GR 143666; (March, 2005) (Digest)
G.R. No. 143666 . March 18, 2005
SOLEDAD MENDOZA and SPOUSES PHILIP and MA. CARIDAD CASIÑO, Petitioners, vs. PURITA BAUTISTA, Respondents.
FACTS
Respondent Purita Bautista, a long-term tenant, filed a complaint for annulment of sale and reconveyance against petitioners. She alleged that the owners, the Raymundo spouses, sold the leased property to the Casiño spouses without offering it to her first, violating her right of first refusal under the Urban Land Reform Law (P.D. No. 1517). Petitioners moved to dismiss the case on the ground of res judicata, citing a prior case (Civil Case No. 60953) involving the same parties and subject matter which was dismissed. The trial court denied the motion, declared petitioners in default for failure to file an answer, and denied their subsequent motions to lift the order of default. Petitioners’ petition for certiorari with the Court of Appeals and subsequent petition for review with the Supreme Court (G.R. No. 111034) were both dismissed. The trial court then proceeded to receive respondent’s evidence ex parte.
ISSUE
The core issue is whether the respondent, as a legitimate tenant, is entitled to the right of first refusal under P.D. No. 1517, and whether the petitioners’ defense of res judicata is tenable.
RULING
The Supreme Court denied the petition and affirmed the lower courts’ decisions. The defense of res judicata was correctly rejected. The prior case (Civil Case No. 60953) was dismissed for non-suit, which is a dismissal without prejudice under Section 3, Rule 17 of the Rules of Court. Consequently, it does not constitute a judgment on the merits that would bar a subsequent action. The Court also upheld the application of P.D. No. 1517. The law grants a right of first refusal to legitimate tenants who have resided on the land for ten years or more. The respondent, having leased the property since 1967, qualified as such a tenant. The sale to the petitioners without first offering the property to the respondent was therefore invalid. The Court ordered the reconveyance of the property to the respondent upon her payment of the purchase price of ₱45,000.00 to the petitioners. The legal logic is clear: a dismissal without prejudice does not trigger res judicata, and a qualifying tenant’s statutory right of first refusal must be respected by the landowner.