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.
