THIRD DIVISION

[G.R. No. 88113. October 23, 1992.]

SPOUSES TITUS L. ENDAYA and GLENDA TRINIDAD;

SPOUSES RICO L. ENDAYA and NANETTE AQUINO; and
SPOUSES JOSEPHINE L. ENDAYA and LEANDRO BANTUG,
petitioners, vs. COURT OF APPEALS and PEDRO FIDELI,
respondents.

Alfredo L. Endaya for petitioners.

SYLLABUS

1. LABOR LAWS; TENANCY; EFFECTS OF ABOLITION OF SHARE

TENANCY AND ESTABLISHMENT OF AGRICULTURAL LEASEHOLD. — R.A. No.
3844 (1963), as amended by R.A. No. 6839 (1971), which is the relevant law
governing the events at hand, abolished share tenancy throughout the
Philippines from 1971 and established the agricultural leasehold system by
operation of law. Section 7 of the said law gave agricultural lessees security
of tenure by providing the following: "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."
2. ID.; ID.; ID.; CIVIL LEASE CONTRACT GRANTING AUTHORITY TO
LESSEE TO OVERSEE FARMING DOES NOT EXTINGUISH LEASEHOLD
RELATION. — The fact that the landowner entered into a civil lease contract
over the subject landholding and gave the lessee the authority to oversee
the farming of the land, as was done in this case, is not among the causes
provided by law for the extinguishment of the agricultural leasehold relation.
[Sec. 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."] Hence,
transactions involving the agricultural land over which an agricultural
leasehold subsists resulting in change of ownership, e.g., sale, or transfer of
legal possession, such as lease, will not terminate the rights of the
agricultural lessee who is given protection by the law by making such rights
enforceable against the transferee or the landowner's successor in interest.
3. ID.; ID.; ID.; ID.; FACT THAT AGRICULTURAL LESSEE CONSENTED
NOT A WAIVER OF HIS RIGHT AS SUCH; CASE AT BAR. — The fact that private
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 respondent knew of, and consented to, the said lease contract by signing as
witness to the agreement may not be construed as a waiver of his rights as
an agricultural lessee. On the contrary, it was his right to know about the
lease contract since, as a result of the agreement, he had to deal with a new
person instead of with the owners directly as he used to. No provision may
be found in the lease contract and the renewal contract even intimating that
private respondent has waived his rights as an agricultural lessee.
4. ID.; ID.; ID.; AGRICULTURAL LESSEE NOT CREATED WITHOUT
OWNER'S CONSENT; RULE NOT APPLICABLE IN THE CASE AT BAR. — It is true
that the Court has ruled that agricultural tenancy is not created where the
consent of the true and lawful owners is absent. But this doctrine
contemplates a situation where an untenanted farm land is cultivated
without the landowner's knowledge or against her will or although
permission to work on the farm was given, there was no intention to
constitute the worker as the agricultural lessee of the farm land. The rule
finds no application in the case at bar where the petitioners are successors-
in-interest to a tenanted land over which an agricultural leasehold has long
been established. The consent given by the original owners to constitute
private respondent as the agricultural lessee of the subject landholding binds
private respondents who, as successors-in-interest of the Spouses San
Diego, step into the latter's shoes, acquiring not only their rights but also
their obligations.
5. REMEDIAL LAW; PLEADINGS AND PRACTICE; ISSUES NOT RAISED
IN TRIAL COURT CANNOT BE RAISED FOR FIRST TIME ON APPEAL. — The
Court, observes that nowhere in the petitioners' Answer to private
respondent's Complaint or in the other pleadings filed before the trial court
did petitioners allege grounds for the termination of the agricultural
leasehold. Well-settled is the rule that issues not raised in the trial court
cannot be raised for the first time on appeal.

DECISION

ROMERO, J : p

Assailed in this petition for review on certiorari is the decision of the

Court of Appeals in CA-G.R. No. 15724 dated April 26, 1989 1 reversing the
judgment of the Regional Trial Court of Tanauan, Batangas (Branch 6) in Civil
Case No. T-430 2 and holding that private respondent is an agricultural
lessee in the land of petitioner whose security of tenure must be respected
by the latter.
The antecedent facts are as follows:
The Spouses Natividad Trinidad and Cesar San Diego owned a piece of
agricultural land consisting of 20,200 square meters situated at San
Pioquinto, Malvar, Batangas, devoted to rice and corn. As far back as 1934,
private respondent Fideli has been cultivating this land as a tenant of the
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 Spouses San Diego under a fifty-fifty (50-50) sharing agreement. This fact,
petitioners do not dispute. prcd

On May 2, 1974, a lease contract was executed between the Spouses

San Diego and one Regino Cassanova for a period of four years from May
1974 up to May 1978. 3 The lease contract obliged Cassanova to pay
P400.00 per hectare per annum and gave him the authority to oversee the
planting of crops on the land. 4 Private respondent signed this lease contract
as one of two witnesses. 5
The lease contract was subsequently renewed to last until May 1980
but the rental was raised to P600.00. Again, private respondent signed the
contract as witness. 6
During the entire duration of the lease contract between the Spouses
San Diego and Cassanova, private respondent continuously cultivated the
land, sharing equally with Cassanova the net produce of the harvests.
On January 6, 1980, the Spouses San Diego sold the land to petitioners
for the sum or P26,000.00. The sale was registered with the Register of
Deeds of Batangas and a Transfer Certificate of Title was duly issued on
January 7, 1981. 7 Private respondent continued to farm the land although
petitioners claim that private respondent was told immediately after the sale
to vacate the land. 8 In any case, it is undisputed that private respondent
deposited with the Luzon Development Bank an amount of about P8,000.00
as partial payment of the landowner's share in the harvests for the years
1980 until 1985. 9
Due to petitioners' persistent demand for private respondent to vacate
the land, private respondent filed in April 1985 a complaint 10 with the
Regional Trial Court of Tanauan, Batangas praying that he be declared the
agricultural tenant of petitioners.
After trial, the trial court decided in favor of petitioners by holding that
private respondent is not an agricultural lessee of the land now owned by
petitioners. The dispositive portion of the RTC decision reads:
"WHEREFORE, judgment is hereby rendered dismissing plaintiff's
complaint to be declared a tenant of the landholding consisting of
20,200 square meters, located at San Pioquinto, Malvar, Batangas, and
owned by the defendants; ordering Pedro Fideli to vacate the
landholding and deliver possession thereof to the defendants; and
ordering the amount of P8,000.00 deposited under Account No.
2940029826 Civil Case No. T-430 to be withdrawn and delivered to the
defendants. No pronouncement as to costs."

On appeal, the Court of Appeals reversed the RTC decision and

declared private respondent to be the agricultural lessee of the subject
landholding. Hence, this petition wherein private respondent's status as an
agricultural lessee and his security of tenure as such are being disputed by
petitioners. LexLib

Petitioners impugn the Court of Appeals' declaration that private

respondent is an agricultural lessee of the subject landholding contending
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 that when the original landowners, the Spouses San Diego, entered into a
lease contract with Regino Cassanova, the agricultural leasehold relationship
between the Spouses San Diego and private respondent, the existence of
which petitioners do not dispute, was thereby terminated. Petitioners argue
that a landowner cannot have a civil law lease contract with one person and
at the same time have an agricultural leasehold agreement with another
over the same land. It is further argued that because private respondent
consented to the lease contract between the Spouses San Diego and
Cassanova, signing as he did the lease agreement and the renewal contract
as witness thereof, private respondent has waived his rights as an
agricultural lessee.
These contentions are without merit.
R.A. No. 3844 (1963), as amended by R.A. No. 6839 (1971), which is
the relevant law governing the events at hand, abolished share tenancy
throughout the Philippines from 1971 and established the agricultural
leasehold system by operation of law. 11 Section 7 of the said law gave
agricultural lessees security of tenure by providing the following: "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." 12
The fact that the landowner entered into a civil lease contract over the
subject landholding and gave the lessee the authority to oversee the farming
of the land, as was done in this case, is not among the causes provided by
law for the extinguishment of the agricultural leasehold relation. 13 On the
contrary, Section 10 of the law provides:

"SECTION 10. Agricultural Leasehold Relation Not Extinguished by

Expiration of Period, etc . — The agricultural leasehold relation under
this code shall not be extinguished by mere expiration of the term or
period in a leasehold contract nor by the sale, alienation or transfer of
the legal possession of the landholding. In case the agricultural lessor
sells, alienates or transfers the legal possession of the landholding, the
purchaser or transferee thereof shall be subrogated to the rights and
substituted to the obligations of the agricultural lessor."

Hence, transactions involving the agricultural land over which an

agricultural leasehold subsists resulting in change of ownership, e.g., sale, or
transfer of legal possession, such as lease, will not terminate the rights of
the agricultural lessee who is given protection by the law by making such
rights enforceable against the transferee or the landowner's successor in
interest. 14
Illustrative of the legal principles outlined above is Catorce v. Court of
Appeals 15 where the person holding a mortgage over the farm land subject
of an agricultural leasehold took possession thereof pursuant to the
mortgage and ousted the agricultural lessee. Upon complaint for
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 reinstatement filed by the agricultural lessee, the then Court of Agrarian
Relations ordered the mortgagee to deliver possession over the land to the
agricultural lessee but this decision was reversed by the Court of Appeals. In
reversing the Court of Appeals' judgment and reinstating the Agrarian
Court's decision, the Court, through Justice Melencio-Herrera, noted, among
other considerations, that "tenants are guaranteed security of tenure,
meaning, the continued enjoyment and possession of their landholding
except when their dispossession had been authorized by virtue of a final and
executory judgment, which is not so in the case at bar." 16 Implicit in the
decision is the recognition that the transfer of possession to the mortgagee
did not terminate the agricultural leasehold nor prejudice the security of
tenure of the agricultural lessee. cdphil

Closer to, although not identical with the factual setting of the case at
bar is Novesteras v. Court of Appeals. 1 7 Petitioner in said case was a share
tenant of the respondent over two parcels of land. Respondent entered into
a contract of civil lease with Rosendo Porculas for a term of three years.
Porculas did not farm the land himself but left it to petitioner to till the land.
After the expiration of the lease between respondent and Porculas, petitioner
entered into an agreement denominated as a contract of civil lease with
respondent. On expiration of this lease contract, respondent denied
petitioner possession over the land. Resolving the rights and obligations of
the parties, the Court, through Justice Paras, held that the petitioner therein
became an agricultural tenant of respondent by virtue of R.A. No. 3844
(1963), as amended by R.A. No. 6839 (1971). The lease contract between
the respondent and Porculas did not terminate the agricultural leasehold
relationship between petitioner and respondent. If at all, the said lease
agreement, coupled by the fact that Porculas allowed petitioner to continue
cultivating in his capacity as tenant of the subject landholding, served to
strengthen petitioner's security of tenure as an agricultural tenant of the
farmland in question. Accordingly, the subsequent contract between
petitioner and respondent denominated as a contract of civil lease was held
by the Court to be in fact an agricultural leasehold agreement.
Again, in Coconut Cooperative Marketing Association, Inc. (COCOMA) v.
Court of Appeals, 18 it was held that the agricultural leasehold is preserved,
notwithstanding the transfer of the legal possession of the subject
landholding, with the transferee, COCOMA in that case, being accountable to
the agricultural lessees for their rights. The Court, through Justice Padilla,
summarized the rule as follows:
"There is also no question that, in this case, there was a transfer of the
legal possession of the land from one landholder to another (Fule to
petitioner COCOMA). In connection therewith, Republic Act 3344, Sec.
10 states:
'SECTION 10. Agricultural Leasehold Relation Not
Extinguished by Expiration of Period, etc . — The agricultural
leasehold relation under this Code shall not be extinguished by
mere expiration of the term or period in a leasehold contract nor
by the sale, alienation or transfer of the legal possession of the
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 landholding. In case the agricultural lessor sells, alienates or
transfers the legal possession of the landholdings, the purchaser
or transferee thereof shall be subrogated to the rights and
substituted to the obligations of the agricultural lessor.'

Further, in several cases, this Court sustained the preservation of the

landholder-tenant relationship, in cases of transfer of legal possession:

'. . . in case of transfer or in case of lease, as in the instant

case, the tenancy relationship between the landowner and his
tenant should be preserved in order to insure the well-being of
the tenant or protect him from being unjustly dispossessed by
the transferee or purchaser of the land; in other words, the
purpose of the law in question is to maintain the tenants in the
peaceful possession and cultivation of the land or afford them
protection against unjustified dismissal from their holdings.'
(Primero v. CAR, 101 Phil. 675);
'It is our considered judgment, since the return by the
lessee of the leased property to the lessor upon the expiration of
the contract involves also a transfer of legal possession, and
taking into account the manifest intent of the lawmaking body in
amending the law, i.e., to provide the tenant with security of
tenure in all cases of transfer of legal possession, that the instant
case falls within and is governed by the provisions of Section 9 of
Republic Act 1199, as amended by Republic Act 2263.' (Joya v.
Pareja, 106 Phil. 645).
'. . . that the tenant may proceed against the transferee of
the land to enforce obligation incurred by the former landholder
in relation to said land, for the reason that such obligation.. falls
upon the assignee or transferee of the land pursuant to Sec. 9
abovementioned. Since respondents are in turn free to proceed
against the former landholder for reimbursement, it is not
iniquitous to hold them responsible to the tenant for said
obligations. Moreover, it is the purpose of Republic Act 1198,
particularly Sec. 8 thereof, to insure that the right of the tenant
to receive his lawful share of the produce of the land is
unhampered by the transfer of said land from one landholder to
another.' (Almarinez v. Potenciano, 120 Phil. 1154.)." 19

In the instant case, private respondent has been cultivating the subject
farm landholding with a fifty-fifty (50-50) sharing arrangement with the
Spouses San Diego, petitioners' predecessors-in-interest. The passage of
R.A. 6839 in 1971, amending R.A. 3844 (1963), secured to private
respondent all the rights pertaining to an agricultural lessee. The execution
of a lease agreement between the Spouses San Diego and Regino Cassanova
in 1974 did not terminate private respondent's status as an agricultural
lessee. The fact that private respondent knew of, and consented to, the said
lease contract by signing as witness to the agreement may not be construed
as a waiver of his rights as an agricultural lessee. On the contrary, it was his
right to know about the lease contract since, as a result of the agreement,
he had to deal with a new person instead of with the owners directly as he
used to. No provision may be found in the lease contract and the renewal
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 contract even intimating that private respondent has waived his rights as an
agricultural lessee. Militating against petitioners' theory that the agricultural
leasehold was terminated or waived upon the execution of the lease
agreement between the San Diegos and Cassanova is the fact that the latter
desisted from personally cultivating the land but left it to private respondent
to undertake the farming, the produce of the land being shared between
Cassanova and private respondent, while the former paid P400.00 and later
P600.00 per hectare per annum to the San Diegos, as agreed upon in the
lease contract. prcd

Petitioners, however, insist that private respondent can no longer be

considered the agricultural lessee of their farm land because after they
purchased the land from the Spouses San Diego in 1980, private respondent
did not secure their permission to cultivate the land as agricultural lessee.
It is true that the Court has ruled that agricultural tenancy is not
created where the consent of the true and lawful owners is absent. 20 But
this doctrine contemplates a situation where an untenanted farm land is
cultivated without the landowner's knowledge or against her will or although
permission to work on the farm was given, there was no intention to
constitute the worker as the agricultural lessee of the farm land. 21 The rule
finds no application in the case at bar where the petitioners are successors-
in-interest to a tenanted land over which an agricultural leasehold has long
been established. The consent given by the original owners to constitute
private respondent as the agricultural lessee of the subject landholding binds
private respondents who, as successors-in-interest of the Spouses San
Diego, step into the latter's shoes, acquiring not only their rights but also
their obligations. 22
Contradicting their position that no agricultural leasehold exists over
the land they acquired from the Spouses San Diego, petitioners also pray for
the termination of the tenancy of private respondent allegedly due to: (a)
non-payment of the agricultural lease rental; and (b) animosity between the
landowners and the agricultural lessee. The Court, however, observes that
nowhere in the petitioners' answer to private respondent's Complaint or in
the other pleadings filed before the trial court did petitioners allege grounds
for the termination of the agricultural leasehold. Well-settled is the rule that
issues not raised in the trial court cannot be raised for the first time on
appeal. 23
In fine, the Court, after a painstaking examination of the entire records
of the case and taking into account the applicable law, as well as the
relevant jurisprudence, rules that private respondent is the agricultural
lessee over the land owned by petitioners. As such, private respondent's
security of tenure must be respected by petitioners.
The Court, however, notes from the records of the case that private
respondent has unilaterally decided to pay only 25% of the net harvests to
petitioners. 24 Since the agreement of private respondent with the Spouses
San Diego, the original owners, was for a fifty-fifty (50-50) sharing of the net
produce of the land, the same sharing agreement should be maintained
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 between petitioners and private respondent, without prejudice to a
renegotiation of the terms of the leasehold agreement.
WHEREFORE, premises considered, the petition is DISMISSED and the
decision of the Court of Appeals AFFIRMED. Private respondent is hereby
ordered to pay the back rentals from 1980 until 1992 plus interest at the
legal rate. An accounting of the production of the subject landholding is to be
made by private respondent to the Regional Trial Court of Tanauan,
Batangas which shall determine the account due to petitioners based on the
rate ordered above. LibLex

SO ORDERED.
Gutierrez, Jr., Bidin, Davide, Jr. and Melo, JJ ., concur.

Footnotes

1. Penned by Associate Justice Alfredo M. Marigomen with the concurrence of

Associate Justices Josue N. Bellosillo and Alicia V. Sempio-Diy.

2. Penned by Judge Flordelis Ozaeta Navarro.

3. Annex "D" to the Petition; Rollo, p. 39.
4. Ibid.
5. Rollo, p. 40.
6. Annex "E" to the Petition; Rollo, p. 41.

7. Annex "A" to the Petition; Rollo, p. 33.

8. Petition, p. 3; Rollo, p. 8.
9. Annex "J" to the Petition; Rollo, p. 66.
10. Annex "F" to the Petition; Rollo, p. 42.
11. Sections 4 and 5 of R.A. No. 3844 (1963), as amended by R.A. No. 6839
(1971), provide:
"Sec. 4. Abolition of Agricultural Share Tenancy. — Agricultural share
tenancy, as herein defined, is hereby declared to be contrary to public policy
and shall be abolished . . ."
"Sec. 5. Establishment of Agricultural Leasehold Relation. — The
agricultural leasehold relation shall be established by operation of law in
accordance with Section four of this Code, in other cases, either orally or in
writing, expressly or impliedly."
12. The latest agrarian reform law, R.A. No. 6657 (1988), otherwise known as
the Comprehensive Agrarian Reform Law of 1988, provides for the
continuation and maintenance of the right to security of tenure of agricultural
lessees acquired prior to the passage of the law. Section 6, paragraph 3 of
the Act provides: "In all cases, the security of tenure of the farmers or
farmworkers on the land prior to the approval of this Act shall be respected."

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 13. Section 8 of R.A. No. 3844, as amended, provides:
"Sec. 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."

14. See Tanalgo v. Court of Appeals, G.R. No. L-34508, April 30, 1980, 97 SCRA
421. See also Primero v. CAR, 101 Phil. 675 (1957).

15. G.R. No. L-59762, May 11, 1984, 129 SCRA 210.
16. Id., at 215. Citations omitted.
17. G.R. No. L-36654, March 31, 1987, 149 SCRA 47.
18. G.R. Nos. L-46281-83, August 19, 1988, 164 SCRA 568.
19. Id., at 584-585.
20. Berenguer v. Court of Appeals, G.R. Nos. L-60287, August 17, 1988, 164
SCRA 431.

21. For an illustration of the last mentioned situation, see Tuazon v. Court of
Appeals, G.R. Nos. L-60287, August 17, 1988, 164 SCRA 431.

22. Tanalgo v. Court of Appeals, supra, note 14.

23. Matienzo v. Servidad, G.R. No. 28135, September 10, 1981, 107 SCRA 276;
Reparations Commission v. Visayan Packing Corporation, G.R. No. 30712,
February 6, 1991, 193 SCRA 531.
24. RTC Decision, p. 6; Rollo, p. 105.

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