G.R. No. 105088 December 11, 1992
BIENVENIDO OCIER, petitioner, vs. THE COURT OF APPEALS and FELIPA SAJULGA, respondents.

FACTS

On May 2, 1986, private respondent Felipa Sajulga filed a complaint for ejectment and collection of rentals against petitioner Bienvenido Ocier. Sajulga alleged she was the absolute owner of a 7-hectare agricultural land in Bukidnon, of which 3 hectares were leased to Ocier since 1964 under a leasehold agreement with an annual rental of 22 cavans of palay per hectare. The complaint stated Ocier failed to pay full rentals from April 1982 to November 1985, incurring a delinquency of 3,992 kilos valued at P11,766.00, and that on December 14, 1985, Ocier sub-leased one hectare to Nicolas Juralan without Sajulga’s knowledge or consent.
In his Answer, Ocier admitted being a tenant of Sajulga since 1956, initially under a sharing arrangement and later under a leasehold system. He asserted affirmative defenses that the case arose from a leasehold or tenancy relationship designed to harass or eject him, and thus it must be referred first to the Ministry (now Department) of Agrarian Reform (DAR) for certification as to whether it is proper for trial, pursuant to P.D. 316 and its implementing rules.
On November 18, 1986, Ocier filed a motion to refer the case to the DAR. In opposition, Sajulga invoked P.D. 816. Subsequently, on March 16, 1987, Sajulga filed a motion for leave to amend her complaint, attaching an Amended Complaint which sought rescission of the contract based on the New Civil Code, rather than the Code of Agrarian Reforms. The trial court granted the motion and admitted the Amended Complaint. Ocier filed an Amended Answer reiterating his affirmative defense that the case should first be referred to the DAR pursuant to P.D. Nos. 316 and 946.
After trial, the trial court applied Article 1659 of the New Civil Code, ruling that Ocier violated the lease contract by sub-leasing without consent. It ordered the rescission of the leasehold relationship, for Ocier to vacate the property, and to pay rental arrears of P8,000.00, attorney’s fees, and litigation expenses.
On appeal, the Court of Appeals affirmed the trial court’s decision but based its ruling on agrarian laws. It held that an agricultural tenancy existed, governed by agrarian laws, and that referral to the DAR was unnecessary because the tenancy relationship was admitted in the pleadings. It further found that Ocier’s failure to pay rentals and his act of sub-leasing were grounds for ejectment under agrarian laws.

ISSUE

1. Whether the Regional Trial Court acquired jurisdiction over the case without first referring it to the Department of Agrarian Reform for preliminary determination.
2. Whether the Court of Appeals correctly applied P.D. 816 in ordering the ejectment of the tenant-farmer for failure to pay rentals.
3. Whether the Court of Appeals applied the proper evidentiary rules to the case.

RULING

The Supreme Court granted the petition and set aside the decisions of the lower courts. The case was ordered to be referred to the Department of Agrarian Reform for a preliminary determination of the relationship between the parties.
1. On the issue of jurisdiction and referral to the DAR: The Supreme Court held that referral to the Secretary of Agrarian Reform is mandatory under P.D. 316 for ejectment cases involving tenants on lands primarily devoted to rice and corn. This requirement is not dispensed with even if the tenancy relationship is admitted, because the DAR’s certification is a condition precedent for the court to acquire jurisdiction. The trial court erred in not referring the case to the DAR upon Ocier’s motion. The fact that Sajulga amended her complaint to base her cause of action on the Civil Code did not divest the DAR of its authority, as the allegations in the pleadings and the evidence presented indicated a tenancy relationship involving agricultural land.
2. On the application of P.D. 816 and evidentiary rules: Given the disposition on the jurisdictional issue, the Supreme Court found it unnecessary to rule definitively on these points. However, it noted the conflicting factual claims requiring DAR’s expertise: Ocier claimed non-payment was due to tungro and rat infestation (force majeure), while Sajulga claimed deliberate refusal. Furthermore, a critical preliminary issue was the true ownership of the land. Evidence presented by Ocier, including testimony from a DAR Agrarian Reform Technologist and a “Summary List of Rice and Corn Land,” suggested the land might still be patrimonial property of the State (under the Bukidnon Agricultural College/National Government) and subject to agrarian reform, rather than privately owned by Sajulga. This issue of ownership directly impacts the existence of a tenancy relationship, as tenancy requires a landowner-tenant relationship. The DAR is the proper agency to make this preliminary determination.
Thus, the Supreme Court remanded the case to the DAR for a preliminary determination of the relationship between the parties and for certification as to whether the case is proper for trial in court, in accordance with P.D. 316.