Real Monasterio v. Fabian
REITERATIONFacts
The Antecedents: Respondents herein were leasehold tenants of Elena Pecson on three parcels of riceland. On April 24, 1963, Pecson executed a Promise to Donate the said lands to Real Monasterio de la Purisima Concepcion de Nuestra Madre Santa Clara de Manila (hereinafter referred to as the Corporation). Subsequently, on June 27, 1963, a Deed of Donation Inter Vivos was executed, and accepted on June 28, 1963. On August 4, 1964, Pecson executed a Deed of Absolute Sale of the same properties in favor of the Corporation. The tenants were not notified of this sale and only learned of it in late August 1964. Procedural History: On September 21, 1964, the tenants formally notified Pecson and the Corporation of their intent to exercise their legal right of redemption. As no amicable settlement was reached, the tenants instituted a suit. The trial court dismissed the case, ruling that the tenants' right of redemption had become impractical or unnecessary because the property had been reissued in Pecson's name after a revocation of the sale. The Court of Appeals reversed this decision, upholding the tenants' right to redeem. The Appeal: The Corporation appealed to the Supreme Court, arguing that the Court of Appeals erred in doubting the validity of the donation, assuming the deed of sale was binding on the Corporation, imputing fraud, and recognizing the tenants' right of redemption based on a void deed of sale. The Corporation contended that the deed of sale was not real, but a donation, and that the subsequent revocation extinguished the tenants' right.
Issue(s)
Whether the Court of Appeals erred in upholding the tenants' right of legal redemption under Section 12 of Republic Act No. 3844, given the prior donation and subsequent revocation of the deed of absolute sale between Elena Pecson and the Real Monasterio de la Purisima Concepcion de Nuestra Madre Santa Clara de Manila. Whether the right of legal redemption under Section 12 of Republic Act No. 3844 is limited to the area "actually cultivated" by each agricultural lessee or if it applies to the "entire landholding." Whether there was sufficient evidence to establish the "reasonable price and consideration" for the legal redemption of the property.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, except as to the price of redemption, which was remanded to the trial court for further determination. The Court held that the tenants have the right to redeem the entire landholding.
Ratio Decidendi
On Issue 1: The Supreme Court held that the Court of Appeals did not err in upholding the tenants' right of legal redemption. The core of the matter was whether the sale attested to by the deed of absolute sale was real or fictitious, which is a question of fact dependent on the intention of the parties. The Court of Appeals' finding that the statements made by Miss Pecson and the Corporation in their deed of revocation were "unworthy of credence" was a finding of fact, which is conclusive upon the Supreme Court in certiorari proceedings. The Supreme Court found no reason to disturb this finding, considering several circumstances: (1) The donation and acceptance were not registered, nor was the donation annotated on Pecson's title, suggesting they were not meant to be what they appeared. (2) The Corporation clearly knew about and cooperated in the enforcement of the deed of sale, as evidenced by its registration and the issuance of a new title in the Corporation's name due to the sale, not the donation. (3) The Corporation joined Pecson in executing the deed of revocation, which stipulated the cancellation of the Corporation's title and the reissuance of a title in Pecson's name, an action unnecessary if their true intention was only donation, strongly suggesting an ulterior motive to put the property back in Pecson's name. (4) The revocation occurred after the tenants formally asserted their right to redeem, providing a ground for the defense that there was "no more right of redemption to exercise," indicating an attempt to circumvent the tenants' statutory right. (5) The deed of revocation itself provided for the execution of future deeds to reflect their "real intention or desire," implying that neither the donation nor the revocation truly expressed their full intent. The Court concluded that the various transactions were designed to defeat the tenants' statutory right to legal redemption, making the revocation void as against public policy under Article 1400 of the New Civil Code. On Issue 2: The Supreme Court clarified that the right of legal redemption under Section 12 of Republic Act No. 3844 mandates that "the entire landholding must be redeemed." The Court specifically rejected the contention that the right of redemption should be limited only "to the extent of the area actually cultivated" by each tenant. It elucidated that the proviso "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" merely serves to prevent conflicts and delineate shares between the lessees themselves. It means one tenant cannot exercise the right over a portion held by another tenant. It does not, however, grant the lessor or buyer any right to limit the total area subject to collective redemption by the tenants. Any division of excess area among the tenants, if the redeemed property is larger than their individual cultivated areas, must be settled by mutual agreement or appropriate judicial proceedings among the tenants themselves. On Issue 3: The Supreme Court found the objection regarding the lack of proof for the "reasonable price" of the property to be well taken. Section 12 of Republic Act No. 3844 explicitly states that redemption shall be made "at a reasonable price and consideration." The record showed that no evidence had been introduced by the parties to determine this "reasonable price." Therefore, while affirming the tenants' right to redeem the property, the Court ruled that the case must be remanded to the trial court. This remand is specifically for the purpose of determining the reasonable price of the property, after due notice to the parties and proper hearing, ensuring that the statutory requirement for redemption at a fair value is met.
Main Doctrine
The right of legal redemption granted to agricultural lessees under Section 12 of Republic Act No. 3844 is a statutory right that cannot be defeated by simulated or fraudulent transactions between the landowner and a third party. The Court will look beyond the face of documents to ascertain the true intention of the parties, especially when such transactions are used to prejudice the rights of lessees. Furthermore, a revocation of a deed of sale, if executed with the intent to circumvent the lessee's right of redemption and after such right has been asserted, is considered void as against public policy.