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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 85041 August 5, 1993
GRACIANO BERNAS, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and NATIVIDAD BITO-ON DEITA, respondents.
Rodriguez Dadivas for petitioner.
Orlanda Bigcas-Lumawag for private respondent.
PADILLA, J.:
Petitioner Graciano Bernas is before this Court assailing the decision * of the respondent
appellate court dated 19 August 1988 in CA G.R. SP No. 14359 (CAR), which reversed the
decision ** of the Regional Trial Court of Roxas City, Branch 18, in Civil Case No. V-5146
entitled "Natividad Bito-on Deita, et al. vs, Graciano Bernas." As disclosed by the records
and the evidence of both parties, the facts involved in the controversy are as follows:
Natividad Bito-on Deita is the owner of Lots Nos. 794, 801, 840 and 848 of the Cadastral
Survey of Panay, Capiz, with a total area of 5,831 square meters. Out of liberality, Natividad
entrusted the lots by way of "dugo" to her brother, Benigno Bito-on, so that he could use the
fruits thereof to defray the cost of financing his children's schooling in Manila. Prior to April
1978, these agricultural lots had been leased by one Anselmo Billones but following the
latter's death and consequent termination of the lease, petitioner Graciano Bernas took over
and worked on the land. Benigno and Bernas worked out a production-sharing arrangement
whereby the first provided for all the expenses and the second worked the land, and after
harvest, the two (2) deducted said expenses and divided the balance of the harvest between
the two of them. The owner, Natividad, played no part in this arrangement as she was not
privy to the same.
In 1985, the lots were returned by Benigno to his sister Natividad, as all his children had by
then finished their schooling. When Natividad, and her husband sought to take over
possession of the lots, Bernas refused to relinquish, claiming that he was an agricultural
leasehold lessee instituted on the land, by Benigno and, as such, he is entitled to security of
tenure under the law.
Faced with this opposition from Bernas, Natividad filed an action with the Regional Trial Court
for Recovery of Possession, Ownership and Injunction with Damages. After trial, the court a
quo held in favor of the defendant (Bernas) and dismissed the complaint, ruling that from
the record and the evidence presented, notably the testimony of the plaintiff's own brother
Benigno, Bernas was indeed a leasehold tenant under the provisions of Republic Act No.
1199 and an agricultural leasehold lessee under Republic Act No. 3844, having been so
instituted by the usufructuary of the land (Benigno). As such, according to the trial court, his
tenurial rights cannot be disturbed save for causes provided by law.
Aggrieved, the plaintiff (Natividad) appealed to the Court of Appeals, contending that the
"dugo" arrangement between her and her brother Benigno was not in the nature of a
usufruct (as held by the court a quo), but actually a contract of commodatum. This being the
case, Benigno, the bailee in the commodatum, could neither lend nor lease the properties
loaned, to a third person, as such relationship (of bailor-bailee) is one of personal character.
This time, her contentions were sustained, with the respondent appellate court, reversing
the trial court's decision, ruling that having only derived his rights from the
usufructuary/bailee, Bernas had no better right to the property than the latter who
admittedly was entrusted with the property only for a limited period. Further, according to
the appellate court, there being no privity of contract between Natividad and Bernas, the
former cannot be expected to be bound by or to honor the relationship or tie between
Benigno and the latter (Bernas).
Hence, this petition by Bernas.

The issue for resolution by the Court is concisely stated by the respondent appellate court as
follows: whether the agricultural leasehold established by Benigno Bito-on in favor of
Graciano Bernas is binding upon the owner of the land, Natividad Bito-on, who disclaims any
knowledge of, or participation in the same.
In ruling for the private respondent (Natividad), the respondent appellate court held that:
Indeed, no evidence has been adduced to clarify the nature of the "dugo" transaction
between plaintiff and her brother Benigno Bito-on. What seems apparent is that Benigno
Bito-on was gratuitously allowed to utilize the land to help him in financing the schooling of
his children. Whether the transaction is one of usufruct, which right may be leased or
alienated, or one of commodatum, which is purely personal in character, the beneficiary has
the obligation to return the property upon the expiration of the period stipulated, or
accomplishment of the purpose for, which it was constituted (Art. 612, Art. 1946, Civil Code).
Accordingly, it is believed that one who derives his right from the usufructuary/bailee,
cannot refuse to return the property upon the expiration of the contract. In this case,
Benigno Bito-on returned the property lent to him on May 13, 1985 to the owners, the
plaintiff herein. We do not see how the defendant can have a better right to the property
than Benigno Bito-on, who admittedly possessed the land for a limited period. There is no
privity of contract between the owner of the land and the cultivator. 1
At this point, it is appropriate to point out that, contrary to the appreciation of the
respondent appellate court, the general law on property and contracts, embodied in the Civil
Code of the Philippines, finds no principal application on the present conflict. Generalibus
specialia derogant. The environmental facts of the case at bar indicate that this is not a
mere case of recovery of ownership or possession of property. Had this been so, then the
Court would have peremptorily dismissed the present petition. The fact, however, that
cultivated agricultural land is involved suffices for the Court to pause and review the
legislation directly relevant and applicable at the time this controversy arose.
In this regard, it would appear that Republic Act No. 1199, invoked by the trial court, had
already been rendered inoperative by the passage of Republic Act No. 3844, as amended,
otherwise known as the Agricultural Land Reform Code (Code, for brevity). The former, also
known as the Agricultural Tenancy Act of the Philippines and approved in August 1954 had
sought to establish a system of agricultural tenancy relations between the tenant and the
landholder, defining two (2) systems of agricultural tenancy: the share and the leasehold
tenancy. At this point, however, further discussion of the foregoing would appear futile, for
the Code, enacted in August, 1963, had expressly declared agricultural share tenancy to be
contrary to public policy and abolished the same. As for leasehold tenancy relations entered
into prior to the effectivity of the Code, the rights and obligations arising therefrom were
deemed to continue to exist until modified by the parties thereto in accordance with the
provisions of the Code. 2 Thus, for all intents and purposes, Republic Act No. 3844 is the
governing statute in the petition at bar. The pertinent provisions therefore state as follows:
Sec.
5. Establishment
of
Agricultural
Leasehold
Relations. The agricultural leasehold relation shall be established by operation of law in
accordance with Section four of this Code and, in other, cases, either orally or in writing,
expressly or impliedly.
Sec. 6. Parties to Agricultural Leasehold Relation. The agricultural leasehold relation shall
be limited to the person who furnishes the landholding, either as owner, civil law lessee,
usufructuary, or legal possessor, and the person who personally cultivates the same.
(emphasis supplied).
Sec. 7. Tenure of Agricultural Leasehold Relation. The Agricultural Leasehold Relation
once established shall confer upon the agricultural lessee the right to continue working on
the landholding until such leasehold relationship 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. (emphasis supplied)
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
of permanent incapacity of the lessee.
xxx xxx xxx
Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. The
agricultural leasehold relation under this Code shall not be extinguished by mere expiration
of the term or period in a leasehold contract nor by the sale, alienation or transfer of the
legal possession of the landholding. In case the agricultural lessor sells, alienates or
transfers the legal possession of the landholding, the purchaser or transferee thereof shall
be subrogated to the rights and substituted to the obligations of the agricultural lessor.
xxx xxx xxx
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 agricultural lessor-owner or a member of his immediate family will personally
cultivate the landholding or will convert the landholding, if suitably located, into residential,
factory, hospital or school site or other useful non-agricultural purposes: Provided, That the
agricultural lessee shall, be entitled to disturbance compensation equivalent to five years
rental on his landholding in addition to his rights under Sections twenty-five and thirty-four,
except when the land owned and leased by the agricultural lessor is not more than five
hectares, in which case instead of disturbance compensation the lessee may be entitled to
an advanced notice of at least one agricultural year before ejectment proceedings are filed
against him: Provided, further, That should the landholder not cultivate the land himself for
three years or fail to substantially carry out such conversion within one year after the
dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant
shall have the right to demand possession of the land and recover damages for any loss
incurred by him because of said dispossession; 3
(2) the agricultural lessee failed to substantially comply with any of the terms and conditions
of the contract or any of the provisions of this Code unless his failure is caused by fortuitous
event or force majeure:
(3) the agricultural lessee planted crops or used the landholding for a purpose other than
what had been previously agreed upon;
(4) the agricultural lessee failed to adopt proven farm practices as determined under
paragraph 3 of Section twenty-nine;
(5) the land or other substantial permanent improvement thereon is substantially damaged
or destroyed or has unreasonably deteriorated through the fault or negligence of the
agricultural lessee;
(6) the agricultural lessee does not pay the lease rental when it falls due: Provided, That if
the nonpayment of the rental shall be due to crop failure to the extent of seventy-five per
centum as a result of a fortuitous event, the non-payment shall not be a rental due that
particular crop year, 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.
Sec. 37. Burden of Proof. The burden of proof to show the existence of a lawful cause for
the ejectment of an agricultural lessee shall rest upon the agricultural lessor.
There is no dispute, as it is admitted by the parties in this case, that Benigno Bito-on was
granted possession of the property in question by reason of the liberality of his sister,
Natividad (the private respondent). In short, he (Benigno) was the LEGAL POSSESSOR of the
property and, as such, he had the authority and capacity to enter into an agricultural
leasehold relation with Bernas. Consequently, there is no need to dwell on the contentions of
the private respondent that, her brother Benigno was not a usufructuary of the property but
actually a bailee incommodatum. Whatever was the true nature of his designation, he

(Benigno) was the LEGAL POSSESSOR of the property and the law expressly grants him, as
legal possessor, authority and capacity to institute an agricultural leasehold lessee on the
property he legally possessed.
In turn, having been instituted by Benigno as an agricultural leasehold lessee, Bernas is
vested by law with the rights accruing thereto, including the right to continue working the
landholding until such lease is legally extinguished, and the right to be protected in his
tenure i. e., not to be ejected from the land, save for the causes provided by law, and as
appropriately determined by the courts. In this connection, there is no clear indication in the
record that the circumstances or conditions envisioned in Section 36 of Republic Act. No.
3844, as amended, for termination of the agricultural lease relation, have supervened, and
therefore Bernas' right to the possession of the property remains indisputable. This
conclusion is buttressed by Sec. 37 of the Code which provides that:
Sec. 37. Burden of Proof. The burden of proof to show the existence of a lawful cause for
the ejectment of an agricultural lessee shall rest upon the agricultural lessor.
As to any suggestion that the agricultural lease of Bernas may have terminated because the
landowner (Natividad) has decided to cultivate the land herself, we submit that this Court is
not in a position to settle this issue in this case, not only because of insufficient evidence to
determine whether or not, the grounds provided by law for termination of the agricultural
leasehold relation are present but, more importantly, because the issue of termination of the
agricultural leasehold relationship by reason of the landowner's alleged decision to till the
land herself, was not squarely raised nor adequately litigated in the trial court. 4 It will be
noted that while Natividad in her complaint with the court a quo alleged, among others, that
"on 20 May 1985, the plaintiffs spouses were already in the process of taking over the land
by employing a tractor operator to commence plowing the land," this allegation was denied
by Bernas in his answer. But the main thrust of Natividad's complaint was that she had no
privity with Bernas and that the latter should vacate the land because Benigno (from whom
Bernas had received his right to possess) had himself ceased to have any rights to the land.
Faced with these allegations, the court a quo in its pre-trial order dated 9 September 1985
formulated the issues in this case, without objection from the parties, as follows:
ISSUES
1. Is defendant an agricultural leasehold lessee of the parcels of land described in the
Complaint?
2. Whether the parties are entitled to damages claims by them in their respective pleadings.
In short, the parties went to trial on the merits on the basis of the foregoing issues. Private
respondent did not object to the above issues as formulated; neither can it be plausibly
contended now that the first issue (i.e. whether Bernas is an agricultural leasehold lessee)
embraces the issue of whether Natividad has validly terminated the agricultural leasehold
because of a decision to cultivate the land herself, since under sec. 36(1) of the Code
(before its amendment by Section 7 of Rep. Act No. 6389), the landowner's right to take over
possession of his land for personal cultivation ASSUMES that it is under a valid and
subsisting agricultural leasehold and he must obtain an order from the court to dispossess
the agricultural leasehold lessee who otherwise is entitled to continued use and possession
of the landholding. In other words, if Natividad had really intended to raise as an issue that
she had validly terminated Bernas' agricultural leasehold, she or her counsel could have
expressly included among the issues for determination the question of whether or not she
had complied with the requirements of the law for dispossessing the agricultural leasehold
lessee because she, as landowner, had decided to personally cultivate the landholding. But
she did not.
The trial court in its decision dated 20 October 1987 (latter appealed to the Court of
Appeals) held (consistent with the formulated issues in the case) that
xxx xxx xxx
As to issues, parties presented only two (2) issues and which are:
1. Whether or not defendant is an agricultural leasehold lessee of the parcels of land
described in the complaint;

2. Whether the parties are entitled to damages claimed by them in their respective
pleadings.
(Pre-Trial Order dated September 9, 1985, p. 41 records)
and finally disposed as follows:
From the above discussions, this Court opines that defendant was a share tenant on the
parcels of land subject of the complaint, and an agricultural leasehold lessee under the
provisions of the Agricultural Land Reform Code as amended by Presidential Decrees on the
matter.
No damages as damages were proved or established by evidence by the defendant.
WHEREFORE, and in view of the above considerations, a decision is rendered dismissing
plaintiffs complaint, and declaring defendant as the agricultural leasehold lessee on Lot Nos.
794, 801, 840 and 848 of the Cadastral Survey of Panay, Capiz, with an area of 5,831 square
meters, situated at Calitan, Panay, Capiz, with security of tenure as an Agricultural
Leasehold Lessee thereof; and plaintiffs to pay the costs of the suit.
In the Court of Appeals, the litigated issue was
xxx xxx xxx
The legal issue that presents itself is whether the agricultural leasehold established by
Benigno Bito-on was binding upon the owner of the land, plaintiff Natividad Bito-on, who
disclaims knowledge of any arrangement with defendant Bernas. The lower court held that
the "dugo" arrangement was in the nature of usufruct, and that the act of the usufructuary
as legal possessor was sufficient to establish tenancy relations.
xxx xxx xxx 5
The long settled rule in this jurisdiction is that a party is not allowed to change his theory of
the case or his cause of action on appeal. 6 We have previously held that "courts of justice
have no jurisdiction or power to decide question not in issue" 7 and that a judgment going
outside the issues and purporting to adjudicate something upon which the parties were not
heard is not merely irregular, but extrajudicial and invalid. 8 The rule is based on the
fundamental tenets of fair play and, in the present case, the Court is properly compelled not
to go beyond the issue litigated in the court a quo and in the Court of Appeals of whether or
not the petitioner, Graciano Bernas, is an agricultural leasehold lessee by virtue of his
installation as such by Benigno Bito-on, the legal possessor of the landholding at the time
Bernas was so installed and, consequently entitled to security of tenure on the land. Should
grounds for the dispossession of Bernas, as an agricultural leasehold lessee, subsequently
arise, then and only then can the private respondent (land owner) initiate a separate
action to dispossess the lessee, and in that separate action, she must allege and prove
compliance with Sec. 36(1) of the Code which consist of, among others, a one year advance
notice to the agricultural leasehold lessee (the land involved being less than 5 hectares) and
readiness to pay him the damages required also by the Code.
The issue of whether or not Bernas planted crops or used the land in a manner contrary to
what was agreed upon between Natividad and Benigno, and thereby constituting a ground
for terminating the leasehold relationship under Sec. 36, par. 3 of Rep. Act No. 3844 likewise
cannot be passed upon by this Court since the issue was never raised before the courts
below. Furthermore, there is no showing that Natividad and Benigno agreed that only certain
types of crops could be planted on the land. What is clear is, that the "dugo" arrangement
was made so that Benigno could use the produce of the land to provide for the schooling of
his children. The alleged conversion by Bernas of the land to riceland was made necessary
for the land to produce more and thus meet the needs of Benigno. It was consistent with the
purpose of making the land more productive that Benigno installed an agricultural lessee. It
may be recalled that when Natividad called on Benigno to testify as a witness, he stated that
the produce of the land was given to him by Bernas to defray the expenses of his children
(p. 3, trial court decision). The inevitable conclusion is therefore not that there was use of
the land different from the purpose for which it was allegedly intended by Natividad and
Benigno but rather that the installation of the agricultural lessee was made necessary so
that the land could produce more to better serve the needs of the beneficiary (Benigno).

Additionally, it can be stated that the agricultural leasehold relationship in this case was
created between Benigno as agricultural lessor-legal possessor, on the one hand, and Bernas
as agricultural leasehold lessee, on the other. The agricultural leasehold relationship
was not between Natividad and Bernas. As Sec. 6 of the Code states:
Sec. 6. Parties to Agricultural Leasehold Relations. The agricultural leasehold relations
shall be limited to the person who furnishes the landholding, either as owner, civil law
lessee, usufructuary, orlegal possessor, and the person who personally cultivates the same.
(emphasis supplied)
There was, as admitted by all, no privity or tie between Natividad and Bernas. Therefore,
even if Bernas had improperly used the lots as ricelands, it was Benigno who could have
objected thereto since it was his (the legal possessor's) landholding that was being
"improperly" used. But he (Benigno) did not. It is not for Natividad (as landowner) to now
complain that Bernas used the land "for a purpose other than what had been previously
agreed upon." Bernas had no agreement with her as to the purpose for which the land was
to be used. That they were converted into ricelands (also for agricultural production) can
only mean that the same (conversion) was approved by Benigno (the undisputed agricultural
lessor-legal possessor). It is thus clear that sec. 36, par 3 of the Code cannot be used to
eject Bernas.
The Court, must, in our view, keep in mind the policy of the State embodied in the
fundamental law and in several special statutes, of promoting economic and social stability
in the countryside by vesting the actual tillers and cultivators of the soil, with rights to the
continued use and enjoyment of their landholdings until they are validly dispossessed in
accordance with law. At this stage in the country's land reform program, the agricultural
lessee's right to security of tenure must be "firmed-up" and not negated by inferences from
facts not clearly established in the record nor litigated in the courts below. Hand in hand with
diffusion of ownership over agricultural lands, it is sound public policy to encourage and
endorse a diffusion of agricultural land use in favor of the actual tillers and cultivators of the
soil. It is one effective way in the development of a strong and independent middle-class in
society.
In confirmation we believe of the foregoing views, Section 36 of Rep. Act No. 3844 (the
Code) was expressly amended by Section 7 of Rep. Act No. 6389 which replaced paragraph
1, Section 36 of the Code providing for personal cultivation by the landowner as a ground for
ejectment or dispossession of the agricultural leasehold lessee with the following provision:
Sec. 7. Section 36 (1) of the same Code is hereby amended to read as follows:
(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 harvest of his landholding
during the last five preceding calendar years;
While it is true that in the case of Ancheta vs. Court of Appeals, 200 SCRA 407, the Court,
stated that:
It is well settled that RA 6389, which removed personal cultivation as a ground for ejectment
of tenant/lessee, cannot be given retroactive effect in the absence of statutory provision for
retroactivity or a clear implication of the law to that effect.
however, Rep. Act No. 6389 was approved on 10 September 1971. 9 The complaint in this
case was filed on 21 June 1985 or long after the approval of Rep. Act No. 6389. By reason of
the provision therein eliminating personal cultivation by the landowner as a ground for
ejectment or dispossession of the agricultural leasehold lessee, any issue of whether or not
the Court of Appeals decision should nonetheless be affirmed because the landowner had
shown her intention or decided to personally cultivate the land (assuming without admitting
that the issue was properly raised before the trial court), had in fact become moot and
academic (even before it was hypothetically raised). The issued had been resolved by
legislation unmistakably against the landowner.
It may of course he argued that "she (Natividad) did not authorize her brother (Benigno) to
install a tenant thereon." (TSN, 13 February 1986, p. 6).

Even if there was a lack of authorization (from Natividad) for Benigno to install a tenant, it
still follows, in our view, that Benigno as legal possessor of the landholding, could install an
agricultural lessee on the landholding. For, as defined in Section 166 (3) of the Code, an
agricultural lessor is a natural or juridical person 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 certain. Nothing in said section, it will be noted, requires that the civil law lessee,
usufructuary or legal possessor should have the prior authorization of the landowner in order
to let or grant to another the cultivation or use of the landholding.
Another question comes up; did Natividad expressly prohibit Benigno from installing a tenant
on the land? Nothing in the evidence shows that Benigno was expressly prohibited by
Natividad from installing a tenant on the landholding. And even if there was an express
prohibition on the part of Natividad (landowner) for Benigno not to install an agricultural
leasehold lessee, it is to be noted that any such arrangement (prohibition) was solely
between Natividad and Benigno. There is no evidence to show that Bernas was aware or
informed of any such arrangement between Natividad and Benigno. Neither was such
arrangement (prohibition), if any, recorded in the registry of deeds to serve as notice to third
persons (as Bernas) and to the whole world for that matter. Consequently, if there was
indeed such a prohibition (which is not borne out by the records) imposed by Natividad on
Benigno, a violation thereof may give rise to a cause of action for Natividad against Benigno
but Bernas is no less an agricultural leasehold lessee, for the law (Section 166 (2) of the
Code) defines an agricultural lessee as a person who by himself and with the help available
from within his immediate farm household cultivates the land belonging to or possessed by
another (in this case Benigno) with the latter's consent for purposes of production for a price
certain in money or in produce or both.
Ponce vs. Guevarra, L-19629 and L-19672-92, 31 March 1954 (10 SCRA 649) provides
dramatic support to thesecurity of tenure of Bernas in the case at bar. In the Ponce case, the
owner (Ponce) had leased his agricultural land to Donato (the lessee) for a stipulated period
with a provision in the lease contract prohibiting Donato from sub-leasing the land without
the written consent of the owner (Ponce). Notwithstanding these "express prohibition",
Donato sub-leased the land without the consent of Ponce (the owner). When the lease
contract expired, Donato returned the land to Ponce but the sub-lessees (tenants) refused to
vacate, claiming security of' tenure under the tenancy laws then enforced. One of the
contentions of Ponce (the owner) in seeking to dispossess the sub-lessees (tenants) was that
these tenants entered into possession of the land under a violation of the lease contract by
Donato (the lessee).
Over-ruling the above contention, this Court held:
It is true that the subleasing of said land to respondents herein (tenants) without the written
consent of the petitioner (owner), constituted a violation of the original contract of lease.
The breach of contract was committed, however, by Donato (the lessee), . . . .
Of course, in the same Ponce case, the Court observed that Ponce renewed his lease
contract for another year with Donato, knowing at the time of such renewal that the land
had been sub-leased to the tenants, thereby injecting the principle of estoppel
against Ponce vis-a-vis the tenants. But, as we view it, the ratio decidendi in the Court's
decision is to the effect that the sub-lessees (tenants) were entitled to security of tenure on
the land they were cultivating, notwithstanding the undisputed fact that they became sublessees (tenants) of the land as a result of a violation by the lessee (Donato) of an express
provision in the lease contract prohibiting him from sub-leasing the land.
What more in the case of Bernas whose right to security of tenure as an agricultural
leasehold lessee is conferred and protected categorically, positively and clearly by the
provisions of the Code (Republic Act. 3844)?
It is of course possible to construe Sec. 6 of the Code which provides:
SEC 6. Parties to Agricultural Leasehold Relations. The agricultural leasehold relation shall
be limited to the person who furnishes the landholding, either as owner, civil law lessee,
usufructuary, or legal possessor, and the person who personally cultivates the same.
(emphasis supplied).

in the following manner:


. . . it assumes that there is already an existing agricultural leasehold relation, i.e. a tenant
or agricultural lessee already works the land. As may be gleaned from the epigraph of Sec.
6, it merely states who are "Parties to Agricultural Leasehold Relations," which means that
there is already a leasehold tenant on the land. But this is precisely what We are still asked
to determine in these proceedings. (dissenting opinion, p. 11.)
It would appear from the above interpretation of Sec. 6 of the Code that in the absence of a
judicial determination or declaration of an agricultural leasehold relation, such relation does
not or cannot even exist. We view this posture as incorrect for an agricultural leasehold
relationship exists by operation of law when there is a concurrence of an agricultural lessor
and an agricultural lessee. As clearly stated in Section 5 of the code.
Sec. 5. Establishment of Agricultural Leasehold Relations. The agricultural leasehold
relation shall be established by operation of law in accordance with Section four of this Code
and, in other cases, either orally or in writing, expressly or impliedly.
In other words, in the case at bar, from the moment Benigno, as legal possessor (and,
therefore, an agricultural lessor) granted this cultivation and use of the landholding to
Bernas in exchange or consideration for a sharing in the harvest, an agricultural leasehold
relationship emerged between them "by operation of law".
The fact that the transfer from Natividad to Benigno was gratuitous, we believe, is of no
consequence as far as the nature and status of Benigno's possession of the landholding is
concerned. He became the legal possessor thereof from the viewpoint of the Code. And as
legal possessor, he had the right and authority, also under the Code, to install or institute an
agricultural leasehold lessee on his landholding, which was exactly what he did, i.e. install
Bernas as an agricultural leasehold lessee.
The argument that Benigno's (and consequently, Bernas') possession was meant to last for a
limited period only, may appeal to logic, but it finds no support in the Code which has its
own underlying public policy to promote. For Section 7 of the Code provides:
Sec. 7. Tenure of Agricultural Leasehold Relation. The Agricultural Leasehold Relation once
established shall confer upon the agricultural lessee the right to continue working on the
landholding until such leasehold relationship is extinguished. The agricultural lessee shall be
entitled to security of tenure on his landholding and cannot be ejected therefrom unless
authorized herein-provided. (emphasis supplied)
while Section 10 of the Code provides:
Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. The
agricultural leasehold relation under this Code shall not be extinguished by mere expiration
of the term or period in a leasehold contract nor by the sale, alienation or transfer of the
legal possession of the landholding. In case the agricultural lessor. sells, alienates or
transfers the legal possession of the landholding, the purchaser or transferee thereof shall
be subrogated to the rights and substituted to the obligations of the agricultural lessor.
(emphasis supplied).
and Section 36 of the Code provides:
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
. . . . (emphasis supplied)
Clearly the return of legal possession from Benigno to Natividad cannot prejudice the rights
of Bernas as an agricultural leasehold lessee. The grounds for ejectment of an agricultural
leasehold lessee are provided for by law. The enumeration is exclusive and no other grounds
can justify termination of the lease. The policy and letter of the law are clear on this point.
The relatively small area of the agricultural landholding involved (a little over half a hectare)
would appear, in our view, to be of no consequence in this case. Here, the issue is not how
much areamay be retained in ownership by the land owner Natividad but the issue is
whether Bernas is a duly constituted agricultural leasehold lessee of the agricultural
landholding (regardless of its area) and entitled to security of tenure therein. And, as
abundantly shown, the Code is definitely and clearly on his side of this issue.

It should be pointed out that the report and recommendation of the investigating officer of
the Ministry of Agrarian Reform (MAR) finding that Bernas is not an agricultural leasehold
should deserve little consideration. It should be stressed, in this connection, that said report
and recommendation is congenitally defective because
a. it was based solely on the evidence presented by Natividad, Bernas did not participate in
said investigation.
b. the findings in the report are not supported by law or jurisprudence but are merely the
opinion and conclusions of the investigator whose knowledge of the Code and the case Law
appears to be sadly inadequate.
c. whether or not an agricultural leasehold relation exists in any case is basically a question
of law and cannot be left to the determination or opinion of a MAR-investigator on the basis
of one-sided evidence.
This Court has ruled in Qua v. Court of Appeals, 198 SCRA 236 that
. . . as regards relations between litigants in land cases, the findings and conclusions of the
Secretary of Agrarian Reform, being preliminary in nature, are not in any way binding on the
trial courts which must endeavor to arrive at their own independent conclusions.
The ruling finds support in the case of Graza v. CA (163 SCRA 39) citing Section 12 of PD No.
946 expressly stating that "the preliminary determination of the relationship between the
contending parties by the Secretary of Agrarian Reform or his authorized representative, is
not binding upon the court, judge or hearing officer to whom the case is certified as a proper
case for trial. Said court, judge or hearing officer, after hearing, may confirm, reverse or
modify said preliminary determination as the evidence and substantial merits of the case
may warrant." The court a quo in the case at bar tried the case on the merits, receiving the
evidence of both parties and arrived at a conclusion different from that of the MAR
investigator. It is to be noted that even the Court of Appeals (which decided for Natividad)
found no use for the MAR investigator's report and recommendation, for obvious reasons. It
is clear that the question of the existence of an agricultural leasehold relationship is
a question of law which is properly within the province of the courts.
The certification of the President of the Agrarian Reform Beneficiaries Association, Panay
chapter "issued upon the request of Mrs. Deita" (meaning Natividad) that Bernas is not in
the masterlist of tenants, should likewise be disregarded. Since when, it may be noted, was
the legal question of agricultural leasehold relationship made to depend on a certification of
such an association's president?
The argument, that Bernas is not a lawful tenant of Natividad based on the doctrine in the
case of Lastimoza v.Blanco (1 SCRA 231) is also not correct. The cited case does not support
the desired conclusion. In the Lastimoza case, a certain Nestor Panada had an oral contract
of tenancy with a certain Gallego who was then in possession of the parcel of land. The latter
however was ejected after the Court of First Instance ruled in a land registration proceeding
that it was Lastimoza who was the true owner of the land. The Court in effect ruled that
Gallego was an unlawful possessor and thus Panada cannot be a lawful tenant. The factual
background of the Lastimoza case and the present Bernas case are totally different; the first
case cannot be applied to the second. When Bernas was instituted by Benigno as an
agricultural lessee, Benigno was a legal possessor of the landholding in question. No one can
dispute this.
The dissenting opinion states that ". . . it is not correct to say that every legal possessor, be
he a usufructuary, or a bailee, is authorized as a matter of right to employ a tenant. His
possession can be limited by agreement of the parties or by operation of law." (p. 13) Even
assuming arguendo that this is a correct legal statement, there is absolutely no showing that
the possession of Benigno was limited by his agreement with Natividad (as to prohibit him
from instituting a tenant) or by operation of law; and because there is a total failure to
disprove and even dispute that Benigno was a legal possessor at the time Bernas was
installed by him as an agricultural lessee, then Bernas validly became an agricultural
leasehold lessee of the land and is protected by the law from ejectment except for causes
specified therein.

Finally, in relation to the dissenting opinion, it may be wise to repeat the statement of the
Court in Jose D. Lina, Jr.vs. Isidro Cario (G.R. No. 100127, 23 April 1993) thus
The Court believes that petitioner's argument cogent though it may be as a social and
economic comment is most appropriately addressed, not to a court which must take the
law as it is actually written, but rather to the legislative authority which can, if it wishes,
change the language and content of the law. (emphasis supplied)
In the case at bar, the language, policy and intent of the law are clear; this Court cannot
interpose its own views as to alter them. That would be judicial legislation.
WHEREFORE the petition is GRANTED. The decision of the respondent appellate court, is
REVERSED and SET ASIDE and that of the Regional Trial Court. REINSTATED. Costs against
the private respondent.
SO ORDERED.
Cruz, Bidin, Grio-Aquino, Regalado, Romero, Nocon and Quiason, JJ., concur.
Puno and Vitug, JJ. took no part.

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 98028 January 27, 1992
GREGORIO CASTILLO, petitioner,
vs.
COURT OF APPEALS and ALBERTO IGNACIO, respondents.
Sumulong Law Offices for petitioner.
Bureau of Agrarian Legal Assistance for private respondent.
GUTIERREZ, JR., J.:
This is a petition for review of the Court of Appeals decision which reversed and set aside
the decision of the Regional Trial Court in Civil Case No. 8302-M and declared respondent
Alberto Ignacio as agricultural tenant of the petitioner.
On July 18, 1985, a complaint for injunction was filed by private respondent Alberto Ignacio
against petitioner Gregorio Castillo with the Regional Trial Court of Malolos, Bulacan.
It is alleged in the complaint that the respondent is the agricultural tenant of the petitioner
in the latter's parcel of land consisting of 9,920 square meters with fruit-bearing trees
situated in Cut-cut, Pulilan, Bulacan; that sometime in April 1985, the petitioner requested
the respondent to allow him to construct a resthouse in said land, and as a token of goodwill,
the respondent agreed, which agreement is embodied in a "Kasunduan" (Exhibit "C")
between them; that in violation of said agreement, the petitioner started to cut fruit-bearing
trees on the land in question and filled with adobe stones the area devoted by the private
respondent to the planting of vegetables.
The complaint asked for the issuance of a writ of preliminary injunction to enjoin the
petitioner from further cutting fruit-bearing trees and from committing further acts of
dispossession against the private respondent. The injunction was granted.
The petitioner, on the other hand, contends that the private respondent is not his
agricultural tenant; that respondent Alberto Ignacio is merely a "magsisiga" (smudger) of the

landholding in question; that he did not ask permission from the private respondent to
construct a rest house on subject land, since as owner thereof, he had the right to do so;
that he was merely exercising his right of ownership when he cut certain trees in the subject
premises; that when the barangay captain failed to settle the conflict and the matter was
referred to the MAR-BALA (Ministry of Agrarian Reform-Bureau of Agrarian Legal Assistance)
Office in Malolos, Bulacan, Atty. Benjamin Yambao of the MAR (Ministry of Agrarian Reform)
prepared the "Kasunduan" attached to the respondent's complaint, but when he (petitioner)
said that he had some misgivings about some words therein, Atty. Yambao assured him that
he need not worry because the respondent could not be a "kasamang magsasaka" of his
mango land because there is nothing to cultivate or till in said land, but he still corrected the
last part of par. 4 of said "Kasunduan" by making it read "sa kanilang matiwasay na
kaugnayan" before signing the same.
On September 28, 1988, the trial court rendered judgment declaring that no tenancy
relationship exists between the petitioner and the private respondent. The dispositive
portion of the decision reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered:
a) dismissing the above-entitled case, with costs against the plaintiff;
b) lifting the preliminary injunction issued on September 18, 1985 and declaring the same
legally inefficacious henceforth; and
c) directing the plaintiff no pay unto the defendant the amount of P10,000.00 as and for
attorney's fees.
From the above decision, the private respondent appealed to the Court of Appeals which
reversed and set aside the decision of the trial court. The respondent appellate court
declared that there exists a tenancy relationship between Alberto Ignacio and Gregorio
Castillo and permanently enjoined the latter from disturbing the respondent's peaceful
possession as tenant of said land.
Hence, the instant petition was filed, with the petitioner assigning the following errors as the
issues raised to us:
I
The Court of Appeals (Fourth Division) committed clear and patent error in reversing the
decision of the Regional Trial Court which is fully supported not only by substantial evidence
but by overwhelming evidence.
II
The Court of Appeals committed clear and reversible error and grave abuse of discretion in
declaring that "the relationship between plaintiff-appellant and defendant-appellee over the
mango land in question as one of agricultural tenancy" despite the patent judicial admission
of respondent Ignacio that he is merely a "magsisiga" of the mango land under litigation.
III
The Court of Appeals committed grave abuse of discretion in permanently enjoining
petitioner "from disturbing plaintiff-appellant's peaceful possession as tenant of said land,"
although private respondent is not in physical possession of the land, respondent Ignacio
being merely and admittedly a "magsisiga" of the mango land in question.
IV
The Court of Appeals committed clear and patent error in not ordering the termination of
any and all relationships between petitioner and private respondent, the latter having failed
to perform the work of "magsisiga" on the subject parcel of land and instead he obstructs
the driveway by scattering rubbish, dry leaves, dirt and other rubbish, preventing the
petitioner from proceeding to the premises of the land by putting up a barb wire fence which
are acts of harrassment, disturbing the peaceful possession of petitioner and which acts are
inimical to the continuation of any kind of relationship between Gregorio Castillo and Alberto
Ignacio.
The issue to be resolved in the present petition is whether or not a tenancy relationship
exists between the parties.
The Agricultural Tenancy Act defines "agricultural tenancy" as

. . . the physical possession by a person of a land devoted to agriculture belonging to or


legally possessed by, another for the purpose of production through the labor of the former
and of the members of his immediate farm household, in consideration of which the former
agrees to share the harvest with the latter, or to pay a price certain, either in produce or in
money, or in both. (Sec. 3, R.A. No. 1199; 50 O.G. 4655-56).
As held in the case of Qua v. Court of Appeals (198 SCRA 236 [1991]), the essential
requisites of tenancy relationship are: (1) the parties are the landowner and the tenant; (2)
the subject is agricultural land; (3) the purpose is agricultural production; (4) there is
consideration which consist of sharing the harvest; (5) there is consent to the tenant to work
on the land and (6) there is personal cultivation by him.
From the foregoing definition, the petitioner insists that for a person to claim tenancy
relationship, he must be an occupant or must be in physical possession of the agricultural
land. He alleges that, Alberto Ignacio, being a mere smudger (magsisiga) of the mango land,
no tenancy relationship can exist between them absent the element of physical possession.
In Gagola v. Court of Agrarian Relations (18 SCRA 992 [1966]), the Court held that a tenant
has possession of the land only through personal cultivation. Thus, in the instant case, the
key factor in ascertaining the existence of a landowner-tenant relationship is whether or not
there is personal cultivation of the land by the private respondent.
The trial court noted that:
Let alone or notwithstanding the use of the phrase "kasamang magsasaka" in the
Kasunduan(Exhibit C) relied upon by the plaintiff, there is no dispute that the actual role
ever played by the plaintiff vis-a-vis the land in litigation was that of a mere "magsisiga"
(smudger). Stated differently, plaintiff has never performed on the property in question any
of the acts of cultivation contemplated by the law as essential to the creation of an
agricultural tenancy relationship. In fine, it is the sense of the Court that absent the
important factor of cultivation, no tenancy relationship has ever existed between the plaintiff
and the defendant over the property involved in the instant case. At most and at best, the
contractual relationship between them was purely civil nature consisting solely of the
seasonal engagement of plaintiff's services as "magsisiga" or "taga-suob."
On this matter, the appellate court disagreed and noted instead that personal cultivation by
respondent Ignacio of petitioner land is clearly spelled out or admitted in the "Kasunduan"
(Exhibit "C") in view of the aforementioned provision therein that nobody except petitioner
and the members of his family could enter said land without said petitioner's written
permission.
We agree with the trial court that the element of personal cultivation is absent. The main
thrust of the petitioner's argument is that the respondent Court of Appeals is mandated by
law to affirm the decision of the Regional Trial Court, acting as an Agrarian Court, if the
findings of fact in said decision are supported by substantial evidence and the conclusions
stated therein are not clearly against the law and jurisprudence. On the other hand, the
private respondent contends that the findings of fact of the Court of Appeals are final and
conclusive on the parties and on the Supreme Court.
After painstakingly going over the records of the petition, we find no strong and cogent
reason which justifies the appellate court's deviation from the findings and conclusions of
the trial court. As pointed out in Hernandez v.Intermediate Appellate Court (189 SCRA 758
[1990]), in agrarian cases, all that is required is mere substantial evidence. Hence, the
agrarian court's findings of fact which went beyond the minimum evidentiary support
demanded by law, that is supported by substantial evidence, are final and conclusive and
cannot be reversed by the appellate tribunal.
Moreover, and as significantly held in Qua v. Court of Appeals (supra), the fact that the
source of livelihood of the private respondents is not derived from the lots they are allegedly
tenanting is indicative of non-agricultural tenancy relationship.
Under the facts obtaining in the case, respondent Ignacio is a businessman by occupation
and this is his principal source of income. He manufacturers hollow blocks. He also has a
piggery and poultry farm as well as a hardware store on the land adjoining the subject land.
To add to that, the respondent farms the riceland of one Dr. Luis Santos. It is thus evident

that the working hours of the respondent as a businessman and his other activities do not
permit him to undertake the work and obligations of a real tenant. This is further supported
by the undisputed fact that the respondent cannot even personally perform the work of a
smudger because on October 22, 1986, the respondent hired some 20 people who are not
members of his family to cut and burn the grass in the premises of the subject land.
Anent the element of consent, the petitioner contends that the best evidence and
imperishable proof of the relationship of the parties is that shown in the complaint filed by
private respondent with the barangay captain Tomas Mercado that he is a mere "magsisiga"
of the mango trees on the subject parcel of land. On the other hand, the respondent
appellate court said that the best proof of the existence of tenancy relationship is the
"Kasunduan" (Exhibit "C") and that under Section 7, Rule 130 of the Revised Rules of Court,
'when the subject of inquiry is the contents of a document, no evidence shall be admissible
other than the original document itself,' subject only to certain exceptions. Inasmuch as
substantial evidence does not only require the presence of a mere scintilla of evidence
(Berenguer, Jr. v. CA, 164 SCRA 433 [1988] citing Ang Tibay v. Court of Industrial Relations,
69 Phil. 635 [1940]), we rule that there is no concrete evidence on record sufficient to
establish that the element of consent is present. But even assuming arguendo that the
element of consent is present, we declared in De los Reyes v. Espineli (30 SCRA 574 [1969])
that absent the element of personal cultivation, one cannot be a tenant even if he is so
designated in the written agreement of the parties.
With respect to the requisite of sharing the harvests, the respondent appellate court
considered the receipt (Exhibit "E") signed by the petitioner's son Walderado Castillo as its
evidence. On this point, the petitioner has correctly argued that the receipt is inadmissible
on the ground that he did not participate in its execution.
The maxim "res inter alios acta altere nocere non debet," found in Section 28, Rule 130,
Rules of Court applies, for as stated in Gevero v. Intermediate Appellant Court (189 SCRA
201 [1990]) the right of a party cannot be prejudiced by an act, declaration, or omission of
another.
Also in pari materia is Caballes v. Department of Agrarian Reform (168 SCRA 247 [1988]),
that the fact of sharing alone is not sufficient to establish a tenancy relationship. Well-settled
is the rule that all the requisites must concur in order to create a tenancy relationship
between the parties and the absence of one or more requisites do not make the alleged
tenant a de facto tenant as contradistinguished from a de jure tenant. This is so because
unless a person has established his status as a de jure tenant, he is not entitled to security
of tenure nor is he covered by the Land Reform Program of the Government under existing
tenancy laws. (Qua v. Court of Appeals, supraciting Tiongson v. Court of Appeals, 130 SCRA
482 [1984]).
However, with respect to the award of attorney's fees by the trial court, the award of
P10,000.00 is unwarranted since the action appears to have been filed in good faith. There
should be no penalty on the right to litigate. (Ilocos Norte Electric Company v. Court of
Appeals, 179 SCRA 5 [1989] citing Espiritu v. Court of Appeals, 137 SCRA 50 [1985]).
WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals is
hereby REVERSED and SET ASIDE and the decision of the Regional Trial Court is REINSTATED
with the MODIFICATION that the award of attorney's fees is DELETED.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION

G.R. No. L-62626 July 18, 1984


SPOUSES CAYETANO and PATRICIA TIONGSON, SPOUSES EDWARD and PACITA GO,
SPOUSES ROBERTO and MYRNA LAPERAL III, ELISA R. MANOTOK, SPOUSES
IGNACIO and PACITA MANOTOK, SEVERINO MANOTOK, JR., SPOUSES FAUSTO and
MILAGROS MANOTOK, ROSA R. MANOTOK, Minors MIGUEL A. B. SISON and MA.
CRISTINA E. SISON, represented by their judicial guardian FILOMENA M. SISON,
SPOUSES MAMERTO and PERPETUA M. BOCANEGRA, GEORGE M. BOCANEGRA,
represented by his judicial guardian MAMERTO BOCANEGRA, SPOUSES FRANCISCO
and FILOMENA SISON, JOSE CLEMENTE MANOTOK, SPOUSES JESUS and THELMA
MANOTOK, Minors PHILIP MANOTOK, MARIA TERESA MANOTOK and RAMON
SEVERINO MANOTOK, represented by their judicial guardian SEVERINO MANOTOK,
JR., Minors JESUS JUDE MANOTOK, JR. and JOSE MARIA MANOTOK, represented by
their judicial guardian JESUS MANOTOK, petitioners,
vs.
HONORABLE COURT OF APPEALS and TEODORO S. MACAYA, respondents.
Romeo J. Callejo and Gil Venerando R. Racho for petitioners.
David Advincula Jr. and Jose J. Francisco for respondents.
GUTIERREZ, JR., J.:
In this petition for review on certiorari of the decision of the Court of, Appeal declaring the
existence of a landholder-tenant relationship and ordering the private respondent's
reinstatement, the petitioners contend that the appellate court committed an error of law in:
1. Disregarding the findings of fact of the Court of Agrarian Relations which are supported by
substantial evidence; and
2. Substituting the findings of fact of the Court of Agrarian Relations with its own findings.
Briefly, the facts of the case as found by the Court of Agrarian Relations, Seventh Regional
District, Branch 1 at Pasig, Metro Manila are as follows: Sometime in 1946, the late Severino
Manotok donated and transferred to his eight (8) children and two (2) grandchildren namely:
Purificacion Manotok, Eliza Manotok, Perpetua manotok, Filomena Manotok, Severino
Manotok, Jr., Jesus Manotok, Rahula Ignacio Manotok, Severino Manotok III, Fausto Manotok
and Rosa Manotok, a thirty-four-hectare lot located in Payong, Old Balara, Quezon City
covered by a certificate of title. Severino Manotok who was appointed judicial guardian of his
minor children 'accepted on their behalf the aforesaid donation. At that time, there were no
tenants or other persons occupying the said property.
In that same year, Teodoro Macaya accompanied by Vicente Herrera, the overseer of the
property, went to the house of Manotok in Manila and pleaded that he be allowed to live on
the Balara property so that he could at the same time guard the property and prevent the
entry of squatters and the theft of the fruits and produce of the fruit trees planted by the
owner. Manotok allowed Macaya to stay in the property as a guard (bantay) but imposed the
conditions that at any time that the owners of the property needed or wanted to take over
the property, Macaya and his family should vacate the property immediately; that while he
could raise animals and plant on the property, he could do so only for his personal needs;
that he alone could plant and raise animals on the property; and that the owners would have
no responsibility or liability for said activities of Macaya. Macaya was allowed to use only
three (3) hectares. These conditions, however, were not put in writing.
On December 5, 1950, the property-owners organized themselves into a corporation
engaged primarily in the real estate business known as the Manotok Realty, Inc. The owners
transferred the 34-hectare lot to the corporation as part of their capital contribution or
subscription to the capital stock of the corporation.
From 1946 to 1956, Macaya did not pay, as he was not required to pay anything to the
owners or corporation whether in cash or in kind for his occupancy or use of the property.
However, the corporation noted that the realty taxes on the property had increased
considerably and found it very burdensome to pay the said taxes while on the other hand,
Macaya had contributed nothing nor even helped in the payment of the taxes. Thus, Macaya

upon the request of the owners agreed to help by remitting ten (10) cavans of palay every
year as his contribution for the payment of the realty taxes beginning 1957.
On June 5, 1964, the corporation requested Macaya to increase his contribution from ten
(10) cavans to twenty (20) cavans of palay effective 1963 because the assessed value of the
property had increased considerably. Macaya] agreed.
In 1967, Macaya informed the corporation that he could not afford anymore to deliver any
palay because the palay dried up. He further requested that in the ensuring years, he be
allowed to contribute only ten (10) cavans of palay. The corporation said that if that was the
case, he might as well not deliver anymore. Thus, from 1967 up to 1976, Macaya did not
deliver any palay.
On January 31, 1974, Manotok Realty, Inc. executed a "Unilateral Deed of Conveyance" of
the property in favor of Patricia Tiongson, Pacita Go, Roberto Laperal III, Elisa Manotok, Rosa
Manotok, Perpetua M. Bocanegra, Filomena M. Sison, Severino Manotok, Jr., Jesus Manotok,
Ignacio S. Manotok, Severino Manotok III and Fausto Manotok.
Sometime in 1974, Macaya was informed by the Manotoks that they needed the property to
construct their houses thereon. Macaya agreed but pleaded that he be allowed to harvest
first the planted rice before vacating the property.
However, he did not vacate the property as verbally promised and instead expanded the
area he was working on.
In 1976, the Manotoks once more told Macaya to vacate the entire property including those
portions tilled by him. At this point, Macaya had increased his area from three (3) hectares to
six (6) hectares without the knowledge and consent of the owners. As he was being
compelled to vacate the property, Macaya brought the matter to the Department (now
Ministry) of Agrarian Reforms. The Manotoks, during the conference before the officials of
the Department insisted that Macaya and his family vacate the property. They threatened to
bulldoze Macaya's landholding including his house, thus prompting Macaya to file an action
for peaceful possession, injunction, and damages with preliminary injunction before the
Court of Agrarian Relations.
The sole issue to be resolved in the present petition is whether or not a tenancy relationship
exists between the parties. The Court of Agrarian Relations found that Macaya is not and has
never been a share or leasehold tenant of Severino Manotok nor of his successors-in-interest
over the property or any portion or portions thereof but has only been hired as a watchman
or guard (bantay) over the same. On Macaya's appeal from the said decision, the respondent
appellate court declared the existence of an agricultural tenancy relationship and ordered
Macaya's reinstatement to his landholding.
Since what is involved ed is agricultural tenancy, we refer to Republic Act No. 1199 as
amended by Republic Act No. 2263. Section 3 thereof defines agricultural tenancy as:
xxx xxx xxx
... the physical possession by a person of land devoted to agriculture belonging to, or legally
possessed by, another for the purpose of production through the labor of the former and of
the members of his immediate farm household, in consideration of which the former agrees
to share the harvest with the latter, or to pay a price certain, either in produce or in money,
or in both.
Thus, the essential requisites of tenancy relationship are: 1) the parties are the landholder
and the tenant; 2) the subject is agricultural land; 3) there is consent; 4) the purpose is
agricultural production; and 5) there is consideration (Agustin, Code of Agrarian Reforms of
the Philippines, 1981, p. 19). As
xxx xxx xxx
All these requisites are necessary in order to create tenancy relationship between the parties
and the absence of one or more requisites do not make the alleged tenant a de facto tenant,
as contra-distinguished from a de jure tenant, This is so because unless a person has
established his status as a de jure tenant, he is not entitled to security of tenure nor is he
covered by the Land Reform Program of the Government under existing tenancy laws. ...
The key factor in ascertaining whether or not there is a landowner-tenant relationship in this
case is the nature of the disputed property.

Is the thirty-four (34) hectare lot, of which the six (6) hectares occupied by the private
respondent form a part, against agricultural land? If not, the rules on agrarian reform do not
apply.
From the year 1948 up to the present, the tax declarations of real property and the annual
receipts for real estate taxes paid have always classified the land as "residential". The
property is in Balara, Quezon City, Metro Manila, not far from the correctly held by the trial
court:
University of the Philippines and near some fast growing residential subdivisions. The
Manotok family is engaged in the business of developing subdivisions in Metro Manila, not in
farming.
The trial court observed that a panoramic view of the property shows that the entire 34
hectares is rolling forestal land without any flat portions except the small area which could
be planted to palay. The photographs of the disputed area show that flush to the plantings of
the private respondent are adobe walls separating expensive looking houses and residential
lots from the palay and newly plowed soil. Alongside the plowed or narrowed soil are
concrete culverts for the drainage of residential subdivisions. The much bigger portions of
the property are not suitable for palay or even vegetable crops.
The trial court noted that in a letter dated April 12, 1977, the City Engineer of Quezon City
certified on the basis of records in his office that the property in question falls within the
category of "Residential I Zone."
The respondent court ignored all the above considerations and noted instead that the
appellees never presented the tax declarations for the previous year, particularly for 1946,
the year when Macaya began cultivating the property. It held that while the petitioners at
that time might have envisioned a panoramic residential area of the disputed property, then
cogonal with some forest, that vision could not materialize due to the snail pace of urban
development to the peripheral areas of Quezon City where the disputed property is also
located and pending the consequent rise of land values. As a matter of fact, it found that the
houses found thereon were constructed only in the 70's.
Whatever "visions" the owners may have had in 1946, the fact remains that the land has
always been officially classified as "residential" since 1948. The areas surrounding the
disputed six hectares are now dotted with residences and, apparently, only this case has
kept the property in question from being developed together with the rest of the lot to which
it belongs. The fact that a caretaker plants rice or corn on a residential lot in the middle of a
residential subdivision in the heart of a metropolitan area cannot by any strained
interpretation of law convert it into agricultural land and subject it to the agrarian reform
program.
On this score alone, the decision of the respondent court deserves to be reversed.
Another requisite is that the parties must be landholder and tenant. Rep. Act No. 11 99 as
amended defines a landholder
Sec. 5(b) A landholder shall mean a person, natural or juridical, who, either as owner, lessee,
usufructuary, or legal possessor, lets or grants to another the use or cultivation of his land
for a consideration either in shares under the share tenancy system, or a price certain under
the leasehold tenancy system.
On the other hand, a tenant is defined as
Sec. 5(a) A tenant shall mean a person who, himself and with the aid available from within
his immediate farm household, cultivates the land belonging to, or possessed by, another
with the latter's consent for purposes of production, sharing the produce with the landholder
under the share tenancy system or paying to the landholder a price certain in produce or in
money or both, under the leasehold tenancy system.
Under these definitions, may Macaya be considered as a tenant and Manotok as a
landholder? Significant, as the trial court noted, is that the parties have not agreed as to
their contributions of the several items of productions such as expenses for transplanting,
fertilizers, weeding and application of insecticides, etc. In the absence of an agreement as to
the respective contributions of the parties or other terms and conditions of their tenancy

agreement, the lower court concluded that no tenancy relationship was entered into
between them as tenant and landholder.
On this matter, the respondent Appellate Court disagreed. It held that:
... Whether the appellant was instituted as tenant therein or as bantay, as the appellees
preferred to call him, the inevitable fact is that appellant cleared, cultivated and developed
the once unproductive and Idle property for agricultural production. Appellant and Don
Severino have agreed and followed a system of sharing the produce of the land whereby,
the former takes care of all expenses for cultivation and production, and the latter is only
entitled to 10 cavans of rice per harvest. This is the essense of leasehold tenancy.
It should be noted, however, that from 1967 to the present, Macaya did not deliver any
cavans of palay to the petitioners as the latter felt that if Macaya could no longer deliver the
twenty (20) cavans of palay, he might as well not deliver any. The decision of the petitioners
not to ask for anymore contributions from Macaya reveals that there was no tenancy
relationship ever agreed upon by the parties. Neither can such relationship be implied from
the facts as there was no agreed system of sharing the produce of the property. Moreover,
from 1946 to 1956 at which time, Macaya was also planting rice, there was no payment
whatsoever. At the most and during the limited period when it was in force, the arrangement
was a civil lease where the lessee for a fixed price leases the property while the lessor has
no responsibility whatsoever for the problems of production and enters into no agreement as
to the sharing of the costs of fertilizers, irrigation, seedlings, and other items. The private
respondent, however, has long stopped in paying the annual rents and violated the
agreement when he expanded the area he was allowed to use. Moreover, the duration of the
temporary arrangement had expired by its very terms.
Going over the third requisite which is consent, the trial court observed that the property in
question previous to 1946 had never been tenanted. During that year, Vicente Herrera was
the overseer. Under these circumstances, coupled by the fact that the land is forested and
rolling, the lower court could not see its way clear to sustain Macaya's contention that
Manotok had given his consent to enter into a verbal tenancy contract with him. The lower
court further considered the fact that the amount of ten (10) cavans of palay given by
Macaya to the owners from 1957 to 1964 which was later increased to twenty (20) cavans of
palay from 1964 to 1966 was grossly disproportionate to the amount of taxes paid by the
owners. The lot was taxed as residential land in a metropolitan area. There was clearly no
intention on the part of the owners to devote the property for agricultural production but
only for residential purposes. Thus, together with the third requisite, the fourth requisite
which is the purpose was also not present.
The last requisite is consideration. This is the produce to be divided between the landholder
and tenant in proportion to their respective contributions. We agree with the trial court that
this was also absent.
As earlier stated, the main thrust of petitioners' argument is that the law makes it
mandatory upon the respondent Court of Appeals to affirm the decision of the Court of
Agrarian Relations if the findings of fact in said decision are supported by substantial
evidence, and the conclusions stated therein are not clearly against the law and
jurisprudence. On the other hand, private respondent contends that the findings of the Court
of Agrarian Relations are based not on substantial evidence alone but also on a
misconstrued or misinterpreted evidence, which as a result thereof, make the conclusions of
the Court of Agrarian Relations clearly contrary to law and jurisprudence.
After painstakingly going over the records of the case, we find no valid and cogent reason
which justifies the appellate court's deviation from the findings and conclusions of the lower
court. It is quite clear from the 44-page decision of the trial court, that the latter has taken
extra care and effort in weighing the evidence of both parties of the case. We find the
conclusions of the respondent appellate court to be speculative and conjectural.
It bears re-emphasizing that from 1946 to 1956, there was no agreement as to any system
of sharing the produce of the land. The petitioners did not get anything from the harvest and
private respondent Macaya was using and cultivating the land free from any charge or

expense. The situation was rather strange had there been a tenancy agreement between
Don Severino and Macaya.
From 1957 to 1964, Macaya was requested to contribute ten (10) cavans a year for the
payment of the realty taxes. The receipts of these contributions are evidenced by the
following exhibits quoted below:
(a) Exhibit "4" adopted and marked as Exhibit "K" for plaintiff (Macaya):
Ukol sa taon 1961
Tinanggap naniin kay G. Teodoro Macaya ang sampung (10) cavan na palay bilang tulong
niya sa pagbabayad ng amillaramiento sa lupa ng corporation na nasa Payong, Q.C. na
kaniyang binabantayan.
(b) Exhibit "9" adopted and marked as Exhibit "L" for plaintiff (Macaya):
Tinanggap namin kay Ginoong Teodoro Macaya ang TATLONG (3) kabang palay bilang
kapupunan sa DALAWAMPUNG (20) kabang palay na kanyang tulong sa pagbabayad ng
amillaramiento para sa taong 1963 ng lupang ari ng Manotok Realty, Inc. na nasa Payong,
Quezon City, na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION
PANGTIRAHAN.
c) Exhibit "10" adopted and marked as Exhibit "N" for plaintiff (Macaya):
Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang palay na
kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1964 ng lupang ari ng
Manotok Realty Inc., na nasa Payong, Quezon City, na kanyang binabantayan samantalang
hindi pa ginagawang SUBDIVISION PANG TAHANAN.
d) Exhibit "11" adopted and marked as Exhibit "M" for plaintiff (Macaya):
Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang ng palay na
kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1965 ng lupang ari ng
Manotok Realty, Inc., na nasa Payong, Quezon City, na kanyang binabantayan samantalang
hindi pa ginagawang SUBDIVISION PANG TAHANAN.
From the above-quoted exhibits, it clearly appears that the payment of the cavans of palay
was Macaya's contribution for the payment of the real estate taxes; that the nature of the
work of Macaya is that of a watchman or guard (bantay); and, that the services of Macaya as
such watchman or guard (bantay) shall continue until the property shall be converted into a
subdivision for residential purposes.
The respondent appellate court disregarded the receipts as self-serving. While it is true that
the receipts were prepared by petitioner Perpetua M. Bocanegra, Macaya nevertheless
signed them voluntarily. Besides, the receipts were written in the vernacular and do not
require knowledge of the law to fully grasp their implications.
Furthermore, the conclusion of the respondent appellate court to the effect that the receipts
having been prepared by one of the petitioners who happens to be a lawyer must have been
so worded so as to conceal the real import of the transaction is highly speculative. There
was nothing to conceal in the first place since the primary objective of the petitioners in
allowing Macaya to live on the property was for security purposes. The presence of Macaya
would serve to protect the property from squatters. In return, the request of Macaya to raise
food on the property and cultivate a three-hectare portion while it was not being developed
for housing purposes was granted.
We can understand the sympathy and compassion which courts of justice must feel for
people in the same plight as Mr. Macaya and his family. However, the petitioners have been
overly generous and understanding of Macaya's problems. For ten years from 1946 to 1956,
he lived on the property, raising animals and planting crops for personal use, with only his
services as "bantay" compensating for the use of another's property. From 1967 to the
present, he did not contribute to the real estate taxes even as he dealt with the land as if it
were his own. He abused the generosity of the petitioners when he expanded the permitted
area for cultivation from three hectares to six or eight hectares. Mr. Macaya has refused to
vacate extremely valuable residential land contrary to the clear agreement when he was
allowed to enter it. The facts of the case show that even Mr. Macaya did not consider himself
as a true and lawful tenant and did not hold himself out as one until he was asked to vacate
the property.

WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals is
hereby REVERSED and SET ASIDE and the decision of the Court of Agrarian Relations is
AFFIRMED.
SO ORDERED.
Teehankee (Chairman), Plana, Relova and De la Fuente, JJ., concur.
Melencio-Herrera, J., is on leave.

FIRST DIVISION
[G.R. No. L-28135. September 10, 1981.]
JOSE MATIENZO, plaintiff-appellant, vs. MARTIN SERVIDAD, defendant-appellee.
Alberto
A.
Reyes for
Vicente F. Camacho, Jr. for defendant-appellee.

plaintiff-appellant.

SYNOPSIS
In a private document agreed upon between appellant and appellee, appellant was
made head-overseer over a 7-hectare land belonging to appellee. Under the agreement,
appellant was to supervise applications for loans from those residing therein; he was allowed
to build his house thereon and plant specified plants without being compensated; he was

free to clear and plant the land as long as he wished; he had no sharing arrangement with
appellee; and he was not obligated to pay any price certain to, nor share the produce with,
the latter. Subsequently, the parties entered into another agreement regarding upland
planting and copra-making for the year 1963, pursuant to which, appellant and his wife were
made "caretakers" of the land. Under this second agreement, appellant would receive 1/3 of
the copra as payment for processing, but as in the first agreement, there was a definite
provision that appellee would not share in the produce of appellant's plants. In 1964,
appellee prohibited appellant from interfering with the plants and from planting and clearing
the land stating that they had no agreement yet for that year. Efforts to settle the difference
between the parties failed. Thus, appellant filed a suit for illegal ejectment against appellee,
where he stated that in view of his strained relationship with appellee, he was waiving his
right to reinstatement provided he be paid reasonable compensation for the improvements
he had introduced on the land, plus actual and moral damages. The trial Court dismissed the
case based on the Report of the Court-appointed Commissioner. Hence, this Petition.
The Supreme Court held, that it is clear from the agreements entered into between the
parties that their intention was to make appellant an overseer of appellee and not a tenant,
there being no sharing arrangement between them.
Petition dismissed.
SYLLABUS
1.
CIVIL LAW; CONTRACTS; INTERPRETATION OF; SOME BASIC PRINCIPLES. When
there is no doubt as to the intention of the contracting parties, its literal meaning shall
control (Art. 1370, New Civil Code; Cebu Portland Cement Co.vs. Dumon, 61 SCRA 218).
Article 1372 of the New Civil Code further provides that however general the terms of a
contract may be, they shall not be understood to comprehend things that are distinct and
cases that are different from those upon which the parties intended to agree (Rep. vs. Vda.
de Castellvi, 58 SCRA 336). Therefore, a meaning other than that expressed or an
interpretation which would alter its strict and literal significance should not, be given to it
(City of Manila vs. Rizal Park Co., 53 Phil. 515). Moreover, the entirety of the contract must
be taken into consideration to ascertain the meaning of its provision (Ruiz vs. Sheriff of
Manila, 34 SCRA 83).
2.
ID.; ID.; ID.; 1D.; CONTRACT IN CASE AT BAR CLEARLY SHOWS THAT PLAINTIFFAPPELLANT IS AN OVERSEER. It is clear from Exhibit C that plaintiff was made an overseer
of defendant, not a tenant. It was likewise expressly stipulated therein that "the conditions
for clearing the land are these: With respect to all your plants we will share no percentage
for the land." And again, "all those (coconuts) that we are to plant no share will be taken for
the land." The basic element of sharing in agricultural tenancy, therefore, is absent. The
one-third share plaintiff received from copra-making constituted payments for the
processing of copra which are evidenced by receipts. Plaintiff also got paid for clearing the
coconuts.
3.
LABOR AND SOCIAL LEGISLATION; AGRICULTURAL TENANCY ACT (R.A. 1199);
TENANCY RELATIONSHIP; TENANT, DEFINED. A tenant is defined under Section 5(a) of
Republic Act No. 1199 as a person, who, himself, and with the aid available from within his
immediate household, cultivates the land belonging to or possessed by another, with the
latter's consent for purposes of production, sharing the produce with the landholder under
the share tenancy system, or paying to the landholder a price certain or ascertainable in
produce or in money or both, under the leasehold tenancy system.
4.
ID.; ID.; ID.; SHARING ARRANGEMENT, AN ESSENTIAL ELEMENT THEREOF; ABSENT IN
CASE AT BAR. In the case at bar, there is no tenancy relationship between the parties in
view of the absence of a sharing arrangement. What transpired was that plaintiff was made
overseer over a 7-hectare land area; he was to supervise applications for loans from those
residing therein; he was allowed to build his house thereon and to plant specified plants
without being compensated; he was free to clear and plant the land as long as he wished; he

had no sharing arrangement with defendant; and he was not obligated to pay any price
certain to nor share the produce with, the latter.
5.
ID.; ID.; ID.; RULING THAT CARETAKER IS CONSIDERED CULTIVATOR OF THE LAND,
NOT APPLICABLE IN CASE AT BAR; REASON. Although Exhibit 6 states that plaintiff and his
wife were made "caretakers" of the land, there is a definite provision in both Exhibits C and 6
that defendant would not share in the produce of plaintiff's plants. Because of this aspect,
the ruling in Latag vs. Banog, 16 SCRA 88 (1906), which holds that a "caretaker of an
agricultural land is also considered cultivator of the land," finds no applicability.
6.
REMEDIAL LAW; CIVIL PROCEDURE; APPEAL; ISSUES NOT RAISED IN TRIAL COURT
CANNOT BE RAISED FOR FIRST TIME ON APPEAL. Plaintiff's assertions that the trial Court
committed grave error in failing to notify the parties of the filing of the Commissioner's
Report; in not giving them ten days to object thereto pursuant to Section 10, Rule 33 of the
Rules of Court; and in failing to set the Report for hearing in accordance with Section 11 of
the same Rule, have been raised for the first time on appeal. It is a well-settled rule that
issues not raised in the trial Court cannot be raised for the first time on appeal.
DECISION
MELENCIO-HERRERA, J p:
Under review is the judgment of the Court of Agrarian Relations, Branch I, Naga City, in
CAR Case No. 920-CS-64, entitled "Jose Matienzo vs. Martin Servidad," dismissing plaintiff's
action for Reinstatement, Reliquidation and Damages. This case was certified to us by the
Court of Appeals on September 20, 1967, the principal issue being one of law, particularly,
the interpretation of the contracts between the parties.
The controversy stemmed from the following uncontroverted facts:
Defendant Martin Servidad is the owner of a sixteen hectare agricultural land situated
at Barrio Binahian, Sipocot, Camarines Sur. On April 16, 1961, he and plaintiff Jose Matienzo
executed a private instrument 1 handwritten in the dialect of the locality by Feliza Servidad,
wife of defendant Martin Servidad 2 , and translated into English as follows:
"I Jose Matienzo, Elenita Robles, we husband and wife were instituted head-overseer in the
land of Martin and Feliza de Servidad who will take care of their plants. Whoever resides in
our land will have to obey the head-overseer as we have then authorized to supervise the
landholding. Like borrowing loans needed if there is no letter from the Head-overseer to us
we will not accommodate. So that whatever need you have you must inform the Headoverseer as the latter is the one to inform us.
The conditions for clearing the land are these: With respect to all your plants we will share
no percentage for the land. But you will have to plant coconut in our land. We will not pay as
this is our conditions. You are free to clear and plant the land as long as you wish. We must
help one another for our betterment. Let us not do anything prejudicial to others. Let's do
the best as it is better.
To show our conformity to the terms given by Martin and Feliza de Servidad, we signed
in the presence of two witnesses this date." (Emphasis supplied)
Witnesses:
1.
Jose Matienzo
2.
Paulino Ponayo
3.
S. Ralles.
The area entrusted to plaintiff was seven hectares, on a portion of which he
constructed his house.
On January 1, 1963, the parties entered into another agreement concerning the
conditions of copra making and upland planting for the year 1963. 3 This was again
handwritten in the local dialect by Feliza Servidad. 4 The English translation of the agreement
reads:
"Condition in Copra Making and Upland
Planting This Year 1963.
Binahian, Sipocot, Camarines Sur.

"I, JOSE MATIENZO and ELENITA ROBLES, husband and wife, are hereby made caretakersof
the land of Martin Servidad and Feliza de Servidad, and, when we arrived on their land all
plants are productive.
The condition given to us in copra making is one third, but before we begin copra making,
we are to clean the plantation and everytime we make copra we separate nuts for seedling.
We are given one male carabao (castrated). The condition for upland planting is this: all
those that we are to plant no share will be taken for the land, but we are also to plant
coconut, coffee, abaca, and the owner shall not pay the same. Before I signed this I have
read the same. In truth we agree to the condition given to me, and I signed this 1st day of
January, 1963 before two witnesses. In the year 1964 new agreement will be made.
(Emphasis ours)
SGD.
Jose
Matienzo
Elenita
Robles
Sgd.
Pedro
Moreno

Barrio
Lieut.
Sgd. Jose Bacho
Jose Matienzo
Elenita Robles"
Plaintiff planted bananas, bancocan, coffee, coconuts, breadfruits, abaca and some
auxiliary crops. He also looked after the coffee and abaca plants of defendant, as well as the
latter's goats entrusted to his care. For clearing the coconut plantation, he was paid per
coconut tree he cleared. For his labor in making copra, he was paid 1/3 of the copra he
made. Other persons who made copra therein were also correspondingly paid.
On January 30, 1964, defendant wrote plaintiff telling him not to "interfere with the
plants" as they had no agreement yet for that year, and that being the landowner, he should
be the one to decide in accordance with the "tenancy law." 5 On March 4, 1964, defendant
sent another letter to plaintiff prohibiting him from planting and clearing the land for the
same reason. 6 Plaintiff sought the assistance of the Office of the Agrarian Counsel in Naga
City. Efforts to settle the case amicably failed, as a consequence of which, plaintiff brought
an action against defendant in the Court of Agrarian Relations of Naga City praying that
defendant be held guilty of illegal ejectment; that in view of the strained relationship with
defendant, he was waiving his right to reinstatement provided he be paid reasonable
compensation for his improvements; and that defendant be ordered to pay him actual and
moral damages.
The case was heard by Judge Valeriano A. del Valle, then by Judge Agustin Frivaldo, and
terminated by Commissioner Benjamin G. Fernandez, who was appointed by the Court to
hear the case on January 20, 1966, with the consent of the parties. 7 Based on the
Commissioner's Report, which was adopted in toto by the Court, a judgment was rendered
on May 17, 1966 dismissing the suit for lack of merit. Plaintiff moved for reconsideration, but
this was denied. In its judgment, the Court a quo specifically made a finding that plaintiff
had expressly waived his right to reinstatement "on account of his strained relationship with
defendant."
Plaintiff appealed to the Court of Appeals, which Court, however, as hereinabove
stated, certified the case to us on the theory that "where the issue is the construction or
interpretation of contracts, or where all the facts are stated in the judgment and the issue is
the conclusion drawn therefrom, the question is one of law reviewable by the Supreme
Court." 8
Plaintiff has assigned the following errors:
I
"The lower Court erred in holding that appellant is merely an overseer of appellee over the
landholding in question.
II
The Court a quo committed a grave error in considering exhibits '2', 'C', & 'C-1', as contracts
that established merely an overseer relationship between the appellant and appellee; in this
regard the Court a quo deviated from the established procedures in determining the nature
of a contract.
III
The Court a quo committed a grave error in authorizing the ejectment of appellant.

IV
The Court failed to observe the requirements of Sections 10 & 11, Rule 33 of the New Rules
of Court."
The sole issue for determination is whether under the parties' agreements, plaintiff was
instituted as an overseer or as a tenant by defendant.
To start with, a few basic principles on the interpretation of contracts should be
reiterated. When there is no doubt as to the intention of the contracting parties, its literal
meaning shall control. 9 Article 1372 of the New Civil Code further provides that however
general the terms of a contract may be, they shall not be understood to comprehend things
that are distinct and cases that are different from those upon which the parties intended to
agree. 10 Therefore, a meaning other than that expressed or an interpretation which would
alter its strict and literal significance should not be given to it. 11 Moreover, the entirety of
the contract must be taken into consideration to ascertain the meaning of its provisions. 12
It is clear from Exhibit C that plaintiff was made an overseer of defendant, not a tenant.
It was likewise expressly stipulated therein that "the conditions for clearing the land are
these: With respect to all your plants we will share no percentage for the land." And again,
"all those (coconuts) that we are to plant no share will be taken for the land." 13 The basic
element of sharing in agricultural tenancy, therefore, is absent. The one-third share plaintiff
received from copra-making constituted payments for the processing of copra. These are
evidenced by receipts. 14 Plaintiff also got paid for clearing the coconuts as shown by Exhibits
7 and 7-A. 15
A tenant is defined under section 5(a) of Republic Act No. 1199 as a person who,
himself, and with the aid available from within his immediate household, cultivates the land
belonging to or possessed by another, with the latter's consent for purposes of production,
sharing the produce with the landholder under the share tenancy system, or paying to the
landholder a price certain or ascertainable in produce or in money or both, under the
leasehold tenancy system. From the above definition of a tenant, it is clear that absent a
sharing arrangement, no tenancy relationship had ever existed between the parties. What
transpired was that plaintiff was made overseer over a 7-hectare land area; he was to
supervise applications for loans from those residing therein; he was allowed to build his
house thereon and to plant specified plants without being compensated; he was free to clear
and plant the land as long as he wished; he had no sharing arrangement between him and
defendant; and he was not obligated to pay any price certain to, nor share the produce with,
the latter.
Although Exhibit 6 states that plaintiff and his wife were made "caretakers" of the land,
there is a definite provision in both Exhibits C and 6 that defendant would not share in the
produce of plaintiff's plants. Because of this aspect, the ruling in Latag vs. Banog, 16 SCRA
88 (1966), which holds that a "caretaker of an agricultural land is also considered cultivator
of the land," finds no applicability.
Besides, even if we were to rule that plaintiff is a tenant, the whole exercise would
become academic since he has waived his right to reinstatement.
With respect to the fourth assignment of error, plaintiff asserts, for the first time, that
the trial Court committed grave error in failing to notify the parties of the filing of the
Commissioner's Report, and in not giving them ten days to object thereto pursuant to
Section 10, Rule 33 of the Rules of Court. He also claims that the Court failed to set the
Report for hearing in accordance with Section 11 of the same Rule. Be that as it may, well
established is the rule that issues not raised in the trial Court can not be raised for the first
time on appeal.
WHEREFORE, the Petition is hereby dismissed.
SO ORDERED.
Teehankee (Chairman), Makasiar, Fernandez and Guerrero, JJ ., concur.

Republic
of
the
Philippines
SUPREME
COURT
Manila
EN BANC
G.R. No. L-20098
January 31, 1966
SILVERIO
LATAG, plaintiff-appellant,
vs.
MARCELO BANOG, defendant-appellee.
Endaya,
Caleasal
and
Delgado
for
the
plaintiff-appellant.
Suanes, Barbosa and Atienza for the defendant-appellee.
ZALDIVAR, J.:
This is an appeal from the order of the Court of First Instance of Batangas dismissing the
complaint in its Civil Case No. 1263, on the ground that said court has no jurisdiction to take
cognizance of the case.
On February 13, 1962 the plaintiff-appellant filed a complaint against the defendant-appellee
alleging, in substance: that the defendant is the absolute owner of two parcels of land
situated in Barrio Quilib, Rosario, Batangas; that on December 7, 1960, the plaintiff and the
defendant entered into a written contract whereby it was agreed that the former was to act
as manager, cultivator and caretaker of the two parcels of land owned by the latter, and of
all the useful plants planted, and to be planted, on said lands, with the understanding that
all the products of the orange and the calamansi trees planted thereon would be divided into
three equal parts; two-thirds of which would be the share of the plaintiff and one-third would
be the share of the defendant, while the sharing in the other products like coffee, bananas,
mangoes, black pepper and others would be on the fifty-fifty basis; and it was further agreed
that said relationship and sharing would continue for a period of five years from December
7, 1960; that pursuant to said agreement the plaintiff entered into the management,
cultivation and care of the above-mentioned properties, and had built a house costing
P70.00 on one of the two parcels of land, that the plaintiff had incurred actual expenses in
the total amount of P2,286.80 aside from other miscellaneous expenses for food and viand
of his laborers; that on January 11, 1962, without any legal ground nor justification
whatsoever the defendant drove the plaintiff out of the lands and even destroyed the house
that the plaintiff had built thereon; that notwithstanding all efforts of the plaintiff to make
the defendant comply with his part of the agreement in their written contract, the defendant
had adamantly refused. The complaint prayed that judgment be rendered ordering the
defendant to pay the plaintiff actual damages in the amount of P2,656.80, unrealized profits
in the amount that the court would fix after hearing the evidence, moral damages in the
amount of at least P5,000.00, exemplary damages in the amount of at least P5,000.00, plus

attorney's fees equivalent to 20% of the total amounts collected and the costs of the suit. A
copy of the written agreement in question was attached to the complaint as Annex "A".
On March 2, 1962 the defendant filed a motion to dismiss the complaint on the ground that
the court has no jurisdiction to take cognizance of the case and that the complaint did not
state a cause of action. It is contended by the defendant that, based on the allegations in
the complaint and as stated in the written agreement which was attached to the complaint
as Annex "A", a relationship of landlord and tenant had existed between the plaintiff and the
defendantthe plaintiff being the tenant and the defendant being the landlord, and the
complaint being one that seeks to secure a decision or settlement of differences or disputes
in connection with the relationship of landlord and tenant involving the cultivation and use of
agricultural land, it is the Court of Agrarian Relations and not the Court of First Instance that
has jurisdiction to hear and decide the case. The defendant points out that the complaint of
the plaintiff poses the question of whether the act of the defendant, as landlord, in
dispossessing the plaintiff, as tenant, of the two parcels of land was justified or not under
the law.
On March 5, 1962, the plaintiff filed an opposition to the motion to dismiss the complaint and
at the same time moved to amend the original complaint by striking out the words
"cultivator" and "cultivation" in paragraphs 3 & 4, of the original complaint, claiming that the
one who drafted the original complaint was not well versed in Tagalog such that the phrase
"tagapamahala at tagapagalaga" was translated into "manager, cultivator and caretaker"
whereas that phrase "tagapamahala at tagapagalaga" ought to be translated into English
only as "manager and caretaker" without including any statement about cultivation. In his
opposition to the motion to dismiss the plaintiff contends that in the contract, Annex A to the
complaint, no tenancy relationship was agreed upon and the complaint was intended to
recover damages so that it is the court of general jurisdiction, which is the Court of First
Instance, and not the Court of Agrarian Relations, which is a court of limited jurisdiction, that
has competence to hear and decide the case.1wph1.t
On March 27, 1962 the Court of First Instance of Batangas, acting on the motion to dismiss
the complaint, issued an order dismissing the case. In its order of dismissal the court a
quo stated:
This Court believes and so holds that the argument of the defendant is well-taken, and
agrees with him that the document, Annex "A", indicates the existence of tenancy
relationship between the plaintiff and the defendant, considering the ruling of our Supreme
Court in the case of Teodorico B. Santos vs. Court of Industrial Relations, et al., G.R. No. L17196, prom. Dec. 28, 1961, "that any matter that may pertain to the relation of tenant and
landlord comes under the Agricultural Tenancy and any controversy that may arise between
them as an incident of their Act (Republic Act No. 1199, as amended by Republic Act No.
2263) and any controversy that may arise between them as an incident of their relationship
comes under the exclusive jurisdiction of the Court of Agrarian Relations created by Republic
Act. No. 1267. It was created for enforcement of all laws and regulations governing the
relation of capital and labor on all agricultural lands under any system of cultivation (Section
1, Rep. Act No. 1267, as amended by Republic Act No. 1409) and was given exclusive
jurisdiction over the entire Philippines to consider, disputes established by law which
determine the varying rights of persons in the cultivation and use of agricultural land where
one of the parties works the land", and so this Court believes and so declares that it has no
jurisdiction to pass upon the issues of the case at bar, falling as they do, according to the
above citation under the exclusive jurisdiction of the Court of Agrarian Relations.
Before this Court, plaintiff-appellant insists that the contract (Annex A) does not establish
any tenancy relationship, or if it did, such relationship had already ceased inasmuch as he
does not ask for reinstatement as tenant. He claims that this case is a simple suit for
damages which the Court of Agrarian Relations cannot take cognizance of, it being a court of
special and limited jurisdiction.
The contract (Annex A) contains the following pertinent stipulations:
Na si Silverio Latag, ganap sa gulang, Filipino, asawa ni Cipriana Alday at naninirahan sa
Tambo, Lipa City ay aking ginawang tagapamahala at tagapag-alaga sa naulit na lupa; na

siya rin ang mamomosession, mamamahala sa mga halamang nakatanim at itatanim sa


lupang naulit sa loob ng limang taon.
Na si Silverio Latag, ang mag-aalaga sa mga halaman ng lupang nabanggit; na ang lahat ng
kagastusang maaaring makamit o kailanganin sa pag-aalaga ay siyang lahat ang
nakakaalam; at walang PAKIALAM ang may-ari ng lupa.
Na ang kasunduan naming ito ay tatagal sa loob ng limang (5) taon simula ngayon; na ang
kasunduang ito ay nagpapatunay din na ang bahagi ay akong may-ari ng lupa ay sa ikatlo
(1/3) sa sinturis at kalamansing aanihin dito; at hati (50-50) parte sa bunga ng mga
halamang sumusunod, (1) kape; (2) saging; (3) mangga; (4) at paminta at sa mga ibang
halamang itatanim pa ng naulit na si Silverio Latag.
In the original complaint the plaintiff used the words "manager, cultivator and caretaker" of
the two parcels of land concerned, but on the excuse that the one who prepared the
complaint was not well versed in Tagalog, the complaint was subsequently amended
whereby the word "cultivator" was deleted in the allegations of the complaint. We note,
however that in the contract, Annex "A" to the complaint, it is clearly provided that the
plaintiff would take care of the plants that are planted and those still to be planted on the
lands within a period of five years ("mamamahala sa mga halamang nakatanim at itatanim
sa lupang naulit sa loob ng limang taon").
This Court believes that the allegations of the complaint (even as amended) and the
stipulations of the contract (Annex A) unmistakably show that an agricultural tenancy of the
kind called "share tenancy" was established between the parties. It has been declared that
"an agricultural tenancy classified as `share tenancy' exists where a person has physical
possession of another's land for the purpose of cultivating it and giving the owner a share in
the crop" (Marcelo vs. De Leon, L-12902, July 29, 1959). This Court in the same case held:
x x x x He knows the caretaker must water the trees, even fertilize them for better
production, uproot weeds and turn the soil, sometimes fumigate to eliminate plant pests,
etc. Those chores obviously mean "working or cultivating" the land. x x x x
It may thus be stated that the "caretaker" of an agricultural land is also considered the
"cultivator" of the land.
As regards plaintiff-appellant's contention that the tenancy relationship, if any, had been
terminated because his claim was only for damages without reinstatement to his status as
tenant, suffice it to say that in the instant case the plaintiff-appellant's claim for damages
was based on his having been allegedly dispossessed unlawfully or unjustifiably by the
defendant-appellee of the two parcels of land under his care and management sometime on
January 1, 1962. It is clear that the action relates to an incident arising from the landlord and
tenant relationship which existed shortly before the filing of the complaint on February 13,
1962. Under the circumstance, the Court of Agrarian Relations has the original and exclusive
jurisdiction over the case, even if the tenancy relationship no longer existed at the time of
the filing of the action. On this point this Court ruled as follows:
Indeed, Section 21 of Republic Act No. 1199, provides that "all cases involving the
dispossession of a tenant by the landlord or by a third party and/or the settlement and
disposition of disputes arising from the relationship of landlord and tenant . . . shall be under
the original and exclusive jurisdiction of the Court of Agrarian Relations." This jurisdiction
does
not
require
the
continuance
of
the
relationship
of
landlord
and
tenant at the time of the dispute. The same may have arisen, and often times arise,
precisely from the previous termination of such relationship. If the same existed
immediately, or shortly before the controversy and the subject-matter thereof is whether or
not said relationship has been lawfully terminated, or if the dispute otherwise springs or
originates from the relationship of landlord and tenant, the litigation is cognizable only by
the Court of Agrarian Relations, . . . (Basilio vs. De Guzman, et al., L-12762, April 22, 1959).
On the point that the present case comes under the exclusive jurisdiction of the Court of
Agrarian Relations even if the action is only for the recovery of damages based on the
unlawful dispossession of the tenant, this Court held:
Section 7, Republic Act No. 1267, as amended, vests in the Court of Agrarian Relations
exclusive and original jurisdiction to determine controversies arising from landlord-tenant

relationship. From this it may be inferred that it also has jurisdiction to hear and determine
actions for recovery of damages arising from the unlawful dismissal or dispossession of
tenant by the landlord, as provided in Act No. 4054 and Republic Act No. 1199, as amended.
To hold otherwise could result in multiplicity of suits and expensive litigations abhorred by
the law . . . . (Militar vs. Torcillero, et al., L-15065, April 28, 1961).
We hold, therefore, that the lower court did not commit error when it dismissed the
complaint in the present case.
Wherefore, the order of dismissal appealed from is affirmed, with costs against plaintiffappellant.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal
and
Bengzon,
J.P.,
JJ.,
concur.
Sanchez, J., took no part.

Republic
of
the
Philippines
SUPREME
COURT
Manila
EN BANC
G.R. No. L-20700
February 27, 1969
FIDEL
TEODORO, petitioner,
vs.
FELIX MACARAEG and COURT OF AGRARIAN RELATIONS, Second Regional District,
Sala II, respondents.

Jose
A.
Buendia
and
Agustin
A.
Pelmoka
for
petitioner.
Jesus A. Garcia for respondent Felix Macaraeg.
CASTRO, J.:
Before us for review, upon a petition for certiorari, are the decision of the respondent Court
of Agrarian Relations of September 7, 1962 in CAR case 558-Gba. 68 (Nueva Ecija), ordering
the herein petitioner Fidel Teodoro to reinstate the herein private respondent Felix Macaraeg
(the petitioner in the agrarian court) to his "former landhoding ... and to keep him as the
true and lawful tenant in accordance with law," and the resolution of the same court of
November 27, 1962 condemning Teodoro to pay or deliver to Macaraeg as damages "82
cavans of palay or its equivalent value in the amount of P820.00 computed at the rate of
P10.00 per cavan, plus interest at 10% until fully paid."
We turn to the factual milieu.
On June 7, 1961 Macaraeg filed a petition with the Court of Agrarian Relations (Second
Regional District, sala II, Guimba, Nueva Ecija) praying, inter alia, that (1) an interlocutory
order be issued to restrain Teodoro and Jose Niegos (the respondents below), from ejecting
him from his landholding pending resolution of his petition; and (2) after due trial, he be
maintained as the lawful tenant in the disputed landholding.
Macaraeg alleged that he is a leasehold tenant of Teodoro cultivating a farmholding situated
in the municipality of Talugtug, Nueva Ecija, of an area of four (4) hectares devoted to rice
culture, and that he has worked said land "as a tenant for the last seven years"; that on
March 2, 1961 he received a letter from Teodoro and his wife advising him that the aforesaid
landholding will be given to another tenant, on the pretext that he (Macaraeg) "is
contracting be a tenant of another in said landholding"; that forthwith, Teodoro placed a new
tenant, Jose Niegos, in the disputed land; that subsequently, Niegos repeatedly forbade him
from working on said riceland; that in order to avoid trouble, he refrained from forcibly
entering the landholding, but with the advent of the planting season, it became imperative
that the agrarian court order his reinstatement and restrain Teodoro and Niegos from
committing further acts of dispossession.
In his answer with counterclaim dated June 19, 1961, Teodoro categorically denied that
Macaraeg was his tenant, claiming that "ever since he became the owner of around 39
hectares of riceland in Kalisitan, Talugtug, N. Ecija, he had always leased all of it under civil
lease and he had never given any portion of it under tenancy." He further alleged that after
the expiration of his lease contract with Macaraeg in January, 1961, his wife twice notified
Macaraeg to renew his contract for the then incoming agricultural year 1961-62, but the
latter "verbally told Mrs. Teodoro that he was no longer interested to work on the land and
he was giving it up as he had left the place already." Teodoro also claims that it was only
after Macaraeg had abandoned the farmland that he decided to lease it to Niegos.
On his part, Niegos seasonably answered, disclaming any knowledge that Macaraeg is the
tenant of Teodoro, and averring that he entered the landholding in good faith clothed with
the proper authority from the other respondent (Teodoro) and with the consent and
confirmity of the petitioner (Macaraeg) who allowed him to work on the same"; and that
Macaraeg "has no more interests in the cultivation of the landholding as could be gleaned
from his actuations, like the failure to clean the land during the months of March and April,
and his failure to prepare his seed bed in the month of May which is the period for
broadcasting seedling in the community".
On February 6, 1962, when the hearing of the present controversy was nearing completion
in the respondent agrarian court but before the case was submitted for decision, Macaraeg
filed a "supplemental petition", claiming damages as a a result of his dispossession. Said
petition was given due course by the court commissioner and the requisite hearing was set
for March 9, 1962. Both Teodoro and Niegos interposed their respective answers, identically
asserting that the same was filed out of time and that the failure of Macaraeg to claim
earlier his alleged damages amounted to a fatal neglect which could no longer be cured at
that very late stage of the proceedings. Nonetheless, hearing on the said petition was
disclosed that as "a result of his (Macaraeg's) ejectment, he became destitute" since he had
no "income except from those derived from transplanting and reaping wherein he earned the

amount of P30.00". It was further proved that "for the aqricultural year 1961-62, Jose Niegos
realized a gross harvest of 110 cavans out of which he paid his rental to Fidel Teodoro in the
amount of 42 cavans and 23 kilos."
On September 7, 1962 the decision under review was rendered, with the following
dispositive portion:
IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, judgment is hereby rendered in favor of
petitioner Felix Macaraeg and against respondents Fidel Teodoro and Jose Niegos in the tenor
and disposition hereinbelow provided, to wit:
1. Jose Niegos is hereby ordered to vacate the landholding in question with an approximate
area of four (4) hectares, situated at Barrio Kalisitan, Talugtug Nueva Ecija, in favor of herein
petitioner and to refrain from molesting or in any manner disturbing his peaceful possession
and cultivation thereof, subject to the condition that said respondent shall have harvested
and threshed his crop which he planted for the current agricultural year;
2. Conformably with the preceding paragraph, Fidel Teodoro is hereby ordered to reinstate
said petitioner to his former landholding aforestated and to keep him as the true and lawful
tenant in accordance with law;
3. Declaring Exhibit A as a leasehold tenancy contract between the parties for the
agricultural year 1960-61 as the term is understood under our tenancy law; as a
consequence hereof, Exhibit 4-Teodoro and Exhibit 5-Niegos, i.e. contract of lease between
Fidel Teodoro and Jose Niegos is hereby declared void and of no legal effect; and
4. Dismissing petitioner's claim for damages as embodied in his supplemental petition.
Teodoro and Niegos filed separate motions for reconsideration which were denied by the
respondent agrarian court in its resolution of November 27, 1962. However, in the same
resolution, the court a quo reconsidered, upon motion of Macaraeg, its ruling denying the
latter's prayer for damages, thus:
With respect to petitioner's claim for damages as embodied in his supplemental petition,
wherein evidence was adduced in support thereof, we believe that its admission is in
accordance with Section 2, Rule 17 of the Rules of Court of the Philippines, same not being
for the purpose of delaying the proceedings. And, the fact that the Court of Agrarian
Relations shall not be bound strictly by the technical rules of evidence but "shall act
according to justice and equity and substantial merits of the case", we believe that the
evidence to support the claim for damages received during the hearings before the court
commissioner is meritorious (Secs. 10 and 11 RA 1267, as amended). Hence, petitioner is
entitled to recover damages claimed by him from his landholder in the amount of 85 cavans
of palay which is equal to the two years rental of his landholding less his earnings during the
same period in the amount of P30.00 only or is equivalent to 3 cavans of palay. In fine, Fidel
Teodoro is liable to pay to petitioner the amount of 82 cavans of palay or its cash value of
P820.00, computed at P10.00 per cavan plus interest at 10% until fully paid.
After Teodoro's motion to reconsider the foregoing resolution was denied, he interposed on
January 5, 1963 the present petition, imputing to the court the following errors:
1. In holding that Macaraeg became a tenant of Teodoro by virtue of the "Contract of Lease"
which they executed in April, 1960;
2. Assuming that the foregoing contract was in effect a leasehold tenancy agreement
making Macaraeg a tenant of Teodoro in not finding the former guilty of abandonment, an
act which terminated their tenancy relation; and
3. In condemning Teodoro to pay damages to Macaraeg for the alleged dispossession,
despite the fact that the claim for damages embodied in the abovementioned "Supplemental
Petition" below were about to be terminated.
The pertinent provisions of the disputed "Contract of Lease" between Teodoro and Macaraeg
read as follows:
That the LESSOR is the registered owner of a certain parcel of land situated at Talugtug,
Nueva Ecija, containing an area of THIRTY NINE (39) HECTARES, more or less;
That for and in consideration of the rental of Nine (9) cavans of palay per hectare for one
agricultural year, the LESSOR hereby lets and leases and the LESSEE hereby accepts an

undivided portion 4 Hectares of the abovementioned property under the following terms
and conditions:
1. That this contract of lease shall only be for the agricultural year 1960-61;
2. That the LESSEE shall give a guaranty to answer for the payment of the lease
consideration of this contract;
3. That the rental of 38.7 cavans of palay per hectare shall be paid unto the LESSOR not
later than January, 1961;
4. That the corresponding rental must be brought to the Poblacion of Muoz, Nueva Ecija, to
be deposited to any bonded Warehouse at the expense of the LESSEE and in the name of
the LESSOR;
5. That the rental must be of the same variety as that produced by the LESSEE;
6. That the LESSOR shall pay for the real property taxes corresponding to the property
leased;
7. That violation of any of the terms of this contract shall be sufficient ground to terminate
the same with damages against the guilty party;
8. That the property leased shall be used or utilized for agricultural enterprise only;
9. That in case of default on the part of the LESSEE to pay the lease consideration when the
same becomes due and payable and the collection for the same reaches the court, the
LESSEE hereby binds himself to pay the cost of the suit including reasonable attorney's fees.
(Emphasis supplied)
I. Teodoro contends that the language and tenor of the aforesaid contract clearly manifest
the intention of the parties to enter into an ordinary civil lease contract, not a leasehold
tenancy agreement as alleged by Macaraeg and sustained by the agrarian court. To start
with, Teodoro stresses, the parties denominated the said covenant as a "Contract of Lease",
which assigned title discloses their mutual intention to execute an ordinary lease contract,
for, otherwise, if they had intended to create a leasehold tenancy relation, they could have
accordingly captioned their agreement "with the word tenancy or some other word of similar
import". Moreover, Teodoro points out that "in the contract of lease in question it is
significant to note that the words landlord and tenant were conspicuous by their complete
absence".
The foregoing stance assumed by Teodoro is patently untenable, in the face of the principal
features and stipulations of the contract in controversy and the pertinent provisions of
existing law on leasehold tenancy. It bears emphasis that the title, label or rubric given to a
contract cannot be used to camouflage the real import of an agreement as evinced by its
main provisions. Moreover, it is basic that a contract is what the law defines it to be, and not
what it is called by the contracting parties. 1
As correctly expressed by the respondent court, "viewed from the four corners of Exhibit A,
we have no doubt that the leasehold tenancy contract entered into between petitioner
(Macaraeg) and Fidel Teodoro is a pure and simple leasehold tenancy contract as the term is
understood under our tenancy laws." This observation of the agrarian court finds anchor in
the pertinent provision of the Agricultural Tenancy Act. Thus, section 4 of Rep. Act 1199, as
amended by Rep. Act 2263, provides that
Leasehold tenancy exists when a person who, either personally or with the aid of labor
available from members of his immediate farm household, undertaken to cultivate a piece of
agricultural land susceptible of cultivation by a single person together with members of his
immediate farm household, belonging to a legally possessed by another in consideration of a
fixed amount in money or in produced or in both.
Furthermore, section 42 of the Agricultural Tenancy Act defines a landlord-lessor as
Any person, natural or judicial, either as owner, lessee, usufructuary or legal possessor of
agricultural land, who lets, leases or rents to another said property for purposes of
agricultural production and for a price certain of ascertainable either in amount of money or
produced;
while a tenant-lessee is defined as

any person who, with the consent of the former (landlord-lessor), tills, cultivates or operates
said land, susceptible of cultivation by one individual, personally or with the aid of labor
available from among his own immediate farm household.
Gleaned from the foregoing provisions, the following could be synthesized as the principal
elements of a lease-hold tenancy contract or relation:
1. The object of the contract or the relationship is an agricultural land which is leased or
rented for the purpose of agricultural production;
2. The size of the landholding must be such that it is susceptible of personal cultivation by a
single personwith assistance from the members of his immediate farm household;
3. The tenant-lessee must actually and personally till, cultivate or operate said land, solely
or with the aid of labor from his immediate farm household; and
4. The landlord-lessor, who is either the lawful owner or the legal possessor of the land,
leases the same to the tenant-lessee for a price certain or ascertainable either in a amount
of money or produce.
Reverting to the controverted "Contract of Lease", we are of the consensus that it
indubitably contains the forgoing essential elements of a leasehold tenancy agreement.
The landholding in dispute is unmistakably an agricultural land devoted to agricultural
production. More specifically, the parties stipulated that "the property leased shall be used
or utilized for agricultural enterprise only". (Emphasis supplied). Furthermore, the parties
also agreed that the farmland must be used for rice production as could be inferred from the
stipulation that "the rental of nine (9) cavans of palay per hectare for one agricultural year ...
must be of the same variety (of palay) as that produced by the LESSEE". (Emphasis
supplied)
The land is definitely susceptible of cultivation by a single person as it is of an area of only
four and A half (4-) hectares. This Court has held 2 that even a bigger area may be
cultivated personally by the tenant, singly or with the help of the members of his immediate
farm household.
From the stipulation that "the rental must be of the same variety as that produced by the
LESSEE", it can reasonably be inferred that the intention of the parties was that Macaraeg
personally work the land, which he did as found by the Agrarian Court, thus: "In the instant
case, petitioner (Macaraeg) cultivated
the
landholdingbelonging
to
said respondent (Teodoro) for the agricultural year 1960-61 in consideration of a fixed
annual rental." (Emphasis supplied) Moreover, there is no evidence that Macaraeg did not
personally cultivate the land in dispute. Neither did Teodoro allege, much less prove, that
Macaraeg availed of outside assistance in the cultivation of the said riceland.
Teodoro is the registered owner of the disputed landholding and he delivered the possession
thereof to Macaraeg in consideration of a rental certain to be paid in produce. Evidently,
there was a valid leasehold tenancy agreement. Moreover, the provision that the rental be
accounted in terms of produce 9 cavans per hectare is an unmistakable earmark,
considering the other stipulations, that the parties did actually enter into a leasehold
tenancy relation.
Teodoro further argues, however, that the aforesaid "Contract of Lease" cannot possibly be
construed as establishing a leasehold tenancy relation because the parties themselves
ignored and repudiated the very essence of tenancy security of tenure when they
stipulated that "this agreement shall only be for the agricultural year 1960-61".
This argument is unacceptable. The mere fact that the parties fixed and limited the duration
of their lease contract to only one agricultural year, does not remove the relationship which
they created from the purview of leasehold tenancy, considering the general import of their
agreement which irreversibly leads to and clearly justifies tenancy coverage. It is
fundamental that the tenant-lessee's security of tenure subsists notwithstanding the
termination of the contract which initially established the tenancy relation. In the language
of the law, the "expiration of the period of the contract as fixed by the parties ... does not of
itself extinguish the relationship". 3 This is a "practical consequence of the distinction
between the tenancy contract which is fixed by the parties, and the tenancy relationship

which is maintained and governed by law". 4 Furthermore, section 49 of the Agricultural


Tenancy Act provides that
Notwithstanding any agreement or provision of law as to the period of future surrender of
the land, in all cases where land devoted to any agricultural purpose is held under any
system of tenancy, the tenant shall not be dispossessed of his holdings by the landholder
except for any of the causes hereinafter enumerated and only after the same has been
proved before and the dispossession is authorized bye the court." (Emphasis supplied)
The abovecited provision does not permit the parties to stipulate at what future time the
tenant shall leave or surrender the land. Thus, this Court has held 5 that an agreement
whereby the tenant was required to return to the landlord his landholding after one crop
year cannot justify the tenant's dispossession after the said period because such agreement
is expressly proscribed by law.
Still vehemently contending that he never intended to enter into any tenancy relation with
Macaraeg, Teodoro finally argues that construing the abovementioned "Contract of Lease" as
a leasehold tenancy agreement would amount to a judicial negation of his freedom to
contract.
Needless to stress, this Court frowns upon and rejects any attempt to nullify the legitimate
exercise of the right to contract. We agree with Teodoro that as a landholder he has full
liberty to enter into a civil lease contract covering his property. What we want to indelibly
impress, however, is that once a landowner enters into a contract of lease whereby his land
is to be devoted to agricultural production and said landholding is susceptible of personal
cultivation by the lessee, solely or with help of labor coming from his immediate farm
household, then such contract is of the very essence of a leasehold agreement, and perforce
comes under the direct coverage of the tenancy laws. Otherwise, it would be easy to
subvert, under the guise of the liberty to contract, the intendment of the law of protecting
the underprivileged and ordinarily credulous farmer from the unscrupulous schemes and
pernicious practices of the landed gentry.
II. We now come to the second assignment of error. Teodoro posits that granting the
establishment of a leasehold tenancy relation between him and Macaraeg by virtue of the
aforesaid "Contract of Lease", the agrarian court nevertheless erred in not finding Macaraeg
guilty of abandonment, an act which terminates the tenancy relation and justifies the
ejectment of the tenant. In support of his thesis, Teodoro points out that Macaraeg
committed a positive act of abandonment when he offered to vacate his leasehold in favor of
a certain Luciano Claus, and only after "he could not have his own way of placing Luciano
Claus as his successor" did he try to "recover the land holding". Assuming the veracity of the
foregoing allegation, a tenant's offer or intention to surrender his hold on the condition that
the person named by him should be accepted as his successor, does not of itself constitute
abandonment of his farmland.
"The word 'abandon', in its ordinary sense, means to forsake entirely; to forsake or renounce
utterly. The dictionaries trace this word to the root idea of 'putting under a ban'. The
emphasis is on the finality and the publicity with which some thing or body is thus put in the
control of another, and hence the meaning of giving up absolutely, with intent never again
to resume or claim one's rights or interests." 6 In other words, the act of abandonment
constitutes actual, absolute and irrevocable desertion of one's right or property. In the case
at bar, Macaraeg merely intended to vacate his leasehold possession on the condition that a
certain Claus be taken as his successor. Hence, his act did not constitute desertion of his
leasehold as it was a mere intended surrender of the same. And as correctly espoused by
the counsel for the respondent court, it is "only through the actual surrender of the land that
tenancy relation terminates; no amount of intention to surrender severs the relationship".
Furthermore, the said act of Macaraeg was not an absolute renunciation of his leasehold
possession, as it was in fact clearly conditional.
However, Teodoro also claims, with characteristic certitude that Macaraeg did actually
abandon work on the land in dispute and that even the decision under review contains a
finding to this effect. We find no statement in the agrarian court's decision sustaining

Teodoro's view. On the contrary, we perceive truth in the respondent court's counsel's
manifestation that
The only times that the tenant herein did not work the land were (1) during the time it was
undergoing its regular dry season fallow, and, ... (2) after he was prohibited from plowing the
land by a certain Niegos, an agent of petitioner. Failure to cultivate during the dry season
fallow definitely does not amount to abandonment (Cf. De la Cruz vs. Asociacion Zangera
Casilan et al., 83 Phil. 214). Likewise, failure to cultivate the land by reason of the forcible
prohibition to do so by a third party cannot also amount to abandonment, for abandonment
presupposes free will.
Anent the charge of abandonment, it is also pertinent to note that four days after Macaraeg
received a letter from Teodoro and his wife advising him that the landholding in question will
be given to another tenant, he lost no time in inquiring from the Tenancy Mediation
Commission at Cabanatuan City about his rights as a leasehold tenant. It would appear
therefore that Macaraeg's immediate reaction to his landlord's design to dispossess him
negates the act of abandonment imputed to him.
Moreover, Teodoro's pretension that Macaraeg had abandoned the disputed landholding was
squarely rejected by the agrarian court, thus:
In the instant case, while petitioner had intentions to surrender his landholding to
respondent after the harvest for the agricultural (year) 1960-61 which led the latter to
advise the former not to give his landholding to Luciano Claus, yet that surrender did not
materialize because said petitioner had apparently changed his mind. For as early as March
6, 1961, petitioner went to the Office of the Tenancy Mediation Commission, Cabanatuan
City for consultation. As a matter of fact, said Commission wrote a letter to Fidel Teodoro and
his wife advising them to enjoin their overseer, Benito Ismael, from ejecting petitioner.
During the intervening period, Fidel Teodoro and his wife entered into another lease contract
of tenancy with Jose Niegos. For this reason, Mariano Niegos, son of Jose Niegos, prevented
petitioner from plowing his landholding when he found him in the premises on June 1, 1961.
However, notwithstading this incident, Fidel Teodoro opened the door for negotiations. In
fact, as late as June 23, 1961, when petitioner went to the house of Fidel Teodoro in Manila, a
conference was set for that purpose at the house of Benito Ismael in Muoz, Nueva Ecija
which did not take place because of the absence of petitioner. Under these circumstances, it
appears to our mind that while negotiations for settlement were still pending, yet petitioner
has not, in truth and in fact, surrendered his landholding. (Emphasis supplied)
We are not at liberty to reverse the foregoing finding of fact in the absence of any proof that
it is unfounded or was arbitrarily arrived at or that the Court had failed to consider important
evidence to the contrary. 7 This Court has consistently ruled that the findings of fact of the
Court of Agrarian Relations will not be disturbed on appeal where there is substantial
evidence to support them. 8 In the case at bar, the finding of fact by the by the respondent
court anent the issue of abandonment rests on substantial evidence.
III. Toward the end of the proceedings in the respondent court, Macaraeg interposed a
pleading which he denominated "supplemental petition", wherein he asked for damages as a
result of his dispossession. The said "supplemental petition" was given due course by the
hearing commissioner and Macaraeg was allowed to present evidence in support thereof. On
the basis of the evidence thus adduced, the respondent court awarded damages to
Macaraeg as decreed in its abovementioned resolution of November 27, 1962.
Teodoro maintains that the respondent court erred in admitting the said "supplemental
pleading" on the basis of section 2, Rule 17 (now section 3 of Rule 10 of the Revised Rules of
Court) which exclusively pertains to amendment of pleadings, and has nothing to do with the
interposition of supplemental pleadings which is separately governed by section 5 of Rule 17
(now section 5 of Rule 10). Teodoro avers, moreover, that since Macaraeg filed his claim for
damages only when the hearing below was about to end, his inaction must be considered as
a waiver of such claim or that he should be considered guilty of fatal negligence.
In resolving this last assignment of error, attentions must be centered on the liberal policy
which frees the Court of Agrarian Relations from the fetters of formalistic procedure. As aptly
observed in one case,9

Social justice would be a meaningless term if in a situation like the present, an element of
rigidity would be affixed to procedure precepts and made to cover the matter. Flexibility
should not be ruled out. Precisely, what is sought to be accomplished, by such a
fundamental principle expressly so declared by the Constitution (Art. II, sec. 5) is the
effectiveness of the community's effort to assist the economically underprivileged. For under
existing conditions, without such succor and support, they might not, unaided, be able to
secure justice for themselves....
Moreover, there is equally the obligation on the part of the State to afford protection to
labor. The responsibility is incumbent then, not only on the legislative and executive
branches but also on the judiciary, to translate this pledge into a living reality. The present
case is an appropriate occasion for the discharge of such a trust. To preclude relief under the
circumstances herein disclosed would be to fail to submit to the dictates of a plain
constitutional duty. That we should not allow to happen.
Since the abovementioned "supplemental pleading" was filed without intent to delay the
proceedings, the agrarian court exercised sound discretion in giving it due course in order
that "the real matter in dispute and all matters in the action in dispute between the parties
may, as far as possible, be completely determined in a single proceeding". Moreover Teodoro
has no reason to complain, for he was accorded every opportunity to controvert Macaraeg's
claim for damages, but apparently he did not, as in fact he does not here traverse the
substantiality of the award.lawphi1.nt
Significantly, the Court of Agrarian Relations is not restricted to the specific relief claimed or
demanding made by the parties to the dispute, but may include in the order or decision any
matter or determination which may be deemed necessary and expedient for the purpose of
settling the dispute or of preventing further disputes, provided said matter for determination
has been established by competent evidence during the hearing". 10 In words, the
respondent court could have determined Macaraeg's claim for damages even without his
"supplemental petition", provided there was proof to substantiate such claim (and such
requisite evidence was not wanting). Hence if the agrarian court could, have awarded
damages in favor of Macaraeg even in the absence of a specific prayer; then there is no
conceivable reason to bar the respondent court from granting the same with the
interposition of the aforesaid "supplemental petition" which explicitly and unmistakeably
prays for damages resulting from Macaraeg's dispossession.
We hasten to modify however, the award of damages in so far as it deducts from the total
amount recoverable by Macaraeg the sum of P30 or its equivalent of 3 cavans of palay,
representing his earnings during the period of his unlawful ejectment. This part of the award
contravenes section 27(1) of the Agricultural Tenancy Act which makes the erring landlord
"liable to the tenant for damages to the extent of the landholder's participation in the
harvest in addition to the tenant's right under Section twenty-two of this Act". And section
22(1) provides that the "tenant shall be free to work elsewhere whenever the nature of his
farm obligations warrants his temporary absence from his holdings". Consequently,
Macaraeg's measly earning of P30 during the period of his dispossession should not be
deducted from the total amount of damages due to him. Interpreting the abovecited section
27(1) in relation to section 22(1), this Court, speaking through Mr. Justice J.B.L. Reyes held
that
The earnings of the tenants during the period of unlawful ejectment are not now deductible
from the award of damages. In the case of Potenciano vs. Estefani L-7690, promulgated on
27 July 1955, this Court, on grounds of equity, ruled to deduct such income but said case
was decided under the prior law, Act 4054. The above-quoted Section 27(1) of Republic Act
No. 1199, as amended, which is the one applicable to the present case, not only provides for
a quantum of damages to the tenant, based on the landlord's share in the harvest, but adds
thereto his right under section 22, which states:
(1) the tenant shall be free to work elsewhere whenever the nature of his farm obligations
warrants his temporary absence from his holdings.

This right, although already granted under section 20 of Act 4054, was not then a right
additional to the recovery of damages consequent to unlawful dismissal, but under Republic
Act 1199, as amended, it is to be added to the damages recoverable. 11
ACCORDINGLY, the decision and resolution under review are hereby affirmed, with the sole
modification that the earnings of the herein respondent during the period of his
dispossession shall not be deducted from the award of damages. Cost against the petitioner.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Capistrano,
Teehankee and Barredo, JJ., concur.

Republic
of
the
Philippines
SUPREME
COURT
Manila
THIRD DIVISION
G.R. No. 106615
March 20, 2002
SPOUSES
ELIGIO
P.
MALLARI
and
MARCELINA
I.
MALLARI, petitioners,
vs.
IGNACIO ARCEGA, PERCASIO CATACUTAN, BEN GARCIA, ALFREDO DE GUZMAN,
MARIETA JACINTO, CELESTINO MAGAT, VICENTE MALLARI, RAFAEL MANALO,
LORENZO MANARANG, EMILIO DE MESA, JUAN PANGILINAN, TOROBIA SERRANO,
CELESTINA TORNO, and JUANITO VITAL, respondents.
x----------------------------------------x
G.R. No. 108591
March 20, 2002
IGNACIO ARCEGA, PERCASIO CATACUTAN, BEN GARCIA, ALFREDO DE GUZMAN,
MARIETA JACINTO, CELESTINO MAGAT, VICENTE MALLARI, RAFAEL MANALO,
LORENZO MANARANG, EMILIO DE MESA, JUAN PANGILINAN, TOROBIA SERRANO,
CELESTINA
TORNO,
and
JUANITO
VITAL, petitioners,
vs.
HONORABLE NORBERTO C. PONCE, Regional Trial Court Judge, Branch XLVI, San
Fernando, Pampanga and
SPOUSES ELIGIO MALLARI and
MARCELINA
MALLARI, respondents.
x----------------------------------------x
G.R. No. 109452
March 20, 2002
SPOUSES
ELIGIO
P.
MALLARI
and
MARCELINA
I.
MALLARI, petitioners,
vs.
IGNACIO ARCEGA, ALFREDO DE GUZMAN, PERCASIO CATACUTAN, RAFAEL MANALO,
EMILIO DE MESA, JUANITO VITAL, TOROBIA SERRANO, CELESTINO MAGAT, VICENTE
MALLARI, LORENZO MANARANG, MARIETA JACINTO, BEN GARCIA, CELESTINA
TORNO, and JUAN PANGILINAN, respondents.
x----------------------------------------x
G.R. No. 109978
March 20, 2002
SPOUSES
ELIGIO
P.
MALLARI
and
MARCELINA
I.
MALLARI, petitioners,
vs.
IGNACIO ARCEGA, PERCASIO CATACUTAN, BEN GARCIA, ALFREDO DE GUZMAN,
MARIETA JACINTO, CELESTINO MAGAT, VICENTE MALLARI, RAFAEL MANALO,
LORENZO MANARANG, EMILIO DE MESA, JUAN PANGILINAN, TOROBIA SERRANO,
CELESTINA TORNO, and JUANITO VITAL, respondents.
x----------------------------------------x
G.R. No. 139379
March 20, 2002
SPOUSES
ELIGIO
P.
MALLARI
and
MARCELINA
I.
MALLARI, petitioners,
vs.
IGNACIO ARCEGA, PERCASIO CATACUTAN, BEN GARCIA, ALFREDO DE GUZMAN,
MARIETA JACINTO, CELESTINO MAGAT, VICENTE MALLARI, RAFAEL MANALO,
LORENZO MANARANG, EMILIO DE MESA, JUAN PANGILINAN, TOROBIA SERRANO,
CELESTINA TORNO, and JUANITO VITAL, respondents.
SANDOVAL-GUTIERREZ, J.:
These consolidated petitions involve a parcel of agricultural land over which the 14 tenantscultivators (petitioners in G.R. No. 108591 and respondents in G.R. Nos. 106615, 109452,
109978 and 139379) valiantly assert their right of redemption. After more than two (2)
decades since the petition for redemption was filed with the trial court, the contending
parties are still squabbling for their respective interests in the subject land. It is thus
imperative that we write finis to these cases.
The undisputed facts are:
The land in controversy is an agricultural lot planted to sugarcane, described as Lot No. 3664
of the San Fernando Cadastre, located at Barrio Maimpis, San Fernando, Pampanga. It was

formerly owned by spouses Roberto Wijangco and Asuncion Robles under T.C.T. No. 27507-R
of the Registry of Deeds, same province.
On March 16, 1962, the Wijangcos mortgaged Lot No. 3664 and their other lots to the
Philippine National Bank (PNB). Unable to pay their indebtedness, the PNB foreclosed the
mortgage contract. In the auction sale that followed, the lots were awarded to PNB, being
the highest bidder. On March 17, 1978, it was issued a Certificate of Sale. Spouses Wijangco
failed to redeem the lots within the reglementary period, hence, ownership thereof was
consolidated in the name of PNB. Several Transfer Certificates of Title (TCTs) were then
issued to it by the Register of Deeds. Among those titles is TCT No. 154516-R covering Lot
No. 3664,1 which is the subject of this case.
On July 10, 1980, the PNB executed in favor of spouses Eligio and Marcelina Mallari
(respondents in G.R. No. 108591 and petitioners in G.R. Nos. 106615, 109452, 109978 and
139379) a Deed of Promise to Sell2 two (2) parcels of land, one of which is Lot No. 3664.
Pursuant to their agreement, the Mallari spouses paid PNB the sum of P473,000.00, or 20%
of the purchase price, as down payment. The balance of P1,892,000.00 was to be paid in
three (3) equal yearly installments from 1981 to 1983. The contract likewise provides that
PNB shall retain ownership and title to the lots until the Mallari spouses shall have paid the
last installment.
Before the Mallari spouses could pay the first amortization, the tenants of Lot No. 3664 tried
to redeem it atP5,000.00 per hectare. The spouses declined the offer, prompting the tenants
to seek the assistance of the then Ministry (now Department) of Agrarian Reform in initiating
the redemption with the request that the Land Bank of the Philippines (LBP) be called to
finance the same.3
On July 22, 1981, 27 tenants of Lot No. 3664 instituted Agrarian Case No. 1908 before the
then Court of Agrarian Relations (CAR), Branch I at San Fernando, Pampanga. This case was
automatically absorbed by the Regional Trial Court (RTC), Branch 46, also at San Fernando,
Pampanga, upon abolition of the CAR. The action sought to compel the Wijangco spouses (as
the former owners), the PNB (as the mortgagee-transferee and vendor) and the Mallari
spouses (as the vendees under the Deed of Promise to Sell) to allow the tenants to redeem
theirrespective landholdings in Lot No. 3664, pursuant to the provisions of Republic Act
No. 3844 (The Agricultural Land Reform Code), as amended by Republic Act No. 6389 (The
Code of Agrarian Reforms of the Philippines).
During the initial stage of the hearing before the RTC, 10 out of the 27 tenants entered into a
compromise agreement with the Mallari spouses. Subsequently, three (3) more tenants
withdrew from the case, thereby leaving only 14 tenants as petitioners, namely:
1.
Ignacio
Arcega
2.
Alfredo
de
Guzman
3.
Ben
Garcia
4.
Celestino
Magat
5.
Juanito
Vital
6.
Percasio
Catacutan
7.
Torobia
Manalo-Serrano
8.
Celestina
Torno
9.
Marieta
Jacinto
10.
Vicente
Mallari
11.
Rafael
Manalo
12.
Juan
Pangilinan
13.
Lorenzo
Manarang
14. Emilio de Mesa4
Meanwhile, on November 18, 1981, the above-named tenants (hereinafter referred to as
Arcega, et al.) filed with the RTC a "Motion To Direct the Land Bank of the Philippines to Issue
a Certificate of Availability of Funds" for the purpose of financing the redemption of their
respective landholdings. This motion was denied by the RTC in an Order dated December 24,
1981.5 In the said order, Arcega, et al. were required to show cause why the case should not
be dismissed for their failure to make a tender of payment and/or consignation. Forthwith,

they filed a motion for reconsideration. During the hearing of this motion, they presented a
Certification dated January 15, 1982 6 issued by the LBP signed by its President, Mr. Basilio
Estanislao, thus:
"CERTIFICATION TO FINANCE REDEMPTION OF ESTATE UNDER R.A. NO. 3844, AS AMENDED
"This is to certify that the LAND BANK OF THE PHILIPPINES shall finance the acquisition of
the landholding situated in Bo. Maimpis, San Fernando, Pampanga, subject matter of a
Redemption Case x x x docketed as CAR Case No. 1908-P '81, if found in consonance with
the provisions of Section 12, Republic Act No. 3844, as amended, and with the relevant
policies and procedures laid down by the Land Bank Board of Directors.
"Corresponding fund shall be set aside upon receipt of the order or directive from the
Honorable Court and payment therefor shall be effected upon compliance with the Bank's
Guidelines and Policies on the matter.
"Issued at Manila, this 15th day of January, 1982."
Despite the above Certification, the RTC, in an Order dated January 27, 1982, 7 denied
Arcega, et al.'s motion for reconsideration and dismissed the petition for redemption on the
ground that they failed to comply with the jurisdictional requirements of Section 12 of R.A.
No. 3844 because (1) the Certification to Finance Redemption issued by the LBP is merely
conditional, hence, did not constitute a valid consignation of the redemption price; and (2)
the petition for redemption was filed beyond the 180-day reglementary period.
Arcega, et al. interposed an appeal to the Intermediate Appellate Court (now Court of
Appeals [CA]), docketed therein as CA-G.R. No. SP-13807-CAR. The CA ruled that it was not
necessary for Arcega, et al. to tender payment and/or consign the redemption price as the
Certification issued by the Land Bank will suffice; and that the exercise of the right of
redemption was made within the 180-day period. 8 The CA then set aside the assailed Order
and remanded the case to the RTC for further proceedings.
Unsatisfied, the Mallari spouses challenged the CA Decision before this Court by way of a
petition for review on certiorari, docketed as G.R. No. L-61093.9 They maintained that the
period of redemption had already prescribed and that Arcega, et al. did not make any valid
tender of payment or consignation of the redemption price. This Court, through former Chief
Justice Pedro L. Yap, denied the petition in a Decision dated May 25, 1988, holding that (1)
Arcega, et al.'s right of redemption has not yet prescribed because no notice in writing of
the sale was ever given by the vendee upon the tenants as agricultural lessees of
the land, as required by law; and (2)that it is not necessary for the lessee to make
a tender of payment and/or consignation of the amount of redemption price since
the Certification issued by the Land Bank that it will finance the redemption of the
property in question is sufficient compliance with Section 12 of R.A. No. 3844, as
amended. Pursuant to this Decision, the petition for redemption (Agrarian Case No. 1908)
was remanded to the RTC for further proceedings.
In November of 1989, pending the hearing of the agrarian case, the Mallari spouses filed 14
separate complaints against Arcega, et al. with the Provincial Adjudication Board of the
Department of Agrarian Reform, Region III, docketed as DARAB Case Nos. 144-P '89 to 160-P
'89. The complaints sought the dissolution of the tenancy relationship between the Mallari
spouses and Arcega, et al. and their payment of annual rentals corresponding to the six (6)
agricultural crop years for the period from 1983-1984 to 1988-1989.
On June 18, 1990, the RTC issued an Order10 requiring Arcega, et al. to pay the back rentals
for the said agricultural years in the aggregate amount of P 1,745,777.70.11
On November 8, 1990, the RTC rendered a Decision dismissing for the second time
Arcega, et al.'s petition for redemption, in utter disregard of the Decision of this Court
in G.R. No. L-61093.
The pertinent portions of the RTC Decision read:
"By way of resume, the denial of plaintiffs' Petition for Redemption of Lot No. 3664 is
justified, both legally and factually, due to the following reasons:
1. In accordance with the existing law and jurisprudence, there was no valid tender of
payment and consignation in court of the redemption price since the Land Bank Certification
does not satisfy the requirements of Section 12 of Rep. Act No. 3844, as amended by Rep.

Act No. 6389, and is not, in legal contemplation, the valid certification that complies with the
requirements, policies, guidelines and rules and regulations of the Land Bank of the
Philippines as prescribed under its Circular Letter No. 3, dated February 25, 1980;
2. There is a dearth of competent and satisfactory evidence on the part of the plaintiffs
establishing or fixing the reasonable amount of the redemption price as no evidence to this
effect was presented by the plaintiffs during trial of the case and the testimony of plaintiff
Rafael Manalo, standing alone, spelled no difference as the case has no leg of support to
lean on; and
3. There exist uncontroverted, convincing and overwhelming evidence that the Petition for
Redemption had already prescribed as it was filed beyond the 180-day period provided for
under Section 12 of Rep. Act No. 3844, as amended by Rep. Act No. 6389.
"WHEREFORE, considering the foregoing premises and finding the Petition for Redemption
filed by the plaintiffs over Lot No. 3664 of the San Fernando Cadastre, San Fernando,
Pampanga to be without legal or factual merit, the said petition is hereby dismissed
accordingly."12
In due time, Arcega, et al. appealed the RTC Decision to the CA, docketed therein as CAG.R. SP CAR 25209. On June 9, 1992, the CA rendered a Decision reversing the RTC
Decision, thus:
"x x x questions regarding appellants' (Arcega, et al.) compliance with the
jurisdictional requirements of Section 12, Republic Act No. 3844, as amended,
were already passed upon by the Supreme Court(in the 1988 Mallari case) when it
affirmed the CA's ruling which set aside the order of dismissal and remanded the case to the
court a quo for further proceedings. What the RTC should have done, upon receipt of the
record of the case, was to have resolved the question on the reasonable amount of
the redemption price, nothing more."
xxx
xxx
xxx
"The RTC committed reversible error when it held appellants (Arcega, et al.) liable for back
rentals of their respective landholdings for the period covered from agricultural crop years
1982-1983 up to 1989-1990. Considering that they had validly and promptly exercised their
right of redemption according to law, the Mallaris' claim for rentals must perforce fail.
Appellants cannot be compelled to pay rentals for the use of the landholdings in question of
which they are deemed the cultivators-owners thereof from the time the Land Bank
Certification was presented, which is equivalent to consignation or tender of payment in
court.1wphi1.nt
xxx
xxx
xxx
"WHEREFORE, the Decision dated 08 November 1990, of the Regional Trial Court, Third
Judicial Region, Branch XLVI, San Fernando, Pampanga, is hereby SET ASIDE. The record of
the case is hereby REMANDED to the trial court only for the purpose of determining the price
and consideration to be paid by plaintiffs-appellants for redeeming their respective
landholdings, there being no convincing evidence in the record on the matter. Let the Land
Bank of the Philippines be impleaded as a party defendant."13
On September 25, 1992, spouses Mallari filed with this Court the present petition for review
on certiorari challenging the CA Decision, docketed as G.R. No. 106615. They submit the
same issue passed upon by this Court in G.R. No. L-61093, i. e., whether or not Arcega, et
al. complied with the jurisdictional requirements of Section 12 of R.A. No. 3844, as amended
by R.A. No. 6389, on valid tender of payment and consignation and on the timely exercise of
their right of redemption.
On February 4, 1993, pending our resolution of G.R. No. 106615, Arcega, et al. filed directly
with this Court a special civil action for certiorari with prayer for the issuance of a temporary
restraining order and/or preliminary mandatory injunction, docketed as G.R. No.
108591.14 The petition assails the following orders of the trial court:
a. Order dated November 3, 1992 granting the Mallari spouses' "Motion to Turn Over/Deliver
Funds in Sheriff's Custody";
b. Order dated November 12, 1992 granting the said spouses' "Motion to Guard Sugar Cane
Production in the Disputed Landholdings";

c. Order dated December 2, 1992 denying Arcega, et al.'s motion for reconsideration of the
October 22, 1992 order which directed Sheriff Anastacio C. Dizon to turn over the net
proceeds of the sugar cane production for the crop year 1991-1992 to the OIC and Branch
Clerk of Court of the RTC; and
d. Order dated January 14, 1993 denying Arcega, et al.'s motion for reconsideration of the
order dated November 12, 1992.
Meanwhile, on June 5, 1991, the Provincial Adjudication Board of the DAR rendered a
Decision in DARAB Case Nos. 144-P '89 to 160-P '89 (for dissolution of tenancy relationship
between Arcega, et al. and the spouses Mallari) in favor of the spouses Mallari. Arcega, et al.
appealed the said decision to the DAR Adjudication Board (DARAB), docketed as DARAB Case
No. 0397. Eventually, on January 6, 1993, the DARAB rendered a Decision setting aside the
June 5, 1991 Decision of the Provincial Adjudication Board and ordering it to hold in
abeyance action on the cases until such time that the petition for redemption shall have
been finally resolved by this Court. This DARAB decision was upheld by the CA in a Decision
dated March 10, 1993,15 which noted that "the holding in abeyance of the DARAB cases is
the prudent and proper course to take in the meantime" in view of the pendency of G.R. No.
106615 before this Court. This prompted spouses Mallari to file with this Court another
petition for review on certiorari, docketed as G. R. No. 109452.
On June 2, 1993, the Mallari spouses filed with this Court their third petition for review on
certiorari, docketed asG.R. No. 109978, this time challenging the CA Decision dated April
30, 1993.16 This CA decision set aside, for having been issued with grave abuse of discretion,
the RTC a) Order dated February 5, 1992 requiring Arcega, et al. to render an accurate
accounting or report on the number of truckloads/tons of sugarcane produced from their
landholdings for the crop year 1991-1992; and, b) Order dated May 14, 1992 directing them
to deliver to spouses Mallari their shares in the sugarcane production by way of annual
rentals for the agricultural crop year 1991-1992.
Disregarding the above pending incidents, the RTC, on November 4, 1994, issued an
Order17 granting the Mallari spouses' motion for the issuance of an alias writ of execution of
the Order dated June 18, 1990 directing Arcega,et al. to pay the couple P1,745,777.70 as
rentals for the agricultural years 1982-1983 to 1989-1990. Thereupon, Arcega, et al. filed
with the CA a petition for certiorari impugning the said November 4, 1994 RTC Order. On July
9, 1999, the CA rendered a Decision 18 holding that the issue on the payment of the
redemption price is pending resolution by this Court (for the second time) in G.R. No.
106615. Consequently, spouses Mallari filed with this Court their fourth petition for review
on certiorari, docketed as G.R. No. 139379 assailing the said CA Decision.
Following is the enumeration of the present consolidated petitions specifying the issues
involved.
In G.R. No. 106615, spouses Mallari question the June 9, 1992 CA Decision reversing
the RTC Decision dated November 8, 1990 which dismissed for the second time Arcega, et
al.'s petition for redemption in Agrarian Case No. 1908. The issue here is whether or not the
LBP Certification to Finance the Redemption is a sufficient compliance with the jurisdictional
requirements of Section 12, R.A. No. 3844, as amended; and whether or not the period to
redeem has expired.
In G.R. No. 108591, Arcega, et al. assail the validity of the RTC Orders dated November 3,
1992, November 12, 1992, December 2, 1992 and January 14, 1993 which recognize
spouses Mallari's right to demand payment of back rentals for the agricultural crop year
1991-1992. In effect, the said orders held that Arcega, et al. failed to exercise their right of
redemption.
In G.R. No. 109542, spouses Mallari contend that the CA, in its March 10, 1993 Decision,
erred in affirming the DARAB Decision suspending the proceedings in DARAB Case Nos. 144P '89 to 160-P '89.
In G.R. No. 109978, spouses Mallari challenge the April 30, 1993 CA Decision reversing and
setting aside the RTC Order dated February 5, 1992 which required Arcega, et al. to render
an accounting on the sugarcane produced from their landholdings for the crop year 19911992; and the Order dated May 14, 1992 directing them to deliver to the Mallari spouses

their shares corresponding to the agricultural crop year 1991-1992. Both orders are again
based on the RTC's finding that Arcega, et al. did not exercise their right of redemption.
In G.R. No. 139379, the Mallari spouses assail the validity of the July 9, 1999 CA Decision
setting aside the RTC Order of November 4, 1994 which required Arcega, et al. to pay the
couple back rentals for the agricultural years 1982-1983 to 1989-1990.
It bears stressing that the resolution of the issues raised in the present consolidated
petitions hinges on the determination of the issue in G.R. No. 106615, i. e., whether or not
Arcega, et al. can exercise their right of redemption under Section 12, R.A. No. 3844, as
amended.
Thus, we now consider G.R. No. 106615.
It must be recalled that Arcega, et al.'s petition for redemption in Agrarian Case No. 1908
was first dismissed by the RTC on January 27, 1982, on the grounds that: (1) the Certification
issued by the LBP did not constitute a valid consignation of the redemption price; and (2) the
petition for redemption was filed beyond the 180-day period as required by law. This order of
dismissal was reversed by the CA which remanded the case to the RTC for further
proceedings. However, the Mallari spouses challenged the CA decision before this Court
in G.R. No. L-61093, raising the issue of whether or not Arcega, et al. complied with the
jurisdictional requirements regarding tender of payment and consignation and their timely
exercise of the right of redemption under Section 12 of R.A. No. 3844, as amended by R.A.
No. 6389. Section 12 provides:
"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 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 one hundred eighty days from notice in writing
which shall be served by the vendee on all lessees affected and the Department
of Agrarian Reform upon the registration of the sale, and shall have priority over any
other right of legal redemption. The redemption price shall be the reasonable price of the
land at the time of the sale.
xxx
xxx
xxx
"The Department of Agrarian Reform shall initiate, while the Land Bank shall finance said
redemption as in the case of pre-emption." (Emphasis ours)
This Court, in G.R. No. L-61093, affirmed the CA decision, and resolved the said issue in
favor of Arcega, et al., thus:
"Petitioners' (Mallari spouses) contention is without merit. If the tenants (the herein private
respondents) had the right to redeem the property under the law upon the sale of the
property to PNB in 1978, such right of redemption has not yet prescribed because no notice
in writing of the sale was ever given by the vendee upon the tenants as
agricultural lessees of the land, as required by law. The PNB was made a partydefendant in the petition for redemption filed by private respondents (tenants) with the
Court of Agrarian Relations, and the PNB has not appealed the decision of the Intermediate
Appellate Court holding that the private respondents had the right to redeem the property
as the agricultural lessees thereof. Insofar as the petitioners are concerned, being the
transferee of the land in question by virtue of the unregistered deed of conditional sale, they
can not claim that the tenants, as agricultural lessees of the land, have no cause of action
against them simply because the deed of conditional sale executed in their favor by the PNB
has not yet been registered.
"Republic Act No. 3844, as amended, prescribes the period within which the right of
redemption must be exercised by the agricultural lessees, which is one hundred eighty days
from written notice from the vendee of the property upon registration of the sale.
But certainly there is nothing in the law which provides thatwithout such written
notice, the agricultural lessees can not exercise their right of redemption.
xxx
xxx
xxx

"The appellate court correctly ruled that it is not necessary for the lessee to make a
tender of payment and/or consignation of the amount of redemption price, and that
a certification issued by the Land Bank that it will finance the redemption of the
property in question is sufficient. x x x.
"Section 11 of R.A. No. 3844, as amended, is a provision on the lessee's right of pre-emption
and provides that: 'x x x If the agricultural lessee agrees with the terms and condition of the
sale x x x [he] must either tender payment of, or present a certificate from the Land Bank
that it shall make payment x x x on the price of the landholding to the agricultural lessor. If
the latter refuses to accept such tender or presentment, he may consign it with the court x x
x.' True, said provision does not appear in Section 12 thereof, which refers to the lessees'
right of redemption. However, there is no doubt that within the context of the Code and in
line with this Court's exhortation that a liberal interpretation of the Code's provisions is
imperative, to give it full force and effect to its clear intent, the lessee-preemptioner and the
lessee-redemptioner have the same rights and are in the same footing and category insofar
as the availment of the facilities of the Land Bank and the Ministry of Agrarian Reform are
concerned. Moreover, it is explicitly provided in Section 12 that 'the Department of
Agrarian Reform shall initiate while the Land Bank shall finance, said
redemption as in the case of pre-emption.' Hence, it is not necessary for tenantsredemptioners to make a tender of payment and/or consignation of the
redemption price. A certification from the Land Bank to finance the
redemption when presented will suffice. x x x.
"Accordingly, finding the petition without merit, the same is hereby DISMISSED, with costs
against petitioner.
"SO ORDERED."19 (Emphasis Ours)
In violation of this Court's ruling, the RTC, through Judge Norberto Ponce, rendered the
November 8, 1990 Decision dismissing for the second time Arcega, et al.'s petition for
redemption based on the very same grounds which were already passed upon and
rejected by this Court in G.R. No. L-61093.
Expectedly, Arcega, et al. again appealed to the CA the RTC Decision, invoking this Court's
pronouncement inG.R. No. L-61093. The CA, in its June 9, 1992 Decision, stressed that the
questions relative to Arcega, et al.'s compliance with the jurisdictional requirements of
Section 12, Republic Act No. 3844, as amended, were already passed upon by this Court
in G.R. No. L-61093; and that what the RTC should have done upon receipt of the
records was to resolve the question on the reasonable amount of the redemption
price, nothing more.
The CA is correct.
We are dismayed by RTC Judge Norberto C. Ponce's non-adherence to our ruling in G.R. No.
L-61093. The instant petition involving the same issues passed upon in G.R. L-61093 should
not have reached this Court once more. A lower court cannot reverse or set aside the
decisions or orders of a superior court, especially of this Court, for to do so will nullify the
essence of review and negate the principle of hierarchy of courts. Judge Ponce should know
that it is the duty of the lower courts to obey the Decisions of this Court and render
obeisance to its status as the apex of hierarchy of courts. For "there is only one Supreme
Court from whose decisions all other courts should take their bearings," as eloquently
declared by Justice J.B.L. Reyes.20
It appears from the records that the LBP, through a letter dated September 11, 1992, signed
by its President, Mr. Jesli A. Lapus, cancelled the LBP Certification of January 15, 1982.
According to the RTC, in its Order dated November 3, 1992, this supervening event brushed
aside and laid to rest the claim of Arcega, et al. to the subject landholdings.1wphi1.nt
The RTC ruling is erroneous. It should not have dismissed Arcega, et al.'s petition for
redemption. As correctly held by the CA, Arcega, et al. "are deemed the cultivators-owners
of their respective landholdings" under R.A. 3844, as amended, from the time the Land Bank
Certification dated January 15, 1982 was presented to the RTC on January 20,1982; and that
the said Certification "is equivalent to a consignation or tender of payment in court." 21 Thus,
the subsequent cancellation by the LBP of its earlier Certification cannot affect the right

already acquired by Arcega, et al. as agricultural lessees under R.A. No. 3844, as amended.
We have sustained such right in our Decision in G.R. No. L-61093 which has acquired the
character of res judicata and can no longer be challenged.
The RTC further noted that inasmuch as the LBP was not impleaded as a party in the
Agrarian Case No. 1908, no judgment of the court could be "binding and enforceable against
the Land Bank," since the court a quo "had never, at any stage of the proceedings, acquired
jurisdiction on the Land Bank."
The LBP is the agency of the Government mandated to finance the redemption under
Section 12 of R.A. No. 3844, as amended by R.A. No. 6389, hence, should be
impleaded in Agrarian Case No. 1908. Under Section 11, Rule 3 of the 1997 Rules of Civil
Procedure, as amended, the trial court is empowered to drop or add a party to the case,
upon motion of any party "or on its own initiative at any stage of the action and on
such terms as are just."
WHEREFORE:
1. The petitions of spouses Mallari in G.R. Nos. 106615, 109452, 109978 and 139379
are DENIED and the assailed Decisions of the Court of Appeals in CA-G.R. SP CAR No.
25209, CA-G.R. SP No. 30085, CA-G.R. SP-No. 30887 and CA-G.R. SP Case No. 36100
are AFFIRMED;
2. The petition of Arcega, et al. in G.R. No. 108591 is GRANTED and the appealed RTC
Orders dated November 3, 1992, November 12, 1992, December 2, 1992 and January 14,
1993 are REVERSED andSET ASIDE;
3. The RTC is ORDERED to implead the LBP in Agrarian Case No. 1908;
4. Agrarian Case No. 1908 is REMANDED to the RTC, Branch 46, San Fernando Pampanga
for further proceedings with dispatch; and
5. The RTC is further ORDERED to submit to this Court a progress report of the status of
Agrarian Case No. 1908 every 3 months until this Court's Decision is fully implemented.
SO ORDERED.
Melo,
Panganiban,
and
Carpio,
JJ., concur.
Vitug, J., abroad on official leave.

THIRD DIVISION
[G.R. No. 154112. September 23, 2004]
DEPARTMENT OF AGRARIAN REFORM, petitioner, vs. ROBERTO J. CUENCA and Hon.
ALFONSO B. COMBONG JR., in His Capacity as the Presiding Judge of the Regional
Trial Court, Branch 63, La Carlota City, respondents.
DECISION
PANGANIBAN, J.:
All controversies on the implementation of the Comprehensive Agrarian Reform Program
(CARP) fall under the jurisdiction of the Department of Agrarian Reform (DAR), even though
they raise questions that are also legal or constitutional in nature. All doubts should be
resolved in favor of the DAR, since the law has granted it special and original authority to
hear and adjudicate agrarian matters.
The Case
Before us is a Petition for Review [1] under Rule 45 of the Rules of Court, assailing the March
15, 2002 Decision[2] and the June 18, 2002 Resolution [3] of the Court of Appeals in CA-GR SP
No. 58536. In the challenged Decision, the CA disposed as follows:
As previously stated, the principal issue raised in the court below involves a pure question of
law. Thus, it being clear that the court a quo has jurisdiction over the nature and subject
matter of the case below, it did not commit grave abuse of discretion when it issued the
assailed order denying petitioners motion to dismiss and granting private respondents
application for the issuance of a writ of preliminary injunction.
WHEREFORE, premises considered, the petition is denied due course and is
accordingly DISMISSED.[4]
The assailed Resolution, on the other hand, denied petitioners Motion for Reconsideration.
The Facts
The CA narrated the facts as follows:
Private respondent Roberto J. Cuenca is the registered owner of a parcel of land designated
as Lot No. 816-A and covered by TCT No. 1084, containing an area of 81.6117 hectares,
situated in Brgy. Haguimit, La Carlota City and devoted principally to the planting of sugar
cane.
On 21 September 1999, Noe Fortunado, Municipal Agrarian Reform Officer (MARO) of La
Carlota City issued and sent a NOTICE OF COVERAGE to private respondent Cuenca placing
the above-described landholding under the compulsory coverage of R.A. 6657, otherwise
known as the Comprehensive Agrarian Reform Program (CARP). The NOTICE OF COVERAGE
also stated that the Land Bank of the Philippines (LBP) will determine the value of the
subject land pursuant to Executive Order No. 405 dated 14 June 1990.
On 29 September 1999, private respondent Cuenca filed with the Regional Trial Court,
Branch 63, La Carlota City, a complaint against Noe Fortunado and Land Bank of the
Philippines for Annulment of Notice of Coverage and Declaration of Unconstitutionality of
E.O. No. 405, Series of 1990, With Preliminary Injunction and Restraining Order. The case
was docketed as Civil Case No. 713.
In his complaint, Cuenca alleged, inter alia, that the implementation of CARP in his
landholding is no longer with authority of law considering that, if at all, the implementation
should have commenced and should have been completed between June 1988 to June 1992,
as provided in the Comprehensive Agrarian Reform Law (CARL); that the placing of the
subject landholding under CARP is without theimprimatur of the Presidential Agrarian Reform
Council (PARC) and the Provincial Agrarian Reform Coordinating Committee (PARCOM) as

required by R.A. 7905; that Executive Order No. 405 dated 14 June 1990 amends, modifies
and/or repeals CARL and, therefore, it is unconstitutional considering that on 14 June 1990,
then President Corazon Aquino no longer had law-making powers; that the NOTICE OF
COVERAGE is a gross violation of PD 399 dated 28 February 1974.
Private respondent Cuenca prayed that the Notice of Coverage be declared null and void ab
initio and Executive Order No. 405 dated 14 June 1990 be declared unconstitutional.
On 05 October 1999, MARO Noe Fortunado filed a motion to dismiss the complaint on the
ground that the court a quo has no jurisdiction over the nature and subject matter of the
action, pursuant to R.A. 6657.
On 12 January 2000, the respondent Judge issued a Temporary Restraining Order directing
MARO and LBP to cease and desist from implementing the Notice of Coverage. In the same
order, the respondent Judge set the hearing on the application for the issuance of a writ of
preliminary injunction on January 17 and 18, 2000.
On 14 January 2000, MARO Fortunado filed a Motion for Reconsideration of the order
granting the TRO contending inter alia that the DAR, through the MARO, in the course of
implementing the Notice of Coverage under CARP cannot be enjoined through a Temporary
Restraining Order in the light of Sections 55 and 68 of R.A. 6657.
In an order dated 16 February 2000, the respondent Judge denied MARO Noe Fortunados
motion to dismiss and issued a Writ of Preliminary Injunction directing Fortunado and all
persons acting in his behalf to cease and desist from implementing the Notice of Coverage,
and the LBP from proceeding with the determination of the value of the subject land.
The Department of Agrarian Reform (DAR) [thereafter filed before the CA] a petition for
certiorari under Rule 65 of the 1997 Rules of Civil Procedure, assailing the writ of preliminary
injunction issued by respondent Judge on the ground of grave abuse of discretion amounting
to lack of jurisdiction.
It is the submission of the petitioner that the assailed order is in direct defiance of Republic
Act 6657, particularly Section 55 and 68 thereof, which read:
SECTION 55. NO RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS No court in the
Philippines shall have jurisdiction to issue any restraining order or writ of preliminary
injunction against the PARC or any of its duly authorized or designated agencies in any case,
dispute or controversy arising from, necessary to, or in connection with the application,
implementation, or enforcement or interpretation of this Act and other pertinent laws on
agrarian reform.
SECTION 68 IMMUNITY OF GOVERNMENT AGENCIES FROM COURTS INTERFERENCE No
injunction, Restraining Order, prohibition or mandamus shall be issued by the lower court
against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the
Department of Environment and Natural Resources (DENR), and the Department of Justice
(DOJ) in the implementation of their program.
Petitioner contends that by virtue of the above provisions, all lower courts, such as the court
presided over by respondent Judge, are barred if not prohibited by law to issue orders of
injunctions against the Department of Agrarian Reform in the full implementation of the
Notice of Coverage which is the initial step of acquiring lands under R.A. 6657.
Petitioner also contends that the nature and subject matter of the case below is purely
agrarian in character over which the court a quo has no jurisdiction and that therefore, it had
no authority to issue the assailed injunction order.[5]
Ruling of the Court of Appeals
Stressing that the issue was not simply the improper issuance of the Notice of Coverage, but
was mainly the constitutionality of Executive Order No. 405, the CA ruled that the Regional
Trial Court (RTC) had jurisdiction over the case. Consonant with that authority, the court a
quo also had the power to issue writs and processes to enforce or protect the rights of the
parties.
The appellate court likewise held that petitioners reliance on Sections 55 and 68 of RA 6657
had been misplaced, because the case was not about a purely agrarian matter. It opined
that the prohibition in certain statutes against such writs pertained only to injunctions
against administrative acts, to controversies involving facts, or to the exercise of discretion

in technical cases. But on issues involving pure questions of law, courts were not prevented
from exercising their power to restrain or prohibit administrative acts.
Hence, this Petition.[6]
Issues
In its Memorandum, petitioner raises the following issues:
1. The Honorable Court of Appeals committed serious error by not taking into cognizance
that the issues raised in the complaint filed by the private respondent, which seeks to
exclude his land from the coverage of the CARP, is an agrarian reform matter and within the
jurisdiction of the DAR, not with the trial court.
2. The Honorable Court of Appeals, with due respect, gravely abused its discretion by
sustaining the writ of injunction issued by the trial court, which is a violation of Sections 55
and 68 of Republic Act No. 6657.[7]
The Courts Ruling
The Petition has merit.
First Issue:
Jurisdiction
In its bare essentials, petitioners argument is that private respondent, in his Complaint for
Annulment of the Notice of Coverage, is asking for the exclusion of his landholding from the
coverage of the Comprehensive Agrarian Reform Program (CARP). According to the DAR, the
issue involves the implementation of agrarian reform, a matter over which the DAR has
original and exclusive jurisdiction, pursuant to Section 50 of the Comprehensive Agrarian
Reform Law (RA 6657).
On the other hand, private respondent maintains that his Complaint assails mainly the
constitutionality of EO 405. He contends that since the Complaint raises a purely legal issue,
it thus falls within the jurisdiction of the RTC. We do not agree.
Conflicts involving jurisdiction over agrarian disputes are as tortuous as the history of
Philippine agrarian reform laws. The changing jurisdictional landscape is matched only by
the tumultuous struggle for, and resistance to, the breaking up and distribution of large
landholdings.
Two Basic Rules
Two basic rules have guided this Court in determining jurisdiction in these cases. First,
jurisdiction is conferred by law. [8] And second, the nature of the action and the issue of
jurisdiction are shaped by the material averments of the complaint and the character of the
relief sought.[9] The defenses resorted to in the answer or motion to dismiss are disregarded;
otherwise, the question of jurisdiction would depend entirely upon the whim of the
defendant.[10]
Grant of Jurisdiction
Ever since agrarian reform legislations began, litigants have invariably sought the aid of the
courts. Courts of Agrarian Relations (CARs) were organized under RA 1267[11] [f]or the
enforcement of all laws and regulations governing the relation of capital and labor on all
agricultural lands under any system of cultivation. The jurisdiction of these courts was
spelled out in Section 7 of the said law as follows:
Sec. 7. Jurisdiction of the Court. - The Court shall have original and exclusive jurisdiction over
the entire Philippines, to consider, investigate, decide, and settle all questions, matters,
controversies or disputes involving all those relationships established by law which
determine the varying rights of persons in the cultivation and use of agricultural land where
one of the parties works the land, and shall have concurrent jurisdiction with the Court of
First Instance over employer and farm employee or labor under Republic Act Numbered six
hundred two and over landlord and tenant involving violations of the Usury Law (Act No.
2655, as amended) and of inflicting the penalties provided therefor.
All the powers and prerogatives inherent in or belonging to the then Courts of First
Instance[12] (now the RTCs) were granted to the CARs. The latter were further vested by the
Agricultural Land Reform Code (RA 3844) with original and exclusive jurisdiction over the
following matters:

(1) All cases or actions involving matters, controversies, disputes, or money claims arising
from agrarian relations: x x x
(2) All cases or actions involving violations of Chapters I and II of this Code and Republic Act
Number eight hundred and nine; and
(3) Expropriations to be instituted by the Land Authority: x x x.[13]
Presidential Decree (PD) No. 946 thereafter reorganized the CARs, streamlined their
operations, and expanded their jurisdiction as follows:
Sec. 12. Jurisdiction over Subject Matter. - The Courts of Agrarian Relations shall have
original and exclusive jurisdiction over:
a) Cases involving the rights and obligations of persons in the cultivation and use of
agricultural land except those cognizable by the National Labor Relations Commission; x x
x;
b) Questions involving rights granted and obligations imposed by laws, Presidential Decrees,
Orders, Instructions, Rules and Regulations issued and promulgated in relation to the
agrarian reform program; Provided, however, That matters involving the administrative
implementation of the transfer of the land to the tenant-farmer under Presidential Decree
No. 27 and amendatory and related decrees, orders, instructions, rules and regulations, shall
be exclusively cognizable by the Secretary of Agrarian Reform, namely:
(1) classification and identification of landholdings;
(2) x x x;
(3) parcellary mapping;
(4) x x x;
xxxxxxxxx
m) Cases involving expropriation of all kinds of land in furtherance of the agrarian reform
program;
xxxxxxxxx
p) Ejectment proceedings instituted by the Department of Agrarian Reform and the Land
Bank involving lands under their administration and disposition, except urban properties
belonging to the Land Bank;
q) Cases involving violations of the penal provisions of Republic Act Numbered eleven
hundred and ninety-nine, as amended, Republic Act Numbered thirty eight hundred and
forty-four, as amended, Presidential Decrees and laws relating to agrarian reform; Provided,
however, That violations of the said penal provisions committed by any Judge shall be tried
by the courts of general jurisdiction; and
r) Violations of Presidential Decrees Nos. 815 and 816.
The CARs were abolished, however, pursuant to Section 44 [14] of Batas Pambansa Blg.
129[15] (approved August 14, 1981), which had fully been implemented on February 14,
1983. Jurisdiction over cases theretofore given to the CARs was vested in the RTCs. [16]
Then came Executive Order No. 229. [17] Under Section 17 thereof, the DAR shall exercise
quasi-judicial powers to determine and adjudicate agrarian reform matters, and shall have
exclusive jurisdiction over all matters involving implementation of agrarian reform, except
those falling under the exclusive original jurisdiction of the DENR and the Department of
Agriculture [DA]. The DAR shall also have the powers to punish for contempt and to issue
subpoena, subpoena duces tecum and writs to enforce its orders or decisions.
In Quismundo v. CA,[18] this provision was deemed to have repealed Section 12 (a) and (b) of
Presidential Decree No. 946, which vested the then Courts of Agrarian Relations with original
exclusive jurisdiction over cases and questions involving rights granted and obligations
imposed by presidential issuances promulgated in relation to the agrarian reform program.
Under Section 4 of Executive Order No. 129-A, the DAR was also made responsible for
implementing the Comprehensive Agrarian Reform Program. In accordance with Section 5 of
the same EO, it possessed the following powers and functions:
(b) Implement all agrarian laws, and for this purpose, punish for contempt and issue
subpoena, subpoena duces tecum, writs of execution of its decisions, and other legal
processes to ensure successful and expeditious program implementation; the decisions of

the Department may in proper cases, be appealed to the Regional Trial Courts but shall be
immediately executory notwithstanding such appeal;
xxxxxxxxx
(h) Provide free legal services to agrarian reform beneficiaries and resolve agrarian conflicts
and land-tenure related problems as may be provided for by law;
xxxxxxxxx
(l) Have exclusive authority to approve or disapprove conversion of agricultural lands for
residential, commercial, industrial, and other land uses as may be provided x x x."
The above grant of jurisdiction to the DAR covers these areas:
(a) adjudication of all matters involving implementation of agrarian reform;
(b) resolution of agrarian conflicts and land tenure related problems; and
(c) approval or disapproval of the conversion, restructuring or readjustment of agricultural
lands into residential, commercial, industrial, and other non-agricultural uses.
The foregoing provision was as broad as those theretofore vested in the Regional Trial Court
by Presidential Decree No. 946, as the Court ruled in Vda. de Tangub v. CA, [19] which we
quote:
x x x. The intention evidently was to transfer original jurisdiction to the Department of
Agrarian Reform, a proposition stressed by the rules formulated and promulgated by the
Department for the implementation of the executive orders just quoted. The rules included
the creation of the Agrarian Reform Adjudication Board designed to exercise the adjudicatory
functions of the Department, and the allocation to it of
x x x [O]riginal and exclusive jurisdiction over the subject matter vested upon it by law, and
all cases, disputes, controversies and matters or incidents involving the implementation of
the Comprehensive Agrarian Reform Program under Executive Order No. 229, Executive
Order No. 129-A, Republic Act No. 3844, as amended by Republic Act No. 6289, Presidential
Decree No. 27 and other agrarian laws and their implementing rules and regulations.
The implementing rules also declare that (s)pecifically, such jurisdiction shall extend over
but not be limited to x x x (that theretofore vested in the Regional Trial Courts, i.e.) (c)ases
involving the rights and obligations of persons engaged in the cultivation and use of
agricultural land covered by the Comprehensive Agrarian Reform Program (CARP) and other
agrarian laws x x x.[20]
In the same case, the Court also held that the jurisdictional competence of the DAR had
further been clarified by RA 6657 thus:
x x x. The Act [RA 6657] makes references to and explicitly recognizes the effectivity and
applicability of Presidential Decree No. 229. More particularly, the Act echoes the provisions
of Section 17 of Presidential Decree No. 229, supra, investing the Department of Agrarian
Reform with original jurisdiction, generally, over all cases involving agrarian laws, although,
as shall shortly be pointed out, it restores to the Regional Trial Court, limited jurisdiction over
two groups of cases. Section 50 reads as follows:
SEC. 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive
original jurisdiction over all matters involving the implementation of agrarian reform, except
those falling under the exclusive jurisdiction of the Department of Agriculture [DA] and the
Department of Environment and Natural Resources [DENR].
xxxxxxxxx
It shall have the power to summon witnesses, administer oaths, take testimony, require
submission of reports, compel the production of books and documents and answers to
interrogatories and issue subpoena and subpoena duces tecum and to enforce its writs
through sheriffs or other duly deputized officers. It shall likewise have the power to punish
direct and indirect contempt in the same manner and subject to the same penalties as
provided in the Rules of Court.[21]
Nonetheless, we have held that the RTCs have not been completely divested of jurisdiction
over agrarian reform matters. Section 56 of RA 6657 confers special jurisdiction on Special
Agrarian Courts, which are actually RTCs designated as such by the Supreme Court. [22] Under

Section 57 of the same law, these Special Agrarian Courts have original and exclusive
jurisdiction over the following matters:
1) all petitions for the determination of just compensation to land-owners, and
2) the prosecution of all criminal offenses under x x x [the] Act.
The above delineation of jurisdiction remains in place to this date. Administrative Circular
No. 29-2002[23] of this Court stresses the distinction between the quasi-judicial powers of the
DAR under Sections 50 and 55 of RA 6657 and the jurisdiction of the Special Agrarian Courts
referred to by Sections 56 and 57 of the same law.
Allegations of the Complaint
A careful perusal of respondents Complaint[24] shows that the principal averments and reliefs
prayed for refer -- not to the pure question of law spawned by the alleged unconstitutionality
of EO 405 -- but to the annulment of the DARs Notice of Coverage. Clearly, the main thrust
of the allegations is the propriety of the Notice of Coverage, as may be gleaned from the
following averments, among others:
6. This implementation of CARP in the landholding of the [respondent] is contrary to law and,
therefore, violates [respondents] constitutional right not to be deprived of his property
without due process of law. The coverage of [respondents] landholding under CARP is NO
longer with authority of law. If at all, the implementation of CARP in the landholding of
[respondent] should have commenced and [been] completed between June 1988 to June
1992 as provided for in CARL, to wit: x x x;
7. Moreover, the placing of [respondents] landholding under CARP as of 21 September 1999
is without the imprimatur of the Presidential Agrarian Reform Council (PARC) and the
Provincial Agrarian Reform Coordinating Committee (PARCOM) as mandated and required by
law pursuant to R.A. 7905 x x x;
xxxxxxxxx
9. Under the provisions of CARL, it is the PARC and/or the DAR, and not x x x Land Bank,
which is authorized to preliminarily determine the value of the lands as compensation
therefor, thus x x x;
xxxxxxxxx
12. That the aforementioned NOTICE OF COVERAGE with intendment and purpose of
acquiring [respondents] aforementioned land is a gross violation of law (PD 399 dated 28
February 1974 which is still effective up to now) inasmuch as [respondents] land is traversed
by and a road frontage as admitted by the DARs technician and defendant FORTUNADO
(MARO) x x x;
13. That as reflected in said Pre-Ocular Inspection Report, copy of which is hereto attached
as annex D forming part hereof, [respondents] land is above eighteen percent (18%) slope
and therefore, automatically exempted and excluded from the operation of Rep. Act 6657, x
x x.[25] (Italics supplied)
In contrast, the 14-page Complaint touches on the alleged unconstitutionality of EO 405 by
merely making these two allegations:
10. Executive Order No. 405 dated 14 June 1990 (issued by the then President Corazon
Aquino) is unconstitutional for it plainly amends, modifies and/or repeals CARL. On 14 June
1990, then President Corazon Aquino had no longer law-making powers as the Philippine
Congress was by then already organized, existing and operational pursuant to the 1987
Constitution. A copy of the said Executive Order is hereto attached as Annex B forming part
hereof.
11. Our constitutional system of separation of powers renders the said Executive Order No.
405 unconstitutional and all valuations made, and to be made, by the defendant Land Bank
pursuant thereto are null and void and without force and effect. Indispensably and
ineludibly, all related rules, regulations, orders and other issuances issued or promulgated
pursuant to said Executive Order No. 405 are also null and void ab initio and without force
and effect.[26]
We stress that the main subject matter raised by private respondent before the trial court
was not the issue of compensation (the subject matter of EO 405 [27]). Note that no amount

had yet been determined nor proposed by the DAR. Hence, there was no occasion to invoke
the courts function of determining just compensation.[28]
To be sure, the issuance of the Notice of Coverage [29] constitutes the first necessary step
towards the acquisition of private land under the CARP. Plainly then, the propriety of the
Notice relates to the implementation of the CARP, which is under the quasi-judicial
jurisdiction of the DAR. Thus, the DAR could not be ousted from its authority by the simple
expediency of appending an allegedly constitutional or legal dimension to an issue that is
clearly agrarian.
In view of the foregoing, there is no need to address the other points pleaded by respondent
in relation to the jurisdictional issue. We need only to point that in case of doubt, the
jurisprudential trend is for courts to refrain from resolving a controversy involving matters
that demand the special competence of administrative agencies, even if the question[s]
involved [are] also judicial in character,[30] as in this case.
Second Issue:
Preliminary Injunction
Having declared the RTCs to be without jurisdiction over the instant case, it follows that the
RTC of La Carlota City (Branch 63) was devoid of authority to issue the assailed Writ of
Preliminary Injunction. That Writ must perforce be stricken down as a nullity. Such nullity is
particularly true in the light of the express prohibitory provisions of the CARP and this Courts
Administrative Circular Nos. 29-2002 and 38-2002. These Circulars enjoin all trial judges to
strictly observe Section 68 of RA 6657, which reads:
Section 68. Immunity of Government Agencies from Undue Interference. No injunction,
restraining order, prohibition or mandamus shall be issued by the lower courts against the
Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department
of Environment and Natural Resources (DENR) and the Department of Justice (DOJ) in their
implementation of the program.
WHEREFORE, the Petition is hereby GRANTED, and the challenged Decision and
Resolution REVERSED AND SET ASIDE. Accordingly, the February 16, 2000 Order of
the RegionalTrial Court of La Carlota City (Branch 63) is ANNULLED and a new one
entered, DISMISSING the Complaint in Civil Case 713. The Writ of Preliminary Injunction
issued therein is also expressly VOIDED. No costs.
SO ORDERED.
Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

AGRARIAN REFORM LAW ASSIGNMENT FOR SEPTEMBER 7, 2015

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AGRARIAN REFORM LAW ASSIGNMENT FOR SEPTEMBER 7, 2015
Part Nine Mechanisms for Program Implementation
4. Elements of Tenancy
Cases:
Bernas vs. CA, 225 SCRA 119 Consent of the lawful possessor creates tenancy;
Castillo vs. CA, 205 SCRA 229 A hollow block maker or piggery/poultry owner cannot
claim tenancy on land which is not devoted to agricultural production;
Tiongson vs. CA, 214 SCRA 197 Tenancy is created by the consent of the true and
lawful landholder through lawful means and not by imposition or usurpation;
Matienzo vs. Servidad, 107 SCRA 276 (1981). There is no tenancy because of the
absence sharing arrangement with an overseer;
5. Caballes vs. DAR, 168 SCRA 254 (1988). Agricultural production is not present.
Respondent is only a caretaker who cannot qualify to be a tenant;
Note: Latag vs. Banog, 16 SCRA 88, the SC considered a caretaker as a tenant.
6. Teodoro vs. Macaraeg, 27 SCRA 7 (1969). Where there is sharing of the produce or rental
payment tenancy exist.
5. Right of Redemption
Case: Spouses Eligio P. Mallari et al. vs. Ignacio Arcega, et al. [G.R. No. 106615. March 20,
2002]
7. Award to Beneficiaries Sec. 9 of RA 9700 amending Sec. 24 of RA 6657
Issuance: DAR AO 3, S. 2009 Rules and Procedures Governing the Cancellation of
Registered CLOAs, EPs and Other Titles Issued under Any Agrarian Reform Frogram
Case: DAR v. Cuenca, G.R. No. 154112. September 23, 2004
8. Exclusive Jurisdiction on Agrarian Dispute Sec. 19, RA 9700 amending Sec. 50-A, RA
6657
Issuance: DAR AO 4, S. 2009 Rules and Regulations Implementing Sec. 19 of RA 9700
(Jurisdiction on and Referral of Agrarian Disputes)