Cordero v. Court of Agrarian Relations
REITERATIONFacts
1. The Antecedents: For approximately ten years prior to 1964, the petitioners were share tenants of the respondent. In April 1964, they entered into contracts of leasehold tenancy. A key provision, paragraph 6, stipulated that the lessees (petitioners) would use the lessor's (respondent's) threshing machine and pay a specific share of the threshed palay as compensation. In February 1965, the petitioners threshed their palay using a machine belonging to a third party, asserting that paragraph 6 of their contract was contrary to law. This led the respondent to file an ejectment case against them. 2. Procedural History: The respondent initiated CAR Case No. 1132-Bulacan '65 against the petitioners for ejectment and damages. The parties entered into a partial stipulation of facts, acknowledging the leasehold contracts and the petitioners' failure to use the respondent's threshing machine as stipulated. On February 8, 1966, the Court of Agrarian Relations (CAR) ruled that the petitioners had violated their contract but found the violation to be due to a misapprehension of their rights, warning against future violations. The CAR declared the contested stipulation valid. The petitioners appealed this decision. 3. The Petition: The petitioners seek a review on certiorari of the CAR's decision. They argue that paragraph 6 of the leasehold contracts, which mandates the use of the respondent's threshing machine, is contrary to law, specifically Section 15 of Republic Act No. 3844. This section prohibits leasehold contracts from imposing conditions that require the agricultural lessee to rent farm implements from the agricultural lessor or a third party. The petitioners contend that this stipulation was imposed upon them as a condition for the leasehold agreement, thereby contravening the spirit and letter of the law. They seek to have this stipulation declared null and void and the CAR's decision reversed.
Issue(s)
Whether paragraph 6 of the leasehold contracts, requiring the use of the lessor's threshing machine, is a valid stipulation under Republic Act No. 3844. Whether the petitioners' failure to use the respondent's threshing machine constituted a violation of the leasehold contract justifying ejectment.
Ruling
The Supreme Court reversed the decision of the Court of Agrarian Relations. It declared paragraph 6 of the leasehold contracts null and void as it was an imposed condition contrary to Section 15 of Republic Act No. 3844. Consequently, the petitioners' failure to use the respondent's threshing machine did not constitute a breach of contract, and the writ of preliminary injunction was made permanent. The Court ordered that no ejectment or damages be awarded against the petitioners.
Ratio Decidendi
On Issue 1: The Court held that paragraph 6 of the leasehold contracts was a condition imposed upon the lessees, requiring them to rent a farm implement (the threshing machine) from the lessor. This stipulation falls squarely within the prohibition of Section 15(3)(a) of Republic Act No. 3844, which declares as contrary to law, morals, or public policy any condition that requires the agricultural lessee to hire farm implements from the agricultural lessor or a third person. The voluntariness of the contract's execution, even with legal assistance, does not negate the fact that this obligation was a prerequisite for the lessor's consent to the leasehold agreement, thereby making it an imposed condition. The Court emphasized that the spirit of the Act, which aims to establish agricultural leasehold relations, would be contravened if such impositions were allowed. Therefore, the stipulation was deemed null and void. On Issue 2: Since paragraph 6 of the leasehold contracts was declared null and void, the petitioners' act of threshing their palay using a machine other than the respondent's did not constitute a violation of their contractual obligations. As the stipulation was void from the beginning, there was no lawful basis for the respondent to demand compliance with it or to claim damages or ejectment based on its breach. The Court noted that the CAR's finding of a violation was based on the premise that the contract was valid, which the Supreme Court overturned. Therefore, the petitioners' actions did not provide a sufficient ground for ejectment or damages as prayed for by the respondent.
Main Doctrine
The Court held that paragraph 6 of the leasehold contracts, which mandated the use of the lessor's threshing machine and stipulated a specific sharing of the threshed palay as compensation, was a condition imposed upon the lessees that contravened Section 15 of Republic Act No. 3844. This section explicitly prohibits conditions requiring the agricultural lessee to hire farm implements from the agricultural lessor or a third person. Despite the contracts being voluntarily entered into with the assistance of counsel, the Court found that the stipulation was a prerequisite for the lessor's consent to the leasehold agreement, thus making it an imposed condition and rendering it void. Consequently, the lessees' failure to use the lessor's threshing machine did not constitute a violation of the contract justifying ejectment.