Paulino Ungos III

Lawyer | Law Professor | Author

Tag: tenancy

  • But Are You a De Jure Tenant?

    Lutero Romero (Lutero) owned property by virtue of an approved homestead application in 1967. Although ownership of the said property was subject of a legal dispute involving Lutero and his siblings, the Supreme Court eventually declared Lutero the true and lawful owner of the property in De Romero v. Court of Appeals1G.R. No. 109307, November 25, 1999, 377 PHIL 189-202.

    After the Court’s Decision in De Romero v. Court of Appeals became final and executory, the Heirs of Lutero filed a Motion for the Issuance of a Writ of Execution before the Regional Trial Court (RTC) on 10 March 2003. On 16 June 2003, the RTC issued a Writ of Execution. However, the implementation of the writ was held in abeyance because Crispina Sombrino (Sombrino) filed a Motion for Intervention, alleging that she was a tenant of the subject property. After due hearing and deliberation, the RTC ordered the implementation of the writ. Sombrino was consequently ousted from the subject property.

    Sombrino then filed a Complaint against the Heirs of Lutero for Illegal Ejectment and Recovery of Possession before the Office of the Provincial Agrarian Reform Adjudicator. At the heart of Sombrino’s claim of tenancy was her allegation that the parents of Lutero installed her as tenant in 1952.

    The consistent ruling of the Provincial Agrarian Reform Adjudicator, the Department of Agrarian Reform Adjudication Board, and the Court of Appeals on the said complaint was that an agricultural leasehold tenancy relation existed between Sombrino and the Heirs of Lutero because the supposed original landowners of the subject property, i.e., parents of Lutero, allegedly entered into a tenancy agreement with Sombrino in 1952. Said ruling viewed the following pieces of evidence as proof of the existence of said tenancy relation:

    • Affidavits of certain persons stating that Sombrino occupied the subject property; and
    • Acknowledgment Receipts pertaining to payment of irrigation and fees to a sister of Lutero.

    According to said tribunals, Lutero and, subsequently, his heirs should also be bound by this leasehold relation and respect Sombrino’s tenancy rights.

    Did an agricultural leasehold tenancy relationship exist between Sombrino and the Heirs of Lutero?

    The Supreme Court ruled that no agricultural leasehold tenancy relationship existed between them.

    According to the Court, an agricultural leasehold tenancy exists “when a person who, either personally or with the aid of labor available (from) members of his immediate farm household, undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single person together with members of his immediate farm household, belonging to or legally possessed by, another in consideration of a fixed amount in money or in produce or in both.”2Section 4, Agricultural Tenancy Act of the Philippines, Republic Act No. 1199, as amended by Republic Act No. 2263

    The Court also reiterated established jurisprudence:

    The existence of a tenancy relation is not presumed, as the following indispensable elements must be proven in order for a tenancy agreement to arise:

    • the parties are the landowner and the tenant or agricultural lessee;
    • the subject matter of the relationship is an agricultural land;
    • there is consent between the parties to the relationship;
    • the purpose of the relationship is to bring about agricultural production;
    • there is personal cultivation on the part of the tenant or agricultural lessee; and
    • the harvest is shared between the landowner and the tenant or agricultural lessee.

    The absence of any of the requisites does not make an occupant, cultivator, or a planter a de jure tenant which entitles him to security of tenure under existing tenancy laws.3Heirs of Cadeliña v. Cadiz, G.R. No. 194417, November 23, 2016, 800 PHIL 668-679

    However, if all the aforesaid requisites are present and an agricultural leasehold relation is established, the same shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized by the Court for causes herein provided.4Section 7, Code of Agrarian Reforms In case of death or permanent incapacity of the agricultural lessor, the leasehold shall bind the legal heirs.

    Since a tenancy relationship cannot be presumed, an assertion that one is a tenant does not automatically give rise to security of tenure. Nor does the sheer fact of working on another’s landholding raise a presumption of the existence of agricultural tenancy. One who claims to be a tenant has the onus to prove the affirmative allegation of tenancy.5Soliman v. Pampanga Sugar Development Co., G.R. No. 169589, June 16, 2009, 607 PHIL 209-227 Hence, substantial evidence is needed to establish that the landowner and tenant came to an agreement in entering into a tenancy relationship.

    In the present case, the Court found that Sombrino failed to provide sufficient evidence that there was, in the first place, an agricultural leasehold tenancy agreement entered into by herself and the parents of Lutero.

    According to the Court, the joint affidavit of Sarillo Bacalso and Neil Ocopio revealed that Sombrino allegedly hired them in several occasions as planters, mud boat operators and thresher operators and that Sombrino occupied and cultivated the subject property at some point in time. The Court stressed that such document in no way confirmed that Sombrino’s presence on the land was based on a tenancy relationship as “[m]ere occupation or cultivation of an agricultural land does not automatically convert the tiller into an agricultural tenant recognized under agrarian laws.”6Heirs of Quilo v. Development Bank of the Philippines – Dagupan Branch, G.R. No. 184369, October 23, 2013, 720 PHIL 414-426 The Court thus said that self-serving statements regarding supposed tenancy relations are not enough to establish the existence of a tenancy agreement.7Soliman v. Pampanga Sugar Development Co., G.R. No. 169589, June 16, 2009, 607 PHIL 209-227

    Furthermore, the Court found that the Affidavit of the Barangay Agrarian Reform Committee (BARC) Chairman deserved scant consideration since the said chairman was not the proper authority to make such determination. The Court emphasized that certifications issued by administrative agencies and/or officials concerning the presence or the absence of a tenancy relationship are merely preliminary or provisional and are not binding on the courts,8Soliman v. Pampanga Sugar Development Co., G.R. No. 169589, June 16, 2009, 607 PHIL 209-227 and have little evidentiary value without any corroborating evidence.9Reyes v. Heirs of Floro, G.R. No. 200713, December 11, 2013, 723 PHIL 755-775 The Court said that there should be independent evidence establishing the consent of the landowner to the relationship.10Caluzor v. Llanillo, G.R. No. 155580, July 1, 2015, 762 PHIL 353-370

    With respect to acknowledgment receipts presented by Sombrino showing the payment of irrigation fees and rentals to Lutero’s sibling, the Court declared such pieces of documentary evidence insufficient for the said receipts merely established that, at most, Sombrino entered into an arrangement with Lutero’s sister and not with their parents.

    The Court continued that assuming that it even existed, the supposed tenancy agreement was invalid as it was not entered into with the true and lawful landowner of the subject property.

    According to the Court, tenancy relationship can only be created with the consent of the true and lawful landowner who is the owner, lessee, usufructuary or legal possessor of the land. It cannot be created by the act of a supposed landowner, who has no right to the land subject of the tenancy, much less by one who has been dispossessed of the same by final judgment.11Cunanan v. Aguilar, G.R. No. L-31963, August 31, 1978, 174 PHIL 299-314

    In the present case, the Court doubted the existence of the alleged agricultural tenancy agreement because of the undisputed fact that Lutero’s father died sometime in 1948, and it was, thus, impossible for Lutero’s father to have instituted Sombrino as tenant of the subject property.

    With the absence of the first essential requisite of an agricultural tenancy relationship, i.e., that the parties to the agreement are the true and lawful landholders and tenants, the Court ruled that Sombrino was not a de jure tenant entitled to security of tenure under existing tenancy laws.

    In sum, the Court ruled that security of tenure may be invoked only by de jure tenants. Security of tenure may not be invoked by those who are not true and lawful tenants but became so only through the acts of a supposed landholder who had no right to the landholdings. Tenancy relation can only be created with the consent of the landholder who is either the owner, lessee, usufructuary or legal possessor of the land.

    Further reading:

    • Romero v. Sombrino, G.R. No. 241353, January 22, 2020.

    Check Out My Latest YouTube Video:

    [embedyt] https://www.youtube.com/embed?listType=playlist&list=UUA0qsY28UIiqNcY45Ez2rjg&layout=gallery[/embedyt]

  • 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.

    Check Out My Latest YouTube Video

    [embedyt] https://www.youtube.com/embed?listType=playlist&list=UUA0qsY28UIiqNcY45Ez2rjg&layout=gallery[/embedyt]

  • 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.

    Check Out My Latest YouTube Video:

    [embedyt] https://www.youtube.com/embed?listType=playlist&list=UUA0qsY28UIiqNcY45Ez2rjg&layout=gallery[/embedyt]