G.R. No. L-28470; September 19, 1968
REAL MONASTERIO DE LA PURISIMA CONCEPCION DE NUESTRA MADRE SANTA CLARA DE MANILA, petitioner, vs. DOMINGO FABIAN, TEODORO MARZO, EUSEBIO LACSON, ALBERTO GARCIA, QUINTIN GUIAO, EUGENIO AQUINO, RAFAEL SANTOS, RUFINO NAGUIT, TEOFILO NAGUIT, LAMBERTO NAGUIT, MACARIO BACANI and BRIGIDO GARCIA, respondents.

FACTS

The respondents are agricultural lessees (tenants) of three parcels of riceland in Guagua, Pampanga, owned by Elena Pecson. On August 4, 1964, Pecson executed a Deed of Absolute Sale over the land in favor of the petitioner, Real Monasterio de la Purisima Concepcion de Nuestra Madre Santa Clara de Manila (a corporation sole). The tenants were not notified of this sale and learned of it only in late August 1964. The sale was registered, resulting in the cancellation of Pecson’s title and the issuance of a new Transfer Certificate of Title (TCT No. 42854-R) in the corporation’s name. On September 21, 1964, the tenants, through the Agrarian Counsel, formally notified Pecson and the corporation of their exercise of the right of legal redemption under Section 12 of Republic Act No. 3844 (Agricultural Land Reform Code). Subsequently, on November 11 and 12, 1964, Pecson and the corporation executed a “Revocation of Deed of Absolute Sale,” and the title was reissued in Pecson’s name (TCT No. 44076-R) on November 13, 1964. The tenants filed their petition for redemption on November 18, 1964. The Court of Agrarian Relations dismissed the petition, ruling that the revocation of the sale rendered the right to redeem impractical. The Court of Appeals reversed this decision, upholding the tenants’ right to redeem.

ISSUE

Whether the agricultural lessees (tenants) validly exercised their right of legal redemption under Section 12 of Republic Act No. 3844 , notwithstanding the subsequent revocation of the deed of sale by the vendor and vendee.

RULING

Yes. The Supreme Court affirmed the decision of the Court of Appeals, upholding the tenants’ right of redemption. The Court held:
1. The right of legal redemption under Section 12 of RA 3844 accrues to agricultural lessees upon the sale of the landholding to a third person without their knowledge. This right may be exercised within two years from the registration of the sale.
2. The tenants validly exercised this right on September 21, 1964, by making a formal notice and demand upon the vendor and vendee, which was well within the two-year period from the registration of the sale.
3. The subsequent “Revocation of Deed of Absolute Sale” executed by Pecson and the corporation after the tenants had formally asserted their right of redemption is void as against public policy. Its obvious purpose was to defeat the tenants’ statutory right under RA 3844, making it a contract whose purpose is contrary to law and public policy under Article 1409(1) of the Civil Code.
4. The fact that the title was subsequently reconveyed to the original owner does not extinguish the right of redemption that had already been timely exercised. To hold otherwise would render the statutory right unstable and ineffectual.
5. The defense that the Deed of Absolute Sale was simulated and the real intention was to donate the property (as evidenced by earlier deeds of promise to donate and donation) was unavailing. The corporation cooperated in giving effect to the sale by registering it and securing a new title in its name.
6. The Supreme Court remanded the case to the trial court for the determination of the “reasonable price” for redemption, as this was not established in the proceedings. The Court also clarified that under the law, the entire landholding must be redeemed, and if there are multiple lessees, the division of any excess area beyond their individual cultivated portions is a matter to be settled among them.