G.R. No. 129889; July 11, 2002
SPOUSES JESUS AND TERESITA FRILLES, petitioners, vs. SPOUSES ROBERTO AND CLARA YAMBAO AND P. T. LEELIN REALTY & DEVELOPMENT CORPORATION, respondents.
FACTS
Spouses Jesus and Teresita Frilles were lessees of a parcel of land in Makati City owned by Clara Paterno-Yambao and her brother Leonardo Paterno under a 15-year lease contract executed in 1974. The contract was renewable at the will of both parties, and the Frilles spouses constructed a residential building on the property. In 1983, the owners sold the land to P.T. Leelin Realty & Development Corporation. The Frilles spouses filed a complaint for rescission of the deed of sale and reconveyance, alleging that the sale deprived them of their preferential right to purchase the property under Presidential Decree No. 1517 (the Urban Land Reform Law), as they had been legitimate tenants for more than ten years.
The Regional Trial Court ruled in favor of the Frilles spouses, granting a summary judgment that declared their preferential right to purchase, nullified the deed of sale to Leelin Realty, and ordered the property conveyed to them. The Court of Appeals reversed this decision, dismissing the complaint. The appellate court held that PD 1517 did not apply because the subject property was not located within a declared Urban Land Reform Zone or Area for Priority Development.
ISSUE
Whether or not petitioners Spouses Frilles are entitled to the right of first refusal to purchase the subject lot under Presidential Decree No. 1517.
RULING
No. The Supreme Court denied the petition and affirmed the Decision of the Court of Appeals. The legal logic is anchored on the specific application requirements of PD 1517. While Section 6 of the decree grants legitimate tenants of ten years or more who have built their homes on the land a right of first refusal, this protection is not universally applicable to all urban lands. The law explicitly applies only to parcels located within areas that have been officially proclaimed as Urban Land Reform Zones by the President.
The Court examined Proclamation No. 1893, issued by President Ferdinand Marcos, which declared the entire Metropolitan Manila as an Urban Land Reform Zone. However, the Proclamation specifically enumerated only ten pilot areas within Metropolitan Manila where the reform provisions would initially take effect. The list did not include Santillan Street in Barangay Pio del Pilar, Makati City, where the subject property is situated. Consequently, since the lot is not within a proclaimed zone where PD 1517 is operative, the petitioners cannot invoke the right of first refusal provided therein. The sale by the owners to Leelin Realty was therefore valid, and the petitioners have no preferential right to purchase the property under the cited law.
