G.R. No. 71217 August 30, 1990
PACITA A. OLANDAY, MARIA A. ARELLANO and NATIVIDAD A. CRUZ, petitioners, vs. INTERMEDIATE APPELLATE COURT and MOISES FARNACIO, respondents.

FACTS

Petitioners Pacita A. Olanday, Maria A. Arellano, and Natividad A. Cruz are the owners of a fishpond in Dagupan City. They leased the fishpond to Cipriano Tandoc from February 1978 to February 1984. Private respondent Moises Farnacio was instituted by Tandoc as the caretaker-tenant of the fishpond in 1978. Farnacio performed all phases of work, such as repairing dikes, constructing improvements, planting algae, and applying fertilizer. He also shouldered the costs of fingerlings, chemicals, and fertilizer. The sharing arrangement between Tandoc and Farnacio was on a 50-50 basis after deducting lease rentals, labor wages, and other expenses.
Upon the expiration of Tandoc’s lease contract, the petitioners sought to eject Farnacio from the fishpond. Farnacio filed an action in the Regional Trial Court of Dagupan City to be declared a tenant with security of tenure. The trial court ruled in his favor, declaring him a tenant-caretaker and ordering the petitioners to maintain him in peaceful possession. The Intermediate Appellate Court affirmed this decision, with a modification regarding the payment of a share of proceeds.

ISSUE

The core issue is whether Moises Farnacio, as a tenant of the lessee Cipriano Tandoc, retains security of tenure over the fishpond upon the expiration of the lease contract between Tandoc and the landowner-petitioners.

RULING

The Supreme Court denied the petition and affirmed the Appellate Court’s decision. The legal logic is anchored on the principle of security of tenure for agricultural tenants, which extends to fishpond cultivation. The Court held that the termination of the lease contract between the landowner and the original lessee does not automatically extinguish the tenancy relationship of the tenant instituted by the lessee.
The Appellate Court’s factual finding that Farnacio was a bona fide tenant, based on substantial evidence including his testimony and that of witnesses detailing his work and sharing arrangement, is binding on the Supreme Court. On the legal question, the Court ruled consistently with established jurisprudence, particularly Ponce v. Guevarra and Joya v. Pareja. These cases establish that a tenant of a lessee acquires a legal right to remain on the landholding even after the lessor-lessee relationship ends. This right is derived from Section 9 of Republic Act No. 1199 (The Agricultural Tenancy Act), as amended, which protects tenants from ejectment except for specific causes determined by judicial authority. The return of the land from the lessee to the lessor involves a transfer of legal possession, but it does not divest the tenant of the right to continue cultivation.
The Court distinguished the inapplicable cases cited by petitioners. Sanchez v. Court of Appeals involved mere hired laborers, not share tenants. Rosello v. Reyes concerned a tenant who had abandoned his landholding, a factually distinct situation. Therefore, Farnacio’s tenancy rights survived the termination of Tandoc’s lease, and he cannot be ejected without a judicial order for a cause specified by law.