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

Hilario versus Baltazar

The Case

This is a petition for review on certiorari brought by the spouses Bonifacio Hilario and Eduarda Buencamino Hilario against the Intermediate Appellate Court and Salvador Baltazar. The dispute is an agrarian one: Baltazar claims to be a share tenant entitled to security of tenure over a parcel of land, while the Hilarios, who acquired the land at a foreclosure sale from the Philippine National Bank, insist that he is not a tenant and that the land is residential, not agricultural. The case matters because it gathers into one decision the essential requisites of a tenancy relationship and the rule that a lot inside the poblacion is presumed residential unless clearly shown otherwise.

Procedural History

On January 13, 1981, Salvador Baltazar filed a verified complaint with the Court of Agrarian Relations, Branch VI at Baliuag, Bulacan, alleging continuous possession as a share tenant since January 1955 and asking that the Hilarios be restrained from fencing off a portion of the land. On November 27, 1981, the Court of Agrarian Relations ruled that the land was not an agricultural landholding but plain bakuran, meaning a residential yard, and that Baltazar was not a tenant. Baltazar appealed, and on January 30, 1982, the Court of Appeals remanded the case for further proceedings because the findings of the Court of Agrarian Relations were not supported by substantial evidence. On remand, the agrarian court admitted additional evidence, and on December 19, 1983, it also admitted the petitioners' third party complaint against the Philippine National Bank. On the basis of the affidavits and documentary exhibits, the Court of Agrarian Relations again declared Baltazar not a tenant and ordered his ejectment, dismissing the third party complaint. Baltazar appealed once more, and the Intermediate Appellate Court reversed, declaring him a leasehold tenant entitled to security of tenure over 1,740 square meters. The Hilarios then filed this petition for review on certiorari with the Supreme Court.

Facts

Salvador Baltazar claimed that since January 1955 he had been in continuous possession as a share tenant of about two hectares in San Miguel, Bulacan, previously owned by Socorro Vda. de Balagtas, by virtue of a Kasunduan executed on January 8, 1979. He said he erected his house and planted halaman, dividing the produce with the landowner, and that after Socorro's death he gave the landowner's share to her daughter Corazon Pengzon. Only in December 1980 did he learn that a portion of four thousand square meters was already owned by the Hilarios, who allegedly threatened him and planned to fence the portion off.

The Hilarios answered that they acquired the four thousand square meter landholding from the Philippine National Bank after foreclosure, by a deed of sale executed between Bonifacio Hilario and the bank. Corazon Pengzon testified that she owned only two lots, with a total area of 1,740 square meters, that the other two lots were owned by Ruben Ocampo and Juan Mendoza, and that when the property was partitioned in 1964 she declared it as bakuran located in the Poblacion, knowing only of bananas and pomelos planted on it.

On remand, the Court of Agrarian Relations found no tenancy relationship between Baltazar and Corazon Pengzon. It noted that the two-hectare land had been parcelled into seven and that possession was relinquished in 1965, terminating any tenancy. Corazon Pengzon testified that she never received any share from the produce from 1964 onward, and that she told Baltazar he could stay only to avoid trouble, although she did not understand his contract with her mother. Baltazar, for his part, is a full-time government employee working in the Bureau of Plant Industry.

Issues

• Whether or not the Intermediate Appellate Court erred in disturbing the findings of fact of the Court of Agrarian Relations, which were supported by substantial evidence.
• Whether or not the Intermediate Appellate Court erred in substituting its own findings of fact for those of the Court of Agrarian Relations.
• Whether or not the Intermediate Appellate Court erred in not affirming the decision of the Court of Agrarian Relations finding the lots of 1,740 square meters to be residential and Baltazar not a tenant.

Applicable Provisions

The decision does not quote a statutory text; it applies the settled requisites of tenancy as stated in Tiongson versus Court of Appeals, which the Court adopts:

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.

This rule bears on the case because Baltazar must first establish every requisite of tenancy before he may claim security of tenure.

Ruling

On the first two issues, the Court held that an appellate court may affirm the findings of the Court of Agrarian Relations only if substantial evidence supports them, but that after a careful consideration of the records it found no valid reason to deviate from those findings. The evidence of the petitioners was more than sufficient to justify the conclusion that Baltazar is not a tenant of the landholding in question.

On the third issue, the Court held that the land is residential and not agricultural. The disputed property of 1,740 square meters lies in the poblacion of San Miguel, Bulacan, not far from the municipal building and the church, and is divided into two lots. It was acquired at a foreclosure sale from the Philippine National Bank, purchased as residential lots and so described in the deed of sale; the bank's inspection and appraisal report classified it as residential; and the declaration of real property approved by the Acting Provincial Assessor of Bulacan classifies it as residential. The Court ruled that the appellate court's presumption was reversed: a lot inside the poblacion should be presumed residential, commercial, or non-agricultural unless clearly preponderant evidence shows it to be agricultural. Even if some corn was planted, this does not convert residential land into agricultural land.

The Court also stressed that tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land; it is also a legal relationship, and the intent of the parties and their written agreements are even more important. The law accords the landholder the right to choose his tenant, so tenancy can be created only with the consent of the true and lawful landholder, not by imposition or usurpation. Corazon Pengzon never gave her consent, and Baltazar paid no rental or share. The requisites of tenancy were therefore not met.

Doctrine

A tenancy relationship requires four requisites: the parties are the landholder and the tenant; the subject is agricultural land; the purpose is agricultural production; and there is consideration. The absence of any one requisite means the alleged tenant is not a de jure tenant and is not entitled to security of tenure. Tenancy is created only with the consent of the true and lawful landholder, and mere cultivation by a usurper confers no legal right. A lot inside the poblacion is presumed residential, commercial, or non-agricultural unless clearly preponderant evidence shows it to be agricultural.

Disposition

The petition was granted; the decision of the Intermediate Appellate Court was reversed and set aside, and the decision of the Court of Agrarian Relations was affirmed. The Hilarios won.

Remember This

Memorize the four requisites of tenancy and the rule that all are necessary, for without them there is no de jure tenant and no security of tenure. Examiners use this case to test the residential-versus-agricultural presumption for lots inside the poblacion and the requirement of the landholder's consent.