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G.R. No. 146935 - SPS. DANILO ESPARAGERA, ET AL. v. J.Y. REALTY & DEVELOPMENT CORPORATION

G.R. No. 146935 - SPS. DANILO ESPARAGERA, ET AL. v. J.Y. REALTY & DEVELOPMENT CORPORATION

PHILIPPINE SUPREME COURT DECISIONS

THIRD DIVISION

[G.R. NO. 146935 : February 24, 2005]

SPS. DANILO ESPARAGERA and DIEGA ESPARAGERA and ENRIQUE GONZALES, Petitioners, v. J. Y. REALTY & DEVELOPMENT CORPORATION, Respondent.

D E C I S I O N

CARPIO MORALES, J.:

In a complaint filed before the Department of Agrarian Reform (DAR) Regional Office at Cebu City by Enrique V. Gonzales (Gonzales) against Toribio Rodil (Rodil) and Salud Young for Preservation of Tenancy Status,1 Gonzales claimed to be a tenant on a portion of a five (5)-hectare landholding situated at Upper Bulacao, Pardo, Cebu City which Rodil formerly owned but which he sold to Salud Young.

In a separate complaint/petition filed also before the same DAR Regional Office by Danilo Esparagera, Gonzales' brother-in-law, together with the former's wife, also against Rodil and Young, along with Rodulfo Amancia, and J. Y. Realty Corporation (the realty corporation)2 to which Young eventually sold the landholding in question, for Injunction with Prayer for Issuance of Restraining Order, the spouses Esparagera claimed to be tenants too of a portion of the same landholding.

The two cases were, upon agreement of the parties, jointly tried. Gonzales and the Esparageras (the complainants) sought to establish that the landholding in question is an agricultural land.

In an 18-page decision3 dated August 28, 1991, the Provincial Agrarian Reform Adjudicator (PARAD) Atty. Rosalio T. Kintanar defined the following issues in the cases as follows:

I. 'WHETHER OR NOT COMPLAINANTS DANILO ESPARAGERA AND ENRIQUE GONZALES ARE BONA-FIDE TENANT FARMER[S] ON THE LAND IN QUESTION.

II. 'WHETHER OR NOT THE PROPERTY IN QUESTION IS RESIDENTIAL OR AGRICULTURAL IN NATURE

III. 'WHETHER OR NOT COMPLAINANTS HEREIN CAN BE DISLODGED, REMOVED OR DISPOSSESSED FROM THE SUBJECT LANDHOLDING BASED ON THE CIRCUMSTANCES OBTAIN[ING] HEREIN.4

Resolving the first and second issues in the negative, the PARAD held as follows, quoted verbatim:

In resolving all the above-enumerated issues seriatim, the first issue can be effectively resolved by traversing on the important elements of tenancy. Well-settled is the rule in this jurisdiction that in order to establish the juridical tie of tenancy relationship, the following essential elements must be present, to wit:

1) the parties are the landholder, who may be a landowner, lessor, usufructuary or legal possessor and a "tenant";

2) the subject matter is agricultural land;

3) the purpose is agricultural production;

4) the consent maybe express or implied;

5) the consideration maybe the shares given either in money or in kind or payment of lease rental thereon. (Section 4 Rep. Act 1199, as amended; Caballes v. Department of Agrarian Reform, et al., G.R. No. 78214, December 5, 1988; Gabriel v. Pangilinan, G.R. No. 27797, August 26, 1974)

As can be gleaned from the records of this case, late before 1948, there were already few coconut trees strategically planted along the boundary line of the land in question identified as Lot 5391 nestled at Pardo, Cebu City. Late thereafter, whole area was fully planted with coconut by former landowner, the late Eugenio Rodil assisted by Gil Rodil, Toribio Rodil, a certain Cleto and few hired laborers. (Exhibits "1" and "2", par. 4 and TSN dated Feb. 26, 1990, p. 16); Complainants Danilo Esparagera and Enrique Gonzales who are related by affinity being brother-in-laws entered the subject landholding by tolerance sometime 1960 and 1955, respectively. (Exhibits "H", par. 3 and "A", par. 1) That they were able to plant coconuts, corn and bananas and shared the produced thereof to the landowner through the acknowledged overseers Semiona and Alfonsa Cabaltera. (TSN dated Jan. 23, 1990; p. 5) These averments, however, are sternly denied and controverted no less than by Alfonsa Cabaltera herself who succinctly testified during the hearing in this wise:

9) Nga si Enrique Gonzales wala magabantay sa lubi wala siya mananum ug karon na lang naburoka na nga siya miuma sa yuta nga akong gibantayan ug gibantayan ni Juliana Castañares;

10) Nga nakaila usab ako kang Danilo Esparagera nga igo lamang nga nagpuyo sa yuta apan dili siya saop ug karon na lang siya magtanumtanum ug saging ug mais aron ingnon siya nga saop sa diha na nga naburoka ang yuta.

In English translation means:

9) That Enrique Gonzales has never watched the coconut trees and never planted them and it was only during the pendency of this case that he cultivated the land I' [m] watching jointly with Juliana Castañares;

10) That I also know Danilo Esparagera who merely stayed on the land but not as tenant and he started planting bananas and corn just recently so as to be called tenant in the pendency of this case involving this land." (Exhibit "9" and TSN dated August 20, 1990, pp. 4-15)

Besides, it is highly inconceivable and ludicrous to believe that farming is the main source of livelihood of complainant Gonzales who admittedly testified that he is a taxi driver and a Gospel Minister-Preacher who earned a net and better income of P40.00 to P50.00 a day in driving compared to P3.00 or little bit more in farming for every three (3) months. (TSN dated November 6, 1989, pp. 18-19; TSN dated February 26, 1990, p. 7) While complainant Esparagera derived a minimal income from farming compared to furniture making out of rattan whose lucrative income and viability is even known for export. This is patently shown in the cash advance receipt dated February 25, 1989 signed by Diega Esparagera, wife of the aforenamed complainant. (TSN dated September 14, 1990, pp. 16-17; TSN dated December 10, 1990, pp. 16-18)

Viewed from the foregoing perspective, it is irresistible to conclude that complainants herein are not bona-fide tenant-farmers on the land under controversy especially so that that no scintilla of hard and persuasive evidence has been adduced by complainants except their bare testimonies which fall short of the required "substantial evidence" inevitably necessary to sutain a valid cause of action in agrarian cases or controversies. (Hernandez v. Intermediate Appellate Court, et. al., G.R. 74323, September 21, 1990)

On the second issue, the opposing claims of the parties are obvious that while complainants averred that the parcel in question is agricultural, respondents also contended that it is residential in nature.

A judicious perusal on the records of this case, complainants argued that based on the actual use of the subject land, it is agricultural while respondents alleged that it is residential and in support thereof is the Certification dated March 9, 1989 signed by Mr. Ignacio P. Salgado, Jr. of the Department of Planning and Development, Cebu City (Exhibit "4"), Copy of Resolution No. 2003 approving the Rezonification Plan of Cebu City as approved by the City Planning Board, series of 1966 (Exhibit "5"), Copy of the Zoning and Planning Ordinance of Cebu City adopted by the City Planning Board and approved by the National Urban Planning Commission pursuant to Executive Order No. 98 dated March 11, 1946 (Exhibit "6"), with the subject landholding situated at Pardo, Cebu City, clearly classified as residential (Exhibit "6-a") and, finally, copy of the Zonal Valuation of Real Properties in Cebu City issued by the Department of Finance through the Bureau of Internal Revenue (Exhibit "8") showing the assessment level/valuation of the subject landholding.

While in the ocular inspection conducted by this Board last June 17, 1991 with due notice to all the parties, it can be readily observed that while there are remaining coconut trees and newly planted bananas existing thereon, the land in question is predominantly surrounded with residential houses, the Cabingki subdivision, the Aznar Realty Development Corporation and the adjacent Catholic Cemetery vastly occupying the adjacent area. (Ocular Inspection Report dated June 27, 1991)

Plainly, therefore, it is not farfetched to believe that the subject landholding is residential in nature. The Honorable Supreme Court categorically ruled that where a piece of land is officially classified as residential by proper authorities, the same cannot be considered agricultural, nor can the fact that a caretaker planted palay thereon convert the land, in the heart of a metropolitan area, to agricultural land. (Tiongson v. Court of Appeals, 130 SCRA 482) It Is significant to note that this reclassification to residential land under the Zoning Ordinance dating back 1946 as approved by the then National Urban Planning Commission does not need any DAR Clearance as the said "legal requirement in cases of land use from agricultural to non-agricultural uses to conversion made on or after June 15, 1988, the date of the agrarian reform law's effectivity. Prior thereto the power of the HLURB and the Department of Finance to recategorize lands were exclusive." (LRA Circular No. 22 dated February 14, 1990 signed by then Justice Secretary Franklin Drilon).

Further still, the foregoing conclusion appears to be clearly consistent with the judicial norm established by the Honorable Court in parallel case of "Ouano, et al. v. Ercide, et al.," CA-G.R. No SP-08573-CAR, involving a landholding situated at Banilad, Mandaue City, adjacent to Cebu City. In upholding the lower court which declared as residential the land subject matter in said Ouano Case, the Appellate Court ruled:

In the said Peregrino Case, the change came about due to the overt act of the government of the City of Davao; the change in the instant case is due to progress of the times. The passing of time made the change from agricultural to residential/commercial. The change is due to immutable law of nature. Progress must go on; no one cannot arrest it. Take the case of the City of Cebu. Time was when the lands in the heart of the City were agricultural. But as time went on the City shed the agricultural vestures of its lands, not by law of decree, but due to the inevitable change concomitant with the progress of the times. So is the case at bar. The finding of the Planning Board and the Assessor's Office did not convert these parcels of land from agricultural to residential/industrial. The acts of the said Officials are merely reiterations of the fact already in existence . . . a fact that resulted from the progress of the place and the passing of the time.". . .

There can be no further room for doubt as to the subject parcel being residential in nature because the incumbent DAR Secretary, Honorable Benjamin T. Leong, in a very recent Order dated August 6, 1990 declared the landholding involved in Civil Case No. R-226 entitled "Lope Tuttud, et al. v. Ernesto Oporto," as residential. And said landholding is located in Tamban, Cebu City which is generally a rural community of about 15 kilometers from Cebu City compared to Pardo, Cebu City, the location of the subject property which is barely about 5 kilometers, a stonethrow from "booming" Cebu City. (Emphasis supplied; underscoring partly in the original and partly supplied)5

Resolving the third issue in the affirmative, the PARAD, crediting the claim of Rodil et al. that the complainants were allowed to occupy or stay on the property "by tolerance" during which the latter were able to introduce improvements on the subject landholding, concluded that complainants are not de jure tenants but at most "can be considered possessor and/or builder in good faith whose rights and obligations are circumscribed by the provisions of the New Civil Code (Rep. Act 386 as amended)."6 The PARAD thus disposed as follows:

WHEREFORE, in the light of all the foregoing considerations, Decision is hereby rendered as follows:

1) Dismissing the instant cases (DARAB Cases Nos. CEB-VII-45-89 and CEB-VII-97-89) for lack of merit;

2) Declaring respondents to be entitled and to receive/accept the deposited amounts tendered by complainant, Danilo Esparagera as evidenced by Official Receipts Nos. 4742045 - P843.75; 4742080 - P240.00 and 4742111 - P300.00 and from complainant Enrique Gonzales as evidenced by Official Receipt No. 4742042 - P2,266.35 dated January 18, 1990;

3) No pronouncement as to costs and damages. (Underscoring supplied)7

The complainants appealed the PARAD's decision to the Department of Agrarian Reform Adjudication Board (DARAB), assigning as errors the following:

(1) THE PARAD OF CEBU ERRED IN FINDING AND CONCLUDING THAT ENRIQUE GONZALES AND DANILO ESPARAGERA ARE NOT AGRICULTURAL TENANTS ON THEIR RESPECTIVE TILLAGES INSIDE THE SUBJECT LAND, AS THE SAME FINDING AND CONCLUSION ARE NOT SUPPORTED BY THE EVIDENCE ON RECORD; AND

(2) THE PARAD OF CEBU ERRED IN NOT DIRECTING THE PRESENT OR ACTUAL OWNER OF THE SUBJECT LAND TO EXECUTE A LEASEHOLD CONTRACT WITH ENRIQUE GONZALES; AND IN NOT ISSUING AN INJUNCTION AGAINST RESPONDENTS; (Underscoring supplied)8

In resolving the issue of whether the landholding in question is agricultural, the DARAB dwelt at length on the second and fifth essential requisites for the existence of landholder-tenant relationship reflected in the above-quoted portions of the PARAD's decision, to wit: the subject is agricultural landholding, and there is personal cultivation by the tenant.

Citing Administrative Order No. 1, Series of 1990, issued by the DAR Secretary on March 22, 1990 which defines agricultural land as follows:

Agricultural land refers to those devoted to agricultural activity as defined in RA 6657 and not classified as mineral or forest by the Department of Environment and Natural Resources (DENR) and its predecessors agencies, and not classified in town plans and zoning ordinances as approved by the Housing and Land Use Regulatory Board (HLURB) and its preceding competent authorities prior to 15 June 1988 for residential, commercial or industrial use. (Underscoring supplied),9

the DARAB "formulate[d] the essential requisites to be satisfied with in order that a parcel or piece of agricultural land has ceased to be agricultural and has been converted or classified as non-agricultural land" as follows:

(1) . . . the land is no longer devoted to agricultural activity; (2) the land is not classified as mineral or forest by the DENR and its predecessors agencies; (3) . . . the land is not classified in town plans or zoning ordinances for residential, commercial or industrial use; and (4) said town plan or zoning ordinance was approved prior to June 15, 1988 by the HLURB and its preceding competent authorities.10

Additionally, the DARAB noted the provision of Section 36(1) of Republic Act No. 3844, as amended by Republic Act No. 6389, which reads:

SEC. 36. Possession of Landholding; Exceptions. 'Notwithstanding any agreement as to the period or future surrender of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that:

(1) The landholding is declared by the Department head upon recommendation of the National Planning Commission to be suited for residential, commercial, industrial or some other urban use; Provided, That the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the average of the gross harvests on his landholding during the last five preceding calendar years. (Underscoring supplied)11

Furthermore, the DARAB noted the photographs presented by complainant Gonzales as showing that the landholding "is devoted principally to coconuts" to thereby corroborate the complainants' claim that "no less than . . . 915 coconut trees [we]re . . . found in the entire . . . 5-hectare landholding in November 1988," and that the Tax Declaration of Rodil categorized the landholding as corn land.12

Passing on the Zoning Ordinance of Cebu which classified as residential the landholding in question, the DARAB noted that no conclusive evidence was presented by Rodil et al. that the ordinance was duly approved prior to June 15, 1988 by the Housing and Land Use Regulatory Board (HLURB) or its preceding competent authorities. Hence, the DARAB "logically and conclusively concluded" that the landholding was and has remained "agricultural in nature, in use and classification."13

Respecting the fifth requisite, the DARAB, crediting the separate testimonies of the complainants that they are farmers by occupation whose "agricultural activities" include either planting or cultivating coconuts and bananas, weeding out the grass on the land, and gathering coconuts, discredited the claim that complainant Gonzales remained a taxi driver, and observed that while Esparagera occasionally served as a driver for fellow born again Christians in evangelistic missions and engaged in handicraft work, he was not shown to have been remiss in his obligation as a tenant.14

Accordingly, the DARAB reversed and set aside the PARAD's Order and disposed as follows:

WHEREFORE, finding reversible errors in the assailed decision, the same is hereby REVERSED and SET ASIDE, and judgment is hereby rendered:

1. Declaring the appellants Danilo Esparagera and Enrique Gonzales to be bona-fide and de jure agricultural tenant-tillers of their respective one-hectare agricultural farmholdings in the five (5)-hectare former Rodil landholding, situated in Pardo, Cebu City;

2. Ordering the appellees and any and all other persons proceeding from them to respect the appellants and their farm household in their tenurial rights thereon, and to maintain them in the peaceful possession and cultivation of their respective farmholdings;

3. Ordering the appellee Salud Young or her corporation to desist and cease from cutting down the coconut trees on the respective farmholdings of the appellants, and to respect and secure them in their tenancy rights therein;

4. Ordering the Provincial Agrarian Reform Officer of Cebu and the Municipal Agrarian Reform Officer of Pardo, Cebu City to cause the execution of leasehold instruments on the respective farmholdings of the appellants in relation to the appellee landowner;

5. Ordering the appellees to pay exemplary damages in the amount of Five Thousand Pesos (P5,000.00) and to pay the costs of the suit; andcralawlibrary

6. Dismissing the counterclaim of the appellees. (Underscoring supplied)15

Before the DARAB promulgated its decision on December 6, 1995, however, or on March 23, 1994, the complainants executed a Certification16 which reads as follows, quoted verbatim:

We, ENRIQUE GONZALES and DANILO ESPARAGUERRA are the plaintiff in DARAB Case No. 0561, which are presently on appeal before DARAB Adjudication Board, Quezon City, Philippines.

That, we are aware that the land which we claim to be tenanting belonging to J Y REALTY & DEVELOPMENT CORP. are Residential lands and specifically are not Agricultural lands.

That out of the benevolence of the present owner, J Y REALTY & DEVELOPMENT CORP., they have given us and we have receive[d] FIFTY THOUSAND (P50,000.00) PESOS each for whatsoever improvement we have introduced thereon.

That as of today, March 23, 1994, we have nothing whatsoever to do with the land and that we no longer are interested to pursue the DARAB case.

That on or before April 25, 1994, We shall remove our houses and the houses of our children within the property of J Y REALTY & DEVELOPMENT CORP.

IN WITNESS WHEREOF, We have hereunto set our hands on this 23rd day of March, 1994, in the City of Cebu, Philippines. (Underscoring supplied),

which Certification was subscribed and sworn to before a notary public.17

Following the promulgation of the decision of the DARAB, Rodil and the realty corporation filed a Motion for Reconsideration18 thereof alleging, inter alia, that their counsel was surprised upon receipt of the decision, said counsel being of the belief that the DARAB had already been informed of the Certification of March 23, 1994 which they referred to as "Compromise Agreement." Their counsel thus prayed that the decision be reconsidered and that it be decided on the basis of the "Compromise Agreement."19

By an undated resolution,20 the DARAB, finding that "no new matters [we]re adduced" by movants Rodil and the realty corporation, denied their motion for reconsideration.

The realty corporation thereupon elevated the cases to the Court of Appeals on a Petition for Review,21 docketed as Civil Case No. 49286, proffering the following

REASONS FOR THE ALLOWANCE OF THIS PETITION

I. THE DARAB ERRED IN DECLARING THAT NO NEW MATTER HAD BEEN ADDUCED TO WARRANT A RECONSIDERATION; AND

II. THE DARAB ERRED IN REVERSING THE DECISION OF THE PARAD DISMISSING THE CASES FILED BY APPELLEES BY DECLARING THAT TENANCY RELATIONSHIP EXISTS BETWEEN THE APPELLANT AND APPELLEES.ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

(Underscoring supplied)22

Before the appellate court, the realty corporation drew attention to the complainants' unquestioned issuance of the Certification of March 23, 1994 on account of which Certification it had entered into a contract with a third person for the development of the property and development has already commenced.

On the merits of the case, the realty corporation argued that whether a person is a tenant is basically a question of fact and the findings of the PARAD are entitled to great respect.

Citing Guerrero v. Court of Appeals,23 and COCONUT COOPERATIVE MARKETING ASSOCIATION, INC. (COCOMA) v. Court of Appeals24 the latter case of which held:

. . . The definition of cultivation is not limited merely to the tilling, plowing or harrowing of the land. It includes the promotion to growth and care of the plants, or husbanding the ground to forward the products of the earth by general industry. The raising of coconuts is a unique agricultural enterprise. x x x The major work in raising coconuts begins when the coconut trees are already fruit bearing. Then it is cultivated by smudging or smoking the plantation, taking care of the coconut trees, applying fertilizer, weeding and watering, thereby increasing the produce. . ., 25

the realty corporation posited that the complainants could not have performed the above-described activities attendant to "raising of coconuts" given their other concerns as driver and/or furniture manufacturer, as in fact they had not shown that such jobs did not deter them from performing their duties in the farm.

Finally, the realty corporation argued before the appellate court that the DARAB had ignored the factual findings of the PARAD during its ocular inspection that "this specific area in question [is] surrounded by the vast areas occupied and used by a Catholic cemetery, the Cabingki subdivision with a lot of residential houses, the Lotton Men rattan factory and the land owned by Gil Rodil adjacent to the Aznar Realty Corporation,"26 as well as the documentary evidence presented before the PARAD which indicates that the subject landholding had, as early as 1946, been classified as a residential area.

Respecting DARAB's observation that the Zoning Ordinance was not approved by the HLURB, the realty corporation argued that in 1946, the HLURB was not yet in existence and all that was needed was the approval of the National Urban Planning Commission.

In any event, the realty corporation argued that even if the approval of the HLURB were required, the Certification27 dated July 3, 1990 issued by Dionisio J. Amadora, Sr., Deputy Zoning Administrator of the HLURB, to the effect that the land in question is partly residential and commercial, should dissipate any doubts about the classification of the subject landholding.

Finally, the realty corporation argued that even without the documented reclassification of the landholding by the concerned agencies, the earlier above-quoted observations of the Adjudicator on the change of classification of the land "concomittant with the progress of the times" should seal the petition in its favor.

In fine, the realty corporation posited that "the findings of fact of the PARAD [are] based on substantial evidence and are, therefore, conclusive."28

The records of the cases before the Court of Appeals do not show that the complainants filed a Comment on the petition of the realty corporation, although the DARAB filed one.

In its Comment, the DARAB contended, inter alia, that:

2.1.2. Petitioner argues that for "x x x ignoring the settlement by the parties, the DARAB had inadvertently encourage multiplicity of suits x x x" (Petition, p. 4).

2.1.3. Respondent DARAB disagrees. For disregarding the alleged settlement, contained in a certification executed by private respondents, in resolving the agrarian dispute raised herein, respondent DARAB, it is respectfully submitted, should not be faulted. Firstly, DARAB is not privy thereto; and, secondly, subject settlement/agreement of the parties contemplated of matters beyond the legal capacity of the parties.

2.1.2.1. Referred to is the stipulation that the disputed landholding is not agricultural. (Petition, p. 3). This cannot be subject of a private settlement since classification of land is a prerogative of the law-making body, either by direct legislation or by delegation of power (Comm. Act No. 141; Rep. Act No. 7160, Sec. 20 thereof). The parties may not arrogate upon themselves the power of classification of land. (Emphasis in the original; underscoring supplied)29

The appellate court, in deciding the petition, took into consideration the fact that the Certification of March 23, 1994 issued by the complainants was executed two years after the PARAD rendered its decision (on August 28, 1991) declaring the land residential. To the appellate court, this refuted the DARAB's argument that the parties are powerless to classify land.

In any event, the appellate court held that the determination of the existence of tenancy relationship depends upon several factors, the classification of the landholding being only one of them.

Noting the following considerations, to wit: the complainants were found by the Adjudicator not to be tenants of the farm; a development permit was subsequently issued by the HLURB to the realty corporation on November 26, 1990 covering the subject landholding, which permit states that the area is a residential subdivision; the ocular inspection report of the Adjudicator shows that the subject landholding is residential; and the findings of fact of the PARAD are based on substantial evidence to thereby render them conclusive, the appellate court, by the assailed Decision30 of November 19, 1999, reversed and set aside the DARAB's December 6, 1995 decision and reinstated that of the Adjudicator dismissing the complainants' complaints.ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Hence, the present Petition for Review on Certiorari filed by the complainants (hereinafter referred to as petitioners) against the realty corporation (hereinafter referred to as respondent), raising the following issues:

FIRST: Whether or not the action of the Appellate Court in considering the "CERTIFICATION" as having been validly offered as respondent's evidence finds support in law.

SECOND: Assuming that said "CERTIFICATION" had been validly offered in evidence, whether or not there was legal basis in considering the same as a compromise agreement between the parties.

THIRD: Whether or not there was sufficient legal basis in the Appellate Court's reversal of the DARAB Decision.31

Petitioners assail, in the main, the reliance by the appellate court on the Certification (which they claim to have been signed without the assistance of counsel), the same not having been "validly" offered in evidence, for even the DARAB, in denying respondent's Motion for Reconsideration of its decision, did not mention, even in passing, said Certification. But even if it had been "validly" offered, petitioners contend that the appellate court violated the Rules in considering it as a compromise agreement, it not having been presented before the Adjudicator, nor before the DARAB before it promulgated its decision.

The petition fails.

By the Certification, petitioners unconditionally declared that the subject land is residential, not agricultural; that they received P50,000.00 each "for whatever improvements [they] introduced thereon"; that they would remove their houses and those of their children; and that they "have nothing whatsoever to do with the land and that [they] no longer are interested to pursue the DARAB case." Parenthetically, it is informed by respondent in its Comment32 to the present petition that petitioners had after the execution of the Certification vacated the landholding, which information was not denied by petitioners.ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Since, unquestionably, the Certification was voluntarily accomplished by petitioners, that it was not submitted before the Adjudicator and was submitted to the DARAB only after its decision had been promulgated does not violate any rules. For

. . . [I]t is a general rule in this country that compromises are to be favored, without regard to the nature of the controversy compromised. . . . If settlement be made . . ., free from fraud or mistake, whereby there is a surrender or satisfaction, in whole or in part, of a claim upon one side in exchange for or in consideration of a surrender or satisfaction of a claim in whole or in part, or of something of value, upon the other, however baseless may be the claim upon either side or harsh the terms as to either of the parties, the other cannot successfully impeach the agreement in a court of justice . . . (Underscoring supplied)33

The settlement reflected in the Certification executed by petitioners, whether it is in the nature of a compromise agreement bereft of court approval,34 albeit it is more in the nature of a quitclaim the voluntariness of its execution of which has not been raised, is binding on the parties and may not, on account of alleged procedural or substantive legal infirmity, be denied evidentiary value to affect the outcome of the case. It thus has the effect of res judicata, following Art. 2037 of the Civil Code.35

This leaves it unnecessary to still dwell on the third issue raised by petitioners. Suffice it to state that the findings of facts-bases of the conclusions of the Adjudicator are supported by substantial testimonial and documentary evidence and must, therefore, be respected, petitioners having failed to convince this Court that certain material facts or matters had been overlooked by the Adjudicator which, if considered, would merit a different disposition of the case.

WHEREFORE, the petition is hereby DENIED for lack of merit.

Costs against petitioners.

SO ORDERED.

Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Garcia, JJ., concur.

Endnotes:


1 CA Rollo at 22-26.

2 Id. at 27-29.

3 Id. at 36-52.

4 Id. at 47.

5 Id. at 47-51.

6 Id. at 51.

7 Id. at 51-52.

8 Id. at 77-78.

9 Id. at 95.

10 Id. at 95-96.

11 Id. at 96.

12 Id. at 96-97.

13 Id. at 97.

14 Id. at 98-99.

15 Id. at 101.

16 Id. at 53.

17 Ibid.

18 Id. at 103.

19 Id. at 104.

20 Id. at 106.

21 Id. at 12-19.

22 Id. at 14.

23 142 SCRA 136 (1986).

24 164 SCRA 568 (1988).

25 Id. at 580.

26 CA Rollo at 17.

27 Id. at 71.

28 Id. at 18.

29 Id. at 170.

30 Rollo at 21.

31 Id. at 7-8.

32 Id. at 59-61.

33 McCarthy v. Barber Steamship Lines, 45 Phil. 488, 498 (1923).

34 Vide annotations on 237 SCRA 824 (1994).

35 ART. 2037. A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution except in compliance with a judicial compromise.

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