Paulino Ungos III

Lawyer | Law Professor | Author

Category: Social Legislation

  • History of Agricultural Tenancy Laws in the Philippines

    In Spouses Franco v. Spouses Galera, Jr.,1G.R. No. 205266, January 15, 2020., the Supreme Court expounded on the development of agricultural tenancy laws in the Philippines, as follows:

    “Agricultural tenancy laws in the Philippines have evolved throughout centuries and are tied with the country’s history. Prior to the Spanish colonization, lands were held in common by inhabitants of barangays. Access to land and the fruits it produced were equally shared by members of the community.

    “This system of communal ownership, however, was replaced by the regime of private ownership of property.2Dissenting Opinion of J. Leonen, J.V. Lagon Realty Corporation v. Heirs of vda. de Terre, G.R. No. 219670, June 27, 2018, http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/64252 [J. Martires, Third Division] citing R.P. BARTE, LAW ON AGRARIAN REFORM 6-7 (2003). When the Spaniards arrived, they purchased communal lands from heads of the different barangays and registered the lands in their names. With the regalian doctrine imposed, uninhibited lands were decreed to be owned by the Spanish crown. Consequently, the encomienda system was introduced, in which the Spanish crown awarded tracts of land to encomenderos, who acted as caretakers of the encomienda.3Id. Under this system, natives could not own either the land they worked on or their harvest. To till the land, they had to pay tribute to their encomenderos.4Id. citing R.P. Barte, Law on Agrarian Reform 7 (2003).

    “Encomiendas mostly focused on small-scale food production, until the hacienda system was developed to cater to the international export market. Still, natives were not allowed to own land, and the larger demand by the wider market required them to live away from their homes. Families of natives who worked on farms were reduced to being slaves pushed into forced labor either as aliping namamahay or aliping sagigilid.5Id.

    “The encomienda and hacienda systems were analogous to share tenancy arrangements, which persisted in our agricultural tenancy laws.

    “Enacted in 1933, Act No. 4054, or the Philippine Rice Share Tenancy Act, contained the earliest iteration of share tenancy in the country. To promote the well-being of tenants in agricultural lands devoted to rice production, the law regulated relations between landlords and tenant-farmers. Under this law, share tenancy was the prevailing arrangement.6Act No. 4054 (1933), sec. 2. Share tenancy contracts must be expressed in writing and registered with the proper office to be valid.7

    Act No. 4054 (1933), secs. 4-5 provide:

    SECTION 4. Form of Contract. — The contract on share tenancy, in order to be valid and binding, shall be drawn in triplicate in the language or dialect known to known to all the parties thereto, to be signed or thumb-marked both by the landlord or his authorized representative and by the tenant, before two witnesses, one to be chosen by each party. The party who does not know how to read and write may request one of the witnesses to read the contents of the document. Each of the contracting parties shall retain a copy of the contract and the third copy shall be filed with, and registered in the office of the municipal treasurer of the municipality, where the land, which is the subject-matter of the contract, is located: Provided, however, That in order that a contract may be considered registered, both the copy of the landlord and that of the tenant shall contain an annotation made by the municipal treasurer to the effect that same is registered in his office.

    SECTION 5. Registry of Tenancy Contract. — For the purposes of this Act, the municipal treasurer of the municipality wherein the land, which is the subject-matter of a contract, is situated, shall keep a record of all contracts made within his jurisdiction, to be known as Registry of Tenancy Contracts. He shall keep this registry together with a copy of each contract entered therein, and make annotations on said registry in connection with the outcome of a particular contract, such as the way same is extinguished: Provided, however, That the municipal treasurer shall not charge fees for the registration of said contract which shall be exempt from the documentary stamp tax.

    “In 1954, Republic Act No. 1199, or the Agricultural Tenancy Act of the Philippines, repealed Act No. 4054.8Republic Act No. 1199 (1954), sec. 59. In line with its objective of pursuing social justice, this subsequent law redefined agricultural tenancy arrangements and recognized more tenant-farmers’ rights.9Republic Act No. 1199 (1954), sec. 22. The law also expanded the coverage beyond lands devoted to rice production and included share arrangement provisions for crops other than rice.10Republic Act No. 1199 (1954), sec. 41.

    “More important, Republic Act No. 1199 categorized agricultural tenancy into either share tenancy or a new system called leasehold tenancy. Whereas under share tenancy, the landlord and tenant contribute land and labor and later divide the resulting produce in proportion to their contribution,11Republic Act No. 1199 (1954), sec. 4. under leasehold tenancy, the lessee cultivates the landlord’s piece of land for a fixed amount of money or in produce, or both.12Republic Act No. 1199 (1954), sec. 4, as amended by Republic Act No. 2263 (1959), sec. 1.

    “Over time, share tenancy proved to be an abusive arrangement that heavily disadvantaged tenant-farmers. Thus, for being contrary to public policy, it was abolished with the passage of Republic Act No. 3844, or the Agricultural Land Reform Code.13Republic Act No. 3844 (1963), sec. 4. President Diosdado Macapagal, in his address during the signing of the law, recognized the need to end the oppressive system of share tenancy:

    “‘This document before us, a bill which in a few minutes will become a statute to be known as the Agricultural Land Reform Code, will provide us with the legal powers to remove once and for all the system of share-tenancy that has plagued our agricultural countryside. In one statement it declares share tenancy as violative of the law of the land, a system which will be abolished and will no longer be tolerated by law. But the Code does not only provide us with powers to remove an organic disease from our agricultural society; it also provides the means of injecting new health, new vigor, new muscles, and new strength into the new social order that will arise. Its first and immediate step is to destroy an oppressive and intolerable system; its ensuing objectives — which will constitute the sinews of land reform — is to nurse our agricultural economy into a state of healthy productivity. It not only aims to turn the Filipino tenant into a free man; it aims, most of all, to turn him into a more productive farmer.’14Address of President Macapagal at the Signing of the Agricultural Land Reform Code, August 8, 1963, https://www.officialgazette.gov.ph/1963/08/08/address-of-president-macapagal-at-the-signing-of-the-agricultural-land-reform-code/ (last accessed on January 14, 2020).

    “Still in line with the government’s policy of eliminating existing share tenancy arrangements, the law was amended such that all existing share tenancy relations are automatically converted to agricultural leasehold relations.15Republic Act No. 3844 (1963), sec. 4, as amended by Republic Act No. 6389 (1971), sec. 1. Today, agricultural leasehold relations remain to be the only form of agricultural tenancy arrangement under the law.”

    Further reading:

    • Spouses Franco v. Spouses Galera, Jr., G.R. No. 205266, January 15, 2020.

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  • Food Provisions on a Ship

    The seafarer entered into a 6-month employment contract with CTI, through UPLI, to work as a stateroom steward aboard the vessel Carnival Glory. After passing the pre-employment medical examination, he joined the vessel on 26 February 2014.

    Sometime in March 2014, the seafarer reported passing out fresh blood during bowel movement but with no fever, abdominal pain or vomiting. He was treated at the vessel infirmary. Thereafter, he was brought to the Charleston Endoscopy Center in South Carolina, USA for colonoscopy. His biopsy, however, indicated “Segments of Invasive Moderately Differentiated Adenocarcinoma.”

    On 12 June 2014, the seafarer was medically repatriated. Upon his arrival in Manila, UPLI immediately referred him to the Marine Medical Services for further evaluation and management. Thereafter, the company-designated doctor confirmed that respondent was suffering from “Moderately Differentiated Adenocarcinoma Rectum.” The seafarer underwent a surgical operation (Abdominal Resection) and was subsequently subjected to concurrent chemotherapy and radiation therapy.

    On 18 January 2016, respondent filed a complaint for permanent total disability benefits against UPLI and CTI.

    ULPI and CTI countered that the seafarer’s illness was not compensable because it was not work-related or listed among the occupational diseases under the Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships (POEA-SEC). It added that respondent likewise did not prove the causal relation between his illness and his work as stateroom steward.

    Should the seafarer be granted his claim for permanent total disability benefits?

    The Supreme Court granted the seafarer’s claim for permanent total disability benefits.

    The Court cited Section 20 (A) of the POEA-SEC, and ruled that in order for a disability to be compensable, (i) the injury or illness must be work-related; and, (ii) the work-related injury or illness must have existed during the term of the contract of the seafarer. In turn, “work-related illness” pertains to such sickness listed as occupational disease under Section 32-A of the POEA-SEC with the set conditions therein satisfied. An illness not listed as occupational disease is, nonetheless, disputably presumed work-related provided that the seafarer proves, by substantial evidence, that his or her work conditions caused or, at the least, increased his or her having contracted the same.1Ilustricimo v. NYK-Fil Ship Management, Inc., G.R. No. 237487, June 27, 2018.

    The Court also emphasized that for a disease to be compensable, the nature of work need not be the only reason for the seafarer to suffer his or her illness. What is crucial is the reasonable connection between the seafarer’s disease and one’s work leading a rational mind to conclude that such work contributed to or aggravated the development of the illness.2Ilustricimo v. NYK-Fil Ship Management, Inc., G.R. No. 237487, June 27, 2018.

    On the one hand, the Court found that the seafarer was able to establish a reasonable link between his having suffered rectal cancer and his work. Similarly, he was able to establish that his work conditions increased his having contracted his illness considering that the dietary provision on the vessel (food high in cholesterol and fat and low in fiber) was a known cause of rectal cancer.

    The Court mentioned that it has already taken judicial notice of the food provisions on a ship which are produced at one time for long journeys across the oceans and seas. In Skippers United Pacific, Inc. v. Lagne,3G.R. No. 217036, August 20, 2018, the Court recognized that the food provided to seafarers are mostly frozen meat, canned goods and seldom are there vegetables which easily rot and wilt and, therefore, impracticable for long trips. Also, in the case of Jebsens Maritime, Inc. v. Alcibar,4G.R. No. 221117, February 20, 2019. the Court similarly ruled that rectal cancer of therein respondent was work-related as the latter proved that the cause thereof was the poor provisions — high in fat and cholesterol and low in fiber — given to him while at sea. Such poor provisions were on the same level with those given to herein respondent while he was still aboard the vessel. Furthermore, the Court had already pronounced the compensability of colorectal cancer in Leonis Navigation Co., Inc. v. Villamater.5G.R. No. 179169, March 3, 2010, 628 PHIL 81-100. According to the Court, it cannot be gainsaid that the poor diet of the herein seafarer while at sea contributed to his having developed rectal cancer during the term of his employment contract.

    On the other hand, the Court also found that although UPLI and CTI argued that the company-designated doctor declared the seafarer’s illness as not work-related, the pronouncement of the company-designated physician had actually bolstered the contention that the seafarer’s diet on the vessel contributed to him having suffered from rectal cancer. The Court highlighted the company-designated physician’s medical report of 14 June 2014 which read:

    Adenocarcinoma’s risk factors include age, diet rich in saturated fat; fatty acid and linoleic acid and genetic predisposition and is likely not work-related.6Emphasis supplied.

    For the Court such report cited that one of the risk factors of rectal cancer was poor diet. Also, such report did not categorically state that respondent’s illness was not work-related but that it was just likely not work-related without any explanation for saying so.

    Further reading:

    • United Philippine Lines, Inc. v. Romasanta, Jr., G.R. No. 239256, January 15, 2020.

  • Implied Tenancy Relationship

    On 5 February 2006, the spouses G filed a complaint for legal redemption against the spouses F before the Regional Adjudicator in Baguio City,

    The spouses G alleged therein that in 1990, they were instituted by B as tenants of 2 agricultural landholdings. Eventually, B agreed to sell the properties to the spouses G in 2005. However, on 13 June 2005, B canceled the sale. Soon, the spouses G learned that B had sold the two (2) lots to the spouses F, as embodied in a 19 July 2005 Extra-Judicial Adjudication of Real Property with Absolute Sale that B executed in favor of said spouses F.

    The spouses G thus filed the said complaint praying among others, that: (1) as agricultural tenants, they be allowed to redeem the two (2) lots from spouses F; and (2) the spouses F be ordered to reconvey the lots to them.

    The spouses F argued that the spouses G, not being parties to the sale, had no cause of action against them. They further pointed out that the spouses G were merely caretakers and had no tenancy relationship with B, and as such, had no right of redemption available to agricultural tenants under Section 12 of the Code of Agrarian Reforms of the Philippines.

    Should the spouses G be considered as agricultural tenants

    The Supreme Court ruled in the affirmative.

    The Court explained that for a valid agricultural tenancy arrangement to exist, these elements must concur:

    • The parties are the landowner and the tenant;
    • The subject matter is agricultural land;
    • There is consent between the parties;
    • The purpose is agricultural production;
    • There is personal cultivation by the tenant; and
    • There is sharing of the harvests between the parties.1Adriano v. Tanco, G.R. No. 168164, July 5, 2010, 637 PHIL 218-229 (Citation omitted)

    The Court added that all these elements must be proven by substantial evidence; “the absence of one or more requisites is fatal.” As with any affirmative allegation, the burden of proof rests on the party who alleges it. The tenancy relationship cannot be presumed.2Adriano v. Tanco, G.R. No. 168164, July 5, 2010, 637 PHIL 218-229 and J.V. Lagon Realty Corp. v. Heirs of Vda. De Terre, G.R. No. 219670, June 27, 2018. Agricultural tenancy arrangements under the Code of Agrarian Reforms of the Philippines may be established either orally or in writing. The form of the contract is only prescribed when parties decide to reduce their agreement in writing, but it no longer affects the tenancy arrangement’s validity.3Code of Agrarian Reforms of the Philippines, Sections 5 and 17.

    In the present case, the Court found that certain disinterested persons testified and established that the spouses G were tenants of B in the landholdings, as follows:

    • B installed the spouses G as their tenants;
    • They had a 50-50 sharing arrangement of the farm produce;
    • The spouses G delivered harvest shares to B; and
    • There was a practice in in the area that for one to be a tenant, he or she may simply secure the landowner’s verbal consent, without any written agreement.

    The Court further stated that even if the B had not expressly instituted the spouses G as tenants, agricultural tenancy may still be established either expressly or impliedly on the basis of Republic Act No. 1199 and the Code of Agrarian Reforms of the Philippines.4Santos v. De Cerdenola, G.R. No. L-18412, July 31, 1962, 115 PHIL 813-820.

    Section 7 of Republic Act No. 1199 states:

    SECTION 7. Tenancy Relationship; How established; Security of Tenure. — Tenancy relationship may be established either verbally or in writing, expressly or impliedly. Once such relationship is established, the tenant shall be entitled to security of tenure as hereinafter provided.

    Section 5 of the Code of Agrarian Reforms of the Philippines then states:

    SECTION 5. Establishment of Agricultural Leasehold Relation. — The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this Code and, in other cases, either orally or in writing, expressly or impliedly.

    In other words, the Court clarified that an express agreement is not necessary to establish the existence of agricultural tenancy. The tenancy relationship can be implied when the conduct of the parties shows the presence of all the requisites under the law.

    In the present case, the Court ruled that the tenancy relationship was, nonetheless, implied from the conduct of the parties, based on the following findings:

    • The spouses G had been tilling and cultivating the lands since 1990;
    • B had been receiving their share of the harvest; and
    • After B’s death, the spouses G continued to deliver the landowner’s share of the harvest to the heirs.

    For the Court, these circumstances indicated that B and his successor-in-interest had known and consented to the tenancy arrangement.

    Were they entitled to legal redemption?

    The Supreme Court also ruled in the affirmative.

    The Court discussed that in agricultural leasehold relations, the agricultural lessor — who can be the owner, civil law lessee, usufructuary, or legal possessor of the land — grants his or her land’s cultivation and use to the agricultural lessee, who in turn pays a price certain in money, or in produce, or both.5Dissenting Opinion of J. Leonen, J.V. Lagon Realty Corporation v. Heirs of vda. de Terre, G.R. No. 219670, June 27, 2018, http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/64252 [J. Martires, Third Division] citing R.P. BARTE, LAW ON AGRARIAN REFORM 6-7 (2003). The definition and elements of leasehold tenancy relations are similar to those of share tenancy.6Dissenting Opinion of J. Leonen, J.V. Lagon Realty Corporation v. Heirs of vda. de Terre, G.R. No. 219670, June 27, 2018, http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/64252 [J. Martires, Third Division] citing Spouses Cuaño v. Court of Appeals, G.R. No. 107159, September 26, 1994, 307 PHIL 128-149. A slight difference, however, exists: a leasehold relation is not extinguished by the mere expiration of the contract’s term or period, nor by the sale or transfer of legal possession of the land to another. Section 10 of the Code of Agrarian Reforms of the Philippines states:

    SECTION 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. — The agricultural leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding. In case the agricultural lessor sells, alienates or transfers the legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor.

    The Court stated that from the foregoing discussion the agricultural lessor is not prohibited from selling or disposing of the property. In case he or she does, the agricultural leasehold relation subsists. Corollary to this, the law also grants the agricultural lessee the right to preempt an intended sale. But if the property has been sold without the agricultural lessee’s knowledge, he or she shall have the right to redeem the property, as in line with the law’s objective of allowing tenant-farmers to own the land they cultivate. The Court pointed to Section 12 of the Code of Agrarian Reforms of the Philippines,7Republic Act No. 3844 (1963), sec. 12, as amended by Republic Act No. 6389 (1971), sec. 2. which provides:

    SECTION 12. Lessee’s Right of Redemption. — In case the landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price and consideration: Provided, That where there are two or more agricultural lessees, each shall be entitled to said right of redemption only to the extent of the area actually cultivated by him. The right of the redemption under this Section may be exercised within one hundred eighty days from notice in writing which shall be served by the vendee on all lessees affected and the Department of Agrarian Reform upon the registration of the sale, and shall have priority over any other right of legal redemption. The redemption price shall be the reasonable price of the land at the time of the sale.

    Upon the filing of the corresponding petition or request with the department or corresponding case in court by the agricultural lessee or lessees, the said period of one hundred and eighty days shall cease to run.

    Any petition or request for redemption shall be resolved within sixty days from the filing thereof; otherwise, the said period shall start to run again.

    The Court continued that under the law, the agricultural lessor must first inform the agricultural lessee of the sale in writing. From this point, a 180-day period commences, within which the agricultural lessee must file a petition or request to redeem the land. The written notice shall be served on the agricultural lessee as well as on the Department of Agrarian Reform upon registration of the sale. The right of redemption granted to the agricultural lessee enjoys preference over any other legal redemption that may be exercised over the property. Upon filing of the petition or request, the 180-day period shall cease to run, and will commence again upon the resolution of the petition or request or within 60 days from its filing.

    In the present case, since the spouses G were the agricultural tenants of the landholdings, they were also entitled to the right of redemption. Accordingly, the spouses G may exercise their right to purchase the lots by paying a reasonable price of the land at the time of the sale.

    In highlighting the significance of a tenant’s right of redemption, the Court stated:

    Our agrarian reform laws are witness to the country’s attempts at reversing unjust structures developed throughout centuries of oppressive land regimes. Agrarian justice aims to liberate sectors that have been victimized by a system that has perpetuated their bondage to debt and poverty. Its goal is to dignify those who till our lands — to give land to those who cultivate them.

    The protection of tenancy relations is only one of agrarian reform’s significant features. The State, acknowledging that tenancy relations have an inherent imbalance that disadvantages farmer-tenants and privileges landowners, sought to it that this relationship is regulated so that social justice might be achieved. Ultimately, the program aims to remove farmer-tenants from the system that had once oppressed them by making the tenant, once just the tiller, owner of his or her land.

    Further reading:

    • Spouses Franco v. Spouses Galera, Jr., G.R. No. 205266, January 15, 2020.

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  • Seafarer’s Surviving Legitimate Spouse, a Necessary Party in a Complaint for Death Benefits

    In Leonis Navigation Agency, Inc. v. Dagos,1G.R. No. 241909, January 14, 2019. the Supreme Court ruled that the surviving legitimate spouse of the seafarer is not an indispensable party but only a necessary party in a complaint for death benefits. According to the Court, there is no law stating that only the legal spouse has the legal standing to institute a complaint to claim death benefits under the Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships2Philippine Overseas Employment Administration Memorandum Circular No. 10-10.. The failure to implead her will not result in the dismissal of the claim.

    Further reading:

    • Leonis Navigation Agency, Inc. v. Dagos, G.R. No. 241909, January 14, 2019.

  • Guarded Prognosis

    In one case, the Supreme Court reiterated the following rules relating to seafarer claims of total and permanent disability benefits:

    • The company-designated physician must issue a final medical assessment on the seafarer’s disability grading within a period of 120 days from the time the seafarer reported to him;
    • If the company-designated physician fails to give his assessment within the said period of 120 days without any justifiable reason, then the seafarer’s disability becomes permanent and total;
    • If the company-designated physician fails to give his assessment within the said period of 120 days with a sufficient justification (e.g., seafarer required further medical treatment or seafarer was uncooperative), then the period of diagnosis and treatment shall be extended for another 120 days (or up to 240 days from the time the seafarer reported to him). The employer has the burden to prove that the company-designated physician has sufficient justification to extend the period; and
    • If the company-designated physician still fails to give his assessment within the said extended period, then the seafarer’s disability becomes permanent and total, regardless of any justification.

    With regard to the company-designated physician’s medical assessment, the Court set forth the following requirements for determining the seafarer’s condition:

    • The assessment must be issued within the 120/240-day window; and
    • It must be final and definitive.

    In the present case, the Supreme Court found that the company-designated physician’s medical report was issued within the 240-day period. However, the Court ruled that the said report was not final and definitive.

    According to the Court, a final and definitive disability assessment is necessary in order to truly reflect the extent of the sickness or injuries to the seafarer and his or her capacity to resume work as such. To be conclusive, the medical assessments or reports:

    • must be complete and definite to give the proper disability benefits to seafarers
    • must also be supported with sufficient bases.

    The Court found that the company-designated physician’s medical report merely states that

    • the seafarer’s “prognosis for returning to sea duties is guarded” and
    • “if patient is entitled to disability, his suggested disability grading is Grade 10 — loss of grasping power for large objects.”

    The Court added that the report was notably bereft of any statement or explanation as to how the company-designated physician arrived with her medical conclusion. The report also did not even contain a definite statement as to the seafarer’s fitness to return to sea duties as it states that his prognosis of returning to his sea duties is still guarded.

    Furthermore, the company-designated physician failed to explain in detail the progress of the seafarer’s treatment and the approximate period needed for him to fully recover. Said physician merely adopted the findings or observations of the Orthopedics and Spine Surgery specialist.

    Thus, the Court ruled that the company-designated physician’s medical assessment was not final and definitive. The seafarer’s disability is deemed permanent and total by operation of law. The seafarer was awarded $110,000.00 under the CBA.

    Further reading:

    • Wilhelmsen-Smithbell Manning, Inc. v. Aleman, G.R. No. 239740 (Notice), January 8, 2020.

  • Sole Owner-Cultivator

    Presentacion is the eldest daughter of the late Ireneo, an Operation Land Transfer beneficiary of agricultural land in Iloilo.

    Mariano, in turn, is the husband of Presentacion’s younger sister, Vicenta.

    After the death of Vicenta, Presentacion sought to recover possession of the said agricultural land from Mariano. Thus, on 16 March 2001, Presentacion filed a case against Mariano for ejectment from the said land. Presentacion asserts that Mariano illegally possessed the said agricultural land and deprived her of possession of the same. Presentacion thus prayed that Mariano be ordered to vacate the agricultural land.

    Mariano admitted his refusal to turn over the land. However, he denied that his possession was illegal. According to Mariano, his possession of the land was by virtue of being a tenant on the land because he had continuously worked thereon for more than 30 years and had fully paid its amortization with the Land Bank of the Philippines. Mariano added that Presentacion had neither cultivated nor possessed the land nor paid a single centavo for its amortization.

    With the death of Ireneo (the beneficiary) to whom should the agricultural land be transferred?

    Presentacion has the right to possess the subject agricultural land since she is its qualified sole owner-cultivator. Mariano has to vacate the same.

    Presidential Decree No. 27 provides:

    Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be transferable except by hereditary succession or to the Government in accordance with the provisions of this Decree, the Code of Agrarian Reforms and other existing laws and regulations.1Emphasis supplied.

    In the present case, the subject agricultural land had been granted to the late Ireneo, the original farmer-beneficiary, pursuant to Presidential Decree No. 27. Applying the provisions of the said law, the transferability of said land upon Ireneo’s death could be through hereditary succession in accordance with the provisions of Presidential Decree No. 27 and relevant regulations.

    The Department of Agrarian Reform2Formerly the Ministry of Agrarian Reform promulgated Memorandum Circular No. 19, Series of 1978, or the Rules and Regulations in Case of Death of a Tenant-Beneficiary. This Memorandum Circular implemented the limitation on transferability set forth in Presidential Decree No. 27 for the purpose of carrying out the Government’s declared policy of establishing “owner-cultivatorship x x x as the basis of agricultural development of the country.”

    The pertinent provisions of Memorandum Circular No. 19 state:

    1. Succession to the farmholding covered by [OLT], shall be governed by the pertinent provisions of the New Civil Code of the Philippines subject to the following limitations:

    x x x

    b. The ownership and cultivation of the farmholding shall ultimately be consolidated in one heir who possesses the following qualifications:

    (1) being a full-fledged member of a duly recognized farmers’ cooperative;

    (2) capable of personally cultivating the farmholding; and

    (3) willing to assume the obligations and responsibilities of a tenant-beneficiary.

    2. For the purpose of determining who among the heirs shall be the sole owner-cultivator, the following rules shall apply:

    x x x

    b. Where there are several heirs, and in the absence of extra-judicial settlement or waiver of rights in favor of one heir who shall be the sole owner and cultivator, the heirs shall within one month from death of the tenant-beneficiary be free to choose from among themselves one who shall have sole ownership and cultivation of the land, subject to Paragraph 1(b) and (c) hereof: Provided, however, That the surviving spouse shall be given first preference; otherwise, in the absence or due to the permanent incapacity of the surviving spouse, priority shall be determined among the heirs according to age.

    c. In case of disagreement or failure of the heirs to determine who shall be the owner-cultivator within the period prescribed herein, the priority rule under the proviso of Paragraph 2(b) hereof shall apply.3Emphasis supplied.

    In the present case, Mariano did not dispute that Presentacion was the oldest surviving heir of Ireneo at the time of the latter’s death. Also, Mariano did not assail that Presentation possessed the qualifications necessary to succeed Ireneo as new owner-cultivator under Memorandum Circular No. 19, Series of 1978. Thus, in the absence of any extra-judicial settlement assigning in Vicenta’s (Mariano’s wife) favor the priority right to become sole owner and cultivator of the disputed lots, Mariano’s claim of possession was left with no leg to stand on.

    Further reading:

    • Golez v. Abais, G.R. No. 191376, January 8, 2020.

  • We’ve Already Assigned Our Shares to Another Person

    On 6 December 2005, the Social Security System filed a petition for the issuance of a warrant of levy and garnishment of the personal properties and bank accounts of the directors of a dissolved corporation to satisfy its unremitted contributions and penalties.

    In their defense, A and B (both directors) averred that they had already assigned their respective shares to certain persons on 5 May 1998. According to A and B, they already ceased to be directors and were no longer connected in any capacity with the corporation at the time of the alleged non-remittance of the contributions. A and B stress that since their Deed of Assignment was notarized, the assignment was binding upon third parties, including the Social Security System.

    Can a director of a dissolved corporation be held solidarily liable for its unremitted Social Security System contributions?

    The Supreme Court ruled in the affirmative. It found that the Social Security System was not bound to recognize the transfer, there being no showing that the transfer of their shares was recorded in the books of the corporation. Furthermore, under prevailing jurisprudence,1Philex Gold Phil. Inc. v. Philex Bulawan Supervisors Union, G.R. No. 149758, August 25, 2005, 505 PHIL 224-240. a corporate director may be held jointly and severally liable with the corporation when a director, trustee or officer is made, by a specific provision of law, personally liable for his corporate action. In this regard, the Supreme Court pointed to Section 28 (f) of the Social Security Act of 1997,2NOTE: This provision also appears in the Social Security Act of 2018 (Republic Act No. 11199) as follows: “SECTION 28. Penal Clause. — x x x (f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable for the penalties provided in this Act for the offense.” which reads:

    “Sec. 28. Penal Clause. — x x x

    “(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable to the penalties provided in this Act for the offense.”

    Further reading:

    • Dox & Parcel Courier Express International, Inc. v. Social Security System, G.R. No. 225648, January 8, 2020.

  • A Seafarer’s Cause of Action Arises Upon His Disembarkation from the Vessel

    On 4 February 2010, Khalifa Algosaibi, through its agent, 88 Aces, hired Apolinario as an ordinary seaman to board the vessel MV Algosaibi 42. His employment contract was for a duration of 6 months.

    After passing the required pre-employment medical examination, Apolinario left Manila on 26 February 2010 and embarked MV Algosaibi 42 in Ras Tanura, Kingdom of Saudi Arabia.

    After completing his contract in August 2010, Apolinario was not repatriated to the Philippines, for he directly entered into a new employment contract with 88 Aces’ foreign principal, Khalifa Algosaibi. This new contract with Khalifa Algosaibi lasted until April 2012.

    While on board MV Algosaibi 42 in December 2010, Apolinario suddenly experienced dizziness. As his condition did not improve, he was sent to As Salama Hospital in Al-Khobar, Kingdom of Saudi Arabia where he was found to have high glucose and cholesterol. Apolinario notes that he was given medicine by the doctor and was advised to observe proper diet and avoid stress. After taking the doctor’s advice, his medical condition improved and he was able to perform his work well.

    However, after 2 years, particularly in January 2012, Apolinario alleged that his dizziness recurred, accompanied by the blurring of his vision. On 2 April 2012, he stated that he returned to As Salama Hospital where he was diagnosed to have diabetes mellitus and dislipedemia.

    In 11 April 2012, Apolinario was repatriated in Manila.

    Apolinario claims that he immediately reported to the office of 88 Aces to get his unpaid wages and for him to be referred to the company physician. However, 88 Aces viewed that his repatriation happened because he completed his 6-month Philippine Overseas Employment Administration standard employment contract. Thus it declined to shoulder his medical expenses. Apolinario no longer insisted on treatment and just continued taking the medicine given by the Kingdom of Saudi Arabia doctor.

    Although Apolinario felt well, his illness recurred on 2 August 2013. Apolinario then consulted Dr. Joseph Glenn Dimatatac, an internal medicine physician, who informed him that his illness was indeed diabetes mellitus.

    On 17 March 2015, Apolinario consulted Dr. Rufo Luna, the Municipal Health Officer of the Municipality of San Jose, who declared him to be physically unfit to continue work due to his hyperglycemia. Consequently, Apolinario demanded, albeit unsuccessfully, the payment of his disability benefits from his employer.

    Apolinario filed his Request for Single Entry Approach at the National Labor Relations Commission on 25 March 2015. Then, on 8 May 2015, he filed a Complaint against Khalifa Algosaibi, 88 Aces, and Jocson (Respondents) before the Office of the Labor Arbiter for the payment of disability benefits.

    Respondents, on the other hand, denied liability for the following reasons:

    • Apolinario filed his Complaint 5 years after the completion of his employment contract in August 2010. Thus, his cause of action had already prescribed, not having been filed within the 3-year prescriptive period set by law.
    • Apolinario finished his 6-month employment contract in August 2010 without any medical issue whatsoever.
    • Apolinario actually failed to comply with the 3-day post-employment medical examination requirement.

    RULING:

    RE: Prescription

    Under the standard employment contract of the Philippine Overseas Employment Administration, a contract between an employer and a seafarer ceases upon its completion, when the seafarer signs off from the vessel and arrives at the point of hire.1Section 2, Philippine Overseas Employment Administration Memorandum Circular No. 10, Series of 2010 (Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships [October 26, 2010])

    In this case, while Apolinario’s 6-month contract may have ended as early as August 2010, he nonetheless was able to sign off from MV Algosaibi 42 and arrive at the point of hire only on 11 April 2012.

    (Significance: A seafarer’s cause of action arises upon his disembarkation from the vessel.)

    As Apolinario’s disembarkation from the Algosaibi 42 was on 11 April 2012, he had three years from the date, or until April 11, 2015, to make a claim for disability benefits.

    Apolinario had requested for a Single Entry Approach2The Single Entry Approach is an administrative approach to provide an accessible, speedy, and inexpensive settlement of complaints arising from employer-employee relationship to prevent cases from ripening into full blown disputes. All labor and employment disputes undergo this 30-day mandatory conciliation-mediation process. before the National Labor Relations Commission as early as 25 March 2015.

    The fact that Apolinario filed his Complaint before the Office of the Labor Arbiter only on 8 May 2015 is of no moment. Since the Single Entry Approach is a pre-requisite to the filing of a Complaint before the Office of the Labor Arbiter, the date when Apolinario should be deemed to have instituted his claim was when he instituted his Request for Single Entry Approach on 25 March 2015. Considering that the expiration of Apolinario’s cause of action was on 11 April 2015, his claim was filed well within the 3-year prescriptive period.

    RE: Disability benefits

    The Supreme Court ruled that Apolinario is entitled to permanent total disability benefits.

    Under the Philippine Overseas Employment Administration Standard Employment Contract, those illnesses, such as diabetes mellitus, which are not listed as an occupational disease are disputably presumed as work-related.3Section 20 (A) (4), Philippine Overseas Employment Administration Memorandum Circular No. 10, Series of 2010 (Amended Standard Terms and Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going Ships [October 26, 2010])

    According to the Court, the effect of the legal presumption in favor of the seafarer is to create a burden on the part of the employer to present evidence to overcome the prima facie case of work-relatedness. Absent any evidence from the employer to defeat the legal presumption, the prima facie case of work-relatedness prevails.

    To reinforce the prima facie case in his favor, Apolinario stated that during the existence of his contract, he experienced recurring dizziness and was diagnosed at As Salama Hospital in Al-Khobar Saudi Arabia to have contracted diabetes mellitus. In fact, while on board the vessel, he was twice sent to As Salama Hospital in Al-Khobar Saudi Arabia for medical treatment. To support his claim, Apolinario presented the medical record issued by the hospital and the different medical certificates of his physicians after his repatriation in Manila stating that he is already physically unfit to return to work due to his diabetes mellitus.

    On the other hand, the Supreme Court found that respondents failed to present a scintilla of proof to establish the lack of casual connection between Apolinario’s disease and his employment as a seafarer.

    The Court stated that had respondents granted Apolinario’s request to undergo a post-employment medical check-up, they could have presented a medical finding to contradict the presumption of work-relatedness of Apolinario’s illness. The post-employment medical check-up could have been the proper basis to determine the seafarer’s illness, whether it was work-related, or its specific grading of disability. Having failed to present any evidence to defeat the presumption of work-relatedness of Apolinario’s diabetes mellitus, the prima facie case that it is work-related prevails.

    Nonetheless, the Supreme Court clarified that the presumption provided under Section 20 (A) (4) is only limited to the “work-relatedness” of an illness. It does not cover and extend to compensability. In this sense, there exists a fine line between the work-relatedness of an illness and the matter of compensability. Work-relatedness merely relates to the assumption that the seafarer’s illness, albeit not listed as an occupational disease, may have been contracted during and in connection with one’s work, whereas compensability pertains to the entitlement to receive compensation and benefits upon a showing that a seafarer’s work conditions caused or at least increased the risk of contracting the disease.

    The Supreme Court noted the medically accepted finding that stress has major effects on a person’s metabolic activity. The effects of stress on glucose metabolism are mediated by a variety of counter-regulatory hormones that are released in response to stress and that result in elevated blood glucose levels and decreased insulin action. In diabetes, because of a relative or absolute lack of insulin, the increase in blood glucose on account of stress cannot be adequately metabolized. Thus, stress is a potential contributor to chronic hyperglycemia in diabetes.

    In this case, to prove that his work conditions caused or at least increased the risk of contracting the disease, Apolinario showed that part of his duties as an Ordinary Seaman in MV Algosaibi 42 involved strenuous workload such as assist in the handling and operation of all deck gear such as topping, cradling and housing of booms; aid the carpenter in the repair work when requested; scale and chip paint, handle lines in the mooring of the ship, assist in the actual tying up and letting go of the vessel and stand as a lookout in the vessel. Apolinario further stated that while inside the vessel for several months, he was exposed to physical and psychological stress due to rush jobs, lack of sleep, heat stress, emergency works and homesickness for being away from his family. From the above enumeration of Apolinario’s duties on board the vessel, he was certainly exposed to various strain and stress — physical, mental and emotional.

    Respondents failed to adduce any contrary medical findings from the company-designated physician to show that Apolinario’s illness was not caused or aggravated by his working conditions on board the vessel. There was also no showing that Apolinario is predisposed to the illness by reason of genetics, obesity or old age. Thus, the Supreme Court considered that the stress and strains he was exposed to on board contributed, even to a small degree, to the development of his disease. Inasmuch as compensability is the entitlement to receive disability compensation upon a showing that a seafarer’s work conditions caused or at least increased the risk of contracting the disease, Apolinario’s disease was thus declared compensable.

    RE: Reportorial Requirement

    While the requirement to report within three working days from repatriation appears to be indispensable in character, the Supreme Court enumerated the established exceptions to this rule:

    • when the seafarer is incapacitated to report to the employer upon his repatriation; and
    • when the employer inadvertently or deliberately refused to submit the seafarer to a post-employment medical examination by a company-designated physician.4Falcon Maritime and Allied Services, Inc., et al. v. Angelito B. Pangasian, G.R. No. 223295, March 13, 2019.

    Here, Apolinario avers that two days after his repatriation to Manila on 11 April 2012, he reported to the office of 88 Aces to get his unpaid wages and for him to be referred to the company designated physician. However, since his repatriation was due to the completion of his six-month Philippine Overseas Employment Administration-approved employment contract, he was told by 88 Aces through Jocson that they could not shoulder his medical expenses. Having been denied to undergo the post medical examination, Apolinario just continued taking the medicine given to him by the doctor in Saudi Arabia.

    Between the two conflicting allegations from Apolinario and respondents, the Supreme Court resolved the doubt in favor of Apolinario. Besides, the factual backdrop of the case supports Apolinario’s allegation that he requested to be referred to a company designated physician. It noted that Apolinario repeatedly experienced dizziness and headaches, and needed medical attention while on board MV Algosaibi 42. In fact, because of his recurring sickness, he was examined twice at As Salama Hospital in Al-Khobar Saudi Arabia and even underwent thorough treatment thereat 10 days prior to his repatriation to Manila. Given Apolinario’s sensitive medical condition days prior to his repatriation, The Court doubted respondents’ allegation that Apolinario did not request to be referred to post-employment medical examination when he arrived in Manila. Apolinario’s medical condition during and after his employment on board lends credence to his claim that he asked to be medically examined by a company-designated physician but he was prevented so by respondents.

    According to the Supreme Court, respondents had the opportunity to refer Apolinario to a company-designated physician, but they chose to escape their responsibility. Between the non-existent medical assessment of the company-designated physician and the medical assessment of Apolinario’s doctor of choice — stating that his disability is permanent and total — the latter evidently stands. Absent a certification from the company-designated physician, the law steps in to conclusively characterize his disability as total and permanent.

    Further Reading:

    • Zonio, Jr. v. 88 Aces Maritime Services, Inc., G.R. No. 239052, October 16, 2019.

  • Exemptions under Section 10 of the CARL, an Exclusive List

    The MDA Corporation obtained a commercial loan from the Government Service Insurance System. This loan was secured by a mortgage over a parcel of agricultural land.

    Since the MDA Corporation was unable to pay the loan, the Government Service Insurance System foreclosed the agricultural land. After the lapse of the redemption period, ownership of said land was consolidated in the Government Service Insurance System.

    Subsequently, the Department of Agrarian Reform issued a Notice of Coverage concerning the agricultural land and offered to pay the Government Service Insurance System more than Php4 million for the property.

    The Government Service Insurance System, in turn, protested the coverage and filed before the Department of Agrarian Reform a Petition asking that the property be excluded from compulsory agrarian reform coverage. In support of its petition, the Government Service Insurance System asserts that under Section 39 of Republic Act No. 8291, or The Government Service Insurance System Act of 1997, its properties cannot be utilized for agrarian reform purposes as such provision exempts its properties from agrarian reform coverage.

    Should the property be excluded from coverage of the Comprehensive Agrarian Reform Program?

    No, the Court did not exclude the land from agrarian reform coverage because the exemptions under Section 10 of the Comprehensive Agrarian Reform Law of 1988 form an exclusive list. Thus, it could not simply impute into a statute an exception which Congress did not incorporate. Moreover, general welfare legislation such as land reform laws is to be construed in favor of the promotion of social justice to ensure the well-being and economic security of the people. Since a broad construction of the provision listing the properties exempted under the Comprehensive Agrarian Reform Law of 1988 would tend to denigrate the aims of agrarian reform, a strict application of these exceptions is in order.

    Further reading:

    • Government Service Insurance System v. Datoy, G.R. No. 232863, July 24, 2019.

  • Seafarer’s Obligation to Comply with His Medical Treatment

    Seachest Associates, through its manning agent, Maunlad Trans, Inc. hired the seafarer as a Galley Steward on-board MV Carnival. Several months into his employment, the seafarer began experiencing seasickness and extreme low back pains. Despite medications administered by the ship’s clinic, the pain persisted and extended down to the seafarer’s left thigh.

    Soon, the seafarer was medically repatriated and arrived in the Philippines on 23 January 2010. He reported to Maunlad Trans, Inc. and was referred to its designated physician. The seafarer underwent physical therapy sessions and was diagnosed with ‘lumbar spondylosis with disc extrusion, L3-L4.’ He was also advised to undergo surgery, spine laminectomy. However, he did not approve of the same and instead underwent physical therapy sessions. According to the seafarer, he refused because the company-designated physician informed him that the surgery will not guarantee a return to his normal condition.

    On 6 May 2010, the seafarer returned for a follow-up, and the report on his condition stated:

    Follow-up case of 28 years old male with Herniated Nucleus
    Pulposus, L3-L4, Left.
    EMG-NCV Study — chronic left L5-S1 radiculopathy
    Not keen on surgery.
    Continue rehabilitation.
    His suggested disability grading is Grade 8 — 2/3 loss of motion or lifting power of the trunk.
    To come back after 3 weeks.

    On 14 May 2010, the seafarer filed his complaint for total and permanent disability benefits since his condition did not improve for purposes of resuming regular duties as a seafarer. The employers retorted that the company-designated physician assessed the seafarer a disability rating of Grade 8, which had equivalent monetary benefits in the amount of US$16,795.00.

    The Office of the Labor Arbiter ruled that the company-designated physician’s Grade 8 disability rating was premature, in that it was made only to comply with the 120-day period as mandated in the Philippine Overseas Employment Administration Standard Employment Contract. The said Office further ruled that the work-related disability incurred by the seafarer had prevented him from seeking employment. Permanent disability benefits was accordingly awarded in favor of the seafarer.

    The National Labor Relations Commission and the Court of Appeals affirmed the Decision of the Office of the Labor Arbiter. The Court of Appeals added that:

    • the company-designated physician failed to arrive at a definite assessment of the seafarer’s fitness or disability within the 120/240-day periods provided under the law;
    • the company-designated physician’s last report on the seafarer’s condition which “suggested” a disability grading of “Grade 8 — 2/3 loss of motion or lifting power of the trunk” was not a final or definite assessment of his fitness or disability because the seafarer was still required to return after three weeks for further examination;
    • regardless of the fact that the seafarer was required to return for further examination, the statutory 120/240-day periods would have elapsed without the seafarer being issued either a final and definitive disability assessment or a fit-to-work certification;
    • the seafarer’s condition would not have improved even with the prescribed surgery, which he refused to undergo, because as admitted by the company-designated physician it did not guarantee improvement of seafarer’s condition;
    • the seafarer was unable to resume his regular sea duties, his inability to find work had continued, and he was not re-employed; and
    • with the lapse of the statutory 120/240-day periods without the seafarer’s having gone back to work, he should be deemed totally and permanently disabled.

    Ruling:

    The Supreme Court reversed the ruling of the Court of Appeals and declared that the seafarer was entitled to disability benefits in the amount of US$16,795.00 only, equivalent to Grade 8 disability under the Philippine Overseas Employment Administration Standard Employment Contract.

    Section 20(D) of the Philippine Overseas Employment Administration Standard Employment Contract states that “[n]o compensation and benefits shall be payable in respect of any injury, incapacity, disability or death of the seafarer resulting from his willful or criminal act or intentional breach of his duties, provided however, that the employer can prove that such injury, incapacity, disability or death is directly attributable to the seafarer.”

    According to the Supreme Court, the seafarer was duty-bound to comply with his medical treatment in order to give the company-designated physician the opportunity to determine his fitness to work or to assess the degree of his disability. His inability to continue his treatment without any valid explanation showed that he neglected such duty to continue his medical treatment.

    In the present case, the seafarer filed his complaint on 14 May 2010 — or just 110 days from his medical repatriation on 23 January 2010 — before the 120/240-day periods allowed under the Labor Code of the Philippines could elapse, and before the company-designated physician could render a definite assessment of his medical condition. According to the Court, the filing of the labor case was premature. By failing to continue with the treatment prescribed by the company-designated physician and instead filing the labor case before the expiration of the 120-day period, the seafarer violated the law and his contract with his employer and was thus guilty of abandoning his treatment.

    With regard to the claim of the seafarer that the surgery was not a guarantee that his condition will return to normal, the Court stated that the same does not entitle him to the indemnity he has sought. The fact remained that he violated his contract and the law. His infraction erased any benefit he may have derived from such argument. Although acknowledging that this was a medical opinion shared by the company-designated physician, the Court stated that it had the discretion to rely on such opinion or discard it altogether.

    The Court added that without the seafarer undergoing the prescribed 120/240-day periods for treatment, his employer was deprived of the opportunity to assist him in finding a cure for his condition and thus minimize any legal and pecuniary liability it may be held answerable for. At the same time, there was no way of assessing the seafarer’s medical condition with finality. Without such assessment, no corresponding indemnity was forthcoming. The seafarer must subject himself to treatment as prescribed by the law and the Philippine Overseas Employment Administration Standard Employment Contract, for such requirement is patently for his benefit in all respects.

    Further reading:

    • Maunlad Trans, Inc. v. Rodelas, Jr., G.R. No. 225705, April 1, 2019.

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