G.R. No. L-19866; April 29, 1964
Davao Steel Corporation, petitioner, vs. Jose R. Cabatuando, Judge of the Court of Agrarian Relations, 7th Regional District, Cebu, and Cornelio Cuyson, respondents.

FACTS

Petitioner Davao Steel Corporation purchased agricultural land in Cebu from Domingo Mendoza in May 1961. The vendor assured the corporation of no trouble and did not disclose the land was tenanted. Respondent Cornelio Cuyson had been the long-time tenant of the land. Immediately after the sale, the corporation proceeded to develop the land for industrial use: it cut down the corn crop, constructed employee houses, laid a factory foundation, built a road and a surrounding stone wall, and destroyed the sugarcane crop, except for a portion outside the wall. Cuyson, who was bed-ridden at the time, witnessed the construction from his nearby house but did not immediately protest. On June 8, 1961, Cuyson filed a complaint for reinstatement and damages with the Court of Agrarian Relations (CAR).
The CAR ruled in favor of Cuyson, ordering his reinstatement to the remaining agricultural portion and awarding actual damages, exemplary damages, attorney’s fees, and costs. The CAR also denied the corporation’s motion for leave to file a third-party complaint against the vendor Mendoza. Davao Steel Corporation filed this petition for certiorari, arguing the CAR lacked jurisdiction because the land had been converted to industrial use, thereby extinguishing any tenancy relationship at the time of the complaint.

ISSUE

Whether the Court of Agrarian Relations had jurisdiction over the complaint for reinstatement and damages filed by tenant Cornelio Cuyson against the purchaser-corporation that unilaterally converted the agricultural land to industrial use.

RULING

The Supreme Court affirmed the CAR decision, upholding its jurisdiction. The legal logic is clear: jurisdiction is determined by the allegations in the complaint and the nature of the dispute at its inception. When Cuyson filed his complaint, the core issue was the alleged illegal termination of his tenancy rights due to the land’s conversion. This squarely falls under the CAR’s jurisdiction over disputes involving the cultivation and use of agricultural land under Republic Act No. 1267, as amended.
The corporation’s claim that no tenancy relationship existed because the land had become industrial is untenable. The land was agricultural when purchased; the corporation’s unilateral acts of conversion, undertaken without the tenant’s consent or court approval, cannot be invoked to oust the CAR’s jurisdiction. By purchasing the land, the corporation succeeded to the duties of the landholder under Section 9 of the Tenancy Act (Republic Act No. 1199) and was obligated to respect the tenant’s security of tenure. The wrongful conversion, which the corporation itself caused, cannot legitimize the termination of the tenancy. The Court also found the award of exemplary damages proper due to the corporation’s high-handed destruction of standing crops.
However, the Court agreed that the CAR correctly denied the motion to file a third-party complaint against the vendor Mendoza. The alleged cause of action for misrepresentation arose from pre-sale negotiations and was a tort claim between vendor and vendee, not a dispute arising from a tenancy relationship. Such an action falls under the jurisdiction of regular courts.