This case involves a dispute over a parcel of land originally owned by the Santos heirs and tenanted by petitioners Castro and Sebastian. An heir sold a portion to the Municipality of Bustos, which built a public market on it. Although the Provincial Agrarian Reform Adjudicator (PARAD) initially recognized the petitioners' right of redemption as tenants, subsequent execution proceedings led to the PARAD ordering the transfer of ownership despite the petitioners' failure to timely and validly redeem the property. The Court of Appeals reversed the PARAD's execution orders. The Supreme Court affirmed the Court of Appeals, holding that while petitioners were tenants with a right of redemption, their failure to validly exercise this right (by timely consigning the full redemption price) and the property's conversion to public use precluded them from acquiring ownership or possession, though they are entitled to disturbance compensation.
Primary Holding
An agricultural lessee's right of redemption under Section 12 of RA 3844, as amended, must be validly exercised through timely tender and consignation of the full and reasonable redemption price; failure to do so, coupled with the property's actual conversion and devotion to public use, prevents the lessee from acquiring ownership and possession, although they remain entitled to disturbance compensation.
Background
The case originates from the sale of a portion of agricultural land, tenanted by the petitioners, by one of the co-owning heirs to the respondent Municipality of Bustos for the expansion of its public market. The sale occurred without written notice to the petitioners, triggering their right of redemption under agrarian law. The property had already been classified as commercial, and a public market was constructed and operating on it before the petitioners formally sought redemption.
History
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Complaint for Maintenance of Peaceful Possession, Pre-emption/Redemption, and Damages filed before the PARAD (Reg. Case No. 739-Bulacan '94).
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PARAD ruled petitioners are tenants entitled to redeem the property (June 28, 1995).
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Appealed to the DARAB (DARAB Case No. 4384); DARAB modified PARAD decision, ordering disturbance compensation instead of redemption.
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Appealed to the Court of Appeals (CA-G.R. SP No. 47234); CA reinstated PARAD decision recognizing redemption right, with modification on damages (July 17, 2002).
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CA Decision in SP No. 47234 became final and executory (November 27, 2003).
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PARAD issued Writs of Execution (2006), Resolutions (2006, 2007), and Orders (2009) amending the final decision to effect redemption, transfer ownership, and issue possession to petitioners.
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Private respondents (market stall owners) filed a petition for Certiorari and Mandamus with the CA (CA-G.R. SP No. 108859) challenging the PARAD's execution issuances.
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CA granted the petition, reversed PARAD's execution issuances, annulled the TCT issued to petitioners, and ordered petitioners to vacate.
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Petitioners filed a Petition for Review on Certiorari under Rule 45 with the Supreme Court (G.R. No. 212778).
Facts
- Petitioners Teddy Castro and Lauro Sebastian were agricultural tenants on a parcel of land originally owned by Simeon Santos.
- Upon Simeon's death, his heirs partitioned the property; one heir, Jesus Santos, owned an undivided share of 2,132.42 square meters.
- On October 27, 1992, Jesus sold his share to the respondent Municipality of Bustos for P1.2 Million to expand the Bustos Public Market, without written notice to the petitioners.
- The area, including the subject property, had been classified as commercial since 1989.
- The Municipality constructed the public market expansion on the property, which was inaugurated on August 18, 1994.
- On August 22, 1994, petitioners filed a complaint with the PARAD seeking redemption and damages, depositing P2,300.00 as the redemption price on August 26, 1994.
- The PARAD (June 28, 1995) ruled petitioners were tenants entitled to redeem. This was affirmed with modification by the CA (July 17, 2002) and became final on November 27, 2003.
- During execution, petitioners tendered P1.2 Million in March 2006, which the Municipality refused. PARAD ordered deposit with Land Bank (May 2006).
- PARAD issued resolutions (Aug 23, 2006; June 8, 2007) amending the final decision, setting the price at P1.2M, ordering the Municipality to execute a Deed of Conveyance, ordering issuance of a Writ of Possession, directing cancellation of the Municipality's TCT and issuance of a new one to petitioner Castro.
- Private respondents, lessees of market stalls (Bustos Market Stall Owners Association), filed motions to intervene and quash the PARAD's execution orders, which were denied. A TCT (T-257885) was issued in petitioners' names.
- Private respondents elevated the matter to the CA via certiorari (CA-G.R. SP No. 108859), which reversed the PARAD's execution orders.
Arguments of the Petitioners
- The CA erred procedurally as the petition challenging the PARAD's execution orders (except the Feb 12, 2009 order) was filed beyond the 60-day reglementary period.
- The CA erred in finding private respondents (market stall lessees) had the standing (locus standi/real party-in-interest) to intervene and challenge the PARAD orders, as they were mere lessees/privies of the Municipality bound by the final judgment.
- The CA erred in applying the doctrine of locus standi instead of the rule on real party-in-interest, as no constitutional issue was involved.
- The CA erred in finding the petition was not barred by res judicata.
- The CA erred in applying the 180-day redemption period under RA 3844 and finding petitioners' tender and consignation untimely.
- The CA erred in holding that the property's conversion to a public market prevents petitioners from exercising their recognized redemption right.
- The CA erred in concluding that the PARAD issuances substantially altered the final PARAD decision and that the Writ of Possession was improperly issued.
- The CA erred in finding grave abuse of discretion by the PARAD without specifying the particular acts constituting it.
Arguments of the Respondents
- (Private Respondents/Market Stall Owners, adopted by Respondent Municipality before the CA) The PARAD committed grave abuse of discretion in amending the final and executory June 28, 1995 decision during execution to order the transfer of ownership.
- The P1.2 Million redemption price was inadequate, far below the P6 Million spent by the Municipality on the market construction.
- Petitioners failed to timely exercise their right of redemption by not consigning the correct amount within the 180-day period prescribed by RA 3844.
- The PARAD's issuance of a Writ of Possession and execution of a Deed of Conveyance favoring petitioners was improper.
- The property has been devoted to public use (public market), precluding petitioners' claim for possession and ownership through redemption.
- As actual occupants and lessees whose possession was directly affected by the PARAD's execution orders, they are real parties-in-interest with the right to challenge those orders.
Issues
- Whether the private respondents (market stall owners/lessees) are real parties-in-interest allowed to intervene and challenge the PARAD's execution orders.
- Whether the PARAD, during the execution stage, correctly amended its final June 28, 1995 Decision to order the transfer of ownership and possession of the property to the petitioners.
- Whether the petitioners validly exercised their right of redemption under Section 12 of RA 3844, as amended.
- Whether the petitioners can recover ownership and possession of the property despite its conversion into a public market.
Ruling
- The petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 108859 is AFFIRMED.
- Private respondents are real parties-in-interest. Although technically successors-in-interest bound by the judgment against the Municipality, the PARAD's execution orders directly threatened their possession of the market stalls without giving them a day in court. Given the circumstances, their intervention, even after judgment, is allowed to protect their interest and ensure complete relief. They are necessary parties for a full determination of the claim over possession.
- The PARAD committed grave abuse of discretion by substantially amending its final and executory decision during the execution stage. The original decision only recognized the petitioners' right to redeem; it did not adjudicate ownership or order its transfer. The execution orders improperly expanded the judgment by setting the price, ordering conveyance, and transferring ownership and possession, which are matters that should have been determined based on a valid exercise of the redemption right, not assumed automatically.
- Petitioners failed to validly exercise their right of redemption. RA 3844 requires redemption within 180 days from notice (or finality of judgment recognizing the right) through tender of the reasonable price coupled with consignation. Petitioners initially deposited only P2,300.00 in 1994 and only tendered/consigned the P1.2 Million in 2006, years after the judgment recognizing their right became final in 2003, well beyond the 180-day period.
- Petitioners cannot recover ownership and possession. Their failure to validly redeem means ownership was never transferred to them. Furthermore, the property has long been devoted to public use as a public market, constructed and operated by the Municipality. Petitioners' acquiescence (waiting until after market inauguration to file suit, apparent lack of continuous cultivation, alleged collection of rentals from vendors) and public policy considerations prevent recovery of possession of property devoted to public use.
- Petitioners, however, as recognized tenants whose dispossession resulted from the land's conversion, are entitled to disturbance compensation under Section 36(1) of RA 3844. The case is remanded to the DARAB for computation.
Doctrines
- Right of Redemption (Agricultural Lessee): Definition: The right granted by Sec. 12, RA 3844, as amended, to an agricultural lessee to repurchase the landholding sold by the landowner to a third party without the lessee's written notice, at a reasonable price and within 180 days from notice. Application: The Court recognized petitioners initially had this right but held they failed to exercise it validly by not consigning the full redemption price within the prescribed period.
- Real Party-in-Interest: Definition: The party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit, possessing a substantial material interest in the issue. Application: The Court held that the private respondent market stall vendors were real parties-in-interest because the PARAD's execution orders directly threatened their possession and livelihood, giving them the standing to challenge those orders.
- Necessary Party: Definition: A party who is not indispensable but ought to be joined if complete relief is to be accorded to those already parties, or for a complete determination of the claim. Application: The Court found private respondents to be necessary parties whose intervention should have been allowed for a complete settlement of the possessory claims over the property.
- Intervention: Definition: A remedy where a third person, with legal interest in the matter in litigation, is permitted by the court to become a party. Application: The Court allowed the intervention of private respondents even after final judgment due to exceptional circumstances, specifically to protect their possessory rights which were directly affected by the execution orders and could not otherwise be protected.
- Finality of Judgment (Immutability of Judgments): Definition: A fundamental principle that a decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact or law. Application: The Court ruled that the PARAD violated this doctrine by substantially amending its final decision during execution, going beyond mere clarification to improperly order the transfer of ownership not contemplated in the original judgment.
- Execution of Judgments: Definition: The process of enforcing or carrying out the final decision of a court. A writ of execution must strictly conform to the judgment it enforces. Application: The Court found that the PARAD's execution writs and orders went beyond the terms of the final judgment (which only recognized the right to redeem) and were therefore void.
- Public Use/Public Policy (Property): Definition: Property devoted to public service or benefit. Jurisprudence holds that recovery of possession of private land already devoted to public use may be barred by estoppel or public policy considerations, limiting the owner to compensation. Application: The Court held that the property's established use as a public market, coupled with petitioners' inaction/acquiescence, precluded them from recovering possession, reinforcing the denial of their redemption claim's effectivity.
- Disturbance Compensation: Definition: Compensation due to an agricultural lessee whose possession is disturbed or ended due to the landholding's conversion to non-agricultural purposes, as provided under Sec. 36(1), RA 3844. Application: Since petitioners were valid tenants dispossessed due to the property's conversion for the public market, the Court ruled they are entitled to disturbance compensation from the Municipality.
Key Excerpts
- "Basic is the rule that a decision that has acquired finality becomes immutable and unalterable. Indeed, nothing is more settled in law than that a judgment, once it attains finality, can no longer be modified in any respect, regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land."
- "A writ of execution, as a general rule, should strictly conform to every particular of the judgment to be executed and not vary the terms of the judgment it seeks to enforce. Neither may it go beyond the terms of the judgment sought to be executed; the execution is void if it is in excess of and beyond the original judgment or award."
- "In making a repurchase, it is not sufficient that a person offering to redeem merely manifests his desire to repurchase. This statement of intention must be accompanied by an actual and simultaneous tender of payment of the full amount of the repurchase price, i.e., the consideration of the sale, otherwise the offer to redeem will be held ineffectual."
- "Considering that petitioners failed to consign the full redemption price of P1.2 Million when they filed the complaint before the PARAD in August 22, 1994, there was no valid exercise of the right to redeem the property."
- "Our holding that the property has been devoted to public use and cannot be appropriated and possessed by petitioners is unavoidable."
- "Nonetheless, as valid tenants-possessors of the property, petitioners are entitled to disturbance compensation under Section 36 (1) of RA 3844, as amended."
Precedents Cited
- Quiño v. CA (G.R. No. 118599, 1998): Cited to explain the rationale for requiring consignation of the full redemption price – to demonstrate the redemptioner's serious intent and financial capacity, preventing speculation and prolonged uncertainty.
- Perez v. Aquino (G.R. No. 217799, 2016): Cited regarding the elements for valid exercise of agricultural redemption right and potentially regarding landowner's right to sell.
- Estrella v. Francisco (G.R. No. 209384, 2016): Cited regarding the requirements for valid redemption and possibly on the continuation of tenancy despite sale.
- Pinlac v. Court of Appeals (G.R. No. 91486, 2003): Cited regarding the allowance of intervention even after judgment in exceptional circumstances to protect substantial rights.
- Mago v. Court of Appeals (G.R. No. 115624, 1999): Cited as precedent for allowing intervention even after a decision became final and executory, emphasizing judicial discretion for justice.
- Navy Officers' Village Association, Inc. (NOVAI) v. Republic (G.R. No. 177168, 2015): Cited as an example where intervention was allowed after judgment.
- Pascual v. Daquioag (G.R. No. 162063, 2014): Cited on the principle that execution must conform strictly to the judgment and on possession being an incident of ownership.
- Dela Cruz v. Quiazon (G.R. No. 1719611, 2008): Cited to illustrate that even a Certificate of Land Transfer under PD 27 does not automatically vest ownership; it requires compliance with conditions.
- Manila Railroad Company v. Paredes (32 Phil. 534, 1915): Cited as early jurisprudence establishing that a registered owner might be precluded from recovering possession of property already devoted to public use, especially if there was acquiescence, limiting the remedy to compensation.
- Forfom Development Corporation v. Philippine National Railways (G.R. No. 12479, 2008): Cited as a more recent application of the Manila Railroad doctrine, disallowing recovery of possession of land used for public utility due to estoppel and public policy.
- De Guzman v. Court of Appeals (G.R. No. 156965, 2006): Cited potentially for considering zoning classification in land disputes, although distinguished by the failure to realize the commercial project in that case versus the actual public market construction here.
Provisions
- Rules of Court, Rule 45: Basis for the petition for review on certiorari filed with the Supreme Court.
- Rules of Court, Rule 65: Basis for the petition for certiorari and mandamus filed by respondents with the CA challenging the PARAD's execution orders.
- Rules of Court, Rule 3, Sec. 2 (Real Party-in-Interest): Applied to determine if the market stall vendors had standing.
- Rules of Court, Rule 3, Sec. 8 (Necessary Party): Applied to determine the status of the market stall vendors in relation to the case.
- Rules of Court, Rule 19, Sec. 2 (Time to Intervene): Discussed in relation to the timeliness of the market stall vendors' intervention.
- Rules of Court, Rule 39, Sec. 10 (Execution of judgments for specific act): Distinguished from Sec. 11 as less applicable here.
- Rules of Court, Rule 39, Sec. 11 (Execution of special judgments): Identified as the applicable rule for executing the judgment involving the reciprocal obligation of redemption.
- Rules of Court, Rule 39, Sec. 16 (Third Party Claim/Terceria): Mentioned in relation to the market stall vendors' initial attempt to assert their rights during execution.
- Republic Act No. 3844 (Agricultural Land Reform Code), Sec. 11 (Lessee's Right of Pre-emption): Mentioned in the initial PARAD complaint.
- Republic Act No. 3844, Sec. 12 (Lessee's Right of Redemption), as amended by RA 6389: Central provision governing the petitioners' right. The Court analyzed the requirements (tenant status, sale without notice, reasonable price, 180-day period, tender/consignation) and found petitioners failed to comply.
- Republic Act No. 3844, Sec. 36(1) (Disturbance Compensation): Basis for the final award granted to petitioners upon denial of redemption/possession due to land conversion.
- Civil Code, Art. 414: Impliedly referenced in defining property rights.
- Civil Code, Art. 525: Defines concept of holder/possessor.
- Civil Code, Art. 526: Defines possessor in good faith.
- Civil Code, Art. 541: Presumption of just title for possessor in concept of owner.
- Civil Code, Art. 1191: Impliedly related to reciprocal obligations in redemption.
- Presidential Decree No. 27: Referenced in relation to the Dela Cruz v. Quiazon citation regarding Certificates of Land Transfer.
- Republic Act No. 7160 (Local Government Code), Sec. 20: Mentioned regarding the reclassification of land by the Sangguniang Bayan.