MIGUEL B. CARAG, PETITIONER, VS. COURT OF APPEALS, LEOCADIO IBAY, RESPONDENTS.

This is a petition for review on certiorari of the decision
of the Court of Appeals which affirmed in toto the
decision of the trial court declaring the existence of a landholder-tenant
relationship and nullifying the judgment rendered by the municipal court in
favor of herein petitioner for lack of jurisdiction.

The petitioner contends that the appellate court committed an
error of law in:

1. Concluding that respondent Leocadio Ibay is an agricultural
tenant, although he admitted that he employed laborers since his commencement
as a lessee over the land in question and in all phases of work;

2. Concluding that this case falls under
the exclusive jurisdiction of the Court of Agrarian Relations as provided in
Sec. 7, Republic Act No. 1267, and;

3. Affirming in toto
the judgment of the trial court.

The facts of the case as found by the Municipal Court of Solana, Cagayan are as follows:

“xxx
Plaintiff is the registered owner of a certain parcel of land situated at Finulu-­Cabaritan, Solana, Cagayan
identified as Lot 8137-C of the Solana Cadastre with an
area of 25 hectares, more or less, covered by Transfer Certificate of Title No.
T-5727, more particularly described as follows:

‘Lot No. 8137-C, bounded on the N. by Lot
8137-B on the E. by Lot 8394; on the S. by Lot 8136 (heirs of Alejandro Cuntapay) and on the W. by Ammanuitan
Creek, containing an area of twenty five (25) hectares, more or less, assessed
in the sum of P13,330.00 under Tax Dec. No. 11019 and
covered by Transfer Certificate of Title No. T-5727;’

“Sometime in 1955, Tomas Carag, the
father of Plaintiff herein and at the same time his overseer on the
above-described land, entered into a verbal contract of lease whereby he leased
to the defendant-lessee, Leocadio Ibay
the western portion of said land covering 11 hectares with the condition that
there would be no rental on the land for the first 3 years of the lease and
that after the third year, the rental would be at 70-30 share basis.

“In 1961 there was yet another verbal contract of lease
between the same parties with the following conditions:  (1) Lessee, the herein defendant, would pay
as rental to the lessor 15 cavans
of palay per hectare for the main crop and (2) 10 cavans of palay per hectare for
the second crop on the 11 hectares of land leased.

“All rentals on the land leased were fully paid except the rentals
corresponding to the crop year 1970-71 which was paid in part, the plaintiff
having received 130 cavans of palay
from defendant, leaving a balance of 35 cavans unpaid
rentals from the main crop.

“Defendant has actually planted the land to second crop of palay during the month of May, 1971 and has not paid the
plaintiff the rental due thereon at 10 cavans per
hectare or 110 cavans for the 11 hectares.” (Record of Exhibits, pp. 14-15).

Respondent Ibay refused to surrender
possession of the land leased to petitioner Carag
despite repeated demands from the latter. 
Hence, on April 2, 1971,
the petitioner as plaintiff filed a complaint for unlawful detainer
with damages before the above?mentioned municipal court against herein
respondent as defendant.

The defendant denied the amount of rentals and set up as defense
that he would not vacate the land unless reimbursed for P20,000.00
worth of improvements he had introduced. 
In his counter-claim Ibay claimed
reimbursement for the P20,000.00.  There was absolutely no mention of the fact
that he was supposed to be a mere tenant.

“In the ocular inspection conducted by the Court on the land
in question, it was found that defendant made improvements such as a bodega 8 x
10 feet long with G.I. roofing, the one third portion of which was covered by
concrete hollow blocks and valued at P1,500.00 at the
time it was constructed.  There is also
an irrigation system of canals and ditches which defendant introduced as
improvement but which made it possible for the defendant to have second crop
plantings and harvests.  The land was
naturally irritated by the construction of a dam on the Pelagamut
and Salamagui Creeks.” (Record
of Exhibits, p. 16).

While jurisdiction was not raised and was never in issue, the
trial court ruled that there was no agricultural leasehold relationship between
the plaintiff and defendant in order to determine the applicable law.  Hence, it ruled that the provi­sions of the
Civil Code on civil lease applied in the case at bar.  It then proceeded to rule against respondent Ibay ordering him, inter alia, to
vacate the land in question.

Said Decision became final and executory.  A writ of execution was issued on March 14, 1972.

On March 21, 1972, before the decision could be executed,
respondent Ibay filed before the then Court of First
Instance of Cagayan an action to annul the decision
with preliminary injunction the ground that due to the existence of an agricul­tural
leasehold relationship between the parties, the municipal court had no
jurisdiction to hear the case, the same being within the original and exclusive
jurisdiction of the Court of Agrarian Relations.

The court of first instance ruled in favor of respondent Ibay, declaring the decision rendered by the municipal
court as null and void for lack of jurisdiction.  On appeal, the respondent appellate court
affirmed in toto the lower court’s
decision.  Hence, the
present petition.

The sole issue to be resolved in the present petition is whether
or not a tenancy relationship exists between the parties.

The petitioner insists that Ibay was a
civil lessee.  He alleges that there was
no existing tenancy relationship between them, absent the element of personal
cultivation.  Ibay
himself admitted that he did not personally cultivate the land in question; instead
he hired laborers.

On this point, the respondent Court stated that:

“xxx It is
very true that the plaintiff admitted while on the witness stand on July 14, 1972 that he used to employ
laborers in the cultivation of the land. 
This must be so only recently because of the big parcels of land he has
to cultivate but this does not change the situation and concept that the
defendant is an agricultural tenant or lessee of the property in question and
not a mere civil law lessee as claimed by the defendant.” (Rollo, pp. 22-23).

Furthermore, the respondent court adopted the trial court’s
observation that:

“Conceding that plaintiff does not now personally cultivate
the land, such failure is simply an infringement committed after the agreement
was consumated and implemented.  The failure therefore, cannot be utilized or
considered as a factor to determine what that agreement is, whether it is a
civil lease or tenancy relationship.  It
may be, nonetheless, a ground to rescind the agreement.” (Rollo, p. 24).

The Agricultural Tenancy Act which is the law applicable to the
alleged tenancy relations of the landholding in question defines
“agricultural tenancy” as –

“xxx 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.” (Sec. 3, R.A.
No. 1199; 50 O.G. 4655-56).

In the case of Matienzo v. Servidad (107 SCRA 276) we defined a tenant, pursuant
to section 5(a) of Republic Act No. 1199, as a person who, himself, and with
the aid available from within his immediate household, cultivates the land
belonging to or possessed by another, with the latter’s consent for purposes of
production, sharing the produce with the landholder under the share tenancy
system, or paying to the landholder a price certain or ascertainable, in
produce or in money or both, under the leasehold tenancy system.

Moreover, Sec. 5(o) of Rep. Act No. 1199 provides:

“Immediate farm household includes the members of the family
of the tenant, and such other person or persons, whether related to the tenant
or not, who are dependent upon him for support and who usually help him operate
the farm enterprise.”

It can be gathered from the above definitions that the essential
requisites of a tenancy relation­ship are: 
(1) the parties are the landholder and the tenant; (2) the subject is
agricultural land; (3) there is consent; (4) the purpose is agricultural
production; (5) there is personal cultivation; and (6) there is sharing of
harvests.  (See Tiongson v. Court of Appeals, 130 SCRA 482; Guerrero v.
Court of Appeals, 142 SCRA 136).

The petitioner raises as a main issue
that the fifth requisite namely personal cultivation, is lacking in their
disputed relationship.

The respondent admitted hiring laborers to work in the land in
question when he testified:

“Q.  And
from the time you took possession of the land in question up to the present,
you use laborers.  That is correct?

“A.   Yes,
sir.

“Q.  And
that includes also the pulling of the seedlings, preparation of the seedbeds
and up to the planting, Is it not?

ATTY. AQUINO:

Objection.  Imagine if we go to planting of the seedbeds
and harvesting…

“COURT:

The witness admits that he employs
laborers.

“ATTY. MALLONGA:

“Q.  Of course in the
harvesting of palay, you again employ laborers to do
the harvesting as well as the bundling?

“ATTY. AQUINO:

Objection, bundling is…

“COURT:

He employs seven.  He employs laborers.

“ATTY. MALLONGA:

“Q.  And you employ seven
persons, ten persons

“ATTY. AQUINO:

Objection, already answered.

“ATTY. MALLONGA:

I am asking the minimum laborers he
employs.

“ATTY. AQUINO:

The question asks for ten laborers.

“COURT:

Will you please…

“ATTY. MALLONGA:

I am asking clarification if he might
employ more than seven up to ten?

“COURT:

According to the witness, he employed
already seven.

“ATTY. MALLONGA:

I am asking if he employs more than seven,
although he admits employing laborers.

“COURT:

“Q.  In employing seven
laborers, how did they work during the whole year of cultivation?

“A.   They harvest, plant
and everything that is worked on the land.

“ATTY. MALLONGA:

“Q.  And you pay your
laborers fifteen cavans each yearly (sic) for working
on the land?

“ATTY. AQUINO:

That constitute a contestible issue, so I object to the question.

“ATTY. MALLONGA:

If he is not working, he is a civil lessor.

“COURT:

He
admits that he works and pays his laborers under the minimum wage law.”

(TSN, July 28, 1972, pp.
10-12).

From the definition of a tenant and the admis­sion made by
respondent, it is clear that absent the important factor of cultivation, no
tenancy relationship had ever existed between the parties.

There may have been sharing of harvests but such is not a
positive indication of the existence of tenancy relations per se as it must be
taken together with other factors characteristic of tenancy.  (Guerrero v. Court of
Appeals, supra).  The fact
that the respondent never raised the issue of tenancy when he filed the answer
to the ejectment complaint is signifi­cant.  To a genuine tenant, that would have been the
first thing to come to mind.  He thought
of raising the issue of tenancy only when the decision was being executed and
he countered with the complaint to annul the municipal court’s decision.  The total area leased to Mr. Ibay in 1955 by the petitioner and one Florencio
Cuntapay and Angel Carag
was 40 hectares.  (Decision of Municipal
Court of Solana, p. 3; Record of Exhibits, p. 16; T.S.N., July 14, 1972, pp. 30
and 38).  The area alone is indicative of
a civil lease.  There are other circumstances
of this case showing there is no agricultural landlord-tenant between the
parties but above, are sufficient.

There appears to be no dispute over the factual findings of the respondent
court of Solana, Cagayan regarding the claim of the
petitioner for damages.  The dispositive portion of the decision of the municipal court
reads:

“In view of the foregoing, the court hereby renders judgment
(1) ordering defendant to vacate the land in question and return the material
possession thereof to the plaintiff; (2) ordering the defendant to pay the
plaintiff 35 cavans of palay
at 46 kilos per cavan representing the unpaid balance
of the rental for the regular crop year 1970-71; (3) ordering the defendant to
pay the plaintiff 110 cavans of palay
at 46 kilos per cavan covering the rental for the
second crop for the year 1971; (4) ordering the defendant to pay 165 cavans plus 110 cavans for the
regular and second crop or a total of 275 cavans of palay at 46 kilos per cavan by
way of annual rentals during the pendency of this
action until said land is restored to the possession of the plaintiff; (5)
ordering the defendant to remove his bodega if plaintiff do not chose to
exercise his option of paying 1/2 of P1,500.00 value at the time of
construction of said bodega; and (6) ordering the defendant to pay plaintiff
P500.00 for attorney’s fees and pay the costs of this suit.” (p. 20, Original Record on Appeal).

WHEREFORE, the decision of the appellate court is hereby
SET ASIDE.  The decision of the Municipal
Court of Solana, Cagayan is reinstated and should be
executed immediately.

SO ORDERED.

Fernan, (Chairman), Paras, Padilla, Bidin, and Cortes, JJ., concur.