Today is Sunday, September 15, 2019

SECOND DIVISION
January 18, 2017

G.R. No. 219509

ILOILO JAR CORPORATION, Petitioner
vs.
COMGLASCO CORPORATION AGUILA GLASS, Respondent
D E C I S I O N

MENDOZA, J.:
This petition for review on certiorari seeks to reverse and set aside the January 30, 2015 Decision 1 and June 17, 2015 Re
solution 2 of the Court of Appeals (CA) in CA-G.R. CV No. 01475, which overturned the February 17, 2005 Amended Ord
er3 of the Regional Trial Court, Branch 3 7, Iloilo City (RTC).
The Antecedents:
On August 16, 2000, petitioner Iloilo Jar Corporation (Iloilo Jar), as lessor, and respondent Comglasco Corporation/Aguila
Glass (Comglasco), as lessee, entered into a lease contract over a portion of a warehouse building, with an estimated floo
r area of 450 square meters, located on a parcel of land identified as Lot 2-G-1-E-2 in Barangay Lapuz, La Paz District, Il
oilo City. The term of the lease was for a period of three (3) years or until August 15, 2003.4
On December 1, 2001, Comglasco requested for the pre-termination of the lease effective on the same date. Iloilo Jar, ho
wever, rejected the request on the ground that the pre-termination of the lease contract was not stipulated therein. Despite
the denial of the request for pre-termination, Comglasco still removed all its stock, merchandise and equipment from the l
eased premises on January 15, 2002. From the time of the withdrawal of the equipment, and notwithstanding several dem
and letters, Comglasco no longer paid all rentals accruing from the said date. 5
On September 14, 2003, Iloilo Jar sent a final demand letter to Comglasco, but it was again ignored. Consequently, Iloilo
Jar filed a civil action for breach of contract and damages before the RTC on October 10, 2003. 6
On June 28, 2004, Comglasco filed its Answer 7 and raised an affirmative defense, arguing that by virtue of Article 1267 o
f the Civil Code (Article 1267),8 it was released from its obligation from the lease contract. It explained that the considerati
on thereof had become so difficult due to the global and regional economic crisis that had plagued the economy. Likewise,
Comglasco admitted that it had removed its stocks and merchandise but it did not refuse to pay the rentals because the l
ease contract was already deemed terminated. Further, it averred that though it received the demand letters, it did not am
ount to a refusal to pay the rent because the lease contract had been pre-terminated in the first place.
On July 15, 2004, Iloilo Jar filed its Motion for Judgment on the Pleadings9 arguing that Comglasco admitted all the materi
al allegations in the complaint. It insisted that Comglasco's answer failed to tender an issue because its affirmative defens
e was unavailing.
 The RTC Order
In its August 18, 2004 Order, 10 the RTC granted the motion for judgment on the pleadings. It opined that Comglasco's an
swer admitted the material allegations of the complaint and that its affirmative defense was unavailing because Article 126
7 was inapplicable to lease contracts. Comglasco moved for reconsideration but its motion was denied by the RTC in its J
anuary 24, 2005 Order. 11 After formal defects in the original order were raised, the RTC issued the assailed February 17,
2005 Amended Order wherein the total amount of unpaid rentals to be paid was modified from P1,333,200.00 to P333,300
.00. Further, it changed the following: (a) award of attorney's fees from P200,000.00 to P75,000.00; (b) litigation expenses
from P50,000.00 to P30,000.00; and (c) exemplary damages from P400,000.00 to P200,000.00.
Aggrieved, Comglasco appealed before the CA.
The CA Ruling
In its January 30, 2015 decision, the CA reversed the amended order of the RTC. The appellate court was of the view th
at judgment on the pleadings was improper as Comglasco' s answer tendered an issue considering that lloilo Jar's materia
l allegations were specifically denied therein. Further, the CA opined that even if the same were not specifically denied, th
e answer raised an affirmative issue which was factual in nature. It disposed:
IN LIGHT OF ALL THE FOREGOING, the instant appeal is GRANTED. The Order dated August 18, 2004; the Order date
d January 24, 2005; and the Order dated February 17, 2005 of the Regional Trial Court, Branch 37, Iloilo City, in Civil Ca
se No. 03- 27960, are REVERSED.
Let the records be REMANDED to the RTC for the conduct of further proceedings.
SO ORDERED. 12

Iloilo Jar moved for reconsideration, but its motion was denied by the CA in its assailed June 17, 2015 resolution.

Hence, this petition.

ISSUES
I
WHETHER OR NOT A DEFENSE RAISED IN THE ANSWER THAT IS NOT APPLICABLE TO THE CASE AT BAR CAN
BE CONSIDERED AS APPROPRIATELY TENDERING AN ISSUE THAT NEED TO BE TRIED BY THE TRIAL COURT; A
ND

II
WHETHER OR NOT A JUDGMENT ON THE PLEADINGS IS APPROPRIATE AND VALID WHEN THE DEFENSE INTER
POSED BY THE DEFENDANT IN THE ANSWER IS NOT APPLICABLE AS A DEFENSE TO THE CAUSE OF ACTION A
S STATED IN THE COMPLAINT. 13
Iloilo Jar argues that Comglasco's answer materially admitted the allegations of the former's complaint, particularly, that the
latter had removed its merchandise from the lease premises and failed to pay subsequent rentals, after it had received th
e demand letters sent. It points out that Comglasco brushed aside its obligation by merely claiming that it was no longer b
ound by the lease contract because it was terminated due to the financial difficulties it was experiencing in light of the eco
nomic crisis. Iloilo Jar insisted that Comglasco cannot rely on Article 1267 because it does not apply to lease contracts, w
hich involves an obligation to give, and not an obligation to do.

In its Comment, 14 dated February 11, 2016, Comglasco countered that its answer raised material defenses which rendere
d judgment on the pleadings improper. It asserted that judgment on the pleadings may be had only when the answer fails
to tender an issue or otherwise admits the material allegations of the adverse party's pleading. Comglasco argued that eve
n if the allegations in the complaint were deemed admitted, the affirmative defenses it raised may give rise to factual contr
oversies or issues which should be subject to a trial.
In its Reply, 15 dated September 28, 2016, Iloilo Jar reiterated that judgment on the pleadings was warranted because Co
mglasco's answer failed to specifically deny the allegation in the complaint, and that the affirmative defense alleged therein
was improper because Article 1267 is inapplicable to a lease contract. As such, it stressed that Comglasco's answer faile
d to tender an issue.
The Court's Ruling
The Court finds merit in the petition.
Rules of Procedure

strictly complied with;

Exceptions
It must be remembered that the right to appeal is not a natural right but merely a statutory privilege; a party appealing is,
thus, expected to comply with the requirements of relevant rules otherwise he would lose the statutory right to appeal. 16
A review of the records reveals that Iloilo Jar received the Notice of Resolution of the assailed CA resolution on July 9, 2
015. Pursuant to Section 2 Rule 45 of the Rules of Court, 17 it had fifteen (15) days from receipt of the resolution or until
July 24, 2015 to file its petition for review on certiorari before the Court.
On the said date, however, Iloilo Jar filed a motion for extension to file the said petition. In its September 2, 2015 Resoluti
on, 18 the Court granted that same and extended for thirty (30) days reckoned from the expiration of the reglementary peri
od within which to file the petition, with a warning that it would be the last extension to be given. In other words, Iloilo Jar
had until August 23, 2015 to file its petition for review on certiorari.
On August 24, 2015, Iloilo Jar again filed another motion for extension 19requesting an additional thirty (30) days. In its No
vember 25, 2015 Resolution,20 the Court again granted the same and gave another 30-day extension reckoned from Augu
st 24, 2015. Thus, it had until September 23, 2015 to file its petition.
Iloilo Jar, unfortunately, filed its petition for review only on September 24, 2015,21one day past the twice extended filing pe
riod. Again, procedural rules are not lightly brushed aside as its strict compliance is necessary for the orderly administratio
n of justice. Thus, even if the filing of the petition was merely late for a day, it is still a violation of the rules on appeal, w
hich generally leads to its outright denial.
The tardy filing, notwithstanding, the Court may still entertain the present appeal. Procedural rules may be disregarded by t
he Court to serve the ends of substantial justice. When a petition for review is filed a few days late, application of proced
ural rules may be relaxed, where strong considerations of substantial justice are manifest in the petition, in the exercise of
the Court's equity jurisdiction. 22 In CMTC International Marketing Corporation v. Bhagis International Trading Corporation,23
the Court did not strictly apply procedural rules as it would serve the interest of justice, elucidating:
Time and again, this Court has emphasized that procedural rules should be treated with utmost respect and due regard, si
nce they are designed to facilitate the adjudication of cases to remedy the worsening problem of delay in the resolution of
rival claims and in the administration ofjustice. From time to time, however, we have recognized exceptions to the Ru
les, but only for the most compelling reasons where stubborn obedience to the Rules would def eat rather than
serve the ends of justice.
xxxx
Ergo, where strong considerations of substantive justice are manifest in the petition, the strict application of the
rules of procedure may be relaxed, in the exercise of its equity jurisdiction. Thus, a rigid application of the rules of
procedure will not be entertained if it will obstruct rather than serve the broader interests of justice in the light of the preva
ling circumstances in the case under consideration. 24 [Emphases supplied]
The merits of Iloilo Jar's petition for review warrant a relaxation of the strict rules of procedure if only to attain justice swift
y. A denial of its petition will cause the remand of the case, which based on the circumstances, will unnecessarily delay t
he proceedings. Thus, the Court deems it wise to let Iloilo Jar's procedural lapse pass.
Judgment on the

pleadings vis-a-vis
Summary Judgment
Section 1, Rule 34 of the Revised Rules of Court governs motions for judgment on the pleadings. It reads:
SECTION 1. Judgment on the pleadings. - Where an answers fails to tender an issue, or otherwise admits the m
aterial allegations of the adverse party's pleading, the court may, on motion of that party, direct judgment on suc
h pleading. However, in actions for declaration of nullity or annulment of marriage or for legal separation, the material fact
s alleged in the complaint shall always be proved. [Emphasis supplied]
On the other hand, under Rule 35 of the Rules of Court, a party may move for summary judgment if there are no genuine
issues raised.
In Basbas v. Sayson, 25 the Court differentiated judgment on the pleadings from summary judgment in that the former is a
ppropriate if the answer failed to tender an issue and the latter may be resorted to if there are no genuine issues raised, t
o wit:

Simply stated, what distinguishes a judgment on the pleadings from a summary judgment is the presence of iss
ues in the Answer to the Complaint. When the Answer fails to tender any issue, that is, if it does not deny the material
allegations in the complaint or admits said material allegations of the adverse party's pleadings by admitting the truthfulne
ss thereof and/or omitting to deal with them at all, a judgment on the pleadings is appropriate. On the other hand, when t
he Answer specifically denies the material averments of the complaint or asserts affirmative defenses, or in other words rai
ses an issue, a summary judgment is proper provided that the issue raised is not genuine. "A 'genuine issue' means an is
sue of fact which calls for the presentation of evidence, as distinguished from an issue which is fictitious or contrived or w
hich does not constitute a genuine issue for trial."
xxx
In this case, we note that while petitioners' Answer to respondents' Complaint practically admitted all the material allegation
s therein, it nevertheless asserts the affirmative defenses that the action for revival of judgment is not the proper action an
d that petitioners are not the proper parties. As issues obviously arise from these affirmative defenses, a judgment on
the pleadings is clearly improper in this case. 26 [Emphases supplied]
In the case at bench, Comglasco interposed an affirmative defense in its answer. While it admitted that it had removed its
stocks from the leased premises and had received the demand letter for rental payments, it argued that the lease contract
had been pre-terminated because the consideration thereof had become so difficult to comply in light of the economic crisi
s then existing. Thus, judgment on the pleadings was improper considering that Comglasco's Answer raised an affirmative
defense.

Although resort to judgment on the pleadings might have been improper, there was still no need to remand the case to th
e RTC for further proceedings. In Wood Technology Corporation v. Equitable Banking Corporation (Wood Technology), 27th
e Court ruled that summary judgment may be availed if no genuine issue for trial is raised, viz:
Summary judgment is a procedure aimed at weeding out sham claims or defenses at an early stage of the litigation. The
proper inquiry in this regard would be whether the affirmative defenses offered by petitioners constitute genuine issues of f
act requiring a full-blown trial. In a summary judgment, the crucial question is: are the issues raised by petitioners not gen
uine so as to justify a summary judgment? A "genuine issue" means an issue of fact which calls for the presentatio
n of evidence, as distinguished from an issue which is fictitious or contrived, an issue that does not constitute
a genuine issue for trial. 28[Emphasis supplied]
It bears noting that in Wood Technology, the RTC originally rendered a judgment on the pleadings but was corrected by t
he Court to be a summary judgment because of the issue presented by the affirmative defense raised therein. In the said
case, the Court, nonetheless, ruled in favor of the complainant therein because there was no genuine issue raised.
Similar to Wood Technology, the judgment rendered by the RTC in this case was a summary judgment, not a judgment o
n the pleadings, because Comglasco' s answer raised an affirmative defense. Nevertheless, no genuine issue was raised
because there is no issue of fact which needs presentation of evidence, and the affirmative defense Comglasco invoked is
inapplicable in the case at bench.
A full blown trial would needlessly prolong the proceedings where a summary judgment would suffice. It is undisputed that
Comglasco removed its merchandise from the leased premises and stopped paying rentals thereafter. Thus, there remains
no question of fact which must be resolved in trial. What is to be resolved is whether Comglasco was justified in treating t
he lease contract terminated due to the economic circumstances then prevalent.
To evade responsibility, Comglasco explained that by virtue of Article 1267, it was released from the lease contract. It cite
d the existing global and regional economic crisis for its inability to comply with its obligation.
Comglasco's position fails to impress because Article 1267 applies only to obligations to do and not to obligations to give.
Thus, in Philippine National Construction Corporation v. Court of Appeals, 29 the Court expounded:
Petitioner cannot, however, successfully take refuge in the said article, since it is applicable only to obligations "
to do," and not to obligations "to give." An obligation "to do" includes all kinds of work or service; while an obligation "
to give" is a prestation which consists in the delivery of a movable or an immovable thing in order to create a real right, o
r for the use of the recipient, or for its simple possession, or in order to return it to its owner.
The obligation to pay rentals or deliver the thing in a contract of lease falls within the prestation "to give"; xxx
The principle of rebus sic stantibus neither fits in with the facts of the case. Under this theory, the parties stipulate in the l
ght of certain prevailing conditions, and once these conditions cease to exist, the contract also ceases to exist. xxx
This article, which enunciates the doctrine of unforeseen events, is not, however, an absolute application of the principle of
rebus sic stantibus, which would endanger the security of contractual relations. The parties to the contract must be presu
med to have assumed the risks of unfavorable developments. It is therefore only in absolutely exceptional changes of
circumstances that equity demands assistance for the debtor. 30 [Emphases and Underscoring supplied]
Considering that Comglasco' s obligation of paying rent is not an obligation to do, it could not rightfully invoke Article 1267
of the Civil Code. Even so, its position is still without merit as financial struggles due to an economic crisis is not enough
reason for the courts to grant reprieve from contractual obligations.
In COMGLASCO Corporation/Aguila Glass v. Santos Car Check Center Corporation,31the Court ruled that the economic cri
sis which may have caused therein petitioner's financial problems is not an absolute exceptional change of circumstances t
hat equity demands assistance for the debtor. It is noteworthy that Comglasco was also the petitioner in the abovemention
ed case, where it also involved Article 1267 to pre-terminate the lease contract.
Thus, the RTC was correct in ordering Comglasco to pay the unpaid rentals because the affirmative defense raised by it
was insufficient to free it from its obligations under the lease contract. In addition, Iloilo Jar is entitled to attorney's fees be
cause it incurred expenses to protect its interest. The trial court, however, erred in awarding exemplary damages and litiga
tion expenses.
Exemplary damages may be recovered in contractual obligations if the defendant acted in wanton or fraudulent, reckless,
oppressive or malevolent manner. 32 As discussed, Comglasco defaulted in its obligation to pay the rentals by reason of it
s erroneous belief that the lease contract was preterminated because of the economic crisis. The same, however, does no
t prove that Comglasco acted in wanton or fraudulent, reckless, oppressive or malevolent manner.33 On the other hand, att
orney's fees may be recovered in case the plaintiff was compelled to incur expenses to protect his interest because of the
defendant's acts or omissions.
Further, the interest rate should be modified pursuant to recent jurisprudence.34 The monetary awards shall be subject to
12% interest per annum until June 30, 2013 and 6% per annum from July 1, 2013 until fully satisfied.

A Final Note
A lawyer, as an officer of the court, is expected to observe utmost respect and deference to the Court. As such, he must
ensure that he faithfully complies with rules of procedure especially since they are in place to aid in the administration of
ustice. This duty to be subservient to the rules of procedure is manifested in numerous provisions 35 of the Code of Profes
sional Responsibility.
The Court admonishes Iloilo Jar' counsel for repeatedly failing to comply with the rules of procedure and court processes.
First, he belatedly filed the petition for review. Second, Iloilo Jar's counsel failed to file its Reply within the time originally a
lotted prompting the Court to require him to show cause why he should not be held in contempt. 36 Personal obligations,
heavy workload does not excuse a lawyer from complying with his obligations particularly in timely filing the pleadings requ
red by the Court.

WHEREFORE, the January 30, 2015 Decision and June 17, 2015 Resolution of the Court of Appeals are REVERSED and
SET ASIDE. The February 17, 2005 Amended Order of the Regional Trial Court, Branch 3 7, Iloilo City, is AFFIRMED W
ITH MODIFCATION in that the award of exemplary damages and litigation expenses is DELETED. The monetary award s
hall be subject to 12% per annum until June 30, 2013 and 6% per annum from July 1, 2013 until fully satisfied.
Atty. Raleigh Silvino L. Manikan is ADMONISHED for his repeated failure to observe the rules of procedure, with a WARN
ING that repetition to strictly comply with procedural rules shall be dealt with more severely.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

DIOSDADO M. PERALTA MARVIC M.V.F. LEONEN

Associate Justice Associate Justice

FRANCIS H. JARDELEZA*
Associate Justice
A T T E S T A T I O N
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.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant to the Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conc
usions 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.
MARIA LOURDES P.A. SERENO
Chief Justice
 Footnotes
* Per Special Order No. 2416 dated January 4, 2017.
1Penned by Associate Justice Pamela Ann Abella Maxino with Associate Justice Gabriel T. Ingles and Associate Justice
Renato C. Francisco, concurring: rollo, pp.47-57.
2 Id. at 41-44.
3 Penned by Judge Jose D. Azarraga, id. at 104-107.

4 Id. at 22.
5 Id. at 23.
6 Id.
7 Id. at 87-90.

8Article 1267. When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the
obligor may also be released therefrom, in whole or in part.
9 Id. at 91-96.
10 Id. at 97-100.
11 Id. at 101-103.
12 Id. at 56-57.

13 Id. at 26.
14 Id. at 199-205.
15 Id. 212-229.
16 Magsino v. de Ocampo, G.R. No. 166944. August 18, 2014, 733 SCRA 202, 210.

17 The petition shall be filed within fifteen (15) days from notice of the judgment or final order or resolution appealed from,
or of the denial of the petitioner's motion for new trial or reconsideration filed in due time after notice of the judgment. On
motion duly filed and served, with full payment of the docket and other lawful fees and the deposit for costs before the ex
piration of the reglementary period, the Supreme Court may for justifiable reasons grant an extension of thirty (30) days on
y within which to file the petition.
18 Rollo, p. 17.
19 Id. 176-181.

20 Id. at 190.
21 Id. at 33.
22 Montajes v. People, 684 Phil. I, 10-11 (2012).
23 700 Phil. 575 (2012).

24 Id. at 581-582.
25 671 Phil. 662 (2011).
26 Id. at 682-683.
 27 492 Phil. 106 (2005).
28 Id. at 115-116.
29 338 Phil. 691 (I 997).

30 Id. at 700-701.
31 G.R. No. 2029S9, March 25, 2015, 754 SCRA 481.
32 Article 2208(2) of the Civil Code.
33 Ramos v. China Southern Airlines Co. Ltd., G.R. No. 213418, September 21, 2016.

34 Oyster Plaza Hotel v. Melivo, G.R. No. 217455, October 5, 2016, citing Nacar v. Gallery Frames, 716 Phil. 267 (2013).
35 Canon I, Rule 10.03, Canon 12, Rule 12.03, Rule 18.02 and Rule 18.03.
36 Rollo, p. 211.
The Lawphil Project - Arellano Law Foundation

Today is Sunday, September 15, 2019

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION
G.R. No. 181676 June 11, 2014
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION,Petitioner,
vs.
SANNAEDLE CO., LTD., Respondent.

D E C I S I O N
PERALTA, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the De
cision1 and Resolution,2 dated April 25, 2006 and February 6, 2008, respectively, of the Court of Appeals (CA) in CA-G.R.
CV No. 71916.
The facts follow.
This case stemmed from a Complaint3 for Sum of Money filed by respondent against petitioner. The complaint alleged that
petitioner and respondent executed a Memorandum of Agreement wherein respondent was engaged to supply and erect i
nsulated panel systems at various pavilions at the Philippine Centennial Exposition Theme Park, specifically for the Phase
I Project, for an agreed amount of US$3,745,287.94.
Pursuant to the Memorandum of Agreement, petitioner made various payments amounting to US$3,129,667.32 leaving a b
alance of US$615,620.33. Respondent claims that it made several written demands for petitioner to pay the said balance,
but the latter continuously refused to heed its plea.

Thereafter, petitioner filed its Answer with Counterclaim.4

Respondent then moved for judgment on the pleadings on the ground that the Answer admitted all material allegations of t
he Complaint and, therefore, failed to tender an issue. Thus, respondent deems that petitioner’s Answer, in effect, admitted
the existence of the Memorandum of Agreement and its failure to pay the balance despite repeated demands.
In a Judgment5 dated October 6, 2000, the Regional Trial Court (RTC) of Makati City rendered judgment in favor of respo
ndent. Pertinent portions of said decision read:
In claiming that the Answer of the [petitioner] failed to tender an issue, [respondent] argued that the present action is for c
ollection of the amount of US$615,620.33 with interest at the rate of 12% per annum, which amount represents the balanc
e of the payment under the Memorandum of Agreement, Annex B of the Complaint entered into between [respondent] and
[petitioner] which was not denied in the Answer. [Respondent] further claimed that in a letter dated February 2, 2000, Ann
ex C of the Complaint, it demanded payment of the said amount of US$615,620.33 and in reply thereto, [petitioner] stated
n part –
"We refer to your letter dated February 2, 2000 regarding the US$2,635,333.00 balance unpaid claim of SANNAEDLE.
x x x x x x x x x

2. Phase I Contract
While we recognize being obligated to this amount, we do not have at the moment the capability to pay it. This is becaus
e our financial position has been severely affected by the freezing of the government of all our collectibles on EXPO proje
cts including the ₱80M (approx. US$2.0M) from DPWH intended to pay the cost increment of reverting back the use of Sa
nnaedle in Phase I.
x x x x x x x x x
The partial amount of about US$1.4M paid by ASIAKONSTRUKT to Sannaedle in excess of its allocated budget of US$1.
745M actually came from its own source and initiatives. This effort made by ASIAKONSTRUKT significantly reduced the b
alance due Sannaedle to only US$615,620.33.

x x x x x x x x x
The Court notes that in the Answer with Counterclaim of the [petitioner], the execution of the Memorandum of Agreement,
Annex B of the Complaint was admitted (paragraph 13, Answer). Further, it did not deny specifically the claim of the [resp
ondent] of being entitled to collect the said amount of US$615,620.33.6
x x x x

WHEREFORE, judgment is rendered in favor [of] the [respondent] and [petitioner] is ordered to pay [respondent] the amou
nt of US $615,620.33 with interest thereon at the rate of 12% per annum from February 2, 2000 until fully paid.
No pronouncement as to costs.
SO ORDERED.7
Petitioner filed a motion for reconsideration against said decision. However, the same was denied in an Order 8 dated Dece
mber 13, 2000.

Thus, petitioner filed an appeal before the CA.

On April 25, 2006, the CA rendered its assailed Decision which disposed as follows:
WHEREFORE, the instant appeal is DISMISSED. The judgment of the Regional Trial Court of Makati City, Branch 138, da
ted October 6, 2000, is hereby AFFIRMED.
Costs against the [petitioner].
SO ORDERED.9

Petitioner filed a motion for reconsideration, but the CA denied it in a Resolution dated February 6, 2008.
Hence, the present petition wherein petitioner raises this sole issue for our resolution: whether or not judgment on the plea
dings is proper.

Petitioner contends that the judgment on the pleadings is not proper, because it raised special and affirmative defenses in
ts Answer. It asserts that with this specific denial, a genuine issue of fact had been joined to the extent that a judgment o
n the pleadings could not be made.
For its part, respondent counters that petitioner’s Answer admitted the material allegations of its complaint regarding the ca
use of action, which is collection of sum of money. Respondent emphasizes that assuming petitioner’s defense of respond
ent’s lack of capacity to sue has a leg to stand on, still, the same cannot prevent respondent from seeking the collection
of petitioner’s unpaid balance.
The Court finds the petition bereft of merit.
Judgment on the pleadings is governed by Section 1, Rule 34 of the 1997 Rules of Civil Procedure which reads:

Sec. 1. Judgment on the pleadings. – Where an answer fails to tender an issue, or otherwise admits the material allegatio
ns of the adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading. However, in
actions for declaration of nullity or annulment of marriage or for legal separation, the material facts alleged in the complain
t shall always be proved.10

Judgment on the pleadings is proper when an answer fails to tender an issue, or otherwise admits the material allegations
of the adverse party’s pleading. An answer fails to tender an issue if it does not comply with the requirements of a specif
c denial as set out in Sections 811 and 10,12 Rule 8 of the 1997 Rules of Civil Procedure, resulting in the admission of th
e material allegations of the adverse party’s pleadings.13
This rule is supported by the Court’s ruling in Mongao v. Pryce Properties Corporation 14 wherein it was held that "judgmen
t on the pleadings is governed by Section 1,Rule 34 of the 1997 Rules of Civil Procedure, essentially a restatement of Se
ction 1, Rule 19 of the 1964 Rules of Court then applicable to the proceedings before the trial court. Section 1, Rule 19 o
f the Rules of Court provides that where an answer fails to tender an issue, or otherwise admits the material allegations of
the adverse party’s pleading, the court may, on motion of that party, direct judgment on such pleading. The answer would
fail to tender an issue, of course, if it does not comply with the requirements for a specific denial set out in Section 10 (o
r Section 8) of Rule 8; and it would admit the material allegations of the adverse party’s pleadings not only where it expre
ssly confesses the truthfulness thereof but also if it omits to deal with them at all."15
Further, in First Leverage and Services Group, Inc. v. Solid Builders, Inc., 16 this Court held that where a motion for judgm
ent on the pleadings is filed, the essential question is whether there are issues generated by the pleadings. In a proper ca
se for judgment on the pleadings, there is no ostensible issue at all because of the failure of the defending party’s answer
to raise an issue. The answer would fail to tender an issue, of course, if it does not deny the material allegations in the
complaint or admits said material allegations of the adverse party’s pleadings by confessing the truthfulness thereof and/or
omitting to deal with them at all.17
Here, it is irrefutable that petitioner acknowledged having entered into a Memorandum of Agreement with respondent and t
hat it still has an unpaid balance of US$615,620.33.

We note that respondent’s complaint for a sum of money is based mainly on the alleged failure of petitioner to pay the ba
ance of US$615,620.33 under the Memorandum of Agreement. Quoting petitioner’s Answer, it is obvious that it admitted t
he foregoing material allegations in paragraphs 3, 4 and 5 of the complaint, which states as follows:
3. The [Petitioner] ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION ("ASIAKONSTRUKT" for brevity), is a
corporation duly incorporated under the laws of the Philippines, with capacity to sue and be sued, and with business addre
ss at the Second Floor, Union Ajinomoto Building, Sen. Gil Puyat Avenue, Makati City, and within the jurisdiction of this H
onorable Court; and where it may be served with summons and other court processes of this Honorable Court,
4. That the [respondent] and the [petitioner] entered into a Memorandum of Agreement in Makati City, within the jurisdictio
n of this Honorable Court, dated February 17, 1998, wherein the [Petitioner] corporation agreed with and ordered the herei
n [Respondent], as Contractor, to design and install INSUPANEL SYSTEMS at various pavilions, etc. at expo projects site;
and specifically for the Phase I project at an agreed amount of US$3,745,287.94(Par. 2.1). A xerox copy of this Memoran
dum of Agreement dated February 17, 1998 between [Respondent] and [Petitioner] consisting of six (6) pages, is attached
hereto as Annex B and made an integral part hereof.
5. That pursuant to this Memorandum of Agreement (Exhibit B)and contract price of US$3,745,287.94, various payments h
ave been made by [Petitioner] Corporation on this Phase I project totaling US$3,129,667.32, thus leaving a balance of US
$615,620.33.18
While petitioner allegedly raised affirmative defenses, i.e., defect in the certification of non-forum shopping, no legal capacit
y to sue and fortuitous event, the same cannot still bar respondent from seeking the collection of the unpaid balance. Oth
er than these affirmative defenses, petitioner’s denial neither made a specific denial that a Memorandum of Agreement wa
s perfected nor did it contest the genuineness and due execution of said agreement.

We, therefore, sustain the CA and quote with approval the well-reasoned findings and conclusions of the appellate court c
ontained in its Decision, to wit:

The [respondent’s] cause of action for collection of Sum of Money is founded mainly on the Memorandum of Agreement v
alidly executed by both parties.
First, the allegations in the [petitioner’s] Answer do not make out a specific denial that a Memorandum of Agreement was
perfected between the parties. Second, the [respondent] does not contest the due execution and/or genuineness of said M
emorandum of Agreement. In fact, paragraph 13 of the Answer categorically admits paragraphs 4 and 5 of the Complaint.
In its Answer, the [petitioner] offered the following defenses, to wit:
19. The complaint should be dismissed on the ground that [respondent's J certification of non-forum shopping is defective. 1âwphi1

Rule 7, Section 5 of the 1997 Revised Rules of Civil Procedure ... xxx xxx xxx
22. [Respondent] has no legal capacity to sue, as it is a foreign corporation doing business in the Philippines without a val
d license. xxx xxx xxx

27. The unexpected default of FCCC on its obligations to [petitioner} on account of the Senate Blue Ribbon Committee inv
estigation was a fortuitous event which suspended, if not extinguished [petitioner's} obligation to FCCC.

In essence, the [petitioner] justifies its refusal to tender payment of the balance of US$615,620.33 to the [respondent], to t
he failure of the First Centennial Clark Corporation (FCCC) to comply with its obligations to ASIAKONSTRUKT which [it] c
haracterizes as a fortuitous event.
The defenses raised by [petitioner] cannot prevent the [respondent] from seeking the collection of the amount of US$615,6
20.33. The express terms of the Memorandum of Agreement, the genuineness and due execution of which are not denied
by the [petitioner]. It cannot assert the said defenses in order to resist the [respondent's] claim for the aforesaid sum of m
oney, especially where it has been sufficiently shown by the allegations of the Complaint and the Answer that the [petition
er] is clearly liable for the payment thereof.19

WHEREFORE, the instant petition is DENIED. The Decision dated April 25, 2006 and Resolution dated February 6, 2008
of the Court of Appeals are hereby AFFIRMED.

SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson

MARTIN S. VILLARAMA, JR.* JOSE CATRAL MENDOZA

Associate Justice Associate Justice

MARVIC MARIO VICTOR F. LEONEN

Associate Justice
A T T E S T A T I O N

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.
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson, Third Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclus
ons in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of t
he Court's Division.
MARIA LOURDES P. A. SERENO
Chief Justice
Footnotes
* Designated Acting Member, per Special Order No. 1691 dated May 22, 2014.
1Penned by Associate Justice Amelita G. Tolentino, with Associate Justices Juan Q. Enriquez, Jr. and Vicente S. E. Velo
so, concurring; rollo, pp. 23-33.

2 Id. at 35-37.
3 Id. at 39-45.
4 Id. at 79-88.
5 Id. at 100-103.
6 Id. at 100-101.
7 Id. at 103.
 8 Id. at 113.
9 Id. at 32. (Emphasis in the original)
10 Emphasis supplied.

11 Section 8. How to contest such documents. – When an action or defense is founded upon a written instrument, copied i
n or attached to the corresponding pleading as provided in the preceding section, the genuineness and due execution of t
he instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth wha
t he claims to be the facts, but the requirement of an oath does not apply when the adverse party does not appear to be
a party to the instrument or when compliance with an order for an inspection of the original instrument is refused.
12 Section 10. Specific denial. – A defendant must specify each material allegation of fact the truth of which he does not a
dmit and, whenever practicable, shall set forth the substance of the matters upon which he relies to support his denial. W
here a defendant desires to deny only a part of an averment, he shall specify so much of it as is true and material and s
hall deny only the remainder. Where a defendant is without knowledge or information sufficient to form a belief as to the tr
uth of a material averment made to the complaint, he shall so state, and this shall have the effect of a denial.
13Government Service Insurance System v. Prudential Guarantee and Assurance, Inc., G.R. Nos. 165585 and 176982, No
vember 20, 2013.
14 504 Phil. 472 (2005).
15 Id. at 480. (Citations omitted)
16 G.R. No. 155680, July 2, 2012, 675 SCRA 407.
17 Id. at 418.
18 Rollo, pp. 40-41. (Emphasis supplied)
19 Id. at 31-32. (Italics in the original)
The Lawphil Project - Arellano Law Foundation

G.R. No. 190276

Republic of the Philippines
SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 190276 April 2, 2014
EUFROCINA NIEVES, as represented by her attorney-in-fact, LA
ZARO VILLAROSA, JR.,Petitioner,
vs.
ERNESTO DULDULAO and FELIPE PAJARILLO,Respondents.
D E C I S I O N
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decisi
on2 dated June 4, 2009 and the Resolution3 dated November
5, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 105
438 which set aside the Decision4 dated December 13, 2007
and the Resolution5 dated March 13, 2008 of the Department
of Agrarian Reform Adjudication Board (DARAB) in DARAB Ca
se No. 14727, holding that the tenancy relations between petit
ioner Eufrocina Nieves (petitioner) and respondents Ernesto Du
ldulao (Ernesto) and Felipe Pajarillo (Felipe) remain valid and e
nforceable.
The Facts
Petitioner is the owner of a piece of agricultural rice land wit
h an area of six (6) hectares, more or less, located at Dulong
Bayan, Quezon, Nueva Ecija (subject land). Ernesto and Felipe
(respondents) are tenants and cultivators of the subject land6
who are obligated to each pay leasehold rentals of 45 cavans
 of palay for each cropping season,7 one in May and the oth
er in December.8
Claiming that Ernesto and Felipe failed to pay their leasehold
rentals since 1985 which had accumulated to 446.5 and 327 c
avans of palay, respectively, petitioner filed a petition on Marc
h 8, 2006 before the DARAB Office of the Provincial Adjudicat
or (PARAD), seeking the ejectment of respondents from the s
ubject land for non-payment of rentals.9
Prior to the filing of the case, a mediation was conducted bef
ore the Office of the Municipal Agrarian Reform Officer and L
egal Division in 2005 where respondents admitted being in de
fault in the payment of leasehold rentals equivalent to 200 an
d 327 cavans of palay, respectively, and promised to pay the
same.10 Subsequently, however, in his answer to the petition,
Ernesto claimed that he merely inherited a portion of the bac
k leasehold rentals from his deceased father, Eugenio Duldula
o, but proposed to pay the arrearages in four (4) installments
beginning the dayatan cropping season in May 2006.11 On t
he other hand, Felipe denied incurring any back leasehold ren
tals, but at the same time proposed to pay whatever there m
ay be in six (6) installments, also beginning the dayatan cropp
ing season in May 2006.12 Both respondents manifested their
lack of intention to renege on their obligations to pay the lea
sehold rentals due, explaining that the supervening calamities,
such as the flashfloods and typhoons that affected the area p
revented them from complying.13
The PARAD's Ruling
In a Decision14 dated July 6, 2006, the PARAD declared that t
he tenancy relations between the parties had been severed by
respondents’ failure to pay their back leasehold rentals, there
by ordering them to vacate the subject land and fulfill their r
ent obligations.
With respect to Ernesto, the PARAD did not find merit in his
claim that the obligation of his father for back leasehold rent
als, amounting to 446 cavans of palay, had been extinguished
by his death. It held that upon the death of the leaseholder,
the leasehold relationship continues between the agricultural l
essor and the surviving spouse or next of kin of the decease
d as provided by law; hence, the leasehold rent obligations su
bsist and should be paid.15
As for Felipe, the PARAD found that his unpaid leasehold rent
als had accumulated to 327 cavans of palay, and that his refu
sal to pay was willful and deliberate, warranting his ejectment
from the subject land.16
Dissatisfied, respondents elevated the case on appeal.
The DARAB Proceedings
On April 16, 2007, the DARAB issued an Order17 deputizing t
he DARAB Provincial Sheriff of Nueva Ecija and the Municipal
Agrarian Reform Officer of Talavera, Nueva Ecija to supervise
the harvest of palay over the subject land. However, when th
e Sheriff proceeded to implement the same on April 27, 2007
, he found that the harvest had been completed and the pro
ceeds therefrom had been used to pay respondents’ other in
debtedness.18
On December 13, 2007, the DARAB issued a Decision19affirmin
g the findings of the PARAD that indeed, respondents were r
emiss in paying their leasehold rentals and that such omission
was willful and deliberate, justifying their ejectment from the
subject land.20
Unperturbed, respondents elevated the matter to the CA.
The CA Ruling
In a Decision21 dated June 4, 2009, the CA granted responde
nts’ petition for review, thereby reversing the ruling of the DA
RAB terminating the tenancy relations of the parties. While it
found respondents to have been remiss in the payment of th
eir leasehold rentals, it held that the omission was not deliber
ate or willful. Notwithstanding the DARAB’s findings with respe
ct to the amounts of respondents’ rental arrearages, the CA g
ave full credence to their assertions and observed that Felipe
failed to pay only 293 cavans of palay or 16.28% of the total
leasehold rentals due from 1985 to 2005, while Ernesto failed
to pay only 107.5 cavans of palay or 6% of the total leasehol
d rentals.22Relying on the Court’s ruling in the case of De Ta
nedo v. De La Cruz23 (De Tanedo), the CA then concluded t
hat respondents substantially complied with their obligation to
pay leasehold rentals, and, hence, could not be ejected from
the subject land despite their failure to meet their rent obliga
tions as they became due.
Aggrieved, petitioner filed a motion for reconsideration which
was, however, denied by the CA in a Resolution24 dated Nov
ember 5, 2009, hence this petition.
The Issue Before the Court
The sole issue for the Court’s resolution is whether or not the
CA correctly reversed the DARAB’s ruling ejecting respondent
s from the subject land.
The Court’s Ruling
The petition is meritorious.
Agricultural lessees, being entitled to security of tenure, may
be ejected from their landholding only on the grounds provid
ed by law.25 These grounds – the existence of which is to be
proven by the agricultural lessor in a particular case26 – are
enumerated in Section 36 of Republic Act No. (RA) 3844,27 o
therwise known as the "Agricultural Land Reform Code," which
read as follows:
Section 36. Possession of Landholding; Exceptions. - Notwithst
anding any agreement as to the period or future surrender, o
f the land, an agricultural lessee shall continue in the enjoyme
nt and possession of his landholding except when his disposs
ession has been authorized by the Court in a judgment that i
s final and executory if after due hearing it is shown that:
(1) The landholding is declared by the department head upon
recommendation of the National Planning Commission to be s
uited for residential, commercial, industrial or some other urba
n purposes: Provided, That the agricultural lessee shall be enti
tled to disturbance compensation equivalent to five times the
average of the gross harvests on his landholding during the l
ast five preceding calendar years; (as amended by RA 6389)
(2) The agricultural lessee failed to substantially comply with a
ny of the terms and conditions of the contract or any of the
provisions of this Code unless his failure is caused by fortuito
us event or force majeure;
(3) The agricultural lessee planted crops or used the landholdi
ng for a purpose other than what had been previously agree
d upon;
(4) The agricultural lessee failed to adopt proven farm practic
es as determined under paragraph 3 of Section twenty-nine;
(5) The land or other substantial permanent improvement ther
eon is substantially damaged or destroyed or has unreasonabl
y deteriorated through the fault or negligence of the agricultu
ral 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 sh
all not be a ground for dispossession, although the obligation
to pay the rental due that particular crop is not thereby exti
nguished; or
(7) The lessee employed a sub-lessee on his landholding in vi
olation of the terms of paragraph 2 of Section twenty-seven.
(Emphases supplied)
To eject the agricultural lessee for failure to pay the leasehold
rentals under item 6 of the above-cited provision, jurispruden
ce instructs that the same must be willful and deliberate in or
der to warrant the agricultural lessee’s dispossession of the la
nd that he tills. As explained in the case of Sta. Ana v. Spous
es Carpo:28
Under Section 37 of Republic Act No. 3844, as amended, cou
pled with the fact that the respondents are the complainants
themselves, the burden of proof to show the existence of a l
awful cause for the ejectment of the petitioner as an agricultu
ral lessee rests upon the respondents as ag-ricultural lessors.
This proceeds from the principle that a tenancy relation-ship,
once established, entitles the tenant to security of tenure. Peti
tioner can only be ejected from the agricultural landholding o
n grounds provided by law. Section 36 of the same law perti
nently provides:
Sec. 36. Possession of Landholding; Exceptions. – Notwithstand
ing any agreement as to the period or future surrender, of th
e land, an agricultural lessee shall continue in the enjoyment
and possession of his landholding except when his dispossessi
on has been authorized by the Court in a judgment that is fi
nal and executory if after due hearing it is shown that:
x x x x
(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 sh
all not be a ground for disposses-sion, although the obligatio
n to pay the rental due that particular crop is not thereby ex
tinguished;
x x x x
Respondents failed to discharge such burden. The agricultural
tenant's failure to pay the lease rentals must be willful and de
liberate in order to warrant his dispossession of the land that
he tills.
Petitioner’s counsel opines that there appears to be no decisi
on by this Court on the matter; he thus submits that we sho
uld use the CA decision in Cabero v. Caturna. This is not corr
ect. In an En Banc Decision by this Court in Roxas y Cia v. C
abatuando, et al.,29 we held that under our law and jurisprud
ence, mere failure of a tenant to pay the landholder's share d
oes not necessarily give the latter the right to eject the forme
r when there is lack of deliberate intent on the part of the te
nant to pay. This ruling has not been overturned.
x x x x30 (Emphases supplied; citations omitted)
In the present case, petitioner seeks the dispossession of resp
ondents from the subject land on the ground of non-paymen
t of leasehold rentals based on item 6, Section 36 of RA 384
4. While respondents indeed admit that they failed to pay the
full amount of their respective leasehold rentals as they beco
me due, they claim that their default was on account of the
debilitating effects of calamities like flashfloods and typhoons.
This latter assertion is a defense provided under the same pr
ovision which, if successfully established, allows the agricultural
lessee to retain possession of his landholding. The records of
this case are, however, bereft of any showing that the afores
tated claim was substantiated by any evidence tending to pro
ve the same. Keeping in mind that bare allegations, unsubstan
tiated by evidence, are not equivalent to proof,31 the Court c
annot therefore lend any credence to respondents’ fortuitous
event defense.
Respondents’ failure to pay leasehold rentals to the landowner
also appears to have been willful and deliberate. They, in fac
t, do not deny – and therefore admit32 – the landowner’s ass
ertion that their rental arrearages have accumulated over a co
nsiderable length of time, i.e., from 1985 to 2005 but rely on
the fortuitous event defense, which as above-mentioned, cann
ot herein be sustained. In the case of Antonio v. Manahan33
(Antonio), the Court, notwithstanding the tenants’ failure to pr
ove their own fortuitous event theory, pronounced that their f
ailure to pay the leasehold rentals was not willful and delibera
te. The records in said case showed that the landowner actual
ly rejected the rentals, which amounted only to 2 years-worth
of arrearages, i.e., 1993 and 2001, tendered by the tenants the
rein due to their supposed poor quality. This circumstance wa
s taken by the Court together with the fact that said tenants
even exerted efforts to make up for the rejected rentals throu
gh the payments made for the other years. In another case, i.
e., Roxas v. Cabatuando34 (Roxas), the Court similarly held th
at the tenants therein did not willfully and deliberately fail to
pay their leasehold rentals since they had serious doubts as t
o the legality of their contract with respect to their non-sharin
g in the coconut produce, which thus prompted them to with
hold their remittances in good faith. In contrast to Antonio an
d Roxas, the landowner in this case never rejected any rental
payment duly tendered by respondents or their predecessors-i
n-interest. Neither was the legality of their agricultural leasehol
d contract with the landowner ever put into issue so as to int
imate that they merely withheld their remittances in good fait
h. Thus, with the fortuitous event defense taken out of the eq
uation, and considering the examples in Antonio and Roxas w
hereby the elements of willfulness and deliberateness were no
t found to have been established, the Court is impelled to ag
ree with the DARAB that respondents herein willfully and deli
berately chose not to pay their leasehold rentals to the lando
wner when they fell due. The term "willful" means "voluntary
and intentional, but not necessarily malicious,"35 while the ter
m "deliberate" means that the act or omission is "intentional,"
"premeditated" or "fully considered."36 These qualities the lan
downer herein had successfully established in relation to respo
ndents’ default in this case. Accordingly, their dispossession fr
om the subject land is warranted under the law.
At this juncture, the Court finds it apt to clarify that responde
nts’ purported substantial compliance – as erroneously conside
red by the CA to justify its ruling against their dispossession
– is applicable only under the parameters of item 2, Section
36 of RA 3844, which is a separate and distinct provision fro
m item 6 thereof. Item 2, Section 36 of RA 3844 applies to c
ases where the agricultural lessee failed to substantially compl
y with any of the terms and conditions of the contract or any
of the provisions of the Agricultural Land Reform Code, unle
ss his failure is caused by fortuitous event or force majeure;
whereas item 6 refers to cases where the agricultural lessee d
oes not pay the leasehold rental when it falls due, provided t
hat the failure to pay is not due to crop failure to the extent
of seventy-five per centum as a result of a fortuitous event.
As the present dispute involves the non-payment of leasehold
rentals, it is item 6 – and not item 2 – of the same provision
which should apply. Examining the text of item 6, there is n
o indication that the agricultural lessee’s substantial complianc
e with his rent obligations could be raised as a defense again
st his dispossession. On the other hand, item 2 states that it i
s only the agricultural lessee’s "failure to substantially comply"
with the terms and conditions of the agricultural leasehold co
ntract or the provisions of the Agricultural Land Reform Code
which is deemed as a ground for dispossession. Thus, it may
be reasonably deduced that the agricultural lessee’s substantial
compliance negates the existence of the ground of disposses
sion provided under item 2. While the failure to pay leasehol
d rentals may be construed to fall under the general phraseol
ogy of item 2 – that is a form of non-compliance "with any
of the terms and conditions of the contract or any of the pro
visions of this Code,"37 it is a long-standing rule in statutory
construction that general legislation must give way to special l
egislation on the same subject, and generally is so interpreted
as to embrace only cases in which the special provisions are
not applicable - lex specialis derogat generali.38In other word
s, where two statutes are of equal theoretical application to a
particular case, the one specially designed therefor should pre
vail.39 Thus, consistent with this principle, the Court so holds
that cases covering an agricultural lessee’s non-payment of lea
sehold rentals should be examined under the parameters of it
em 6, Section 36 of RA 3844 and not under item 2 of the sa
me provision which applies to other violations of the agricultu
ral leasehold contract or the provisions of the Agricultural Lan
d Reform Code, excluding the failure to pay rent. In these latt
er cases, substantial compliance may – as above-explained –
be raised as a defense against dispossession.
In this relation, the Court observes that the CA’s reliance in t
he De Tanedo ruling was altogether misplaced for the simple
reason that the substantial compliance defense in that case w
as actually invoked against a violation of a peculiar term and
condition of the parties’ agricultural leasehold contract, particul
arly requiring the payment of advance rentals "pursuant to [th
e agricultural lessee’s] agreement with the landholders,"40 and
not his mere failure to pay the leasehold rentals regularly ac
cruing within a particular cropping season, as in this case.
In fact, the Court, in De Tanedo, applied the substantial comp
liance defense only in relation to Section 50(b) of RA 1199,41
otherwise known as the "Agricultural Tenancy Act of the Philip
pines," which is the predecessor provision of item 2, Section 3
6 of RA 3844. Section 50(b) of RA 1199 states that:
Section 50. Causes for the Dispossession of a Tenant. - Any o
f the following shall be a sufficient cause for the dispossessio
n of a tenant from his holdings:
x x x x
(b) When the current tenant violates or fails to comply with a
ny of the terms and conditions of the contract or any of the
provisions of this Act: Provided, however, That this subsection
shall not apply when the tenant has substantially complied wit
h the contract or with the provisions of this Act.
On other hand, the predecessor provision of item 6, Section
36 of RA 3844 is Section 50(c) of RA 1199, which reads as fol
lows:
Section 50. Causes for the Dispossession of a Tenant. - Any o
f the following shall be a sufficient cause for the dispossessio
n of a tenant from his holdings:
x x x x
(c) The tenant's failure to pay the agreed rental or to deliver
the landholder's share: Provided, however, That this shall not
apply when the tenant's failure is caused by a fortuitous even
t or force majeure.
The Court’s application of the substantial compliance defense i
n relation to Section 50(b) of RA 1199, as well as the agricult
ural lessors’ failure to actually raise in their ejectment complai
nt the ground of failure to pay leasehold rentals, is evident fr
om the following excerpt of the De Tanedo Decision:42
In the decision appealed from as well as in the resolution of
the Court of Appeals forwarding this case to us, it has been f
ound that the rentals for the agricultural years 1958 to 1961, i
nclusive, had all been fully satisfied, although not in advance
as agreed upon. This is admitted by the petitioners-appellants.
We agree with the Court a quo that the delay in payment d
oes not justify the drastic remedy of ejectment, considering S
ection 50(b) of Republic Act 1199, which states that while viola
tion by the tenant of any of the terms and conditions of the
tenancy contract shall be a ground to eject him, yet this prov
ision shall not apply where there has been substantial complia
nce. With reference to the rental for the crop-year 1962-63, fa
ilure to pay the same was not alleged in the original or ame
nded complaints below, and hence may not be considered for
the first time on appeal. (Emphases and underscoring supplie
d)
In any case, the Court never mentioned Section 50(c) of RA 1
199 in De Tanedo.1âwphi1Thus, a reading thereof only shores
up the point earlier explained that the substantial compliance
defense is only available in cases where the ground for dispo
ssession is the agricultural lessee’s violation of the terms and
conditions of the agricultural leasehold contract or the provisi
ons of the Agricultural Land Reform Code, and not in cases
where the ground for dispossession is the agricultural lessee's
failure to pay rent. Verily, agricultural leasehold rentals, as in r
entals in ordinary lease contracts, constitute fixed payments w
hich the lessor has both the right and expectation to promptl
y receive in consideration of being deprived of the full enjoy
ment and possession of his property. Unless caused by a fort
uitous event, or reprieved by virtue of a finding that the non-
payment of leasehold rentals was not actually willful and delib
erate, there appears to be no credible justification, both in re
ason and in law, to deny the agricultural lessor the right to r
ecover his property and thereby eject the agricultural lessee i
n the event that the latter fails to comply with his rent obliga
tions as they fall due. Indeed, while the Constitution comman
ds the government to tilt the balance in favor of the poor an
d the underprivileged whenever doubt arises in the interpretat
ion of the law, the jural postulates of social justice should not
sanction any false sympathy towards a certain class, nor be
used to deny the landowner's rights,43 as in this case.
In fine, the Court affirms the DARAB Decision granting the pe
tition for dispossession with the modification, however, on the
amount of rental arrearages to be paid considering that an a
ction to enforce any cause of action under RA 3844 shall be
barred if not commenced within three (3) years after it accrue
d.44 Accordingly, respondents are held liable to pay petitioner
only the pertinent rental arrearages reckoned from the last t
hree (3) cropping years prior to the filing of the petition befo
re the Office of the PARAD on March 8, 200645 or from the
May 2003 cropping season, until they have vacated the subjec
t land.
WHEREFORE, the petition is GRANTED. The Decision dated Ju
ne 4, 2009 and the Resolution dated November 5, 2009 of th
e Court of Appeals in CA-GR. SP No. 105438 are REVERSED a
nd SET ASIDE. The Decision dated December 13, 2007 of the
Department of Agrarian Reform Adjudication Board in DARAB
Case No. 14727 is REINSTATED and AFFIRMED with the MODI
FICATION ordering respondents Ernesto Duldulao and Felipe P
ajarillo to pay petitioner Eufrocina Nieves the pertinent rental
arrearages reckoned from the May 2003 cropping season, unti
l they have vacated the landholding subject of this case.
SO ORDERED.
ESTELA M. PERLAS-BERNABE
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION
Associate JusticeMARIANO C. DEL CASTILLO
Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision had been r
eached in consultation before the case was assigned to the w
riter of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, and the
Division Chairperson's Attestation, I certify that the conclusion
s in the above Decision had been reached in consultation bef
ore the case was assigned to the writer of the opinion of the
Court's Division.
MARIA LOURDES P.A. SERENO
Chief Justice
Footnotes
1 Rollo, pp. 3-35.
2 Id. at 39-50. Penned by Associate Justice Jose L. Sabio, Jr.,
with Associate Justices Vicente S.E. Veloso and Ricardo R. Ros
ario, concurring.
3 Id. at 52-53.
4 Id. at 84-90. Penned by Assistant Secretary Augusto P. Quij
ano, with Undersecretary Renato F. Herrera and Assistant Secr
etaries Delfin B. Samson and Edgar A. Igano, concurring.
5 CA rollo, pp. 34-35. Penned by Assistant Secretary Augusto
P. Quijano, with Assistant Secretaries Delfin B. Samson, Edgar
A. Igano, and Patricia Rualo-Bello, concurring.
6 Rollo, pp. 79 and 85.
7 Id. at 46.
8 CA rollo, p. 140.
9 Rollo, p. 79.
10 See Mediation Report dated March 14, 2005 issued by Leg
al Officer III Pablo C. Canlas; DAR records, p. 1.
11 See Answer dated March 27, 2006; id. at 32-33.
12 See Answer dated March 29, 2006; id. at 36-37.
13 Rollo, p. 42.
14 Id. at 79-83. Penned by Presiding Adjudicator Marvin V. Be
rnal.
15 Id. at 80-81.
16 Id. at 82.
17 DAR records, pp. 162-163. Issued by Assistant Secretaries A
ugusto P. Quijano, Edgar A. Igano, and Patricia Rualo-Bello.
18 See Implementation Report dated April 30, 2007 issued by
DARAB Provincial Sheriff Delfin Acosta Gaspar; id. at 159.
19 Rollo, pp. 84-90.
20 Id. at 89.
21 Id. at 39-50.
22 Id. at 46-47.
23 143 Phil. 61 (1970).
24 Rollo, pp. 52-53.
25 Section 7 of RA 3844 provides:
Section 7. Tenure of Agricultural Leasehold Relation. - The agr
icultural leasehold relation once established shall confer upon
the agricultural lessee the right to continue working on the la
ndholding until such leasehold relation is extinguished. The ag
ricultural lessee shall be entitled to security of tenure on his l
andholding and cannot be ejected therefrom unless authorize
d by the Court for causes herein provided.
26 Section 37 of RA 3844 provides:
Section 37. Burden of Proof. - The burden of proof to show t
he existence of a lawful cause for the ejectment of an agricul
tural lessee shall rest upon the agricultural lessor.
27 Entitled "AN ACT TO ORDAIN THE AGRICULTURAL LAND
REFORM CODE AND TO INSTITUTE LAND REFORMS IN THE
PHILIPPINES, INCLUDING THE ABOLITION OF TENANCY AND
THE CHANNELING OF CAPITAL INTO INDUSTRY, PROVIDE FO
R THE NECESSARY IMPLEMENTING AGENCIES, APPROPRIATE F
UNDS THEREFOR AND FOR OTHER PURPOSES."
28 593 Phil. 108 (2008).
29 111 Phil. 737 (1961).
30 Sta. Ana v. Spouses Carpo, supra note 28, at 130-131.
31 542 Phil. 109, 122 (2007).
32 See Section 11, Rule 8 of the Rules of Court.
33 G.R. No. 176091, August 24, 2011, 656 SCRA 190.
34 Supra note 29.
35 BLACK’S LAW DICTIONARY, 7th Ed. (1999), p. 1593.
36 Id. at 438.
37 See item (2), Section 36 of RA 3844.
38 See Jalosjos v. Commission on Elections, G.R. No. 205033,
June 18, 2013, 698 SCRA 742, 762.
39 Id.
40 De Tanedo, supra note 23, at 63.
41 Entitled "AN ACT TO GOVERN THE RELATIONS BETWEEN
LANDHOLDERS AND TENANTS OF AGRICULTURAL LANDS (LE
ASEHOLDS AND SHARE TENANCY)."
42 De Tanedo, supra note 23, at 63.
43 See Perez-Rosario v. CA, 526 Phil. 562, 586 (2006).
44 Section 38 of RA 3844 provides:
Section 38. Statute of Limitations. - An action to enforce any
cause of action under this Code shall be barred if not comm
enced within three years after such cause of action accrued.
45 See Petition dated October 18, 2005; CA rollo, p. 127.
The Lawphil Project - Arellano Law Foundation
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G.R. No. 192270

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 192270 January 26, 2015
IRENE D. OFILADA, Petitioner,
vs.
SPOUSES RUBEN ANDAL and MIRAFLOR ANDAL,Respondents.
D E C I S I O N
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the July 13, 2009
Decision2 of the Court of Appeals (CA) in CA-GR. CV3 No. 1
01603 which: (1) granted the Petition for Review4 filed therein;
(2) reversed and set aside the August 28, 2007 Decision5 of
the Regional Trial Court (RTC), Lucena City, Branch 56 in SPE
C. CIV. ACTION 2007-01-A, affirming in toto the February 27,
2007 Decision6 of the Municipal Trial Court (MTC) of San Ant
onio, Quezon in Civil Case No. 188 which, in tum, ordered th
e ejectment of respondents spouses Ruben Andal and Miraflor
Andal (spouses Andal) from the properties of petitioner Irene
Ofilada (Irene); and, (3) declared the said MTC Decision null
and void for lack of jurisdiction.
Also questioned in this Petition isthe CA’s May 6, 2010 Resolu
tion7 denying Irene’s Motion for Reconsideration of the assaile
d CA Decision.
Factual Antecedents
Irene, together with her husband Carlos Ofilada (Carlos), boug
ht from the heirs of Teresita Liwag (Teresita) a 27,974-square
meter parcel of land principally planted with rambutan, a num
ber of coconut trees and other fruit-bearing plants located in
Barrio Puri, Tiaong, Quezon. The sale is evidenced by a Febru
ary 13, 1997 Extra-Judicial Settlement of Estate with Absolute S
ale8 wherein respondent Miraflor Andal (Miraflor), who broker
ed the sale of the property, signed as ‘tenant.’ Apparently, te
n days prior to the sale, Miraflor appeared before Anastacio L
ajara (Anastacio), the then Barangay Agrarian Reform Council (
BARC) Chairman of Barangay Puri, San Antonio, and executed
a Pagpapatunay9stating that:
Sa kinauukulan:
Ito ay pagpapatunay na si Miraflor Andal ay kusang[-]loob na
dumulog sa aking tanggapan upang ipagbigay[-]alam na ang
lupa na pag-aari ni TERESITA LIWAG x x x ay walang "tenant"
o magtatrabaho at hiniling niya na ang nasabing lupa ay map
alipat sa pangalan ng mga bumili na walang iba kundi sina C
arlos at Irene Ofilada.
Pinagtitibay nya na wala na siyang paghahabol na ano man l
aban sa may-ari o kahalili nito sa karapatan sapagkat siya ay
tumanggap na ng kaukulang halaga hinggil sa naging pagtatr
abaho niya sa nasabing lupa at gayon din ang kanyang mga
magulang.
SA KATUNAYAN NG LAHAT NG ITO ay ako ay nagbibigay ng
pahintulot na ang nasabing lupa ay mapagbili na at mapatal
a sa bagong may-ari na ligtas sa ano mang pananagutan.10
Two weeks after the sale or on February 27, 1997, Miraflor, wi
th the consent of her husband, respondent Ruben Andal (Rub
en), executed a Sinumpaang Salaysay11wherein she acknowled
ged Irene and Carlos as the new owners of the property. Whi
le it was stated therein that she will continue to take care of
the property, she nevertheless waived any tenancy rights that
she and her husband might haveover the land, viz.:
1. NA AKO ang [n]agtatrabaho o "tenant" sa lupang pag-aari
ni TERESITA LIWAG at ang nasabing lupa ay matatagpuan sa
Brgy. Puri, San Antonio, Quezon x x x
2. NA AKO ay kusang loob na nag-alok sa tagapagmana ng
may-ari ng lupa na pinangatawanan ni Ginoong JOSE LIWAG
na ipagbili na ang nasabing lupa sa mag-asawang CARLOS O
FILADA at IRENE OFILADA sapagkat magpapatuloy naman ang
aking pangangalaga sa nasabing lupa;
3. NA AKO at ang aking asawa ay kusang loob na sumang[-]
ayon na ang Titulo ng [na]sabing lupa ay mapalipat sa mga
bumili at simula sa araw na ito ay matahimik kong isinusulit a
ng pamomosesyon samga bagong mayari;
4. NA kami ay kusang[-]loob na tumatalikod na sa karapatan
ko bilang "tenant" na kahit kailan [ay] hindi na maghahabol la
ban sa dating may-ari o sa kaniyang mga tagapagmana sapa
gkat walasilang ano mang pananagutan sa amin at gayon[din]
ang bagong may-ari na mag-asawang CARLOS OFILADA at I
RENE OFILADA;12
Eventually, the land was registered in the names of Irene and
Carlos.13
Eight years later or in October 2005, Irene filed against the s
pouses Andal a Complaint14for Ejectment and Damages befor
e the MTC of San Antonio, Quezon. She averred that aside fr
om the aforementioned property, she and Carlos also acquire
d an 8,640-square meter ricefield located in Pulo, San Antoni
o, Quezon. For humanitarian reasons, she acceded to the spo
uses Andal’s request to take care of her two parcels of land,
provided that they would not be considered as tenants. To str
ess the factthat neither she nor the spouses Andal intended t
hat the latter be deemed as tenants, Irene pointed to the foll
owing: (1) the condition for her purchase of the property in Ti
aong that the same should not have any tenants; and (2) Mir
aflor’s execution of a Sinumpaang Salaysay wherein she waive
d any tenancy rights that she and her husband might have o
ver the said property.
In their Answer,15 the spouses Andal denied Irene’s allegations
and claimed that they were tenants of Irene’s predecessor-in-
interest and continued to be such despite the transfer of own
ership of the properties to Irene. They likewise contended that
since the suit is an action to dispossess themas tenants, it is
not the MTC which has jurisdiction over the complaint but th
e Department of Agrarian Reform Adjudication Board (DARAB)
.
Rejecting the tenancy claim, Irene averred in her Memorandu
m16 that her real properties are not covered by agrarian refor
m laws as they are within the retention limit allowed by law.
She again stressed that the spouses Andal had already volunt
arily surrendered their rights as tenants way back in 1997 as e
videnced by the Pagpapatunay and the Sinumpaang Salaysay.
She added the said spouses voluntarily waived their rights an
d received ₱1.1 million as commission for brokering the sale o
f the Tiaong property to her. This was after Irene made clear
that the sale would not materialize and, consequently spouses
Andal would not get the commission, if the property has ten
ants. Irene averred that the spouses Andal’s receipt of the sai
d amount of money, being advantageous to them, is a valid
ground for termination of tenancy relations. Ruling of the Mu
nicipal Trial Court
Prior to the preliminary conference, the MTC heard the respec
tive sides of the parties for a preliminary determination of the
existence of tenancy.
The spouses Andal, in support of their claim that the controv
ersy should be resolved by the DARAB because of the issue
of tenancy, submitted the following evidence to prove their st
atus as Irene’s tenants:(1) their December 19, 2005 Affidavit17
attesting that: a) they agreed to act as agents for the sale of
the lands on the condition that they would remain as tenants;
b) they personally cultivated Irene’s lands and; c) they have
been receiving ¼ shares of the proceeds of the sales of the
coconut, rambutan, and harvested palay; (2) the December 19,
2005 Affidavit18of Anastacio corroborating the spouses Andal’
s statements in their affidavit of even date; (3) a receipt19 dat
ed July 27, 2005 showing that Irene received from the spouse
s Andal ₱9,694.00 as her share in the harvest equivalent to 3
0 sacks of palayand; 4) a February 27,1997 Affidavit of Landho
lding20 executed by Irene and Carlos, the second paragraph
of which provides:
2. That we hereby testify that said parcel of land containing a
n area of 27,974 Square Meters is the only parcel of agricultu
ral land registered in our names; and we hereby agree that t
he same tenant Miraflor Andal, will continue as a tenant, over
the said parcel of land. (Emphasis supplied) On the other ha
nd, Irene insisted that the spouses Andal are not tenants but
mere caretakers of her lands. She disputed the documentary
evidence of the said spouses as follows: (1) it is the Pagpapat
unay issued by Anastacio in 1997 and furnished the Registry o
f Deeds of Lucena City and Department of Agrarian Reform (
DAR) which must be considered as more credible evidence ov
er his apparently fabricated affidavit executed at a later time (
2005); (2) the share in the produce of the lands as reflected i
n the receipt was the only share given to her by the spouses
Andal throughout the eight years that they took care of her
properties; and, (3) the copy of the Affidavit of Landholding p
resented by the spouses Andal contained in the second parag
raph thereof an insertion made through a manual typewriter. I
rene claimed that the said insertion which reads "and we [Iren
e and Carlos] hereby agree, that the same tenant Miraflor An
dal, will continue as a tenant, over the said parcel of land," w
as made without her knowledge and consent. In fact, her cop
y21 of the said document does not contain such inserted port
ion.
In its August 14, 2006 Order,22the MTC found no prima facie
showing of tenancy relations between the parties and proceed
ed with the case.
On February 27, 2007, the MTC rendered its Decision23 holdi
ng that spouses Andal failed to adduce proof that they are te
nants. It gave weight to the Pagpapatunay issued by Anastaci
o in 1997 as against the affidavit he executed in 2005 which i
t found ambivalent as to whether spouses Andal are working
as tenants on the lands of Irene. The MTC did not also accor
d any evidentiary weight to the copy of the Affidavit of Land
holding presented by spouses Andal because of the doubtful i
nsertion. Hence, it concluded that the spouses Andal were in
possession of the properties by mere tolerance of Irene. It ulti
mately ruled:
WHEREFORE, on the basis of the foregoing findings, the Cour
t hereby renders judgment in favor of the plaintiff and agains
t the defendants, ordering:
a) Defendants and all other persons living in said premises wi
thout permission of the plaintiff, to vacate and restore to the
plaintiff the peaceful possession and occupation of the landhol
dings in question;
b) Defendants to pay the plaintiff the amount of ₱30,000.00 a
s attorney’s and appearance fees[;]
c) Defendants to pay the plaintiff the amount of ₱80,000.00 a
s actual damages.
SO ORDERED.24
Ruling of the Regional Trial Court
Resolving the appeal of the spouses Andal, the RTC in its Au
gust 28, 2007 Decision25affirmed in toto the MTC ruling. The
motion for reconsideration thereto was also denied in the RT
C Resolution26 dated November 22, 2007.
Ruling of the Court of Appeals
The CA, on the other hand, took a different view of the case.
In its assailed Decision27 of July 13, 2009, the CA ratiocinate
d that since the existence of tenancy relations between the pr
evious owners of the properties and the spouses Andal is und
isputed, the question of whether the said spouses may be dis
possessed therefrom constitutes an agrarian dispute despite th
e severance of such relations. This is considering that severan
ce of the tenurial arrangement does not render the action be
yond the ambit of an agrarian dispute and, hence, jurisdiction
over the same remains with the DARAB. In support of its co
nclusion, the CA cited the cases of Rivera v. David28 and Spo
uses Amurao v. Spouses Villalobos.29
The dispositive portion of the CA Decision reads:
WHEREFORE, the instant petition for review is GRANTED. The
assailed Decision of the Regional Trial Court of Lucena City, B
ranch 56, in Special Civil Case No. 2007-01-A, is hereby REVE
RSED and SET ASIDE. The Decision dated 27 February 2007 o
f the Municipal Trial Court of San Antonio, Quezon in Civil Ca
seNo. 188, is declared NULL and VOID for lack of jurisdiction.
SO ORDERED.30
Irene filed a Motion for Reconsideration,31 which was denied i
n the CA Resolution32dated May 6, 2010.
Hence, this Petition.
 The Issue
Forcible entry and unlawful detainer cases fall under the exclu
sive original jurisdiction of the metropolitan trial courts, munici
pal trial courts, and the municipal circuit trial courts.33On the
other hand, the DARis vested with primary jurisdiction to dete
rmine and adjudicate agrarian reform matters and has exclusiv
e original jurisdiction over all matters involving the implement
ation of agrarian reform.34 As DAR’s adjudicating arm,35 it is
the DARAB thathas exclusive and original jurisdiction involving
all agrarian disputes. Republic Act (RA) No. 6657, Section 3(d)
defines an ‘agrarian dispute’ as follows:
(d) Agrarian Dispute refers to any controversy relating to tenu
rial arrangements, whether leasehold, tenancy, stewardship or
otherwise, over lands devoted to agriculture, including dispute
s concerning farmworkers’ associations or representation of pe
rsons in negotiating, fixing, maintaining, changing, or seeking t
o arrange terms or conditions of such tenurial arrangements. I
t includes any controversy relating to compensation of lands a
cquired under this Act and other terms and conditions of tran
sfer of ownership from landowners to farmworkers, tenants an
d other agrarian reform beneficiaries, whether the disputants s
tand in the proximate relation of farm operator and beneficiar
y, landowner and tenant, or lessor and lessee.
The term also "refers to any controversy relating to, among o
thers, tenancy over lands devoted to agriculture."36
Significantly, Rule II of the 2009 DARAB Rules of Procedure re
ads:
SECTION 1. Primary and Exclusive Original and Appellate Juris
diction.– The Board shall have primary and exclusive jurisdictio
n, both original and appellate, to determine and adjudicate all
agrarian disputes involving the implementation of the Compr
ehensive Agrarian Reform Program (CARP) under R.A. No. 665
7, as amended by R.A. No. 9700, E.O. Nos. 228, 229, and 129
-A, R.A. No. 3844 as amended by R.A. No. 6389, Presidential
Decree No. 27 and other agrarian laws and their Implementin
g Rules and Regulations. Specifically, such jurisdiction shall incl
udebut not be limited to cases involving the following:
a. The rights and obligations of persons, whether natural or ju
ridical, engaged in the management, cultivation, and use of all
agricultural lands covered by R.A. No. 6657, otherwise known
as the Comprehensive Agrarian Reform Law (CARL), as amen
ded, and other related agrarian laws; x x x
x x x x
d. Those cases involving the ejectment and dispossession of t
enants and/or leaseholders;
With the above points on jurisdictions having been laid, the C
ourt now resolves the crucial issue in the case of whether ten
ancy relationship between Irene and the spouses Andal exists
as to strip off the MTC of its jurisdiction over Irene’s suit for
unlawful detainer.
Our Ruling
We grant the Petition.
The factual circumstances in Rivera and
Amurao clearly make out cases involving
agrarian dispute.
As the CA relied on Rivera and Amurao,it is wise to revisit th
e factual milieu of the said cases.
In its assailed Decision, the CA quoted the following pronounc
ement which was restated37 in Rivera, viz:
Even if the tenurial arrangement has been severed, the action
still involves an incident arising from the landlord and tenant
relationship. Where the case involves the dispossession by a f
ormer landlord of a former tenant of the land claimed to hav
e been given as compensation in consideration of the renunci
ation of the tenurial rights, there clearly exists an agrarian dis
pute. On this point the Court has already ruled:
Indeed, Section 21 of Republic Act No. 1199, provides that ‘all
cases involving the dispossession of a tenant by the landlord
or by a third party and/or the settlement and disposition of d
isputes arising from the relationship of landlord and tenant …
shall be under the original and exclusive jurisdiction of the Co
urt of Agrarian Relations.’ This jurisdiction does not require th
e continuance of the relationship of landlord and tenant – at
the time of the dispute. The same may have arisen, and of te
n times arises, precisely from the previous termination of such
relationship. If the same existed immediately, or shortly, befor
e the controversy and the subject matter thereof is whether o
r not said relationship has been lawfully terminated, or if the
dispute otherwise springs or originates from the relationship o
f landlord and tenant, the litigation is (then) cognizable only
by the Court of Agrarian Relations…38
In the said case, Agustin Rivera (Agustin) was in possession of
a 1.8-hectare portion of the 5-hectare lot owned in common
by the heirs of Cristino and Consolacion David, and these heir
s demanded that hevacate the premises. Thus, Agustin filed a
Complaint to Maintain Peaceful Possession before the Provinci
al Agrarian Reform Adjudication Board (PARAB). He averred th
at his possession of the property was, originally, as registered
tenant of the said heirs’ predecessor-ininterest, Cristino, as evi
denced by the certification issued by the Municipal Agrarian R
eform Office (MARO). Subsequently in 1957, he became the lo
t owner because the spouses Cristino and Consolacion David
gave him the 1.8-hectare land as his ‘disturbance compensatio
n,’ in exchange for the renunciation of his tenurial rights. On
the other hand, Nemesio David (Nemesio), oneof the heirs, ar
gued that the DAR has no jurisdiction over the case asthe sa
me only involves the issue of ownership of the land.
The DAR (thru the PARAB and the DARAB) assumed jurisdicti
on over the case and went on to render judgments in favor
of Agustin. The CA, however, ruled that the DAR no longer h
ad any jurisdiction on the ground that the alleged tenancy, p
er Agustin’s own admission, had already ended in 1957. Thus,
it set aside the respective decisions of the PARAB and the DA
RAB. The Court, though, did not agree with the CA on the is
sue of jurisdiction. Although it denied Agustin’s appeal becaus
e he was not able to sufficiently prove his ownership of the l
and, DAR’s jurisdiction over the case was nevertheless upheld.
And it was at that point that the above-quoted pronounceme
nt was restated.
Indeed in Rivera, the severance of the tenancy relations when
the suit was filed did not matter because the prior agricultural
tenancy served as the juridical tie which compelled the chara
cterization of the controversy as an agrarian dispute. This is d
ue to the fact that the land from which Agustin was being di
spossessed was claimed to have beenowned by him by way o
f disturbance compensation given to him as a former tenant
by his former landlord.
On the other hand, in Amurao, the spouses Amurao bought i
n 1987 from a certain Ruperto Endozo a parcel of land which
was then tenanted by the spouses Villalobos. The spouses A
murao allowed the spouses Villalobos to continue working on
the land until such time that their need for the same arises. I
n 1994, the therein parties executed a Kasulatan in which the
spouses Villalobos promised to surrender the possession of th
e lot should the spouses Amurao need it, while the latter, in
return, bound themselves to give the spouses Villalobos a 1,00
0-sqm. portion of the land. But because the spouses Villalobo
s reneged on their promise in accordance with the Kasulatan,
the spouses Amurao filed an ejectment case against them bef
ore the Municipal Circuit Trial Court (MCTC). On the defense
that the issue concerns an agrarian dispute, the spouses Villal
obos questioned the trial court’s jurisdiction. Both the MCTC a
nd the RTC upheld their jurisdiction over the case but the CA
ruled otherwise.
Before this Court, the spouses Amurao argued that the tenan
cy relationship between them and the spouses Villalobos was
terminated upon the execution of the Kasulatan. Hence, there
can be no agrarian dispute between them over which the DA
R can take cognizance of. The Court held: The instant case u
ndeniably involves a controversy involving tenurial arrangemen
ts because the Kasulatan will definitely modify, nay terminate t
he same. Even assuming that the tenancy relationship betwee
n the parties had ceased due to the Kasulatan, there still exist
s an agrarian dispute because the action involves an incident
arising fromthe landlord and tenant relationship. x x x x
In the case at bar, petitioners’ claim that the tenancy relations
hip has been terminated by the Kasulatan is of no moment.
As long as the subject matter of the dispute is the legality of
the termination of the relationship, or if the dispute originate
s from such relationship, the case is cognizable by the DAR, t
hrough the DARAB. The severance of the tenurial arrangemen
t will not render the action beyond the ambit of an agrarian
dispute.39
To restate, what brought Rivera under the ambit of an agraria
n dispute is the fact that the land from which Agustin was be
ing dispossessed of by the heirs of his former landlord is clai
med to have been given to him by the said former landlord
as consideration for the renunciation of his tenurial rights. Wh
ile in Amurao, it was the issue of whether the Kasulatan enter
ed into by the parties terminated the landlord-tenant relations
hip between them. Clearly, asthe action in both cases involved
an incident arising from landlord-tenant relationship, the seve
rance or alleged severance of such relationship did not take t
hem beyond the ambit of an agrarian dispute and, consequen
tly, it is DAR which has jurisdiction over the said cases.
Rivera and Amurao are not on all fours
with the present case.
Here, Irene claims that there can be no agrarian dispute since
there exists no landlord-tenant relationship between her and
the spouses Andal. If ever such a relationship existed, it was
between the former owner of the properties and the spouses
Andal and the same had already been renounced by Miraflor
prior to Irene’s acquisition of the properties. The CA, however,
ruled that even if the landlord-tenant relationship between th
e previous owner and the spouses Andal had already ceased,
the action to dispossess the latter from the subject properties
still involves an agrarian dispute, as held in Rivera and Amura
o.
Suffice it to say, however, that the present case is not on all
fours with Rivera and Amurao.
As already discussed, in Rivera, the land involved is claimed t
o have been given to the former tenant by the former landlo
rd by way of disturbance compensation. Hence, even if the la
ndlord-tenant relationship was asserted to have been severed
as early as 1957, the Court considered the action as arising fr
om an agrarian dispute, the rightful possession of the land be
ing an incident of such previous landlord-tenant relationship. I
n the present case, there is no claim that the subject properti
es were given to the spouses Andal by their former landlord
as a form of disturbance compensation. While the spouses An
dal in this case refuse to surrender the properties to Irene on
the ground that they are tenants of the same just like in A
murao, it cannot be gain said that in Amurao, the tenancy rel
ations between the former owners of the property involved th
erein and the spouses Villalobos, had, undisputedly, been cont
inued by and between the said spouses and the spouses Am
urao when the latter acquired the property. And it was on th
at supposition that the Court held that even if the Kasulatan
executed by the spouses Amurao and the spouses Villalobos t
erminated the tenancy relationship between them, the action
of the former to dispossess the latter from the property tenan
ted involved an agrariandispute. However, in this case, unlike i
n Amurao the severance of the tenancy relations between the
former owners of the properties and the spouses Andal, as
well as the non-existence of a similar relationship between the
said spouses and Irene as the new owner, were sufficiently s
hown as will be discussed below. Hence, the said pronounce
ment made in Amurao finds no application in this case.
The tenancy relationship between the
former owners of the properties and the
spouses Andal was clearly severed prior
to Irene’s purchase of the same; no such
relationship was subsequently created
between Irene and the spouses Andal.
Certainly telling are the Pagpapatunay and the Sinumpaang S
alaysay which were voluntarily executed and never impugned
by the spouses Andal. Both contain express declarations that
at the time Irene and her husband bought the property, the t
enancy then existing between the heirs of Teresita as former
owners and the spouses Andal as tenants had already ceased,
and that no tenancy relations would continue between the la
tter and the new owner, Irene. Notably, the Sinumpaang Salay
say, being a public document, is evidence of the facts in the
clear unequivocal manner therein expressed and has in its fav
or the presumption of regularity.40The spouses Andal are bou
nd by their admissions against their own interest.
Indeed, while a tenancy relationship cannot be extinguished b
y the sale, alienation, or transfer of the legal possession of th
e landholding,41 the same may nevertheless be terminated du
e to circumstances more advantageous to the tenant and his/
her family.42 Here, records show that Miraflor, who brokered
the sale between the heirs of Teresita and Irene, voluntarily e
xecuted, days prior to the Extrajudicial Settlement of Estate wi
th Absolute Sale, her Pagpapatunay before the BARC Chairma
n stating that she and her parents have already received a ‘s
ufficient consideration’ for her to release her former landlord
and the purchaser of the lot from liability. As later disclosed
by Irene during trial, such ‘sufficient consideration’ amounted t
o ₱1.1 million by way of disturbance compensation, a factual
allegation which was again never refuted by the spouses And
al before the lower court and was found to be an uncontrov
erted fact by the CA. To the Court, the said amount is adequ
ate enough for the spouses Andal to relinquish their rights as
tenants. In fine, it can be reasonably concluded that the tena
ncy relationship between the previous ownersand the spouses
Andal had already been severed.
The next question now is whether a new tenancy relationship
between Irene and the spouses Andal was subsequently forme
d. This becomes crucial because for the DARAB to have jurisd
iction over the case, there must be a tenancy relationship bet
ween the parties.43 Evidence is necessary to prove the allegat
ion of tenancy."The principal factor in determining whether a t
enancy relationship exists is intent. Tenancy is not a purely fa
ctual relationship dependent on what the alleged tenant does
upon the land. It is alsoa legal relationship."44
An allegation of tenancy before the MTC does not automatica
lly deprive the court of its jurisdiction. 1âwphi1 Basic is the rule
that:
x x x the material averments in the complaint determine the j
urisdiction of a court. x x x a court does not lose jurisdiction
over an ejectment suit by the simple expedient of a party rais
ing as a defense therein the alleged existence of a tenancy re
lationship between the parties. The court continues to have th
e authority to hear and evaluate the evidence, precisely to de
termine whether or not it has jurisdiction, and, if, after hearin
g, tenancy is shown to exist, it shall dismiss the case for lack
of jurisdiction.45
The Court agrees with the conclusion of both the MTC and t
he RTC that for dearth of evidence, tenurial relationship betw
een the parties was not sufficiently shown. Thus, the said cour
ts correctly assumed jurisdiction over the ejectment case.
The fact alone of working on another’s landholding does not
raise a presumption of the existence of agricultural tenancy. F
or tenancy to be proven, all indispensable elements must be
established, the absence of one or more requisites will not m
ake the alleged tenant a de facto one. These are: 1)the partie
s are the landowner and the tenant; 2) the subject is agricult
ural land; 3) there is consent by the landowner; 4) the purpos
e is agricultural production; 5) there is personal cultivation; an
d 6) there issharing of the harvests.46
The Pagpapatunay and the Sinumpaang Salaysay both support
Irene’s claim that she purchased the landholdings only on th
e condition that there will be no tenants. Her refusal to give
her consent to any tenancy relationship is glaring. On the oth
er hand, the spouses Andal, in their attempt toprove tenancy,
submitted their copy of the February 27, 1997 Affidavit of Lan
dholding, which contains an inserted statement that Irene and
Carlos agree "that the same tenant Miraflor Andal, will contin
ue astenant, over the said parcel of land." However, serious d
oubt is cast on the authenticity of said inserted statement con
sidering that it does not bear the respective initials/signatures
of Carlos and Irene attesting their conformity thereto. More i
mportantly, Irene’s copy of the said document does not conta
in the same insertion.
Anent the proof of sharing of harvest, what the spouses Anda
l merely presented was a single receipt dated July 27, 2005 r
epresenting Irene’s ‘share’ in the harvest. This even militates a
gainst the spouses Andal’s claim of tenancy considering that t
hey did not present the receipts for the alleged sharing syste
m prior to 2005 or from 1997, the year when Irene purchased
the land. Notably, the receipt they submitted is dated July 2
7, 2005 or just a few months before the filing of the complai
nt. To the Court’s mind, such act of the spouses Andal to giv
e Irene a share is a mere afterthought, the same having been
done during the time that Irene was already making serious
demands for them to account for the produce of the lands a
nd vacate the properties. Be that as it may, the Court stresses
"that it is not unusual for a landowner toreceive the produce
of the land from a caretaker who sows thereon. The fact of
receipt, without an agreed system of sharing, does not ipso f
acto create a tenancy."47
In sum, the Court holds that absent any tenurial relationship
between them, the spouses Andal 's possession of Irene's pro
perties was by mere tolerance of the latter. The action to dis
possess the spouses Andal there from is therefore a clear cas
e of summary action for ejectment cognizable by the regular
courts.
WHEREFORE, the Petition is GRANTED. The July 13, 2009 Deci
sion and May 6, 2010 Resofotion of the Court of Appeals in
CA-GR. CV No. 101603 are REVERSED and SET ASIDE. The Au
gust 28, 2007 Decision of the Regional Trial Court, Lucena Cit
y, Branch 56 in SPEC Crv. ACTION 2007-01-A affinning in toto
the February 27, 2007 Decision of the Municipal Trial Court
of San Antonio, Quezon in Civil Case No. 188, is REINSTATED
and AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.*
Associate Justice
DIOSADO M. PERALTA**
Associate JusticeJOSE CATRAL MENDOZA
Associate Justice

MARVIC M.V.F. LEONEN

Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision had been r
eached in consultation before the case was assigned to the w
riter of the opinion of the Court's Division.
MARIANO C. DEL CASTILLO
Associate Justice
Acting Chairperson
C E R TI F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution and the
Division Acting Chairperson's Attestation, I certify that the co
nclusions in the above Decision had been reached in consulta
tion before the case was assigned to the writer of the opinio
n of the Court's Division.
MARIA LOURDES P.A. SERENO
Chief Justice
Footnotes
* Per Special Order No. 1910 dated January 12, 2015.
** Per Raffle dated September 15, 2014.
1 Rollo, pp. 9-42.
2 CA rollo, pp. 196-208; penned by Associate Justice Maritlor
P. Punzalan Castillo and concurred in by Associate Justices Ro
smari D. Carandang and Ramon M. Bato, Jr.
3 SP in some parts of the records.
4 Id. at 8-22.
5 Id. at 131-136; penned by Judge Nonna Chionglo-Sia.
6 Id. at 95-104; penned by Acting Judge Felix A. Caraos.
7 Id. at 278-279; penned by Associate Justice Ramon M.Bato,
Jr. and concurred in by Associate Justices Rosmari D. Caranda
ng and Hakim S. Abdulwahid.
8 Rollo, pp. 64-66.
9 Id. at 69.
10 Id.
11 Id. at 68.
12 Id.
13 Id. at 63.
14 CA rollo, pp. 23-28; docketed as Civil Case No. 188.
15 Id. at 29-33.
16 Id. at 34-37.
17 Id. at 70-71.
18 Id. at 72-73.
19 Id. at 76.
20 Rollo, p. 71.
21 Id. at 70.
22 CA rollo, p. 98.
23 Id. at 95-104.
24 Id. at 103-104.
25 Id. at 131-136.
26 Id. at 146-147.
27 Id. at 196-208.
28 518 Phil. 445 (2006).
29 524 Phil. 762 (2006).
30 CA rollo, pp. 207-208.
31 Id. at 222-241.
32 Id. at 278-279.
33 BATAS PAMBANSA BILANG 129, Section 33, as amended b
y Republic Act No. 7691.
34 REPUBLIC ACT NO. 6657 known as the Comprehensive Ag
rarian Reform Law of 1988, Section 50.
35 EXECUTIVE ORDER 129-A, Modifying Order 129 Reorganizin
g and Strengthening the Department of Agrarian Reform and
Other Purposes, Section 13.
36 Mendoza v. Germino, G.R. No. 165676, November 22, 2010
, 635 SCRA 537, 545.
37 The pronouncement was made by the Court in David v. Ri
vera, 464 Phil. 1006 (2004), a case between the same parties
and which involves the same parcel of land as in Rivera.
38 CA rollo, pp. 206-207.
39 Spouses Amurao v. Spouses Villalobos, supra note 29 at 7
72-773.
40 Macaspac v. Puyat, Jr., 497 Phil. 161, 174 (2005).
41 REPUBLIC ACT NO. 3844, known as The Agricultural Refor
m Code, as amended by Republic Act Nos. 6389 and 10374.
Section 10. Agricultural Leasehold Relation Not Extinguished by
Expiration of Period, etc.- The 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 landholdi
ng. In case the agricultural lessor sells, alienates or transfers t
he legal possession of the landholding, the purchaser or trans
feree thereof shall be subrogated to the rights and substitute
d to the obligations of the agricultural lessor.
42 Id., Section 28. Termination of Leasehold by Agricultural Le
ssee During Agricultural Year- The agricultural lessee may ter
minate the leasehold during the agricultural year for any of th
e following causes:
x x x x
(5) Voluntary surrender due to circumstances more advantage
ous to him and his family.
43 Philippine Overseas Telecommunications Corporation v. Gut
ierrez, 537 Phil. 682, 691 (2006).
44 Valencia v. Court of Appeals, 449 Phil. 711, 736 (2003).
45 Cano v. Spouses Jumawan, 517 Phil. 123, 129-130 (2006).
46 Salmorin v. Dr. Zaldivar, 581 Phil. 531, 537 (2008); citing Su
arez v Saul, 510 Phil. 400, 406 (2005).
47 Heirs of Rafael Magpily v. De Jesus, 511 Phil. 14, 25 (2005).
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