TWELFTH DIVISION

[CA-G.R. CV Case No. 34730.  November 22, 1995.]

JOSE L. ORO, JANET ORO-CAMARISTA, accompanied by her husband Whilhelm Camarista, JULIO ORO and CONCEPCION ORO, plaintiff-appellees, vs. NILO ALARBA, RUDY ALARBA, NICANOR ALARBA, EFREN EDAÑO, BIBINO ALARBA, JERRY EDAÑO, EMILY EDAÑO, DIOSDADO SUMAGAYSAY, HERNANI BABAO, JOSE SUMAGAYSAY, LEONARDO ALARBA, NEMIA PANERIO, ROMEO LOKING, JULIE CABALLERO, MELENIO EDAÑO, JR., MELCHOR, EDAÑO and ESPERANZA EDAÑO, defendant-appellants.

D E C I S I O N

ELBINIAS, J p:

This treats of an appeal from a Decision of the Regional Trial Court, Branch 24, Iloilo City, in Civil Case 18709, the decretal portion of which reads as follows:

"WHEREFORE, premises considered, judgement is hereby rendered in favor of plaintiffs and against defendants, ordering the latter —

1.      To vacate portions of lots 1676, 1685, and 6207 occupied respectively by them and deliver possession thereof to plaintiffs;

2.      To pay plaintiffs, jointly and severally, the sum of P5,000.00 as attorneys fees; and

3.      To pay plaintiffs the sum of P3,000.00 representing expenses in instituting this suit.

Costs against defendants.

SO ORDERED."

The facts of the case are as follows.

The plaintiffs-appellees are the undivided co-owners in unequal shares over Lot nos. 167, 165, 6207 and covered by Transfer Certificates of Titles Nos. T-95721, 95722, 95719 of the Register of Deeds of Iloilo Province and situated at Barangay Arigmis, San Enrique Iloilo; while defendants as their farm workers or laborers were given permission to enter the land between the years 1975 and 1980 by the hacienda overseer Alejandro Aguacito on condition that aside from plowing the field, applying fertilizer, weeding, cutting and hauling of cane, they would vacate the land upon demand by plaintiff-appellees. The land ceased to be planted to sugarcane in 1980 and to augment the workers' income they pleaded to the owner to allow them to plant rice and corn (TSN, Jan. 22, 1991, p. 4). Presently the land was leased by Silverio Chavez and Prudencio Hofilena, but the property owners, as lessors, have difficulty in collecting rentals due to the occupation by defendants of the premises who, despite demands made upon them, refused to vacate and surrender the land, claiming they are tenants and beneficiaries thereof pursuant to Republic Act 6657 or the Comprehensive Agrarian Reform Program.

The decision a quo being adverse, these tenants, herein appellants, come to us on appeal, assigning the following errors, to wit:

"I

THE LOWER COURT ERRED IN NOT APPRECIATING EVIDENCE OF TENANCY OF DEFENDANTS

II

THE LOWER COURT ERRED IN PROCEEDING TO HEAR THE CASE DESPITE EVIDENCE OF TENANCY

III

THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFFS ARE ENTITLED TO RECOVER POSSESSION OF THE OCCUPIED PORTIONS OF THE LOTS FROM DEFENDANTS WHO ARE OCCUPYING AND CULTIVATING THE SAME"

We find the appeal unmeritorious.

A perusal of the answer filed by the defendant-appellant shows that there were no genuine issues. The material allegations of facts were admitted by the parties, such as that the land in question having ceased to be planted to sugarcane in 1980; that the landlord, herein appellees being compassionate gave a portion of the riceland in question to cultivate; that appellants' entry to the premises was conditioned by their agreement to surrender possession thereof upon demand by appellees; that the land in controversy was presently leased to Messrs Prudencio Hofilena and Silverio Chavez (TSN, Jan. 21, 1991, p. 8)

Contracts are obligatory no matter in what form they may be couched, so long as the essential requisites for their validity are present (Philippine American Life Insurance Company vs. Pineda, G.R. 54216, 175 SCRA 416 [1989]), and obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith (Flavio K. Makasaet & Associates, Inc. vs. Commission on Audit, G.R. 83748, 173 SCRA 352 [1989]).

Moreover, Section 4, Rep. Act 6657 (CARP) provides a limitation to the extent of its coverage to those agricultural lands regardless of tenurial arrangement and commodity produced, public and private agricultural lands, devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial, or industrial land (Natalia Realty Inc. vs. DAR, G.R. 103302, 225 SCRA 278). The case at bar contained admissions by the parties that the subject land ceased to be planted to sugarcane as early as 1980, although marginally planted to rice for the sustenance of appellants, and later leased to Messrs Chavez and Hofileña. The Supreme Court has ruled that tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land (Tuazon vs. Court of Appeals, G.R. L-44817, 118 SCRA 490, [1982]) It is a legal relationship. To determine whether or not such legal relationship exists, the intent of the parties, the understanding when the farmer is installed, and their written agreements which are complied with and are not contrary to law, are persuasive indices to be considered.

WHEREFORE, finding no grounds for reversal of the Decision appealed from, the same is hereby AFFIRMED IN TOTO. Costs against appellants.

SO ORDERED.

This decision was reached in consultation among the undersigned members of this Division, in accordance with the provisions of Section 13, Article VIII of the Constitution.

Mabutas, Jr. and Valdez, Jr., JJ., concur.