THIRTEENTH DIVISION
[CA-G.R. CV No. 53701. January 31, 2001.]
ANTONIO BOBADILLA, represented herein by LUZ BOBADILLA, plaintiffs-appellants, vs. VIRGINIA RAYO and JAIME S. CASTILLO, defendants-appellees.
D E C I S I O N
REYES, R. T., J p:
THE principal question in this appeal 1 is whether or not a lessee of an urban land is entitled to the right of preemption in case of sale of the property. The Regional Trial Court ruled in the negative. 2 Plaintiff-appellant prays for a reversal.
The Facts
The property subject of the complaint is a parcel of land consisting of three hundred forty eight (348) square meters located at Lakas ng Mahihirap Street, Caloocan City. This lot was previously covered by Transfer Certificate of Title No. 40434. It is now registered in the name of defendant-appellee Jaime Castillo under TCT NO. 202687.
Plaintiff-appellant Antonio Bobadilla has been leasing a portion (140 square meters) of the property for more than twenty-two years from Sinforos Rayo, the late husband of defendant-appellee Virginia Rayo. It was offered to him for sale by defendant-appellee Rayo at P3,000.00 per square meter. He wanted to buy the same at P2,000.00 per square meter. His counter offer was rejected by defendant-appellee Rayo without first determining the value of the property.
Plaintiff-appellant's counter offer was specifically to buy the property within two months from September 9, 1992 or not later than November 9, 1992. ("Exh. "A"). Without further notice to him defendant-appellee Rayo sold the property to co-defendant-appellee Castillo for four hundred fifty thousand pesos (P450,000.00) on November 2, 1992. (Exh "B")
Plaintiff-appellant then filed a notice of preemption before the Register of Deeds on November 13, 1992. Sometime in March, 1993, he received a letter from defendant-appellee Castillo offering to lease the property to him at P10.00 per square meter for one year. (Exh "D"). Plaintiff-appellant reiterated his counter-offer to exercise his right of redemption, this time over the 140 square meter portion he was occupying.
In defense, defendants-appellees, maintain that plaintiff-appellant's offer to purchase the property within a period of two months was made after the lapse of reasonable time to exercise his right of preemption; that the offer to purchase only a portion of the property is impractical and prejudicial to their interest.
RTC Disposition
On May 24, 1996, after trial, the Court a quo rendered its decision of dismissal with the following disposition:
"WHEREFORE, judgment is hereby rendered DISMISSING the instant case for lack of cause of action.
The defendants Virginia Rayo and Jaime C. Castillo are entitled to P10,000.00 attorney's fees considering that they were constrained to hire the services of counsels because of plaintiff's institution of the instant case. However, all other counterclaims are hereby dismissed considering that the amounts being claimed are speculative." 3
The Issues
Plaintiff-appellant has interposed this appeal with a three-fold assignment of errors, to wit:
I
THE HONORABLE REGIONAL TRIAL COURT COMMITTED AN ERROR IN DENYING APPELLANTS THE EXERCISE OF THE RIGHT OF PRE-EMPTION DESPITE EVIDENCE THAT APPELLEES HAS CONSPIRED TO DENY HIM THE RIGHT AS PROVIDED UNDER P.D. 1517 AFTER HE WAS MADE TO BELIEVE TO HAVE BEEN EXTENDED SAID RIGHT.
THE HONORABLE REGIONAL TRIAL COURT COMMITTED AN ERROR IN DECLARING THAT APPELLEE JAIME CASTILLO WAS NOT A BUYER IN BAD FAITH DESPITE THE FACT THAT HE HAS KNOWLEDGE OF THE ON-GOING NEGOTIATION BETWEEN APPELLANT AND APPELLEE VIRGINIA RAYO AND SAID RIGHT HAD NOT EXPIRED.
THE HONORABLE REGIONAL TRIAL COURT ERRED IN FINDING THAT APPELLANT IS NOT ENTITLED TO THE RIGHT OF REDEMPTION DESPITE THE FACT THAT PREPONDERANCE OF EVIDENCE EXISTS THAT WOULD INDICATE THAT APPELLEES CONSPIRED WITH EACH OTHER TO DEPRIVE APPELLANT THE RIGHT OF PREEMPTION. 4
Our Ruling
The appeal lacks merit.
Plaintiff-Appellant Is Not Entitled To The Right Of Preemption Under 1517
Plaintiff-appellant invokes Section 6 of P.D. 1517, otherwise known as the Urban Land Reform Law. The said provision states:
"Sec. 6. Land Tenancy in Urban Land Reform Area-Within the Urban Zones. — Legitimate tenants who have resided in the land for ten (10) years or more, who have built their homes on the land, and residents who have legally occupied the land 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 within a reasonable time and at reasonable prices and under the terms and conditions to be determined by the Urban Zone Expropriation and Land Management Committee created by Section 8 of this Decree.
In order to avail of the right under the foregoing provision, the law further requires that the area must be within the area declared as Area for Priority Development (APD). Thus, P.D. 1517, as amended by Proclamation No. 1893, declared the Entire Metropolitan Manila Areas as an Urban Land Reform. Proclamation No. 1893 was further amended by Proclamation No. 1967, specifying the 244 sites in Metropolitan Manila as Areas for Priority Development and Urban Land Reform Zone. The eleven proclaimed areas in Caloocan City are:
1. Bagong Barrio
2. Bagong Silang
3. Cammarin 11
4. Isla San Juan
5. Barrio Rodriguez
6. 5th and 7th Avenues
7. Panaca-Huling Sigaw
8. Panaca-A. Mabini, Gen. San Miguel, Julian Felipe
9. Calaanan, West District
10. Libis-Espina, Balong Bato
11. Marulas District
Lakas ng Mahihirap street, where the property in controversy is located, is outside the Urban Land Reform Zone declared pursuant to P.D. 1517. Consequently, plaintiff-appellant cannot claim any legal right of preemption under the Decree. 5
Plaintiff-Appellant Was Given Opportunity To Exercise A Right Of First Refusal But He Failed To Do So On Time
There is no law outside the Urban Land Reform Zone or (P.D. 1517) that grants a lessee the right to repurchase the leased property, no matter how long the period of the lease has been. If such right existed at all, it could only have been created by contract. 6
Plaintiff-appellant claim that the offer to sell made by defendant-appellee Rayo to him has not yet expired. This does not find support in the evidence he presented. On the contrary, Exhibit "3" for defendant-appellee Castillo shows that as early as April 19, 1991, plaintiff-appellant was given 10 days within which to decide on the offer. The letter of defendant-appellee's lawyer further states that should they fail to receive any word from plaintiff-appellant, they would take it to mean that appellant was no longer interested in buying the property. It would also give defendant-appellee Rayo the right to offer the property to other persons.
Plaintiff-appellant's daughter Luz Bobadilla confirmed that after she received the April 19, 1991 letter, she merely called the office of Atty. De Veyra but was informed that he was not there. She did not communicate in writing with Atty. De Veyra. 7 Luz Bobadilla further confirmed that two months after she received the letter dated Sept. 8, 1992, defendant-appellant Rayo demanded that she vacates the property. 8
The letter of plaintiff-appellant to defendant-appellee Rayo, dated September 15, 1992, 9 manifesting his intention to purchase the property within two months was made long after there was a demand to vacate and after appellant failed to exercise whatever right of first refusal he had. The letter was a last-minute effort on the part of plaintiff-appellant to revive a right which was already lost. There was, therefore, no legal obstacle on the part of defendant-appellee Rayo to offer and sell the property to anyone after the negotiation between plaintiff-appellant and Rayo did not materialize.
The question of whether defendant-appellee Castillo is a buyer in bad faith has become irrelevant, considering that he bought the property after plaintiff-appellant failed to exercise his alleged right of first refusal.
WHEREFORE, the judgment appealed from is AFFIRMED en toto.
SO ORDERED.
Velasco, Jr. and Enriquez, Jr., JJ., concur.
Footnotes
1. From a Decision penned by Judge Modesto C. Juanson, Regional Trial Court, Branch 122, Kalookan City; Original Record (OR), pp. 165-169.
2. In an action for annulment of deed of sale docketed as Civil Case No. C-15888, pp. 1-5.
3. OR, p. 169.
4. Rollo, pp. 18-19.
5. Malabanan vs. Gaw Ching, 181 SCRA 84 (1990).
6. Lopez vs. De la Cruz, et. al., 94 Phil. 517 cited in Malabanan vs. Gaw Ching, 181 SCRA 84 (1990).
7. TSN April 11, 1994, p. 18.
8. Ibid, p. 19.
9. Exh. "A."