G.R. No. L-28021 December 15, 1977
JULIAN SANTULAN (substituted by his heirs) vs. THE EXECUTIVE SECRETARY, et al., and ANTONIO LUSIN (substituted by his heirs).

FACTS

The case involves a protracted dispute over a 4.5-hectare foreshore land in Kawit, Cavite. Petitioner Julian Santulan, owner of the adjacent upland (Lot No. 986), claimed the foreshore was formed by alluvial deposits and applied for a lease in 1942. He made improvements, declared the land for taxation, and paid realty taxes. Respondent Antonio Lusin also applied for a lease, claiming possession since 1920 and having introduced his own improvements. The Director of Lands, in a 1951 decision, ruled in favor of Santulan, recognizing his preferential riparian rights as the upland owner and rejecting Lusin’s application.
Lusin appealed to the Secretary of Agriculture and Natural Resources, who reversed the Director of Lands’ decision in 1953, favoring Lusin. Santulan then appealed to the Office of the President. The Executive Secretary, by authority of the President, issued a decision in 1954 that reversed the Secretary’s ruling. However, this 1954 decision did not finally award the land to Santulan. Instead, it directed that the land be publicly bid upon, with the highest bidder obligated to pay Lusin for his improvements. Santulan appealed this 1954 Executive Secretary decision to the Court of Appeals, which certified the case to the Supreme Court.

ISSUE

Whether the Executive Secretary, acting for the President, committed a grave abuse of discretion in his 1954 decision ordering a public bidding for the lease of the disputed foreshore land instead of awarding it to Santulan based on his preferential riparian right.

RULING

The Supreme Court affirmed the decision of the Executive Secretary, finding no grave abuse of discretion. The legal logic rests on the nature of the land and the scope of administrative discretion. The Court confirmed that the disputed area is foreshore land, part of the public domain, and not an alluvial addition to Santulan’s private property. As public land, its disposition is governed by statute and lies within the primary jurisdiction of the Executive Department, specifically the Director of Lands, subject to review by the Department Secretary and the President.
While the Court acknowledged that an upland owner has a preferential right to a lease of adjacent foreshore under administrative regulations (like Lands Administrative Order No. 7-1, Section 32), this right is not absolute. The granting of such a lease remains a privilege contingent upon the discretion of the competent authorities. The Executive Secretary’s decision to order a public bidding was a valid exercise of this administrative discretion. The directive ensured the land would be leased to maximize public benefit, while also protecting Lusin’s investment by requiring compensation for his improvements. The Court held that absent a clear showing of capricious or whimsical exercise of power, which was not present, the judicial branch cannot substitute its judgment for the administrative determination made within the bounds of applicable laws.