G.R. No. L-13456; January 30, 1960
IRINEO C. HAMOY, petitioner-appellant, vs. THE HONORABLE SECRETARY and UNDERSECRETARY OF AGRICULTURE AND NATURAL RESOURCES, THE HONORABLE EXECUTIVE SECRETARY, and NARCISO DE LA CALZADA, respondents-appellees.

FACTS

On April 19, 1934, Irineo C. Hamoy and Narciso de la Calzada executed an “Amicable Arrangement” before a Public Lands Inspector to settle their conflicting claims over a parcel of land. De la Calzada held Sales Application No. 9860, while Hamoy was a claimant. Under the agreement, Hamoy would quit his claim to the land described in De la Calzada’s application, provided De la Calzada amended his application to exclude a certain area. In return, Hamoy promised to pay De la Calzada P20.00 on or before September 30, 1934, for 15 coconut trees, with the condition that failure to pay would result in the return of the trees to De la Calzada. On July 30, 1934, the Assistant Director of Lands issued an order dropping the case and amending De la Calzada’s sales application in accordance with this arrangement, but noted it was not a recognition of Hamoy’s title to the excluded portion.
On February 27, 1951, Hamoy protested the inclusion of a portion (Lot 1) in the survey of De la Calzada’s land. On November 27, 1953, the Director of Lands ordered Lot 1 excluded from De la Calzada’s survey and upheld Hamoy’s claim, finding the lot was outside De la Calzada’s application and part of Hamoy’s claim. De la Calzada moved for reconsideration, seeking to set aside the 1934 amicable arrangement due to Hamoy’s failure to pay the P20.00. The Director of Lands denied the motion. De la Calzada appealed to the Secretary of Agriculture and Natural Resources.
On July 21, 1954, the Undersecretary of Agriculture and Natural Resources issued an order, finding it undisputed that Hamoy failed to pay the P20.00 as agreed. The Undersecretary ruled the agreement was no longer enforceable and should be considered rescinded. Consequently, the orders of the Director of Lands dated July 30, 1934 and November 27, 1953 were set aside. To determine the preferential right over the land, the Undersecretary ordered a formal investigation into the parties’ occupation, improvements, and other material points. Hamoy’s motion for reconsideration was denied, and he appealed to the President.
On February 10, 1955, the Executive Secretary, by authority of the President, affirmed the Undersecretary’s order. The Executive Secretary found that Hamoy did not pay the P20.00 as agreed, and since the 1934 Bureau order was based on that unfulfilled arrangement, it had lost force and effect. A formal investigation was deemed necessary. Hamoy’s subsequent urgent motion for reconsideration was denied, with the Executive Secretary noting additional grounds: De la Calzada continued occupying and improving the lot; Hamoy did not mind this possession from 1934 to 1950 and only protested in 1951; and De la Calzada had been in possession for over 20 years while Hamoy never possessed the land. The Executive Secretary concluded the 1934 arrangement and order did not become final.
Hamoy filed a petition for certiorari with the Court of First Instance of Zamboanga del Norte, which was dismissed. Hamoy appealed this decision.

ISSUE

Whether the respondent officials (the Undersecretary of Agriculture and Natural Resources and the Executive Secretary) acted with grave abuse of discretion in setting aside the previous orders of the Director of Lands and ordering a new investigation to determine the preferential rights of the parties over the land in dispute.

RULING

The Court found no grave abuse of discretion by the respondent officials and affirmed the lower court’s decision. The Undersecretary’s order to set aside the Director of Lands’ 1934 and 1953 orders and to conduct a formal investigation was based on the finding that Hamoy failed to comply with a condition (payment of P20.00) of the 1934 amicable arrangement upon which the 1934 order was based, and on the subsequent conduct of the parties which constituted abandonment of the agreement, rendering it rescinded and unenforceable. The Executive Secretary likewise did not act with grave abuse of discretion in affirming this order, as it was predicated on a similar finding that the facts warranted a formal investigation to determine which party had a better right to the land. The Court concurred with the reasoning that the failure to comply with the agreement and the subsequent conduct (including De la Calzada’s long-term possession) prevented the 1934 order from becoming final.