EUFROCINA NIEVES, as represented by her attorney-in-fact, LAZARO VILLAROSA,

JR., Petitioner, vs. ERNESTO DULDULAO and FELIPE PAJARILLO, Respondents.

G.R. No. 190276              

April 2, 2014

PONENTE: PERLAS-BERNABE, J.:

DOCTRINE: The mere failure of a tenant to pay the landholder's 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.

NATURE OF THE CASE:

Assailed in this petition for review on certiorari are the Decision dated June 4, 2009 and the
Resolution dated November 5, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 105438
which set aside the Decision dated December 13, 2007 and the Resolution dated March 13, 2008
of the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No.
14727, holding that the tenancy relations between petitioner Eufrocina Nieves (petitioner) and
respondents Ernesto Duldulao (Ernesto) and Felipe Pajarillo (Felipe) remain valid and
enforceable.

FACTS:

Petitioner is the owner of a piece of agricultural rice land with an area of six (6) hectares, more
or less, located at Dulong Bayan, Quezon, Nueva Ecija (subject land). Ernesto and Felip
(respondents) are tenants and cultivators of the subject land who are obligated to each pay
leasehold rentals of 45 cavans of palay for each cropping season, one in May and the other in
December.

Claiming that Ernesto and Felipe failed to pay their leasehold rentals since 1985 which had
accumulated to 446.5 and 327 cavans of palay, respectively, petitioner filed a petition on March
8, 2006 before the DARAB Office of the Provincial Adjudicator (PARAD), seeking the
ejectment of respondents from the subject land for non-payment of rentals.

Prior to the filing of the case, a mediation was conducted before the Office of the Municipal
Agrarian Reform Officer and Legal Division in 2005 where respondents admitted being in
default in the payment of leasehold rentals equivalent to 200 and 327 cavans of palay,
respectively, and promised to pay the same. Subsequently, however, in his answer to the petition,
Ernesto claimed that he merely inherited a portion of the back leasehold rentals from his
deceased father, Eugenio Duldulao, but proposed to pay the arrearages in four (4) installments
beginning the dayatan cropping season in May 2006. On the other hand, Felipe denied incurring
any back leasehold rentals, but at the same time proposed to pay whatever there may be in six (6)
installments, also beginning the dayatan cropping season in May 2006. Both respondents
manifested their lack of intention to renege on their obligations to pay the leasehold rentals due,
explaining that the supervening calamities, such as the flashfloods and typhoons that affected the
area prevented them from complying.

The PARAD declared that the tenancy relations between the parties had been severed by
respondents’ failure to pay their back leasehold rentals, thereby ordering them to vacate the
subject land and fulfill their rent obligations.

With respect to Ernesto, the PARAD did not find merit in his claim that the obligation of his
father for back leasehold rentals, amounting to 446 cavans of palay, had been extinguished by his
death. It held that upon the death of the leaseholder, the leasehold relationship continues between
the agricultural lessor and the surviving spouse or next of kin of the deceased as provided by
law; hence, the leasehold rent obligations subsist and should be paid.

As for Felipe, the PARAD found that his unpaid leasehold rentals had accumulated to 327
cavans of palay, and that his refusal to pay was willful and deliberate, warranting his ejectment
from the subject land.

Dissatisfied, respondents elevated the case on appeal.

The DARAB issued an Order deputizing the DARAB Provincial Sheriff of Nueva Ecija and the
Municipal Agrarian Reform Officer of Talavera, Nueva Ecija to supervise the harvest of palay
over the subject land. However, when the Sheriff proceeded to implement the same on April 27,
2007, he found that the harvest had been completed and the proceeds therefrom had been used to
pay respondents’ other indebtedness.

On December 13, 2007, the DARAB issued a Decision affirming the findings of the PARAD
that indeed, respondents were remiss in paying their leasehold rentals and that such omission was
willful and deliberate, justifying their ejectment from the subject land.

Unperturbed, respondents elevated the matter to the CA.

The CA granted respondents’ petition for review, thereby reversing the ruling of the DARAB
terminating the tenancy relations of the parties. While it found respondents to have been remiss
in the payment of their leasehold rentals, it held that the omission was not deliberate or willful.
Notwithstanding the DARAB’s findings with respect to the amounts of respondents’ rental
arrearages, the CA gave full credence to their assertions and observed that Felipe failed to pay
only 293 cavans of palay or 16.28% of the total leasehold rentals due from 1985 to 2005, while
Ernesto failed to pay only 107.5 cavans of palay or 6% of the total leasehold rentals. Relying on
the Court’s ruling in the case of De Tanedo v. De La Cruz (De Tanedo), the CA then concluded
that respondents substantially complied with their obligation to pay leasehold rentals, and, hence,
could not be ejected from the subject land despite their failure to meet their rent obligations as
they became due.

Aggrieved, petitioner filed a motion for reconsideration which was, however, denied by the CA.
ISSUE:

Whether or not the CA correctly reversed the DARAB’s ruling ejecting respondents from the
subject land.

RULING:

Agricultural lessees, being entitled to security of tenure, may be ejected from their landholding
only on the grounds provided by law. These grounds – the existence of which is to be proven by
the agricultural lessor in a particular case – are enumerated in Section 36 of Republic Act No.
(RA) 3844, otherwise known as the "Agricultural Land Reform Code," which read as follows:

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 harvests on
his landholding during the last five preceding calendar years; (as amended by RA 6389)

(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. (Emphases supplied)
To eject the agricultural lessee for failure to pay the leasehold rentals under item 6 of the above-
cited provision, jurisprudence instructs that the same must be willful and deliberate in order to
warrant the agricultural lessee’s dispossession of the land that he tills. As explained in the case of
Sta. Ana v. Spouses Carpo:

Under Section 37 of Republic Act No. 3844, as amended, coupled with the fact that the
respondents are the complainants themselves, the burden of proof to show the existence of a
lawful cause for the ejectment of the petitioner as an agricultural lessee rests upon the
respondents as ag-ricultural lessors. This proceeds from the principle that a tenancy relation-ship,
once established, entitles the tenant to security of tenure. Petitioner can only be ejected from the
agricultural landholding on grounds provided by law. Section 36 of the same law pertinently
provides:

Sec. 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:

(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 disposses-sion, although
the obligation to pay the rental due that particular crop is not thereby extinguished.

Respondents failed to discharge such burden. The agricultural tenant's failure to pay the lease
rentals must be willful and deliberate in order to warrant his dispossession of the land that he
tills.

Petitioner’s counsel opines that there appears to be no decision by this Court on the matter; he
thus submits that we should use the CA decision in Cabero v. Caturna. This is not correct. In an
En Banc Decision by this Court in Roxas y Cia v. Cabatuando, et al., we held that under our law
and jurisprudence, mere failure of a tenant to pay the landholder's 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. This ruling has not been overturned.

In the present case, petitioner seeks the dispossession of respondents from the subject land on the
ground of non-payment of leasehold rentals based on item 6, Section 36 of RA 3844. While
respondents indeed admit that they failed to pay the full amount of their respective leasehold
rentals as they become due, they claim that their default was on account of the debilitating
effects of calamities like flashfloods and typhoons. This latter assertion is a defense provided
under the same provision which, if successfully established, allows the agricultural lessee to
retain possession of his landholding. The records of this case are, however, bereft of any showing
that the aforestated claim was substantiated by any evidence tending to prove the same. Keeping
in mind that bare allegations, unsubstantiated by evidence, are not equivalent to proof, the Court
cannot therefore lend any credence to respondents’ fortuitous event defense.
Respondents’ failure to pay leasehold rentals to the landowner also appears to have been willful
and deliberate. They, in fact, do not deny – and therefore admit – the landowner’s assertion that
their rental arrearages have accumulated over a considerable length of time, i.e., from 1985 to
2005 but rely on the fortuitous event defense, which as above-mentioned, cannot herein be
sustained. In the case of Antonio v. Manahan (Antonio), the Court, notwithstanding the tenants’
failure to prove their own fortuitous event theory, pronounced that their failure to pay the
leasehold rentals was not willful and deliberate. The records in said case showed that the
landowner actually rejected the rentals, which amounted only to 2 years-worth of arrearages, i.e.,
1993 and 2001, tendered by the tenants therein due to their supposed poor quality. This
circumstance was taken by the Court together with the fact that said tenants even exerted efforts
to make up for the rejected rentals through the payments made for the other years. In another
case, i.e., Roxas v. Cabatuando (Roxas), the Court similarly held that the tenants therein did not
willfully and deliberately fail to pay their leasehold rentals since they had serious doubts as to the
legality of their contract with respect to their non-sharing in the coconut produce, which thus
prompted them to withhold their remittances in good faith. In contrast to Antonio and Roxas, the
landowner in this case never rejected any rental payment duly tendered by respondents or their
predecessors-in-interest. Neither was the legality of their agricultural leasehold contract with the
landowner ever put into issue so as to intimate that they merely withheld their remittances in
good faith. Thus, with the fortuitous event defense taken out of the equation, and considering the
examples in Antonio and Roxas whereby the elements of willfulness and deliberateness were not
found to have been established, the Court is impelled to agree with the DARAB that respondents
herein willfully and deliberately chose not to pay their leasehold rentals to the landowner when
they fell due. The term "willful" means "voluntary and intentional, but not necessarily
malicious,"35 while the term "deliberate" means that the act or omission is "intentional,"
"premeditated" or "fully considered.” These qualities the landowner herein had successfully
established in relation to respondents’ default in this case. Accordingly, their dispossession from
the subject land is warranted under the law.

In this relation, the Court observes that the CA’s reliance in the De Tanedo ruling was altogether
misplaced for the simple reason that the substantial compliance defense in that case was actually
invoked against a violation of a peculiar term and condition of the parties’ agricultural leasehold
contract, particularly requiring the payment of advance rentals "pursuant to [the agricultural
lessee’s] agreement with the landholders," and not his mere failure to pay the leasehold rentals
regularly accruing within a particular cropping season, as in this case.

FALLO:

WHEREFORE, the petition is GRANTED. The Decision dated June 4, 2009 and the Resolution
dated November 5, 2009 of the Court of Appeals in CA-GR. SP No. 105438 are REVERSED
and SET ASIDE. The Decision dated December 13, 2007 of the Department of Agrarian Reform
Adjudication Board in DARAB Case No. 14727 is REINSTATED and AFFIRMED with the
MODIFICATION ordering respondents Ernesto Duldulao and Felipe Pajarillo to pay petitioner
Eufrocina Nieves the pertinent rental arrearages reckoned from the May 2003 cropping season,
until they have vacated the landholding subject of this case.