September 17, 2020 (Thursday) – Agricultural Tenancy (SocLeg)

1. Cayetano and Tiongson vs CA (G.R. No. L-62626)

2. Caballes vs DAR (G.R. No. 78214)
3. Hilario vs. IAC (G.R. No. 70736)
4. Guerrero vs. CA (G.R. No. L-44570) – Cultivation
5. Talavera vs CA (G.R. No. 77830)
6. Endaya vs. CA (G.R. No. 88113)
7. Milestone Realty vs CA (G.R. No. 135999) – succession
8. Basbas vs Entena (G.R. No. L-21)
9. Tan vs Pollescas (G.R. No. 145568)

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 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.

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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.

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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.

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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,

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 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 44-page 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:

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 (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 amillaramiento 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 DALAWAMPUNG (20) kabang palay na kanyang
tulong sa pagbabayad ng amillaramiento 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 DALAWAMPUNG (20)

kabang palay na kanyang tulong sa pagbabayad ng amillaramiento 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.

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, 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 watchman or guard (bantay) shall
continue until the property shall be converted into a subdivision for residential purposes.

The respondent appellate court disregarded the receipts as self-serving. 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.

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.

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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.

G.R. No. 78214 December 5, 1988

YOLANDA CABALLES, petitioner,
vs.
DEPARTMENT OF AGRARIAN REFORM, HON. HEHERSON T. ALVAREZ and BIENVENIDO
ABAJON, respondents.

SARMIENTO, J.:

Before us is a petition for certiorari seeking the annulment of an Order issued by the public respondent
Ministry of Agrarian Reform , 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.

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
Lawaan Talisay, Cebu. The remainder of Lot No. 3109-C was subseconsequently 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 fitfy-fifty basis. From 1975-1977, 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

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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 Lawaan 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.

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, 1 983, 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 thin case is filed patently to harass and/or eject the tenant from his farmholding, which
act is prohibited by 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
certification in its Order 2 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 Orders dated November 15, 1986, setting aside the previous
Order 3 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 ½ or 50% of the two bunches of bananas
gathered after Caballes had acquired the property. 4

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 truer 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

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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 wide and
twenty (20) meters long, or a total of sixty (60) square meters." 6

Hence, this 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:

It is the policy of the State:

(1) To establish cooperative-cultivatorship among those who live and work on the land as
tillers, owner-cultivatorship 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

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.

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.
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The essential requisites of a tenancy relationship are:

1. The parties are the landowner and the tenant;

2. The subject is agricultural land;
3. There is consent;
4. The purpose is agricultural production;
5. There is personal cultivation; and
6. There is sharing of harvests.

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 tiller-sharer 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

10
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 destruction;
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 snowed 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.

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.

G.R. No. 70736 March 16, 1987

BONIFACIO L. HILARIO and EDUARDA M. BUENCAMINO HILARIO, petitioners,

vs.
HONORABLE INTERMEDIATE APPELLATE COURT AND SALVADOR BALTAZAR, respondents.

Bonifacio L. Hilario for petitioners.

Alberto Mala, Jr. for private respondent.

This is a petition for review on certiorari of the Court of Appeals' decision declaring Salvador Baltazar a
leasehold tenant entitled to security of tenure on a parcel of land consisting of 1,740 square meters.

11
On January 13, 1981, Salvador Baltazar filed a verified complaint with the Court of Agrarian Relations,
Branch VI at Baliuag, Bulacan alleging that since January, 1955 he had been in continuous possession as
a share tenant of a parcel of land with an area of about 2 hectares situated in San Miguel, Bulacan, which
was previously owned by one Socorro Vda. de Balagtas; that on or about December 27, 1980, and
thereafter, the spouses Hilario began to threaten him to desist from entering and cultivating a portion of
the aforesaid land with an area of 4,000 square meters and otherwise committed acts in violation of his
security of tenure; that the Hilarios were contemplating the putting up of a fence around the said portion of
4,000 square meters and that unless restrained by the court, they would continue to do so to his great
irreparable injury.

Baltazar claims that he became a tenant of Socorro P. Vda. de Balagtas on the latter's two-hectare
landholding located at San Juan, San Miguel, Bulacan by virtue of a "Kasunduan" executed between them
on January 8, 1979, He states that he erected his house and planted "halaman," the produce of which
was divided at 70-30 and 50-50 (sic) in his favor. After the death of Socorro P. Vda. de Balagtas, he
allegedly gave the share pertaining to the landowner to her daughter Corazon Pengzon. It was only in
December, 1980 that he came to know that a portion of the 2 hectares or 4,000 square meters is already
owned by the Hilarios.

On the other hand, the petitioners aver that they acquired the landholding of 4,000 square meters from the
Philippine National Bank (PNB) after it had been foreclosed by virtue of a deed of sale executed between
Bonifacio Hilario and the PNB. The former owner Corazon Pengzon testified that she owned only two lots-
Lot 427-B with an area of 841 square meters and Lot 427-C with an area of 899 square meters with a total
area of 1,740 square meters. The other 2 lots were owned by Ruben Ocampo and Juan Mendoza. She
further testified that in 1964 at the time of the partition of the property, she declared the property for
classification purposes as "bakuran" located in the Poblacion and had no knowledge that there were other
things planted in it except bananas and pomelos.

On November 27, 1981, the Court of Agrarian Relations (CAR) in determining whether or not respondent
Baltazar is the tenant of the petitioners ruled that the land in question is not an agricultural landholding but
plain "bakuran," hence, Baltazar is not a tenant on the land.

On January 30, 1982, the Court of Appeals, however, remanded the case to the lower court for further
proceedings on the ground that the findings of the Court of Agrarian Relations (CAR) were not supported
by substantial evidence.

In compliance with the order of the Court of Appeals, the CAR admitted additional evidence.

On December 19, 1983, the CAR admitted the petitioners' third party complaint filed with leave against the
Philippine National Bank (PNB) which states that in the event that judgment would be rendered against
them under the original complaint, the PNB must contribute, indemnify, and reimburse the spouses the full
amount of the judgment.

On the basis of the parties' and their witnesses' affidavits containing detailed narrations of facts and
documentary exhibits which served as their direct testimonies pursuant to PD 946, the CAR found that
there was no tenancy relationship existing between Baltazar and the former owner, Corazon Pengzon.
The dispositive portion of the decision reads:

WHEREFORE, judgment is hereby rendered declaring plaintiff not to be a tenant on the

landholding described in the complaint and ordering his ejectment therefrom.

The third-party complaint is hereby dismissed for lack of merit. (pp. 25- 26, Rollo)

12
Again, respondent Salvador Baltazar appealed to the then Intermediate Appellate Court (IAC).

The IAC, however, reversed the decision of the CAR and held that:

... [T]he decision appealed from is hereby SET ASIDE, and another one entered declaring
plaintiff-appellant ii leasehold tenant entitled to security of tenure on the land in question
consisting of 1,740 square meters. Costs against defendants-appellees. (p. 31, Rollo)

Consequently, the spouses Hilarios filed this petition for review making the following assignments of
errors:

I. THE INTERMEDIATE APPELLATE COURT ERRED IN DISTURBING THE FINDINGS OF FACTS AND
DECISION OF THE COURT OF AGRARIAN RELATIONS (CAR) WHICH IS SUPPORTED BY
SUBSTANTIAL EVIDENCE.

II. THE INTERMEDIATE APPELLATE COURT ERRED IN SUBSTITUTION (SIC) THE FINDINGS OF
FACTS OF CAR, OF ITS OWN FINDINGS.

III. THE INTERMEDIATE APPELLATE COURT ERRED IN NOT AFFIRMING THE DECISION OF CAR,
FINDING THE LOTS IN QUESTION WITH AN AREA OF 1,740 SQUARE METERS AS RESIDENTIAL
LOT AND PRIVATE RESPONDENT NOT TO BE A TENANT.

We agree with the respondent court when it stated that it can affirm on appeal the findings of the CAR
only if there is substantial evidence to support them. However, after a careful consideration of the records
of the case, we find no valid reason to deviate from the findings of the CAR. The evidence presented by
the petitioners is more than sufficient to justify the conclusion that private respondent Salvador Baltazar is
not a tenant of the landholding in question.

Salvador Baltazar claims: that he is working on the land in question pursuant to a "kasunduan" executed
between him and Socorro Balagtas. The contract covers a two-hectare parcel of land. The disputed
landholding is only 4,000 square meters more or less, although Baltazar claims that this area is a portion
of the two hectares in the contract. He testified that sometime in 1965, he relinquished 1.5 hectares of the
two hectares subject of the "kasunduan" to Nemesio Ocampo, Juan Mendoza, Miguel Ocampo and
Miguel Viola and what remained under his cultivation was 1/2 hectare owned by Corazon Pengson. He
stated that when Socorro Balagtas died, no new contract was executed. However, he insists that the old
contract was continued between Corazon Pengson and himself. (Rollo, p. 23).

This claim is controverted by the testimony of Corazon Pengson herself which we quote as follows:

Q After the death of your mother in 1965, what step, if any, have you taken,
regarding this subject landholding or after the death of your mother how did
you —

Q ... administer this landholding in 1963, 1964, 1965, 1966, etc?

A What I did is to fix the title of ownership, sir.

COURT:

Q What else?

13
 A None other, Your Honor.

Q After the death of your mother in 1962, have you seen Mr. Salvador
Baltazar in this landholding in question?

A Yes, Your Honor.

Q What was he doing?

WITNESS:

A We are neighbors, Your Honor, sometimes he visits and goes to our place
and we used to meet there, Your Honor.

Q What was the purpose of his visit and your meeting in this landholding?

A Sometimes when he visits our place he tens us that there are some
bananas to be harvested and sometimes there are other fruits, your Honor.

Q You mean to say he stays in this subject landholding consisting of 7,000

square meters?

A After the survey it turned out-

A . . . that he is occupying another lot which I learned that property does not
belong to us, Your Honor.

Q what was your arrangement regarding his stay in that landholding which
you don't own?

A He said that he had a contract with my late mother which I don't know; in
order not to cause any trouble because I will be bothered in my business, I
told him to continue, Your Honor.

Q What do you mean when you-

COURT:

(continuing)

. . .told him to continue?

A What I mean to say is that he can stay there although I don't understand
the contract with my mother, Your Honor.

Q Was he paying rentals for his stay in that lot?

A No, Your Honor (T.S.N., pp. 15-19, hearing of August 5, 1981).

Corazon Pengson further explained that she did not receive any share from the produce of the land from
1964 up to the filing of the case and she would not have accepted any share from the produce of the land
14
because she knew pretty well that she was no longer the owner of the lot since 1974 when it was
foreclosed by the bank and later on purchased by the spouses Hilarios.

We note the CAR's finding:

Tenancy relationship is indivisible. The two-hectare land subject of plaintiff's alleged

contract with Socorro Balagtas having been parcelled into seven (7) and possession thereof
relinquished/surrendered in 1965 results in the termination of plaintiff's tenancy relationship
with the previous owner/landholder. Such being the case, he cannot now claim that the
landholding in question consisting of 4,000 square meters, more or less, is being cultivated
by him under the old contract. The owner thereof Corazon Pengson has no tenancy
relationship with him (plaintiff). (p. 25, Rollo)

From the foregoing, it is clear that Coraz n Pengson did not give her consent to Baltazar to work on her
land consisting of only 1,740 square meters. We agree with the CAR when it said:

The law accords the landholder the right to initially choose his tenant to work on his land.
For this reason, tenancy relationship can only be created with the consent of the true and
lawful landholder through lawful means and not by imposition or usurpation. So the mere
cultivation of the land by usurper cannot confer upon him any legal right to work the land as
tenant and enjoy the protection of security of tenure of the law (Spouses Tiongson v. Court
of Appeals, 130 SCRA 482) (Ibid)

And in the case of Tuazon v. Court of Appeals (118 SCRA 484), this Court had the occasion to explain:

xxx xxx xxx

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

The respondent court ruled that the fact that the land in question is located in the poblacion does not
necessarily make it residential.

The conclusion is purely speculative and conjectural, We note that the evidence presented by the
petitioners sufficiently establishes that the land in question is residential and not agricultural.

As we stated in Tiongson v. Court of Appeals (supra) "the key factor in ascertaining whether or not there
is a landowner-tenant relationship in this case is the nature of the disputed property."

The records show that the disputed property, only 1,740 square meters in area, is actually located in the
poblacion of San Miguel, Bulacan not far from the municipal building and the church. It is divided into two
lots-Lot 427-B with an area of 841 square meters and Lot 427-C with an area of 899 square meters. Two
other lots which the respondent claims to cultivate as "tenant" were originally owned by Ruben Ocampo
and Juan Mendoza, not Corazon Pengson, through whom the respondent traces his alleged tenancy
rights.

Respondent Baltazar is a full-time government employee working in the Bureau of Plant Industry.

15
The disputed lots were acquired at a foreclosure sale from the Philippine National Bank. They were
purchased as residential lots and the deed of sale describes them as "residential." The inspection and
appraisal report of the PNB classified the land as residential. The declaration of real property on the basis
of which taxes are paid and approved by the Acting Provincial Assessor of Bulacan classifies the land as
residential. The tax declarations show that the 841 square meter lot is assessed for tax purposes at
P25,236.00 while the 899 square meter lot is assessed at P26,920.00. The owner states that the land has
only bananas and pomelos on it. But even if the claim of the private respondent that some corn was
planted on the lots is true, this does not convert residential land into agricultural land.

The presumption assumed by the appellate court, that a parcel of land which is located in a poblacion is
not necessary devoted to residential purposes, is wrong. It should be the other way around. A lot inside
the poblacion should be presumed residential or commercial or non-agricultural unless there is clearly
preponderant evidence to show that it is agricultural.

The respondent court also failed to note that the alleged tenant pays no rental or share to the landowners.
Baltazar made a vague allegation that he shared 70-30 and 50-50 of the produce in his favor. The former
owner flatly denied that she ever received anything from him,

The requirements set by law for the existence of a tenancy relationship, to wit: (1) The parties are the
landholder and tenant; (2) The subject is agricultural land; (3) The purpose is agricultural production; and
(4) There is consideration; have not been met by the private respondent.

We held in Tiongson v. Court of Appeals, cited above that:

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 dejure 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 ...
(emphasis supplied).

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.

G.R. No. L-44570 May 30, 1986

MANUEL GUERRERO and MARIA GUERRERO, petitioners,

vs.
HON. COURT OF APPEALS, and APOLINARIO BENITEZ, respondents.

A.D. Guerrero for petitioners.

Bureau of Legal Assistance for private respondents.

Whether or not a tenancy relationship exists between the parties Manuel Guerrero, et al and Apolinario
Benitez, et al. as to determine their respective rights and obligations to one another is the issue in this
16
petition to review the decision of the then Court of Appeals, now the Intermediate Appellate Court, which
affirmed in toto the decision of the Court of Agrarian Relations in CAR Case No. 6793-NE (SA-Q) '73, the
dispositive portion of which reads:

In view of all the foregoing, judgment is hereby rendered:

(1) ordering defendants-spouses Manuel and Maria Guerrero to reinstate plaintiff Apolinario
Benitez to the 10-hectare portion of the 16-hectare coconut holding in question, located at
Bo. San Joaquin, Maria Aurora Sub-province Quezon and to maintain said plaintiff in the
peaceful possession and cultivation thereof, with all the rights accorded and obligations
imposed upon him by law;

(2) ordering defendants Paulino and Rogelio both surnamed Latigay to vacate the said ten-
hectare portion and deliver possession thereof to plaintiff Apolinario Benitez;

(3) ordering defendants-spouses Manuel and Maria Guerrero to pay damages to plaintiffs in
the amount of P14,911.20 beginning from July, 1973 and to pay the same amount every
year thereafter until plaintiff is effectively reinstated to the ten-hectare portion;

(4) denying plaintiff-tenants' prayer for reconstruction of the copra cottage: and

(5) ordering defendants-spouses Manuel and Maria Guerrero to pay plaintiff the amount of
P200.00 by way of litigation expenses.

All other claims of the parties are denied. With costs against defendants-spouses.

The petitioners adopt the respondent court's findings of fact excepting, however, to its conclusion that
tenancy relations exist between the petitioners and the respondents, thus:

In 1969, plaintiff Apolinario Benitez was taken by defendants- spouses Manuel and Maria
Guerrero to take care of their 60 heads of cows which were grazing within their 21-hectare
coconut plantation situated at Bo. San Joaquin, Maria Aurora, Subprovince of Aurora,
Quezon. Plaintiff was allowed for that purpose to put up a hut within the plantation where he
and his family stayed. In addition to attending to the cows, he was made to clean the
already fruitbearing coconut trees, burn dried leaves and grass and to do such other similar
chores. During harvest time which usually comes every three months, he was also made to
pick coconuts and gather the fallen ones from a 16-hectare portion of the 21-hectare
plantation. He had to husk and split the nuts and then process its meat into copra in
defendants' copra kiln. For his work related to the coconuts, he shared 1/3 of the proceeds
from the copra he processed and sold in the market. For attending to the cows he was paid
P500 a year.

Sometime in the early part of 1973, plaintiff was refrained from gathering nuts from the 10-
hectare portion of the 16-hectare part of the plantation from where he used to gather nuts.
He felt aggrieved by the acts of defendants and he brought the matter to the attention of the
Office of Special Unit in the Office of the President in Malacanang, Manila. This led to an
execution of an agreement, now marked as Exh. D, whereby defendants agreed, among
others, to let plaintiff work on the 16-hectare portion of the plantation as tenant thereon and
that their relationship will be guided by the provisions of republic Act No. 1199. The
Agricultural Tenancy Act of the Philippines.

17
 Then in July, 1973, he was again refrained from gathering nuts from the 10-hectare portion
of the plantation with threats of bodily harm if he persists to gather fruits therefrom.
Defendant spouses, the Guerreros, then assigned defendants Rogelio and Paulino Latigay
to do the gathering of the nuts and the processing thereof into copra. Defendants Guerreros
also caused to be demolished a part of the cottage where plaintiff and his family lived, thus,
making plaintiffs feel that they (defendants) meant business. Hence, this case for
reinstatement with damages.

The lower court formulated four (4) issues by which it was guided in the resolution of the
questions raised by the pleadings and evidence and we pertinently quote as follows:

(1) whether or not plaintiff is the tenant on the coconut landholding in question consisting of
sixteen (16) hectares;

(2) In The affirmative, whether or not he was unlawfully dispossessed of ten (10) hectare
thereof;

(3) Whether or not the parties are entitled to actual and moral damages, attorney's fees and
litigation expenses.

This petition for review poses the following questions of law:

Whether or not with the passage of Presidential Decree 1038 only last October 21, 1976,
Republic Act 6389 otherwise known as the Code of Agrarian Reforms has repealed in their
entirety the Agricultural Tenancy Act (Republic Act 1199) and the Agricultural Reform Code
(Republic Act 3844) abrogating or nullifying therefore all agricultural share tenancy
agreements over all kinds of lands, as the one involved in the case at bar-over coconut
plantation-and hence, the complaint below as well as the challenged decision by the courts
below, based as they are on such share tenancy agreements, have lost their
validity cessante ratio legis, cessat ipsa lex.

II

Assuming arguendo that said laws have not thus been repealed, is respondent Benitez
hereunder the undisputed fact of the case as found by the courts below a share tenant
within the purview of the said laws, i.e., Republic Acts 1199 and 3844, or a mere farmhand
or farm worker as such relationship were extensively discussed in Delos Reyes vs.
Espinelli, 30 SCRA 574. (Copied verbatim from Petition, p. 31- rollo)

Petitioner insists in this petition that Benitez was a mere farmhand or laborer who was dismissed as an
employee from the landholding in question and not ousted therefrom as tenant. Whether a person is a
tenant or not is basically a question of fact and the findings of the respondent court and the trial court are,
generally, entitled to respect and non-disturbance.

The law defines "agricultural tenancy" as 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 or ascertainable, either in produce or in
money, or in both (Section 3, Republic Act 1199, The Agricultural tenancy Act, as amended.)
18
With petitioner reference to this case, "share tenancy" exists whenever two persons agree on a joint
undertaking for agricultural production wherein one party furnishes the land and the other his labor, with
either or both contributing any one or several of the items of production, the tenant cultivating the land with
the aid of labor available from members of his immediate farm household, and the produce thereof to be
divided between the landholder and the tenant in proportion to their respective contributions (Sec. 4, RA
1199; Sec. 166(25) RA 3844, Agricultural Land Reform Code).

In contrast, a farmhand or agricultural laborer is "any agricultural salary or piece worker but is not limited
to a farmworker of a particular farm employer unless this Code expressly provides otherwise, and any
individual whose work has ceased as a consequence of, or in connection with, a current agrarian dispute
or an unfair labor practice and who has not obtained a substantially equivalent and regular employment"
(Sec. 166(15) RA 3844, Agricultural Land Reform Code).

The petitioners contend that the two courts below applied erroneous definitions of "tenancy" found in
repealed laws. They assert that the Agricultural Tenancy Act and the Agricultural Land Reform Code have
been superseded by the Code of Agrarian Reforms, Rep. Act 6389, which the trial court and the Court of
Appeals failed to cite and apply.

There is no question that the latest law on land and tenancy reforms seeks to abolish agricultural share
tenancy as the basic relationship governing farmers and landowners in the country.

On August 8, 1963, Republic Act 3844 abolished and outlawed share tenancy and put in its stead the
agricultural leasehold system. On September 10, 1971, Republic Act 6389 amending Republic Act 3844
declared share tenancy relationships as contrary to public policy. On the basis of this national policy, the
petitioner asserts that no cause of action exists in the case at bar and the lower court's committed grave
error in upholding the respondent's status as share tenant in the petitioners' landholding.

The petitioners' arguments are regressive and, if followed, would turn back the advances in agrarian
reform law. The repeal of the Agricultural Tenancy Act and the Agricultural Land Reform Code mark the
movement not only towards the leasehold system but towards eventual ownership of land by its tillers.
The phasing out of share tenancy was never intended to mean a reversion of tenants into mere
farmhands or hired laborers with no tenurial rights whatsoever.

It is important to note that the Agricultural Tenancy Act (RA 1199) and the Agricultural Land Reform Code
(RA 3844) have not been entirely repealed by the Code of Agrarian Reform (RA 6389) even if the same
have been substantially modified by the latter.

However, even assuming such an abrogation of the law, the rule that the repeal of a statute defeats all
actions pending under the repealed statute is a mere general principle. Among the established exceptions
are when vested rights are affected and obligations of contract are impaired. (Aisporna vs. Court of
Appeals, 108 SCRA 481).

The records establish the private respondents' status as agricultural tenants under the legal definitions.

Respondent Benitez has physically possessed the landholding continuously from 1969 until he was
ejected from it. Such possession of longstanding is an essential distinction between a mere agricultural
laborer and a real tenant within the meaning of the tenancy law (Moreno, Philippine Law Dictionary, 1972
Edition), a tenant being one who, has the temporary use and occupation of land or tenements belonging
to another (Bouvier's Law Dictionary, Vol. II, p. 3254) for the purpose of production (Sec. 3, Republic Act
1199; delos Reyes vs. Espinelli, 30 SCRA 574). Respondent Benitez lives on the landholding. He built his
house as an annex to the petitioner's copra kiln. A hired laborer would not build his own house at his

19
expense at the risk of losing the same upon his dismissal or termination any time. Such conduct is more
consistent with that of an agricultural tenant who enjoys security of tenure under the law.

Cultivation is another important factor in determining the existence of tenancy relationships. It is admitted
that it had been one Conrado Caruruan, with others, who had originally cleared the land in question and
planted the coconut trees, with the respondent coming to work in the landholding only after the same were
already fruit bearing. The mere fact that it was not respondent Benitez who had actually seeded the land
does not mean that he is not a tenant of the land. The definition of cultivation is not limited merely to the
tilling, plowing or harrowing of the land. It includes the promotion of growth and the care of the plants, or
husbanding the ground to forward the products of the earth by general industry. The raising of coconuts is
a unique agricultural enterprise. Unlike rice, the planting of coconut seedlings does not need harrowing
and plowing. Holes are merely dug on the ground of sufficient depth and distance, the seedlings placed in
the holes and the surface thereof covered by soil. Some coconut trees are planted only every thirty to a
hundred years. The major work in raising coconuts begins when the coconut trees are already
fruitbearing. Then it is cultivated by smudging or smoking the plantation, taking care of the coconut trees,
applying fertilizer, weeding and watering, thereby increasing the produce. The fact that respondent
Benitez, together with his family, handles all phases of farmwork from clearing the landholding to the
processing of copra, although at times with the aid of hired laborers, thereby cultivating the land, shows
that he is a tenant, not a mere farm laborer. (delos Reyes vs. Espinelli, supra Marcelo vs. de Leon, 105
Phil. 1175).

Further indicating the existence of a tenancy relationship between petitioners and respondent is their
agreement to share the produce or harvest on a "tercio basis" that is, a 1/3 to 2/3 sharing in favor of the
petitioner-landowners. Though not a positive indication of the existence of tenancy relations perse the
sharing of harvest taken together with other factors characteristic of tenancy shown to be present in the
case at bar, strengthens the claim of respondent that indeed, he is a tenant. The case of delos Reyes vs.
Espinelli (supra) clearly explains the matter thus:

The agricultural laborer works for the employer, and for his labor he receives a salary or
wage, regardless of whether the employer makes a profit. On the other hand, the share
tenant par ticipates in the agricultural produce. His share is necessarily dependent on the
amount of harvest.

Hence, the lower court's computation of damages in favor of respondent based on the number of normal
harvests. In most cases, we have considered the system of sharing produce as convincing evidence of
tenancy relations.

The petitioners entered into an agreement on May 2, 1973 which in clear and categorical terms
establishes respondent as a tenant, to wit:

AGREEMENT

This agreement entered into by and between Manuel Guerrero hereinafter referred to as the
landowner and Apolinario Benitez hereinafter referred to as tenant.

xxx xxx xxx

The petitioners, however, contend that the word "tenant" in the aforequoted agreement was used to mean
a hired laborer farm employee as understood agreed upon by the parties. The fact that their relationship
would be guided by the provisions of Republic Act 1199 or the Agricultural Tenancy Act of the Philippines
militates against such an assertion. It would be an absurdity for Republic Act 1199 to govern an employer-

20
employee relationship. If as the petitioners insist a meaning other than its general acceptation had been
given the word "tenant", the instrument should have so stated '. Aided by a lawyer, the petitioners, nor the
respondent could not be said to have misconstrued the same. In clear and categorical terms, the private
respondent appears to be nothing else but a tenant:

Finally, comes the admission by the petitioners' counsel of the respondent's status as tenant:

ATTY. ESTEBAN:

Q You said you are living at San Joaquin, who cause the sowing of the
lumber you made as annex in the house?

ATTY. NALUNDASAN

Please remember that under the law, tenant is given the right to live in the
holding in question. We admit him as tenant.

xxxxxxxxx

(Apolinario Benitez on Redirect, TSN, June 25, 1974, pp. 4950).

The respondent's status as agricultural tenant should be without question.

Once a tenancy relationship is established, the tenant has the right to continue working until such
relationship is extinguished according to law.

The Agricultural Tenancy Act of 1954 (Republic Act 1199), the Agricultural Land Reform Code of 1963
(Republic Act 3844), the Code of Agrarian Reforms (Republic Act 6389) and Presidential Decree 1038
(Strengthening the Security of Tenure of Tenant Tillers in Non-Rice/Corn Producing Agricultural Lands) all
provide for the security of tenure of agricultural tenants. Ejectment may be effected only for causes
provided by law, to wit:

l) Violation or failure of the tenant to comply with any of the terms and conditions of the
tenancy contract or any of the provisions of the Agricultural Tenancy Act;

2) The tenant's failure to pay the agreed rental or to deliver the landholder's share unless
the tenant's failure is caused by a fortuitous event or force majeure;

3) Use by the tenant of the land for purposes other than that specified by the agreement of
the parties;

4) Failure of the tenant to follow proven farm practices:

5) Serious injury to the land caused by the negligence of the tenant;

6) Conviction by a competent court of a tenant or any member of his immediate family or

farm household of a crime against the landholder or a member of his immediate family.
(Section 50, Rep. Act 1199).

21
None of the above causes exists in the case at bar. The respondent has been unlawfully deprived of his
right to security of tenure and the Court of Agrarian Reforms did not err in ordering the reinstatement of
respondent as tenant and granting him damages therefor.

Before we close this case, it is pertinent to reiterate that the respondent's right as share tenant do not end
with the abolition of share tenancy. As the law seeks to "uplift the farmers from poverty, ignorance and
stagnation to make them dignified, self-reliant, strong and responsible citizens ... active participants in
nation-building", agricultural share tenants are given the right to leasehold tenancy as a first step towards
the ultimate status of owner-cultivator, a goal sought to be achieved by the government program of land
reform.

It is true that leasehold tenancy for coconut lands and sugar lands has not yet been implemented. The
policy makers of government are still studying the feasibility of its application and the consequences of its
implementation. Legislation still has to be enacted. Nonetheless, wherever it may be implemented, the
eventual goal of having strong and independent farmers working on lands which they own remains. The
petitioners' arguments which would use the enactment of the Agrarian Reform Code as the basis for
setting back or eliminating the tenurial rights of the tenant have no merit.

WHEREFORE, the petition is DISMISSED for lack of merit. The decision of the appellate court is
AFFIRMED. No costs.

SO ORDERED.

G.R. No. 77830 February 27, 1990

VICTOR TALAVERA and VISITACION AGUSTIN TALAVERA, petitioners,

vs.
HON. COURT OF APPEALS and JOSE LAXAMANA, respondents.

Wilfredo I. Untalan counsel for petitioners.

Bureau of Agrarian Legal Assistance for private respondent.

GUTIERREZ, JR., J.:

The Court is asked to examine whether or not the Court of Appeals committed reversible error in its
finding that there was no voluntary surrender of the landholding in question on the part of respondent
Laxamana as tenant.

This petition for review on certiorari assails the decision of the respondent appellate court which
affirmed in toto the judgment rendered by the Regional Trial Court of the Third Judicial Region, Branch
LXVI, Capas, Tarlac on July 21, 1986.

The dispositive portion of the trial court's decision reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and ordering the
defendants:

(1) To reinstate Jose Laxamana as their tenant on the landholding in

question;

22
 (2) To pay him the sum of FIVE THOUSAND PESOS (P5,000.00) value of 50
cavans of palay at the rate of P100.00 per cavan as his share for the
agricultural year 1984-85;

(3) To continue paying him the same amount as damages, every agricultural
year thereafter until his actual reinstatement. (CA Decision, p. 2; Rollo, p. 16)

The facts pertinent to the case at bar are as follows:

On July 10, 1984, an action for recovery of possession was instituted by the private respondent against
the petitioners over a parcel of agricultural land with an area of 21,081 square meters located at Brgy. Sto.
Domingo 11, Sitio Tambo, Capas, Tarlac.

The complaint alleged, among others, that respondent Laxamana had been a bonafide tenant of the
aforesaid parcel of land since 1958 until the petitioners took possession thereof sometime in 1984; that
respondent Laxamana had been in continuous possession and cultivation of the said landholding since
1958 but the petitioners, for unknown reasons and without the knowledge of respondent Laxamana,
planted palay thereon in 1984 through force and intimidation after plowing and harrowing were done by
respondent Laxamana; and that due to the petitioners' illegal actions, respondent Laxamana suffered
damages in the amount of P500.00 and the price equivalent to sixty-five (65) cavans of palay per
agricultural year from the time of his dispossession until his reinstatement as tenant over the landholding
in question.

In their answer, the petitioners counter-alleged, among others, that their tenancy relationship with
respondent Laxamana was terminated pursuant to a document captioned "Casunduan" executed on
March 30, 1973 whereby the latter sold his rights and interests over the agricultural landholding under
litigation for a consideration of P1,000.00; that respondent Laxamana was not actually a tenant of the
petitioners and whatever tenancy rights the former had exercised over the landholding in question were
voluntarily surrendered by him upon the execution of the aforesaid document; that respondent Laxamana
had only himself to blame for the litigation expenses resulting from his baseless and patently frivolous
complaint; and that respondent Laxamana was no longer entitled to the amount equivalent to 65 cavans of
palay per agricultural year as claimed since he was no longer a tenant of the petitioners.

After trial, the private respondent obtained a favorable judgment from which the petitioners appealed to
the respondent Court.

In a decision promulgated on March 3, 1987, the Court of Appeals affirmed the lower court's holding that
the Casunduan even if assumed to be valid did not constitute "voluntary surrender" as contemplated by
law, hence, respondent Laxamana ought to be reinstated as tenant of the petitioners' landholding.

Consequently, this petition was filed to seek a reversal of the decision of the appellate court. According to
the petitioners, the Court of Appeals erred:

IN HOLDING THAT PRIVATE RESPONDENT DID NOT VOLUNTARILY SURRENDER THE

LANDHOLDING IN QUESTION.

II

23
IN OVERLOOKING THE PROBATIVE VALUE OF A WRITTEN INSTRUMENT ENTITLED 'CASUNDUAN'
WHICH SHOWS VOLUNTARY SURRENDER. (Rollo, p. 4)

The petitioners bolster their claim that respondent Laxamana is no longer their tenant over the landholding
in question by invoking the rule on parol evidence with respect to the probative value of the "Casunduan"
executed by respondent Laxamana on March 30, 1973. They further argue that the execution of the
"Casunduan" clearly showed the intention of respondent Laxamana to surrender whatever rights he had
as tenant over the said landholding. Hence, we are presented with the issue of whether or not by virtue of
the "Casunduan" dated March 30, 1973, respondent Laxamana as tenant is deemed to have surrendered
voluntarily the subject landholding to its owners — the petitioners.

The evidence on record and the petitioners' arguments are not enough to overcome the rights of the
private respondent provided in the Constitution and agrarian statutes which have been upheld by this
Court.

The very essence of agricultural tenancy lies in the cardinal rule that an agricultural tenant enjoys security
of tenurial status. The Code of Agrarian Reforms of the Philippines (Republic Act No. 3844, as amended)
specifically enumerates the grounds for the extinguishment of agricultural leasehold relations. Section 8 of
the said Code provides:

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 land holding by the agricultural lessee, written
notice of which shall be served three months in advance; or

(3) Absence of the persons under Section rune to succeed to the lessee, in
the event of death or permanent incapacity of the lessee.

The petitioners invoke voluntary surrender under Paragraph 2 of Section 8 as the reason for the end of
the tenancy relationship.

Voluntary surrender, as a mode of extinguishment of tenancy relations, does not require any court
authorization considering that it involves the tenant's own volition. (see Jacinto v. Court of Appeals, 87
SCRA 263 [1978]). To protect the tenant's right to security of tenure, voluntary surrender, as contemplated
by law, must be convincingly and sufficiently proved by competent evidence. The tenant's intention to
surrender the landholding cannot be presumed, much less determined by mere implication. Otherwise, the
right of a tenant to security of tenure becomes an illusory one.

Standing by itself, the March 30, 1973 Casunduan indicates, as contended by the petitioners, a voluntary
relinquishment of tenancy rights. It states that on his own initiative, Jose Laxamana went to the Talaveras
and requested that he be allowed to sell his "puesto cung asican" or "the plot I am farming" to the couple.
A subscribing witness, Ermela Lumanlan testified on the voluntary sale of tenancy rights for P1,000.00,
her signing as a witness at the bottom of the contract, and Laxamana's signing the document.

The argument of the private respondent that under Section 28 of the Agrarian Reform Code, a voluntary
surrender to be valid must be "due to circumstances more advantageous to him and his family" is double-

24
edged. There appears no question that Laxamana needed money to pay for the expenses incident to the
illness of his wife which led to her death. The money was to his advantage.

The basic issue in this case is-what did Laxamana give up in return for the P1,000.00? The case is
marked by poor handling at the trial stage and it is not clear whether or not the P1,000.00 was a result of
the usual paternalistic arrangements between landlords and tenants where the latter meekly approach the
landlords in their hours of need or something else.

In the first place, the agreement was prepared by petitioner Visitacion A. Talavera. Laxamana could hardly
sign his own name. He was clearly at a disadvantage in the execution of the contract and the wording of
the agreement. The intention to give up the landholding must be gleaned from evidence in addition to the
document which was signed by an ignorant and illiterate peasant in an hour of emotional stress and
financial need.

Second, and most important, Laxamana continued to work on the farm from 1973 up to 1984 when the
petitioners ejected him. As stated by the appellate court, why did it take the petitioners more than ten
years to enforce the Casunduan?

The Talaveras claim that they cultivated the land themselves from 1973 to 1984 when the complaint was
filed. This claim is belied by Exhibits A and B. In Exhibit A, barangay captain Francisco Manayang reports
to the team leader of the Ministry of Agrarian Reform that, per his own personal knowledge, Jose
Laxamana has been tilling the disputed land since 1958. Exhibit B is an affidavit to the same effect by
Manayang, Mr. Porfirio Manabat who is president of the Agrarian Reform Beneficiaries Association, and a
certain Romeo dela Cruz all of whom are residents of the barangay where the land is located.
Significantly, Laxamana is a resident of Sitio Tambo, Barangay Sto. Domingo II where the disputed land is
situated while the Talaveras reside in another barangay, Arangureng, of Capas, Tarlac. We see no reason
why the factual findings of the trial court and the appellate court should be reversed insofar as the
continuous cultivation from 1973 to 1984 is concerned.

Third, it is not shown why Laxamana should voluntarily give up his sole source of livelihood even if he
needed money to pay off his debts. Or what he did from 1973 to 1984 if the claim of the Talaveras that
they worked the land themselves is correct. We are more inclined to believe that Laxamana was forced by
circumstances to sign something he did not fully understand and then went right back to the farm and
continued to work on it until 1984.

It is true that Cristobal Gamido, Jr., officer-in-charge of the Agrarian Reform Team issued on May 8, 1986
a certification that the contested land is not tenanted. However, the basis for the certification whether or
not Mr. Gamido merely read the Casunduan literally is not shown. It cannot overcome the more
convincing evidence of persons actually residing where the land is located.

Tenancy relations cannot be bargained away except for the strong reasons provided by law which must
be convincingly shown by evidence in line with the State's policy of achieving a dignified existence for the
small farmers free from pernicious institutional restraints and practices (Sec. 2 [2], Code of Agrarian
Reforms).

We, therefore, rule that except for compelling reasons clearly proved the determination that a person is a
tenant-farmer, a factual conclusion made by the trial court on the basis of evidence directly available to it,
will not be reversed on appeal and will be binding on us. (see Macaraeg v. Court of Appeals, G.R. No.
48008, January 20, 1989; Co v. Intermediate Appellate Court, 162 SCRA 390 [1988]).

25
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The decision of the
Court of Appeals dated March 3, 1987 is AFFIRMED.

SO ORDERED.

G.R. No. 88113 October 23, 1992

SPOUSES TITUS L. ENDAYA and GLENDA TRINIDAD; SPOUSES RICO L. ENDAYA and NANETTE
AQUINO; and SPOUSES JOSEPHINE L. ENDAYA and LEANDRO BANTUG, petitioners,
vs.
COURT OF APPEALS and PEDRO FIDELI, respondents.

ROMERO, J.:

Assailed in this petition for review on certiorari is the decision of the Court of Appeals in CA-.G.R. No.
15724 dated April 26, 19891 reversing the judgment of the Regional Trial Court of Tanauan, Batangas
(Branch 6) in Civil Case No. T-4302 and holding that private respondent is an agricultural lessee in the
land of petitioner whose security of tenure must be respected by the latter.

The antecedent facts are as follows:

The Spouses Natividad Trinidad and Cesar San Diego owned a piece of agricultural land consisting of
20,200 square meters situated at San Pioquinto, Malvar, Batangas, devoted to rice and corn. As far back
as 1934, private respondent Fideli has been cultivating this land as a tenant of the Spouses respondent
Fideli has been cultivating this land as a tenant of the Spouses San Diego under a fifty-fifty (50-50)
sharing agreement. This fact, petitioners do not dispute.

On May 2, 1974, a lease contract was executed between the Spouses San Diego and one Regino
Cassanova for a period of four years from May 1974 up to May 1978. 3 The lease contract obliged
Cassanova to pay P400.00 per hectare per annum and gave him the authority to oversee the planting of
crops on the land. 4 Private respondent signed this lease contract as one of two witnesses. 5

The lease contract was subsequently renewed to last until May 1980 but the rental was raised to P600.00.
Again, private respondent signed the contract as witness. 6

During the entire duration of the lease contract between the Spouses San Diego and Cassanova, private
respondent continuously cultivated the land, sharing equally with Cassanova the net produce of the
harvests.

On January 6, 1980, the Spouses San Diego sold the land to petitioners for the sum of P26,000.00. The
sale was registered with the Register of Deeds of Batangas and a Transfer Certificate of Title was duly
issued on January 7, 1981. 7 Private respondent continued to farm the land although petitioners claim that
private respondent was told immediately after the sale to vacate the land.  8 In any case, it is undisputed
that private respondent deposited with the Luzon Development Bank an amount of about P8,000.00 as
partial payment of the landowner's share in the harvest for the years 1980 until 1985. 9

Due to petitioners persistent demand for private respondent to vacate the land, private respondent filed in
April 1985 a complaint 10 with the Regional Trial Court of Tanauan, Batangas praying that he be declared
the agricultural tenant of petitioners.

26
After trial, the trial court decided in favor of petitioners by holding that private respondent is not an
agricultural lessee of the land now owned by petitioners. The dispositive portion of the RTC decision
reads:

WHEREFORE, judgment is hereby rendered dismissing plaintiff's complaint to be declared

a tenant of the landholding consisting of 20,200 square meters, located at San Pioquinto,
Malvar, Batangas, and owned by the defendants; ordering Pedro Fideli to vacate the
landholding deliver possession thereof to the defendants; and ordering the amount of
P8,000.00 deposited under Account No. 2940029826 Civil Case No. T-430 to be withdrawn
and delivered to the defendants, No. pronouncement as to costs.

On appeal, the Court of Appeals reversed the RTC decision and declared private respondent to be the
agricultural lessee of the subject landholding. Hence, this petition wherein private respondent's status as
an agricultural lessee and his security of tenure as such are being disputed by petitioners.

Petitioners impugn the Court of Appeals' declaration that private respondent is an agricultural lessee of
the subject landholding contending that when the original landowners, the Spouses San Diego, entered
into a lease contract with Regino Cassanova, the agricultural leasehold relationship between the Spouses
San Diego and private respondent, the existence of which petitioners do not dispute, was thereby
terminated. Petitioners argue that a landowner cannot have a civil law lease contract with one person and
at the same time have an agricultural leasehold agreement with another over the same land. It is further
argued that because private respondent consented to the lease contract between the Spouses San Diego
and Cassanova, signing as he did the lease agreement and the renewal contract as witness thereof,
private respondent has waived his rights as an agricultural lessee.

These contentions are without merit.

R.A. No. 3844 (1963), as amended By R.A. No. 6839 (1971), which is the relevant law governing the
events at hand, abolished share tenancy throughout the Philippines from 1971 and established the
agricultural leasehold system by operation of law. 11 Section 7 of the said law gave agricultural lessees
security of tenure by providing the following: "The agricultural leasehold relation once established shall
confer upon the agricultural lessee the right to continue working on the landholding until such leasehold
relation 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." 12 The fact
that the landowner entered into a civil lease contract over the subject landholding and gave the lessee the
authority to oversee the farming of the land, as was done in this case, is not among the causes provided
by law for the extinguishment of the agricultural leasehold relation. 13 On the contrary, Section 10 of the
law 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.

Hence, transactions involving the agricultural land over which an agricultural leasehold subsists resulting
in change of ownership, e.g., sale, or transfer of legal possession, such as lease, will not terminate the
right of the agricultural lessee who is given protection by the law by making such rights enforceable
against the transferee or the landowner's successor in interest. 14

27
Illustrative of the legal principles outlined above is Catorce v. Court of Appeals  15 where the person
holding a mortgage over the farm land subject of an agricultural leasehold took possession thereof
pursuant to the mortgage and ousted the agricultural lessee. Upon complaint for reinstatement filed by the
agricultural lessee, the then Court of Agrarian Relations ordered the mortgagee to deliver possession over
the land to the agricultural lessee but his decision was reversed by the Court of Appeals. In reversing the
Court of Appeals' judgment and reinstating the Agrarian Court's decision, the Court, through Justice
Melencio-Herrera, noted, among other considerations, that "tenants are guaranteed security of tenure,
meaning, the continued enjoyment and possession of their landholding except when their dispossession
had been authorized by virtue of a final and executory judgment, which is not so in the case at
bar." 16 Implicit in the decision is the recognition that the transfer of possession to the mortgage did not
terminate the agricultural leasehold nor prejudice the security of tenure of the agricultural lessee.

Closer, to although not identical with the factual setting of the case at bar is  Novesteras v. Court of
Appeals. 17 Petitioner in said case was a share tenant of the respondent over two parcels of land.
Respondent entered into a contract of civil lease with Rosenda Porculas for a term of three years.
Porculas did not farm the land himself but left it to petitioner to till the land. After the expiration of the lease
between respondent and Porculas, petitioner entered into an agreement denominated as a contract of civil
lease with respondent. On expiration of this lease contract, respondent denied petitioner possession over
the land. Resolving the rights and obligations of the parties, the Court, through Justice Paras, held that the
petitioner therein became an agricultural tenant of respondent by virtue of R.A. No. 3844 (1963), as
amended by R.A. No 6839 (1971). The lease contract between the respondent and Porculas did not
terminate the agricultural leasehold relationship between petitioner and respondent. If at all, the said lease
agreement, coupled by the fact that Porculas allowed petitioner to continue cultivating in his capacity as
tenant of the subject landholding, served to strengthen petitioner's security of tenure as an agricultural
tenant of the farmland in question. Accordingly, the subsequent contract between petitioner and
respondent denominated as a contract of civil lease was held by the Court to be in fact an agricultural
leasehold agreement.

Again, in Coconut Cooperative Marketing Association, Inc. (COCOMA) v. Court of Appeals,  18 it was held
that the agricultural leasehold is preserved, notwithstanding the transfer of the legal possession of the
subject landholding, with the transferee, COCOMA in that case, being accountable to the agricultural
lessees for their rights. The Court, through Justice Padilla, summarized the rule as follows:

There is also no question that, in this case, there was a transfer of the legal possession of
the land from one landholder to another (Fule to petitioner COCOMA). In connection
therewith, Republic Act 3844, Sec. 10 states:

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, purchaser or transferee thereof shall be
subrogated to the rights and substituted to the obligations of the agricultural
lessor.

Further, in several cases, this Court sustained the preservation of the landholder-tenant
relationship, in cases of transfer of legal possession:

. . . in case of transfer or in case of lease, as in the instant case, the tenancy

relationship between the landowner and his tenant should be preserved in
order to insure the well-being of the tenant or protect him from being unjustly
28
 dispossessed by the transferee or purchaser of the land; in other words, the
purpose of the law in question is to maintain the tenants in the peaceful
possession and cultivation of the land or afford them protection against
unjustified dismissal from their holdings. (Primero v. CAR, 101 Phil. 675);

It is our considered judgment, since the return by the lessee of the leased
property to the lessor upon the expiration of the contract involves also a
transfer of legal possession, and taking into account the manifest intent of the
lawmaking body in amending the law, i.e., to provide the tenant with security
of tenure in all cases of transfer of legal possession, that the instant case falls
within and is governed by the provisions of Section 9 of Republic Act 1199, as
amended by Republic Act 2263. (Joya v. Pareja, 106 Phil, 645).

. . . that the tenant may proceed against the transferee of the land to enforce
obligation incurred by the former landholder such obligation . . . falls upon the
assignee or transferee of the land pursuant to Sec. 9 abovementioned. Since
respondent are in turn free to proceed against the former landholder for
reimbursement, it is not iniquitous to hold them responsible to the tenant for
said obligations. Moreover, it is the purpose of Republic Act 1199, particularly
Sec. 9 thereof, to insure that the right of the tenant to receive his lawful share
of the produce to receive this lawful share of the produce of the land is
unhampered by the transfer of said land from one landholder to another.
(Almarinez v. Potenciano, 120 Phil.
19
1154.). 

In the instant case, private respondent has been cultivating the subject farm landholding with a fifty-fifty
(50-50) sharing arrangement with the Spouses San Diego, petitioners' predecessors-in-interest. The
passage of R.A. 6839 in 1971, amending R.A. 3844 (1963), secured to private respondent all the rights
pertaining to an agricultural lessee. The execution of a lease agreement between the Spouses San Diego
and Regino Cassanova in 1974 did not terminate private respondent's status as an agricultural lessee.
The fact that private respondent knew of, and consented to, the said lease contract by signing as witness
to the agreement may not be construed as a waiver of his rights as an agricultural lessee. On the contrary,
it was his right to know about the lease contract since, as a result of the agreement, he had to deal with a
new person instead of with the owners directly as he used to. No provision may be found in the lease
contract and the renewal contract even intimating that private respondent has waived his rights as an
agricultural lessee. Militating against petitioners' theory that the agricultural leasehold was terminated or
waived upon the execution of the lease agreement between the San Diegos and Cassanova is the fact the
latter desisted from personally cultivating the land but left it to private respondent to undertake the
farming, the produce of the land being shared between Cassanova and private respondent, while the
former paid P400.00 and later P600.00 per hectare per annum to the San Diegos, as agreed upon in the
lease contract.

Petitioners, however, insist that private respondent can no longer be considered the agricultural lessee of
their farm land because after they purchased the land from the Spouses San Diego in 1980, private
respondent did not secure their permission to cultivate the land as agricultural lessee.

It is true that the Court has ruled that agricultural tenancy is not created where the consent the true and
lawful owners is absent. 20 But this doctrine contemplates a situation where an untenanted farm land is
cultivated without the landowner's knowledge or against her will or although permission to work on the
farm was given, there was no intention to constitute the worker as the agricultural lessee of the farm
land. 21 The rule finds no application in the case at bar where the petitioners are successors-in-interest to
a tenanted land over which an agricultural leasehold has long been established. The consent given by the
29
original owners to constitute private respondent as the agricultural lessee of the subject landholding binds
private respondents whom as successors-in-interest of the Spouses San Diego, step into the latter's
shows, acquiring not only their rights but also their obligations. 22

Contradicting their position that no agricultural leasehold exists over the land they acquired from the
Spouses San Diego, petitioners also pray for the termination of the tenancy of private respondent
allegedly due to: (a) non-payment of the agricultural lease rental; and (b) animosity between the
landowners and the agricultural lessee. The Court, however, observes that nowhere in the petitioners'
Answer to private respondent's Complaint or in the other pleadings filed before the trial court did
petitioners allege grounds for the termination of the agricultural leasehold. Well-settled is the rule that
issues not raised in the trial court cannot be raised for the first time on appeal. 23

In fine, the Court, after a painstaking examination of the entire records of the case and taking into account
the applicable law, as well as the relevant jurisprudence, rules that private respondent is the agricultural
lessee over the land owned by petitioners. As such, private respondent's security of tenure must be
respected by petitioners.

The Court, however, notes from the records of the case that private respondent has unilaterally decided to
pay only 25% of the net harvests to petitioners. 24 Since the agreement of private respondent with the
Spouses San Diego, the original owners, was for a fifty-fifty (50-50) sharing of the net produce of the land,
the same sharing agreement should be maintained between petitioners and private respondents, without
prejudice to a renegotiation of the terms of the leasehold agreement.

WHEREFORE, premises considered, the Petition is DISMISSED and the decision of the Court of Appeals
AFFIRMED. Private respondent is hereby ordered to pay the back rentals from 1980 until 1992 plus
interest at the legal rate. An accounting of the production of the subject landholding is to be made by
private respondent to the Regional Trial Court of Tanauan, Batangas which shall determine the amount
due to petitioners based on the rate ordered above.

SO ORDERED.

G.R. No. 135999      April 19, 2002

MILESTONE REALTY and CO., INC. and WILLIAM L. PEREZ, petitioners,

vs.
HON. COURT OF APPEALS, DELIA RAZON PEÑA and RAYMUNDO EUGENIO, respondents.

QUISUMBING, J.:

Petitioners Milestone Realty & Co., Inc. ("Milestone" for brevity) and William Perez seek the reversal of the
decision1 dated May 29, 1998 of the Court of Appeals in CA-G.R. SP NO. 39987. Said decision affirmed
that of the Department of Agrarian Reform Adjudication Board (DARAB), 2 which had declared respondent
Delia Razon Peña as the bona fide tenant of a lot in Bulacan, and voided the sale of said lot thereby
reversing the decision of the Provincial Agrarian Reform Adjudicator (PARAD). 3

The facts as culled from the records are as follows:

Spouses Alfonso Olympia and Carolina Zacarias and Spouses Claro Zacarias and Cristina Lorenzo were
the co-owners of an agricultural land identified as Lot 616 of the Malinta Estate. Said lot has an area of
23,703 square meters, covered by Transfer Certificate of Title (TCT) No. 26019, located at Karuhatan,
Valenzuela, Bulacan, now Valenzuela City. Eventually, Carolina became the owner of the property by
30
virtue of a Deed of Extrajudicial Settlement executed on October 17, 1976 by the heirs of Alfonso
Olympia, one of whom is Francisco Olympia, on their respective shares after Alfonso's death and by an
Affidavit of Settlement executed on June 24, 1992 by the spouses Claro and Cristina Zacarias on their
shares in the property.

Meanwhile, Anacleto Peña who was a tenant of the property and a holder of a Certificate of Agricultural
Leasehold issued on February 23, 1982, had a house constructed on the lot. He had several children on
the first marriage, among whom are Emilio Peña and Celia Segovia, who also had their houses
constructed on the property. On February 4, 1986, Anacleto, who was already 78 years old and a
widower, married Delia Razon, then only 29 years old. On February 17, 1990, Anacleto died intestate and
was survived by Delia and his children in his first marriage, including Emilio.

Emilio and Delia, the latter with the help of respondent Raymundo Eugenio, her son-in-law, continued
tilling and cultivating the property. On January 22, 1992, Emilio signed a handwritten declaration that he
was the tenant in the land and he was returning the landholding to Carolina Zacarias in consideration of
the sum of P1,500,000 as "disturbance compensation". He initially opted for a 1,000 square meter
homelot but later changed his mind. After receipt of the money, he executed a "Katibayang Paglilipat ng
Pag-mamay-ari".

In the meantime, petitioner William Perez, Joseph Lim, Willy Lim, Winston Lim, Edgar Lim, and Jaime Lim
established Milestone as incorporators, in order to acquire and develop the aforesaid property and the
adjacent parcel, Lot No. 617 of the Malinta Estate.

On July 30, 1992, Carolina Zacarias executed a deed of sale transfering the Lot No. 616 to petitioner
Milestone for P7,110,000. TCT No. 26019 was cancelled and in lieu thereof, TCT No. 25433 was issued in
the name of Milestone. On the same date, the adjoining Lot No. 617 covered by TCT No. V-25431 was
issued under the name of petitioner William Perez who subsequently sold the same to Milestone on the
basis of which TCT No. V-26481 was issued to it. Thus, Milestone became the owner of the adjoining lots,
Lot Nos. 616 and 617 of the Malinta Estate with a total area of three (3) hectares. Development of the
property then commenced.

On October 13, 1992, private respondents Delia Razon Peña and Raymundo Eugenio filed a complaint
against Emilio Peña, Carolina Zacarias and her brother Francisco Olympia, and William Perez with the
PARAD, which was amended on January 6, 1993 to implead Milestone as respondent, praying inter alia to
declare as null and void the sale by Carolina to Perez and by the latter to Milestone, and to recognize and
respect the tenancy of private respondents Delia and Raymundo.1âwphi1.nêt

In her answer, Carolina Zacarias declared that she chose Emilio Peña as her tenant-beneficiary on the
said property within 30 days after the death of Anacleto, conformably with Section 9 of Republic Act No.
3844.4 On July 28, 1993, the PARAD rendered a decision dismissing the complaint as follows: 5

WHEREFORE, upon the foregoing premises, judgment is hereby rendered:

1. Dismissing the instant complaint;

2. Dissolving the writ of Preliminary Injunction issued on May 24, 1993;

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

31
 4. No pronouncement as to costs.

SO ORDERED.

In the decision, the PARAD ruled that the order of preference cited in Section 9 of Republic Act 3844 is
not absolute and may be disregarded for valid cause. 6 It also took note that Emilio's two siblings have
openly recognized Emilio as the legitimate successor to Anacleto's tenancy rights. 7

Delia Razon Peña and Raymundo Eugenio appealed from the PARAD's decision to the DARAB. On
September 5, 1995, the DARAB reversed the decision of PARAD, the dispositive portion of which reads
as follows:

WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The Decision dated
July 28, 1993 is REVERSED.

Judgment is issued:

1. Declaring Delia Razon Peña the bona-fide tenant over the landholding in question;

2. Declaring the series of purchase and sale of the landholding in question as illegal, hence, null
and void;

3. Directing the Register of Deeds to cancel TCT No. V-26485 and all subsequent titles obtained
thereafter over the landholding named under William L. Perez and Milestone Realty and Co., Inc.;

4. Allowing Delia Razon Peña to exercise her right of redemption over the land within the
prescribed period granted by law;

5. Enjoining all Respondents-Appellees to desist from further disturbing Delia Razon Peña in the
peaceful possession and cultivation of the land;

6. Directing the DAR-DOJ Task Force on Illegal Conversion to file appropriate charges before the
Special Agrarian Court as regards the criminal aspect of this case.

SO ORDERED.8

In reversing the PARAD's decision, the DARAB noted that Carolina's affidavit did not show any categorical
admission that she made her choice within the one (1) month period except to state that "when Anacleto
died, the right of the deceased was inherited by Emilio Peña" which could only mean that she recognized
Emilio Peña by force of circumstance under a nebulous time frame. 9

In a petition for review to the Court of Appeals, the latter affirmed the DARAB's decision, thus:

We are convinced, beyond cavil, in the present recourse, that the Petitioners Carolina Olympia and
Francisco Olympia failed to choose, within the statutory period therefor, any tenant in substitution
of Anacleto Peña, the erstwhile deceased tenant on the landholding, and that, without prior or
simultaneous notice to Private Respondent Delia Peña, the Petitioners made their choice of
Petitioner Emilio Peña as substitute tenant only in January, 1992, after they had agreed to sell the
property to the Petitioner Milestone Realty & Co., Inc.

IN SUM, then, We find no reversible error committed by the DARAB under its oppunged Decision.
32
 IN THE LIGHT OF ALL THE FOREGOING, the Petition is denied due course and is hereby
dismissed. The appealed Decision is hereby AFFIRMED. With costs against the Petitioners.

SO ORDERED.10

Subsequently, petitioners filed a Motion for Reconsideration of the CA's decision. Said motion was denied
on October 12, 1998.

Hence, this petition assigning the following errors allegedly committed by respondent Court of Appeals: 11

THE RESPONDENT COURT OF APPEALS ERRED WITH GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN THE CONSTRUCTION AND
APPLICATION OF SECTION 9 OF REPUBLIC ACT 3844 BY HOLDING THAT PRIVATE
RESPONDENT DELIA RAZON PEÑA HAS SUCCEEDED TO HER DECEASED HUSBAND'S
LEASEHOLD RIGHT BY OPERATION OF LAW.

II

THE RESPONDENT COURT OF APPEALS ERRED IN DECLARING THE SALE BY THE

LANDOWNER TO PETITIONER WILLIAM L. PEREZ, AND BY THE LATTER TO PETITIONER
MILESTONE REALTY & CO., INC. AS NULL AND VOID, AND IN ORDERING THE
CANCELLATION OF THEIR RESPECTIVE TITLES.12

These two assigned errors tendered issues articulated in petitioners' memorandum as follows:

1. Whether or not Emilio Peña was validly chosen by Carolina Zacarias as the new tenant over the
landholding under dispute within one (1) month from the death of his father Anacleto, as prescribed by
Section 9 of R.A. 3844, as amended;

2. Whether or not Delia Razon Peña was a bona fide or de jure tenant over the landholding in question to
be accorded the alleged rights to security of tenure and of redemption under the agrarian reform laws;

3. Whether or not Emilio Peña validly renounced or otherwise caused the extinction of his tenancy rights
over the subject property;

4. Whether or not the sales of the subject property by Carolina Zacarias to William Perez and by the latter
to Milestone were null and void, hence merited the declaration of nullity and cancellation of the
respondents' respective titles;

5. Whether or not illegal conversion was committed by Milestone.

In sum, we find the following relevant issues now for our resolution:

1. Whether or not Delia Razon Peña has a right of first priority over Emilio Peña in succeeding to the
tenancy rights of Anacleto over the subject landholding.

2. Whether or not the sales of the subject lots by Carolina Zacarias to William Perez and then to Milestone
are null and void.

33
At the outset, it bears stressing that there appears to be no dispute as to tenancy relationship between
Carolina Zacarias and the late Anacleto Peña. The controversy centers on who is the rightful and legal
successor to Anacleto's tenancy rights. Relevant to the resolution of the first issue is Section 9 of Republic
Act No. 3844, otherwise known as the Code of Agrarian Reforms, which provides as follows:

SEC. 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of the Parties.  - In
case of death or permanent incapacity of the agricultural lessee to work his landholding, the
leasehold shall continue between the agricultural lessor and the person who can cultivate the
landholding personally, chosen by the agricultural lessor within one month from such death or
permanent incapacity, from among the following: (a) the surviving spouse; (b) the eldest direct
descendant by consanguinity; or (c) the next eldest descendant or descendants in the order of their
age: Provided, That in case the death or permanent incapacity of the agricultural lessee occurs
during the agricultural year, such choice shall be exercised at the end of that agricultural
year: Provided, further, That in the event the agricultural lessor fails to exercise his choice within
the periods herein provided, the priority shall be in accordance with the order herein established.

In case of death or permanent incapacity of the agricultural lessor, the leasehold shall bind his
legal heirs.

Petitioners contend that Section 9 does not require any form or manner in which the choice should be
made.13 They assail the Court of Appeals for heavily relying on the findings of the DARAB that there was
no convincing proof that Carolina exercised her right to choose from among the qualified heirs a
replacement for the deceased tenant, 14 when in fact a choice was made. In support thereof, petitioners
invoke Carolina's affidavit and her Answer to the complaint in the PARAD, both dated November 16, 1992
where Carolina recognized Emilio Peña as the successor to Anacleto's tenancy rights. Petitioners argued
that Delia could not have qualified as a successor-tenant to Anacleto due to lack of personal
cultivation.15 Further, she had not been paying rent on the land.

Responding to petitioners' contentions, respondents argue that Carolina did not choose the successor to
Anacleto's tenancy rights within one month from the death of Anacleto. Respondents note that it was only
after the lapse of two (2) years from the death of Anacleto on February 17, 1990, that both Carolina and
Emilio claimed in their respective affidavits that Emilio inherited the rights of Anacleto as a
tenant.16 According to respondents, such inaction to make a choice within the time frame required by law
is equivalent to waiver on Carolina's part to choose a substitute tenant. 17 Also, it appears that Carolina
made the choice in favor of Emilio Peña only by force of circumstance, i.e., when she was in the process
of negotiating the sale of the land to petitioners Perez and Milestone. 18

On this score, we agree with private respondents. As found by both the DARAB and the Court of Appeals,
Carolina had failed to exercise her right to choose a substitute for the deceased tenant, from among those
qualified, within the statutory period. 19 No cogent reason compels us to disturb the findings of the Court of
Appeals. As a general rule, findings of fact of the Court of Appeals are final and conclusive and cannot be
reviewed on appeal by the Supreme Court, provided they are borne out by the record or based on
substantial evidence.20

Section 9 of Republic Act No. 3844 is clear and unequivocal in providing for the rules on succession to
tenancy rights. A close examination of the provision leaves no doubt as to its rationale of providing for
continuity in agricultural leasehold relation in case of death or incapacity of a party. To this end, it provides
that in case of death or permanent incapacity of the agricultural lessee to work his landholding, the
leasehold shall continue between the agricultural lessor and the person who can cultivate the landholding
personally. In the same vein, the leasehold shall bind the legal heirs of the agricultural lessor in case of
death or permanent incapacity of the latter. It is to achieve this continuity of relationship that the
agricultural lessor is mandated by law to choose a successor-tenant within one month from the death or
34
incapacity of the agricultural lessee from among the following: (1) surviving spouse; (2) eldest direct
descendant by consanguinity; or (3) the next eldest direct descendant or descendants in the order of their
age. Should the lessor fail to exercise his choice within one month from the death of the tenant, the priority
shall be in accordance with the aforementioned order. In Manuel vs. Court of Appeals,21 we ruled that:

Agricultural leasehold relationship is not extinguished by the death or incapacity of the parties. In
case the agricultural lessee dies or is incapacitated, the leasehold relation shall continue between
the agricultural lessor and any of the legal heirs of the agricultural lessee who can cultivate the
landholding personally, in the order of preference provided under Section 9 of Republic Act 3844,
as chosen by the lessor within one month from such death or permanent incapacity. Since
petitioner Rodolfo Manuel failed to exercise his right of choice within the statutory period,
Edwardo's widow Enriqueta, who is first in the order of preference and who continued
working on the landholding upon her husband's death, succeeded him as agricultural
lessee. Thus, Enriqueta is subrogated to the rights of her husband and could exercise every right
Eduardo had as agricultural lessee, including the rights of pre-emption and redemption.

Applying Section 9 of Republic Act 3844, in the light of prevailing jurisprudence, it is undeniable that
respondent Delia Razon Peña, the surviving spouse of the original tenant, Anacleto Peña, is the first in the
order of preference to succeed to the tenancy rights of her husband because the lessor, Carolina
Zacarias, failed to exercise her right of choice within the one month period from the time of Anacleto's
death.

Petitioners cannot find succor in the declarations of Emilio Peña and the affidavit of Carolina Zacarias,
stating that Emilio succeeded to the tenancy rights of Anacleto. In the first place, Carolina's affidavit and
her Answer filed before the PARAD were both executed in 1992, or almost two years after the death of
Anacleto on February 17, 1990, way beyond the one month period provided for in Section 9 of Republic
Act 3844. Secondly, as found by the DARAB, a scrutiny of Carolina's declaration will show that she never
categorically averred that she made her choice within the one (1) month period. Instead, she narrated
passively that "when Anacleto died, the right of the deceased was inherited by Emilio Peña," prompting
the DARAB to conclude it merely "connotes that she recognized Emilio Peña by force of circumstance
under a nebulous time frame."22

Petitioners further argue that Delia cannot qualify as tenant even on the assumption that she was the
rightful successor to Anacleto's tenancy rights, because she did not personally cultivate the land and did
not pay rent. In essence, petitioners urge this Court to ascertain and evaluate certain material facts which,
however are not within the province of this Court to consider in a petition for review. Determination of
personal cultivation and rental payments are factual issues beyond the reach of this petition. Well
established is the rule that in an appeal via certiorari, only questions of law may be reviewed.23

On the second issue, however, we are unable to agree with the ruling of respondent Court of Appeals and
of DARAB that the sale of the land in question should be declared null and void. There is no legal basis for
such declaration. Lest it be forgotten, it is Carolina Zacarias who is the owner of the subject land and both
Emilio Peña and Delia Razon Peña only succeeded to the tenancy rights of Anacleto.

As an owner, Carolina has the right to dispose of the property without other limitations than those
established by law.24 This attribute of ownership is impliedly recognized in Sections 10, 11 and 12 of
Republic Act No. 3844,25 where the law allows the agricultural lessor to sell the landholding, with or without
the knowledge of the agricultural lessee and at the same time recognizes the right of preemption and
redemption of the agricultural lessee. Thus, the existence of tenancy rights of agricultural lessee cannot
affect nor derogate from the right of the agricultural lessor as owner to dispose of the property. The only
right of the agricultural lessee or his successor in interest is the right of preemption and/or
redemption.1âwphi1.nêt
35
In the case at bar, it is undisputed that Carolina became the absolute owner of the subject landholding by
virtue of Deed of Extrajudicial Settlement and Affidavit of Settlement executed by the other heirs of
Alfonso Olympia and Spouses Claro and Cristina Zacarias. As the owner, it is within her right to execute a
deed of sale of said landholding, without prejudice however to the tenancy rights and the right of
redemption of Delia Razon Peña. In Manuel,26 we held that the tenancy relationship is not affected or
severed by the change of ownership. The new owner is under the obligation to respect and maintain the
tenant's landholding. In turn, Delia Razon Peña, as the successor tenant, has the legal right of
redemption. This right of redemption is statutory in character. It attaches to a particular landholding by
operation of law.27

Finally, as to the question of illegal conversion of the land, suffice it to state that such determination is not
within the jurisdiction of this Court and is not proper in a petition for review on certiorari as it requires
evaluation and examination of pertinent facts.

WHEREFORE, the petition is PARTIALLY GRANTED. The assailed decision of the Court of Appeals in
CA-G.R. SP No. 39987 is AFFIRMED in so far as it recognizes Delia Razon Peña as the successor of
Anacleto Peña as the tenant, thereby allowing her to exercise her right of redemption over the land within
the prescribed period granted by law. However, said decision is REVERSED and SET ASIDE insofar as it
declared the sale of said landholding null and void. IN LIEU THEREOF, SAID SALE BY CAROLINA
ZACARIAS IS HEREBY DECLARED VALID, SUBJECT TO THE TENANCY RIGHTS AND RIGHT OF
REDEMPTION by the TENANT-LESSEE, private respondent Delia Razon Peña.

No pronouncements as to costs

SO ORDERED.

G.R. No. L-26255, June 30, 1969 PABLO BASBAS, PLAINTIFF-APPELLANT, VS. RUFINO ENTENA,
FLAVIANO TIBAY AND ANGELINA ENTENA (SPOUSES), AND R. M. RESURRECCION AS ACTING
REGISTRAR OF DEEDS OF THE PROVINCE OF LAGUNA, DEFENDANTS-APPELLEES.

This is an appeal from the decision of the Court of Agrarian Relations, in CAR Case No. 1478, Laguna
'65, on the sole question of whether tender of payment and judicial consignation of the purchase price are
necessary before a tenant-lessee may avail of the right of pre-emption or of redemption provided in
Sections 11 and 12 of the Agricultural Land Reform Code.

In the action filed by tenant Pablo Basbas in the Court of Agrarian Relations against the alleged
landholder or landholders Rufino Entena and the spouses Flaviano Tibay and Angelina Entena, the
parties agreed to stipulate on the following facts:

"1.That plaintiff Pablo Basbas is the leasehold tenant of a 1-1/2 hectare parcel of riceland, known as Lot
No. 1520 of the Sta. Rosa Estate Subdivision, located at Barrio Dila, Sta. Rosa, Laguna, formerly owned
by defendant Rufino Entena and presently owned by spouses Flaviano Tibay and Angelina Entena, his
co-defendants.

"2.That on April 11, 1964, defendant Rufino Entena executed a deed of sale of the aforementioned lot in
favor of defendant spouses Flaviano Tibay and Angelina Entena.

3.That on May 25, 1964, defendant Rufino Entena sent a letter, marked as Exhibit 'I', to plaintiff, to which
the latter sent a reply dated June 4, 1964, marked as Exhibit 'A'.

36
4.That under date of June 4, 1964, plaintiff wrote a letter, marked as Exhibit 'B', to the Governor of the
Land Authority, to which he received a reply from the Acting Officer in Charge of the Land Authority, dated
June 22, 1964, which is marked as Exhibit 'C', of which reply (Exhibit 'C') defendants have not been given
copy or otherwise informed.

5.That the deed of sale mentioned in paragraph 2 hereof, was registered in the office of the register of
deeds of Laguna on May 26, 1964.The certification of the Register of Deeds respecting said sale is
marked as Exhibit 'D'.

6.That defendant Rufino Entena and his wife Aniceta Carapatan executed an affidavit, dated April 11,
1964, marked as Exhibit 'I' - defendant Register of Deeds.

7.That defendant spouses Flaviano Tibay and Angelina Entena are son-in-law and daughter, respectively,
of defendant Rufino Entena, and said spouses live separately from their father.

8.That plaintiff has not deposited any sum of money in this Court to cover the pre-emption or redemption
price."

Exhibit "I" mentioned above (No. 3, Stipulation) refers to a letter sent by Rufino Entena to the tenant, to
the effect that the landholding was being put up for sale at P13,000.00 per hectare and the tenant being
given 90 days within which to communicate his intention to purchase the same:otherwise, the land would
be offered to other buyers (page 1, folder of exhibits).Exhibit "A" (No. 3, Stipulation) is the tenant's reply to
the landholder dated June 4, 1964, accepting the latter's offer to sell the land, although disagreeing to the
quoted price therefor.The tenant in the same letter informed the landholder that he was enlisting the aid of
the government in purchasing the land, as allowed by law.Exhibit "3" (No. 4, Stipulation) is the tenant's
letter of June 4, 1964 addressed to the Governor of the Land Authority, asking the help of said agency to
acquire the land he was working on and which was being offered for sale.Exhibit "C" (No. 4, Stipulation) is
the answer of the Acting Officer in Charge of the Land Authority, informing the tenant that his petition was
already being processed and definite action thereon will be taken as soon as the Land Bank shall have
been fully organized.Exhibit "1-Register of Deeds" (No. 6, Stipulation) is the sworn affidavit of the spouses
Rufino Entena and Aniceta Carapatan, dated April 11, 1964, attesting to the alleged fact that the tenant,
Pablo Basbas, was fully notified of the sale of their land 90 days before said conveyance, and that the
tenant had refused, or failed to exercise, the right of pre-emption granted him under the Agricultural Land
Reform Code (page 6, folder of exhibits).The submission of this affidavit enabled the registration on May
26, 1964 of the deed of sale in favor of vendees Flaviano Tibay and Angelina Entena.

On the basis of the aforequoted stipulation of facts, the Agrarian Court dismissed the case, reasoning that
as the plaintiff failed to make tender of payment and consignation of the purchase price the landowner can
not be compelled to sell the property to him.Plaintiff-tenant thus interposed the present appeal.

The appellant-tenant's claim to preference in purchasing the land he is working on, in case the said land is
to be sold, or to his right to redeem it in 2 years should the land be sold without his knowledge, is
predicated upon Sections 11 and 12 of the Agricultural Land Reform Code (Republic Act 3844):

"SEC. 11.Lessee's Right of Pre-emption.- In case the agricultural lessor decides to sell the landholding,
the agricultural lessee shall have the preferential right to buy the same under reasonable terms and
conditions:Provided, That the entire landholding offered for sale must be pre-empted by the Land
Authority if the owner so desires unless the majority of the lessees object to such acquisition:Provided,
further, That where there are two or more agricultural lessees, each shall be entitled to said preferential
right only to the extent of the area actually cultivated by him.The right of pre-emption under this section

37
may be exercised within ninety days from notice in writing, which shall be served by the owner on all
lessees affected."

"SEC. 12.Lessee's Right of Redemption.- In case the landholding is sold to a third person without the
knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable
price and consideration:Provided, That the entire landholding sold must be redeemed:Provided, further,
That where there are two or more agricultural lessees, each shall be entitled to said right of redemption
only to the extent of the area actually cultivated by him.The right of redemption under this Section may be
exercised within two years from the registration of the sale, and shall have priority over any other right of
legal redemption."

The case herein, which positively is an exercise by the tenant of his right to redeem the landholding,[1]
was nevertheless dismissed, the Agrarian Court considering as fatal the tenant's failure to tender payment
or consign the purchase price of the property.

It is argued for the appellant-lessee that the Court of Agrarian Relations erred in dismissing the action for
non-tender of the redemption price, since the law nowhere requires such tender, and, furthermore, the
tenant is not bound to redeem his landholding at the price for which it was sold, but only at a reasonable
price and consideration.

We find that no error was committed in dismissing the case.In the first place, there is no showing that the
Land Reform Council has proclaimed that the government machineries and agencies in the region are
already operating, as required by section 4 of Republic Act 3844.

In the second place, granting that sections 11 and 12 are operative, yet in Torres de Conejero, et al. vs.
Court of Appeals, et al., L-21812, April 29, 1966, 16 SCRA 775, this Court ruled that the timely exercise of
the right of legal redemption requires either tender of the price or valid consignation thereof.Said the Court
in said case (16 SCRA pages 781-782):

"It is not difficult to discern why the redemption price should either be fully offered in legal tender or else
validly consigned in court.Only by such means can the buyer become certain that the offer to redeem is
one made seriously and in good faith.A buyer can not be expected to entertain an offer of redemption
without attendant evidence that the redemptioner can, and is willing to accomplish the repurchase
immediately.A different rule would leave the buyer open to harassment by speculators or crackpots, as
well as to unnecessary prolongation of the redemption period, contrary to the policy of the law.While
consignation of the tendered price is not always necessary because legal redemption is not made to
discharge a pre-existing debt (Asturias Sugar Central vs. Cane Molasses Co., 60 Phil. 253), a valid tender
is indispensable, for the reasons already stated.Of course, consignation of the price would remove all
controversy as to the redemptioner's ability to pay at the proper time."

This Court further elaborated the point in its ruling on the motion to reconsider in the Torres case (16
SCRA, pages 783-784):

3.Whether or not the petitioners exercised diligence in asserting their willingness to pay is
irrelevant.Redemption by the co-owners of the vendor within 30 days is not a matter of intent, but is
effectuated only by payment, or valid tender, of the price within said period.How the redemptioners raise
the money is immaterial; timeliness and completeness of payment or tender are the things that matter.

4.The offer of the redemption price is not bona fide where it is shown that the offerer could not have made
payment in due time if the offer had been accepted.Note that the co-owner's right to redeem, being
granted by law, is binding on the purchaser of the undivided share by operation of law, and the latter's'

38
consent or acceptance is not required for the existence of the right of redemption.The only matter to be
investigated by the courts, therefore, is the timely exercise of the right, and the only way to exercise it is
by a valid payment or tender within the 30 days prefixed by the Civil Code."

That the legal redemptioner is only required to pay a reasonable price is no obstacle to the requirement of
tender, as ruled also in the Torres case (16 SCRA, page 781):

"It is, likewise, argued that tender of the price is excused because Article 1620 of the new Civil Code
allows the redemptioner to pay only a reasonable price if the price of alienation is grossly excessive, and
that the reasonableness of the price to be paid can only be determined by the courts.We think that the
right of a redemptioner to pay a reasonable price under Article 1620 does not excuse him from the duty to
make proper tender of the price that can be honestly deemed reasonable under the circumstances,
without prejudice to final arbitration by the courts; nor does it authorize said redemptioner to demand that
the vendee accept payment by installments, as petitioners have sought to do. - - - - - - - - - - - - - - - - - - - -
- - - - -.

In our opinion, the foregoing considerations are applicable to redemption (and pre-emption) under
sections 11 and 12 of the Land Reform Act.Both under said law and under Article 1620 of the Civil Code,
the right of legal redemption must be exercised within specified time limits:and the statutory periods would
be rendered meaningless and of easy evasion unless the redemptioner is required to make an actual
tender in good faith of what he believed to be the reasonable price of the land sought to be redeemed.The
existence of the right of redemption operates to depress the market value of the land until the period
expires, and to render that period indefinite by permitting the tenant to file a suit for redemption, with either
party unable to foresee when final judgment will terminate the action, would render nugatory the period of
two years fixed by the statute for making the redemption and virtually paralyze any efforts of the
landowner to realize the value of his land.No buyer can be expected to acquire it without any certainty as
to the amount for which it may be redeemed, so that he can recover at least his investment in case of
redemption.In the meantime, the landowner's needs and obligations can not be met.It is doubtful if any
such result was intended by the statute, absent clear wording to that effect.

The situation becomes worse when, as shown by the evidence in this case, the redemptioner has no
funds and must apply for them to the Land Authority, which, in turn, must depend on the availability of
funds from the Land Bank.It then becomes practically certain that the landowner will not be able to realize
the value of his property for an indefinite time beyond the two years redemption period.

The appellant herein, like the appellants in the Torres case, urge that this Court has ruled that previous
tender of the redemption money is not indispensable in De la Cruz vs. Marcelino, 84 Phil. 709, and Torio
vs. Del Rosario, 93 Phil. 800.It was, however, pointed out in the Torres decision that in the two cases
relied upon by appellant the redemptioners had consigned or deposited in court the redemption price
when action was filed, for which reason prior tender was held excused.In the case now before us, there
was neither prior tender nor did judicial consignation accompany the filing of the suit.Furthermore, in the
cases aforesaid, the Court took into account the brevity of the periods (9 days) allowed by the law
operating at the time (Civil Code of 1889); in the case at bar, the statute grants the tenant two years to
redeem.

It may be added that unless tender or consignation is made requisite to the valid exercise of the tenant's
right to redeem, everytime a redemption is attempted, a case must be filed in court to ascertain the
reasonable price.On the other hand, a prior tender by the tenant of the price that he considers reasonable
affords an opportunity to avoid litigation, for the landowner may well decide to accept a really reasonable
offer, considering that he would thereby save the attorney's fees and the expense of protracted litigation.

39
Section 74 of the Land Reform Act (Republic Act No. 3844) establishes a "Land Bank of the Philippines"
intended "to finance the acquisition by the Government of landed estates for division and resale to small
landholders, as well as the purchase of the landholding by the agricultural lessee from the landowner".No
expression in this part of the law, however, indicates, or even hints, that the 2-year redemption period will
not commence to run until the tenant obtains financing from the Land Bank, or stops the tenant from
securing redemption funds from some other source.The considerations expressed in this decision on the
confiscatory result of requiring the landowner to wait an indefinite time until the lessee acquires the means
for making the redemption militate against construing the statement of purposes for which the Land Bank
is created (section 74) as condition precedent to the alienation of a landholding.

WHEREFORE, the appealed order granting the motion to dismiss the complaint is affirmed. No costs.

G.R. No. 145568 November 17, 2005

HEIRS OF ENRIQUE TAN, SR., namely, NORMA TAN, JEANETTE TAN, JULIETA TAN, ROMMEL
TAN, and ENRIQUE TAN, JR., All represented by ROMMEL TAN, Petitioners,
vs.
REYNALDA POLLESCAS, Respondent.

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review 1 of the Decision2 of the Court of Appeals promulgated on 31
August 2000 in CA-G.R. SP No. 48823. The Court of Appeals affirmed the decision of the Department of
Agrarian Reform Adjudication Board ordering petitioners to respect respondent’s possession and
cultivation of the land.

The Antecedents

Petitioners Norma Tan, Jeanette Tan, Julieta Tan, Rommel 3 Tan and Enrique Tan, Jr. ("Tan Heirs") are
co-owners of a coconut farmland ("Land") located at Labo, Ozamis City with an area of 25,780 square
meters.4

Esteban Pollescas ("Esteban") was the original tenant of the Land. Upon Esteban’s death in 1991, his son
Enrique Pollescas ("Enrique") succeeded him and was appointed as tenant by the landowner Enrique Tan
("Tan").5

However, respondent Reynalda Pollescas ("Reynalda"), Esteban’s surviving second spouse, demanded
that Tan recognize her as Esteban’s successor. Tan did not accede. Thus, Reynalda filed with the
Department of Agrarian Reform Adjudication Board of Ozamis City ("DARAB-Ozamis") a complaint for
Annulment of Compromise Agreement, Quieting of Tenancy Relationship and damages. 6

In its Decision dated 28 April 1993, the DARAB-Ozamis declared Reynalda as the lawful tenant of the
Land. The DARAB-Ozamis apportioned the harvests between the Tan Heirs and Reynalda based on the
customary sharing system which is 2/3 to the landowner and 1/3 to the tenant. 7

40
On the following harvest dates, 11 and 19 of June, 9 September, 6 and 13 of December 1993, Reynalda
failed to deliver to the Tan Heirs 2/3 of the harvests amounting to ₱3,656.70. The Tan Heirs demanded
Reynalda to pay such amount.8 However, Reynalda ignored the demand.

Consequently, the Tan Heirs filed a complaint for estafa against Reynalda with the Municipal Trial Court in
Cities, Ozamis City, Branch 2. 9 The trial court found Reynalda guilty of estafa10 and sentenced her to five
months of arresto mayor maximum to two years of prision correccional minimum and ordered her to pay
the Tan Heirs ₱3,656.70, the amount which she misappropriated. 11

Subsequently, for Reynalda’s continued failure to deliver their share, the Tan Heirs filed with the DARAB,
Misamis Occidental ("DARAB-Misamis Occidental") an ejectment case. 12

On 18 September 1996, the DARAB-Misamis Occidental 13 ruled in favor of the Tan Heirs. The DARAB-
Misamis Occidental disposed of the case in this wise:

WHEREFORE, premises considered, decision is hereby rendered terminating the tenancy relationship of
herein parties.

Consequently, respondent Reynalda Pollescas is ordered to vacate the subject landholding and turn-over
its possession and cultivation to the plaintiffs.

The MARO of Ozamis City is likewise ordered to investigate and verify in the subject landholding if there
are actual farmer-cultivators in the area who may qualify as lessees thereof, who then should be placed
under leasehold pursuant to the mandate of Section 12, R.A. 6657.

SO ORDERED.14

Aggrieved by the decision, Reynalda appealed to the DARAB, Diliman, Quezon City ("DARAB"). The
DARAB reversed the decision of the DARAB-Misamis Occidental, to wit:

WHEREFORE, premises considered, the appealed decision dated 18 September 1996 is hereby
REVERSED and SET ASIDE and a new one is rendered ordering the landowners to respect the peaceful
possession and cultivation of the subject landholding.

Respondent-Appellant is hereby ordered to pay her unpaid leasehold rentals.

SO ORDERED.15

The Tan Heirs appealed the decision of the DARAB to the Court of Appeals. The Court of Appeals
affirmed the decision of the DARAB ordering the Tan Heirs to respect Reynalda’s possession and
cultivation of the Land.

Hence, this petition.

The Ruling of the Court of Appeals

In affirming the decision of the DARAB, the Court of Appeals cited Roxas y Cia v. Cabatuando, et
al.16 where this Court held that "x x x mere failure of a tenant to pay the landholder’s share does not
necessarily give the latter the right to eject the former when there is lack of deliberate intent on the part of
the tenant to pay x x x."

41
The Court of Appeals held that Reynalda’s failure to deliver the full amount of the Tan Heirs’ share could
not be considered as a willful and deliberate intent to deprive the Tan Heirs of their share. The Court of
Appeals held that Reynalda honestly believed that she was entitled to a share of the harvests in 1992-
1993 while the case for Annulment of Compromise Agreement was pending before the DARAB-Ozamis.
Reynalda also believed that she could effect a set-off for her 1992-1993 share from the 1994 share of the
Tan Heirs.

The Court of Appeals further declared that the rental must be legal to consider non-payment of such as a
ground for ejectment. The appellate court stated that:

x x x for a tenant’s failure to pay rental to come within the intendment of the law as a ground for ejectment,
it is imperative that the rental must be legal. What the law contemplates is the deliberate failure of the
tenant to pay the legal rental, not the failure to pay an illegal rental. A stipulation in a leasehold contract
requiring a lessee to pay an amount in excess of the amount allowed by law is considered contrary to law,
morals or public policy. Such contract is null and void as to the excess.

It is noteworthy that Section 34 of RA 3844 provides that the consideration for the lease of riceland and
lands devoted to other crops shall not be more than the equivalent of twenty-five per centum of the
average normal harvest. The tenant is obliged to pay a maximum of 25% of the normal harvest and not
two thirds as in the case at bar. Thus, even admitting that a set-off was effected in favor of respondent for
her 1992-1993 share, yet enough is left to cover the 25% share of the petitioners for the 1994 crop. 17

Citing Section 8 of Republic Act No. 3844 ("RA 3844"), the Court of Appeals also held "[t]here is nothing in
the law that makes failure to deliver share a ground for extinguishment of leasehold
agreement."18 Reynalda’s failure to deliver fully the share of the Tan Heirs is not sufficient to disturb the
agricultural leasehold relation.19

The Issues

In their Memorandum, the Tan Heirs raise the following issues:

WHETHER THERE IS NO EXCEPTION TO THE GROUNDS FOR EXTINGUISHMENT OF LEASEHOLD

RELATION UNDER SECTION 8 OF RA 3844.

II

WHETHER THE COURT OF APPEALS CORRECTLY RULED THAT REYNALDA IS OBLIGED TO PAY
ONLY 1/4 OR 25% OF THE NORMAL HARVEST AND NOT 2/3 WHEN THE SUBJECT LAND WAS NOT
YET PLACED UNDER THE LEASEHOLD SYSTEM PURSUANT TO SECTION 12 OF RA 6657.20

The Ruling of the Court

The petition lacks merit.

At the outset, the Court declares that RA 6657 is the governing statute in this case.

On 8 August 1963, RA 3844 or the Agricultural Land Reform Code 21 abolished and outlawed share
tenancy and put in its stead the agricultural leasehold system. 22 On 10 September 1971, Republic Act No.
6389 ("RA 6389") amending RA 3844 ("RA 3844 as amended") declared share tenancy relationships as
42
contrary to public policy.23 RA 6389 did not entirely repeal Republic Act No. 1199 24 and RA 3844 even if
RA 6389 substantially modified them. 25 Subsequently, Republic Act No. 6657 or the Comprehensive
Agrarian Reform Law of 1988 ("RA 6657") took effect on 15 June 1988. RA 6657 only expressly repealed
Section 35 of RA 3844 as amended.26 Thus, RA 6657 is the prevailing law in this case. The harvests in
dispute are for the years 1992-1993 or after the effectivity of RA 6657.

No ground for dispossession of landholding

Section 7 of RA 3844 as amended provides that once there is a leasehold relationship, as in the present
case, the landowner cannot eject the agricultural tenant from the land unless authorized by the court for
causes provided by law.27 RA 3844 as amended expressly recognizes and protects an agricultural
leasehold tenant’s right to security of tenure. 28

Section 36 of RA 3844 as amended enumerates the grounds for dispossession of the tenant’s
landholding, to wit:

SEC. 36. Possession of Landholding; Exceptions.—Notwithstanding any agreement as to the period or

future surrender of the land, an agricultural lessee shall continue in the enjoyment and possession of his
landholding except when his dispossession has been authorized by the Court in a judgment that is final
and executory if after due hearing it is shown that:

(1) The landholding is declared by the department head upon recommendation of the National Planning
Commission to be suited for residential, commercial, industrial or some other urban purposes: Provided,
That the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the
average of the gross harvests on his landholding during the last five preceding calendar years;

(2) The agricultural lessee failed to substantially comply with any of the terms and conditions of the
contract or any of the provisions of this Code unless his failure is caused by fortuitous event or force
majeure;

(3) The agricultural lessee planted crops or used the landholding for a purpose other than what had been
previously agreed upon;

(4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of
Section twenty-nine;

(5) The land or other substantial permanent improvement thereon is substantially damaged or destroyed
or has unreasonably deteriorated through the fault or negligence of the agricultural lessee;

(6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-
payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a
fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay
the rental due that particular crop is not thereby extinguished; or

(7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of
Section twenty-seven.

In the instant case, the Tan Heirs seek Reynalda’s ejectment from the Land on the ground of non-
payment of lease rental.

43
The Court agrees with the Court of Appeals that for non-payment of the lease rental to be a valid ground
to dispossess the agricultural lessee of the landholding, the amount of the lease rental must first of all be
lawful. If the amount of lease rental claimed exceeds the limit allowed by law, non-payment of lease rental
cannot be a ground to dispossess the agricultural lessee of the landholding.

Section 34 of RA 3844 as amended29 mandates that "not x x x more than" 25% of the average normal
harvest shall constitute the just and fair rental for leasehold. In this case, the Tan Heirs demanded
Reynalda to deliver 2/3 of the harvest as lease rental, which clearly exceeded the 25% maximum amount
prescribed by law. Therefore, the Tan Heirs cannot validly dispossess Reynalda of the landholding for
non-payment of rental precisely because the lease rental claimed by the Tan Heirs is unlawful.

Even assuming Reynalda agreed to deliver 2/3 of the harvest as lease rental, Reynalda is not obliged to
pay such lease rental for being unlawful. There is no legal basis to demand payment of such unlawful
lease rental. The courts will not enforce payment of a lease rental that violates the law. There was no
validly fixed lease rental demandable at the time of the harvests. Thus, Reynalda was never in default.

Reynalda and the Tan Heirs failed to agree on a lawful lease rental. Accordingly, the DAR must first fix the
provisional lease rental payable by Reynalda to the Tan Heirs pursuant to the second paragraph of
Section 34 of RA 3844 as amended. 30 Until the DAR has fixed the provisional lease rental, Reynalda
cannot be in default in the payment of lease rental since such amount is not yet determined. There can be
no delay in the payment of an undetermined lease rental because it is impossible to pay an undetermined
amount. That Reynalda is not yet in default in the payment of the lease rental is a basic reason why she
cannot be lawfully ejected from the Land for non-payment of rental. 31

No ground for extinguishment of leasehold relation

The Court also holds that there is no ground for the extinguishment of leasehold relation in this case.

Only in the instances stated in Sections 8 and 28 of RA 3844 as amended can leasehold relation be
terminated. These provisions read:

SEC. 8. Extinguishment of Agricultural Leasehold Relation.—The agricultural leasehold relation

established under this Code shall be extinguished by:

(1) Abandonment of the landholding without the knowledge of the agricultural lessor;

(2) Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be
served three months in advance; or

(3) Absence of the persons under Section nine to succeed to the lessee, in the event of death or
permanent incapacity of the lessee.

SEC. 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year.—The agricultural

lessee may terminate the leasehold during the agricultural year for any of the following causes:

(1) Cruel, inhuman or offensive treatment of the agricultural lessee or any member of his immediate farm
household by the agricultural lessor or his representative with the knowledge and consent of the lessor;

(2) Non-compliance on the part of the agricultural lessor with any of the obligations imposed upon him by
the provisions of this Code or by his contract with the agricultural lessee;

44
(3) Compulsion of the agricultural lessee or any member of his immediate farm household by the
agricultural lessor to do any work or render any service not in any way connected with farm work or even
without compulsion if no compensation is paid;

(4) Commission of a crime by the agricultural lessor or his representative against the agricultural lessee or
any member of his immediate farm household; or

(5) Voluntary surrender due to circumstances more advantageous to him and his family.

The case of Garchitorena v. Panganiban which the Tan Heirs invoked to justify the extinguishment of
leasehold relation does not appear on page 339 of Volume 8 of the Supreme Court Reports Annotated.
What is printed on such page is the case of Republic v. Perez with docket number L-16112 and
promulgated on 29 June 1963. For making a wrong citation, the Court admonishes Atty. Jesus S. Anonat,
counsel for the Tan Heirs, to be more careful when citing jurisprudence. The Court reminds him of his duty
not to knowingly misquote the text of a decision or authority 32 lest he be guilty of misleading the Court.

WHEREFORE, the Court DENIES the petition and AFFIRMS the assailed Decision dated 31 August 2000
of the Court of Appeals in CA-G.R. SP No. 48823. The Court REMANDS this case to the Department of
Agrarian Reform for the determination of the provisional lease rental. Costs against petitioners.

SO ORDERED.

45
 Share Tenancy Abolition

1. Hidalgo vs Hidalgo (G.R. No. L-25326)

2. Guerrero vs. CA (G.R. No. L-44570) – in previous

G.R. No. L-25326 May 29, 1970

IGMIDIO HIDALGO and MARTINA ROSALES, petitioners,

vs.
POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE, SATURNINO HIDALGO, BERNARDINA
MARQUEZ, VICENTE DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF DEEDS and
THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS, respondents.

G.R. No. L-25327 May 29, 1970

HILARIO AGUILA and ADELA HIDALGO, petitioners,

vs.

POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE, SATURNINO HIDALGO, BERNARDINA

MARQUEZ, VICENTE DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF DEEDS and
THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS, respondents.

Jose O. Lara for petitioners.

Pedro Panganiban y Tolentino for respondents.

TEEHANKEE, J.:

Two petitions for review of decisions of the Court of Agrarian Relations dismissing petitioners' actions
as share tenants for the enforcerment of the right to redeem agricultural lands, under the provisions of section 12 of
the Agricultural Land Reform Code. As the same issue of law is involved and the original landowner and vendees in
both cases are the same, the two cases are herein jointly decided.

Respondent-vendor Policarpio Hidalgo was until the time of the execution of the deeds of sale on September 27,
1963 and March 2, 1964 in favor of his seven above-named private co-respondents, the owner of the 22,876-square
meter and 7,638-square meter agricultural parcels of land situated in Lumil, San Jose, Batangas, described in the
decisions under review.

In Case L-25326, respondent-vendor sold the 22,876-square meter parcel of land, together with two other parcels of
land for P4,000.00. Petitioners-spouses Igmidio Hidalgo and Martina Resales, as tenants thereof, alleging that the
parcel worked by them as tenants is fairly worth P1,500.00, "taking into account the respective areas, productivities,
accessibilities, and assessed values of three lots, seek by way of redemption the execution of a deed of sale for the
same amount of P1,500.00 by respondents-vendees  in their favor.
1

46
In Case L-25327, respondent-vendor sold the 7,638-square meter parcel of land for P750.00, and petitioners-
spouses Hilario Aguila and Adela Hidalgo as tenants thereof, seek by way of redemption the execution of a deed of
sale for the same price of P750.00 by respondents-vendees in their favor.

As stated in the decisions under review, since the parties stipulated on the facts in both cases, petitioners-tenants
have for several years been working on the lands as share tenants. No 90-day notice of intention to sell the lands for
the exercise of the right of pre-emption prescribed by section 11 of the Agricultural Land Reform Code (Republic Act
No. 3844, enacted on August 8, 1963) was given by respondent-vendor to petitioners-tenants. Subsequently, the
deeds of sale executed by respondent-vendor were registered by respondents register of deeds and provincial
assessor of Batangas in the records of their respective offices notwithstanding the non-execution by respondent-
vendor of the affidavit required by section 13 of the Land Reform Code.  The actions for redemption were timely
2

filled on March 26, 1965 by petitioners-tenants within the two-year prescriptive period from registration of the sale,
prescribed by section 12 of the said Code.

The agrarian court rendered on July 19, 1965 two identical decisions dismissing the petitions for redemption.

It correctly focused on the sole issue of law as follows: "(T)he only issue in this case is whether or not plaintiffs,
as share tenants, are entitled to redeem the parcel of land they are working from the purchasers thereof, where no
notice was previously given to them by the vendor, who was their landholder, of the latter's intention to sell the
property and where the vendor did not execute the affidavit required by Sec. 13 of Republic Act No. 3844 before the
registration of the deed of sale. In other words, is the right of redemption granted by Sec. 12 of Republic Act No.
3844 applicable to share tenants?"

But proceeding from several erroneous assumptions and premises, it arrived at its erroneous conclusion that the
right of redemption granted by section 12 of the Land Reform Code is available to leasehold tenants only but not
to share tenants, and thus dismissed the petitions: "(S)ec 12 of Republic Act No. 3844, which comes under Chapter
I of said Act, under the heading 'Agricultural Leasehold System,' reads as follows:

'SEC. 12. Lessee's Right of Redemption. — In case the landholding is sold to a third person without
the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a
reasonable price and consideration: Provided: further, That where there are two or more agricultural
lessees, each shall be entitled to said right of redemption only to the extent of the area actually
cultivated by him. The right of redemption under this Section may be exercised within two years from
the registration of the sale, and shall have priority over any other right of legal redemption.'

The systems of agricultural tenancy recognized in this jurisdiction are share tenancy

and leasehold tenancy. (Sec. 4, Republic Act No. 1199; Sec. 4, Republic Act No. 3844).
A share tenant is altogether different from a leasehold tenant and their respective rights and
obligations are not co-extensive or co-equal. (See Secs. 22 to 41, inclusive, and Secs. 42 to 48,
inclusive, of Republic Act No. 1199; see also Secs. 4 to 38, inclusive, of Republic Act No. 3844).

It is our considered view that the right of redemption granted by Section 12 of Republic Act No. 3844
is applicable to leasehold tenants only, but not to share tenants, because said provision of law
clearly, definitely, and unequivocally grants said right to the 'agricultural lessee,' and to nobody else.
In enacting the Agricultural Land Reform Code, Congress was fully aware of the existence
of share tenancy and in fact provided for the abolition of the agricultural share tenancy system. (Sec.
4, Republic Act No. 3844.) If it were the intention of Congress to grant the right of redemption
to share tenants, it would have unmistakably and unequivocally done so. We cannot extend said
right to share tenants through judicial legislation, wherever our sympathies may lie.

The agrarian court fell into several erroneous assumptions and premises in holding that agricultural share tenancy
remains recognized in this jurisdiction; that "a share tenant is altogether different from a leasehold tenant and their
respective rights and obligations are not co-extensive or co-equal"; and that the right of redemption granted by
section 12 of the Land Reform Code" is applicable to leasehold tenants only, but not to share tenants, because said
provision of law clearly, definitely, and unequivocally grants said right to the 'agricultural lessee,' and to nobody
else."
47
1. The very essence of the Agricultural Land Reform Code is the abolition of agricultural share tenancy as
proclaimed in its title. Section 4 of the Code expressly outlaws agricultural share tenancy as "contrary to public
policy" and decrees its abolition. 3 Section 2 of the Code expressly declares it to be the policy of the State, inter alia,
"to establish owner cultivatorship and the economic family-size farm as the basis of Philippine agriculture and, as a
consequence, divert landlord capital in agriculture to industrial development; to achieve a dignified existence for
the small farmers free from pernicious institutional restraints and practices; ... and to make the small farmers more
independent, self-reliant and responsible citizens, and a source of strength in our democratic society."  It was error,
4

therefore, for the agrarian court to state the premise after the Land Reform Code had already been enacted, that
"the systems of agricultural tenancy recognized in this jurisdiction are share tenancy and leasehold tenancy." A
more accurate statement of the premise is that based on the transitory provision in the first proviso of section 4 of
the Code, i.e. that existing share tenancy contracts are allowed to continue temporarily in force and effect,
notwithstanding their express abolition, until whichever of the following events occurs earlier: (a) the end of the
agricultural year when the National Land Reform Council makes the proclamation declaring the region or locality a
land reform area; or (b) the shorter period provided in the share tenancy contracts expires; or (c) the share tenant
sooner exercises his option to elect the leasehold system.

In anticipation of the expiration of share tenancy contracts — whether by contractual stipulation or the tenant's
exercise of his option to elect the leasehold system instead or by virtue of their nullity — occuring before the
proclamation of the locality as a land reform area, the same section 4 has further declared in the third proviso
thereof that in such event, the tenant shall continue in possession of the land for cultivation and "there shall be
presumed to exist a leasehold relationship under the provisions of this Code."

2. The foregoing exposes the error of the agrarian court's corollary premise that "a share tenant is altogether
different from a leasehold tenant." The agrarian court's dictum that "their respective rights and obligations are not
co-extensive or co-equal "refer to their contractual relations with the landowner, with respect to the contributions
given, management, division or payment of the produce. 5

But the Land Reform Code forges by operation of law, between the landowner and the farmer — be
a leasehold tenant or temporarily a share tenant — a vinculum juris with certain vital juridical consequences, such
as security of tenure of the tenant and the tenant's right to continue in possession of the land he works despite the
expiration of the contract or the sale or transfer of the land to third persons, and now, more basically, the
farmer's pre-emptive right to buy the land he cultivates under section 11 of the Code  as well as the right
6

to redeem the land, if sold to a third person without his knowledge, under section 12 of the Code.

This is an essential and indispensable mandate of the Code to implement the state's policy of establishing owner-
cultivatorship and to achieve a dignified and self-reliant existence for the small farmers that would make them a
pillar of strength of our Republic. Aside from expropriation by the Land Authority of private agricultural land for resale
in economic family-size farm units "to bona fide tenants, occupants and qualified farmers,"  the purchase by farmers
7

of the lands cultivated by them, when the owner decides to sell the same — through rights of pre-emption and
redemption — are the only means prescribed by the Code to achieve the declared policy of the State.

3. The agrarian court therefore facilely let itself fall into the error of concluding that the right of redemption (as well
as necessarily the right of pre-emption) imposed by the Code is available to leasehold tenants only and
excludes share tenants for the literal reason that the Code grants said rights only to the "agricultural lessee and to
nobody else." For one, it immediately comes to mind that the Code did not mention tenants,
whether leasehold or share tenants, because it outlaws share tenancy and envisions the
agricultural leasehold system as its replacement. Thus, Chapter I of the Code, comprising sections 4 to 38,
extensively deals with the establishment of "agricultural leasehold relation," defines the parties thereto and the rights
and obligations of the "agricultural lessor" and of the "agricultural lessee" (without the slightest mention
of leasehold tenants) and the statutory consideration or rental for the leasehold to be paid by the lessee. There is a
studied omission in the Code of the use of the term tenant in deference to the "abolition of tenancy" as proclaimed in
the very title of the Code, and the elevation of the tenant's status to that of lessee.

Then, the terms "agricultural lessor" and "agricultural lessee" are consistently used throughout the Chapter and
carried over the particular sections (11 and 12) on pre-emption and redemption. The agrarian court's literal
construction would wreak havoc on and defeat the proclaimed and announced legislative intent and policy of the
48
State of establishing owner-cultivatorship for the farmers, who invariably were all share tenants before the
enactment of the Code and whom the Code would now uplift to the status of lessees.

A graphic instance of this fallacy would be found in section 11 providing that "In case the  agricultural lessor decides
to sell the landholding the agricultural lessee shall have the preferential right to buy the same under reasonable
terms and conditions." It will be seen that the term "agricultural lessor" is here used interchangeably with the term
"landowner"; which conflicts with the Code's definition of "agricultural lessor" to mean "a person natural or juridical,
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 certains." 8 Obviously, the Code precisely referred to the "agricultural lessor (who)
decides to sell the landholding," when it could have more precisely referred to the "landowner," who alone as such,
rather than a civil law lessee, usufructuary or legal possessor, could sell the landholding, but it certainly cannot be
logically contended that the imprecision should defeat the clear spirit and intent of the provision.

4. We have, here, then a case of where the true intent of the law is clear that calls for the application of the cardinal
rule of statutory construction that such intent or spirit must prevail over the letter thereof, for whatever is within the
spirit of a statute is within the statute, since adherence to the letter would result in absurdity, injustice and
contradictions and would defeat the plain and vital purpose of the statute.

Section 11 of the Code providing for the "agricultural lessee's" preferential right to buy the land he cultivates
provides expressly that "the entire landholding offered for sale must be pre-empted by the Land Authority if the
landowner so desires, unless the majority of the lessees object to such acquisition," presumably for being beyond
their capabilities. Taken together with the provisions of Chapter III of the Code on the organization and functions of
the Land Authority and Chapter VII on the Land Project Administration and the creation and functions of the National
Land Reform Council, (in which chapters the legislature obviously was not laboring under the inhibition of referring
to the term tenants as it was in Chapter I establishing the agricultural leasehold system and decreeing the abolition
of share tenancy, 9 the Code's intent, policy and objective to give both agricultural lessees and farmers who
transitionally continue to be share tenants notwithstanding the Code's enactment, the same priority and preferential
rights over the lands under their cultivation, in the event of acquisition of the lands, by expropriation or voluntary
sale, for distribution or resale that may be initiated by the Land Authority or the National Land Reform Council, are
clearly and expressly stated.

Thus Chapter III, section 51 of the Code decrees it the responsibility of the Land Authority "(1) To initiate and
prosecute expropriation proceedings for the acquisition of private agricultural lands as defined in Section one
hundred sixty-six of chapter XI of this Code for the purpose of subdivision into economic family — size farm units
and resale of said farm units to bona fide tenants, occupants and qualified farmers ... and "(2) To help bona fide
farmers without lands of agricultural owner-cultivators of uneconomic-size farms to acquire and own economic
family-size farm units ...."

Similarly, Chapter VII, section 128 of the Code, in enjoining the National Land Reform Council to formulate the
necessary rules and regulations to implement the Code's provisions for selection of agricultural land to be acquired
and distributed and of the beneficiaries of the family farms, ordains the giving of the same priority "to the actual
occupants personally cultivating the land either as agricultural lessees or otherwise with respect to the area under
their cultivation."

5. It would certainly result in absurdity, contradictions and injustice if a share tenant would be denied the rights of
pre-emption and redemption which he seeks to exercise on his own resources, notwithstanding that the National
Land Reform Council has not yet proclaimed that all the government machineries and agencies in the region or
locality envisioned in the Code are operating — which machineries and agencies, particularly, the Land Bank were
precisely created "to finance the acquisition by the Government of landed estates for division and resale to small
landholders, as well as the purchase of the landholding by the agricultural lessee from the landowner."    The non-
10

operation in the interval of the Land Bank and the government machineries and agencies in the region which are
envisioned in the Code to assist the share tenant in shedding off the yoke of tenancy and afford him the financial
assistance to exercise his option of electing the leasehold system and his preferential right of purchasing the land
cultivated by him could not possibly have been intended by Congress to prevent the exercise of any of these vital
rights by a share tenant who is able to do so, e.g. to purchase the land, on his own and without government
assistance. It would be absurd and unjust that while the government is unable to render such assistance, the share
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tenant would be deemed deprived of the very rights granted him by the Code which he is in a position to exercise
even without government assistance.

6. Herein lies the distinction between the present case and Basbas vs. Entena   where the Court upheld the
11

agrarian court's dismissal of the therein tenant's action to redeem the landholding sold to a third party by virtue of
the tenant's failure to tender payment or consign the purchase price of the property. There, the tenant-redemptioner
was shown by the evidence to have no funds and had merely applied for them to the Land Authority which was not
yet operating in the locality and hence, the Court held that no part of the Code "indicates or even hints that the 2-
year redemption period will not commence to run (indefinitely) until the tenant obtains financing from the Land
Bank, or stops the tenant from securing redemption funds from some other source."   In the present case, the
12

petitioners-tenants' possession of funds and compliance with the requirements of redemption are not questioned,
the case having been submitted and decided on the sole legal issue of the right of redemption being available to
them as share tenants. The clear and logical implication of Basbas is where the tenant has his own resources or
secures redemption funds from sources other than the Land Bank or government agencies under the Code, the fact
that the locality has not been proclaimed a land reform area and that such government machineries and agencies
are not operating therein is of no relevance and cannot prejudice the tenant's rights under the Code to redeem the
landholding.

7. Even from the landowner's practical and equitable viewpoint, the landowner is not prejudiced in the least by
recognizing the share tenant's right of redemption. The landowner, having decided to sell his land, has gotten his
price therefor from his vendees. (The same holds true in case of the tenant's exercise of the pre-emptive right by the
tenant who is called upon to pay the landowner the price, if reasonable, within ninety days from the landowner's
written notice.) As for the vendees, neither are they prejudiced for they will get back from the tenant-redemptioner
the price that they paid the vendor, if reasonable, since the Code grants the agricultural lessee or tenant the top
priority of redemption of the landholding cultivated by him and expressly decrees that the same "shall have priority
over any other right of legal redemption." In the absence of any provision in the Code as to manner of and amounts
payable on redemption, the pertinent provisions of the Civil Code apply in a suppletory character.   Hence, the 13

vendees would be entitled to receive from the redemptioners the amount of their purchase besides "(1) the
expenses of the contract, and any other legitimate payments made by reason of the sale; (and) (2) the necessary
and useful expenses made on the thing sold."  14

8. The historical background for the enactment of the Code's provisions on pre-emption and redemption further
strengthens the Court's opinion. It is noted by Dean Montemayor   that "(T)his is a new right which has not been
15

granted to tenants under the Agricultural Tenancy Act. It further bolsters the security of tenure of the agricultural
lessee and further encourages agricultural lessees to become owner-cultivators.

In the past, a landlord often ostensibly sold his land being cultivated by his tenant to another tenant,
who in turn filed a petition for ejectment against the first tenant on the ground of personal cultivation.
While many of such sales were simulated, there was a formal transfer of title in every case, and the
first tenant was invariably ordered ejected.

There is indication in this case of the same pattern of sale by the landowner to another tenant,   in order to effect the
16

ejectment of petitioners-tenants. This is further bolstered by the fact that the sales were executed by respondent-
vendor on September 27, 1963 and March 2, 1954 shortly after the enactment on August 8, 1963 of the Land
Reform Code — which furnishes still another reason for upholding ... petitioners-tenants' right of redemption, for
certainly a landowner cannot be permitted to defeat the Code's clear intent by precipitately disposing of his lands,
even before the tenant has been given the time to exercise his newly granted option to elect the new agricultural
leasehold system established by the Code as a replacement for the share tenancy outlawed by it.

9. Clearly then, the Code intended, as above discussed, to afford the farmers' who transitionally continued to be
share tenants after its enactment but who inexorably would be agricultural lessees by virtue of the Code's
proclaimed abolition of tenancy, the same priority and preferential right as those other share tenants, who upon the
enactment of the Code or soon thereafter were earlier converted by fortuitous circumstance into agricultural
lessees, to acquire the lands under their cultivation in the event of their voluntary sale by the owner or of their
acquisition, by expropriation or otherwise, by the Land Authority. It then becomes the court's duty to enforce the
intent and will of the Code, for "... (I)n fact, the spirit or intention of a statute prevails over the letter thereof.' (Tañada
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vs. Cuenco, L-10520, Feb. 23, 1957, citing 82 C.J.S., p. 526.) A statute 'should be construed according to its spirit
or intention, disregarding as far as necessary, the letter of the law.' (Lopez & Sons, Inc. vs. Court of Tax Appeals,
100 Phil. 855.) By this, we do not correct the act of the Legislature, but rather ... carry out and give due course to 'its
intent.' (Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 850)."    The Court has consistently held in line with
17

authoritative principles of statutory construction that, it will reject a narrow and literal interpretation, such as that
given by the agrarian court, that would defeat and frustrate rather than foster and give life to the law's declared
policy and intent.   Finally, under the established jurisprudence of the Court, in the interpretation of tenancy and
18

labor legislation, it will be guided by more than just an inquiry into the letter of the law as against its spirit and will
ultimately resolve grave doubts in favor of the tenant and worker.  19

The agrarian court's dismissal of the cases at bar should therefore be reversed and petitioners-tenants' right to
redeem the landholdings recognized section 12 of the Code.

In Case L-25326, however, the deed of sale executed by respondent-vendor in favor of respondents-vendees for
the price of P4,000.00 covers three parcels of land, while what is sought to be redeemed is only the first parcel of
land of 22,876 square meters, described in the deed. Petitioners-tenants' allegation that the proportionate worth of
said parcel "taking into account the respective areas, productivities, accessibilities and assessed values of the three
lots," is P1,500.00, was traversed by respondents in their answer, with the claim that "the said land is fairly worth
P20,000.00.   While the vendor would be bound by, and cannot claim more than, the price stated in the deed, and
20

the Code precisely provides that the farmer shall have "the preferential right to buy the (landholding)
under reasonable terms and conditions" or "redeem the same at a reasonable price and consideration"   with a view
21

to affording the farmer the right to seek judicial assistance and relief to fix such reasonable price and terms when
the landowner places in the notice to sell or deed an excessive or exorbitant amount in collusion with the vendee,
we note that in this case the deed of sale itself acknowledged that the selling price of P4,000.00 therein stated was
not the fair price since an additional consideration therein stated was that the vendees would support the vendor
during his lifetime and take care of him, should he fall ill, and even assumed the expenses of his burial upon his
death:

Ang halagang P4,000.00 ay hindi kaulat sa tunay na halaga ng mga lupa subalit ang mga bumili ay
may katungkulan na sostentohin ako habang ako'y nabubuhay, ipaanyo at ipagamot ako kung ako
ay may sakit, saka ipalibing ako kung ako ay mamatay sa kanilang gastos at ito ay isa sa alang-
alang o consideracion ng bilihang ito.

Under these circumstances, since the agrarian court did not rule upon conflicting claims of the parties as to what
was the proportionate worth of the parcel of land in the stated price of P4,000.00 — whether P1,500.00 as claimed
by petitioners or a little bit more, considering the proportionate values of the two other parcels, but the whole total is
not to exceed the stated price of P4,000.00, since the vendor is bound thereby — and likewise, what was the
additional proportionate worth of the expenses assumed by the vendees, assuming that petitioners are not willing to
assume the same obligation, the case should be remanded to the agrarian court solely for the purpose of
determining the reasonable price and consideration to be paid by petitioners for redeeming the landholding, in
accordance with these observations.

In Case L-25327, there is no question as to the price of P750.00 paid by the vendees and no additional
consideration or expenses, unlike in Case L-25326, supra, assumed by the vendees. Hence, petitioners therein are
entitled to redeem the landholding for the same stated price.

ACCORDINGLY, the decisions appealed from are hereby reversed, and the petitions to redeem the subject
landholdings are granted.

In Case L-25326, however, the case is remanded to the agrarian court solely for determining the reasonable price to
be paid by petitioners therein to respondents-vendees for redemption of the landholding in accordance with the
observations hereinabove made.

No pronouncement as to costs.

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