THIRD DIVISION

[ G.R. No. 219670. June 27, 2018 ]

J.V. LAGON REALTY CORP., REPRESENTED BY NENITA L. LAGON IN HER
CAPACITY AS PRESIDENT, PETITIONER, V. HEIRS OF LEOCADIA VDA. DE
TERRE, NAMELY: PURIFICACION T. BANSILOY, EMILY T. CAMARAO, AND
DOMINADOR A. TERRE, AS REPRESENTED BY DIONISIA T. CORTEZ,
RESPONDENTS.

DECISION
MARTIRES, J.:

The existence of a tenancy relationship cannot be presumed, and claims that one is a
tenant do not automatically give rise to security of tenure.[1]
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to
reverse and set aside the 23 March 2015 Decision[2] and 29 July 2015 Resolution[3] of
the Court of Appeals (CA) in CA-G.R. SP No. 05331-MIN. The assailed issuances
affirmed in toto the 13 April 2012 Decision[4] of the Department of Agrarian Reform
Adjudication Board (DARAB) in DARAB Case No. 14553.

THE FACTS

The case stemmed from a complaint for illegal ejectment, payment of disturbance
compensation, and damages filed by Leocadia Vda. De Terre (Leocadia) against
petitioner J.V. Lagon Realty Corporation (J V. Lagon) before the Provincial Adjudicator
(PARAD), docketed as DARAB Case No. R-1205-0001-97.

It was alleged in the complaint that sometime in 1952, Antonio Pedral (Pedral) instituted
Leocadia and her spouse, Delfin Terre (the spouses Terre)),[5] to work as share tenants
over his 5-hectare agricultural landholding known as Lot 587 located at Tacurong,
Sultan Kudarat. Three (3) years later, Pedral sold the land to Jose Abis (Abis) who, in
turn, sold the same to Augusto Gonzales (Gonzales) in 1958.

During the said transfers of ownership, the spouses Terre were allegedly retained as
tenants of the entire 5-hectare landholding. In the 1960s, Gonzales reduced their tillage
to 2.5 hectares, and the other half of the land was given to Landislao Bedua and
Antonillo Silla to till. On their 2.5 hectares, the Spouses Terre constructed a house and
that of their daughter's.

In 1988, the spouses Terre were surprised when they were informed that J.V. Lagon
had already bought the entire 5-hectare land from the heirs of Gonzales. Later on, J.V.
Lagon constructed a scale house within the 2.5 hectare land tilled by the spouses Terre.
In 1989, J.V. Lagon warned the spouses to stop cultivating the land because the whole
lot was to be developed for commercial or industrial use. In that same year, Delfin died,
purportedly due to mental anguish over the turn of events. In 1990, J.V. Lagon filled the
eastern portion of the land with earth and boulders.

On 7 May 1991, Leocadia filed a complaint before the Barangay Agrarian Reform
Committee (BARC). The following day, on 8 May 1991, a complaint was also lodged
before the Municipal Agrarian Reform Officer (MARO). No appropriate action, however,
was taken on the said complaints until the dispute was eventually brought before the
PARAD on 19 June 1997.[6]

Leocadia claimed that the works done by J.V. Lagon were tantamount to conversion of
the land for non-agricultural purposes. Also, Leocadia averred that she was not duly
notified in writing about the sale between Gonzales and J.V. Lagon. Thus, her 180-day
right of redemption pursuant to Section 12 of Republic Act (R.A.) No. 3844, as amended
by R.A. No. 6389,[7] did not commence. Accordingly, it was prayed that she be allowed
to exercise her right of redemption over the land, the expenses thereof to be shouldered
by the Land Bank of the Philippines.

In her bid to prove the existence of tenancy, Leocadia relied, inter alia, on the following
documents: (a) 23 April 1997 Certification issued by Geronimo P. Arzagon, Municipal
Mayor of Tacurong, Sultan Kudarat, certifying that the spouses Terre were actual
tenants of the land;[8] (b) Pedral's affidavit dated 4 July 1987, confirming his consent for
the spouses Terre to be his agricultural tenants at a 70-30 sharing of harvest in their
favor;[9] (c) affidavit dated 28 July 1997, executed by MARO Perfecto Bergonia, Jr.
stating that Terre, a tenant, filed a complaint on 7 July 1991, concerning her illegal
ejectment.[10]

On the other hand, J.V. Lagon countered that Leocadia had no cause of action simply
because there was no tenancy to speak of. J.V. Lagon asseverated that Lot 587 had
ceased to be agricultural and was already classified as commercial, the same having
been utilized as the site of the Rural Bank of Tacurong. Also, at the time the landholding
was purchased from Gonzales in 1988, no tenant was found cultivating the land.

Further, J.V. Lagon argued that there was a dearth of evidence to prove the allegation
of tenancy, in that it was not even established as to whom Leocadia had paid rentals to.
In the same vein, it raised the affirmative defense of prescription, contending that the
complaint was filed more than three (3) years after the cause of action accrued in 1988.

The PARAD Ruling

In its 3 April 2002 decision,[11] the PARAD ruled in favor of J.V. Lagon. It opined that
Leocadia's complaint was already barred by prescription and laches, as the cause of
action accrued in 1988 when J.V. Lagon constructed a scale house in the allegedly
tenanted area. Also, the PARAD ruled that the filing of the complaint with the MARO in
1991 did not toll the running of the prescriptive period because it was the DARAB that
had jurisdiction over agrarian disputes.

With respect to the issue on redemption, the PARAD observed that as vendee, J.V.
Lagon failed to give Leocadia a written notice of the sale. Nevertheless, it resolved to
deny the claim for redemption on the finding that Leocadia had actual knowledge of the
sale as early as 1988 when she confronted J.V. Lagon about the scale house.

Anent the question of whether there was tenancy, the PARAD held that Leocadia failed
to establish her status as a de jure tenant. It found scant evidentiary value on the
documents she presented. In so ruling, the PARAD pointed out that Pedral, as former
owner, could attest to the condition of the land only from 1947 to 1955 when he was still
the owner thereof, and not after he had already sold the property. Moreover, the
PARAD was of the view that certifications issued by administrative agencies or officers
as regards tenancy relations are merely provisional in nature.

Finally, the PARAD was convinced that the disputed real property was not an
agricultural land. It noted that the Rural Bank of Tacurong was situated at the heart of
the subject landholding; and that per photocopy of the Urban Land Use Plan as certified
by the Office of the City Planning and Development Coordinator, the said land was
already classified as commercial.[12] The dispositive portion reads:
WHEREFORE, PREMISES CONSIDERED, judgement is hereby rendered:

Declaring the herein complaint filed on June 17, 1991 barred by prescription;
Complainant's claim for disturbance compensation is denied for lack of merit;
Complainant's right to redeem the property is also denied for lack of merit; and,
Other claims are likewise denied for lack of merit.
No costs.

SO ORDERED.

Aggrieved, Leocadia filed an appeal before the DARAB.

The DARAB Ruling

In its 13 April 2012 decision, the DARAB reversed and set aside the PARAD's ruling. It
held that Leocadia's action was not barred by prescription because the filing of the
complaint with the BARC on 7 May 1991 tolled the running of the prescriptive period.

In contrast to the PARAD's analysis, the DARAB found probative value on the
documents Leocadia presented. It concluded that tenancy existed, as evinced by the
fact that Leocadia's house was erected inside the subject landholding; and such fact
was attested to by the affidavits of the former MARO Perfecto Bergonia and of Mayor
Geronimo P. Arzagon of Tacurong City.[13]

Similarly, the DARAB opined that Pedral's affidavit declaring that he installed the
Spouses Terre as share tenants sufficiently proved the existence of tenancy
relationship. Citing Section 10 of R.A. No. 3844,[14] it held that tenancy is attached to
the land regardless of whoever may have become the owner thereof. Thus, Leocadia's
status as a tenant was not extinguished by the successive transfers of ownership from
Pedral to Abis, and then to Gonzales, and finally to J.V. Lagon, as the latter assumed
the rights and obligations of the preceding transferors.
The DARAB further ruled that Leocadia was entitled to redeem the land from J.V.
Lagon. It cited Section 12 of R.A. No. 3844, as amended by R.A. No. 6389[15] which
provides that the right of redemption may be exercised within 180 days from notice in
writing which shall be served by the vendee on all lessees affected and on the DAR
upon registration of the sale. In view of the PARAD's finding that J.V. Lagon failed to
give notice in writing of the sale, the DARAB declared that Leocadia's right of
redemption did not prescribe, a written notice of the sale being an indispensable
requirement of the law.

Lastly, Leocadia's prayer for disturbance compensation was granted. The DARAB
ratiocinated that J.V. Lagon merely alleged that the land was no longer agricultural; and
that J.V. Lagon failed to support its allegation as no tax declarations, DAR certification
or city zoning certification were shown to prove the land's classification as commercial.
The decretal portion reads:

WHEREFORE, premises considered, the appealed decision dated April 3, 2002 and
Resolution dated December 13, 2002 are hereby REVERSED and SET ASIDE and a
new judgment rendered:

Declaring herein complainant a bona fide tenant over the lot in suit entitled to security of
tenure;
Upholding complainant's right of redemption and for this purpose, the Land Bank of the
Philippines, thru its Regional branch or office concerned is directed to finance her right
of redemption;
In case the land in suit had already been lawfully converted to commercial use,
complainant is entitled to payment of disturbance compensation pursuant to Section 36,
par. 1 of RA 6389.
No pronouncement as to claims and counterclaims for insufficient evidence.

Dissatisfied, J.V. Lagon filed a Rule 43 petition for review before the CA. Meanwhile, on
18 October 2013, Leocadia died, prompting her heirs to file a manifestation with motion
for substitution[16] before the CA.

The CA Ruling
In the assailed 23 March 2015 decision, the CA affirmed in toto the DARAB's ruling. It
held that Leocadia was able to establish that she was the tenant of the subject
landholding. Such tenancy commenced in 1952 when Pedral, the original owner,
installed her and Delfin as share tenants. The appellate court espoused a similar view
that the documents Leocadia presented substantiated her claim of tenancy.

Considering that there was tenancy between Pedral and Leocadia, the CA decreed that
there was subrogation of rights to Abis, then to Gonzales, and finally to J.V. Lagon, as
landowners. The tenancy relationship was not terminated by changes of ownership
pursuant to Section 10 of R.A. No. 3844.[17] Likewise, the CA sustained the DARAB's
finding that, as a tenant, Leocadia was entitled to redeem the land consequent to the
lack of written notice of the sale. The fallo reads:

WHEREFORE, the appeal is DENIED. The Decision dated April 13, 2012 and the
Resolution dated September 13, 2012 of the Department of Agrarian Reform
Adjudication Board in DARAB Case No. 14553 declaring Leocadia V da. De Terre as
bona fide tenant under Republic Act No. 3844 is AFFIRMED IN TOTO.

xxxx

SO ORDERED.[18]

In the assailed 29 July 2015 Resolution, the CA resolved to deny J.V. Lagon's motion
for reconsideration, and to grant the motion for substitution filed by the heirs of
Leocadia.[19]

The Present Petition

J.V. Lagon submits in this petition for review on certiorari, that the subject landholding is
no longer agricultural; that Leocadia's cause of action has already prescribed; and that
she has no right to redeem the property nor to receive disturbance compensation.
Stripped to its core, the petition before the Court posits the kernel argument that there is
no tenancy relation between J.V. Lagon and Leocadia.
In their comment, the heirs of Leocadia contend that there is no need to adduce
evidence to prove Leocadia's status as a bona fide tenant because tenancy is attached
to the land irrespective of whoever becomes its subsequent owner. Taking cue from the
DARAB's findings, they maintain that the filing of the complaint with the BARC on 7 May
1991 tolled the running of the prescriptive period. As a final point, the heirs of Leocadia
assert that she is entitled to redeem the landholding because the law speaks of written
notice of the sale and not actual or personal knowledge thereof.

The pleadings and the arguments proffered beckon the Court to examine a singular
point of law on which all the matters raised are inevitably hinged.

ISSUE

WHETHER OR NOT THERE IS A TENANCY RELATIONSHIP BETWEEN J.V. LAGON

REALTY AND LEOCADIA.

THE COURT'S RULING

The petition is impressed with merit.

There is a tenancy relationship if the following essential elements concur: 1) the parties
are the landowner and the tenant or agricultural lessee; 2) the subject matter of the
relationship is an agricultural land; 3) there is consent between the parties to the
relationship; 4) the purpose of the relationship is to bring about agricultural production;
5) there is personal cultivation on the part of the tenant or agricultural lessee; and 6) the
harvest is shared between landowner and tenant or agricultural lessee.[20]

All of the above requisites are indispensable in order to create or establish tenancy
relationship between the parties. The absence of at least one requisite does not make
the alleged tenant a de facto one, for the simple reason that unless an individual has
established one's status as a de jure tenant, he is not entitled to security of tenure
guaranteed by agricultural tenancy laws.[21]
The onus rests on Leocadia to prove her affirmative allegation of tenancy.[22] It is
elementary that one who makes an affirmative allegation of an issue has the burden of
proving the same; and in the case of the plaintiff in a civil case, the burden of proof
never parts. The same rule applies in proceedings before the administrative tribunals. In
fact, if the complainant, upon whom rests the burden of proving his cause of action, fails
to show in a satisfactory manner the facts upon which he bases his claim, the
respondent is under no obligation to prove his exception or defense.[23]

To recapitulate, Leocadia presented the following documents to prove the existence of

tenancy: (a) 23 April 1997 certification issued by Geronimo P. Arzagon, Municipal
Mayor of Tacurong, Sultan Kudarat, that the Spouses Terre were actual tenants of the
land; (b) Pedral's affidavit dated 4 July 1987 confirming his consent for the Spouses
Terre to be his agricultural tenants at a 70-30 sharing of harvest in their favor; (c)
affidavit dated 28 July 1997, executed by MARO Perfecto Bergonia, Jr. stating that
Terre, a tenant, filed a complaint on 7 July 1991, concerning her illegal ejectment.

The issue of tenancy, whether a person is an agricultural tenant or not, is generally a

question of fact. To be precise, however, the existence of a tenancy relationship is a
legal conclusion based on facts presented corresponding to the statutory elements of
tenancy.[24] Both the DARAB and the CA appreciated the aforementioned pieces of
evidence as sufficient to prove Leocadia's de jure status as a tenant in the subject
landholding.

This is untenable.

Accordingly, it is crucial to go through the evidence and documents on record in order to

arrive at a proper resolution of the case.

Pedral's affidavit does not prove that there is tenancy between Leocadia and J.V.
Lagon.
It is a basic rule in evidence that a witness can testify only on the facts that are of his
own personal knowledge; that is, those which are derived from his own perception.[25]
Therefore, even if the Court were to take hook, line, and sinker Pedral's declaration that
he installed Leocadia and Delfin as tenants, such declaration may be accorded
probative value only during the interim period within which he was the owner of the land.
The logic behind is simple, i.e., Pedral ceased to have any personal knowledge as to
the status and condition of the land after he had sold the same to Abis. Put differently,
absence of personal knowledge rendered Pedral an incompetent witness to testify on
the existence of tenancy from the moment the land was passed on to Abis and his
subsequent transferees.

To recall, the land was involved in three transfers over the course of 33 years, to wit:
Pedral to Abis, Abis to Gonzales, and finally from Gonzales to J.V. Lagon. This series of
transfers shows that Pedral was not J.V. Lagon's immediate predecessor-in-interest.
When J.V. Lagon became the absolute owner of the land, it was subrogated to the
rights and obligations of Gonzales, not Pedral 's. Gonzales was the person privy to the
sale that brought forth J.V. Lagon's ownership. In short, title to the land was derived
from Gonzales. This being the case, the DARAB and the CA erred when they relied
upon Pedral's affidavit to support the conclusion that J.V. Lagon acquired a tenanted
land. Whether or not the land was tenanted at the time of J.V. Lagon's entry is a matter
already beyond the competence of Pedral to testify on.

Leocadia anchors her claim against J.V. Lagon on Section 10 of the Agricultural Land
Reform Code which, in essence, states that the existence of an agricultural leasehold
relationship is not terminated by changes in ownership in case of sale or transfer of
legal possession.[26] The fundamental theory of her case parlays the notion that she
was an agricultural lessee during the period of Abis' and Gonzales' respective
ownership of the land spanning from 1955-1988; such that at the time J.V. Lagon came
into possession, there was a subsisting tenancy which the latter assumed by operation
of law.

The evidence on record, however, is bereft of any affirmative and positive showing that
tenancy was maintained on the land throughout the three decades leading to J.V.
Lagon's acquisition in 1988. Before Leocadia's claims against J.V. Lagon can prosper, it
must first be established that the latter acquired land which was tenanted. On this
premise, the scope of judicial inquiry inexorably backtracks to Gonzales' epoch. Were
there agricultural tenants on the land during Gonzales' ownership? The answer could
have easily been supplied by none other than Gonzales himself who was in the best
position to attest on the status of the land acquired by J.V. Lagon. A testimony or an
affidavit from Gonzales would have served to substantiate Leocadia's allegation that
she had been a tenant on the land prior to J.V. Lagon's entry. Unfortunately, the record
only contains an affidavit from Pedral, a person whose ownership of the land is,
borrowing Justice Leonen's term, "thrice-removed" from J.V. Lagon.

Being the party alleging the existence of tenancy relationship, Leocadia carried the
burden of proving her allegation. With only Pedral's affidavit as proof, the Court is
unable to agree with the DARAB and the CA that tenancy was established by
substantial evidence. As explained above, Pedral's affidavit leaves much to be desired,
and it is inadequate basis to support a conclusion that Leocadia remained as a tenant
on the land throughout the three decades preceding J.V. Lagon's ownership.
Agricultural tenancy is not presumed.[27] It is a matter of jurisprudence that tenancy is
not purely a factual relationship dependent on what the alleged tenant does upon the
land.[28] More importantly, it is a legal relationship the existence of which must be
proven by the quantum of evidence required by law.

Absence of harvest sharing belies claim of tenancy relationship.

In Landicho v. Sia,[29] the Court declared that independent evidence, such as receipts,
must be presented to show that there was a sharing of the harvest between the
landowner and the tenant. Bejasa v. CA[30] similarly held that to prove sharing of
harvests, a receipt or any other evidence must be presented, as self-serving statements
are deemed inadequate. Proof must always be adduced.[31] In another case, the Court
ruled against the existence of tenancy for failure of the alleged tenant to substantiate
the element of sharing of harvest, viz:

Here, there was no evidence presented to show sharing of harvest in the context of a
tenancy relationship between Vicente and the respondents. The only evidence
submitted to establish the purported sharing of harvests were the allegations of Vicente
which, as discussed above, were self-serving and have no evidentiary value. Moreover,
petitioner's allegations of continued possession and cultivation do not support his cause.
It is settled that mere occupation or cultivation of an agricultural land does not
automatically convert a tiller or farm worker into an agricultural tenant recognized under
agrarian laws. It is essential that, together with the other requisites of tenancy
relationship, the agricultural tenant must prove that he transmitted the landowner's
share of the harvest.[32]

The DARAB and the CA committed reversible error when they failed to notice that not a
single receipt or any other credible evidence was adduced to show sharing of harvest in
the context of tenancy. The record only contains the allegation that there is a 1/3-2/3
system of harvest sharing with Pedral, and 70-30 for Abis and Gonzales.[33] Substantial
evidence necessary to establish the fact of sharing cannot be satisfied by a mere
scintilla of evidence; there must be concrete evidence on record adequate to prove the
element of sharing.[34] As reiterated in VHJ Construction v. CA,[35]
In Berenguer, Jr. v. Court of Appeals, we ruled that the respondents' self-serving
statements regarding tenancy relations could not establish the claimed relationship. The
fact alone of working on another's landholding does not raise a presumption of the
existence of agricultural tenancy. There must be substantial evidence on record
adequate enough to prove the element of sharing.

xxx

To prove such sharing of harvests, a receipt or any other evidence must be presented.
Self-serving statements are deemed inadequate; competent proof must be adduced.

Further to the lack of receipts, the record is likewise devoid of testimony from either
Pedral, Abis or Gonzales acknowledging the fact that they received a share in the
harvest of a tenant. In the absence of receipts or any concrete evidence from which it
can be inferred that Leocadia transmitted the landowner's share of her produce, the
Court is constrained to declare that not all elements of tenancy relationship are present.

The MARO's affidavit and the municipal mayor's certification do not prove tenancy.
It is well-entrenched in our jurisprudence that certifications of administrative agencies
and officers declaring the existence of a tenancy relation are merely provisional. They
are persuasive but not binding on the courts, which must make their own findings.[36]
As held in Soliman v. PASUDECO (Soliman):[37]

The certifications attesting to petitioners' alleged status as de jure tenants are

insufficient. In a given locality, the certification issued by the Secretary of Agrarian
Reform or an authorized representative, like the MARO or the BARC, concerning the
presence or the absence of a tenancy relationship between the contending parties, is
considered merely preliminary or provisional, hence, such certification does not bind the
judiciary.

The ruling in Soliman was echoed in the later case of Automat Realty v. Spouses Dela
Cruz,[38] viz:
This court has held that a MARO certification concerning the presence or the absence
of a tenancy relationship between the contending parties, is considered merely
preliminary or provisional, hence, such certification does not bind the judiciary.

Several elements must be present before the courts can conclude that a tenancy
relationship exists. MARO certifications are limited to factual determinations such as the
presence of actual tillers. It cannot make legal conclusions on the existence of a
tenancy agreement.

The Court's pronouncement in the foregoing cases applies with equal force to the
certification issued by the municipal mayor of Tacurong. Like the MARO's affidavit, the
municipal mayor's certification deserves scant consideration simply because the mayor
is not the proper authority[39] vested with the power to determine the existence of
tenancy. Besides, the MARO and the mayor merely affirmed the fact that Leocadia lived
in a hut erected on the subject landholding.[40] If we subscribe to the DARAB's fallacy,
then anyone who squats on an agricultural land or constructs a hut with the consent of
the owner becomes a tenant. It bears to stress that mere occupation or cultivation of an
agricultural land does not automatically convert a tiller or farmworker into an agricultural
tenant recognized under agrarian laws.[41]

While tenancy presupposes physical presence of a tiller on the land, the MARO's
affidavit and the mayor's certification fall short in proving that Leocadia's presence
served the purpose of agricultural production and harvest sharing. Again, it cannot be
overemphasized that in order for a tenancy to arise, it is essential that all its
indispensable elements must be present.[42]

All told, the evidence on record is inadequate to arrive at a conclusion that Leocadia
was a de jure tenant entitled to security of tenure. The requisites for the existence of a
tenancy relationship are explicit in the law, and these elements cannot be done away
with by conjectures.[43]

As a final word, the Court sees no more reason to belabor the other points raised by the
parties, particularly on the right of redemption and entitlement to disturbance
compensation. It is the juridical tie of tenancy relationship that breathes life to these
kindred rights provided for by our agricultural laws. There being no tenancy relationship,
the issues raised on these points have thus become moot and academic.
WHEREFORE, the petition is GRANTED. The assailed 23 March 2015 Decision and 29
July 2015 Resolution of the CA in CA-G.R. SP No. 05331-MIN are hereby VACATED
and SET ASIDE, and a new one is entered DISMISSING the complaint against
petitioner J.V. Lagon Realty Corporation.

SO ORDERED.

Velasco, Jr. (Chairperson), Bersamin, and Gesmundo, JJ., concur.

Leonen, J., dissent. See separate opinion.