79. Reyes v.

NHA

THIRD DIVISION
[G.R. No. 147511. January 20, 2003.]
MARINA Z. REYES; ALFREDO A. FRANCISCO; ANGELITA Z. GARCIA; ALFREDO Z.
FRANCISCO, JR; ARMANDO Z. FRANCISCO; ALMA C. FRANCISCO; EUGENIA Z. LUNA;
CLARITA Z. ZABALLERO, LEONARDO Z. ZABALLERO, JR., and TEODORO Z. ZABALLERO,
in substitution of LEONARDO M. ZABALLERO; AUGUSTO M. ZABALLERO; FRINE A.
ZABALLERO; ELENA FRONDA ZABALLERO; VICTOR GREGORIO F. ZABALLERO; MARIA
ELENA F. ZABALLERO; LOURDES ZABALLERO-LAVA; SOCORRO EMILIA ZABALLERO-
YAP; and TERESITA F. ZABALLERO, petitioners, vs. NATIONAL HOUSING AUTHORITY,
respondent.

Renato G. Dela Cruz & Associates for petitioners.

TOPIC: Eminent Domain (Public Use)

FACTS:
Respondent National Housing Authority (NHA) filed complaints for the expropriation of sugarcane
lands belonging to the petitioners. The stated public purpose of the expropriation was
the expansion of the Dasmariñas Resettlement Project to accommodate the squatters who were
relocated from the Metropolitan Manila area. The trial court rendered judgment ordering the
expropriation of these lots and the payment of just compensation. The Supreme Court affirmed
the judgment of the lower court.
A few years later, petitioners contended that respondent NHA violated the stated public purpose
for the expansion of the Dasmariñas Resettlement Project when it failed to relocate the squatters
from the Metro Manila area, as borne out by the ocular inspection conducted by the trial court
which showed that most of the expropriated properties remain unoccupied. Petitioners likewise
question the public nature of the use by respondent NHA when it entered into a contract for the
construction of low cost housing units, which is allegedly different from the stated public purpose
in the expropriation proceedings. Hence, it is claimed that respondent NHA has forfeited its rights
and interests by virtue of the expropriation judgment and the expropriated properties should now
be returned to herein petitioners.

ISSUE:
Whether or not the judgment of expropriation was forfeited in the light of the failure of respondent
NHA to use the expropriated property for the intended purpose but for a totally different purpose.

HELD:
The Supreme Court held in favor of the respondent NHA.
Accordingly, petitioners cannot insist on a restrictive view of the eminent domain provision of the
Constitution by contending that the contract for low cost housing is a deviation from the stated
public use. It is now settled doctrine that the concept of public use is no longer limited to traditional
purposes. The term "public use" has now been held to be synonymous with "public interest,"
 79. Reyes v. NHA

"public benefit," "public welfare," and "public convenience." Thus, whatever may be beneficially
employed for the general welfare satisfies the requirement of public use."
The rationale for this new approach is well explained in the case of Heirs of Juancho Ardona, et
al. vs. Reyes, et al., to wit:
The taking to be valid must be for public use. There was a time when it was felt that a literal
meaning should be attached to such a requirement. Whatever project is undertaken must
be for the public to enjoy, as in the case of streets or parks. Otherwise, expropriation is not
allowable. It is not anymore. As long as the purpose of the taking is public, then the
power of eminent domain comes into play. As just noted, the constitution in at least two
cases, to remove any doubt, determines what public use is. One is the expropriation of
lands to be subdivided into small lots for resale at cost to individuals. The other is in the
transfer, through the exercise of this power, of utilities and other private enterprise to the
government. It is accurate to state then that at present whatever may be beneficially
employed for the general welfare satisfies the requirement of public use." (italics supplied)
The act of respondent NHA in entering into a contract with a real estate developer for the
construction of low cost housing on the expropriated lots to be sold to qualified low income
beneficiaries cannot be taken to mean as a deviation from the stated public purpose of their taking.
Jurisprudence has it that the expropriation of private land for slum clearance and urban
development is for a public purpose even if the developed area is later sold to private
homeowners, commercials firms, entertainment and service companies, and other private
concerns.
Moreover, the Constitution itself allows the State to undertake, for the common good and
in cooperation with the private sector, a continuing program of urban land reform and housing
which will make at affordable cost decent housing and basic services to underprivileged and
homeless citizens in urban centers and resettlement areas. The expropriation of private property
for the purpose of socialized housing for the marginalized sector is in furtherance of social justice.
Records show that there is an outstanding balance of P1,218,574.35 that ought to be paid to
petitioners. It is not disputed that respondent NHA took actual possession of the expropriated
properties in 1977. 17 Perforce, while petitioners are not entitled to the return of the expropriated
property, they are entitled to be paid the balance of P1,218,574.35 with legal interest thereon at
12% per annum computed from the taking of the property in 1977 until the due amount shall have
been fully paid.
WHEREFORE, the appealed judgment is modified as follows:
1. Ordering respondent National Housing Authority to pay petitioners the amount of
P1,218,574.35 with legal interest thereon at 12% per annum computed from the taking of
the expropriated properties in 1997 until the amount due shall have been fully paid;
2. Ordering petitioners to pay the capital gains tax; and
3. Ordering petitioners to surrender to respondent National Housing Authority the owners'
duplicate certificates of title of the expropriated properties upon full payment of just
compensation.