FIRST DIVISION

[G.R. No. 152085. July 8, 2003.]

MARCIANA ALARCON, ERENCIO AUSTRIA, JUAN BONIFACIO,

PETRONILA DELA CRUZ, RUFINA DELA CRUZ, CELESTINO LEGASPI,
JOSE MAYONDAG and DAVID SANTOS , petitioners, vs . HONORABLE
COURT OF APPEALS and PASCUAL AND SANTOS, INC. , respondents.

Erlich V. Barraquias for petitioners.

Sycip Salazar Hernandez & Gatmaitan for respondent.

SYNOPSIS

At the core of the controversy is the issue of whether or not a mere reclassi cation
of the land from agricultural to residential, without any action by the landowner to eject or
dispossess the tenant, entitles the latter to disturbance compensation. The RARAD and
DARAB ruled that when the subject saltbeds have been reclassi ed to residential lands
under a zoning ordinance, the juridical tie between the petitioners and respondent was
severed, thus, petitioners are entitled to disturbance compensation pursuant to Sec. 36,
par. 1 of RA 3844. The CA, however, reversed the decision and ordered the dismissal of
petitioners' complaint against respondent for disturbance compensation.
On appeal, the Supreme Court denied payment of disturbance compensation
because there is neither a nal order of conversion by the DAR nor a court judgment
authorizing the tenants' ejectment on the ground of reclassi cation. The Supreme Court
held that court proceedings are indispensable where the reclassification of the landholding
is duly determined before ejectment can be effected, which in turn paves the way for the
payment of disturbance compensation. The parties, however, can continue with their
landlord-tenant relationship even after the enactment of the zoning ordinance. It was only
in 1994 when this relationship was interrupted because of the dumping of garbage by the
city government which caused the petitioners' dispossession, thus, it would be unfair to
oblige respondent to pay compensation, for acts it did not commit.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; COMPREHENSIVE AGRARIAN REFORM

LAW; AGRICULTURAL LEASEHOLD RELATION; EJECTMENT; WHEN TENANT IS ENTITLED
TO DISTURBANCE COMPENSATION. — The reclassi cation of the land is not enough to
entitle them to disturbance compensation. The law is clear that court proceedings are
indispensable where the reclassi cation of the landholding is duly determined before
ejectment can be effected, which in turn paves the way for the payment of disturbance
compensation. As held by the Court of Appeals, the parties can still continue with their
tenurial relationship even after such reclassi cation. In fact, it is undisputed that in this
case, the parties continued with their landlord-tenant relationship even after the enactment
of Metro Manila Zoning Ordinance No. 81-01. It was only in 1994 when this relationship
was interrupted because of the dumping of garbage by the Parañaque City Government.
Clearly, it was this latter event which caused petitioner's dispossession, and it would be
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 unfair to oblige respondent to pay compensation for acts it did not commit. SDEHCc

2. ID.; ID.; ID.; ID.; ID.; FINAL ORDER OF CONVERSION DISTINGUISHED FROM
MERE RECLASSIFICATION OF AGRICULTURAL LANDS; RULING IN BUNYE V. AQUINO NOT
APPLICABLE IN CASE AT BAR. — The case of Bunye v. Aquino, does not apply in the instant
case. We allowed the payment of disturbance compensation in the said case because
there was an order of conversion issued by the Department of Agrarian Reform of the
landholding from agricultural to residential. The decree was never questioned and thus
became nal. Consequently, the tenants were ejected from the land and were thus
awarded disturbance compensation. In the case at bar, there is no nal order of
conversion. The subject landholding was merely reclassi ed. Conversion is different from
reclassi cation. Conversion is the act of changing the current use of a piece of agricultural
land into some other use as approved by the Department of Agrarian Reform.
Reclassi cation, on the other hand, is the act of specifying how agricultural lands shall be
utilized for non-agricultural uses such as residential, industrial, commercial, as embodied in
the land use plan, subject to the requirements and procedure for land use conversion.
Accordingly, a mere reclassi cation of agricultural land does not automatically allow a
landowner to change its use and thus cause the ejectment of the tenants. He has to
undergo the process of conversion before he is permitted to use the agricultural land for
other purposes.

DECISION

YNARES-SANTIAGO , J : p

Before us is a petition for review on certiorari seeking to set aside the decision
dated September 28, 2001 of the Court of Appeals in CA-G.R. SP No. 63680, 1 which
reversed the decision dated January 10, 2001 of the Department of Agrarian Reform
Adjudication Board (DARAB).
The facts are undisputed.
Respondent corporation, Pascual and Santos, Inc., is the owner of several saltbeds
with an area of 4.1763 hectares, situated in Barangay San Dionisio, Manuyo, Parañaque. In
1950, it instituted petitioners as tenants of the saltbeds under a fty- fty share tenancy
agreement.
The harmonious tenurial relationship between petitioners and private respondent
was interrupted in 1994, when the city government of Parañaque, represented by then
Mayor Pablo Olivares, authorized the dumping of garbage on the adjoining lot. The
garbage polluted the main source of salt water, which adversely affected salt production
on the subject landholding.
Petitioners informed respondent of this development, but it failed to take any step
to stop the dumping of garbage on the adjoining lot. This prompted petitioners to le a
formal protest with the City Government of Parañaque. However, their complaint was
likewise ignored.
Thus petitioners were constrained to le with the Regional Agrarian Reform
Adjudicator of Region IV (RARAD-IV) a complaint against respondent and Mayor Pablo
Olivares for maintenance of peaceful possession and security of tenure with damages.
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 Subsequently, they amended their complaint to one for damages and disturbance
compensation, with prayer for temporary restraining order and injunction. Petitioners
invoked Sections 7, 2 30(1) 3 and 31(1) 4 of Republic Act No. 3844, as amended, otherwise
known as the Agricultural Land Reform Code of the Philippines.
On July 28, 1997, Regional Adjudicator Fe Arche-Manalang rendered a decision
holding that under Metro Manila Zoning Ordinance No. 81-01, issued in 1981, the subject
saltbeds have been reclassi ed to residential lands. Consequently, the juridical tie between
petitioners and respondent was severed, for no tenurial relationship can exist on a land
that is no longer agricultural. This notwithstanding, petitioners are entitled to disturbance
compensation, pursuant to Section 36, par. 1 of R.A. 3844, 5 as amended.
On the other hand, the Regional Adjudicator held that the DAR had no jurisdiction
over the complaint against Mayor Pablo Olivares, and dismissed the same. The dispositive
portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered:

1. Directing the Respondent Pascual and Santos Inc., to pay to each

complainant as and by way of disturbance compensation 1,500 cavans of salt or
their money equivalent at the prevailing market value;

2. Dismissing all other claims for lack of basis;

3. Without pronouncement as to costs.

SO ORDERED. 6

On appeal, the DARAB a rmed in toto the above decision of the RARAD. Aggrieved,
respondent led a petition for review with the Court of Appeals, which was docketed as
CA-G.R. SP No. 63680. On September 28, 2001, the appellate court rendered the assailed
judgment reversing the decision of the DARAB, 7 and ordering the dismissal of petitioners'
complaint against respondent. Petitioners' motion for reconsideration was denied.
Hence, the instant petition based on the following arguments:
I. THAT A LANDOWNER IS NOT LIABLE TO PAY DISTURBANCE
COMPENSATION TO A TENANT ON A MERE RECLASSIFICATION
WITHOUT THE ACTIVE PARTICIPATION OF THE LANDOWNER
BECAUSE IT WOULD RENDER NUGATORY SECTION 31, PAR. 1 OF RA
3844.
II. THAT METRO MANILA ZONING ORDINANCE NO. 81-01, SERIES OF
1981, DID NOT EXTINGUISH THE TENURIAL RELATIONSHIP OF
LANDLORD AND TENANT AND RECLASSIFICATION OF THE LAND
DOES NOT ENTITLE THE TENANTS TO DISTURBANCE
COMPENSATION FOR PARTIES CAN CONTINUE WITH THEIR
TENURIAL RELATIONS EVEN AFTER RECLASSIFICATION. 8
At the core of the controversy is the issue of whether or not a mere reclassi cation
of the land from agricultural to residential, without any court action by the landowner to
eject or dispossess the tenant, entitles the latter to disturbance compensation.
Before we address the above issue, we need to resolve a procedural issue raised by
private respondent regarding the law that must govern the instant case. Is it Republic Act
No. 1199, otherwise known as the Agricultural Tenancy Act of the Philippines, which allows
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 a share tenancy system for landlord-tenant relationship, or RA 3844, as amended, which
declares share tenancy as contrary to public policy and provides for the automatic
conversion of landlord-tenant relationship from agricultural share tenancy to agricultural
leasehold? Respondent contends that RA 1199 must govern the instant petition because
Section 35 of RA 3844 clearly exempts the saltbeds from leasehold and provides that the
provisions of RA 1199 shall govern the consideration as well as the tenancy system
prevailing on saltbeds. The said provision reads:
Section 35. Notwithstanding the provisions of the preceding Sections, in
the case of shponds, saltbeds, and land principally planted to citrus, coconuts,
cacao, coffee, durian, and other similar permanent trees at the time of the
approval of this Code, the consideration as well as the tenancy system prevailing,
shall be governed by the provisions of Republic Act Number Eleven Hundred and
Ninety-Nine, as amended.

We do not agree. Section 76 of Republic Act No. 6657, or the Comprehensive

Agrarian Reform Law, 9 expressly repealed Section 35 of RA 3844. It therefore abolished
the exemption applied to saltbeds and provided that all tenanted agricultural lands shall be
subject to leasehold. Consequently, RA 3844, not RA 1199, must govern the instant
petition.
Coming now to the main issue, petitioners argue that they are entitled to
disturbance compensation for being dispossessed of their tenancy.
Respondent counters that under Sections 30 1 0 and 3 1 ( 1 ) 1 1 of RA 3844, a
landowner of agricultural land is liable to pay disturbance compensation only when he
petitioned the court to eject or dispossess the tenant on the ground that the land has
already been reclassi ed from agricultural to non-agricultural. Without such a petition, he
has no obligation to pay disturbance compensation because the mere reclassi cation of
the land does not ipso facto extinguish the tenancy relationship between tenant and
landowner. Hence, when the subject landholding was reclassi ed in 1981 by the
enactment of Metro Manila Zoning Ordinance No. 81-01, petitioners and private
respondent continued with their tenancy relationship. It was only in 1994 that their
relationship was disturbed due to the dumping of garbage by the city government which
polluted the source of saltwater.
The petition is devoid of merit.
A tenancy relationship, once established, entitles the tenant to a security of tenure.
12 He can only be ejected from the agricultural landholding on grounds provided by law.
This is clearly stated in Section 7 of RA 3844, which provides:
SEC. 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. The agricultural lessee shall be entitled to security of tenure on his
landholding and cannot be ejected therefrom unless authorized by the Court for
causes herein provided.

Section 36 provides the different grounds and manner by which a tenant can be
lawfully ejected or dispossessed of his landholding. One of them is the reclassi cation of
the landholding from agricultural to non-agricultural. For purposes of this petition, the
pertinent provision of said Section 36 reads:

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 SEC. 36. Possession of Landholding; Exceptions. — Notwithstanding any
agreement as to the period or future surrender of the land, an agricultural lessee
shall continue in the enjoyment and possession of his landholding except when
his dispossession has been authorized by the Court in a judgment that is nal
and executory if after due hearing it is shown that:

1. The landholding is declared by the department head upon

recommendation of the National Planning Commission to be suited for
residential, commercial, industrial or some other urban purposes: Provided,
That the agricultural lessee shall be entitled to disturbance compensation
equivalent to ve times the average of the gross harvests on his
landholding during the last five preceding calendar years; . . . .

It is clear that a tenant can be lawfully ejected only if there is a court authorization in
a judgment that is nal and executory and after a hearing where the reclassi cation of the
landholding was duly determined. If the court authorizes the ejectment, the tenant who is
dispossessed of his tenancy is entitled to disturbance compensation.
Petitioners argue that the RARAD decision, which was a rmed by the DARAB, was
the court judgment required by law.
The argument is not well-taken. The RARAD decision is not yet nal and executory. It
was made the subject of a petition for review with the Court of Appeals and is pending
with this Court.
Petitioners likewise contend that the dispossession of the tenant need not be at the
instance of the landowner for him to be entitled to disturbance compensation.
The contention is without merit.
Section 37 13 of RA 3844 expressly imposes on the landowner or agricultural lessor
the burden of proof to show the existence of the grounds enumerated in Section 36
thereof. It is settled that one who alleges a fact has the burden of proving it. 14 This
implies that the action which resulted in the tenant's dispossession was commenced by
the landowner, who therefore has the burden of proof to show the existence of any of the
grounds for the ejectment of the tenant.
Moreover, contrary to petitioners' claim, the reclassi cation of the land is not
enough to entitle them to disturbance compensation. The law is clear that court
proceedings are indispensable where the reclassi cation of the landholding is duly
determined before ejectment can be effected, which in turn paves the way for the payment
of disturbance compensation. As held by the Court of Appeals, the parties can still
continue with their tenurial relationship even after such reclassi cation. In fact, it is
undisputed that in this case, the parties continued with their landlord-tenant relationship
even after the enactment of Metro Manila Zoning Ordinance No. 81-01. It was only in 1994
when this relationship was interrupted because of the dumping of garbage by the
Parañaque City Government. Clearly, it was this latter event which caused petitioner's
dispossession, and it would be unfair to oblige respondent to pay compensation for acts it
did not commit.
Finally, the case of Bunye v. Aquino, 15 does not apply in the instant case. We allowed
the payment of disturbance compensation in the said case because there was an order of
conversion issued by the Department of Agrarian Reform of the landholding from
agricultural to residential. The decree was never questioned and thus became nal.
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 Consequently, the tenants were ejected from the land and were thus awarded disturbance
compensation.
In the case at bar, there is no nal order of conversion. The subject landholding was
merely reclassi ed. Conversion is different from reclassi cation. Conversion is the act of
changing the current use of a piece of agricultural land into some other use as approved by
the Department of Agrarian Reform. 16 Reclassi cation, on the other hand, is the act of
specifying how agricultural lands shall be utilized for non-agricultural uses such as
residential, industrial, commercial, as embodied in the land use plan, subject to the
requirements and procedure for land use conversion. 1 7 Accordingly, a mere
reclassi cation of agricultural land does not automatically allow a landowner to change its
use and thus cause the ejectment of the tenants. He has to undergo the process of
conversion before he is permitted to use the agricultural land for other purposes.
Since in this case, there is neither a nal order of conversion by the DAR nor a court
judgment authorizing the tenants' ejectment on the ground of reclassi cation, as a result
of the landowner's court action, there is no legal basis to make respondent liable to pay
disturbance compensation. Accordingly, the Court of Appeals committed no error in
ordering the dismissal of the complaint before the DARAB. AHECcT

WHEREFORE, in view of the foregoing disquisitions, the instant petition for review is
DENIED and the decision dated September 28, 2001 of the Court of Appeals in CA-G.R. SP
No. 63680, ordering the dismissal of DARAB Case No. 6408 (Reg. Case No. IV-MM-0083-
94), is AFFIRMED.
SO ORDERED.
Davide, Jr., C.J., Vitug, Carpio and Azcuna, JJ., concur.

Footnotes
1. Penned by Associate Justice Buenaventura J. Guerrero; concurred in by Associate
Justices Eriberto V. Rosario, Jr. and Bienvenido L. Reyes.
2. 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. The agricultural
lessee shall be entitled to security of tenure on his landholding and cannot be ejected
therefrom unless authorized by the Court for causes herein provided.
3. SECTION 30(1). Obligations of the Agricultural Lessor. — It shall be the obligation of the
agricultural lessor:
(1) To keep the agricultural lessee in peaceful possession and cultivation of his
landholding; and . . . .
4. SECTION 31(1). Prohibitions to the Agricultural Lessor. — It shall be unlawful for the
agricultural lessor:
(1) To dispossess the agricultural lessee of his landholding except upon
authorization by the Court under Section thirty-six. Should the agricultural lessee be
dispossessed of his landholding without authorization from the Court, the agricultural
lessor shall be liable for damages suffered by the agricultural lessee in addition to the
fine or imprisonment prescribed in this Code for unauthorized dispossession.
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 5. SECTION 36. Possession of Landholding: Exceptions. — Notwithstanding any agreement
as to the period or future surrender of the land, an agricultural lessee shall continue in
the enjoyment and possession of his landholding except when his dispossession has
been authorized by the Court in a judgment that is final and executory if after due
hearing it is shown that:
(1) The landholding is declared by the department head upon recommendation of
the National Planning Commission to be suited for residential, commercial, industrial or
some other urban purposes: Provided, That the agricultural lessee shall be entitled to
disturbance compensation equivalent to five times the average of the gross harvests on
his landholding during the last five preceding calendar years; . . . .

6. CA Rollo, p. 124.
7. Id., at 29.
8. Id., at 8 & 9.
9. Section 76. Repealing Clause. — Section 35 of Republic Act No. 3844, Presidential Decree
No. 316, the last two paragraphs of Section 12 of Presidential Decree No. 946,
Presidential Decree No. 1038, and all other laws, decrees, executive orders, rules and
regulations, issuances or parts thereof inconsistent with this Act are hereby repealed or
amended accordingly.
10. Section 30. Obligations of the Agricultural Lessor. — It shall be the obligation of the
agricultural lessor:
(1) To keep the agricultural lessee in peaceful possession and cultivation of his
landholding; and
(2) To keep intact such permanent and useful improvements existing on the
landholding at the start of the leasehold relation as irrigation and drainage systems and
marketing allotments. . .
11. Section 31. Prohibitions to the Agricultural Lessor. — It shall be unlawful for the
agricultural lessor:
(1) To dispossess the agricultural lessee of his landholding except upon
authorization by the Court under Section thirty-six. Should the agricultural lessee be
dispossessed from his landholding without authorization from the Court, the agricultural
lessor shall be liable for damages suffered by the agricultural lessee in addition to the
fine or imprisonment prescribed in this Code for unauthorized dispossession.
12. Tanpingco v. IAC, G.R. No. 76225, 31 March 1992, 207 SCRA 652.
13. SEC. 37. Burden of Proof. — The burden of proof to show the existence of a lawful
cause for the ejectment of an agricultural lessee shall rest upon the agricultural lessor.
14. Cortes v. CA, G.R. No. 121772, 13 January 2003.
15. G.R. No. 138979, 9 October 2000, 342 SCRA 360.
16. Section 2(k) of DAR Administrative Order No. 01-99, Revised Rules and Regulations on
the Conversion of Agricultural Lands to Non-Agricultural Uses.
17. Section 2(R), DAR Administrative Order No. 01-99, Revised Rules and Regulations on
the Conversion of Agricultural Lands to Non-Agricultural Uses.

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