G.R. No. 176091

SECOND DIVISION

RENE ANTONIO,

Petitioner,

- versus -

GREGORIO MANAHAN,

Respondent.

G.R. No. 176091

Present:

CARPIO, J.,

Chairperson,

VELASCO, JR.,*

BRION,

PEREZ, and

MENDOZA,** JJ.

Promulgated:

August 24, 2011

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D E C I S I O N

PEREZ, J.:

Assailed in this petition for review on certiorari filed pursuant to Rule 45 of the 1997 Rules of Civil Procedure is the Decision dated 31 October 2006 rendered by the then Fourteenth Division of the Court of Appeals (CA) in CA-G.R. SP No. 88319, dismissing the Rule 65 petition for certiorari filed by petitioner Rene Antonio (Antonio).[1]

The Facts

The suit concerns two (2) parcels of agricultural land situated at Gitnang Bayan I, San Mateo, Rizal, with an aggregate area of 30,906 square meters, and registered in the name of private respondent Gregorio Manahan (Manahan) under Original Certificate of Title Nos. 9200 and 9150 of the Rizal Provincial Registry. On 16 November 1993, Manahan and Antonio entered into a Kasunduang Buwisan sa Sakahan (Leasehold Agreement) whereby the latter undertook to cultivate the subject parcels for an annual rental of 70 cavans of dried, cleaned and good quality palay, each weighing 44 kilos. Subject to the provisions of Republic Act No. 6389,[2] the Leasehold Agreement provided, among other terms and conditions, that the land shall be exclusively planted to rice; that Antonio shall neither expand the 12x12 square meter portion on which his house stands nor allow others to construct their homes on the lands in litigation; that the planting and harvest on both parcels shall be simultaneously accomplished by Antonio; and, that Manahan shall be entitled to a three-day prior notice of the harvests done on the property.[3]

In 1994, 1996 and 1997, Manahan filed complaints before the Municipal Agrarian Reform Officer (MARO) against Antonio, for such violations of the Leasehold Agreement as non-payment/remittance of the stipulated rentals despite demands, impairment of the fertility of the subject parcels by planting kangkong thereon and failure to synchronize the planting and harvest on both parcels as well as to give a three-day prior notice for harvests, as agreed upon.[4] On the ground that Antonio persisted with the foregoing violations of the Leasehold Agreement, Manahan filed the 16 September 1997 Complaint for Ejectment which was docketed as PARAD Case No. IV-Ri-0583-97 before the Rizal Provincial Agrarian Reform Adjudication Board (PARAD). In addition to Antonios peaceful surrender of said parcels, Manahan sought indemnities for accrued lease rentals in the sum of P30,000.00 and the costs of the suit.[5]

Specifically denying the material allegations of the foregoing complaint in his 1 December 1997 answer, Antonio averred that he remitted the stipulated rentals regularly, except for the year 1993 when Manahan refused to accept the same; that his failure to notify Manahan of impending plantings and harvests is not an authorized cause for the dispossession of a tenant under Republic Act No. 6389; that the kangkong plants on Manahans property were not deliberately introduced to impair its fertility but, rather, grew naturally without any effort exerted on his part; that even assuming that they were introduced by him, said plants merely affected a very insignificant portion of the subject parcels and were intended as supplement to his daily subsistence; and, that the plants existence cannot, by any stretch of the imagination, be considered as violation of proven farm practices which connotes major agricultural improvements affecting the productivity of the land as a whole. Alongside the dismissal of the complaint, Antonio prayed for the grant of his counterclaims for moral and exemplary damages.[6]

The issues having been fully joined with the filing of the reply and rejoinder,[7] the parties filed their respective position papers, together with the pieces of documentary evidence in support of their respective causes[8] after the possibility of amicable settlement was foreclosed during the pre-trial conferences held in the case. On 4 October 1999, Provincial Adjudicator Rosalina Amonoy-Vergel de Dios rendered a decision for Manahan based on the following ascertained violations of the Leasehold Agreement committed by Antonio: (a) failure to pay the stipulated rental in full from 1993 to 1998; (b) failure to give Manahan prior notification of impending harvests; and (c) utilization of 3,000 square meters of the property to the planting of kangkong, despite Manahans objections.[9] As a consequence of the foregoing findings, the PARAD disposed of the case in the following wise:

WHEREFORE, IN VIEW OF THE FOREGOING, judgment is hereby rendered:

a). Declaring defendant [Antonio] to have violated the terms and conditions of th(e) agricultural leasehold contract with [Manahan];

b). Ordering the ejectment of [Antonio] from the landholding in question;

c). Ordering [Antonio] to pay plaintiff the amount of P30,000.00 as payment for the unpaid lease rental;

d). Ordering [Antonio] to surrender to [Manahan] the possession of the subject land.

No pronouncement as to costs and damages.

SO ORDERED.[10]

On appeal, the foregoing decision was initially reversed and set-aside in the 8 January 2004 decision rendered by the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No. 8969. Finding that Antonios shortages did not amount to a deliberate intent to evade payment of the stipulated rentals and that the kangkong simply grew naturally and sporadically on the property, the DARAB ordered Manahan to respect said tenants peaceful possession and cultivation of the land and the dismissal of his claim for unpaid rentals.[11] Aggrieved, Manahan moved for the reconsideration of the DARABs 8 January 2004 Decision on the ground, among other matters, that not being attributable to fortuitous event or force majeure, Antonios failure to pay the rentals in full constituted sufficient ground for his dispossession under Section 36 of Republic Act No. 3844; and, that the established utilization of a substantial portion of the property for the planting of kangkong debunked Antonios claim that the same grew naturally on the land. Contending that Antonio committed further violations of the Leasehold Agreement by planting string beans and building a second house and three (3) pig pens on the property,[12] Manahan further moved that an ocular inspection of the premises be conducted by the DARAB.[13]

On 14 April 2004, Manahan filed a manifestation calling the DARABs attention to the fact that the ocular inspection it caused to be conducted confirmed Antonios further contractual violations which included the planting of tomatoes, squash, eggplants and other root crops on the property.[14] In opposition, Antonio argued that the string beans he planted were momentary cash crops which did not alter the agricultural condition of the property; that the other vegetables and root crops complained against were planted within the perimeter boundary of the adjoining residential subdivision, on the other side of the water canal which serves as an embankment for the property; and, that the second house adverted to by Manahan was meant for the storage of harvested palay and, like the three (3) pig pens, were already standing on the land at the time Manahan filed the complaint from which the suit stemmed.[15] Finding merit in Manahans motion as aforesaid, the DARAB issued the 28 December 2004 Resolution which reconsidered its 8 January 2004 Decision and reinstated the PARADs 4 October 1999 Decision.[16]

On 10 February 2005, Antonio filed the petition for review docketed before the CA as CA-G.R. SP No. 88319, arguing that the DARAB gravely erred in finding that he violated the Leasehold Agreement and in interpreting laws and jurisprudence applicable to tenancy relationships.[17] Concluding that Antonios failure to pay the rentals in full over the years and his planting of kangkong on the property were violations of the Leasehold Agreement which justified his dispossession under Section 36 of Republic Act No. 3844, the CA rendered the herein assailed 31 October 2006 Decision, dismissing the petition and affirming the DARABs 28 December 2004 Resolution.[18] Antonios motion for reconsideration of said decision was denied for lack of merit in the CAs 4 January 2007 resolution,[19] hence, this petition.

The Issues

Antonio urges the reversal of the assailed 31 October 2006 Decision and 4 January 2007 Resolution on the ground that the CA erred

1. WHEN IT DECLARED THAT [HE] IS GUILTY OF NON-PAYMENT OF LEASE RENTALS DUE TO SHORTAGE OF LEASE RENTALS DELIVERED ON CERTAIN AGRICULTURAL CROP YEARS.

2. WHEN IT DECLARED THAT [HE] VIOLATED THE TERMS AND CONDITIONS OF THE LEASEHOLD CONTRACT DUE TO ALLEGED PLANTING OF KANGKONG ON (A) SINGLE OCCASION.

3. WHEN IT APPLIED SECTION 36 (PARAGRAPHS 3 AND 4) OF RA 3844 AS AUTHORIZED CAUSES FOR DISPOSSESSION OF PETITIONER.[20]

The Courts Ruling

We find the affirmance of the assailed decision in order, despite the partial merit in the petition.

An agricultural leasehold relationship is said to exist upon the concurrence of the following essential requisites: (1) the parties are the landowner and the tenant or agricultural lessee; (2) the subject matter of the relationship is agricultural land; (3) there is consent between the parties to the relationship; (4) the purpose of the relationship is to bring about agricultural production; (5) there is personal cultivation on the part of the tenant or agricultural lessee; and (6) the harvest is shared between the landowner and the tenant or agricultural lessee.[21] Once the tenancy relationship is established, the tenant is entitled to security of tenure and cannot be ejected by the landlord unless ordered by the court for causes provided by law.[22] In recognition and protection of the tenants right to security of tenure, the burden of proof is upon the agricultural lessor to show the existence of the lawful causes for ejectment[23] or dispossession under Section 36 of Republic Act No. 3844 which provides as follows:

Section 36. Possession of Landholding; Exceptions. Notwithstanding any agreement as to the period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that:

(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided; That the agricultural lessee shall be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights under Sections twenty-five and thirty-four, except when the land owned and leased by the agricultural lessor, is not more than five hectares, in which case instead of disturbance compensation the lessee may be entitled to an advanced notice of at least one agricultural year before ejectment proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to substantially carry out such conversion within one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because of said dispossessions. HSD

(2) The agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the provisions of this Code unless his failure is caused by fortuitous event or force majeure;

(3) The agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed upon;

(4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section twenty-nine;

(5) The land or other substantial permanent improvement thereon is substantially damaged or destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee;

(6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; or

(7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty-seven.

As agricultural tenant, Antonio was ordered dispossessed of Manahans landholding by the CA, the DARAB and the PARAD, on the ground that he failed to remit the stipulated rentals and violated the terms and conditions of the Leasehold Agreement. In taking exception to the findings of said court and tribunals, Antonio insists that he had religiously delivered the sacks of palay agreed upon as rentals, except for the years 1993 and 2001, when Manahan rejected the same due to poor quality. Maintaining that his arrearages/shortages in earlier years were paid/settled from subsequent harvests, Antonio argues that Manahans continued acceptance of his deliveries over the years indicates that he had religiously complied with his obligation to pay the stipulated rentals. Absent a deliberate intent to pay, moreover, Antonio claims that arrears in lease rentals are considered as debts, which the tenant is simply obliged to repay during the ensuing years until the same is fully paid.[24]

The rule is settled that failure to pay the lease rentals must be willful and deliberate in order to be considered as ground for dispossession of an agricultural tenant.[25] While the term deliberate is characterized by or results from slow, careful, thorough calculation and consideration of effects and consequences, the term "willful" has been defined as one governed by will without yielding to reason or without regard to reason.[26] Despite the complaints Manahan filed with the MARO in 1994 and 1996,[27] our perusal of the record shows that Antonios failure to pay and/or incurrence of shortages from the stipulated annual lease rentals of 70 Cavans of palay weighing 40 Kilos cannot be considered willful and deliberate. Even with Manahans rejection of the rentals tendered by Antonio in 1993 and 2001 for supposed poor quality,[28] the receipts on record show that the latter was able to remit the following rentals which were duly received by the former, viz.: (a) 1994 87 cavans and 32 kilos;[29] (b) 1995 65 cavans and 36 kilos;[30] (c) 1996 74 cavans and 4.5 kilos;[31] (d) 1997 103 cavans and 27 kilos;[32] (e) 1998 72 cavans and 38 kilos;[33] (f) 1999 82 cavans and 14 kilos;[34] (g) 2000 69 cavans and 26 kilos;[35] (h) 2002 69 cavans and 37 kilos;[36] and (i) 2003 86 cavans and 40 kilos.[37]

Evident from the foregoing rental remittances is the fact that Antonio exerted effort to make up for the shortages which resulted from Manahans rejection of the rentals he tendered for the years 1993 and 2001. Having already compensated for the 1993 deficiency, Antonio appears to have started making up for his 2001 shortage. Manahans claim that Antonio had consistently failed to remit the stipulated rentals for the past thirteen years (13)[38] ignores the clear showing in the receipts evidencing payment of said rentals that the rejected rentals tendered for the years 1993 and 2001 were simply carried over to and accordingly compensated by the yields from the subsequent years. Even in the absence of showing that Antonios shortages were attributable to fortuitous event or force majeure, we consequently find that Manahan failed to discharge the onus of proving that said shortages were willful and deliberate. Hence, the CA reversibly erred in upholding the DARABs ruling that Antonios dispossession of the subject parcels is justified by his non-payment of the stipulated rentals.

The foregoing disquisition notwithstanding, we find that Antonios dispossession is, however, still warranted by his repeated violations of the terms of the Leasehold Agreement which prohibited, among other matters, the cultivation of other plants on Manahans properties, the expansion of the tenants dwelling as well as the non-synchronized plantings and harvests thereon.[39] Granted that paragraph III (G)[40] of DAR Administrative Order No. 5, Series of 1993 allows the tenant to plant secondary crop on the land provided he shoulders the expenses thereof, Antonios planting of kangkong directly flies in the face of the categorical prohibition in the Leasehold Agreement against the planting of other plants on the land and Manahans objections/complaints against the same as early as 24 November 1994.[41] Antonios claim that that kangkong grew naturally on the property is belied by the pictures submitted by Manahan[42]and the PARADs finding that a 3,000 square meter portion of the property was devoted to said plant.[43] To our mind, the legitimacy of Manahans complaint is borne out by the 7 October 1998 certification issued by the Bureau of Soils and Water Management (BSWM) that kangkong deprives rice plants of essential plant foods, overcrowds them and generally reduces the yield.[44]

In addition, it was likewise established that Antonio planted other vegetable crops like string beans, tomatoes, squash and eggplant,[45] built three pigpens and another residential structure on the land[46] and resorted to rice planting in three phases,[47] in violation of the express prohibitions in the Leasehold Agreement. While it may be conceded that these added violations were not included in the 16 September 1997 complaint from which the ejectment suit stemmed, the record shows that, upon Manahans motion, an ocular inspection was ordered by the DARAB on 9 March 2004, with due notice to both parties.[48] Under Section 3, Rule I of its 2003 Rules of Procedure, moreover, the DARAB, and its Regional and Provincial Adjudicators shall not be bound by technical rules of procedure and evidence and shall proceed to hear and decide all agrarian cases, disputes, or controversies in a most expeditious manner, employing all reasonable means to ascertain the facts of every case in accordance with justice and equity.

Fealty to the fact that R.A. No. 3844 does not operate to take away completely every landowners rights to his land or authorize the agricultural lessee to act in an abusive or excessive manner in derogation of the landowners rights[49] impels us to uphold Antonios dispossession as ordered by the PARAD, the DARAB and the CA. Although the agrarian laws afford the opportunity for the landless to break away from the vicious cycle of having to perpetually rely on the kindness of others, a becoming modesty demands that this kindness should at least be reciprocated, in whatever small way, by those benefited by them.[50] In Perez-Rosario vs. Court of Appeals,[51] this Court laid down the following precepts regarding the resolution of agrarian disputes:

It is an established social and economic fact that the escalation of poverty is the driving force behind the political disturbances that have in the past compromised the peace and security of the people as well as the continuity of the national order. To subdue these acute disturbances, the legislature over the course of the history of the nation passed a series of laws calculated to accelerate agrarian reform, ultimately to raise the material standards of living and eliminate discontent. Agrarian reform is a perceived solution to social instability. The edicts of social justice found in the Constitution and the public policies that underwrite them, the extraordinary national experience, and the prevailing national consciousness, all command the great departments of government to tilt the balance in favor of the poor and underprivileged whenever reasonable doubt arises in the interpretation of the law. But annexed to the great and sacred charge of protecting the weak is the diametric function to put every effort to arrive at an equitable solution for all parties concerned: the jural postulates of social justice cannot shield illegal acts, nor do they sanction false sympathy towards a certain class, nor yet should they deny justice to the landowner whenever truth and justice happen to be on her side. In the occupation of the legal questions in all agrarian disputes whose outcomes can significantly affect societal harmony, the considerations of social advantage must be weighed, an inquiry into the prevailing social interests is necessary in the adjustment of conflicting demands and expectations of the people, and the social interdependence of these interests, recognized. [52]

A repetition in this case of these past precepts is timely and appropriate.

WHEREFORE, the petition is DENIED and the appealed decision is, accordingly, AFFIRMED.

SO ORDERED.

JOSE PORTUGAL PEREZ

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

Chairperson

PRESBITERO J. VELASCO, JR. ARTURO D. BRION

Associate Justice Associate Justice

JOSE CATRAL MENDOZA

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO

Associate Justice

Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA

Chief Justice

* Associate Justice Presbitero J. Velasco, Jr. is designated Additional Member as per Special Order No. 1067-C dated 23 August 2011.

** Associate Justice Jose Catral Mendoza is designated Additional Member as per Special Order No. 1066 dated 23 August 2011.

[1] Rollo, pp. 33-44, CAs 31 October 2006 Decision in CA-G.R. SP No. 88319.

[2] An Act Amending Republic Act Numbered Thirty-Eight Hundred And Forty-Four, As Amended, Otherwise Known As The Agricultural Land Reform Code, And For Other Purposes.

[3] Rollo, Parties 16 November 1993 Kasunduang Buwisan Sa Sakahan, pp. 146-148.

[4] Record, DARAB Case 8969, Manahans 24 November 1994, 10 December 1996 and 8 August 1997 MARO complaints, pp. 6; 8; 10.

[5] Manahans 16 September 1997 complaint, id. at pp. 14-16.

[6] Antonios 1 December 1997 Answer, id. at pp. 30-35.

[9] PARADs 4 October 1999 Decision, id. at pp. 137-153.

[11] DARABs 8 January 2004 Decision, id. at 197-204.

[12] Manahans 9 February 2004 Motion for Reconsideration, id. at 309-327.

[13] Manahans 19 February 2004 Urgent Motion with Leave of Board to Order an Ocular Inspection, id. at 408-412.

[14] Manahans 14 April 2004 Manifestation, id. at 444-447.

[15] Antonios 11 May 2004 Comment/Opposition, id. at 458-462.

[16] DARABs 28 December 2004 Resolution, id. at 481-487.

[17] CA rollo, CA-G.R. SP No. 88319, Antonios 8 February 2005 Petition for Review, pp. 7-22.

[18] CAs 31 October 2006 Decision, id. at 294-305.

[19] CAs 4 January 2007 Resolution, id. at 324.

[21] Chico v. Court of Appeals, 400 Phil. 800, 807-808 (2000) citing Cuao v. Court of Appeals , 237 SCRA 122, 132-133.

[22] Heirs of Enrique Tan, Sr. v. Pollescas, 511 Phil. 641, 649 (2005).

[23] Section 37, R.A. 3844. Burden of Proof - The burden of proof to show the existence of a lawful cause for ejectment of an agricultural lessee shall rest upon the agricultural lessor.

[25] Sta. Ana v. Spouses Carpo, G.R. No. 164340, 28 November 2008, 572 SCRA 463, 485.

[40] G. Where the rentals has been fixed, whether in cash or in kind, such rental shall constitute the consideration for the use of the land and the lessee may diversify and/or plant secondary crops, provided that all the expenses are shouldered by him/her.

[49] Castillo v. Tolentino, G. R. No. 181525, 4 March 2009, 580 SCRA 629, 657.

[51] G.R. No. 140796, 30 June 2006, 494 SCRA 66.