Leasehold Relationship: Dispossession

 Grounds for Dispossession:

1. Owner will cultivate or has decided to convert the land
2. There is substantial breach of contract on the part of the agricultural lessee
3. There is substantial damage to land or improvement due to the negligence of the
agricultural lessee
- may be a point of contention when it comes to court
- parameters are clear: is substantial damage to land or improvement due to the
negligence
4. Non-payment of rental
5. Sub-leasing the property – agricultural lessee subjects the land to another agricultural
leasehold; it means there’s a lease and another lease below that
- If the civil code lessee doesn’t have the authority to do this, how much more the
agricultural lessee without the authority or consent of the owner?
- Atty: Ground No. 3 and 5 are self-explanatory.

 Ground No. 1: Owner will cultivate or has decided to convert the land
Atty Felongco: Is it possible for the owner to let the lessee move out as he will cultivate or convert
the land? YES, it is possible but there are consequences and requirement.

Owner invokes ground

Effects:
1. When landholding is more than 5 hectares, the agricultural lessee is entitled to disturbance
compensation (Atty: We will not dwell into the computation. Let us just limit ourselves into
knowing the effect when the ground is invoked.)
- Disturbance Compensation is in the form of money
- Reason: The agricultural lessee has already made some improvements or investments
on the land so a compensation for the conversion or cultivation is mandated by the law.
- Atty: What if the landholding is less than 5 hectares? There’s no need for disturbance
compensation.
2. When the landholding is less than 5 hectares, there’s 1-year notice prior to the filing.
- The ground for dispossession has to be invoked with the aid of the court. There has to
be a court case filed and intention should be stated whether personal cultivation or
conversion.
- The landowner cannot go to court invoking the ground of personal cultivation or
conversion within 1 year if the land is less than 5 hectares.
- Reason for 1-year notice: To give time for the agricultural lessee to pull out or recover
the investments he made over the land.
Time limit or period:
1. If the ground is personal cultivation, there has to be land cultivation within 3 years from
the time of the grant of dispossession. = If not, lessor is considered in bad faith. lessee may
demand re-possession and damages.
2. If the ground is personal conversion, the land has to be converted within 1 year from the
time of the grant of dispossession. = If not, lessor is considered in bad faith. lessee may
demand re-possession and damages.

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  Atty: When we are talking about conversion within the purview of RA 3844, we are talking
about conversion prior to the effectivity of CARL as amended. Prior to the effectivity of
CARL as amended, there’s a separate set of rules for conversion. After the effectivity of
CARL as amended, there’s another separate set of rules for conversion. That’s why It’s
important for us to determine when CARL took effect.

 Under RA 3844 prior to the effectivity of CARL as amended, the owner may invoke
personal conversion as a ground for dispossession. The conversion must be done within 1
year. Conversion as a ground must be made with the aid of the court.

 Effectivity of CARL is the reckoning point.

 Can It be that the ground for conversion is effected through classification re-
classification such that it will not be the landowner who will de facto convert the land
but it will be the pertinent governmental agencies such as LGUs, NHA, etc.? Is it
possible for governmental agencies to re-classify an agricultural land into residential or
industrial? Yes, in the case of Davao New Town v. Saliga.

In that case, the court was called on to decide whether there existed an agricultural leasehold.
Now, what the petitioners wanted the court to do was to declare that there was an agricultural
leasehold arrangement because formerly there was shared tenancy relationship between the
owner and the farmers.

RA 3844 converts all shared tenancy to agricultural leasehold after its effectivity, then
according to the farmers in this case they are to be considered as agricultural lessees in the
land. Therefore, they cannot be deprived of the land unless there’s a valid ground for
termination or dispossession.

The court said that there’s no shared tenancy in the first place so there’s nothing to convert to
agricultural land. However, the court engaged the farmers’ argument and said that they are no
longer considered as agricultural lessees because the land subject to the purported agricultural
leasehold was already re-classified by appropriate government agencies citing RA 3844 as
amended by Section 7 of R.A. No. 6389.

Under Section 36(1) of R.A. No. 3844, as amended by Section 7 of R.A. No. 6389,55
declaration by the department head, upon recommendation of the National Planning
Commission, to be suited for residential, commercial, industrial or some other urban
purposes, terminates the right of the agricultural lessee to continue in its possession and
enjoyment.

(Atty: In this case, what is lacking is the determination if it’s a ground for termination or a
ground for dispossession. If it’s termination, 3 grounds should be present. If it’s
dispossession, there has to be an aid of the court. Now, Section 36(1) of R.A. No. 3844
becomes a ground for termination.)

 Ground No. 2: There is substantial breach of contract on the part of the agricultural lessee
What constitutes substantial breach?
1. Failure to comply with the terms of the contract
2. Deviation from agreed crops and use
3. Failure to adopt proven farm practices

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 Ground No. 4: Non-payment of rental
Non-payment of rental must be:
1. Willful and deliberate (Sta. Ana v. Sps. Carpo case)
2. Involves lawful rental amount (Heirs of Tan v. Pollescas case)

For non-payment of rental:

In civil code, file an unlawful detainer case in court.
In agricultural leasehold, owner should file a dispossession case governed by RA 3844 in an agrarian
relations court.

The agricultural lessee's failure to pay the lease rentals, in order to warrant his dispossession of the
landholding, must be willful and deliberate and must have lasted for at least two (2) years. The
term "deliberate" is characterized by or results from slow, careful, thorough calculation and
consideration of effects and consequences, while the term "willful" is defined, as one governed by
will without yielding to reason or without regard to reason. Mere failure of an agricultural lessee to
pay the agricultural lessor's share does not necessarily give the latter the right to eject the former
absent a deliberate intent on the part of the agricultural lessee to pay. (Natividad v. Mariano case)

TERMINATION DISPOSSESSION
- no court approval is needed - requires court order
- done either as a voluntary act or act of God - must be proven with sufficient evidence