ERNESTO L. NATIVIDAD, PETITIONER, VS. FERNANDO MARIANO, ANDRES MARIANO AND DOROTEO GARCIA, RESPONDENTS.

Natividad versus Mariano

The Case

This is a petition for review on certiorari brought by Ernesto Natividad against his agricultural tenants, Fernando Mariano, Andres Mariano, and Doroteo Garcia. Ernesto bought the land they were cultivating at a public auction and then sought their ejectment for alleged non-payment of lease rentals. The case matters because it gathers in one decision the whole law on security of tenure in agricultural leaseholds: who bears the burden of proving a ground for ejectment, what kind of non-payment justifies dispossession, and how far the doctrine of immutability of final judgments bends to equity and jurisdiction.

Procedural History

Ernesto filed a petition for ejectment and collection of back lease rentals before the Provincial Agrarian Reform Adjudicator of Nueva Ecija. The tenants failed to answer, were declared to have waived their right to present evidence, and the case proceeded ex parte. The Provincial Adjudicator ruled for Ernesto, ordering the tenants to vacate the land and to pay rentals in arrears. That decision was not appealed and became final and executory, and a writ of execution issued.

The tenants then filed a first petition for relief from judgment on the ground of excusable negligence, which the Provincial Adjudicator denied, and denied again on reconsideration. They filed a second petition for relief, this time through the legal assistance office of the Department of Agrarian Reform, which was likewise denied, as was their motion for reconsideration. They appealed to the Department of Agrarian Reform Adjudication Board, which reversed the Provincial Adjudicator, ordered Ernesto to maintain the tenants in peaceful possession and cultivation, and ordered the tenants to pay arrears as computed by the Municipal Agrarian Reform Officer. Ernesto went up to the Court of Appeals by petition for review under Rule 43, and the Court of Appeals affirmed the Board. After the Court of Appeals denied his motion for reconsideration, Ernesto filed this petition for review on certiorari before the Supreme Court.

Facts

The dispute concerns a large parcel of agricultural land in Gapan, Nueva Ecija, registered in the name of Esperanza Yuzon. The respondents are the tenants of the land. Diego Mariano, father of respondents Andres and Fernando, and respondent Doroteo were issued Certificates of Land Transfer in 1973 under Presidential Decree Number 27. For the crop years 1988 to 1998 the tenants paid lease rentals to Corazon Quiambao and Laureano Quiambao, the authorized representatives of Aurora Yuzon, and kept the receipts.

In 1988 Ernesto purchased the property at a public auction. He claims that immediately after the purchase he verbally demanded that the tenants pay their rentals to him, and that they refused, prompting him to ask them orally to vacate. In December 1998 he filed his petition for ejectment and collection of back lease rentals before the Provincial Adjudicator. The tenants did not answer, and the Provincial Adjudicator ruled for Ernesto, ordering them to vacate and to pay arrears. The decision became final and a writ of execution followed.

The tenants then sought relief from judgment, pleading excusable negligence arising from their inexperience and ignorance of agrarian reform law and procedure, and their lack of financial means to secure counsel. They denied knowing of Ernesto's purchase, disputed its validity because the land was covered by Certificates of Land Transfer, and produced their rental receipts. The Provincial Adjudicator denied relief, but the Board and the Court of Appeals both ruled for the tenants, finding that Ernesto had not proven non-payment and that their substantive right to security of tenure excepted the case from the immutability of final judgments.

Issues

• Whether or not the Department of Agrarian Reform Adjudication Board and the Court of Appeals erred in reopening a decision of the Provincial Adjudicator that had already become final and executory, in the face of the doctrine of immutability of judgments.
• Whether or not Ernesto had sufficient cause to eject the respondents from the subject property on the ground of non-payment of lease rentals.
• Whether or not the lease rentals paid by the respondents to Corazon and Laureano were valid payments that discharged their obligation.

Applicable Provisions

Section 4 of Rule 9 of the 1994 Department of Agrarian Reform Adjudication Board Rules of Procedure, on relief from judgment, provides:

SECTION 4. Relief from Judgment. A petition for relief from judgment must be verified and must be based on grounds of fraud, accident, mistake and excusable neglect; Provided, that the petition is filed with the Adjudicator a quo within three (3) months from the time the fraud, accident, mistake or excusable neglect was discovered and six (6) months from notice of order, resolution or decision from which relief is sought.

This fixes the grounds and the twin periods whose compliance the Court examines in upholding the Board's grant of the tenants' appeal.

Section 3 of Rule 1 of the same 1994 Rules provides:

The Department of Agrarian Reform Adjudication Board and its adjudicators shall not be bound by technical rules of procedure and evidence as prescribed in the Rules of Court, but shall proceed to hear and decide all agrarian cases, disputes or controversies in a most expeditious manner, employing all reasonable means to ascertain the facts of every case in accordance with justice and equity.

This authorizes the relaxation of procedural rules that the Court applies to justify reopening the final judgment.

Section 36 of Republic Act Number 3844, the Agricultural Land Reform Code, provides:

The agricultural lessee shall have the right to continue in the enjoyment and possession of the landholding, and shall not be disturbed in such possession except only upon court authority in a final and executory judgment, after due notice and hearing, and only for the causes herein enumerated.

This is the security of tenure that protects the tenants and confines their ejectment to the enumerated causes.

Section 37 of Republic Act Number 3844 provides:

The burden of proving the existence of a lawful cause for the ejectment of an agricultural lessee shall rest on the agricultural lessor.

This places on Ernesto the duty to prove his ground for ejectment, which the Court finds he failed to discharge.

Ruling

On the first issue, the Court acknowledged that a final judgment is immutable and unalterable, even to correct erroneous conclusions of fact and law, subject only to the recognized exceptions of clerical errors, nunc pro tunc entries causing no prejudice, void judgments, and circumstances arising after finality that render execution unjust and inequitable. Yet it held that the Board and the Court of Appeals did not err in reopening the case. The broader interests of justice and equity demand that procedural rules be set aside where their rigid application would frustrate justice, particularly where defects of jurisdiction appear. The Provincial Adjudicator had denied relief on a sweeping declaration that no ground existed and that the petition was late, but the records showed justifiable grounds and timely filing. The tenants' ignorance of agrarian law coupled with financial constraints constituted more than excusable negligence, and they filed within six months of notice of the decision and within ninety days of discovering the consequences of their neglect. The Court also invoked the rule that agrarian adjudicators are not bound by technical rules of procedure and evidence.

On the second issue, the Court held that Ernesto failed to prove any sufficient cause for ejectment. He presented no evidence of his alleged verbal demands, so he is deemed to have demanded payment only when he filed the petition, at which point the tenants were not yet in delay. Non-payment, to justify dispossession, must be willful and deliberate and must have lasted at least two years. The receipts showed payments for 1988 to 1998, so there was no complete absence of payment, and the failure could not be characterized as deliberate or willful.

On the third issue, the Court ruled that the payments to Corazon and Laureano were valid. Ernesto bought the land in 1988 but demanded rentals only in 1998. His ten years of inaction led the tenants reasonably to regard Corazon and Laureano as the authorized payees, and he cannot now fault them for continuing to pay as they had before.

Doctrine

Once a tenancy relationship is established, the agricultural lessee enjoys security of tenure and may be ejected only upon court authority in a final and executory judgment, after due notice and hearing, and only for the causes enumerated by law. The burden of proving a lawful cause for ejectment rests on the agricultural lessor. Non-payment of lease rentals is a ground for ejectment only if it is willful and deliberate and has lasted at least two years; mere failure to pay, absent deliberate intent, does not justify dispossession. The doctrine of immutability of final judgments yields where the rigid application of procedural rules would frustrate substantial justice, especially where a defect of jurisdiction appears, and agrarian adjudicators are not bound by technical rules of procedure and evidence.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, leaving the tenants in peaceful possession and cultivation of the land subject to payment of the arrears computed by the Municipal Agrarian Reform Officer.

Remember This

Memorize this line: the agricultural lessor bears the burden of proving a willful and deliberate non-payment lasting at least two years, and absent that proof there is no cause for ejectment. Examiners use this case on security of tenure, on the elements of non-payment as a ground for ejectment, and on the exceptions to the immutability of final judgments.