G.R. No.

169472

January 20, 2009

HAYAG SA SINUMANG MAKABABASA: Ako, Francisco,[sic] Landicho, may sapat na gulang, may asawa, filipino, at sa ngayon ay naninirahan sa nayon ng Mationa, bayan ng Tayabas, lalawigan ng Quezon, sa bisa ng Kasulatang itoy NAGSASAYSAY: Na ako ang tunay at rehistradong mangagawa ng tatlong (3) parcelang palayan na may kasamang niogan, na natatayo sa nayon ng Mationa, bayan ng Tayabas, lalawigan ng Quezon, na ang mga sukat, at hangganan nito ay lalong makikilala at matutonton sa mga palatandaang sumusunod: (emphasis supplied) TRANSFER CERTIFICATE OF TITLE No. T-135953 "A parcel of land (Lot 9297 of the Cad. Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas, Quezon. x x x containing an area of Four Thousand Three Hundred Eighty Three (4,383) square meters more or less, x x x." TRANSFER CERTIFICATE OF TITLE No. T-135952 "A parcel of land (Lot 9856 of the Cad. Survey of Tayabas) with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas. x x x containing an area of Nineteen Thousand Thirty Two (19,032) square meters, more or less, x x x." TRANSFER CERTIFICATE OF TITLE No. T-135929 "A parcel of land (Lot 9895 of the Cadastral Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas, x x x containing an area of Three Thousand Eight Hundred Seventy Two (3,872) square meters, more or less, x x x." Na sapagkat ako ay mayroon pang ilang palayang ginagawa at alang-alang din sa halagang ISANG LIBONG PISO (P1,000.00), salaping umiiral na ibinayad at tinanggap ko naman ng buong kasiyahan buhat kay Eloisa Zolota, may sapat na gulang, Filipino [sic] kasal kay Alberto Aragon at sa ngayon ay naninirahan din dito sa bayan ng Tayabas, lalawigan ng Quezon, ay aking

FRANCISCO LANDICHO, FEDERICO LANDICHO AND BUENAVENTURA LANDICHO, Petitioners, vs. FELIX SIA, Respondent. DECISION PUNO, C.J.: At bar is a Petition for Review on Certiorari of the Decision1 and Resolution2 of the Court of Appeals in CA G.R. SP No. 61554, dated February 23, 2005 and July 6, 2005, respectively, reversing the decision of the Department of Agrarian Reform (DAR), Adjudication Board (DARAB), in DARAB Case No. 4599. The DARAB decision affirmed with modification the Decision of the Provincial Adjudicator of Region IV, Quezon, in PARAD Case No. IV-QUI-0343-94 dated October 24, 1995, awarding the petitioners disturbance compensation, a home lot consisting of 200 square meters, and damages. The appellate court found that the complaint against the respondent is dismissible for lack of cause of action on the ground of prescription. The instant case involves three parcels of agricultural land located in Barangay Mateona, Tayabas, Quezon, covered by Transfer Certificate of Title (TCT) No. 135953 - Lot No. 9297,3 TCT No. 135952 - Lot No. 9856,4 and TCT No. 135929 - Lot No. 9895,5 with an aggregate area of approximately 27,287 square meters. The subject parcels of land were originally owned by Loreanne Z. Aragon, Alberto Z. Aragon, Jr., and Alberto Z. Aragon III (Aragons).6 The agricultural land was tenanted by the late Arcadio Landicho from 1949 until his death in 19727after which his tenancy rights were succeeded by his son, petitioner Francisco Landicho.8 The other petitioners, Buenaventura Landicho, Francisco Landichos son, and Federico Landicho, Franciscos brother, helped him cultivate the land.9 On January 31, 1976, Francisco Landicho voluntarily surrendered his tenancy rights over the three parcels of land to Eloisa Zolota, married to Alberto Aragon, through a notarized "Kasulatan sa Pagsasauli ng Gawaing Palayan" (1976 Kasulatan),10 for a consideration of PhP1,000.00. The 1976 Kasulatan provides, viz.: KASULATAN SA PAGSASAULI NG GAWAING PALAYAN

kusang loob na ISASAULI AT IBABALIK sa may-ari nito ang tatlong (3) parcelang palayan na binabanggit sa itaas nito x x x. (emphasis supplied) SA KATUNAYAN NG LAHAT, ay nilalagdaan ko ito ngayong ika-31 ng Enero, taong 1976, dito sa bayan ng Tayabas, lalawigan ng Quezon. DIGPI NG KANANG HINLALAKI FRANCISCO LANDICHO Manggagawa xxxx Notwithstanding the execution of the 1976 Kasulatan, the petitioners continued cultivating the subject landholdings11 until 1987 when another notarized "Kasulatan ng Pagsasauli ng Gawaing Palayan" (1987 Kasulatan)12 was executed on July 2, 1987 by Francisco Landicho through which he surrendered his tenancy rights to the Aragons for a consideration of PhP3,000.00.13 The 1987 Kasulatan provides, viz.: KASULATAN NG PAGSASAULI NG GAWAIN TANTUIN ANG SINUMANG MAKAKABASA NITO: Ako, FRANCISCO LANDICHO, asawa ni Lucia Reyes, may sapat na gulang, filipino,[sic] at naninirahan sa bayan ng Tayabas, lalawigan ng Quezon, dito ay nagsasalaysay ng mga sumusunod: (emphasis supplied) Na ako ang siyang gumagawa at nagaalaga ng tatlong palagay na lupa na mayroong pagkakaayos gaya ng sumusunod: (emphasis supplied) TRANSFER CERTIFICATE OF TITLE NO. T-135953 A parcel of land (Lot 9897 of the Cad. Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas, Quezon. x x x containing an area of Four Thousand Eight Hundred Three [sic] (4,383) square meters A parcel of land (Lot 9856) of the Cadastral Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa,

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Municipality of Tayabas. x x x containing an area of Nineteen Thousand Thirty Two (19,032) square meters, more or less A parcel of land (Lot 9895 of the Cad. Survey of Tayabas), with the improvements thereon, situated in the Barrio of Mationa, Municipality of Tayabas x x x containing an area of Three Thousand Eight Hundred Seventy Two (3,872) square meters, more or less Naitong [sic] naulit na lupa ay pagaari nila Loreanne Z. Aragon, Alberto Aragon, Jr., Alberto Aragon III, gayondin sapagkat ako ay matanda na at gayondin hindi ko na kayang gumawa sa naulit na lupa, kaya itong naulit na lupa ay aking ISINASAULI at IBINABALIK sa naulit na mayaring nasasabi sa taas nito; (emphasis supplied) Na simula ngayon ay mayroong karapatan na sila na kumuha o humanap ng ibang gagawa sa naulit na lupa at hindi na akong makikiaalam dito, at gayondin mayroong laya silang ipagbili ang naulit na lupa, at hindi ako makikialam dito; na ito ay binasa sa akin at naunawaan ko naman ang nilalaman nito;(emphasis supplied) SA KATUNAYAN ng lahat, [sic] ng ito akoy lumagda sa kasulatang ito ngayong ika 2 ng Hulyo, /[sic]1987 dito sa Tayabas, Quezon. Diin ng Kgg. Hinki FRANCISCO LANDICHO Manggagawa xxxx On the same day as the execution of the 1987 Kasulatan, the three parcels of land were sold to respondent Felix L. Sia by the spouses Alberto P. Aragon and Eloisa Zolota Aragon by virtue of a general power of attorney executed in their favor by their children, the Aragons. A "Deed of Absolute Sale"14 was executed, whereby the three parcels of land mentioned above were sold, transferred and conveyed by way of an absolute sale for and in consideration of PhP50,000.00. Upon the sale of the subject land to respondent Felix Sia, he converted the same to a residential subdivision without a DAR Clearance and ejected the petitioners from the subject land.15 Aggrieved, the petitioners first sought the assistance of Barangay Agrarian Reform Committee

(BARC) Chairman Rosalio Cabuyao,16 who in turn brought the matter to the Provincial Agrarian Reform Office (PARO) of Quezon. Petitioners Federico Landicho and Buenaventura Landicho then filed a protest before the DAR PARO, Legal Division of Lucena City17 alleging that they are the tenants of the parcels of land owned by respondent Felix Sia and claimed that they are entitled to a disturbance compensation. During the mediation conference held at the DAR Provincial Agrarian Reform Office on July 22, 1992, it was admitted by Francisco Landicho that he voluntarily surrendered his tenancy rights over the subject parcels of land in consideration of PhP3,000.00.18 Thus, in the Report and Recommendation19 of DAR Provincial Legal Officer III, Ernesto M. Arro, Jr., dated October 1, 1992, it was found that the petitioners had no claim for tenancy rights over the subject parcels of land. It was held by the DAR Provincial Legal Officer that Francisco Landicho is the legal and bona fide tenant of the parcels of land but he cannot be awarded disturbance compensation because he voluntarily surrendered his tenancy rights over the said properties twice, through the 1976 and the 1987 Kasulatan. In the case of Buenaventura and Federico Landicho, it was found that they are merely farm helpers of Francisco Landicho and are not entitled to disturbance compensation. Dissatisfied with the ruling of the DAR PARO of Lucena City, petitioners Buenaventura and Federico Landicho filed another Protest before the DAR Legal Division, Region IV, Pasig, Metro Manila. On February 15, 1993, a Memorandum20 was issued by Legal Officer II, Dandumum D. Sultan, Jr., which also dismissed the protest of the petitioners. It was likewise found that Federico and Buenaventura are not tenants of the land in question but are merely farm helpers of the legitimate tenant, Francisco Landicho, who surrendered his tenancy rights to the former owner, the Aragons. During an interview with Buenaventura Landicho conducted by Legal Officer II Dandumum Sultan, Jr. it was affirmed by Buenaventura that it was only Francisco Landicho, his father, who was allowed and permitted to work on the subject land and that both he and Federico had not secured the permission of the landowner to farm the land.21 In response to the complaint of BARC Chairman Rosalio Cabuyao, DAR Region IV Director Percival C. Dalugdug wrote a letter, dated April 25, 1994, stating that the results of an investigation conducted by their representatives revealed that Buenaventura Landicho and Federico Landicho are not tenants of the subject land

and are thus not entitled to disturbance compensation. It was also stated in the letter that it is only Francisco Landicho who is the legitimate tenant of the land owned by the Aragons. However, he surrendered his tenancy rights by virtue of the 1976 and 1987 Kasulatan.22 The letter23 states: Ika-25 ng Abril 1994 G. Rosalio J. Cabuyao BARC Chairman Brgy. Mationa, Tayabas, Quezon Mahal na G. Cabuyao, Kami po ay lumiham sa inyo upang ipaabot sa inyo ang pinakahuling ulat mula sa aming PARO sa Quezon I [sic] hinggil sa inyong iniharap na reklamo na ayon po sa inyo ay hindi binibigyang pansin ni Atty. Rolando Roldan. xxxx Hinggil naman sa pagbibigay ng disturbance compensation kina G. Buenaventura at Federico Landicho, ikinalulungkot po naming ipaalam sa inyo na wala tayong sapat na batayan upang magawa ito. Ayon sa pagsisiyasat na isinagawa ng aming kawani, ang magkapatid na Buenaventura at Federico ay hindi kasama o walang ugnayang kasama (tenancy relationship) sa may-ari ng lupa sapagkat ang kanilang ama ang siyang may karapatan at lehitimong kasama. Ayon din sa ulat, sa pamamagitan ng kasulatan sa pagsasauli ng gawaing palayan ay isinuko na ni G. Francisco Landicho ang kanyang mga karapatan bilang kasama at magsasaka sa lupang pinaguusapan. x x x. Maraming salamat po sa inyong pagsulat at sana ay nabigyang linaw namin ang inyong hinaing. Sumasainyo, (Sgd.) Percival C. Dalugdug Direktor Pangrehiyon On June 10, 1994, petitioners Francisco Landicho, Federico Landicho and Buenaventura Landicho filed a Complaint24 against Alberto Aragon, Jr., Alberto Aragon III and Felix Sia before the DARAB for fixing and payment of disturbance compensation and awarding of home lot. The

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petitioners allege that they are tenants of the subject land since January 31, 1976 and that they were unlawfully ejected from the subject land by virtue of the 1976 and 1987 Kasulatan which they allege to be invalid, since they were executed by Francisco through the insidious words, undue influence and strategy employed by the Aragons, in connivance with respondent Sia. In their Answer25 dated July 7, 1994, the Aragons recognized only Francisco as their former tenant until he surrendered his tenancy rights through the 1976 Kasulatan and finally surrendered the land upon the execution of the 1987 Kasulatan. They assert that there was no undue advantage exerted over petitioner Francisco Landicho since the 1976 and the 1987 Kasulatan were written in Tagalog, a language understood by Francisco.26 They raised the defense that the petitioners have no cause of action on the grounds of prescription, laches, and estoppel, that the claim is barred by prior judgment, and that the claim has been abandoned or otherwise extinguished.27 On the other hand, respondent Felix Sia, in his Answer with Counterclaim28 dated July 11, 1994, alleged that when he bought the subject parcels of land, they were free from tenants since Francisco had already relinquished his tenancy rights therein through the execution of public documents. After the filing of the parties respective position papers, the DAR Provincial Adjudicator of Region IV rendered a decision in PARAD Case No. IV-QUI-0343-94,29 dated October 24, 1995, in favor of the petitioners. Provincial Adjudicator Oscar C. Dimacali ruled that against their will, the petitioners were dispossessed of the land that they have been cultivating. He also ruled that it is not necessary to decide on the issue of whether Federico and Buenaventura are merely farm helpers of Francisco, nor is it essential to determine whether the 1976 and 1987 Kasulatan are valid. The dispositive portion30 of the decision reads: WHEREFORE, premises considered, the following are hereby ordered: 1. defendant Felix Sia to pay each of the plaintiffs a disturbance compensation equivalent to five (5) years based from the average normal harvest to be determined by the MARO concerned who is hereby required to make a report to this Office within one (1) month from receipt hereof;

2. defendant Felix Sia to provide each plaintiff a homelot [sic] of 200 square meters in the subject landholdings; and, 3. defendants to pay the plaintiffs jointly and severally the sum of P10,000.00 as moral damages and P5,000.00 as exemplary damages. No pronounce [sic] as to cost. SO ORDERED. The Aragons and respondent Sia appealed the foregoing decision to the DARAB,31 which issued a decision32 on September 18, 2000 that affirmed in part the decision of the Provincial Adjudicator, and deleted the award of disturbance compensation on the basis of the finding that the petitioners are still bona fide tenants in their respective landholdings. The DARAB did not give credit to the report and recommendation of Legal Officer III Ernesto M. Arro and Legal Officer II Dandumum D. Sultan, Jr. that Francisco Landicho voluntarily surrendered his tenancy rights.33 The DARAB found that a tenancy relationship exists between the petitioners and the Aragons and that when Felix Sia became the owner of the subject land, he assumed to exercise the rights and obligations that pertain to the previous owners. The dispositive portion34 of the DARAB decision provides: WHEREFORE, premises considered, the appealed decision dated October 24, 1995, is hereby affirmed with MODIFICATION in so far as the disturbance compensation which is not obtaining in the case at bar considering that plaintiffs-appellees are still bona fide tenants in their respective landholdings. Furthermore, the DAR-BALA of Quezon Province in coordination with the Office of the DAR Secretary, is hereby directed to file criminal charges for illegal conversion against defendants-appellants, if circumstances may still warrant. No Pronouncement as to Costs. SO ORDERED. Felix Sia then filed a Petition for Review35 under Rule 43 with the Court of Appeals, which rendered a decision36on February 23, 2005 that set aside the decision of the DARAB and dismissed the complaint. The Court of Appeals found that the essential requisites are not

present to establish a tenancy relationship between petitioners Buenaventura and Federico Landicho and the Aragons, and that the tenant-landlord relationship between Francisco Landicho and the Aragons also ended upon the surrender of his tenancy rights through the 1976 and 1987 Kasulatan; consequently, no tenancy relationship also exists between the petitioners and respondent Felix Sia. The Court of Appeals also ruled that even assuming that the petitioners have a cause of action, the same had already prescribed since the complaint was only filed seven years from the time the cause of action accrued.37 On March 22, 2005, the petitioners filed a Motion for Reconsideration38 of the Court of Appeals decision. The Court of Appeals issued a Resolution39 on July 6, 2005, denying the motion for reconsideration. Hence, this Petition for Review on Certiorari40 of the Decision and Resolution of the Court of Appeals with the following assignment of errors:41 The Honorable Court of Appeals erred: 1. When it gave due course to the petition and consequently granted the same; and 2. When it disregarded the finding of facts [sic] of the DARAB that petitioners are bonafide [sic] tenants of the land purchased by herein respondent and therefore entitled to security of tenure. The parties filed their respective Memoranda42 which both raised the following issues:43 (1) whether or not the petitioners are bona fide tenants of the land purchased by the respondent; and (2) whether or not the cause of action of the petitioners already prescribed at the time of the filing of the complaint. We deny the petition. The case before us involves the determination of whether the petitioners are tenants of the land purchased by the respondent, which is essentially a question of fact. As a general rule, questions of fact are not proper in a petition under Rule 45.44 But, since the findings of facts of the DARAB and the Court of Appeals contradict each other, it is crucial to go through the evidence and documents on record as a matter of exception to the rule.45

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In determining the existence of a tenancy relationship between the petitioners and the respondent, it is necessary to make a distinction between petitioner Francisco Landicho and petitioners Buenaventura and Federico Landicho. With respect to Francisco, both the petitioners and the respondent agree that he was recognized by the Aragons as a bona fide tenant of the subject land when he continued the cultivation of the land after the death of his father Arcadio in 1972.46 The dispute between the parties arose when the petitioners were ejected from the land on the basis of the 1976 and the 1987 Kasulatan, the validity of which is questioned by the petitioners. The petitioners assert that the Aragons, the predecessors-ininterest of the respondent, through insidious words and machinations, took advantage of Francisco Landichos illiteracy and old age in order to make him sign the 1976 and 1987 Kasulatan.47 The Aragons and respondent Felix Sia deny that they took advantage of petitioner Francisco Landicho and the respondent also denies employing any fraudulent scheme48 since both the 1976 and the 1987 Kasulatan were written in Tagalog, a language understood by Francisco Landicho.49 They further argue that these are public documents, the validity of which cannot be collaterally attacked.50 They aver that the 1976 and 1987 Kasulatan were voluntarily executed by Francisco Landicho and that he willingly surrendered his tenancy rights, which thus validly extinguished the tenancy relationship.51 With respect to Buenaventura and Federico Landicho, it is asserted by the petitioners that they have been cultivating the three lots, which were divided among them for cultivation in this wise: TCT No. 135953 with Lot No. 9895- tenanted by Francisco Landicho TCT No. 135952 with Lot No. 9896- tenanted by Federico Landicho TCT No. 135929 with Lot No. 9897- tenanted by Buenaventura Landicho.52 They claim that there was an implied tenancy relationship because the Aragons have personal knowledge of the fact that the petitioners were the ones who cultivated the land53 and they were in continuous possession of the land until sometime in 1987 when they were unlawfully ejected by virtue of the invalid 1987 Kasulatan.54

The DARAB did not give credit to the report and recommendation of the DAR Provincial Legal Officer and DAR Provincial Adjudicator of Region IV that Francisco Landicho voluntarily surrendered his tenancy rights through the 1987 Kasulatan and that Federico and Buenaventura Landicho were merely farm helpers. The DARAB found that a landlord-tenant relationship exists between the petitioners and the respondent and ruled in this wise: However, We find it hard to believe that plaintiffsappellees who have been tilling the land in question for so long a time, would suddenly lose interest in it for good time [sic] when they know that full ownership over the same would soon be in their hands. Besides, plaintiffsappellees Francisco Landicho et., [sic] al., would not even thought [sic] of filing a complaint if they have already abandoned or surrendered the subject landholdings in favor of herein defendants-appellants. Anyone in his right mind for that matter, would not waste time[,] effort and money especially if he is poor to prosecute an unworthy action. 55 The Court of Appeals reversed the decision of the DARAB and agreed with the ruling of the DAR PARO and the Region IV DAR Legal Division that only petitioner Francisco Landicho was the tenant of all of the three lots covered by TCT No. 135953, TCT No. 135952 and TCT No. 135929 and that he voluntarily surrendered his tenancy rights upon the execution of the 1987 Kasulatan. The Court of Appeals also agreed with the PARO and the Region IV DAR that Federico and Buenaventura Landicho were merely farm helpers of Francisco, ruling that they were considered as part of the bona fide tenants immediate farm household and for this reason, the Aragons cannot be faulted for not questioning their possession and cultivation of the subject landholdings.56 We agree with the Court of Appeals and give credence to the findings of the DAR PARO and Region IV DAR. A tenant is defined under Section 5(a) of Republic Act No. 1199, otherwise known as the Agricultural Tenancy Act of the Philippines, as: x x x 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.57

A tenancy relationship arises between a landholder and a tenant once they agree, expressly or impliedly, to undertake jointly the cultivation of a land belonging to the landholder, as a result of which relationship the tenant acquires the right to continue working on and cultivating the land.58 The existence of a tenancy relationship cannot be presumed and claims that one is a tenant do not automatically give rise to security of tenure.59 For a tenancy relationship to exist, all of the following essential requisites must be present: (1) the parties are the landowner and the tenant; (2) the subject matter is agricultural land; (3) there is consent between the parties; (4) the purpose is agricultural production; (5) there is personal cultivation by the tenant; and, (6) there is sharing of the harvests between the parties.60 Not all of these requisites obtain in the case at bar. The essential element of consent is absent because the landowners never recognized petitioners Federico and Buenaventura Landicho as legitimate tenants of the subject land. And, although Federico and Buenaventura claim that they are tenants of "Lot No. 9896 and Lot No. 9897,"61 respectively, simply because they continuously cultivated and openly occupied the subject land; there was no evidence presented to establish the presence of the essential requisites of a tenancy relationship other than the self-serving statements of the petitioners. Furthermore, both the 1976 and the 1987 Kasulatan only mentioned Francisco as the tenant of the subject parcels of land, and there was no mention of petitioners Federico and Buenaventura. The petitioners cannot rely on their self-serving statements to prove the existence of a tenancy relationship because independent and concrete evidence, aside from self-serving statements, is needed to prove personal cultivation, sharing of harvests, or consent of the landowner.62 A tiller or a farmworker does not automatically become an agricultural tenant recognized under agrarian laws by mere occupation or cultivation of an agricultural land.63 The DARAB did not cite any evidence to show the existence of the requisites of a tenancy relationship and merely based the conclusion that the petitioners are tenants of the Aragons on the weak reasoning that filing a complaint is inconsistent with the voluntary surrender of the landholdings and that it is unlikely that petitioners would suddenly lose interest in the subject land when they know that ownership would soon be transferred to

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them.64The DARABs inferences are without basis and are purely speculative, and except for its sweeping conclusion, there is no other independent and concrete evidence in the record of the case that would sustain the finding that Federico and Buenaventura are tenants of the Aragons. It was not shown that Federico and Buenaventura cultivated the land with the consent of the landowners. The Court of Appeals correctly held that only Francisco was the bona fide tenant of the land in question and that Federico and Buenaventura were just farm helpers of Francisco, as part of his immediate farm household.65 This is supported by the evidence on record where, in the Memorandum of DAR Region IV Legal Officer II Dandumum Sultan, Jr., it is stated that during an interview conducted with Buenaventura Landicho, he disclosed that it was only Francisco Landicho, his father, who was allowed and permitted to work on the subject land and that both he and Federico had not secured the permission of the landowner to farm the land.66 There was also no evidence presented to show that Federico and Buenaventura gave a share of their harvest to the Aragons. Independent evidence, such as receipts, must be presented to show that there was a sharing of the harvest between the landowner and the tenant.67 And, assuming the landowners received a share of the harvest, it was held in the case of Cornelio de Jesus, et al. v. Moldex Realty, Inc.68 that "[t]he fact of receipt, without an agreed system of sharing, does not ipso facto create a tenancy."69 There is no tenancy relationship between the Aragons and petitioners Federico and Buenaventura without the essential elements of consent and sharing of agricultural produce.70 Neither can we give any weight to the petitioners contention that there was an implied tenancy by reason alone of their continuous cultivation of the land. Acquiescence by the landowner of their cultivation of the land does not create an implied tenancy if the landowners have never considered petitioners Federico and Buenaventura as tenants of the land and if the essential requisites of a tenancy relationship are lacking. There was no intention to institute the petitioners as agricultural tenants. In the case of Epitacio Sialana v. Mary Y. Avila, et al.71 it was held that "x x x for an implied tenancy to come about, the actuations of the parties taken in their entirety must be demonstrative of an intent to continue a prior lease established by the landholder x x x."72

With respect to petitioner Francisco Landicho, the Court of Appeals also correctly held that although Francisco was the legal tenant of the subject land, he voluntarily surrendered his tenancy rights when he knowingly and freely executed the 1987 Kasulatan.73 This conclusion finds basis in the investigation conducted by the PARO, where during the mediation conference, petitioner Francisco Landicho admitted that he voluntarily surrendered his tenancy rights over the subject parcels of land in consideration of PhP3,000.00.74 The tenancy relationship was validly extinguished through the execution of the 1987 Kasulatan and upon the voluntary surrender of the landholdings pursuant to Section 8 of Republic Act No. 3844, otherwise known as the Agricultural Land Reform Code, to wit: SECTION 8. Extinguishment of Agricultural Leasehold Relation. The agricultural leasehold relation established under this Code shall be extinguished by: (1) Abandonment of the landholding without the knowledge of the agricultural lessor; (2) Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served three months in advance; or (3) Absence of the persons under Section nine to succeed to the lessee, in the event of death or permanent incapacity of the lessee.75 The petitioners also failed to support their claim that the Aragons took advantage of Franciscos old age and illiteracy and employed fraudulent schemes in order to deceive him into signing the Kasulatan. It has been held that "[a] person is not incapacitated to contract merely because of advanced years or by reason of physical infirmities. It is only when such age or infirmities impair the mental faculties to such extent as to prevent one from properly, intelligently, and fairly protecting her property rights, is she considered incapacitated."76 The petitioners contention that the Aragons employed fraud, aside from being unsubstantiated, is also contrary to the records of the case. Both the 1976 and the 1987 Kasulatan were also written in Tagalog, which is the language understood by Francisco Landicho. They were written in an uncomplicated manner and clearly stated that he is returning the land that he has been cultivating to the landowners because he is already old and could no longer work on the land.77 The 1987 Kasulatan also states

that the contents of the document were read to him and that he understands the same. It is also important to note that both the 1976 and 1987 Kasulatan are duly notarized and are considered as public documents evidencing the surrender of Franciscos tenancy rights over the subject landholdings. They were executed with all the legal formalities of a public document and thus the legal presumption of the regularity and validity of the Kasulatan are retained in the absence of full, clear and convincing evidence to overcome such presumption.78 Strong evidence is required to prove a defect of a public instrument,79 and since such strong and convincing evidence was not presented in the instant case, the 1976 and the 1987 Kasulatan are presumed valid. Coming now to the second issue of prescription, the petitioners argue that they did not sleep on their rights because although the Complaint with the DARAB was filed on June 10, 1994, they already filed a protest before the DAR Legal Division of Lucena prior to their Complaint before the DARAB.80 This contention cannot be sustained. An action to enforce rights as an agricultural tenant is barred by prescription if not filed within three (3) years.81Section 38 of Republic Act No. 3844, otherwise known as the Agricultural Land Reform Code, specifically provides that: SECTION 38. Statute of Limitations. An action to enforce any cause of action under this Code shall be barred if not commenced within three years after such cause of action accrued.82 The records of the case show that the protest before the DAR Legal Division of Lucena was filed sometime in 1992 when the case was set for a mediation conference.83 Even assuming that they have a cause of action, this arose in 1987 when they were ejected from the landholdings they were cultivating which means that it took them about five (5) years to file a protest before the DAR Legal Division of Lucena, and it took them seven (7) years to file a Complaint before the DARAB. Clearly, their cause of action has already prescribed. Accordingly, the petitioners complaint against the respondent is dismissible on the ground of prescription and for lack of cause of action.

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IN VIEW WHEREOF, the Decision and Resolution of the Court of Appeals under review are hereby AFFIRMED without pronouncement as to costs. SO ORDERED.

Trias Branch, and was subsequently assigned to other branches of respondent bank within the Province of Cavite. Eventually, he was appointed as Business Development and Public Relations (BDPR) Officer of the entire respondent bank.4 In addition to his regular duties as BDPR Officer, petitioner was designated as a member of the Procurement Bidding and Awards Committee (PBAC), Oversight Committee and Investigating Committee of the respondent bank.5 On 23 October 1997, petitioner was temporarily assigned as caretaker of respondent bank. Finally, he was designated as Acting Assistant Vice-President and at the same time Officer-In-Charge of the respondent bank on 15 June 1998.6 Respondent bank, on the other hand, is a banking institution duly authorized and existing as such under the Philippine laws. It was originally known as Royal Savings Bank. In 1983 and the early part of 1984, respondent bank underwent serious liquidity problems and was placed by the Central Bank of the Philippines (Central Bank) under receivership. However, due to the continued inability to maintain a state of liquidity, the Central Bank ordered its closure on 9 July 1984. After two months, the respondent bank was reopened under the control and management of the Commercial Bank of Manila and was then renamed as Comsavings Bank.7 In 1987, the Government Service Insurance System (GSIS) acquired the interest of the Commercial Bank of Manila in the respondent bank and together with the Central Bank and the Philippine Deposit Insurance Corporation (PDIC), GSIS infused a substantial amount of fresh capital into respondent bank in order to ensure its effective rehabilitation. Resultantly, GSIS took over the control and management of the respondent bank that was renamed as GSIS Family Savings Bank.8 Accordingly, Amando Macalino (Macalino) was appointed as President of the respondent bank on 21 December 1998. In view of Macalinos appointment, the designation of petitioner as Officer-In-Charge and caretaker of respondent bank was recalled; however, his appointment as Acting Assistant Vice-President, was retained.9 In line with its policy to attain financial stability, respondent bank adopted measures directed to cut down administrative overhead expenses through streamlining. Thus, respondent bank came up with an early voluntary

retirement program. On 15 April 2001, petitioner opted to avail himself of this retirement package, supposedly, under protest, and received the amount of P1.324 Million as retirement pay.10 On 11 July 2002, petitioner filed a complaint against the respondent bank and Macalino for constructive dismissal and underpayment of wages, 13th month pay and retirement benefits before the Labor Arbiter.11 In his Position Paper,12 petitioner alleged that due to discrimination, unfair treatment, and intense pressure he had received from the new management through Macalino, he was forced to retire at the prime of his life. In a Decision13 dated 30 June 2003, the Labor Arbiter adjudged the respondent bank guilty of illegal dismissal, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered, finding complainant to have been illegally dismissed. Concomitantly, Respondents are jointly and solidarily liable to pay RICARDO PORTUGUEZ the following: P1,148,33 3.33 1,280,000 .00 443,884.3 2 500,000.0 0 400,000.0 0 representing backwages; representing separation pay; representing salary differentials; representing moral damages; representing exemplary damages;

G.R. No. 169570

March 2, 2007

RICARDO PORTUGUEZ, Petitioner, vs. GSIS FAMILY BANK (Comsavings Bank) and THE HON. COURT OF APPEALS, Respondents. DECISION CHICO-NAZARIO, J.: For resolution is a Petition for Review by Certiorari under Rule 45 of the Revised Rules of Court, of the Decision1dated 25 April 2005 and the Resolution2 dated 25 August 2005 of the Court of Appeals. The assailed Decision and Resolution reversed the findings of both the National Labor Relations Commission (NLRC) and the Labor Arbiter, in their Decisions dated 30 January 2004 and 30 June 2003, respectively, that respondent GSIS Family Bank is guilty of the illegal dismissal of petitioner Ricardo Portuguez. The dispositive portion of the assailed decision of the appellate court reads: IN VIEW OF ALL THE FOREGOING, the instant petition is hereby GRANTED, the assailed NLRC Decision dated January 30, 2004, together with the Resolution dated June 22, 2004, are RECALLED and SET ASIDE, and a new one entered DISMISSING NLRC NCR CA No. 037015-03 (NLRC NCR Case. No. 07-05075-2002). No pronouncement as to costs.3 The factual and procedural antecedents of this instant petition are as follows: Petitioner was employed by the respondent bank as utility clerk on 1 February 1971. Later, he rose from the ranks and was promoted as branch manager of the Gen.

Ten percent of the total award as attorneys fees. Other claims are dismissed for lack of merit. The detailed computation of the Computation & Examination Unit, National Capital Region is made part of this Decision.14 Aggrieved, respondent bank appealed the adverse decision to the NLRC which adopted in toto the findings of the Labor Arbiter. In a Decision15 dated 30 January 2004, the NLRC dismissed the appeal and found the

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decision of the Labor Arbiter to be sufficiently supported by the facts on record and law on the matter. Respondent banks Motion for Reconsideration was likewise denied by the NLRC in its Resolution16 dated 22 June 2004 for failing to show that patent or palpable errors have been committed in the assailed decision. The NLRC Resolution dated 22 June 2004, denying respondent banks motion for reconsideration, was prematurely declared final and executory and was entered into judgment on 6 August 2004.17 Shortly thereafter, on 16 August 2004, respondent bank timely elevated the matter to the Court of Appeals through a Special Civil Action for Certiorari18 under Rule 65 of the Revised Rules of Court. Incorporated with its petition was the Urgent Application for the Issuance of Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction. Pending resolution of its petition and application for the issuance of TRO and/or writ of preliminary injunction before the appellate court, the Labor Arbiter, on 16 September 2004, issued a Writ of Execution19 for the satisfaction of the NLRC decision dated 30 January 2004. On the same date, a Notice of Garnishment20 was served on the manager/cashier of respondent bank in the Pamplona Uno, Las Pias City Branch. Acting on the application for TRO, the Court of Appeals enjoined the implementation of the NLRC decision dated 30 January 2004 and therefore, the satisfaction of the Writ of Execution dated 16 September 2004 issued by the Labor Arbiter was tolled for a period of 60 days.21 Eventually, the appellate court issued a Writ of Preliminary Injunction22 permanently enjoining the execution of the NLRC decision dated 30 January 2004 until the final resolution of the case. On 25 April 2005, the Court of Appeals resolved the controversy by reversing the judgment of the Labor Arbiter and the NLRC and ruling out constructive dismissal considering that petitioners separation from service was voluntary on his part when he chose to avail himself of the respondent banks early retirement program and received the amount of P1.324 Million as retirement pay.23

Similarly ill-fated was Petitioners Motion for Reconsideration which was denied by the Court of Appeals in its Resolution24 dated 25 August 2005. Hence, this instant Petition for Review on Certiorari.25 For the resolution of this Court are the following issues: I. WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DECLARED THAT PETITIONER WAS NOT CONSTRUCTIVELY DISMISSED FROM EMPLOYMENT. II. WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DECLARED THAT PETITIONER IS NOT ENTITLED TO SALARY DIFFERENTIAL. Before we delve into the merits of the case, it is best to underscore that the factual findings of the NLRC affirming those of the Labor Arbiter, who are deemed to have acquired expertise on the matters within their jurisdiction, when sufficiently supported by evidence on record, are accorded respect if not finality, and are considered binding on this Court.26 It is equally true, however, that when the findings of the Labor Arbiter and the NLRC are inconsistent with that of the Court of Appeals, there is a need to review the records to determine which of them should be preferred as more conformable to evidentiary facts.27 As borne by the records, it appears that there is a divergence between the findings of the Labor Arbiter as affirmed by the NLRC, and those of the Court of Appeals. For the purpose of clarity and intelligibility, therefore, this Court will make an infinitesimal scrunity of the records and recalibrate and reevaluate the evidence presented by the parties all over again. We have already repeatedly held that this Court is not a trier of facts. Rule 45 of the Revised Rules of Court limits the office of a Petition for Review to questions of law and leaves the factual issues as found by the quasi-judicial bodies, as long as they are supported by evidence.28 We never fail to stress as well that when the rulings of the labor tribunal and the appellate court are in conflict, we are constrained to analyze and weigh the evidence again.29

Substantively, petitioner alleges that respondent bank, through Macalino, subjected him to all forms of unbearable harassment that can be mustered in order to force him to resign. Petitioner specifically claims that he was deprived of his salary and other benefits and privileges appurtenant to his position as the Acting Assistant Vice-President, including his office. Respondent bank allegedly granted much higher salary to the newly hired bank officers compared to what he was receiving during his tenure. In contrast, respondent bank maintains that petitioner was not coerced to resign but voluntarily opted to avail himself of the early retirement program and was duly paid his retirement benefits. It posits that petitioner was merely holding the position of Assistant Vice-President in acting capacity subject to the ratification of the respondent banks Board of Directors and since his appointment has never been ratified by the Board, respondent bank cannot therefore grant him the salary and benefits accorded to such position. In finding that petitioner was not constructively dismissed from employment, the Court of Appeals stressed that there was no showing that petitioners separation from employment was due to involuntary resignation or forced severance. Neither was it shown that there was a decrease in salary and privileges or downgrading of petitioners rank. What can be clearly deduced from the evidence was that until his voluntary retirement in 2001, petitioner was holding the position of Acting Assistant Vice-President and was receiving the salary and benefits accorded thereto. After scrupulously examining the contrasting positions of the parties, and the conflicting decisions of the Labor Arbiter and the NLRC, on one hand, and the appellate court, on the other, we find the records of the case bereft of evidence to substantiate the conclusions reached by both the Labor Arbiter and the NLRC that petitioner was constructively dismissed from employment. Constructive dismissal or constructive discharge has been defined as quitting because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. 30In the case at bar, a demotion in rank or diminution in pay was never raised as an issue. Settled then is the fact that petitioner suffered no demotion in rank or diminution in pay that could give rise to a cause of action against respondent bank for constructive dismissal under this definition.

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Worthy to stress, however, is that constructive dismissal does not always take the form of demotion in rank or diminution in pay. In several cases, we have ruled that the act of a clear discrimination, insensibility or disdain by an employer may become so unbearable on the part of the employee so as to foreclose any choice on his part except to resign from such employment.31 It is upon the aforementioned legal tenet that petitioner anchored his case. Petitioner strenuously argues that while the newly hired bank officers were given higher salaries and fat allowances, he was merely paid the amount of P15,000 basic pay and P4,000 allowance for the position of Acting Assistant Vice-President which, according to him, was way below what the newly hired bank officers were enjoying. Stated differently, petitioner avers that he was discriminated against by the respondent bank in terms of payment of salary and grant of benefits and allowances. We do not agree. Upon careful perusal of the position papers, memoranda and other pleadings submitted by petitioner from the Labor Arbiter up to this Court, including the evidence appended thereon, we find that no evidence, substantial or otherwise, was ever submitted by petitioner to buttress the very premise of his position that there was discrimination. Discrimination has been defined as the failure to treat all persons equally when no reasonable distinction can be found between those favored and those not favored.32 Thus, before a claim for discrimination can prosper, it must be established that, first, there is no reasonable distinction or classification that can be obtained between persons belonging to the same class, and second, persons belonging to the same class have not been treated alike.33 Apropos thereto, petitioner failed to establish that he possessed the same skills, competencies and expertise as those of the newly hired bank officers so as to eliminate any possibility of substantial distinction that may warrant the unequal treatment between them. No proof was likewise presented by petitioner to show that the functions, duties and responsibilities he was performing are the same as those of the newly hired bank officers. Petitioner likewise failed to present any proof tending to show that he was discriminated against by the

respondent bank. While he vigorously cried that the newly hired bank officers were afforded higher salaries and benefits compared to what he was earning, petitioner, however, miserably failed to substantiate his claim. No evidence was ever offered by petitioner to prove the amount of salaries and bonuses actually enjoyed by the newly hired bank officers, except for his bare allegations contained in his demand letter34 dated 20 February 2001, to wit: Mr. Portuguez has reliably learned that Bank records could show that your newly hired officers are being paid the basic salaries in the range of P25,000 to P30,000.35 Such bare and sweeping statement contains nothing but empty imputation of a fact that could hardly be given any evidentiary weight by this Court. It is indeed true that the demand letter made reference to bank records upon which petitioner purportedly derived his allegation but no such bank records were ever presented as evidence at any stage of the proceedings. Indubitably, such self-serving and unsubstantiated declaration is insufficient to establish a case before quasi-judicial bodies. Well-entrenched is the rule that the quantum of evidence required to establish a fact in quasijudicial bodies is substantial evidence. Substantial evidence is such amount of relevant evidence which a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might opine otherwise.36 It is beyond question that the evidence presented by petitioner cannot be considered as substantial evidence. Verily, petitioners case is devoid of substance to convince even the unreasonable minds, for evidently the records are stripped of supporting proofs to, at the very least, even just verify his claim. In addition, petitioner asseverates that in cases of constructive dismissal, the burden of proof rests on the employer to show that the employee was dismissed on a valid and just cause.37 And failing to discharge such presumption, as in the case at bar, respondent bank should be adjudged guilty of illegal dismissal. Again, we are not persuaded. We are not unaware of the statutory rule that in illegal dismissal cases, the employer has the onus probandi to show that the employees separation from employment is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without

sufficient cause.38 It bears stressing, however, that this legal principle presupposes that there is indeed an involuntary separation from employment and the facts attendant to such forced separation was clearly established. This legal principle has no application in the instant controversy for as we have succinctly pointed above, petitioner failed to establish that indeed he was discriminated against and on account of such discrimination, he was forced to sever his employment from the respondent bank. What is undisputed is the fact that petitioner availed himself of respondent banks early voluntary retirement program and accordingly received his retirement pay in the amount of P1.324 Million under such program. Consequently, the burden of proof will not vest on respondent bank to prove the legality of petitioners separation from employment but aptly remains with the petitioner to prove his allegation that his availment of the early voluntary retirement program was, in fact, done involuntarily. As we have explicitly ruled in Machica v. Roosevelt Service Center, Inc.39: The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were burdened to prove their allegation that respondents dismissed them from their employment. It must be stressed that the evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears the burden of proof in illegal dismissal cases finds no application here because the respondents deny having dismissed the petitioners. (Emphases supplied.) Verily, petitioner did not present any clear, positive or convincing evidence in the present case to support his claims. Indeed, he never presented any evidence at all other than his own self-serving declarations. We must bear in mind the legal dictum that, "he who asserts, not he who denies, must prove."40 In the same breath, we are constrained to deny petitioners claim for salary differentials. We are not unmindful that the amount of P19,000 a month may not be commensurate compensation to the position of Acting Assistant Vice-President, but in the case at bar, the facts and the evidence did not establish even at least a rational basis for how much the standard compensation for the said position must be. It is not enough that petitioner perceived that he was receiving a very low salary in the absence of a comparative standard upon

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which he can peg his supposed commensurate compensation. Petitioners incessant reliance on the findings of the Labor Arbiter and the NLRC is equally unavailing. At the outset, we have already laid down that findings of fact of quasi-judicial bodies are conclusive and are not subject to review by the Court. However, this rule does not apply if such findings are tainted with mistake or not supported by evidence. 41 In finding that respondent bank is guilty of constructive dismissal, the Labor Arbiter mainly hinges its ruling on the Constitutional dogma that due to the lopsided power of capital over labor, the State shall intervene as an equalizer consistent with the social justice policy affording protection to labor.42

conflicting interest of labor and management and to guaranty that labor and management stand on equal footing when bargaining in good faith with each other, not to tilt the scale to favor one over the other. WHEREFORE, in view of the foregoing, the instant petition is DENIED. The Decision dated 25 April 2005, and the Resolution dated 25 August 2005, both rendered by the Court of Appeals in CA-G.R. SP No. 85723, are hereby AFFIRMED. No costs. SO ORDERED.

While we agree with the Labor Arbiter that in light of this Constitutional mandate, we must be vigilant in striking down any attempt of the management to exploit or oppress the working class, it does not mean, however, that we are but bound to uphold the working class in every labor dispute brought before this Court for our resolution.

While our laws endeavor to give life to the constitutional policy on social justice and on the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play.43 It should be remembered that the Philippine Constitution, while inexorably committed towards the protection of the working class from exploitation and unfair treatment, nevertheless mandates the policy of social justice so as to strike a balance between an avowed predilection for labor, on the one hand, and the maintenance of the legal rights of capital, the proverbial hen that lays the golden egg, on the other. Indeed, we should not be unmindful of the legal norm that justice is in every case for the deserving, to be dispensed with in light of established facts, the applicable law, and existing jurisprudence.44 The presumption in favor of labor cannot defeat the very purpose for which our labor laws exist: to balance the

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