FIRST DIVISION

[G.R. No. 168164 : July 05, 2010]

VICENTE ADRIANO, PETITIONER, VS. ALICE TANCO, GERALDINE TANCO, RONALD TANCO, AND PATRICK TANCO, RESPONDENTS.

DECISION

DEL CASTILLO, J.:

Laws which have for their object the preservation and maintenance of social justice are not only meant to favor the poor and the
underprivileged.  They apply with equal force to those who, notwithstanding their more comfortable position in life, are equally
deserving of protection from the courts.  Social justice is not a license to trample on the rights of the rich in the guise of defending
the poor, where no act of injustice or abuse is being committed against them. [1]

This Petition for Review on Certiorari assails the October 12, 2004 Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 74465
which reversed and set aside the June 17, 1998 Decision [3] of the Department of Agrarian Reform Adjudication Board (DARAB). The
DARAB Decision affirmed the Decision[4] of the Provincial Agrarian Reform Adjudicator (PARAD) which declared and recognized
petitioner Vicente Adriano (Vicente) as tenant/lessee of the landholding subject matter of this case.  Also assailed is the May 4, 2005
Resolution denying the motion for reconsideration

Factual Antecedents

On December 18, 1975, respondent Alice Tanco (Alice) purchased a parcel of land consisting of 28.4692 hectares located in
Norzagaray, Bulacan.[5]  The land was devoted to mango plantation.  Later on, it was partitioned among the respondents (Alice and
her three children, namely, Geraldine, Ronald, and Patrick), each receiving 7 hectares, except Alice who got an extra 0.4692 hectare.

Controversy arose when Alice sent to Vicente a letter [6] dated January 16, 1995 informing him that subject landholding is not covered
by the Comprehensive Agrarian Reform Program (CARP).  She asked him to vacate the property as soon as possible.

Proceedings before the PARAD

Seeing the letter of Alice as a threat to his peaceful possession of subject farmland which might impair his security of tenure as a
tenant, Vicente filed before the regional office of DARAB in Region III a Complaint for Maintenance of Peaceful Possession with
Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction. [7]  He averred that in 1970, Arsenio Tanco (Arsenio),
[8]
 the husband of Alice, instituted him as tenant-caretaker of the entire mango plantation.  Since then, he has been performing all
phases of farm works, such as clearing, pruning, smudging, and spraying of the mango trees.  The fruits were then divided equally
between them.  He also alleged that he was allowed to improve and establish his home at the old building left by Ang Tibay Shoes
located at the middle of the plantation.  Presently, he is in actual possession of and continues to cultivate the land.

In their Answer,[9] respondents denied having instituted any tenant on their property.  They stressed that Vicente never worked and
has no employer-employee relationship with Geraldine, Ronald, and Patrick.  Insofar as Alice is concerned, respondents asserted
that Vicente is not a tenant but a mere regular farm worker.  They claimed that in April 1994 and April 1995, upon the intercession of
the Municipal Agrarian Reform Officer (MARO), Alice agreed to avail the services of Vicente for the specific purpose of spraying the
mango trees.  In consideration thereof, Alice also agreed to pay Vicente an amount equivalent to 50% of the produce, which was
then the prevailing practice in Bulacan. Respondents maintained that Alice agreed to this setup since the MARO made it clear to
both parties that the contract was for the specific purpose of spraying the mango trees only and that the same will not ripen into
tenancy relationship.

Respondents likewise alleged that it was impossible for the late Arsenio to institute Vicente as tenant in 1970 since the Tanco family
acquired the mango plantation from Manufacturers Bank & Trust Co. only in December 1975.

On April 23, 1996, the PARAD rendered a Decision [10] in favor of Vicente.  It opined that since Vicente was performing functions more
than just a mere caretaker and was even allowed to live in subject landholding with his family, he is therefore a tenant.  The
dispositive portion of the PARAD's Decision reads:

WHEREFORE, premises considered, judgment is hereby rendered:

(1) Declaring and recognizing plaintiff Vicente Adriano as tenant/lessee of subject landholding;

(2) Ordering the MARO of Norzagaray to cause the preparation of an Agricultural Leasehold Contract between the plaintiff and the
defendants;

(3) Plaintiff must be maintained in peaceful possession and cultivation of the landholding.

SO ORDERED.[11]

Respondents moved for reconsideration which was denied. [12]

Proceedings before the DARAB

Thus, respondents appealed to the DARAB which affirmed the ruling of the PARAD.  It held that since the landholding is an
agricultural land, that respondents allowed Vicente to take care of the mango trees, and that they divided the fruits equally between
them, then an implied tenancy was created.
Proceedings before the CA

Twice rebuffed but still undeterred, respondents elevated the case to the CA via a Petition for Review[13] under Rule 43 of the Rules
of Court.  They contended, among others, that the essential elements of tenancy relationship are wanting in the instant
controversy.  They claimed that their property is not an agricultural land, but lies within a mineralized area; Alice hired Vicente as a
caretaker and, therefore, the nature of their relationship is that of an employer-employee relationship; and, there is no proof that
the parties share in the harvest.  With regard to DARAB's theory of implied lease, respondents maintained that they never
authorized Vicente to spray the mango trees.  Respondents insisted that Alice agreed to engage the services of Vicente for the
specific purpose of spraying the mango trees in 1994 and 1995 for humanitarian reasons in order to recompense him for the
expenses he had already spent for the unauthorized spraying. The agreement was made upon the intercession of the MARO, who
emphasized that the same would not ripen into tenancy relationship.br>
Respondents further contended that, if at all, Vicente's claim should be limited to the property assigned to Alice because she was the
only one who hired him as a caretaker.  In fact, he had been consistently receiving a monthly salary as a hired caretaker, as well as
bonuses, as shown by several cash vouchers[14] attached to their petition.  Furthermore, it is impossible for Vicente, who is already
old, to personally cultivate the entire 28.4692 hectares of land all by himself.

Impressed with respondents' arguments, the CA rendered a Decision in their favor.  Thus:

Prescinding from the foregoing premises, the instant petition is GRANTED.  The Decision dated 18 June 1998 and the Resolution
dated 28 November 2002 of the Department of Agrarian Reform Adjudication Board (DARAB) are hereby REVERSED and SET ASIDE,
and another judgment is entered, declaring respondent Vicente Adriano NOT a tenant of respondents Alice K. Tanco [TCT-No. T-
93.233 (M)-7.4692 hectares], Geraldine Tanco [TCT No. 93.230 (M)-7 hectares], Ronald Tanco [TCT No. T-93.232 (M)-7 hectares], and
Patrick Tanco [TCT No. T-93.231 (M)-7 hectares], whose subject landholdings are all located at San Mateo, Norzagaray, Bulacan,
respondent being a mere employee or hired caretaker/overseer/worker of petitioner Alice K. Tanco with respect to her property in
question, covering 7.4692 hectares, and thus respondent is NOT entitled to security of tenure under the Comprehensive Agrarian
Reform Law (Republic Act No. 6657).

Costs against respondent.

SO ORDERED.[15]

Vicente sought reconsideration, which the CA denied in its May 4, 2005 Resolution. [16]

Issues

Hence, this petition. From the parties' exchange of pleadings, it appears that the fundamental issues to be resolved in this petition in
the order of their importance are as follows:

WHETHER THE ISSUES RAISED BY THE PETITIONER ARE QUESTIONS OF LAW WHICH CAN BE REVIEWED BY THE SUPREME COURT. [17]

II

WHETHER THE FINDINGS OF THE PARAD AND THE DARAB THAT VICENTE IS A BONA FIDE TENANT IS SUPPORTED BY SUBSTANTIAL
EVIDENCE. [18]

Our Ruling

This case falls under the exceptions

where the Supreme Court may review
factual issues.

Respondents, who put forward the first issue, contend that Vicente is actually raising factual issues which is not allowed in a petition
for review on certiorari filed under Rule 45 of the Rules of Court.  They maintain that under Rule 45, only questions of law may be
raised as issues and resolved by this Court.

Vicente, on the other hand, concedes that the issues set forth in his petition are not questions of law. Nevertheless, he counter-
argues that this case falls under the exceptions where this Court may pass upon questions of fact.

We agree with Vicente. The determination of whether a person is an agricultural tenant is basically a question of fact. [19]  And, as a
general rule, questions of fact are not proper in a petition filed under Rule 45. [20]  But since the findings of facts of the DARAB and the
CA contradict each other, it is crucial to go through the evidence and documents on record as a matter of exception [21] to the rule.[22]

The findings of the agrarian tribunals

that tenancy relationship exists are not
supported by substantial evidence.

Vicente posits that the CA erred in substituting its own findings with the unanimous findings of the PARAD and the DARAB.  He
asserts that factual findings of administrative agencies are entitled to great respect and even finality since they have acquired
expertise on the field for which they were created.  The only requirement is that said findings must be supported by substantial
evidence. Vicente believes that the findings of the agrarian tribunals are supported by substantial evidence since he did not observe
regular working hours, handles all phases of farm works, and lives in an old building located at the middle of the plantation.
We are not persuaded.

Tenancy relationship is a juridical tie which arises between a landowner and a tenant once they agree, expressly or impliedly, to
undertake jointly the cultivation of a land belonging to the landowner, as a result of which relationship the tenant acquires the right
to continue working on and cultivating the land. [23]

The existence of a tenancy relationship cannot be presumed and allegations that one is a tenant do not automatically give rise to
security of tenure.[24]  For tenancy relationship to exist, the following essential requisites must be present: (1) the parties are the
landowner and the tenant; (2) the subject matter is agricultural land; (3) there is consent between the parties; (4) the purpose is
agricultural production; (5) there is personal cultivation by the tenant; and, (6) there is sharing of the harvests between the parties.
[25]
  All the requisites must concur in order to establish the existence of tenancy relationship, and the absence of one or more
requisites is fatal.[26]

After a thorough evaluation of the records of this case, we affirm the findings of the CA that the essential requisites of consent and
sharing are lacking.

The essential element of consent is sorely missing because there is no proof that the landowners recognized Vicente, or that they
hired him, as their legitimate tenant.  And, although Vicente claims that he is a tenant of respondents' agricultural lot in Norzagaray,
Bulacan, and that he has continuously cultivated and openly occupied it, no evidence was presented to establish the presence of
consent other than his self-serving statements. These cannot suffice because independent and concrete evidence is needed to prove
consent of the landowner.[27]

Likewise, the essential requisite of sharing of harvests is lacking.  Independent evidence, such as receipts, must be presented to
show that there was sharing of the harvest between the landowner and the tenant. [28]  Self-serving statements are not sufficient.[29]

Here, there was no evidence presented to show sharing of harvest in the context of a tenancy relationship between Vicente and the
respondents.  The only evidence submitted to establish the purported sharing of harvests were the allegations of Vicente which, as
discussed above, were self-serving and have no evidentiary value.  Moreover, petitioner's allegations of continued possession and
cultivation do not support his cause.  It is settled that mere occupation or cultivation of an agricultural land does not automatically
convert a tiller or farm worker into an agricultural tenant recognized under agrarian laws. [30]  It is essential that, together with the
other requisites of tenancy relationship, the agricultural tenant must prove that he transmitted the landowner's share of the
harvest.[31]

Neither can we agree with the DARAB's theory of implied tenancy because the landowner never acquiesced to Vicente's cultivating
the land.  Besides, for implied tenancy to arise it is necessary that all the essential requisites of tenancy must be present. [32]

Lastly, it is well to stress that Vicente has the burden of proving his affirmative allegation of tenancy. It is elementary that he who
alleges the affirmative of the issue has the burden of proof.  And if the petitioner upon whom rests the burden of proving his cause
of action fails to show in a satisfactory manner the facts upon which he bases his claim, the respondents are under no obligation to
prove their exception or defense.  In the case at bench, aside from being self-serving, some of the allegations of Vicente are
contradicted by the evidence on record.  While he claims that Arsenio instituted him as tenant in 1970 and has since then occupied
and cultivated respondents' landholdings, the Deed of Absolute Sale presented by the latter indubitably shows that Alice (or the
Tanco family) acquired the same only in 1975.

WHEREFORE, the instant petition is DENIED.  The assailed October 12, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 74465
declaring petitioner Vicente Adriano not a tenant of the respondents and thus not entitled to security of tenure under the
Comprehensive Agrarian Reform Law, and the May 4, 2005 Resolution denying the motion for reconsideration are AFFIRMED.

SO ORDERED.

Corona, C.J., (Chairperson), Velasco, Jr., Leonardo-De Castro, and Perez, JJ., concur.

SECOND DIVISION

G.R. No. 175098, August 26, 2015

ISMAEL V. CRISOSTOMO, Petitioner, v. MARTIN P. VICTORIA, Respondent.

DECISION

LEONEN, J.:

This resolves a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure praying that the July 31, 2006
Decision1 and the October 20, 2006 Resolution2 of the Court of Appeals Eighth Division in CA-G.R. SP No. 94107 be reversed and set
aside, and that the April 4, 2005 Decision 3 and March 17, 2006 Resolution4 of the Department of Agrarian Reform Adjudication Board
be reinstated.

The assailed July 31, 2006 Decision of the Court of Appeals reversed and set aside the April 4, 2005 Decision and March 17, 2006
Resolution of the Department of Agrarian Reform Adjudication Board. It recognized respondent Martin P. Victoria (Victoria) as the
bona fide tenant of a parcel of riceland owned by petitioner Ismael V. Crisostomo (Crisostomo). The assailed October 20, 2006
Resolution of the Court of Appeals denied Crisostomo's Motion for Reconsideration.
The April 4, 2005 Decision and March 17, 2006 Resolution of the Department of Agrarian Reform Adjudication Board sustained the
April 7, 2003 Decision5 of the Office of the Provincial Agrarian Reform Adjudicator of Bulacan, which ruled in favor of Crisostomo in
his action to eject Victoria from the subject riceland.

In a Complaint for Ejectment filed before the Office of the Provincial Agrarian Reform Adjudicator of Bulacan, Crisostomo alleged
that he, along with his deceased brother Jose Crisostomo, were the registered owners of a parcel of riceland with an area of 562,694
square meters. This was covered by Transfer Certificate of Title No. T-68421 and located in Sta. Barbara, Baliuag, Bulacan. On June
21, 1973, he and his brother allegedly entered into a lease contract with David Hipolito (Hipolito) over a portion of the riceland
(disputed portion). The contract was supposedly in effect until Hipolito's death on December 2, 1999. As Hipolito died without any
known heirs, Crisostomo was set to reclaim possession and to take over cultivation of the disputed portion. However, in January
2000, Victoria entered the disputed portion and began cultivating it without the knowledge and consent of Crisostomo. Crisostomo
confronted Victoria, who insisted that he had tenancy rights over the disputed portion. 6

In his Answer, Victoria claimed that Hipolito was his uncle. He alleged that even during the lifetime of Hipolito, it was he who was
doing farmwork on the disputed portion and that he did so with Crisostomo's knowledge. He added that from the time Hipolito
became bedridden, it was he who performed all duties pertaining to tenancy, including the delivery of lease rentals and
corresponding shares in the harvest to Crisostomo. He asserted that Crisostomo's act of receiving lease rentals from him amounted
to implied consent, which gave rise to a tenancy relationship between them. 7

In its April 7, 2003 Decision,8 the Office of the Provincial Agrarian Reform Adjudicator of Bulacan ruled in favor of Crisostomo and
ordered Victoria, together with all persons claiming rights under him, to vacate the disputed portion and surrender its possession to
Crisostomo.9

The Office of the Provincial Agrarian Reform Adjudicator, noting that the essential element of consent was absent, held that Victoria
could not be deemed the tenant of the disputed portion. It further held that implied tenancy could not arise in a situation where
another person is validly instituted as tenant and is enjoying recognition as such by the landowner. 10

In its April 4, 2005 Decision,11 the Department of Agrarian Reform Adjudication Board denied Victoria's Appeal. In its March 17, 2006
Resolution,12 it denied Victoria's Motion for Reconsideration.

In its assailed July 31, 2006 Decision,13 the Court of Appeals Eighth Division reversed the rulings of the Office of the Provincial
Agrarian Reform Adjudicator of Bulacan and of the Department of Agrarian Reform Adjudication Board. It recognized Victoria as
bona fide tenant of the disputed portion.

The Court of Appeals reasoned that "Hipolito, as the legal possessor, could legally allow [Victoria] to work and till the
landholding"14 and that Crisostomo was bound by Hipolito's act. It added that Crisostomo "had been receiving his share of the
harvest from [Victoria], as evidenced by the numerous receipts indicating so." 15 It emphasized that "[t]he receipts rendered beyond
dispute [Victoria's] status as the agricultural tenant on the landholding." 16 It further noted that as an agricultural tenant, Victoria was
entitled to security of tenure who, absent any of the grounds for extinguishing agricultural leasehold relationships, "should not be
deprived of but should continue his tenancy on the landholding." 17

In its assailed October 20, 2006 Resolution,18 the Court of Appeals Eighth Division denied Crisostomo's Motion for Reconsideration.

Hence, this Petition was filed.

For resolution is the issue of whether respondent Martin P. Victoria is a bona fide tenant of the disputed portion.

Section 6 of Republic Act No. 3844, otherwise known as the Agricultural Land Reform Code, identifies the recognized parties in an
agricultural leasehold relation:chanRoblesvirtualLawlibrary
SECTION 6. Parties to Agricultural Leasehold Relation. — The agricultural leasehold relation shall be limited to the person who
furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally
cultivates the same.ChanRoblesVirtualawlibrary
Proceeding from Section 6 of the Agricultural Land Reform Code, the Court of Appeals capitalized on Hipolito's supposed status as
"legal possessor" of the disputed portion, a status that was deemed to emanate from his having been the lessee. Thus, the Court of
Appeals concluded that "Hipolito, as the legal possessor, could legally allow [respondent] to work and till the landholding" 19 thereby
making respondent a tenant whose security of tenure petitioner must now respect.

The Court of Appeals is in error. Hipolito's status as the acknowledged tenant did not clothe him with the capacity to designate
respondent as a tenant.

This court has settled that tenancy relations cannot be an expedient artifice for vesting in the tenant rights over the landholding
which far exceed those of the landowner. It cannot be a means for vesting a tenant with security of tenure, such that he or she is
effectively the landowner.

Even while agrarian reform laws are pieces of social legislation, landowners are equally entitled to protection. In Calderon v. Dela
Cruz:20
It is true that RA 3844 is a social legislation designed to promote economic and social stability and must be interpreted liberally to
give full force and effect to its clear intent. This liberality in interpretation, however, should not accrue in favor of actual tillers of the
land, the tenant- farmers, but should extend to landowners as well. . . . The landowners deserve as much consideration as the
tenants themselves in order not to create an economic dislocation, where tenants are solely favored but the landowners become
impoverished.21 (Emphasis supplied, citation omitted)ChanRoblesVirtualawlibrary
In Valencia v. Court of Appeals,22 this court grappled with the consequences of a lessee's employment of farmhands who
subsequently claimed the status of tenants. Insisting on a tenant's right to security of tenure, these farmhands refused to vacate and
surrender possession of the subject land despite the landowner's demands:chanRoblesvirtualLawlibrary
Contrary to the impression of private respondents, Sec. 6 of R.A. No. 3844, as amended, does not automatically authorize a civil law
lessee to employ a tenant without the consent of the landowner. The lessee must be so specifically authorized. For the right to hire
a tenant is basically a personal right of a landowner, except as may he provided by law. But certainly nowhere in Sec. 6 does it say
that a civil law lessee of a landholding is automatically authorized to install a tenant thereon. A different interpretation would create
a perverse and absurd situation where a person who wants to be a tenant, and taking advantage of this perceived ambiguity in the
law, asks a third person to become a civil law lessee of the landowner. Incredibly, this tenant would technically have a better right
over the property than the landowner himself. This tenant would then gain security of tenure, and eventually become owner of the
land by operation of law. This is most unfair to the hapless and unsuspecting landowner who entered into a civil law lease
agreement in good faith only to realize later on that he can no longer regain possession of his property due to the installation of a
tenant by the civil law lessee.

On the other hand, under the express provision of Art. 1649 of the Civil Code, the lessee cannot assign the lease without the consent
of the lessor, unless there is a stipulation to the contrary. In the case before us, not only is there no stipulation to the contrary; the
lessee is expressly prohibited from subleasing or encumbering the land, which includes installing a leasehold tenant thereon since
the right to do so is an attribute of ownership. Plainly stated therefore, a contract of civil law lease can prohibit a civil law lessee
from employing a tenant on the land subject matter of the lease agreement. An extensive and correct discussion of the statutory
interpretation of Sec. 6 of R.A. No. 3844, as amended, is provided by the minority view in Bernas v. Court of Appeals.23 (Emphasis
supplied)ChanRoblesVirtualawlibrary
As explained in Valencia, Section 6 of the Agricultural Land Reform Code was not designed to vest in the enumerated persons—the
owner, civil law lessee, usufructuary, or legal possessor—a capacity that they did not previously have. Stated otherwise, Section 6
was not the enabling legislation that, from the moment of its adoption, was to "allow" 24 them, as the Court of Appeals posits, to
furnish landholding to another who shall personally cultivate it, thereby making that other person a tenant.

Valencia explained that Section 6 of the Agricultural Land Reform Code is a subsequent restatement of a "precursor" 25 provision:
Section 8 of Republic Act No. 1199. This precursor reads:chanRoblesvirtualLawlibrary
SECTION 8. Limitation of Relation. — The relation of landholder and tenant shall be limited to the person who furnishes land, either
as owner, lessee, usufructuary, or legal possessor, and to the person who actually works the land himself with the aid of labor
available from within his immediate farm household.ChanRoblesVirtualawlibrary
Valencia noted that Section 8 assumed a pre-existing tenancy relation. From its epigraph "Limitation of Relation," the import and
effect of Section 8 is not to enable or (to use the word of the Court of Appeals) to "allow" the persons enumerated to make a tenant
of another person. Rather, it is simply to settle that whatever relation exists, it shall be limited to two persons only: first, the person
who furnished the land; and second, the person who actually works the land. "Once the tenancy relation is established, the parties
to that relation are limited to the persons therein stated." 26

As it was with the precursor, Section 8 of Republic Act No. 1199, so it is with Section 6 of the Agricultural Land Reform
Code:chanRoblesvirtualLawlibrary
Section 6 as already stated simply enumerates who are the parties to an existing contract of agricultural tenancy, which presupposes
that a tenancy already exists. It does not state that those who furnish the landholding, i.e., either as owner, civil law lessee,
usufructuary, or legal possessor, are automatically authorized to employ a tenant on the landholding. The reason is obvious. The civil
lease agreement may be restrictive. Even the owner himself may not be free to install a tenant, as when his ownership or possession
is encumbered or is subject to a lien or condition that he should not employ a tenant thereon. This contemplates a situation where
the property may be intended for some other specific purpose allowed by law, such as, its conversion into an industrial estate or a
residential subdivision.27ChanRoblesVirtualawlibrary
Limiting the relation to these two persons, as well as preventing others from intruding into this relation, is in keeping with the
rationale for adopting Section 6 of the Agricultural Land Reform Code:chanRoblesvirtualLawlibrary
According to Mr. Justice Guillermo S. Santos and CAR Executive Judge Artemio C. Macalino, respected authorities on agrarian
reform, the reason for Sec. 6 of R.A. No. 3844 and Sec. 8 of R.A. No. 1199 in limiting the relationship to the lessee and the lessor is to
"discourage absenteeism on the part of the lessor and the custom of co-tenancy" under which "the tenant (lessee) employs another
to do the farm work for him, although it is he with whom the landholder (lessor) deals directly. Thus, under this practice, the one
who actually works the land gets the short end of the bargain, for the nominal or 'capitalist' lessee hugs for himself a major portion
of the harvest." This breeds exploitation, discontent and confusion. . . . The kasugpong, kasapi, or katulong also works at the
pleasure of the nominal tenant. When the new law, therefore, limited tenancy relation to the landholder and the person who
actually works the land himself with the aid of labor available from within his immediate farm household, it eliminated the nominal
tenant or middleman from the picture.

Another noted authority on land reform, Dean Jeremias U. Montemayor, explains the rationale for Sec. 8 of R.A. No. 1199, the
precursor of Sec. 6 of R.A. No. 3844:chanRoblesvirtualLawlibrary
Since the law establishes a special relationship in tenancy with important consequences, it properly pinpoints the persons to whom
said relationship shall apply. The spirit of the law is to prevent both landholder absenteeism and tenant absenteeism. Thus, it would
seem that the discretionary powers and important duties of the landholder, like the choice of crop or seed, cannot be left to the will
or capacity of an agent or overseer, just as the cultivation of the land cannot be entrusted by the tenant to some other people.
Tenancy relationship has been held to be of a personal character. 28 (Citations omitted)ChanRoblesVirtualawlibrary
The Court of Appeals banks on the following statement made by this court in its 1988 Decision in Co v. Intermediate Appellate
Court:29
As long as the legal possessor of the land constitutes a person as a tenant-farmer by virtue of an express or implied lease, such an
act is binding on the owner of the property even if he himself may not have given his consent to such an arrangement. This is settled
jurisprudence. The purpose of the law is to protect the tenant-farmer's security of tenure, which could otherwise be arbitrarily
terminated by an owner simply manifesting his non-conformity to the relationship. 30 (Citation omitted)ChanRoblesVirtualawlibrary
However, the factual context in Co, which engendered the quoted pronouncement, is not entirely identical with that of this case.
This statement should, thus, not be taken as binding in this case.
Co involved a parcel which was originally owned by Toribio Alarcon. Sometime before the Second World War, Alarcon entered into a
tenancy relation with Miguel Alfonso. In 1955, Alarcon leased out the same parcel to Republic Broadcasting System (DZBB). During
this time, Alfonso maintained his tenancy. In 1968, Joveno Roaring started helping Alarcon cultivate the land. Subsequently, Roaring
took over the cultivation "in his own right." 31 Roaring's status as such was consolidated when, with Alfonso's death in 1976, he took
over the tenancy. Much later, the parcel was acquired by Philippine Commercial and Industrial Bank in a foreclosure sale. The parcel
was then acquired by Anderson Co and, still much later, by Jose Chua. As Co and Chua asked Roaring to vacate the parcel, Roaring
filed a Complaint for maintenance of possession and damages. 32

The statement from Co that the Court of Appeals quoted was made in the course of this court's consideration of Roaring's relation
with DZBB. As this court recounted, DZBB was the party receiving shares from the harvest. Thus, DZBB exercised and benefitted from
the rights and prerogatives that normally accrue to the landowner. Stated otherwise, in Co, there was a clear finding that DZBB
stood in the shoes of the landowner:chanRoblesvirtualLawlibrary
We also find that Roaring, besides paying rentals, regularly shared the harvest from the lot with the DZBB, which accepted the same
and included it in the raffle of prizes held during the regular Christmas program for its employees. That the DZBB was not much
interested in such share and that its board of directors had not adopted a resolution recognizing the agricultural lease in favor of
Roaring should not signify that the lease does not exist. The acts of the DZBB clearly show that it had impliedly allowed Roaring, in
his own right, to continue with the original lease arrangement it had with his father-in-law. Notably, the latter's possession and
cultivation of the land from the time it was leased to the DZBB in 1955 and until his death in 1976 were never questioned by the
company.

As long as the legal possessor of the land constitutes a person as a tenant-farmer by virtue of an express or implied lease, such an
act is binding on the owner of the property even if he himself may not have given his consent to such an arrangement. This is settled
jurisprudence. The purpose of the law is to protect the tenant-farmer's security of tenure, which could otherwise be arbitrarily
terminated by an owner simply manifesting his non-conformity to the relationship. 33ChanRoblesVirtualawlibrary
There is nothing in this case to indicate that Hipolito exercised rights and prerogatives that accrue to the landowner and which could
imply that he was in such a situation where he could exercise a landowner's competencies. Hipolito was not clothed with authority
to "allow" respondent to be the tenant himself. Hipolito, as lessee, was entitled to possession of the disputed portion, and legally so.
He was, in this sense, a "legal possessor." However, his capacities ended here. There was nothing that authorized him to enter into a
tenancy relation with another.

II

Even if Section 6 of the Agricultural Land Reform Code were to be interpreted loosely, petitioner as the landowner never consented
to making respondent a tenant.

This court has settled the requisites for tenancy, the core of which is the element of consent. All these requisites must be
demonstrated by substantial evidence; otherwise, the person claiming to be a tenant is not entitled to security of
tenure:chanRoblesvirtualLawlibrary
Tenants are defined as persons who — in themselves and with the aid available from within their immediate farm households —
cultivate the land belonging to or possessed by another, with the latters consent, for purposes of production, sharing the produce
with the landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or
money or both under the leasehold tenancy system.

Based on the foregoing definition of a tenant, entrenched in jurisprudence are the following essential elements of tenancy: 1) the
parties are the landowner and the tenant or agricultural lessee; 2) the subject matter of the relationship is an agricultural land;
3) there is consent between the parties to the relationship; 4) the purpose of the relationship is to bring about agricultural
production; 5) there is personal cultivation on the part of the tenant or agricultural lessee; and 6) the harvest is shared between
landowner and tenant or agricultural lessee. The presence of all these elements must be proved by substantial evidence. Unless a
person has established his status as a de jure tenant, he is not entitled to security of tenure and is not covered by the Land Reform
Program of the Government under existing tenancy laws. Tenancy relationship cannot be presumed. Claims that one is a tenant do
not automatically give rise to security of tenure.34 (Emphasis supplied)ChanRoblesVirtualawlibrary
This court has previously recognized implied consent as sufficing to vest security of tenure in a person claiming to be a tenant.
In Ponce v. Guevarra35 and Joya v. Pareja,36 this court considered the landowners' acts of personally negotiating for extensions and
for better terms with the persons purporting to be tenants as having placed them in estoppel or otherwise demonstrating their
ratification of tenancy.

Here, the Court of Appeals relied on petitioner's having supposedly received shares of the harvest from respondent and his issuance
of the corresponding receipts as demonstrating his implied consent to respondent's tenancy.

We disagree.

While the receipts issued by petitioner bore respondent's name, petitioner never failed to similarly indicate the name of David
Hipolito, the person who, petitioner maintains, is the valid lessee. Petitioner annexed copies of several of these receipts to his
Petition. These receipts consistently indicated:chanRoblesvirtualLawlibrary
J.G.N. TRADING
Tarcan, Conception, Baliwag, Bulacan

No. ...

Petsa ...........

Tinanggap kay MARTIN VICTORIA (DAVID HIPOLITO) ng STA. BARBARA, BALIUAG, BULACAN and kabuuang . . . kaban ng palay na may
timbang . . . kilo.37ChanRoblesVirtualawlibrary
Petitioner may have acknowledged actual delivery made by respondent. However, his consistent inclusion of Hipolito's name
indicates that, to his mind, it was still Hipolito, albeit through another person making actual delivery, sharing the produce with him.
Respondent was recognized only as an agent acting for Hipolito.

Concededly, there is some ambiguity to these receipts. For instance, ' one could make a case for saying that respondent and Hipolito
were co-tenants cooperating in delivering the produce to petitioner. Indeed, the receipts could have used more definite language
such as "for the account of," "on behalf of," or "para kay." We reiterate however, the requisites of tenancy must be established by
substantial evidence. Logically, it is for the person averring tenancy to adduce such evidence. Here, the evidence does not work to
respondent's interest. At best, it evinces an ambiguity; at worst, it proves that he was only an agent.

Just as damaging to respondent's cause is petitioner's act of demanding that respondent vacate and surrender possession of the
disputed portion as soon as Hipolito died. Stated otherwise, as soon as the lease period that petitioner and Hipolito agreed upon
expired, petitioner expected that the disputed portion was to be restored to his possession.

This definitively settles that, in petitioner's mind, only Hipolito was entitled to possession precisely because it was only with Hipolito
that petitioner agreed to cede possession for a definite duration. Conversely, this definitively settles that petitioner never recognized
respondent as having any personal right to possess the disputed portion.

The Court of Appeals merely noted that petitioner issued receipts to respondent and stopped at that. As we have demonstrated, a
more exacting consideration of the totality of petitioner's actions belies any consent or subsequent ratification of respondent's
alleged tenancy.

To hold that respondent is the bona fide tenant of the disputed portion would be to extend petitioner's dispossession for a period
much longer that he had originally contemplated. It puts him at the mercy of a person whom he recognized as a tenant. This is
precisely the "economic dislocation" that this court warned against in Calderon. To hold as such would be to permit agrarian reform
laws to be used as a convenient artifice for investing in a supposed tenant rights that far exceed those of the owner.

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The assailed Decision dated July 31, 2006 and the assailed
Resolution dated October 20, 2006 of the Court of Appeals Eighth Division in CA-G.R. SP No. 94107, which recognized respondent
Martin P. Victoria as the bona fide tenant of the disputed portion, are REVERSED and SET ASIDE. The July 4, 2005 Decision and
March 17, 2006 Resolution of the Department of Agrarian Reform Adjudication Board are REINSTATED.

Respondent Martin P. Victoria and all those claiming rights under him are ordered to vacate and surrender possession of the
disputed portion to petitioner Ismael V. Crisostomo.

SO ORDERED.

Carpio, (Chairperson), Del Castillo, Mendoza, and Jardeleza,*JJ., concur.

G.R. No. 179643               June 3, 2013

ERNESTO L. NATIVIDAD, Petitioner,
vs.
FERNANDO MARIANO, ANDRES MARIANO and DOROTEO GARCIA, Respondents.

DECISION

BRION, J.:

We resolve in this Rule 45 petition for review on certiorari 1 the challenge to the November 28, 2006 decision 2 of the Court of Appeals
(CA) in CA-G.R. SP No. 89365. The assailed decision affirmed the February 21, 2005 decision 3 of the Department of Agrarian Reform
Adjudication Board (DARAB) in DARAB Case No. 10051. The DARAB ruling, in turn, reversed the decision 4 dated October 27, 1999 of
the Provincial Agrarian Reform Adjudication (PARAD) of Nueva Ecija granting the petition for ejectment and collection of back lease
rentals filed by petitioner Ernesto L. Natividad against respondents Fernando Mariano, Andres Mariano and Doroteo Garcia.

The Factual Antecedents

At the core of the dispute in this case is a 66,997 square meter parcel of agricultural land (subject property) situated in Sitio Balanti,
Gapan, Nueva Ecija, owned and registered in the name of Esperanza Yuzon under Transfer Certificate of Title No. NT-15747. The
respondents are the tenants of the subject property. 5

On December 23, 1998, Ernesto filed with the PARAD a petition 6 for ejectment and collection of back lease rentals against the
respondents. In his petition, Ernesto alleged that he purchased the subject property in a public auction held on July 17, 1988.
Immediately after the purchase, he verbally demanded that the respondents pay the lease rentals. Despite his repeated demands,
the respondents refused to pay, prompting him to orally request the respondents to vacate the subject property. He filed the
petition when the respondents refused his demand to vacate.

Although duly served with summons, the respondents failed to answer Ernesto’s petition and were deemed to have waived their
right to present evidence. The PARAD allowed the case to proceed ex parte.
The PARAD granted Ernesto’s petition in its October 27, 1999 decision, and ordered the respondents to vacate the subject property
and to pay the lease rentals in arrears. The PARAD found merit in Ernesto’s unrebutted allegations.

The respondents did not appeal the decision despite due notice. 7 Thus, the PARAD’s decision became final and executory, and on
April 6, 2000, the PARAD granted Ernesto’s motion for the issuance of a writ of execution. 8

On May 4, 2000, the respondents, through a private law firm, filed an Appearance and Petition for Relief from Judgment 9 (first
petition) on the ground of excusable negligence. The respondents claimed that their inexperience and lack of knowledge of agrarian
reform laws and the DARAB Rules of Procedure prevented them from appearing before the PARAD in due course; these also led to
their belated discovery of the approved Barangay Committee for Land Production (BCLP) valuation. They cited these reasons as their
excusable negligence justifying the grant of the relief from judgment prayed for.

In answer to Ernesto’s allegations, the respondents denied knowledge of Ernesto’s purchase of the subject property and,
alternatively, disputed the validity of the purchase. They averred that they had been paying lease rentals to the landowner. In
support of their position, the respondents attached copies of rental payment receipts 10 for the crop years 1988-1998 issued by
Corazon Quiambao and Laureano Quiambao, the authorized representatives of Aurora Yuzon. 11 They added that Diego Mariano, the
father of respondents Andres and Fernando, and respondent Doroteo were issued Certificates of Land Transfer (CLTs) on July 28,
1973.12 Andres and Fernando added that, as heirs of Diego, they are now the new beneficiaries or allocatees of the lots covered by
Diego’s CLT.13 Finally, the respondents pointed out that as of the year 2000, they have an approved valuation report issued by the
BCLP.

On June 7, 2000, the PARAD denied the respondents’ first petition, finding no sufficient basis for its grant. 14 The PARAD declared that
none of the grounds for the grant of a petition for relief exists and can be invoked against its October 27, 1999 decision, or could
have prevented the respondents from taking an appeal. The records show that the respondents were duly notified of the scheduled
hearing date and of the issuance of its decision; despite due notices, the respondents failed to appear and to appeal, for which
reasons the decision became final. Lastly, the PARAD considered that the respondents’ petition had been filed out of time. On July
13, 2000, the PARAD denied15 the respondents’ motion for reconsideration of the June 7, 2000 order. 16

On June 23, 2000, the respondents, this time represented by the Agrarian Legal Assistance, Litigation Division of the Department of
Agrarian Reform (DAR), filed a second Petition for Relief from Judgment (second petition). 17 The respondents repeated the
allegations in their first petition, but added lack of sufficient financial means as the reason that prevented them from seeking
appropriate legal assistance.

On July 20, 2000, the PARAD denied the respondents’ second petition based on technical grounds. When the PARAD denied their
subsequent motion for reconsideration,18 the respondents appealed to the DARAB. 19

The Ruling of the DARAB

On February 21, 2005, the DARAB granted the respondents’ appeal and reversed the PARAD’s October 27, 1999 decision. 20 The
DARAB ordered Ernesto to maintain the respondents in the peaceful possession and cultivation of the subject property, and at the
same time ordered the respondents to pay the rentals in arrears as computed by the Municipal Agrarian Reform Officer (MARO).
Unlike the PARAD, the DARAB found the evidence insufficient to support Ernesto’s allegation that the respondents did not pay the
lease rentals. The respondents’ respective receipts of payment, the DARAB noted, controverted Ernesto’s claim.

Ernesto appealed the February 21, 2005 DARAB decision to the CA via a petition for review under Rule 43 of the Rules of Court. 21

The Ruling of the CA

In its November 28, 2006 decision, the CA denied Ernesto’s petition for review for lack of merit. 22 The CA declared that Ernesto failed
to prove by clear, positive and convincing evidence the respondents’ failure to pay the lease rentals and, in fact, never repudiated
the authority of Corazon and Laureano to receive rental payments from the respondents. The CA ruled that under Section 7 of
Republic Act (R.A.) No. 3844, once a leasehold relationship is established, the landowner-lessor is prohibited from ejecting a tenant-
lessee unless authorized by the court for causes provided by law. While non-payment of lease rentals is one of the enumerated
causes, the landowner (Ernesto) bears the burden of proving that: (1) the tenant did not pay the rentals; and (2) the tenant did not
suffer crop failure pursuant to Section 36 of R.A. No. 3844. As Ernesto failed to prove these elements, no lawful cause existed for the
ejectment of the respondents as tenants.

The CA also declared that the DARAB did not err in taking cognizance of the respondents’ appeal and in admitting mere photocopies
of the respondents’ receipts of their rental payments. The CA held that the DARAB Rules of Procedure and the provisions of R. A. No.
6657 (the Comprehensive Agrarian Reform Law of 1988) specifically authorize the DARAB to ascertain the facts of every case and to
decide on the merits without regard to the law’s technicalities. The CA added that the attendant facts and the respondents’
substantive right to security of tenure except the case from the application of the doctrine of immutability of judgments.

Finally, the CA noted that the issues Ernesto raised were factual in nature. It was bound by these findings since the findings of the
DARAB were supported by substantial evidence.

Ernesto filed the present petition after the CA denied his motion for reconsideration 23 in its August 10, 2007 resolution.24

The Petition

Ernesto imputes on the CA the following reversible errors: first, the finding that he authorized Corazon and Laureano to receive the
respondents’ lease rentals on his behalf; second, the conclusion that the respondents cannot be ejected since they were excused
from paying lease rentals to him for lack of knowledge of the legality of the latter’s acquisition of the subject property; and third, the
ruling that the final and fully executed decision of the PARAD could still be reopened or modified.

Ernesto argues that the respondents’ admission in their pleadings and the rental receipts, which they submitted to prove payment,
evidently show that the respondents paid the lease rentals to Corazon and Laureano as representatives of Esperanza and not as his
representatives.25

Ernesto further insists that the respondents cannot deny knowledge of the legality of his acquisition of the subject property and are,
therefore, not excused from paying the lease rentals to him. He claims that the respondents had long since known that he is the new
owner of the subject property when the petition for the annulment of the levy and execution sale, which the respondents filed
against him, was decided in his favor.26

Finally, Ernesto claims that the CA erred in disregarding the doctrine of immutability of final judgments simply on the respondents’
feigned ignorance of the rules of procedure and of the free legal assistance offered by the DARAB. Ernesto maintains that despite
due receipt of their respective copies of the PARAD’s decision, the respondents nevertheless still failed to seek reconsideration of or
to appeal the PARAD’s decision. Ernesto concludes that the respondents’ inaction rendered the PARAD’s decision final and fully
executed, barring its reopening or modification.27

The Case for the Respondents

In their comment,28 the respondents maintain that Ernesto’s purchase of the subject property is null and void. The respondents
contend that both Diego and Doroteo acquired rights over the subject property when they were granted a CLT in 1973. 29 Ernesto’s
subsequent purchase of the subject property via the execution sale cannot work to defeat such rights as any sale of property
covered by a CLT violates the clear and express mandate of Presidential Decree (P.D.) No. 27, i.e., that title to land acquired pursuant
to the Act is not transferable.30 In fact, when - through the PARAD’s final decision - he ejected the respondents from the subject
property, Ernesto also violated R.A. No. 6657.31

The respondents further contend that the doctrine of immutability of judgments does not apply where substantive rights conferred
by law are impaired, such as the situation obtaining in this case. The courts’ power to suspend or disregard rules justified the action
taken by the DARAB (as well as the CA in affirming the former) in altering the decision of the PARAD although it had been declared
final.32

Lastly, the respondents posit that the CA did not err in upholding the DARAB’s ruling since the findings of facts of quasi-judicial
bodies, when supported by substantial evidence, as in this case, bind the CA. 33

The Issue

The case presents to us the core issue of whether Ernesto had sufficient cause to eject the respondents from the subject property.

The Court’s Ruling

We DENY the petition.

Preliminary considerations

As a preliminary matter, we reiterate the rule that a petition for review on certiorari under Rule 45 of the Rules of Court shall raise
only questions of law. A question that invites a review of the factual findings of the lower tribunals or bodies is beyond the scope of
this Court’s power of review and generally justifies the dismissal of the petition.

The Court, as a rule, observes this Rule 45 proscription as this Court is not a trier of facts. The resolution of factual issues is the
function of the lower tribunals or bodies whose findings, when duly supported by substantial evidence and affirmed by the CA, bind
this Court.

The reviewable question sanctioned by a Rule 45 petition is one that lies solely on what the law provides on the given set of
circumstances. In the present petition, Ernesto essentially argues that the CA erred in ruling that he failed to sufficiently prove any
cause to eject the respondents from the subject property. In effect, Ernesto asks this Court to re-examine and reevaluate the
probative weight of the evidence on record. These are factual inquiries beyond the reach of this petition.

Under exceptional circumstances, however, we have deviated from the above rules. In the present case, the PARAD gave credit to
Ernesto’s claim that the respondents did not pay the lease rentals. The DARAB, in contrast, found Ernesto’s claim unsubstantiated.
This conflict in the factual conclusions of the PARAD and the DARAB on the alleged non-payment by the respondents of the lease
rentals is one such exception to the rule that only questions of law are to be resolved in a Rule 45 petition. Thus, we set aside the
above rules under the circumstances of this case, and resolve it on the merits.

On the issue of the DARAB’s grant of the respondents’ appeal;

Doctrine of immutability of judgments

We cannot blame Ernesto for insisting that the PARAD decision can no longer be altered. The doctrine of immutability of final
judgments, grounded on the fundamental principle of public policy and sound practice, is well settled. Indeed, once a decision has
attained finality, it becomes immutable and unalterable and may no longer be modified in any respect, whether the modification is
to be made by the court that rendered it or by the highest court of the land. The doctrine holds true even if the modification is
meant to correct erroneous conclusions of fact and law. The judgment of courts and the award of quasi-judicial agencies must, on
some definite date fixed by law, become final even at the risk of occasional errors. The only accepted exceptions to this general rule
are the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any party, void judgments, and
whenever circumstances transpire after the finality of the decision which render its execution unjust and inequitable.

This doctrine of immutability of judgments notwithstanding, we are not persuaded that the DARAB and the CA erred in reopening,
and ruling on the merits of the case. The broader interests of justice and equity demand that we set aside procedural rules as they
are, after all, intended to promote rather than defeat substantial justice. If the rigid and pedantic application of procedural norms
would frustrate rather than promote justice, the Court always has the power to suspend the rules or except a particular case from its
operation, particularly if defects of jurisdiction appear to be present. This is the precise situation that we presently find before this
Court.

In the present petition, the DARAB granted the respondents’ appeal, despite the lapse of ten months from the respondents’ notice
of the PARAD’s decision, because the PARAD denied the respondents’ petition for relief from judgment simply on a sweeping
declaration that none of the grounds for the grant of the petition exists and that the petition had been filed out of time. The records,
however, sufficiently contradict the PARAD’s reasons for denying the respondents’ petition for relief; not only do we find justifiable
grounds for its grant, we also find that the respondents filed their petition well within the prescriptive period. Thus, the PARAD
effectively and gravely abused its discretion and acted without jurisdiction in denying the petition for relief from judgment.

A petition for relief from the judgment of the PARAD is governed by Section 4, Rule IX of the 1994 DARAB Rules of Procedure (the
governing DARAB rules at the time Ernesto filed his complaint). It reads in part:

SECTION 4. Relief from Judgment. A petition for relief from judgment must be verified and must be based on grounds of fraud,
accident, mistake and excusable neglect x x x; Provided, that the petition is filed with the Adjudicator a quo within three (3) months
from the time the fraud, accident, mistake or excusable neglect was discovered and six (6) months from notice of order, resolution
or decision from which relief is sought. [italics supplied; emphasis ours]

A reading of Section 4 shows that four grounds justify the grant of the petition for relief from judgment, namely: fraud, accident,
mistake and excusable negligence. The same provision also presents two periods that must be observed for such grant – 90 days and
six months.

In their first and second petitions, the respondents invoked the ground of excusable negligence. They alleged that they failed to
appear before the PARAD due to their inexperience and ignorance of agrarian reform laws and of the DARAB Rules of Procedure, as
well as indigence. These circumstances – their averred ignorance coupled with financial constraints if not outright poverty - taken
altogether sufficiently convince us that the respondents’ negligence is more than excusable and constitutes a justifiable ground for
the grant of their petition for relief.

We are also convinced that the respondents complied with the twin period requirement set by Section 4, Rule IX of the 1994 DARAB
Rules of Procedure. First, the records show that the respondents received a copy of the PARAD’s October 27, 1999 decision on
December 10, 1999, at the earliest; they filed their first petition on May 4, 2000 or five months after. Second, following our above
discussion that the respondents had sufficiently shown grounds for the grant of their petition, we perforce count the 90-day period
from the respondents’ discovery of their excusable negligence. We construe this date as the time when the respondents discovered
the adverse consequence of their failure to answer, seek reconsideration or appeal the PARAD’s decision, which was when they
were evicted from the subject property on June 9, 2000 or 35 days before they filed their first petition. Clearly, the respondents filed
their petition well within 6 months from their notice of the PARAD’s decision and within 90 days from the discovery of their
excusable negligence.

Based on these considerations, we are convinced that the DARAB did not err in granting the respondents’ appeal despite the
procedural lapses. Under Section 3, Rule I of the 1994 DARAB Rules of Procedure, the DARAB and its adjudicators "shall not be
bound by technical rules of procedure and evidence as prescribed in the Rules of Court, but shall proceed to hear and decide all
agrarian cases, disputes or controversies in a most expeditious manner, employing all reasonable means to ascertain the facts of
every case in accordance with justice and equity." The same provision is essentially embodied in R.A. No. 3844 upon which Ernesto
heavily relied. In our view, considerations of equity, justice and jurisdiction surround this case, justifying the relaxation of the rules
and the DARAB’s grant of the respondents’ appeal.

In sum, we rule that the DARAB correctly allowed the respondents’ appeal despite the lapse of the reglementary period. Accordingly,
we cannot impute error on the CA in not reversing the DARAB’s decision simply under the doctrine of immutability of judgments.

Non-payment of lease rentals as ground for eviction of tenants;

Landowner with burden to prove sufficient cause for eviction

Section 7 of R.A. No. 3844 ordains that once the tenancy relationship is established, a tenant or agricultural lessee is entitled to
security of tenure. Section 36 of R.A. No. 3844 strengthens this right by providing that the agricultural lessee has the right to
continue the enjoyment and possession of the landholding and shall not be disturbed in such possession except only upon court
authority in a final and executory judgment, after due notice and hearing, and only for the specifically enumerated causes. The
subsequent R.A. No. 6657 further reiterates, under its Section 6, that the security of tenure previously acquired shall be respected.
Finally, in order to protect this right, Section 37 of R.A. No. 3844 rests the burden of proving the existence of a lawful cause for the
ejectment of the agricultural lessee on the agricultural lessor.

Ernesto’s petition for ejectment against the respondents was anchored precisely on the latter’s alleged non-payment of the lease
rentals beginning 1988 until 1998 despite his repeated verbal demands. When confronted with the respondents’ defense of due
payment with supporting documentary evidence of it, Ernesto countered that their payments should not be considered as he did not
authorize Corazon and Laureano to receive the payments on his behalf.

These allegations pose to us three essential points that we need to address. First, whether Ernesto indeed made demands on the
respondents for the payment of the lease rentals; second, assuming that Ernesto made such demands, whether the respondents
deliberately failed or continuously refuse to pay the lease rentals; and third, whether the lease rentals paid by the respondents to
Corazon and Laureano are valid.

We rule in the NEGATIVE on the first point.

Our review of the records shows that Ernesto did not present any evidence, such as the affidavit of the person or persons present at
that time, to prove that he demanded from the respondents the payment of the lease rentals. We, therefore, cannot accord any
merit to his claim that he made such demands. His allegation, absent any supporting evidence, is nothing more than a hollow claim
under the rule that he who alleges a fact has the burden of proving it as mere allegation is not evidence. Thus, Ernesto should be
deemed to have made his demand only at the time he filed the petition for ejectment before the PARAD. At this point, the
respondents were not yet in delay and could not be deemed to have failed in the payment of their lease rentals.

We again rule in the NEGATIVE on the second point.

Non-payment of the lease rentals whenever they fall due is a ground for the ejectment of an agricultural lessee under paragraph 6,
Section 36 of R.A. No. 3844. In relation to Section 2 of Presidential Decree (P.D.) No. 816, deliberate refusal or continued refusal to
pay the lease rentals by the agricultural lessee for a period of two (2) years shall, upon hearing and final judgment, result in the
cancellation of the CLT issued in the agricultural lessee’s favor.

The agricultural lessee's failure to pay the lease rentals, in order to warrant his dispossession of the landholding, must be willful and
deliberate and must have lasted for at least two (2) years. The term "deliberate" is characterized by or results from slow, careful,
thorough calculation and consideration of effects and consequences, while the term "willful" is defined, as one governed by will
without yielding to reason or without regard to reason. Mere failure of an agricultural lessee to pay the agricultural lessor's share
does not necessarily give the latter the right to eject the former absent a deliberate intent on the part of the agricultural lessee to
pay.

In the present petition, we do not find the respondents’ alleged non-payment of the lease rentals sufficient to warrant their
dispossession of the subject property. The respondents’ alleged non-payment did not last for the required two-year period. To
reiterate our discussion above, the respondents’ rental payments were not yet due and the respondents were not in default at the
time Ernesto filed the petition for ejectment as Ernesto failed to prove his alleged prior verbal demands. Additionally, assuming
arguendo that the respondents failed to pay the lease rentals, we do not consider the failure to be deliberate or willful. The receipts
on record show that the respondents had paid the lease rentals for the years 1988-1998. To be deliberate or willful, the non-
payment of lease rentals must be absolute, i.e., marked by complete absence of any payment. This cannot be said of the
respondents’ case. Hence, without any deliberate and willful refusal to pay lease rentals for two years, the respondents’ ejectment
from the subject property, based on this ground, is baseless and unjustified.

Finally, we rule in the AFFIRMATIVE on the third point.

Ernesto purchased the subject property in 1988. However, he only demanded the payment of the lease rentals in 1998. All the while,
the respondents had been paying the lease rentals to Corazon and Laureano. With no demand coming from Ernesto for the payment
of the lease rentals for ten years, beginning from the time he purchased the subject property, the respondents thus cannot be
faulted for continuously paying the lease rentals to Corazon and Laureano. Ernesto should have demanded from the respondents
the payment of the lease rental soon after he purchased the subject property. His prolonged inaction, whether by intention or
negligence, in demanding the payment of the lease rentals or asserting his right to receive such rentals, at the very least, led the
respondents to consider Corazon and Laureano to still be the authorized payees of the lease rentals, given the absence of any
objection on his part.

Import of the respondents’ CLT

Diego and respondent Doroteo were undoubtedly awarded CLTs over the subject property pursuant to P.D. No. 27. Thus, we agree
with their position that they have acquired rights over the subject property and are in fact deemed owners of it.

A CLT is a document that evidences an agricultural lessee’s inchoate ownership of an agricultural land primarily devoted to rice and
corn production. It is the provisional title of ownership issued to facilitate the agricultural lessee’s acquisition of ownership over the
landholding. The transfer of the landholding to the agricultural lessee under P.D. No. 27 is accomplished in two stages: (1) issuance
of a CLT to a farmer-beneficiary as soon as the DAR transfers the landholding to the farmer-beneficiary in recognition that said
person is a "deemed owner"; and (2) issuance of an Emancipation Patent as proof of full ownership of the landholding upon full
payment of the annual amortizations or lease rentals by the farmer-beneficiary.

The CLTs of Diego and of respondent Doroteo were issued in 1973. Thus, as of 1973, Diego and respondent Doroteo were deemed
the owners of the subject property pursuant to P.D. No. 27, but subject to the compliance with certain conditions and requirements,
one of which was the full payment of the monthly amortization or lease rentals to acquire absolute ownership.

In the event the tenant-farmer defaults in the payment of the amortization, P.D. No. 27 ordains that the amortization due shall be
paid by the farmer’s cooperative where the defaulting tenant-farmer is a member, with the cooperative having a right of recourse
against the farmer. Thus, if the tenant-farmer defaults, the landowner is assured of payment since the farmers’ cooperative will
assume the obligation. In the present petition, the records show that the respondents were members of a Samahang Nayon.
Pursuant to P.D. No. 27, Ernesto should have claimed the unpaid lease rentals or amortizations from the respondents’ Samahang
Nayon.

Executive Order (E.O.) No. 228, issued on July 17, 1987, modified P.D. No. 27 on the manner of payment and provided for different
modes of payment of the value of the land to the landowner. The pertinent portion reads:

SECTION 3. Compensation shall be paid to the landowners in any of the following modes, at the option of the landowners:

(a) Bond payment over ten (10) years, with ten percent (10%) of the value of the land payable immediately in cash, and the
balance in the form of LBP bonds;

(b) Direct payment in cash or in kind by the farmer-beneficiaries with the terms to be mutually agreed upon by the
beneficiaries and landowners and subject to the approval of the Department of Agrarian Reform; and

(c) Other modes of payment as may be prescribed or approved by the Presidential Agrarian Reform Council. [emphases
supplied]

In the event a dispute arises between the landowner and the tenant-farmer on the amount of the lease rentals, Section 2 of E.O. No.
228 provides that the DAR and the concerned BCLP shall resolve the dispute. In any case, the Land Bank of the Philippines shall still
process the payment of the landowner’s compensation claim, which it shall hold in trust for the landowner, pending resolution of
the dispute. Thus, under this scheme, as with P.D. No. 27, the landowner is assured of payment of the full value of the land under
E.O. No. 228.

With the enactment of R.A. No. 6657 on June 10, 1988, the manner and the mode of payment were further modified with the
options available to the landowner, provided as follows:

"SECTION 18. Valuation and Mode of Compensation. — x x x

xxxx

(1) Cash payment, x x x;

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other qualified
investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds." (emphases ours; italics supplied)

Following these guarantees to the landowner under P.D. No. 27 and E.O No. 228, as well as R.A. No. 6657, the clear rule is that
notwithstanding the non-payment of the amortization to the landowner, the tenant-farmer retains possession of the landholding. In
addition, we point out that under P.D. No. 27 and R.A. No. 6657, the transfer or waiver of the landholding acquired by virtue of P.D.
No. 27 is prohibited, save only by hereditary succession or to the Government; effectively, reversion of the landholding to the
landholder is absolutely proscribed. In light of this decree, we hold that the DARAB correctly reversed the decision of the PARAD,
which ordered the respondents to surrender the possession of the subject property to Ernesto as this was in clear contravention of
the objectives of the agrarian reform laws.

Nevertheless, we cannot agree with the DARAB’s ruling that the MARO should assist the parties in executing a new leasehold
contract. To recall, Diego and respondent Doroteo are valid holders of CLTs. Also, as of the year 2000, the concerned BCLP has
already issued an approved valuation for the subject property. Under these circumstances, the proper procedure is for Ernesto and
the DAR to agree on the manner of processing the compensation payment for the subject property. Hence, pursuant to R.A. No.
6657, E.O. No. 228, in relation to Department Memorandum Circular No. 26, series of 1973, and the related issuances and regulation
of the DAR, we must remand the case to the DAR for the proper determination of the manner and mode of payment of the full value
of the subject property to Ernesto.1âwphi1

As a final note, we observe that on April 11, 1988, Diego waived his right over the 3-hectare.lot covered by his CLT (which formed
part of the subject property) in favor of his two sons, Andres and Fernando, with each obtaining an equal half interest. This
arrangement directly contravenes Ministry Memorandum Circular Nd. -19, series of 1978. This memorandum circular specifically
proscribes the partition of the landholding; should the farmer-beneficiary have several heirs, as in this case, the ownership and
cultivation of the landholding must ultimately be consolidated in one heir who possesses the requisite qualifications. Thus, under
paragraph 2 of the memorandum circular, Andres and Fernando must agree on one of them to be the sole owner and cultivator of
the lot covered by Diego's CLT.

WHEREFORE, in view of these considerations, we AFFIRM with MODIFICATION the decision dated November 28, 2006 and the
resolution dated August 10, 2007 of the Court of Appeals in CA-G.R. Sp No. 89365. Petitioner Ernesto L. Natividad is ORDERED to
immediately surrender possession of the subject property to the respondents, and the DARAB is directed to ensure the immediate
restoration of possession of the subject property to the respondents. We REMAND the case to the Department of Agrarian Reform
for the: (1) proper determination of the manner and mode of payment of the full value of the land to petitioner Emesto L. Natividad
in accordance with R.A. No. 6657, Executive Order No. 228, Department Memorandum Circular No. 26, series of 1973, and other
related issuances and regulation of the Department of Agrarian Reform; and (2) proper determination of the successor-in-interest of
Diego Mariano as the farmer-beneficiary to the landholding covered by his CLT, in accordance with the provisions of Ministry
Memorandum Circular No. 19, series of 1978. No costs.
SO ORDERED.

CASE DIGEST: LAND BANK OF THE PHILIPPINES vs. DALAUTA

G.R. No. 190004

This is an action for determination of just compensation.

FACTS: Respondent was the registered owner of an agricultural land in Butuan City with an area of 25.2160 hectares and which was
placed by DAR under compulsory acquisition of CARP as reflected in the Notice of Coverage. Petitioner LBP offered ₱192,782.59 as
compensation for the land, but Dalauta rejected such valuation for being too low.

The case was referred to the DAR Adjudication Board (DARAB) through the Provincial Agrarian Reform Adjudicator (PARAD) of
Butuan City, who affirmed the valuation made by LBP, after a summary administrative proceeding was conducted.

Respondent filed a petition for determination of just compensation with the RTC, sitting as SAC. He alleged that LBP’s valuation of
the land was inconsistent with the rules and regulations prescribed in DAR Administrative Order (A.O.) No. 06, series of 1992, for
determining the just compensation of lands covered by CARP’s compulsory acquisition scheme.

The Board of Commissioners constituted by SAC inspected the land and recommended that the value of the land be pegged at
₱100,000.00 per hectarei  in which both parties objected.

DAR Admin. Order  No. 06 (1992) – II (A)

There shall be one basic formula for the valuation of lands covered by VOS or CA regardless of the date of offer or coverage of the
claim:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

Where:  LV = Land Value; CNI = Capitalized Net Income;  CS = Comparable Sales;  MV = Market Value per Tax Declaration

The above formula shall be used if all the three factors are present, relevant, and applicable.

A.1             When the CS factor is not present and CNI and MV are applicable, the formula shall be: LV=(CNI x 0.9) + (MV x 0.1)

A.2             When the CNI factor is not present, and CS and MV are applicable, the formula shall be: LV = (CS x 0.9) + (MV x 0.1)

A.3             When both the CS and CNI are not present and only MV is applicable, the formula shall be: LV = MV x 2

A.4        In all the above, the computed value using the applicable formula or the Declared Value by Landowner (DV), whichever is
lower, shall be adopted as the Land Value.

xxx

Dalauta claimed that he had a net income of Php350,000.00 in 1993 from sales of trees to one person, Fonacier, thus the formula
of  LV = CNI x 0.9 + MV x 0.1 should be used, which yields a total value of ₱2,639,557.oo.

LBP alleged that the land had no income and the corn production found during the ocular inspection in 1994 was only for family
consumption. Thus they used the formula LV= MVx 2 which yielded a total value of ₱192,782.59.

ISSUE: Whether or not respondent is considered the trial court correctly computed the just compensation of the subject property.

RULING: Upon an assiduous assessment of the different valuations arrived at by the DAR, the SAC and the CA, the Court agrees with
the position of Justice Francis Jardeleza that just compensation for respondent Dalauta’s land should be computed based on the
formula provided under DAR-LBP Joint Memorandum Circular No. 11, series of 2003 (JMC No. 11 (2003)). This Memorandum
Circular, which provides for the specific guidelines for properties with standing commercial trees, explains:

The Capitalized Net Income  (CNI)  approach to land valuation assumes that there would be uniform streams of future income that
would be realized in perpetuity from the seasonal/permanent crops planted to the land.  In the case of commercial trees (hardwood
 and soft wood species), however, only a  one-time income  is realized when the trees are due for harvest. The regular CNI approach
in the valuation of lands planted to commercial trees would therefore not apply.  (Emphasis and underscoring supplied.)

Dalauta’s sale of falcata trees indeed appears to be a one-time transaction. He did not claim to have derived any other income from
the property prior to receiving the Notice of Coverage from the DAR in February 1994. For this reason, his property would be more
appropriately covered by the formula provided under JMC No. 11 (2003).

Dalauta alleges to have sold all the falcata trees in the property to Fonacier in 1993. After Fonacier finished harvesting in January
1994, he claims that, per advice of his lawyer, he immediately caused the date of effectivity of this Joint Memorandum Circular x x
x.” It is submitted, however, that applying the above formula to compute just compensation for respondent’s land would be
the most equitable course of action under the circumstances. Without JMC No. 11 (2003), Dalauta’s property would have to be
valued using the formula for idle lands, the CNI and CS factors not being applicable. Following this formula, just compensation for
Dalauta’s property would only amount to ₱225,300.00, computed as follows:

LV = MVx2

Where: LV = Land Value;  MV = Market Value per Tax Declaration*

 For the area planted to corn, ₱7,740.00/hectare

 For idle/pasture land, ₱3,890/hectare

Thus:

For the 4 hectares planted to corn:  LV = (P7, 7 40/hectare x 4 hectares) x 2 = ₱61,920.00

For the 21 hectares of idle/pasture land:  LV = (₱3,890/hectare x 21) x 2 = ₱163,380.00

Total Land Value = P61,920.00 + Pl63,380.00 = P225,300.00

DEL CASTILLO, J.:

A case involving agricultural land does not immediately qualify it as an agrarian dispute.  The mere fact that the land is agricultural
does not ipso facto make the possessor an agricultural lessee or tenant; there are conditions or requisites before he can qualify as an
agricultural lessee or tenant, and the subject matter being agricultural land constitutes simply one condition.  In order to qualify as
an agrarian dispute, there must likewise exist a tenancy relation between the parties.

This Petition for Review on Certiorari[1] seeks to set aside the February 19, 2010 Decision [2] of the Court of Appeals (CA) in CA-G.R. SP
No. 101423, entitled "Regalado Arribay, Petitioner, versus Charles Bumagat, Julian Bacudio, Rosario Padre, Spouses Rogelio and
Zosima Padre, and Felipe Domincil," as well as its November 9, 2010 Resolution[3] denying reconsideration of the assailed judgment.

Factual Antecedents

Petitioners are the registered owners, successors-in-interest, or possessors of agricultural land, consisting of about eight hectares,
located in Bubog, Sto. Tomas, Isabela Province, to wit:

1. Charles Bumagat (Bumagat) 14,585 square meters covered by Transfer Certificate of Title No. (TCT) 014557; [4]

2. Julian Bacudio (Bacudio) 14,797 square meters covered by TCT 014556; [5]

3. Rosario Padre 14,974 square meters covered by TCT 014554 [6] in the name of Dionicio Padre;[7]

4. Spouses Rogelio and Zosima Padre 6,578 square meters covered by TCT 014561 [8] in the name of Ireneo Padre;[9]

5. Spouses Rogelio and Zosima Padre 6,832 square meters covered by TCT 014560 in the name of their predecessor-in-interest Felix
Pacis;[10]

6. Felipe Domincil 14,667 square meters covered by TCT 014558; [11] and

7. Felipe Domincil 7,319 square meters. [12]

The certificates of title to the above titled properties were issued in 1986 pursuant to emancipation patents. [13]

On July 19, 2005, petitioners filed a Complaint[14] for forcible entry against respondent before the 2nd Municipal Circuit Trial Court
(MCTC) of Cabagan-Delfin Albano, Isabela.  The case was docketed as Special Civil Action No. 475 (SCA 475).  In an Amended
Complaint,[15] petitioners alleged that on May 9, 2005, respondent with the aid of armed goons, and through the use of intimidation
and threats of physical harm entered the above-described parcels of land and ousted them from their lawful possession; that
respondent then took over the physical possession and cultivation of these parcels of land; and that petitioners incurred losses and
injuries by way of lost harvests and other damages.  Petitioners thus prayed for injunctive relief, actual damages in the amount of
not less than P40,000.00 for each cropping season lost, P30,000.00 attorney's fees, and costs.

Respondent filed a Motion to Dismiss,[16] claiming that the subject properties are agricultural lands which thus renders the dispute an
agrarian matter and subject to the exclusive jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB). 
However, in a January 30, 2006 Order,[17] the MCTC denied the motion, finding that the pleadings failed to show the existence of a
tenancy or agrarian relationship between the parties that would bring their dispute within the jurisdiction of the DARAB.
Respondent's motion for reconsideration was similarly rebuffed. [18]

Respondent filed his Amended Answer with Counterclaim, [19] alleging among others that petitioners' titles have been ordered
cancelled in a December 1, 2001 Resolution [20] issued by the Department of Agrarian Reform, Region 2 in Administrative Case No.
A0200 0028 94; that he is the absolute owner of approximately 3.5 hectares of the subject parcels of land, and is the administrator
and overseer of the remaining portion thereof, which belongs to his principals Leonardo and Evangeline Taggueg (the Tagguegs);
that petitioners abandoned the subject properties in 1993, and he planted the same with corn; that in 2004, he planted the land to
rice; that he sued petitioners before the Municipal Agrarian Reform Office (MARO) for non-payment of rentals since 1995; and that
the court has no jurisdiction over the ejectment case, which is an agrarian controversy.

The parties submitted their respective Position Papers and other evidence. [21]

During the proceedings before the MCTC, respondent presented certificates of title, supposedly issued in his name and in the name
of the Tagguegs in 2001, which came as a result of the supposed directive in Administrative Case No. A0200 0028 94 to cancel
petitioners' titles.  As claimed by respondent, the subject parcels of land formed part of a 23.663-hectare property owned by one
Romulo Taggueg, Sr. (Romulo Sr.) and covered by Original Certificate of Title No. (OCT) P-4835, which was placed under the
Operation Land Transfer Program pursuant to Presidential Decree No. 27 [22] (PD 27).  Petitioners supposedly became farmer-
beneficiaries under the program, and the parcels of land were awarded to them.  Meanwhile, Romulo Sr. died and his heirs
instituted Administrative Case No. A0200 0028 94 to cancel petitioners' titles.  The heirs won the case, and later on new titles over
the property were issued in their favor.  In turn, one of the heirs transferred his title in favor of respondent.

Ruling of the Municipal Circuit Trial Court

On April 12, 2007, a Decision[23] was rendered by the MCTC in SCA 475, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendant as follows:

1.  Ordering the defendant or any person or persons acting in his behalf to vacate the entire SEVENTY NINE THOUSAND SEVEN
HUNDRED FIFTY TWO (79,752)[-]SQUARE METERS, property described under  paragraph 2 of the amended complaint and to
peacefully surrender the physical possession thereof in favor of each of the plaintiffs;

2.  Ordering the defendant to pay each of the plaintiffs representing actual damages as follows:

o  Charles Bumagat …………………...P109,390.00

o  Julian Bacudio ……………………...P110,980.00
o  Rosario Padre ………………………P112,305.00
o  Sps. Rogelio and Zosima Padre …….P100,575.00
o  Felipe Domincil ……………………P165,429.00

3.  Ordering the defendant to pay plaintiffs representing the Attorney's fees in the amount of P10,000.00.

4.  Ordering the defendant to pay costs of the suit.

SO ORDERED.[24]

Essentially, the MCTC held that based on the evidence, petitioners were in actual possession of the subject parcels of land, since
respondent himself admitted that he brought an action against petitioners before the MARO to collect rentals which have remained
unpaid since 1995 thus implying that petitioners, and not respondent, were in actual possession of the land, and belying
respondent's claim that he took possession of the property in 1993 when petitioners supposedly abandoned the same.  The court
added that petitioners' claims were corroborated by the statements of other witnesses farmers of the adjoining lands declaring that
petitioners have been in unmolested and peaceful possession of the subject property until May 9, 2005, when they were
dispossessed by respondent.

The MCTC added that it had jurisdiction over the case since there is no tenancy relationship between the parties, and the pleadings
do not allege such fact; that respondent's own witnesses declared that the subject property was never tenanted nor under lease to
tenants.

Finally, the MCTC held that while respondent and his principals, the Tagguegs, have been issued titles covering the subject property,
this cannot give respondent "license to take the law into his own hands and unilaterally eject the plaintiffs from the land they have
been tilling."[25]

Ruling of the Regional Trial Court 

Respondent appealed[26] the MCTC Decision before the Regional Trial Court (RTC), insisting that the DARAB has jurisdiction over the
case; that he has been in actual possession of the subject land since 2003; that while petitioners hold certificates of title to the
property, they never acquired ownership over the same for failure to pay just compensation therefor; that petitioners' titles have
been ordered cancelled, and they reverted to the status of mere tenants; and that the MCTC erred in granting pecuniary awards to
petitioners.

On October 15, 2007, the RTC issued its Order[27] denying the appeal for lack of merit and affirming in toto the appealed MCTC
judgment.  In sum, the RTC pronouncement echoed the MCTC findings that no tenancy or any other agrarian relationship existed
between the parties, nor do the pleadings bear out such fact; that the evidence preponderantly shows that petitioners were in
actual possession of the subject land; and that petitioners were entitled to compensation as awarded by the court a quo.

Ruling of the Court of Appeals

Respondent went up to the CA by Petition for Review,[28] assailing the Decision of the RTC and claiming that since petitioners
acquired title by virtue of PD 27, this should by itself qualify the controversy as an agrarian dispute covered by the DARAB; that there
is no need to allege in the pleadings that he and the heirs of Romulo Sr. acquired title to the property, in order for the dispute to
qualify as an agrarian dispute; that petitioners' titles were ordered cancelled in Administrative Case No. A0200 0028 94; that he has
been in possession of the property since 2003; and that the trial court erred in granting pecuniary awards to petitioners.

On February 19, 2010, the CA issued the assailed Decision, which held thus:

IN VIEW WHEREOF, the petition is GRANTED.  The assailed Order of the Regional Trial Court of Cabagan, Isabela, Branch 22, dated
October 15, 2007, affirming in toto the previous Decision of the MCTC of Cabagan-Sto. Tomas, Isabela is hereby REVERSED and SET
ASIDE.  Civil Case No. 475, entitled "Charles Bumagat, Julian Bacudio, Rosario Padre, Sps. Rogelio and Zosima Padre and Felipe
Domincil versus Regalado Arribay" is DISMISSED.

SO ORDERED.[29]

In reversing the trial court, the CA agreed that the parties' dispute fell under the jurisdiction of the DARAB since petitioners' titles
were obtained pursuant to PD 27, and under the 1994 DARAB rules of procedure, cases involving the issuance, correction and
cancellation of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land
Registration Authority fall under DARAB jurisdiction. [30]  The appellate court added that the Complaint for ejectment attacked the
certificates of title issued in favor of respondent and the Tagguegs because the complaint prayed for

x x x the annulment of the coverage of the disputed property within the Land Reform Law which is but an incident involving the
implementation of the CARP.  These are matters relating to terms and conditions of transfer of ownership from landlord to agrarian
reform beneficiaries over which DARAB has primary and exclusive original jurisdiction, pursuant to Section 1(f), Rule II, DARAB New
Rules of Procedure.[31]

Petitioners moved for reconsideration, but in a November 9, 2010 Resolution, the CA stood its ground.  Hence, the present recourse.

Issue

Petitioners raise the following issue in this Petition:

WITH ALL DUE RESPECT, THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE MCTC HAD NO JURISDICTION OVER THE
COMPLAINT OF THE (PETITIONERS), INSTEAD IT IS THE DARAB THAT HAS JURISDICTION, SINCE THE COMPLAINT ESSENTIALLY PRAYS
FOR THE ANNULMENT OF THE COVERAGE OF THE DISPUTED PROPERTY WITH THE LAND REFORM LAW WHICH IS BUT AN INCIDENT
INVOLVING THE IMPLEMENTATION OF THE CARP.[32]

Petitioners' Arguments

In their Petition and Reply,[33] petitioners seek a reversal of the assailed CA dispositions and the reinstatement of the MCTC's April
12, 2007 Decision, arguing that their Complaint for ejectment simply prays for the recovery of de facto possession from respondent,
who through force, threat and intimidation evicted them from the property; that there is no agrarian reform issue presented
therein; that the fact that the controversy involved agricultural land does not ipso facto make it an agrarian dispute; that the parties'
dispute does not relate to any tenurial arrangement over agricultural land; and that quite the contrary, the parties are strangers to
each other and are not bound by any tenurial relationship, whether by tenancy, leasehold, stewardship, or otherwise. [34]

Petitioners add that when certificates of title were issued in their favor, they ceased to be tenant-tillers of the land but became
owners thereof; that full ownership over the property was acquired when emancipation patents were issued in their favor; [35] that
when their certificates of title were issued, the application of the agrarian laws was consummated; and that as owners of the subject
property, they were thus in peaceful and adverse physical possession thereof when respondent ousted them by force, threat and
intimidation.  Petitioners argue further that respondent is not the former landowner, nor the representative thereof; he is merely an
absolute stranger who came into the picture only later.

Finally, petitioners argue that it was erroneous for the CA to rule that in seeking to evict respondent, they were in effect mounting
an attack on the latter's title and thus their Complaint in effect sought the "the annulment of the coverage of the disputed property
within the Land Reform Law which is but an incident involving the implementation of the CARP," [36] which thus relates to "terms and
conditions of transfer of ownership from landlord to agrarian reform beneficiaries over which DARAB has primary and exclusive
original jurisdiction x x x."[37]
Respondent's Arguments

Seeking the denial of the Petition, respondent in his Comment [38] insists that the ejectment case is intertwined with the CARP Law,
[39]
 since petitioners' titles were obtained by virtue of the agrarian laws, which thus places the controversy within the jurisdiction of
the DARAB; that under the 2003 DARAB Rules of Procedure, specifically Rule II, Section 1, paragraph 1.4 [40] thereof, cases involving
the ejectment and dispossession of tenants and/or leaseholders fall within the jurisdiction of the DARAB; that under such rule, the
one who ejects or dispossesses the tenant need not be the landowner or lessor, and could thus be anybody, including one who has
no tenurial arrangement with the evicted/ dispossessed tenant.

Respondent adds that with the cancellation of petitioners' titles, they were directed to enter into a leasehold relationship with the
owners of the subject parcels of land, or the heirs of Romulo Sr. whose petition for exemption and application for retention were
granted and approved by the Department of Agrarian Reform, Region 2 in Administrative Case No. A0200 0028 94 and later, with
him as transferor and purchaser of a 3.5-hectare portion thereof.

Our Ruling

The Court grants the Petition.

In declaring that the parties' dispute fell under the jurisdiction of the DARAB, the CA held that respondents' titles were obtained
pursuant to PD 27, and pursuant to the 1994 DARAB rules of procedure then applicable, cases involving the issuance, correction and
cancellation of CLOAs and EPs which are registered with the Land Registration Authority fall under DARAB jurisdiction.  It added that
since the Complaint prayed for the annulment of the coverage of the disputed property under the land reform law, which thus
relates to terms and conditions of transfer of ownership from landlord to agrarian reform beneficiaries, the DARAB exercises
jurisdiction.

What the appellate court failed to realize, however, is the fact that as between petitioners and the respondent, there is no tenurial
arrangement, not even an implied one.  As correctly argued by petitioners, a case involving agricultural land does not immediately
qualify it as an agrarian dispute.  The mere fact that the land is agricultural does not ipso facto make the possessor an agricultural
lessee or tenant.  There are conditions or requisites before he can qualify as an agricultural lessee or tenant, and the subject being
agricultural land constitutes just one condition.[41]  For the DARAB to acquire jurisdiction over the case, there must exist a tenancy
relation between the parties.  "[I]n order for a tenancy agreement to take hold over a dispute, it is essential to establish all its
indispensable elements, to wit:  1) that the parties are the landowner and the tenant or agricultural lessee; 2) that the subject
matter of the relationship is an agricultural land; 3) that there is consent between the parties to the relationship; 4) that the purpose
of the relationship is to bring about agricultural production; 5) that there is personal cultivation on the part of the tenant or
agricultural lessee; and 6) that the harvest is shared between the landowner and the tenant or agricultural lessee." [42]  In the present
case, it is quite evident that not all of these conditions are present.  For one, there is no tenant, as both parties claim ownership over
the property.

Besides, when petitioners obtained their emancipation patents and subsequently their certificates of title, they acquired vested
rights of absolute ownership over their respective landholdings.  "It presupposes that the grantee or beneficiary has, following the
issuance of a certificate of land transfer, already complied with all the preconditions required under P.D. No. 27, and that the
landowner has been fully compensated for his property.  And upon the issuance of title, the grantee becomes the owner of the
landholding and he thereby ceases to be a mere tenant or lessee.  His right of ownership, once vested, becomes fixed and
established and is no longer open to doubt or controversy." [43]  Petitioners "became the owner[s] of the subject property upon the
issuance of the emancipation patents and, as such, [enjoy] the right to possess the same a right that is an attribute of absolute
ownership."[44]

On the other hand, it appears that respondent obtained title through Romulo Sr.'s heirs, whose claim to the property is by virtue of
an unregistered deed of donation in their favor supposedly executed prior to September 21, 1972.  On this basis, the heirs filed in
1993 a petition with the Department of Agrarian Reform, Region 2 to exempt the property from coverage under PD 27, which was
granted in a December 29, 1994 Order.[45]  By then, or way back in 1986 petitioners had been issued certificates of title thus,
respondent's acquisition of the property appears questionable, considering the Court's pronouncement in Gonzales v. Court of
Appeals,[46] thus:

The sole issue to be resolved is whether the property subject of the deed of donation which was not registered when P.D. No. 27
took effect, should be excluded from x x x Operation Land Transfer.

Petitioners insist that the deed of donation executed by Ignacio Gonzales validly transferred the ownership and possession of Lot
551-C which comprises an area of 46.97 hectares to his 14 grandchildren. They further assert that inasmuch as Lot 551-C had already
been donated, the same can no longer fall within the purview of P.D. No. 27, since each donee shall have a share of about three
hectares only which is within the exemption limit of seven hectares for each landowner provided under P.D. No. 27.

Article 749 of the Civil Code provides inter alia that "in order that the donation of an immovable may be valid, it must be made in a
public document, specifying therein the property donated and the value of the charges which the donee must satisfy." Corollarily,
Article 709 of the same Code explicitly states that "the titles of ownership, or other rights over immovable property, which are not
duly inscribed or annotated in the Registry of property shall not prejudice third persons." From the foregoing provisions, it may be
inferred that as between the parties to a donation of an immovable property, all that is required is for said donation to be contained
in a public document. Registration is not necessary for it to be considered valid and effective. However, in order to bind third
persons, the donation must be registered in the Registry of Property (now Registry of Land Titles and Deeds). Although the non-
registration of a deed of donation shall not affect its validity, the necessity of registration comes into play when the rights of third
persons are affected, as in the case at bar.
It is actually the act of registration that operates to convey registered land or affect title thereto. Thus, Section 50 of Act No. 496
(Land Registration Act), as amended by Section 51 of P.D. No. 1529 (Property Registration Decree), provides:

SEC. 51. Conveyance and other dealings by registered owner - . . . But no deed, mortgage, lease, or other voluntary instrument,
except a will purporting to convey or affect registered land, shall take effect as a conveyance or bind the land, but shall operate only
as a contract between the parties and as evidence of authority to the Register of Deeds to make registration.

The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, . . .

Further, it is an entrenched doctrine in our jurisdiction that registration in a public registry creates constructive notice to the whole
world (Olizon vs. Court of Appeals, 236 SCRA 148 [1994]). Thus, Section 51 of Act No. 496, as amended by Section 52 of P.D. No.
1529, provides:

SEC. 52. Constructive notice upon registration - Every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or
entry affecting registered land shall, if registered, filed or entered in the Office of the Register of Deeds for the province or city
where the land to which it relates lies, be constructive notice to all persons from the time of such registering, filing or entering.

It is undisputed in this case that the donation executed by Ignacio Gonzales in favor of his grandchildren, although in writing and
duly notarized, has not been registered in accordance with law. For this reason, it shall not be binding upon private respondents who
did not participate in said deed or had no actual knowledge thereof. Hence, while the deed of donation is valid between the donor
and the donees, such deed, however, did not bind the tenants-farmers who were not parties to the donation. As previously
enunciated by this Court, non-registration of a deed of donation does not bind other parties ignorant of a previous transaction (Sales
vs. Court of Appeals, 211 SCRA 858 [1992]). So it is of no moment that the right of the [tenant]-farmers in this case was created by
virtue of a decree or law. They are still considered "third persons" contemplated in our laws on registration, for the fact remains that
these [tenant]-farmers had no actual knowledge of the deed of donation.

xxxx

As a final note, our laws on agrarian reform were enacted primarily because of the realization that there is an urgent need to
alleviate the lives of the vast number of poor farmers in our country. Yet, despite such laws, the majority of these farmers still live on
a hand-to-mouth existence. This can be attributed to the fact that these agrarian laws have never really been effectively
implemented. Certain individuals have continued to prey on the disadvantaged, and as a result, the farmers who are intended to be
protected and uplifted by the said laws find themselves back in their previous plight or even in a more distressing situation. This
Court ought to be an instrument in achieving a dignified existence for these farmers free from pernicious restraints and practices,
and there's no better time to do it than now.[47]

When petitioners' titles were issued in 1986, these became indefeasible and incontrovertible. Certificates of title issued pursuant to
emancipation patents acquire the same protection accorded to other titles, and become indefeasible and incontrovertible upon the
expiration of one year from the date of the issuance of the order for the issuance of the patent.  Lands so titled may no longer be the
subject matter of a cadastral proceeding; nor can they be decreed to other individuals. [48]  "The rule in this jurisdiction, regarding
public land patents and the character of the certificate of title that may be issued by virtue thereof, is that where land is granted by
the government to a private individual, the corresponding patent therefor is recorded, and the certificate of title is issued to the
grantee; thereafter, the land is automatically brought within the operation  of the Land Registration Act, the title issued to the
grantee becoming entitled to all the safeguards provided in Section 38 of the said Act.  In other words, upon expiration of one year
from its issuance, the certificate of title shall become irrevocable and indefeasible like a certificate issued in a registration
proceeding."[49]

For the above reasons, the Court is not inclined to believe respondent's contention that with the issuance of the December 29, 1994
Order of the Department of Agrarian Reform, Region 2 in Administrative Case No. A0200 0028 94 ordering the cancellation of
petitioners' titles, the latter were relegated to the status of mere tenants.  Nor can the Court agree with the appellate court's
observation that through the forcible entry case, petitioners impliedly seek to exclude the property from land reform coverage;
there is no factual or legal basis for such conclusion, and no such inference could be logically generated.  To begin with, petitioners
acknowledge nothing less than ownership over the property.

Likewise, for the foregoing reasons, it may be concluded that petitioners exercised prior peaceful and uninterrupted possession of
the property until the same was interrupted by respondent's forcible intrusion in 2005; being farmer-beneficiaries under PD 27 and
finally having acquired title to the property in 1986, the Court is inclined to believe that petitioners continued to till their
landholdings without fail. Indeed, the evidence on record indicates such peaceful and undisturbed possession, while respondent's
claim that he entered the property as early as in 1993 remains doubtful, in light of his own admission that he sued petitioners for the
collection of supposed rentals which they owed him since 1995.  Petitioners' witnesses further corroborate their claim of prior
peaceful possession.  With regard to the portion of the property which is not titled to petitioners but over which they exercise
possessory rights, respondent has not sufficiently shown that he has any preferential right to the same either; the Court adheres to
the identical findings of fact of the MCTC and RTC.

Finally, respondent's submissions are unreliable for being contradictory.  In some of his pleadings, he claims to have acquired
possession over the property as early as in 1993; in others, he declares that he entered the land in 2003.  Notably, while he claimed
in his Answer in the MCTC that he entered the land in 1993, he declared in his appeal with the RTC and Petition for Review in the CA
that he took possession of the property only in 2003. [50]  Irreconcilable and unexplained contradictions on vital points in respondent's
account necessarily disclose a weakness in his case. [51]

Regarding the award of actual damages, which respondent prominently questioned all throughout the proceedings, this Court finds
that there is sufficient basis for the MCTC to award petitioners the total amount of P598,679.00 by way of actual damages.  The trial
court's findings on this score are based on the evidence presented by the petitioners and the respective statements of their
witnesses, who themselves are farmers cultivating lands adjacent to the subject property. [52]

WHEREFORE, the Petition is GRANTED.  The assailed February 19, 2010 Decision and November 9, 2010 Resolution of the Court of
Appeals in CA-G.R. SP No. 101423 are REVERSED and SET ASIDE.  The April 12, 2007 Decision of the 2nd Municipal Circuit Trial Court
of Cabagan-Delfin Albano, Isabela in Special Civil Action No. 475 is REINSTATED and AFFIRMED.

SO ORDERED.

SECOND DIVISION

G.R. No. 192026, October 01, 2014

AUTOMAT REALTY AND DEVELOPMENT CORPORATION, LITO CECILIA AND LEONOR LIM, Petitioners, v. SPOUSES
MARCIANO DELA CRUZ, SR. AND OFELIA DELA CRUZ, Respondents.

DECISION

LEONEN, J.:

Before us is a petition for review1 assailing the Court of Appeals’ August 19, 2009 decision2 affirming the Department of
Agrarian Reform Adjudication Board (DARAB) in finding the Spouses Dela Cruz to be lawful tenants, and its April 14, 2010
resolution denying reconsideration.

Petitioners pray that the Court of Appeals’ decision and resolution be set aside and a new one be issued nullifying the
DARAB’s February 8, 2005 decision3 and June 30, 2006 resolution,4 and reinstating the August 28, 2001 decision5 of the
Provincial Agrarian Reform Adjudicator (PARAD) for Laguna that dismissed the petition to maintain peaceful possession with
injunction filed by respondent Spouses Dela Cruz (respondent spouses).6 cralawred

The facts as found by the Court of Appeals are as follows.

Petitioner Automat Realty and Development Corporation (Automat) is the registered owner of two parcels of land located in
Barangay Malitlit, Sta. Rosa, Laguna, covered by TCT Nos. T-210027 and T-209077.7 cralawred

Automat acquired the 49,503-square-meter parcel of land covered by TCT No. T-209077 from El Sol Realty and Development
Corporation in 1990.  In the same year, Automat also acquired the 24,562-square-meter parcel of land covered by TCT No. 
T-210027 from Ofelia Carpo.8 cralawred

Petitioner Leonor Lim (petitioner Lim) was the real estate broker behind Automat’s purchase of the property.  Respondent
spouses sometimes referred to petitioner Lim some Sta. Rosa real estate properties available for sale.  They received a share
in the broker's fees either from the seller or buyer.9 cralawred

The land was not occupied in 1990 when it was purchased by Automat. Respondent Ofelia dela Cruz volunteered her services
to petitioner Lim as caretaker to prevent informal settlers from entering the property.  Automat agreed, through its
authorized administrator, petitioner Lim, on the condition that the caretaker would voluntarily vacate the premises upon
Automat’s demand.10 cralawred

Respondent spouses’ family stayed in the property as rent-paying tenants.  They cultivated and improved the land.  They
shared the produced palay with Automat through its authorized agent, petitioner Lito Cecilia (petitioner Cecilia).  He also
remitted the rentals paid by respondent Ofelia Dela Cruz to petitioner Lim in Makati and to Automat's office in Quezon
City.11
cralawred

Sometime in August 2000, Automat asked respondent spouses to vacate the premises as it was preparing the groundwork
for developing the property.12 cralawred

Respondent spouses refused to vacate unless they were paid compensation.  They claimed “they were agricultural tenants
[who] enjoyed security of tenure under the law.”13 cralawred

On October 19, 2000, respondent spouses filed a petition for maintenance of peaceful possession with prayer for preliminary
mandatory injunction and/or temporary restraining order against Automat before the PARAD for Laguna.14 cralawred

Automat had recovered possession of the property before respondent spouses filed their petition, and it continues to have
possession at present.15 cralawred

On August 28, 2001, the PARAD dismissed the complaint.  It declared, among other things, that “no agricultural tenancy can
be established between [the parties] under the attending factual circumstances.”16  The PARAD found it undisputed that when
petitioners entered the property in 1990, it was already classified as residential, commercial, and industrial land.  Thus, “it is
legally impossible for [the property] to be the subject of an agricultural tenancy relation[ship].”17 cralawred

On February 8, 2005, the DARAB reversed and set aside the PARAD's decision.  It declared respondent spouses as de jure
tenants of the landholding, thus, protected by security of tenure.18  It ordered Automat “to maintain [the spouses] in
peaceful possession and cultivation of the landholding.”19 cralawred

Automat, petitioner Lim, and petitioner Cecilia appealed with the Court of Appeals,20 arguing that (a) the DARAB had no
jurisdiction since the property is not agricultural land, (b) the board’s finding that respondent spouses are de jure  tenants
was not supported by evidence, and (c) the essential requisites for a valid agricultural tenancy relationship are not
present.21 cralawred

On August 19, 2009, the Court of Appeals affirmed the DARAB without prejudice to petitioners’ right to seek recourse from
the Department of Agrarian Reform Secretary on the other issues.22 cralawred

The Court of Appeals, like the DARAB, gave more weight to the following documentary evidence:23 (a) Municipal Agrarian
Reform Office’s Job H. Candinado’s October 18, 2000 certification stating that respondent spouses are the actual tillers of the
land;24 (b) sworn statements by Norma S. Bartolozo, Ricardo M. Saturno, and Resurrection E. Federiso who are residents and
owners of the adjoining lots;25 (c) Irrigation Superintendent Cesar C. Amador’s certification on the irrigation service fee paid
by respondent spouses;26 and (d) checks paid by respondent spouses as proof of rental.27  Petitioners filed for
reconsideration.28cralawred

Meanwhile, the Department of Agrarian Reform (DAR) Region IV-A CALABARZON issued two orders, both dated March 30,
2010, exempting the property from coverage of the Comprehensive Agrarian Reform Program (CARP).29 cralawred

On April 16, 2010, petitioners filed a supplemental motion for reconsideration informing the Court of Appeals of these
exemption orders.30 cralawred

Two days earlier or on April 14, 2010, the Court of Appeals had denied reconsideration.  On May 4, 2010, it noted without
action the supplemental motion for reconsideration.31 cralawred

Hence, petitioners Automat, Leonor Lim, and Lito Cecilia appealed before this court.

Petitioners submit that the Court of Appeals erred in applying Sta. Ana v. Carpo32 in support of its ruling that the parcels of
land are agricultural in nature and that an agricultural tenancy relationship existed between Automat and respondent
spouses.33  They also argue that the DAR exemption orders confirmed their “consistent position that the DARAB never had
jurisdiction over the subject matter of this case.”34 cralawred

Respondent spouses counter that the Court of Appeals correctly ruled that a tenancy relationship existed between Automat
and respondent spouses.35  They argue that an implied contract of tenancy was created when they were allowed to till the
land for 10 years.36 Consequently, they are entitled to security of tenure as tenants.37  They add that the “subsequent
reclassification of agricultural lands into non-agricultural [land] after the effectivity of the (Comprehensive Agrarian Reform
Law) CARL does not automatically remove the land from the coverage of the Comprehensive Agrarian Reform Program [as a]
valid certificate of exemption o[r] exclusion, or a duly approved conversion order, must first be secured.”38 cralawred

The issues for resolution are as follows: chanroblesvirtuallawlibrary

I. Whether an agricultural tenancy relationship exists between Automat and respondent spouses; and

II. Whether the DAR exemption orders have an effect on the DARAB’s earlier exercise of jurisdiction.

I
No agricultural tenancy relationship

The elements to constitute a tenancy relationship are the following: “(1) the parties are the landowner and the tenant or
agricultural lessee; (2) the subject matter of the relationship is agricultural land; (3) there is consent between the parties to
the relationship; (4) the purpose of the relationship is to bring about agricultural production; (5) there is personal cultivation
on the part of the tenant or agricultural lessee; and (6) the harvest is shared between the landowner and the tenant or
agricultural lessee.” 39 cralawred

There must be substantial evidence on the presence of all these requisites; otherwise, there is no de jure tenant.40  Only
those who have established de jure tenant status are entitled to security of tenure and coverage under tenancy laws.41 cralawred

Well-settled is the rule that he who alleges must prove.42  Respondent spouses filed the petition before the PARAD, praying to
be maintained in peaceful possession of the property.  They were the ones claiming they had a tenancy relationship with
Automat.  Thus, they had the burden of proof to show that such relationship existed.

I.A
Actual tillers

On the first requisite, respondent spouses contend that the Municipal Agrarian Reform Office (MARO) Officer Job A.
Candanido issued a certification on October 18, 2000 that respondent spouses are the actual tillers of the land.43  Three
farmers of adjacent lands44 testified on the same fact — that respondent spouses are the actual tillers.45  Irrigation
Superintendent Cesar Amador also issued a certification that respondent spouses paid the irrigation service fees.46 cralawred

Petitioners counter with MARO Officer Candanido’s March 23, 2001 amended certification.  This later certification states that
there are “No Records of Tenancy or written Agricultural Leasehold Contract to any farmer/tiller”47 in relation to the property.

This court has held that a MARO certification “concerning the presence or the absence of a tenancy relationship between the
contending parties, is considered merely preliminary or provisional, hence, such certification does not bind the judiciary.”48 cralawred

The amended certification does not bind this court.  Several elements must be present before the courts can conclude that a
tenancy relationship exists.  MARO certifications are limited to factual determinations such as the presence of actual tillers. 
It cannot make legal conclusions on the existence of a tenancy agreement.

Thus, petitioners’ reliance on the amended MARO certification fails to persuade.

Nevertheless, the finding in the original MARO certification on the presence of actual tillers is closely related to the nature of
the land.  This brings us to the second requisite that the property must be agricultural land.

I.B
Not agricultural land

Petitioners submit that the two parcels of land were classified as industrial prior to the effectivity of CARL on June 15, 1988. 
This was done through the Municipal Zoning Ordinance of Sta. Rosa Laguna No. XVIII, series of 1981, approved on
December 2, 1981 by the then Human Settlements Regulatory Commission, now the Housing and Land Use Regulatory Board
or HLURB.49  This classification was reiterated in the town plan or Zoning Ordinance No. 20-91 of Sta. Rosa, Laguna,
approving the town plan classifying the lands situated in Barangay Malitlit as industrial land.50 cralawred

Respondent spouses counter that the reclassification of the lands into non-agricultural was done in 1995, after the effectivity
of CARL, by virtue of Sangguniang Bayan Resolution as approved by the Sangguniang Panlalawigan Resolution No. 811,
series of 1995.  Section 20 of the Local Government Code51 governs the reclassification of land in that “[a] city or
municipality may, through an ordinance passed by the Sanggunian after conducting public hearing for the purpose, authorize
[sic] the reclassification of agricultural lands. . . .”52 cralawred

Respondent spouses then argue that a subsequent reclassification does not automatically remove the land from CARP
coverage.  “A valid certificate of exemption [or] exclusion, or a duly approved conversion order, must first be
secured. . . .”53cralawred

The land in this case cannot be considered as agricultural land.

First, it is undisputed that the DAR Region IV-A CALABARZON had already issued two orders,54 both dated March 30, 2010,
exempting the property from CARP coverage.55  These orders were submitted before the Court of Appeals56 and raised again
before this court.  The orders provide in part: chanRoblesvirtualLawlibrary

Department of Justice Opinion No. 44, series of 1990 ruled that “Lands already classified as commercial, industrial or
residential use and approved by the HLURB prior to the effectivity of RA No. 6657 on June 15, 1988 no longer need any
conversion clearance. Moreover, the term agricultural lands as defined in Section 3 (c) of RA 6657 do not include those lands
already classified as mineral, forest, residential, commercial or industrial.  The case at hand shows that the subject
property is within the non-agricultural zone prior to 15 June 1988.

Further, said lands reclassified to non-agricultural prior to June 15, 1988 ceased to be considered as
“agricultural lands” and removed from the coverage of the Comprehensive Agrarian Reform Program.

After a careful evaluation of the documents presented, this office finds substantial compliance by the applicant with the
documentary requirements prescribed under DAR Administrative Order No. 04, Series of 2003.57 (Emphasis supplied)

The exemption orders clearly provide that the lands were reclassified to non-agricultural prior to June 15, 1988, or prior to
the effectivity of Republic Act No. 6657 known as the Comprehensive Agrarian Reform Law of 1988 (CARL).58 cralawred

Section 3(c) of the CARL defines “agricultural land” as “land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land.”

This meaning was further explained by DAR Administrative Order No. 1, Series of 1990, otherwise known as the Revised
Rules and Regulations Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses: chanRoblesvirtualLawlibrary

. . . . Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified as mineral or
forest by the Department of Environment and Natural Resources (DENR) and its predecessor agencies, and not classified in
town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its
preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use. 59 (Emphasis
in the original)

While the earlier Republic Act No. 3844,60 otherwise known as the Agricultural Land Reform Code, focuses on actual use of
the land when it defines “agricultural land” as “land devoted to any growth, including but not limited to crop lands, salt beds,
fish ponds, idle land61 and abandoned land62 as defined in paragraphs 18 and 19 of this Section, respectively,”63 this must be
read with the later Republic Act No. 6675 (CARL) that qualifies the definition with land classifications.

Second, in Sta. Ana v. Carpo64 cited at length by the Court of Appeals, this court found that the PARAD and the Court of
Appeals both acted without jurisdiction in ruling that “the land had become non-agricultural based on a zoning ordinance of
1981 – on the strength of a mere vicinity map.”65 cralawred

In Sta. Ana, the landowner had the burden of proof in filing a complaint for ejectment due to non-payment of lease rentals. 
In the instant case, respondent spouses have the burden of proving all elements of tenancy in filing their petition to be
maintained in peaceful possession of the property.  Unlike the facts in Sta. Ana, respondent spouses do not contend that the
reclassification of the land was by a “mere vicinity map.”  Their contention is that it was made only in 1995, thus, the land
remains within CARP coverage unless petitioners secure a certificate of exemption or exclusion, or a duly approved
conversion order.

As earlier discussed, petitioners have secured exemption orders for the lands.

I.C
Consent; nature of relationship

Respondent spouses allege that petitioners “never contest[ed] nor refute[d] [respondent’s] cultivation and occupation of
residence in the land (since 1990) for the past ten (10) years or so.”66  This brings us to the third requisite on consent.

Respondent spouses argue that petitioners’ inaction or failure to refute their occupation and cultivation of the land for the
past 10 years, coupled with the acceptance of payments for use of the land, is “indicative of consent, if not acquiescence
to . . . tenancy relations.”67  They contend that a “[t]enancy relationship may be deemed established by implied agreement
[when a] landowner allows another [to] cultivate his land in the concept of a tenant for a period of ten (10) years.”68  They
add that Automat cannot deny the authority of administrator, petitioner Cecilia, whose acts are binding on the landowner.69 cralawred

On the other hand, petitioners argue that the acts of the parties “taken in their entirety must be demonstrative of an intent
to continue a prior tenancy relationship established by the landholder.”70  There should be “no issue . . . [on] the authority of
the overseer to establish a real right over the land.”71 cralawred

Petitioners contend that there is no prior tenancy relationship to speak of between respondent spouses and Automat. 
Petitioner Cecilia executed an affidavit submitted to the DARAB categorically denying respondent spouses’ allegations that he
instituted them as agricultural tenants.72  Petitioner Lim executed a similar affidavit “debunking [respondent spouses’] claim
that they were instituted as agricultural tenants.”73  Petitioners, thus, emphasize that petitioners Cecilia and Lim’s authority
to establish a real right over the land has been properly questioned, and no special power of attorney74 has been presented
by respondent spouses on such authority.75 cralawred

The PARAD agreed in that “it would be totally behind [sic] human comprehension for Automat to institute a tenant on their
untenanted lands [as] [i]t has been of public knowledge that landowners were paying millions of pesos a hectare just to get
rid of their tenants in Sta. Rosa, Laguna since 1989 so that they could fully and freely [dispose] and [use] their lands. . . . it
would be easier for this Office to believe and be convinced that, in deed [sic], if ever petitioners were allowed entry into the
land it would be for any other purposes other than the establishment of a tenancy [relationship].”76 cralawred

This court has ruled that “[t]enancy is not a purely factual relationship dependent on what the alleged tenant does upon the
land [but] is also a legal relationship.”77  Tenancy relationship cannot be presumed.  The allegation of its existence must be
proven by evidence, and working on another’s landholding raises no presumption of an agricultural tenancy.78  Consequently,
the landowner’s consent to an agricultural tenancy relationship must be shown.

While this court agrees with the conclusion that no agricultural tenancy relationship can exist in this case, we find that the
element of consent in establishing a relationship, not necessarily of agricultural tenancy, is present.

This court finds that Automat consented to a relationship with respondent spouses when (a) through petitioner Lim, it
constituted respondent Ofelia dela Cruz as caretaker of the property with the understanding that she would vacate when
asked by Automat, and (b) it accepted rental payments from respondent spouses.

First, petitioner Lim executed an affidavit stating that “Mrs. Ofelia dela Cruz or Nida volunteered to act as caretaker of the
properties bought by Automat Realty only for the purpose of preventing squatters from entering the same and on the
understanding that she would vacate the properties voluntarily when asked to do so by Automat Realty.”79 cralawred

Automat confirmed this agreement entered into by petitioner Lim on its behalf when it included such allegation in the
statement of facts in its memorandum with this court.80 cralawred

While Automat questioned petitioners Lim and Cecilia’s authority to establish a real right over the property in that
“[r]espondents had not shown any special power of attorney showing that Cecilia was authorized by Automat Realty to install
any agricultural tenant on the latter’s properties,”81 it never denied giving consent to installing respondent spouses as
caretakers of the land.

Second, while both petitioners Lim and Cecilia denied in their affidavits being the authorized administrator of
Automat,82 petitioner Cecilia nevertheless confirms accepting checks as rental payments from respondent spouses for
convenience, considering that he often went to Makati where petitioner Lim holds office and Quezon City where Automat has
its office.83  Automat never denied receipt of these rentals.

Respondent spouses’ petition for maintenance of peaceful possession filed with the PARAD alleged that “as regards the
sharing arrangement derived from the rice/palay harvests, petitioners were verbally instructed to deliver the same to . . .
Lito Cecilia who was authorized to collect for and in behalf of Automat every cropping period, the amount of Fifteen Thousand
Five Hundred Pesos covering the two (2) parcels of land.”84  They attached photocopies of five (5) checks in the name of
Automat for the following amounts: (a) P8,000.00 dated December 31, 1993; (b) P7,500.00 dated December 31, 1993; (c)
P7,500.00 dated January 5, 1995; (d) P8,000.00 dated January 10, 1995; and (e) P7,500.00 dated June 22, 1997.85 cralawred

I.C.1
Civil lease

Automat is considered to have consented to a civil lease.86 cralawred

Article 1643 of the Civil Code provides that “[i]n the lease of things, one of the parties binds himself to give to another the
enjoyment or use of a thing for a price certain, and for a period which may be definite or indefinite. . . .”

The Civil Code accommodates unwritten lease agreements such as Article 1682 that provides: “The lease of a piece of rural
land, when its duration has not been fixed, is understood to have been for all the time necessary for the gathering of the
fruits which the whole estate leased may yield in one year, or which it may yield once, although two or more years may have
to elapse for the purpose.”

On the other hand, Article 1687 states that “[i]f the period for the lease has not been fixed, it is understood to be from year
to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly;
and from day to day, if the rent is to be paid daily. . . .”  Applying this provision, “the contract expires at the end of such
month [year, week, or day] unless prior thereto, the extension of said term has been sought by appropriate action and
judgment is, eventually, rendered therein granting the relief.”87 cralawred

Under the statute of frauds, an unwritten lease agreement for a period of more than one year is unenforceable unless
ratified.88
cralawred

Respondent spouses were allowed to stay in the property as caretakers and, in turn, they paid petitioners rent for their use
of the property.  Petitioners’ acceptance of rental payments may be considered as ratification89 of an unwritten lease
agreement whose period depends on their agreed frequency of rental payments.

I.C.2
Builder, planter, sower

In the alternative, if the facts can show that the proper case involves the Civil Code provisions on builders, planters, and
sowers, respondent spouses may be considered as builders, planters, or sowers in good faith, provided such is proven before
the proper court.

Article 448 of the Civil Code provides that if the landowner opts to “appropriate as his own the works, sowing or planting,” he
must pay indemnity to the builder, planter, or sower in good faith in accordance with the relevant provisions of the Code: chanRoblesvirtualLawlibrary

ART. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the
right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in
articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the
proper rent.  However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of
the building or trees.  In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the
court shall fix the terms thereof.

....

ART. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has
defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase in value
which the thing may have acquired by reason thereof.
....

Art. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the possessor in good faith; but he may remove
the ornaments with which he has embellished the principal thing if it suffers no injury thereby, and if his successor in the
possession does not prefer to refund the amount expended. (Emphasis supplied)

Article 448 of the Civil Code on builders, planters, and sowers in good faith applies when these parties have a claim of title
over the property.90  This court has expanded this limited definition in jurisprudence: chanRoblesvirtualLawlibrary

This Court has ruled that this provision covers only cases in which the builders, sowers or planters believe themselves to be
owners of the land or, at least, to have a claim of title thereto.  It does not apply when the interest is merely that of a
holder, such as a mere tenant, agent or usufructuary.  From these pronouncements, good faith is identified by the belief that
the land is owned; or that — by some title — one has the right to build, plant, or sow thereon.

However, in some special cases, this Court has used Article 448 by recognizing good faith beyond this limited definition. 
Thus, in Del Campo v. Abesia, this provision was applied to whose house — despite having been built at the time he was still
co-owner — overlapped with the land of another.  This article was also applied to cases wherein a builder had
constructed improvements with the consent of the owner.  The Court ruled that the law deemed the builder to be in
good faith.  In Sarmiento v. Agana, the builders were found to be in good faith despite their reliance on the consent of
another, whom they had mistakenly believed to be the owner of the land.91 (Emphasis supplied)

Respondent spouses alleged in their petition before the PARAD that they “introduced various agricultural improvements
purposely to make the said landholdings productive, harvests of which were remitted and delivered to . . . AUTOMAT through
its administrator LITO CECILIA. . . .”92
cralawred

The Court of Appeals’ recitation of facts also state that respondent spouses “cultivated the area, improved the same and
shared the palay produced therein to the owner, Automat, through its authorized agent, Lito Cecilia.”93 cralawred

Petitioners allege in their memorandum before this court that at the time Automat purchased the property, these “were not
irrigated and they were not planted to rice or any other agricultural crop.”94  No further allegations were made on whether
the property was planted with trees or crops after its purchase in 1990, until respondent spouses were asked to vacate in
2000.

However, this court is not a trier of facts and can only entertain questions of law.95  This court also applies the rule that
damages must be proven in order to be awarded.96 cralawred

The causes of action of respondent spouses, if these can be supported by the facts and evidence, may be pursued in the
proper case either under builder, planter, or sower provisions, or civil lease provisions before the proper court.

II
DARAB jurisdiction

Petitioners submit that in light of the exemption orders, “[a]s a matter of law, the subject properties were never subject to
the jurisdiction of the DARAB, which issued the decision erroneously affirmed by the Court of Appeals.”97 cralawred

In the same breath, petitioners recognize the PARAD’s jurisdiction in praying that this court “reinstat[e] the Decision of the
Provincial Agrarian Reform Adjudication (PARAD) for the Province of Laguna dated August 28, 2001 in Reg Case No. R-0403-
0041, dismissing the ‘Petition to Maintain Peaceful Possession with Injunction’ filed by the respondents.”98 cralawred

The DARAB has “primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian
disputes involving the implementation of the [CARP] . . . and other agrarian laws and their implementing rules and
regulations:”99cralawred

RULE II
Jurisdiction Of The Adjudication Board

SECTION 1. Primary and Exclusive Original and Appellate Jurisdiction. – The Board shall have primary and exclusive
jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes involving the implementation of
the Comprehensive Agrarian Reform Program (CARP) under Republic Act No. 6657, Executive Order Nos. 228, 229, and 129-
A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27 and other agrarian laws and their
implementing rules and regulations. Specifically, such jurisdiction shall include but not be limited to cases involving the
following:
a) The rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation and use of all
agricultural lands covered by the CARP and other agrarian laws;

b) The valuation of land, and the preliminary determination and payment of just compensation, fixing and collection of lease
rentals, disturbance compensation, amortization payments, and similar disputes concerning the functions of the Land Bank of
the Philippines (LBP);

c) The annulment or cancellation of lease contracts or deeds of sale or their amendments involving lands under the
administration and disposition of the DAR or LBP;

d) Those cases arising from, or connected with membership or representation in compact farms, farmers’ cooperatives and
other registered farmers’ associations or organizations, related to lands covered by the CARP and other agrarian laws;

e) Those involving the sale, alienation, mortgage, foreclosure, pre-emption and redemption of agricultural lands under the
coverage of the CARP or other agrarian laws;

f) Those involving the issuance, correction and cancellation of Certificates of Land Ownership Award (CLOAs) and
Emancipation Patents (EPs) which are registered with the Land Registration Authority;

g) Those cases previously falling under the original and exclusive jurisdiction of the defunct Court of Agrarian Relations under
Section 12 of Presidential No. 946, except sub-paragraph (q) thereof and Presidential Decree No. 815.
It is understood that the aforementioned cases, complaints or petitions were filed with the DARAB after August 29, 1987.
Matters involving strictly the administrative implementation of Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent rules shall be the
exclusive prerogative of and cognizable by the Secretary of the DAR.

h) And such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR.

SECTION 2. Jurisdiction of the Regional and Provincial Adjudicators. – The RARAD and the PARAD shall have concurrent
original jurisdiction with the Board to hear, determine and adjudicate all agrarian cases and disputes, and incidents in
connection therewith, arising within their assigned territorial jurisdiction.100 (Emphasis supplied)

“Agrarian dispute” has been defined under Section 3(d) of Republic Act No. 6657101 as referring to “any controversy relating
to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture. . . .”

This court has held that “jurisdiction of a tribunal, including a quasi-judicial office or government agency, over the nature and
subject matter of a petition or complaint is determined by the material allegations therein and the character of the relief
prayed for irrespective of whether the petitioner or complainant is entitled to any or all such reliefs.”102
cralawred

The petition filed by respondent spouses before the PARAD alleged that “AUTOMAT REALTY AND DEV’T CORP. . . is the
registered owner of two (2) parcels of agricultural land. . .”,103 respondent spouses were “instituted as tenant-tillers of the
two (2) parcels of rice landholdings by . . . AUTOMAT through its authorized administrator LITO CECILIA”, 104 and that
“shares of the harvests of . . . AUTOMAT were paid and delivered in the form of checks payable in cash in the name of . . .
AUTOMAT. . . .”105 cralawred

However, jurisdiction is conferred by law, and “an order or decision rendered by a tribunal or agency without jurisdiction is a
total nullity.”106
cralawred

The DAR exemption orders have determined with certainty that the lands were reclassified as non-agricultural prior to June
15, 1988.  Consequently, the petition filed by respondent spouses in 2000 before the PARAD did not involve “lands devoted
to agriculture” and, necessarily, it could not have involved any controversy relating to such land.  Absent an “agrarian
dispute,” the instant case cannot fall under the limited jurisdiction of the DARAB as a quasi-judicial body.

WHEREFORE, the petition is GRANTED.  The Court of Appeals’ August 19, 2009 decision and April 14, 2010 resolution
are REVERSED and SET ASIDE.  The PARAD’s decision dated August 28, 2001 and DARAB’s decision dated February 8,
2005 are declared NULL and VOID for lack of jurisdiction, without prejudice to the filing of a civil case with the proper court.

SO ORDERED. cralawlawlibrary