SECOND DIVISION

[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.
Bonifacio L. Hilario for petitioners.
Alberto Mala, Jr. for private respondent.
DECISION
GUTIERREZ, JR., J p:
This is a petition for review on certiorari of the Court of Appeals' decision declaring Salvador Baltazar a
leasehold tenant entitled to security of tenure on a parcel of land consisting of 1,740 square meters.
On January 13, 1981, Salvador Baltazar filed a verified complaint with the Court of Agrarian
Relations, Branch VI at Baliuag, Bulacan alleging that since January, 1955 he had been in continuous
possession as a share tenant of a parcel of land with an area of about 2 hectares situated in San
Miguel, Bulacan, which was previously owned by one Socorro Vda. de Balagtas; that on or about
December 27, 1980, and thereafter, the spouses Hilario began to threaten him to desist from entering
and cultivating a portion of the aforesaid land with an area of 4,000 square meters and otherwise
committed acts in violation of his security of tenure; that the Hilarios were contemplating the putting
up of a fence around the said portion of 4,000 square meters and that unless restrained by the court,
they would continue to do so to his great irreparable injury.
Baltazar claims that he became a tenant of Socorro P. Vda. de Balagtas on the latter's two hectare
landholding located at San Juan, San Miguel, Bulacan by virtue of a "Kasunduan" executed between
them on January 8, 1979. He states that he erected his house and planted "halaman," the produce of
which was divided at 70-30 and 50-50 (sic) in his favor. After the death of Socorro P. Vda. de Balagtas,
he allegedly gave the share pertaining to the landowner to her daughter Corazon Pengzon. It was only
in December, 1980 that he came to know that a portion of the 2 hectares or 4,000 square meters is
already owned by the Hilarios.
On the other hand, the petitioners aver that they acquired the landholding of 4,000 square meters
from the Philippine National Bank (PNB) after it had been foreclosed by virtue of a deed of sale
executed between Bonifacio Hilario and the PNB. The former owner Corazon Pengzon testified that she
owned only two lots Lot 427-B with an area of 841 square meters and Lot 427-C with an area of 899
square meters with a total area of 1,740 square meters. The other 2 lots were owned by Ruben
Ocampo and Juan Mendoza. She further testified that in 1964 at the time of the partition of the
property, she declared the property for classification purposes as "bakuran" located in the Poblacion
and had no knowledge that there were other things planted in it except bananas and pomelos.
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 plaintiffappellant a 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
harvested and sometimes there
1965, what step, if any, have you taken,
are other fruits, your Honor.
regarding this subject landholding or after
"Q
You mean to say he
the death of your mother how did you
stays in this subject landholding
"Q
. . . administer this
consisting of 7,000 square
landholding in 1963, 1964,
meters?
1965, 1966, etc?
"A
After the survey it turned
"A
What I did is to fix the
out
title of ownership, sir.
"A
. . . that he is occupying
COURT:
another lot which I learned that
"Q
What else?
property does not belong to us,
"A
None other, Your Honor.
Your Honor.
"Q
After the death of your
"Q
What
was
your
mother in 1962, have you seen
arrangement regarding his stay
Mr. Salvador Baltazar in this
in that landholding which you
landholding in question?
don't own?
"A
Yes, Your Honor.
"A
He said that he had a
"Q
What was he doing?
contract with my late mother
WITNESS:
which I don't know; in order not
"A
We are neighbors, Your
to cause any trouble because I
Honor, sometimes he visits and
will be bothered in my business,
goes to our place and we used
I told him to continue, Your
to meet there, Your Honor.
Honor.
"Q
What was the purpose of
"Q
What do you mean when
his visit and your meeting in
you
this landholding?
COURT:
"A
Sometimes when he
(continuing)
visits our place he tells us that
. . . told him to
there are some bananas to be
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 Corazon 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
though 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 necessarily 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
contradistinguished from a de jure tenant. This is so because unless a person has established his
status as a de jure tenant, he is not entitled to security of tenure nor is he covered by the Land Reform
Program of the Government under existing tenancy laws. . . ." (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.
Fernan (Chairman), Alampay, Paras, Padilla, Bidin and Cortes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. Nos. L-16292-94, L-16309 and L-16317-18

October 31, 1960

KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD COMPANY, petitioner,

vs.
YARD CREW UNION, STATION EMPLOYEES UNION, RAILROAD ENGINEERING DEPARTMENT
UNION, MANILA RAILROAD COMPANY, and COURT OF INDUSTRIAL RELATIONS, respondents.
MANILA RAILROAD COMPANY, petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS, MANILA RAILROAD CREW UNION, STATION EMPLOYEES
UNION and KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD
COMPANY, respondents.
L-16292-94.
Jose Espinas for petitioner.
F.A. Sambajon for respondent CIR.
Government Corporate Counsel Simeon M. Gopengco and F.A. Umali for respondent MRR.
Carlos E. Santiago for respondent Unions.
F. Da. Bondoc for respondents (REDU).
L-16309 and L-16217-18.
Government Corporate Counsel Simeon M. Gopengco and F.A. Umali for petitioner.
V.C. Magbanua for respondent CIR.
F. Da. Bondoc for respondent (REDU).
Jose R. Espinas for respondent Kap. Ng Manggagawa sa MRR.
Carlos C. Santiago for the other respondent Unions.
PAREDES, J.:
In the Court of Industrial Relations, three separate petitions were registered: Case No. 491-MC, by Yard
Crew Union, Case No. 494-MC, by Station Employees' Union; and Case No. 507-MC, by Railroad
Engineering Department Union. The Kapisanan Ng Mga Manggagawa Sa Manila Railroad Company,
intervened. They were treated jointly by the respondent Court because they involved identical
questions. On appeal, three separate petitions for certiorari were presented by the Kapisanan Ng Mga

Manggagawa Sa Manila Railroad Company (G.R. Nos. L-16292-94) and three separate petitions
for certiorari by the Manila Railroad Company (G.R. No. L-16309, L-16317 and L-16318.).
We glean from the record the following facts:
On March 7, 1955, the Kapisanan Ng Mga Manggagawa Sa Manila Railroad Company, hereinafter called
Kapisanan, filed a petition (Case No. 237-MC), praying that it be certified as the exclusive bargaining
agent in the Manila Railroad Company, hereinafter called Company. A decision was promulgated on
September 29, 1956, affirmed by the Court en banc on January 16, 1957, in which the respondent
Court found three unions appropriate for purposes of collective bargaining, to wit: (1) The unit of
locomotive drivers, firemen, assistant firemen and motormen-otherwise known as the engine crew
unit: (2) the unit of conductors, assistant conductors, unit agents, assistant route agents and train
posters, otherwise known as the train crew unit, and (3) the unit of all the rest of the company
personnel, except the supervisors, temporary employees, the members of the Auditing Department,
the members of the security guard and professional and technical employees, referred to by the
respondent court as the unit of the rest of the employees. To these 3 units, the following unions were
respectively certified as the exclusive bargaining agents: (1) The Union de Maquinistas, Fogoneros,
Ayudantes y Motormen; (2) Union de Empleados de Trenes (conductors); and (3) the Kapisanan Ng Mga
Manggagawa Sa Manila Railroad Company.
After the decision had become final, Case No. 491-MC was filled on September 20, 1957, amended on
August 13, 1958, by the Manila Railroad Yard Crew Union, praying that it be defined as a separate unit;
Case No. 494-MC, on September 25, 1957, amended on August 13, 1958, by the Station Employees'
Union, praying that it be constituted as a separate bargaining unit, and Case No. 507- MC, on
November 30, 1957, by the Railroad Engineering Department Union, praying that it be defined as a
separate bargaining unit. All asked that they be certified in the units sought to be separated. The
respondent unions are legitimate labor organizations with certificates of registration in the Department
of Labor.
The Kapisanan and the Company opposed the separation of the said three units on the following
grounds:
(1) That the Kapisanan had been duly certified as the collective bargaining agent in the unit of all of
the rest of the employees and it had entered into a collective bargaining agreement on November 4,
1957, and this agreement bars certification of a unit at least during the first 12 months after the
finality of Case No. 237-MC (contract bar rule).
(2) That the Court had denied similar petitions for separation of unit as was ordered in Case No. 488MC, wherein the petition for the separation of Mechanical Department Labor Union was dismissed by
the respondent Court on April 25, 1958 and in the case of the Benguet Auto Lines Union, Case No. 4MC-PANG) dismissed on July 18, 1958.
(3) That the three unions in question are barred from petitioning for separate units because they are
bound by the decision in Case No. 237-MC, for having been represented therein by the Kapisanan.
After due hearing, the respondent Court, through the Hon. Arsenio Martinez, Associate Judge, handed
down an order, dated June 8, 1959, the dispositive portion of which recites as follows:
Wherefore, all the foregoing considered, and without passing upon the basic questions raised
herein and as part of its fact finding investigations, the Court orders a plebiscite to be
conducted among the employees in the three proposed groups, namely: the Engineering
Department, the Station Employees and the Yard Crew Personnel. The employee in the
proposed groups minus the supervisors, temporary employees, members of the Auditing
Department, members of the security group, professionals and technical employees, shall
vote, in a secret ballot to be conducted by this Court, on the question of whether or not they
desire to be separated from the unit of the rest of the employees being represented by the
Kapisanan. In this connection, the Court requests the cooperation of the Manila Railroad

Company to extend its facilities for the holding of this plebiscite, particularly the payrolls for
the month to be agreed upon by the parties. . . .
The respondent Court also declared that the collective bargaining agreement could not be a bar to
another certification election because one of its signatories, the Kapisanan President, Vicente K. Olazo,
was a supervisor:
In considering however such existing contract between the Kapisanan and the Company, the
Court cannot close its eyes and fail to observe that among the signatories thereto, on the part
of the Kapisanan, is the President of the Union, Vicente K. Olazo.
In case No. 237-MC. one of the important and fundamental questions raised was whether or
not Vicente K. Olazo is a supervisor within the meaning of Section 2(k) of Republic Act 875. The
Trial Court, as well as the majority of the Court en banc, reached the conclusion in same Case
No. 237-MC that he is a supervisor.
. . . For this reason, the Court believes that his existing contract, through embodying terms and
conditions of employment and with a reasonable period to run, would not be a bar to a
certification proceeding.
A motion for reconsideration of the order of June 8, 1959, was presented by the Kapisanan, and same
was denied on August 20, 1959, in an order, concurred in by three Judges of the Court, with two Judges
dissenting, against which the Kapisanan on November 28, 1959, filed its notice of appeal. Appeals
by certiorari were filed by the Kapisanan and the Company. In this Court, respondents presented
motion to dismiss the petitions, on the ground that the order of the respondent court on June 8, 1959
and the resolution of the respondent court en bancdated August 20, 1959, to hold a plebiscite, were
interlocutory, not subject to appeal. They also allege the same in their answers, as one of the
defenses. The case, therefore, poses three questions, to wit:
1. Are the appealed orders interlocutory in nature?
2. Is the order of the respondent court, granting groups of employees to choose whether or not they
desire to be separated from the certified unit to which they belong, during the existence of a valid
bargaining contract entered into by a union close to the heels of its certification, contrary to law?
3. Is it legal error for the respondent court to hold that the bargaining agreement in question does not
bar certification proceedings, only because one of the signatories for the union was adjudged by the
majority of such court to be supervisor, in a previous case?
Wherefore, all the foregoing considered, and without passing upon the basic question raised
herein and as part of its fact finding investigation, the Court orders a plebiscite to be
conducted among the employees in the three proposed groups, namely: the Engineering
Department, the Station Employees and the Yard Crew Personnel.
The resolution en banc, dated August 20, 1959, partially states:
It will be further noted that it is just a part of the investigatory power of the Court to determine
by secret ballot the desire of the employees concerned. What has been ordered is merely a
plebiscite and not the certification election itself. . . . Proceedings may still continue and an
order whether denying the petition or not would necessarily ensue. In a word, something else
has to be done within the premises and the order does not deny or grant petition in the above
entitled case.
In the case of Democratic Labor Association vs. Cebu Stevedoring Co., G.R. No. L-10321, February 28,
1958, we stated that because of the modern complexity of the relation between both employer and
union structure, it becomes difficult to determine from the evidence alone which of the several
claimant groups forms a proper bargaining unit; that it becomes necessary to give consideration to the

express will or desire of the employees a practice designated as the "Globe doctrine," which
sanctions the holding of a series of elections, not for the purpose of allowing the group receiving an
over all majority of votes to represent all employees, but for the specific purpose of permitting the
employees in each of the several categories to select the group which each chooses as a bargaining
unit; that the factors which may be considered and weighed in fixing appropriate units are: the history,
of their collective bargaining; the history, extent and type of organization of employees in other plants
of the same employer, or other employers in the same industry; the skill, wages, work and working
conditions of the employees; the desires of the employees; the eligibility of the employees for
membership in the union or unions involved; and the relationship between the unit or units proposed
and the employer's organization, management and operation, and the test in determining the
appropriate bargaining unit is that a unit must effect a grouping of employees who have substantial,
mutual interests in wages, hours, working conditions and other subjects of collective bargaining.
It is manifest, therefore, that "the desires of the employees" is one of the factors in determining the
appropriate bargaining unit. The respondent Court was simply interested "in the verification of the
evidence already placed on record and submitted wherein the workers have signed manifestations and
resolutions of their desire to be separated from Kapisanan." Certainly, no one would deny the
respondent court's right of full investigation in arriving at a correct and conclusive finding of fact in
order to deny or grant the conclusive findings of fact in order to deny or grant the petitions for
certification election. On the contrary, all respondent court, or any court for that matter, to investigate
before acting, to do justice to the parties concerned. And one way of determining the will or desire of
the employees is what the respondent court had suggested: a plebiscite carried by secret ballot. A
plebiscite not to be conducted by the Department of Labor, as contemplated in a certification election
under Sec. 12 of the Magna Charter of Labor, R.A. No. 875, but by the respondent court itself. As well
as observed by the respondent court, "the votes of workers one way or the other, in these cases will
not by any chance choose the agent or unit which will represent them anew, for precisely that is a
matter that is within the issues raised in these petitions for certification".
The test in determining whether an order or judgment is interlocutory or final is "Does it leave
something to be done in the trial court with respect to the merits of the case? If it does, it is
interlocutory; if it does not, it is final" (Moran's Comments on the Rules of Court, 1952 Ed., Vol. I, p. 41).
Having in view the avowed purpose of the orders in question, as heretofore exposed, one should not
stretch his imagination far to see that they are clearly interlocutory, as they leave something more to
be done in the trial court and do not decide one way or the other the petitions of the respondent
unions. We are, therefore, constrained to hold, as we do hereby hold, that the present appeals or
petitions for review by certiorari, are not authorized by law and should be dismissed (Section 2, Rule
44, Rules of Court). There is, moreover, nothing, under the facts obtaining in these cases and the law
on the subject, which would warrant this Court to declare the orders under consideration, illegal.
The herein petitioners contend that the collective bargaining agreement, executed on November 4,
1957 (Case No. 237-MC), is a bar to the certification proceedings under consideration. The respondents
counter that it is not so, because one of the signatories in the said agreement for the Kapisanan,
Vicente K. Olazo, was found to be a supervisor under section 2(k) R.A. 875, in Kapisanan, etc. vs. CIR,
etc., 106 Phil., 607; 57 Off. Gaz. (2) 254. Having, however, reached the conclusion that the orders in
question are not appealable and that the respondent court has not as yet decided on whether the said
collective bargaining agreement is a bar or not to the petitions for separate units and for certification
election, which could properly be determined after the result of the plebiscite shall have been known
by the respondent court, the consideration of this issue is premature.
In view hereof, the petitions or appeals for review by certiorari are dismissed, without costs.
Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L. Barrera and
Gutierrez David, JJ., concur.

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

Eudosia Daez filed a Motion for Reconsideration but it was denied on January 19, 1995. [16]
She appealed Secretary Garilaos decision to the Office of the President which ruled in her favor. The
dispositive portion of the Decision[17] of then Executive Secretary reads:
"WHEREFORE, the resolution and order appealed from are hereby SET ASIDE and
judgment is rendered authorizing the retention by Eudosia Daez or her heirs of the
4.1685-hectare landholding subject thereof.
SO ORDERED."[18]
Aggrieved, private respondents sought from the Court of Appeals, a review of the decision of the Office
of the President.
On January 28, 1999, the said Decision of the Office of the President was reversed. The Court of
Appeals ordered, thus:
"WHEREFORE, the assailed decision of July 5, 1996 and Order dated October 23, 1996
of the public respondents are REVERSED AND SET ASIDE, and the Resolution and Order
of DAR Secretary Ernesto D. Garilao respectively dated August 26, 1994 and January
19, 1995 are REINSTATED.
SO ORDERED."
Hence, this petition which assigns the following errors:
"I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT DISTINCTION
BETWEEN EXEMPTION FROM AGRARIAN REFORM COVERAGE AND THE RIGHT OF
RETENTION OF LANDOWNERS IS ONLY A MATTER OF SEMANTICS THAT AN ADVERSE
DECISION IN THE FORMER WILL FORECLOSE FURTHER ACTION TO ENFORCE THE
LATTER CONSIDERING THAT THEY CONSTITUTE SEPARATE AND DISTINCT CAUSES OF
ACTION AND, THEREFORE, ENFORCEABLE SEPARATELY AND IN SEQUEL. Sclex
II. THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE PRINCIPLE OF
RES JUDICATA DESPITE THE FACT THAT THE PREVIOUS CASE CITED (EXEMPTION FROM
COVERAGE DUE TO NON-TENANCY) AND THE PRESENT CASE (RETENTION RIGHT) ARE
OF DIFFERENT CAUSES OF ACTION.
III. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED/OPINED THAT THERE
WAS A CUT-OFF DATE (AUGUST 27, 1985) FOR LANDOWNERS TO APPLY FOR
EXEMPTION OR RETENTION UNDER PD 27 AND THOSE WHO FAILED TO FILE THEIR
APPLICATIONS/PETITIONS ARE DEEMED TO HAVE WAIVED THEIR RIGHTS.
IV. THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT PETITIONERS
(RESPONDENTS THEREIN) ARE GUILTY OF ESTOPPEL.
V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LAND
SUBJECT OF THIS CASE IS NO LONGER OWNED BY PETITIONERS SINCE PRIVATE
RESPONDENTS HAVE ALREADY BEEN ISSUED NOT ONLY THEIR RESPECTIVE
CERTIFICATES OF LAND TRANSFER BUT ALSO THEIR INDIVIDUAL CERTIFICATES OF TITLE
OVER THE DISPUTED AREA."[19]
We grant the petition.
First. Exemption and retention in agrarian reform are two (2) distinct concepts.
P.D. No. 27, which implemented the Operation Land Transfer (OLT) Program, covers tenanted rice or
corn lands. The requisites for coverage under the OLT program are the following: (1) the land must be
devoted to rice or corn crops; and (2) there must be a system of share-crop or lease-tenancy obtaining
therein. If either requisite is absent, a landowner may apply for exemption. If either of these requisites
is absent, the land is not covered under OLT. Hence, a landowner need not apply for retention where
his ownership over the entire landholding is intact and undisturbed.
P.D. No. 27 grants each tenant of covered lands a five (5)-hectare lot, or in case the land is irrigated, a
three (3)-hectare lot constituting a family size farm. However, said law allows a covered landowner to
retain not more than seven (7) hectares of his land if his aggregate landholding does not exceed
twenty-four (24) hectares. Otherwise, his entire landholding is covered without him being entitled to
any retention right.[20] Xlaw
Consequently, a landowner may keep his entire covered landholding if its aggregate size does not
exceed the retention limit of seven (7) hectares. In effect, his land will not be covered at all by the OLT
program although all requisites for coverage are present. LOI No. 474 clarified the effective coverage
of OLT to include tenanted rice or corn lands of seven (7) hectares or less, if the landowner owns other
agricultural lands of more than seven (7) hectares. The term "other agricultural lands" refers to lands
other than tenanted rice or corn lands from which the landowner derives adequate income to support
his family.
Thus, on one hand, exemption from coverage of OLT lies if: (1) the land is not devoted to rice or corn
crops even if it is tenanted; or (2) the land is untenanted even though it is devoted to rice or corn
crops.

On the other hand, the requisites for the exercise by the landowner of his right of retention are the
following: (1) the land must be devoted to rice or corn crops; (2) there must be a system of share-crop
or lease-tenancy obtaining therein; and (3) the size of the landholding must not exceed twenty-four
(24) hectares, or it could be more than twenty-four (24) hectares provided that at least seven (7)
hectares thereof are covered lands and more than seven (7) hectares of it consist of "other agricultural
lands".
Clearly, then, the requisites for the grant of an application for exemption from coverage of OLT and
those for the grant of an application for the exercise of a landowners right of retention, are different.
Hence, it is incorrect to posit that an application for exemption and an application for retention are one
and the same thing. Being distinct remedies, finality of judgment in one does not preclude the
subsequent institution of the other. There was, thus, no procedural impediment to the application filed
by Eudosia Daez for the retention of the subject 4.1865-hectare riceland, even after her appeal for
exemption of the same land was denied in a decision that became final and executory.
Second. Petitioner heirs of Eudosia Daez may exercise their right of retention over the subject 4.1685
riceland.
The right of retention is a constitutionally guaranteed right, which is subject to qualification by the
legislature.[21] It serves to mitigate the effects of compulsory land acquisition by balancing the rights of
the landowner and the tenant and by implementing the doctrine that social justice was not meant to
perpetrate an injustice against the landowner [22]. A retained area, as its name denotes, is land which is
not supposed to anymore leave the landowners dominion, thus sparing the government from the
inconvenience of taking land only to return it to the landowner afterwards, which would be a pointless
process. Xsc
In the landmark case of Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian
Reform[23], we held that landowners who have not yet exercised their retention rights under P.D. No. 27
are entitled to the new retention rights under R.A. No. 6657 [24]. We disregarded the August 27, 1985
deadline imposed by DAR Administrative Order No. 1, series of 1985 on landowners covered by OLT.
However, if a landowner filed his application for retention after August 27, 1985 but he had previously
filed the sworn statements required by LOI Nos. 41, 45 and 52, he is still entitled to the retention limit
of seven (7) hectares under P.D. No.27[25]. Otherwise, he is only entitled to retain five (5) hectares
under R.A. No. 6657.
Sec. 6 of R.A. No. 6657, which provides, viz.:
SECTION 6. Retention Limits Except as otherwise provided in this Act, no person may
own or retain, directly or indirectly, any public or private agricultural land, the size of
which shall vary according to factors governing a viable family-size, such as
commodity produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall
retention by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following qualifications: (1) that
he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or
directly managing the farm; Provided, That landowners whose land have been covered
by Presidential Decree No. 27 shall be allowed to keep the area originally retained by
them thereunder, further, That original homestead grantees or direct compulsory heirs
who still own the original homestead at the time of the approval of this Act shall retain
the same areas as long as they continue to cultivate said homestead.
The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner. Provided, however, That in case
the area selected for retention by the landowner is tenanted, the tenant
shall have the option to choose whether to remain therein or be a beneficiary
in the same or another agricultural land with similar or comparable features.
In case the tenant chooses to remain in the retained area, he shall be
considered a leaseholder and shall lose his right to be a beneficiary under
this Act. In case the tenant chooses to be a beneficiary in another
agricultural land, he loses his right as a lease-holder to the land retained by
the landowner. The tenant must exercise this option within a period of one (1) year
from the time the landowner manifests his choice of the area for retention.
In all cases, the security of tenure of the farmers or farmworkers on the land prior to
the approval of this Act shall be respected.
Upon the effectivity of this Act, any sale, disposition, lease, management contract or
transfer of possession of private lands executed by the original landowner in violation
of this Act shall be null and void; Provided, however, That those executed prior to this
Act shall be valid only when registered with the Register of Deeds within a period of

three (3) months after the effectivity of this Act. Thereafter, all Register of Deeds shall
inform the DAR within thirty (3) days of any transaction involving agricultural lands in
excess of five (5) hectares"[26]. Sc
defines the nature and incidents of a landowners right of retention. For as long as the area to be
retained is compact or contiguous and it does not exceed the retention ceiling of five (5) hectares, a
landowners choice of the area to be retained, must prevail. Moreover, Administrative Order No. 4,
series of 1991,[27] which supplies the details for the exercise of a landowners retention rights, likewise
recognizes no limit to the prerogative of the landowner, although he is persuaded to retain other lands
instead to avoid dislocation of farmers.
Without doubt, this right of retention may be exercised over tenanted land despite even the issuance
of Certificate of Land Transfer (CLT) to farmer-beneficiaries. [28] What must be protected, however,
is the right of the tenants to opt to either stay on the land chosen to be retained by the
landowner or be a beneficiary in another agricultural land with similar or comparable
features.[29]
Finally. Land awards made pursuant to the governments agrarian reform program are subject to the
exercise by a landowner, who is so qualified, of his right of retention.
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 landowners retained area. Scmis
A certificate of title accumulates in one document a comprehensive statement of the status of the fee
held by the owner of a parcel of land. [33] As such, it is a mere evidence of ownership and it does not
constitute the title to the land itself. It cannot confer title where no title has been acquired by any of
the means provided by law[34].
Thus, we had, in the past, sustained the nullification of a certificate of title issued pursuant to a
homestead patent because the land covered was not part of the public domain and as a result, the
government had no authority to issue such patent in the first place [35]. Fraud in the issuance of the
patent, is also a ground for impugning the validity of a certificate of title [36]. In other words, the
invalidity of the patent or title is sufficient basis for nullifying the certificate of title since the latter is
merely an evidence of the former.
In the instant case, the CLTs of private respondents over the subject 4.1685-hectare riceland were
issued without Eudosia Daez having been accorded her right of choice as to what to retain among her
landholdings. The transfer certificates of title thus issued on the basis of those CLTs cannot operate to
defeat the right of the heirs of deceased Eudosia Daez to retain the said 4.1685 hectares of riceland.
WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals, dated
January 28, 1998, is REVERSED and SET ASIDE and the Decision of the Office of the President, dated
July 5, 1996, is hereby REINSTATED. In the implementation of said decision, however, the Department
of Agrarian Reform is hereby ORDERED to fully accord to private respondents their rights under Section
6 of R.A. No. 6657.
No costs. Missc
SO ORDERED.
Bellosillo, (Chairman), and Mendoza, JJ., concur.
Quisumbing, J., no part. Prior official action.
Buena, J., on leave.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-31963 August 31, 1978

ANGEL CUNANAN, petitioner,

vs.
HON. ANDRES C. AGUILAR, Judge of the CFI of Pampanga, Branch II, Provincial Sheriff of
Pampanga, Provincial Commander, PC Command Pampanga, and HEIRS OF CIRIACO
RIVERA, respondents.
Alberto A. Reyes for petitioner.
Abel de Ocera for private respondents.

SANTOS, J.:
By this special civil action for prohibition with prayer for preliminary injunction filed May 11, 1970,
petitioner an alleged agricultural tenant seeks to prohibit respondent from enforcing respondent
Judge's order dated April 11, 1970, issued in Civil Case No. 1477, Court of First Instance, Branch II, San
Fernando, Pampanga, entitled"Ciriaco Rivera, plaintiff vs. Pragmacio Paule, et al., defendants" on the
ground that the same "is null and void for having been issued by respondent Judge without jurisdiction
or with grave abuse of discretion." Petitioner also prays - (1) that the Provincial Sheriff and the
Provincial Commander of Pampanga be restrained from implementing the said order to oust him from
the land holding belonging to private respondents, heirs of Ciriaco Rivera; and (2) that private
respondent, Ciriaco Rivera, be ordered to maintain him in peaceful possession and cultivation of the
land as agricultural tenant thereof. 1 Actually, the issue raised for resolution in this petition is, whether
petitioner, Angel Cunanan, who is in possession of the disputed holding and who claims to be the
agricultural tenant lessee thereof as held by the CAR in CAR Case No. 1038-P'70, may be ordered,
under pain of contempt, to surrender the holding to private respondents, heirs of Ciriaco Rivera,
pursuant to an order issued by the CFI on April 11, 1970 in Civil Case No. 1477, Branch II, San
Fernando Pampanga.
Per resolution of May 14, 1970, petitioner's earlier motion for leave to litigate as pauper was granted,
and respondents were required to file their answer, not to move to dismiss, within ten (1 0) days from
receipt of notice.2 Respondents, heirs of Ciriaco Rivera, filed their answer on June 7, 1970. 3 The
petition was set for hearing on July 6, 1970. In lieu thereof, however, the parties were required to file
their respective memoranda. The petitioner filed his on July 30, 1970, 4 and the respondents on August
6, 1970. 5
The relevant factual and procedural antecedents which gave rise to this petition are as follow.
1. On August 28, 1958, private respondent, Ciriaco Rivera, filed with the Court of First Instance of
Pampanga, Branch II, then presided by Judge L. Pasicolan Civil Case No. 1477, entitled "Ciriaco Rivera,
plaintiff vs. Pragmacio Paule, Severa Sicat and Anastacio Saddi," as tenant of Pragmacio Paule, for
recovery of possession and damages over a parcel of agricultural land of about one (1) hectare, more
or less, situated at Sta. Rita, Lubao Pampanga. Plaintiff Rivera, whose heirs are private respondents
herein then alleged that he was in open, continuous and peaceful possession of the said parcel until
December, 1950 when defendants helping one another and aided by armed persons masquerading as
special policemen (civilian guards,) wrested from him possession and cultivation of the holding and
appropriated its harvests. 6
2. On August 24, 1964, while the case was pending trial, plaintiff Ciriaco Rivera died. He was
substituted by (1) Eustaquio, (2) Cleotilde, (3) Gregorio, (4) Maria, (5) Isabel and (6) Elena, all
surnamed Rivera, and the children of the late Cristina Rivera, to wit, (7) Belen, (8) Maria, (9) Arsenia
and (10) Jose all surnamed Lugto per Order dated September 8, 1964. 7
3. On December 8,1964, judgment was rendered in favor of plaintiffs ordering defendants (1)
Pragmacio Paule, (2) Severa Sicat and (3) Anastacio Saddi to vacate the property and surrender the
same to plaintiffs and to pay damages. 8

4. On March 1, 1966, the defendant's appeal to the Court of Appeals in CA-G.R. No. 35509-R, was
dismissed. 9
5. On August 19,1969, the judgment having become final and executory, a writ of execution was
issued and by virtue thereof the heirs of the late Ciriaco Rivera were placed in possession of the land in
October, 1969. 10
6. In a motion filed November 12, 1969, the plaintiffs alleged, that after the Provincial Sheriff have
placed them in possession of the landholding, one Damaso Cunanan who claimed to be the successorin-interest of Anastacio Saddi, entered the land reaped the palay planted thereon Damaso Cunanan
was cited to appear before the Court to explain why he should not be held in contempt. 11
7. On January 15, 1970, Damaso Cunanan filed his "Explanation with Motion to Lift Order of Arrest" thru
which he explained satisfactorily to the Court that he has no interest in the land; that the person who
harvested the palay was Pragmacio Paule. 12 The order for his arrest was lifted by respondent Judge on
January 16, 1970. 13
8. Meanwhile, on January 26, 1970, petitioner herein initiated an action before the Court of Agrarian
Relations (CAR) in San Fernando, Pampanga, presided by Judge Isidro L. Tayag thru a "Complaint with
Urgent Ex Parte Motion for the Issuance of an Interlocutory Order," docketed as CAR Case No. 1038P'70 against Pragmacio Paule. He alleged, that since 1965 he was the agricultural tenant of defendant
Paule and that Paule threatened to eject him from his landholding. 14
9. On February 2, 1970, Judge Tayag of the CAR issued the interlocutory order prayed for, directing the
Chief of Police of Lubao Pampanga to enforce its order prohibiting the defendant Paule and/or any
person acting in his behalf from molesting and disturbing the plaintiff (petitioner herein), in his
peaceful possession and cultivation of the landholding in question. 15
10. On February 7, 1970, Pragmacio Paule defendant and one of the losing parties, in Civil Case No.
1477-CFI Pampanga and also defendant in CAR Case No. 1038-P'70 Med his answer in CAR Case No.
1038-P'70. In said answer, he ... admitted all the material averments in the Complaint and alleged
merely as a defense, that the contract between him and the petitioner had already been terminated
and that he is returning the land to the new landowner ..." 16
11. On February 10, 1970, the CAR again issued an order, upon motion of plaintiff, dated February 9,
1970, directing the Provincial Commander of the Philippine Constabulary San Fernando, Pampanga, to
enforce its Order prohibiting defendants (1) Pragmacio Paule, (2) Eduardo Manalansan, (3) Jose
Manalansan, Jr., (4) Anastacio (also Eustaquio) Rivera, (5) Ciriaco Lugto, (6) Pepito Lugto and Rudy
and/or any other persons acting for and in behalf of said defendant from molesting and disturbing the
plaintiff in the peaceful possession and cultivation of his landholding in question. 17
12. On February 15, 1970, Eustaquio (also Anastacio) Rivera, one of the persons restrained in the
preceeding order of February 10, in CAR Case No. 1038-P'70, filed a motion in said case to reconsider
and to set aside the order of February 10, 1970 on the ground that Pragmacio Paule, whose former
tenant is Anastacio Saddi have been ordered by the Court of First Instance in Civil Case 1477 to
surrender possession of the land to him as one of the heirs of Ciriaco Rivera, and that plaintiff Angel
Cunanan cannot, therefore, invoke security of tenure, citingLastimosa vs. Blanco, L-14697, January 28,
1961. 18 The CAR thru Judge Isidro Tayag denied the motion on March 11, 1970 on the ground that
movant Eustaquio (also Anastacio) Rivera has no standing or personality before his Court. 19
13. Meanwhile and on the same date, i.e. February 15, 1970, plaintiffs in Civil Case No. 1477, filed
a "Motion for Contempt" alleging that on February 12, 1970, Angel Cunanan, petitioner herein, entered
the premises and destroyed the growing palay planting thereon by harrowing the said land, without
their knowledge and consent. 20
14. On March 8, 1970, petitioner herein filed his "Explanation" in the Civil Case No. 1477. He alleged
that he cultivated and planted the landholding in question with palay in compliance with the order of
the CAR; that he did not destroy the existing plants and nobody is thus prejudiced; that he did not take

the law into his own hands, but rather brought the matter to the proper authority, to determine
whether he should continue cultivating his landholding. 21
15. In the meantime, on April 6, 1970, the CAR rendered its decision in CAR Case No. 1038-P'70 to wit

xxx xxx xxx

Wherefore, the Court renders judgment, bad on the pleadings as follows:
1. Recognizing the relationship between plaintiff and the defendant over the
landholding in question to be one of leasehold ...;
2. Making permanent in character the Order of this Court dated February 10, 1970;
3. Dismissing all other claims of the parties for lack of merit.
So Ordered.
San Fernando, Pampanga, April 6, 1970.
16. On April 11, 1970, respondent Judge Andres C. Aguilar, CFI, Pampanga in turn issued the order,
now in question, resolving the motion for contempt against petitioner as follows :
xxx xxx xxx
Angel Cunanan is now cited for contempt of court.
In a so-called appearance with Urgent Motion for Postponement, Atty. Alfredo P. Malit,
Special Attorney Office of the Agrarian Counsel, entered his appearance for Angel
Cunanan. In a Manifestation and Motion dated February 18, 1970, Atty. Alfredo P. Malit
informs this Court, insofar as pertinent that in CAR Case No. 1038-P'70, entitled
"ANGEL CUNANAN vs. PRAGMACIO PAULE" the Court of Agrarian Relations issued an
Order dated February 10, 1970, prohibiting PRAGMACIO PAULE and other persons
acting for and in his behalf, from molesting and disturbing the possession of Angel
Cunanan. Atty. Malit now contends that this Court has no jurisdiction over the case as
all question of ejectment of tenants are within the jurisdiction of the Court of Agrarian
Relations. There are also attached to the record Explanations dated March 2, 1970, and
March 8, 1970, submitted by Atty. Malit. The most significant matters raised in said
explanations are that Angel Cunanan did not violate any orders of this Court but that
he is just complying with the order of the Court of Agrarian Relations; that Angel
Cunanan now recognizes the plaintiffs as the owners of the land; that he does not
possess the land in concept of owner but is recognizing anybody who will be adjudged
owner of the land.
From the pleadings submitted to this Court and the manifestations and explanations
submitted by Atty. Malit, there is no question that Angel Cunanan is in possession of
the property adjudged to the plaintiffs and that Angel Cunanan recognizes the
ownership of the plaintiffs.
This Court is not concerned with the tenancy case of Angel Cunanan against
Pragmacio Paule, but this Court is concerned with the proper execution of the
judgment restoring the possession of the land to the plaintiffs herein On this point the
Court is ready and disposed to exercise its full powers to compel obedience to its
judgments, orders and processes (Section 5-C, Rule 135, Rules of Court). And if any
member of the Bar, on the pretension of the exercise of his profession, appears to be

an instrument in the plaunting (sic) of the orders of this Court, such member of the Bar
will also receive the stern attention of this Court.
It appears that Angel Cunanan has sufficient knowledge that the plaintiffs herein have
won in this case against Pragmacio Paule and that the plaintiffs have been placed in
possession of the property. It also appears that Angel Cunanan has sufficient
knowledge that Pragmacio Paule has been dispossessed of the property.
In line with the ruling of the Supreme Court laid down in the case of Lastimosa vs.
Blanco (L-14697, 28 Jan 1961), that tenancy relationship can only be created with the
consent of the true and lawful landholder, and that a tenant of an ousted landholder
can have no better right and claim security of tenure, Angel Cunanan, who anchors his
c to possess the land as a tenant of Pragmacio Paule, who was himself ousted from the
property, has no legal right to possess the property of the plaintiffs.
IN VIEW OF ALL THE FOREGOING, this Court orders Angel Cunanan to vacate the
property of the plaintiffs within ten (10) days from receipt of this Order, with an
admonition that this Court will deal with him in accordance with law, should he disobey
the same. The Provincial Sheriff is hereby ordered to enforce this Order and the
Provincial Commander, San Fernando, Pampanga, is directed to render assistance as is
necessary.
xxx xxx xxx
SO ORDERED.
San Fernando, Pampanga, April 11, 1970.
Assailing this Order of respondent Judge, petitioner now contends in this petition that, as adverted to
above, the same was issued without jurisdiction and with grave abuse of discretion on two grounds, i.e.
(1) that he was not a party in Civil Case No. 1477 and, therefore, the Court of First Instance, not having
acquired jurisdiction over his person, cannot enforce the decision in said case against him (citing
Sumulong v. Imperial, 51 Phil. 251); and (2) that he has been duly declared in CAR Case No. 1038-P'70
as the lawful agricultural tenant lessee of the landholding belonging to private respondents, and as
such he is entitled to security to tenure under Sections 7 and 36 of RA 3844. 23
Respondents, on the other hand, maintain (1) that the judgment can be enforced against petitioner
herein, as successor-in- interest of Damaso Cunanan, who in turn is the successor-in- interest of
Anastacio Saddi the former tenant, who was one of the defendants ordered in Civil Case No. 1477 to
vacate and surrender the land to the heirs of Ciriaco Rivera citing Section 49(b), Rule 39 of the Revised
Rules of Court (Effect of Judgment) and Cruz vs. Pascual L-9317, July 31, 1956; 24 and (2) that petitioner
herein is not an agricultural tenant entitled to security of tenure, since he was constituted by
Pragmacio Paule, who was already ejected from the landholding in Civil Case No. 1477 (Lastimosa vs.
Blanco. J, 14697, January 28,1961; 1 SCRA 231 and Dumlao vs. De Guzman, L-12816, January 28,
1961, 1 SCRA 144); and, that it was through representations and concealment of facts that petitioner,
in order to forestall his ejectment, was able to obtain the interlocutory orders and favorable decision
from the Court of Agrarian Relations. 25
This petition is without merit; the assailed order of the learned respondent Judge of the Court of First
Instance (CFI) must be sustained; the decision of the Court of Agrarian Relations (CAR) must be set
aside.
1. Petitioner's first contention that the order of April 11, 1970 issued by respondent Judge of the Court
of First Instance in Civil Case No. 1477-CFI-Pampanga, cannot enforced against him, on the ground that
he is not a party to the case, is without merit. For although petitioner is not a party defendant in said
case, he was by his own admission and as the records clearly show instituted as tenant on the
holding by Pragmacio Paule who was as one of the principal defendants in Civil Case No. 1477 and
who, per the judgment in said case rendered on December 8, 1964, which has become final and

executory ordered to vacate the property and surrender the same to the plaintiffs therein, now
private respondents. The decision in said case and the writ for its execution are, therefore, clearly
enforceable and may be executed as against petitioner. For petitioner derives his alleged right to hold
the holding from one who has no right to the same. To hold otherwise is to permit a situation where
Paule can defeat the judgment, by the mere device of appointing petitioner as alleged tenant over the
holding from which he (Paule) had been ejected by final and executory judgment.
2. Petitioner's second claim that, as an agricultural tenant, recognized as such in the decision of the
Court of Agrarian Relations in CAR Case No. 1038-P'70, he is entitled to security of tenure, is also
without merit.
The records consisting of parties' pleadings and admissions show that on August 19, 1969, the
judgment in Civil Case No. 1477 before the CFI having become final and executory a writ of execution
was issued and by virtue thereof, the heirs of Ciriaco Rivera, now private respondents, were restored in
possession of the land in October of the same year. Meanwhile, on January 26, 1970, petitioner herein
initiated an action before the CAR and secured an interlocutory order in CAR Case No. 1038- P'70
against Pragmacio Paule, one of the defendants in Civil Case No. 1477, who have been ordered to
vacate the holding and surrender the same to the heirs of Ciriaco Rivera. Petitioner alleged before the
CAR that he was the agricultural tenant of Paule, who threatened to eject him from the holding. Judge
Tayag of the CAR unaware of the decision and writ of execution in Civil Case No. 1477 issued the
interlocutory order, directed the Chief of Police of Lubao to enforce the same and prohibit Paule and/or
any other person in his behalf from molesting and disturbing herein petitioner's peaceful possession
and cultivation of the holding. Paule, in turn, in obvious collusion with herein petitioner, "admitted all
the material averments in the complaint and alleged merely as a defense, that the contract between
him and the petitioner had already been terminated and that he is returning the land to the new land
owner" (sic) heirs of Ciriaco Rivera, prevailing party in Civil Case 1477 of the CFI and private
respondents herein. Meanwhile, on February 15, 1970, the plaintiffs in Civil Case No. 1477 the heirs
of Ciriaco Rivera moved to cite petitioner Cunanan for contempt, for having entered the premises of
the holding and destroyed the growing palay crops thereon. Cited, Cunanan, by way of explanation,
alleged that he recognized the plaintiffs as owners of the land but cultivated and planted the holding in
compliance with the interlocutory order of the CAR, which on April 6, 1970 rendered its judgment
based on the pleadings in CAR Case No. 1038P'70; it declared petitioner herein (plaintiff in CAR Case
No. 1038-P'70) as the tenant of Paule over the holding and made permanent its interlocutory orders of
February, 1970. On April 11, 1970, respondent Judge Andres Aguilar, CFI, Pampanga, in turn, issued the
disputed order in Civil Case No. 1477, directed petitioner herein to vacate the property of plaintiffs,
with the warning that he will be dealth with as for contempt, if he should disobey the same.
Under the foregoing factual milieu, private respondent's claims (1) that petitioner was not
agricultural tenant, and (2) that the recognition by the Court of Agrarian Relations of his alleged
tenancy status has been secured thru misrepresentation and suppression of facts must prevail.
(1) By petitioner's own claim filed with the CAR in 1970 he was constituted as tenant on the land by
Pragmacio Paule. Paule was, however, ordered to vacate the holding and surrender the same to private
respondents herein, the heirs of Ciriaco Rivera, as early as December 8, 1964 by the final and
executory judgment in Civil Case No. 1477. Therefore, Paule's institution of petitioner as tenant in the
holding did not give rise to a tenure relationship. Tenancy relationship can only be created with the
consent of the true and lawful landowner who is the owner, lessee, usufructuary or legal possessor of
the land. It cannot be created by the act of a supposed landowner, who has no right to the land subject
of the tenancy, much less by one who has been dispossessed of the same by final judgement. 26
(2) The records show that petitioner initiated his action before the CAR on January 26, 1970 after his
father, Damaso Cunanan, had been cited for contempt for taking possession of the holding and reaping
the palay crop thereon in November, 1969, obviously, with the end in view to prevent the execution of
the judgment in Civil Case No. 1477 of the CFI as against himself. He found a ready and willing ally in
the scheme in the person of Paule, who, smarting under the adverse judgment in the Civil Case, was
bent on frustrating the same. Thus, when the case before the CAR came up for trial Paule literally
confess judgment in favor of petitioner, who claimed to be his tenant. And the CAR, unaware of the
decision and writ of execution in the Civil case, declared petitioner as the tenant of the holding. This
judgment of the CAR which petitioner and Paule have contrived to secure thru representations and

suppression of facts petitioner now claims makes him tenant of the holding and protects his tenure
on the same.
Happily for private respondents whose initial action to recover the lot date to August 28, 1958
Paule, at the time he allegedly constituted Cunanan, petitioner herein, as tenant, was not the
landowner or lessee or usufructuary or legal possessor thereof, and, therefore, no tenure relationship
was created between them. 27 As a necessary consequence, the declaration by the CAR that petitioner
was the "tenant" which finding was induced by Paule's confession of judgment and concealment of
his prior ejectment from the holding under the final and executory judgment of the CFI and, therefore,
was a fraudulent imposition upon the Court was and should be considered inefficacious and
unavailing insofar as petitioner's claim that he became the tenant of the lot is concerned. For the
jurisdiction of the CAR is limited "... to cases or actions involving matters, controversies, disputes ...
arising from agrarian relations ..." 28 and "... such agrarian relations can arise only where the parties
stand in the relation of landholder and tenant ... and one of the parties work the land. 29
Consequently where, as in this case, there was no tenure relation because the alleged landholder,
Paule, has precisely been ordered to surrender the holding to its rightful owner by final and executory
judgment at the time he constituted petitioner as tenant, the declaration by the CAR to that effect in
a judgment which it was misled to make by the very misrepresentations of Paule must of necessity
be null and void and of no legal effect. Otherwise stated, the CAR cannot create or recognize a tenure
relation between persons, where none exists, because the alleged landholder is not the owner, lessee
or possessor or usufructuary of the holding.
Prescinding from the foregoing absence of tenure relations and the consequent lack of jurisdiction on
the part of the CAR to declare that one exists, petitioner's claim to security of tenure in the holding
must fail. For it is settled that "...Security of tenure may be invoked only by tenants de jure and not by
those who are not true and lawful tenants but who became so only through the acts of a supposed
landholder who had no right to the landholdings. Tenancy relation can only be created with the consent
of the true landholder who is either the owner, lessee, usufructuary or legal possessor of the land."
Further, ... Where the alleged landholder was a squatter who was ejected from the landholding by
virtue of a writ of execution in a forcible entry case, the legal possessors of the landholding cannot be
compelled to retain the tenants of the said squatter. 30 It follows then that petitioner is not entitled to
security of tenure extended to de jure agricultural tenants for reasons of public policy. He may thus be
lawfully ordered by respondent Judge in Civil Case No. 1477-CFI- Pampanga, to surrender the lawful
possession of the holding to private respondents, heirs of Ciriaco Rivera, at the pain of being held iii
contempt of court.
WHEREFORE, this petition for writ of prohibition is DENIED for lack of merit. The DECISION rendered by
the Court of Agrarian Relations in CAR Case No. 1038-P'70 is hereby SET ASIDE for lack of jurisdiction.
Petitioner is ordered to vacate the holding and surrender the same to private respondents. This
decision is immediately executory. Without pronouncement as to costs.
SO ORDERED.
Fernando (Chairman), Barredo, and Concepcion, Jr., JJ., concur.

Separate Opinions

AQUINO, J., concurring:

The river cannot rise higher than its source.

ANTONIO, J., concurring:

Tenancy relationship can only be created with the consent of the true and lawful landholder who is
either the owner, lessee, usufructuary or legal possessor of the land and not by a mere usurper or
intruder.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-19555

May 29, 1964

MATEO DE RAMAS, petitioner,

vs.
THE COURT OF AGRARIAN RELATIONS and GERONIMO B. RAMOS, respondents.
Carlos P. Torres for petitioner.
J. M. Dator and T. T. Riel for respondents.
LABRADOR, J.:
This is a petition for a writ of with prohibition to review and set aside a decision of the Court of
Agrarian Relations, Hon. Guillermo B. Santos, presiding, approving a petition of Geronimo B. Ramos,
tenant, against his landlord, Mateo de Ramas, for the change of their tenancy from share to leasehold
tenancy.
Respondent Geronimo B. Ramos is the tenant of herein petitioner Mateo de Ramas on a 2-1/2 hectare
land at Muzon Naic, Cavite, under a verbal share tenancy contract at 70-30. On June 22, 1960, or one
month before the beginning of the agricultural year 1960-1961, Ramos informed petitioner of his
desire to change their contract from that of share tenancy to leasehold tenancy. Petitioner refused to
grant the request insisting on the former 70-30 sharing basis, so on May 23, 1961 Ramos filed a
petition with the Court of Agrarian Relations praying that he be allowed to change their tenancy
contract from share to leasehold, in accordance with the provisions of Section 14 of Republic Act No.
1199, as amended. Petitioner opposed the petition as groundless and violating their gentleman's
agreement.
During the pendency of the case respondent Ramos moved to suspend the proceedings on the ground
that the constitutionality of Section 14 Republic Act No. 1199 has been raised, among other issues,
before the Supreme Court in the case of Juliano v. CAR, et al., G.R. No. L-17627, and that to continue
with the case would only result in loss of time, money, etc., if the Supreme Court declare Sec. 14 of
Republic Act No. 1199 unconstitutional. This motion was denied in an order dated September 22, 1961.
On December 14, 1961 Ramos presented his evidence; but Ramas waived the presentation of his
evidence, manifesting that he would appeal whatever decision the agrarian court might render. On
March 1, 1962, respondent court rendered judgment upholding the constitutionality of Sec. 14 of
Republic Act No. 1199, citing Our ruling in Pineda, et al. vs. Pingul and CIR, G.R. No. L-5565, September
30, 1952, where We upheld the constitutionality or validity of Act No. 4054, as amended by Com. Act
178 and Republic Act 34.
Against the above judgment the present petition is brought before Us, petitioner praying that after
proper hearing, Sec. 14 of Republic Act No. 1199 be declared unconstitutional and that the writ of
prohibition prayed for be granted.

Petitioner first questions the agrarian court's action in proceeding with the hearing of CAR Case No.
246, Cavite '61, deciding the same, and ordering execution of its decision despite, the pendency
before Us of a similar case raising the constitutionality of Sec. 14 of Republic Act No. 1199. We find no
error or irregularity in the court's proceeding with the case. The mere fact that the constitutionality of a
law is raised in another case pending in the Supreme Court is not a valid reason for suspending the
proceedings in this case. Laws are considered valid until declared unconstitutional, and until then
courts are in duty bound to enforce them. (Magtibay v. Alikpala, G.R. No. L-17590 and Juliano v. CAR,
G.R. No. L-17727, both promulgated on November 29, 1962.)
The present suit, specifically concerns the validity of Section 14 of the said Act which is as follows:
SEC. 14. Change of System. The tenant shall have the right to change the tenancy contract
from one of share tenancy to leasehold tenancy and vice versa and from one crop sharing
arrangement to another of the share tenancy. If the share tenancy contract is in writing and is
duly registered, the right to change from one crop sharing arrangement to another may be
exercised at least one month before the beginning of the next agricultural year after the
expiration of the period of the contract. In the absence of any registered written contract, the
right may be exercised at least one month before the agricultural year when the change shall
be effected. (As amended by Section 4, R.A. 2263.)
The above provision is attacked on the ground of unconstitutionality in that it impairs the obligation of
contracts, because after a contract of share tenancy has been adopted between the landlord and the
tenant, the latter is empowered, notwithstanding said contract, to change it into leasehold tenancy.
The question presented makes a review of tenancy laws useful in order to secure a correct perspective
of the issue.
The promotion of social justice and of the well-being and economic security of all the people is a
primary aim of the Constitution (Sec. 5, Art. 11). In line with this goal, the State encourages small
landholdings as against large estates (Article XII of the Constitution) and has taken upon itself the duty
to protect the agricultural laborer and to regulate the relations between him and the landowner. (Sec.
6, Art. XIV, id.)
Even before the approval of the Constitution the Legislature had already passed Act No. 4054, known
as the Philippine Rice Tenancy Act", approved February 27, 1933. The Act's aim is primarily to regulate
the relations between landlords and tenants. Freedom of tenancy contract is allowed so long as it is not
contrary to existing laws, customs, morals and public policy (Sec. 7). In the absence of contract the
crop is divided equally between the landlord and the tenants a system known as the share tenancy
(Sec. 8). The contract is to last according to the stipulation of the parties, and in its absence it shall be
in force only during one agricultural year. The landlord may not dismiss a tenant while a tenancy
contract is in force, except for any just and reasonable cause as enumerated in Section 19 of Act No.
4054.
On June 9, 1939, Commonwealth Act No. 461 was passed. This law further protects the security of
tenure of the tenant, and provides that the tenant may not be dispossessed of the land except for any
of the causes mentioned in Section 19 of Act No. 4054 and subject to the approval of a representative
of the Department of Justice (Sec. 1).
On September 30, 1946, Republic Act No. 34 was approved, amending certain sections of Act No. 4054
and providing for a sharing ratio between the landlord and the tenant, depending on which of them
furnishes the necessary implements and work animals and defrays all the expenses for planting and
cultivation (Sec. 3, Rep. Act No. 34, amending Sec. 8, Act No. 4054).
In the case of Tapang v. Court of Industrial Relations, 72 Phil. 79, the validity of Section 19 of Act No.
4054 (Sec. 19 provides that landlord may not dismiss tenant except for good pause) and of
Commonwealth Act No. 461 was questioned on the ground that they violate the constitutional
guarantee against impairment of contracts. Overruling this argument, the Supreme Court said:

El arguments de que la Ley No. 461 del Commonwealth es contraria a la Constitution porque
altera obligaciones contractuales, no tiene ningua fuerza, porque, ... la misma Constitution
manda que se debe "promoter la justicia social a fin de asegurara el bienestar y la estabilidad
economica de todo el pueblo," y que se debe protegee al mismo tiempo "a todos los
trabajadores, especialmente a las mujeres"; y no hay duda de que las dos mencionadas leves
tienden a licho fina, protegiendo al aparcero y al propietario por igual y estableciendo reglas
que han de determinar las relaciones que deben existing entre los dos para su propio
beneficio. (Per Pablo, J., Tapang v. CIR, supra)
The argument that the tenancy relationship had ceased after the expiration of the agricultural year
was declared by the Court to be without any validity because Section 26 of Act No. 4054, the basis of
said argument, must be understood to have been annulled or at least subject to the provisions of
Commonwealth Act No. 461 (ante) Said this Court:
"No obstante todo contrato o disposicion en contrario de cualquier ley vigente en todos los
casos en que un terreno es ocupado bajo un sistema cualquiera de aparceria no se ha de
desposeer alaparo del terreno cultivado porel mismo, in la aprobacion de un representante del
Departmento de Justicia debidamiente authorizado al efecto y como no sea por alguna de las
causes expresadas en al articulo diecinueva de la Ley Numero Cuatro mil cincuenta y cuatro o
por alguno otro motivo justificada." (Ibid.)
After the passage of the above laws the need was felt for an agency familiar with landlord-tenant
problems and capable of effectively enforcing existing laws. So, a special division of the Department of
Justice to act as compulsory arbiter was first set up; later the arbitration and litigation aspects of
tenancy cases were transferred to the Court of Industrial Relations whose docket was already clogged
with cases involving other labor legislation. Act No. 4054 left much to be desired. It is not of universal
application. Its principles were not in force throughout the Philippines, but only in localities where it
was adopted or where it was put into effect by presidential proclamation. (C.A. 178, Sec. 4; Iburan v.
Labes, 87 Phil. 234.) In other places, the standard of conduct laid down by Act No. 4054 was
inapplicable (De la Cruz v. Asociacion Zanjero Casilia; 83 Phil. 214). Even under the law oppressive
conditions under which tenants theretofore found themselves were practically left unremedied; they
still remained at the mercy of their landlords. 1wph1.t
The latest attempt to remedy the miserable plight of tenants came with the passage of Republic Act
No. 1199, otherwise known as the "Agricultural Tenancy Act of the Philippines," which repeals the old
Tenancy Act (Act No. 4054), Commonwealth Act No. 461, and various amendments of these laws. The
purpose of this Act, according to Section 2 thereof, is "to establish agricultural tenancy relations
between landholders and tenants upon the principle of social justice; to afford adequate protection to
the rights of both tenants and landlords; to insure an equitable division of the produce and income
derived from the land; to provide tenant farmers with incentives to greater and more efficient
agricultural production; to bolster their economic position and to encourage their participation in the
development of peaceful, vigorous and democratic rural communities."
Later on, or on June 14, 1955, Republic Act No. 1267 was passed creating the "Court of Agrarian
Relations", said to be a concomitant of the Agricultural Tenancy Act, and designed to provide the longneeded medium for deciding agricultural problems. (3 Philippine Annotated Laws, p. 72.)
A study of the Agricultural Tenancy Act (Rep. Act No. 1199) discloses that it is an improvement of its
predecessor Act 4054, as amended. Most of its provisions deal with the regulation of the relations of
the landlord and tenant (Secs. 6, 7, 8, 9), fixing of the share of each in the products of the land
cultivated by the tenant in general (Secs. 32, 33, 34, 35), the guaranteeing of the permanency of
tenure of the tenant and his heirs on the land he and his predecessors cultivate (Secs. 6, 7, 9, 49, 50,
51). Its most important provision is the protection of the tenant against exploitation by the landlord as
it prescribes the utilization by the landlord of the personal services of the tenant and the members of
his household without compensation (Sec. 23). It fixes interests on loans secured by the tenant from
the landlord and prescribes the payment of such loans from the share of the tenant in the harvest at
the current price, and requires the keeping of books of account showing the amounts received by the
tenant as loans from the landlord, etc. (Secs. 16, 18, 48.)

The above provisions are clearly an improvement of Act No. 4054. They are intended to protect tenants
from abuse and exploitation by their landlords. The validity of these provisions has not been
questioned as they clearly fall within the province of regulatory provisions enjoined expressly in the
Constitution (Art. XIV, Sec. 6). The provisions are clearly of apparent wisdom and validity, evidently not
subject to question as they do not appear to have ever been questioned in the short span of life of the
law (approved August 30, 1954).
The history of land tenancy, especially in Central Luzon, is a dark spot in the social life and history of
the people. It was among the tenants of Central Luzon that the late Pedro Abad Santos, acting as a
saviour of the tenant class, which for generations has been relegated to a life of bondage, without
hope of salvation or improvement, enunciated a form of socialism as a remedy for the pitiful condition
of the tenants of Central Luzon. It was in Central Luzon also that the tenants forming the PKM
organization of tenants and, during the war, the Hukbalahap, rose in arms against the constituted
authority as their only salvation from permanent thralldom. According to statistics, whereas at the
beginning of the century we had only 19% of the people belonging to the tenant class, after 60 years
of prevailing percentage has reached 39%. It is the desire to improve the condition of the peasant
class that must have impelled the Legislature to adopt the provisions as a whole of the Agricultural
Tenancy Act, and particularly Section 14 of said Act.
The section in question (See. 14, Rep. Act No. 1199) permits a tenant who has accumulated savings to
free himself from obtaining the usurious loans for expenses needed in plowing, harrowing, planting,
and harvesting. The tenant who has accumulated savings that would enable him to buy implements
and farm animals is allowed by the provision in question to free himself from the bondage of
permanent share tenancy by a change to lease-hold tenancy. The tenant who is used to cultivating
riceland cannot conceive of any form or manner in which he can invest his meager savings other than
by the purchase of farm implements and work animals. In other words, the only avenue left to him to
improve his lot is by permitting him to change his contract to tenancy from that of share system to
that of leasehold system. The increase that he receives in his share as a consequence of the change, is
only 5% (under the share system the landlord receives 30% and under leasehold he receives only 25%
if the land is first class, and 20% if the land is second class). But by the change the tenant is released
from the stranglehold of the landord, and becomes a semi-independent farmer. The provision in
question is certainly justified by the directive contained in the Constitution to do justice to labor. By the
change the laborer can improve his lowly lot. And if it cannot be justified as an act of social justice
enjoined in the Constitution, it may be considered as an exercise of the police power of the State,
which tries to improve the situation of a great percentage of the people and preserve the security of
the State against possible internal upheavals that the tenant class might be forced to create to
improve their lowly lot. The tenants uprising in Central Luzon from 1946 to 1952 must certainly have
been the main cause or reason for the enactment of the Agricultural Tenancy Act in 1954 and of the
particular section in question. The desire to improve the tenant class certainly has been impelled by
the necessity of insuring the internal security of the country, a paramount aim and end justifying the
exercise of the police power.
The legal question that is posed before Us is: Is the enactment of Section 14 of Republic Act No. 1199
in virtue of the police power of the State limited by the fact that it violates a contractual right (existing
in favor of the defendant-appellant in this case) ? The general rule has been stated thus:
A police regulation, obviously intended as such, and not operating unreasonably beyond the
occasions of its enactment, is not rendered invalid by the fact that it may affect incidentally
the exercise of some right guaranteed by the Constitution. For example, it is said that the
proper exercise of the police power is not subject to restraint by constitutional provisions
designed for the general protection of rights of individual life, liberty and property. (11 Am. Jur.
991-992)
Is Section 14 of Republic Act No. 1199 legally justified in impairing the obligation of an existing
contract between the tenant and the landlord? The answer to this is again stated as follows:
The constitutional prohibition against state laws impairing the obligation of contracts does not
restrict the power of the state to protect the public health, the Public morals, or the public
safety. One or more of these factors may be involved in the execution of such contracts. Rights

and privileges arising from contracts are subject to regulations for the protection of the public
health, the public morals, and the public safety, in the same sense and to the same extent as
is all property, whether owned by natural persons or corporations. Not all police legislation
which has the effect of impairing a contract is obnoxious to the constitutional prohibition as to
impairment. (Ibid., pp. 1000-1001).
Obligations of contracts must yield to a proper exercise of the police power when such power is
exercised, as in this case, to preserve the security of the State and the means adopted are reasonably
adapted to the accomplishment of that end and are not arbitrary or oppressive. (11 Am. Jur. 10021003.)
The right granted to the tenant to change the contract from share tenancy to that of leasehold tenancy
can not be considered unreasonable or oppressive, because by the landlord's giving up of 5% of the
harvest (the change from share to leasehold tenancy reduces the landlord's share from 30% to 25%),
the tenant becomes, more responsible, more competent, and financially prepared to comply with his
obligations under the lease, to the ultimate benefit of the landlord, with the consequent improvement
of a lot of a big segment of the population and thereby giving full meaning to the social justice
directive contained in the Constitution.
WHEREFORE, in view of the above considerations, We hold the disputed Section 14 of Republic Act No.
1199 constitutional and valid. The judgment appealed from is affirmed. Without costs.
Bautista
Angelo,
Concepcion,
Regala and Makalintal, JJ., took no part.

Reyes,

J.B.L.

and

Barrera,

JJ.,

concur.

Separate Opinions
BENGZON, C.J., concurring:
Without voting on the constitutional question, I concur in the result. According to the Agrarian Court's
decision (p. 4), Ramos became the tenant of Ramas (Mateo de) sometime in 1959 or 1958, when
Republic Act 1199 was already in force, and was consequently deemed to be a part of their contract of
tenancy. So the landowner may not now be heard to complain about impairment of the contract.

FIRST DIVISION

[G.R. No. 103103. June 17, 1996]

ENRIQUE P. SUPLICO, LOLITA T. SUPLICO, ENRIQUE T. SUPLICO, JR., and DAVID T. SUPLICO,
petitioners, vs. HON. COURT OF APPEALS and FEDERICO ARMADA, respondents.
DECISION
VITUG, J.:
For review in the instant petition is the 29th November 1991 decision [1] of the Court of Appeals
affirming that of the Regional Trial Court of Negros Occidental, Branch 54, [2] Bacolod City, in CAR Case
No. 109, which has declared private respondent Federico Armada to be a bona fide agricultural lessee,
instead of a mere farm laborer, of Isabel D. Tupas in Barangay Taloc, Bago City.

Isabel Tupas was the registered owner of a parcel of rice land, designated Lot No. 901-B-1, with an
area of 120,000 square meters (12 hectares), in Taloc, Bago City, under TCT No. T-26014. [3] On 24
February 1977, she leased her landholding, excluding the 33,438-square-meter portion already
tenanted by one Jose Jacinto, for the amount of P10,000.00 to petitioner Enrique P. Suplico, her
brother-in-law, under a contract that was set to expire on 31 May 1982. [4]
Some time in 1979, Armada started tilling an area of 32,945 square meters, identified to be Lot
No. 901-B-1-D, [5] of the farmland under an agreement with Enrique Suplico. Armada undertook to till
the land while Suplico agreed to provide the farm implements and work animals. Suplico was to
receive from Armada 62 cavans from the palay harvest per crop yield by way of rental for the use not
only of the land but also of the work animals and a hand tractor. [6] Private respondent resided with his
family in a farmhouse on the land.
When, years later, Suplico threatened to eject Armada from the property, Armada initiated, on 03
May 1982, an action for damages and injunction against Suplico in the Court of Agrarian Relations
(CAR) in Bacolod City.[7] The complaint averred that Armada was the tenant-farmer of around 2.5
hectares of the property of Isabel Tupas having been instituted as such tenant in 1979 by her
administrator, herein petitioner Enrique Suplico, to whom he religiously paid the fixed rental of 62
cavans of palay per crop yield.
An order was issued by the CAR meanwhile restraining Suplico, his agents and representatives,
from harassing, molesting, threatening, and committing acts of dispossession against, Armada. [8]
In his answer with counterclaim, Suplico interposed the special defense that Armada was not a
tenant-farmer but a seasonal hired farm laborer with a fixed compensation, and that his services could
be terminated anytime before or, at the worst case, upon the expiration of their contract in May
1982. Suplico added that Armada unlawfully appropriated for himself the whole produce of the first
yield for the crop year 1982-83.[9]
On 14 February 1983, Isabel Tupas, represented by her attorney-in- fact Lolita T. Suplico (sister of
Isabel and the wife of Enrique P. Suplico), intervened in the case. She alleged that she had no
contractual relationship with Armada nor did she impliedly tolerate his continued possession of the
land. She prayed that Armada be ejected from her landholding. [10] On even date, Isabel Tupas filed a
complaint for ejectment against Armada and his wife, Leticia, in the Municipal Trial Court (MTC) of Bago
City.[11] The complaint, however, was dismissed on 15 May 1985 for lack of jurisdiction, [12] following the
certification issued by the Regional Director of the then Ministry of Agrarian Reform, Region VI, Iloilo
City, that the case was not proper for trial and hearing by the MTC on account of the existence of
tenancy over the land involved.
On 28 June 1984, the complaint for damages and injunction was referred by the trial court [13] to
the Ministry of Agrarian Reform (MAR) for a summary determination of the relationship of the parties,
as well as for a certification on whether or not the case was proper for trial, in accordance with
Memorandum Circular No. 29 of the MAR, implementing P.D. No. 316 [14] in conjunction with P.D. No. 27.
[15]
The trial of the case resumed after the MAR Director for Region 6, Iloilo City, had certified that the
case was proper for trial and hearing.[16]
On 28 March 1987, Isabel Tupas donated the whole property to her sister, Lolita T. Suplico, and her
nephews, Enrique Suplico, Jr., and David Suplico. On 17 May 1988, she moved to be dropped as
intervenor and asked that her donees of the property be instead named as substitutes.
Finally, on 18 January 1990, the trial court rendered its decision declaring private respondent
a bona fide agricultural lessee. The dispositive portion of the decision stated:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:
1. Declaring plaintiff FEDERICO ARMADA a bona fide agricultural lessee of the landholding in question
with an area of two and a half (2 1/2) hectares more or less belonging to the intervenors;
2. Permanently enjoining the defendant/intervenors from ejecting or removing plaintiff from his
landholding aforementioned situated in sitio Langka, Brgy. Taloc, Bago City;

3. Ordering the plaintiffs to pay to the defendant/intervenors two hundred fifty-four (254) cavans of
palay as back rentals or their money equivalent, less whatever amount may have been paid or
deposited with the court after this date; and
4. Dismissing all other claims and counterclaims for damages for lack of and/or insufficiency of
evidence.
So Ordered.[17]
The contending parties all appealed the decision to the Court of Appeals.
The Court of Appeals, on 29 November 1991, affirmed the decision of the court a quo and
considered Armada to be a share tenant.
The instant petition, in main, raises the sole issue of whether or not private respondent Armada
should be held a tenant farmer entitled to security of tenure or a mere hired farm laborer.
The Court sees no reason to disturb the findings of both courts below. The facts found by the
appellate court, sustaining the court a quo, readily converge towards one conclusion, and it is that
tenancy did exist between the parties.
Firstly, private respondent was in actual possession of the land, [18] and he there resided, with his
family, in a farmhouse just like what a farm tenant normally would. [19] Secondly, private respondent
and his wife were personally doing the farm work of plowing, planting, weeding and harvesting the
area. The occasional and temporary hiring of persons outside of the immediate household, so long as
the tenant himself had control in the farmwork, was not essentially opposed to the status of tenancy.
[20]
Thirdly, the management of the farm was left entirely to private respondent who defrayed the
cultivation expenses.[21] Fourthly, private respondent shared the harvest of the land, depositing or
delivering to petitioner Enrique Suplico the agreed 62 cavans of palay per crop yield. Jesus Mesias, the
licensed ricemiller of Taloc, attested to Suplico's having received from private respondent the cash
value of the rental payments from the first crop of 1979 and each crop thereafter up to the first crop of
1983, inclusive.[22] The rental payments made thereafter were received by petitioner Lolita Suplico,
[23]
court appointed police officers, [24] or the barangay captain.[25]
Parenthetically, during the pendency of this appeal, the Secretary of Agrarian Reform has issued
an emancipation patent denominated Transfer Certificate of Title No. EP-2064 in the name of private
respondent over 26,622 square meters of Lot No. 901-B-1-C-2-B, Bsd-06-002040, of the operation land
transfer. In a pleading, dated 01 December 1994, [26] petitioners point to anomalies supposedly
attending the issuance of TCT No. EP-2064. Regrettably, these allegations are matters that should first
be ventilated and tried, not here, but in the proper forum.
WHEREFORE, the instant petition for review on certiorari is DENIED. No costs.
SO ORDERED.
Padilla, Kapunan, and Hermosisima, Jr., JJ., concur.
Bellosillo, J., took no part.