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

FACTS

Two groups of agricultural tenants filed separate complaints before the Court of Agrarian Relations seeking to shift their tenancy relationship with common landowners, the Sengson spouses, from a sharehold system to a leasehold system pursuant to Republic Act No. 3844 (Agricultural Land Reform Code). The tenants alleged they had notified the landowners of their election for leasehold and had shouldered production expenses for the 1978-1979 sugarcane crop year, but the parties failed to agree on leasehold rentals. The landowners, in their answer, contended the tenants were paupers unqualified for leasehold, denied receiving proper notice, and argued that sugarlands were not covered by the leasehold program absent a separate presidential proclamation as required under Section 4 of R.A. 3844. The trial court dismissed the complaints, upholding the landowners’ position and ordering the continuation of the 50-50 share tenancy arrangement.

ISSUE

Whether or not tenants on sugarland holdings have the right to elect and shift to a leasehold system of tenancy under R.A. No. 3844 , as amended, even in the absence of a presidential proclamation specifically applying the leasehold system to sugarlands.

RULING

Yes. The Supreme Court reversed the trial court’s decision, ruling in favor of the tenant-appellants. The legal logic hinges on the interpretation of the amendments introduced by Republic Act No. 6389 to Section 4 of R.A. 3844. The Court clarified that while the original provision made the application of leasehold to sugarlands contingent upon a presidential proclamation ensuring efficient management of marketing allotments, the amendatory law instituted an “automatic conversion” from share tenancy to leasehold. This amendment reflected a clear legislative policy to abolish share tenancy and institute the leasehold system as a preparatory step toward ownership. Citing its precedent in Dayrit v. Court of Appeals and David v. Court of Appeals, the Court held that this policy of automatic conversion applies to sugarland tenants. Therefore, individual sugarland tenants possess the statutory right to elect the leasehold system. The absence of the presidential proclamation does not negate this individual right of election; it merely means that for sugarland tenants who do not actively elect leasehold, existing share arrangements may persist until such a proclamation is issued. The landowners’ arguments regarding the tenants’ financial capacity and notice were rendered moot by this overriding legal interpretation establishing the tenants’ right to convert.