G.R. No. L-10578; March 25, 1958
FELIPE ATAYDE, petitioner, vs. HON. PASTOR DE GUZMAN, Judge, CAR, Second District, and LUPO BUENAVENTURA, respondents.

FACTS

Petitioner Felipe Atayde was a tenant of respondent landlord Lupo Buenaventura on a rice land in Nueva Ecija. On February 10, 1954, Atayde filed a petition in the Tenancy Division of the Court of Industrial Relations seeking: (1) a reliquidation of all past years of tenancy, alleging he shouldered all planting, cultivation, and harvesting expenses which were not deducted before the enforced 50-50 sharing; and (2) the execution of a 70-30 tenancy contract. Buenaventura countered that he shouldered those expenses, denied illegally enforcing a 50-50 share, asserted estoppel due to voluntary past liquidations, objected to the new contract, and by counterclaim sought Atayde’s dismissal as tenant for alleged subletting, neglect due to engagement in a rice milling business, gross misconduct, and underproduction. Pending trial, Atayde alleged he was dispossessed, which Buenaventura denied, claiming abandonment. The case was transferred to the Court of Agrarian Relations, which, on March 3, 1956, ordered: liquidation of only the 1953-1954 crop on a 60-40 sharing (60% to landlord) with harvesting expenses refunded to Atayde; denial of reliquidation for past years due to no fraud proved; termination of the tenancy due to Atayde’s breach of trust and voluntary abandonment; and payment by Atayde for a 30-cavan palay loan. Atayde’s motion for reconsideration was denied, prompting this certiorari review.

ISSUE

1. Whether the lower court erred in refusing to order a reliquidation of all crops prior to 1953-1954 solely on the ground that no fraud was proved.
2. Whether the lower court erred in its sharing ratio computation for the 1953-1954 crop.
3. Whether the lower court erred in its computation of deductible harvesting expenses.
4. Whether the lower court erred in terminating the tenancy relationship and denying reinstatement.
5. Whether the lower court erred in ordering Atayde to pay for the 30 cavans of palay received as a loan.

RULING

1. Yes, the lower court erred. The mere absence of fraud is no bar to reliquidation if the tenant did not receive the share entitled under the law. Based on the findings that Atayde furnished work animals, farm implements, performed cultivation, and shouldered harvesting expenses, while Buenaventura furnished the land and planting expenses, the correct sharing ratio under applicable law and jurisprudence (Alvarn vs. Pingol) is 55% for the tenant and 45% for the landlord after deducting harvesting expenses. Since Atayde received only 50% in past liquidations and was not reimbursed for harvesting expenses, a reliquidation is warranted. Prescription not having been pleaded, reliquidation shall commence from the agricultural year 1946-1947.
2. Yes, the lower court erred. Its 60-40 computation (40% to tenant: 5% work animals, 5% farm implements, 30% labor; 60% to landlord: 30% land, 30% planting and cultivation) was incorrect. Cultivation is a separate factor of production not included in the tenant’s ordinary labor. Since Atayde performed the cultivation work, the 30% share for “planting and cultivation” should be divided: 15% to landlord for planting expenses and 15% to tenant for cultivation. Thus, the correct sharing for 1953-1954 is: Landlord: 30% (land) + 15% (planting) = 45%. Tenant: 30% (labor) + 15% (cultivation) + 5% (work animals) + 5% (farm implements) = 55%.
3. The claim regarding harvesting expenses was not sustained. The Court found no reason to disturb the lower court’s factual finding on the amount of P97.00 as refundable harvesting expenses.
4. No, the lower court did not err. The termination of tenancy was based on findings of fact—breach of trust and voluntary abandonment/neglect due to Atayde’s personal attention to his ricemill business. These findings, being supported by substantial evidence as reflected in the decision’s summary of testimony, are binding and not subject to disturbance on review.
5. No, the lower court did not err. With the tenancy terminated after the 1953-1954 harvest, it was proper to order Atayde to account for and pay the loan of 30 cavans of palay received.
DISPOSITIVE MODIFICATION: The judgment is modified. The 1953-1954 crop shall be liquidated on a 55-45 sharing ratio (55% tenant, 45% landlord) after lawful deductions. A reliquidation of all previous crops on the same 55-45 ratio after deductions is ordered, commencing from the 1946-1947 agricultural year. In all other respects, the judgment is affirmed. No costs.