Sps. Velasquez v. Sps. Nery
REITERATIONFacts
The Antecedents: Petitioners Jose S. Velasquez and Justina Advincula-Velasquez were agricultural lessees of a 51,538 square meter riceland originally possessed by respondent Martin Nery. In 1972, the Supreme Court declared respondents Lorenzos as co-owners, and the land was registered under TCT No. 64132 in the names of respondents Nery and Lorenzo. In 1978, the Lorenzos filed for partition against the Nerys, leading to a compromise agreement where the parties agreed to sell the land to respondent Delta Motor Corporation. Procedural History: In 1979, petitioner Jose B. Velasquez, as agricultural tenant, filed an action for redemption of the subject property under Presidential Decree No. 27 (PD 27), alleging information that the land was for sale. On January 25, 1980, Delta Motor Corporation purchased the property for P2,319,210.00, evidenced by a Deed of Sale, and obtained TCT No. 26486. The Court of Agrarian Relations dismissed the redemption case, finding the reasonable value of the land to be P2,319,210.00 and not P8,800.00, but directed defendants to maintain the plaintiff as agricultural lessee. The Intermediate Appellate Court affirmed this decision. Petitioners appealed to the Supreme Court. The Petition: Petitioners seek to redeem the land from Delta Motors for P8,800.00 under PD 27, contending that the transfer was null and void for lack of an affidavit of non-tenancy. They also argue that the land should be covered by PD 27. The Supreme Court noted that the Philippine National Bank (PNB) had extra-judicially foreclosed the subject property.
Issue(s)
Whether the subject property is covered by Presidential Decree No. 27 or Republic Act 6389. Whether the transfer of the land by respondents Nery and Lorenzos in favor of Delta Motor Corporation is null and void ab initio for failure to comply with the affidavit of non-tenancy requirement. Whether the sum of P8,800.00 is the reasonable redemption price for the subject property.
Ruling
The petition for review on certiorari is dismissed, and the appealed decision of the Intermediate Appellate Court, which affirmed the decision of the defunct Court of Agrarian Relations, is affirmed. The Supreme Court ruled that the reasonable redemption price is P2,319,210.00. The case became moot and academic with regard to the petitioners' claim against Delta Motor Corporation due to the extra-judicial foreclosure by the Philippine National Bank.
Ratio Decidendi
On whether the subject property is covered by PD 27 or RA 6389: The Court held that the agricultural land in question, consisting of 51,538 square meters, is not covered by PD 27 because its retention limit is seven hectares, and this land falls within that limit. Instead, the case is governed by Section 12 of RA 6389, as amended, which grants an agricultural lessee the right to redeem the landholding if sold to a third person without their knowledge, at a reasonable price and consideration at the time of the sale. The Court found that the land's size and location in Parañaque, Metro Manila, surrounded by residential and industrial firms, supported the P2,319,210.00 price as reasonable. On the validity of the transfer and the affidavit of non-tenancy: The Court ruled that the transfer of the land to Delta Motor Corporation was effected through a judgment of the respondent lower court in a civil case, not through a simple sale envisioned by RA 6389. Therefore, the requirement of an affidavit of non-tenancy was not applicable. Furthermore, the Court noted that RA 6389 provides the remedy of redemption for the agricultural lessee, not the declaration of nullity of the sale for lack of knowledge of the lessee. The Court reiterated that the findings of the lower courts regarding the reasonable redemption price were supported by substantial evidence and would not be disturbed on appeal by certiorari. On the reasonable redemption price: The Court agreed with the findings of the Court of Agrarian Relations and the Intermediate Appellate Court that the reasonable redemption price of the land is P2,319,210.00, which was the amount paid by Delta Motors Corporation at the time of the sale. The Court emphasized that the location of the land in Parañaque, Metro Manila, near the South Diversion Road and surrounded by residential subdivisions and industrial firms, were factors supporting this determination of reasonable price. The Court also noted that this price was the same amount paid by Delta Motors Corporation to the other defendants, and there was no showing of collusion. The Court's review was limited to finding substantial evidence supporting the lower courts' factual findings, which was present.
Main Doctrine
An agricultural lessee's right to redeem a landholding sold to a third party is governed by Section 12 of RA 6389, requiring redemption at the reasonable price at the time of sale, not by PD 27 which does not apply to lands within the retention limit. The transfer of land through a court judgment, even if preceded by a sale, is valid and does not require an affidavit of non-tenancy. The agricultural leasehold relation is not extinguished by the sale or transfer of the landholding, with the purchaser being subrogated to the rights and obligations of the lessor.