G.R. Nos. L-8036, L-8037 and L-8038 December 20, 1955
Gabriel Marukot, plaintiff-appellee, vs. Amado Jacinto and the Director of Lands, defendants-appellants. / Lorenzo Baltazar, plaintiff-appellee, vs. Amado Jacinto and the Director of Lands, defendants-appellants. / Felipe Baisa, plaintiff-appellee, vs. Amado Jacinto and the Director of Lands, defendants-appellants.

FACTS

Lots Nos. 35-B, 35-D, and 35-E are portions of Lot No. 35, Block No. 12 of the Tambobong Estate in Malabon, Rizal, with a total area of about 500 square meters. Gabriel Marukot possessed Lot 35-B (100 sq.m.) since 1940, Felipe Baisa possessed Lot 35-D (40 sq.m.) since 1946, and Lorenzo Baltazar possessed Lot 35-E (70 sq.m.) since 1944, each residing with their families in houses built on these lots. The Government purchased the Tambobong Estate from the Roman Catholic Church on December 31, 1947, under Commonwealth Act No. 539 . Defendant Amado Jacinto applied to purchase the entire Lot No. 35, claiming possession as a lessee who paid rentals to the former owners. The plaintiffs filed oppositions to Jacinto’s application regarding the portions they occupied. The Bureau of Lands, which took over from the Rural Progress Administration, dismissed the oppositions and adjudicated the entire Lot No. 35 to Jacinto on December 22, 1951. The plaintiffs then filed separate actions in the Court of First Instance of Rizal to annul this adjudication and to declare their right to purchase their respective occupied lots. After a joint trial, the trial court rendered judgment in favor of the plaintiffs, declaring the Bureau of Lands’ adjudication null and void, declaring each plaintiff entitled to purchase their respective lot, and ordering the Director of Lands to approve their applications. Both Amado Jacinto and the Director of Lands appealed. The Court of Appeals certified the cases to the Supreme Court, as the controversy presented a purely legal question.

ISSUE

Who is entitled to preference in the purchase of Lots 35-B, 35-D, and 35-E under Commonwealth Act No. 539 : the plaintiffs-appellees (Gabriel Marukot, Felipe Baisa, and Lorenzo Baltazar) who are sublessees and actual occupants, or the defendant-appellant Amado Jacinto who is the lessee but not in actual possession?

RULING

The Supreme Court affirmed the trial court’s decision, ruling in favor of the plaintiffs-appellees. The Court held that the appellees are bona fide occupants within the meaning of Commonwealth Act No. 539 , as they had their respective houses on the lots and there was no showing they were ordered to vacate before or after the government’s acquisition. The Court distinguished these cases from prior rulings (Bernardo v. Bernardo and Grande v. Santos/Josef v. Santos) by noting that here, the appellees’ possession was not merely tolerated or charitable, they had not sold their houses to the lessee, and they had not been required to vacate. Furthermore, the effect of the decision accommodated both the lessee (Jacinto) and the occupants, as Jacinto would still receive approximately 300 square meters of the original 500-square-meter lot. The Court also rejected the appellants’ argument on the exhaustion of administrative remedies, stating the matter did not fall under the Public Land Act and the alleged remedy was not a condition precedent to judicial action.