Basbas v. Entena
REITERATIONFacts
The Antecedents: Pablo Basbas, a leasehold tenant of a 1.5-hectare parcel of riceland, was informed by the landowner, Rufino Entena, that the landholding was for sale at P13,000.00 per hectare, with a 90-day period for the tenant to communicate his intention to purchase. Entena subsequently executed a deed of sale in favor of his son-in-law and daughter, spouses Flaviano Tibay and Angelina Entena. The deed of sale was registered in the Register of Deeds of Laguna. The tenant, Basbas, communicated his intention to purchase the land but disagreed with the price and sought government assistance. He did not deposit any sum of money in court to cover the purchase price. Procedural History: The tenant filed an action in the Court of Agrarian Relations seeking to exercise his right of pre-emption or redemption. The Agrarian Court dismissed the case, holding that the tenant's failure to make a tender of payment and judicial consignation of the purchase price was fatal to his claim. The Petition: The tenant appealed the dismissal, arguing that the law does not require tender of payment or consignation and that he is only bound to redeem at a reasonable price.
Issue(s)
Is tender of payment and judicial consignation of the purchase price necessary before a tenant-lessee may avail himself of the right of pre-emption or of redemption provided in Sections 11 and 12 of the Agricultural Land Reform Code?
Ruling
The Supreme Court affirmed the order of the Court of Agrarian Relations dismissing the case. The Court held that the tenant's failure to make a tender of payment or judicial consignation of the purchase price was fatal to his claim.
Ratio Decidendi
On Issue 1: The Supreme Court affirmed the dismissal of the case, holding that tender of payment and judicial consignation of the purchase price are indeed necessary for the timely exercise of the right of legal redemption or pre-emption. The Court referenced its ruling in Torres de Conejero, et al. vs. Court of Appeals, et al. (L-21812, April 29, 1966), which established that only by full offer in legal tender or valid consignation can the buyer be certain that the offer to redeem is serious and in good faith. A buyer cannot be expected to entertain an offer of redemption without attendant evidence that the redemptioner can and is willing to accomplish the repurchase immediately, as a different rule would leave the buyer open to harassment and unnecessary prolongation of the redemption period. The Court clarified that while consignation is not always necessary (as redemption is not discharging a pre-existing debt), a valid tender is indispensable, and consignation would remove all controversy as to the redemptioner's ability to pay. Furthermore, the Court rejected the argument that tender is excused because Article 1620 of the Civil Code allows a redemptioner to pay only a reasonable price if the alienation price is grossly excessive, stating that the right to pay a reasonable price does not excuse the duty to make a proper tender of what can be honestly deemed reasonable. The statutory periods for redemption, such as the two years granted to tenants, would be rendered meaningless and easily evaded unless actual tender in good faith is required, as allowing a suit to determine reasonableness without prior tender would paralyze the landowner's ability to realize the value of their land. The Court also noted the absence of a proclamation by the Land Reform Council regarding the operation of government machineries and agencies in the region, as required by Section 4 of Republic Act No. 3844, though this was a secondary point to the lack of tender/consignation. Moreover, the Court distinguished De la Cruz vs. Marcelino and Torio vs. Del Rosario by pointing out that in those cases, the redemptioners had already consigned or deposited the redemption price in court when the action was filed, and those cases involved much shorter redemption periods (9 days) compared to the two years granted to the tenant in the present case, thus making prior tender less critical in those specific contexts.
Main Doctrine
The timely exercise of the right of legal redemption or pre-emption under Sections 11 and 12 of the Agricultural Land Reform Code requires either a tender of the purchase price or a valid judicial consignation thereof. Failure to do so renders the exercise of the right ineffective.