Padasas v. Bentajado
REITERATIONFacts
The Antecedents: Petitioner Benedicto Padasas was the leasehold tenant of Lot 598-B-6. The lot was originally owned by Soledad Delgado Vda. de Gestano, then mortgaged to the Development Bank of the Philippines (DBP) and subsequently foreclosed, with DBP acquiring title on August 1, 1960. DBP executed a conditional sale of the land to respondent Avelina M. Bentajado on September 28, 1965. The sale became absolute and title was issued to Bentajado on May 4, 1970. Procedural History: Petitioner filed an action for redemption on June 19, 1968, alleging the sale was without his knowledge and consent, in violation of Republic Act No. 3844. Respondent moved to dismiss based on res judicata, citing a previous case dismissed on July 26, 1966, where the court found petitioner failed to exercise his right of redemption within the prescribed period. The lower court denied the motion to dismiss, declared respondent in default, and rendered a decision in favor of petitioner, recognizing his right to redeem for P3,800.00 and ordering respondent to pay attorney's fees. On appeal, the Court of Appeals reversed the decision, ruling that the issue was barred by res judicata. The Petition: Petitioner seeks review of the Court of Appeals' decision, raising issues regarding the applicability of Section 12 of R.A. 3844, whether res judicata applied, and the effect of the non-registration of the conditional sale. Subsequently, petitioner manifested that he had acquired ownership of the land through an auction sale on April 30, 1976, rendering the redemption issue moot and academic. Respondent, however, sought resolution to determine entitlement to rentals prior to petitioner's acquisition of title.
Issue(s)
Whether Section 12 of Republic Act No. 3844, granting tenants the right of redemption within two years from the registration of the sale, is applicable. Whether the petitioner lost his right to redeem due to res judicata, considering the period of redemption was allegedly calculated before the registration of the sale to respondent. Whether the non-registration of the conditional sale to respondent constituted a bar to the petitioner's right to redeem after the final sale was registered. Whether the subsequent acquisition of ownership by the petitioner through an auction sale rendered the redemption issue moot and academic.
Ruling
The Supreme Court reversed and set aside the decision of the Court of Appeals. It declared that petitioner properly exercised his right of redemption by depositing the redemption price on November 3, 1970, and is entitled to rentals only after said date. The Court ordered the return of the deposited redemption price and rentals to the petitioner, and awarded attorney's fees.
Ratio Decidendi
On the applicability of Section 12, R.A. 3844 and the period for redemption: The Court held that Section 12 of Republic Act No. 3844 is applicable. The law mandates that the two-year period for redemption must be counted from the date of registration of the sale, not from the date of knowledge or notice. The Court emphasized that R.A. 3844 is social legislation requiring liberal interpretation to give full force and effect to its intent, and holding a tenant bound by constructive notice upon mere knowledge would shorten the redemption period contrary to the clear provisions of the Code. The Court reiterated that the registration of the sale is the operative event for commencing the redemption period, and any prior knowledge or notice does not legally commence this period until after the title has passed to the buyer through registration. On the nature of the sale and res judicata: The Court clarified that the 'sale' contemplated under Section 12 of R.A. 3844 must refer to a consummated sale that divests the owner of title and ownership, not merely a conditional sale. In this case, the DBP executed a conditional sale on September 28, 1965, but the title remained with DBP until the sale became absolute and was registered on May 4, 1970. The previous dismissal of a case based on res judicata was found to be based on an incorrect calculation of the redemption period, as it did not consider the registration date of the absolute sale. The Court found that the petitioner's right to redeem arose upon the registration of the absolute sale, and the prior dismissal was not a bar to this right. On the effect of non-registration of the conditional sale: The Court ruled that the non-registration of the conditional sale in favor of respondent Bentajado did not constitute a bar for the petitioner to redeem the property. The crucial event for the commencement of the redemption period was the registration of the consummated sale, which divested the seller of title. Since the conditional sale did not transfer ownership, its non-registration was not determinative of the tenant's right to redeem under R.A. 3844. On the issue of mootness due to subsequent acquisition of ownership: The Court found the petitioner's contention that the issue had become moot and academic due to his subsequent acquisition of ownership through an auction sale to be meritorious. The merger of the petitioner's tenancy rights and ownership over the landholding meant that the relief prayed for in the petition was absorbed by his full ownership. Therefore, a resolution on the res judicata issue was deemed unnecessary, as the petitioner had ultimately become the owner of the land.
Main Doctrine
The two-year period for a tenant to exercise the right of redemption under Section 12 of Republic Act No. 3844 is counted from the date of registration of the sale, not from the date of knowledge or notice of the sale. Furthermore, the 'sale' contemplated by the law refers to a consummated sale that divests the owner of title and ownership, not a conditional sale.