G.R. No. 118292; April 14, 2004
HENRY L. MON, petitioner, vs. COURT OF APPEALS, HON. LEOPOLDO SERRANO, JR., DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD and SPOUSES LARRY and JOVITA VELASCO, respondents.

FACTS

Petitioner Henry L. Mon filed an affidavit-complaint for ejectment against respondent spouses Larry and Jovita Velasco before the DARAB Regional Office. Mon alleged he was the owner-administrator of an agricultural land cultivated by the Velasco spouses. He sought their ejectment on grounds of subleasing the land to a third party and stealing a sack of palay from the harvest. The Velasco spouses denied the allegations and countered that Mon had imposed an illegal 50-50 sharing agreement, with them shouldering all production expenses. They sought a reliquidation of past harvests. The Regional Office ruled in favor of Mon, ordering ejectment based on a finding of subleasing, a violation of agrarian law.
The Velasco spouses appealed to the DARAB Central Office. The DARAB reversed the Regional Office’s order. It found that the parties’ relationship was governed by agrarian laws, which had long abolished share tenancy. The DARAB held that only a leasehold relationship was permissible, requiring payment of a fixed rental. It noted the records lacked sufficient data to compute this rental and remanded the case to the Provincial Adjudicator for reliquidation of harvests and determination of the legal lease rentals. Mon appealed to the Court of Appeals, which affirmed the DARAB decision in toto.

ISSUE

Whether the DARAB and the Court of Appeals correctly applied agrarian laws to the relationship between the parties, thereby nullifying the share tenancy agreement and remanding the case for determination of leasehold rentals.

RULING

The Supreme Court denied the petition and affirmed the assailed decisions. The Court held that the relationship between Mon and the Velasco spouses was unequivocally one of agricultural tenancy, not a civil law lease. The elements of agricultural tenancy were present: the parties are the landowner and tenant; the subject is agricultural land; consent exists; the purpose is agricultural production; and there is personal cultivation by the tenant. The imposition of a 50-50 sharing of the harvest confirmed this tenurial arrangement.
Consequently, agrarian laws, specifically Republic Act No. 3844, govern the relationship. The law expressly prohibits and declares share tenancy as contrary to public policy. Share tenancy had been abolished; the only permissible system is leasehold tenancy, where the tenant pays a fixed rental to the landowner. Therefore, the 50-50 sharing agreement was illegal and void. The proper remedy was not ejectment but the conversion of the relationship into a leasehold and the determination of the correct fixed rental. The DARAB correctly ordered the remand for reliquidation of harvests and computation of the legal lease rentals due, as the records lacked the necessary data for such a determination.