BONIFACIO L. HILARIO AND EDUARDA M. BUENCAMINO HILARIO, PETITIONERS, VS. HONORABLE INTERMEDIATE APPELLATE COURT AND SALVADOR BALTAZAR, RESPONDENTS.

This is a petition for review on certiorari of the Court
of Appeals’ decision declaring Salvador Baltazar a
leasehold tenant entitled to security of tenure on a parcel of land consisting
of 1,740 square meters.

On January 13, 1981,
Salvador Baltazar filed a verified complaint with the
Court of Agrarian Relations, Branch VI at Baliuag, Bulacan alleging that since January, 1955 he had been in
continuous possession as a share tenant of a parcel of land with an area of
about 2 hectares situated in San Miguel, Bulacan,
which was pre­viously owned by one Socorro Vda. de Balagtas; that on or about December 27, 1980, and
thereafter, the spouses Hilario began to threaten him
to desist from entering and cultivating a portion of the aforesaid land with an
area of 4,000 square meters an otherwise committed acts in violation of his
security of tenure; that the Hilarios were
contemplating the putting up of a fence around the said portion of 4,000 square
meters and that unless res­trained by the court, they would continue to do so
to his great irreparable injury.

Baltazar claims that he became a tenant
of Socorro P. Vda. de Balagtas on the latter’s two-hectare landhold­ing located
at San Juan, San Miguel, Bulacan by virtue of a “Kasunduan”
executed between them on January 8,
1979.  He states that he
erected his house and planted “halaman“,
the produce of which was divided at 70-30 and 50-50
(sic) in his favor.  After
the death of Socorro P. Vda. de Balagtas, he allegedly gave the
share pertaining to the landowner to her daughter Corazon Pengzon.  It was only in December, 1980 that he came to
know that a portion of the 2 hectares or 4,000 square meters is already owned
by the Hilarios.

On the other hand, the petitioners aver that they acquired the
landholding of 4,000 square meters from the Philippine National Bank (PNB)
after it had been fore­closed by virtue of a deed of sale executed between Bonifacio Hilario and the
PNB.  The former owner Corazon Pengzon testified that she owned only two lots – Lot
427-B with an area of 841 square meters and Lot 427-C
with an area of 899 square meters with a total area of 1,740 square
meters.  The other 2 lots were owned by
Ruben Ocampo and Juan Mendoza.  She further testified that in 1964 at the
time of the partition of the property, she declared the property for
classification purposes as “bakuran”
located in the Poblacion and had no knowledge that
there were other things planted in it except bananas and pomelos.

On November 27, 1981,
the Court of Agrarian Relations (CAR) in determining whether or not respondent Baltazar is the tenant of the petitioners ruled that the
land in question is not an agricultural landholding but plain “bakuran“, hence, Baltazar is not a tenant on the land.

On January 30, 1982,
the Court of Appeals, however, remanded the case to the lower court for further
proceedings on the ground that the findings of the Court of Agrarian Relations
(CAR) were not supported by substantial evidence.

In compliance with the
order of the Court of Appeals, the
CAR admitted additional evidence.

On December 19, 1983,
the CAR admitted the petitioners’ third party complaint filed with leave
against the Philippine National Bank (PNB) which states that in the event that
judgment would be rendered against them under the original complaint, the PNB
must contribute, indemnify, and reimburse the spouses the full amount of the
judgment.

On the basis of the parties’ and their witnesses’ affidavits
containing detailed narrations of facts and documentary exhibits which served
as their direct testimonies pursuant to PD 946, the CAR found that there was no
tenancy relationship existing between Baltazar and
the former owner, Corazon Pengzon.  The dispositive
portion of the decision reads:

“WHEREFORE, judgment is hereby rendered declaring plaintiff
not to be a tenant on the landholding des­cribed in the complaint and ordering
his ejectment therefrom.

“The third-party complaint is hereby dismissed for lack of
merit.” (pp. 25-26, Rollo)

Again, respondent
Salvador Baltazar appealed to the then Intermediate
Appellate Court (IAC).

The IAC, however,
reversed the decision of the CAR and held that:

“x x
x [T]he decision appealed from is hereby SET
ASIDE, and another one entered declaring plaintiff-appellant a leasehold tenant
entitled to security of tenure on the land in question consisting of 1,740
square meters.  Costs
against defendants-appellees.” (p. 31, Rollo)

Consequently, the spouses
Hilarios filed this peti­tion for review making the
following assignments of errors:

I.         
THE INTERMEDIATE APPELLATE COURT ERRED IN DISTURBING
THE FINDINGS OF FACTS AND DECISION OF THE COURT OF AGRARIAN RELATIONS (CAR)
WHICH IS SUPPORTED BY SUBSTANTIAL EVIDENCE.

II.       
THE INTERMEDIATE APPELLATE COURT ERRED IN
SUBSTITUTION (SIC) THE FINDINGS OF FACTS OF CAR, OF ITS OWN FINDINGS.

III.      
THE INTERMEDIATE APPELLATE COURT ERRED IN NOT
AFFIRMING THE DECISION OF CAR, FINDING THE LOTS IN QUESTION WITH AN AREA OF
1,740 SQUARE METERS AS RESIDENTIAL LOT AND PRIVATE
RESPONDENT NOT TO BE A TENANT.

We agree with the
respondent court when it stated that it can affirm on appeal the findings of
the CAR only if there is substantial evidence to support them.  However, after a careful consideration of the
records of the case, we find no valid reason to deviate from the findings of the CAR.  The evidence presented by the petitioners is
more than sufficient to justify the con­clusion that private respondent
Salvador Baltazar is not a tenant of the landholding
in question.

Salvador Baltazar claims: 
that he is working on the land in question pursuant to a “kasunduan” executed between him and Socorro Balagtas.  The
contract covers a two-hectare parcel of land. 
The disputed landholding is only 4,000 square meters more or less,
although Baltazar claims that this area is a portion
of the two hectares in the contract.  He
testified that sometime in 1965, he relinquished 1.5 hectares of the two
hectares subject of the “kasunduan” to Nemesio Ocampo, Juan Mendoza,
Miguel Ocampo and Miguel Viola and what remained
under his cultivation was 1/2 hectare owned by Corazon Pengson.  He stated that when Socorro Balagtas died, no new contract was executed.  However, he insists that the old contract was
continued between Corazon Pengson and himself.  (rollo,
p. 23).

This claim is controverted by the testimony of Corazon Pengson herself which we quote as follows:

“Q – After the death of your mother in 1965, what step, if any, have you
taken regarding this subject landholding or after the death of your mother how
did you – ?

“Q – …administer this landholding in 1963, 1964, 1965, 1966, etc?

“A –  What I did is to fix the title of ownership, sir.

COURT:

“Q – What else?

“A –  None other, Your Honor.

“Q – After the death of your mother in 1962, have you seen Mr. Salvador Baltazar in this landholding in question?

“A –  Yes, Your Honor.

“Q – What was he doing?

WITNESS:

“A –  We are neighbors, Your Honor, sometimes he visits and goes to our
place and we used to meet there, Your Honor.

“Q – What was the purpose of his
visit and your meeting in this landholding?

“A –  Sometimes when he visits our place he tells us that there are some
bananas to be harvested and sometimes there are other fruits, your Honor.

“Q – You mean to say he stays in this subject landholding consisting of
7,000 square meters?

“A –  After the survey it turned out – – –

“A –  … that he is occupying another lot which I learned that property
does not belong to us, Your Honor.

“Q – What was your arrangement regarding his stay in that landholding
which you don’t own?

“A –  He said that he had a contract with my late mother which I don’t know; in order not to cause any trouble
because I will be bothered in my business, I told him to continue, Your Honor.

“Q – What do you mean when you – – –

COURT:

(continuing)

– . . . 
told him to continue?

“A –  What I mean to say is that he can stay there although I don’t under­stand
the contract with my mother, Your Honor.

“Q – Was he paying rentals for his stay
in that lot?

“A – No, Your
Honor”.  (T.S.N.,
pp. 15-19, hearing of August 5, 1981).

Corazon Pengson further explained that she did not receive any
share from the produce of the land from 1964 up to the filing of the case and
she would not have accepted any share
from the produce of the land
because she
knew pretty well that she was no
longer the owner of the lot since 1974 when it was foreclosed by the bank and later on purchased by the spouses Hilarios.

We note the CAR’s finding:

“Tenancy relationship is indivisible.  The two-hectare land
subject of plaintiff’s alleged contract with Socorro Balagtas
having been parcelled into seven (7) and possession
thereof relinquished/surrendered in 1965 results in the termination of
plaintiff’s tenancy relationship with the previous owner/landholder.  Such being the case, he cannot now claim that
the landholding in question consisting of 4,000 square meters, more or less, is
being cultivated by him under the old contract. 
The owner thereof Corazon Pengson has no
tenancy relationship with him (plaintiff).” (p. 25, Rollo)

From the foregoing, it is
clear that Corazon Pengson did not give her consent
to Baltazar to work on her land consisting of only 1,740 square meters.  We agree with the CAR when it said:

“The law accords the landholder the right to initially choose
his tenant to work on his land.  For this
reason, tenancy relationship can only be created with the consent of the true
and lawful landholder through lawful means and not by imposition or
usurpation.  So the mere cultivation of
the land by usurper cannot confer upon him any legal right to work the land as
tenant and enjoy the protection of security of tenure of the law (Spouses Tiongson v. Court
of Appeals, 130 SCRA 482)” (Ibid)

And in the case of Tuazon v. Court of Appeals (118 SCRA 484),
this Court had the occasion to explain:

xxx                            xxx                               xxx

“x x x Tenancy is not a purely
factual relationship dependent on what the alleged tenant does upon the
land.  It is also a legal
relationship.  The intent of the parties,
the understanding when the farmer is installed, and, as in this case, their
written agreements, provided these are complied with and are not contrary to
law, are even more important.”

The respondent court
ruled that the fact that the land in question is located in the poblacion does not necessarily make it residential.

The conclusion is purely
speculative and conjectural.  We note
that the evidence presented by the petitioners sufficiently establishes that
the land in question is residential and not agricultural.

As we stated in Tiongson v.
Court of Appeals (supra) “the key factor in ascertaining
whether or not there is a landowner-tenant relationship in this case is the
nature of the disputed property.”

The records show that the disputed property, only 1,740 square
meters in area, is actually located in the poblacion
of San Miguel, Bulacan not far from the municipal
building and the church.  It is divided
into two lots — Lot 427-B with an area of 841 square
meters and Lot 427-C with an area of 899 square
meters.  Two other lots which the
respondent claims to cultivate as “tenant” were originally owned by
Ruben Ocampo and Juan Mendoza, not Corazon Pengson, through whom the respondent traces his alleged
tenancy rights.

Respondent Baltazar is a full-time government employee working in the
Bureau of Plant Industry.

The disputed lots were acquired at a foreclosure sale from the
Philippine National Bank.  They were pur­chased
as residential lots and the deed of sale describes them as
“residential”.  The inspection
and appraisal report of the PNB classified the land as residential.  The declaration of real property on the basis
of which taxes are paid and approved by the Acting Provincial Assessor of Bulacan classifies the land as residential.  The tax declarations show that the 841 square
meter lot is assessed for tax purposes at P25,236.00
while the 899 square meter lot is assessed at P26,920.00.  The owner states that the land has only
bananas and pomelos on it.  But even if the claim of the private
respondent that some corn was
planted on the lots is true, this does not convert residential land into
agricultural land.

The presumption assumed by the appellate court, that a parcel of
land which is located in a poblacion is not
necessarily devoted to residential purposes, is wrong.  It should be the other way around.  A lot inside the poblacion
should be presumed residential, or commercial or non-agricultural unless there
is clearly preponderant evidence to show that it is agricultural.

The respondent court also failed to note that the alleged tenant
pays no rental or share to the landowners. 
Baltazar made a vague allegation that he
shared 70-30 and 50-50 of the produce in his favor.  The former owner flatly denied that she ever
received anything from him.

The requirements set by
law for the existence of a tenancy relationship, to wit:  (1) The parties are the landholder and
tenant; (2) The subject is agricultural land; (3) The purpose is agricultural
production; and (4) There is consideration; have not
been met by the private respondent.

We held in Tiongson v. Court of Appeals, cited above
that:

“All these requisites are neces­sary in order to create
tenancy relationship between the parties and the absence of one or more
requisites do not make the alleged tenant a de facto tenant as
contradistinguished from a de jure
tenant.  This is so because unless a person has established his status as a de
jure tenant, he is not entitled to security of
tenure nor is he covered by the Land Reform Program of the Government under
exist­ing tenancy laws.  x x x .” (underlining supplied).

WHEREFORE, the petition is GRANTED.  The decision of the respondent Court of
Appeals is hereby REVERSED and SET ASIDE and the decision of the Court of
Agrarian Relations is AFFIRMED.

SO ORDERED.

Fernan, (Chairman), Alampay, Paras, Padilla, Bidin, and Cortes, JJ., concur.