G.R. No. L-16287; October 27, 1961
JULIAN DE LEMOS, plaintiff-appellant, vs. MANUEL E. CASTAÑEDA, ET AL., defendants-appellees.

FACTS

Julian de Lemos, a bona fide occupant since 1938 of a lot within the Nuestra Señora de Guia Estate in Tondo, initiated this action. The estate was acquired by the Government under Commonwealth Act No. 539 for subdivision and resale to occupants. The contested 12-square-meter portion of land, claimed by De Lemos, was included in the subdivision survey as part of Lot 42, occupied by Hermogenes Pagsisihan. Following a dispute, the Land Tenure Administration (LTA) issued an order on March 13, 1956, finding De Lemos without right to the portion and ordering him to vacate. His motion for reconsideration was denied. The LTA subsequently executed a deed of sale for Lot 42 in favor of Pagsisihan, leading to the issuance of a transfer certificate of title.
De Lemos later filed a complaint with the LTA seeking modification of the award to Pagsisihan, but it was dismissed on January 7, 1958, for failure to prosecute and on the ground that the LTA had lost jurisdiction. De Lemos then filed the present court action. The Court of First Instance of Manila dismissed his amended complaint, ruling that he failed to exhaust administrative remedies by not appealing the LTA orders to the Office of the President.

ISSUE

Whether the lower court correctly dismissed the complaint for failure to exhaust administrative remedies.

RULING

The Supreme Court reversed the dismissal order. The legal logic is anchored on the established exception to the doctrine of exhaustion of administrative remedies. The Court consistently held that this doctrine does not apply to disputes over land originally owned by private parties and later acquired by the Government for resale to tenants, as in cases involving the Tambobong Estate acquired from the Archbishop of Manila (Marukot vs. Jacinto, et al.). The principle of requiring exhaustion is confined to controversies arising from the disposition of disposable public lands, not to cases involving private lands purchased by the Government.
Here, the Nuestra Señora de Guia Estate was similarly acquired by the Government from a private owner. Therefore, the dispute between De Lemos and Pagsisihan over the awarded lot falls within the recognized exception. Since the land is not public domain but formerly private property acquired for redistribution, the rule on prior exhaustion of administrative appeals to the Office of the President is inapplicable. De Lemos was thus entitled to seek judicial relief directly. The records were remanded to the court of origin for further proceedings.