Redemption

Classification vs. Reclassification

In the law, when it talks about agricultural land, it uses the word
classify, not reclassify. But the latter is used in decided cases.

GCC also observes that the Court uses the word redistribution without
referring to a previous distribution.

Rights that a Legitimate Lessee Can Invoke:

1. Right of preemption
2. Right of redemption
3. Transferee is subjugated to the obligations of the lessor

How Redemption Takes Effect

Ex: You have a real estate mortgage for a loan. The property is used as
collateral. Normally, there is a provision regarding the obligation and
how it is to be paid. Usually also, the remedy of foreclosure is provided.

Forms of foreclosure:

1. Extrajudicial
a. Notarial
b. Sheriff’s foreclosure
i. You need to file an application before the office of the
clerk of court to foreclose the property
ii. It will be docketed and you should pay the fees
iii. Application will be raffled among the sheriffs
iv. The sheriff would issue a notice of extrajudicial
foreclosure
v. This notice will be published in a newspaper of general
circulation (consecutively and at least 3 times)
vi. There will be a bidding
vii. Highest bidder is declared
 viii.
A certificate of sale will be issued by the sheriff
ix.
The COS will be approved by the executive judge
x.
The taxes would be paid
xi.
COS is registered with the ROD
xii.
There is a 1 year redemption period
xiii.
If there is no redemption, it’s time to consolidate
xiv.
Mortgagee will execute an affidavit of consolidation
xv.
Submit the affidavit to ROD
xvi.
ROD cancels the title and issues a new title to the
highest bidder
If there are no other bids aside from the mortgagee-creditor,
2. Judicial

In ordinary foreclosure, reckon the 1-year period from the registration

of the COS.

Period under Section 12:

 Not 1 year but 180 days.

 Not reckoned from registration of the sale
 There must be notice in writing served in the vendee on all lessees
affected and the Department of Agrarian Reform
Po v. Dampal

 Po emerged as the highest bidder for a foreclosed lot.

 The original owner and the tenant filed a civil case against the
bank for annulment of mortgage.
o Filing of the civil case ahead of the filing of the complaint for
legal redemption is very relevant. (Tenant was a party-
plaintiff to the civil case.)
 Tenant filed another case with DARAB for legal redemption.
 Holding of DARAB: The fact that there was a civil case filed by the
tenant before the complaint of legal redemption, it presupposes
that the tenant was already notified of the sale where Po emerged
 as the highest bidder. Since the tenant had notice, then the period
to redeem should be reckoned from that time.
 Holding of SC: SC had to look at the provision of Section 12. The
fact that the tenant had filed a civil case cannot be considered as a
substantial compliance because of the express requirement in
Section 12 that the 180-day period should start from the time of
notice of writing served upon all concerned. Thus, notice should
be complied for the purpose of redemption.
Castro v. Mendoza

 Issue is about redemption price

 Look at section 12. It talks about period of redemption and price.
If the land is sold to a third person without the knowledge of the
agricultural lessee, the lessee shall have the right to redeem the
sale at a reasonable price and consideration
 What is meant by reasonable price?
 There are legitimate tenants of the land. The owner died. One of
the heirs sold his interest to an LGU. After that, the LGU
constructed a public market
 After inauguration of the market, tenant filed redemption.
 When the tenants applied for redemption, they consigned in court
Php2,000.
 2 ways to comply with a valid redemption
o Tender of payment (not judicial) and consignation of the
reasonable redemption price (if payment is not accepted)
o Filing of complaint (judicial) plus consignation of the
reasonable redemption price
Consignation: Money has to be deposited in court. But the
depositor will have to pay a fee.
 Is the redemption valid?
o No. Amount consigned was not enough.
 What is the reasonable price here?
 o According to SC, it is the amount of money the LGU paid to
the heir who sold the property. It was Php1.2 million.
Albor

 Similar facts with Castro, but this time, it is through Deed of

Absolute Sale.
 Consideration of DOAS: Php600,000
 Amount consigned by tenant: Php60,000
 Ruling: No valid redemption
 There were substitutions of lawyers. The petition was dismissed
because they filed out of time. They only had 15 days to appeal.

For Castro and Albor, the lesson is this. You don’t only concern yourself
about the compliance with the 180-day period. You should also concern
yourself with the redemption price.

Illegal act but practiced: There are different price declared for BIR (tax
purposes) and redemption price. The government can go after the buyer
here for defrauding the government.

Grounds to Dispossess (Section 36)

 Dispossess can mean ejectment or removal
 Section 36
o There are grounds here related to the contract of lease.
o 3844 is not the same as 6657 or PD 27. In 3844, there is no
ownership by the lessee.
o There can be agreements in the contract of lease and if the
tenant will fail to comply, it can become a ground to
dispossess.
 If the landowner can prove that a practice should be followed to
preserve the land and the tenant will not comply, then it can be a
ground to dispossess.

DAR Order 05-16

  Mechanism that will assist the farmer in proving that there is
rental payment
 Title: rules and regulations where the owner-lessor refuses to
accept or fails to receive
 If the owner-lessor refuses to accept or fails to receive, the farmer
can go to Land Bank and open an IBCA (Interest-bearing
current account) in the name of the landowner.

Example:

There is no written contract, but there was a verbal one. The owner was
advised not to accept rentals anymore. If the farmer pays rentals in the
owner’s house, he will be accompanied by people who can be witnesses
to his payment.

The owner can then say that they did not have an agreement.
Remember that sharing of harvest is one of the elements in a tenurial
relationship. If you are the tenant-farmer, what should you do?

 When there is agrarian dispute, SC had asked for written

contracts and receipt to prove rentals. So the best thing to do is
open an IBCA.
 When the issue arises, the farmer can get a certification from
Land Bank.

The lease rental shall not be equivalent to more than 25 percent of the
average normal harvest during the three agricultural years
immediately preceding the deed of leasehold after deducting the
expenses.

Agricultural year

 Not the same as calendar year

 Depends on the crops

If the parties can’t agree on the agricultural year, go to arbitrator

Heirs of Tan
  Heirs filed an ejectment case because of nonpayment of 2/3 share
(more than 75 percent).
 RTC: Nonpayment to be a valid ground must first be lawful. If the
amount exceeds the limit, it cannot be a ground to dispossess.

Possible arguments:

If the agreed payment is 2/3, you can argue that only 25 percent is valid
and the rest is invalid.
Sta Ana v. Carpo

 Filed ejectment case

 In this case, SC established different principles:
o Burden of proof
 Lies upon landowner
o Only those causes under Section 36 can become grounds to
dispossess
o The nonpayment must be willful and deliberate (even if this
does not appear in the law)
 This depends on the fact.
Another Case

 SC has another qualification: exclusivity of grounds

o The grounds should be limited to Section 36
o If there is a ground in civil law, that ground cannot be used.
 The landowner complained for ejectment. But that landowner was
just new. He just acquired the property in an auction.
 He verbally demanded that the lessees should pay the lease
rentals.
 The lessees refused to pay.
 Landowner was not able to prove that there was really a demand.
October 21, 1972
 Effectivity of PD 27
 Why it’s important
o Qualified tenant farmers
o Lands which are covered
o From perspective of landowners
 Just compensation
 Right of retention
Cabral v. Heirs of Adolfo

 In relation to beneficiaries.
 Cabral is the landowner. He owns agricultural land.
 Adolfo was issued an emancipation patent.
 Cabral filed a petition to cancel the emancipation patents.
Grounds:
o No evidence that the lands were primarily devoted to rice
and corn
o No compliance with requirements for issuance
 No CLT was issued prior to issuance of the EPs
 No evidence was presented (supporting documents before an EP
can be issued).
 Cabral wants his title to be the only title to the land.
 Ruling:

There are 2 stages in relation to PD 27

1. Issuance of CLT (should precede no. 2)

2. Issuance of emancipation patent
a. An EP can only be issued when there is full payment of
amortizations.

In each of these stages, there are requirements needed to be submitted

1. Application
2. Copy of CLT
 3. Certification from the landowner and LBP as to payment of
amortization
4. Certification that the applicant is full-pledged member of farmer’s
coop
5. Technical description
6. ORs o RPTs
7. Certification whether applicant has acquired farm machineries

Burden of proof lies on the title holder.

Reason: Non-compliance with requirement is a ground for cancellation.

Under Agrarian Reform, the farmer-beneficiaries have the obligation ot

pay the government.

SC is very strict with following the formula for computation of just

compensation. Reason:

1. Ultimately, the ones who will be paying the government are the
tenant-farmers.

The government paid the landowners and the government will recover
this from the farmer-beneficiaries.

Do not think that if there is an EP issued, then all requirements were

followed. However, this can be presumed (presumption of regularity).

An EP, just like other titles, can be attacked. Even if there is a principle
of indefeasibility for title, it can still be attacked.

Is it possible to have 2 titles involving the same land?

 Yes.

Section 16 of CARL

 A landowner may not know that his title has been cancelled. Then
the government can distribute these to beneficiaries.
The surrender of the owner’s duplicate copy of title is not a requirement
in agra. The only requirement by the ROD is certification from LBP
that there is money deposited in LBP in the name of the owner (just
compensation.

It’s possible to have 2 or more Eps of the same land.

Two Kinds of Counter-Claims

1. Compulsory
 Related to the very case involved
 Example: If Cabral wants to cancel EPs, can heirs of Adolfo
file action for damages on the grounds of malicious filing?
Yes.
2. Permissive
 Not directly related to the case but which can also be
pleaded in the same case
 Example:

If the title is ordinary title, the agra court has no jurisdiction. For
permissive counter-claim, they should be filed in the same court.

The copies of evidences are in ROD and DAR.

Due process concern: Before DAR will present cert to ROD, there is a
notice of coverage. The NOC will start the ball-rolling. There is also an
offer from DAR. If owner will not

The program expired in June 2014. DAR cannot issue notice of coverage
since the expiration.

DAR does not only send the notice. It also publishes the names and
locations. It invites owners to an inspection. The owners can choose not
to attend.

There is prohibition of TRO in CARP those issued by SC.

Under PD 27, the tenant-farmers are deemed owners of the land. But
they cannot be deemed full owners (absolute) if they do not comply with
the requirements.

Stages

1. Identification of tenants and land covered

2. Land survey and sketching of actual cultivation of tenant
3. Issuance of CLT
Dela Cruz of Domingo

 Accoridng to Dela Cruz, he is the holder of a CLT claimed to cover

the same land as Domingo.
 Ruling: Dela Cruz failed to prove that the land was the same as
that of Domingo
 What is the value of the CLT?
o CLT merely evinces that the grantee is qualified to avail of
the statutory mechanisms for the acquisition of ownership
till by him. It merely is an inchoate right.
 SC: EP presupposes that the grantee shall have already complied
with all the requirements prescribed under the PD 27.

Difference with Cabral: The EP is directly attacked for non-compliance

Retention
Limits:

Under PD 27 – 7 has

Under CARL – 5 has

Saguinsin v. Liban

 Petitioner is the purchaser of 3 ha of land covered under OLT

 OLT (Operation Land Transfer) is name of program involving
emancipation of the tenants from bondage of soil that was under
PD 27. Under Aquino, it’s called CARP.
  Implication of land covered by OLT
o Gives you the idea that the purchase is void.
 Liban et al., were issued EPs
 In 1991, seller applied for retention of property under RA 6657.
Granted. So Eps were recalled.
 Ordered execution of leasehold contracts
o Reason: To have relation between landowner and farmer.
You cannot simply eject the farmers because they were
already tilling the land. They have rights under RA 3844
 When the wife died, Saguinsin wanted the retention granted in
her favor.
 Is a purchaser of a land that was covered by OLT entitled to a
right of retention? NO.
 The property is tenanted and under coverage of OLT so it cannot
be sold after Oct 21, 1972
 Transferees do not have the right of retention. Only the original
owners as of Oct 21, 1972. But the heirs have the right to retain.

10 years for CARL

No prescription in PD 27.
Digan v. Maglines

 Facts similar to Saguinsin

 Petitioner is purchaser of land. He wants to exercise rights of
retention.
 Ruling: Malines is not a landowner referred to in PD 27 because
he was not the owner since Oct 21, 1972
 Rule: Any transfer of ownership over tenanted rice and/or corn
lands after Oct 21, 1972 to persons other than the heirs of the
landowner via hereditary succession is prohibited.
 Exception: When conveyance was made in favor of the actual
tenant-tiller (3rd exception)
  If Malines cannot qualify to retain and there was this prohibition
to the sale, does that mean that the sale to Malines is not valid?
o Ruling: The sale in his capacity as mere purchaser is invalid.
But as to his capacity as farmer-beneficiary, it is valid.
o It turns out that he qualified as farmer-beneficiary.

Differences
PD 27

 Rice and corn land

 Tenant-farmer is deemed owner of 5 has if not irrigated and 3 has
if irrigated
 7 has
 There is qualification as to right of retention: if the tenant? is
already tilling the land or will cultivate the land
 There has to be a tenant (tenanted lands)

RA 6657

 All other agricultural land (including those of public domain

 Beneficiaries shall be awarded an area not exceeding 3 has
 5 has
 No qualification as to right of retention
Sigre v. CA

 Principle: PD 27 was not repealed by CARL.

 In fact, CARL recognizes PD 27
o Proof: Section 6 of CARL has retention right of 5 has, and
one of the exceptions is if the landowner had availed of the
retention right under PD 27.
Estolas v. Mabalot

Can lands acquired under PD 27 be transferred by DAR to another

qualified beneficiary? NO
Under the law, there are only 2 exceptions:

1. Government
2. Hereditary succession
3. Can also cite Malines case (3rd exception)

Just compensation should be based on RA 6657 for lands covered under

PD 27.
LBP v. Cruz

 Land was acquired under PD 27.

 Landowner was not paid by DAR or LBP until CARL took effect.
 What law will govern for payment of JC?
o It is CARL that governs.
o PD 27 is only suppletory.
o Reason: It is inequitable to apply PD 27.
o GCC: Another reason should be the reasonableness of the
factors under CARL.

Under PD 27 – average gross harvest

In CARL – there are many factors, e.g., market value, comparable sales
of adjacent properties, crops planted etc.

Reckoning point: Date of taking. But in other cases, actual payment (so
the court is not consistent on the matter)