G.R. No. 147956 ; February 16, 2005
ESPERANZA S. LONGINO, petitioner, vs. ATTY. LINA A. GENERAL, OIC, Commission Member III; ATTY. NOEL A. GALAROSA, OIC, Commission Member III; ATTY. LUZ SARMIENTO, OIC, Office of the Executive Director, all of COSLAP; JUDGE JAIME F. BAUTISTA of the Regional Trial Court, Branch 75, Valenzuela City; and ELSA P. SERRANO, respondents.

FACTS

The dispute involves a parcel of land owned by the Philippine National Railways (PNR). Julian Estrella originally leased the property from PNR. He entered into a verbal sublease with respondent Elsa Serrano, who constructed commercial apartments on a portion. Estrella’s lease with PNR expired in December 1992, and Serrano later discovered he had no authority to sublease. Serrano sued Estrella for damages and won a final judgment. To satisfy the judgment, Estrella’s house on the property was sold at a sheriff’s auction, which Serrano won. Separately, PNR executed a new lease contract with petitioner Esperanza Longino for a portion of the same property in October 1999. Serrano filed a complaint with the Committee on Settlement of Land Problems (COSLAP), claiming a better right to the property based on her prior occupancy and the sheriff’s sale. COSLAP issued a resolution declaring Serrano the lawful possessor, effectively nullifying Longino’s lease contract with PNR.

ISSUE

Whether the COSLAP acted beyond its jurisdiction and competence in declaring Serrano the lawful possessor of the property and, in effect, nullifying the lease contract between Longino and the PNR.

RULING

Yes, the Supreme Court ruled that COSLAP acted beyond its competence. The legal logic is anchored on the nature of COSLAP’s jurisdiction and the rights of a property owner. COSLAP’s mandate is conciliatory and does not include the power to adjudicate ownership or determine the validity of contracts. By declaring Serrano the lawful possessor, COSLAP effectively invalidated the lease contract between Longino, a lessee in good standing, and the PNR, the absolute owner. This constituted an unwarranted intrusion into the PNR’s proprietary right to choose its lessees and to dispose of its property. The sheriff’s sale to Serrano only transferred Estrella’s house, not any leasehold rights over the land itself, as Estrella had none after 1992. Only the PNR, as owner, had the right to determine to whom and under what conditions to lease its property. Therefore, COSLAP’s resolution was set aside for having been issued without jurisdiction and with grave abuse of discretion.