HEIRS OF TAN V POLLESCAS GR145568

HEIRS OF TAN V POLLESCAS

The Antecedents

FACTS:

1.   Petitioners Norma Tan, Jeanette Tan, Julieta Tan, Rommel^[3] Tan and Enrique Tan, Jr. (Tan Heirs) are co-owners of a coconut farmland (Land) located at Labo, Ozamis City with an area of 25,780 square meters.^[4]

2.   Esteban Pollescas (Esteban) was the original tenant of the Land.

3.   Upon Estebans death in 1991, his son Enrique Pollescas (Enrique) succeeded him and was appointed as tenant by the landowner Enrique Tan (Tan).^[5]

4.   However, respondent Reynalda Pollescas (Reynalda), Estebans surviving second spouse, demanded that Tan recognize her as Estebans successor.

5.   Tan did not accede.

6.   Thus, Reynalda filed with DARAB-Ozamis a complaint for Annulment of Compromise Agreement, Quieting of Tenancy Relationship and damages.^[6]

DARAB:     1. declared Reynalda as the lawful tenant of the Land.    

2. apportioned the harvests between the Tan Heirs and Reynalda based on the customary sharing system which is 2/3 to the landowner and 1/3 to the tenant.^[7]

7.   Reynalda failed to deliver to the Tan Heirs 2/3 of the harvests.

8.   The Tan Heirs demanded Reynalda to pay such amount.^[8] However, Reynalda ignored the demand.

9.   Tan Heirs filed a complaint for estafa against Reynalda

MTC: Reynalda guilty of estafa^[10]

10.                Reynalda continued failure to deliver their share, the Tan Heirs filed with the DARAB an ejectment case.^[12]

DARAB Misamis: ruled in favor of the Tan Heirs.

Reynalda Pollescas is ordered to vacate

11.                Reynalda appealed to DARAB-Diliman

DARAB-Diliman: reversed the decision of the DARAB-Misamis ordering

the landowners to respect the peaceful possession and cultivation of the subject landholding.

Reynalda is ordered to pay her unpaid leasehold rentals.

CA: AFFIRMED

Roxas y Cia v. Cabatuando,---mere failure of a tenant to pay the landholders share does not necessarily give the latter the right to eject the former when there is lack of deliberate intent on the part of the tenant to pay x x x.

The Court of Appeals held that Reynaldas failure to deliver the full amount of the Tan Heirs share could not be considered as a willful and deliberate intent to deprive the Tan Heirs of their share.

The Court of Appeals held that Reynalda honestly believed that she was entitled to a share of the harvests in 1992-1993

The Court of Appeals further declared that the rental must be legal to consider non-payment of such as a ground for ejectment. The appellate court stated that:

Any excess in payment of rental shall be considered illegal.

Section 34 of RA 3844 provides that the consideration for the lease of riceland and lands devoted to other crops shall not be more than the equivalent of twenty-five per centum of the average normal harvest.

The tenant is obliged to pay a maximum of 25% of the normal harvest and not two thirds as in the case at bar.

Section 8 of Republic Act No. 3844 (RA 3844), nothing in the law that makes failure to deliver share a ground for extinguishment of leasehold agreement.^[18] Reynaldas failure to deliver fully the share of the Tan Heirs is not sufficient to disturb the agricultural leasehold relation.^[19]

The Issues

W/N REYNALDA IS OBLIGED TO PAY ONLY 1/4 OR 25% OF THE NORMAL HARVEST AND NOT 2/3 WHEN THE SUBJECT LAND WAS NOT YET PLACED UNDER THE LEASEHOLD SYSTEM PURSUANT TO SECTION 12 OF RA 6657.^[20]

W/N REYNALDA SHULD BE DISPOSSESSED OF THE LANDHOLDING DUE TO NON-PAYMENT OF RENT

  

The Ruling of the Court

On 8 August 1963, RA 3844 or the Agricultural Land Reform Code^[21] abolished and outlawed share tenancy and put in its stead the agricultural leasehold system.^[22] 

No ground for dispossession of landholding

Section 7 of RA 3844 as amended provides that once there is a leasehold relationship, the landowner cannot eject the agricultural tenant from the land unless authorized by the court for causes provided by law.^[27] 

RA 3844 as amended expressly recognizes and protects an agricultural leasehold tenants right to security of tenure.^[28]

Section 36 of RA 3844 | Grounds for Dispossession:

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 harvests on his landholding during the last five preceding calendar years;

(2) The agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the provisions of this Code unless his failure is caused by fortuitous event or force majeure;

(3) The agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed upon;

(4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section twenty-nine;

(5) The land or other substantial permanent improvement thereon is substantially damaged or destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee;

(6) The agricultural lessee does not pay the lease rental when it falls due: 

Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; or

(7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty-seven.

APPLICATION:  

In the instant case, the Tan Heirs seek Reynaldas ejectment from the Land on the ground of non-payment of lease rental

The Court agrees with the CA that for non-payment of the lease rental to be a valid ground to dispossess the agricultural lessee of the landholding, the amount of the lease rental must first of all be lawful.

If the amount of lease rental claimed exceeds the limit allowed by law, non-payment of lease rental cannot be a ground to dispossess the agricultural lessee of the landholding.

Section 34 of RA 3844 mandates that not more than 25% of the average normal harvest shall constitute the just and fair rental for leasehold.

 In this case, the Tan Heirs demanded Reynalda to deliver 2/3 of the harvest as lease rental, which clearly exceeded the 25% maximum amount prescribed by law.

 Therefore, the Tan Heirs cannot validly dispossess Reynalda of the landholding for non-payment of rental precisely because the lease rental claimed by the Tan Heirs is unlawful.

Even assuming Reynalda agreed to deliver 2/3 of the harvest as lease rental, Reynalda is not obliged to pay such lease rental for being unlawful. There is no legal basis to demand payment of such unlawful lease rental. The courts will not enforce payment of a lease rental that violates the law. There was no validly fixed lease rental demandable at the time of the harvests. Thus, Reynalda was never in default.

Reynalda and the Tan Heirs failed to agree on a lawful lease rental. Accordingly, the DAR must first fix the provisional lease rental payable by Reynalda to the Tan Heirs pursuant to the second paragraph of Section 34 of RA 3844 as amended.^[30] 

Until the DAR has fixed the provisional lease rental, Reynalda cannot be in default in the payment of lease rental since such amount is not yet determined. There can be no delay in the payment of an undetermined lease rental because it is impossible to pay an undetermined amount. That Reynalda is not yet in default in the payment of the lease rental is a basic reason why she cannot be lawfully ejected from the Land for non-payment of rental.^[31]

No ground for extinguishment of leasehold relation

The Court also holds that there is no ground for the extinguishment of leasehold relation in this case.

Only in the instances stated in Sections 8 and 28 of RA 3844 as amended can leasehold relation be terminated.

SEC. 8. Extinguishment of Agricultural Leasehold Relation.The agricultural leasehold relation established under this Code shall be extinguished by:

(1)               Abandonment of the landholding without the knowledge of the agricultural lessor;

(2)               Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served three months in advance; or

(3)               Absence of the persons under Section nine to succeed to the lessee, in the event of death or permanent incapacity of the lessee.

SEC. 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year.The agricultural lessee may terminate the leasehold during the agricultural year for any of the following causes:

(1)               Cruel, inhuman or offensive treatment of the agricultural lessee or any member of his immediate farm household by the agricultural lessor or his representative with the knowledge and consent of the lessor;

(2)               Non-compliance on the part of the agricultural lessor with any of the obligations imposed upon him by the provisions of this Code or by his contract with the agricultural lessee;

(3)               Compulsion of the agricultural lessee or any member of his immediate farm household by the agricultural lessor to do any work or render any service not in any way connected with farm work or even without compulsion if no compensation is paid;

            (4)               Commission of a crime by the agricultural lessor or his representative against the agricultural lessee or any member of his immediate farm household; or

(5)               Voluntary surrender due to circumstances more advantageous to him and his family.

WHEREFORE, the Court DENIES the petition and AFFIRMS the assailed Decision dated 31 August 2000 of the Court of Appeals in CA-G.R. SP No. 48823. The Court REMANDS this case to the Department of Agrarian Reform for the determination of the provisional lease rental. Costs against petitioners.