AGRARIAN LAW AND SOCIAL LEGISLATION

Article 2, Section 21 of the 1987 Constitution

- The state shall promote comprehensive rural development and agrarian reform

Article 12, Section 1 of the 1987 Constitution

- The goals of the national economy are a more equitable distribution of opportunity, income
and wages, a sustained increase in the amount of goods and services, produced by the nation
for the benefit of the people, and an expanding productivity, as the key to raise the quality of
life for all, especially the underprivileged.

The state shall promote industrialization and full employment based on the sound agricultural
development and agrarian reform, through industries that make full and efficient use of
human and natural resources, and which is competitive in both domestic and foreign markets.
However, the State shall protect Filipino enterprises against unfair foreign competitions and
trade practices.

In the pursuit of these goals, all the sector of the economy, and all the regions of the country
shall be given optimum opportunity to develop. Private enterprises, including corporations,
cooperatives, and other collective organization shall be encouraged to broaden the base of
their ownership.

Article 13, Section 3 of the 1987 Constitution

- The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining,

negotiations, and peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to a security of tenure, a humane of conditions of work, and a living
wage. They shall also participate in the policy and decision making processes that affects their
rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers
and the preferential use of voluntary modes of settling disputes, including conciliation, and
shall enforce their mutual compliances therewith, to foster industrial peace.

The State shall regulate relations between workers and employers, recognizing the right of
labor to its just share on the fruits of production, and the right of enterprises to a reasonable
return of investment, and to expansion and growth.
Article 13, Section 4 of the 1987 Constitution

- The State shall, by law, undertake an agrarian reform, that is founded on the rights of the
farmers and regular farmworkers who are landless, to own directly or collectively the land
they till. In the case of other farmworkers to receive its just share on the fruits thereof. To this
end, the State shall encourage and undertake a just distribution of all the agricultural land,
subject to such priorities and reasonable retention limits, as the Congress may prescribe, taking
into account, ecological, developmental and equity considerations, and subject to the payment
of just compensation. In determining the retention limits, the State shall respect the rights of
small landowners. The State shall further provide incentives for voluntary land-sharing.

Article 13, Section 5 of the 1987 Constitution

- The State shall recognize the rights of farmers, farmowners and landowners, as well as
cooperatives and other independent farmer’s organization to participate in the planning,
organization and management of the program, and shall provide support to agriculture
through technology and research, and adequate financial, production, marketing and other
support services.

Article 13, Section 6 of the 1987 Constitution

- The State shall apply the principle of agrarian reform or stewardship, in the disposition or
utilization of other natural resources, including lands of public domain under lease or
concession suitable to agriculture, subject to prior rights, homestead rights of small settlers,
and rights of indigenous communities to their ancestral lands.

The State may resettle landless farmers and farmworkers in their own agricultural estate,
which shall be distributed to them in the manner provided by law.

Article 13, Section 8 of the 1987 Constitution

- The State shall provide incentives to landowners to invest the proceeds of the agrarian reform
program to promote industrialization, employment creation, and privatization of public sector
enterprises. Financial instruments used as payment for their lands shall be honored as equity
in enterprises of their choice.

Definitions:

Republic Act No. 6657, as amended by 7881 – Comprehensive Agrarian Reform Law of 1988

Agricultural Lands

Section 3(c ) - refers to land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land.

Agrarian Disputes
 Section 3(d) - refers to any controversy relating to tenurial arrangements, whether leasehold,
tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes
concerning farmworkers’ associations or representation of persons in negotiating, fixing,
maintaining, changing, or seeking to arrange terms or conditions of such tenurial
arrangements.

Farmer

Section 3 (f) - refers to a natural person whose primary livelihood is cultivation of land or the
production of agricultural crops, either by himself, or primarily with the assistance of his
immediate farm household, whether the land is owned by him, or by another person under a
leasehold or share tenancy agreement or arrangement with the owner thereof.

Farmworker

Section 3

(g) Farmworker is a natural person who renders services for value as an employee or
laborer in an agricultural enterprise or farm regardless of whether his compensation is
paid on a daily, weekly, monthly or “pakyaw” basis. The term includes an individual
whose work has ceased as a consequence of, or in connection with, a pending agrarian
dispute and who has not obtained a substantially equivalent and regular farm
employment.

(h) Regular Farmworker is a natural person who is employed on a permanent basis by

an agricultural enterprise or farm.

(i) Seasonal Farmworker is a natural person who is employed on a recurrent, periodic or

intermittent basis by an agricultural enterprise or farm, whether as a permanent or a
non-permanent laborer, such as “dumaan”, “sacada”, and the like.

(j) Other Farmworker is a farmworker who does not fall under paragraphs (g), (h) and
(i).

SECTION 4. Scope. – The Comprehensive Agrarian Reform Law of 1988 shall cover,
regardless of tenurial arrangement and commodity produced, all public and private
agricultural lands, as provided in Proclamation No. 131 and Executive Order No. 229,
including other lands of the public domain suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive Agrarian
Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for
agriculture. No reclassificatioo n of forest or mineral lands to agricultural lands shall
be undertaken after the approval of this Act until Congress, taking into account
ecological, developmental and equity considerations, shall have determined by law, the
specific limits of the public domain.

(b) All lands of the public domain in excess of the specific limits as determined by
Congress in the preceding paragraph;

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for agriculture regardless of the agricultural
products raised or that can be raised thereon.

SECTION 9. Ancestral Lands. – For purposes of this Act, ancestral lands of each
indigenous cultural community shall include, but not be limited to, lands in the actual,
continuous and open possession and occupation of the community and its members:
Provided, That the Torrens System shall be respected.

The right of these communities to their ancestral lands shall be protected to ensure their
economic, social and cultural well-being. In line with the principles of self-
determination and autonomy, the systems of land ownership, land use, and the modes
of settling land disputes of all these communities must be recognized and respected.

Any provision of law to the contrary notwithstanding, the PARC may suspend the
implementation of this Act with respect to ancestral lands for the purpose of identifying
and delineating such lands: Provided, That in the autonomous regions, the respective
legislatures may enact their own laws on ancestral domain subject to the provisions of
the Constitution and the principles enunciated in this Act and other national laws.

SECTION 10. Exemptions and Exclusions. – Lands actually, directly and exclusively
used and found to be necessary for parks, wildlife, forest reserves, reforestation, fish
sanctuaries and breeding grounds, watersheds, and mangroves, national defense,
school sites and campuses including experimental farm stations operated by public or
private schools for educational purposes, seeds and seedlings research and pilot
production centers, church sites and convents appurtenant thereto, mosque sites and
Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal
colonies and penal farms actually worked by the inmates, government and private
research and quarantine centers and all lands with eighteen percent (18%) slope and
over, except those already developed shall be exempt from the coverage of this Act.

SECTION 12. Determination of Lease Rentals. – In order to protect and improve the
tenurial and economic status of the farmers in tenanted lands under the retention limit
and lands not yet acquired under this Act, the DAR is mandated to determine and fix
immediately the lease rentals  thereof in accordance with Section 34 of Republic Act No.
3844, as amended: Provided, That the DAR shall immediately and periodically review
and adjust the rental structure for different crops, including rice and corn, or different
regions in order to improve progressively the conditions of the farmer, tenant or lessee.
 SECTION 14. Registration of Landowners. – Within one hundred eighty (180) days from
the effectivity of this Act, all persons, natural or juridical, including government
entities, that own or claim to own agricultural lands, whether in their names or in the
name of others, except those who have already registered pursuant to Executive Order
No. 229, who shall be entitled to such incentives as may be provided for the PARC, shall
file a sworn statement in the proper assessor’s office in the form to be prescribed by the
DAR, stating the following information:

(a) the description and area of the property;

(b) the average gross income from the property for at least three (3) years;

(c) the names of all tenants and farmworkers therein;

(d) the crops planted in the property and the area covered by each crop as of June 1,
1987;

(e) the terms of mortgages, leases, and management contracts subsisting as of June 1,
1987, and

(f) the latest declared market value of the land as determined by the city or provincial
assessor.

Republic Act No. 3884, as amended by RA No. 6389 - Agricultural Land Reform Code.

Section 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of the

Parties - In case of death or permanent incapacity of the agricultural lessee to work his
landholding, the leasehold shall continue between the agricultural lessor and the person
who can cultivate the landholding personally, chosen by the agricultural lessor within
one month from such death or permanent incapacity, from among the following: (a) the
surviving spouse; (b) the eldest direct descendant by consanguinity; or (c) the next
eldest descendant or descendants in the order of their age: Provided, That in case the
death or permanent incapacity of the agricultural lessee occurs during the agricultural
year, such choice shall be exercised at the end of that agricultural year: Provided,
further, That in the event the agricultural lessor fails to exercise his choice within the
periods herein provided, the priority shall be in accordance with the order herein
established.

In case of death or permanent incapacity of the agricultural lessor, the leasehold shall
bind his legal heirs.

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 landholding. In case the agricultural lessor sells,
 alienates or transfers the legal possession of the landholding, the purchaser or
transferee thereof shall be subrogated to the rights and substituted to the obligations of
the agricultural lessor.

Section 11. Lessee's Right of Pre-emption - In case the agricultural lessor decides to sell the
landholding, the agricultural lessee shall have the preferential right to buy the same
under reasonable terms and conditions: Provided, That the entire landholding offered
for sale must be pre-empted by the Land Authority if the landowner so desires, unless
the majority of the lessees object to such acquisition: Provided, further, That where
there are two or more agricultural lessees, each shall be entitled to said preferential
right only to the extent of the area actually cultivated by him. The right of pre-emption
under this Section may be exercised within ninety days from notice in writing which
shall be served by the owner on all lessees affected.

Section 12. Lessee's Right of Redemption - In case the landholding is sold to a third person
without the knowledge of the agricultural lessee, the latter shall have the right to
redeem the same at a reasonable price and consideration: Provided, That the entire
landholding sold must be redeemed: Provided, further, That where these are two or
more agricultural lessees, each shall be entitled to said right of redemption only to the
extent of the area actually cultivated by him. The right of redemption under this Section
may be exercised within two years from the registration of the sale, and shall have
priority over any other right of legal redemption.

Section 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year - The

agricultural lessee may terminate the leasehold during the agricultural year for any of
the following causes:

(1) Cruel, inhuman or offensive, treatment of the agricultural lessee or any member of
his immediate farm household by the agricultural lessor or his representative with the
knowledge and consent of the lessor;

(2) Non-compliance on the part of the agricultural lessor with any of the obligations
imposed upon him by the provisions of this Code or by his contact with the agricultural
lessee;

(3) Compulsion of the agricultural lessee or any member of his immediate farm
household by the agricultural lessor to do any work or render any service not in any
way connected with farm work or even without compulsion if no compensation is paid;

(4) Commission of a crime by the agricultural lessor or his representative against the
agricultural lessee or any member of his immediate farm household; or

(5) Voluntary surrender due to circumstances more advantageous to him and his
family.
 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.

(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.

POLICE POWER v. POWER OF EMINENT DOMAIN

Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform

G.R. No. 78742 July 14, 1989

CRUZ,  J.:

DOCTRINE: Property condemned under the police power is noxious or intended for a noxious
purpose, such as a building on the verge of collapse, which should be demolished for the public
safety, or obscene materials, which should be destroyed in the interest of public morals. The
confiscation of such property is not compensable, unlike the taking of property under the power of
expropriation, which requires the payment of just compensation to the owner.

FACTS: The petitioners in this case are small landowners, invoking their right of retention granted by
PD 27 to owners of rice and corn lands not exceeding 7 hectares. They are planning to eject the
tenant-farmers on their lands, however, according to PD 316, there must first be an implementing
rules and regulations determining the rights of tenant-farmer and landowner before ejecting the
tenant-farmer. In line with this, the Department of Agrarian Reform, has not yet issued any
implementing rules required under PD 316, so they were not unable to eject the tenant-farmers. They
ask the court to file a writ of mandamus to compel DAR to implement the rules. In their reply, the
DAR, argues that LOI 474, has long been removed the rights of landowners to retention whose
agricultural lands exceeds 7 hectares. Assuming that the petitioners were not under this LOI, they
were still barred from invoking this right, for their failure to file corresponding applications for
retention, as the implementing rules of PD 27, has already been issued. Petitioners said that the
implementing rules were not published and hence, null and void.

ISSUE: WON the several measures challenged in this case are violative of due process and equal
protection clause.

RULING: NO. the several measures challenged in this case are violative of due process and equal
protection clause.

Every restriction upon the use of property imposed in the exercise of the police power deprives the
owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in
property without making compensation. But restriction imposed to protect the public health, safety
or morals from dangers threatened is not a taking. The restriction here in question is merely the
prohibition of a noxious use. The property so restricted remains in the possession of its owner. The
state does not appropriate it or make any use of it. The state merely prevents the owner from making
a use which interferes with paramount rights of the public. Whenever the use prohibited ceases to be
noxious — as it may because of further changes in local or social conditions — the restriction will
have to be removed and the owner will again be free to enjoy his property as heretofore.

The cases before us present no knotty complication insofar as the question of compensable taking is
concerned. To the extent that the measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the regulation of private property in
accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to
deprive such owners of whatever lands they may own in excess of the maximum area allowed, there
is definitely a taking under the power of eminent domain for which payment of just compensation is
imperative. The taking contemplated is not a mere limitation of the use of the land. What is required
is the surrender of the title to and the physical possession of the said excess and all beneficial rights
accruing to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police
power but of the power of eminent domain.

As earlier observed, the requirement for public use has already been settled for us by the Constitution
itself No less than the 1987 Charter calls for agrarian reform, which is the reason why private
agricultural lands are to be taken from their owners, subject to the prescribed maximum retention
limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration
of the constitutional injunction that the State adopt the necessary measures "to encourage and
undertake the just distribution of all agricultural lands to enable farmers who are landless to own
directly or collectively the lands they till." That public use, as pronounced by the fundamental law
itself, must be binding on us.

The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful
examination.

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the
arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the
proceedings are described as summary, the landowner and other interested parties are nevertheless
allowed an opportunity to submit evidence on the real value of the property. But more importantly,
the determination of the just compensation by the DAR is not by any means final and conclusive
upon the landowner or any other interested party, for Section 16(f) clearly provides:

Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.

The determination made by the DAR is only preliminary unless accepted by all parties concerned.
Otherwise, the courts of justice will still have the right to review with finality the said determination
in the exercise of what is admittedly a judicial function.

The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional
insofar as it requires the owners of the expropriated properties to accept just compensation therefor
in less than money, which is the only medium of payment allowed.

What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever
kind as long as they are in excess of the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular community or of a small segment of
the population but of the entire Filipino nation, from all levels of our society, from the impoverished
farmer to the land-glutted owner. Its purpose does not cover only the whole territory of this country
but goes beyond in time to the foreseeable future, which it hopes to secure and edify with the vision
and the sacrifice of the present generation of Filipinos.

Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering
the vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of
billions of pesos will be needed, far more indeed than the amount of P50 billion initially
appropriated, which is already staggering as it is by our present standards. Such amount is in fact not
even fully available at this time.

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle
is consistent both here and in other democratic jurisdictions. Thus:

Title to property which is the subject of condemnation proceedings does not vest the condemnor until
the judgment fixing just compensation is entered and paid, but the condemnor's title relates back to
the date on which the petition under the Eminent Domain Act, or the commissioner's report under
the Local Improvement Act, is filed. 51

... although the right to appropriate and use land taken for a canal is complete at the time of entry,
title to the property taken remains in the owner until payment is actually made.

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972
and declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized
farm except that "no title to the land owned by him was to be actually issued to him unless and until
he had become a full-fledged member of a duly recognized farmers' cooperative." It was understood,
however, that full payment of the just compensation also had to be made first, conformably to the
constitutional requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of
the land they acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of full-
fledged membership in the farmers' cooperatives and full payment of just compensation. Hence, it
was also perfectly proper for the Order to also provide in its Section 2 that the "lease rentals paid to
the landowner by the farmer- beneficiary after October 21, 1972 (pending transfer of ownership after
full payment of just compensation), shall be considered as advance payment for the land."

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of
the compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner. 57 No outright change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.

Therefore, the several measures challenged in this case are violative of due process and equal
protection clause.

SCOPE OF AGRICULTURAL LANDS

LUZ FARMS v. SECRETARY OF AGRARIAN REFORM

G.R. No. 86889 :  December 4, 1990.

PARAS, J.:

FACTS: President Aquino approved R.A No. 6657 a.k.a Comprehensive Agrarian Reform Law. The
Secretary of Agrarian Reform promulgated implementing production and profit-sharing as well as
implementing rules and regulations embodied in sections 32 and 11 respectively. Luz Farms and
other livestocks and poultry business assailed some of the provisions of R.A No. 6657 for being
unconstitutional. They also filed a petition for writ of preliminary injuction and temporary
restraining order against the Secretary of Agrarian Reform for enforcing the same.

ISSUE: WON the assailed provisions of R.A No. 6657 are unconstitutional.

RULING: YES. the assailed provisions of R.A No. 6657 are unconstitutional.

Under Article 13, Section 4 of the 1987 Constitution, The State shall, by law, undertake an agrarian
reform program founded on the right of farmers and regular farmworkers, who are landless, to own
directly or collectively the lands they till or, in the case of other farmworkers, to receive a just share of
the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the Congress may
prescribe, taking into account ecological, developmental, or equity considerations, and subject to the
payment of just compensation. In determining retention limits, the State shall respect the rights of
small landowners. The State shall further provide incentives for voluntary land-sharing.

Luz Farms argued that Congress in enacting the said law has transcended the mandate of the
Constitution, in including land devoted to the raising of livestock, poultry and swine in its coverage
(Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the
primary resource in this undertaking and represents no more than five percent (5%) of the total
investment of commercial livestock and poultry raisers.
The transcripts of the deliberations of the Constitutional Commission of 1986 on the meaning of the
word "agricultural," clearly show that it was never the intention of the framers of the Constitution to
include livestock and poultry industry in the coverage of the constitutionally-mandated agrarian
reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section 166 of R.A.
3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle
and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay
Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang kasama
rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker kaya hindi
kasama ang piggery, poultry at livestock workers”.

It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private
agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of
"commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to
be covered by the agrarian reform program of the State. There is simply no reason to include
livestock and poultry lands in the coverage of agrarian reform.

Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657
directing "corporate farms" which include livestock and poultry raisers to execute and implement
"production-sharing plans" (pending final redistribution of their landholdings) whereby they are
called upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their
net profits to their workers as additional compensation is unreasonable for being confiscatory, and
therefore violative of due process.

ELEMENTS OF AGRICULTURAL TENANCY

CAYETANO v. COURT OF APPEALS

G.R. No. L-62626 July 18, 1984

GUTIERREZ, JR., J.:

FACTS: Severino Manotok donated his 34 hectares piece of land to his children and grandchildren, at
that time, the property has no tenants or occupants. Macaya the overseer of the property pleaded that
he be allowed to live on the said property, so that he could guard the same. Manotok agreed, with
conditions that whenever they needed the property, Macaya and his family shall vacate immediately,
he is also entitled to plant crops and raise livestock, for only 3 hectares of the overall land area. The
Manotoks organized a corporation and prompting Macaya to pay his contribution, Manotok agreed
that instead of money, Macaya may contribute 10 cavans of palays every year, as time goes by, the 10
cavans of palay were not sufficient to cover Macaya’s contribution, Manotok requested Macaya to
increase his contribution from 10 to 20 cavans of palays, Macaya agreed, however, later on, Macaya
cannot sustain his contribution. He was then requested by Manotok to vacate the property. However,
Macaya did not vacate and instead increased his land area from 3 to 6 hectares. Macaya filed a
petition before DAR, but the latter agreed to the Manotoks, Macaya escalated the matter to the CA
where, they ruled in favor of Macaya.

ISSUE: WON a tenancy relationship exists between the parties.

RULING: NO. a tenancy relationship does not exists between the parties.

Under Republic Act No. 2263. Section 3, the essential requisites of tenancy relationship are:

1) the parties are the landholder and the tenant;

2) the subject is agricultural land;

3) there is consent;

4) the purpose is agricultural production; and

5) there is consideration

The Manotok family is engaged in the business of developing subdivisions in Metro Manila, not in
farming.

The trial court observed that a panoramic view of the property shows that the entire 34 hectares is
rolling forestal land without any flat portions except the small area which could be planted to palay.
The photographs of the disputed area show that flush to the plantings of the private respondent are
adobe walls separating expensive looking houses and residential lots from the palay and newly
plowed soil. Alongside the plowed or narrowed soil are concrete culverts for the drainage of
residential subdivisions. The much bigger portions of the property are not suitable for palay or even
vegetable crops.

Another requisite is that the parties must be landholder and tenant. Rep. Act No. 11 99 as amended
defines a landholder —

Sec. 5(b) A landholder shall mean a person, natural or juridical, who, either as owner,
lessee, usufructuary, or leg.15al possessor, lets or grants to another the use or
cultivation of his land for a consideration either in shares under the share tenancy
system, or a price certain under the leasehold tenancy system.

On the other hand, a tenant is defined as —

Sec. 5(a) A tenant shall mean a person who, himself and with the aid available from
within his immediate farm household, cultivates the land belonging to, or possessed by,
another with the latter's consent for purposes of production, sharing the produce with
 the landholder under the share tenancy system or paying to the landholder a price
certain in produce or in money or both, under the leasehold tenancy system.

Under these definitions, may Macaya be considered as a tenant and Manotok as a landholder?
Significant, as the trial court noted, is that the parties have not agreed as to their contributions of the
several items of productions such as expenses for transplanting, fertilizers, weeding and application
of insecticides, etc. In the absence of an agreement as to the respective contributions of the parties or
other terms and conditions of their tenancy agreement, the lower court concluded that no tenancy
relationship was entered into between them as tenant and landholder.

It should be noted, however, that from 1967 to the present, Macaya did not deliver any cavans of
palay to the petitioners as the latter felt that if Macaya could no longer deliver the twenty (20) cavans
of palay, he might as well not deliver any. The decision of the petitioners not to ask for anymore
contributions from Macaya reveals that there was no tenancy relationship ever agreed upon by the
parties.

The lower court further considered the fact that the amount of ten (10) cavans of palay given by
Macaya to the owners from 1957 to 1964 which was later increased to twenty (20) cavans of palay
from 1964 to 1966 was grossly disproportionate to the amount of taxes paid by the owners. The lot
was taxed as residential land in a metropolitan area. There was clearly no intention on the part of the
owners to devote the property for agricultural production but only for residential purposes. Thus,
together with the third requisite, the fourth requisite which is the purpose was also not present.

It bears re-emphasizing that from 1946 to 1956, there was no agreement as to any system of sharing
the produce of the land. The petitioners did not get anything from the harvest and private respondent
Macaya was using and cultivating the land free from any charge or expense. The situation was rather
strange had there been a tenancy agreement between Don Severino and Macaya.

Therefore, a tenancy relationship does not exists between the parties.

STANFILCO EMPLOYEES AGRARIAN REFORM BENEFICIARIES MULTI-PURPOSE

COOPERATIVE v. DOLE PHILIPPINES INC.

G.R. No. 154048               November 27, 2009

BRION, J.:

FACTS: SEARBEMCO had an agreement to DOLE, wherein they agreed that the former shall
exclusively sell banana products to DOLE, under Banana Production and Purchase Agreement. In
case that when there are rejected banana that fell short from the required standards setforth. The
SEARBEMCO shall disposed of the same to any third party which are not engaged in export
production. All disputes between parties shall also be handled by Arbitration of International
Chamber of Commerce. DOLE filed a complaint against SEARBEMCO allegding that the latter sold
rejected bananas to a third party named Oribanex which is a direct competitor of DOLE, this act of
the SEARBEMCO violated their agreement. SEARBEMCO in their reply, said that Oribanex does not
engaged in an export production, they are a mere third party who intended to consume bananas,
they further argued that, the RTC has no jurisdiction over their case as it was an agrarian dispute,
and therefore, the DARAB shall have jurisdiction.

ISSUE: WON the RTC has jurisdiction over the subject matter of the complaint of DOLE, considering
that the case involves an agrarian dispute within the exclusive jurisdiction of the DARAB

RULING: YES. the RTC has jurisdiction over the subject matter of the complaint of DOLE,
considering that the case involves an agrarian dispute within the exclusive jurisdiction of the
DARAB.

Under, Section 3(d) of RA No. 6657 is clear in defining an agrarian dispute: "any controversy relating
to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted
to agriculture, including dispute concerning farm-workers’ associations or representations of persons
in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such
tenurial arrangements. It includes any controversy relating to compensation of lands acquired under
this Act and other terms and conditions of transfer of ownership from landowners to farmworkers,
tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate
relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee."

A notable feature of RA No. 6657 and its implementing rules is the focus on agricultural lands and the
relationship over this land that serves as the basis in the determination of whether a matter falls under
DARAB jurisdiction.

For DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the
parties. x x x. In Vda. De Tangub v. Court of Appeals (191 SCRA 885), we held that the jurisdiction of the
Department of Agrarian Reform is limited to the following: a.) adjudication of all matters involving
implementation of agrarian reform; b.) resolution of agrarian conflicts and land tenure related
problems; and c.) approval and disapproval of the conversion, restructuring or readjustment of
agricultural lands into residential, commercial, industrial, and other non-agricultural uses.

The parties in the present case have no tenurial, leasehold, or any other agrarian relationship that
could bring their controversy within the ambit of agrarian reform laws and within the jurisdiction of
the DARAB. In fact, SEARBEMCO has no allegation whatsoever in its motion to dismiss regarding
any tenancy relationship between it and DOLE that gave the present dispute the character of an
agrarian dispute.

SEARBEMCO has not shown that the above-mentioned indispensable elements of tenancy relations
are present between it and DOLE. It also cannot be gleaned from the intention of the parties that they
intended to form a tenancy relationship between them. In the absence of any such intent and
resulting relationship, the DARAB cannot have jurisdiction. Instead, the present petition is properly
cognizable by the regular courts, as the CA and the RTC correctly ruled.
Therefore, the RTC has jurisdiction over the subject matter of the complaint of DOLE, considering
that the case involves an agrarian dispute within the exclusive jurisdiction of the DARAB.

MENDOZA v. GERMINO

FACTS: Mendoza filed a complaint against Narciso for forcible entry before the MTC, alleging that
the latter by strength and stealth entered and took possession of the 5 hectares property of Mendoza.
Narciso averred that his brother Benigno was the agricultural lessee of the said property and he
merely helped the latter for the cultivation of the land. Mendoza remanded the case to DARAB, in
view of the tenancy issue of Narciso.

ISSUE: whether the MTC or the DARAB has jurisdiction over the case.

RULING: The MTC has jurisdiction over the case. Jurisdiction is determined by the allegations in
the complaint.

Under Batas Pambansa Blg. 129,24 as amended by R.A. No. 7691, 25 the MTC shall have exclusive
original jurisdiction over cases of forcible entry and unlawful detainer. The RRSP 26 governs the
remedial aspects of these suits.27

Under Section 5028 of R.A. No. 6657, as well as Section 34 29 of Executive Order No. 129-A, 30 the
DARAB has primary and exclusive jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian
Reform Program, and other agrarian laws and their implementing rules and regulations.

An agrarian dispute refers to any controvers y relating to, among others, tenancy over lands devoted
to agriculture.31 For a case to involve an agrarian dispute, the following essential requisites of an
agricultural tenancy relationship must be present: (1) the parties are the landowner and the tenant; (2)
the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5)
there is personal cultivation; and (6) there is sharing of harvest or payment of rental.

Based on these allegations and reliefs prayed, it is clear that the action in the MTC was for forcible
entry.
Allegation of tenancy does not divest the MTC of jurisdiction

Although respondent Narciso averred tenancy as an affirmative and/or special defense in his answer,
this did not automatically divest the MTC of jurisdiction over the complaint. It continued to have the
authority to hear the case precisely to determine whether it had jurisdiction to dispose of the
ejectment suit on its merits.

Therefore, The MTC has jurisdiction over the case.

TALAVERA v. COURT OF APPEALS

FACTS: Laxamana filed a complaint for recovery of possession over a parcel of agricultural land. He
alleged that he was a bonafied tenant of the said land since 1958, and that Talavera took possession of
that land without his consent. it is not shown why Laxamana should voluntarily give up his sole
source of livelihood even if he needed money to pay off his debts. Or what he did from 1973 to 1984 if
the claim of the Talaveras that they worked the land themselves is correct. We are more inclined to
believe that Laxamana was forced by circumstances to sign something he did not fully understand
and then went right back to the farm and continued to work on it until [Link] RTC and CA agreed
in favor of Laxamana, and ordered his reinstatement.

ISSUE: WON the CA erred in holding that private respondent did not voluntarily surrendered the
landholding in question.

RULING: NO. the CA did not erred in holding that private respondent did not voluntarily
surrendered .lippines (Republic Act No. 3844, as amended) specifically enumerates the grounds for
the extinguishment of agricultural leasehold relations. Section 8 of the said Code provides:

Extinguishment of agricultural leasehold relation.  — The agricultural leasehold relation

established under this Code shall be extinguished by:

(1) Abandonment of the landholding without the knowledge of the

agricultural lessor;

(2) Voluntary surrender of the land holding by the agricultural lessee,

written notice of which shall be served three months in advance; or

(3) Absence of the persons under Section rune to succeed to the lessee, in
the event of death or permanent incapacity of the lessee.

Voluntary surrender, as a mode of extinguishment of tenancy relations, does not require any court
authorization considering that it involves the tenant's own volition. (see Jacinto v. Court of Appeals,
87 SCRA 263 [1978]). To protect the tenant's right to security of tenure, voluntary surrender, as
contemplated by law, must be convincingly and sufficiently proved by competent evidence. The
tenant's intention to surrender the landholding cannot be presumed, much less determined by mere
implication. Otherwise, the right of a tenant to security of tenure becomes an illusory one.

it is not shown why Laxamana should voluntarily give up his sole source of livelihood even if he
needed money to pay off his debts. Or what he did from 1973 to 1984 if the claim of the Talaveras that
they worked the land themselves is correct. We are more inclined to believe that Laxamana was
forced by circumstances to sign something he did not fully understand and then went right back to
the farm and continued to work on it until 1984.

MILESTONE REALTY AND CO., INC., v. COURT OF APPEALS

FACTS: Carolina, by virtue of deed of extrajudicial settlement, acquired a parcel of land, Lot 616. By
then, Anacleto was the tenant-leaseholder of the property. He has children namely Emilio and Celia
who also had their houses constructed on the property. Anacleto married Delia Razon, upon the
death of Anacleto, Emilio, Delia and Raymundo, helped each other to continue tilling the property.
Later on, Emilio made in writing that he was the tenant of the said property, and he intended to
return the property to Carolina in exchange of a certain amount of money. William Lim and his
companion established Milestone Inc, to acquire the property in dispute. Carolina executed a deed of
sale in favor of William Perez, for which the latter sold the property to Milestone Inc. Delia and
Raymundo filed a complaint against Carolina, Emilio, Franscisco, William Perez and Milestone Inc, to
respect the tenancy of them before PARAD. PARAD ruled in favor of Carolina [Link]. Delia and
Raymundo escalated the case to DARAB, which ruled in their favor.

ISSUE: 1. Whether or not Delia Razon Peña has a right of first priority over Emilio Peña in succeeding
to the tenancy rights of Anacleto over the subject landholding.

2. Whether or not the sales of the subject lots by Carolina Zacarias to William Perez and then to
Milestone are null and void.

RULING:

1. YES. Delia Razon Peña has a right of first priority over Emilio Peña in succeeding to the
tenancy rights of Anacleto over the subject landholding. Carolina had failed to exercise her
right to choose a substitute for the deceased tenant, from among those qualified, within the
statutory period.19 No cogent reason compels us to disturb the findings of the Court of
Appeals. As a general rule, findings of fact of the Court of Appeals are final and conclusive
and cannot be reviewed on appeal by the Supreme Court, provided they are borne out by the
record or based on substantial evidence. Section 9 of Republic Act No. 3844 is clear and
unequivocal in providing for the rules on succession to tenancy rights. A close examination of
the provision leaves no doubt as to its rationale of providing for continuity in agricultural
leasehold relation in case of death or incapacity of a party. To this end, it provides that in case
 of death or permanent incapacity of the agricultural lessee to work his landholding, the
leasehold shall continue between the agricultural lessor and the person who can cultivate the
landholding personally. In the same vein, the leasehold shall bind the legal heirs of the
agricultural lessor in case of death or permanent incapacity of the latter. It is to achieve this
continuity of relationship that the agricultural lessor is mandated by law to choose a successor-
tenant within one month from the death or incapacity of the agricultural lessee from among
the following: (1) surviving spouse; (2) eldest direct descendant by consanguinity; or (3) the
next eldest direct descendant or descendants in the order of their age. Should the lessor fail to
exercise his choice within one month from the death of the tenant, the priority shall be in
accordance with the aforementioned order. 

Applying Section 9 of Republic Act 3844, in the light of prevailing jurisprudence, it is

undeniable that respondent Delia Razon Peña, the surviving spouse of the original tenant,
Anacleto Peña, is the first in the order of preference to succeed to the tenancy rights of her
husband because the lessor, Carolina Zacarias, failed to exercise her right of choice within the
one month period from the time of Anacleto's death.

2. NO. the sales of the subject lots by Carolina Zacarias to William Perez and then to Milestone
are not null and void. There is no legal basis for such declaration. Lest it be forgotten, it is
Carolina Zacarias who is the owner of the subject land and both Emilio Peña and Delia Razon
Peña only succeeded to the tenancy rights of Anacleto.

As an owner, Carolina has the right to dispose of the property without other limitations than
those established by law.24 This attribute of ownership is impliedly recognized in Sections 10,
11 and 12 of Republic Act No. 3844, 25 where the law allows the agricultural lessor to sell the
landholding, with or without the knowledge of the agricultural lessee and at the same time
recognizes the right of preemption and redemption of the agricultural lessee. Thus, the
existence of tenancy rights of agricultural lessee cannot affect nor derogate from the right of
the agricultural lessor as owner to dispose of the property. The only right of the agricultural
lessee or his successor in interest is the right of preemption and/or redemption.

In the case at bar, it is undisputed that Carolina became the absolute owner of the subject
landholding by virtue of Deed of Extrajudicial Settlement and Affidavit of Settlement executed
by the other heirs of Alfonso Olympia and Spouses Claro and Cristina Zacarias. As the owner,
it is within her right to execute a deed of sale of said landholding, without prejudice however
to the tenancy rights and the right of redemption of Delia Razon Peña. In Manuel,26 we held
that the tenancy relationship is not affected or severed by the change of ownership. The new
owner is under the obligation to respect and maintain the tenant's landholding. In turn, Delia
Razon Peña, as the successor tenant, has the legal right of redemption. This right of
redemption is statutory in character. It attaches to a particular landholding by operation of
law.
VILLAVIZA v. PANGANIBAN

FACTS: Quirino Capalad, were one of the tenants of the land owned by Dominador Fajardo, who
gave out the land for lease. Quirino plowed the land without the knowledge of the respondents, it
only came to their knowledge when they, themselves witnessed that the land were already plowed.
The respondents demanded for their reinstatement on the said land, Quirino promised that he will,
however, he never fulfilled his promise.

ISSUE: WON the conclusion of the lower court is supported by substantive evidence

RULING: YES. A tenant's right to be respected in his tenure under Republic Act 1199, as amended, is
an obligation of the landholder created by law, and an action for violation thereof prescribes in ten
years under No. 2 of Article 1144 of the Civil Code. The respondents were ousted from their
landholdings in June, 1955, they filed the present action on 31 March 1960; therefore, the period of
limitation had not expired.

The premises for the award are erroneous. Under section 27(1) of Republic Act 1199, as amended, a
tenant's earnings may not be deducted from the damages because the said section positively provides
that the tenant's freedom to earn elsewhere is to be added ("in addition") to his right to damages in
case of illegal ejectment (Lustre, et al. vs. CAR, et al., L-19654, March 21, 1964). Nor can it be said that
the respondents-tenants are guilty of laches for having unnecessarily delayed to Capalad's promises
to reinstate them.

The amount of the award to each respondent should not, however, be disturbed because the
respondents' non-appeal from the decision indicates their satisfaction therewith and a waiver of any
amounts other than those indicated in the decision