G.R. No. 48518 November 8, 1989
GREGORIO SANTIAGO, petitioner, vs. HONORABLE COURT OF APPEALS, HONORABLE COURT OF AGRARIAN RELATIONS, DIONESIA GARCIA and PONCIANO PADERES, respondents.

FACTS

The case involves a 2.5-hectare rice land in Nueva Ecija owned by spouses Ponciano Paderes and Dionesia Garcia (private respondents) and cultivated by tenant Gregorio Santiago (petitioner). In a prior agrarian case, the Court of Agrarian Relations (CAR) fixed the leasehold rental for the regular crop at 17 cavans and 29 kilos of palay and established a share-tenancy arrangement for the dayatan crop due to an irregular water supply from the Bongabon Irrigation System. This decision was affirmed by the Court of Appeals in 1975.
Subsequently, the operationalization of the Pantabangan Dam in 1974 complemented the Bongabon Irrigation System, ensuring a sufficient and continuous water supply. This development led to increased harvests and secured the planting of the dayatan crop. In 1977, the landowners filed a new action before the CAR seeking an increase in leasehold rentals, citing the improved irrigation as a capital improvement that enhanced productivity. The CAR granted the increase, setting the rental at 42 cavans for both regular and dayatan crops and ordering a shift to a leasehold system for the latter.

ISSUE

The core issues are: (1) Whether the CAR could legally increase the previously fixed rental based on the improved irrigation; (2) Whether such an increase required a specific inquiry into the actual harvest increase; and (3) Whether the Court of Appeals denied due process by deciding the appeal without requiring the parties to file memoranda.

RULING

The Supreme Court dismissed the petition, affirming the decisions of the lower courts. On the substantive issue, the Court applied the last paragraph of Section 34 of Republic Act No. 3844 , as amended, which provides that if capital improvements not introduced by the lessee increase the land’s productivity, the rental shall be increased proportionately. The Pantabangan Dam’s operation, which supplemented the existing irrigation system, constituted such a capital improvement. The factual findings of both the CAR and the Court of Appeals, which were based on substantial evidence, conclusively established that this improvement resulted in increased production, thereby legally justifying the rental adjustment. The law does not require a separate, detailed inquiry into the exact harvest increase beyond the lower courts’ supported factual determination.
Regarding procedural due process, the Court held that the Court of Appeals did not commit an error. Section 18 of Presidential Decree No. 946 grants the appellate court discretion to decide whether requiring memoranda from the parties is necessary. The filing of a memorandum is not an indispensable part of the appellate process. Since the law did not make it mandatory, and both parties were in an equal position without one, the petitioner could not claim deprivation of his day in court. The Court of Appeals validly exercised its discretion by affirming the CAR decision after finding it supported by substantial evidence and consistent with law.