G.R. No. L-14881 and L-15001-7; April 30, 1960
JOSE B. YUSAY, petitioner, vs. HILARIO ALOJADO, ET. AL, respondents.

FACTS

The respondents (Hilario Alojado, Bartolome Talibutab, Graciano Bernardo, Joaquin Ballentos, Magdaleno Bernardo, Honorato Paragan, Crisostomo Rubi, and Nilo Rubi) filed separate petitions in the Court of Agrarian Relations against petitioner Jose B. Yusay for reliquidation of past harvests. They alleged they were share tenants of Yusay on his leased Hacienda San Lucas in Kabankalan, Negros Occidental, from various periods between 1951 and 1957. They claimed the liquidation of harvests was based on an illegal 60-40 sharing ratio in favor of the landholder, when it should have been 70-30 in their favor based on their contributions of labor, work animals, farm implements, and cultivation expenses. Most also alleged they obtained loans under an “alili” system from Yusay with usurious interest, paid in palay. Yusay denied the tenancy relationship, claiming he had subleased the ricelands to Ernesto Berzuela from 1953 to 1957, and raised prescription as a defense for some claims. The Agrarian Court found for the tenants, ordering Yusay to pay specific amounts for short-shares and loan overpayments.

ISSUE

1. Whether the Court of Agrarian Relations had jurisdiction over the cases given the alleged sublease and absence of tenancy relationship.
2. Whether the court had jurisdiction over claims involving loans with usurious interest.
3. Whether the 60-40 sharing ratio was lawful.
4. Whether the claims for past harvests had prescribed.

RULING

1. Yes, the Court of Agrarian Relations had jurisdiction. The court found the claim of sublease to Ernesto Berzuela unsubstantiated, as no written contract was presented, and it was improbable given the lack of security for the rental. The evidence established Yusay as the lessee and the respondents as his share tenants, with Berzuela acting merely as an overseer. The court has original and exclusive jurisdiction over tenancy relations.
2. Yes, the court had jurisdiction over the loan claims. The loans were obtained under Republic Act No. 1199 in connection with farm cultivation, and the “alili” system violated Section 18 of the Act regarding debt payment. Under Section 21 of the same Act, the court has jurisdiction over disputes arising from the landholder-tenant relationship and violations of the Act.
3. No, the 60-40 sharing ratio was not lawful. Since the tenants furnished labor, work animals, farm implements, and cultivation expenses, while the landholder provided only the land, the legal share under both Act No. 4054 and Republic Act No. 1199 was 70-30 in favor of the tenants. The 60-40 ratio was illegal.
4. Yes, prescription applied to part of the claims. Under Section 17 of Republic Act No. 1199 , an action for accounting prescribes in 3 years from the date of threshing. As the cases were filed in 1957, reliquidation could only commence from the 1954-55 crop year. Claims for earlier crop years (1951-52 to 1953-54) were prescribed.
The Supreme Court MODIFIED the Agrarian Court’s decision, reducing the awarded amounts by eliminating the prescribed claims, resulting in a total award of P2,027.59 to the respondents, and AFFIRMED it as modified.