Republic
of the
Supreme Court
THIRD DIVISION
PAG-ASA FISHPOND G.R. No. 164912
CORPORATION ,
Petitioner,
Present:
- versus
- YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
BERNARDO
JIMENEZ, CHICO-NAZARIO,
ROBERT
BELENBOUGH, REYES, and
LEONARD
MIJARES, BRION,*
JJ.
EDUARDO
JIMENEZ,
JOSE
CRUZ, ELIZALDE
EDQUIBAL,
DOMINADOR
ELGINCOLIN and Promulgated:
GERONIMO DARILAG,
Respondents.
June 18, 2008
x - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - x
D E C I S I O N
REYES, R.T., J.:
FOCUS of this petition is the long-term effect of hiring by
a civil law lessee of fishpond farmworkers with right
to share in the fish harvests.
May karapatan bang manatili
ang mga nasabing
manggagawa kahit tapos na
ang kontrata ng kumuha sa
kanila sa may-ari ng palaisdaan?
Wala. Ito ang sagot namin
sa katanungan sa kasong ito.
For Our
review on certiorari is the Decision[1] of
the Court of Appeals (CA) affirming that[2] of
the Department of Agrarian Reform Adjudication Board (DARAB) in an action for
maintenance of peaceful possession of a forty-hectare portion of a fishpond
situated in Masinloc, Zambales.
The Facts
Petitioner
CONTRACT
OF LEASE
KNOW
This Contract of Lease made and entered into this 27th day of April, 1989 by and between:
- A N D -
DAVID JIMENEZ, of legal age, married to Pascuala Ramos Jimenez, Filipino and residing at 1173 Paco, Obando, Bulacan and Noel Hilario, of legal age, married to Teresita Santiago Hilario, Filipino and residence of Lawa, Obando, Bulacan, herein known as the LESSEES.
W I T N E S S E T H
WHEREAS, the Lessor is the registered and absolute owner of a Real Property, more particularly described as follows, to wit:
CERTIFICATE TITLE NO. T-1747
REGISTER OF DEEDS
A PARCEL OF
WHEREAS, the Lessor has granted and the Lessees have accepted a lease of the above-described property under the terms and conditions hereinafter provided;
1. The terms of this lease shall be five (5)
years effective
2. The Lessees have agreed to lease five (5) lots of fishponds, one nursery pond, all the 331 saltbeds and the “Paalatan” located within the described property under Certificate Titles No. T-1747;
3. The lease does not include the bodega located within the leased premises which is to be used exclusively by the Lessor unless with written approval of the Lessor, the Lessee may share in the use of the bodega;
4. The Leessees shall
make a deposit of P100,000.00) Philippine Currency upon signing
of this Contract of Lease. Said deposit
is without interest and shall answer for any unpaid rental of the Lessees at
the termination of this lease, penalties or any liabilities which may incur
during the effectivity of this Contract.
The Lessees cannot apply the aforesaid deposit as rental payment before
the cancellation, termination or expiration of this agreement;
5. The Lessees shall pay to the Lessor immediately upon signing of this Contract the amount
of THREE HUNDRED FIFTY THOUSAND PESOS (P350,000.00),
Philippine Currency as rental for the year
6. The Lessees shall pay to the Lessor the yearly advance rental in Philippine Currency at the office of the Lessor which shall be due and payable on or before the 1st of March of every year for five (5) years without the necessity of express demand, therefore it being understood that in case of default of said Lessees in the payment of the said rental if and when the same becomes due and payable, the amount of rental owing shall bear interest at the rate of twenty-four percent (24%) per annum, to be computed daily from the date of such default until fully paid, payment of such interest to be considered as a penalty by reason of such default, without prejudice to the right of the owner to terminate this Contract and eject the Lessees, as hereinafter set forth;
That the Schedule of Payment of the annual lease cash payment of rentals are as follows:
a)
P350,000.00
rental for
b) P400,000.00
rental for
c) P440,000.00
rental of
d) P484,000.00
rental of
e) P532,400.00
rental of
The Lessees shall in addition to the cash rental referred to the above, pay to the Lessor Seven Thousand (7,000) cavans of salt measured at four (4) tin cans, size of four gallons of 16 liters per can, per cavan yearly, starting the year 1990 up to and including the year 1994. The Lessees shall deliver the aforesaid salt to the Lessor from the time the Lessees commences to harvest salt, provided that the 7,000 cavans should already be delivered to the Lessor by the end of the harvest season in May of a particular year. In the event that the Lessees cannot or fail to deliver the 7,000 cavans of salt in full or in part, the Lessees are obliged to pay whatever difference in cash at the prevailing market value at the end of harvest in May of a particular year;
7. That the personal character and integrity of the Lessees and the nature of the occupancy of the leased property as above restricted are special considerations and inducements for granting this lease by the Lessor; consequently, the Lessees shall not sub-let the property, nor allow any person, firm or corporation to occupy the same in whole or in part, nor shall the Lessees assign in whole or in part any of their right under this Contract and no right or interest thereto or therein shall be conferred on or vested in anyone by the Lessees, either by operation of law or otherwise;
8. Failure on the part of the Lessees to pay
within its stipulated due period or failure to observe any of the conditions of
this Agreement, shall entitle the Lessor to terminate
this Agreement immediately and to forefeit the
deposit of One Hundred Thousand Pesos (P100,000.00) and demand that the
Lessees vacate the leased property;
9. In the event that the Lessees shall elect to
terminate this Agreement before its expiration, the One Hundred Thousand Pesos
(P100,000.00) deposit will be forfeited in
favor of the Lessorr;
10. The Lessees shall at their own expense, improve and develop the aforesaid fishponds and to keep up and maintain in good repair and condition all fences, dikes, saltbeds and other improvements existing thereon by (a) raising and keeping the elevation of the “pilapil” inside the fishpond to 1 1/2 meters high and 2 meters height to the “pilapil” constituting the boundary of the fishponds and those fronting the river and a width of 2 meters for all the “pilapil”; (b) to repair all the 331 saltbeds with “tisa” and wooden division saltbeds; (c) to clean and clear the whole area of the leased premises by removing all the bushes, weeds and cogons, provided, moreover, that the Lessees are obliged to maintain throughout the effectivity of this Lease, the said elevation and cleanliness of the leased premises. The Lessees shall make improvements not less than 25% every year and thereafter for the duration of this contract. That all the improvements and development made by the Lessees shall after the expiration of this Lease belong to the Lessor.
In the event that the Lessees shall fail
and/or refuse to make the aforesaid improvements and/or clean the leased
premises as herein provided, the Lessor shall have
the right to cancel and terminate this Agreement without prejudice to the right
of the Lessor or itself make the required
improvements, and cleaning and utilizing for said purpose, the deposit of P100,000.00
in which event, the Lessor is obliged to notify the
Lessees of said use, and the amount so used within
fifteen (15) days from said notice, the Lessees shall be obliged to replenish
the said amount of deposit of P100,000.00. Failure of the Lessees to replenish the said
amount shall entitle the Lessor to cancel or
terminate this Agreement;
11. Except as heretofore stipulated on, the Lessees are prohibited from using the property or portion thereof for any other purpose except as fishpond or saltbeds and from subleasing the property herein lease, or any other portion thereof, or from assigning their rights under this Contract of Lease, or mortgaging or otherwise encumbering the same, without the express written consent of the Lessor;
12. That the Contract of Lease between the Lessor and the Lessees is entirely a civil lease of a fishpond and not in any manner to be construed or misunderstood to be agrarian in nature and extent. Labor disputes and wages regarding hired workers or laborers of the Lessees in the operation and maintenance of the Lease, shall not be the responsibility of the Lessor, including any claim pertaining to labor problems but the Lessees will be held solely liable for the settlement and/or payment of the wages and claims;
13. The Lessor shall be solely liable for the payment of only the realty taxes on the leased premises while the Lessees shall answer and be liable for the payment of the fees for business licenses and permits and other business taxes be due to the government from the operation of fishponds and saltbeds;
14. The Lessor, through its authorized representative, is entitled to make an inspection of the leased premises at any time during the day time;
15. In the event, the Lessees cancel or terminate
this Contract of Lease on their own volition prior to
16. Upon the termination, expiration or cancellation of this Contract of Lease, the Lessor shall automatically take possession of the leased premises and the Lessees shall, without need of any demand and without any need of court action, vacate the premises and surrender possession thereof to the Lessor, including the improvements shall appertaining complete ownership to the Lessor, upon the introduction of the said improvements;
17. In the event that the Lessees violated and/or
fail to refuse to abide by and comply with the terms and conditions of this
Agreement or failure to pay within
its stipulated due period, the deposit of the Lessees in the amount of P100,000.00
shall be forfeited in favor of the Lessor and the
latter shall have the right to cancel and terminate this Contract immediately
and to secure from the Court a writ of execution or other order for the
enforcement of the terms hereof against the Lessees, all expenses including
sheriff’s fees, incurred by the Lessor for securing
said writ or/and for enforcing the same as well as liquidated damages shall be
borne solely by the Lessees;
18. That in the event the Lessees fail to vacate or leave the leased premises voluntarily after the termination of the leased contract, notwithstanding demands made on them by the Lessor, and insist and ignore the demands, the Lessees shall pay the Lessor jointly and severally unrealized income and profit in point of unpaid rentals for overstaying in the leased premises without any legal right or interest whatsoever, in the amount of the reasonable use and benefit of the leased premises to be computed by the Lessor, based on double the rentals of the last year of Contract of Lease plus legal interest, until the Lessees vacate the leased premises;
19. That if the said property is not surrendered to the Lessor in the manner provided for in this Contract, the Lessees shall be responsible to the Lessor for all damages which the Lessor may suffer by reason thereof and shall indemnify the Lessor against any and all claims made by the succeeding tenants against the Lessor, resulting from delay by the Lessor in delivering possession of the property;
20. In case of the default of the Lessees in their obligations under this Contract of Lease, the Lessees agrees to pay the sum equivalent of 25% of the amount due from them as liquidated damages as attorney’s fee aside from court costs, should the Lessor be constrained to resort to court from the enforcement of its rights under the Contract;
21. In case the Philippine Pesos is officially devalued, all payments to be made by the Lessees to the Lessor after such devaluation shall be made in amounts properly readjusted and proportionately increased in accordance with or on the basis of the official value of the peso at the time of the execution of this lease contract;
22. The Lessees hereby agree that any question which may arise between the Lessor and the Lessees by reason of this document and which has to be submitted for decision to the court of justice, may at the option of the Lessor be brought before the court of competent jurisdiction in the City of Manila, waiving for this purpose other proper venue;
23. The Lessees shall jointly and severally be liable for any liability or liabilities pertaining to the Lessor concerning the relationship and its stipulations entered into in this Contract of Lease;
24. This Contract of Lease cancelled and
superseded, the Contract of Lease signed by the Lessor
and Mr. David Jimenez on
25. The parties herein hereby attest and confirm that the terms and conditions of the Contract of Lease and the effect thereof have been explained to them to their satisfaction and that they fully understand the same.
IN WITNESS WHEREOF, the parties have hereunto affixed their signatures this 28th day of April, 1989 at the City of Manila, Philippines.
Lessor NOEL HILARIO – Lessee
By:
Sgd. Sgd.
MR. SEGUNDO SEANGIO-President DAVID JIMENEZ-Lessee
W
I T N E S S
E S S
Sgd. Sgd.
A C K N O W L E D G M E N T
REPUBLIC
OF THE
BEFORE ME, a Notary Public for and in the City of Manila, Philippines, personally appeared the following persons with their respective Residence Certificates, to wit:
SEGUNDO SEANGIO A-4328120
DAVID JIMENEZ A-03704324 Bulacan, Obando
NOEL HILARIO A-11107684 Lawa, Obando, Bulacan
known to me and to me known to be the same persons who executed the aforegoing instrument and have acknowledged before me that the same is their free and voluntary act and deed.
This document consists of eight (8) pages, signed by the parties and their instrumental witnesses on every page refers to a Contract of Lease that Real Property situated at Sto. Rosario, Masinloc, Zambales.
WITNESS MY
ROBERTO M. MENDOZA
Notary Public
Until
TAN
4784-113-M
Doc. No. 422
Page No. 86
Book
No. XIX
Series
of 1989.[3]
It
is an important sense of the agreement that the fishpond will be managed by the
two lessees jointly. Jimenez was charged with the management of a 40-hectare
portion of the fishpond, situated at Sitio Simelyahan, Barangay Sto.
In
the meantime, the Philippine Congress enacted Republic Act (R.A.) No. 6657, the
Comprehensive Agrarian Reform Law (CARL).[4] The social legislation was founded on the
right of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till or, in the case
of other farm workers, to receive a just share of the fruits thereof. It aimed to undertake the just distribution of
all agricultural lands, having taken into account ecological, developmental,
and equity considerations, and subject to the payment of just compensation.[5]
On
On
Sometime
in 1990, Jimenez hired respondents, namely: Bernardo Jimenez, Robert
Belenbough, Leonard Mijares, Eduardo Jimenez, Jose Cruz, Elizalde Edquibal,
Dominador Elgincolin and Geronimo Darilag, to work as farmworkers in the
fishpond.[8] As farmworkers, respondents each received a
monthly allowance of P1,500.00 from David Jimenez, as well as 50% of the
fishpond’s net proceeds from the total fish harvests, which they divided
equally among themselves.[9]
In
April 1994, they were required by David Jimenez to vacate the fishpond on or
before
Respondents
were not agreeable to the demand to vacate.
Accordingly, on
They prayed that the entire fishpond
of petitioner be placed under the coverage of the CARP; that they be considered
as farmer beneficiaries who are entitled to be awarded the fishpond; and that
they be allowed to remain in possession of the fishpond.[12]
In
its Answer, petitioner averred that its lessees over the fishpond were only
David Jimenez and one Noel Hilario and that its lease
agreement with said lessees was not agrarian but civil in nature. It also posited that the fishpond, being a
commercial one, is not yet subject to compulsory acquisition under the CARP
pursuant to Section 11 of R.A. No. 6657.[13] Petitioner alleged that respondents’ entry
into and occupation of the fishpond, as well as their enjoyment of the fish
produced, was without its knowledge and consent.[14]
On
WHEREFORE,
this Forum is constrained to rule out plaintiffs’ allegation as a regular
farmworker pursuant to R.A. 6657 and/or tenants of herein defendant and to deny
prayer for placing the landholding of the defendant under CARP coverage which
is purely administrative and only cognizable by the Department of Agrarian
Reform, as there are no concrete evidence.
Thus, a judgment is hereby rendered DISMISSING plaintiffs’ complaint for
lack of merit.
SO DECIDED.[15]
The PARAD ruled that respondents are not agricultural
leasehold tenants who may be entitled to security of tenure. According to the PARAD, petitioner, as
landowner, did not consent to the hiring of respondents, as farmworkers,
by its civil law lessee, David Jimenez.
The PARAD declared:
The
original lessees in the Contract of Lease (Annex “A”) with the lessor-defendant
are David Jimenez and Noel Hilario, who are both residents of Obando, Bulacan. The said contract expired on
Consequently, because of the
violation of the contract, the plaintiffs are not even recognized by the
defendant. Plaintiffs’ allegation to be
(sic) tenant necessarily failed and
has no leg to stand. (sic). Plainly, consent of a landowner which is an
essential element of tenancy is not attendant.[16]
On appeal to
the DARAB, the PARAD’s decision was reversed and set
aside. The dispositive part of the DARAB
decision reads:
WHEREFORE,
premises considered and finding reversible errors, (sic) committed by the Adjudicator a quo, the assailed decision is
hereby REVERSED and a new judgment is rendered directing the
SO ORDERED.[17]
The DARAB ruled that respondents are agricultural
leasehold tenants of the subject property who deserve the protective mantle of
the law despite the fact that only the civil law lessee installed them as
such. It ratiocinated:
x x x plaintiffs-appellants are, by operation of law, tenant-farmers of the subject landholding, notwithstanding that it was a civil law lessee, who installed them therein. When all the elements the (sic) tenancy relation are present, then the protective mantle of the security of tenure as guaranteed by the 1987 Charter shall be available to them. x x x
x x x x
Verily, Sections 6 and 7 of Republic Act (RA) No. 3844 explicit (sic) provides, thus:
“Section 6. Parties to Agricultural Leasehold Relation. – The agricultural leasehold relation shall be limited to the person who furnished the landholding, either as owner, civil law lessee, usufructuary, or legal possessor and the person who personally cultivates the same.”
and
Section 7. Tenure of Agricultural Leasehold Relation. – The Agricultural leasehold relation once established shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished, the agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized by the Court for causes herein provided.”[18]
When petitioner’s motion for
reconsideration was denied[19]
by the DARAB on
Petitioner insisted that respondents
were not tenants on the property. It argued anew that it was not a party to any
tenancy relationship with anyone vis-à-vis
the subject property; and that it had not received any share in the fishpond’s harvests
from respondents.
CA Disposition
In a Decision dated
Once a tenancy relationship is established, therefore, the tenant is entitled to security of tenure and cannot be ejected unless upon judicial authority for causes provided by law. The reliance of the petitioner on Sanchez v. Court of Appeals, supra, is, consequently misplaced, since that doctrine was applicable only to the hired laborers of a civil law lessee, not to bona fide share or leasehold tenants like the respondents.
WHEREFORE, the appealed decision is AFFIRMED.
SO
ORDERED.[20]
The CA opined that although petitioner
was not privy to a tenancy relationship with respondents, its civil law lessee,
David Jimenez, made respondents the agricultural leasehold tenants in the
property. The CA concluded that David
Jimenez, being the legal possessor of the fishpond as defined under Section 42
of R.A. No. 1199, has the authority to hire agricultural leasehold tenants and
to bring about agricultural leasehold relations. This relation, according to the appellate
court, is binding upon the landowner, petitioner, which effectively became
obliged to respect the rights of the tenants.
Among said rights is the right to security of tenure.
The CA pointed out:
Finally,
although the petitioner is correct in positing that the lease was one under the
civil law, rather than an agricultural lease, the expiration of the lease did
not negate the right of the respondents to security of tenure as the bona fide
tenants.
According
to Sec. 8, Republic Act No. 3844, otherwise known as The Agricultural Land
Reform Code, a leasehold relation, once established, can be terminated on the
following grounds, to wit:
1. Abandonment of the landholding without the knowledge of the agricultural lessor;
2. Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served 3 months in advance; or
3. Absence of an
heir to succeed the lessee in the event of his/her death of permanent
incapacity.
Aggrieved, petitioners moved for reconsideration.
The motion was, however, denied by the appellate court via Resolution[21] dated
Issues
Petitioner now contends that:
I
THE COURT OF APPEALS GRAVELY ERRED IN NOT
APPLYING THE HONORABLE COURT’S RULING IN THE RECENT CASE OF
II
THE COURT OF APPEALS GRAVELY ERRED IN
CONCLUDING THAT RESPONDENTS
THE COURT OF
APPEALS GRAVELY ERRED IN NOT APPLYING THE RULING OF THE HONORABLE COURT IN THE
CASE OF SANCHEZ VS. COURT OF APPEALS,
129 SCRA 717 TO THE INSTANT CASE.[22]
Our Ruling
Before We
begin to consider the issues hoisted by petitioner, the Court takes cognizance
of a pivotal question of jurisdiction. We resolve this issue motu proprio, even if it was not raised by
the parties nor threshed out in their pleadings.[23]
The
jurisdiction of the PARAD, DARAB and the CA on appeal, is limited to agrarian
disputes or controversies and other matters or incidents involving the
implementation of the CARP under R.A. No. 6657, R.A. No. 3844 and other
agrarian laws.[24] An agrarian dispute is defined as any
controversy relating to tenurial arrangements, whether leasehold, tenancy,
stewardship or otherwise, over lands devoted to agriculture, including disputes
concerning farm workers associations or representation of persons in
negotiating, fixing, maintaining, changing or seeking to arrange terms or
conditions of such tenurial arrangements.[25]
As early as
Sec. 2. Section 10 of Republic Act No. 6657 is hereby amended to read as follows:
“Sec. 10. Exemptions and Exclusions. –
a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act.
b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued to agrarian reform beneficiaries under the Comprehensive Agrarian Reform Program.
In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian Reform Law, by voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a simple and absolute majority of the actual regular workers or tenants must consent to the exemption within one (1) year from the effectivity of this Act. When the workers or tenants do not agree to this exemption, the fishponds or prawn farms shall be distributed collectively to the worker-beneficiaries or tenants who shall form a cooperative or association to manage the same.
In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform Law, the consent of the farm workers shall no longer be necessary, however, the provision of Section 32-A hereof on incentives shall apply.
c) Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, seeds and seedling research and pilot production center, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent (18%) slope and over, except those already developed, shall be exempt from the coverage of this Act.”
Admittedly,
there is no express repeal of R.A. No. 3844 as a whole. Its provisions that are not inconsistent with
R.A. No. 6657 may still be given suppletory effect. Nonetheless, there is now irreconcilable
inconsistency or repugnancy between the two laws as regards the treatment of
fishponds and prawn farms. Such
repugnancy leads to the conclusion that the provisions of R.A. No. 6657
supersede the provisions of R.A. No. 3844 insofar as fishponds and prawn farms
are concerned. In any event, Section 76
of R.A. No. 6657, as amended, provides that all other laws, decrees, issuances,
or parts thereof inconsistent thereto are repealed or amended accordingly.[27]
Verily, the DARAB finding of
agricultural leasehold tenancy relations between petitioner’s civil law lessee
David Jimenez and respondents have no basis in law. The rule is well-entrenched in this
jurisdiction that for tenancy relations to exist, the following requisites must
concur: (a) the parties are the landholder and the tenant; (b) the subject is
agricultural land; (c) there is consent; (d) the purpose is agricultural
production; and (e) there is consideration.[28]
The absence of one element makes an
occupant of a parcel of land, or a cultivator thereof, or a planter thereon
outside the scope of the CARL. Nor can
such occupant, cultivator or planter be classified as a de jure agricultural tenant for purposes
of agrarian reform law. And unless a person has established his status as a de jure
tenant, he is not entitled to security of tenure nor is he covered by the Land
Reform Program of the Government under existing agrarian reform laws.[29]
In the case under review, the subject
fishpond is not an agricultural land subject to compulsory CARP coverage. Neither was there a sharing of the harvests
between petitioner and respondents. That
respondents shared the harvests of the fishpond only with the civil law lessee
David Jimenez is uncontroverted. Evidently,
there is no agrarian tenancy relationship between petitioner and respondents.
This
is not a case of first impression. The
Court has had occasion to affirm the exemption of fishponds from the coverage
of the CARP in Atlas Fertilizer Corp. v.
Secretary, Department of Agrarian Reform[30] and
in Romero v. Tan.[31] In Romero,
the Court scored the PARAD for taking cognizance of a complaint for maintenance
of peaceful possession over a fishpond filed by a tenant-lessee. The Court held then:
On the jurisdictional issue, we find that it was reversible error for the PARAB to have taken cognizance of petitioners’ complaint. The jurisdiction of the PARAB in this case is limited to agrarian disputes or controversies and other matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program (CARP) under Rep. Act No. 6657, Rep. Act No. 3844 and other agrarian laws. An agrarian dispute is defined as any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farm workers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements.
Although Section 166(1) of Rep. Act No. 3844 had included fishponds in its definition of agricultural land within its coverage, this definition must be considered modified in the light of Sec. 2 of Rep. Act No. 7881, which amended Section 10 of Rep. Act No. 6657; otherwise known as the Comprehensive Agrarian Reform Law (CARL). Expressly, the amendment has excluded private lands actually, directly and exclusively used for prawn farms and fishponds from the coverage of the CARL. In fact, under Section 3(c) of R.A. No. 6657, as amended, defines an agricultural land as that which is devoted to agricultural activity and not otherwise classified as mineral, forest, residential, commercial or industrial land. In turn, Section 3(b) thereof defines agricultural activity as the cultivation of the soil, planting of crops, growing of fruit trees, including the harvesting of such farm products, and other farm activities, and practices performed by a farmer in conjunction with such farming operations done by persons whether natural or juridical. Clearly, by virtue of the amendments to the CARL, the operation of a fishpond is no longer considered an agricultural activity, and a parcel of land devoted to fishpond operation is not agricultural land as therein defined.[32]
It
may well be argued that respondents have acquired a vested right to security of
tenure arising from the alleged existing tenancy relations. The complaint before the PARAD was filed on
Even assuming, ex gratia argumenti,
that the PARAD, DARAB and the CA had jurisdiction, the complaint for
maintenance of peaceful possession lodged by respondents still fails for triple
reasons.
First. Intent is material in tenancy relations.
The DARAB and the CA anchored its
finding of tenancy relations on the legal possession of David Jimenez, the
civil law lessee, over the subject property. According to them, as the legal possessor,
Jimenez’s installation of respondents as tenants binds petitioner.
The rule is well-entrenched in this
jurisdiction that tenancy is not a purely factual relationship,
it is also a legal relationship.[34] The intent of the parties, the understanding
when the tenant is installed, their written agreements, provided they are not
contrary to law, are crucial.
In Valencia v. Court of Appeals,[35]
the Court voided the CA finding of tenancy relations between the landowner and
the tenants of the civil law lessee for lack of intent. The Court held in
The substantive issue to be resolved may be expressed in this manner: Can a contract of civil law lease prohibit a civil law lessee from employing a tenant on the land subject matter of the lease agreement? Otherwise stated, can petitioner’s civil law lessee, Fr. Flores, install tenants on the subject premises without express authority to do so under Art. 1649 of the Civil Code, more so when the lessee is expressly prohibited from doing so, as in the instant case?
Contrary to the impression of private respondents, Sec. 6 of R.A. No. 3844, as amended, does not automatically authorize a civil law lessee to employ a tenant without the consent of the landowner. The lessee must be so specifically authorized. For the right to hire a tenant is basically a personal right of a landowner, except as may be provided by law. But certainly nowhere in Sec. 6 does it say that a civil law lessee of a landholding is automatically authorized to install a tenant thereon. A different interpretation would create a perverse and absurd situation where a person who wants to be a tenant, and taking advantage of this perceived ambiguity in the law, asks a third person to become a civil law lessee of the landowner. Incredibly, this tenant would technically have a better right over the property than the landowner himself. This tenant would then gain security of tenure, and eventually become owner of the land by operation of law. This is most unfair to the hapless and unsuspecting landowner who entered into a civil law lease agreement in good faith only to realize later on that he can no longer regain possession of his property due to the installation of a tenant by the civil law lessee.
On the other hand, under the express
provision of Art. 1649 of the Civil Code, the lessee cannot assign the lease
without the consent of the lessor, unless there is a stipulation to the
contrary. In the case before us, not
only is there no stipulation to the contrary; the lessee is expressly
prohibited from subleasing or encumbering the land, which includes installing a
leasehold tenant thereon since the right to do so is an attribute of
ownership. Plainly stated therefore, a
contract of civil law lease can prohibit a civil law lessee from employing a
tenant on the land subject matter of the lease agreement. x x x[36]
Here, petitioner never intended to
install respondents as tenants. As in
The Court notes that in Joya v. Pareja[39]
and again in Ponce v. Guevarra,[40]
agricultural leasehold tenancy relations were affirmed despite a similar
prohibition in the lease agreement. However, in the said cases, the landowners
were deemed to have consented to, and ratified the, installation of the
tenants. The landowners there extended
the terms of the lease and negotiated for better terms with the tenants
themselves. They were thus held in estoppel and the tenants considered de jure occupants.
In the case under review, the record
is bereft of any indication that petitioner dealt with respondents in the same
manner. As adverted to
earlier, petitioners were consistent that they contracted only with their civil
law lessees. They were not privy
to the transactions entered into by its lessee with respondents.
Second. A stream cannot rise higher than its
source. The civil law lessee, David
Jimenez, was not authorized to enter into a tenancy relationship with
respondents.
The DARAB and the CA ruled that
Section 6 of R.A. No. 3844 authorizes a legal possessor, such as David Jimenez,
to employ a tenant even without the consent of the landowner.
Again, they are mistaken. The Court, in
When Sec. 6 provides that the agricultural leasehold relations shall be limited to the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same, it assumes that there is already an existing agricultural leasehold relation, i.e., a tenant or agricultural lessee already works the land. The epigraph of Sec. 6 merely states who are “Parties to Agricultural Leasehold Relations,” which assumes that there is already a leasehold tenant on the land; not until then. This is precisely what we are still asked to determine in the instant proceedings.
To better understand Sec.6, let us refer to its precursor, Sec. 8 of R.A. No. 1199, as amended. Again, Sec. 8 of R.A. No. 1199 assumes the existence of a tenancy relation. As its epigraph suggests, it is a “Limitation of Relation,” and the purpose is merely to limit the tenancy “to the person who furnishes the land, either as owner, lessee, usufructuary, or legal possessor, and to the person who actually works the land himself with the aid of labor available from within his immediate farm household.” Once the tenancy relation is established, the parties to that relation are limited to the persons therein stated. Obviously, inherent in the right of landholders to install a tenant is their authority to do so; otherwise, without such authority, civil law lessees as landholders cannot install a tenant on the landholding. Neither Sec. 6 of R.A. No. 3844 nor Sec. 8 of R.A. No. 1199 automatically authorizes the persons named therein to employ a tenant on the landholding.
According to Mr. Justice Guillermo
S. Santos and
Another noted authority on land return, Dean Jeremias U. Montemayor, explains the rationale for Sec. 8 of R.A. No. 1199, the precursor of Sec. 6 of R.A. No. 3844:
Since the law establishes a special
relationship in tenancy with important consequences, it properly pinpoints the
persons to whom said relationship shall apply. The spirit of the law is to prevent both
landholder absenteeism and tenant absenteeism.
Thus, it would seem that the discretionary powers and important duties
of the landholder, like the choice of crop or seed, cannot be left to the will
or capacity of an agent or overseer, just as the cultivation of the land cannot
be entrusted by the tenant to some other people. Tenancy
relationship has been held to be of a personal character.
Section 6 as already stated simply enumerates who are the parties to an existing contract of agricultural tenancy, which presupposes that a tenancy already exists. It does not state that those who furnish the landholding, i.e., either as owner, civil law lessee, usufructuary, or legal possessor, are automatically authorized to employ a tenant on the landholding. The reason is obvious. The civil lease agreement may be restrictive. Even the owner himself may not be free to install a tenant, as when his ownership or possession is encumbered or is subject to a lien or condition that he should not employ a tenant thereon. This contemplates a situation where the property may be intended for some other specific purpose allowed by law, such as, its conversion into an industrial estate or a residential subdivision.
x x x x
From the foregoing discussion, it is
reasonable to conclude that a civil law lessee cannot automatically institute tenants on the property under Sec. 6
of R.A. No. 3844. The correct view that
must necessarily be adopted is that the civil law lessee, although a legal
possessor, may not install tenants on the property unless expressly authorized
by the lessor.
And if a prohibition exists or is stipulated in the contract of lease
the occupants of the property are merely civil law sublessees
whose rights terminate upon the expiration of the civil law lease agreement.[41]
Evidently,
securing the consent of the landowner is a condition sine qua non for the installation of tenants. Here, petitioner’s consent was not obtained
prior to the engagement of respondents by the civil law lessee, David Jimenez.
Worse, the lease agreement expressly prohibited the assignment of the lease to
third persons. Verily, respondents can
acquire no better right than their predecessor-in-interest, David Jimenez.
Third. The compulsory acquisition of
petitioner’s landholding pursuant to the agrarian reform program was held in
abeyance pending evaluation by its application for exemption.
The records unveil that on
In
sum, respondents’ claim of security of tenure founded on their installation as
tenants of petitioner’s civil law lessee is without basis in law. Procedurally, fishponds and prawn farms were
expressly exempted from the coverage of the agrarian reform program. Substantially, the civil law lessee was not
authorized to enter into leasehold-tenancy relations.
WHEREFORE, the
appealed Decision is REVERSED
SO ORDERED.
RUBEN T. REYES
Associate Justice
WE CONCUR:
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ MINITA V.
CHICO-NAZARIO
Associate Justice
Associate Justice
ARTURO D. BRION
Associate Justice
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
* Vice Associate Justice
Antonio Eduardo B. Nachura. Justice Nachura is
on official leave per Special Order No. 507 dated
[1] Rollo,
pp. 35-44. Dated
[2] Records, pp. 241-248. Dated
[3]
[4] Approved
[5] Republic Act No. 6657, Sec. 2.
[6] Rollo, p. 144.
[7]
[8]
[9]
[10]
[11] Records, pp. 1-7.
[12]
[13]
[14] Rollo, p. 36.
[15] Records, p. 117.
[16]
[17]
[18]
[19]
[20] Rollo, pp. 43-44.
[21]
[22]
[23] Katon v. Palanca, Jr., G.R. No. 151149,
[24]
Rules of Procedure Governing Proceedings Before the
[25] Republic Act No. 6657, Sec. 3(d), as amended.
[26] Entitled “An Act Amending Certain Provisions of
Republic Act No. 6657,” entitled “An Act Instituting A
Comprehensive Agrarian Reform Program To Promote Social Justice and
Industrialization, Providing the Mechanism for Its Implementation, and for
Other Purposes.”
[27] Romero v. Tan, G.R. No.
147570,
[28] Mon v. Court of Appeals,
G.R. No. 118292,
[29] Romero v. Tan, supra note 27; Caballes v. Department of Agrarian Reform, G.R.
No. L-78214,
[30] G.R.
Nos. 93100 & 97855,
[31] Supra note 27.
[32] Romero v. Tan, id.
at 119-120.
[33] Republic Act No. 7881, Sec. 2(b) states:
x x x
x
“b) Private lands actually, directly and
exclusively used for prawn farms and fishponds shall be exempt from the
coverage of this Act: Provided, That said prawn farms and fishponds have not
been distributed and Certificate of Land Ownership Award (CLOA) issued to
agrarian reform beneficiaries under the Comprehensive Agrarian Reform Program.
[34] Tuazon v. Tuazon,
G.R. No. 168438,
[35] G.R. No.
122363,
[36]
[37] Records, pp. 39-40; Contract of Lease, par. 7.
[38] Civil Code, Art. 1649 states that “the lessee cannot assign the lease without the consent of the lessor, unless there is a stipulation to the contrary.”
[39] 106 Phil. 645 (1959).
[40] 119 Phil. 923 (1961).
[41]
[42] Rollo, p. 144.
[43]