FIFTEENTH DIVISION

[CA-G.R. CV No. 55892.  January 31, 2001.]

REALTY EXCHANGE VENTURE CORPORATION, plaintiff-appellant, vs. BAGONG SILANG RESIDENTS ASSOCIATION, INC., defendant-appellant.

D E C I S I O N

CALLEJO, SR., J p:

Over the years, squatters descended on a parcel of agricultural land, located in Imus, Cavite, covered by Transfer Certificate of Title No. 107980, with an area of 32,545 square meters. The property was sold at public auction and, despite its knowledge that the property was proliferated by squatters, the United Coconut Planters Bank, the Bank for brevity, purchased the said property, at public auction, on the basis of which Transfer Certificate of Title No. 206289 was issued, on April 28, 1980, by the Register of Deeds, to and under the name of said Bank. The occupants decided to acquire the property under Republic Act No. 7279 via the "Community Mortgage Program" of the government. To attain their objective, they formed an Association known as the "BAGONG SILANG BLK. 11 RESIDENTS ASSOCIATION." They had the association incorporated, with the approval of the Securities & Exchange Commission, evidenced by the "Certificate of Incorporation," issued by the SEC on January 24, 1989. The Presidential Commission for the Urban Poor issued to the Association a "Certificate of Provisional Accreditation," dated November 24, 1992.

Earlier, on January 17, 1992, the Association, through its President, Marilyn Regulacion, sent a letter to the Bank, offering to purchase the said property via the "Community Mortgage Program" of the government, for the price of P2,200,000.00. On September 25, 1992, the Bank sent a letter to the Association, informing the Association that, its proposal was approved by the Bank, under the following terms and conditions:

1.                                          Purchase Price — P2,200,000.00 in cash for the entire property, payable within sixty (60) days, plus interest at 21% per annum, coursed through the Community Mortgage Program of the government.

2.      Sale of the property "as is, where is" basis;

3.                                          If no payment is made within the sixty (60) day period, "the approval is automatically cancelled" (Exh. "6").

However, the Association failed to make payment within the sixty (60) day period. On December 11, 1992, the Regional Director for Luzon of the Presidential Commission for the Urban Poor, sent a letter, in behalf of the Association, requesting the Bank to give the Association more time to effect the payment for the property, as its loan application with the National Home Mortgage Commission Finance Corporation, under the "Community Mortgage Program" of the government, was being processed (Exhibit "7"). However, the Bank denied the request of the Association, through the Regional Director of the Presidential Commission for the Urban Poor.

On March 16, 1993, the Bank executed a "Deed of Sale" over the property in favor of the Realty Exchange Venture Corporation, Appellee for brevity, for the price of P1,955,018.00 (Exhibit "B"). The Appellee drew and issued to Far East Bank & Trust Company, Check No. 00900 in the amount of P1,629,568.00 covered by Check Voucher No. 4045 (Exhibit "C") in full payment of the purchase price of the property.

Subsequently, the Appellee filed a Complaint, with the Regional Trial Court of Cavite, against the squatters on the property, entitled and docketed as "Realty Exchange Venture, Inc., versus Remy Abog, et. al., Civil Case No. 93-47, for Recovery of Possession of Real Property." The Appellee prayed that, after due proceedings, judgment be rendered in its favor as follows:

"WHEREFORE, it is prayed that judgment be rendered as follows:

1.      Ordering defendants to immediately surrender possession of the premises to plaintiff and/or vacate the same;

2.      Ordering defendants to jointly and severally pay plaintiff the sum of P25,000.00 and P25,000.00 as and for moral and exemplary damages, respectively;

3.      Ordering defendants to pay, jointly and severally, plaintiff the sum of P200.00 each defendant per month from the time they took possession of the property on or about December 13, 1989 as unearned income or compensatory damages;

4.      Ordering defendants to jointly and severally pay plaintiff the sum of P50,000.00 as and for attorney's fees and a further sum of P700.00 as appearance fee per court attendance;

5.      Ordering defendants to jointly and severally pay the costs of suit; and

Such other reliefs and remedies just and equitable in the premises." (at pages 4-5, Records)

The Defendants, in their Answer to the Complaint, alleged, inter alia, that, as of 1989, the property was occupied by a colony of squatters numbering about two hundred (200) families which, through the Association, had a better right to the property under Republic Act 7279.

During the hearing, on June 18, 1994, the Court ordered the Appellee to implead the Association as party defendant, in lieu of the members of the Association. The Appellee complied with the Order of the Court and filed an "Amended Complaint" impleading the Association, as party defendant, in lieu of the members thereof. The Association and its members filed a "Third Party Complaint" and an "Amended Third Party Complaint" against the United Coconut Planters Bank, and prayed that, after due proceedings, judgment be rendered on their Third Party Complaint as follows:

"WHEREFORE, premises considered, it is respectfully prayed that, after due hearing, a decision be rendered, to wit:

(a)     declaring the sale of land under TCT No. 206289 as a violation of Section 2, of R.A. 7279, hence, against public policy;

(b)     ordering herein Third Party Defendant to sell the subject land to herein defendants through their association, Bagong Silang Blk. III (sic) Residents Association, Inc., through the Community Mortgage Program;

(c)     ordering herein Third Party Defendant to pay herein defendants the amount of P300,000.00 plus P2,500.00 for every court appearance as and for attorney's fees;

Other reliefs as are just and equitable under the premises are, likewise prayed for." (at pages 3-4, supra).

However, the Bank filed a "Motion to Dismiss" the "Amended Third Party Complaint" and, on November 11, 1994, the Court issued an Order granting the "Motion to Dismiss" of the Bank, in this language:

 

"Re: Motion to Dismiss —

For a party to be entitled to file a third-party complaint, said party must have a right for contribution, indemnity, subrogation or any other relief, in respect of his opponent's claim. This right must perforce arise from any valid contract in such a way that the third-party plaintiff must be bound either principally or subsidiarily by the contract. Without being bound by a valid contract, the third-party plaintiff cannot have a cause of action against the third-party defendant.

As can be gleaned front the Amended Third-Party Complaint, the third-party plaintiff failed to live up to its promise and thus no contract between third-party plaintiff and third-party defendant was ever consummated. Hence, the motion to dismiss should be, as it is hereby granted. Accordingly, the third-party complaint is dismissed." (at page 216, Records).

On November 8, 1996, the Court a quo promulgated a Decision in favor of the plaintiff and against the Association, the decretal portion of which reads as follows:

"WHEREFORE, judgment is hereby rendered ordering the defendant and all its members, assigns or privies or anyone acting for it and its behalf to vacate the subject property, to demolish their structures, if any, and to surrender possession of the same to the plaintiff within a period of forty-five (45) days from the service of this judgment after it has become final and executory.

All the other claims/counterclaims of the parties are dismissed for lack of proper substantiation." (at page 50, Rollo)

Aggrieved, the Association, Appellant for brevity, interposed an appeal from said Decision.

We are tasked to resolve, in the present recourse, the issues of (a) whether or not the Appellant has a priority right to purchase the subject property, and (b) whether or not the Court a quo had jurisdiction over the action of the Appellee.

Anent the first issue, the Appellant avers that the Court a quo committed a reversible error in not finding and declaring that the members of the Association, homeless urban poor as they are, should be given priority to purchase the property. As the Appellant puts it, "it is this classic situation of the rich versus poor that the lower court should have found in favor of the poor" (at page 42, Rollo). The Court a quo, on the other hand, found and declared that:

"The plea of the defendant for social justice is no justification to prefer it over the plaintiff. As our Supreme Court has aptly said: "never is it justified to prefer the poor simply because they are poor, or to reject the rich simply because they are rich, for justice must always be served, for poor or rich alike, according to the mandate of the law." The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privileged (sic)." (at page 50, Rollo)

We do not agree with the Appellee. In the first place, as admitted by the Appellant, the subject property is covered by Republic Act 6657, as can be gleaned from the exordium of the "Deed of Sale" executed by the Bank in favor of the Appellee.

"WHEREAS, the VENDOR in a public auction sale, was adjudged the highest bidder of one (1) parcel of agricultural land located in the Municipality of Bacoor, Province of Cavite, Philippines, with a land area of THIRTY TWO THOUSAND FIVE HUNDRED FORTY FIVE (32,545) SQUARE METERS, more or less, covered by TRANSFER CERTIFICATE OF TITLE NO. T-206289 in its name;

WHEREAS, the Department of Agrarian Reform (DAR), in a legal opinion dated July 2, 1990, pertaining to Section 71 of R.A. 6657, attached hereto as Annex A, stated that "while under R.A. 6657, banks are not precluded from disposing of their foreclosed assets in compliance with existing laws on compulsory transfer thereof, said assets are still subject to acquisition under the Comprehensive Agrarian Reform Program";

WHEREAS, Congressman Renato P. Dragon had an approved proposal to purchase the property;

WHEREAS, Congressman Renato P. Dragon assigned his rights, interests, participations and equity over the property on July 5, 1990 to VENDEE;

WHEREAS, considering all the foregoing and notwithstanding the fact that the said agricultural land is covered under Republic Act 6657, known as the Comprehensive Agrarian Reform Program (CARP), VENDEE desires to buy the VENDOR's rights, titles and interests over said property under R.A. 6657, and the VENDOR agrees to sell the same subject to the terms and Conditions set forth;" (at pages 40-41, Rollo) (Emphasis supplied).

Under Section 5, of Republic Act 7279, properties covered by Republic Act 6657 are except from the coverage of Republic Act 7279:

"SEC. 5. Exemptions.—The following lands shall be exempt from the coverage of this Act:

(a)     Those included in the coverage of Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law." (idem, supra)

Even if it is assumed, for nonce, that, indeed, the subject property is not covered by Republic Act 6658, the evidence on record shows that the Bank already gave the Appellant the right to purchase the property, provided, that, the purchase price of the property, in the amount of P2,200,000.00, as proposed by the Appellant, be paid in cash, within sixty (60) days, otherwise, the approval, by the Bank, of Appellant's proposal, would be automatically cancelled.

The Appellant failed to comply with its undertaking. Hence, the Bank was impelled to sell the property to the Appellee. We belabored to minutiosely consider Republic Act 7279 and, contrary to Appellant's pose, We found no priority right granted by law to the urban poor to purchase privately-owned lands for urban development and housing program of the government. What Section 9, of Republic Act 7279 specifically provides is that, among lands for socialized housing, privately owned lands are the last in priority of acquisitions, by the government. Synthesizing the issue in the present recourse as the "rich as against the poor and vice versa" is uncalled for. Appellant must take heed and pay obeissance to the pronouncement of our Supreme Court in "Gelos, versus Court of Appeals, et. al., 208 SCRA" quoted in "Land Bank of the Philippines, versus Court of Appeals, et. al., 249 SCRA 149", "But never is it justified to prefer the poor simply because they are poor, or to reject the rich simply because they are rich, for justice must always be served, for poor and rich alike, according to the mandate of the law."

Anent the second issue, the Appellant insists that the subject property, being an agricultural land, covered by Republic Act 6657, otherwise known as the Comprehensive Agrarian Reform Law, the Court a quo should have applied the "special rules of procedure for agrarian cases." We do not agree. Appellee's action, in the Court a quo, was not one involving an agrarian dispute within the context of and defined in Section 3, paragraph (d) of the law, thus:

". . . the term "agrarian dispute" is defined as referring to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers' associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements." (idem, supra)

Appellee's action in the Court a quo was one for recovery of possession of realty against the Association, whose members are squatters on Appellee's land and, not agricultural tenants or lessees. Application of special rules envisaged for agrarian disputes is thus proscribed.

IN THE LIGHT OF ALL THE FOREGOING, the appeal is hereby DISMISSED. The Decision appealed from is AFFIRMED.

SO ORDERED.

Dacudao and Guevara-Salonga, JJ., concur.