Cruz vs. Cervantes

Automatic referral to the DAR under Section 50-A does not divest the Municipal Trial Court of jurisdiction over unlawful detainer where tenancy is not established by substantial evidence and the PARO certification states no supporting findings of fact.

Petitioners Antonio R. Cruz and Loreto Teresita Cruz-Dimayacyac are the children and surviving heirs of the late spouses Dr. Progedio R. Cruz and Teresa Reyes, declared owners for taxation purposes of a 2,702.10-square meter parcel in Bintog, Plaridel, Bulacan. Respondents Carling Cervantes and Celia Cervantes Santos are the children of Isidro Sta. Cruz Cervantes, who occupied a portion of the property with his family. The Comprehensive Agrarian Reform Law of 1988, as amended by Republic Act No. 9700, vests the Department of Agrarian Reform with primary and exclusive jurisdiction over agrarian disputes and mandates automatic referral by the judge or prosecutor when an agrarian nature is alleged and one party is a farmer, farmworker, or tenant, implemented through Office of the Court Administrator Circular No. 62-10 and Department of Agrarian Reform administrative orders.

Sometime in 1960, Isidro Sta. Cruz Cervantes, father of respondents Carling Cervantes and Celia Cervantes Santos, accompanied by a close relative of Dr. Progedio R. Cruz, went to the residence of spouses Dr. Progedio R. Cruz and Teresa Reyes in Oroquieta, Manila, to ask permission to temporarily occupy a portion of the spouses' 2,702.10-square meter land in Bintog, Plaridel, Bulacan and erect a residential house thereon. Teresa granted the request on condition that Isidro and his family would vacate upon demand when need for the property arose. Progedio died in 1966 and Teresa in 1999, after which petitioners Antonio R. Cruz and Loreto Teresita Cruz-Dimayacyac, as owners by succession, continued to tolerate the occupation. Isidro died in 2005, and respondents continued to occupy the property under the same claimed temporary arrangement.

In 2015 petitioners decided to sell the property to generate funds for daily medical maintenance. Thereafter, on October 20, 2015, through counsel and by registered mail, they sent a demand letter formally revoking permission and tolerance and directing respondents to vacate within fifteen days from receipt. Notwithstanding receipt, respondents failed and refused to turn over possession.

Because no turnover followed, petitioners filed a complaint for unlawful detainer dated February 22, 2016 before the Municipal Trial Court of Plaridel, Bulacan, praying that respondents vacate and turn over possession and pay rentals of ₱5,000.00 monthly from filing until vacatur. According to respondents in their Answer dated March 11, 2016, petitioners had no cause of action for failure to prove sole successional right, and the Municipal Trial Court had no jurisdiction because the property was agricultural and respondents were tenants who succeeded their father Isidro, tenant of spouses Cruz from 1965 to 2005, making cognizance proper only for the Department of Agrarian Reform Adjudication Board. Respondents alleged Isidro cultivated the land with camote, palay, mustasa, corn, tomato, coconut and mango, and that after his death they continued cultivation with palay, string beans, eggplants, coconuts, mangoes and bananas and raised livestock, paying compensation as shown by a C. Adelia Rice Mill tally sheet entry naming Mrs. Teresa Reyes Vda. de Cruz with Kasama Isidro Cervante[s] and a March 31, 1992 handwritten receipt for Buwis sa Bakuran received by Kapt. Peping Villalon. Petitioner, for their part, maintained respondents and their father merely occupied about 300 square meters by tolerance, that while classified as sugar land for taxation no crops were planted thereon, that the rest was occupied by their niece Rosanna V. Silverio who trimmed the grass, that no rentals were regularly paid, and that respondents had been given opportunity to buy the occupied portion but failed to pay the agreed down payment. The Municipal Trial Court referred the matter to the Provincial Agrarian Reform Office, which certified the case agrarian, whereupon the Municipal Trial Court dismissed for lack of jurisdiction, a dismissal affirmed in turn by the Regional Trial Court and the Court of Appeals on the ground that the certification divested the court of jurisdiction.

• Constitutionality of Section 19 of Republic Act No. 9700 and OCA Circular No. 62-10: Petitioner argued that the Court of Appeals gravely erred in refusing to rule that Section 19 of Republic Act No. 9700 and OCA Circular No. 62-10 are unconstitutional and hence must be disregarded in resolving the case.
• Reliance on PARO Certification Without Hearing: Petitioner argued that the Court of Appeals gravely erred in affirming dismissal by merely relying on the PARO determination and certification that an agrarian dispute existed, without hearing and without affording petitioners their right to be heard.
• Absence of Tenancy – Jurisdiction as Unlawful Detainer: Petitioner maintained in Reply that the case is for unlawful detainer within Municipal Trial Court jurisdiction because, except for the agricultural character of the property, all other elements of tenancy relations are absent.

• Lack of Cause of Action and Proof of Ownership: Respondent countered that petitioners had no cause of action because they never produced proof of sole right to succeed to ownership of the subject property.
• Agrarian Tenancy and Exclusive DARAB Jurisdiction: Respondent argued that the Municipal Trial Court had no jurisdiction because the subject property is agricultural land and respondents are tenants thereof, having succeeded to the tenancy rights of their father Isidro who was tenant of spouses Cruz from 1965 to 2005.
• Cultivation and Payment of Compensation: Respondent maintained that tenancy was shown by long cultivation of camote, palay, mustasa, corn, tomato, fruit-bearing trees and later crops and livestock, and by compensation evidenced by the rice mill tally sheet identifying Isidro as Kasama and the 1992 handwritten receipt for Buwis sa Bakuran.

• Jurisdiction – Agrarian Dispute vs. Unlawful Detainer: Whether the Court of Appeals correctly affirmed dismissal of the complaint for unlawful detainer for lack of jurisdiction pursuant to the PARO certification that the action involves an agrarian dispute.

• Jurisdiction – Agrarian Dispute vs. Unlawful Detainer: No. Referral to the DAR was proper upon the twin requisites, but dismissal based solely on a certification devoid of factual findings and unsupported by substantial proof of tenancy was erroneous, leaving the ordinary ejectment case within Municipal Trial Court jurisdiction.

• Jurisdiction – Agrarian Dispute vs. Unlawful Detainer: Under Section 3(d) and Section 50 of Republic Act No. 6657, as amplified by Section 50-A added by Section 19 of Republic Act No. 9700, an agrarian dispute concerns tenurial arrangements over lands devoted to agriculture, and referral to the DAR is mandatory when (a) any party alleges the case is agrarian in nature and (b) one party is a farmer, farmworker, or tenant, as clarified in Chailese Development Co., Inc. vs. Dizon and reiterated in Dayrit vs. Norquillas. Mere allegation suffices for the first requisite, but adequate proof is required for the second; the proof required is any evidence which on its face tends to show such status, requiring only facial assessment to avoid protracted proceedings before the referring court. Here referral was supported by respondents' Answer and annexes asserting tenancy. The PARO certification, however, violated Department of Agrarian Reform Administrative Order No. 03-11, which requires summary investigation with notice, position papers, examination of testimonies and evidence, and a certification stating findings of fact; the October 28, 2016 certification merely declared the land agricultural and the cause ejectment of a farmer, farmworker or tenant, without factual bases. Referring courts, while bound to refer upon concurrence of requisites, are not bound to accept a recommendation that clearly violates prescribed procedure, and must independently assess it in light of evidence presented during summary investigation. Although factual findings of administrative bodies are generally accorded great respect if supported by substantial evidence under Section 54, they are disregarded where tainted by grave abuse of discretion or lack of evidentiary support. No agricultural tenancy was established because occupancy and cultivation, however long, do not ipso facto create de jure tenancy without independent concrete evidence of personal cultivation, sharing of harvests, transmission of the landowner's share, and landowner consent to tenancy; receipt of produce without an agreed sharing system does not create tenancy. The tally sheet naming Isidro as Kasama and the handwritten Buwis sa Bakuran receipt were held insufficient to show consent to share harvests. Absent an established tenancy relationship, no agrarian dispute cognizable by the Department of Agrarian Reform Adjudication Board existed, and the complaint remained an ordinary ejectment case remanded to the Municipal Trial Court.

• Agrarian dispute – definition — An agrarian dispute is any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers' associations or representation in negotiating or arranging terms of such tenurial arrangements. Applied to determine whether ejectment involved Department of Agrarian Reform jurisdiction rather than an ordinary unlawful detainer action.
• Exclusive DAR jurisdiction and mandatory referral – twin requisites — Under Section 50-A of Republic Act No. 6657 as amended by Republic Act No. 9700, the judge or prosecutor shall automatically refer to the DAR when (a) there is an allegation from any one or both parties that the case is agrarian in nature, and (b) one of the parties is a farmer, farmworker, or tenant. A mere allegation satisfies the first requisite, while adequate proof on its face is required for the second, requiring only facial assessment by a reasonable mind. Applied to sustain referral based on respondents' tenancy allegations and annexes but not to sustain dismissal.
• PARO determination procedure and certification — Upon referral, the Provincial Agrarian Reform Office through its Legal Division must conduct summary proceedings with notice, opportunity to present witnesses and documentary evidence, verified position papers, and comment of the Agrarian Reform Program Technologist, then issue within forty-eight hours from the report a certification stating findings of fact and whether the case is not proper for trial for lack of jurisdiction, not yet proper due to prejudicial question, or proper for trial as not agrarian. The existence of one or more enumerated circumstances, such as tenancy relationship, agricultural land, or ejectment of a farmer, farmworker or tenant, may justify an agrarian finding. Applied to invalidate the bare certification that omitted factual findings.
• Deference to administrative findings conditioned on substantial evidence — Findings of fact of administrative bodies with special expertise are accorded great weight and are final and conclusive if based on substantial evidence under Section 54, but courts will review and disregard them where made from erroneous estimation of evidence, without stated bases, or with misappreciation compelling a contrary conclusion amounting to grave abuse of discretion. Applied to reject deference to the PARO certification.
• Agricultural tenancy – consent and sharing required — Occupancy and cultivation of agricultural land, no matter how long, do not ipso facto make one a de jure tenant; independent and concrete evidence is necessary to prove personal cultivation, sharing of harvests or transmission of the landowner's share, and consent of the landowner, and mere receipt of produce without an agreed sharing system does not create tenancy. Applied to hold the tally sheet and handwritten receipt insufficient to prove Isidro was a tenant of spouses Cruz, following Pagarigan vs. Yague, Adriano vs. Tanco, and Rivera vs. Santiago.

• "While a simple allegation will suffice for the first requisite, adequate proof is necessary as to the second requisite." — States the controlling distinction between the twin requisites for mandatory referral under Section 50-A, central to sustaining referral but rejecting automatic divestiture of jurisdiction.
• "Verily, occupancy and cultivation of an agricultural land, no matter how long, will not ipso facto make one a de jure tenant." — Defines the canonical limit on inferring tenancy from possession and cultivation, requiring independent proof of consent and sharing.
• "The Certification shall state the findings of fact upon which the determination by the PARO was based." — States the mandatory content of the DAR certification under Administrative Order No. 03-11, whose omission rendered the certification defective.
• "If there is an allegation from any of the parties that the case is agrarian in nature and one of the parties is a farmer, farmworker, or tenant, the case shall be automatically referred by the judge or the prosecutor to the DAR which shall determine and certify within fifteen (15) days from referral whether an agrarian dispute exists" — Quotes the operative referral mandate of Section 50-A, grounding the distinction between referral and dismissal.

• Chailese Development Co., Inc. vs. Dizon, 826 Phil. 51 (2018) — Controlling precedent expounding Section 50-A's twin requisites for automatic referral and holding mere allegation insufficient for the farmer, farmworker or tenant status, retroactively applied as procedural.
• Dayrit vs. Norquillas, G.R. No. 201631, December 7, 2021 — Followed en banc guide clarifying Department of Agrarian Reform Adjudication Board jurisdiction, reiterating Chailese and holding possessory action within regular court jurisdiction absent evidence of tenancy.
• Rivera vs. Santiago, 457 Phil. 143 (2003) — Applied for the rule that receipt of land produce from a caretaker without an agreed sharing system does not create tenancy.
• Pagarigan vs. Yague, 758 Phil. 375, 380 (2015) — Applied for the requirement of independent concrete evidence of personal cultivation, sharing, or landowner consent before tenancy arises.
• Adriano vs. Tanco, 637 Phil. 218, 228-229 (2010) — Applied for the essential requisite that the agricultural tenant transmit the landowner's share of harvest.
• Cabral vs. Adolfo, 794 Phil. 161, 172 (2016) — Cited for the general rule according great weight to factual findings of administrative bodies absent erroneous estimation of evidence.
• Sps. Hipolito, Jr. vs. Cinco, 677 Phil. 331, 349 (2011) — Cited, with Villaflor vs. Court of Appeals, for deference based on special knowledge and expertise if supported by substantial evidence.
• Paredes vs. Feed the Children Philippines, Inc., 769 Phil. 418, 434 (2015) — Cited for the exception allowing courts to disregard administrative findings upon grave abuse of discretion.

• Section 3(d), Republic Act No. 6657 — Defines agrarian dispute as controversy relating to tenurial arrangements over lands devoted to agriculture; applied to frame whether unlawful detainer involved tenancy cognizable by the Department of Agrarian Reform.
• Section 50, Republic Act No. 6657, as amended by Section 19, Republic Act No. 9700 adding Section 50-A — Vests primary and exclusive Department of Agrarian Reform jurisdiction over agrarian reform matters and mandates automatic referral upon allegation of agrarian nature plus farmer, farmworker or tenant status, with judicial recourse by appeal to the proper Regional Trial Court or Court of Appeals; applied to sustain referral but require proof and proper certification before dismissal.
• Section 54, Republic Act No. 6657 — Makes Department of Agrarian Reform findings of fact final and conclusive only if based on substantial evidence; applied to require the referring court to independently determine jurisdiction where the recommendation lacked such support.
• OCA Circular No. 62-10 dated April 28, 2010 — Directs lower court judges to strictly observe referral of cases to the Department of Agrarian Reform when agrarian dispute is alleged; applied to justify the Municipal Trial Court's initial referral.
• DAR Administrative Order No. 03-11, as amended by AO No. 04-11, Sections 6, 7, 8, 9 — Prescribes summary investigation procedure, prima facie presumptions, facts tending to prove agrarian nature, and certification with findings of fact and recommendation whether proper, not yet proper, or not proper for trial; applied to invalidate the bare certification and dismissal.

Gesmundo, C.J., Hernando, Inting, Zalameda, M. Lopez, J. Lopez, Dimaampao, Marquez, and Kho, Jr., JJ., concur. Perlas-Bernabe, J., please see concurring opinion. Leonen, J., see separate concurring opinion. Caguioa, J., see concurring opinion. Lazaro-Javier, J., please see concurrence. Gaerlan, J., on official leave.