Case Digest: Carolina Liquete Ganzon vs. Court of Appeals, G.R. No. 136831

Carolina Liquete Ganzon vs. Court of Appeals, G.R. No. 136831, July 30, 2002

Subject: Obligations and Contracts

FACTS

Ganzon is the registered owner of a parcel of land situated in Balasa, Iloilo. On March 11, 1974, Ganzon and Banhaw entered into a contract of lease on said lot for a term of three (3) years, commencing from the crop year 1974-1975 up to and including the crop year 1976-1977. It is provided in the contract of lease that Banhaw cannot sub lease the subject land. The term of the lease has already expired without defendant returning possession thereof, and that it was later discovered that defendant sub-leased the property to the other defendants. Despite demands, defendants refused to vacate the property. Thus, plaintiff prayed that judgment be rendered ordering defendants to vacate the property and for defendants to pay plaintiff damages and attorney’s fees.

The case was thereupon referred to the DAR then returned to RTC. After trial, RTC dismissed plaintiff’s complaint. Barely four months following RTC’s decision, DAR Secretary dismissed petitioner’s case with finding of fact that under the expressed terms of the contract, the lessee cannot sublease the land to other persons.

CA affirmed the RTC’s finding on the existence of an agricultural leasehold tenancy but took exception from the ruling of RTC on the application of RA 1199 by pointing out that the applicable law, instead, was RA 3844, as amended by RA 6389. Petitioner moved for a reconsideration; CA denied the motion. Hence, this petition.

ISSUE

Whether or not private respondents should be considered agricultural tenants of petitioner.

RULING

Yes.

Under the law (Art 1431, NCC), through estoppel an admission or representation is rendered conclusive upon the party making it and cannot be denied or disproved as against the person relying thereon. Article 1433, in turn, classifies estoppel as either in pais (by conduct) or by deed.

Estoppel in pais, or equitable estoppel arises when one, by his acts, representations or admissions or by his silence when he ought to speak out, intentionally or through culpable negligence, induces another to believe certain facts to exist and such other rightfully relies and acts on such belief so that he will be prejudiced if the former is permitted to deny the existence of such facts. The real office of the equitable norm of estoppel is limited to supplying deficiency in the law, but it should not supplant positive law.

In this case, the requisites for the existence of a tenancy relationship are explicit in the law and these elements cannot be done away with by conjectures. SC granted the petition for review.