Title
Alarcon vs. Court of Appeals
Case
G.R. No. 152085
Decision Date
Jul 8, 2003
Saltbed tenants sought disturbance compensation after land reclassification and pollution disrupted tenancy; Court ruled compensation only due if landowner initiates ejectment proceedings.
disturbance compensation
tenants
landowner
A

Case Summary (G.R. No. 152085)

Nature of the Controversy

The dispute centered on whether mere reclassification of agricultural land into residential use, without any final court authorization or ejectment action at the instance of the landowner, entitles agricultural tenants to disturbance compensation. Petitioners argued for compensation based on the statutory scheme they cited. Respondent, Pascual and Santos, Inc., denied liability, insisting that disturbance compensation under the relevant provisions required an authorized dispossession through court proceedings, and that reclassification alone did not extinguish the tenancy.

Factual Background: The Tenancy and Its Interruption

Respondent corporation owned saltbeds located in Barangay San Dionisio, Manuyo, Paranaque. In 1950, respondent instituted petitioners as tenants under a fifty-fifty share tenancy agreement. The Court treated the tenurial relationship as harmonious until 1994, when the city government of Paranaque, represented by then Mayor Pablo Olivares, authorized the dumping of garbage on an adjoining lot.

The garbage allegedly polluted the main source of salt water, adversely affecting salt production on the saltbeds. Petitioners informed respondent of the development, but respondent allegedly failed to take steps to prevent the dumping. Petitioners then filed a formal protest with the City Government of Paranaque, but their complaint was ignored. Petitioners thus brought the matter before the agrarian forum.

Initial Complaint Before the Agrarian Adjudicator

Petitioners filed with the Regional Agrarian Reform Adjudicator of Region IV (RARAD-IV) a complaint against respondent and Mayor Pablo Olivares for maintenance of peaceful possession and security of tenure with damages. They later amended the complaint to seek damages and disturbance compensation, including a prayer for temporary restraining order and injunction.

In their complaint, petitioners invoked Sections 7, 30(1), and 31(1) of R.A. 3844. They sought relief consistent with the statutory protections afforded to agricultural tenants, particularly on peaceful possession, restrictions on dispossession, and disturbance compensation.

RARAD-IV Decision: Reclassification and Partial Dismissal

On July 28, 1997, Regional Adjudicator Fe Arche-Manalang rendered a decision. The adjudicator held that, under Metro Manila Zoning Ordinance No. 81-01 (issued in 1981), the subject saltbeds had been reclassified to residential lands. From this, the adjudicator concluded that the juridical tie between petitioners and respondent was severed because no tenurial relationship could exist on land no longer agricultural.

Notwithstanding the severance theory, the RARAD-IV ruled that petitioners were still entitled to disturbance compensation under Section 36, par. 1 of R.A. 3844, as amended. The adjudicator also dismissed petitioners’ complaint insofar as it sought relief against Mayor Pablo Olivares, holding that the DAR had no jurisdiction over the complaint against him.

The dispositive portion ordered respondent Pascual and Santos, Inc. to pay each complainant 1,500 cavans of salt or their money equivalent at prevailing market value as disturbance compensation. Other claims were dismissed for lack of basis.

DARAB and Court of Appeals Proceedings

On appeal, the DARAB affirmed the RARAD-IV decision in toto. Respondent then filed a petition for review with the Court of Appeals, docketed as CA-G.R. SP No. 63680.

On September 28, 2001, the Court of Appeals reversed the DARAB and ordered the dismissal of petitioners’ complaint against respondent. Petitioners’ motion for reconsideration was denied, prompting the present petition to the Supreme Court.

Petitioners’ Arguments in the Supreme Court

Petitioners urged that a landowner is not liable for disturbance compensation upon a mere reclassification of land, absent the landowner’s active participation, because such interpretation would render Section 31(1) of R.A. 3844 nugatory. They also argued that Metro Manila Zoning Ordinance No. 81-01 did not extinguish the landlord-tenant relationship, and that reclassification alone entitled tenants to disturbance compensation because tenurial relations could continue even after reclassification.

Procedural Issue: Whether RA 1199 or RA 3844 Governs Saltbeds

Before resolving the main issue, the Court addressed a procedural or preliminary matter raised by respondent concerning the governing law. Respondent contended that Republic Act No. 1199, the Agricultural Tenancy Act of the Philippines, controlled because Section 35 of R.A. 3844 allegedly exempted saltbeds and provided that R.A. 1199 governed the tenancy system prevailing on saltbeds.

Petitioners did not prevail on that issue. The Court held that Section 76 of Republic Act No. 6657 (the Comprehensive Agrarian Reform Law) expressly repealed Section 35 of R.A. 3844, thereby abolishing the saltbed exemption. The Court therefore concluded that R.A. 3844—not R.A. 1199—governed the petition.

Main Issue and Governing Agrarian Law Principles

On the core issue, the Court examined the legal effect of reclassification from agricultural to non-agricultural use, and whether it creates liability for disturbance compensation. Petitioners relied on the concept that they had been dispossessed and thus were entitled to compensation. Respondent countered that, under Sections 30 and 31(1) of R.A. 3844, a landowner’s disturbance compensation liability required a court-authorized ejectment sought on the ground that the land had been reclassified.

The Court reiterated that once a tenancy relationship is established, the tenant is entitled to security of tenure, and can be ejected only for causes provided by law and only upon court authorization. This principle is reflected in Section 7 of R.A. 3844, which provides that the agricultural leasehold relation once established confers upon the agricultural lessee the right to continue working until the leasehold relation is extinguished, and the tenant cannot be ejected unless authorized by the Court for causes provided by the Code.

The Court linked the ejectment requirement to the statutory framework of Section 36, which allows lawful dispossession only when the tenant’s dispossession is authorized by the Court in a final and executory judgment after due hearing, upon proof that the landholding was declared suited for urban purposes. If ejectment is authorized, the statute grants the tenant disturbance compensation equivalent to five times the average of the gross harvests on the landholding during the last five preceding calendar years.

Reclassification Alone and the Need for Court Authorization

Applying the statutory scheme, the Court held that a tenant can be lawfully ejected only if there is a court authorization in a final and executory judgment and after due hearing where the reclassification of the landholding was duly determined. Petitioners argued that the RARAD decision, affirmed by the DARAB, satisfied the required judgment. The Court rejected that contention because, at the time of the Supreme Court review, the RARAD decision was not yet final and executory; it was still being challenged through the petition for review.

The Court further ruled that reclassification alone did not entitle petitioners to disturbance compensation absent the indispensable court process. It emphasized that court proceedings were necessary where reclassification was duly determined before ejectment could be effected, and only then could disturbance compensation follow.

Continued Tenurial Relationship and the Real Cause of Interruption

The Court also considered the actual course of events after the 1981 reclassification. It noted that the parties continued their landlord-tenant relationship even after the enactment of Metro Manila Zoning Ordinance No. 81-01. The Court found it undisputed that the tenancy relationship persisted. It was only in 1994 that the relationship was interrupted due to the dumping of garbage by the Paranaque City Government, which polluted the salt water source.

Thus, the Court reasoned that respondent could not be held liable for disturbance compensation for an interruption caused by an event outside respondent’s commission or actionable omission. The factual setting showed that dispossession or disturbance, as alleged, did not occur by reason of a tenant-ejectment action based on reclassification pursued by the landowner, but instead arose from the city’s authorized dumping and its consequent environmental effect.

Burden of Proof Under Section 37 of RA 3844

The Court addressed petitioners’ attempt to detach disturbance compensation from the landowner’s action. It held that Section 37 of R.A. 3844 expressly imposes on the landowner or agricultural lessor the burden of proof to show the existence of a lawful cause for ejectment enumerated in Section 36. The Court cited the settled evidentiary rule that one who alleges a fact has the burden of proving it. It concluded that the action resulting in a tenant’s dispossession would be commenced by the landowner and therefore would require the landowner to prove the statutory grounds for ejectment.

Distinguishing Bunye v. Aquino

Petitioners invoked Bunye v. Aquino. The Court held that Bunye did not apply. In Bunye, disturbance compensation had been allowed because there was an order of conversion issued by the Department of Agrarian Reform converting the land from agricultural to residential, and that decree was not questioned, thus becoming final. As a result, tenants were ejected and were awarded disturbance compensation.

By contrast, in the present case, the Court found no final order of conversion. It distinguished conversion from reclassification. The Court explained that conversion was the act of changing the current use of agricultural land into another use as approved by the DAR, pursuant to the land conversion rules. Reclassification, in turn, was the specifying of how agricultural lands were to be utilized for non-agric

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