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CASES: ON TENANCY RELATIONS

REQUISITES

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 JAMIEDINGLASAN, respondents.

PARDO, J.:

This is a petition1assailing the decision of the Court of Appeals2reversing the decision of the Regional Trial Court, Calapan, OrientalMindoro3and ordering petitioners Reynaldo and Erlinda Bejasa (hereinafter referred to as "the Bejasas") to surrender thepossession of the disputed landholdings to respondent Isabel Candelaria ("hereinafter referred to as Candelaria") and to pay herannual rental from 1986, attorney's 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 Thefactual 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-581917and TCT No. T-59172,8measuring 16 hectares and 6hectares more or less, situated in Barangay Del Pilar, Naujan, Oriental Mindoro. The parcels of land are indisputably owned byIsabel Candelaria.

On October 20, 1974, Candelaria entered into a three-year lease agreement over the land with Pio Malabanan (hereinafter referredto as "Malabanan"). In the contract, Malabanan agreed among other things: "to clear, clean and cultivate the land, to purchase orprocure calamansi, citrus and rambutan seeds or seedlings, to attend and care for whatever plants are thereon existing, to make thenecessary 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 plantedcitrus, 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, Jaime's wife (hereinafterreferred 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 nabunga"13agreement, 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 ngDisyembre 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

1
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"(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 fullypaid. Only the amount of P4,000.00 was paid on January 11, 1985.15

After the aryenduhan expired, despite Victoria's demand to vacate the land, the Bejasas continued to stay on the land and did notgive 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 specialpower 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, Mindoro19 against the Bejasas for"Recovery of possession with preliminary mandatory injunction and damages." The case was referred to the Department of AgrarianReform ("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 Jaime's 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 ofleasehold and home lot with recovery of damages."21against 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 wasestablished.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."25Second, as bona-fide tenant-tillers, theBejasas 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 andto respect plaintiff's security of tenure on the landholdings of Isabel Candelaria and the home lot presently occupied bythem;

"(2) Confirming the leasehold tenancy system between the plaintiffs as the lawful tenant-tillers and the landholder, IsabelCandelaria, 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 ofcalamansi which were unlawfully gathered by Jaime Dinglasan and his men for the period July to December, 1987 andwhich were supported by receipts and duly proven, with formal written accounting, plus the sum of P346,500.00representing the would-be harvests on citrus, calamansi, rambutan and bananas for the years 1988, 1989 and 1990, withlegal 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 attorney's fee andexpenses 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 inaccordance with Section 16 of P. D. No. 946.

"SO ORDERED."

On February 20, 1991, respondents filed their notice of appeal.28

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On February 9, 1993, the Court of Appeals promulgated a decision reversing the trial court's ruling.29Reasoning:First, not allrequisites necessary for a leasehold tenancy relationship were met.30There was no consent given by the landowner. The consent offormer civil law lessee, Malabanan, was not enough to create a tenancy relationship.31 Second, when Malabanan engaged theservices of the Bejasas, he only constituted them as mere overseers and did not make them "permanent tenants". Verily, evenMalabanan knew that his contract with Candelaria prohibited sublease.32Third, the contract ("aryenduhan") between the Bejasasand 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. Theinterlocutory order issued on September 5, 1988 is DISSOLVED and the appellees are hereby ordered to surrenderpossession of the disputed landholdings to appellant Isabel Candelaria and pay her the amount of P15,000.00 in annualrents commencing from 1986 plus attorney's 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 Candelaria's 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 relationexisted.

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 landowner's share (1/5 of theharvest) to Malabanan.38 Only Reynaldo Bejasa's word was presented to prove this. Even this is cast into suspicion. At one timeReynaldo 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 landowner's 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 otherevidence was presented."42We 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 thatshe did not know of Malabanan's arrangement with them.45True enough Candelaria disavowed any knowledge that the Bejasasduring Malabanan's lease possessed the land.46However, the Bejasas claim that this defect was cured when Candelaria agreed tolease the land to the Bejasas for P20,000.00 per annum, when Malabanan died in 1983.47We do not agree. In a tenancyagreement, consideration should be in the form of harvest sharing. Even assumingthat Candelaria agreed to lease it out to theBejasas for P20,000 per year,48such agreement did not create a tenancy relationship, but a mere civil law lease.

3
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Dinglasan and the Bejasas. Even assumingthat the Dinglasans had the authority as civil law lessees of the land to bind it in atenancy 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",49which states in nouncertain 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. 169691, July 23, 2008]

PEDRITO SALMORIN, PETITIONER, VS. DR. PEDRO ZALDIVAR, RESPONDENT.

R E S O L U T I O N

CORONA, J.:

In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pedrito Salmorin assails the January 31, 2005decision[1] and September 8, 2005 resolution[2] of the Court of Appeals (CA).

On July 15, 1989, respondent Dr. Pedro Zaldivar, as legal possessor[3] of Lot No. 7481-H[4] situated in Mapatag, Hamtic, Antique,entered into an agreement (Kasugtanan)[5] with Salmorin designating him as administrator of the lot with a monthly salary of P150.Salmorin allegedly did not comply with the terms of theKasugtanan when he failed to till the vacant areas.[6] This compelled Zaldivarto terminate his services and eject him from the lot. When Salmorin refused to vacate the property, Zaldivar filed a complaint forunlawful detainer against him in the Municipal Circuit Trial Court (MCTC) of Tobias Fornier-Anini-y-Hamtic. The complaint wasdocketed as Civil Case No. 229-H.

In his answer, Salmorin alleged the existence of a tenancy relationship between him and Zaldivar. Thus, he claimed that the casewas an agrarian matter over which the MCTC had no jurisdiction.

After an examination of the position papers submitted by the parties, the MCTC found that the case was in the nature of an agrariandispute and dismissed the case for lack of jurisdiction.

Zaldivar appealed to the Regional Trial Court (RTC) of San Jose, Antique which ruled in his favor. The RTC found that the consentof the landowner and sharing of the harvest, which were requisites for the existence of a tenancy relationship,[7] did not exist. Thus, itruled that the MCTC had jurisdiction over the case and ordered the reinstatement of Civil Case No. 229-H.

Salmorin appealed the RTC decision to the CA but the latter upheld the decision of the RTC. He now seeks a reversal of the RTCand CA decisions.

Salmorin argues that the regular court had no jurisdiction over the case and Zaldivar had no right to possess the subject property.

We disagree.

On one hand, the Department of Agrarian Reform Adjudication Board has primary and exclusive jurisdiction over agrarian relatedcases, i.e., rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation and use of allagricultural lands covered by the Comprehensive Agrarian Reform Law and other related agrarian laws, or those cases involving theejectment and dispossession of tenants and/or leaseholders.[8] On the other, Section 33 (2) of Batas Pambansa Blg. 129, asamended by Republic Act 7691, provides that exclusive original jurisdiction over cases of forcible entry and unlawful detainer islodged with the metropolitan trial courts, municipal trial courts and MCTCs.

It is well-settled that the jurisdiction of a court over the subject matter of the action is determined by the material allegations of thecomplaint and the law, irrespective of whether the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.[9]

In his complaint, Zaldivar alleged the following:(1) he possessed the subject lot;

(2) he instituted Salmorin as administrator thereof;

(3) Salmorin failed to administer the subject lot by not having the vacant areas thereof planted;

(4) for Salmorin's failure to administer the subject lot, Salmorin's service as administrator was terminated;

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(5) he adviced Salmorin through registered mail to leave or vacate the subject lot and

(6) Salmorin refused to vacate the subject lot without justification.Thus, Zaldivar's complaint concerned the unlawful detainer by Salmorin of the subject lot. This matter is properly within the

jurisdiction of the regular courts. The allegation of tenancy in Salmorin's answer did not automatically deprive the MCTC of itsjurisdiction. In Hilado et al. v. Chavez et al.,[10]we ruled:[T]hat the jurisdiction of the court over the nature of the action and the subject matter thereof cannot be made to depend

upon the defenses set up in the court or upon a motion to dismiss. Otherwise, the question of jurisdiction would depend almostentirely on the defendant. xxx The [MTCC] does not lose its jurisdiction over an ejectment case by the simple expedient of a partyraising as defense therein the alleged existence of a tenancy relationship between the parties. But it is the duty of the court toreceive evidence to determine the allegations of tenancy. If after hearing, tenancy had in fact been shown to be the real issue, thecourt should dismiss the case for lack of jurisdiction. (emphasis supplied; citations omitted)Contrary to the findings of the MCTC, both the RTC and the CA found that there was no tenancy relationship between Salmorin andZaldivar. A tenancy relationship cannot be presumed.[11] In Saul v. Suarez,[12]we held:There must be evidence to prove the tenancy relations such that all its indispensable elements must be established, to wit: (1) theparties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purposeis agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvests. All these requisites are necessaryto create tenancy relationship, and the absence of one or more requisites will not make the alleged tenant a de facto tenant.All these elements must concur. It is not enough that they are alleged. To divest the MCTC of jurisdiction, these elements must allbe shown to be present.[13]

Tenancy is a legal relationship established by the existence of particular facts as required by law. In this case, the RTC and CAcorrectly found that the third and sixth elements, namely, consent of the landowner and sharing of the harvests, respectively, wereabsent. We find no compelling reason to disturb the factual findings of the RTC and the CA.

The fact alone of working on another's landholding does not raise a presumption of the existence of agricultural tenancy.[14] Theremust be substantial evidence on record adequate to prove the element of sharing. Moreover, in Rivera v. Santiago,[15]we stressed:[T]hat it is not unusual for a landowner to receive the produce of the land from a caretaker who sows thereon. The fact of receipt,without an agreed system of sharing, does not ipso facto create a tenancy.Salmorin's attempt to persuade us by way of a certification coming from the Barangay Agrarian Reform Committee attesting that hewas a bona fide tenant of Zaldivar deserves scant consideration. Certifications issued by municipal agrarian reform officers are notbinding on the courts. This rule was articulated in Bautista v. Mag-isa vda. de Villena: [16]

In a given locality, merely preliminary or provisional are the certifications or findings of the secretary of agrarian reform (or of anauthorized representative) concerning the presence or the absence of a tenancy relationship between the contending parties;hence, such certifications do not bind the judiciary.We note that agricultural share tenancy was declared contrary to public policy and, thus, abolished by the passage of RA 3844, asamended. Share tenancy exists:[W]henever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the otherhis labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land personally withthe aid of labor available from members of his immediate farm household, and the produce thereof to be divided between thelandholder and the tenant.[17]

In alleging that he is a tenant of Zaldivar, Salmorin (in his affidavit dated April 26, 2000)[18] relates that their arrangement was for himto do all the cultivation and that the expenses therefore will be deducted from the harvest. The rest of the harvest will be dividedequally between himself and Zaldivar. If Salmorin's version was to be believed, their arrangement was clearly one of agriculturalshare tenancy. For being contrary to law, Salmorin's assertion should not be given merit.

Since the MCTC has jurisdiction over Civil Case No. 229-H, we will refrain from discussing the right of Zaldivar to possess Lot No.7481-H as it is more correctly the subject of the appropriate action in the trial court.

WHEREFORE, the petition is hereby DENIED. The January 31, 2005 and September 8, 2005 resolution of the Court of Appealsare AFFIRMED. Civil Case No. 229-H is hereby REINSTATED. The case is REMANDED to the Municipal Circuit Trial Court ofTobias Fornier-Anini-y-Hamtic which is directed to proceed with and finish the case as expeditiously as possible.

Costs against petitioner.

SO ORDERED.

SAUL VS SUAREZDECISION

YNARES-SANTIAGO, J.:

This petition assails the August 31, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 71516 affirming in full theDecember 14, 2000 DARAB Decision in DARAB Case No. 5468; as well as its January 6, 2005 Resolution denying petitionersmotion for reconsideration.

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Petitioner Domingo C. Suarez owns a 23-hectare agricultural land in Sitio Spring, Poblacion Tboli, South Cotabato registeredunder OCT No. (P-31540) P-11967.[1] On August 8, 1995, a complaint for reinstatement with preliminary mandatory injunction,recovery of possession and damages[2] was filed against him and Tboli Agro-Industrial Development, Inc. (TADI) before the Officeof the Provincial Adjudicator, Department of Agrarian Reform Adjudicatory Board (DARAB), by respondents Leo B. Saul, Roger S.Brillo, Efrain S. Brillo, Eleno S. Brillo and Ignacio G. Pelaez.

Respondents alleged that they were agricultural tenants in petitioners land on a 25-75 sharing agreement; that after twocroppings, petitioner voluntarily offered the land for sale to the government under a Voluntary Offer to Sell (VOS) dated February 20,

1993;[3]

that they signed the documents for the transfer of the land under the Comprehensive Agrarian Reform Program (CARP) asfarmer-beneficiaries, and petitioner, as landowner; and that the sale was approved by the local Land Valuation Office of the LandBank of the Philippines (LBP).

Respondents claimed that while the VOS was being processed, they were summarily ejected from the property by TADI afterthe latter entered into a Grower Agreement with Contract to Buy[4] with petitioner thereby depriving them of their landholdings.

Petitioner filed an Answer contending that respondents were installed as tenants, not by him, but by Wennie [5] Gonzaga of theDepartment of Agrarian Reform (DAR) in Koronadal, South Cotabato. He admitted that he voluntarily offered his land for sale to thegovernment under the CARP but denied knowledge of the certification issued by the LBP. He denied the existence of a growerscontract between him and TADI over the subject land.[6]

For its part, TADI claimed that its growers contract with petitioner covered parcels of land different from those being claimed

by respondents.[7]

In due course, the Regional Adjudicator issued an Order[8]dated July 18, 1996 dismissing the complaint for lack of merit.

The adjudicator found that respondents failed to prove their alleged tenancy over petitioners land. While they were identified as

potential farmer-beneficiaries of the land subject of the VOS, they only have an inchoate right to the land since its coverage underthe CARP has yet to be completed.[9]

On appeal, the DARAB Central Office rendered a Decision[10]reversing the Regional Adjudicator. It observed that

petitioner admitted that respondents were his tenants. It further held that:... it is in fact immaterial whether the subject landholding is covered by the alleged growers contract or not.What is clear in the instant case is the fact that herein appellants were illegally ejected from their respectivetenanted lands. If indeed the subject land is not covered by the growers contract, if theres any, the act ofdefendant-appellee TADI in ejecting the tenants-appellants was beyond authority, hence, illegal. Assumingarguendo that the subject landholding is truly covered in the said contract, the contracting parties are requiredunder the law to respect the tenurial rights of the tenants therein.[11]

The DARAB thus disposed:

WHEREFORE, the appealed Order is hereby SET ASIDE and a NEW JUDGMENT is rendered:

1. Declaring the plaintiffs-appellants as bona fide tenants of the subject landholding;

2. Ordering the MARO and other concerned DAR Officers to determine the disturbance

compensation from the time of actual ejectment of herein plaintiffs-appellants until the time of actualreinstatement, after the last harvest of pineapple, to be awarded to herein plaintiffs-appellants; and

3. Ordering the reinstatement of herein plaintiff-appellants in their respective original landholdingsafter harvest.

SO ORDERED.[12]

Petitioner elevated the matter to the Court of Appeals which, on August 31, 2004, rendered a Decision affirming the DARAB.

[13] Upon denial of the motion for reconsideration,[14]petitioner filed the instant petition.

The issues for resolution are: (a) whether respondents are bona fide agricultural tenants under the law; and (b) whetherpetitioner illegally ejected respondents from their landholdings.

Petitioner contends that there is no basis in holding that respondents were his tenants. He denies having admitted thatthey were his tenants, and insists that there is no proof to prove the existence of tenancy relations. He asserts that he did not ejectrespondents from their landholdings by entering into a growers contract over the subject land with TADI.

Indeed, there is nothing in the records to suggest that respondents were petitioners bona fide tenants prior to theirdesignation by the DAR as potential farmer-beneficiaries under the CARP. There is no evidence to prove tenancy arrangementbetween petitioner and respondents before the formers voluntary offer to convey the land to the government.

In holding that respondents were bona fide tenants of petitioner, the DARAB and the appellate court relied solely on thealleged admission in petitioners answer to the complaint, to wit:

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3. Defendant admits the averments in paragraph IV of the complaint.[15]

The fourth paragraph of the complaint states:

4. That plaintiffs were instituted sometime in 1993 and were given three (3) hectares each

respectively, while for plaintiff Roger Brillo was given 2 hectares; the sharing of the parties involved was 25-75in favor of the tenants; after for two croppings defendant D. Suarez approached and offered the land byVoluntary Offer to Sale (VOS) last November 1993 in our favor (plaintiffs-tenants) and the papers for VOS was

processed in the office of Department [of] Agrarian Reform (DAR) Koronadal, South Cotabato;[16]

We find that the above admission was taken out of context. While petitioner admitted that respondents were tenants in

the land, he qualified in paragraph 2 of his answer that it was Wennie Gonzaga of the DAR who installed them as such. Clearly, itwas the DAR who placed respondents in actual possession of the land upon petitioners offer to transfer the same to thegovernment. Other than this supposed admission, there is no evidence on record to prove the tenancy relations. Respondents didnot substantiate their claim with evidence to show that they were agricultural tenants in petitioners land. They did not allege actualcultivation or specify the crop produced thereby. Neither did they mention how much of the produce was delivered to petitioner orsubmit receipts to prove the purported 25-75 sharing of harvests. They did not state, much less prove, the circumstances of theiragreement with petitioner as to the alleged tenancy relationship. Thus, there is no basis to the claim that they are agriculturaltenants on the property.

In VHJ Construction and Development Corporation v. Court of Appeals,[17] we held that a tenancy relationship cannot be

presumed. There must be evidence to prove the tenancy relations such that all its indispensable elements must be established, towit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4)the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvests. All these requisitesare necessary to create tenancy relationship, and the absence of one or more requisites will not make the alleged tenant a de

facto tenant.The DARABs reliance on the ruling in Tizon v. Cabagon, et al.[18]that the landowners admission of the fact of tenancy

relationship is conclusive is misplaced. InTizon, there was actual proof of tenancy relationship as the landowner thereincategorically admitted in the petition that respondents were her tenants. She also testified in open court that respondents weremanaging or in charge of the lands. Respondents therein proved actual cultivation and there was sharing of harvests.

On the contrary, there is no independent evidence in this case to prove any of the requisites of a tenancy relationship.The DARAB and the appellate court merely relied on petitioners alleged admission which we have disregarded.

Even assuming that a tenancy relationship exists between petitioner and respondents, we find that the latter has no cause

of action against petitioner. It should be noted that the complaint for ejectment was brought against petitioner based on the growerscontract he had executed with TADI.[19]Respondents alleged that petitioner deprived them of their landholdings by entering into agrowers contract, thereby allowing TADI to plant pineapples in respondents lands. However, an examination of the contractreveals that it pertains to other lands and not the land being claimed by respondents.

Petitioners application for VOS covers the land that respondents are claiming as their landholdings and measures13.9269 hectares, and is covered by OCT No. (P-31540) P-11967.[20] The tax declaration and sketch plan describe the lot asCadastral Lot No. 111-B, Pls-555, and bounded on the northeast by Lot Nos. 108 and 105; on the southeast by Lot No. 114; on thesouthwest by Lot Nos. 112 and 113; and on the northwest by Lot No. 111-A.[21]

On the other hand, the lands subject of the growers contract between petitioner and TADI are Lot No. 117, Pls-

555[22] covered by TCT No. T-26810, Lot No. 119-E, Psd-017487 [23]covered by TCT No. T-41460[24] and Lot No. 119-F, Psd-11-017487[25]covered by TCT No. T-41461.[26]

It is clear therefore that the subject matter of the growers contract did not include the land subject of the VOS. Thus,

petitioner could not have caused respondents ejectment from the subject property by virtue of his transactions with TADI, since henever authorized the latter to plant on the subject land. Respondents ejectment from the land was not pursuant to the contractpetitioner had entered into with TADI who appears to have entered the land without petitioners consent.

Thus, it was error for the appellate court to affirm DARABs conclusion that it is immaterial whether the subject landholding iscovered by the alleged growers contract or not. It is, in every sense, material to the determination of the case because petitioner issought to be held liable for respondents ejectment due allegedly to the contract. If the disputed land is not the subject of the

contract, as in fact it is not, then respondents cannot claim that petitioner illegally ejected them from the land. Consequently, theyhave no cause of action against petitioner, since the latter did not commit any act that resulted in their dispossession.

Respondents cause of action is against TADI as it is the latter who allegedly planted pineapples in the land occupied byrespondents, when it is clear that its contract with petitioner covered different lots. The DARAB itself observed that (i)f indeed thesubject land is not covered by the growers contract ..., the act of defendant-appellee TADI in ejecting the tenants-appellants wasbeyond authority, hence, illegal.[27] Respondents should have thus brought the action only against TADI who alone caused theirexpulsion from the land in question.

In this regard, respondents should have filed the instant case before the regular courts and not the DARAB considering thatthe only act complained of by respondents is TADIs alleged intrusion into the subject land. Thus, respondents cause of action isactually one for forcible entry. The allegation that they were deprived of their landholdings due to the growers contract will not

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automatically make the case an agrarian dispute that would call for the application of tenancy laws and the assumption ofjurisdiction by the DARAB.[28]

In order for a dispute to fall under the jurisdiction of the DARAB, the controversy must relate to tenurial arrangements,whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkersassociations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions ofsuch tenurial arrangements.[29] There must be a tenancy relationship between the party litigants for the DARAB to validly takecognizance of a controversy.[30]

In this case, there is no showing that there exists a tenancy relationship between petitioner and respondents. Likewise,respondents have no tenancy relationship with TADI, against whom they principally have a cause of action. The controversy is civilin nature since it involves the issue of material possession, independent of any question pertaining to agricultural tenancy. Hence,the case falls outside the jurisdiction of DARAB; it is cognizable by the regular courts.[31]

Though the parties do not challenge DARABs jurisdiction, the Court may motu proprio consider the issue of jurisdiction.

The Court has discretion to determine whetherDARAB validly acquired jurisdiction over the case since jurisdiction over the subjectmatter is conferred only by law.[32]Jurisdiction over the subject matter cannot be acquired through, or waived by, any act or omissionof the parties. Neither would the active participation of the parties norestoppeloperate to confer jurisdiction on the DARAB wherethe latter has none over a cause of action.[33]

WHEREFORE, the instant petition is GRANTED. The DARAB Decision dated December 14, 2000 in DARAB Case No.5468 and the Court of Appeals Decision dated August 31, 2004 in CA-G.R. SP No. 71516, as well as its Resolution dated January6, 2005, are ANNULLED and SET ASIDE. The complaint in DARAB Case No. XI-249-SC-95 is hereby DISMISSED.

SO ORDERED.

CASES: EMINENT DOMAIN: ACQUISITION AND JUST COMPENSATION

G.R. No. 118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner,vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT &DEVELOPMENT CORP., respondents.

G.R. No. 118745 October 6, 1995

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner,vs.COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT &DEVELOPMENT CORP., ET AL., respondents.

It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out to such anextent as deny justice to the landowner whenever truth and justice happen to be on his side. 1 As eloquently stated by JusticeIsagani Cruz:

. . . social justice or any justice for that matter is for the deserving, whether he be a millionaire in hismansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt thebalance in favor of the poor, to whom the Constitution fittingly extends its sympathy and compassion. But never

is it justified to prefer the poor simply because they are poor, or to reject the rich simply because they are rich,for justice must always be served, for poor and rich alike, according to the mandate of the law. 2

In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution.

Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745) and Land Bank ofthe Philippines (G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP No. 33465. However, uponmotion filed by private respondents, the petitions were ordered consolidated. 3

Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted private respondents'Petition forCertiorariand Mandamus and ruled as follows:

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WHEREFORE, premises considered, the Petition forCertiorariand Mandamus is hereby GRANTED:

a) DAR Administrative Order No. 9, Series of 1990 is declared nulland voidinsofar as itprovides for the opening of trust accounts in lieu of deposits in cash or bonds;

b) Respondent Landbank is ordered to immediatelydeposit not merely "earmark","reserve" or "deposit in trust" with an accessible bank designated by respondent DAR in

the names of the following petitioners the following amounts in cash and in governmentfinancial instruments within the parameters of Sec. 18 (1) of RA 6657:

P 1,455,207.31 Pedro L. Yap

P 135,482.12 Heirs of Emiliano Santiago

P 15,914,127.77 AMADCOR;

c) The DAR-designated bank is ordered to allow the petitioners to withdrawthe above-deposited amounts without prejudice to the final determination of just compensation by theproper authorities; and

d) Respondent DAR is ordered to 1) immediatelyconduct summaryadministrative

proceedings to determine the just compensation for the lands of the petitioners giving thepetitioners 15 days from notice within which to submit evidence and to 2) decide thecases within 30 days after they are submitted for decision. 4

Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5 denying their motion forreconsideration.

Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer schemes to qualifiedbeneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657).

Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of compensationfor their land pursuant to the provisions of RA 6657, private respondents filed with this Court a PetitionforCertiorariand Mandamus with prayer for preliminary mandatory injunction. Private respondents questioned the validityof DAR Administrative Order No. 6, Series of 1992 6 and DAR Administrative Order No. 9, Series of 1990, 7and sought tocompel the DAR to expedite the pending summary administrative proceedings to finally determine the just compensation

of their properties, and the Landbank to deposit in cash and bonds the amounts respectively "earmarked", "reserved" and"deposited in trust accounts" for private respondents, and to allow them to withdraw the same.

Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to respondent Court of Appealsfor proper determination and disposition.

As found by respondent court , the following are undisputed:

PetitionerPedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of petitionerYap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the names of farmerbeneficiaries collectively, based on the request of the DAR together with a certification of the Landbank that thesum of P735,337.77 and P719,869.54 have been earmarked for Landowner Pedro L. Yap for the parcels oflands covered by TCT Nos. 6282 and 6283, respectively, and issued in lieu thereof TC-563 and TC-562,respectively, in the names of listed beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap andwithout complying with the requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and

Landbank bonds in an accessible bank. (Rollo, p. 6).

The above allegations are not disputed by any of the respondents.

PetitionerHeirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of a parcel ofland located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT No. NT-60359 of theregistry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F. Santiago; that in November andDecember 1990, without notice to the petitioners, the Landbank required and the beneficiaries executed Actualtillers Deed of Undertaking (ANNEX "B") to pay rentals to the LandBank for the use of their farmlots equivalentto at least 25% of the net harvest; that on 24 October 1991 the DAR Regional Director issued an order directingthe Landbank to pay the landowner directly or through the establishment of a trust fund in the amount of

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P135,482.12, that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F.Santiago. (ANNEX "E"; Rollo,p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual Tiller's Deedof Undertaking committing themselves to pay rentals to the LandBank (Rollo, p. 133).

The above allegations are not disputed by the respondents except that respondent Landbank claims 1) that itwas respondent DAR, not Landbank which required the execution of Actual Tillers Deed of Undertaking (ATDU,for brevity); and 2) that respondent Landbank, although armed with the ATDU, did not collect any amount as

rental from the substituting beneficiaries (Rollo, p. 99).

Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges withrespect to its properties located in San Francisco, Quezon that the properties of AMADCOR in SanFrancisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an area of 209.9215 hectaresand another parcel covered by TCT No. 10832 with an area of 163.6189 hectares; that a summaryadministrative proceeding to determine compensation of the property covered by TCT No. 34314 wasconducted by the DARAB in Quezon City without notice to the landowner; that a decision was rendered on 24November 1992 (ANNEX "F") fixing the compensation for the parcel of land covered by TCT No. 34314 with anarea of 209.9215 hectares at P2,768,326.34 and ordering the Landbank to pay or establish a trust account forsaid amount in the name of AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in thedecision was established by adding P1,986,489.73 to the first trust account established on 19 December 1991(ANNEX "G"). With respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged that the property ofAMADCOR in Tabaco, Albay is covered by TCT No. T-2466 of the Register of Deeds of Albay with an area of1,629.4578 hectares'; that emancipation patents were issued covering an area of 701.8999 hectares whichwere registered on 15 February 1988 but no action was taken thereafter by the DAR to fix the compensation for

said land; that on 21 April 1993, a trust account in the name of AMADCOR was established in the amount ofP12,247,217.83', three notices of acquisition having been previously rejected by AMADCOR. (Rollo, pp. 8-9)

The above allegations are not disputed by the respondents except that respondent Landbank claims thatpetitioner failed to participate in the DARAB proceedings (land valuation case) despite due notice to it (Rollo, p.100). 8

Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave abuse ofdiscretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in cash or bonds in an accessiblebank designated by the DAR, the compensation for the land before it is taken and the titles are cancelled as provided under Section16(e) of RA 6657. 9 Private respondents also assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust"or "reserved" the compensation in their names as landowners despite the clear mandate that before taking possession of theproperty, the compensation must be deposited in cash or in bonds. 10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making power pursuant to Section

49 of RA 6657. 11 Moreover, the DAR maintained that the issuance of the "Certificate of Deposit" by the Landbank was a substantialcompliance with Section 16(e) of RA 6657 and the ruling in the case ofAssociation of Small Landowners in the Philippines, Inc., etal. vs. Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343). 12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with Circular Nos. 29,29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also used. 13

On October 20, 1994, the respondent court rendered the assailed decision in favor of private respondents. 14Petitioners filed amotion for reconsideration but respondent court denied the same. 15

Hence, the instant petitions.

On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the appeal has nomerit and is merely intended to delay the finality of the appealed decision. 16 The Court, however, denied the motion and instead

required the respondents to file their comments.

17

Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No. 9, Series of 1990,insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and (2) in holding that privaterespondents are entitled as a matter of right to the immediate and provisional release of the amounts deposited in trust pending thefinal resolution of the cases it has filed for just compensation.

Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657 referred merelyto the act of depositing and in no way excluded the opening of a trust account as a form of deposit. Thus, in opting for the openingof a trust account as the acceptable form of deposit through Administrative Circular No. 9, petitioner DAR did not commit any grave

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abuse of discretion since it merely exercised its power to promulgate rules and regulations in implementing the declared policies ofRA 6657.

The contention is untenable. Section 16(e) of RA 6657 provides as follows:

Sec. 16. Procedure for Acquisition of Private Lands

xxx xxx xxx

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response fromthe landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cashor in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shallrequest the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republicof the Philippines. . . . (emphasis supplied)

It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear nor can it beinferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid modes ofdeposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairlydeduced that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expandedconstruction of the term "deposit".

The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed or set

aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction or grave abuse of discretionclearly conflicting with either the letter or the spirit of a legislative enactment.18 In this regard, it must be stressed that the function ofpromulgating rules and regulations may be legitimately exercised only for the purpose of carrying the provisions of the law intoeffect. The power of administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is thatadministrative regulations cannot extendthe law and amend a legislative enactment, 19 for settled is the rule that administrative regulations must be in harmony with theprovisions of the law. And in case there is a discrepancy between the basic law and an implementing rule or regulation, it is theformer that prevails. 20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued AdministrativeCircular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for hisproperty because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash"or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementingregulations cannot outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking downAdministrative Circular No. 9 for being null and void.

Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts deposited in trust in theirbehalf pending the final resolution of the cases involving the final valuation of their properties, petitioners assert the negative.

The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of RA 6657 andpayment of final compensation as provided under Section 18 21 of the same law. According to petitioners, the right of the landownerto withdraw the amount deposited in his behalf pertains only to the final valuation as agreed upon by the landowner, the DAR andthe LBP or that adjudged by the court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) incase of rejection by the landowner because the latter amount is only provisional and intended merely to secure possession of theproperty pending final valuation. To further bolster the contention petitioners cite the following pronouncements in the case of"Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22

The last major challenge to CARP is that the landowner is divested of his property even before actual paymentto him in full of just compensation, in contravention of a well-accepted principle of eminent domain.

xxx xxx xxx

The CARP Law, for i ts part conditions the transfer of possession and ownership of the land to the governmenton receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation incash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outrightchange of ownership is contemplated either.

xxx xxx xxx

Hence the argument that the assailed measures violate due process by arbitrarily transferring title before theland is fully paid for must also be rejected.

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Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found that:

. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the SupremeCourt, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform (175SCRA 343), to conclude that "payments of the just compensation is not always required to be made fully inmoney" even as the Supreme Court admits in the same case "that the traditional medium for the payment of

just compensation is money and no other" the Supreme Court in said case did not abandon the "recognizedrule . . . that title to the property expropriated shall pass from the owner to the expropriator only upon full

payment of the just compensation."23 (Emphasis supplied)

We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the extraordinary natureof the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional mode of payment ofcompensation and recognized payment other than in cash. It did not, however, dispense with the settled rule that there must be fullpayment of just compensation before the title to the expropriated property is transferred.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and determination of justcompensation under Section 18 is unacceptable. To withhold the right of the landowners to appropriate the amounts alreadydeposited in their behalf as compensation for their properties simply because they rejected the DAR's valuation, andnotwithstanding that they have already been deprived of the possession and use of such properties, is an oppressive exercise ofeminent domain. The irresistible expropriation of private respondents' properties was painful enough for them. But petitioner DARrubbed it in all the more by withholding that which rightfully belongs to private respondents in exchange for the taking, under anauthority (the "Association" case) that is, however, misplaced. This is misery twice bestowed on private respondents, which theCourt must rectify.

Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final compensation underSection 18 for purposes of exercising the landowners' right to appropriate the same. The immediate effect in both situations is thesame, the landowner is deprived of the use and possession of his property for which he should be fairly and immediatelycompensated. Fittingly, we reiterate the cardinal rule that:

. . . within the context of the State's inherent power of eminent domain, just compensation means not only thecorrect determination of the amount to be paid to the owner of the land but also the payment of the land within areasonable time from its taking. Without prompt payment, compensation cannot be considered "just" for the

property owner is made to suffer the consequence of being immediately deprived of his land while being madeto wait for a decade or more before actually receiving the amount necessary to cope with his loss.24(Emphasissupplied)

The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of theComprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer. 25 But despite this, cases involving

its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still optimistic that the goal of totallyemancipating the farmers from their bondage will be attained in due time. It must be stressed, however, that in the pursuit of thisobjective, vigilance over the rights of the landowners is equally important because social justice cannot be invoked to trample on therights of property owners, who under our Constitution and laws are also entitled to protection. 26

WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the appealed decision isAFFIRMED in toto.

SO ORDERED.

SOLIMAN VS PASUDECODECISION

NACHURA, J.:

Before this Court is a Petition [1] for Review on Certiorariunder Rule 45 of the Rules of Civil Procedure seeking the reversal ofthe Court of Appeals (CA) Decision[2]dated April 12, 2005 which reversed the Decision[3]

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of the Department of Agrarian Reform Adjudication Board (DARAB) dated January 15, 2004 and reinstated the Decision [4] of theProvincial Agrarian Reform Adjudicator (PARAD) of San Fernando, Pampanga dated August 16, 1995.

The Facts

The respondents recount the antecedents, as follows:

The property subject of this case is situated at Cabalantian, Bacolor, Pampanga, with an area of ten (10) hectares, more orless, previously covered by Transfer Certificate of Title (TCT) No. 70829-R (subject property) and formerly owned by one DalmacioSicat (Dalmacio).

On December 2, 1969, Dalmacio offered to sell the subject property to respondent Pampanga Sugar Development Company(PASUDECO), a domestic corporation engaged in sugar milling, to be used as a housing complex for PASUDECO's laborers andemployees. The land was offered for sale at the price of P8.00 per square meter.[5]On January 26, 1970, Dalmacio reduced theprice to P5.00 per square meter.[6] In a meeting held on April 15, 1970, the Board of Directors of PASUDECO issued BoardResolution No. 057[7]authorizing the purchase of the subject property at P4.00 per square meter.

On May 22, 1970, Dalmacio and his tenants[8] jointly filed a Petition[9]with the then Court of Agrarian Relations (CAR), SanFernando, Pampanga, seeking approval of the voluntary surrender of the subject property with payment of disturbancecompensation. On the same date, the CAR rendered

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a Decision,[10] approving the voluntary surrender of the subject property by the tenants to Dalmacio, thus, terminating their tenancyrelationship effective May 21, 1970, the date when the parties entered into the agreement.

On May 22, 1970, a Deed[11] of Sale with Mortgage was executed between Dalmacio and PASUDECO. Thereafter, thedocuments needed for the conversion of the land to residential purposes were prepared, such as the subdivision layout withspecifications as to the size of each lot; topographic survey; monumenting of all corners of the subdivision lots; and approval of theplan including the technical description of the land. No trespassing signs were also installed around the premises. Thus, on May31, 1974, TCT Nos. 110325-R,[12]110326-R[13]and 110327-R[14] were registered in favor of PASUDECO. However, due to financial

setbacks suffered after the imposition of Martial Law in 1972, PASUDECO deferred the construction of the housing project.PASUDECO averred that no person was authorized to occupy and/or cultivate the subject property.

On the other hand, the petitioners have a totally different version.

Petitioners Joaquin Soliman, Lazaro Almario, Isidro Almario, Baldomero Almario, Demetrio Soliman, Romeo Abarin, ErnestoTapang and Crisostomo Abarin (petitioners) claimed that, sometime in November 1970, they started working on the subject propertywith a corresponding area of tillage, as certified to by the Barangay Agrarian Reform Committee (BARC) on December 6, 1989, towit: (1) Lazaro Almario with an area of 1.65 hectares;[15] (2) Demetrio Soliman with an area of 1.70 hectares;[16] (3) CrisostomoAbarin with an area of 1.10 hectares;[17](4) Baldomero Almario with an area of 1.5 hectares;[18] (5) Isidro Almario with an area of 1.5hectares;[19] (6) Romeo Abarin with an area of 0.400 hectare;[20] and (7) Ernesto Tapang with an area of .6500 hectare.[21]ACertification[22] dated December 28, 1989 was also issued by the Samahang Nayon in favor of petitioner Joaquin Soliman withrespect to the remaining area of 1.5 hectares. Likewise, on December 28, 1989, the Barangay Chairperson of Macabacle, Bacolor,Pampanga, certified that the eight (8) petitioners had been the actual tenant-tillers of the subject property from 1970 up to thepresent,[23]and that petitioner Baldomero Almario (Baldomero) was issued Certificate of Land Transfer (CLT) No. 0-043466[24]withan area of 3.2185 hectares on July 22, 1981.

The Ocular Inspection and the Investigation Report[25] issued by the Municipal Agrarian Reform Officer (MARO) on March 13,1990 showed that since 1970, petitioners cultivated the subject property, allegedly managed by the late respondent Gerry Rodriguez(Gerry), manager of PASUDECO from 1970-1991. Petitioners alleged that in 1970, Gerry made one Ciriaco Almario (Ciriaco) hisoverseer/caretaker, tasked to collect lease rentals from petitioners. In turn, Ciriaco remitted the rentals to Gerry. On May 14, 1990,Ciriaco certified that petitioners were the actual tenant-ti llers of the subject property.[26] Moreover,petitioners deposited their alleged rentals with the Land Bank of the Philippines (LBP) in San Fernando, Pampanga, as landamortizations, in varying amounts, from 1989

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to 1993, as shown by the official receipts issued by LBP .[27] Thus, petitioners averred that from 1970 up to 1990 or for a period ofalmost twenty (20) years, they had been in actual and peaceful possession and cultivation of the subject property.

The real controversy arose when PASUDECO decided to pursue the development of the property into a housing project for itsemployees in the latter part of April 1990. On May 14, 1990, petitioners filed a Complaint [28]for Maintenance of Peaceful Possessionwith a Prayer for the issuance of a Preliminary Injunction against Gerry before the PARAD to restrain him from harassing andmolesting petitioners in their respective landholdings. Petitioners alleged that Gerry, together with armed men, entered the property

and destroyed some of their crops. Traversing the complaint, Gerry raised as one of his defenses the fact that PASUDECO was theowner of the subject property. Thus, on November 26, 1990, petitioners filed their Amended Complaint [29]impleading PASUDECOas a party-defendant. Meanwhile, PASUDECO asserted that petitioners were not tenants but merely interlopers, usurpers and/orintruders into the subject property.

Trial on the merits ensued. In the process, the PARAD conducted an ocular inspection and found that the subject property wasplanted withpalaymeasuring one (1) foot high. There were also several dikes orpilapildividing the subject property. The PARADalso observed that there was a big sign installed therein, reading Future Site of PASUDECO Employees Housing Project.[30]

The PARAD's Ruling

On August 16, 1995, the PARAD dismissed petitioners' complaint and denied their application for the writ of preliminaryinjunction. The PARAD held that petitioners had not shown direct and convincing proof that they were tenants of the subjectproperty. Petitioners could not show any receipt proving payment of lease rentals either to PASUDECO or Gerry. In addition to the

absence of sharing, the PARAD ruled that there was no consent given by PASUDECO in order to create a tenancy relationship infavor of the petitioners.

Aggrieved, petitioners filed a Notice of Appeal with the DARAB on September 7, 1995 on the following grounds: (a) that thePARAD abused its discretion by ignoring or disregarding evidence which, if considered, would result in a decision favorable to thepetitioners; and (b) that there were errors in the findings of fact from which equally erroneous conclusions were drawn, which, if notcorrected on appeal, would cause grave and irreparable damage or injury to the petitioners.

While the case was pending resolution before the DARAB, the subject property was devastated by lahar due to the eruptionof Mount Pinatubo sometime in October 1995. As a result, the farming activities on the subject property ceased. Shortly thereafter,PASUDECO fenced the subject property and placed additional signs thereon, indicating that the same was private property.[31]Atpresent, the subject property is unoccupied and uncultivated.[32]

The DARAB's Ruling

On January 15, 2004, the DARAB rendered its Decision in favor of the petitioners, reversing the findings and conclusions ofthe PARAD. The DARAB held that, without the approval of the conversion application filed by PASUDECO, it could not besubstantiated that the subject property was indeed residential property intended for housing purposes. Because of this, and the factthat petitioners tilled the subject property for almost twenty (20) years, the same remained agricultural in character. Moreover, theDARAB held that, contrary to the findings of the PARAD, the elements of consent and sharing were present in this case. TheDARAB, citing Section 5 of Republic Act (R.A.) No. 3844,[33]ratiocinated that petitioners entered the subject property in 1970 uponthe request of Ciriaco who, with the consent of Gerry as manager of PASUDECO, was authorized to look for people to cultivate thesubject property. Petitioners cultivated the same and shared their harvests with PASUDECO, received by Gerry through Ciriaco.Later on, when Gerry refused to accept their lease rentals, petitioners deposited the money with LBP. The DARAB opined that thesepieces of evidence established the fact of consent and sharing. While express consent was not given, the fact that Gerry acceptedthe lease rentals for a considerable number of years signified an implied consent which, in turn, bound PASUDECO.

PASUDECO filed a Motion for Reconsideration [34] which was, however, denied by the DARAB in its Resolution [35]dated May

21, 2004. Thus, PASUDECO went to the CA for recourse.[36]

However, some of the records were found missing, as certified by theDARAB on June 22, 2004.[37]

The CA's Ruling

On April 12, 2005, the CA reversed the DARAB's ruling and reinstated the PARAD's decision. The CA held that, while thesubject property was agricultural, there was no tenancy relationship between the parties, express or implied. The CA concurred inthe findings of the PARAD and found no credible evidence to support the contention that petitioners were de jure tenants inasmuchas the elements of consent and sharing were absent. Citing these Court's rulings in Hilario v. Int

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