GR 175200; (May, 2010) (Digest)
G.R. No. 175200; May 4, 2010
NATIONAL HOUSING AUTHORITY, Petitioner, vs. THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD and MATEO VILLARUZ, substituted by his heirs, namely, SONIA VILLARUZ, MARGARITA VILLARUZ and CARLOS H. VILLARUZ, Respondents.
FACTS
Respondent Mateo Villaruz was a tenant on a seven-hectare rice field (Lot 916) in Bacolod, owned by the Estate of C.N. Hodges. In 1985, petitioner National Housing Authority (NHA) purchased the foreclosed lot. Villaruz later filed a complaint before the Provincial Agrarian Reform Adjudicator (PARAD), seeking recognition as a tenant-beneficiary under P.D. No. 27 and maintenance of possession over a three-hectare portion. The PARAD ruled in his favor, ordering him to pay a share of the harvest to NHA. The Department of Agrarian Reform Adjudication Board (DARAB) and the Court of Appeals affirmed this decision.
ISSUE
Whether Lot 916, acquired by the NHA for its housing and resettlement program, is exempt from the coverage of agrarian reform laws, thereby extinguishing any agricultural leasehold relation.
RULING
The Supreme Court granted the petition, ruling that the land is exempt. The legal logic centers on the clear language of Presidential Decree No. 1472. Section 1 of P.D. No. 1472 explicitly declares that lands “acquired by the National Housing Authority or its predecessors-in-interest or to be acquired by it for resettlement purposes and/or housing development” are outside the scope of the land reform program, and the NHA “shall not be held liable for disturbance compensation.” The Court emphasized that the decree draws no distinction based on when the land was acquired (before or after its effectivity) or whether it was tenanted. The exemption’s inclusion of disturbance compensation—a remedy available only to tenants—logically presupposes that the NHA may acquire tenanted agricultural lands. To hold otherwise would render the disturbance compensation clause superfluous.
The acquisition of the land by NHA for housing transformed its character by operation of law from agricultural to residential. Upholding the tenancy would conflict with the government’s housing objectives, effectively making NHA an agricultural lessor unable to use the land for its intended public purpose. While mindful of tenants’ rights, the Court balanced these against the broader state interest in addressing housing needs, as embodied in P.D. No. 1472. Consequently, the agricultural leasehold relation was extinguished upon NHA’s acquisition, and Villaruz’s action for possession was dismissed.