Agricultural leasehold; how proved; legal effects - G.R. No. 176091

G.R. No. 176091
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The Court’s Ruling

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

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

Section 36. Possession of Landholding; Exceptions. — Notwithstanding any agreement as to the period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that:
(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided; That the agricultural lessee shall be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights under Sections twenty-five and thirty-four, except when the land owned and leased by the agricultural lessor, is not more than five hectares, in which case instead of disturbance compensation the lessee may be entitled to an advanced notice of at least one agricultural year before ejectment proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to substantially carry out such conversion within one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because of said dispossessions. HSD
(2) The agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the provisions of this Code unless his failure is caused by fortuitous event or force majeure;
(3) The agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed upon;
(4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section twenty-nine;
(5) The land or other substantial permanent improvement thereon is substantially damaged or destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee;
(6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; or
(7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty-seven.

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

The rule is settled that failure to pay the lease rentals must be willful and deliberate in order to be considered as ground for dispossession of an agricultural tenant.[25] While the “term ‘deliberate’ is characterized by or results from slow, careful, thorough calculation and consideration of effects and consequences,” the term "willful" has been “defined as one governed by will without yielding to reason or without regard to reason.”[26] Despite the complaints Manahan filed with the MARO in 1994 and 1996,[27] our perusal of the record shows that Antonio’s failure to pay and/or incurrence of shortages from the stipulated annual lease rentals of 70 Cavans of palay weighing 40 Kilos cannot be considered willful and deliberate. Even with Manahan’s rejection of the rentals tendered by Antonio in 1993 and 2001 for supposed poor quality,[28] the receipts on record show that the latter was able to remit the following rentals which were duly received by the former, viz.: (a) 1994 – 87 cavans and 32 ½ kilos;[29] (b) 1995 – 65 cavans and 36 kilos;[30] (c) 1996 – 74 cavans and 4.5 kilos;[31] (d) 1997 – 103 cavans and 27 kilos;[32] (e) 1998 – 72 cavans and 38 kilos;[33] (f) 1999 – 82 cavans and 14 kilos;[34] (g) 2000 – 69 cavans and 26 kilos;[35] (h) 2002 – 69 cavans and 37 kilos;[36] and (i) 2003 – 86 cavans and 40 ½ kilos.[37]

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

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

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

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

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

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

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