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365 Phil. 194


[ G.R. No. 123479, April 14, 1999 ]




Ejectment suits settle only the issue of physical possession. They are not barred by the pendency of an action for the annulment of the sale and for the reconveyance of the disputed land. Furthermore, for the exercise of the right of first refusal granted by PD 1517, Proclamation No. 1967 requires the tenant to show that the disputed land is located within both an "urban land reform zone" and an "area of priority development." Finally, an ordinance of the City of Manila expressing an intent to expropriate the subject land will not by itself abate an illegal detainer suit.

The Case

Before us is a Petition for Review on Certiorari seeking the reversal of the December 20, 1995[1] Decision and January 23, 1996[2] Resolution of the Court of Appeals[3] in CA-GR SP No. 33777. The CA set aside the Decision[4] of the Regional Trial Court (RTC) of Manila in Civil Case No. 93-64768, affirming that of the Metropolitan Trial Court, which granted the Complaint of petitioner and ordered the ejectment of herein private respondent.

The Facts

The respondent court narrated the factual antecedents of this case as follows:[5]
"The record shows that [Private Respondent Manlutac] who has built a residential house [o]n a 135-square meter portion of the land at 1588-B Rivera St., Tondo, Manila, is among the numerous tenants/lessees of the Quijano estate with a land area of 6,000 square meters, more or less, situated at Tondo, Manila for a period of more than 40 years now. On April 7, 1986, the original owners of the subject estate and at the same time the lessors of [private respondent], Sps. Juan and Ceferina Quijano sold thru a Deed of Absolute Sale, the realty in favor of petitioner for Thirty Million Pesos without giving the [private respondent] and the other tenants the chance to exercise their preemptive rights as accorded to them by PD No. 1517, subject lots being declared as urbanized lands.

"Later on, in a letter dated June 24, 1989, after the sale to Solanda Enterprises, Inc. was consummated, Ceferina Quijano made an offer to the [private respondent] and the other tenants for the sale of the subject estate to them. On November 25, 1989, the tenants including [private respondent], thru a letter addressed to Ceferina Quijano, signified their acceptance of the proposed sale and concurrence [in] the selling price [of] P2,000.00 per square meter.

"Under date of June 25, 1991, Mrs. Quijano sent a letter to [private respondent] informing him that Solanda Enterprises [was] already the owner of the subject property and that the payment of monthly rental should thence be made to Solanda Enterprises starting July 1, 1991.

"On July 2, 1991, Solanda Enterprises registered the land in its name under TCT No. 1988580 of the Register of Deeds of Manila.

"On August 30, 1991, the tenants discovered the sale of the leased lots to Solanda Enterprises upon verification with the Office of the Register of Deeds of Manila.

"On September 13, 1991, the tenants including [private respondent] filed with the RTC a complaint against Solanda Enterprises and Ceferina Quijano for annulment of sale, reconveyance and damages. This was assigned to RTC Branch 41 and docketed as Civil Case No. 91-58568."[6]
The result of Civil Case No. 91-58568 was duly noted by the Court of Appeals in these words:
"[O]n April 19, 1994, RTC Branch 41 rendered a decision in Civil Case No. 91-58568 annulling the deed of sale dated April 7, 1986 executed by Ceferina Quijano in favor of Solanda Enterprises, canceling TCT no. 198580 issued on July 2, 1991 and directing the parties to comply with the provisions of Sec. 6 and 9 of PD 1517."[7]
Meanwhile, the course of the succeeding litigation in the present case was narrated by the respondent court thus:[8]
"On November 6, 1992, [herein petitioner] Solanda Enterprises, Inc., (Solanda, for brevity) filed with the Metropolitan Trial Court of Manila a complaint for ejectment against Luis Manlutac (Manlutac, for brevity) on the ground that the oral contract of lease on a parcel of land located at 1588-B Rivera St., Tondo, Manila, on a month to month basis ha[d] expired and that during the period from July to September 1992, Manlutac incurred rental arrearages amounting to P1,368.00.

"On November 23, 1992, [a] summons for summary procedure was received for Manlutac by a certain Emerita Padilla at the given address.

"On January 19, 1993, [private respondent] filed a motion to admit answer averring therein that the person who received the legal processes [was] only a high school graduated and [did] not know the legal implications of the same, and besides, she was of the impression that since the impleaded defendant [was] already deceased, the same [was] no longer important. She only had the opportunity to deliver it to Luis Manlutac's daughter in Bataan on December 23, 1992. Attached to the motion [was] the answer with special affirmative defenses with counterclaim.

"On January 21, 1993, the MTC rendered a summary judgment in favor of [petitioner]. The dispositive portion reads:
`ACCORDINGLY, judgment is hereby rendered in favor of the [petitioner] and against the [private respondent], ordering the latter and all persons claiming right and title under him to vacate the premises located at No. 1588-B A. Rivera St., Tondo, Manila and to surrender peaceful possession thereof to [petitioner]; to pay [petitioner] the sum of P1,368.00 representing rental arrearages from July, 1992 to September, 1992; to pay [petitioner] the sum of P1,500.00 a month effective November, 1992 for the use of and occupancy of the premises, until the same shall have been fully vacated; to pay the sum of P2,000.00 as and for attorney's fees; and to pay the costs of suit.
`x x x x x x x x x.'

"On February 11, 1993, [private respondent] filed with the MTC a Notice of Appeal with Supersedeas Cash Bond.

"On August 25, 1993, the Regional Trial Court rendered the assailed decision. We quote the dispositive portion, as follows:
`WHEREFORE, premises considered, the Court AFFIRMS en toto the judgment dated January 21, 1993 of the MTC of Manila Branch 26.
x x x x x x x x x.'

"On September 23, 1993, [private respondent] filed a motion for reconsideration.

"On March 25, 1994, the Regional Trial Court denied the motion for reconsideration.
x x x x x x x x x"

On appeal, the Court of Appeals (CA)[9] initially denied, in its Resolution of April 18, 1994, private respondent's motion for extension to file his petition for review.[10] The CA likewise denied reconsideration in its Resolution of January 23, 1994.[11] However, upon private respondent's petition, this Court, in its Resolution of January 11, 1995, reversed the appellate court.[12]

Thereafter, the Court of Appeals rendered its assailed Decision of December 20, 1995, which disposed as follows:[13]
"WHEREFORE, the instant petition is hereby GRANTED, the decision appealed from REVERSED and SET ASIDE and the complaint in Civil Case No. 140445 dismissed."
The CA denied reconsideration in its Resolution of January 23, 1996.[14]

Hence, this petition.[15]

Ruling of the Respondent Court

The Court of Appeals held that private respondent's failure to file his answer on time was excusable. It opined that the strict and rigid application of the rules of procedure, which tends to frustrate rather than to promote substantial justice, should be avoided. It further ruled that, for more than ten years, private respondent had been a legitimate tenant of a parcel of land "which is within the Urban Zone." Hence, he had the right of first refusal to purchase the same at a reasonable price and within a reasonable time.

Moreover, upholding the lower court Decision would have rendered nugatory all the private respondent's reliefs and rights arising from Civil Case No. 91-58568, in which the RTC annulled the sale of the land to petitioner. (This RTC ruling, however, is still on appeal.)

The Issues

In its memorandum,[16] petitioner raises the following issues:
"1. Does the CA have jurisdiction to review and reverse the appealed RTC decision which has become final?

"2.On the assumption that to disregard technicality in order "xxx to promote substantial justice xxx", [the] CA may review the said decision, does the mere fact that Manlutac was a tenant on the land in issue for more than 10 years entitle him to the statutory right of first refusal under P.D. 1517 absent an allegation, much [less] a finding that the land is included in an Area of Priority Development (APD) and Urban Land Reform Zone as required in Proclamation No. 1967?"[17]
More simply stated, petitioner's contention is that the respondent court committed reversible errors (1) in reviewing and reversing a Decision which had already become final and executory, and (2) in applying PD 1517 when the land in dispute was not located within an area for priority development (APD) and an urban land reform zone (ULRZ).

The Court's Ruling

Petitioner's contention on the second issue is meritorious. Private respondent has no right of first refusal under PD 1517, because the disputed parcel of land is not within an APD and a ULRZ.

First Issue

Timeliness of Appeal

Petitioner alleges that the respondent court disregarded the rules of procedure when it reversed the RTC Decision which, according to its own July 22, 1994 Resolution, had already become final and executory. Said Resolution states:[18]
"For the reason that the motion for exten[s]ion of time failed to indicate that said motion was filed on time, the motion was denied per Our Resolution of April 18, 1994. Subsequent to [it], [private respondent] Luis Manlutac filed a motion for reconsideration followed by his petition for review. From the motion for reconsideration and the petition for review can be gathered that xxx said petition was precisely filed out of time. The Decision of the court below was received by the counsel for [private respondent] on September 8, 1993. On September 23, 1993 which [was] the 15th day from September 8 [private respondent] filed a motion for reconsideration. The Order below dated March 25, 1994 which denied private respondent's motion for reconsideration was received by private respondent's counsel on April 8, 1994[;] and it was only on April 11, 1994 that the motion for extension of time to file [a] petition for review [w]as filed [--] when the decision sought to be reviewed had already become final."
Petitioner's contention, however, has already been rejected by this Court in its Resolution of January 11, 1995, worded as follows:[19]
"The final judgement or order of a Regional Trial Court in an appeal from the final judgment or order of a Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit Trial Court may be appealed to the Court of Appeals through a petition for review. The period for filing a petition for review is fifteen (15) days. If a motion for reconsideration is filed with and denied by the Regional Trial Court, the movant has only the remaining period within which to file a petition for review. It may therefore be necessary to file a motion with the Court of Appeals for an extension of time to file such petition for review. The motion for extension of time must, however, be filed and the corresponding docket fee paid within the supplementary period of appeal (Lacsamana, et al. v. The Hon. Second Special Cases Division of the IAC, et al. 143 SCRA 643 [1986]).

"In instances when a motion for reconsideration of the decision of the Regional Trial Court is filed on the last day of the reglementary period to appeal, Section 3 of Rule 41 of the Revised Rules of Court provides the applicable rule:
`Section 3. How appeal is taken. - x x x.

`But where such a motion has been filed during office hours of the last day of the period herein provided, the appeal must be perfected within the day following that [o]n which the party appealing received notice of the denial of said motion.' (Underscoring supplied)
"In the case at bar, [Private Respondent] Manlutac filed his motion for reconsideration with the Regional Trial Court on the last day of the reglementary period to file a petition for review. Following Section 3 of the Rule 41 of the Revised Rules of Court, upon receipt of the Regional Trial Court's order of denial of the motion for reconsideration on 8 April 1994. [Private Respondent] Manlutac had only up to the next day, 9 April 1994, to file a petition. The 9th and 10th of April 1994, however, were xxx legal holiday[s] (Araw ng Kagitingan) and a Sunday respectively. Hence, [Private Respondent] Manlutac had up to the 11th of April 1994 or the immediately succeeding business day to file with the Court of Appeals a petition for review or a motion for extension of time. That a motion for extension of time to file a petition for review was filed on 11 April 1994 is borne out by the records. (Annex "I" of the Petition, Rollo, p. 51) The motion for extension of time was thus seasonably filed."
From the foregoing, it is clear that the RTC Decision was appealed within the reglementary period. The Court finds no reason to belabor the matter any further.

Second Issue

Preemptive Right Under PD 1517

Claiming that the disputed land has not been declared to be within an APD, petitioner contends that the respondent court erred in granting the right of first refusal to private respondent and in applying Mataas na Lupa Tenants Association, Inc. v. Dimayuga.[20]

We agree. A close reading of Proclamation No. 1967 reveals that, before a preemptive right can be exercised, the disputed land should be situated in an area declared to be both an APD and a ULRZ.

An urban tenant's right of first refusal is set forth in Section 6, PD 1517, as follows:
"SECTION 6 Land Tenancy in Urban Land Reform Areas. Within the Urban Zones[,] legitimate tenants who have resided on the land for ten years or more[,] who have built their homes on the land[,] and residents who have legally occupied the lands by contract, continuously for the last ten years shall not be dispossessed of the land and shall be allowed the right of first refusal to purchase the same within a reasonable time and at reasonable prices, under terms and conditions to be determined by the Urban Zone Expropriation and Land Management Committee created by Section 8 of this Decree."
Proclamation No. 1967 further delimited the areas or zones where in this preemptive right could be availed of, viz.:
"WHEREAS, Proclamation No. 1893 was issued on 11 September 1979, pursuant to Section 4 of P.D. No. 1517, declaring the entire Metropolitan Manila area as Urban Land Reform Zone;

"WHEREAS, it is now necessary and appropriate to identify specific sites covered by urban land reform in Metropolitan Manila, for purposes of making specific the applicability of P.D. Nos. 1517, 1640 and 1642 and of LOI No. 935.

"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution and existing laws, and in relation to Proclamation No. 1893 declaring the entire Metropolitan Manila area as an Urban Land Reform Zone, and LOI 935, hereby amend Proclamation No. 1893 by declaring 244 sites in Metropolitan Manila as Areas for Priority Development and Urban Land Reform Zones as described in the attached annex.

"The provisions of P.D. Nos. 1517, 1640 and 1642 and of LOI No. 935 shall apply only to the above[-]mentioned Areas of Priority Development and Urban Land Reform Zones.
"x x x x x x x x x."

The aforecited whereas clauses express a clear intent to limit the operation of PD 1517 to specific areas declared to be located in both an APD and a ULRZ. The conjunctive and in the last sentence of the quoted provision confirms this intention. And in statutory construction implies conjunction, joinder or union.[21] As understood from the common and usual meaning of the conjunction and, the provisions of PD 1517 apply only to areas declared to be located within both an APD and a ULRZ.

In this light, Mataas na Lupa,[22] which was cited by the Court of Appeals, is not applicable. Although the Court did not categorically rule that an urban tenant had the right of first refusal only when there was a declaration that the disputed land was within both an APD and a ULRZ, the fact remains that there was such a conjunction in the said case.

Moreover, private respondent did not contest petitioner's allegation that the land was located outside the APDs specified in Proclamation No. 1967. The annex of this Proclamation lists the following APDs in Tondo, Manila, and the nearby areas:
"1. Bo. Magdaragat
An area bounded on the northeast by Estero de Vitas; Calle Velasquez on the east; Herbosa Street on the [s]outhwest and Juan Luna on the southeast.
"2. Del Pan, Matadero
An area bounded by C. M. Recto Ave., on the northeast; Del Pan Bridge on the southwest; Camba Street on the northeast and on the southeast by Muelle de Binondo, Del Pan and Lavezarez Streets.
"3. Juan Luna from
A triangular area bounded by Corcuera St., on the north; Juan Luna Street on the west; Estero dela Reina on the east and Solis on the south."
Corcuera to Pavia
And Estero de
La Reina
Notably, not included in the list is A. Rivera Street in Tondo, Manila, where the disputed parcel of land is located. The Court further notes a certification from the Housing and Land Use Regulatory Board (HLURB) that the said property, covered by TCT No. 198580, is outside any APD and ULRZ specified in Proclamation 1967 and the Locational Reference Handbook.[23]

Aside from his alleged preemptive right of first refusal, other bases for the claim of private respondent are: (1) Civil Case No. 91-58568, in which the RTC annulled the sale to petitioner of the disputed parcels of land belonging to the Quijano Estate, and (2) Manila City Ordinance 7806 dated September 20, 1993. We find no merit in these contentions.

First, Civil Case No. 91-58568 is on appeal and thus has no binding effect. Second, the consistent case law is that ejectment suits deal only with the issue of physical possession.[24] The pendency of an action for the annulment of the sale and the reconveyance of the disputed property may not be successfully pleaded in abatement of an action for ejectment.[25] Private respondent's alleged right of possession is condition on his right to acquire ownership over the land. His right of possession is, at best, only inchoate. In any event, the private respondent's expectation of being granted the preemptive right to purchase the property neither establishes his right to posses nor justifies the dismissal of the ejectment case against him.

Third, Ordinance No. 7806 of the City of Manila, "Authorizing the Honorable City Mayor to work for the Acquisition, Either by Negotiation or Expropriation, of a Parcel of Land xxx Owned by Juan O. Quijano xxx," expresses merely an intent to expropriate the land in dispute. Said ordinance does not show that the disputed land, when expropriated, will be awarded or sold to the private respondent. It does not demonstrate or touch upon private respondent's right of possession over the disputed land. It is, at best, speculative and not a bar to an action for ejectment.

Needless to stress, this Decision settles merely the issue of physical possession and not the question of ownership over the disputed property, which may be ruled upon at the proper time by the proper court in Civil Case No. 91-58568 and/or in such other cases where such ownership issue is squarely raised.

WHEREFORE, the petition is hereby GRANTED and the assailed Decision and Resolution are REVERSED and SET ASIDE. The Decision of the RTC of Manila dated August 25, 1993 is hereby REINSTATED. No costs.


Romero, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.

[1] Rollo, pp. 20-26.

[2] Rollo, p. 18.

[3] Both assailed orders were penned by Justice Antonio P. Solano and concurred in by Justices Emeterio C. Cui (Chairman) and Ricardo P. Galay (member).

[4] Penned by Judge Doroteo N. Caneba.

[5] CA Decision, pp. 4-5; Rollo, pp. 23-24. Petitioner adopted this narration in its Memorandum.

[6] The plaintiffs in Civil Case No. 91-58568 are as follows: Fraterna Sagmit, Atilano Sagmit, Zacarias Sagmit, Romeo Mendoza, Ernesto Mendoza, Godofredo Flores, Rodolfo Figueroa, Remedios Quiambao, Carlos Muñoz, Ramona Labao, Fermina Lopez, Rolando Torres, Teresita Canlas, Reynaldo Lumba, Honorio Deang, Jose Viray, Galicano Dizon, Francisco Tungol, Mauro Mendoza Jr., Manuel Banta, Felisa Ramos, Josefina Viray, Delia Alcaide, Pedro Morales, Francisco Suzara, Estifanio Guiao, Ricardo Flores, Amador Rodriguez, Yolanda Dela Torre, Flordeliza Sabile, Armando Reflan Sr. (CA Rollo, pp. 66-67).

[7] CA Decision, p. 6; Rollo, p. 25.

[8] Ibid., pp. 1-3; Rollo, pp. 19-22.

[9] Fourteenth Division composed of JJ. Cesar D. Francisco, ponente and chairman; Buenaventura J. Guerrero and Antonio P. Solano, members.

[10] Annex "A" to Petition; Rollo, p. 11.

[11] Annex "C"; Rollo, p. 16.

[12] CA Rollo, p. 141.

[13] CA Decision, p. 7; Rollo, p. 26.

[14] Annex "D"; Rollo, p. 18.

[15] This case was deemed submitted for decision on September 8, 1998, upon receipt by the Court of the Memorandum for the Private Respondent.

[16] Signed by Atty. Rafael T. Durian.

[17] Memorandum for Petitioner, p. 4; Rollo, p. 84.

[18] CA Resolution, pp. 1-2; Rollo, pp. 13-14.

[19] CA Rollo, pp. 132-133.

[20] 130 SCRA 40, 45, June 25, 1984.

[21] Webster's Third International Dictionary, p. 80; Words and Phrases, Vol. 3, permanent ed., p. 570; Rolando Suarez, Statutory Construction, 1993 ed., p. 128; Ruperto G. Martin, Statutory Construction, 6th ed., p. 88; Philippine Constitution Association, Inc., v. Mathay, 18 SCRA 300, 329-330, October 4, 1966, per the concurring opinion of Castro, J.

[22] Supra, at p. 45. The Court, through Justice Makasiar, held:
"Pursuant to the above decree and for purposes of making specific the applicability of the same and other subsequent laws on the matter, the President issued Proclamation No. 1967 dated May 14, 1980 declaring Metropolitan Manila Area as Urban Land Reform Zone. Thus, xxx Mataas na Lupa, the land in controversy (an area bounded on the northwest by Quirino Avenue, South Superhighway on the ease, San Andres Street on the south, and on the west by Anak Bayan Street) was declared as an area for priority development and Urban Land Reform Zone.

"The aforequoted provisions of P.D. 1517 and the declaration in he aforesaid proclamation are clear and leave no room for any interpretation. Evidently, petitioners' case falls squarely within the law. Under Section 6 of the decree, the 110 tenant-families have been vested with the right of first refusal to purchase the land in question within a reasonable time and at reasonable prices, subject to Ministry of Human Settlements rules and regulations."
[23] Memorandum, pp. 7-8, Rollo, pp. 87-88; Exhibit "A," Rollo, p. 91; Exhibit "A-1," Location Map, Rollo, p. 82.

[24] Go v. Court of Appeals, GR No. 128954, October 8, 1998, p. 14; Cañiza v. Court of Appeals, 268 SCRA 640, 652-653 & 655, February 24, 1997; Gachon v. Devera Jr., 274 SCRA 540, 552, June 20, 1997; Del Mundo v. Court of Appeals, 252 SCRA 432, 442, January 29, 1996; Dizon v. Court of Appeals, 264 SCRA 391, 394-395, November 19, 1996; Oblea v. Court of Appeals, 244 SCRA 101, 105, May 11, 1995; Del Rosario v. Court of Appeals, 241 SCRA 519, 525, February 21, 1995; University Physicians Services, Inc. v. Court of Appeals, 233 SCRA 86, 89, June 13, 1994; Somodio v. Court of Appeals, 235 SCRA 307, 311, August 15, 1994; Javier v. Veridiano II, 237 SCRA 565, 571-572, October 10, 1994; Wilmon Auto Supply Corporation v. Court of Appeals, 208 SCRA 108, 113, April 10, 1992; De Luna v. Court of Appeals, 212 SCRA 276, 278-279, August 6, 1992; Drilon v. Gaurana, 149 SCRA 342, 348, April 30, 1987; De la Cruz v. Court of Appeals, 133 SCRA 520, 527, November 29, 1984; and Joven v. Court of Appeals, 212 SCRA 700, 710, August 20, 1992.

[25] Wilmon Auto Supply Corp. v. C.A., ibid., pp. 115-116; Drilon v. Gaurana, supra; Javelosa v. Court of Appeals, 265 SCRA 493, 503, December 10, 1996; Asset Privatization Trust v. Court of Appeals, 229 SCRA 627, 633, February 3, 1994; Ang Ping v. Regional Trial Court of Manila, 154 SCRA 77, 84-87, September 17, 1987; and De la Cruz v. C.A., supra.

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