G.R. No. 121587 . March 9, 1999.
SOLEDAD DY, doing business under the name and style RONWOOD LUMBER, petitioner, vs. COURT OF APPEALS and ODEL BERNARDO LAUSA, respondent.

FACTS

On July 1, 1993, Task Force Kalikasan, a composite team created by the Mayor of Butuan City, intercepted two truckloads of lumber at a checkpoint. The trucks failed to stop and were later apprehended. The caretaker of the compound where they were found could not produce documents proving the legality of the lumber. Consequently, a DENR forester issued a temporary seizure order. Following administrative procedures, including a notice of confiscation and a lack of claimants, the DENR Regional Director ordered the forfeiture of the lumber and the vehicles in August 1993 pursuant to P.D. No. 705, the Revised Forestry Code.
More than two months after the forfeiture, petitioner Soledad Dy, claiming ownership of the lumber, filed a suit for replevin in the Regional Trial Court of Butuan City to recover the property. The trial court issued a preliminary writ of replevin. Respondent Odel Bernardo Lausa, a member of the task force, moved to dismiss the suit, arguing that the lumber, having been forfeited by the DENR, was under its administrative custody and that Dy should have first exhausted administrative remedies.

ISSUE

Whether the Regional Trial Court properly took cognizance of the replevin suit for the recovery of lumber that had been administratively seized and forfeited by the DENR under the Revised Forestry Code.

RULING

The Supreme Court ruled that the trial court could not properly take cognizance of the replevin suit. The Court affirmed the decision of the Court of Appeals setting aside the trial court’s orders, with the modification that the complaint be dismissed. The core legal principle applied is the doctrine of exhaustion of administrative remedies. Before seeking judicial intervention, a party must first avail themselves of all remedies within the administrative machinery. Section 8 of P.D. No. 705 provides that actions of the DENR Director are subject to review by the Department Secretary, whose decision becomes final after a period.
The lumber had been seized and forfeited through a valid administrative process under the forestry laws. By filing a replevin suit directly in court without first challenging the forfeiture through the administrative review process provided by law, petitioner failed to exhaust administrative remedies. This failure was a fatal jurisdictional defect, rendering the court action premature. The DENR had rightful custody over the forfeited property, and any claim for its recovery must first be addressed to that agency. Consequently, the trial court should have dismissed the replevin suit for lack of cause of action. The Court deemed it unnecessary to address petitioner’s other assigned errors regarding verification and counterbond, as these were premised on the incorrect assumption that the trial court had jurisdiction.