Agrarian and Social Legislation Notes

VOL. 33, MAY 29, 1970

105
Hidalgo vs. Hidalgo
No. L-25326. May 29, 1970.
IGMIDIO HIDALGO and MARTINA ROSALES, petitioners, vs. PoLICARPIO HlDALGO,
SERGIO DlMAANO, MARIA ARDE, SATURNINO HlDALGO, BERNARDINA MARQUEZ,
VlCENTE DlMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF
DEEDS and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS,
respondents.
No. L-25327. May 29, 1970.
HILARIO AGUILA and ADELA HIDALGO, petitioners, vs. POLICARPIO HIDALGO,
SERGIO DIMAANO, MARIA ARDE, SATURNINO HIDALGO, BERNARDINA MARQUEZ,
VICENTE DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF
DEEDS and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS,
respondents.
Agricultural Land Reform Code; Code abolishes agricultural share tenancy.The
very essence of the Agricultural Land Reform Code is the abolition of agricultural
share tenancy as proclaimed in its title. Section 4 of the Code expressly-outlaws
agricultural share tenancy as "contrary to public policy." section 2 of the Code
expressly declares it to be the policy of the State to "establish owner cultivatorship
and the economic family-size farm as the basis of Philippine agriculture and, as a
consequence, divert landlord capital in agriculture to industrial development; to
achieve a dignified existence for the small farmers free from pernicious institutional
restraints and practices; x x x and to make the small farmers more independent,
self-reliant and responsible citizens, and a source of strength in our democratic
society."
Same; Farmer's right of pre-emption to buy the land he cultivates; Reason.The
Land Reform Code forges by operation of law the farmer's pre-emptive right to buy
the land he cultivates under section 11 of the Code as well as the right to redeem
the land, if sold to a third person without his knowledge, under section 12 of the
Code. This is an essential and indispensable mandate of the Code to implement the
State's policy of establishing ownership-cultivatorship and to achieve a dignified and
self-reliant existence for the small farmers that would make them a pillar of strength
of our Republic. Aside from expropriation by the Land Authority of private
agricultural land for resale in economic family-size farm units "to bona fide tenants,
occupants and qualified farmers," the .purchase by farmers of the lands cultivated
by them, when the owner decides to sell the samethrough the rights of
preemption and redemptionare the only means prescribed by the Code to achieve
the declared policy of the State.
Statutory construction; Spirit or intent must prevail over Utter of the law.Where
the true intent of the law is clear such intent or spirit must prevail over the letter

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Agrarian and Social Legislation Notes

thereof, for whatever is within the spirit of a statute is within the statute, since
adherence to the letter would result in absurdity, injustice and contradictions and
would defeat the plain and vital purpose of the statute.
Agricultural Land Reform Code; Right of pre-emption; Basbas v. Entena
distinguished with case at bar.ln Basbas v. Entena, the farmer's right of
redemption was not granted because he had yet no funds to redeem the property
and had merely applied for them to the Land Authority which was not yet operating
in the locality. In the case at bar, the farmer's possession of funds and compliance
with the requirements of redemption are not questioned,
PETITIONS for review from the decisions of the Court of Agrarian Relations.
The facts are stated in the opinion of the Court.
Jose O. Lara for petitioners.
Pedro Panganiban y Tolentino for respondents.
107

VOL. 33, MAY 29, 1970

107
Hidalgo vs. Hidalgo
TEEHANKEE, J.:

Two petitions for review 01 decisions of the Court of Agrarian Relations dismissing
petitioners' actions as share tenants for the enforcement of the right to redeem
agricultural lands, under the provisions of section 12 of the Agricultural Land Reform
Code. As the same issue of law is involved and the original landowner and vendees
in both cases are the same, the two cases are herein jointly decided.
Respondent-vendor Policarpio Hidalgo was until the time of the execution of the
deeds of sale on September 27, 1963 and March 2, 1964 in favor of his seven
above-named private co-respondents, the owner of the 22,876-square meter and
7,638-square meter agricultural parcels of land situated in Lumil, San Jose,
Batangas, described in the decisions under review.
In Case L-25326, respondent-vendor sold the 22,876square meter parcel of land,
together with two other parcels of land for P4,000.00. Petitioners-spouses Igmidio
Hidalgo and Martina Rosales, as tenants thereof, alleging that the parcel worked by
them as tenants is fairly worth P1,500.00, "taking into account the respective areas,
productivities, accessibilities, and assessed values of three lots, seek by way of
redemption the execution of a deed of sale for the same amount of P1,500.00 by
respondents-vendees1 in their favor.

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In Case L-25327, respondent-vendor sold the 7,638square meter parcel of land for
P750.00, and petitioners- petitionersspouses Hilario Aguila and Adela Hidalgo as
tenants thereof, seek by way of redemption the execution of a deed of sale for the
same price of P750.00 by respondentsvendees in their favor.
______________

1 Per answer of respondents and the parties' stipulation of facts, respondentsvendees Saturnino Hidalgo and Bernardina Marquez, together with petitionersspouses Igmidio Hidalgo and Martina Rosales in Case L-25326 and -petitionersspouses Hilario Aguila and Adela Hidalgo in Case L-25327 compose the three sets of
tenants working on their lands.
As stated in the decisions under review, since the parties stipulated on the facts in
both cases, petitionerstenants have for several years been working on the lands as
share tenants. No 90-day notice of intention to sell the lands for the exercise of the
right of pre-emption prescribed by section 11 of the Agricultural Land Reform Code
(Republic Act No. 3844, enacted on August 8, 1963) was given by respondentvendor to petitioners-tenants. Subsequently, the deeds of sale executed by
respondentvendor were registered by respondents register of deeds and provincial
assessor of Batangas in the records of their respective offices notwithstanding the
non-execution by respondent-vendor of the affidavit required by section 13 of the
Land Reform Code.2 The actions for redemption were timely filed on March 26, 1965
by petitioners-tenants within the two-year prescriptive period from registration of
the sale, prescribed by section 12 of the said Code.
The agrarian court rendered on July 19, 1965 two identical decisions dismissing the
petitions for redemption/
It correctly focused on the sole issue of law as follows: "(T)he only issue in this case
is whether or not plaintiffs, as share tenants, are entitled to redeem the parcel of
land they are working from the purchasers thereof, where no notice was previously
given to them by the vendor, who was their landholder, of the latter's intention to
sell the property and where the vendor did not execute the affidavit required by
Sec. 13 of Republic Act No. 3844 before the registration of the deed of sale, In other
words, is the right of redemption granted by Sec. 12 of Republic Act No. 3844
applicable to share tenants?"
But proceeding from several erroneous assumptions and premises, it arrived at its
erroneous conclusion that the right of redemption granted by section 12 of the Land
Reform Code is available to leasehold tenants only but not to share tenants, and
thus dismissed the petitions: "(S)ec. 12 of Republic Act No. 3844, which comes
under Chapter I of said Act under the heading 'Agricultural Leasehold System,' roads
as follows:
" 'SEC. 12. Lessee's Right of Redemption.In case the landholding is sold to a third
person without the knowledge of the agricultural lessee, the latter shall have the
right to redeem the same at a reasonable price and consideration: Provided: further,

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Agrarian and Social Legislation Notes

That where there are two or more agricultural lessees, each shall be entitled to said
right of redemption only to the.extent of the area actually cultivated by him. The
right of redemption under this Section may be exercised within two years from the
registration of the sale, and shall have priority over any other right of legal
redemption.'
"The systems of agricultural tenancy recognized in this Jurisdiction are share
tenancy and leasehold tenancy. (Sec. 4, Republic Act No. 1199; Sec. 4, Republic Act
No. 3844). A share tenant is altogether different from a leasehold tenant and their
respective rights and obligations are not co-extensive or co-equal. (See Secs. 22 to
41, inclusive, and Secs, 42 to 48, inclusive, of Republic Act No, 1199: see also Secs;
4 to 38, inclusive, of Republic Act Act No. 3844).
"It is our considered view that the right of redemption granted by Section 12 of
Republic Act No. 3844 is applicable- to leasehold tenants only, but not to share
tenants, because said provision of law clearly, definitely, and unequivocally grants
said right to the 'agricultural lessee,' and to nobody- else. In enacting the
Agricultural Land -Reform Code, Congress was fully aware of the existence of share
tenancy and in fact provided for the abolition of the agricultural share tenancy
system. (Sec. 4,. Republic Act No. 3844.) If it were the intention of Congress to grant
the right of redemption to share tenants, it would have unmistakably and
unequivocally done so. We cannot extend said right to share tenants through
judicial legislation, wherever our sympathies may lie."
The agrarian court fell into several erroneous assumptions and premises in holding
that agricultural share tenancy remains recognized in this jurisdiction; that "a share
tenant is altogether different from a leasehold tenant and their respective rights and
obligations are not coextensive or co-equal"; and that the right of redemption
granted by section 12 of the Land Reform Code "is applicable to leasehold tenants
only, but not to share tenants, because said provision of law clearly, definitely, and
unequivocally grants said right to the 'agricultural lessee' and to nobody -else."
1. The very essence of the Agricultural Land Reform Code is the abolition of
agricultural share tenancy as proclaimed in its title. Section 4 of the Code expressly
outlaws agricultural share tenancy as "contrary to public. policy" and decrees its
abolition.3 Section 2 of the Code expressly declares it to be the policy of the State,
inter alia, "to establish owner cultivatorship and the economic family-size farm as
the basis of Philippine agriculture and, as a consequence, divert landlord capital in
agriculture to industrial development; to achieve a dignified existence for the small
farmers free from pernicious institutional restraints and practices; x x x and to make
the small farmers more independent, self-reliant and responsible citizens, and a
source of strength in our democratic society,"4 It was error, therefore, for the
agrarian court to state the premise after the Land Reform Code had already been
enacted, that "the systems of agricultural tenancy recognized in this jurisdiction are
share tenancy and leasehold tenancy." A more accurate statement of the premise is
that' based on the transitory provision in the first proviso of section 4 of the Code,
i.e. that existing share tenancy contracts are allowed to continue temporarily in
force and effect, notwithstanding their express abolition, until whichever of the

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Agrarian and Social Legislation Notes

following events occurs earlier: (a) the end of the agricultural year when the
National Land Reform Council makes the proclamation declaring the region or
locality a land reform area; or (b) the shorter period provided in the share tenancy
contracts expires; or (c) the share tenant sooner exercises his option to elect the
leasehold system.
In anticipation of the expiration of share tenancy contractswhether by contractual
stipulation or the tenant's exercise of his option to elect the leasehold system
instead or by virtue of their nullityoccuring before the proclamation of the locality
as a land reform area, the same section 4 has further declared in the third proviso
thereof that in such event; the tenant shall continue in possession of the land for
cultivation and "there shall be presumed to exist a leasehold relationship under the
provisions of this Code."
2. The foregoing exposes the error of the agrarian court's corollary premise that "a
share tenant is altogether different from a leasehold tenant" The agrarian court's
dictum that "their respective rights and obligations are not co-extensive or co-equal
"refer to their contractual relations with the landowner, with respect to the
contributions given, management, division or payment of the produce.5
But the Land Reform Code forges by operation of law, between the landowner and
the farmerbe a leasehold tenant or temporarily a share tenanta vinculum juris
with certain vital juridical consequences, such as security of tenure of the tenant
'and the tenant's right to continue in possession of the land he works despite the
expiration of the contract or the sale or transf er of the land to third persons, and
now, more basically, the farmer's pre-emptive right to buy the land he cultivates
under section 11 of the Code6 as well as the right to redeem the land, if sold to a
third person without his knowledge, under section 12 of the Code.
This is an essential and indispensable mandate of the Code to implement the
State's policy of establishing ownercultivatorship and to achieve a dignified and selfreliant existence for the small farmers that would make them a pillar of strength of
our Republic. Aside from expropriation by the Land Authority of private agricultural
land for resale in economic family-size farm units "to bona fide tenants, occupants
and qualified farmers,"7 the purchase by f armers of the lands cultivated by them,
when the owner decides to sell the samethrough rights of pre-emption and
redemptionare the only means prescribed by the Code to achieve the declared
policy of the State.
3. The agrarian court therefore facilely let itself fall into the error of concluding that
the right of redemption (as well as necessarily the right of pre-emption) imposed by
the Code is available to leasehold tenants only and excludes share tenants for the
literal reason that the Code grants said rights only to the "agricultural lessee and to
nobody else." For one, it immediately comes to mind that the Code did not mention
tenants, whether leasehold or share tenants, because it outlaws share tenancy and
envisions the agricultural leasehold system as its replacement Thus, Chapter I of
the Code, comprising sections 4 to 38. extensively deals with the establishment of
"agricultural leasehold relation," defines the parties thereto and the rights and
obligations of the "agricultural lessor" and of the "agricultural lessee" (without the
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Agrarian and Social Legislation Notes

slightest mention of leasehold tenants) and the statutory consideration or rental for
the leasehold to be paid by the lessee, There is a studied omission in the Code of
the use of the term tenant in deference to the "abolition of tenancy" as proclaimed
in the very title of the Code, and the elevation of the tenant's status to that of
lessee.
Then, the terms "agricultural lessor" and "agricultural lessee" are consistently used
throughout the Chapter and carried over the particular sections (11 and 12) on
preemption and redemption. The agrarian court's literal construction would wreak
havoc on and defeat the proclaimed and announced legislative intent and policy of
the State of establishing owner-cultivatorship for the farmers, who invariably were
all share tenants before the enactment of the Code and whom the Code would now
uplift to the status of lessees,
A graphic instance of this fallacy would be found in section 11 providing that "In
case the agricultural lessor decides to sell the landholding the agricultural lessee
shall have the preferential right to buy the same under reasonable terms and
conditions." It will be seen that the term "agricultural lessor" is here used
interchangeably with the term "landowner"; which conflicts with the Code's
definition of "agricultural lessor" to mean "a person natural or juridical, who, either
as owner, civil law lessee, usufructuary, or legal possessor, lets or grants to another
the cultivation and use of his land for a price certain."8 Obviously, the Code
precisely referred to the "agricultural lessor (who) decides to sell the landholding,"
when it could have more precisely referred to the "landowner," who alone as such,
rather than a civil law lessee, usufructuary or legal possessor, could sell the
landholding.
4. We have, here, then a case of where the true intent of the law is clear that calls
for the application of the cardinal rule of statutory construction that such intent or
spirit must prevail over the letter thereof, for whatever is within the spirit of a
statute is within the statute, since adherence to the letter would result in absurdity,
injustice and contradictions and would defeat the plain and vital purpose of the
statute.
Section 11 of the Code providing for the "agricultural lessee's" preferential right to
buy the land he cultivates provides expressly that "the entire landholding offered for
sale must be pre-empted by the Land Authority if the landowner so desires, unless
the majority of the lessees object to such acquisition," presumably for being beyond
their capabilities, Taken together with the provisions of Chapter III of the Code on
the organization and functions of the Land Authority and Chapter VII on the Land
Project Administration and the creation and functions of the National Land Reform
Council, (in which chapters the legislature obviously was not laboring under the
inhibition of ref erring to the term tenants as it was in Chapter I establishing the
agricultural leasehold system and decreeing the abolition of share tenancy,9 the
Code's intent, policy and objective to give both agricultural lessees and farmers who
transitionally continue to be share tenants notwithstanding the Code's enactment,
the same priority and preferential rights over the lands under their cultivation, in
the event of acquisition of the lands, by expropriation or voluntary sale, for

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distribution or resale that may be initiated by the Land Authority or the National
Land Reform Council, are clearly and expressly stated.
Thus Chapter III, section 51 of the Code decrees it the responsibility of the Land
Authority "(1) To initiate and prosecute expropriation proceedings for the acquisition
of private agricultural lands as defined in Section one hundred sixty-six of chapter XI
of this Code for the purpose of subdivision into economic familysize farm units
and resale of said farm units to bona fide tenants, occupants and qualified farmers x
x x and "(2) To help bona fide farmers without lands of agricultural owner-cultivators
of uneconomic-size farms to acquire and own economic familysize farm units x x x."
Similarly, Chapter VII, section 128 of the Code, in enjoining the National Land
Reform Council to formulate the necessary rules and regulations to implement the
Code's provisions for selection of agricultural land to be acquired and distributed
and of the beneficiaries of the family farms, ordains the giving of the same priority
"to the actual occupants personally cultivating the land either as agricultural
lessees or otherwise with respect to the area under their cultivation."
5. It would certainly result in absurdity, contradictions and injustice if a share tenant
would be denied the rights of pre-emption and redemption which he seeks to
exercise on his own resources, notwithstanding that the National Land Reform
Council has not yet proclaimed that all the government machineries and agencies in
the region or locality envisioned in the Code are operatingwhich machineries
and .agencies, particularly, the Land Bank were precisely created "to finance the
acquisition by the Government of landed -estates for division and resale to small
landholders, as well as the purchase of the landholding by the agricultural lessee
from the landowner."10 The non-operation in the interval of the Land Bank and the
government machineries and agencies in the region which are envisioned in the
Code to assist the share tenant in shedding off the yoke of tenancy and afford him
the financial assistance to exercise his option of electing the leasehold system and
his preferential right of purchasing the land cultivated by him could not possibly
have been intended by Congress to prevent the exercise of any of these vital rights
by a share tenant who is able to do so, e.g. to purchase the land, on his own and
without government assistance. It would be absurd and unjust that while the
government is unable to render such assistance, the share tenant would be deemed
deprived of the very rights granted him by the Code which he is in a position to
exercise even without government assistance.
6. Herein lies the distinction between the present case and Basbas vs. Entena11
where the Court upheld the agrarian court's dismissal of the therein tenant's action
to redeem the landholding sold to a third party by virtue of the tenant's failure to
tender payment or consign the purchase price of the property. There, the tenantredemptioner was shown by the evidence to have no funds and had merely applied
for them to the Land Authority which was not yet operating in the locality and
hence, the Court held that no part of the Code 'indicates or even hints that the 2year redemption period will not commence to run (indefinitely) until the tenant
obtains financing from the Land Bank, or stops the tenant from sccuring redemption
funds from some other source."12 In the present case, the petitioners-tenants'

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Agrarian and Social Legislation Notes

possession of funds and compliance with the requirements of redemption are not
questioned, the case having been submitted and decided on the sole legal issue of
the right of redemption being available to them as share tenants. The clear and
logical implication of Basbas is where the tenant has 'his own resources or secures
redemption funds from sources other than the Land Bank or government agencies
under the Code, the fact that the locality has not been proclaimed a land reform
area and that such government machineries and agencies are not operating therein
is of no relevance and cannot prejudice the "tenant's rights under the Code to
redeem the landholding.
7. Even from the landowner's practical and equitable viewpoint, the landowner is
not prejudiced in the least by recognizing the share tenant's right of redemption.
The landowner, having decided to sell his land, has gotten his price therefor from
his vendees, (The same holds true in case of the tenant's exercise of the preemptive right by the tenant who is called upon to pay the landowner the price, if
reasonable, within ninety days from the landowner's written notice.) As for the
vendees, neither are they prejudiced for they will get back from the
tenantredemptioner the price that they paid the vendor, if reasonable, since the
Code grants the agricultural lessee or tenant the top priority of redemption of the
landholding cultivated by him and expressly decrees that the same "shall have
priority over any other right of legal redemption," In the absence of any provision in
the Code as to manner of and amounts payable on redemption, the pertinent
provisions of the Civil Code apply in a suppletory character.13 Hence, the vendees
would be entitled to receive from the redemptioners the amount of their purchase
besides "(1) the expenses of the contract, and any other legitimate payments made
by reason of the sale; (and) (2) the necessary and useful expenses made on the
thing sold."14
8. The historical background for the enactment of the Code's provisions on preemption and redemption further strengthens the Court's opinion. It is noted by Dean
Montemayor15 that "(T)his is a new right which has not been granted to tenants
under the Agricultural Tenancy Act It further bolsters the security of tenure of the
agricultural lessee and further encourages agricultural lessees to become ownercultivators.
"In the past, a landlord often ostensibly sold his land being cultivated by his tenant
to another tenant, who in turn filed a petition for ejectment against the first tenant
on the ground of personal cultivation. While many of such sales were simulated,
there was a formal transfer of title in every case, and the first tenant was invariably
ordered ejected."
There is indication in this case of the same pattern of sale by the landowner to
another tenant,16 in order to effect the ejectment of petitioners-tenants. This is
further bolstered by the fact that the sales were executed by respondent-vendor on
September 27, 1963 and March 2, 1964 shortly after the enactment on August 8,
1963 of the Land Reform Codewhich furnishes still another reason for upholding x
x x petitioners-tenants' right of redemption, for certainly a landowner cannot be
permitted to defeat the Code's clear intent by precipitately disposingof his lands,

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even before the tenant has been given the time to exercise his newly granted
option to elect the new agricultural leasehold system established by the Code as a
replacement for the share tenancy outlawed by it.
9. Clearly then, the Code intended, as above discussed, to afford the farmers' who
transitionally continued to be share tenants after its enactment but who inexorably
would be agricultural lessees by virtue of the Code's proclaimed abolition of
tenancy, the same priority and preferential right as those other share tenants, who
upon the enactment of the Code or soon thereafter were earlier converted by
fortuitous circumstance into agricultural lessees, to acquire the lands under their
cultivation in the event of their voluntary sale by the owner or of their acquisition,
by expropriation or otherwise, by the Land Authority. It then becomes the court's
duty to enforce the intent and will of the Code, for x x x (I)n fact, the spirit or
intention of a statute prevails over the letter thereof.' (Taada vs. Cuenco, L-10520,
Feb. 23, 1957, citing 82 C.J.S., p. 526.) A statute 'should be construed according to
its spirit or intention, disregarding as far as necessary, the letter of the law/ (Lopez
& Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 855.) By this, we do not correct the
act of the Legislature, but rather x x x carry out and give due course to 'its intent.'
(Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 850) ."17 The Court has
consistently held in line with authoritative principles of statutory construction that it
will reject a narrow and literal interpretation, such as that given by the agrarian
court, that would defeat and frustrate rather than foster and give life to the law's
declared policy and intent18 Finally, under the established jurisprudence of the
Court, in the interpretation of tenancy and labor legislation, it will be guided by
more than just an inquiry into the letter of the law as against its spirit and will
ultimately resolve grave doubts in favor of the tenant and worker.19
The agrarian court's dismissal of the cases at bar should therefore be reversed and
petitioners-tenants' right to redeem the landholdings recognised section 12 of the
Code.
In Case L-25326, however, the deed of sale executed by respondent-vendor in favor
of respondents-vendees for the price of P4,000.00 covers three parcels of land,
while what is sought to be redeemed is only the first parcel of land, of 22,876
square meters, described in the deed. Petitionerstenants' allegation that the
proportionate worth of said parcel "taking into account the respective areas,
productivities, accessibilities and assessed values of the three lots," is P1,500.00,
was traversed by respondents in their answer, with the claim that "the said land is f
airly worth P20,000.00.20 While the vendor would be bound by, and cannot claim
more than, the price stated in the deed, and the Code precisely provides that the
farmer shall have "the preferential right to buy the (landholding) under reasonable
terms and conditions" or "redeem the same at a reasonable price and
consideration"21 with a view to affording the farmer the right to seek judicial
assistance and relief to fix such reasonable price and terms when the landowner
places in the notice to sell or deed an excessive or exorbitant amount in collusion
with the vendee, we note that in this case the deed of sale itself acknowledged that
the selling price of P4,000.00 therein stated was not the fair price since an
additional consideration therein stated was that the vendees would support the
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Agrarian and Social Legislation Notes

vendor during his lifetime and take care of him, should he fall ill, and even assumed
the expenses of his burial upon his death:
"Ang halagang P4,000.00 ay hindi kaulat sa tunay na halagan ng mga lupa subali't
ang mga bumili ay may katungkulan na sostentohin ako habang ako'y nabubuhay,
ipaanyo at ipagamot ako kung ako ay may sakit, saka ipalibing ako kung ako ay
mamatay sa kanilang gastos at ito ay isa sa alang alang o consideracion ng bilihang
ito."
Under these circumstances, since the agrarian court did not rule upon conflicting
claims of the parties as to what was the proportionate worth of the parcel of land in
the stated price of P4,000.00whether P1,500,00 as claimed by petitioners or a
little bit more, considering the proportionate values of the two other parcels, but the
whole total is not to exceed the stated price of P4,000.00, since the vendor is bound
therebyand likewise, what was the additional proportionate worth of the expenses
assumed by the vendees, assuming that petitioners are not willing to assume the
same obligation, the case should be remanded to the agrarian court solely for the
purpose of determining the reasonable price and consideration to be paid by
petitioners for redeeming the landholding, in accordance with these observations.
In Case L-25327, there is no question as to the price of P750.00 paid by the vendees
and no additional consideration or -expenses, unlike in Case L-25326, supra,
assumed by the vendees. Hence, petitioners therein are entitled to redeem the
landholding for the same stated price.
ACCORDINGLY, the decisions appealed from are hereby reversed, and the petitions
to redeem the subject landholdings are granted.
In Case L-25326, however, the case is remanded to the agrarian court solely for
determining the reasonable price to be paid by petitioners therein to respondentsvendees for redemption of the landholding in accordance with the observations
hereinabove made.
No pronouncement as to costs.
Concepcion, CJ., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Barredo and
Villamor, JJ., concur.
Castro, J., is on leave.
Decision reversed, petitions granted.
_____________ Hidalgo vs. Hidalgo, 33 SCRA 105, No. L-25326, No. L-25327 May 29,
1970

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VOL. 29, SEPTEMBER 30, 1969
573
Philippine National Railways vs. Del Valle
No. L-29381, September 30, 1969.
PHILIPPINE NATIONAL RAILWAYS and PANTALEON BINGABING, petitioners, vs. HON.
VALERIANO A. DEL VALLE, in his capacity as Presiding Judge, Court of Agrarian
Relations and PAMPILO DOLTZ, respondents.
Labor law; Agricultural Tenancy Act; Agricultural Land Reform Code; Meaning of
"agricultural land."The term "agricultural land" as understood in the Agricultural
Tenancy Act and the Agricultural Land Reform Code is nor as broad in meaning as it
is known in the constitutional sense. As interpreted in Krivenko v. Register of Deeds,
the phrase "agricultural land," constitutionally speaking, includes all lands that are
neither mineral nor timber lands and embraces within its wide sweep not only lands
strictly agricultural or devoted to cultivation for agricultural purposes but also
commercial, industrial, residential lands and lands for other purposes. On the other
hand, under Section 3 of the Agricultural Tenancy Act and Section 166(1) of the
Agricultural Land Reform Code, agricultural land means land devoted to agriculture
or to any growth.
Same; Same; Same; Land owned by Philippine National Railways on both sides of its
railway track is not agricultural land.The strips of land owned by Philippine
National Railways (PNR) which are on both sides of its railroad track, are part of its
right of way for its railroad operations but temporarily leased, are not agricultural
lands within the purview of the Agricultural Tenancy Act and the Agricultural Land
Reform Code, such as would come within the jurisdiction of the Court of Agrarian
Relations.
Same; Same; Same; Security of tenure of tenants; Apply only to de jure tenants.
The security of tenure guaranteed by our tenancy law may be invoked only by
tenants de jure, not by those who are not true and lawful tenants.
PETITION for review of a decision of the Court of Agrarian Relations, Ninth Regional
District, Legazpi City, Branch II.
The facts are stated in the opinion of the Court.
Philippine National Railways vs. Del Valle
Marcelino B. Bermudez for petitioners.
Nostratis & Estrada for respondent Judge V. A. Del Valle.
Abelardo Flores for respondent Pampilo Doltz.
SANCHEZ, J.:
The decisive issue to be resolved in this case is whether or not strips of land owned
by Philippine National Railways (PNR) which are on both sides of its railroad track,

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and are part of its right of way f or its railroad operations but temporarily leased, are
agricultural lands within the purview of the Agricultural Tenancy Act and the
Agricultural Land Reform Code, such as would come within the jurisdiction of the
Court of Agrarian Relations.
The facts of this particular case are these:
PNR, a government-owned corporation, is the registered owner of three (3) strips of
land with a uniform width of 30 meters adjoining one another longitudinally, the
same being part of its railroad right of way running from Manila to Legazpi. These
strips of land lie within the municipalities of Oas and Polangui, Province of Albay. At
the center thereof is a track measuring ten (10) to twelve (12) meters in width
where railroad ties are placed and rails built for running locomotives. On both sides
of the track, or about two (2) to five (5) meters away from the embankment of the
track, are telegraph and telephone posts fifty (50) meters apart from each other,
which maintain communication wires necessary in the operation of PNR trains. PNR
draws earth from these sides to fill up the railroad track whenever it is destroyed by
water during rainy days; and uses them as depository of railroad materials for the
repair of destroyed lines, posts, bridges during washouts, or other damaged parts of
the line occasioned by derailments or other calamities.
The portions of these lands not actually occupied by the railroad track had been a
source of trouble. People occupied them; they reap profits therefrom. Disputes
among those desiring to occupy them cropped up. It is on the face of all these that,
with adequate provisions to saf feguard railroad operations, PNR adopted temporary
rules and regulations, as follows: (a) the possession and enjoyment of the property
should be awarded to interested persons thru competitive public bidding; (b) the
rental of the premises is to be determined from the amount off fered by the highest
bidder; (c) the duration of the lease shall be for a limited period, not to exceed three
(3) years; (d) the lessee cannot sublease the premises; (e) the lease contract is
revocable at any time upon demand by the owner, whenever it needs the same for
its own use or for a more beneficial purpose; (f) the owner can enter the leased
premises during the period of the lease to make necessary repairs; and (g) the
lessee shall not use the premises in a manner prejudicial to the operation of the
trains.
Sometime in 1963, PNR awarded the portions of the three strips of land
aforementioned which are on both sides of the track, after a competitive public
bidding, to petitioner Pantaleon Bingabing for a period of three (3) years and under
conditions hereinbefore set forth. A civil law lease contract in printed form was, on
April 15, 1963, entered into by and between PNR and Bingabing. That contract
expressly stipulates that Bingabing was "to occupy and use the property x x x
temporarily for agriculture." Consideration therefor was P130.00 per annum.
Bingabing, however, failed to take possession because respondent Pampilo Doltz
was occupying the land, had a house thereon. Doltz claims to be a tenant of
previous awardees, and later, of Bingabing himself.
Sometime in March .1965, PNR and Bingabing filed suit against Doltz for recovery of
possession of the premises in the Court of First Instance of Albay.1 They there
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averred that sometime in January 1963, Doltz illegally entered the land, constructed
a house thereon occupying about fifty (50) square meters, and planted palay on the
other portionsthereof. They prayed that Doltz remove his house, vacate the
premises, restore possession to PNR or Bingabing, pay PNR P160 per annum as
reasonable compensation for the occupation of the premises from January 1963,
and P2,000 as expenses of litigation, pay Bingabing P500 annually from 1963, and
shoulder the costs of suit.
Doltz' answer in that case averred inter alia that they had been a tenant on the
property for over twenty years; that he had been placed thereon by the deceased
Pablo Gomba who leased the property from the then Manila Railroad Company (now
PNR); that he became the tenant of Demetrio de Vera, Gomba's successor; that he
is the tenant of Bingabing, having given the latter's share of 1/3 during the last two
harvests; and that the case is properly cognizable by the Court of Agrarian
Relations. Upon the court's request, Doltz and Bingabing agreed to temporarily
liquidate the harvest on a sharing ratio of 70-30 in Doltz' favor.
It has been suggested in the record that said caseCivil Case 3021was dismissed
by the Court of First Instance of Albay upon the ground that the subject matter of
the action is tenancy; that petitioners have appealed. That case, parenthetically,
has not yet reached this Court.
While the aforesaid Civil Case 3021 was pending in the Albay court of first instance,
Doltz registered with the Court of Agrarian Relations (CAR) a petition against
Bingabing for security of tenure, the adoption of a sharing ratio of 70-30 of the
crops, and reliquidation of past harvests. This is the present caseCAR Case 692,
Albay '67, Court of Agrarian Relations, Ninth Regional District, Legazpi City, Branch
II, entitled "Pampilo Doltz, Petitioner, versus Pantaleon Bingabing, Respondent." PNR
intervened in the case. Petitioners herein there maintained the position that the
premises in controversy are not an agricultural land within the contemplation of the
Agricultural Tenancy Act (Republic Act 1199) or the Agricultural Land Reform Code
(Republic Act 3844); that no tenancy relationship existed between the parties; that
CAR, therefore, lacked jurisdiction over the case; and that there is a pending case
between the same parties in another court involving the same subject matter and
the same cause of action.
After trial, the CAR promulgated its decision of June 10, 1968. It upheld its
jurisdiction over the case, maintained Doltz in the peacef ful possession of the
parcels of land as tenant on a 70-30 sharing ratio in Doltz' favor, ordered Bingabing
to pay Doltz P250 attorneys' fees and the costs, but dismissed the latter's claim for
reliquidation of past harvests for lack of substantial evidence. Petitioners' move to
reconsider the said decision failed. They now come to this Court. They specifically
question CAR's jurisdiction.
1. Is the land here involved an agricultural land within the meaning of the
Agricultural Tenancy Act and the Agricultural Land Reform Code?
According to Section 3 of the Agricultural Tenancy Act, "[a]gricultural tenancy is the
physical possession by a person of land devoted to agriculture belonging to, or

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legally possessed by, another for the purpose of production through the labor of the
former and of the members of his immediate farm household, in consideration of
which the former agrees to share the harvest with the latter, or to pay a price
certain or ascertainable, either in produce or in money, or in both."2 The term
"agricultural land" as understood by the Agricultural Land Reform Code is not as
broad in meaning as it is known in the constitutional sense. As interpreted in
Krivenko vs. Register of Deeds, 79 Phil. 461, 471, the phrase "agricultural land,"
constitutionally speaking, includes all lands that are neither mineral nor timber
lands and embraces within its wide sweep not only lands strictly agricultural or
devoted to cultivation for agricultural purposes but also commercial, industrial,
residential lands and lands for other purposes. On the other hand, by Section 166(1)
of the Agricultural Land Reform Code, " '[a]gricultural land' means land devoted to
any growth, including but not limited to crop lands, salt beds, fishponds, idle land
and abandoned land as def ined in paragraphs 18 and 19 of this section,
respectively,"3
It is obvious then that under the law, the land here in controversy does not fit into
the concept of agricultural land, PNR cannot devote it to agriculture because by its
own charter, Republic Act 4156, PNR cannot engage in agriculture,
Indeed, the landwhich adjoins the railroad track on both sidesis part of PNR's
right of way. That right of way is not limited to the particular space occupied by the
roadbed or Its main track, It also includes the portions occupied by the telephone
and telegraph posts. It extends to a width of 30 meters which reasonably gives the
train locomotive engineer a clear commanding view of the track and its switches
ahead of him.
The entire width is important to PNR's railroad operations. Which should not be
hampered. And, communication lines must not be disturbed. Buildings should not be
constructed so close to the track. Because, it is not so easy to prevent people from
walking along the track; animals, too, may stray into.the area; obstructions there
could be along the track itself which might cause derailment. All of these could
prevent the locomotive engineer from taking the necessary precautions on time to
avert accidents which may cause damage to the trains, injury to its passengers, and
even loss of life.
Besides, the use of the strips of land on both sides of the track in railroad operation
is inconsistent with agricultural activities. The contract of lease authorizes the
railroad company to enter upon the premises to make repairs, place its materials on
the land. It may even take soil from the land to fill up any part of the railroad track
destroyed by water during rainy days. What if PNR should decide to construct
another parallel track on the land leased? The occupant of the land cannot prevent
or stop PNR from doing any of these. Security of tenure so important in landlordtenant relationship may not thus be attained,
The foregoing are considerations sufficient enough to deter us from adopting the
view that the disputed landin narrow stripsis agricultural land within the
meaning of the Agricultural Tenancy Act and the Agricultural Land Reform Code. By
destination, it is not agricultural.
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2. Nor may Pampilo Doltz be considered as a true and lawful tenant.
To be borne in mind is the fact that PNR executed with Pantaleon Bingabing a civil
law lease contract, not an agricultural lease. This distinction is expressly recognized
by the law.4 That contract is temporary, at best for a short term. It is revocable any
time upon demand by PNR whenever it needs the same for its own use or for a
more beneficial purpose.
Even on the assumption that the land is agricultural, there is the circumstance that
PNR prohibits the sublease of the premises. PNR's lessees cannot give what they are
not allowed to give. Any contract then of sublease beetween Doltz, the supposed
tenant, and Pablo Gomba or Demetrio de Vera, the previous awardees, or even of
Pantaleon Bingabing, the present awardeewithout PNR's consentcannot bind the
latter. No such consent was here given.
This ushers us to a principle shaped out by jurisprudence that the security of tenure
guaranteed by our tenancy law may be invoked only by tenants de jure, not by
those who are not true and lawful tenants.5 In Pabustan vs. De Guzman, L-12898,
August 31, 1960, the tenant sublet the landholding to a third person without the
knowledge and consent of the landowner, In an ejectment suit brought by the
landowner against said third person in the CAR, this Court held that the CAR had no
jurisdiction over the case because no tenancy relationship existed between the
parties, as the third person was, in reality, an unlawful squatter or intruder.
Correlating Pabustan to the present case. the lessee here had no power to sublet.
There is also thus no legally cognizable relationship of tenancy between the parties.
We, accordingly, rule that CAR does not have jurisdiction over the case at bar and
the proceedings below are thus null and void.
For the reasons given, the judgment of the Court of Agrarian Relations of June 10,
1968 in its Case 692, Albay '67, under review is hereby reversed, and said case is
hereby dismissed.
Costs against private respondent Pampilo Doltz. So ordered.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Castro, Fernando, Capistrano,
Teehankee and Barredo JJ., concur.
Reyes, J.B.L., J., is on leave.
Judgment reversed.
____________ Philippine National Railways vs. Del Valle, 29 SCRA 573, No. L-29381
September 30, 1969

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