Philbancor Finance, Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: Private respondents, agricultural tenants for over fifty years, filed a complaint against petitioners Philbancor Finance, Inc. and Vicente Hizon, Jr. They alleged that Hizon mortgaged the agricultural lands they tenanted to Philbancor without their knowledge. When Hizon defaulted on his loan, Philbancor foreclosed on the properties and acquired them through a public auction. The private respondents only learned of this transaction when Philbancor notified them to vacate the lands, prompting their legal action to maintain possession and exercise their right of redemption. Procedural History: The private respondents initiated their case by filing a complaint with the Provincial Agrarian Reform Adjudication Board (PARAB). The PARAB ruled in favor of the private respondents, ordering the redemption of the land and directing Philbancor to execute the necessary deed. After petitioners' motion for reconsideration was denied, they appealed to the Department of Agrarian Reform Adjudication Board (DARAB). The DARAB affirmed the PARAB's decision in its entirety. Subsequently, the petitioners filed a petition for review with the Court of Appeals, which also dismissed their petition. A motion for reconsideration before the Court of Appeals was likewise denied, leading to the present appeal. The Petition: The petitioners seek a review via certiorari of the Court of Appeals' decision. The core issue presented to the Supreme Court is whether the private respondents could still exercise their right of redemption. The petitioners argue that the private respondents invoked this right on July 14, 1992, which is seven years after the registration of the certificate of sale on July 31, 1985. This, they contend, falls outside the two-year redemption period provided by Section 12 of Republic Act No. 3844, as amended.
Issue(s)
Whether the private respondents could still exercise their right of redemption of the parcels of land sold at public auction due to foreclosure of the mortgages thereon, considering that they invoked their right to redeem only on July 14, 1992, seven years after the date of registration of the certificate of sale with the Register of Deeds. Whether the private respondents, as agricultural tenants, could continue in possession and enjoyment of the land, notwithstanding the loss of their right of redemption.
Ruling
The Court granted the petition for review on certiorari, reversed the decision of the Court of Appeals, and ordered the dismissal of the complaint for redemption. However, it affirmed the right of the private respondents to continue as agricultural tenants in peaceful possession and enjoyment of the land.
Ratio Decidendi
On the right of redemption: The Court held that the private respondents could no longer exercise their right of redemption. Section 12 of Republic Act No. 3844 clearly provides that the right of redemption may be exercised within two (2) years from the registration of the sale. In this case, the certificate of sale was registered on July 31, 1985, making the redemption period expire on July 31, 1987. The private respondents filed their complaint for redemption on July 14, 1992, which was five years after the expiration of the statutory redemption period. Therefore, their right to redeem had already lapsed. On the right to continue as tenants: The Court clarified that while the right of redemption was lost, the private respondents could still continue in possession and enjoyment of the land as legitimate tenants. This is because the right of tenancy attaches to the landholding by operation of law, and the leasehold relation is not extinguished by the alienation or transfer of the legal possession of the landholding. This principle was reiterated in cases such as Cuaño v. Court of Appeals, Hidalgo v. Hidalgo, Tanpingco v. IAC, and PNB v. Court of Appeals.
Main Doctrine
The right of an agricultural lessee to redeem a landholding sold at public auction due to foreclosure of mortgage, as provided under Section 12 of Republic Act No. 3844, must be exercised within the two-year period from the registration of the sale. Failure to file the complaint for redemption within this period results in the loss of such right.