"For Bancag No. 18-P:chanrob1es virtual 1aw library
151 manos Morada
309" Liso (Converted from:chanrob1es virtual 1aw library
12.5 manos Morada
154.5 kilos Liso)."
She prayed that the lower court order defendant to pay her, among others, his arrears in lease rentals in the amount of 768 Manos Burley, 151 Manos Morada and 309 Manos Liso (tobacco), plus interest at the legal rate until the full amounts are finally paid by defendant.
"On March 14, 1972, same plaintiff filed a complaint with motion for an interlocutory order of provisional rental against same defendant, involving the same landholdings, docketed in the same court as CAR Case No. 1666-TP ’72, alleging inter alia, that the landholdings leased by defendant are planted to tobacco, palay and/or corn alternately every calendar year; that sometime during the last palay harvest of 1971-1972, plaintiff desired that the rentals of the landholdings be fixed in accordance with Sec. 34, Republic Act No. 3844, as amended, but defendant refused without just and valid cause; that aside from his unwarranted refusal aforementioned, defendant deliberately refused to share plaintiff in the palay produce in the harvest season of 1971; and that plaintiff desired to avail maximum 25% of the average normal harvest less the deductible items applicable, as lease rentals on the landholdings in the manner fixed by the law.
"On May 31, 1971, defendant filed his answer to the first complaint, alleging, by way of special and affirmative defenses, that as regards Bancag No. 18-P he and the landowner have an agreed rental P22.50, instead of 25% of the average normal net harvest which he had been paying religiously together with the rental for Bancag No. 19-P; and that the rentals in arrears due to the landholdings being the obligations of the former lessees, he should not be made therefor.
"On March 28, 1972, defendant filed his answer to the second complaint, likewise denying all the material allegations thereof, and alleging that since he became the agricultural lessee of the landholdings in 1966, he had been religiously paying plaintiff the rentals; and that to require him to share the produce of the landholdings on a 75-25 basis would force him to go back to share tenancy which is against public policy and declared so by law.
"On August 13, 1971, a pre-trial hearing was conducted on CAR Case No. 1312-TP ’71, but the same was terminated, the parties having failed to agree on any issue they raised.
"With respect to CAR Case No. 1666-TP ’72, the following partial stipulation of facts was submitted by the parties:chanrob1es virtual 1aw library
‘1. That defendant is a lessee of plaintiff over specific landholdings as alleged in paragraph 2, of the complaint:chanrob1es virtual 1aw library
‘2. "That the landholdings are devoted to the planting of palay and tobacco alternately in a period of one year, or 12 months specifically to wit:chanrob1es virtual 1aw library
a. Palay is planted in May-June and harvested September-October;
b. Tobacco is planted in November-December and harvested in February-March of the succeeding year:chanrob1es virtual 1aw library
‘3. That sometime in March of 1971 and before the palay planting season of that year 1971, plaintiff through her son and farm administrator, Gen. Luis A. Villa-Real, demanded from the defendant that thenceforth he shall pay a fix rental in kind equivalent to 25% of the average normal net harvest of each crop (palay & tobacco) of the past three agricultural years;
‘4. That defendant rejected the demand of plaintiff aforementioned but defendant offered to pay the same annual rentals as alleged in paragraph 4 of the answer, which he has been paying prior to 1971-72;
‘5. That plaintiff through her son and administrator afore-named refused to accept defendant’s offer to pay the same rate of annual rental aforementioned for the reason that plaintiff desires to be paid net harvests of the past three agricultural years;
‘6. That defendant reserves the right to prove that he has made certain payment of tobacco in 1972;
‘7. That the rate of lease rentals which defendant used to pay is not equivalent to 25% of the average normal net harvests (from the landholdings) of the past three agricultural years immediately prior to 1971-72; (Roll, pp. 28-32).
C. In G.R. No. L-46211-12," (I)n her almost identical complaints, the plaintiff, substituted by Luis A. Villareal, alleges that the defendants are their lessees over certain parcels of land devoted to the planting of tobacco, palay and corn alternately every calendar year; that because the lease rentals thereof are not in accordance with Section 34 of Republic Act No. 3844, amended, the plaintiff desires to have the rentals fixed in accordance therewith; that when the plaintiff notified the latter deliberately refused to accede thereto as shown by defendants’ acts of appropriating the whole palay harvest for the agricultural year 1971; she, therefore, prays that pending hearing of the two cases, an interlocutory order be issued fixing a provisional rental for the landholdings in question at 25% of the net harvests of each crop and after hearing a final rental thereof be fixed in accordance with Section 34 of Republic Act No. 3844, as amended, and that she be reimbursed litigation expenses and attorney’s fees.
"Answering, the defendants alleged that the complaints states no cause of action because they state that the defendants are agricultural lessees, but ask the parties to divide the crops at 75-25 in favor of the defendants which is share tenancy long abolished by Law; that the defendants have long been agricultural lessees over the landholdings described in the complaints even before the effectivity of Republic Act No. 3844, and that the rentals they have been paying were mutually and voluntarily agreed upon by the parties; that the lease rentals being legal and valid, the defendants shall continue to pay the same until modified by the parties or by the court and to facilitate the collection thereof, the defendants are willing to pay in cash. Defendants pray (1) for the dismissal of the complaints with costs against the plaintiff; (2) that the defendants be allowed to pay their respective rentals at their option; and (3) for payment of moral damages, litigation expenses and attorney’s fees.
"On the motion for the issuance of an interlocutory order, the agrarian court, on September 5, 1972, ordered a provisional rental of 25% of each harvest, with the defendants to continue paying the plaintiff the usual amount of annual rental as agreed upon by the parties and the difference to complete the 25% ordered provisional rental shall be deposited with the court in cash, provided however, that in the event the plaintiff posted a bond for the difference, the 25% rental referred to shall be paid to the plaintiff.
"On July 12, 1972, the parties through their respective counsel, submitted to the agrarian court the following partial stipulation of facts:jgc:chanrobles.com.ph
"PARTIAL STIPULATION OF FACTS
‘COME NOW the plaintiff and defendants through their respective counsel and respectfully submit the following partial stipulation of facts, for the purpose of resolving plaintiff’s motion for the issuance of an interlocutory order fixing the provisional rentals of the defendants commencing from the agricultural year 1971-72 pending final disposition of this case on the merits:chanrob1es virtual 1aw library
‘1. That defendants are lessees of the plaintiff over specific landholdings as alleged in paragraph 2 of the complaint;
‘2. That the landholdings are devoted to the planting of palay and tobacco alternately in a period of one year or 12 months specifically to wit:chanrob1es virtual 1aw library
‘a. Palay is planted in May-June and harvested in September-October;
‘b. Tobacco is planted in November-December and harvested in February-March of the succeeding year;
‘3. That sometime in March of 1971 and before the palay planting season of that year 1971, plaintiff through her son and farm administrator, Gen. Luis A. Villa-Real demanded from the defendants that henceforth they shall pay a fixed rental in kind equivalent to 25% of the average normal net harvest of each crop (palay and tobacco) of the past three agricultural years;
‘4. That defendants rejected the demand of plaintiff aforementioned but defendants offered to pay the same in rentals, as alleged in paragraph 3 of the amended answer, they have been paying prior to 171-72;
‘5. That plaintiff through her son and administrator aforenamed refused to accept defendants’ offer to pay the same rate of annual rentals aforementioned for the reason that plaintiff desires to be paid the maximum ceiling of 25% of the average normal harvests of the past three agricultural years, without prejudice on the part of the defendants to rove that they have made certain payments in tobacco in 1972;
‘6. That the rate of lease rentals which defendants used to pay is not equivalent to 25% of the average normal net harvests (from the landholdings) of the part three agricultural years immediately prior to 1971-72;
‘7. That this partial stipulation of facts is submitted without prejudice to the evidence, testimonial as well as documentary, already adduced and that the parties herein hereby reserved their right to submit in writing within five days from date thereof additional documentary evidence subject to the objection of each other, and the rulings of the Honorable Court. (Rollo, pp. 52-56).
B. In G.R. No. L-45160 (Rollo, 28-29)
3. Pablo Ulalan 19-P 5,000 sq.m. 15 kilos P25.00
18-P 5,000 sq.m
4. Domingo S. Agunias 8-0 4,700 sq.m. 22 manos P66.15
14-N 5,000 sq.m. batec
13-N 5,000 sq.m. 2 sticks
C.In G.R. Nos. L-46211-12 (Rollo, pp. 32-33)
Names Lots Nos. Area Rentals in In Cash
5. Donato Camacho 17-N 5,000 sq.m. 30 kilos P122.50
10-F 5,000 sq.m. 30 manos
9-1 5,000 sq.m.
10-M 5,000 sq.m.
16-G 5,000 sq.m.
6. Martina Daclan 13-1 10,000 sq.m. 60 todok P47.50
or 20 manos
7. Pedro Defunturum Jr. 17-0 10,000 sq.m. 60 todok P50.00
18-D-7 10,000 sq.m.
8. Ricardo Castillo 20-0 5,000 sq.m. 10 manos P42.50
9. Amado Tamayo 10-P 5,000 sq.m. 12 manos P25.00
10. Dionisia Herreria 14-N 10,000 sq.m. 30 manos P75.00
17-G 5,000 sq.m. batek
11. Bonifacio Panelo 19-J 1,000 sq.m. 36.6 manos P97.00
20-J 10,000 sq.m. batek
13-M 5,000 sq.m
9-H 5,000 sq.m.
8-H 600 sq.m.
12. Francisco Suguitan 10-G 10,000 sq.m. 30 manos P75.00
10-N 5,000 sq.m. batek
13. Juventino Jaravata 14-J 5,000 sq.m. 20 manos P50.00
14. Anastacio Melana 10-M 5,000 sq.m. 10 manos P25.00
15. Vicente Marquez 16-C 7,000 sq.m. 143 manos P375.00
16-D 10,000 sq.m. batek
17-D 5,000 sq.m.
16-E 10,000 sq.m.
15-F 4,000 sq.m.
16-F 10,000 sq.m.
21-H 2,800 sq.m.
9-L 10,000 sq.m.
24-L 5,000 sq.m.
24-M 3,000 sq.m.
27-M 5,950 sq.m.
The foregoing rentals in tobacco and/or cash for palay harvest were arrived at or mutually agreed upon by the land owner and/or her predecessors and the respective tenants and/or their predecessors, before the enactment of the Tenancy Act fixing rentals on agri-tenanted holdings. The holdings are devoted to the planting of palay, sometimes corn, and tobacco alternately within the calendar year. Palay is planted in May-June and harvested in September-October; while tobacco is planted in November-December and harvested in February-March of the following year. The tenancy agreements were renewable each calendar year (Rollo, p. 35, G.R. L-44875-76).
The hacienda, devoted mainly to production of native tobacco, is for the most part not irrigated but is dependent mainly on rainfull for water (Rollo, G.R. Nos. L-44875-76, p. 41). However, the landholdings of petitioner tenants in G.R. Nos. L-46211-12, CAMACHO, DACLAN, HERRERIA, PANELO, MELANA and MARQUEZ were benefited by the construction of the canals by the National Irrigation Administration (NIA) sometime in January 1975 (Rollo, p. 34).
Sometime in March, 1971, before the palay planting season, plaintiff Carmen G. de Villareal, through her son and farm administrator, Gen. Luis Villareal demanded from the defendants-tenants in a series of conferences that thenceforth, they shall pay a fixed rental in kind equivalent to the normal harvest of each crop of palay or tobacco for the three agri-years in accordance with Sec. 34. The defendants-tenants rejected the plaintiff’s demand and instead offered to pay the same annual rentals or that which they have been paying prior to 1971-72. The landholder in turn refused to accept the tenants’ counter. The lease rentals which the tenants were paying are not equivalent to or less than 25% of the average normal net harvest from the landholdings of the past three agri-years immediately prior to 1971-72 and therefore were found by the CAR to be unfair/unjust to the landholder. (See Decision in CA G.R. No. SP-04766 per Reyes, L.B., presiding, Rollo G.R. No. L-45760 at p. 33; Partial Stipulation of Facts, G.R. No. L-46211-12).
In view of the failure to agree as to the rental rates, the landholder filed the Petitions with the Court of Agrarian Relations (CAR), Third Regional District, Branch II at Tayug Pangasinan. CAR Cases Nos. 1312, 1409 and 1457 were filed in 1971 CAR Cases No. 1579-TP ’72 and 1581-TP ’72 were filed the following year.chanrobles virtual lawlibrary
The CAR, per Judge Arturo V. Malazo, denied the landholders’ petition for ejectment but consistent upheld her right to have the rental rates fixed in accordance with the provisions of RA 3844, as amended by RA 6389, that is, a rental rate equivalent to the average of the normal net harvest of the past three agri-years. On appeal, as adverted to earlier, the Court of Appeals thru the 6th Division affirmed the CAR’s judgment fixing the rental rates in G.R. Nos. L-44875-76 and G.R. Nos. L-46211-12 but the 7th Division reversed the lower court’s decision in G.R. No. L-45160 in so far as it authorized the fixing of the rentals pursuant to Sec. 34 of RA 3844. Hence these petitions by the petitioners-tenants in G.R. Nos. L-44875-76 and L-46211-12 and the petitioner-landholder, in turn, in G.R. No. L-45160.
IV. The Issues
A. In G.R. Nos. L-44875-76, petitioners-tenants seek review and reversal of the Court of Appeals decision alleging —
1. That the cases should have been dismissed for lack of jurisdiction, it appearing in the decision of the CAR that there is no sufficient ground for ejecting them and that the ejectment of tenants is not allowed under PDs 27, 316 and 583; and,
2. That the Court of Appeals should not have affirmed the decision of the CAR which ordered the parties to liquidate the crops on the basis of 75-25 of the net harvests in favor of the tenants for three agri-years effective the agri-year 1975-76 and thereafter ordering the parties to come to court for the fixing of the permanent rentals on the basis of the average three normal harvests.
B. In G.R. No. L-45916, the petitioner landholder, in turn, seeks review and reversal of the Court of Appeals decision on the lone ground that on the basis of the facts considered and undisputed, the Court of Appeals should have sustain CAR’s holding that the rentals be determined and fixed pursuant to Sec. 34 of the Agrarian Reform Code, R.A. 3844 in an amount not to exceed 25% of the average normal net harvest of the past three agri-years.
C. In G.R. Nos. L-46211-12, petitioner-tenants allege as grounds for their petitions that the Court of Appeals seriously erred —
1. In affirming the decision of the CAR with regards to six petitioners only and ordering them to liquidate the palay and tobacco crops on a sharing basis of 75-25 effective the agri-year 1976-77 and that these rentals be computed after three normal harvests, in spite of the fact that the said six petitioners have fixed leased rentals and without respondent landholder introducing capital improvements in the land in question.
2. That the respondent Court of Appeals seriously erred in not resolving the appeal interposed by the six other petitioners in CA-G.R. No. 05825-R or CAR Case No. 1581-TP 72 of the trial court; and,
3. That the respondent Court of Appeals seriously erred in not ordering the private respondent landholder to reimburse petitioner-tenants (the amount) they have paid in excess their lease rentals effective the agri-year 1972-73.
From the foregoing statement of the errors alleged, the grounds relied upon by the petitioners-tenants and petitioner-landholder and the arguments they adduced in support thereof, the following issues emerge for Our resolution —
1. Did the Court of Appeals err in not ordering the CAR to (dismiss the petition in G.R. Nos. L-44875-76 on the ground of lack of jurisdiction over the petition upon its finding that there was no ground to eject the petitioner-tenants and on the further ground that their ejectment is proscribed by PDs 27, 316 and 583?
2. May the CAR determine and fix the rentals to be paid by the tenants to the landholder in accordance with Sec. 34, RA 3844, as amended in an amount not to exceed 25% of the net average normal harvest of three preceeding agri-years? This is the core and common issue in these petitions. Its resolution will settle the conflicting holdings of the two Divisions of the Court of Appeals and resolve this issue finally.
3. Did the Court of Appeals err in affirming the decision of the CAR with regard to six petitioners only in CA G.R. No. 05825-R and ordering them to liquidate the palay and tobacco crops in an amount not to exceed 25% of the average net harvest effective the agri-year 1976-77, in spite of the fact that the tenants have fixed lease rentals, and without the landholder introducing capital improvements on the landholdings? And,
4. Did the respondent Court of Appeals err in not ordering the landholder to reimburse petitioner tenants in G.R. Nos. L-46211-12 the amount they have paid as lease rentals effective the agri-year 1972-73?
We shall, for convenience and in the interest of clarity treat/resolve the foregoing in the following order — Nos. 1, 3 and 4 and finally, the core or common issue raised in all the petitions, that is, No. 2 involving the interpretation and application of Section 34, RA 3844 as amended by RA 6389 on the proper rental rate.
FIRST ISSUE. This is resolved in the negative Petitioners-tenants herein contend that because the CAR found." . . that there is no sufficient ground for ejectment" the two cases — CAR Nos. 1409 and 1457 both Tayug, Pangasinan (TP) ’71 — should have been dismissed and that it was an error on the part of the Court of Appeals, not to have ordered the CAR to dismiss the same.
It appears, however, that while the original actions were for ejectment on the ground of non-payment of rentals, the CAR dismissed the petitions for ejectment, ordered the payment of a provisional rental by petitioners-tenants based on 25% of the harvest, and thereafter, directed the parties to come before it for the fixing of the final rentals based on 25% of the average normal harvest of three (3) agri-years. These actuations of the CAR — providing for a provisional and fixing the final rental on the basis of the average normal harvests for 3 agri-years is not a reversible error. The cause of action for the fixing of the proper rental was raised in the course of the hearings and the CAR was — at the time of the hearings and indeed even up to the present, under the presidential decree "Reorganizing the CAR, streamlining their procedures and for other purposes," 1 not." . . bound by the technical rules of evidence and procedure." 2
Further, on petitioner’s contention that the cases should have been dismissed for lack of jurisdiction — on the ground of the absence of a certification of triability by the Ministry of Agrarian Reform — the records show that the cases were initiated in the CAR in 1971. Pres. Decrees Nos. 316 and 583 invoked by the petitioners in assailing the CAR’s exercise of jurisdiction over the cases and deciding the same were promulgated only on October 21, 1972 and October 22, 1973 respectively. It is a fundamental postulate that once a court has taken jurisdiction over a case, its authority can not be affected adversely by a subsequent statute prescribing a prescribing a precondition before the Court may take cognizance of the case. 3
THIRD ISSUE. This issue is also resolved in the negative. The claim that the Court of Appeals affirmed the decision of the CAR with regard to six (6) petitioners only — namely (1) D. Agunias, (2) D. Camacho, (3) M. Daclan, (4) P. Difuntorum Jr., (5) R. Castillo, and (6) A. Tamayo; Rec. G.R. No. L-46211-12, p. 52 — is incorrect and irresponsible.
While the names of only six (6) of the original twelve (12) defendants-tenants in CAR Cases Nos. 1579 TP ’71 and 1581 TP ’71 (six defendants in each case) appear in the caption of CA G.R. Nos. SP-05825-26, this omission of the names of the six defendants-appellants in CAR Case No. 1581-TP ’72 in the caption of CA G.R. Nos. SP-05825-26 was simply a case of clerical oversight or typographical error only. The records who indubitably that both CAR cases were elevated to the Court of Appeals as evidenced by the notice of appeal of the petitioners. The two CAR cases were assigned two (2) docket numbers in the Court of Appeals in observance of the rule on the numbering of multiple cases and the decision of the Court of Appeals dated March 31, 1977 shows that the said Court took cognizance of, considered and decided the issues in the two cases appealed to it from the CAR. This may be gleaned from the following:chanrob1es virtual 1aw library
(1) The first paragraph of the decision of the Court of Appeals reads thus:jgc:chanrobles.com.ph
"Being interrelated, the above-numbered cases were jointly tried and decided by the Court of Agrarian Relations, Branch II-A, Urdaneta, Pangasinan."cralaw virtua1aw library
(2) In the same decision the paragraph succeeding the statement of the issue mentions the names of four of the six defendants in CAR Case No. 1581-TP ’72 namely: (1) B. Panelo, (2) F. Suguitan, (3) A. Melana and (4) Pedro (should be Joventino) Jarabata, unmistakably showing that the Court of Appeals was fully aware of the claim of these six (6) defendants-appellants, whose names were, however, omitted in the caption.
We, therefore, hold that the defendants-appellants (1) B. Herreria, (2) B. Panelo, (3) F. Suguitan, (4) J. Jarabata, (5) A. Melana, and (6) V. Marquez are covered by the decision in CA-G.R. Nos. SP-05825-26 and shall also be deemed included in this decision as private respondents.
FOURTH ISSUE. This is without merit. On September 5, 1972, the CAR (in CAR Cases 1579 and 1581 TP ’72) fixed a provisional rental for the parties at the ratio of 75-25 in favor of the tenants (petitioners herein) and accordingly directed them to pay the landholder (private respondents herein) the annual rentals which they have been paying previous to the agri-year 1971-72. The difference between the old (the rental were paying) and the provisional (the one fixed by the CAR) rental, i.e., 25% of the harvest, was ordered to be deposited with the Court in cash,." . . the same to be disposed of after the above cases should have been terminated." 4 Thus, pursuant to the said Order of September 5, 1972, the net harvests, since the agri-year 1971-72, were to be partitioned on 75-25 basis — (1) the 75% was given outright to the petitioners-tenants; (2) the amount which petitioners have been previously paying was delivered to the private respondent-landholder; and (3) the difference between the former rental and the 25% was deposited with the Court in cash.
It appears, however, that the Order of the Court was followed only in the agri-year 1971-72 when the petitioners effected the cash deposits which they later withdrew. 5 In the succeeding agri-years — 1972-73; 73-74; 74-75; 75-76 until the CAR rendered judgment on May 25, 1976, when the rental of 25% of the net harvests was finally directed - the parties liquidated their harvests on the 75-25 basis in favor of the petitioners. The claim, therefore, for reimbursement of the difference between the former rental they used to pay and the 25% rental ordered by the CAR, is without merit. For, the resolution, below, of the core issue which affirms the decisions of the CAR and the CA — except in CA G.R. No. SP-04766 — renders this alleged error academic. Since the provisional rental of 25% has been found to be correct and proper, petitioner-tenants are not entitled to any reimbursement.
SECOND ISSUE. And now to resolve issue No. 2, the core question in these petitions which, in its simplest terms, may be stated as follow: Is the landholder-petitioner in G.R. No. L-45160 and private respondent in G.R. Nos. L-44875-76 and L-46211-12 — entitled to an upward adjustment of rentals for the holdings of petitioners-tenants in these cases, to conform with the ceiling provided in Sec. 34, RA 3844 (1963) as amended by RA 6389 (1971)?
Both parties invoke and rely upon Sec. 34 of RA 3844, as amended. The landowner-lessor claims that since the rentals being paid by the tenants-lessees were fixed before the effectivity of RA 3844, he is entitled to demand the maximum rental allowable under Section 34, which is 25% of the average normal harvest for the preceding three (3) agri-years. The tenants-lessees, on the other hand, argue that under the said section, rentals may not be increased, unless capital improvement has been introduced on their landholdings by the landholder resulting in increased production.
The case for the landholder was put forward in the CAR judgments which the Court of Appeals quoted with approval and is premised on considerations of justice and equity. It argues that the present rentals based on pre-war rates prevailing long before the effectivity of RA 3844, as amended, have been fixed for each calendar, not agricultural year, and is grossly inadequate; that it is the policy of the law to encourage, if not to compel, the parties to strictly comply with its provisions; and that if the tenants can ask for a re-fixing of rentals to make it conform to law, the same right should be extended to the landholder in fairness to both parties. 6
The brief for the tenants-lessees in turn rely upon the thesis that Sec. 34 is a social justice legislation aimed." . . to redeem the tenants from misery, want and oftentimes oppression arising from the onerous terms of his tenancy." That a rental agreement voluntarily entered into is presumed valid and the party who questions its validity has the burden to show it is not conformable to law or is not reasonable and just. That the rental now being paid by the tenants is beneficial or advantageous to them because the same is less than 25% of the average harvest. 7
For an insight into the meaning and real intent of the rental provision of the Agricultural Land Reform Code of 1963 (RA 3844) a review of the historical evolution of section 34, the rental rate on leasehold tenancy, is necessary.
In the 1920’s and up to 1946 — when the rentals which the tenants-lessees herein propose to continue paying were fixed — no lease tenancy regulatory statute imposing a limit on rentals for the lease of rural agricultural lands was as yet in existence. The Spanish Civil Code, the law then relative to "shares" on leases of rural properties reads us follow:jgc:chanrobles.com.ph
"ART. 1579. Leases on shares of arable land breeding cattle, and of industrial or manufacturing establishments shall be governed by the provisions relating to the contract of partnership and by the agreements of the contracting parties, or, in default thereof, by the customs of the place."cralaw virtua1aw library
It was not until September 30, 1946 when RA 34, amending Public Act No. 4054 8 was approved, that tenancy contracts stipulating a rental "higher than twenty-five percent of the estimated normal harvest, in case of a contract providing for a fixed rental of the land" were declared to be against public policy. 9 This statute, however, applied only to agricultural lands devoted to palay (or rice) production. 10
On August 30, 1954, RA 1199, otherwise known as "The Agricultural Tenancy Act of the Philippines" was approved. On the matter of consideration in agricultural lease agreements this Act provided that it shall be contrary to law morals and public policy." . .if the tenant-lessee is to pay to the landholder-lessor, as a consideration for the use of the land, an amount in excess of that hereinafter provided for the kind and class of land involved." 11 The maximum imposable considerations were:jgc:chanrobles.com.ph
"Section 46. Consideration for the Use of Land:jgc:chanrobles.com.ph
"(a) The consideration for the use of ricelands, shall not be more than thirty per centum of the gross produce for first class lands and not more than twenty-five per centum for second class lands. Classification of ricelands shall be determined by productivity: first class lands being those which yield more than forty cavans per hectare and second class lands being those which yield forty cavans or less, the same to be computed upon the normal average harvest of the three preceding years.
"(b) The consideration for agricultural land where exist fruit trees and other useful trees and plants, from which the whole or any portion of the produce of the said land is taken, shall not be more than what have been specified in the preceding section: Provided, however, That additional considerations for the enjoyment of said trees and useful plants, if the principal product is rice or other crops, shall be decided and specified by negotiation between the landholder-lessor and the tenant-lessee:, Provided, further, that where the tenant-lessee, during the period of lease and — or in considerations thereof, plants and — or takes care of said trees and plants, with the consent of the landholder-lessor, the tenant-lessee shall be compensated by the latter in the manner agreed between them.
"(c) The consideration for the use of sugar lands, fishponds, saltbeds and of land devoted to the raising of livestock shall be governed by stipulation between the parties."cralaw virtua1aw library
Under the foregoing provision, there was no prohibition against a landholder-lessor demanding an increase in consideration if the same was less than that provided by the law.chanroblesvirtualawlibrary
As amended by RA 2263, 12 the same provision of RA 1199 reads as follows:jgc:chanrobles.com.ph
"Section 46. Consideration for the Use of Land.
"(a) The fixed consideration for the use of ricelands, shall not be more than the equivalent of twenty-five per centum in case of first class land and twenty per centum in case of second class land of the average gross produce, after deducting the same amount of palay used as seed and the cost of harvesting and threshing of the past three normal harvests: Provided, that if the landholder introduced improvements on the farm which will increase its productivity he may demand for an increase in production resulting from such improvements. In case of disagreement, the court shall determine reasonable increase in rental. Classification of ricelands shall determined by productivity: first class lands being those which yield more than forty cavans or less, the same to be computed the normal average harvest of the three preceding years. (As amended)
"(b) The fixed consideration for agricultural land when fruit trees and other useful trees, crops and plants, from which the whole or any portion of the produce of the said land is taken, shall be more than twenty-five percent of the average gross produce past three normal harvests: Provided, however, That addition considerations for the enjoyment of said trees and useful plants, if the principal product is rice or other crops, shall be decided and by negotiation between the landholder-lessor and the tenant during the period of the lease and/or in consideration thereof, plants and/or takes care of said trees and plants, with the consent of the landholder-lessor, the tenant-lessee shall be compensated by the latter in the manner agreed between them. (As amended)
"(c) The consideration for the use of sugarlands, fishponds, salt beds and of lands devoted to the raising of livestock governed by stipulation between the parties.
"(d) In case the landholding is planted to auxiliary crops, the landholder-lessor and tenant-lessee shall divide the same in accordance with the provision of Section thirty of this Act."cralaw virtua1aw library
This was the first Tenancy Act which recognized the right of the landholder to demand an increase in rentals if he has introduced improvements on the farm which will increase its productivity. But then, this right of the landholder to demand an increase was applicable only to ricelands for it is quite clear that sub-section (a) of the aforequoted section covered ricelands only. In crops other than rice e.g. tobacco — and except sugarlands, fishponds, saltbeds, and lands devoted to the raising of livestock — [Sub-section (c)], the maximum rental imposable was 25% of the average gross produce.
This prohibition against increase of rentals unless improvements are introduced in the land, was carried over in RA 3844 13 both in its original form and as amended by RA 6389 14 respectively, thus — in the original form —
Section 34. Consideration for the Lease of Riceland and Lands Devoted to Other Crops. — The consideration for the lease riceland and lands devoted to other crops shall not be more than the equivalent to twenty-five per centum of the average normal harvest during the three agricultural years immediately preceding the date the leasehold was established after deducting the amount used for seeds and the cost of harvesting, threshing, loading, hauling and processing, whichever are applicable: Provided, That if the land has been cultivated for a period of less than three years, the initial consideration shall be based on the average normal harvest during the preceding years when the land was actually cultivated, or on the harvest of the first year in the case of newly-cultivated lands, if that harvest is normal: Provided, further, That after the lapse of the first three normal harvests, the final consideration shall be based on the average normal harvest during these three preceding agricultural years: Provided, furthermore, That in the absence of any agreement between the parties as to the rental, the maximum allowed herein shall apply: Provided, finally, That if capital improvements are introduced on the farm not by the lessee to increase its productivity, the rental shall be increased proportionately to the consequent increase in production due to said improvements. In case of disagreement, the Court shall determine the reasonable increase in rental."cralaw virtua1aw library
and as amended —
* Otherwise and for convenience, agritenancy to be distinguished from urban tenancy. This is especially necessary now that urban land reform measures have been instituted in addition to the series of agrarian reform measures.
1. Sec. 16, RA 946, effective June 17, 1976.
2. Sec. 155, RA 3844.
3. Aquisap v. Basilio, G.R. No. L-21293, Dec. 29, 1967, 2 SCRA 1434.
4. Decision, Roll, (L-46211-12), pp. 64-45, CA-SP 05825-26; penultimate paragraph; per Justice R. Gaviola.
5. Cf. Decision, Roll (L-45760), p. 37, CA, SP-04766 per Justice L.B. Reyes.
6. Rollo, G.R. No. L-44875-76, pp. 45-46; Id., G.R. No. L-46211-12, pp. 62-63.
7. Rollo, G.R. No. L-45160, pp. 36-37.
8. The "Rice Share Tenancy Act" enacted February 27, 1933.
9. Sec. 2 provides as follows:
"SEC. 2. Section seven of the same act, as amended by Commonwealth Act Numbered One hundred seventy-eight, is hereby further amended to read as follows:
x x x
"The following stipulations are hereby declared to be against public policy:
" (a) If the tenant shall receive less than fifty-five per cent of the net produce, in case he furnishes the work animals and the farm implements, and the expenses of planting and cultivation are borne equally by said tenant and the landlord.
" (b) If the rental stipulated to be paid by the tenant to the landlord is higher than twenty-five per cent of the estimated normal harvest, in case of a contract providing for a fixed rental of the land.
" (c) If the landlord is the owner of the work animal, and tenant of the farm implements, and the expenses are equally divided between the landlord and the tenant, for the tenant to receive less than fifty per centum of the net crop."
10. Cf. Arciga v. de Jesus, G.R. No. L-2003, Jan. 28, 1950, 85 Phil. 348; Villanueva v. Tenancy Division, Dept. of Justice G.R. No. L-4019, July 31, 1951, 80 Phil. 688; and Vidal, Et. Al. v. Judge Roldan, CIR, Et Al., G.R. No. L-5178, Oct. 24, 1952, 92 Phil. 137, this Court held that the Philippine Rice Share Tenancy Act (Public Act No. 4054), approved February 27, 1933, was applicable only to ricelands. A fortiori, Rep. Act. No. 34 which was only amendatory of the provisions of Act No. 4054 also covered ricelands only.
11. Sec. 11(B) (a).
12. Approved June 19, 1959.
13. The Agricultural Land Reform Code; approved August 8, 1963.
14. The Code of Agrarian Reform; approved September, 10, 1971.
15. The Share Tenancy System which has existed from memorial and which was the subject of legislation under Act 4054, RA 34 and thereafter, RA 1199 was abolished in 1963 per Sec. 4 of RA 3844 and declared contrary to public policy.
16. Calalang v. Williams, No. 47000; Dec. 2, 1940; 70 Phil. at p. 734-735; Fernando, The Const. of the Phil., 1974 ed., pp. 79-83.
17. A paraphrase of Prof. Thomas Reed Powel’s (of Harvard) "He who is less favored in life should be more favored in law." Tañada and Fernando, Constitution of the Philippines, 4th Ed. (1952), p. 63 et. seq.
18. Eg. Calalang v. Williams, 70 Phil. 726 (1940) cited, supra; Guido v. Rural Progress Administration, 47 O.G. 1848, (1949) 84 Phil. 847, a reconciliation between conflicting claims of social justice and protection to property and rights; Militona Estate Inc. v. De Guzman Et. Al., No. L-11912 (1959), 105 Phil. 1296 (unreported).