Almeda vs. Court of Appeals

A share tenant's statutory right of redemption under the Agricultural Land Reform Code extends to sugar and coconut lands, but the right is validly exercised only upon prior tender of payment or judicial consignation of the redemption price; the Court of Agrarian Relations has jurisdiction over such redemption suits.

Eulogio Gonzales was an agricultural share tenant of the Angeles family on a 46,529-square landholding in Tanauan, Batangas devoted to sugar cane and coconuts. The Agricultural Land Reform Code (Republic Act No. 3844), as amended, introduced the tenant's right of pre-emption and redemption and declared share tenancy contrary to public policy, subject to exemptions for crops covered by marketing allotments, including sugar, and for coconut lands under Section 35. The case required construing whether those exemptions from automatic leasehold conversion also excluded the tenant's redemption right.

Eulogio Gonzales was an agricultural share tenant of Glicerio, Sinfroso, Susana, Maria, Sebastian, Rufina, Bienvenido, Besmark, and Cesar, all surnamed Angeles, on their 46,529-square land situated in Tanauan, Batangas and devoted to sugar cane and coconuts.

On September 30, 1968, the landowners sold the property to petitioners-spouses Leonila Laurel Almeda and Venancio Almeda without notifying Gonzales in writing of the sale. The document of sale was registered with the Register of Deeds of Tanauan, Batangas on March 27, 1969.

Gonzales thereafter sought the redemption of the land in a complaint filed on March 27, 1971 under Sections 11 and 12 of the Code of Agrarian Reforms with the Court of Agrarian Relations at Lipa City. In their answer, petitioners-spouses alleged that long before the deed of sale, Glicerio Angeles and his nephew Cesar Angeles first offered the land for sale to Gonzales, but Gonzales said he had no money; that Gonzales instead went personally to the house of petitioners-spouses and implored them to buy the land for fear that if someone else bought it, he might not be taken in as tenant; that Gonzales was a mere dummy of someone deeply interested in buying the land; and that Gonzales made no tender of payment or any valid consignation in court at the time he filed the complaint for redemption.

At the hearing on May 29, 1973, the parties waived their right to present evidence and agreed to file simultaneous memoranda upon which the decision of the court would be based. No prior tender or judicial consignation of the redemption price accompanied the filing of the redemption suit; the first order to deposit P24,000.00 as redemption price came only in the Agrarian Court's October 10, 1973 decision. The lower courts proceeded on the factual premises that Gonzales was a share tenant and that the land was devoted to sugar cane and coconuts.

• Absence of Tender or Consignation: Petitioners-spouses stated that respondent-tenant made no tender of payment or any valid consignation in court at the time he filed the complaint for redemption.
• Prior Offer and Refusal: Petitioners-spouses alleged that long before the deed of sale, Glicerio Angeles and his nephew Cesar Angeles first offered the land for sale to respondent Gonzales, but Gonzales said he had no money.
• Dummy and Improper Motive: Petitioners-spouses claimed that respondent-tenant was a mere dummy of someone deeply interested in buying the land.
• Fear of Losing Tenancy: Petitioners-spouses alleged that respondent-tenant went personally to their house and implored them to buy the land for fear that if someone else bought it, he might not be taken in as tenant.

• Right of Redemption in Sugar and Coconut Lands: Whether a tenant has the right of redemption in sugar and coconut lands under the Agricultural Land Reform Code and the Code of Agrarian Reforms.
• Prior Tender or Consignation: Whether prior tender or judicial consignation of the redemption price is a condition precedent for the valid exercise of the right of redemption.
• Jurisdiction of the Court of Agrarian Relations: Whether the Court of Agrarian Relations has jurisdiction over complaints for redemption of sugar and coconut lands.

• Right of Redemption in Sugar and Coconut Lands: Yes. The right of pre-emption and redemption under the Code extends to share tenants of sugar and coconut lands; the exemptions in the Code are limited to the tenancy system or consideration and do not deny those rights.
• Prior Tender or Consignation: Yes. A valid exercise of the right of redemption requires prior tender of payment or judicial consignation of the redemption price; absent such tender or consignation, respondent-tenant failed to exercise the right in accordance with law.
• Jurisdiction of the Court of Agrarian Relations: Yes. Section 154 of the Agricultural Land Reform Code, as amended, grants the Court of Agrarian Relations original and exclusive jurisdiction over matters arising from agrarian relations, including redemption of sugar and coconut lands.

• Right of Redemption in Sugar and Coconut Lands: Before the enactment of the Agricultural Land Reform Code, tenant-farmers had no right of preference in the sale of land under cultivation. The Code declared share tenancy contrary to public policy and created the right of pre-emption and redemption to bolster security of tenure and encourage owner-cultivatorship. Section 11 grants the preferential right to buy, while Section 12 grants the right to redeem land sold to a third person without the lessee's knowledge. Hidalgo vs. Hidalgo held this right applicable to both leasehold and share tenants. Sugar lands are exempt from automatic conversion under Section 4 because sugar is a crop covered by marketing allotments; coconut lands are covered by Section 35, which makes Republic Act No. 1199 govern the consideration and tenancy system. These exemptions, however, are limited to the tenancy system or consideration; nothing in the law denies tenants in sugar lands the right of pre-emption and redemption. Thus, the right is available to share tenants of sugar and coconut lands. The social function principle under the 1973 Constitution and the tenant-emancipation policy of Presidential Decree No. 27 reinforce this conclusion.
• Prior Tender or Consignation: The right of redemption must be exercised in accordance with law. Basbas vs. Entena established that the timely exercise of the right of legal redemption requires either tender of the price or valid consignation thereof. The statutory period would be meaningless unless the redemptioner makes an actual tender in good faith of what he believed to be the reasonable price of the land. Bona fide redemption necessarily imports a seasonable and valid tender of the entire repurchase price. The right to pay a reasonable price does not excuse the redemptioner from the duty to make a proper tender. While consignation is not always necessary because legal redemption is not made to discharge a pre-existing debt, a valid tender is indispensable. In this case, neither prior tender nor judicial consignation accompanied the filing of the redemption suit. The Agrarian Court only ordered the deposit of P24,000.00 in its October 10, 1973 decision, while the complaint was filed on March 27, 1971. Respondent-tenant therefore failed to exercise his right of redemption in accordance with law.
• Hidalgo vs. Hidalgo Not an Excuse: Hidalgo vs. Hidalgo did not rule that prior tender or judicial consignation of the redemption price is not required for the valid exercise of the right of redemption. In that case, the Court applied the pertinent provisions of the Civil Code in a suppletory character in the absence of any provision in the Code as to the manner of and amounts payable on redemption, and those provisions impose tender of payment or judicial consignation of the repurchase price as a condition for valid redemption. In Hidalgo, the petitioners-tenants' possession of funds and compliance with the requirements of redemption were not questioned, the case having been submitted and decided on the sole legal issue of whether the right of redemption was available to them as share tenants.
• Jurisdiction of the Court of Agrarian Relations: Section 154 of the Agricultural Land Reform Code, as amended, provides that the Court of Agrarian Relations shall have original and exclusive jurisdiction over all cases or actions involving matters, controversies, disputes, or money claims arising from agrarian relations. This case involves a matter, controversy, or dispute arising from agrarian relations — whether respondent-tenant on sugar and coconut lands has the right of redemption. The Agrarian Court therefore has jurisdiction to hear and decide the same. The Court of Agrarian Relations was created for the enforcement of all laws and regulations governing the relations between capital and labor on all agricultural lands under any system of cultivation.

• Tenant's Right of Redemption in Sugar and Coconut Lands — The statutory right of pre-emption and redemption under the Agricultural Land Reform Code extends to share tenants of sugar and coconut lands. The exemptions for sugar lands under Section 4 and for coconut lands under Section 35 are limited to the tenancy system or the consideration of the tenancy; they do not exclude the right of pre-emption and redemption. The Court applied this doctrine by holding that respondent Gonzales, as a share tenant on sugar and coconut land, could invoke the right of redemption in principle.
• Prior Tender or Judicial Consignation as a Condition for Valid Redemption — The timely exercise of the right of legal redemption requires either tender of the price or valid consignation thereof. Bona fide redemption necessarily imports a seasonable and valid tender of the entire repurchase price. The right to pay a reasonable price does not excuse the redemptioner from making a proper tender. While consignation is not always necessary because legal redemption is not made to discharge a pre-existing debt, a valid tender is indispensable. The Court applied this doctrine by holding that respondent-tenant's failure to make a prior tender or judicial consignation rendered his redemption invalid.
• Suppletory Application of the Civil Code to Redemption — In the absence of any provision in the Agricultural Land Reform Code as to the manner of and amounts payable on redemption, the pertinent provisions of the Civil Code apply in a suppletory character. Those provisions impose tender of payment or judicial consignation of the repurchase price as a condition for valid redemption. The Court used this doctrine to clarify that Hidalgo vs. Hidalgo did not dispense with the tender requirement.
• Jurisdiction of the Court of Agrarian Relations — The Court of Agrarian Relations has original and exclusive jurisdiction over all cases or actions involving matters, controversies, disputes, or money claims arising from agrarian relations. A suit to redeem sugar and coconut lands is a matter arising from agrarian relations. The Court applied this doctrine to uphold the Agrarian Court's jurisdiction over the present case.

• "The exemption is purely limited to the tenancy system; it does not exclude the other rights conferred by the Code, such as the right of pre-emption and redemption." — This passage states the ratio for holding that exemptions for sugar lands from automatic leasehold conversion do not remove the tenant's statutory right of redemption.
• "Bona fide redemption necessarily imports a seasonable and valid tender of the entire repurchase price." — This formulation defines the standard for valid redemption and is central to the Court's ruling that tender of the full price is required.
• "The absence of such tender or consignation leaves Us, therefore, with no alternative but to declare that respondent-tenant had failed to exercise his right of redemption in accordance with law." — This passage applies the tender requirement to the facts and supplies the decisive ground for reversing the Court of Appeals.
• "Since this case involves a matter, controversy or dispute "arising from agrarian relations" — whether respondent-tenant on sugar and coconut lands has the right of redemption — it is definite that the Agrarian Court has jurisdiction to hear and decide the same." — This passage affirms the Court of Agrarian Relations' jurisdiction over redemption suits involving sugar and coconut lands.

• Hidalgo vs. Hidalgo, May 29, 1970, 33 SCRA 105 — Precedential ruling that the right of redemption under Section 12 of the Agricultural Land Reform Code applies to both leasehold and share tenants; the Court clarified that it did not dispense with the requirement of tender or consignation.
• Basbas vs. Entena, L-26255, June 30, 1969, 28 SCRA 669-672 — Cited for the controlling rule that the timely exercise of legal redemption requires either tender of the price or valid consignation thereof.
• Asturias Sugar Central vs. Cane Molasses Co., 60 Phil. 253 — Cited for the proposition that consignation of the tendered price is not always necessary because legal redemption is not made to discharge a pre-existing debt, although a valid tender remains indispensable.
• Conejero vs. Court of Appeals, L-21812, April 29, 1966, 16 SCRA 775 — Cited in support of the discussion on tender and consignation in redemption.
• Lacson vs. Pineda, L-28523, July 16, 1971, 40 SCRA 30 and Ferrer vs. Villamor, L-33293, Sept. 30, 1974, 60 SCRA 106 — Cited for the Court of Agrarian Relations' jurisdiction over agrarian disputes.
• Salandanan vs. Tizon, L-30290, February 24, 1975, 62 SCRA 388 — Cited for the creation and jurisdiction of the Court of Agrarian Relations.

• Section 11, Agricultural Land Reform Code (Republic Act No. 3844), as amended — Grants the agricultural lessee the preferential right to buy the landholding under reasonable terms and conditions, with notice and tender or consignation requirements. The Court used this provision to define the right of pre-emption.
• Section 12, Agricultural Land Reform Code — Grants the agricultural lessee the right to redeem land sold to a third person without the lessee's knowledge, at a reasonable price and consideration. The Court applied this provision as the basis of respondent's redemption claim, but held it subject to valid tender or consignation.
• Section 4, Agricultural Land Reform Code — Declares agricultural share tenancy contrary to public policy and provides for automatic conversion to agricultural leasehold, exempting lands devoted to crops covered by marketing allotments, including sugar. The Court applied this provision to hold that the sugar-land exemption is limited to the tenancy system and does not exclude redemption.
• Section 35, Agricultural Land Reform Code — Provides that for fishponds, saltbeds, and lands principally planted to coconut, cacao, coffee, durian, and similar permanent trees, the consideration and tenancy system are governed by Republic Act No. 1199. The Court applied this provision to hold that the coconut-land exemption is limited to consideration and tenancy system and does not exclude redemption.
• Section 154, Agricultural Land Reform Code, as amended — Vests the Court of Agrarian Relations with original and exclusive jurisdiction over cases or actions involving matters, controversies, disputes, or money claims arising from agrarian relations. The Court applied this provision to uphold jurisdiction over the redemption suit.
• Art. 11, Se 6, 1973 Constitution — States that property ownership is impressed with social function and that the State may regulate the acquisition, ownership, use, enjoyment, and disposition of private property and equitably diffuse property ownership and profits. The Court cited this provision to support the social justice and tenant-emancipation policy.
• Presidential Decree No. 27 (October 21, 1972) — Ordains that tenant farmers of private agricultural lands devoted to rice and corn under sharecrop or lease tenancy are deemed owners of a family-size farm of five hectares if not irrigated and three hectares if irrigated. The Court mentioned this decree as a governmental policy of tenant emancipation.

Teehankee (Chairman), Muñoz-Palma, Fernandez, and Guerrero, JJ., concurred. Makasiar, J., reserved his vote.