G.R. No. L-75569 September 28, 1988
BOARD OF LIQUIDATORS, petitioner, vs. COURT OF APPEALS and RODOLFO SANTOS, respondents.

FACTS

The case involves Lot 7, Block 30 in Davao City, a property formerly owned by a Japanese national and placed under the administration of the petitioner Board of Liquidators after WWII. Reynaldo Manalili applied to acquire the lot, but private respondent Rodolfo Santos opposed, claiming continuous possession and occupation, and alleging Manalili was never in possession. Despite the opposition, the Board awarded the lot to Manalili, executing a deed of absolute sale on December 16, 1981. The deed was registered, and Transfer Certificate of Title No. T-86414 was issued to the Manalili spouses on January 6, 1982.
On April 26, 1982, Santos filed an action in the Court of First Instance (CFI) of Davao for reconveyance, damages, and/or annulment of title, alleging fraud and misrepresentation in Manalili’s procurement of the award and that no honest investigation was conducted on his protest. The Board moved to dismiss, arguing the court lacked jurisdiction to review its decisions and that Santos failed to exhaust administrative remedies. The CFI granted the motion and dismissed the complaint. Santos appealed to the Intermediate Appellate Court (IAC), which reversed the dismissal and remanded the case for trial on specific issues, including who has the better right of possession and whether the title should be annulled.

ISSUE

Whether the Regional Trial Court has jurisdiction over the subject matter of the complaint for annulment of title and reconveyance, and whether the private respondent failed to exhaust administrative remedies.

RULING

The Supreme Court denied the petition, affirming the IAC’s decision. The Court held that the Regional Trial Court properly acquired jurisdiction. While the Court’s prior ruling in Alvarez v. Board of Liquidators stated that courts are not authorized to review decisions of the Board, it also recognized that special civil actions like certiorari or prohibition would lie if there is an allegation of abuse of discretion or lack of jurisdiction. More critically, the environmental facts here are distinct from Alvarez. In this case, the Board’s award had been fully consummated, and a Torrens title had already been issued to the awardee, Manalili. Consequently, the property ceased to be part of the public domain and became private property.
Once a certificate of title is issued, the Director of Lands or the Board of Liquidators loses control and jurisdiction over the land. The appropriate remedy for the aggrieved party, Santos, was an action for reconveyance or an action to annul the title on the ground of fraud, which is essentially judicial in nature. Santos filed his complaint on April 26, 1982, well within the one-year period from the title’s issuance on January 6, 1982, allowed by law for reviewing a decree of registration on the ground of actual fraud. The doctrine of exhaustion of administrative remedies is inapplicable where the subject property is already private land and the question involved is judicial. The Court found it just and proper to remand the case to afford Santos his day in court to prove his allegations.