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 Jose J. Francisco for respondents.

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:
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 property-owners 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.
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 1967, Macaya informed the corporation that he could not afford anymore to deliver any palay
because 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.
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.

the rules on agrarian reform do not apply. the tax declarations of real property and the annual receipts for real estate taxes paid have always classified the land as "residential". or to pay a price certain. 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. he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws. and 5) there is consideration (Agustin. 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. Thus. or legally possessed by. 1199 as amended by Republic Act No. Section 3 thereof defines agricultural tenancy as: xxx xxx xxx .. From the year 1948 up to the present. 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. 19). in consideration of which the former agrees to share the harvest with the latter. either in produce or in money. not in farming. 2263.The sole issue to be resolved in the present petition is whether or not a tenancy relationship exists between the parties.. we refer to Republic Act No. 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 . 3) there is consent. 2) the subject is agricultural land. Code of Agrarian Reforms of the Philippines. The Manotok family is engaged in the business of developing subdivisions in Metro Manila. the physical possession by a person of land devoted to agriculture belonging to. or in both. The property is in Balara. Since what is involved ed is agricultural tenancy. 4) the purpose is agricultural production. of which the six (6) hectares occupied by the private respondent form a part. This is so because unless a person has established his status as a de jure tenant.. Is the thirty-four (34) hectare lot. 1981. p. Metro Manila. the essential requisites of tenancy relationship are: 1) the parties are the landholder and the tenant.. the respondent appellate court declared the existence of an agricultural tenancy relationship and ordered Macaya's reinstatement to his landholding. not far from the correctly held by the trial court: University of the Philippines and near some fast growing residential subdivisions. Quezon City. another for the purpose of production through the labor of the former and of the members of his immediate farm household. as contra-distinguished from a de jure tenant. against agricultural land? If not. . The key factor in ascertaining whether or not there is a landowner-tenant relationship in this case is the nature of the disputed property.

weeding and application of insecticides. 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. The much bigger portions of the property are not suitable for palay or even vegetable crops. himself and with the aid available from within his immediate farm household. cultivates the land belonging to. Alongside the plowed or narrowed soil are concrete culverts for the drainage of residential subdivisions. 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. Under these definitions. another with the latter's consent for purposes of production. On this score alone. who. or possessed by. as the trial court noted. 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. As a matter of fact. lets or grants to another the use or cultivation of his land for a consideration either in shares under the share tenancy system.plowed soil. lessee. 5(b) A landholder shall mean a person. 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. Rep. . apparently. In the absence of an agreement as to the respective contributions of the parties or other terms and conditions of their tenancy agreement. 5(a) A tenant shall mean a person who. It held that while the petitioners at that time might have envisioned a panoramic residential area of the disputed property. or legal possessor. Another requisite is that the parties must be landholder and tenant. Whatever "visions" the owners may have had in 1946. under the leasehold tenancy system. On the other hand. usufructuary. natural or juridical. The trial court noted that in a letter dated April 12. is that the parties have not agreed as to their contributions of the several items of productions such as expenses for transplanting. fertilizers. 11 99 as amended defines a landholder — Sec. may Macaya be considered as a tenant and Manotok as a landholder? Significant. the lower court concluded that no tenancy relationship was entered into between them as tenant and landholder. only this case has kept the property in question from being developed together with the rest of the lot to which it belongs. then cogonal with some forest. either as owner. 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. it found that the houses found thereon were constructed only in the 70's. the decision of the respondent court deserves to be reversed. etc. particularly for 1946." The respondent court ignored all the above considerations and noted instead that the appellees never presented the tax declarations for the previous year. or a price certain under the leasehold tenancy system. a tenant is defined as — Sec. the year when Macaya began cultivating the property. Act No.

from 1946 to 1956 at which time. and the latter is only entitled to 10 cavans of rice per harvest. Thus. the respondent Appellate Court disagreed. 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. the inevitable fact is that appellant cleared. there was no payment whatsoever. 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. Appellant and Don Severino have agreed and followed a system of sharing the produce of the land whereby. During that year. Going over the third requisite which is consent. which as a result thereof. make the conclusions of the Court of Agrarian Relations clearly contrary to law and jurisprudence. 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. This is the essense of leasehold tenancy. 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. Under these circumstances. Vicente Herrera was the overseer. and the conclusions stated therein are not clearly against the law and jurisprudence. however. together with the third requisite. the former takes care of all expenses for cultivation and production.. that from 1967 to the present. Moreover. as the appellees preferred to call him. The private respondent. The last requisite is consideration. . the trial court observed that the property in question previous to 1946 had never been tenanted. At the most and during the limited period when it was in force.On this matter. irrigation.. seedlings. cultivated and developed the once unproductive and Idle property for agricultural production. It held that: . 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. On the other hand. It should be noted. and other items. Macaya was also planting rice. As earlier stated. has long stopped in paying the annual rents and violated the agreement when he expanded the area he was allowed to use. Neither can such relationship be implied from the facts as there was no agreed system of sharing the produce of the property. We agree with the trial court that this was also absent. coupled by the fact that the land is forested and rolling. This is the produce to be divided between the landholder and tenant in proportion to their respective contributions. 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. the fourth requisite which is the purpose was also not present. the duration of the temporary arrangement had expired by its very terms. however. he might as well not deliver any. Whether the appellant was instituted as tenant therein or as bantay. Moreover. 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.

there was no agreement as to any system of sharing the produce of the land. na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANG TAHANAN. . na nasa Payong. na nasa Payong..After painstakingly going over the records of the case. (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 DALAWAMPUNG (20) kabang palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1963 ng lupang ari ng Manotok Realty. It is quite clear from the 44-page decision of the trial court. Inc. d) Exhibit "11" adopted and marked as Exhibit "M" for plaintiff (Macaya): Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang ng palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1965 ng lupang ari ng Manotok Realty. It bears re-emphasizing that from 1946 to 1956. 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. Inc. na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANG TAHANAN. The situation was rather strange had there been a tenancy agreement between Don Severino and Macaya. na nasa Payong. Q. Quezon City. From 1957 to 1964. Macaya was requested to contribute ten (10) cavans a year for the payment of the realty taxes. 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. that the latter has taken extra care and effort in weighing the evidence of both parties of the case. Teodoro Macaya ang sampung (10) cavan na palay bilang tulong niya sa pagbabayad ng amillaramiento sa lupa ng corporation na nasa Payong. Quezon City.. c) Exhibit "10" adopted and marked as Exhibit "N" for plaintiff (Macaya): Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1964 ng lupang ari ng Manotok Realty Inc. na kaniyang binabantayan. we find no valid and cogent reason which justifies the appellate court's deviation from the findings and conclusions of the lower court. We find the conclusions of the respondent appellate court to be speculative and conjectural. Quezon City. na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANGTIRAHAN.C.

and. he did not contribute to the real estate taxes even as he dealt with the land as if it were his own.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. Macaya has refused to vacate extremely valuable residential land contrary to the clear agreement when he was allowed to enter it. However. raising animals and planting crops for personal use. The presence of Macaya would serve to protect the property from squatters. In return. The respondent appellate court disregarded the receipts as self-serving. the petitioners have been overly generous and understanding of Macaya's problems. Mr. Macaya and his family. Macaya nevertheless signed them voluntarily. We can understand the sympathy and compassion which courts of justice must feel for people in the same plight as 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. he lived on the property. the petition is GRANTED. The facts of the case show that even Mr. 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. From 1967 to the present. He abused the generosity of the petitioners when he expanded the permitted area for cultivation from three hectares to six or eight hectares. 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. WHEREFORE. Furthermore. that the nature of the work of Macaya is that of a watchman or guard (bantay). the receipts were written in the vernacular and do not require knowledge of the law to fully grasp their implications. 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. . Besides. SO ORDERED. For ten years from 1946 to 1956. with only his services as "bantay" compensating for the use of another's property. 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. Bocanegra. While it is true that the receipts were prepared by petitioner Perpetua M. that the services of Macaya as such watchman or guard (bantay) shall continue until the property shall be converted into a subdivision for residential purposes.

and respondent DOLE Philippines. denying SEARBEMCOs motion for reconsideration. Inc. all Cavendish bananas of required specifications to be planted on the land owned by SEARBEMCO. and November 27. SP No.STANFILCO EMPLOYEES AGRARIAN REFORM BENEFICIARIES MULTIPURPOSE COOPERATIVE. 66148 dated November 27. DEL CASTILLO. INC. as buyer. ORIBANEX SERVICES. 1998. No. x ------------------------------------------------------------------------------------------x DECISION BRION.R. - versus - G. LEONARDO-DE CASTRO. J.6367 hectares. THE FACTUAL ANTECEDENTS On January 29. The BPPA provided that SEARBEMCO shall sell exclusively to DOLE. as seller. Respondents. and the latter shall buy from the former. more or . JJ. The BPPA states: The SELLER agrees to sell exclusively to the BUYER. entered into a Banana Production and Purchase Agreement[4] (BPPA).R. (Stanfilco Division) (DOLE). Petitioner.: Before this Court is the petition for review on certiorari[1] filed by petitioner Stanfilco Employees Agrarian Reform Beneficiaries Multi-Purpose Cooperative (SEARBEMCO). and (b) the CAs resolution[3] of June 13. and ABAD. Chairperson. Promulgated: (STANFILCO DIVISION). 2009 SPOUSES ELLY AND MYRNA ABUJOS. BRION. and the BUYER agrees to buy all Cavendish Banana of the Specifications and Quality described in EXHIBIT A hereof produced on the SELLERS plantation covering an area of 351. 2002 in the same case. 2001. 154048 Present: CARPIO.. It assails: (a) the decision[2] of the Court of Appeals (CA) in CA-G. J. INC. SEARBEMCO. DOLE PHILIPPINES.

less. Judgment upon the award rendered may be entered in any Philippine Court having jurisdiction or application may be made to such court for judicial acceptance of the award and as order of enforcement. [Emphasis supplied. the spouses Elly and Myrna Abujos (spouses Abujos). Inc.6367 hectares. SELLER will produce banana to the maximum capacity of the plantation. To quote the BPPA: IX. with a prayer for the issuance of a writ of preliminary injunction and of a temporary restraining order. through the spouses Abujos. . as much as practicable. 790 as amended on November 6. ARBITRATION OF DISPUTE All disputes arising in connection with this Agreement shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by three (3) Arbitrators appointed in accordance with said Rules. to do the following: V. DOLE filed a complaint with the Regional Trial Court [5] (RTC) against SEARBEMCO. consistent with good agricultural practices designed to produce banana of quality having the standards hereinafter set forth for the duration of this Banana Production and Purchase Agreement. 2000. The Arbitration shall be held in a venue to be agreed by the parties. SPECIFIC OBLIGATIONS OF THE SELLER xxx p. and Oribanex Services. However. The SELLER shall only sell bananas produced from the plantation and not from any other source. the bananas rejected by DOLE. SEARBEMCO bound and obliged itself. If the SELLER plants an area(s) in excess of said 351. 1999 under the terms and conditions herein stipulated. as the case may be. The SELLER shall not increase or decrease the area(s) stated above without the prior written approval of the BUYER. Article V of the BPPA which limited the sale of rejected bananas for domestic nonexport consumption. inter alia. In the case of any such rejected bananas. in violation of paragraph 5(p). DOLE further alleged that Oribanex is likewise an exporter of bananas and is its direct competitor.] Any dispute arising from or in connection with the BPPA between the parties shall be finally settled through arbitration. and which is planted and authorized under letter of instruction no. for domestic non-export consumption. the SELLER may reduce said area(s) provided that if the SELLER replaces the reduction by planting bananas on an equivalent area(s) elsewhere. DOLE alleged that SEARBEMCO sold and delivered to Oribanex. (Oribanex) for specific performance and damages.) Sell exclusively to the BUYER all bananas produced from the subject plantation. except those rejected by the BUYER for failure to meet the specifications and conditions contained in Exhibit A hereof. On December 11. the SELLER shall have the right to sell such rejected bananas to third parties. the parties may enter into a separate agreement regarding the production of said additional acreage. it is agreed that such replacement area(s) shall be deemed covered by the Agreement.

9-98) and Section 5(a) and (c) of Administrative Order No. INC. 2-99) of the Department of Agrarian Reform (DAR). 2000. 11. bearing plate no. SEARBEMCO responded with a motion to dismiss on the grounds of lack of jurisdiction over the subject matter of the claim. lack of cause of action.) That about 648 CONSUL marked boxes were packed and knowingly sold by defendant SEARBEMCO to ORIBANEX SERVICES. INC. since the dispute between the parties is an agrarian dispute within the exclusive competence of the DARAB to resolve.[6] SEARBEMCO argued that: 1) the Department of Agrarian Reform Adjudication Board (DARAB) has exclusive jurisdiction over the action filed by DOLE..) That about 373 CONSUL marked boxes were packed and knowingly sold by defendant SEARBEMCO to ORIBANEX SERVICES. LCV 918. through defendant Abujos is in utter violation of the Agreement between plaintiff [DOLE] and defendant SEARBEMCO that SEARBEMCO may sell bananas rejected by plaintiff to parties for domestic non-export consumption only. 02.) That the following day.DOLE narrated in its complaint how SEARBEMCO sold and delivered the rejected bananas to Oribanex through the spouses Abujos: 9. on April 12. pursuant to Sections 1 and 3(e) of Administrative Order [7] No. failure to submit to arbitration which is a condition precedent to the filing of a complaint. 2000. a copy of which is hereto attached as Annex B. April 13. however. for export. or any other dates prior thereto or made thereafter by defendant SEARBEMCO to defendant ORIBANEX SERVICES.) That the sale of a total of 712 boxes of rejected bananas covering April 12 and 13. through defendants Abujos.. INC. LDM 976 and delivered to defendant ORIBANEX for export at the TEFASCO Wharf covered by Abujos Delivery Receipt. in violation of Section 5(p) Article V of the Banana Production and Purchase Agreement. a copy of which is hereto attached and marked as Annex C. [DOLE] through its authorized security personnel discovered that defendant SEARBEMCO. 13. Series of 1999 [8] (AO No. and the complaints defective verification and certification of non-forum shopping. 12. INC. Series of 1998 (AO No. packed the bananas rejected by [DOLE] in boxes marked CONSUL in Packing Plant 32 in DAPCO Panabo and sold and delivered them to defendant Abujos. 10. 2000 at about 5:00 oclock in the afternoon. through defendants Abujos who carried and loaded the same on board a blue Isuzu Canter bearing plate no. 09.) That. . again the same security found that defendant SEARBEMCO continued to pack the bananas rejected by plaintiff in boxes marked as CONSUL and. in violation of paragraph 5(p) Article V of the Banana Production and Purchase Agreement. through defendants Abujos who carried and loaded the same on board a red Isuzu Forwarder. sold and delivered them to defendant ORIBANEX SERVICES. and delivered to defendant ORIBANEX for export at the TEFASCO Wharf covered by Abujos Delivery Receipt.

over actions between [SEARBEMCO] and [DOLE] for enforcement of the said Agreement when one commits a . 2001 an amended complaint. SEARBEMCO filed a special civil action for certiorari[16] with the CA alleging grave abuse of discretion on the part of the RTC for denying its motion to dismiss and the subsequent motion for reconsideration. therefore. 3) it did not violate Section 5(p). and 2) the Arbitration Clause of the BPPA is not applicable as.. under said [AO No. 6657). 9-98. In a decision dated November 27.[12] the amendment consisting of the Verification and Certification against forum shopping for DOLE executed by Danilo C. 2001. as the dispute between DOLE and SEARBEMCO has not been referred to and resolved by arbitration. Sec. among others. Quinto. 9-98 of the DAR. 6657[10] (RA No. since the rejected bananas were sold to the spouses Abujos who were third-party buyers and not exporters of bananas. SEARBEMCO moved for the reconsideration of the RTC Order. [14] The RTC denied the motion for lack of merit in its Order of July 12. THE RTC RULING The RTC denied SEARBEMCOs motion to dismiss in an Order dated May 16. Article V of the BPPA. any dispute arising from the interpretation and implementation of the BPPA is an agrarian dispute within the exclusive jurisdiction of the DARAB. DOLE filed on February 2. aside from SEARBEMCO. SEARBEMCO argued that the BPPA the parties executed is an agri-business venture agreement contemplated by DARs AO No. Reynaldo Echavez to execute the requisite Verification and Certification Against Forum Shopping and.[11] Subsequently. and 4) the complaint is fatally defective as the Board of Directors of DOLE did not approve any resolution authorizing Atty.2) the filing of the complaint is premature. 2001. the same is fatally defective. that: 1) the dispute between the parties is not an agrarian dispute within the exclusive jurisdiction of the DARAB under Republic Act No. the spouses Abujos and Oribanex who are not parties to the BPPA) as defendants. 2001. 9-98]. The CA ruled that the [DAR] has no jurisdiction.[15] THE CA RULING On July 26.[17] the CA found that the RTC did not gravely abuse its discretion in denying SEARBEMCOs motion to dismiss and motion for reconsideration. DOLEs Zone Manager.e. Thus. DOLE impleaded other parties (i. contrary to Article IX of the BPPA and Article V. 30(g)[9] of AO No. DOLE opposed SEARBEMCOs motion to dismiss alleging. 2001.[13] The trial court stated that the case does not involve an agrarian conflict and is a judicial matter that it can resolve.

. despite the fact that SEARBEMCO has not violated any provision of the BPPA. but the CA denied the motion for lack of merit in its resolution of June 13. not the DARAB. and 3. said the CA. despite DOLEs failure to submit its claim to arbitration a condition precedent to any juridical recourse. 6657. 2002.[21] ASSIGNMENT OF ERRORS In the present petition. the CA ruled that the omission of the word personal did not render the Verification and Certification defective. [20] On SEARBEMCOs argument that the Verification and Certification Against Forum Shopping under DOLEs amended complaint is defective for failure to state that this was based on personal knowledge. SEARBEMCO submits that the CA erred in ruling that: 1. as case law has it that only the parties to a suit.) the RTC has jurisdiction over the subject matter of the complaint of DOLE. DOLEs complaint falls within thejurisdiction of the regular courts. According to the CA.[18] It held that the case is not an agrarian dispute within the purview of Section 3(d) of RA No.breach thereof and for redress by way of specific performance and damages inclusive of injunctive relief.[19] but is an action to compel SEARBEMCO to comply with its obligations under the BPPA.) the complaint of DOLE states a cause of action. are bound by the judgment of the Court or quasi-judicial bodies. considering that the case involves an agrarian dispute within the exclusive jurisdiction of the DARAB. The arbitration clause under the BPPA. it called for the application of the provisions of the Civil Code. 6657. 2. in its complaint. applies only when the parties involved are parties to the agreement. whether for or against [DOLE] will not be binding on the [spouses Abujos] and [Oribanex]. as well as their successors-in-interest. not RA No. The CA likewise disregarded SEARBEMCOs emphatic argument that DOLEs complaint was prematurely filed because of its failure to first resort to arbitration. DOLE included the spouses Abujos and Oribanex as defendants. SEARBEMCO moved for reconsideration of the decision. if [DOLE] referred its dispute with [SEARBEMCO] to a Panel of Arbitrators. THE COURTS RULING We do not find the petition meritorious. any judgment rendered by the latter.) the filing of the complaint is not premature.

The BPPA. 6657 is clear in defining an agrarian dispute: any controversy relating to tenurial arrangements. and supplier of agricultural inputs. We fully agree with the CA. 6657 and its implementing rules is the focus on agricultural lands and the relationship over this land that serves as the basis in the determination of whether a matter falls under DARAB jurisdiction. whether the disputants stand in the proximate relation of farm operator and beneficiary. as where the power is exercised in an arbitrary and despotic manner by reason or passion or personal hostility. we have to be keenly aware that the CA undertook a Rule 65 review. We clarify at the outset that what we are reviewing in this petition is the legal question of whether the CA correctly ruled that the RTC committed no grave abuse discretion in denying SEARBEMCOs motion to dismiss. Section 3(d) of RA No. maintaining. 6657 and the characterization of the controversy as an agrarian dispute or as an agrarian reform matter in contending that the present controversy falls within the competence of the DARAB and not of the regular courts. of the challenged RTC ruling. changing or seeking to arrange terms or conditions of such tenurial arrangements. 2-99. as such. not a review on appeal. SEARBEMCO claims. stewardship or otherwise. landowner and tenant. [24] As the CA found. whether leasehold. any dispute arising from the BPPA is within the exclusive jurisdiction of the DARAB.SEARBEMCO mainly relies on Section 50 [22] of RA No. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers. [25] RA No. fixing. tenancy. over lands devoted to agriculture. [23] hence. tenants and other agrarian reform beneficiaries. Rule II[26] enumerates the instances where the DARAB shall have primary and exclusive jurisdiction. processing and marketing agreement. The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law. is imbued with public interest.SEARBEMCO also asserts that the parties relationship in the present case is not only that of buyer and seller. the RTCs action was not attended by any grave abuse of discretion and the RTC correctly ruled in denying SEARBEMCOs motion to dismiss. . as defined under Section 5 (c) (i) and (ii) of DAR AO No. In ruling for legal correctness. but also that of supplier of land covered by the CARP and of manpower on the part of SEARBEMCO. financing and technological expertise on the part of DOLE. or to act at all in contemplation of the law. we have to view the CA decision in the same context that the petition for certiorari it ruled upon was presented to the appellate court. A court acts with grave abuse of discretion amounting to lack or excess of jurisdiction when its action was performed in a capricious and whimsical exercise of judgment equivalent to lack of discretion. not on the basis of whether the RTC ruling on the merits of the case was correct. we have to examine the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the RTC ruling before it. In other words. SEARBEMCO concludes that the BPPA is not an ordinary contract. Therefore. is a joint venture and a production. but one that involves an agrarian element and. 6657 is procedurally implemented through the 2003 DARAB Rules of Procedure where Section 1. A notable feature of RA No. or lessor and lessee. including dispute concerning farm-workers associations or representations of persons in negotiating.

v. and (6) the harvest is shared between the landowner and the tenant or the agricultural lessee. there must exist a tenancy relationship between the parties. [Emphasis supplied].[32] . commercial. (5) there is personal cultivation on the part of the tenant or agricultural lessee. De Tangub v. Court of Appeals (191 SCRA 885). the law acknowledges other modes of tenurial arrangements to effect the implementation of CARP. xxx [A]grarian reform extends beyond the mere acquisition and redistribution of land. the requirement of the existence of tenurial relationship has been relaxed in the cases of Islanders CARP-Farmers Beneficiaries Muti-Purpose Cooperative. Inc. Lapanday Agricultural and Devt. documents. the DARAB cannot have jurisdiction. and written agreements between the parties. declared in Islanders that: [The definition of agrarian dispute in RA No. A principal factor. Inc. It also cannot be gleaned from the intention of the parties that they intended to form a tenancy relationship between them.[27] we held that: For DARAB to have jurisdiction over a case. [31] The Court. restructuring or readjustment of agricultural lands into residential. we held that the jurisdiction of the Department of Agrarian Reform is limited to the following: a. the present petition is properly cognizable by the regular courts. speaking through former Chief Justice Panganiban.) approval and disapproval of the conversion. SEARBEMCO has no allegation whatsoever in its motion to dismiss regarding any tenancy relationship between it and DOLE that gave the present dispute the character of an agrarian dispute. The elements of tenancy must first be proved by substantial evidence which can be shown through records. Corporation[30] and Cubero v. leasehold. In the absence of any such intent and resulting relationship. 6657 is] broad enough to include disputes arising from any tenurial arrangement beyond the traditional landowner-tenant or lessorlessee relationship. or any other agrarian relationship that could bring their controversy within the ambit of agrarian reform laws and within the jurisdiction of the DARAB. Court of Appeals. and other non-agricultural uses. In Vda. Court of Appeals [28] lists down the indispensable elements for a tenancy relationship to exist: (1) the parties are the landowner and the tenant or agricultural lessee. [29] SEARBEMCO has not shown that the above-mentioned indispensable elements of tenancy relations are present between it and DOLE.In Heirs of the Late Hernan Rey Santos v. We have always held that tenancy relations cannot be presumed.) adjudication of all matters involving implementation of agrarian reform. x x x. The parties in the present case have no tenurial. Inc. and c. v. (2) the subject matter of the relationship is anagricultural land.) resolution of agrarian conflicts and land tenure related problems. The case of Pasong Bayabas Farmers Association. (4) the purpose of the relationship is to bring about agricultural production. too. In fact. to consider in determining whether a tenancy relationship exists is the intent of the parties. as the CA and the RTC correctly ruled. (3) there is consent between the parties to the relationship. Notably. b. Laguna West Multi-Purpose Cooperative. industrial. Instead.

Batangas for having been executed within the 10-year prohibitory period under Section 27 of RA No. the principal issue raised in Islanders and Cubero referred to the management. the resolution of the issue raised in Islanders and Cubero required the interpretation and application of the provisions of RA No. as the case before us does now. neither did SEARBEMCOs motion to dismiss nor its other pleadings assail the validity of the BPPA on the ground that its provisions violate RA No. and use of the CARP-covered agricultural land. however. and use of an agricultural land covered by CARP. [33] .While Islanders and Cubero may seem to serve as precedents to the present case. filed a complaint against SEARBEMCO. 6657. the buyer. In both cases. 6657. The CA is thus legally correct in its declaration that the action before the RTC does not involve an agrarian dispute. 6657. in tandem with the terms and conditions of the [BPPA] of [SEARBEMCO] and [DOLE]. nor does it call for the application of Agrarian Reform laws. The Court declared that when the question involves the rights and obligations of persons engaged in the management. more than anything else. Indeed. Those cases significantly did not pertain to postharvest transactions involving theproduce from CARP-covered agricultural lands. 6657. the seller. 6657. The action of [DOLE] involves and calls for the application of the New Civil Code. The farmers-beneficiaries assailed the validity of the agreement by additionally claiming that its terms contravened RA No. Islanders questioned (through a petition for declaration of nullity filed before the RTC of Tagum City) the lack of authority of the farmer-beneficiaries alleged representative to enter into a Joint Production Agreement with Lapanday. x x x. Inc. the case falls squarely within the jurisdictional ambit of the DAR. The resolution of the present case would therefore involve. thus rendering the rulings in these cited cases inapplicable. rather than agrarian reform principles. DOLE. to enforce the BPPA between them and to compel the latter to comply with its obligations. cultivation. In the present case. the application of civil law provisions on breaches of contract. Cubero likewise involved a petition to declare the nullity of a Joint Venture Agreement between the farmer-beneficiaries and Laguna West Multi-Purpose Cooporative. the Court ruled that the RTC lacked jurisdiction to hear the complaint and declared the DARAB as the competent body to resolve the dispute. considering that the farmer-beneficiaries claimed that the agreements contravened specific provisions of that law. The successors of the farmer-beneficiaries assailed the agreement before the RTC of Tanauan. DOLEs complaint for specific performance and damages before the RTC did not question the validity of the BPPA that would require the application of the provisions of RA No. Moreover. the parties have capitalized and focused on their relationship as buyer and seller. the issue of the nullity of the joint economic enterprise agreements in Islanders and Cubero woulddirectly affect the agricultural land covered by CARP. in support of their arguments. cultivation. a close analysis of these cases. leads us to conclude that significant differences exist in the factual circumstances between those cases and the present case. Carefully analyzed.

however. in which event. can the court render a valid judgment in accordance with the prayer? To sustain a motion to dismiss. Due consideration of the basic rules on lack of cause of action as a ground for a motion to dismiss weighs against SEARBEMCOs argument. the test is as follows: admitting the truth of the facts alleged. the complaint.[34] this Court had the opportunity to discuss the sufficiency of the allegations of the complaint to uphold a valid cause of action.[35] . To prevent multiple actions. but a motion for a bill of particulars. Based on our above discussion. DARABs jurisdiction under Section 50 of RA No. Jr. to determine whether the sufficiency of the facts alleged in the complaint constitutes a cause of action. 6657 should be read in conjunction with the coverage of agrarian reform laws. DOLEs complaint validly states a cause of action SEARBEMCO asserts that the pleading containing DOLEs claim against it states no cause of action. and the inferences fairly deductible from. since the bananas rejected by DOLE were sold to the spouses Abujos who are third-party buyers and are not exporters of bananas transactions that the BPPA allows. Since the sole basis of DOLEs complaint was SEARBEMCOs alleged violation of the BPPA. v. the complaint is sufficient if it contains sufficient notice of the cause of action even though the allegations may be vague or indefinite. the complaint therefore did not state a cause of action. 9-98 and AO No. We do recognize the possibility that disputes may exist between parties to joint economic enterprises that directly pertain to the management. Hence. as follows: In a motion to dismiss. not a motion to dismiss. administrative issuances like DAR AO Nos. It contends that it did not violate any of the provisions of the BPPA.We find SEARBEMCOs reliance on DAR AO No. which SEARBEMCO insists did not take place. On the contrary. DARAB still cannot validly acquire jurisdiction. and use of CARP-covered agricultural land. Even assuming that the present case can be classified as an agrarian dispute involving the interpretation or implementation of agribusiness venture agreements. 2-99 as bases for DARABs alleged expanded jurisdiction over all disputes arising from the interpretation of agribusiness ventures to be misplaced. at least insofar as DOLEs cause of action against the third parties the spouses Abujos and Oribanex is concerned. This hypothetical admission extends to the relevant and material facts pleaded in. Jordana. the proper recourse would be. 9-98 and 2-99 cannot validly extend the scope of the jurisdiction set by law. a defendant hypothetically admits the truth of the material allegations of the plaintiffs complaint. we do not pass upon the validity of these administrative issuances. cultivation. these disputes will fall within DARABs jurisdiction. In so ruling. the movant needs to show that the plaintiffs claim for relief does not exist at all. In the case of Jimenez. we hold that the present case is best resolved by the trial court.

That the sale had been to the spouses Abujos who are not exporters is essentially a denial of DOLEs allegations and is not therefore a material consideration in weighing the merits of the alleged lack of cause of action. In the present case. since the arbitral ruling will not bind them. voluntary methods such as mediation or conciliation.. What SEARBEMCO stated is a counter-statement of fact and conclusion. a competitor of DOLE and also an exporter of bananas. Furthermore. To require the spouses Abujos and Oribanex to submit themselves to arbitration and to . 2-99 [37] which provide that as a rule. they were directly involved in the BPPA violation DOLE alleged. hence. not a strict requirement of referral to arbitration. we must hypothetically assume the truth of DOLEs allegations. At this point. a valid judgment may be rendered by the RTC holding SEARBEMCO liable for breach of contract. 9-98 [36] and Section 10 of DAR AO No. we hold following the test of sufficiency in Jordana that DOLEs prayer for specific performance and damages may be validly granted. Any judgment or ruling to be rendered by the panel of arbitrators will be useless if third parties are included in the case. Hypothetically admitting the allegations in DOLEs complaint that SEARBEMCO sold the rejected bananas to Oribanex. they are not parties to the arbitration agreement. We find the allegations in DOLEs complaint to be sufficient basis for the judgment prayed for. on its face. DOLE included as parties the spouses Abujos and Oribanex since they are necessary parties.In applying this authoritative test. The BPPA-based argument deserves more and closer consideration. The filing of the complaint is not premature since arbitration proceedings are not necessary in the present case SEARBEMCO argues that DOLE failed to comply with a condition precedent before the filing of its complaint with the RTC.. to be true. 2-99. only mentions a preference. DOLE did not attempt to settle their controversy through arbitration proceedings. SEARBEMCO also cites Section IX of the BPPA which provides that all disputes arising out of or in connection with their agreement shall be finally settled through arbitration.Hypothetically assuming DOLEs allegations of ultimate sale to Oribanex. SEARBEMCO relies on Article V. and determine whether the RTC can render a valid judgment in accordance with its prayer. We agree with the CA ruling that the BPPA arbitration clause does not apply to the present case since third parties are involved. the cited DAR AO No. a cause of action exists. and their participation are indispensable for a complete resolution of the dispute.e. and is a defense that it will have to prove at the trial. the material consideration is merely what the complaint expressly alleged. through the spouses Abujos. Following our conclusion that agrarian laws find no application in the present case. i. we find as the CA did that SEARBEMCOs arguments anchored on these laws are completely baseless. Section 30(g) of DAR AO No. shall be preferred in resolving disputes involving joint economic enterprises.e. through the spouses Abujos. i.

Laperal Realty Corporation [39] and Del Monte Corporation-USA v. As a rule. has the right to compel petitioners to first arbitrate before seeking judicial relief. v. i. the contention that the arbitration clause has become dysfunctional because of the presence of third parties is untenable. it would be in the interest of justice if the trial court hears the complaint against all herein respondents and adjudicates petitioners rights as against theirs in a single and complete proceeding. referral to arbitration in the State of California pursuant to the arbitration clause and the suspension of the proceedings in Civil Case No. In support of its position. and private respondent SFI. and private respondents MMI and its Managing Director Lily Sy are bound by the Agreement and its arbitration clause as they are the only signatories thereto. Derby. As such. However. On the other hand. Petitioners Daniel Collins and Luis Hidalgo. 2637-MN pending the return of the arbitral award could be called for but only as to petitioners DMC-USA and Paul E. Clearly. petitioners DMC-USA and its Managing Director for Export Sales Paul E. to split the proceedings into arbitration for respondent Laperal Realty and trial for the respondent lot buyers. SEARBEMCO cites the case of Toyota Motor Philippines Corp..e. Court of Appeals[38] which holds that. In ruling that prior resort to arbitration is not necessary. Salas. [41] The case of Del Monte is more direct in stating that the doctrine held in the Toyota case has already been abandoned: The Agreement between petitioner DMC-USA and private respondent MMI is a contract. SEARBEMCO argues that the presence of third parties in the complaint does not affect the validity of the provisions on arbitration. this Court held: Respondent Laperal Realty. Consequently.. Court of Appeals. are not bound by the Agreement and the arbitration clause therein. the ruling in the Toyota case has been superseded by the more recent cases of Heirs of Augusto L. or to hold trial in abeyance pending arbitration between petitioners and respondent Laperal Realty. Jr. v.[40] Heirs of Salas involved the same issue now before us: whether or not the complaint of petitionersheirs in that case should be dismissed for their failure to submit the matter to arbitration before filing their complaint. the parties are thereby expected to abide with good faith in their contractual commitments. would in effect result in multiplicity of suits. not parties to the Agreement and cannot even be considered assigns or heirs of the parties. their assigns and heirs.abide by whatever judgment or ruling the panel of arbitrators shall make is legally untenable. Derby. only parties to the Agreement. Unfortunately. no law and no agreement made with their participation can compel them to submit to arbitration. duplicitous procedure and unnecessary delay. The provision to submit to arbitration any dispute arising therefrom and the relationship of the parties is part of that contract and is itself a contract. Contracts are respected as the law between the contracting parties. contracts are respected as the law between the contracting parties and produce effect as between them. and private respondents . as a contracting party to the Agreement. The petitioners-heirs included as respondents third persons who were not parties to the original agreement between the petitioners-heirs and respondent Laperal Realty. Jr.

[42] Following these precedents. the inclusion of third parties in the complaint supports our declaration that the present case does not fall under DARABs jurisdiction. 6657 may be invoked only when there is prior certification from the Barangay Agrarian Reform Committee (or BARC) that the dispute has been submitted to it for mediation and conciliation. in accordance with the recent case of Heirs of Augusto L. premises considered. v. Salas. WHEREFORE. hence. without any success of settlement. SO ORDERED. Laperal Realty Corporation. the CA was therefore correct in its conclusion that the parties agreement to refer their dispute to arbitration applies only where the parties to the BPPA are solely the disputing parties. or suspension of trial pending arbitration. and not as to other parties in this case. Jr.[43] Since the present dispute need not be referred to arbitration (including mediation or conciliation) because of the inclusion of third parties. Additionally. xxxx The object of arbitration is to allow the expeditious determination of a dispute. is hereby directed to proceed with the case in accordance with this Decision.MMI and Lily Sy. there will be no compliance with Section 53 of RA No. the issue before us could not be speedily and efficiently resolved in its entirety if we allow simultaneous arbitration proceedings and trial. 6657. . which superseded that of [sic] Toyota Motor Philippines Corp. DARABs quasi-judicial powers under Section 50 of RA No. the interest of justice would only be served if the trial court hears and adjudicates the case in a single and complete proceeding. Court of Appeals. Costs against petitioner SEARBEMCO.Panabo City. Branch 34. Accordingly. we hereby DENY the petition for certiorari for lack of merit. The Regional Trial Court. neither SEARBEMCO nor DOLE will be able to present the requisite BARC certification that is necessary to invoke DARABs jurisdiction. v. Clearly.

Mendoza [5] (plaintiffs) filed a complaint with the Municipal Trial Court (MTC) of Sta. Nueva Ecija (subject property) under Transfer Certificate of 34267. Sta. and SERENO.R.** CARPIO MORALES.JOSE MENDOZA. On June 27. Rosa.J. x-----------------------------------------------------------------------------------------x DECISION BRION. respondent Narciso refused to vacate the subject property.[7] of land in Title No. 1988. BRION. was the plaintiffs agricultural lessee and he merely helped the latter in the cultivation as a member of the immediate farm household. means of repeated On August 9. respondent Benigno Germino. [8] . No. 48642. VILLARAMA. are briefly summarized below. 165676 Present: CORONA. SP No.* Petitioner. 1988. Despite the plaintiffs demands. Nueva Ecija against respondent Narciso Germino for forcible entry. the petitioner and Aurora C. Chairperson. JR. gathered from the records. Sometime in 1988. among others. that his brother.[4] FACTUAL BACKGROUND The facts of the case. 2010 GERMINO. J. - versus - G. Rosa.. and without their knowledge or consent. respondent Narciso filed his answer.[6] The plaintiffs claimed that they were the registered owners of a five-hectare parcel Soledad. Promulgated: NARCISO GERMINO and BENIGNO November 22. Respondents. respondent Narciso unlawfully entered the subject property by strategy and stealth.. claiming.R.: Before us is the petition for review on certiorari[1] filed by petitioner Jose Mendoza to challenge the decision[2] and the resolution[3]of the Court of Appeals (CA) in CA-G. JJ. C.

000. respondent Benigno had already made a P50.000 cavans of palay. they prayed that the respondents be ordered to jointly and severally pay 13. the MTC issued an order on October 27. 1996. they discovered that respondent Benigno had transferred possession of the subject property to respondent Narciso. PARAD Romeo Bello found that the respondents were mere usurpers of the subject property. Since the subject property could produce 100 cavans of palay per hectare for each cropping season. despite repeated demands from the plaintiffs for the return of the property.000 cavans of palay from the time they unlawfully withheld possession of the subject property in 1982 until the plaintiffs filed the complaint. 1995. The PARAD ordered the respondents to vacate the subject property. Without conducting a hearing. and pay the plaintiffs 500 cavans of palay as actual damages. He withheld possession of the subject property up to 1987. and despite respondent Narcisos objection. The respondents also asserted that jurisdiction over the complaint lies with the Regional Trial Court since ownership and possession are the issues. who refused to return the possession of the subject property to the plaintiffs and appropriated the lands produce for himself.00 as attorneys fees. the plaintiffs [10] filed an amended complaint with the Provincial Agrarian Reform Adjudicator (PARAD). despite repeated demands. [13] .[12] THE PARAD RULING In a March 19.[11] On January 9. or a total of 500 cavans per cropping season for the five-hectare land. Respondent Benigno unlawfully entered the subject property in 1982 or 1983 through strategy and stealth. but the plaintiffs refused to receive the balance and execute the deed of conveyance. or its monetary equivalent. in view of the tenancy issue raised by respondent Narciso. among others.After several postponements. The plaintiffs alleged that Efren Bernardo was the agricultural lessee of the subject property. 1995.[9] On December 14.00. the plaintiffs filed a motion to remand the case to the Department of Agrarian Reform Adjudication Board (DARAB). that the plaintiffs had no right over the subject property as they agreed to sell it to respondent Benigno for P87. noting that they failed to prove that respondent Benigno was the plaintiffs bona fide agricultural lessee. Cabanatuan City for further proceedings. the plaintiffs alleged that the respondents were able to harvest a total of 13. and appropriated for himself its produce.000.00 partial payment. 1996 decision.000. claiming. Thus. The subject property was fully irrigated and was capable of harvest for 2 cropping seasons. impleading respondent Benigno as additional defendant. and to pay P15. the respondents filed their answer denying the allegations in the complaint. As a matter of fact. remanding the case to the DARAB. as actual damages. In 1987. and without their knowledge or consent. to return possession of the subject property.

A. Thus. It held that it acquired jurisdiction because of the amended complaint that sufficiently alleged an agrarian dispute. . the CA set aside the DARAB decision and remanded the case to the MTC for further proceedings. THE ISSUE The core issue is whether the MTC or the DARAB has jurisdiction over the case. not the MTCs referral of the case. 1998. arguing that the case should have been dismissed because the MTCs referral to the DARAB was void with the enactment of Republic Act (R.[17] THE CA RULING The CA decided the appeal on October 6. 6657 abrogated the rule on referral previously provided in P. No. 6657.A. Moreover. not an agrarian dispute.D.[16] The respondents elevated the case to the CA via a petition for review under Rule 43 of the Rules of Court.[15] THE DARAB RULING The DARAB decided the appeal on July 22. neither the Rules of Court nor the Revised Rules on Summary Procedure (RRSP) provides that forcible entry cases can be referred to the DARAB. 316. [18] It found that the MTC erred in transferring the case to the DARAB since the material allegations of the complaint and the relief sought show a case for forcible entry.[21] THE PETITION The petitioner insists that the jurisdiction lies with the DARAB since the nature of the action and the allegations of the complaint show an agrarian dispute.) No. No.Not satisfied. When the CA denied[19] the subsequent motion for reconsideration. it affirmed the PARAD decision.[14] which repealed the rule on referral under Presidential Decree (P. Thus.D. 2003. the respondents filed a notice of appeal with the DARAB. 316. It noted that the subsequent filing of the amended complaint did not confer jurisdiction upon the DARAB. THE CASE FOR THE RESPONDENTS The respondents submit that R.) No. [20] the petitioner filed the present petition.

[25] the MTC shall have exclusive original jurisdiction over cases of forcible entry and unlawful detainer. (5) there is personal cultivation.[31] For a case to involve an agrarian dispute. [30] the DARAB has primary and exclusive jurisdiction. 6657. An agrarian dispute refers to any controversy relating to. That so defendant thru stealth. 129. [32] In the present case. . Plaintiffs are the registered owners of a parcel of land covered by and described in Transfer Certificate of Title Numbered 34267. Soledad. with an area of five (5) hectares. Sta. refused and up to the filing of this complaint. defendant Germino. or consent of administrator x x x much more of the herein plaintiffs. this matter being legislative in character. strategy and without the knowledge. enlarged or diminished by their act or omission. [23] Under Batas Pambansa Blg. and (6) there is sharing of harvest or payment of rental. x x x.A. [24] as amended by R. as well as Section 34 [29] of Executive Order No. as one of the plaintiffs in the MTC. No. Well to emphasize.[27] Under Section 50[28] of R. more or less situated at Bo. 7691. The RRSP[26] governs the remedial aspects of these suits.A. (3) there is consent. Jurisdiction is determined by the allegations in the complaint It is a basic rule that jurisdiction over the subject matter is determined by the allegations in the complaint. It cannot be conferred by the voluntary act or agreement of the parties. both original and appellate. 5. unlawfully entered and occupied said parcel of land. Rosa. 129-A. still refused to vacate the same. No.[22] It is determined exclusively by the Constitution and the law. nor conferred by the acquiescence of the court. made the following allegations and prayer in the complaint: 3. (2) the subject is agricultural land. Nueva Ecija. tenancy over lands devoted to agriculture. Inspite of x x x demands. to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program. and other agrarian laws and their implementing rules and regulations. the following essential requisites of an agricultural tenancy relationship must be present: (1) the parties are the landowner and the tenant. among others. 4. (4) the purpose is agricultural production. the petitioner. it is neither for the court nor the parties to violate or disregard the rule.OUR RULING We deny the petition. or acquired through or waived.

The plaintiffs are entitled to the relief demanded or prayed for. nor in any manner committing. 10.[33] Based on these allegations and reliefs prayed. performing or suffering to be committed or performed for him. described in paragraph 3 of this complaint. making said writ of preliminary injunction PERMANENT. it is respectfully prayed of this Honorable Court that pending the resolution of the issue in this case. a diminution of plaintiffs property rights or dominion over the parcel of land subject of this dispute. 7. or STOPPING the defendant or any person/s acting in his behalf. ENJOINING. P R AY E R WHEREFORE. and on plaintiffs damages. damage or injury consist of disturbance of property rights tantamount to deprivation of ownership or any of its attributes without due process of law. the award and amount of which are left to the sound discretion of this Honorable Court. including exemplary damages. The continuos (sic) and unabated occupancy of the land by the defendant would work and cause prejudice and irreparable damage and injury to the plaintiffs unless a writ of preliminary injunction is issued. judgment be rendered ordering the defendant to pay to the plaintiffs the sum alleged in paragraph 10 above.000. 9. performing or suffering to be committed or.00 per appearance/ not to mention the moral damages incurred due to sleepless nights and mental anxiety. GENERAL RELIEFS ARE LIKEWISE PRAYED FOR. by himself or thru another. performed for him. This prejudice. . or in any manner committing. THEREAFTER. As a consequence of defendants malevolent refusal to vacate the premises of the land in dispute. or tending to show any color of possession in or about the premises subject of this suit. it is clear that the action in the MTC was for forcible entry. any act indicative of. from ENTERING OR OCCUPYING the parcel of land. such as described in par. 3 of this complaint. and the whole or part of such relief/s consist of immediately or permanently RESTRAINING. ENJOINING or STOPPING the defendant or any person/s acting in his behalf.500. occupying. a restraining order be issued RESTRAINING. or any portion thereof. availing for the purpose the assistance of a counsel at an agreed honorarium of P5. plaintiffs incurred litigation expenses of P1.6. premises or subject of this suit.00 and P250. since they are deprived of freely entering or possessing the same.00. or tending to show any color of possession in or about the tenement. any act indicative of. 8. from entering. Plaintiffs are ready and willing to post a bond answerable to any damage/s should the issuance of the writ x x x.

The plaintiffs alleged in the amended complaint that the subject property was previously tilled by Efren Bernardo. committed no reversible error in setting aside the DARAB decision. although under the RRSP.Allegation of tenancy does not divest the MTC of jurisdiction Although respondent Narciso averred tenancy as an affirmative and/or special defense in his answer. In the absence of any allegation of a tenancy relationship between the parties. 48642 are AFFIRMED. to receive evidence to determine if such tenancy relationship had. Besides. the MTC should dismiss the case for lack of jurisdiction. While we lament the lapse of time this forcible entry case has been pending resolution. [42] The CA.R. has indeed been repealed by Section 76[41]of R. SP No. Section 2[40] of P. the petition is DENIED. No. without their knowledge and consent. such a hearing is not a matter of right.D. tenancy is the issue. [35] Under the RRSP. in fact.[37] The MTC may even opt to conduct a hearing on the special and affirmative defense of the defendant.A. therefore. The October 6.[39] In the present case. and the respondents took possession by strategy and stealth. This was contrary to the rules. jurisdiction is not affected by the pleas or the theories set up by the defendant in an answer or a motion to dismiss. been shown to be the real issue. we are not in a position to resolve the dispute between the parties since the evidence required in courts is different from that of administrative agencies. instead of conducting a preliminary conference. 6657 in 1988. jurisdiction would become dependent almost entirely upon the whims of the defendant. 2004 Resolution of the Court of Appeals in CA-G. Otherwise. which required the referral of a land dispute case to the Department of Agrarian Reform for the preliminary determination of the existence of an agricultural tenancy relationship.[43] WHEREFORE. 2003 Decision and October 12. indeed. if necessary. [38] If it is shown during the hearing or conference that. the MTC is duty-bound to conduct a preliminary conference [36] and. It continued to have the authority to hear the case precisely to determine whether it had jurisdiction to dispose of the ejectment suit on its merits. . the MTC immediately referred the case to the DARAB. Amended complaint did confer jurisdiction on the DARAB Neither did the amendment of the complaint confer jurisdiction on the DARAB. the action was for recovery of possession of real property that was within the jurisdiction of the regular courts. No pronouncement as to costs. 316. No.[34] After all. this did not automatically divest the MTC of jurisdiction over the complaint.

SO ORDERED. .