COSME LACUESTA, PLAINTIFF-APPELLANT, VS. BARANGAY CASABAAN, MUNICIPALITY OF CABANGAN, PROVINCE OF ZAMBALES, AND TEOFILO RONQUILLO, DEFENDANTS-APPELLEES.

Lacuesta versus Barangay Casabaan

The Case

This is the case of Lacuesta versus Barangay Casabaan. Cosme Lacuesta was the agricultural lessee of a parcel of land in Barangay Casabaan, in the Municipality of Cabangan, Province of Zambales. He planted palay on a five thousand square meter portion of it. The Barangay, through its Captain, Teofilo Ronquillo, took that portion for a public plaza by virtue of an expropriation case to which Lacuesta was never made a party. Lacuesta then sued the Barangay for reinstatement and damages before the Court of Agrarian Relations. The case matters because it fixes two rules a reviewee must carry: which court has jurisdiction over the expropriation of tenanted agricultural land, and whether a tenant's security of tenure survives the exercise of eminent domain. It also shows how the Court protects a tenant even where the expropriation itself is lawful.

Procedural History

Lacuesta, litigating as a pauper, filed a complaint for reinstatement and damages before the Court of Agrarian Relations of Zambales against the Barangay, represented by its Captain, Teofilo Ronquillo. On the seventeenth of July, nineteen hundred eighty, the Court of Agrarian Relations rendered judgment dismissing the case. It held that, for reasons of comity, it may not interfere in the acts of another court of equal rank that had first acquired jurisdiction over the expropriation case. It further held that Lacuesta was not entitled to actual damages because the palay had already been harvested at the time of expropriation, nor to disturbance compensation because dispossession was not due to the causes enumerated in Section 36, paragraph 1, of the Code of Agrarian Reforms.

Lacuesta assailed that judgment before the then Court of Appeals, claiming that it is the Court of Agrarian Relations which has jurisdiction to determine whether he had the right to be reinstated in the cultivation of the landholding. He cited Section 12, paragraph n, of Presidential Decree Number 946, which vests in the Court of Agrarian Relations original and exclusive jurisdiction over expropriation proceedings for public purpose of all kinds of tenanted agricultural land. The Court of Appeals certified the appeal to the Supreme Court as involving a pure question of law, and the Supreme Court decided it in October 1984.

Facts

Cosme Lacuesta was the agricultural lessee of a landholding of one point six six one zero hectares in Barangay Casabaan, Cabangan, Zambales. He devoted a five thousand square meter portion of it to the planting of palay. The Barangay instituted expropriation proceedings against the landowners before the Court of First Instance of Zambales on the eighth of October, nineteen hundred seventy-five. Lacuesta was not a party in that case. By virtue of those proceedings, the Barangay was placed in possession of the same five thousand square meter portion.

The Barangay then converted the area into a public plaza and constructed a basketball court, a rural health center, a barangay hall, and a stage. While the expropriation case was still pending, Lacuesta filed his complaint before the Court of Agrarian Relations. He claimed that the entry of the Barangay into the litigated portion without his consent was illegal, that it deprived him of his right to continue cultivating the land, and that he lost an average annual income of seventeen and one half cavans of palay or its money equivalent. He also prayed for two thousand pesos in moral damages.

In its answer, the Barangay contended that the portion was upland, not suited for palay or corn but for sugar cane, as shown by the tax declaration covering it. It claimed that it was awarded possession by virtue of a lawful court order in the expropriation case, and that the claim of an annual harvest of seventeen and one half cavans was unfounded. By the time the Supreme Court ruled, the public plaza had been constructed and there was no longer any area Lacuesta could still cultivate.

Issues

• Whether or not the Court of Agrarian Relations, rather than the Court of First Instance, has jurisdiction over the expropriation of a tenanted agricultural landholding.
• Whether or not Lacuesta is entitled to reinstatement in the cultivation of the expropriated portion.
• Whether or not Lacuesta is entitled to damages for the deprivation of his farmholding, and in what amount.
• Whether or not Lacuesta is entitled to moral damages.

Applicable Provisions

Section 12, paragraph n, of Presidential Decree Number 946 provides:

Expropriation proceedings for public purpose of all kinds of tenanted agricultural land, whether instituted by the State, its political subdivisions and instrumentalities, or corporations and entities authorized by law to expropriate.

This is the provision Lacuesta invoked, and the Court had to weigh it against the date the decree took effect, since the expropriation case was instituted before that date.

Section 36, paragraph 1, of the Code of Agrarian Reforms, Republic Act Number 3844, provides:

Section 36. Possession of Landholding; Exceptions. 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 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 harvest of his landholding during the last five preceding calendar years.

This is the provision the Court of Agrarian Relations used to deny disturbance compensation, and the Court used its five-year measure by analogy in awarding damages.

Section 1, Rule 67 of the Rules of Court is also discussed in the decision, and the Court notes that the Barangay failed to include Lacuesta as a party in the expropriation case as that rule requires.

Ruling

On the first issue, the Court held that jurisdiction vested in the Court of First Instance, not in the Court of Agrarian Relations. Although the provision of Presidential Decree Number 946 explicitly vests jurisdiction in the Court of Agrarian Relations, that decree became effective only on the seventeenth of June, nineteen hundred seventy-six, which is posterior to the expropriation case instituted on the eighth of October, nineteen hundred seventy-five. Jurisdiction therefore vested in the Court of First Instance, where the Court found that no irregularity had been satisfactorily established.

On the second issue, the Court held that the reinstatement prayed for is obviously impossible of accomplishment because the public plaza had been constructed and there is no longer any area Lacuesta could still cultivate.

On the third issue, the Court held that, procedurally, the claim for damages should have been more properly raised in the expropriation case, since it was the case first instituted and it was the Court of First Instance that had first acquired jurisdiction. The Barangay had raised that point in its opposition to the motion for a restraining order and injunction, but it evoked no reaction from Lacuesta. The Court also faulted the Barangay for not having included Lacuesta as a party in the expropriation case as required by Section 1, Rule 67 of the Rules of Court. But procedural lapses should not prejudice Lacuesta, whose right to security of tenure as a tenant is entitled to protection even where the power of eminent domain is exercised. Although Lacuesta admitted that he is not entitled to disturbance compensation, because that is granted only to a tenant agricultural lessee whose landholding has been converted by his landowner or lessor for non-agricultural purposes and not where a tenanted farmholding is expropriated, the Court held that he should be entitled to some compensation for the deprivation of his farmholding. Since the amount he claimed was not satisfactorily rebutted, he may be awarded seventeen and one half cavans of palay or its money equivalent for a period of five years, applying by analogy the same period granted in cases where payment of disturbance compensation is warranted.

On the fourth issue, the Court held that Lacuesta is not entitled to moral damages because it cannot be said that the Barangay had acted with malice and in bad faith.

Doctrine

First, jurisdiction over the expropriation of tenanted agricultural land depends on the law in force at the time the expropriation case is instituted. Presidential Decree Number 946, which vests that jurisdiction in the Court of Agrarian Relations, applies only to cases instituted after its effectivity. Where the expropriation case was instituted before that date, jurisdiction belongs to the Court of First Instance.

Second, the agricultural lessee's right to security of tenure under Section 36 of the Code of Agrarian Reforms is entitled to protection even where the power of eminent domain is exercised. The expropriating authority must implead the tenant as a party under Section 1, Rule 67 of the Rules of Court, and procedural lapses should not prejudice the tenant.

Third, disturbance compensation under Section 36, paragraph 1, of the Code of Agrarian Reforms is granted only where the landholding is converted by the landowner or lessor for non-agricultural purposes, not where a tenanted farmholding is expropriated. Even so, the tenant is entitled to some compensation for the deprivation of his farmholding, measured by analogy to the five times the average gross harvest standard of that same provision.

Fourth, moral damages require malice or bad faith, and are not awarded where the expropriating authority acted without either.

Disposition

The appealed judgment was modified: the defendants, the Barangay and Teofilo Ronquillo, were ordered to pay Lacuesta damages of seventeen and one half cavans of palay or its money equivalent in nineteen hundred seventy-five, the year the expropriation took place, for a period of five years, with no costs.

Remember This

The line worth memorizing is that a tenant's security of tenure is entitled to protection even where the power of eminent domain is exercised, so the expropriating authority must implead him and pay him compensation measured by analogy to the disturbance compensation standard. Examiners use this case to test the retroactivity of Presidential Decree Number 946 on jurisdiction over expropriation of tenanted land, and the distinction between disturbance compensation and compensation for deprivation of a farmholding.