GR 185838; (February, 2014) (Digest)
G.R. No. 185838 ; February 10, 2014
RICARDO V. QUINTOS, Petitioner, vs. DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD AND KANLURANG MINDORO FARMER’S COOPERATIVE, INC., Respondents.
FACTS
The subject property is a 604.3258-hectare land in Tayamaan, Mamburao, Occidental Mindoro, covered by TCT No. T-116395 in the name of Golden Country Farms, Incorporated (GCFI), consisting of a 249-hectare mango orchard and a 355-hectare riceland. Petitioner Ricardo V. Quintos is the majority stockholder of GCFI. GCFI contracted loans with PNB and DBP, secured by real estate mortgages over its properties, including the subject property. After management changes and sequestration events, the Asset Privatization Trust (APT) assumed the financial claims. In 1989, APT Officer-in-Charge Cesar Lacuesta entered into a verbal agreement with 53 members of respondent Kanlurang Mindoro Farmers’ Cooperative, Inc. (KAMIFCI), allowing them to tend the mango trees and gather fruits for ₱300.00 per tree, with payment to be remitted to Quintos. Quintos later reacquired possession through a Memorandum of Agreement with APT. The Department of Agrarian Reform (DAR) placed the riceland under compulsory acquisition under CARP. Quintos filed a petition for exemption, citing the Luz Farms ruling, but the DAR Secretary denied it, ruling that GCFI had ceased poultry/livestock operations before RA 6657’s effectivity. The Office of the President (OP) later set aside the DAR Order, granting exemption except for the mango orchard. Meanwhile, KAMIFCI filed an action for peaceful possession against Quintos before the PARAD, asserting rights under an agricultural leasehold tenancy agreement with Lacuesta. The PARAD ruled a verbal lease tenancy existed and directed reinstatement of the 53 KAMIFCI members. The DARAB affirmed with modifications, declaring farmers in the riceland may qualify as beneficiaries in the mango orchard and that CLOAs should be generated. The CA affirmed the tenancy agreement’s validity but declared the generation of CLOAs premature pending landowner’s right of retention and payment of just compensation.
ISSUE
Whether or not the Court of Appeals correctly sustained the validity of the tenancy agreement between APT (acting for GCFI) and the KAMIFCI members.
RULING
No. The petition is meritorious. The Supreme Court ruled that the CA incorrectly sustained the validity of the tenancy agreement. For a tenancy relationship to exist, all essential elements must concur, including consent of the landowner. The right to hire a tenant is a personal right of the landowner. Records showed no proof that APT was authorized by GCFI, the landowner, to install tenants on the property. APT only assumed the rights of the mortgagees (PNB and DBP) and did not possess the landowner’s authority to establish tenancy relations. Therefore, the purported tenancy agreement was not validly constituted.