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FRANCISCO ESTOLAS, petitioner, vs. ADOLFO MABALOT, respondent.

[G.R. No. 133706. May 7, 2002]

NATURE: Petition for Review on Certiorari assailing the decision of the Court of
1. A Certificate of Land Transfer (CLT) was issued in favor of Mabalot over a certain
parcel of land.
2. Later, needing money for medical treatment, Mabalot passed on the land to
Estolas for a certain amount of money and rice.
3. According to Mabalot, there was only a verbal mortgage; while according to
Estolas, a sale had taken place. Acting on the transfer, the DAR officials
authorized the survey and issuance of an Emancipation Patent, leading to the
issuance of a Transfer Certificate of Title in favor of the Estolas.
4. Mabalot later filed a complaint before the Barangay Lupon to redeem the land.
No amicable settlement was reached, the case was referred to the DAR regional
5. Estolas insists that the subject land had been sold to him by Mabalot and
requested the DAR to cancel the CLT in Mabalots name.
DAR District Office Investigation Report:
Mabalot merely gave the land to Estolas as guarantee for the payment of a loan he
had incurred from the latter; and recommended that the CLT remain in the name of
Mabalot and that the money loan be returned to Estolas.
(Estolas elevated the case to the regional director).
DAR Regional Director Order:
The act of Mabalot in surrendering the subject land in favor of Estolas constituted
abandonment, Mabalots prayer for redemption of the subject land is denied.
(Mabalot appealed to the DAR Central Office)
DAR Central Office Order:
Regional Director Order reversed. Estolas is ordered to return the land to Mabalot.
(Estolas appealed to the Office of the President, his appeal was dismissed. Estolas
appealed to the CA)

Court of Appeals decision:

The transfer by Mabalot to Estolas is void, the land should be returned to Mabalot.
The land was acquired by Mabalot through PD 27, which prohibits the transfer of
land except by hereditary succession to the heirs or by other legal modes to the
government. Mabalot had not effectively abandoned the property, because he tried
to redeem it in two occasions. The effort failed because Estolas had demanded a
considerable amount of money for it. Mabalot continued to hold on to the CLT
covering the land, and that he would not have even thought of bringing an action
for the recovery of the same if he honestly believed that he had already given it up
in favor of Estolas.
Whether or not Mabalot abandoned the subject property, thereby making it
available to other qualified farmer-grantees?
Case for Petitioner:
Estolas avers that Mabalot neither protested when the former had the subject land
surveyed and planted with 40 mango trees, nor attempted to return the money he
had borrowed from petitioner. Because the lot has been abandoned by respondent,
the beneficiary, and because PD 27 does not prohibit the transfer of properties
acquired under it, Estolas theorizes that the DAR may award the land to another
qualified farmer-grantee.
NO. Title acquired pursuant to PD 27 shall not be transferable except to the
grantees heirs by hereditary succession, or back to the government by other legal
For abandonment to exist, the following requisites must be proven:
(a) a clear and absolute intention to renounce a right or claim or to desert a right or
property and
(b) an external act by which that intention is expressed or carried into effect.
Administrative Order No. 2 defines abandonment or neglect as a willful failure of the
agrarian reform beneficiary, together with his farm household, to cultivate, till or
develop his land to produce any crop, or to use the land for any specific economic
purpose continuously for a period of two calendar years. In the present case, no
such willful failure has been demonstrated. Quite the contrary, Mabalot has
continued to claim dominion over the land.
Even if Mabalot did indeed abandon his right to possess and cultivate the subject
land, any transfer of the property may only be made in favor of the government. In
the present case, there was no valid transfer in favor of the government. It was
Estolas himself who requested the DAR to cancel Mabalots CLT and to issue another
one in his favor. Estolas cannot, by himself, take over a farmer-beneficiarys
landholding, allegedly on the ground that it was abandoned. The proper procedure
for reallocation when a tenant-farmer refuses to be a beneficiary of PD 27 must be
followed to ensure that there was indeed an abandonment, and that the subsequent
beneficiary is a qualified farmer-tenant as provided by law.

WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.

PABLO BASBAS, plaintiff-appellant, vs. RUFINO ENTENA, FLAVIANO TIBAY and

ANGELINA ENTENA (Spouses), and R. M. RESURRECCION as acting
Registrar of Deeds of the Province of Laguna, defendants-appellees.

G.R. No. L-26255

June 30, 1969

NATURE: Appeal from the decision of the CAR.

1. Basbas is the leasehold tenant of a riceland owned by Rufino.
2. Rufino executed a Deed of Sale covering the riceland in favor of Sps. Flaviano
and Angelina.
3. Rufino sent a letter to Basbas informing the latter that the land was for sale and
that Basbas was given a certain period to communicate his intention to purchase
4. Basbas sent a reply accepting the offer, although disagreeing with the price.
Basbas also mentioned that he was enlisting the aid of the government in
purchasing the land.
5. Basbas sent a letter to the Land Authority asking for help to acquire the land.
The Land Authority replied that his request is being processed and action will be
taken thereon once the Land Bank has been fully organized.
6. Rufino and his wife executed an affidavit stating that Basbas was notified of the
sale before its conveyance, that Basbas refused or failed to exercise the right of
pre-emption granted under the Agricultural Land Reform Code.
7. The submission of the affidavit enabled the registration of the Deed of Sale in
favor of Sps. Flaviano and Angelina.
8. Basbas filed a case before the CAR seeking to compel Rufino to sell the land to
CAR decision:
Case dismissed. Basbas failed to make tender of payment and consignation of the
purchase price hence the landowner cannot be compelled to sell the land to him.

Whether or not tender of payment and judicial consignation of the purchase price
are necessary before a tenant-lessee may avail himself of the right of pre-emption
or of redemption provided in Sections 11 and 12 of the Agricultural Land Reform
Case for Plaintiff:
The CAR erred in dismissing the action for non-tender of the redemption price, since
the law does not require such tender, and the tenant is not bound to redeem his
land at the price for which it was sold, but only at a reasonable price and
consideration. The SC also ruled in two past cases that previous tender of the
redemption money is not indispensable.
The CAR did not err.
Basbass claim to preference in purchasing the land, in case the said land is to be
sold, or to his right to redeem it in 2 years should the land be sold without his
knowledge, is predicated upon Sections 11 and 12 of the Agricultural Land Reform
Code (Republic Act 3844):
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 x x
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.
There is no showing that the Land Reform Council has proclaimed that the
government machineries and agencies in the region are already operating, as
required by section 4 of Republic Act 3844.
Granting that Sections 11 and 12 are operative, yet this Court has ruled in a past
case that the timely exercise of the right of legal redemption requires either tender
of the price or valid consignation thereof. The redemption price should either be
fully offered in legal tender or else validly consigned in court. Only by such means
can the buyer become certain that the offer to redeem is one made seriously and in
good faith. A buyer can not be expected to entertain an offer of redemption without
attendant evidence that the redemptioner can, and is willing to accomplish the
repurchase immediately. A different rule would leave the buyer open to harassment

by speculators or crackpots, as well as to unnecessary prolongation of the

redemption period, contrary to the policy of the law.
The right of a redemptioner to pay a reasonable price does not excuse him from the
duty to make proper tender of the price that can be honestly deemed reasonable
under the circumstances, without prejudice to final arbitration by the courts.
As shown by the evidence in this case, the redemptioner has no funds and must
apply for them to the Land Authority, which, in turn, must depend on the availability
of funds from the Land Bank. It then becomes practically certain that the landowner
will not be able to realize the value of his property for an indefinite time beyond the
two years redemption period.
The cases pointed out by Basbas in support of his argument involve redemptioners
who had consigned or deposited in court the redemption price when action was
filed, for which reason prior tender was held excused. In this case, there was
neither prior tender nor did judicial consignation accompany the filing of the suit.
Unless tender or consignation is made requisite to the valid exercise of the tenant's
right to redeem, everytime a redemption is attempted, a case must be filed in court
to ascertain the reasonable price. On the other hand, a prior tender by the tenant of
the price that he considers reasonable affords an opportunity to avoid litigation, for
the landowner may well decide to accept a really reasonable offer, considering that
he would thereby save the attorney's fees and the expense of protracted litigation.
Section 74 of the Land Reform Act (RA 3844) establishes a "Land Bank of the
Philippines" intended "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." No expression in this
part of the law, however, indicates, or even hints, that the 2-year redemption period
will not commence to ran until the tenant obtains financing from the Land Bank, or
stops the tenant from securing redemption funds from some other source.
WHEREFORE, the appealed order granting the motion to dismiss the complaint is


FLORES, Petitioners,
vs. CEMENT CENTER,INC., Respondent.
G.R. No. 180374

January 22, 2010

NATURE: Petition for Review on Certiorari assailing the decision of the CA which granted
Cement Centers Petition for Review and nullified and set aside the decisions of the
Regional Adjudicator and of the DAR Adjudication Board (DARAB) dismissing the
Complaint for Confirmation of Voluntary Surrender and Damages filed by Cement Center.
1. Petitioners were tenant-farmers cultivating three parcels of agricultural land
owned by Cement Center.
2. Cement Center filed a Complaint for Confirmation of Voluntary Surrender and
Damages against petitioners with the DARAB. It claimed that petitioners entered
into a Compromise Agreement with Cement Center whereby the former, for and
in consideration of P3,000 each, voluntarily surrendered their respective
landholdings. However, despite Cement Centers repeated demands, petitioners
refused to vacate subject landholdings.
3. Petitioners alleged that their consent to the Compromise Agreement was
obtained through fraud, deceit, and misrepresentation. They claimed that:
a. Cement Center induced them to sign a Compromise Agreement by
representing that the subject landholdings are no longer viable for
agricultural purposes.
b. Cement Center assured them that they would only apply for the conversion of
the land and that they would have to surrender the land only upon the
approval of said application and that thereafter, they will each be paid a
disturbance compensation.
c. Cement Center promised to hire them to work on the project that was
planned for the converted land. But, should the application for conversion be
denied, petitioners will continue to be tenants and could later become
beneficiaries under the Comprehensive Agrarian Reform Law.
Regional Adjudicator Ruling:
Case dismissed. The Compromise Agreement was not enforceable because it
violated the provisions of Administrative Order No. 12, which requires the payment
of disturbance compensation which should not be less than five times the average
of the annual gross value of the harvest on their actual landholdings during the last
five preceding calendar years. The disturbance compensation of P3,000 being
offered by Cement Center to each of the petitioners is grossly inadequate. Cement
Center likewise did not offer homelots to the petitioners as required under the
aforesaid order. Since Cement Centers application for conversion was denied, then
the purpose for the execution of the Compromise Agreement was rendered
nugatory. As a consequence of the denial of the application, the subject

landholdings shall be placed under the Comprehensive Agrarian Reform Program

(CARP) compulsory coverage, as provided under the Administrative Order No. 12.
(Cement Center appealed to the DARAB).
DARAB Ruling:
Appeal denied.
Cement Center failed to prove that petitioners voluntarily
surrendered their tenancy rights over the subject landholdings. Since the
application for conversion was denied, then the Compromise Agreement is not a
perfected obligation; it is as if the petitioners voluntary surrender never existed.
(Cement Center filed a Petition for Review before the CA)
CA Ruling:
Petition granted. The Compromise Agreement executed by the parties is valid. Its
enforceability is not subject to the approval by the DARAB of Cement Centers
application for conversion. Likewise, the deficiency in consideration is not a ground
to annul an otherwise valid and enforceable agreement. Petitioners are found to be
literate on the ground that they were able to affix their signatures to the agreement.
Whether or not petitioners as tenants-farmers intended to absolutely and voluntarily
surrender their tenancy rights over the subject landholdings.
Case for Petitioners:
They did not execute the Compromise Agreement with a view to absolutely sell and
surrender their tenancy rights in exchange for P3,000.00 for each of them. The
agreement was subject to suspensive conditions, i.e., the approval of Cement
Centers application for conversion of the land to non-agricultural and their
subsequent absorption as laborers in the business that Cement Center will put up
on said land, or, if the application will not be approved, petitioners will continue to
be tenants of the land and could later on qualify as beneficiaries of the CARP. They
were not aware that these conditions were not incorporated in the Compromise
Agreement because they were not literate in the English language used. Neither
were they represented by counsel nor were the contents of the agreement
explained to them.
The Compromise Agreement should be interpreted in
accordance with the real intention of the parties pursuant to Articles 1370 and 1371
of the Civil Code. Since they are illiterate in the English language, they could not
have given their valid consent to the Compromise Agreement. The disturbance fee
of P3,000.00 for each tenant violates Administrative Order No. 12.
Case for Cement Center:
Petitioners voluntarily surrendered their landholdings. The Compromise Agreement
does not reflect the conditions alleged by petitioners. Parol evidence should not be
allowed to prove such conditions; that petitioners cannot claim that they are
illiterate in the English language and that the contents of the agreement were not
explained to them as it is incumbent upon every contracting party to learn and
know the contents of an instrument before signing and agreeing to it; and, that it
was not necessary for petitioners to be assisted by counsel in signing the
agreement as the execution thereof is not akin to a custodial investigation or

criminal proceedings wherein the right to be represented by counsel is

indispensable. As to the disturbance fee, the sum of P3,000.00 for each tenant is
fair and sufficient because apart from said amount, petitioners were allowed to
cultivate the lands for a single cropping without any obligation to pay any lease
rental in the form of palay or cotton harvest or any other mode of payment.
NO. The Compromise Agreement did not constitute the "voluntary surrender"
contemplated by law.
Cement Center failed to present evidence to show that the disturbance
compensation package corresponds with the compensation required by the said
Administrative Order.
Neither was there any showing that said disturbance
compensation is not less than five times the average annual gross value of the
harvest on petitioners actual landholdings during the preceding five calendar years.
Moreover, it was not shown why petitioners as tenant-farmers would voluntarily give
up their sole source of livelihood. There was likewise no showing that the money
was indeed advantageous to petitioners families as to allow them to pursue other
sources of livelihood. To stress, tenancy relations cannot be bargained away except
for the strong reasons provided by law which must be convincingly shown by
evidence in line with the State's policy of achieving a dignified existence for the
small farmers free from pernicious institutional restraints and practices.
The evidence on record and Cement Center's arguments are insufficient to
overcome the rights of petitioners as provided in the Constitution and agrarian
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals and
its Resolution are REVERSED and SET ASIDE. The Decisions of the Regional
Adjudicator and the Department of Agrarian Reform Adjudication Board dismissing
respondents Complaint for Confirmation of Voluntary Surrender and Damages are