SC tells Dakak, Romeo Jalosjos to vacate Dapitan property

The Supreme Court (SC) has ordered Dakak Beach Resort Corporation and Romeo Jalosjos to leave the land they have been leasing in Taguilon, Dapitan City, Zamboanga del Norte for 20 years.

The SC upheld the rulings of the Regional Trial Court (RTC) and the Court of Appeals (CA), which ordered Dakak and Jalosjos to return the land and the permanent structures built on it to its owner, Violeta Saguin de Luzuriaga.

The high court also ordered Dakak and Jalosjos to settle the rentals and moral and exemplary damages.

Dakak and Luzuriaga entered into a 10-year-agreement stating that any permanent and fixed structures built in the 1,602 square-meter land in Barangay Taguilon will go to the owner at the end of the lease. However, the corporation did not provide the owner with a copy of the contract.

Believing the lease had expired after five years, Luzuriaga rejected further rental payments and demanded Dakak to vacate the land, but it continued using the property without paying rent.

Luzuriaga sold the property to her daughter Pilar L. Mendezona (named in the court ruling as Spouses Mendezona), who made similar demands that were also ignored by Dakak.

Mendezona and her husband then filed a complaint for recovery of possession, rentals, and damages against Dakak before the RTC.

However, Dakak and Jalosjos argued that it had a preferential right to acquire the land over Mendezona due to its multi-million dollar investments in the area and the right to redeem the land since it is a rural property adjacent to the property it owns.

Dakak and Jalosjos also asserted that if they must return the land, the cost of the infrastructure they built must be reimbursed before they vacate the property.

The SC ruled that Dakak had no right to redeem the land or be reimbursed for the structures that were constructed.

The RTC as well as the CA ruled in favor of Mendezona and their decisions were upheld by the Supreme Court, which said that Dakak had neither a right of redemption over the land nor was it entitled to reimbursement for the structures it built.

"Article 1621 of the New Civil Code grants owners of adjoining lands the right to redeem a piece of rural land sold to a third party.  The SC held that both the land to be redeemed and the adjoining lands must be classified as rural.  Here, the adjoining lands owned by Dakak, which house the Dakak beach resort, are used for commercial purposes. Hence, it has no right of redemption over the land of Spouses Mendezona," according to the SC press release.

"To be entitled to the structures on the land, one must be considered a “builder in good faith.”  Under Article  448 of the New Civil Code, a builder in good faith is someone who constructs on land while believing they own it.  Article 546 further provides that they may retain the structures they built until they are reimbursed by the owner."

Articles 448 and 546, the SC said, do not apply in this particular case.

"Since Dakak’s lease agreement expressly stated that ownership of all structures would transfer to the landowner at the end of the lease, it was not entitled to reimbursement for these," the court ruled.

The SC, meanwhile, also found Dakak and Jalosjos guilty of fraud and bad faith since they have been using the land for their financial gain for more than 20 years.

“The non-payment of rent to [Luzuriaga] and Spouses Mendezona, the outright refusal to vacate the property despite several demands, and dragging of a simple lease contract for years smack of utter bad faith and wanton disregard of contractual obligations. The act of oppression of Dakak and Jalosjos against a small landowner cannot be left unpunished,” the SC said.

Dakak and Jalosjos are also ordered to pay Mendezona P93,463.28 for unpaid rentals from August to December 1992 until December 31, 1997, with interest at the rate of 6% per annum from April 2, 2003, until fully paid.

The petitioners were also ordered to pay the Mendezonas P4,000 monthly rental for 1998 and an annual escalation of P2,000 in the monthly rental rate for the succeeding years until they vacate the property. The total amount shall earn interest at the rate of 6% per annum from April 2, 2003, until fully paid.

The petitioners are to pay moral damages in the amount of P500,000 and exemplary damages of P1 million to the Mendezonas. — BAP, GMA Integrated News