G.R. No. L-21550; April 27, 1967
ALFREDO DIAZ, petitioner-appellant, vs. LUIS MOLINA, NARCISO MADERIA and The Honorable JOSE M. SANTOS, Presiding Judge of the Court of Agrarian Relations, Second Regional District, Cabanatuan City, respondents-appellees.

FACTS

Prior to the agricultural year 1961-1962, petitioner-appellant Alfredo Diaz (landholder) and respondents-appellees Luis Molina and Narciso Maderia (tenants) had a share tenancy relationship over separate rice lands. The landholder contributed expenses for transplanting, while the tenants contributed labor, work animals, farm implements, and expenses for final harrowing, with a 50-50 sharing of the net produce. Before March 20, 1961, the tenants notified the landholder of their desire to change the tenancy system from share tenancy to leasehold, effective the agricultural year 1961-1962. The landholder refused. Consequently, the tenants filed petitions (CAR Cases Nos. 2453-NE-61 and 2456-NE-61) before the Court of Agrarian Relations (CAR) for approval of the change and fixation of lease rentals. The landholder, insisting on share tenancy, deposited in court the amount for transplanting expenses (CAR Case No. 2764-NE-61). Later, the landholder also filed an ejectment case (CAR Case No. 2834-NE-61) against tenant Molina, alleging pre-threshing and negligence. The four cases were consolidated. The CAR rendered a decision declaring the tenancy relationship converted to leasehold effective 1961-1962, fixing rentals, ordering refunds to the tenants, dismissing the landholder’s consignation and ejectment petitions, and releasing certain harvest proceeds to the tenants. The landholder’s motion for reconsideration was denied.

ISSUE

Whether Section 14 of Republic Act No. 1199 (Agricultural Tenancy Act of 1954), which grants a tenant the right to change the tenancy contract from share tenancy to leasehold tenancy, is constitutional.

RULING

Yes, Section 14 of Republic Act No. 1199 is constitutional. The Supreme Court affirmed the decision of the Court of Agrarian Relations. The enactment of said provision is a valid exercise of the police power of the State, promulgated pursuant to the social justice precept of the Constitution to promote the common weal. It does not impair the obligation of contracts. The right granted to the tenant to change the contract is not unreasonable or oppressive, as it ultimately benefits the landlord by making the tenant more responsible and competent, improves the lot of a large population segment, and gives full meaning to the constitutional directive on social justice. The constitutionality of this provision had been previously upheld in De Ramas vs. The Court of Agrarian Relations (G.R. No. L-19555, May 29, 1964) and other subsequent decisions. The landholder’s petition was dismissed, and the CAR decision was affirmed.