VALENTIN CAMACHO, BONIFACIO MACARAHAS, ET AL., PETITIONERS, VS. COURT OF INDUSTRIAL RELATIONS, ANGELES CANSON AND TERESA MELGAR DE CARRETERO, RESPONDENT.

This is an appeal from the decision of the Court of Industrial Relations
which reversed that of the Tenancy Law Enforcement Division of the Department of
Justice that ordered a 70 per cent and 30 per cent division in favor of the
petitioners hereinafter deducting from the gross produce the expenses of
harvesting and threshing, the palay planted in the haciendas of the now
respondents located in the Municipality of Sta. Barbara, Pangasinan, during the
agricultural year of 1946-1947.

The decision appealed from declares that the participations of the parties in
this case should be governed, not by the provisions of section 3 of Act No. 34
which amended section 8 of Act No. 4054, as decided by the said Tenancy Division
of the Departure nt of Justice, but by an oral, contract embodying the old
customs of tenancy sharing observed by the parties, in accordance with section 8
of Act No. 4054 which according to the lower court’s theory recognizes the
validity of an oral contract. The grounds on which the Court of Industrial
Relations bases its decision is that, although “the records show that Act No.
4054 had been proclaimed effective in the Province of Pangasinan in January,
1937, Act No. 53 seems to recognize an oral contract inspite of section 4, of
said Act No. 4054;” and there being an “oral contract embodying the old customs
of tenanoy sharing observed by the parties prior to 1945-1946 agricultural
year,” Republic Act No. 34 which amended Act No. 4054 in force in Pangasinan.
since 1937 oan not be applied to tenancy relation between the parties in this
case without impairing the obligations of contract and infringing the
Constitution.

After a mature deliberation, we ere of the opinion, and so hold, that the
decision of the lower court is contrary to law and, therefore, must be reversed.

Section 4 of Act No. 4054 provides that “the contract on share tenancy in
order to be valid and binding shall be in writing, drawn in triplicate in the
language known to all the parties thereto to be signed or thumbmarked both by
the landlord or his authorized representative and by the tenant before two
witnesses, one to be chosen by each party.” But, in view of the provisions of
section 1 of Commonwealth Act No. 53, promulgated on October 17, 1936, which
prescribes that “where a covenant or oontraot made between the owner of land and
a lessee or tenant on share thereof has not been reduced to writing or has not
been set forth in a document written in a language known to the lessee or
tenant, the testimony of such lessee or tenant “shall be accepted as prima
facie evidence on the terms of a covenant or contract,” the lower court
concluded that oral contracts are recognized by law inspite of the provision of
section 4 of Act No. 4054 quoted in the preceding paragraph, and therefore the
oral contract embodying the old customs of tenancy sharing observed by the
parties in this case prior to 1945-1946 agricultural year, was valid in Santa
Barbara, Pangasinan, inspite of the provisions of section 4 of Act No. 4054; and
that the effectivity in Pangasinan of Republic Act No. 34, which amended section
8 of said Act No. 4054 relating to saare basis, started from November I2, 1946,
when the President issued Proclamation No. 14 declaring the provision of Act No.
4054, as amended, to be in full force and effect throughout the Philippines, and
not before.

It is obvious that the conclusions of the lower court that (1) the so called
oral contract between the parties in this case was valid and binding upon the
parties during the agricultural year 1946-1947, and (2) that Republic Act No. 34
amendatory of section 8 and other sections of Act No. 4054 became effective in
Pangasinan on November 12, 1946 the date of the Proclamation, No.14, are
erroneous because they are based on incorrect premises.

(1) The major premise of the first conclusion is not correct. It is
elementary rule that a subsequent general law should not be construed to repeal
or modify a prior special law; and that repeal by implication is not favored,
and therefore the former and subsequent act must if possible, be so construed as
to give effect to both. Hence, Commonwealth Act No. 53 which refers to “covenant
or contract made between the owner of land and a lessee or tenant on share
thereof” in general, and does not mention or make any reference to Act No. 4054
should be construed to apply to tenancy contracts on all other agricultural
products which may be oral, as well as to tenancy contract on rice in provinces
where Act No. 4054 had not yet then made effective by Proclamation in which oral
tenancy contracts were valid; but not in those where said No. 4054 was
proclaimed to be effective and, therefore, oral contracts are not valid and
binding. Because, if in the latter oral contract is not valid and binding, no
amount of evidence of whatever kind can be admitted to prove the legal existence
and terms thereof; and besides it is unconceivable that the Legislature had
intended, for it would be retrogressive, to practically repeal section 4 of Act
No. 4054 enacted for the purpose of preventing serious controversies that may
arise as a result of the conflicting interpretation of verbal contracts and
other agreements affecting rice tenancy between landlords and tenants.

The provisions of Act No. 4054, which provides in its section 4 that an oral
contract or share tenancy is not valid and binding, having been in force in the
province of Pangasinan since January 20, 1937, there could not legally exists an
effective oral contract between the parties embodying the old customs of tenancy
sharing observed by the parties prior to 1945-1946 agricultural year,
and therefore the rice sharing tenancy between the parties must be governed
since the year 1937 by the provisions of section 8 of Act No. 4054 and its
amendments.

(2) The major premise of the other conclusion is also incorrect. Proclamation
No. 14 issued by the President of the Philippines dated November 30, 1946, which
declares the provisions of Act No. 4054, as amended, to be in full force and
effect throughout the Philippines, was obviously intended for territories in the
Philippines in which said Act had not yet been declared in force by Proclamation
Prior to said date, and not to provinces, like Pangasinan, where Act No. 4054
had already been put in force since January 20, 1937, which Proclamation was
never set aside or suspended. It is therefore clear that Act No. 34, amendatory
of said Act No. 4054, became effective ipso facto in Pangasinan since
the date of its passage, September 30, 1946, in which, according to the express
provision of section 4 thereof became effective; because an amendment of a law
being a part of the original which is already in force and effect in a certain
territory, must necessarily become effective therein as a part of the amended
law at the time the amendment takes effect. Section 4 of Republic Act No. 34
provides that the Act shall take effect immediately, that is, upon its passage
or approval by the President on September 30, 1946; and a statute which is to
take immediate effect is operative from the exact instance of its becoming law.

Taking into consideration that our Constitution, not only does not place any
limitation on the general legislative power, but ordains Congress to “regulate
the relations between landowner and tenant” (section 6, Article XIV), and
provides that “the promotion of social justice to insure the well-being and
economic security of all the people should be the concern of the State” (section
5, Article II); that it is a “well settled rule that the history of a
legislation is also important in interpreting the intention of the legislative
body, and therefore courts may refer to messages of the executive to the
legislature (2 Sutherland’s Statutory Construction, (3rd ed., Section 5002,
5004, pp. 481-489); that the President in its message to Congress of the
Philippines on August 8, 1946, in recommending the earliest approval of the
proposed amendments to the tenancy lam embodied in Republic Act No. 34, which
“establish the fairest possible contractual basis between the tenant and
landowner,” according to the Message, the President said that “In view of the
fact that the planting season of rice is under way and that the harvest mill
take place before the next session of the Congress, I earnestly request that
this matter receives your early attention and that the proposed amendment be
enacted at an early date’1; and that Act No. 34 was passed by Congress and
approved by the President on September 30, 1946 to take effect immediately; it
is to be inferred that it was the intention of the Congress to make it
applicable to the harvest of rice during the agricultural year 1946-1947.

No retrospective effect would be given to said provision of section 8 of the
Act No. 4054, as amended by section 3 of the Republic Act No. 34 relating to
share basis, if applied to the rice harvested during agricultural year
1946-1947; because said Act No. 34 became effective on September 30, that is
before the expiration of the agricultural 1946-1947, for “one agricultural year
shall mean the length of time necessary for the preparation of the land sowing,
planting and harvesting a crop” (section 6, Act No. 4054), and the crop in
question had been, according to the conclusion of fact of the lower court,
planted during May and harvested during the months from October to December,
1946, and even January, 1947. And it is a well established rule recognized by
all authorities without exception, that a retrospective or retroactive law is
that which creates a new obligation, imposes a new duty or attaches a new
disability in respect to a transaction already past; but that statute
is not made retrospective because it draws on antecedent facts for its
operation, or in other words part of the requirements for its action and
application is drawn from a time antedating its passage (See cases
cited in 37 Words and Phrases, pp. 530-533).

But even if to apply Republic Act No. 34 to the tenancy relations in
agricultural year 1946-1947 between the parties would be tantamount to giving
said Act retroactive or retrospective effect, our Constitution does not in terms
prohibit the enactment of retrospective laws which do not impair the obligations
of contract or deprive a person of property without due process of law, that is,
which do not divest rights of property and vested rights. It is evident that
there being no valid or binding oral tenancy contract, nor a written one for
that matter, between parties prior to the date Act No. 34 became effective, no
obligations of contract could be impaired by the application of said Republic
Act No. 34. And no vested right having been acquired by the parties over the
1946-1947 rice crop under the provision of section 8 of Act No. 4054, applicable
to the division of the crop in the absence of a contract in writing between the
parties, before it was amended by Republic Act No. 34, no vested right could be
affected by the application of said Act No. 34 to the tenancy share in 1946-1947
rice crop.

In view of all the foregoing, and the fact that the conditions set forth in
section 8 of Act No. 4054, as amended by section 3 of the Republic Act No. 34,
are complied with in the present case as found by the lower court in its
decision that is, that the tenant owns the work animals and the necessary
implements, that he defrayed the cost of plowing and cultivation, and that the
cost of harvest and threshing were deducted from the gross produce, the decision
appealed from is reversed or set aside, and the decision by the Tenancy Lava
Enforcement Division of the Department of Justice, in so far as it applies the
provisions of said Act No. 34 to the present case, be carried out, with costs
against the respondent. So ordered.

Moran, C.J., Parás, Pablo,
Perfecto, Briones, and Padilla, JJ. concur.

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DISSENTING

HILADO, J.:

I dissent.

Among the facts stipulated by the parties, as narrated on pages 2-3 of the
decision of the Court of Industrial Relations, is that the rice planting season
of 1946-1947 on the lands involved herein commenced in May and ended in July. It
is therefore obvious that the palay crops in question were planted during those
months of the year 1946. It behooves us, consequently, to inquire: What was the
governing provision of the law at the time as to the respective shares that
should pertain to the tenants and to the landlords? For it goes without saying
that both landlords and tenants must be taken to have entered into their
relation as such, for that agricultural year, in view of, and pursuant to?
those legal provisions.

Section 8 of Act No. 4054 provides:

“SEC. 8. Share basis.— In the absence of any written agreement to
the contrary and when the necessary implements and the work animals are
furnished by the tenant; and the expenses for planting, harvesting, threshing,
irrigation and fertilizer, if any, as well as other expenses incident to the
proper cultivation of the land, are borne equally by both the landlord and
tenant, the crop shall be divided equally. The division shall be made in the
same place where ,the crop has been threshed and each party shall transport his
share to his warehouse, unless the contrary is stipulated by the parties:
Provided, however, That when the landlord furnishes the work animal
gratuitously it shall be deemed as a special consideration, and the tenant shall
be obliged to transport the share of the landlord to his warehouse if it is
within the municipality where the land cultivated is situated.”

The above quoted provision, along with the other sections of said Act No.
4054, was proclaimed effective in the province of Pangasinan in January, 1937,
as found by the Court of Industrial Relations in its decision appealed from.
Hence, there being no written contract of tenancy between the instant parties,
their shares in the crops under consideration must be determined pursuant to
said section 8, which was in force when they entered into their relation, when
the landlords agreed to let the tenants work their lands and the latter to work
them for the planting and raising of palay. In effect, the law, because they
themselves did not in writing fix them, fixed their shares in the crop upon a
50-50 basis when the necessary implements and the work animals were furnished by
the tenants, and the expenses for planting, harvesting, threshing, irrigation
and fertilizer, if any, as well as other expenses incident to the proper
cultivation of the land, were borne equally by both the landlords and tenants.
The Court of Industrial Relations decided that the crops in question shall be
divided pursuant to said section 8, with the requirement (in order to adjust
matters exactly to the legal mandate) that the landlords shall reimburse the
tenants for one-half of the expenses of planting and others incidental to the
proper cultivation of the said lands, the said tenants being the owners of their
work animals and implements, the landlords having supplied only the seeds. In my
opinion this is a correct solution of the problem, with the sole modification
that the tenants should also be required to reimburse the landlords for one-half
of the seeds thus supplied or their reasonable value.

I believe that when enacting Republic Act No. 34, amendatory of Act No. 4054,
the Congress, and in issuing his proclamation No. 14 of November 12, 1946, the
President, did not intend that said amendatory act or said proclamation should
be applicable to crops already planted pursuant to the former legal
provisions in force at the time of the planting and before the amendment.
Section 4 of Republic Act No. 34 itself clearly evinces the intention to give it
only prospective effect, and neither said act nor said proclamation contain
express terms of retroactivity.

Furthermore, for the law, as in the case of section 8 of Act No. 4054, to
tell the landlord and the tenant that if they do not stipulate to the contrary
in writing their shares in the product shall be equal, as therein defined and
specified, and after both parties have accordingly acted, and when the planted
crops are already bearing fruit and nearing harvest, or being harvested, to
change the sharing basis from 50-50 to 70-30 or the like, would be to my mind
nothing short of a deception practised by the law upon the prejudiced party. I
cannot support such an absurd construction. No consideration of social justice
can possibly justify such an injustice to the landlord or to the tenant, whoever
comes out prejudiced by the ex post facto change in the law. If the
change, as happened through Republic Act No. 34, was against the landlord, it
might well have been that he would not have agreed to enter into that
landlord-tenant relation if the law had been changed before its creation. And we
can also suppose that if such change had been adverse to the tenant and had been
made before the initiation of the landlord-tenant relation, such tenant might
not have entered into it and invested labor or money thereunder.

The construction in favor of giving the amendment retroactive effectiveness,
on the score of social justice, in the first place would appear rather to tend
toward socialism, and in the second, might tend to the prejudice of the tenants
themselves. I say socialism because it subjects the landlord’s property to use
and enjoyment by the tenant upon terms not voluntarily accepted by the former
but arbitrarily imposed by the government after said landlord had
agreed to let his property be worked by the tenant under terms required or
permitted by the law in force at the time. And I say to the prejudice of the
tenant himself, because it is not hard to see that under such a regime no
reasonably prudent landlord would be inclined to allow his property to be worked
by a tenant for fear that at any time before the actual division of the crop the
government may arbitrarily change his share in the crop from that which was
required or permitted when he delivered his property to be worked by his tenant,
without such landlord being able to foresee or even guess how great the change
might come out to be. For instance, under such a theory the government might
have changed the shares from 50-50 to 90-10 or any other proportion more onerous
to the landlord than 70-30. In such a state of affairs it is easily
comprehensible that tenants would likely be deprived of the very opportunity to
work landlords’ lands and find it hard to find lands to work, with the result
that what was thought to be a measure of social justice for the amelioration of
their lot may on the contrary tend to aggravate their situation.

BENGZON, J.:

I believe, like Mr. Justice Hilado, that the law should not apply to
contracts already existing at the time of its approval. I join his dissent.

TUASON, J.:

I concur in Mr. Justice Hilado’s dissenting opinion.

Decision
reversed.