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Alcantara vs Rets Jr : 136996 : December 14, 2001 : J. Pardo : First Division

FIRSTDIVISION

[G.R.No.136996.December14,2001]

EDILBERTO ALCANTARA, FLORENCIO VILLARMIA, POLICARPIO

OBREGON,+RICARDO ROBLE, ESCOLASTICA ONDONG, ESTEBAN
RALLOS, HENRY SESBINO, SERGIO SESBINO, MANUEL
CENTENO,+
RENATO
CRUZ,
MARCELINO
CENEZA,
BUENAVENTURAONDONG,andBENJAMINHALASAN,petitioners,vs.
CORNELIOB.RETA,JR.respondent.
DECISION
PARDO,J.:

TheCase
In this petition for review,[1] petitioners seek to review the decision[2] of the Court of Appeals
affirming the decision[3] of the Regional Trial Court, Davao City, Branch 14, dismissing petitioners
complaintfortheexerciseoftherightoffirstrefusalunderPresidentialDecreeNo.1517,injunctionwith
preliminaryinjunction,attorneysfeesandnullityofamicablesettlement.
TheFacts
Edilberto Alcantara, Florencio Villarmia, Policarpio Obregon, Ricardo Roble, Escolastica Ondong,
Esteban Rallos, Henry Sesbino, Sergio Sesbino, Manuel Centeno, Renato Cruz, Marcelo Ceneza,
BuenaventuraOndongandBenjaminHalasan,filedwiththeRegionalTrialCourt,DavaoCity,Branch14,
a complaint[4] against Cornelio B. Reta, Jr. for the exercise of the right of right of first refusal under
PresidentialDecreeNo.1517,injunctionwithpreliminaryinjunction,attorneysfeesandnullityofamicable
settlement.
TheplaintiffsclaimedthattheyweretenantsorlesseesofthelandlocatedinBarangaySasa,Davao
City, covered by Transfer Certificate of Title No. T72594, owned by Reta that the land has been
convertedbyRetaintoacommercialcenterandthatRetaisthreateningtoejectthemfromtheland.They
assert that they have the right of first refusal to purchase the land in accordance with Section 3(g) of
PresidentialDecreeNo.1517sincetheyarelegitimatetenantsorlesseesthereof.
TheyalsoclaimedthattheamicablesettlementexecutedbetweenRetaandRicardoRoblewasvoidab
initioforbeingviolativeofPresidentialDecreeNo.1517.
On the other hand, Reta claimed that the land is beyond the ambit of Presidential Decree No. 1517
sinceithasnotbeenproclaimedasanUrbanLandReformZonethattheapplicablelawisBatasPambansa
Blg.25forfailureoftheplaintiffstopaytherentalsfortheuseofthelandandthattheamicablesettlement
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Alcantara vs Rets Jr : 136996 : December 14, 2001 : J. Pardo : First Division

betweenhimandRicardoRoblewastranslatedtothelatterandfullyexplainedinhisowndialect.
On March 8, 1994, the trial court rendered a decision dismissing the complaint and ordering the
plaintiffstopayRetacertainsumsrepresentingrentalsthathadremainedunpaid.[5]
OnApril6,1994,plaintiffsappealedthedecisiontotheCourtofAppeals.[6]
OnDecember9,1998,theCourtofAppealspromulgatedadecision[7]affirmingintotothedecisionof
thetrialcourt.
Hence,thisappeal.[8]
TheIssue
TheissueiswhetherpetitionershavetherightoffirstrefusalunderPresidentialDecreeNo.1517.
TheCourtsRuling
Thepetitioniswithoutmerit.
TheareainvolvedhasnotbeenproclaimedanUrbanLandReformZone(ULRZ).Infact,petitioners
filed a petition with the National Housing Authority requesting that the land they were occupying be
declared as an ULRZ. On May 27, 1986, the request was referred to Mr. Jose L. Atienza, General
Manager,NationalHousingAuthority,forappropriateaction.[9]Therequestwasfurtherreferredtoacting
mayorZafiroRespicio,DavaoCity,asper2nd IndorsementdatedJuly1,1986.[10]Clearly,therequestto
havethelandproclaimedasanULRZwouldnotbenecessaryifthepropertywasanULRZ.
PresidentialDecreeNo.1517,otherwiseknownasTheUrbanLandReformAct,pertainstoareas
proclaimedasUrbanLandReformZones.[11]Consequently,petitionerscannotclaimanyrightunderthe
saidlawsincethelandinvolvedisnotanULRZ.
Tobeabletoqualifyandavailoneselfoftherightsandprivilegesgrantedbythesaiddecree,onemust
be:(1)alegitimatetenantofthelandforten(10)yearsormore(2)musthavebuilthishomeonthelandby
contract and, (3) has resided continuously for the last ten (10) years. Obviously, those who do not fall
withinthesaidcategorycannotbeconsideredlegitimatetenantsand,therefore,notentitledtotherightof
firstrefusaltopurchasethepropertyshouldtheownerofthelanddecidetosellthesameatareasonable
pricewithinareasonabletime.[12]
RespondentRetadeniesthathehasleaseagreementswithpetitionersEdilbertoAlcantaraandRicardo
Roble.[13]EdilbertoAlcantara,ontheotherhand,failedtopresentproofofaleaseagreementotherthanhis
testimonyincourtthatheboughtthehousethatheisoccupyingfromhisfatherinlaw.[14]
RespondentRetaallowedpetitionerRicardoRobletousesixtytwo(62)coconuttreesforP186from
wherehegatheredtuba.Thisarrangementwouldshowthatitisausufructandnotalease.Usufructgivesa
righttoenjoythepropertyofanotherwiththeobligationofpreservingitsformandsubstance,unlessthe
titleconstitutingitorthelawotherwiseprovides.[15]
Petitioner Roble was allowed to construct his house on the land because it would facilitate his
gatheringoftuba.ThiswouldbeinthenatureofapersonaleasementunderArticle614oftheCivilCode.
[16]
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Alcantara vs Rets Jr : 136996 : December 14, 2001 : J. Pardo : First Division

Whether the amicable settlement[17] is valid or not, the conclusion would still be the same since the
agreementwasoneofusufructandnotoflease.Thus,petitionerRobleisnotalegitimatetenantasdefined
byPresidentialDecreeNo.1517.
As to the other petitioners, respondent Reta admitted that he had verbal agreements with them. This
notwithstanding,theyarestillnotthelegitimatetenantscontemplatedbyPresidentialDecreeNo.1517,who
canexercisetherightoffirstrefusal.
A contract has been defined as a meeting of the minds between two persons whereby one binds
himself,withrespecttotheother,togivesomethingortorendersomeservice.[18]
Clearly, from the moment respondent Reta demanded that the petitioners vacate the premises, the
verballeaseagreements,whichwereonamonthlybasissincerentalswerepaidmonthly,[19]ceasedtoexist
astherewasterminationofthelease.
Indeed,noneofthepetitionersisqualifiedtoexercisetherightoffirstrefusalunderP.D.No.1517.
Anotherfactorwhichmilitatesagainstpetitionersclaimisthefactthatthereisnointentiononthepart
of respondent Reta to sell the property. Hence, even if the petitioners had the right of first refusal, the
situationwhichwouldallowtheexerciseofthatright,thatis,thesaleorintendedsaleoftheland,hasnot
happened.P.D.No.1517applieswheretheownerofthepropertyintendstosellittoathirdparty.[20]
TheFallo
WHEREFORE,theCourtDENIESthepetition.TheCourtAFFIRMSthedecisionoftheCourtof
Appeals[21]andtheresolutiondenyingreconsiderationthereof.
Nocosts.
SOORDERED.
Davide,Jr.,C.J.,(Chairman),Kapunan,andYnaresSantiago,JJ.,concur.
Puno,J.,onofficialleave.
+Deceased.
+Deceased.
[1]UnderRule45oftheRevisedRulesofCourt.
[2] In CAG. R. CV No. 53624 promulgated on December 9 1998, Petition, Annex A, Rollo, pp. 2327, Artemio G.
Tuquero,J.,ponente,EubuloG.VerzolaandRenatoC.Dacudao,JJ.,concurring.
[3]In Civil Case No. 17,495 rendered on March 8, 1994, Decision, Original Record, Civil Case No. 17,495, pp. 234249,
JudgeWilliamM.Layague,presiding.
[4]DocketedasCivilCaseNo.17,495,Petition,AnnexB,Rollo,pp.2936.
[5]Decision,OriginalRecord,CivilCaseNo.17,495,pp.234249.
[6]NoticeofAppeal,OriginalRecord,CivilCaseNo.17,495,p.250.DocketedasCAG.R.CVNo.53624
[7]Petition,AnnexA,Rollo,pp.2327.
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Alcantara vs Rets Jr : 136996 : December 14, 2001 : J. Pardo : First Division

[8]Petition,Rollo,pp.1022.OnJune23,1999,weresolvedtogiveduecoursetothepetition(Rollo,pp.7980).
[9]ExhibitA4,OriginalRecord,CivilCaseNo.17,495,pp.100Eto100G.
[10]ExhibitsA1andA2,OriginalRecord,CivilCaseNo.17,495,pp.100Cto100D.
[11]SenPoEkMarketingCorporationv.Martinez,325SCRA210,224(2000).
[12]Carreonv.CourtofAppeals,353Phil.271,280(1998).
[13]CommentonthePetitionforReviewonCertiorari,Rollo,pp.5262,atp.53.
[14]T.S.N.,August27,1986,p.20.
[15]Art.562,CivilCodeofthePhilippines.
[16]ArturoM.Tolentino,CommentariesandJurisprudenceontheCivilCodeofthePhilippines,Volume2,1992ed.,p.
318.
[17]Complaint,AnnexA,OriginalRecord,CivilCaseNo.17,495,p.9.
[18]Art.1305,CivilCode.
[19]ThefirstpartofArt.1687,CivilCodeofthePhilippines,provides:Iftheperiodfortheleasehasnotbeenfixed,itis
understoodtobefromyeartoyear,iftherentagreeduponisannualfrommonthtomonth,ifitismonthly from week to
week,iftherentisweeklyandfromdaytoday,iftherentistobepaiddaily.[Emphasissupplied]
[20]Bermudezv.IntermediateAppellateCourt,227SCRA327,331(1986).
[21]InCAG.R.CVNo.53624.

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