Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

 

G.R. No. 85041 August 5, 1993

GRACIANO BERNAS, petitioner, vs.THE HONORABLE COURT OF APPEALS and NATIVIDAD BITO-ON DEITA, respondents.

Rodriguez Dadivas for petitioner.

Orlanda Bigcas-Lumawag for private respondent.

 

PADILLA, J.:

Petitioner Graciano Bernas is before this Court assailing the decision * of the respondent appellate court dated 19 August 1988 in CA G.R. SP No. 14359 (CAR), which reversed the decision ** of the Regional Trial Court of Roxas City, Branch 18, in Civil Case No. V-5146 entitled "Natividad Bito-on Deita, et al. vs, Graciano Bernas." As disclosed by the records and the evidence of both parties, the facts involved in the controversy are as follows:

Natividad Bito-on Deita is the owner of Lots Nos. 794, 801, 840 and 848 of the Cadastral Survey of Panay, Capiz, with a total area of 5,831 square meters. Out of liberality, Natividad entrusted the lots by way of "dugo" to her brother, Benigno Bito-on, so that he could use the fruits thereof to defray the cost of financing his children's schooling in Manila. Prior to April 1978, these agricultural lots had been leased by one Anselmo Billones but following the latter's death and consequent termination of the lease, petitioner Graciano Bernas took over and worked on the land. Benigno and Bernas worked out a production-sharing arrangement whereby the first provided for all the expenses and the

second worked the land, and after harvest, the two (2) deducted said expenses and divided the balance of the harvest between the two of them. The owner, Natividad, played no part in this arrangement as she was not privy to the same.

In 1985, the lots were returned by Benigno to his sister Natividad, as all his children had by then finished their schooling. When Natividad, and her husband sought to take over possession of the lots, Bernas refused to relinquish, claiming that he was an agricultural leasehold lessee instituted on the land, by Benigno and, as such, he is entitled to security of tenure under the law.

Faced with this opposition from Bernas, Natividad filed an action with the Regional Trial Court for Recovery of Possession, Ownership and Injunction with Damages. After trial, the court a quo held in favor of the defendant (Bernas) and dismissed the complaint, ruling that from the record and the evidence presented, notably the testimony of the plaintiff's own brother Benigno, Bernas was indeed a leasehold tenant under the provisions of Republic Act No. 1199 and an agricultural leasehold lessee under Republic Act No. 3844, having been so instituted by the usufructuary of the land (Benigno). As such, according to the trial court, his tenurial rights cannot be disturbed save for causes provided by law.

Aggrieved, the plaintiff (Natividad) appealed to the Court of Appeals, contending that the "dugo" arrangement between her and her brother Benigno was not in the nature of a usufruct (as held by the court a quo), but actually a contract of commodatum. This being the case, Benigno, the bailee in the commodatum, could neither lend nor lease the properties loaned, to a third person, as such relationship (of bailor-bailee) is one of personal character. This time, her contentions were sustained, with the respondent appellate court, reversing the trial court's decision, ruling that having

only derived his rights from the usufructuary/bailee, Bernas had no better right to the property than the latter who admittedly was entrusted with the property only for a limited period. Further, according to the appellate court, there being no privity of contract between Natividad and Bernas, the former cannot be expected to be bound by or to honor the relationship or tie between Benigno and the latter (Bernas).

Hence, this petition by Bernas.

The issue for resolution by the Court is concisely stated by the respondent appellate court as follows: whether the agricultural leasehold established by Benigno Bito-on in favor of Graciano Bernas is binding upon the owner of the land, Natividad Bito-on, who disclaims any knowledge of, or participation in the same.

In ruling for the private respondent (Natividad), the respondent appellate court held that:

Indeed, no evidence has been adduced to clarify the nature of the "dugo" transaction between plaintiff and her brother Benigno Bito-on. What seems apparent is that Benigno Bito-on was gratuitously allowed to utilize the land to help him in financing the schooling of his children. Whether the transaction is one of usufruct, which right may be leased or alienated, or one of commodatum, which is purely personal in character, the beneficiary has the obligation to return the property upon the expiration of the period stipulated, or accomplishment of the purpose for, which it was constituted (Art. 612, Art. 1946, Civil Code). Accordingly, it is believed that one who derives his right from the

usufructuary/bailee, cannot refuse to return the property upon the expiration of the contract. In this case, Benigno Bito-on returned the property lent to him on May 13, 1985 to the owners, the plaintiff herein. We do not see how the defendant can have a better right to the property than Benigno Bito-on, who admittedly possessed the land for a limited period. There is no privity of contract between the owner of the land and the cultivator. 1

At this point, it is appropriate to point out that, contrary to the appreciation of the respondent appellate court, the general law on property and contracts, embodied in the Civil Code of the Philippines, finds no principal application on the present conflict. Generalibus specialia derogant. The environmental facts of the case at bar indicate that this is not a mere case of recovery of ownership or possession of property. Had this been so, then the Court would have peremptorily dismissed the present petition. The fact, however, that cultivated agricultural land is involved suffices for the Court to pause and review the legislation directly relevant and applicable at the time this controversy arose.

In this regard, it would appear that Republic Act No. 1199, invoked by the trial court, had already been rendered inoperative by the passage of Republic Act No. 3844, as amended, otherwise known as the Agricultural Land Reform Code (Code, for brevity). The former, also known as the Agricultural Tenancy Act of the Philippines and approved in August 1954 had sought to establish a system of agricultural tenancy relations between the tenant and the landholder, defining two (2) systems of agricultural tenancy: the share and the leasehold tenancy. At this point, however, further discussion of the foregoing would appear futile, for the

Code, enacted in August, 1963, had expressly declared agricultural share tenancy to be contrary to public policy and abolished the same. As for leasehold tenancy relations entered into prior to the effectivity of the Code, the rights and obligations arising therefrom were deemed to continue to exist until modified by the parties thereto in accordance with the provisions of the Code. 2 Thus, for all intents and purposes, Republic Act No. 3844 is the governing statute in the petition at bar. The pertinent provisions therefore state as follows:

Sec. 5. Establishment of Agricultural LeaseholdRelations. — The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this Code and, in other, cases, either orally or in writing, expressly or impliedly.

Sec. 6. Parties to Agricultural Leasehold Relation. — The agricultural leasehold relation shall be limited to the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same. (emphasis supplied).

Sec. 7. Tenure of Agricultural Leasehold Relation. — The Agricultural Leasehold Relation once established shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relationship is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected

therefrom unless authorized by the Court for causes herein provided. (emphasis supplied)

Sec. 8. Extinguishment of Agricultural Leasehold Relation. — The agricultural leasehold relation established under this Code shall be extinguished by:

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

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

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

xxx xxx xxx

Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. — The agricultural leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding. In case the agricultural lessor sells, alienates or transfers the legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor.

xxx xxx xxx

Sec. 36. Possession of Landholding; Exceptions. — Notwithstanding any agreement as to the period or future surrender of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that:

(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided, That the agricultural lessee shall, be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights under Sections twenty-five and thirty-four, except when the land owned and leased by the agricultural lessor is not more than five hectares, in which case instead of disturbance compensation the lessee may be entitled to an advanced notice of at least one agricultural year before ejectment proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to substantially carry out such conversion within one year after the dispossession of the

tenant, it shall be presumed that he acted in bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because of said dispossession; 3

(2) the agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the provisions of this Code unless his failure is caused by fortuitous event or force majeure:

(3) the agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed upon;

(4) the agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section twenty-nine;

(5) the land or other substantial permanent improvement thereon is substantially damaged or destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee;

(6) the agricultural lessee does not pay the lease rental when it falls due: Provided, That if the nonpayment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a rental due that particular crop year, is not thereby extinguished; or

(7) the lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty seven.

Sec. 37. Burden of Proof. — The burden of proof to show the existence of a lawful cause for the ejectment of an agricultural lessee shall rest upon the agricultural lessor.

There is no dispute, as it is admitted by the parties in this case, that Benigno Bito-on was granted possession of the property in question by reason of the liberality of his sister, Natividad (the private respondent). In short, he (Benigno) was the LEGAL POSSESSOR of the property and, as such, he had the authority and capacity to enter into an agricultural leasehold relation with Bernas. Consequently, there is no need to dwell on the contentions of the private respondent that, her brother Benigno was not a usufructuary of the property but actually a bailee in commodatum. Whatever was the true nature of his designation, he (Benigno) was the LEGAL POSSESSOR of the property and the law expressly grants him, as legal possessor, authority and capacity to institute an agricultural leasehold lessee on the property he legally possessed.

In turn, having been instituted by Benigno as an agricultural leasehold lessee, Bernas is vested by law with the rights accruing thereto, including the right to continue working the landholding until such lease is legally extinguished, and the right to be protected in his tenure i. e., not to be ejected from the land, save for the causes provided by law, and as appropriately determined by the courts. In this connection, there is no clear indication in the record that the circumstances or conditions envisioned in Section 36 of Republic Act. No. 3844, as amended, for termination of the agricultural lease relation, have supervened, and

therefore Bernas' right to the possession of the property remains indisputable. This conclusion is buttressed by Sec. 37 of the Code which provides that:

Sec. 37. Burden of Proof. — The burden of proof to show the existence of a lawful cause for the ejectment of an agricultural lessee shall rest upon the agricultural lessor.

As to any suggestion that the agricultural lease of Bernas may have terminated because the landowner (Natividad) has decided to cultivate the land herself, we submit that this Court is not in a position to settle this issue in this case, not only because of insufficient evidence to determine whether or not, the grounds provided by law for termination of the agricultural leasehold relation are present but, more importantly, because the issue of termination of the agricultural leasehold relationship by reason of the landowner's alleged decision to till the land herself, was not squarely raised nor adequately litigated in the trial court. 4 It will be noted that while Natividad in her complaint with the court a quo alleged, among others, that "on 20 May 1985, the plaintiffs spouses were already in the process of taking over the land by employing a tractor operator to commence plowing the land," this allegation was denied by Bernas in his answer. But the main thrust of Natividad's complaint was that she had no privity with Bernas and that the latter should vacate the land because Benigno (from whom Bernas had received his right to possess) had himself ceased to have any rights to the land. Faced with these allegations, the court a quo in its pre-trial order dated 9 September 1985 formulated the issues in this case, without objection from the parties, as follows:

ISSUES

1. Is defendant an agricultural leasehold lessee of the parcels of land described in the Complaint?

2. Whether the parties are entitled to damages claims by them in their respective pleadings.

In short, the parties went to trial on the merits on the basis of the foregoing issues. Private respondent did not object to the above issues as formulated; neither can it be plausibly contended now that the first issue (i.e. whether Bernas is an agricultural leasehold lessee) embraces the issue of whether Natividad has validly terminated the agricultural leasehold because of a decision to cultivate the land herself, since under sec. 36(1) of the Code (before its amendment by Section 7 of Rep. Act No. 6389), the landowner's right to take over possession of his land for personal cultivation ASSUMES that it is under a valid and subsisting agricultural leasehold and he must obtain an order from the court to dispossess the agricultural leasehold lessee who otherwise is entitled to continued use and possession of the landholding. In other words, if Natividad had really intended to raise as an issue that she had validly terminated Bernas' agricultural leasehold, she or her counsel could have expressly included among the issues for determination the question of whether or not she had complied with the requirements of the law for dispossessing the agricultural leasehold lessee because she, as landowner, had decided to personally cultivate the landholding. But she did not.

The trial court in its decision dated 20 October 1987 (latter appealed to the Court of Appeals) held (consistent with the formulated issues in the case) that —

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As to issues, parties presented only two (2) issues and which are:

1. Whether or not defendant is an agricultural leasehold lessee of the parcels of land described in the complaint;

2. Whether the parties are entitled to damages claimed by them in their respective pleadings.

(Pre-Trial Order dated September 9, 1985, p. 41 records)

and finally disposed as follows:

From the above discussions, this Court opines that defendant was a share tenant on the parcels of land subject of the complaint, and an agricultural leasehold lessee under the provisions of the Agricultural Land Reform Code as amended by Presidential Decrees on the matter.

No damages as damages were proved or established by evidence by the defendant.

WHEREFORE, and in view of the above considerations, a decision is rendered dismissing plaintiffs complaint, and declaring defendant as the agricultural leasehold lessee on Lot Nos. 794, 801, 840 and 848 of the Cadastral Survey of Panay, Capiz, with an area of 5,831 square meters, situated at Calitan, Panay, Capiz, with security of tenure as an Agricultural Leasehold Lessee thereof;

and plaintiffs to pay the costs of the suit.

In the Court of Appeals, the litigated issue was —

xxx xxx xxx

The legal issue that presents itself is whether the agricultural leasehold established by Benigno Bito-on was binding upon the owner of the land, plaintiff Natividad Bito-on, who disclaims knowledge of any arrangement with defendant Bernas. The lower court held that the "dugo" arrangement was in the nature of usufruct, and that the act of the usufructuary as legal possessor was sufficient to establish tenancy relations.

xxx xxx xxx 5

The long settled rule in this jurisdiction is that a party is not allowed to change his theory of the case or his cause of action on appeal. 6 We have previously held that "courts of justice have no jurisdiction or power to decide question not in issue" 7 and that a judgment going outside the issues and purporting to adjudicate something upon which the parties were not heard is not merely irregular, but extrajudicial and invalid. 8 The rule is based on the fundamental tenets of fair play and, in the present case, the Court is properly compelled not to go beyond the issue litigated in the court a quo and in the Court of Appeals of whether or not the petitioner, Graciano Bernas, is an agricultural leasehold lessee by virtue of his installation as such by Benigno Bito-on, the legal possessor of the landholding at the time Bernas was so installed and, consequently entitled to security of tenure on the land. Should grounds for the dispossession of Bernas, as an agricultural leasehold lessee, subsequently arise, then and only then can the private respondent

(land owner) initiate a separate action to dispossess the lessee, and in that separate action, she must allege and prove compliance with Sec. 36(1) of the Code which consist of, among others, a one year advance notice to the agricultural leasehold lessee (the land involved being less than 5 hectares) and readiness to pay him the damages required also by the Code.

The issue of whether or not Bernas planted crops or used the land in a manner contrary to what was agreed upon between Natividad and Benigno, and thereby constituting a ground for terminating the leasehold relationship under Sec. 36, par. 3 of Rep. Act No. 3844 likewise cannot be passed upon by this Court since the issue was never raised before the courts below. Furthermore, there is no showing that Natividad and Benigno agreed that only certain types of crops could be planted on the land. What is clear is, that the "dugo" arrangement was made so that Benigno could use the produce of the land to provide for the schooling of his children. The alleged conversion by Bernas of the land to riceland was made necessary for the land to produce more and thus meet the needs of Benigno. It was consistent with the purpose of making the land more productive that Benigno installed an agricultural lessee. It may be recalled that when Natividad called on Benigno to testify as a witness, he stated that the produce of the land was given to him by Bernas to defray the expenses of his children (p. 3, trial court decision). The inevitable conclusion is therefore not that there was use of the land different from the purpose for which it was allegedly intended by Natividad and Benigno but rather that the installation of the agricultural lessee was made necessary so that the land could produce more to better serve the needs of the beneficiary (Benigno).

Additionally, it can be stated that the agricultural leasehold relationship in this case was created between Benigno as agricultural lessor-legal possessor, on the one hand, and

Bernas as agricultural leasehold lessee, on the other. The agricultural leasehold relationship was not between Natividad and Bernas. As Sec. 6 of the Code states:

Sec. 6. Parties to Agricultural Leasehold Relations. — The agricultural leasehold relations shall be limited to the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same. (emphasis supplied)

There was, as admitted by all, no privity or tie between Natividad and Bernas. Therefore, even if Bernas had improperly used the lots as ricelands, it was Benigno who could have objected thereto since it was his (the legal possessor's) landholding that was being "improperly" used. But he (Benigno) did not. It is not for Natividad (as landowner) to now complain that Bernas used the land "for a purpose other than what had been previously agreed upon." Bernas had no agreement with her as to the purpose for which the land was to be used. That they were converted into ricelands (also for agricultural production) can only mean that the same (conversion) was approved by Benigno (the undisputed agricultural lessor-legal possessor). It is thus clear that sec. 36, par 3 of the Code cannot be used to eject Bernas.

The Court, must, in our view, keep in mind the policy of the State embodied in the fundamental law and in several special statutes, of promoting economic and social stability in the countryside by vesting the actual tillers and cultivators of the soil, with rights to the continued use and enjoyment of their landholdings until they are validly dispossessed in accordance with law. At this stage in the country's land reform program, the agricultural lessee's right to security of tenure must be "firmed-up"

and not negated by inferences from facts not clearly established in the record nor litigated in the courts below. Hand in hand with diffusion of ownership over agricultural lands, it is sound public policy to encourage and endorse a diffusion of agricultural land use in favor of the actual tillers and cultivators of the soil. It is one effective way in the development of a strong and independent middle-class in society.

In confirmation we believe of the foregoing views, Section 36 of Rep. Act No. 3844 (the Code) was expressly amended by Section 7 of Rep. Act No. 6389 which replaced paragraph 1, Section 36 of the Code providing for personal cultivation by the landowner as a ground for ejectment or dispossession of the agricultural leasehold lessee with the following provision:

Sec. 7. Section 36 (1) of the same Code is hereby amended to read as follows:

(1) The landholding is declared by the department head upon recommendation of the National Planning Commission to be suited for residential, commercial, industrial or some other urban purposes: Provided, That the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the average of the gross harvest of his landholding during the last five preceding calendar years;

While it is true that in the case of Ancheta vs. Court of Appeals, 200 SCRA 407, the Court, stated that:

It is well settled that RA 6389, which removed personal cultivation as a ground for ejectment of tenant/lessee, cannot be given retroactive effect in

the absence of statutory provision for retroactivity or a clear implication of the law to that effect.

however, Rep. Act No. 6389 was approved on 10 September 1971. 9

The complaint in this case was filed on 21 June 1985 or long after the approval of Rep. Act No. 6389. By reason of the provision therein eliminating personal cultivation by the landowner as a ground for ejectment or dispossession of the agricultural leasehold lessee, any issue of whether or not the Court of Appeals decision should nonetheless be affirmed because the landowner had shown her intention or decided to personally cultivate the land (assuming without admitting that the issue was properly raised before the trial court), had in fact become moot and academic (even before it was hypothetically raised). The issued had been resolved by legislation unmistakably against the landowner.

It may of course he argued that "she (Natividad) did not authorize her brother (Benigno) to install a tenant thereon." (TSN, 13 February 1986, p. 6).

Even if there was a lack of authorization (from Natividad) for Benigno to install a tenant, it still follows, in our view, that Benigno as legal possessor of the landholding, could install an agricultural lessee on the landholding. For, as defined in Section 166 (3) of the Code, an agricultural lessor is a natural or juridical person who, either as owner, civil law lessee, usufructuary or legal possessor lets or grants to another the cultivation and use of his land for a price certain. Nothing in said section, it will be noted, requires that the civil law lessee, usufructuary or legal possessor should have the prior authorization of the landowner in order to let or grant to another the cultivation or use of the landholding.

Another question comes up; did Natividad expressly prohibit Benigno from installing a tenant on the land?

Nothing in the evidence shows that Benigno was expressly prohibited by Natividad from installing a tenant on the landholding. And even if there was an express prohibition on the part of Natividad (landowner) for Benigno not to install an agricultural leasehold lessee, it is to be noted that any such arrangement (prohibition) was solely between Natividad and Benigno. There is no evidence to show that Bernas was aware or informed of any such arrangement between Natividad and Benigno. Neither was such arrangement (prohibition), if any, recorded in the registry of deeds to serve as notice to third persons (as Bernas) and to the whole world for that matter. Consequently, if there was indeed such a prohibition (which is not borne out by the records) imposed by Natividad on Benigno, a violation thereof may give rise to a cause of action for Natividad against Benigno but Bernas is no less an agricultural leasehold lessee, for the law (Section 166 (2) of the Code) defines an agricultural lessee as a person who by himself and with the help available from within his immediate farm household cultivates the land belonging to or possessed by another (in this case Benigno) with the latter's consent for purposes of production for a price certain in money or in produce or both.

Ponce vs. Guevarra, L-19629 and L-19672-92, 31 March 1954 (10 SCRA 649) provides dramatic support to the security of tenure of Bernas in the case at bar. In the Ponce case, the owner (Ponce) had leased his agricultural land to Donato (the lessee) for a stipulated period with a provision in the lease contract prohibiting Donato from sub-leasing the land without the written consent of the owner (Ponce). Notwithstanding these "express prohibition", Donato sub-leased the land without the consent of Ponce (the owner). When the lease contract expired, Donato returned the land to Ponce but the sub-lessees (tenants) refused to vacate, claiming security of' tenure under the tenancy laws then enforced. One of the contentions of Ponce (the

owner) in seeking to dispossess the sub-lessees (tenants) was that these tenants entered into possession of the land under a violation of the lease contract by Donato (the lessee).

Over-ruling the above contention, this Court held:

It is true that the subleasing of said land to respondents herein (tenants) without the written consent of the petitioner (owner), constituted a violation of the original contract of lease. The breach of contract was committed, however, by Donato (the lessee), . . . .

Of course, in the same Ponce case, the Court observed that Ponce renewed his lease contract for another year with Donato, knowing at the time of such renewal that the land had been sub-leased to the tenants, thereby injecting the principle of estoppel against Ponce vis-a-vis the tenants. But, as we view it, the ratio decidendi in the Court's decision is to the effect that the sub-lessees (tenants) were entitled to security of tenure on the land they were cultivating, notwithstanding the undisputed fact that they became sub-lessees (tenants) of the land as a result of a violation by the lessee (Donato) of an express provision in the lease contract prohibiting him from sub-leasing the land.

What more in the case of Bernas whose right to security of tenure as an agricultural leasehold lessee is conferred and protected categorically, positively and clearly by the provisions of the Code (Republic Act. 3844)?

It is of course possible to construe Sec. 6 of the Code which provides:

SEC 6. Parties to Agricultural Leasehold Relations. — The agricultural leasehold relation shall be limited to the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same. (emphasis supplied).

in the following manner:

. . . it assumes that there is already an existing agricultural leasehold relation, i.e. a tenant or agricultural lessee already works the land. As may be gleaned from the epigraph of Sec. 6, it merely states who are "Parties to Agricultural Leasehold Relations," which means that there is already a leasehold tenant on the land. But this is precisely what We are still asked to determine in these proceedings. (dissenting opinion, p. 11.)

It would appear from the above interpretation of Sec. 6 of the Code that in the absence of a judicial determination or declaration of an agricultural leasehold relation, such relation does not or cannot even exist. We view this posture as incorrect for an agricultural leasehold relationship exists by operation of law when there is a concurrence of an agricultural lessor and an agricultural lessee. As clearly stated in Section 5 of the code.

Sec. 5. Establishment of Agricultural Leasehold Relations. — The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this Code and, in other cases, either

orally or in writing, expressly or impliedly.

In other words, in the case at bar, from the moment Benigno, as legal possessor (and, therefore, an agricultural lessor) granted this cultivation and use of the landholding to Bernas in exchange or consideration for a sharing in the harvest, an agricultural leasehold relationship emerged between them "by operation of law".

The fact that the transfer from Natividad to Benigno was gratuitous, we believe, is of no consequence as far as the nature and status of Benigno's possession of the landholding is concerned. He became the legal possessor thereof from the viewpoint of the Code. And as legal possessor, he had the right and authority, also under the Code, to install or institute an agricultural leasehold lessee on his landholding, which was exactly what he did, i.e. install Bernas as an agricultural leasehold lessee.

The argument that Benigno's (and consequently, Bernas') possession was meant to last for a limited period only, may appeal to logic, but it finds no support in the Code which has its own underlying public policy to promote. For Section 7 of the Code provides:

Sec. 7. Tenure of Agricultural Leasehold Relation. — The Agricultural Leasehold Relation once established shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relationship is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized herein-

provided. (emphasis supplied)

while Section 10 of the Code provides:

Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. — The agricultural leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding. In case the agricultural lessor. sells, alienates or transfers the legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor. (emphasis supplied).

and Section 36 of the Code provides:

Possession of Landholding; Exceptions. — Notwithstanding any agreement as to the period or future surrender of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding . . . . (emphasis supplied)

Clearly the return of legal possession from Benigno to Natividad cannot prejudice the rights of Bernas as an agricultural leasehold lessee. The grounds for ejectment of an agricultural leasehold lessee are provided for by law. The enumeration is exclusive and no other grounds can justify termination of the lease. The policy and letter of the law are clear on this point. The relatively small area of the agricultural landholding

involved (a little over half a hectare) would appear, in our view, to be of no consequence in this case. Here, the issue is not how much area may be retained in ownership by the land owner Natividad but the issue is whether Bernas is a duly constituted agricultural leasehold lessee of the agricultural landholding (regardless of its area) and entitled to security of tenure therein. And, as abundantly shown, the Code is definitely and clearly on his side of this issue.

It should be pointed out that the report and recommendation of the investigating officer of the Ministry of Agrarian Reform (MAR) finding that Bernas is not an agricultural leasehold should deserve little consideration. It should be stressed, in this connection, that said report and recommendation is congenitally defective because —

a. it was based solely on the evidence presented by Natividad, Bernas did not participate in said investigation.

b. the findings in the report are not supported by law or jurisprudence but are merely the opinion and conclusions of the investigator whose knowledge of the Code and the case Law appears to be sadly inadequate.

c. whether or not an agricultural leasehold relation exists in any case is basically a question of law and cannot be left to the determination or opinion of a MAR-investigator on the basis of one-sided evidence.

This Court has ruled in Qua v. Court of Appeals, 198 SCRA 236 that —

. . . as regards relations between litigants in land cases, the findings and conclusions of the Secretary of Agrarian Reform, being preliminary in nature, are not in any way binding on the trial courts which must endeavor to arrive at their own independent conclusions.

The ruling finds support in the case of Graza v. CA (163 SCRA 39) citing Section 12 of PD No. 946 expressly stating that "the preliminary determination of the relationship between the contending parties by the Secretary of Agrarian Reform or his authorized representative, is not binding upon the court, judge or hearing officer to whom the case is certified as a proper case for trial. Said court, judge or hearing officer, after hearing, may confirm, reverse or modify said preliminary determination as the evidence and substantial merits of the case may warrant." The court a quo in the case at bar tried the case on the merits, receiving the evidence of both parties and arrived at a conclusion different from that of the MAR investigator. It is to be noted that even the Court of Appeals (which decided for Natividad) found no use for the MAR investigator's report and recommendation, for obvious reasons. It is clear that the question of the existence of an agricultural leasehold relationship is a question of law which is properly within the province of the courts.

The certification of the President of the Agrarian Reform Beneficiaries Association, Panay chapter "issued upon the request of Mrs. Deita" (meaning Natividad) that Bernas is not in the masterlist of tenants, should likewise be disregarded. Since when, it may be noted, was the legal question of agricultural leasehold relationship made to depend on a certification of such an association's president?

The argument, that Bernas is not a lawful tenant of Natividad based on the doctrine in the case of Lastimoza v. Blanco (1 SCRA 231) is also not correct. The cited case does not support the desired conclusion. In the Lastimoza case, a certain Nestor Panada had an oral contract of tenancy with a certain Gallego who

was then in possession of the parcel of land. The latter however was ejected after the Court of First Instance ruled in a land registration proceeding that it was Lastimoza who was the true owner of the land. The Court in effect ruled that Gallego was an unlawful possessor and thus Panada cannot be a lawful tenant. The factual background of the Lastimoza case and the present Bernas case are totally different; the first case cannot be applied to the second. When Bernas was instituted by Benigno as an agricultural lessee, Benigno was a legal possessor of the landholding in question. No one can dispute this.

The dissenting opinion states that ". . . it is not correct to say that every legal possessor, be he a usufructuary, or a bailee, is authorized as a matter of right to employ a tenant. His possession can be limited by agreement of the parties or by operation of law." (p. 13) Even assuming arguendo that this is a correct legal statement, there is absolutely no showing that the possession of Benigno was limited by his agreement with Natividad (as to prohibit him from instituting a tenant) or by operation of law; and because there is a total failure to disprove and even dispute that Benigno was a legal possessor at the time Bernas was installed by him as an agricultural lessee, then Bernas validly became an agricultural leasehold lessee of the land and is protected by the law from ejectment except for causes specified therein.

Finally, in relation to the dissenting opinion, it may be wise to repeat the statement of the Court in Jose D. Lina, Jr. vs. Isidro Cariño (G.R. No. 100127, 23 April 1993) thus —

The Court believes that petitioner's argument — cogent though it may be as a social and economic comment — is most appropriately addressed, not to a court which must take the law as it is actually written, but rather

to the legislative authority which can, if it wishes, change the language and content of the law. (emphasis supplied)

In the case at bar, the language, policy and intent of the law are clear; this Court cannot interpose its own views as to alter them. That would be judicial legislation.

WHEREFORE the petition is GRANTED. The decision of the respondent appellate court, is REVERSED and SET ASIDE and that of the Regional Trial Court. REINSTATED. Costs against the private respondent.

SO ORDERED.

Cruz, Bidin, Griño-Aquino, Regalado, Romero, Nocon and Quiason, JJ., concur.

Puno and Vitug, JJ. took no part.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

 

G.R. No. 98028 January 27, 1992

GREGORIO CASTILLO, petitioner, vs.COURT OF APPEALS and ALBERTO IGNACIO, respondents.

Sumulong Law Offices for petitioner.

Bureau of Agrarian Legal Assistance for private respondent.

 

GUTIERREZ, JR., J.:

This is a petition for review of the Court of Appeals decision which reversed and set aside the decision of the Regional Trial Court in Civil Case No. 8302-M and declared respondent Alberto Ignacio as agricultural tenant of the petitioner.

On July 18, 1985, a complaint for injunction was filed by private respondent Alberto Ignacio against petitioner Gregorio Castillo with the Regional Trial Court of Malolos, Bulacan.

It is alleged in the complaint that the respondent is the agricultural tenant of the petitioner in the latter's parcel of land consisting of 9,920 square meters with fruit-bearing trees situated in Cut-cut, Pulilan, Bulacan; that sometime in April 1985, the

petitioner requested the respondent to allow him to construct a resthouse in said land, and as a token of goodwill, the respondent agreed, which agreement is embodied in a "Kasunduan" (Exhibit "C") between them; that in violation of said agreement, the petitioner started to cut fruit-bearing trees on the land in question and filled with adobe stones the area devoted by the private respondent to the planting of vegetables.

The complaint asked for the issuance of a writ of preliminary injunction to enjoin the petitioner from further cutting fruit-bearing trees and from committing further acts of dispossession against the private respondent. The injunction was granted.

The petitioner, on the other hand, contends that the private respondent is not his agricultural tenant; that respondent Alberto Ignacio is merely a "magsisiga" (smudger) of the landholding in question; that he did not ask permission from the private respondent to construct a rest house on subject land, since as owner thereof, he had the right to do so; that he was merely exercising his right of ownership when he cut certain trees in the subject premises; that when the barangay captain failed to settle the conflict and the matter was referred to the MAR-BALA (Ministry of Agrarian Reform-Bureau of Agrarian Legal Assistance) Office in Malolos, Bulacan, Atty. Benjamin Yambao of the MAR (Ministry of Agrarian Reform) prepared the "Kasunduan" attached to the respondent's complaint, but when he (petitioner) said that he had some misgivings about some words therein, Atty. Yambao assured him that he need not worry because the respondent could not be a "kasamang magsasaka" of his mango land because there is nothing to cultivate or till in said land, but he still corrected the last part of par. 4 of said "Kasunduan" by making it read "sa kanilang matiwasay na kaugnayan" before signing the same.

On September 28, 1988, the trial court rendered judgment declaring that no tenancy relationship exists between the petitioner and the private respondent. The dispositive portion of the decision reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered:

a) dismissing the above-entitled case, with costs against the plaintiff;

b) lifting the preliminary injunction issued on September 18, 1985 and declaring the same legally inefficacious henceforth; and

c) directing the plaintiff no pay unto the defendant the amount of P10,000.00 as and for attorney's fees.

From the above decision, the private respondent appealed to the Court of Appeals which reversed and set aside the decision of the trial court. The respondent appellate court declared that there exists a tenancy relationship between Alberto Ignacio and Gregorio Castillo and permanently enjoined the latter from disturbing the respondent's peaceful possession as tenant of said land.

Hence, the instant petition was filed, with the petitioner assigning the following errors as the issues raised to us:

I

The Court of Appeals (Fourth Division) committed clear and patent error in reversing the decision of the Regional Trial Court which is fully supported not only by substantial evidence but by overwhelming evidence.

II

The Court of Appeals committed clear and reversible error and grave abuse of discretion in declaring that "the relationship between plaintiff-appellant and defendant-appellee over the mango land in question as one of agricultural tenancy" despite the patent judicial admission of respondent Ignacio that he is merely a "magsisiga" of the mango land under litigation.

III

The Court of Appeals committed grave abuse of discretion in permanently enjoining petitioner "from disturbing plaintiff-appellant's peaceful possession as tenant of said land," although private respondent is not in physical possession of the land, respondent Ignacio being merely and admittedly a "magsisiga" of the mango land in question.

IV

The Court of Appeals committed clear and patent error in not ordering the termination of any and all relationships between petitioner and private respondent, the latter having failed to perform the work of "magsisiga" on the subject parcel of land and instead he obstructs the driveway by scattering rubbish, dry leaves, dirt and other rubbish, preventing the petitioner from proceeding to the premises of the land by putting up a barb wire fence which are acts of harrassment, disturbing

the peaceful possession of petitioner and which acts are inimical to the continuation of any kind of relationship between Gregorio Castillo and Alberto Ignacio.

The issue to be resolved in the present petition is whether or not a tenancy relationship exists between the parties.

The Agricultural Tenancy Act defines "agricultural tenancy" as —

. . . the physical possession by a person of a land devoted to agriculture belonging to or legally possessed by, another for the purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price certain, either in produce or in money, or in both. (Sec. 3, R.A. No. 1199; 50 O.G. 4655-56).

As held in the case of Qua v. Court of Appeals (198 SCRA 236 [1991]), the essential requisites of tenancy relationship are: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) the purpose is agricultural production; (4) there is consideration which consist of sharing the harvest; (5) there is consent to the tenant to work on the land and (6) there is personal cultivation by him.

From the foregoing definition, the petitioner insists that for a person to claim tenancy relationship, he must be an occupant or must be in physical possession of the agricultural land. He alleges that, Alberto Ignacio, being a mere smudger (magsisiga) of the mango land, no tenancy relationship

can exist between them absent the element of physical possession.

In Gagola v. Court of Agrarian Relations (18 SCRA 992 [1966]), the Court held that a tenant has possession of the land only through personal cultivation. Thus, in the instant case, the key factor in ascertaining the existence of a landowner-tenant relationship is whether or not there is personal cultivation of the land by the private respondent.

The trial court noted that:

Let alone or notwithstanding the use of the phrase "kasamang magsasaka" in the Kasunduan (Exhibit C) relied upon by the plaintiff, there is no dispute that the actual role ever played by the plaintiff vis-a-vis the land in litigation was that of a mere "magsisiga" (smudger). Stated differently, plaintiff has never performed on the property in question any of the acts of cultivation contemplated by the law as essential to the creation of an agricultural tenancy relationship. In fine, it is the sense of the Court that absent the important factor of cultivation, no tenancy relationship has ever existed between the plaintiff and the defendant over the property involved in the instant case. At most and at best, the contractual relationship between them was purely civil nature consisting solely of the seasonal engagement of plaintiff's services as "magsisiga" or "taga-suob."

On this matter, the appellate court disagreed and noted instead that

personal cultivation by respondent Ignacio of petitioner land is clearly spelled out or admitted in the "Kasunduan" (Exhibit "C") in view of the aforementioned provision therein that nobody except petitioner and the members of his family could enter said land without said petitioner's written permission.

We agree with the trial court that the element of personal cultivation is absent. The main thrust of the petitioner's argument is that the respondent Court of Appeals is mandated by law to affirm the decision of the Regional Trial Court, acting as an Agrarian Court, if the findings of fact in said decision are supported by substantial evidence and the conclusions stated therein are not clearly against the law and jurisprudence. On the other hand, the private respondent contends that the findings of fact of the Court of Appeals are final and conclusive on the parties and on the Supreme Court.

After painstakingly going over the records of the petition, we find no strong and cogent reason which justifies the appellate court's deviation from the findings and conclusions of the trial court. As pointed out in Hernandez v. Intermediate Appellate Court (189 SCRA 758 [1990]), in agrarian cases, all that is required is mere substantial evidence. Hence, the agrarian court's findings of fact which went beyond the minimum evidentiary support demanded by law, that is supported by substantial evidence, are final and conclusive and cannot be reversed by the appellate tribunal.

Moreover, and as significantly held in Qua v. Court of Appeals (supra), the fact that the source of livelihood of the private respondents is not derived from the lots they are allegedly tenanting is indicative of non-agricultural tenancy relationship.

Under the facts obtaining in the case, respondent Ignacio is a businessman by occupation and this is his principal source of income. He manufacturers

hollow blocks. He also has a piggery and poultry farm as well as a hardware store on the land adjoining the subject land. To add to that, the respondent farms the riceland of one Dr. Luis Santos. It is thus evident that the working hours of the respondent as a businessman and his other activities do not permit him to undertake the work and obligations of a real tenant. This is further supported by the undisputed fact that the respondent cannot even personally perform the work of a smudger because on October 22, 1986, the respondent hired some 20 people who are not members of his family to cut and burn the grass in the premises of the subject land.

Anent the element of consent, the petitioner contends that the best evidence and imperishable proof of the relationship of the parties is that shown in the complaint filed by private respondent with the barangay captain Tomas Mercado that he is a mere "magsisiga" of the mango trees on the subject parcel of land. On the other hand, the respondent appellate court said that the best proof of the existence of tenancy relationship is the "Kasunduan" (Exhibit "C") and that under Section 7, Rule 130 of the Revised Rules of Court, 'when the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself,' subject only to certain exceptions. Inasmuch as substantial evidence does not only require the presence of a mere scintilla of evidence (Berenguer, Jr. v. CA, 164 SCRA 433 [1988] citing Ang Tibay v. Court of Industrial Relations, 69 Phil. 635 [1940]), we rule that there is no concrete evidence on record sufficient to establish that the element of consent is present. But even assuming arguendo that the element of consent is present, we declared in De los Reyes v. Espineli (30 SCRA 574 [1969]) that absent the element of personal cultivation, one cannot be a tenant even if he is so designated in the written agreement of the parties.

With respect to the requisite of sharing the harvests, the respondent appellate court considered the receipt (Exhibit "E") signed by the petitioner's son Walderado Castillo as its evidence. On this point, the petitioner has correctly argued that the receipt is inadmissible on the ground that he did not participate in its execution.

The maxim "res inter alios acta altere nocere non debet," found in Section 28, Rule 130, Rules of Court applies, for as stated in Gevero v. Intermediate Appellant Court (189 SCRA 201 [1990]) the right of a party cannot be prejudiced by an act, declaration, or omission of another.

Also in pari materia is Caballes v. Department of Agrarian Reform (168 SCRA 247 [1988]), that the fact of sharing alone is not sufficient to establish a tenancy relationship. Well-settled is the rule that all the requisites must concur in order to create a tenancy relationship between the parties and the absence of one or more requisites do not make the alleged tenant a de facto tenant as contradistinguished from a de jure tenant. This is so because unless a person has established his status as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws. (Qua v. Court of Appeals, supra citing Tiongson v. Court of Appeals, 130 SCRA 482 [1984]).

However, with respect to the award of attorney's fees by the trial court, the award of P10,000.00 is unwarranted since the action appears to have been filed in good faith. There should be no penalty on the right to litigate. (Ilocos Norte Electric Company v. Court of Appeals, 179 SCRA 5 [1989] citing Espiritu v. Court of Appeals, 137 SCRA 50 [1985]).

WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals is hereby REVERSED and SET ASIDE and the decision of the Regional Trial Court is REINSTATED

with the MODIFICATION that the award of attorney's fees is DELETED.

SO ORDERED.

Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

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

SPOUSES CAYETANO and PATRICIA TIONGSON, SPOUSES EDWARD and PACITA GO, SPOUSES ROBERTO and MYRNA LAPERAL III, ELISA R. MANOTOK, SPOUSES IGNACIO and PACITA MANOTOK, SEVERINO MANOTOK, JR., SPOUSES FAUSTO and MILAGROS MANOTOK, ROSA R. MANOTOK, Minors MIGUEL A. B. SISON and MA. CRISTINA E. SISON, represented by their judicial guardian FILOMENA M. SISON, SPOUSES MAMERTO and PERPETUA M. BOCANEGRA, GEORGE M. BOCANEGRA, represented by his judicial guardian MAMERTO BOCANEGRA, SPOUSES FRANCISCO and FILOMENA SISON, JOSE CLEMENTE MANOTOK, SPOUSES JESUS and THELMA MANOTOK, Minors PHILIP MANOTOK, MARIA TERESA MANOTOK and RAMON SEVERINO MANOTOK, represented by their judicial guardian SEVERINO MANOTOK, JR., Minors JESUS JUDE MANOTOK, JR. and JOSE MARIA MANOTOK, represented by their judicial guardian JESUS MANOTOK, petitioners, vs.HONORABLE COURT OF APPEALS and TEODORO S. MACAYA, respondents.

Romeo J. Callejo and Gil Venerando R. Racho for petitioners.

David Advincula Jr. and Jose J. Francisco for respondents.

 

GUTIERREZ, JR., J.:

In this petition for review on certiorari of the decision of the Court of, Appeal declaring the existence of a landholder-tenant relationship and

ordering the private respondent's reinstatement, the petitioners contend that the appellate court committed an error of law in:

1. Disregarding the findings of fact of the Court of Agrarian Relations which are supported by substantial evidence; and

2. Substituting the findings of fact of the Court of Agrarian Relations with its own findings.

Briefly, the facts of the case as found by the Court of Agrarian Relations, Seventh Regional District, Branch 1 at Pasig, Metro Manila are as follows: Sometime in 1946, the late Severino Manotok donated and transferred to his eight (8) children and two (2) grandchildren namely: Purificacion Manotok, Eliza Manotok, Perpetua manotok, Filomena Manotok, Severino Manotok, Jr., Jesus Manotok, Rahula Ignacio Manotok, Severino Manotok III, Fausto Manotok and Rosa Manotok, a thirty-four-hectare lot located in Payong, Old Balara, Quezon City covered by a certificate of title. Severino Manotok who was appointed judicial guardian of his minor children 'accepted on their behalf the aforesaid donation. At that time, there were no tenants or other persons occupying the said property.

In that same year, Teodoro Macaya accompanied by Vicente Herrera, the overseer of the property, went to the house of Manotok in Manila and pleaded that he be allowed to live on the Balara property so that he could at the same time guard the property and prevent the entry of squatters and the theft of the fruits and produce of the fruit trees planted by the owner. Manotok allowed Macaya to stay in the property as a guard (bantay) but imposed the conditions that at any time that the owners of the property needed or wanted to take over the property, Macaya and his family should vacate the property

immediately; that while he could raise animals and plant on the property, he could do so only for his personal needs; that he alone could plant and raise animals on the property; and that the owners would have no responsibility or liability for said activities of Macaya. Macaya was allowed to use only three (3) hectares. These conditions, however, were not put in writing.

On December 5, 1950, the property-owners organized themselves into a corporation engaged primarily in the real estate business known as the Manotok Realty, Inc. The owners transferred the 34-hectare lot to the corporation as part of their capital contribution or subscription to the capital stock of the corporation.

From 1946 to 1956, Macaya did not pay, as he was not required to pay anything to the owners or corporation whether in cash or in kind for his occupancy or use of the property. However, the corporation noted that the realty taxes on the property had increased considerably and found it very burdensome to pay the said taxes while on the other hand, Macaya had contributed nothing nor even helped in the payment of the taxes. Thus, Macaya upon the request of the owners agreed to help by remitting ten (10) cavans of palay every year as his contribution for the payment of the realty taxes beginning 1957.

On June 5, 1964, the corporation requested Macaya to increase his contribution from ten (10) cavans to twenty (20) cavans of palay effective 1963 because the assessed value of the property had increased considerably. Macaya] agreed.

In 1967, Macaya informed the corporation that he could not afford anymore to deliver any palay because the palay dried up. He further requested that in the ensuring years, he be allowed to contribute only ten (10) cavans of palay. The corporation said that if that was the case, he might as well not deliver anymore.

Thus, from 1967 up to 1976, Macaya did not deliver any palay.

On January 31, 1974, Manotok Realty, Inc. executed a "Unilateral Deed of Conveyance" of the property in favor of Patricia Tiongson, Pacita Go, Roberto Laperal III, Elisa Manotok, Rosa Manotok, Perpetua M. Bocanegra, Filomena M. Sison, Severino Manotok, Jr., Jesus Manotok, Ignacio S. Manotok, Severino Manotok III and Fausto Manotok.

Sometime in 1974, Macaya was informed by the Manotoks that they needed the property to construct their houses thereon. Macaya agreed but pleaded that he be allowed to harvest first the planted rice before vacating the property.

However, he did not vacate the property as verbally promised and instead expanded the area he was working on.

In 1976, the Manotoks once more told Macaya to vacate the entire property including those portions tilled by him. At this point, Macaya had increased his area from three (3) hectares to six (6) hectares without the knowledge and consent of the owners. As he was being compelled to vacate the property, Macaya brought the matter to the Department (now Ministry) of Agrarian Reforms. The Manotoks, during the conference before the officials of the Department insisted that Macaya and his family vacate the property. They threatened to bulldoze Macaya's landholding including his house, thus prompting Macaya to file an action for peaceful possession, injunction, and damages with preliminary injunction before the Court of Agrarian Relations.

The sole issue to be resolved in the present petition is whether or not a tenancy relationship exists between the parties. The Court of Agrarian Relations found that Macaya is not and has never been a share or leasehold tenant of Severino Manotok nor of his successors-in-interest over the property or any portion or portions

thereof but has only been hired as a watchman or guard (bantay) over the same. On Macaya's appeal from the said decision, the respondent appellate court declared the existence of an agricultural tenancy relationship and ordered Macaya's reinstatement to his landholding.

Since what is involved ed is agricultural tenancy, we refer to Republic Act No. 1199 as amended by Republic Act No. 2263. Section 3 thereof defines agricultural tenancy as:

xxx xxx xxx

... the physical possession by a person of land devoted to agriculture belonging to, or legally possessed by, another for the purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price certain, either in produce or in money, or in both.

Thus, the essential requisites of tenancy relationship are: 1) the parties are the landholder and the tenant; 2) the subject is agricultural land; 3) there is consent; 4) the purpose is agricultural production; and 5) there is consideration (Agustin, Code of Agrarian Reforms of the Philippines, 1981, p. 19). As

xxx xxx xxx

All these requisites are necessary in order to create tenancy relationship between the parties and the absence of one or more requisites do not make the alleged tenant a de facto tenant, as contra-distinguished from a de jure tenant, This is so because unless a

person has established his status as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws. ...

The key factor in ascertaining whether or not there is a landowner-tenant relationship in this case is the nature of the disputed property.

Is the thirty-four (34) hectare lot, of which the six (6) hectares occupied by the private respondent form a part, against agricultural land? If not, the rules on agrarian reform do not apply.

From the year 1948 up to the present, the tax declarations of real property and the annual receipts for real estate taxes paid have always classified the land as "residential". The property is in Balara, Quezon City, Metro Manila, not far from the correctly held by the trial court:

University of the Philippines and near some fast growing residential subdivisions. The Manotok family is engaged in the business of developing subdivisions in Metro Manila, not in farming.

The trial court observed that a panoramic view of the property shows that the entire 34 hectares is rolling forestal land without any flat portions except the small area which could be planted to palay. The photographs of the disputed area show that flush to the plantings of the private respondent are adobe walls separating expensive looking houses and residential lots from the palay and newly plowed soil. Alongside the plowed or narrowed soil are concrete culverts for the drainage of residential subdivisions. The much bigger portions of the property are not suitable for palay or even vegetable crops.

The trial court noted that in a letter dated April 12, 1977, the City Engineer of Quezon City certified on

the basis of records in his office that the property in question falls within the category of "Residential I Zone."

The respondent court ignored all the above considerations and noted instead that the appellees never presented the tax declarations for the previous year, particularly for 1946, the year when Macaya began cultivating the property. It held that while the petitioners at that time might have envisioned a panoramic residential area of the disputed property, then cogonal with some forest, that vision could not materialize due to the snail pace of urban development to the peripheral areas of Quezon City where the disputed property is also located and pending the consequent rise of land values. As a matter of fact, it found that the houses found thereon were constructed only in the 70's.

Whatever "visions" the owners may have had in 1946, the fact remains that the land has always been officially classified as "residential" since 1948. The areas surrounding the disputed six hectares are now dotted with residences and, apparently, only this case has kept the property in question from being developed together with the rest of the lot to which it belongs. The fact that a caretaker plants rice or corn on a residential lot in the middle of a residential subdivision in the heart of a metropolitan area cannot by any strained interpretation of law convert it into agricultural land and subject it to the agrarian reform program.

On this score alone, the decision of the respondent court deserves to be reversed.

Another requisite is that the parties must be landholder and tenant. Rep. Act No. 11 99 as amended defines a landholder —

Sec. 5(b) A landholder shall mean a person, natural or juridical, who, either as owner, lessee, usufructuary, or legal

possessor, lets or grants to another the use or cultivation of his land for a consideration either in shares under the share tenancy system, or a price certain under the leasehold tenancy system.

On the other hand, a tenant is defined as —

Sec. 5(a) A tenant shall mean a person who, himself and with the aid available from within his immediate farm household, cultivates the land belonging to, or possessed by, another with the latter's consent for purposes of production, sharing the produce with the landholder under the share tenancy system or paying to the landholder a price certain in produce or in money or both, under the leasehold tenancy system.

Under these definitions, may Macaya be considered as a tenant and Manotok as a landholder? Significant, as the trial court noted, is that the parties have not agreed as to their contributions of the several items of productions such as expenses for transplanting, fertilizers, weeding and application of insecticides, etc. In the absence of an agreement as to the respective contributions of the parties or other terms and conditions of their tenancy agreement, the lower court concluded that no tenancy relationship was entered into between them as tenant and landholder.

On this matter, the respondent Appellate Court disagreed. It held that:

... Whether the appellant was instituted as tenant therein or as bantay, as the appellees preferred to call him, the inevitable

fact is that appellant cleared, cultivated and developed the once unproductive and Idle property for agricultural production. Appellant and Don Severino have agreed and followed a system of sharing the produce of the land whereby, the former takes care of all expenses for cultivation and production, and the latter is only entitled to 10 cavans of rice per harvest. This is the essense of leasehold tenancy.

It should be noted, however, that from 1967 to the present, Macaya did not deliver any cavans of palay to the petitioners as the latter felt that if Macaya could no longer deliver the twenty (20) cavans of palay, he might as well not deliver any. The decision of the petitioners not to ask for anymore contributions from Macaya reveals that there was no tenancy relationship ever agreed upon by the parties. Neither can such relationship be implied from the facts as there was no agreed system of sharing the produce of the property. Moreover, from 1946 to 1956 at which time, Macaya was also planting rice, there was no payment whatsoever. At the most and during the limited period when it was in force, the arrangement was a civil lease where the lessee for a fixed price leases the property while the lessor has no responsibility whatsoever for the problems of production and enters into no agreement as to the sharing of the costs of fertilizers, irrigation, seedlings, and other items. The private respondent, however, has long stopped in paying the annual rents and violated the agreement when he expanded the area he was allowed to use. Moreover, the duration of the temporary arrangement had expired by its very terms.

Going over the third requisite which is consent, the trial court observed that the property in question previous to 1946 had never been tenanted.

During that year, Vicente Herrera was the overseer. Under these circumstances, coupled by the fact that the land is forested and rolling, the lower court could not see its way clear to sustain Macaya's contention that Manotok had given his consent to enter into a verbal tenancy contract with him. The lower court further considered the fact that the amount of ten (10) cavans of palay given by Macaya to the owners from 1957 to 1964 which was later increased to twenty (20) cavans of palay from 1964 to 1966 was grossly disproportionate to the amount of taxes paid by the owners. The lot was taxed as residential land in a metropolitan area. There was clearly no intention on the part of the owners to devote the property for agricultural production but only for residential purposes. Thus, together with the third requisite, the fourth requisite which is the purpose was also not present.

The last requisite is consideration. This is the produce to be divided between the landholder and tenant in proportion to their respective contributions. We agree with the trial court that this was also absent.

As earlier stated, the main thrust of petitioners' argument is that the law makes it mandatory upon the respondent Court of Appeals to affirm the decision of the Court of Agrarian Relations if the findings of fact in said decision are supported by substantial evidence, and the conclusions stated therein are not clearly against the law and jurisprudence. On the other hand, private respondent contends that the findings of the Court of Agrarian Relations are based not on substantial evidence alone but also on a misconstrued or misinterpreted evidence, which as a result thereof, make the conclusions of the Court of Agrarian Relations clearly contrary to law and jurisprudence.

After painstakingly going over the records of the case, we find no valid and cogent reason which justifies the appellate court's deviation from the

findings and conclusions of the lower court. It is quite clear from the 44-page decision of the trial court, that the latter has taken extra care and effort in weighing the evidence of both parties of the case. We find the conclusions of the respondent appellate court to be speculative and conjectural.

It bears re-emphasizing that from 1946 to 1956, there was no agreement as to any system of sharing the produce of the land. The petitioners did not get anything from the harvest and private respondent Macaya was using and cultivating the land free from any charge or expense. The situation was rather strange had there been a tenancy agreement between Don Severino and Macaya.

From 1957 to 1964, Macaya was requested to contribute ten (10) cavans a year for the payment of the realty taxes. The receipts of these contributions are evidenced by the following exhibits quoted below:

(a) Exhibit "4" adopted and marked as Exhibit "K" for plaintiff (Macaya):

Ukol sa taon 1961

Tinanggap naniin kay G. Teodoro Macaya ang sampung (10) cavan na palay bilang tulong niya sa pagbabayad ng amillaramiento sa lupa ng corporation na nasa Payong, Q.C. na kaniyang binabantayan.

(b) Exhibit "9" adopted and marked as Exhibit "L" for plaintiff (Macaya):

Tinanggap namin kay Ginoong Teodoro Macaya ang TATLONG (3) kabang palay bilang kapupunan sa DALAWAMPUNG (20) kabang palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1963 ng lupang ari ng Manotok Realty, Inc. na nasa Payong, Quezon City, na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANGTIRAHAN.

c) Exhibit "10" adopted and marked as Exhibit "N" for plaintiff (Macaya):

Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1964 ng lupang ari ng Manotok Realty Inc., na nasa Payong, Quezon City, na kanyang

binabantayan samantalang hindi pa ginagawang SUBDIVISION PANG TAHANAN.

d) Exhibit "11" adopted and marked as Exhibit "M" for plaintiff (Macaya):

Tinanggap namin kay Ginoong Teodoro Macaya ang DALAWAMPUNG (20) kabang ng palay na kanyang tulong sa pagbabayad ng amillaramiento para sa taong 1965 ng lupang ari ng Manotok Realty, Inc., na nasa Payong, Quezon City, na kanyang binabantayan samantalang hindi pa ginagawang SUBDIVISION PANG TAHANAN.

From the above-quoted exhibits, it clearly appears that the payment of the cavans of palay was Macaya's contribution for the payment of the real estate taxes; that the nature of the work of Macaya is that of a watchman or guard (bantay); and, that the services of Macaya as such watchman or guard (bantay) shall continue until the property shall be converted into a subdivision for residential purposes.

The respondent appellate court disregarded the receipts as self-serving. While it is true that the

receipts were prepared by petitioner Perpetua M. Bocanegra, Macaya nevertheless signed them voluntarily. Besides, the receipts were written in the vernacular and do not require knowledge of the law to fully grasp their implications.

Furthermore, the conclusion of the respondent appellate court to the effect that the receipts having been prepared by one of the petitioners who happens to be a lawyer must have been so worded so as to conceal the real import of the transaction is highly speculative. There was nothing to conceal in the first place since the primary objective of the petitioners in allowing Macaya to live on the property was for security purposes. The presence of Macaya would serve to protect the property from squatters. In return, the request of Macaya to raise food on the property and cultivate a three-hectare portion while it was not being developed for housing purposes was granted.

We can understand the sympathy and compassion which courts of justice must feel for people in the same plight as Mr. Macaya and his family. However, the petitioners have been overly generous and understanding of Macaya's problems. For ten years from 1946 to 1956, he lived on the property, raising animals and planting crops for personal use, with only his services as "bantay" compensating for the use of another's property. From 1967 to the present, he did not contribute to the real estate taxes even as he dealt with the land as if it were his own. He abused the generosity of the petitioners when he expanded the permitted area for cultivation from three hectares to six or eight hectares. Mr. Macaya has refused to vacate extremely valuable residential land contrary to the clear agreement when he was allowed to enter it. The facts of the case show that even Mr. Macaya did not consider himself as a true and lawful tenant and did not hold himself out as one until he was asked to vacate the property.

WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals is hereby REVERSED and SET ASIDE and the decision of the Court of Agrarian Relations is AFFIRMED.

SO ORDERED.

Teehankee (Chairman), Plana, Relova and De la Fuente, JJ., concur.

Melencio-Herrera, J., is on leave.

FIRST DIVISION

 

[G.R. No. L-28135. September 10, 1981.]

 

JOSE MATIENZO, plaintiff-appellant, vs. MARTIN SERVIDAD, defendant-appellee.

 

Alberto A. Reyes for plaintiff-appellant.Vicente F. Camacho, Jr. for defendant-appellee.

 

SYNOPSIS

 

        In a private document agreed upon between appellant and appellee, appellant was made head-overseer over a 7-hectare land belonging to appellee. Under the agreement, appellant was to supervise applications for loans from those residing therein; he was allowed to build his house thereon and plant specified plants without being compensated; he was free to clear and plant the land as long as he wished; he had no sharing arrangement with appellee; and he was not obligated to pay any price certain to, nor share the produce with, the latter. Subsequently, the parties entered into another agreement regarding upland planting and copra-

making for the year 1963, pursuant to which, appellant and his wife were made "caretakers" of the land. Under this second agreement, appellant would receive 1/3 of the copra as payment for processing, but as in the first agreement, there was a definite provision that appellee would not share in the produce of appellant's plants. In 1964, appellee prohibited appellant from interfering with the plants and from planting and clearing the land stating that they had no agreement yet for that year. Efforts to settle the difference between the parties failed. Thus, appellant filed a suit for illegal ejectment against appellee, where he stated that in view of his strained relationship with appellee, he was waiving his right to reinstatement provided he be paid reasonable compensation for the improvements he had introduced on the land, plus actual and moral damages. The trial Court dismissed the case based on the Report of the Court-appointed Commissioner. Hence, this Petition.

        The Supreme Court held, that it is clear from the agreements entered into between the parties that their intention was to make appellant an overseer of appellee and not a tenant, there being no sharing arrangement between them.

        Petition dismissed.

 

SYLLABUS

 

1. CIVIL LAW; CONTRACTS; INTERPRETATION OF; SOME BASIC PRINCIPLES. — When there is no doubt as to the intention of the contracting parties, its literal meaning shall control (Art. 1370, New Civil Code; Cebu Portland Cement Co. vs. Dumon, 61 SCRA 218). Article 1372 of the New Civil Code further provides that however general the terms of a contract may be, they shall not be understood to comprehend

things that are distinct and cases that are different from those upon which the parties intended to agree (Rep. vs. Vda. de Castellvi, 58 SCRA 336). Therefore, a meaning other than that expressed or an interpretation which would alter its strict and literal significance should not, be given to it (City of Manila vs. Rizal Park Co., 53 Phil. 515). Moreover, the entirety of the contract must be taken into consideration to ascertain the meaning of its provision (Ruiz vs. Sheriff of Manila, 34 SCRA 83).

2. ID.; ID.; ID.; 1D.; CONTRACT IN CASE AT BAR CLEARLY SHOWS THAT PLAINTIFF-APPELLANT IS AN OVERSEER. — It is clear from Exhibit C that plaintiff was made an overseer of defendant, not a tenant. It was likewise expressly stipulated therein that "the conditions for clearing the land are these: With respect to all your plants we will share no percentage for the land." And again, "all those (coconuts) that we are to plant no share will be taken for the land." The basic element of sharing in agricultural tenancy, therefore, is absent. The one-third share plaintiff received from copra-making constituted payments for the processing of copra which are evidenced by receipts. Plaintiff also got paid for clearing the coconuts.

3. LABOR AND SOCIAL LEGISLATION; AGRICULTURAL TENANCY ACT (R.A. 1199); TENANCY RELATIONSHIP; TENANT, DEFINED. — A tenant is defined under Section 5(a) of Republic Act No. 1199 as a person, who, himself, and with the aid available from within his immediate household, cultivates the land belonging to or possessed by another, with the latter's consent for purposes of production, sharing the produce with the landholder under the share tenancy system, or paying

to the landholder a price certain or ascertainable in produce or in money or both, under the leasehold tenancy system.

4. ID.; ID.; ID.; SHARING ARRANGEMENT, AN ESSENTIAL ELEMENT THEREOF; ABSENT IN CASE AT BAR. — In the case at bar, there is no tenancy relationship between the parties in view of the absence of a sharing arrangement. What transpired was that plaintiff was made overseer over a 7-hectare land area; he was to supervise applications for loans from those residing therein; he was allowed to build his house thereon and to plant specified plants without being compensated; he was free to clear and plant the land as long as he wished; he had no sharing arrangement with defendant; and he was not obligated to pay any price certain to nor share the produce with, the latter.

5. ID.; ID.; ID.; RULING THAT CARETAKER IS CONSIDERED CULTIVATOR OF THE LAND, NOT APPLICABLE IN CASE AT BAR; REASON. — Although Exhibit 6 states that plaintiff and his wife were made "caretakers" of the land, there is a definite provision in both Exhibits C and 6 that defendant would not share in the produce of plaintiff's plants. Because of this aspect, the ruling in Latag vs. Banog, 16 SCRA 88 (1906), which holds that a "caretaker of an agricultural land is also considered cultivator of the land," finds no applicability.

6. REMEDIAL LAW; CIVIL PROCEDURE; APPEAL; ISSUES NOT RAISED IN TRIAL COURT CANNOT BE RAISED FOR FIRST TIME ON APPEAL. — Plaintiff's assertions that the trial Court committed grave error in failing to notify the parties of the filing of the Commissioner's Report; in not giving them ten days to object thereto pursuant to

Section 10, Rule 33 of the Rules of Court; and in failing to set the Report for hearing in accordance with Section 11 of the same Rule, have been raised for the first time on appeal. It is a well-settled rule that issues not raised in the trial Court cannot be raised for the first time on appeal.

 

D E C I S I O N

 

MELENCIO-HERRERA, J p:

        Under review is the judgment of the Court of Agrarian Relations, Branch I, Naga City, in CAR Case No. 920-CS-64, entitled "Jose Matienzo vs. Martin Servidad," dismissing plaintiff's action for Reinstatement, Reliquidation and Damages. This case was certified to us by the Court of Appeals on September 20, 1967, the principal issue being one of law, particularly, the interpretation of the contracts between the parties.

        The controversy stemmed from the following uncontroverted facts:

        Defendant Martin Servidad is the owner of a sixteen hectare agricultural land situated at Barrio Binahian, Sipocot, Camarines Sur. On April 16, 1961, he and plaintiff Jose Matienzo executed a private instrument 1

handwritten in the dialect of the locality by Feliza Servidad, wife of defendant Martin Servidad 2 , and translated into English as follows:

"I Jose Matienzo, Elenita Robles, we husband and wife were instituted head-overseer in the land of Martin and Feliza de Servidad who will take care of their plants. Whoever resides in our land will have to obey the head-overseer as we have then authorized to supervise the landholding. Like borrowing loans needed if there is no letter from the Head-overseer to us we will not accommodate. So that

whatever need you have you must inform the Head-overseer as the latter is the one to inform us.

The conditions for clearing the land are these: With respect to all your plants we will share no percentage for the land. But you will have to plant coconut in our land. We will not pay as this is our conditions. You are free to clear and plant the land as long as you wish. We must help one another for our betterment. Let us not do anything prejudicial to others. Let's do the best as it is better.

        To show our conformity to the terms given by Martin and Feliza de Servidad, we signed in the presence of two witnesses this date." (Emphasis supplied)

Witnesses:

1. Jose Matienzo

2. Paulino Ponayo

3. S. Ralles.

        The area entrusted to plaintiff was seven hectares, on a portion of which he constructed his house.

        On January 1, 1963, the parties entered into another agreement concerning the conditions of copra making and upland planting for the year 1963. 3 This was again handwritten in the local dialect by Feliza Servidad. 4 The English translation of the agreement reads:

"Condition in Copra Making and Upland

Planting This Year 1963.

Binahian, Sipocot, Camarines Sur.

"I, JOSE MATIENZO and ELENITA ROBLES, husband and wife, are hereby made caretakers of the land of Martin Servidad and Feliza de Servidad, and, when we

arrived on their land all plants are productive.

The condition given to us in copra making is one third, but before we begin copra making, we are to clean the plantation and everytime we make copra we separate nuts for seedling. We are given one male carabao (castrated). The condition for upland planting is this: all those that we are to plant no share will be taken for the land, but we are also to plant coconut, coffee, abaca, and the owner shall not pay the same. Before I signed this I have read the same. In truth we agree to the condition given to me, and I signed this 1st day of January, 1963 before two witnesses. In the year 1964 new agreement will be made. (Emphasis ours)

SGD. Jose Matienzo Elenita RoblesSgd. Pedro Moreno — Barrio Lieut.Sgd. Jose Bacho

Jose Matienzo           Elenita Robles"

        Plaintiff planted bananas, bancocan, coffee, coconuts, breadfruits, abaca and some auxiliary crops. He also looked after the coffee and abaca plants of defendant, as well as the latter's goats entrusted to his care. For clearing the coconut plantation, he was paid per coconut tree he cleared. For his labor in making copra, he was paid 1/3 of the copra he made. Other persons who made copra therein were also correspondingly paid.

        On January 30, 1964, defendant wrote plaintiff telling him not to "interfere with the plants" as they had no agreement yet for that year, and that being the landowner, he should be the one to decide in accordance with the "tenancy law." 5 On March 4, 1964, defendant sent another letter to plaintiff prohibiting him from planting and clearing the land for the same

reason. 6 Plaintiff sought the assistance of the Office of the Agrarian Counsel in Naga City. Efforts to settle the case amicably failed, as a consequence of which, plaintiff brought an action against defendant in the Court of Agrarian Relations of Naga City praying that defendant be held guilty of illegal ejectment; that in view of the strained relationship with defendant, he was waiving his right to reinstatement provided he be paid reasonable compensation for his improvements; and that defendant be ordered to pay him actual and moral damages.

        The case was heard by Judge Valeriano A. del Valle, then by Judge Agustin Frivaldo, and terminated by Commissioner Benjamin G. Fernandez, who was appointed by the Court to hear the case on January 20, 1966, with the consent of the parties. 7

Based on the Commissioner's Report, which was adopted in toto by the Court, a judgment was rendered on May 17, 1966 dismissing the suit for lack of merit. Plaintiff moved for reconsideration, but this was denied. In its judgment, the Court a quo specifically made a finding that plaintiff had expressly waived his right to reinstatement "on account of his strained relationship with defendant."

        Plaintiff appealed to the Court of Appeals, which Court, however, as hereinabove stated, certified the case to us on the theory that "where the issue is the construction or interpretation of contracts, or where all the facts are stated in the judgment and the issue is the conclusion drawn therefrom, the question is one of law reviewable by the Supreme Court." 8

        Plaintiff has assigned the following errors:

I

"The lower Court erred in holding that appellant is merely an overseer of appellee over the landholding in question.

II

The Court a quo committed a grave error in considering exhibits '2', 'C', & 'C-1', as contracts that established merely an overseer relationship between the appellant and appellee; in this regard the Court a quo deviated from the established procedures in determining the nature of a contract.

III

The Court a quo committed a grave error in authorizing the ejectment of appellant.

IV

The Court failed to observe the requirements of Sections 10 & 11, Rule 33 of the New Rules of Court."

        The sole issue for determination is whether under the parties' agreements, plaintiff was instituted as an overseer or as a tenant by defendant.

        To start with, a few basic principles on the interpretation of contracts should be reiterated. When there is no doubt as to the intention of the contracting parties, its literal meaning shall control. 9 Article 1372 of the New Civil Code further provides that however general the terms of a contract may be, they shall not be understood to comprehend things that are distinct and cases that are different from those upon which the parties intended to agree. 10 Therefore, a meaning other than that expressed or an interpretation which would alter its strict and literal significance should not be given to it. 11 Moreover, the entirety of the contract must be taken into consideration to ascertain the meaning of its provisions. 12

        It is clear from Exhibit C that plaintiff was made an overseer of defendant, not a tenant. It was likewise expressly stipulated therein

that "the conditions for clearing the land are these: With respect to all your plants we will share no percentage for the land." And again, "all those (coconuts) that we are to plant no share will be taken for the land." 13 The basic element of sharing in agricultural tenancy, therefore, is absent. The one-third share plaintiff received from copra-making constituted payments for the processing of copra. These are evidenced by receipts. 14 Plaintiff also got paid for clearing the coconuts as shown by Exhibits 7 and 7-A. 15

        A tenant is defined under section 5(a) of Republic Act No. 1199 as a person who, himself, and with the aid available from within his immediate household, cultivates the land belonging to or possessed by another, with the latter's consent for purposes of production, sharing the produce with the landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or in money or both, under the leasehold tenancy system. From the above definition of a tenant, it is clear that absent a sharing arrangement, no tenancy relationship had ever existed between the parties. What transpired was that plaintiff was made overseer over a 7-hectare land area; he was to supervise applications for loans from those residing therein; he was allowed to build his house thereon and to plant specified plants without being compensated; he was free to clear and plant the land as long as he wished; he had no sharing arrangement between him and defendant; and he was not obligated to pay any price certain to, nor share the produce with, the latter.

        Although Exhibit 6 states that plaintiff and his wife were made "caretakers" of the land, there is a definite provision in both Exhibits C and 6 that defendant would not share in the produce of plaintiff's plants. Because of this aspect, the ruling in Latag vs. Banog, 16 SCRA 88 (1966), which holds that a "caretaker of an agricultural land is also considered

cultivator of the land," finds no applicability.

        Besides, even if we were to rule that plaintiff is a tenant, the whole exercise would become academic since he has waived his right to reinstatement.

        With respect to the fourth assignment of error, plaintiff asserts, for the first time, that the trial Court committed grave error in failing to notify the parties of the filing of the Commissioner's Report, and in not giving them ten days to object thereto pursuant to Section 10, Rule 33 of the Rules of Court. He also claims that the Court failed to set the Report for hearing in accordance with Section 11 of the same Rule. Be that as it may, well established is the rule that issues not raised in the trial Court can not be raised for the first time on appeal.

        WHEREFORE, the Petition is hereby dismissed.

        SO ORDERED.

        Teehankee (Chairman), Makasiar, Fernandez and Guerrero, JJ ., concur.

SECOND DIVISION

 

[G.R. No. 78214. December 5, 1988.]

 

YOLANDA CABALLES, petitioner, vs. DEPARTMENT OF AGRARIAN REFORM, HON. HEHERSON T. ALVAREZ and BIENVENIDO ABAJON, respondents.

 

D E C I S I O N

 

SARMIENTO, J p:

        Before us is a petition for certiorari seeking the annulment of an Order issued by the public respondent Ministry of Agrarian Reform (MAR), now the Department of Agrarian Reform (DAR), through its then Minister, the Hon. Heherson Alvarez, finding the existence of a tenancy relationship between the herein petitioner and the private respondent and certifying the criminal case for malicious mischief filed by the petitioner against the private respondent as not proper for trial. LLphil

        The facts as gathered by the MAR are as follows:

        The landholding subject of the controversy, which consists of only sixty (60) square meters (20 meters x 3 meters) was acquired by the spouses Arturo and Yolanda Caballes, the latter being the petitioner herein, by virtue of a Deed of Absolute Sale dated July 24, 1978 executed by Andrea Alicaba Millenes. This landholding is part of Lot No. 3109-C, which has a total area of about 500

square meters, situated at Lawa-an, Talisay, Cebu. The remainder of Lot No. 3109-C was subsequently sold to the said spouses by Macario Alicaba and the other members of the Millenes family, thus consolidating ownership over the entire (500-square meter) property in favor of the petitioner.

        In 1975, before the sale in favor of the Caballes spouses, private respondent Bienvenido Abajon constructed his house on a portion of the said landholding, paying a monthly rental of P2.00 to the owner, Andrea Millenes. The landowner likewise allowed Abajon to plant on a portion of the land, agreeing that the produce thereof would be shared by both on a fifty-fifty basis. From 1975-1977, Abajon planted corn and bananas on the landholding. In 1978, he stopped planting corn but continued to plant bananas and camote. During those four years, he paid the P2.00 rental for the lot occupied by his house, and delivered 50% of the produce to Andrea Millenes.

        Sometime in March 1979, after the property was sold, the new owners, Arturo and Yolanda Caballes, told Abajon that the poultry they intended to build would be close to his house and pursuaded him to transfer his dwelling to the opposite or southern portion of the landholding. Abajon offered to pay the new owners rental on the land occupied by his house, but his offer was not accepted. Later, the new owners asked Abajon to vacate the premises, saying that they needed the property. But Abajon refused to leave. The parties had a confrontation before the Barangay Captain of Lawa-an in Talisay, Cebu but failed to reach an agreement. All the efforts exerted by the landowners to oust Abajon from the landholding were in vain as the latter simply refused to budge. LLphil

        On April 1, 1982, the landowner, Yolanda Caballes, executed an Affidavit stating that immediately after she reprimanded Abajon for

harvesting bananas and jackfruit from the property without her knowledge, the latter, with malicious and ill intent, cut down the banana plants on the property worth about P50.00. A criminal case for malicious mischief was filed against Abajon and which was docketed as Criminal Case No. 4003. Obviously, all the planting on the property, including that of the banana plants, had been done by Abajon. On September 30, 1982, upon motion of the defense in open court pursuant to PD 1038, the trial court ordered the referral of the case to the Regional Office No. VII of the then MAR for a preliminary determination of the relationship between the parties. As a result, the Regional Director of MAR Regional VII, issued a certification 1 dated January 24, 1983, stating that said Criminal Case No. 4003 was not proper for hearing on the bases of the following findings:

That herein accused is a bona-fide tenant of the land owned by the complaining witness, which is devoted to bananas;

That this case is filed patently to harass and/or eject the tenant from his farmholding, which act is prohibited b law; and

That this arose out of or is connected with agrarian relations.

        From the said certification, the petitioner appealed to the then MAR, now the respondent DAR. Acting on said appeal, the respondent DAR, through its then Minister Conrado Estrella, reversed the previous certification in its Order 2 of February 3, 1986, declaring Criminal Case No. 4003 as proper for trial as "the land involved is a residential lot consisting of only 60 square meters whereon the house of the accused is constructed and within the industrial zone of the town as evinced from the Certification issued by the Zoning Administrator of Talisay, Cebu."

        Upon motion for reconsideration filed by Abajon, the respondent DAR, through its new Minister, herein

respondent Heherson Alvarez, issued an Order 3 dated November 15, 1986, setting aside the previous Order dated February 3, 1986, and certifying said criminal case as not proper for trial, finding the existence of a tenancy relationship between the parties, and that the case was designed to harass the accused into vacating his tillage.

        In the summary investigation conducted by the DAR, the former landowner, Andrea Millenes, testified that Bienvenido Abajon dutifully gave her 50% share of the produce of the land under his cultivation. The grandson of Andrea Millenes, Roger Millenes, corroborated the testimony of the former, stating that he received said share from Abajon. Roger Millenes further testified that the present owners received in his presence a bunch of bananas from the accused representing 1/2 or 50% of the two bunches of bananas gathered after Caballes had acquired the property. 4

        From these factual findings, the DAR concluded that Abajon was a tenant of Andrea Millenes, the former owner, who had testified that she shared the produce of the land with Abajon as tiller thereof. 5 Thus, invoking Sec. 10 of RA 3844, as amended, which provides that "[T]he agricultural leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding"; and that "(I)n case the agricultural lessor sells, alienates or transfers the legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor," the MAR ruled that "the new owners are legally bound to respect the tenancy, notwithstanding their claim that the portion tilled by Abajon was small, consisting merely of three (3) meters wide and twenty (20) meters long, or a total of sixty (60) square meters." 6

        Hence, its petition for certiorari alleging that:

I. Respondents DAR and Hon. Heherson T. Alvarez committed "grave abuse of power and discretion amounting to lack of jurisdiction" in holding that private respondent Abajon is an agricultural tenant even if he is cultivating only a 60-square meter (3 x 20 meters) portion of a commercial lot of the petitioner.

II. Public respondents gravely erred in holding that Criminal Case No. 4003 is not proper for trial and hearing by the court. 7

        We hold that the private respondent cannot avail of the benefits afforded by RA 3844, as amended. To invest him with the status of a tenant is preposterous.

        Section 2 of said law provides:

It is the policy of the State:

(1)     To establish cooperative-cultivatorship among those who live and work on the land as tillers, owner-cultivatorship and the economic family-size farm as the basis of Philippine agriculture and, as a consequence, divert landlord capital in agriculture to industrial development;

xxx                    xxx                    xxx

        RA 3844, as amended, defines an economic family-size farm as "an area of farm land that permits efficient use of labor and capital resources of the farm family and will produce an income sufficient to provide a modest standard of living to meet a farm family's needs for food, clothing, shelter, and education with possible allowance for payment of yearly installments on the land, and reasonable reserves to absorb yearly fluctuations in income." 8

        The private respondent only occupied a miniscule portion (60 square meters) of the 500-square meter lot. Sixty square meters of land planted to bananas, camote, and corn cannot by any stretch of the imagination be considered as an economic family-size farm. Surely, planting camote, bananas, and corn on a sixty-square meter piece of land can not produce an income sufficient to provide a modest standard of living to meet the farm family's basic needs. The private respondent himself admitted that he did not depend on the products of the land because it was too small, and that he took on carpentry jobs on the side. 9 Thus, the order sought to be reviewed is patently contrary to the declared policy of the law stated above.

        The DAR found that the private respondent shared the produce of the land with the former owner, Andrea Millenes. This led, or misled, the public respondents to conclude that a tenancy relationship existed between the petitioner and the private respondent because, the public respondents continue, by operation of Sec. 10 of R. A. 3844, as amended, the petitioner new owner is subrogated to the rights and substituted to the obligations of the supposed agricultural lessor (the former owner).

        We disagree.

        The essential requisites of a tenancy relationship are:

1.      The parties are the landowner and the tenant;

2.      The subject is agricultural land;

3.      There is consent;

4.      The purpose is agricultural production;

5.      There is personal cultivation; and

6.      There is sharing of harvests.

        All these requisites must concur in order to create a tenancy relationship between the parties. The absence of one does not make an occupant of a parcel of land, or a cultivator thereof, or a planter thereon, 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. 10

        Therefore, the fact of sharing alone is not sufficient to establish a tenancy relationship. Certainly, it is not unusual for a landowner to accept some of the produce of his land from someone who plants certain crops thereon. This is a typical and laudable provinciano trait of sharing or patikim, a native way of expressing gratitude for favor received. This, however, does not automatically make the tiller-sharer a tenant thereof specially when the area tilled is only 60, or even 500, square meters and located in an urban area and in the heart of an industrial or commercial zone at that. Tenancy status arises only if an occupant of a parcel of land has been given its possession for the primary purpose of agricultural production. The circumstances of this case indicate that the private respondent's status is more of a caretaker who was allowed by the owner out of benevolence or compassion to live in the premises and to have a garden of some sort at its southwestern side rather than a tenant of the said portion.

        Agricultural production as the primary purpose being absent in the arrangement, it is clear that the private respondent was never a tenant of the former owner, Andrea Millenes. Consequently, Sec. 10 of RA of 3844, as amended, does not apply. Simply stated, the private respondent is not a tenant of the herein petitioner.

        Anent the second assignment of error, the petitioner argues that since Abajon, is not an agricultural tenant, the criminal case for malicious mischief filed against him should be declared as proper for trial so that proceedings in the lower court can resume.

        Notwithstanding our ruling that the private respondent is not a tenant of the petitioner, we hold that the remand of the case to the lower court for the resumption of the criminal proceedings is not in the interest of justice. Remand to the Municipal Court of Talisay, Cebu, would not serve the ends of justice at all, nor is it necessary, because this High Tribunal is in a position to resolve with finality the dispute before it. This Court, in the public interest, and towards the expeditious administration of justice, has decided to act on the merits and dispose of the case with finality. 11

        The criminal case for malicious mischief filed by the petitioner against the private respondent for allegedly cutting down banana trees worth a measly P50.00 will take up much of the time and attention of the municipal court to the prejudice of other more pressing cases pending therein. Furthermore, the private respondent will have to incur unnecessary expenses to finance his legal battle against the petitioner if proceedings in the court below were to resume. Court litigants have decried the long and unnecessary delay in the resolution of their cases and the consequent costs of such litigations. The poor, particularly, are victims of this unjust judicial dawdle. Impoverished that they are they must deal with unjust legal procrastination which they can only interpret as harassment or intimidation brought about by their poverty, deprivation, and despair. It must be the mission of the Court to remove the misperceptions aggrieved people have of the nature of the dispensation of justice. If justice can be meted out now, why wait for it to drop gently from heaven? Thus, considering that this case involves a mere bagatelle,

the Court finds it proper and compelling to decide it here and now, instead of further deferring its final termination.

        As found by the DAR, the case for malicious mischief stemmed from the petitioner's affidavit stating that after she reprimanded private respondent Abajon for harvesting bananas and jackfruit from the property without her knowledge, the latter, with ill intent, cut the banana trees on the property worth about P50.00.

        This was corroborated by a certain Anita Duaban, a friend of the petitioner, who likewise executed an affidavit to the effect that she saw the private respondent indiscriminately cutting the banana trees. 12

        The Revised Penal Code, as amended, provides that "any person who shall deliberately cause to the property of another any damage not falling within the terms of the next preceding chapter shall be guilty of malicious mischief." 13

        The elements of the crime of malicious mischief are:

1.      The offender deliberately caused damage to the property of another;

2.      The damage caused did not constitute arson or crimes involving destructions.

3.      The damage was caused maliciously by the offender.

        After a review of the facts and circumstances of this case, we rule that the aforesaid criminal case against the private respondent be dismissed.

        The private respondent can not be held criminally liable for malicious mischief in cutting the banana trees because, as an authorized occupant or possessor of the land, and as planter of the banana trees, he owns said crops including the fruits thereof. The private respondent's possession of the

land is not illegal or in bad faith because he was allowed by the previous owners to enter and occupy the premises. In other words, the private respondent worked the land in dispute with the consent of the previous and present owners. Consequently, whatever the private respondent planted and cultivated on that piece of property belonged to him and not to the landowner. Thus, an essential element of the crime of malicious mischief, which is "damage deliberately caused to the property of another," is absent because the private respondent merely cut down his own plantings. prcd

        WHEREFORE, the Order of public respondents dated November 15, 1986 is SET ASIDE and Criminal Case No. 4003, is hereby DISMISSED. Let a copy of this decision be sent to the Municipal Trial Court of Talisay, Cebu for appropriate action. This Decision is IMMEDIATELY EXECUTORY.

        No costs.

        SO ORDERED.

        Melencio-Herrera (Chairman), Paras, Padilla and Regalado, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-20098             January 31, 1966

SILVERIO LATAG, plaintiff-appellant, vs.

MARCELO BANOG, defendant-appellee.

Endaya, Caleasal and Delgado for the plaintiff-appellant.Suanes, Barbosa and Atienza for the defendant-appellee.

ZALDIVAR, J.:

This is an appeal from the order of the Court of First Instance of Batangas dismissing the complaint in its Civil Case No. 1263, on the ground that said court has no jurisdiction to take cognizance of the case.

On February 13, 1962 the plaintiff-appellant filed a complaint against the defendant-appellee alleging, in substance: that the defendant is the absolute owner of two parcels of land situated in Barrio Quilib, Rosario, Batangas; that on December 7, 1960, the plaintiff and the defendant entered into a written contract whereby it was agreed that the former was to act as manager, cultivator and caretaker of the two parcels of land owned by the latter, and of all the useful plants planted, and to be planted, on said lands, with the understanding that all the products of the orange and the calamansi trees planted thereon would be divided into three equal parts; two-thirds of which would be the share of the plaintiff and one-third would be the share of the defendant, while the sharing in the other products like coffee, bananas, mangoes, black pepper and others would be on the fifty-fifty basis; and it was further agreed that said relationship and sharing would continue for a period of five years from December 7, 1960; that pursuant to said agreement the plaintiff entered into the management, cultivation and care of the above-mentioned properties, and had built a house costing P70.00 on one of the

two parcels of land, that the plaintiff had incurred actual expenses in the total amount of P2,286.80 aside from other miscellaneous expenses for food and viand of his laborers; that on January 11, 1962, without any legal ground nor justification whatsoever the defendant drove the plaintiff out of the lands and even destroyed the house that the plaintiff had built thereon; that notwithstanding all efforts of the plaintiff to make the defendant comply with his part of the agreement in their written contract, the defendant had adamantly refused. The complaint prayed that judgment be rendered ordering the defendant to pay the plaintiff actual damages in the amount of P2,656.80, unrealized profits in the amount that the court would fix after hearing the evidence, moral damages in the amount of at least P5,000.00, exemplary damages in the amount of at least P5,000.00, plus attorney's fees equivalent to 20% of the total amounts collected and the costs of the suit. A copy of the written agreement in question was attached to the complaint as Annex "A".

On March 2, 1962 the defendant filed a motion to dismiss the complaint on the ground that the court has no jurisdiction to take cognizance of the case and that the complaint did not state a cause of action. It is contended by the defendant that, based on the allegations in the complaint and as stated in the written agreement which was attached to the complaint as Annex "A", a relationship of landlord and tenant had existed between the plaintiff and the defendant—the plaintiff being the tenant and the defendant being the landlord, and the complaint being one that seeks to secure a decision or settlement of differences or disputes in connection with the relationship of landlord and tenant involving the cultivation and use of agricultural land, it is the Court of Agrarian Relations and not the Court of First Instance that has jurisdiction to hear and decide the case. The defendant points out that the complaint of the plaintiff poses the question of whether the act of the defendant, as landlord, in

dispossessing the plaintiff, as tenant, of the two parcels of land was justified or not under the law.

On March 5, 1962, the plaintiff filed an opposition to the motion to dismiss the complaint and at the same time moved to amend the original complaint by striking out the words "cultivator" and "cultivation" in paragraphs 3 & 4, of the original complaint, claiming that the one who drafted the original complaint was not well versed in Tagalog such that the phrase "tagapamahala at tagapagalaga" was translated into "manager, cultivator and caretaker" whereas that phrase "tagapamahala at tagapagalaga" ought to be translated into English only as "manager and caretaker" without including any statement about cultivation. In his opposition to the motion to dismiss the plaintiff contends that in the contract, Annex A to the complaint, no tenancy relationship was agreed upon and the complaint was intended to recover damages so that it is the court of general jurisdiction, which is the Court of First Instance, and not the Court of Agrarian Relations, which is a court of limited jurisdiction, that has competence to hear and decide the case.1äwphï1.ñët

On March 27, 1962 the Court of First Instance of Batangas, acting on the motion to dismiss the complaint, issued an order dismissing the case. In its order of dismissal the court a quo stated:

This Court believes and so holds that the argument of the defendant is well-taken, and agrees with him that the document, Annex "A", indicates the existence of tenancy relationship between the plaintiff and the defendant, considering the ruling of our Supreme Court in the case of Teodorico B. Santos vs. Court of Industrial Relations, et al., G.R. No. L-17196, prom. Dec. 28, 1961, "that any matter that may pertain to the relation of tenant

and landlord comes under the Agricultural Tenancy and any controversy that may arise between them as an incident of their Act (Republic Act No. 1199, as amended by Republic Act No. 2263) and any controversy that may arise between them as an incident of their relationship comes under the exclusive jurisdiction of the Court of Agrarian Relations created by Republic Act. No. 1267. It was created for enforcement of all laws and regulations governing the relation of capital and labor on all agricultural lands under any system of cultivation (Section 1, Rep. Act No. 1267, as amended by Republic Act No. 1409) and was given exclusive jurisdiction over the entire Philippines to consider, disputes established by law which determine the varying rights of persons in the cultivation and use of agricultural land where one of the parties works the land", and so this Court believes and so declares that it has no jurisdiction to pass upon the issues of the case at bar, falling as they do, according to the above citation under the exclusive jurisdiction of the Court of Agrarian Relations.

Before this Court, plaintiff-appellant insists that the contract (Annex A) does not establish any tenancy relationship, or if it did, such relationship had already ceased inasmuch as he does not ask for reinstatement as tenant. He claims that this case is a simple suit for damages which the Court of Agrarian Relations cannot take cognizance of, it being a court of special and limited jurisdiction.

The contract (Annex A) contains the following pertinent stipulations:

Na si Silverio Latag, ganap sa gulang, Filipino, asawa ni Cipriana Alday at naninirahan sa Tambo, Lipa City ay aking ginawang tagapamahala at

tagapag-alaga sa naulit na lupa; na siya rin ang mamomosession, mamamahala sa mga halamang nakatanim at itatanim sa lupang naulit sa loob ng limang taon.

Na si Silverio Latag, ang mag-aalaga sa mga halaman ng lupang nabanggit; na ang lahat ng kagastusang maaaring makamit o kailanganin sa pag-aalaga ay siyang lahat ang nakakaalam; at walang PAKIALAM ang may-ari ng lupa.

Na ang kasunduan naming ito ay tatagal sa loob ng limang (5) taon simula ngayon; na ang kasunduang ito ay nagpapatunay din na ang bahagi ay akong may-ari ng lupa ay sa ikatlo (1/3) sa sinturis at kalamansing aanihin dito; at hati (50-50) parte sa bunga ng mga halamang sumusunod, (1) kape; (2) saging; (3) mangga; (4) at paminta at sa mga ibang halamang itatanim pa ng naulit na si Silverio Latag.

In the original complaint the plaintiff used the words "manager, cultivator and caretaker" of the two parcels of land concerned, but on the excuse that the one who prepared the complaint was not well versed in Tagalog, the complaint was subsequently amended whereby the word "cultivator" was deleted in the allegations of the complaint. We note, however that in the contract, Annex "A" to the complaint, it is clearly provided that the plaintiff would take care of the plants that are planted and those still to be planted on the lands within a period of five years ("mamamahala sa mga halamang nakatanim at itatanim sa lupang naulit sa loob ng limang taon").

This Court believes that the allegations of the complaint (even as amended) and the stipulations of the contract (Annex A) unmistakably show that an agricultural tenancy of the kind called "share tenancy" was established between the parties. It

has been declared that "an agricultural tenancy classified as `share tenancy' exists where a person has physical possession of another's land for the purpose of cultivating it and giving the owner a share in the crop" (Marcelo vs. De Leon, L-12902, July 29, 1959). This Court in the same case held:

x x x x He knows the caretaker must water the trees, even fertilize them for better production, uproot weeds and turn the soil, sometimes fumigate to eliminate plant pests, etc. Those chores obviously mean "working or cultivating" the land. x x x x

It may thus be stated that the "caretaker" of an agricultural land is also considered the "cultivator" of the land.

As regards plaintiff-appellant's contention that the tenancy relationship, if any, had been terminated because his claim was only for damages without reinstatement to his status as tenant, suffice it to say that in the instant case the plaintiff-appellant's claim for damages was based on his having been allegedly dispossessed unlawfully or unjustifiably by the defendant-appellee of the two parcels of land under his care and management sometime on January 1, 1962. It is clear that the action relates to an incident arising from the landlord and tenant relationship which existed shortly before the filing of the complaint on February 13, 1962. Under the circumstance, the Court of Agrarian Relations has the original and exclusive jurisdiction over the case, even if the tenancy relationship no longer existed at the time of the filing of the action. On this point this Court ruled as follows:

Indeed, Section 21 of Republic Act No. 1199, provides that "all cases involving the dispossession of a tenant by the landlord or by a third party and/or the settlement and

disposition of disputes arising from the relationship of landlord and tenant . . . shall be under the original and exclusive jurisdiction of the Court of Agrarian Relations." This jurisdiction does not require the continuance of the relationship of landlord and tenant — at the time of the dispute. The same may have arisen, and often times arise, precisely from the previous termination of such relationship. If the same existed immediately, or shortly before the controversy and the subject-matter thereof is whether or not said relationship has been lawfully terminated, or if the dispute otherwise springs or originates from the relationship of landlord and tenant, the litigation is cognizable only by the Court of Agrarian Relations, . . . (Basilio vs. De Guzman, et al., L-12762, April 22, 1959).

On the point that the present case comes under the exclusive jurisdiction of the Court of Agrarian Relations even if the action is only for the recovery of damages based on the unlawful dispossession of the tenant, this Court held:

Section 7, Republic Act No. 1267, as amended, vests in the Court of Agrarian Relations exclusive and original jurisdiction to determine controversies arising from landlord-tenant relationship. From this it may be inferred that it also has jurisdiction to hear and determine actions for recovery of damages arising from the unlawful dismissal or dispossession of tenant by the landlord, as provided in Act No. 4054 and Republic Act No. 1199, as amended. To hold otherwise could result in multiplicity of suits and expensive litigations abhorred by the law . . . . (Militar vs. Torcillero, et al., L-15065, April 28, 1961).

We hold, therefore, that the lower court did not commit error when it dismissed the complaint in the present case.

Wherefore, the order of dismissal appealed from is affirmed, with costs against plaintiff-appellant.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal and Bengzon, J.P., JJ., concur.Sanchez, J., took no part.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-20700             February 27, 1969

FIDEL TEODORO, petitioner, vs.

FELIX MACARAEG and COURT OF AGRARIAN RELATIONS, Second

Regional District, Sala II, respondents.

Jose A. Buendia and Agustin A. Pelmoka for petitioner. Jesus A. Garcia for respondent Felix Macaraeg.

CASTRO, J.:

Before us for review, upon a petition for certiorari, are the decision of the respondent Court of Agrarian Relations of September 7, 1962 in CAR case 558-Gba. 68 (Nueva Ecija), ordering the herein petitioner Fidel Teodoro to reinstate the herein private respondent Felix Macaraeg (the petitioner in the agrarian court) to his "former landhoding ... and to keep him as the true and lawful tenant in accordance with law," and the resolution of the same court of November 27, 1962 condemning Teodoro to pay or deliver to Macaraeg as damages "82 cavans of palay or its equivalent value in the amount of P820.00 computed at the rate of P10.00 per cavan, plus interest at 10% until fully paid."

We turn to the factual milieu.

On June 7, 1961 Macaraeg filed a petition with the Court of Agrarian Relations (Second Regional District, sala II, Guimba, Nueva Ecija) praying, inter alia, that (1) an interlocutory order be issued to restrain Teodoro and Jose Niegos (the respondents below), from ejecting him from his landholding pending resolution of his petition; and (2) after due trial, he be maintained as the lawful tenant in the disputed landholding.

Macaraeg alleged that he is a leasehold tenant of Teodoro cultivating a farmholding situated in the municipality of Talugtug, Nueva Ecija, of an area of four (4) hectares devoted to rice culture, and that he has worked said land "as a tenant for the last seven years"; that on March 2, 1961 he received a letter from Teodoro and his wife advising him that the aforesaid landholding will be given to another tenant, on the pretext that he (Macaraeg) "is contracting be a tenant of another in said landholding"; that forthwith, Teodoro placed a new tenant, Jose Niegos, in the disputed land; that subsequently, Niegos repeatedly forbade him from working on said riceland; that in order to avoid trouble, he refrained from forcibly entering the landholding, but with the advent of the planting season, it

became imperative that the agrarian court order his reinstatement and restrain Teodoro and Niegos from committing further acts of dispossession.

In his answer with counterclaim dated June 19, 1961, Teodoro categorically denied that Macaraeg was his tenant, claiming that "ever since he became the owner of around 39 hectares of riceland in Kalisitan, Talugtug, N. Ecija, he had always leased all of it under civil lease and he had never given any portion of it under tenancy." He further alleged that after the expiration of his lease contract with Macaraeg in January, 1961, his wife twice notified Macaraeg to renew his contract for the then incoming agricultural year 1961-62, but the latter "verbally told Mrs. Teodoro that he was no longer interested to work on the land and he was giving it up as he had left the place already." Teodoro also claims that it was only after Macaraeg had abandoned the farmland that he decided to lease it to Niegos.

On his part, Niegos seasonably answered, disclaming any knowledge that Macaraeg is the tenant of Teodoro, and averring that he entered the landholding in good faith clothed with the proper authority from the other respondent (Teodoro) and with the consent and confirmity of the petitioner (Macaraeg) who allowed him to work on the same"; and that Macaraeg "has no more interests in the cultivation of the landholding as could be gleaned from his actuations, like the failure to clean the land during the months of March and April, and his failure to prepare his seed bed in the month of May which is the period for broadcasting seedling in the community".

On February 6, 1962, when the hearing of the present controversy was nearing completion in the respondent agrarian court but before the case was submitted for decision, Macaraeg filed a "supplemental petition", claiming damages as a a result of his dispossession. Said

petition was given due course by the court commissioner and the requisite hearing was set for March 9, 1962. Both Teodoro and Niegos interposed their respective answers, identically asserting that the same was filed out of time and that the failure of Macaraeg to claim earlier his alleged damages amounted to a fatal neglect which could no longer be cured at that very late stage of the proceedings. Nonetheless, hearing on the said petition was disclosed that as "a result of his (Macaraeg's) ejectment, he became destitute" since he had no "income except from those derived from transplanting and reaping wherein he earned the amount of P30.00". It was further proved that "for the aqricultural year 1961-62, Jose Niegos realized a gross harvest of 110 cavans out of which he paid his rental to Fidel Teodoro in the amount of 42 cavans and 23 kilos."

On September 7, 1962 the decision under review was rendered, with the following dispositive portion:

IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, judgment is hereby rendered in favor of petitioner Felix Macaraeg and against respondents Fidel Teodoro and Jose Niegos in the tenor and disposition hereinbelow provided, to wit:

1. Jose Niegos is hereby ordered to vacate the landholding in question with an approximate area of four (4) hectares, situated at Barrio Kalisitan, Talugtug Nueva Ecija, in favor of herein petitioner and to refrain from molesting or in any manner disturbing his peaceful possession and cultivation thereof, subject to the condition that said respondent shall have harvested and threshed his crop which he planted for the current agricultural year;

2. Conformably with the preceding paragraph, Fidel Teodoro is hereby ordered to reinstate said petitioner to his

former landholding aforestated and to keep him as the true and lawful tenant in accordance with law;

3. Declaring Exhibit A as a leasehold tenancy contract between the parties for the agricultural year 1960-61 as the term is understood under our tenancy law; as a consequence hereof, Exhibit 4-Teodoro and Exhibit 5-Niegos, i.e. contract of lease between Fidel Teodoro and Jose Niegos is hereby declared void and of no legal effect; and

4. Dismissing petitioner's claim for damages as embodied in his supplemental petition.

Teodoro and Niegos filed separate motions for reconsideration which were denied by the respondent agrarian court in its resolution of November 27, 1962. However, in the same resolution, the court a quo reconsidered, upon motion of Macaraeg, its ruling denying the latter's prayer for damages, thus:

With respect to petitioner's claim for damages as embodied in his supplemental petition, wherein evidence was adduced in support thereof, we believe that its admission is in accordance with Section 2, Rule 17 of the Rules of Court of the Philippines, same not being for the purpose of delaying the proceedings. And, the fact that the Court of Agrarian Relations shall not be bound strictly by the technical rules of evidence but "shall act according to justice and equity and substantial merits of the case", we believe that the evidence to support the claim for damages received during the hearings before the court commissioner is meritorious (Secs. 10 and 11 RA 1267, as amended). Hence, petitioner is entitled to recover damages claimed by him from his landholder in the amount of

85 cavans of palay which is equal to the two years rental of his landholding less his earnings during the same period in the amount of P30.00 only or is equivalent to 3 cavans of palay. In fine, Fidel Teodoro is liable to pay to petitioner the amount of 82 cavans of palay or its cash value of P820.00, computed at P10.00 per cavan plus interest at 10% until fully paid.

After Teodoro's motion to reconsider the foregoing resolution was denied, he interposed on January 5, 1963 the present petition, imputing to the court the following errors:

1. In holding that Macaraeg became a tenant of Teodoro by virtue of the "Contract of Lease" which they executed in April, 1960;

2. Assuming that the foregoing contract was in effect a leasehold tenancy agreement making Macaraeg a tenant of Teodoro in not finding the former guilty of abandonment, an act which terminated their tenancy relation; and

3. In condemning Teodoro to pay damages to Macaraeg for the alleged dispossession, despite the fact that the claim for damages embodied in the abovementioned "Supplemental Petition" below were about to be terminated.

The pertinent provisions of the disputed "Contract of Lease" between Teodoro and Macaraeg read as follows:

That the LESSOR is the registered owner of a certain parcel of land situated at Talugtug, Nueva Ecija, containing an area of THIRTY NINE (39) HECTARES, more or less;

That for and in consideration of the rental of Nine (9) cavans of

palay per hectare for one agricultural year, the LESSOR hereby lets and leases and the LESSEE hereby accepts an undivided portion 4 ½ Hectares of the abovementioned property under the following terms and conditions:

1. That this contract of lease shall only be for the agricultural year 1960-61;

2. That the LESSEE shall give a guaranty to answer for the payment of the lease consideration of this contract;

3. That the rental of 38.7 cavans of palay per hectare shall be paid unto the LESSOR not later than January, 1961;

4. That the corresponding rental must be brought to the Poblacion of Muñoz, Nueva Ecija, to be deposited to any bonded Warehouse at the expense of the LESSEE and in the name of the LESSOR;

5. That the rental must be of the same variety as that produced by the LESSEE;

6. That the LESSOR shall pay for the real property taxes corresponding to the property leased;

7. That violation of any of the terms of this contract shall be sufficient ground to terminate the same with damages against the guilty party;

8. That the property leased shall be used or utilized for agricultural enterprise only;

9. That in case of default on the part of the LESSEE to pay the lease consideration when the same becomes due and payable and the collection for the same reaches the court, the LESSEE hereby binds himself to pay the cost of the suit including

reasonable attorney's fees. (Emphasis supplied)

I. Teodoro contends that the language and tenor of the aforesaid contract clearly manifest the intention of the parties to enter into an ordinary civil lease contract, not a leasehold tenancy agreement as alleged by Macaraeg and sustained by the agrarian court. To start with, Teodoro stresses, the parties denominated the said covenant as a "Contract of Lease", which assigned title discloses their mutual intention to execute an ordinary lease contract, for, otherwise, if they had intended to create a leasehold tenancy relation, they could have accordingly captioned their agreement "with the word tenancy or some other word of similar import". Moreover, Teodoro points out that "in the contract of lease in question it is significant to note that the words landlord and tenant were conspicuous by their complete absence".

The foregoing stance assumed by Teodoro is patently untenable, in the face of the principal features and stipulations of the contract in controversy and the pertinent provisions of existing law on leasehold tenancy. It bears emphasis that the title, label or rubric given to a contract cannot be used to camouflage the real import of an agreement as evinced by its main provisions. Moreover, it is basic that a contract is what the law defines it to be, and not what it is called by the contracting parties. 1

As correctly expressed by the respondent court, "viewed from the four corners of Exhibit A, we have no doubt that the leasehold tenancy contract entered into between petitioner (Macaraeg) and Fidel Teodoro is a pure and simple leasehold tenancy contract as the term is understood under our tenancy laws." This observation of the agrarian court finds anchor in the pertinent provision of the Agricultural Tenancy Act. Thus, section 4 of Rep. Act 1199, as amended by Rep. Act 2263, provides that

Leasehold tenancy exists when a person who, either personally or with the aid of labor available from members of his immediate farm household, undertaken to cultivate a piece of agricultural land susceptible of cultivation by a single person together with members of his immediate farm household, belonging to a legally possessed by another in consideration of a fixed amount in money or in produced or in both.

Furthermore, section 42 of the Agricultural Tenancy Act defines a landlord-lessor as

Any person, natural or judicial, either as owner, lessee, usufructuary or legal possessor of agricultural land, who lets, leases or rents to another said property for purposes of agricultural production and for a price certain of ascertainable either in amount of money or produced;

while a tenant-lessee is defined as

any person who, with the consent of the former (landlord-lessor), tills, cultivates or operates said land, susceptible of cultivation by one individual, personally or with the aid of labor available from among his own immediate farm household.

Gleaned from the foregoing provisions, the following could be synthesized as the principal elements of a lease-hold tenancy contract or relation:

1. The object of the contract or the relationship is an agricultural land which is leased or rented for the purpose of agricultural production;

2. The size of the landholding must be such that it is susceptible of personal cultivation by a single person with assistance from the

members of his immediate farm household;

3. The tenant-lessee must actually and personally till, cultivate or operate said land, solely or with the aid of labor from his immediate farm household; and

4. The landlord-lessor, who is either the lawful owner or the legal possessor of the land, leases the same to the tenant-lessee for a price certain or ascertainable either in a amount of money or produce.

Reverting to the controverted "Contract of Lease", we are of the consensus that it indubitably contains the forgoing essential elements of a leasehold tenancy agreement.

The landholding in dispute is unmistakably an agricultural land devoted to agricultural production. More specifically, the parties stipulated that "the property leased shall be used or utilized for agricultural enterprise only". (Emphasis supplied). Furthermore, the parties also agreed that the farmland must be used for rice production as could be inferred from the stipulation that "the rental of nine (9) cavans of palay per hectare for one agricultural year ... must be of the same variety (of palay) as that produced by the LESSEE". (Emphasis supplied)

The land is definitely susceptible of cultivation by a single person as it is of an area of only four and A half (4-½) hectares. This Court has held 2 that even a bigger area may be cultivated personally by the tenant, singly or with the help of the members of his immediate farm household.

From the stipulation that "the rental must be of the same variety as that produced by the LESSEE", it can reasonably be inferred that the intention of the parties was that Macaraeg personally work the land, which he did as found by the Agrarian Court, thus: "In the instant case,

petitioner (Macaraeg) cultivated the landholding belonging to said respondent (Teodoro) for the agricultural year 1960-61 in consideration of a fixed annual rental." (Emphasis supplied) Moreover, there is no evidence that Macaraeg did not personally cultivate the land in dispute. Neither did Teodoro allege, much less prove, that Macaraeg availed of outside assistance in the cultivation of the said riceland.

Teodoro is the registered owner of the disputed landholding and he delivered the possession thereof to Macaraeg in consideration of a rental certain to be paid in produce. Evidently, there was a valid leasehold tenancy agreement. Moreover, the provision that the rental be accounted in terms of produce — 9 cavans per hectare — is an unmistakable earmark, considering the other stipulations, that the parties did actually enter into a leasehold tenancy relation.

Teodoro further argues, however, that the aforesaid "Contract of Lease" cannot possibly be construed as establishing a leasehold tenancy relation because the parties themselves ignored and repudiated the very essence of tenancy — security of tenure — when they stipulated that "this agreement shall only be for the agricultural year 1960-61".

This argument is unacceptable. The mere fact that the parties fixed and limited the duration of their lease contract to only one agricultural year, does not remove the relationship which they created from the purview of leasehold tenancy, considering the general import of their agreement which irreversibly leads to and clearly justifies tenancy coverage. It is fundamental that the tenant-lessee's security of tenure subsists notwithstanding the termination of the contract which initially established the tenancy relation. In the language of the law, the "expiration of the period of the contract as fixed by the parties ... does not of itself extinguish

the relationship". 3 This is a "practical consequence of the distinction between the tenancy contract which is fixed by the parties, and the tenancy relationship which is maintained and governed by law". 4 Furthermore, section 49 of the Agricultural Tenancy Act provides that

Notwithstanding any agreement or provision of law as to the period of future surrender of the land, in all cases where land devoted to any agricultural purpose is held under any system of tenancy, the tenant shall not be dispossessed of his holdings by the landholder except for any of the causes hereinafter enumerated and only after the same has been proved before and the dispossession is authorized bye the court." (Emphasis supplied)

The abovecited provision does not permit the parties to stipulate at what future time the tenant shall leave or surrender the land. Thus, this Court has held 5 that an agreement whereby the tenant was required to return to the landlord his landholding after one crop year cannot justify the tenant's dispossession after the said period because such agreement is expressly proscribed by law.

Still vehemently contending that he never intended to enter into any tenancy relation with Macaraeg, Teodoro finally argues that construing the abovementioned "Contract of Lease" as a leasehold tenancy agreement would amount to a judicial negation of his freedom to contract.

Needless to stress, this Court frowns upon and rejects any attempt to nullify the legitimate exercise of the right to contract. We agree with Teodoro that as a landholder he has full liberty to enter into a civil lease contract covering his property. What we want to indelibly impress, however, is that once a landowner enters into a contract of lease whereby his land is to be devoted to agricultural production and said

landholding is susceptible of personal cultivation by the lessee, solely or with help of labor coming from his immediate farm household, then such contract is of the very essence of a leasehold agreement, and perforce comes under the direct coverage of the tenancy laws. Otherwise, it would be easy to subvert, under the guise of the liberty to contract, the intendment of the law of protecting the underprivileged and ordinarily credulous farmer from the unscrupulous schemes and pernicious practices of the landed gentry.

II. We now come to the second assignment of error. Teodoro posits that granting the establishment of a leasehold tenancy relation between him and Macaraeg by virtue of the aforesaid "Contract of Lease", the agrarian court nevertheless erred in not finding Macaraeg guilty of abandonment, an act which terminates the tenancy relation and justifies the ejectment of the tenant. In support of his thesis, Teodoro points out that Macaraeg committed a positive act of abandonment when he offered to vacate his leasehold in favor of a certain Luciano Claus, and only after "he could not have his own way of placing Luciano Claus as his successor" did he try to "recover the land holding". Assuming the veracity of the foregoing allegation, a tenant's offer or intention to surrender his hold on the condition that the person named by him should be accepted as his successor, does not of itself constitute abandonment of his farmland.

"The word 'abandon', in its ordinary sense, means to forsake entirely; to forsake or renounce utterly. The dictionaries trace this word to the root idea of 'putting under a ban'. The emphasis is on the finality and the publicity with which some thing or body is thus put in the control of another, and hence the meaning of giving up absolutely, with intent never again to resume or claim one's rights or interests." 6 In other words, the act of abandonment constitutes actual, absolute and irrevocable desertion of

one's right or property. In the case at bar, Macaraeg merely intended to vacate his leasehold possession on the condition that a certain Claus be taken as his successor. Hence, his act did not constitute desertion of his leasehold as it was a mere intended surrender of the same. And as correctly espoused by the counsel for the respondent court, it is "only through the actual surrender of the land that tenancy relation terminates; no amount of intention to surrender severs the relationship". Furthermore, the said act of Macaraeg was not an absolute renunciation of his leasehold possession, as it was in fact clearly conditional.

However, Teodoro also claims, with characteristic certitude that Macaraeg did actually abandon work on the land in dispute and that even the decision under review contains a finding to this effect. We find no statement in the agrarian court's decision sustaining Teodoro's view. On the contrary, we perceive truth in the respondent court's counsel's manifestation that

The only times that the tenant herein did not work the land were (1) during the time it was undergoing its regular dry season fallow, and, ... (2) after he was prohibited from plowing the land by a certain Niegos, an agent of petitioner. Failure to cultivate during the dry season fallow definitely does not amount to abandonment (Cf. De la Cruz vs. Asociacion Zangera Casilan et al., 83 Phil. 214). Likewise, failure to cultivate the land by reason of the forcible prohibition to do so by a third party cannot also amount to abandonment, for abandonment presupposes free will.

Anent the charge of abandonment, it is also pertinent to note that four days after Macaraeg received a letter from Teodoro and his wife advising him that the landholding in question will be given to another tenant, he lost no time in inquiring from the Tenancy Mediation Commission at Cabanatuan

City about his rights as a leasehold tenant. It would appear therefore that Macaraeg's immediate reaction to his landlord's design to dispossess him negates the act of abandonment imputed to him.

Moreover, Teodoro's pretension that Macaraeg had abandoned the disputed landholding was squarely rejected by the agrarian court, thus:

In the instant case, while petitioner had intentions to surrender his landholding to respondent after the harvest for the agricultural (year) 1960-61 which led the latter to advise the former not to give his landholding to Luciano Claus, yet that surrender did not materialize because said petitioner had apparently changed his mind. For as early as March 6, 1961, petitioner went to the Office of the Tenancy Mediation Commission, Cabanatuan City for consultation. As a matter of fact, said Commission wrote a letter to Fidel Teodoro and his wife advising them to enjoin their overseer, Benito Ismael, from ejecting petitioner.

During the intervening period, Fidel Teodoro and his wife entered into another lease contract of tenancy with Jose Niegos. For this reason, Mariano Niegos, son of Jose Niegos, prevented petitioner from plowing his landholding when he found him in the premises on June 1, 1961. However, notwithstading this incident, Fidel Teodoro opened the door for negotiations. In fact, as late as June 23, 1961, when petitioner went to the house of Fidel Teodoro in Manila, a conference was set for that purpose at the house of Benito Ismael in Muñoz, Nueva Ecija which did not take place because of the absence of petitioner. Under these circumstances, it appears to our

mind that while negotiations for settlement were still pending, yet petitioner has not, in truth and in fact, surrendered his landholding. (Emphasis supplied)

We are not at liberty to reverse the foregoing finding of fact in the absence of any proof that it is unfounded or was arbitrarily arrived at or that the Court had failed to consider important evidence to the contrary. 7 This Court has consistently ruled that the findings of fact of the Court of Agrarian Relations will not be disturbed on appeal where there is substantial evidence to support them. 8 In the case at bar, the finding of fact by the by the respondent court anent the issue of abandonment rests on substantial evidence.

III. Toward the end of the proceedings in the respondent court, Macaraeg interposed a pleading which he denominated "supplemental petition", wherein he asked for damages as a result of his dispossession. The said "supplemental petition" was given due course by the hearing commissioner and Macaraeg was allowed to present evidence in support thereof. On the basis of the evidence thus adduced, the respondent court awarded damages to Macaraeg as decreed in its abovementioned resolution of November 27, 1962.

Teodoro maintains that the respondent court erred in admitting the said "supplemental pleading" on the basis of section 2, Rule 17 (now section 3 of Rule 10 of the Revised Rules of Court) which exclusively pertains to amendment of pleadings, and has nothing to do with the interposition of supplemental pleadings which is separately governed by section 5 of Rule 17 (now section 5 of Rule 10). Teodoro avers, moreover, that since Macaraeg filed his claim for damages only when the hearing below was about to end, his inaction must be considered as a waiver of such claim or that he should be considered guilty of fatal negligence.

In resolving this last assignment of error, attentions must be centered on the liberal policy which frees the Court of Agrarian Relations from the fetters of formalistic procedure. As aptly observed in one case,9

Social justice would be a meaningless term if in a situation like the present, an element of rigidity would be affixed to procedure precepts and made to cover the matter. Flexibility should not be ruled out. Precisely, what is sought to be accomplished, by such a fundamental principle expressly so declared by the Constitution (Art. II, sec. 5) is the effectiveness of the community's effort to assist the economically underprivileged. For under existing conditions, without such succor and support, they might not, unaided, be able to secure justice for themselves....

Moreover, there is equally the obligation on the part of the State to afford protection to labor. The responsibility is incumbent then, not only on the legislative and executive branches but also on the judiciary, to translate this pledge into a living reality. The present case is an appropriate occasion for the discharge of such a trust. To preclude relief under the circumstances herein disclosed would be to fail to submit to the dictates of a plain constitutional duty. That we should not allow to happen.

Since the abovementioned "supplemental pleading" was filed without intent to delay the proceedings, the agrarian court exercised sound discretion in giving it due course in order that "the real matter in dispute and all matters in the action in dispute between the parties may, as far as possible, be completely determined in a single proceeding". Moreover Teodoro has no reason to complain, for he was

accorded every opportunity to controvert Macaraeg's claim for damages, but apparently he did not, as in fact he does not here traverse the substantiality of the award.lawphi1.nêt

Significantly, the Court of Agrarian Relations is not restricted to the specific relief claimed or demanding made by the parties to the dispute, but may include in the order or decision any matter or determination which may be deemed necessary and expedient for the purpose of settling the dispute or of preventing further disputes, provided said matter for determination has been established by competent evidence during the hearing". 10 In words, the respondent court could have determined Macaraeg's claim for damages even without his "supplemental petition", provided there was proof to substantiate such claim (and such requisite evidence was not wanting). Hence if the agrarian court could, have awarded damages in favor of Macaraeg even in the absence of a specific prayer; then there is no conceivable reason to bar the respondent court from granting the same with the interposition of the aforesaid "supplemental petition" which explicitly and unmistakeably prays for damages resulting from Macaraeg's dispossession.

We hasten to modify however, the award of damages in so far as it deducts from the total amount recoverable by Macaraeg the sum of P30 or its equivalent of 3 cavans of palay, representing his earnings during the period of his unlawful ejectment. This part of the award contravenes section 27(1) of the Agricultural Tenancy Act which makes the erring landlord "liable to the tenant for damages to the extent of the landholder's participation in the harvest in addition to the tenant's right under Section twenty-two of this Act". And section 22(1) provides that the "tenant shall be free to work elsewhere whenever the nature of his farm obligations warrants his temporary absence from his holdings".

Consequently, Macaraeg's measly earning of P30 during the period of his dispossession should not be deducted from the total amount of damages due to him. Interpreting the abovecited section 27(1) in relation to section 22(1), this Court, speaking through Mr. Justice J.B.L. Reyes held that

The earnings of the tenants during the period of unlawful ejectment are not now deductible from the award of damages. In the case of Potenciano vs. Estefani L-7690, promulgated on 27 July 1955, this Court, on grounds of equity, ruled to deduct such income but said case was decided under the prior law, Act 4054. The above-quoted Section 27(1) of Republic Act No. 1199, as amended, which is the one applicable to the present case, not only provides for a quantum of damages to the tenant, based on the landlord's share in the harvest, but adds thereto his right under section 22, which states:

(1) the tenant shall be free to work elsewhere whenever the nature of his farm obligations warrants his temporary absence from his holdings.

This right, although already granted under section 20 of Act 4054, was not then a right additional to the recovery of damages consequent to unlawful dismissal, but under Republic Act 1199, as amended, it is to be added to the damages recoverable.11

ACCORDINGLY, the decision and resolution under review are hereby affirmed, with the sole modification that the earnings of the herein respondent during the period of his dispossession shall not be deducted from the award of damages. Cost against the petitioner.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Capistrano, Teehankee and Barredo, JJ., concur.