RESTITUTA, JESUS, ISIDRO AND JOEL, ALL SURNAMED HULGANZA AND MATILDE COLLAMAR, PETITIONERS, VS. THE HONORABLE COURT OF APPEALS AND BASILIA GEMARINO, RESPONDENTS.

Hulganza versus Gemarino

The Case

This is a petition for review on certiorari brought by the heirs of a homestead patentee against the purchaser of the homestead and against the Court of Appeals. The petitioners are Restituta, Jesus, Isidro and Joel, all surnamed Hulganza, together with Matilde Collamar; the private respondent is Basilia Gemarino. The action below was one to enforce the right of legal redemption over a parcel of land originally covered by a free patent, and to recover an unpaid balance of the purchase price. The case matters because it settles a question that recurs in every redemption problem: when the homesteader or his heirs redeem by filing a judicial action within the redemption period, must that action be accompanied by a formal offer and a bona fide tender or consignation of the redemption price? The Supreme Court answers no, and in doing so protects the policy of the Public Land Law in favor of the homesteader.

Procedural History

The petitioners filed a complaint before the Court of First Instance of Negros Occidental, seeking to recover an unpaid balance of three thousand pesos, to compel the private respondent to allow them to redeem the land under Section 119 of Commonwealth Act 141, the Public Land Act, and to recover actual damages. The trial court denied the private respondent's motion to dismiss. After trial, in a decision dated February 25, 1975, the trial court ruled for the petitioners, declaring that they have the legal right to exercise the right of redemption and ordering the private respondent to allow them to redeem at the original purchase price of ten thousand pesos, with accumulated interest at the legal rate from the execution of the deed of sale until repurchase, plus costs. The private respondent appealed. The Court of Appeals, in a judgment of reversal dated November 25, 1980, set aside the trial court's decision and entered a new one dismissing both the complaint and the counterclaim, without pronouncement as to costs. It held that the filing of the complaint without consignation of the amount due within the redemption period was an ineffective and incomplete redemption. The petitioners moved for reconsideration, which the Court of Appeals denied in a resolution dated January 14, 1981. The petitioners then came to the Supreme Court by petition for review on certiorari, and the Court gave due course to the petition.

Facts

Lot 161 of Pls. 256, situated in Barrio Mina-otoc, Calatrava, Negros Occidental, was registered in the names of the spouses Nicomedez Hulganza and Matilde Collamar under an original certificate of title issued pursuant to a free patent. On April 21, 1971, while Nicomedez was still alive, he and his wife Matilde sold the property to Basilia Gemarino for ten thousand pesos. By virtue of that sale the original title was cancelled and a new title was issued in the name of Basilia Gemarino, who from that date possessed the land peacefully, openly, adversely and without interruption in the concept of owner.

Nicomedez Hulganza thereafter died, leaving as his heirs his wife Matilde Collamar and his children Restituta, Jesus, Isidro and Joel, all surnamed Hulganza. On April 13, 1972, four days before the lapse of the five-year redemption period, the heirs filed a complaint in court seeking to repurchase the property under Section 119 of the Public Land Act. They did not consign the redemption price when they filed the complaint; it was only at the trial, more than three years later, that the lower court was informed that the money was available in the hands of Isidro Hulganza, who was then in Mindanao.

At the pre-trial the parties admitted the foregoing background. The petitioners narrowed their case to the second cause of action, the right of legal redemption, and agreed that they were not obligated to pay for the improvements introduced by the vendee. The private respondent insisted that the second cause of action stated no cause of action, that the redemption period had already lapsed, and that should the right of redemption still exist she should be paid the cost of improvements, estimated at twenty-five thousand pesos.

Issues

• Whether or not a formal offer to redeem the land, accompanied by a bona fide tender of the redemption price or consignation of that price in court, is essential within the redemption period when the right to redeem is exercised through the filing of a judicial action.

Applicable Provisions

Section 119 of Commonwealth Act 141, the Public Land Act, as amended, is the provision under which the petitioners claim the right of legal redemption:

Section 119. Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five years from the date of the conveyance.

This provision fixes both the right and its period, and the whole question in the case is whether the filing of the action within that five-year period is itself a sufficient exercise of the right.

Ruling

The Court granted the petition. On the sole issue, it held that a formal offer to redeem accompanied by a bona fide tender of the redemption price is not essential where the right to redeem is exercised through the filing of a judicial action within the redemption period. The Court rested its ruling on a doctrine already laid down in successive decisions, which it quoted with approval:

The formal offer to redeem, accompanied by a bona fide tender of the redemption price, within the period of redemption prescribed by law, is only essential to preserve the right of redemption for future enforcement beyond such period of redemption and within the period prescribed for the action by the statute of limitations. Where, as in the instant case, the right to redeem is exercised thru the filing of judicial action within the period of redemption prescribed by the law, the formal offer to redeem, accompanied by a bona fide tender of the redemption price, might be proper, but it is not essential. The filing of the action itself, within the period of redemption, is equivalent to a formal offer to redeem. Any other construction, particularly with reference to redemption of homesteads conveyed to third parties, would work hardships on the poor homesteaders who cannot be expected to know the subtleties of the law, and would defeat the evident purpose of the Public Land Law — to give the homesteader or patentee every chance to preserve for himself and his family the land that the state granted him as a reward for his labor in cleaning and cultivating it.

The Court therefore concluded that the bona fide tender of the redemption price, or its equivalent, consignation of that price in court, is not essential or necessary in this case, because the filing of the action itself is equivalent to a formal offer to redeem. The Court of Appeals had reasoned that to hold otherwise would extend the redemption period beyond that fixed by law; the Supreme Court rejected that reasoning, since the action was in fact filed within the five-year period.

Doctrine

Three rules follow from this case, and each should be tied to Section 119 of the Public Land Act. First, the formal offer to redeem, accompanied by a bona fide tender of the redemption price within the redemption period, is essential only to preserve the right of redemption for enforcement after that period, within the period fixed by the statute of limitations. Second, where the right to redeem is exercised through the filing of a judicial action within the redemption period, the filing of the action itself is equivalent to a formal offer to redeem, and neither a tender nor a consignation is required at that moment. Third, this liberal construction is dictated by the policy of the Public Land Law, which is to give the homesteader or patentee every chance to preserve for himself and his family the land the State granted him as a reward for his labor in cleaning and cultivating it.

Disposition

The Court reversed and set aside the decision of the Court of Appeals and affirmed or reinstated the decision of the trial court dated February 25, 1975, so that the petitioners prevailed and were allowed to redeem the land at the original purchase price of ten thousand pesos with legal interest.

Remember This

Memorize the line that the filing of the action itself, within the redemption period, is equivalent to a formal offer to redeem. Examiners use this case in civil law and agrarian reform questions on the homesteader's right of repurchase under Section 119 of the Public Land Act, especially where the facts show a complaint filed within the five-year period but no tender or consignation.