G.R. No. L-64284 July 3, 1992
SPS. JOSE S. VELASQUEZ and JUSTINA ADVINCULA-VELASQUEZ, petitioners, vs. SPS. MARTIN NERY and LEONCIA DE LEON NERY; and ROSARIO LORENZO, SALUD RODRIGUEZ, VDA. DE LORENZO, MARIANO LORENZO, PACIFICO LORENZO, ONOFRE LORENZO, GERTRUDES DE LEON VDA. DE LORENZO; AND LOLOY LORENZO, TRINIDAD LORENZO, DIONISIO LORENZO, PERFECTO LORENZO, MARIA REBECCA LORENZO, ASUNCION LORENZO, MAURO LORENZO and LOURDES LORENZO; DELTA MOTOR CORPORATION represented by its President/Manager, Mr. RICARDO C. SILVERIO; and FISCAL ERNESTO A. BERNABE in his personal and official capacity as Ex-Officio Register of Deeds of Metro Manila District IV, Pasay City; and HON. JUDGE MANUEL E. VALENZUELA, in his personal and official capacity as Judge of the Court of First Instance, Seventh Judicial, Branch XXIX, now Regional Trial Court, National Capital Region, Pasay City, Metro Manila; and the HON. INTERMEDIATE APPELLATE COURT, FIRST SPECIAL CASES DIVISION, respondents.

FACTS

Petitioners Jose S. Velasquez and Justina Advincula-Velasquez are agricultural lessees of a 51,538 square meter riceland in Parañaque, Metro Manila. The property was originally claimed by respondent Martin Nery, but the Supreme Court in 1972 declared the respondent Lorenzos as co-owners with Nery. The land was subsequently registered under TCT No. 64132 in the names of the Nery and Lorenzo respondents. In 1978, the Lorenzos filed an action for partition against the Nerys (Civil Case No. 5313-P). The parties entered into a compromise agreement to sell the land to respondent Delta Motor Corporation. On August 24, 1979, petitioner Jose Velasquez filed an action for redemption before the Court of Agrarian Relations (CAR Case No. 42). On January 25, 1980, Delta Motor purchased the property for P2,319,210.00, and TCT No. 26486 was issued on March 4, 1980. Petitioner sought to redeem the land for P8,800.00 under Presidential Decree No. 27. The Court of Agrarian Relations dismissed the complaint, finding the reasonable redemption price to be P2,319,210.00 and not P8,800.00, and directed the defendants to maintain petitioner as agricultural lessee. The Intermediate Appellate Court affirmed this decision. Petitioners elevated the case to the Supreme Court via petition for review on certiorari. During the pendency of the case, the Philippine National Bank extra-judicially foreclosed the subject property.

ISSUE

The main issue is whether the subject property is covered by Presidential Decree No. 27 or Republic Act No. 6389, and consequently, what is the applicable redemption price for the agricultural lessee.

RULING

The Supreme Court dismissed the petition and affirmed the decisions of the lower courts. The Court ruled that the land, consisting of 5.15 hectares, is not covered by Operation Land Transfer under P.D. No. 27 because the retention limit under that decree is seven (7) hectares. Therefore, the applicable law is Section 12 of Republic Act No. 6389, which grants the agricultural lessee the right to redeem the land at a reasonable price at the time of sale. The Court upheld the finding that the reasonable redemption price is P2,319,210.00, the same amount paid by Delta Motor, considering the land’s location in Parañaque near the South Diversion Road, surrounded by residential subdivisions and industrial firms. The Court found this factual finding supported by substantial evidence and thus beyond review on certiorari. The Court also ruled that the transfer to Delta Motor, effected through a court judgment approving a compromise agreement in a partition case, was not a sale as envisioned by R.A. No. 6389 requiring an affidavit of non-tenancy; the lessee’s remedy under the law is redemption, not nullification of the sale. Furthermore, the Court noted that the case had become moot and academic with respect to the claim against Delta Motor due to the extra-judicial foreclosure by the Philippine National Bank. However, petitioners’ rights as agricultural lessees are protected under Section 10 of Republic Act No. 3844, as amended, and they may redeem from the PNB or its subsequent transferees subject to the PNB’s charter.