ARTURO DE SANTOS, ET AL., PETITIONERS, VS. PETRONILO ACOSTA, ET AL., RESPONDENTS.

Petition for review of the decision of the Court of Agrarian Relations in its
case No. 1506-NE’58, denying herein applicants’ petition to dispossess
respondents tenants of their respective landholdings situated in Barrio Sta.
Clara, Guimba, Nueva Ecija, pursuant to section 50 (a) of Republic Act No. 1199,
as amended.

Hacienda Esperanza No. 5, with a total area of approximately 1,800 hectares,
situated in the municipalities of Cuyapo, Guimba and Nampicuan, Nueva Ecija, was
originally owned by and registered in the names of the late couple Felipe de
Santos and Conception Vda. de de Santos. Petitioners here and in the court below
are the surviving children of the deceased spouses. The hacienda is
occupied by about 380 tenants and managed by Alberto de Santos, one of the
petitioners. Under the latter’s management, unlike that of his late father,
tenancy disputes became prevalent between the parties. It was only when the
management agreed to pay reaping expenses, formerly not given to the tenants,
and stop forced labor and the imposition of fines, that the tenancy relationship
between them returned to normal, although the undercurrent still continued. Such
was the situation that prevailed between the parties in-between the years 1942
and 1953.

With the enactment of Republic Act No. 1199, otherwise known as the
Agricultural Tenancy Act, the tenants again became more vocal, even militant, in
clamoring for increased tenancy rights; thus they demanded for a 70-30 sharing
basis in their favor in lieu of the old 55-45. Under this general condition,
petitioners, on or about May, 1955, organized a corporation known as De Santos
Agricultural Development, Incorporated, which was to manage the hacienda
in question. In December, 1955, the Board of Directors authorized the corporate
president, Alberto de Santos, to undertake the mechanization of a parcel of land
situated in Barrio Sta. Clara, Guimba, Nueva Ecija, which parcel is tenanted by
the respondents herein, numbering 55 in all.

On July 30, 1958, the petitioners petitioned the court a quo to
dispossess herein respondents-tenants of their landholdings. Attached to the
petition is the certification, dated February 9, 1955, of the Secretary of
Agriculture and Natural Resources, stating, among other things, that
Hacienda Esperanza No. 5, of which the landholdings of the respondents
form part, was found suitable for mechanization, that the use of mechanical
implements will reduce the cost of production by approximately 23 per cent per
hectare, and that the total labor will be approximately 44 per cent less. The
proposed mechanization includes plowing, harrowing, leveling, diking and final
harrowing, which is also known as partial mechanization.

It appears that petitioners are actually in the process of partially
mechanizing a small portion of the hacienda situated in the barrios of
Lennec and San Felipe, Guimba, Nueva Ecija, as well as the upper portion
thereof. As such, petitioners own and possess various types of farm machineries
adequate to mechanize even the landholdings in question, besides being
financially able to operate these machineries or to acquire more should they
become necessary.

Consistently with Republic Act No. 2263, which was approved and took effect
during the pendency of this case in the court below, petitioners in addition
presented a certification, dated June 25, 1959, of the Commissioner of the
Agricultural Tenancy Commission, to the effect that “the records of
investigation of the certification of suitability for mechanization of the farm
known as Hacienda No. 5 * * * show that more than 60 per cent of the tenants’
labor thereat, as provided by paragraph s, section 5 of Republic Act No. 2264
shall be displaced by farm machinery.” Also in keeping with the amendatory
legislation, petitioners submitted a certification, dated June 25, 1959, issued
by the National Resettlement and Rehabilitation Administration (NARRA), that it
would be able to provide immediate resettlement to the respondents should their
dispossession be authorized by the court.

The Agrarian Court, nonetheless, denied the move to eject the
respondents-tenants on the following grounds:

(1) That the petitioners failed to establish their bona fide intention to
cultivate the landholdings of the respondents through the employment of farm
machinery and implements; and

(2) That the landholdings in question are not suited for mechanization as the
term is defined and understood under section 50 (a) of Republic Act No. 1199, as
amended, notwithstanding the certification of suitability issued by the
Secretary of Agriculture and Natural Resources, as well as the certification of
the Commissioner, Agricultural Commission.

The decision appealed from must be sustained. Among other things, the law
requires that there be—

“bona fide intention of the landholder—owner or his relative within
the first degree of consanguinity to cultivate the land himself personally or
through the employment of farm machinery and implements * * *.” (Sec. 50[a]
Republic Act No. 1199, as amended)

Whether or not there was such a bona fide intention of the landowner
is largely a question of fact into which this Court cannot inquire unless the
Agrarian Court’s finding in that respect shpuld lack substantial basis in the
evidence on record.

Here, the records disclose that Hacienda Esperanza No. 5 is bisected
by a provincial road running from south to north; on the west side is Barrio
Sta. Clara and on the eastern portion are the barrios of Lenec, San Felipe,
Guisit, Baloy and Balbalino. The topography of the area is such that on the east
side, the land is hilly, sloping and rolling, while on the west side, it is
plain. For this reason, farming by man-animal combinations in the hilly portion
of the hacienda is not as suitable as on the west side, and produces
less. Not only does it appear that the eastern sector of the area is suitable
to mechanized farming, but tfcat indeed a portion thereof (Lenec) already
underwent mechanization successfully. There was ground, therefore, for the court
a quo to hold, as it did, that it would have been more in keeping with
the ordinary course of events if the proposed mechanization were merely extended
to this hilly and rolling portion of the hacienda, which is anyway
contiguous to the area already mechanized. It was incumbent upon appellants to
satisfy the Court with their reasons for disregarding this contiguity (other
than their desire to oust the west side tenants), and in this they have
failed.

Managerial discretion should, it is true, be conceded to the landowner, and
it would ordinarily be his prerogative to decide what portions of his land
should be mechanized. But the bona fide exercise thereof can be tested to
determine if it conforms to legislative measures enacted pursuant to the police
power of the State. One of these enactments is Section 50 (a) of Republic Act
No. 1199, as amended.

Upon the other hand, the Agrarian Court assigned two main reasons to the
petitioners’ insistence to oust the respondents from their respective
landholdings, to wit: (1) that the respondents are on a 70-30 sharing basis
while those on the opposite landholdings are only on a 55-45 ratio; and (2) that
the respondents, in contrast with their counterparts on the eastern portion of
the hacienda, are definitely more militant in their agitations for better
tenancy treatment. These findings are supported by the absence of a definite
plan for the mechanization of the entire hacienda and by testimony on
record that the landowners tried in earnest to convince the respondents to
return to the old 45-55 sharing basis, but that this proposal was turned
down.

The petitioners incorrectly argue that the phrase “bona fide intention
to cultivate” has reference only to (1) the ability of the landowner to
mechanize and (2) a firm decision on his part to mechanize. The contention not
only unduly narrows the statutory condition, which in our considered opinion
requires further that the landowner be not motivated by vindictiveness in
seeking the dispossession of his tenants, but it also unjustly endangers the
position of agitating tenants under a retaliatory landowner, a wrong that has
long been the object of our agrarian reforms. The “bona fide” requirement
necessarily authorizes judicial inquiry into the landowner’s motives in deciding
to mechanize his operations. Nor do we find that a statutory presumption of bad
faith, if the landowner fails to mechanize after five years, is at all
incompatible with an inquiry into the good faith of a proposed mechanization
before it is carried out.

Having arrived at the foregoing conclusion, we consider it irrelevant whether
the certifications of the Agricultural Tenancy Commission are to be deemed
conclusive or merely prima facie evidence of the hacienda’s
suitability to mechanization. In either case, it would first be necessary to
prove the bona fide intention of the landowners-petitioners to cultivate
the landholdings in question.

Wherefore, the decision appealed from is affirmed, with costs against the
petitioners.

Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Paredes,
Dizon, and De Leon, JJ., concur.