G.R. No. 192026; October 1, 2014
AUTOMAT REALTY AND DEVELOPMENT CORPORATION, LITO CECILIA AND LEONOR LIM, Petitioners, vs. SPOUSES MARCIANO DELA CRUZ, SR. AND OFELIA DELA CRUZ, Respondents.

FACTS

Petitioner Automat Realty and Development Corporation (Automat) is the registered owner of two parcels of land in Sta. Rosa, Laguna. In 1990, respondent Ofelia dela Cruz volunteered to be the property’s caretaker to prevent informal settlers, with the condition she would vacate upon demand. The respondent spouses’ family stayed on the property, cultivated it, and shared the produced palay with Automat through its agent, petitioner Lito Cecilia, who also remitted rentals to petitioner Leonor Lim. In August 2000, Automat demanded that the spouses vacate for development. The spouses refused, claiming to be agricultural tenants with security of tenure. They filed a petition for maintenance of peaceful possession before the Provincial Agrarian Reform Adjudicator (PARAD). The PARAD dismissed the complaint, finding the land was already classified as residential, commercial, and industrial in 1990, making an agricultural tenancy legally impossible. The Department of Agrarian Reform Adjudication Board (DARAB) reversed the PARAD, declaring the spouses as de jure tenants. The Court of Appeals affirmed the DARAB. Subsequently, the Department of Agrarian Reform (DAR) Region IV-A issued two orders dated March 30, 2010, exempting the property from Comprehensive Agrarian Reform Program (CARP) coverage. Petitioners filed a supplemental motion for reconsideration with the Court of Appeals, which was noted without action as the court had already denied reconsideration two days prior.

ISSUE

1. Whether an agricultural tenancy relationship exists between Automat and respondent spouses.
2. Whether the DAR exemption orders have an effect on the DARAB’s earlier exercise of jurisdiction.

RULING

1. No agricultural tenancy relationship exists. For a tenancy relationship to exist, all six elements must be present: (1) parties are landowner and tenant; (2) subject is agricultural land; (3) consent between parties; (4) purpose is agricultural production; (5) personal cultivation by the tenant; and (6) harvest sharing. The property is not agricultural land. It was classified as industrial prior to the effectivity of the Comprehensive Agrarian Reform Law (CARL) in 1988 through municipal zoning ordinances. The subsequent DAR exemption orders dated March 30, 2010, confirmed its exclusion from CARP coverage. Furthermore, there was no consent to a tenancy relationship; the arrangement was a mere caretaker agreement with a condition to vacate upon demand. The sharing of harvest and payment of rentals did not establish tenancy as these acts were merely incidental to the caretaker arrangement. The claim of an implied tenancy contract fails as such a contract involving real property for more than one year is unenforceable under the Statute of Frauds unless ratified, which was not proven.
2. The DAR exemption orders confirm that the land is not agricultural and, therefore, was outside the jurisdiction of the DARAB. The DARAB’s jurisdiction is limited to cases involving agricultural lands under the agrarian reform program. Since the land was not agricultural, the DARAB never acquired jurisdiction over the subject matter. The PARAD’s initial dismissal was correct. The Supreme Court set aside the decisions of the Court of Appeals and the DARAB and reinstated the PARAD’s decision dismissing the respondent spouses’ petition.