FACTS:

Flora Makapugay (Makapugay) is the owner of a farm in  Malolos, Bulacan being tilled by Eugenio Caparas (Eugenio) as agricultural lessee under a leasehold agreement. Makapugay passed away and was succeeded by her nephews and niece, namely Amanda dela Paz-Perlas (Amanda), Justo dela Paz (Justo) and Augusto dela Paz (Augusto). On the other hand, Eugenio’s children — Modesta Garcia (Garcia), Cristina Salamat (Salamat) and Pedro — succeeded him.

Before she passed away, Makapugay appointed Amanda as her attorney-in-fact. After Eugenio died, Amanda and Pedro entered into an agreement entitled “Kasunduan sa Buwisan”,followed by an Agricultural Leasehold Contract, covering the land. In said agreements, Pedro was installed and recognized as the lone agricultural lessee and cultivator of the land. SETaHC

Pedro passed away in 1984, and his wife, herein respondent Dominga Robles Vda. de Caparas (Dominga), took over as agricultural lessee.

On July 10, 1996, the landowners Amanda, Justo and Augusto, on the one hand, and Pedro’s sisters Garcia and Salamat on the other, entered into a “Kasunduan sa Buwisan ng Lupa” whereby Garcia and Salamat were acknowledged as Pedro’s co-lessees.

On October 24, 1996, herein petitioners Garcia and Salamat filed a Complaint for nullification of leasehold and restoration of rights as agricultural lessees against Pedro’s heirs, represented by his surviving spouse and herein respondent Dominga. 

In their Complaint, Garcia and Salamat claimed that when their father Eugenio died, they entered into an agreement with their brother Pedro that they would alternately farm the land on a “per-season basis”; that the landowner Makapugay knew of this agreement; that when Makapugay passed away, Pedro reneged on their agreement and cultivated the land all by himself, deliberately excluding them and misrepresenting to Amanda that he is Eugenio’s sole heir; that as a result, Amanda was deceived into installing him as sole agricultural lessee in their 1979 Agricultural Leasehold Contract; that when Amanda learned of Pedro’s misrepresentations, she executed on July 10, 1996 an Affidavit stating among others that Pedro assured her that he would not deprive Garcia and Salamat of their “cultivatory rights”; that in order to correct matters, Amanda, Justo and Augusto executed in their favor the 1996 “Kasunduan sa Buwisan ng Lupa”, recognizing them as Pedro’s co-lessees; that when Pedro passed away, Dominga took over the land and, despite demands, continued to deprive them of their rights as co-lessees; that efforts to settle their controversy proved futile, prompting the Barangay Agrarian Reform Committee to issue the proper certification authorizing the filing of a case; and that they suffered damages as a consequence. 

In her Answer, respondent Dominga claimed that when her father-in-law Eugenio died, only her husband Pedro succeeded and cultivated the land, and that petitioners never assisted him in farming the land; that Pedro is the sole agricultural lessee of the land; that Amanda’s July 10, 1996 Affidavit and “Kasunduan sa Buwisan ng Lupa” of even date between her and the petitioners are self-serving and violate the existing 1979 Agricultural Leasehold Contract; that under Section 38 RA 3844, petitioners’ cause of action has prescribed. Dominga further claimed that Pedro has been in possession of the land even while Eugenio lived; that petitioners have never cultivated nor possessed the land even for a single cropping; that Pedro has been the one paying the lease rentals as evidenced by receipts; that when Pedro died in 1984, she succeeded in his rights as lessee by operation of law, and that she had been remitting lease rentals to the landowners since 1985; and that petitioners had no right to institute themselves as her co-lessees. 

The Provincial Agrarian Reform Adjudicator (PARAD) held that Amanda’s act of executing the July 10, 1996 Affidavit and “Kasunduan sa Buwisan ng Lupa” amounted to dispossession of Pedro’s landholding and rights without cause; that for failure to timely question Pedro’s leasehold, his rights were transferred, by operation of law, to Dominga upon his death. Finally, the PARAD held that petitioners’ July 10, 1996 “Kasunduan sa Buwisan ng Lupa” is null and void.

It appears that sometime after the execution of the July 10, 1996 “Kasunduan sa Buwisan ng Lupa” and during the pendency of the case, petitioners entered the land and began tilling the same. For this reason, Dominga filed a Department of Agrarian Reform Adjudication Board||| (DARAB) Case for maintenance of peaceful possession with injunctive relief, against the landowners and petitioners. On petitioners’ motion, the case was dismissed.

DARAB upheld PARAD’s decision. Petitioners filed before the CA a Petition for Certiorari, which was denied. Petitioners moved for reconsideration, which was likewise denied. Hence, the present petition. 

ISSUE:

W/N he alleged admission of the deceased Pedro Caparas (Pedro) that he entered into a sharing of leasehold lights with the petitioners can be used as evidence against herein respondent

HELD:

NO. Pedro allegedly told her that “he and his two sisters had an understanding about it and he did not have the intention of depriving them of their cultivatory rights.” Petitioners have no other evidence, other than such verbal declaration, which proves the existence of such arrangement. No written memorandum of such agreement exists, nor have they shown that they actually cultivated the land even if only for one cropping. No receipt evidencing payment to the landowners of the latter’s share, or any other documentary evidence, has been put forward.

What the PARAD, DARAB and CA failed to consider and realize is that Amanda’s declaration in her Affidavit covering Pedro’s alleged admission and recognition of the alternate farming scheme is inadmissible for being a violation of the Dead Man’s Statute, which provides that “[i]f one party to the alleged transaction is precluded from testifying by death, insanity, or other mental disabilities, the other party is not entitled to the undue advantage of giving his own uncontradicted and unexplained account of the transaction.” 30 Thus, since Pedro is deceased, and Amanda’s declaration which pertains to the leasehold agreement affects the 1996 “Kasunduan sa Buwisan ng Lupa” which she as assignor entered into with petitioners, and which is now the subject matter of the present case and claim against Pedro’s surviving spouse and lawful successor-in-interest Dominga, such declaration cannot be admitted and used against the latter, who is placed in an unfair situation by reason of her being unable to contradict or disprove such declaration as a result of her husband-declarant Pedro’s prior death.

If petitioners earnestly believed that they had a right, under their supposed mutual agreement with Pedro, to cultivate the land under an alternate farming scheme, then they should have confronted Pedro or sought an audience with Amanda to discuss the possibility of their institution as co-lessees of the land; and they should have done so soon after the passing away of their father Eugenio. However, it was only in 1996, or 17 years after Pedro was installed as tenant in 1979 and long after his death in 1984, that they came forward to question Pedro’s succession to the leasehold. As correctly held by the PARAD, petitioners slept on their rights, and are thus precluded from questioning Pedro’s 1979 agricultural leasehold contract. 

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