G.R. No. 151342 ; June 23, 2005
CELSO VERDE, petitioner, vs. VICTOR E. MACAPAGAL, et al., respondents.

FACTS

Respondents, as co-owners of an agricultural land, filed an ejectment case against petitioner Celso Verde, their leasehold tenant, before the Provincial Agrarian Reform Adjudicator (PARAD). They alleged that in 1993, without their knowledge, petitioner mortgaged the landholding to Aurelio dela Cruz, who then cultivated half of the property. Petitioner allegedly admitted this, promised to redeem the land and pay rentals, but failed, as dela Cruz still farmed the land in 1994. Respondents contended this act constituted abandonment under Section 8 of Republic Act No. 3844 . Petitioner denied abandonment, claiming he merely hired dela Cruz and his carabao for lack of a work animal, and that he continuously cultivated the land.
The PARAD dismissed the complaint, finding no intentional abandonment, as petitioner intended to cultivate the other half. The Department of Agrarian Reform Adjudication Board (DARAB) affirmed. The Court of Appeals reversed, ruling petitioner violated Section 24 of Republic Act No. 1199 by employing a subtenant not belonging to his immediate farm household, which warranted ejectment.

ISSUE

Whether the act of the tenant in mortgaging the landholding or employing a subtenant constitutes a ground for ejectment under agrarian laws.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the DARAB decision, ruling petitioner’s actions did not warrant ejectment. The legal logic is twofold. First, on abandonment, the Court held that abandonment requires a clear, absolute, and intentional relinquishment of the tenancy rights. The evidence showed petitioner only mortgaged half the land and intended to cultivate the remainder, negating the requisite intent to abandon. Mere temporary non-cultivation or financial arrangements like a mortgage, absent a clear intent to surrender possession permanently, does not constitute abandonment.
Second, on the alleged illegal employment of a subtenant, the Court distinguished between a prohibited sublease and permissible hiring of labor. Under the Agricultural Leasehold Reform Code ( R.A. No. 3844 ), a leasehold tenant has the right to employ farm workers. The prohibition in the Agricultural Tenancy Act ( R.A. No. 1199 ) against employing a subtenant applies specifically to share tenancy, not to leasehold tenancy as in this case. Petitioner’s hiring of dela Cruz and his carabao was an exercise of his managerial right as a leaseholder to secure farm services, not an unlawful subtenancy. Therefore, no ground for ejectment was established.