Buada vs. Cement Center Inc.

Bienvenido Buada et. al., vs. Cement Center, Inc.

[G.R. No. 180374, January 22, 2010]

Doctrines:

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.

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.

Facts:

          Petitioners were tenant-farmers cultivating three parcels of agricultural land owned by respondent Cement Center, Inc.

          On March 13, 1998, respondent filed a Complaint for Confirmation of Voluntary Surrender and Damages against petitioners with the Department of Agrarian Reform Adjudication Board, 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 respondents repeated demands, petitioners refused to vacate subject landholdings.

          In their Answer, 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 Agreement 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.

Issue: Whether or not the Compromise Agreement constitute the voluntary surrender contemplated by law.

Held: 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.

          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 respondents 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 to Articles 1370 and 1371 of the Civil Code. Petitioners likewise claim that as they were illiterate in the English language, they could not have given their valid consent to the Compromise Agreement.

          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:

“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.”

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.

Thus, the Court finds 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.