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SPOUSES TITUS L. ENDAYA and GLENDA TRINIDAD; SPOUSES RICO L.

ENDAYA and NANETTE AQUINO; and SPOUSES JOSEPHINE L. ENDAYA


and LEANDRO BANTUG,petitioners, vs. COURT OF APPEALS and PEDRO
FIDELI, respondents.

Alfredo L. Endaya for petitioners.

SYLLABUS

1.
LABOR LAWS; TENANCY; EFFECTS OF ABOLITION OF SHARE
TENANCY AND ESTABLISHMENT OF AGRICULTURAL LEASEHOLD.
R.A. No. 3844 (1963), as amended by R.A. No. 6839 (1971), which is the
relevant law governing the events at hand, abolished share tenancy
throughout the Philippines from 1971 and established the agricultural
leasehold system by operation of law. Section 7 of the said law gave
agricultural lessees security of tenure by providing the following: "The
agricultural leasehold relation once established shall confer upon the
agricultural lessee the right to continue working on the landholding until
such leasehold relation is extinguished. The agricultural lessee shall be
entitled to security of tenure on his landholding and cannot be ejected
therefrom unless authorized by the Court for causes herein provided."
2.
ID.; ID.; ID.; CIVIL LEASE CONTRACT GRANTING AUTHORITY
TO LESSEE TO OVERSEE FARMING DOES NOT EXTINGUISH
LEASEHOLD RELATION. The fact that the landowner entered into a civil
lease contract over the subject landholding and gave the lessee the
authority to oversee the farming of the land, as was done in this case, is not
among the causes provided by law for the extinguishment of the agricultural
leasehold relation. [Sec. 8. Extinguishment of Agricultural Leasehold
Relation. The agricultural leasehold relation established under this Code
shall be extinguished by: (1) Abandonment of the landholding without the
knowledge of the agricultural lessor; (2) Voluntary surrender of the
landholding by the agricultural lessee, written notice of which shall be
served three months in advance; or (3) Absence of the persons under
Section nine to succeed to the lessee in the event of death or permanent
incapacity of the lessee."] Hence, transactions involving the agricultural land
over which an agricultural leasehold subsists resulting in change of
ownership, e.g., sale, or transfer of legal possession, such as lease, will not
terminate the rights of the agricultural lessee who is given protection by the

law by making such rights enforceable against the transferee or the


landowner's successor in interest.
3.
ID.; ID.; ID.; ID.; FACT THAT AGRICULTURAL LESSEE
CONSENTED NOT A WAIVER OF HIS RIGHT AS SUCH; CASE AT BAR.
The fact that private respondent knew of, and consented to, the said
lease contract by signing as witness to the agreement may not be construed
as a waiver of his rights as an agricultural lessee. On the contrary, it was his
right to know about the lease contract since, as a result of the agreement,
he had to deal with a new person instead of with the owners directly as he
used to. No provision may be found in the lease contract and the renewal
contract even intimating that private respondent has waived his rights as an
agricultural lessee.
4.
ID.; ID.; ID.; AGRICULTURAL LESSEE NOT CREATED WITHOUT
OWNER'S CONSENT; RULE NOT APPLICABLE IN THE CASE AT BAR.
It is true that the Court has ruled that agricultural tenancy is not created
where the consent of the true and lawful owners is absent. But this doctrine
contemplates a situation where an untenanted farm land is cultivated
without the landowner's knowledge or against her will or although
permission to work on the farm was given, there was no intention to
constitute the worker as the agricultural lessee of the farm land. The rule
finds no application in the case at bar where the petitioners are successorsin-interest to a tenanted land over which an agricultural leasehold has long
been established. The consent given by the original owners to constitute
private respondent as the agricultural lessee of the subject landholding
binds private respondents who, as successors-in-interest of the Spouses
San Diego, step into the latter's shoes, acquiring not only their rights but
also their obligations.
5.
REMEDIAL LAW; PLEADINGS AND PRACTICE; ISSUES NOT
RAISED IN TRIAL COURT CANNOT BE RAISED FOR FIRST TIME ON
APPEAL. The Court, observes that nowhere in the petitioners' Answer to
private respondent's Complaint or in the other pleadings filed before the trial
court did petitioners allege grounds for the termination of the agricultural
leasehold. Well-settled is the rule that issues raised in the trial court cannot
be raised for the first time on appeal.

DECISION

ROMERO, J :
p

Assailed in this petition for review on certiorari is the decision of the Court of
Appeals in CA-G.R. No. 15724 dated April 26, 1989 1 reversing the judgment of
the Regional Trial Court of Tanauan, Batangas (Branch 6) in Civil Case No. T430 2 and holding that private respondent is an agricultural lessee in the land of
petitioner whose security of tenure must be respected by the latter.
The antecedent facts are as follows:
The Spouses Natividad Trinidad and Cesar San Diego owned a piece of
agricultural land consisting of 20,200 square meters situated at San Pioquinto,
Malvar, Batangas, devoted to rice and corn. As far back as 1934, private
respondent Fideli has been cultivating this land as a tenant of the Spouses San
Diego under a fifty-fifty (50-50) sharing agreement. This fact, petitioners do not
dispute.
On May 2, 1974, a lease contract was executed between the Spouses San
Diego and one Regino Cassanova for a period of four years from May 1974 up to
May 1978. 3 The lease contract obliged Cassanova to pay P400.00 per hectare
per annum and gave him the authority to oversee the planting of crops on the
land. 4 Private respondent signed this lease contract as one of two witnesses. 5
The lease contract was subsequently renewed to last until May 1980 but the
rental was raised to P600.00. Again, private respondent signed the contract as
witness. 6
During the entire duration of the lease contract between the Spouses San
Diego and Cassanova, private respondent continuously cultivated the land,
sharing equally with Cassanova the net produce of the harvests.
On January 6, 1980, the Spouses San Diego sold the land to petitioners for
the sum or P26,000.00. The sale was registered with the Register of Deeds of
Batangas and a Transfer Certificate of Title was duly issued on January 7,
1981. 7 Private respondent continued to farm the land although petitioners claim
that private respondent was told immediately after the sale to vacate the land. 8 In
any case, it is undisputed that private respondent deposited with the Luzon
Development Bank an amount of about P8,000.00 as partial payment of the
landowner's share in the harvests for the years 1980 until 1985. 9
Due to petitioners' persistent demand for private respondent to vacate the
land, private respondent filed in April 1985 a complaint 10 with the Regional Trial
Court of Tanauan, Batangas praying that he be declared the agricultural tenant of
petitioners.
After trial, the trial court decided in favor of petitioners by holding that private
respondent is not an agricultural lessee of the land now owned by petitioners.
The dispositive portion of the RTC decision reads:

"WHEREFORE, judgment is hereby rendered dismissing plaintiff's complaint


to be declared a tenant of the landholding consisting of 20,200 square meters,
located at San Pioquinto, Malvar, Batangas, and owned by the defendants;
ordering Pedro Fideli to vacate the landholding and deliver possession thereof
to the defendants; and ordering the amount of P8,000.00 deposited under
Account No. 2940029826 Civil Case No. T-430 to be withdrawn and delivered
to the defendants. No pronouncement as to costs."
On appeal, the Court of Appeals reversed the RTC decision and declared
private respondent to be the agricultural lessee of the subject landholding.
Hence, this petition wherein private respondent's status as an agricultural lessee
and his security of tenure as such are being disputed by petitioners.
Petitioners impugn the Court of Appeals' declaration that private respondent
is an agricultural lessee of the subject landholding contending that when the
original landowners, the Spouses San Diego, entered into a lease contract with
Regino Cassanova, the agricultural leasehold relationship between the Spouses
San Diego and private respondent, the existence of which petitioners do not
dispute, was thereby terminated. Petitioners argue that a landowner cannot have
a civil law lease contract with one person and at the same time have an
agricultural leasehold agreement with another over the same land. It is further
argued that because private respondent consented to the lease contract between
the Spouses San Diego and Cassanova, signing as he did the lease agreement
and the renewal contract as witness thereof, private respondent has waived his
rights as an agricultural lessee.
These contentions are without merit.
R.A. No. 3844 (1963), as amended by R.A. No. 6839 (1971), which is the
relevant law governing the events at hand, abolished share tenancy throughout
the Philippines from 1971 and established the agricultural leasehold system by
operation of law. 11 Section 7 of the said law gave agricultural lessees security of
tenure by providing the following: "The agricultural leasehold relation once
established shall confer upon the agricultural lessee the right to continue working
on the landholding until such leasehold relation is extinguished. The agricultural
lessee shall be entitled to security of tenure on his landholding and cannot be
ejected therefrom unless authorized by the Court for causes herein
provided." 12 The fact that the landowner entered into a civil lease contract over
the subject landholding and gave the lessee the authority to oversee the farming
of the land, as was done in this case, is not among the causes provided by law
for the extinguishment of the agricultural leasehold relation. 13 On the contrary,
Section 10 of the law provides:

"SECTION 10.
Agricultural Leasehold Relation Not Extinguished by
Expiration of Period, etc. The agricultural leasehold relation under this code
shall not be extinguished by mere expiration of the term or period in a
leasehold contract nor by the sale, alienation or transfer of the legal
possession of the landholding. In case the agricultural lessor sells, alienates
or transfers the legal possession of the landholding, the purchaser or
transferee thereof shall be subrogated to the rights and substituted to the
obligations of the agricultural lessor."
Hence, transactions involving the agricultural land over which an agricultural
leasehold subsists resulting in change of ownership, e.g., sale, or transfer of
legal possession, such as lease, will not terminate the rights of the agricultural
lessee who is given protection by the law by making such rights enforceable
against the transferee or the landowner's successor in interest.14
Illustrative of the legal principles outlined above is Catorce v. Court of
Appeals 15 where the person holding a mortgage over the farm land subject of an
agricultural leasehold took possession thereof pursuant to the mortgage and
ousted the agricultural lessee. Upon complaint for reinstatement filed by the
agricultural lessee, the then Court of Agrarian Relations ordered the mortgagee
to deliver possession over the land to the agricultural lessee but this decision
was reversed by the Court of Appeals. In reversing the Court of Appeals'
judgment and reinstating the Agrarian Court's decision, the Court, through
Justice Melencio-Herrera, noted, among other considerations, that "tenants are
guaranteed security of tenure, meaning, the continued enjoyment and
possession of their landholding except when their dispossession had been
authorized by virtue of a final and executory judgment, which is not so in the case
at bar." 16Implicit in the decision is the recognition that the transfer of possession
to the mortgagee did not terminate the agricultural leasehold nor prejudice the
security of tenure of the agricultural lessee.
Closer to, although not identical with the factual setting of the case at bar
is Novesteras v. Court of Appeals. 17 Petitioner in said case was a share tenant of
the respondent over two parcels of land. Respondent entered into a contract of
civil lease with Rosendo Porculas for a term of three years. Porculas did not farm
the land himself but left it to petitioner to till the land. After the expiration of the
lease between respondent and Porculas, petitioner entered into an agreement
denominated as a contract of civil lease with respondent. On expiration of this
lease contract, respondent denied petitioner possession over the land. Resolving
the rights and obligations of the parties, the Court, through Justice Paras, held
that the petitioner therein became an agricultural tenant of respondent by virtue
of R.A. No. 3844 (1963), as amended by R.A. No. 6839 (1971). The lease

contract between the respondent and Porculas did not terminate the agricultural
leasehold relationship between petitioner and respondent. If at all, the said lease
agreement, coupled by the fact that Porculas allowed petitioner to continue
cultivating in his capacity as tenant of the subject landholding, served to
strengthen petitioner's security of tenure as an agricultural tenant of the farmland
in question. Accordingly, the subsequent contract between petitioner and
respondent denominated as a contract of civil lease was held by the Court to be
in fact an agricultural leasehold agreement.
Again, in Coconut Cooperative Marketing Association, Inc. (COCOMA) v.
Court of Appeals, 18 it was held that the agricultural leasehold is preserved,
notwithstanding the transfer of the legal possession of the subject landholding,
with the transferee, COCOMA in that case, being accountable to the agricultural
lessees for their rights. The Court, through Justice Padilla, summarized the rule
as follows:

"There is also no question that, in this case, there was a transfer of the legal
possession of the land from one landholder to another (Fule to petitioner
COCOMA). In connection therewith, Republic Act 3344, Sec. 10 states:
'SECTION 10.
Agricultural Leasehold Relation Not
Extinguished by Expiration of Period, etc. The agricultural
leasehold relation under this Code shall not be extinguished by
mere expiration of the term or period in a leasehold contract nor
by the sale, alienation or transfer of the legal possession of the
landholding. In case the agricultural lessor sells, alienates or
transfers the legal possession of the landholdings, the purchaser
or transferee thereof shall be subrogated to the rights and
substituted to the obligations of the agricultural lessor.'
Further, in several cases, this Court sustained the preservation of the
landholder-tenant relationship, in cases of transfer of legal possession:
'. . . in case of transfer or in case of lease, as in the instant
case, the tenancy relationship between the landowner and his
tenant should be preserved in order to insure the well-being of
the tenant or protect him from being unjustly dispossessed by
the transferee or purchaser of the land; in other words, the
purpose of the law in question is to maintain the tenants in the
peaceful possession and cultivation of the land or afford them
protection against unjustified dismissal from their holdings.'
(Primero v. CAR, 101 Phil. 675);

'It is our considered judgment, since the return by the


lessee of the leased property to the lessor upon the expiration of
the contract involves also a transfer of legal possession, and
taking into account the manifest intent of the lawmaking body in
amending the law, i.e., to provide the tenant with security of
tenure in all cases of transfer of legal possession, that the
instant case falls within and is governed by the provisions of
Section 9 of Republic Act 1199, as amended by Republic Act
2263.' (Joya v. Pareja, 106 Phil. 645).
'. . . that the tenant may proceed against the transferee of
the land to enforce obligation incurred by the former landholder
in relation to said land, for the reason that such obligation.. falls
upon the assignee or transferee of the land pursuant to Sec. 9
abovementioned. Since respondents are in turn free to proceed
against the former landholder for reimbursement, it is not
iniquitous to hold them responsible to the tenant for said
obligations. Moreover, it is the purpose of Republic Act 1198,
particularly Sec. 8 thereof, to insure that the right of the tenant to
receive his lawful share of the produce of the land is
unhampered by the transfer of said land from one landholder to
another.' (Almarinez v. Potenciano, 120 Phil. 1154.)." 19
In the instant case, private respondent has been cultivating the subject farm
landholding with a fifty-fifty (50-50) sharing arrangement with the Spouses San
Diego, petitioners' predecessors-in-interest. The passage of R.A. 6839 in 1971,
amending R.A. 3844 (1963), secured to private respondent all the rights
pertaining to an agricultural lessee. The execution of a lease agreement between
the Spouses San Diego and Regino Cassanova in 1974 did not terminate private
respondent's status as an agricultural lessee. The fact that private respondent
knew of, and consented to, the said lease contract by signing as witness to the
agreement may not be construed as a waiver of his rights as an agricultural
lessee. On the contrary, it was his right to know about the lease contract since,
as a result of the agreement, he had to deal with a new person instead of with
the owners directly as he used to. No provision may be found in the lease
contract and the renewal contract even intimating that private respondent has
waived his rights as an agricultural lessee. Militating against petitioners' theory
that the agricultural leasehold was terminated or waived upon the execution of
the lease agreement between the San Diegos and Cassanova is the fact that the
latter desisted from personally cultivating the land but left it to private respondent
to undertake the farming, the produce of the land being shared between
Cassanova and private respondent, while the former paid P400.00 and later

P600.00 per hectare per annum to the San Diegos, as agreed upon in the lease
contract.
Petitioners, however, insist that private respondent can no longer be
considered the agricultural lessee of their farm land because after they
purchased the land from the Spouses San Diego in 1980, private respondent did
not secure their permission to cultivate the land as agricultural lessee.
It is true that the Court has ruled that agricultural tenancy is not created
where the consent of the true and lawful owners is absent. 20 But this doctrine
contemplates a situation where an untenanted farm land is cultivated without the
landowner's knowledge or against her will or although permission to work on the
farm was given, there was no intention to constitute the worker as the agricultural
lessee of the farm land. 21 The rule finds no application in the case at bar where
the petitioners are successors-in-interest to a tenanted land over which an
agricultural leasehold has long been established. The consent given by the
original owners to constitute private respondent as the agricultural lessee of the
subject landholding binds private respondents who, as successors-in-interest of
the Spouses San Diego, step into the latter's shoes, acquiring not only their rights
but also their obligations. 22
Contradicting their position that no agricultural leasehold exists over the land
they acquired from the Spouses San Diego, petitioners also pray for the
termination of the tenancy of private respondent allegedly due to: (a) nonpayment of the agricultural lease rental; and (b) animosity between the
landowners and the agricultural lessee. The Court, however, observes that
nowhere in the petitioners' answer to private respondent's Complaint or in the
other pleadings filed before the trial court did petitioners allege grounds for the
termination of the agricultural leasehold. Well-settled is the rule that issues not
raised in the trial court cannot be raised for the first time on appeal. 23
In fine, the Court, after a painstaking examination of the entire records of the
case and taking into account the applicable law, as well as the relevant
jurisprudence, rules that private respondent is the agricultural lessee over the
land owned by petitioners. As such, private respondent's security of tenure must
be respected by petitioners.
The Court, however, notes from the records of the case that private
respondent has unilaterally decided to pay only 25% of the net harvests to
petitioners. 24 Since the agreement of private respondent with the Spouses San
Diego, the original owners, was for a fifty-fifty (50-50) sharing of the net produce
of the land, the same sharing agreement should be maintained between
petitioners and private respondent, without prejudice to a renegotiation of the
terms of the leasehold agreement.

WHEREFORE, premises considered, the petition is DISMISSED and the


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

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


PEREZ, petitioners, vs. HON. COURT OF APPEALS, DELIA RAZON
PEA and RAYMUNDO EUGENIO, respondents.
DECISION
QUISUMBING, J.:

Petitioners Milestone Realty & Co., Inc. (Milestone for brevity) and William
Perez seek the reversal of the decision[1] 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
Pea as the bona fide tenant of a lot in Bulacan, and voided the sale of said lot thereby
reversing the decision of the Provincial Agrarian Reform Adjudicator (PARAD). [3]
The facts as culled from the records are as follows:
Spouses Alfonso Olympia and Carolina Zacarias and Spouses Claro Zacarias and
Cristina Lorenzo were the co-owners of an agricultural land identified as Lot 616 of
the Malinta Estate. Said lot has an area of 23,703 square meters, covered by Transfer
Certificate of Title (TCT) No. 26019, located at Karuhatan, Valenzuela, Bulacan, now
Valenzuela City. Eventually, Carolina became the owner of the property by 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
Alfonsos death and by an Affidavit of Settlement executed on June 24, 1992 by the
spouses Claro and Cristina Zacarias on their shares in the property.
Meanwhile, Anacleto Pea who was a tenant of the property and a holder of a
Certificate of Agricultural Leasehold issued on February 23, 1982, had a house
constructed on the lot. He had several children on the first marriage, among whom
are Emilio Pea and Celia Segovia, who also had their houses constructed on the
property. On February 4, 1986, Anacleto, who was already 78 years old and a
widower, married Delia Razon, then only 29 years old. On February 17, 1990,

Anacleto died intestate and was survived by Delia and his children in his first
marriage, including Emilio.
Emilio and Delia, the latter with the help of respondent Raymundo Eugenio, her
son-in-law, continued tilling and cultivating the property. On January 22, 1992,
Emilio signed a handwritten declaration that he was the tenant in the land and he was
returning the landholding to Carolina Zacarias in consideration of the sum of
P1,500,000 as disturbance compensation. He initially opted for a 1,000 square
meter homelot but later changed his mind. After receipt of the money, he executed a
Katibayang Paglilipat ng Pag-mamay-ari.
In the meantime, petitioner William Perez, Joseph Lim, Willy Lim, Winston Lim,
Edgar Lim, and Jaime Lim established Milestone as incorporators, in order to acquire
and develop the aforesaid property and the adjacent parcel, Lot No. 617 of the Malinta
Estate.
On July 30, 1992, Carolina Zacarias executed a deed of sale transfering the Lot
No. 616 to petitioner Milestone for P7,110,000. TCT No. 26019 was cancelled and in
lieu thereof, TCT No. 25433 was issued in the name of Milestone. On the same date,
the adjoining Lot No. 617 covered by TCT No. V-25431 was issued under the name
of petitioner William Perez who subsequently sold the same to Milestone on the basis
of which TCT No. V-26481 was issued to it. Thus, Milestone became the owner of
the adjoining lots, Lot Nos. 616 and 617 of the Malinta Estate with a total area of
three (3) hectares. Development of the property then commenced.
On October 13, 1992, private respondents Delia Razon Pea and Raymundo
Eugenio filed a complaint against Emilio Pea, Carolina Zacarias and her brother
Francisco Olympia, and William Perez with the PARAD, which was amended on
January 6, 1993 to implead Milestone as respondent, praying inter alia to declare as
null and void the sale by Carolina to Perez and by the latter to Milestone, and to
recognize and respect the tenancy of private respondents Delia and Raymundo.
In her answer, Carolina Zacarias declared that she chose Emilio Pea as her
tenant-beneficiary on the said property within 30 days after the death of Anacleto,
conformably with Section 9 of Republic Act No. 3844. [4]On July 28, 1993, the
PARAD rendered a decision dismissing the complaint as follows:[5]
WHEREFORE, upon the foregoing premises, judgment is hereby rendered:
1. Dismissing the instant complaint;
2. Dissolving the writ of Preliminary Injunction issued on May 24, 1993;
3. Directing the Cashier of the DAR Regional Office at Pasig, Metro Manila to release to the
Petitioners or their duly authorized representative, the cash bond posted in the amount of
Fifteen Thousand Pesos [P15,000.00].

4. No pronouncement as to costs.

SO ORDERED.
In the decision, the PARAD ruled that the order of preference cited in Section 9 of
Republic Act 3844 is not absolute and may be disregarded for valid cause. [6] It also
took note that Emilios two siblings have openly recognized Emilio as the legitimate
successor to Anacletos tenancy rights.[7]
Delia Razon Pea and Raymundo Eugenio appealed from the PARADs decision
to the DARAB. On September 5, 1995, the DARAB reversed the decision of
PARAD, the dispositive portion of which reads as follows:
WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The
Decision dated July 28, 1993 is REVERSED.
Judgment is issued:
1. Declaring Delia Razon Pea the bona-fide tenant over the landholding in question;
2. Declaring the series of purchase and sale of the landholding in question as illegal, hence, null
and void;
3. Directing the Register of Deeds to cancel TCT No. V-26485 and all subsequent titles
obtained thereafter over the landholding named under William L. Perez and Milestone
Realty and Co., Inc.;
4. Allowing Delia Razon Pea to exercise her right of redemption over the land within the
prescribed period granted by law;
5. Enjoining all Respondents-Appellees to desist from further disturbing Delia Razon Pea in
the peaceful possession and cultivation of the land;
6. Directing the DAR-DOJ Task Force on Illegal Conversion to file appropriate charges before
the Special Agrarian Court as regards the criminal aspect of this case.

SO ORDERED. [8]
In reversing the PARADs decision, the DARAB noted that Carolinas 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 Pea which could only mean that she recognized Emilio Pea by
force of circumstance under a nebulous time frame.[9]
In a petition for review to the Court of Appeals, the latter affirmed the DARABs
decision, thus:

We are convinced, beyond cavil, in the present recourse, that the Petitioners Carolina
Olympia and Francisco Olympia failed to choose, within the statutory period therefor,
any tenant in substitution of Anacleto Pea, the erstwhile deceased tenant on the
landholding, and that, without prior or simultaneous notice to Private Respondent
Delia Pea, the Petitioners made their choice of Petitioner Emilio Pea as substitute
tenant only in January, 1992, after they had agreed to sell the property to the
Petitioner Milestone Realty & Co., Inc.
IN SUM, then, We find no reversible error committed by the DARAB under its
oppunged Decision.
IN THE LIGHT OF ALL THE FOREGOING, the Petition is denied due course and is
hereby dismissed. The appealed Decision is hereby AFFIRMED. With costs against
the Petitioners.
SO ORDERED.[10]
Subsequently, petitioners filed a Motion for Reconsideration of the CAs
decision. Said motion was denied on October 12, 1998.
Hence, this petition assigning the following errors allegedly committed by
respondent Court of Appeals:[11]
I

THE RESPONDENT COURT OF APPEALS ERRED WITH GRAVE ABUSE


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

THE RESPONDENT COURT OF APPEALS ERRED IN DECLARING THE


SALE BY THE LANDOWNER TO PETITIONER WILLIAM L. PEREZ, AND
BY THE LATTER TO PETITIONER MILESTONE REALTY & CO., INC. AS
NULL AND VOID, AND IN ORDERING THE CANCELLATION OF THEIR
RESPECTIVE TITLES.[12]
These two assigned errors tendered issues articulated in petitioners memorandum
as follows:

1. Whether or not Emilio Pea was validly chosen by Carolina Zacarias as the
new tenant over the landholding under dispute within one (1) month from the death of
his father Anacleto, as prescribed by Section 9 of R.A. 3844, as amended;
2. Whether or not Delia Razon Pea was a bona fide or de jure tenant over the
landholding in question to be accorded the alleged rights to security of tenure and of
redemption under the agrarian reform laws;
3. Whether or not Emilio Pea validly renounced or otherwise caused the
extinction of his tenancy rights over the subject property;
4. Whether or not the sales of the subject property by Carolina Zacarias to
William Perez and by the latter to Milestone were null and void, hence merited the
declaration of nullity and cancellation of the respondents respective titles;
5. Whether or not illegal conversion was committed by Milestone.
In sum, we find the following relevant issues now for our resolution:
1. Whether or not Delia Razon Pea has a right of first priority over Emilio Pea
in succeeding to the tenancy rights of Anacleto over the subject landholding.
2. Whether or not the sales of the subject lots by Carolina Zacarias to William
Perez and then to Milestone are null and void.
At the outset, it bears stressing that there appears to be no dispute as to tenancy
relationship between Carolina Zacarias and the late Anacleto Pea. The controversy
centers on who is the rightful and legal successor to Anacletos tenancy
rights. Relevant to the resolution of the first issue is Section 9 of Republic Act No.
3844, otherwise known as the Code of Agrarian Reforms, which provides as follows:
SEC. 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of
the Parties. - In case of death or permanent incapacity of the agricultural lessee to
work his landholding, the leasehold shall continue between the agricultural lessor and
the person who can cultivate the landholding personally, chosen by the agricultural
lessor within one month from such death or permanent incapacity, from among the
following: (a) the surviving spouse; (b) the eldest direct descendant by consanguinity;
or (c) the next eldest descendant or descendants in the order of their
age: Provided, That in case the death or permanent incapacity of the agricultural
lessee occurs during the agricultural year, such choice shall be exercised at the end of
that agricultural year: Provided, further, That in the event the agricultural lessor fails
to exercise his choice within the periods herein provided, the priority shall be in
accordance with the order herein established.
In case of death or permanent incapacity of the agricultural lessor, the leasehold shall
bind his legal heirs.

Petitioners contend that Section 9 does not require any form or manner in which
the choice should be made.[13] They assail the Court of Appeals for heavily relying on
the findings of the DARAB that there was no convincing proof that Carolina
exercised her right to choose from among the qualified heirs a replacement for the
deceased tenant,[14] when in fact a choice was made. In support thereof, petitioners
invoke Carolinas affidavit and her Answer to the complaint in the PARAD, both
dated November 16, 1992 where Carolina recognized Emilio Pea as the successor to
Anacletos tenancy rights. Petitioners argued that Delia could not have qualified as a
successor-tenant to Anacleto due to lack of personal cultivation.[15] Further, she had not
been paying rent on the land.
Responding to petitioners contentions, respondents argue that Carolina did not
choose the successor to Anacletos tenancy rights within one month from the death of
Anacleto. Respondents note that it was only after the lapse of two (2) years from the
death of Anacleto on February 17, 1990, that both Carolina and Emilio claimed in
their respective affidavits that Emilio inherited the rights of Anacleto as a
tenant.[16] According to respondents, such inaction to make a choice within the time
frame required by law is equivalent to waiver on Carolinas part to choose a substitute
tenant.[17] Also, it appears that Carolina made the choice in favor of Emilio Pea only
by force of circumstance, i.e., when she was in the process of negotiating the sale of
the land to petitioners Perez and Milestone.[18]
On this score, we agree with private respondents. As found by both the DARAB
and the Court of Appeals, Carolina had failed to exercise her right to choose a
substitute for the deceased tenant, from among those qualified, within the statutory
period.[19] No cogent reason compels us to disturb the findings of the Court of
Appeals. As a general rule, findings of fact of the Court of Appeals are final and
conclusive and cannot be reviewed on appeal by the Supreme Court, provided they are
borne out by the record or based on substantial evidence.[20]
Section 9 of Republic Act No. 3844 is clear and unequivocal in providing for the
rules on succession to tenancy rights. A close examination of the provision leaves no
doubt as to its rationale of providing for continuity in agricultural leasehold relation in
case of death or incapacity of a party. To this end, it provides that in case of death or
permanent incapacity of the agricultural lessee to work his landholding, the leasehold
shall continue between the agricultural lessor and the person who can cultivate the
landholding personally. In the same vein, the leasehold shall bind the legal heirs of
the agricultural lessor in case of death or permanent incapacity of the latter. It is to
achieve this continuity of relationship that the agricultural lessor is mandated by law
to choose a successor-tenant within one month from the death or incapacity of the
agricultural lessee from among the following: (1) surviving spouse; (2) eldest direct
descendant by consanguinity; or (3) the next eldest direct descendant or descendants
in the order of their age. Should the lessor fail to exercise his choice within one

month from the death of the tenant, the priority shall be in accordance with the
aforementioned order. In Manuel vs. Court of Appeals,[21] we ruled that:
Agricultural leasehold relationship is not extinguished by the death or incapacity of
the parties. In case the agricultural lessee dies or is incapacitated, the leasehold
relation shall continue between the agricultural lessor and any of the legal heirs of the
agricultural lessee who can cultivate the landholding personally, in the order of
preference provided under Section 9 of Republic Act 3844, as chosen by the lessor
within one month from such death or permanent incapacity. Since petitioner Rodolfo
Manuel failed to exercise his right of choice within the statutory period, Edwardos
widow Enriqueta, who is first in the order of preference and who continued
working on the landholding upon her husbands death, succeeded him as
agricultural lessee. Thus, Enriqueta is subrogated to the rights of her husband and
could exercise every right Eduardo had as agricultural lessee, including the rights of
pre-emption and redemption.
Applying Section 9 of Republic Act 3844, in the light of prevailing jurisprudence,
it is undeniable that respondent Delia Razon Pea, the surviving spouse of the original
tenant, Anacleto Pea, 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 Anacletos death.
Petitioners cannot find succor in the declarations of Emilio Pea and the affidavit
of Carolina Zacarias, stating that Emilio succeeded to the tenancy rights of
Anacleto. In the first place, Carolinas 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 Carolinas
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 Pea, prompting the DARAB
to conclude it merely connotes that she recognized Emilio Pea by force of
circumstance under a nebulous time frame.[22]
Petitioners further argue that Delia cannot qualify as tenant even on the
assumption that she was the rightful successor to Anacletos tenancy rights, because
she did not personally cultivate the land and did not pay rent. In essence, petitioners
urge this Court to ascertain and evaluate certain material facts which, however are not
within the province of this Court to consider in a petition for review. Determination
of personal cultivation and rental payments are factual issues beyond the reach of this
petition. Well established is the rule that in an appeal via certiorari, only questions of
law may be reviewed.[23]

On the second issue, however, we are unable to agree with the ruling of
respondent Court of Appeals and of DARAB that the sale of the land in question
should be declared null and void. There is no legal basis for such declaration. Lest it
be forgotten, it is Carolina Zacarias who is the owner of the subject land and both
Emilio Pea and Delia Razon Pea only succeeded to the tenancy rights of Anacleto.
As an owner, Carolina has the right to dispose of the property without other
limitations than those established by law.[24] This attribute of ownership is impliedly
recognized in Sections 10, 11 and 12 of Republic Act No. 3844, [25] where the law
allows the agricultural lessor to sell the landholding, with or without the knowledge of
the agricultural lessee and at the same time recognizes the right of preemption and
redemption of the agricultural lessee. Thus, the existence of tenancy rights of
agricultural lessee cannot affect nor derogate from the right of the agricultural lessor
as owner to dispose of the property. The only right of the agricultural lessee or his
successor in interest is the right of preemption and/or redemption.
In the case at bar, it is undisputed that Carolina became the absolute owner of the
subject landholding by virtue of Deed of Extrajudicial Settlement and Affidavit of
Settlement executed by the other heirs of Alfonso Olympia and Spouses Claro and
Cristina Zacarias. As the owner, it is within her right to execute a deed of sale of said
landholding, without prejudice however to the tenancy rights and the right of
redemption of Delia Razon Pea. In Manuel,[26] we held that the tenancy relationship
is not affected or severed by the change of ownership. The new owner is under the
obligation to respect and maintain the tenants landholding. In turn, Delia Razon
Pea, as the successor tenant, has the legal right of redemption. This right of
redemption is statutory in character. It attaches to a particular landholding by
operation of law.[27]
Finally, as to the question of illegal conversion of the land, suffice it to state that
such determination is not within the jurisdiction of this Court and is not proper in a
petition for review on certiorari as it requires evaluation and examination of pertinent
facts.
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed decision
of the Court of Appeals in CA-G.R. SP No. 39987 is AFFIRMED in so far as it
recognizes Delia Razon Pea as the successor of Anacleto Pea as the tenant, thereby
allowing her to exercise her right of redemption over the land within the prescribed
period granted by law. However, said decision is REVERSED and SET
ASIDE insofar as it declared the sale of said landholding null and
void. IN LIEU THEREOF, SAID SALE BY CAROLINA ZACARIAS IS HEREBY
DECLARED VALID, SUBJECT TO THE TENANCY RIGHTS AND RIGHT OF
REDEMPTION by the TENANT-LESSEE, private respondent Delia Razon Pea.
No pronouncements as to costs

SYLLABUS

1.
AGRICULTURAL TENANCY; PRESCRIPTION OF ACTION FOR
VIOLATION OF SECURITY OF TENURE OF TENANT. A tenant's right
to be respected in his tenure under Republic Act 1199, as amended, is an
obligation of the landholder created by law, and an action for violation
thereof prescribes in ten years under No. 2 of Article 1144 of the Civil Code.
2.
ID.; EJECTED TENANT'S EARNINGS ELSEWHERE NOT
DEDUCTED FROM DAMAGES. Under section 27 (1) of Republic Act
1199, as amended, an illegally ejected tenant's earnings elsewhere may not
be deducted from but is to be added to the damages granted him upon
reinstatement.

DECISION

REYES, J.B.L., J :
p

Review of the decision of the Court of Agrarian Relations, Cabanatuan City,


in its Case No. 2088-NE-60, the dispositive portion of which reads:

"WHEREFORE, judgment is hereby rendered ordering respondent


Quirino Capalad to pay the petitioners as follows:
1.
2.
3.
4.
5.
6.
7.

Jose Aguilar
Agapito Neuda
Sixto Malarulat
Rafael Alamon
Petronilo Aguilar
Eulogio Samaniego
Castor Rufino

P297.00
264.75
264.25
164.00
335.25
219.00
234.00.

The following respondents are hereby ordered to vacate their respective


landholdings in favor of the petitioners, subject to the provisions of pars.
3 and 4, Sec. 22 R.A. No. 1199, as amended, the indemnity in the
aforestated paragraphs, supra, shall be paid by respondent Quirino
Capalad:
Respondents
1.
2.
3.

Alejo Pramel
Severino Padilla
Domingo Villaviza

Petitioners
1.
2.
3.

Jose Aguilar
Agapito Neuda
Rafael Alamon

4.
5.
6.
7.

Marcelo Villaviza
Cirilo Ramos
Ciriaco Pizaro
Cesario Villaviza
Ben Morelos
Juan Morelos

4.
5.
6.
7.

Petronilo Aguilar
Eulogio Samaniego
Castor Rufino
Sixto Malarulat

SO ORDERED."
The lower court found that the above-named respondents (petitioners below)
were tenants since 1944 in a riceland situated in Aliaga, Nueva Ecija, and owned
by Domingo Fajardo. Fajardo gave out the land for lease (civil lease) to the
petitioner, Quirino Capalad, starting with the crop year 1955-56. The said lessee,
in June, 1955, plowed the land by machinery, and installed, as his tenants, his
above-named co-petitioners in this Court, so that when the respondents went
back to their respective landholdings to prepare them for planting they found the
land already cultivated. The respondents- tenants demanded their reinstatement, but every time they did, which they did yearly until the present suit
was filed, Quirino Capalad promised, but never fulfilled, to reinstate them for the
agricultural year following said demands.
As grounds for the petition for review, the petitioners claim grave abuse of
discretion by the Agrarian Court and a lack of substantive evidence to support its
findings.
The above claim is wild and reckless and definitely without merit, since the
decision itself contains the recitals of the testimonies of the witnesses upon
which the court based its findings, and the petitioners do not question the
existence and adequacy of these testimonies. That the court believed the
evidence for the respondents, rather than those for the petitioners is the tenancy
court's prerogative, and, as a reviewing court, the Supreme Court will not weigh
anew the evidence all that this Court is called upon to do, insofar as the evidence
is concerned, is to find out if the conclusion of the lower court is supported by
substantive evidence; and the present case is, as hereinbefore explained.
A tenant's right to be respected in his tenure under Republic Act 1199, as
amended, is an obligation of the landholder created by law and an action for
violation hereof prescribes in ten years under No. 2 of Article 1144 of the Civil
Code. The respondents were ousted from their landholdings in June, 1955, and
they filed the present action on 31 March 1960; therefore, the period of limitation
had not expired.
The tenancy court found that the ejected tenants-respondents have engaged
in gainful occupations since their illegal ejectment and had delayed the filing of
the case, and for these reasons the court made an award for damages against

Quirino Capalad equivalent to only two harvests based on the landholder's share
for the crop year 1954-1955.
The premises for the award are erroneous. Under section 27(1) of Republic
Act 1199, as amended, a tenant's earnings may not be deducted from the
damages because the said section positively provides that the tenant's freedom
to earn elsewhere is to be added ("in addition") to his right to damages in case of
illegal ejectment (Lustre, et al. vs. CAR, et al., L-19654, March 21, 1964). Nor
can it be said that the respondents-tenants are guilty of laches for having
unnecessarily delayed the filing of the case, because the delay was attributed to
Capalad's promises to reinstate them.
The amount of the award to each respondent should not, however be
disturbed because the respondents non-appeal from the decision indicates their
satisfaction therewith and a waiver of any amounts other than those indicated in
the decision (David v. de la Cruz, et al., L-11656, 18 April 1958; Dy, et al.
vs. Kuizon, L-16654, 30 Nov. 1961).
FOR THE FOREGOING CONSIDERATIONS, the decision under review is
hereby affirmed, with costs against the petitioners.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera,
Paredes, Dizonand Makalintal, JJ., concur.

PABLO BASBAS, plaintiff-appellant,


vs.
RUFINO ENTENA, FLAVIANO TIBAY and ANGELINA ENTENA (Spouses), and R. M.
RESURRECCION as acting Registrar of Deeds of the Province of Laguna, defendantsappellees.
Sabio, Bonifacio and De Jesus for plaintiff-appellant.
Domingo T. Zaballa for defendants-appellees.
REYES, J.B.L., J.:
This is an appeal from the decision of the Court of Agrarian Relations, in CAR Case No. 1478,
Laguna '65, on the sole question of whether tender of payment and judicial consignation of the
purchase price are necessary before a tenant-lessee may avail himself of the right of pre-emption or
of redemption provided in Sections 11 and 12 of the Agricultural Land Reform Code.

In the action filed by tenant Pablo Basbas in the Court of Agrarian Relations against the alleged
landholder or landholders Rufino Entena and the spouses Flaviano Tibay and Angelina Entena, the
parties agreed to stipulate on the following facts:
1. That plaintiff Pablo Basbas is the leasehold tenant of a 1- hectare parcel of riceland,
known as Lot No. 1520 of the Sta. Rosa Estate Subdivision, located at Barrio Dila, Sta.
Rosa, Laguna, formerly owned by defendant Rufino Entena and presently owned by spouses
Flaviano Tibay and Angelina Entena, his co-defendants.
2. That on April 11, 1964, defendant Rufino Entena executed a deed of sale of the
aforementioned lot in favor of defendant spouses Flaviano Tibay and Angelina Entena.
3. That on May 25, 1964, defendant Rufino Entena sent a letter, marked as Exhibit 'I', to
plaintiff, to which the latter sent a reply dated June 4, 1964, marked as Exhibit 'A'.
4. That under date of June 4, 1964, plaintiff wrote a letter, marked as Exhibit 'B', to the
Governor of the Land Authority, to which he received a reply from the Acting Officer in
Charge of the Land Authority, dated June 22, 1964, which is marked as Exhibit 'C', of which
reply (Exhibit 'C') defendants have not been given copy or otherwise informed.
5. That the deed of sale mentioned in paragraph 2 hereof, was registered in the office of the
register of deeds of Laguna on May 26, 1964. The certification of the Register of Deeds
respecting said sale is marked as Exhibit 'D'.
6. That defendant Rufino Entena and his wife Aniceta Carapatan executed an affidavit, dated
April 11, 1964, marked as Exhibit 'I' defendant Register of Deeds.
7. That defendant spouses Flaviano Tibay and Angelina Entena are son-in-law and
daughter, respectively, of defendant Rufino Entena, and said spouses live separately from
their father.
8. That plaintiff has not deposited any sum of money in this Court to cover the pre-emption or
redemption price.
Exhibit 'I' mentioned above (No. 3, Stipulation) refers to a letter sent by Rufino Entena to the tenant,
to the effect that the landholding was being put up for sale at P13,000.00 per hectare and the tenant
being given 90 days within which to communicate his intention to purchase the same: otherwise, the
land would be offered to other buyers (page 1 folder of exhibits). Exhibit "A" (No. 3, Stipulation) is the
tenant's reply to the landholder dated June 4, 1964, accepting the latter's offer to sell the land,
although disagreeing to the quoted price therefor. The tenant in the same letter informed the
landholder that he was enlisting the aid of the government in purchasing the land, as allowed by law.
Exhibit "3" (No. 4, Stipulation) is the tenant's letter of June 4, 1964 addressed to the Governor of the
Land Authority, asking the help of said agency to acquire the land he was working on and which was
being offered for sale. Exhibit "C" (No. 4, Stipulation) is the answer of the Acting Officer in Charge of
the Land Authority, informing the tenant that his petition was already being processed and definite
action thereon will be taken as soon as the Land Bank shall have been fully organized. Exhibit "1Register of Deeds" (No. 6, Stipulation) is the sworn affidavit of the spouses Rufino Entena and
Aniceta Carapatan, dated April 11, 1964, attesting to the alleged fact that the tenant, Pablo Basbas,
was fully notified of the sale of their land 90 days before said conveyance, and that the tenant had
refused, or failed to exercise, the right of pre-emption granted him under the Agricultural Land
Reform Code (page 6, folder of exhibits). The submission of this affidavit enabled the registration on
May 26, 1964 of the deed of sale in favor of vendees Flaviano Tibay and Angelina Entena.

On the basis of the aforequoted stipulation of facts, the Agrarian Court dismissed the case,
reasoning that as the plaintiff failed to make tender of payment and consignation of the purchase
price the landowner cannot be compelled to sell the property to him. Plaintiff-tenant thus interposed
the present appeal.
The appellant-tenant's claim to preference in purchasing the land he is working on, in case the said
land is to be sold, or to his right to redeem it in 2 years should the land be sold without his
knowledge, is predicated upon Sections 11 and 12 of the Agricultural Land Reform Code (Republic
Act 3844):
SEC. 11. Lessee's Right of Pre-emption. In case the agricultural lessor decides to sell the
landholding, the agricultural lessee shall have the preferential right to buy the same under
reasonable terms and conditions: Provided, That the entire landholding offered for sale must
be pre-empted by the Land Authority if the owner so desires unless the majority of the
lessees object to such acquisitions: Provided, further, That where there are two or more
agricultural lessees, each shall be entitled to said preferential right only to the extent of the
area actually cultivated by him. The right of pre-emption under this section may be exercised
within ninety days from notice in writing, which shall be served by the owner an all lessees
affected.
SEC. 12. Lessee's Right of Redemption. In case the landholding is sold to a third person
without the knowledge of the agricultural lessee, the latter shall have the right to redeem the
same at a reasonable price and consideration: Provided, That the entire landholding sold
must be redeemed: Provided, further, That where there are two or more agricultural lessees,
each shall be entitled to said right of redemption only to the extent of the area actually
cultivated by him. The right of redemption under this Section may be exercised within two
years from the registration of the sale, and shall have priority over any other right of legal
redemption.
The case herein, which positively is an exercise by the tenant of his right to redeem the
landholding, 1 was nevertheless dismissed, the Agrarian Court considering as fatal the tenant's failure
to tender payment or consign the purchase price of the property.
It is argued for the appellant-lessee that the Court of Agrarian Relations erred in dismissing the
action for non-tender of the redemption price, since the law nowhere requires such tender, and,
furthermore, the tenant is not bound to redeem his landholding at the price for which it was sold, but
only at a reasonable price and consideration.
We find that no error was committed in dismissing the case. In the first place, there is no showing
that the Land Reform Council has proclaimed that the government machineries and agencies in the
region are already operating, as required by section 4 of Republic Act 3844.
In the second place, granting that sections 11 and 12 are operative, yet in Torres de Conejero, et al.
vs. Court of Appeals, et al., L-21812, April 29, 1966, 16 SCRA 775, this Court ruled that the timely
exercise of the right of legal redemption requires either tender of the price or valid consignation
thereof. Said the Court in said case (16 SCRA pages 781-782):
It is not difficult to discern why the redemption price should either be fully offered in legal
tender or else validly consigned in court. Only by such means can the buyer become certain
that the offer to redeem is one made seriously and in good faith. A buyer can not be
expected to entertain an offer of redemption without attendant evidence that the
redemptioner can, and is willing to accomplish the repurchase immediately. A different rule

would leave the buyer open to harassment by speculators or crackpots, as well as to


unnecessary prolongation of the redemption period, contrary to the policy of the law. While
consignation of the tendered price is not always necessary because legal redemption is not
made to discharge a pre-existing debt (Asturias Sugar Central vs. Cane Molasses Co., 60
Phil. 253), a valid tender is indispensable, for the reasons already stated. Of course,
consignation of the price would remove all controversy as to the redemptioner's ability to pay
at the proper time.
This Court further elaborated the point in its ruling on the motion to reconsider in the Torres case (16
SCRA, pages 783-784):
3. Whether or not the petitioners exercised diligence in asserting their willingness to pay is
irrelevant. Redemption by the co-owners of the vendor within 30 days is not a matter of
intent, but is effectuated only by payment, or valid tender, of the price within said period. How
the redemptioners raise the money is immaterial; timeliness and completeness of payment or
tender are the things that matter.
4. The offer of the redemption price is not bona fide where it is shown that the offerer could
not have made payment in due time if the offer had been accepted. Note that the co-owners'
right to redeem, being granted by law, is binding on the purchaser of the undivided share by
operation of law, and the latter's consent or acceptance is not required for the existence of
the right of redemption. The only matter to be investigated by the courts, therefore, is the
timely exercise of the right, and the only way to exercise it is by a valid payment or tender
within the 30 days Prefixed by the Civil Code.
That the legal redemptioner is only required to pay a reasonable price is no obstacle to the
requirement of tender, as ruled also in the Torres case (16 SCRA, page 781):
It is, likewise, argued that tender of the price is excused because Article 1620 of the new
Civil Code allows the redemptioner to pay only a reasonable price if the price of alienation is
grossly excessive, and that the reasonableness of the price to be paid can only be
determined by the courts. We think that the right of a redemptioner to pay a reasonable price
under Article 1620 does not excuse him from the duty to make proper tender of the price that
can be honestly deemed reasonable under the circumstances, without prejudice to final
arbitration by the courts; nor does it authorize said redemptioner to demand that the vendee
accept payment by installments, as petitioners have sought to do.
In our opinion, the foregoing considerations are applicable to redemption (and pre-emption) under
sections 11 and 12 of the Land Reform Act. Both under said law and under Article 1620 of the Civil
Code, the right of legal redemption must be exercised within specified time limits: and the statutory
periods would be rendered meaningless and of easy evasion unless the redemptioner is required to
make an actual tender in good faith of what he believed to be the reasonable price of the land
sought to be redeemed. The existence of the right of redemption operates to depress the market
value of the land until the period expires, and to render that period indefinite by permitting the tenant
to file a suit for redemption, with either party unable to foresee when final judgment will terminate the
action, would render nugatory the period of two years fixed by the statute for making the redemption
and virtually paralyze any efforts of the landowner to realize the value of his land. No buyer can be
expected to acquire it without any certainty as to the amount for which it may be redeemed, so that
he can recover at least his investment in case of redemption. In the meantime, the landowner's
needs and obligations cannot be met. It is doubtful if any such result was intended by the statute,
absent clear wording to that effect.
1aw phil.nt

The situation becomes worse when, as shown by the evidence in this case, the redemptioner has no
funds and must apply for them to the Land Authority, which, in turn, must depend on the availability
of funds from the Land Bank. It then becomes practically certain that the landowner will not be able
to realize the value of his property for an indefinite time beyond the two years redemption period.
The appellant herein, like the appellants in the Torres case, urge that this Court has ruled that
previous tender of the redemption money is not indispensable in De la Cruz vs. Marcelino, 84 Phil.
709, and Torio vs. Del Rosario, 93 Phil. 800. It was, however, pointed out in the Torres decision that
in the two cases relied upon by appellant the redemptioners had consigned or deposited in court the
redemption price when action was filed, for which reason prior tender was held excused. In the case
now before us, there was neither prior tender nor did judicial consignation accompany the filing of
the suit. Furthermore, in the cases aforesaid, the Court took into account the brevity of the periods (9
days) allowed by the law operating at the time (Civil Code of 1889); in the case at bar the statute
grants the tenant two years to redeem.
It may be added that unless tender or consignation is made requisite to the valid exercise of the
tenant's right to redeem, everytime a redemption is attempted, a case must be filed in court to
ascertain the reasonable price. On the other hand, a prior tender by the tenant of the price that he
considers reasonable affords an opportunity to avoid litigation, for the landowner may well decide to
accept a really reasonable offer, considering that he would thereby save the attorney's fees and the
expense of protracted litigation.
Section 74 of the Land Reform Act (Republic Act No. 3844) establishes a "Land Bank of the
Philippines" intended "to finance the acquisition by the Government of landed estates for division
and resale to small landholders, as well as the purchase of the landholding by the agricultural lessee
from the landowner." No expression in this part of the law, however, indicates, or even hints, that the
2-year redemption period will not commence to ran until the tenant obtains financing from the Land
Bank, or stops the tenant from securing redemption funds from some other source. The
considerations expressed in this decision on the confiscatory result of requiring the landowner to
wait an indefinite time until the lessee acquires the means for making the redemption militate against
construing the statement of purposes for which the Land Bank is created (section 74) as condition
precedent to the alienation of a landholding.
WHEREFORE, the appealed order granting the motion to dismiss the complaint is affirmed. No
costs.
Concepcion, C.J., Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano,Teehankee and
Barredo, JJ., concur.
Dizon, J., took no part.
Footnotes
1

When the tenant was notified on May 25, 1964 that the landholding was for sale, the same
property was already conveyed in favor of the spouses Flaviano Tibay and Angelina Entena.

The Case

Before the Court is a petition for review[1] of the Decision[2] of the Court of
Appeals promulgated on 31 August 2000 in CA-G.R. SP No. 48823. The Court of
Appeals affirmed the decision of the Department of Agrarian Reform Adjudication
Board ordering petitioners to respect respondents possession and cultivation of the
land.

The Antecedents

Petitioners Norma Tan, Jeanette Tan, Julieta Tan, Rommel[3] Tan and
Enrique Tan, Jr. (Tan Heirs) are co-owners of a coconut farmland (Land)
located at Labo, Ozamis City with an area of 25,780 square meters.[4]
Esteban Pollescas (Esteban) was the original tenant of the Land. Upon
Estebans death in 1991, his son Enrique Pollescas (Enrique) succeeded him and
was appointed as tenant by the landowner Enrique Tan (Tan).[5]
However, respondent Reynalda Pollescas (Reynalda), Estebans surviving
second spouse, demanded that Tan recognize her as Estebans successor. Tan did
not accede. Thus, Reynalda filed with the Department of Agrarian Reform
Adjudication Board of Ozamis City (DARAB-Ozamis) a complaint for
Annulment of Compromise Agreement, Quieting of Tenancy Relationship and
damages.[6]
In its Decision dated 28 April 1993, the DARAB-Ozamis declared Reynalda
as the lawful tenant of the Land. The DARAB-Ozamis apportioned the harvests

between the Tan Heirs and Reynalda based on the customary sharing system which
is 2/3 to the landowner and 1/3 to the tenant.[7]
On the following harvest dates, 11 and 19 of June, 9 September, 6 and 13 of
December 1993, Reynalda failed to deliver to the Tan Heirs 2/3 of the harvests
amounting toP3,656.70. The Tan Heirs demanded Reynalda to pay such
amount.[8] However, Reynalda ignored the demand.
Consequently, the Tan Heirs filed a complaint for estafa against Reynalda
with the Municipal Trial Court in Cities, Ozamis City, Branch 2.[9] The trial court
found Reynalda guilty of estafa[10] and sentenced her to five months of arresto
mayor maximum to two years of prision correccional minimum and ordered her to
pay the Tan Heirs P3,656.70, the amount which she misappropriated.[11]
Subsequently, for Reynaldas continued failure to deliver their share, the
Tan Heirs filed with the DARAB, Misamis Occidental (DARAB-Misamis
Occidental) an ejectment case.[12]
On 18 September 1996, the DARAB-Misamis Occidental[13] ruled in favor
of the Tan Heirs. The DARAB-Misamis Occidental disposed of the case in this
wise:
WHEREFORE, premises considered, decision is hereby rendered
terminating the tenancy relationship of herein parties.
Consequently, respondent Reynalda Pollescas is ordered to vacate
the subject landholding and turn-over its possession and cultivation to
the plaintiffs.
The MARO of Ozamis City is likewise ordered to investigate and
verify in the subject landholding if there are actual farmer-cultivators in

the area who may qualify as lessees thereof, who then should be placed
under leasehold pursuant to the mandate of Section 12, R.A. 6657.
SO ORDERED.[14]

Aggrieved by the decision, Reynalda appealed to the DARAB, Diliman,


Quezon City (DARAB). The DARAB reversed the decision of the DARABMisamis Occidental, to wit:
WHEREFORE, premises considered, the appealed decision dated
18 September 1996 is hereby REVERSED and SET ASIDE and a new
one is rendered ordering the landowners to respect the peaceful
possession and cultivation of the subject landholding.
Respondent-Appellant is hereby ordered to pay her unpaid
leasehold rentals.
SO ORDERED.[15]

The Tan Heirs appealed the decision of the DARAB to the Court of
Appeals. The Court of Appeals affirmed the decision of the DARAB ordering the
Tan Heirs to respect Reynaldas possession and cultivation of the Land.
Hence, this petition.

The Ruling of the Court of Appeals

In affirming the decision of the DARAB, the Court of Appeals cited Roxas y
Cia v. Cabatuando, et al.[16] where this Court held that x x x mere failure of a

tenant to pay the landholders share does not necessarily give the latter the right to
eject the former when there is lack of deliberate intent on the part of the tenant to
pay x x x.
The Court of Appeals held that Reynaldas failure to deliver the full amount
of the Tan Heirs share could not be considered as a willful and deliberate intent to
deprive the Tan Heirs of their share. The Court of Appeals held that Reynalda
honestly believed that she was entitled to a share of the harvests in 1992-1993
while the case for Annulment of Compromise Agreement was pending before the
DARAB-Ozamis. Reynalda also believed that she could effect a set-off for her
1992-1993 share from the 1994 share of the Tan Heirs.
The Court of Appeals further declared that the rental must be legal to
consider non-payment of such as a ground for ejectment. The appellate court
stated that:
x x x for a tenants failure to pay rental to come within the
intendment of the law as a ground for ejectment, it is imperative that the
rental must be legal. What the law contemplates is the deliberate failure
of the tenant to pay the legal rental, not the failure to pay an illegal
rental. A stipulation in a leasehold contract requiring a lessee to pay an
amount in excess of the amount allowed by law is considered contrary to
law, morals or public policy. Such contract is null and void as to the
excess.
It is noteworthy that Section 34 of RA 3844 provides that the
consideration for the lease of riceland and lands devoted to other crops
shall not be more than the equivalent of twenty-five per centum of the
average normal harvest. The tenant is obliged to pay a maximum of
25% of the normal harvest and not two thirds as in the case at bar. Thus,
even admitting that a set-off was effected in favor of respondent for her
1992-1993 share, yet enough is left to cover the 25% share of the
petitioners for the 1994 crop.[17]

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

The Issues

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

I
WHETHER THERE IS NO EXCEPTION TO THE GROUNDS FOR
EXTINGUISHMENT OF LEASEHOLD RELATION UNDER
SECTION 8 OF RA 3844.
II
WHETHER THE COURT OF APPEALS CORRECTLY RULED
THAT REYNALDA IS OBLIGED TO PAY ONLY 1/4 OR 25% OF
THE NORMAL HARVEST AND NOT 2/3 WHEN THE
SUBJECT LAND WAS NOT YET PLACED UNDER THE
LEASEHOLD SYSTEM PURSUANT TO SECTION 12 OF RA
6657.[20]

The Ruling of the Court

The petition lacks merit.

At the outset, the Court declares that RA 6657 is the governing statute in this
case.
On 8 August 1963, RA 3844 or the Agricultural Land Reform
Code[21] abolished and outlawed share tenancy and put in its stead the agricultural
leasehold system.[22] On 10 September 1971, Republic Act No. 6389 (RA 6389)
amending RA 3844 (RA 3844 as amended) declared share tenancy relationships
as contrary to public policy.[23] RA 6389 did not entirely repeal Republic Act No.
1199[24] and

RA

3844

even

if

RA

6389

substantially

modified

them.[25] Subsequently, Republic Act No. 6657 or the Comprehensive Agrarian


Reform Law of 1988 (RA 6657) took effect on 15 June 1988. RA 6657 only
expressly repealed Section 35 of RA 3844 as amended.[26] Thus, RA 6657 is the
prevailing law in this case. The harvests in dispute are for the years 1992-1993 or
after the effectivity of RA 6657.

No ground for dispossession of landholding

Section 7 of RA 3844 as amended provides that once there is a leasehold


relationship, as in the present case, the landowner cannot eject the agricultural
tenant from the land unless authorized by the court for causes provided by
law.[27] RA 3844 as amended expressly recognizes and protects an agricultural
leasehold tenants right to security of tenure.[28]
Section 36 of RA 3844 as amended enumerates the grounds for
dispossession of the tenants landholding, to wit:
SEC. 36. Possession of Landholding; Exceptions.Notwithstanding any
agreement as to the period or future surrender of the land, an agricultural lessee
shall continue in the enjoyment and possession of his landholding except when his

dispossession has been authorized by the Court in a judgment that is final and
executory if after due hearing it is shown that:
(1) The landholding is declared by the department head upon
recommendation of the National Planning Commission to be suited for
residential, commercial, industrial or some other urban purposes: Provided, That
the agricultural lessee shall be entitled to disturbance compensation equivalent to
five times the average of the gross harvests on his landholding during the last five
preceding calendar years;
(2) The agricultural lessee failed to substantially comply with any of the
terms and conditions of the contract or any of the provisions of this Code unless
his failure is caused by fortuitous event orforce majeure;
(3) The agricultural lessee planted crops or used the landholding for a
purpose other than what had been previously agreed upon;
(4) The agricultural lessee failed to adopt proven farm practices as
determined under paragraph 3 of Section twenty-nine;
(5) The land or other substantial permanent improvement thereon is
substantially damaged or destroyed or has unreasonably deteriorated through the
fault or negligence of the agricultural lessee;
(6) The agricultural lessee does not pay the lease rental when it falls
due: Provided, That if the non-payment of the rental shall be due to crop failure to
the extent of seventy-five per centum as a result of a fortuitous event, the nonpayment shall not be a ground for dispossession, although the obligation to pay
the rental due that particular crop is not thereby extinguished; or

(7) The lessee employed a sub-lessee on his landholding in violation


of the terms of paragraph 2 of Section twenty-seven.

In the instant case, the Tan Heirs seek Reynaldas ejectment from the Land
on the ground of non-payment of lease rental.
The Court agrees with the Court of Appeals that for non-payment of the
lease rental to be a valid ground to dispossess the agricultural lessee of the
landholding, the amount of the lease rental must first of all be lawful. If the
amount of lease rental claimed exceeds the limit allowed by law, non-payment of

lease rental cannot be a ground to dispossess the agricultural lessee of the


landholding.
Section 34 of RA 3844 as amended[29] mandates that not x x x more than
25% of the average normal harvest shall constitute the just and fair rental for
leasehold. In this case, the Tan Heirs demanded Reynalda to deliver 2/3 of the
harvest as lease rental, which clearly exceeded the 25% maximum amount
prescribed by law. Therefore, the Tan Heirs cannot validly dispossess Reynalda of
the landholding for non-payment of rental precisely because the lease rental
claimed by the Tan Heirs is unlawful.
Even assuming Reynalda agreed to deliver 2/3 of the harvest as lease rental,
Reynalda is not obliged to pay such lease rental for being unlawful. There is no
legal basis to demand payment of such unlawful lease rental. The courts will not
enforce payment of a lease rental that violates the law. There was no validly fixed
lease rental demandable at the time of the harvests.

Thus, Reynalda was never in

default.
Reynalda and the Tan Heirs failed to agree on a lawful lease rental.
Accordingly, the DAR must first fix the provisional lease rental payable by
Reynalda to the Tan Heirs pursuant to the second paragraph of Section 34 of RA
3844 as amended.[30] Until the DAR has fixed the provisional lease rental,
Reynalda cannot be in default in the payment of lease rental since such amount is
not yet determined. There can be no delay in the payment of an undetermined
lease rental because it is impossible to pay an undetermined amount.

That

Reynalda is not yet in default in the payment of the lease rental is a basic reason
why she cannot be lawfully ejected from the Land for non-payment of rental.[31]

No ground for extinguishment of leasehold relation


The Court also holds that there is no ground for the extinguishment of
leasehold relation in this case.
Only in the instances stated in Sections 8 and 28 of RA 3844 as amended
can leasehold relation be terminated. These provisions read:
SEC. 8. Extinguishment of Agricultural Leasehold Relation.The
agricultural leasehold relation established under this Code shall be extinguished
by:

(1)
Abandonment of the landholding without the knowledge
of the agricultural lessor;
(2)
Voluntary surrender of the landholding by the agricultural
lessee, written notice of which shall be served three months in advance;
or
(3)
Absence of the persons under Section nine to succeed to
the lessee, in the event of death or permanent incapacity of the lessee.
SEC. 28. Termination of Leasehold by Agricultural Lessee
During Agricultural Year.The agricultural lessee may terminate the
leasehold during the agricultural year for any of the following causes:
(1)
Cruel, inhuman or offensive treatment of the agricultural
lessee or any member of his immediate farm household by the
agricultural lessor or his representative with the knowledge and consent
of the lessor;
(2)
Non-compliance on the part of the agricultural lessor with
any of the obligations imposed upon him by the provisions of this Code
or by his contract with the agricultural lessee;
(3)
Compulsion of the agricultural lessee or any member of
his immediate farm household by the agricultural lessor to do any work

or render any service not in any way connected with farm work or even
without compulsion if no compensation is paid;

(4)
Commission of a crime by the agricultural lessor or his
representative against the agricultural lessee or any member of his
immediate farm household; or
(5)
Voluntary surrender
advantageous to him and his family.

due

to

circumstances

more

The case of Garchitorena v. Panganiban which the Tan Heirs invoked to


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

WHEREFORE,

the

Court DENIES the

petition

and AFFIRMS the

assailed Decision dated 31 August 2000 of the Court of Appeals in CA-G.R. SP


No. 48823. The Court REMANDS this case to the Department of Agrarian

Reform for the determination of the provisional lease rental. Costs against
petitioners.
SO ORDERED.

IGMIDIO HIDALGO and MARTINA ROSALES, petitioners,


vs.
POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE, SATURNINO HIDALGO,
BERNARDINA MARQUEZ, VICENTE DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO,
THE REGISTER OF DEEDS and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF
BATANGAS, respondents.
G.R. No. L-25327 May 29, 1970
HILARIO AGUILA and ADELA HIDALGO, petitioners,
vs.
POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE, SATURNINO HIDALGO,
BERNARDINA MARQUEZ, VICENTE DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO,
THE REGISTER OF DEEDS and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF
BATANGAS, respondents.
Jose O. Lara for petitioners.
Pedro Panganiban y Tolentino for respondents.

TEEHANKEE, J.:
Two petitions for review of decisions of the Court of Agrarian Relations dismissing petitioners'
actions as sharetenants for the enforcerment of the right to redeem agricultural lands, under the
provisions of section 12 of the Agricultural Land Reform Code. As the same issue of law is involved
and the original landowner and vendees in both cases are the same, the two cases are herein jointly
decided.
Respondent-vendor Policarpio Hidalgo was until the time of the execution of the deeds of sale on
September 27, 1963 and March 2, 1964 in favor of his seven above-named private co-respondents,
the owner of the 22,876-square meter and 7,638-square meter agricultural parcels of land situated in
Lumil, San Jose, Batangas, described in the decisions under review.
In Case L-25326, respondent-vendor sold the 22,876-square meter parcel of land, together with two
other parcels of land for P4,000.00. Petitioners-spouses Igmidio Hidalgo and Martina Resales, as
tenants thereof, alleging that the parcel worked by them as tenants is fairly worth P1,500.00, "taking

into account the respective areas, productivities, accessibilities, and assessed values of three lots,
seek by way of redemption the execution of a deed of sale for the same amount of P1,500.00 by
respondents-vendees 1 in their favor.
In Case L-25327, respondent-vendor sold the 7,638-square meter parcel of land for P750.00, and
petitioners-spouses Hilario Aguila and Adela Hidalgo as tenants thereof, seek by way of redemption
the execution of a deed of sale for the same price of P750.00 by respondents-vendees in their favor.
As stated in the decisions under review, since the parties stipulated on the facts in both cases,
petitioners-tenants have for several years been working on the lands as share tenants. No 90-day
notice of intention to sell the lands for the exercise of the right of pre-emption prescribed by section
11 of the Agricultural Land Reform Code (Republic Act No. 3844, enacted on August 8, 1963) was
given by respondent-vendor to petitioners-tenants. Subsequently, the deeds of sale executed by
respondent-vendor were registered by respondents register of deeds and provincial assessor of
Batangas in the records of their respective offices notwithstanding the non-execution by respondentvendor of the affidavit required by section 13 of the Land Reform Code. 2 The actions for redemption
were timely filled on March 26, 1965 by petitioners-tenants within the two-year prescriptive period from
registration of the sale, prescribed by section 12 of the said Code.

The agrarian court rendered on July 19, 1965 two identical decisions dismissing the petitions for
redemption.
It correctly focused on the sole issue of law as follows: "(T)he only issue in this case is whether or
not plaintiffs, asshare tenants, are entitled to redeem the parcel of land they are working from the
purchasers thereof, where no notice was previously given to them by the vendor, who was their
landholder, of the latter's intention to sell the property and where the vendor did not execute the
affidavit required by Sec. 13 of Republic Act No. 3844 before the registration of the deed of sale. In
other words, is the right of redemption granted by Sec. 12 of Republic Act No. 3844 applicable
to share tenants?"
But proceeding from several erroneous assumptions and premises, it arrived at its erroneous
conclusion that the right of redemption granted by section 12 of the Land Reform Code is available
to leasehold tenants only but not to share tenants, and thus dismissed the petitions: "(S)ec 12 of
Republic Act No. 3844, which comes under Chapter I of said Act, under the heading
'Agricultural Leasehold System,' reads as follows:
'SEC. 12. Lessee's Right of Redemption. In case the landholding is sold to a third
person without the knowledge of the agricultural lessee, the latter shall have the right
to redeem the same at a reasonable price and consideration: Provided: further, That
where there are two or more agricultural lessees, each shall be entitled to said right
of redemption only to the extent of the area actually cultivated by him. The right of
redemption under this Section may be exercised within two years from the
registration of the sale, and shall have priority over any other right of legal
redemption.'
The systems of agricultural tenancy recognized in this jurisdiction are share tenancy
and leaseholdtenancy. (Sec. 4, Republic Act No. 1199; Sec. 4, Republic Act No.
3844). A share tenant is altogether different from a leasehold tenant and their
respective rights and obligations are not co-extensive or co-equal. (See Secs. 22 to
41, inclusive, and Secs. 42 to 48, inclusive, of Republic Act No. 1199; see also Secs.
4 to 38, inclusive, of Republic Act No. 3844).

It is our considered view that the right of redemption granted by Section 12 of


Republic Act No. 3844 is applicable to leasehold tenants only, but not
to share tenants, because said provision of law clearly, definitely, and unequivocally
grants said right to the 'agricultural lessee,' and to nobody else. In enacting the
Agricultural Land Reform Code, Congress was fully aware of the existence
of sharetenancy and in fact provided for the abolition of the
agricultural share tenancy system. (Sec. 4, Republic Act No. 3844.) If it were the
intention of Congress to grant the right of redemption to sharetenants, it would have
unmistakably and unequivocally done so. We cannot extend said right
to sharetenants through judicial legislation, wherever our sympathies may lie.
The agrarian court fell into several erroneous assumptions and premises in holding that
agricultural share tenancy remains recognized in this jurisdiction; that "a share tenant is altogether
different from a leasehold tenant and their respective rights and obligations are not co-extensive or
co-equal"; and that the right of redemption granted by section 12 of the Land Reform Code" is
applicable to leasehold tenants only, but not to share tenants, because said provision of law clearly,
definitely, and unequivocally grants said right to the 'agricultural lessee,' and to nobody else."
1. The very essence of the Agricultural Land Reform Code is the abolition of
agricultural share tenancy as proclaimed in its title. Section 4 of the Code expressly outlaws
agricultural share tenancy as "contrary to public policy" and decrees its abolition. 3 Section 2 of the
Code expressly declares it to be the policy of the State, inter alia, "to establish owner cultivatorship
and the economic family-size farm as the basis of Philippine agriculture and, as a consequence,
divert landlord capital in agriculture to industrial development; to achieve a dignified existence for
the small farmers free from pernicious institutional restraints and practices; ... and to make the small
farmersmore independent, self-reliant and responsible citizens, and a source of strength in our
democratic society." 4 It was error, therefore, for the agrarian court to state the premise after the Land
Reform Code had already been enacted, that "the systems of agricultural tenancy recognized in this
jurisdiction are share tenancy and leasehold tenancy." A more accurate statement of the premise is that
based on the transitory provision in the first proviso of section 4 of the Code, i.e. that
existing share tenancy contracts are allowed to continue temporarily in force and effect, notwithstanding
their express abolition, until whichever of the following events occurs earlier: (a) the end of the agricultural
year when the National Land Reform Council makes the proclamation declaring the region or locality a
land reform area; or (b) the shorter period provided in the share tenancy contracts expires; or (c)
the share tenant sooner exercises his option to elect the leasehold system.

In anticipation of the expiration of share tenancy contracts whether by contractual stipulation or


the tenant's exercise of his option to elect the leasehold system instead or by virtue of their nullity
occuring before the proclamation of the locality as a land reform area, the same section 4 has further
declared in the third proviso thereof that in such event, the tenant shall continue in possession of the
land for cultivation and "there shall be presumed to exist a leasehold relationship under the
provisions of this Code."
2. The foregoing exposes the error of the agrarian court's corollary premise that "a share tenant is
altogether different from a leasehold tenant." The agrarian court's dictum that "their respective rights
and obligations are not co-extensive or co-equal "refer to their contractual relations with the
landowner, with respect to the contributions given, management, division or payment of the
produce. 5
But the Land Reform Code forges by operation of law, between the landowner and the farmer be
a leaseholdtenant or temporarily a share tenant a vinculum juris with certain vital juridical
consequences, such as security of tenure of the tenant and the tenant's right to continue in
possession of the land he works despite the expiration of the contract or the sale or transfer of the

land to third persons, and now, more basically, the farmer's pre-emptive right to buy the land he
cultivates under section 11 of the Code 6 as well as the right to redeem the land, if sold to a third person
without his knowledge, under section 12 of the Code.

This is an essential and indispensable mandate of the Code to implement the state's policy of
establishing owner-cultivatorship and to achieve a dignified and self-reliant existence for the small
farmers that would make them a pillar of strength of our Republic. Aside from expropriation by the
Land Authority of private agricultural land for resale in economic family-size farm units "to bona
fide tenants, occupants and qualified farmers," 7 the purchase by farmers of the lands cultivated by
them, when the owner decides to sell the same through rights of pre-emption and redemption are
the only means prescribed by the Code to achieve the declared policy of the State.

3. The agrarian court therefore facilely let itself fall into the error of concluding that the right of
redemption (as well as necessarily the right of pre-emption) imposed by the Code is available
to leasehold tenants only and excludesshare tenants for the literal reason that the Code grants said
rights only to the "agricultural lessee and to nobody else." For one, it immediately comes to mind that
the Code did not mention tenants, whether leasehold or sharetenants, because it
outlaws share tenancy and envisions the agricultural leasehold system as its replacement. Thus,
Chapter I of the Code, comprising sections 4 to 38, extensively deals with the establishment of
"agriculturalleasehold relation," defines the parties thereto and the rights and obligations of the
"agricultural lessor" and of the "agricultural lessee" (without the slightest mention
of leasehold tenants) and the statutory consideration or rental for the leasehold to be paid by the
lessee. There is a studied omission in the Code of the use of the term tenant in deference to the
"abolition of tenancy" as proclaimed in the very title of the Code, and the elevation of the tenant's
status to that of lessee.
Then, the terms "agricultural lessor" and "agricultural lessee" are consistently used throughout the
Chapter and carried over the particular sections (11 and 12) on pre-emption and redemption. The
agrarian court's literal construction would wreak havoc on and defeat the proclaimed and announced
legislative intent and policy of the State of establishing owner-cultivatorship for the farmers, who
invariably were all share tenants before the enactment of the Code and whom the Code would now
uplift to the status of lessees.
A graphic instance of this fallacy would be found in section 11 providing that "In case the agricultural
lessordecides to sell the landholding the agricultural lessee shall have the preferential right to buy
the same under reasonable terms and conditions." It will be seen that the term "agricultural lessor" is
here used interchangeably with the term "landowner"; which conflicts with the Code's definition of
"agricultural lessor" to mean "a person natural or juridical, who, either as owner, civil law lessee,
usufructuary, or legal possessor, lets or grants to another the cultivation and use of his land for a
price certains." 8 Obviously, the Code precisely referred to the "agricultural lessor (who) decides to
sell the landholding," when it could have more precisely referred to the "landowner," who alone as
such, rather than a civil law lessee, usufructuary or legal possessor, could sell the landholding, but it
certainly cannot be logically contended that the imprecision should defeat the clear spirit and intent
of the provision.
4. We have, here, then a case of where the true intent of the law is clear that calls for the application
of the cardinal rule of statutory construction that such intent or spirit must prevail over the letter
thereof, for whatever is within the spirit of a statute is within the statute, since adherence to the letter
would result in absurdity, injustice and contradictions and would defeat the plain and vital purpose of
the statute.

Section 11 of the Code providing for the "agricultural lessee's" preferential right to buy the land he
cultivates provides expressly that "the entire landholding offered for sale must be pre-empted by the
Land Authority if the landowner so desires, unless the majority of the lessees object to such
acquisition," presumably for being beyond their capabilities. Taken together with the provisions of
Chapter III of the Code on the organization and functions of the Land Authority and Chapter VII on
the Land Project Administration and the creation and functions of the National Land Reform Council,
(in which chapters the legislature obviously was not laboring under the inhibition of referring to the
term tenants as it was in Chapter I establishing the agricultural leasehold system and decreeing the
abolition of share tenancy, 9 the Code's intent, policy and objective to give both agricultural lessees
and farmers who transitionally continue to be share tenants notwithstanding the Code's enactment,
the same priority and preferential rights over the lands under their cultivation, in the event of
acquisition of the lands, by expropriation or voluntary sale, for distribution or resale that may be
initiated by the Land Authority or the National Land Reform Council, are clearly and expressly stated.
Thus Chapter III, section 51 of the Code decrees it the responsibility of the Land Authority "(1) To
initiate and prosecute expropriation proceedings for the acquisition of private agricultural lands as
defined in Section one hundred sixty-six of chapter XI of this Code for the purpose of subdivision into
economic family size farm units and resale of said farm units to bona fide tenants, occupants and
qualified farmers ... and "(2) To help bona fide farmers without lands of agricultural owner-cultivators
of uneconomic-size farms to acquire and own economic family-size farm units ...."
Similarly, Chapter VII, section 128 of the Code, in enjoining the National Land Reform Council to
formulate the necessary rules and regulations to implement the Code's provisions for selection of
agricultural land to be acquired and distributed and of the beneficiaries of the family farms, ordains
the giving of the same priority "to the actual occupants personally cultivating the land either as
agricultural lessees or otherwise with respect to the area under their cultivation."
5. It would certainly result in absurdity, contradictions and injustice if a share tenant would be denied
the rights of pre-emption and redemption which he seeks to exercise on his own resources,
notwithstanding that the National Land Reform Council has not yet proclaimed that all the
government machineries and agencies in the region or locality envisioned in the Code are operating
which machineries and agencies, particularly, the Land Bank were precisely created "to finance
the acquisition by the Government of landed estates for division and resale to small landholders, as
well as the purchase of the landholding by the agricultural lessee from the landowner." 10 The nonoperation in the interval of the Land Bank and the government machineries and agencies in the region
which are envisioned in the Code to assist the share tenant in shedding off the yoke of tenancy and afford
him the financial assistance to exercise his option of electing the leasehold system and his preferential
right of purchasing the land cultivated by him could not possibly have been intended by Congress to
prevent the exercise of any of these vital rights by a share tenant who is able to do so, e.g. to purchase
the land, on his own and without government assistance. It would be absurd and unjust that while the
government is unable to render such assistance, the share tenant would be deemed deprived of the very
rights granted him by the Code which he is in a position to exercise even without government assistance.

6. Herein lies the distinction between the present case and Basbas vs. Entena 11 where the Court
upheld the agrarian court's dismissal of the therein tenant's action to redeem the landholding sold to a
third party by virtue of the tenant's failure to tender payment or consign the purchase price of the property.
There, the tenant-redemptioner was shown by the evidence to have no funds and had merely applied for
them to the Land Authority which was not yet operating in the locality and hence, the Court held that no
part of the Code "indicates or even hints that the 2-year redemption period will not commence to run
(indefinitely) until the tenant obtains financing from the Land Bank, or stops the tenant from securing
redemption funds from some other source." 12 In the present case, the petitioners-tenants' possession of
funds and compliance with the requirements of redemption are not questioned, the case having been
submitted and decided on the sole legal issue of the right of redemption being available to them as share

tenants. The clear and logical implication of Basbas is where the tenant has his own resources or secures
redemption funds from sources other than the Land Bank or government agencies under the Code, the
fact that the locality has not been proclaimed a land reform area and that such government machineries
and agencies are not operating therein is of no relevance and cannot prejudice the tenant's rights under
the Code to redeem the landholding.

7. Even from the landowner's practical and equitable viewpoint, the landowner is not prejudiced in
the least by recognizing the share tenant's right of redemption. The landowner, having decided to
sell his land, has gotten his price therefor from his vendees. (The same holds true in case of the
tenant's exercise of the pre-emptive right by the tenant who is called upon to pay the landowner the
price, if reasonable, within ninety days from the landowner's written notice.) As for the vendees,
neither are they prejudiced for they will get back from the tenant-redemptioner the price that they
paid the vendor, if reasonable, since the Code grants the agricultural lessee or tenant the top priority
of redemption of the landholding cultivated by him and expressly decrees that the same "shall have
priority over any other right of legal redemption." In the absence of any provision in the Code as to
manner of and amounts payable on redemption, the pertinent provisions of the Civil Code apply in a
suppletory character. 13 Hence, the vendees would be entitled to receive from the redemptioners the
amount of their purchase besides "(1) the expenses of the contract, and any other legitimate payments
made by reason of the sale; (and) (2) the necessary and useful expenses made on the thing sold." 14

8. The historical background for the enactment of the Code's provisions on pre-emption and
redemption further strengthens the Court's opinion. It is noted by Dean Montemayor 15 that "(T)his is a
new right which has not been granted to tenants under the Agricultural Tenancy Act. It further bolsters the
security of tenure of the agricultural lessee and further encourages agricultural lessees to become ownercultivators.

In the past, a landlord often ostensibly sold his land being cultivated by his tenant to
another tenant, who in turn filed a petition for ejectment against the first tenant on the
ground of personal cultivation. While many of such sales were simulated, there was a
formal transfer of title in every case, and the first tenant was invariably ordered
ejected.
There is indication in this case of the same pattern of sale by the landowner to another tenant, 16 in
order to effect the ejectment of petitioners-tenants. This is further bolstered by the fact that the sales were
executed by respondent-vendor on September 27, 1963 and March 2, 1954 shortly after the enactment
on August 8, 1963 of the Land Reform Code which furnishes still another reason for upholding ...
petitioners-tenants' right of redemption, for certainly a landowner cannot be permitted to defeat the Code's
clear intent by precipitately disposing of his lands, even before the tenant has been given the time to
exercise his newly granted option to elect the new agricultural leasehold system established by the Code
as a replacement for the share tenancy outlawed by it.

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

Tax Appeals, 100 Phil. 850)." 17 The Court has consistently held in line with authoritative principles of
statutory construction that, it will reject a narrow and literal interpretation, such as that given by the
agrarian court, that would defeat and frustrate rather than foster and give life to the law's declared policy
and intent. 18 Finally, under the established jurisprudence of the Court, in the interpretation of tenancy and
labor legislation, it will be guided by more than just an inquiry into the letter of the law as against its spirit
and will ultimately resolve grave doubts in favor of the tenant and worker. 19

The agrarian court's dismissal of the cases at bar should therefore be reversed and petitionerstenants' right to redeem the landholdings recognized section 12 of the Code.
In Case L-25326, however, the deed of sale executed by respondent-vendor in favor of respondentsvendees for the price of P4,000.00 covers three parcels of land, while what is sought to be
redeemed is only the first parcel of land of 22,876 square meters, described in the deed. Petitionerstenants' allegation that the proportionate worth of said parcel "taking into account the respective
areas, productivities, accessibilities and assessed values of the three lots," is P1,500.00, was
traversed by respondents in their answer, with the claim that "the said land is fairly worth
P20,000.00. 20 While the vendor would be bound by, and cannot claim more than, the price stated in the
deed, and the Code precisely provides that the farmer shall have "the preferential right to buy the
(landholding) under reasonable terms and conditions" or "redeem the same at a reasonable price and
consideration" 21 with a view to affording the farmer the right to seek judicial assistance and relief to fix
such reasonable price and terms when the landowner places in the notice to sell or deed an excessive or
exorbitant amount in collusion with the vendee, we note that in this case the deed of sale itself
acknowledged that the selling price of P4,000.00 therein stated was not the fair price since an additional
consideration therein stated was that the vendees would support the vendor during his lifetime and take
care of him, should he fall ill, and even assumed the expenses of his burial upon his death:

Ang halagang P4,000.00 ay hindi kaulat sa tunay na halaga ng mga lupa subalit ang
mga bumili ay may katungkulan na sostentohin ako habang ako'y nabubuhay,
ipaanyo at ipagamot ako kung ako ay may sakit, saka ipalibing ako kung ako ay
mamatay sa kanilang gastos at ito ay isa sa alang-alang o consideracion ng bilihang
ito.
Under these circumstances, since the agrarian court did not rule upon conflicting claims of the
parties as to what was the proportionate worth of the parcel of land in the stated price of P4,000.00
whether P1,500.00 as claimed by petitioners or a little bit more, considering the proportionate
values of the two other parcels, but the whole total is not to exceed the stated price of P4,000.00,
since the vendor is bound thereby and likewise, what was the additional proportionate worth of
the expenses assumed by the vendees, assuming that petitioners are not willing to assume the
same obligation, the case should be remanded to the agrarian court solely for the purpose of
determining the reasonable price and consideration to be paid by petitioners for redeeming the
landholding, in accordance with these observations.
In Case L-25327, there is no question as to the price of P750.00 paid by the vendees and no
additional consideration or expenses, unlike in Case L-25326, supra, assumed by the vendees.
Hence, petitioners therein are entitled to redeem the landholding for the same stated price.
ACCORDINGLY, the decisions appealed from are hereby reversed, and the petitions to redeem the
subject landholdings are granted.
In Case L-25326, however, the case is remanded to the agrarian court solely for determining the
reasonable price to be paid by petitioners therein to respondents-vendees for redemption of the
landholding in accordance with the observations hereinabove made.

No pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Barredo and Villamor, JJ.,
concur.
Castro, J., is on leave.

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


MANUEL GUERRERO and MARIA GUERRERO, petitioners,
vs.
HON. COURT OF APPEALS, and APOLINARIO BENITEZ, respondents.
A.D. Guerrero for petitioners.
Bureau of Legal Assistance for private respondents.

GUTIERREZ, JR., J.:


Whether or not a tenancy relationship exists between the parties Manuel Guerrero, et al and
Apolinario Benitez, et al. as to determine their respective rights and obligations to one another is the
issue in this petition to review the decision of the then Court of Appeals, now the Intermediate
Appellate Court, which affirmed in toto the decision of the Court of Agrarian Relations in CAR Case
No. 6793-NE (SA-Q) '73, the dispositive portion of which reads:
In view of all the foregoing, judgment is hereby rendered:
(1) ordering defendants-spouses Manuel and Maria Guerrero to reinstate plaintiff
Apolinario Benitez to the 10-hectare portion of the 16-hectare coconut holding in
question, located at Bo. San Joaquin, Maria Aurora Sub-province Quezon and to
maintain said plaintiff in the peaceful possession and cultivation thereof, with all the
rights accorded and obligations imposed upon him by law;
(2) ordering defendants Paulino and Rogelio both surnamed Latigay to vacate the
said ten-hectare portion and deliver possession thereof to plaintiff Apolinario Benitez;
(3) ordering defendants-spouses Manuel and Maria Guerrero to pay damages to
plaintiffs in the amount of P14,911.20 beginning from July, 1973 and to pay the same
amount every year thereafter until plaintiff is effectively reinstated to the ten-hectare
portion;
(4) denying plaintiff-tenants' prayer for reconstruction of the copra cottage: and
(5) ordering defendants-spouses Manuel and Maria Guerrero to pay plaintiff the
amount of P200.00 by way of litigation expenses.

All other claims of the parties are denied. With costs against defendants-spouses.
The petitioners adopt the respondent court's findings of fact excepting, however, to its conclusion
that tenancy relations exist between the petitioners and the respondents, thus:
In 1969, plaintiff Apolinario Benitez was taken by defendants- spouses Manuel and
Maria Guerrero to take care of their 60 heads of cows which were grazing within their
21-hectare coconut plantation situated at Bo. San Joaquin, Maria Aurora,
Subprovince of Aurora, Quezon. Plaintiff was allowed for that purpose to put up a hut
within the plantation where he and his family stayed. In addition to attending to the
cows, he was made to clean the already fruitbearing coconut trees, burn dried leaves
and grass and to do such other similar chores. During harvest time which usually
comes every three months, he was also made to pick coconuts and gather the fallen
ones from a 16-hectare portion of the 21-hectare plantation. He had to husk and split
the nuts and then process its meat into copra in defendants' copra kiln. For his work
related to the coconuts, he shared 1/3 of the proceeds from the copra he processed
and sold in the market. For attending to the cows he was paid P500 a year.
Sometime in the early part of 1973, plaintiff was refrained from gathering nuts from
the 10-hectare portion of the 16-hectare part of the plantation from where he used to
gather nuts. He felt aggrieved by the acts of defendants and he brought the matter to
the attention of the Office of Special Unit in the Office of the President in
Malacanang, Manila. This led to an execution of an agreement, now marked as Exh.
D, whereby defendants agreed, among others, to let plaintiff work on the 16-hectare
portion of the plantation as tenant thereon and that their relationship will be guided by
the provisions of republic Act No. 1199. The Agricultural Tenancy Act of the
Philippines.
Then in July, 1973, he was again refrained from gathering nuts from the 10-hectare
portion of the plantation with threats of bodily harm if he persists to gather fruits
therefrom. Defendant spouses, the Guerreros, then assigned defendants Rogelio
and Paulino Latigay to do the gathering of the nuts and the processing thereof into
copra. Defendants Guerreros also caused to be demolished a part of the cottage
where plaintiff and his family lived, thus, making plaintiffs feel that they (defendants)
meant business. Hence, this case for reinstatement with damages.
The lower court formulated four (4) issues by which it was guided in the resolution of
the questions raised by the pleadings and evidence and we pertinently quote as
follows:
(1) whether or not plaintiff is the tenant on the coconut landholding in question
consisting of sixteen (16) hectares;
(2) In The affirmative, whether or not he was unlawfully dispossessed of ten (10)
hectare thereof;
(3) Whether or not the parties are entitled to actual and moral damages, attorney's
fees and litigation expenses.
This petition for review poses the following questions of law:
I

Whether or not with the passage of Presidential Decree 1038 only last October 21,
1976, Republic Act 6389 otherwise known as the Code of Agrarian Reforms has
repealed in their entirety the Agricultural Tenancy Act (Republic Act 1199) and the
Agricultural Reform Code (Republic Act 3844) abrogating or nullifying therefore all
agricultural share tenancy agreements over all kinds of lands, as the one involved in
the case at bar-over coconut plantation-and hence, the complaint below as well as
the challenged decision by the courts below, based as they are on such share
tenancy agreements, have lost their validity cessante ratio legis, cessat ipsa lex.
II
Assuming arguendo that said laws have not thus been repealed, is respondent
Benitez hereunder the undisputed fact of the case as found by the courts below a
share tenant within the purview of the said laws, i.e., Republic Acts 1199 and 3844,
or a mere farmhand or farm worker as such relationship were extensively discussed
in Delos Reyes vs. Espinelli, 30 SCRA 574. (Copied verbatim from Petition, p. 31rollo)
Petitioner insists in this petition that Benitez was a mere farmhand or laborer who was dismissed as
an employee from the landholding in question and not ousted therefrom as tenant. Whether a person
is a tenant or not is basically a question of fact and the findings of the respondent court and the trial
court are, generally, entitled to respect and non-disturbance.
The law defines "agricultural tenancy" as the physical possession by a person of land devoted to
agriculture, belonging to or legally possessed by another for the purpose of production through the
labor of the former and of the members of his immediate farm household in consideration of which
the former agrees to share the harvest with the latter or to pay a price certain or ascertainable, either
in produce or in money, or in both (Section 3, Republic Act 1199, The Agricultural tenancy Act, as
amended.)
With petitioner reference to this case, "share tenancy" exists whenever two persons agree on a joint
undertaking for agricultural production wherein one party furnishes the land and the other his labor,
with either or both contributing any one or several of the items of production, the tenant cultivating
the land with the aid of labor available from members of his immediate farm household, and the
produce thereof to be divided between the landholder and the tenant in proportion to their respective
contributions (Sec. 4, RA 1199; Sec. 166(25) RA 3844, Agricultural Land Reform Code).
In contrast, a farmhand or agricultural laborer is "any agricultural salary or piece worker but is not
limited to a farmworker of a particular farm employer unless this Code expressly provides otherwise,
and any individual whose work has ceased as a consequence of, or in connection with, a current
agrarian dispute or an unfair labor practice and who has not obtained a substantially equivalent and
regular employment" (Sec. 166(15) RA 3844, Agricultural Land Reform Code).
The petitioners contend that the two courts below applied erroneous definitions of "tenancy" found in
repealed laws. They assert that the Agricultural Tenancy Act and the Agricultural Land Reform Code
have been superseded by the Code of Agrarian Reforms, Rep. Act 6389, which the trial court and
the Court of Appeals failed to cite and apply.
There is no question that the latest law on land and tenancy reforms seeks to abolish agricultural
share tenancy as the basic relationship governing farmers and landowners in the country.

On August 8, 1963, Republic Act 3844 abolished and outlawed share tenancy and put in its stead
the agricultural leasehold system. On September 10, 1971, Republic Act 6389 amending Republic
Act 3844 declared share tenancy relationships as contrary to public policy. On the basis of this
national policy, the petitioner asserts that no cause of action exists in the case at bar and the lower
court's committed grave error in upholding the respondent's status as share tenant in the petitioners'
landholding.
The petitioners' arguments are regressive and, if followed, would turn back the advances in agrarian
reform law. The repeal of the Agricultural Tenancy Act and the Agricultural Land Reform Code mark
the movement not only towards the leasehold system but towards eventual ownership of land by its
tillers. The phasing out of share tenancy was never intended to mean a reversion of tenants into
mere farmhands or hired laborers with no tenurial rights whatsoever.
It is important to note that the Agricultural Tenancy Act (RA 1199) and the Agricultural Land Reform
Code (RA 3844) have not been entirely repealed by the Code of Agrarian Reform (RA 6389) even if
the same have been substantially modified by the latter.
However, even assuming such an abrogation of the law, the rule that the repeal of a statute defeats
all actions pending under the repealed statute is a mere general principle. Among the established
exceptions are when vested rights are affected and obligations of contract are impaired. (Aisporna
vs. Court of Appeals, 108 SCRA 481).
The records establish the private respondents' status as agricultural tenants under the legal
definitions.
Respondent Benitez has physically possessed the landholding continuously from 1969 until he was
ejected from it. Such possession of longstanding is an essential distinction between a mere
agricultural laborer and a real tenant within the meaning of the tenancy law (Moreno, Philippine Law
Dictionary, 1972 Edition), a tenant being one who, has the temporary use and occupation of land or
tenements belonging to another (Bouvier's Law Dictionary, Vol. II, p. 3254) for the purpose of
production (Sec. 3, Republic Act 1199; delos Reyes vs. Espinelli, 30 SCRA 574). Respondent
Benitez lives on the landholding. He built his house as an annex to the petitioner's copra kiln. A hired
laborer would not build his own house at his expense at the risk of losing the same upon his
dismissal or termination any time. Such conduct is more consistent with that of an agricultural tenant
who enjoys security of tenure under the law.
Cultivation is another important factor in determining the existence of tenancy relationships. It is
admitted that it had been one Conrado Caruruan, with others, who had originally cleared the land in
question and planted the coconut trees, with the respondent coming to work in the landholding only
after the same were already fruit bearing. The mere fact that it was not respondent Benitez who had
actually seeded the land does not mean that he is not a tenant of the land. The definition of
cultivation is not limited merely to the tilling, plowing or harrowing of the land. It includes the
promotion of growth and the care of the plants, or husbanding the ground to forward the products of
the earth by general industry. The raising of coconuts is a unique agricultural enterprise. Unlike rice,
the planting of coconut seedlings does not need harrowing and plowing. Holes are merely dug on
the ground of sufficient depth and distance, the seedlings placed in the holes and the surface thereof
covered by soil. Some coconut trees are planted only every thirty to a hundred years. The major
work in raising coconuts begins when the coconut trees are already fruitbearing. Then it is cultivated
by smudging or smoking the plantation, taking care of the coconut trees, applying fertilizer, weeding
and watering, thereby increasing the produce. The fact that respondent Benitez, together with his
family, handles all phases of farmwork from clearing the landholding to the processing of copra,
although at times with the aid of hired laborers, thereby cultivating the land, shows that he is a

tenant, not a mere farm laborer. (delos Reyes vs. Espinelli, supra Marcelo vs. de Leon, 105 Phil.
1175).
Further indicating the existence of a tenancy relationship between petitioners and respondent is their
agreement to share the produce or harvest on a "tercio basis" that is, a 1/3 to 2/3 sharing in favor of
the petitioner-landowners. Though not a positive indication of the existence of tenancy
relations perse the sharing of harvest taken together with other factors characteristic of tenancy
shown to be present in the case at bar, strengthens the claim of respondent that indeed, he is a
tenant. The case of delos Reyes vs. Espinelli (supra) clearly explains the matter thus:
The agricultural laborer works for the employer, and for his labor he receives a salary
or wage, regardless of whether the employer makes a profit. On the other hand, the
share tenant par ticipates in the agricultural produce. His share is necessarily
dependent on the amount of harvest.
Hence, the lower court's computation of damages in favor of respondent based on the number of
normal harvests. In most cases, we have considered the system of sharing produce as convincing
evidence of tenancy relations.
The petitioners entered into an agreement on May 2, 1973 which in clear and categorical terms
establishes respondent as a tenant, to wit:
AGREEMENT
This agreement entered into by and between Manuel Guerrero hereinafter referred to
as the landowner and Apolinario Benitez hereinafter referred to as tenant.
xxx xxx xxx
The petitioners, however, contend that the word "tenant" in the aforequoted agreement was used to
mean a hired laborer farm employee as understood agreed upon by the parties. The fact that their
relationship would be guided by the provisions of Republic Act 1199 or the Agricultural Tenancy Act
of the Philippines militates against such an assertion. It would be an absurdity for Republic Act 1199
to govern an employer-employee relationship. If as the petitioners insist a meaning other than its
general acceptation had been given the word "tenant", the instrument should have so stated '. Aided
by a lawyer, the petitioners, nor the respondent could not be said to have misconstrued the same. In
clear and categorical terms, the private respondent appears to be nothing else but a tenant:
Finally, comes the admission by the petitioners' counsel of the respondent's status as tenant:
ATTY. ESTEBAN:
Q You said you are living at San Joaquin, who cause the sowing of
the lumber you made as annex in the house?
ATTY. NALUNDASAN
Please remember that under the law, tenant is given the right to live
in the holding in question. We admit him as tenant.
xxxxxxxxx

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


The respondent's status as agricultural tenant should be without question.
Once a tenancy relationship is established, the tenant has the right to continue working until such
relationship is extinguished according to law.
The Agricultural Tenancy Act of 1954 (Republic Act 1199), the Agricultural Land Reform Code of
1963 (Republic Act 3844), the Code of Agrarian Reforms (Republic Act 6389) and Presidential
Decree 1038 (Strengthening the Security of Tenure of Tenant Tillers in Non-Rice/Corn Producing
Agricultural Lands) all provide for the security of tenure of agricultural tenants. Ejectment may be
effected only for causes provided by law, to wit:
l) Violation or failure of the tenant to comply with any of the terms and conditions of
the tenancy contract or any of the provisions of the Agricultural Tenancy Act;
2) The tenant's failure to pay the agreed rental or to deliver the landholder's share
unless the tenant's failure is caused by a fortuitous event or force majeure;
3) Use by the tenant of the land for purposes other than that specified by the
agreement of the parties;
4) Failure of the tenant to follow proven farm practices:
5) Serious injury to the land caused by the negligence of the tenant;
6) Conviction by a competent court of a tenant or any member of his immediate
family or farm household of a crime against the landholder or a member of his
immediate family. (Section 50, Rep. Act 1199).
None of the above causes exists in the case at bar. The respondent has been unlawfully deprived of
his right to security of tenure and the Court of Agrarian Reforms did not err in ordering the
reinstatement of respondent as tenant and granting him damages therefor.
Before we close this case, it is pertinent to reiterate that the respondent's right as share tenant do
not end with the abolition of share tenancy. As the law seeks to "uplift the farmers from poverty,
ignorance and stagnation to make them dignified, self-reliant, strong and responsible citizens ...
active participants in nation-building", agricultural share tenants are given the right to leasehold
tenancy as a first step towards the ultimate status of owner-cultivator, a goal sought to be achieved
by the government program of land reform.
It is true that leasehold tenancy for coconut lands and sugar lands has not yet been implemented.
The policy makers of government are still studying the feasibility of its application and the
consequences of its implementation. Legislation still has to be enacted. Nonetheless, wherever it
may be implemented, the eventual goal of having strong and independent farmers working on lands
which they own remains. The petitioners' arguments which would use the enactment of the Agrarian
Reform Code as the basis for setting back or eliminating the tenurial rights of the tenant have no
merit.
WHEREFORE, the petition is DISMISSED for lack of merit. The decision of the appellate court is
AFFIRMED. No costs.

SO ORDERED.

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