FIRST DIVISION

HEIRS OF ENRIQUE TAN, SR., G.R. No. 145568

namely, NORMA TAN,
JEANETTE TAN, Present:
JULIETA TAN, Davide, Jr., C.J.,
ROMMEL TAN, and Chairman,
ENRIQUE TAN, JR., Quisumbing,
All represented by Ynares-Santiago,
ROMMEL TAN, Carpio, and
Petitioners, Azcuna, JJ.

- versus -
Promulgated:
REYNALDA POLLESCAS,
Respondent. November 17, 2005

x-----------------------------------------------------------------------------------------x

DECISION

CARPIO, J.:

The Case

Before the Court is a petition for review[1] of the Decision[2] of the Court of Appeals promulgated on 31

August 2000 in CA-G.R. SP No. 48823. The Court of Appeals affirmed the decision of the Department

of Agrarian Reform Adjudication Board ordering petitioners to respect respondents possession and

cultivation of the land.

The Antecedents
 Petitioners Norma Tan, Jeanette Tan, Julieta Tan, Rommel[3] Tan and Enrique Tan, Jr. (Tan Heirs)

are co-owners of a coconut farmland (Land) located at Labo, Ozamis City with an area of 25,780 square

meters.[4]

Esteban Pollescas (Esteban) was the original tenant of the Land. Upon Estebans death in 1991, his

son Enrique Pollescas (Enrique) succeeded him and was appointed as tenant by the landowner Enrique

Tan (Tan).[5]

However, respondent Reynalda Pollescas (Reynalda), Estebans surviving second spouse,

demanded that Tan recognize her as Estebans successor. Tan did not accede. Thus, Reynalda filed with

the Department of Agrarian Reform Adjudication Board of Ozamis City (DARAB-Ozamis) a complaint

for Annulment of Compromise Agreement, Quieting of Tenancy Relationship and damages.[6]

In its Decision dated 28 April 1993, the DARAB-Ozamis declared Reynalda as the lawful tenant

of the Land. The DARAB-Ozamis apportioned the harvests between the Tan Heirs and Reynalda based

on the customary sharing system which is 2/3 to the landowner and 1/3 to the tenant.[7]

On the following harvest dates, 11 and 19 of June, 9 September, 6 and 13 of December 1993,

Reynalda failed to deliver to the Tan Heirs 2/3 of the harvests amounting to P3,656.70. The Tan Heirs

demanded Reynalda to pay such amount.[8] However, Reynalda ignored the demand.

Consequently, the Tan Heirs filed a complaint for estafa against Reynalda with the Municipal Trial

Court in Cities, Ozamis City, Branch 2.[9] The trial court found Reynalda guilty of estafa[10] and sentenced

her to five months of arresto mayor maximum to two years of prision correccional minimum and ordered

her to pay the Tan Heirs P3,656.70, the amount which she misappropriated.[11]

Subsequently, for Reynaldas continued failure to deliver their share, the Tan Heirs filed with the

DARAB, Misamis Occidental (DARAB-Misamis Occidental) an ejectment case.[12]

On 18 September 1996, the DARAB-Misamis Occidental[13] ruled in favor of the Tan Heirs. The

DARAB-Misamis Occidental disposed of the case in this wise:

 WHEREFORE, premises considered, decision is hereby rendered terminating the tenancy
relationship of herein parties.

Consequently, respondent Reynalda Pollescas is ordered to vacate the subject landholding

and turn-over its possession and cultivation to the plaintiffs.

The MARO of Ozamis City is likewise ordered to investigate and verify in the subject
landholding if there are actual farmer-cultivators in the area who may qualify as lessees thereof,
who then should be placed under leasehold pursuant to the mandate of Section 12, R.A. 6657.

SO ORDERED.[14]

Aggrieved by the decision, Reynalda appealed to the DARAB, Diliman, Quezon City (DARAB).

The DARAB reversed the decision of the DARAB-Misamis Occidental, to wit:

WHEREFORE, premises considered, the appealed decision dated 18 September 1996 is

hereby REVERSED and SET ASIDE and a new one is rendered ordering the landowners to respect
the peaceful possession and cultivation of the subject landholding.

Respondent-Appellant is hereby ordered to pay her unpaid leasehold rentals.

SO ORDERED.[15]

The Tan Heirs appealed the decision of the DARAB to the Court of Appeals. The Court of Appeals

affirmed the decision of the DARAB ordering the Tan Heirs to respect Reynaldas possession and

cultivation of the Land.

Hence, this petition.

The Ruling of the Court of Appeals

In affirming the decision of the DARAB, the Court of Appeals cited Roxas y Cia v. Cabatuando, et

al.[16] where this Court held that x x x mere failure of a tenant to pay the landholders share does not
necessarily give the latter the right to eject the former when there is lack of deliberate intent on the part of

the tenant to pay x x x.

The Court of Appeals held that Reynaldas failure to deliver the full amount of the Tan Heirs share could

not be considered as a willful and deliberate intent to deprive the Tan Heirs of their share. The Court of

Appeals held that Reynalda honestly believed that she was entitled to a share of the harvests in 1992-1993

while the case for Annulment of Compromise Agreement was pending before the DARAB-Ozamis.

Reynalda also believed that she could effect a set-off for her 1992-1993 share from the 1994 share of the

Tan Heirs.

The Court of Appeals further declared that the rental must be legal to consider non-payment of such as a

ground for ejectment. The appellate court stated that:

x x x for a tenants failure to pay rental to come within the intendment of the law as a ground
for ejectment, it is imperative that the rental must be legal. What the law contemplates is the
deliberate failure of the tenant to pay the legal rental, not the failure to pay an illegal rental. A
stipulation in a leasehold contract requiring a lessee to pay an amount in excess of the amount
allowed by law is considered contrary to law, morals or public policy. Such contract is null and
void as to the excess.

It is noteworthy that Section 34 of RA 3844 provides that the consideration for the lease of riceland
and lands devoted to other crops shall not be more than the equivalent of twenty-five per centum
of the average normal harvest. The tenant is obliged to pay a maximum of 25% of the normal
harvest and not two thirds as in the case at bar. Thus, even admitting that a set-off was effected in
favor of respondent for her 1992-1993 share, yet enough is left to cover the 25% share of the
petitioners for the 1994 crop.[17]

Citing Section 8 of Republic Act No. 3844 (RA 3844), the Court of Appeals also held [t]here is nothing

in the law that makes failure to deliver share a ground for extinguishment of leasehold

agreement.[18] Reynaldas failure to deliver fully the share of the Tan Heirs is not sufficient to disturb the

agricultural leasehold relation.[19]

The Issues

In their Memorandum, the Tan Heirs raise the following issues:

I
 WHETHER THERE IS NO EXCEPTION TO THE GROUNDS FOR
EXTINGUISHMENT OF LEASEHOLD RELATION UNDER SECTION 8 OF RA 3844.

II
WHETHER THE COURT OF APPEALS CORRECTLY RULED THAT REYNALDA
IS OBLIGED TO PAY ONLY 1/4 OR 25% OF THE NORMAL HARVEST AND NOT
2/3 WHEN THE SUBJECT LAND WAS NOT YET PLACED UNDER THE
LEASEHOLD SYSTEM PURSUANT TO SECTION 12 OF RA 6657.[20]

The Ruling of the Court

The petition lacks merit.

At the outset, the Court declares that RA 6657 is the governing statute in this case.

On 8 August 1963, RA 3844 or the Agricultural Land Reform Code[21] abolished and outlawed

share tenancy and put in its stead the agricultural leasehold system.[22] On 10 September 1971, Republic

Act No. 6389 (RA 6389) amending RA 3844 (RA 3844 as amended) declared share tenancy relationships

as contrary to public policy.[23] RA 6389 did not entirely repeal Republic Act No. 1199[24] and RA 3844

even if RA 6389 substantially modified them.[25] Subsequently, Republic Act No. 6657 or the

Comprehensive Agrarian Reform Law of 1988 (RA 6657) took effect on 15 June 1988. RA 6657 only

expressly repealed Section 35 of RA 3844 as amended.[26] Thus, RA 6657 is the prevailing law in this

case. The harvests in dispute are for the years 1992-1993 or after the effectivity of RA 6657.

No ground for dispossession of landholding

Section 7 of RA 3844 as amended provides that once there is a leasehold relationship, as in the

present case, the landowner cannot eject the agricultural tenant from the land unless authorized by the

court for causes provided by law.[27] RA 3844 as amended expressly recognizes and protects an
agricultural leasehold tenants right to security of tenure.[28]
 Section 36 of RA 3844 as amended enumerates the grounds for dispossession of the tenants
landholding, to wit:

SEC. 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 landholding is declared by the department head upon recommendation of the
National Planning Commission to be suited for residential, commercial, industrial or some other
urban purposes: Provided, That the agricultural lessee shall be entitled to disturbance
compensation equivalent to five times the average of the gross harvests on his landholding during
the last five preceding calendar years;

(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.

In the instant case, the Tan Heirs seek Reynaldas ejectment from the Land on the ground of non-

payment of lease rental.

The Court agrees with the Court of Appeals that for non-payment of the lease rental to be a valid

ground to dispossess the agricultural lessee of the landholding, the amount of the lease rental must first of

all be lawful. If the amount of lease rental claimed exceeds the limit allowed by law, non-payment of lease
rental cannot be a ground to dispossess the agricultural lessee of the landholding.
 Section 34 of RA 3844 as amended[29] mandates that not x x x more than 25% of the average

normal harvest shall constitute the just and fair rental for leasehold. In this case, the Tan Heirs demanded

Reynalda to deliver 2/3 of the harvest as lease rental, which clearly exceeded the 25% maximum amount

prescribed by law. Therefore, the Tan Heirs cannot validly dispossess Reynalda of the landholding for

non-payment of rental precisely because the lease rental claimed by the Tan Heirs is unlawful.

Even assuming Reynalda agreed to deliver 2/3 of the harvest as lease rental, Reynalda is not

obliged to pay such lease rental for being unlawful. There is no legal basis to demand payment of such

unlawful lease rental. The courts will not enforce payment of a lease rental that violates the law. There

was no validly fixed lease rental demandable at the time of the harvests. Thus, Reynalda was never in

default.

Reynalda and the Tan Heirs failed to agree on a lawful lease rental. Accordingly, the DAR must

first fix the provisional lease rental payable by Reynalda to the Tan Heirs pursuant to the second paragraph

of Section 34 of RA 3844 as amended.[30] Until the DAR has fixed the provisional lease rental, Reynalda

cannot be in default in the payment of lease rental since such amount is not yet determined. There can be

no delay in the payment of an undetermined lease rental because it is impossible to pay an undetermined

amount. That Reynalda is not yet in default in the payment of the lease rental is a basic reason why she

cannot be lawfully ejected from the Land for non-payment of rental.[31]

No ground for extinguishment of leasehold relation

The Court also holds that there is no ground for the extinguishment of leasehold relation in this

case.

Only in the instances stated in Sections 8 and 28 of RA 3844 as amended can leasehold relation

be terminated. These provisions read:

SEC. 8. 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 landholding by the agricultural lessee, written notice of
which shall be served three months in advance; or

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

SEC. 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 contract 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.

The case of Garchitorena v. Panganiban which the Tan Heirs invoked to justify the

extinguishment of leasehold relation does not appear on page 339 of Volume 8 of the Supreme Court

Reports Annotated. What is printed on such page is the case of Republic v. Perez with docket number L-

16112 and promulgated on 29 June 1963. For making a wrong citation, the Court admonishes Atty. Jesus

S. Anonat, counsel for the Tan Heirs, to be more careful when citing jurisprudence. The Court reminds

him of his duty not to knowingly misquote the text of a decision or authority[32] lest he be guilty of

misleading the Court.

WHEREFORE, the Court DENIES the petition and AFFIRMS the assailed Decision dated 31 August

2000 of the Court of Appeals in CA-G.R. SP No. 48823. The Court REMANDS this case to the

Department of Agrarian Reform for the determination of the provisional lease rental. Costs against

petitioners.

SO ORDERED.
 SECOND DIVISION

G.R. No. 179643 June 3, 2013

ERNESTO L. NATIVIDAD, Petitioner,

vs.
FERNANDO MARIANO, ANDRES MARIANO and DOROTEO GARCIA, Respondents.

DECISION

BRION, J.:

We resolve in this Rule 45 petition for review on certiorari1 the challenge to the November 28, 2006 decision 2 of
the Court of Appeals (CA) in CA-G.R. SP No. 89365. The assailed decision affirmed the February 21, 2005
decision3 of the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No. 10051. The
DARAB ruling, in turn, reversed the decision4 dated October 27, 1999 of the Provincial Agrarian Reform
Adjudication (PARAD) of Nueva Ecija granting the petition for ejectment and collection of back lease rentals filed
by petitioner Ernesto L. Natividad against respondents Fernando Mariano, Andres Mariano and Doroteo Garcia.

The Factual Antecedents

At the core of the dispute in this case is a 66,997 square meter parcel of agricultural land (subject property)
situated in Sitio Balanti, Gapan, Nueva Ecija, owned and registered in the name of Esperanza Yuzon under
Transfer Certificate of Title No. NT-15747. The respondents are the tenants of the subject property. 5

On December 23, 1998, Ernesto filed with the PARAD a petition 6 for ejectment and collection of back lease
rentals against the respondents. In his petition, Ernesto alleged that he purchased the subject property in a public
auction held on July 17, 1988. Immediately after the purchase, he verbally demanded that the respondents pay
the lease rentals. Despite his repeated demands, the respondents refused to pay, prompting him to orally request
the respondents to vacate the subject property. He filed the petition when the respondents refused his demand to
vacate.

Although duly served with summons, the respondents failed to answer Ernestos petition and were deemed to
have waived their right to present evidence. The PARAD allowed the case to proceed ex parte.

The PARAD granted Ernestos petition in its October 27, 1999 decision, and ordered the respondents to vacate
the subject property and to pay the lease rentals in arrears. The PARAD found merit in Ernestos unrebutted
allegations.

The respondents did not appeal the decision despite due notice. 7 Thus, the PARADs decision became final and
executory, and on April 6, 2000, the PARAD granted Ernestos motion for the issuance of a writ of execution. 8

On May 4, 2000, the respondents, through a private law firm, filed an Appearance and Petition for Relief from
Judgment9 (first petition) on the ground of excusable negligence. The respondents claimed that their inexperience
and lack of knowledge of agrarian reform laws and the DARAB Rules of Procedure prevented them from
appearing before the PARAD in due course; these also led to their belated discovery of the approved Barangay
Committee for Land Production (BCLP) valuation. They cited these reasons as their excusable negligence
justifying the grant of the relief from judgment prayed for.

In answer to Ernestos allegations, the respondents denied knowledge of Ernestos purchase of the subject
property and, alternatively, disputed the validity of the purchase. They averred that they had been paying lease
rentals to the landowner. In support of their position, the respondents attached copies of rental payment
receipts10 for the crop years 1988-1998 issued by Corazon Quiambao and Laureano Quiambao, the authorized
representatives of Aurora Yuzon.11 They added that Diego Mariano, the father of respondents Andres and
Fernando, and respondent Doroteo were issued Certificates of Land Transfer (CLTs) on July 28, 1973.12 Andres
and Fernando added that, as heirs of Diego, they are now the new beneficiaries or allocatees of the lots covered
by Diegos CLT.13 Finally, the respondents pointed out that as of the year 2000, they have an approved valuation
report issued by the BCLP.

On June 7, 2000, the PARAD denied the respondents first petition, finding no sufficient basis for its grant. 14 The
PARAD declared that none of the grounds for the grant of a petition for relief exists and can be invoked against its
October 27, 1999 decision, or could have prevented the respondents from taking an appeal. The records show
that the respondents were duly notified of the scheduled hearing date and of the issuance of its decision; despite
due notices, the respondents failed to appear and to appeal, for which reasons the decision became final. Lastly,
the PARAD considered that the respondents petition had been filed out of time. On July 13, 2000, the PARAD
denied15 the respondents motion for reconsideration of the June 7, 2000 order. 16

On June 23, 2000, the respondents, this time represented by the Agrarian Legal Assistance, Litigation Division of
the Department of Agrarian Reform (DAR), filed a second Petition for Relief from Judgment (second
petition).17The respondents repeated the allegations in their first petition, but added lack of sufficient financial
means as the reason that prevented them from seeking appropriate legal assistance.

On July 20, 2000, the PARAD denied the respondents second petition based on technical grounds. When the
PARAD denied their subsequent motion for reconsideration,18 the respondents appealed to the DARAB.19

The Ruling of the DARAB

On February 21, 2005, the DARAB granted the respondents appeal and reversed the PARADs October 27, 1999
decision.20 The DARAB ordered Ernesto to maintain the respondents in the peaceful possession and cultivation of
the subject property, and at the same time ordered the respondents to pay the rentals in arrears as computed by
the Municipal Agrarian Reform Officer (MARO). Unlike the PARAD, the DARAB found the evidence insufficient to
support Ernestos allegation that the respondents did not pay the lease rentals. The respondents respective
receipts of payment, the DARAB noted, controverted Ernestos claim.

Ernesto appealed the February 21, 2005 DARAB decision to the CA via a petition for review under Rule 43 of the
Rules of Court.21

The Ruling of the CA

In its November 28, 2006 decision, the CA denied Ernestos petition for review for lack of merit. 22 The CA declared
that Ernesto failed to prove by clear, positive and convincing evidence the respondents failure to pay the lease
rentals and, in fact, never repudiated the authority of Corazon and Laureano to receive rental payments from the
respondents. The CA ruled that under Section 7 of Republic Act (R.A.) No. 3844, once a leasehold relationship is
established, the landowner-lessor is prohibited from ejecting a tenant-lessee unless authorized by the court for
causes provided by law. While non-payment of lease rentals is one of the enumerated causes, the landowner
(Ernesto) bears the burden of proving that: (1) the tenant did not pay the rentals; and (2) the tenant did not suffer
crop failure pursuant to Section 36 of R.A. No. 3844. As Ernesto failed to prove these elements, no lawful cause
existed for the ejectment of the respondents as tenants.

The CA also declared that the DARAB did not err in taking cognizance of the respondents appeal and in
admitting mere photocopies of the respondents receipts of their rental payments. The CA held that the DARAB
Rules of Procedure and the provisions of R. A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988)
specifically authorize the DARAB to ascertain the facts of every case and to decide on the merits without regard
to the laws technicalities. The CA added that the attendant facts and the respondents substantive right to
security of tenure except the case from the application of the doctrine of immutability of judgments.

Finally, the CA noted that the issues Ernesto raised were factual in nature. It was bound by these findings since
the findings of the DARAB were supported by substantial evidence.

Ernesto filed the present petition after the CA denied his motion for reconsideration23 in its August 10, 2007
resolution.24
 The Petition

Ernesto imputes on the CA the following reversible errors: first, the finding that he authorized Corazon and
Laureano to receive the respondents lease rentals on his behalf; second, the conclusion that the respondents
cannot be ejected since they were excused from paying lease rentals to him for lack of knowledge of the legality
of the latters acquisition of the subject property; and third, the ruling that the final and fully executed decision of
the PARAD could still be reopened or modified.

Ernesto argues that the respondents admission in their pleadings and the rental receipts, which they submitted to
prove payment, evidently show that the respondents paid the lease rentals to Corazon and Laureano as
representatives of Esperanza and not as his representatives.25

Ernesto further insists that the respondents cannot deny knowledge of the legality of his acquisition of the subject
property and are, therefore, not excused from paying the lease rentals to him. He claims that the respondents had
long since known that he is the new owner of the subject property when the petition for the annulment of the levy
and execution sale, which the respondents filed against him, was decided in his favor.26

Finally, Ernesto claims that the CA erred in disregarding the doctrine of immutability of final judgments simply on
the respondents feigned ignorance of the rules of procedure and of the free legal assistance offered by the
DARAB. Ernesto maintains that despite due receipt of their respective copies of the PARADs decision, the
respondents nevertheless still failed to seek reconsideration of or to appeal the PARADs decision. Ernesto
concludes that the respondents inaction rendered the PARADs decision final and fully executed, barring its
reopening or modification.27

The Case for the Respondents

In their comment,28 the respondents maintain that Ernestos purchase of the subject property is null and void. The
respondents contend that both Diego and Doroteo acquired rights over the subject property when they were
granted a CLT in 1973.29 Ernestos subsequent purchase of the subject property via the execution sale cannot
work to defeat such rights as any sale of property covered by a CLT violates the clear and express mandate of
Presidential Decree (P.D.) No. 27, i.e., that title to land acquired pursuant to the Act is not transferable.30 In fact,
when - through the PARADs final decision - he ejected the respondents from the subject property, Ernesto also
violated R.A. No. 6657.31

The respondents further contend that the doctrine of immutability of judgments does not apply where substantive
rights conferred by law are impaired, such as the situation obtaining in this case. The courts power to suspend or
disregard rules justified the action taken by the DARAB (as well as the CA in affirming the former) in altering the
decision of the PARAD although it had been declared final.32

Lastly, the respondents posit that the CA did not err in upholding the DARABs ruling since the findings of facts of
quasi-judicial bodies, when supported by substantial evidence, as in this case, bind the CA. 33

The Issue

The case presents to us the core issue of whether Ernesto had sufficient cause to eject the respondents from the
subject property.

The Courts Ruling

We DENY the petition.

Preliminary considerations

As a preliminary matter, we reiterate the rule that a petition for review on certiorari under Rule 45 of the Rules of
Court shall raise only questions of law.34 A question that invites a review of the factual findings of the lower
tribunals or bodies is beyond the scope of this Courts power of review35 and generally justifies the dismissal of the
petition.

The Court, as a rule, observes this Rule 45 proscription as this Court is not a trier of facts. 36 The resolution of
factual issues is the function of the lower tribunals or bodies whose findings, when duly supported by substantial
evidence and affirmed by the CA, bind this Court.37

The reviewable question sanctioned by a Rule 45 petition is one that lies solely on what the law provides on the
given set of circumstances.38 In the present petition, Ernesto essentially argues that the CA erred in ruling that he
failed to sufficiently prove any cause to eject the respondents from the subject property. In effect, Ernesto asks
this Court to re-examine and reevaluate the probative weight of the evidence on record. These are factual
inquiries beyond the reach of this petition. 39

Under exceptional circumstances, however, we have deviated from the above rules. In the present case, the
PARAD gave credit to Ernestos claim that the respondents did not pay the lease rentals. The DARAB, in
contrast, found Ernestos claim unsubstantiated. This conflict in the factual conclusions of the PARAD and the
DARAB on the alleged non-payment by the respondents of the lease rentals is one such exception to the rule that
only questions of law are to be resolved in a Rule 45 petition.40 Thus, we set aside the above rules under the
circumstances of this case, and resolve it on the merits.

On the issue of the DARABs grant of the respondents appeal;

Doctrine of immutability of judgments

We cannot blame Ernesto for insisting that the PARAD decision can no longer be altered. The doctrine of
immutability of final judgments, grounded on the fundamental principle of public policy and sound practice, is well
settled. Indeed, once a decision has attained finality, it becomes immutable and unalterable and may no longer be
modified in any respect,41 whether the modification is to be made by the court that rendered it or by the highest
court of the land.42 The doctrine holds true even if the modification is meant to correct erroneous conclusions of
fact and law.43 The judgment of courts and the award of quasi-judicial agencies must, on some definite date fixed
by law, become final even at the risk of occasional errors.44 The only accepted exceptions to this general rule are
the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any party, void
judgments, and whenever circumstances transpire after the finality of the decision which render its execution
unjust and inequitable.45

This doctrine of immutability of judgments notwithstanding, we are not persuaded that the DARAB and the CA
erred in reopening, and ruling on the merits of the case. The broader interests of justice and equity demand that
we set aside procedural rules as they are, after all, intended to promote rather than defeat substantial justice. 46 If
the rigid and pedantic application of procedural norms would frustrate rather than promote justice, the Court
always has the power to suspend the rules or except a particular case from its operation, 47 particularly if defects of
jurisdiction appear to be present. This is the precise situation that we presently find before this Court.

In the present petition, the DARAB granted the respondents appeal, despite the lapse of ten months from the
respondents notice of the PARADs decision, because the PARAD denied the respondents petition for relief from
judgment simply on a sweeping declaration that none of the grounds for the grant of the petition exists and that
the petition had been filed out of time. The records, however, sufficiently contradict the PARADs reasons for
denying the respondents petition for relief; not only do we find justifiable grounds for its grant, we also find that
the respondents filed their petition well within the prescriptive period. Thus, the PARAD effectively and gravely
abused its discretion and acted without jurisdiction in denying the petition for relief from judgment.

A petition for relief from the judgment of the PARAD is governed by Section 4, Rule IX of the 1994 DARAB Rules
of Procedure48 (the governing DARAB rules at the time Ernesto filed his complaint). It reads in part:

SECTION 4. Relief from Judgment. A petition for relief from judgment must be verified and must be based on
grounds of fraud, accident, mistake and excusable neglect x x x; Provided, that the petition is filed with the
Adjudicator a quo within three (3) months from the time the fraud, accident, mistake or excusable neglect was
discovered and six (6) months from notice of order, resolution or decision from which relief is sought. [italics
supplied; emphasis ours]

A reading of Section 4 shows that four grounds justify the grant of the petition for relief from judgment, namely:
fraud, accident, mistake and excusable negligence. The same provision also presents two periods that must be
observed for such grant 90 days and six months.

In their first and second petitions, the respondents invoked the ground of excusable negligence. They alleged that
they failed to appear before the PARAD due to their inexperience and ignorance of agrarian reform laws and of
the DARAB Rules of Procedure, as well as indigence. These circumstances their averred ignorance coupled
with financial constraints if not outright poverty - taken altogether sufficiently convince us that the respondents
negligence is more than excusable and constitutes a justifiable ground for the grant of their petition for relief.

We are also convinced that the respondents complied with the twin period requirement set by Section 4, Rule IX
of the 1994 DARAB Rules of Procedure. First, the records show that the respondents received a copy of the
PARADs October 27, 1999 decision on December 10, 1999, at the earliest; they filed their first petition on May 4,
2000 or five months after. Second, following our above discussion that the respondents had sufficiently shown
grounds for the grant of their petition, we perforce count the 90-day period from the respondents discovery of
their excusable negligence. We construe this date as the time when the respondents discovered the adverse
consequence of their failure to answer, seek reconsideration or appeal the PARADs decision, which was when
they were evicted from the subject property on June 9, 200049 or 35 days before they filed their first petition.
Clearly, the respondents filed their petition well within 6 months from their notice of the PARADs decision and
within 90 days from the discovery of their excusable negligence.

Based on these considerations, we are convinced that the DARAB did not err in granting the respondents appeal
despite the procedural lapses. Under Section 3, Rule I of the 1994 DARAB Rules of Procedure, 50 the DARAB and
its adjudicators "shall not be bound by technical rules of procedure and evidence as prescribed in the Rules of
Court, but 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." The same provision is essentially embodied in R.A. No. 3844 upon which Ernesto heavily relied. In our
view, considerations of equity, justice and jurisdiction surround this case, justifying the relaxation of the rules and
the DARABs grant of the respondents appeal.

In sum, we rule that the DARAB correctly allowed the respondents appeal despite the lapse of the reglementary
period. Accordingly, we cannot impute error on the CA in not reversing the DARABs decision simply under the
doctrine of immutability of judgments.

Non-payment of lease rentals as ground for eviction of tenants;

Landowner with burden to prove sufficient cause for eviction

Section 7 of R.A. No. 3844 ordains that once the tenancy relationship is established, a tenant or agricultural
lessee is entitled to security of tenure.51 Section 36 of R.A. No. 3844 strengthens this right by providing that the
agricultural lessee has the right to continue the enjoyment and possession of the landholding and shall not be
disturbed in such possession except only upon court authority in a final and executory judgment, after due notice
and hearing, and only for the specifically enumerated causes.52 The subsequent R.A. No. 6657 further reiterates,
under its Section 6, that the security of tenure previously acquired shall be respected. Finally, in order to protect
this right, Section 37 of R.A. No. 3844 rests the burden of proving the existence of a lawful cause for the
ejectment of the agricultural lessee on the agricultural lessor. 53

Ernestos petition for ejectment against the respondents was anchored precisely on the latters alleged non-
payment of the lease rentals beginning 1988 until 1998 despite his repeated verbal demands. When confronted
with the respondents defense of due payment with supporting documentary evidence of it, Ernesto countered that
their payments should not be considered as he did not authorize Corazon and Laureano to receive the payments
on his behalf.
These allegations pose to us three essential points that we need to address. First, whether Ernesto indeed made
demands on the respondents for the payment of the lease rentals; second, assuming that Ernesto made such
demands, whether the respondents deliberately failed or continuously refuse to pay the lease rentals; and third,
whether the lease rentals paid by the respondents to Corazon and Laureano are valid.

We rule in the NEGATIVE on the first point.

Our review of the records shows that Ernesto did not present any evidence, such as the affidavit of the person or
persons present at that time, to prove that he demanded from the respondents the payment of the lease rentals.
We, therefore, cannot accord any merit to his claim that he made such demands. His allegation, absent any
supporting evidence, is nothing more than a hollow claim under the rule that he who alleges a fact has the burden
of proving it as mere allegation is not evidence.54 Thus, Ernesto should be deemed to have made his demand only
at the time he filed the petition for ejectment before the PARAD. At this point, the respondents were not yet in
delay55 and could not be deemed to have failed in the payment of their lease rentals.

We again rule in the NEGATIVE on the second point.

Non-payment of the lease rentals whenever they fall due is a ground for the ejectment of an agricultural lessee
under paragraph 6, Section 36 of R.A. No. 3844.56 In relation to Section 2 of Presidential Decree (P.D.) No.
816,57 deliberate refusal or continued refusal to pay the lease rentals by the agricultural lessee for a period of two
(2) years shall, upon hearing and final judgment, result in the cancellation of the CLT issued in the agricultural
lessees favor.

The agricultural lessee's failure to pay the lease rentals, in order to warrant his dispossession of the landholding,
must be willful and deliberate and must have lasted for at least two (2) years. The term "deliberate" is
characterized by or results from slow, careful, thorough calculation and consideration of effects and
consequences, while the term "willful" is defined, as one governed by will without yielding to reason or without
regard to reason.58 Mere failure of an agricultural lessee to pay the agricultural lessor's share does not necessarily
give the latter the right to eject the former absent a deliberate intent on the part of the agricultural lessee to pay.59

In the present petition, we do not find the respondents alleged non-payment of the lease rentals sufficient to
warrant their dispossession of the subject property. The respondents alleged non-payment did not last for the
required two-year period. To reiterate our discussion above, the respondents rental payments were not yet due
and the respondents were not in default at the time Ernesto filed the petition for ejectment as Ernesto failed to
prove his alleged prior verbal demands. Additionally, assuming arguendo that the respondents failed to pay the
lease rentals, we do not consider the failure to be deliberate or willful. The receipts on record show that the
respondents had paid the lease rentals for the years 1988-1998. To be deliberate or willful, the non-payment of
lease rentals must be absolute, i.e., marked by complete absence of any payment. This cannot be said of the
respondents case. Hence, without any deliberate and willful refusal to pay lease rentals for two years, the
respondents ejectment from the subject property, based on this ground, is baseless and unjustified.

Finally, we rule in the AFFIRMATIVE on the third point.

Ernesto purchased the subject property in 1988. However, he only demanded the payment of the lease rentals in
1998. All the while, the respondents had been paying the lease rentals to Corazon and Laureano. With no
demand coming from Ernesto for the payment of the lease rentals for ten years, beginning from the time he
purchased the subject property, the respondents thus cannot be faulted for continuously paying the lease rentals
to Corazon and Laureano. Ernesto should have demanded from the respondents the payment of the lease rental
soon after he purchased the subject property. His prolonged inaction, whether by intention or negligence, in
demanding the payment of the lease rentals or asserting his right to receive such rentals, at the very least, led the
respondents to consider Corazon and Laureano to still be the authorized payees of the lease rentals, given the
absence of any objection on his part.

Import of the respondents CLT

Diego and respondent Doroteo were undoubtedly awarded CLTs over the subject property pursuant to P.D. No.
27. Thus, we agree with their position that they have acquired rights over the subject property and are in fact
deemed owners of it.

A CLT is a document that evidences an agricultural lessees inchoate ownership of an agricultural land primarily
devoted to rice and corn production.60 It is the provisional title of ownership61 issued to facilitate the agricultural
lessees acquisition of ownership over the landholding. The transfer of the landholding to the agricultural lessee
under P.D. No. 27 is accomplished in two stages: (1) issuance of a CLT to a farmer-beneficiary as soon as the
DAR transfers the landholding to the farmer-beneficiary in recognition that said person is a "deemed owner"; and
(2) issuance of an Emancipation Patent as proof of full ownership of the landholding upon full payment of the
annual amortizations or lease rentals by the farmer-beneficiary.62

The CLTs of Diego and of respondent Doroteo were issued in 1973. Thus, as of 1973, Diego and respondent
Doroteo were deemed the owners of the subject property pursuant to P.D. No. 27, but subject to the compliance
with certain conditions and requirements, one of which was the full payment of the monthly amortization or lease
rentals to acquire absolute ownership.63

In the event the tenant-farmer defaults in the payment of the amortization, P.D. No. 27 ordains that the
amortization due shall be paid by the farmers cooperative where the defaulting tenant-farmer is a member, with
the cooperative having a right of recourse against the farmer. Thus, if the tenant-farmer defaults, the landowner is
assured of payment since the farmers cooperative will assume the obligation. In the present petition, the records
show that the respondents were members of a Samahang Nayon. Pursuant to P.D. No. 27, Ernesto should have
claimed the unpaid lease rentals or amortizations from the respondents Samahang Nayon.

Executive Order (E.O.) No. 228, issued on July 17, 1987, modified P.D. No. 27 on the manner of payment and
provided for different modes of payment of the value of the land to the landowner. The pertinent portion reads:

SECTION 3. Compensation shall be paid to the landowners in any of the following modes, at the option of the
landowners:

(a) Bond payment over ten (10) years, with ten percent (10%) of the value of the land payable
immediately in cash, and the balance in the form of LBP bonds;

(b) Direct payment in cash or in kind by the farmer-beneficiaries with the terms to be mutually agreed
upon by the beneficiaries and landowners and subject to the approval of the Department of Agrarian
Reform; and

(c) Other modes of payment as may be prescribed or approved by the Presidential Agrarian Reform
Council. [emphases supplied]

In the event a dispute arises between the landowner and the tenant-farmer on the amount of the lease rentals,
Section 2 of E.O. No. 228 provides that the DAR and the concerned BCLP shall resolve the dispute. In any case,
the Land Bank of the Philippines shall still process the payment of the landowners compensation claim, which it
shall hold in trust for the landowner, pending resolution of the dispute. Thus, under this scheme, as with P.D. No.
27, the landowner is assured of payment of the full value of the land under E.O. No. 228.

With the enactment of R.A. No. 6657 on June 10, 1988, the manner and the mode of payment were further
modified with the options available to the landowner, provided as follows:

"SECTION 18. Valuation and Mode of Compensation. x x x

xxxx

(1) Cash payment, x x x;

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or
other qualified investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds." (emphases ours; italics supplied)

Following these guarantees to the landowner under P.D. No. 27 and E.O No. 228, as well as R.A. No. 6657, the
clear rule is that notwithstanding the non-payment of the amortization to the landowner, the tenant-farmer retains
possession of the landholding.64 In addition, we point out that under P.D. No. 27 and R.A. No. 6657, the transfer or
waiver of the landholding acquired by virtue of P.D. No. 27 is prohibited, save only by hereditary succession or to
the Government; effectively, reversion of the landholding to the landholder is absolutely proscribed. In light of this
decree, we hold that the DARAB correctly reversed the decision of the PARAD, which ordered the respondents to
surrender the possession of the subject property to Ernesto as this was in clear contravention of the objectives of
the agrarian reform laws.

Nevertheless, we cannot agree with the DARABs ruling that the MARO should assist the parties in executing a
new leasehold contract. To recall, Diego and respondent Doroteo are valid holders of CLTs. Also, as of the year
2000, the concerned BCLP has already issued an approved valuation for the subject property. Under these
circumstances, the proper procedure is for Ernesto and the DAR to agree on the manner of processing the
compensation payment for the subject property. Hence, pursuant to R.A. No. 6657, E.O. No. 228, in relation to
Department Memorandum Circular No. 26, series of 1973, and the related issuances and regulation of the DAR,
we must remand the case to the DAR for the proper determination of the manner and mode of payment of the full
value of the subject property to Ernesto.1w phi 1

As a final note, we observe that on April 11, 1988, Diego waived his right over the 3-hectare.lot covered by his
CLT (which formed part of the subject property) in favor of his two sons, Andres and Fernando, with each
obtaining an equal half interest. This arrangement directly contravenes Ministry Memorandum Circular Nd. -19,
series of 1978. This memorandum circular specifically proscribes the partition of the landholding; should the
farmer-beneficiary have several heirs, as in this case, the ownership and cultivation of the landholding must
ultimately be consolidated in one heir who possesses the requisite qualifications. 65 Thus, under paragraph 2 of the
memorandum circular, Andres and Fernando must agree on one of them to be the sole owner and cultivator of
the lot covered by Diego's CLT.

WHEREFORE, in view of these considerations, we AFFIRM with MODIFICATION the decision dated November
28, 2006 and the resolution dated August 10, 2007 of the Court of Appeals in CA-G.R. Sp No. 89365. Petitioner
Ernesto L. Natividad is ORDERED to immediately surrender possession of the subject property to the
respondents, and the DARAB is directed to ensure the immediate restoration of possession of the subject
property to the respondents. We REMAND the case to the Department of Agrarian Reform for the: (1) proper
determination of the manner and mode of payment of the full value of the land to petitioner Emesto L. Natividad in
accordance with R.A. No. 6657, Executive Order No. 228, Department Memorandum Circular No. 26, series of
1973, and other related issuances and regulation of the Department of Agrarian Reform; and (2) proper
determination of the successor-in-interest of Diego Mariano as the farmer-beneficiary to the landholding covered
by his CLT, in accordance with the provisions of Ministry Memorandum Circular No. 19, series of 1978. No costs.

SO ORDERED.
 SECOND DIVISION

G.R. No. 190276 April 2, 2014

EUFROCINA NIEVES, as represented by her attorney-in-fact, LAZARO VILLAROSA, JR., Petitioner,

vs.
ERNESTO DULDULAO and FELIPE PAJARILLO, Respondents.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari are the Decision dated June 4, 2009 and the Resolution dated
1 2 3

November 5, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 105438 which set aside the Decision dated 4

December 13, 2007 and the Resolution dated March 13, 2008 of the Department of Agrarian Reform Adjudication
5

Board (DARAB) in DARAB Case No. 14727, holding that the tenancy relations between petitioner Eufrocina
Nieves (petitioner) and respondents Ernesto Duldulao (Ernesto) and Felipe Pajarillo (Felipe) remain valid and
enforceable.

The Facts

Petitioner is the owner of a piece of agricultural rice land with 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 land who are obligated to each pay leasehold rentals of 45 cavans of palay for each cropping
6

season, one in May and the other in December.

7 8

Claiming that Ernesto and Felipe failed to pay their leasehold rentals since 1985 which had accumulated to 446.5
and 327 cavans of palay, respectively, petitioner filed a petition on March 8, 2006 before the DARAB Office of the
Provincial Adjudicator (PARAD), seeking the ejectment of respondents from the subject land for non-payment of
rentals.
9

Prior to the filing of the case, a mediation was conducted before the Office of the Municipal Agrarian Reform
Officer and Legal Division in 2005 where respondents admitted being in default in the payment of leasehold
rentals equivalent to 200 and 327 cavans of palay, respectively, and promised to pay the same. Subsequently,
10

however, in his answer to the petition, Ernesto claimed that he merely inherited a portion of the back leasehold
rentals from his deceased father, Eugenio Duldulao, but proposed to pay the arrearages in four (4) installments
beginning the dayatan cropping season in May 2006. On the other hand, Felipe denied incurring any back
11

leasehold rentals, but at the same time proposed to pay whatever there may be in six (6) installments, also
beginning the dayatan cropping season in May 2006. Both respondents manifested their lack of intention to
12

renege on their obligations to pay the leasehold rentals due, explaining that the supervening calamities, such as
the flashfloods and typhoons that affected the area prevented them from complying. 13

The PARAD's Ruling

In a Decision dated July 6, 2006, the PARAD declared that the tenancy relations between the parties had been
14

severed by respondents failure to pay their back leasehold rentals, thereby ordering them to vacate the subject
land and fulfill their rent obligations.

With respect to Ernesto, the PARAD did not find merit in his claim that the obligation of his father for back
leasehold rentals, 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 lessor and the surviving
spouse or next of kin of the deceased as provided by law; hence, the leasehold rent obligations subsist and
should be paid. 15

As for Felipe, the PARAD found that his unpaid leasehold rentals had accumulated to 327 cavans of palay, and
that his refusal 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 Order deputizing the DARAB Provincial Sheriff of Nueva Ecija and the
17

Municipal Agrarian Reform Officer of Talavera, Nueva Ecija to supervise the harvest of palay over the subject
land. However, when the Sheriff proceeded to implement the same on April 27, 2007, he found that the harvest
had been completed and the proceeds therefrom had been used to pay respondents other indebtedness. 18

On December 13, 2007, the DARAB issued a Decision affirming the findings of the PARAD that indeed,
19

respondents were remiss 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 Decision dated June 4, 2009, the CA granted respondents petition for review, thereby reversing the ruling of
21

the DARAB terminating the tenancy relations of the parties. While it found respondents to have been remiss in the
payment of their leasehold rentals, it held that the omission was not deliberate or willful. Notwithstanding the
DARABs findings with respect to the amounts of respondents rental arrearages, the CA gave 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 leasehold
rentals. Relying on the Courts ruling in the case of De Tanedo v. De La Cruz (De Tanedo), the CA then
22 23

concluded that 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 obligations as they became due.

Aggrieved, petitioner filed a motion for reconsideration which was, however, denied by the CA in a
Resolution dated November 5, 2009, hence this petition.
24

The Issue Before the Court

The sole issue for the Courts resolution is whether or not the CA correctly reversed the DARABs ruling ejecting
respondents from the subject land.

The Courts Ruling

The petition is meritorious.

Agricultural lessees, being entitled to security of tenure, may be ejected from their landholding only on the
grounds provided by law. These grounds the existence of which is to be proven by the agricultural lessor in a
25

particular case are enumerated in Section 36 of Republic Act No. (RA) 3844, otherwise known as the
26 27

"Agricultural Land Reform Code," which read 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 landholding is declared by the department head upon recommendation of the National Planning
Commission to be suited for residential, commercial, industrial or some other urban purposes: Provided,
That the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the
average of the gross harvests on his landholding during the last five preceding calendar years; (as
amended by RA 6389)
 (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. (Emphases supplied)

To eject the agricultural lessee for failure to pay the leasehold rentals under item 6 of the above-cited provision,
jurisprudence instructs that the same must be willful and deliberate in order to warrant the agricultural lessees
dispossession of the land that he tills. As explained in the case of Sta. Ana v. Spouses Carpo: 28

Under Section 37 of Republic Act No. 3844, as amended, coupled with the fact that the respondents are the
complainants themselves, the burden of proof to show the existence of a lawful cause for the ejectment of the
petitioner as an agricultural 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. Petitioner can only
be ejected from the agricultural landholding on grounds provided by law. Section 36 of the same law pertinently
provides:

Sec. 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:

xxxx

(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 disposses-sion, although the obligation to pay the rental due that particular
crop is not thereby extinguished;

xxxx

Respondents failed to discharge such burden. The agricultural tenant's failure to pay the lease rentals must be
willful and deliberate in order to warrant his dispossession of the land that he tills.

Petitioners counsel opines that there appears to be no decision by this Court on the matter; he thus submits that
we should use the CA decision in Cabero v. Caturna. This is not correct. In an En Banc Decision by this Court in
Roxas y Cia v. Cabatuando, et al., we held that under our law and jurisprudence, mere failure of a tenant to pay
29

the landholder's share does not necessarily give the latter the right to eject the former when there is lack of
deliberate intent on the part of the tenant to pay. This ruling has not been overturned.

x x x x (Emphases supplied; citations omitted)

30
In the present case, petitioner seeks the dispossession of respondents from the subject land on the ground of
non-payment of leasehold rentals based on item 6, Section 36 of RA 3844. While respondents indeed admit that
they failed to pay the full amount of their respective leasehold rentals as they become 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 provision 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
aforestated claim was substantiated by any evidence tending to prove the same. Keeping in mind that bare
allegations, unsubstantiated by evidence, are not equivalent to proof, the Court cannot therefore lend any
31

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 fact, do not deny and therefore admit the landowners assertion that their rental arrearages have
32

accumulated over a considerable length of time, i.e., from 1985 to 2005 but rely on the fortuitous event defense,
which as above-mentioned, cannot herein be sustained. In the case of Antonio v. Manahan (Antonio), the Court,
33

notwithstanding the tenants failure to prove their own fortuitous event theory, pronounced that their failure to pay
the leasehold rentals was not willful and deliberate. The records in said case showed that the landowner actually
rejected the rentals, which amounted only to 2 years-worth of arrearages, i.e., 1993 and 2001, tendered by the
tenants therein due to their supposed poor quality. This circumstance was taken by the Court together with the
fact that said tenants even exerted efforts to make up for the rejected rentals through the payments made for the
other years. In another case, i.e., Roxas v. Cabatuando (Roxas), the Court similarly held that the tenants therein
34

did not willfully and deliberately fail to pay their leasehold rentals since they had serious doubts as to the legality
of their contract with respect to their non-sharing in the coconut produce, which thus prompted them to withhold
their remittances in good faith. In contrast to Antonio and Roxas, the landowner in this case never rejected any
rental payment duly tendered by respondents or their predecessors-in-interest. Neither was the legality of their
agricultural leasehold contract with the landowner ever put into issue so as to intimate that they merely withheld
their remittances in good faith. Thus, with the fortuitous event defense taken out of the equation, and considering
the examples in Antonio and Roxas whereby the elements of willfulness and deliberateness were not found to
have been established, the Court is impelled to agree with the DARAB that respondents herein willfully and
deliberately chose not to pay their leasehold rentals to the landowner when they fell due. The term "willful" means
"voluntary and intentional, but not necessarily malicious," while the term "deliberate" means that the act or
35

omission is "intentional," "premeditated" or "fully considered." These qualities the landowner herein had
36

successfully established in relation to respondents default in this case. Accordingly, their dispossession from the
subject land is warranted under the law.

At this juncture, the Court finds it apt to clarify that respondents purported substantial compliance as
erroneously considered 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 from item 6 thereof. Item
2, Section 36 of RA 3844 applies to cases where the agricultural lessee failed to substantially comply with any of
the terms and conditions of the contract or any of the provisions of the Agricultural Land Reform Code, unless his
failure is caused by fortuitous event or force majeure; whereas item 6 refers to cases where the agricultural
lessee does not pay the leasehold rental when it falls due, provided that 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 no indication that the agricultural lessees
substantial compliance with his rent obligations could be raised as a defense against his dispossession. On the
other hand, item 2 states that it is only the agricultural lessees "failure to substantially comply" with the terms and
conditions of the agricultural leasehold contract 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 lessees
substantial compliance negates the existence of the ground of dispossession provided under item 2. While the
failure to pay leasehold rentals may be construed to fall under the general phraseology of item 2 that is a form
of non-compliance "with any of the terms and conditions of the contract or any of the provisions of this Code," it 37

is a long-standing rule in statutory construction that general legislation must give way to special legislation 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. In other words, where two statutes are of equal theoretical application
38

to a particular case, the one specially designed therefor should prevail. Thus, consistent with this principle, the
39

Court so holds that cases covering an agricultural lessees non-payment of leasehold rentals should be examined
under the parameters of item 6, Section 36 of RA 3844 and not under item 2 of the same provision which applies
to other violations of the agricultural leasehold contract or the provisions of the Agricultural Land Reform Code,
excluding the failure to pay rent. In these latter cases, substantial compliance may as above-explained be
raised as a defense against dispossession.

In this relation, the Court observes that the CAs reliance in the De Tanedo ruling was altogether misplaced for the
simple reason that the substantial compliance defense in that case was actually invoked against a violation of a
peculiar term and condition of the parties agricultural leasehold contract, particularly requiring the payment of
advance rentals "pursuant to [the agricultural lessees] agreement with the landholders," and not his mere failure
40

to pay the leasehold rentals regularly accruing within a particular cropping season, as in this case.

In fact, the Court, in De Tanedo, applied the substantial compliance defense only in relation to Section 50(b) of
RA 1199, otherwise known as the "Agricultural Tenancy Act of the Philippines," which is the predecessor
41

provision of item 2, Section 36 of RA 3844. Section 50(b) of RA 1199 states that:

Section 50. Causes for the Dispossession of a Tenant. - Any of the following shall be a sufficient cause for the
dispossession of a tenant from his holdings:

xxxx

(b) When the current tenant violates or fails to comply with any 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 with 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 follows:

Section 50. Causes for the Dispossession of a Tenant. - Any of the following shall be a sufficient cause for the
dispossession of a tenant from his holdings:

xxxx

(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 event or force majeure.

The Courts application of the substantial compliance defense in relation to Section 50(b) of RA 1199, as well as
the agricultural lessors failure to actually raise in their ejectment complaint the ground of failure to pay leasehold
rentals, is evident from 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 found that the rentals for the agricultural years 1958 to 1961, inclusive, 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 does not justify the drastic remedy of ejectment, considering Section 50(b) of Republic Act
1199, which states that while violation by the tenant of any of the terms and conditions of the tenancy contract
shall be a ground to eject him, yet this provision shall not apply where there has been substantial compliance.
With reference to the rental for the crop-year 1962-63, failure to pay the same was not alleged in the original or
amended complaints below, and hence may not be considered for the first time on appeal. (Emphases and
underscoring supplied)

In any case, the Court never mentioned Section 50(c) of RA 1199 in De Tanedo. Thus, a reading thereof only
1w phi 1

shores up the point earlier explained that the substantial compliance defense is only available in cases where the
ground for dispossession is the agricultural lessees violation of the terms and conditions of the agricultural
leasehold contract or the provisions 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 rentals in
ordinary lease contracts, constitute fixed payments which the lessor has both the right and expectation to
promptly receive in consideration of being deprived of the full enjoyment and possession of his property. Unless
caused by a fortuitous event, or reprieved by virtue of a finding that the non-payment of leasehold rentals was not
actually willful and deliberate, there appears to be no credible justification, both in reason and in law, to deny the
agricultural lessor the right to recover his property and thereby eject the agricultural lessee in the event that the
latter fails to comply with his rent obligations as they fall due. Indeed, while the Constitution commands the
government to tilt the balance in favor of the poor and the underprivileged whenever doubt arises in the
interpretation 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, as in this case.
43

In fine, the Court affirms the DARAB Decision granting the petition for dispossession with the modification,
however, on the amount of rental arrearages to be paid considering that an action to enforce any cause of action
under RA 3844 shall be barred if not commenced within three (3) years after it accrued. Accordingly,
44

respondents are held liable to pay petitioner only the pertinent rental arrearages reckoned from the last three (3)
cropping years prior to the filing of the petition before the Office of the PARAD on March 8, 2006 or from the May
45

2003 cropping season, until they have vacated the subject land.

WHEREFORE, the petition is GRANTED. The Decision dated June 4, 2009 and the Resolution dated November
5, 2009 of the Court of Appeals in CA-GR. SP No. 105438 are REVERSED and 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 MODIFICATION ordering respondents Ernesto Duldulao and Felipe
Pajarillo to pay petitioner Eufrocina Nieves the pertinent rental arrearages reckoned from the May 2003 cropping
season, until they have vacated the landholding subject of this case.

SO ORDERED.
 SECOND DIVISION

[G. R. No. 140164. September 6, 2002]

DIONISIA L. REYES, petitioner, vs. RICARDO L. REYES, LAZARO L. REYES, NARCISO L. REYES
and MARCELO L. REYES, respondents.

DECISION
QUISUMBING, J.:

This petition assails the decision dated September 20, 1999 of the Court of Appeals in CA-G.R. SP No. 47033,
[1]

which reversed that of the Department of Agrarian Reform Adjudication Board (DARAB-Central Office) in DARAB
Case No. 3625. The DARAB-Central Office had affirmed the ruling of the Provincial Adjudicator, DARAB-Region III
in Case No. 249-Bul-91, declaring petitioner Dionisia L. Reyes the lawful agricultural lessee of a parcel of land in
Bulacan owned by the late Marciano Castro, and thus she is entitled to security of tenure.
After a thorough review of the records including the memoranda of the parties, we find this petition meritorious.
The parties are among the nine children of the late Felizardo J. Reyes, who prior to his death was the
agricultural tenant of the land subject of this uncivil dispute over tenancy rights. The core question in this petition is,
who among the parties should be considered the lawful and rightful tenant of the Castro property? The DARAB
ruled in favor of petitioner, the appellate court held otherwise.
As disclosed by the record, the instant case stemmed from a complaint for reinstatement with damages filed
with the DARAB Region III Office by Dionisia Reyes on April 22, 1991 against her four younger brothers, herein
respondents. She alleged that her father, the late Felizardo Reyes, was the tenant of a two-hectare agricultural lot
in Parulan, Plaridel, Bulacan, owned by Marciano Castro. After her fathers death on February 17, 1989, she and
Marciano Castro, through the latters son and attorney-in-fact, Ramon R. Castro, executed a leasehold contract
naming her as the agricultural lessee of the property. However, sometime before the start of the planting of the dry
season crop in 1989, herein respondents forcibly entered the area and occupied a one-hectare portion of the
property. They claimed to be the tenants thereof. Respondents then paid rent to the Castros overseer, Armando
Duran, and continued to occupy half of the property to petitioners damage and prejudice.
In their answer, respondents denied Dionisias claim that she was the bona fide leasehold tenant. They claimed
that they inherited the lease rights to the property from their deceased father. Respondents pointed out that
petitioner was a woman who could not possibly work or till the land by herself. They likewise averred that they were
the ones actually cultivating the portion occupied by them. Hence, petitioners claim to be the lawful agricultural
lessee had no basis, either in fact or in law.
After attempts to amicably solve the dispute failed, the DARAB Provincial Adjudicator (PARAD) ruled for
petitioner, thus:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. Ordering respondents Ricardo Reyes, Lazaro Reyes, Narciso Reyes and Marcelo Reyes to respect the
tenurial status of herein petitioner Dionisia Reyes over the disputed landholding;

2. Ordering respondents to return the one-hectare portion which had been taken forcibly and to cease
and desist from molesting, interfering, occupying petitioners peaceful possession over the disputed
landholding;
3. No pronouncement as to costs.

SO ORDERED. [2]

Respondents then seasonably appealed the PARADs judgment to the DARAB-Central Office. In its decision
of September 1, 1997, however, the DARAB-Central Office disposed of the appeal as follows:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit and the
subject decision AFFIRMED.

SO ORDERED. [3]

In affirming the ruling of the PARAD, the DARAB Central Office found that pursuant to the agricultural lease
contract entered into between Dionisia and the Castros, the former was designated by the latter to substitute the
late Felizardo Reyes as tenant. It held:

When an agricultural tenant dies, the choice for the substitute tenant is given to the land owner. It is the
latter who has the option to place a new tenant of his choice on the land. That choice is, however, not
absolute as it shall be exercised from among the surviving compulsory heirs of the deceased tenant.
Hence, the surviving heirs cannot preempt that choice by deciding among themselves who shall take-
over the cultivation or opting to cultivate the land collectively. It is only when the landowner fails to
exercise such right, or waive the same, that the survivors may agree among themselves regarding the
cultivation. The law is specific on the matter as so provided in Section 9, Republic Act No. 3844 [4]

xxx

Neither is their argument that Plaintiff-Appellee, being a woman, is not capable of discharging the
demands of farming, valid. This Board finds said argument anachronistic with the changing times of
great awareness of the potentials of women. Women today are found manning our commerce and
industry, and agriculture is no exception. [5]

In accordance with Section 54 of the Comprehensive Agrarian Reform Law (R. A. No. 6657), respondents
[6]

elevated the case to the Court of Appeals, which docketed their appeal as CA-G.R. SP No. 47033. On appeal,
respondents changed their theory. They abandoned their argument that they had inherited the tenancy rights of
their late father and instead postulated that an implied tenancy had been created when the Castros overseer
accepted rentals totaling 40 cavans of palay from them on behalf of the owner. As earlier stated, the appellate court
reversed the decision of the DARAB-Central Office. The decretal portion of its decision reads:

WHEREFORE, premises considered, the petition is hereby GRANTED. The respondent is ordered to
respect the tenurial status of petitioners over the one (1) hectare portion of the two (2) hectare-property
of Ramon R. Castro situated in Barangay Parulan, Plaridel, Bulacan.

No costs.
SO ORDERED. [7]

The Court of Appeals held that an implied tenancy existed between herein respondents and the landowner
because:

In point of time, Ricardo Reyes actual possession and cultivation of the subject property came earlier
than the possession of respondent Dionisia Reyes by virtue of the said leasehold contract executed on
November 6, 1989. Further, Armando Duran testified that he served as the overseer of the subject
property from the period 1967 to 1993, since the time of Antonio Castro, after which, during the time of
Marciano Castro up to the time of the administration of the subject property by Ramon R. Castro who
inherited the same (TSN July 12, 1994, pp. 3, 9; Rollo, pp. 98, 104). In effect, Armando Duran was still the
overseer of the subject property after the death of Felizardo Reyes on February 17, 1989 and was still the
overseer of the subject property when he allowed petitioners to continue the tenancy thereof left by the
late Felizardo. The fact that Armando Duran was the overseer for a period of sixteen (16) years, the
petitioners were made to believe of his authority from the Castro family relative to the administration of
the subject property. On this account, the acquiescence of Duran in allowing or permitting petitioner
Ricardo Reyes to posses and cultivate of the one (1) hectare subject property immediately after the death
of Felizardo is binding to the Castro family including Ramon Castro, the new landowner. [8]

The appellate court then went on to rule that by virtue of this implied tenancy created in favor of herein
respondents, the leasehold contract between the Castros and petitioner could be made effective only on the other
one - hectare portion of the disputed property.
Hence, the instant petition, anchored on the following assignment of errors:
A.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN DISREGARDING THE SUBSTANTIAL
EVIDENCE RULE BY OVERTURNING THE BINDING FINDINGS OF FACT OF THE DARAB PROVINCIAL
ADJUDICATOR AND THE NATIONAL DARAB ITSELF.
B.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT
AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN
INFERENCE, THAT HEREIN RESPONDENTS WERE MADE TO BELIEVE THAT THE OVERSEER HAD
AUTHORITY FROM THE LANDOWNER TO INSTITUTE TENANT/S FOR THE LAND, UPON THE BARE
PREMISE THAT THE OVERSEER WAS SUCH FOR 16 YEARS.
C.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT
AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN
INFERENCE, THAT THE ACQUIESCENCE OF THE OVERSEER TO RICARDO REYES POSSESSION AND
CULTIVATION OF THE 1-HECTARE PORTION OF THE LAND IMMEDIATELY AFTER THE DEATH OF THE
ORIGINAL TENANT IS BINDING ON THE LANDOWNER.
D.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT
AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN
INFERENCE THAT AN IMPLIED TENANCY WAS ESTABLISHED BETWEEN THE LANDOWNER AND HEREIN
RESPONDENTS RICARDO L. REYES, ET AL., UPON THE BARE PREMISE THAT THE OVERSEER HAD
ALLOWED THEM TO CONTINUE THE LEASEHOLD RELATION LEFT BY THE ORIGINAL TENANT AS TO
THE 1-HECTARE PORTION OF THE LAND.
 E.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT
AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN
INFERENCE, THAT HEREIN PETITIONER DIONISIA L. REYES CANNOT BE CONSIDERED A TENANT EVEN
IF SO DESIGNATED IN A WRITTEN CONTRACT, UPON THE BARE PREMISE THAT THE 1-HECTARE
PORTION OF THE LAND WAS IN THE ACTUAL POSSESSION OF HEREIN RESPONDENTS RICARDO L.
REYES, ET AL.
F.

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR OF LAW IN HOLDING, WITHOUT BASIS IN FACT
AND LAW, BUT MERELY ON THE BASIS OF ILLOGICAL SURMISE AND MANIFESTLY MISTAKEN
INFERENCE, THAT HEREIN RESPONDENTS RICARDO L. REYES, ET AL. HAVE SQUARELY MET THE
REQUIREMENTS OF THE LAW FOR THE EXISTENCE OF A TENANCY RELATIONSHIP BETWEEN THEM
AND THE LANDOWNER.[9]

The grounds relied upon by petitioner can be reduced to only two issues, to wit:

(1) Did the Court of Appeals err in disregarding the substantial evidence rule with respect to the DARAB
findings?

(2) Did the appellate court commit a reversible error of law in finding that respondents had satisfactorily
met the requirements of a tenancy relationship?

At the outset, respondents are reminded of the time-honored rule that in the interests of fair play and substantial
justice, a party is barred from changing his theory of the case on appeal.
On the first issue, petitioner pleads that in agrarian cases, the power of appellate review is limited to questions
of law and findings of fact of the DARAB, when supported by substantial evidence, shall be binding upon the Court
of Appeals. Hence, the appellate court cannot make its own findings of fact and substitute the same in lieu of the
findings of the DARAB, unless there was grave abuse of discretion on the part of the DARAB. Consequently, it was
error for the appellate court to make its own finding that respondent Ricardo Reyes assumed possession and
cultivation of the land from the time Felizardo died. Petitioner points out that this finding by the Court of Appeals
contradicted the finding of the DARAB that petitioner Dionisia Reyes took over the cultivation of the property after
their fathers death. Petitioner further stresses that the finding by the appellate court of Ricardos previous possession
runs counter to the finding of the DARAB that Ricardo was a mere usurper who forcibly took over the disputed one-
hectare portion. The appellate court also erred in finding that Ricardo and other respondents were made to believe
that overseer Duran had authority to bind the Castro family to allow them to possess and cultivate the lot. This is
because the DARAB found that Durans authority was limited only to collecting rentals from tenants duly appointed
by the Castros, and Duran was in bad faith in accepting two rentals from Ricardo and his co-respondents.
Respondents argue that Duran being the overseer of the landowner is an extension of the latters personality
as an agent of the Castros. Ramon Castro, who succeeded after Marciano Castros death, in allowing his overseer
to accept agricultural rentals from respondents is now estopped from denying that the latter are his tenants.
Moreover, they should be given the opportunity to work the land since this is after all what their late father, Felizardo,
wanted before his demise.
In Malate vs. Court of Appeals, we held that:

In appeals in agrarian cases, the only function required of the Court of Appeals is to determine whether
the findings of fact of the Court of Agrarian Relations are supported by substantial evidence. And
substantial evidence has been defined to be such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion and its absence is not shown by stressing that there is contrary
evidence on record, direct or circumstantial, and where the findings of fact of the agrarian court are
supported by substantial evidence, such findings are conclusive and binding on the appellate court. [10]
 Stated differently, the appellate court cannot make its own findings of fact and substitute the same for the
findings of fact of the DARAB.
A perusal of the assailed decision clearly shows that nowhere did the Court of Appeals rule that the findings
of fact of the DARAB Region III Provincial Adjudicator or the DARAB-Central Office were unsupported by substantial
evidence. Nor did the appellate court hold that said findings were made with grave abuse of discretion on the part
of the agrarian quasi-judicial agencies. An examination of the record categorically shows that the findings of fact of
the DARAB were supported by substantial evidence. Perforce, the Malate ruling must apply to the instant case. The
finding of the DARAB that petitioner, by virtue of the contract of agricultural leasehold entered into between her and
the Castros, is the substitute tenant of the latter in lieu of her deceased father, is binding upon the appellate court
and this Court. Equally conclusive upon the court a quo and this Court is the finding by the DARAB that respondents
were mere usurpers who failed to present any proof as to the existence of a tenancy relationship between them
and the Castro family.
On the second issue, the appellate court found that an implied tenancy was created when Duran, the ex-
overseer of the Castros, acquiesced in the taking over and cultivation of a one-hectare portion of the land. It went
on to rule that the Castros were estopped from denying this implied tenancy in view of the fact that they had allowed
Duran, as their agent, to accept rentals from respondents.
Before us, petitioner asserts that Duran cannot be deemed an implied agent of the Castros under Article 1869
of the Civil Code since there are neither acts nor omissions of either Marciano Castro or Ramon Castro from which
[11]

to imply an agency. She also submits that there is no estoppel to bind the Castros to the acts of Duran, since the
former had no knowledge of the assumption by Duran of their authority. Furthermore, the landowners made no false
representations or deception vis--vis respondents. Hence, the elements of estoppel are not present in this instance.
Respondents aver that an implied tenancy existed in view of the fact that Duran was undisputably the overseer
of the landowner. They add that Duran, as overseer, accepted 20 cavans of palay as rentals on October 17, 1990
and another 20 cavans on April 1, 1991 from Ricardo. Receipt of these rentals was properly documented. Duran [12]

then delivered the rentals to Elena Castro, sister of Ramon, who in turn delivered the rentals to the latter. An implied
tenancy was created between respondents and Ramon, said the respondents, since Duran as overseer of the
landholding was the extension of the personality of the landowner. They aver that in effect, a delivery of rentals to
Duran was a delivery to an agent of the landowner. They argue that having accepted the rental payments made to
his agent, Ramon is now estopped from denying the existence of an implied tenancy between him and respondents.
We find respondents contentions far from persuasive.
The present dispute involves an agricultural leasehold. The governing law is R.A. No. 3844, which, except
[13]

for Section 35 thereof, was not specifically repealed by the passage of the Comprehensive Agrarian Reform Law
of 1988 (R.A. No. 6657), but was intended to have suppletory effect to the latter law. Under R.A. 3844, two modes
[14]

are provided for in the establishment of an agricultural leasehold relation: (1) by operation of law in accordance with
Section 4 of the said act; or (2) by oral or written agreement, either express or implied. By operation of law simply
[15]

means the abolition of the agricultural share tenancy system and the conversion of share tenancy relations into
leasehold relations. The other method is the agricultural leasehold contract, which may either be oral or in writing.
In the instant case, it is not disputed that an agricultural leasehold contract was entered into between petitioner and
Ramon Castro. Respondents, however, insist that an agricultural leasehold contract over a one-hectare portion of
the landholding arose as a result of the actions of Ramons overseer, who must be viewed as the latters agent. They
conclude that because of this implied leasehold, the application of the contract between petitioner and the
landowner should be limited to the remaining portion of the property.
Respondents reasoning is flawed. While undoubtedly Duran was an agent of Ramon, he was not a general
agent of the latter with respect to the landholding. The record shows that as overseer, Durans duties and
responsibilities were limited to issu(ing) receipt(s), selling mangoes and bamboo trees and all other things
saleable. Thus, by his own admission, Duran was a special agent under Article 1876 of the Civil Code. Durans
[16] [17]

duties and responsibilities as a special agent do not include the acceptance of rentals from persons other than the
tenant so designated by the landowner. Durans authority as a special agent likewise excludes the power to appoint
tenants or successor-tenants. Clearly, Duran acted beyond the limits of his authority as an agent. We cannot agree
with the Court of Appeals did that since Duran had been the overseer of the Castros for 16 years, he thereby made
respondents believe he had full authority from the Castro family relative to the administration of the subject property.
Regardless of the number of years that Duran had been the overseer of the Castros, there is absolutely no showing
that he was ever authorized to appoint tenants or successor-tenants for the Castros, nor to accept rentals from the
persons he would appoint. Absent substantial evidence to show Durans authority from the Castros to give consent
to the creation of a tenancy relationship, his actions could not give rise to an implied tenancy. In fact, Duran admitted
that he was aware of the existence of the leasehold contract between petitioner and the Castros, naming the former
as the successor-tenant to the property. Since an implied tenancy between the same landowners and respondents
[18]

is incompatible with this express and written leasehold contract and given the absolute lack of substantial evidence
to support the existence of an implied tenancy, the express tenancy contract must be maintained.
Respondents contend, however, that Ramon Castro, having received the 40 cavans from Duran, is now
estopped to deny the existence of an implied tenancy. We find nothing in the records, however, to support
respondents stance. Duran testified that he did not deliver the palay rentals to Ramon, but to his sister, who in turn
told him that she had forwarded the palay to Ramon. Duran had no personal knowledge that Ramon received the
[19]

rentals which the former had allegedly delivered to the latters sister. His testimony with respect to the receipt by
Ramon of the rentals is hearsay and has no probative value. The receipts issued to respondents do not bear the
name and signature of Ramon Castro. Given these circumstances, Ramon Castro cannot be deemed estopped
from denying the existence of a tenancy relationship between him and respondents.
One final note. Respondents original stance before the DARAB that they had inherited or succeeded to the
tenancy rights of their late father is likewise erroneous. As correctly found by the DARAB:

Defendants-Appellants should not confuse the law on succession provided for in the Civil Code of the
Philippines with succession in agrarian cases. In the former, (the) statute spreads the estate of the
deceased throughout his heirs; while in agrarian laws, the security of tenure of the deceased tenant shall
pass on to only one (1) heir in the manner provided for in Section 9 [20]

We are thus constrained to conclude that respondents original stance as well as new theory of implied tenancy
is without merit.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 47033 is
REVERSED and SET ASIDE. The judgment of the DARAB in DARAB Case No. 3625 affirming the decision of the
Provincial Adjudicator of DARAB Region III in DARAB Case No. 249-Bul-91 is hereby REINSTATED. No
pronouncement as to costs.
SO ORDERED.