G.R. No. L-13385; April 28, 1960
SOCORRO KE. LADRERA, plaintiff-appellee, vs. THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, ET AL., defendants-appellants.

FACTS

Socorro Ke. Ladrera filed Sales Application No. V-1138 for Lot 7131-A, a ten-hectare public land in Davao. At the public auction, Ladrera’s initial bid was P50.00 per hectare. Magdaleno Aportadera submitted a higher bid of P980.00 per hectare. Ladrera, using the applicant’s privilege, matched Aportadera’s bid under protest. Later, Ladrera petitioned the Director of Lands to reduce the price back to his original P50.00 bid, arguing Aportadera’s bid was exorbitant and unreasonable. The Director granted Ladrera’s petition, rejected Aportadera’s bid as excessive, and awarded the lot to Ladrera at P50.00 per hectare. On Aportadera’s appeal, the Secretary of Agriculture and Natural Resources reversed the Director’s order. The Secretary ruled that Aportadera’s bid, being the highest, should be accepted, and Ladrera could only get the land if he matched it; otherwise, it would be awarded to Aportadera. Ladrera filed a certiorari action in the Davao court of first instance to annul the Secretary’s order, alleging abuse of discretion. The trial court ruled in favor of Ladrera, annulling the Secretary’s award. The Secretary and Aportadera appealed.

ISSUE

Did the Secretary of Agriculture and Natural Resources commit a grave abuse of discretion in awarding the public land to the highest bidder, Magdaleno Aportadera, instead of to the original applicant, Socorro Ke. Ladrera, at a significantly lower price?

RULING

No, the Secretary did not commit grave abuse of discretion. The Supreme Court reversed the decision of the lower court and dismissed Ladrera’s complaint.
The Court held that the Secretary’s decision to award the land to the highest bidder was in strict compliance with the explicit mandate of the Public Land Act (Commonwealth Act No. 141). Sections 24 and 26 of the law expressly require that disposable public lands be sold to the highest bidder at public auction. The Government’s role is to obtain the best possible price for public property, and the money collected is used for the benefit of the people. The Court found no legal basis for the trial court’s view that the Government’s policy was primarily “giving land to the landless” in the context of sales; such a policy is embodied in the Homestead provisions of the law, not in sales where the highest bidder rule prevails.
The Court rejected the allegation that Aportadera acted in bad faith merely by submitting a high bid to prejudice Ladrera. In a public bidding, the highest bidder naturally prejudices the losers, but this does not constitute bad faith or a ground for disqualification. The Secretary had found Aportadera’s bid to be reasonable considering the land’s high state of development (formerly part of a well-developed abaca landholding), easy accessibility, and potential value. The Court also noted that the Government would suffer a substantial loss of P9,300.00 if it accepted Ladrera’s lower bid instead of Aportadera’s, and a public officer is not authorized to effectively donate public property by selling it at a grossly inadequate price.
The procedural defenses of laches and failure to exhaust administrative remedies (by not appealing to the President) raised by Aportadera were not addressed by the Supreme Court, as the decision was resolved on the substantive merits.