and the tenant and by implementing the doctrine that social justice was
not meant to perpetrate an injustice against the landowner 22 . A retained area, as its name
denotes, is land which is not supposed to anymore leave the landowner’s dominion, thus sparing
the government from the inconvenience of taking land only to return it to the landowner
afterwards, which would be a pointless process.
In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian
Reform 23 , we held that landowners who have not yet exercised their retention rights under P.D.
No. 27 are entitled to the new retention rights under R.A. No. 6657 24 . We disregarded the August
27, 1985 deadline imposed by DAR Administrative Order No. 1, series of 1985 on landowners
covered by OLT. However, if a landowner filed his application for retention after August 27, 1985
but he had previously filed the sworn statements required by LOI Nos. 41, 45 and 52, he is still
entitled to the retention limit of seven (7) hectares under P.D. No. 27. 25 Otherwise, he is only
entitled to retain five (5) hectares under R.A. No. 6657.

Sec. 6 of R.A. No. 6657, which provides, viz.:

SECTION 6. 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-size, 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 land 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 right to choose the area to be retained, which shall be compact or contiguous, shall pertain
to the landowner. Provided, however, That in case the area selected for retention by the
landowner is tenanted, the tenant shall have the option to choose whether to remain therein or
be a beneficiary in the same or another agricultural land with similar or comparable features. In
case the tenant chooses to remain in the retained area, he shall be considered a lease holder
and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right as a lease holder to the land retained
by the landowner. The tenant must exercise this option within a period of one (1) year from the
time the landowner manifests his choice of the area for retention.

In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval
of this Act shall be respected.

Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of
possession of private lands executed by the original landowner in violation of this Act shall be null
and void; Provided, however, That those executed prior to this Act shall be valid only when
registered with the Register of Deeds within a period of three (3) months after the effectivity of
this Act. Thereafter, all Register of Deeds shall inform the DAR within thirty (30) days of any
transaction involving agricultural lands in excess of five (5) hectares" 26 .

defines the nature and incidents of a landowner’s right of retention. For as long as the area to be
retained is compact or contiguous and it does not exceed the retention ceiling of five (5)
hectares, a landowner’s choice of the area to be retained, must prevail. Moreover,
Administrative Order No. 4, series of 1991, 27 which supplies the details for the exercise of a
landowner’s retention rights, likewise-recognizes no limit to the prerogative of the landowner,
although he is persuaded to retain other lands instead to avoid dislocation of farmers.

Without doubt, this right of retention may be exercised over tenanted land despite even the
issuance of Certificate of Land Transfer (CLT) to farmer-beneficiaries. 28 What must be protected,
however, is the right of the tenants to opt to either stay on the land chosen to be retained by the
landowner or be a beneficiary in another agricultural land with similar or comparable features.
29
Finally. Land awards made pursuant to the government’s agrarian reform program are subject
to the exercise by a landowner, who is so qualified, of his right of retention.

Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands. Thereafter, they
are issued Emancipation Patents (EPs) after compliance with all necessary conditions. Such EPs,
upon their presentation to the Register of Deeds, result in the issuance of the corresponding
transfer certificates of title (TCT) in favor of the beneficiaries mentioned therein.

Under R.A. No. 6657, the procedure has been simplified 31 . Only Certificates of Land Ownership
Award (CLOAs) are issued, in lieu of EPs, after compliance with all prerequisites. Thereafter, upon
presentation of the CLOAs to the Register of Deeds, TCTs are issued to the designated
beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from
retaining the area covered thereby. Under Administrative Order No. 2, series of 1994 32 , an EP or
CLOA may be cancelled if the land covered is later found to be part of the landowner’s retained
area.

A certificate of title accumulates in one document a comprehensive statement of the status of

the fee held by the owner of a parcel of land. As such, it is a mere evidence of ownership and it
does not constitute the title to the land itself. It cannot confer title where no title has been
acquired by any of the means provided by law.

Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a
homestead patent because the land covered was not part of the public domain and as a result,
the government had no authority to issue such patent in the first place 35 . Fraud in the issuance
of the patent, is also a ground for impugning the validity of a certificate of title 36 . In other words,
the invalidity of the patent or title is sufficient basis for nullifying the certificate of title since the
latter is merely an evidence of the former.

In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland were
issued without Eudosia Daez having been accorded her right of choice as to what to retain
among her landholdings. The transfer certificates of title thus issued on the basis of those CLTs
cannot operate to defeat the right of the heirs of deceased Eudosia Daez to retain the said 4.1685
hectares of riceland.

WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals, dated
January 28, 1998, is REVERSED and SET ASIDE and the Decision of the Office of the President, dated
July 5, 1996, is hereby REINSTATED. In the implementation of said decision, however, the
Department of Agrarian Reform is hereby ORDERED to fully accord to private respondents their
rights under Section 6 of R.A. No. 6657. No costs.

SO ORDERED.
[G.R. No. 139083. August 30, 2001]

FLORENCIA PARIS, petitioner, vs. DIONISIO A. ALFECHE, JUAN L. ALFECHE, MAXIMO N. PADILLA,
DIONISIO Q. MATILOS, Heirs of GREG A. ALFECHE, DIONISIO W. MATILO, SIMPLICIO L. ADAYA,
TEOFILO M. DE GUZMAN, FRANCISCO B. DINGLE and MARIFE NAVARO, respondents.

DECISION

PANGANIBAN, J.:

Homesteads are not exempt from the operation of the Land Reform Law. The right to retain seven
hectares of land is subject to the condition that the landowner is actually cultivating that area or
will cultivate it upon the effectivity of the said law.

The Case

The Petition for Review before us assails the June 4, 1999 Decision of the Court of Appeals[1] (CA),
in CA-GR SP No. 45738, which affirmed the ruling of the Department of Agrarian Reform
Adjudication Board (DARAB). The decretal portion of the CA Decision reads:

WHEREFORE, [there being] no grave abuse of discretion x x x committed by DARAB, the instant
petition is hereby DENIED DUE COURSE and DISMISSED. Costs against the petitioner.[2]
The Decision of the DARAB, which was affirmed by the CA, had disposed as follows:

WHEREFORE, premises considered, the assailed Decision dated March 19, 1992 is hereby
REVERSED and SET ASIDE, and a new one is entered:

1. Declaring the private respondents to be full owners of the land they till pursuant to Presidential
Decree No. 27 and Executive Order No. 228;

2. Declaring the validity of the Emancipation Patents issued to private respondents; and

3. Dismissing the case.[3]

The Facts

The Court of Appeals narrates the facts thus:

Petitioner is the registered owner of a parcel of land situated at Paitan, Quezon, Bukidnon with
an area of 10.6146 hectares, more or less, covered by Transfer Certificate of Title No. T-8275 and
another property with an area of 13.2614 hectares covered by Original Certificate of Title No. P-
4985, also located at Paitan, Quezon, Bukidnon; the said parcels are fully tenanted by private
respondents herein who are recipients of Emancipation Patents in their names pursuant to
Operation Land Transfer under P.D. 27 (Annexes A, A-1 to A-18) notwithstanding the fact that
neither the tenants nor the Land Bank of the Philippines (LBP) [has] paid a single centavo for the
said land. Petitioner and the tenants have not signed any Land Transfer Production Agreement.
Petitioner and her children have been deprived of their property without due process of law and
without just compensation, especially so that the tenants have already stopped paying rentals
as of December 1988 to the damage and prejudice of petitioner.

Petitioner contends that since she is entitled to a retention of seven (7) hectares under P.D. 27
and/or 5 hectares and 3 hectares each for her children under the Comprehensive Agrarian
Reform Law (CARL), the tenants are not supposed to acquire the subject land and the
Emancipation Patents precipitately issued to them are null and void for being contrary to law.
Petitioner further alleged that she owns the subject property covered by OCT No. P-4985 as
original homestead grantee who still owned the same when Republic Act No. 6657 was
approved, thus she is entitled to retain the area to the exclusion of her tenants. As regards TCT
No. 8275, petitioner has applied for retention of seven hectares per Letter of Retention attached
as Annex B, that the lands subject of the instant petition are covered by Homestead Patents, and
as decided by the Supreme Court in the cases of Patricio vs. Bayug (112 SCRA 41) and Alita vs.
Court of Appeals (170 SCRA 706), the homesteaders and their heirs have the right to cultivate
their homesteads personally, which is a superior right over that of tenant-farmers.

Petitioner moved for the cancellation and recall of the Emancipation Patents issued to private
respondents-farmers and to restore to petitioner and her children the ownership and cultivation
of the subject lots plus payment of back rentals from the time they stopped paying the same until
ejected therefrom.

Respondents filed their answer dated May 29, 1991 and admitted the generation and issuance
of Emancipation Patents to private respondents as tenant-farmers thereof and the Supreme
Court rulings on the Bayug and Alita cases relative to homestead patents, but denied the rest of
the material allegations for want of knowledge or information as to the truth relative thereto.
Respondents alleged that when the subject lands were covered under P.D. 27, the petitioner was
repeatedly informed and invited by the DAR Office at Valencia, Bukidnon to thresh out the
matter; that petitioners right to retain seven (7) hectares is not absolute since she owns other
agricultural landholdings, thus disqualifying her to retain the area, aside from the fact that she
has other properties sufficient to support her family as shown in the Certification of the Provincial
Assessors Office listing down the petitioners landholdings (Annex 2). By way of special affirmative
defenses, respondents averred that the criteria set forth under P.D. 27 were observed before the
generation of the Emancipation Patents; that under Executive Order No. 228, the tenant-farmers
under P.D. 27 are deemed full owners of the lands they till and the lease rentals paid by them
should be considered as amortization payments; that under LOI 474, petitioner who owns more
than seven (7) hectares of lands are not entitled to retention. Respondents prayed for the
dismissal of the case. They likewise prayed that the Emancipation Patents issued to private
respondents and their peaceful possession of their farm lots be respected.

The Adjudicator a quo conducted a hearing and afforded the parties their day in court and the
opportunity to present their evidence. On August 13, 1991, the Adjudicator a quo issued an Order
for the parties to submit their respective position papers with evidence to buttress their allegations.
On March 10, 1992, the Adjudicator a quo rendered the decision, thus:

WHEREFORE, in the light of the foregoing, this Adjudicator declares the following:

1. That all the Emancipation Patents issued to tenants-respondents shall be cancelled and
recalled;

2. That the Register of Deeds of Malaybalay, Bukidnon shall cancel all Emancipation Patents
registered under the names of the herein tenants-respondents; and

3. That back rentals due to the petitioners, which were given to the LBP as amortizations, shall be
given to the said petitioner.[4]

On appeal, the DARAB reversed the adjudicator.

Ruling of the Court of Appeals

The CA rejected the claim of petitioner. It ruled that she could not retain her homesteads, since
she was not the actual cultivator thereof. It also held that she and her heirs had not been
deprived of their right to retain the area mandated by law, because the records showed that
they had other agricultural landholdings. Finally, it ruled that she had not been deprived of her
properties without just compensation, since Section 2 of Executive Order 228 declared that
tenant-farmers of agricultural lands under P.D. 27 are deemed owners of the land they till and the
lease rentals paid by them shall be considered as amortization payments.[5]

Hence, this Petition.[6]

The Issues

In her Memorandum, petitioner submits the following issues for our consideration:

I. Whether or not the original homesteads issued under the public land act [are] exempted from
the operation of land reform.

II. Granting arguendo that homesteads are not exempt, whether or not the Emancipation Patents
issued to the respondents are valid notwithstanding lack of payment of just compensation.

III. On the assumption that homesteads are exempt from land reform and/or the emancipation
patents are illegally issued hence, void, can the respondents be ejected from the premises in
question?[7]

The Courts Ruling

The Petition is partly meritorious. Respondents are entitled to the lands they till, subject to the
determination and payment of just compensation to petitioner.

First Issue: Petitioners Homesteads Not Exempt from Land Reform

Petitioner contends that because the subject properties are covered by homestead patents,
they are exempt from the operation of land reform. In support of her position, she cites the cases
Alita v. CA[8] and Patricio v. Bayug,[9] in which the Court ruled that homesteaders had a superior
right to cultivate their homesteads as against their tenants.

Petitioners contention is without legal basis. Presidential Decree (PD) No. 27, under which the
Emancipation Patents sought to be cancelled here were issued to respondents, applies to all
tenanted private agricultural lands primarily devoted to rice and corn under a system of share-
crop or lease-tenancy, whether classified as landed estate or not.[10] The law makes no
exceptions whatsoever in its coverage. Nowhere therein does it appear that lots obtained by
homestead patents are exempt from its operation.

The matter is made even clearer by Department Memorandum Circular No. 2, Series of 1978,
which states: Tenanted private agricultural lands primarily devoted to rice and/or corn which
have been acquired under the provisions of Commonwealth Act 141, as amended, shall also be
covered by Operation Land Transfer. Unquestionably, petitioners parcels of land, though
obtained by homestead patents under Commonwealth Act 141, are covered by land reform
under PD 27.

Petitioners claimed entitlement to retain seven (7) hectares is also untenable. PD 27, which
provides the retention limit, states:

In all cases, the landowner may retain an area of not more than seven (7) hectares if such
landowner is cultivating such area or will now cultivate it.

Clearly, the right to retain an area of seven hectares is not absolute. It is premised on the condition
that the landowner is cultivating the area sought to be retained or will actually cultivate it upon
effectivity of the law.

In the case at bar, neither of the conditions for retention is present. As admitted by petitioner
herself, the subject parcels are fully tenanted; thus, she is clearly not cultivating them, nor will she
personally cultivate any part thereof. Undoubtedly, therefore, she has no right to retain any
portion of her landholdings.

Even under the current primary law on agrarian reform, Republic Act (RA) No. 6657, to which the
application of PD 27 is suppletory, petitioners lands are subject to land reform. The said Act lays
down the rights of homestead grantees as follows:

SEC. 6. 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 PD 27 shall be allowed to keep the area originally retained by them thereunder; Provided,
further, That original homestead grantees or their 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. (italics supplied)

Indisputably, homestead grantees or their direct compulsory heirs can own and retain the original
homesteads, only for as long as they continue to cultivate them. That parcels of land are covered
by homestead patents will not automatically exempt them from the operation of land reform. It
is the fact of continued cultivation by the original grantees or their direct compulsory heirs that
shall exempt their lands from land reform coverage.
In the present case, as previously pointed out, neither petitioner nor her heirs are personally
cultivating the subject homesteads. The DAR and the CA found that respondents were the ones
who had been cultivating their respective portions of the disputed properties.

However, petitioner can retain five (5) hectares in accordance with Section 6 of RA 6657, which
requires no qualifying condition for the landowner to be entitled to retain such area. This ruling is
in line with Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform,
from which we quote.

x x x. In any event, assuming that the petitioners have not yet exercised their retention rights, if
any, under PD No. 27, the Court holds that they are entitled to the new retention rights provided
for by RA No. 6657, which in fact are on the whole more liberal than those granted by the decree.

Petitioners heirs, however, are not entitled to awards of three (3) hectares each, since they are
not actually tilling the parcels or directly managing the farm.

Patricio v. Bayug and Alita v. CA

Not Applicable

Petitioner insists that the appellate court ignored the ruling of the Court in Patricio v. Bayug[11]
and Alita v. CA.[12] She relies on the following pronouncement in Patricio: We hold that the more
paramount and superior policy consideration is to uphold the right of the homesteader and his
heirs to own and cultivate personally the land acquired from the State without being
encumbered by tenancy relations.[13] She also cites the statement in Alita that the inapplicability
of P.D. 27 to lands covered by homestead patents like those of the property in question finds
support in the aforecited Section 6 of RA 6657.[14] A closer look at these cases shows that they
are not applicable to the issues in the present case.

In Patricio, the owner and his heirs had previously cultivated the homestead, which was later sold
but subsequently reconveyed to the former. After the reconveyance, the owners heirs wanted to
resume their cultivation of the homestead, but the previous buyers tenants did not want to leave
it. In Alita, the owner was also desirous of personally cultivating the homestead; but the tenants,
not wanting to relinquish it, were asserting their own right to continue cultivating it. Thus, under
these circumstances, the Court upheld the right of the homestead owners over that of the
tenants.

In the case at bar, petitioner herself has not personally cultivated the parcels of land. Neither has
she or her heirs expressed, at any time, any desire to cultivate them personally. She is invoking,
yet is clearly not intending to ever actually exercise, her alleged right as homesteader to own
and personally cultivate them.

Thus, the rulings in both Patricio and Alita, which are in line with the state objective of fostering
owner cultivatorship[15] and of abolishing tenancy,[16] would be inapplicable to the present
case. Since petitioner and her heirs have evinced no intention of actually cultivating the lands or
even directly managing the farm, they will undoubtedly continue to be absentee landlords.
Therefore, to blindly and indiscriminately apply the ruling in the cited cases would be tantamount
to encouraging feudalistic practices and going against the very essence of agrarian reform. This
we cannot sanction.

Second Issue: Just Compensation

It is undisputed that the subject parcels were covered by Operation Land Transfer under PD 27,
and that private respondents were identified as beneficiaries. In fact, Emancipation Patents have
already been issued to them.

Petitioner, however, claims that she was not paid just compensation and, thus, prays for the
cancellation of the Emancipation Patents issued to respondents under PD 27. She contends that
it is illegal for the DAR to take property without full payment of just compensation[;] until full
payment is done the title and ownership remain with the landholder.[17]

Petitioners contention has merit. Section 2 of PD 266 states:

After the tenant-farmer shall have fully complied with the requirements for a grant of title under
Presidential Decree No. 27, an Emancipation Patent and/or Grant shall be issued by the
Department of Agrarian Reform on the basis of a duly approved survey plan.

On the other hand, paragraphs 8 and 9 of PD 27 reads as follows:

For the purpose of determining the cost of the land to be transferred to the tenant-farmer
pursuant to this Decree, the value of the land shall be equivalent to two and one-half (2 ) times
the average harvest of three normal crop years immediately preceding the promulgation of this
Decree;

The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be
paid by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations[.]

Although, under the law, tenant farmers are already deemed owners of the land they till, they
are still required to pay the cost of the land, including interest, within fifteen years before the title
is transferred to them. Thus, the Court held in Association of Small Landowners in the Philippines v.
Secretary of Agrarian Reform:[18]

It is true that PD 27 expressly ordered the emancipation of tenant-farmers as of 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.

In the case at bar, there is no showing that respondents complied with the requirement of full
payment of the cost of the parcels of land. As they themselves admitted,[19] their value had not
even been determined yet. In the absence of such determination, the Court cannot rule that just
compensation has already been fully paid.

Presidential Decree 27 and subsequently Executive Order (EO) 228, which recognized the rights
acquired by tenant-farmers under PD 27, provide in detail the computation to be used in arriving
at the exact total cost of the parcels of land. Evidently, therefore, the law recognizes that their
exact value, or the just compensation to be given to the landowner, cannot just be assumed; it
must be determined with certainty before the land titles are transferred.

Although EO 228 provides that the total lease rentals paid for the lands from October 21, 1972
shall be considered as advance payment, it does not sanction the assumption that such rentals
are automatically considered as equivalent to just compensation for the land. The provision
significantly designates the lease rentals as advance, not full, payment. The determination of the
exact value of the lands cannot simply be brushed aside, as it is fundamental to the
determination of whether full payment has been made.

Necessarily, the lease rentals admittedly paid by respondents until December 1988 cannot, at this
point, be considered as full settlement of the value of the lands or as just compensation for them.
The value of the subject lands was never determined; thus, there is no amount that can be used
as basis for applying the lease rentals.

Under the circumstances, actual title to the subject lands remains with petitioner. Clearly then,
under PD 27 and EO 228, the application of the process of agrarian reform to the subject lands is
still incomplete.
Considering the passage of RA 6657 before the completion of the application of the agrarian
reform process to the subject lands, the same should now be completed under the said law, with
PD 27 and EO 228 having only suppletory effect. This ruling finds support in Land Bank of the
Philippines v. CA,[20] wherein the Court stated:

We cannot see why Sec. 18 of RA 6657 should not apply to rice and corn lands under PD 27.
Section 75 of RA 6657 clearly states that the provisions of PD 27 and EO 228 shall only have a
suppletory effect. Section 7 of the Act also provides ---

Sec. 7. Priorities. The DAR, in coordination with the PARC shall plan and program the acquisition
and distribution of all agricultural lands through a period of (10) years from the effectivity of this
Act. Lands shall be acquired and distributed as follows:

Phase One: Rice and Corn lands under P.D. 27; all idle or abandoned lands; all private lands
voluntarily offered by the owners for agrarian reform; x x x and all other lands owned by the
government devoted to or suitable for agriculture, which shall be acquired and distributed
immediately upon the effectivity of this Act, with the implementation to be completed within a
period of not more than four (4) years emphasis supplied).

This eloquently demonstrates that RA 6657 includes PD 27 lands among the properties which the
DAR shall acquire and distribute to the landless. And to facilitate the acquisition and distribution
thereof, Secs. 16, 17 and 18 of the Act should be adhered to. In Association of Small Landowners
of the Philippines v. Secretary of Agrarian Reform this Court applied the provisions (of) RA 6657 to
rice and corn lands when it upheld the constitutionality of the payment of just compensation for
PD 27 lands through the different modes stated in Sec. 18.

In determining the amount to be paid petitioner, all lease rentals paid by respondents to her after
October 21, 1972 should be deducted therefrom. This formula is intended to put into effect the
provision of Section 2 of EO 228.

Third Issue: Tenants Cannot Be Ejected

Petitioner submits that aside from cancelling the Emancipation Patents issued to respondents, the
ejectment of the latter from the premises should be ordered by the Court, in accordance with
the doctrine in Patricio.

Petitioners position is unfounded. As earlier explained, Patricio finds no application to the case at
bar. Thus, there is no justification for ejecting respondents. Besides, Section 22 of RA 6657 expressly
states that actual tenant-tillers in the landholding shall not be ejected or removed therefrom.
Furthermore, there is no reason for ejecting the tillers with respect to the area of five hectares,
which petitioner may choose to retain. Section 6 of RA 6657 further states:

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain
to the landowner; Provided, however, That in case the area selected for retention by the land
owner is tenanted, the tenant shall have the option to choose whether to remain therein or be a
beneficiary in the same or another agricultural land with similar or comparable features. In case
the tenant chooses to remain in the retained area, he shall be considered a lease holder and
shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right as a lease-holder to the land retained
by the landowner. The tenant must exercise this option within a period of one (1) year from the
time the landowner manifests his choice of the area for retention.

In all cases, the security of tenure of the farmers or farm workers on the land prior to the approval
of this Act shall be respected.

The current provision on retention removes the necessity, present under PD 27, of ejecting actual
tillers. Under the current law, landowners who do not personally cultivate their lands are no longer
required to do so in order to qualify for the retention of an area not exceeding five hectares.
Instead, they are now required to maintain the actual tiller of the area retained, should the latter
choose to remain therein.

WHEREFORE, the Petition is partially GRANTED. The assailed Decision of the Court of Appeals is
hereby SET ASIDE. The Decision of the provincial agrarian reform adjudicator is REINSTATED with
the modification that the lease rentals, which respondents have already paid to petitioner after
October 21, 1972, are to be considered part of the purchase price for the subject parcels of land.

SO ORDERED.