SC Orders Dakak Beach Resort and Romeo Jalosjos to Vacate Leased Land

March 19, 2025

The Supreme Court (SC) has ordered Dakak Beach Resort Corporation (Dakak) and Romeo Jalosjos (Jalosjos) to vacate a 1,602-square-meter property in Taguilon, Dapitan City, Zamboanga del Norte, which they had been leasing.  The SC also ruled that all permanent structures built during the lease now belong to the land owner.

In a Decision written by Associate Justice Alfredo Benjamin S. Caguioa, the SC’s Third Division 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, pay unpaid rent, and settle PHP 1.5 million in damages.

Violeta Saguin de Luzuriaga (Luzuriaga) leased the land to Dakak, represented by Jalosjos, under a 10-year agreement, stating that any permanent and fixed structures built would belong to Luzuriaga at the end of the lease.  However, Dakak did not provide her with a copy of the contract.  Believing the lease had expired after five years, Luzuriaga rejected further rental payments and demanded that Dakak vacate.

Dakak ignored the request and stopped paying rent, yet continued using the land. When Luzuriaga later sold her property to her daughter, Pilar L. Mendezona (Mendezona), Dakak also disregarded similar demands from the new owner.

Mendezona, along with her spouse (Spouses Mendezona), filed a complaint for recovery of possession, rentals, and damages against Dakak and Jalosjos with the Regional Trial Court (RTC).

Dakak argued that it had a preferential right to acquire the land over Spouses Mendezona due to its multi-million dollar investments in the area.  It contends it has the right to redeem the lot under the law, as it is a rural property adjacent to the land it owns.

Dakak and Jalosjos assert that if they must return the land, they cannot be ordered to vacate until they are reimbursed for the costs of the structures built there.

Both the RTC and CA ruled in favor of Spouses Mendezona, which the SC upheld. 

The SC ruled 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.

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.

The SC held that Articles 448 and 546 do not apply when the relationship between the parties is based on a contract.   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 SC also found Dakak and Jalosjos guilty of fraud and bad faith and ordered them to pay Spouses Mendezona moral and exemplary damages:

“Dakak has been using [the land] for its own financial gain for more than 20 years at the expense of its lawful owner. 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.”  (Courtesy of the SC Office of the Spokesperson)

This press release is prepared for members of the media and the general public by the SC Office of the Spokesperson as a simplified summary of the SC’s Decision. For the SC’s complete discussion of the case, please read the full text of the Decision in G.R. No. 245461 (Dakak Beach Resort Corporation and Romeo G. Jalosjos, v. Spouses Jose Ma. M. Mendoza and Pilar L. Mendezona, October 21, 2024) at: https://sc.judiciary.gov.ph/245461-dakak-beach-resort-corporation-and-romeo-g-jalosjos-v-souses-jose-ma-m-mendezona-and-pilar-l-mendezona/.