ALBERTO DE SANTOS, ARTURO DE SANTOS, ALICIA DE SANTOS-MALOLES AND DE SANTOS AGRICULTUAL DEVELOPMENT, INC., PETITIONERS, VS. HON. JOSE N. SANTOS, ASSOCIATE JUDGE OF THE COURT OF …

De Santos versus Santos

The Case

This is a petition by the landholders of Hacienda Number Five in Nueva Ecija against a group of share tenants, and it reaches us as an appeal from the Court of Agrarian Relations. The tenants asked that court to declare that they had validly changed their crop-sharing arrangement from fifty-five forty-five in their favor to seventy thirty, invoking their statutory option to change one crop-sharing arrangement to another. The case matters because it fixes the precise moment when that option must be exercised: at the expiration of a written and registered tenancy contract, and not at some later point after the new agricultural year has already begun. It is a case about the meaning of an agricultural year, and about the consequences of a tenant's late exercise of a statutory right.

Procedural History

The tenants filed their petition before the Court of Agrarian Relations, Second Regional District, sitting in Cabanatuan City. Pending determination, the agrarian court issued orders authorizing the threshing of the harvested palay and directing a provisional liquidation of the harvest. On twenty-two April 1959, the agrarian court rendered judgment in favor of the tenants, holding that they could change the crop-sharing arrangement at the end of one agricultural year, or at any time thereafter but within a reasonable period prior to the final harrowing and transplanting, and that their exercise of the option was valid. The landholders appealed directly to the Supreme Court under the governing provisions of the agrarian laws. Before reaching the merits, the Court also had to resolve the tenants' plea that the appeal be dismissed for failure to seek reconsideration below.

Facts

The tenants were share tenants on first-class ricelands within Hacienda Number Five, situated in the municipalities of Nampicuan, Cuyapo and Guimba, Nueva Ecija. For the agricultural year 1957 to 1958, the parties divided the net harvests under a sharing ratio of forty-five fifty-five in favor of the tenants, pursuant to written tenancy contracts duly executed and registered in accordance with law. Those contracts expired at the end of that agricultural year.

On nineteen June 1958, the tenants, through Hermogenes Ireneo, sent a letter by registered mail notifying the landholders that they were changing their sharing ratio effective the agricultural year 1958 to 1959, and that they would observe the seventy thirty basis in their favor. The envelopes were addressed to Alberto de Santos, who did not claim the registered letters despite notices, and the letters were returned to the sender. In the second week of August 1958, the landholders in turn sent notices offering their contribution to the final harrowing and transplanting expenses. The tenants refused that contribution and defrayed all such expenses themselves. In that agricultural year, the tenants contributed their labor, work animals, farm implements, and the final harrowing and transplanting expenses, while the landholders contributed only the ricelands.

The agrarian court found that the tenants exercised their option on nineteen June 1958, prior to the final harrowing and transplanting, and upheld the change. The landholders appealed, contending that the change must be made at the end of the agricultural year, and that a tenant who fails to do so is precluded from making the change during the ensuing agricultural year.

Issues

• Whether or not the tenants validly exercised their right to change the crop-sharing arrangement from forty-five fifty-five to seventy thirty in their favor, effective the agricultural year 1958 to 1959.
• Whether or not the landholders' appeal should be dismissed for their failure to seek reconsideration of the judgment below before appealing.

Applicable Provisions

Section 14 of Republic Act Number 1199 provides:

The tenant shall have the right to change the tenancy contract from one of share tenancy to the leasehold tenancy and vice versa and from one crop-sharing arrangement to another of the share tenancy. If the share tenancy contract is in writing and is duly registered, the right may be exercised at the expiration of the period of the contract. In the absence of any written contract, the right may be exercised at the end of the agricultural year. In both cases the change to the leasehold system shall be effective one agricultural year after the tenant has served notice of his intention to change upon the landholder.

This is the very provision that grants the option the tenants invoked, and it fixes the time for its exercise at the expiration of the written and registered contract.

Section 5, paragraph c, of the same Act defines the term agricultural year as:

the period of time necessary for the raising of seasonal agricultural products, including the preparation of the land, and the sowing, planting and harvesting of the crop

This definition controls when the prior agricultural year ended, and therefore whether the notice of nineteen June 1958 was timely.

Ruling

On the first issue, the Court ruled against the tenants. The contracts were in writing and duly registered, so the right could be exercised only at the expiration of the period of the contract sought to be changed. Under the statutory definition, one agricultural year covers the preparation of the land, the sowing, planting and harvesting of the crop. Since the harvesting of the 1957 to 1958 crop was completed in December 1958 or January 1959, the Court reasoned that when the tenants gave notice on nineteen June 1958, the agricultural year 1957 to 1958 had already ended and the agricultural year 1958 to 1959 had already begun. The option was therefore not timely and seasonably exercised to take effect during the 1958 to 1959 agricultural year. The Court added that the final clause of Section 14, on the effectivity of a change to the leasehold system, does not warrant the interpretation adopted by the agrarian court. Because the tenants had shouldered the expenses the landholders would have contributed, the landholders must reimburse them.

On the second issue, the Court ruled against the tenants' plea for dismissal. Neither the agrarian law nor the rules of the agrarian court required an aggrieved party to seek reconsideration before appealing, and the resolution relied upon by the tenants referred to rules of this Court, not to the agrarian court's rules. The prayer for dismissal was denied.

Doctrine

First, where the share tenancy contract is in writing and duly registered, the tenant's right to change one crop-sharing arrangement to another may be exercised only at the expiration of the period of the contract. Second, an agricultural year is the period necessary for raising the crop, including preparation of the land and the sowing, planting and harvesting of the crop; a notice given after that year has ended and the new one has begun is late. Third, a late exercise of the option does not take effect for the ensuing agricultural year, and the tenant must be reimbursed for what the landholder would have contributed to production. Fourth, no reconsideration is required before appealing from a judgment of the Court of Agrarian Relations.

Disposition

The judgment under review was set aside and the case remanded to the Court of Agrarian Relations for determination of the amount the landholders must reimburse the tenants, without pronouncement as to costs.

Remember This

Memorize the rule that a written and registered tenancy contract fixes the time for changing the sharing arrangement at the expiration of the contract, measured by the statutory agricultural year. Examiners use this case to test the timing of the tenant's option under Section 14 and the definition of an agricultural year under Section 5.