G.R. No. L-18189, December 29, 1962
Juan Benson, et al., petitioners, vs. Isabelo G. Ocampo, respondent.

FACTS

Respondent Isabelo Ocampo, a landholder, filed a complaint in the Court of Agrarian Relations against his tenants, petitioners herein, for various alleged violations. The charges included clandestinely cutting trees and selling the produce without sharing the proceeds, illegally using land as pasture for animals beyond their own, refusing to give the landholder’s share from vegetable sales, violating crop planting instructions, neglecting fertilizer use, and refusing to flue-cure their tobacco crops in the landholder’s barns. Ocampo sought authority to eject the tenants and requested liquidation of palay deposits.
In their answer, the tenants admitted some allegations, denied others, and specifically prayed for a reliquidation of their shares from the harvests. The agrarian court ordered a reliquidation of the palay crops for the agricultural years 1957, 1958, and 1959 on a 30-70 sharing ratio in favor of the tenants. The court also authorized Ocampo to eject all the tenant-respondents from their landholdings. The tenants sought a review, contending the reliquidation should cover periods earlier than 1957 and that the correct sharing ratio was not applied.

ISSUE

The primary issues were: (1) whether the tenants were entitled to a reliquidation of shares starting from 1954, when their tenancy began, rather than only from 1957; and (2) whether the correct sharing ratio for the liquidation was 25-75 in favor of the tenants instead of 30-70.

RULING

The Supreme Court modified the decision of the agrarian court. On the first issue, the Court held that the tenants were entitled to a reliquidation beginning from 1954. The lower court limited the reliquidation to 1957-1959, relying on Section 17 of Republic Act No. 1199 , which allows a tenant to petition for a written accounting within three years from threshing. The Supreme Court clarified that a demand for a written accounting is distinct from a judicial action for reliquidation. A reliquidation is a judicial determination of the correct shares based on established facts, not merely a compulsion for the landholder to render a statement. Furthermore, since the landholder himself also prayed for a liquidation in his complaint, he was deemed to have waived any defense based on the three-year period for accounting.
On the second issue, the Court found the tenants’ contention correct. The land was classified as second-class land, producing less than forty cavans of palay per hectare. Pursuant to Section 33 of Republic Act No. 1199 , as amended, the legal share for such land is 25% for the landholder and 75% for the tenant. The respondent landholder admitted this. Therefore, the reliquidation must be based on a 25-75 sharing ratio in favor of the petitioners. The Supreme Court affirmed the agrarian court’s factual findings, supported by substantial evidence, that the tenants were guilty of the charged irregularities, thus sustaining the order for their ejectment. The dispositive portion was modified accordingly.