FRED ENRIQUEZ, PETITIONER, VS. HON. DOMINGO M. CABANGON, PRESIDING JUDGE, CAR, SAN FERNANDO PAMPANGA, AND JUAN MANALO, RESPONDENTS.

Enriquez versus Cabangon

The Case

This is the case of Enriquez versus Cabangon, decided by the Supreme Court in September 1966. It pits Fred Enriquez, a landholder in Guagua, Pampanga, against his tenant Juan Manalo, and it reaches us as a direct appeal by certiorari from a decision of the Court of Agrarian Relations. The tenant sued to recover palay that his landlord had taken from the gross produce, and to convert their share tenancy into a leasehold. The case matters because it draws a sharp line between two kinds of deductions from the harvest, and because it tells us exactly how notice is given under the Rice Tenancy Act, both for a tenant who wants to change the system and for a landlord who wants his land back.

Procedural History

Juan Manalo filed his petition before the Court of Agrarian Relations, Third Regional District, in April 1962. After trial, the Agrarian court ruled for the tenant in July 1963. It allowed recovery of the palay or its equivalent value, declared the tenancy to be on a leasehold basis beginning with the agricultural year 1963 to 1964, and dismissed the landlord's counterclaims. It denied the tenant litigation expenses and counsel fees for lack of bad faith. The landlord, Enriquez, appealed directly to the Supreme Court, assigning errors of fact and of law. The Supreme Court noted that questions of fact in agrarian cases must go to the Court of Appeals, so that by appealing directly the landlord waived them, and the Court confined its review to questions of law.

Facts

Juan Manalo cultivated first class riceland in Guagua, Pampanga, as tenant of Fred Enriquez. From the gross produce of the land, the landlord took 10 and one third cavanes of palay in addition to his own share, and deposited the grain in a rice mill. That quantity corresponded to the reaping and insecticide expenses that the tenant had shouldered.

In April 1962, the tenant petitioned the Court of Agrarian Relations to recover that palay, and to change the tenancy from share tenancy to lease tenancy under Republic Act Number 1199, at an annual rental of 37.5 cavanes, which he claimed was 25 percent of the average gross produce. He also prayed for litigation expenses and attorney's fees.

The landlord admitted taking the 10 and one third cavanes. He denied the rest, pleaded that the provision allowing a change of system was unconstitutional, and objected that he had received no notice of the change. He claimed the tenant had forfeited his right to stay by cultivating other landholdings without consent, and counterclaimed for ejectment, saying the land had been injured and that his son urgently needed it. The Agrarian court found for the tenant on all these points.

Issues

• Whether or not the landlord may retain the 10 and one third cavanes of palay deducted from the gross crop, under the provision of the Rice Tenancy Act that disallows reimbursement of contributions once rendered.
• Whether or not the provision of the Rice Tenancy Act allowing a change in the system of tenancy is constitutional.
• Whether or not the tenant's petition itself served as sufficient notice of the change of tenancy system.
• Whether or not the tenant forfeited his right to change the system by cultivating other lands and employing subtenants.
• Whether or not the landlord's counterclaim in his answer was adequate notice of his intention to cultivate the land himself through his son.

Applicable Provisions

Section 34 of the Rice Tenancy Act, Republic Act Number 1199, provides:

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 landlord invoked this to bar recovery, but the Court held it covers only shared contributions, not the expenses that are deducted and reimbursed under section 32.

Section 32 of the same Act, as amended, provides in its operative part:

SEC. 32. Share Basis. - The parties shall, on ricelands which produce a normal average of more than forty cavans per hectare for the three agricultural years next preceding the current harvest, receive as shares in the gross produce, after setting aside the same amount of palay used as seed, and after deducting the cost of fertilizer, pest and weed control, irrigation fees, reaping of not more than ten per centum of the gross harvest, threshing and, whenever applicable, broadcasting or other farm operations not listed in this Act as contributions or labor of tenant, the amount corresponding to the total equivalent of their individual contributions, computed as follows: Contributions Participation Per Cent 1. Land 30 2. Labor 30 3. Farm Implements 5 4. Work Animals 5 5. Final harrowing of the field immediately before the transplanting 5 6. Transplanting 25 Provided, however, That the participation of any of the contributions enumerated above which are not actually contributed because of the nature of the farming culture followed, shall be divided between the landholder and tenant in the same proportion as their total contribution to the production.

This is the provision that governs the palay in dispute, because reaping and pest control costs are deducted from the gross produce and reimbursed to whoever paid them.

Section 14 of the Rice Tenancy Act, as amended, requires of the tenant only that the right to change the system be exercised, in the words of the Court, "at least one month before the agricultural year when the change shall be effected", and it prescribes no particular form of notice.

Section 50, paragraph a, of the same Act provides:

at least one year prior to the date of his petition, must file notice with the Court and inform the tenant in writing in a language or dialect known to the latter of his intention to cultivate the land

This governs the landlord's counterclaim, and it demands a written notice to the tenant one year ahead of the petition, separate from the petition itself.

Ruling

On the first issue, the Court held that the landlord must return the palay. Section 34 speaks of contributions or shares to production, and does not include the cost of seed, fertilizer, pest or weed control, reaping and threshing. Under section 32, those expenditures are deducted from the gross produce and are not shared but reimbursed to the one who paid for them. Since the Agrarian court found that the 10 and one third cavanes covered the tenant's reaping and insecticide expenses, his right to recover was indubitable.

On the second issue, the Court declined to re-examine the constitutional question at length. The validity of that part of the law had already been upheld in final decisions, and the landlord offered no new argument or authority to warrant a deviation.

On the third issue, the Court found nothing in section 14 requiring a notice separate from the petition. The petition itself, served on the landlord, was effective as notification, and since the change took effect in the crop year after filing, no prejudice was caused.

On the fourth issue, the Court overruled the forfeiture argument, because the factual basis for it, that the tenant cultivated excess land and employed subtenants, was found by the Agrarian court to be non-existent.

On the fifth issue, the Court held the counterclaim insufficient as notice. Unlike section 14, the language of section 50, paragraph a, is clear that the written notice of dispossession must not only be filed in court but also furnished to the tenant one year ahead of the petition, so it cannot be merged with the petition itself.

Doctrine

First, contributions or shares in production under section 34 of the Rice Tenancy Act are not reimbursable once rendered, but the items enumerated in section 32, such as seed, fertilizer, pest and weed control, irrigation, reaping and threshing, are deducted from the gross produce and reimbursed to the party who paid them. A landlord who takes them in addition to his share takes what the law does not give him.

Second, the tenant's right to change the tenancy system under section 14 is exercised by the petition itself, served on the landlord at least one month before the agricultural year when the change takes effect, and no separate or particular form of notice is required.

Third, the landlord's notice of intention to cultivate the land personally under section 50, paragraph a, must be in writing, filed with the Court, and furnished to the tenant at least one year before the petition. It cannot be merged with the answer or counterclaim.

Disposition

The Supreme Court affirmed the decision of the Agrarian court in full, with costs against the landlord Fred Enriquez.

Remember This

Memorize the pairing: section 34 shares are never reimbursed, while section 32 costs are deducted and reimbursed to the payer. Examiners use this case to test the distinction between shared contributions and deductible expenses, and the contrast between the tenant's one month petition-notice and the landlord's one year written notice.