In Marcelo v. Gucilatar, the Supreme Court held that agricultural tenants can exercise their right of redemption even without prior tender or consignation of the redemption price, provided there is certification from the Land Bank of the Philippines (LBP) that it will finance the redemption. This decision underscores the State’s commitment to agrarian reform, ensuring that tenants are not deprived of their right to own land due to financial constraints. The ruling reinforces the principle that agrarian justice aims to uplift tenants from historical economic disadvantages, giving substance to the policy of providing land to those who till it.

Foreclosure Fallout: Can Tenants Redeem Land Without Upfront Payment?

This case arose from two consolidated actions before the Department of Agrarian Reform Adjudication Board (DARAB). Juanito Gucilatar (respondent) sought to eject Josefina Marcelo, Eligio Capule, and Carlito Nicodemus (petitioners) from land they were tenanting, asserting ownership based on a foreclosure sale. Petitioners, in turn, filed a petition for redemption, claiming they were not informed of the mortgage or subsequent sale. The central legal question was whether the tenants validly exercised their right of redemption, considering they did not initially tender or consign the redemption price.

The petitioners argued that they were not properly notified about the sale of the land to the respondent and that their filing of the redemption case itself constituted a formal offer to redeem, negating the need for prior tender or consignation of the redemption price. Citing previous jurisprudence, they contended that a bona fide tender is not essential when the legal action demonstrates a clear intent to redeem. The respondent countered that an offer to redeem must be accompanied by either a formal tender with consignation or a complaint coupled with consignation, arguing that the petitioners’ failure to do so invalidated their claim. The Land Bank of the Philippines (LBP) questioned whether the petitioners had sufficiently proven their status as agricultural tenants with rights of security of tenure and redemption, emphasizing that agricultural tenancy cannot be presumed.

The Supreme Court anchored its decision on Republic Act (R.A.) No. 3844, also known as the Agricultural Land Reform Code, which establishes the agricultural leasehold system. The Court emphasized the State’s policy of promoting social justice and ensuring a dignified existence for small farmers. A key aspect of this policy is the protection of agricultural tenants’ security of tenure, which shields them from arbitrary dispossession. As the Court noted, “The existence of an agricultural tenancy relationship between the lessor and the lessee gives the latter rights that attach to the landholding, regardless of whoever may subsequently become its owner.”

Section 12 of R.A. No. 3844, as amended by R.A. No. 6389, explicitly grants agricultural lessees the right of redemption when land is sold to a third party without their knowledge. The law states:

Section 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 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 the redemption under this Section may be exercised within one hundred eighty days from notice in writing which shall be served by the vendee on all lessees affected and the Department of Agrarian Reform upon the registration of the sale, and shall have priority over any other right of legal redemption. The redemption price shall be the reasonable price of the land at the time of the sale.

The Court found that the petitioners were indeed agricultural tenants, a fact supported by the former landowner’s acknowledgment and the DARAB’s own rulings in previous decisions. Furthermore, the Court noted the undisputed fact that the petitioners did not receive written notice of the sale to the respondent, which meant the 180-day prescriptive period for exercising the right of redemption had not begun to run. Thus, the petition for redemption was timely filed.

Addressing the issue of tender or consignation, the Court acknowledged the general rule that these are indispensable requirements for a valid redemption. However, the Court emphasized the crucial role of the Land Bank of the Philippines (LBP) in financing such redemptions, as mandated by Section 12 of R.A. 3844. To fully understand the provision, it states that:

The Department of Agrarian Reform shall initiate, while the Land Bank shall finance said redemption as in the case of pre-emption.

The Court reasoned that requiring tenants to tender or consign the redemption price upfront would render the LBP’s financing role meaningless, effectively depriving many tenants of their right to redeem. Instead, the Court held that a certification from the LBP indicating its willingness to finance the redemption would suffice in cases where tenants file a redemption case without prior tender or consignation. The Supreme Court’s ruling ensures the legislative intent behind the agrarian reform laws is realized, offering a lifeline to tenants who might otherwise lose their land due to financial constraints. This is more than just a legal victory; it’s a practical step towards realizing the promise of agrarian justice.

FAQs

What was the key issue in this case?	The central issue was whether agricultural tenants could validly exercise their right of redemption without first tendering or consigning the redemption price. The court clarified the role of the Land Bank of the Philippines (LBP) in financing redemptions.
What is the right of redemption for agricultural tenants?	The right of redemption allows tenants to buy back the land they till if it’s sold without their knowledge. This right is enshrined in Republic Act No. 3844 to protect tenants’ security of tenure.
What is the role of the Land Bank of the Philippines (LBP) in land redemption?	The LBP is mandated to finance the redemption of land by agricultural tenants. This ensures that tenants are not deprived of their right to own land due to lack of funds.
What happens if the tenant cannot afford the redemption price?	If the tenant cannot afford the redemption price, a certification from the LBP that it will finance the redemption suffices. This eliminates the need for prior tender or consignation.
Why is written notice of sale important for tenants?	Written notice of the sale triggers the 180-day period within which tenants must exercise their right of redemption. Without such notice, the prescriptive period does not begin to run.
What is the significance of R.A. 3844 in this case?	R.A. 3844, the Agricultural Land Reform Code, is the legal bedrock for protecting tenants’ rights. It mandates the LBP to finance redemptions, ensuring tenants can become landowners.
How does this ruling affect landowners?	Landowners must ensure that agricultural tenants are properly notified of any sale of the land. Failure to do so can result in the tenants exercising their right of redemption, potentially reversing the sale.
What does this case mean for agrarian reform in the Philippines?	This case reinforces the goals of agrarian reform by making it easier for tenants to own the land they cultivate. It prevents financial constraints from becoming insurmountable barriers to land ownership.
What evidence can prove agricultural tenancy?	Proof of tenancy can include rental agreements, receipts of rental payments, and testimonies from the former landowner acknowledging the tenancy.

In conclusion, the Supreme Court’s decision in Marcelo v. Gucilatar reaffirms the State’s commitment to agrarian reform and social justice. By recognizing the LBP’s role in financing land redemptions, the Court has ensured that agricultural tenants are not unjustly deprived of their right to own the land they till. This ruling promotes a more equitable distribution of land ownership, fulfilling the promise of agrarian reform and dignity for the Filipino farmer.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: JOSEFINA B. MARCELO, ET AL. v. JUANITO GUCILATAR, ET AL., G.R. No. 224040, October 06, 2021