RAFAEL DIMACULANGAN, PETITIONER, VS. GONDALINA CASALLA, RESPONDENT.

Dimaculangan versus Casalla

The Case

This is a petition for review on certiorari brought by Rafael Dimaculangan against Gondalina Casalla, arising from a dispute over who may be awarded preferential rights to a sixty-three square meter lot within the Tramo II Urban Bliss Project of the National Housing Authority in Paranaque. Dimaculangan had been censused as a renter on the property, while Casalla claimed the structure as its owner. The case matters because it draws the outer boundary of the protection given by the Urban Land Reform Law: it tells us who counts as a legitimate tenant or occupant entitled to preferential rights, and who, by his own conduct, forfeits that mantle.

Procedural History

The dispute began before the National Housing Authority. Its Arbitration Awards Committee, in a 1988 resolution, granted Casalla's appeal and recommended that preferential rights to the lot be awarded to her. The NHA General Manager later set that aside in a letter-decision dated September 19, 1994, awarding the lot pro-indiviso to Dimaculangan and Renato Ferrer and directing Casalla to sell her structure to them. Casalla appealed to the Office of the President, which in a Resolution dated June 23, 1997 set aside the letter-decision and confirmed and reinstated the Arbitration Committee's resolution. Dimaculangan's motion for reconsideration was denied, so he filed a petition for review with the Court of Appeals. The Court of Appeals, in its Decision of November 4, 2002, set aside the assailed decision and entered a new judgment declaring both Dimaculangan and Casalla legally disqualified from being awarded the lot, and ordering the lot to revert to the National Housing Authority for disposition to legally qualified applicants. Both parties moved for reconsideration, which the Court of Appeals denied in its Resolution of January 10, 2003. Dimaculangan then came to the Supreme Court by petition for review on certiorari under Rule 45. Casalla filed her own separate petition, but it was denied and became final, so only Dimaculangan's disqualification remained in issue.

Facts

A sixty-three square meter lot, known as Lot 1, Block 8A, Tramo Wakas, ZIP Project, Paranaque, lies within the Tramo II Urban Bliss Project of the National Housing Authority, and on it stands a three-door structure. On February 1, 1987, the National Housing Authority conducted a census and found the structure occupied by Rafael Dimaculangan, Renato and Leticia Ferrer, and Sebastian dela Cruz, to whom it issued census tags as renters. The rights to the lot and structure had previously been held by Sabina Casalla, who transferred them to Gondalina Casalla by an Affidavit of Transfer dated October 19, 1987.

Dimaculangan, Ferrer, and Dela Cruz recognized Gondalina's rights to the structure and executed a Kasunduan dated January 7, 1988, in which they agreed to rent the structure for one year, from February 1, 1988 to February 1, 1989, and acknowledged that after that period they were ready to vacate, leaving the final decision on any extension to the owner. Meanwhile, the National Housing Authority issued a master list dated March 14, 1988 recording Casalla as an absentee structure owner and the three as renters. Casalla appealed her status, and the Arbitration Awards Committee granted her appeal in a resolution dated September 13, 1988, recommending that preferential rights to the lot be awarded to her.

The one-year grace period lapsed on February 1, 1989, but Dimaculangan, Ferrer, and Dela Cruz did not vacate. Casalla filed an ejectment complaint with the Metropolitan Trial Court of Paranaque, and on September 27, 1993 the parties executed a compromise agreement for the turn-over of the structure to Casalla, which the court approved. Dimaculangan and his companions then asked the National Housing Authority for preferential rights as renters, but their request was denied. The NHA General Manager, however, later ruled in their favor, awarding the lot to Dimaculangan and Ferrer and directing Casalla to sell her structure to them. Casalla appealed to the Office of the President, which ruled in her favor. The Court of Appeals then declared both parties disqualified, and Dimaculangan elevated the matter to the Supreme Court.

Issues

• Whether or not Dimaculangan is entitled to preferential rights to the subject lot under the Urban Land Reform Law.
• Whether or not Dimaculangan qualifies as a legitimate tenant or occupant protected by Presidential Decree Number 1517 and Presidential Decree Number 2016.

Applicable Provisions

Section 6 of Presidential Decree Number 1517 grants preferential rights to landless tenants and occupants within urban land reform areas:

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.

This is the very source of the preferential right Dimaculangan invokes, and its requirements define who may claim it.

Section 2 of Presidential Decree Number 2016 reinforces that protection by prohibiting eviction of qualified tenants and occupants:

Section 2. No tenant or occupant family, residing for ten years or more reckoned from the date of issuance of Presidential Decree No. 1517 otherwise known as the Urban Land Reform Law, in land proclaimed as Areas for Priority Development or Urban Land Reform Zones or is a project for development under the ZIP in Metro Manila and the SIR Program in the regional cities shall be evicted from the land or otherwise dispossessed.

This provision extends the protective mantle, but only to families who meet the qualifications the Court later enumerates.

Section 3, paragraph f of Presidential Decree Number 1517 defines who a tenant is:

Section 3. Definitions. As used in this Decree, the following words and phrases shall have the following meanings and definitions: x x x (f) Tenant refers to the rightful occupant of land and its structures, but does not include those whose presence on the land is merely tolerated and without the benefit of contract, those who enter the land by force or deceit, or those whose possession is under litigation.

This definition is decisive, because it excludes from the term tenant those whose presence is merely tolerated or without the benefit of contract, which is exactly what Dimaculangan became.

Ruling

On the first issue, the Court held that Dimaculangan is not entitled to preferential rights to the subject lot. The protective mantle of Presidential Decree Number 1517 and Presidential Decree Number 2016 extends only to landless urban families who meet four qualifications: they are tenants as defined under Section 3, paragraph f of Presidential Decree Number 1517; they built a home on the land they are leasing or occupying; the land is within an Area for Priority Development and Urban Land Reform Zone; and they have resided on the land continuously for the last ten years or more. While the lot is unquestionably within an urban land reform zone, Dimaculangan failed the other requirements.

On the second issue, the Court held that Dimaculangan does not qualify as a legitimate tenant or occupant. He was initially a tenant of the structure but became a deforciant, one who wrongfully withholds possession, when he reneged on his commitment under the January 7, 1988 Kasunduan to vacate by February 1, 1989. From that time his status was no longer that of a legitimate tenant, for it was neither by contract nor by tolerance that he remained on the property. Moreover, in the same Kasunduan he acknowledged that he did not build the structure but merely rented it from Casalla, making him a mere apartment dweller, a term the Court read not literally as referring only to apartments but, in the context of Section 6, as a structure intended for dwelling which was not built by the occupant but merely rented from another. Finally, even on his own allegation that he began occupying the property in 1980, his occupancy from 1980 to 1989 reached only nine years, short of the ten-year requirement, since he became a deforciant in 1989.

Doctrine

The protection of Presidential Decree Number 1517 and Presidential Decree Number 2016 is not available to every person who happens to live on land within an urban land reform zone. A claimant must be a legitimate tenant or occupant as defined in Section 3, paragraph f; must have built a home on the land; must be within an Area for Priority Development or Urban Land Reform Zone; and must have resided there continuously for at least ten years. A tenant who refuses to honor a valid commitment to vacate becomes a deforciant, and his continued possession is neither by contract nor by tolerance, so he ceases to be a legitimate tenant. One who merely rents a structure he did not build is an apartment dweller, excluded from the protective mantle of the Urban Land Reform Law. And the ten-year period is counted only up to the time the occupant becomes a deforciant, not beyond.

Disposition

The Supreme Court denied the petition and affirmed the disqualification of Dimaculangan from any preferential right to the subject lot, with no pronouncement as to costs.

Remember This

The single line to memorize: a tenant who becomes a deforciant by refusing to honor his commitment to vacate loses the protection of the Urban Land Reform Law, and a mere apartment dweller who did not build the structure he rents is outside that protection. Examiners use this case to test the four qualifications for preferential rights under Presidential Decree Number 1517 and the ten-year residency count, and to distinguish a legitimate tenant from a deforciant and an apartment dweller.