Philippine Supreme Court Resolutions > Year 2007 > September 2007 Resolutions > [G.R. NO. 155730 : September 17, 2007] ARNALDO RELOJ, CRESENCIA RELOJ, CONNIE CUISON, ELSIE ROGIO, REBECCA CABIDOG, SPS. JAIME ABRAHAM AND MARGIE ABRAHAM, AND JOHNNY ROGIO, SUBSTITUTED BY HIS HEIRS NAMELY: INOCENCIA ROGIO, JOSE ROGIO, ROEL ROGIO, ENRIQUE ROGIO, ANITA ROGIO LAUCHENGCO AND NELFA ROGIO MAGNO, PETITIONERS VERSUS NATIONAL HOUSING AUTHORITY, WILLIAM ANG CHUA AND JUDITH CHUA, RESPONDENTS. :

Quoted hereunder, for your information, is a resolution of this Court dated 17 September 2007:

G.R. No. 155730 - ARNALDO RELOJ, CRESENCIA RELOJ, CONNIE CUISON, ELSIE ROGIO, REBECCA CABIDOG,^* SPS. JAIME ABRAHAM^** and MARGIE ABRAHAM, and JOHNNY ROGIO, Substituted by His Heirs namely: INOCENCIA ROGIO, JOSE ROGIO, ROEL ROGIO, ENRIQUE ROGIO, ANITA ROGIO LAUCHENGCO and NELFA ROGIO MAGNO,^*** petitioners versus NATIONAL HOUSING AUTHORITY, WILLIAM ANG CHUA and JUDITH CHUA, respondents.

For review on certiorari are the (1) Decision^[1] dated July 19, 2002 of the Court of Appeals in CA-G.R. CV No. 50378, affirming the Decision^[2] dated July 26, 1995 of the Regional Trial Court (RTC) of Quezon City, Branch 80, in Civil Case No. Q-90-6419, and the (2) Resolution^[3] dated October 17, 2002, denying the motion for reconsideration.

This case involves a parcel of land identified as Lot No. 1, Block 532 of the Tatalon Estate Urban Bliss Project of public respondent National Housing Authority (NHA) and located along Araneta Avenue, corner Victory Avenue, Tatalon, Quezon City. The NHA classified the lot as a commercial lot per the Land Use Plan approved by the Housing and Land Use Regulatory Board (HLURB), and sold it to respondent spouses William Ang Chua and Judith Chua in 1985.

Petitioners questioned the validity of the sale, and filed a petition for nullification of contract, specific performance and damages with prayer for a writ of preliminary injunction against the respondents before the RTC of Quezon City. Petitioners claimed that under Presidential Decree No. 1261^[4] they were the ones entitled to purchase the lot being its legitimate occupants based on the 1976 NHA Census of Occupants.

The trial court, however, dismissed the petition for lack of merit. The trial court ruled that because the NHA merely tolerated petitioners' occupation without rentals, petitioners were not legitimate tenants entitled to the right of first refusal granted by Section 6^[5] of P.D. No. 1517.^[6] The trial court also noted that under Section 6^[7] of P.D. No. 1261, NHA can convert a portion of the Tatalon Estate into a commercial area to generate subsidies to develop the Tatalon Project. It then ruled that since the lot was not inalienable public land as claimed by petitioners but rather a part of the commercial area per the Land Use Plan approved by the HLURB, the sale to the spouses Chua was valid. The trial court likewise denied petitioners' claim for damages for being without factual and legal basis.

On appeal, the Court of Appeals affirmed the trial court, to wit:

WHEREFORE, the Decision dated July 26, 1995 rendered by the Regional Trial Court of Quezon City, Metro Manila, Branch 80, is hereby AFFIRMED and appellee National Housing Authority is hereby MANDATED to accommodate appellants to any of its sites and service projects.

No pronouncements as to costs.

SO ORDERED.^[8]

After the motion for reconsideration was denied, petitioners filed the instant petition and raised the following issues:

I.

WHETHER OR NOT THE CONTRACT OF SALE AWARDED BY PUBLIC RESPONDENT TO THE PRIVATE RESPONDENTS IS VALID.

II.

WHETHER OR NOT PRESIDENTIAL DECREE NO. 1261 AND REPUBLIC ACT NO. 2616 ARE APPLICABLE IN THE CASE AT BAR.

III.

WHETHER OR NOT THE AFFIRMANCE BY THE COURT OF APPEALS OF THE APPEALED DECISION IS PROPER UNDER THE CIRCUMSTANCES.

IV.

WHETHER OR NOT PETITIONERS ARE ENTITLED TO THE AWARD OF DAMAGES.^[9]

The issues for our resolution are: (1) Was the sale to the spouses Chua valid? (2) Are petitioners entitled to purchase the lot under the provisions of Rep. Act No. 2616^[10] and P.D. No. 1261 (3) Are petitioners entitled to damages?

Petitioners allege that the trial and appellate courts failed to consider Rep. Act No. 2616 and P.D. No. 1261, the specific laws on expropriation and disposition of the Tatalon Estate, and based their decisions only on P.D. No. 1517 which deals with urban land reform in general. The intent of Rep. Act No. 2616 and the provisions of P.D. No. 1261 give them, as occupants, priority to purchase the lot.^[11] Petitioners pray that we annul the sale to the spouses Chua; order the NHA to sell the lot to them; and award them actual and moral damages of P100,000, unspecified exemplary damages and attorney's fees.^[12]

The NHA counters that petitioners are not entitled to the lot, nor do they have the right of first refusal even if they were the listed occupants as their occupation was merely tolerated. Thus, under Section 3 (f)^[13] of P.D.No. 1517, they were not legitimate tenants who can exercise the right of first refusal under Section 6 of P.D. No. 1517. The NHA contends that petitioners misconstrue P.D. No. 1261 which mandates allocation of homelots in the Tatalon Project. The NHA stresses that it sold a commercial lot.^[14]

For their part, the spouses Chua aver that even under Section 4^[15] of P.D. No. 1261, the buyer's right to purchase is limited to areas the NHA may allocate to the buyer and the buyer has no vested and exclusive right over any specific lot in the Tatalon Estate.^[16]

After a careful study of the parties' submissions citing Rep. Act No. 2616, P.D. No. 1261 and P.D. No. 1517, we find the petition bereft of merit.

On the first issue, contrary to petitioners' contention, both the trial and appellate courts applied not only P.D. No. 1517 but also P.D. No. 1261 in their decisions. Both courts ruled that to generate subsidies for the development of the Tatalon Project, Section 6 of P.D. No. 1261 authorized the NHA to put to commercial use expropriated areas not used for low-income housing.

Indeed, Section 6 of P.D. No. 1261 expressly grants the NHA this power. Section 6 of said law is a distinct grant of power in addition to the NHA's powers under Sections 3^[17] and 4 of P.D. No. 1261 to allocate, by order of priority, lots and housing units in the Tatalon Project. In this case, the lower courts found that the lot is within the commercial area per the Land Use Plan approved by the HLURB. Thus, we respect the NHA's administrative discretion, exercised under Section 6, to classify the lot as commercial and sell it to the spouses Chua to generate subsidies for the development of this project intended to provide housing for the greatest number of people and improve slum areas.^[18] The need for subsidies is further gleaned from the additional appropriation of P33 million to complete the payment of the expropriation and PI7.1 million to upgrade the Tatalon Estate.^[19] Petitioners failed to show that the NHA committed grave abuse of discretion.

Also, petitioners failed to exhaust administrative remedies since they did not appeal to the Office of the President, as required by Section 10^[20] of P.D. No. 1261, the NHA's decision to sell the lot to the spouses Chua.

On the second issue, petitioners' claim of priority to purchase the lot disregards the NHA's powers as administrator of the Tatalon Project.

After Rep. Act No. 2616 initiated the expropriation of the Tatalon Estate, P.D. No. 1261 not only decreed the right of qualified families to buy land^[21] in the Tatalon Project but also the NHA's powers to (1) evolve and implement a comprehensive Tatalon development plan;^[22] (2) maximize the land use of the area, determine and use such areas as may be necessary to implement the plan;^[23] (3) choose the location of the land it may allocate to buyers;^[24] (4) sell areas not used for low-income housing or put them to commercial use to generate subsidies.^[25]

To reiterate, we respect the sale made by the NHA to the spouses Chua under Section 6 of P.D. No. 1261.

Notably also, the NHA's authority to choose the location of the land it may allocate restricts petitioners' right to buy. The restriction is necessary if only to allow the NHA to maximize the land use of the area and ensure a controlled, orderly and structured growth of dwellings in the project.^[26] We agree with the NHA that the priority claimed by petitioners refers to the standard under Section 3 of P.D. No. 1261 on how the NHA shall allocate homelots. The NHA's interpretation is consistent with our finding that Section 6 of P.D. No. 1261 is a distinct grant of power to the NHA in addition to its powers under Sections 3 and 4. Thus, in the allocation of homelots under Section 3, listed occupants based on the 1976 Census Survey enjoy priority over squatter families in the Tatalon Estate after the 1976 Census Survey.

Accordingly, we cannot grant petitioners' prayer to annul the sale to the spouses Chua, nor can we order the NHA to sell the lot to petitioners, for we cannot disregard Section 6 of P.D. No. 1261. In this connection, petitioners' claim for damages has no basis. We likewise find unnecessary any further discussion on the contentions based on the provisions of P.D. No. 1517.

WHEREFORE, the petition is DENIED for lack of merit. The Decision and Resolution dated July 19, 2002 and October 17, 2002, respectively, of the Court of Appeals in CA-G.R. CV No. 50378 are AFFIRMED

No pronouncement as to costs.

SO ORDERED.

Endnotes:

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^* Cabilong in some parts of the records.

^** Abraham in some parts of the records.

^*** Adoracion Lacap, represented by Perla Catalan, though a petitioner before the Court of Appeals, did not join this petition.

^[1] Rollo, pp. 105-110. Penned by Associate Justice Juan Q. Enriquez, Jr., with Associate Justices Eugenio S. Labitoria and Teodoro P. Regino concurring.

^[2] Id. at 64-70. Penned by Judge Agustin S. Dizon.

^[3] Id. at 115.

^[4] AMENDING REPUBLIC ACT NO. 2616, PROVIDING ADDITIONAL FUNDS FOR THE ACQUISITION OF THE TATALON ESTATE AND DESIGNATING THE NATIONAL HOUSING AUTHORITY AS THE ADMINISTRATION OF THE TATALON ESTATE HOUSING PROJECT, done on December 12, 1977.

^[5] SECTION 6. Land Tenancy in Urban Land Reform Areas. Within the Urban Zones, legitimate tenants who have resided on the land for ten years or more who have built their homes on the land and residents who have legally occupied the lands by contract, continuously for the last ten years shall not be dispossessed of the land and shall be allowed the right of first refusal to purchase the same within a reasonable time and at reasonable prices, under terms and conditions to be determined by the Urban Zone Expropriation and Land Management Committee created by Section 8 of this Decree.

^[6] PROCLAIMING URBAN LAND REFORM IN THE PHILIPPINES AND PROVIDING FOR THE IMPLEMENTING MACHINERY THEREOF, done on June 11, 1978.

^[7] SEC. 6. All areas expropriated and not otherwise put to use for low-income housing as provided above, may be developed, improved with dwelling units and rented or sold to low and middle income groups, or may be put to commercial use, at the option of the National Housing Authority and under the terms deemed appropriate by the same, in order to generate subsidies to help defray the development cost of the Project.

^[8] Rollo, p. 110.

^[9] Id. at 20.

^[10] AN ACT PROVIDING FOR THE EXPROPRIATION OF THE TATALON ESTATE IN QUEZON CITY AND FOR THE SALE, AT COST OF THE LOTS THEREIN TO THEIR PRESENT BONA FIDE OCCUPANTS, AND AUTHORIZING THE APPROPRIATION OF TEN MILLION PESOS FOR THE PURPOSE, enacted on August 3, 1959.

^[11] Rollo, pp. 22 and 24-25.

^[12] Id. at 29-30.

^[13] SECTION 3. Definitions. As used in this Decree, the following words and phrases shall have the following meanings or definitions:

xxxx

(f) Tenant refers to the rightful occupant of land and its structures, but does not include those whose presence on the land is merely tolerated and without the benefit of contract, those who enter the land by force or deceit, or those whose possession is under litigation.

xxxx

^[14] Rollo, pp. 201-202.

^[15] SEC. 4. Qualified families shall have the right to purchase land of such area which they can now afford to amortize, and in the location that the National Housing Authority may allocate to them. The price shall be the expropriated cost of the land plus other costs such as the costs of improvement of the estate and the common facilities and areas made available under the Tatalon Estate Development Plan of the Authority. The price shall be related to the lot area they shall occupy. The right to purchase these lands shall accrue to the beneficiaries after 5 years of continued, and uninterrupted occupancy and faithful and complete amortization of the total price of the land and improvements to be purchased from the date of allocation based on escalating or equal monthly payments at an interest rate of 6% per annum for not more than three hundred monthly installments.

^[16] Rollo, pp. 123-124.

^[17] SEC. 3. Allocation of lots and/or housing units in the project area shall be made by the Authority according to the following priority:

1. Present occupants who were listed in the 1958 Araneta Census List Occupants;
   
   
2. Present occupants as determined by the Authority in its 1976 Census Survey; and
   
   
3. Squatter families in the Tatalon Estate after the 1976 Census Survey.

In the event that the number of homelots in the expropriated area is not sufficient to accommodate all families falling under the foregoing categories, the Authority shall accommodate such excess families in any of its sites and service projects.

^[18] See Whereas Clauses of P.D. No. 1261.

^[19] Presidential Decree No. 1261 (1977), SEC. 8.

SEC. 8. There is hereby appropriated from the Special Activities Funds of the President or from such other sources as may be available to the National Government an additional amount of THIRTY THREE MILLION PESOS (P33,000,000.00) to complete the payment of the expropriation of the 25.26 hectare area. Any excess due to the deduction stated in Section 6 above all shall be utilized

^[20] SEC. 10. The decisions, rulings orders or resolutions of the National Housing Authority relative to the disposition of the lots or dwelling units or such rights acquired hereunder, or to the ejection of delinquent beneficiaries shall be final, unless appealed to the Office of the President within THIRTY (30) DAYS from receipt of such decision, ruling, order or resolution; Provided, however, that the Office of the President is deemed to have affirmed the appealed decision, ruling, order or resolution if within SIXTY (60) DAYS from notice of appeal, the said Office has not reversed nor modified the same.

^[21] Supra note 15.

^[22] Presidential Decree No. 1261 (1977), Section 1.

SECTION 1. The National Housing Authority shall evolve and implement a comprehensive development plan for the 25.26 hectare-area which shall constitute the Tatalon Estate Development Project.

^[23] Id. at SEC. 2.

SEC. 2. The Authority shall maximize the land use of the area and shall provide for a controlled, orderly and structured growth of dwellings in an environment provided with adequate sanitary and other physical facilities. Specifically, the Metropolitan Waterworks and Sewerage System (MWSS) in coordination with the Authority shall design and implement the development of the water and sewerage systems, including a bio-gas system for the area. All roads, open space, and other areas for public or community use adjacent to the expropriated areas as delineated in the present approved subdivision plan of the Tatalon Estate shall be deemed donated to the Quezon City Government, provided, however, that the Authority shall have the power to determine and utilize such areas as may be necessary in the development and implementation of the Tatalon Estate Development Plan.

^[24] Supra note 15.

^[25] Supra note 7.

^[26] See note 23.