G.R. No. L-10303; August 22, 1958
LUCIO JAVILLONAR, plaintiff-appellant, vs. LAND TENURE ADMINISTRATION, defendant-appellee.

FACTS

Lucio Javillonar, a tenant and occupant of a parcel of land originally owned by the Archbishop of Manila and later acquired by the Philippine Realty Company, purchased the lot from the government (through the Land Tenure Administration, formerly the Rural Progress Administration) on April 5, 1955. The lot, with an area of 162.6 square meters, was sold at P25 per square meter, totaling P4,065. After a 10% cash discount and deduction of an advance payment, a balance of P3,558.50 remained. To this amount, the government added P292.07 for rental of the property from November 2, 1953, to February 2, 1955, and other incidental expenses (notarial fee, deed of sale fee, registration, and documentary stamps) totaling P41.75. Thus, Javillonar paid a total of P3,862.57. He filed an action to recover the additional charges (P333.82), claiming they were illegally collected in excess of the agreed price of P25 per square meter. The sale was governed by Lands Administrative Order No. R-3, which authorized the collection of occupation fees (6% of the appraised value from the date of government acquisition until the execution of the agreement to sell) and required the applicant to bear all expenses incident to the transfer of title.

ISSUE

Whether the Land Tenure Administration acted legally in collecting from Javillonar the additional charges for rental and incidental expenses on top of the agreed purchase price of P25 per square meter.

RULING

The Supreme Court affirmed the lower court’s decision, dismissing Javillonar’s complaint and absolving the Land Tenure Administration from liability. The Court held:
1. Validity of the Charges under Administrative Order: The sale was conducted pursuant to Lands Administrative Order No. R-3, which was promulgated under legal authority and had the force of law. The order explicitly provided for the collection of occupation fees from bona fide tenants from the date the government acquired the estate until the execution of the sale agreement, and for the applicant to bear all transfer expenses. Javillonar applied for purchase under these rules, was furnished a statement of account including these charges, and did not object; thus, he was bound by them.
2. Constitutionality of the Order: The Court addressed Javillonar’s new constitutional challenge (that the charges violated the constitutional mandate to convey expropriated lands “at cost” under Article XIII, Section 4) by stating there was no evidence the government made a profit. The term “cost” includes not just the purchase price paid to the former owner but also the costs of administration and sale. The charges ensured the government broke even, consistent with the constitutional intent.
3. Legality of Rental Collection: It was just for the government, as the new owner, to collect rentals from the tenant (Javillonar) from the time it acquired the property until the sale was consummated. This served to reimburse the government for the interest on its substantial investment in acquiring the landed estate.
4. Inapplicability of Republic Act No. 1162 : The Court found Republic Act No. 1162 (which provided for lease terms and a 150-square-meter area limit for tenant acquisition) inapplicable. The expropriation was initiated under prior laws (Commonwealth Act No. 378, as amended), and the estate was already acquired before R.A. No. 1162 ’s enactment on June 18, 1954. Furthermore, applying it would disqualify Javillonar, as his lot exceeded the 150-square-meter limit.
The appeal was dismissed for lack of merit.