SPOUSES ANICETAS LACSON & LETICIA BASILIO, PETITIONERS, VS. CELESTINO PINEDA, ET AL., RESPONDENTS.

The spouses Anicetas Lacson and Leticia Basilio –
hereinafter referred to as the Lacsons – seek the
review of a decision of the Court of Appeals modifying that of the Court of
Agrarian Relations – hereinafter referred to as the CAR – Fifth Regional
District, Branch XX, stationed at San Fernando, Pampanga.

The background facts, as found by the Court of Appeals, are:

“Donata Carlos or Cresencia Gomez, mother of defendant Mardonio
Carlos, used to be the owner of ten and a half (10-1/2) hectares of land,
situated in San Matias, Sto.
Tomas, Pampanga, and composed of Lots 28, 49 and 66,
all of the Cadastral Survey of San Fernando, Pampanga.  The land is devoted to palay,
and several persons have made cultivations thereon.  After liberation, or in the year 1946, Mardonio Carlos inherited the property.  On May 28, 1963, Mardonio
Carlos and his wife, Cesarea Sazon,
entered into a contract entitled “Agreement of Sale of Real
Properties” with their co-defendants, the spouses Anicetas
Lacson and Leticia Basilio,
whereby the vendors promised and undertook to sell Lots 28 and 49, containing
an area of 5.5574 hectares, to the vendee upon full payment by the latter of
the consideration of P16,672.00.  Exhibit
1-Carlos.  On October 28, 1963, an instrument of absolute sale
was executed by Mardonio Carlos and Cesarea Sazon in favor of Anicetas Lacson and Leticia Basilio stating that the vendors sell and convey the two
lots above-mentioned for and in consideration of the sum of P10,000.  Exhibit 2-Carlos.

“On April 30, 1964, following unsatisfied extrajudicial
demands for redemption, plaintiffs Celestino Pineda
and Fausto David filed the instant suit in court
against the two sets of couple aforenamed, praying to
be allowed to redeem ‘their respective landholdings’ in the two lots, and for
damages.  Their cause of action is based
on Sections 11 and 12 of Republic Act No. 3844, otherwise known as the
Agricultural Land Reform Code, providing as follows:

‘SEC. 11.  Lessee’s 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:  Provided,
That the entire landholding offered for sale must be pre-empted by the Land
Authority if the landowner so desires, unless the majority of the lessees
object to such acquisition:  Provided,
further, That where there are two or more agricultural lessees, each
shall be entitled to said preferential right only to the extent of the area
actually cultivated by him.  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.’

‘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.’

“In their complaint the plaintiffs alleged that they are the
tenants of Mardonio Carlos and Cesarea
Sazon on the two lots in question, Pineda’s landholding
being 2.5 hectares while that of David being 1.9 hectares; that they were not
notified of the sale of the two lots to the Lacsons
nor were the lots offered to be sold to them; and that they are ready and
willing to redeem their respective landholdings.

“In their separate answers the defendants denied the status of
plaintiffs as tenants on the land sold, claiming that the sole lessee-tenant
thereon was Igmidio Mendoza.  They admitted that the plaintiffs were not
notified of the sale, but claimed that there was no necessity for such notice
because plaintiffs are not tenants.  It
was averred that Igmidio Mendoza was informed of the
sale and the land was offered to him but that he expressed his inability to buy
the property.

“The court a quo found that plaintiffs are
tenants on Lots 28 and 49; that they were not notified of the sale; that the
sale was consummated on October 28,
1963; and that the consideration is P10,000.00 and not
P16,672.00.  Upon the foregoing findings,
the court decided for the plaintiffs.”^[1]

The dispositive part of the CAR
decision is as follows:

“In the light of the foregoing x x x, we are of the considered opinion that the plaintiffs in
this case (Celestino Pineda and Fausto
David), are entitled to redeem their landholdings of about 2.5 and 1.9
hectares, respectively, which were sold by their landholders on October 28,
1963 without previous notice to them, pursuant to and in accordance with the
provisions of Sections 11 and 12, Rep. Act 3844.

“WHEREFORE, conformably to this opinion, we hereby render
judgment in this case declaring the herein plaintiffs entitled to the
provisions of Section 12, Rep. Act 3844, and authorizing said plaintiffs to
redeem their landholdings mentioned hereinbefore from defendants Lacsons, the redemption to be effected and concluded in the
manner as follows:

“1.  Within ten (10) days from the finality of the
decision, respondents Lacsons shall turn over to the
Register of Deeds of this province their Transfer Certificates of Title Nos.
35034 and 35035 covering the property in question who shall, upon receipt
thereof, cancel the same and issue new certificates of title jointly in the
names of plaintiffs Celestino Pineda and Fausto David and their spouses, which new certificates of
title shall be forwarded to the Clerk of this Court within five (5) days;

“2.  Within sixty (60) days from receipt of the
certificates of title above-mentioned by the Clerk of this Court, plaintiffs
Pineda and David shall deposit with the said official the amount of P10,000.00
in cash to guarantee the payment of the redemption price mentioned herein to
defendants Lacson;

“3.  Within ninety (90) days from receipt of the
certificates of title, the plaintiffs shall undertake at their expense the
subdivision of the two (2) parcels of land covered by said titles into three
(3) separate parcels, two (2) of which shall correspond to the actual areas of
their respective landholding, and the other the remainder, and shall have the
subdivision plans thereof approved by the competent court in their names and in
the name of defendants Anicetas Lacson
and Leticia Basilio. 
They shall retain the certificates of title corresponding to them and
deliver the third certificate to the Clerk of this Court who shall transmit the same to defendants Lacson without delay;

“4.  The Clerk of Court shall determine and compute
the amount of the redemption price to be paid by each plaintiff by taking into
consideration the areas of their respective landholding multiplied by P2,000.00
per hectare or P0.20 per square meter, the said official seeing to it that any
excess in the deposit of the plaintiffs, if any, be returned to them, and the
total resulting redemption price delivered immediately to defendants Lacson.

“The complicated mechanics or procedure outlined above to
effect the redemption of the landholdings of the plaintiffs, is necessary
considering that the 5-1/2 hectares sold by defendants Carlos involved in this
litigation, covers not only the landholdings of said plaintiffs aggregating in
all to 4.4 hectares, more or less, but also a portion of the landholding of Igmidio Mendoza of about 1.1 hectares.  Without the court outlining herein the
procedure to be followed, it is difficult, if not impossible, in this case to
carry into effect the redemption provided for by law.”^[2]

On appeal taken by the Lacsons, said decision was affirmed, with a slight modification,
by the Court of Appeals.  The dispositive part of the latter’s decision reads:

“It results from all the foregoing that the appealed judgment
should be affirmed, with a modification on two points of importance.  First, the lower court erred in allowing appellee Fausto David to redeem
1.9 hectares of land.  It is true that as
alleged in the complaint this was the area of his landholding, but at the trial
it was clearly shown that his landholding on the disputed lots is 1.5 hectares
only. (p. 9, t.s.n., Jan. 12-13, 1965).  Fausto David,
therefore, can redeem no more than 1.5 hectares.  Secondly, the court a quo erred
in placing the value of the land, and requiring the tenants to redeem, at
P2,000.00 per hectare.  The two lots,
which were sold for P10,000.00, have an aggregate area of 5.5574 hectares.  The price by the hectare, therefore, should
be P1,781.41 only.

“With the above modifications, the judgment appealed from is
hereby affirmed in all other respects with costs against the appellants.”^[3]

Hence, this appeal by the Lacsons, who
allege that the Court of Appeals had gravely erred:  (1) “in ruling that the provision of the
Agricultural Land Reform Code on redemption is applicable to the sale of the
landholding subject to this instant case”; (2) “in not ruling that
the date of registration of the sale is not the date of the perfection of the
contract”; (3) “in not considering the question of lack of
jurisdiction of the Court of Agrarian Relations to hear the case”; and (4)
“in making a conflicting findings of fact.”

On account of its importance, the third assignment of error will
be taken up first.  Appellants maintain
that the CAR had no jurisdiction to hear this case because the proclamation
provided in section 128 (5) of the Agricultural Land Reform Code (Rep. Act No.
3844) was not issued, insofar as the Municipality of Sto.
Tomas, Pampanga, where the lots in question are
located, is concerned, until August 8,
1966, or after the institution of this case on April 30, 1964 and the rendition of judgment
therein on April 21, 1966.  We find no merit in this pretense.

Pursuant to said section 128 (5):

“SEC. 128.  Functions
of National Land Reform Council.  –
It shall be the responsibility of the Council:

“xxx                                       xxx                                           xxx

“(5)  To proclaim in accordance with the provisions
of this Code, which proclamation shall be considered as having been promulgated
immediately after three successive weekly publications in at least two
newspapers of general circulation in the region or locality affected by the
proclamation, preference being given to local newspapers, if any, that all the
government machineries and agencies in any region or locality relating to
leasehold envisioned in this Code are operating:  Provided, That the conversion to leasehold
in the proclaimed area shall become effective at the beginning of the next
succeeding agricultural year after such promulgation:  Provided, further, That the
proclamation shall be made after having considered factors affecting
feasibility and fund requirements and the other factors embodied in Sections
one hundred twenty-nine, one hundred thirty and one hundred thirty-one.”

The jurisdiction of the
Court of Agrarian Relations is governed, not by this section, but by section
154 of Rep. Act No. 3844, which provides:

“SEC. 154.  Jurisdiction
of the Court.  – The Court shall have
original and exclusive jurisdiction over:

“(1)  All cases or actions involving matters,
controversies, disputes, or money claims arising from agrarian relations:  Provided, however, That all
cases still pending in the Court of Agrarian Relations, established under
Republic Act Numbered Twelve hundred and sixty-seven, at the time of the effectivity of this Code, shall be transferred to and
continued in the respective Courts of Agrarian Relations within whose district
the sites of the cases are located;

“(2)  All cases or actions involving violations of
Chapters I and II of this Code and Republic Act Numbered Eight hundred and
nine; and

“(3)  Expropriations to be instituted by the Land
Authority:  Provided, however,
That expropriation proceedings instituted by the Land Tenure Administration
pending in the Court of First Instance at the time of the effectivity
of this Code shall be transferred to and continued in the respective Courts of
Agrarian Relations within whose district the subject matter or property is
located.”

Inasmuch as the case at
bar involves a matter, controversy or dispute “arising from agrarian
relations” – the right of tenants, when the land cultivated by them is
sold to a third party, to redeem it from the latter, and whether appellees Pineda and David are tenants of Mardonio Carlos – and petitioners’ refusal to allow the
redemption is violative of section 12 of Rep. Act No.
3844, it is clear that the CAR had jurisdiction to hear and decide this case.

Petitioners argue that
“the Land Reform Code is not in full force and effect in the absence of
the proclamation required in Sec. 128(5) thereof,” from which premise they
deduce that, prior to the issuance of said proclamation, “the
enforceability of the law was still suspended,” and then they draw the
conclusion that the CAR had no jurisdiction “to hear the case”.  Petitioners’ minor premise and their
aforementioned conclusion cannot be accepted.

To begin with, the major premise – to the effect that the Agricultural
Land Reform Code “is not in full force and effect” in the
absence of said proclamation – does not necessarily negate the effectivity of some or part of the provisions
of said Code.  Hence, the minor premise –
which impliedly negates the enforceability of the entire or whole
Code, including that of section 12 thereof, vesting in the lessees the right of
redemption asserted by appellees Pineda and David –
does not follow necessarily from said major premise.  Thus, for instance, there can be no doubt
that Chapter VII of said Code, entitled “Land Reform Project
Administration,” is in force, independently of the proclamation above
referred to.  In fact, by invoking section
128 – which is part of said Chapter VII – petitioners, in effect, admit that
said provision is in force.

Independently of the foregoing, neither premise nor both premises
justify the conclusion that the CAR had no “jurisdiction” to
“hear” this case.  Said
premises, if correct,^[4]
might show that it was improper or a mistake to apply said section to
the present case.  Such hypothetical
mistake implied, however, no more than an error in the exercise of the CAR’s jurisdiction, not a lack of jurisdiction.

Referring now to the first assignment of error, we note that
petitioners herein merely assume, and have not even tried to show, that section
12 of Rep. Act No. 3844 is one of the provisions whose enforceability is
dependent upon the issuance of the above-mentioned proclamation.  Upon the other hand, we had occasion to hold
otherwise in Hidalgo v. Hidalgo,^[5]
from which We quote:

“5.  It would certainly result in absurdity, contradictions
and injustice if a share tenant would be denied the rights of pre-emption and
redemption which he seeks to exercise on his own resources,
notwithstanding that the National Land Reform Council has not yet proclaimed
that all the government machineries and agencies in the region or locality
envisioned in the Code are operating – which machineries and agencies,
particularly, the Land Bank were precisely created ‘to finance the acquisition
by the Government of landed estates for division and resale to small
landholders, as well as the purchase of the landholding by the agricultural
lessee from the landowner.  The
non-operation in the interval of the Land Bank and the government machineries
and agencies in the region which are envisioned in the Code to assist the share
tenant in shedding off the yoke of tenancy and afford him the financial
assistance to exercise his option of electing the leasehold system and his
preferential right of purchasing the land cultivated by him could not possibly
have been intended by Congress to prevent the exercise of any of these vital
rights by a share tenant who is able to do so, e.g. to purchase the land, on
his own and without government assistance. 
It would be absurd and unjust that while the government is unable to
render such assistance, the share tenant would be deemed deprived of the very
rights granted him by the Code which he is in a position to exercise even
without government assistance.

“6. Herein lies the distinction between the present
case and Basbas vs. Entena
(L-26255, June 30, 1969) where the Court upheld the agrarian court’s dismissal
of the therein tenant’s action to redeem the landholding sold to a third party
by virtue of the tenant’s failure to tender payment or consign the purchase
price of the property.  There, the
tenant-redemptioner was shown by the evidence to have
no funds and had merely applied for them to the Land Authority which was not
yet operating in the locality and hence, the Court held that no part of the
Code ‘indicates or even hints that the 2-year redemption period will not
commence to run (indefinitely) until the tenant obtains financing from the Land
Bank, or stops the tenant from securing redemption funds from some other
source.’ In the present case, the petitioners-tenants’ possession of funds
and compliance with the requirements of redemption are not questioned, the case
having been submitted and decided on the sole legal issue of the right of
redemption being available to them as share tenants.  The clear and logical implication of Basbas is where the tenant has his own resources or
secures redemption funds from sources other than the Land Bank or government
agencies under the Code, the fact that the locality has not been proclaimed a
land reform area and that such government machineries and agencies are not
operating therein is of no relevance and cannot prejudice the tenant’s rights
under the Code to redeem the landholding.”

No plausible reason has been adduced, and We find none, to
warrant a departure from the foregoing ruling, which is hereby reiterated.

In an effort to avoid the application of Rep. Act No. 3844,
approved on August 8, 1963,
petitioners insist that the sale in their favor was perfected prior thereto, or
on May 28, 1963, the date
of Exh. 1-Carlos, and that the “Deed of Absolute
Sale,” Exh.
2-Carlos, executed on October 28,
1963, is merely the consummation of the undertakings set forth in Exh. 1-Carlos.  In
this connection, the CAR said:

“The defendants contended x x x that the sale of the 5-1/2 hectares to the Lacsons, should be considered perfected or consummated on
May 28, 1963 or before the approval of Rep. Act 3844, when the sum of P9,000.00
was paid as per Exh. 1, and not on October 28, 1963 or after the
passage of said law when the last payment of P7,672.00 was made.  A careful reading of the said document,
however, will show that the same is not actually an ‘Agreement of Sale’ as its
heading indicates, but only a ‘promise to sell’ on the part of Atty. Carlos
under certain conditions to be complied with by the Lacsons.  The amount of P9,000.00 mentioned therein is
not an initial payment of the purchase price, but was an ‘anticipo‘
or ‘earnest money’ which may be lost by the Lacsons
in the event they shall fail to comply with the conditions mentioned in the
document.  This contention is clearly
borne out by the following stipulations in Exh. 1, to
wit:

‘And if the vendees fail or refuse to pay the amount (P7,672.00)
within the period ending December 31, 1963, then the whole amount of P9,000.00
paid at the time of the execution of this deed shall be deemed forfeited
in favor of the vendors.’ (Underlining ours).

“Needless to state, the condition above-quoted is not
characteristic of a sale on installments, as the defendants would like this
court to consider the sale of the property in question, but it is one usually
found in agreements or promises to sell with ‘earnest money’ to guarantee the
vendor from any loss or damage arising from non-fulfillment of the obligation
of the vendee.”^[6]

The Court of Appeals sustained this conclusion in the following
language:

“For the evident purpose of taking away this case from the
ambit of the Agricultural Land Reform Code, which took effect upon its approval
on August 8, 1963, appellants argue that the sale of the two lots was
consummated on May 28, 1963, when the spouses Mardonio
Carlos and Cesarea Sazon
executed the document Exhibit 1.  This
argument cannot be sustained, for as aptly observed by the lower court, the Carloses did not sell, but merely promised to sell, the two
lots on May 28, 1963.  It was on October 28, 1963, upon full payment of the purchase price
by the appellants, that the Carloses executed an
absolute deed of sale, Exhibit 2, and only as of that date can the two lots in
question be considered to have been sold. 
Anent the consideration, the recital in the deed of sale that the two
lots were sold for a price of P10,000.00 overrides the verbal claim of Irineo Lacson that his son,
appellant Anicetas Lacson,
paid P16,672.00.  No explanation was
given by the defendants why stated consideration of P10,000.00 was placed in
the deed of sale, in the preparation of which the tenants did not have a hand,
if the amount paid was really P16,672.00. 
We choose to rely on the solemn recitals of a public document, because
they are less susceptible of perversion than the spoken word.”

We are fully in accord with these views.  Indeed, petitioners herein did not
bind themselves in Exh. 1-Carlos to buy the lots in
question.  They delivered the sum of
P9,000.00 to the spouses, Mardonio Carlos and Cesarea Sazon, who promised to
sell, transfer and convey said lots to the Lacsons
upon full payment of the aggregate sum of P16,672.00, with the understanding
that, should the Lacsons fail or refuse to pay the
sum of P7,672.00 on or before December 31, 1963, in addition to the
aforementioned sum of P9,000.00, the latter would be deemed forfeited in favor
of the Carloses.  Since the petitioners had not bound themselves
to pay the additional sum of P7,672.00 and could not, accordingly, be compelled
to pay it, said Exh. 1-Carlos partakes more of the
nature of a promise to sell on the part of the Carloses
and an option to buy on the part of petitioners herein.

Moreover, Exh. 2-Carlos, dated October 28, 1963, makes no reference
whatsoever to Exh. 1-Carlos.  The former does not purport to have been
executed in compliance with the provisions of the latter.  Besides, Exh.
2-Carlos is an outright sale to the petitioners, not for the price of
P16,672.00 stated in Exh. 1-Carlos, but for the sum
of P10,000.00.  And petitioners have not
even tried to explain why the consideration stated in Exh.
2-Carlos is P10,000.00, not P16,672.00. 
Obviously, Exh. 2-Carlos had novated the agreement contained in Exh.
1-Carlos.  In this sense, Exh. 2-Carlos is a new contract, and having been
executed when Rep. Act No. 3844 was already in force, it is manifestly subject
to the provisions thereof, particularly section 12 of said Act establishing the
right of redemption of the lessee or tenant.

Under the last assignment of error, it is urged that the Court of
Appeals had made contradictory statements in its decision, in that, on the one
hand, it had – it is claimed – held that petitioners had first paid P9,000.00,
and later delivered P7,672.00, or the aggregate sum of P16,672.00, but,
thereafter, concluded that the total price paid by them was only P10,000.00,
not P16,672.00.  No such flaw exists in
said decision.  In support of their pretense,
petitioners quote, in their brief, from page 11 of copy of the appealed
decision (attached to the petition herein as Annex A), a statement regarding
the alleged payment of the sums of P9,000.00 and P7,672.00.  Said statement was, however, a part of the narration
of petitioners‘ theory, which they tried to prove.  The fact is that Exh.
2-Carlos explicitly states that the price paid by them was P10,000.00, and that
no evidence has been introduced or effort made to explain it.  Inasmuch as the disputed finding of fact of
the Court of Appeals is based upon and borne out by Exh.
2-Carlos, on which the rights of petitioners herein are anchored, such finding
is final in this proceeding for review on certiorari.

WHEREFORE, the appealed decision of the Court of Appeals
should be, as it is hereby affirmed, with costs against the petitioners.

IT IS SO ORDERED.

Reyes, J.B.L., Makalintal, Zaldivar, Fernando, Teehankee, Barredo, Villamor, and Makasiar, JJ., concur.

Dizon, J., took no part.

Ruiz Castro, J., on leave.

^[1]
Rollo, pp. 55-58.

^[2]
CAR Decision, pp. 22-24.

^[3]
Rollo, pp. 67-68.

^[4]
The minor premise is obviously erroneous.

^[5]
L-25326-27, May 29, 1970.

^[6]
CAR Decision, pp. 19-20.