On November 27, 1981, the Court of Agrarian Relations (CAR) in determining whether or not
respondent Baltazar is the tenant of the petitioners ruled that the land in question is not an
G.R. No. 70736 March 16, 1987
BONIFACIO L. HILARIO and EDUARDA M. BUENCAMINO HILARIO, petitioners,
vs.
HONORABLE INTERMEDIATE APPELLATE COURT AND SALVADOR
BALTAZAR, respondents.
This is a petition for review on certiorari of the Court of Appeals' decision declaring Salvador
Baltazar a leasehold tenant entitled to security of tenure on a parcel of land consisting of 1,740
square meters.
On January 13, 1981, Salvador Baltazar filed a verified complaint with the Court of Agrarian
Relations, Branch VI at Baliuag, Bulacan alleging that since January, 1955 he had been in
continuous possession as a share tenant of a parcel of land with an area of about 2 hectares
situated in San Miguel, Bulacan, which was previously owned by one Socorro Vda. de
Balagtas; that on or about December 27, 1980, and thereafter, the spouses Hilario began to
threaten him to desist from entering and cultivating a portion of the aforesaid land with an area
of 4,000 square meters and otherwise committed acts in violation of his security of tenure; that
the Hilarios were contemplating the putting up of a fence around the said portion of 4,000
square meters and that unless restrained by the court, they would continue to do so to his
great irreparable injury.
Baltazar claims that he became a tenant of Socorro P. Vda. de Balagtas on the latter's two-
hectare landholding located at San Juan, San Miguel, Bulacan by virtue of a "Kasunduan"
executed between them on January 8, 1979, He states that he erected his house and planted
"halaman," the produce of which was divided at 70-30 and 50-50 (sic) in his favor. After the
death of Socorro P. Vda. de Balagtas, he allegedly gave the share pertaining to the landowner
to her daughter Corazon Pengzon. It was only in December, 1980 that he came to know that a
portion of the 2 hectares or 4,000 square meters is already owned by the Hilarios.
On the other hand, the petitioners aver that they acquired the landholding of 4,000 square
meters from the Philippine National Bank (PNB) after it had been foreclosed by virtue of a
deed of sale executed between Bonifacio Hilario and the PNB. The former owner Corazon
Pengzon testified that she owned only two lots-Lot 427-B with an area of 841 square meters
and Lot 427-C with an area of 899 square meters with a total area of 1,740 square meters. The
other 2 lots were owned by Ruben Ocampo and Juan Mendoza. She further testified that in
1964 at the time of the partition of the property, she declared the property for classification
purposes as "bakuran" located in the Poblacion and had no knowledge that there were other
things planted in it except bananas and pomelos.
agricultural landholding but plain "bakuran," hence, Baltazar is not a tenant on the land.
On January 30, 1982, the Court of Appeals, however, remanded the case to the lower court for
further proceedings on the ground that the findings of the Court of Agrarian Relations (CAR)
were not supported by substantial evidence.
In compliance with the order of the Court of Appeals, the CAR admitted additional evidence.
On December 19, 1983, the CAR admitted the petitioners' third party complaint filed with leave
against the Philippine National Bank (PNB) which states that in the event that judgment would
be rendered against them under the original complaint, the PNB must contribute, indemnify,
and reimburse the spouses the full amount of the judgment.
On the basis of the parties' and their witnesses' affidavits containing detailed narrations of facts
and documentary exhibits which served as their direct testimonies pursuant to PD 946, the
CAR found that there was no tenancy relationship existing between Baltazar and the former
owner, Corazon Pengzon. The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered declaring plaintiff not to be a
tenant on the landholding described in the complaint and ordering his
ejectment therefrom.
The third-party complaint is hereby dismissed for lack of merit. (pp. 25- 26,
Rollo)
Again, respondent Salvador Baltazar appealed to the then Intermediate Appellate Court (IAC).
The IAC, however, reversed the decision of the CAR and held that:
... [T]he decision appealed from is hereby SET ASIDE, and another one
entered declaring plaintiff-appellant ii leasehold tenant entitled to security of
tenure on the land in question consisting of 1,740 square meters. Costs
against defendants-appellees. (p. 31, Rollo)
Consequently, the spouses Hilarios filed this petition for review making the following
assignments of errors:
Page | 1
I. THE INTERMEDIATE APPELLATE COURT ERRED IN DISTURBING THE FINDINGS OF Q What else?
FACTS AND DECISION OF THE COURT OF AGRARIAN RELATIONS (CAR) WHICH IS
SUPPORTED BY SUBSTANTIAL EVIDENCE. A None other, Your Honor.

II. THE INTERMEDIATE APPELLATE COURT ERRED IN SUBSTITUTION (SIC) THE Q After the death of your mother in 1962, have you seen
FINDINGS OF FACTS OF CAR, OF ITS OWN FINDINGS. Mr. Salvador Baltazar in this landholding in question?

III. THE INTERMEDIATE APPELLATE COURT ERRED IN NOT AFFIRMING THE DECISION A Yes, Your Honor.
OF CAR, FINDING THE LOTS IN QUESTION WITH AN AREA OF 1,740 SQUARE METERS
AS RESIDENTIAL LOT AND PRIVATE RESPONDENT NOT TO BE A TENANT.
Q What was he doing?
We agree with the respondent court when it stated that it can affirm on appeal the findings of
the CAR only if there is substantial evidence to support them. However, after a careful WITNESS:
consideration of the records of the case, we find no valid reason to deviate from the findings of
the CAR. The evidence presented by the petitioners is more than sufficient to justify the A We are neighbors, Your Honor, sometimes he visits and
conclusion that private respondent Salvador Baltazar is not a tenant of the landholding in goes to our place and we used to meet there, Your Honor.
question.
Q What was the purpose of his visit and your meeting in
Salvador Baltazar claims: that he is working on the land in question pursuant to a "kasunduan" this landholding?
executed between him and Socorro Balagtas. The contract covers a two-hectare parcel of
land. The disputed landholding is only 4,000 square meters more or less, although Baltazar A Sometimes when he visits our place he tens us that
claims that this area is a portion of the two hectares in the contract. He testified that sometime there are some bananas to be harvested and sometimes
in 1965, he relinquished 1.5 hectares of the two hectares subject of the "kasunduan" to there are other fruits, your Honor.
Nemesio Ocampo, Juan Mendoza, Miguel Ocampo and Miguel Viola and what remained under
his cultivation was 1/2 hectare owned by Corazon Pengson. He stated that when Socorro
Balagtas died, no new contract was executed. However, he insists that the old contract was Q You mean to say he stays in this subject landholding
continued between Corazon Pengson and himself. (Rollo, p. 23). consisting of 7,000 square meters?

This claim is controverted by the testimony of Corazon Pengson herself which we quote as
follows:
Q After the death of your mother in 1965, what step, if any,
have you taken, regarding this subject landholding or after
the death of your mother how did you
Q ... administer this landholding in 1963, 1964, 1965,
1966, etc?
A What I did is to fix the title of ownership, sir.
COURT:
A After the survey it turned out-
A . . . that he is occupying another lot which I learned that
property does not belong to us, Your Honor.
Q what was your arrangement regarding his stay in that
landholding which you don't own?
A He said that he had a contract with my late mother
which I don't know; in order not to cause any trouble
because I will be bothered in my business, I told him to
continue, Your Honor.
Q What do you mean when you-

Page | 2
 COURT:
(continuing)
. . .told him to continue?
A What I mean to say is that he can stay there although I
don't understand the contract with my mother, Your Honor.
Q Was he paying rentals for his stay in that lot?
A No, Your Honor (T.S.N., pp. 15-19, hearing of August 5,
1981).
Corazon Pengson further explained that she did not receive any share from the produce of the
land from 1964 up to the filing of the case and she would not have accepted any share from
the produce of the land because she knew pretty well that she was no longer the owner of the
lot since 1974 when it was foreclosed by the bank and later on purchased by the spouses
Hilarios.
We note the CAR's finding:
Tenancy relationship is indivisible. The two-hectare land subject of plaintiff's
alleged contract with Socorro Balagtas having been parcelled into seven (7)
and possession thereof relinquished/surrendered in 1965 results in the
termination of plaintiff's tenancy relationship with the previous
owner/landholder. Such being the case, he cannot now claim that the
landholding in question consisting of 4,000 square meters, more or less, is
being cultivated by him under the old contract. The owner thereof Corazon
Pengson has no tenancy relationship with him (plaintiff). (p. 25, Rollo)
From the foregoing, it is clear that Corazn Pengson did not give her consent to Baltazar to
work on her land consisting of only 1,740 square meters. We agree with the CAR when it said:
The law accords the landholder the right to initially choose his tenant to work
on his land. For this reason, tenancy relationship can only be created with
the consent of the true and lawful landholder through lawful means and not
by imposition or usurpation. So the mere cultivation of the land by usurper
cannot confer upon him any legal right to work the land as tenant and enjoy
the protection of security of tenure of the law (Spouses Tiongson v. Court of
Appeals, 130 SCRA 482) (Ibid)
And in the case of Tuazon v. Court of Appeals (118 SCRA 484), this Court had the occasion to
explain:
xxx xxx xxx
... Tenancy is not a purely factual relationship dependent on what the
alleged tenant does upon the land. It is also a legal relationship. The intent
of the parties, the understanding when the farmer is installed, and, as in this
case, their written agreements, provided these are complied with and are not
contrary to law, are even more important."
The respondent court ruled that the fact that the land in question is located in the poblacion
does not necessarily make it residential.
The conclusion is purely speculative and conjectural, We note that the evidence presented by
the petitioners sufficiently establishes that the land in question is residential and not
agricultural.
As we stated in Tiongson v. Court of Appeals (supra) "the key factor in ascertaining whether or
not there is a landowner-tenant relationship in this case is the nature of the disputed property."
The records show that the disputed property, only 1,740 square meters in area, is actually
located in the poblacion of San Miguel, Bulacan not far from the municipal building and the
church. It is divided into two lots-Lot 427-B with an area of 841 square meters and Lot 427-C
with an area of 899 square meters. Two other lots which the respondent claims to cultivate as
"tenant" were originally owned by Ruben Ocampo and Juan Mendoza, not Corazon Pengson,
through whom the respondent traces his alleged tenancy rights.
Respondent Baltazar is a full-time government employee working in the Bureau of Plant
Industry.
The disputed lots were acquired at a foreclosure sale from the Philippine National Bank. They
were purchased as residential lots and the deed of sale describes them as "residential." The
inspection and appraisal report of the PNB classified the land as residential. The declaration of
real property on the basis of which taxes are paid and approved by the Acting Provincial
Assessor of Bulacan classifies the land as residential. The tax declarations show that the 841
square meter lot is assessed for tax purposes at P25,236.00 while the 899 square meter lot is
assessed at P26,920.00. The owner states that the land has only bananas and pomelos on it.
But even if the claim of the private respondent that some corn was planted on the lots is true,
this does not convert residential land into agricultural land.
Page | 3
The presumption assumed by the appellate court, that a parcel of land which is located in a
poblacion is not necessary devoted to residential purposes, is wrong. It should be the other
way around. A lot inside the poblacion should be presumed residential or commercial or non-
agricultural unless there is clearly preponderant evidence to show that it is agricultural.

The respondent court also failed to note that the alleged tenant pays no rental or share to the
landowners. Baltazar made a vague allegation that he shared 70-30 and 50-50 of the produce
in his favor. The former owner flatly denied that she ever received anything from him,

The requirements set by law for the existence of a tenancy relationship, to wit: (1) The parties
are the landholder and tenant; (2) The subject is agricultural land; (3) The purpose is
agricultural production; and (4) There is consideration; have not been met by the private
respondent.

We held in Tiongson v. Court of Appeals, cited above that:

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 dejure 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 ... (emphasis supplied).

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.

Page | 4
NICORP MANAGEMENT AND G.R. No. 176942 TCT No. T-72669 in the name of Leoncia De Leon and Susana De Leon Loppacher (De Leon sisters),
DEVELOPMENT CORPORATION,
who were likewise impleaded as parties-defendants in the suit.
Petitioner, Present:
Ynares-Santiago, J. (Chairperson),
- versus - Austria-Martinez,
Chico-Nazario, Respondent alleged that she was the actual tiller and cultivator of the land since time immemorial with
Nachura, and
Reyes, JJ. full knowledge and consent of the owners, who were her sisters-in-law; that sometime in 2004,
LEONIDA DE LEON, petitioners circulated rumors that they have purchased the property from the De Leon sisters; that
Respondent.
petitioners ignored respondents requests to show proof of their alleged ownership; that on August 12,
x ------------------------------------------------------ x
2004, petitioners entered the land and uprooted and destroyed the rice planted on the land and graded
SALVADOR R. LIM, G.R. No. 177125
Petitioner, portions of the land with the use of heavy equipment; that the incident was reported to the Municipal

Agrarian Reform Office (MARO) which issued a Cease and Desist Order[5] but to no avail.
- versus -
Promulgated:
LEONIDA DE LEON,
Respondent. August 28, 2008 Respondent thus prayed that petitioners be ordered to respect her tenancy rights over the land; restore

the land to its original condition and not to convert the same to non-agricultural use; that any act of

These consolidated petitions assail the November 8, 2006 Decision [1] of the Court of Appeals in CA- disposition of the land to any other person be declared null and void because as a tenant, she allegedly

G.R. SP No. 92316, finding respondent Leonida de Leon as a bonafide tenant of the subject property, had a right of pre-emption or redemption over the land; and for actual damages and attorneys fees. [6]

thereby reversing and setting aside the Decision of the Department of Agrarian Reform Adjudication

Board (DARAB) in DARAB Case No. 13502[2] which affirmed the Decision[3] of the Regional Petitioner Lim denied that respondent was a tenant of the subject property under the Comprehensive

Adjudicator in DARAB Case No. 0402-031-03. Also assailed is the March 1, 2007 Agrarian Reform Program (CARP). He alleged that respondent is a septuagenarian who is no longer

Resolution[4] denying the motions for reconsideration. physically capable of tilling the land; that the MARO issued a certification [7] that the land had no

registered tenant; that respondent could not be regarded as a landless tiller under the CARP because she

On August 26, 2004, respondent filed a complaint before the Office of the Provincial Agrarian Reform owns and resides in the property adjacent to the subject land which she acquired through inheritance;

Adjudicator (PARAD) of Region IV- Province of Cavite, praying that petitioners Salvador R. Lim that an Affidavit of Non-Tenancy[8] was executed by the De Leon sisters when they sold the property to

and/or NICORP Management and Development Corporation (NICORP) be ordered to respect her him.

tenancy rights over a parcel of land located in Barangay Mambog III, Bacoor, Cavite, registered under
Moreover, Lim claimed that respondent and her family surreptitiously entered the subject land and

planted a few crops to pass themselves off as cultivators thereof; that respondent tried to negotiate with

Page | 5
petitioner Lim for the sale of the land to her, as the latter was interested in entering into a joint venture legitimate tenant-lessee on the land. However, Rolando died on September 1, 2003 as evidenced by his
with another residential developer, which shows that respondent has sufficient resources and cannot be a death certificate.[17]

beneficiary under the CARP; that the land is no longer classified as agricultural and could not thus be

covered by the CARP. Per certification issued by the Office of the Municipal Planning and Development On December 6, 2004, the RARAD rendered a Decision dismissing the complaint for failure of

Coordinator of Bacoor, Cavite, the land is classified as residential pursuant to a Comprehensive Land respondent to prove by substantial evidence all the requisites of an agricultural tenancy

Use Plan approved by the Sangguniang Panlalawigan.[9] relationship.[18] There was no evidence to show that the De Leon sisters constituted respondent as tenant-

lessee on the land; neither was it proved that there was sharing of harvests with the landowner.

For its part, petitioner NICORP asserted that it was not a proper party to the suit because it has not

actually acquired ownership of the property as it is still negotiating with the owners. However, it joined The DARAB affirmed the decision of the RARAD.[19]

in petitioner Lims assertion that respondent is not a qualified tenant; and that the subject land could not

be covered by the CARP since it is below the minimum retention area of five hectares allowed under the On appeal, the Court of Appeals reversed and set aside the findings of the RARAD/DARAB

program.[10] Eventually, NICORP purchased the subject property from Lim on October 19, 2004.[11] stating that there was sufficient evidence to prove the elements of an agricultural tenancy relationship;

that the letter of Susana De Leon to Dolores clearly acknowledged respondents son, Rolando, as a

The De Leon sisters did not file a separate answer to respondent's complaint. tenant, as well as respondents share in the proceeds of the sale of the land; and that the sharing of

produce was established by the affidavits of neighboring farmers that were not controverted by
Meanwhile, Provincial Adjudicator Teodoro A. Cidro, to whom the case was assigned, died. Thus, the petitioners.

case was referred to the Office of the Regional Agrarian Reform Adjudicator (RARAD) for resolution.

In compliance with the directive of the RARAD, respondent submitted as evidence an Extra-Judicial The appellate court further held that the reclassification of the land by the Sangguniang Panlalawigan as

Settlement of Estate[12] dated February 20, 1989 to prove that, as a result of her relationship with her residential cannot be given weight because it is only the Department of Agrarian Reform (DAR) that can

sisters-in-law, she was made a tenant of the land; a tax declaration[13] showing that the land was reclassify or convert an agricultural land to other uses or classifications; and that the sale of the land by

classified as irrigated riceland; several affidavits[14] executed by farmers of adjacent lands stating that the De Leon sisters to petitioner Lim is void because it violated Section 70 of Republic Act (R.A.) No.

respondent and her family were tenants-farmers on the subject land; and several documents and 6657[20] or the Comprehensive Agrarian Reform Law (CARL).

receipts[15] to prove the agricultural activities of respondent and her family.

Petitioners filed a motion for reconsideration but it was denied.[21] Hence, petitioners Lim and NICORP
Respondent likewise submitted a handwritten letter[16] of Susana De Leon addressed to respondents separately filed petitions under Rule 45 of the Rules of Court, which were consolidated per resolution of

daughter Dolores, showing that the former purportedly acknowledged respondent's son, Rolando, as the the Court dated June 4, 2007.[22]

Page | 6

Petitioners allege that respondent failed to prove by substantial evidence all the elements of a tenancy
relationship; hence the Court of Appeals erred in finding that respondent has tenancy rights over the
subject land.
The petitions are meritorious.
There is a tenancy relationship if the following essential elements concur: 1) the parties are the
landowner and the tenant or agricultural lessee; 2) the subject matter of the relationship is an agricultural
land; 3) there is consent between the parties to the relationship; 4) the purpose of the relationship is to
bring about agricultural production; 5) there is personal cultivation on the part of the tenant or
agricultural lessee; and 6) the harvest is shared between landowner and tenant or agricultural
lessee.[23] All the foregoing requisites must be proved by substantial evidence and the absence of one
will not make an alleged tenant a de jure tenant.[24] Unless a person has established his status as a de
jure tenant, he is not entitled to security of tenure or covered by the Land Reform Program of the
Government under existing tenancy laws.[25]
In the instant case, there is no substantial evidence to support the appellate courts conclusion that
respondent is a bona fide tenant on the subject property. Respondent failed to prove the third and sixth
elements cited above. It was not shown that the De Leon sisters consented to a tenancy relationship with
respondent who was their sister-in-law; or that the De Leon sisters received any share in the harvests of
the land from respondent or that the latter delivered a proportionate share of the harvest to the
landowners pursuant to a tenancy relationship.
The letter of Susana De Leon to Dolores, which allegedly proved consent of the De Leon sisters to the
tenancy arrangement, partially reads:
Nuong ako ay nandiyan, hindi nagkaayos ang bukid kasi ang iyong Kuya Roly ay
ayaw na si Noli ang ahente. Pero bago ako umalis ay nagkasundo kami ni Buddy
Lim (Salvador) na aayusin niya at itutuloy ang bilihan at siya ang bahala sa Kuya
Roly mo.
Kaya nagkatapos kami at ang kasama ng Kuya mo ngayon ay si Buddy Lim. Ang
pera na para sa kasama ay na kay Buddy Lim. Ang kaparte ng Nanay Onching
(Leoncia) mo ay nasa akin ang karamihan at ako na ang mag-aasikaso.
The Court cannot agree with the appellate courts conclusion that from the tenor of the letter, it is clear
that Susana acknowledged respondent's deceased son as kasama or tenant, and recognized as well
respondents share in the proceeds of the sale, thus proving the existence of an implied leasehold
relations between the De Leon sisters and respondent.[26] The word kasama could be taken in varying
contexts and not necessarily in relation to an agricultural leasehold agreement. It is also unclear whether
the term kasama referred to respondent's deceased son, Rolando, or some other person. In the first
sentence of the second paragraph, the word kasama referred to petitioner Lim while the second sentence
of the same paragraph, did not refer by name to Rolando as kasama.
Likewise, Nanay Onching, as mentioned in the letter, referred to Leoncia, one of the De Leon sisters, on
whose behalf Susana kept part of the proceeds of the sale, and not herein respondent as understood by
the Court of Appeals, who had no right to such share. It is Leoncia who co-owned the property with
Susana and who is therefore entitled to a part of the sale proceeds.
Significantly, respondent was not mentioned at all in Susanas letter, but only her son,
Rolando. However, even if we construe the term kasama as pertaining to Rolando as a tenant of the De
Leon sisters, respondent will not necessarily be conferred the same status as tenant upon her sons
death. A direct ascendant or parent is not among those listed in Section 9 of Republic Act No. 3844
which specifically enumerates the order of succession to the leasehold rights of a deceased or
incapacitated agricultural tenant, to wit:
Page | 7
 In case of death or permanent incapacity of the agricultural lessee to work his
landholding, the leasehold shall continue between the agricultural lessor and the not necessarily her alleged status as tenant of the De Leon sisters. Besides, these documents are not even
person who can cultivate the landholding personally, chosen by agricultural lessor
in the name of respondent but were issued in favor of her daughter Dolores.
within one month from such death or permanent incapacity, from among the
following: a) the surviving spouse; b) the eldest direct descendant by consanguinity;
or (c) the next eldest descendant or descendants in the order of their age. x x
x Provided, further that in the event that the agricultural lessor fails to exercise his That respondent was allowed to cultivate the property without opposition, does not mean that the De
choice within the period herein provided, the priority shall be in accordance with the
order herein established. Leon sisters impliedly recognized the existence of a leasehold relation with respondent. Occupancy and

continued possession of the land will not ipso factomake one a de jure tenant.[30] The principal factor in

There is no evidence that the De Leon sisters consented to constitute respondent as their tenant on the determining whether a tenancy relationship exists is intent. Tenancy is not a purely factual relationship

subject land. As correctly found by the RARAD/DARAB, even the Extra-Judicial Settlement of Estate dependent on what the alleged tenant does upon the land but is, moreso, a legal relationship.[31] Thus, the

that respondent offered in evidence to prove the alleged consent does not contain any statement from intent of the parties, the understanding when the farmer is installed, and their written agreements,

which such consent can be inferred.[27] Absent any other evidence to prove that the De Leon sisters provided these are complied with and are not contrary to law, are more important. [32]

consented to the tenurial arrangement, respondents cultivation of the land was by mere tolerance of her

sisters-in-law. Finally, the sale of the subject land to petitioners did not violate Sections 65[33] and 73[34] (c) of R.A. No.

The appellate court found that the element of sharing in the produce of the land was established by the 6657. There was no illegal conversion of the land because Sec. 65 applies only to lands which were

affidavits of neighboring farmers attesting to the fact that respondent cultivated the land since time covered by the CARP, i.e. those lands beyond the five-hectare retention limit allowed to landowners

immemorial.[28] However, perusal of the said affidavits reveals that there is nothing therein that would under the law, which were distributed to farmers-beneficiaries. In the instant case, it was not shown that

indicate a sharing of produce between the De Leon sisters and respondent. The affidavits did not the subject land was covered by the CARP. Neither was it shown that the sale was made to circumvent

mention at all that the De Leon sisters received a portion of the harvests or that respondent delivered the the application of R.A. 6657 or aimed at dispossessing tenants of the land that they till.

same to her sisters-in-law. The affidavits failed to disclose the circumstances or details of the alleged

harvest sharing; it merely stated that the affiants have known respondent to be the cultivator of the land The sale of the land to petitioners likewise did not violate R.A. No. 3844 or the Agricultural Tenancy

since time immemorial. It cannot therefore be deemed as evidence of harvest sharing. Act. Considering that respondent has failed to establish her status as de jure tenant, she has no right of

pre-emption or redemption under Sections 11[35]and 12[36] of the said law. Even assuming that
The other pieces of evidence submitted by respondent likewise do not prove the alleged tenancy
respondents son Rolando was a tenant of the De Leon sisters, his death extinguished any leasehold on
relationship. The summary report of the Philippine Crop Insurance Corporation, the official receipts
the subject land. Section 8[37] of R.A. 3844 specifically provides for the extinction of an agricultural
issued by the National Food Authority and the certificate of membership in Bacoor Agricultural Multi-
leasehold relation, in the absence of persons enumerated under Section 9 of the law who are qualified to
Purpose Cooperative,[29] only prove that respondent and her family engaged in agricultural activities but
succeed the deceased tenant.

Page | 8
WHEREFORE, the petitions are GRANTED. The Decision of the Court of Appeals in CA-G.R. SP
No. 92316 and the Resolution denying the motions for reconsideration are REVERSED and SET

ASIDE. The Decision of the Department of Agrarian Reform Adjudication Board in DARAB Case No.

13502, which affirmed in toto the Decision of the Regional Adjudicator in DARAB Case No. 0402-031-

03, dismissing the complaint of respondent Leonida De Leon for lack of merit,

is REINSTATED and AFFIRMED.

SO ORDERED.

Page | 9
 [G.R. No. 108941. July 6, 2000]
REYNALDO BEJASA AND ERLINDA BEJASA, petitioners, vs. THE HONORABLE COURT
OF APPEALS, Special Sixteenth Division, ISABEL CANDELARIA and JAMIE
DINGLASAN, respondents.
DECISION
PARDO, J.:
This is a petition[1] assailing the decision of the Court of Appeals[2] reversing the decision of the
Regional Trial Court, Calapan, Oriental Mindoro[3] and ordering petitioners Reynaldo and
Erlinda Bejasa (hereinafter referred to as "the Bejasas") to surrender the possession of the
disputed landholdings to respondent Isabel Candelaria ("hereinafter referred to as Candelaria")
and to pay her annual rental from 1986, attorneys fees, litigation expenses and costs. [4]
Inescapably, the appeal involves the determination of a factual issue. Whether a person is a
tenant is a factual question.[5] The factual conclusions of the trial court and the Court of
Appeals are contradictory and we are constrained to review the same.[6]
We state the undisputed incidents.
This case involves two (2) parcels of land covered by TCT No. T-58191[7] and TCT No. T-
59172,[8] measuring 16 hectares and 6 hectares more or less, situated in Barangay Del Pilar,
Naujan, Oriental Mindoro. The parcels of land are indisputably owned by Isabel Candelaria.
On October 20, 1974, Candelaria entered into a three-year lease agreement over the land with
Pio Malabanan (hereinafter referred to as "Malabanan"). In the contract, Malabanan agreed
among other things: "to clear, clean and cultivate the land, to purchase or procure calamansi,
citrus and rambutan seeds or seedlings, to attend and care for whatever plants are thereon
existing, to make the necessary harvest of fruits, etc." [9]
Sometime in 1973, Malabanan hired the Bejasas to plant on the land and to clear it. The
Bejasas claim that they planted citrus, calamansi, rambutan and banana trees on the land and
shouldered all expenses of production.
On May 3, 1977, Candelaria gave Malabanan a six-year usufruct over the land, modifying their
first agreement. As per the agreement, Malabanan was under no obligation to share the
harvests with Candelaria.[10]
Sometime in 1983, Malabanan died.
On September 21, 1984, Candelaria constituted respondent Jaime Dinglasan (hereinafter
referred to as "Jaime) as her attorney-in-fact, having powers of administration over the
disputed land.[11]
On October 26, 1984, Candelaria entered into a new lease contract over the land with Victoria
Dinglasan, Jaimes wife (hereinafter referred to as "Victoria"). The contract had a term of one
year.[12]
On December 30, 1984, the Bejasas agreed to pay Victoria rent of P15,000.00 in consideration
of an "aryenduhan" or "pakyaw na bunga"[13]agreement, with a term of one year. The
agreement is below quoted:[14]
"Ako si Victoria Dinglasan bilang tagapamahala ni Isabel Candelaria ay
ipinaaryendo kay Reynaldo Bejasa ang lupang dating aryendo ni Pio
Malabanan sa nasabing Ginang Buhat sa ika-30 ng Disyembre 1984
hanggang Ika-30 ng Disyembre 1985. Ako ay tumanggap sa kanya ng
pitong libong piso at ito ay daragdagan pa niya ng walong libong piso
(P8,000) dito sa katapusan ng buwan ng Disyembre 1984.
(signed) (signed)
Reynaldo Bejasa Victoria Dinglasan
"Witness
"(unintelligible)
"(unintelligible)"
During the first week of December 1984, the Bejasas paid Victoria P7,000.00 as agreed. The
balance of P8,000.00 was not fully paid. Only the amount of P4,000.00 was paid on January
11, 1985.[15]
After the aryenduhan expired, despite Victorias demand to vacate the land, the Bejasas
continued to stay on the land and did not give any consideration for its use, be it in the form of
rent or a shared harvest.[16]
On April 7, 1987, Candelaria and the Dinglasans again entered into a three-year lease
agreement over the land.[17] The special power of attorney in favor of Jaime was also renewed
by Candelaria on the same date.[18]
Page | 10
On April 30, 1987, Jaime filed a complaint before the Commission on the Settlement of Land
Problems ("COSLAP"), Calapan, Oriental Mindoro seeking ejectment of the Bejasas.
On May 26, 1987, COSLAP dismissed the complaint.
Sometime in June 1987, Jaime filed a complaint with the Regional Trial Court, Calapan
Oriental, Mindoro[19] against the Bejasas for "Recovery of possession with preliminary
mandatory injunction and damages." The case was referred to the Department of Agrarian
Reform ("DAR").
On December 28, 1987, the DAR certified that the case was not proper for trial before the civil
courts.[20]
The trial court dismissed Jaimes complaint, including the Bejasas counterclaim for leasehold,
home lot and damages.
On February 15, 1988, the Bejasas filed with the Regional Trial Court of Calapan, Oriental
Mindoro a complaint for "confirmation of leasehold and home lot with recovery of
damages."[21] against Isabel Candelaria and Jaime Dinglasan.[22]
On February 20, 1991, after trial, the trial court ruled in favor of the Bejasas. [23] First, they
reasoned that a tenancy relationship was established. [24] This relationship can be created by
and between a "person who furnishes the landholding as owner, civil law lessee, usufructuary,
or legal possessor and the person who personally cultivates the same." [25] Second, as bona-
fide tenant-tillers, the Bejasas have security of tenure.[26] The lower court ruled:[27]
"ACCORDINGLY, judgment is hereby rendered in favor of the plaintiffs and
against the defendants, as follows:
"(1) Ordering the defendants to maintain plaintiffs in the peaceful possession
and cultivation of the lands in question and to respect plaintiffs security of
tenure on the landholdings of Isabel Candelaria and the home lot presently
occupied by them;
"(2) Confirming the leasehold tenancy system between the plaintiffs as the
lawful tenant-tillers and the landholder, Isabel Candelaria, with the same
lease rental of P20,000.00 per calendar year for the use of the lands in
question and thereafter, same landholdings be placed under the operation
land transfer pursuant to Republic Act No. 6657;
"(3) Ordering the defendants to pay jointly and severally the plaintiffs the
amount of P115,500.00 representing the sale of calamansi which were
unlawfully gathered by Jaime Dinglasan and his men for the period July to
December, 1987 and which were supported by receipts and duly proven,
with formal written accounting, plus the sum of P346,500.00 representing the
would-be harvests on citrus, calamansi, rambutan and bananas for the years
1988, 1989 and 1990, with legal rate of interest thereon from the date of the
filing of the instant complaint until fully paid;
"(4) Ordering the defendants to pay plaintiffs jointly and severally the amount
of P30,000.00 as attorneys fee and expenses of litigation; and
"(5) Authorizing the plaintiffs as tenant-farmers to litigate as pauper not only
in this Court but up to the appellate courts in accordance with Section 16 of
P. D. No. 946.
"SO ORDERED."
On February 20, 1991, respondents filed their notice of appeal. [28]
On February 9, 1993, the Court of Appeals promulgated a decision reversing the trial courts
ruling.[29] Reasoning: First, not all requisites necessary for a leasehold tenancy relationship
were met.[30] There was no consent given by the landowner. The consent of former civil law
lessee, Malabanan, was not enough to create a tenancy relationship. [31] Second, when
Malabanan engaged the services of the Bejasas, he only constituted them as mere overseers
and did not make them "permanent tenants". Verily, even Malabanan knew that his contract
with Candelaria prohibited sublease.[32] Third, the contract ("aryenduhan") between the
Bejasas and Victoria, by its very terms, expired after one year. The contract did not provide for
sharing of harvests, means of production, personal cultivation and the like.[33] Fourth, sharing
of harvest was not proven. The testimony of Reynaldo Bejasa on this point is self-
serving. Fifth, the element of personal cultivation was not proven. Reynaldo Bejasa himself
admitted that he hired laborers to clear and cultivate the land.[34] The Court of Appeals
disposed of the case, thus:[35]
"WHEREFORE, premises considered, the judgment appealed from is hereby
REVERSED and SET ASIDE. The interlocutory order issued on September
5, 1988 is DISSOLVED and the appellees are hereby ordered to surrender
possession of the disputed landholdings to appellant Isabel Candelaria and
pay her the amount of P15,000.00 in annual rents commencing from 1986
plus attorneys fees and litigation expenses of P35,000.00 and costs.
"SO ORDERED."
Page | 11
Hence, this appeal filed on March 3, 1993.[36] Candelaria and the Bejasas. Between them, there is no tenancy relationship. Candelaria as
landowner never gave her consent.
The issue raised is whether there is a tenancy relationship in favor of the Bejasas.
The Bejasas admit that prior to 1984, they had no contact with Candelaria. [44] They
The elements of a tenancy relationship are:[37] acknowledge that Candelaria could argue that she did not know of Malabanans arrangement
with them.[45] True enough Candelaria disavowed any knowledge that the Bejasas during
Malabanans lease possessed the land.[46] However, the Bejasas claim that this defect was
(1) the parties are the landowner and the tenant; cured when Candelaria agreed to lease the land to the Bejasas for P20,000.00 per annum,
when Malabanan died in 1983.[47] We do not agree. In a tenancy agreement, consideration
(2) the subject is agricultural land; should be in the form of harvest sharing. Even assuming that Candelaria agreed to lease it out
to the Bejasas for P20,000 per year,[48] such agreement did not create a tenancy relationship,
(3) there is consent; but a mere civil law lease.

(4) the purpose is agricultural production; Dinglasan and the Bejasas. Even assuming that the Dinglasans had the authority as civil law
lessees of the land to bind it in a tenancy agreement, there is no proof that they did.

(5) there is personal cultivation; and

Again, there was no agreement as to harvest sharing. The only agreement between them is
the "aryenduhan",[49] which states in no uncertain terms the monetary consideration to be paid,
(6) there is sharing of harvests. and the term of the contract.

After examining the three relevant relationships in this case, we find that there is no tenancy Not all the elements of tenancy being met, we deny the petition.
relationship between the parties.
WHEREFORE, we AFFIRM the decision of the Court of Appeals of February 9, 1993, in toto.
Malabanan and the Bejasas. True, Malabanan (as Candelarias usufructuary) allowed the
Bejasas to stay on and cultivate the land.
No costs.

However, even if we assume that he had the authority to give consent to the creation of a
tenancy relation, still, no such relation existed. SO ORDERED.

There was no proof that they shared the harvests.

Reynaldo Bejasa testified that as consideration for the possession of the land, he agreed to
deliver the landowners share (1/5 of the harvest) to Malabanan. [38] Only Reynaldo Bejasas
word was presented to prove this. Even this is cast into suspicion. At one time Reynaldo
categorically stated that 25% of the harvest went to him, that 25% was for Malabanan and 50%
went to the landowner, Candelaria.[39] Later on he stated that the landowners share was
merely one fifth.[40]

In Chico v. Court of Appeals,[41] we faulted private respondents for failing to prove sharing of
harvests since "no receipt, or any other evidence was presented."[42] We added that "Self
serving statements ... are inadequate; proof must be adduced." [43]

Page | 12
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.
Page | 13
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
Page | 14
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
Page | 15
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
Page | 16
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.

Page | 17
PAG-ASA FISHPOND G.R. No. 164912
CORPORATION , maintenance of peaceful possession of a forty-hectare portion of a fishpond situated
Petitioner,
in Masinloc, Zambales.
Present:
- versus - YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ, The Facts
BERNARDO JIMENEZ, CHICO-NAZARIO,
ROBERT BELENBOUGH, REYES, and
LEONARD MIJARES, BRION,* JJ.
Petitioner PAG-ASA Fishpond Corporation is the owner of a 95.6123-hectare fishpond
EDUARDO JIMENEZ,
JOSE CRUZ, ELIZALDE and saltbed situated at the Municipality of Masinloc, Province of Zambales. It is covered by Transfer
EDQUIBAL, DOMINADOR
ELGINCOLIN and Promulgated: Certificate of Title (TCT) No. T-1747 issued by the Register of Deeds of Zambales. On May 1, 1989,
GERONIMO DARILAG,
Respondents. June 18, 2008 petitioner leased the subject fishpond to David Jimenez and Noel Hilario. The lease agreement, in full,

provides:
x--------------------------------------------------x

DECISION CONTRACT OF LEASE

KNOW ALL MEN BY THESE PRESENT:

REYES, R.T., J.:
This Contract of Lease made and entered into this 27th day of April, 1989 by and
between:
FOCUS of this petition is the long-term effect of hiring by a civil law lessee of PAG-ASA FISHPOND CORPORATION, a corporation duly
fishpond farmworkers with right to share in the fish harvests. organized and existing in accordance with the laws of the
Philippines, with principal office and business address at 465 A.
Flores St., Ermita, Manila, herein represented by its President,
Mr. SEGUNDO SEANGIO, of legal age, married, Filipino and
May karapatan bang manatili ang mga nasabing manggagawa kahit tapos na ang kontrata ng kumu with postal address at 465 A. Flores St., Ermita, Manila, herein
known as the LESSOR;
ha sa kanila sa may-ari ngpalaisdaan?
-AND-

Wala. Ito ang sagot namin sa katanungan sa kasong ito. DAVID JIMENEZ, of legal age, married to Pascuala Ramos
Jimenez, Filipino and residing at
1173 Paco, Obando, Bulacanand Noel Hilario, of legal age,
married to Teresita Santiago Hilario, Filipino and residence
For Our review on certiorari is the Decision[1] of the Court of Appeals (CA) affirming
of Lawa, Obando, Bulacan, herein known as the LESSEES.
that[2] of the Department of Agrarian Reform Adjudication Board (DARAB) in an action for

Page | 18

WITNESSETH
WHEREAS, the Lessor is the registered and absolute owner of a Real Property,
more particularly described as follows, to wit:
CERTIFICATE TITLE NO. T-1747
REGISTER OF DEEDS
PROVINCE OF ZAMBALES
A PARCEL OF LAND CONTAINING AN AREA OF
NINETY-FIVE HECTARES, SIXTY-
ONE ACRES ANDTWENTY-THREE CENTARES
SITUATED IN THE BARRIO OF STO. ROSARIO,
MASINLOC, ZAMBALES.
WHEREAS, the Lessor has granted and the Lessees have accepted a lease of the
above-described property under the terms and conditions hereinafter provided;
NOW, THEREFORE, for and in consideration of the above premises and in
consideration of the terms and conditions hereinafter specified the parties herein do
hereby agree and stipulate as follows:
1. The terms of this lease shall be five (5) years effective May 1,
1989 and shall terminate on May 1, 1994 and is not
renewable after said term unless renewed in writing by
both parties;
2. The Lessees have agreed to lease five (5) lots of fishponds,
one nursery pond, all the 331 saltbeds and
the Paalatanlocated within the described property under
Certificate Titles No. T-1747;
3. The lease does not include the bodega located within the
leased premises which is to be used exclusively by
the Lessorunless with written approval of the Lessor, the
Lessee may share in the use of the bodega;
4. The Leessees shall make a deposit of ONE HUNDRED
THOUSAND PESOS (P100,000.00) Philippine Currency
upon signing of this Contract of Lease. Said deposit is
without interest and shall answer for any unpaid rental of
the Lessees at the termination of this lease, penalties or
any liabilities which may incur during the effectivity of
this Contract. The Lessees cannot apply the aforesaid
deposit as rental payment before the cancellation,
termination or expiration of this agreement;
5. The Lessees shall pay to the Lessor immediately upon signing
of this Contract the amount of THREE HUNDRED
FIFTY THOUSAND PESOS (P350,000.00), Philippine
Currency as rental for the year May 1, 1989 to May 1,
1990. This payment is not refundable and will be forfeited
in the event the Lessees cancel this Contract of Lease prior
to May 1, 1990;
6. The Lessees shall pay to the Lessor the yearly advance rental
in Philippine Currency at the office of the Lessor which
shall be due and payable on or before the 1st of March of
every year for five (5) years without the necessity of
express demand, therefore it being understood that in case
of default of said Lessees in the payment of the said rental
if and when the same becomes due and payable, the
amount of rental owing shall bear interest at the rate
of twenty-four percent (24%) per annum, to be computed
daily from the date of such default until fully paid,
payment of such interest to be considered as a penalty by
reason of such default, without prejudice to the right of the
owner to terminate this Contract and eject the Lessees, as
hereinafter set forth;
That the Schedule of Payment of the annual lease cash payment
of rentals are as follows:
a) May 1, 1989 or upon signing of this Contract of
Lease:
P350,000.00 rental for May 1,
1989 to May 1, 1990
b) March 1, 1990 P400,000.00 rental for May 1,
1990 to May 1, 1991;
c) March 1, 1991 P440,000.00 rental of May 1,
1991 to May 1, 1992;
d) March 1, 1992 P484,000.00 rental of May 1,
1992 to May 1, 1993;
e) March 1, 1993 P532,400.00 rental of May 1,
1994;
Page | 19

The Lessees shall in addition to the cash rental
referred to the above, pay to the Lessor Seven
Thousand (7,000) cavans of salt measured at
four (4) tin cans, size of four gallons of 16
liters per can, per cavan yearly, starting the
year 1990 up to and including the year
1994. The Lessees shall deliver the aforesaid
salt to the Lessor from the time the Lessees
commences to harvest salt, provided that the
7,000 cavans should already be delivered to
the Lessor by the end of the harvest season in
May of a particular year. In the event that the
Lessees cannot or fail to deliver the
7,000 cavans of salt in full or in part, the
Lessees are obliged to pay whatever difference
in cash at the prevailing market value at the
end of harvest in May of a particular year;
7. That the personal character and integrity of the Lessees and
the nature of the occupancy of the leased property as
above restricted are special considerations and
inducements for granting this lease by the Lessor;
consequently, the Lessees shall not sub-let the property,
nor allow any person, firm or corporation to occupy the
same in whole or in part, nor shall the Lessees assign in
whole or in part any of their right under this Contract and
no right or interest thereto or therein shall be conferred on
or vested in anyone by the Lessees, either by operation of
law or otherwise;
8. Failure on the part of the Lessees to pay within its stipulated
due period or failure to observe any of the conditions of
this Agreement, shall entitle the Lessor to terminate this
Agreement immediately and to forefeit the deposit of One
Hundred Thousand Pesos (P100,000.00) and demand that
the Lessees vacate the leased property;
9. In the event that the Lessees shall elect to terminate this
Agreement before its expiration, the One Hundred
Thousand Pesos (P100,000.00) deposit will be forfeited in
favor of the Lessorr;
10. The Lessees shall at their own expense, improve and develop
the aforesaid fishponds and to keep up and maintain in
good repair and condition all fences, dikes, saltbeds and
other improvements existing thereon by (a) raising and
keeping the elevation of the pilapil inside the fishpond to
1 1/2 meters high and 2 meters height to
the pilapil constituting the boundary of the fishponds and
those fronting the river and a width of 2 meters for all
the pilapil; (b) to repair all the 331 saltbeds with tisa and
wooden division saltbeds; (c) to clean and clear the whole
area of the leased premises by removing all the bushes,
weeds and cogons, provided, moreover, that the Lessees
are obliged to maintain throughout the effectivity of this
Lease, the said elevation and cleanliness of the leased
premises. The Lessees shall make improvements not less
than 25% every year and thereafter for the duration of this
contract. That all the improvements and development
made by the Lessees shall after the expiration of this
Lease belong to the Lessor.
In the event that the Lessees shall fail and/or refuse to make the
aforesaid improvements and/or clean the leased premises
as herein provided, the Lessor shall have the right to
cancel and terminate this Agreement without prejudice to
the right of the Lessor or itself make the required
improvements, and cleaning and utilizing for said purpose,
the deposit of P100,000.00 in which event, the Lessor is
obliged to notify the Lessees of said use, and the amount
so used within
fifteen (15) days from said notice, the Lessees shall be
obliged to replenish the said amount of deposit
of P100,000.00.Failure of the Lessees to replenish the said
amount shall entitle the Lessor to cancel or terminate this
Agreement;
11. Except as heretofore stipulated on, the Lessees are
prohibited from using the property or portion thereof for
any other purpose except as fishpond or saltbeds and from
subleasing the property herein lease, or any other portion
thereof, or from assigning their rights under this Contract
of Lease, or mortgaging or otherwise encumbering the
same, without the express written consent of the Lessor;
12. That the Contract of Lease between the Lessor and the
Lessees is entirely a civil lease of a fishpond and not in
any manner to be construed or misunderstood to be
agrarian in nature and extent. Labor disputes and wages
Page | 20
 regarding hired workers or laborers of the Lessees in the
operation and maintenance of the Lease, shall not be the
responsibility of the Lessor, including any claim
pertaining to labor problems but the Lessees will be held
solely liable for the settlement and/or payment of the
wages and claims;
13. The Lessor shall be solely liable for the payment of only the
realty taxes on the leased premises while the Lessees shall
answer and be liable for the payment of the fees for
business licenses and permits and other business taxes be
due to the government from the operation of fishponds
and saltbeds;
14. The Lessor, through its authorized representative, is entitled
to make an inspection of the leased premises at any time
during the day time;
15. In the event, the Lessees cancel or terminate this Contract of
Lease on their own volition prior to May 1, 1994, they are
not entitled to any refund of any rentals already paid by
them to the Lessor, as well as to the deposit;
16. Upon the termination, expiration or cancellation of this
Contract of Lease, the Lessor shall automatically take
possession of the leased premises and the Lessees shall,
without need of any demand and without any need of
court action, vacate the premises and surrender possession
thereof to the Lessor, including the improvements shall
appertaining complete ownership to the Lessor, upon the
introduction of the said improvements;
17. In the event that the Lessees violated and/or fail to refuse to
abide by and comply with the terms and conditions of this
Agreement or failure to pay within
its stipulated due period, the deposit of the Lessees in the
amount of P100,000.00 shall be forfeited in favor of
the Lessor and the latter shall have the right to cancel and
terminate this Contract immediately and to secure from
the Court a writ of execution or other order for the
enforcement of the terms hereof against the Lessees, all
expenses including sheriffs fees, incurred by
the Lessor for securing said writ or/and for enforcing the
same as well as liquidated damages shall be borne solely
by the Lessees;
18. That in the event the Lessees fail to vacate or leave the
leased premises voluntarily after the termination of the
leased contract, notwithstanding demands made on them
by the Lessor, and insist and ignore the demands, the
Lessees shall pay the Lessor jointly and severally
unrealized income and profit in point of unpaid rentals for
overstaying in the leased premises without any legal right
or interest whatsoever, in the amount of the reasonable use
and benefit of the leased premises to be computed by
the Lessor, based on double the rentals of the last year of
Contract of Lease plus legal interest, until the Lessees
vacate the leased premises;
19. That if the said property is not surrendered to the Lessor in
the manner provided for in this Contract, the Lessees shall
be responsible to the Lessor for all damages which
the Lessor may suffer by reason thereof and shall
indemnify the Lessoragainst any and all claims made by
the succeeding tenants against the Lessor, resulting from
delay by the Lessor in delivering possession of the
property;
20. In case of the default of the Lessees in their obligations
under this Contract of Lease, the Lessees agrees to pay the
sum equivalent of 25% of the amount due from them as
liquidated damages as attorneys fee aside from court costs,
should the Lessor be constrained to resort to court from
the enforcement of its rights under the Contract;
21. In case the Philippine Pesos is officially devalued, all
payments to be made by the Lessees to the Lessor after
such devaluation shall be made in amounts properly
readjusted and proportionately increased in accordance
with or on the basis of the official value of the peso at the
time of the execution of this lease contract;
22. The Lessees hereby agree that any question which may arise
between the Lessor and the Lessees by reason of this
document and which has to be submitted for decision to
the court of justice, may at the option of the Lessor be
brought before the court of competent jurisdiction in the
City of Manila, waiving for this purpose other proper
venue;
Page | 21
 May 5, 1989

23. The Lessees shall jointly and severally be liable for any known to me and to me known to be the same persons who executed
liability or liabilities pertaining to the Lessor concerning the aforegoing instrument and have acknowledged before me that the same is their
the relationship and its stipulations entered into in this free and voluntary act and deed.
Contract of Lease;
This document consists of eight (8) pages, signed by the parties and their
24. This Contract of Lease cancelled and superseded, the instrumental witnesses on every page refers to a Contract of Lease that Real
Contract of Lease signed by the Lessor and Mr. David Property situated at Sto. Rosario, Masinloc, Zambales.
Jimenez on May 20, 1985 and notarized by Francisco
Agustin for and in behalf of the City of Manila and
appearing in the notarialregister as Document No. 431,
Page No. 45, Book No. XII, Series of 1985;
WITNESS MY HAND AND SEAL THIS 9TH DAY OF MAY, 1989.
25. The parties herein hereby attest and confirm that the terms
and conditions of the Contract of Lease and the effect ROBERTO M. MENDOZA
thereof have been explained to them to their satisfaction Notary Public
and that they fully understand the same. Until December 31, 1989
PTR No. 52454710
IN WITNESS WHEREOF, the parties have hereunto affixed their signatures this TAN 4784-113-M
28th day of April, 1989 at the City of Manila, Philippines. Doc. No. 422
Page No. 86
PAG-ASA FISHPOND CORPORATION Sgd. Book No. XIX
Lessor NOEL HILARIO Lessee Series of 1989.[3]

By:
Sgd. Sgd.
It is an important sense of the agreement that the fishpond will be managed by the two lessees jointly.
MR. SEGUNDO SEANGIO-President DAVID JIMENEZ-Lessee
Jimenez was charged with the management of a 40-hectare portion of the fishpond, situated
WITNESSESS
at Sitio Simelyahan, Barangay Sto. Rosario, and in Sitios Mapait and Elman, Barangay Bamban, all in
Sgd. Sgd.
the Municipality of Masinloc, Zambales. The remaining portions of petitioners landholding were to be
ACKNOWLEDGMENT
managed by Hilario.
REPUBLIC OF THE PHILIPPINES) S.S.
CITY OF MANILA )
In the meantime, the Philippine Congress enacted Republic Act (R.A.) No. 6657, the Comprehensive
BEFORE ME, a Notary Public for and in the City of Manila, Philippines, personally
appeared the following persons with their respective Residence Certificates, to wit: Agrarian Reform Law (CARL).[4] The social legislation was founded on the right of farmers and

regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of
SEGUNDO SEANGIO A-4328120 Manila, January 3, 1989
DAVID JIMENEZ A-03704324 Bulacan, Obando other farm workers, to receive a just share of the fruits thereof. It aimed to undertake the just distribution
February 17, 1989
NOEL HILARIO A-11107684 Lawa, Obando, Bulacan

Page | 22
of all agricultural lands, having taken into account ecological, developmental, and equity considerations,
and subject to the payment of just compensation.[5]
On September 26, 1989, petitioner, through its president Segundo Seangio, applied for
exemption from the coverage of the agrarian reform program. [6] The request was reiterated via a letter
dated October 17, 1989, addressed to Justice Milagros A. German, Senior Special Consultant and
Adviser in Legal Affairs, Department of Agrarian Reform (DAR). [7]
On November 10, 1989, the DAR, speaking through Justice German, acted favorably on
petitioners application for exemption. Consequently, the DAR advised the Municipal Agrarian Reform
Officer (MARO) of Masinloc to observe the status quo and defer the inclusion of petitioners fishpond in
the compulsory acquisition program.
Sometime in 1990, Jimenez hired respondents, namely: Bernardo Jimenez, Robert Belenbough, Leonard
Mijares, Eduardo Jimenez, Jose Cruz, Elizalde Edquibal, Dominador Elgincolin and Geronimo Darilag,
to work as farmworkers in the fishpond.[8] As farmworkers, respondents each received a monthly
allowance of P1,500.00 from David Jimenez, as well as 50% of the fishponds net proceeds from the total
fish harvests, which they divided equally among themselves.[9]
In April 1994, they were required by David Jimenez to vacate the fishpond on or before May 1,
1994. The demand to vacate was made due to the impending expiration of Jimenezs civil law lease over
the property with petitioner.[10]
Respondents were not agreeable to the demand to vacate. Accordingly, on April 25, 1994, they filed a
complaint directly against petitioner for maintenance of possession before the Provincial Agrarian
Reform Adjudication Board (PARAD) in Iba, Zambales.[11]In their complaint, they
contended, inter alia, that they are entitled to security of tenure; and that the fishpond is covered by the
Comprehensive Agrarian Reform Program (CARP) under R.A. No. 6657.
They prayed that the entire fishpond of petitioner be placed under the coverage of the CARP;
that they be considered as farmer beneficiaries who are entitled to be awarded the fishpond; and that
they be allowed to remain in possession of the fishpond.[12]
In its Answer, petitioner averred that its lessees over the fishpond were only David Jimenez and one
Noel Hilario and that its lease agreement with said lessees was not agrarian but civil in nature. It also
posited that the fishpond, being a commercial one, is not yet subject to compulsory acquisition under the
CARP pursuant to Section 11 of R.A. No. 6657. [13] Petitioner alleged that respondents entry into and
occupation of the fishpond, as well as their enjoyment of the fish produced, was without its knowledge
and consent.[14]
On July 18, 1994, the PARAD ruled in favor of petitioner (defendant) and against respondents
(plaintiffs), dismissing the complaint for lack of merit. The fallo of the PARADs decision reads:
WHEREFORE, this Forum is constrained to rule out plaintiffs allegation as a
regular farmworker pursuant to R.A. 6657 and/or tenants of herein defendant and to
deny prayer for placing the landholding of the defendant under CARP coverage
which is purely administrative and only cognizable by the Department of Agrarian
Reform, as there are no concrete evidence. Thus, a judgment is hereby rendered
DISMISSING plaintiffs complaint for lack of merit.
SO DECIDED.[15]
The PARAD ruled that respondents are not agricultural leasehold tenants who may be entitled to
security of tenure. According to the PARAD, petitioner, as landowner, did not consent to the hiring of
respondents, as farmworkers, by its civil law lessee, David Jimenez. The PARAD declared:
Page | 23

The original lessees in the Contract of Lease (Annex A) with the lessor-defendant
are David Jimenez and Noel Hilario, who are both residents of Obando,
Bulacan. The said contract expired on May 01, 1994. Paragraph 7 of the contract of
lease provides that, consequently, the lessees shall not sublet the property, nor allow
any person, firm or corporation to occupy the same in whole or in part nor shall the
lessees assign in whole or in part any of their right under this Contract and no right
or interest thereto or therein shall be conferred or vested in anyone by the lessees
either by operation of law or otherwise. The provision was totally violated by the
lessee David Jimenez when the plaintiff(s) were admittedly hired as
farmworkers. The plaintiffs consist of David Jimenez sons Bernardo and Eduardo
Jimenez, his son-in-law Leonard Mijares and Robert Belenbough, Jose Cruz,
Elizalde Edquibal, Dominador Elgincolin and Geronimo Darilag. Noticeable from
the evidence submitted that all the plaintiffs are not residents of Zambales where the
subject landholding are situated.
Consequently, because of the violation of the contract, the plaintiffs are not even
recognized by the defendant. Plaintiffs allegation to be (sic) tenant necessarily failed
and has no leg to stand. (sic). Plainly, consent of a landowner which is an essential
element of tenancy is not attendant.[16]
On appeal to the DARAB, the PARADs decision was reversed and set aside. The dispositive part of the
DARAB decision reads:
WHEREFORE, premises considered and finding reversible errors, (sic)
committed by the Adjudicator a quo, the assailed decision is hereby REVERSED
and a new judgment is rendered directing the PAG-ASA Fishpond Corporation,
Incorporated (sic) through its President and Officers, to respect the peaceful
possession, cultivation and enjoyment of the subject landholding by the petitioners-
appellants who are the tenants thereof.
SO ORDERED.[17]
The DARAB ruled that respondents are agricultural leasehold tenants of the subject property
who deserve the protective mantle of the law despite the fact that only the civil law lessee installed them
as such. It ratiocinated:
x x x plaintiffs-appellants are, by operation of law, tenant-farmers of the
subject landholding, notwithstanding that it was a civil law lessee, who installed
them therein. When all the elements the (sic) tenancy relation are present, then the
protective mantle of the security of tenure as guaranteed by the 1987 Charter shall
be available to them. x x x
xxxx
Verily, Sections 6 and 7 of Republic Act (RA) No. 3844 explicit (sic)
provides, thus:
Section 6. Parties to Agricultural Leasehold Relation.
The agricultural leasehold relation shall be limited to the person
who furnished the landholding, either as owner, civil law lessee,
usufructuary, or legal possessor and the person who personally
cultivates the same.
and
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, 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.[18]
When petitioners motion for reconsideration was denied[19] by the DARAB on January 17,
2001, they appealed to the CA via petition for review under Rule 43 of the 1997 Rules of Civil
Procedure.
Petitioner insisted that respondents were not tenants on the property. It argued anew that it was
not a party to any tenancy relationship with anyone vis--vis the subject property; and that it had not
received any share in the fishponds harvests from respondents.
CA Disposition
Page | 24
 2. Voluntary surrender of the landholding by the agricultural
lessee, written notice of which shall be served 3 months in
In a Decision dated March 30, 2004, the CA affirmed the DARAB decision, disposing as
advance; or
follows:
3. Absence of an heir to succeed the lessee in the event of
his/her death of permanent incapacity.
Once a tenancy relationship is established, therefore, the tenant is entitled to security
of tenure and cannot be ejected unless upon judicial authority for causes provided by
law. The reliance of the petitioner on Sanchez v. Court of Appeals, supra, is,
Aggrieved, petitioners moved for reconsideration. The motion was, however, denied by the
consequently misplaced, since that doctrine was applicable only to the hired laborers
of a civil law lessee, not to bona fide share or leasehold tenants like the respondents. appellate court via Resolution[21]dated August 5, 2004. Hence, the present recourse under Rule 45.
WHEREFORE, the appealed decision is AFFIRMED.

SO ORDERED.[20]
Issues

The CA opined that although petitioner was not privy to a tenancy relationship with

respondents, its civil law lessee, David Jimenez, made respondents the agricultural leasehold tenants in Petitioner now contends that:

the property. The CA concluded that David Jimenez, being the legal possessor of the fishpond as defined
I
under Section 42 of R.A. No. 1199, has the authority to hire agricultural leasehold tenants and to bring THE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING THE
HONORABLE COURTS RULING IN THE RECENT CASE OF VALENCIA VS.
about agricultural leasehold relations. This relation, according to the appellate court, is binding upon the COURT OF APPEALS, ET AL., 401 SCRA 666, WHICH APPLIES SQUARELY
TO THE FACTS IN THE INSTANT CASE, THAT SECTION 6 OF REPUBLIC
landowner, petitioner, which effectively became obliged to respect the rights of the tenants. Among said
ACT NO. 3844, AS AMENDED, DOES NOT AUTOMATICALLY AUTHORIZE
rights is the right to security of tenure. A CIVIL LAW LESSEE TO EMPLOY A TENANT WITHOUT THE CONSENT
OF THE LANDOWNER. ACCORDINGLY, AFTER THE EXPIRATION OF THE
CIVIL LAW LEASE, PETITIONER WAS NOT BOUND BY THE ALLEGED
TENANCY RELATIONSHIP BETWEEN RESPONDENTS AND THE CIVIL
The CA pointed out: LAW LESSEE WHICH WAS ENTERED INTO WITHOUT ITS CONSENT.

Finally, although the petitioner is correct in positing that the lease was one II
under the civil law, rather than an agricultural lease, the expiration of the lease did THE COURT OF APPEALS GRAVELY ERRED IN CONCLUDING THAT
RESPONDENTS ARE SHARE TENANTS WHO AREENTITLED TO
not negate the right of the respondents to security of tenure as the bona fide tenants.
SECURITY OF TENURE.
According to Sec. 8, Republic Act No. 3844, otherwise known as The
Agricultural Land Reform Code, a leasehold relation, once established, can be III
THE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING THE
terminated on the following grounds, to wit:
RULING OF THE HONORABLE COURT IN THE CASE OF SANCHEZ VS.
1. Abandonment of the landholding without the knowledge of COURT OF APPEALS, 129 SCRA 717 TO THE INSTANT CASE.[22]
the agricultural lessor;

Page | 25

Our Ruling
Before We begin to consider the issues hoisted by petitioner, the Court takes cognizance of a
pivotal question of jurisdiction. We resolve this issue motu proprio, even if it was not raised by the
parties nor threshed out in their pleadings.[23]
The jurisdiction of the PARAD, DARAB and the CA on appeal, is limited to agrarian disputes or
controversies and other matters or incidents involving the implementation of the CARP under R.A. No.
6657, R.A. No. 3844 and other agrarian laws.[24] An agrarian dispute is defined as any controversy
relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands
devoted to agriculture, including disputes concerning farm workers associations or representation of
persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such
tenurial arrangements.[25]
As early as February 20, 1995, private lands actually, directly and exclusively used for prawn farms and
fishponds were exempted from the coverage of the CARL by virtue of R.A. No. 7881. [26] Section 2 of
the said law expressly provides:
Sec. 2. Section 10 of Republic Act No. 6657 is hereby amended to read as
follows:
Sec. 10. Exemptions and Exclusions.
a) Lands actually, directly and exclusively used for
parks, wildlife, forest reserves, reforestation, fish sanctuaries
and breeding grounds, watersheds and mangroves shall be
exempt from the coverage of this Act.
b) Private lands actually, directly and exclusively used
for prawn farms and fishponds shall be exempt from the
coverage of this Act: Provided, That said prawn farms and
fishponds have not been distributed and Certificate of Land
Ownership Award (CLOA) issued to agrarian reform
beneficiaries under the Comprehensive Agrarian Reform
Program.
In cases where the fishponds or prawn farms have
been subjected to the Comprehensive Agrarian Reform Law, by
voluntary offer to sell, or commercial farms deferment or notices
of compulsory acquisition, a simple and absolute majority of the
actual regular workers or tenants must consent to the exemption
within one (1) year from the effectivity of this Act.When the
workers or tenants do not agree to this exemption, the fishponds
or prawn farms shall be distributed collectively to the worker-
beneficiaries or tenants who shall form a cooperative or
association to manage the same.
In cases where the fishponds or prawn farms have not
been subjected to the Comprehensive Agrarian Reform Law, the
consent of the farm workers shall no longer be necessary,
however, the provision of Section 32-A hereof on incentives
shall apply.
c) Lands actually, directly and exclusively used and
found to be necessary for national defense, school sites and
campuses, including experimental farm stations operated by
public or private schools for educational purposes, seeds and
seedling research and pilot production center, church sites and
convents appurtenant thereto, mosque sites and Islamic centers
appurtenant thereto, communal burial grounds and cemeteries,
penal colonies and penal farms actually worked by the inmates,
government and private research and quarantine centers and all
lands with eighteen percent (18%) slope and over, except those
already developed, shall be exempt from the coverage of this
Act.
Admittedly, there is no express repeal of R.A. No. 3844 as a whole. Its provisions that are not
inconsistent with R.A. No. 6657 may still be given suppletory effect. Nonetheless, there is now
irreconcilable inconsistency or repugnancy between the two laws as regards the treatment of fishponds
and prawn farms. Such repugnancy leads to the conclusion that the provisions of R.A. No. 6657
supersede the provisions of R.A. No. 3844 insofar as fishponds and prawn farms are concerned. In any
Page | 26
event, Section 76 of R.A. No. 6657, as amended, provides that all other laws, decrees, issuances, or parts
thereof inconsistent thereto are repealed or amended accordingly. [27]
Verily, the DARAB finding of agricultural leasehold tenancy relations between petitioners
civil law lessee David Jimenez and respondents have no basis in law. The rule is well-entrenched in this
jurisdiction that for tenancy relations to exist, the following requisites must concur: (a) the parties are
the landholder and the tenant; (b) the subject is agricultural land; (c) there is consent; (d) the purpose is
On the jurisdictional issue, we find that it was reversible error for the PARAB to
have taken cognizance of petitioners complaint. The jurisdiction of the PARAB in
this case is limited to agrarian disputes or controversies and other matters or
incidents involving the implementation of the Comprehensive Agrarian Reform
Program (CARP) under Rep. Act No. 6657, Rep. Act No. 3844 and other agrarian
laws. An agrarian dispute is defined as any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands
devoted to agriculture, including disputes concerning farm workers associations or
representation of persons in negotiating, fixing, maintaining, changing or seeking to
arrange terms or conditions of such tenurial arrangements.

agricultural production; and (e) there is consideration.[28]
The absence of one element makes an occupant of a parcel of land, or a cultivator thereof, or a
planter thereon outside the scope of the CARL. Nor can such occupant, cultivator or planter be classified
as a de jure agricultural tenant for purposes of agrarian reform law. And 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 agrarian reform laws. [29]
In the case under review, the subject fishpond is not an agricultural land subject to compulsory
Although Section 166(1) of Rep. Act No. 3844 had included fishponds in its
definition of agricultural land within its coverage, this definition must be considered
modified in the light of Sec. 2 of Rep. Act No. 7881, which amended Section 10 of
Rep. Act No. 6657; otherwise known as the Comprehensive Agrarian Reform Law
(CARL). Expressly, the amendment has excluded private lands actually, directly and
exclusively used for prawn farms and fishponds from the coverage of the CARL. In
fact, under Section 3(c) of R.A. No. 6657, as amended, defines an agricultural land
as that which is devoted to agricultural activity and not otherwise classified as
mineral, forest, residential, commercial or industrial land. In turn, Section 3(b)
thereof defines agricultural activity as the cultivation of the soil, planting of crops,
growing of fruit trees, including the harvesting of such farm products, and other
farm activities, and practices performed by a farmer in conjunction with such
farming operations done by persons whether natural or juridical. Clearly, by virtue
of the amendments to the CARL, the operation of a fishpond is no longer considered
an agricultural activity, and a parcel of land devoted to fishpond operation is not
agricultural land as therein defined.[32]

CARP coverage. Neither was there a sharing of the harvests between petitioner and respondents. That
It may well be argued that respondents have acquired a vested right to security of tenure arising from the
respondents shared the harvests of the fishpond only with the civil law lessee David Jimenez is
alleged existing tenancy relations. The complaint before the PARAD was filed on April 14, 1994, way
uncontroverted. Evidently, there is no agrarian tenancy relationship between petitioner and respondents.
before the passage and effectivity of R.A. No. 7881 on February 20, 1995. However, a claim to any

vested right has no leg to stand on. Section 2(b) of R.A. No. 7881[33] now contains a proviso, precisely to
This is not a case of first impression. The Court has had occasion to affirm the exemption of fishponds
protect vested rights of those who have already been issued a Certificate of Land Ownership Award
from the coverage of the CARP in Atlas Fertilizer Corp. v. Secretary, Department of Agrarian
(CLOA). Without such CLOA, no vested right can accrue to persons claiming it. Here, the record is
Reform[30] and in Romero v. Tan.[31] In Romero, the Court scored the PARAD for taking cognizance of a
bereft of any proof that respondents were issued individual certificates to evidence the award of the
complaint for maintenance of peaceful possession over a fishpond filed by a tenant-lessee. The Court
property in their favor.
held then:

Page | 27

Even assuming, ex gratia argumenti, that the PARAD, DARAB and the CA had jurisdiction,
the complaint for maintenance of peaceful possession lodged by respondents still fails for triple reasons.
First. Intent is material in tenancy relations.
The DARAB and the CA anchored its finding of tenancy relations on the legal possession of
David Jimenez, the civil law lessee, over the subject property. According to them, as the legal possessor,
Jimenezs installation of respondents as tenants binds petitioner.
The rule is well-entrenched in this jurisdiction that tenancy is not a purely
factual relationship, it is also a legal relationship.[34] The intent of the parties, the understanding when
the tenant is installed, their written agreements, provided they are not contrary to law, are crucial.
In Valencia v. Court of Appeals,[35] the Court voided the CA finding of tenancy relations
between the landowner and the tenants of the civil law lessee for lack of intent. The Court held
in Valencia:
The substantive issue to be resolved may be expressed in this manner: Can a
contract of civil law lease prohibit a civil law lessee from employing a tenant on the
land subject matter of the lease agreement? Otherwise stated, can petitioners civil
law lessee, Fr. Flores, install tenants on the subject premises without express
authority to do so under Art. 1649 of the Civil Code, more so when the lessee is
expressly prohibited from doing so, as in the instant case?
Contrary to the impression of private respondents, Sec. 6 of R.A. No. 3844, as
amended, does not automatically authorize a civil law lessee to employ a tenant
without the consent of the landowner. The lessee must be so specifically
authorized. For the right to hire a tenant is basically a personal right of a landowner,
except as may be provided by law. But certainly nowhere in Sec. 6 does it say that a
civil law lessee of a landholding is automatically authorized to install a tenant
thereon. A different interpretation would create a perverse and absurd situation
where a person who wants to be a tenant, and taking advantage of this perceived
ambiguity in the law, asks a third person to become a civil law lessee of the
landowner. Incredibly, this tenant would technically have a better right over the
property than the landowner himself. This tenant would then gain security of tenure,
and eventually become owner of the land by operation of law. This is most unfair to
the hapless and unsuspecting landowner who entered into a civil law lease
agreement in good faith only to realize later on that he can no longer regain
possession of his property due to the installation of a tenant by the civil law lessee.
On the other hand, under the express provision of Art. 1649 of the Civil Code, the
lessee cannot assign the lease without the consent of the lessor, unless there is a
stipulation to the contrary. In the case before us, not only is there no stipulation to
the contrary; the lessee is expressly prohibited from subleasing or encumbering the
land, which includes installing a leasehold tenant thereon since the right to do so is
an attribute of ownership. Plainly stated therefore, a contract of civil law lease can
prohibit a civil law lessee from employing a tenant on the land subject matter of the
lease agreement. x x x[36]
Here, petitioner never intended to install respondents as tenants. As in Valencia, the contract
of lease petitioner executed with David Jimenez expressly prohibits the lessees to sublet the property,
nor allow any person, firm or corporation to occupy the same in whole or in part, nor shall the lessee
assign in whole or in part any of their right under this contract. [37] It is elementary that possession can be
limited by express agreement of the parties.[38] In the case before Us, the lessees were expressly
prohibited from subleasing or encumbering the land in any manner. Of course, this includes the
installation of tenants on the subject property.
The Court notes that in Joya v. Pareja[39] and again in Ponce v. Guevarra,[40] agricultural
leasehold tenancy relations were affirmed despite a similar prohibition in the lease agreement. However,
in the said cases, the landowners were deemed to have consented to, and ratified the, installation of the
tenants. The landowners there extended the terms of the lease and negotiated for better terms with the
tenants themselves. They were thus held in estoppel and the tenants considered de jure occupants.
Page | 28

In the case under review, the record is bereft of any indication that petitioner dealt with
respondents in the same manner. As adverted to earlier, petitioners were consistent that they contracted
only with their civil law lessees. They were not privy to the transactions entered into by its lessee with
respondents.
Second. A stream cannot rise higher than its source. The civil law lessee, David Jimenez, was
not authorized to enter into a tenancy relationship with respondents.
The DARAB and the CA ruled that Section 6 of R.A. No. 3844 authorizes a legal possessor,
such as David Jimenez, to employ a tenant even without the consent of the landowner.
Again, they are mistaken. The Court, in Valencia, traced the origin and outlined the rationale
of the polemical provision. Said the Court:
When Sec. 6 provides that the agricultural leasehold relations 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, it assumes that there is already an existing agricultural leasehold relation,
i.e., a tenant or agricultural lessee already works the land. The epigraph of Sec. 6
merely states who are Parties to Agricultural Leasehold Relations, which assumes
that there is already a leasehold tenant on the land; not until then. This is precisely
what we are still asked to determine in the instant proceedings.
To better understand Sec.6, let us refer to its precursor, Sec. 8 of R.A. No. 1199, as
amended. Again, Sec. 8 of R.A. No. 1199 assumes the existence of a tenancy
relation. As its epigraph suggests, it is a Limitation of Relation, and the purpose is
merely to limit the tenancy to the person who furnishes the land, either as owner,
lessee, usufructuary, or legal possessor, and to the person who actually works the
land himself with the aid of labor available from within his immediate farm
household. Once the tenancy relation is established, the parties to that relation are
limited to the persons therein stated. Obviously, inherent in the right of landholders
to install a tenant is their authority to do so; otherwise, without such authority, civil
law lessees as landholders cannot install a tenant on the landholding. Neither Sec. 6
of R.A. No. 3844 nor Sec. 8 of R.A. No. 1199 automatically authorizes the persons
named therein to employ a tenant on the landholding.
According to Mr. Justice Guillermo S. Santos and CAR Executive
Judge Artemio C. Macalino, respected authorities on agrarian reform, the reason for
Sec. 6 of R.A. No. 3844 and Sec. 8 of R.A No. 1199 in limiting the relationship to
the lessee and the lessor is to discourage absenteeism on the part of the lessor and
the custom of co-tenancy under which the tenant (lessee) employs another to do the
farm work for him, although it is he with whom the landholder (lessor) deals
directly. Thus, under this practice, the one who actually works the land gets the short
end of the bargain, for the nominal or capitalist lessee hugs for himself a major
portion of the harvest. This breeds exploitation, discontent and confusion
x x x. The kasugpong, kasapi, or katulong also works at the pleasure of the nominal
tenant. When the new law, therefore, limited tenancy relation to the landholder and
the person who actually works the land himself with the aid of labor available from
within his immediate farm household, it eliminated the nominal tenant or middleman
from the picture.
Another noted authority on land return, Dean Jeremias U. Montemayor, explains the
rationale for Sec. 8 of R.A. No. 1199, the precursor of Sec. 6 of R.A. No. 3844:
Since the law establishes a special relationship in tenancy with
important consequences, it properly pinpoints the persons
to whom said relationship shall apply. The spirit of the law is to
prevent both landholder absenteeism and tenant
absenteeism.Thus, it would seem that the discretionary powers
and important duties of the landholder, like the choice of crop or
seed, cannot be left to the will or capacity of an agent or
overseer, just as the cultivation of the land cannot be entrusted
by the tenant to some other people. Tenancy relationship has
been held to be of a personal character.
Section 6 as already stated simply enumerates who are the parties to an existing
contract of agricultural tenancy, which presupposes that a tenancy already exists. It
does not state that those who furnish the landholding, i.e., either as owner, civil law
lessee, usufructuary, or legal possessor, are automatically authorized to employ a
tenant on the landholding. The reason is obvious. The civil lease agreement may be
restrictive. Even the owner himself may not be free to install a tenant, as when his
ownership or possession is encumbered or is subject to a lien or condition that he
should not employ a tenant thereon. This contemplates a situation where the
property may be intended for some other specific purpose allowed by law, such as,
its conversion into an industrial estate or a residential subdivision.
xxxx
Page | 29
 From the foregoing discussion, it is reasonable to conclude that a civil law
lessee cannot automatically institute tenants on the property under Sec. 6 of R.A.
No. 3844. The correct view that must necessarily be adopted is that the civil law
WHEREFORE, the appealed Decision is REVERSED AND SET ASIDE. A new one is
lessee, although a legal possessor, may not install tenants on the property unless
expressly authorized by the lessor. And if a prohibition exists or is stipulated in the entered DISMISSING the complaint for maintenance of peaceful possession and inclusion for
contract of lease the occupants of the property are merely civil law sublessees whose
rights terminate upon the expiration of the civil law lease agreement. [41] compulsory CARP coverage of petitioners landholding for lack of jurisdiction and lack of merit.

Evidently, securing the consent of the landowner is a condition sine qua non for the installation of

tenants. Here, petitioners consent was not obtained prior to the engagement of respondents by the civil

law lessee, David Jimenez. Worse, the lease agreement expressly prohibited the assignment of the lease
SO ORDERED.
to third persons. Verily, respondents can acquire no better right than their predecessor-in-interest, David

Jimenez.

Third. The compulsory acquisition of petitioners landholding pursuant to the agrarian reform

program was held in abeyance pending evaluation by its application for exemption.

The records unveil that on September 26, 1989, petitioner applied for exemption from the

coverage of the agrarian reform program.[42] On November 10, 1989, the DAR, speaking through Justice

Milagros A. German, Senior Special Consultant and Adviser in Legal Affairs, [43] acted favorably on

petitioners application for exemption. Along this line, the MARO of Masinloc, Zambales, was advised

to observe the status quo and defer the inclusion of petitioners fishpond in the compulsory acquisition

program.

In sum, respondents claim of security of tenure founded on their installation as tenants of petitioners

civil law lessee is without basis in law. Procedurally, fishponds and prawn farms were expressly

exempted from the coverage of the agrarian reform program. Substantially, the civil law lessee was not
authorized to enter into leasehold-tenancy relations.

Page | 30
EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D. DAEZ, petitioners, vs. THE
HON. COURT OF APPEALS MACARIO SORIENTES, APOLONIO MEDIANA, ROGELIO
MACATULAD and MANUEL UMALI, respondents. Korte
DECISION
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision[1] of the Court of Appeals[2] dated
January 28, 1998 which denied the application of petitioner heirs of Eudosia Daez for the
retention of a 4.1685-hectare riceland pursuant to Republic Act (R.A.) No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law[3], thereby reversing the Decision[4] of then
Executive Secretary Ruben D. Torres and the Order[5] of then Deputy Executive Secretary
Renato C. Corona, both of which had earlier set aside the Resolution[6] and Order[7] of then
Department of Agrarian Reform (DAR) Secretary Ernesto D. Garilao denying exemption of the
same riceland from coverage under Presidential Decree (P.D.) No. 27.
The pertinent facts are:
Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in Barangay Lawa,
Meycauayan, Bulacan which was being cultivated by respondents Macario Soriente, Rogelio
Macatulad, Apolonio Mediana and Manuel Umali under a system of share-tenancy. The said
land was subjected to the Operation Land Transfer (OLT) Program under Presidential Decree
(P.D.) No. 27[8] as amended by Letter of Instruction (LOI) No. 474[9]. Thus, the then Ministry of
Agrarian Reform acquired the subject land and issued Certificates of Land Transfer (CLT) on
December 9, 1980 to private respondents as beneficiaries.
However, on May 31, 1981, private respondents signed an affidavit, allegedly under duress,
stating that they are not share tenants but hired laborers[10]. Armed with such document,
Eudosia Daez applied for the exemption of said riceland from coverage of P.D. No. 27 due to
non-tenancy as well as for the cancellation of the CLTs issued to private respondents.
In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared
ownership over 41.8064 hectares of agricultural lands located in Meycauayan, Bulacan and
fourteen (14) hectares of riceland, sixteen (16) hectares of forestland, ten (10) hectares of
"batuhan" and 1.8064 hectares of residential lands[11] in Penaranda, Nueva Ecija. Included in
their 41.8064-hectare landholding in Bulacan, was the subject 4,1685-hectare riceland in
Meycauayan.
On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying Eudosia
Daezs application for exemption upon finding that her subject land is covered under LOI No.
474, petitioner being owner of the aforesaid agricultural lands exceeding seven (7) hectares.[12]
On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong
requesting for reconsideration of Undersecretary Medinas order. But on January 16,
1992.[13] Secretary Leong affirmed the assailed order upon finding private respondents to be
bonafide tenants of the subject land. Secretary Leong disregarded private respondents May
31, 1981 affidavit for having been executed under duress because he found that Eudosias son,
Adriano, who was then the incumbent Vice-Mayor of Meycauayan, pressured private
respondents into signing the same.
Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of
Appeals via a petition for certiorari. The Court of Appeals, however, sustained the order of
Secretary Leong in a decision dated April 29, 1992. Eudosia pursued her petition before this
court but we denied it in a minute resolution dated September 18, 1992. We also denied her
motion for reconsideration on November 9, 1992. Sclaw
Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents (EPs) to private
respondents. Thereafter, the Register of Deeds of Bulacan issued the corresponding Transfer
Certificates of Title (TCTs).
Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her,
Eudosia Daez next filed an application for retention of the same riceland, this time under R.A.
No. 6657.
In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B. Bernardo allowed
Eudosia Daez to retain the subject riceland but he denied the application of her eight (8)
children to retain three (3) hectares each for their failure to prove actual tillage of the land or
direct management thereof as required by law.[14] Aggrieved, they appealed to the DAR.
On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order of Regional
Director Bernardo in a Resolution,[15] the decretal portion of which reads, viz.:
"WHEREFORE, premises considered, this Resolution is hereby issued
setting aside with FINALITY the Order dated March 22, 1994 of the Regional
Director of DAR Region III.
The records of this case is remanded to the Regional Office for immediate
implementation of the Order dated January 16, 1992 of this office as
affirmed by the Court of Appeals and the Supreme Court.
SO ORDERED."
Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19, 1995. [16]
Page | 31
She appealed Secretary Garilaos decision to the Office of the President which ruled in her
favor. The dispositive portion of the Decision[17] of then Executive Secretary reads:
"WHEREFORE, the resolution and order appealed from are hereby SET
ASIDE and judgment is rendered authorizing the retention by Eudosia Daez
or her heirs of the 4.1685-hectare landholding subject thereof.
SO ORDERED."[18]
Aggrieved, private respondents sought from the Court of Appeals, a review of the decision of
the Office of the President.
On January 28, 1999, the said Decision of the Office of the President was reversed. The Court
of Appeals ordered, thus:
"WHEREFORE, the assailed decision of July 5, 1996 and Order dated
October 23, 1996 of the public respondents are REVERSED AND SET
ASIDE, and the Resolution and Order of DAR Secretary Ernesto D. Garilao
respectively dated August 26, 1994 and January 19, 1995 are
REINSTATED.
SO ORDERED."
Hence, this petition which assigns the following errors:
"I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED
THAT DISTINCTION BETWEEN EXEMPTION FROM AGRARIAN
REFORM COVERAGE AND THE RIGHT OF RETENTION OF
LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN
ADVERSE DECISION IN THE FORMER WILL FORECLOSE FURTHER
ACTION TO ENFORCE THE LATTER CONSIDERING THAT THEY
CONSTITUTE SEPARATE AND DISTINCT CAUSES OF ACTION AND,
THEREFORE, ENFORCEABLE SEPARATELY AND IN SEQUEL. Sclex
II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED
THE PRINCIPLE OF RES JUDICATA DESPITE THE FACT THAT THE
PREVIOUS CASE CITED (EXEMPTION FROM COVERAGE DUE TO
NON-TENANCY) AND THE PRESENT CASE (RETENTION RIGHT) ARE
OF DIFFERENT CAUSES OF ACTION.
III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT
RULED/OPINED THAT THERE WAS A CUT-OFF DATE (AUGUST 27,
1985) FOR LANDOWNERS TO APPLY FOR EXEMPTION OR RETENTION
UNDER PD 27 AND THOSE WHO FAILED TO FILE THEIR
APPLICATIONS/PETITIONS ARE DEEMED TO HAVE WAIVED THEIR
RIGHTS.
IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING
THAT PETITIONERS (RESPONDENTS THEREIN) ARE GUILTY OF
ESTOPPEL.
V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED
THAT THE LAND SUBJECT OF THIS CASE IS NO LONGER OWNED BY
PETITIONERS SINCE PRIVATE RESPONDENTS HAVE ALREADY BEEN
ISSUED NOT ONLY THEIR RESPECTIVE CERTIFICATES OF LAND
TRANSFER BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF TITLE
OVER THE DISPUTED AREA."[19]
We grant the petition.
First. Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted
rice or corn lands. The requisites for coverage under the OLT program are the following: (1)
the land must be devoted to rice or corn crops; and (2) there must be a system of share-crop
or lease-tenancy obtaining therein. If either requisite is absent, a landowner may apply for
exemption. If either of these requisites is absent, the land is not covered under OLT. Hence, a
landowner need not apply for retention where his ownership over the entire landholding is
intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is
irrigated, a three (3)-hectare lot constituting a family size farm. However, said law allows a
covered landowner to retain not more than seven (7) hectares of his land if his aggregate
landholding does not exceed twenty-four (24) hectares. Otherwise, his entire landholding is
covered without him being entitled to any retention right. [20] Xlaw
Consequently, a landowner may keep his entire covered landholding if its aggregate size does
not exceed the retention limit of seven (7) hectares. In effect, his land will not be covered at all
by the OLT program although all requisites for coverage are present. LOI No. 474 clarified the
effective coverage of OLT to include tenanted rice or corn lands of seven (7) hectares or less,
if the landowner owns other agricultural lands of more than seven (7) hectares. The term "other
Page | 32
agricultural lands" refers to lands other than tenanted rice or corn lands from which the
landowner derives adequate income to support his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice
or corn crops even if it is tenanted; or (2) the land is untenanted even though it is devoted to
rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his right of retention are
the following: (1) the land must be devoted to rice or corn crops; (2) there must be a system of
share-crop or lease-tenancy obtaining therein; and (3) the size of the landholding must not
exceed twenty-four (24) hectares, or it could be more than twenty-four (24) hectares provided
that at least seven (7) hectares thereof are covered lands and more than seven (7) hectares of
it consist of "other agricultural lands".
Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT
and those for the grant of an application for the exercise of a landowners right of retention, are
different.
Hence, it is incorrect to posit that an application for exemption and an application for retention
are one and the same thing. Being distinct remedies, finality of judgment in one does not
preclude the subsequent institution of the other. There was, thus, no procedural impediment to
the application filed by Eudosia Daez for the retention of the subject 4.1865-hectare riceland,
even after her appeal for exemption of the same land was denied in a decision that became
final and executory.
Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject
4.1685 riceland.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by
the legislature.[21] It serves to mitigate the effects of compulsory land acquisition by balancing
the rights of the landowner and the tenant and by implementing the doctrine that social justice
was not meant to perpetrate an injustice against the landowner [22]. A retained area, as its name
denotes, is land which is not supposed to anymore leave the landowners dominion, thus
sparing the government from the inconvenience of taking land only to return it to the landowner
afterwards, which would be a pointless process. Xsc
In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of
Agrarian Reform[23], we held that landowners who have not yet exercised their retention rights
under P.D. No. 27 are entitled to the new retention rights under R.A. No. 6657 [24]. We
disregarded the August 27, 1985 deadline imposed by DAR Administrative Order No. 1, series
of 1985 on landowners covered by OLT. However, if a landowner filed his application for
retention after August 27, 1985 but he had previously filed the sworn statements required by
LOI Nos. 41, 45 and 52, he is still entitled to the retention limit of seven (7) hectares under P.D.
No.27[25]. Otherwise, he is only entitled to retain five (5) hectares under R.A. No. 6657.
Sec. 6 of R.A. No. 6657, which provides, viz.:
SECTION 6. Retention Limits Except as otherwise provided in this Act, no
person may own or retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary according to factors governing
a viable family-size, such as commodity produced, terrain, infrastructure,
and soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner
exceed five (5) hectares. Three (3) hectares may be awarded to each child
of the landowner, subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the land or directly
managing the farm; Provided, That landowners whose land have been
covered by Presidential Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder, further, That original homestead
grantees or direct compulsory heirs who still own the original homestead at
the time of the approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner. Provided, however, That in
case the area selected for retention by the landowner is tenanted, the
tenant shall have the option to choose whether to remain therein or be
a beneficiary in the same or another agricultural land with similar or
comparable features. In case the tenant chooses to remain in the
retained area, he shall be considered a leaseholder and shall lose his
right to be a beneficiary under this Act. In case the tenant chooses to
be a beneficiary in another agricultural land, he loses his right as a
lease-holder to the land retained by the landowner. The tenant must
exercise this option within a period of one (1) year from the time the
landowner manifests his choice of the area for retention.
In all cases, the security of tenure of the farmers or farmworkers on the land
prior to the approval of this Act shall be respected.
Upon the effectivity of this Act, any sale, disposition, lease, management
contract or transfer of possession of private lands executed by the original
landowner in violation of this Act shall be null and void; Provided, however,
That those executed prior to this Act shall be valid only when registered with
the Register of Deeds within a period of three (3) months after the effectivity
of this Act. Thereafter, all Register of Deeds shall inform the DAR within
Page | 33
 thirty (3) days of any transaction involving agricultural lands in excess of five
(5) hectares"[26]. Sc
defines the nature and incidents of a landowners right of retention. For as long as the area to
be retained is compact or contiguous and it does not exceed the retention ceiling of five (5)
hectares, a landowners choice of the area to be retained, must prevail. Moreover,
Administrative Order No. 4, series of 1991,[27] which supplies the details for the exercise of a
landowners retention rights, likewise recognizes no limit to the prerogative of the landowner,
although he is persuaded to retain other lands instead to avoid dislocation of farmers.
Without doubt, this right of retention may be exercised over tenanted land despite even the
issuance of Certificate of Land Transfer (CLT) to farmer-beneficiaries.[28] What must be
protected, however, is the right of the tenants to opt to either stay on the land chosen to
be retained by the landowner or be a beneficiary in another agricultural land with similar
or comparable features.[29]
Finally. Land awards made pursuant to the governments agrarian reform program are subject
to the exercise by a landowner, who is so qualified, of his right of retention.
the government had no authority to issue such patent in the first place [35]. Fraud in the
issuance of the patent, is also a ground for impugning the validity of a certificate of title[36]. In
other words, the invalidity of the patent or title is sufficient basis for nullifying the certificate of
title since the latter is merely an evidence of the former.
In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland
were issued without Eudosia Daez having been accorded her right of choice as to what to
retain among her landholdings. The transfer certificates of title thus issued on the basis of
those CLTs cannot operate to defeat the right of the heirs of deceased Eudosia Daez to retain
the said 4.1685 hectares of riceland.
WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals,
dated January 28, 1998, is REVERSED and SET ASIDE and the Decision of the Office of the
President, dated July 5, 1996, is hereby REINSTATED. In the implementation of said decision,
however, the Department of Agrarian Reform is hereby ORDERED to fully accord to private
respondents their rights under Section 6 of R.A. No. 6657.
No costs. Missc

Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands. Thereafter, SO ORDERED.
they are issued Emancipation Patents (EPs) after compliance with all necessary conditions.
Such EPs, upon their presentation to the Register of Deeds, result in the issuance of the
corresponding transfer certificates of title (TCT) in favor of the beneficiaries mentioned
therein[30].

Under R.A. No. 6657, the procedure has been simplified [31]. Only Certificates of Land
Ownership Award (CLOAs) are issued, in lieu of EPs, after compliance with all prerequisites.
Thereafter, upon presentation of the CLOAs to the Register of Deeds, TCTs are issued to the
designated beneficiaries. CLTs are no longer issued.

The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from
retaining the area covered thereby. Under Administrative Order No. 2, series of 1994 [32], an EP
or CLOA may be cancelled if the land covered is later found to be part of the landowners
retained area. Scmis

A certificate of title accumulates in one document a comprehensive statement of the status of

the fee held by the owner of a parcel of land.[33] As such, it is a mere evidence of ownership
and it does not constitute the title to the land itself. It cannot confer title where no title has been
acquired by any of the means provided by law[34].

Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a
homestead patent because the land covered was not part of the public domain and as a result,

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G.R. No. 36213 June 29, 1989
FELIX GONZALES & CARMEN GONZALES, petitioners,
vs.
HON. COURT OF APPEALS, DECEASED SPOUSES ANDRES AGCAOILE & LEONORA
AGCAOILE, substituted by LUCIA A. SISON, respondents.
Tomas A. Leonardo for private respondent.
GRINO-AQUINO, J.:
The issue in this case is whether an agricultural tenancy relationship can be created over land
embraced in an approved residential subdivision. The petitioners leased a lot in the subdivision
on which they built their house, and, by tolerance of the subdivision owner, they cultivated
some vacant adjoining lots. The Court of Agrarian Relations, as well as the Court of Appeals,
ruled that "the plaintiffs are not de jure agricultural tenants." (p. 66, Rollo.) That ruling is
assailed in this appeal by certiorari.
On October 26, 1988, Lucia A. Sison filed a motion to be substituted in lieu of the private
respondents Andres Agcaoile (who died on May 20, 1976) and Leonora Agcaoile (who died on
March 22, 1979) as she inherited, and is now the registered owner of, nine (9) unsold lots in
the subdivision covered by TCT Nos. 20397 and 20398 of the Agcaoile spouses, now
registered in her name under TCT Nos. T-98.096 up to T-98.104 (pp. 117-130, Rollo).
On February 22, 1989, this Court granted her motion. The facts of this case are not disputed
and are recited in the appealed decision dated December 6, 1972 of the Court of Appeals in
CA-G.R. No. 00253-R, as follows:
Defendants spouses are the owners of two parcels of land registered in their
names under T.C.T. Nos. 20397 and 20398, with an area of 43,383 square
meters, located in Barrio Bagbaguin, Sta. Maria, Bulacan. At the time
defendants purchased the land in 1937, Maximo Cruz was the tenant who
was planting palay thereon. Maximo continued as tenant until he was
succeeded upon his death by his son, Fidel Cruz. After tenanting the land for
four years, Fidel was succeeded by Pascual Gonzales, father of plaintiff
Felix Gonzales. In 1954, Pascual ceased to be a tenant because the land
was proposed to be converted into a residential subdivision. The following
year, or on May 3, 1955, the land became an approved subdivision. It was
subdivided into twenty-six (26) residential lots.
Sometime in 1956, the plaintiffs spouses offered to pay a rental for Lot No.
1285-M of the subdivision on which they were to build a house. Defendant
Leonora Agcaoile agreed to a rental of P 20.00 a month. Plaintiffs also
offered to act as agents for the subdivision. Leonora agreed. Plaintiffs were
able to sell a lot to one Clements Bernabe, and they received the
corresponding commission of P 300.00. A number of other lots were sold by
defendants to different buyers. While plaintiffs were renting a portion of the
subdivision, they requested to be allowed to plant palay on the lots that have
not yet been sold. Leonora acquiesced because she pitied the plaintiff who
have many children. No specific agreement was concluded with regard to
the sharing of harvests, but plaintiffs delivered part of the yield to Federico
Mateo, defendants' overseer. When plaintiffs defaulted renting Lot 1285-M,
defendants sent the letter dated September 12, 1968 asking them to pay the
accrued rentals or to vacate the premises (Exh. 1). Plaintiffs countered with
an action to elect the leasedhold system of tenancy, docketed as CAR Case
No. 2169 Bulacan '68. Said case was dismissed on August 7, 1969.
On November 18, 1969, plaintiff filed the present action seeking to elect the
leasehold system and praying for a reliquidation of past harvests embracing
the agricultural years 1961-1962 to 1967-1968, inclusive. Before summons
could be served on defendants, they initiated an action against the plaintiffs
for recovery of possession, in the Court of First Instance of Bulacan, where
said action was docketed as Civil Case No. SM-329. Then defendants
answered the complaint in the present case, alleging that the property
subject of the action is residential land. On October 29, 1970, the Bulacan
CFI rendered a decision in Civil Case SM-329 favorably to the plaintiffs
therein. On May 14, 1971, the judgment subject of the present appeal was
rendered. (pp. 15-16, Rollo).
Upon the evidence, the Court of Appeals upheld the decision of the Agrarian Court. It ruled:
... Upon the evidence, it appears that in 1955 the property subject of the
action ceased to be agricultural or farmland, it having been converted as of
that year into a homesite or residential subdivision. When plaintiffs,
therefore, gained possession of a portion of the land in 1956, upon
acquiescence of defendants, they were not installed as agricultural tenants
on a piece of agricultural land. Agricultural tenancy cannot be created on
a homesite or residential subdivision. Republic Act No. 1199, invoked by the
appellants, does not apply to such property. And neither are the rights to
elect leasehold and to reliquidate the harvests assertible in respect to a
residential subdivision or homesite. (p. 16, Rollo).
Page | 35
After deliberating on the petition and arguments in the briefs of the parties, We resolved to
deny the petition for review.

There is no merit in the petitioners' argument that inasmuch as residential and commercial lots
may be considered "agricultural" (Krivenko vs. Register of Deeds, 79 Phil. 461) an agricultural
tenancy can be established on land in a residential subdivision. The Krivenko decision
interpreting the constitutional prohibition against transferring private agricultural land to
individuals, corporations, or associations not qualified to acquire or hold lands of the public
domain, save in the case of hereditary succession (Art. XIII Sec. 5, 1935 Constitution; later Art.
XIV, Sec. 14, 1973 Constitution; Art. XII, Sec. 7, 1987 Constitution) has nothing to do with
agricultural tenancy. An agricultural leasehold cannot be established on land which has ceased
to be devoted to cultivation or farming because of its conversion into a residential subdivision.

Petitioners may not invoke Section 36(l) of Republic Act No. 3844 which provides that "when
the lessor-owner fails to substantially carry out the conversion of his agricultural land into a
subdivision within one year after the dispossession of the lessee, the lessee shall be entitled to
reinstatement and damages," for the petitioners were not agricultural lessees or tenants of the
land before its conversion into a residential subdivision in 1955. Not having been dispossessed
by the conversion of the land into a residential subdivision, they may not claim a right
to reinstatement.

Furthermore, their admission that: (1) they leased from the respondents a lot (No. 1285-M) in
the subdivision on which they built their house; (2) that as commission agents for the
respondents, they were able to sell a subdivision lot to Clemente Bernabe, and received a P
300-commission on the sale; and (3) that "a number of other lots were sold by respondents to
different buyers," (p. 51, Rollo) refutes the petitioners' contention that the development of the
subdivision was a mere "scheme" to dispossess the previous tenant.

On the other hand, the petitioners' tactic of entering the subdivision as lessee of a homelot and
thereafter cultivating some unsold lots ostensibly for temporary use as a home garden, but
covertly for the purpose of later claiming the land as "tenanted" farm lots, recalls the fable of
the camel that sought shelter inside its master's tent during a storm, and once inside, kicked its
master out of the tent. Here, the private respondents' tolerance of the petitioners'
supposedly temporary use of some vacant lots in the subdivision was seized by the latter as a
weapon to deprive the respondents of their land.

WHEREFORE, finding no reversible error in the decision of the Court of Appeals, We deny the
petition for review for lack of merit.

SO ORDERED.

Page | 36
G.R. No. L-54106 February 16, 1982
LUCRECIO PATRICIO, SEGUNDO DALIGDIG, FRANCISCO DALIGDIG, FLORENCIO
ARELLANO and EPIFANIO DALIGDIG, petitioners,
vs.
ISABELO BAYOG, CONRADA, PEDRO, EMILIO, ALFONSO, DIONISIO and ARSENIO, all
surnamed MENDEZ, and COURT OF APPEALS, respondents.
AQUINO, J.:
The legal issue in this case is whether the tenants hired by the purchaser of a homestead
planted to coconuts and bananas may be ejected by the homesteader's heirs who were
allowed by the Court of Appeals to repurchase the homestead and who desire to personally
possess and till the land.
As factual background, it should be stated that in 1934 Policarpio Mendez obtained a patent
and Torrens title for a homestead with an area of about twenty-three hectares located at Sitio
Badiangon, Barrio Dalipuga, Iligan City. He and his wife, Petra Macaliag and their nine children
lived on the land, cleared it and planted coconuts thereon.
In 1956, Mendez sold the homestead to the spouses Eugenio Lamberang and Ester Fuentes.
In 1958, Mendez and his children filed an action to annul the sale. Lamberang countered with
an ejectment suit. On March 20, 1961, Mendez and his children filed an action against the
Lamberang spouses for the reconveyance of the homestead.
The three cases reached the Court of Appeals which in a decision dated January 3, 1977
ordered Lamberang to reconvey the homestead to the Mendezes "free of all liens and
encumbrances " upon their payment to Lamberang of P19,411.28 as redemption price. That
judgment became final and executory.
The Court of Appeals also held that upon the execution of the deed of reconveyance and the
delivery of the redemption price to the Lamberang spouses, the Mendezes Would be "entitled
to the possession and occupancy" of the homestead. (Mendez vs. Lamberang, Lamberang vs.
Bayug, and Mendez vs. Fuentes-Lamberang CA-G.R. Nos. 50819-81-R.)
The Mendezes paid the redemption price and the Lamberang spouses reconveyed the
homestead. Pursuant to a writ of possession, a deputy sheriff placed Isabelo Bayog, the
representative of the Mendez family in possession of the homestead after ejecting the tenants
of the Lamberang spouses named Lucrecio Patricio, Florencio Arellano, Epifanio Daligdig,
Francisco Daligdig and Segundo Daligdig, now the petitioners herein.
However, the tenants reentered the homestead allegedly upon instruction of Bernardino O.
Nuez, a trial attorney of the Bureau of Agrarian Legal Assistant. Hence, the Mendezes filed a
motion to declare them and Nuez in contempt of court.
Before that contempt incident could be resolved, or on April 10, 1979, the tenants, represented
by Nuez, filed in the Court of Agrarian Relations at Iligan City a complaint for damages
against the heirs of Policarpio Mendez named Isabelo Bayog and Conrada, Pedro, Emilio,
Alfonso, Dionisio and Arsenio, all surnamed Mendez (CAR Case No. 92), now private
respondents.
By reason of an agreement between the parties at the hearing on October 22, 1979, the said
tenants vacated the land. They are now not in possession of the land (p. 5, Rollo).
The Agrarian Court in its decision of December 12, 1979 held that the plaintiffs were "tenants
of the landholding in question" and ordered their reinstatement therein. The lower court
directed the Mendezes to pay them their "unrealized shares" in the coconuts.
The Agrarian Court concluded that the plaintiffs became the tenants of the Mendezes because
the Lamberangs, with whom they established a tenancy relationship, were not illegal
possessors of the land, having acquired it through a sale. The court said that under Section 10
of the Code of Agrarian Reform tenants are entitled to security of tenure and that under section
36 of that Code, personal cultivation by the landowner is no longer a ground for terminating
tenancy. The Agrarian Court noted that Presidential Decree No. 152 dated March 13, 1973,
which prohibits the employment or use of share tenants in complying with the requirements
regarding entry, occupation and cultivation of public lands, is not applicable to the case.
The Mendezes appealed to the Court of Appeals which on May 8, 1980 reversed the decision
of the Agrarian Court and declared that the Mendezes are "entitled to the homestead without
the gravamen of plaintiffs' tenancies" because the purpose of granting homesteads is "to
distribute disposable agricultural lots of the State to land destitute citizens for their home and
cultivation" (Pascua vs. Talens, 80 Phil. 792, 793). That policy would be defeated " if the buter
can install permanents tenants in the homestead who would even have the right of
preemption" (Patricio vs. Bayog, CA-G. R. No. 10611-CAR ).
The tenants appealed to this Court. They contend (a) that under section 118 of the Public Land
Law, share tenancy may be constituted in homestead after five years from the grant of the
patent because section 119 of the same law does not prohibit any encumbrance on the
homestead after that period and (b) that they cannot be ejected because they were not parties
in any of the cases involving the Mendezes and Lamberang.
Page | 37
This is a case where two competing interests have to be weighed against each other: the
tenant's right to security of tenure as against the right of the homesteader or his heirs to own a
piece of land for their residence and livelihood.

We hold that the more paramount and superior policy consideration is to uphold the right of the
homesteader and his heirs to own and cultivate personally the land acquired from the State
without being encumbered by tenancy relations. *

This holding is consistent with the intention of the Code of Agrarian Reform to abolish
agricultural share tenancy, "to establish owner-cultivatorship and the economic family-size
farm as the basis of Philippine agriculture and "to achieve a dignified existence for the small
farmers free from pernicious institutional restraints and practices" (Sec. 2).

WHEREFORE, the judgment of the Court of Appeals is affirmed. No costs.

SO ORDERED.

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