PERFECTO CORDERO, MACARIO DE LA CRUZ, AMBROSIO GARCIA, CONSTANCIO ISIDRO, GODOFREDO ISIDRO, JOSE JOAQUIN, FRANCISCO LEONCIO, SIMEONA MALUBAY, SILVINO PANGILINAN, EPIFANIA RAMOS,…

Petition for review on
certiorari of a decision of the Court of Agrarian Relations:

“(1) Declaring paragraph 6 of the contracts of tenancy executed by
the parties herein dated April 25, 1964 (Exhibits “B”,
“B-1” “B-23″1 to be valid, the same not being contrary to
law, morals or public policy;

“(2) Ordering the defendants to comply with said paragraph
until the expiration of the period of their contracts of tenancy on April 25,
1967;”

and
dismissing “all other claims of the plaintiff” – respondent herein –
and the counterclaim of the defendants – petitioners herein.

For about ten (10) years
prior to 1964, the latter had been share tenants of the former, in the Barrio
of Banga, Municipali­ty of Plaridel, Province of Bulacan.  On April 25, 1964, they entered into
contracts of leasehold tenancy which provided, inter alia, that
the palay harvested by the lessees (petitioners) would be threshed in the
lessor’s (respondent’s) machine, and that as compensation for the use thereof
the lessee shall pay 14 sacks and the lessor 6 sacks for every 120 sacks of
palay thus threshed.  This
notwithstanding, early in February, 1965, petitioners had caused their palay to
be threshed in t0he machine of somebody else. 
For this reason, on February 22, 1965, respondent instituted, against
petitioners herein, CAR Case No. 1132-Bulacan 65, for ejectment and damages.  On September 6, 1965, both parties sti­pulated:

“1. That the plaintiff is of
legal age, married, landholder-physician, and a resident of Poblacion,
Plaridel, Bulacan.

“2. That the
defendants are all of age, farmers, and residents of Banga, Plaridel, Bulacan.

“3. That the following defendants are the lessees of the plaintiff
over certain parcels of first class agricultural rice land belonging to him
situated at Banga, Plaridel, Bulacan: 
Perfecto Cordero Ma­cario dela Cruz, Ambrosio Garcia, Constancio Isidro,
Godofredo Isidro, Jose Joaquin, Francisco Leoncio, Simeona Malubay, Silvino
Pangilinan, Epifania Ramos and Francisco Talastas.

“4. That the following defendants are the lessees of ANTONIO CASTRO over certain parcels of first class
agricultural rice land belonging to him situated at Banga, Plaridel, Bulacan, who is represented in this suit by the
plaintiff by virtue of a “Special Power of Attorney” which he
executed in favor of the plaintiff on April 24, 1964 (Please see Annex
“A” of the Complaint which is also being similar­ly marked herein and
made an integral part here­of):  Maria
Bunag, Bernardino Crisostomo, Gavi­no de la Cruz, Guillermo de la Cruz, Mario
de la Cruz, Graciano Espiritu, Julian Garcia, Primo Malubay, Guillermo
Punongbayan, Anita Ruiz, Bonifacio Santos and Monico Villafuerte.

“5. That on April
25, 1964, the plaintiff and ANTONIO CASTRO (the latter represented by the
former by virtue of the “Special Power of Attorney” mentioned above)
entered into identical con­tracts of leasehold with the defendants, denomi­nated
as “Kasunduan ng Pamumuwisan” rig Lupang Sakahan,” paragraph 6
of which provides thus:  (Please see
Annex “B” of the Complaint which is also being similarly marked
herein and made an integral part hereof)

“Na ang tiliadora ng MAY LUPA ang gagamitin ng MAGSASAKA sa
pag­giik ng palay at ang kabayaran sa paggamit ay gaya ng sumusunod:  14 na kaban sa gumapas at 6 sa MAY LUPA sa
bawa’t 120 kaban na maggiik na palay.”

“6. That the said leasehold contracts, which were duly executed and
regularized pursuant to law, were voluntarily entered into by the parties
therein and all their provisions understood by them.  The parties were assisted by their res­pective
counsel who negotiated and worded the final draft of the leasehold contracts
and wit­nessed their signing.

“7. That following the palay harvest season for the agricultural
year, 1964-1965, specifically, in February, 1965, the defendants failed to use
the threshing machine belonging to the plaintiff, but availed themselves of the
services of another threshing machine belonging to another party on the ground
that Paragraph 6 of their leasehold contract with the plaintiff is contrary to
law.

“8. That the plaintiff sent identical letters of demand to the
defendants, dated February 6, 1965, asking them to vacate their respective landholdings
alleging violation of paragraph 6 of their contract.  Please see Annex “C” of the
Complaint which is also being similarly marked herein and made an integral part
hereof.”

and
prayed:

” x x that the foregoing Partial Stipulation of Facts be APPROVED
and the case be set for trial on the merits for the reception of additional
evidence in support of the controverted claims of the parties.”

In due course,
thereafter, or on February 8, 1966, the Court of Agrarian Relations,
hereinafter referred to as CAR, rendered its aforementioned decision finding
that petitioners had violated the provision of their leasehold contract
concerning the use of respondent’s threshing machine, which the CAR held to be
valid, despite petitioners’ claim to the contrary.  The CAR declared, however, that said
violation was due merely to a misapprehen­sion of petitioners’ rights, because
of which it does not constitute a lawful cause to oust them, and, accordingly,
warned them that a subsequent violation would be considered deliberate and
willful and, hence, a sufficient ground for their ejectment.  Petitioners herein insist that the contested
stipulation is contrary to law.

Pursuant to Section 15,
Republic Act No. 3844:^[1]

“The agricultural lessor and the agricultural lessee shall be
free to enter into any kind of terms, conditions or stipulations in a leasehold
contract, as long as they are not contrary to law, morals or pu­blic
policy.  A term, condition or stipulation
in an agricultural leasehold contract is considered contra­ry to law, morals or
public policy:

“(1) If the
agricultural lessee is required to pay a rental in excess of that which is
hereinafter provided for in this Chapter;

“(2) If the agricultural lessee is required to pay a consideration
in excess of the fair rental value as defined herein, for the use of work
animals and/or farm implements -belonging to the agricultural les­sor or to any
other person; or

“(3) If it is imposed as a condition in the agricultural
leasehold contract:  (a) that the
agricultural lessee is required to rent work animals or to hire farm
implements from the agricultural lessor or a third person, or to make use
of any stare services operated by the agricultural lessor or a third person; or
(b) that the agricultural lessee is re­quired to perform any work or render any
service other than his duties and obligations provided in this Chapter with or
without compensation; or (c) that the agricultural lessee is required to answer
for any fine, deductions and/or assessments.

“Any contract by which the agricultural lessee is required to
accept a loan or to make payment therefor in kind shall also be contrary to
law, mo­rals or public policy.”

It is clear, from the record, that the leasehold contracts
between the parties herein “impose” upon the lessees (petitioners
herein), as one of the “conditions” of said contracts, the obliga­tion
to rent a farm implement (the threshing machine) of the les­sor (respondent
herein), and that, accordingly, the stipulation to this effect is null and
void.

In reaching the opposite conclusion and finding that respondents
had violated their respective contracts, the CAR seems to have been mainly
influenced by the fact that said contracts were volun­tarily made by both
parties, assisted by their respective counsel; -that petitioners were willing
to use respondent’s threshing machine, provided that they be employed as
laborers – as they were, in the preceding ten (10) years – during the threshing
of their respective crops; that respondent did not so employ them in 1965, for
fear that they may tamper with his threshing machine “in view of the
strained relationship between them arising from their tenancy dis­putes;”
and that respondent had “the right to choose laborers” and was “under
no obligation” to employ the petitioners, as such laborers, there being no
stipulation to this effect.

The voluntariness with
which petitioners, assisted by their counsel, entered into their respective
leasehold contracts does not negate the fact that their obligation to rent respondent’s
thresh­ing machine was one of the conditions imposed for the change in the nature of their relationship, from one of share tenancy to that of relationship, leasehold.  There would, of course, be no contract unless
both parties had agreed thereto, freely and voluntarily, from a legal
viewpoint.  The consent thereto given
does not detract, however, from the circumstance that some of the terms and
conditions thereof may have been demanded or exacted by one of the parties to
the agreement, who, otherwise, might not have entered into the contract.  The present action for ejectment and damages
shows beyond doubt that respondent regarded said obligation as a prerequisite
for his consent to the leasehold contracts with herein petitioners, and that,
consequently, the aforementioned obligation was imposed upon them, within the
purview of Section 15 of the Act. 
Indeed, otherwise, there was no plausible reason for them to agree on
curtailing their freedom to choose the manner or conditions under which their
harvest shall, be threshed.

Considering the
conditions obtaining in the Philippines at the time of the enactment of
Republic Act No. 3844 and the as­sumptions on which the same is based,^[2] as well as the context of said Act, in
general, and the language of Section 15 thereof, in particular, we are
satisfied that stipulations like the one under consideration should be deemed
“imposed” upon the lessee as a “condition” for the
leasehold contract, in the absence, at least, of satisfactory proof to the
contrary.  Instead of such proof, res­pondent
herein has, by his present action for ejectment and damages, shown that the
stipulation in question had been really imposed as a condition for his agreeing
to said contract, thereby contravening the spirit of said Act, pursuant to
which “the esta­blishment of the agricultural leasehold relation” is
compulsory.^[3]

One other point.  On motion
of the petitioners, dated March 7, 1966, we caused to be issued, on March 12,
1966, a writ of pre­liminary injunction staying the execution of the decision
appealed from, insofar as it compels them to thresh their harvest in res­pondent’s
threshing machine. In a resolution dated March 15, 1966, we stated, however,
that said injunction “does not authorize the threshing of the landowner’s share
of the harvest by any other party – unless he consents.”

On March 21, 1966,
respondent filed a motion to declare six (6) petitioners – Graciano Espiritu,
Gavino de la Cruz, Maria Bunag, Bonifacio Santos, Julian Garcia and Bernardino
Crisos­tomo – and their counsel guilty of contempt, because, on March 14 and
15, 1966, said petitioners, “aided and abetted by their counsel, Atty.
Romerico Flores, who proded them, ” had al­legedly “threshed not only
their share of the palay harvest, but even that of the landowner, ” in
violation of said resolution of March 15, 1966. 
Although it would seem that the threshing made on March 14, 1966, of the
harvest of petitioners Gavino de la Cruz, Maria Bunag, Bonifacio Santos and
Bernardino Crisostomo, had been carried out without segregating the portion
pertaining to the rentals due to respondent, it appears from petitioners
answer, dated April 5, 1966, to
said urgent motion of
respondent, that the latter’s share as rentals due from said petitioners, was
deposited in a bonded warehouse, in view a the failure of
respondent or his overseer to receive said share, and that, upon notice of said
resolution, in the afternoon of March 15, 1966, such portions of the stacks of
palay of the other petitioners as sufficed to pay the ren­tals due from them
were threshed in respondent’s threshing machine.

It is true that in respondent’s omnibus motion of April 20, 1966, he alleges that
the petitioners therein named were short in the payment of rentals by the
amount specified after their respect­ive
names;^[4] but,
then, petitioners maintain, in their “comment” dated May 21, 1966,
that, the day before, they had judicially con­signed in CAR No. 1385-Bulacan
66, the amount of palay claimed by respondent herein, and respondent has not
controverted this allegation.

It is clear from the
foregoing that the alleged violation of our resolution of March 15, 1966, took
place before notice thereof, and that, accordingly, the motion to declare some
of the petitioners and their counsel guilty of contempt should be as it
is hereby denied.

WHEREFORE, the decision appealed from is reversed and
another one shall be entered, in favor of petitioners herein, with costs
against respondent, Jesus F. Castro, and the writ of preliminary injunction
issued by this Court is hereby made permanent.

IT IS SO ORDERED.

Reyes, Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.

^[1]
Otherwise known as the Agricultural Land Reform Code.

^[2]
See Section 2 of the Act.

^[3]
See Sections3(1) and 5 of the Act.