G.R. No. 76225 March 31, 1992
ESPIRIDION TANPINGCO, petitioner, vs. INTERMEDIATE APPELLATE COURT, and BENEDICTO HORCA, SR., respondents.

FACTS

Petitioner Espiridion Tanpingco filed a complaint for payment of disturbance compensation with damages against respondent Benedicto Horca, Sr. in the Regional Trial Court of Palo, Leyte. Tanpingco alleged he was the tenant-lessee of Horca’s agricultural riceland under a leasehold contract since April 1976. On April 9, 1985, Horca, through a representative, informed Tanpingco to desist from working on the land as it had been donated on February 3, 1985. Horca ordered Tanpingco to vacate. Tanpingco was willing to accept disturbance compensation or to remain as tenant. Horca filed a Motion to Dismiss, arguing the complaint stated no cause of action because he was no longer the real party-in-interest, having donated the land to the Ministry of Education, Culture, and Sports, Region VIII, as a school site for Buenavista Barangay High School. He contended that under Section 36(1) of the Agrarian Reform Code, disturbance compensation applies only when the lessor-owner derives financial benefits from converting the land to non-agricultural use. The trial court granted the Motion to Dismiss and denied reconsideration. The Intermediate Appellate Court affirmed the dismissal.

ISSUE

1. Whether the trial court properly granted the Motion to Dismiss despite Section 17 of P.D. No. 946, which requires an answer, not a motion to dismiss.
2. Whether the Intermediate Appellate Court correctly sustained the validity of the conversion of the tenanted riceland into a school site.
3. Whether a tenant is entitled to disturbance compensation when the landholding is donated and converted into a school site, and if so, who bears the responsibility to pay.

RULING

1. The trial court properly granted the Motion to Dismiss. While Section 17 of P.D. No. 946 requires a defendant to file an answer, technicalities may be disregarded to resolve the case on its merits. The rationale of the rule is to expedite proceedings. Granting a motion to dismiss based on indubitable grounds, such as the defendant not being the real party-in-interest, conforms with the spirit of P.D. 946. An action must be prosecuted against the real party-in-interest. If not, a motion to dismiss on the ground that the complaint states no cause of action is proper.
2. The donation and conversion of the land into a school site is valid. Under Article 428 of the Civil Code, the owner has the right to dispose of property within legal limits. The donation effectively transferred ownership to the Ministry of Education, Culture and Sports. However, the new owner must respect the tenant’s rights. The leasehold relationship is not extinguished by the transfer of legal possession under Section 10 of R.A. No. 3844 . The tenant’s security of tenure is guaranteed, and he can only be ejected by the court for cause.
3. The tenant is entitled to disturbance compensation under Section 36(1) of R.A. No. 3844 , as amended, when the land is converted to non-agricultural use. The responsibility to pay disturbance compensation falls on the new owner, the Ministry of Education, Culture and Sports, as the real party-in-interest. The new owner cannot oust the tenant and build a school without first paying disturbance compensation. The trial court correctly dismissed the complaint against Horca because he was no longer the real party-in-interest after the donation. The petitioner’s remedy is to claim disturbance compensation from the new owner or the appropriate agency. The petition was denied, and the decision of the Intermediate Appellate Court was affirmed.