G.R. No. 207429 - Manila Electric Co. vs. AAA Cryogenics Philippines, Inc.

The subject property is located in Cabalantian, Bacolor, Pampanga, covering approximately ten (10) hectares.
Originally registered under Transfer Certificate of Title (TCT) No. 70829-R and formerly owned by Dalmacio Sicat.

On December 2, 1969, Dalmacio offered to sell the property to Pampanga Sugar Development Company (PASUDECO) for use as a housing complex for its laborers and employees.
The offered price was initially set at P8.00 per square meter, reduced to P5.00 per square meter on January 26, 1970, and finally negotiated to P4.00 per square meter as approved by PASUDECO’s Board Resolution No. 057 on April 15, 1970.
On May 22, 1970, Dalmacio, along with his tenants, filed a petition before the Court of Agrarian Relations seeking approval for the voluntary surrender of tenancy, which was subsequently granted effective May 21, 1970.
The same day, a Deed of Sale with Mortgage was executed between Dalmacio and PASUDECO.
Documentation for the conversion of the land to residential purposes was prepared, including a subdivision layout, topographic survey, monumenting of lot corners, and installation of “No trespassing” signs.
TCT Nos. 110325-R, 110326-R, and 110327-R were registered in favor of PASUDECO on May 31, 1974.
Due to financial setbacks after the imposition of Martial Law in 1972, the construction of the housing project was deferred by PASUDECO.

Petitioners (Joaquin Soliman, Lazaro Almario, Isidro Almario, Baldomero Almario, Demetrio Soliman, Romeo Abarin, Ernesto Tapang, and Crisostomo Abarin) claimed that they began cultivating the property as early as November 1970, with each claiming specific areas confirmed by subsequent certifications.
Areas cultivated were detailed as follows:

Additional certifications were issued by both the Barangay Agrarian Reform Committee (BARC) and the Barangay Chairperson verifying the continuous cultivation of the property by the petitioners from 1970 onward.
An ocular inspection and investigation by the Municipal Agrarian Reform Officer (MARO) in March 1990 confirmed cultivation activities on the property.
The petitioners further stated that lease rentals were collected by Ciriaco Almario, acting as overseer/caretaker for Gerry Rodriguez (PASUDECO’s manager), and that these payments were deposited with the Land Bank of the Philippines as “amortizations.”

In the latter part of April 1990, PASUDECO decided to revive its plan for a housing project on the property.
On May 14, 1990, petitioners sought relief by filing a complaint for Maintenance of Peaceful Possession and a request for a preliminary injunction against Gerry for alleged harassment and destruction of crops.
Petitioners alleged that PASUDECO regarded them as interlopers and not as lawful tenants, while PASUDECO maintained that no proper tenancy relationship existed because cultivation was conducted without its explicit authorization.
Subsequent actions included an amended complaint, trial on the merits, and evidentiary presentations including documentary evidence and official receipts from the Land Bank illustrating deposit-payments made by petitioners.

The Provincial Agrarian Reform Adjudicator (PARAD) rendered a decision on August 16, 1995, dismissing the petitioners’ complaint due to failure to prove direct tenancy and lack of evidence such as receipts for lease rental payments.
Petitioners appealed the PARAD decision by filing a Notice of Appeal with the Department of Agrarian Reform Adjudication Board (DARAB) on September 7, 1995, arguing that the PARAD had ignored substantial evidence supporting a tenancy relationship.
While the appeal was pending, the property was affected by lahar flows from Mount Pinatubo’s eruption in 1995, ceasing farming activities. Shortly thereafter, PASUDECO reasserted its ownership by fencing the property and placing additional signage.
On January 15, 2004, the DARAB reversed the PARAD ruling, finding that the property maintained its agricultural character and that implied consent and sharing could be inferred from petitioners’ long-term cultivation and deposit of payments with the Land Bank.
PASUDECO, unsatisfied with the DARAB decision, elevated the case to the Court of Appeals (CA), which on April 12, 2005, reinstated the PARAD ruling, determining no tenancy relationship existed due to the absence of the elements of consent and sharing.
Petitioners’ subsequent Motion for Reconsideration before the CA was denied, leading to the instant Petition for Review on Certiorari filed before the Supreme Court.

Whether the petitioners are de jure tenants of the subject property, which requires the establishment of a valid tenancy relationship based on mutual consent, personal cultivation, and sharing of the produce or payment of lease rentals.

Whether the acts of Ciriaco Almario, purportedly authorized by PASUDECO’s manager Gerry Rodriguez, established an implied tenancy through consent and sharing.
Whether the long period of cultivation and the deposit of payments with the Land Bank constitute sufficient evidence of a leasehold or tenancy relationship.
Whether the absence of formal receipts and explicit evidence of lease rental arrangements precludes the recognition of a de jure tenancy.
Whether the case falls under the jurisdiction of the Department of Agrarian Reform Adjudication Board based on the existence or absence of a tenancy relationship.

The CA held that in the absence of a proven tenancy relationship, the matter is outside the jurisdiction of the DARAB.
Petitioners argued that the conversion of share tenancy into leasehold under Section 5 of R.A. No. 3844 should have been recognized, hence establishing the necessary relationship.