FRANCISCO NOVESTERAS, PETITIONER, VS. THE HON. COURT OF APPEALS AND FABIO RAMOS, RESPONDENTS.

This is a petition for
review on certiorari of the decision of respondent Court of Appeals
in CA-G.R. No. 00592-R* affirming the decision of the Court of
Agrarian Relations of Paniqui, Tarlac,
the dispositive part of the Agrarian Court’s decision
reading –

“WHEREFORE, the Court hereby declares that Exhibits ‘5’, ‘6’
and ‘7’ together with Exhibits ‘6-A’, ‘6-1’ and ‘7-A’, ‘7-1’, are contracts of
civil law lease, under the provisions
of the Civil Code, thus, the relationship created by the plaintiff Francisco Novesteras and Fabio Ramos over the land­holding in
question is purely of a civil law lease contract under the Civil Code and not
under the provisions of Rep. Act No. 1199 and Rep. Act No. 3844, hence, there
is no agricultural tenancy relationship between the plaintiff Francisco Novesteras and defendant Fabio Ramos.

“Consequently, this case is hereby dis­missed for lack of
jurisdiction of the Court on the subject matter of this action.”

The facts of the case are
as follows:

Petitioner was share
tenant of private Respondent over two parcels of land
situated in Barrio Bawa, Gerona, Tarlac with an
area of 3.3491 ha. more or less, for one agricultural
year.  At the end of such year,
Respondent entered into a contract with Rosendo Porlucas denominated as a contract of civil lease over the
same parcels of land for the following crop year for a consideration of P1,400.00 in cash (Exh.
“5”).  Porlucas
did not farm the land himself but left it to Petitioner to till the land as his
tenant, planting palay and sugar on it during said
crop year.  After the expiration of the
contract between Respondent and Porlucas, the latter
surrendered the landholding to Respondent after which a three-year contract,
renewable for another three years, depending upon the will of the lessor, was entered into between Petitioner and Respondent,
also denominated as contract of civil lease over the same parcels of land, in
consi­deration of which Petitioner was to pay Respondent 60 cavans
of palay of first class variety, such as BE-E, Concehala or
wagwag, dikit, raminad, etc.,
47 kilos per cavan or its equivalent in cash at
the rate of P20.00 a cavan, not later than
February 14 of each year.  Peti­tioner was to shoulder the
irrigation fee (Exhibit “6”). 
It appears that Petitioner gave as security a certain parcel of land
under Declaration No. 1234 situated at Dawa, Gerona, Tarlac, to answer
for any failure on his part to pay the rentals plus 12% interest a month (Exh. “6-A”, Rollo,
p. 5).  The lease was renewed for another three
agricultural years, renewable for another term of three years (Exh. “7”). 
However, respondent informed petitioner in a letter that the former was
no longer amenable to a renewal.

Immediately after the
expiration of the contract, Respondent entered and plowed the land by tractor
and planted 1-1/2 has. of the land with sugar cane
shoots.  Petitioner also planted sugar
cane on a portion of the land plowed by Respondent.  Thus in another letter, Respondent reminded
Petitioner of the expiration of their contract of lease and that the latter had
nothing more to do with the land. 
Respondent reiterated that he was against renewal of the lease for
another three years (Exh. “9”).

Petitioner eventually
filed an action in the Court of Agrarian Relations of Paniqui,
Tarlac, for the main­tenance of the plaintiff
(Petitioner herein) by the defendant (private Respondent herein) in the
peaceful possession and enjoyment of the two parcels of land in question with a
prayer that pending the litigation an interlocutory order be issued for
the purpose (Rollo, p. 14).  Respondent, on the other hand, filed a motion
with the same court for the issuance of an interlocutory order enjoining
Petitioner from entering the land and maintaining him in the possession of the
land in question.  In his Answer with
counterclaim, filed with the Court of Agrarian Relations, Respondent prayed
that judgment be rendered declaring the contract between Petitioner and
Respondent one of civil law lease and therefore said Court had no jurisdiction
over the case, ordering the plaintiff to pay to the defendant P2,000.00 as
moral damages and P500.00 as attorney’s fees, on the basis of defendant’s
counterclaim; and maintaining the possession of the defendant over the
landholdings in question (Rollo, p. 16).  The Court of Agrarian Relations issued an
Order declaring the contract between Petitioner and Respondent as a contract of
civil law lease and dismissed the case for lack of jurisdiction (Rollo, p. 23).  On
appeal, res­pondent Court affirmed the Order of the trial court in its decision
with the following decretal portion –

“WHEREFORE, there being no reversible error in the decision
appealed from, we hereby AFFIRM the same.”

Petitioner’s motion for reconsideration (Rollo, p. 86) was denied by Respondent
Court.  Thus, this Petition for Review on certiorari.

The Court resolved to
give due course to the petition (Rollo, p. 103).

On Respondent’s death, he
was substituted by his heirs.

The assigned errors
follow:

I

THE COURT OF APPEALS
ERRED IN UPHOLDING THE FINDING OF THE COURT OF AGRARIAN RE­LATIONS THAT
PLAINTIFF WAS NOT DULY INS­TITUTED AS TENANT BY ROSENDO PORLUCAS ON THE
LANDHOLDING IN QUESTION IN RELA­TION TO EXHIBIT “5” x x x.

II

THE COURT OF APPEALS
ERRED IN UPHOLDING THE ORDER OF THE COURT OF AGRARIAN RE­LATIONS FINDING THAT
UPON THE EXPIRATION OF THE LEASE CONTRACT BETWEEN DEFENDANT AND ROSENDO PORLUCAS, FRANCISCO NOVESTERAS
WAS SUBROGATED BY ROSENDO PORLUCAS AS A CIVIL LESSEE.

III

THE COURT OF APPEALS
ERRED IN UPHOLDING THE FINDINGS OF THE COURT DECLARING THE CONTRACT ENTERED
INTO BETWEEN DE­FENDANT-APPELLEE AND ROSENDO PORLUCAS MARKED AS EXHIBITS
“6” and “7” TO BE A CIVIL LAW LEASE CONTRACT AND NOT AN
AGRICULTURAL LEASEHOLD CONTRACT.

IV

THE COURT OF APPEALS
ERRED IN UPHOLDING THE FINDINGS OF THE COURT OF AGRARIAN RELATIONS DISMISSING
THE COMPLAINT FOR LACK OF JURISDICTION.

The sole issue that must
be resolved by the Court is the question of whether or not agricultural tenancy
rela­tionship was established between the Petitioner and the Respondent in
relation to the landholding in question.

The answer is in the
affirmative.

It is undisputed that
during the original agricultu­ral year, Petitioner was share tenant of
Respondent (Rollo, p. 19) but respondent claims that
at the end of the agricultural year, Petitioner returned the landholding. 
This is, however, denied by Petitioner who testified during the hearing
of the case in the Court of Agrarian Relations that from the time he
began to work on the landholding during the Japanese Occupation up to the time
when the relationship between him and respondent was changed to leasehold, he
continuously worked on the landholding in question.  This is corroborated by Porlucas
who testified that he did not farm the land himself.  Just after the execution of the contract
between him and Respondent, Petitioner told him that he (Petitioner) would be
the one to till the land.  In fact, Petitioner worked on,
cultivated and planted on the landholding and harvest­ed the crops.  Furthermore, it is highly improbable that
Petitioner who had been working on the land throughout the years would
voluntarily return the land to his land­lord to be given to a civil lessee, and
then ask the lessor to be allowed to till the landholding in question.

With the advent of the
Agricultural Land Reform Code the share tenancy relationship between Petitioner
and Respondent had to end.  It was
replaced by agricultural leasehold tenancy.  The
Code provides that “where the agricultural share tenancy has ceased to be
operative by virtue of this Code. . . and the tenant
continues in possession of the land for cultivation, there shall be presumed to
exist a leasehold relationship under the provisions of this
Code…” (Sec. 4, Republic Act No. 3844). 
Such leasehold relation with Respondent conferred upon Petitioner the
right to continue working on the landholding until the leasehold relation is
extinguished and it entitled him to security of tenure on the landholding such
that he cannot be ejected therefrom unless authorized
by the Court for causes provided in the Code (Sec. 7 of the Code).  Tenants are guaranteed security of tenure, meaning the continued enjoyment and
possession of their landholding except when their dispossession has been
authorized by virtue of a final and executory
judgment (Catorce v. Court of Appeals, 129 SCRA 210
[1984]).

Assuming, for the sake of
argument, however, that Petitioner, ignorant of his rights under the then newly passed Agricultural
Land Reform Code, returned the land­holding to Respondent, nevertheless, it is
undisputed that Petitioner was instituted as tenant over the same landholding
by Rosendo Porlucas with
whom Respondent had entered into a contract of civil law lease (Exh. “5”). 
Even after the expiration of the lease agreement between Respondent and Porlucas and the return of the landholding to Respondent,
the security of tenure of Petitioner as tenant over the landholding remained
secure.  In the case of Joya v. Pareja, 106 Phil. 645
(1959) which also involves a civil law lease of agricultural land, the Court
ruled:

“It is our considered judgment, since the return by the lessee
of the leased property to the lessor upon the
expiration of the contract involves also a transfer of legal possession, and
taking into account the manifest intent
of the lawmaking body in amending the law, i.e., to provide the tenant with
security of tenure in all cases of transfer of legal possession, that the
instant case falls within and is governed by the provisions of Section 9 of
Republic Act 1199, as amended by Republic Act 2263.  The termination of the lease, therefore, did not divest the
tenant of the right to remain on and continue his cultivation of the
land.”

The Agricultural Tenancy Act of 1954
(Republic Act 1199), the Agricultural Land Reform Code of 1963 (Republic Act
3844), the Code of Agrarian Reforms (Republic Act 6389), all provide for the
security of tenure of agricultural tenants (Guerrero v. Court of Appeals, 142 SCRA 136
[1986]; Aisporna v. CA, 108 SCRA 481 [1981]; Matienzo v. Servidad, 107 SCRA
276 [1981]).

Already
enjoying security of tenure as share tenant of Respondent before the approval
of the Agricultural Land Reform Code and as tenant of Porlucas,
notwithstand­ing, Petitioner entered into a lease contract with Respondent for a period of three agricultural years (Exh. “6”) which was renewed for another three agricultural
years (Exh. “7” and
“7-J”), denominated as contract of civil law lease.  The trial court rightly cited the case of Japitana v. Hechanova (90 Phil.
750 [1952]) wherein the Court ruled: 
“that the juridical character of the relationship between the
appellant and the appellee should not be determined
by the term used to describe such relationship” (Rollo,
p. 43).  It nonetheless erroneously
concluded that the contracts of lease between Petitioner-Respondent was a civil
law lease based on its
observation that Plaintiff simply stepped into the shoes of Porlucas
in the latter’s capacity as mere lessee of the landholding and voluntarily
changing his status from tenant to mere civil law lessee (Rollo,
p. 45).  Respondent Court agreed with the
court a quo  (Rollo, p. 100).

Be it noted that, as ruled by the Supreme Court, the title, label
or rubric given to a contract cannot be used to camouflage the real import of
an agreement as evinced by its main provisions. 
Moreover, it is basic that a contract is what the law defines it to be, and not what it is called by the contracting
parties” (Teodoro v. Macaraeg,
27 SCRA 7 [1969], citing Quiroga v. Parsons Hardware
Co., 38 Phil. 501).

A tenant is defined under 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 (Matienzo v. Servidad, 107 SCRA
276 [1981]).  This Court has synthesized
the principal elements of a leasehold tenancy contract or relation as
follows:  (1) The object of the contract
or the relationship is an agricultural land which is leased or rented for the
purpose of agricultural production; (2) the size of the landholding must be
such that it is susceptible of
personal cultivation by a single person with assistance from the members of his
immediate farm household; (3) the tenant-lessee must actually and per­sonally
till, cultivate or operate said land, solely or with the aid of labor from his
immediate farm household; and (4) the landlord-lessor,
who is either the lawful owner or the legal possessor of the land, leases the
same to the tenant lessee for a price certain or ascertainable either in an
amount of money or produce (Teodoro v. Macaraeg, 27 SCRA 7 [1969]).

There is no doubt that
the contract between Respon­dent and Porlucas is not
a leasehold tenancy contract as it does not fulfill the requirements of
one.  Porlucas never had the intention of cultivating the
landholding personally, in fact, Petitioner cultivated
the land as his tenant (TSN, July 17, 1971, pp. 21, 26).  The con­tracts entered into between
Petitioner and Respondent are of a different nature.  Petitioner leased the land­holding for the
purpose of agricultural production.  He
was a farmer and had no need for the landholding except to cultivate it as he
had done in the past.  In fact, that
must have been the expectation also of Respondent in requiring Petitioner to
pay for the rental 60 cavans of palay
of first class variety such as BE-3, Concehala or Wagwag, Diket or Raminad (TSN, July 17, 1971, p. 38).  Petitioner personally cultivated the land; he
never allowed somebody else to work on the landholding (TSN, July 17, 1971, p.
43).  The consideration was in an
ascertainable amount, 60 cavans of palay during each agri­cultural year.  Both contracts (Exh. “6” and Exhs. “7” and “7-J”) satisfy the
basic requirements of an agricultural leasehold tenancy contract.  Petitioner, being a de jure tenant-lessee, is entitled to invoke the secu­rity
of tenure guaranteed by the Agricultural Tenancy Law (R.A. 1199), the
Agricultural Land Reform Code (R.A. 3844), which security has not been
abolished by the Code of Agrarian Reforms or R.A. 6389 (Matienzo
v. Servidad, 107 SCRA 276 [1981]; Aisporma
v. Court of Appeals, 108 SCRA 481 [1981]; Guerrero v. Court of Appeals, 142
SCRA 136 [1986]).  The status of
Petitioner as tenant-lessee is thus established on three counts, as
existing.  Petitioner is still in
possession of the landholding in question (Rollo, p.
24).

PREMISES CONSIDERED, the decision of Respondent
Court is hereby REVERSED and SET ASIDE, and the
contract of lease entered into between Petitioner and Respondent (Exh. “6” and Exhs. “7” and “7-J”) is hereby
declared as an agricultural leasehold contract.

SO ORDERED.

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

* Penned by Justice Luis B. Reyes
concurred in by Justices Hermogenes Concepcion Jr. and Andres Reyes.