EN BANC

[G.R. No. L-26255. June 30, 1969.]

PABLO BASBAS , plaintiff-appellant, vs. RUFINO ENTENA, FLAVIANO

TIBAY and ANGELINA ENTENA (Spouses), and R. M.
RESURRECCION as acting Registrar of Deeds of the Province of
Laguna , defendants-appellees.

Sabio, Bonifacio & De Jesus for plaintiff-appellant.

Domingo T. Zaballa for defendants-appellees.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; AGRICULTURAL LAND REFORM CODE;

RIGHT OF LEGAL REDEMPTION; TENDER OR CONSIGNATION OF THE PRICE
REQUIRED. — The timely exercise of the right of legal redemption requires either tender
of the price or valid consignation thereof.
2. ID.; ID.; ID.; ID.; PAYMENT OF REASONABLE PRICE NOT OBSTACLE TO
REQUIREMENT OF TENDER. — The right of a redemptioner to pay a reasonable price
under Art. 1620 does not excuse him from the duty to make proper tender of the price
that can be honestly deemed reasonable under the circumstances, without prejudice to
nal arbitration by the courts; nor does it authorize said redemptioner to demand that
the vendee accept payment by installments.
3. ID.; ID.; ID.; RIGHT TO BE EXERCISED WITHIN SPECIFIED TIME LIMITS. —
Both under the Land Reform Act and Art. 1620 of the Civil Code, the right of legal
redemption must be exercised within speci ed time limits: and the statutory periods
would be rendered meaningless and of easy evasion unless the redemptioner is
required to make an actual tender in good faith of what he believed to be the
reasonable price of the land sought to be redeemed.
4. ID.; ID.; ID.; REQUIREMENT OF PRIOR TENDER OR CONSIGNATION
AFFORDS AN OPPORTUNITY TO AVOID LITIGATION. — It may be added that unless
tender or consignation is made requisite to the valid exercise of the tenant's right to
redeem, everytime a redemption is attempted, a case must be led in court to ascertain
the reasonable price. On the other hand, a prior tender by the tenant of the price that he
considers reasonable affords an opportunity to avoid litigation, for the landowner may
well decide to accept a really reasonable offer, considering that he would thereby save
the attorney's fees and the expense of protracted litigation.
5. ID.; ID.; ID.; RUNNING OF THE REDEMPTION PERIOD NOT DEPENDENT
UPON TENANT'S OPPORTUNITY TO OBTAIN FUNDS. — There is no expression in the
law (R.A. 3844) which indicates, or even hints, that the 2-year redemption period will not
commence to run until the tenant obtains nancing from the Land Bank, or stops the
tenant from securing redemption funds from some other source. The considerations
expressed in this decision on the con scatory result of requiring the landowner to wait
an inde nite time until the lessee acquires the means for making the redemption
militate against construing the statement of purposes for which the Land Bank is
created (Sec. 74) as condition precedent to the alienation of a landholding.
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 6. ID.; ID.; LAND BANK; OBJECTIVE. — The Land Bank is intended "to nance
the acquisition by the Government of landed estates for division and resale to small
landholders, as well as the purchase of the landholding by the agricultural lessee from
the landowner."

DECISION

REYES, J.B.L. , J : p

This is an appeal from the decision of the Court of Agrarian Relations, in CAR
Case No. 1478, Laguna '65, on the sole question of whether tender of payment and
judicial consignation of the purchase price are necessary before a tenant-lessee may
avail of the right of pre-emption or of redemption provided in Sections 11 and 12 of the
Agricultural Land Reform Code.
In the action led by tenant Pablo Basbas in the Court of Agrarian Relations
against the alleged landholder or landholders Ru no Entena and the spouses Flaviano
Tibay and Angelina Entena, the parties agreed to stipulate on the following facts:
"1. That plaintiff Pablo Basbas is the leasehold tenant of a 1- 1/2
hectare parcel of riceland, known as Lot No. 1520 of the Sta. Rosa Estate
Subdivision, located at Barrio Dila, Sta. Rosa, Laguna, formerly owned by
defendant Ru no Entena and presently owned by spouses Flaviano Tibay and
Angelina Entena, his co-defendants.

"2. That on April 11, 1964, defendant Rufino Entena executed a deed of
sale of the aforementioned lot in favor of defendant spouses Flaviano Tibay and
Angelina Entena.
"3. That on May 25, 1964, defendant Ru no Entena sent a letter,
marked Exhibit 'I', to plaintiff, to which the latter sent a reply dated June 4, 1964,
marked as Exhibit 'A'.

"4. That under date of June 4, 1964, plaintiff wrote a letter, marked
Exhibit 'B', to the Governor of the Land Authority, to which he received a reply from
the Acting O cer in Charge of the Land Authority, dated June 22, 1964, which is
marked as Exhibit 'C', of which reply (Exhibit 'C') defendants have not been given
copy or otherwise informed.
"5. That the deed of sale mentioned in paragraph 2 hereof, was
registered in the o ce of the register of deeds of Laguna on May 26, 1964. The
certification of the Register of Deeds respecting said sale is marked as Exhibit 'D'.

"6. That defendant Ru no Entena and his wife Aniceta Carapatan executed an
affidavit, dated April 11, 1964, marked as Exhibit 'I' — defendant Register of Deeds.
"7. That defendant spouses Flaviano Tibay and Angelina Entena are son-in-
law and daughter, respectively, of defendant Ru no Entena, and said spouses live
separately from their father.
"8. That plaintiff has not deposited any sum of money in this Court to cover
the pre-emption or redemption price."
Exhibit "I" mentioned above (No. 3, Stipulation) refers to a letter sent by Ru no Entena
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 to the tenant, to the effect that the landholding was being put up for sale at P13,000.00
per hectare and the tenant being given 90 days within which to communicate his
intention to purchase the same: otherwise, the land would be offered to other buyers
(page 1, folder of exhibits). Exhibit "A" (No. 3, Stipulation) is the tenant's reply to the
landholder dated June 4, 1964, accepting the latter's offer to sell the land, although
disagreeing to the quoted price therefor. The tenant in the same letter informed the
landholder that he was enlisting the aid of the government in purchasing the land, as
allowed by law. Exhibit "3" (No. 4, Stipulation) is the tenant's letter of June 4, 1964
addressed to the Governor of the Land Authority, asking the help of said agency to
acquire the land he was working on and which was being offered for sale. Exhibit "C"
(No. 4, Stipulation) is the answer of the Acting O cer in Charge of the Land Authority,
informing the tenant that his petition was already being processed and de nite action
thereon will be taken as soon as the Land Bank shall have been fully organized. Exhibit
"I"-Register of Deeds" (No. 6, Stipulation) is the sworn a davit of the spouses Ru no
Entena and Aniceta Carapatan, dated April 11, 1964, attesting to the alleged fact that
the tenant, Pablo Basbas, was fully noti ed of the sale of their land 90 days before said
conveyance, and that the tenant had refused, or failed to exercise, the right of pre-
emption granted him under the Agricultural Land Reform Code (page 6, folder of
exhibits). The submission of this a davit enabled the registration on May 26, 1964 of
the deed of sale in favor of vendees Flaviano Tibay and Angelina Entena.
On the basis of the aforequoted stipulation of facts, the Agrarian Court
dismissed the case, reasoning that as the plaintiff failed to make tender of payment
and consignation of the purchase price the landowner can not be compelled to sell the
property to him. Plaintiff-tenant thus interposed the present appeal.
The appellant-tenant's claim to preference in purchasing the land he is working
on, in case the said land is to be sold, or to his right to redeem it in 2 years should the
land be sold without his knowledge, is predicated upon Sections 11 and 12 of the
Agricultural Land Reform Code (Republic Act 3844):
"SEC. 11. Lessee's Right of Pre-emption .—In case the agricultural lessor decides to
sell the landholding, the agricultural lessee shall have the preferential right to buy the same
under reasonable terms and conditions: Provided, That the entire landholding offered for sale
must be pre-empted by the Land Authority if the owner so desires unless the majority of the
lessees object to such acquisition: Provided, further, That where there are two or more
agricultural lessees, each shall be entitled to said preferential right only to the extent of the
area actually cultivated by him. The right of pre-emption under this section may be exercised
within ninety days from notice in writing, which shall be served by the owner on all lessees
affected."
"SEC. 12. Lessee's Right of Redemption .—In case the landholding is sold to a third
person without the knowledge of the agricultural lessee, the latter shall have the right to
redeem the same at a reasonable price and consideration: Provided, That the entire
landholding sold must be redeemed; Provided, further, That where there are two or more
agricultural lessees, each shall be entitled to said right of redemption only to the extent of the
area actually cultivated by him. The right of redemption under this Section may be exercised
within two years from the registration of the sale, and shall have priority over any other right
of legal redemption."
The case herein, which positively is an exercise by the tenant of his right to
redeem the landholding, 1 was nevertheless dismissed, the Agrarian Court considering
as fatal the tenant's failure to tender payment or consign the purchase price of the
property.
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 It is argued for the appellant-lessee that the Court of Agrarian Relations erred in
dismissing the action for non-tender of the redemption price, since the law nowhere
requires such tender, and, furthermore, the tenant is not bound to redeem his
landholding at the price for which it was sold, but only at a reasonable price and
consideration.
We nd that no error was committed in dismissing the case. In the rst place,
there is no showing that the Land Reform Council has proclaimed that the government
machineries and agencies in the region are already operating, as required by Section 4
of Republic Act 3844.
In the second place, granting that Sections 11 and 12 are operative, yet in Torres
de Conejero, et al. vs. Court of Appeals, et al., L-21812, April 29, 1966, 16 SCRA 775, this
Court ruled that the timely exercise of the right of legal redemption requires either
tender of the price or valid consignation thereof. Said the Court in said case (16 SCRA,
pages 781-782):
"It is not di cult to discern why the redemption price should either be fully
offered in legal tender or else validly consigned in court. Only by such means can
the buyer become certain that the offer to redeem is one made seriously and in
good faith. A buyer can not be expected to entertain an offer of redemption
without attendant evidence that the redemptioner can, and is willing to
accomplish the repurchase immediately. A different rule would leave the buyer
open to harassment by speculators or crackpots, as well as to unnecessary
prolongation of the redemption period, contrary to the policy of the law. While
consignation of the tendered price is not always necessary because legal
redemption is not made to discharge a pre-existing debt (Asturias Sugar Central
vs. Cane Molasses Cc., 60 Phil. 253), a valid tender is indispensable, for the
reasons already stated. Of course, consignation of the price would remove all
controversy as to the redemptioner's ability to pay at the proper time."

This Court further elaborated the point in its ruling on the motion to reconsider in
the Torres case (16 SCRA, pages 783-784):
"3. Whether or not the petitioners exercised diligence in asserting their
willingness to pay is irrelevant. Redemption by the co-owners of the vendor within
30 days is not a matter of intent, but is effectuated only by payment, or valid
tender, of the price within said period. How the redemptioners raise the money is
immaterial; timeliness and completeness of payment or tender are the things that
matter.

"4. The offer of the redemption price is not bona fide where it is shown
that the offerer could not have made payment in due time if the offer had been
accepted. Note that the co-owner's right to redeem, being granted by law, is
binding on the purchaser of the undivided share by operation of law, and the
latter's consent or acceptance is not required for the existence of the right of
redemption. The only matter to be investigated by the courts, therefore, is the
timely exercise of the right, and the only way to exercise it is by a valid payment or
tender within the 30 days prefixed by the Civil Code."

That the legal redemptioner is only required to pay a reasonable price is no

obstacle to the requirement of tender, as ruled also in the Torres case (16 SCRA, page
781):
"It is, likewise, argued that tender of the price is excused because Article
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 1620 of the new Civil Code allows the redemptioner to pay only a reasonable price
if the price of alienation is grossly excessive, and that the reasonableness of the
price to be paid can only be determined by the courts. We think that the right of a
redemptioner to pay a reasonable price under Article 1620 does not excuse him
from the duty to make proper tender of the price that can be honestly deemed
reasonable under the circumstances, without prejudice to nal arbitration by the
courts; nor does it authorize said redemptioner to demand that the vendee accept
payment by installments, as petitioners have sought to do."

In our opinion, the foregoing considerations are applicable to redemption (and

pre-emption) under Sections 11 and 12 of the Land Reform Act. Both under said law
and under Article 1620 of the Civil Code, the right of legal redemption must be
exercised within speci ed time limits: and the statutory periods would be rendered
meaningless and of easy evasion unless the redemptioner is required to make an actual
tender in good faith of what he believed to be reasonable price of the land sought to be
redeemed. The existence of the right of redemption operates to depress the market
value of the land until the period expires, and to render that period inde nite by
permitting the tenant to le a suit for redemption, with either party unable to foresee
when nal judgment will terminate the action, would render nugatory the period of two
years xed by the statute for making the redemption and virtually paralyze any efforts
of the landowner to realize the value of his land. No buyer can be expected to acquire it
without any certainty as to the amount for which it may be redeemed, so that he can
recover at least his investment in case of redemption. In the meantime, the landowner's
needs and obligations can not be met. It is doubtful if any such result was intended by
the statute, absent clear wording to that effect.
The situation becomes worse when, as shown by the evidence in this case, the
redemptioner has no funds and must apply for them to the Land Authority, which, in
turn, must depend on the availability of funds from the Land Bank. It then becomes
practically certain that the landowner will not be able to realize the value of his property
for an indefinite time beyond the two years redemption period.
The appellant herein, like the appellants in the Torres case, urge that this Court
has ruled that previous tender of the redemption money is not indispensable in De la
Cruz vs. Marcelino, 84 Phil. 709, and Torio vs. Del Rosario, 93 Phil. 800. It was, however,
pointed out in the Torres decision that in the two cases relied upon by appellant the
redemptioners had consigned or deposited in court the redemption price when action
was led, for which reason prior tender was held excused. In the case now before us,
there was neither prior tender nor did judicial consignation accompany the ling of the
suit. Furthermore, in the cases aforesaid, the Court took into account the brevity of the
periods (9 days) allowed by the law operating at the time (Civil Code of 1889); in the
case at bar, the statute grants the tenant two years to redeem.
It may be added that unless tender or consignation is made requisite to the valid
exercise of the tenant's right to redeem, everytime a redemption is attempted, a case
must be led in court to ascertain the reasonable price. On the other hand, a prior
tender by the tenant of the price that he considers reasonable affords an opportunity to
avoid litigation, for the landowner may well decide to accept a really reasonable offer,
considering that he would thereby save the attorney's fees and the expense of
protracted litigation.
Section 74 of the Land Reform Act (Republic Act No. 3844) establishes a "Land
Bank of the Philippines" intended 'to nance the acquisition by the Government of
landed estates for division and resale to small landholders, as well as the purchase of
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 the landholding by the agricultural lessee from the landowner." No expression in this
part of the law, however, indicates, or even hints, that the 2-year redemption period will
not commence to run until the tenant obtains nancing from the Land Bank, or stops
the tenant from securing redemption funds from some other source. The
considerations expressed in this decision on the con scatory result of requiring the
landowner to wait an inde nite time until the lessee acquires the means for making the
redemption militate against construing the statement of purposes for which the Land
Bank is created (Section 74) as condition precedent to the alienation of a landholding.
WHEREFORE, the appealed order granting the motion to dismiss the complaint is
affirmed. No costs.
Concepcion, C.J., Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano,
Teehankee and Barredo, JJ., concur.
Dizon, J., took no part.
Footnotes
1. When the tenant was notified on May 25, 1964 that the landholding was for sale, the
same property was already conveyed in favor of the spouses Flaviano Tibay and
Angelina Entena.

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