G.R. No.

70736 March 16, 1987

BONIFACIO L. HILARIO and EDUARDA M. BUENCAMINO HILARIO, petitioners,
vs.
HONORABLE INTERMEDIATE APPELLATE COURT AND SALVADOR BALTAZAR, respondents.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari of the Court of Appeals' decision declaring Salvador Baltazar a leasehold tenant entitled to security of tenure on a
parcel of land consisting of 1,740 square meters.
On January 13, 1981, Salvador Baltazar filed a verified complaint with the Court of Agrarian Relations, Branch VI at Baliuag, Bulacan alleging that since
January, 1955 he had been in continuous possession as a share tenant of a parcel of land with an area of about 2 hectares situated in San Miguel,
Bulacan, which was previously owned by one Socorro Vda. de Balagtas; that on or about December 27, 1980, and thereafter, the spouses Hilario began to
threaten him to desist from entering and cultivating a portion of the aforesaid land with an area of 4,000 square meters and otherwise committed acts in
violation of his security of tenure; that the Hilarios were contemplating the putting up of a fence around the said portion of 4,000 square meters and that
unless restrained by the court, they would continue to do so to his great irreparable injury.
Baltazar claims that he became a tenant of Socorro P. Vda. de Balagtas on the latter's two-hectare landholding located at San Juan, San Miguel, Bulacan
by virtue of a "Kasunduan" executed between them on January 8, 1979, He states that he erected his house and planted "halaman," the produce of which
was divided at 70-30 and 50-50 (sic) in his favor. After the death of Socorro P. Vda. de Balagtas, he allegedly gave the share pertaining to the landowner to
her daughter Corazon Pengzon. It was only in December, 1980 that he came to know that a portion of the 2 hectares or 4,000 square meters is already
owned by the Hilarios.
On the other hand, the petitioners aver that they acquired the landholding of 4,000 square meters from the Philippine National Bank (PNB) after it had been
foreclosed by virtue of a deed of sale executed between Bonifacio Hilario and the PNB. The former owner Corazon Pengzon testi fied that she owned only
two lots-Lot 427-B with an area of 841 square meters and Lot 427-C with an area of 899 square meters with a total area of 1,740 square meters. The other
2 lots were owned by Ruben Ocampo and Juan Mendoza. She further testified that in 1964 at the time of the partition of the property, she declared the
property for classification purposes as "bakuran" located in the Poblacion and had no knowledge that there were other things planted in it except bananas
and pomelos.
On November 27, 1981, the Court of Agrarian Relations (CAR) in determining whether or not respondent Baltazar is the tenant of the petitioners ruled that
the land in question is not an agricultural landholding but plain "bakuran," hence, Baltazar is not a tenant on the land.
On January 30, 1982, the Court of Appeals, however, remanded the case to the lower court for further proceedings on the ground that the findings of the
Court of Agrarian Relations (CAR) were not supported by substantial evidence.
In compliance with the order of the Court of Appeals, the CAR admitted additional evidence.
On December 19, 1983, the CAR admitted the petitioners' third party complaint filed with leave against the Philippine National Bank (PNB) which states
that in the event that judgment would be rendered against them under the original complaint, the PNB must contribute, indemnify, and reimburse the
spouses the full amount of the judgment.
On the basis of the parties' and their witnesses' affidavits containing detailed narrations of facts and documentary exhibits which served as their direct
testimonies pursuant to PD 946, the CAR found that there was no tenancy relationship existing between Baltazar and the former owner, Corazon Pengzon.
The dispositive portion of the decision reads:
WHEREFORE, judgment is hereby rendered declaring plaintiff not to be a tenant on the landholding described in the complaint and
ordering his ejectment therefrom.
The third-party complaint is hereby dismissed for lack of merit. (pp. 25- 26, Rollo)
Again, respondent Salvador Baltazar appealed to the then Intermediate Appellate Court (IAC).
The IAC, however, reversed the decision of the CAR and held that:
... [T]he decision appealed from is hereby SET ASIDE, and another one entered declaring plaintiff-appellant ii leasehold tenant entitled
to security of tenure on the land in question consisting of 1,740 square meters. Costs against defendants-appellees. (p. 31, Rollo)
Consequently, the spouses Hilarios filed this petition for review making the following assignments of errors:
I. THE INTERMEDIATE APPELLATE COURT ERRED IN DISTURBING THE FINDINGS OF FACTS AND DECISION OF THE COURT OF AGRARIAN
RELATIONS (CAR) WHICH IS SUPPORTED BY SUBSTANTIAL EVIDENCE.
II. THE INTERMEDIATE APPELLATE COURT ERRED IN SUBSTITUTION (SIC) THE FINDINGS OF FACTS OF CAR, OF ITS OWN FINDINGS.
III. THE INTERMEDIATE APPELLATE COURT ERRED IN NOT AFFIRMING THE DECISION OF CAR, FINDING THE LOTS IN QUESTION WITH AN
AREA OF 1,740 SQUARE METERS AS RESIDENTIAL LOT AND PRIVATE RESPONDENT NOT TO BE A TENANT.
We agree with the respondent court when it stated that it can affirm on appeal the findings of the CAR only if there is substantial evidence to support them.
However, after a careful consideration of the records of the case, we find no valid reason to deviate from the findings of the CAR. The evidence presented
by the petitioners is more than sufficient to justify the conclusion that private respondent Salvador Baltazar is not a tenant of the landholding in question.
Salvador Baltazar claims: that he is working on the land in question pursuant to a "kasunduan" executed between him and Socorro Balagtas. The contract
covers a two-hectare parcel of land. The disputed landholding is only 4,000 square meters more or less, although Baltazar claims that this area is a portion
of the two hectares in the contract. He testified that sometime in 1965, he relinquished 1.5 hectares of the two hectares subject of the "kasunduan" to
Nemesio Ocampo, Juan Mendoza, Miguel Ocampo and Miguel Viola and what remained under his cultivation was 1/2 hectare owned by Corazon
Pengson. He stated that when Socorro Balagtas died, no new contract was executed. However, he insists that the old contract was continued between
Corazon Pengson and himself. (Rollo, p. 23).
This claim is controverted by the testimony of Corazon Pengson herself which we quote as follows:
Q After the death of your mother in 1965, what step, if any, have you taken, regarding this subject landholding or
after the death of your mother how did you
Q ... administer this landholding in 1963, 1964, 1965, 1966, etc?
A What I did is to fix the title of ownership, sir.
COURT:
Q What else?
A None other, Your Honor.
Q After the death of your mother in 1962, have you seen Mr. Salvador Baltazar in this landholding in question?
A Yes, Your Honor.
Q What was he doing?
WITNESS:
A We are neighbors, Your Honor, sometimes he visits and goes to our place and we used to meet there, Your
Honor.
Q What was the purpose of his visit and your meeting in this landholding?
A Sometimes when he visits our place he tens us that there are some bananas to be harvested and sometimes
there are other fruits, your Honor.
Q You mean to say he stays in this subject landholding consisting of 7,000 square meters?
A After the survey it turned out-
A . . . that he is occupying another lot which I learned that property does not belong to us, Your Honor.
Q what was your arrangement regarding his stay in that landholding which you don't own?
A He said that he had a contract with my late mother which I don't know; in order not to cause any trouble because
I will be bothered in my business, I told him to continue, Your Honor.
Q What do you mean when you-
COURT:
(continuing)
. . .told him to continue?
A What I mean to say is that he can stay there although I don't understand the contract with my mother, Your
Honor.
Q Was he paying rentals for his stay in that lot?
A No, Your Honor (T.S.N., pp. 15-19, hearing of August 5, 1981).
Corazon Pengson further explained that she did not receive any share from the produce of the land from 1964 up to the filing of the case and she would
not have accepted any share from the produce of the land because she knew pretty well that she was no longer the owner of the lot since 1974 when it
was foreclosed by the bank and later on purchased by the spouses Hilarios.
We note the CAR's finding:
Tenancy relationship is indivisible. The two-hectare land subject of plaintiff's alleged contract with Socorro Balagtas having been
parcelled into seven (7) and possession thereof relinquished/surrendered in 1965 results in the termination of plaintiff's tenancy
relationship with the previous owner/landholder. Such being the case, he cannot now claim that the landholding in question consisting
of 4,000 square meters, more or less, is being cultivated by him under the old contract. The owner thereof Corazon Pengson has no
tenancy relationship with him (plaintiff). (p. 25, Rollo)
From the foregoing, it is clear that Corazn Pengson did not give her consent to Baltazar to work on her land consisting of only 1,740 square meters. We
agree with the CAR when it said:
The law accords the landholder the right to initially choose his tenant to work on his land. For this reason, tenancy relationship can only
be created with the consent of the true and lawful landholder through lawful means and not by imposition or usurpation. So the mere
cultivation of the land by usurper cannot confer upon him any legal right to work the land as tenant and enjoy the protection of security
of tenure of the law (Spouses Tiongson v. Court of Appeals, 130 SCRA 482) (Ibid)
And in the case of Tuazon v. Court of Appeals (118 SCRA 484), this Court had the occasion to explain:
xxx xxx xxx
... Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It is also a legal relationship.
The intent of the parties, the understanding when the farmer is installed, and, as in this case, their written agreements, provided these
are complied with and are not contrary to law, are even more important."
The respondent court ruled that the fact that the land in question is located in the poblacion does not necessarily make it residential.
The conclusion is purely speculative and conjectural, We note that the evidence presented by the petitioners sufficiently establishes that the land in
question is residential and not agricultural.
As we stated in Tiongson v. Court of Appeals (supra) "the key factor in ascertaining whether or not there is a landowner-tenant relationship in this case is
the nature of the disputed property."
The records show that the disputed property, only 1,740 square meters in area, is actually located in the poblacion of San Miguel, Bulacan not far from the
municipal building and the church. It is divided into two lots-Lot 427-B with an area of 841 square meters and Lot 427-C with an area of 899 square meters.
Two other lots which the respondent claims to cultivate as "tenant" were originally owned by Ruben Ocampo and Juan Mendoza, not Corazon Pengson,
through whom the respondent traces his alleged tenancy rights.
Respondent Baltazar is a full-time government employee working in the Bureau of Plant Industry.
The disputed lots were acquired at a foreclosure sale from the Philippine National Bank. They were purchased as residential lots and the deed of sale
describes them as "residential." The inspection and appraisal report of the PNB classified the land as residential. The declaration of real property on the
basis of which taxes are paid and approved by the Acting Provincial Assessor of Bulacan classifies the land as residential. The tax declarations show that
the 841 square meter lot is assessed for tax purposes at P25,236.00 while the 899 square meter lot is assessed at P26,920.00. The owner states that the
land has only bananas and pomelos on it. But even if the claim of the private respondent that some corn was planted on the lots is true, this does not
convert residential land into agricultural land.
The presumption assumed by the appellate court, that a parcel of land which is located in a poblacion is not necessary devoted to residential purposes, is
wrong. It should be the other way around. A lot inside the poblacion should be presumed residential or commercial or non-agricultural unless there is
clearly preponderant evidence to show that it is agricultural.
The respondent court also failed to note that the alleged tenant pays no rental or share to the landowners. Baltazar made a vague allegation that he shared
70-30 and 50-50 of the produce in his favor. The former owner flatly denied that she ever received anything from him,
The requirements set by law for the existence of a tenancy relationship, to wit: (1) The parties are the landholder and tenant; (2) The subject is agricultural
land; (3) The purpose is agricultural production; and (4) There is consideration; have not been met by the private respondent.
We held in Tiongson v. Court of Appeals, cited above that:
All these requisites are necessary in order to create tenancy relationship between the parties and the absence of one or more
requisites do not make the alleged tenant a de facto tenant as contra-distinguished from a de jure tenant. This is so because unless a
person has established his status as a dejure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform
Program of the Government under existing tenancy laws ... (emphasis supplied).
WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals is hereby REVERSED and SET ASIDE and the decision of the
Court of Agrarian Relations is AFFIRMED.
SO ORDERED.

NICORP MANAGEMENT AND G.R. No. 176942
DEVELOPMENT CORPORATION,
Petitioner, Present:

Ynares-Santiago, J. (Chairperson),
- versus - Austria-Martinez,
Chico-Nazario,
Nachura, and
Reyes, JJ.
LEONIDA DE LEON,
Respondent.

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

SALVADOR R. LIM, G.R. No. 177125
Petitioner,

- versus -
Promulgated:
LEONIDA DE LEON,
Respondent. August 28, 2008
x ---------------------------------------------------------------------------------------- x

These consolidated petitions assail the November 8, 2006 Decision
[1]
of the Court of Appeals in CA-G.R. SP No. 92316, finding respondent Leonida
de Leon as a bonafide tenant of the subject property, thereby reversing and setting aside the Decision of the Department of Agrarian Reform Adjudication
Board (DARAB) in DARAB Case No. 13502
[2]
which affirmed the Decision
[3]
of the Regional Adjudicator in DARAB Case No. 0402-031-03. Also assailed is
the March 1, 2007 Resolution
[4]
denying the motions for reconsideration.

On August 26, 2004, respondent filed a complaint before the Office of the Provincial Agrarian Reform Adjudicator (PARAD) of Region IV- Province of
Cavite, praying that petitioners Salvador R. Lim and/or NICORP Management and Development Corporation (NICORP) be ordered to respect her tenancy
rights over a parcel of land located in Barangay Mambog III, Bacoor, Cavite, registered under TCT No. T-72669 in the name of Leoncia De Leon and
Susana De Leon Loppacher (De Leon sisters), who were likewise impleaded as parties-defendants in the suit.

Respondent alleged that she was the actual tiller and cultivator of the land since time immemorial with full knowledge and consent of the owners,
who were her sisters-in-law; that sometime in 2004, petitioners circulated rumors that they have purchased the property from the De Leon sisters; that
petitioners ignored respondents requests to show proof of their alleged ownership; that on August 12, 2004, petitioners entered the land and uprooted and
destroyed the rice planted on the land and graded portions of the land with the use of heavy equipment; that the incident was reported to the Municipal
Agrarian Reform Office (MARO) which issued a Cease and Desist Order
[5]
but to no avail.

Respondent thus prayed that petitioners be ordered to respect her tenancy rights over the land; restore the land to its original condition and not to
convert the same to non-agricultural use; that any act of disposition of the land to any other person be declared null and void because as a tenant, she
allegedly had a right of pre-emption or redemption over the land; and for actual damages and attorneys fees.
[6]


Petitioner Lim denied that respondent was a tenant of the subject property under the Comprehensive Agrarian Reform Program (CARP). He alleged
that respondent is a septuagenarian who is no longer physically capable of tilling the land; that the MARO issued a certification
[7]
that the land had no
registered tenant; that respondent could not be regarded as a landless tiller under the CARP because she owns and resides in the property adjacent to the
subject land which she acquired through inheritance; that an Affidavit of Non-Tenancy
[8]
was executed by the De Leon sisters when they sold the property
to him.

Moreover, Lim claimed that respondent and her family surreptitiously entered the subject land and planted a few crops to pass themselves off as
cultivators thereof; that respondent tried to negotiate with petitioner Lim for the sale of the land to her, as the latter was interested in entering into a joint
venture with another residential developer, which shows that respondent has sufficient resources and cannot be a beneficiary under the CARP; that the
land is no longer classified as agricultural and could not thus be covered by the CARP. Per certification issued by the Office of the Municipal Planning and
Development Coordinator of Bacoor, Cavite, the land is classified as residential pursuant to a Comprehensive Land Use Plan approved by the
Sangguniang Panlalawigan.
[9]


For its part, petitioner NICORP asserted that it was not a proper party to the suit because it has not actually acquired ownership of the property as it
is still negotiating with the owners. However, it joined in petitioner Lims assertion that respondent is not a qualified tenant; and that the subject land could
not be covered by the CARP since it is below the minimum retention area of five hectares allowed under the program.
[10]
Eventually, NICORP purchased
the subject property from Lim on October 19, 2004.
[11]


The De Leon sisters did not file a separate answer to respondent's complaint.

Meanwhile, Provincial Adjudicator Teodoro A. Cidro, to whom the case was assigned, died. Thus, the case was referred to the Office of the
Regional Agrarian Reform Adjudicator (RARAD) for resolution.

In compliance with the directive of the RARAD, respondent submitted as evidence an Extra-Judicial Settlement of Estate
[12]
dated February 20, 1989
to prove that, as a result of her relationship with her sisters-in-law, she was made a tenant of the land; a tax declaration
[13]
showing that the land was
classified as irrigated riceland; several affidavits
[14]
executed by farmers of adjacent lands stating that respondent and her family were tenants-farmers on
the subject land; and several documents and receipts
[15]
to prove the agricultural activities of respondent and her family.

Respondent likewise submitted a handwritten letter
[16]
of Susana De Leon addressed to respondents daughter Dolores, showing that the former
purportedly acknowledged respondent's son, Rolando, as the legitimate tenant-lessee on the land. However, Rolando died on September 1, 2003 as
evidenced by his death certificate.
[17]


On December 6, 2004, the RARAD rendered a Decision dismissing the complaint for failure of respondent to prove by substantial evidence all the
requisites of an agricultural tenancy relationship.
[18]
There was no evidence to show that the De Leon sisters constituted respondent as tenant-lessee on
the land; neither was it proved that there was sharing of harvests with the landowner.

The DARAB affirmed the decision of the RARAD.
[19]


On appeal, the Court of Appeals reversed and set aside the findings of the RARAD/DARAB stating that there was sufficient evidence to prove
the elements of an agricultural tenancy relationship; that the letter of Susana De Leon to Dolores clearly acknowledged respondents son, Rolando, as a
tenant, as well as respondents share in the proceeds of the sale of the land; and that the sharing of produce was established by the affidavits of
neighboring farmers that were not controverted by petitioners.

The appellate court further held that the reclassification of the land by the Sangguniang Panlalawigan as residential cannot be given weight because
it is only the Department of Agrarian Reform (DAR) that can reclassify or convert an agricultural land to other uses or classifications; and that the sale of
the land by the De Leon sisters to petitioner Lim is void because it violated Section 70 of Republic Act (R.A.) No. 6657
[20]
or the Comprehensive Agrarian
Reform Law (CARL).

Petitioners filed a motion for reconsideration but it was denied.
[21]
Hence, petitioners Lim and NICORP separately filed petitions under Rule 45 of the
Rules of Court, which were consolidated per resolution of the Court dated June 4, 2007.
[22]


Petitioners allege that respondent failed to prove by substantial evidence all the elements of a tenancy relationship; hence the Court of Appeals erred
in finding that respondent has tenancy rights over the subject land.

The petitions are meritorious.

There is a tenancy relationship if the following essential elements concur: 1) the parties are the landowner and the tenant or agricultural lessee; 2)
the subject matter of the relationship is an agricultural land; 3) there is consent between the parties to the relationship; 4) the purpose of the relationship is
to bring about agricultural production; 5) there is personal cultivation on the part of the tenant or agricultural lessee; and 6) the harvest is shared between
landowner and tenant or agricultural lessee.
[23]
All the foregoing requisites must be proved by substantial evidence and the absence of one will not make
an alleged tenant a de jure tenant.
[24]
Unless a person has established his status as a de jure tenant, he is not entitled to security of tenure or covered by
the Land Reform Program of the Government under existing tenancy laws.
[25]


In the instant case, there is no substantial evidence to support the appellate courts conclusion that respondent is a bona fide tenant on the subject
property. Respondent failed to prove the third and sixth elements cited above. It was not shown that the De Leon sisters consented to a tenancy
relationship with respondent who was their sister-in-law; or that the De Leon sisters received any share in the harvests of the land from respondent or that
the latter delivered a proportionate share of the harvest to the landowners pursuant to a tenancy relationship.

The letter of Susana De Leon to Dolores, which allegedly proved consent of the De Leon sisters to the tenancy arrangement, partially reads:


Nuong ako ay nandiyan, hindi nagkaayos ang bukid kasi ang iyong Kuya Roly ay ayaw na si Noli ang ahente. Pero bago ako
umalis ay nagkasundo kami ni Buddy Lim (Salvador) na aayusin niya at itutuloy ang bilihan at siya ang bahala sa Kuya Roly mo.

Kaya nagkatapos kami at ang kasama ng Kuya mo ngayon ay si Buddy Lim. Ang pera na para sa kasama ay na kay Buddy
Lim. Ang kaparte ng Nanay Onching (Leoncia) mo ay nasa akin ang karamihan at ako na ang mag-aasikaso.

The Court cannot agree with the appellate courts conclusion that from the tenor of the letter, it is clear that Susana acknowledged respondent's
deceased son as kasama or tenant, and recognized as well respondents share in the proceeds of the sale, thus proving the existence of an implied
leasehold relations between the De Leon sisters and respondent.
[26]
The word kasama could be taken in varying contexts and not necessarily in relation
to an agricultural leasehold agreement. It is also unclear whether the term kasama referred to respondent's deceased son, Rolando, or some other
person. In the first sentence of the second paragraph, the word kasama referred to petitioner Lim while the second sentence of the same paragraph, did
not refer by name to Rolando as kasama.

Likewise, Nanay Onching, as mentioned in the letter, referred to Leoncia, one of the De Leon sisters, on whose behalf Susana kept part of the
proceeds of the sale, and not herein respondent as understood by the Court of Appeals, who had no right to such share. It is Leoncia who co-owned the
property with Susana and who is therefore entitled to a part of the sale proceeds.

Significantly, respondent was not mentioned at all in Susanas letter, but only her son, Rolando. However, even if we construe the term kasama as
pertaining to Rolando as a tenant of the De Leon sisters, respondent will not necessarily be conferred the same status as tenant upon her sons death. A
direct ascendant or parent is not among those listed in Section 9 of Republic Act No. 3844 which specifically enumerates the order of succession to the
leasehold rights of a deceased or incapacitated agricultural tenant, to wit:

In case of death or permanent incapacity of the agricultural lessee to work his landholding, the leasehold shall continue
between the agricultural lessor and the person who can cultivate the landholding personally, chosen by agricultural lessor wi thin one
month from such death or permanent incapacity, from among the following: a) the surviving spouse; b) the eldest direct descendant by
consanguinity; or (c) the next eldest descendant or descendants in the order of their age. x x x Provided, further that in the event that
the agricultural lessor fails to exercise his choice within the period herein provided, the priority shall be in accordance with the order
herein established.

There is no evidence that the De Leon sisters consented to constitute respondent as their tenant on the subject land. As correctly found by the
RARAD/DARAB, even the Extra-Judicial Settlement of Estate that respondent offered in evidence to prove the alleged consent does not contain any
statement from which such consent can be inferred.
[27]
Absent any other evidence to prove that the De Leon sisters consented to the tenurial arrangement,
respondents cultivation of the land was by mere tolerance of her sisters-in-law.

The appellate court found that the element of sharing in the produce of the land was established by the affidavits of neighboring farmers attesting to
the fact that respondent cultivated the land since time immemorial.
[28]
However, perusal of the said affidavits reveals that there is nothing therein that would
indicate a sharing of produce between the De Leon sisters and respondent. The affidavits did not mention at all that the De Leon sisters received a portion
of the harvests or that respondent delivered the same to her sisters-in-law. The affidavits failed to disclose the circumstances or details of the alleged
harvest sharing; it merely stated that the affiants have known respondent to be the cultivator of the land since time immemorial. It cannot therefore be
deemed as evidence of harvest sharing.

The other pieces of evidence submitted by respondent likewise do not prove the alleged tenancy relationship. The summary report of the Philippine
Crop Insurance Corporation, the official receipts issued by the National Food Authority and the certificate of membership in Bacoor Agricultural Multi-
Purpose Cooperative,
[29]
only prove that respondent and her family engaged in agricultural activities but not necessarily her alleged status as tenant of the
De Leon sisters. Besides, these documents are not even in the name of respondent but were issued in favor of her daughter Dolores.

That respondent was allowed to cultivate the property without opposition, does not mean that the De Leon sisters impliedly recognized the existence
of a leasehold relation with respondent. Occupancy and continued possession of the land will not ipso facto make one a de jure tenant.
[30]
The principal
factor in determining whether a tenancy relationship exists is intent. Tenancy is not a purely factual relationship dependent on what the alleged tenant
does upon the land but is, moreso, a legal relationship.
[31]
Thus, the intent of the parties, the understanding when the farmer is installed, and their written
agreements, provided these are complied with and are not contrary to law, are more important.
[32]


Finally, the sale of the subject land to petitioners did not violate Sections 65
[33]
and 73
[34]
(c) of R.A. No. 6657. There was no illegal conversion of the
land because Sec. 65 applies only to lands which were covered by the CARP, i.e. those lands beyond the five-hectare retention limit allowed to landowners
under the law, which were distributed to farmers-beneficiaries. In the instant case, it was not shown that the subject land was covered by the CARP.
Neither was it shown that the sale was made to circumvent the application of R.A. 6657 or aimed at dispossessing tenants of the land that they till.

The sale of the land to petitioners likewise did not violate R.A. No. 3844 or the Agricultural Tenancy Act. Considering that respondent has failed to
establish her status as de juretenant, she has no right of pre-emption or redemption under Sections 11
[35]
and 12
[36]
of the said law. Even assuming that
respondents son Rolando was a tenant of the De Leon sisters, his death extinguished any leasehold on the subject land. Section 8
[37]
of R.A. 3844
specifically provides for the extinction of an agricultural leasehold relation, in the absence of persons enumerated under Section 9 of the law who are
qualified to succeed the deceased tenant.

WHEREFORE, the petitions are GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 92316 and the Resolution denying the
motions for reconsideration areREVERSED and SET ASIDE. The Decision of the Department of Agrarian Reform Adjudication Board in DARAB Case No.
13502, which affirmed in toto the Decision of the Regional Adjudicator in DARAB Case No. 0402-031-03, dismissing the complaint of respondent Leonida
De Leon for lack of merit, is REINSTATED and AFFIRMED.SO ORDERED.

-----------------------------
FIRST DIVISION
[G.R. No. 108941. July 6, 2000]
REYNALDO BEJASA AND ERLINDA BEJASA, petitioners, vs. THE HONORABLE COURT OF APPEALS, Special Sixteenth Division, ISABEL
CANDELARIA and JAMIE DINGLASAN, respondents.
D E C I S I O N
PARDO, J.:
This is a petition
[1]
assailing the decision of the Court of Appeals
[2]
reversing the decision of the Regional Trial Court, Calapan, Oriental Mindoro
[3]
and
ordering petitioners Reynaldo and Erlinda Bejasa (hereinafter referred to as "the Bejasas") to surrender the possession of the disputed landholdings to
respondent Isabel Candelaria ("hereinafter referred to as Candelaria") and to pay her annual rental from 1986, attorneys fees, litigation expenses and
costs.
[4]

Inescapably, the appeal involves the determination of a factual issue. Whether a person is a tenant is a factual question.
[5]
The factual conclusions of the
trial court and the Court of Appeals are contradictory and we are constrained to review the same.
[6]

We state the undisputed incidents.
This case involves two (2) parcels of land covered by TCT No. T-58191
[7]
and TCT No. T-59172,
[8]
measuring 16 hectares and 6 hectares more or less,
situated in Barangay Del Pilar, Naujan, Oriental Mindoro. The parcels of land are indisputably owned by Isabel Candelaria.
On October 20, 1974, Candelaria entered into a three-year lease agreement over the land with Pio Malabanan (hereinafter referred to as "Malabanan"). In
the contract, Malabanan agreed among other things: "to clear, clean and cultivate the land, to purchase or procure calamansi, citrus and rambutan seeds
or seedlings, to attend and care for whatever plants are thereon existing, to make the necessary harvest of fruits, etc."
[9]

Sometime in 1973, Malabanan hired the Bejasas to plant on the land and to clear it. The Bejasas claim that they planted citrus, calamansi, rambutan and
banana trees on the land and shouldered all expenses of production.
On May 3, 1977, Candelaria gave Malabanan a six-year usufruct over the land, modifying their first agreement. As per the agreement, Malabanan was
under no obligation to share the harvests with Candelaria.
[10]

Sometime in 1983, Malabanan died.
On September 21, 1984, Candelaria constituted respondent Jaime Dinglasan (hereinafter referred to as "Jaime) as her attorney-in-fact, having powers of
administration over the disputed land.
[11]

On October 26, 1984, Candelaria entered into a new lease contract over the land with Victoria Dinglasan, Jaimes wife (hereinafter referred to as
"Victoria"). The contract had a term of one year.
[12]

On December 30, 1984, the Bejasas agreed to pay Victoria rent of P15,000.00 in consideration of an "aryenduhan" or "pakyaw na bunga"
[13]
agreement,
with a term of one year. The agreement is below quoted:
[14]

"Ako si Victoria Dinglasan bilang tagapamahala ni Isabel Candelaria ay ipinaaryendo kay Reynaldo Bejasa ang lupang dating aryendo
ni Pio Malabanan sa nasabing Ginang Buhat sa ika-30 ng Disyembre 1984 hanggang Ika-30 ng Disyembre 1985. Ako ay tumanggap
sa kanya ng pitong libong piso at ito ay daragdagan pa niya ng walong libong piso (P8,000) dito sa katapusan ng buwan ng Disyembre
1984.
(signed)
Reynaldo Bejasa
(signed)
Victoria Dinglasan
"Witness
"(unintelligible)
"(unintelligible)"
During the first week of December 1984, the Bejasas paid Victoria P7,000.00 as agreed. The balance of P8,000.00 was not fully paid. Only the amount of
P4,000.00 was paid on January 11, 1985.
[15]

After the aryenduhan expired, despite Victorias demand to vacate the land, the Bejasas continued to stay on the land and did not give any consideration
for its use, be it in the form of rent or a shared harvest.
[16]

On April 7, 1987, Candelaria and the Dinglasans again entered into a three-year lease agreement over the land.
[17]
The special power of attorney in favor of
Jaime was also renewed by Candelaria on the same date.
[18]

On April 30, 1987, Jaime filed a complaint before the Commission on the Settlement of Land Problems ("COSLAP"), Calapan, Oriental Mindoro seeking
ejectment of the Bejasas.
On May 26, 1987, COSLAP dismissed the complaint.
Sometime in June 1987, Jaime filed a complaint with the Regional Trial Court, Calapan Oriental, Mindoro
[19]
against the Bejasas for "Recovery of
possession with preliminary mandatory injunction and damages." The case was referred to the Department of Agrarian Reform ("DAR").
On December 28, 1987, the DAR certified that the case was not proper for trial before the civil courts.
[20]

The trial court dismissed Jaimes complaint, including the Bejasas counterclaim for leasehold, home lot and damages.
On February 15, 1988, the Bejasas filed with the Regional Trial Court of Calapan, Oriental Mindoro a complaint for "confirmation of leasehold and home lot
with recovery of damages."
[21]
against Isabel Candelaria and Jaime Dinglasan.
[22]

On February 20, 1991, after trial, the trial court ruled in favor of the Bejasas.
[23]
First, they reasoned that a tenancy relationship was established.
[24]
This
relationship can be created by and between a "person who furnishes the landholding as owner, civil law lessee, usufructuary, or legal possessor and the
person who personally cultivates the same."
[25]
Second, as bona-fide tenant-tillers, the Bejasas have security of tenure.
[26]
The lower court ruled:
[27]

"ACCORDINGLY, judgment is hereby rendered in favor of the plaintiffs and against the defendants, as follows:
"(1) Ordering the defendants to maintain plaintiffs in the peaceful possession and cultivation of the lands in question and to respect
plaintiffs security of tenure on the landholdings of Isabel Candelaria and the home lot presently occupied by them;
"(2) Confirming the leasehold tenancy system between the plaintiffs as the lawful tenant-tillers and the landholder, Isabel Candelaria,
with the same lease rental of P20,000.00 per calendar year for the use of the lands in question and thereafter, same landholdings be
placed under the operation land transfer pursuant to Republic Act No. 6657;
"(3) Ordering the defendants to pay jointly and severally the plaintiffs the amount of P115,500.00 representing the sale of calamansi
which were unlawfully gathered by Jaime Dinglasan and his men for the period July to December, 1987 and which were supported by
receipts and duly proven, with formal written accounting, plus the sum of P346,500.00 representing the would-be harvests on citrus,
calamansi, rambutan and bananas for the years 1988, 1989 and 1990, with legal rate of interest thereon from the date of the filing of
the instant complaint until fully paid;
"(4) Ordering the defendants to pay plaintiffs jointly and severally the amount of P30,000.00 as attorneys fee and expenses of
litigation; and
"(5) Authorizing the plaintiffs as tenant-farmers to litigate as pauper not only in this Court but up to the appellate courts in accordance
with Section 16 of P. D. No. 946.
"SO ORDERED."
On February 20, 1991, respondents filed their notice of appeal.
[28]

On February 9, 1993, the Court of Appeals promulgated a decision reversing the trial courts ruling.
[29]
Reasoning: First, not all requisites necessary for a
leasehold tenancy relationship were met.
[30]
There was no consent given by the landowner. The consent of former civil law lessee, Malabanan, was not
enough to create a tenancy relationship.
[31]
Second, when Malabanan engaged the services of the Bejasas, he only constituted them as mere overseers
and did not make them "permanent tenants". Verily, even Malabanan knew that his contract with Candelaria prohibited sublease.
[32]
Third, the contract
("aryenduhan") between the Bejasas and Victoria, by its very terms, expired after one year. The contract did not provide for sharing of harvests, means of
production, personal cultivation and the like.
[33]
Fourth, sharing of harvest was not proven. The testimony of Reynaldo Bejasa on this point is self-
serving. Fifth, the element of personal cultivation was not proven. Reynaldo Bejasa himself admitted that he hired laborers to clear and cultivate the
land.
[34]
The Court of Appeals disposed of the case, thus:
[35]

"WHEREFORE, premises considered, the judgment appealed from is hereby REVERSED and SET ASIDE. The interlocutory order
issued on September 5, 1988 is DISSOLVED and the appellees are hereby ordered to surrender possession of the disputed
landholdings to appellant Isabel Candelaria and pay her the amount of P15,000.00 in annual rents commencing from 1986 plus
attorneys fees and litigation expenses of P35,000.00 and costs.
"SO ORDERED."
Hence, this appeal filed on March 3, 1993.
[36]

The issue raised is whether there is a tenancy relationship in favor of the Bejasas.
The elements of a tenancy relationship are:
[37]

(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.
After examining the three relevant relationships in this case, we find that there is no tenancy relationship between the parties.
Malabanan and the Bejasas. True, Malabanan (as Candelarias usufructuary) allowed the Bejasas to stay on and cultivate the land.
However, even if we assume that he had the authority to give consent to the creation of a tenancy relation, still, no such relation existed.
There was no proof that they shared the harvests.
Reynaldo Bejasa testified that as consideration for the possession of the land, he agreed to deliver the landowners share (1/5 of the harvest) to
Malabanan.
[38]
Only Reynaldo Bejasas word was presented to prove this. Even this is cast into suspicion. At one time Reynaldo categorically stated that
25% of the harvest went to him, that 25% was for Malabanan and 50% went to the landowner, Candelaria.
[39]
Later on he stated that the landowners share
was merely one fifth.
[40]

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

Candelaria and the Bejasas. Between them, there is no tenancy relationship. Candelaria as landowner never gave her consent.
The Bejasas admit that prior to 1984, they had no contact with Candelaria.
[44]
They acknowledge that Candelaria could argue that she did not know of
Malabanans arrangement with them.
[45]
True enough Candelaria disavowed any knowledge that the Bejasas during Malabanans lease possessed the
land.
[46]
However, the Bejasas claim that this defect was cured when Candelaria agreed to lease the land to the Bejasas for P20,000.00 per annum, when
Malabanan died in 1983.
[47]
We do not agree. In a tenancy agreement, consideration should be in the form of harvest sharing. Even assuming that
Candelaria agreed to lease it out to the Bejasas for P20,000 per year,
[48]
such agreement did not create a tenancy relationship, but a mere civil law lease.
Dinglasan and the Bejasas. Even assuming that the Dinglasans had the authority as civil law lessees of the land to bind it in a tenancy agreement, there is
no proof that they did.
Again, there was no agreement as to harvest sharing. The only agreement between them is the "aryenduhan",
[49]
which states in no uncertain terms the
monetary consideration to be paid, and the term of the contract.
Not all the elements of tenancy being met, we deny the petition.
WHEREFORE, we AFFIRM the decision of the Court of Appeals of February 9, 1993, in toto.
No costs.
SO ORDERED.
------------------

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.
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 t o 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 deci sion, 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 wi thout 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 concl usions 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 not hing 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 propert y. 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.
--------------------
PAG-ASA FISHPOND G.R. No. 164912
CORPORATION ,
Petitioner,
Present:

- versus - YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
BERNARDO JIMENEZ, CHICO-NAZARIO,
ROBERT BELENBOUGH, REYES, and
LEONARD MIJARES, BRION,
*
JJ.
EDUARDO JIMENEZ,
JOSE CRUZ, ELIZALDE
EDQUIBAL, DOMINADOR
ELGINCOLIN and Promulgated:
GERONIMO DARILAG,
Respondents. June 18, 2008

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
FOCUS of this petition is the long-term effect of hiring by a civil law lessee of fishpond farmworkers with right to share in the fish harvests.
May karapatan bang manatili ang mga nasabing manggagawa kahit tapos na ang kontrata ng kumuha sa kanila sa may-ari ng palaisdaan?
Wala. Ito ang sagot namin sa katanungan sa kasong ito.
For Our review on certiorari is the Decision
[1]
of the Court of Appeals (CA) affirming that
[2]
of the Department of Agrarian Reform Adjudication
Board (DARAB) in an action for maintenance of peaceful possession of a forty-hectare portion of a fishpond situated in Masinloc, Zambales.
The Facts
Petitioner PAG-ASA Fishpond Corporation is the owner of a 95.6123-hectare fishpond and saltbed situated at
the Municipality of Masinloc, Province of Zambales. It is covered by Transfer Certificate of Title (TCT) No. T-1747 issued by the Register of Deeds
of Zambales. On May 1, 1989, petitioner leased the subject fishpond to David Jimenez and Noel Hilario. The lease agreement, in full, provides:

CONTRACT OF LEASE

KNOW ALL MEN BY THESE PRESENT:

This Contract of Lease made and entered into this 27
th
day of April, 1989 by and between:

PAG-ASA FISHPOND CORPORATION, a corporation duly organized and existing in accordance with the laws of
the Philippines, with principal office and business address at 465 A. Flores St., Ermita, Manila, herein represented
by its President, Mr. SEGUNDO SEANGIO, of legal age, married, Filipino and with postal address at 465 A. Flores
St., Ermita, Manila, herein known as the LESSOR;

- A N D -

DAVID JIMENEZ, of legal age, married to Pascuala Ramos Jimenez, Filipino and residing at
1173 Paco, Obando, Bulacan and Noel Hilario, of legal age, married to Teresita SantiagoHilario, Filipino and
residence of Lawa, Obando, Bulacan, herein known as the LESSEES.

W I T N E S S E T H

WHEREAS, the Lessor is the registered and absolute owner of a Real Property, more particularly described as follows, to wit:

CERTIFICATE TITLE NO. T-1747
REGISTER OF DEEDS
PROVINCE OF ZAMBALES

A PARCEL OF LAND CONTAINING AN AREA OF NINETY-FIVE HECTARES, SIXTY-
ONE ACRES AND TWENTY-THREE CENTARES SITUATED IN THE BARRIO OF STO. ROSARIO, MASINLOC,
ZAMBALES.

WHEREAS, the Lessor has granted and the Lessees have accepted a lease of the above-described property under the terms
and conditions hereinafter provided;

NOW, THEREFORE, for and in consideration of the above premises and in consideration of the terms and conditions
hereinafter specified the parties herein do hereby agree and stipulate as follows:

1. The terms of this lease shall be five (5) years effective May 1, 1989 and shall terminate on May 1, 1994 and is
not renewable after said term unless renewed in writing by both parties;

2. The Lessees have agreed to lease five (5) lots of fishponds, one nursery pond, all the 331 saltbeds and the
Paalatan located within the described property under Certificate Titles No. T-1747;

3. The lease does not include the bodega located within the leased premises which is to be used exclusively by
the Lessor unless with written approval of the Lessor, the Lessee may share in the use of the bodega;

4. The Leessees shall make a deposit of ONE HUNDRED THOUSAND PESOS (P100,000.00) Philippine
Currency upon signing of this Contract of Lease. Said deposit is without interest and shall answer for any
unpaid rental of the Lessees at the termination of this lease, penalties or any liabilities which may incur
during the effectivity of this Contract. The Lessees cannot apply the aforesaid deposit as rental payment
before the cancellation, termination or expiration of this agreement;

5. The Lessees shall pay to the Lessor immediately upon signing of this Contract the amount of THREE
HUNDRED FIFTY THOUSAND PESOS (P350,000.00), Philippine Currency as rental for the year May 1,
1989 to May 1, 1990. This payment is not refundable and will be forfeited in the event the Lessees cancel
this Contract of Lease prior to May 1, 1990;

6. The Lessees shall pay to the Lessor the yearly advance rental in Philippine Currency at the office of
the Lessor which shall be due and payable on or before the 1st of March of every year for five (5) years
without the necessity of express demand, therefore it being understood that in case of default of said
Lessees in the payment of the said rental if and when the same becomes due and payable, the amount of
rental owing shall bear interest at the rate of twenty-four percent (24%) per annum, to be computed daily
from the date of such default until fully paid, payment of such interest to be considered as a penalty by
reason of such default, without prejudice to the right of the owner to terminate this Contract and eject the
Lessees, as hereinafter set forth;

That the Schedule of Payment of the annual lease cash payment of rentals are as follows:

a) May 1, 1989 or upon signing of this Contract of Lease:
P350,000.00 rental for May 1, 1989 to May 1, 1990

b) March 1, 1990 P400,000.00 rental for May 1, 1990 to May 1, 1991;

c) March 1, 1991 P440,000.00 rental of May 1, 1991 to May 1, 1992;

d) March 1, 1992 P484,000.00 rental of May 1, 1992 to May 1, 1993;

e) March 1, 1993 P532,400.00 rental of May 1, 1994;

The Lessees shall in addition to the cash rental referred to the above, pay to the Lessor Seven
Thousand (7,000) cavans of salt measured at four (4) tin cans, size of four gallons of 16 liters
per can, per cavan yearly, starting the year 1990 up to and including the year 1994. The
Lessees shall deliver the aforesaid salt to the Lessor from the time the Lessees commences to
harvest salt, provided that the 7,000 cavans should already be delivered to the Lessor by the
end of the harvest season in May of a particular year. In the event that the Lessees cannot or
fail to deliver the 7,000 cavans of salt in full or in part, the Lessees are obliged to pay whatever
difference in cash at the prevailing market value at the end of harvest in May of a particular
year;

7. That the personal character and integrity of the Lessees and the nature of the occupancy of the leased
property as above restricted are special considerations and inducements for granting this lease by
the Lessor; consequently, the Lessees shall not sub-let the property, nor allow any person, firm or
corporation to occupy the same in whole or in part, nor shall the Lessees assign in whole or in part any of
their right under this Contract and no right or interest thereto or therein shall be conferred on or vested in
anyone by the Lessees, either by operation of law or otherwise;

8. Failure on the part of the Lessees to pay within its stipulated due period or failure to observe any of the
conditions of this Agreement, shall entitle the Lessor to terminate this Agreement immediately and
to forefeit the deposit of One Hundred Thousand Pesos (P100,000.00) and demand that the Lessees vacate
the leased property;

9. In the event that the Lessees shall elect to terminate this Agreement before its expiration, the One Hundred
Thousand Pesos (P100,000.00) deposit will be forfeited in favor of theLessorr;

10. The Lessees shall at their own expense, improve and develop the aforesaid fishponds and to keep up and
maintain in good repair and condition all fences, dikes, saltbeds and other improvements existing thereon by
(a) raising and keeping the elevation of the pilapil inside the fishpond to 1 1/2 meters high and 2 meters
height to the pilapil constituting the boundary of the fishponds and those fronting the river and a width of 2
meters for all the pilapil; (b) to repair all the 331 saltbeds with tisa and wooden division saltbeds; (c) to
clean and clear the whole area of the leased premises by removing all the bushes, weeds and cogons,
provided, moreover, that the Lessees are obliged to maintain throughout the effectivity of this Lease, the
said elevation and cleanliness of the leased premises. The Lessees shall make improvements not less than
25% every year and thereafter for the duration of this contract. That all the improvements and development
made by the Lessees shall after the expiration of this Lease belong to the Lessor.

In the event that the Lessees shall fail and/or refuse to make the aforesaid improvements and/or clean the
leased premises as herein provided, the Lessor shall have the right to cancel and terminate this Agreement
without prejudice to the right of the Lessor or itself make the required improvements, and cleaning and
utilizing for said purpose, the deposit of P100,000.00 in which event, the Lessor is obliged to notify the
Lessees of said use, and the amount so used within fifteen (15) days from said notice, the Lessees shall be
obliged to replenish the said amount of deposit of P100,000.00. Failure of the Lessees to replenish the said
amount shall entitle the Lessor to cancel or terminate this Agreement;

11. Except as heretofore stipulated on, the Lessees are prohibited from using the property or portion thereof for
any other purpose except as fishpond or saltbeds and from subleasing the property herein lease, or any
other portion thereof, or from assigning their rights under this Contract of Lease, or mortgaging or otherwise
encumbering the same, without the express written consent of the Lessor;

12. That the Contract of Lease between the Lessor and the Lessees is entirely a civil lease of a fishpond and not
in any manner to be construed or misunderstood to be agrarian in nature and extent. Labor disputes and
wages regarding hired workers or laborers of the Lessees in the operation and maintenance of the Lease,
shall not be the responsibility of the Lessor, including any claim pertaining to labor problems but the Lessees
will be held solely liable for the settlement and/or payment of the wages and claims;

13. The Lessor shall be solely liable for the payment of only the realty taxes on the leased premises while the
Lessees shall answer and be liable for the payment of the fees for business licenses and permits and other
business taxes be due to the government from the operation of fishponds and saltbeds;

14. The Lessor, through its authorized representative, is entitled to make an inspection of the leased premises at
any time during the day time;

15. In the event, the Lessees cancel or terminate this Contract of Lease on their own volition prior to May 1, 1994,
they are not entitled to any refund of any rentals already paid by them to the Lessor, as well as to the
deposit;

16. Upon the termination, expiration or cancellation of this Contract of Lease, the Lessor shall automatically take
possession of the leased premises and the Lessees shall, without need of any demand and without any
need of court action, vacate the premises and surrender possession thereof to the Lessor, including the
improvements shall appertaining complete ownership to the Lessor, upon the introduction of the said
improvements;

17. In the event that the Lessees violated and/or fail to refuse to abide by and comply with the terms and
conditions of this Agreement or failure to pay within its stipulated due period, the deposit of the Lessees in
the amount of P100,000.00 shall be forfeited in favor of the Lessor and the latter shall have the right to
cancel and terminate this Contract immediately and to secure from the Court a writ of execution or other
order for the enforcement of the terms hereof against the Lessees, all expenses including sheriffs fees,
incurred by the Lessor for securing said writ or/and for enforcing the same as well as liquidated damages
shall be borne solely by the Lessees;

18. That in the event the Lessees fail to vacate or leave the leased premises voluntarily after the termination of
the leased contract, notwithstanding demands made on them by the Lessor, and insist and ignore the
demands, the Lessees shall pay the Lessor jointly and severally unrealized income and profit in point of
unpaid rentals for overstaying in the leased premises without any legal right or interest whatsoever, in the
amount of the reasonable use and benefit of the leased premises to be computed by the Lessor, based on
double the rentals of the last year of Contract of Lease plus legal interest, until the Lessees vacate the
leased premises;

19. That if the said property is not surrendered to the Lessor in the manner provided for in this Contract, the
Lessees shall be responsible to the Lessor for all damages which the Lessor may suffer by reason thereof
and shall indemnify the Lessor against any and all claims made by the succeeding tenants against
the Lessor, resulting from delay by the Lessor in delivering possession of the property;

20. In case of the default of the Lessees in their obligations under this Contract of Lease, the Lessees agrees to
pay the sum equivalent of 25% of the amount due from them as liquidated damages as attorneys fee aside
from court costs, should the Lessor be constrained to resort to court from the enforcement of its rights under
the Contract;

21. In case the Philippine Pesos is officially devalued, all payments to be made by the Lessees to the Lessor after
such devaluation shall be made in amounts properly readjusted and proportionately increased in
accordance with or on the basis of the official value of the peso at the time of the execution of this lease
contract;

22. The Lessees hereby agree that any question which may arise between the Lessor and the Lessees by reason
of this document and which has to be submitted for decision to the court of justice, may at the option of
the Lessor be brought before the court of competent jurisdiction in the City of Manila, waiving for this
purpose other proper venue;



23. The Lessees shall jointly and severally be liable for any liability or liabilities pertaining to
the Lessor concerning the relationship and its stipulations entered into in this Contract of Lease;

24. This Contract of Lease cancelled and superseded, the Contract of Lease signed by the Lessor and Mr. David
Jimenez on May 20, 1985 and notarized by Francisco Agustin for and in behalf of the City of Manila and
appearing in the notarial register as Document No. 431, Page No. 45, Book No. XII, Series of 1985;

25. The parties herein hereby attest and confirm that the terms and conditions of the Contract of Lease and the
effect thereof have been explained to them to their satisfaction and that they fully understand the same.

IN WITNESS WHEREOF, the parties have hereunto affixed their signatures this 28th day of April, 1989 at the City of Manila,
Philippines.

PAG-ASA FISHPOND CORPORATION Sgd.
Lessor NOEL HILARIO Lessee

By:
Sgd. Sgd.
MR. SEGUNDO SEANGIO-President DAVID JIMENEZ-Lessee

W I T N E S S E S S

Sgd. Sgd.

A C K N O W L E D G M E N T

REPUBLIC OF THE PHILIPPINES) S.S.
CITY OF MANILA )

BEFORE ME, a Notary Public for and in the City of Manila, Philippines, personally appeared the following persons with their
respective Residence Certificates, to wit:

SEGUNDO SEANGIO A-4328120 Manila, January 3, 1989
DAVID JIMENEZ A-03704324 Bulacan, Obando
February 17, 1989
NOEL HILARIO A-11107684 Lawa, Obando, Bulacan
May 5, 1989

known to me and to me known to be the same persons who executed the aforegoing instrument and have acknowledged before me
that the same is their free and voluntary act and deed.

This document consists of eight (8) pages, signed by the parties and their instrumental witnesses on every page refers to a
Contract of Lease that Real Property situated at Sto. Rosario, Masinloc,Zambales.




WITNESS MY HAND AND SEAL THIS 9TH DAY OF MAY, 1989.

ROBERTO M. MENDOZA
Notary Public
Until December 31, 1989
PTR No. 52454710
TAN 4784-113-M
Doc. No. 422
Page No. 86
Book No. XIX
Series of 1989.
[3]


It is an important sense of the agreement that the fishpond will be managed by the two lessees jointly. Jimenez was charged with the management
of a 40-hectare portion of the fishpond, situated at Sitio Simelyahan, Barangay Sto. Rosario, and in Sitios Mapait and Elman, Barangay Bamban, all in
the Municipality of Masinloc, Zambales. The remaining portions of petitioners landholding were to be managed by Hilario.

In the meantime, the Philippine Congress enacted Republic Act (R.A.) No. 6657, the Comprehensive Agrarian Reform Law (CARL).
[4]
The social
legislation was founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of
other farm workers, to receive a just share of the fruits thereof. It aimed to undertake the just distribution of all agricultural lands, having taken into account
ecological, developmental, and equity considerations, and subject to the payment of just compensation.
[5]


On September 26, 1989, petitioner, through its president Segundo Seangio, applied for exemption from the coverage of the agrarian reform
program.
[6]
The request was reiterated via a letter dated October 17, 1989, addressed to Justice Milagros A. German, Senior Special Consultant and
Adviser in Legal Affairs, Department of Agrarian Reform (DAR).
[7]


On November 10, 1989, the DAR, speaking through Justice German, acted favorably on petitioners application for exemption. Consequently,
the DAR advised the Municipal Agrarian Reform Officer (MARO) of Masinloc to observe the status quo and defer the inclusion of petitioners fishpond in
the compulsory acquisition program.

Sometime in 1990, Jimenez hired respondents, namely: Bernardo Jimenez, Robert Belenbough, Leonard Mijares, Eduardo Jimenez, Jose Cruz,
Elizalde Edquibal, Dominador Elgincolin and Geronimo Darilag, to work as farmworkers in the fishpond.
[8]
As farmworkers, respondents each received a
monthly allowance of P1,500.00 from David Jimenez, as well as 50% of the fishponds net proceeds from the total fish harvests, which they divided equally
among themselves.
[9]


In April 1994, they were required by David Jimenez to vacate the fishpond on or before May 1, 1994. The demand to vacate was made due to the
impending expiration of Jimenezs civil law lease over the property with petitioner.
[10]


Respondents were not agreeable to the demand to vacate. Accordingly, on April 25, 1994, they filed a complaint directly against petitioner for
maintenance of possession before the Provincial Agrarian Reform Adjudication Board (PARAD) in Iba, Zambales.
[11]
In their complaint, they
contended, inter alia, that they are entitled to security of tenure; and that the fishpond is covered by the Comprehensive Agrarian Reform Program (CARP)
under R.A. No. 6657.

They prayed that the entire fishpond of petitioner be placed under the coverage of the CARP; that they be considered as farmer beneficiaries
who are entitled to be awarded the fishpond; and that they be allowed to remain in possession of the fishpond.
[12]


In its Answer, petitioner averred that its lessees over the fishpond were only David Jimenez and one Noel Hilario and that its lease agreement with
said lessees was not agrarian but civil in nature. It also posited that the fishpond, being a commercial one, is not yet subject to compulsory acquisition
under the CARP pursuant to Section 11 of R.A. No. 6657.
[13]
Petitioner alleged that respondents entry into and occupation of the fishpond, as well as their
enjoyment of the fish produced, was without its knowledge and consent.
[14]


On July 18, 1994, the PARAD ruled in favor of petitioner (defendant) and against respondents (plaintiffs), dismissing the complaint for lack of
merit. The fallo of the PARADs decision reads:

WHEREFORE, this Forum is constrained to rule out plaintiffs allegation as a regular farmworker pursuant to R.A. 6657 and/or
tenants of herein defendant and to deny prayer for placing the landholding of the defendant under CARP coverage which is purely
administrative and only cognizable by the Department of Agrarian Reform, as there are no concrete evidence. Thus, a judgment is
hereby rendered DISMISSING plaintiffs complaint for lack of merit.

SO DECIDED.
[15]

The PARAD ruled that respondents are not agricultural leasehold tenants who may be entitled to security of tenure. According to the PARAD,
petitioner, as landowner, did not consent to the hiring of respondents, as farmworkers, by its civil law lessee, David Jimenez. The PARAD declared:

The original lessees in the Contract of Lease (Annex A) with the lessor-defendant are David Jimenez and Noel Hilario, who are
both residents of Obando, Bulacan. The said contract expired onMay 01, 1994. Paragraph 7 of the contract of lease provides that,
consequently, the lessees shall not sublet the property, nor allow any person, firm or corporation to occupy the same in whole or in
part nor shall the lessees assign in whole or in part any of their right under this Contract and no right or interest thereto or therein shall
be conferred or vested in anyone by the lessees either by operation of law or otherwise. The provision was totally violated by the
lessee David Jimenez when the plaintiff(s) were admittedly hired as farmworkers. The plaintiffs consist of David Jimenez sons
Bernardo and Eduardo Jimenez, his son-in-law Leonard Mijares and Robert Belenbough, Jose Cruz, Elizalde Edquibal, Dominador
Elgincolin and Geronimo Darilag. Noticeable from the evidence submitted that all the plaintiffs are not residents of Zambales where
the subject landholding are situated.

Consequently, because of the violation of the contract, the plaintiffs are not even recognized by the defendant. Plaintiffs
allegation to be (sic) tenant necessarily failed and has no leg to stand. (sic). Plainly, consent of a landowner which is an essential
element of tenancy is not attendant.
[16]

On appeal to the DARAB, the PARADs decision was reversed and set aside. The dispositive part of the DARAB decision reads:

WHEREFORE, premises considered and finding reversible errors, (sic) committed by the Adjudicator a quo, the assailed
decision is hereby REVERSED and a new judgment is rendered directing the PAG-ASA Fishpond Corporation, Incorporated (sic)
through its President and Officers, to respect the peaceful possession, cultivation and enjoyment of the subject landholding by the
petitioners-appellants who are the tenants thereof.

SO ORDERED.
[17]

The DARAB ruled that respondents are agricultural leasehold tenants of the subject property who deserve the protective mantle of the law
despite the fact that only the civil law lessee installed them as such. It ratiocinated:

x x x plaintiffs-appellants are, by operation of law, tenant-farmers of the subject landholding, notwithstanding that it was a
civil law lessee, who installed them therein. When all the elements the (sic) tenancy relation are present, then the protective mantle of
the security of tenure as guaranteed by the 1987 Charter shall be available to them. x x x

x x x x

Verily, Sections 6 and 7 of Republic Act (RA) No. 3844 explicit (sic) provides, thus:

Section 6. Parties to Agricultural Leasehold Relation. The agricultural leasehold relation shall be
limited to the person who furnished the landholding, either as owner, civil law lessee, usufructuary, or legal
possessor and the person who personally cultivates the same.

and

Section 7. Tenure of Agricultural Leasehold Relation. The Agricultural leasehold relation once
established shall confer upon the agricultural lessee the right to continue working on the landholding until such
leasehold relation is extinguished, the agricultural lessee shall be entitled to security of tenure on his landholding
and cannot be ejected therefrom unless authorized by the Court for causes herein provided.
[18]


When petitioners motion for reconsideration was denied
[19]
by the DARAB on January 17, 2001, they appealed to the CA via petition for review
under Rule 43 of the 1997 Rules of Civil Procedure.

Petitioner insisted that respondents were not tenants on the property. It argued anew that it was not a party to any tenancy relationship with
anyone vis--vis the subject property; and that it had not received any share in the fishponds harvests from respondents.
CA Disposition
In a Decision dated March 30, 2004, the CA affirmed the DARAB decision, disposing as follows:

Once a tenancy relationship is established, therefore, the tenant is entitled to security of tenure and cannot be ejected unless
upon judicial authority for causes provided by law. The reliance of the petitioner on Sanchez v. Court of Appeals, supra, is,
consequently misplaced, since that doctrine was applicable only to the hired laborers of a civil law lessee, not to bona fide share or
leasehold tenants like the respondents.

WHEREFORE, the appealed decision is AFFIRMED.

SO ORDERED.
[20]


The CA opined that although petitioner was not privy to a tenancy relationship with respondents, its civil law lessee, David Jimenez, made
respondents the agricultural leasehold tenants in the property. The CA concluded that David Jimenez, being the legal possessor of the fishpond as defined
under Section 42 of R.A. No. 1199, has the authority to hire agricultural leasehold tenants and to bring about agricultural leasehold relations. This relation,
according to the appellate court, is binding upon the landowner, petitioner, which effectively became obliged to respect the rights of the tenants. Among
said rights is the right to security of tenure.
The CA pointed out:

Finally, although the petitioner is correct in positing that the lease was one under the civil law, rather than an agricultural
lease, the expiration of the lease did not negate the right of the respondents to security of tenure as the bona fide tenants.

According to Sec. 8, Republic Act No. 3844, otherwise known as The Agricultural Land Reform Code, a leasehold relation,
once established, can be terminated on the following grounds, to wit:

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 3
months in advance; or

3. Absence of an heir to succeed the lessee in the event of his/her death of permanent incapacity.

Aggrieved, petitioners moved for reconsideration. The motion was, however, denied by the appellate court via Resolution
[21]
dated August 5,
2004. Hence, the present recourse under Rule 45.


Issues

Petitioner now contends that:
I
THE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING THE HONORABLE COURTS RULING IN THE RECENT CASE
OF VALENCIA VS. COURT OF APPEALS, ET AL., 401 SCRA 666, WHICH APPLIES SQUARELY TO THE FACTS IN THE INSTANT
CASE, THAT SECTION 6 OF REPUBLIC ACT NO. 3844, AS AMENDED, DOES NOT AUTOMATICALLY AUTHORIZE A CIVIL LAW
LESSEE TO EMPLOY A TENANT WITHOUT THE CONSENT OF THE LANDOWNER. ACCORDINGLY, AFTER THE EXPIRATION
OF THE CIVIL LAW LEASE, PETITIONER WAS NOT BOUND BY THE ALLEGED TENANCY RELATIONSHIP BETWEEN
RESPONDENTS AND THE CIVIL LAW LESSEE WHICH WAS ENTERED INTO WITHOUT ITS CONSENT.

II
THE COURT OF APPEALS GRAVELY ERRED IN CONCLUDING THAT RESPONDENTS ARE SHARE TENANTS
WHO ARE ENTITLED TO SECURITY OF TENURE.

III
THE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING THE RULING OF THE HONORABLE COURT IN THE CASE
OF SANCHEZ VS. COURT OF APPEALS, 129 SCRA 717 TO THE INSTANT CASE.
[22]


Our Ruling
Before We begin to consider the issues hoisted by petitioner, the Court takes cognizance of a pivotal question of jurisdiction. We resolve this
issue motu proprio, even if it was not raised by the parties nor threshed out in their pleadings.
[23]


The jurisdiction of the PARAD, DARAB and the CA on appeal, is limited to agrarian disputes or controversies and other matters or incidents involving
the implementation of the CARP under R.A. No. 6657, R.A. No. 3844 and other agrarian laws.
[24]
An agrarian dispute is defined as any controversy relating
to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farm
workers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial
arrangements.
[25]

As early as February 20, 1995, private lands actually, directly and exclusively used for prawn farms and fishponds were exempted from the coverage
of the CARL by virtue of R.A. No. 7881.
[26]
Section 2 of the said law expressly provides:

Sec. 2. Section 10 of Republic Act No. 6657 is hereby amended to read as follows:

Sec. 10. Exemptions and Exclusions.

a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation,
fish sanctuaries and breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act.

b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be
exempt from the coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed
and Certificate of Land Ownership Award (CLOA) issued to agrarian reform beneficiaries under the
Comprehensive Agrarian Reform Program.

In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian
Reform Law, by voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a
simple and absolute majority of the actual regular workers or tenants must consent to the exemption within one (1)
year from the effectivity of this Act. When the workers or tenants do not agree to this exemption, the fishponds or
prawn farms shall be distributed collectively to the worker-beneficiaries or tenants who shall form a cooperative or
association to manage the same.

In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian
Reform Law, the consent of the farm workers shall no longer be necessary, however, the provision of Section 32-
A hereof on incentives shall apply.
c) Lands actually, directly and exclusively used and found to be necessary for national defense,
school sites and campuses, including experimental farm stations operated by public or private schools for
educational purposes, seeds and seedling research and pilot production center, church sites and convents
appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and
cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and
quarantine centers and all lands with eighteen percent (18%) slope and over, except those already developed,
shall be exempt from the coverage of this Act.
Admittedly, there is no express repeal of R.A. No. 3844 as a whole. Its provisions that are not inconsistent with R.A. No. 6657 may still be
given suppletory effect. Nonetheless, there is now irreconcilable inconsistency or repugnancy between the two laws as regards the treatment of fishponds
and prawn farms. Such repugnancy leads to the conclusion that the provisions of R.A. No. 6657 supersede the provisions of R.A. No. 3844 insofar as
fishponds and prawn farms are concerned. In any event, Section 76 of R.A. No. 6657, as amended, provides that all other laws, decrees, issuances, or
parts thereof inconsistent thereto are repealed or amended accordingly.
[27]


Verily, the DARAB finding of agricultural leasehold tenancy relations between petitioners civil law lessee David Jimenez and respondents have
no basis in law. The rule is well-entrenched in this jurisdiction that for tenancy relations to exist, the following requisites must concur: (a) the parties are the
landholder and the tenant; (b) the subject is agricultural land; (c) there is consent; (d) the purpose is agricultural production; and (e) there is
consideration.
[28]



The absence of one element makes an occupant of a parcel of land, or a cultivator thereof, or a planter thereon outside the scope of the
CARL. Nor can such occupant, cultivator or planter be classified as a de jure agricultural tenant for purposes of agrarian reform law. And unless a person
has established his status as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government
under existing agrarian reform laws.
[29]


In the case under review, the subject fishpond is not an agricultural land subject to compulsory CARP coverage. Neither was there a sharing of
the harvests between petitioner and respondents. That respondents shared the harvests of the fishpond only with the civil law lessee David Jimenez is
uncontroverted. Evidently, there is no agrarian tenancy relationship between petitioner and respondents.

This is not a case of first impression. The Court has had occasion to affirm the exemption of fishponds from the coverage of the CARP in Atlas
Fertilizer Corp. v. Secretary, Department of Agrarian Reform
[30]
and in Romero v. Tan.
[31]
In Romero, the Court scored the PARAD for taking cognizance of
a complaint for maintenance of peaceful possession over a fishpond filed by a tenant-lessee. The Court held then:

On the jurisdictional issue, we find that it was reversible error for the PARAB to have taken cognizance of petitioners complaint.
The jurisdiction of the PARAB in this case is limited to agrarian disputes or controversies and other matters or incidents involving the
implementation of the Comprehensive Agrarian Reform Program (CARP) under Rep. Act No. 6657, Rep. Act No. 3844 and other
agrarian laws. An agrarian dispute is defined as any controversy relating to tenurial arrangements, whether leasehold, tenancy,
stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farm workers associations or representation
of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements.

Although Section 166(1) of Rep. Act No. 3844 had included fishponds in its definition of agricultural land within its coverage,
this definition must be considered modified in the light of Sec. 2 of Rep. Act No. 7881, which amended Section 10 of Rep. Act No.
6657; otherwise known as the Comprehensive Agrarian Reform Law (CARL). Expressly, the amendment has excluded private lands
actually, directly and exclusively used for prawn farms and fishponds from the coverage of the CARL. In fact, under Section 3(c) of
R.A. No. 6657, as amended, defines an agricultural land as that which is devoted to agricultural activity and not otherwise classified as
mineral, forest, residential, commercial or industrial land. In turn, Section 3(b) thereof defines agricultural activity as the cultivation of
the soil, planting of crops, growing of fruit trees, including the harvesting of such farm products, and other farm activities, and practices
performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical. Clearly, by virtue of
the amendments to the CARL, the operation of a fishpond is no longer considered an agricultural activity, and a parcel of land devoted
to fishpond operation is not agricultural land as therein defined.
[32]


It may well be argued that respondents have acquired a vested right to security of tenure arising from the alleged existing tenancy relations. The
complaint before the PARAD was filed on April 14, 1994, way before the passage and effectivity of R.A. No. 7881 on February 20, 1995. However, a claim
to any vested right has no leg to stand on. Section 2(b) of R.A. No. 7881
[33]
now contains a proviso, precisely to protect vested rights of those who have
already been issued a Certificate of Land Ownership Award (CLOA). Without such CLOA, no vested right can accrue to persons claiming it. Here, the
record is bereft of any proof that respondents were issued individual certificates to evidence the award of the property in their favor.

Even assuming, ex gratia argumenti, that the PARAD, DARAB and the CA had jurisdiction, the complaint for maintenance of peaceful
possession lodged by respondents still fails for triple reasons.


First. Intent is material in tenancy relations.

The DARAB and the CA anchored its finding of tenancy relations on the legal possession of David Jimenez, the civil law lessee, over the subject
property. According to them, as the legal possessor, Jimenezs installation of respondents as tenants binds petitioner.

The rule is well-entrenched in this jurisdiction that tenancy is not a purely factual relationship, it is also a legal relationship.
[34]
The intent of the
parties, the understanding when the tenant is installed, their written agreements, provided they are not contrary to law, are crucial.

In Valencia v. Court of Appeals,
[35]
the Court voided the CA finding of tenancy relations between the landowner and the tenants of the civil law
lessee for lack of intent. The Court held in Valencia:

The substantive issue to be resolved may be expressed in this manner: Can a contract of civil law lease prohibit a civil law
lessee from employing a tenant on the land subject matter of the lease agreement? Otherwise stated, can petitioners civil law lessee,
Fr. Flores, install tenants on the subject premises without express authority to do so under Art. 1649 of the Civil Code, more so when
the lessee is expressly prohibited from doing so, as in the instant case?

Contrary to the impression of private respondents, Sec. 6 of R.A. No. 3844, as amended, does not automatically authorize a
civil law lessee to employ a tenant without the consent of the landowner. The lessee must be so specifically authorized. For the right
to hire a tenant is basically a personal right of a landowner, except as may be provided by law. But certainly nowhere in Sec. 6 does it
say that a civil law lessee of a landholding is automatically authorized to install a tenant thereon. A different interpretation would create
a perverse and absurd situation where a person who wants to be a tenant, and taking advantage of this perceived ambiguity in the law,
asks a third person to become a civil law lessee of the landowner. Incredibly, this tenant would technically have a better right over the
property than the landowner himself. This tenant would then gain security of tenure, and eventually become owner of the land by
operation of law. This is most unfair to the hapless and unsuspecting landowner who entered into a civil law lease agreement in good
faith only to realize later on that he can no longer regain possession of his property due to the installation of a tenant by the civil law
lessee.

On the other hand, under the express provision of Art. 1649 of the Civil Code, the lessee cannot assign the lease without the
consent of the lessor, unless there is a stipulation to the contrary. In the case before us, not only is there no stipulation to the contrary;
the lessee is expressly prohibited from subleasing or encumbering the land, which includes installing a leasehold tenant thereon since
the right to do so is an attribute of ownership. Plainly stated therefore, a contract of civil law lease can prohibit a civil law lessee from
employing a tenant on the land subject matter of the lease agreement. x x x
[36]


Here, petitioner never intended to install respondents as tenants. As in Valencia, the contract of lease petitioner executed with David Jimenez
expressly prohibits the lessees to sublet the property, nor allow any person, firm or corporation to occupy the same in whole or in part, nor shall the lessee
assign in whole or in part any of their right under this contract.
[37]
It is elementary that possession can be limited by express agreement of the parties.
[38]
In
the case before Us, the lessees were expressly prohibited from subleasing or encumbering the land in any manner. Of course, this includes the installation
of tenants on the subject property.

The Court notes that in Joya v. Pareja
[39]
and again in Ponce v. Guevarra,
[40]
agricultural leasehold tenancy relations were affirmed despite a
similar prohibition in the lease agreement. However, in the said cases, the landowners were deemed to have consented to, and ratified the, installation of
the tenants. The landowners there extended the terms of the lease and negotiated for better terms with the tenants themselves. They were thus held
in estoppel and the tenants considered de jure occupants.

In the case under review, the record is bereft of any indication that petitioner dealt with respondents in the same manner. As adverted to earlier,
petitioners were consistent that they contracted only with their civil law lessees. They were not privy to the transactions entered into by its lessee with
respondents.
Second. A stream cannot rise higher than its source. The civil law lessee, David Jimenez, was not authorized to enter into a tenancy relationship
with respondents.
The DARAB and the CA ruled that Section 6 of R.A. No. 3844 authorizes a legal possessor, such as David Jimenez, to employ a tenant even
without the consent of the landowner.
Again, they are mistaken. The Court, in Valencia, traced the origin and outlined the rationale of the polemical provision. Said the Court:

When Sec. 6 provides that the agricultural leasehold relations shall be limited to the person who furnishes the landholding,
either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same, it assumes that
there is already an existing agricultural leasehold relation, i.e., a tenant or agricultural lessee already works the land. The epigraph of
Sec. 6 merely states who are Parties to Agricultural Leasehold Relations, which assumes that there is already a leasehold tenant on
the land; not until then. This is precisely what we are still asked to determine in the instant proceedings.

To better understand Sec.6, let us refer to its precursor, Sec. 8 of R.A. No. 1199, as amended. Again, Sec. 8 of R.A. No. 1199
assumes the existence of a tenancy relation. As its epigraph suggests, it is a Limitation of Relation, and the purpose is merely to limit
the tenancy to the person who furnishes the land, either as owner, lessee, usufructuary, or legal possessor, and to the person who
actually works the land himself with the aid of labor available from within his immediate farm household. Once the tenancy relation is
established, the parties to that relation are limited to the persons therein stated. Obviously, inherent in the right of landholders to install
a tenant is their authority to do so; otherwise, without such authority, civil law lessees as landholders cannot install a tenant on the
landholding. Neither Sec. 6 of R.A. No. 3844 nor Sec. 8 of R.A. No. 1199 automatically authorizes the persons named therein to
employ a tenant on the landholding.

According to Mr. Justice Guillermo S. Santos and CAR Executive Judge Artemio C. Macalino, respected authorities on agrarian
reform, the reason for Sec. 6 of R.A. No. 3844 and Sec. 8 of R.A No. 1199 in limiting the relationship to the lessee and the lessor is to
discourage absenteeism on the part of the lessor and the custom of co-tenancy under which the tenant (lessee) employs another to
do the farm work for him, although it is he with whom the landholder (lessor) deals directly. Thus, under this practice, the one who
actually works the land gets the short end of the bargain, for the nominal or capitalist lessee hugs for himself a major portion of the
harvest. This breeds exploitation, discontent and confusion x x x. The kasugpong, kasapi, or katulong also works at the pleasure of
the nominal tenant. When the new law, therefore, limited tenancy relation to the landholder and the person who actually works the
land himself with the aid of labor available from within his immediate farm household, it eliminated the nominal tenant or mi ddleman
from the picture.

Another noted authority on land return, Dean Jeremias U. Montemayor, explains the rationale for Sec. 8 of R.A. No. 1199, the
precursor of Sec. 6 of R.A. No. 3844:

Since the law establishes a special relationship in tenancy with important consequences, it properly
pinpoints the persons to whom said relationship shall apply. The spirit of the law is to prevent both landholder
absenteeism and tenant absenteeism. Thus, it would seem that the discretionary powers and important duties of
the landholder, like the choice of crop or seed, cannot be left to the will or capacity of an agent or overseer, just as
the cultivation of the land cannot be entrusted by the tenant to some other people. Tenancy relationship has been
held to be of a personal character.

Section 6 as already stated simply enumerates who are the parties to an existing contract of agricultural tenancy, which
presupposes that a tenancy already exists. It does not state that those who furnish the landholding, i.e., either as owner, civil law
lessee, usufructuary, or legal possessor, are automatically authorized to employ a tenant on the landholding. The reason is
obvious. The civil lease agreement may be restrictive. Even the owner himself may not be free to install a tenant, as when his
ownership or possession is encumbered or is subject to a lien or condition that he should not employ a tenant thereon. This
contemplates a situation where the property may be intended for some other specific purpose allowed by law, such as, its conversion
into an industrial estate or a residential subdivision.

x x x x

From the foregoing discussion, it is reasonable to conclude that a civil law lessee cannot automatically institute tenants on the
property under Sec. 6 of R.A. No. 3844. The correct view that must necessarily be adopted is that the civil law lessee, although a legal
possessor, may not install tenants on the property unless expressly authorized by the lessor. And if a prohibition exists or is stipulated
in the contract of lease the occupants of the property are merely civil law sublessees whose rights terminate upon the expiration of the
civil law lease agreement.
[41]

Evidently, securing the consent of the landowner is a condition sine qua non for the installation of tenants. Here, petitioners consent was not
obtained prior to the engagement of respondents by the civil law lessee, David Jimenez. Worse, the lease agreement expressly prohibited the assignment
of the lease to third persons. Verily, respondents can acquire no better right than their predecessor-in-interest, David Jimenez.

Third. The compulsory acquisition of petitioners landholding pursuant to the agrarian reform program was held in abeyance pending evaluation
by its application for exemption.

The records unveil that on September 26, 1989, petitioner applied for exemption from the coverage of the agrarian reform
program.
[42]
On November 10, 1989, the DAR, speaking through Justice Milagros A. German, Senior Special Consultant and Adviser in Legal
Affairs,
[43]
acted favorably on petitioners application for exemption. Along this line, the MARO of Masinloc, Zambales, was advised to observe the
status quo and defer the inclusion of petitioners fishpond in the compulsory acquisition program.

In sum, respondents claim of security of tenure founded on their installation as tenants of petitioners civil law lessee is without basis in
law. Procedurally, fishponds and prawn farms were expressly exempted from the coverage of the agrarian reform program. Substantially, the civil law
lessee was not authorized to enter into leasehold-tenancy relations.

WHEREFORE, the appealed Decision is REVERSED AND SET ASIDE. A new one is entered DISMISSING the complaint for maintenance of
peaceful possession and inclusion for compulsory CARP coverage of petitioners landholding for lack of jurisdiction and lack of merit.

SO ORDERED.
G.R. No. 133507 February 17, 2000
EUDOSIA DAEZ AND/OR HER HEIRS, REP. BY ADRIANO D. DAEZ, petitioners,
vs.
THE HON. COURT OF APPEALS MACARIO SORIENTES, APOLONIO MEDIANA, ROGELIO MACATULAD and MANUEL UMALI, respondents.
DE LEON, JR., J.:
Before us is a petition for review on certiorari of the Decision
1
of the Court of Appeals
2
dated January 28, 1998 which denied the application of petitioner
heirs of Eudosia Daez for the retention of a 4.1685-hectare riceland pursuant to Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law
3
, thereby reversing the Decision
4
of then Executive Secretary Ruben D. Torres and the Order
5
of then Deputy Executive Secretary
Renato C. Corona, both of which had earlier set aside the Resolution
6
and Order
7
of then Department of Agrarian Reform (DAR) Secretary Ernesto D.
Garilao denying exemption of the same riceland from coverage under Presidential Decree (P.D.) No. 27.
The pertinent facts are:
Eudosia Daez, now deceased, was the owner of a 4.1685-hectare riceland in Barangay Lawa, Meycauayan, Bulacan which was being cultivated by
respondents Macario Soriente, Rogelio Macatulad, Apolonio Mediana and Manuel Umali under a system of share-tenancy. The said land was subjected to
the Operation Land Transfer (OLT) Program under Presidential Decree (P.D.) No. 27
8
as amended by Letter of Instruction (LOI) No. 474
9
. Thus, the then
Ministry of Agrarian Reform acquired the subject land and issued Certificates of Land Transfer (CLT) on December 9, 1980 to private respondents as
beneficiaries.
However, on May 31, 1981, private respondents signed an affidavit, allegedly under duress, stating that they are not share tenants but hired laborers
10
.
Armed with such document, Eudosia Daez applied for the exemption of said riceland from coverage of P.D. No. 27 due to non-tenancy as well as for the
cancellation of the CLTs issued to private respondents.1wphi1.nt
In their Affidavit dated October 2, 1983, Eudosia Daez and her husband, Lope, declared ownership over 41.8064 hectares of agricultural lands located in
Meycauayan, Bulacan and fourteen (14) hectares of riceland, sixteen (16) hectares of forestland, ten (10) hectares of "batuhan" and 1.8064 hectares of
residential lands
11
in Penaranda, Nueva Ecija. Included in their 41.8064-hectare landholding in Bulacan, was the subject 4,1685-hectare riceland in
Meycauayan.
On July 27, 1987, DAR Undersecretary Jose C. Medina issued an Order denying Eudosia Daez's application for exemption upon finding that her subject
land is covered under LOI No. 474, petitioner being owner of the aforesaid agricultural lands exceeding seven (7) hectares
12
.
On June 29, 1989, Eudosia Daez wrote a letter to DAR Secretary Benjamin T. Leong requesting for reconsideration of Undersecretary Medina's order. But
on January 16, 1992
13
Secretary Leong affirmed the assailed order upon finding private respondents to be bonafide tenants of the subject land. Secretary
Leong disregarded private respondents' May 31, 1981 affidavit for having been executed under duress because he found that Eudosia's son, Adriano, who
was then the incumbent Vice-Mayor of Meycauayan, pressured private respondents into signing the same.
Undaunted, Eudosia Daez brought her case on February 20, 1992 to the Court of Appeals via a petition forcertiorari. The Court of Appeals, however,
sustained the order of Secretary Leong in a decision dated April 29, 1992. Eudosia pursued her petition before this court but we denied it in a minute
resolution dated September 18, 1992. We also denied her motion for reconsideration on November 9, 1992.
Meantime, on August 6 and 12, 1992, the DAR issued Emancipation Patents (EPs) to private respondents. Thereafter, the Register of Deeds of Bulacan
issued the corresponding Transfer Certificates of Title (TCTs).
Exemption of the 4.1685 riceland from coverage by P.D. No. 27 having been finally denied her, Eudosia Daez next filed an application for retention of the
same riceland, this time under R.A. No. 6657.
In an order dated March 22, 1994, DAR Region III OIC-Director Eugenio B. Bernardo allowed Eudosia Daez to retain the subject riceland but he denied the
application of her eight (8) children to retain three (3) hectares each for their failure to prove actual tillage of the land or direct management thereof as
required by law
14
. Aggrieved, they appealed to the DAR.
On August 26, 1994, then DAR Secretary Ernesto D. Garilao, set aside the order of Regional Director Bernardo in a Resolution,
15
the decretal portion of
which reads, viz.:
WHEREFORE, premises considered, this Resolution is hereby issued setting aside with FINALITY the Order dated March 22, 1994 of the
Regional Director of DAR Region III.
The records of this case is remanded to the Regional Office for immediate implementation of the Order dated January 16, 1992 of this office as
affirmed by the Court of Appeals and the Supreme Court.
SO ORDERED.
Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19, 1995
16
.
She appealed Secretary Garilao's decision to the Office of the President which ruled in her favor. The dispositive portion of the Decision
17
of then Executive
Secretary reads:
WHEREFORE, the resolution and order appealed from are hereby SET ASIDE and judgment is rendered authorizing the retention by Eudosia
Daez or her heirs of the 4.1685-hectare landholding subject thereof.
SO ORDERED.
18

Aggrieved, private respondents sought from the Court of Appeals, a review of the decision of the Office of the President.
On January 28, 1999, the said Decision of the Office of the President was reversed. The Court of Appeals ordered, thus:
WHEREFORE, the assailed decision of July 5, 1996 and Order dated October 23, 1996 of the public respondents are REVERSED AND SET
ASIDE, and the Resolution and Order of DAR Secretary Ernesto D. Garilao respectively dated August 26, 1994 and January 19, 1995 are
REINSTATED.
SO ORDERED.
Hence, this petition which assigns the following errors:
I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT DISTINCTION BETWEEN EXEMPTION FROM AGRARIAN REFORM
COVERAGE AND THE RIGHT OF RETENTION OF LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN ADVERSE DECISION IN THE
FORMER WILL FORECLOSE FURTHER ACTION TO ENFORCE THE LATTER CONSIDERING THAT THEY CONSTITUTE SEPARATE AND DISTINCT
CAUSES OF ACTION AND, THEREFORE, ENFORCEABLE SEPARATELY AND IN SEQUEL.
II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE PRINCIPLE OF RES JUDICATA DESPITE THE FACT THAT THE
PREVIOUS CASE CITED (EXEMPTION FROM COVERAGE DUE TO NON-TENANCY) AND THE PRESENT CASE (RETENTION RIGHT) ARE OF
DIFFERENT CAUSES OF ACTION.
III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED/OPINED THAT THERE WAS A CUT-OFF DATE (AUGUST 27, 1985) FOR
LANDOWNERS TO APPLY FOR EXEMPTION OR RETENTION UNDER PD 27 AND THOSE WHO FAILED TO FILE THEIR
APPLICATIONS/PETITIONS ARE DEEMED TO HAVE WAIVED THEIR RIGHTS.
IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT PETITIONERS (RESPONDENTS THEREIN) ARE GUILTY OF ESTOPPEL.
V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LAND SUBJECT OF THIS CASE IS NO LONGER OWNED BY
PETITIONERS SINCE PRIVATE RESPONDENTS HAVE ALREADY BEEN ISSUED NOT ONLY THEIR RESPECTIVE CERTIFICATES OF LAND
TRANSFER BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF TITLE OVER THE DISPUTED AREA.
19

We grant the petition.
First. Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or corn lands. The requisites for coverage under the
OLT program are the following: (1) the land must be devoted to rice or corn crops; and (2) there must be a system of share-crop or lease-tenancy obtaining
therein. If either requisite is absent, a landowner may apply for exemption. If either of these requisites is absent, the land is not covered under OLT. Hence,
a landowner need not apply for retention where his ownership over the entire landholding is intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is irrigated, a three (3)-hectare lot constituting a family size farm.
However, said law allows a covered landowner to retain not more than seven (7) hectares of his land if his aggregate landholding does not exceed twenty-
four (24) hectares. Otherwise, his entire landholding is covered without him being entitled to any retention right
20
.
Consequently, a landowner may keep his entire covered landholding if its aggregate size does not exceed the retention limit of seven (7) hectares. In
effect, his land will not be covered at all by the OLT program although all requisites for coverage are present. LOI No. 474 clarified the effective coverage of
OLT to include tenanted rice or corn lands of seven (7) hectares or less, if the landowner owns other agricultural lands of more than seven (7) hectares.
The term "other agricultural lands" refers to lands other than tenanted rice or corn lands from which the landowner derives adequate income to support his
family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or corn crops even if it is tenanted; or (2) the land is
untenanted even though it is devoted to rice or corn crops.
On the other hand, the requisites for the exercise by the landowner of his right of retention are the following: (1) the land must be devoted to rice or corn
crops; (2) there must be a system of share-crop or lease-tenancy obtaining therein; and (3) the size of the landholding must not exceed twenty-four (24)
hectares, or it could be more than twenty-four (24) hectares provided that at least seven (7) hectares thereof are covered lands and more than seven (7)
hectares of it consist of "other agricultural lands".
Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT and those for the grant of an application for the exercise of
a landowner's right of retention, are different.
Hence, it is incorrect to posit that an application for exemption and an application for retention are one and the same thing. Being distinct remedies, finality
of judgment in one does not preclude the subsequent institution of the other. There was, thus, no procedural impediment to the application filed by Eudosia
Daez for the retention of the subject 4.1865-hectare riceland, even after her appeal for exemption of the same land was denied in a decision that became
final and executory.
Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject 4.1685 riceland.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by the legislature
21
. It serves to mitigate the effects of
compulsory land acquisition by balancing the rights of the landowner and the tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner
22
. A retained area, as its name denotes, is land which is not supposed to anymore leave the landowner' s
dominion, thus sparing the government from the inconvenience of taking land only to return it to the landowner afterwards, which would be a pointless
process.
In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian Reform
23
, we held that landowners who have not yet
exercised their retention rights under P.D. No. 27 are entitled to the new retention rights under R.A. No. 6657
24
. We disregarded the August 27, 1985
deadline imposed by DAR Administrative Order No. 1, series of 1985 on landowners covered by OLT. However, if a landowner filed his application for
retention after August 27, 1985 but he had previously filed the sworn statements required by LOI Nos. 41, 45 and 52, he is still entitled to the retention limit
of seven (7) hectares under P.D. No. 27
25
. Otherwise, he is only entitled to retain five (5) hectares under R.A. No. 6657.
Sec. 6 of R.A. No. 6657, which provides, viz.:
Sec. 6. Retention Limits Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary according to factors governing a viable family-size, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following
qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm; Provided,
That landowners whose land have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retai ned by them
thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the time of the approval
of this Act shall retain the same areas as long as they continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner. Provided, however, That in
case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein or be a
beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to remai n in the retained
area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right as a lease-holder to the land retained by the landowner. The tenant must exercise this
option within a period of one (1) year from the time the landowner manifests his choice of the area for retention.
In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be respected.
Upon the effectivity of this Act, any sale, disposition, lease, management contract or transfer of possession of private lands executed by the
original landowner in violation of this Act shall be null and void; Provided,however, That those executed prior to this Act shall be valid only when
registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Register of Deeds shall
inform the DAR within thirty (3) days of any transaction involving agricultural lands in excess of five (5) hectares
26
.
defines the nature and incidents of a landowner's right of retention. For as long as the area to be retained is compact or contiguous and it does not exceed
the retention ceiling of five (5) hectares, a landowner's choice of the area to be retained, must prevail. Moreover, Admi nistrative Order No. 4, series of
1991,
27
which supplies the details for the exercise of a landowner's retention rights, likewise recognizes no limit to the prerogative of the landowner,
although he is persuaded to retain other lands instead to avoid dislocation of farmers.
Without doubt, this right of retention may be exercised over tenanted land despite even the issuance of Certificate of Land Transfer (CLT) to farmer-
beneficiaries.
28
What must be protected, however, is the right of the tenants to opt to either stay on the land chosen to be retained by the landowner or be a
beneficiary in another agricultural land with similar or comparable features.
29

Finally. Land awards made pursuant to the government's agrarian reform program are subject to the exercise by a landowner, who is so qualified, of his
right of retention.
Under P.D. No. 27, beneficiaries are issued CLTs to entitle them to possess lands. Thereafter, they are issued Emancipation Patents (EPs) after
compliance with all necessary conditions. Such EPs, upon their presentation to the Register of Deeds, result in the issuance of the corresponding transfer
certificates of title (TCT) in favor of the beneficiaries mentioned therein
30
.
Under R.A. No. 6657, the procedure has been simplified
31
. Only Certificates of Land Ownership Award (CLOAs) are issued, in lieu of EPs, after compliance
with all prerequisites. Thereafter, upon presentation of the CLOAs to the Register of Deeds, TCTs are issued to the designated beneficiaries. CLTs are no
longer issued.
The issuance of EPs or CLOAs to beneficiaries does not absolutely bar the landowner from retaining the area covered thereby. Under Administrative Order
No. 2, series of 1994
32
, an EP or CLOA may be cancelled if the land covered is later found to be part of the landowner's retained area.
A certificate of title accumulates in one document a comprehensive statement of the status of the fee held by the owner of a parcel of land.
33
As such, it is a
mere evidence of ownership and it does not constitute the title to the land itself. It cannot confer title where no title has been acquired by any of the means
provided by law
34
.
Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a homestead patent because the land covered was not part of
the public domain and as a result, the government had no authority to issue such patent in the first place
35
. Fraud in the issuance of the patent, is also a
ground for impugning the validity of a certificate of title
36
. In other words, the invalidity of the patent or title is sufficient basis for nullifying the certificate of
title since the latter is merely an evidence of the former.
In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland were issued without Eudosia Daez having been accorded her
right of choice as to what to retain among her landholdings. The transfer certificates of title thus issued on the basis of those CLTs cannot operate to defeat
the right of the heirs of deceased Eudosia Daez to retain the said 4.1685 hectares of riceland.
WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals, dated January 28, 1998, is REVERSED and SET ASIDE
and the Decision of the Office of the President, dated July 5, 1996, is hereby REINSTATED. In the implementation of said decision, however, the
Department of Agrarian Reform is hereby ORDERED to fully accord to private respondents their rights under Section 6 of R.A. No. 6657.1wphi1.nt
No costs.
SO ORDERED.
----------------------------------
G.R. No. 36213 June 29, 1989
FELIX GONZALES & CARMEN GONZALES, petitioners,
vs.
HON. COURT OF APPEALS, DECEASED SPOUSES ANDRES AGCAOILE & LEONORA AGCAOILE, substituted by LUCIA A. SISON, respondents.
The issue in this case is whether an agricultural tenancy relationship can be created over land embraced in an approved residential subdivision. The
petitioners leased a lot in the subdivision on which they built their house, and, by tolerance of the subdivision owner, they cultivated some vacant adjoining
lots. The Court of Agrarian Relations, as well as the Court of Appeals, ruled that "the plaintiffs are not de jure agricultural tenants." (p. 66, Rollo.) That ruling
is assailed in this appeal by certiorari.
On October 26, 1988, Lucia A. Sison filed a motion to be substituted in lieu of the private respondents Andres Agcaoile (who died on May 20, 1976) and
Leonora Agcaoile (who died on March 22, 1979) as she inherited, and is now the registered owner of, nine (9) unsold lots in the subdivision covered by
TCT Nos. 20397 and 20398 of the Agcaoile spouses, now registered in her name under TCT Nos. T-98.096 up to T-98.104 (pp. 117-130, Rollo).
On February 22, 1989, this Court granted her motion. The facts of this case are not disputed and are recited in the appealed decision dated December 6,
1972 of the Court of Appeals in CA-G.R. No. 00253-R, as follows:
Defendants spouses are the owners of two parcels of land registered in their names under T.C.T. Nos. 20397 and 20398, with an area
of 43,383 square meters, located in Barrio Bagbaguin, Sta. Maria, Bulacan. At the time defendants purchased the land in 1937,
Maximo Cruz was the tenant who was planting palay thereon. Maximo continued as tenant until he was succeeded upon his death by
his son, Fidel Cruz. After tenanting the land for four years, Fidel was succeeded by Pascual Gonzales, father of plaintiff Felix
Gonzales. In 1954, Pascual ceased to be a tenant because the land was proposed to be converted into a residential subdivision. The
following year, or on May 3, 1955, the land became an approved subdivision. It was subdivided into twenty-six (26) residential lots.
Sometime in 1956, the plaintiffs spouses offered to pay a rental for Lot No. 1285-M of the subdivision on which they were to build a
house. Defendant Leonora Agcaoile agreed to a rental of P 20.00 a month. Plaintiffs also offered to act as agents for the subdivision.
Leonora agreed. Plaintiffs were able to sell a lot to one Clements Bernabe, and they received the corresponding commission of P
300.00. A number of other lots were sold by defendants to different buyers. While plaintiffs were renting a portion of the subdivision,
they requested to be allowed to plant palay on the lots that have not yet been sold. Leonora acquiesced because she pitied the plaintiff
who have many children. No specific agreement was concluded with regard to the sharing of harvests, but plaintiffs delivered part of
the yield to Federico Mateo, defendants' overseer. When plaintiffs defaulted renting Lot 1285-M, defendants sent the letter dated
September 12, 1968 asking them to pay the accrued rentals or to vacate the premises (Exh. 1). Plaintiffs countered with an action to
elect the leasedhold system of tenancy, docketed as CAR Case No. 2169 Bulacan '68. Said case was dismissed on August 7, 1969.
On November 18, 1969, plaintiff filed the present action seeking to elect the leasehold system and praying for a reliquidation of past
harvests embracing the agricultural years 1961-1962 to 1967-1968, inclusive. Before summons could be served on defendants, they
initiated an action against the plaintiffs for recovery of possession, in the Court of First Instance of Bulacan, where said action was
docketed as Civil Case No. SM-329. Then defendants answered the complaint in the present case, alleging that the property subject of
the action is residential land. On October 29, 1970, the Bulacan CFI rendered a decision in Civil Case SM-329 favorably to the
plaintiffs therein. On May 14, 1971, the judgment subject of the present appeal was rendered. (pp. 15-16, Rollo).
Upon the evidence, the Court of Appeals upheld the decision of the Agrarian Court. It ruled:
... Upon the evidence, it appears that in 1955 the property subject of the action ceased to be agricultural or farmland, it having been
converted as of that year into a homesite or residential subdivision. When plaintiffs, therefore, gained possession of a portion of the
land in 1956, upon acquiescence of defendants, they were not installed as agricultural tenants on a piece of agricultural land.
Agricultural tenancy cannot be created on a homesite or residential subdivision. Republic Act No. 1199, invoked by the appellants,
does not apply to such property. And neither are the rights to elect leasehold and to reliquidate the harvests assertible in respect to a
residential subdivision or homesite. (p. 16, Rollo).
After deliberating on the petition and arguments in the briefs of the parties, We resolved to deny the petition for review.
There is no merit in the petitioners' argument that inasmuch as residential and commercial lots may be considered "agricultural" (Krivenko vs. Register of
Deeds, 79 Phil. 461) an agricultural tenancy can be established on land in a residential subdivision. The Krivenko decision i nterpreting the constitutional
prohibition against transferring private agricultural land to individuals, corporations, or associations not qualified to acquire or hold lands of the public
domain, save in the case of hereditary succession (Art. XIII Sec. 5, 1935 Constitution; later Art. XIV, Sec. 14, 1973 Constitution; Art. XII, Sec. 7, 1987
Constitution) has nothing to do with agricultural tenancy. An agricultural leasehold cannot be established on land which has ceased to be devoted to
cultivation or farming because of its conversion into a residential subdivision.
Petitioners may not invoke Section 36(l) of Republic Act No. 3844 which provides that "when the lessor-owner fails to substantially carry out the conversion
of his agricultural land into a subdivision within one year after the dispossession of the lessee, the lessee shall be entitled to reinstatement and damages,"
for the petitioners were not agricultural lessees or tenants of the land before its conversion into a residential subdivision in 1955. Not having been
dispossessed by the conversion of the land into a residential subdivision, they may not claim a right to reinstatement.
Furthermore, their admission that: (1) they leased from the respondents a lot (No. 1285-M) in the subdivision on which they built their house; (2) that as
commission agents for the respondents, they were able to sell a subdivision lot to Clemente Bernabe, and received a P 300-commission on the sale; and
(3) that "a number of other lots were sold by respondents to different buyers," (p. 51, Rollo) refutes the petitioners' contention that the development of the
subdivision was a mere "scheme" to dispossess the previous tenant.
On the other hand, the petitioners' tactic of entering the subdivision as lessee of a homelot and thereafter cultivating some unsold lots ostensibly for
temporary use as a home garden, but covertly for the purpose of later claiming the land as "tenanted" farm lots, recalls the fable of the camel that sought
shelter inside its master's tent during a storm, and once inside, kicked its master out of the tent. Here, the private respondents' tolerance of the petitioners'
supposedly temporary use of some vacant lots in the subdivision was seized by the latter as a weapon to deprive the respondents of their land.
WHEREFORE, finding no reversible error in the decision of the Court of Appeals, We deny the petition for review for lack of merit.
SO ORDERED.
-------------------
G.R. No. L-54106 February 16, 1982
LUCRECIO PATRICIO, SEGUNDO DALIGDIG, FRANCISCO DALIGDIG, FLORENCIO ARELLANO and EPIFANIO DALIGDIG, petitioners,
vs.
ISABELO BAYOG, CONRADA, PEDRO, EMILIO, ALFONSO, DIONISIO and ARSENIO, all surnamed MENDEZ, and COURT OF APPEALS, respondents.
The legal issue in this case is whether the tenants hired by the purchaser of a homestead planted to coconuts and bananas may be ejected by the
homesteader's heirs who were allowed by the Court of Appeals to repurchase the homestead and who desire to personally possess and till the land.
As factual background, it should be stated that in 1934 Policarpio Mendez obtained a patent and Torrens title for a homestead with an area of about
twenty-three hectares located at Sitio Badiangon, Barrio Dalipuga, Iligan City. He and his wife, Petra Macaliag and their nine children lived on the land,
cleared it and planted coconuts thereon.
In 1956, Mendez sold the homestead to the spouses Eugenio Lamberang and Ester Fuentes. In 1958, Mendez and his children filed an action to annul the
sale. Lamberang countered with an ejectment suit. On March 20, 1961, Mendez and his children filed an action against the Lamberang spouses for the
reconveyance of the homestead.
The three cases reached the Court of Appeals which in a decision dated January 3, 1977 ordered Lamberang to reconvey the homestead to the Mendezes
"free of all liens and encumbrances " upon their payment to Lamberang of P19,411.28 as redemption price. That judgment became final and executory.
The Court of Appeals also held that upon the execution of the deed of reconveyance and the delivery of the redemption price t o the Lamberang spouses,
the Mendezes Would be "entitled to the possession and occupancy" of the homestead. (Mendez vs. Lamberang, Lamberang vs. Bayug, and Mendez vs.
Fuentes-Lamberang CA-G.R. Nos. 50819-81-R.)
The Mendezes paid the redemption price and the Lamberang spouses reconveyed the homestead. Pursuant to a writ of possession, a deputy sheriff
placed Isabelo Bayog, the representative of the Mendez family in possession of the homestead after ejecting the tenants of the Lamberang spouses
named Lucrecio Patricio, Florencio Arellano, Epifanio Daligdig, Francisco Daligdig and Segundo Daligdig, now the petitioners herein.
However, the tenants reentered the homestead allegedly upon instruction of Bernardino O. Nuez, a trial attorney of the Bureau of Agrarian Legal
Assistant. Hence, the Mendezes filed a motion to declare them and Nuez in contempt of court.
Before that contempt incident could be resolved, or on April 10, 1979, the tenants, represented by Nuez, filed in the Court of Agrarian Relations at Iligan
City a complaint for damages against the heirs of Policarpio Mendez named Isabelo Bayog and Conrada, Pedro, Emilio, Alfonso, Dionisio and Arsenio, all
surnamed Mendez (CAR Case No. 92), now private respondents.
By reason of an agreement between the parties at the hearing on October 22, 1979, the said tenants vacated the land. They are now not in possession of
the land (p. 5, Rollo).
The Agrarian Court in its decision of December 12, 1979 held that the plaintiffs were "tenants of the landholding in question" and ordered their
reinstatement therein. The lower court directed the Mendezes to pay them their "unrealized shares" in the coconuts.
The Agrarian Court concluded that the plaintiffs became the tenants of the Mendezes because the Lamberangs, with whom they established a tenancy
relationship, were not illegal possessors of the land, having acquired it through a sale. The court said that under Section 10 of the Code of Agrarian Reform
tenants are entitled to security of tenure and that under section 36 of that Code, personal cultivation by the landowner is no longer a ground for terminating
tenancy. The Agrarian Court noted that Presidential Decree No. 152 dated March 13, 1973, which prohibits the employment or use of share tenants in
complying with the requirements regarding entry, occupation and cultivation of public lands, is not applicable to the case.
The Mendezes appealed to the Court of Appeals which on May 8, 1980 reversed the decision of the Agrarian Court and declared that the Mendezes are
"entitled to the homestead without the gravamen of plaintiffs' tenancies"because the purpose of granting homesteads is "to distribute disposable
agricultural lots of the State to land destitute citizens for their home and cultivation" (Pascua vs. Talens, 80 Phil. 792, 793). That policy would be defeated "
if the buter can install permanents tenants in the homestead who would even have the right of preemption" (Patricio vs. Bayog, CA-G. R. No. 10611-CAR ).
The tenants appealed to this Court. They contend (a) that under section 118 of the Public Land Law, share tenancy may be constituted in homestead after
five years from the grant of the patent because section 119 of the same law does not prohibit any encumbrance on the homestead after that period and (b)
that they cannot be ejected because they were not parties in any of the cases involving the Mendezes and Lamberang.
This is a case where two competing interests have to be weighed against each other: the tenant's right to security of tenure as against the right of the
homesteader or his heirs to own a piece of land for their residence and livelihood.
We hold that the more paramount and superior policy consideration is to uphold the right of the homesteader and his heirs to own and cultivate personally
the land acquired from the State without being encumbered by tenancy relations. *
This holding is consistent with the intention of the Code of Agrarian Reform to abolish agricultural share tenancy, "to establish owner-cultivatorship and the
economic family-size farm as the basis of Philippine agriculture and "to achieve a dignified existence for the small farmers free from pernicious institutional
restraints and practices" (Sec. 2).
WHEREFORE, the judgment of the Court of Appeals is affirmed. No costs.
SO ORDERED.
------------------------------
G.R. No. 127876 December 17, 1999
ROXAS & CO., INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM, SECRETARY OF AGRARIAN REFORM, DAR REGIONAL
DIRECTOR FOR REGION IV, MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD,respondents.
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the acquisition of these haciendas by the government
under Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988.
Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas, namely, Haciendas Palico, Banil ad and Caylaway, all
located in the Municipality of Nasugbu, Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate of Title (TCT) No.
985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. Hacienda Banilad is 1,050 hectares i n area, registered under
TCT No. 924 and covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is registered under TCT
Nos. T-44662, T-44663, T-44664 and T-44665.
The events of this case occurred during the incumbency of then President Corazon C. Aquino. In February 1986, President Aquino issued Proclamation
No. 3 promulgating a Provisional Constitution. As head of the provisional government, the President exercised legislative power "until a legislature is
elected and convened under a new Constitution."
1
In the exercise of this legislative power, the President signed on July 22, 1987, Proclamation No. 131
instituting a Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the mechanisms necessary to initially implement the
program.
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power from the President.
2
This Congress passed Republic
Act No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June
15, 1988.
Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions of
E.O. No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent DAR in accordance with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer (MARO) of Nasugbu, Batangas, sent a notice entitled
"Invitation to Parties" to petitioner. The Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico."
3
Therein, the MARO invited
petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu to discuss the results of the DAR investigation of Hacienda Palico, which was
"scheduled for compulsory acquisition this year under the Comprehensive Agrarian Reform Program."
4

On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and ocular inspection of the Hacienda. In the first Report, the
MARO found that 270 hectares under Tax Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually occupied and
cultivated by 34 tillers of sugarcane.
5
In the second Report, the MARO identified as "flat to undulating" approximately 339 hectares under Tax Declaration
No. 0234 which also had several actual occupants and tillers of sugarcane;
6
while in the third Report, the MARO found approximately 75 hectare under
Tax Declaration No. 0354 as "flat to undulating" with 33 actual occupants and tillers also of sugarcane.
7

On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the MARO, representatives of the Barangay Agrarian Reform
Committee (BARC) and Land Bank of the Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended that
333.0800 hectares of Hacienda Palico be subject to compulsory acquisition at a value of P6,807,622.20.
8
The following day, October 28, 1989, two (2)
more Summary Investigation Reports were submitted by the same officers and representatives. They recommended that 270.0876 hectares and 75.3800
hectares be placed under compulsory acquisition at a compensation of P8,109,739.00 and P2,188,195.47, respectively.
9

On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago sent a "Notice of Acquisition" to petitioner. The Notice
was addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila.
10

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate acquisition and distribution by the government
under the CARL; that based on the DAR's valuation criteria, the government was offering compensation of P3.4 million for 333.0800 hectares; that whether
this offer was to be accepted or rejected, petitioner was to inform the Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of
petitioner's rejection or failure to reply within thirty days, respondent DAR shall conduct summary administrative proceedings with notice to petitioner to
determine just compensation for the land; that if petitioner accepts respondent DAR's offer, or upon deposit of the compensation with an accessible bank if
it rejects the same, the DAR shall take immediate possession of the land.
11

Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager three (3) separate Memoranda
entitled "Request to Open Trust Account." Each Memoranda requested that a trust account representing the valuation of three portions of Hacienda Palico
be opened in favor of the petitioner in view of the latter's rejection of its offered value.
12

Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of Haciendas Palico and Banilad from agricultural to non-
agricultural lands under the provisions of the CARL.
13
On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for
conversion of the two haciendas.
14

Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the two Haciendas. The LBP trust accounts as
compensation for Hacienda Palico were replaced by respondent DAR with cash and LBP bonds.
15
On October 22, 1993, from the mother title of TCT No.
985 of the Hacienda, respondent DAR registered Certificate of Land Ownership Award (CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to
farmer beneficiaries.
16

Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a notice to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas
17

The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition under the CARL; that should petitioner wish to avail
of the other schemes such as Voluntary Offer to Sell or Voluntary Land Transfer, respondent DAR was willing to provide assistance thereto.
18

On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter to attend a conference on September 21, 1989 at the
MARO Office in Nasugbu to discuss the results of the MARO's investigation over Hacienda Banilad.
19

On September 21, 1989, the same day the conference was held, the MARO submitted two (2) Reports. In his first Report, he found that approximately 709
hectares of land under Tax Declaration Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were discovered 162 actual occupants and
tillers of sugarcane.
20
In the second Report, it was found that approximately 235 hectares under Tax Declaration No. 0390 were "flat to undulating," on
which were 92 actual occupants and tillers of sugarcane.
21

The results of these Reports were discussed at the conference. Present in the conference were representatives of the prospective farmer beneficiaries, the
BARC, the LBP, and Jaime Pimentel on behalf of the landowner.
22
After the meeting, on the same day, September 21, 1989, a Summary Investigation
Report was submitted jointly by the MARO, representatives of the BARC, LBP, and the PARO. They recommended that after ocular inspection of the
property, 234.6498 hectares under Tax Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA.
23
The following day,
September 22, 1989, a second Summary Investigation was submitted by the same officers. They recommended that 737.2590 hectares under Tax
Declaration Nos. 0236 and 0237 be likewise placed under compulsory acquisition for distribution.
24

On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two (2) separate "Notices of Acqui sition" over Hacienda
Banilad. These Notices were sent on the same day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico, however,
the Notices over Hacienda Banilad were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila.
25

Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares and P4,428,496.00 for 234.6498 hectares.
26

On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a "Request to Open Trust Account" in petitioner's name as
compensation for 234.6493 hectares of Hacienda Banilad.
27
A second "Request to Open Trust Account" was sent on November 18, 1991 over 723.4130
hectares of said Hacienda.
28

On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in cash and LBP bonds had been earmarked as
compensation for petitioner's land in Hacienda Banilad.
29

On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the effectivity of the CARL. The Hacienda has a total area of
867.4571 hectares and is covered by four (4) titles TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989, respondent DAR, through
the Regional Director for Region IV, sent to petitioner two (2) separate Resolutions accepting petitioner's voluntary offer to sell Hacienda Caylaway,
particularly TCT Nos. T-44664 and T-44663.
30
The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M
31

On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP Regional Manager requesting for the valuation of the land
under TCT Nos. T-44664 and T-44663.
32
On the same day, respondent DAR, through the Regional Director, sent to petitioner a "Notice of Acquisition"
over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares under TCT No. T-44663.
33
Like the Resolutions of Acceptance, the Notice of
Acquisition was addressed to petitioner at its office in Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the Secretary of respondent DAR withdrawing its VOS
of Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to
non-agricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other
uses.
34

In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian
reform. Respondent Secretary also denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on specific grounds such
as unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and that the land is undeveloped.
35

Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its application for conversion of both Haciendas Palico
and Banilad.
36
On July 14, 1993, petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda Caylaway in
light of the following:
1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture, Region 4, 4th Floor, ATI (BA) Bldg.,
Diliman, Quezon City dated March 1, 1993 stating that the lands subject of referenced titles "are not feasible and economically sound
for further agricultural development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning Ordinance reclassifying areas covered
by the referenced titles to non-agricultural which was enacted after extensive consultation with government agencies, including [the
Department of Agrarian Reform], and the requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993 approving the Zoning Ordinance enacted
by the Municipality of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning & Development, Coordinator and
Deputized Zoning Administrator addressed to Mrs. Alicia P. Logarta advising that the Municipality of Nasugbu, Batangas has no
objection to the conversion of the lands subject of referenced titles to non-agricultural.
37

On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR Adjudication Board (DARAB) praying for the cancellation of the
CLOA's issued by respondent DAR in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located,
had been declared a tourist zone, that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the
land to non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the prejudicial question of whether the property was subject to
agrarian reform, hence, this question should be submitted to the Office of the Secretary of Agrarian Reform for determination.
38

On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It questioned the expropriation of its properties under the CARL
and the denial of due process in the acquisition of its landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994.
39
Petitioner moved for reconsideration but the motion was denied on January
17, 1997 by respondent court.
40

Hence, this recourse. Petitioner assigns the following errors:
A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S CAUSE OF ACTION IS
PREMATURE FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT ILLEGALITY OF THE
RESPONDENTS' ACTS, THE IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN,
SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW ALL OF WHICH ARE EXCEPTIONS TO THE SAID
DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S LANDHOLDINGS ARE SUBJECT
TO COVERAGE UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE UNDISPUTED FACT THAT
PETITIONER'S LANDHOLDINGS HAVE BEEN CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL
PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE
ZONING ORDINANCE OF THE MUNICIPALITY OF NASUGBU RE-CLASSIFYING CERTAIN PORTIONS OF PETITIONER'S
LANDHOLDINGS AS NON-AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS OUTSIDE THE SCOPE OF
AGRARIAN REFORM, OR AT THE VERY LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY
RESPONDENT DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO DECLARE THE PROCEEDINGS BEFORE
RESPONDENT DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT RESPONDENTS BLATANTLY
DISREGARDED THE PROCEDURE FOR THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE PARTICULARLY, IN
FAILING TO GIVE DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY THE SPECIFIC AREAS SOUGHT TO BE
ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RECOGNIZE THAT PETITIONER WAS
BRAZENLY AND ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST COMPENSATION, CONSIDERING THAT
PETITIONER WAS NOT PAID JUST COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY STRIPPED OF ITS
LANDHOLDINGS THROUGH THE ISSUANCE OF CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION OF R.A.
6657.
41

The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of this petition despite petitioner's failure to exhaust
administrative remedies; (2) whether the acquisition proceedings over the three haciendas were valid and in accordance with law; and (3) assuming the
haciendas may be reclassified from agricultural to non-agricultural, whether this court has the power to rule on this issue.
I. Exhaustion of Administrative Remedies.
In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding that petitioner failed to exhaust administrative
remedies. As a general rule, before a party may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of
administrative redress. This is not absolute, however. There are instances when judicial action may be resorted to immediatel y. Among these exceptions
are: (1) when the question raised is purely legal; (2) when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when
there is urgent need for judicial intervention; (5) when the respondent acted in disregard of due process; (6) when the respondent is a department secretary
whose acts, as an alter ego of the President, bear the implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8) when
there is no other plain, speedy and adequate remedy; (9) when strong public interest is involved; (10) when the subject of the controversy is private land;
and (11) in quo warranto proceedings.
42

Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to require it to exhaust administrative remedies before the
DAR itself was not a plain, speedy and adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries over portions of petitioner's land without just
compensation to petitioner. A Certificate of Land Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the
Comprehensive Agrarian Reform Law of 1988.
43
Before this may be awarded to a farmer beneficiary, the land must first be acquired by the State from the
landowner and ownership transferred to the former. The transfer of possession and ownership of the land to the government are conditioned upon
the receipt by the landowner of the corresponding payment or deposit by the DAR of the compensation with an accessible bank. Until then, title remains
with the landowner.
44
There was no receipt by petitioner of any compensation for any of the lands acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law provides that the deposit must be made only in "cash" or "LBP
bonds."
45
Respondent DAR's opening of trust account deposits in petitioner' s name with the Land Bank of the Philippines does not constitute payment
under the law. Trust account deposits are not cash or LBP bonds. The replacement of the trust account with cash or LBP bonds did not ipso facto cure the
lack of compensation; for essentially, the determination of this compensation was marred by lack of due process. In fact, in the entire acquisition
proceedings, respondent DAR disregarded the basic requirements of administrative due process. Under these circumstances, the issuance of the CLOA's
to farmer beneficiaries necessitated immediate judicial action on the part of the petitioner.
II. The Validity of the Acquisition Proceedings Over the Haciendas.
Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings themselves. Before we rule on this matter, however, there
is need to lay down the procedure in the acquisition of private lands under the provisions of the law.
A. Modes of Acquisition of Land under R. A. 6657
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two (2) modes of acquisition of pri vate land: compulsory
and voluntary. The procedure for the compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of private lands, the following procedures shall be
followed:
a). After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire
the land to the owners thereof, by personal delivery or registered mail, and post the same in a conspicuous
place in the municipal building and barangay hall of the place where the property is located. Said notice shall
contain the offer of the DAR to pay a corresponding value in accordance with the valuation set forth in Sections
17, 18, and other pertinent provisions hereof.
b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail, the
landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer.
c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase price of the land
within thirty (30) days after he executes and delivers a deed of transfer in favor of the Government and surrenders
the Certificate of Title and other muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to determine
the compensation for the land requiring the landowner, the LBP and other interested parties to submit evidence as
to the just compensation for the land, within fifteen (15) days from receipt of the notice. After the expiration of the
above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days
after it is submitted for decision.
e) Upon receipt by the landowner of the corresponding payment, or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.
f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation.
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer beneficiaries must first be identified. After identification, the
DAR shall send a Notice of Acquisition to the landowner, by personal delivery or registered mail, and post it in a conspicuous place in the municipal
building and barangay hall of the place where the property is located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his
administrator or representative shall inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and delivers a deed
of transfer in favor of the government and surrenders the certificate of title. Within thirty days from the execution of the deed of transfer, t he Land Bank of
the Philippines (LBP) pays the owner the purchase price. If the landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary
administrative proceedings to determine just compensation for the land. The landowner, the LBP representative and other interested parties may submit
evidence on just compensation within fifteen days from notice. Within thirty days from submission, the DAR shall decide the case and inform the owner of
its decision and the amount of just compensation. Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of response
from the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank. The DAR shall immediately take possession of
the land and cause the issuance of a transfer certificate of title in the name of the Republic of the Philippines. The land shall then be redistributed to the
farmer beneficiaries. Any party may question the decision of the DAR in the regular courts for final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten the implementation of the Comprehensive Agrarian Reform
Program (CARP).
46
Under Section 16 of the CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the
beneficiaries. However, the law is silent on how the identification process must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative
Order No.12, Series or 1989, which set the operating procedure in the identification of such lands. The procedure is as follows:
II. OPERATING PROCEDURE
A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the CARP in his area of responsibility. The
masterlist shall include such information as required under the attached CARP Masterlist Form which shall include
the name of the landowner, landholding area, TCT/OCT number, and tax declaration number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or landholding covered under
Phase I and II of the CARP except those for which the landowners have already filed applications to avail of other
modes of land acquisition. A case folder shall contain the following duly accomplished forms:
a) CARP CA Form 1 MARO Investigation Report
b) CARP CA Form 2 Summary Investigation Report of Findings and Evaluation
c) CARP CA Form 3 Applicant's Information Sheet
d) CARP CA Form 4 Beneficiaries Undertaking
e) CARP CA Form 5 Transmittal Report to the PARO
The MARO/BARC shall certify that all information contained in the above-mentioned forms have been examined
and verified by him and that the same are true and correct.
3. Send a Notice of Coverage and a letter of invitation to a conference/meeting to the landowner covered by the
Compulsory Case Acquisition Folder. Invitations to the said conference/meeting shall also be sent to the
prospective farmer-beneficiaries, the BARC representative(s), the Land Bank of the Philippines (LBP)
representative, and other interested parties to discuss the inputs to the valuation of the property. He shall discuss
the MARO/BARC investigation report and solicit the views, objection, agreements or suggestions of the
participants thereon. The landowner shall also be asked to indicate his retention area. The minutes of the meeting
shall be signed by all participants in the conference and shall form an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).
B. The PARO shall:
1. Ensure that the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance with A.O. No. 6,
Series of 1988.
47
The valuation worksheet and the related CACF valuation forms shall be duly certified correct by
the PARO and all the personnel who participated in the accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through ocular inspection and verification of the
property. This ocular inspection and verification shall be mandatory when the computed value exceeds = 500,000
per estate.
4. Upon determination of the valuation, forward the case folder, together with the duly accomplished valuation
forms and his recommendations, to the Central Office. The LBP representative and the MARO concerned shall be
furnished a copy each of his report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO, review, evaluate and determine the final land
valuation of the property covered by the case folder. A summary review and evaluation report shall be prepared
and duly certified by the BLAD Director and the personnel directly participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized representative, a Notice of Acquisition (CARP
CA Form 8) for the subject property. Serve the Notice to the landowner personally or through registered mail
within three days from its approval. The Notice shall include, among others, the area subject of compulsory
acquisition, and the amount of just compensation offered by DAR.
3. Should the landowner accept the DAR's offered value, the BLAD shall prepare and submit to the Secretary for
approval the Order of Acquisition. However, in case of rejection or non-reply, the DAR Adjudication Board
(DARAB) shall conduct a summary administrative hearing to determine just compensation, in accordance with the
procedures provided under Administrative Order No. 13, Series of 1989. Immediately upon receipt of the DARAB's
decision on just compensation, the BLAD shall prepare and submit to the Secretary for approval the required
Order of Acquisition.
4. Upon the landowner's receipt of payment, in case of acceptance, or upon deposit of payment in the designated
bank, in case of rejection or non-response, the Secretary shall immediately direct the pertinent Register of Deeds
to issue the corresponding Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. Once
the property is transferred, the DAR, through the PARO, shall take possession of the land for redistribution to
qualified beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer (MARO) keep an updated master list of all agricultural
lands under the CARP in his area of responsibility containing all the required information. The MARO prepares a Compulsory Acquisition Case Folder
(CACF) for each title covered by CARP. The MARO then sends the landowner a "Notice of Coverage" and a "letter of invitation" to a "conference/meeting"
over the land covered by the CACF. He also sends invitations to the prospective farmer-beneficiaries the representatives of the Barangay Agrarian Reform
Committee (BARC), the Land Bank of the Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the property and solicit
views, suggestions, objections or agreements of the parties. At the meeting, the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall complete the valuation of the land. Ocular
inspection and verification of the property by the PARO shall be mandatory when the computed value of the estate exceeds P500,000.00. Upon
determination of the valuation, the PARO shall forward all papers together with his recommendation to the Central Office of the DAR. The DAR Central
Office, specifically, the Bureau of Land Acquisition and Distribution (BLAD), shall review, evaluate and determine the final land valuation of the property.
The BLAD shall prepare, on the signature of the Secretary or his duly authorized representative, a Notice of Acquisition for the subject property.
48
From
this point, the provisions of Section 16 of R.A. 6657 then apply.
49

For a valid implementation of the CAR program, two notices are required: (1) the Notice of Coverage and letter of invitation to a preliminary conference
sent to the landowner, the representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A.O. No. 12, Series of
1989; and (2) the Notice of Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the conference, and its actual conduct cannot be understated.
They are steps designed to comply with the requirements of administrative due process. The implementation of the CARL is an exercise of the State's
police power and the power of eminent domain. To the extent that the CARL prescribes retention limits to the landowners, there is an exercise of police
power for the regulation of private property in accordance with the Constitution.
50
But where, to carry out such regulation, the owners are deprived of lands
they own in excess of the maximum area allowed, there is also a taking under the power of eminent domain. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the title to and physical possession of the said excess and all beneficial rights accruing
to the owner in favor of the farmer beneficiary.
51
The Bill of Rights provides that "[n]o person shall be deprived of life, liberty or property without due
process of law."
52
The CARL was not intended to take away property without due process of law.
53
The exercise of the power of eminent domain requires
that due process be observed in the taking of private property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993
by DAR A.O. No. 1, Series of 1993. The Notice of Coverage and letter of invitation to the conference meeting were expanded and amplified in said
amendments.
DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory
Acquisition Pursuant to R.A. 6657," requires that:
B. MARO
1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting documents.
2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares
corresponding VOCF/CACF by landowner/landholding.
3. Notifies/invites the landowner and representatives of the LBP, DENR, BARC and
prospective beneficiaries of the schedule of ocular inspection of the property at least one
week in advance.
4. MARO/LAND BANK FIELD OFFICE/BARC
a) Identify the land and landowner, and determine the suitability for
agriculture and productivity of the land and jointly prepare Field
Investigation Report (CARP Form No. 2), including the Land Use Map of
the property.
b) Interview applicants and assist them in the preparation of the
Application For Potential CARP Beneficiary (CARP Form No. 3).
c) Screen prospective farmer-beneficiaries and for those found qualified,
cause the signing of the respective Application to Purchase and Farmer's
Undertaking (CARP Form No. 4).
d) Complete the Field Investigation Report based on the result of the
ocular inspection/investigation of the property and documents submitted.
See to it that Field Investigation Report is duly accomplished and signed
by all concerned.
5. MARO
a) Assists the DENR Survey Party in the conduct of a boundary/
subdivision survey delineating areas covered by OLT, retention, subject
of VOS, CA (by phases, if possible), infrastructures, etc., whichever is
applicable.
b) Sends Notice of Coverage (CARP Form No. 5) to landowner
concerned or his duly authorized representative inviting him for a
conference.
c) Sends Invitation Letter (CARP Form No. 6) for a conference/public
hearing to prospective farmer-beneficiaries, landowner, representatives
of BARC, LBP, DENR, DA, NGO's, farmers' organizations and other
interested parties to discuss the following matters:
Result of Field Investigation
Inputs to valuation
Issues raised
Comments/recommendations by all parties
concerned.
d) Prepares Summary of Minutes of the conference/public hearing to be
guided by CARP Form No. 7.
e) Forwards the completed VOCF/CACF to the Provincial Agrarian
Reform Office (PARO) using CARP Form No. 8 (Transmittal Memo to
PARO).
xxx xxx xxx
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) transactions involving lands
enumerated under Section 7 of the CARL.
54
In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell Case Folder (VOCF) and
the Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular landholding. The MARO notifies the landowner as well as
representatives of the LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property at least one week before the scheduled
date and invites them to attend the same. The MARO, LBP or BARC conducts the ocular inspection and investigation by identifying the land and
landowner, determining the suitability of the land for agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on its
investigation, the MARO, LBP or BARC prepares the Field Investigation Report which shall be signed by all parties concerned. In addition to the field
investigation, a boundary or subdivision survey of the land may also be conducted by a Survey Party of the Department of Environment and Natural
Resources (DENR) to be assisted by the MARO.
55
This survey shall delineate the areas covered by Operation Land Transfer (OLT), areas retained by the
landowner, areas with infrastructure, and the areas subject to VOS and CA. After the survey and field investigation, the MARO sends a "Notice of
Coverage" to the landowner or his duly authorized representative inviting him to a conference or public hearing with the farmer beneficiaries,
representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non-government organizations, farmer's organizations and other interested
parties. At the public hearing, the parties shall discuss the results of the field investigation, issues that may be raised in relation thereto, inputs to the
valuation of the subject landholding, and other comments and recommendations by all parties concerned. The Minutes of the conference/public hearing
shall form part of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The PARO reviews, evaluates and validates the Field
Investigation Report and other documents in the VOCF/CACF. He then forwards the records to the RARO for another review.
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1, Series of 1993 provided, among others, that:
IV. OPERATING PROCEDURES:
Steps Responsible Activity Forms/ Agency/Unit Document (requirements)
A. Identification and Documentation
xxx xxx xxx
5 DARMO Issue Notice of Coverage CARP to LO by personal delivery Form No. 2 with proof of service, or registered mail with return
card, informing him that his property is now under CARP coverage and for LO to select his retention area, if he desires to avail of his
right of retention; and at the same time invites him to join the field investigation to be conducted on his property which should be
scheduled at least two weeks in advance of said notice. A copy of said Notice shall CARP be posted for at least one Form No. 17
week on the bulletin board of the municipal and barangay halls where the property is located. LGU office concerned notifies DAR
about compliance with posting requirements thru return indorsement on CARP
Form No. 17.
6 DARMO Send notice to the LBP, CARP BARC, DENR representatives Form No. 3 and prospective ARBs of the schedule of the field
investigation to be conducted on the subject property.
7 DARMO With the participation of CARP BARC the LO, representatives of Form No. 4
LBP the LBP, BARC, DENR Land Use DENR and prospective ARBs, Map Local Office conducts the investigation on subject property
to identify the landholding, determines its suitability and productivity; and jointly prepares the FieldInvestigation Report (FIR) and Land
Use Map. However, the field investigation shall proceed even if the LO, the representatives of the DENR and prospective ARBs are
not available provided, they were given due notice of the time and date of investigation to be conducted. Similarly, if the LBP
representative is not available or could not come on the scheduled date, the field investigation shall also be conducted, after which the
duly accomplished
Part I of CARP Form No. 4 shall be forwarded to the LBP representative for validation. If he agrees to the ocular inspection report of
DAR, he signs the FIR (Part I) and accomplishes Part II thereof. In the event that there is a difference or variance between the findings
of the DAR and the LBP as to the propriety of covering the land under CARP, whether in whole or in part, on the issue of suitability to
agriculture, degree of development or slope, and on issues affecting idle lands, the conflict shall be resolved by a composite team of
DAR, LBP, DENR and DA which shall jointly conduct further investigation thereon. The team shall submit its report of findings which
shall be binding to both DAR and LBP, pursuant to Joint Memorandum Circular of the DAR, LBP, DENR and DA dated 27 January
1992.
8 DARMO Screen prospective ARBs BARC and causes the signing of CARP the Application of Purchase Form No. 5 and Farmer's
Undertaking (APFU).
9 DARMO Furnishes a copy of the CARP duly accomplished FIR to Form No. 4 the landowner by personal delivery with proof of
service or registered mail will return card and posts a copy thereof for at least one week on the bulletin board of the municipal and
barangay halls where the property is located. LGU office concerned CARP notifies DAR about Form No. 17compliance with posting
requirement thru return endorsement on CARP
Form No. 17.
B. Land Survey
10 DARMO Conducts perimeter or Perimeter And/or segregation survey or DENR delineating areas covered Segregation Local Office
by OLT, "uncarpable Survey Plan areas such as 18% slope and above, unproductive/ unsuitable to agriculture, retention,
infrastructure.
In case of segregation or subdivision survey, the plan shall be approved by DENR-LMS.
C. Review and Completion of Documents
11. DARMO Forward VOCF/CACF CARP to DARPO. Form No. 6
xxx xxx xxx.
DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of government agencies involved in the identification and
delineation of the land subject to acquisition.
56
This time, the Notice of Coverage is sent to the landowner before the conduct of the field investigation and
the sending must comply with specific requirements. Representatives of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the
landowner by "personal delivery with proof of service, or by registered mail with return card," informing him that his property is under CARP coverage and
that if he desires to avail of his right of retention, he may choose which area he shall retain. The Notice of Coverage shall also invite the landowner to
attend the field investigation to be scheduled at least two weeks from notice. The field investigation is for the purpose of identifying the landholdi ng and
determining its suitability for agriculture and its productivity. A copy of the Notice of Coverage shall be posted for at least one week on the bulletin board of
the municipal and barangay halls where the property is located. The date of the field investigation shall also be sent by the DAR Municipal Office to
representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field investigation shall be conducted on the date set with the
participation of the landowner and the various representatives. If the landowner and other representatives are absent, the fi eld investigation shall proceed,
provided they were duly notified thereof. Should there be a variance between the findings of the DAR and the LBP as to whether the land be placed under
agrarian reform, the land's suitability to agriculture, the degree or development of the slope, etc., the conflict shall be resolved by a composite team of the
DAR, LBP, DENR and DA which shall jointly conduct further investigation. The team's findings shall be binding on both DAR and LBP. After the field
investigation, the DAR Municipal Office shall prepare the Field Investigation Report and Land Use Map, a copy of which shall be furnished the landowner
"by personal delivery with proof of service or registered mail with return card." Another copy of the Report and Map shall li kewise be posted for at least one
week in the municipal or barangay halls where the property is located.
Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition set forth in Section 16 of the law. They also include the
Notice of Coverage first laid down in DAR A.O. No. 12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1,
Series of 1993. This Notice of Coverage does not merely notify the landowner that his property shall be placed under CARP and that he is entitled to
exercise his retention right; it also notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that a public hearing, shall be conducted where he and
representatives of the concerned sectors of society may attend to discuss the results of the field investigation, the land valuation and other pertinent
matters. Under DAR A.O. No. 1, Series of 1993, the Notice of Coverage also informs the landowner that a field investigation of his landholding shall be
conducted where he and the other representatives may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of invitation entitled "Invitation to Parties" dated
September 29, 1989 to petitioner corporation, through Jaime Pimentel, the administrator of Hacienda Palico.
57
The invitation was received on the same
day it was sent as indicated by a signature and the date received at the bottom left corner of said invitation. With regard t o Hacienda Banilad, respondent
DAR claims that Jaime Pimentel, administrator also of Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel actually attended
the conference on September 21, 1989 and signed the Minutes of the meeting on behalf of petitioner corporation.
58
The Minutes was also signed by the
representatives of the BARC, the LBP and farmer beneficiaries.
59
No letter of invitation was sent or conference meeting held with respect to Hacienda
Caylaway because it was subject to a Voluntary Offer to Sell to respondent DAR.
60

When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various parties the Notice of Coverage and invitation to the
conference, DAR A.O. No. 12, Series of 1989 was already in effect more than a month earlier. The Operating Procedure in DAR Administrative Order No.
12 does not specify how notices or letters of invitation shall be sent to the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries
and other interested parties. The procedure in the sending of these notices is important to comply with the requisites of due process especially when the
owner, as in this case, is a juridical entity. Petitioner is a domestic
corporation,
61
and therefore, has a personality separate and distinct from its shareholders, officers and employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by "personal delivery or registered mail." Whether the
landowner be a natural or juridical person to whose address the Notice may be sent by personal delivery or registered mail, the law does not distinguish.
The DAR Administrative Orders also do not distinguish. In the proceedings before the DAR, the distinction between natural and juridical persons in the
sending of notices may be found in the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of pleadings before the DARAB is
governed by Section 6, Rule V of the DARAB Revised Rules of Procedure. Notices and pleadings are served on private domestic corporations or
partnerships in the following manner:
Sec. 6. Service upon Private Domestic Corporation or Partnership. If the defendant is a corporation organized under the laws of the
Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its
directors or partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
Sec. 13. Service upon private domestic corporation or partnership. If the defendant is a corporation organized under the laws of the
Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its
directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the DARAB and the regular courts are served on the president,
manager, secretary, cashier, agent or any of its directors. These persons are those through whom the private domestic corporation or partnership is
capable of action.
62

Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner corporation. Is he, as administrator of the two
Haciendas, considered an agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain that the corporation will receive prompt and proper notice in
an action against it.
63
Service must be made on a representative so integrated with the corporation as to make it a priori supposable that he will realize his
responsibilities and know what he should do with any legal papers served on him,
64
and bring home to the corporation notice of the filing of the
action.
65
Petitioner's evidence does not show the official duties of Jaime Pimentel as administrator of petitioner's haciendas. The evidence does not indicate
whether Pimentel's duties is so integrated with the corporation that he would immediately realize his responsibilities and know what he should do with any
legal papers served on him. At the time the notices were sent and the preliminary conference conducted, petitioner's principal place of business was listed
in respondent DAR's records as "Soriano Bldg., Plaza Cervantes, Manila,"
66
and "7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro
Manila."
67
Pimentel did not hold office at the principal place of business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in
Cacho-Gonzales Bldg., Makati, Metro Manila. He performed his official functions and actually resided in the haciendas in Nasugbu, Batangas, a place over
two hundred kilometers away from Metro Manila.
Curiously, respondent DAR had information of the address of petitioner's principal place of business. The Notices of Acquisition over Haciendas Palico and
Banilad were addressed to petitioner at its offices in Manila and Makati. These Notices were sent barely three to four months after Pimentel was notified of
the preliminary conference.
68
Why respondent DAR chose to notify Pimentel instead of the officers of the corporation was not explained by the said
respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and letters of invitation were validly served on petitioner
through him, there is no showing that Pimentel himself was duly authorized to attend the conference meeting with the MARO, BARC and LBP
representatives and farmer beneficiaries for purposes of compulsory acquisition of petitioner's landholdings. Even respondent DAR's evidence does not
indicate this authority. On the contrary, petitioner claims that it had no knowledge of the letter-invitation, hence, could not have given Pimentel the authority
to bind it to whatever matters were discussed or agreed upon by the parties at the preliminary conference or public hearing. Notably, one year after
Pimentel was informed of the preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and this required that the Not ice of Coverage must be
sent "to the landowner concerned or his duly authorized representative."
69

Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas found actually subject to CARP were not properly
identified before they were taken over by respondent DAR. Respondents insist that the lands were identified because they are all registered property and
the technical description in their respective titles specifies their metes and bounds. Respondents admit at the same time, however, that not all areas in the
haciendas were placed under the comprehensive agrarian reform program invariably by reason of elevation or character or use of the land.
70

The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only portions thereof. Hacienda Palico has an area of 1,024
hectares and only 688.7576 hectares were targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688 hectares were
subject to CARP. The haciendas are not entirely agricultural lands. In fact, the various tax declarations over the haciendas describe the landholdings as
"sugarland," and "forest, sugarland, pasture land, horticulture and woodland."
71

Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the land subject to land reform be first identified. The two
haciendas in the instant case cover vast tracts of land. Before Notices of Acquisition were sent to petitioner, however, the exact areas of the landholdings
were not properly segregated and delineated. Upon receipt of this notice, therefore, petitioner corporation had no idea which portions of its estate were
subject to compulsory acquisition, which portions it could rightfully retain, whether these retained portions were compact or contiguous, and which portions
were excluded from CARP coverage. Even respondent DAR's evidence does not show that petitioner, through its duly authorized representative, was
notified of any ocular inspection and investigation that was to be conducted by respondent DAR. Neither is there proof that petitioner was given the
opportunity to at least choose and identify its retention area in those portions to be acquired compulsorily. The right of retention and how this right is
exercised, is guaranteed in Section 6 of the CARL, viz:
Sec. 6. Retention Limits. . . . .
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner; Provided, however,
That in case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain
therein or be a beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to
remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act. In case the
tenant chooses to be a beneficiary in another agricultural land, he loses his right as a leaseholder to the land retained by the
landowner. The tenant must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the
area for retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his agricultural land subject to CARP. The right to choose the
area to be retained, which shall be compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted, the tenant shall have the
option to choose whether to remain on the portion or be a beneficiary in the same or another agricultural land with similar or comparable features.
C. The Voluntary Acquisition of Hacienda Caylaway
Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a Voluntary Offer to Sell (VOS). The VOS in the instant
case was made on May 6, 1988,
72
before the effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR Administrative
Order No. 19, series of 1989,
73
and under this order, all VOS filed before June 15, 1988 shall be heard and processed in accordance with the procedure
provided for in Executive Order No. 229, thus:
III. All VOS transactions which are now pending before the DAR and for which no payment has been made shall be subject to the
notice and hearing requirements provided in Administrative Order No. 12, Series of 1989, dated 26 July 1989, Section II, Subsection A,
paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and processed in accordance with the procedure
provided for in Executive Order No. 229.
xxx xxx xxx.
Sec. 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. The government shall purchase all agricultural lands it deems productive and suitable to farmer
cultivation voluntarily offered for sale to it at a valuation determined in accordance with Section 6. Such transaction shall be exempt
from the payment of capital gains tax and other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of private land as set forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O.
229 merely reiterates the procedure of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for the identification of the
land, the notice of coverage and the preliminary conference with the landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this
mean that these requirements may be dispensed with regard to VOS filed before June 15, 1988? The answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and beneficiaries of the land subject to agrarian reform
be identified before the notice of acquisition should be issued.
74
Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a total
area of 867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both dated January 12, 1989, respondent DAR, through the
Regional Director, formally accepted the VOS over the two of these four
titles.
75
The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares thereof fell within the coverage of R.A.
6657.
76
Petitioner claims it does not know where these portions are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were conducted in 1989, and that petitioner, as landowner,
was not denied participation therein, The results of the survey and the land valuation summary report, however, do not indicate whether notices to attend
the same were actually sent to and received by petitioner or its duly authorized representative.
77
To reiterate, Executive Order No. 229 does not lay down
the operating procedure, much less the notice requirements, before the VOS is accepted by respondent DAR. Notice to the landowner, however, cannot be
dispensed with. It is part of administrative due process and is an essential requisite to enable the landowner himself to exercise, at the very least, his right
of retention guaranteed under the CARL.
III. The Conversion of the three Haciendas.
It is petitioner's claim that the three haciendas are not subject to agrarian reform because they have been declared for tourism, not agricultural
purposes.
78
In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of Nasugbu, Batangas a tourist zone. Lands in
Nasugbu, including the subject haciendas, were allegedly reclassified as non-agricultural 13 years before the effectivity of R. A. No. 6657.
79
In 1993, the
Regional Director for Region IV of the Department of Agriculture certified that the haciendas are not feasible and sound for agricultural development.
80
On
March 20, 1992, pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain areas
of Nasugbu as non-agricultural.
81
This Resolution approved Municipal Ordinance No. 19, Series of 1992, the Revised Zoning Ordinance of
Nasugbu
82
which zoning ordinance was based on a Land Use Plan for Planning Areas for New Development allegedly prepared by the University of the
Philippines.
83
Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang Panlalawigan of Batangas on March 8, 1993.
84

Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when it approved conversion of 1,827 hectares in Nasugbu into
a tourist area known as the Batulao Resort Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt.
85
Petitioner present
evidence before us that these areas are adjacent to the haciendas subject of this petition, hence, the haciendas should likewise be converted. Petitioner
urges this Court to take cognizance of the conversion proceedings and rule accordingly.
6

We do not agree. Respondent DAR's failure to observe due process in the acquisition of petitioner's landholdings does not ipso facto give this Court the
power to adjudicate over petitioner's application for conversion of its haciendas from agricultural to non-agricultural. The agency charged with the mandate
of approving or disapproving applications for conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the processing and approval of applications for land use
conversion was the DAR A.O. No. 2, Series of 1990. Under this A.O., the application for conversion is filed with the MARO where the property is located.
The MARO reviews the application and its supporting documents and conducts field investigation and ocular inspection of the property. The findings of the
MARO are subject to review and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further field investigation and
submit a supplemental report together with his recommendation to the Regional Agrarian Reform Officer (RARO) who shall review the same. For lands
less than five hectares, the RARO shall approve or disapprove applications for conversion. For lands exceeding five hectares, the RARO shall evaluate the
PARO Report and forward the records and his report to the Undersecretary for Legal Affairs. Applications over areas exceeding fifty hectares are approved
or disapproved by the Secretary of Agrarian Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l) of Executive Order No. 129-A, Series of 1987 and
reiterated in the CARL and Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction over applications for
conversion is provided as follows:
A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove applications for conversion,
restructuring or readjustment of agricultural lands into non-agricultural uses," pursuant to Section 4 (j) of Executive
Order No. 129-A, Series of 1987.
B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove
applications for conversion of agricultural lands for residential, commercial, industrial and other land uses.
C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, likewise
empowers the DAR to authorize under certain conditions, the conversion of agricultural lands.
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides that "action on
applications for land use conversion on individual landholdings shall remain as the responsibility of the DAR,
which shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying
ordinances passed upon and approved by the local government units concerned, together with the National Land
Use Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A.
87

Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled "Revised Rules and Regulations Governing Conversion of
Private Agricultural Lands and Non-Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the Processing and
Approval of Applications for Land Use Conversion." These A.O.'s and other implementing guidelines, including Presidential issuances and national policies
related to land use conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance, the gui ding principle in land use
conversion is:
to preserve prime agricultural lands for food production while, at the same time, recognizing the need of the other sectors of society
(housing, industry and commerce) for land, when coinciding with the objectives of the Comprehensive Agrarian Reform Law to
promote social justice, industrialization and the optimum use of land as a national resource for public welfare.
88

"Land Use" refers to the manner of utilization of land, including its allocation, development and management. "Land Use Conversion" refers to the act or
process of changing the current use of a piece of agricultural land into some other use as approved by the DAR.
89
The conversion of agricultural land to
uses other than agricultural requires field investigation and conferences with the occupants of the land. They involve factual findings and highly technical
matters within the special training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how t he DAR must go about its
task. This time, the field investigation is not conducted by the MARO but by a special task force, known as the Center for Land Use Policy Planning and
Implementation (CLUPPI-DAR Central Office). The procedure is that once an application for conversion is filed, the CLUPPI prepares the Notice of
Posting. The MARO only posts the notice and thereafter issues a certificate to the fact of posting. The CLUPPI conducts the field investigation and
dialogues with the applicants and the farmer beneficiaries to ascertain the information necessary for the processing of the application. The Chairman of the
CLUPPI deliberates on the merits of the investigation report and recommends the appropriate action. This recommendation is transmitted to the Regional
Director, thru the Undersecretary, or Secretary of Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved by the
Secretary. The procedure does not end with the Secretary, however. The Order provides that the decision of the Secretary may be appealed to the Office
of the President or the Court of Appeals, as the case may be, viz:
Appeal from the decision of the Undersecretary shall be made to the Secretary, and from the Secretary to the Office of the President or
the Court of Appeals as the case may be. The mode of appeal/motion for reconsideration, and the appeal fee, from Undersecretary to
the Office of the Secretary shall be the same as that of the Regional Director to the Office of the Secretary.
90

Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a controversy the jurisdiction over which is
initially lodged with an administrative body of special competence.
91
Respondent DAR is in a better position to resolve petitioner's application for
conversion, being primarily the agency possessing the necessary expertise on the matter. The power to determine whether Haciendas Palico, Banilad and
Caylaway are non-agricultural, hence, exempt from the coverage of the CARL lies with the DAR, not with this Court.
Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court
the power to nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is to short-circuit the administrative process, which has yet
to run its regular course. Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico
alone, CLOA's were issued to 177 farmer beneficiaries in 1993.
92
Since then until the present, these farmers have been cultivating their lands.
93
It goes
against the basic precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the land they till. Anyhow, the farmer
beneficiaries hold the property in trust for the rightful owner of the land.
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the three haciendas are nullified for respondent DAR's failure to
observe due process therein. In accordance with the guidelines set forth in this decision and the applicable administrative procedure, the case is hereby
remanded to respondent DAR for proper acquisition proceedings and determination of petitioner's application for conversion.
SO ORDERED.
---------------------------
G.R. No. 78214 December 5, 1988
YOLANDA CABALLES, petitioner,
vs.
DEPARTMENT OF AGRARIAN REFORM, HON. HEHERSON T. ALVAREZ and BIENVENIDO ABAJON,respondents.
Before us is a petition for certiorari seeking the annulment of an Order issued by the public respondent Ministry of Agrarian Reform , 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.
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 Lawaan Talisay, Cebu. The remainder of Lot No.
3109-C was subseconsequently sold to the said spouses by Macario Alicaba and the other members of the Millenes family, thus consol idating 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 fitfy-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 Lawaan 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.
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, 1 983, 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 thin case is filed patently to harass and/or eject the tenant from his farmholding, which act is prohibited by 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 Orders
dated November 15, 1986, setting aside the previous Order
3
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 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 truer 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, this 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 pendi ng 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 destruction;
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 snowed 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.
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.