Garrido v. Court of Appeals
REITERATIONFacts
The Antecedents: Spouses Maria Abaquita and Juan Jimenez owned a parcel of land in Makati City. During their lifetime, respondents Lolita Sanchez, Erlinda Aquino, Emilia Marqueda, and Santiago Espeno Jr. (among others) were tenants on a portion of this land, occupying it with their houses and paying monthly rentals. After the death of the original owners, their daughter Regina Jimenez disputed ownership with her granddaughter, Natividad Evangelista. Subsequently, Regina Jimenez sold Lot No. 12-A, the portion where the respondents' houses were located, to petitioners Leopoldo and Luz Garrido. The petitioners then demanded that the respondents vacate the premises. Procedural History: The respondent lessees filed a complaint against the petitioners seeking the annulment of the sale and cancellation of the title issued to the Garrido spouses, along with a preliminary injunction. The petitioners counterclaimed for damages. The Regional Trial Court of Makati City, Branch 60, ruled in favor of the petitioners, dismissing the lessees' complaint and their counterclaim. The respondent lessees appealed this decision to the Court of Appeals. The appellate court modified the trial court's decision, affirming the dismissal for Santiago Espeno Jr. but reversing it for Lolita Sanchez, Erlinda Aquino, and Emilia Marqueda. The Court of Appeals directed that these respondents be allowed to purchase the areas they leased, subject to terms determined by the Urban Zone Expropriation and Land Management Committee, and partially annulled the deed of sale and title. The Petition: The petitioners, Spouses Leopoldo and Luz Garrido, seek review of the Court of Appeals' decision, arguing that it erred in holding that the questioned lot (Lot 12-A) is within an Area for Priority Development (APD) and that the respondents are entitled to the right of first refusal under Presidential Decree No. 1517. They also contend that the appellate court erred in partially annulling the deed of sale and title. The petition raises questions of law concerning the application of the Urban Land Reform Law and the determination of whether the subject lot falls within a declared APD, a factual determination that the petitioners argue the Court of Appeals resolved incorrectly, contrary to the findings of the trial court.
Issue(s)
Whether the Court of Appeals erred in holding that Lot No. 12-A is within an Area for Priority Development (APD) per Proclamation No. 1967. Whether the Court of Appeals erred in holding that the respondents are entitled to the right of first refusal to purchase under Section 6 of P.D. 1517. Whether the Court of Appeals erred in holding that the respondents are entitled to the partial annulment of the Deed of Sale and TCT No. 133528.
Ruling
The Court reversed the decision of the Court of Appeals and reinstated the decision of the Regional Trial Court. The respondent lessees were found to have no right of first refusal to purchase Lot No. 12-A.
Ratio Decidendi
On the issue of Lot No. 12-A being within an Area for Priority Development (APD): The Supreme Court found that the Court of Appeals erred in concluding that Lot No. 12-A is located within Barangay Olimpia and covered by APD No. 8. The appellate court's reasoning that the lot's location along South Avenue automatically placed it within APD No. 8 was deemed erroneous. The evidence showed that Lot No. 12-A is situated at 2735 South Avenue, Makati City, which is within Barangay Sta. Cruz. The Court clarified that not all lots along South Avenue are within Barangay Olimpia. The Court agreed with the trial court's finding that the lot is not within any declared Area for Priority Development. On the entitlement to the right of first refusal under P.D. 1517: Based on the finding that Lot No. 12-A is not within an APD, the Supreme Court held that the respondent lessees are not entitled to the right of first refusal or pre-emption under Section 6 of Presidential Decree No. 1517. This right is specifically granted to legitimate tenants residing on land within declared Urban Zones and Areas for Priority Development. Since the subject lot does not fall under these classifications, the legal basis for the right of first refusal is absent. The Court emphasized that the factual determination of whether the lot is within an APD is crucial for the application of P.D. 1517. On the partial annulment of the Deed of Sale and TCT No. 133528: Consequently, the Supreme Court ruled that the Court of Appeals also erred in ordering the partial annulment of the Deed of Sale dated August 2, 1984, and TCT No. 133528. The annulment was predicated on the erroneous application of P.D. 1517 and the finding that the lot was within an APD. Since the lessees do not possess the right of first refusal, the sale between Regina Jimenez and the Garrido spouses, and the subsequent title issued to the latter, remain valid with respect to Lot No. 12-A. The Court reinstated the trial court's decision which dismissed the complaint for annulment.
Main Doctrine
The right of first refusal under Section 6 of P.D. 1517 applies only to legitimate tenants residing on land within declared Areas for Priority Development (APD). A lot located in Barangay Sta. Cruz, Makati City, which is not within any APD under Proclamation No. 1967, does not entitle lessees to the right of first refusal to purchase the property.