G.R. No. L-61093 May 25, 1988
ELIGIO P. MALLARI and MARCELINA I. MALLARI, petitioners, vs. HONORABLE COURT OF APPEALS, IGNACIO ARCEGA, et al., respondents.

FACTS

Private respondents are agricultural tenants of a sugarcane land in Pampanga originally owned by the spouses Wijangco. The land was mortgaged to the Philippine National Bank (PNB), which foreclosed on it. After the Wijangcos failed to redeem the property, title was consolidated in PNB’s name. On July 10, 1980, PNB executed a deed of conditional sale over the land in favor of petitioners, the spouses Mallari. The private respondents, claiming they only learned of the sale in April 1981, filed a petition for redemption before the Court of Agrarian Relations (CAR) in July 1981. They signified their intention to redeem and requested the Ministry of Agrarian Reform to initiate the redemption and the Land Bank to finance it.
The CAR dismissed the petition, ruling that the tenants failed to comply with jurisdictional requirements because the certification from the Land Bank stating it would finance the redemption did not constitute a valid tender of payment or consignation of the redemption price. The Court of Appeals reversed this dismissal, holding that such a certification was sufficient and that actual tender or consignation was not necessary. The Mallaris appealed to the Supreme Court.

ISSUE

Whether agricultural lessees, in exercising their statutory right of redemption, must make a valid tender of payment or consignation of the redemption price, or whether a certification from the Land Bank of its commitment to finance the redemption suffices.

RULING

The Supreme Court dismissed the petition and affirmed the Court of Appeals. The legal logic centers on the interpretation of Section 12 of Republic Act No. 3844 (Agricultural Land Reform Code), as amended, regarding the lessee’s right of redemption. The Court rejected the petitioners’ argument that a formal tender or consignation is a jurisdictional prerequisite. It emphasized a liberal interpretation of agrarian laws to fulfill their social justice objectives.
The Court clarified that while Section 11 of the same Code (governing pre-emption) explicitly states that a Land Bank certification constitutes sufficient tender, this specific provision is not replicated in Section 12 on redemption. However, the Court ruled that this distinction is not material. Section 12 itself mandates that the Department of Agrarian Reform shall initiate and the Land Bank shall finance the redemption “as in the case of pre-emption.” This explicit linkage places lessee-redemptioners on the same footing as lessee-pre-emptioners concerning the availment of Land Bank facilities.
The Court reasoned that the Land Bank, as a solvent government agency whose obligations are guaranteed, provides a financial assurance equivalent to actual payment. Requiring impoverished tenants to first produce and consign the substantial redemption price would nullify the very right the law seeks to protect. Therefore, presenting a Land Bank certification to finance the redemption is a valid and sufficient exercise of the right of redemption, dispensing with the need for a personal tender or consignation by the tenants themselves. The case was remanded to the agrarian court for further proceedings on the redemption.