PABLO C. SIBULO, PETITIONER, VS. LOPE ALTAR, RESPONDENT.

Pablo Sibulo, owner of first class agricultural land, entered
into a contract of tenancy with Lope Altar whereby the former was to furnish the
work animals and farm implements, the latter to defray all the expenses of
planting and cultivation, and the net produce to be divided equally between
them.

The contract having been disapproved by the Tenancy Law
Enforcement Division of the Department of Justice on the ground that the crop
division therein stipulated contravenes subsection (c) of section 7, in
relation to the last clause of the first paragraph of section 8 of the Tenancy
Law, as amended, the matter was taken to the Court of Industrial Relations by
appeal. After hearing, that court upheld the contention of the Department of
Justice, declared the contract illegal as against public policy, and ordered
that—

“If the parties decide to continue with the proposed contract
it should be so modified as to conform with the sharing basis above set forth;
i.e., 60 per cent for the tenant and 40 per cent for the landlord. Should they
deci’de to have no contract at all, then section 8 of Act No. 4054, as amended,
shall govern.”

The case is now before us on appeal by certiorari upon petition
of Pablo Sibulo.

The question for determination is whether or not the contract
involved in this case is against public policy within the intent of the Tenancy
Law (Act No. 4054, as amended by Republic Act No. 34). Among the stipulations
prohibited by that law as against public policy are those described in
paragraphs (a) and (c) of its section 7 as follows:

“(a) If the tenant shall receive less than 55 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.

“(c) If the landlord is the owner of the work animal,
and the tenant of the farm implements, and the expenses are equally divided
between the landlord and the tenant, for the tenant to receive less than 50 per
centum of the net crop.”

Apparently, the contract in question does not fall squarely
under either of the above two paragraphs; but the Court of Industrial Relations
has taken the view that, in substance, it comes within the policy of the legal
prohibition. There is logic in the reasoning which led the lower court to this
conclusion. Section 8 of the Tenancy Act provides:

“SEC. 8. Share basis.—In the absence of any written
agreement to the contrary and when the tenant furnishes the necessary implements
and the work animals and defrays all the expenses for planting and cultivation
of the land, the crop shall be divided as follows: the tenant shall receive 70
per cent of the net produce of the land and the landlord 30 per
cent for first-class land, the normal production of which, based on the
average yield for the three preceding years, is more than forty cavans of palay
per one cavan of seeds; 75 per cent for the tenant and 25 per
cent for the landlord, in case of land the average normal production of
which is not more than forty cavans of palay per one cavan of seeds. In
case the landlord furnishes the necessary work animals and farm implements and,
likewise, bears all the expenses of planting and cultivation, the landlord shall
receive 70 per cent and the tenant 30 per cent of the crop; but if
the landlord furnishes the necessary work animals and farm, implements and bears
equally with the tenant the expenses of planting and cultivation, the crop shall
be divided equally between the parties.

“Expenses for harvesting and threshing shall be deducted from
the gross produce. Expenses for the maintenance of irrigation systems within the
respective areas shall be for the account of the tenant, but amortizations for
the cost of construction, of the system itself shall be for the account of the
landlord. The expenses for construction and maintenance of privately-owned
irrigation systems shall be agreed upon between the landlord and tenant, but in
case of disagreement, all expenses for the construction of the system shall be
for the account of the landlord, provided that the cost of constructing the
distribution canals shall be for the account of the tenant.

“* * * * * * *”

Reading sections 7 and 8 together, the lower court has
correctly determined the percentage that should correspond to each factor of
production in the division of the crop according to the policy of the law. Says
the court on this point:

“It is clear from sections 7 and 8 of Act No. 4054, as amended,
that the division of the harvest depends upon the apportionment of the different
items of expenses, such as (1) work animals, (2) farm implements, and (3) the
expenses of planting and cultivation. The rate of percentage for every item of
the expenses or cost of production may be obtained by the following process
based on sections 7 and 8:

‘1. Under section 8, the tenant shall receive 70 per cent of
the net product of the land and the landlord 30 per cent, for first class
rice land, when the tenant furnishes the farm implements and the work
animals and defrays all the expenses for planting and cultivation,
whereas, under section 7(a), the tenant shall receive not less than 55
per cent of the net produce, in case he furnishes the work animals and the
farm implements and one-half (1/2) of the expenses for
planting and cultivation. The difference between the share of the tenant in
this case is 15 per cent (70 minus 55 per cent), and the said 15 per cent
represents one-half (1/2) of the expenses for planting and
cultivation, which justifies his receiving only 55 per cent of the net
produce under section 7(a), because he did not furnish all (2/2)
the expenses of planting and cultivation. Therefore, if 15 per cent
represents 1/2 of the expenses for planting and cultivation, then 2/2 or all
the expenses for planting and cultivation are equivalent to 30 per cent.

‘If under section 8 the tenant receives 70 per cent when he
furnishes the farm implements and work animals and defrays all the expenses of
planting and cultivation, it must follow that the landlord is given 30 per cent
for being the owner of the land and for his management thereof.

‘Under the same section, if the landlord furnishes the work
animals and farm implements and at the same time defrays all the expenses, he
shall receive 70 per cent. It therefore follows that the remaining 30 per cent
goes to the tenant for his labor.

‘c. Comparing section 7(c), which provides that the
tenant shall receive at least (least) 50 per cent of the net crop if he
furnishes the farm implements and one-half (1/2) of the
expenses for planting and cultivation, with the provisions of section
7(a) where the tenant receives 55 per cent of the net produce, if he
furnishes the work animals and the farm implements and one half
(1/2) of the expenses for planting and cultivation, the
difference between the share of the tenant in this case is 5 per cent (55 per
cent minus 50 per cent), and the said 5 per cent represents the work
animals which he did not furnish under the said section 7 (c).

‘3. Under section 8, in case the landlord furnishes the work
animals and farm implements and, likewise, bears all the expenses
of planting and cultivation, the landlord shall receive 70 per cent and the
tenant 30 per cent of the crop; whereas, under section 7(c) if the
landlord is the owner of the work animals and the tenant of the farm
implements, and the expenses of planting and cultivation are equally
divided between the landlord and the tenant, the tenant should receive at least
50 per cent of the net crop and the remaining 50 per cent pertains to the
landlord’s share. The difference between the share of the landlord in this case
is 20 per cent (70 per cent minus 50 percent), and the said 20 per cent
represents the farm implements and one-half (1/2) of the
expenses for planting and cultivation which the said landlord did not
furnish under section 7(c). Therefore, if one-half (1/2) of the expenses
for planting and cultivation is equivalent to 15 per cent (see paragraph No. 1),
then 20 per cent minus 15 per cent equals 5 per cent, and the said 5 per cent
represents the percentage for farm implements.’

“Following the foregoing formula, the sharing ratio between the
parties in the case at bar should be as follows:

“For the tenant—

(1) 30 per cent for defraying all the expenses of planting and
cultivation.
(2) 30 per cent for his labor.

____
60 per cent total share.

“For the landlord—

(1) 5 per cent for furnishing the work animals.
(2) 5 per
cent for furnishing the farm implements.

____
“40 per cent total
share.”

From the above computation the Court of Industrial Relations
concludes that the contract involved in this case is against public policy as
contemplated in section 7 of the Tenancy Law, for the reason that “instead of
receiving 60 per cent of his total share, the tenant shall receive 50 per cent
only.”

The petitioner takes exception to the above conclusion,
contending that his contract with the respondent is not among those expressly
declared to be against public policy by section 7 of the Tenancy Law, this on
the theory that only those stipulations expressly mentioned in said section are
outlawed as such. We cannot subscribe to this narrow interpretation of the
Tenancy Act. In declaring certain stipulations to be against public policy, the
legislature could not have meant to sanction other stipulations which, though
not specified, are in effect similar to those expressly mentioned. Otherwise, by
sutlety in the framing of the contract, the law might easily be circumvented and
its purpose defeated.

The Tenancy Act is a remedial legislation intended to better
the lot of the share-cropper by giving him a more equitable participation in the
produce of the land which he cultivates. Being a remedial statute, it should be
construed so as to further its purpose in accordance with the general intent of
the lawmaker. Adopting the construction placed upon it by the petitioner would
open the door to evasions and render the law useless.

The point is made that it is error to apply to the present case
the division of crops established for the different cases specified in section 8
of the law, since the provisions of that section apply only t in the absence of
a written contract. It will be noted, however, that the lower court has not
exactly applied to the case at bar the division of the crops established in said
section, but has merely had resort thereto as an aid in determining the
percentage which, in the opinion of the legislator, should correspond to each of
the factors of production in the division of the crop.

We find no merit in the appeal and we therefore affirm the
decision below, with costs against the petitioner.

Moran, C.J., Paras, Feria, Pablo, Perfecto, Bengzon,
Tuason, and Briones, JJ., concur.