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Gov’t housing lots exempted from CARP — Supreme Court

By EDMER F. PANESA [ Manila Bulletin Online ]
May 24, 2010, 6:15pm

The Supreme Court (SC) has ruled that all lands acquired by the National Housing Authority (NHA) for its resettlement and housing efforts are exempted from the coverage of agrarian reform laws.
In a decision  penned by Associate Justice Roberto A. Abad, the SC’s Second Division cited Section 1 of Presidential Decree (P.D.) 1472, which provides that lands obtained by the NHA for resettlement purposes or housing development are outside the scope of the Comprehensive Agrarian Reform Program (CARP).
At the same time, the court held that the NHA is not bound to pay disturbance compensation to previous tenants of agricultural lands acquired by the agency for its housing projects.
The rulings stemmed from the case of Mateo Villaruz Sr., who sought -his recognition by the NHA as the tenant beneficiary of a lot he tenanted under P.D. 27 or the Tenant Emancipation Act.
Court records showed that sometime in 1960, the administrator of the estate of the late C.N. Hodges asked Villaruz to work as tenant of the estate’s seven-hectare rice field in Barangay Alijis, Bacolod City, designated as Lot 916.
Since the estate wanted to prevent the land from falling into the hands of squatters, it had a house constructed on the lot for Villaruz and engaged his daughter and son-in-law to serve as co-tenants.
In 1976, however, squatters settled into Lot 916, occupying four of its seven hectares. Villaruz was thus left with only three hectares for planting rice and corn.
As it later turned out, the estate mortgaged Lot 916 to a bank, resulting in its foreclosure when the loan could not be paid. The NHA bought the land on September 11, 1985.
Later that ear, the Department of Public Works and Highways (DPWH) constructed roads and bridges that passed through a portion of the lot. As a result, some plants and crops had to be cut down, prompting respondent Villaruz to demand payment of their value.
When the demand was not heeded, Villaruz filed an action for damages and disturbance compensation against petitioner NHA and the estate before the Bacolod City Regional Trial Court (RTC).
But the RTC dismissed the complaint on the ground that the NHA was not liable for disturbance compensation as provided for in Section 1 of P.D. 1472. Villaruz did not appeal from the court order.
Soon after, Villaruz filed a complaint with the Provincial Agrarian Reform Adjudicator (PARAD), seeking recognition as tenant beneficiary of the lot he tenanted under P.D. 27 and praying that his possession of its three-hectare portion be maintained.
After hearing, the PARAD ruled in Villaruz’s favor with respect to such portion provided he paid 25 percent of his net harvest to NHA until a fixed rental could be set.
PARAD, however, said he could not be declared owner of the lot since it had ceased to be private agricultural land, having been bought by the government and that it was already outside the coverage of P.D. 27.
The NHA appealed the case to the Department of Agrarian Reform Adjudication Board (DARAB) and eventually to the Court of Appeals (CA). Both the DARAB and the CA affirmed the PARAD decision, prompting him to file a petition for review before the SC.
In its decision, the High Court did not agree with the rulings of PARAD and DARAB that the exemption provided under P.D. 1472 applied only to lands already acquired by NHA when the law took effect on June 11, 1978.
It noted that while the CA disagreed and ruled that the exemption also applied to properties that the NHA acquired after the decree took effect, the appellate court still upheld the PARAD and DARAB decisions.
“The language of the exemption is clear: the exemption covers ‘lands or property acquired…or to be acquired’ by NHA. Its Section 1 does not make any distinction whether the land petitioner NHA acquired is tenanted or not. When the law does not distinguish, no distinction should be made,” the SC pointed out.
Moreover, the High Court said the same law provides that the NHA shall not be liable for disturbance compensation.
“Since only tenants working on agricultural lands can claim disturbance compensation, the exemption assumes that NHA may have to acquire such kinds of land for its housing program.
If the exemption from payment of disturbance compensation applied only to untenanted lands, then such exemption would be meaningless or a superfluity,” the SC said.
“Thus, petitioner NHA is not bound to pay disturbance compensation to respondent Villaruz even if he was the tenant of Lot 916. The NHA’s purchase of Lot 916 for development and resettlement transformed the property by operation of law from agricultural to residential,” it added.
The SC said that if the ruling of the CA were to be upheld, NHA would have to allow Villaruz and his successors-in-interest to work on Lot 916 as agricultural tenants for as long as they liked without any chance of getting emancipation patent over it under P.D. 27.
“This would be antithetical to the objectives of the agrarian reform program. As for the NHA, it would become an agricultural lessor with no right to use the land for the purpose for which it bought the same. This, in turn, would become prejudicial to the government’s housing projects,” the high tribunal said.
It added: “The Court is mindful of the plight of tenant-farmers like respondent Villaruz. But it is also incumbent upon it to weigh their rights against the government’s interest in meeting the housing needs of the greater majority. It is in this light that P.D. 1472 has to be interpreted.”

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