G.R. No. 165691 - Barbers vs. Commission on Elections

This case is a petition for review on certiorari under Rule 45, seeking the reversal of a decision and resolution by the Court of Appeals.
The CA decision had set aside an earlier order from the Regional Trial Court (RTC) of Quezon City, Branch 92.
The case had been pending for over eleven years, highlighting prolonged litigation.

Petitioner: Cesario V. Inducil.
Respondent: TOPS Taxi, Inc.
The subject matter involves a parcel of land located in Sta. Mesa Heights, Quezon City, which was the focus of a complaint for “Purchase of Real Estate with Damages.”

Since 1976, respondent had been occupying the property under a verbal lease agreement with petitioner.
During the 17-year lease period, respondent complied with all stipulations and in good faith improved the premises by investing approximately P500,000 in permanent improvements.
In 1988, petitioner received an offer from Ignacio N. Solim and Marjorie C. Tan to either buy or lease the same property and subsequently informed respondent regarding possible new rental terms.

In 1993, respondent’s counsel communicated to petitioner, asserting that respondent enjoyed a “preferential priority” or pre-emptive right to purchase the property, should it be sold.
Later in 1993, petitioner sold the land to Solim and Tan for P1,800,000 without the consent of respondent.
On learning of the sale, respondent objected and subsequently filed its complaint alleging that petitioner acted in bad faith by selling the property while the respondent was ready and willing to purchase it.

There was no contractual provision granting respondent a pre-emptive right.
The elements necessary for a cause of action were absent; in particular, no recognizable right of respondent was violated by the sale.
Article 1676 of the Civil Code provided tacit authority to sell the property, since the lease was not recorded in the Registry of Property.

Respondent contended that under Section 6 of Presidential Decree No. 1517 (Urban Land Reform Act), it had acquired a statutory pre-emptive right to purchase the property after having occupied it for over ten years.

The RTC dismissed respondent’s complaint on the ground of failure to state a cause of action.
The Court of Appeals reversed the RTC’s decision, holding that under PD 1517 the respondent, as a long-term tenant, had a right of first refusal over the sale of the land.

Does the respondent have a pre-emptive (right of first refusal) right to purchase the property under Presidential Decree No. 1517?

Whether the respondent qualifies as a “resident” or “legitimate tenant” under Section 6 of PD 1517, considering:

The nature of the occupancy (commercial use as a taxi garage and shop versus a residential dwelling).
The fact that the relationship was lessor/lessee rather than a traditional landlord/tenant relationship.
Respondent’s status as a juridical entity, instead of an individual or economically disadvantaged resident.

Whether the legislative intent of PD 1517—geared toward protecting the urban poor and bona fide resident tenants—extends to cover the respondent’s circumstance.