Bermudez v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: In January 1981, private respondent filed an illegal detainer case against petitioners, alleging that petitioners were allowed to occupy a parcel of land in Sampaloc, Manila, in 1965, through tolerance and with the understanding that they could be evicted when the owner needed the premises. Petitioners refused to vacate when the owner needed the property for personal use. Procedural History: The Metropolitan Trial Court (MTC) dismissed the complaint, finding Presidential Decree No. 1517 (PD 1517) applicable. The Regional Trial Court (RTC) affirmed the MTC decision. The Intermediate Appellate Court (IAC) initially affirmed the RTC but, upon reconsideration, reversed its ruling, ordering petitioners to vacate the premises. The Petition: Petitioners filed a petition for review, contending that the IAC gravely abused its discretion in rendering its Amended Decision.
Issue(s)
Whether petitioners, as occupants by mere tolerance, are entitled to the protection of Section 6 of PD 1517, considering their status as non-bona fide tenants. Whether petitioners can claim the benefit of PD 1517, considering the owner's intent to sell the property and the petitioners' failure to exercise their right of first refusal.
Ruling
The petition is dismissed, and the Amended Decision of the Intermediate Appellate Court is affirmed. Petitioners are ordered to vacate the premises and remove their constructions/improvements.
Ratio Decidendi
On the applicability of PD 1517 and the status of petitioners: The Court held that petitioners cannot take advantage of the provisions of PD 1517, specifically Section 6, because they are not bona fide tenants of the property. The evidence showed that petitioners entered the land through the tolerance of the owner, and they failed to establish a valid contract of lease. The definition of a tenant under Section 3(f) of PD 1517 explicitly excludes those whose presence is merely tolerated and without the benefit of a contract. Therefore, petitioners, as occupants by mere tolerance, do not qualify as "legitimate tenants" entitled to the protection of the decree. The Court emphasized that the protective mantle of PD 1517 extends only to rightful occupants and not to those whose possession is merely tolerated. On the intent to sell and the right of first refusal: The Court further clarified that PD 1517 applies when the owner intends to sell the property to a third party, granting the legitimate tenant the right of first refusal. In this case, when the former owner, Rita Legarda Inc., offered the property for sale in installments, petitioners admitted they did not apply to buy it because they could not afford it. This admission demonstrates that they did not exercise their potential right of first refusal, even if they were considered legitimate tenants, and thus cannot use PD 1517 to prevent their ejectment by the new owner who is entitled to the use and possession of his property. The private respondent's need for the premises for his own use also entitles him to recover possession under Batas Blg. 25.
Main Doctrine
Occupants whose presence on the land is merely tolerated and without the benefit of contract cannot claim the protection of PD 1517, as this decree extends only to 'legitimate tenants' who are rightful occupants.