GR 136996; (December, 2001) (Digest)
G.R. No. 136996 ; December 14, 2001
EDILBERTO ALCANTARA, et al., petitioners, vs. CORNELIO B. RETA, JR., respondent.
FACTS
Petitioners, claiming to be legitimate tenants or lessees of a parcel of land in Barangay Sasa, Davao City owned by respondent Cornelio B. Reta, Jr., filed a complaint in the Regional Trial Court. They sought to exercise a right of first refusal to purchase the land under Section 3(g) of Presidential Decree No. 1517 (The Urban Land Reform Act), alleging Reta had converted the land into a commercial center and was threatening to eject them. They also assailed the validity of an amicable settlement between Reta and co-petitioner Ricardo Roble. Reta countered that the land was not proclaimed as an Urban Land Reform Zone, placing it beyond P.D. 1517’s ambit, and that the applicable law was Batas Pambansa Blg. 25 due to petitioners’ failure to pay rentals. The trial court dismissed the complaint and ordered petitioners to pay unpaid rentals, a decision affirmed by the Court of Appeals.
ISSUE
Whether petitioners have the right of first refusal under Presidential Decree No. 1517.
RULING
The Supreme Court denied the petition, affirming the lower courts’ decisions. The legal logic is anchored on the inapplicability of P.D. 1517 to the subject property. The Court held that the rights under P.D. 1517, including the right of first refusal, pertain exclusively to areas proclaimed as Urban Land Reform Zones (ULRZ). The land in question had not been so proclaimed, a fact underscored by petitioners’ own prior request to the National Housing Authority for such a proclamation. Consequently, petitioners cannot invoke any right under the said law.
Furthermore, the Court found petitioners did not qualify as the “legitimate tenants” contemplated by P.D. 1517, which requires tenancy of ten years or more, building a home on the land by contract, and continuous residence for the last ten years. The arrangements with petitioners were either usufructuary (as with Roble’s use of coconut trees) or verbal lease agreements on a month-to-month basis. These verbal leases were terminable and were deemed terminated upon Reta’s demand to vacate. Finally, the Court noted that the right of first refusal under P.D. 1517 is triggered only when the landowner intends to sell the property to a third party, a circumstance not present as Reta had no intention to sell.