PIO BALATBAT, PETITIONER, VS. COURT OF APPEALS AND DOMINGO PASION, RESPONDENTS.

Balatbat versus Court of Appeals and Pasion

The Case

This is a petition for review on certiorari brought by Pio Balatbat, an agricultural lessee, against the Court of Appeals and Domingo Pasion, the new owner of the landholding. Pasion had filed an action for ejectment before the Court of Agrarian Relations, claiming that he would personally cultivate the land pursuant to Section 36, paragraph 1 of Republic Act Number 3844. The case matters because it fixes the rule on the retroactive operation of Republic Act Number 6389, the law that abolished personal cultivation by the landowner as a ground for dispossessing a tenant, and it tells us whether that abolition reaches ejectment cases still pending on appeal when the amendatory law took effect.

Procedural History

Domingo Pasion filed his complaint for ejectment with the Court of Agrarian Relations, Fifth Regional District, Branch Two, at San Fernando, Pampanga. After trial on the merits, the agrarian court rendered judgment against Balatbat, granting Pasion authority to eject him and to personally cultivate the landholding, ordering him to vacate and deliver possession, subject to the second proviso of Section 36, paragraph 1 and to the provisions of Section 25 of Republic Act Number 3844. Pasion's claim for damages was denied for lack of basis, and Balatbat's counterclaim for redemption was dismissed for lack of merit.

Balatbat appealed to the Court of Appeals, which affirmed the agrarian court's decision. The appellate court held that Pasion had complied with the requirement of notice of at least one agricultural year, and that although Pasion was already sixty-nine years old when he testified, nothing on record showed any physical ailment, adding that in this age of advanced technology most of the back-breaking processes of farming have been lightened by machinery. On the claimed right of redemption under Section 11 of Republic Act Number 3844, the Court of Appeals held that Balatbat failed to comply with the requirements, noting that his petition to litigate as a pauper was highly indicative of lack of funds. His motion for reconsideration was denied, so he elevated the matter to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

Pio Balatbat was the agricultural lessee of a parcel of land in Santiago, Santa Ana, Pampanga, containing an area of 18,490 square meters, more or less, owned by Daniel Garcia. Garcia sold the land to Domingo Pasion and had it declared for taxation purposes under a tax declaration in Pasion's name.

Sometime after the sale, Pasion, on the claim that he would personally cultivate the land, filed a complaint to eject Balatbat, alleging that he had notified Balatbat of his intention to personally cultivate the landholding and that despite the lapse of one agricultural year from receipt of the notice, Balatbat refused to vacate. Balatbat denied receiving any notice and raised special and affirmative defenses: that the jurisdictional requirements of the law had not been complied with; that Pasion had another palay landholding of two and one-half hectares worked by a hired helper; that Pasion was physically unfit to perform the different phases of farm work; and that the case was filed merely to harass him because of his adoption of the agricultural leasehold system and his refusal to shift back to the fifty-fifty sharing arrangement. In his counterclaim, Balatbat sought to exercise his right of redemption over the landholding because the former owner, Daniel Garcia, had failed to notify him beforehand of the intended sale.

At pre-trial, the parties could stipulate only on their being of legal age, their residences, and the fact that Pasion owned the landholding cultivated by Balatbat under the leasehold system. After trial, the agrarian court ruled against Balatbat. On appeal, the Court of Appeals affirmed. In the meantime, Republic Act Number 6389 took effect on 10 September 1971, during the pendency of the case before the Court of Appeals, and it amended Section 36, paragraph 1 of Republic Act Number 3844 by removing personal cultivation as a ground for dispossession.

Issues

• Whether or not Section 7 of Republic Act Number 6389, abolishing personal cultivation by landowners as a ground for dispossession of tenants, applies to ejectment cases still pending on appeal when the amendatory law took effect.
• Whether or not pending appealed cases on personal cultivation should be decided in the light of Section 7 of Republic Act Number 6389.

Applicable Provisions

Section 36, paragraph 1 of Republic Act Number 3844, as originally worded, provides:

SEC. 36. Possession of Landholding; Exception. — Notwithstanding any agreement as to the period or future surrender of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that: (1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided, That the agricultural lessee shall be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights under Sections twenty-five and thirty-four, except when the land owned and leased by the agricultural lessor, is not more than five hectares, in which case instead of disturbance compensation the lessee may be entitled to an advance notice of at least one agricultural year before ejectment proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to substantially carry out such conversion within one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because of said dispossessions.

This is the very ground Pasion invoked, and the Court notes that under it dispossession could take place only when authorized by the Court in a judgment that is final and executory.

Section 7 of Republic Act Number 6389, the amendatory law, provides:

SEC. 7. Section 36(1) of the same Code is hereby amended to read as follows: (1) The landholding is declared by the department head upon recommendation of the National Planning Commission to be suited for residential, commercial, industrial or some other urban purposes: Provided, That the agricultural lessee shall be entitled to disturbance compensation equivalent to five times the average of the gross harvests on his landholding during the last five preceding calendar years.

This amendment deleted personal cultivation as a ground for ejectment, and the whole question is whether it reaches this pending case.

On retroactivity, the Court invokes Article 3 of the old Civil Code, now Article 4 of the New Civil Code:

Laws shall not have a retroactive effect unless therein otherwise provided.

This supplies the default rule that governs the amendatory provision.

Ruling

On the first issue, the Court holds that the repeal of the personal cultivation ground does not help Balatbat. Although the repeal took effect before the judgment in this case became final and executory, the Court rules that Section 7 of Republic Act Number 6389 cannot be given retroactive effect. Speaking through Justice Gutierrez in the earlier cases of Nilo versus Court of Appeals and Castro versus Castro, the Court explained that while there were floor statements during the debates that the owner will lose the right to eject even in cases where he has not really succeeded in ejecting the tenants, Congress failed to express an intention to make the law retroactive and to cover ejectment cases on the ground of personal cultivation then pending adjudication by the courts.

The Court rests this on the settled canon that a statute operates prospectively only and never retroactively unless the legislative intent to the contrary is made manifest either by the express terms of the statute or by necessary implication. In every case of doubt, the doubt must be solved against the retrospective effect. No court will hold a statute to be retroactive when the legislature has not said so. The Court adds that later developments strengthen this conclusion: the 1973 Constitution emphasizes that property ownership is impressed with a social function, and Presidential Decree Number 27, which decrees the emancipation of tenants from the bondage of the soil, itself recognizes personal cultivation as a ground for retention, providing that the landowner may retain an area of not more than seven hectares if he is cultivating such area or will now cultivate it. The evil sought to be remedied by agrarian reform, the Court says, is the ancient anachronism where one person owns the land while another works on it, and that evil is not present in cases of personal cultivation by the owner.

On the second issue, it follows that pending appealed cases on personal cultivation are not to be decided in the light of Section 7 of Republic Act Number 6389. The amendatory law does not apply to them, and the Court reiterates the rule laid down in the Nilo and Castro cases and followed in Diga versus Adriano and Gallardo versus Borromeo.

Doctrine

First, a law shall not have a retroactive effect unless therein otherwise provided, and a statute operates prospectively only unless the legislative intent to the contrary is made manifest either by the express terms of the statute or by necessary implication. In every case of doubt, the doubt must be solved against the retrospective effect.

Second, Section 7 of Republic Act Number 6389, which removed personal cultivation as a ground for dispossession under Section 36, paragraph 1 of Republic Act Number 3844, is not retroactive and does not cover ejectment cases on the ground of personal cultivation that were pending adjudication when it took effect. Floor debates alone do not supply the express legislative intent that the law itself must contain.

Third, personal cultivation by the landowner remains a recognized ground, subject to strict requirements: proof of ownership, the required notices to the tenant, and a bona fide intention to cultivate proved to the satisfaction of the court, with the tenant protected should the owner fail to cultivate the land within one year or to work it himself for three years.

Disposition

The petition was dismissed for want of merit, with no pronouncement as to costs, so Domingo Pasion prevailed and the ejectment of Pio Balatbat stood.

Remember This

Memorize the line: a statute operates prospectively only and never retroactively unless the legislative intent to the contrary is made manifest either by the express terms of the statute or by necessary implication, and in every case of doubt the doubt is solved against the retrospective effect. Examiners use this case to test the retroactivity of amendatory agrarian laws and the rule that floor debates cannot substitute for an express legislative intent to make a law retroactive.