Garcia vs. Robles Vda. de Caparas

The Dead Man's Statute bars an assignor's affidavit or testimony recounting a deceased adverse party's alleged admission when offered against the deceased's surviving spouse or successor-in-interest, who cannot contradict or disprove it; absent other evidence, the claimed alternate farming agreement cannot establish co-lessee status or defeat the lawful successor-tenant's security of tenure under Republic Act No. 3844.

Flora Makapugay owned a 2.5-hectare farm in Barangay Lugam, Malolos, Bulacan, covered by Transfer Certificate of Title No. RT-65932 (T-25198), and Eugenio Caparas tilled it as agricultural lessee under a leasehold agreement. After Makapugay's death, her nephews and niece Amanda dela Paz-Perlas, Justo dela Paz, and Augusto dela Paz succeeded her, with Amanda acting as Makapugay's attorney-in-fact; after Eugenio's death, his children Modesta Garcia, Cristina Salamat, and Pedro Caparas survived him. The governing statute is Republic Act No. 3844, which provides for succession to the leasehold upon the lessee's death, security of tenure, modification of lease terms, and limitations on causes of action.

Flora Makapugay owned a 2.5-hectare farm in Barangay Lugam, Malolos, Bulacan, covered by Transfer Certificate of Title No. RT-65932 (T-25198), and Eugenio Caparas tilled it as agricultural lessee under a leasehold agreement. Makapugay died and was succeeded by her nephews and niece, Amanda dela Paz-Perlas, Justo dela Paz, and Augusto dela Paz. Before her death, Makapugay appointed Amanda as her attorney-in-fact. Eugenio's children were Modesta Garcia, Cristina Salamat, and Pedro Caparas. After Eugenio died, or in 1974, Amanda and Pedro entered into an agreement entitled "Kasunduan sa Buwisan," followed by an April 19, 1979 Agricultural Leasehold Contract covering the land. Under these agreements, Pedro was installed and recognized as the lone agricultural lessee and cultivator of the land. Pedro died in 1984, and his wife, respondent Dominga Robles Vda. de Caparas, took over as agricultural lessee.

On July 10, 1996, the landowners Amanda, Justo, and Augusto, on the one hand, and Pedro's sisters Garcia and Salamat on the other, entered into a "Kasunduan sa Buwisan ng Lupa" whereby Garcia and Salamat were acknowledged as Pedro's co-lessees. On October 24, 1996, petitioners Garcia and Salamat filed a Complaint for nullification of leasehold and restoration of rights as agricultural lessees against Pedro's heirs, represented by Dominga, before the PARAD of Bulacan, docketed as DARAB Case No. R-03-02-3520-96. In their Complaint, Garcia and Salamat claimed that when their father Eugenio died, they entered into an agreement with Pedro to alternately farm the land on a per-season basis; that Makapugay knew of this agreement; that after Makapugay died, Pedro reneged, cultivated the land alone, excluded them, and misrepresented to Amanda that he was Eugenio's sole heir; that Amanda was deceived into installing him as sole agricultural lessee in the 1979 contract; that when Amanda learned of the misrepresentation, she executed a July 10, 1996 Affidavit stating that Pedro had assured her he would not deprive Garcia and Salamat of their cultivatory rights; that to correct matters, the landowners executed the 1996 "Kasunduan sa Buwisan ng Lupa" recognizing petitioners as Pedro's co-lessees; that after Pedro died, Dominga took over the land and, despite demands, continued to deprive them of their rights; that settlement efforts failed and the Barangay Agrarian Reform Committee issued the proper certification; and that they suffered damages. Petitioners prayed that the 1979 Agricultural Leasehold Contract be nullified, that they be recognized as co-lessees and allowed to cultivate the land on an alternate basis, and that they be awarded ₱50,000.00 attorney's fees and costs.

In her Answer, Dominga claimed that when her father-in-law Eugenio died, only her husband Pedro succeeded and cultivated the land, and that petitioners never assisted him in farming. She claimed Pedro was the sole agricultural lessee; that Amanda's July 10, 1996 Affidavit and the 1996 "Kasunduan sa Buwisan ng Lupa" were self-serving and violated the existing 1979 Agricultural Leasehold Contract; and that under Section 38 of Republic Act No. 3844, petitioners' cause of action had prescribed. Dominga further claimed that Pedro had possessed the land even while Eugenio lived; that petitioners never cultivated or possessed the land even for a single cropping; that Pedro paid the lease rentals as evidenced by receipts; that when Pedro died in 1984, she succeeded to his rights as lessee by operation of law and had been remitting lease rentals to the landowners since 1985; and that petitioners had no right to institute themselves as her co-lessees. She prayed that the Complaint be dismissed, that the 1996 "Kasunduan sa Buwisan ng Lupa" be nullified, that a new leasehold agreement between her and the landowners be ordered, and that moral damages and litigation costs be awarded on her counterclaim.

Sometime after the execution of the July 10, 1996 "Kasunduan sa Buwisan ng Lupa" and during the pendency of DARAB Case No. R-03-02-3520-96, petitioners entered the land and began tilling it. Dominga then filed DARAB Case No. 03-03-10307-99 for maintenance of peaceful possession with injunctive relief against the landowners and petitioners. On petitioners' motion, that case was dismissed.

The PARAD and DARAB found that no alternate farming agreement existed between the parties; that Pedro merely shared his harvest with petitioners out of generosity, and Dominga stopped this practice after succeeding him; that petitioners never showed actual cultivation of the land or payment of lease rentals to the landowners; and that Amanda's 1996 Affidavit and "Kasunduan sa Buwisan ng Lupa" were belated and unjustified. The Court of Appeals likewise found that the 1974 and 1979 leasehold agreements designated Pedro as the sole agricultural lessee, and that petitioners admitted in their pleadings that they merely received a share from Pedro's harvests.

• Conversion and Loss of Security of Tenure: Petitioners argued that Dominga built three houses on the land for herself and two of her children without a homelot award from the Department of Agrarian Reform, thereby converting the farmhold into a housing-residential subdivision; by this self-conversion, she lost her security of tenure as agricultural lessee and became the party in estoppel.
• Zoning Ordinance and Tax Declaration: Petitioners maintained that Malolos Municipal Resolution No. 41-97, the zoning ordinance and development plan, and the tax declaration effectively converted the property into residential land; they invoked Section 220 of the Real Estate Tax Code and Article 217 of the Local Government Code of 1991 to affirm the trustworthiness of the tax declaration, confirmed by the City Zoning Director.
• Supervening Events and New Issues: Petitioners justified their change of theory and new factual issues as necessary consequences of supervening events occurring after the PARAD and DARAB Decisions and as necessary for a just resolution of the case.
• DAR Approval and Fait Accompli: Petitioners argued that although conversion requires prior approval by the Department of Agrarian Reform, the conversion had become a fait accompli, and the actual physical change in land use from agricultural to residential may occur after trial and during appeal, which the Court of Appeals may consider.
• Failure to Consider Evidence: Petitioners contended that the Court of Appeals committed fundamental error in not considering the tax declaration and zoning certification.

• Questions of Fact: Dominga argued that the Petition raises questions of fact, which are not proper subjects of a Petition under Rule 45 of the Rules of Court.
• New Issues and Change of Theory: She argued that petitioners raised anew issues that further changed the theory of their case, and these issues may not be raised for the first time at this stage of the proceedings.
• Sole Lessee and Prescription: In her Answer, Dominga claimed that Pedro was the sole agricultural lessee, that petitioners never assisted in farming or possessed the land for even a single cropping, and that petitioners' cause of action had prescribed under Section 38 of Republic Act No. 3844.
• Succession by Operation of Law: She claimed that upon Pedro's death in 1984, she succeeded to his rights as lessee by operation of law and had been remitting lease rentals to the landowners since 1985.
• Invalidity of 1996 Kasunduan: She maintained that Amanda's July 10, 1996 Affidavit and the 1996 "Kasunduan sa Buwisan ng Lupa" were self-serving and violated the existing 1979 Agricultural Leasehold Contract.

• Dead Man's Statute: Whether Amanda's affidavit recounting Pedro's alleged admission of an alternate farming agreement is admissible against Dominga, Pedro's surviving spouse and successor-in-interest, despite Pedro's death.
• Co-lessee Status: Whether petitioners established that they were Pedro's co-lessees under an alternate farming agreement, or whether they were merely recipients of his harvests.
• Laches/Prescription: Whether petitioners' action to nullify the 1979 Agricultural Leasehold Contract and be recognized as co-lessees was barred by laches or prescription under Section 38 of Republic Act No. 3844.
• Security of Tenure and 1996 Kasunduan: Whether the 1996 "Kasunduan sa Buwisan ng Lupa" could validly recognize petitioners as co-lessees without Dominga's consent and without terminating Pedro's subsisting leasehold, and whether Dominga is entitled to security of tenure as lawful successor-tenant.
• Reclassification/Conversion: Whether the alleged reclassification/conversion of the land to residential use, the zoning ordinance, the tax declaration, and Dominga's building of houses affect the leasehold rights and petitioners' claim.
• Procedural New Issues: Whether the Court of Appeals erred in refusing to consider new issues and factual questions raised for the first time on appeal or certiorari.

• Dead Man's Statute: No. Amanda's affidavit recounting Pedro's alleged admission is inadmissible under Rule 130, Section 23, because Pedro was deceased and Dominga, his successor-in-interest, could not contradict or disprove it.
• Co-lessee Status: No. Petitioners failed to prove the alleged alternate farming agreement or actual cultivation; the only supporting evidence was the inadmissible affidavit, and no written memorandum, rental receipts, or proof of cultivation was presented.
• Laches/Prescription: Barred. Petitioners waited 17 years after Pedro's installation as tenant and long after his death before challenging his leasehold, and they were thus precluded by laches from questioning the 1979 Agricultural Leasehold Contract.
• Security of Tenure and 1996 Kasunduan: No. The 1996 Kasunduan, grounded on inadmissible evidence and executed without Dominga's consent, infringed her rights as Pedro's successor-in-interest; Sections 7 and 16 of Republic Act No. 3844 protect her security of tenure.
• Reclassification/Conversion: No. The Court declined to delve into reclassification/conversion; it changes nothing between the landowners and Dominga and cannot benefit petitioners, who are not agricultural lessees; only the duly designated lessee is entitled to disturbance compensation.
• Procedural New Issues: No. The Court of Appeals correctly refused to decide new issues not raised before the PARAD or DARAB; the new issue changed petitioners' theory and could not be raised for the first time on appeal.

• Dead Man's Statute: The case rested solely on Amanda's July 10, 1996 Affidavit, in which she declared that Pedro had admitted an understanding with his sisters not to deprive them of cultivatory rights. Because Pedro was deceased, Amanda's declaration concerning the leasehold agreement affected the 1996 Kasunduan that she, as assignor, entered into with petitioners, and was offered against Dominga, Pedro's surviving spouse and lawful successor-in-interest. Under Rule 130, Section 23, a party or assignor cannot testify against a representative of a deceased person upon a claim against the estate as to matters occurring before the death. Admitting Amanda's declaration would give petitioners an undue advantage, as Dominga could not contradict or disprove Pedro's alleged admission. The Court cited Tan vs. Court of Appeals. Thus, the affidavit was inadmissible against Dominga.
• Co-lessee Status: No evidence other than the inadmissible verbal declaration proved the alternate farming agreement. No written memorandum existed, and petitioners did not show actual cultivation even for one cropping. No receipt or documentary evidence showed payment to the landowners of their share. The 1974 and 1979 leasehold agreements recognized Pedro as the lone agricultural lessee and cultivator. The lower courts found Pedro merely shared his harvest with petitioners out of generosity. Thus, co-lessee status was not established.
• Laches/Prescription: If petitioners believed they had a right under a mutual agreement with Pedro, they should have confronted Pedro or sought an audience with Amanda soon after their father Eugenio's death. Instead, they came forward only in 1996, 17 years after Pedro was installed as tenant in 1979 and long after his death in 1984. The PARAD correctly held that they slept on their rights and were precluded from questioning Pedro's 1979 agricultural leasehold contract. Amanda's duty under Section 9 of Republic Act No. 3844 to choose a successor within one month from Eugenio's death meant she was deemed to have chosen Pedro; petitioners should have informed the lessor of their alleged arrangement so they would not be left out.
• Security of Tenure and 1996 Kasunduan: Because the 1996 Kasunduan was grounded on Pedro's inadmissible verbal admission and was entered into without Dominga's consent, it constituted an undue infringement of Dominga's rights as Pedro's successor-in-interest under Section 9 of Republic Act No. 3844. It operated to deprive her of those rights and dispossess her of the leasehold against her will. Under Section 7, Dominga is entitled to security of tenure; under Section 16, any modification of the lease agreement must be with the consent of both parties and without prejudicing her security of tenure. Amanda could not claim she was deceived into believing Pedro was the sole successor, because as landowner's representative she was duty-bound to inquire into Eugenio's survivors and to exercise the choice under Section 9; ignorance of the law excuses no one under Article 3 of the Civil Code.
• Reclassification/Conversion: The Court declined to delve into reclassification/conversion. It reasoned that reclassification/conversion changes nothing as between the landowners and Dominga regarding their agreement, rights, and obligations. On the contrary, it could only have deleterious effects on petitioners' cause. Not being agricultural lessees, petitioners could not benefit; under Section 36(1) of Republic Act No. 3844, only the duly designated lessee—Dominga—is entitled to disturbance compensation in case of reclassification/conversion into residential, commercial, industrial, or other urban purposes. A valid reclassification would also erase petitioners' supposed leasehold rights and render them illegal occupants and sowers in bad faith.
• Procedural New Issues: The Court of Appeals held that the issue of cancellation of survey returns and plans was not part of petitioners' causes of action before the PARAD or DARAB and changed the theory of their case, which is not allowed. The Court of Appeals could not decide a question not placed in issue during the proceedings below. Even on the merits, the cancellation reverted the property to its original agricultural classification, which vindicated the leasehold agreements. The Supreme Court affirmed the denial of the petition.

• Dead Man's Statute (Rule 130, Section 23, Rules of Court) — If one party to an alleged transaction is precluded from testifying by death, insanity, or other mental disabilities, the other party is not entitled to the undue advantage of giving his own uncontradicted and unexplained account of the transaction. The Court applied this rule to bar Amanda's affidavit recounting Pedro's alleged admission, because Pedro was deceased and Dominga, his successor-in-interest, could not contradict or disprove it.
• Agricultural Leasehold Succession (Section 9, Republic Act No. 3844) — Upon death or permanent incapacity of the agricultural lessee, the leasehold continues between the lessor and the person who can cultivate personally, chosen by the lessor within one month from death from among (a) the surviving spouse, (b) the eldest direct descendant by consanguinity, or (c) the next eldest descendant or descendants in the order of their age; if the lessor fails to choose, priority follows that order. The Court held Amanda was deemed to have chosen Pedro as Eugenio's successor in 1979, and petitioners' failure to inform the lessor of their alleged alternate farming arrangement, plus their 17-year delay, precluded their claim.
• Security of Tenure (Section 7, Republic Act No. 3844) — The agricultural leasehold relation confers upon the lessee the right to continue working until the relation is extinguished, and the lessee cannot be ejected unless authorized by the Court for causes provided by law. The Court held Dominga, as Pedro's lawful successor-tenant, was entitled to security of tenure.
• Modification of Leasehold Contract (Section 16, Republic Act No. 3844) — Any modification of the terms and conditions of a leasehold contract must be made with the consent of both parties and must not prejudice the lessee's security of tenure. The 1996 Kasunduan, executed without Dominga's consent, was held to infringe her security of tenure.
• Laches — A party who sleeps on his rights for an unreasonable period is barred from asserting them. The Court held petitioners' 17-year delay in challenging Pedro's leasehold precluded them from questioning the 1979 Agricultural Leasehold Contract.
• Disturbance Compensation for Duly Designated Lessee (Section 36(1), Republic Act No. 3844) — Only the duly designated agricultural lessee is entitled to disturbance compensation in case of reclassification/conversion of the landholding into residential, commercial, industrial, or other urban purposes. The Court held petitioners, not being lessees, could not benefit from the alleged conversion.
• New Issues on Appeal — A party may not change the theory of the case or raise new issues for the first time on appeal. The Court of Appeals refused to consider the cancellation of survey returns and plans because it was not raised before the PARAD or DARAB, and the Supreme Court affirmed the denial of the petition.

• "Under the Dead Man's Statute Rule, "if one party to the alleged transaction is precluded from testifying by death, insanity, or other mental disabilities, the other party is not entitled to the undue advantage of giving his own uncontradicted and unexplained account of the transaction."" — This states the controlling evidentiary rule applied to exclude Amanda's affidavit.
• "Thus, since Pedro is deceased, and Amanda’s declaration which pertains to the leasehold agreement affects the 1996 'Kasunduan sa Buwisan ng Lupa' which she as assignor entered into with petitioners, and which is now the subject matter of the present case and claim against Pedro’s surviving spouse and lawful successor-in-interest Dominga, such declaration cannot be admitted and used against the latter, who is placed in an unfair situation by reason of her being unable to contradict or disprove such declaration as a result of her husband-declarant Pedro’s prior death." — This applies the Dead Man's Statute to the central evidence against Dominga.
• "With the above pronouncements, there is no other logical conclusion than that the 1996 'Kasunduan sa Buwisan ng Lupa' between Amanda and petitioners, which is grounded on Pedro’s inadmissible verbal admission, and which agreement was entered into without obtaining Dominga’s consent, constitutes an undue infringement of Dominga’s rights as Pedro’s successor-in-interest under Section 9, and operates to deprive her of such rights and dispossess her of the leasehold against her will." — This is the ratio on the invalidity of the 1996 Kasunduan and Dominga's security of tenure.
• "This Court shall not delve into the issue of re-classification or conversion of the land. Re-classification/conversion changes nothing as between the landowners and Dominga in regard to their agreement, rights and obligations." — This explains why the alleged conversion did not alter the leasehold rights.

• Tan vs. Court of Appeals, G.R. No. 125861, September 9, 1998, 295 SCRA 247, 258 — Cited by the Court as authority for the Dead Man's Statute Rule; the Court quoted the rule from this case to exclude Amanda's affidavit.

• Rule 130, Section 23, Rules of Court — The Dead Man's Statute disqualifies parties or assignors of parties from testifying against an executor, administrator, or other representative of a deceased person upon a claim or demand against the estate as to matters occurring before the death. The Court applied this to bar Amanda's affidavit recounting Pedro's alleged admission.
• Section 9, Republic Act No. 3844 — The agricultural leasehold relation is not extinguished by the death or permanent incapacity of the lessee; the lessor must choose a successor within one month from death from among the surviving spouse, eldest direct descendant, or next eldest descendants, with priority following that order if the lessor fails to choose. The Court held Amanda was deemed to have chosen Pedro as Eugenio's successor, and petitioners' failure to inform the lessor of their alleged arrangement precluded their claim.
• Section 7, Republic Act No. 3844 — The agricultural leasehold relation confers upon the lessee the right to continue working until the relation is extinguished, and the lessee cannot be ejected unless authorized by the Court. The Court held Dominga was entitled to security of tenure.
• Section 16, Republic Act No. 3844 — Any modification of the terms and conditions of a leasehold contract must be with the consent of both parties and must not prejudice the lessee's security of tenure. The 1996 Kasunduan, executed without Dominga's consent, was held to infringe her security of tenure.
• Section 38, Republic Act No. 3844 — An action to enforce any cause of action under the Code is barred if not commenced within three years after the cause accrued. This provision was invoked by Dominga and the PARAD; the Supreme Court affirmed the denial of the petition.
• Section 36(1), Republic Act No. 3844 — Only the duly designated lessee is entitled to disturbance compensation in case of reclassification/conversion of the landholding into residential, commercial, industrial, or other urban purposes. The Court held petitioners, not being lessees, could not benefit from the alleged conversion.
• Article 3, Civil Code — Ignorance of the law excuses no one from compliance therewith. The Court applied this to hold that Amanda could not claim ignorance of Section 9 of Republic Act No. 3844.

Antonio T. Carpio (Chairperson), Arturo D. Brion, Jose Portugal Perez, and Estela M. Perlas-Bernabe concurred. No separate concurring opinions are summarized in the text.