SATURNINO PINEDA, ET AL., PETITIONERS, VS. VIDAL PINGUL AND COURT OF INDUSTRIAL RELATIONS, RESPONDENTS.

On June 18, 1951, respondent Vidal Pingul filed in the Court of Industrial
Relations a complaint against Saturnino Pineda and some 68 others (petitioners
herein), alleging that the latter are his tenants who had refused to agree to
and sign the contract of rice tenancy proposed by Pingul providing for a 45-55
sharing ratio, and praying that said tenants be ordered ejected if they Insist
in their refusal. The petitioners filed an answer alleging that the proposed
contract is not in accordance with law and public policy, and praying that
judgment be rendered giving effect to Republic Act No. 34 which provides for a
division of crops in the ratios of 80-20, 75-25, or 70-30, depending upon
whether it is the landlord or the tenant who furnishes the necessary implements
and work animals and defrays all the expenses for planting and cultivation.

In his order of October 5, 1951, Judge V. Jimenez Yanson of the Court of
Industrial Relations held as follows:

“Premises considered, the Court finds and so holds that the choice of
contract terms is with the landlord and it is for the tenant either to accept or
to reject them. In the latter eventuality the landlord may exercise his property
rights, provided he can prove that the terms and conditions offered in the
contract are in accordance with law, morals and public policy.

“Commissioner Renaldo Carlos who has been designated to receive the evidence
of the parties is hereby ordered to set the hearing of the case on its merits
without further delay.”

The motion for reconsideration having been denied by a 3 to 2 vote of the
Court of Industrial Relations in bane, the petitioners have appealed to this
Court by way of certiorari.

The record discloses that the petitioners have long been tenants of the land
involved in this case and their sharing agreement had always been in the 70-30
ratio since Republic Act No. 34 was approved on September 30, 1946, until the
complaint was filed in the Court of Industrial Relations by respondent Vidal
Pingul who took over the land under petitioner’s tenancy as lessee of the owner.
The question squarely presented is whether the new landlord can compel the
petitioners to sign the 45-55 rice tenancy contract proposed by him, and whether
their refusal is a just cause for their dismissal or ouster.

The Rice Share Tenancy Law, Act No. 4054, as amended by Commonwealth Act No.
178 and Republic Act No. 34, intended to protect the interests of both the
landlord and the tenant, without infringing upon or curtailing the proprietary
rights of the landlord or owner, was undoubtedly conceived mainly to redeem the
tenant from his life of misery, want and oftentimes oppression, arising from
onerous terms of his tenancy. Side by side with this objective, and in obedience
to the declared principle of promoting social justice to insure the well-being
and economic security of all the people (Constitution, Article 11, Section 5),
and to the mandate to afford protection to labor and to regulate the relations
between landowner and tenant (Constitution, Article XIV, Section 6), the Rice
Share Tenancy Law was also aimed at the upliftment of the social and financial
status of the tenant.

Having these considerations in view, we are inclined to hold that, where a
situation involves an old and preexisting tenant, as in this case, he cannot be
forced to alter the existing share agreement, unless we are to authorize an
indirect way of easing out the tenant without one of the just causes specified
in the Rice Share Tenancy Law. If any change is desirable in the matter of the
sharing ratio, the initiative and decision should lie with the tenant who, under
the spirit of the law, must be left to choose and determine what arrangement is
suitable and advantageous to him, considering his ability to supply the
implements and work animals and to defray the expenses of planting and
cultivation. The law, in enumerating expressly certain sharing ratios (Section
8, Repulic Act No. 34), is presumed to have taken into account the fact that the
landlord or owner is thereby to receive a fair return from his land and any
investment thereon.

In the present case, if the former landlord of the petitioners (who is the
real owner) had agreed to and was satisfied with the 70-30 ratio in favor of the
petitioners, there could be no reason for the respondent Pingul (lessee) to
shift to the 45-55 ratio, other than either to receive a greater return or
profit from his investment or merely to oust the petitioners who, he undoubtedly
assumed, would object to the new arrangement. Or the situation is also possible
that a lessee landlord may pose as a dummy of the owner who may not have the
courage himself to impose a new tenancy contract upon the tenant. Our conclusion
in a way would tend to avoid unwholesome arrangements. The case is certainly
different for a new or prospective tenant who, before being accepted, has of
course to accede to the terms of the landlord.

The Court of Industrial Relations invokes section 16 of the Rice Share
Tenancy Law conferring upon the landlord the prerogative of management. This
provision, however, must be interpreted to cover details other than the choice
of the sharing ratio, a matter fundamental in making the tenant contented and
happy, the latter being clearly estopped from complaining of his own selection.
In the long run, it would be to the marked advantage of the landlord to be
solicitous of the welfare of his tenant and thereby to have in return the
benefit of his tenant’s loyalty and inspired labor; and in general we can hope
to see the end of the so called agrarian unrest and the advent of a fruitful
unity between landowners and tenants.

The appealed decision is hereby reversed. We hold that the petitioners cannot
be ejected for refusing to sign the contract proposed by the respondent Vidal
Pingul, and that they have the right to insist in the enforcement of section 8
of Republic Act No. 34 in accordance with the views expressed in this decision.
So ordered, without costs.

Pablo, Bengzon, Padilla, Jugo, and Bautista Angelo, JJ., concur.
Montemayor, J., concurs in the result.

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LABRADOR, J.:

I concur.

The respondent Vidal Pingul justifies a change in the basis of division of
the crops (from the 70-30 to the 55-45 basis) by alleged improvements on the
land, especially the installation of an irrigation system. The law (Republic Act
No. 34, section 3) already has provided for this contingency, and may not be
invoked as a ground for a change. The law grants both parties, landlord and
tenants, the freedom to enter into any kind of tenancy and adopt between
themselves the basis of the division of the crops, without any limitation
whatsoever other than those mentioned in the law, namely, existing laws, morals,
and public policy. But once entered into, the basis may not be changed at all
without the consent of the other. The case of Bulasag vs. Ramos, 85 Phil., 330;
47 Off. Gaz., No. 7, 3450, has been invoked in favor of respondent’s petition
for a change in the basis, on the principle that the landlord should be the
party given the choice as to what basis of tenancy should prevail, with right to
eject the tenant if the latter refuses to agree to the proferred terms. That
case should be distinguished from the case at bar, because that case seems to
involve a new contract, where no formal contract of tenancy under the law had
theretofore existed between the parties. In that case, as the tenant refused to
accept the terms that the landlord desired because they were not acceptable to
him, he was at liberty to do so, but he could not impose the basis of sharing he
desired. The landlord, owner of the land, according to the Court in that
decision, should primarily be the one to decide, at the inception of the
relation, the basis of sharing he desires.

The case at bar, however, is one where the relation of tenancy under a 70-30
basis had been in existence for a long period of time. Petitioner have,
therefore, been, furnishing the necessary implements and work animals, and
defraying the necessary expenses for the planting and cultivation of the land.
To compel them now to change the basis of the division would be to render said
implements and work animals unnecessary in their work as tenants and deprive
them of the privilege to dedicate these to profitable use. Thus the fruits of
their frugality, which they have converted in the form of capital goods—work
animals and implements for use in the lands they have been cultivating for many
years, would be lost forever to them. It could not have been the intention of
the Legislature, in giving both landlord and tenant freedom of contract, to
allow the landlord every year, or at any time he chooses or pleases, to change
the basis of the sharing of the crops with his tenants, and render useless the
work animals and implements accumulated by the tenant for the land he
cultivates. The ultimate aim and purpose of the law—the amelioration of the
condition of the tenant—would be completely frustrated were the freedom to
contract enunciated in the law interpreted in such a way as to allow this unfair
and unjust treatment of the tenant. Once a basis has been adopted, with freedom
for both, this basis should not be changed again at the instance of one without
the consent of the other. Only under such an interpretation may a desirable
stability be reached for both and to their ultimate satisfaction.