GR 175155; (October, 2012) (Digest)
G.R. No. 175155 ; October 22, 2012
JOHN C. ARROYO, ET AL., Petitioners, vs. ROSAL HOMEOWNERS ASSOCIATION, INC., Respondent.
FACTS
Respondent Rosal Homeowners Association, Inc. (RHAI) is a non-stock corporation organized by occupants of a parcel of land in Bacolod City, formerly owned by PCIB, to avail of the Community Mortgage Program (CMP) and acquire the property. Petitioners were among the original occupants who became automatic members upon RHAI’s acquisition of title. To complete the CMP process, the National Home Mortgage Finance Corporation required members to sign a Lease Purchase Agreement (LPA) and maintain good standing per RHAI’s By-Laws.
Petitioners refused to sign the LPA and failed to attend meetings or pay membership dues. Consequently, RHAI’s Board passed a resolution to evict them and recover possession of the occupied lots. After written demands were ignored, RHAI filed an action for recovery of possession. The Regional Trial Court ruled for RHAI, finding petitioners were no longer members due to their refusal to comply with essential requirements, thus having no right to remain. The Court of Appeals affirmed the decision.
ISSUE
The core issues are: (1) whether petitioners were denied due process in their expulsion from RHAI; and (2) whether they were unlawfully deprived of their right to own land under the socialized housing program.
RULING
The Supreme Court denied the petition, affirming the lower courts’ rulings. On the first issue, the Court held that due process in the context of membership in a non-stock corporation is satisfied by an opportunity to be heard. The records showed petitioners were given notice through demand letters and were afforded a full opportunity to present their case during the trial. Their failure to utilize this opportunity does not equate to a denial of due process. Their non-compliance with the By-Laws and refusal to sign the LPA, which were preconditions for continued membership and benefit under the CMP, constituted valid grounds for the association to seek their eviction.
On the second issue, the right to own land under a socialized housing program is not absolute but conditional upon adherence to the program’s rules. The CMP benefits are contingent on signing the LPA and maintaining membership in good standing. By refusing to execute the LPA, petitioners voluntarily disqualified themselves from being loan beneficiaries. Their claim of a vested right to the land they occupied prior to RHAI’s acquisition is untenable, as their previous possession was by mere tolerance and did not create ownership. The Court emphasized that the CMP is a privilege with specific requirements, and petitioners’ failure to meet them extinguished any claim to the property under the program.