R.A. NO. 6657, Section 12. Determination of Lease Rentals.

— In order to
protect and improve the tenurial and economic status of the farmers in tenanted
lands under the retention limit and lands not yet acquired under this Act, the DAR
is mandated to determine and fix immediately the lease rentals thereof in
accordance with Section 34 of Republic Act No. 3844, as amended: provided, that
the DAR shall immediately and periodically review and adjust the rental structure
for different crops, including rice and corn, or different regions in order to improve
progressively the conditions of the farmer, tenant or lessee.

REPUBLIC ACT No. 3844, Section 34. Consideration for the Lease of
Riceland and Lands Devoted to Other Crops - The consideration for the lease
of riceland and lands devoted to other crops shall not be more than the equivalent
of twenty-five per centum of the average normal harvest during the three
agricultural years immediately preceding the date the leasehold was established
after deducting the amount used for seeds and the cost of harvesting, threshing,
loading, hauling and processing, whichever are applicable: Provided, That if the
land has been cultivated for a period of less than three years, the initial
consideration shall be based on the average normal harvest during the preceding
years when the land was actually cultivated, or on the harvest of the first year in
the case of newly-cultivated lands, if that harvest is normal: Provided, further, That
after the lapse of the first three normal harvests, the final consideration shall be
based on the average normal harvest during these three preceding agricultural
years: Provided, furthermore, That in the absence of any agreement between the
parties as to the rental, the maximum allowed herein shall apply: Provided, finally,
That if capital improvements are introduced on the farm not by the lessee to
increase its productivity, the rental shall be increased proportionately to the
consequent increase in production due to said improvements. In case of
disagreement, the Court shall determine the reasonable increase in rental.

R.A. NO. 6657, Section 32. Production-Sharing. — Pending final land transfer,
individuals or entities owning, or operating under lease or management contract,
agricultural lands are hereby mandated to execute a production-sharing plan with
their farm workers or farmworkers' reorganization, if any, whereby three percent
(3%) of the gross sales from the production of such lands are distributed within
sixty (60) days of the end of the fiscal year as compensation to regular and other
farmworkers in such lands over and above the compensation they currently
receive: provided, that these individuals or entities realize gross sales in excess of
five million pesos per annum unless the DAR, upon proper application, determines
a lower ceiling.

In the event that the individual or entity realizes a profit, an additional ten percent
(10%) of the net profit after tax shall be distributed to said regular and other
farmworkers within ninety (90) days of the end of the fiscal year.

To forestall any disruption in the normal operation of lands to be turned over to the
farmworker-beneficiaries mentioned above, a transitory period, the length of which
shall be determined by the DAR, shall be established.

During this transitory period, at least one percent (1%) of the gross sales of the
entity shall be distributed to the managerial, supervisory and technical group in
place at the time of the effectivity of this Act, as compensation for such transitory
managerial and technical functions as it will perform, pursuant to an agreement
that the farmworker-beneficiaries and the managerial, supervisory and technical
group may conclude, subject to the approval of the DAR.
CABALLES vs. DEPARTMENT OF AGRARIAN REFORM
G.R. No. 78214 | 1988-12-05
SARMIENTO, J.:
Before us is a petition for certiorari seeking the annulment of an Order issued by
the public respondent Ministry of Agrarian Reform (MAR), now the Department of
Agrarian Reform (DAR), through its then Minister, the Hon. Heherson Alvarez,
finding the existence of a tenancy relationship between the herein petitioner and
the private respondent and certifying the criminal case for malicious mischief filed
by the petitioner against the private respondent as not proper for trial.
The facts as gathered by the MAR are as follows:
The landholding subject of the controversy, which consists of only sixty (60) square
meters (20 meters x 3 meters) was acquired by the spouses Arturo and Yolanda
Caballes, the latter being the petitioner herein, by virtue of a Deed of Absolute Sale
dated July 24, 1978 executed by Andrea Alicaba Millenes. This landholding is part
of Lot No. 3109-C, which has a total area of about 500 square meters, situated at
Lawa-an, Talisay, Cebu. The remainder of Lot No. 3109-C was subsequently sold
to the said spouses by Macario Alicaba and the other members of the Millenes
family, thus consolidating ownership over the entire (500-square meter) property
in favor of the petitioner.
In 1975, before the sale in favor of the Caballes spouses, private respondent
Bienvenido Abajon constructed his house on a portion of the said landholding,
paying a monthly rental of P2.00 to the owner, Andrea Millenes. The landowner
likewise allowed Abajon to plant on a portion of the land, agreeing that the produce
thereof would be shared by both on a fifty-fifty basis. From 1975-1977, Abajon
planted corn and bananas on the landholding. In 1978, he stopped planting corn
but continued to plant bananas and camote. During those four years, he paid the
P2.00 rental for the lot occupied by his house, and delivered 50% of the produce
to Andrea Millenes.
Sometime in March 1979, after the property was sold, the new owners, Arturo and
Yolanda Caballes, told Abajon that the poultry they intended to build would be
close to his house and pursuaded him to transfer his dwelling to the opposite or
southern portion of the landholding. Abajon offered to pay the new owners rental
on the land occupied by his house, but his offer was not accepted. Later, the new
owners asked Abajon to vacate the premises, saying that they needed the
property. But Abajon refused to leave. The parties had a confrontation before the
Barangay Captain of Lawa-an in Talisay, Cebu but failed to reach an agreement.
All the efforts exerted by the landowners to oust Abajon from the landholding were
in vain as the latter simply refused to budge.
On April 1, 1982, the landowner, Yolanda Caballes, executed an Affidavit stating
that immediately after she reprimanded Abajon for harvesting bananas and
jackfruit from the property without her knowledge, the latter, with malicious and ill
intent, cut down the banana plants on the property worth about P50.00. A criminal
case for malicious mischief was filed against Abajon and which was docketed as
Criminal Case No. 4003. Obviously, all the planting on the property, including that
of the banana plants, had been done by Abajon. On September 30, 1982, upon
motion of the defense in open court pursuant to PD 1038, the trial court ordered
the referral of the case to the Regional Office No. VII of the then MAR for a
preliminary determination of the relationship between the parties. As a result, the
Regional Director of MAR Regional VII, issued a certification 1 dated January 24,
1983, stating that said Criminal Case No. 4003 was not proper for hearing on the
bases of the following findings:
That herein accused is a bona-fide tenant of the land owned by the complaining
witness, which is devoted to bananas;
That this case is filed patently to harass and/or eject the tenant from his
farmholding, which act is prohibited b law; and
That this arose out of or is connected with agrarian relations.
From the said certification, the petitioner appealed to the then MAR, now the
respondent DAR. Acting on said appeal, the respondent DAR, through its then
Minister Conrado Estrella, reversed the previous certification in its Order 2 of
February 3, 1986, declaring Criminal Case No. 4003 as proper for trial as "the land
involved is a residential lot consisting of only 60 square meters whereon the house
of the accused is constructed and within the industrial zone of the town as evinced
from the Certification issued by the Zoning Administrator of Talisay, Cebu."
Upon motion for reconsideration filed by Abajon, the respondent DAR, through its
new Minister, herein respondent Heherson Alvarez, issued an Order 3 dated
November 15, 1986, setting aside the previous Order dated February 3, 1986, and
certifying said criminal case as not proper for trial, finding the existence of a
tenancy relationship between the parties, and that the case was designed to
harass the accused into vacating his tillage.
In the summary investigation conducted by the DAR, the former landowner,
Andrea Millenes, testified that Bienvenido Abajon dutifully gave her 50% share of
the produce of the land under his cultivation. The grandson of Andrea Millenes,
Roger Millenes, corroborated the testimony of the former, stating that he received
said share from Abajon. Roger Millenes further testified that the present owners
received in his presence a bunch of bananas from the accused representing 1/2
or 50% of the two bunches of bananas gathered after Caballes had acquired the
property. 4
From these factual findings, the DAR concluded that Abajon was a tenant of
Andrea Millenes, the former owner, who had testified that she shared the produce
of the land with Abajon as tiller thereof. 5 Thus, invoking Sec. 10 of RA 3844, as
amended, which provides that "[T]he agricultural leasehold relation under this
Code shall not be extinguished by mere expiration of the term or period in a
leasehold contract nor by the sale, alienation or transfer of the legal possession of
the landholding"; and that "(I)n case the agricultural lessor sells, alienates or
transfers the legal possession of the landholding, the purchaser or transferee
thereof shall be subrogated to the rights and substituted to the obligations of the
agricultural lessor," the MAR ruled that "the new owners are legally bound to
respect the tenancy, notwithstanding their claim that the portion tilled by Abajon
was small, consisting merely of three (3) meters wide and twenty
(20) meters long, or a total of sixty (60) square meters." 6
Hence, its petition for certiorari alleging that:
I. Respondents DAR and Hon. Heherson T. Alvarez committed "grave abuse of
power and discretion amounting to lack of jurisdiction" in holding that private
respondent Abajon is an agricultural tenant even if he is cultivating only a 60-
square meter (3 x 20 meters) portion of a commercial lot of the petitioner.
II. Public respondents gravely erred in holding that Criminal Case No. 4003 is not
proper for trial and hearing by the court. 7
We hold that the private respondent cannot avail of the benefits afforded by RA
3844, as amended. To invest him with the status of a tenant is preposterous.
Section 2 of said law provides:
It is the policy of the State:
(1) To establish cooperative-cultivatorship among those who live and work on the
land as tillers, owner-cultivatorship and the economic family-size farm as the basis
of Philippine agriculture and, as a consequence, divert landlord capital in
agriculture to industrial development;
xxx xxx xxx
RA 3844, as amended, defines an economic family-size farm as "an area of farm
land that permits efficient use of labor and capital resources of the farm family and
will produce an income sufficient to provide a modest standard of living to meet a
farm family's needs for food, clothing, shelter, and education with possible
allowance for payment of yearly installments on the land, and reasonable reserves
to absorb yearly fluctuations in income." 8
The private respondent only occupied a miniscule portion (60 square meters) of
the 500-square meter lot. Sixty square meters of land planted to bananas, camote,
and corn cannot by any stretch of the imagination be considered as an economic
family-size farm. Surely, planting camote, bananas, and corn on a sixty-square
meter piece of land can not produce an income sufficient to provide a modest
standard of living to meet the farm family's basic needs. The private respondent
himself admitted that he did not depend on the products of the land because it was
too small, and that he took on carpentry jobs on the side. 9 Thus, the order sought
to be reviewed is patently contrary to the declared policy of the law stated above.
The DAR found that the private respondent shared the produce of the land with
the former owner, Andrea Millenes. This led, or misled, the public respondents to
conclude that a tenancy relationship existed between the petitioner and the private
respondent because, the public respondents continue, by operation of Sec. 10 of
R. A. 3844, as amended, the petitioner new owner is subrogated to the rights and
substituted to the obligations of the supposed agricultural lessor (the former
owner).
We disagree.
The essential requisites of a tenancy relationship are:
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.
All these requisites must concur in order to create a tenancy relationship between
the parties. The absence of one does not make an occupant of a parcel of land, or
a cultivator thereof, or a planter thereon, a de jure tenant. This is so because
unless a person has established his status as a de jure tenant, he is not entitled to
security of tenure nor is he covered by the Land Reform Program of the
Government under existing tenancy laws. 10
 WHEREFORE, the Order of public respondents dated November 15, 1986 is SET
Therefore, the fact of sharing alone is not sufficient to establish a tenancy ASIDE and Criminal Case No. 4003, is hereby DISMISSED. Let a copy of this
relationship. Certainly, it is not unusual for a landowner to accept some of the decision be sent to the Municipal Trial Court of Talisay, Cebu for appropriate
produce of his land from someone who plants certain crops thereon. This is a action. This Decision is IMMEDIATELY EXECUTORY.
typical and laudable provinciano trait of sharing or patikim, a native way of
expressing gratitude for favor received. This, however, does not automatically No costs.
make the tiller-sharer a tenant thereof specially when the area tilled is only 60, or
even 500, square meters and located in an urban area and in the heart of an SO ORDERED.
industrial or commercial zone at that. Tenancy status arises only if an occupant of
a parcel of land has been given its possession for the primary purpose of
agricultural production. The circumstances of this case indicate that the private
respondent's status is more of a caretaker who was allowed by the owner out of
benevolence or compassion to live in the premises and to have a garden of some
sort at its southwestern side rather than a tenant of the said portion.

Agricultural production as the primary purpose being absent in the arrangement, it

is clear that the private respondent was never a tenant of the former owner, Andrea
Millenes. Consequently, Sec. 10 of RA of 3844, as amended, does not apply.
Simply stated, the private respondent is not a tenant of the herein petitioner.

Anent the second assignment of error, the petitioner argues that since Abajon, is
not an agricultural tenant, the criminal case for malicious mischief filed against him
should be declared as proper for trial so that proceedings in the lower court can
resume.

Notwithstanding our ruling that the private respondent is not a tenant of the
petitioner, we hold that the remand of the case to the lower court for the resumption
of the criminal proceedings is not in the interest of justice. Remand to the Municipal
Court of Talisay, Cebu, would not serve the ends of justice at all, nor is it
necessary, because this High Tribunal is in a position to resolve with finality the
dispute before it. This Court, in the public interest, and towards the expeditious
administration of justice, has decided to act on the merits and dispose of the case
with finality. 11

The criminal case for malicious mischief filed by the petitioner against the private
respondent for allegedly cutting down banana trees worth a measly P50.00 will
take up much of the time and attention of the municipal court to the prejudice of
other more pressing cases pending therein. Furthermore, the private respondent
will have to incur unnecessary expenses to finance his legal battle against the
petitioner if proceedings in the court below were to resume. Court litigants have
decried the long and unnecessary delay in the resolution of their cases and the
consequent costs of such litigations. The poor, particularly, are victims of this
unjust judicial dawdle. Impoverished that they are they must deal with unjust legal
procrastination which they can only interpret as harassment or intimidation brought
about by their poverty, deprivation, and despair. It must be the mission of the Court
to remove the misperceptions aggrieved people have of the nature of the
dispensation of justice. If justice can be meted out now, why wait for it to drop
gently from heaven? Thus, considering that this case involves a mere bagatelle,
the Court finds it proper and compelling to decide it here and now, instead of further
deferring its final termination.

As found by the DAR, the case for malicious mischief stemmed from the
petitioner's affidavit stating that after she reprimanded private respondent Abajon
for harvesting bananas and jackfruit from the property without her knowledge, the
latter, with ill intent, cut the banana trees on the property worth about P50.00.

This was corroborated by a certain Anita Duaban, a friend of the petitioner, who
likewise executed an affidavit to the effect that she saw the private respondent
indiscriminately cutting the banana trees. 12

The Revised Penal Code, as amended, provides that "any person who shall
deliberately cause to the property of another any damage not falling within the
terms of the next preceding chapter shall be guilty of malicious mischief." 13

The elements of the crime of malicious mischief are:

1. The offender deliberately caused damage to the property of another;

2. The damage caused did not constitute arson or crimes involving destructions.

3. The damage was caused maliciously by the offender.

After a review of the facts and circumstances of this case, we rule that the
aforesaid criminal case against the private respondent be dismissed.

The private respondent can not be held criminally liable for malicious mischief in
cutting the banana trees because, as an authorized occupant or possessor of the
land, and as planter of the banana trees, he owns said crops including the fruits
thereof. The private respondent's possession of the land is not illegal or in bad
faith because he was allowed by the previous owners to enter and occupy the
premises. In other words, the private respondent worked the land in dispute with
the consent of the previous and present owners. Consequently, whatever the
private respondent planted and cultivated on that piece of property belonged to
him and not to the landowner. Thus, an essential element of the crime of malicious
mischief, which is "damage deliberately caused to the property of another," is
absent because the private respondent merely cut down his own plantings.
GABRIEL vs. PANGILINAN
G.R. No. L-27797 | 1974-08-24
ZALDIVAR, J:
This appeal from the decision, dated December 26, 1963, of the Court of First
Instance of Pampanga in its Civil Case No. 1823, was certified to this Court by the
Court of Appeals for the reason that the jurisdiction of an inferior court is involved.
During the pendency of this case before this Court, under date of April 29, 1972,
Atty. Virgilio M. Pablo, counsel for the appellant Eusebio Pangilinan, gave notice
to this Court that said appellant died on April 3, 1964, and was survived by his
children, who are his legal heirs, namely: Salvador Pangilinan, Santos Pangilinan,
Mariano Pangilinan, Carlos Pangilinan and Pilar Pangilinan de Avante. For the
purposes of this case the appellant Eusebio Pangilinan, therefore, is substituted
by his heirs herein named.
Under date of November 20, 1973, Atty. Amando M. Laki filed a motion with this
Court advising that appellee Trinidad Gabriel died on June 14, 1967, and was
survived by her heirs and successors-in-interest, namely: Corazon O. Gabriel,
married to Lamberto Ignacio; Ernesto O. Gabriel; Ester O. Gabriel, married to
Emmanuel Padua; Generoso O. Gabriel, Marciano O. Gabriel and Pablo O.
Gabriel, and prayed that appellee Trinidad Gabriel be substituted by her heirs
herein named. By order of this Court of December 4, 1973 the prayer for
substitution was granted.
In its resolution dated April 19, 1967 certifying the case to this Court, the Court of
Appeals made the following findings, which We adopt:
"On June 18, 1960 Trinidad Gabriel filed a complaint in the Court of First Instance
of Pampanga against Eusebio Pangilinan alleging that she is the owner of a
fishpond situated in barrio Sta. Ursula, Betis, Pampanga and measuring about
169,507 square meters; that sometime during the last war she entered into an oral
contract of lease thereof with the defendant on a year to year basis, i.e., from
January 1 to December 31, at a rental of P1,200, plus the amount of real estate
taxes, payable in advance in the month of January; that desiring to develop and
cultivate the fishpond by herself, she notified the defendant in a letter dated June
26, 1957 that she was terminating the contract as of December 31, 1957; that upon
request of the defendant, she extended the lease for another year that on
November 19, 1958 she again wrote the defendant that he should surrender
possession of the fishpond on January 1, 1959, which demand he however
ignored. Plaintiff accordingly prayed that the defendant be ordered to restore the
possession of the fishpond to her and to pay her P1,200, plus the amount of real
estate taxes, a year from 1959, attorney's fees and costs.
"The defendant moved for the dismissal of the complaint on the ground that the
trial court had no jurisdiction over the case which properly pertains to the Court of
Agrarian Relations, there being an agricultural leasehold tenancy relationship
between the parties. Upon opposition by the plaintiff, the motion was denied. The
defendant thereafter filed his answer with counterclaim alleging, inter alia, that the
land in question was originally leased to him, also verbally, by the plaintiff's father,
Potenciano Gabriel, in 1923 for as long as the defendant wanted subject to the
condition that he would convert the major portion into a fishpond and the part which
was already a fishpond be improved at his expense which would be reimbursed
by Potenciano Gabriel or his heirs at the termination of the lease for whatever
cause: that when the plaintiff became the owner of the property through
inheritance, she told the defendant that she would honor her father's contract with
the defendant, and likewise assured him that he could continue leasing the
property, whose original rental of P400.00 a year had been progressively
increased to P1,200.00, for as long as he wanted since she was not in a position
to attend to it personally. As a special defense, the defendant reiterated the alleged
lack of jurisdiction of the trial court to take cognizance of the case.
"On February 12, 1962 the trial court issued an order herein below quoted in full:
'The plaintiff seeks to eject the defendant from the fishpond described in the
complaint which is under lease to the said defendant, who, however, refuses to
vacate. Instead, he has impugned the jurisdiction of this Court contending that the
action should have been filed with the Court of Agrarian Relations, which has
original and exclusive jurisdiction, as their relationship is one of leasehold tenancy.
'After the motion to dismiss was denied on the basis of the allegations of the
complaint, the parties were ordered to adduce evidence for the purpose of
determining which Court shall take cognizance of the case.
'It appears that the fishpond is presently in the possession of the defendant, who
originally leased it from the father of the plaintiff. Upon the death of the said father,
the fishpond was inherited by the plaintiff. It is now covered by T.C.T. No. 1634
and is registered in her name. It contains an area of 169,507.00 square meters.
The rental is on a yearly basis.
'It also appears that the defendant has ceased to work personally with the aid of
helpers the aforecited fishpond since 1956 he became ill and incapacitated. His
daughter, Pilar Pangilinan, took over. She testified that she helps her father in
administering the leased property, conveying his instructions to the workers,
Urbano Maninang, Isidro Bernal and Marciano Maninang. The names of Ire, Juan
and Aguedo Viada have been mentioned as the laborers who were paid for the
repair of the dikes. Bernardo Cayanan, a nephew of the defendant, acts as the
watcher. He has lived separately since he got married. Excepting Pilar Pangilinan,
who is residing near the fishpond, the other children of the defendant are all
professionals; a lawyer, an engineer, and a priest all residing in Manila. None of
these persons has been seen working on the fishpond.
'The above are the material and pertinent facts upon which we enter this order.
'After a study of the facts and in the light of the provisions of the Tenancy Law,
Republic Act No. 1199, particularly Sections 4 and 9, as amended, it seems clear
that his case does not fall within the purview of said Act. The lease contract is
manifestly a civil lease governed by the New Civil Code. Considering the area of
the fishpond, 16 hectares, more or less, the fact that neither the defendant, who is
physically incapacitated, or his daughter is personally cultivating the fishpond or
through the employment of mechanical farm implements, and the further fact that
the persons named above are not members of the immediate farm household of
the defendant, the conclusion is that no tenancy relationship exists between the
plaintiff and the defendant as defined by Republic Act No. 1199, as amended.
'We are, therefore, of the opinion and so hold that this Court is vested with
jurisdiction to try and decide this case. After this order has become final, the
plaintiff may request for the settling of the initial trial.'
The defendant does not contest the findings of facts therein made by the trial court.
"After the parties adduced their respective evidence on the merits, decision was
rendered wherein the trial court, pursuant to Article 1197 of the Civil Code, fixed
the period of the lease up to June 30, 1964, the defendant on said date to
surrender possession of the fishpond to the plaintiff and to pay the rentals due the
latter. The plaintiff, on her part, was required upon surrender of possession to her,
to pay the defendant the sum of P1,000.00 as reimbursement of the expenses he
incurred in improving the fishpond, and upon failure by either party to pay the
amount due the other, the same would bear interest at the legal rate until full
payment is made.
"A reconsideration by the defendant having been denied, he appealed to this Court
and assigned the following errors:
1.The lower court erred in considering the relationship of appellee and appellant
as that of a civil lease, in accordance with the Civil Code of the Philippines and not
a leasehold tenancy under Rep. Act No. 1199 as amended.
2.The lower court erred in not holding that the Court of First Instance is without
jurisdiction, the case being that of an agrarian relation in nature pursuant to Rep.
Act. No. 1199 as amended.
3.The lower court erred in appreciating the evidence of the appellant particularly
the basis for the expenditure for the development of the fishpond in question.
4.The lower court erred in rendering judgment in favor of the appellant in the
measely amount of one thousand pesos for reimbursement and for seven hundred
pesos for the cost of the floodgate.
"Anent the question of jurisdiction, it is an admitted fact that plaintiff leased the
fishpond to the defendant in 1943 without a fixed term, the annual rental payable
at the end of the year (Exhibit C, Deposition of plaintiff, Dec. 13, 1962, pp. 2 and
3). It is likewise undisputed that the work in the fishpond consisted in letting out
the water so algae (lumut) would grow or if algae would not grow, getting some
from the river and putting them in the fishpond, changing the dirty water with fresh
water, repairing leaks in the dikes, and planting of fingerlings and attending to
them; that these were done by defendant, with some help; that he personally
attended to the fishpond until 1956 when he became ill; that thereafter his nephew
Bernardo Cayanan, who was living with him, helped in the work to be done in the
fishpond and his daughter Pilar Pangilinan helped in the management, conveying
his instructions to the workers (t.s.n., pp. 4-8, Magat).
"Upon the foregoing facts, the defendant insists that the relationship between the
parties is an agricultural leasehold tenancy governed by Republic Act No. 1199,
as amended, pursuant to section 35 of Republic Act No. 3844, and the present
case is therefore within the original and exclusive jurisdiction of the Court of
Agrarian Relations. Plaintiff, on the other hand, maintains in effect that since
defendant has ceased to work the fishpond personally or with the aid of the
members of his immediate farm household (Section 4, Republic Act No. 1199) the
tenancy relationship between the parties has been extinguished (Section 9, id.)
and become of civil lease and therefore the trial court properly assumed jurisdiction
over the case.
"It does appear that the controversy on the issue of jurisdiction calls for the
interpretation of cultivating or working the land by the tenant personally or with the
aid of the members of his immediate farm household." 1
Those are the findings and conclusions of facts made by the Court of Appeals
which, as a general rule, bind this Court. 2
1.Let Us now discuss the issues raised in this appeal. First, was the relationship
between the appellee and appellant a leasehold tenancy or a civil law lease?
There are important differences between a leasehold tenancy and a civil law lease.
The subject matter of leasehold tenancy is limited to agricultural land; that of civil
law lease may be either rural or urban property. As to attention and cultivation, the
law requires the leasehold tenant to personally attend to, and cultivate the
agricultural land, whereas the civil law lessee need not personally cultivate or work
the thing leased. As to purpose, the landholding in leasehold tenancy is devoted
to agriculture, whereas in civil law lease, the purpose may be for any other lawful
pursuits. As to the law that governs, the civil law lease is governed by the Civil
Code, whereas leasehold tenancy is governed by special laws. 3
In order that leasehold tenancy under the Agricultural Tenancy Act may exist, the
following requisites must concur:
1.That the land worked by the tenant is an agricultural land;
2.That the land is susceptible of cultivation by a single person together with
members of his immediate farm household;
3.That the land must be cultivated by the tenant either personally or with the aid of
labor available from members of his immediate farm household;
4.That the land belongs to another; and
5.That the use of the land by the tenant is for a consideration of a fixed amount in
money or in produce or in both. 4
We are, therefore, construed to agree with the court a quo that the relationship
between the appellee Trinidad Gabriel and appellant Eusebio Pangilinan was not
a leasehold tenancy under Republic Act No. 1199. Hence, this case was not within
the original and exclusive jurisdiction of the Court of Agrarian Relations. 9
2.Regarding the second assignment of error. We accordingly rule that the Court of
First Instance correctly assumed jurisdiction over the case at bar, this being a case
of civil law lease.
3.We deem it unnecessary to discuss the third and fourth assigned errors as these
are issues involving findings of facts which have been settled by the lower court,
and unless there is grave abuse of discretion, which we do not find in the record
of the case, We shall not venture to discuss the merits of the factual findings of the
court a quo.
IN VIEW OF THE FOREGOING, the decision of the Court of First Instance of
Pampanga in its Civil Case No. 1823, appealed from, is affirmed, with costs
against the appellants.

Were the foregoing requisites present in the instant case?
There is no doubt that the land in question is agricultural land. It is a fishpond and
the Agricultural Tenancy Act, which refers to "agricultural land", specifically
mentions fishponds and prescribes the consideration for the use thereof. Thus
Section 46 (c) of said Act provides that "the consideration for the use of sugar
lands, fishponds, saltbeds and of lands devoted to the raising of livestock shall be
governed by stipulation between the parties". This Court has already ruled that
"land in which fish is produced is classified as agricultural land." 5 The mere fact,
however, that a person works an agricultural land does not necessarily make him
a leasehold tenant within the purview of section 4 of Republic Act No. 1199. He
may still be a civil law lessee unless the other requisites as above enumerated are
complied with.
This decision should apply to the heirs and successors-in-interest of the original
parties, as named in this decision. In consonance with the decision of the lower
court, the heirs and successors-in-interest of appellant Eusebio Pangilinan should
deliver the possession of the fishpond in question to the heirs and successors-in-
interest of appellee Trinidad Gabriel; and said heirs and successors-in-interest of
appellant Eusebio Pangilinan should pay the heirs and successors-in-interest of
appellee Trinidad Gabriel the accrued rentals from January 1, 1960, at the rate of
P1,200.00 a year, until the actual delivery of the possession of the fishpond as
herein ordered, with interest at the legal rate until full payment is made.
IT IS SO ORDERED.

Regarding the second requisite, it is to be noted that the land in question has an
area of 169,507 square meters, or roughly 17 hectares of fishpond. The question
of whether such a big parcel of land is susceptible of being worked by the
appellant's family or not has not been raised, and We see no need of tarrying on
this point. So, We pass to the third requisite, to wit, whether the tenant himself
personally or with the aid of his immediate family worked the land.

Assuming that appellant had previously entered in 1923 into an agreement of

leasehold tenancy with Potenciano Gabriel, appellee's father, such tenancy
agreement was severed in 1956 when he ceased to work the fishpond personally
because he became ill and incapacitated. Not even did the members of appellant's
immediate farm household work the land in question. Only the members of the
family of the tenant and such other persons, whether related to the tenant or not,
who are dependent upon him for support and who usually help him to operate the
farm enterprise are included in the term "immediate farm household" 6 The record
shows who helped work the land in question, and We quote:

"It also appears that the defendant has ceased to work personally with the aid of
helpers the aforecited fishpond since 1956 when he became ill and incapacitated.
His daughter, Pilar Pangilinan took over. She testified that she helps her father in
administering the leased property, conveying his instructions to the workers,
Urbano Maninang, Isidro Bernal and Marciano Maninang. The names of Ire, Juan
and Aguedo Viada have been mentioned as the laborers who were paid for the
repair of the dikes. Bernardo Cayanan, a nephew of the defendant, acts as the
watcher. He has lived separately since he got married. Excepting Pilar Pangilinan,
who is residing near the fishpond, the other children of the defendant are all
professionals: a lawyer, an engineer, and a priest all residing in Manila. None of
these persons has been seen working on the fishpond." 7

The law is explicit in requiring the tenant and his immediate family to work the land.
This Section 5 (a) of Republic Act No. 1199, as amended, defines a "tenant" as a
person who, himself and with the aid available from within his immediate farm
household, cultivates 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 in
produce or in money or both, under the leasehold tenancy system. Section 8 of
the same Act limits the relation of landholder and tenant to the person who
furnishes the land and to the person who actually works the land himself with the
aid of labor available from within his immediate farm household. Finally, Section 4
of the same Act requires for the existence of leasehold tenancy that the tenant and
his immediate farm household work the land. It provides that leasehold tenancy
exists when a person, who either personally or with the aid of labor available from
members of his immediate farm household, undertakes to cultivate a piece of
agricultural land susceptible of cultivation by a single person together with
members of his immediate farm household, belonging to, or legally possessed by,
another in consideration of a fixed amount in money or in produce or in both.

A person, in order to be considered a tenant, must himself and with the aid
available from his immediate farm household cultivate the land. Persons,
therefore, who do not actually work the land cannot be considered tenants; 8 and
he who hires others whom he pays for doing the cultivation of the land, ceases to
hold, and is considered as having abandoned the land as tenant within the
meaning of sections 5 and 8 of Republic Act No. 1199, and ceases to enjoy the
status, rights, and privileges of one.
GELOS vs. THE HONORABLE COURT OF APPEALS
G.R. No. 86186 | 1992-05-08
CRUZ, J.:
The Court is asked to determine the real status of the petitioner, who claims to be
a tenant of the private respondent and entitled to the benefits of tenancy laws. The
private respondent objects, contending that the petitioner is only a hired laborer
whose right to occupy the subject land ended with the termination of their contract
of employment.
The subject land is a 25,000 square meter farmland situated in Cabuyao, Laguna,
and belonging originally to private respondent Ernesto Alzona and his parents in
equal shares. On July 5, 1970, they entered into a written contract with petitioner
Rafael Gelos employing him as their laborer on the land at the stipulated daily
wage of P5.00. 1 On September 4, 1973, after Alzona had bought his parents'
share and acquired full ownership of the land, he wrote Gelos to inform him of the
termination of his services and to demand that he vacate the property. Gelos
refused and continued working on the land.
On October 1, 1973, Gelos went to the Court of Agrarian Relations and asked for
the fixing of the agricultural lease rental on the property. He later withdrew the case
and went to the Ministry of Agrarian Reform, which granted his petition. For his
part, Alzona filed a complaint for illegal detainer against Gelos in the Municipal
Court of Cabuyao, but this action was declared "not proper for trial" by the Ministry
of Agrarian Reform because of the existence of a tenancy relationship between
the parties. Alzona was rebuffed for the same reason when he sought the
assistance of the Ministry of Labor and later when he filed a complaint with the
Court of Agrarian Relations for a declaration of non-tenancy and damages against
Gelos. On appeal to the Office of the President, however, the complaint was
declared proper for trial and so de-archived and reinstated.
After hearing, the Regional Trial Court of San Pablo City (which had taken over
the Court of Agrarian Relations under BP 129) rendered a decision dated April 21,
1987, dismissing the complaint. 2 It found Gelos to be a tenant of the subject
property and entitled to remain thereon as such. The plaintiff was also held liable
in attorney's fees and costs.
The decision was subsequently reversed by the Court of Appeals. In its judgment
promulgated on November 25, 1988, 3 it held that Gelos was not a tenant of the
land in question and ordered him to surrender it to Alzona. He was also held liable
for the payment of P10,000.00 as attorney's fees and the costs of the suit.
The basic question the petitioner now raises before the Court is essentially factual
and therefore not proper in a petition for review under Rule 45 of the Rules of
Court. Only questions of law may be raised in this kind of proceeding. The settled
rule is that the factual findings of the Court of Appeals are conclusive on even this
Court as long as they are supported by substantial evidence. The petitioner has
not shown that his case comes under any of those rare exceptions when such
findings may be validly reversed by this Court.
It is true that in Talavera v. Court of Appeals, 4 we held that a factual conclusion
made by the trial court that a person is a tenant farmer, if it is supported by the
minimum evidence demanded by law, is final and conclusive and cannot be
reversed by the appellate tribunals except for compelling reasons. In the case at
bar, however, we find with the respondent court that there was such a compelling
reason. A careful examination of the record reveals that, indeed, the trial court
misappreciated the facts when it ruled that the petitioner was a tenant of the private
respondent.
The circumstance that the findings of the respondent court do not concur with
those of the trial court does not, of course, call for automatic reversal of the
appellate court. Precisely, the function of the appellate court is to review and, if
warranted, reverse the findings of the trial court. Disagreement between the two
courts merely calls on us to make a specially careful study of their respective
decisions to determine which of them should be preferred as more conformable to
the facts at hand.
The Court has made this careful study and will sustain the decision of the
respondent court.
The contract of employment dated July 5, 1970, written in Tagalog and entitled
"Kasunduan ng Upahang Araw," reads pertinently as follows:
1. Ang Unang Panig ay siyang may-ari at nagtatangkilik ng isang lagay na lupa,
sinasaka, na tumatayo sa Nayon ng Baclaran, Cabuyao, Laguna, na siyang
gagawa at sasaka sa lupa, samantalang ang Ikalawang Panig ay magiging upahan
at katulong sa paggawa ng lupa.
2. Ang Unang Panig ay gustong ipagpatuloy ang pagbubungkal at paggawa ng
bukid na binabanggit sa itaas at ang Ikalawang Panig ay may ibig na magpaupa
sa paggawa sa halagang P5.00 sa bawat araw, walong oras na trabaho gaya ng
mga sumsunod: Patubigan ng linang; pagpapahalabas ng mga pilapil;
pagpapaaldabis sa unang araw ng pag-aararo; pagpapalinis ng damo sa ibabaw
ng pilapil; pagpapakamot (unang pagpapasuyod), pagpapahalang at
pagpapabalasaw (ikalawa't ikatlong pagpapasuyod); isang tao sa pagsasabog ng
abono una sa pagpapantay ng linang; bago magtanim; isang tao sa pagaalaga ng
dapog; upa sa isang tao ng magbobomba ng gamot laban sa pagkapit ng mga
kulisap (mayroon at wala); sa nag-we-weeder; upa sa mga tao na maggagamas
at magpapatubig ng palay; magsasapaw ng mga pilapil at iba pa.
3. Ang Unang Panig at ang Ikalawang Panig ay nagkasundo na ang huli ay
gagawa sa bukid ayon sa nabanggit sa itaas bilang katulong at upahan lamang.
Ang Unang Panig bukod sa sila ang gagawa at magsasaka ay maaaring umupa
ng iba pang tao manggagawa sa upahang umiiral sang-ayon sa batas katulad ng
pag-aararo, pagpapahulip, pagpapagamas, pagbobomba, pagweweeder,
pagsasabog ng abono, pagbobomba ng gamot, pagpapatubig at iba pang mga
gawain. Maaaring alisin ang Ikalawang Panig sa pagpapatrabaho sa ano mang
oras ng Unang Panig.
4. Ipinatatanto ng Ikalawang Panig na siya ay hindi kasama sa bukid kundi upahan
lamang na binabayaran sa bawa't araw ng kanyang paggawa sa bukid na
nabanggit.
It is noted that the agreement provides that "ang Ikalawang Panig (meaning Gelos)
ay may ibig na magpaupa sa paggawa sa halagang P5.00 sa bawa't araw, walong
oras na trabaho" (The Second Party desires to lease his services at the rate of
P5.00 per day, eight hours of work) and that 'Ipinatatanto ng Ikalawang Panig na
siya ay hindi kasama sa bukid kundi upahan lamang na binabayaran sa bawa't
araw ng kanyang paggawa sa bukid na nabanggit." (The Second Party makes it
known that he is not a farm tenant but only a hired laborer who is paid for every
day of work on the said farm.)
These stipulations clearly indicate that the parties did not enter into a tendency
agreement but only a contract of employment. The agreement is a lease of
services, not of the land in dispute. This intention is quite consistent with the
undisputed fact that three days before that agreement was concluded, the former
tenant of the land, Laocadio Punongbayan, had executed an instrument in which
he voluntarily surrendered his tenancy rights to the private respondent. 5 It also
clearly demonstrates that, contrary to the petitioner's contention, Alzona intended
to cultivate the land himself instead of placing it again under tenancy.
The petitioner would now disavow the agreement, but his protestations are less
than convincing. His wife's testimony that he is illiterate is belied by his own
testimony to the contrary in another proceeding. 6 Her claim that they were tricked
into signing the agreement does not stand up against the testimony of Atty. Santos
Pampolina, who declared under his oath as a witness (and as an attorney and
officer of the court) that he explained the meaning of the document to Gelos, who
even read it himself before signing it. 7 Atty. Pampolina said the agreement was
not notarized because his commission as notary public was good only for Manila
and did not cover Laguna, where the document was executed. 8 At any rate, the
lack of notarization did not adversely affect the veracity and effectiveness of the
agreement, which, significantly, Gelos and his wife do not deny having signed.
Gelos points to the specific tasks mentioned in the agreement and suggests that
they are the work of a tenant and not of a mere hired laborer. Not so. The work
specified is not peculiar to tenancy. What a tenant may do may also be done by a
hired laborer working under the direction of the landowner, as in the case at bar.
It is not the nature of the work involved but the intention of the parties that
determines the relationship between them.
As this Court has stressed in a number of cases, 9 "tenancy is not a purely factual
relationship dependent on what the alleged tenant does upon the land. It is also a
legal relationship. The intent of the parties, the understanding when the farmer is
installed, and as in this case, their written agreements, provided these are
complied with and are not contrary to law, are even more important."
Gelos presented receipts 10 for fertilizer and pesticides he allegedly bought and
applied to the land of the private respondent, but the latter insists that it was his
brother who bought them, being an agriculturist and in charge of the technical
aspect of the farm. Moreover, the receipts do not indicate to which particular
landholding the fertilizers would be applied and, as pointed out by the private
respondent, could refer to the other parcels of land which Gelos was tenanting.
The petitioner's payment of irrigation fees from 1980 to 1985 to the National
Irrigation Administration on the said landholding is explained by the fact that during
the pendency of the CAR case, the Agrarian Reform Office fixed a provisional
leasehold rental after a preliminary finding that Gelos was the tenant of the private
respondent. As such, it was he who had to pay the irrigation fees. Incidentally,
Section 12, subpar. (r) of PD 946 provides that the Secretary's determination of
the tenancy relationship is only preliminary and cannot be conclusive on the lower
court.
It is noteworthy that, except for the self-serving testimony of the petitioner's wife,
the records of this case are bereft of evidence regarding the sharing of harvest
between Gelos and Alzona. No less importantly, as the Court of Appeals observed,
the petitioner has not shown that he paid rentals on the subject property from 1970
to 1973, before their dispute arose.
A tenant is defined under Section 5(a) of Republic Act No. 1199 as a person who
himself and with the aid available from within his immediate farm household
cultivates 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 in money or both, under the leasehold tenancy system. (Emphasis
supplied)
For this relationship to exist, it is necessary that: 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 harvest or payment of rental. In the absence of any of these requisites,
an occupant of a parcel of land, or a cultivator thereof, or planter thereon, cannot
qualify as a de jure tenant. 11

On the other hand, the indications of an employer-employee relationship are:

1) the selection and engagement of the employee; 2) the payment of wages; 3)
the power of dismissal; and 4) the power to control the employee's conduct -
although the latter is the most important element. 12

According to a well-known authority on the subject, 13 tenancy relationship is

distinguished from farm employer-farm worker relationship in that: "In farm
employer-farm worker relationship, the lease is one of labor with the agricultural
laborer as the lessor of his services and the farm employer as the lessee thereof.
In tenancy relationship, it is the landowner who is the lessor, and the tenant the
lessee of agricultural land. The agricultural worker works for the farm employer
and for his labor he receives a salary or wage regardless of whether the employer
makes a profit. On the other hand, the tenant derives his income from the
agricultural produce or harvest."

The private respondent, instead of receiving payment of rentals or sharing in the

produce of the land, paid the petitioner lump sums for specific kinds of work on the
subject lot or gave him vales, or advance payment of his wages as laborer thereon.
The petitioner's wife claims that Alzona made her husband sign the invoices all at
one time because he allegedly needed them to reduce his income taxes. Even
assuming this to be true, we do not think that made the said payments fictitious,
especially so since the petitioner never denied having received them.

The other issue raised by the petitioner, which is decidedly legal, is easily resolved.
There being no tenancy relationship, the contention that the private respondent's
complaint has prescribed under Section 38 of R.A. 3844 must also fail. That
section is not applicable. It must be noted that at the very outset, Alzona rejected
the petitioner's claim of agricultural tenancy and immediately instituted his action
for unlawful detainer in accordance with Section 1, Rule 70 of the Rules of Court.
As it happened, the said case was held not proper for trial by the Ministry of
Agrarian Reform. He then resorted to other remedies just so he could recover
possession of his land and, finally, in 1979, he yielded to the jurisdiction of the
defunct Court of Agrarian Relations by filing there an action for declaration of non-
tenancy. The action, which was commenced in 1979. was within the ten-year
prescriptive period provided under Article 1144 of the Civil Code for actions based
on a written contract. **

The Court quotes with approval the following acute observations made by Justice
Alicia Sempio-Diy:

It might not be amiss to state at this juncture that in deciding this case in favor of
defendant, the lower court might have been greatly influenced by the fact that
defendant is a mere farmer who is almost illiterate while plaintiff is an educated
landlord, such that it had felt that it was its duty to be vigilant for the protection of
defendant's interests. But the duty of the court to protect the weak and the
underprivileged should not be carried out to such an extent as to deny justice to
the landowner whenever truth and justice happen to be on his side. Besides,
defendant's economic position vis a vis the plaintiff does not necessarily make him
the underprivileged party in this case, for as testified by plaintiff which defendant
never denied, the small land in question was the only landholding of plaintiff when
he and his father bought the same, at which time he was just a lowly employee
who did not even have a house of his own and his father, a mere farmer, while
defendant was the agricultural tenant of another piece of land and also owns his
own house, a sari sari store, and a caritela. Plaintiff also surmised that it was only
after defendant had been taken into its wings by the Federation of Free Farmers
that he started claiming to be plaintiff's agricultural tenant, presumably upon the
Federation's instigation and advice. And we cannot discount this possibility indeed,
considering that during the early stages of the proceedings in this case, defendant
even counter-proposed to plaintiff that he would surrender the land in question to
the latter if plaintiff would convey to him another piece of land adjacent to the land
in question, almost one ha. in area, that plaintiff had also acquired after buying the
land in question, showing that defendant was not as ignorant as he would want the
Court to believe and had the advice of people knowledgeable on agrarian matters.

This Court has stressed more than once that 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.

WHEREFORE, the challenged decision of the Court of Appeals is AFFIRMED and

the petition is DENIED, with costs against the petitioner. It is so ordered.