G.R. No. 143385 - The Learning Child, Inc. vs. Lazaro

In 1954, petitioner Filomeno Catorce was instituted as tenant over an irrigated rice field located at Sta. Cruz, Buhi, Camarines Sur, covering an area of 0.7065 hectare.
The tenancy was subject to a sharing system where petitioner was responsible for all production expenses, receiving 1/4 part of the harvest while the owner obtained 3/4.
The land was cultivated biannually during the "cataunan" (June to November) and the "doble" (December to May) cropping seasons, yielding up to 25 cavans per season.

In 1960, the landowner mortgaged the property to Andrea Bagayawa, mother of respondent Pedro Bagayawa.
After the mortgage, Andrea began receiving the landowner’s share of the harvest from petitioner.
In October 1977, without petitioner’s knowledge or consent, Andrea took possession of the land and continued cultivating it, denying petitioner his share of the harvest.
Petitioner attempted to reclaim possession; however, Andrea intimated that she would only work the land for the "cataunan" season to recover her incurred expenses.
Petitioner, seeking peaceful resolution, agreed to "buy peace," yet subsequent attempts to regain control were met with continued resistance from Andrea and her son, Pedro Bagayawa.
Petitioner reported the incident to the Ministry of Agrarian Reform, which issued mediation notices to Andrea; however, she failed to appear.

On January 9, 1980, petitioner, assisted by the Bureau of Agrarian Legal Assistance, filed a Complaint for Reinstatement, Fixing of Leasehold Rentals and Damages with the Agrarian Court (CAR Case No. 6040).
The agrarian complaint was dismissed without prejudice because it did not first pass through the mandatory Lupon Pambarangay as required by Presidential Decree No. 1508.
Andrea Bagayawa subsequently died on January 30, 1980, and her son, Pedro Bagayawa, assumed possession of the land.

Petitioner refiled the Complaint on November 20, 1980 (CAR Case No. 6676-CS-80) against respondent Pedro Bagayawa.
Respondent failed to file an Answer within the reglementary period and did not appear during the scheduled hearing, prompting the court to allow petitioner to present evidence by affidavit.
On April 22, 1981, the Agrarian Court rendered a default judgment:

Declared petitioner the bona fide tenant (agricultural lessee) of the disputed land.
Ordered respondent (or his agents) to vacate the land and deliver possession to petitioner, ensuring the latter's peaceful possession and cultivation.
Awarded damages equivalent to 120 cavans of palay at 46 kgs. per cavan, or the monetary equivalent at the prevailing government price.
Directed both parties, upon reinstatement, to shift from share tenancy to a leasehold arrangement.
Fixed the leasehold rental at 5 cavans of clean palay at 46 kgs. per cavan per cropping season.
Dismissed other claims by petitioner for insufficiency of evidence and, finally, ordered respondent to pay the suit’s costs.

On June 11, 1981, respondent moved to set aside the default judgment on multiple grounds:

The Agrarian Court denied the motion on June 18, 1981 citing lack of merit.
Respondent filed a Motion for Reconsideration and a Notice of Appeal, attaching his Answer which asserted special and affirmative defenses, including:

The claim that petitioner had voluntarily surrendered the land.
The assertion that petitioner had no valid cause of action.
The contention that the action had already prescribed, being filed more than three years after the 1977 ejectment incident.

On January 18, 1982, the Appellate Court set aside the Agrarian Court’s decision on the ground that the action was barred by the three-year prescription as mandated by Section 38 of Republic Act No. 3844 (as amended by R.A. No. 6389).

The Supreme Court reversed the Appellate Court’s decision.
It held that petitioner’s rights were not foreclosed by prescription since the prescriptive period should be reckoned from the filing of the first complaint (January 9, 1980) rather than from the second filing (November 20, 1980).
The Court underscored that the dismissal of the first complaint was due to a procedural technicality, not an abandonment of petitioner’s rights.
Emphasizing the security of tenure for agricultural tenants, the Court noted that respondent’s attempt to rely on prescription must yield to equitable considerations and the legislative intent of the Agricultural Land Reform Code.

Is the prescription period, as provided by Section 38 of Republic Act No. 3844 (as amended), to be computed from the first complaint filed on January 9, 1980, or from the second complaint filed on November 20, 1980?
Does the procedural dismissal of the initial complaint due to non-compliance with Lupon Pambarangay requirements affect the computation of the prescriptive period?

Whether the equitable protection under the Agricultural Land Reform Code, which guarantees the security of tenure for tenants, outweighs strict prescription rules.
If the tenant’s rights should be liberally interpreted such that technical non-compliance should not defeat substantive claims of wrongful dispossession.

Whether respondent’s defenses, particularly the alleged voluntary surrender and prescription, were properly substantiated or amounted to mere evasive pleadings.
Whether the respondent was denied his right to a proper hearing, thus justifying the reversal of the appellate decision.