G.R. No. 180374. January 22, 2010.*

 
BIENVENIDO T. BUADA, ISAIAS B. QUINTO,
NEMESIO BAUTISTA, ORLANDO R. BAUTISTA
FREDDIE R. BAUTISTA, CARLITO O. BUADA,
GERARDO O. BUADA, ARMANDO M. OLIVA,
ROGELIO F. RAPAJON, and EUGENIO F.
FLORES, petitioners, vs. CEMENT CENTER, INC.,
respondent.

Agrarian Reform Law; It is the policy of the State to

make small farmers more independent, self-reliant and
responsible citizens

_______________

*  SECOND DIVISION.

 
 

623
 and a source of genuine strength in our democratic
society.—Republic Act (RA) No. 3844 (1963), otherwise
known as the Agricultural Land Reform Code, declares it
to be the policy of the State to make small farmers more
independent, self-reliant and responsible citizens, and a
source of genuine strength in our democratic society.
Towards this end, the same law guarantees the security
of tenure of farmers with respect to the land they
cultivate.
Same; Tenancy Relations; Grounds for the
Extinguishment of Agricultural Leasehold Relations.—As
an exception to this security of tenure, however, Section 8
of RA 3844 specifically enumerates the grounds for the
extinguishment of agricultural leasehold relations, viz:
Section 8. Extinguishment of Agricultural Leasehold
Relation.—The agricultural leasehold relation
established under this Code shall be extinguished by: (1)
Abandonment of the landholding without the knowledge
of the agricultural lessor; (2) Voluntary surrender of
the landholding by the agricultural lessee, written
notice of which shall be served three months in advance;
or (3) Absence of the persons under Section nine to
succeed to the lessee, in the event of death or permanent
incapacity of the lessee.
Same; Same; Voluntary Surrender; Voluntary
surrender as a mode of extinguishment of tenancy
relations, does not require any court authorization
considering that it involves the tenant’s own volition; The
voluntary surrender of the landholding by an agricultural
lessee should be due to circumstances more advantageous
to him and his family.—Voluntary surrender, as a mode
of extinguishment of tenancy relations, does not require
any court authorization considering that it involves the
tenant’s own volition. To protect the tenant’s right to
security of tenure, voluntary surrender, as contemplated
by law, must be convincingly and sufficiently proved by
competent evidence. The tenant’s intention to surrender
the landholding cannot be presumed, much less
determined by mere implication. Otherwise, the right of a
tenant farmer to security of tenure becomes an illusory
one. Moreover, RA 3844 provides that the voluntary
surrender of the landholding by an agricultural lessee
should be due to circumstances more advantageous to him
and his family.
Same; Same; Tenancy relations cannot be bargained
away except for the strong reasons provided by law which
must be convincingly shown by evidence in line with the
State’s policy of achieving a

 
 
624

dignified existence for the small farmers free from

pernicious institutional restraints and practices.—It was
not shown why petitioners as tenant-farmers would
voluntarily give up their sole source of livelihood. There
was likewise no showing that the money was indeed
advantageous to petitioners’ families as to allow them to
pursue other sources of livelihood. To stress, tenancy
relations cannot be bargained away except for the strong
reasons provided by law which must be convincingly
shown by evidence in line with the State’s policy of
achieving a dignified existence for the small farmers free
from pernicious institutional restraints and practices.

PETITION for review on certiorari of the decision

and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
   Geraldine N. Francisco for petitioners.
   A.A. Navarro III Law Offices for respondent.

 
DEL CASTILLO, J.:
 
 In all contractual, property or other relations,
when one of the parties is at a disadvantage on
account of his moral dependence, ignorance,
indigence, mental weakness, tender age or other
handicap, the courts must be vigilant for his
protection.1
This is a Petition for Review on Certiorari
assailing the July 19, 2007 Decision2 of the Court of
Appeals (CA) in CA-G.R. SP No. 95154 which
granted respondent’s Petition for Review and
nullified and set aside the Decisions of the Regional
Adjudicator3 dated March 9, 1999 and of the
Department of Agrarian Reform Adjudication
Board (DARAB)4 dated

_______________

1  CIVIL CODE OF THE PHILIPPINES, Art. 4.

2   Rollo, pp. 7-17; penned by Associate Justice Amelita G.
Tolentino and concurred in by Associate Justices Lucenito N.
Tagle and Sixto C. Marella, Jr.
3  Id., at pp. 82-87.
4  Id., at pp. 90-94.

 
 
625

March 11, 2005 dismissing the Complaint for

Confirmation of Voluntary Surrender and Damages
filed by respondent. Likewise assailed is the CA
Resolution5 dated October 11, 2007 which denied
petitioners’ Motion for Reconsideration.
 
Factual Antecedents
 
Petitioners Bienvenido T. Buada, Isaias B.
Quinto, Nemesio Bautista, Orlando T. Bautista,
Freddie R. Bautista, Carlito O. Buada, Gerardo O.
Buada, Armando M. Oliva, Rogelio F. Rapajon, and
Eugenio F. Flores were tenant-farmers cultivating
three parcels of agricultural land owned by
respondent Cement Center, Inc.6
On March 13, 1998, respondent filed a
Complaint7 for Confirmation of Voluntary
Surrender and Damages against petitioners with
the Department of Agrarian Reform Adjudication
Board, Region 1 in Urdaneta City, Pangasinan. It
claimed that on June 28, 1995, petitioners entered
into a Compromise Agreement with respondent
whereby the former, for and in consideration of the
sum of P3,000.00 each, voluntarily surrendered
their respective landholdings. However, despite
respondent’s repeated demands, petitioners refused
to vacate subject landholdings.
In their Answer,8 petitioners alleged that their
consent to the Compromise Agreement was
obtained through fraud, deceit, and
misrepresentation. They claimed that sometime in
1995, respondent induced them to sign a
Compromise Agree-

_______________

5  Id., at pp. 72-73.

6   The following are the area, location and Transfer
Certificates of Title (TCT) covering said parcels of land:
TCT No.      Area                         Location
127892   75,815 sq. m. Batanguil, Sison, Pangasinan
123800   75,815 sq. m. Batanguil, Sison, Pangasinan
83276     34,738 sq. m. Bahonan, Pozzorubio, Pangasinan
7  Rollo, pp. 75-78.
8  Id., at pp. 79-81.

 
 
 626

ment by representing that the subject landholdings

are no longer viable for agricultural purposes.
Petitioners alleged that respondent assured them
that they would only apply for the conversion of the
land and that they would have to surrender the
land only upon the approval of said application and
that thereafter, they will be paid a disturbance
compensation of P3,000.00 each. Petitioners also
claimed that respondent promised to hire them to
work on the project that was planned for the
converted land. But, should the application for
conversion be denied, petitioners will continue to be
tenants and could later become beneficiaries under
the Comprehensive Agrarian Reform Law.
 
Ruling of the Regional Adjudicator
 
On March 9, 1999, the Regional Adjudicator
rendered a decision in favor of the tenant-farmers.
The dispositive portion of the Decision reads:

“WHEREFORE, premises considered, Respondents

being bonafide tenants of the subject landholdings, the
instant case is hereby DISMISSED for lack of merit.
SO ORDERED.”9

 
The Regional Adjudicator held that the
Compromise Agreement was not enforceable
because it violated the provisions of Administrative
Order No. 12, Series of 1994.10 Said administrative
order requires the payment of disturbance
compensation which should not be less than five
times the average of the annual gross value of the
harvest on their actual landholdings during the last
five preceding calendar years. As such, the
disturbance compensation being offered by
respondent to each of the petitioners, which is
P3,000.00 plus the income derived from a single
cropping, is grossly inade-

_______________

9 Id., at p. 87.
10 Consolidated and Revised Rules and Regulations
Governing Conversion of Agricultural Lands to Non-Agricultural
Uses.

 
 

627

quate. The Regional Adjudicator likewise noted that

respondent did not offer homelots to the petitioners
as required under the aforesaid administrative
order.
Finally, the Regional Adjudicator held that since
respondent’s application for conversion was denied,
then the purpose for the execution of the
Compromise Agreement was rendered nugatory. As
a consequence of the denial of the application, the
subject landholdings shall be placed under the
Comprehensive Agrarian Reform Program (CARP)
compulsory coverage, as provided under the
Administrative Order No. 12, Series of 1994.
 
Ruling of the DARAB
 
Aggrieved, respondent appealed to DARAB
which rendered its Decision on March 11, 2005, the
dispositive portion of which reads:

“WHEREFORE, premises considered, the Appeal is

DENIED and the assailed Decision is hereby
AFFIRMED.”11
  
In affirming the Decision of the Regional
Adjudicator, the DARAB found that respondent
failed to prove that petitioners voluntarily
surrendered their tenancy rights over the subject
landholdings. It held that since the application for
conversion was denied, then the Compromise
Agreement is not a perfected obligation; it is as if
the petitioners’ voluntary surrender never existed.
 
Ruling of the Court of Appeals
 
Alleging that the DARAB gravely erred and
committed grave abuse of discretion in dismissing
its appeal, respondent thereafter filed a Petition for
Review with the CA. The CA found the appeal
meritorious and rendered its Decision in the
following tenor:

_______________

11  Rollo, p. 94.

 
 

628

“WHEREFORE, in the light of the foregoing, the

instant Petition is GRANTED. The assailed decisions of
the Department of Agrarian Reform Adjudication Board
(DARAB) dated March 11, 2005 and the Regional
Adjudicator dated March 9, 1999 are NULLIFIED and
SET ASIDE. The petitioner’s Complaint for Confirmation
of Voluntary Surrender and Damages is likewise
GRANTED.
The voluntary surrender of the three (3) parcels of
land covered by Transfer Certificate of Title Nos. 127892,
123800, and 83276 by the respondents in favor of the
petitioner as embodied in the Compromise Agreement is
hereby CONFIRMED.
Accordingly, the respondents are ORDERED to
VACATE the subject landholdings upon payment by the
petitioner to them of the amount of Three Thousand
Pesos (P3,000.00) each representing their disturbance
compensation.”12

 
The appellate court found the Compromise
Agreement executed by the parties to be valid. It
held that its enforceability is not subject to the
approval by the DARAB of the respondent’s
application for conversion. Likewise, the deficiency
in consideration is not a ground to annul an
otherwise valid and enforceable agreement. The
appellate court also found petitioners to be literate
on the ground that they were able to affix their
signatures to the agreement.
Petitioners’ Motion for Reconsideration was
denied.
Hence, this petition.
 
Issues
 
In this Petition for Review on Certiorari
petitioners raise the following issues:

1. THE HONORABLE COURT OF APPEALS

GRAVELY ERRED IN MAKING AN INFERENCE
[THAT] THE COMPROMISE AGREEMENT IS NOT
SUBJECT TO INTERPRETATION.

2. THE HONORABLE COURT OF APPEALS

GRAVELY ERRED IN MAKING [AN] INFERENCE
(THAT) THE PETITIONERS WHO

_______________
 12  Id., at p. 16.

 
 

629

ARE TENANTS ARE LITERATE THUS, THEY

UNDERSTOOD THE IMPORT OF THE CONTRACT
THEY SIGNED.

3. THE HONORABLE COURT OF APPEALS

GRAVELY ERRED IN MAKING (AN) INFERENCE
(THAT) THE DEFICIENCY OF CONSIDERATION
(which is not in accordance with ADMINISTRATIVE
ORDER NO. 12) DOES NOT NULLIFY THE
CONTRACT.

 
Our Ruling
 
The petition is impressed with merit.
Well-settled is the rule that this Court is not a
trier of facts. When supported by substantial
evidence, the findings of fact of the CA are
conclusive and binding with, and are not reviewable
by us unless the case falls under any of the
recognized exceptions. One of the exceptions is
when the findings of fact of the CA are contrary to
those of the trial court13 or quasi-judicial agency. In
this case, the findings of fact of the CA and the
DARAB are conflicting, thus we are compelled to
take a look at the factual milieu of this case.
 
It is the policy of the State to promote
the Security of Tenure of Farmers over
their leasehold.
 
 Republic Act (RA) No. 3844 (1963), otherwise
known as the Agricultural Land Reform Code,
declares it to be the policy of the State to make
small farmers more independent, self-reliant and
responsible citizens, and a source of genuine
strength in our democratic society.14 Towards this
end, the same law guarantees the security of tenure
of farmers with respect to the land they cultivate,
thus:

_______________

13   The Consolidated Bank and Trust Corp. v. Court of

Appeals, 316 Phil. 246, 252; 246 SCRA 193, 199 (1995) citing
Massive Construction, Inc. v. Intermediate Appellate Court, G.R.
Nos. 70310-11, June 1, 1993, 223 SCRA 1, 7.
14  REPUBLIC ACT NO. 3844, Section 2, par (6).

 
 

630

“Section 7. Tenure of Agricultural Leasehold

Relation.—The agricultural leasehold relation once
established shall confer upon the agricultural lessee the
right to continue working on the landholding until such
leasehold relation is extinguished. x x x”

 
As an exception to this security of tenure,
however, Section 8 of RA 3844 specifically
enumerates the grounds for the extinguishment of
agricultural leasehold relations, viz:

“Section 8. Extinguishment of Agricultural Leasehold

Relation.—The agricultural leasehold relation established
under this Code shall be extinguished by:
 (1) Abandonment of the landholding without the
knowledge of the agricultural lessor;
(2) Voluntary surrender of the landholding by
the agricultural lessee, written notice of which shall be
served three months in advance; or
(3) Absence of the persons under Section nine to
succeed to the lessee, in the event of death or permanent
incapacity of the lessee.” (Emphasis supplied)

 
Voluntary surrender, as a mode of
extinguishment of tenancy relations, does not
require any court authorization considering that it
involves the tenant’s own volition.15 To protect the
tenant’s right to security of tenure, voluntary
surrender, as contemplated by law, must be
convincingly and sufficiently proved by competent
evidence. The tenant’s intention to surrender the
landholding cannot be presumed, much less
determined by mere implication. Otherwise, the
right of a tenant farmer to security of tenure
becomes an illusory one.16 Moreover, RA 3844
provides that the voluntary surrender of

_______________

15  Jacinto v. Court of Appeals, 176 Phil. 580, 588; 87 SCRA

263, 271 (1978).
16  Ludo & Luym Development Corporation v. Barretto, G.R.
No. 147266, September 30, 2005, 471 SCRA 390, 405; Talavera
v. Court of Appeals, G.R. No. 77830, February 27, 1990, 182
SCRA 778, 782.

 
 
631
the landholding by an agricultural lessee should be
due to circumstances more advantageous to him and
his family.17
 
The Compromise Agreement did not
constitute the “voluntary surrender”
contemplated by law.
 
Respondent asserts that petitioners voluntarily
surrendered their landholdings. Petitioners,
however, deny this claim and instead maintain that
they did not execute the Compromise Agreement
with a view to absolutely sell and surrender their
tenancy rights in exchange for P3,000.00 for each of
them. They assert that such agreement was subject
to suspensive conditions, i.e., the approval of
respondent’s application for conversion of the land
to non-agricultural and their subsequent absorption
as laborers in the business that respondent will put
up on said land, or, if the application will not be
approved, petitioners will continue to be tenants of
the land and could later on qualify as beneficiaries
of the CARP. Petitioners assert that they were not
aware that these conditions were not incorporated
in the Compromise Agreement because they were
not literate in the English language used. Neither
were they represented by counsel nor were the
contents of the agreement explained to them.
Petitioners thus claim that the Compromise
Agreement should be interpreted in accordance
with the real intention of the parties pursuant

_______________

17  REPUBLIC ACT NO. 3844 provides:

Section 28. Termination of Leasehold by Agricultural
Lessee During Agricultural Year—The agricultural lessee
may terminate the leasehold during the agricultural year
for any of the following causes:
 xxxx
(5) Voluntary surrender due to circumstances more
advantageous to him and his family.

 
 
632

to Articles 1370 and 1371 of the Civil Code.18

Petitioners likewise claim that as they were
illiterate in the English language, they could not
have given their valid consent to the Compromise
Agreement. Lastly, they aver that the disturbance
fee of P3,000.00 for each tenant violates
Administrative Order No. 12, Series of 2004 which
provides:

“In all cases of petitions for conversions resulting in

the displacement of farmer-beneficiaries, such
beneficiaries shall be entitled to a disturbance
compensation, which should not be less than five (5)
times the average of the annual gross value of the
harvest on their actual landholdings during the
last 5 preceding calendar years. In addition, the DAR
shall exert all efforts to see to it that free homelots and
assured employment for displaced beneficiaries are
provided by the applicant/developer.”

 
Respondent, on the other hand, counters that as
the Compromise Agreement does not reflect the
conditions alleged by petitioners, parol evidence
should not be allowed to prove such conditions; that
petitioners cannot claim that they are illiterate in
the English language and that the contents of the
agreement were not explained to them as it is
incumbent upon every contracting party to learn
and know the contents of an instrument before
signing and agreeing to it; and, that it was not
necessary for petitioners to be assisted by counsel
in signing the agreement as the execution thereof is
not akin to a custodial investigation or criminal
proceedings wherein the right to be represented by
counsel is indispensable. As to the disturbance fee,
respondent believes that the sum of

_______________

18  Art. 1370. If the terms of a contract are clear and leave

no doubt upon the intention of the contracting parties, the literal
meaning of its stipulations shall control.
If the words appear to be contrary to the evident intention of
the parties, the latter shall prevail over the former.
Art. 1371. In order to judge the intention of the contracting
parties, their contemporaneous and subsequent acts shall be
principally considered.

 
 
633

P3,000.00 for each tenant is fair and sufficient

because apart from said amount, petitioners were
allowed to cultivate the lands for a single cropping
without any obligation to pay any lease rental in
the form of palay or cotton harvest or any other
mode of payment.
As earlier stated, vital to these contentions is the
resolution of the basic issue of whether or not
petitioners as tenants-farmers intended to
absolutely and voluntarily surrender their tenancy
rights over the subject landholdings.
Closer to, although not identical with, the factual
setting of this case is Talavera v. Court of
Appeals.19 In said case, we found that the evidence
on record and therein petitioners’ arguments were
not enough to overcome the rights of the private
respondent as provided in the Constitution and the
agrarian statutes. The following circumstances
were considered: (1) the [K]asunduan executed by
the tenant-farmer in favor of the landowners
wherein the former purportedly voluntarily
relinquished his tenancy rights for the amount of
P1,000.00 was prepared by one of the landowners;
(2) the tenant-farmer continued to work on the farm
from 1973 to 1984 when the landowners ejected
him, or for a period of more than 10 years after the
execution of the [K]asunduan; and, (3) it was not
shown why the tenant-farmer would voluntarily
give up his sole source of livelihood even if he
needed money to pay off his debts or what he did
from 1973 to 1984 if the claim of the Talaveras that
they worked on the land themselves during said
period was correct. Hence, we held that the
[K]asunduan wherein the leasehold tenant
allegedly surrendered his tenancy rights
voluntarily for the sum of P1,000.00, did not
constitute “voluntary surrender” as contemplated
by law, and reinstated the tenant in the
landholding.
On the other hand, in Levardo v. Yatco,20 we
upheld the waiver of tenancy rights and ruled that:

_______________

19  G.R. No. 77830, February 27, 1990, 182 SCRA 778.

20  G.R. No. 165494, March 20, 2009, 582 SCRA 93.

 
 
634

“Based on the evidence on record, respondents paid

Aguido P2,000,000.00 and Hernando P2,417,142.00 as
disturbance compensation. A reading of the
Pinanumpaang Salaysay executed by petitioners show
that they gave up their leasehold rights “dahil sa aming
kagustuhang umiba ng hanap buhay ng higit ang
pagkikitaan kaysa panakahan.” The money given by
respondents as disturbance compensation was
indeed advantageous to the families of petitioners,
as it would have allowed them to pursue other
sources of livelihood.
Petitioners did not refute in their pleadings the
authenticity of the documents purporting to be their
waiver of tenancy rights. As a matter of fact, they
themselves attached the said documents to their
complaints and argued that said waivers were obtained
through fraud and misrepresentation, since they were
unaware that CLTs were issued in their names. However,
such argument deserves scant consideration, since it has
been established that no such CLTs were issued to
petitioners; and more importantly, the lands in dispute
do not fall under the coverage of P.D. No. 27. In addition,
said waivers of tenancy rights were notarized and
therefore the same have the presumption of regularity in
their favor.” (Emphasis supplied)

 
A perusal of the subject Compromise Agreement
reveals that the parties considered the amount of
P3,000.00 together with the income from a single
cropping as comprising the disturbance
compensation package, viz.:

“4. The aforeindicated income derived from the

properties and the financial assistance of P3,000.00 shall
be considered as the disturbance compensation package
in favor of the SECOND PARTY by reason or as a result
of their vacating the premises in accordance with
Administrative Order No. 1, Series of 1990 of the
Department of Agrarian Reform.”21 (Emphasis supplied)

 
 Petitioners, however, assail the disturbance
compensation package provided in the Compromise
Agreement as insufficient and contrary to
Administrative Order No. 12, Series of 2004. They
claim that they would not have acceded to such a

_______________

21  Compromise Agreement dated 28 June 1995, par. 4; Rollo,

p. 544.

 
 

635

measly amount were it not for the agreement that

respondent will hire them as workers on the
planned project on the subject land.
Despite the above contentions of petitioners,
respondent failed to present evidence to show that
the disturbance compensation package corresponds
with the compensation required by the said
Administrative Order. Neither was there any
showing that said disturbance compensation is not
less than five times the average annual gross value
of the harvest on petitioners’ actual landholdings
during the preceding five calendar years.
Moreover, it was not shown why petitioners as
tenant-farmers would voluntarily give up their sole
source of livelihood. There was likewise no showing
that the money was indeed advantageous to
petitioners’ families as to allow them to pursue
other sources of livelihood. To stress, tenancy
relations cannot be bargained away except for the
strong reasons provided by law which must be
convincingly shown by evidence in line with the
State’s policy of achieving a dignified existence for
the small farmers free from pernicious institutional
restraints and practices.22
In view of the foregoing, we find the evidence on
record and respondent’s arguments insufficient to
overcome the rights of petitioners as provided in the
Constitution and agrarian statutes. The alleged
voluntary surrender of petitioners of their tenancy
rights for the sum of P3,000.00 each could not
constitute as “voluntary surrender” within the
contemplation of law.
WHEREFORE, the petition is GRANTED. The
Decision of the Court of Appeals in CA G.R. SP No.
95154 dated July 19, 2007 and its Resolution dated
October 11, 2007 are REVERSED and SET ASIDE.
The Decisions of the Regional

_______________

22  Talavera v. Court of Appeals, supra note 19 at 784, citing

Republic Act No. 3844 Section 2 [2].

 
 
636

Adjudicator dated March 9, 1999 and the

Department of Agrarian Reform Adjudication
Board dated March 11, 2005, dismissing
respondent’s Complaint for Confirmation of
Voluntary Surrender and Damages are
REINSTATED and AFFIRMED.
SO ORDERED.

Carpio (Chairperson), Brion, Abad and Perez,

JJ., concur.

Petition granted, judgment and resolution

reversed and set aside.
 Note.—A tenancy relationship can only be
created with the consent of the true and lawful
landholder. (Mabayos vs. Maningas, 560 SCRA 213
[2008])
 
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