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The contentions of the respondents Catabay et al constituted generally of denials of the allegations of the complainants against them. They averred that they have been religiously performing their duties as tenants on the lands in question and that they do not have unpaid balance of rentals. They claimed that there was no demand for payment made whatsoever. As to the allegation that they leased out portions of the landholding to other persons, the respondents said that these charges are clear inclinations of the complainants in arbitrarily ejecting them from the land the respondents were lawfully tilling. The respondents theory is that they are being rejected because the complainants are planning to sell the land to another person. Moreover, the respondents averred that the four houses they built were for the use of the immediate members of their families, which are considered as homelots that they are entitled to under the law. Respondents did not present any evidence to support their claim.

ISSUE 1: WON RESPONDENTS HAVE UNPAID RENTALS Complainants alleged that on January 1996, when complainants went to collect rentals, defendants failed and refused to remit leasehold rentals since 1995 despite demand Respondents alleged that they do not have unpaid balance of rentals and that there was no demand for payment made whatsoever. HELD: No. We affirm the PARADs decision that the respondents do not have unpaid rentals. Two laws are in point: Republic Act 3844 (Agricultural Land Reform Code) and Presidential Decree 816. Section 26 of RA 3844 provides for the obligations of the agricultural lessee. Among these is To pay the lease rental to the agricultural lessor when it falls due. Such is the obligation of the agricultural lessee that when the Court finds in a final judgment that he fails to pay the lease rental when it falls due, he may be dispossessed of the landholding as a consequence. Section 36 provides for the exceptions to the agricultural lessees possession of landholding, viz: Section 36. Possession of Landholding; Exceptions - x x x an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that: xxx (6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; xxx

The succeeding section provides that to secure such final judgment of non-payment of lease rentals as a cause to eject an agricultural lessee, the agricultural lessor has the burden of proving that there was in fact non-payment. Section 37. Burden of Proof - The burden of proof to show the existence of a lawful cause for the ejectment of an agricultural lessee shall rest upon the agricultural lessor. However, as applied in this case, the complainants were unable to prove that respondents failed to pay lease rentals. Their claim that rentals were unpaid is a mere bare allegation. No other evidence was presented other than such bare statement. In effect, complainants failed to sufficiently show a lawful cause for the ejectment of the respondents, as required by Section 37 of RA 3844. Likewise applicable to the instant case is PD 816, providing that tenant-farmers/agricultural lessees shall pay the leasehold rentals when they fall due and providing penalties therefor. A perusal of the provisions show that the refusal to pay must be characterized as continuing and deliberate, and that the failure to pay must be for a period of two years. As stated under PD 816: Section 1. That the continuing and deliberate refusal of the agricultural lessees to pay their leasehold rentals to the landowners/agricultural lessors cannot be countenanced and shall not remain unchecked or unpunished; (emphasis supplied) xxx Section 3. That any agricultural lessee whose landholding is not yet covered by a Certificate of Land Transfer and who shall continue not to pay his lease rentals or amortization payments when they fall due for a period of two (2) years to the landowner/agricultural lessor shall, upon proper hearing and judgment, lose his right to be issued a Certificate of Land Transfer under Presidential Decree No. 27 and his farmholding; (emphasis supplied) In the case at bar, the two elements are missing. The unpaid rental alleged by complainants was only for 1995. Neither did complainants prove that the failure to pay rentals was continuing and deliberate. The burden of proof stated under RA 3844 applies. However, the complainants having failed to prove the non-payment of rentals, necessarily were much less able to prove further these two elements.