Solanda Enterprises, Inc. v. Court of Appeals and Luis Manlutac
REITERATIONFacts
The Antecedents: Private respondent Luis Manlutac was a tenant/lessee of the Quijano estate in Tondo, Manila, for over 40 years. On April 7, 1986, the original owners sold the estate to petitioner Solanda Enterprises, Inc. without affording the tenants their pre-emptive rights under PD 1517. Subsequently, the original owner offered to sell the land to the tenants, which they accepted. Later, tenants were informed that Solanda Enterprises was the new owner and rentals should be paid to them. Solanda Enterprises registered the land on July 2, 1991. On August 30, 1991, the tenants discovered the sale and filed a complaint for annulment of sale, reconveyance, and damages against Solanda Enterprises and the original owner (Civil Case No. 91-58568). On November 6, 1992, Solanda Enterprises filed an ejectment complaint against Manlutac (Civil Case No. 140445) for lease expiration and rental arrearages. Manlutac's answer was filed late, but he claimed excusable negligence in the service of summons. The MTC ruled in favor of Solanda Enterprises. The RTC affirmed the MTC decision. The CA reversed the RTC and dismissed the ejectment complaint. Procedural History: The Metropolitan Trial Court (MTC) rendered a summary judgment in favor of petitioner Solanda Enterprises, Inc., ordering the ejectment of private respondent Luis Manlutac. The Regional Trial Court (RTC) affirmed the MTC decision. The Court of Appeals (CA) reversed the RTC decision, setting aside the ejectment order and dismissing the complaint. The CA found Manlutac's failure to file his answer on time to be excusable and ruled that he had a right of first refusal under PD 1517. The CA also considered the pendency of Civil Case No. 91-58568, where the RTC had annulled the sale to Solanda Enterprises (though this ruling was on appeal), and a City of Manila ordinance expressing intent to expropriate the land. The Petition: Petitioner Solanda Enterprises, Inc. filed a Petition for Review on Certiorari seeking the reversal of the CA's decision, arguing that the CA erred in reviewing a final and executory RTC decision and in applying PD 1517 when the land was not within an Area for Priority Development (APD) and Urban Land Reform Zone (ULRZ).
Issue(s)
Whether the Court of Appeals had jurisdiction to review and reverse the RTC decision which petitioner claimed had become final and executory. Whether private respondent was entitled to the statutory right of first refusal under PD 1517, absent an allegation and finding that the land was included in an Area for Priority Development (APD) and Urban Land Reform Zone (ULRZ). Whether the pendency of an action for annulment of sale and reconveyance, or an ordinance authorizing expropriation, could abate an illegal detainer suit.
Ruling
The petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals are REVERSED and SET ASIDE. The decision of the RTC of Manila dated August 25, 1993, is REINSTATED. Ejectment suits settle only the issue of physical possession and are not barred by the pendency of actions for annulment of sale or reconveyance. The right of first refusal under PD 1517 requires the land to be located within both an Urban Land Reform Zone and an Area for Priority Development, which was not established in this case. An ordinance expressing intent to expropriate does not bar an ejectment suit.
Ratio Decidendi
On the timeliness of the appeal to the Court of Appeals: The Court found that the private respondent's appeal was seasonably filed. The private respondent filed a motion for reconsideration with the RTC on the last day of the reglementary period to appeal. According to Section 3 of Rule 41 of the Revised Rules of Court, when a motion for reconsideration is filed on the last day, the appeal must be perfected within the day following the receipt of notice of denial. In this case, the denial was received on April 8, 1994. April 9 and 10 were holidays, making April 11, 1994, the immediately succeeding business day. A motion for extension of time to file a petition for review was filed on April 11, 1994, thus it was seasonably filed. Therefore, the CA did not err in reviewing the RTC decision. On the right of first refusal under PD 1517: The Court ruled that the private respondent was not entitled to the right of first refusal under PD 1517. Proclamation No. 1967, which delimited the areas for the application of PD 1517, requires that the land be located within both an Area for Priority Development (APD) and an Urban Land Reform Zone (ULRZ). The conjunctive 'and' in the law clearly indicates this dual requirement. The annex of Proclamation No. 1967 did not list A. Rivera Street in Tondo, Manila, where the disputed land is located, as part of any APD. Furthermore, a certification from the Housing and Land Use Regulatory Board (HLURB) confirmed that the property was outside any APD and ULRZ specified in Proclamation No. 1967. Therefore, the basis for the right of first refusal was not met. On the effect of the pendency of other cases and the expropriation ordinance: The Court reiterated that ejectment suits are summary in nature and primarily concern the issue of physical possession. The pendency of Civil Case No. 91-58568, an action for annulment of sale and reconveyance, which was still on appeal, could not abate the ejectment suit. The private respondent's alleged right of possession was conditioned on his right to acquire ownership, which was inchoate. Moreover, Manila City Ordinance No. 7806, which merely expressed an intent to expropriate the land, did not establish the private respondent's right of possession or serve as a bar to the ejectment case. The ordinance did not guarantee that the land, if expropriated, would be awarded or sold to the private respondent. Thus, these circumstances did not justify the dismissal of the ejectment case.
Main Doctrine
Ejectment suits are concerned solely with physical possession and are not abated by the pendency of an action for annulment of sale or reconveyance. The right of first refusal under PD 1517 requires the land to be located within both an Urban Land Reform Zone (ULRZ) and an Area for Priority Development (APD), as delimited by subsequent proclamations. An ordinance expressing intent to expropriate does not bar an ejectment suit.