EPUBLIC ACT No.

1199             August 30, 1954

AN ACT TO GOVERN THE RELATIONS BETWEEN LANDHOLDERS AND TENANTS OF AGRICULTURAL LANDS
(LEASEHOLDS AND SHARE TENANCY)

PART I

GENERAL PROVISIONS

SECTION 1. Title. - This Act shall be known as the "Agricultural Tenancy Act of the Philippines ."

Section 2. Purposes. - It is the purpose of this Act to establish agricultural tenancy relations between landholders and tenants
upon the principle of school justice; to afford adequate protection to the rights of both tenants and landholders; to insure an
equitable division of the produce and income derived from the land; to provide tenant- farmers with incentives to greater and more
efficient agricultural production; to bolster their economic position and to encourage their participation in the development of
peaceful, vigorous and democratic rural communities.

Section 3. Agricultural Tenancy Defined. - Agricultural tenancy is 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 4. Systems of Agricultural Tenancy; Their Definitions . - Agricultural tenancy is classified into leasehold tenancy and
share tenancy.

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 personally 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.

Leasehold tenancy exists when a person who, either personally or with the aid of labor available from members of his immediate
farm household, undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single person together with
members of his immediate farm household, belonging to or legally possessed by, another in consideration of a price certain or
ascertainable to be paid by the person cultivating the land either in percentage of the production or in a fixed amount in money, or
in both.

Section 5. Definitions of Terms . - As used in this Act:

(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 or
ascertainable in produce or in money or both, under the leasehold tenancy system.

(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 or ascertainable under the leasehold tenancy system.

(c) Agricultural year is the period of time necessary for the raising of seasonal agricultural products, including the preparation of
the land, and the sowing, planting and harvesting of the crop: Provided, however, That in the case of coconuts, citrus, coffee,
ramie, and other crops where more than one harvest is obtained from one planting, the words "agricultural year" shall mean the
period of time from the preparation of land to the first harvest and thereafter from harvest to harvest. In both cases, the period of
time may be shorter or longer than a calendar year.

(d) Farm implements include hand tools or machines ordinarily employed in a farm enterprise.

(e) Work animals include animals ordinarily employed in a farm enterprise. The words include carabaos, horses, bullocks, etc.

(f) Pulling of the seedlings is a phase of farm work in which seedlings are uprooted from the seed beds immediately before
transplanting.

(g) Final harrowing in the last stage in pulverizing the soil into fine particles in readying the field for the transplanting of the
seedlings.

(h) Reaping is the cutting of rice stalks.

(i) Harvesting shall mean the gathering of the fruits or produce of a crop other than rice.

(j) Piling into small stacks used as a term in rice share tenancy shall mean the piling into several small stacks within the tenant's
holdings of reaped and bundled stalks containing the grain, preparatory to their transportation to the place designated for their
threshing.

(k) Piling into big stacks used as a term in rice share tenancy shall mean the piling into one huge stack of the several small stacks of
reaped and bundled stalks containing grain, which constitute the entire harvest of the tenant from his holdings, preparatory to
threshing.

(l) Proven farm practices include those sound farming practices which have attained general acceptance through usage or are
officially recommended by the Department of Agriculture and Natural Resources.

(m) Fair rental value is an amount of money not in excess of allowable depreciation plus six per cent interest per annum on the
investment computed at its market value: Provided, however, That the fair rental value for the work animal or animals and farm
implements required to produce the crop shall not exceed five per cent of the gross harvest for the animal or animals and five per
cent for implements: And, provided, further, That whenever a tractor or power and the necessary implements are utilized
interchangeably with work animals in the same holding during the same agricultural year the rental shall not exceed ten per cent for
the combined services.

(n) Immediately after as used in this Act shall be inclusive of the last day of harvesting, threshing or processing and the next five
days thereafter.

(o) Immediate farm household includes the members of the family of the tenant, and such other person or persons, whether related
to the tenant or not, who are independent upon him for support and who usually help him operate the farm enterprise.

(p) Incapacity means any cause or circumstances which prevents the tenant from fulfilling his contractual obligations and those
imposed by this Act.

(q) Inspect means to examine and observe. However, such examinations and observations shall not include any acts of intimidation
or coercion.

(r) Auxiliary crop is any product raised other than the crop to which the cultivation of the land is principally devoted; and excluding
the produce of the lot referred to in Section twenty-six.

Section 6. Tenancy Relationship; Its Definition. - Tenancy relationship is a juridical tie which arises between a landholder and
a tenant once they agree, expressly or impliedly, to undertake jointly the cultivation of land belonging to the former, either under
the share tenancy or leasehold tenancy system, as a result of which relationship the tenant acquires the right to continue working
on and cultivating the land, until and unless he is dispossessed of his holdings for any of the just causes enumerated in Section fifty
or the relationship is terminated in accordance with Section nine.

Section 7. Tenancy Relationship; How established; Security of Tenure . - Tenancy relationship may be established either
verbally or in writing, expressly or impliedly. Once such relationship is established, the tenant shall be entitled to security of tenure
as hereinafter provided.

Section 8. Limitations of Relation . - The relation of landholder and tenant shall be limited to the person who furnishes land,
either as owner, lessee, usufructuary, or legal possessor, and to the person who actually works the land himself with the aid of labor
available from within his immediate farm household.

Section 9. Severance of Relationship. - The tenancy relationship is extinguished by the voluntary surrender of the land by, or
the death or incapacity of, the tenant, but his heirs or the members of his immediate farm household may continue to work the land
until the close of the agricultural year. The expiration of the period of the contract as fixed by the parties, and the sale or alienation
of the land do not of themselves extinguish the relationship. In the latter case, the purchaser or transferee shall assume the rights
and obligations of the former landholder in relation to the tenant. In case of death of the landholder, his heir or heirs shall likewise
assume his rights and obligations.

Section 10. Contracts; Nature and Continuity of Conditions . - The terms and conditions of tenancy contracts, as stipulated
by the parties or as provided by law, shall be understood to continue until modified by the parties. Modifications of the terms and
conditions of contracts shall not prejudice the right of the tenant to the security of his tenure on the land as determined in Section
six, seven, and forty-nine.

Section 11. Freedom to Contract in General. - The landholder and the tenant shall be free to enter into any or all kinds of
tenancy contract, as long as they are not contrary to law, morals or public policy. Except in case of fraud, error, force, intimidation
or undue influence, when such contract is reduced to writing and registered as hereinafter provided, the latter shall be conclusive
evidence of what has been agreed upon between the contracting parties, if not denounced or impugned within thirty days after its
registration.
Said contract shall be contrary to law, morals and public policy;

A. In Share Tenancy

(a) If the tenant is to receive less than the corresponding share for the different contributions be made to the production of the farm
as hereinafter provided.

(b) If it is stipulated that the tenant or any member or his immediate farm household shall without compensation perform any work
or render any service not connected with the tenant's duties and obligations provided under this Act.

B. In Leasehold Tenancy

(a) If the tenant-lessee is to pay to the landholder, lessor, as a consideration for the use of the land, an amount in excess of that
hereinafter provided for the kind and class of land involved.

(b) If the tenant-lessee is to pay the landholder-lessor a consideration in excess of the amount prescribed as fair rental value, as
determined pursuant to the provisions of this Act, for the use of work animals, services and/or farm implements belonging to the
landholder-lessor, in case it is agreed between the parties that the latter shall furnish any or all of these items of production.

(c) If it is stipulated that, as a condition precedent to the commencement or continuance of the lease, the tenant-lessee shall rent
work animals, services or farm implements, or shall make use of any store or services operated by the landholder-lessor or any
other person, or that the landholder-lessor may impose fines, deductions and/or assessments, or that the tenant-lessee shall,
without compensation, perform any work or render any service not connected with the tenant's duties and obligations provided
under this Act.

Section 12. Form and Registration of Contract . - A contract of tenancy in writing, in order to be conclusive as evidence, shall
be drawn in quadruplicate in the language or dialect known to all the parties thereto and signed or thumb-marked both by the
landholder or his authorized representative, and the tenant himself, before two witnesses, one to be chosen by each party. If any of
the parties does not know to read, one of the witnesses, to be chosen by him, shall read the contents of the document to him. Each
of the contracting parties shall retain a copy of the contract and the third and fourth copies shall be delivered to the municipal
treasurer of the municipality where the land which is the subject-matter of the contract is located, who shall file and register the
third copy in his office and forward the fourth copy to the court: Provided, That in order that a tenancy contract may be registered,
it shall be the duty of the municipal treasurer and tenant, respectively, and to place an annotation on each copy of the fact of
registration in his office, stating the date, time and place of registration as well as the entry or registration number.

The form of contract shall be uniform and shall be prepared and furnished by the court. The contracting parties shall acknowledge
the execution of the contracting before the municipal treasurer or justice of the peace or the mayor of the municipality where the
land is situated. No fees or stamps of any kind shall be paid or required.

When one of the parties is unable to read, in case of doubt the burden of proof to show that he understood the terms of the
contract shall rest upon the other party who is able to read.

Section 13. Registry of Tenancy Contracts . - For the purposes of this Act, the municipal treasurer of the municipality wherein
the land which is the subject-matter of a tenancy contract is situated shall keep a record of all such contracts entered into within his
jurisdiction, to be known as "Registry of Tenancy Contracts." He shall keep this registry together with a copy of each contract
entered therein, and make annotations on said registry of all subsequent acts relative to each contract, such as its renewal,
novation, cancellation, etc.: Provided, That the municipal treasurer shall not charge any fee for the registration of said contracts or
of any subsequent acts relative thereto, none of which shall be subject to the documentary stamp tax.

Section 14. Change of System. - The tenant shall have the right to change the tenancy contract from one of share tenancy to
the leasehold tenancy and vice versa and from one crop-sharing arrangement to another of the share tenancy. If the share tenancy
contract is in writing and is duly registered, the right may be exercised at the expiration of the period of the contract. In the absence
of any written contract, the right may be exercised at the end of the agricultural year. In both cases the changed to the leasehold
system shall be effective one agricultural year after the tenant has served notice of his intention to change upon the landholder.

Section 15. Interest on Loans or Advances. - On all loans or advances obtained by the tenant from the landholder in
connection with the cultivation, planting, harvesting and other incidental expenses for the improvement of the crop planted, as well
as loans or advances for the subsistence of the tenant and his family, the interest which may be stipulated shall not exceed eight per
centum per calendar year: Provided, That on all loans or advances other than money, such as grain or other agricultural products,
made computed on the basis of the current price of the produce at the time it was loaned. Violation of the provisions of this section
shall be punished in accordance with the Usury Law.

Section 16. Memorandum of Loans or Advances . - Any obligation referring to any amount either in money or in kind, including
the payment of interest, which the tenant may have received from time to time as loan or advance from the landholder, shall be
void unless the same, or some note or memorandum thereof, be in writing in a language or dialect known to the party charged, and
subscribed by said party, or by his authorized agent.
Section 17. Form of Final Accounting. - The final accounting between landholder and tenant at the end of each agricultural year
shall be effected within ten days after the threshing in case of rice and within the same period of time after the harvest or gathering
of the fruits in the case of crops. In case of crops which have to be said in processed form, the final accounting shall be within five
days after the sale is consummated and the sales receipt shall be exhibited to the tenant.

The accounting shall be made to appear in a not or memorandum written in a language or dialect known to the tenant and signed
by both parties in the presence of two witnesses who shall be selected by each party. Each of the contracting parties shall be
furnished with a copy of said note or memorandum and such final accounting, once duly signed by both parties and two witnesses,
shall be deemed conclusive evidence of its contents, except in case of fraud, error, force, intimidation or undue influence. When one
of the parties is unable to read, the burden of proof, in case of doubt, to show that he understood the accounting, shall rest upon
the other party who is able to read.

In the absence of a written accounting in accordance with the preceding paragraph, the tenant may, within three years from the
date of the threshing of the crop in question, petition the Court to compel the landholder to render an accounting of the same in
accordance with this section.

Section 18. Settlement of Debts. - Once the accounting is made, any amount of money which the landholder may have
advanced to the tenant for expenses of cultivation, harvesting or gathering of the crop or for his own private use, as well as any
amount of grain or agricultural products advanced for his subsistence and that of his family, shall be paid by the tenant out of his
share either in grain or in money, at the option of the latter; Provided, That such grain or agricultural products shall be appraised in
money according to their current market value at the place where the land is located at the time of their delivery to the tenant:
Provided, further, That in case his share is not sufficient, his outstanding debt shall be reduced to money and shall bear an interest
of not more than ten per cent per annum: And provided, finally, That the remaining debts of the tenant once converted into money
shall not again be converted into kind. Said outstanding debt money may, however, be paid in money or in agricultural products
appraised at the local current market price at the time of payment.

Section 19. Exemption from Lien and/or Attachment. - Twenty-five per centum of the tenant's share of the produce of the
land in share tenancy, or of the entire produce in leasehold tenancy, one work animal and one of each kind of farm implement
belonging to the tenant, provided that the value of such work animal and implements do not exceed five hundred pesos, shall be
exempt from lien and attachment.

Section 20. Use of Official Weights and Measures . - In all transactions entered into between the landholder and the tenant
concerning agricultural products the official weights and measures of the Government shall be used.

Section 21. Ejectment: Violation; Jurisdiction . - All cases involving the dispossession of a tenant by the landholder or by a
third party and/or the settlement and disposition of disputes arising from the relationship of landholder and tenant, as well as the
violation of any of the provisions of this Act, shall be under the original and exclusive jurisdiction of such court as may now or
hereafter be authorized by law to take cognizance of tenancy relations and disputes

PART II

THE SHARE SYSTEM

CHAPTER I - Common Provisions

SECTION 22. Rights of the Tenant. -

(1) The tenant shall be free to work elsewhere whenever the nature of his farm obligation warrants his temporary absence from his
holdings.

(2) The tenant shall, aside from his labor, have the right to provide any of the contributions for production whenever he can do so
adequately and on time.

(3) The tenant's dwelling shall not, without his consent, be removed from the lot assigned to him by the landholder, unless there is
a severance of the tenancy relationship between them as provided under Section nine, or unless the tenant is ejected for cause, and
only after the expiration of forty-five days following such severance of relationship or dismissal for cause.

If the tenant is dismissed without just cause and he is constrained to work elsewhere, he may choose either to remove his dwelling
at the landholder's cost or demand the value of the same from the landholder at the time of the unjust dismissal.

(4) The tenant shall have the right to be indemnified for his labor and expenses in the cultivation, planting, or harvesting and other
incidental expenses for the improvement of the crop raised in case he is dispossessed of his holdings, whether such dismissal is for a
just cause and not, provided the crop still exists at the time of the dispossession.

Section 23. Obligations for the tenant. - It shall be the obligation of the tenant:
(1) To cultivate and take care of the farm, the growing crop and other improvements entrusted to him as a good father of a family,
by doing all the work necessary in accordance with proven farming practices.

(2) To inform the landholder at once of any trespass committed by a third person upon the farm.

(3) To take reasonable care of the work animals and farm implements used in the point undertaking. He shall not use the work
animals and farm implements entrusted to him by the landholder for purposes other than those intended, or allowed their use by
other persons without the knowledge and consent of the landholder.

The tenant shall not abandon or surrender his holdings and leave the farm and growing crop and other improvements unattended
during the watch season, except for just and reasonable cause. In case of such unjustified abandonment or surrender, any or all of
his expected share in the crop may, in the discretion of the court, be forfeited in favor of the landholder to the extent of the damage
caused thereby.

Any of the following shall be considered just and reasonable cause for the tenant to terminate the tenancy relationship;

(a) Cruel, inhuman or offensive treatment on the part of the landholder of his representative toward the tenant or any member of
his immediate farm household.

(b) Non-compliance on the part of the landholder with any of the obligations imposed upon him by the provisions of this Act or by
the contract.

(c) If the landholder or his representative compels the tenant or any member of his immediate farm household to do any work or
render any service not in any way connected with his farm work, or even without compulsion if no compensation is paid.

(d) Commission of a crime by the landholder or his representative against the tenant or any member of his immediate farm
household.

Section 24. Prohibitions to Tenant: -

(1) It shall be unlawful for the tenant, whenever the area of his holdings is five hectares or more, or is sufficient size to make him
and the members of his immediate farm household fully occupied in its cultivation, to contract to work at the same time on two or
more separate holdings belonging to different landholders under any system of tenancy, without the knowledge and consent of the
land-holder with whom he first entered into tenancy relationship.

(2) It shall be unlawful for a share-tenant to employ a sub-tenant to furnish labor or any phase of the work required of him under
this Act, except in cases of illness or any temporary incapacity on his part, in which eventuality the tenant or any member of his
immediate farm household is under obligation to report such illness or incapacity to the landholder. Payment to the sub-tenant, in
whatever form, for services rendered on the land under this circumstance, shall be for the account of the tenant.

(3) Subject to provisions of the next preceding paragraph, land entrusted for cultivation to a leasehold tenant shall not be sub-let
nor shall the lease be assigned by the tenant to another person, except with the written consent of the lessor.

Section 25. Rights of the Landholder: -

(1) The landholder shall have the right to choose the kind of crop and the seeds with the tenant shall plant in his holdings: Provided,
however, That if the tenant should subject, the court shall settle the conflict, according to the best interest of both parties.

(2) The landholder shall have the right to require the use of fertilizer of the kind or kinds shown by proven farm practices to be
adapted to the requirements of the land.

(3) The landholder shall have the right to inspect and observe the extent of compliance on the part of the tenant with the terms and
conditions of their contract and the provisions of this Act.

(4) In cases where the crop has to be sold in processed form before division and the tenant has no representative, the landholder,
shall have the right to deal with millers or processors in representation of the tenant.

Section 26. Obligations of the Landholder :

(a) The landholder shall furnish the tenant an area of not less than one thousand square meters where the latter may construct his
dwelling, raise vegetables, poultry, pigs, and other animals and engage in minor industries, the products of which shall accrue to the
tenant exclusively.

(b) The landholder shall keep the tenant in the peaceful possession and cultivation of his landholdings which are the subject matter
of the contract.
Section 27. Prohibitions to the Landholder :

(1) The landholder shall not dispossess the tenant of his holdings except for any of the causes enumerated in Section fifty, and
without the cause having been proved before, and the dispossession authorized by, the court; otherwise, he shall, aside from the
penalty of fine and/or imprisonment provided for any violation of this Act, be liable to the tenant for damages to the extent of the
landholder's right under Section twenty-two of this Act.

(2) The landholder shall be responsible for the payment of taxes levied by the Government upon the land which is the subject-
matter of the contract and it shall be unlawful to make the tenant bear in part of all of the same, either directly or indirectly.

(3) The landholder shall not require the tenant to bear, directly or indirectly, any part of the rent, "canon" or other consideration
which he, the former, may be under obligation to pay to a third person for the use of the land.

Section 28. Expenses for Seeds; Fertilizer; Pest and Weed Control Expenses.

(1) The same amount of seeds or seedlings used in the production of any crop shall be deducted from the gross harvest and
returned to the party who furnished the same.

(2) The cost of fertilizer and expenses for pest and weed control as evidenced by sales invoices shall be paid out of the gross
harvest and returned to the party who advanced the cost and expenses.

Section 29. Irrigation System. - The cost of the construction of an irrigation system, including the distributory canals, shall be
borne exclusively by the landholder. The cost of maintenance and operation of the system shall, however, be borne by the
landholder and the tenant in proportion to their respective shares in the harvest.

Section 30. Auxiliary Crop. - In case the land is planted to an auxiliary crop, the tenant shall receive eighty per centum and the
landholder twenty per centum of the net produce, provided all expenses of production are borne by the tenant.

Auxiliary crops shall, not, however, be construed to include the crops or products raised from the garden, poultry and other
industries carried on the lot specifically provided for the tenant under Section 26(a) hereof.

Section 31. Cost of Fertilizer, etc.; when to be Advanced by the landholder . - Whenever the use of fertilizer or the
application of insect, disease and rodent control measures is directed by the landholder, he shall advance their cost, which shall be
deducted from the gross produce.

CHAPTER II - Rice Share Tenancy

SECTION 32. Share Basis. - The parties shall, on ricelands which produces a normal average of more than forty cavanes per
hectare for the three agricultural years next preceding the current harvest, receive as shares in the gross produce, after setting
aside the same amount of palay used as seed, and after deducting the cost of fertilizer, pest and weed control, reaping and
threshing, the amount corresponding to the total equivalent of their individual contributions, computed as follows;

Contribution Participation
1. Land 30%
2. Labor 30%
3. Farm implements 5%
4. Work Animals 5%
Final harrowing of the field immediately before
5. transplanting 5%
6. Transplanting 25%

Section 33. Share basis on Second Class Land. - On ricelands, which produce a normal average of forty cavans or less per
hectare for the three agricultural years next preceding the current harvest, the participation for the contribution of the land shall be
twenty-five per centum and that of labor, thirty-five per centum.

Section 34. Reimbursement Not Allowed. - Contributions or shares in the contribution to the production of the crop in the form
of cash, grain or services, once shouldered or rendered alone by one party may not be reimbursed by the other party after the
phase or phases of work required in the joint undertaking shall have been completed.

Section 35. Sharing of Expenses. - In case the landholder and the tenant agree to share equally in the expenses of final
harrowing of field and transplanting, the latter may engage the services of persons or helpers to perform these phases of farm work,
provided the rates for each shall have been previously determined and agreed upon between the landholder and the tenant. In case
of disagreement upon said rates, the party who undertakes to the corresponding share in the harvest, after deducting the expenses
of reaping.

Section 36. Further Rights of the Tenant. - In addition to the provision of Section twenty-two, the tenant shall have the right
to:

1. Determine when to scatter the seeds, to transplant the seedlings, and to reap the harvest, provided they shall be in accordance
with proven farm practices and after due notice to the landholder.

2. Choose the thresher which shall thresh the harvest whenever it is the best available in the locality and the best suited to the
landholder's and tenant's needs and provided the rate charged is equal to or lower than the rate charged by the owner of other
threshers under similar circumstances: Provided, further, That in cases where there are more than tenant the selection of the
majority of the tenants shall prevail: Provided, finally, That if the landholder is the owner of a thresher and is ready and willing to
grant equal or lower rates under the same conditions, the use of the landholder's thresher shall be given preference.

3. Apply appropriate pest, insect, disease and rodent control measures whenever in his judgment such action is necessary: Provided,
however, That if a tenant fails to apply any of the above control measures after the landholder has made a request in writing for
such action, he shall be liable for any loss resulting from such failure.

4. Apply fertilizer of the kind or kinds shown by proven farm practices to be adapted to the requirements of the land, provided the
landholder has not exercised his right under Section twenty-five to require the use of such fertilizer.

Section 37. Further Rights of the Landholder . - In addition to the provisions of Section twenty-five, the landholder, by himself
or through his representative, may determined:

1. The proper height of pilapils or dikes according to the local practices.

2. The location and size of irrigation canals.

3. The site for the stacking of the harvest, provided it shall not be farther than one kilometer from the center of the area cultivated
by a majority of the tenants.

4. The date of threshing.

Provided, however, That in case of disagreement by the tenant in any of the foregoing instances, the court shall determine whatever
may be in the interest or both parties.

Section 38. Labor; What It Constitutes . - The tenant shall perform the following as the labor contributed by him under Section
thirty-two;

1. The preparation of the seedbed which shall include plowing, harrowing, and watering of the seedbed, the scattering of the seeds,
and the care of the seedlings.

2. The plowing, harrowing, and watering of the area he is cultivating, except final harrowing of the field as an item of contribution
specified in Section thirty-two of this Act.

3. The maintenance, repair and weeding of dikes, paddies, and irrigation canals in his holdings.

4. The pulling and bundling of the seedlings preparatory to their transplanting.

5. Care of the growing plants.

6. Gathering and bundling of the reaped harvest.

7. The piling of the bundles into small stacks.

8. The preparation of the place where the harvest is to be stacked.

9. Gathering of the small stacks and their transportation to the place where they are to be stacked.

10. Piling into a big stack preparatory to threshing.

Section 39. Prohibition on Pre-Threshing. - It shall be unlawful for either the tenant or the landholder, without mutual consent,
to reap or thresh a portion of the crop at any time previous to the date set for its threshing. Any violation by either party shall be
treated and penalized in accordance with this Act and/or under the general provisions of law applicable to the act committed.

Section 40. Place of Crop Division . - The division of the crop shall be made in the same place where the harvest has been
threshed and each party shall transport his share to his warehouse or barn, unless the contrary is stipulated by the parties.

CHAPTER III - Share Tenancy on Crops other than Rice

SECTION 41. Basis of Shares in Crops other than Rice. - The landholder and the tenant on lands which produce crops either
than rice shall be free to enter into any contract stipulating the ratio of crop division. In the absence of a stipulation, the customs of
the place shall govern: Provided, That whether the basis of division of the crop is the contract between the parties or the customs of
the place, the share of the tenant for his labor in the production shall not less than thirty per cent of the harvest or produce, after
deducting the expenses for harvesting and/or initial processing: Provided, further, That in cases where the share of the tenant is,
according to local practices or customs prevailing at the time of the approval of this Act, more than the minimum herein set, the
tenant's share thus established by local practices or customs shall prevail and be considered the minimum.

PART III

THE LEASEHOLD TENANCY

SECTION 42. Landholder-Lessor and Tenant-Lessee, Defined. Any person, natural or juridical, either as owner, lessee,
usufructuary or legal possessor or agricultural land, who lets, leases or rents to another said property for purposes of agricultural
production and for a price certain or ascertainable either in an amount of money or produce, shall be known as the landholder-
lessor; and any person who, with the consent of the former, tills, cultivates or operates said land, susceptible of cultivation by one
individual, personally or with the aid of labor available from among his own immediate farm household, is a tenant-lessee.

Section 43. Rights and Obligations of Tenant-Lessee. - With the creation of the tenancy relationship arising out of the
contract between the landholder-lessor and tenant-lessee, the latter shall have the right to enter the premises of the land, and to
the adequate and peaceful enjoyment thereof. He shall have the right to work the land according to his best judgment, provided this
manner and method of cultivation and harvest are in accordance with proven farm practices. Upon termination of the relationship,
he shall be entitled to one half of the value of the improvements made by him, provided they are reasonable and adequate to the
purposes of the lease.

The tenant-lessee shall pay the consideration stipulated in the lease contract provided it shall not exceed the limit fixed in Section
forty-six. In the absence of stipulation, the consideration shall be that established in said Section forty-six. He shall make proper use
of the land and the improvements thereon and shall be under obligation to cultivate it as a good father of a family, by doing all the
work considered reasonable and necessary in accordance with proven farm practices. He is likewise obliged to take reasonable care
of the work animals and farm implements that may be delivered to him by the land-holder, in case it is agreed between the parties
that the landholder-lessor shall furnish any or all of them.

Section 44. Rights of Landholder-lessor. - The landholder-lessor or his duly authorized representatives shall have the right to
inspect the premises of the land which is the subject of the lease for the purpose of ascertaining the tenant's compliance with the
provisions of the contract and of this Act, but in no case shall he exercise any coercion, intimidation or violence in word or deed.

Section 45. Manner of Rental Payment . - Payment of the consideration for the use of land may be made either in an amount
certain or ascertainable in money or in produce, or both.

Section 46. Consideration for the Use of Land. -

(a) The consideration for the use of ricelands, shall not be more than thirty per centum of the gross produce for first class lands and
not more than twenty-five per centum for second class lands. Classification of ricelands shall be determined by productivity: first
class lands being those which yield more than forty cavanes per hectare and second class lands being those which yield forty
cavanes or less, the same to be computed upon the normal average harvest of the three preceding years.

(b) The consideration for agricultural land where exist fruit trees and other useful trees and plants, from which the whole or any
portion of the produce of the said land is taken, shall not be more than what have been specified in the preceding section: Provided,
however, That additional considerations for the employment of said trees and useful plants, if the principal product is rice or other
crops, shall be decided and specified by negotiation between the landholder-lessor and the tenant-lessee; Provided, further, That
where the tenant-lessee, during the period of the lease and/or in consideration thereof, plants and/or takes care of said trees and
plants, with the consent of the landholder-lessor, the tenant-lessee shall be compensated by the latter in the manner agreed
between them.

(c) The consideration for the use of sugar lands, fishponds, saltbeds and of lands devoted to the raising of livestock shall be
governed by stipulation between the parties.
Section 47. Rental of Work Animals, etc., and Applicability of Schedules . - Upon agreement of the parties, the tenant-
lessee may make use of such work animals, farm implements or services belonging to the landholder-lessor as are available for hire,
the consideration of which shall be based on their fair rental value.

The rates on the fair rental value for the use of work animals, farm implements and services, belonging to the landholder-lessor shall
be those provided in Schedules "A", "B", and "C", which shall apply upon approval of this Act and shall remain in force, unless the
Secretary of Agricultural and Natural Resources revises the same in accordance with Section fifty-two.

Section 48. Loans and Interests . - Loans, either in money or in kind, obtained by a tenant-lessee from the landholder lessor
shall be payable at the time stipulated: Provided, however, That this shall not be construed as prejudicing the right of the borrower
to repay his obligation before the date of maturity. The loan, unless it is otherwise stipulated, shall be payable in money at not more
than eight per cent interest per annum, computed from the date of the indebtedness was contracted up to and including the date of
payment. A note or memorandum to evidence such indebtedness shall be executed in accordance with the provisions of Section
sixteen.

PART IV

SECURITY OF TENURE

SECTION 49. Ejectment of Tenant. - Notwithstanding any agreement or provision of law as to the period, in all cases where land
devoted to any agricultural purpose is held under any system of tenancy, the tenant shall not be dispossessed of his holdings except
for any of the causes hereinafter enumerated and only after the same has been proved before, and the dispossession is authorized
by, the court.

Section 50. Causes for the Dispossession of a Tenant . - Any of the following shall be a sufficient cause for the dispossession
of a tenant from his holdings:

(a) The bona fide intention of the landholder to cultivate the land himself personally or through the employment of farm machinery
and implements: Provided, however, That should the landholder not cultivate the land himself or should fail to employ mechanical
farm implements for a period of one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and
the land and damages for any loss incurred by him because of said dispossession: Provided, further, That the land-holder shall, at
least one year but not more than two years prior to the date of his petition to dispossess the tenant under this subsection, file notice
with the court and shall inform the tenant in wiring in a language or dialect known to the latter of his intention to cultivate the land
himself, either personally or through the employment of mechanical implements, together with a certification of the Secretary of
Agriculture and Natural Resources that the land is suited for mechanization: Provided, further, That the dispossessed tenant and the
members of his immediate household shall be preferred in the employment of necessary laborers under the new set-up.

(b) When the current tenant violates or fails to comply with any of the terms and conditions of the contract or any of the provisions
of this Act: Provided, however, That this subsection shall not apply when the tenant has substantially complied with the contract or
with the provisions of this Act.

(c) The tenant's failure to pay the agreed rental or to deliver the landholder's share: Provided, however, That this shall not apply
when the tenant's failure is caused by a fortuitous event or force majeure.

(d) When the tenant uses the land for a purpose other than that specified by agreement of the parties.

(e) When a share-tenant fails to follow those proven farm practices which will contribute towards the proper care of the land and
increased agricultural production.

(f) When the tenant through negligence permits serious injury to the land which will impair its productive capacity.

(g) 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 51. Burden of Proof. - The burden of proof to show the existence of a lawful cause for the ejectment of a tenant shall
rest upon the landholder.

PART V

SPECIAL PROVISIONS

SECTION 52. Duties of the Secretary of Agriculture and Natural Resources . - It shall be the duty of the Secretary of
Agriculture and Natural Resources to:

1. Conduct such educational programs as circumstances may require adequately to acquaint tenants and landholders with their
rights and responsibilities under this Act.
2. Revise the rental rates provided for in Schedules "A", and "B", whenever such revision is made necessary by changes in values
and prices, so that the rental rates shall conform to the standard of fair rental value as defined in Section 5(m).

3. Facilities the preparation and registration of land- holder-tenant contracts through the distribution of appropriate printed forms
and instructions to guide the interested parties in drafting and executing rental agreements. The forms of contracts must bear the
approval of the court.

4. Conduct surveys and researches to determine the extent of compliance, adaptability to different crops and areas and the fairness
of this Act to all parties affected by its implementation.

5. Submit an annual report to the President containing an analysis showing the progress made toward attaining the objectives
enumerated in Section two of this Act and recommendations concerning methods of improving the implementation and general
effectiveness of this Act. Copies of this report shall be provided to members of the Congress.

Section 53. Duties of Secretary of Justice . - The Secretary of Justice, through the Executive Judge of the Court, shall be
responsible for formulating a national enforcement program, among other things, through the assignment of judges and personnel,
which will insure the full enforcement of the provisions of this Act.

Section 54. Representation by Counsel. - In all cases wherein a tenant cannot afford to the represented by counsel, it shall be
the duty of the Public Defender of the Department of Labor to represent him, upon proper notification by the party concerned, or
the court of competent jurisdiction shall assign or appoint counsel de oficio for the indigent tenant.

Section 55. Applicability of General Laws. - The provisions of existing laws which are not inconsistent herewith shall apply to
the contracts governed by this Act as well as to acts or omissions by either party against each other during, and in connection with,
their relationship.

Section 56. Doubts to Be Solved in Favor of the Tenant . - In the interpretation and enforcement of this Act and other laws as
well as of the stipulations between the landholder and the tenant, the courts and administrative officials shall solve all grave doubts
in favor of the tenant.

Section 57. Penal Provision. - Violation of any of the provisions of this Act shall be punished with a fine not exceeding two
thousand pesos or imprisonment not exceeding one year, or both in the discretion of the Court.

Section 58. Separability of Provisions . - If for any reason, any section or provision of this Act shall be questioned in any court,
and shall be held to be unconstitutional or invalid, no other section or provision of this Act shall be effected thereby.

Section 59. Repealing Provisions. - Public Act Numbered Four thousand fifty-four, as amended by Republic Act Numbered
Thirty-four, Commonwealth Act Numbered Fifty-three, Commonwealth Act Numbered Four hundred sixty-one as amended by
Republic Act Numbered Forty- four, and all laws, rules and regulations inconsistent herewith are hereby repealed.

Section 60. Effective Date. - This Act shall take effect upon its approval.

Approved: August 30, 1954

SCHEDULE "A"

The rental value of work animals and farm implements other than machinery, shall not exceed the allowable depreciation charges
plus six per cent (6%) interest per annum computed on the market value of the said work animals and farm implements not fixed in
this Schedule shall be those prevailing in the locality where the said animals and implements are rented.

Item Market Period of Allowable Allowable Fair Rental

Value depreciation depreciation in interest at value per
years charge 6 per annum
cent
Carabao P300.00 10 P30.00 P18.00 P48.00
Bullock 600.00 7 85.91 36.00 121.00
Horse, native 150.00 8 18.75 9.00 27.75
Cattle 200.00 7 28.57 12.00 40.57
Plow, iron 40.00 5 8.00 2.40 10.40
Plow wooden 25.00 2 12.50 1.50 14.00
Harrow iron 18.00 5 3.60 1.00 4.68
Carreton (native 400.00 10 40.00 24.00 64.00
cart)

SCHEDULE "B"

The rental value for farm machineries inclusive of tractors, tractor equipment, engines, motors, and pumps shall not exceed the
allowable depreciation equal to one-tenth (1/10) of the current market value plus interest at six per cent (6% per annum.

SCHEDULE "C"

The amounts to be charged by the landholder when he performs services in the operation of the farm enterprise shall not current
the rates in the locality where such services are rendered.

Approved: August 30, 1954

G.R. No. L-62626 Case Digest
G.R. No. L-62626, July 18, 1984
Spouses Cayetano and Patricia Tiongson, etc.
vs CA and Teodoro Macaya
Ponente: Gutierrez

Facts:
1946, Severino Manotok donated and transferred to his 8 children and 2 grandchildren a 34 hectare land
in Quezon City. Severino Manotok was appointed judicial guardian of his minor children. There was no
tenant occupying the property at the time of the donation.

Later, Teodoro Macaya accompanied Vicente Herrera, the overseer of the property, went to the Manotok
and pleaded that he be allowed to live in the property to prevent theft and to guard the property.
Manotok allowed Macaya but imposed the condition that any time the owners needed to take the
property, Macaya and his family must vacate, and that he could raise animals and plant according to his
needs, and that the owners have no responsibility to Macaya and he will use only 3 hectares. These
conditions were not put in writing.

In 1950, the property owners organized themselves as a corporation and transferred the 34 hectare land
a capital contribution to the capital stock of the corporation. Later, when the owners demanded for
payment of taxes, Macaya agreed to help pay the taxes by remitting 10 cavans of palay every year as his
contribution. Later, owners requested Macaya to increase his contribution to 20 cavans, Macaya agreed.
Later, Macaya pleaded that he will contribute 10 cavans only, the owners said the "he might as well not
deliver anymore". Macaya did not deliver palays from then on.

1974, the owners executed a Unilateral Deed of Conveyance of the property to Patricia Tiongson, etc.
Macaya was informed that the land is needed for house construction of the owners and was asked to
vacate, Macaya pleaded that he may be allowed to harvest first before vacating. However, after harvest,
Macaya did not vacate and even expand his cultivation to 6 hectares without the consent of the owners.

Issue: Whether there is tenancy relationship between the parties.

Ruling:
Real estate taxes of the property declare the land as residential. The physical view of the property also
shows that the land was a rolling forestal land without any flat portion except the one tilled by Macaya.

As to the sharing, 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. 

As to consent, 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.

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.
 G.R. No. 78742 – G.R. No. 79777 – 175 SCRA 343 – Political Law – Constitutional Law – Bill of
Rights – Equal Protection – Valid Classification
Eminent Domain – Just Compensation

These are four consolidated cases questioning the constitutionality of the Comprehensive
Agrarian Reform Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or R.A. No.
3844).

Brief background: Article XIII of the Constitution on Social Justice and Human Rights includes a
call for the adoption by the State of an agrarian reform program. The State shall, by law,
undertake an agrarian reform program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. RA 3844 was enacted in 1963.
P.D. No. 27 was promulgated in 1972 to provide for the compulsory acquisition of private lands
for distribution among tenant-farmers and to specify maximum retention limits for landowners.
In 1987, President Corazon Aquino issued E.O. No. 228, declaring full land ownership in favor of
the beneficiaries of PD 27 and providing for the valuation of still unvalued lands covered by the
decree as well as the manner of their payment. In 1987, P.P. No. 131, instituting a
comprehensive agrarian reform program (CARP) was enacted; later, E.O. No. 229, providing the
mechanics for its (PP131’s) implementation, was also enacted. Afterwhich is the enactment of
R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This law, while considerably
changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar
as they are not inconsistent with its provisions.

[Two of the four consolidated cases are discussed below]

G.R. No. 78742: (Association of Small Landowners vs Secretary)

The Association of Small Landowners in the Philippines, Inc. sought exception from the land
distribution scheme provided for in R.A. 6657. The Association is comprised of landowners of
ricelands and cornlands whose landholdings do not exceed 7 hectares. They invoke that since
their landholdings are less than 7 hectares, they should not be forced to distribute their land to
their tenants under R.A. 6657 for they themselves have shown willingness to till their own land.
In short, they want to be exempted from agrarian reform program because they claim to belong
to a different class.

G.R. No. 79777: (Manaay vs Juico)

Nicolas Manaay questioned the validity of the agrarian reform laws (PD 27, EO 228, and 229) on
the ground that these laws already valuated their lands for the agrarian reform program and
that the specific amount must be determined by the Department of Agrarian Reform (DAR).
Manaay averred that this violated the principle in eminent domain which provides that only
courts can determine just compensation. This, for Manaay, also violated due process for under
the constitution, no property shall be taken for public use without just compensation.

Manaay also questioned the provision which states that landowners may be paid for their land
in bonds and not necessarily in cash. Manaay averred that just compensation has always been
in the form of money and not in bonds.

ISSUE:
1. Whether or not there was a violation of the equal protection clause.

2. Whether or not there is a violation of due process.

3. Whether or not just compensation, under the agrarian reform program, must be in terms of
cash.

HELD:

1. No. The Association had not shown any proof that they belong to a different class exempt
from the agrarian reform program. Under the law, classification has been defined as the
grouping of persons or things similar to each other in certain particulars and different from
each other in these same particulars. To be valid, it must conform to the following
requirements:

(1) it must be based on substantial distinctions;

(2) it must be germane to the purposes of the law;

(3) it must not be limited to existing conditions only; and

(4) it must apply equally to all the members of the class.

Equal protection simply means that all persons or things similarly situated must be treated alike
both as to the rights conferred and the liabilities imposed. The Association have not shown that
they belong to a different class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the burden of
implementing land reform must be rejected. There is a substantial distinction between these
two classes of owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect by the courts of justice
except only where its discretion is abused to the detriment of the Bill of Rights. In the contrary,
it appears that Congress is right in classifying small landowners as part of the agrarian reform
program.

2. No. It is true that the determination of just compensation is a power lodged in the courts.
However, there is no law which prohibits administrative bodies like the DAR from determining
just compensation. In fact, just compensation can be that amount agreed upon by the
landowner and the government – even without judicial intervention so long as both parties
agree. The DAR can determine just compensation through appraisers and if the landowner
agrees, then judicial intervention is not needed. What is contemplated by law however is that,
the just compensation determined by an administrative body is merely preliminary. If the
landowner does not agree with the finding of just compensation by an administrative body,
then it can go to court and the determination of the latter shall be the final determination. This
is even so provided by RA 6657:

Section 16 (f): Any party who disagrees with the decision may bring
the matter to the court of proper jurisdiction for final determination
of just compensation.
3. No. Money as [sole] payment for just compensation is merely a concept in traditional exercise
of eminent domain. The agrarian reform program is a revolutionary exercise of eminent
domain. The program will require billions of pesos in funds if all compensation have to be made
in cash – if everything is in cash, then the government will not have sufficient money hence,
bonds, and other securities, i.e., shares of stocks, may be used for just compensation.
Stanfilco Employees v DOLE G.R. NO. 154048 | November 27, 2009 | BRION, J.
Keywords:

FACTS:
● SEARBEMCO, as seller, and respondent DOLE Philippines, Inc. (Stanfilco Division)
(DOLE), as buyer, entered into a Banana Production and Purchase Agreement4 (BPPA).
The BPPA provided that SEARBEMCO shall sell exclusively to DOLE, and the latter shall
buy from the former, all Cavendish bananas of required specifications to be planted on
the land owned by SEARBEMCO.

● Part of paragraph 5(p), Article V of the BPPA states that: “In the case of any such
rejected bananas, the SELLER shall have the right to sell such rejected bananas to third
parties, for domestic non-export consumption.”

● DOLE filed a complaint with the RTC against SEARBEMCO, spouses Abujos, and
Oribanex for specific performance and damages, with a prayer for the issuance of a writ
of preliminary injunction and of a temporary restraining order. DOLE alleged that
SEARBEMCO sold and delivered to Oribanex, through the spouses Abujos, the bananas
rejected by DOLE, in violation of paragraph 5(p), Article V of the BPPA which limited the
sale of rejected bananas for "domestic non-export consumption." DOLE further alleged
that Oribanex is likewise an exporter of bananas and is its direct competitor.

● SEARBEMCO responded with a motion to dismiss on the grounds of lack of jurisdiction

over the subject matter of the claim, lack of cause of action, failure to submit to
arbitration which is a condition precedent to the filing of a complaint, and the
complaint's defective verification and certification of non-forum shopping.

● DOLE opposed SEARBEMCO's motion to dismiss alleging, among others, that: 1) the
dispute between the parties is not an agrarian dispute within the exclusive jurisdiction of
the DARAB under Republic Act No. 6657 2) the Arbitration Clause of the BPPA is not
applicable as, aside from SEARBEMCO, DOLE impleaded other parties (i.e., the spouses
Abujos and Oribanex who are not parties to the BPPA) as defendants.

● The RTC denied SEARBEMCO's motion to dismiss. The trial court stated that the case
does not involve an agrarian conflict and is a judicial matter that it can resolve.
SEARBEMCO moved for reconsideration of the RTC Order which was denied for lack of
merit.

● On appeal, the CA found that the RTC did not gravely abuse its discretion in denying
SEARBEMCO's motion to dismiss and motion for reconsideration.

● The CA ruled that the DAR has no jurisdiction, under said AO, over actions between
SEARBEMCO and DOLE for enforcement of the said Agreement when one commits a
breach thereof and for redress by way of specific performance and damages inclusive of
injunctive relief. It held that the case is not an agrarian dispute within the purview of
Section 3(d) of RA No. 6657, but is an action to compel SEARBEMCO to comply with its
obligations under the BPPA; it called for the application of the provisions of the Civil
Code, not RA No. 6657.
● SEARBEMCO moved for reconsideration of the decision, but the CA denied the motion
for lack of merit.

ISSUE: WON DOLE's complaint against SEARBEMCO falls within the jurisdiction of
DARAB.

RULING: NO. DOLE's complaint falls within the jurisdiction of the regular courts, not the
DARAB. Section 3(d) of RA No. 6657 is clear in defining an agrarian dispute: "any
controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship
or otherwise, over lands devoted to agriculture, including dispute concerning farm-
workers' associations or representations of persons in negotiating, fixing, maintaining,
changing or seeking to arrange terms or conditions of such tenurial arrangements. It
includes any controversy relating to compensation of lands acquired under this Act and
other terms and conditions of transfer of ownership from landowners to farmworkers,
tenants and other agrarian reform beneficiaries, whether the disputants stand in the
proximate relation of farm operator and beneficiary, landowner and tenant, or lessor
and lessee.

The Court have always held that tenancy relations cannot be presumed. The elements
of tenancy must first be proved by substantial evidence which can be shown through
records, documents, and written agreements between the parties. A principal factor,
too, to consider in determining whether a tenancy relationship exists is the intent of the
parties.

DOCTRINE: For DARAB to have jurisdiction over a case, there must exist a tenancy
relationship between the parties.
JOSE MENDOZA v. NARCISO GERMINO, GR No. 165676, 2010-11-22
Facts:
Petitioner and Aurora C. Mendoza[5] (plaintiffs) filed a complaint with the MTC... against respondent Narciso Germino
for forcible entry. The plaintiffs claimed that they were the registered owners of a five-hectare parcel of land in
Soledad, Sta. Rosa, Nueva Ecija
Sometime in 1988, respondent Narciso unlawfully entered the subject property by... means of strategy and stealth,
and without their knowledge or consent.  Despite the plaintiffs' repeated demands, respondent Narciso refused to
vacate the subject property.[7]... respondent Narciso filed his answer, claiming, among others, that his brother,
respondent Benigno Germino, was the plaintiffs' agricultural lessee and he merely helped the latter in the cultivation
as a member of the immediate farm household.
the MTC issued an order on October 27, 1995, remanding the case to the DARAB, Cabanatuan City for further
proceedings.
the plaintiffs[10] filed an amended complaint with the Provincial Agrarian Reform Adjudicator (PARAD), impleading
respondent Benigno as additional defendant.
The plaintiffs alleged that Efren Bernardo was the agricultural lessee of the subject property.
Respondent Benigno unlawfully entered the subject property in 1982 or 1983 through strategy and stealth, and
without their knowledge or consent. In 1987, they discovered that respondent Benigno had transferred possession of
the subject property to respondent Narciso, who refused to return the possession of the subject property to the
plaintiffs and appropriated the land's produce for himself. PARAD... found that the respondents were mere usurpers
of the subject property, noting that they failed to prove that respondent Benigno was the plaintiffs' bona fide
agricultural lessee.
the respondents filed a notice of appeal with the DARAB
The DARAB decided the appeal on July 22, 1998.  It held that it acquired jurisdiction because of the amended
complaint that sufficiently alleged an agrarian dispute, not the MTC's referral of the case. Thus, it affirmed the PARAD
decision.
The CA... found that the MTC erred in transferring the case to the DARAB since the material allegations of the
complaint and the relief sought show a case for forcible entry, not an agrarian dispute.
Issues:
whether the MTC or the DARAB has jurisdiction over the case.
Ruling:
Jurisdiction is determined by the allegations in the complaint
It is determined exclusively by the Constitution and the law. It cannot be conferred by the voluntary act or agreement
of the parties, or... acquired through or waived, enlarged or diminished by their act or omission, nor conferred by the
acquiescence of the court. Well to emphasize, it is neither for the court nor the parties to violate or disregard the rule,
this matter being legislative in character.
Under Batas Pambansa Blg. 129,[24] as amended by R.A. No. 7691,[25] the MTC shall have exclusive original
jurisdiction over cases of forcible entry and unlawful detainer.  The RRSP[26] governs the remedial... aspects of these
suits.[27]
Under Section 50[28] of R.A. No. 6657, as well as Section 34[29] of Executive Order No. 129-A,[30] the DARAB has
primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all...
agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program, and
other agrarian laws and their implementing rules and regulations.
Based on these allegations and reliefs prayed, it is clear that the action in the MTC was for forcible entry.
In the present case, instead of conducting a preliminary conference, the MTC immediately referred the case to the
DARAB. This was contrary to the rules.  Besides, Section 2[40] of P.D. No. 316, which required the referral of a land
dispute case to the
Department of Agrarian Reform for the preliminary determination of the existence of an agricultural tenancy
relationship, has indeed been repealed by Section 76[41] of R.A. No. 6657 in 1988.
Amended complaint did confer jurisdiction on the DARAB
G.R. No. 78214 Case Digest
G.R. No. 78214, December 5, 1988
Yolanda Caballes
vs Dept. Agrarian Reform, Hon. Heherson Alvarez and Bienvenido Abajon
Ponente: Sarmiento

Facts:
The landholding subject of the controversy is consists of 60 sqm was acquired by spouses Arturo and
Yolanda Caballes by virute of a Deed of Sale executed by Andrea Alicaba Millenes, this land is situated in
Lawaan Talisay, Cebu. Before the sale of the property to Caballes, Bienvenido Abajon constructed his
house on a protion of the land, paying monthly rental to Andrea Millenes. Abjon was likewise allowed to
plant thereon, and they have agreed that the produce thereon would be shred by them 50-50.

When the property was sold, Caballes told Abajon that they will put up a poultry on the land and they
intended to build it close to Abajon's house and they pursuaded Abajon to transfer his dwelling to the
opposite portion of the land. Abajon offered to pay renta; to the new owners, but they refuse and later
demanded for Abajon to vacate. Abajon refused to leave.

DAR concluded that Abajon was a tenant of the former owner, Andrea.

Issue: Whether Abajon is a tenant under the new owners.

Ruling:
Abajon is not a tenant for it only occupied a miniscule portion of the land which cannot be interpreted as
economic-family size farm under the definition of RA 3844.

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.

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 especially 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 south western side rather than a
tenant of the said portion.

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.
TALAVERA VS. LAXAMANA (G.R. NO. 77830, FEBRUARY 27, 1990)

FACTS: Jose Laxamana instituted an action for recovery of possession on July 10, 1984 against the petitioners
over a parcel of land. He had been in continuous possession of the said land until the petitioners took
possession of it and planted palay without private respondent’s knowledge. Laxamana suffered damages
amounting to P500.00, the price equivalent to sixty-five cavans of palay per agricultural year. Petitioners’ stated
that the taking of the private respondent’s possession was in accordance with their “Casunduan” executed on
March 30, 1973 and that he was not actually a tenant of the petitioners. The document states that private
respondent sold his rights and interests over the property for a consideration of P1, 000.00. The RTC ruled in
favour of the private respondent to which the petitioners appealed in the Court of Appeals. The Court of
Appeals affirmed the lower court’s decision that the Casunduan did not constitute valid surrender of the land
contemplated under the law.

ISSUE: Whether or not there was “valid surrender” contemplated by the law

HELD: No, the surrender did not constitute a valid surrender as contemplated by the law. The Decision of the
RTC and the CA is affirmed. Under the Code of Agrarian Reforms of the Philippines (R.A. No. 3844) Section 8,
agricultural leasehold shall only be extinguished based on the following grounds:
(a) abandonment of the landholding without the knowledge of the agricultural lessor;
(b) voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served
three months in advance; or
(c) absence of the person under Section nine to succeed to the lessee, in the event of death or permanent
incapacity of the lessee.

Voluntary surrender does not require any court authorization since it involves the tenant’s own volition
however, it must be shown that the surrender was voluntary through convincing and sufficiently proved
evidence. It cannot be presumed nor implied otherwise, the right of the tenant to security of tenure
becomes illusory one. It was shown that the Casunduan was prepared by petitioner and that Laxamana
needed money for his wife’s illness; he could hardly sign his own name; he continued working on the land until
1984 while the Talaveras claimed that they cultivated the land themselves. The circumstances showed that
Laxamana was forced to sign the Casunduan without fully understanding it and continued cultivating the land
after.

E. R. No. 77830 February 27, 1990 VICTOR TALAVERA and VISITACION AGUSTIN TALAVERA,
petitioners, vs. HON. COURT OF APPEALS and JOSE LAXAMANA, respondents. This is a petition for
review on certiorari. 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.

Facts: 1.The respondent, LAXAMANA , filed an action for recovery of possession over a parcel of land in Tarlac.
a. b.

2.The petitioner TALAVERA answered the complaint, alleging that there was a tenancy relationship between the
parties. a.

3.In his complaint, he alleged that he was a bona fide tenant of the land since 1958 until the petitioners
possessed the land in 1984. He claims that the petitioners planted palay through force and intimidation,
causing the respondent damages and dispossession.

This relationship was allegedly terminated through a “Casunduan” where the respondent sold his rights and
interest over the landholding

Lower Court: Ruled in favor of the respondent. Court of Appeals: Affirmed. The Casunduan did not constitute
as voluntary surrender.

Issue: Whether or not a mere contract between parties may be considered as voluntary surrender by the
tenant provided under Section 8, par. 2 of RA 3844.

Held: No it cannot. Ratio: Section 8 provides that the agricultural leasehold relation 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. *Voluntary surrender as mode of extinguishment relies on the tenant’s own volition
and does not require any court authorization. To protect the rights of the tenant, this intention to surrender
must be convincingly and sufficiently proved by competent evidence. It cannot be implied or presumed. *The
Supreme Court reviewed the facts and found that: a. b. c.

Laxamana, who was illiterate, needed money for the treatment of his sick wife (Php 1,000) In such need, he
approached the petitioners leading to him giving up the property in the Casunduan Essentially, Laxamana gave
up his sole source of livelihood to pay off his debts.

*The Court found that the respondent was forced by circumstances to sign the Casunduan which he did not
fully understand.
*Doctrine: Tenancy Relations cannot be bargained away except for 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.
*Payment of debt incurred due to unfortunate circumstances is not sufficient ground to extinguish a tenancy
agreement. Such is a conclusion requiring an examination of fact. WHEREFORE, IN VIEW OF THE FOREGOING,
the petition is hereby DISMISSED. The decision of the Court of Appeals dated March 3, 1987 is AFFIRMED.
F. 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).

FACTS
Spouses Alfonso Olympia and Carolina Zacarias and Spouses Claro Zacarias and Cristina Lorenzo were the
coowners of an agricultural land. Carolina became the owner of the property by 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.

Anacleto Peña who was a tenant of the property and a holder of a Certificate of Agricultural Leasehold had a
house constructed on the lot. He had several children on the first marriage, who also had their houses
constructed on the property.

On February 4, 1986, Anacleto, married Delia Razon. Anacleto died intestate and was survived by Delia and his
children in his first marriage, including Emilio. Emilio and Delia, the latter with respondent Raymundo Eugenio,
her son-in-law, continued tilling and cultivating the property. 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"

After receipt of the money, he executed a "Katibayang Paglilipat ng Pag-mamay-ari".

Carolina Zacarias executed a deed of sale transfering the Lot No. 616 to petitioner Milestone Title was issued in
the name of Milestone. TCT No. V-25431 was issued under the name of petitioner William Perez who
subsequently sold the same to Milestone. Thus, Milestone became the owner of the adjoining lots.

Private respondents Delia Razon Peña and Raymundo Eugenio filed a complaint 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. 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. PARAD
rendered a decision dismissing the complaint. 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.

Delia Razon Peña and Raymundo Eugenio appealed from the PARAD's decision to the DARAB. DARAB reversed
the decision of PARAD. 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. Court of Appeals, the latter affirmed the DARAB's decision. CA is
convinced that 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. Subsequently, petitioners filed a Motion for Reconsideration of the
CA's decision. Said motion was denied.

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

RULING: 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 Provision
Section 9 of Republic Act No. 3844 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.

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. 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. 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. Section 9 of Republic Act No. 3844 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. 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 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. In Manuel vs. Court of Appeals,

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. 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.

Answer to 1st Issue 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 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. Answer to 2nd issue 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. 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. 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. The only right of the
agricultural lessee or his successor in interest is the right of preemption and/or redemption. 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
VILLAVIZA vs. PANGANIBAN G.R. No. L19760 30 APRIL 1964 MARCELO VILLAVIZA, et. al., vs. JUDGE TOMAS
PANGANIBAN, et. al. Review of a Court of Agrarian Relations decision. Justice J. B. L. Reyes

FACTS:  Petitioner Villaviza et. al. were tenants in a riceland (Aliaga, Nueva Ecija) owned by Domingo Fajardo
since 1944. By 1955 Fajardo leased the land to a Quirino Capalad, who cultivated the land through the use of
machinery and also by hiring other tenants.  When petitioners went back to their specific landholdings to
prepare them for planting, they found that the land was already cultivated. They demanded Capalad to
reinstate them as farmer-tenants.  However, Capalad failed to reinstate them despite making promises to do
so. Petitioners then filed a suit with the Court of Agrarian Reform against Capalad.  CAR Ruling: Petitioners
should vacate the property and for Capalad to pay them for indemnity. Hence, this petition.

ISSUE: Whether or not the CAR committed grave abuse of discretion.

HELD: NO. RATIO:  The Supreme Court found no grave abuse of discretion by the Agrarian Court; and held
that the decision of the lower court is supported by substantive evidence based on the testimonies of witnesses
and which were not questioned by petitioners. 

A tenant’s right to be respected in his tenure under RA 1199, as amended, is an obligation of the landholder
created by law, and an action for violation thereof prescribes in 10 years. o In the case at bar, the petitioners
were ousted from the landholdings in June 1955 and filed their complaint on 31 March 1960; thus, their filing of
an action had not yet expired. However, the lower court found that petitioners have engaged in gainful
occupations since their illegal ejectment and had delayed the filing of the case, and for this reason the lower
court awarded damages equivalent to only 2 harvests based on the landholder’s share for the crop year.

The SC held that under Sec. 27 (1) of RA 1199, a tenant’s earnings may not be deducted from damages
because the said section positively provides that the tenant’s freedom to earn elsewhere is to be added to his
right to damages in case of illegal ejectment. Also, petitioners are not guilty of laches since the delay in
instituting the action was due to the promises Capalad made. However, the SC did not modify the award of
damages because of the lack of appeal from the decision indicates their satisfaction therewith and a waiver of
any amounts other than those indicated in the decision.
BASBAS v ENTENA G.R. No. L-26255 June 30, 1969

FACTS: 

Basbas is the leasehold tenant of a riceland owned by Rufino.

Rufino sent a letter to Basbas informing the latter that the land was for sale and that Basbas was given a
certain period to communicate his intention to purchase it.

Basbas sent a reply accepting the offer, although disagreeing with the price. Basbas also mentioned that he
was enlisting the aid of the government in purchasing the land.

Basbas sent a letter to the Land Authority asking for help to acquire the land. The Land Authority replied that
his request is being processed and action will be taken thereon once the Land Bank has been fully organized.

Rufino executed a Deed of Sale covering the riceland in favor of Sps. Flaviano and Angelina.

Rufino and his wife executed an affidavit stating that Basbas was notified of the sale before its conveyance,
that Basbas refused or failed to exercise the right of pre-emption granted under the Agricultural Land Reform
Code.

The submission of the affidavit enabled the registration of the Deed of Sale in favor of Sps. Flaviano and
Angelina.

Basbas filed a case before the CAR seeking to compel Rufino to sell the land to him.

CAR dismissed the case because Basbas failed to make tender of payment and consignation of the purchase
price; hence, the landowner cannot be compelled to sell the land to him.

ISSUE:
Whether tender of payment and judicial consignation of the purchase price are necessary before a tanant-
lessee may avail himself of the right of pre-emption or of redemption provided in Sec 11 & 12 of the
Agricultural Land Reform.

RULING:
The appealed order granting the motion to dismiss the complaint is affirmed.

Basbas’s claim to preference in purchasing the land, 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 x x
x

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: x x x

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. 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.Granting that Sections 11 and 12 are operative, yet this Court has
ruled in a past case that the timely exercise of the right of legal redemption requires either tender of the price
or valid consignation thereof. 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.

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.
In this case, there was neither prior tender nor did judicial consignation accompany the filing of the suit. 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.

Section 74 of the Land Reform Act (RA 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 ran until the tenant obtains financing from the Land Bank, or stops the
tenant from securing redemption funds from some other source.
CASE DIGEST
Written By: Alexandra G. Soledad

Case Name: Heirs of Enrique Tan, Sr., v. Reynalda Pollescas

Doctrine: For tenants failure to pay rental to come within the intend,ent of the law as a ground for
ejectment, it is imperative that the rental must be legal. What the law contemplates iis the deliberate
failure of the tenant to pay the legal rental, not the failure to pay an illegal rental.

Facts: Petitioners Tan were co-owners of a coconut farmland(Land) located at Labo, Ozamis City.
Esteban Pollescas was the original tenant of the said land. Upon Esteban’s death, his son Enrique
pollesca’s succeeded him and was appointed as tenant by the landowner Enrique Tan.

Respondent herein, Reynalda Pollesca, Esteban’s surviving spouse demanded that the Tans
recognize her as Esteban’s successor. The Tans did not accede. Thus, respondent Reynalda
Pollesca’s filed with the DARAB of Ozamis City a complaint for Annulment of Compromise
Agreement, Quieting of Tenancy Relationship and damages.

DARAB-Ozamis declared Reynalda as the lawful tenant of the Land, and apportioned the harvests
between Tan Heirs and Reynalda based on custimary sharing which is 2/3 to the landowner, and
1/3 to the tenant.

Tan Heirs demanded Reynalda to pay such amount, but Reynalda ignored it. Tan Heirs filed a
complaint of estafa against Reynalda. The MTC found Reynalda guilty of estafa, and due to her
continued failure to deliver the share of the Tan heirs, the latter filed a complaint for ejectment
against the former.

The petitioner Tan heirs argued that the leasehold agreement is extinguished due to non-payment
of the lease (2/3 of the harvest). The respondent Reyanalda contended that the petitioner’s demand
for payment is excessive. The CA ruled that there is othing in the law that makes failure to deliver a
share as ground for extinguishment of leasehold agreement.

Issue: Whether the CA is correct in ruling 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 Sec. 12 of R.A. 6657.

Ruling: The law governning in this case is R.A. 6657 or the Comprehensive Agrarian Reform Law
of 1998, which only expressly repealed Sec. 35 of R.A. 3844. The harvest in dispute are for the
years 1992-1993 after its effectivity. In this case, the Tan Heirs seek Reynalda’s ejectment on the
ground of non-payment of lease rentall. The Court agrees with the CA that for nonpayment of the
lease rental to be valid ground to disposses the agricultural lessee of the landholding, the amount
of the lease rental must first of all be lawful. If the amount of the lease rental claimed exceeds the
limit allowed by law, non-oayment of lease rental cannot be aground to disposses the agricultural
lessee of the landholding.

Sec. 43 of R.A. 3844,as amended provides that not more than 25% of the average normal
harvest shall constitute the just and fair rental for leasehold. In this case, the Tan Heirs cannot
validly disposses Reynalda of the landholding for non-payment o rental precisely because the
lease rental claimed by the Tan Heirs is unlawful.

Reynalda and the Tan Heirs failed to agree on a lawful lease rental. Consequently, that means the
DAR must first fix the provisional lease rental payable by Reynalda to the Tan Heirs pursuant to
par. 2 of Sec. 34 of R.A. 3844. Until DAR has fixed the provisional lease rental, Reynalda cannot
be in default in the payment of the lease rental since such amount is not yet determned. There can
be no delay in the payment of an undetermined lease rental because it is impossible to pay such
aundetermined 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 nonpayment of rental.
Moreover, there is no ground for extinguishment of leasehold rental in this case. The case of
Garchitorena v. Panganiban was also wrongfully cited by Atty. Anonat, counselfor the Tan Heirs.

The Court denied the petition and affirms the assailed decision of the CA. It remanded the case to
the DAR for determination of teh provisional lease rental.