ANGEL BALTAZAR, PETITIONER, VS. COURT OF APPEALS (SEVENTH DIVISION) AND FLORA L. ESGUERRA, RESPONDENTS.

By this petition, Angel Baltazar seeks a review of the Decision of respondent Court
of Appeals,^[1] promulgated
on 22 October 1974 (in CA-G.R. No. 46454-R,
“Flora L. Esguerra vs. Angel Baltazar“)
dismissing the ejectment suit against a tenant filed
by a landowner who wanted to convert her land into a residential sub­division,
but denying to the tenant the right of re­demption, premised upon the
retroactive application of Presidential Decrees Nos. 27 and 316.

The antecedents of the
case disclose that since 1912, petitioner Angel Baltazar
was the share tenant over two (2) parcels of riceland
(Lots Nos. 1242 and 6) covered by Transfer Certificates of Title Nos. 74177 and
74161, with corresponding areas of 19,841 and 14,984 square meters,
respectively, both located at barrio Salacot, San
Miguel, Bulacan. 
The front portion of Lot No.
1242, stretching along the National Highway, became a residential area since the
Japanese Occupation.  Petitioner,
however, continued to possess as tenant, the rear and greater portion of this
lot and Lot No. 6.  He became an
agricultural lessee during the agri­cultural year 1968-69.

The two lots were originally owned by Emiliano
Tecson, who transferred ownership to Salud B. Calderon before the Japanese Occupation.  On 6
March 1969, Salud Calderon sold the two
parcels of land to private respond­ent Flora L. Esguerra
for P4,608.32. 
As the new owner, private respondent caused the cancellation of the
former titles and the issuance in her name of Transfer Certi­ficate of Title
No. 108665 in lieu of TCT No. 74161, and Transfer Certificate of Title No. 108666
to replace TCT No. 74177.  Six months
later, or on 26 September 1969, private respondent caused the subdivision of
Lot No. 1242 covered by TCT No. 108666 into ten (10)
lots comprising Lots Nos. 1242-A to 1242-J and the issuance of TCT Nos. 117623 to 117632, all derived from TCT No. 108666.  Lots
1242-A to 1242-I, with approximately 300 square meters each, occupy the portion
of the land­holding fronting the national road which had since become a
residential area and for which TCT Nos. 117623 to
117631 were issued.  The tenth lot, Lot
No. 1242-J, with an area of 17,121 square meters, covered by TCT No. 117632, corresponds to the rear portion of the land­holdings
over which petitioner continued with his possession and tenancy.

To pursue her plan to convert the entire landholding into
residential lots, private respondent in­stituted on 24 December 1969 a Complaint for Ejectment against petitioner before the Court of Agrarian
Relations, 5th Regional District, Branch I-A, Baliuag,
Bulacan.  The
Complaint substantially alleged that the portions being tenanted by petitioner
(defendant therein) particular­ly, Lot 1242-J covered by TCT
No. 117632, with an area of 17,121
square meters (derived from TCT No. 108666), and the
lot covered by TCT No. 108665 with an area of 14,984 square meters, or a
combined area of approximate­ly 3.2 hectares, are all suited for subdivision
into residential lots, and thus sought the ejectment
of peti­tioner from the entire landholdings tenanted by him.  Lots Nos. 1242-A to 1242-I, or the residential lots, were already excluded from
the Complaint.

Answering, petitioner
interposed the special and affirmative defenses that the two (2) parcels of
land in question were sold by the former landowner, Salud
B. Calderon, to private respondent without complying with the notice
requirement of Section 11 of Republic Act No. 3844 (the Agricultural Land
Reform Code); that these lots were registered in violation of Section 13 of the
same law, which requires the vendor, as a pre-requisite to registration, to
execute an affidavit that he has given written notice pursuant to Section 11
thereof, or that the land is not cultivated by an agricultural lessee; that
private respondent filed this action without giving petitioner the required
notice under Section 36 of the same Code; that the landholdings in question are
not suitable for homesite, and that the attempt to
dispossess him was in bad faith.

By way of counterclaim, petitioner tendered and deposited with
the Court of Agrarian Relations the sum of P5,000.00
to cover the purchase price of P4,608.32, in the exercise of his right of
redemption under Section 12 of the
Agrarian Code.

Pending final determination of the case, petitioner filed on 26 January 1970 a “Motion for an
Interlocutory Order”, followed about two weeks later with an Amended
Verified Motion, to direct private respondent to maintain petitioner in the
lawful possession and cultivation of the landholdings in question.

Upon hearing, petitioner testified and declared, inter
alia, that on 27 February 1970 private respondent had begun to bulldoze
the land resulting in the removal of the dikes and the destruction of rice
paddies; that roads had actually been constructed on the subject land, with
some gravel and sand already delivered; and that monuments were being planted
on the land.  Petitioner also presented
in Court the Resolution of the Municipal Council of San Miguel, Bulacan, dated 20 February 1970 (Exhibit “A”),
denying private respondent’s application for conversion of the subject land
into a subdivision on the ground that the land was under the possession of a
tenant and there was a pending suit before the Court of Agrarian Relations
wherein said tenant was a party.

The lower Court issued the interlocutory Order on 5 March 1970 enjoining private
respondent from com­mitting acts of dispossession against petitioner, or
otherwise from disturbing him in his possession and cultivation of these
landholdings pending the final determination of the case and until further
orders.

After trial on the merits, the Court a quo rendered its Decision on 20 August 1970, upholding peti­tioner’s right to exercise
redemption but excluding the lots considered to have become residential
land.  The dispositive
portion of the judgment reads:

“WHEREFORE, judgment is hereby rendered:

“(1)    Dismissing plaintiff’s complaint;

“(2)    Making the interlocutory order of this Court
dated March 5, 1970,
permanent in character.  The bond of
P5,000.00 filed by defend­ant as a condition
for the issuance of the said
Order is hereby cancelled and ordered returned to him;

“(3)    Ordering plaintiff to convey unto defendant
for the consi­deration of P4,608.32 which amount is already covered by the sum of P5,000.00 deposited with the Court, the real properties described in Transfer
Certificates of Title Nos. T-108665 and T-117632 of the Register of Deeds for the province
of Bulacan;

“(4)    Ordering the Clerk of this Court to return to defendant the excess
amount of P391.68 from the said deposit of P5,000.00 made by defendant on January 29, 1970, upon proper
receipt; and

“(5)    For the purpose of imple­menting this decision the Clerk of this Court
is hereby authorized, at the proper time, to detach from the records of this
case Official Receipt No. H-8625119
dated January 29, 1970,
de­nominated as Exhibit ’10’.

“The parties’ other
claims or counterclaims are hereby dismissed.

“No pronouncement as to
costs.”

The Motion for
Intervention filed on 4 September 1970 by private respondent’s husband, Alejandro Esguerra,
and the Motion dated 16 September 1970 to allow inter­vention filed by private
respondent herself, were both denied.

Upon elevation of the
case to respondent Court of Appeals on 20 May 1971, docketed therein as CA-G.R. No. 46454-R, private respondent stressed that the lower
Court committed three errors, viz.: 
(1) in denying Alejandro Esguerra’s Motion to
Intervene; (2) in or­dering private respondent to convey the
lands in ques­tion to the petitioner, contrary to Section 14 of Republic Act No. 3844; and (3) in issuing with grave abuse of discretion the Order
of 5 March 1970 restrain­ing private respondent and her agents from carrying
out her conversion plans.

In disposing of the appeal, respondent Court observed that the
issues of fact and law can no longer be resolved in accordance with the law
then in force, and on the basis of the recorded evidence in view of the status quo provisions of Presidential Decrees Nos. 27 and 316 and their implementing Rules and
Regulations.  Premised on this theory,
respondent Appellate Court promulgated its Decision on 22 October 1974, with the following decretal portion:

“WHEREFORE, the instant suit for ejectment
is DISMISSED,
and it is hereby ordered
that the redemption
money deposited by defendant-appellee with the
court below be returned to him.  In the
meantime, pending the promulgation of the rules and regula­tions implementing
Presidential Decree No. 27, the plaintiff and the defend­ant should maintain
the status quo, that is, the
leasehold relationship as landholder and agricultural lessee, the latter to
continue to pay
the plaintiff lease
rentals under the leasehold arrangement existing as of October 21, 1972.  No costs.

SO ORDERED.”

The Motion for Reconsideration, praying that petitioner be allowed to exercise
the right of redemption was denied by respondent Court in its Resolution of 17 January 1975, but at the same
time, it ordered the denial to be

“without
prejudice to the right of the defendant to exercise the right of redemption,
should the National Development Authority, to be created by his Excellency, find that the land now in question is
not suitable for residential, commercial, industrial or non-­agricultural
purposes”.

With leave of Court,
petitioner filed on 6 February 1975 a second Motion for Reconsideration, which
met a similar fate or 18 February 1975.

Following the denial, the instant Petition for Review
on Certiorari was filed with us on 24 February 1975. 
Petitioner claims that respondent Court erred

“I.    x x x in giving retroactive effect
to Presidential Decrees Nos. 27 and 316 thereby avoid­ing the principal issues
raised before it; and

II.    x
x x in not affirming
the lower Court’s finding that peti­tioner had properly exercised his right of
redemption under the Agricultural Land Reform Code, Republic Act No.
3844.”

We gave the Petition due course on 13 May 1975, after reconsidering our initial denial on 5 March 1975.  After both parties had filed their respective
memoranda, the case was submitted for decision on 5 August 1976.

About a year later, or on 10 August 1977, private respondent
filed an Omnibus Motion requesting us to order the petitioner herein, who,
allegedly, has been unlawfully withholding the lease rentals due the private
respondent, to deliver or deposit in a reputable bonded warehouse the lease
rentals for the period commencing 1969 up to 1977, inclusive, corresponding to
the total yearly harvest of 510 cavans, or the total
equivalent amount of P30,600.00.  Two similar Motions were successively filed
by private respondent on 10 December
1977 and 30 May 1980.

Required to comment thereon, petitioner strongly opposed the
grant of these motions contending that it would be equivalent to:

x  x  x  x

“b.  Placing
into the hands of one who does not at the moment need it most, materials so
vital to survival and of a volume or of such value that Petitioner can­not at
the snap of the finger simply produce without calling upon a miracle to happen,
or without asking for some time during which he shall have to work himself to
the bone produc­ing what the Respondent would want to require, and at the age
of 88 years; placing into the hands of one who could well afford to wait for
more than ten (10) years now without feeling the absence of any ‘rentals’ from
Petitioner because of her many and varied sources of income;

c.  
Overlooking the problems of recovery of any rental paid, should
Petitioner, because of the merits of his case, be favoured
by a Decision of this Honorable Supreme Court; and

d.    Setting
aside the Government’s program of social justice which puts a premium upon the uplift­ment of the condition of the poor.”^[2]

We deferred action on those Motions until decision on the merits.

The first issue to be
resolved is the propriety of respondent Court’s ruling according retroactive
application to Presidential Decrees Nos. 27 and 316 and their
implementing circulars, to a case pending before it long before these decrees
took effect.

To obtain the proper perspective, the recital of pertinent dates
is apropos.  The Code of Agrarian
Reforms (RA 3844) took effect on August
22, 1963.  The Ejectment Case was instituted before the Court of Agrarian
Relations on 24 December 1969,
which Court rendered its Decision on 20
August 1970.  Republic Act
No. 6389, which amended the Code of Agrarian Reforms, was approved on 10 September 1971.  Presidential Decree No. 27, decreeing the
emancipation of tenants from the bondage of the soil and transferring to them
ownership of the land they till, was
promulgated on 21 October 1972. 
Presidential Decree No. 316 prohibiting the ejectment
of tenant-tillers from farmholdings devoted to rice
and corn pending promulgation of rules and regulations im­plementing PD No. 27,
and requiring the maintenance of the status
quo in relations between tenant farmers and landowners, was issued on 22
October 1973.  The Court of Appeals rendered the judgment
under review on 22 October 1974.

It will thus be seen that the action was instituted on 24 December 1969, long before
Presidential Decrees Nos. 27 and 316 took effect on 21 October 1972 and 22 October 1973, respectively.  Decision was rendered by the trial Court on 20
August 1970, also
prior to the effectivity of said decrees.  The case had been pend­ing before the Court
of Appeals since 1970, again prior to the promulgation of said Decrees,
although its Decision was rendered after their enactment.

It is a fundamental postulate in statutory construction that “laws shall
have no retroactive effect, unless the contrary is provided.”^[3] This rule has been consistently applied in a
long line of cases wherein we categorically pronounced that a statute operates
prospectively and never retroactive­ly unless the legislative intent to the
contrary is made manifest either
by express terms of the statute or by necessary implication.^[4] Similarly, in the case of Espiritu vs. Cipriano,^[5] we declared:

“Well-settled is the principle that while the Legislature has
the power to pass retroactive laws which do not impair the obligation of
contracts, or affect injuriously vest­ed rights, it is equally true that statutes
are not to be construed as intended to have a retroactive effect so as to
affect pending proceedings, unless such intent is expressly declared or clearly
and necessarily implied from the language of the
enactment” (emphasis supplied).

There being no express nor clearly implied autho­rization embodied in PD Nos. 27
and 316 allowing retro­spective application, prospective construction is called
for.

More recent rulings of
this Tribunal have likewise ruled that Presidential Decrees Nos. 27 and 316
cannot be applied retroactively.  In Castro, et al., vs. Court of Appeals, et al., G.R. No. L-44727, September 11, 1980, this Court, speaking through Mr. Justice
Felix V. Makasiar, held:

“Moreover, petitioners have made the fatal error of invoking
the provisions of Presidential
Decrees Nos. 27,
316 and 946; for, this Court has already ruled that said decrees cannot be
applied retroactively and that they can only apply to bona fide tenants.”

In Cabatan
vs. Court of Appeals, et als., 95 SCRA 323, 345 (1980), Mr. Justice Guillermo Santos wrote
the opinion for the Court thus:

“Further, on petitioner’s contention that the cases should
have been dismissed for lack of jurisdiction – on the ground of the absence of
a certification of triability by the Ministry of
Agrarian Reform – the records show that the cases were initiated in the CAR in 1971.  Pres. Decrees Nos. 316 and 583 invoked by the
petitioners in assailing the CAR’s exercise of
jurisdiction over the cases and deciding the same were promulgated only on October 21, 1972 and October 22, 1973, respectively.  It is a fundamental postulate that once a
court has taken juris­diction over a case, its authority can not be affected
adversely by a subsequent statute prescribing a precondition before the Court
may take cognizance of the case.”

In the earlier case of
Jacinto vs. Court of Appeals, et al., 87 SCRA 263,
274 (1978), penned by Mr. Justice Felix Q. Antonio, also cited in the Castro
case, supra, we ruled:

“Neither can We find merit in
petitioner’s claims that with the advent of Presidential Decree No. 27, he has
become the owner of the land.  Firstly,
said decree applies only in favor of bona
fide tenants.  It can­not be denied, however, that at the
time of the promulgation of Presidential Decree No. 27 (October 21, 1972), the
Appellate Court has already its judg­ment finding that the tenancy relationship
between petitioner and private respondent had been extinguished.  Secondly, the decree cannot operate retroactively in favor of petitioner who had
surrendered one-half of the land in July
1966 and, by virtue of a Writ of Preliminary Mandatory Injunction issued by the
Court of Agrarian Relations, was dispossessed of the other half in February
1967.  x x x x x“

And in Padasas vs. Court of Appeals, et
al.,^[6]
referring to the retroactivity of the Agricultural Land Reform Code, also a
social legislation aimed at making small farmers more independent, self-reliant
and re­sponsible citizens, with Mr. Justice Juvenal K. Guerrero as ponente, this Court succinctly said:

“The
Agricultural Land Reform Code (Rep. Act 3844) was enacted and took effect on August 8, 1963.  This law must be enforced prospectively and
not retroactively and, therefore, whatever rights created, granted or
recognized therein such as the right of redemption accrued upon the enact­ment
of this legislation and may be exercised thereafter in appropriate cases.”

But even if applied retroactively, PD Nos. 27 and 316 will find
no application considering that ejectment proceedings
herein were not filed to harass the tenant but to convert the land into a
subdivision, a reason perfectly valid under the laws then in force.  Besides, under the facts of the case, to
maintain the status quo or the leasehold relationship, as
ruled by respondent Court of Appeals, would prove more prejudicial to peti­tioner,
because by allowing him the right of redemption he becomes an independent owner
of the land, whereas, if the status quo is maintained he
becomes a perpetual agricultural lessee bound to pay rentals to the land­owner.  In other words, the fundamental policy
objectives of our agrarian laws, inclusive of PD 27 and 316, are achieved and
upheld by according to petitioner the right to redeem, a vested right which he
had acquired under the Code of Agrarian Reforms and of which he cannot be
deprived by subsequent legislation.^[7]

Accordingly, contrary to its opinion, there would have been no
impediment on the part of respondent Court to resolve once and for all the issues
on the merits of the case brought before it on the basis of the laws or
statutes then in force without need of awaiting the promulgation of the rules
and regulations implementing presidential Decrees Nos. 27 and 316.

Which brings us to the second issue.  Reverting to the recital of dates earlier
given, it is again clear that it is Republic Act No. 3844, which took effect on
22 August 1963, prior to its amendment by Republic Act No. 6839 on 10 September
1971, that should govern the relationship between the contending parties and
which should determine whether or not the trial Court’s findings that
petitioner had properly exercised his right of redemption is correct.

Section 11 of the original text of the Agrarian Code provided:

“Sec.
11.  Lessees’ Right of Pre-emption.  – In case the
agricultural lessor decides to sell the landholding,
the agricultural lessee shall have the preferential right to buy the same under reasonable terms and
conditions; x x
x The right of pre-emption under this Section
may be exercised within ninety days from notice in writing, which shall be
served by the owner on all lessees affected.”

We find as established
that the subject landholdings were sold by the former owner, Salud B. Calderon, to private respondent without complying
with the notice requirement set forth in the provision just quoted.  Neither was the Affidavit regarding written
notice re­quired of the vendor prior to registration complied with.

“Sec.
13.  Affidavit Required in Sale of Land Subject to Right of Pre?emption.  – No
deed of sale of agricultural land under cultivation by an agricultural lessee
or lessees shall be recorded in the Registry of Property unless accompanied by
an affidavit of the vendor that he has given the written notice required in
Section eleven of this Chapter or that the land is not worked by an
agricultural lessee.”

Private respondent herself failed to give the required notice
under section 36 (1) of the same Code prior
to the filing of ejectment proceedings.

“Sec.
36.  Possession of Landholding; Exceptions.  – Notwithstanding any agreement as to
the period or future surrender of the land, an agricultural lessee shall
continue in the enjoyment and possession of his landholding except when his
dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that:

(1)  The
agricultural lessor-owner or a member of his
immediate family will personally cultivate the landholding or will
convert the landholding, if suitably located, into residential, factory,
hospital or school site or other useful non-agricultural purposes:  Provided, That the agricultural lessee shall
be entitled to disturbance com­pensation equivalent to five years rental on his
landholding in addition to his rights under Sections twenty-five and
thirty-four, except when the land owned and leased by the agricultural lessor is not more than five hectares, in which case instead of disturbance compensation the lessee
may be entitled to an advanced notice of at least one agricultural year before ejectment proceedings are filed against him:  Provided, further, That should the
landholder not cultivate the land himself for three years or fail to
substantially carry out such conversion within one year after the dispossession
of the tenant, it shall be presumed that he acted in bad faith and the tenant
shall have the right to demand possession of the land and recover damages for
any loss incurred by him because of said dispossession;” (Emphasis
supplied)

Considering that petitioner
could not exercise his right of pre-emption for lack of notice and the sale was
consummated, he must be held to be entitled to the lawful exercise of his right
of redemption allowed under Section 12 of the same Code, which in its original
text, read:

“Sec.
12.  Lessee’s Right of Redemption.  – In case the
landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the
right to redeem the same at a reasonable price and consideration:  Provided, That the entire landholding sold
must be redeemed:  x x x The right of redemption under this
Section may be exercised with­in two years from the registration of the sale,
and shall have priority over any other
right of legal redemption.”

The exercise of the right of redemption to
be valid must be in accordance with law.  The timely
exercise of the legal redemption right requires either tender of the price or
valid consignation thereof within the prescribed redemption period of two (2)
years (180 days under the new law, from notice in writing served by the vendee
on all lessees and the Department of Agrarian Reforms) from
the registration of the sale.^[8]

Absent any written notice
of sale served on petitioner, upon the
registration of the sale of the landholdings in question on
10 March 1969, petitioner’s right to redeem ripened on said date.  When petitioner filed on 29 January 1970 his Answer to the Complaint with Counterclaim for redemption, simultaneously, he deposited in
Court the amount of P5,000.00 covering the full purchase price of P4,608.32 paid by the private respondent to the former owner of the
subject landholdings.  Thus, petitioner
had seasonably exercised his redemption right and had fully complied with all
the requirements to entitle him to redeem the landholdings sold to private
respondent.

In her attempt to defeat
petitioner’s right of redemption, private respondent invoked the provisions of
section 14 of the Code of Agrarian Reforms which originally provided as
follows:

“Sec. 14.  Right
of Pre-emption and Redemption Not Applicable to Land to be Converted into
Residential, Industrial and Similar Purposes. –  The right of
pre-emption and redemp­tion granted under Sections eleven and twelve of this
Chapter cannot be exercised over landholdings suitably located which the owner
bought or holds for conversion into residential, commercial, industrial or
other similar non-agricultural purposes: 
Provided, however, That the conversion be in good faith
and is substantially carried out within one year from the date of sale.  Should the owner fail to comply with the
above condition, the agri­cultural lessee shall have the right to repurchase
under reasonable terms and conditions said landholding from said owner within
one year after the aforementioned period for conversion has expired:  Provided,
however, That the tenure of
one year shall cease to run from the time the agricultural lessee petitions the
Land Authority to acquire the land under the provisions of paragraph 11 of
Section fifty-one.”

Parenthetically, section
14 above quoted has been repealed by section 3 of Republic Act
No. 6389 approved on 10 September 1971.

Harmonizing the foregoing
provision together with section 36, supra, even if a landowner desires to con­vert
under section 14, a lessee possesses the right to be secured in his tenure
until a just cause for his dispossession is proved and his ejectment
is authorized by the Court.  The right of
a lessee to pre-empt or redeem a landholding cannot be exercised if the owner
bought or holds the land for residential purposes.  However, the limitation to the lessee’s right to pre-empt or redeem is
conditioned upon the fulfillment by the landowner of the following
requisites:  (1) that the property is
suitably located; (2) that the con­version be in good faith; and (3) that the
conversion is substantially carried out within one year from the date of sale.^[9] These conditions must concur,
other­wise, the land is subject to redemption by a tenant.

The trial Court found
that the foregoing requisites had not been fulfilled by private
respondent.  The latter had not proven
suitability.  Petitioner was admittedly
the agricultural lessee of the lands from which he was being sought to be
ejected.  Private respondent had no
approved plan of subdivision.  She did
not have the approval of the proper authorities to convert the properties into
a subdivision, nor had the construction been readied.^[10] The trial Court also found that there was
some measure of bad faith on the part of private respondent in seeking the
dispossession of petitioner, and that no substantial conversion had been
undertaken by private respondent.  In the
words of the trial Court:

“Plaintiff filed this
action for dispossession of defendant on the ground of conversion of the properties in question into a subdivision
on December 24, 1969.  At this time, the landholding in ques­tion was still agricultural riceland and
defendant was in possession thereof in the concept of agricul­tural
lessee.  At the time also, it appears
that plaintiff had no approved plan of subdivision, she did not have the
approval of the Municipal Council of San Miguel, Bulacan
to convert these properties into a subdivision and the construction had not
even been readied.  It was the ninth
month of her ownership of the landholdings in question and barely three months
from the expiry date of the one-year period within which she had to convert the
land into a subdivision in accordance with Sec. 14, Republic Act No. 3844.  In spite of the lack of plans and absence of approval of authorities concerned and during
the pendency of this case, plain­tiff on February 27,
1970 caused the bulldozing of
defendant’s landholdings, the construction of roads and gutters and the filling
of portions of the land with sand.  All
these facts show that there was no manifest intention on the part of plaintiff
to seriously convert the landholdings in question into a subdivision until she
was virtually forced to do so when defendant exercised his right to redeem the
properties through his counterclaim and the Muni­cipal Council of San Miguel, Bulacan, disapproved her application for conversion.  And it may be added, plain­tiff’s aborted and
vain conversion of the land beginning February
27, 1969 was an attempt to beat the deadline set by law within
which she had to convert the land. 
Plaintiff’s pretension that the construction had to be rushed because of
the need for the access road to the new parish church of Salacot
located in the property at the rear of the landholdings in question cannot be
given credence because there is no satisfactory evidence to show that in fact a parish church is
exist­ing or at least under construction and that plaintiff had actually
donated the access road to the parish.  Besides, we find
it strange that after donating the road bed plaintiff at her own expense
should undertake the construction of the road itself and in the process
transform the ricelands in question into a
residential subdivision.  The foregoing
facts also reveal some measure of bad faith on the part of plaintiff in seeking
dispossession of defendant.”^[11]

We find no reason to
disturb the aforequoted findings.  They are supported by substantial evidence
and are well-nigh conclusive on an appellate Tribunal.^[12]

Under the circumstances,
the right of redemption by petitioner must be sustained.  Specially
considering that the rights of pre-emption and redemption were the means
prescribed by the Code of Agrarian Reforms to implement the declared policy of
the State to establish ownership-cultivatorship and
to promote the upliftment of the dignity of the small
farmers free from pernicious institutional restraints and practices.  Furthermore, it is the objective of the
agrarian law to inculcate in every tenant-farmer an independent and self-reliant
existence that would help him become a strong and re­sponsible citizen of our
democratic society and actively play his role in nation-building.^[13]

Petitioner is reminded,
however, of the limitations to his land rights enunciated in section 62 of the
same Code:

“Sec. 62.  Limitation on Land Rights.  – Except
in case of hereditary succession by one heir, landholdings acquired under this
Code may not be resold, mortgaged, encumbered, or trans­ferred until after the
lapse of ten years from the date of full payment and acquisition and after such
ten-year period, any transfer, sale or disposition may be made only in favor of persons qualified to
acquire eco­nomic family-size farm units in accordance with the provisions of
this Code:  x x
x x“

The last point to consider is private respondent’s Omnibus
Motion, reiterated three times, which prayed that the share or rentals
allegedly due her from the date of commencement of this suit up to the date of
filing of said Motion, be delivered to private respond­ent, or deposited in a
bonded warehouse.

Considering, however, that petitioner had validly and promptly
exercised his right of
redemption according to law as far back as 1970, private respondent’s claim for
rentals must fail.  Petitioner cannot be
compelled to pay rentals for the use of the landholdings of which he is deemed
the owner-cultivator from the time he fully paid the reasonable price of the
parcels of land redeemed by him by consigning in Court the amount cov­ering the
full purchase price.  There being no
opposition on the part of private respondent as to the redemption price, we,
therefore, hold the same to be the reasonable price of the landholdings
redeemed.

Incidentally, during the pendency of
this case, private respondent landowner did not take advantage of the amendment
introduced by Republic Act 6389 to section 36 (1) of the Code of Agrarian
Reforms (ap­proved on 10 September 1971) to have her landholdings declared
suited for residential purposes, as she claims, which could have been a ground
for dispossession of a tenant upon payment of disturbance compensation and
previous authorization by the Court after due hearing.

WHEREFORE, we
hereby set aside the Decision of respondent Court of Appeals promulgated on 22
October 1974 and its
Resolutions dated 17 January 1975 and 18 February 1975, and enter judgment affirming the Decision
of the Court of Agrarian Relations dated August 20, 1970.

Private respondent is
hereby directed to accept the consignated price and execute a deed of conveyance in
favor of petitioner, Angel Baltazar, of the real
properties specified in the judgment of the trial Court, within thirty (30) days from the finality of this
judgment.  Should private respondent fail
to execute the deed of conveyance within the period specified herein, the Clerk
of Court of the Court of Agrarian Relations is hereby directed to
execute such deed of conveyance.

No pronouncement as to costs.

SO ORDERED.

Makasiar, Fernandez, Guerrero, and De Castro, JJ., concur.

Teehankee, (Chairman), J., files a qualified concurrence.

^[1]
Seventh Division composed of JJ. Jose N. Leuterio (ponente),
Roseller T. Lim and Francisco Tantuico,
Jr.

^[2]
pp. 284-285, Rollo.

^[3]
Article 4, New Civil Code.

^[4]
Segovia v. Noel, 47 Phil. 543 (1925); Tolentino vs. Alzate, et
al., 98 Phil 781 (1956).

^[5]
55 SCRA 533 (1974).

^[6]
82 SCRA 250, 258 (1978).

^[7]
Ibid.

^[8]
Almeda vs.
CA, 78 SCRA 194, 199-200 (1977), citing Basbas vs. Entena, 28 SCRA 669, 672 (1969).

^[9]
See Montemayor,
Labor, Agrarian and Social Legislation, Vol.
III, 1968 Ed., pp. 251-252.

^[10]
Davao
Steel Corp. vs. Cabatuando, et al., 10 SCRA 704 (1964).

^[11]
p. 151, Rollo.

^[12]
De Chavez vs. Zobel, 55 SCRA 26 (1974).

^[13]
Hidalgo vs. Hidalgo, 33 SCRA 106 (1970).

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