PATROCINIA OBAÑANA AND EMILIO OBAÑANA, PETITIONERS, VS. THE HONORABLE ALEJANDRO R. BONCAROS, DISTRICT JUDGE, COURT OF FIRST INSTANCE, BRANCH V, OF NEGROS ORIENTAL AND ZOILO LANT…

A Petition for Review of the Order of the then Court of First Instance
of Negros Oriental, Branch V, dismissing petitioners’ Complaint for
reconveyance with damages, in Civil Case No. 5094, for lack of cause of
action due to petitioners’ failure to exhaust administrative remedies.

In his lifetime, Celestino Lantao possessed a parcel of unregistered
land with a nipa swamp containing an area of approximately 2944 sq. ms.
situated at Caranoche, Sta. Catalina, Negros Oriental, known as Lot No.
73, Pls 790-D. Celestino is the common predecessor-in-interest of the
parties. Petitioners brother and sister are the children of his
deceased daughter Mauricia, while private respondent is his son.
Celestino died shortly before the 2nd World War.

According to petitioners’ Complaint, since their grand­father’s death,
they possessed the western portion of subject property, while private
respondent occupied the eastern part; that they had been paying taxes on
their portion and enjoying the fruits thereof; that sometime in 1968
they and private respondent went to the Bureau of Lands to have their
respective properties titled but they discovered that the area possessed
and cultivated by private respondent was inadvertently included in
petitioners’ Tax Declaration No. 4116; that in view of this discrepancy,
they decided to partition the lot into two; that on December 24, 1968,
petitioner Patrocinia executed a Deed of Quitclaim whereby she “quit my
claim over one-half (½) of said parcel of land x x x in favor of my
uncle Zoilo Lantao”, and likewise “quit my claim over one-fourth (¼)
share of said parcel of land x x x in favor of my brother Emilio
Obañana”; that they also agreed to exchange the portions they
respectively possessed such that private respondent would take his
one-half (½) share from the western portion while plaintiffs would take
their share from the eastern portion; that this agreement was
graphically indicated in the sketch appearing in the document signed by
Patrocinia and approved by private respondent Zoilo Lantao, and by
petitioner Emilio; that thereafter petitioners went to their lot to
harvest the nipa palms on the eastern portion but to their surprise,
they were stopped by private respondent who threatened them with bodily
harm and the filing of criminal cases; that they subsequently discovered
that private respondent, without their knowledge and consent, had
surreptitiously and fraudulently applied for a homestead patent over the
whole lot in utter disregard of their rights and ultimately obtained
Original Certificate of Title No. FV-9121 on July 18, 1969, also through
fraud and misrepresentation; that they were thus compelled to institute
on June 25, 1970 the Complaint below for reconveyance of the eastern
portion premised on breach of constructive trust by private respondent.

Private respondent answered the Complaint alleging that subject property
is his share in his father’s estate; that petitioners had been given
their share through their deceased mother; and that he had not given his
approval to the Deed of Quitclaim.

Subsequently, upon private respondent’s motion, on the grounds that the
award of a patent by the Director of Lands is conclusive upon the rights
of the parties and that it is said official, not the Trial Court, who
has jurisdic­tion over the controversy; and that there can be no
collate­ral attack on private respondent’s title, respondent Judge
dismissed the Complaint for lack of cause of action due to petitioners’
failure to exhaust administrative remedies. Said the Court:

“In the exercise of his authority, the Director of Lands passes
upon the qualification of an applicant for a land grant. This authority
is exclusively lodged with the said official. To order the
reconveyance of a portion of a parcel of land subject of this litigation
would be tantamount to this Court arrogating unto itself a power not
granted to it. Worthy of note is the absence of a declaration from the
said official that the plain­tiffs herein are qualified to acquire
public agricultural lands under the Public Land Act as amended.

Likewise, the granting of the reliefs sought by the plaintiffs in
their complaint will result in setting aside a decision of an
administrative official without giving him an opportunity to correct
whatever error he may have committed. Surely the actuation of the
plaintiffs is not what is intended by the law. However, under the
present state of facts, they are not left without a remedy because the
subject certificate of title may still be set aside, but at the instance
or with the conformity of the Director of Lands, pursuant to Section 91
of the Public Land Act, as amended.”

As petitioners had failed to obtain reconsideration, this Petition was filed.

We reverse. The doctrine requiring prior exhaustion of administrative
remedies before recourse to Courts may be had is confined to public
lands.^[1] It is inapplicable
to private lands. A free patent application having been granted in the
case at bar and a corresponding certificate of title having been issued,
subject property ceased to be part of the public domain and became
private property over which the Director of Lands has neither control
nor jurisdiction.^[2] The land
covered thereby assumes the character of registered property in
accordance with the provisions of Section 122 of the Land Registration
Act and the remedy of the party who has been injured by fraudulent
registration is an action for reconveyance.^[3]
The relief that petitioners seek is the enforcement of a constructive
trust in order to obtain a judgment for reconveyance of the land,
relying on Article 1456 of the Civil Code, which provides:

“If property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied
trust for the benefit of the person from whom the property comes.”

Clearly then, petitioners’ cause of action is incapable of administrative resolution.

“Furthermore, should defendant-appellant succeed at the trial in
establishing the fraud and breach of trust on the part of plaintiff as
his alleged former tenant who allegedly maliciously and in bad faith
took undue advantage as defendant’s tenant on the land to grab the same
from defendant the recent decision of this Court in Miguel vs. Court of Appeals, et al.
would entitle defendant, on the principle of enforcement of a
constructive trust, to obtain in the case below a judgment for the
reconveyance of the land notwithstanding that the Director of Lands and
the Register of Deeds have not been made parties to the case. In the
said case of Miguel vs. Court of Appeals, this Court held that
where the respondent in breach of fiduciary duty and through fraud
succeeded in obtaining a sales patent and ultimately an original
certificate of title over a parcel of land which was openly and
continuously possessed by petitioner in the concept of owner, the
respondent could be judicially compelled to reconvey or assign to
petitioner the land thus unlawfully and in breach of trust titled by the
respondent.”^[4]

WHEREFORE, judgment is hereby rendered REVERSING and SETTING ASIDE
respondent Judge’s Order of July 13, 1979 dismissing the complaint, and
the Order, dated August 10, 1979, denying reconsideration, and REMANDING
this case for further proceedings to the Regional Trial Court
correspond­ing to the former Court of First Instance of Negros Oriental,
Branch V. No costs.
SO ORDERED.

Plana, Relova, Gutierrez, Jr. and De la Fuente, JJ., concur.

Teehankee, J., (Chairman), on official leave.

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^[1] Baladjay vs. Castrillo, 1 SCRA 1064 (1961).

^[2] Sumail vs. Judge of the CFI of Cotabato, et al., 96 Phil. 946 (1955).

^[3] Director of Lands vs. Register of Deeds, 49 O.G. (3) 935; Sec. 55 of ACT No. 496, cited in Roco, et al vs. Gimeda, 104 Phil. 1011 (1958).

^[4] L-20707 Agcanas vs. Nagum, 32 SCRA 298, 305-306 (1970).