Republic of the Philippines usufructuary/bailee, Bernas had no better right to the property than the latter who admittedly

er right to the property than the latter who admittedly was entrusted with the property
SUPREME COURT only for a limited period. Further, according to the appellate court, there being no privity of contract between Natividad and
Manila Bernas, the former cannot be expected to be bound by or to honor the relationship or tie between Benigno and the latter
(Bernas).

EN BANC 
Hence, this petition by Bernas.

G.R. No. 85041 August 5, 1993

The issue for resolution by the Court is concisely stated by the respondent appellate court as follows: whether the agricultural
leasehold established by Benigno Bito-on in favor of Graciano Bernas is binding upon the owner of the land, Natividad Bito-on,
GRACIANO BERNAS, petitioner,  who disclaims any knowledge of, or participation in the same.
vs.
THE HONORABLE COURT OF APPEALS and NATIVIDAD BITO-ON DEITA, respondents.
In ruling for the private respondent (Natividad), the respondent appellate court held that:

Rodriguez Dadivas for petitioner.

Indeed, no evidence has been adduced to clarify the nature of the "dugo" transaction between plaintiff and her brother Benigno
Bito-on. What seems apparent is that Benigno Bito-on was gratuitously allowed to utilize the land to help him in financing the
Orlanda Bigcas-Lumawag for private respondent. schooling of his children. Whether the transaction is one of usufruct, which right may be leased or alienated, or one
of commodatum, which is purely personal in character, the beneficiary has the obligation to return the property upon the
expiration of the period stipulated, or accomplishment of the purpose for, which it was constituted (Art. 612, Art. 1946, Civil
PADILLA, J.: Code). Accordingly, it is believed that one who derives his right from the usufructuary/bailee, cannot refuse to return the
property upon the expiration of the contract. In this case, Benigno Bito-on returned the property lent to him on May 13, 1985 to
the owners, the plaintiff herein. We do not see how the defendant can have a better right to the property than Benigno Bito-on,
Petitioner Graciano Bernas is before this Court assailing the decision *of the respondent appellate court dated 19 August 1988 who admittedly possessed the land for a limited period. There is no privity of contract between the owner of the land and the
in CA G.R. SP No. 14359 (CAR), which reversed the decision ** of the Regional Trial Court of Roxas City, Branch 18, in Civil cultivator.1
Case No. V-5146 entitled "Natividad Bito-on Deita, et al. vs, Graciano Bernas." As disclosed by the records and the evidence of
both parties, the facts involved in the controversy are as follows:
At this point, it is appropriate to point out that, contrary to the appreciation of the respondent appellate court, the general law on
property and contracts, embodied in the Civil Code of the Philippines, finds no principal application on the present
Natividad Bito-on Deita is the owner of Lots Nos. 794, 801, 840 and 848 of the Cadastral Survey of Panay, Capiz, with a total conflict. Generalibus specialia derogant. The environmental facts of the case at bar indicate that this is not a mere case of
area of 5,831 square meters. Out of liberality, Natividad entrusted the lots by way of "dugo" to her brother, Benigno Bito-on, so recovery of ownership or possession of property. Had this been so, then the Court would have peremptorily dismissed the
that he could use the fruits thereof to defray the cost of financing his children's schooling in Manila. Prior to April 1978, these present petition. The fact, however, that cultivated agricultural land is involved suffices for the Court to pause and review the
agricultural lots had been leased by one Anselmo Billones but following the latter's death and consequent termination of the legislation directly relevant and applicable at the time this controversy arose.
lease, petitioner Graciano Bernas took over and worked on the land. Benigno and Bernas worked out a production-sharing
arrangement whereby the first provided for all the expenses and the second worked the land, and after harvest, the two (2)
deducted said expenses and divided the balance of the harvest between the two of them. The owner, Natividad, played no part In this regard, it would appear that Republic Act No. 1199, invoked by the trial court, had already been rendered inoperative by
in this arrangement as she was not privy to the same. the passage of Republic Act No. 3844, as amended, otherwise known as the Agricultural Land Reform Code (Code, for
brevity). The former, also known as the Agricultural Tenancy Act of the Philippines and approved in August 1954 had sought to
establish a system of agricultural tenancy relations between the tenant and the landholder, defining two (2) systems of
In 1985, the lots were returned by Benigno to his sister Natividad, as all his children had by then finished their schooling. When agricultural tenancy: the share and the leasehold tenancy. At this point, however, further discussion of the foregoing would
Natividad, and her husband sought to take over possession of the lots, Bernas refused to relinquish, claiming that he was an appear futile, for the Code, enacted in August, 1963, had expressly declared agricultural share tenancy to be contrary to public
agricultural leasehold lessee instituted on the land, by Benigno and, as such, he is entitled to security of tenure under the law. policy and abolished the same. As for leasehold tenancy relations entered into prior to the effectivity of the Code, the rights and
obligations arising therefrom were deemed to continue to exist until modified by the parties thereto in accordance with the
provisions of the Code. 2 Thus, for all intents and purposes, Republic Act No. 3844 is the governing statute in the petition at bar.
Faced with this opposition from Bernas, Natividad filed an action with the Regional Trial Court for Recovery of Possession, The pertinent provisions therefore state as follows:
Ownership and Injunction with Damages. After trial, the court a quo held in favor of the defendant (Bernas) and dismissed the
complaint, ruling that from the record and the evidence presented, notably the testimony of the plaintiff's own brother Benigno,
Bernas was indeed a leasehold tenant under the provisions of Republic Act No. 1199 and an agricultural leasehold lessee Sec. 5. Establishment of Agricultural Leasehold
under Republic Act No. 3844, having been so instituted by the usufructuary of the land (Benigno). As such, according to the Relations. — The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this
trial court, his tenurial rights cannot be disturbed save for causes provided by law. Code and, in other, cases, either orally or in writing, expressly or impliedly.

Aggrieved, the plaintiff (Natividad) appealed to the Court of Appeals, contending that the "dugo" arrangement between her and Sec. 6. Parties to Agricultural Leasehold Relation. — The agricultural leasehold relation shall be limited to the person who
her brother Benigno was not in the nature of a usufruct (as held by the court a quo), but actually a contract of commodatum. furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally
This being the case, Benigno, the bailee in the commodatum, could neither lend nor lease the properties loaned, to a third cultivates the same. (emphasis supplied).
person, as such relationship (of bailor-bailee) is one of personal character. This time, her contentions were sustained, with the
respondent appellate court, reversing the trial court's decision, ruling that having only derived his rights from the
Sec. 7. Tenure of Agricultural Leasehold Relation. — The Agricultural Leasehold Relation once established shall confer upon (4) the agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section twenty-nine;
the agricultural lessee the right to continue working on the landholding until such leasehold relationship is extinguished . The
agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized
by the Court for causes herein provided. (emphasis supplied) (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;

Sec. 8. Extinguishment of Agricultural Leasehold 

Relation. — The agricultural leasehold relation established under this Code shall be extinguished by: (6) the agricultural lessee does not pay the lease rental when it falls due: Provided, That if the nonpayment of the rental shall be
due to crop failure to the extent of seventy-five per centumas a result of a fortuitous event, the non-payment shall not be a
rental due that particular crop year, is not thereby extinguished; or
(1) Abandonment of the landholding without the knowledge of the agricultural lessor;

(7) the lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty seven.
(2) Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served three months in
advance; or
Sec. 37. Burden of Proof. — The burden of proof to show the existence of a lawful cause for the ejectment of an agricultural
lessee shall rest upon the agricultural lessor.
(3) Absence of the persons under Section nine to succeed to the lessee in the event of death of permanent incapacity of the
lessee.
There is no dispute, as it is admitted by the parties in this case, that Benigno Bito-on was granted possession of the property in
question by reason of the liberality of his sister, Natividad (the private respondent). In short, he (Benigno) was the LEGAL
xxx xxx xxx POSSESSOR of the property and, as such, he had the authority and capacity to enter into an agricultural leasehold relation
with Bernas. Consequently, there is no need to dwell on the contentions of the private respondent that, her brother Benigno
was not a usufructuary of the property but actually a bailee in commodatum. Whatever was the true nature of his designation,
Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. — The agricultural leasehold relation he (Benigno) was the LEGAL POSSESSOR of the property and the law expressly grants him, as legal possessor, authority and
under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, capacity to institute an agricultural leasehold lessee on the property he legally possessed.
alienation or transfer of the legal possession of the landholding. In case the agricultural lessor sells, alienates or transfers the
legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the
obligations of the agricultural lessor. In turn, having been instituted by Benigno as an agricultural leasehold lessee, Bernas is vested by law with the rights accruing
thereto, including the right to continue working the landholding until such lease is legally extinguished, and the right to be
protected in his tenure i. e., not to be ejected from the land, save for the causes provided by law, and as appropriately
xxx xxx xxx determined by the courts. In this connection, there is no clear indication in the record that the circumstances or conditions
envisioned in Section 36 of Republic Act. No. 3844, as amended, for termination of the agricultural lease relation, have
supervened, and therefore Bernas' right to the possession of the property remains indisputable. This conclusion is buttressed
Sec. 36. Possession of Landholding; Exceptions. — Notwithstanding any agreement as to the period or future surrender of the by Sec. 37 of the Code which provides that:
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:
Sec. 37. Burden of Proof. — The burden of proof to show the existence of a lawful cause for the ejectment of an agricultural
lessee shall rest upon the agricultural lessor.
(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the
landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural
purposes: Provided, That the agricultural lessee shall, be entitled to disturbance compensation equivalent to five years rental As to any suggestion that the agricultural lease of Bernas may have terminated because the landowner (Natividad) has decided
on his landholding in addition to his rights under Sections twenty-five and thirty-four, except when the land owned and leased to cultivate the land herself, we submit that this Court is not in a position to settle this issue in this case, not only because of
by the agricultural lessor is not more than five hectares, in which case instead of disturbance compensation the lessee may be insufficient evidence to determine whether or not, the grounds provided by law for termination of the agricultural leasehold
entitled to an advanced notice of at least one agricultural year before ejectment proceedings are filed against relation are present but, more importantly, because the issue of termination of the agricultural leasehold relationship by reason
him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to substantially carry out of the landowner's alleged decision to till the land herself, was not squarely raised nor adequately litigated in the trial court. 4 It
such conversion within one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and the will be noted that while Natividad in her complaint with the court a quo alleged, among others, that "on 20 May 1985, the
tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because of plaintiffs spouses were already in the process of taking over the land by employing a tractor operator to commence plowing the
said dispossession; 3 land," this allegation was denied by Bernas in his answer. But the main thrust of Natividad's complaint was that she had no
privity with Bernas and that the latter should vacate the land because Benigno (from whom Bernas had received his right to
possess) had himself ceased to have any rights to the land. Faced with these allegations, the court a quo in its pre-trial order
(2) the agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the dated 9 September 1985 formulated the issues in this case, without objection from the parties, as follows:
provisions of this Code unless his failure is caused by fortuitous event or force majeure:

ISSUES
(3) the agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed
upon;
1. Is defendant an agricultural leasehold lessee of the parcels of land described in the Complaint?
2. Whether the parties are entitled to damages claims by them in their respective pleadings. The legal issue that presents itself is whether the agricultural leasehold established by Benigno Bito-on was binding upon the
owner of the land, plaintiff Natividad Bito-on, who disclaims knowledge of any arrangement with defendant Bernas. The lower
court held that the "dugo" arrangement was in the nature of usufruct, and that the act of the usufructuary as legal possessor
In short, the parties went to trial on the merits on the basis of the foregoing issues. Private respondent did not object to the was sufficient to establish tenancy relations.
above issues as formulated; neither can it be plausibly contended now that the first issue (i.e. whether Bernas is an agricultural
leasehold lessee) embraces the issue of whether Natividad has validly terminated the agricultural leasehold because of a
decision to cultivate the land herself, since under sec. 36(1) of the Code (before its amendment by Section 7 of Rep. Act No. xxx xxx xxx 5
6389), the landowner's right to take over possession of his land for personal cultivation  ASSUMES that it is under a valid and
subsisting agricultural leasehold and he must obtain an order from the court to dispossess the agricultural leasehold lessee
who otherwise is entitled to continued use and possession of the landholding. In other words, if Natividad had really intended to The long settled rule in this jurisdiction is that a party is not allowed to change his theory of the case or his cause of action on
raise as an issue that she had validly terminated Bernas' agricultural leasehold, she or her counsel could have expressly appeal.6 We have previously held that "courts of justice have no jurisdiction or power to decide question not in issue" 7 and that
included among the issues for determination the question of whether or not she had complied with the requirements of the law a judgment going outside the issues and purporting to adjudicate something upon which the parties were not heard is not
for dispossessing the agricultural leasehold lessee because she, as landowner, had decided to personally cultivate the merely irregular, but extrajudicial and invalid. 8 The rule is based on the fundamental tenets of fair play and, in the present case,
landholding. But she did not. the Court is properly compelled not to go beyond the issue litigated in the court  a quoand in the Court of Appeals of whether or
not the petitioner, Graciano Bernas, is an agricultural leasehold lessee by virtue of his installation as such by Benigno Bito-on,
the legal possessor of the landholding at the time Bernas was so installed and, consequently entitled to security of tenure on
The trial court in its decision dated 20 October 1987 (latter appealed to the Court of Appeals) held (consistent with the the land. Should grounds for the dispossession of Bernas, as an agricultural leasehold lessee, subsequently arise, then and
formulated issues in the case) that — only then can the private respondent (land owner) initiate a separate action to dispossess the lessee, and in that separate
action, she must allege and prove compliance with Sec. 36(1) of the Code which consist of, among others, a one year advance
notice to the agricultural leasehold lessee (the land involved being less than 5 hectares) and readiness to pay him the damages
xxx xxx xxx required also by the Code.

As to issues, parties presented only two (2) issues and which are: The issue of whether or not Bernas planted crops or used the land in a manner contrary to what was agreed upon between
Natividad and Benigno, and thereby constituting a ground for terminating the leasehold relationship under Sec. 36, par. 3 of
Rep. Act No. 3844 likewise cannot be passed upon by this Court since the issue was never raised before the courts below.
1. Whether or not defendant is an agricultural leasehold lessee of the parcels of land described in the complaint; Furthermore, there is no showing that Natividad and Benigno agreed that only certain types of crops could be planted on the
land. What is clear is, that the "dugo" arrangement was made so that Benigno could use the produce of the land to provide for
the schooling of his children. The alleged conversion by Bernas of the land to riceland was made necessary for the land to
2. Whether the parties are entitled to damages claimed by them in their respective pleadings. produce more and thus meet the needs of Benigno. It was consistent with the purpose of making the land more productive that
Benigno installed an agricultural lessee. It may be recalled that when Natividad called on Benigno to testify as a witness, he
stated that the produce of the land was given to him by Bernas to defray the expenses of his children (p. 3, trial court decision).
(Pre-Trial Order dated September 9, 1985, p. 41 records) The inevitable conclusion is therefore not that there was use of the land different from the purpose for which it was allegedly
intended by Natividad and Benigno but rather that the installation of the agricultural lessee was made necessary so that the
land could produce more to better serve the needs of the beneficiary (Benigno).
and finally disposed as follows:

Additionally, it can be stated that the agricultural leasehold relationship in this case was created between Benigno as
From the above discussions, this Court opines that defendant was a share tenant on the parcels of land subject of the agricultural lessor-legal possessor, on the one hand, and Bernas as agricultural leasehold lessee, on the other. The agricultural
complaint, and an agricultural leasehold lessee under the provisions of the Agricultural Land Reform Code as amended by leasehold relationship was notbetween Natividad and Bernas. As Sec. 6 of the Code states:
Presidential Decrees on the matter.

Sec. 6. Parties to Agricultural Leasehold Relations. — The agricultural leasehold relations shall be limited to the person who
No damages as damages were proved or established by evidence by the defendant. furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally
cultivates the same. (emphasis supplied)

WHEREFORE, and in view of the above considerations, a decision is rendered dismissing plaintiffs complaint, and declaring
defendant as the agricultural leasehold lessee on Lot Nos. 794, 801, 840 and 848 of the Cadastral Survey of Panay, Capiz, There was, as admitted by all, no privity or tie between Natividad and Bernas. Therefore, even if Bernas had improperly used
with an area of 5,831 square meters, situated at Calitan, Panay, Capiz, with security of tenure as an Agricultural Leasehold the lots as ricelands, it was Benigno who could have objected thereto since it was his (the legal possessor's) landholding that
Lessee thereof; and plaintiffs to pay the costs of the suit. was being "improperly" used. But he (Benigno) did not. It is not for Natividad (as landowner) to now complain that Bernas used
the land "for a purpose other than what had been previously agreed upon." Bernas had no agreement with her as to the
purpose for which the land was to be used. That they were converted into ricelands (also for agricultural production) can only
In the Court of Appeals, the litigated issue was — mean that the same (conversion) was approved by Benigno (the undisputed agricultural lessor-legal possessor). It is thus clear
that sec. 36, par 3 of the Code cannot be used to eject Bernas.

xxx xxx xxx

The Court, must, in our view, keep in mind the policy of the State embodied in the fundamental law and in several special
statutes, of promoting economic and social stability in the countryside by vesting the actual tillers and cultivators of the soil, with
rights to the continued use and enjoyment of their landholdings until they are validly dispossessed in accordance with law. At
this stage in the country's land reform program, the agricultural lessee's right to security of tenure must be "firmed-up" and not possessed by another (in this case Benigno) with the latter's consent for purposes of production for a price certain in money or
negated by inferences from facts not clearly established in the record nor litigated in the courts below. Hand in hand with in produce or both.
diffusion of ownership over agricultural lands, it is sound public policy to encourage and endorse a diffusion of agricultural
land use in favor of the actual tillers and cultivators of the soil. It is one effective way in the development of a strong and
independent middle-class in society. Ponce vs. Guevarra, L-19629 and L-19672-92, 31 March 1954 (10 SCRA 649) provides dramatic support to the security of
tenure of Bernas in the case at bar. In the Ponce case, the owner (Ponce) had leased his agricultural land to Donato (the
lessee) for a stipulated period with a provision in the lease contract prohibiting Donato from sub-leasing the land without the
In confirmation we believe of the foregoing views, Section 36 of Rep. Act No. 3844 (the Code) was expressly amended by written consent of the owner (Ponce). Notwithstanding these "express prohibition", Donato sub-leased the land without the
Section 7 of Rep. Act No. 6389 which replaced paragraph 1, Section 36 of the Code providing for personal cultivation by the consent of Ponce (the owner). When the lease contract expired, Donato returned the land to Ponce but the sub-lessees
landowner as a ground for ejectment or dispossession of the agricultural leasehold lessee with the following provision: (tenants) refused to vacate, claiming security of' tenure under the tenancy laws then enforced. One of the contentions of Ponce
(the owner) in seeking to dispossess the sub-lessees (tenants) was that these tenants entered into possession of the land
under a violation of the lease contract by Donato (the lessee).
Sec. 7. Section 36 (1) of the same Code is hereby amended to read as follows:

Over-ruling the above contention, this Court held:

(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 harvest of his landholding during the last It is true that the subleasing of said land to respondents herein (tenants) without the written consent of the petitioner (owner),
five preceding calendar years; constituted a violation of the original contract of lease. The breach of contract was committed, however, by Donato (the lessee),
....

While it is true that in the case of Ancheta vs. Court of Appeals, 200 SCRA 407, the Court, stated that:
Of course, in the same Ponce case, the Court observed that Ponce renewed his lease contract for another year with Donato,
knowing at the time of such renewal that the land had been sub-leased to the tenants, thereby injecting the principle of estoppel
It is well settled that RA 6389, which removed personal cultivation as a ground for ejectment of tenant/lessee, cannot be given against Ponce vis-a-vis the tenants. But, as we view it, the ratio decidendi in the Court's decision is to the effect that the sub-
retroactive effect in the absence of statutory provision for retroactivity or a clear implication of the law to that effect. lessees (tenants) were entitled to security of tenure on the land they were cultivating, notwithstanding the undisputed fact that
they became sub-lessees (tenants) of the land as a result of a violation by the lessee (Donato) of an express provision in the
lease contract prohibiting him from sub-leasing the land.
however, Rep. Act No. 6389 was approved on 10 September 1971.9The complaint in this case was filed on 21 June 1985 or
long after the approval of Rep. Act No. 6389. By reason of the provision therein eliminating personal cultivation by the
landowner as a ground for ejectment or dispossession of the agricultural leasehold lessee, any issue of whether or not the What more in the case of Bernas whose right to security of tenure as an agricultural leasehold lessee is conferred and
Court of Appeals decision should nonetheless be affirmed because the landowner had shown her intention or decided to protected categorically, positively and clearly by the provisions of the Code (Republic Act. 3844)?
personally cultivate the land (assuming without admitting that the issue was properly raised before the trial court), had in fact
become moot and academic (even before it was hypothetically raised). The issued had been resolved by legislation
unmistakably against the landowner. It is of course possible to construe Sec. 6 of the Code which provides:

It may of course he argued that "she (Natividad) did not authorize her brother (Benigno) to install a tenant thereon." (TSN, 13 SEC 6. Parties to Agricultural Leasehold Relations. — The agricultural leasehold relation shall be limited to the person who
February 1986, p. 6). furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally
cultivates the same. (emphasis supplied).

Even if there was a lack of authorization (from Natividad) for Benigno to install a tenant, it still follows, in our view, that Benigno
as legal possessor of the landholding, could install an agricultural lessee on the landholding. For, as defined in Section 166 (3) in the following manner:
of the Code, an agricultural lessor is a natural or juridical person 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. Nothing in said section, it will be noted,
requires that the civil law lessee, usufructuary or legal possessor should have the prior authorization of the landowner in order . . . it assumes that there is already an existing agricultural leasehold relation, i.e. a tenant or agricultural lessee already works
to let or grant to another the cultivation or use of the landholding. the land. As may be gleaned from the epigraph of Sec. 6, it merely states who are "Parties to Agricultural Leasehold Relations,"
which means that there is already a leasehold tenant on the land. But this is precisely what We are still asked to determine in
these proceedings. (dissenting opinion, p. 11.)
Another question comes up; did Natividad expressly prohibit Benigno from installing a tenant on the land? Nothing in the
evidence shows that Benigno was expressly prohibited by Natividad from installing a tenant on the landholding. And even if
there was an express prohibition on the part of Natividad (landowner) for Benigno not to install an agricultural leasehold lessee, It would appear from the above interpretation of Sec. 6 of the Code that in the absence of a judicial determination or declaration
it is to be noted that any such arrangement (prohibition) was solely between Natividad and Benigno. There is no evidence to of an agricultural leasehold relation, such relation does not or cannot even exist. We view this posture as incorrect for an
show that Bernas was aware or informed of any such arrangement between Natividad and Benigno. Neither was such agricultural leasehold relationship exists by operation of law when there is a concurrence of an agricultural lessor and an
arrangement (prohibition), if any, recorded in the registry of deeds to serve as notice to third persons (as Bernas) and to the agricultural lessee. As clearly stated in Section 5 of the code.
whole world for that matter. Consequently, if there was indeed such a prohibition (which is not borne out by the records)
imposed by Natividad on Benigno, a violation thereof may give rise to a cause of action for Natividad against Benigno but
Bernas is no less an agricultural leasehold lessee, for the law (Section 166 (2) of the Code) defines an agricultural lessee as a
person who by himself and with the help available from within his immediate farm household cultivates the land belonging to or
Sec. 5. Establishment of Agricultural Leasehold Relations. — The agricultural leasehold relation shall be established by a. it was based solely on the evidence presented by Natividad, Bernas did not participate in said investigation.
operation of law in accordance with Section four of this Code and, in other cases, either orally or in writing, expressly or
impliedly.
b. the findings in the report are not supported by law or jurisprudence but are merely the opinion and conclusions of the
investigator whose knowledge of the Code and the case Law appears to be sadly inadequate.
In other words, in the case at bar, from the moment Benigno, as legal possessor (and, therefore, an agricultural lessor) granted
this cultivation and use of the landholding to Bernas in exchange or consideration for a sharing in the harvest, an agricultural
leasehold relationship emerged between them "by operation of law". c. whether or not an agricultural leasehold relation exists in any case is basically a question of law and cannot be left to the
determination or opinion of a MAR-investigator on the basis of one-sided evidence.

The fact that the transfer from Natividad to Benigno was gratuitous, we believe, is of no consequence as far as the nature and
status of Benigno's possession of the landholding is concerned. He became the legal possessor thereof from the viewpoint of This Court has ruled in Qua v. Court of Appeals, 198 SCRA 236 that —
the Code. And as legal possessor, he had the right and authority, also under the Code, to install or institute an agricultural
leasehold lessee on his landholding, which was exactly what he did, i.e. install Bernas as an agricultural leasehold lessee.
. . . as regards relations between litigants in land cases, the findings and conclusions of the Secretary of Agrarian Reform,
being preliminary in nature, are not in any way binding on the trial courts which must endeavor to arrive at their own
The argument that Benigno's (and consequently, Bernas') possession was meant to last for a limited period only, may appeal to independent conclusions.
logic, but it finds no support in the Code which has its own underlying public policy to promote. For Section 7 of the Code
provides:
The ruling finds support in the case of Graza v. CA (163 SCRA 39) citing Section 12 of PD No. 946 expressly stating that "the
preliminary determination of the relationship between the contending parties by the Secretary of Agrarian Reform or his
Sec. 7. Tenure of Agricultural Leasehold Relation. — The Agricultural Leasehold Relation once established shall confer upon authorized representative, is not binding upon the court, judge or hearing officer to whom the case is certified as a proper case
the agricultural lessee the right to continue working on the landholding until such leasehold relationship is extinguished. The for trial. Said court, judge or hearing officer, after hearing, may confirm, reverse or modify said preliminary determination as the
agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized evidence and substantial merits of the case may warrant." The court a quo in the case at bar tried the case on the merits,
herein-provided. (emphasis supplied) receiving the evidence of both parties and arrived at a conclusion different from that of the MAR investigator. It is to be noted
that even the Court of Appeals (which decided for Natividad) found no use for the MAR investigator's report and
recommendation, for obvious reasons. It is clear that the question of the existence of an agricultural leasehold relationship is
while Section 10 of the Code provides: a question of law which is properly within the province of the courts.

Sec. 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. — The agricultural leasehold relation The certification of the President of the Agrarian Reform Beneficiaries Association, Panay chapter "issued upon the request of
under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, Mrs. Deita" (meaning Natividad) that Bernas is not in the masterlist of tenants, should likewise be disregarded. Since when, it
alienation or transfer of the legal possession of the landholding. In case the agricultural lessor. sells, alienates or transfers the may be noted, was the legal question of agricultural leasehold relationship made to depend on a certification of such an
legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the association's president?
obligations of the agricultural lessor. (emphasis supplied).

The argument, that Bernas is not a lawful tenant of Natividad based on the doctrine in the case of  Lastimoza v. Blanco (1
and Section 36 of the Code provides: SCRA 231) is also not correct. The cited case does not support the desired conclusion. In the Lastimoza case, a certain Nestor
Panada had an oral contract of tenancy with a certain Gallego who was then in possession of the parcel of land. The latter
however was ejected after the Court of First Instance ruled in a land registration proceeding that it was Lastimoza who was the
Possession of Landholding; Exceptions. — Notwithstanding any agreement as to the period or future surrender of the land , an true owner of the land. The Court in effect ruled that Gallego was an unlawful possessor and thus Panada cannot be a lawful
agricultural lessee shall continue in the enjoyment and possession of his landholding   tenant. The factual background of the Lastimoza case and the present Bernas case are totally different; the first case cannot be
. . . . (emphasis supplied) applied to the second. When Bernas was instituted by Benigno as an agricultural lessee, Benigno was a legal possessor of the
landholding in question. No one can dispute this.

Clearly the return of legal possession from Benigno to Natividad cannot prejudice the rights of Bernas as an agricultural
leasehold lessee. The grounds for ejectment of an agricultural leasehold lessee are provided for by law. The enumeration The dissenting opinion states that ". . . it is not correct to say that every legal possessor, be he a usufructuary, or a bailee, is
is exclusive and no other grounds can justify termination of the lease. The policy and letter of the law are clear on this point. authorized as a matter of right to employ a tenant. His possession can be limited by agreement of the parties or by operation of
The relatively small area of the agricultural landholding involved (a little over half a hectare) would appear, in our view, to be of law." (p. 13) Even assuming arguendo that this is a correct legal statement, there is absolutely no showing that the possession
no consequence in this case. Here, the issue is not how much area  may be retained in ownership by the land owner Natividad of Benigno was limited by his agreement with Natividad (as to prohibit him from instituting a tenant) or by operation of law; and
but the issue is whether Bernas is a duly constituted agricultural leasehold lessee of the agricultural landholding ( regardless of because there is a total failure to disprove and even dispute that Benigno was a legal possessor at the time Bernas was
its area) and entitled to security of tenure therein. And, as abundantly shown, the Code is definitely and clearly on his side of installed by him as an agricultural lessee, then Bernas validly became an agricultural leasehold lessee of the land and is
this issue. protected by the law from ejectment except for causes specified therein.

It should be pointed out that the report and recommendation of the investigating officer of the Ministry of Agrarian Reform Finally, in relation to the dissenting opinion, it may be wise to repeat the statement of the Court in  Jose D. Lina, Jr. vs. Isidro
(MAR) finding that Bernas is not an agricultural leasehold should deserve little consideration. It should be stressed, in this Cariño (G.R. No. 100127, 23 April 1993) thus —
connection, that said report and recommendation is congenitally defective because —
The Court believes that petitioner's argument — cogent though it may be as a social and economic comment — is most
appropriately addressed, not to a court which must take the law as it is actually written, but rather to the legislative authority
which can, if it wishes, change the language and content of the law. (emphasis supplied)

In the case at bar, the language, policy and intent of the law are clear; this Court cannot interpose its own views as to alter
them. That would be judicial legislation.

WHEREFORE the petition is GRANTED. The decision of the respondent appellate court, is REVERSED and SET ASIDE and
that of the Regional Trial Court. REINSTATED. Costs against the private respondent.

SO ORDERED.

Cruz, Bidin, Griño-Aquino, Regalado, Romero, Nocon and Quiason, JJ., concur.

Puno and Vitug, JJ. took no part.