MATIAS GONGON, PETITIONER, VS. COURT OF APPEALS, THE SPOUSES AMADA AQUINO, AND RUFINO RIVERA, THE OFFICE OF THE LAND TENURE ADMINISTRATION, AND THE OFFICE OF THE EXECUTIVE SECRE…

This is a petition for review of the decision of the Court of
Appeals which affirmed the dismissal by the Court of First Instance of Manila
of Matias Gongon’s
complaint to set aside the decision of the Land Tenure Administration – as
affirmed by the Office of the President m awarding Lot 18-B, Block 23 of the Tambobong Estate, to herein private respondent Amada Aquino, wife of her co-respondent Rufino
Rivera.  The decision appealed from
likewise ordered Gongon to turn over the possession
of the litigated lot to Amada Aquino, to pay the
rentals due at the rate of P6.00 a month from 1949 until such possession is
restored to her and to pay attorney’s fees in the amount of P1,000.00.

Lot 18-B, Block 23, with an area of 274
square meters, is a portion of the Tambobong Estate
in Malabon, Rizal, which
used to belong in its entirety to the Roman Catholic Church.  The lot was originally leased to Amada Aquino, who in turn sublet it in 1934 to Matias Gongon far a term of 15 years
at a nominal monthly rental of P6.00. 
The sub­-lessee constructed his residential house on the property and
since then has been living there, together with his family.

Meanwhile, the Tambobong Estate was
purchased by the Government from the Roman Catholic Church on December 31, 1947
under the provisions of Section 1 of Commonwealth Act No. 539, which authorized
the President of the Philip­pines “x x x to acquire private lands or any interest, 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.” In due time Matias Gongon filed an
application with the defunct Rural Progress Administration for the purchase of Lot 18-B, Block 23, claiming
preferential right as bona fide occupant.  The application was opposed by Amada Aquino, who also filed her own application, alleging that
as bona fide tenant or lessee she had the preferential right to
purchase the lot.  After investigation,
the Director of Lands – the Bureau of Lands having then taken over the
functions of the Rural Progress Administration – rendered a decision on May 31, 1955 approving Gongon’s application, he being the actual occupant.  On appeal to the Secretary of Agriculture and
Natural Resources, this official set aside the order of the Director of Lands
and gave due course to Amada Aquino’s application.

Matias Gongon
moved for reconsideration, but his motion was denied by the Land Tenure
Administration, which had meanwhile taken over the functions, powers and duties
of the Landed Estate Division of the Bureau of Lands upon the enactment of
Republic Act No. 1400.  Matias Gongon then appealed to
the Office of the President, which there­after affirmed the decision of the
Land Tenure Administra­tion. 
Accordingly, on February 24, 1961 the Land Tenure Administration
executed a deed of sale of Lot 18-B in favor of Amada Aquino,
as a result of which she obtained, on March 10, 1961, Transfer Certificate of
Title No. 84738 in her name.

On April 24, 1961 Matias Gongon filed the instant case in the Court of First
Instance of Manila to annul the decisions of the Land Tenure Administration and
of the office of the President; to cause the award of the lot in question to
him; to cancel its registration in the name of Amada Aquino
and to have it registered in his name instead. 
The complaint likewise contained a prayer for attorney’s fees and costs.

It is noteworthy that the Land Tenure Administration, in a
manifestation it filed in the lower court on May 27, 1961, made common cause with herein appellant Matias Gongon, stating (in part)
as follows:

“That at the time it issued the said Order, the LTA Board of
Adminis­trators was newly constituted and there­fore it has not had sufficient
time to study thoroughly the legality or wisdom of the Bureau of Lands policy
giving preference right to tenants to purchase the lots leased by them over and
above the actual occupants or sub­lessees thereof;
hence, it just affirmed the said decision of the Department of Agriculture and
Natural Resources as a matter of sound administrative policy;

That after a serious study of the issues of facts and of law in
cases identical to the case at bar, the LTA Board of Administrators found out
that it would be more in keeping with the spirit and intention of the laws (Com­monwealth
Acts Nos. 20 and 539 and Republic Act No. 1400) governing acquisition and
disposition of the landed estates (including the Tambobong
Estate) if it followed the doctrine laid down by the Supreme Court in the case
of Marukot, et al., v. Jacinto, et al., (G. R. Nos.
L-8036-38) promulgated on December 20, 1955, giving the actual occupants or sublessees the preference to purchase the lots occupied by
them as against tenants or lessees who do not occupy the same; hence answering
defendant subsequently reversed the policy followed by the Bureau of Lands and
adopted the doctrines laid down in the Marukot
case.”

As heretofore stated, the lower court dismissed the
complaint.  In due time the plaintiff
elevated the case to the Court of Appeals. 
In affirming the deci­sion appealed from the appellate court pointed out
(1) that the finding of the Secretary of Agriculture and Natural Resources, as
affirmed by the Office of the Pre­sident, to the effect that appellant Matias Gongon had waived whatever
right he might have had over the lot in question was factual in nature and
could not be reviewed by the courts; and (2) that appellant could not be con­sidered
as a bona fide occupant of the lot because his possession as sublessee was in effect possession by the lessee, citing
Article 524 of the Civil Code.

His motion for reconsideration having been denied by the Court of
Appeals, Matias Gongon
filed the present petition for review, contending that the appellate court
erred in failing to recognize his right as sublessee-tenant
to the lot in question and in not cancelling the sale
there­of to respondent Amada Aquino as well as its
registration in her name; in holding that he had waived his right to the lot in
question in favor of respondents-spouses Amada Aquino
and Rufino Rivera; and in ordering him to pay rentals
at the rate of P6.00 a month from 1949, plus attorney’s fees and costs.

The two issues posed in this appeal are (1) whether or not
petitioner has the preferential right to purchase the lot in question; and (2)
if he has, whether or not the alleged waiver of whatever right he might have
had over said lot is valid.

The first issue involves a conflict of claims between a lessee
and a sublessee insofar as the right to purchase the
property is concerned.  Several decisions
of this Court have been cited and discussed by the parties.  Parenthetically, it may be noted that in
those cases the con­cept of possession by a sublessee
under the Civil Code, which according to the Court of Appeals in its decision
under review was in effect possession by the lessee-sublessor,
was not considered by this Court applicable at all in construing the term
“occupant” under Commonwealth Act No. 539.

In Grande vs. Santos
(98 Phil. 62), the registered lessee sublet two portions of the lot to two
different per­sons.  In giving the right
of preference to the registered lessee this Court took into consideration a
number of cir­cumstances: that the lot was a small one of only 144 square
meters; that the lessee was himself an actual occupant of part thereof; and
that to subdivide said lot into three portions would, owing to the extremely
limited size of each, lead to frictions, conflicts, misunderstandings and
perhaps disturbances of the peace – consequences which Commonwealth Act No. 539
precisely sought to avert.

On the other hand, in Marukot et al.
vs. Jacinto, and Director of Lands (supra, 98 Phil. 128) this Court awarded to
the sublessees the portions of the lot they were
occupying, as against the claim of the lessee. 
This case differed from the Grande case not only in that the lot
involved had a bigger area – some 500 square meters but principally in the fact
that the lessee was not actually occupying the lot but had his residence on
another property altogether.  This Court
did not rule on whether a “tenant”, that is, a lessee, should enjoy
priority over an “occupant” who is a sublessee,
because after awarding the portions covered by the sublease to the actual
occupants, the registered lessee still got about 300 square meters, or 100
square meters more than the total area awarded to the sublessees.

In Santiago et al., vs. Cruz et al., (98 Phil. 168), the right of
preference was given to the registered tenant. 
In interpreting Section 1 of Commonwealth Act No. 539, this Court said
that “the intendment of the law is to award the lots to those who may
apply in the order mentioned”, that is, “the first choice is given to
the bona fide ‘tenants’, the second to the ‘occupants’ and the
last to ‘private in­dividuals.'” The Court also took into consideration
the fact that the sublessees executed a document
expressly agreeing to vacate the lots anytime the tenant so required, together
with the affidavit of one of the sublessees
acknowledging the right of the tenant to purchase the lot and renouncing
whatever rights he might have to purchase it.

However, in the subsequent case of Gutierrez vs. Santos,
et al. (107 Phil. 419), the ruling in the Santiago
decision was clarified and given a restrictive application, as follows:

“Now, we say that the above order of preference should be
observed if the parties affected stand on an equal foot­ing or under equal
circumstances, for only in that way can the provision of the law be implemented
with equity, justice and fairness to all and in keep­ing with the spirit of
giving land to the landless so that he may have a land of his awn.  But the order need not be rigidly followed
when a party, say a bon fide tenant, has already in his name other lots more
than what he needs for his family, for certainly to give him the preference
would work injustice to the occupants.”

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 ender 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.

On the second issue petitioner’s position is that his
preferential right could not be validly waived, such waiver being against
public policy.  Under Article 6 of the
new Civil Code “rights may be waived, unless the waiver is contrary to
law, public order, public policy, morals, or goad customs, or prejudicial to a
third person with a right recognized by law.” The old Civil Code (Art. 4)
carried a similar provision, although it mentioned only public interest or
public order.

That Commonwealth Act No. 539 lays dawn a public policy there can
be no doubt.  In the
case of Juat vs. Land Tenure Administration, G. R.
No. L-17080, January 28, 1961,
this Court, thru Mr. Justice Felix Angelo Bau­tista, ruled in this wise:

“x x x It
may also be stated that the avowed policy behind the adoption of such measure,
is, as aptly observed by the Court of Appeals, ‘to provide the landless
elements of our population with lots upon which to build their homes and small
farms which they can cultivate and from which they can derive their live­lihood
without being beholden to any man’ (Pascual vs.
Lucas, 51 0. G., No. 4, p. 2429), such measure having been adopted in line with
the policy of social justice enshrined in our Constitution to remedy and cure
the social unrest caused by the concentration of landed estates in the hands of
a few by giving to the landless elements a piece of land they can call their
own.”

Being contrary to public policy, the alleged waiver of his right
made by herein petitioner should be considered null and void.

WHEREFORE, the decision appealed from is reversed.  The award of the lot in question to
respondent Amada Aquino is set aside; transfer
certificate of title No. 84738 of the Registry of Deeds of Rizal
is ordered cancelled; and petitioner is declared to have the preferential right
to purchase the said lot.  Costs against respondents.

Concepcion, C.J., Reyes, JBL,  Dizon,
Zaldivar, and Teehankee, JJ., concur.

Ruiz Castro, Fernando, Barredo, and Villamor, JJ., took no part.