FIDELA TAÑAG, NATIVIDAD PASCUAL, JOVITA PASCUAL, LOURDES PASCUAL AND TRINIDAD PASCUAL, PLAINTIFFS-APPELLANTS, VS. THE EXECUTIVE SECRETARY, THE CHAIRMAN OF THE LAND TENURE ADMINI…

Once again, this Court, in this appeal from a lower court
decision^[1]
is faced with the question of resolving conflicting claims as to who, between a
sublessee in actual possession of a lot forming part
of an estate acquired under Commonwealth Act No. 539^[2]
for the purpose of resale at reasonable prices to bona fide
tenants or occupants and the lessee thereof, is entitled to its purchase.  Alfonso Pascual, now
deceased, the sublessee and the
predecessor-in-interest of the present appellants before us^[3]
filed this complaint against defendant Gabriel de la Cruz, the lessee, for the
purpose of annulling the award of the then Executive Secretary, Natalio P. Castillo, to such defendant as the party
entitled to its purchase and of cancel­ling the deed
of sale thereafter executed by the defendant Land Tenure Administration in his
favor.  Plaintiff was unsuccessful, the
lower court notwithstanding the recognition of his status as sublessee and occupant sustaining the right of defendant
Gabriel de la Cruz, the lessee, to acquire the disputed lot.  It would thus clearly appear that such a
decision runs counter to the controlling doctrine explicitly reaffirmed in the
recent case of Gongon v. Court of Appeals^[4]
where in a sale under circumstances similar to that found in the present
litigation the right of the sublessee as the actual bona
fide occupant to its acqui­sition was accorded respect and
deference.  The appealed decision thus
cannot stand.  We have to reverse.

As set forth in fuller detail in the appealed decision:  “The findings of the respondent
Executive Secretary show that Gabriel de la Cruz bought from one Petra Gloria
the leasehold rights over Lots Nos. 25, 26, 50 and 51 of the Hacienda de Longos in February 1936. 
After the estate was purchased by the Government in 1947 and
subsequently subdivided for resale, these lots with a total area of 593 square
meters were denominated as Lots Nos. 10, 11, 12 and 13, Block No. 4 of the Longos Estate.  Since
these lots were adjacent to each other, de la Cruz enclosed them with a fence
and filled them up with earth because at the time he purchased the leasehold
rights therein they were swampy, and in connection therewith spent around
P2,000.00.  Thereafter he constructed
three houses on Lots Nos. 10, 11 and 12, which houses were actually occupied by
his two married sons and his own family of ten children.  These lots had already been sold to him.  De la Cruz likewise desired to purchase Lot
No. 13, the lot in question, which is within his fence.”^[5]
It was further noted in the appealed decision that plaintiff’s status as sublessee of Lot No. 13 commenced in 1945.^[6]

Why the lower court decided the matter adversely to the sublessee was explained in the appealed decision thus:  “It is contended that the [lessee] is not
the bona fide tenant of the lot in question because he is not in actual
occupancy and possession thereof.  The
Executive Secretary however found that the records show that the appellant is
the registered lessee of the disputed lot from the previous owners of the Longos Estate.  He
also enclosed the entire area of 593 square meters with a fence and filled it
up with earth long before the appellee became the
sub-lessee thereof.  These improvements
introduced by the appellant on the entire area including the lot in question
are sufficient muniment of his possession
thereof.  It is true that the * * *
Alfonso Pascual is actually occupying a portion of
the lot in dispute, but his occupation thereof is that of a sub-lessee who held
the premises subject to the rights of the lessee, * * *.  The Executive Secretary states that any
person who holds the leasehold right over a property may also be called a tenant
even if the material possession is held by another.”^[7]

Hence, as was made mention of earlier, the decision now on appeal
finds no support in the prevailing doctrine that goes back to Marukot v. Jacinto,^[8] a
1955 decision.  To quote from the opinion
of the then Chief Justice Paras:  “As a matter of fact, there is no
dispute that appellant Jacinto was the lessee of the entire Lot No. 35, who had
paid rentals thereon prior to the acquisition by the Government of the Tambobong Estate; that since 1931, he has lived in his
house built on his lot located in Caloocan, Rizal; that the three appellees
Gabriel Marukot, Felipe Baisa
and Lorenzo Baltazar have respectively occupied lots
35-B, 35-D and 35-E, the first since 1940, the second since 1946, and the third
since 1944, and all the three have their own houses thereon and have been
paying rentals as sublessees of appellant
Jacinto.”^[9]
After which, came this portion:  “In
our opinion, the trial court did not err in giving judgment in favor of the appellees.  It is not
necessary to decide herein whether a ‘tenant’ should enjoy priority over an
‘occupant’ who is a sublessee, because the effect of
the appealed decision is to accommodate both; and this certainly cannot be said
to be violative of the intents and purposes of
Commonwealth Act No. 539.  It is striking
to note that appellant Jacinto even gets about 300 square meters, or 100 square
meters in excess of the total area of the three lots awarded by the trial court
to the three appellees.”^[10]
Then came this affirmation as to who are bona fide occupants
entitled to preference under the Act: 
“The appellees are unquestionably bona
fide occupants within the meaning of Commonwealth Act No. 539 be­cause
they have their respective houses on the lots sublet to them by the tenant Amado Jacinto; and there is absolutely no showing that they
were ordered to vacate either before or after the acqui­sition by the
Government of the Tambobong Estate.”^[11]

That such a doctrine reflects with fidelity the public policy
that lies behind the enactment of this legislation is clearly set forth in our
1970 decision in Gongon v. Court of Appeals.^[12]
Thus:  “In the case at bar it is not
disputed that respondent spouses have their house on another lot (lot No. 34,
block No. 7) in the Tambobong Estate.  Furthermore, respondent Rufino
Rivera is the registered bona fide tenant of still another lot,
also in Tambobong, with an area of 2,761 square
meters, which is considerably bigger than the lot in question, where petitioner
and his family constructed their residence and where they have been living
since 1934.  It cannot be said,
therefore, that the parties herein stand on an equal footing or under equal
circumstances.  Justice and equity
command that petitioner be given the preferential right to purchase in order to
carry out the avowed policy of the law to give land to the landless.”^[13]

A reversal of the appealed decision is thus indicated.  If the claim of a sublessee
actually in possession would be ignored or disregarded, the result would be to
heighten social tension and aggravate further the unrest that has its roots in
so many of our countrymen being denied the opportunity of owning even a small
piece of land on which their houses are built and wherein they reside.  It has been the constant policy of this Court
in the con­struction of laws that find its origin in the social justice mandate
of the Constitution to assure that its beneficient
effects be enjoyed by those “who have less in life.” Where, as in
this case, the lessee has already acquired three of the lots forming part of the
original lease, the sublessee being only awarded
another portion thereof where he has his small dwelling, justice and equity,
not to mention the prescription of the law itself, to quote anew from Justice Makalintal, “command that [the latter] be given the
preferential right to purchase in order to carry out the avowed policy of the
law to give land to the landless.”^[14]

WHEREFORE, the decision of June 26, 1964 of the Court of
First Instance of Rizal is reversed and another
entered setting aside the award of defendant Executive Secretary of October 20,
1960, in favor of defendant Gabriel de la Cruz, the right to purchase Lot No.
13, Block No. 4 of Longos Estate appertaining to
appellants, the successors-in-interest of the original plaintiff and sublessee, the deceased Alfonso Pascual.  The deed of sale executed by defendant
Chairman of the Land Tenure Administration in favor of defendant Gabriel de la
Cruz dated December 12, 1960 covering such lot as well as the corresponding
Transfer Certificate of Title No. 81631 issued for said lot are hereby
cancelled and set aside and in lieu thereof another deed of sale should be
executed by the Land Reform Authority, the successor of defendant Land Tenure
Administration upon the payment of the purchase price so that the corresponding
certificate of title covering such lot may be issued in favor of
appellants.  With costs
against defendant Gabriel de la Cruz.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Teehankee, Barredo, Villamor, and Makasiar, JJ., concur.

^[1]
From the decision of the late Judge Guillermo E. Torres of the Court of First
Instance of Rizal, promulgated on June 26, 1964, an
appeal was taken to the Court of Appeals which however, in a resolution of
January 29, 1969, certified the case to us as the question to be determined is
one of law, the judgment having been rendered on the pleadings submitted by the
parties.

^[2]
Section 1 of Commonwealth Act No. 539 (1940) reads as follows:  “The President of the Philippines is
authorized to acquire private lands or any interest therein, through purchase
or expropriation, and to subdivide the same into home lots or small farms for
resale at reasonable prices and under such conditions as he may fix to their bona
fide tenants or occupants or to private individuals who will work the
lands themselves and who are qualified to acquire and own lands in the
Philippines.”

^[3]
The appellants before this Court are:  Fidela Tañag, Natividad
Pascual, Jovita Pascual, Lourdes Pascual and
Trinidad Pascual, the first-named being the widow and
the rest the children of the sublessee Alfonso Pascual.

^[4] L-24421, April 30, 1970, 32 SCRA 412.

^[5]
Decision, Record on Appeal, pp. 22-23.

^[6] Ibid, p. 23.

^[7] Ibid.

^[8] 98 Phil. 128.

^[9] Ibid, p. 131.

^[10] Ibid,
pp. 131-132.

^[11] Ibid, p. 132.

^[12] L-24421, April 30, 1970, 32 SCRA 412.
 Cf. Cruz v. Franco, L-27651, Oct. 30, 1970, 35 SCRA 601.

^[13] Ibid,
pp. 417-418.

^[14] Ibid, p. 418.