Sampilo vs. Amistad

An agricultural lessee's right of redemption under Section 12 of R.A. No. 3844, as amended, is validly exercised only upon compliance with all five requisites: (a) the redemptioner must be an agricultural lessee or share tenant; (b) the land must have been sold by the owner to a third party without prior written notice of the sale given to the lessee and the DAR; (c) only the area cultivated by the agricultural lessee may be redeemed; (d) the right must be exercised within 180 days from notice; and (e) there must be an actual tender or valid consignation of the entire amount of the reasonable price of the land sought to be redeemed. Actual notice of the sale, even without the written notice contemplated by the statute, is sufficient to trigger the running of the 180-day period.

The subject property, with an aggregate area of 1.9860 hectares situated in Cabasagan, Lala, Lanao del Norte, was formerly owned by Claudia Udyang Reble and was covered by a leasehold tenancy agreement between Reble as owner-lessor and petitioner Felix Sampilo as agricultural lessee. The Agricultural Land Reform Code (R.A. No. 3844), as amended by R.A. No. 6389, governs the rights of leasehold tenants of agricultural lands, including the lessee's right of redemption when the landholding is sold to a third person without the lessee's knowledge. The dispute arose when Reble sold the property to private respondent Eliaquim Amistad, prompting petitioner to seek redemption of the land.

The subject property is a parcel of land with an aggregate area of 1.9860 hectares situated in Cabasagan, Lala, Lanao del Norte, formerly owned by Claudia Udyang Reble. The property was covered by a leasehold tenancy agreement between Reble, as owner-lessor, and petitioner Felix Sampilo, who had been a tenant of the property since 2002 and had been paying lease rentals to Reble through private respondent Eliaquim Amistad.

On May 29, 2008, petitioner received a Summons and Notice from Municipal Agrarian Reform Officer Rico S. Balsomo for a conference meeting. During the conference meeting on June 2, 2008 at the DARAB office, respondent informed petitioner that he had purchased the subject property from Reble. As proof of his purchase, respondent presented an Extra-Judicial Partition with Sale dated June 14, 2004. Petitioner was then asked to vacate the property and surrender the same to respondent.

On December 22, 2008, petitioner filed a Complaint for Redemption and Consignation against respondent before the Provincial Agrarian Reform Adjudicator of Lanao del Norte. Petitioner alleged that he was a tenant of the property since 2002 and had been religiously paying lease rentals to Reble through respondent. In his Answer with Counterclaim, respondent moved for dismissal on the ground of failure to state a cause of action and for failure to implead Reble as an indispensable party. Respondent countered that the property had been offered to petitioner sometime in 2000, but the latter refused to purchase it due to financial difficulties, and that petitioner could no longer exercise his right to redeem as prescription had already set in, more than four years having lapsed since the execution of the deed.

The Provincial Adjudicator dismissed the complaint on July 30, 2009, finding that the action was filed more than four years after the deed of conveyance was executed on June 14, 2004. The DARAB affirmed this dismissal on September 13, 2012, additionally ruling that petitioner failed to comply with the requisite of consignation under Section 11 of R.A. No. 3844. The Court of Appeals affirmed the DARAB on March 10, 2017, sustaining the finding that petitioner failed to make a valid tender or consignation of the redemption price, and denied his Motion for Reconsideration on January 26, 2018.

• No Written Notice: Petitioner contended that no prior written notice was ever served by respondent that would trigger the running of the 180-day period to exercise the right of redemption under Section 12 of R.A. No. 3844, as amended.
• Entitlement to Redeem: Petitioner alleged that he was a tenant of the property since 2002 and had been religiously paying lease rentals to Reble through respondent, entitling him to redeem the subject property.

• Failure to State Cause of Action: Respondent moved for dismissal of the complaint on the ground of failure to state a cause of action and for failure to implead Reble as an indispensable party.
• Prescription: Respondent argued that petitioner could no longer exercise his right to redeem the property as prescription had already set in, more than four years having lapsed since the filing of the complaint from the execution of the deed of conveyance.
• Prior Refusal to Purchase: Respondent countered that the property had actually been offered to petitioner sometime in 2000, but the latter refused to purchase it due to financial difficulties.

• Validity of Exercise of Right of Redemption: Whether petitioner validly exercised his right of redemption under Section 12 of R.A. No. 3844, as amended.

• Validity of Exercise of Right of Redemption: No. Petitioner failed to exercise his right of redemption within the 180-day prescriptive period, having filed his complaint 203 days after acquiring actual notice of the sale on June 2, 2008, and further failed to make a valid tender of payment or consignation of the entire redemption price, an essential requisite for validly exercising the right.

• Validity of Exercise of Right of Redemption: Section 12 of R.A. No. 3844, as amended by R.A. No. 6389, grants an agricultural lessee the right to redeem land sold to a third person without the lessee's knowledge, exercisable within 180 days from notice in writing served by the vendee on all lessees affected and the DAR. The law allows the agricultural lessor to sell the landholding with or without the lessee's knowledge; the lessee's tenancy rights do not derogate from the lessor's right to sell. Petitioner argued that no written notice was served, so the 180-day period never began to run. The Court rejected this contention: petitioner was summoned by Municipal Agrarian Reform Officer Balsomo for a conference meeting, and on June 2, 2008, at the DARAB office, respondent directly informed petitioner of the purchase and presented the Extra-Judicial Partition with Sale dated June 14, 2004 as proof. This constituted actual notice of the sale, from which the 180-day period was properly counted. Petitioner filed his complaint on December 22, 2008, or 203 days after actual notice — clearly beyond the 180-day period. Independently of prescription, petitioner also failed to satisfy the essential requisite of consignation. Citing Quiño vs. Court of Appeals and Rupa, Sr. vs. Court of Appeals, the Court reiterated that an offer to redeem must be either through a formal tender with consignation or by filing a complaint coupled with consignation of the redemption price within the prescribed period; mere intention to repurchase without an actual and simultaneous tender of the full amount is insufficient. Petitioner failed to make any valid tender of payment or consignation of the entire redemption price at the time of filing the complaint. Both the prescriptive period and the consignation requisite having been unmet, the right of redemption was not validly exercised.

• Right of Redemption of Agricultural Lessee — Under Section 12 of R.A. No. 3844, as amended by R.A. No. 6389, an agricultural lessee has the right to redeem land sold to a third person without the lessee's knowledge, exercisable within 180 days from notice in writing served by the vendee on all lessees affected and the DAR. The right is validly exercised only upon compliance with five requisites: (a) the redemptioner must be an agricultural lessee or share tenant; (b) the land must have been sold by the owner to a third party without prior written notice of the sale given to the lessee and the DAR; (c) only the area cultivated by the agricultural lessee may be redeemed; (d) the right must be exercised within 180 days from notice; and (e) there must be an actual tender or valid consignation of the entire amount of the reasonable price of the land sought to be redeemed. The Court applied all five requisites and found that petitioner failed on at least two: the 180-day period and the consignation requirement.

• Actual Notice as Trigger for Prescriptive Period — While Section 12 speaks of notice in writing served by the vendee, actual notice of the sale acquired by the agricultural lessee through other means — such as direct information from the vendee during a conference meeting at the DARAB office, supported by presentation of the deed of sale — is sufficient to trigger the running of the 180-day prescriptive period. The Court held that petitioner's actual notice on June 2, 2008 started the period, notwithstanding the absence of the formal written notice contemplated by the statute.

• Necessity of Consignation in Exercise of Right of Redemption — A mere intention to repurchase, unaccompanied by an actual and simultaneous tender of payment of the full redemption price in the form of consignation, is insufficient to validly exercise the right of redemption. The offer to redeem must be effected either through a formal tender with consignation or by filing a complaint in court coupled with consignation of the redemption price within the prescribed period, and the tender must be for the full amount of the repurchase price.

• "The law clearly allows the agricultural lessor to sell the landholding, with or without the knowledge of the agricultural lessee. Consequently, the existence of agricultural tenancy rights of an agricultural lessee cannot affect nor derogate from the right of the agricultural lessor to sell the property covered by the agricultural lease." — This passage articulates the principle that the lessor's right of disposal is not impaired by the existence of agricultural tenancy; the lessee's protection lies in the statutory right of redemption, not in a veto over the sale.

• "An offer to redeem to be properly effected can either be through a formal tender with consignation or by filing a complaint in court coupled with consignation of the redemption price within the prescribed period. It must be stressed however that 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 which constitutes the legal use or exercise of the right to repurchase." — Quoted from Quiño vs. Court of Appeals, this is the canonical formulation of the consignation requirement in the exercise of the right of redemption, frequently cited in agrarian law jurisprudence.

• Quiño vs. Court of Appeals, 353 Phil. 449 (1998) — Followed. The Court applied its ruling that an offer to redeem must be accompanied by an actual and simultaneous tender of payment or consignation of the full redemption price within the prescribed period; mere intention to repurchase is insufficient.
• Rupa, Sr. vs. Court of Appeals, 380 Phil. 112 (2000) — Followed. The Court applied its principle that to validly exercise the right of redemption under Section 12 of R.A. No. 3844, there must be an actual tender or valid consignation of the entire amount of the reasonable price of the land sought to be redeemed.

• Section 12, Republic Act No. 3844 (Agricultural Land Reform Code), as amended by Republic Act No. 6389 — Governs the agricultural lessee's right of redemption when the landholding is sold to a third person without the lessee's knowledge. The provision establishes the 180-day prescriptive period from written notice served by the vendee on the lessees and the DAR, and requires the redemption price to be the reasonable price of the land at the time of the sale. The Court applied this provision to determine whether petitioner validly exercised his right of redemption, finding that he failed on both the prescriptive period and the consignation requirement.
• Section 11, Republic Act No. 3844, as amended — Referenced by the DARAB in connection with the requirement of prior written notice of sale to the lessee and the DAR. The provision contextualizes the notice requirement that triggers the lessee's right of redemption.

Justices Leonen (Chairperson), Hernando, Inting, and Rosario concurred.