G.R. No. 56402-03 December 1, 1989
EFREN CUNANAN, ET AL., plaintiffs-appellants, vs. ANGELINA SENGSON, ET AL., defendants-appellees.

FACTS

Two groups of agricultural tenants filed separate complaints in the Court of Agrarian Relations against their common landowners, spouses Sixto and Angelina Sengson. The plaintiffs-appellants, who were share tenants on sugarland in Mexico, Pampanga, sought to elect the leasehold system under Section 4 of Republic Act No. 3844 (Agricultural Land Reform Code). They alleged having notified the defendants of their election and having shouldered production expenses for the 1978-1979 crop year, but the parties failed to agree on leasehold rentals. The landowners, in their answer, contended the plaintiffs were not qualified as they were paupers, denied receiving proper notice, and argued that sugarlands were not yet subject to leasehold absent a separate presidential proclamation as required by the law.
The trial court consolidated the cases and, based on a stipulation of facts, dismissed the complaints. It upheld the landowners’ position, ordering the parties to maintain the 50-50 share tenancy arrangement. The Court of Appeals later certified the case to the Supreme Court, finding it involved a pure question of law regarding the applicability of leasehold conversion to sugarlands.

ISSUE

Whether or not share tenants on sugarland plantations can validly elect to convert their tenancy relationship to a leasehold system under Republic Act No. 3844, as amended, absent a presidential proclamation specifically including sugarlands.

RULING

Yes. The Supreme Court reversed the trial court’s decision, ruling in favor of the tenant-appellants. The legal logic centers on the interpretation of the amendments to the Agricultural Land Reform Code, particularly Republic Act No. 6389, which took effect in 1971. This amendatory law provided for the automatic conversion of share tenancy to leasehold. The Court, citing its precedent in Dayrit v. Court of Appeals and Wilfredo David v. Court of Appeals, held that this automatic conversion mechanism is applicable to sugarland tenants.
The Court rejected the landowners’ argument that a prior separate presidential proclamation was a mandatory precondition for sugarland tenants to elect leasehold. It clarified that while such a proclamation might be necessary for the compulsory application of leasehold to all sugarlands, it does not preclude an individual share tenant from exercising the option to convert under the law. To hold otherwise would be regressive and contravene the express public policy of abolishing share tenancy. Therefore, the appellants, as share tenants, possessed the right to elect the leasehold system, and their valid exercise of this option must be respected. The case was remanded for the proper determination of the leasehold rentals.