REAL MONASTERIO DE LA PURISIMA CONCEPCION DE NUESTRA MADRE SANTA CLARA DE MANILA, PETITIONER, VS. DOMINGO FABIAN, TEODORO MARZO, EUSEBIO LACSON, ALBERTO GARCIA, QUINTIN GUIAO, E…

Appeal by certiorari from a decision of the Court of Appeals
reversing that of the Court of Agrarian Relations and upholding the right of
respondents herein – petitioners in the lower courts and hereinafter referred
to as the tenants – to re­deem the parcels of land in question, for the sum of
P20,250, with costs against the respondents in said courts, Elena Pecson – hereinafter referred to as Miss Pecson – the Real Monasterio de la Purisima
Concepcion de Nuestra Madre
Santa Clara de Manila – hereinafter referred to as the Corporation.

As stipulated by the parties, the facts are:

“1. That petitioners (respondents herein) are of legal age,
married and residents of Ebus, Gua­gua,
Pampanga; respondent Elena Pecson
is like­wise of legal age, single and resident of Betis,
Guagua, Pampanga, while the
other respondent Real Monasterio de la Purisima Concepcion de Nuestra Madre Santa Clara de Manila is a corporation sole,
organized and registered under the law of the Philippines with address at
Aurora Boulevard, Quezon City

“2. That respondent Elena Pecson is
the owner of three (3) parcels of riceland at Ebus, Guagua, Pampanga
covered by T.C.T. No. 44076-R of the Register of Deeds of Pampanga,
issued in
the name of respondent Elena Pecson, and which are
more particularly described as follows:

“A PARCEL OF LAND   (Lot
No. 7, plan PSu 21601), situated in the Barrio of Ebus, Municipality
of Guagua.
Bound­ed on the NE., and SE., by the Ebus Creek; on
the SW., by the Ebus Creek and properties of
Guillermo Limson, Felix Limson
and Marcelo Suares; and on the NW., by property of
Sabina Sioco de Escaler
claimed by the heirs of Ma­nuel Escaler and property
of Tito Coro­nel. x x x containing an area of ONE HUNDRED EIGHTY SEVEN THOUSAND
EIGHT HUNDRED AND NINETY TWO SQUARE METERS (187, 892) more or less. x x x;

“A PARCEL OF LAND (Lot No. 8 plan Psu-21601), situated in the
Barrio of Ebus, Municipality
of Guagua.  Bounded on the NE., and NW., by property of Marcelo
Suares; on the SE., by property of Felix Limson; on the SW., by the Malabayan
Creek. x x x; containing an
area of FIFTY SIX THOUSAND AND SIXTY SEVEN SQUARE METERS (56,067), more or less., x x x;

“A PARCEL OF LAND (Lot No. 9, plan Psu-21,601), situated in
the Barrio of Ebus, Municipality
of Guava.  Bounded on the NE., by properties of Segundo Romero, Gabriel C. Mariano,
Sebastian Maglalang, Gregorio Romero and Estanis­lao Dabu; on the SE., by
the Bambang and Malabayan
Creek; on the SW., by the Malabayan Creek and
properties of Francisca Manalang Francisco Garcia and
Feliciano Manalang. 
x x x; containing an
area of FIFTY THOUSAND FIVE HUNDRED AND NINETY SIX SQUARE METERS (50,596), more or less.  x x x.”

“3. That petitioners are leasehold tenants of respondent Elena Pecson in the afore-described ricelands
since before the war;

“4. That the areas and seedling
capacity of petitioners’ leaseholds are as follow:

“5. That on April 24, 1963, a public document denominated promise to
Donate was executed by respondent Elena Pee son in favor of the other
respondent Real Monasterio de la Purisima
Concepcion de Nuestra Madre
Santa Clara de Manila, covering the par­cels of land described in paragraph 2
hereof (Exhibit B-Motion to Dismiss);

“6. That, pursuant to the Promise to Donate, above-mentioned,
a public document denominated Deed of Donation (Donation Inter vivos of Real Property) was on June 27, 1963, executed by
respondent Elena Pecson in favor of the other
respondent Real Monasterio de la Purisima
Concepcion de Nues­tra
Madre Santa Clara de Manila (Exhibit C-Motion to Dismiss), which donation was
duly accepted on June 28, 1963 by the said donee in a
separate public document denominated Deed of Acceptance of Donation (Exhibit
D-Motion to Dismiss);

“7 That on August 4, 1964, a public docu­ment denominated Deed
of Absolute Sale was exe­cuted by respondent Elena Pecson
in favor of the other respondent Real Monasterio de
la Purisima Concepcion de Nuestra Madre Santa Clara de Manila, covering the same properties involved in the aforesaid deed of
donation (Exhibit E-Motion to Dismiss),
of which sale, petitioners were not no­tified by any of the respondents
and of which sale petitioners learned only in the latter part of Aug­ust, 1964;

“8. That on September 21, 1964, petitioners through the Office of
the Agrarian Counsel of San Fernando, Pampanga made a
formal notice and demand to exercise legal redemption over the above-described
parcels of land by means of te­nancy complaint of which respondent Elena Pecson and Real Monasterio were
notified.  For failure of the parties to
come to an amicable settlement this present suit was instituted by the
petitioners;

“9. That in accordance with the said Deed of Absolute Sale,
T.C.T. No. 30775-R of the Regis­ter of Deeds of Pampanga
in the name of respondent Elena Pecson was partially
cancelled as to the par­cels of land covered by said Deed and T.C.T. No.
42854-R was issued in the name of the other res­pondent Real Monasterio la Purisima Concepcion de Nuestra Madre Santa
Clara de Manila;

“10. That the respondent Elena Pecson and
the other respondent Real Monasterio de la Purisima Concepcion de Nuestra Madre de Santa Clara de Manila, executed on
November 11, and November 12, 1964, respectively, a public document denomi­nated
Revocation of Deed of Absolute Sale, stating therein the reasons for its
execution, and, in ac­cordance with said Revocation of Deed of Absolute Sale,
true copy of which is hereto attached and made a part hereof as Annex
“A”, T.C.T. No, 42854-R in the name of respondent Real Monasterio de la Purisima de Nuestra Madre Santa Clara de Manila was cancelled and, in
lieu thereof, T.C.T. No. 44076-R was issued
on November 13, 1964 to respondent Elena Pecson;

“11. That the
said Revocation of Deed of Absolute Sale was executed before the instant case
was filed;

“12. That the title to the properties involved in this case is at
the present time registered in the name of respondent Elena Pecson.”

The case having been submitted for determination upon the
foregoing stipulation of facts and the documents therein referred to, the trial
court rendered its decision holding that, since the complaint of the tenants
had been “filed five (5) days after the title of the land (in question)
was reissued in the name of the defendant Elena Pecson
x x x x the petition for redemption x x x has become impractical or unnecessary, ” for “there
is no more right of redemption to exercise, the property having been restored
to the former owner thereof, His
Honor, the Trial Judge accordingly dismissed the case, without costs,

A reconsideration of this decision having been denied, the tenants seasonably appealed to the Court of
Appeals, upon the ground that said decision and the resolution denying its reconsi­deration are “unsupported
by evidence and are against and contrary to law.” In due course thereafter the Court of Appeals
rendered the appealed decision, from which we quote:

“x x x
Defendant Elena Pecson having admittedly sold the property in question to her co?defendant,
as evidenced by a Deed of Absolute Sale dated August 4, 1964, without
plaintiffs’ knowledge, and the said sale having been presumably registered
because TCT No, 42854-R was issued in the name of the vendee, plaintiffs had a
right to redeem the same “within two years from the registration of the
sale, and shall have priority over any other right of legal redemption”
under said Section 12 of Republic Act No, 3844. 
Plaintiffs did exercise the said right of redemption as per paragraph 8
of the STIPULATION OF FACTS ‘That on September 21, 1964, petitioners through
the Office of the Agrarian Counsel of San Fernando, Pampanga
made a formal notice and demand to exercise legal redemption over the
above-described parcels of land by means of a tenancy complaint of which respondents
Elena Pecson and Real Monasterio
were notified’.  The said right of legal redemption having been duly
exercised by plaintiffs, it is the
duty of the Courts — if the law invoked by plain­tiffs is to be obeyed and not violated — to protect and implement
the right in question, as prayed for by plaintiffs in their present
action.  It is no defense to the said action ‘That the respondent Elena Pecson and the other respondent Real Mo­nasterio de la Purisima Concepcion de Nuestra Madre Santa Clara de Manila executed on Novem­ber
11 and November 12, 1964, respectively, a pu­blic document denominated
Revocation of Deed of Absolute Sale’ (Stipulation of Facts, pr. 10), and not
only because plaintiffs have nothing to do with the said revocation but also because the said re­vocation came over a month after plaintiffs had formally asserted their
right under the law to re­deem the property in question.  Indeed, the alleged revocation is anomalous for if there was really no
sale, as claimed by defendants then what was there to revoke? If such revocation, as defendants con­tend and
the lower Court in effect ruled, is
held to extinguish said plaintiffs right of legal redemption, then there could be no
stability in the rights of plaintiffs under
said Section 12 of Republic Act No.
3844, which is also like setting the said sec­tion, if not the said Act, at naught.

“Since the
obvious purpose of the alleged revocation is to defeat said Republic Act No. 3844, particularly aforequoted Article 12 thereof, the said revocation is void as against public policy, as per
Article 1400 of the new Civil Code which provides pertinently a follows:

“The following contracts are in-existing and void from the beginning:

“(1) Those whose cause object
or purpose is contrary
to law, morals good customs, public
order or public policy;” (underscoring ours.)

“We do not overlook defendants’ contention that defendant Elena Pecson
did not intend to sell the said property
by the Deed of Absolute Sale executed
by her in favor of her
co-defendant on August 4, 1964,
and ‘That the real, intention and desire of defendant-appellee
Elena Pecson have been to donate and not to sell the parcels of land in question to the
other defendant-appellee Real Monasterio is shown by the recitals
in the said Deed of Absolute
Sale itself (13-14, Defendants Brief), as well as by paragraphs 5 and 6 of the
STIPULATION OF FACTS show­ing that on April 24, 1963, said defendant Elena Pecson executed a
Promise to Donate in favor of her co-defendant, and that pursuant thereto, or June
27, 1963, a Donation Inter Vivos of Real Property was
in fact executed by the donor and accepted by the donee
in a separate Deed of Acceptance of Donation. 
For one thing, it is not easy to believe, as per the said contention of
defendants, that both of them would agree to the execution of the alleged
simulated Deed of Absolute Sale of August 4, 1964.  For another, it is equally difficult to
understand why the real intention of defendant Elena Pecson
in the Deed of Absolute Sale of August 4, 1964, just mentioned was to donate
the said property when, according to the STIPULATION OF FACTS, she had already
donated the same to her co-defendant and the latter had already accepted the
same both on June 27 and 28, 1963, respectively (Paragraphs 5 and 6).  Finally, assuming these transactions between
defendants to be true, their dubious nature cannot but arouse suspicion as to
defendants motivation.  In any event, as
plaintiffs had no hand in the said transactions, defendants cannot take
advantage of their own wrong to prejudice plaintiffs’ right under the law to
redeem the said property as already shown.

“                                x                                  x                                  x                                  x                           x                                  “

Hence, this appeal by the Corporation, upon the ground that the
Court of Appeals had erred:  (1) “in
doubting the existence and validity of the donation of the property in question
x x x not­withstanding the
stipulation of facts of the adverse, parties;” (2) “in assuming that
the deed of absolute sale executed by Elena Pecson x x is a
bilateral instrument x x binding upon” the Cor­poration; (3) “in imputing
fraud, wrong doing and wrongful moti­vation” to the Corporation; (4)
“in recognizing ‘respondents’ (te­nants’) right of redemption on the basis
of a patently void deed of absolute sale and in applying Section 12 of Republic
Act No. 3844,” and (5) “in applying the doctrine of estoppel against” the Cor­poration.

The first four (4) assignments of error are inter-related, for
they refer to different aspects of the
same question.  They will,
therefore, be considered jointly.

It is not disputed that the tenants are lessees and actual
occupants of the property in question; that they were not notified of the
execution of the deed of sale of said property by the lessor,
Miss Pecson, to the Corporation; and that,
accordingly, the te­nants would be entitled to redeem said property, pursuant
to Sec­tion 12 of Republic Act No. 3844,^[1]
if it had really been sold by Miss Pecson.

The latter and the Corporation contend, however, that there had
been, in fact, no such sale, despite the execution of the deed of sale of
August 4, 1964, because the property had al­ready been donated by Miss Pecson to the Corporation, which had duly accepted the
donation; because, being a unilateral act of Miss Pecson,
said deed of sale is not binding upon the Corpora­tion; and because, as stated
by them in their deed of revocation, said deed of sale did not express their
true intent, and, Miss Pecson had never received from
the Corporation, or from any other person or entity, the sum of P20,250 stated
in said deed of sale as the price actually paid by the Corporation to her as
follows:  “(a) July 4, 1963 –
P5,000.00; (b) January 4, 1964 – P10,000.00; (c) August 4, 1964 – P5,
250,00.”

Thus, the determination of the main issue between the parties
herein hinges on whether or not the sale attested to by said deed of sale is
real or fictitious.  This question is
essen­tially one of fact. 
Although submitted for decision upon a stipu­lation of facts and the
documents therein mentioned, this case is dependent, not upon the effect
of said documents, taken on their face value,
but upon the intention of the parties in connection therewith.  That intention is, manifestly, a question not
of law, but, of fact, the determination of which narrows the issue to
whether or not the aforementioned deed of revocation should be taken on its
face value.  The Court of Appeals reached
a negative con­clusion and held that the statements made by Miss Pecson
and the Corporation in said document are unworthy of credence.

In this connection, said deed of revocation is the only evi­dence
negating the existence of a sale.  But,
then, said deed of revocation is not conclusive upon the tenants, who are not
parties therein.  Neither are the courts
bound to take said instrument on its face value.  What
is more, the lower court found that it could not believe the
statements therein made by Miss Pecson and the
Corporation.  This finding of fact
is conclusive upon us in these proceedings for review on certiorari.

At any rate, in the
light of the surrounding circumstances, we are not prepared to disturb said
finding, for:

(1) Miss Pecson and the Corporation did
not register the deed of “donation” and the deed of acceptance
thereof.  If both were meant to be what
they appear to be on their face, the Corporation would have sought the
cancellation of Miss Pecson’s transfer cer­tificate
of title No. 39775-R and the issuance of another certificate of title in its
own name, as donee of the property in
dispute.  Yet, the Corporation did not even
have said “donation” annotated on Miss Pecson’s
TCT No. 39775-R.

(2) Although it did not sign on the deed of sale executed by Miss Pecson, there is every reason to believe that the
Corporation knew about it and acquiesced therein, as well as cooperated in its enforcement.  Indeed, said deed of sale was registered, and
Miss Pecson’s TCT No. 39775-R was cancelled, insofar
as the property in question is concerned, for which TCT No, 42854-R was issued
in the name of the Corporation, by reason of said sale, not in
consequence of the deed of donation. 
This would not have been possible without the cooperation of the
Corporation, through the non-registration of the aforementioned deeds of
donation and of accep­tance thereof.

(3) On November 11 and 12, 1964, the Corporation joined
Miss Pecson in
the execution of a deed of revocation of said deed of sale.  Said deed of revocation provided, inter alia, for the can­cellation of said TCT No. 42854-R in the
name of the Corporation and the issuance, in lieu thereof, of another
certificate of title in the name of Miss Pecson.  Upon registration of said deed of revocation,
TCT No. 42854-R was cancelled to
give way to TCT No. 44076-R, in the name of Miss Pecson.

If she had actually donated the property to the Corporation, and
the latter ad thereby acquired it, as its donee, the
issuance of TCT No. 42854-R, in
its name because of the deed of absolute sale, instead of the deed of donation,
could not have possibly injured the Corporation.  Assuming, however, that both had moral
scruples about appearing on record as having entered into a con­tract of sale,
when there had been no more than a donation, they could have executed a public
document stating that such was the real transaction between them, without
stipulating that the title already in the name of the Corporation would be
cancelled and another one issued in the name of Miss Pecson.  This stipulation – which was unnecessary, if
there were no ulterior motives – strongly suggests that the main purpose of
said deed of revocation was to put the property back in the name of Miss Pecson.  Why?

(4) On September 21, 1964, or shortly after the execution of the
deed of sale, the tenants gave formal notice of their wish to redeem the property in question,
pursuant to Section 12 of Republic Act No. 3844.  Through the deed of revocation, executed
subsequently to said notice,2 the title to said property reverted to its original
owner, Miss Pecson, thus preparing the ground or
the defense set up by her and the Corporation in
the trial court, namely, that “there is no more right of redemption to
exercise, the property having  been
restored to the former owner thereof,” in the language of Ms Honor the
Trial Judge.

(5) The existence of the ulterior motives adverted to above is deducible from the deed of
revocation, which provides: 

“That this covenant shall be without prejudice to the execution of
whatever deeds, documents and/or covenants which will contain and reflect the
real in­tention or desire of the parties herein regarding the aforementioned
parcels of land, that the PURPORTED
VENDOR3 hereby still binds herself to whatever commitments she may have made to and in favor of
the PURPORTED VENDEE4 in
connection with the afore­mentioned parcels of land,”

In other words, after the title had been restored to the original
owner, Miss Pecson – and, after the defense that
there is, therefore, nothing to redeem5 has been
availed of – she and the Corporation would execute such covenants as would
“reflect the real intention
or desire” of both she and the Corporation.  The necessity of executing such covenant
implies, not only that the deed of revocation did not state everything they
wanted and intended to do, but, also, that neither did the deed of donation and
the deed of acceptance thereof express their “real intention or
desire.” Otherwise, they could simply file both deeds the Register of
Deeds.  Indeed, the non-registration
thereof is a clear indication that they do not reflect such intention.

The first four (4) assignments of error are, therefore, clearly
untenable.

In connection with the fourth assignment of error, it is,
likewise, urged that the Court of Appeals erred in recognizing the right of the
tenants to redeem the property in
question, with an area of 29.45 hectares, for the sum of P20,250.00:  (1) because the aggregate area “actually
cultivated” by the tenants is 22.8 hectares, and Section 12 of Republic
Act No. 3844 grants to them the right of redemption “only to the extent of
the area actually cul­tivated by them”; and (2) because, pursuant to said
provision, the redemption shall be made “at a reasonable price and
consideration”, and there is no evidence thereon.

The first objection cannot be sustained for said Section 12
explicitly provides “that the entire landholding must be
redeemed.” The proviso therein, to the effect “that where there are two or
more agricultural lessees, each shall be entitled to said right of redemption
only to the extent of the area actually cultivated by him,” merely seeks
to forestall conflicts between said lessees.  It means that a tenant-lessee cannot exercise
the right of redemp­tion with respect to a portion held by another tenant-leasee.  The lessor or the buyer has no right whatsoever in
connection there­with, this being a matter that concerns exclusively the
tenants-lessees.  In a case like the
present, when the property redeemed is somewhat bigger than the area actually
cultivated by each lessee, the division of the excess among the tenants
will have to be settled, either by mutual agreement between them, or in
appropriate judi­cial proceedings.

The second
objection is well taken, no proof
having been in­troduced on the
“reasonable price” of the property in question.  Such price should
be determined by the trial court, after due notice to the parties and hearing.

The fifth assignment of error is premised upon the fact that the Corporation was not a party to the deed of sale executed by Miss Pecson. 
As above indicated, the Corporation had, however, cooperated with her in enforcing said deed, by the registration thereof, in lieu of the deed
of donation and the deed of acceptance
thereof– which the Corporation refrained from filing
with the Register of Deeds
– and the issuance of TCT No. 42854-R in the name of the Corporation, upon
the partial cancellation of Miss Pecson‘ s TCT No. 39775-R, and other acts and declaration already adverted to. 
Furthermore in view of the other attending circumstances, the result would be the same, even if we discarded the principle of estoppel,

WHEREFORE, the
decision appealed from is hereby affirmed,
except as regard the price of redemption,
determination of which the
record should be remanded to the trial court for further proceedings, without special pronouncement as to the costs in this instance.

IT IS SO ORDERED.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro, Angeles and Fernando, JJ., concur.

^[1]
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:  Provided, fur­ther,
That where there are two or more agricultural lessees, each shall be entitled
to said right of redemption only to the extent of the area actually cultivated by
him. 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.

2
On November 11 and 12, 1964.

3
Miss Pecson.

4
The Corporation.

5
On the part of
the tenants.