De la Paz vs. Court of Agrarian Relations

Section 14 of Republic Act No. 1199, allowing a tenant to change a share tenancy relation to leasehold tenancy, is constitutional; and in classifying ricelands under Section 46(a), the term “years” means agricultural years, not calendar years.

Lucila de la Paz owned a 3-½ hectare riceland in barrio Tagapo, Sta. Rosa, Laguna, which Marcos Papag worked as tenant under the share system. Republic Act No. 1199, as amended, supplies the statutory framework for the change of tenancy system and for the classification and rental of ricelands.

Marcos Papag was the tenant under the share system of a 3-½ hectare riceland in barrio Tagapo, Sta. Rosa, Laguna, owned by Lucila de la Paz. On February 16, 1962, Papag sent a letter to de la Paz informing her of his desire to change their tenancy relation to leasehold; de la Paz received the notice on February 19, 1962. De la Paz did not agree. Instead, on March 7, 1962, she filed a petition with the Court of Agrarian Relations, Fifth Regional District, Sta. Cruz, Laguna (CAR Case No. 856), praying that the CAR order and cause confrontation of the parties before it for “arbitration.” In his answer, Papag prayed that the petition be dismissed on the ground that it had been filed mainly to delay the change he sought.

While CAR Case No. 856 was pending, de la Paz filed on September 17, 1962 another case before the same court against Papag (CAR Case No. 1002), seeking to eject him on the ground that he had deliberately failed to deliver to her her share of the rice crop in the August 1962 harvest. At the joint hearing of the two cases on March 12, 1963, the parties entered into a partial stipulation of facts recognizing “that the only disputes between the parties are (1) the constitutionality of section 14 of Republic Act 1199 and (2) if said provision of law is held constitutional, then the rental that shall be determined by the Court based on the evidence to be submitted by the parties.”

The evidence showed that the 3-½ hectare landholding ordinarily yielded two crops a year: the palagad crop, produced from April to August, and the panahon crop, produced from September to January and sometimes extending to early February of the following year. The CAR classified the land as second class on the basis of its average production per hectare, computed according to the normal average harvest for the three preceding agricultural years.

• Constitutionality of Section 14: Petitioner raised anew the question of the constitutionality of Section 14 of Republic Act No. 1199, which the CAR had upheld.
• Computation of Land Classification: Petitioner contended that the CAR’s method of computation was erroneous because the latter part of Section 46(a) of Republic Act No. 1199 speaks of “years,” not “agricultural years”; if two crops are raised during a given calendar year, both should be taken together in computing the production for one year to serve as basis in determining the land’s productivity for classification under the law.

• Dismissal of the Landowner’s Petition: Respondent Marcos Papag countered, in his answer, that the petition should be dismissed because it had been filed mainly to delay the change sought by him.

• Constitutionality of Section 14: Whether Section 14 of Republic Act No. 1199, allowing a tenant to change the tenancy contract to leasehold tenancy and vice versa and from one crop-sharing arrangement to another share tenancy, is constitutional.
• Meaning of “Years” in Section 46(a): Whether the term “years” in Section 46(a) of Republic Act No. 1199 refers to calendar years or agricultural years in computing the normal average harvest for classifying ricelands.
• Separate Rentals for Palagad and Panahon Crops: Whether the CAR acted correctly in fixing separate rentals for the palagad and panahon crops instead of a single rental for both crops.

• Constitutionality of Section 14: Yes. Section 14 of Republic Act No. 1199 is constitutional; the SC held the question settled because the provision’s validity had been repeatedly upheld and recently reaffirmed.
• Meaning of “Years” in Section 46(a): Agricultural years. The term “years” in Section 46(a) means agricultural years, so the normal average harvest of the three preceding agricultural years is the basis for classification.
• Separate Rentals for Palagad and Panahon Crops: Yes. The CAR correctly fixed separate rentals for the palagad and panahon crops to avoid inequity, and the SC found no error in the actual computation.

• Constitutionality of Section 14: The SC treated the constitutional challenge as settled. It noted that the validity of Section 14 of Republic Act No. 1199 had been repeatedly upheld in many previous cases and had very recently been reaffirmed, so it did not elaborate further. On that basis, the SC sustained the CAR’s ruling upholding the provision.

• Meaning of “Years” in Section 46(a): The SC compared the classification rules for rice share tenancy and leasehold tenancy. Under Sections 32 and 33 of Republic Act No. 1199, ricelands in share tenancy are classified as first class if they yield an average of more than forty cavans per hectare and second class if they yield forty cavans or less, based on the normal average produce per hectare for the three agricultural years next preceding the current harvest. The SC saw no reason why leasehold classification should use a different basis. Although Section 46(a) uses “years” rather than “agricultural years,” the SC found this only injected vagueness and did not show a legislative intent to change the basis. The same provision refers to rentals computed on the average gross produce after deductions of seed and harvesting and threshing costs of the “past three normal harvests”; whether there are one or two harvests in a calendar year is immaterial because the average for three harvests is the basis. Thus, the CAR correctly classified the land as second class based on the yield for three previous agricultural years, without prejudice to future reclassification if yield increases.

• Separate Rentals for Palagad and Panahon Crops: The SC upheld the CAR’s method of fixing separate rentals for the palagad and panahon crops. The land produced two crops a year, with the panahon crop invariably much bigger than the palagad crop. The SC agreed that a single fixed rental would be disadvantageous to the tenant at the palagad harvest, when produce is normally lesser, and to the landowner at the panahon harvest, when produce is normally much bigger. The law requires an accounting at the end of each agricultural year within ten days after threshing in case of rice under Section 17 of Republic Act No. 1199. The SC therefore found the CAR acted correctly to avoid inequity and found no error in the actual computation of rent for each crop. The other points raised by petitioner would have merit only if the computation was erroneous.

• Validity of Section 14, Republic Act No. 1199 — Section 14 grants the tenant the right to change the tenancy contract to leasehold tenancy and vice versa and from one crop-sharing arrangement to another share tenancy; if the share tenancy contract is in writing and registered, the right may be exercised at the expiration of the contract, and in the absence of a written contract, at the end of the agricultural year; the change to leasehold is effective one agricultural year after the tenant serves notice. The SC upheld the provision as constitutional, treating its validity as settled by prior decisions.
• Classification of Ricelands under Republic Act No. 1199 — In rice share tenancy, ricelands are classified as first class if they yield more than forty cavans per hectare and second class if they yield forty cavans or less, computed on the normal average harvest of the three preceding agricultural years. The SC held that leasehold classification should use the same basis and that “years” in Section 46(a) means agricultural years, not calendar years; where two crops are raised in one calendar year, each crop is an agricultural year for purposes of the three-harvest average.
• Separate Rentals for Multiple Crops — Where the land produces two crops a year, the CAR may fix separate rentals for each crop to avoid inequity; a single rental would disadvantage the tenant at the lesser palagad harvest and the landowner at the bigger panahon harvest. The SC upheld separate rentals for the palagad and panahon crops.
• Future Reclassification and Adjustment — Classification as second class does not preclude future reclassification depending on increased yield, and the rentals are subject to the qualification that if the landholder introduces improvements increasing productivity, he may demand a proportionate increase in rental, with the court determining a reasonable increase in case of disagreement. The SC noted this in upholding the CAR’s rentals.

• “The question as to the constitutionality of section 14 of Republic Act No. 1199, pleaded anew by petitioner in this appeal, is a settled one. The validity of said provision has been repeatedly upheld by this Court in many previous cases and we do not consider it necessary to elaborate further on that matter.” — The SC disposes of the constitutional challenge by relying on settled jurisprudence.
• “We see no reason, and none has been advanced in this case, why the classification of ricelands under the leasehold system should be on a different basis.” — The SC aligns leasehold classification with the share-tenancy classification rules.
• “This time the consideration declared by law as rentals for the use of ricelands is computed on the basis of the past three normal harvests, without any qualification. Obviously, whether there be one or two harvests in one calendar year is immaterial: in either case the average for three harvests, after the corresponding deductions, is the basis for computing the rental.” — The SC explains why “years” in Section 46(a) is measured by harvests, not calendar years.
• “We belief the trial Court acted correctly to avoid any inequity that would result if a single rental had been fized for both kinds of crop.” — The SC upholds the CAR’s separate rentals for the palagad and panahon crops.

• De Ramas vs. CAR, L-19555, May 29, 1964 — Prior case upholding the validity of Section 14 of Republic Act No. 1199; cited by the SC as part of the settled line of cases.
• Macasaet vs. CAR, L-19750, July 17, 1964 — Prior case upholding the validity of Section 14 of Republic Act No. 1199.
• Uichangco vs. Gutierrez, L-20275-79, May 31, 1965 — Prior case upholding the validity of Section 14 of Republic Act No. 1199.
• Gamboa vs. Pallarca, L-20407, March 31, 1966 — Prior case upholding the validity of Section 14 of Republic Act No. 1199.
• Quizon vs. Ortiz, L-20905, April 30, 1966 — Prior case upholding the validity of Section 14 of Republic Act No. 1199.
• Ilusorio vs. CAR, L-20344, May 16, 1966 — Prior case upholding the validity of Section 14 of Republic Act No. 1199.
• Reyes vs. Santos, L-19961, September 14, 1966 — Prior case upholding the validity of Section 14 of Republic Act No. 1199.
• Del Rosario vs. De los Santos, L-20589-90, March 21, 1968 — Recent decision reaffirming the SC’s ruling upholding the validity of Section 14 of Republic Act No. 1199.

• Section 14, Republic Act No. 1199 — Grants the tenant the right to change the tenancy contract to leasehold tenancy and vice versa and from one crop-sharing arrangement to another share tenancy; if the share tenancy contract is in writing and registered, the right may be exercised at the expiration of the contract; in the absence of a written contract, at the end of the agricultural year; the change to leasehold is effective one agricultural year after the tenant serves notice. The SC upheld its constitutionality and applied it to sustain the tenant’s change to leasehold.
• Section 46(a), Republic Act No. 1199 — Classifies ricelands by productivity: first class if yield is more than forty cavans per hectare, second class if forty cavans or less, computed on the normal average harvest of the three preceding years; fixes rentals at not more than twenty-five per centum for first class lands and twenty per centum for second class lands of the average gross produce after deducting seed and harvesting and threshing costs of the past three normal harvests; includes a proviso on increase in rental for improvements. The SC applied it to interpret “years” as agricultural years and to uphold the second-class classification and rentals.
• Sections 32 and 33, Republic Act No. 1199 — In rice share tenancy, classification of ricelands into first or second class is based on the normal average produce per hectare for the three agricultural years next preceding the current harvest; first class yields more than forty cavans, second class yields less. The SC used these provisions to conclude that leasehold classification should be on the same basis.
• Section 17, Republic Act No. 1199 — Requires the landholder and tenant to effect an accounting at the end of each agricultural year, within ten days after threshing in case of rice. The SC cited it to support separate rentals for the palagad and panahon crops.