Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No.

L-43800 July 29, 1977 LEONILA LAUREL ALME A !"# $ENANCIO ALME A, Petitioners, vs. T%E %ONORA&LE COURT O' APPEALS !"# EULOGIO GON(ALES, respondents. Dizon & Vitug and Cornell S. Valdez for petitioners. Dennis B. Recon Juanito Hernandez and Oseas A. Martin for private respondent

MARTIN, J.: This is an a rarian case. Three !uestions of conse!uential effects are raised" first is there a tenant#s ri ht of rede$ption in su ar and coconut lands% second is prior tender or &udicial consi nation of the rede$ption price a condition precedent for the valid e'ercise of the ri ht of rede$ption% and t!ird does the (ourt of ) rarian Relations have &urisdiction over co$plaints for rede$ption of su ar and coconut lands. Respondent *ulo io +on,ales is an a ricultural share tenant of +licerio, Sinfroso, Susana, Maria, Sebastian, Rufina, -ienvenido, -es$ar. and (esar, all surna$ed )n eles, on their /0,1234s!uare land situated in Tanauan, -atan as, and devoted to su ar cane and coconuts. On Septe$ber 56, 7308, the lando9ners sold the propert: to petitioners4spouses ;eonila ;aurel )l$eda and Venancio )l$eda 9ithout notif:in respondent4tenant in 9ritin of the sale. The docu$ent of sale 9as re istered 9ith the Re ister of Deeds of Tanauan, -atan as on March 2<, 7303. Respondent4tenant thus see.s the rede$ption of the land in a co$plaint filed on March 2<, 73<7, pursuant to the provisions of Sections 77 and 72 of the (ode of ) rarian Refor$s, 9ith the (ourt of ) rarian Relations at ;ipa (it:. )ns9erin the co$plaint, petitioners4spouses state, a$on other thin s, that lon before the e'ecution of the deed of sale, +licerio )n eles and his nephe9 (esar )n eles first offered the sale of the land to respondent +on,ales, but the latter said that he had no $one:% that respondent4tenant, instead, 9ent personall: to the house of petitioners4spouses and i$plored the$ to bu: the land for fear that if so$eone else 9ould bu: the land, he $a: not be ta.en in as tenant% that respondent4tenant is a $ere du$$: of so$eone deepl: interested in bu:in the land, that respondent4tenant $ade to tender of pa:$ent or an: valid consi nation in court at the ti$e he filed the co$plaint for rede$ption. )t the hearin of Ma: 23, 73<5 the parties 9aived their ri ht to present evidence and, instead, a reed to file si$ultaneous $e$oranda upon 9hich the decision of the court 9ould be based. On October 76, 73<5, the ) rarian (ourt rendered &ud $ent authori,in , the respondent4 tenant, *ulo io +on,ales, to redee$ the tenanted land for P2/,666.66, the said a$ount to

be deposited b: hi$ 9ith the (ler. of (ourt 9ithin fifteen =71> da:s fro$ receipt of the decision. Petitioners4spouses e'cepted to the rulin of the ) rarian (ourt and appealed the case to the (ourt of )ppeals. On ?anuar: 56, 73<0, the )ppellate (ourt, ho9ever, affir$ed the decision of the ) rarian (ourt. Denied of their $otions for reconsideration, petitioners4 spouses instituted the present petition for revie9. @e find the appeal to be i$pressed 9ith $erits. 7. Prior to the enact$ent of the ) ricultural ;and Refor$ (ode R) 58//>, no ri ht of preference in the sale of the land under cultivation 9as en&o:ed b: the tenant4far$er. The absence of this ri ht freel: opened the 9a: to the landlords to ease out their tenants fro$ the land b: ostensible conve:ance of said land to another tenant 9ho, in turn, sues for the e&ect$ent of the first tenant on round of personal cultivation. @hile $an: of these sales 9ere si$ulated, the tenant is oftenl: evicted fro$ the land because of the for$al transfer of o9nership in the land.1 On )u ust 8, 7305, the ) ricultural ;and Refor$ (ode 9as passed, i$pressed 9ith the polic: of the State, a$on other thin s, A=t>o establish o9ner4 cultivatorship and the econo$ic fa$il:4si,e far$ as the basis of Philippine a riculture% to achieve a di nified e'istence of the s$all far$ers free fro$ pernicious institutional restraints and practices% to $a.e the s$all far$ers $ore independent, self4reliant and responsible citi,ens, and a source of enuine stren th in our de$ocratic societ:.A2 More i$portantl:, a ne9 ri ht 9as iven to the tenants4far$ers" the ri ht of pre4e$ption and rede$ption. It bolsters their securit: of tenure and further encoura es the$ to beco$e o9ner4cultivators. 3 Thus, Section II provides" AIn case the a ricultural lessor decides to sell the landholdin , the a ricultural lessee shall have the preferential ri ht to bu: the sa$e under reasonable ter$s and conditions. ... T)* +,-). o/ 0+*-*10.,o" u"#*+ .),2 S*3.,o" 1!y 4* *5*+3,2*# 6,.)," o"* )u"#+*# *,-).y #!y2 /+o1 "o.,3* ," 6+,.,"-, 6),3) shall be served b: the o9ner on all lessees affected and the Depart$ent of ) rarian Refor$.. If the a ricultural lessee a rees 9ith the ter$s and conditions of the sale, he $ust ive notice in 9ritin to the a ricultural lessor of his intention to e'ercise his ri ht of pre4e$ption 9ithin the balance of one hundred ei ht: da:s# period still available to hi$, but in an: case not less than thirt: da:s. %* must either tender payment of, or present a certificate of the land bank that t shall make payment pursuant to section eighty of this Code on the price of the landholding to the agricultural lessor. "f t!e latter refuses to accept suc! tender or present#ent !e #a$ consign it %it! t!e court.A )s protection of this ri ht, Section 72 9as inserted" AIn case the landholdin is sold to a third person 9ithout the .no9led e of the a ricultural lessee, the latter shall have the ri ht to redee$ the sa$e at a reasonable price and consideration. ... The ri ht of rede$ption under this section $a: be e'ercised 9ithin one hundred ei ht: da:s fro$ notice in 9ritin 9hich shall be served b: the vendee on all lessees affected and the Depart$ent of ) rarian Refor$ upon the re istration of the sale, and shall have priorit: over an: other ri ht of le al rede$ption. The rede$ption price shall be the reasonable price of the land at the ti$e of the sale. 4 In the precedential case of Hidalgo v. Hidalgo 7 this ri ht 9as held applicable to both lease!old tenants and s!are tenants. Presentl:, @e are faced 9ith an intricate !uestion" is this ri ht of rede$ption available to tenants in sugar and coconut landsB @e ans9er :es. )$on those e'e$pted fro$ the auto$atic conversion to a ricultural leasehold upon the effectivit: of the ) ricultural ;and Refor$ (ode in 7305 or even after its a$end$ents =(ode of ) rarian Refor$s> are su ar lands. Section / thereof states" Agricultural s!are tenanc$ throu hout the countr:, as herein defined, is hereb: declared contrar: to public polic: and shall be auto$aticall: converted to a ricultural leasehold upon the effectivit: of this section. ... &rovided, That in order not to

&eopardi,e international co$$it$ents, lands devoted to crops covered '$ #ar(eting allot#ents shall be $ade the sub&ect of a separate procla$ation b: the President upon reco$$endation of# the depart$ent head that ade!uate provisions, such as the or ani,ation of cooperatives $ar.etin a ree$ent, or si$ilar other 9or.able arran e$ents, have been $ade to insure efficient $ana e$ent on all $atters re!uirin s:nchroni,ation of the a ricultural 9ith the processin phases of such crops ...A Su ar is, of course, one crop covered b: $ar.etin allot$ents. In other 9ords this section reco ni,es s!are tenanc: in su ar lands until after a special procla$ation is $ade, 9hich procla$ation shall have the sa$e effect of an e'ecutive procla$ation of the operation of the Depart$ent of ) rarian Refor$ in an: re ion or localit:% the share tenants in the lands affected 9ill beco$e a ricultural lessees at the be innin of the a ricultural :ear ne't succeedin the :ear in 9hich the procla$ation is $ade. 8 &u., .)*+* ,2 nothing +*!#!4l* o+ *9*" #,23*+",4l* ," .)* l!6 denying .o .*"!".2 ," 2u-!+ l!"#2 .)* +,-). o/ 0+*-*10.,o" !"# +*#*10.,o" u"#*+ .)* Co#*. The e'e$ption is purel: li$ited to the tenanc$ s$ste#) it does not e'clude the other ri hts conferred b: the (ode, such as the ri ht of pre4e$ption and rede$ption. In the sa$e $anner, coconut lands are e'e$pted fro$ the (ode onl$ 9ith respect to the consideration and tenanc: s:ste$ prevailin , i$pl:in that in other $atters C the ri ht of pre4e$ption and rede$ption 9hich does not refer to the consideration of the tenanc: C the provisions of the (ode appl:. Thus, Section 51 states" ANot9ithstandin the provisions of the precedin Sections, in the case of fishponds, saltbeds and lands principall: planted to citrus, coconuts, cacao, coffee, durian, and other si$ilar per$anent trees at the ti$e of the approval of this (ode, the consideration as 9ell as the tenanc$ s$ste# prevailin , shall be overned b: the provisions of Republic )ct Nu$bered *leven Dundred and Ninet:4Nine, as a$ended.A It is to be noted that under the ne9 (onstitution, propert: o9nership is i$pressed 9ith social function. Propert: use $ust not onl: be for the benefit of the o9ner but of societ: as 9ell. The State, in the pro$otion of social &ustice, $a: Are ulate the ac!uisition, o9nership, use, en&o:$ent and disposition of private propert:, and e!uitabl: diffuse propert: ... o9nership and profits.A 7 One overn$ental polic: of recent date pro&ect e$ancipation of tenants fro$ the bonda e of the soil and the transfer to the$ of the o9nership of the land the: till. This is Presidential Decree No. 2< of October 27, 73<2, ordainin that all tenant far$ers Aof private a ricultural lands devoted to rice and corn under a s:ste$ of sharecrop or lease tenanc: 9hether classified as landed estates or not shall be dee$ed A o%ner of a portion constitutin a fa$il:4si,e far$ of five =1> hectares if not irri ated and three =5> hectares if irri ated.A 8 2. Nevertheless, 9hile the (ode secures to the tenant4far$er this ri ht of rede$ption, in particular, the e'ercise thereof $ust be in accordance 9ith la9 in order to be valid. AThe ti$el: e'ercise of the ri ht of le al rede$ption,A said the (ourt in Bas'as v. *ntena.9 Are!uires either tender of the price or valid consi nation thereof.A The statutor: periods 9ithin 9hich the ri ht $ust be e'ercised A9ould be rendered $eanin less and of eas: evasion unless the rede$ptioner is re!uired to $a.e an actual tender in ood faith of 9hat he believed to be reasonable price of the land sou ht to be redee$ed.A AThe e'istence of the ri ht of rede$ption operates to depress the $ar.et value of the land until the period e'pires, and to render that period indefinite b: per$ittin the tenant to file a suit for rede$ption, 9ith either part: unable to foresee 9hen final &ud $ent 9ill ter$inate the action, 9ould render nu ator: the period of t9o :ears =786 da:s under the ne9 la9> fi'ed b: the statute for $a.in the rede$ption and virtuall: paral:,e an: efforts of the lando9ner to reali,e the value of his land. No bu:er can be e'pected to ac!uire it 9ithout an: certaint: as to the a$ount for 9hich least his invest$ent in case of rede$ption. In the $eanti$e, the lando9ner#s needs and obli ations cannot be $et. It is doubtful if an: such result 9as intended b: the statute, absent clear 9ordin to that effect.A 10 -ona fide rede$ption necessaril$ i$ports a seasonable and valid tender of the entire repurchase price. The ri ht of

a rede$ptioner to pa: a Areasonable priceA does not e'cuse hi$ fro$ the dut: to $a.e proper tender of the price that can be honestl: dee$ed reasonable under the circu$stances, 9ithout pre&udice to final arbitration b: the courts. AIt is not difficult to discern 9h: the rede$ption price should either be full: offered in le al tender or else validl: consi ned in court. Onl: b: such $eans can the bu:er beco$e certain that the offer to redee$ is one $ade seriousl: and in ood faith. ) bu:er cannot be e'pected to entertain an offer of rede$ption 9ithout attendant evidence that the rede$ptioner can, and is 9illin to acco$plish the repurchase i$$ediatel:. ) different rule 9ould leave the bu:er open to harass$ent b: speculators or crac.pots as 9ell as to unnecessar: prolon ation of the rede$ption period, contrar: to the polic: of the la9. @hile consi nation of the tendered price is not al9a:s necessar: because le al rede$ption is not $ade to dischar e a pre4e'istin debt =)sturias Su ar (entral v. (ane Molasses (o., 06 Phil. 215>, a valid tender is indispensa'le for the reasons alread: stated. Of course, consi nation of the price 9ould re$ove all controvers: as to the rede$ptioner#s abilit: to pa: at the proper ti$e.A 11 In the case before Es, neither prior tender nor &udicial consi nation of the rede$ption price acco$panied the filin of the rede$ption suit. In fact, the ) rarian court had :et to order, 9hen it rendered its decision on October 76, 73<5 =co$plaint 9as filed on March 2<, 73<7>, respondent4tenant to deposit the a$ount of M,666.66 as rede$ption price 9ith the (ler. of (ourt 9ithin fifteen =71> da:s fro$ receipt of the decision. The absence of such tender or consi nation leaves Es, therefore, 9ith no alternative but to declare that respondent4tenant had failed to e'ercise his ri ht of rede$ption in accordance 9ith la9. 5. Reliance cannot be placed upon the case of Hidalgo v. Hidalgo 12 as e'cuse for the failure to $a.e the re!uisite tender or consi nation in court, 'ecause the (ourt did not rule therein that prior tender or &udicial consi nation of the rede$ption price is not re!uired for the valid e'ercise of the ri ht of rede$ption. In that case, the spouse I $idio Didal o and Martina Resales 9ere the s!are tenants of Policarpio Didal o on his 22, 8<04s!uare $eter a ricultural land in ;u$il, San ?ose, -atan as, 9hile the spouses Dilario ) uila and )dela Didal o 9ere his tenants on a s!uare $eter land. Policarpio Didal o sold these lands 9ithout notif:in his tenants" and so, the tenants filed petitions before the (ourt of ) rarian Relations see.in the rede$ption of the lands under Section 72 of the (ode. The ) rarian (ourt dis$iss the petitioners for the reason that the ri ht of rede$ption is available to lease!old tenants onl: but not to share tenants. On revie9, the (ourt ruled that 9hile the ) rarian (ourt +correctl$ focused on the sole issue of la%+ , 9hether the ri ht of rede$ption ranted 72 of Republic )ct No. 58// is applicable to s!are tenants C it =) rarian (ourt> Aarrived at its erroneous conclusion that the ri ht of rede$ption ranted b: Section 72 of the ;and Refor$ (ode is available to leasehold tenants onl: but not to share tenants.A The (ourt said that #=t>he (ode intended ... to afford the far$ers 9ho transitionall$ continued to be share tenants after its enact$ent but 9ho ine'orabl: 9ould be a ricultural lessees b: virtue of the (ode#s proclai$ed abolition of tenanc:, the sa$e priorit: and preferential ri ht as those ot!er s!are tenants, 9ho upon the enact$ent of the (ode or soon thereafter 9ere earlier converted '$ fortuitous circu#stance into a ricultural lessees, to ac!uire the lands under their cultivation in the event of their voluntar: sale b: the o9ner or of their ac!uisition, b: e'propriation or other9ise, b: the ;and )uthorit:.A But, the (ourt did not rule that tender of pa:$ent or consi nation of the rede$ption price in court is not a re!uisite in the valid e'ercise of the ri ht of rede$ption. In fact, it said that A=i>n the absence of an: provision in the (ode as to the #anner of and a$ounts pa:able on rede$ption, the pertinent provisions of the (ivil (ode appl: in a suppletor: characterA 9hich, of course, i$poses tender of pa:$ent or &udicial consi nation of the repurchase price as condition for valid rede$ption. -esides, it is note9orth: that in that case petitioners4tenants# possession of funds and co#pliance t!e re-uire#ents of rede#ption 9ere not !uestioned, the case havin been

sub$itted and decided on the sole le al issue of the ri ht of rede$ption bein available to the$ as share tenants. /. )s a conse!uence, .)* Cou+. o/ A-+!+,!" R*l!.,o"2 )!2 :u+,2#,3.,o" o9*+ 2u,.2 /o+ +*#*10.,o", l,;* .)* 0+*2*". 3!2*, o/ 2u-!+ !"# 3o3o"u. l!"#2. S*3.,o" 174 o/ .)* A-+,3ul.u+!l L!"# R*/o+1 Co#*, !2 !1*"#*#, 2.!.*2< =T)* Cou+. o/ A-+!+,!" R*l!.,o"2 2)!ll )!9* o+,-,"!l !"# *53lu2,9* :u+,2#,3.,o" o9*+ >1? !ll 3!2*2 o+ !3.,o"2 ,"9ol9,"matters, controversies, disputes, or money 3l!,12 arising from agrarian relations ...= Since this case involves a $atter, controvers: or dispute Aarisin fro$ a rarian relationsA C 9hether respondent4tenant on su ar and coconut lands has the ri ht of rede$ption C it is definite that the ) rarian (ourt has &urisdiction to hear and decide the sa$e. 13 The (ourt of ) rarian Relations ca$e into bein for the enforce$ent of all la9s and re ulations overnin the relations bet9een capital and labor on all a ricultural lands under an: s:ste$ of cultivation 9ith ori inal and e'clusive &urisdiction over the entire Philippines, to consider, investi ate, decide and settle all !uestions, $atters, controversies, or disputes involvin or arisin fro$ such relationship. 14 )((ORDIN+;F, the appealed decision of the (ourt of )ppeals is hereb: reversed and set aside. Respondent *ulo io +on,ales is hereb: held not to have validl: e'ercised his ri ht of rede$ption over his tenanted a ricultural land. No costs. SO ORD*R*D.