ALLOWED VOLUNTARY SURRENDER

G.R. No. 165494 March 20, 2009

ANGELITA, REYNALDO, NARCISO, CECILIA, FEDERIO and LEONIDA all

surnamed LEVARDO and NORMA PONTANOS VDA. DE LEVARDO, for herself and as
proposed Guardian Ad Litem of her minor daughter ELENAP. LEVARDO, Petitioners,
vs.
TOMAS B. YATCO and GONZALO PUYAT and SONS, INC., represented By JOSE G.
PUYAT, JR., President, as Principal defendants and DR. RUBEN B. YATCO, as necessary
defendant. Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

HERNANDO LEVARDO, Petitioner,

vs.
LEONCIO YATCO and GONZALO PUYAT and SONS, INC., represented by JOSE G.
PUYAT, JR., and GAUDENCIO BAUTISTA, Respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to set aside the September 27, 2004 Decision1 of the Court of Appeals (CA) in CA-G.R.
SP No. 69220 which affirmed the June 20, 2000 Resolution2 and January 21, 2002 Resolution3 of
the Department of Agrarian Reform Adjudication Board (DARAB).

Stripped of the non-essentials, the facts of the case are as follows:

DARAB Case No. 3361

Asuncion Belizario (Belizario) is the owner of a parcel of land with an area of 4.3488 hectares
located in Binan, Laguna. On May 17, 1971, Belizario donated the said parcel of land to herein
respondent Tomas Yatco (Tomas) as evidenced by a Deed of Donation Inter Vivos. Said land is
tenanted by Aguido Levardo (Aguido). During his lifetime, Aguido executed a "Pinanumpaang
Salaysay,"4 where he declared:

xxxx

Na AKO, sampu ng aking pamilya ay nagpasiya na buong puso at laya, na ibalik, isasauli at
ibalik ang lahat ng aking karapatan sa paggawa o pananakahan sa nasabing x x x hectarya x x
x area at x x x centares ng naulit ng isang lagay na lupa, sa may-ari ng nabanggit na lupa dahil
sa aming kagustuhang umiba ng hanapbuhay, ng higit ang pagkikitaan kaysa pananakahan.
Na AKO, sampu ng aking anak ay lubos na nagpapasalamat sa kagandahang loob ng mga may-
ari na nabanggit na lupa, sa mabuting pakikisama nila sa aking mga kapatid at sa kanya ring
pagbibigay ng pabuya at bayad pinsala (Disturbance fee) sa aking ginagawang pagbabalik,
pagsasauli at pagbibigay ng lahat ng karapatan sa paggawa sa naulit na x x x hectarya x x x
area x x x centares na aking sinasaka.

Na sa aking ginagawang pagbabalik, pagsasauli at pagbibigay ng lahat ng aking karapatan sa

paggawa nasabing bukid sa may-ari nito ay kaalam ang aking kapatid at lahat kami ay walang
gagawing paghahabol salapi o ano pa man laban sa may-ari nitong lupang nabanggit, sa
hukuman o sa Ministry of Agrarian Reform.5

The foregoing document was also signed by Aguido’s children, namely: Angelita, Reynaldo,
Narciso, Cecilia, all surnamed Levardo (petitioners), and was notarized on April 1986. By virtue
of the said document, Tomas paid to Aguido disturbance compensation amounting to
₱2,000,000.00. Aguido died on October 9, 1986.

On April 27, 1990, Tomas sold the said parcel of land to respondent Gonzalo Puyat and Sons,
Inc. (Puyat Corporation).6

On May 24, 1991, petitioners filed with the Office of the Provincial Agrarian Reform
Adjudicator (PARO) a complaint for the annulment of the Deed of Donation Inter Vivos and
Deed of Absolute Sale, and to declare as null and void ab initio the waiver of tenancy rights of
the late Aguido.7 Petitioners claim that the land in dispute was covered by Operation Land
Transfer (OLT) pursuant to Presidential Decree No. 27 (P.D. No. 27).8 Specifically, petitioners
contend that they were already deemed the owners of the land on the basis of an alleged
Certificate of Land Transfer (CLT) in the name of their father Aguido, which was never issued
by the DAR, but on the basis of an alleged certified xerox copy of a Masterlist of tenants wherein
his name appeared.9

DARAB Case No. 3362

Herein respondent Leoncio Yatco (Leoncio) is the owner of a parcel of land with an area of
4.2406 hectares located in Binan, Laguna. Said land is tenanted by Francisco Levardo
(Francisco) and his son Hernando, a co-petitioner in the present petition. During his lifetime,
Hernando executed a "Pinanumpaang Salaysay,"10 where he declared:

xxxx

Na AKO, sampu ng aking pamilya ay nagpasiya ng buong puso at laya, na ibinalik, isasauli at
ibalik ang lahat ng aking karapatan sa paggawa o pananakahan sa nasabing xxx hectarya xxx
area at xxx centares ng naulit na isang lagay na lupa, sa may-ari ng nabanggit na lupa dahil sa
aming kagustuhang umiba ng hanap buhay ng higit and pagkikitaan sa panakahan.

Na AKO, sampu ng aking mga anak ay lubos na nagpapasalamat sa kagandahang loob ng mga
may-ari na nabanggit na lupa, sa mabuting pakikisama nila sa aking mga magulang at sa kanya
ring pagbibigay ng pabuya at bayad pinsala (Disturbance fee) sa aking ginagawang pagbabalik,
pagsasauli at pagbibigay ng lahat ng karapatan sa paggawa sa nauli't na x x x hectarya x x x
area x x x centares na aking sinasaka.

Na sa aking ginagawang pagbabalik, pagsasauli at pagbibigay ng lahat ng aking karapatan sa

paggawa nasabing bukid sa may-ari nito ay kaalam ang aking magulang at lahat kami ay
walang gagawing paghahabol salapi o ano pa man laban sa may-ari nitong lupang nabanggit,
sa hukuman o sa Ministry of Agrarian Reform.11

The foregoing document was also signed by Francisco and was notarized on January 10, 1990.
By virtue of the said agreement, Leoncio paid to Hernando the amount of ₱2,417,142.00 as
disturbance compensation. Leoncio thereafter sold the parcels of lands to the Puyat Corporation.

On July 8, 1991, Hernando, together with Francisco, filed with the PARO a complaint for the
Annulment of Deed of Donation Inter Vivos and Deed of Absolute Sale and to declare as null
and void ab initio the waiver of tenancy rights executed by him. Hernando claims that the land in
dispute was covered by an OLT pursuant to P.D. No. 27.12 More specifically, Hernando claims
that he and his father were already deemed the owners of the land on the basis of an alleged CLT
in their names, which was never issued by the DAR, but on the basis of an alleged certified xerox
copy of a Masterlist of tenants wherein their names appeared.13

THE PARO RULING

In DARAB Case No. 3361

On December 3, 1993, the PARO rendered a Decision,14 declaring the waiver of tenancy rights,
the Deed of Donation Inter Vivos and the Deed of Sale as null and void. Furthermore, the PARO
ordered the Department of Agrarian Reform (DAR) to issue an Emancipation Patent Title in
favor of the heirs of Aguido.

In DARAB Case No. 3362

On December 15, 1993, the PARO rendered a Decision,15 declaring the waiver of tenancy rights
and the Deed of Sale as null and void. The PARO also ordered the DAR to issue an
Emancipation Patent Title in favor of Francisco and Hernando.

Respondents filed a motion for reconsideration questioning both decisions of the PARO.

On September 5, 1994, the PARO issued an Order16 granting respondents’ motion, the
dispositive portion of which reads as follows:

WHEREFORE, in light of the foregoing, the defendants VERIFIED MOTION FOR

RECONSIDERATION is hereby GRANTED and the DECISIONS sought to be reconsidered are
hereby SET ASIDE and in lieu thereof, a decision is entered as follows:

FIRST (DARAB CASE NO. 0116)

 1. Declaring the Waiver of tenancy rights as valid x x x.

2. Declaring and upholding the validity of the Deed of Donation Intervivos (Exhibit "K")
and the Deed of Sale (Exhibit "N") x x x.

SECOND CASE (DARAB CASE NO. 0125)

1. Declaring the Waiver of tenancy rights as valid x x x

2. Declaring and upholding the validity of the Deed of Sale (Exhibit "H") x x x x

In both cases, subject landholdings were declared outside OLT coverage and untenanted.

SO ORDERED.17

In said Order, the PARO ruled that the lands in dispute were outside OLT coverage, and that no
CLTs were issued and registered with the Register of Deeds.18 The PARO further ruled that the
waivers of tenancy rights executed by petitioners were duly notarized, and that in order to
disprove the presumption of regularity in its favor, there must have been clear, convincing and
more than merely preponderant evidence. The PARO ruled that there was no proof to overcome
the presumption of regularity of the aforementioned public documents and thus upheld the law in
favor of the validity of said documents.19

Petitioners then appealed the PARO Order to the DARAB.

The DARAB Ruling

On March 29, 2000 the DARAB issued a Decision20 reversing the September 5, 1994 Order of
the PARO and reinstating the December 3, 1993 Decision of the PARO.

Respondents then filed a Motion for Reconsideration of the DARAB Decision. On June 20,
2000, the DARAB issued a Resolution21 granting the motion for reconsideration. The dispositive
portion of said decision reads as follows:

WHEREFORE premises considered, the defendants-appellees verified Motion for

Reconsideration is hereby granted and the Decision dated March 29, 2000 rendered by the Board
is hereby RECONSIDERED and SET ASIDE and the ORDER dated September 5, 1994
rendered by the Provincial Adjudicator a quo is hereby AFFIRMED and REINSTATED.

SO ORDERED.

In said Order, the DARAB ruled that the lands in dispute were outside OLT coverage, and that
no CLTs were issued to petitioners. Moreover, the DARAB held that the waiver of tenancy
rights by Aguido was valid and enforceable and binding on the petitioners, who were also
signatories to the document.22 Likewise, the DARAB upheld that validity of the waiver of
tenancy rights of Hernando which was also signed by his father Francisco.
Petitioners filed a Motion for Reconsideration which was, however, denied by the DARAB on
January 21, 2002. Petitioners then appealed the DARAB Decision to the CA.

The CA Ruling

On September 27, 2004, the CA rendered a decision denying23 the petition, the dispositive
portion of which reads:

WHEREFORE, the petition is DENIED due course, and the Resolution of DARAB issued on
June 20, 2000, as well as its Resolution denying the motion for reconsideration of petitioners
dated January 21, 2002 are both AFFIRMED in all respect.

SO ORDERED.24

Pursuant to the Court's ruling in Ernesto v. Court of Appeals25 that no motion for reconsideration
may be entertained from the said decision of the CA, under Section 18, P.D. No. 946, petitioners
appealed to this Court via herein petition, with the following assignment of errors:

1. WHETHER PRESIDENTIAL DECREE NO. 27, TRANSFERRING OWNERSHIP OF

THE IRRIGATED RICE LANDS IN FAVOR OF PETITIONERS, PREDECESSORS
FRANCISCO LEVARDO AND HERNANDO LEVARDO, AND AGUEDO LEVARDO,
BOTH DECEASED, WHO WERE AGRICULTURAL TENANTS OF RICE LANDS
WERE DEEMED OWNERS OF THE LAND[S] THEY WERE TILLING;

2. WHETHER SAID PRECESSORS OF PETITIONERS HAVE PAID FOR THE COSTS

OF THE LAND[S] PURSUANT TO EXECUTIVE ORDER NO. 228 ISSUED ON JULY 7,
1987, AND AS SUCH, THE ABSOLUTE OWNERS THEREOF;

3. WHETHER THE CERTIFICATE[S] OF LAND TRANSFER ISSUED IN FAVOR OF

PETITIONERS-PREDECESSORS NULLIFY THE WAIVER OF RIGHTS EXECUTED
BY THEM AND WHETHER THE CERTIFICATES OF LAND TRANSFER WHICH
WERE CANCELLED WITHOUT GIVING THEM RIGHT TO BE HEARD [ARE]
LEGAL AND VALID.

4. WHETHER THE LANDOWNER LEONCIO YATCO MAY LEGALLY AND

VALIDLY CONVEY THE RICE LAND[S] COVERED BY PRESIDENTIAL DECREE
NO. 27 AND [OF] WHICH THE PETITIONERS PREDECESSORS WERE THE
ABSOLUTE OWNERS IN FAVOR OF RESPONDENT PUYAT AND SONS, INC.26

The Court’s Ruling

The petition is not meritorious.

The basic issue in the case at bar is whether the lands in dispute are covered by P.D. No. 27
entitled, "Decreeing the emancipation of tenants from the bondage of the soil transferring to
them the ownership of the land[s] they till and providing the instruments and mechanism
therefore." The pertinent portions of the Decree are as follows:

xxxx

This shall apply to tenant-farmers of private agricultural lands primarily devoted to rice and corn
under a system of share-crop or lease-tenancy, whether classified as landed estate or not;

The tenant farmer, whether in land classified as landed estate or not, shall be deemed
owner of a portion constituting a family-size farm of five (5) hectares if not irrigated and
three (3) hectares if irrigated. (Emphasis Supplied)

P.D. No. 27 should be read in conjunction with Letter of Instruction No. 474 (LOI No. 474) and
the DAR Memorandum on the "Interim Guidelines on Retention by Small Landowners" dated
July 10, 1975 (DAR Memorandum).

The pertinent portion of LOI No. 474 is as follows:

1. You shall undertake to place the Land Transfer Program of the government pursuant to
Presidential Decree No. 27, all tenanted rice/corn lands with areas of seven hectares or less
belonging to landowners who own other agricultural lands of more than seven hectares in
aggregate areas or lands used for residential, commercial, industrial or other urban
purposes from which they derive adequate income to support themselves and their families.
(Emphasis and underscoring supplied)1avvphi1

The pertinent portion of the DAR Memorandum is as follows:

xxxx

5. Tenanted rice and/or corn lands seven (7) hectares or less shall not be covered by
Operation Land Transfer. The relation of the land owner and tenant-farmers in these areas
shall be leasehold x x x (Emphasis supplied)

Based on the foregoing, it is clear that the lands in dispute do not fall under the coverage of P.D.
No. 27. The DAR Memorandum is categorical that lands with seven hectares or less shall not be
covered by OLT. In DARAB Case No. 3361, the land in dispute only had an area of 4.3488
hectares. In DARAB Case No. 3362, the land in dispute only has an area of 4.2406 hectares.

Furthermore, LOI No. 474 contains a provision that lands less than seven hectares or less may
still fall under the coverage of P.D. No. 27, if the landowner owns other properties. On this point,
this Court agrees with the finding of the DARAB, when it observed that there was no record of
any circumstance found by DAR field personnel that the landowner owned other agricultural
lands in excess of seven hectares or urban land area, from which he derived adequate income for
his support and that of his family.27 It was incumbent on petitioners to show that respondents
owned other properties in excess of seven hectares, since he who alleges a fact has the burden of
proving it.28 Moreover, as found by the DARAB, there is nothing of record to show that CLTs
have in fact been issued to petitioners or their predecessors.29

Based on the DAR Memorandum, the relationship of petitioners and respondents shall be one of
leasehold. This Court finds that respondents have complied with Section 28 of Republic Act No.
3844:30

Section 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year –

The agricultural lessee may terminate the leasehold during the agricultural year for any of the
following causes:

xxxx

(5) Voluntary surrender due to circumstances more advantageous to him and his family.
(Emphasis supplied)

Based on the evidence on record, respondents paid Aguido ₱2,000,000.00 and Hernando
₱2,417,142.00 as disturbance compensation. A reading of the Pinanumpaang Salaysay executed
by petitioners show that they gave up their leasehold rights "dahil sa aming kagustuhang umiba
ng hanap buhay ng higit ang pagkikitaan kaysa panakahan." The money given by respondents as
disturbance compensation was indeed advantageous to the families of petitioners, as it would
have allowed them to pursue other sources of livelihood.1avvphi1

Petitioners did not refute in their pleadings the authenticity of the documents purporting to be
their waiver of tenancy rights. As a matter of fact, they themselves attached the said documents
to their complaints and argued that said waivers were obtained through fraud and
misrepresentation, since they were unaware that CLTs were issued in their names.31 However,
such argument deserves scant consideration, since it has been established that no such CLTs
were issued to petitioners; and more importantly, the lands in dispute do not fall under the
coverage of P.D. No. 27. In addition, said waivers of tenancy rights were notarized and therefore
the same have the presumption of regularity in their favor.32 There is nothing on record to
convince this Court to hold otherwise.

The documents presented by petitioners to prove that CLTs were in fact issued in their names
have no probative value. An examination of the documents shows that they are two photocopied
pages of what purports to be a "Masterlist of Tenants issued CLTs."33 Page 6801, where the
name of Aguido is listed, appears to be a certified xerox copy sourced from the Bureau of Land
Acquisition and Distribution. Page 5695, where the names of Hernando and Francisco are listed,
is not so authenticated; thus, its source is highly suspect. These two documents are not
sufficiently useful in proving the fact that the CLTs, which would be the best evidence of
petitioners’ claim over the subject properties, were actually issued. At best, they only serve to
prove the probability that CLTs may have been issued in the name of the petitioners. These
documents do not and cannot override the PARO and DARAB findings that no CLTs were
issued to petitioners.
Moreover, assuming arguendo that CLTs were actually issued to petitioners, a CLT does not vest
in the farmer/grantee ownership of the land described therein. At most, the CLT merely
evidences the government’s recognition of the grantee as partly qualified to await the statutory
mechanism for the acquisition of ownership of the land titled by him as provided in P.D. No. 27.
Neither is this recognition permanent or irrevocable.34 Herein petitioners cannot escape the fact
that the lands in dispute do not fall under the coverage of P.D. No. 27; and thus, any supposed or
alleged CLTs issued in their names are without bases.

Because petitioners have received millions of pesos as disturbance compensation and the lands in
dispute do not fall under the coverage of P.D. No. 27, this Court cannot allow them to renege on
their agreement with respondents. It must be remembered that the protective mantle of social
justice was never meant to disregard the rights of landowners. Consequently, the conveyances
made to respondents Puyat Corporation are valid.

Because of the foregoing, it would be unnecessary to discuss the other issues raised by
petitioners.

WHEREFORE, the petition is denied for lack of merit.

The September 27, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 69220 is hereby
AFFIRMED.

Costs against petitioners.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

DANTE O. TINGA* ANTONIO EDUARDO B. NACHURA

Associate Justice Associate Justice

DIOSDADO M. PERALTA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s
Attestation, it is hereby certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

Footnotes

* In lieu of Justice Minita V. Chico-Nazario, per Special Order dated March 17, 2009.
1
Penned by Associate Justice Eugenio S. Labitoria with the concurrence of Associate
Justices Rebecca de Guia-Salvador and Rosalinda Asuncion-Vicente, rollo, pp. 73-83.
2
Id. at 57-65
3
Id. at 70-71.
4
Annex "H" of Complaint, DARAB Records, Vol. I, pp. 27-28; Annex "3" of
Supplemental Motion to Dismiss, id. at 143.
5
Id. at 240.
6
Rollo, p. 60.
7
Id. at 288.
8
Id. at 34.
9
Id. at 177.
10
Annex "D" of Complaint, DARAB Records, Vol. II, p. 86.
11
Rollo, p. 245.
12
Id. at 34.
13
Id. at 178.
14
CA rollo, pp. 107-123.
15
Rollo, pp. 138-152.
16
Id. at 176-194.
17
Rollo, pp. 193-194.
18
Id. at 189.
19
Id. at 190.
20
Id. at 39-54.
21
Id. at 57-65.
22
Rollo, p. 61.
23
Id. at 73-83.
24
Id. at 82.
25
No. L- 52178, September 28, 1982, 116 SCRA 755.
26
Rollo, p. 311.
27
Rollo, p. 61.
28
Antonio v. Estrella, No. L- 73319, December 1, 1989, 156 SCRA 68.
29
Antonio v. Estrella, supra note 28, at 62 and 64.
30
Agricultural Land Reform Code, August 8, 1963, as amended by Republic Act No.
6389.
31
Rollo, p. 128.
32
Antonio v. Estrella, supra note 28.
33
Exhibit "I," DARAB Records, Vol. 1, p. 211; Exhibit "F," DARAB Records, Vol. II, p.
222.
34
Pagtalunan v. Tamayo, G.R. No. 54281, March 19, 1990, 183 SCRA 252.
DISALLOWED VOLUNTARY SURRENDER

G.R. No. 180374 January 22, 2010

BIENVENIDO T. BUADA, ISAIAS B. QUINTO, NEMESIO BAUTISTA, ORLANDO R.

BAUTISTA, FREDDIE R. BAUTISTA, CARLITO O. BUADA, GERARDO O. BUADA,
ARMANDO M. OLIVA, ROGELIO F. RAPAJON, EUGENIO F. FLORES, Petitioners,
vs.
CEMENT CENTER, INC., Respondent.

DECISION

DEL CASTILLO, J.:

In all contractual, property or other relations, when one of the parties is at a disadvantage on
account of his moral dependence, ignorance, indigence, mental weakness, tender age or other
handicap, the courts must be vigilant for his protection.1

This is a Petition for Review on Certiorari assailing the July 19, 2007 Decision2 of the Court of
Appeals (CA) in CA-G.R. SP No. 95154 which granted respondent’s Petition for Review and
nullified and set aside the Decisions of the Regional Adjudicator3 dated March 9, 1999 and of the
Department of Agrarian Reform Adjudication Board (DARAB)4 dated March 11, 2005
dismissing the Complaint for Confirmation of Voluntary Surrender and Damages filed by
respondent. Likewise assailed is the CA Resolution5 dated October 11, 2007 which denied
petitioners’ Motion for Reconsideration.

Factual Antecedents

Petitioners Bienvenido T. Buada, Isaias B. Quinto, Nemesio Bautista, Orlando T. Bautista,

Freddie R. Bautista, Carlito O. Buada, Gerardo O. Buada, Armando M. Oliva, Rogelio F.
Rapajon, and Eugenio F. Flores were tenant-farmers cultivating three parcels of agricultural land
owned by respondent Cement Center, Inc.6

On March 13, 1998, respondent filed a Complaint7 for Confirmation of Voluntary Surrender and
Damages against petitioners with the Department of Agrarian Reform Adjudication Board,
Region 1 in Urdaneta City, Pangasinan. It claimed that on June 28, 1995, petitioners entered into
a Compromise Agreement with respondent whereby the former, for and in consideration of the
sum of ₱3,000.00 each, voluntarily surrendered their respective landholdings. However, despite
respondent’s repeated demands, petitioners refused to vacate subject landholdings.

In their Answer,8 petitioners alleged that their consent to the Compromise

Agreement was obtained through fraud, deceit, and misrepresentation. They claimed that
sometime in 1995, respondent induced them to sign a Compromise Agreement by representing
that the subject landholdings are no longer viable for agricultural purposes. Petitioners alleged
that respondent assured them that they would only apply for the conversion of the land and that
they would have to surrender the land only upon the approval of said application and that
thereafter, they will be paid a disturbance compensation of ₱3,000.00 each. Petitioners also
claimed that respondent promised to hire them to work on the project that was planned for the
converted land. But, should the application for conversion be denied, petitioners will continue to
be tenants and could later become beneficiaries under the Comprehensive Agrarian Reform Law.

Ruling of the Regional Adjudicator

On March 9, 1999, the Regional Adjudicator rendered a decision in favor of the tenant-farmers.
The dispositive portion of the Decision reads:

WHEREFORE, premises considered, Respondents being bonafide tenants of the subject

landholdings, the instant case is hereby DISMISSED for lack of merit.

SO ORDERED.9

The Regional Adjudicator held that the Compromise Agreement was not enforceable because it
violated the provisions of Administrative Order No. 12, Series of 1994.10 Said administrative
order requires the payment of disturbance compensation which should not be less than five times
the average of the annual gross value of the harvest on their actual landholdings during the last
five preceding calendar years. As such, the disturbance compensation being offered by
respondent to each of the petitioners, which is ₱3,000.00 plus the income derived from a single
cropping, is grossly inadequate. The Regional Adjudicator likewise noted that respondent did not
offer homelots to the petitioners as required under the aforesaid administrative order.

Finally, the Regional Adjudicator held that since respondent’s application for conversion was
denied, then the purpose for the execution of the Compromise Agreement was rendered
nugatory. As a consequence of the denial of the application, the subject landholdings shall be
placed under the Comprehensive Agrarian Reform Program (CARP) compulsory coverage, as
provided under the Administrative Order No. 12, Series of 1994.

Ruling of the DARAB

Aggrieved, respondent appealed to DARAB which rendered its Decision on March 11, 2005, the
dispositive portion of which reads:

WHEREFORE, premises considered, the Appeal is DENIED and the assailed Decision is hereby
AFFIRMED.11

In affirming the Decision of the Regional Adjudicator, the DARAB found that respondent failed
to prove that petitioners voluntarily surrendered their tenancy rights over the subject
landholdings. It held that since the application for conversion was denied, then the Compromise
Agreement is not a perfected obligation; it is as if the petitioners’ voluntary surrender never
existed.

Ruling of the Court of Appeals

Alleging that the DARAB gravely erred and committed grave abuse of discretion in dismissing
its appeal, respondent thereafter filed a Petition for Review with the CA. The CA found the
appeal meritorious and rendered its Decision in the following tenor:

WHEREFORE, in the light of the foregoing, the instant Petition is GRANTED. The assailed
decisions of the Department of Agrarian Reform Adjudication Board (DARAB) dated March 11,
2005 and the Regional Adjudicator dated March 9, 1999 are NULLIFIED and SET ASIDE. The
petitioner’s Complaint for Confirmation of Voluntary Surrender and Damages is likewise
GRANTED.

The voluntary surrender of the three (3) parcels of land covered by Transfer Certificate of Title
Nos. 127892, 123800, and 83276 by the respondents in favor of the petitioner as embodied in the
Compromise Agreement is hereby CONFIRMED.

Accordingly, the respondents are ORDERED to VACATE the subject landholdings upon
payment by the petitioner to them of the amount of Three Thousand Pesos (₱3,000.00) each
representing their disturbance compensation.12

The appellate court found the Compromise Agreement executed by the parties to be valid. It held
that its enforceability is not subject to the approval by the DARAB of the respondent’s
application for conversion. Likewise, the deficiency in consideration is not a ground to annul an
otherwise valid and enforceable agreement. The appellate court also found petitioners to be
literate on the ground that they were able to affix their signatures to the agreement.

Petitioners’ Motion for Reconsideration was denied.

Hence, this petition.

Issues

In this Petition for Review on Certiorari petitioners raise the following issues:

1. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN MAKING AN

INFERENCE [THAT] THE COMPROMISE AGREEMENT IS NOT SUBJECT TO
INTERPRETATION.

2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN MAKING [AN]

INFERENCE (THAT) THE PETITIONERS WHO ARE TENANTS ARE LITERATE
THUS, THEY UNDERSTOOD THE IMPORT OF THE CONTRACT THEY SIGNED.

3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN MAKING (AN)

INFERENCE (THAT) THE DEFICIENCY OF CONSIDERATION (which is not in
accordance with ADMINISTRATIVE ORDER NO. 12) DOES NOT NULLIFY THE
CONTRACT.

Our Ruling
The petition is impressed with merit.

Well-settled is the rule that this Court is not a trier of facts. When supported by substantial
evidence, the findings of fact of the CA are conclusive and binding with, and are not reviewable
by us unless the case falls under any of the recognized exceptions. One of the exceptions is when
the findings of fact of the CA are contrary to those of the trial court13 or quasi-judicial agency. In
this case, the findings of fact of the CA and the DARAB are conflicting, thus we are compelled
to take a look at the factual milieu of this case.

It is the policy of the State to promote the Security of Tenure of Farmers over their leasehold.

Republic Act (RA) No. 3844 (1963), otherwise known as the Agricultural Land Reform Code,
declares it to be the policy of the State to make small farmers more independent, self-reliant and
responsible citizens, and a source of genuine strength in our democratic society.14 Towards this
end, the same law guarantees the security of tenure of farmers with respect to the land they
cultivate, thus:

Section 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 relation is extinguished. x x x

As an exception to this security of tenure, however, Section 8 of RA 3844 specifically

enumerates the grounds for the extinguishment of agricultural leasehold relations, viz:

Section 8. Extinguishment of Agricultural Leasehold Relation. — The agricultural leasehold

relation established under this Code shall be extinguished by:

(1) Abandonment of the landholding without the knowledge of the agricultural lessor;

(2) Voluntary surrender of the landholding by the agricultural lessee, written notice of
which shall be served three months in advance; or

(3) Absence of the persons under Section nine to succeed to the lessee, in the event of
death or permanent incapacity of the lessee. (Emphasis supplied)

Voluntary surrender, as a mode of extinguishment of tenancy relations, does not require any
court authorization considering that it involves the tenant's own volition.15 To protect the tenant's
right to security of tenure, voluntary surrender, as contemplated by law, must be convincingly
and sufficiently proved by competent evidence. The tenant's intention to surrender the
landholding cannot be presumed, much less determined by mere implication. Otherwise, the
right of a tenant farmer to security of tenure becomes an illusory one.16 Moreover, RA 3844
provides that the voluntary surrender of the landholding by an agricultural lessee should be due
to circumstances more advantageous to him and his family.17

The Compromise Agreement did not constitute the "voluntary surrender" contemplated by law.
Respondent asserts that petitioners voluntarily surrendered their landholdings. Petitioners,
however, deny this claim and instead maintain that they did not execute the Compromise
Agreement with a view to absolutely sell and surrender their tenancy rights in exchange for
₱3,000.00 for each of them. They assert that such agreement was subject to suspensive
conditions, i.e., the approval of respondent’s application for conversion of the land to non-
agricultural and their subsequent absorption as laborers in the business that respondent will put
up on said land, or, if the application will not be approved, petitioners will continue to be tenants
of the land and could later on qualify as beneficiaries of the CARP. Petitioners assert that they
were not aware that these conditions were not incorporated in the Compromise Agreement
because they were not literate in the English language used. Neither were they represented by
counsel nor were the contents of the agreement explained to them. Petitioners thus claim that the
Compromise Agreement should be interpreted in accordance with the real intention of the parties
pursuant to Articles 1370 and 1371 of the Civil Code.18 Petitioners likewise claim that as they
were illiterate in the English language, they could not have given their valid consent to the
Compromise Agreement. Lastly, they aver that the disturbance fee of ₱3,000.00 for each tenant
violates Administrative Order No. 12, Series of 2004 which provides:

In all cases of petitions for conversions resulting in the displacement of farmer-beneficiaries,

such beneficiaries shall be entitled to a disturbance compensation, which should not be less than
five (5) times the average of the annual gross value of the harvest on their actual landholdings
during the last 5 preceding calendar years. In addition, the DAR shall exert all efforts to see to
it that free homelots and assured employment for displaced beneficiaries are provided by the
applicant/developer.

Respondent, on the other hand, counters that as the Compromise Agreement does not reflect the
conditions alleged by petitioners, parol evidence should not be allowed to prove such conditions;
that petitioners cannot claim that they are illiterate in the English language and that the contents
of the agreement were not explained to them as it is incumbent upon every contracting party to
learn and know the contents of an instrument before signing and agreeing to it; and, that it was
not necessary for petitioners to be assisted by counsel in signing the agreement as the execution
thereof is not akin to a custodial investigation or criminal proceedings wherein the right to be
represented by counsel is indispensable. As to the disturbance fee, respondent believes that the
sum of ₱3,000.00 for each tenant is fair and sufficient because apart from said amount,
petitioners were allowed to cultivate the lands for a single cropping without any obligation to pay
any lease rental in the form of palay or cotton harvest or any other mode of payment.

As earlier stated, vital to these contentions is the resolution of the basic issue of whether or not
petitioners as tenants-farmers intended to absolutely and voluntarily surrender their tenancy
rights over the subject landholdings.

Closer to, although not identical with, the factual setting of this case is Talavera v. Court of
Appeals.19 In said case, we found that the evidence on record and therein petitioners' arguments
were not enough to overcome the rights of the private respondent as provided in the Constitution
and the agrarian statutes. The following circumstances were considered: (1) the [K]asunduan
executed by the tenant-farmer in favor of the landowners wherein the former purportedly
voluntarily relinquished his tenancy rights for the amount of ₱1,000.00 was prepared by one of
the landowners; (2) the tenant-farmer continued to work on the farm from 1973 to 1984 when the
landowners ejected him, or for a period of more than 10 years after the execution of the
[K]asunduan; and, (3) it was not shown why the tenant-farmer would voluntarily give up his
sole source of livelihood even if he needed money to pay off his debts or what he did from 1973
to 1984 if the claim of the Talaveras that they worked on the land themselves during said period
was correct. Hence, we held that the [K]asunduan wherein the leasehold tenant allegedly
surrendered his tenancy rights voluntarily for the sum of ₱1,000.00, did not constitute "voluntary
surrender" as contemplated by law, and reinstated the tenant in the landholding.

On the other hand, in Levardo v. Yatco,20 we upheld the waiver of tenancy rights and ruled that:

Based on the evidence on record, respondents paid Aguido ₱2,000,000.00 and Hernando
₱2,417,142.00 as disturbance compensation. A reading of the Pinanumpaang Salaysay executed
by petitioners show that they gave up their leasehold rights "dahil sa aming kagustuhang umiba
ng hanap buhay ng higit ang pagkikitaan kaysa panakahan." The money given by respondents as
disturbance compensation was indeed advantageous to the families of petitioners, as it would
have allowed them to pursue other sources of livelihood.

Petitioners did not refute in their pleadings the authenticity of the documents purporting to be
their waiver of tenancy rights. As a matter of fact, they themselves attached the said documents
to their complaints and argued that said waivers were obtained through fraud and
misrepresentation, since they were unaware that CLTs were issued in their names. However,
such argument deserves scant consideration, since it has been established that no such CLTs
were issued to petitioners; and more importantly, the lands in dispute do not fall under the
coverage of P.D. No. 27. In addition, said waivers of tenancy rights were notarized and therefore
the same have the presumption of regularity in their favor. (Emphasis supplied)1avvphi1

A perusal of the subject Compromise Agreement reveals that the parties considered the amount
of ₱3,000.00 together with the income from a single cropping as comprising the disturbance
compensation package, viz:

4. The aforeindicated income derived from the properties and the financial assistance of
₱3,000.00 shall be considered as the disturbance compensation package in favor of the SECOND
PARTY by reason or as a result of their vacating the premises in accordance with Administrative
Order No. 1, Series of 1990 of the Department of Agrarian Reform.21 (Emphasis supplied)

Petitioners, however, assail the disturbance compensation package provided in the Compromise
Agreement as insufficient and contrary to Administrative Order No. 12, Series of 2004. They
claim that they would not have acceded to such a measly amount were it not for the agreement
that respondent will hire them as workers on the planned project on the subject land.

Despite the above contentions of petitioners, respondent failed to present evidence to show that
the disturbance compensation package corresponds with the compensation required by the said
Administrative Order. Neither was there any showing that said disturbance compensation is not
less than five times the average annual gross value of the harvest on petitioners’ actual
landholdings during the preceding five calendar years.
Moreover, it was not shown why petitioners as tenant-farmers would voluntarily give up their
sole source of livelihood. There was likewise no showing that the money was indeed
advantageous to petitioners’ families as to allow them to pursue other sources of livelihood. To
stress, tenancy relations cannot be bargained away except for the strong reasons provided by law
which must be convincingly shown by evidence in line with the State's policy of achieving a
dignified existence for the small farmers free from pernicious institutional restraints and
practices.22

In view of the foregoing, we find the evidence on record and respondent's arguments insufficient
to overcome the rights of petitioners as provided in the Constitution and agrarian statutes. The
alleged voluntary surrender of petitioners of their tenancy rights for the sum of ₱3,000.00 each
could not constitute as "voluntary surrender" within the contemplation of law.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA G.R.
SP No. 95154 dated July 19, 2007 and its Resolution dated October 11, 2007 are REVERSED
and SET ASIDE. The Decisions of the Regional Adjudicator dated March 9, 1999 and the
Department of Agrarian Reform Adjudication Board dated March 11, 2005, dismissing
respondent’s Complaint for Confirmation of Voluntary Surrender and Damages are
REINSTATED and AFFIRMED.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ARTURO D. BRION ROBERTO A. ABAD

Associate Justice Associate Justice

JOSE P. PEREZ
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s
attestation, it is hereby certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

Footnotes
1
Civil Code of the Philippines, Art. 4.
2
Rollo, pp. 7-17; penned by Associate Justice Amelita G. Tolentino and concurred in by
Associate Justices Lucenito N. Tagle and Sixto C. Marella, Jr.
3
Id. at 82-87.
4
Id. at 90-94.
5
Id. at 72-73.
6
The following are the area, location and Transfer Certificates of Title (TCT) covering
said parcels of land:

TCT No. Area Location

127892 75,815 sq. m. Batanguil, Sison, Pangasinan

123800 75,815 sq. m. Batanguil, Sison, Pangasinan

83276 34,738 sq. m. Bahonan, Pozzorubio, Pangasinan

7
Rollo, pp. 75-78.
8
Id. at 79-81.
9
Id. at 87.
10
Consolidated and Revised Rules and Regulations Governing Conversion of
Agricultural Lands to Non-Agricultural Uses.
11
Rollo, p. 94.
12
Id. at 16.
13
The Consolidated Bank and Trust Corp. v. Court of Appeals, 316 Phil. 246, 252 (1995)
citing Massive Construction, Inc. v. Intermediate Appellate Court, G.R. Nos. 70310-11,
June 1, 1993, 223 SCRA 1, 7.
14
Republic Act No. 3844, Section 2, par (6).
15
Jacinto v. Court of Appeals, 176 Phil. 580, 588 (1978).
16
Ludo & Luym Development Corporation v. Barretto, G.R. No. 147266, September 30,
2005, 471 SCRA 390, 405; Talavera v. Court of Appeals, G.R. No. 77830, February 27,
1990, 182 SCRA 778, 782.
17
Republic Act No. 3844 provides:

Section 28. Termination of Leasehold by Agricultural Lessee During Agricultural

Year - The agricultural lessee may terminate the leasehold during the agricultural
year for any of the following causes:

xxxx

(5) Voluntary surrender due to circumstances more advantageous to him and his
family.
18
Art. 1370. If the terms of a contract are clear and leave no doubt upon the intention of
the contracting parties, the literal meaning of its stipulations shall control.

If the words appear to be contrary to the evident intention of the parties, the latter
shall prevail over the former.

Art. 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered.
19
G.R. No. 77830, February 27, 1990, 182 SCRA 778.
20
G.R. No. 165494, March 20, 2009.
21
Compromise Agreement dated 28 June 1995, par. 4; rollo, p. 544.
22
Talavera v. Court of Appeals, supra note 19 at 784, citing Republic Act No. 3844
Section 2 [2].