SECONDDIVISION

[G.R.No.135999.April19,2002]

MILESTONE REALTY and CO., INC. and WILLIAM L. PEREZ, petitioners, vs. HON.
COURT OF APPEALS, DELIA RAZON PEA and RAYMUNDO EUGENIO,
respondents.
DECISION
QUISUMBING,J.:

Petitioners Milestone Realty & Co., Inc. (Milestone for brevity) and William Perez seek the reversal of the
decision[1] datedMay29,1998oftheCourtofAppealsinCAG.R.SPNO.39987.Saiddecisionaffirmedthatof
theDepartmentofAgrarianReformAdjudicationBoard(DARAB),[2] whichhaddeclaredrespondentDeliaRazon
PeaasthebonafidetenantofalotinBulacan,andvoidedthesaleofsaidlottherebyreversingthedecisionofthe
ProvincialAgrarianReformAdjudicator(PARAD).[3]
Thefactsasculledfromtherecordsareasfollows:
SpousesAlfonsoOlympiaandCarolinaZacariasandSpousesClaroZacariasandCristinaLorenzoweretheco
owners of an agricultural land identified as Lot 616 of the Malinta Estate. Said lot has an area of 23,703 square
meters,coveredbyTransferCertificateofTitle(TCT)No.26019,locatedatKaruhatan,Valenzuela,Bulacan,now
Valenzuela City. Eventually, Carolina became the owner of the property by virtue of a Deed of Extrajudicial
SettlementexecutedonOctober17,1976bytheheirsofAlfonsoOlympia,oneofwhomisFranciscoOlympia,on
their respective shares after Alfonsos death and by an Affidavit of Settlement executed on June 24, 1992 by the
spousesClaroandCristinaZacariasontheirsharesintheproperty.
Meanwhile, Anacleto Pea who was a tenant of the property and a holder of a Certificate of Agricultural
Leasehold issued on February 23, 1982, had a house constructed on the lot. He had several children on the first
marriage,amongwhomareEmilioPeaandCeliaSegovia,whoalsohadtheirhousesconstructedontheproperty.
OnFebruary4,1986,Anacleto,whowasalready78yearsoldandawidower,marriedDeliaRazon,thenonly29
years old. On February 17, 1990, Anacleto died intestate and was survived by Delia and his children in his first
marriage,includingEmilio.
EmilioandDelia,thelatterwiththehelpofrespondentRaymundoEugenio,hersoninlaw,continuedtilling
andcultivatingtheproperty.OnJanuary22,1992,Emiliosignedahandwrittendeclarationthathewasthetenantin
the land and he was returning the landholding to Carolina Zacarias in consideration of the sum of P1,500,000 as
disturbance compensation. He initially opted for a 1,000 square meter homelot but later changed his mind. After
receiptofthemoney,heexecutedaKatibayangPaglilipatngPagmamayari.
Inthemeantime,petitionerWilliamPerez,JosephLim,WillyLim,WinstonLim,EdgarLim,andJaimeLim
established Milestone as incorporators, in order to acquire and develop the aforesaid property and the adjacent
parcel,LotNo.617oftheMalintaEstate.
OnJuly30,1992,CarolinaZacariasexecutedadeedofsaletransferingtheLotNo.616topetitionerMilestone
for P7,110,000. TCT No. 26019 was cancelled and in lieu thereof, TCT No. 25433 was issued in the name of
Milestone.Onthesamedate,theadjoiningLotNo.617coveredbyTCTNo.V25431wasissuedunderthenameof
petitionerWilliamPerezwhosubsequentlysoldthesametoMilestoneonthebasisofwhichTCTNo.V26481was
issuedtoit.Thus,Milestonebecametheowneroftheadjoininglots,LotNos.616and617oftheMalintaEstate

withatotalareaofthree(3)hectares.Developmentofthepropertythencommenced.
OnOctober13,1992,privaterespondentsDeliaRazonPeaandRaymundoEugeniofiledacomplaintagainst
EmilioPea,CarolinaZacariasandherbrotherFranciscoOlympia,andWilliamPerezwiththePARAD,whichwas
amendedonJanuary6,1993toimpleadMilestoneasrespondent,prayinginteraliatodeclareasnullandvoidthe
sale by Carolina to Perez and by the latter to Milestone, and to recognize and respect the tenancy of private
respondentsDeliaandRaymundo.
In her answer, Carolina Zacarias declared that she chose Emilio Pea as her tenantbeneficiary on the said
propertywithin30daysafterthedeathofAnacleto,conformablywithSection9ofRepublicActNo.3844.[4]On
July28,1993,thePARADrenderedadecisiondismissingthecomplaintasfollows:[5]

WHEREFORE,upontheforegoingpremises,judgmentisherebyrendered:
1.Dismissingtheinstantcomplaint
2.DissolvingthewritofPreliminaryInjunctionissuedonMay24,1993
3.DirectingtheCashieroftheDARRegionalOfficeatPasig,MetroManilatoreleasetothePetitionersortheir
dulyauthorizedrepresentative,thecashbondpostedintheamountofFifteenThousandPesos[P15,000.00].
4.Nopronouncementastocosts.

SOORDERED.
Inthedecision,thePARADruledthattheorderofpreferencecitedinSection9ofRepublicAct3844isnot
absolute and may be disregarded for valid cause.[6] It also took note that Emilios two siblings have openly
recognizedEmilioasthelegitimatesuccessortoAnacletostenancyrights.[7]
DeliaRazonPeaandRaymundoEugenioappealedfromthePARADsdecisiontotheDARAB.OnSeptember
5,1995,theDARABreversedthedecisionofPARAD,thedispositiveportionofwhichreadsasfollows:

WHEREFORE,premisesconsidered,theinstantappealisherebyGRANTED.TheDecisiondatedJuly28,
1993isREVERSED.
Judgmentisissued:
1.DeclaringDeliaRazonPeathebonafidetenantoverthelandholdinginquestion
2.Declaringtheseriesofpurchaseandsaleofthelandholdinginquestionasillegal,hence,nullandvoid
3.DirectingtheRegisterofDeedstocancelTCTNo.V26485andallsubsequenttitlesobtainedthereafteroverthe
landholdingnamedunderWilliamL.PerezandMilestoneRealtyandCo.,Inc.
4.AllowingDeliaRazonPeatoexerciseherrightofredemptionoverthelandwithintheprescribedperiodgranted
bylaw
5.EnjoiningallRespondentsAppelleestodesistfromfurtherdisturbingDeliaRazonPeainthepeacefulpossession
andcultivationoftheland
6. Directing the DARDOJ Task Force on Illegal Conversion to file appropriate charges before the Special
AgrarianCourtasregardsthecriminalaspectofthiscase.

SOORDERED.[8]
In reversing the PARADs decision, the DARAB noted that Carolinas affidavit did not show any categorical
admission that she made her choice within the one (1) month period except to state that when Anacleto died, the

rightofthedeceasedwasinheritedbyEmilioPeawhichcouldonlymeanthatsherecognizedEmilioPeabyforceof
circumstanceunderanebuloustimeframe.[9]
InapetitionforreviewtotheCourtofAppeals,thelatteraffirmedtheDARABsdecision,thus:

Weareconvinced,beyondcavil,inthepresentrecourse,thatthePetitionersCarolinaOlympiaandFrancisco
Olympiafailedtochoose,withinthestatutoryperiodtherefor,anytenantinsubstitutionofAnacletoPea,the
erstwhiledeceasedtenantonthelandholding,andthat,withoutpriororsimultaneousnoticetoPrivate
RespondentDeliaPea,thePetitionersmadetheirchoiceofPetitionerEmilioPeaassubstitutetenantonlyin
January,1992,aftertheyhadagreedtosellthepropertytothePetitionerMilestoneRealty&Co.,Inc.
INSUM,then,WefindnoreversibleerrorcommittedbytheDARABunderitsoppungedDecision.
INTHELIGHTOFALLTHEFOREGOING,thePetitionisdeniedduecourseandisherebydismissed.The
appealedDecisionisherebyAFFIRMED.WithcostsagainstthePetitioners.
SOORDERED.[10]
Subsequently,petitionersfiledaMotionforReconsiderationoftheCAsdecision.Saidmotionwasdeniedon
October12,1998.
Hence,thispetitionassigningthefollowingerrorsallegedlycommittedbyrespondentCourtofAppeals:[11]
I

THERESPONDENTCOURTOFAPPEALSERREDWITHGRAVEABUSEOFDISCRETION
AMOUNTINGTOLACKOREXCESSOFJURISDICTIONINTHECONSTRUCTIONAND
APPLICATIONOFSECTION9OFREPUBLICACT3844BYHOLDINGTHATPRIVATE
RESPONDENTDELIARAZONPEAHASSUCCEEDEDTOHERDECEASEDHUSBANDS
LEASEHOLDRIGHTBYOPERATIONOFLAW.
II

THERESPONDENTCOURTOFAPPEALSERREDINDECLARINGTHESALEBYTHE
LANDOWNERTOPETITIONERWILLIAML.PEREZ,ANDBYTHELATTERTOPETITIONER
MILESTONEREALTY&CO.,INC.ASNULLANDVOID,ANDINORDERINGTHE
CANCELLATIONOFTHEIRRESPECTIVETITLES.[12]
Thesetwoassignederrorstenderedissuesarticulatedinpetitionersmemorandumasfollows:
1.WhetherornotEmilioPeawasvalidlychosenbyCarolinaZacariasasthenewtenantoverthelandholding
underdisputewithinone(1)monthfromthedeathofhisfatherAnacleto,asprescribedbySection9ofR.A.3844,
asamended
2.Whether or not Delia Razon Pea was a bonafideordejure tenant over the landholding in question to be
accordedtheallegedrightstosecurityoftenureandofredemptionundertheagrarianreformlaws
3.WhetherornotEmilioPeavalidlyrenouncedorotherwisecausedtheextinctionofhistenancyrightsoverthe
subjectproperty
4.WhetherornotthesalesofthesubjectpropertybyCarolinaZacariastoWilliamPerezandbythelatterto
Milestonewerenullandvoid,hencemeritedthedeclarationofnullityandcancellationoftherespondentsrespective
titles

5.WhetherornotillegalconversionwascommittedbyMilestone.
Insum,wefindthefollowingrelevantissuesnowforourresolution:
1.Whether or not Delia Razon Pea has a right of first priority over Emilio Pea in succeeding to the tenancy
rightsofAnacletooverthesubjectlandholding.
2.WhetherornotthesalesofthesubjectlotsbyCarolinaZacariastoWilliamPerezandthentoMilestoneare
nullandvoid.
Attheoutset,itbearsstressingthatthereappearstobenodisputeastotenancyrelationshipbetweenCarolina
ZacariasandthelateAnacletoPea.ThecontroversycentersonwhoistherightfulandlegalsuccessortoAnacletos
tenancyrights.RelevanttotheresolutionofthefirstissueisSection9ofRepublicActNo.3844,otherwiseknown
astheCodeofAgrarianReforms,whichprovidesasfollows:

SEC.9.AgriculturalLeaseholdRelationNotExtinguishedbyDeathorIncapacityoftheParties.Incaseof
deathorpermanentincapacityoftheagriculturallesseetoworkhislandholding,theleaseholdshallcontinue
betweentheagriculturallessorandthepersonwhocancultivatethelandholdingpersonally,chosenbythe
agriculturallessorwithinonemonthfromsuchdeathorpermanentincapacity,fromamongthefollowing:(a)
thesurvivingspouse(b)theeldestdirectdescendantbyconsanguinityor(c)thenexteldestdescendantor
descendantsintheorderoftheirage:Provided,Thatincasethedeathorpermanentincapacityofthe
agriculturallesseeoccursduringtheagriculturalyear,suchchoiceshallbeexercisedattheendofthat
agriculturalyear:Provided,further,Thatintheeventtheagriculturallessorfailstoexercisehischoicewithin
theperiodshereinprovided,thepriorityshallbeinaccordancewiththeorderhereinestablished.
Incaseofdeathorpermanentincapacityoftheagriculturallessor,theleaseholdshallbindhislegalheirs.
PetitionerscontendthatSection9doesnotrequireanyformormannerinwhichthechoiceshouldbemade.[13]
TheyassailtheCourtofAppealsforheavilyrelyingonthefindingsoftheDARABthattherewasnoconvincing
proof that Carolina exercised her right to choose from among the qualified heirs a replacement for the deceased
tenant,[14]wheninfactachoicewasmade.Insupportthereof,petitionersinvokeCarolinasaffidavitandherAnswer
to the complaint in the PARAD, both dated November 16, 1992 where Carolina recognized Emilio Pea as the
successortoAnacletostenancyrights.PetitionersarguedthatDeliacouldnothavequalifiedasasuccessortenantto
Anacletoduetolackofpersonalcultivation.[15]Further,shehadnotbeenpayingrentontheland.
Responding to petitioners contentions, respondents argue that Carolina did not choose the successor to
AnacletostenancyrightswithinonemonthfromthedeathofAnacleto.Respondentsnotethatitwasonlyafterthe
lapseoftwo(2)yearsfromthedeathofAnacletoonFebruary17,1990,thatbothCarolinaandEmilioclaimedin
theirrespectiveaffidavitsthatEmilioinheritedtherightsofAnacletoasatenant.[16]Accordingtorespondents,such
inactiontomakeachoicewithinthetimeframerequiredbylawisequivalenttowaiveronCarolinasparttochoose
a substitute tenant.[17] Also, it appears that Carolina made the choice in favor of Emilio Pea only by force of
circumstance,i.e.,whenshewasintheprocessofnegotiatingthesaleofthelandtopetitionersPerezandMilestone.
[18]

On this score, we agree with private respondents. As found by both the DARAB and the Court of Appeals,
Carolinahadfailedtoexerciseherrighttochooseasubstituteforthedeceasedtenant,fromamongthosequalified,
withinthestatutoryperiod.[19] NocogentreasoncompelsustodisturbthefindingsoftheCourtofAppeals.As a
generalrule,findingsoffactoftheCourtofAppealsarefinalandconclusiveandcannotbereviewedonappealby
theSupremeCourt,providedtheyareborneoutbytherecordorbasedonsubstantialevidence.[20]
Section9ofRepublicActNo.3844isclearandunequivocalinprovidingfortherulesonsuccessiontotenancy
rights. A close examination of the provision leaves no doubt as to its rationale of providing for continuity in
agriculturalleaseholdrelationincaseofdeathorincapacityofaparty.Tothisend,itprovidesthatincaseofdeath

orpermanentincapacityoftheagriculturallesseetoworkhislandholding,theleaseholdshallcontinuebetweenthe
agriculturallessorandthepersonwhocancultivatethelandholdingpersonally.Inthesamevein,theleaseholdshall
bindthelegalheirsoftheagriculturallessorincaseofdeathorpermanentincapacityofthelatter.Itistoachieve
thiscontinuityofrelationshipthattheagriculturallessorismandatedbylawtochooseasuccessortenantwithinone
monthfromthedeathorincapacityoftheagriculturallesseefromamongthefollowing:(1)survivingspouse(2)
eldest direct descendant by consanguinity or (3) the next eldest direct descendant or descendants in the order of
theirage.Shouldthelessorfailtoexercisehischoicewithinonemonthfromthedeathofthetenant,thepriority
shallbeinaccordancewiththeaforementionedorder.InManuelvs.CourtofAppeals,[21]weruledthat:

Agriculturalleaseholdrelationshipisnotextinguishedbythedeathorincapacityoftheparties.Incasethe
agriculturallesseediesorisincapacitated,theleaseholdrelationshallcontinuebetweentheagriculturallessor
andanyofthelegalheirsoftheagriculturallesseewhocancultivatethelandholdingpersonally,intheorder
ofpreferenceprovidedunderSection9ofRepublicAct3844,aschosenbythelessorwithinonemonthfrom
suchdeathorpermanentincapacity.SincepetitionerRodolfoManuelfailedtoexercisehisrightofchoice
withinthestatutoryperiod,EdwardoswidowEnriqueta,whoisfirstintheorderofpreferenceandwho
continuedworkingonthelandholdinguponherhusbandsdeath,succeededhimasagriculturallessee.
Thus,EnriquetaissubrogatedtotherightsofherhusbandandcouldexerciseeveryrightEduardohadas
agriculturallessee,includingtherightsofpreemptionandredemption.
Applying Section 9 of Republic Act 3844, in the light of prevailing jurisprudence, it is undeniable that
respondentDeliaRazonPea,thesurvivingspouseoftheoriginaltenant,AnacletoPea,isthefirstintheorderof
preferencetosucceedtothetenancyrightsofherhusbandbecausethelessor,CarolinaZacarias,failedtoexercise
herrightofchoicewithintheonemonthperiodfromthetimeofAnacletosdeath.
PetitionerscannotfindsuccorinthedeclarationsofEmilioPeaandtheaffidavitofCarolinaZacarias,stating
thatEmiliosucceededtothetenancyrightsofAnacleto.Inthefirstplace,CarolinasaffidavitandherAnswerfiled
before the PARAD were both executed in 1992, or almost two years after the death of Anacleto on February 17,
1990,waybeyondtheonemonthperiodprovidedforinSection9ofRepublicAct3844.Secondly,asfoundbythe
DARAB,ascrutinyofCarolinasdeclarationwillshowthatshenevercategoricallyaverredthatshemadeherchoice
withintheone(1)monthperiod.Instead,shenarratedpassivelythatwhenAnacletodied,therightofthedeceased
wasinheritedbyEmilioPea,promptingtheDARABtoconcludeitmerelyconnotesthatsherecognizedEmilioPea
byforceofcircumstanceunderanebuloustimeframe.[22]
Petitioners further argue that Delia cannot qualify as tenant even on the assumption that she was the rightful
successor to Anacletos tenancy rights, because she did not personally cultivate the land and did not pay rent. In
essence,petitionersurgethisCourttoascertainandevaluatecertainmaterialfactswhich,howeverarenotwithinthe
provinceofthisCourttoconsiderinapetitionforreview.Determinationofpersonalcultivationandrentalpayments
arefactualissuesbeyondthereachofthispetition.Wellestablishedistherulethatinanappealviacertiorari,only
questionsoflawmaybereviewed.[23]
Onthesecondissue,however,weareunabletoagreewiththerulingofrespondentCourtofAppealsandof
DARAB that the sale of the land in question should be declared null and void. There is no legal basis for such
declaration.Lestitbeforgotten,itisCarolinaZacariaswhoistheownerofthesubjectlandandbothEmilioPeaand
DeliaRazonPeaonlysucceededtothetenancyrightsofAnacleto.
Asanowner,Carolinahastherighttodisposeofthepropertywithoutotherlimitationsthanthoseestablished
bylaw.[24]ThisattributeofownershipisimpliedlyrecognizedinSections10,11and12ofRepublicActNo.3844,
[25] where the law allows the agricultural lessor to sell the landholding, with or without the knowledge of the
agriculturallesseeandatthesametimerecognizestherightofpreemptionandredemptionoftheagriculturallessee.
Thus, the existence of tenancy rights of agricultural lessee cannot affect nor derogate from the right of the
agriculturallessorasownertodisposeoftheproperty.Theonlyrightoftheagriculturallesseeorhissuccessorin
interestistherightofpreemptionand/orredemption.

Inthecaseatbar,itisundisputedthatCarolinabecametheabsoluteownerofthesubjectlandholdingbyvirtue
ofDeedofExtrajudicialSettlementandAffidavitofSettlementexecutedbytheotherheirsofAlfonsoOlympiaand
Spouses Claro and Cristina Zacarias. As the owner, it is within her right to execute a deed of sale of said
landholding, without prejudice however to the tenancy rights and the right of redemption of Delia Razon Pea. In
Manuel,[26] weheldthatthetenancyrelationshipisnotaffectedorseveredbythechangeofownership.The new
owner is under the obligation to respect and maintain the tenants landholding. In turn, Delia Razon Pea, as the
successortenant,hasthelegalrightofredemption.Thisrightofredemptionisstatutoryincharacter.Itattachestoa
particularlandholdingbyoperationoflaw.[27]
Finally, as to the question of illegal conversion of the land, suffice it to state that such determination is not
withinthejurisdictionofthisCourtandisnotproperinapetitionforreviewoncertiorariasitrequiresevaluation
andexaminationofpertinentfacts.
WHEREFORE, the petition is PARTIALLY GRANTED. The assailed decision of the Court of Appeals in
CAG.R.SPNo.39987isAFFIRMEDinsofarasitrecognizesDeliaRazonPeaasthesuccessorofAnacletoPea
as the tenant, thereby allowing her to exercise her right of redemption over the land within the prescribed period
granted by law. However, said decision is REVERSED and SET ASIDE insofar as it declared the sale of said
landholding null and void. IN LIEU THEREOF, SAID SALE BY CAROLINA ZACARIAS IS HEREBY
DECLARED VALID, SUBJECT TO THE TENANCY RIGHTS AND RIGHT OF REDEMPTION by the
TENANTLESSEE,privaterespondentDeliaRazonPea.
Nopronouncementsastocosts
SOORDERED.
Bellosillo,(Chairman),Mendoza,andDeLeon,Jr.,JJ.,concur.
Corona,J.,nopartinthedeliberations.
[1]Rollo,pp.2540.
[2]Id.at58.
[3]Id.at44.
[4] Sec. 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of the Parties. In case of death or permanent
incapacityoftheagriculturallesseetoworkinhislandholding,theleaseholdshallcontinuebetweentheagriculturallessorandtheperson
who can cultivate the landholding personally, chosen by the agricultural lessor within one month from such death or permanent
incapacity,fromamongthefollowing:(a)thesurvivingspouse(b)theeldestdirectdescendantbyconsanguinityor(c)thenexteldest
descendantordescendantsintheorderoftheirage:xx:Provided,further,Thatintheeventtheagriculturallessorfailstoexercisehis
choicewithintheperiodshereinprovided,thepriorityshallbeinaccordancewiththeorderhereinestablished.xx
[5]Rollo,p.57.
[6]Id.at52.
[7]Id.at54.
[8]Id.at81.
[9]Id.at66.
[10]Id.at40.
[11]Id.at118.
[12]Id.at11.

[13]Id.at120.
[14]Ibid.
[15]Id.at133.
[16]Id.at109.
[17]Id.at110.
[18]Ibid.
[19]Id.at30.
[20]SpousesZacariasBatingal,etal.vs.CourtofAppeals,etal.,G.R.No.128636,February1,2001,p.8.
[21]G.R.No.L44686,118SCRA477,481482(1982).
[22]Supra,note9.
[23]JosefinaandMamertoR.Palonvs.GilandFlocerfidaS.NinoBrillante,et.al.,G.R.No.138042,February28,2001,p.14.
[24]Article428,CivilCodeofthePhilippines.
[25]Section10.AgriculturalLeaseholdRelationNotExtinguishedbyExpirationofPeriod,etc.Theagriculturalleaseholdrelationunder
thisCodeshallnotbeextinguishedbymereexpirationofthetermorperiodinaleaseholdcontractnorbythesale,alienationortransferof
thelegalpossessionofthelandholding.Incasetheagriculturallessorsells,alienatesortransfersthelegalpossessionofthelandholding,
thepurchaserortransfereethereofshallbesubrogatedtotherightsandsubstitutedtotheobligationsoftheagriculturallessor.
Section11.LesseesRightofPreemptionIncasetheagriculturallessordecidestosellthelandholding,theagriculturallesseeshallhave
thepreferentialrighttobuythesameunderreasonabletermsandconditions:Provided,Thattheentirelandholdingofferedforsalemustbe
preemptedbytheDepartmentofAgrarianReformuponpetitionofthelesseeoranyofthemxxx
Section12.LesseesRightofRedemption.Incasethelandholdingissoldtoathirdpersonwithouttheknowledgeoftheagricultural
lessee,thelattershallhavetherighttoredeemthesameatareasonablepriceandconsideration:xxx
[26]Supra,note21at481.
[27]Cuaovs.CourtofAppeals,etal.,G.R.No.107159,237SCRA122,138139(1994).