COCONUT COOPERATIVE MARKETING ASSOCIATION, INC. (COCOMA), PETITIONER, VS. COURT OF APPEALS, PEDRO COSICO, HERMOGENES COSICO AND LUCAS COSICO, RESPONDENTS.

Coconut Cooperative Marketing Association versus Court of Appeals

The Case

This is a petition for review on certiorari brought by the Coconut Cooperative Marketing Association, known as COCOMA, against the Court of Appeals and the three Cosico brothers, Pedro, Hermogenes, and Lucas. The private respondents claimed to be share tenants of a fifteen-hectare coconut landholding in Calauan, Laguna, and the Court of Agrarian Relations agreed, declaring Pedro and Hermogenes lawful tenants and ordering COCOMA to reinstate them, pay their shares, and render an accounting. COCOMA insists it is a mere marketing agent and that the Cosicos were hired caretakers paid in cash, not tenants. The case matters because it draws the dividing line between a share tenant and an agricultural wage worker, and because it teaches that a juridical person who holds legal possession of agricultural land can itself be a landholder answerable to tenants.

Procedural History

On the ninth of October, 1971, the three Cosico brothers each filed a separate complaint with the Court of Agrarian Relations, docketed as three agrarian cases, originally against Rosario Paraiso Vda. de Fule and the Villa Escudero Corporation, and later amended to include COCOMA as a defendant. On the twenty-sixth of January, 1976, the Court of Agrarian Relations rendered a joint decision declaring Pedro Cosico and Hermogenes Cosico true and lawful tenants of COCOMA over four hectares each, declaring Hermogenes also the tenant of the four hectares claimed by Lucas, declaring that no tenancy existed between COCOMA and Lucas, ordering reinstatement and a seventy-thirty sharing in favor of COCOMA, ordering payment of twenty-eight thousand nine hundred ninety-four pesos as the thirty percent share from November 1971 to June 1975, ordering an accounting thereafter, and awarding four thousand pesos in litigation expenses. COCOMA appealed to the Court of Appeals, which on the nineteenth of May, 1977 affirmed the agrarian court in full, finding the decision in accordance with law and supported by substantial evidence. COCOMA then came to the Supreme Court by petition for review on certiorari.

Facts

The coconut land in Barrio Imok, Calauan, Laguna, about fifteen hectares, belonged to the spouses Pedro Rulloda and Salud Sanchez. From 1964 up to 1971, Rosario Paraiso Vda. de Fule held legal possession under a yearly contract of sale of all the coconut produce, known as a pakyaw. In 1972 she did not renew, and the spouses entered a similar yearly contract with Eddie Escudero, renewed until 1975. During this period Fule used the Cosico brothers as caretakers over four hectares each, paying them in cash equivalent to one-seventh of the proceeds of the coconuts harvested from the portion each cared for. The Cosicos checked the plantation for stealing, reported to Fule, cleared the land with bolos by cutting and burning grass, and allegedly planted coconut and other permanent trees for which they were never paid. Harvesting, gathering, picking, and hauling were done by laborers hired and paid by Fule or her buyer, and when Pedro Cosico was hired to gather coconuts he was paid separately for that labor.

Fule was a member of COCOMA from 1964 to 1972, and Escudero from 1972 to 1975. COCOMA claims it acted as their agent, providing management and marketing services, hiring laborers to harvest and transport the produce, and paying the cleaning and planting expenses through receipts signed by the laborers. After every harvest, COCOMA delivered the proceeds, less expenses, to Fule and then to Escudero under their marketing agreements.

On the ninth of October, 1971, after seven years of receiving wages as hired workers, the three Cosicos began claiming to be tenants of three separate portions of about four hectares each, and filed their agrarian complaints. The agrarian court and the Court of Appeals both found Pedro and Hermogenes to be tenants.

Issues

• Whether or not the private respondents Pedro and Hermogenes Cosico are share tenants of the coconut landholding rather than mere hired agricultural workers.
• Whether or not Hermogenes Cosico may be adjudged a share tenant of the landholding claimed by Lucas Cosico in a separate case to which Hermogenes was not a party.
• Whether or not COCOMA, claiming to be a mere marketing agent, may be held directly liable to the tenants for their share in the coconuts harvested.
• Whether or not the computation of the shares due Pedro and Hermogenes Cosico is patently erroneous.

Applicable Provisions

Section 3 of Republic Act 1199, the Agricultural Tenancy Act, as amended, defines agricultural tenancy:

Agricultural tenancy is the physical possession by a person of land devoted to agriculture, belonging to or legally possessed by another for the purpose of production through the labor of the former and of the members of his immediate farm household in consideration of which the former agrees to share the harvest with the latter or to pay a price certain or ascertainable, either in produce or in money or in both.

This definition supplies the elements the Court tests against the Cosicos' work and their one-seventh share.

Section 4 of Republic Act 1199, echoed in Section 166, paragraph 25, of Republic Act 3844, the Agricultural Land Reform Code, describes share tenancy:

Share tenancy exists whenever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land with the aid of labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant in proportion to their respective contributions.

The joint undertaking and the division of produce are the marks that separate the tenant from the wage earner.

Section 155 of Republic Act 3844 defines the powers of the agrarian court:

The Courts of Agrarian Relations shall be governed by the Rules of Court: Provided, That in the hearing, investigation and determination of any question or controversy pending before them the Courts without impairing substantial rights, shall not be bound strictly by the technical rules of evidence and procedure, except in expropriation cases.

This liberality supports the agrarian court's power to settle the whole dispute, including the landholding claimed by Lucas.

Section 10 of Republic Act 3844 protects the tenancy relation against transfers of possession:

The agricultural leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding. In case the agricultural lessor sells, alienates or transfers the legal possession of the landholdings, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor.

This provision makes COCOMA, as transferee of legal possession, answerable for the tenants' shares.

Ruling

On the first issue, the Court held that the Cosicos are share tenants, not hired workers. The test for an agricultural worker is the employer-employee relationship, whose most important index is the employer's power of control. Here the record showed no such control: the respondents kept no regular hours, worked no shifts, COCOMA could not even recall the number of days they worked each season, and no regulations governed how they performed their duties. The Court also held that cultivation is an important factor in tenancy, and that cultivation is not limited to plowing and harrowing. It includes promoting growth and caring for the plants, and the caretaker of agricultural land can be considered its cultivator. The one-seventh share of the harvest, taken with the other factors, strengthened the finding of tenancy. The Court declined to disturb the factual findings of the agrarian court and the Court of Appeals.

On the second issue, the Court held that Hermogenes may be declared tenant of the landholding claimed by Lucas. The three cases were jointly tried, and the common evidence showed that although Hermogenes and Lucas were supposed to hold four hectares each, both worked the two holdings jointly in their entirety, and only Hermogenes received the tenant's share from the whole. He therefore acted as sole tenant of both holdings. The agrarian court, under Section 155 of Republic Act 3844, was not restricted to the specific relief claimed and could determine any matter necessary to settle the dispute.

On the third issue, the Court held that COCOMA is itself a landholder. It is a juridical person, it holds legal possession with sole management and administration of the land, it authorized the respondents to cultivate it, and it shared the harvest with them. Being a landholder, it is subject to the rights and obligations of agrarian laws, and under Section 10 of Republic Act 3844 the transfer of legal possession from Fule to COCOMA subrogated COCOMA to the obligations of the former landholder.

On the fourth issue, the Court found no compelling reason to depart from the computation of the thirty percent share, it being a finding of fact of the appellate court.

Doctrine

A share tenant is one who physically possesses agricultural land belonging to or legally possessed by another, produces through his own labor, and shares the harvest with the landholder. An agricultural worker, by contrast, is paid wages regardless of profit, and the decisive test is the employer's power of control. Cultivation includes caring for and promoting the growth of plants, so a caretaker of a coconut plantation may be a cultivator and therefore a tenant. A juridical person that holds legal possession and management of agricultural land and shares the harvest is a landholder, and under Section 10 of Republic Act 3844 a transferee of legal possession is subrogated to the obligations of the former landholder. The agrarian court is not bound by technical rules and may rule on matters necessary to settle the dispute.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals in full, holding COCOMA liable to Pedro and Hermogenes Cosico as their landholder.

Remember This

Memorize the line that control, not the label, decides: the caretaker who cultivates and shares the harvest is a tenant, and the agent who holds legal possession is a landholder. Examiners use this case to test the tenant-versus-farm-worker distinction and the subrogation rule in Section 10 of Republic Act 3844.