CASES: ON TENANCY RELATIONS REQUISITES G.R. No.

108941 July 6, 2000

REYNALDO BEJASA AND ERLINDA BEJASA, petitioners, vs. THE HONORABLE COURT OF APPEALS, Special Sixteenth Division, ISABEL CANDELARIA and JAMIE DINGLASAN, respondents. PARDO, J.: This is a petition1 assailing the decision of the Court of Appeals2 reversing the decision of the Regional Trial Court, Calapan, Oriental Mindoro3 and ordering petitioners Reynaldo and Erlinda Bejasa (hereinafter referred to as "the Bejasas") to surrender the possession of the disputed landholdings to respondent Isabel Candelaria ("hereinafter referred to as Candelaria") and to pay her annual rental from 1986, attorney's fees, litigation expenses and costs.4 Inescapably, the appeal involves the determination of a factual issue. Whether a person is a tenant is a factual question.5 The factual conclusions of the trial court and the Court of Appeals are contradictory and we are constrained to review the same.6 We state the undisputed incidents. This case involves two (2) parcels of land covered by TCT No. T-581917 and TCT No. T-59172,8 measuring 16 hectares and 6 hectares more or less, situated in Barangay Del Pilar, Naujan, Oriental Mindoro. The parcels of land are indisputably owned by Isabel Candelaria. On October 20, 1974, Candelaria entered into a three-year lease agreement over the land with Pio Malabanan (hereinafter referred to as "Malabanan"). In the contract, Malabanan agreed among other things: "to clear, clean and cultivate the land, to purchase or procure calamansi, citrus and rambutan seeds or seedlings, to attend and care for whatever plants are thereon existing, to make the necessary harvest of fruits, etc."9 Sometime in 1973, Malabanan hired the Bejasas to plant on the land and to clear it. The Bejasas claim that they planted citrus, calamansi, rambutan and banana trees on the land and shouldered all expenses of production. On May 3, 1977, Candelaria gave Malabanan a six-year usufruct over the land, modifying their first agreement. As per the agreement, Malabanan was under no obligation to share the harvests with Candelaria.10 Sometime in 1983, Malabanan died. On September 21, 1984, Candelaria constituted respondent Jaime Dinglasan (hereinafter referred to as "Jaime) as her attorney-infact, having powers of administration over the disputed land.11 On October 26, 1984, Candelaria entered into a new lease contract over the land with Victoria Dinglasan, Jaime's wife (hereinafter referred to as "Victoria"). The contract had a term of one year.12 On December 30, 1984, the Bejasas agreed to pay Victoria rent of P15,000.00 in consideration of an "aryenduhan" or "pakyaw na bunga"13 agreement, with a term of one year. The agreement is below quoted:14 "Ako si Victoria Dinglasan bilang tagapamahala ni Isabel Candelaria ay ipinaaryendo kay Reynaldo Bejasa ang lupang dating aryendo ni Pio Malabanan sa nasabing Ginang Buhat sa ika-30 ng Disyembre 1984 hanggang Ika-30 ng Disyembre 1985. Ako ay tumanggap sa kanya ng pitong libong piso at ito ay daragdagan pa niya ng walong libong piso (P8,000) dito sa katapusan ng buwan ng Disyembre 1984. (signed) Reynaldo Bejasa (signed) Victoria Dinglasan

"Witness

"(unintelligible) "(unintelligible)" During the first week of December 1984, the Bejasas paid Victoria P7,000.00 as agreed. The balance of P8,000.00 was not fully paid. Only the amount of P4,000.00 was paid on January 11, 1985.15 After the aryenduhan expired, despite Victoria's demand to vacate the land, the Bejasas continued to stay on the land and did not give any consideration for its use, be it in the form of rent or a shared harvest.16 On April 7, 1987, Candelaria and the Dinglasans again entered into a three-year lease agreement over the land.17 The special power of attorney in favor of Jaime was also renewed by Candelaria on the same date.18 On April 30, 1987, Jaime filed a complaint before the Commission on the Settlement of Land Problems ("COSLAP"), Calapan, Oriental Mindoro seeking ejectment of the Bejasas. On May 26, 1987, COSLAP dismissed the complaint. Sometime in June 1987, Jaime filed a complaint with the Regional Trial Court, Calapan Oriental, Mindoro19 against the Bejasas for "Recovery of possession with preliminary mandatory injunction and damages." The case was referred to the Department of Agrarian Reform ("DAR"). On December 28, 1987, the DAR certified that the case was not proper for trial before the civil courts.20 The trial court dismissed Jaime's complaint, including the Bejasas' counterclaim for leasehold, home lot and damages. On February 15, 1988, the Bejasas filed with the Regional Trial Court of Calapan, Oriental Mindoro a complaint for "confirmation of leasehold and home lot with recovery of damages."21 against Isabel Candelaria and Jaime Dinglasan.22 On February 20, 1991, after trial, the trial court ruled in favor of the Bejasas.23First, they reasoned that a tenancy relationship was established.24 This relationship can be created by and between a "person who furnishes the landholding as owner, civil law lessee, usufructuary, or legal possessor and the person who personally cultivates the same."25 Second, as bona-fide tenant-tillers, the Bejasas have security of tenure.26 The lower court ruled:27 "ACCORDINGLY, judgment is hereby rendered in favor of the plaintiffs and against the defendants, as follows: "(1) Ordering the defendants to maintain plaintiffs in the peaceful possession and cultivation of the lands in question and to respect plaintiff's security of tenure on the landholdings of Isabel Candelaria and the home lot presently occupied by them; "(2) Confirming the leasehold tenancy system between the plaintiffs as the lawful tenant-tillers and the landholder, Isabel Candelaria, with the same lease rental of P20,000.00 per calendar year for the use of the lands in question and thereafter, same landholdings be placed under the operation land transfer pursuant to Republic Act No. 6657; "(3) Ordering the defendants to pay jointly and severally the plaintiffs the amount of P115,500.00 representing the sale of calamansi which were unlawfully gathered by Jaime Dinglasan and his men for the period July to December, 1987 and which were supported by receipts and duly proven, with formal written accounting, plus the sum of P346,500.00 representing the would-be harvests on citrus, calamansi, rambutan and bananas for the years 1988, 1989 and 1990, with legal rate of interest thereon from the date of the filing of the instant complaint until fully paid; "(4) Ordering the defendants to pay plaintiffs jointly and severally the amount of P30,000.00 as attorney's fee and expenses of litigation; and "(5) Authorizing the plaintiffs as tenant-farmers to litigate as pauper not only in this Court but up to the appellate courts in accordance with Section 16 of P. D. No. 946. "SO ORDERED." On February 20, 1991, respondents filed their notice of appeal.28

On February 9, 1993, the Court of Appeals promulgated a decision reversing the trial court's ruling.29 Reasoning:First, not all requisites necessary for a leasehold tenancy relationship were met.30 There was no consent given by the landowner. The consent of former civil law lessee, Malabanan, was not enough to create a tenancy relationship.31 Second, when Malabanan engaged the services of the Bejasas, he only constituted them as mere overseers and did not make them "permanent tenants". Verily, even Malabanan knew that his contract with Candelaria prohibited sublease.32 Third, the contract ("aryenduhan") between the Bejasas and Victoria, by its very terms, expired after one year. The contract did not provide for sharing of harvests, means of production, personal cultivation and the like.33 Fourth, sharing of harvest was not proven. The testimony of Reynaldo Bejasa on this point is selfserving. Fifth, the element of personal cultivation was not proven. Reynaldo Bejasa himself admitted that he hired laborers to clear and cultivate the land.34 The Court of Appeals disposed of the case, thus:35 "WHEREFORE, premises considered, the judgment appealed from is hereby REVERSED and SET ASIDE. The interlocutory order issued on September 5, 1988 is DISSOLVED and the appellees are hereby ordered to surrender possession of the disputed landholdings to appellant Isabel Candelaria and pay her the amount of P15,000.00 in annual rents commencing from 1986 plus attorney's fees and litigation expenses of P35,000.00 and costs. "SO ORDERED." Hence, this appeal filed on March 3, 1993.36 The issue raised is whether there is a tenancy relationship in favor of the Bejasas. The elements of a tenancy relationship are:37 (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of harvests. After examining the three relevant relationships in this case, we find that there is no tenancy relationship between the parties. Malabanan and the Bejasas. True, Malabanan (as Candelaria's usufructuary) allowed the Bejasas to stay on and cultivate the land. However, even if we assume that he had the authority to give consent to the creation of a tenancy relation, still, no such relation existed. There was no proof that they shared the harvests. Reynaldo Bejasa testified that as consideration for the possession of the land, he agreed to deliver the landowner's share (1/5 of the harvest) to Malabanan.38 Only Reynaldo Bejasa's word was presented to prove this. Even this is cast into suspicion. At one time Reynaldo categorically stated that 25% of the harvest went to him, that 25% was for Malabanan and 50% went to the landowner, Candelaria.39 Later on he stated that the landowner's share was merely one fifth.40 In Chico v. Court of Appeals,41 we faulted private respondents for failing to prove sharing of harvests since "no receipt, or any other evidence was presented."42 We added that "Self serving statements ... are inadequate; proof must be adduced."43 Candelaria and the Bejasas. Between them, there is no tenancy relationship. Candelaria as landowner never gave her consent. The Bejasas admit that prior to 1984, they had no contact with Candelaria.44 They acknowledge that Candelaria could argue that she did not know of Malabanan's arrangement with them.45 True enough Candelaria disavowed any knowledge that the Bejasas during Malabanan's lease possessed the land.46 However, the Bejasas claim that this defect was cured when Candelaria agreed to lease the land to the Bejasas for P20,000.00 per annum, when Malabanan died in 1983.47 We do not agree. In a tenancy agreement, consideration should be in the form of harvest sharing. Even assuming that Candelaria agreed to lease it out to the Bejasas for P20,000 per year,48such agreement did not create a tenancy relationship, but a mere civil law lease.

Dinglasan and the Bejasas. Even assuming that the Dinglasans had the authority as civil law lessees of the land to bind it in a tenancy agreement, there is no proof that they did. Again, there was no agreement as to harvest sharing. The only agreement between them is the "aryenduhan",49which states in no uncertain terms the monetary consideration to be paid, and the term of the contract. Not all the elements of tenancy being met, we deny the petition. WHEREFORE, we AFFIRM the decision of the Court of Appeals of February 9, 1993, in toto. No costs. SO ORDERED. [G.R. No. 169691, July 23, 2008] PEDRITO SALMORIN, PETITIONER, VS. DR. PEDRO ZALDIVAR, RESPONDENT. RESOLUTION CORONA, J.: In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pedrito Salmorin assails the January 31, 2005 decision[1] and September 8, 2005 resolution[2] of the Court of Appeals (CA). On July 15, 1989, respondent Dr. Pedro Zaldivar, as legal possessor[3] of Lot No. 7481-H[4] situated in Mapatag, Hamtic, Antique, entered into an agreement (Kasugtanan)[5] with Salmorin designating him as administrator of the lot with a monthly salary of P150. Salmorin allegedly did not comply with the terms of theKasugtanan when he failed to till the vacant areas.[6] This compelled Zaldivar to terminate his services and eject him from the lot. When Salmorin refused to vacate the property, Zaldivar filed a complaint for unlawful detainer against him in the Municipal Circuit Trial Court (MCTC) of Tobias Fornier-Anini-y-Hamtic. The complaint was docketed as Civil Case No. 229-H. In his answer, Salmorin alleged the existence of a tenancy relationship between him and Zaldivar. Thus, he claimed that the case was an agrarian matter over which the MCTC had no jurisdiction. After an examination of the position papers submitted by the parties, the MCTC found that the case was in the nature of an agrarian dispute and dismissed the case for lack of jurisdiction. Zaldivar appealed to the Regional Trial Court (RTC) of San Jose, Antique which ruled in his favor. The RTC found that the consent of the landowner and sharing of the harvest, which were requisites for the existence of a tenancy relationship,[7] did not exist. Thus, it ruled that the MCTC had jurisdiction over the case and ordered the reinstatement of Civil Case No. 229-H. Salmorin appealed the RTC decision to the CA but the latter upheld the decision of the RTC. He now seeks a reversal of the RTC and CA decisions. Salmorin argues that the regular court had no jurisdiction over the case and Zaldivar had no right to possess the subject property. We disagree. On one hand, the Department of Agrarian Reform Adjudication Board has primary and exclusive jurisdiction over agrarian related cases, i.e., rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation and use of all agricultural lands covered by the Comprehensive Agrarian Reform Law and other related agrarian laws, or those cases involving the ejectment and dispossession of tenants and/or leaseholders.[8] On the other, Section 33 (2) of Batas Pambansa Blg. 129, as amended by Republic Act 7691, provides that exclusive original jurisdiction over cases of forcible entry and unlawful detainer is lodged with the metropolitan trial courts, municipal trial courts and MCTCs. It is well-settled that the jurisdiction of a court over the subject matter of the action is determined by the material allegations of the complaint and the law, irrespective of whether the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.[9] In his complaint, Zaldivar alleged the following: (1) he possessed the subject lot; (2) (3) (4) he instituted Salmorin as administrator thereof; Salmorin failed to administer the subject lot by not having the vacant areas thereof planted; for Salmorin's failure to administer the subject lot, Salmorin's service as administrator was terminated;

(5)

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

(6) Salmorin refused to vacate the subject lot without justification. Thus, Zaldivar's complaint concerned the unlawful detainer by Salmorin of the subject lot. This matter is properly within the jurisdiction of the regular courts. The allegation of tenancy in Salmorin's answer did not automatically deprive the MCTC of its jurisdiction. In Hilado et al. v. Chavez et al.,[10] we ruled: [T]hat the jurisdiction of the court over the nature of the action and the subject matter thereof cannot be made to depend upon the defenses set up in the court or upon a motion to dismiss. Otherwise, the question of jurisdiction would depend almost entirely on the defendant. xxx The [MTCC] does not lose its jurisdiction over an ejectment case by the simple expedient of a party raising as defense therein the alleged existence of a tenancy relationship between the parties. But it is the duty of the court to receive evidence to determine the allegations of tenancy. If after hearing, tenancy had in fact been shown to be the real issue, the court should dismiss the case for lack of jurisdiction. (emphasis supplied; citations omitted) Contrary to the findings of the MCTC, both the RTC and the CA found that there was no tenancy relationship between Salmorin and Zaldivar. A tenancy relationship cannot be presumed.[11] In Saul v. Suarez, [12] we held: There must be evidence to prove the tenancy relations such that all its indispensable elements must be established, to wit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvests. All these requisites are necessary to create tenancy relationship, and the absence of one or more requisites will not make the alleged tenant a de facto tenant. All these elements must concur. It is not enough that they are alleged. To divest the MCTC of jurisdiction, these elements must all be shown to be present.[13] Tenancy is a legal relationship established by the existence of particular facts as required by law. In this case, the RTC and CA correctly found that the third and sixth elements, namely, consent of the landowner and sharing of the harvests, respectively, were absent. We find no compelling reason to disturb the factual findings of the RTC and the CA. The fact alone of working on another's landholding does not raise a presumption of the existence of agricultural tenancy.[14] There must be substantial evidence on record adequate to prove the element of sharing. Moreover, in Rivera v. Santiago,[15]we stressed: [T]hat it is not unusual for a landowner to receive the produce of the land from a caretaker who sows thereon. The fact of receipt, without an agreed system of sharing, does not ipso facto create a tenancy. Salmorin's attempt to persuade us by way of a certification coming from the Barangay Agrarian Reform Committee attesting that he was a bona fide tenant of Zaldivar deserves scant consideration. Certifications issued by municipal agrarian reform officers are not binding on the courts. This rule was articulated in Bautista v. Mag-isa vda. de Villena: [16] In a given locality, merely preliminary or provisional are the certifications or findings of the secretary of agrarian reform (or of an authorized representative) concerning the presence or the absence of a tenancy relationship between the contending parties; hence, such certifications do not bind the judiciary. We note that agricultural share tenancy was declared contrary to public policy and, thus, abolished by the passage of RA 3844, as amended. Share tenancy exists: [W]henever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land personally with the aid of labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant.[17] In alleging that he is a tenant of Zaldivar, Salmorin (in his affidavit dated April 26, 2000)[18] relates that their arrangement was for him to do all the cultivation and that the expenses therefore will be deducted from the harvest. The rest of the harvest will be divided equally between himself and Zaldivar. If Salmorin's version was to be believed, their arrangement was clearly one of agricultural share tenancy. For being contrary to law, Salmorin's assertion should not be given merit. Since the MCTC has jurisdiction over Civil Case No. 229-H, we will refrain from discussing the right of Zaldivar to possess Lot No. 7481-H as it is more correctly the subject of the appropriate action in the trial court. WHEREFORE, the petition is hereby DENIED. The January 31, 2005 and September 8, 2005 resolution of the Court of Appeals are AFFIRMED. Civil Case No. 229-H is hereby REINSTATED. The case is REMANDED to the Municipal Circuit Trial Court of Tobias Fornier-Anini-y-Hamtic which is directed to proceed with and finish the case as expeditiously as possible. Costs against petitioner. SO ORDERED. SAUL VS SUAREZ DECISION YNARES-SANTIAGO, J.: This petition assails the August 31, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 71516 affirming in full the December 14, 2000 DARAB Decision in DARAB Case No. 5468; as well as its January 6, 2005 Resolution denying petitioners motion for reconsideration.

Petitioner Domingo C. Suarez owns a 23-hectare agricultural land in Sitio Spring, Poblacion Tboli, South Cotabato registered under OCT No. (P-31540) P-11967.[1] On August 8, 1995, a complaint for reinstatement with preliminary mandatory injunction, recovery of possession and damages[2] was filed against him and Tboli Agro-Industrial Development, Inc. (TADI) before the Office of the Provincial Adjudicator, Department of Agrarian Reform Adjudicatory Board (DARAB), by respondents Leo B. Saul, Roger S. Brillo, Efrain S. Brillo, Eleno S. Brillo and Ignacio G. Pelaez. Respondents alleged that they were agricultural tenants in petitioners land on a 25-75 sharing agreement; that after two croppings, petitioner voluntarily offered the land for sale to the government under a Voluntary Offer to Sell (VOS) dated February 20, 1993;[3] that they signed the documents for the transfer of the land under the Comprehensive Agrarian Reform Program (CARP) as farmer-beneficiaries, and petitioner, as landowner; and that the sale was approved by the local Land Valuation Office of the Land Bank of the Philippines (LBP). Respondents claimed that while the VOS was being processed, they were summarily ejected from the property by TADI after the latter entered into a Grower Agreement with Contract to Buy[4] with petitioner thereby depriving them of their landholdings. Petitioner filed an Answer contending that respondents were installed as tenants, not by him, but by Wennie[5] Gonzaga of the Department of Agrarian Reform (DAR) in Koronadal, South Cotabato. He admitted that he voluntarily offered his land for sale to the government under the CARP but denied knowledge of the certification issued by the LBP. He denied the existence of a growers contract between him and TADI over the subject land.[6] For its part, TADI claimed that its growers contract with petitioner covered parcels of land different from those being claimed by respondents.[7] In due course, the Regional Adjudicator issued an Order[8] dated July 18, 1996 dismissing the complaint for lack of merit. The adjudicator found that respondents failed to prove their alleged tenancy over petitioners land. While they were identified as potential farmer-beneficiaries of the land subject of the VOS, they only have an inchoate right to the land since its coverage under the CARP has yet to be completed.[9] On appeal, the DARAB Central Office rendered a Decision [10] reversing the Regional Adjudicator. It observed that petitioner admitted that respondents were his tenants. It further held that: ... it is in fact immaterial whether the subject landholding is covered by the alleged growers contract or not. What is clear in the instant case is the fact that herein appellants were illegally ejected from their respective tenanted lands. If indeed the subject land is not covered by the growers contract, if theres any, the act of defendant-appellee TADI in ejecting the tenants-appellants was beyond authority, hence, illegal. Assuming arguendo that the subject landholding is truly covered in the said contract, the contracting parties are required under the law to respect the tenurial rights of the tenants therein.[11] The DARAB thus disposed: WHEREFORE, the appealed Order is hereby SET ASIDE and a NEW JUDGMENT is rendered: 1. Declaring the plaintiffs-appellants as bona fide tenants of the subject landholding;

2. Ordering the MARO and other concerned DAR Officers to determine the disturbance compensation from the time of actual ejectment of herein plaintiffs-appellants until the time of actual reinstatement, after the last harvest of pineapple, to be awarded to herein plaintiffs-appellants; and 3. after harvest. Ordering the reinstatement of herein plaintiff-appellants in their respective original landholdings

SO ORDERED.[12]
[13]

Petitioner elevated the matter to the Court of Appeals which, on August 31, 2004, rendered a Decision affirming the DARAB. Upon denial of the motion for reconsideration,[14] petitioner filed the instant petition.

The issues for resolution are: (a) whether respondents are bona fide agricultural tenants under the law; and (b) whether petitioner illegally ejected respondents from their landholdings. Petitioner contends that there is no basis in holding that respondents were his tenants. He denies having admitted that they were his tenants, and insists that there is no proof to prove the existence of tenancy relations. He asserts that he did not eject respondents from their landholdings by entering into a growers contract over the subject land with TADI. Indeed, there is nothing in the records to suggest that respondents were petitioners bona fide tenants prior to their designation by the DAR as potential farmer-beneficiaries under the CARP. There is no evidence to prove tenancy arrangement between petitioner and respondents before the formers voluntary offer to convey the land to the government. In holding that respondents were bona fide tenants of petitioner, the DARAB and the appellate court relied solely on the alleged admission in petitioners answer to the complaint, to wit:

3.

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

The fourth paragraph of the complaint states: 4. That plaintiffs were instituted sometime in 1993 and were given three (3) hectares each respectively, while for plaintiff Roger Brillo was given 2 hectares; the sharing of the parties involved was 25-75 in favor of the tenants; after for two croppings defendant D. Suarez approached and offered the land by Voluntary Offer to Sale (VOS) last November 1993 in our favor (plaintiffs-tenants) and the papers for VOS was processed in the office of Department [of] Agrarian Reform (DAR) Koronadal, South Cotabato;[16] We find that the above admission was taken out of context. While petitioner admitted that respondents were tenants in the land, he qualified in paragraph 2 of his answer that it was Wennie Gonzaga of the DAR who installed them as such. Clearly, it was the DAR who placed respondents in actual possession of the land upon petitioners offer to transfer the same to the government. Other than this supposed admission, there is no evidence on record to prove the tenancy relations. Respondents did not substantiate their claim with evidence to show that they were agricultural tenants in petitioners land. They did not allege actual cultivation or specify the crop produced thereby. Neither did they mention how much of the produce was delivered to petitioner or submit receipts to prove the purported 25-75 sharing of harvests. They did not state, much less prove, the circumstances of their agreement with petitioner as to the alleged tenancy relationship. Thus, there is no basis to the claim that they are agricultural tenants on the property. In VHJ Construction and Development Corporation v. Court of Appeals,[17] we held that a tenancy relationship cannot be presumed. There must be evidence to prove the tenancy relations such that all its indispensable elements must be established, to wit: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent by the landowner; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of the harvests. All these requisites are necessary to create tenancy relationship, and the absence of one or more requisites will not make the alleged tenant a de facto tenant. The DARABs reliance on the ruling in Tizon v. Cabagon, et al.[18] that the landowners admission of the fact of tenancy relationship is conclusive is misplaced. InTizon, there was actual proof of tenancy relationship as the landowner therein categorically admitted in the petition that respondents were her tenants. She also testified in open court that respondents were managing or in charge of the lands. Respondents therein proved actual cultivation and there was sharing of harvests. On the contrary, there is no independent evidence in this case to prove any of the requisites of a tenancy relationship. The DARAB and the appellate court merely relied on petitioners alleged admission which we have disregarded. Even assuming that a tenancy relationship exists between petitioner and respondents, we find that the latter has no cause of action against petitioner. It should be noted that the complaint for ejectment was brought against petitioner based on the growers contract he had executed with TADI.[19] Respondents alleged that petitioner deprived them of their landholdings by entering into a growers contract, thereby allowing TADI to plant pineapples in respondents lands. However, an examination of the contract reveals that it pertains to other lands and not the land being claimed by respondents. Petitioners application for VOS covers the land that respondents are claiming as their landholdings and measures 13.9269 hectares, and is covered by OCT No. (P-31540) P-11967.[20] The tax declaration and sketch plan describe the lot as Cadastral Lot No. 111-B, Pls-555, and bounded on the northeast by Lot Nos. 108 and 105; on the southeast by Lot No. 114; on the southwest by Lot Nos. 112 and 113; and on the northwest by Lot No. 111-A.[21] On the other hand, the lands subject of the growers contract between petitioner and TADI are Lot No. 117, Pls555[22] covered by TCT No. T-26810, Lot No. 119-E, Psd-017487[23] covered by TCT No. T-41460[24] and Lot No. 119-F, Psd-11017487[25] covered by TCT No. T-41461.[26] It is clear therefore that the subject matter of the growers contract did not include the land subject of the VOS. Thus, petitioner could not have caused respondents ejectment from the subject property by virtue of his transactions with TADI, since he never authorized the latter to plant on the subject land. Respondents ejectment from the land was not pursuant to the contract petitioner had entered into with TADI who appears to have entered the land without petitioners consent. Thus, it was error for the appellate court to affirm DARABs conclusion that it is immaterial whether the subject landholding is covered by the alleged growers contract or not. It is, in every sense, material to the determination of the case because petitioner is sought to be held liable for respondents ejectment due allegedly to the contract. If the disputed land is not the subject of the contract, as in fact it is not, then respondents cannot claim that petitioner illegally ejected them from the land. Consequently, they have no cause of action against petitioner, since the latter did not commit any act that resulted in their dispossession. Respondents cause of action is against TADI as it is the latter who allegedly planted pineapples in the land occupied by respondents, when it is clear that its contract with petitioner covered different lots. The DARAB itself observed that (i)f indeed the subject land is not covered by the growers contract ..., the act of defendant-appellee TADI in ejecting the tenants-appellants was beyond authority, hence, illegal.[27] Respondents should have thus brought the action only against TADI who alone caused their expulsion from the land in question. In this regard, respondents should have filed the instant case before the regular courts and not the DARAB considering that the only act complained of by respondents is TADIs alleged intrusion into the subject land. Thus, respondents cause of action is actually one for forcible entry. The allegation that they were deprived of their landholdings due to the growers contract will not

automatically make the case an agrarian dispute that would call for the application of tenancy laws and the assumption of jurisdiction by the DARAB.[28] In order for a dispute to fall under the jurisdiction of the DARAB, the controversy must relate to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements.[29] There must be a tenancy relationship between the party litigants for the DARAB to validly take cognizance of a controversy.[30] In this case, there is no showing that there exists a tenancy relationship between petitioner and respondents. Likewise, respondents have no tenancy relationship with TADI, against whom they principally have a cause of action. The controversy is civil in nature since it involves the issue of material possession, independent of any question pertaining to agricultural tenancy. Hence, the case falls outside the jurisdiction of DARAB; it is cognizable by the regular courts.[31] Though the parties do not challenge DARABs jurisdiction, the Court may motu proprio consider the issue of jurisdiction. The Court has discretion to determine whetherDARAB validly acquired jurisdiction over the case since jurisdiction over the subject matter is conferred only by law.[32] Jurisdiction over the subject matter cannot be acquired through, or waived by, any act or omission of the parties. Neither would the active participation of the parties nor estoppel operate to confer jurisdiction on the DARAB where the latter has none over a cause of action.[33] WHEREFORE, the instant petition is GRANTED. The DARAB Decision dated December 14, 2000 in DARAB Case No. 5468 and the Court of Appeals Decision dated August 31, 2004 in CA-G.R. SP No. 71516, as well as its Resolution dated January 6, 2005, are ANNULLED and SET ASIDE. The complaint in DARAB Case No. XI-249-SC-95 is hereby DISMISSED. SO ORDERED.

CASES: EMINENT DOMAIN: ACQUISITION AND JUST COMPENSATION G.R. No. 118712 October 6, 1995 LAND BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., respondents. G.R. No. 118745 October 6, 1995 DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents. It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out to such an extent as deny justice to the landowner whenever truth and justice happen to be on his side. 1 As eloquently stated by Justice Isagani Cruz: . . . social justice or any justice for that matter is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to prefer the poor simply because they are poor, or to reject the rich simply because they are rich, for justice must always be served, for poor and rich alike, according to the mandate of the law. 2 In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its resolution. Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745) and Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP No. 33465. However, upon motion filed by private respondents, the petitions were ordered consolidated. 3 Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which granted private respondents' Petition for Certiorari and Mandamus and ruled as follows:

WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is hereby GRANTED: a) DAR Administrative Order No. 9, Series of 1990 is declared null and void insofar as it provides for the opening of trust accounts in lieu of deposits in cash or bonds; b) Respondent Landbank is ordered to immediately deposit not merely "earmark", "reserve" or "deposit in trust" with an accessible bank designated by respondent DAR in the names of the following petitioners the following amounts in cash and in government financial instruments within the parameters of Sec. 18 (1) of RA 6657: P 1,455,207.31 Pedro L. Yap P 135,482.12 Heirs of Emiliano Santiago P 15,914,127.77 AMADCOR; c) The DAR-designated bank is ordered to allow the petitioners to withdraw the abovedeposited amounts without prejudice to the final determination of just compensation by the proper authorities; and d) Respondent DAR is ordered to 1) immediately conduct summary administrative proceedings to determine the just compensation for the lands of the petitioners giving the petitioners 15 days from notice within which to submit evidence and to 2) decide the cases within 30 days after they are submitted for decision. 4 Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, 5 denying their motion for reconsideration. Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657). Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of compensation for their land pursuant to the provisions of RA 6657, private respondents filed with this Court a Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private respondents questioned the validity of DAR Administrative Order No. 6, Series of 1992 6 and DAR Administrative Order No. 9, Series of 1990, 7 and sought to compel the DAR to expedite the pending summary administrative proceedings to finally determine the just compensation of their properties, and the Landbank to deposit in cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in trust accounts" for private respondents, and to allow them to withdraw the same. Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition to respondent Court of Appeals for proper determination and disposition. As found by respondent court , the following are undisputed: Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of title (TCTs) of petitioner Yap were totally cancelled by the Registrar of Deeds of Leyte and were transferred in the names of farmer beneficiaries collectively, based on the request of the DAR together with a certification of the Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked for Landowner Pedro L. Yap for the parcels of lands covered by TCT Nos. 6282 and 6283, respectively, and issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without complying with the requirement of Section 16 (e) of RA 6657 to deposit the compensation in cash and Landbank bonds in an accessible bank. (Rollo, p. 6). The above allegations are not disputed by any of the respondents. Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are the owners of a parcel of land located at Laur, NUEVA ECIJA with an area of 18.5615 hectares covered by TCT No. NT-60359 of the registry of Deeds of Nueva Ecija, registered in the name of the late Emiliano F. Santiago; that in November and December 1990, without notice to the petitioners, the Landbank required and the beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the net harvest; that on 24 October 1991 the DAR Regional Director issued an order directing the Landbank to pay the landowner directly or through the establishment of a trust fund in the amount of

P135,482.12, that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F. Santiago. (ANNEX "E"; Rollo, p. 7); that the beneficiaries stopped paying rentals to the landowners after they signed the Actual Tiller's Deed of Undertaking committing themselves to pay rentals to the LandBank (Rollo, p. 133). The above allegations are not disputed by the respondents except that respondent Landbank claims 1) that it was respondent DAR, not Landbank which required the execution of Actual Tillers Deed of Undertaking (ATDU, for brevity); and 2) that respondent Landbank, although armed with the ATDU, did not collect any amount as rental from the substituting beneficiaries (Rollo, p. 99). Petitioner Agricultural Management and Development Corporation (AMADCOR, for brevity) alleges with respect to its properties located in San Francisco, Quezon that the properties of AMADCOR in San Francisco, Quezon consist of a parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares and another parcel covered by TCT No. 10832 with an area of 163.6189 hectares; that a summary administrative proceeding to determine compensation of the property covered by TCT No. 34314 was conducted by the DARAB in Quezon City without notice to the landowner; that a decision was rendered on 24 November 1992 (ANNEX "F") fixing the compensation for the parcel of land covered by TCT No. 34314 with an area of 209.9215 hectares at P2,768,326.34 and ordering the Landbank to pay or establish a trust account for said amount in the name of AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in the decision was established by adding P1,986,489.73 to the first trust account established on 19 December 1991 (ANNEX "G"). With respect to petitioner AMADCOR's property in Tabaco, Albay, it is alleged that the property of AMADCOR in Tabaco, Albay is covered by TCT No. T-2466 of the Register of Deeds of Albay with an area of 1,629.4578 hectares'; that emancipation patents were issued covering an area of 701.8999 hectares which were registered on 15 February 1988 but no action was taken thereafter by the DAR to fix the compensation for said land; that on 21 April 1993, a trust account in the name of AMADCOR was established in the amount of P12,247,217.83', three notices of acquisition having been previously rejected by AMADCOR. (Rollo, pp. 8-9) The above allegations are not disputed by the respondents except that respondent Landbank claims that petitioner failed to participate in the DARAB proceedings (land valuation case) despite due notice to it (Rollo, p. 100). 8 Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and the titles are cancelled as provided under Section 16(e) of RA 6657. 9 Private respondents also assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as landowners despite the clear mandate that before taking possession of the property, the compensation must be deposited in cash or in bonds. 10 Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making power pursuant to Section 49 of RA 6657. 11 Moreover, the DAR maintained that the issuance of the "Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA 6657 and the ruling in the case of Association of Small Landowners in the Philippines, Inc., et al. vs. Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343). 12 For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also used. 13 On October 20, 1994, the respondent court rendered the assailed decision in favor of private respondents. 14Petitioners filed a motion for reconsideration but respondent court denied the same. 15 Hence, the instant petitions. On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745 alleging that the appeal has no merit and is merely intended to delay the finality of the appealed decision. 16 The Court, however, denied the motion and instead required the respondents to file their comments. 17 Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative Order No. 9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and (2) in holding that private respondents are entitled as a matter of right to the immediate and provisional release of the amounts deposited in trust pending the final resolution of the cases it has filed for just compensation. Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section 16(e) of RA 6657 referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit. Thus, in opting for the opening of a trust account as the acceptable form of deposit through Administrative Circular No. 9, petitioner DAR did not commit any grave

10

abuse of discretion since it merely exercised its power to promulgate rules and regulations in implementing the declared policies of RA 6657. The contention is untenable. Section 16(e) of RA 6657 provides as follows: Sec. 16. Procedure for Acquisition of Private Lands xxx xxx xxx (e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied) It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of the term "deposit". The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative enactment. 18 In this regard, it must be stressed that the function of promulgating rules and regulations may be legitimately exercised only for the purpose of carrying the provisions of the law into effect. The power of administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is that administrative regulations cannot extend the law and amend a legislative enactment, 19 for settled is the rule that administrative regulations must be in harmony with the provisions of the law. And in case there is a discrepancy between the basic law and an implementing rule or regulation, it is the former that prevails. 20 In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and void. Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the amounts deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their properties, petitioners assert the negative. The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of RA 6657 and payment of final compensation as provided under Section 18 21 of the same law. According to petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by the landowner because the latter amount is only provisional and intended merely to secure possession of the property pending final valuation. To further bolster the contention petitioners cite the following pronouncements in the case of "Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22 The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just compensation, in contravention of a well-accepted principle of eminent domain. xxx xxx xxx The CARP Law, for its part conditions the transfer of possession and ownership of the land to the government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the landowner. No outright change of ownership is contemplated either. xxx xxx xxx Hence the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for must also be rejected.

11

Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it found that: . . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform (175 SCRA 343), to conclude that "payments of the just compensation is not always required to be made fully in money" even as the Supreme Court admits in the same case "that the traditional medium for the payment of just compensation is money and no other" the Supreme Court in said case did not abandon the "recognized rule . . . that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation." 23 (Emphasis supplied) We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional mode of payment of compensation and recognized payment other than in cash. It did not, however, dispense with the settled rule that there must be full payment of just compensation before the title to the expropriated property is transferred. The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to appropriate the amounts already deposited in their behalf as compensation for their properties simply because they rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession and use of such properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the more by withholding that which rightfully belongs to private respondents in exchange for the taking, under an authority (the "Association" case) that is, however, misplaced. This is misery twice bestowed on private respondents, which the Court must rectify. Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property for which he should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule that: . . . within the context of the State's inherent power of eminent domain, just compensation means not only the correct determination of the amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. 24(Emphasis supplied) The promulgation of the "Association" decision endeavored to remove all legal obstacles in the implementation of the Comprehensive Agrarian Reform Program and clear the way for the true freedom of the farmer. 25 But despite this, cases involving its implementation continue to multiply and clog the courts' dockets. Nevertheless, we are still optimistic that the goal of totally emancipating the farmers from their bondage will be attained in due time. It must be stressed, however, that in the pursuit of this objective, vigilance over the rights of the landowners is equally important because social justice cannot be invoked to trample on the rights of property owners, who under our Constitution and laws are also entitled to protection. 26 WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit and the appealed decision is AFFIRMED in toto. SO ORDERED. SOLIMAN VS PASUDECO DECISION NACHURA, J.:

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

12

of the Department of Agrarian Reform Adjudication Board (DARAB) dated January 15, 2004 and reinstated the Decision [4] of the Provincial Agrarian Reform Adjudicator (PARAD) of San Fernando, Pampanga dated August 16, 1995. The Facts The respondents recount the antecedents, as follows: The property subject of this case is situated at Cabalantian, Bacolor, Pampanga, with an area of ten (10) hectares, more or less, previously covered by Transfer Certificate of Title (TCT) No. 70829-R (subject property) and formerly owned by one Dalmacio Sicat (Dalmacio). On December 2, 1969, Dalmacio offered to sell the subject property to respondent Pampanga Sugar Development Company (PASUDECO), a domestic corporation engaged in sugar milling, to be used as a housing complex for PASUDECO's laborers and employees. The land was offered for sale at the price of P8.00 per square meter.[5] On January 26, 1970, Dalmacio reduced the price to P5.00 per square meter.[6] In a meeting held on April 15, 1970, the Board of Directors of PASUDECO issued Board Resolution No. 057[7] authorizing the purchase of the subject property at P4.00 per square meter. On May 22, 1970, Dalmacio and his tenants[8] jointly filed a Petition[9] with the then Court of Agrarian Relations (CAR), San Fernando, Pampanga, seeking approval of the voluntary surrender of the subject property with payment of disturbance compensation. On the same date, the CAR rendered

13

a Decision,[10] approving the voluntary surrender of the subject property by the tenants to Dalmacio, thus, terminating their tenancy relationship effective May 21, 1970, the date when the parties entered into the agreement. On May 22, 1970, a Deed[11] of Sale with Mortgage was executed between Dalmacio and PASUDECO. Thereafter, the documents needed for the conversion of the land to residential purposes were prepared, such as the subdivision layout with specifications as to the size of each lot; topographic survey; monumenting of all corners of the subdivision lots; and approval of the plan including the technical description of the land. No trespassing signs were also installed around the premises. Thus, on May 31, 1974, TCT Nos. 110325-R,[12] 110326-R[13] and 110327-R[14] were registered in favor of PASUDECO. However, due to financial setbacks suffered after the imposition of Martial Law in 1972, PASUDECO deferred the construction of the housing project. PASUDECO averred that no person was authorized to occupy and/or cultivate the subject property. On the other hand, the petitioners have a totally different version. Petitioners Joaquin Soliman, Lazaro Almario, Isidro Almario, Baldomero Almario, Demetrio Soliman, Romeo Abarin, Ernesto Tapang and Crisostomo Abarin (petitioners) claimed that, sometime in November 1970, they started working on the subject property with a corresponding area of tillage, as certified to by the Barangay Agrarian Reform Committee (BARC) on December 6, 1989, to wit: (1) Lazaro Almario with an area of 1.65 hectares;[15] (2) Demetrio Soliman with an area of 1.70 hectares;[16] (3) Crisostomo Abarin with an area of 1.10 hectares;[17] (4) Baldomero Almario with an area of 1.5 hectares;[18] (5) Isidro Almario with an area of 1.5 hectares;[19] (6) Romeo Abarin with an area of 0.400 hectare;[20] and (7) Ernesto Tapang with an area of .6500 hectare.[21] A Certification[22] dated December 28, 1989 was also issued by the Samahang Nayon in favor of petitioner Joaquin Soliman with respect to the remaining area of 1.5 hectares. Likewise, on December 28, 1989, the Barangay Chairperson of Macabacle, Bacolor, Pampanga, certified that the eight (8) petitioners had been the actual tenant-tillers of the subject property from 1970 up to the present,[23] and that petitioner Baldomero Almario (Baldomero) was issued Certificate of Land Transfer (CLT) No. 0-043466[24] with an area of 3.2185 hectares on July 22, 1981. The Ocular Inspection and the Investigation Report[25] issued by the Municipal Agrarian Reform Officer (MARO) on March 13, 1990 showed that since 1970, petitioners cultivated the subject property, allegedly managed by the late respondent Gerry Rodriguez (Gerry), manager of PASUDECO from 1970-1991. Petitioners alleged that in 1970, Gerry made one Ciriaco Almario (Ciriaco) his overseer/caretaker, tasked to collect lease rentals from petitioners. In turn, Ciriaco remitted the rentals to Gerry. On May 14, 1990, Ciriaco certified that petitioners were the actual tenant-tillers of the subject property.[26] Moreover, petitioners deposited their alleged rentals with the Land Bank of the Philippines (LBP) in San Fernando, Pampanga, as land amortizations, in varying amounts, from 1989

14

to 1993, as shown by the official receipts issued by LBP.[27] Thus, petitioners averred that from 1970 up to 1990 or for a period of almost twenty (20) years, they had been in actual and peaceful possession and cultivation of the subject property. The real controversy arose when PASUDECO decided to pursue the development of the property into a housing project for its employees in the latter part of April 1990. On May 14, 1990, petitioners filed a Complaint [28] for Maintenance of Peaceful Possession with a Prayer for the issuance of a Preliminary Injunction against Gerry before the PARAD to restrain him from harassing and molesting petitioners in their respective landholdings. Petitioners alleged that Gerry, together with armed men, entered the property and destroyed some of their crops. Traversing the complaint, Gerry raised as one of his defenses the fact that PASUDECO was the owner of the subject property. Thus, on November 26, 1990, petitioners filed their Amended Complaint [29] impleading PASUDECO as a party-defendant. Meanwhile, PASUDECO asserted that petitioners were not tenants but merely interlopers, usurpers and/or intruders into the subject property. Trial on the merits ensued. In the process, the PARAD conducted an ocular inspection and found that the subject property was planted with palay measuring one (1) foot high. There were also several dikes or pilapil dividing the subject property. The PARAD also observed that there was a big sign installed therein, reading Future Site of PASUDECO Employees Housing Project.[30]

The PARAD's Ruling On August 16, 1995, the PARAD dismissed petitioners' complaint and denied their application for the writ of preliminary injunction. The PARAD held that petitioners had not shown direct and convincing proof that they were tenants of the subject property. Petitioners could not show any receipt proving payment of lease rentals either to PASUDECO or Gerry. In addition to the absence of sharing, the PARAD ruled that there was no consent given by PASUDECO in order to create a tenancy relationship in favor of the petitioners. Aggrieved, petitioners filed a Notice of Appeal with the DARAB on September 7, 1995 on the following grounds: (a) that the PARAD abused its discretion by ignoring or disregarding evidence which, if considered, would result in a decision favorable to the petitioners; and (b) that there were errors in the findings of fact from which equally erroneous conclusions were drawn, which, if not corrected on appeal, would cause grave and irreparable damage or injury to the petitioners. While the case was pending resolution before the DARAB, the subject property was devastated by lahar due to the eruption of Mount Pinatubo sometime in October 1995. As a result, the farming activities on the subject property ceased. Shortly thereafter, PASUDECO fenced the subject property and placed additional signs thereon, indicating that the same was private property. [31] At present, the subject property is unoccupied and uncultivated.[32]

The DARAB's Ruling On January 15, 2004, the DARAB rendered its Decision in favor of the petitioners, reversing the findings and conclusions of the PARAD. The DARAB held that, without the approval of the conversion application filed by PASUDECO, it could not be substantiated that the subject property was indeed residential property intended for housing purposes. Because of this, and the fact that petitioners tilled the subject property for almost twenty (20) years, the same remained agricultural in character. Moreover, the DARAB held that, contrary to the findings of the PARAD, the elements of consent and sharing were present in this case. The DARAB, citing Section 5 of Republic Act (R.A.) No. 3844,[33]ratiocinated that petitioners entered the subject property in 1970 upon the request of Ciriaco who, with the consent of Gerry as manager of PASUDECO, was authorized to look for people to cultivate the subject property. Petitioners cultivated the same and shared their harvests with PASUDECO, received by Gerry through Ciriaco. Later on, when Gerry refused to accept their lease rentals, petitioners deposited the money with LBP. The DARAB opined that these pieces of evidence established the fact of consent and sharing. While express consent was not given, the fact that Gerry accepted the lease rentals for a considerable number of years signified an implied consent which, in turn, bound PASUDECO. PASUDECO filed a Motion for Reconsideration[34] which was, however, denied by the DARAB in its Resolution [35] dated May 21, 2004. Thus, PASUDECO went to the CA for recourse.[36] However, some of the records were found missing, as certified by the DARAB on June 22, 2004.[37] The CA's Ruling On April 12, 2005, the CA reversed the DARAB's ruling and reinstated the PARAD's decision. The CA held that, while the subject property was agricultural, there was no tenancy relationship between the parties, express or implied. The CA concurred in the findings of the PARAD and found no credible evidence to support the contention that petitioners were de jure tenants inasmuch as the elements of consent and sharing were absent. Citing these Court's rulings in Hilario v. Intermediate Appellate Court[38] andBernas v. Court of Appeals,[39] the CA reiterated that tenancy is not merely a factual relationship but also a legal relationship; hence, the fact that PASUDECO, being the owner of the subject property, was uninvolved in and oblivious to petitioners' cultivation thereof, tenancy relations did not exist. Thus, the CA concluded that in the absence of any tenancy relationship between the parties, the case was outside the jurisdiction of the DARAB.

15

Petitioners filed their Motion for Reconsideration,[40] which was denied by the CA in its Resolution[41] dated August 3, 2005. Hence, the instant Petition assigning the following errors: I. The Honorable Court of Appeals failed to appreciate the facts of the case when it ruled that the occupation of the petitioners of the subject lot was without the consent of the respondents, express or implied. The Honorable Court of Appeals erred in applying the principles laid down in the cases of Hilario v. [Intermediate Appellate Court]and Bernas v. Court of Appeals and [in] consequently ruling that there is no tenancy relation between the parties. The Honorable Court of Appeals failed to appreciate the provision[s] of Section 5[,] Republic Act No. 3844 which provides for the establishment of agricultural leasehold relation by mere operation of law. The Honorable Court of Appeals erred when it ruled that the instant case [does] not fall under the jurisdiction of the Department of Agrarian Reform Adjudication [Board].[42]

II.

III. IV.

This submission boils down to the sole issue of whether petitioners are de jure tenants of the subject property. Our Ruling The instant Petition is bereft of merit. 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 latter's consent, for purposes of production, sharing the produce with the landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or money or both under the leasehold tenancy system.[43] 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.[44] 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.[45] Tenancy relationship cannot be presumed. Claims that one is a tenant do not automatically give rise to security of tenure.[46] Pertinent are Sections 4 and 5 of Republic Act No. 3844 as amended, which provide: SEC. 4. Abolition of Agricultural Share Tenancy. Agricultural share tenancy, as herein defined, is hereby declared to be contrary to public policy and shall be abolished: Provided, That existing share tenancy contracts may continue in force and effect in any region or locality, to be governed in the meantime by the pertinent provisions of Republic Act Numbered Eleven hundred and ninety-nine, as amended, until the end of the agricultural year when the National Land Reform Council proclaims that all the government machineries and agencies in that region or locality relating to leasehold envisioned in this Code are operating, unless such contracts provide for a shorter period or the tenant sooner exercises his option to elect the leasehold system: Provided, further, That in order not to jeopardize international commitments, lands devoted to crops covered by marketing allotments shall be made the subject of a separate proclamation that adequate provisions, such as the organization of cooperatives, marketing agreements, or other similar workable arrangements, have been made to insure efficient management on all matters requiring synchronization of the agricultural with the processing phases of such crops: Provided, furthermore, That where the agricultural share tenancy contract has ceased to be operative by virtue of this Code, or where such a tenancy contract has been entered into in violation of the provisions of this Code and is, therefore, null and void, and the tenant continues in possession of the land for cultivation, there shall be presumed to exist a leasehold relationship under the provisions of this Code, without prejudice to the right of the landowner and the former tenant to enter into any other lawful contract in relation to the land formerly under tenancy contract, as long as in the interim the security of tenure of the former tenant under Republic Act Numbered Eleven hundred and ninety-nine, as amended, and as provided in this Code, is not impaired: Provided, finally, That if a lawful leasehold tenancy contract was entered into prior to the effectivity of this Code, the rights and obligations arising therefrom shall continue to subsist until modified by the parties in accordance with the provisions of this Code. SEC. 5. Establishment of Agricultural Leasehold Relation. The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this Code and, in other cases, either orally or in writing, expressly or impliedly. The pronouncement of the DARAB that there is, in this case, tenancy by operation of law under Section 5 of R.A. No. 3844 is not correct. In Reyes v. Reyes,[47] we held:

16

Under R.A. 3844, two modes are provided for in the establishment of an agricultural leasehold relation: (1) by operation of law in accordance with Section 4 of the said act; or (2) by oral or written agreement, either express or implied. By operation of law simply means the abolition of the agricultural share tenancy system and the conversion of share tenancy relations into leasehold relations. The other method is the agricultural leasehold contract, which may either be oral or in writing. Rather, consistent with the parties' assertions, what we have here is an alleged case of tenancy by implied consent. As such, crucial for the creation of tenancy relations would be the existence of two of the essential elements, namely, consent and sharing and/or payment of lease rentals. After a meticulous review of the records, we find that the elements of consent and sharing and/or payment of lease rentals are absent in this case. Tenancy relationship can only be created with the consent of the true and lawful landholder who is either the owner, lessee, usufructuary or legal possessor of the property, and not through the acts of the supposed landholder who has no right to the property subject of the tenancy. To rule otherwise would allow collusion among the unscrupulous to the prejudice of the true and lawful landholder.[48] As duly found by the PARAD and the CA, Gerry was not authorized to enter into a tenancy relationship with the petitioners. In fact, there is no proof that he, indeed, entered into one. Other than their bare assertions, petitioners rely on the certification of Ciriaco who, likewise, failed to substantiate his claim that Gerry authorized him to select individuals and install them as tenants of the subject property. Absent substantial evidence showing Ciriaco's authority from PASUDECO, or even from Gerry, to give consent to the creation of a tenancy relationship, his actions could not give rise to an implied tenancy.[49] Likewise, the alleged sharing and/or payment of lease rentals was not substantiated other than by the deposit-payments with the LBP, which petitioners characterized as amortizations. We cannot close our eyes to the absence of any proof of payment prior to the deposit-payments with LBP. Not a single receipt was ever issued by Gerry, duly acknowledging payment of these rentals from Ciriaco who, allegedly, personally collected the same from the petitioners. Notably, the fact of working on another's landholding, standing alone, does not raise a presumption of the existence of agricultural tenancy. Substantial evidence necessary to establish the fact of sharing cannot be satisfied by a mere scintilla of evidence; there must be concrete evidence on record adequate to prove the element of sharing. Thus, to prove sharing of harvests, a receipt or any other credible evidence must be presented, because self-serving statements are inadequate.[50] The certifications attesting to petitioners' alleged status as de jure tenants are insufficient. In a given locality, the certification issued by the Secretary of Agrarian Reform or an authorized representative, like the MARO or the BARC, 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.[51] The onus rests on the petitioners to prove their affirmative allegation of tenancy, which they failed to discharge with substantial evidence. Simply put, he who makes an affirmative allegation of an issue has the burden of proving the same, and in the case of the plaintiff in a civil case, the burden of proof never parts. The same rule applies to administrative cases. In fact, if the complainant, 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 respondent is under no obligation to prove his exception or defense.[52] Petitioners' assertion that they were allowed to cultivate the subject property without opposition, does not mean that PASUDECO impliedly recognized the existence of a leasehold relation. Occupancy and continued possession of the land will not ipso facto make one a de jure tenant, because the principal factor in determining whether a tenancy relationship exists is intent. [53] This much we said in VHJ Construction and Development Corporation v. Court of Appeals,[54] where we held that: Indeed, a tenancy relationship cannot be presumed. There must be evidence to prove this allegation. The principal factor in determining whether a tenancy relationship exists is intent. Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It is also a legal relationship. As we ruled in Chico v. Court of Appeals[347 SCRA 35 (2000)]: "Each of the elements hereinbefore mentioned is essential to create a de jure leasehold or tenancy relationship between the parties. This de jure relationship, in turn, is the terra firma for a security of tenure between the landlord and the tenant. The leasehold relationship is not brought about by a mere congruence of facts but, being a legal relationship, the mutual will of the parties to that relationship should be primordial." Thus, the intent of the parties, the understanding when the farmer is installed, and their written agreements, provided these are complied with and are not contrary to law, are even more important. Thus, we agree with the following findings of the CA:

First, there is no credible evidence to show that the alleged caretaker, Ciriaco Almario, was designated by PASUDECO or its manager, Gerry Rodriguez, to facilitate the cultivation of the property. There is likewise

17

no evidence to suggest that the respondents ever dealt directly with and acted upon the instruction of PASUDECO with respect to the cultivation of the property. Second, it is indeed inconceivable, as petitioner claims, for the respondents to allow petitioners to work on the property considering that before its purchase, the prior owner, Dalmacio Sicat, sought for the voluntary surrender of the landholding agreement with the previous tenants of the property so that the same can be sold to PASUDECO free from tenancy. This proves to be true considering that it is undisputed that the subject property was offered for sale by Dalmacio Sicat to the petitioner in order for the latter to build its low cost housing project thereon. Third, the certifications issued by Isidro S. Almario as BARC Chairman of Agdiman, Bacolor, Pampanga to the effect that respondents were actually cultivating he subject property deserves scant consideration. Said certifications can easily be considered as self-serving since the issuing officer is himself one of the respondents who claimed to be tenants of the subject property and it is quite natural for him not to declare anything which is adverse to his interest. The same scant consideration can also be accorded to the certification issued by the Barangay Captain of Macabacle, Bacolor, Pampanga, As it was held in Esquivel v. Reyes [ G.R. No. 152957, September 8, 2003, 410 SCRA 404 ]. Obviously, the barangay captain or the mayor whose attestation appears on the document was not the proper authority to make such determination. Even certifications issued by administrative agencies and/or officials concerning the presence or the absence of a tenancy relationship are merely preliminary or provisional and are not binding on the courts. xxxx Not a single piece of traceable evidence was shown by respondents when and how much are the rental payments that they supposedly paid before 1988. In fact, they neither mentioned the terms and conditions of their oral tenancy agreement, i.e. kind of agricultural crops to be planted, if indeed it existed; nor did they mention that such payments were made in the form of harvest sharing equivalent to a certain percentage agreed upon by the parties. While there were indeed payments made with the Land Bank of the Philippines in varying amounts starting 1988 and thereafter, it cannot be ignored that such payments were precipitated only by PASUDECOs resistance of respondents presence in the subject property. Thus, we concede to the Adjudicator a quos finding that said payment was made only as afterthought.[55] Finally, the long period of petitioners' alleged cultivation of the subject property cannot give rise to equitable estoppel. It should be remembered that estoppel in pais, or equitable estoppel arises when one, by his acts, representations or admissions or by his silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and the other rightfully relies and acts on such beliefs so that he will be prejudiced if the former is permitted to deny the existence of such facts. The real office of the equitable norm of estoppel is limited to supplying deficiency in the law, but it should not supplant positive law. The elements for the existence of a tenancy relationship are explicit in the law and these elements cannot be done away with by conjectures.[56] WHEREFORE, the instant Petition is DENIED and the Decision of the Court of Appeals in CA-G.R. S.P. No. 84405 dated April 15, 2005 is AFFIRMED. No costs. SO ORDERED.

[G.R. No. 174966, February 14, 2008] DEVELOPMENT BANK OF THE PHILIPPINES, Petitioner, vs. ROMEO TESTON, represented by his Attorney-in-Fact, CONRADO O. COLLARINA, Respondent. DECISION CARPIO MORALES, J.: By a Deed of Conditional Sale dated June 15, 1987, Romeo Teston (respondent) purchased on installment basis from petitioner, Development Bank of the Philippines (DBP), two (2) parcels of land situated in Mandaon, Masbate, covered by Transfer Certificate of Title Nos. T-6176 and T-6177. Respondent defaulted in the payment of his amortizations which had amounted to P3,727,435.57 as of September 1990. The DBP thus rescinded their contract by letter dated September 24, 1990 addressed to respondent. DBP soon transferred the two (2) parcels of land to the government in compliance with Republic Act No. 6657 (COMPREHENSIVE AGRARIAN REFORM LAW OF 1988) and Executive Order 407 dated June 14, 1990 (ACCELERATING THE ACQUISITION AND DISTRIBUTION OF AGRICULTURAL LANDS, PASTURE LANDS, FISHPONDS, AGRO-FORESTRY LANDS AND OTHER LANDS OF THE PUBLIC DOMAIN SUITABLE FOR AGRICULTURE).[1]

18

It turned out that on December 1, 1988, respondent had voluntarily offered the two parcels of land for inclusion in the Comprehensive Agrarian Reform Program (CARP). On September 18, 1995, respondent filed before the Department of Agrarian Reform Adjudication Board (DARAB) Regional Office in Legazpi City a Petition[2] against DBP and the Land Bank of the Philippines (Land Bank), alleging that under Republic Act No. 6657, his obligation to DBP was assumed by the government through the Land Bank after the two parcels of land became covered by the CARP, and that the operation of said law extinguished DBPs right to rescind the sale. Respondent thus prayed that judgment be rendered:

1. 2.

Declaring that the right of the respondent DBP to rescind the Deed of Conditional Sale for non-payment of amortization was extinguished by operation of law; That the Land Bank be ordered to pay the just compensation of the property which the Special Agrarian Court may determine to be paid to the petitioner after deducting the balance of the petitioner to the DBP.[3]

In its Answer/Position Paper,[4] DBP alleged that, among other things, since respondent had not acquired title to the two parcels of land, he had no right to voluntarily offer them to the CARP. The Land Bank raised substantially the same defenses as those raised by DBP.[5] By Order of March 30, 1998, the DARAB Regional Adjudicator dismissed respondents petition in this wise: Petitioner has never been the owner of the land, hence could not have validly offered the property under the [Voluntary Offer to Sell] scheme. Under Section 72 of Republic Act No. 6657, Other claims can not refer to payment of amortizations, more specifically if such claim is made after the rescission of the contract. Petitioner may well have questioned the rescission of the contract in 1990 if he felt aggrieved by it and should not have allowed five (5) years to elapse before acting on the same. This creates the presumption that the rescission was reasonable and valid and the non-impairment of contracts must be respected. As against Land Bank, petitioner has no right of action whatsoever, as there is nothing Land Bank could act on to favor their petition. In fine, DBP being still the owner, the government cannot step in and assume the obligation to pay petitioners amortization after his default to make him the owner of the land and to bar DBP from rescinding the conditional sale. x x x[6] (Italics in the original; underscoring supplied) On appeal, the DARAB affirmed the Regional Adjudicators decision, thus: There is no doubt that the title to the subject property has not been transferred to petitioner-appellant. The contract which he entered into with the DBP is a conditional sale, the transfer of property being conditioned upon compliance with the terms of the sale, specifically the payment in full of the purchase price. As petitioner-appellant failed to fulfill his obligation, DBP rescinded the conditional Sale. Thus, petitioner-appellant has lost whatever right he may have over the property pursuant to the contract. It is clear on the records that the Deed of Conditional Sale dated July 15, 1987 was rescinded on September 24, 1990 or long before the property was turned over to the DAR on November 29, 1990. Evidently, petitioner-appellant had long lost his interest over the property in question when the same was turned over to the national government. Hence, petitioner-appellant could not have validly offered the property under the Voluntary Offer to Sell (VOS) scheme. Moreover, the assertion of appellant that Section 72 of RA No. 6657 extinguishes his obligation to pay full amount to the DBP because it is already assumed by DAR or LBP is misplaced. Section 72 provides: Section 72 Lease, Management, Grower or Service Contract, Mortgages and Other Claims xxxx (b) Mortgages and other claims registered with the [Register] of Deeds shall be assumed by the government to an amount equivalent to the landowners compensation value as provided in this Act (Underscoring supplied.) Surely, the other claims alluded to by law refer to payment of amortizations under a contract of sale which have not been extinguished by rescission. The government cannot assume an obligation which does not exist. Lastly, this Board has jurisdiction over agricultural landholdings covered by CARP in respect to the preliminary determination and payment of just compensation. (Sec. 1(b) of RULE II, DARAB New Rules of Procedure). However, as elucidated above, since petitionerappellee is not the owner of the disputed landholdings, [h]e has no cause of action against respondents-appellees. WHEREFORE, the Decision of the Adjudicator a quo dated March 30, 1998 is AFFIRMED in toto.[7] (Emphasis in the original; underscoring supplied) Respondent assailed the DARAB decision via Petition for Review[8] before the Court of Appeals. By Decision[9] of January 11, 2006, the appellate court modified the trial courts decision by ordering DBP to return to respondent the P1,000,000 which [respondent] paid as downpayment, following the law on rescission. We cannot write finis in this case without ordering respondent DBP to return the payment made by herein petitioner in view of the rescission of the subject Deed of Conditional Sale. Under Article 1385 of the Civil Code, rescission creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interests x x x. Hence, equity demands that the amount paid by the petitioner be returned to him. WHEREFORE, the assailed Decision dated February 23, 2004 isMODIFIED. With DBPs rescission of the contract it executed

19

with petitioner, DBP is consequently directed to return petitioner the P1,000,000.00 which the latter paid as down payment for the intended purchase of the subject parcels of land, plus 12% annual interest thereon. The decision stands in all other respects. [10] (Italics and underscoring in the original.) By a Partial Motion for Reconsideration,[11] DBP questioned the order to return the P1,000,000 which respondent had allegedly given as down payment. Respondent, upon the other hand, filed a Motion to Fix Date When [the P1,000,000 Would] Earn Interest.[12] The Court of Appeals denied DBPs Motion for Partial Reconsideration. It granted respondents motion and accordingly held that interest on the P1,000,000 would accrue upon the finality of the judgment until full payment.[13] Hence, DBPs present Petition for Review on Certiorari[14] faulting the appellate court to have erred

I.

II.

III.

. . . WHEN IT ORDERED DBP TO RETURN THE ALLEGED DOWNPAYMENT MADE BY PETITIONER IN THE ALLEGED AMOUNT OF P1,000,000.00 AS THIS WAS NEITHER RAISED AS AN ISSUE IN THE TRIAL COURT NOR IN PRIVATE RESPONDENTS AMENDED PETITION FOR REVIEW IN THE COURT OF APPEALS. IT WAS NOT EVEN ALLEGED AS ONE OF PRIVATE RESPONDENTS ASSIGNED ERRORS. . . . IN ORDERING THE REFUND OF P1,000,000.00 BASED MERELY ON DOCUMENTS SUBMITTED IN THE APPELLATE COURT BUT WERE NOT PROPERLY PRESENTED AND OFFERED AS EVIDENCE IN THE DARAB PROCEEDINGS. HENCE, THERE IS CERTAINLY NO BASIS FOR THE COURT TO ORDER DBP TO RETURN THE AMOUNT OF P1,000,000.00 TO PRIVATE RESPONDENT. GRANTING ARGUENDO THAT THE ISSUE ON DEPOSIT MAY PROPERLY BE CONSIDERED, [IN] FAIL[ING] TO CONSIDER THAT UNDER THE LAW BETWEEN THE PARTIES, PETITIONER DBP IS UNDER NO OBLIGATION TO RETURN THE ALLEGED DEPOSIT OF P1,000,000.00 WHICH PRIVATE RESPONDENT ALLEGEDLY PAID AS DOWNPAYMENT, BECAUSE THE DEED OF CONDITIONAL SALE DATED JULY 15, 1987 EXPRESSLY PROVIDES THAT IN CASE OF RESCISSION OF CONTRACT, ALL SUMS OF MONEY UNDER THE CONTRACT (INCLUDING DEPOSIT) SHALL BE CONSIDERED AND TREATED AS RENTALS FOR THE USE OF THE PROPERTY, [AND] PROFFERING THAT . . . UNDER THE SAME DEED, THE PRIVATE RESPONDENT IS DEEMED TO HAVE WAIVED ALL RIGHT/S TO ASK OR DEMAND RETURN OF THE SAID DEPOSIT.[15] (Emphasis in the original)

The petition is meritorious. The Court of Appeals erred in ordering DBP to return to respondent the P1,000,000.00 alleged down payment, a matter not raised in respondents Petition for Review before it. In Jose Clavano, Inc. v. Housing and Land Use Regulatory Board,[16] this Court held: x x x It is elementary that a judgment must conform to, and be supported by, both the pleadings and the evidence, and must be in accordance with the theory of the action on which the pleadings are framed and the case was tried. The judgment must be secudum allegata et probata.[17] (Italics in original) Due process considerations justify this requirement. It is improper to enter an order which exceeds the scope of relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be heard with respect to the proposed relief.[18]The fundamental purpose of the requirement that allegations of a complaint must provide the measure of recovery is to prevent surprise to the defendant.[19] Respondent invokes[20] this Courts pronouncement in Heirs of Ramon Durano, Sr. v. Uy[21] that [t]he Court of Appeals is imbued with sufficient discretion to review matters, not otherwise assigned as errors on appeal, if it finds that their consideration is necessary in arriving at a complete and just resolution of the case.[22] He argues that the return of the P1,000,000 downpayment is a necessary consequence of the rescission of the sale.[23] That rescission of a sale creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interests is undisputed.[24] However, to require DBP to return the alleged P1,000,000 without first giving it an opportunity to present evidence would violate the Constitutional provision that [n]o person shall be deprived of life, liberty, or property without due process of law x x x.[25] The essence of due process is to be found in the reasonable opportunity to be heard and submit any evidence one may have in support of ones defense.[26] In the case at bar, DBP had no opportunity to present evidence on its behalf. As it contends, Had [the] issue been raised in the lower court, petitioner DBP could have contested and presented evidence against the returning of the alleged deposit to private respondent. DBP could have shown that private respondent did not make a deposit in the amount of P1,000,000.00 but only P700,000.00 as the check for P300,000.00 was returned to him. Furthermore, the amount of P700,000.00, as previously discussed, was applied to rental pursuant to the Deed of Conditional Sale dated July 15, 1987. Since this was not raised as an issue, DBP has been denied the opportunity to rebut the belated claim of the private respondent. Manifestly, the Decision of the Appellate Court for the return of the alleged deposit made by the private respondent is baseless and was clearly in contravention of the basic rules of fair play, justice and due process.[27] (Emphasis and underscoring supplied) In another vein, as DBP further contends, the Court of Appeals based its order for the refund of P1,000.000 on documents submitted before it. These documents, however, were not only mere photocopies but were never formally offered in evidence, contrary to the provision of Section 3 of Rule 130 of the Rules of Court and Section 34 of Rule 132 of the same Rules which respectively read: SEC. 3. Original document must be produced; exceptions. When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases:

20

(a) (b)

When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror; When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice; When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and When the original is a public record in the custody of a public officer or is recorded in a public office.

(c)

(d)

SEC. 34. Offer of evidence. The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified. WHEREFORE, the petition is GRANTED. The January 11, 2006 decision of the Court of Appeals is REVERSED and SET ASIDE and the decision of the Department of Agrarian Reform Adjudication Board is REINSTATED. SO ORDERED.

LBP vs. DAR The Case Appealed under Rule 45 are the Decision[1] and Resolution[2] of the Court of Appeals (CA) dated December 14, 2007 and June 3, 2008, respectively, in CA-G.R. SP No. 00984, affirming the orders of the Department of Agrarian Reform Adjudication Board (DARAB) that granted private respondents motion to withdraw amended valuation. The Facts Private respondents, namely, the heirs of Vicente, Romeo, and Cesar, all surnamed Adaza, represented by Russel Adaza (Adazas, collectively), were owners of a tract of land with an area of 359 hectares, more or less, situated in Patagan, Manukan, Zamboanga del Norte and covered by Transfer Certificate of Title No. T-42963. Of the total, the Department of Agrarian Reform (DAR) identified a 278.4092-hectare portion as suitable for compulsory acquisition under the comprehensive agrarian reform program (CARP) pursuant to the Comprehensive Agrarian Reform Law of 1988 or Republic Act No. (RA) 6657, otherwise known as the CARP Law. In August 1991, the DAR sent out a notice of coverage. The claim folder profile was then endorsed to petitioner Land Bank of the Philippines (LBP) to determine the value of the land. The LBP assigned the covered 278.4092-hectare area an aggregate value of PhP 786,654.46. The DAR, in turn, offered the same amount to the Adazas as just compensation for their landholding, but the latter considered the valuation for their developed property unreasonably low and rejected the offer. This prompted DAR to order the LBP to deposit the amount aforestated to the account of the Adazas, who then secured the release of that amount without prejudice to their right to a final determination of just compensation. The DAR then subdivided the property into smaller lots and, in December 1992, distributed them to identified beneficiaries. Pursuant to the pertinent provision of the then governing 2003 DARAB Rules of Procedure in relation to Section 16(d) of RA 6657 in case of contested valuation, the Provincial Agrarian Reform Adjudicator (PARAD) of Zamboanga del Norte conducted a summary administrative hearing to determine just compensation. In the course of the hearing and on its preliminary estimation that the computation was unconscionably low, the PARAD, by Order of December 22, 2003,[3] asked the LBP to undertake another landsite inspection and recomputation of the value of the subject landholding in accordance with the latest formulae on land valuation. The LBP later submitted its compliance report,[4] in which it came out with a new revalued figure and prayed that the PARAD adopt the recomputed value in the amount of PhP 3,426,153.80 as just compensation for the Adazas CARP-covered property. On May 23, 2005, the PARAD issued another Order[5] disposing as follows: WHEREFORE, x x x order is hereby issued affirming the recomputed valuation of the covered landholding in the sum of P3,426,153.80 to be in accordance with the latest applicable administrative order and guidelines, without prejudice to the right of the [Adazas] to appeal, or go to the Special Agrarian Court whenever proper.[6] The Adazas found the reevaluated amount level still too low, prompting them to appeal to the DARAB, docketed as DARAB Case No. 13719LV. Pending resolution of their appeal, the Adazas interposed a Motion to Withdraw Amended Valuation[7] on August 9, 2005, seeking the release to them of the amount representing the difference between the initial valuation and the second valuation. The Adazas alleged having long been dispossessed of the subject property, while the farmerbeneficiaries installed on it are enjoying full possession of it. In its Comment[8] dated October 6, 2005, the LBP disputed the Adazas right to lay claim on the recomputed valuation, and, at the same time, questioned the legality of their right before the DARAB. Thus, pending finality of the resolution setting just compensation, the LBP added, no execution shall lie insofar as the incremental value is concerned.

21

By Order[9] dated January 2, 2006, the DARAB granted the motion to withdraw amended valuation, with a directive to its Secretariat to issue the necessary writ of execution, on the strength of the ensuing ratiocination: Execution pending appeal is allowed when superior circumstances demanding urgency outweigh the damages that may result from the issuance of the writ. [The Adazas] were already deprived of the beneficial ownership of the subject landholding effective December 1992. x x x To the mind of this Board, the long years of waiting by the [Adazas] for the final determination of just compensation of the subject landholding outweighs the damages that may result from the issuance of the writ of execution pending appeal. Staying the execution of the 23 May 2005 Decision of the Adjudicator a quo who affirmed the valuation made by the LBP, would bring more injustice to [the Adazas]. x x x Besides, Section [1]6 of RA 6657 does not make a distinction as to initial valuation or amended valuation made by the LBP. Any valuation made by the LBP on CARP-covered land is made pursuant to Executive Order No. 405, Series of 1990. LBP then moved for reconsideration, but the DARAB, per its Order[10] of March 14, 2006, denied the motion and reiterated its earlier directive on the issuance of a writ of execution. Therefrom, the LBP went to the CA on certiorari under Rule 65. Ruling of the Appellate Court By Decision dated December 14, 2007, as effectively reiterated in a Resolution of June 3, 2008, the CA found the allegations on grave abuse of discretion on the part of the DARAB to be baseless and accordingly denied the LBPs petition for certiorari, disposing: WHEREFORE, the petition is DENIED. The assailed Orders of the DARAB dated January 2, 2006 and March 14, 2006 are hereby AFFIRMED in toto. Hence, this petition for review, on the following legal issue: WHETHER OR NOT THE [DARAB] CAN ORDER THE RELEASE TO THE LANDOWNERS, BY WAY OF EXECUTION PENDING APPEAL, OF THE INCREMENTAL DIFFERENCE OF A LANDBANK RECOMPUTATION UPHELD IN A DECISION OF THE DAR ADJUDICATOR A QUO WITHIN THE PURVIEW OF SECTION 16, ET SEQ. OF THE CARP LAW (R.A. 6657) AND ITS IMPLEMENTING RULES. In the main, it is the LBPs posture that the DARAB cannot validly order the release of the incremental difference (amended valuation amount of PhP 3,426,153.80 original valuation amount of PhP 786,564.46 = incremental amount or difference) by way of execution pending appeal inasmuch as the amended valuation has yet to be approved by DAR. Without such approval, so LBPs argument goes, there is really no amended valuation within the ambit of Sec. 16 of the CARP Law, which contemplates of a DARLBP valuation. In the absence, thus, of a duly DAR-approved valuation, there is no subject for execution.[11] And at any event, LBP also argues that it has no statutory duty to release any amount resulting from any subsequent reevaluation based on an order which is not yet final and executory.[12] Our Ruling The petition is without merit. Three points need to be emphasized at the outset. First, the amount of PhP 3,426,153.80 the Adazas want to be released pending appeal, or pending final determination of just compensation, to be precise, was arrived at by LBP, its re-evaluation efforts taken pursuant to Executive Order No. 405,[13] Series of 1990, Sec. 1 of which reads: SECTION 1. The [LBP] shall be primarily responsible for the determination of the land valuation and compensation for all private lands suitable for agriculture under the Voluntary Offer to Sell (VOS) or Compulsory Acquisition (CA) arrangement as governed by [RA] 6657. The [DAR] shall make use of the determination of the land valuation and compensation by the [LBP] in the performance of functions. After effecting the transfer of titles from the landowner to the Republic of the Philippines, the [LBP] shall inform the DAR of such fact in order that the latter may proceed with the distribution of the lands to the qualified agrarian reform beneficiaries x x x. Second, the LBP, no less, had asked the PARAD to adopt LBPs recomputed value of PhP 3,426,153.80 as just compensation for the subject property. And third, the Adazas landholding had already been distributed before full payment of just compensation could be effected. In fact, the Adazas have been deprived of the beneficial use and ownership of their landholding since 1992 and have received only PhP 786,564.46 for their 278.40-hectare CARP-covered lands.[14]

22

In light of the foregoing considerations, it is but just and proper to allow, with becoming dispatch, withdrawal of the revised compensation amount, albeit protested. The concept of just compensation contemplates of just and timely payment; it embraces not only the correct determination of the amount to be paid to the landowner, but also the payment of the land within a reasonable time from its taking.[15] Without prompt payment, compensation cannot, as Land Bank of the Philippines v. Court of Appeals[16]instructs, be considered just, for the owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for years before actually receiving the amount necessary to cope with his loss. The LBPs argument that by allowing withdrawal of the incremental amount, the government may be placed at a losing end, citing the possibility that the recomputed amount may be more than the just compensable value of the 278.40 hectares taken, is specious. For one, as an exercise of police power to complement eminent domain, the forced taking of private property under the CARP puts the landowners, and not the government, in a situation where the odds are already stacked against them. One thing going for the landowners, though, is that they cannot, as a matter of law, be compelled to accept the LBPs valuation of their expropriated land and/or accept DARs offer by way of compensation. And for another, the stated risk which the DAR or the government will allegedly be exposed to if immediate withdrawal of the rejected compensation is allowed is at the moment pure speculation. The DARAB, with its presumptive expertise in agrarian land valuation, even dismissed as very remote the possibility of the LBP-amended valuation exceeding the value of the subject landholding using the valuation criteria and formulae prescribed under the law. It may be well to explicate at this juncture the nature of the right of landowners to the amount set aside for their land placed under CARP. Under the CARP Law, the landowners are entitled to withdraw the amount deposited in their behalf pending the final resolution of the case involving the final valuation of his property. This entitlement remains regardless of whether the amount is provisional, as contemplated in Sec. 16(d) and (e) of RA 6657 or the final compensation as provided under Sec. 18 of the same law. The provisions referred to respectively provide: Sec. 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of private lands, the following procedures shall be followed: xxxx (d) In case of rejection [of the offer of DAR to pay a corresponding value in accordance with the valuation set forth in Section 17 and 18] or failure to reply, the DAR shall conduct summary administrative proceedings to determine the compensation for the land requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of the notice. x x x (e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. (Emphasis supplied.) Sec. 18. Valuation and Mode of Payment. The LBP shall compensate the landowner the amount as may be agreed upon by the landowner and the DAR and the LBP in accordance with the criteria provided for in Sections 16 and 17,[17] and other provisions hereof or as may be finally determined by the court as the just compensation for the land. In Land Bank of the Philippines v. Court of Appeals, the Court stressed the need to allow the landowners to withdraw immediately the amount deposited in their behalf, pending final determination of what is just compensation for their land, thus: The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to appropriate the amounts already deposited in their behalf as compensation for their properties simply because they rejected the DARs valuation, and notwithstanding that they have already been deprived of the possession of such properties is an oppressive exercise of eminent domain. The irresistible expropriation of private respondents properties was painful enough. But DAR rubbed it in all the more by withholding that which rightfully belongs to private respondents in exchange for the taking x x x. This is misery twice bestowed on private respondents, which the Court must rectify. Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final compensation under Section 18 for purposes of exercising the landowners right to appropriate the same. The immediate effect in both situations is the same, the landowner is deprived of the use and possession of his property for which he should be fairly and immediately compensated.[18](Emphasis ours.)

23

The LBP, in a bid to stall further the Adazas claim to the difference of the new and original valuation amounts, would foist the argument that the sum which the CARP Law requires it to set aside and which the landowner may withdraw is the amount corresponding to the LBP-DAR valuation. LBP adds, however, that in the instant case, the DAR has yet to approve the new valuation. The Court may accord cogency to LBPs argument, but for the fact that the Provincial Adjudicator a quo and eventually the DARAB affirmed the new property valuation made by the LBP. By virtue of such affirmatory action, the DAR has, in effect, approved the PhP 3,426,153.80-LBP valuation, DARAB being the adjudicating arm of DAR.[19]Lest it be overlooked, the DARAB has primary jurisdiction to adjudicate all agrarian disputes, inclusive of controversies relating to compensation of lands under the CARP Law,[20] as the determination of just compensation is essentially a judicial function.[21] As aptly observed by the DARAB, there is no way that such amended valuation would go down as it is the landowners who have exhibited opposition to the valuation. The LBPs lament about the impropriety of what amounts to the DARAB allowing execution pending appeal without requiring the Adazas to post a bond does not persuade. Under Rule XX, Section 2 of the 2003 DARAB Rules of Procedure,[22] the DARAB may grant a motion to execute an order or decision pending appeal upon meritorious grounds. To the DARAB, there is no more ground more meritorious than the [Adazas] agony of waiting for a long period of time to have their properties properly valued.[23]We cannot agree more. The length of time that the Adazas have been deprived of their property without receiving their just due on a rather simple issue of just compensation will suffice to justify the exercise by DARAB of its discretion to allow execution pending appeal. To paraphrase what we said in Apo Fruits Corporation v. Court of Appeals,[24]allowing the taking of the landowners property and leaving them empty-handed while government withholds compensation are undoubtedly oppressive. On the matter of allowing execution pending appeal without requiring the Adazas to put up a bond, we cite with approval what the DARAB sensibly wrote on that regard: As [regards] the posting of bond, the office of bond is for the payment of damages which the aggrieved party may suffer in the event the final order or decision is reversed on appeal. As stated in the preceding paragraph the possibility of having the LBP amended valuation be reversed is very remote. Thus, this Board is of the opinion that posting of bond is not necessary for the execution pending appeal of the 23 May 2005 decision. Besides the amount to be released is the amount computed by LBP itself. WHEREFORE, this petition is hereby DENIED. SO ORDERED. LBP vs. RODRIGUEZ DECISION MENDOZA, J.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing 1] the December 23, 1998 Resolution[1] of the Court of Appeals, in CA-G.R. CV No. 60471, dismissing the appeal of petitioner Land Bank; and 2] its July 3, 2001 Resolution denying petitioners motion for the reconsideration thereof. THE FACTS Respondent Luz L. Rodriguez (Rodriguez) is the registered owner of three (3) parcels of agricultural land in Basud, Camarines Norte, which she voluntarily offered for sale to the government under the Comprehensive Agrarian Reform Program under Republic Act (RA) 6657 (CARP). These parcels of land are covered by Transfer Certificate of Title (TCT) No. 15208 with an area of 111.3895 hectares, TCT No. 15225 with an area of 20.0345 hectares and TCT No. T-15213 with an area of 47.2877 hectares (the property). The portion of the property planted to coconuts has a total area of 177.4240 hectares, while the portion planted to rice has an area of 1.2877 hectares.[2] Under the CARP, the government, in the exercise of its power of eminent domain, takes over private agricultural property for distribution to qualified beneficiaries after paying just compensation to the landowner. In the present case, the Department of Agrarian Reform (DAR), as implementor of the land reform program, already expropriated the property but the Land Bank of the Philippines (Landbank) as financier has not yet paid their full value to Rodriguez.[3] Not satisfied with the amount offered as compensation, Luz Rodriguez filed a petition to determine just compensation with the Regional Trial Court of Daet, Camarines Norte, sitting as Special Agrarian Court (RTC-SAC). After trial, the RTC-SAC rendered a decision, the dispositive portion of which reads: IN VIEW OF THE CIRCUMSTANCES, judgment is hereby rendered as follows: 1. Ordering respondent Landbank to pay the petitioner Luz Rodriguez for the 160.851 hectares of coconut land in the sum of P17,443,245.41 in cash and in bonds the proportion provided by law;

24

2.

Ordering respondent Landbank to pay the petitioner for the 1.2877 hectares of riceland in the sum of P77,200.00 in cash and in bonds in the proportion provided for by law; Ordering respondent Landbank to pay the petitioner Luz Rodriguez the sum of P254,132.00 as the compounded interest in cash.

3.

IT IS SO ORDERED. Landbank moved for reconsideration of the RTC-SAC decision but its motion was denied. On August 18, 1998, Landbank filed a Notice of Appeal.[4] In its August 20, 1998 Order,[5] the RTC-SAC gave due course to the notice of appeal. Eventually, the original records were forwarded to the Court of Appeals (CA). Not in conformity with the August 20, 1998 Order, Rodriguez asked the RTC-SAC for its reconsideration basing its motion on Section 60 of RA 6657. Under said section, an appeal may be taken from the decision of the Special Agrarian Courts by filing a petition for review with the Court of Appeals within fifteen (15) days from receipt of notice of the decision; otherwise, the decision shall become final. The RTC-SAC found Rodriguezs motion meritorious and declared that its determination in its September 18, 1998 order of the amount of just compensation had become final and executory. It also ordered the return of the records that were already forwarded to the CA.[6] Based on this order, Rodriguez filed a motion[7] with the CA for the return of the records. Landbank filed an opposition and argued that the CA had jurisdiction over its appeal and could decide if its appeal was proper. In time, the CA dismissed Landbanks appeal through its assailed resolution with the following dispositive portion: ACCORDINGLY, for failure of appellant to avail of the proper remedy, the instant appeal is hereby DISMISSED. Appellees Motion to Remand Records to the Court of Origin, Regional Trial Court, Branch 40, Daet, Camarines Norte is GRANTED. Let the entire record be returned to the trial court for resolution of incidents pending therein. THE ISSUE In this petition, Landbank submits that the sole issue is whether the proper mode of appeal from a decision of the RTCSAC under the Rules of Court is by ordinary appeal under Rule 41[8] or by petition for review under Rule 42.[9] Landbank posits that the proper mode of appeal is by ordinary appeal pursuant to Section 61 of RA 6657.[10] In her Comment,[11] Rodriguez contends that a petition for review, not an ordinary appeal, is the proper procedure as held in Land Bank of the Philippines v. DeLeon.[12]

THE COURTS RULING Landbank admitted in its Memorandum[13] that the issue had already been settled in Land Bank of the Philippines v. De Leon. In ruling that a petition for review and not an ordinary appeal is the proper mode of appeal from the decision of the RTCSAC in cases involving the determination of just compensation, the Court said: The reason why it is permissible to adopt a petition for review when appealing cases decided by the Special Agrarian Courts in eminent domain cases is the need for absolute dispatch in the determination of just compensation. Just compensation means not only paying the correct amount but also paying for the land within a reasonable time from its acquisition. Without prompt payment, compensation cannot be considered "just" for the property owner is made to suffer the consequences of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. Such objective is more in keeping with the nature of a petition for review. Unlike an ordinary appeal, a petition for review dispenses with the filing of a notice of appeal or completion of records as requisites before any pleading is submitted. A petition for review hastens the award of fair recompense to deprived landowners for the government-acquired property, an end not foreseeable in an ordinary appeal. xxx On March 20, 2003, the Court issued an En Banc Resolution[14] to address the status of pending cases which had been appealed through a notice of appeal:

25

WHEREFORE, the motion for reconsideration dated October 16, 2002 and the supplement to the motion for reconsideration dated November 11, 2002 are partially granted. While we clarify that the Decision of this Court dated September 10, 2002 stands, our ruling therein that a petition for review is the correct mode of appeal from decisions of Special Agrarian Courts shall apply only to cases appealed after the finality of this Resolution. [emphasis supplied] As earlier stated, Landbank filed its notice of appeal on August 18, 1998. Pursuant to the ruling that De Leon can be applied prospectively from March 20, 2003, the appeal of Landbank, filed prior to that date, could be positively acted upon. Accordingly, the subject CA resolutions should be set aside and Landbank should be allowed to elevate the matter to it via Rule 42 of the Rules of Court furnishing a copy to the heirs of Luz Rodriguez at their address of record. This case originated from a petition filed by Luz Rodriguez to determine just compensation. Our Constitution speaks of just compensation in Section 4, Article XIII, providing that the distribution of agricultural lands undertaken by the State under its agrarian reform program shall be subject to the payment of just compensation. The word "just" is used to describe "compensation" to ensure that the amount paid for the property taken is real, substantial, full, and ample.[15] For compensation to be just, it must also be made without delay. This petition was filed in 2001 but remained unresolved basically due to the failure of Luz Rodriguez to submit the required memorandum.[16] As the records show, the deaths of Rodriguez on February 24, 1999[17] and of her counsel, Atty. Fernando A. Santiago (Atty. Santiago), on August 22, 2005[18] were the reasons for the delay. On April 14, a few months before he died of cancer, Atty. Santiago manifested that Atty. Hector Reuben D. Feliciano (Atty. Feliciano) was his co-counsel in this case.[19]After Luz Rodriguez failed to file her memorandum, the Court required Atty. Feliciano to secure and submit the written conformity of Rodriguezs heirs, Domiciano and Celestino Rodriguez.[20] Atty. Feliciano attempted to comply with the order, but the heirs reportedly failed to respond to his letters. This prompted him to pray in his April 13, 2009 compliance[21] that he be discharged from further representing Rodriguez. The Court deferred action on his prayer and ordered that a copy of the resolution requiring the parties to file a memorandum be sent to Rodriguezs heirs.[22] To date, the heirs have not responded to the communications. As the case pertains only to a procedural matter, the Court resolves the impasse by considering the resolution requiring the heirs of Luz Rodriguez to file their memorandum as served and by deciding the merits of the case in this disposition. Technicalities that impede the cause of justice must be avoided.[23] To allow the case, which have been pending in this Court for almost ten years now, to remain in limbo would be unfair to both parties especially to the heirs of Luz Rodriguez, as the DAR had already taken possession of the property. At any rate, the heirs were already notified at their address of record. As the petitioner Land Bank has been allowed to file a petition for review, as earlier stated, it should furnish the heirs of Luz Rodriguez and Atty. Feliciano[24] copies thereof before it could be given due course. WHEREFORE, the petition is PARTIALLY GRANTED. The assailed resolutions of the Court of Appeals are SET ASIDE. Petitioner Landbank is given fifteen (15) days from receipt of this disposition to file its petition for review, furnishing the heirs of Luz Rodriguez and Atty. Hector Reuben D. Feliciano copies thereof at their respective addresses of record. SO ORDERED. CASES: CONVERSION AND RECLASSIFICATION OFLANDS SSS VS. DAR DECISION CHICO-NAZARIO, J.: The Social Security System (SSS) filed against the Department of Agrarian Reform (DAR), the Register of Deeds of Marikina City and several farmers-beneficiaries, a complaint (Civil Case No. 1300-97)[1] for Annulment of Transfer Certificates of Title (TCTs) No. 1259, No. 1260, and No. 1261 with Recovery of Possession and prayer for the issuance of a writ of preliminary injunction before the Regional Trial Court (RTC) of San Mateo, Rizal, Branch 75. In its Complaint, the SSS alleged it is the absolute owner of several parcels of land located at Rodriguez, Rizal, with an area of more or less three hundred hectares. The said property was covered under Republic Act No. 6657 (Comprehensive Agrarian Reform Program [CARP]) by the DAR. The SSS earlier filed a case for conversion of the land, from agricultural to residential and other urban uses, before the DARs Adjudicatory Board which was denied by the DAR on 22 March 1990.[2] Undaunted, the SSS filed before the Court of Appeals a Petition for Review onCertiorari, CA-G.R. SP No. 38043 which was dismissed on 31 August 1995.[3] The SSS elevated the case to this Court on Petition for Review on Certiorari, G.R. No. 122580, which was again denied for failure to comply with Circular No. 1-88,[4] it appearing that petitioner SSS failed to submit a verified statement of material dates to determine the timeliness of the filing of the petition and the timeliness of the payment of legal fees as required by par. 4 of the said circular.[5] Its motion for reconsideration was denied in a resolution of this Court dated 27 March 1996.[6] The denial has become final and executory and Entry of Judgment was issued on 27 June 1996.[7]

26

Meanwhile, DAR issued Certificates of Land Ownership Award (CLOAs) to some 201 persons identified as farmersbeneficiaries of the land on 23 December 1991. On 11 July 1997,[8] the defendants filed a joint motion to dismiss claiming that jurisdiction over the case falls with the Department of Agrarian Reform Adjudication Board (DARAB). In an Order dated 12 March 1999, the RTC[9] granted the joint motion to dismiss.[10] From this Order, the SSS is now before us arguing that the RTC erred in holding it has no jurisdiction over the case.[11] In a resolution dated 16 August 1999, this Court denied the Petition for failure of the petitioner to serve a copy thereof to the respondent court.[12] The SSS filed a motion for reconsideration.[13] In a resolution dated 20 October 1999, this Court resolved to grant the motion and required the respondents to comment on the Petition.[14] On 10 August 2000, respondents farmers-beneficiaries filed their compliance.[15] From a resolution dated 27 November 2000, the parties were required to file their respective Memorandum.[16] Insisting on the jurisdiction of the trial court over the case, the SSS averred that the issue raised before the trial court was not the issuance of the CLOAs, nor the coverage or exemption of the SSS from the CARP, but the illegality or lack of legal basis of the cancellation of a valid torrens title in the name of the SSS which led to the issuance of TCTs No. 1259, No. 1260 and No. 1261 in favor of the farmers-beneficiaries, without notice and just compensation. It asserts that the jurisdiction of the DARAB pertains to agrarian disputes which does not obtain in the case at bar. It points out that under Chapter V, Section 16(f) of Rep. Act No. 6657, jurisdiction is with the RTC.[17] On the other hand, negating it has jurisdiction over the case, the trial court held: The primordial issue to by (sic) resolved is the jurisdiction of the DARAB which defendants-movants argue to have jurisdiction over the case. Under Rule 11, Section 1(F) of the DARAB New Rules of Procedure the board has jurisdiction over 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. The present case was filed by plaintiff SSS precisely to annul Certificate of Title Nos. 1259, 1260 and 1261 which, as pointed out by defendants-movants, emanated from CLOAs issued by the Department of Agrarian Reform. The present case ultimately involves CLOAs and is, therefore, within the jurisdiction of the DARAB. In fine, since SSS seeks annulment of the above-mentioned titles which emanated from CLOAs, the proper venue for the present case is the DARAB. As to the argument raised by the SSS regarding the nature of the land, suffice it to say that since plaintiff itself has filed a petition with the DAR for conversion of the classification of the subject parcel of land from agricultural to residential land, it has expressly recognized that said parcels of land to be agricultural land. This being the case, said parcels of land are under the jurisdiction of DARAB because under Section 4 of R.A. 6657 all public and private agricultural land are covered by CARP and all disputes involving lands covered by the CARP are within the jurisdiction of the DARAB. SSS should not be allowed in one breath to invoke the jurisdiction of the DARAB and then, after failing to obtain the relief it sought, assail the same and now claim that jurisdiction rests with the regular courts. It should be noted at this point that the application for conversion filed by the SSS had been finally disposed off by no less tha[n] the Supreme Court.[18] The Petition lacks merit. Irrefragably, the titles sought to be annulled by the SSS, namely, TCTs No. 1259, No. 1260 and No. 1261 originated from the CLOAs issued by the DAR in pursuance of, and in accordance with, the provisions of Rep. Act No. 6657, the Comprehensive Agrarian Reform Program. Specifically, the SSS in its Complaint implored the trial court to restrain the DAR from implementing Rep. Act No. 6657 and the defendants, farmers-beneficiaries from occupying/tilling, cultivating /disposing the properties.[19] Section 1, Rule II, 2002 DARAB Rules of Procedure provides that: 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. ... Specifically, such jurisdiction shall extend over but not limited to the following: ...

27

f) Cases involving the issuance of Certificate of Land Transfer (CLT), Certificate of landownership Award (CLOA) and Emancipation Patent (EP) and the administrative correction thereof; (Italics added) Thus, taking its bearings from the above provision, Centeno v. Centeno[20] explicitly and compellingly validated the jurisdiction of the DARAB over cases involving issuance of CLOAs, and went on further: . . . under Section 50 of R.A. 6657 (the Comprehensive Agrarian Reform Law of 1988), the DAR is vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction over all matters involving the implementation of the agrarian reform program. The rule is that the DARAB has jurisdiction to try and decide any agrarian dispute or any incident involving the implementation of the Comprehensive Agrarian Reform Program. (Italics supplied) Section 1, Rule II of the Revised Rules of Procedure of the DARAB provides: Section 1. Primary, Original and Appellate Jurisdiction. The Agrarian Reform Adjudication Board shall have primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Orders Nos. 229, 228 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. In the relatively recent case of Rivera v. Del Rosario,[21] this Court cited Section 1, Rule II, 2002 DARAB Rules of Procedure and reiterated that: The DARAB has exclusive original jurisdiction over cases involving the rights and obligations of persons engaged in the management, cultivation and use of all agricultural lands covered by the Comprehensive Agrarian Reform Law. Again in David v. Rivera,[22] this Court pointed out that the jurisdiction over agrarian reform matters is now expressly vested in the DAR through the DARAB. Indeed, Section 50 of R.A. 6657 confers on the Department of Agrarian Reform (DAR) quasi-judicial powers to adjudicate agrarian reform matters. In the process of reorganizing the DAR, Executive Order No. 129-A created the DARAB to assume the powers and functions with respect to the adjudication of agrarian reform cases. Section 1, Rule II of the DARAB Rules of Procedure enumerates the cases falling within the primary and exclusive jurisdiction of the DARAB. In an earlier ruling rendered in the case of Vda. de Tangub v. Court of Appeals,[23] reiterated in Morta, Sr. v. Occidental[24] and Heirs of the late Herman Rey Santos v. Court of Appeals,[25] this Court decreed: Section 1 of Executive Order No. 229 sets out the scope of the Comprehensive Agrarian Reform Program (CARP); it states that the program . . . shall cover, regardless of tenurial arrangement and commodity produce, all public and private agricultural land as provided in Proclamation No. 131 dated July 22, 1987, including whenever applicable in accordance with law, other lands of the public domain suitable to agriculture. Section 17 thereof 1) vested the Department of Agrarian Reform with quasi-judicial powers to determine and adjudicate agrarian reform matters, and 2) granted it jurisdiction over all matters involving implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the DENR and the Department of Agriculture (DA), as well as `powers to punish for contempt and to issue subpoena, subpoena duces tecum and writs to enforce its orders or decisions.[26] In Nuesa v. Court of Appeals,[27] the Court, in addition to re-echoing the jurisdiction of the DARAB, puts emphasis on the extent of the coverage of the term agrarian dispute, thus: As held by this Court in Centeno v. Centeno [343 SCRA 153], the DAR is vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction over all matters involving the implementation of the agrarian reform program. The DARAB has primary, original and appellate jurisdiction to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under R.A. 6657, E.O. Nos. 229, 228 and 129-A, R.A. 3844 as amended by R.A. 6389, P.D. No. 27 and other agrarian laws and their implementing rules and regulations. Under Section 3(d) of R.A. 6657 (CARP Law), agrarian dispute is defined to include (d). . . any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise over lands devoted to agriculture, including disputes concerning farmworkers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this

28

Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee. (Underlining ours) In the light of the foregoing, and guided by the pronouncements made by this Court in the cases cited above, we find that the trial court correctly ruled that the DARAB has jurisdiction to hear and decide the case of herein petitioner SSS. WHEREFORE, premises considered, the instant petition for review is DENIED for lack of merit. NICOP MGT VS. DE LEON These consolidated petitions assail the November 8, 2006 Decision[1] of the Court of Appeals in CA-G.R. SP No. 92316, finding respondent Leonida de Leon as a bonafide tenant of the subject property, thereby reversing and setting aside the Decision of the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No. 13502[2] which affirmed the Decision[3] of the Regional Adjudicator in DARAB Case No. 0402-031-03. Also assailed is the March 1, 2007 Resolution[4] denying the motions for reconsideration. On August 26, 2004, respondent filed a complaint before the Office of the Provincial Agrarian Reform Adjudicator (PARAD) of Region IV- Province of Cavite, praying that petitioners Salvador R. Lim and/or NICORP Management and Development Corporation (NICORP) be ordered to respect her tenancy rights over a parcel of land located in Barangay Mambog III, Bacoor, Cavite, registered under TCT No. T-72669 in the name of Leoncia De Leon and Susana De Leon Loppacher (De Leon sisters), who were likewise impleaded as parties-defendants in the suit. Respondent alleged that she was the actual tiller and cultivator of the land since time immemorial with full knowledge and consent of the owners, who were her sisters-in-law; that sometime in 2004, petitioners circulated rumors that they have purchased the property from the De Leon sisters; that petitioners ignored respondent's requests to show proof of their alleged ownership; that on August 12, 2004, petitioners entered the land and uprooted and destroyed the rice planted on the land and graded portions of the land with the use of heavy equipment; that the incident was reported to the Municipal Agrarian Reform Office (MARO) which issued a Cease and Desist Order[5]but to no avail. Respondent thus prayed that petitioners be ordered to respect her tenancy rights over the land; restore the land to its original condition and not to convert the same to non-agricultural use; that any act of disposition of the land to any other person be declared null and void because as a tenant, she allegedly had a right of pre-emption or redemption over the land; and for actual damages and attorney's fees.[6] Petitioner Lim denied that respondent was a tenant of the subject property under the Comprehensive Agrarian Reform Program (CARP). He alleged that respondent is a septuagenarian who is no longer physically capable of tilling the land; that the MARO issued a certification[7] that the land had no registered tenant; that respondent could not be regarded as a landless tiller under the CARP because she owns and resides in the property adjacent to the subject land which she acquired through inheritance; that an Affidavit of Non-Tenancy[8] was executed by the De Leon sisters when they sold the property to him. Moreover, Lim claimed that respondent and her family surreptitiously entered the subject land and planted a few crops to pass themselves off as cultivators thereof; that respondent tried to negotiate with petitioner Lim for the sale of the land to her, as the latter was interested in entering into a joint venture with another residential developer, which shows that respondent has sufficient resources and cannot be a beneficiary under the CARP; that the land is no longer classified as agricultural and could not thus be covered by the CARP. Per certification issued by the Office of the Municipal Planning and Development Coordinator of Bacoor, Cavite, the land is classified as residential pursuant to a Comprehensive Land Use Plan approved by the Sangguniang Panlalawigan.[9] For its part, petitioner NICORP asserted that it was not a proper party to the suit because it has not actually acquired ownership of the property as it is still negotiating with the owners. However, it joined in petitioner Lim's assertion that respondent is not a qualified tenant; and that the subject land could not be covered by the CARP since it is below the minimum retention area of five hectares allowed under the program.[10]Eventually, NICORP purchased the subject property from Lim on October 19, 2004.[11] The De Leon sisters did not file a separate answer to respondent's complaint. Meanwhile, Provincial Adjudicator Teodoro A. Cidro, to whom the case was assigned, died. Thus, the case was referred to the Office of the Regional Agrarian Reform Adjudicator (RARAD) for resolution. In compliance with the directive of the RARAD, respondent submitted as evidence an Extra-Judicial Settlement of Estate[12] dated February 20, 1989 to prove that, as a result of her relationship with her sisters-in-law, she was made a tenant of the land; a tax declaration[13] showing that the land was classified as irrigated riceland; several affidavits[14] executed by farmers of adjacent lands stating that respondent and her family were tenants-farmers on the subject land; and several documents and receipts[15] to prove the agricultural activities of respondent and her family. Respondent likewise submitted a handwritten letter[16] of Susana De Leon addressed to respondent's daughter Dolores, showing that the former purportedly acknowledged respondent's son, Rolando, as the legitimate tenant-lessee on the land. However, Rolando died on September 1, 2003 as evidenced by his death certificate.[17] On December 6, 2004, the RARAD rendered a Decision dismissing the complaint for failure of respondent to prove by substantial

29

evidence all the requisites of an agricultural tenancy relationship.[18] There was no evidence to show that the De Leon sisters constituted respondent as tenant-lessee on the land; neither was it proved that there was sharing of harvests with the landowner. The DARAB affirmed the decision of the RARAD.[19] On appeal, the Court of Appeals reversed and set aside the findings of the RARAD/DARAB stating that there was sufficient evidence to prove the elements of an agricultural tenancy relationship; that the letter of Susana De Leon to Dolores clearly acknowledged respondent's son, Rolando, as a tenant, as well as respondent's share in the proceeds of the sale of the land; and that the sharing of produce was established by the affidavits of neighboring farmers that were not controverted by petitioners. The appellate court further held that the reclassification of the land by the Sangguniang Panlalawigan as residential cannot be given weight because it is only the Department of Agrarian Reform (DAR) that can reclassify or convert an agricultural land to other uses or classifications; and that the sale of the land by the De Leon sisters to petitioner Lim is void because it violated Section 70 of Republic Act (R.A.) No. 6657[20] or the Comprehensive Agrarian Reform Law (CARL). Petitioners filed a motion for reconsideration but it was denied.[21] Hence, petitioners Lim and NICORP separately filed petitions under Rule 45 of the Rules of Court, which were consolidated per resolution of the Court dated June 4, 2007.[22] Petitioners allege that respondent failed to prove by substantial evidence all the elements of a tenancy relationship; hence the Court of Appeals erred in finding that respondent has tenancy rights over the subject land. The petitions are meritorious. There is a tenancy relationship if the following essential elements concur: 1) the parties are the landowner and the tenant or agricultural lessee; 2) the subject matter of the relationship is an agricultural land; 3) there is consent between the parties to the relationship; 4) the purpose of the relationship is to bring about agricultural production; 5) there is personal cultivation on the part of the tenant or agricultural lessee; and 6) the harvest is shared between landowner and tenant or agricultural lessee.[23] All the foregoing requisites must be proved by substantial evidence and the absence of one will not make an alleged tenant a de jure tenant.[24] Unless a person has established his status as a de jure tenant, he is not entitled to security of tenure or covered by the Land Reform Program of the Government under existing tenancy laws.[25] In the instant case, there is no substantial evidence to support the appellate court's conclusion that respondent is a bona fide tenant on the subject property. Respondent failed to prove the third and sixth elements cited above. It was not shown that the De Leon sisters consented to a tenancy relationship with respondent who was their sister-in-law; or that the De Leon sisters received any share in the harvests of the land from respondent or that the latter delivered a proportionate share of the harvest to the landowners pursuant to a tenancy relationship. The letter of Susana De Leon to Dolores, which allegedly proved consent of the De Leon sisters to the tenancy arrangement, partially reads: Nuong ako ay nandiyan, hindi nagkaayos ang bukid kasi ang iyong Kuya Roly ay ayaw na si Noli ang ahente. Pero bago ako umalis ay nagkasundo kami ni Buddy Lim (Salvador) na aayusin niya at itutuloy ang bilihan at siya ang bahala sa Kuya Roly mo. Kaya nagkatapos kami at ang kasama ng Kuya mo ngayon ay si Buddy Lim. Ang pera na para sa kasama ay na kay Buddy Lim. Ang kaparte ng Nanay Onching (Leoncia) mo ay nasa akin ang karamihan at ako na ang mag-aasikaso. The Court cannot agree with the appellate court's conclusion that from the tenor of the letter, it is clear that Susana acknowledged respondent's deceased son as "kasama" or tenant, and recognized as well respondent's share in the proceeds of the sale, thus proving the existence of an implied leasehold relations between the De Leon sisters and respondent.[26] The word "kasama" could be taken in varying contexts and not necessarily in relation to an agricultural leasehold agreement. It is also unclear whether the term "kasama" referred to respondent's deceased son, Rolando, or some other person. In the first sentence of the second paragraph, the word "kasama" referred to petitioner Lim while the second sentence of the same paragraph, did not refer by name to Rolando as "kasama." Likewise, "Nanay Onching," as mentioned in the letter, referred to Leoncia, one of the De Leon sisters, on whose behalf Susana kept part of the proceeds of the sale, and not herein respondent as understood by the Court of Appeals, who had no right to such share. It is Leoncia who co-owned the property with Susana and who is therefore entitled to a part of the sale proceeds. Significantly, respondent was not mentioned at all in Susana's letter, but only her son, Rolando. However, even if we construe the term "kasama" as pertaining to Rolando as a tenant of the De Leon sisters, respondent will not necessarily be conferred the same status as tenant upon her son's death. A direct ascendant or parent is not among those listed in Section 9 of Republic Act No. 3844 which specifically enumerates the order of succession to the leasehold rights of a deceased or incapacitated agricultural tenant, to wit: In case of death or permanent incapacity of the agricultural lessee to work his landholding, the leasehold shall continue between the agricultural lessor and the person who can cultivate the landholding personally, chosen by agricultural lessor within one month from such death or permanent incapacity, from among the following: a) the surviving spouse; b) the eldest direct descendant by consanguinity; or (c) the next eldest descendant or descendants in the order of their age. x x x Provided, further that in the event that the agricultural lessor fails to exercise his choice within the period herein provided, the priority shall be in accordance with the order herein established. There is no evidence that the De Leon sisters consented to constitute respondent as their tenant on the subject land. As correctly found by the RARAD/DARAB, even the Extra-Judicial Settlement of Estate that respondent offered in evidence to prove

30

the alleged consent does not contain any statement from which such consent can be inferred.[27] Absent any other evidence to prove that the De Leon sisters consented to the tenurial arrangement, respondent's cultivation of the land was by mere tolerance of her sisters-in-law. The appellate court found that the element of sharing in the produce of the land was established by the affidavits of neighboring farmers attesting to the fact that respondent cultivated the land since time immemorial.[28] However, perusal of the said affidavits reveals that there is nothing therein that would indicate a sharing of produce between the De Leon sisters and respondent. The affidavits did not mention at all that the De Leon sisters received a portion of the harvests or that respondent delivered the same to her sisters-in-law. The affidavits failed to disclose the circumstances or details of the alleged harvest sharing; it merely stated that the affiants have known respondent to be the cultivator of the land since time immemorial. It cannot therefore be deemed as evidence of harvest sharing. The other pieces of evidence submitted by respondent likewise do not prove the alleged tenancy relationship. The summary report of the Philippine Crop Insurance Corporation, the official receipts issued by the National Food Authority and the certificate of membership in Bacoor Agricultural Multi-Purpose Cooperative,[29] only prove that respondent and her family engaged in agricultural activities but not necessarily her alleged status as tenant of the De Leon sisters. Besides, these documents are not even in the name of respondent but were issued in favor of her daughter Dolores. That respondent was allowed to cultivate the property without opposition, does not mean that the De Leon sisters impliedly recognized the existence of a leasehold relation with respondent. Occupancy and continued possession of the land will not ipso facto make one a de jure tenant.[30] The principal factor in determining whether a tenancy relationship exists is intent. Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land but is, moreso, a legal relationship.[31] Thus, the intent of the parties, the understanding when the farmer is installed, and their written agreements, provided these are complied with and are not contrary to law, are more important.[32] Finally, the sale of the subject land to petitioners did not violate Sections 65[33] and 73[34] (c) of R.A. No. 6657. There was no illegal conversion of the land because Sec. 65 applies only to lands which were covered by the CARP, i.e. those lands beyond the fivehectare retention limit allowed to landowners under the law, which were distributed to farmers-beneficiaries. In the instant case, it was not shown that the subject land was covered by the CARP. Neither was it shown that the sale was made to circumvent the application of R.A. 6657 or aimed at dispossessing tenants of the land that they till. The sale of the land to petitioners likewise did not violate R.A. No. 3844 or the Agricultural Tenancy Act. Considering that respondent has failed to establish her status as de jure tenant, she has no right of pre-emption or redemption under Sections 11[35] and 12[36] of the said law. Even assuming that respondent's son Rolando was a tenant of the De Leon sisters, his death extinguished any leasehold on the subject land. Section 8[37] of R.A. 3844 specifically provides for the extinction of an agricultural leasehold relation, in the absence of persons enumerated under Section 9 of the law who are qualified to succeed the deceased tenant. WHEREFORE, the petitions are GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 92316 and the Resolution denying the motions for reconsideration areREVERSED and SET ASIDE. The Decision of the Department of Agrarian Reform Adjudication Board in DARAB Case No. 13502, which affirmed in toto the Decision of the Regional Adjudicator in DARAB Case No. 0402-031-03, dismissing the complaint of respondent Leonida De Leon for lack of merit, is REINSTATED and AFFIRMED. SO ORDERED.

MANUBAY VS. HON. GARILAO RESOLUTION CORONA, J.: At the heart of this controversy is a 124-hectare land in Barrio Cadlan, Pili, Camarines Sur owned by petitioners Annie, Anne Marie, James John, James Francis and Anne Margareth (all surnamed Manubay)[1] and Manubay Agro-Industrial Development Corporation.[2] On November 15, 1994, the Municipal Agrarian Reform Officer (MARO) of Pili issued a notice of coverage placing the property under the comprehensive agrarian reform program (CARP).[3] Petitioners did not protest the notice. On July 1, 1996, petitioners filed an application at the Department of Agrarian Reform (DAR) for conversion of the property from agricultural to residential.[4] On August 26, 1996, the Sangguniang Bayan of Pili passed Resolution No. 145 approving the Comprehensive Zoning Ordinance of 1996 of the Municipality of Pili, Camarines Sur.[5] The ordinance reclassified the subject property from agricultural to highly urbanized intended for mixed residential and commercial use.[6] Thereafter, petitioners requested DAR Regional Director Percival C. Dalugdug to set aside the November 15, 1994 notice of coverage. They pointed out that the land had been reclassified and the property was no longer suitable for agricultural purposes. Director Dalugdug denied their request in a letter dated November 13, 1996[7]: Relative to land conversions, we are guided in our actions by [DAR-Administrative Order (AO)] No. 12, s. 1994 which clearly states that no application for conversions shall be accepted on lands for

31

compulsory acquisition already given notices of coverage. Applications may only be accepted if the notice of coverage has been lifted for one reason or another. xxx xxx xxx Please note that your properties have already been issued notices of coverage by the MARO of Pili last November 15, 1994 which is almost two years prior to your submission of the application for conversion. To reiterate, for us to entertain your application, you must first have these notices lifted whether because of retention or exemption. Since the basis of your claims of exemption (i.e., not yet covered per instruction by the Secretary, and reclassification under the Pili land use plan) are not valid, we are sorry to inform you that we can no longer entertain your application. (emphasis supplied) Respondent Ernesto Garilao, then DAR Secretary, upheld Director Dalugdug and denied petitioners application for conversion, considering that the property had already been placed under the CARP.[8] Aggrieved, petitioners separately asked respondent to reconsider. They insisted that, because the MARO issued a notice of coverage, not a notice of acquisition, their application for conversion should have been approved. The motions were denied.[9] On April 28, 1998, petitioners filed a petition for certiorari in the Court of Appeals (CA) assailing the denial of their application for conversion.[10] They averred that respondent acted with grave abuse of discretion when he denied their application. According to them, the issuance of a mere notice of coverage placing agricultural land under the CARP was not a ground for the denial of such application. In a resolution dated June 1, 1999, the CA dismissed the petition.[11] DAR-AO No. 7, s. 1997[12] provides that the decision of the DAR Secretary may be appealed either to the Office of the President (OP) or to the CA. Considering that the issue raised by petitioners involved the administrative implementation of the CARP, the OP was more competent to rule on the issue. Moreover, by failing to bring the matter to the said office, petitioner did not exhaust all available administrative remedies before resorting to a petition for certiorari. Petitioners moved for reconsideration but it was denied.[13] Hence, this recourse. Petitioners contend that the CA erred in dismissing the petition for certiorari as they did not violate the rule on exhaustion of administrative remedies. The act of a department secretary may be directly challenged in a petition for certiorari. We dismiss the petition. Under the doctrine of qualified political agency, department secretaries are alter egos or assistants of the President and their acts are presumed to be those of the latter unless disapproved or reprobated by him. [14] Thus, as a rule, an aggrieved party affected by the decision of a cabinet secretary need not appeal to the OP and may file a petition for certiorari directly in the Court of Appeals assailing the act of the said secretary.[15] Section 1 of Rule 65 of the Rules of Court provides that, for a petition for certiorari to prosper, petitioner must show (1) the public respondent acted without or in excess of his jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction and (2) there is no appeal or a plain, speedy and adequate remedy in the ordinary course of law. In a petition for certiorari premised on grave abuse of discretion, it must be shown that public respondent patently and grossly abused his discretion and that such abuse amounted to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law or to act at all in contemplation of law. In other words, the public respondent exercised his power arbitrarily and despotically by reason of passion or hostility.[16] Here, inasmuch as respondent had a valid ground to deny petitioners application, he did not commit grave abuse of discretion. Furthermore, DAR-AO No. 7, s. 1997 requires an appeal (of the denial of application of conversion) to the OP. It was the plain, speedy and adequate remedycontemplated by Section 1 of Rule 65. Needless to state, elevating the matter to the OP was consistent with the doctrine of exhaustion of administrative remedies. A party aggrieved by an order of an administrative official should first appeal to the higher administrative authority before seeking judicial relief. Otherwise, as in this case, the complaint will be dismissed for being premature or for having no cause of action.[17] WHEREFORE, the June 1, 1999 and November 4, 1999 resolutions of the Court of Appeals in CA-G.R. SP No. 47244 are hereby AFFIRMED. Costs against petitioners.

ROXAS AND COMPANY VS DAMBA-NSFW AND DAR RESOLUTION

32

CARPIO MORALES, J.: This resolves the Motion for Reconsideration filed on January 13, 2010 by Roxas & Co., Inc. (Roxas & Co.) and the Motion for Partial Reconsideration filed on January 29, 2010 by Damayan ng Manggagawang Bukid sa Asyenda Roxas-National Federation of Sugar Workers (DAMBA-NFSW) and Katipunan ng mga Magbubukid sa Hacienda Roxas, Inc. (KAMAHARI), et al., which both assail the Courts December 4, 2009 Decision in these consolidated cases. After the above-mentioned Motions were filed, Roxas & Co. filed on April 26, 2010 a Motion to Hold in Abeyance the Resolution of its earlier Motion for Reconsideration. Roxas & Co. moves for reconsideration on the following grounds: I. CLOA 6654, INSOFAR AS IT COVERS THE 3 PARCELS OF LAND WITH AN AGGREGATE AREA OF 103.1436 HECTARES, SHOULD BE CANCELLED IN VIEW OF THE FINAL AND EXECUTORY 02 APRIL 1996 COURT OF APPEALS DECISION EXEMPTING THE SAID PROPERTIES FROM THE COVERAGE OF THE COMPREHENSIVE AGRARIAN REFORM LAW (CARL). CLOA 6654, INSOFAR AS IT COVERS THE REMAINING 410 HECTARES, SHOULD BE CANCELLED PURSUANT TO SECTION IV (B) (10) OF DAR MEMORANDUM ORDER NO. 2, SERIES OF 1994. WITH THE CARP-EXEMPTION OF THE 9 PARCELS OF LAND WITH AN AGGREGATE AREA OF 45.9771 HECTARES, ROXAS LIABILITY TO PAY DISTURBANCE COMPENSATION IS LIMITED TO ITS AGRICULTURAL LESSEES AND NOT TO ALL FARMER-BENEFICIARIES FOUND IN THE SUBJECT PROPERTIES PURSUANT TO REPUBLIC ACT NO. 3844, AS AMENDED, AND THE RULING IN BACALING VS. MUYA. THE ADDITIONAL CERTIFICATIONS WERE SUBMITTED TO PROVE THAT THE 51.5472-HECTARE PROPERTIES ARE CARP-EXEMPT, AND COROLLARILY, ADDRESS THE GROUNDS USED BY THEN DAR SECRETARY IN DENYING ROXAS INITIAL EXEMPTION APPLICATION. THE ALLEGED INCONSISTENCIES ARE EITHER IMMATERIAL OR CAN BE READILY EXPLAINED. BASED ON THE EVIDENCE SUBMITTED BY ROXAS, THE 51.5472HECTARE PROPERTIES SUBJECT OF G.R. NO. 179650 ARE CARPEXEMPT. HENCE, THE PREMATURE INSTALLATION BY THE DAR OF SEVERAL FARMER-BENEFICIARIES IN THE PROPERTIES IS ILLEGAL. THE ROXAS LANDHOLDINGS SHOULD BE DECLARED EXEMPT FROM THE COVERAGE OF CARP. A. B. APPLYING DAR V. FRANCO, THE ROXAS LANDHOLDINGS SHOOULD BE DECLARED CARP-EXEMPT IN VIEW OF THE PTA ENACTMENT DELINEATING SPECIFIC TOURISM AREAS. CONSISTENT WITH THE DAR EXEMPTION ORDER CITED IN THE FRANCO CASE AND THE SUBMISSION OF THE OFFICE OF THE SOLICITOR GENERAL, THE ROXAS LANDHOLDINGS, WHICH ARE (A) LOCATED WITHIN THE PTA-IDENTIFIED TOURISM PRIORITY AREAS AND (B) INCLUDED IN THE NASUGBU TOURISM DEVELOPMENT PLAN, SHOULD BE DECLARED CARP-EXEMPT. WITH THE PTA ENACTMENT, THE ROXAS LANDHOLDINGS ARE CARP-EXEMPT FOLLOWING THE COURTS PRONOUNCEMENT THAT THE ONLY TIME [THE NATALIA AND ALLARDE CASES] MAY FIND APPLICATION IS WHEN THE PTA ACTUALLY IDENTIFIES WELL-DEFINED GEOGRAPHIC AREAS WITHIN THE ZONE WITH POTENTIAL TOURISM VALUE. [1]

II.

III.

IV.

V.

VI.

C.

On the other hand, DAMBA-NFSW and KAMAHARI, et al. move for partial reconsideration of the assailed Decision on the following grounds: I. THE [COURT] COMMITTED A REVERSIBLE ERROR IN RULING TO EXEMPT FROM CARP COVERAGE THE SUBJECT NINE (9) LOTS WITH ALLEGED AREA OF 45.9771 HECTARES OF HACIENDA PALICO BASED ON NASUGBU MUNICIPAL ZONING ORDINANCE NO. 4, SERIES OF 1982, NOTWITHSTANDING THE FACT THAT: A. ROXAS [& CO.] MISERABLY FAILED TO SHOW PROOF THAT THE SUBJECT ZONING ORDINANCE UNDER ZONE A. VII THEREOF,

33

SPECIFICALLY DELINEATE THE SAID LOTS TO HAVE BEEN CLASSIFIED TO NON-AGRICULTURAL USE; B.

RE-

ROXAS [& CO.] HAS MERE FALSE CERTIFICATIONS ISSUED BY THE HLURB AND MPDC OF NASUGBU WHICH DO NOT FIND SUPPORT IN THE REFERRED MUNICIPAL ZONING ORDINANCE; ROXAS [& CO.] FAILED TO SUBMIT IN EVIDENCE THE COMPREHENSIVE LAND USE PLAN OF NASUGBU, BATANGAS PROVING SUCH RECLASSIFICATION TO NON-AGRICULTURAL USE OF SUBJECT LOTS PRIOR TO THE ENACTMENT OF R.A. 6657 ON JUNE 15, 1988; AND ROXAS [& CO.] MISERABLY FAILED TO IDENTIFY SUBJECT LOTS BOTH IN AREAS COVERED AND LOCATIONS.

C.

D.

II. GRANTING ARGUENDO THAT THE SUBJECT NASUGBU MUNICIPAL ZONING ORDINANCE NO. 4, SERIES OF 1982 IS A VALID BASIS FOR EXEMPTION FROM CARP COVERAGE OF SUBJECT PARCELS OF LAND, AND FURTHER GRANTING ARGUENDO THAT ROXAS WAS ABLE TO PROVE THAT THE SUBJECT LOTS ARE WITHIN THE PU[R]PORTED URBAN CORE ZONE, STILL THE [COURT] COMMITTED A REVERSIBLE ERROR IN UPHOLDING THE COURT OF APPEALS AND THE DAR SECRETARY[S] ORDER OF CARP EXEMPTION WITHOUT OBSERVING THE RIGHT OF THE FARMER-BENEFICIARIES TO PROCEDURAL DUE PROCESS. Preliminarily, the Court denies Roxas & Co.s Motion to Hold in Abeyance the Resolution of its earlier Motion for Reconsideration for lack of merit. Roxas & Co. asks the Court to hold its judgment on its motion for reconsideration pending the outcome of its application with the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) for the designation of fourteen geographic areas of the Roxas Properties as [tourism enterprise zones], pursuant to the Tourism Act. It bears stressing that Roxas & Co.s pending application with TIEZA is totally immaterial to the resolution of the present petitions which delve mainly on the issue of whether the subject lands are exempt from Comprehensive Agrarian Reform Program (CARP) coverage. While the Court acknowledged the passage of the Tourism Act as another vehicle for potential tourism areas to be exempted from CARP coverage, that did not in any way pronounce as meritorious Roxas & Co.s subsequent application with the TIEZA to declare its properties as tourism enterprise zones. That is for the TIEZA, not this Court, to determine. Whatever decision the TIEZA renders in Roxas & Co.s application does not in any way affect the merits of these consolidated cases. Roxas & Co. cannot have it both ways. It must either zealously argue its legal position if it believes it to be meritorious or altogether abandon it if it has reservations. ItsMotion to Hold in Abeyance the Resolution of its earlier Motion for Reconsideration effectively coaxes the Court to wait for the outcome of its TIEZA application and ultimately delay the final resolution of these consolidated cases. On Roxas & Co.s Motion for Reconsideration, no substantial arguments were raised to warrant a reconsideration of the Decision. The Motion contains merely an amplification of the main arguments and factual matters already submitted to and pronounced without merit by the Court in its Decision. In the Courts considered view, nothing more is left to be discussed, clarified or done in these cases since all the main issues raised have been passed upon and definitely resolved. Roxas & Co. raises the fringe issue that DAR Memorandum Circular No. 7 (Series of 2004) has no force and effect since the said DAR Memorandum Circular was not published and filed with the Office of the National Administrative Register. The contention fails. It should be stressed that there is no need for the publication and filing of the said DAR Memorandum Circular with the ONAR as it is merely an administrative interpretation.[2] Interpretative rule x x x x is promulgated by the administrative agency to interpret, clarify or explain statutory regulations under which the administrative body operates. The purpose or objective of an interpretative rule is merely to construe the statute being administered. It purports to do no more than interpret the statute. Simply, the rules tries to say what the statute means. Generally, it refers to no single person or party in particular but concerns all those belonging to the same class which may be covered by the said interpretative rule. It need not be published and neither is a hearing required since it is issued by the administrative body as an incident of its power to enforce the law and is intended merely to clarify statutory provisions for proper observance by the people. x x x x.[3] (Emphasis and underscoring supplied) Roxas & Co. goes on to contend that its liability to pay disturbance compensation is limited to its agricultural lessees only and not to farmer-beneficiaries, citing Republic Act No. 3844 (RA 3844), as amended, and Bacaling v. Muya.[4] Roxas & Co. is merely nitpicking on the issue. Since the DAR had initially issued CLOAs to the farmer-beneficiaries of the nine parcels of land in Hacienda Palico, the assailed Decision merely reiterated the original designation of the affected individuals as farmer-beneficiaries who should be entitled to disturbance compensation before the cancellation of their respective CLOAs is

34

effected. This is in pursuance of the directive of DAR Administrative Order No. 6 (Series of 1994) which mandates the payment of disturbance compensation before Roxas & Co.s application for exemption may be completely granted. As for the Motion for Partial Reconsideration of DAMBA-NFSW and KAMAHARI, et al., the same likewise fails as it only rehashes earlier arguments which have been adequately passed upon by the Court. Notably, the main arguments raised by the Motion are evidentiary in nature that have been resolved by the DAR Secretary, whose decision on factual controversies deserve utmost respect, if not finality. Finally, the Court reiterates the explanation of the DAR Secretary why CLOA holders need not be informed of the pending application for exemption, to wit: As regards the first ground raised by [DAMBA-NSFW], it should be remembered that an application for CARP-exemption pursuant to DOJ Opinion No. 44, series of 1990, as implemented by DAR Administrative Order No. 6, series of 1994, is non-adversarial or nonlitigious in nature. Hence, applicant is correct in saying that nowhere in the rules is it required that occupants of a landholding should be notified of an initiated or pending exemption application. xxxx With regard [to] the allegation that oppositors-movants are already CLOA holders of subject propert[ies] and deserve to be notified, as owners, of the initiated questioned exemption application, is of no moment. The Supreme Court in the case of Roxas [&] Co., Inc. v. Court of Appeals, 321 SCRA 106, held: We stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the power to nullify the CLOAs already issued to the farmer beneficiaries. x x x x. Anyhow, the farmer[-]beneficiaries hold the property in trust for the rightful owner of the land. Since subject landholding has been validly determined to be CARP-exempt, therefore, the previous issuance of the CLOA of oppositors-movants is erroneous. Hence, similar to the situation of the above-quoted Supreme Court Decision, oppositors-movants only hold the property in trust for the rightful owners of the land and are not the owners of subject landholding who should be notified of the exemption application of applicant Roxas & Company, Incorporated. Finally, this Office finds no substantial basis to reverse the assailed Orders since there is substantial compliance by the applicant with the requirements for the issuance of exemption clearance under DAR AO 6 (1994).[5] WHEREFORE, the Motion for Reconsideration filed by Roxas & Co., Inc. and the Motion for Partial Reconsideration filed by DAMBA-NFSW and KAMAHARI areDENIED for lack of merit. No further pleadings shall be entertained. Let entry of judgment be made in due course. SO ORDERED.

35