Ferrer vs. Carganillo

An agricultural lessee who subleases his landholding in violation of Section 27(2) of Republic Act No. 3844 may be dispossessed under Section 36(7) of the same Code; the agricultural lessor bears the burden of proving the ground for ejectment by the requisite quantum of evidence, and in agrarian proceedings the DARAB Rules of Procedure explicitly bar even the suppletory application of the Rules of Court, thereby relieving litigants from the strict requirement of formal offer of evidence.

Felisa R. Ferrer was the registered owner or co-owner of several parcels of agricultural land in the municipality of Tayug, Pangasinan. The landholdings were cultivated by tenants under the agricultural leasehold system pursuant to Republic Act No. 3844 (Agricultural Land Reform Code). In October 1997, Ferrer filed four separate complaints for ejectment and damages before the Provincial Agrarian Reform Adjudicator (PARAD), alleging: (a) that tenant Domingo Carganillo subleased his 6,000-square meter landholding to his brother Sergio Carganillo; (b) that the late tenant Isabelo Ramirez subleased his 4,667-square meter landholding to Soledad Agustin; (c) that tenant Pedro Solis, and after his death his widow Marcelina Solis, failed to pay lease rentals for crop years 1995-1997 on a 14,000-square meter landholding owned by Ferrer’s principals; and (d) that Marcelina Solis failed to deliver the landowners’ share of the produce from a third cropping on a 6,830.5-square meter landholding co-owned by Ferrer and Irene Aguinaldo. The cases were consolidated and jointly heard.

• DARAB Case No. 7862 – Carganillo Sublease: Ferrer owned a 6,000-square meter agricultural land under Tax Declaration No. 42-06462 cultivated by tenant Domingo Carganillo. Ferrer alleged that without her knowledge and consent, Domingo subleased the landholding to his brother Sergio Carganillo for ₱15,000.00 and that Sergio was in actual possession and cultivation. The Municipal Agrarian Reform Office (MARO) Legal Officer Dionisio Estimada conducted an investigation and reported that Domingo admitted the sublease because he was applying for work abroad; Estimada recommended ejectment. An affidavit of Angela Clarion corroborated the mortgage/sublease. Domingo denied subleasing and claimed he remained in possession, with Sergio merely helping as a family member. Respondents submitted affidavits of an adjoining tenant, the BARC chairman, and a barangay kagawad stating Domingo had not violated agrarian laws. The PARAD dismissed the complaint for lack of clear and convincing evidence, finding the investigation report not conclusive. On appeal, the DARAB affirmed, initially excluding a document titled Katulagan (Agreement), which showed Domingo borrowed ₱15,000.00 from Sergio, on the ground that it was not formally offered. The CA treated the Katulagan as a mere promissory note proving indebtedness, not a mortgage.

• DARAB Case No. 7863 – Soledad Agustin Sublease: Ferrer owned a 4,667-square meter landholding covered by TCT No. T-51201. The instituted lessee was the late Isabelo Ramirez. Ferrer alleged that, during his lifetime, Isabelo subleased the landholding to Soledad Agustin without her consent. The MARO investigation report stated that the lawful tenant was Isabelo, not Soledad, but made no finding of sublease. An affidavit of Gelacio Gano asserted that Isabelo mortgaged his tenancy rights to Soledad and that Soledad was currently cultivating the land. Respondents presented evidence that upon Isabelo’s death, the leasehold passed to his widow Marina O. Ramirez, who executed a renewed leasehold contract dated May 30, 1997; Soledad was not a tenant but merely the sister-in-law of the widow. The BARC chairman, an adjoining landowner, and a barangay kagawad attested that Soledad never became a tenant or cultivator of the holding. The PARAD dismissed the complaint; the DARAB and the CA affirmed.

• DARAB Case No. 7864 – Marcelina Solis (Non-Payment 1995-1997): Ferrer represented landowners Rosa Pajarito, Elvira Madolora and Anastacia Lagado as to a 14,000-square meter landholding tenanted by Pedro Solis. After Pedro died in June 1997, his widow Marcelina Solis took over cultivation without the landowners’ consent. Ferrer further alleged that Pedro failed to pay lease rentals for three consecutive agricultural years (1995-1997). Marcelina denied the arrears and presented receipts dated from 1995 to 1997 signed by the landowners’ administrator Irene Aguinaldo, showing that the landowners’ share had been received. The PARAD dismissed the complaint for lack of proof of non-payment; the DARAB and CA affirmed.

• DARAB Case No. 7865 – Marcelina Solis (Third Cropping): Ferrer and Irene Aguinaldo co-owned a 6,830.5-square meter landholding tenanted by Marcelina. Ferrer claimed that the land was principally devoted to palay three times a year, but Marcelina failed to deliver the landowners’ share for the third cropping. Marcelina admitted the tenancy but asserted that a third cropping was irregular and that whenever a third crop was planted, the landowners’ share was given. She submitted receipts, notices of reaping and threshing for regular crops, and a BARC certification that the 1997 first crop share was deposited in the bank after the administrator refused to receive it. The PARAD dismissed, finding the allegations unsubstantiated; the DARAB and CA affirmed.

• Subleasing by Domingo Carganillo: Petitioner maintained that Domingo subleased or mortgaged his tenancy rights to Sergio for ₱15,000.00, a clear violation of the prohibition in Section 27(2) of RA 3844; that Sergio, not being an immediate family member, could not be considered merely helping; and that the sublease constituted abandonment. She argued that the MARO investigation report, the Katulagan, and the affidavits established subtenancy by more than substantial evidence.

• Admissibility of the Katulagan: Petitioner contended that the DARAB erred in applying the Rules of Court’s formal offer requirement to exclude the Katulagan, because the DARAB Rules of Procedure expressly provide that technical rules of evidence do not apply even in a suppletory character.

• Ejectment of Soledad Agustin: Petitioner asserted that the late tenant Isabelo Ramirez subleased the landholding to Soledad Agustin without the landowner’s consent, warranting ejectment. She further faulted the DARAB for not resolving the issue of non-payment of lease rentals.

• Non-payment of lease rentals by Marcelina Solis: Petitioner claimed that Pedro Solis and his widow Marcelina failed to pay lease rentals for the crop years 1995-1997, and that Marcelina did not deliver the share for the third cropping on the co-owned landholding. She alleged the DARAB and CA failed to properly consider the evidence of non-payment.

• Defective decision and consolidation: Petitioner argued that the DARAB decision dated January 27, 2004 disposed only of the Carganillo case and failed to address the other three cases, that no consolidation order was issued, and that the CA “practically closed its eyes” in affirming without distinctly stating the facts and law for each case, in violation of Article VIII, Section 14 of the Constitution.

• No subleasing (Domingo Carganillo): Respondent Domingo Carganillo denied subleasing or mortgaging his tenancy rights; he claimed that Sergio merely helped him cultivate the land as an immediate family member, which does not constitute a prohibited sublease. The Katulagan was characterized as a simple promissory note evidencing a loan, not a mortgage of possessory rights. He maintained full compliance with his leasehold obligations.

• Soledad Agustin is not a sublessee: Respondents Soledad Agustin and the Ramirez widow countered that the true tenant after Isabelo’s death was his surviving spouse Marina Ramirez, as evidenced by a renewed leasehold contract, and that Soledad was never in possession as a sublessee. They argued that the MARO report and Gano’s affidavit were insufficient to prove sublease.

• Full payment of lease rentals (Marcelina Solis): Respondent Marcelina Solis denied any arrears and presented receipts, notices, and bank deposit records demonstrating that the landowners’ administrator Irene Aguinaldo received the produce shares for the contested crop years. She argued that the third cropping was irregular and that whenever it occurred, the landowners received their due share; no leasehold provision guaranteed a regular third crop.

• Admissibility of the Katulagan: Whether the DARAB erred in excluding the Katulagan on the ground that it was not formally offered, in light of the DARAB Rules of Procedure’s exemption from the technical rules of evidence.

• Subleasing by Domingo Carganillo: Whether petitioner proved by clear and convincing evidence that Domingo Carganillo subleased or mortgaged his landholding to Sergio Carganillo, thereby justifying their dispossession under Section 36(7) in relation to Section 27(2) of RA 3844.

• Admission of new evidence in the Soledad Agustin case: Whether the new evidence attached to petitioner’s Supplemental Motion for Reconsideration with Manifestation to the DARAB could be admitted, given the limited grounds for reconsideration under the DARAB Rules.

• Subleasing to Soledad Agustin: Whether petitioner established that the late Isabelo Ramirez subleased his landholding to Soledad Agustin, warranting ejectment.

• Proper party-appellant in DARAB Case No. 7864: Whether the appeal should be dismissed for failure to name the actual landowners—Rosa Pajarito, Elvira Madolora and Anastacia Lagado—as the appealing parties, as required by Section 4 in relation to Section 5 of Rule 45.

• Non-payment of lease rentals for 1995-1997: Whether petitioner proved that Pedro Solis/Marcelina Solis failed to pay the lease rentals for the crop years 1995 to 1997 on the 14,000-square meter landholding.

• Third cropping obligation: Whether petitioner proved that the leasehold agreement for the co-owned 6,830.5-square meter landholding included an obligation to deliver a share from a third cropping, and that Marcelina Solis breached that obligation.

• Sufficiency of the CA and DARAB decisions / Validity of consolidation: Whether the appellate decisions failed to dispose of all four cases and to state distinctly the facts and law, and whether the consolidation of the cases was invalid.

• Admissibility of the Katulagan: The DARAB erred in excluding the Katulagan for lack of formal offer. The DARAB Rules of Procedure explicitly provide that the Board and its adjudicators are not bound by the technical rules of evidence in the Rules of Court and that the Rules of Court shall not apply even in a suppletory manner. The fundamental rule on formal offer under Rule 132 of the Rules of Court thus finds no application in this agrarian case, and the DARAB’s reliance on People v. Mongado was misplaced.

• Subleasing by Domingo Carganillo: Petitioner discharged her burden of proving subleasing by clear and convincing evidence. The confluence of evidence—the MARO investigation report recording Domingo’s admission of sublease, petitioner’s personal discovery of Sergio’s cultivation, the Katulagan evidencing a ₱15,000.00 indebtedness, and the corroborating affidavit of Angela Clarion—established that Domingo subleased his landholding to Sergio. Silence in the face of accusations was construed as an implied admission. The prohibition against employing a sub-lessee under Section 27(2) of RA 3844 was violated, and Section 36(7) expressly authorizes dispossession on that ground. The attestations of the BARC chairman and barangay kagawad that respondents had not violated agrarian laws were mere conclusions of law and did not suffice. Domingo and Sergio were ordered dispossessed.

• Admission of new evidence in the Soledad Agustin case: The new pieces of evidence attached to the Supplemental Motion for Reconsideration could not be admitted. Section 12, Rule VIII of the 1994 DARAB New Rules of Procedure limits the grounds for a motion for reconsideration to (a) findings of fact not supported by substantial evidence, or (b) conclusions against law and jurisprudence; the reception of new evidence falls outside the office of a motion for reconsideration.

• Subleasing to Soledad Agustin: Petitioner failed to establish the claim of sublease. The MARO investigation report merely stated that the lawful tenant was Isabelo Ramirez, not that a sublease occurred. The affidavit of Gano, while asserting mortgage of tenancy rights, was uncorroborated and unsubstantial. As the agricultural lessor, petitioner bore the burden of proving a lawful cause for ejectment under Section 37 of RA 3844, and she did not discharge it. The dismissal of the complaint was affirmed.

• Proper party-appellant in DARAB Case No. 7864: The appeal must be dismissed. Section 4 of Rule 45 requires the petition to state the full name of the appealing party as petitioner; Section 5 makes non-compliance a ground for dismissal. The records showed that the owners of the 14,000-square meter landholding were Rosa Pajarito, Elvira Madolora and Anastacia Lagado, and Ferrer was only their representative. By naming only herself as petitioner, Ferrer failed to comply with the rule. This failure, however, did not affect the other three cases where she was the owner or co-owner.

• Non-payment of lease rentals for 1995-1997: Even disregarding the procedural lapse, petitioner did not prove non-payment. Respondent Marcelina Solis presented receipts from 1995 to 1997 signed by the landowners’ administrator Irene Aguinaldo, showing that the landowners’ share had been received for those crop years. The PARAD’s finding that the complainants failed to produce substantial proof of non-payment was thus correct.

• Third cropping obligation: Petitioner failed to establish her claim. Aside from bare allegations, no evidence was presented to prove that the subject landholding could regularly support a third cropping, or that the leasehold agreement included a provision on third cropping. Respondent Marcelina rebutted the claim with receipts and notices showing regular compliance with rent obligations. The inconsistency between petitioner’s complaint (alleging non-delivery only of the third crop share) and the Estimada investigation report (stating Marcelina gave no rentals at all to Ferrer) further weakened the claim. The dismissal was affirmed.

• Sufficiency of the CA and DARAB decisions / Validity of consolidation: The CA decision detailed the evidence and applied the substantial evidence rule, satisfying the constitutional requirement of expressing the facts and law. The PARAD decisions likewise distinctly stated the facts and law. Regarding consolidation, petitioner herself filed a single consolidated appeal memorandum, motion for reconsideration, and subsequent pleadings treating all four cases as consolidated. By her own acts, she was estopped from assailing the consolidation.

• Prohibition against subleasing by an agricultural lessee — Section 27(2) of Republic Act No. 3844 makes it unlawful for an agricultural lessee to employ a sub-lessee on his landholding, except in case of illness or temporary incapacity. Violation constitutes a ground for dispossession under Section 36(7). The prohibition is rooted in the social function of property and the policy against creating new estates dependent on the original leasehold without the landowner’s consent. In this case, Domingo Carganillo’s sublease of his landholding to his brother triggered the right to dispossess both.

• Burden of proof in agricultural ejectment — Section 37 of RA 3844 places the burden of proving a lawful cause for ejectment on the agricultural lessor. The lessor must present clear and convincing evidence; bare allegations and uncorroborated affidavits are insufficient. Here, the burden was satisfied in the Carganillo case but not against Soledad Agustin or Marcelina Solis.

• Inapplicability of technical rules of evidence in DARAB proceedings — Under Sections 2 and 3 of the 1994 DARAB Rules of Procedure, the agrarian adjudicators are not bound by the technical rules of procedure and evidence in the Rules of Court, and the Rules of Court do not apply even in a suppletory character. The rule on formal offer of evidence under Rule 132 of the Rules of Court therefore does not govern agrarian cases. The DARAB’s exclusion of the Katulagan on that ground was erroneous.

• Limits of a motion for reconsideration under the DARAB Rules — A motion for reconsideration under the DARAB Rules may be based only on the grounds that the factual findings are unsupported by substantial evidence or that the conclusions are contrary to law and jurisprudence. It is not a vehicle for introducing new evidence. Petitioner’s attachment of new affidavits and a survey plan to a supplemental motion for reconsideration was impermissible.

• Estoppel by consolidation — A party who repeatedly consolidates multiple cases in her pleadings and invokes the jurisdiction of the courts and quasi-judicial agencies on that basis is estopped from later challenging the consolidation. Petitioner’s own consolidated appeal memorandum and subsequent filings estopped her from claiming the consolidation was invalid.

• Substantial evidence standard in agrarian appeals — The Supreme Court’s review of DARAB and CA decisions in agrarian cases is limited to determining whether the DARAB’s findings of fact are supported by substantial evidence—that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion.

• “The concept of social function of private property which today is presented as one of the possible justifications for agrarian and urban land reform has its roots in the cosmogenic and philosophical concept which maintains that man must answer to the Creator for the use of the resources entrusted to him. … Hence, the use, enjoyment, occupation or disposition of private property is not absolute. It is predicated on the social functions of property.”

• “The DARAB Rules of Procedures explicitly provides that the Agrarian Reform Adjudicators are not bound by technical rules of procedure and evidence in the Rules of Court nor shall the latter apply even in a suppletory manner.”

• “Sub-leasing … creates a new estate dependent upon, out of, and distinct from, the original leasehold. However, this is not true in the case at bar. Granting that Sergio Carganillo is working on the land tenanted by respondent-appellee, such is not in the nature of being a sub-lessee, but is merely helping his brother as an immediate member of the family to cultivate the land.” (The DARAB’s initial view, later rejected by the Supreme Court upon reevaluation of the evidence.)

• Santiago v. Rodrigo, CA-G.R. No. 33651-R, June 3, 1965 — Defined a sub-tenant or sub-lessee as "a person who rents all, or a portion of the leased premises, from the lessor for a term less than the original one, leaving a reversionary interest in the first lessee," and was used by the DARAB to distinguish permissible family help from prohibited subleasing.

• People v. Mongado, 138 Phil. 699 (1969) — Established the rule that a court shall consider no evidence not formally offered. The DARAB’s reliance on this case was held misplaced because the rule on formal offer applies only in judicial proceedings and is expressly excluded in agrarian adjudication.

• Reyes v. Reyes, 388 SCRA 471 — Emphasized that in appeals of agrarian cases, the Supreme Court cannot substitute its own factual findings for those of the DARAB but only determines whether the DARAB’s findings are supported by substantial evidence.

• Resngit-Marquez v. Llamas, Jr., 385 SCRA 6 — Defined substantial evidence as that amount of relevant evidence that a reasonable mind might accept as adequate to support a conclusion, applied in reviewing the agrarian tribunals’ factual determinations.

• Republic Act No. 3844 (Agricultural Land Reform Code), Section 27(2) — Makes it unlawful for an agricultural lessee to employ a sub-lessee on his landholding, except in cases of illness or temporary incapacity. Applied to declare Domingo Carganillo’s sublease to Sergio a prohibited act.

• RA 3844, Section 36(7) — Authorizes the dispossession of an agricultural lessee who employs a sub-lessee in violation of Section 27(2). The basis for ordering the dispossession of Domingo and Sergio Carganillo.

• RA 3844, Section 37 — Places on the agricultural lessor the burden of proving the existence of a lawful cause for ejectment. Applied in all cases to require petitioner to establish the grounds for ejectment.

• RA 3844, Section 4 — Abolished agricultural share tenancy and provided for compulsory conversion into leasehold system. Cited as context for the leasehold relationship between parties.

• DARAB Rules of Procedure (1994), Sections 2 and 3 — Prescribe liberal construction of the rules to promote just, expeditious and inexpensive adjudication, and explicitly state that the adjudicators are not bound by technical rules of procedure and evidence, and that the Rules of Court shall not apply even in a suppletory character. Justified the admission of the Katulagan.

• DARAB Rules of Procedure, Rule VIII, Section 12 — Limits a motion for reconsideration to the grounds of unsupported factual findings or conclusions contrary to law/jurisprudence; excludes reception of new evidence. Basis for ruling the new evidence in the Soledad Agustin case inadmissible.

• Rules of Court, Rule 45, Sections 4 and 5 — Require the petition to state the full name of the appealing party and authorize dismissal for non-compliance. Applied to dismiss the appeal in DARAB Case No. 7864 due to failure to name the actual landowners.

• Rules of Court, Rule 132, Section 34 — Provides that a court shall consider no evidence not formally offered. Held inapplicable to agrarian proceedings.

Antonio T. Carpio (Chairperson), Arturo D. Brion, Roberto A. Abad, Jose Portugal Perez