MACARIA TINIO DE DOMINGO, PETITIONER, VS. COURT OF AGRARIAN RELATIONS, SECOND DIST., CABANATUAN CITY, ET AL., RESPONDENTS.

The herein respondents-appellees are tenants of the herein petitioner in the
latter’s hacienda at Triala, Guimba, Nueva Ecija, under written contracts of
tenancy executed with appellant-landowner. This case was commenced in the Court
of Agrarian Relations upon complaint of the respondents-tenants against the
petitioner-landholder to compel, among other things, the liquidation of the
palay harvest for the agricultural year 1955-1956 under the sharing basis of
55-45 in favor of respondents in accordance with their contracts (Exhibits 1 to
79). The herein petitioner, in her answer to the complaint, alleges that while
the contracts of tenancy provide for a 55-45 sharing basis in favor of the
herein respondents, the sharing ratio should be 60-40 in petitioner’s favor
because she had shouldered the expenses of final harrowing and transplanting.
During the trial of the case, the Court of Agrarian Relations issued several
orders disposing certain incidental matters involved, such as the question of
holding the harvested crops produced for the agricultural year 1955-56, the
place where the liquidation should be done, the place where the bundles of palay
should be stacked, and other similar matters. The Court of Agrarian Relations
also allowed the herein respondents to present evidence showing fraud in the
execution of the tenancy contracts, although said fact was not alleged by them
in their complaint.

After trial on the issues involved, the. Court of Agrarian Relations (by
Judge Leon Dacayo) rendered decision declaring all the tenancy contracts null
and void, as well as all the stipulations made therein, and ordering that the
palay harvested for the agricultural year 1955-56 be liquidated on a 70-30 basis
in favor of the herein respondents. Consequently, this petition for the review
of the Court of Agrarian Relations’ decision was filed by herein petitioner.

The question involved in this appeal is whether or not the Court of Agrarian
Relations erred in nullifying the tenancy contracts in question and,
consequently, in, disregarding the stipulations made therein, principally, the
sharing basis of the net produce at 55-45 in favor of the
respondents-tenants.

During the pendency of this appeal, on June 2&, 1957, petitioner filed
with respondent Court of Agrarian Relations various complaints in consignation
against 75 of her tenants (CAR Cases Nos. 553 to 627 Nueva Ecija ’57), most of
said tenants being the herein respondents-tenants (15 respondents were not made
parties in said cases). In her complaints, petitioner tendered her 1/2 shares in
the costs of transplanting and final harrowing for the agricultural year 1956-58
alleging that the respondents therein had refused to receive the same in
violation of their tenancy contracts. The parties in these cases, on August 27,
1957, entered into a Stipulation Of Facts wherein they agreed that the
respondents therein are tenants of petitioner having tenancy contracts for a
period of ten years, the validity of which are pending litigation in the Supreme
Court; that respondents’ refusal to accept petitioner’s tender of her share in
the expenses of final harrowingand transplanting was because under Act No. 4054
and Republic Act No. 1199, they claim to have the right to change the sharing
basis every agricultural year despite the fact that the period of ten years has
not yet elapsed. The Court of Agrarian Relations (Tomas Panganiban, Judge)
rendered a decision ordering the respondents therein to accept the tender of
petitioner’s share and to maintain the sharing basis of 55-45 in favor of
respondents as agreed upon in their contracts. The respondents appealed the
decision to the Supreme Court, but it was dismissed for lack of merit (G. R. No.
L-13176, Sept. 18, 1957). Upon the finality of the judgment in these cases,
several respondents therein withdrew from the respondent court their
corresponding shares in the amounts consigned by the petitioner.

Similar complaints in consignation were filed by petitioner in 1958 and 1959
for her share in the costs of final harrowing and transplanting for the
agricultural years 1958-59 and 1959-60, decisions thereon having been held in
abeyance by the respondent Court of Agrarian Relations (Judge Jose M. Santos,
presiding), pending final determination by the Supreme Court of the appeal in
the present case.

On October 5, 1958, 35 of herein respondents-tenants and the petitioner in
the present case filed with the Supreme Court a motion for a judgment by
compromise agreeing that the tenancy contracts were executed in accordance with
law; that said contracts are all for a period of ten agricultural years from the
date of their execution; that the sharing basis of 55-45 in favor of the
respondents be maintained, except that for the agricultural year 1955-56, the
sharing basis to be followed shall be that in accordance with the provision of
Sections 32 of Republic Act 1199, 4»king into account the fact that the
petitioner had shouldered all the expenses of final harrowing and transplanting
for that year.

On November 28, 1959, two similar agreements were entered into between
petitioner and several other respondents, bringing the total number of
respondents who have compromised with the petitioner to 45, leaving only 30
respondents who have not entered into any agreement with the petitioner, to
wit:

	Cornelio Patricio	Epifanio Pascual
	Silvino Cortez	Rufino Galang
	Virgilio Corcuera	Juan Mariano
	Narciso Imperio	Laureano Gabriel
	Jose Hernandez	Fausto Milla
	Gregorio Galang	Pedro Imperio
	Felizardo Imperio	Francisco Mana
	Marcos Cortez	Domingo Resma
	Jose Maniñgas	Mariano Libunao
	Inocencio de los Santos	Maria Baisa
	Jose Corcuera	Luis Dagman
	Protacio Corcuera	Alberto Garay
	Apolinario Lina	Alfredo Asuncion
	Antonio Corcuera	Lucas Gabriel
	Alberto Imperio	Tomas Barrera

As for these respondents who have not entered into any agreement with the
petitioner, the following questions remain:

(1) Are the tenancy contracts valid or not?

(2) What shall be the sharing basis for the agricultural year 1955-56 taking
into account the actual contributions of the parties in the cost of final
harrowing and transplanting for that year? In other words, who shouldered the
expenses of final harrowing and transplanting for the agricultural year
1955-56?

The main thesis of appellant is that the decision of the Court of Agrarian
Relations is not supported by substantial evidence. The trial court concluded
that the contracts were fraudulently executed and, therefore, were null and
void, taking into account the following circumstances and evidence:

(1) The contracts were printed in Tagalog, a dialect different from that of
the tenants who only know Ilocano, to the extent that the Municipal Treasurer
had the oontracts translated to the tenants by his clerk, which means that the
contract is not in a language or dialect known to both parties thereto, contrary
to section 12 of Republic Act 1199 and section 4 of Act 4054;

(2) That some contracts (Exhibits 1-4) were ratified by a Notary Public and
not by the Municipal Treasurer or Mayor or Justice of the Peace, as required by
section 12 of Republic Act 1199, and were so ratified four months after they
were signed on May 20, 1955;

(3) That the contracts exhibits “5” to “79” were signed in May, June, and
July of 1954, but sworn to before the Municipal Treasurer on July, August,
September, and October of 1954, and registered without the presence of the
tenants;

(4) That the tenants’ copies were not delivered to them but to the landlord’s
overseer, who did not deliver the respective copies to the tenants (Dec, p.
32);

(5) That the contract period was ambiguously worded “Isang Pung Taon”, or
“Isampung taon”;

(6) The tenants, through their witnesses, De los Santos, Patricio, Galang and
Santiago, showed that when the contracts were signed, they were given to
understand that they were only for one (1) year and not for ten years, and that
the contracts, were not signed or thumbprinted in the presence of the Municipal
Treasurer or the Notary Public, nor were the contracts read to them.

It is apparent from the foregoing that the Court’s finding that the contracts
were contrary to law and fraudulent of not really assented to by the tenants,
wherefore they should be annulled and set aside, is not a conclusion based on
mere conjecture; it is supported by substantial evidence, derived from the
testimony for the tenants, surrounding circumstances, and the provisions of the
Tenancy Act. Whether or not the circumstantial evidence of fraud is or is not
sufficient to overcome the testimony and evidence for the landowner is not a
question for this court to decide; so long as the findings of fact of the
Agrarian court attain the minimum evidentiary support demanded by the law, such
findings can not be revised or altered by the appellate tribunals.

Proceeding now to examine the issues of law raised by the
appellant-landholder, we find that there is no estoppel on the tenants to assail
the binding effect of their written contracts simply because they asserted in
their original petition that—

“Contracts covering their tenancy relationship have been duly executed by
both parties for the agricultural year 1955-1956”,

since the contracts relied upon by the appellant landlord are ten-year
contracts from 1955 to 1965, while the alleged judicial admission refers to
one-year contracts.

We find no merit either in the appellant’s contention that the tenants are
precluded from contesting the written contracts because they failed to do so
within 30 days from their registration, as provided by section 11 of Republic
Act No. 1199:

“SEC. 11. Freedom to Contract in General.—The landholder and the
tenant shaft be free to enter into any or all kinds of tenancy contract, as long
as they are not contrary to law, morals or public policy. Except in case of
fraud, error, force, intimidation or undue influence, when such contract is
reduced to writing and registered as hereinafter provided, the latter shall be
conclusive evidence of what has been agreed upon between the contracting
parties, if not denounced or impugned within thirty day after its
registration.”

The reason is that, as pointed out for the respondent Court of Agrarian
Relations, the section above-quoted does not apply to contracts tainted by fraud
or other vice of consent, much less to contracts violative of the law itself, as
the present ones were found to be. A second reason is that the tenants not
having been furnished copies of the contract, and most if not all of them being
illiterate, they can not be expected to contest a contract the exact terms of
which were hidden from them.

It is true that the original complaint did not allege fraud, but the tenants,
in the course of the trial, submitted “verbal motions seeking to amend the
petition so as to include the allegation that respondent fraudulently secured
the execution of the tenancy contracts invoked in this case, and praying that
the said contracts be declared null and void and not binding on the parties.”
(Dec., p. 23; Petition for Review, p. 7). Over the defendants’ objection, “the
Court proceeded with the trial because it believed there was no necessity to
make formal amendments to consider the issue raised in the verbal motion”. (Dec,
p. 24), “and allowed the parties to produce evidence on the circumstances
surrounding the execution of the contracts of tenancy” (Dec, pp. 24-25).

This course is authorized by section 11 of Republic Act No. 1267 creating the
Court of Agrarian Relations:

“SEC. 11. Character of Order or Decision.—In issuing an order or
decision, the Court shall not be restricted to the specific relief claimed or
demands made by the parties to the dispute, but may include in the order or
decision any matter or determination which may be deemed necessary and expedient
for the purpose of settling the dispute or of preventing further disputes,
provided that said matter for determination has been established by competent
evidence during the hearing.”

At any rate, even disregarding fraud, the written contracts were violative of
the provisions of the Tenancy Act (R.A. 1199) in several respects previously
pointed out. Wherefore, the Agrarian Court committed no reversible error in
invaldating them and in applying the tenancy law as if no written contracts
existed.

With regard to the contracts acknowledged before a Notary Public, section 12
of the Agricultural Tenancy Act (R.A. No. 1199) expressly requires that (sec.
12, par. 2)—

“The contracting parties shall acknowledge the execution of the
contract before the municipal treasurer or justice of the peace or
mayor of the municipality where the land is situated.” (Italics
supplied)

Comparison with the corresponding provision of the preceding Rice Tenancy Act
that it superseded (Act No. 4054), reciting—

“Oath or affirmation by the contracting parties before the municipal
treasurer concerned shall be sufficient for the purpose of
acknowledgment.,”

leaves no room for doubt that the enumeration of the authorized acknowledging
officers in section 12 of the prevailing statute, is a deliberate legislative
reform, designed to exclude the intervention of Notaries Public in tenancy
contracts, that should be made fully effective (cf. Butte vs. Uy & Sons,
Inc., supra, p. 437). No error was committed by, the trial court,
therefore, in considering such notarial acknowledgments as violative of the
law.

The Agrarian court pronounced that the tenants were entitled to 70% of the
gross produce, having borne the cost of final harrowing and transplanting, as
well as having furnished the labor, farm implements and work animals; and that
the cost of the final harrowing and transplanting can not be regarded as equally
shared between tenant and landlord when the latter pays his or her share after
the said agricultural operations have already been completed. No reversible
error was incurred in so holding, since under section 34 of Republic Act 1199,
reimbursements for either party’s contribution are not allowed.

“SEC. 34. Reimbursement Not Allowed.—Contributions or shares in the
contribution to the production of the crop in the form of cash, grain or
services, once shouldered or rendered alone by one party may not be reimbursed
by the other party after the phase or phases of work required in the joint
undertaking shall have been completed.”

The acceptance by the tenants of the landlord’s belated contribution,
therefore, was correctly considered by them and by the Court as loans repayable
upon liquidation of the crop.

With regard to the crops subsequent to that of 1955-1956, the rejection by
the tenants of the landlord’s contribution to the cost of final harrowing and
transplanting, if tendered in due time, can not be justified by the tenants’
right to change the crop sharing arrangement unless the tenant has served notice
of his intention to change upon the landholder at the advance end of the
preceding agricultural year (Sec. 14, R.A. 1199). The giving of timely notice is
an issue of fact that the Agrarian court is the one competent to decide.

Finding no reversible error in the judgment appealed from, we hereby affirm
the same with respect to the tenants who have not entered into a compromise of
their action against the landlord. The records are ordered remanded to the court
of origin for further proceedings in conformity with this opinion. Costs against
appellant Tinio.

Bengzon, C. J., Padilla, Bautista Angelo, Concepcion, Barrera,
Paredes, and Dizon, JJ., concur.