EUNARIA B. VDA. DE GUILAS, DOMINGO B. GUILAS, TRINIDAD G. TATLONGHARI, EDUARDO B. GUILAS, LUISA G. ZARAGOSA, FEDERICO B. GUILAS, CECILIANO B. GUILAS, JR., NICOMEDES B. GUILAS, F…

Appeal from a decision of
the Court of Agrarian Relations.

It appears that
petitioners are co-owners of a parcel of riceland,
situated in the barrio of San Matias, Guagua, Pampanga, which, since October 1962, was under cultivation by
respondent Ananias David, as petitioners’
tenant.  Sometime in 1963, David sold his “right to work” on the land,
to respondent Rosallo^[1] Mercado, who, thereupon, planted
thereon.  Since the
sale and the planting had been made without the knowledge and consent of petitioners, who were unwilling to have Mercado as tenant, in substitution of David, on November
1, 1963, David Mercado and petitioner Eunaria B. Vda. de Guilas – evidently
acting for the benefit of herself and her
co-owners – exe­cuted an “agreement,” in the Pampango
dialect, Annex A, which, translated into English, stipulated:

“1.- THAT I, ANANIAS DAVID is the
former tenant in share of the landholding of EUNARIA B. VDA. DE GUILAS, situated in the barrio of
San Matias, Guagua, Pampanga, but I do admit to have sold my rights as such tenant in favor of ROSALIO MERCADO without
any permission nor consent of
the landholders and for that reason the latter or Rosalio Mercado was the one who planted the said parcel of land, which will be harvested
this coming month of January 1964,
more or less;

“2.-
THAT in order that this matter will not be brought farther to the proper
authori­ties or court, we the
undersigned agreed to the following:

a) THAT I, ROSALIO MERCADO will harvest only the present crop and after harvesting it in January 1964, I will deliver and
return to the landholder EUNARIA B. VDA. DE GUILAS the aforesaid landholdings
with full authority and right to have it tenanted or leased to others; provided, however, that their
corresponding share on the crop to be harvested shall be delivered to them
after deducting the deductible expenses from the gross harvest;

b) THAT I, ANANIAS DAVID do admit my fault and for that reason I do
voluntary surrender my aforesaid work on this landholdings and do give full
authority and right to the owners thereof to find a new tenant in my place; provided furthers, that the consideration I received from ROSALIO
MERCADO in the sale of my rights to him, I bind to return the same to Rosalio
Mercado without the owners having
anything to do on this matter; likewise, I, ROSALIO MERCADO do hereby
accept this request of Ananias David with respect to
the return of the amount I paid to him;

“3.– THAT I, EUNARIA B. VDA. DE
GUILAS do hereby accept all that appears in this agreement and for that reason
I will desists in bringing the
matter to the court as herein stated.”

Subsequently, or on March
11, 1964, petitioners instituted the present CAR Case No. 17-P-’64, against David and Mercado for ejectment with injunction, in view of Mercado’s failure to surrender the
land after harvesting the crop in January 1964, in violation of the
aforementioned agreement.  David did not
care to contest the complaint and was declared in default.  Mercado, however, filed an answer, dated May 8, 1964, admitting some
allegations of the complaint, denying other allegations thereof and alleging, by way of special and affirmative
defenses:  1) that, before beginning to
work on the land in question, he informed one Eduardo Guilas
about it; 2) that Annex A does not reflect the true intent of the parties
thereto; and 3) that “an
agreement on future surrender is not enforceable in law.”

Called for pre-trial,
on September 29, 1964, counsel for
petitioner and that of Mercado agreed on a partial stipulation of facts,
without prejudice to introducing evidence at the hearing of the case on the
merits.  On November 27 1964, –
seemingly, after the presentation of petitioners’ evidence – Mercado filed a
motion to dismiss – with reservation of the “right to x x x adduce evidence in support of
his defense,” should the motion be denied – for the reason that “the
alleged agreement to surrender the landholding in the future (January, 1964) is
not one of the grounds for ejecting a tenant.” Despite
petitioners’ objection to the motion, the Court of Agrarian Relations granted
it and dismissed the case.  Hence, this
petitions for review.

The order sought to be
reviewed is based upon Section 50 of Republic Act No. 1199, as amended (on
which Section 36 of Republic Act No. 3844 is
based), pursuant to which a tenant
may not be dispossessed of his landholdings, except upon one of the following
grounds:

“(a) The bona fide
intention of the land?holder-owner or his relative within the first
degree by consanguinity to cultivate the land himself personally or through the
employment of farm machinery and implements: 
x x x.

“(b) When the tenant violates or fails to comply with any of
the terms and conditions of the contract or any of the provisions of this
Act:  x x x.

“(c) The tenant’s failure to pay the
agreed rental or to deliver the landholders share:  x x x.

“(d) When the tenant uses the land for a
purpose other than that
specified by agreement of the parties.

“(e) When a share-tenant fails to follow those proven farm practices which, as
determined by the Court of Agrarian Relations will contribute towards the
proper care of the land and increased agricultural production.  x x
x.

“(f) When the tenant through negligence
permits serious injury to the land which will impair its productive capacity.

“(g) Conviction by competent court of a
tenant or any member of his
immediate family or farm household of a
crime against the landholder or a member of his immediate family.”

Obviously, this provision
would not be applicable to the case at bar if Mercado were not petitioners’ tenant
at the time relevant to the present case. 
In this connection, the lower court found:  a) that the sale made by David, of his right
to work on the land in question, as tenant of the petitioners, in favor of Mercado, did not bind the petitioners, said conveyance having been made without their knowledge and consent, and b) that, accordingly, the
relationship of landowner and tenant was not thereby established between
the petitioners and Mercado.  Said Court
held, however, that the relationship
came into being in consequence of
the agreement, Annex A, because petitioners had thereby consented to the
continuation of Mercado’s possession up to January 1964.  This conclusion, drawn from
Annex A, is untenable.

Said agreement was
executed precisely because the petitioners
were unwilling to take Mercado as tenant, and
because the former were legally
entitled to sue the latter for
usurpation of possession and to have him, accordingly, ejected, since his
contract with David was not binding upon them. 
In consideration of petitioners’ desistance from “bringing the
matter to the court,” Mercado agreed to “harvest only the present
crop and after harvesting it in January 1964, I will deliver and
return to the landowner x x x the aforesaid landholdings.” Mercado
entered into this agreement, not because petitioners had acquiesced to his
possession, but, precisely, because they insisted and persisted
in their opposition thereto. 
Annex A was simply a compromise
agreement, whereby,
without giving up their aforementioned opposition, petitioners refrained
from suing Mercado, owing to his promise to vacate the land in January, 1964.

Pursuant to Article 2037 of our Civil Code, said
“compromise has upon the
parties the effect and authority of res adjudicata,” even if not judicially approved.^[2] Upon its non-compliance by Mercado,
petitioners are explicitly authorized by Article 2041 of the same Code to “either enforce the compromise or regard it as rescinded.”

WHEREFORE, the
order appealed from should be, as it is hereby, reversed, and the case remanded
to the lower court for further proceedings, with the costs of this instance against respondent Rosallo Mercado.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro, and Angeles, JJ.,
concur.

^[1]
Rosalio (?)

^[2]
Meneses vs. De la Rosa 77 Phil., 34.