You are on page 1of 49

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 85041 August 5, 1993


GRACIANO BERNAS, petitioner,
vs.
THE
HONORABLE
COURT
OF
APPEALS and NATIVIDAD BITO-ON
DEITA, respondents.
Rodriguez Dadivas for petitioner.
Orlanda Bigcas-Lumawag for private
respondent.

PADILLA, J.:
Petitioner Graciano Bernas is before
this Court assailing the decision * of
the respondent appellate court dated
19 August 1988 in CA G.R. SP No.
14359 (CAR), which reversed the
decision ** of the Regional Trial Court
of Roxas City, Branch 18, in Civil Case
No. V-5146 entitled "Natividad Bito-on
Deita, et al. vs, Graciano Bernas." As
disclosed by the records and the
evidence of both parties, the facts
involved in the controversy are as
follows:
Natividad Bito-on Deita is the owner
of Lots Nos. 794, 801, 840 and 848 of
the Cadastral Survey of Panay, Capiz,
with a total area of 5,831 square
meters. Out of liberality, Natividad
entrusted the lots by way of "dugo" to
her brother, Benigno Bito-on, so that
he could use the fruits thereof to
defray the cost of financing his
children's schooling in Manila. Prior to
April 1978, these agricultural lots had
been leased by one Anselmo Billones
but following the latter's death and
consequent termination of the lease,
petitioner Graciano Bernas took over
and worked on the land. Benigno and
Bernas worked out a productionsharing arrangement whereby the
first provided for all the expenses and

the second worked the land, and after


harvest, the two (2) deducted said
expenses and divided the balance of
the harvest between the two of them.
The owner, Natividad, played no part
in this arrangement as she was not
privy to the same.
In 1985, the lots were returned by
Benigno to his sister Natividad, as all
his children had by then finished their
schooling. When Natividad, and her
husband
sought
to
take
over
possession of the lots, Bernas refused
to relinquish, claiming that he was an
agricultural
leasehold
lessee
instituted on the land, by Benigno
and, as such, he is entitled to security
of tenure under the law.
Faced with this opposition from
Bernas, Natividad filed an action with
the Regional Trial Court for Recovery
of
Possession,
Ownership
and
Injunction with Damages. After trial,
the court a quo held in favor of the
defendant (Bernas) and dismissed the
complaint, ruling that from the record
and the evidence presented, notably
the testimony of the plaintiff's own
brother Benigno, Bernas was indeed a
leasehold tenant under the provisions
of Republic Act No. 1199 and an
agricultural leasehold lessee under
Republic Act No. 3844, having been
so instituted by the usufructuary of
the land (Benigno). As such, according
to the trial court, his tenurial rights
cannot be disturbed save for causes
provided by law.
Aggrieved, the plaintiff (Natividad)
appealed to the Court of Appeals,
contending
that
the
"dugo"
arrangement between her and her
brother Benigno was not in the nature
of a usufruct (as held by the court a
quo), but actually a contract of
commodatum. This being the case,
Benigno,
the
bailee
in
the
commodatum, could neither lend nor
lease the properties loaned, to a third
person, as such relationship (of bailorbailee) is one of personal character.
This time, her contentions were
sustained,
with
the
respondent
appellate court, reversing the trial
court's decision, ruling that having

only derived his rights from the


usufructuary/bailee, Bernas had no
better right to the property than the
latter who admittedly was entrusted
with the property only for a limited
period. Further, according to the
appellate court, there being no privity
of contract between Natividad and
Bernas, the former cannot be
expected to be bound by or to honor
the relationship or tie between
Benigno and the latter (Bernas).
Hence, this petition by Bernas.
The issue for resolution by the Court
is concisely stated by the respondent
appellate court as follows: whether
the agricultural leasehold established
by Benigno Bito-on in favor of
Graciano Bernas is binding upon the
owner of the land, Natividad Bito-on,
who disclaims any knowledge of, or
participation in the same.
In ruling for the private respondent
(Natividad), the respondent appellate
court held that:
Indeed, no evidence has
been adduced to clarify
the nature of the "dugo"
transaction
between
plaintiff and her brother
Benigno Bito-on. What
seems apparent is that
Benigno
Bito-on
was
gratuitously allowed to
utilize the land to help
him in financing the
schooling of his children.
Whether the transaction is
one of usufruct, which
right may be leased or
alienated,
or
one
of
commodatum, which is
purely
personal
in
character, the beneficiary
has the obligation to
return the property upon
the expiration of the
period
stipulated,
or
accomplishment of the
purpose for, which it was
constituted (Art. 612, Art.
1946,
Civil
Code).
Accordingly, it is believed
that one who derives his

right
from
the
usufructuary/bailee,
cannot refuse to return
the property upon the
expiration of the contract.
In this case, Benigno Bitoon returned the property
lent to him on May 13,
1985 to the owners, the
plaintiff herein. We do not
see how the defendant
can have a better right to
the property than Benigno
Bito-on, who admittedly
possessed the land for a
limited period. There is no
privity
of
contract
between the owner of the
land and the cultivator. 1
At this point, it is appropriate to point
out that, contrary to the appreciation
of the respondent appellate court, the
general
law
on
property
and
contracts, embodied in the Civil Code
of the Philippines, finds no principal
application on the present conflict.
Generalibus specialia derogant. The
environmental facts of the case at bar
indicate that this is not a mere case of
recovery of ownership or possession
of property. Had this been so, then
the Court would have peremptorily
dismissed the present petition. The
fact,
however,
that
cultivated
agricultural land is involved suffices
for the Court to pause and review the
legislation
directly
relevant and
applicable at the time this controversy
arose.
In this regard, it would appear that
Republic Act No. 1199, invoked by the
trial court, had already been rendered
inoperative by the passage of
Republic Act No. 3844, as amended,
otherwise known as the Agricultural
Land Reform Code (Code, for brevity).
The former, also known as the
Agricultural Tenancy Act of the
Philippines and approved in August
1954 had sought to establish a system
of agricultural tenancy relations
between
the
tenant
and
the
landholder, defining two (2) systems
of agricultural tenancy: the share and
the leasehold tenancy. At this point,
however, further discussion of the

foregoing would appear futile, for the


Code, enacted in August, 1963, had
expressly declared agricultural share
tenancy to be contrary to public policy
and abolished the same. As for
leasehold tenancy relations entered
into prior to the effectivity of the
Code, the rights and obligations
arising therefrom were deemed to
continue to exist until modified by the
parties thereto in accordance with the
provisions of the Code. 2 Thus, for all
intents and purposes, Republic Act
No. 3844 is the governing statute in
the petition at bar. The pertinent
provisions therefore state as follows:
Sec. 5. Establishment of
Agricultural
Leasehold
Relations.

The
agricultural
leasehold
relation
shall
be
established by operation
of law in accordance with
Section four of this Code
and, in other, cases, either
orally
or
in
writing,
expressly or impliedly.
Sec.
6.
Parties
to
Agricultural
Leasehold
Relation.

The
agricultural
leasehold
relation shall be limited to
the person who furnishes
the landholding, either as
owner, civil law lessee,
usufructuary,
or
legal
possessor, and the person
who personally cultivates
the
same.
(emphasis
supplied).
Sec.
7.
Tenure
of
Agricultural
Leasehold
Relation.

The
Agricultural
Leasehold
Relation once established
shall confer upon the
agricultural lessee the
right to continue working
on the landholding until
such
leasehold
relationship
is
extinguished.
The
agricultural lessee shall be
entitled to security of
tenure on his landholding

and cannot be ejected


therefrom
unless
authorized by the Court
for
causes
herein
provided.
(emphasis
supplied)
Sec. 8. Extinguishment of
Agricultural Leasehold
Relation.

The
agricultural
leasehold
relation established under
this
Code
shall
be
extinguished by:
(1) Abandonment of the
landholding without the
knowledge
of
the
agricultural lessor;
(2) Voluntary surrender of
the landholding by the
agricultural lessee, written
notice of which shall be
served three months in
advance; or
(3)
Absence
of
the
persons under Section
nine to succeed to the
lessee in the event of
death
of
permanent
incapacity of the lessee.
xxx xxx xxx
Sec.
10.
Agricultural
Leasehold Relation Not
Extinguished by Expiration
of Period, etc. The
agricultural
leasehold
relation under this Code
shall not be extinguished
by mere expiration of the
term or period in a
leasehold contract nor by
the sale, alienation or
transfer of the legal
possession
of
the
landholding. In case the
agricultural lessor sells,
alienates or transfers the
legal possession of the
landholding,
the
purchaser or transferee
thereof
shall
be
subrogated to the rights
and substituted to the

obligations
of
agricultural lessor.

the

xxx xxx xxx


Sec. 36. Possession of
Landholding; Exceptions.
Notwithstanding any
agreement as to the
period or future surrender
of the land, an agricultural
lessee shall continue in
the
enjoyment
and
possession
of
his
landholding except when
his
dispossession
has
been authorized by the
Court in a judgment that
is final and executory if
after due hearing it is
shown that:
(1) The agricultural lessorowner or a member of his
immediate
family
will
personally cultivate the
landholding or will convert
the landholding, if suitably
located, into residential,
factory, hospital or school
site or other useful nonagricultural
purposes:
Provided,
That
the
agricultural lessee shall,
be entitled to disturbance
compensation equivalent
to five years rental on his
landholding in addition to
his rights under Sections
twenty-five and thirty-four,
except when the land
owned and leased by the
agricultural lessor is not
more than five hectares,
in which case instead of
disturbance compensation
the lessee may be entitled
to an advanced notice of
at least one agricultural
year before ejectment
proceedings
are
filed
against him: Provided,
further, That should the
landholder not cultivate
the land himself for three
years
or
fail
to
substantially carry out
such conversion within

one
year
after
the
dispossession
of
the
tenant,
it
shall
be
presumed that he acted in
bad faith and the tenant
shall have the right to
demand possession of the
land
and
recover
damages for any loss
incurred by him because
of said dispossession; 3
(2) the agricultural lessee
failed
to
substantially
comply with any of the
terms and conditions of
the contract or any of the
provisions of this Code
unless
his
failure
is
caused
by
fortuitous
event or force majeure:
(3) the agricultural lessee
planted crops or used the
landholding for a purpose
other than what had been
previously agreed upon;
(4) the agricultural lessee
failed to adopt proven
farm
practices
as
determined
under
paragraph 3 of Section
twenty-nine;
(5) the land or other
substantial
permanent
improvement thereon is
substantially damaged or
destroyed
or
has
unreasonably deteriorated
through
the
fault
or
negligence
of
the
agricultural lessee;
(6) the agricultural lessee
does not pay the lease
rental when it falls due:
Provided, That if the
nonpayment of the rental
shall be due to crop
failure to the extent of
seventy-five per centum
as a result of a fortuitous
event, the non-payment
shall not be a rental due
that particular crop year,

is
not
extinguished; or

thereby

(7) the lessee employed a


sub-lessee
on
his
landholding in violation of
the terms of paragraph 2
of Section twenty seven.

Act. No. 3844, as amended, for


termination of the agricultural lease
relation,
have
supervened,
and
therefore
Bernas' right
to the
possession of the property remains
indisputable.
This
conclusion
is
buttressed by Sec. 37 of the Code
which provides that:

Sec. 37. Burden of Proof.


The burden of proof to
show the existence of a
lawful cause for the
ejectment
of
an
agricultural lessee shall
rest upon the agricultural
lessor.

Sec. 37. Burden of Proof.


The burden of proof to
show the existence of a
lawful cause for the
ejectment
of
an
agricultural lessee shall
rest upon the agricultural
lessor.

There is no dispute, as it is admitted


by the parties in this case, that
Benigno
Bito-on
was
granted
possession of the property in question
by reason of the liberality of his sister,
Natividad (the private respondent). In
short, he (Benigno) was the LEGAL
POSSESSOR of the property and, as
such, he had the authority and
capacity to enter into an agricultural
leasehold
relation
with
Bernas.
Consequently, there is no need to
dwell on the contentions of the
private respondent that, her brother
Benigno was not a usufructuary of the
property but actually a bailee in
commodatum. Whatever was the true
nature
of
his
designation,
he
(Benigno) was the LEGAL POSSESSOR
of the property and the law expressly
grants him, as legal possessor,
authority and capacity to institute an
agricultural leasehold lessee on the
property he legally possessed.

As to any suggestion that the


agricultural lease of Bernas may have
terminated because the landowner
(Natividad) has decided to cultivate
the land herself, we submit that this
Court is not in a position to settle this
issue in this case, not only because of
insufficient evidence to determine
whether or not, the grounds provided
by law for termination of the
agricultural leasehold relation are
present
but,
more
importantly,
because the issue of termination of
the agricultural leasehold relationship
by reason of the landowner's alleged
decision to till the land herself, was
not squarely raised nor adequately
litigated in the trial court. 4 It will be
noted that while Natividad in her
complaint with the court a quo
alleged, among others, that "on 20
May 1985, the plaintiffs spouses were
already in the process of taking over
the land by employing a tractor
operator to commence plowing the
land," this allegation was denied by
Bernas in his answer. But the main
thrust of Natividad's complaint was
that she had no privity with Bernas
and that the latter should vacate the
land because Benigno (from whom
Bernas had received his right to
possess) had himself ceased to have
any rights to the land. Faced with
these allegations, the court a quo in
its pre-trial order dated 9 September
1985 formulated the issues in this
case, without objection from the
parties, as follows:

In turn, having been instituted by


Benigno as an agricultural leasehold
lessee, Bernas is vested by law with
the rights accruing thereto, including
the right to continue working the
landholding until such lease is legally
extinguished, and the right to be
protected in his tenure i. e., not to be
ejected from the land, save for the
causes provided by law, and as
appropriately determined by the
courts. In this connection, there is no
clear indication in the record that the
circumstances
or
conditions
envisioned in Section 36 of Republic

ISSUES
1.
Is
defendant
an
agricultural
leasehold
lessee of the parcels of
land described in the
Complaint?
2. Whether the parties are
entitled
to
damages
claims by them in their
respective pleadings.
In short, the parties went to trial on
the merits on the basis of the
foregoing issues. Private respondent
did not object to the above issues as
formulated; neither can it be plausibly
contended now that the first issue
(i.e. whether Bernas is an agricultural
leasehold lessee) embraces the issue
of whether Natividad has validly
terminated the agricultural leasehold
because of a decision to cultivate the
land herself, since under sec. 36(1) of
the Code (before its amendment by
Section 7 of Rep. Act No. 6389), the
landowner's right to take over
possession of his land for personal
cultivation ASSUMES that it is under a
valid and subsisting agricultural
leasehold and he must obtain an
order from the court to dispossess the
agricultural leasehold lessee who
otherwise is entitled to continued use
and possession of the landholding. In
other words, if Natividad had really
intended to raise as an issue that she
had
validly
terminated
Bernas'
agricultural leasehold, she or her
counsel could have expressly included
among the issues for determination
the question of whether or not she
had complied with the requirements
of the law for dispossessing the
agricultural leasehold lessee because
she, as landowner, had decided to
personally cultivate the landholding.
But she did not.
The trial court in its decision dated 20
October 1987 (latter appealed to the
Court of Appeals) held (consistent
with the formulated issues in the
case) that
xxx xxx xxx

As to issues, parties
presented only two (2)
issues and which are:
1.
Whether
or
not
defendant
is
an
agricultural
leasehold
lessee of the parcels of
land described in the
complaint;
2. Whether the parties are
entitled
to
damages
claimed by them in their
respective pleadings.
(Pre-Trial
Order
dated
September 9, 1985, p. 41
records)
and finally disposed as
follows:
From
the
above
discussions, this Court
opines that defendant was
a share tenant on the
parcels of land subject of
the complaint, and an
agricultural
leasehold
lessee
under
the
provisions
of
the
Agricultural Land Reform
Code as amended by
Presidential Decrees on
the matter.
No damages as damages
were
proved
or
established by evidence
by the defendant.
WHEREFORE, and in view
of
the
above
considerations, a decision
is rendered dismissing
plaintiffs complaint, and
declaring defendant as
the agricultural leasehold
lessee on Lot Nos. 794,
801, 840 and 848 of the
Cadastral
Survey
of
Panay, Capiz, with an area
of 5,831 square meters,
situated at Calitan, Panay,
Capiz, with security of
tenure as an Agricultural
Leasehold Lessee thereof;

and plaintiffs to pay the


costs of the suit.
In the Court of Appeals, the litigated
issue was
xxx xxx xxx
The
legal
issue
that
presents itself is whether
the agricultural leasehold
established by Benigno
Bito-on was binding upon
the owner of the land,
plaintiff Natividad Bito-on,
who disclaims knowledge
of any arrangement with
defendant Bernas. The
lower court held that the
"dugo" arrangement was
in the nature of usufruct,
and that the act of the
usufructuary
as
legal
possessor was sufficient
to
establish
tenancy
relations.
xxx xxx xxx

The long settled rule in this


jurisdiction is that a party is not
allowed to change his theory of the
case or his cause of action on appeal.
6
We have previously held that "courts
of justice have no jurisdiction or
power to decide question not in issue"
7
and that a judgment going outside
the
issues
and
purporting
to
adjudicate something upon which the
parties were not heard is not merely
irregular, but extrajudicial and invalid.
8
The rule is based on the
fundamental tenets of fair play and, in
the present case, the Court is properly
compelled not to go beyond the issue
litigated in the court a quo and in the
Court of Appeals of whether or not the
petitioner, Graciano Bernas, is an
agricultural leasehold lessee by virtue
of his installation as such by Benigno
Bito-on, the legal possessor of the
landholding at the time Bernas was so
installed and, consequently entitled to
security of tenure on the land. Should
grounds for the dispossession of
Bernas, as an agricultural leasehold
lessee, subsequently arise, then and
only then can the private respondent

(land owner) initiate a separate action


to dispossess the lessee, and in that
separate action, she must allege and
prove compliance with Sec. 36(1) of
the Code which consist of, among
others, a one year advance notice to
the agricultural leasehold lessee (the
land involved being less than 5
hectares) and readiness to pay him
the damages required also by the
Code.
The issue of whether or not Bernas
planted crops or used the land in a
manner contrary to what was agreed
upon between Natividad and Benigno,
and thereby constituting a ground for
terminating the leasehold relationship
under Sec. 36, par. 3 of Rep. Act No.
3844 likewise cannot be passed upon
by this Court since the issue was
never raised before the courts below.
Furthermore, there is no showing that
Natividad and Benigno agreed that
only certain types of crops could be
planted on the land. What is clear is,
that the "dugo" arrangement was
made so that Benigno could use the
produce of the land to provide for the
schooling of his children. The alleged
conversion by Bernas of the land to
riceland was made necessary for the
land to produce more and thus meet
the needs of Benigno. It was
consistent with the purpose of making
the land more productive that
Benigno installed an agricultural
lessee. It may be recalled that when
Natividad called on Benigno to testify
as a witness, he stated that the
produce of the land was given to him
by Bernas to defray the expenses of
his children (p. 3, trial court decision).
The inevitable conclusion is therefore
not that there was use of the land
different from the purpose for which it
was allegedly intended by Natividad
and Benigno but rather that the
installation of the agricultural lessee
was made necessary so that the land
could produce more to better serve
the
needs
of
the
beneficiary
(Benigno).
Additionally, it can be stated that the
agricultural leasehold relationship in
this case was created between
Benigno as agricultural lessor-legal

possessor, on the one hand, and


Bernas as agricultural leasehold
lessee, on the other. The agricultural
leasehold
relationship
was
not
between Natividad and Bernas. As
Sec. 6 of the Code states:
Sec.
6.
Parties
to
Agricultural
Leasehold
Relations.

The
agricultural
leasehold
relations shall be limited
to
the
person
who
furnishes the landholding,
either as owner, civil law
lessee, usufructuary, or
legal possessor, and the
person who personally
cultivates
the
same.
(emphasis supplied)
There was, as admitted by all, no
privity or tie between Natividad and
Bernas. Therefore, even if Bernas had
improperly used the lots as ricelands,
it was Benigno who could have
objected thereto since it was his (the
legal possessor's) landholding that
was being "improperly" used. But he
(Benigno) did not. It is not for
Natividad (as landowner) to now
complain that Bernas used the land
"for a purpose other than what had
been previously agreed upon." Bernas
had no agreement with her as to the
purpose for which the land was to be
used. That they were converted into
ricelands
(also
for
agricultural
production) can only mean that the
same (conversion) was approved by
Benigno (the undisputed agricultural
lessor-legal possessor). It is thus clear
that sec. 36, par 3 of the Code cannot
be used to eject Bernas.
The Court, must, in our view, keep in
mind the policy of the State embodied
in the fundamental law and in several
special
statutes,
of
promoting
economic and social stability in the
countryside by vesting the actual
tillers and cultivators of the soil, with
rights to the continued use and
enjoyment of their landholdings until
they are validly dispossessed in
accordance with law. At this stage in
the country's land reform program,
the agricultural lessee's right to

security of tenure must be "firmedup" and not negated by inferences


from facts not clearly established in
the record nor litigated in the courts
below. Hand in hand with diffusion of
ownership over agricultural lands, it is
sound public policy to encourage and
endorse a diffusion of agricultural
land use in favor of the actual tillers
and cultivators of the soil. It is one
effective way in the development of a
strong and independent middle-class
in society.
In confirmation we believe of the
foregoing views, Section 36 of Rep.
Act No. 3844 (the Code) was
expressly amended by Section 7 of
Rep. Act No. 6389 which replaced
paragraph 1, Section 36 of the Code
providing for personal cultivation by
the landowner as a ground for
ejectment or dispossession of the
agricultural leasehold lessee with the
following provision:
Sec. 7. Section 36 (1) of the same
Code is hereby amended to read as
follows:
(1) The landholding is
declared
by
the
department head upon
recommendation of the
National
Planning
Commission to be suited
for
residential,
commercial, industrial or
some
other
urban
purposes: Provided, That
the agricultural lessee
shall
be
entitled
to
disturbance compensation
equivalent to five times
the average of the gross
harvest of his landholding
during
the
last
five
preceding calendar years;
While it is true that in the case of
Ancheta vs. Court of Appeals, 200
SCRA 407, the Court, stated that:
It is well settled that RA
6389,
which
removed
personal cultivation as a
ground for ejectment of
tenant/lessee, cannot be

given retroactive effect in


the absence of statutory
provision for retroactivity
or a clear implication of
the law to that effect.
however, Rep. Act No. 6389 was
approved on 10 September 1971. 9
The complaint in this case was filed
on 21 June 1985 or long after the
approval of Rep. Act No. 6389. By
reason of the provision therein
eliminating personal cultivation by the
landowner as a ground for ejectment
or dispossession of the agricultural
leasehold lessee, any issue of whether
or not the Court of Appeals decision
should
nonetheless
be affirmed
because the landowner had shown
her intention or decided to personally
cultivate the land (assuming without
admitting that the issue was properly
raised before the trial court), had in
fact become moot and academic
(even before it was hypothetically
raised). The issued had been resolved
by legislation unmistakably against
the landowner.
It may of course he argued that "she
(Natividad) did not authorize her
brother (Benigno) to install a tenant
thereon." (TSN, 13 February 1986, p.
6).
Even if there was a lack of
authorization (from Natividad) for
Benigno to install a tenant, it still
follows, in our view, that Benigno as
legal possessor of the landholding,
could install an agricultural lessee on
the landholding. For, as defined in
Section 166 (3) of the Code, an
agricultural lessor 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. Nothing in said
section, it will be noted, requires that
the civil law lessee, usufructuary or
legal possessor should have the prior
authorization of the landowner in
order to let or grant to another the
cultivation or use of the landholding.
Another question comes up; did
Natividad expressly prohibit Benigno

from installing a tenant on the land?


Nothing in the evidence shows that
Benigno was expressly prohibited by
Natividad from installing a tenant on
the landholding. And even if there was
an express prohibition on the part of
Natividad (landowner) for Benigno not
to install an agricultural leasehold
lessee, it is to be noted that any such
arrangement (prohibition) was solely
between Natividad and Benigno.
There is no evidence to show that
Bernas was aware or informed of any
such arrangement between Natividad
and Benigno. Neither was such
arrangement (prohibition), if any,
recorded in the registry of deeds to
serve as notice to third persons (as
Bernas) and to the whole world for
that matter. Consequently, if there
was indeed such a prohibition (which
is not borne out by the records)
imposed by Natividad on Benigno, a
violation thereof may give rise to a
cause of action for Natividad against
Benigno but Bernas is no less an
agricultural leasehold lessee, for the
law (Section 166 (2) of the Code)
defines an agricultural lessee as a
person who by himself and with the
help available from within his
immediate farm household cultivates
the land belonging to or possessed by
another (in this case Benigno) with
the latter's consent for purposes of
production for a price certain in
money or in produce or both.
Ponce vs. Guevarra, L-19629 and L19672-92, 31 March 1954 (10 SCRA
649) provides dramatic support to the
security of tenure of Bernas in the
case at bar. In the Ponce case, the
owner (Ponce) had leased his
agricultural land to Donato (the
lessee) for a stipulated period with a
provision in the lease contract
prohibiting Donato from sub-leasing
the land without the written consent
of the owner (Ponce). Notwithstanding
these "express prohibition", Donato
sub-leased the land without the
consent of Ponce (the owner). When
the lease contract expired, Donato
returned the land to Ponce but the
sub-lessees (tenants) refused to
vacate, claiming security of' tenure
under
the
tenancy
laws
then

enforced. One of the contentions of


Ponce (the owner) in seeking to
dispossess the sub-lessees (tenants)
was that these tenants entered into
possession of the land under a
violation of the lease contract by
Donato (the lessee).
Over-ruling the above contention, this
Court held:
It
is
true
that
the
subleasing of said land to
respondents
herein
(tenants)
without
the
written consent of the
petitioner
(owner),
constituted a violation of
the original contract of
lease. The breach of
contract was committed,
however, by Donato (the
lessee), . . . .
Of course, in the same Ponce
case, the Court observed that
Ponce
renewed
his
lease
contract for another year with
Donato, knowing at the time of
such renewal that the land had
been sub-leased to the tenants,
thereby injecting the principle of
estoppel against Ponce vis-a-vis
the tenants. But, as we view it,
the ratio decidendi in the
Court's decision is to the effect
that the sub-lessees (tenants)
were entitled to security of
tenure on the land they were
cultivating, notwithstanding the
undisputed
fact
that
they
became sub-lessees (tenants) of
the land as a result of a
violation by the lessee (Donato)
of an express provision in the
lease contract prohibiting him
from sub-leasing the land.
What more in the case of Bernas
whose right to security of tenure as
an agricultural leasehold lessee is
conferred and protected categorically,
positively
and
clearly
by
the
provisions of the Code (Republic Act.
3844)?
It is of course possible to construe
Sec. 6 of the Code which provides:

SEC
6.
Parties
to
Agricultural
Leasehold
Relations.

The
agricultural
leasehold
relation shall be limited to
the person who furnishes
the landholding, either as
owner, civil law lessee,
usufructuary,
or
legal
possessor, and the person
who personally cultivates
the
same.
(emphasis
supplied).
in the following manner:
. . . it assumes that there
is already an existing
agricultural
leasehold
relation, i.e. a tenant or
agricultural lessee already
works the land. As may be
gleaned
from
the
epigraph of Sec. 6, it
merely states who are
"Parties to Agricultural
Leasehold
Relations,"
which means that there is
already a leasehold tenant
on the land. But this is
precisely what We are still
asked to determine in
these
proceedings.
(dissenting opinion, p.
11.)
It would appear from the above
interpretation of Sec. 6 of the Code
that in the absence of a judicial
determination or declaration of an
agricultural leasehold relation, such
relation does not or cannot even exist.
We view this posture as incorrect for
an agricultural leasehold relationship
exists by operation of law when there
is a concurrence of an agricultural
lessor and an agricultural lessee. As
clearly stated in Section 5 of the code.
Sec. 5. Establishment of
Agricultural
Leasehold
Relations.

The
agricultural
leasehold
relation
shall
be
established by operation
of law in accordance with
Section four of this Code
and, in other cases, either

orally
or
in
writing,
expressly or impliedly.
In other words, in the case at bar,
from the moment Benigno, as legal
possessor
(and,
therefore,
an
agricultural
lessor)
granted
this
cultivation and use of the landholding
to
Bernas
in
exchange
or
consideration for a sharing in the
harvest, an agricultural leasehold
relationship emerged between them
"by operation of law".
The fact that the transfer from
Natividad to Benigno was gratuitous,
we believe, is of no consequence as
far as the nature and status of
Benigno's
possession
of
the
landholding is concerned. He became
the legal possessor thereof from the
viewpoint of the Code. And as legal
possessor, he had the right and
authority, also under the Code, to
install or institute an agricultural
leasehold lessee on his landholding,
which was exactly what he did, i.e.
install Bernas as an agricultural
leasehold lessee.
The argument that Benigno's (and
consequently, Bernas') possession
was meant to last for a limited period
only, may appeal to logic, but it finds
no support in the Code which has its
own underlying public policy to
promote. For Section 7 of the Code
provides:
Sec.
7.
Tenure
of
Agricultural
Leasehold
Relation.

The
Agricultural
Leasehold
Relation once established
shall confer upon the
agricultural lessee the
right to continue working
on the landholding until
such
leasehold
relationship
is
extinguished.
The
agricultural lessee shall
be entitled to security of
tenure on his landholding
and cannot be ejected
therefrom
unless
authorized
herein-

provided.
supplied)

(emphasis

while Section 10 of the Code


provides:
Sec.
10.
Agricultural
Leasehold Relation Not
Extinguished by Expiration
of Period, etc. The
agricultural
leasehold
relation under this Code
shall not be extinguished
by mere expiration of the
term or period in a
leasehold contract nor by
the sale, alienation or
transfer
of
the
legal
possession
of
the
landholding. In case the
agricultural lessor. sells,
alienates or transfers the
legal possession of the
landholding,
the
purchaser or transferee
thereof
shall
be
subrogated to the rights
and substituted to the
obligations
of
the
agricultural
lessor.
(emphasis supplied).
and Section 36 of the
Code provides:
Possession
of
Landholding; Exceptions.
Notwithstanding any
agreement as to the
period or future surrender
of the land, an agricultural
lessee shall continue in
the
enjoyment
and
possession
of
his
landholding
. . . . (emphasis supplied)
Clearly the return of legal possession
from Benigno to Natividad cannot
prejudice the rights of Bernas as an
agricultural leasehold lessee. The
grounds
for
ejectment
of
an
agricultural leasehold lessee are
provided for by law. The enumeration
is exclusive and no other grounds can
justify termination of the lease. The
policy and letter of the law are clear
on this point. The relatively small area

of
the
agricultural
landholding
involved (a little over half a hectare)
would appear, in our view, to be of no
consequence in this case. Here, the
issue is not how much area may be
retained in ownership by the land
owner Natividad but the issue is
whether Bernas is a duly constituted
agricultural leasehold lessee of the
agricultural landholding (regardless of
its area) and entitled to security of
tenure therein. And, as abundantly
shown, the Code is definitely and
clearly on his side of this issue.
It should be pointed out that the
report and recommendation of the
investigating officer of the Ministry of
Agrarian Reform (MAR) finding that
Bernas is not an agricultural leasehold
should deserve little consideration. It
should be stressed, in this connection,
that said report and recommendation
is congenitally defective because
a. it was based solely on the evidence
presented by Natividad, Bernas did
not participate in said investigation.
b. the findings in the report are not
supported by law or jurisprudence but
are
merely
the
opinion
and
conclusions of the investigator whose
knowledge of the Code and the case
Law appears to be sadly inadequate.
c. whether or not an agricultural
leasehold relation exists in any case is
basically a question of law and cannot
be left to the determination or opinion
of a MAR-investigator on the basis of
one-sided evidence.
This Court has ruled in Qua v. Court of
Appeals, 198 SCRA 236 that
. . . as regards relations
between litigants in land
cases, the findings and
conclusions
of
the
Secretary
of
Agrarian
Reform, being preliminary
in nature, are not in any
way binding on the trial
courts
which
must
endeavor to arrive at their
own
independent
conclusions.

The ruling finds support in the


case of Graza v. CA (163 SCRA
39) citing Section 12 of PD No.
946 expressly stating that "the
preliminary determination of the
relationship
between
the
contending parties by the
Secretary of Agrarian Reform or
his authorized representative, is
not binding upon the court,
judge or hearing officer to
whom the case is certified as a
proper case for trial. Said court,
judge or hearing officer, after
hearing, may confirm, reverse
or modify said preliminary
determination as the evidence
and substantial merits of the
case may warrant." The court a
quo in the case at bar tried the
case on the merits, receiving
the evidence of both parties and
arrived at a conclusion different
from
that
of
the
MAR
investigator. It is to be noted
that even the Court of Appeals
(which decided for Natividad)
found no use for the MAR
investigator's
report
and
recommendation, for obvious
reasons. It is clear that the
question of the existence of an
agricultural
leasehold
relationship is a question of law
which is properly within the
province of the courts.
The certification of the President of
the Agrarian Reform Beneficiaries
Association, Panay chapter "issued
upon the request of Mrs. Deita"
(meaning Natividad) that Bernas is
not in the masterlist of tenants,
should likewise be disregarded. Since
when, it may be noted, was the legal
question of agricultural leasehold
relationship made to depend on a
certification of such an association's
president?
The argument, that Bernas is not a
lawful tenant of Natividad based on
the doctrine in the case of Lastimoza
v. Blanco (1 SCRA 231) is also not
correct. The cited case does not
support the desired conclusion. In the
Lastimoza case, a certain Nestor
Panada had an oral contract of

tenancy with a certain Gallego who


was then in possession of the parcel
of land. The latter however was
ejected after the Court of First
Instance ruled in a land registration
proceeding that it was Lastimoza who
was the true owner of the land. The
Court in effect ruled that Gallego was
an unlawful possessor and thus
Panada cannot be a lawful tenant. The
factual background of the Lastimoza
case and the present Bernas case are
totally different; the first case cannot
be applied to the second. When
Bernas was instituted by Benigno as
an agricultural lessee, Benigno was a
legal possessor of the landholding in
question. No one can dispute this.
The dissenting opinion states that
". . . it is not correct to say that every
legal possessor, be he a usufructuary,
or a bailee, is authorized as a matter
of right to employ a tenant. His
possession
can
be
limited
by
agreement of the parties or by
operation of law." (p. 13) Even
assuming arguendo that this is a
correct legal statement, there is
absolutely no showing that the
possession of Benigno was limited by
his agreement with Natividad (as to
prohibit him from instituting a tenant)
or by operation of law; and because
there is a total failure to disprove and
even dispute that Benigno was a legal
possessor at the time Bernas was
installed by him as an agricultural
lessee, then Bernas validly became an
agricultural leasehold lessee of the
land and is protected by the law from
ejectment except for causes specified
therein.
Finally, in relation to the dissenting
opinion, it may be wise to repeat the
statement of the Court in Jose D. Lina,
Jr. vs. Isidro Cario (G.R. No. 100127,
23 April 1993) thus
The Court believes that
petitioner's argument
cogent though it may be
as a social and economic
comment is most
appropriately addressed,
not to a court which must
take the law as it is

actually
written,
but
rather to the legislative
authority which can, if it
wishes,
change
the
language and content of
the
law.
(emphasis
supplied)
In the case at bar, the language,
policy and intent of the law are clear;
this Court cannot interpose its own
views as to alter them. That would be
judicial legislation.
WHEREFORE the petition is GRANTED.
The decision of the respondent
appellate court, is REVERSED and SET
ASIDE and that of the Regional Trial
Court. REINSTATED. Costs against the
private respondent.
SO ORDERED.
Cruz, Bidin, Grio-Aquino, Regalado,
Romero, Nocon and Quiason, JJ.,
concur.
Puno and Vitug, JJ. took no part.

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 98028 January 27, 1992


GREGORIO CASTILLO, petitioner,
vs.
COURT OF APPEALS and ALBERTO
IGNACIO, respondents.
Sumulong Law Offices for petitioner.
Bureau of Agrarian Legal Assistance
for private respondent.

GUTIERREZ, JR., J.:


This is a petition for review of the
Court of Appeals decision which
reversed and set aside the decision of
the Regional Trial Court in Civil Case
No. 8302-M and declared respondent
Alberto Ignacio as agricultural tenant
of the petitioner.
On July 18, 1985, a complaint for
injunction was filed by private
respondent Alberto Ignacio against
petitioner Gregorio Castillo with the
Regional Trial Court of Malolos,
Bulacan.
It is alleged in the complaint that the
respondent is the agricultural tenant
of the petitioner in the latter's parcel
of land consisting of 9,920 square
meters
with
fruit-bearing
trees

situated in Cut-cut, Pulilan, Bulacan;


that sometime in April 1985, the
petitioner requested the respondent
to allow him to construct a resthouse
in said land, and as a token of
goodwill, the respondent agreed,
which agreement is embodied in a
"Kasunduan" (Exhibit "C") between
them; that in violation of said
agreement, the petitioner started to
cut fruit-bearing trees on the land in
question and filled with adobe stones
the area devoted by the private
respondent to
the planting
of
vegetables.
The complaint asked for the issuance
of a writ of preliminary injunction to
enjoin the petitioner from further
cutting fruit-bearing trees and from
committing
further
acts
of
dispossession against the private
respondent.
The
injunction
was
granted.
The petitioner, on the other hand,
contends that the private respondent
is not his agricultural tenant; that
respondent Alberto Ignacio is merely
a "magsisiga" (smudger) of the
landholding in question; that he did
not ask permission from the private
respondent to construct a rest house
on subject land, since as owner
thereof, he had the right to do so; that
he was merely exercising his right of
ownership when he cut certain trees
in the subject premises; that when the
barangay captain failed to settle the
conflict and the matter was referred
to the MAR-BALA (Ministry of Agrarian
Reform-Bureau of Agrarian Legal
Assistance) Office in Malolos, Bulacan,
Atty. Benjamin Yambao of the MAR
(Ministry
of
Agrarian
Reform)
prepared the "Kasunduan" attached to
the respondent's complaint, but when
he (petitioner) said that he had some
misgivings about some words therein,
Atty. Yambao assured him that he
need
not
worry
because
the
respondent could not be a "kasamang
magsasaka" of his mango land
because there is nothing to cultivate
or till in said land, but he still
corrected the last part of par. 4 of said
"Kasunduan" by making it read "sa

kanilang matiwasay na kaugnayan"


before signing the same.

but
by
evidence.

On September 28, 1988, the trial


court rendered judgment declaring
that no tenancy relationship exists
between the petitioner and the
private respondent. The dispositive
portion of the decision reads as
follows:

II

WHEREFORE,
premises
considered, judgment is
hereby rendered:
a) dismissing the aboveentitled case, with costs
against the plaintiff;
b) lifting the preliminary
injunction
issued
on
September 18, 1985 and
declaring the same legally
inefficacious henceforth;
and
c) directing the plaintiff no
pay unto the defendant
the amount of P10,000.00
as and for attorney's fees.
From the above decision, the private
respondent appealed to the Court of
Appeals which reversed and set aside
the decision of the trial court. The
respondent appellate court declared
that
there
exists
a
tenancy
relationship between Alberto Ignacio
and
Gregorio
Castillo
and
permanently enjoined the latter from
disturbing the respondent's peaceful
possession as tenant of said land.
Hence, the instant petition was filed,
with the petitioner assigning the
following errors as the issues raised to
us:
I
The Court of Appeals
(Fourth
Division)
committed
clear
and
patent error in reversing
the
decision
of
the
Regional Trial Court which
is fully supported not only
by substantial evidence

overwhelming

The Court of Appeals


committed
clear
and
reversible error and grave
abuse of discretion in
declaring
that
"the
relationship
between
plaintiff-appellant
and
defendant-appellee over
the
mango
land
in
question
as
one
of
agricultural
tenancy"
despite the patent judicial
admission of respondent
Ignacio that he is merely a
"magsisiga" of the mango
land under litigation.
III
The Court of Appeals
committed grave abuse of
discretion in permanently
enjoining petitioner "from
disturbing
plaintiffappellant's
peaceful
possession as tenant of
said
land,"
although
private respondent is not
in physical possession of
the
land,
respondent
Ignacio being merely and
admittedly a "magsisiga"
of the mango land in
question.
IV
The Court of Appeals
committed
clear
and
patent
error
in
not
ordering the termination
of
any
and
all
relationships
between
petitioner
and
private
respondent,
the
latter
having failed to perform
the work of "magsisiga"
on the subject parcel of
land and instead he
obstructs the driveway by
scattering rubbish, dry
leaves, dirt and other
rubbish, preventing the

petitioner
from
proceeding
to
the
premises of the land by
putting up a barb wire
fence which are acts of
harrassment,
disturbing
the peaceful possession of
petitioner and which acts
are
inimical
to
the
continuation of any kind
of relationship between
Gregorio
Castillo
and
Alberto Ignacio.
The issue to be resolved in the
present petition is whether or not a
tenancy relationship exists between
the parties.
The Agricultural Tenancy Act defines
"agricultural tenancy" as
.
.
.
the
physical
possession by a person of
a
land
devoted
to
agriculture belonging to or
legally
possessed
by,
another for the purpose of
production through the
labor of the former and of
the
members
of
his
immediate
farm
household,
in
consideration of which the
former agrees to share
the harvest with the latter,
or to pay a price certain,
either in produce or in
money, or in both. (Sec. 3,
R.A. No. 1199; 50 O.G.
4655-56).
As held in the case of Qua v. Court of
Appeals (198 SCRA 236 [1991]), the
essential
requisites
of
tenancy
relationship are: (1) the parties are
the landowner and the tenant; (2) the
subject is agricultural land; (3) the
purpose is agricultural production; (4)
there is consideration which consist of
sharing the harvest; (5) there is
consent to the tenant to work on the
land and (6) there is personal
cultivation by him.
From the foregoing definition, the
petitioner insists that for a person to
claim tenancy relationship, he must

be an occupant or must be in physical


possession of the agricultural land. He
alleges that, Alberto Ignacio, being a
mere smudger (magsisiga) of the
mango land, no tenancy relationship
can exist between them absent the
element of physical possession.
In Gagola v. Court of Agrarian
Relations (18 SCRA 992 [1966]), the
Court held that a tenant has
possession of the land only through
personal cultivation. Thus, in the
instant case, the key factor in
ascertaining the existence of a
landowner-tenant
relationship
is
whether or not there is personal
cultivation of the land by the private
respondent.
The trial court noted that:
Let
alone
or
notwithstanding the use
of the phrase "kasamang
magsasaka"
in
the
Kasunduan (Exhibit C)
relied
upon
by
the
plaintiff,
there
is
no
dispute that the actual
role ever played by the
plaintiff vis-a-vis the land
in litigation was that of a
mere
"magsisiga"
(smudger).
Stated
differently, plaintiff has
never performed on the
property in question any
of the acts of cultivation
contemplated by the law
as
essential
to
the
creation of an agricultural
tenancy relationship. In
fine, it is the sense of the
Court that absent the
important
factor
of
cultivation, no tenancy
relationship
has
ever
existed
between
the
plaintiff
and
the
defendant
over
the
property involved in the
instant case. At most and
at best, the contractual
relationship
between
them was purely civil
nature consisting solely of
the seasonal engagement

of plaintiff's services as
"magsisiga"
or
"tagasuob."
On this matter, the appellate court
disagreed and noted instead that
personal cultivation by respondent
Ignacio of petitioner land is clearly
spelled out or admitted in the
"Kasunduan" (Exhibit "C") in view of
the aforementioned provision therein
that nobody except petitioner and the
members of his family could enter
said land without said petitioner's
written permission.
We agree with the trial court that the
element of personal cultivation is
absent. The main thrust of the
petitioner's argument is that the
respondent Court of Appeals is
mandated by law to affirm the
decision of the Regional Trial Court,
acting as an Agrarian Court, if the
findings of fact in said decision are
supported by substantial evidence
and the conclusions stated therein are
not clearly against the law and
jurisprudence. On the other hand, the
private respondent contends that the
findings of fact of the Court of Appeals
are final and conclusive on the parties
and on the Supreme Court.
After painstakingly going over the
records of the petition, we find no
strong and cogent reason which
justifies
the
appellate
court's
deviation from the findings and
conclusions of the trial court. As
pointed
out
in
Hernandez
v.
Intermediate Appellate Court (189
SCRA 758 [1990]), in agrarian cases,
all that is required is mere substantial
evidence. Hence, the agrarian court's
findings of fact which went beyond
the minimum evidentiary support
demanded by law, that is supported
by substantial evidence, are final and
conclusive and cannot be reversed by
the appellate tribunal.
Moreover, and as significantly held in
Qua v. Court of Appeals (supra), the
fact that the source of livelihood of
the private respondents is not derived
from the lots they are allegedly

tenanting is indicative of nonagricultural tenancy relationship.


Under the facts obtaining in the case,
respondent Ignacio is a businessman
by occupation and this is his principal
source of income. He manufacturers
hollow blocks. He also has a piggery
and poultry farm as well as a
hardware store on the land adjoining
the subject land. To add to that, the
respondent farms the riceland of one
Dr. Luis Santos. It is thus evident that
the working hours of the respondent
as a businessman and his other
activities do not permit him to
undertake the work and obligations of
a real tenant. This is further
supported by the undisputed fact that
the
respondent
cannot
even
personally perform the work of a
smudger because on October 22,
1986, the respondent hired some 20
people who are not members of his
family to cut and burn the grass in the
premises of the subject land.
Anent the element of consent, the
petitioner contends that the best
evidence and imperishable proof of
the relationship of the parties is that
shown in the complaint filed by
private respondent with the barangay
captain Tomas Mercado that he is a
mere "magsisiga" of the mango trees
on the subject parcel of land. On the
other hand, the respondent appellate
court said that the best proof of the
existence of tenancy relationship is
the "Kasunduan" (Exhibit "C") and
that under Section 7, Rule 130 of the
Revised Rules of Court, 'when the
subject of inquiry is the contents of a
document, no evidence shall be
admissible other than the original
document itself,' subject only to
certain exceptions. Inasmuch as
substantial evidence does not only
require the presence of a mere
scintilla of evidence (Berenguer, Jr. v.
CA, 164 SCRA 433 [1988] citing Ang
Tibay v. Court of Industrial Relations,
69 Phil. 635 [1940]), we rule that
there is no concrete evidence on
record sufficient to establish that the
element of consent is present. But
even assuming arguendo that the
element of consent is present, we

declared in De los Reyes v. Espineli


(30 SCRA 574 [1969]) that absent the
element of personal cultivation, one
cannot be a tenant even if he is so
designated in the written agreement
of the parties.
With respect to the requisite of
sharing the harvests, the respondent
appellate court considered the receipt
(Exhibit "E") signed by the petitioner's
son
Walderado
Castillo
as
its
evidence. On this point, the petitioner
has correctly argued that the receipt
is inadmissible on the ground that he
did not participate in its execution.
The maxim "res inter alios acta altere
nocere non debet," found in Section
28, Rule 130, Rules of Court applies,
for as stated in Gevero v. Intermediate
Appellant Court (189 SCRA 201
[1990]) the right of a party cannot be
prejudiced by an act, declaration, or
omission of another.
Also in pari materia is Caballes v.
Department of Agrarian Reform (168
SCRA 247 [1988]), that the fact of
sharing alone is not sufficient to
establish a tenancy relationship. Wellsettled is the rule that all the
requisites must concur in order to
create a tenancy relationship between
the parties and the absence of one or
more requisites do not make the
alleged tenant a de facto tenant as
contradistinguished from a de jure
tenant. This is so because unless a
person has established his status as a
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. (Qua v. Court of Appeals, supra
citing Tiongson v. Court of Appeals,
130 SCRA 482 [1984]).
However, with respect to the award of
attorney's fees by the trial court, the
award of P10,000.00 is unwarranted
since the action appears to have been
filed in good faith. There should be no
penalty on the right to litigate. (Ilocos
Norte Electric Company v. Court of
Appeals, 179 SCRA 5 [1989] citing
Espiritu v. Court of Appeals, 137 SCRA
50 [1985]).

WHEREFORE,
the
petition
is
GRANTED. The decision of the
respondent Court of Appeals is hereby
REVERSED and SET ASIDE and the
decision of the Regional Trial Court is
REINSTATED with the MODIFICATION
that the award of attorney's fees is
DELETED.
SO ORDERED.
Feliciano, Bidin, Davide,
Romero, JJ., concur.

Jr.

and

GUTIERREZ, JR., J.:


In this petition for review on certiorari
of the decision of the Court of, Appeal
declaring
the
existence
of
a
landholder-tenant relationship and
ordering the private respondent's
reinstatement,
the
petitioners
contend that the appellate court
committed an error of law in:

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-62626 July 18, 1984
SPOUSES CAYETANO and PATRICIA
TIONGSON, SPOUSES EDWARD
and
PACITA
GO,
SPOUSES
ROBERTO and MYRNA LAPERAL
III, ELISA R. MANOTOK, SPOUSES
IGNACIO and PACITA MANOTOK,
SEVERINO
MANOTOK,
JR.,
SPOUSES FAUSTO and MILAGROS
MANOTOK, ROSA R. MANOTOK,
Minors MIGUEL A. B. SISON and
MA.
CRISTINA
E.
SISON,
represented by their judicial
guardian FILOMENA M. SISON,
SPOUSES
MAMERTO
and
PERPETUA
M.
BOCANEGRA,
GEORGE
M.
BOCANEGRA,
represented
by
his
judicial
guardian MAMERTO BOCANEGRA,
SPOUSES
FRANCISCO
and
FILOMENA SISON, JOSE CLEMENTE
MANOTOK, SPOUSES JESUS and
THELMA MANOTOK, Minors PHILIP
MANOTOK,
MARIA
TERESA
MANOTOK and RAMON SEVERINO
MANOTOK, represented by their
judicial
guardian
SEVERINO
MANOTOK, JR., Minors JESUS JUDE
MANOTOK, JR. and JOSE MARIA
MANOTOK, represented by their
judicial
guardian
JESUS
MANOTOK,
petitioners,
vs.
HONORABLE COURT OF APPEALS
and
TEODORO
S.
MACAYA,
respondents.
Romeo J. Callejo and Gil Venerando R.
Racho for petitioners.
David Advincula Jr. and
Francisco for respondents.

Jose

J.

1.
Disregarding
the
findings of fact of the
Court
of
Agrarian
Relations
which
are
supported by substantial
evidence; and
2.
Substituting
the
findings of fact of the
Court
of
Agrarian
Relations with its own
findings.
Briefly, the facts of the case as found
by the Court of Agrarian Relations,
Seventh Regional District, Branch 1 at
Pasig, Metro Manila are as follows:
Sometime in 1946, the late Severino
Manotok donated and transferred to
his eight (8) children and two (2)
grandchildren namely: Purificacion
Manotok, Eliza Manotok, Perpetua
manotok, Filomena Manotok, Severino
Manotok, Jr., Jesus Manotok, Rahula
Ignacio Manotok, Severino Manotok
III, Fausto Manotok and Rosa Manotok,
a thirty-four-hectare lot located in
Payong, Old Balara, Quezon City
covered by a certificate of title.
Severino Manotok who was appointed
judicial guardian of his minor children
'accepted
on
their
behalf
the
aforesaid donation. At that time, there
were no tenants or other persons
occupying the said property.
In that same year, Teodoro Macaya
accompanied by Vicente Herrera, the
overseer of the property, went to the
house of Manotok in Manila and
pleaded that he be allowed to live on
the Balara property so that he could
at the same time guard the property
and prevent the entry of squatters
and the theft of the fruits and produce
of the fruit trees planted by the
owner. Manotok allowed Macaya to

stay in the property as a guard


(bantay) but imposed the conditions
that at any time that the owners of
the property needed or wanted to
take over the property, Macaya and
his family should vacate the property
immediately; that while he could raise
animals and plant on the property, he
could do so only for his personal
needs; that he alone could plant and
raise animals on the property; and
that the owners would have no
responsibility or liability for said
activities of Macaya. Macaya was
allowed to use only three (3) hectares.
These conditions, however, were not
put in writing.
On December 5, 1950, the propertyowners organized themselves into a
corporation engaged primarily in the
real estate business known as the
Manotok Realty, Inc. The owners
transferred the 34-hectare lot to the
corporation as part of their capital
contribution or subscription to the
capital stock of the corporation.
From 1946 to 1956, Macaya did not
pay, as he was not required to pay
anything to the owners or corporation
whether in cash or in kind for his
occupancy or use of the property.
However, the corporation noted that
the realty taxes on the property had
increased considerably and found it
very burdensome to pay the said
taxes while on the other hand,
Macaya had contributed nothing nor
even helped in the payment of the
taxes. Thus, Macaya upon the request
of the owners agreed to help by
remitting ten (10) cavans of palay
every year as his contribution for the
payment of the realty taxes beginning
1957.

the palay dried up. He further


requested that in the ensuring years,
he be allowed to contribute only ten
(10) cavans of palay. The corporation
said that if that was the case, he
might as well not deliver anymore.
Thus, from 1967 up to 1976, Macaya
did not deliver any palay.
On January 31, 1974, Manotok Realty,
Inc. executed a "Unilateral Deed of
Conveyance" of the property in favor
of Patricia Tiongson, Pacita Go,
Roberto Laperal III, Elisa Manotok,
Rosa
Manotok,
Perpetua
M.
Bocanegra,
Filomena
M.
Sison,
Severino Manotok, Jr., Jesus Manotok,
Ignacio S. Manotok, Severino Manotok
III and Fausto Manotok.
Sometime in 1974, Macaya was
informed by the Manotoks that they
needed the property to construct their
houses thereon. Macaya agreed but
pleaded that he be allowed to harvest
first the planted rice before vacating
the property.
However, he did not vacate the
property as verbally promised and
instead expanded the area he was
working on.

On June 5, 1964, the corporation


requested Macaya to increase his
contribution from ten (10) cavans to
twenty (20) cavans of palay effective
1963 because the assessed value of
the
property
had
increased
considerably. Macaya] agreed.

In 1976, the Manotoks once more told


Macaya to vacate the entire property
including those portions tilled by him.
At this point, Macaya had increased
his area from three (3) hectares to six
(6) hectares without the knowledge
and consent of the owners. As he was
being compelled to vacate the
property, Macaya brought the matter
to the Department (now Ministry) of
Agrarian Reforms. The Manotoks,
during the conference before the
officials of the Department insisted
that Macaya and his family vacate the
property. They threatened to bulldoze
Macaya's landholding including his
house, thus prompting Macaya to file
an action for peaceful possession,
injunction,
and
damages
with
preliminary injunction before the
Court of Agrarian Relations.

In 1967, Macaya informed the


corporation that he could not afford
anymore to deliver any palay because

The sole issue to be resolved in the


present petition is whether or not a
tenancy relationship exists between

the parties. The Court of Agrarian


Relations found that Macaya is not
and has never been a share or
leasehold tenant of Severino Manotok
nor of his successors-in-interest over
the property or any portion or
portions thereof but has only been
hired as a watchman or guard
(bantay) over the same. On Macaya's
appeal from the said decision, the
respondent appellate court declared
the existence of an agricultural
tenancy relationship and ordered
Macaya's
reinstatement
to
his
landholding.
Since what is involved ed is
agricultural tenancy, we refer to
Republic Act No. 1199 as amended by
Republic Act No. 2263. Section 3
thereof defines agricultural tenancy
as:
xxx xxx xxx
... the physical possession
by a person of land
devoted to agriculture
belonging to, or legally
possessed by, another for
the purpose of production
through the labor of the
former
and
of
the
members
of
his
immediate
farm
household,
in
consideration of which the
former agrees to share
the harvest with the latter,
or to pay a price certain,
either in produce or in
money, or in both.
Thus, the essential requisites of
tenancy relationship are: 1) the
parties are the landholder and the
tenant; 2) the subject is agricultural
land; 3) there is consent; 4) the
purpose is agricultural production;
and 5) there is consideration (Agustin,
Code of Agrarian Reforms of the
Philippines, 1981, p. 19). As
xxx xxx xxx
All these requisites are
necessary in order to
create
tenancy

relationship between the


parties and the absence
of one or more requisites
do not make the alleged
tenant a de facto tenant,
as
contra-distinguished
from a de jure tenant, This
is so because unless a
person has established his
status as a de jure tenant,
he is not entitled to
security of tenure nor is
he covered by the Land
Reform Program of the
Government
under
existing tenancy laws. ...
The key factor in ascertaining whether
or not there is a landowner-tenant
relationship in this case is the nature
of the disputed property.
Is the thirty-four (34) hectare lot, of
which the six (6) hectares occupied by
the private respondent form a part,
against agricultural land? If not, the
rules on agrarian reform do not apply.
From the year 1948 up to the present,
the tax declarations of real property
and the annual receipts for real estate
taxes paid have always classified the
land as "residential". The property is
in Balara, Quezon City, Metro Manila,
not far from the correctly held by the
trial court:
University of the Philippines and near
some
fast
growing
residential
subdivisions. The Manotok family is
engaged in the business of developing
subdivisions in Metro Manila, not in
farming.
The trial court observed that a
panoramic view of the property shows
that the entire 34 hectares is rolling
forestal land without any flat portions
except the small area which could be
planted to palay. The photographs of
the disputed area show that flush to
the
plantings
of
the
private
respondent
are
adobe
walls
separating expensive looking houses
and residential lots from the palay
and newly plowed soil. Alongside the
plowed or narrowed soil are concrete
culverts for the drainage of residential

subdivisions.
The
much
bigger
portions of the property are not
suitable for palay or even vegetable
crops.
The trial court noted that in a letter
dated April 12, 1977, the City
Engineer of Quezon City certified on
the basis of records in his office that
the property in question falls within
the category of "Residential I Zone."
The respondent court ignored all the
above considerations and noted
instead that the appellees never
presented the tax declarations for the
previous year, particularly for 1946,
the year when Macaya began
cultivating the property. It held that
while the petitioners at that time
might have envisioned a panoramic
residential area of the disputed
property, then cogonal with some
forest,
that
vision
could
not
materialize due to the snail pace of
urban development to the peripheral
areas of Quezon City where the
disputed property is also located and
pending the consequent rise of land
values. As a matter of fact, it found
that the houses found thereon were
constructed only in the 70's.
Whatever "visions" the owners may
have had in 1946, the fact remains
that the land has always been
officially classified as "residential"
since 1948. The areas surrounding the
disputed six hectares are now dotted
with residences and, apparently, only
this case has kept the property in
question
from
being
developed
together with the rest of the lot to
which it belongs. The fact that a
caretaker plants rice or corn on a
residential lot in the middle of a
residential subdivision in the heart of
a metropolitan area cannot by any
strained interpretation of law convert
it into agricultural land and subject it
to the agrarian reform program.
On this score alone, the decision of
the respondent court deserves to be
reversed.
Another requisite is that the parties
must be landholder and tenant. Rep.

Act No. 11 99 as amended defines a


landholder
Sec. 5(b) A landholder
shall mean a person,
natural or juridical, who,
either as owner, lessee,
usufructuary,
or
legal
possessor, lets or grants
to another the use or
cultivation of his land for a
consideration either in
shares under the share
tenancy system, or a price
certain
under
the
leasehold tenancy system.
On the other hand, a tenant is defined
as
Sec. 5(a) A tenant shall
mean a person who,
himself and with the aid
available from within his
immediate
farm
household, cultivates the
land belonging to, or
possessed by, another
with the latter's consent
for
purposes
of
production, sharing the
produce
with
the
landholder
under
the
share tenancy system or
paying to the landholder a
price certain in produce or
in money or both, under
the leasehold tenancy
system.
Under these definitions, may Macaya
be considered as a tenant and
Manotok as a landholder? Significant,
as the trial court noted, is that the
parties have not agreed as to their
contributions of the several items of
productions such as expenses for
transplanting, fertilizers, weeding and
application of insecticides, etc. In the
absence of an agreement as to the
respective contributions of the parties
or other terms and conditions of their
tenancy agreement, the lower court
concluded
that
no
tenancy
relationship was entered into between
them as tenant and landholder.

On this matter, the respondent


Appellate Court disagreed. It held
that:
... Whether the appellant
was instituted as tenant
therein or as bantay, as
the appellees preferred to
call him, the inevitable
fact is that appellant
cleared, cultivated and
developed
the
once
unproductive
and
Idle
property for agricultural
production. Appellant and
Don Severino have agreed
and followed a system of
sharing the produce of the
land whereby, the former
takes care of all expenses
for
cultivation
and
production, and the latter
is only entitled to 10
cavans of rice per harvest.
This is the essense of
leasehold tenancy.
It should be noted, however, that from
1967 to the present, Macaya did not
deliver any cavans of palay to the
petitioners as the latter felt that if
Macaya could no longer deliver the
twenty (20) cavans of palay, he might
as well not deliver any. The decision
of the petitioners not to ask for
anymore contributions from Macaya
reveals that there was no tenancy
relationship ever agreed upon by the
parties. Neither can such relationship
be implied from the facts as there was
no agreed system of sharing the
produce of the property. Moreover,
from 1946 to 1956 at which time,
Macaya was also planting rice, there
was no payment whatsoever. At the
most and during the limited period
when it was in force, the arrangement
was a civil lease where the lessee for
a fixed price leases the property while
the lessor has no responsibility
whatsoever for the problems of
production and enters into no
agreement as to the sharing of the
costs
of
fertilizers,
irrigation,
seedlings, and other items. The
private respondent, however, has long
stopped in paying the annual rents
and violated the agreement when he

expanded the area he was allowed to


use. Moreover, the duration of the
temporary arrangement had expired
by its very terms.
Going over the third requisite which is
consent, the trial court observed that
the property in question previous to
1946 had never been tenanted.
During that year, Vicente Herrera was
the
overseer.
Under
these
circumstances, coupled by the fact
that the land is forested and rolling,
the lower court could not see its way
clear to sustain Macaya's contention
that Manotok had given his consent to
enter into a verbal tenancy contract
with him. The lower court further
considered the fact that the amount
of ten (10) cavans of palay given by
Macaya to the owners from 1957 to
1964 which was later increased to
twenty (20) cavans of palay from
1964
to
1966
was
grossly
disproportionate to the amount of
taxes paid by the owners. The lot was
taxed as residential land in a
metropolitan area. There was clearly
no intention on the part of the owners
to devote the property for agricultural
production but only for residential
purposes. Thus, together with the
third requisite, the fourth requisite
which is the purpose was also not
present.
The last requisite is consideration.
This is the produce to be divided
between the landholder and tenant in
proportion
to
their
respective
contributions. We agree with the trial
court that this was also absent.
As earlier stated, the main thrust of
petitioners' argument is that the law
makes it mandatory upon the
respondent Court of Appeals to affirm
the decision of the Court of Agrarian
Relations if the findings of fact in said
decision are supported by substantial
evidence, and the conclusions stated
therein are not clearly against the law
and jurisprudence. On the other hand,
private respondent contends that the
findings of the Court of Agrarian
Relations are based not on substantial
evidence alone but also on a
misconstrued
or
misinterpreted

evidence, which as a result thereof,


make the conclusions of the Court of
Agrarian Relations clearly contrary to
law and jurisprudence.
After painstakingly going over the
records of the case, we find no valid
and cogent reason which justifies the
appellate court's deviation from the
findings and conclusions of the lower
court. It is quite clear from the 44page decision of the trial court, that
the latter has taken extra care and
effort in weighing the evidence of
both parties of the case. We find the
conclusions
of
the
respondent
appellate court to be speculative and
conjectural.
It bears re-emphasizing that from
1946 to 1956, there was no
agreement as to any system of
sharing the produce of the land. The
petitioners did not get anything from
the harvest and private respondent
Macaya was using and cultivating the
land free from any charge or expense.
The situation was rather strange had
there been a tenancy agreement
between Don Severino and Macaya.
From 1957 to 1964, Macaya was
requested to contribute ten (10)
cavans a year for the payment of the
realty taxes. The receipts of these
contributions are evidenced by the
following exhibits quoted below:
(a) Exhibit "4" adopted
and marked as Exhibit "K"
for plaintiff (Macaya):
Ukol sa taon 1961
Tinanggap
naniin kay G.
Teodoro
Macaya
ang
sampung (10)
cavan
na
palay
bilang
tulong niya sa
pagbabayad
ng
amillaramient
o sa lupa ng
corporation na
nasa Payong,

Q.C.
na
kaniyang
binabantayan.
(b) Exhibit "9" adopted
and marked as Exhibit "L"
for plaintiff (Macaya):
Tinanggap
namin
kay
Ginoong
Teodoro
Macaya
ang
TATLONG (3)
kabang palay
bilang
kapupunan sa
DALAWAMPUN
G (20) kabang
palay
na
kanyang
tulong
sa
pagbabayad
ng
amillaramient
o
para
sa
taong 1963 ng
lupang ari ng
Manotok
Realty, Inc. na
nasa Payong,
Quezon City,
na
kanyang
binabantayan
samantalang
hindi
pa
ginagawang
SUBDIVISION
PANGTIRAHAN
.
c) Exhibit "10" adopted
and marked as Exhibit "N"
for plaintiff (Macaya):
Tinanggap
namin
kay
Ginoong
Teodoro
Macaya
ang
DALAWAMPUN
G (20) kabang
palay
na
kanyang
tulong
sa
pagbabayad
ng
amillaramient

o
para
sa
taong 1964 ng
lupang ari ng
Manotok
Realty Inc., na
nasa Payong,
Quezon City,
na
kanyang
binabantayan
samantalang
hindi
pa
ginagawang
SUBDIVISION
PANG
TAHANAN.

watchman or guard (bantay) shall


continue until the property shall be
converted into a subdivision for
residential purposes.

d) Exhibit "11" adopted


and marked as Exhibit "M"
for plaintiff (Macaya):

Furthermore, the conclusion of the


respondent appellate court to the
effect that the receipts having been
prepared by one of the petitioners
who happens to be a lawyer must
have been so worded so as to conceal
the real import of the transaction is
highly speculative. There was nothing
to conceal in the first place since the
primary objective of the petitioners in
allowing Macaya to live on the
property was for security purposes.
The presence of Macaya would serve
to
protect
the
property
from
squatters. In return, the request of
Macaya to raise food on the property
and cultivate a three-hectare portion
while it was not being developed for
housing purposes was granted.

Tinanggap
namin
kay
Ginoong
Teodoro
Macaya
ang
DALAWAMPUN
G (20) kabang
ng palay na
kanyang
tulong
sa
pagbabayad
ng
amillaramient
o
para
sa
taong 1965 ng
lupang ari ng
Manotok
Realty,
Inc.,
na
nasa
Payong,
Quezon City,
na
kanyang
binabantayan
samantalang
hindi
pa
ginagawang
SUBDIVISION
PANG
TAHANAN.
From the above-quoted exhibits, it
clearly appears that the payment of
the cavans of palay was Macaya's
contribution for the payment of the
real estate taxes; that the nature of
the work of Macaya is that of a
watchman or guard (bantay); and,
that the services of Macaya as such

The
respondent
appellate
court
disregarded the receipts as selfserving. While it is true that the
receipts were prepared by petitioner
Perpetua M. Bocanegra, Macaya
nevertheless signed them voluntarily.
Besides, the receipts were written in
the vernacular and do not require
knowledge of the law to fully grasp
their implications.

We can understand the sympathy and


compassion which courts of justice
must feel for people in the same
plight as Mr. Macaya and his family.
However, the petitioners have been
overly generous and understanding of
Macaya's problems. For ten years
from 1946 to 1956, he lived on the
property, raising animals and planting
crops for personal use, with only his
services as "bantay" compensating for
the use of another's property. From
1967 to the present, he did not
contribute to the real estate taxes
even as he dealt with the land as if it
were his own. He abused the
generosity of the petitioners when he
expanded the permitted area for
cultivation from three hectares to six
or eight hectares. Mr. Macaya has
refused to vacate extremely valuable
residential land contrary to the clear

agreement when he was allowed to


enter it. The facts of the case show
that even Mr. Macaya did not consider
himself as a true and lawful tenant
and did not hold himself out as one
until he was asked to vacate the
property.
WHEREFORE,
the
petition
is
GRANTED. The decision of the
respondent Court of Appeals is hereby
REVERSED and SET ASIDE and the
decision of the Court of Agrarian
Relations is AFFIRMED.
SO ORDERED.
Teehankee (Chairman), Plana, Relova
and De la Fuente, JJ., concur.
Melencio-Herrera, J., is on leave.
FIRST DIVISION

[G.R. No. L-28135.


1981.]

September 10,

JOSE MATIENZO, plaintiff-appellant,


vs. MARTIN SERVIDAD, defendantappellee.

Alberto A. Reyes for plaintiff-appellant.


Vicente F. Camacho, Jr. for defendantappellee.

SYNOPSIS

and plant the land as long as he


wished;
he
had
no
sharing
arrangement with appellee; and he
was not obligated to pay any price
certain to, nor share the produce with,
the latter. Subsequently, the parties
entered into another agreement
regarding upland planting and copramaking for the year 1963, pursuant to
which, appellant and his wife were
made "caretakers" of the land. Under
this second agreement, appellant
would receive 1/3 of the copra as
payment for processing, but as in the
first agreement, there was a definite
provision that appellee would not
share in the produce of appellant's
plants. In 1964, appellee prohibited
appellant from interfering with the
plants and from planting and clearing
the land stating that they had no
agreement yet for that year. Efforts to
settle the difference between the
parties failed. Thus, appellant filed a
suit for illegal ejectment against
appellee, where he stated that in view
of his strained relationship with
appellee, he was waiving his right to
reinstatement provided he be paid
reasonable compensation for the
improvements he had introduced on
the land, plus actual and moral
damages. The trial Court dismissed
the case based on the Report of the
Court-appointed
Commissioner.
Hence, this Petition.
The Supreme Court held, that it
is clear from the agreements entered
into between the parties that their
intention was to make appellant an
overseer of appellee and not a tenant,
there being no sharing arrangement
between them.
Petition dismissed.

In a private document agreed


upon between appellant and appellee,
appellant was made head-overseer
over a 7-hectare land belonging to
appellee. Under the agreement,
appellant
was
to
supervise
applications for loans from those
residing therein; he was allowed to
build his house thereon and plant
specified
plants
without
being
compensated; he was free to clear

SYLLABUS

1.
CIVIL LAW; CONTRACTS;
INTERPRETATION
OF;
SOME
BASIC PRINCIPLES. When there
is no doubt as to the intention of
the contracting parties, its literal

meaning shall control (Art. 1370,


New Civil Code; Cebu Portland
Cement Co. vs. Dumon, 61 SCRA
218). Article 1372 of the New
Civil Code further provides that
however general the terms of a
contract may be, they shall not
be understood to comprehend
things that are distinct and cases
that are different from those
upon which the parties intended
to agree (Rep. vs. Vda. de
Castellvi,
58
SCRA
336).
Therefore, a meaning other than
that
expressed
or
an
interpretation which would alter
its strict and literal significance
should not, be given to it (City of
Manila vs. Rizal Park Co., 53 Phil.
515). Moreover, the entirety of
the contract must be taken into
consideration to ascertain the
meaning of its provision (Ruiz vs.
Sheriff of Manila, 34 SCRA 83).
2.
ID.;
ID.;
ID.;
1D.;
CONTRACT IN CASE AT BAR
CLEARLY SHOWS THAT PLAINTIFFAPPELLANT IS AN OVERSEER. It
is clear from Exhibit C that
plaintiff was made an overseer of
defendant, not a tenant. It was
likewise
expressly
stipulated
therein that "the conditions for
clearing the land are these: With
respect to all your plants we will
share no percentage for the
land." And again, "all those
(coconuts) that we are to plant
no share will be taken for the
land." The basic element of
sharing in agricultural tenancy,
therefore, is absent. The onethird share plaintiff received from
copra-making
constituted
payments for the processing of
copra which are evidenced by
receipts. Plaintiff also got paid for
clearing the coconuts.
3.
LABOR
AND
SOCIAL
LEGISLATION;
AGRICULTURAL
TENANCY
ACT
(R.A.
1199);
TENANCY
RELATIONSHIP;
TENANT, DEFINED. A tenant is
defined under Section 5(a) of
Republic Act No. 1199 as a
person, who, himself, and with

the aid available from within his


immediate household, cultivates
the
land
belonging
to
or
possessed by another, with the
latter's consent for purposes of
production, sharing the produce
with the landholder under the
share tenancy system, or paying
to the landholder a price certain
or ascertainable in produce or in
money or both, under the
leasehold tenancy system.
4.
ID.; ID.; ID.; SHARING
ARRANGEMENT, AN ESSENTIAL
ELEMENT THEREOF; ABSENT IN
CASE AT BAR. In the case at
bar,
there
is
no
tenancy
relationship between the parties
in view of the absence of a
sharing
arrangement.
What
transpired was that plaintiff was
made overseer over a 7-hectare
land area; he was to supervise
applications for loans from those
residing therein; he was allowed
to build his house thereon and to
plant specified plants without
being compensated; he was free
to clear and plant the land as
long as he wished; he had no
sharing
arrangement
with
defendant; and he was not
obligated to pay any price certain
to nor share the produce with,
the latter.
5.
ID.; ID.; ID.; RULING THAT
CARETAKER
IS
CONSIDERED
CULTIVATOR OF THE LAND, NOT
APPLICABLE IN CASE AT BAR;
REASON. Although Exhibit 6
states that plaintiff and his wife
were made "caretakers" of the
land, there is a definite provision
in both Exhibits C and 6 that
defendant would not share in the
produce of plaintiff's plants.
Because of this aspect, the ruling
in Latag vs. Banog, 16 SCRA 88
(1906), which holds that a
"caretaker of an agricultural land
is also considered cultivator of
the land," finds no applicability.
6.
REMEDIAL
LAW;
CIVIL
PROCEDURE; APPEAL; ISSUES
NOT RAISED IN TRIAL COURT

CANNOT BE RAISED FOR FIRST


TIME ON APPEAL. Plaintiff's
assertions that the trial Court
committed grave error in failing
to notify the parties of the filing
of the Commissioner's Report; in
not giving them ten days to
object
thereto
pursuant
to
Section 10, Rule 33 of the Rules
of Court; and in failing to set the
Report for hearing in accordance
with Section 11 of the same Rule,
have been raised for the first
time on appeal. It is a wellsettled rule that issues not raised
in the trial Court cannot be raised
for the first time on appeal.

DECISION

MELENCIO-HERRERA, J p:
Under review is the judgment of
the Court of Agrarian Relations,
Branch I, Naga City, in CAR Case No.
920-CS-64, entitled "Jose Matienzo vs.
Martin Servidad," dismissing plaintiff's
action
for
Reinstatement,
Reliquidation and Damages. This case
was certified to us by the Court of
Appeals on September 20, 1967, the
principal issue being one of law,
particularly, the interpretation of the
contracts between the parties.
The controversy stemmed from
the following uncontroverted facts:
Defendant Martin Servidad is the
owner of a sixteen hectare agricultural
land situated at Barrio Binahian,
Sipocot, Camarines Sur. On April 16,
1961, he and plaintiff Jose Matienzo
1
executed a private instrument
handwritten in the dialect of the
locality by Feliza Servidad, wife of
2
defendant Martin Servidad
, and
translated into English as follows:
"I Jose Matienzo, Elenita Robles,
we husband and wife were
instituted head-overseer in the
land of Martin and Feliza de
Servidad who will take care of

their plants. Whoever resides in


our land will have to obey the
head-overseer as we have then
authorized to supervise the
landholding. Like borrowing loans
needed if there is no letter from
the Head-overseer to us we will
not
accommodate.
So
that
whatever need you have you
must inform the Head-overseer
as the latter is the one to inform
us.
The conditions for clearing the
land are these: With respect to all
your plants we will share no
percentage for the land. But you
will have to plant coconut in our
land. We will not pay as this is
our conditions. You are free to
clear and plant the land as long
as you wish. We must help one
another for our betterment. Let
us not do anything prejudicial to
others. Let's do the best as it is
better.
To show our conformity to the
terms given by Martin and Feliza de
Servidad, we signed in the presence of
two witnesses this date." (Emphasis
supplied)
Witnesses:
1.

Jose Matienzo

2.

Paulino Ponayo

3.

S. Ralles.

The area entrusted to plaintiff


was seven hectares, on a portion of
which he constructed his house.
On January 1, 1963, the parties
entered into another agreement
concerning the conditions of copra
making and upland planting for the
year 1963. 3 This was again
handwritten in the local dialect by
4
Feliza
Servidad.
The
English
translation of the agreement reads:
"Condition in Copra Making and
Upland
Planting This Year 1963.
Binahian, Sipocot, Camarines Sur.

"I, JOSE MATIENZO and ELENITA


ROBLES, husband and wife, are
hereby made caretakers of the
land of Martin Servidad and
Feliza de Servidad, and, when we
arrived on their land all plants
are productive.
The condition given to us in
copra making is one third, but
before we begin copra making,
we are to clean the plantation
and everytime we make copra we
separate nuts for seedling. We
are given one male carabao
(castrated). The condition for
upland planting is this: all those
that we are to plant no share will
be taken for the land, but we are
also to plant coconut, coffee,
abaca, and the owner shall not
pay the same. Before I signed
this I have read the same. In
truth we agree to the condition
given to me, and I signed this 1st
day of January, 1963 before two
witnesses. In the year 1964 new
agreement
will
be
made.
(Emphasis ours)
SGD.
Jose
Matienzo Elenita
Robles
Sgd. Pedro Moreno Barrio
Lieut.
Sgd. Jose Bacho
Jose
Matienzo
Robles"

Elenita

Plaintiff
planted
bananas,
bancocan,
coffee,
coconuts,
breadfruits, abaca and some auxiliary
crops. He also looked after the coffee
and abaca plants of defendant, as well
as the latter's goats entrusted to his
care. For clearing the coconut
plantation, he was paid per coconut
tree he cleared. For his labor in
making copra, he was paid 1/3 of the
copra he made. Other persons who
made copra therein were also
correspondingly paid.
On January 30, 1964, defendant
wrote plaintiff telling him not to
"interfere with the plants" as they had
no agreement yet for that year, and
that being the landowner, he should

be the one to decide in accordance


with the "tenancy law." 5 On March 4,
1964, defendant sent another letter to
plaintiff prohibiting him from planting
and clearing the land for the same
6
reason.
Plaintiff
sought
the
assistance of the Office of the
Agrarian Counsel in Naga City. Efforts
to settle the case amicably failed, as a
consequence
of
which,
plaintiff
brought an action against defendant
in the Court of Agrarian Relations of
Naga City praying that defendant be
held guilty of illegal ejectment; that in
view of the strained relationship with
defendant, he was waiving his right to
reinstatement provided he be paid
reasonable compensation for his
improvements; and that defendant be
ordered to pay him actual and moral
damages.
The case was heard by Judge
Valeriano A. del Valle, then by Judge
Agustin Frivaldo, and terminated by
Commissioner Benjamin G. Fernandez,
who was appointed by the Court to
hear the case on January 20, 1966,
with the consent of the parties. 7
Based on the Commissioner's Report,
which was adopted in toto by the
Court, a judgment was rendered on
May 17, 1966 dismissing the suit for
lack of merit. Plaintiff moved for
reconsideration, but this was denied.
In its judgment, the Court a quo
specifically made a finding that
plaintiff had expressly waived his right
to reinstatement "on account of his
strained relationship with defendant."
Plaintiff appealed to the Court of
Appeals, which Court, however, as
hereinabove stated, certified the case
to us on the theory that "where the
issue
is
the
construction
or
interpretation of contracts, or where
all the facts are stated in the
judgment and the issue is the
conclusion drawn therefrom, the
question is one of law reviewable by
the Supreme Court." 8
Plaintiff has
following errors:
I

assigned

the

"The lower Court erred in holding


that appellant is merely an
overseer of appellee over the
landholding in question.
II
The Court a quo committed a
grave
error
in
considering
exhibits '2', 'C', & 'C-1', as
contracts that established merely
an overseer relationship between
the appellant and appellee; in
this regard the Court a quo
deviated from the established
procedures in determining the
nature of a contract.
III
The Court a quo committed a
grave error in authorizing the
ejectment of appellant.
IV
The Court failed to observe the
requirements of Sections 10 &
11, Rule 33 of the New Rules of
Court."
The sole issue for determination
is
whether
under
the
parties'
agreements, plaintiff was instituted as
an overseer or as a tenant by
defendant.
To start with, a few basic
principles on the interpretation of
contracts should be reiterated. When
there is no doubt as to the intention of
the contracting parties, its literal
meaning shall control. 9 Article 1372 of
the New Civil Code further provides
that however general the terms of a
contract may be, they shall not be
understood to comprehend things that
are distinct and cases that are
different from those upon which the
parties intended to agree. 10 Therefore,
a meaning other than that expressed
or an interpretation which would alter
its strict and literal significance should
not be given to it. 11 Moreover, the
entirety of the contract must be taken
into consideration to ascertain the
meaning of its provisions. 12

It is clear from Exhibit C that


plaintiff was made an overseer of
defendant, not a tenant. It was
likewise expressly stipulated therein
that "the conditions for clearing the
land are these: With respect to all
your plants we will share no
percentage for the land." And again,
"all those (coconuts) that we are to
plant no share will be taken for the
land." 13 The basic element of sharing
in agricultural tenancy, therefore, is
absent. The one-third share plaintiff
received
from
copra-making
constituted
payments
for
the
processing of copra. These are
evidenced by receipts. 14 Plaintiff also
got paid for clearing the coconuts as
shown by Exhibits 7 and 7-A. 15
A tenant is defined under section
5(a) of Republic Act No. 1199 as a
person who, himself, and with the aid
available from within his immediate
household,
cultivates
the
land
belonging to or possessed by another,
with the latter's consent for purposes
of production, sharing the produce
with the landholder under the share
tenancy system, or paying to the
landholder
a
price
certain
or
ascertainable in produce or in money
or both, under the leasehold tenancy
system. From the above definition of a
tenant, it is clear that absent a
sharing arrangement, no tenancy
relationship had ever existed between
the parties. What transpired was that
plaintiff was made overseer over a 7hectare land area; he was to supervise
applications for loans from those
residing therein; he was allowed to
build his house thereon and to plant
specified
plants
without
being
compensated; he was free to clear
and plant the land as long as he
wished;
he
had
no
sharing
arrangement
between
him
and
defendant; and he was not obligated
to pay any price certain to, nor share
the produce with, the latter.
Although Exhibit 6 states that
plaintiff and his wife were made
"caretakers" of the land, there is a
definite provision in both Exhibits C
and 6 that defendant would not share
in the produce of plaintiff's plants.

Because of this aspect, the ruling in


Latag vs. Banog, 16 SCRA 88 (1966),
which holds that a "caretaker of an
agricultural land is also considered
cultivator of the land," finds no
applicability.
Besides, even if we were to rule
that plaintiff is a tenant, the whole
exercise would become academic
since he has waived his right to
reinstatement.
With respect to the fourth
assignment of error, plaintiff asserts,
for the first time, that the trial Court
committed grave error in failing to
notify the parties of the filing of the
Commissioner's Report, and in not
giving them ten days to object thereto
pursuant to Section 10, Rule 33 of the
Rules of Court. He also claims that the
Court failed to set the Report for
hearing in accordance with Section 11
of the same Rule. Be that as it may,
well established is the rule that issues
not raised in the trial Court can not be
raised for the first time on appeal.
WHEREFORE,
hereby dismissed.

the

Petition

SECOND DIVISION

[G.R. No. 78214.


1988.]

December 5,

YOLANDA CABALLES, petitioner, vs.


DEPARTMENT
OF
AGRARIAN
REFORM, HON. HEHERSON T.
ALVAREZ
and
BIENVENIDO
ABAJON, respondents.

DECISION

is

SO ORDERED.
Teehankee (Chairman), Makasiar,
Fernandez and Guerrero, JJ ., concur.

SARMIENTO, J p:
Before us is a petition for
certiorari seeking the annulment of an
Order issued by the public respondent
Ministry of Agrarian Reform (MAR),
now the Department of Agrarian
Reform (DAR), through its then
Minister, the Hon. Heherson Alvarez,
finding the existence of a tenancy
relationship
between the
herein
petitioner and the private respondent
and certifying the criminal case for
malicious mischief filed by the
petitioner
against
the
private
respondent as not proper for trial.
LLphil
The facts as gathered by the
MAR are as follows:
The landholding subject of the
controversy, which consists of only
sixty (60) square meters (20 meters x
3 meters) was acquired by the
spouses Arturo and Yolanda Caballes,
the latter being the petitioner herein,
by virtue of a Deed of Absolute Sale

dated July 24, 1978 executed by


Andrea
Alicaba
Millenes.
This
landholding is part of Lot No. 3109-C,
which has a total area of about 500
square meters, situated at Lawa-an,
Talisay, Cebu. The remainder of Lot
No. 3109-C was subsequently sold to
the said spouses by Macario Alicaba
and the other members of the
Millenes family, thus consolidating
ownership over the entire (500-square
meter) property in favor of the
petitioner.
In 1975, before the sale in favor
of the Caballes spouses, private
respondent
Bienvenido
Abajon
constructed his house on a portion of
the said landholding, paying a
monthly rental of P2.00 to the owner,
Andrea Millenes. The landowner
likewise allowed Abajon to plant on a
portion of the land, agreeing that the
produce thereof would be shared by
both on a fifty-fifty basis. From 19751977, Abajon planted corn and
bananas on the landholding. In 1978,
he
stopped
planting
corn
but
continued to plant bananas and
camote. During those four years, he
paid the P2.00 rental for the lot
occupied by his house, and delivered
50% of the produce to Andrea
Millenes.
Sometime in March 1979, after
the property was sold, the new
owners, Arturo and Yolanda Caballes,
told Abajon that the poultry they
intended to build would be close to his
house and pursuaded him to transfer
his dwelling to the opposite or
southern portion of the landholding.
Abajon offered to pay the new owners
rental on the land occupied by his
house, but his offer was not accepted.
Later, the new owners asked Abajon
to vacate the premises, saying that
they needed the property. But Abajon
refused to leave. The parties had a
confrontation before the Barangay
Captain of Lawa-an in Talisay, Cebu
but failed to reach an agreement. All
the efforts exerted by the landowners
to oust Abajon from the landholding
were in vain as the latter simply
refused to budge. LLphil

On April 1, 1982, the landowner,


Yolanda
Caballes,
executed
an
Affidavit stating that immediately
after she reprimanded Abajon for
harvesting bananas and jackfruit from
the property without her knowledge,
the latter, with malicious and ill intent,
cut down the banana plants on the
property worth about P50.00. A
criminal case for malicious mischief
was filed against Abajon and which
was docketed as Criminal Case No.
4003. Obviously, all the planting on
the property, including that of the
banana plants, had been done by
Abajon. On September 30, 1982, upon
motion of the defense in open court
pursuant to PD 1038, the trial court
ordered the referral of the case to the
Regional Office No. VII of the then
MAR for a preliminary determination
of the relationship between the
parties. As a result, the Regional
Director of MAR Regional VII, issued a
certification 1 dated January 24, 1983,
stating that said Criminal Case No.
4003 was not proper for hearing on
the bases of the following findings:
That herein accused is a bona-fide
tenant of the land owned by the
complaining witness, which is devoted
to bananas;
That this case is filed patently to
harass and/or eject the tenant from
his
farmholding,
which
act
is
prohibited b law; and
That this arose out of or is connected
with agrarian relations.
From the said certification, the
petitioner appealed to the then MAR,
now the respondent DAR. Acting on
said appeal, the respondent DAR,
through its then Minister Conrado
Estrella,
reversed
the
previous
2
certification in its Order of February
3, 1986, declaring Criminal Case No.
4003 as proper for trial as "the land
involved is a residential lot consisting
of only 60 square meters whereon the
house of the accused is constructed
and within the industrial zone of the
town as evinced from the Certification
issued by the Zoning Administrator of
Talisay, Cebu."

Upon motion for reconsideration


filed by Abajon, the respondent DAR,
through its new Minister, herein
respondent Heherson Alvarez, issued
an Order 3 dated November 15, 1986,
setting aside the previous Order dated
February 3, 1986, and certifying said
criminal case as not proper for trial,
finding the existence of a tenancy
relationship between the parties, and
that the case was designed to harass
the accused into vacating his tillage.
In the summary investigation
conducted by the DAR, the former
landowner, Andrea Millenes, testified
that Bienvenido Abajon dutifully gave
her 50% share of the produce of the
land under his cultivation. The
grandson of Andrea Millenes, Roger
Millenes, corroborated the testimony
of the former, stating that he received
said share from Abajon. Roger
Millenes further testified that the
present owners received in his
presence a bunch of bananas from the
accused representing 1/2 or 50% of
the two bunches of bananas gathered
after Caballes had acquired the
property. 4

wide and twenty (20) meters long, or


a total of sixty (60) square meters." 6
Hence, its petition for certiorari
alleging that:
I.
Respondents
DAR
and
Hon.
Heherson
T.
Alvarez
committed "grave abuse of
power and discretion amounting
to lack of jurisdiction" in holding
that private respondent Abajon is
an agricultural tenant even if he
is cultivating only a 60-square
meter (3 x 20 meters) portion of
a
commercial
lot
of
the
petitioner.
II.
Public
respondents
gravely erred in holding that
Criminal Case No. 4003 is not
proper for trial and hearing by
the court. 7
We hold that the private
respondent cannot avail of the
benefits afforded by RA 3844, as
amended. To invest him with the
status of a tenant is preposterous.
Section 2 of said law provides:

From these factual findings, the


DAR concluded that Abajon was a
tenant of Andrea Millenes, the former
owner, who had testified that she
shared the produce of the land with
Abajon as tiller thereof. 5 Thus,
invoking Sec. 10 of RA 3844, as
amended, which provides that "[T]he
agricultural leasehold relation under
this Code shall not be extinguished by
mere expiration of the term or period
in a leasehold contract nor by the
sale, alienation or transfer of the legal
possession of the landholding"; and
that "(I)n case the agricultural lessor
sells, alienates or transfers the legal
possession of the landholding, the
purchaser or transferee thereof shall
be subrogated to the rights and
substituted to the obligations of the
agricultural lessor," the MAR ruled
that "the new owners are legally
bound to respect the tenancy,
notwithstanding their claim that the
portion tilled by Abajon was small,
consisting merely of three (3) meters

It is the policy of the State:


(1)
To
establish
cooperativecultivatorship among those who live
and work on the land as tillers, ownercultivatorship and the economic
family-size farm as the basis of
Philippine agriculture and, as a
consequence, divert landlord capital in
agriculture to industrial development;
xxx
xxx

xxx

RA 3844, as amended, defines an


economic family-size farm as "an area
of farm land that permits efficient use
of labor and capital resources of the
farm family and will produce an
income sufficient to provide a modest
standard of living to meet a farm
family's needs for food, clothing,
shelter, and education with possible
allowance for payment of yearly
installments
on
the
land,
and

reasonable reserves to absorb yearly


fluctuations in income." 8

5.
There
cultivation; and

The private respondent only


occupied a miniscule portion (60
square meters) of the 500-square
meter lot. Sixty square meters of land
planted to bananas, camote, and corn
cannot by any stretch of the
imagination be considered as an
economic family-size farm. Surely,
planting camote, bananas, and corn
on a sixty-square meter piece of land
can not produce an income sufficient
to provide a modest standard of living
to meet the farm family's basic needs.
The
private
respondent
himself
admitted that he did not depend on
the products of the land because it
was too small, and that he took on
carpentry jobs on the side. 9 Thus, the
order sought to be reviewed is
patently contrary to the declared
policy of the law stated above.

6.
There
harvests.

The DAR found that the private


respondent shared the produce of the
land with the former owner, Andrea
Millenes. This led, or misled, the public
respondents to conclude that a
tenancy relationship existed between
the petitioner and the private
respondent
because,
the
public
respondents continue, by operation of
Sec. 10 of R. A. 3844, as amended,
the
petitioner
new
owner
is
subrogated
to
the
rights
and
substituted to the obligations of the
supposed agricultural lessor (the
former owner).
We disagree.
The essential requisites of a
tenancy relationship are:
1.
The parties are
landowner and the tenant;

the

2.
The subject is agricultural
land;
3.

There is consent;

4.
The purpose is agricultural
production;

is
is

personal
sharing

of

All these requisites must concur


in order to create a tenancy
relationship between the parties. The
absence of one does not make an
occupant of a parcel of land, or a
cultivator thereof, or a planter
thereon, a de jure tenant. This is so
because
unless
a
person
has
established his status as a de jure
tenant, he is not entitled to security of
tenure nor is he covered by the Land
Reform Program of the Government
under existing tenancy laws. 10
Therefore, the fact of sharing
alone is not sufficient to establish a
tenancy relationship. Certainly, it is
not unusual for a landowner to accept
some of the produce of his land from
someone who plants certain crops
thereon. This is a typical and laudable
provinciano trait of sharing or patikim,
a native way of expressing gratitude
for favor received. This, however,
does not automatically make the tillersharer a tenant thereof specially when
the area tilled is only 60, or even 500,
square meters and located in an
urban area and in the heart of an
industrial or commercial zone at that.
Tenancy status arises only if an
occupant of a parcel of land has been
given its possession for the primary
purpose of agricultural production.
The circumstances of this case
indicate that the private respondent's
status is more of a caretaker who was
allowed by the owner out of
benevolence or compassion to live in
the premises and to have a garden of
some sort at its southwestern side
rather than a tenant of the said
portion.
Agricultural production as the
primary purpose being absent in the
arrangement, it is clear that the
private respondent was never a
tenant of the former owner, Andrea
Millenes. Consequently, Sec. 10 of RA
of 3844, as amended, does not apply.

Simply stated, the private respondent


is not a tenant of the herein petitioner.
Anent the second assignment of
error, the petitioner argues that since
Abajon, is not an agricultural tenant,
the criminal case for malicious
mischief filed against him should be
declared as proper for trial so that
proceedings in the lower court can
resume.
Notwithstanding our ruling that
the private respondent is not a tenant
of the petitioner, we hold that the
remand of the case to the lower court
for the resumption of the criminal
proceedings is not in the interest of
justice. Remand to the Municipal Court
of Talisay, Cebu, would not serve the
ends of justice at all, nor is it
necessary, because this High Tribunal
is in a position to resolve with finality
the dispute before it. This Court, in the
public interest, and towards the
expeditious administration of justice,
has decided to act on the merits and
dispose of the case with finality. 11
The criminal case for malicious
mischief filed by the petitioner against
the private respondent for allegedly
cutting down banana trees worth a
measly P50.00 will take up much of
the time and attention of the
municipal court to the prejudice of
other more pressing cases pending
therein. Furthermore, the private
respondent
will
have
to
incur
unnecessary expenses to finance his
legal battle against the petitioner if
proceedings in the court below were
to resume. Court litigants have
decried the long and unnecessary
delay in the resolution of their cases
and the consequent costs of such
litigations. The poor, particularly, are
victims of this unjust judicial dawdle.
Impoverished that they are they must
deal with unjust legal procrastination
which they can only interpret as
harassment or intimidation brought
about by their poverty, deprivation,
and despair. It must be the mission of
the
Court
to
remove
the
misperceptions aggrieved people have
of the nature of the dispensation of
justice. If justice can be meted out

now, why wait for it to drop gently


from heaven? Thus, considering that
this case involves a mere bagatelle,
the Court finds it proper and
compelling to decide it here and now,
instead of further deferring its final
termination.
As found by the DAR, the case for
malicious mischief stemmed from the
petitioner's affidavit stating that after
she reprimanded private respondent
Abajon for harvesting bananas and
jackfruit from the property without her
knowledge, the latter, with ill intent,
cut the banana trees on the property
worth about P50.00.
This was corroborated by a
certain Anita Duaban, a friend of the
petitioner, who likewise executed an
affidavit to the effect that she saw the
private respondent indiscriminately
cutting the banana trees. 12
The Revised Penal Code, as
amended, provides that "any person
who shall deliberately cause to the
property of another any damage not
falling within the terms of the next
preceding chapter shall be guilty of
malicious mischief." 13
The elements of the crime of
malicious mischief are:
1.
The offender deliberately
caused damage to the property
of another;
2.
The damage caused did not
constitute
arson
or
crimes
involving destructions.
3.
The damage was caused
maliciously by the offender.
After a review of the facts and
circumstances of this case, we rule
that the aforesaid criminal case
against the private respondent be
dismissed.
The private respondent can not
be held criminally liable for malicious
mischief in cutting the banana trees
because, as an authorized occupant or
possessor of the land, and as planter

of the banana trees, he owns said


crops including the fruits thereof. The
private respondent's possession of the
land is not illegal or in bad faith
because he was allowed by the
previous owners to enter and occupy
the premises. In other words, the
private respondent worked the land in
dispute with the consent of the
previous
and
present
owners.
Consequently, whatever the private
respondent planted and cultivated on
that piece of property belonged to him
and not to the landowner. Thus, an
essential element of the crime of
malicious mischief, which is "damage
deliberately caused to the property of
another," is absent because the
private respondent merely cut down
his own plantings. prcd
WHEREFORE, the Order of public
respondents dated November 15,
1986 is SET ASIDE and Criminal Case
No. 4003, is hereby DISMISSED. Let a
copy of this decision be sent to the
Municipal Trial Court of Talisay, Cebu
for appropriate action. This Decision is
IMMEDIATELY EXECUTORY.
No costs.
SO ORDERED.
Melencio-Herrera (Chairman),
Paras, Padilla and Regalado, JJ.,
concur.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-20098
31, 1966

January

SILVERIO LATAG, plaintiff-appellant,


vs.
MARCELO BANOG, defendantappellee.
Endaya, Caleasal and Delgado for the
plaintiff-appellant.
Suanes, Barbosa and Atienza for the
defendant-appellee.
ZALDIVAR, J.:
This is an appeal from the order of the
Court of First Instance of Batangas
dismissing the complaint in its Civil
Case No. 1263, on the ground that
said court has no jurisdiction to take
cognizance of the case.
On February 13, 1962 the plaintiffappellant filed a complaint against the
defendant-appellee
alleging,
in
substance: that the defendant is the
absolute owner of two parcels of land
situated in Barrio Quilib, Rosario,
Batangas; that on December 7, 1960,
the plaintiff and the defendant
entered into a written contract
whereby it was agreed that the
former was to act as manager,
cultivator and caretaker of the two
parcels of land owned by the latter,
and of all the useful plants planted,
and to be planted, on said lands, with
the understanding that all the
products of the orange and the
calamansi trees planted thereon
would be divided into three equal
parts; two-thirds of which would be
the share of the plaintiff and one-third
would be the share of the defendant,
while the sharing in the other
products
like
coffee,
bananas,
mangoes, black pepper and others
would be on the fifty-fifty basis; and it
was
further
agreed
that
said
relationship
and
sharing
would
continue for a period of five years
from
December
7,
1960;
that

pursuant to said agreement the


plaintiff
entered
into
the
management, cultivation and care of
the above-mentioned properties, and
had built a house costing P70.00 on
one of the two parcels of land, that
the plaintiff had incurred actual
expenses in the total amount of
P2,286.80
aside
from
other
miscellaneous expenses for food and
viand of his laborers; that on January
11, 1962, without any legal ground
nor justification whatsoever the
defendant drove the plaintiff out of
the lands and even destroyed the
house that the plaintiff had built
thereon; that notwithstanding all
efforts of the plaintiff to make the
defendant comply with his part of the
agreement in their written contract,
the defendant had adamantly refused.
The complaint prayed that judgment
be rendered ordering the defendant
to pay the plaintiff actual damages in
the amount of P2,656.80, unrealized
profits in the amount that the court
would fix after hearing the evidence,
moral damages in the amount of at
least P5,000.00, exemplary damages
in the amount of at least P5,000.00,
plus attorney's fees equivalent to 20%
of the total amounts collected and the
costs of the suit. A copy of the written
agreement in question was attached
to the complaint as Annex "A".
On March 2, 1962 the defendant filed
a motion to dismiss the complaint on
the ground that the court has no
jurisdiction to take cognizance of the
case and that the complaint did not
state a cause of action. It is
contended by the defendant that,
based on the allegations in the
complaint and as stated in the written
agreement which was attached to the
complaint as Annex "A", a relationship
of landlord and tenant had existed
between
the
plaintiff
and
the
defendantthe plaintiff being the
tenant and the defendant being the
landlord, and the complaint being one
that seeks to secure a decision or
settlement of differences or disputes
in connection with the relationship of
landlord and tenant involving the
cultivation and use of agricultural
land, it is the Court of Agrarian

Relations and not the Court of First


Instance that has jurisdiction to hear
and decide the case. The defendant
points out that the complaint of the
plaintiff poses the question of whether
the act of the defendant, as landlord,
in dispossessing the plaintiff, as
tenant, of the two parcels of land was
justified or not under the law.
On March 5, 1962, the plaintiff filed
an opposition to the motion to dismiss
the complaint and at the same time
moved
to
amend
the
original
complaint by striking out the words
"cultivator"
and
"cultivation"
in
paragraphs 3 & 4, of the original
complaint, claiming that the one who
drafted the original complaint was not
well versed in Tagalog such that the
phrase
"tagapamahala
at
tagapagalaga" was translated into
"manager, cultivator and caretaker"
whereas that phrase "tagapamahala
at tagapagalaga" ought to be
translated into English only as
"manager and caretaker" without
including
any
statement
about
cultivation. In his opposition to the
motion to dismiss the plaintiff
contends that in the contract, Annex A
to
the
complaint,
no
tenancy
relationship was agreed upon and the
complaint was intended to recover
damages so that it is the court of
general jurisdiction, which is the Court
of First Instance, and not the Court of
Agrarian Relations, which is a court of
limited
jurisdiction,
that
has
competence to hear and decide the
case.1wph1.t
On March 27, 1962 the Court of First
Instance of Batangas, acting on the
motion to dismiss the complaint,
issued an order dismissing the case.
In its order of dismissal the court a
quo stated:
This Court believes and so holds
that the argument of the
defendant is well-taken, and
agrees with him that the
document, Annex "A", indicates
the
existence
of
tenancy
relationship
between
the
plaintiff and the defendant,
considering the ruling of our

Supreme Court in the case of


Teodorico B. Santos vs. Court of
Industrial Relations, et al., G.R.
No. L-17196, prom. Dec. 28,
1961, "that any matter that may
pertain to the relation of tenant
and landlord comes under the
Agricultural Tenancy and any
controversy that may arise
between them as an incident of
their Act (Republic Act No.
1199, as amended by Republic
Act
No.
2263)
and
any
controversy that may arise
between them as an incident of
their relationship comes under
the exclusive jurisdiction of the
Court of Agrarian Relations
created by Republic Act. No.
1267. It was created for
enforcement of all laws and
regulations
governing
the
relation of capital and labor on
all agricultural lands under any
system of cultivation (Section 1,
Rep. Act No. 1267, as amended
by Republic Act No. 1409) and
was given exclusive jurisdiction
over the entire Philippines to
consider, disputes established
by law which determine the
varying rights of persons in the
cultivation
and
use
of
agricultural land where one of
the parties works the land", and
so this Court believes and so
declares
that
it
has
no
jurisdiction to pass upon the
issues of the case at bar, falling
as they do, according to the
above
citation
under
the
exclusive jurisdiction of the
Court of Agrarian Relations.
Before this Court, plaintiff-appellant
insists that the contract (Annex A)
does not establish any tenancy
relationship, or if it did, such
relationship had already ceased
inasmuch as he does not ask for
reinstatement as tenant. He claims
that this case is a simple suit for
damages which the Court of Agrarian
Relations cannot take cognizance of,
it being a court of special and limited
jurisdiction.

The contract (Annex A) contains the


following pertinent stipulations:
Na si Silverio Latag, ganap sa
gulang,
Filipino,
asawa
ni
Cipriana Alday at naninirahan sa
Tambo, Lipa City ay aking
ginawang
tagapamahala
at
tagapag-alaga sa naulit na lupa;
na
siya
rin
ang
mamomosession, mamamahala
sa mga halamang nakatanim at
itatanim sa lupang naulit sa
loob ng limang taon.
Na si Silverio Latag, ang magaalaga sa mga halaman ng
lupang nabanggit; na ang lahat
ng
kagastusang
maaaring
makamit o kailanganin sa pagaalaga ay siyang lahat ang
nakakaalam;
at
walang
PAKIALAM ang may-ari ng lupa.
Na ang kasunduan naming ito
ay tatagal sa loob ng limang (5)
taon simula ngayon; na ang
kasunduang
ito
ay
nagpapatunay din na ang
bahagi ay akong may-ari ng
lupa ay sa ikatlo (1/3) sa sinturis
at kalamansing aanihin dito; at
hati (50-50) parte sa bunga ng
mga halamang sumusunod, (1)
kape; (2) saging; (3) mangga;
(4) at paminta at sa mga ibang
halamang itatanim pa ng naulit
na si Silverio Latag.
In the original complaint the plaintiff
used the words "manager, cultivator
and caretaker" of the two parcels of
land concerned, but on the excuse
that the one who prepared the
complaint was not well versed in
Tagalog,
the
complaint
was
subsequently amended whereby the
word "cultivator" was deleted in the
allegations of the complaint. We note,
however that in the contract, Annex
"A" to the complaint, it is clearly
provided that the plaintiff would take
care of the plants that are planted
and those still to be planted on the
lands within a period of five years
("mamamahala sa mga halamang
nakatanim at itatanim sa lupang
naulit sa loob ng limang taon").

This
Court
believes
that
the
allegations of the complaint (even as
amended) and the stipulations of the
contract (Annex A) unmistakably show
that an agricultural tenancy of the
kind called "share tenancy" was
established between the parties. It
has
been
declared
that
"an
agricultural tenancy classified as
`share tenancy' exists where a person
has physical possession of another's
land for the purpose of cultivating it
and giving the owner a share in the
crop" (Marcelo vs. De Leon, L-12902,
July 29, 1959). This Court in the same
case held:
x x x x He knows the caretaker
must water the trees, even
fertilize
them
for
better
production, uproot weeds and
turn
the
soil,
sometimes
fumigate to eliminate plant
pests,
etc.
Those
chores
obviously mean "working or
cultivating" the land. x x x x
It may thus be stated that the
"caretaker" of an agricultural land is
also considered the "cultivator" of the
land.
As
regards
plaintiff-appellant's
contention
that
the
tenancy
relationship,
if
any,
had
been
terminated because his claim was
only
for
damages
without
reinstatement to his status as tenant,
suffice it to say that in the instant
case the plaintiff-appellant's claim for
damages was based on his having
been
allegedly
dispossessed
unlawfully or unjustifiably by the
defendant-appellee of the two parcels
of
land
under
his
care
and
management sometime on January 1,
1962. It is clear that the action relates
to an incident arising from the
landlord and tenant relationship which
existed shortly before the filing of the
complaint on February 13, 1962.
Under the circumstance, the Court of
Agrarian Relations has the original
and exclusive jurisdiction over the
case, even if the tenancy relationship
no longer existed at the time of the
filing of the action. On this point this
Court ruled as follows:

Indeed, Section 21 of Republic


Act No. 1199, provides that "all
cases
involving
the
dispossession of a tenant by the
landlord or by a third party
and/or the settlement and
disposition of disputes arising
from the relationship of landlord
and tenant . . . shall be under
the original and exclusive
jurisdiction of the Court of
Agrarian
Relations."
This
jurisdiction does not require the
continuance of the relationship
of
landlord
and
tenant at the time of the
dispute. The same may have
arisen, and often times arise,
precisely from the previous
termination of such relationship.
If
the
same
existed
immediately, or shortly before
the controversy and the subjectmatter thereof is whether or not
said relationship has been
lawfully terminated, or if the
dispute otherwise springs or
originates from the relationship
of landlord and tenant, the
litigation is cognizable only by
the
Court
of
Agrarian
Relations, . . . (Basilio vs. De
Guzman, et al., L-12762, April
22, 1959).
On the point that the present case
comes under the exclusive jurisdiction
of the Court of Agrarian Relations
even if the action is only for the
recovery of damages based on the
unlawful dispossession of the tenant,
this Court held:
Section 7, Republic Act No.
1267, as amended, vests in the
Court of Agrarian Relations
exclusive
and
original
jurisdiction
to
determine
controversies
arising
from
landlord-tenant
relationship.
From this it may be inferred that
it also has jurisdiction to hear
and determine actions for
recovery of damages arising
from the unlawful dismissal or
dispossession of tenant by the
landlord, as provided in Act No.
4054 and Republic Act No.

1199, as amended. To hold


otherwise
could
result
in
multiplicity
of
suits
and
expensive litigations abhorred
by the law . . . . (Militar vs.
Torcillero, et al., L-15065, April
28, 1961).
We hold, therefore, that the lower
court did not commit error when it
dismissed the complaint in the
present case.
Wherefore, the order of dismissal
appealed from is affirmed, with costs
against plaintiff-appellant.
Bengzon,
C.J.,
Bautista
Angelo,
Concepcion, Reyes, J.B.L., Barrera,
Dizon,
Regala,
Makalintal
and
Bengzon,
J.P.,
JJ.,
concur.
Sanchez, J., took no part.

Jose A. Buendia and Agustin A.


Pelmoka
for
petitioner.
Jesus A. Garcia for respondent Felix
Macaraeg.
CASTRO, J.:
Before us for review, upon a petition
for certiorari, are the decision of the
respondent
Court
of
Agrarian
Relations of September 7, 1962 in CAR
case 558-Gba. 68 (Nueva Ecija),
ordering the herein petitioner Fidel
Teodoro to reinstate the herein private
respondent
Felix
Macaraeg
(the
petitioner in the agrarian court) to his
"former landhoding ... and to keep him
as the true and lawful tenant in
accordance with law," and the
resolution of the same court of
November 27, 1962 condemning
Teodoro to pay or deliver to Macaraeg
as damages "82 cavans of palay or its
equivalent value in the amount of
P820.00 computed at the rate of
P10.00 per cavan, plus interest at 10%
until fully paid."
We turn to the factual milieu.
On June 7, 1961 Macaraeg filed a
petition with the Court of Agrarian
Relations (Second Regional District,
sala II, Guimba, Nueva Ecija) praying,
inter alia, that (1) an interlocutory
order be issued to restrain Teodoro
and Jose Niegos (the respondents
below), from ejecting him from his
landholding pending resolution of his
petition; and (2) after due trial, he be
maintained as the lawful tenant in the
disputed landholding.

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. L-20700
27, 1969

February

FIDEL TEODORO, petitioner,


vs.
FELIX MACARAEG and COURT OF
AGRARIAN RELATIONS, Second
Regional District, Sala II,
respondents.

Macaraeg alleged that he is a


leasehold
tenant
of
Teodoro
cultivating a farmholding situated in
the municipality of Talugtug, Nueva
Ecija, of an area of four (4) hectares
devoted to rice culture, and that he
has worked said land "as a tenant for
the last seven years"; that on March 2,
1961 he received a letter from
Teodoro and his wife advising him that
the aforesaid landholding will be given
to another tenant, on the pretext that
he (Macaraeg) "is contracting be a
tenant of another in said landholding";
that forthwith, Teodoro placed a new

tenant, Jose Niegos, in the disputed


land;
that
subsequently,
Niegos
repeatedly forbade him from working
on said riceland; that in order to avoid
trouble, he refrained from forcibly
entering the landholding, but with the
advent of the planting season, it
became imperative that the agrarian
court order his reinstatement and
restrain Teodoro and Niegos from
committing
further
acts
of
dispossession.
In his answer with counterclaim dated
June 19, 1961, Teodoro categorically
denied that Macaraeg was his tenant,
claiming that "ever since he became
the owner of around 39 hectares of
riceland in Kalisitan, Talugtug, N. Ecija,
he had always leased all of it under
civil lease and he had never given any
portion of it under tenancy." He
further
alleged
that
after
the
expiration of his lease contract with
Macaraeg in January, 1961, his wife
twice notified Macaraeg to renew his
contract for the then incoming
agricultural year 1961-62, but the
latter "verbally told Mrs. Teodoro that
he was no longer interested to work
on the land and he was giving it up as
he had left the place already." Teodoro
also claims that it was only after
Macaraeg
had
abandoned
the
farmland that he decided to lease it to
Niegos.
On his part, Niegos seasonably
answered, disclaming any knowledge
that Macaraeg is the tenant of
Teodoro, and averring that he entered
the landholding in good faith clothed
with the proper authority from the
other respondent (Teodoro) and with
the consent and confirmity of the
petitioner (Macaraeg) who allowed
him to work on the same"; and that
Macaraeg "has no more interests in
the cultivation of the landholding as
could be gleaned from his actuations,
like the failure to clean the land during
the months of March and April, and his
failure to prepare his seed bed in the
month of May which is the period for
broadcasting
seedling
in
the
community".

On February 6, 1962, when the


hearing of the present controversy
was nearing completion in the
respondent agrarian court but before
the case was submitted for decision,
Macaraeg
filed
a
"supplemental
petition", claiming damages as a a
result of his dispossession. Said
petition was given due course by the
court commissioner and the requisite
hearing was set for March 9, 1962.
Both Teodoro and Niegos interposed
their respective answers, identically
asserting that the same was filed out
of time and that the failure of
Macaraeg to claim earlier his alleged
damages amounted to a fatal neglect
which could no longer be cured at that
very late stage of the proceedings.
Nonetheless, hearing on the said
petition was disclosed that as "a result
of his (Macaraeg's) ejectment, he
became destitute" since he had no
"income except from those derived
from
transplanting
and
reaping
wherein he earned the amount of
P30.00". It was further proved that
"for the aqricultural year 1961-62,
Jose Niegos realized a gross harvest of
110 cavans out of which he paid his
rental to Fidel Teodoro in the amount
of 42 cavans and 23 kilos."
On September 7, 1962 the decision
under review was rendered, with the
following dispositive portion:
IN VIEW OF ALL THE FOREGOING
CONSIDERATIONS, judgment is
hereby rendered in favor of
petitioner Felix Macaraeg and
against
respondents
Fidel
Teodoro and Jose Niegos in the
tenor
and
disposition
hereinbelow provided, to wit:
1. Jose Niegos is hereby ordered
to vacate the landholding in
question with an approximate
area of four (4) hectares,
situated at Barrio Kalisitan,
Talugtug Nueva Ecija, in favor of
herein petitioner and to refrain
from molesting or in any
manner disturbing his peaceful
possession
and
cultivation
thereof, subject to the condition
that said respondent shall have

harvested and threshed his crop


which he planted for the current
agricultural year;
2.
Conformably
with
the
preceding
paragraph,
Fidel
Teodoro is hereby ordered to
reinstate said petitioner to his
former landholding aforestated
and to keep him as the true and
lawful tenant in accordance with
law;
3. Declaring Exhibit A as a
leasehold
tenancy
contract
between the parties for the
agricultural year 1960-61 as the
term is understood under our
tenancy law; as a consequence
hereof, Exhibit 4-Teodoro and
Exhibit 5-Niegos, i.e. contract of
lease between Fidel Teodoro and
Jose Niegos is hereby declared
void and of no legal effect; and
4. Dismissing petitioner's claim
for damages as embodied in his
supplemental petition.
Teodoro and Niegos filed separate
motions for reconsideration which
were denied by the respondent
agrarian court in its resolution of
November 27, 1962. However, in the
same resolution, the court a quo
reconsidered,
upon
motion
of
Macaraeg, its ruling denying the
latter's prayer for damages, thus:
With respect to petitioner's
claim for damages as embodied
in his supplemental petition,
wherein evidence was adduced
in support thereof, we believe
that
its
admission
is
in
accordance with Section 2, Rule
17 of the Rules of Court of the
Philippines, same not being for
the purpose of delaying the
proceedings. And, the fact that
the Court of Agrarian Relations
shall not be bound strictly by
the technical rules of evidence
but "shall act according to
justice
and
equity
and
substantial merits of the case",
we believe that the evidence to
support the claim for damages

received during the hearings


before the court commissioner
is meritorious (Secs. 10 and 11
RA 1267, as amended). Hence,
petitioner is entitled to recover
damages claimed by him from
his landholder in the amount of
85 cavans of palay which is
equal to the two years rental of
his landholding less his earnings
during the same period in the
amount of P30.00 only or is
equivalent to 3 cavans of palay.
In fine, Fidel Teodoro is liable to
pay to petitioner the amount of
82 cavans of palay or its cash
value of P820.00, computed at
P10.00 per cavan plus interest
at 10% until fully paid.
After Teodoro's motion to reconsider
the foregoing resolution was denied,
he interposed on January 5, 1963 the
present petition, imputing to the court
the following errors:
1. In holding that Macaraeg
became a tenant of Teodoro by
virtue of the "Contract of Lease"
which they executed in April,
1960;
2. Assuming that the foregoing
contract
was
in
effect a
leasehold tenancy agreement
making Macaraeg a tenant of
Teodoro in not finding the former
guilty of abandonment, an act
which terminated their tenancy
relation; and
3. In condemning Teodoro to pay
damages to Macaraeg for the
alleged dispossession, despite
the fact that the claim for
damages embodied in the
abovementioned "Supplemental
Petition" below were about to be
terminated.
The pertinent provisions of the
disputed "Contract of Lease" between
Teodoro and Macaraeg read as follows:
That
the
LESSOR
is
the
registered owner of a certain
parcel of land situated at
Talugtug,
Nueva
Ecija,

containing an area of THIRTY


NINE (39) HECTARES, more or
less;
That for and in consideration of
the rental of Nine (9) cavans of
palay per hectare for one
agricultural year, the LESSOR
hereby lets and leases and the
LESSEE hereby accepts an
undivided portion 4 Hectares
of the abovementioned property
under the following terms and
conditions:
1. That this contract of lease
shall only be for the agricultural
year 1960-61;
2. That the LESSEE shall give a
guaranty to answer for the
payment
of
the
lease
consideration of this contract;
3. That the rental of 38.7 cavans
of palay per hectare shall be
paid unto the LESSOR not later
than January, 1961;
4. That the corresponding rental
must
be
brought
to
the
Poblacion of Muoz, Nueva Ecija,
to be deposited to any bonded
Warehouse at the expense of
the LESSEE and in the name of
the LESSOR;
5. That the rental must be of the
same variety as that produced
by the LESSEE;
6. That the LESSOR shall pay for
the
real
property
taxes
corresponding to the property
leased;
7. That violation of any of the
terms of this contract shall be
sufficient ground to terminate
the same with damages against
the guilty party;
8. That the property leased shall
be
used
or
utilized
for
agricultural enterprise only;
9. That in case of default on the
part of the LESSEE to pay the

lease consideration when the


same becomes due and payable
and the collection for the same
reaches the court, the LESSEE
hereby binds himself to pay the
cost of the suit including
reasonable
attorney's
fees.
(Emphasis supplied)
I. Teodoro contends that the language
and tenor of the aforesaid contract
clearly manifest the intention of the
parties to enter into an ordinary civil
lease contract, not a leasehold
tenancy agreement as alleged by
Macaraeg and sustained by the
agrarian court. To start with, Teodoro
stresses, the parties denominated the
said covenant as a "Contract of
Lease", which assigned title discloses
their mutual intention to execute an
ordinary lease contract, for, otherwise,
if they had intended to create a
leasehold tenancy relation, they could
have accordingly captioned their
agreement "with the word tenancy or
some other word of similar import".
Moreover, Teodoro points out that "in
the contract of lease in question it is
significant to note that the words
landlord and tenant were conspicuous
by their complete absence".
The foregoing stance assumed by
Teodoro is patently untenable, in the
face of the principal features and
stipulations
of
the
contract
in
controversy
and
the
pertinent
provisions of existing law on leasehold
tenancy. It bears emphasis that the
title, label or rubric given to a contract
cannot be used to camouflage the real
import of an agreement as evinced by
its main provisions. Moreover, it is
basic that a contract is what the law
defines it to be, and not what it is
called by the contracting parties. 1
As correctly expressed by the
respondent court, "viewed from the
four corners of Exhibit A, we have no
doubt that the leasehold tenancy
contract
entered
into
between
petitioner
(Macaraeg)
and
Fidel
Teodoro is a pure and simple leasehold
tenancy contract as the term is
understood under our tenancy laws."
This observation of the agrarian court

finds anchor in the pertinent provision


of the Agricultural Tenancy Act. Thus,
section 4 of Rep. Act 1199, as
amended by Rep. Act 2263, provides
that
Leasehold tenancy exists when
a person who, either personally
or with the aid of labor available
from members of his immediate
farm household, undertaken to
cultivate a piece of agricultural
land susceptible of cultivation
by a single person together with
members of his immediate farm
household, belonging to a
legally possessed by another in
consideration of a fixed amount
in money or in produced or in
both.
Furthermore, section 42 of the
Agricultural Tenancy Act defines a
landlord-lessor as
Any person, natural or judicial,
either
as
owner,
lessee,
usufructuary or legal possessor
of agricultural land, who lets,
leases or rents to another said
property
for
purposes
of
agricultural production and for a
price certain of ascertainable
either in amount of money or
produced;
while a tenant-lessee is defined as
any person who, with the
consent of the former (landlordlessor),
tills,
cultivates
or
operates said land, susceptible
of cultivation by one individual,
personally or with the aid of
labor available from among his
own immediate farm household.
Gleaned
from
the
foregoing
provisions, the following could be
synthesized as the principal elements
of a lease-hold tenancy contract or
relation:
1. The object of the contract or
the
relationship
is
an
agricultural land which is leased
or rented for the purpose of
agricultural production;

2. The size of the landholding


must be such that it is
susceptible
of
personal
cultivation by a single person
with
assistance
from
the
members of his immediate farm
household;
3. The tenant-lessee
actually and personally
cultivate or operate said
solely or with the aid of
from
his
immediate
household; and

must
till,
land,
labor
farm

4. The landlord-lessor, who is


either the lawful owner or the
legal possessor of the land,
leases the same to the tenantlessee for a price certain or
ascertainable either in a amount
of money or produce.
Reverting
to
the
controverted
"Contract of Lease", we are of the
consensus that it indubitably contains
the forgoing essential elements of a
leasehold tenancy agreement.
The
landholding
in
dispute
is
unmistakably an agricultural land
devoted to agricultural production.
More
specifically,
the
parties
stipulated that "the property leased
shall be used or utilized for
agricultural
enterprise
only".
(Emphasis supplied). Furthermore, the
parties also agreed that the farmland
must be used for rice production as
could be inferred from the stipulation
that "the rental of nine (9) cavans of
palay per hectare for one agricultural
year ... must be of the same variety
(of palay) as that produced by the
LESSEE". (Emphasis supplied)
The land is definitely susceptible of
cultivation by a single person as it is
of an area of only four and A half (4) hectares. This Court has held 2 that
even a bigger area may be cultivated
personally by the tenant, singly or
with the help of the members of his
immediate farm household.
From the stipulation that "the rental
must be of the same variety as that
produced by the LESSEE", it can

reasonably be inferred that the


intention of the parties was that
Macaraeg personally work the land,
which he did as found by the Agrarian
Court, thus: "In the instant case,
petitioner (Macaraeg) cultivated the
landholding
belonging
to
said
respondent
(Teodoro)
for
the
agricultural
year
1960-61
in
consideration of a fixed annual rental."
(Emphasis supplied) Moreover, there
is no evidence that Macaraeg did not
personally cultivate the land in
dispute. Neither did Teodoro allege,
much less prove, that Macaraeg
availed of outside assistance in the
cultivation of the said riceland.
Teodoro is the registered owner of the
disputed landholding and he delivered
the possession thereof to Macaraeg in
consideration of a rental certain to be
paid in produce. Evidently, there was
a valid leasehold tenancy agreement.
Moreover, the provision that the rental
be accounted in terms of produce 9
cavans per hectare is an
unmistakable earmark, considering
the other stipulations, that the parties
did actually enter into a leasehold
tenancy relation.
Teodoro further argues, however, that
the aforesaid "Contract of Lease"
cannot possibly be construed as
establishing a leasehold tenancy
relation
because
the
parties
themselves ignored and repudiated
the very essence of tenancy
security of tenure when they
stipulated that "this agreement shall
only be for the agricultural year 196061".
This argument is unacceptable. The
mere fact that the parties fixed and
limited the duration of their lease
contract to only one agricultural year,
does not remove the relationship
which they created from the purview
of leasehold tenancy, considering the
general import of their agreement
which irreversibly leads to and clearly
justifies tenancy coverage. It is
fundamental that the tenant-lessee's
security
of
tenure
subsists
notwithstanding the termination of the
contract which initially established the

tenancy relation. In the language of


the law, the "expiration of the period
of the contract as fixed by the
parties ... does not of itself extinguish
the relationship". 3 This is a "practical
consequence
of
the
distinction
between the tenancy contract which is
fixed by the parties, and the tenancy
relationship which is maintained and
governed by law". 4 Furthermore,
section 49 of the Agricultural Tenancy
Act provides that
Notwithstanding any agreement
or provision of law as to the
period of future surrender of the
land, in all cases where land
devoted to any agricultural
purpose is held under any
system of tenancy, the tenant
shall not be dispossessed of his
holdings by the landholder
except for any of the causes
hereinafter enumerated and
only after the same has been
proved
before
and
the
dispossession is authorized bye
the court." (Emphasis supplied)
The abovecited provision does not
permit the parties to stipulate at what
future time the tenant shall leave or
surrender the land. Thus, this Court
has held 5 that an agreement whereby
the tenant was required to return to
the landlord his landholding after one
crop year cannot justify the tenant's
dispossession after the said period
because such agreement is expressly
proscribed by law.
Still vehemently contending that he
never intended to enter into any
tenancy relation with Macaraeg,
Teodoro finally argues that construing
the abovementioned "Contract of
Lease" as a leasehold tenancy
agreement would amount to a judicial
negation of his freedom to contract.
Needless to stress, this Court frowns
upon and rejects any attempt to
nullify the legitimate exercise of the
right to contract. We agree with
Teodoro that as a landholder he has
full liberty to enter into a civil lease
contract covering his property. What
we
want
to
indelibly
impress,

however, is that once a landowner


enters into a contract of lease
whereby his land is to be devoted to
agricultural
production
and said
landholding is susceptible of personal
cultivation by the lessee, solely or
with help of labor coming from his
immediate farm household, then such
contract is of the very essence of a
leasehold agreement, and perforce
comes under the direct coverage of
the tenancy laws. Otherwise, it would
be easy to subvert, under the guise of
the liberty to contract, the intendment
of the law of protecting the
underprivileged
and
ordinarily
credulous
farmer
from
the
unscrupulous schemes and pernicious
practices of the landed gentry.
II. We now come to the second
assignment of error. Teodoro posits
that granting the establishment of a
leasehold tenancy relation between
him and Macaraeg by virtue of the
aforesaid "Contract of Lease", the
agrarian court nevertheless erred in
not finding Macaraeg guilty of
abandonment,
an
act
which
terminates the tenancy relation and
justifies the ejectment of the tenant.
In support of his thesis, Teodoro points
out that Macaraeg committed a
positive act of abandonment when he
offered to vacate his leasehold in
favor of a certain Luciano Claus, and
only after "he could not have his own
way of placing Luciano Claus as his
successor" did he try to "recover the
land holding". Assuming the veracity
of the foregoing allegation, a tenant's
offer or intention to surrender his hold
on the condition that the person
named by him should be accepted as
his successor, does not of itself
constitute
abandonment
of
his
farmland.
"The word 'abandon', in its ordinary
sense, means to forsake entirely; to
forsake or renounce utterly. The
dictionaries trace this word to the root
idea of 'putting under a ban'. The
emphasis is on the finality and the
publicity with which some thing or
body is thus put in the control of
another, and hence the meaning of
giving up absolutely, with intent never

again to resume or claim one's rights


or interests." 6 In other words, the act
of abandonment constitutes actual,
absolute and irrevocable desertion of
one's right or property. In the case at
bar, Macaraeg merely intended to
vacate his leasehold possession on
the condition that a certain Claus be
taken as his successor. Hence, his act
did not constitute desertion of his
leasehold as it was a mere intended
surrender of the same. And as
correctly espoused by the counsel for
the respondent court, it is "only
through the actual surrender of the
land that tenancy relation terminates;
no amount of intention to surrender
severs the relationship". Furthermore,
the said act of Macaraeg was not an
absolute renunciation of his leasehold
possession, as it was in fact clearly
conditional.
However, Teodoro also claims, with
characteristic certitude that Macaraeg
did actually abandon work on the land
in dispute and that even the decision
under review contains a finding to this
effect. We find no statement in the
agrarian court's decision sustaining
Teodoro's view. On the contrary, we
perceive truth in the respondent
court's counsel's manifestation that
The only times that the tenant
herein did not work the land
were (1) during the time it was
undergoing its regular dry
season fallow, and, ... (2) after
he was prohibited from plowing
the land by a certain Niegos, an
agent of petitioner. Failure to
cultivate during the dry season
fallow
definitely
does
not
amount to abandonment (Cf. De
la Cruz vs. Asociacion Zangera
Casilan et al., 83 Phil. 214).
Likewise, failure to cultivate the
land by reason of the forcible
prohibition to do so by a third
party cannot also amount to
abandonment, for abandonment
presupposes free will.
Anent the charge of abandonment, it
is also pertinent to note that four days
after Macaraeg received a letter from
Teodoro and his wife advising him that

the landholding in question will be


given to another tenant, he lost no
time in inquiring from the Tenancy
Mediation Commission at Cabanatuan
City about his rights as a leasehold
tenant. It would appear therefore that
Macaraeg's immediate reaction to his
landlord's design to dispossess him
negates the act of abandonment
imputed to him.

which did not take place


because of the absence of
petitioner.
Under
these
circumstances, it appears to our
mind that while negotiations for
settlement were still pending,
yet petitioner has not, in truth
and in fact, surrendered his
landholding.
(Emphasis
supplied)

Moreover, Teodoro's pretension that


Macaraeg
had
abandoned
the
disputed landholding was squarely
rejected by the agrarian court, thus:

We are not at liberty to reverse the


foregoing finding of fact in the
absence of any proof that it is
unfounded or was arbitrarily arrived at
or that the Court had failed to
consider important evidence to the
contrary. 7 This Court has consistently
ruled that the findings of fact of the
Court of Agrarian Relations will not be
disturbed on appeal where there is
substantial evidence to support them.
8
In the case at bar, the finding of fact
by the by the respondent court anent
the issue of abandonment rests on
substantial evidence.

In the instant case, while


petitioner had intentions to
surrender his landholding to
respondent after the harvest for
the agricultural (year) 1960-61
which led the latter to advise
the former not to give his
landholding to Luciano Claus,
yet that surrender did not
materialize
because
said
petitioner
had
apparently
changed his mind. For as early
as March 6, 1961, petitioner
went to the Office of the
Tenancy Mediation Commission,
Cabanatuan
City
for
consultation. As a matter of fact,
said Commission wrote a letter
to Fidel Teodoro and his wife
advising them to enjoin their
overseer, Benito Ismael, from
ejecting petitioner.
During the intervening period,
Fidel Teodoro and his wife
entered into another lease
contract of tenancy with Jose
Niegos. For this reason, Mariano
Niegos, son of Jose Niegos,
prevented
petitioner
from
plowing his landholding when he
found him in the premises on
June
1,
1961.
However,
notwithstading this incident,
Fidel Teodoro opened the door
for negotiations. In fact, as late
as
June
23,
1961,
when
petitioner went to the house of
Fidel Teodoro in Manila, a
conference was set for that
purpose at the house of Benito
Ismael in Muoz, Nueva Ecija

III. Toward the end of the proceedings


in the respondent court, Macaraeg
interposed a pleading which he
denominated "supplemental petition",
wherein he asked for damages as a
result of his dispossession. The said
"supplemental petition" was given due
course by the hearing commissioner
and Macaraeg was allowed to present
evidence in support thereof. On the
basis of the evidence thus adduced,
the
respondent
court
awarded
damages to Macaraeg as decreed in
its abovementioned resolution of
November 27, 1962.
Teodoro maintains that the respondent
court erred in admitting the said
"supplemental pleading" on the basis
of section 2, Rule 17 (now section 3 of
Rule 10 of the Revised Rules of Court)
which
exclusively
pertains
to
amendment of pleadings, and has
nothing to do with the interposition of
supplemental pleadings which is
separately governed by section 5 of
Rule 17 (now section 5 of Rule 10).
Teodoro avers, moreover, that since
Macaraeg filed his claim for damages
only when the hearing below was
about to end, his inaction must be

considered as a waiver of such claim


or that he should be considered guilty
of fatal negligence.
In resolving this last assignment of
error, attentions must be centered on
the liberal policy which frees the Court
of Agrarian Relations from the fetters
of formalistic procedure. As aptly
observed in one case,9
Social justice would be a
meaningless term if in a
situation like the present, an
element of rigidity would be
affixed to procedure precepts
and made to cover the matter.
Flexibility should not be ruled
out. Precisely, what is sought to
be accomplished, by such a
fundamental principle expressly
so declared by the Constitution
(Art.
II,
sec.
5)
is
the
effectiveness
of
the
community's effort to assist the
economically
underprivileged.
For under existing conditions,
without
such
succor
and
support,
they
might
not,
unaided, be able to secure
justice for themselves....
Moreover, there is equally the
obligation on the part of the
State to afford protection to
labor. The responsibility is
incumbent then, not only on the
legislative
and
executive
branches but also on the
judiciary,
to
translate
this
pledge into a living reality. The
present case is an appropriate
occasion for the discharge of
such a trust. To preclude relief
under the circumstances herein
disclosed would be to fail to
submit to the dictates of a plain
constitutional duty. That we
should not allow to happen.
Since
the
abovementioned
"supplemental pleading" was filed
without
intent
to
delay
the
proceedings,
the
agrarian
court
exercised sound discretion in giving it
due course in order that "the real
matter in dispute and all matters in
the action in dispute between the

parties may, as far as possible, be


completely determined in a single
proceeding". Moreover Teodoro has no
reason to complain, for he was
accorded
every
opportunity
to
controvert
Macaraeg's
claim
for
damages, but apparently he did not,
as in fact he does not here traverse
the
substantiality
of
the
award.lawphi1.nt
Significantly, the Court of Agrarian
Relations is not restricted to the
specific relief claimed or demanding
made by the parties to the dispute,
but may include in the order or
decision any matter or determination
which may be deemed necessary and
expedient for the purpose of settling
the dispute or of preventing further
disputes, provided said matter for
determination has been established
by competent evidence during the
hearing". 10 In words, the respondent
court
could
have
determined
Macaraeg's claim for damages even
without his "supplemental petition",
provided
there
was
proof
to
substantiate such claim (and such
requisite evidence was not wanting).
Hence if the agrarian court could,
have awarded damages in favor of
Macaraeg even in the absence of a
specific prayer; then there is no
conceivable reason to bar the
respondent court from granting the
same with the interposition of the
aforesaid
"supplemental
petition"
which explicitly and unmistakeably
prays for damages resulting from
Macaraeg's dispossession.
We hasten to modify however, the
award of damages in so far as it
deducts from the total amount
recoverable by Macaraeg the sum of
P30 or its equivalent of 3 cavans of
palay, representing his earnings
during the period of his unlawful
ejectment. This part of the award
contravenes section 27(1) of the
Agricultural Tenancy Act which makes
the erring landlord "liable to the
tenant for damages to the extent of
the landholder's participation in the
harvest in addition to the tenant's
right under Section twenty-two of this
Act". And section 22(1) provides that

the "tenant shall be free to work


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

from the award of damages. Cost


against the petitioner.
Concepcion, C.J., Reyes, J.B.L., Dizon,
Makalintal,
Zaldivar,
Sanchez,
Fernando, Capistrano, Teehankee and
Barredo, JJ., concur.