Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82702:56520&catid=1580&Itemid=566
Timestamp: 2019-04-21 04:10:57+00:00

Document:
RICARDO V. QUINTOS, Petitioner, v. DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD AND KANLURANG MINDORO FARMER’S COOPERATIVE, INC., Respondents.
Assailed in this petition for review on certiorari1 is the Decision2 dated July 31, 2006 and Resolution3 dated December 17, 2008 of the Court of Appeals (CA) in CA–G.R. SP No. 44430 which affirmed with modification the Decision4 dated March 20, 1997 of the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No. 1883.
GCFI is a domestic corporation organized for the purpose of engaging in poultry and livestock production, processing, and trading.7 Petitioner Ricardo V. Quintos (Quintos) is the majority stockholder8 of GCFI who managed its properties until 1975 when management was taken over by Armando Romualdez (Romualdez).
On November 3, 1993, the PARAD rendered a Decision29 (November 3, 1993 PARAD Decision), holding that there was a verbal lease tenancy agreement entered into by Lacuesta with the 53 KAMIFCI members with respect to the mango orchard, and such was binding upon APT and GCFI30 notwithstanding the Certification31 dated August 25, 1993 issued by APT denying Lacuesta’s authority to enter into any tenurial relation and to issue GCFI official receipts. As such, the PARAD directed the reinstatement of the 53 KAMIFCI members previously tending the mango trees during the 1990 to 1991 and 1991 to 1992 seasons, and ordered them to pay the corresponding consideration of P300.00 per mango tree per season. The PARAD likewise held that the riceland had already been placed under CARP coverage and acquired for disposition by the DAR.32 Accordingly, it enjoined Quintos or any person acting in his behalf from disturbing the peaceful occupation of the farmer occupants in the subject property. Aggrieved, Quintos appealed to the DARAB.
Meanwhile, the Office of the President (OP) rendered a Decision33 dated February 21, 1995 (February 21, 1995 OP Decision) in the exemption case, ruling that the cessation of poultry and livestock activities on the GCFI properties, including the subject property, a month prior to the effectivity of RA 6657, does not a priori convert the properties to agricultural lands. In this relation, the OP concluded that the act of the DAR in declaring the said properties as covered by the CARP without affording GCFI the opportunity to contest the supposed conversion was arbitrary and confiscatory.34 Hence, it set aside the October 5, 1993 DAR Order, and granted the petition for exemption, except with respect to the mango orchard, the coverage and compulsory acquisition of which was deferred pursuant to Section 1135 of RA 6657.
The DAR filed a motion for reconsideration which was, however, denied with finality in a Resolution36 dated December 20, 1995 for being filed out of time. Because of this, the February 21, 1995 OP Decision became final and executory.
On March 20, 1997, the DARAB rendered a Decision37 in the tenancy case, respecting the findings and conclusions made in the February 21, 1995 OP Decision. It also (a) declared that the farmers in the “palayan area” covering 355 has. (i.e., the Riceland) may qualify as farmer–beneficiaries in the mango orchard as may be determined by the Municipal Agrarian Reform Officer; (b) held that Certificates of Land Ownership Award (CLOAs) should be generated immediately and distributed to qualified farmer–beneficiaries; and (c) affirmed the directive for Quintos not to disturb the peaceful possession and cultivation of the farmers in the mango orchard.
On July 31, 2006, the CA rendered a Decision,40 holding that the tenancy agreement entered by APT with the 53 KAMIFCI members on the mango orchard was binding upon GCFI since all its business concerns and transactions were coursed through APT at that time. It, however, declared as premature the generation of CLOAs in favor of the farmer–beneficiaries pending exercise of the landowner’s right of retention and absent payment of just compensation. Considering that the February 21, 1995 OP Decision had already attained finality, the CA no longer tackled the issues posed with respect to the riceland.
Unperturbed, Quintos filed a motion for partial reconsideration41 which was denied in a Resolution42 dated December 17, 2008. In addition, the CA directed the DAR to conduct the appropriate survey to ascertain the actual surface area of the mango orchard. Hence, the instant petition.
The essential issue for the Court’s resolution is whether or not the CA correctly sustained the validity of the tenancy agreement purported in this case.
In the present case, the PARAD, the DARAB and the CA all held that a tenancy relationship exists between GCFI and the 53 KAMIFCI members who were allegedly installed as tenants by APT, the “legal possessor” of the mango orchard at that time. Records are, however, bereft of any showing that APT was authorized by the property’s landowner, GCFI, to install tenants thereon. To be sure, APT only assumed the rights of the original mortgagees in this case, i.e., PNB and DBP, which, however, have yet to exercise their right to foreclose the mortgaged properties due to the RTC’s order enjoining the same. It is settled that a mortgagee does not become the owner of the mortgaged property until he has foreclosed the mortgage and, thereafter, purchased the property at the foreclosure sale.49 With the foreclosure proceedings having been enjoined, APT could not have been regarded as the “landowner” of the subject property. Thus, since the consent of the standing landowner, GCFI, had not been secured by APT in this case, it had no authority to enter into any tenancy agreement with the KAMIFCI members.
When Sec. 6 provides that the agricultural leasehold relations shall be limited to the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same, it assumes that there is already an existing agricultural leasehold relation, i.e., a tenant or agricultural lessee already works the land. The epigraph of Sec. 6 merely states who are “Parties to Agricultural Leasehold Relations,” which assumes that there is already a leasehold tenant on the land; x x x.
To better understand Sec. 6, let us refer to its precursor, Sec. 8 of R.A. No. 1199, as amended. Again, Sec. 8 of R.A. No. 1199 assumes the existence of a tenancy relation. As its epigraph suggests, it is a “Limitation of Relation,” and the purpose is merely to limit the tenancy “to the person who furnishes the land, either as owner, lessee, usufructuary, or legal possessor, and to the person who actually works the land himself with the aid of labor available from within his immediate farm household.” Once the tenancy relation is established, the parties to that relation are limited to the persons therein stated. Obviously, inherent in the right of landholders to install a tenant is their authority to do so; otherwise, without such authority, x x x landholders cannot install a tenant on the landholding. Neither Sec. 6 of R.A. No. 3844 nor Sec. 8 of R.A. No. 1199 automatically authorizes the persons named therein to employ a tenant on the landholding.
WHEREFORE, the petition is GRANTED. The Decision dated July 31, 2006 and Resolution dated December 17, 2008 of the Court of Appeals in CA–G.R. SP No. 44430 are REVERSED and SET ASIDE since no valid tenancy agreement exists over the mango orchard subject of this case.
Carpio, J., (Chairperson), Velasco, Jr.,* Brion, and Perez, JJ., concur.
* Designated Additional Member per Raffle dated February 5, 2014.
2 Id. at 25–42. Penned by Presiding Justice Ruben T. Reyes (retired member of the Court), with Associate Justices Rebecca De Guia–Salvador and Monina Arevalo–Zenarosa, concurring.
3 Id. at 43–46. Penned by Associate Justice Rebecca De Guia–Salvador, with Associate Justices Ramon R. Garcia and Japar B. Dimaampao, concurring.
4 CA rollo, pp. 27–33. Penned by Assistant Secretary Lorenzo R. Reyes, with Undersecretary Hector D. Soliman, and Assistant Secretaries Augusto P. Quijano and Sergio B. Serrano, concurring.
8 Id. at 26. Quintos claims that he owns about 74% of all GCFI issued shares (id. at 11).
10 CA rollo, p. 29.
13 CA rollo, p. 37.
15 CA rollo, p. 53.
17 CA rollo, p. 53.
19 CA rollo, pp. 29 and 53.
21 Id. at 41 and 53.
22 Id. at 48; G.R. No. 86889, December 4, 1990, 192 SCRA 51.
23 CA rollo, p. 49.
26 CA rollo, pp. 50–51.
29 Id. at 37–47. Penned by Provincial Adjudicator Claro M. Almobela.
33 Id. at 52–60. Penned by then Executive Secretary Teofisto T. Guingona, Jr., by authority of the President.
35 SEC. 11. Commercial Farming. – Commercial farms which are private agricultural lands devoted to salt beds, fruit farms, orchards, vegetable and cut–flower farms, and cacao, coffee and rubber plantations, shall be subject to immediate compulsory acquisition and distribution after ten (10) years from the effectivity of this Act. In the case of new farms, the ten–year period shall begin from the first year of commercial production and operation, as determined by the DAR. During the ten–year period, the Government shall initiate steps necessary to acquire these lands, upon payment of just compensation for the land and the improvements thereon, preferably in favor of organized cooperatives or associations, which shall thereafter manage the said lands for the workers–beneficiaries.
36 CA rollo, pp. 61–64. Penned by Senior Deputy Executive Secretary Leonardo A. Quisumbing, by authority of the President.
41 CA rollo, pp. 240–254.
43Salmorin v. Dr. Zaldivar, 581 Phil. 531, 538 (2008).
44 Estate of Pastor M. Samson v. Susano, G.R. Nos. 179024 and 179086, May 30, 2011, 649 SCRA 345, 365.
45Reyes v. Spouses Joson, 551 Phil. 345, 352 (2007).
46 See Soliman v. Pampanga Sugar Development Company (PASUDECO), Inc., G.R. No. 169589, June 16, 2009, 589 SCRA 236, 249–250.
47Valencia v. CA, 449 Phil. 711, 730 (2003); VHJ Construction and Development Corp. v. CA, 480 Phil. 28, 38 (2004); Sumawang v. Engr. De Guzman, 481 Phil. 239, 247 (2004); Pag–asa Fishpond Corp. v. Jimenez, 578 Phil. 106, 130 (2008).
48 See Pag–asa Fishpond Corporation v. Jimenez, id. at 134.
49Ramirez v. CA, 456 Phil. 345, 353.
50 Section 6. Parties to Agricultural Leasehold Relation – The agricultural leasehold relation shall be limited to the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same.

References: V. 
 v. 
 V. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.