These are petitions for a  writ  of certiorari filed on  18 October 1960 and 7 November 1960 to review an amended judgment rendered on 30 January 1960  by the  Court   of Appeals (CA-G.R. No. 8114-R; Annex E-l)  holding that Faustina  Lauchang is  entitled to  acquire by purchase the whole of  Lot No.  10, Block  2,  of the Tambobong Estate. As the judgment sought to be  reviewed deals with or includes  petitioners  in  both cases  but docketed separately, this  Court will render an opinion and judgment on both. In this  Court the petitioners in  G.R. No. L-17598 assign two  errors claimed to have  been  committed by  the Court of Appeals, to wit:

(1)  In applying1 the order of  succession established in Santiago vs. Cruz (98  Phil., 168), promulgated December  29, 1955, and in not finding that in the instant case there are good and  compelling reasons  to depart from said  order of   succession;  and

(2)  In not  declaring the appellants  herein  as  having the preferential right to buy the portions they respectfully   have been occupying  and still do occupy for twenty (20)  years, in the  least, and thus in revoking by its second decision (Annex E to petition) the grant it made in its first decision in favor of herein  petitioners.

The petitioner in G.R. No.  L-17694 assigns the following errors allegedly committed by the Court of Appeals:

I. The Honorable Court of Appeals  erred in  rigidly and strictly applying to the instant  case the order  of preference  enumerated In the cases of Fernando   Santiago, et  al., vs. Realeza Cruz, et  al., supra.

II. The Hon.  Court of  Appeals  erred in  not  holding that the order of preference, if ever there  is such  an order of preference, appearing in Section  1 of Commonwealth Act No. 539, is not mandatory but merely presuasive and  directory,  add in  not applying the doctrine laid down in the cases of Olimpio Gutierrez  vs. Miguel Santos, et al., 107 Phil.,  419 and Pascual, et  al., vs. Lucas, 51 Off. Gaz. Nos. 5, 2429.

III. The  Honorable Court  of Appeals erred in not holding that herein petitioner has   preferential right to buy that 82 square meters lot because of compelling reason.

IV. The  Honorable Court  of Appeals erred in not applying the Supreme Court decision in the cases of  Marukot vs. Jaeinto, et al., 98 Phil., 123.

V. The Honorable  Court of Appeals  erred in not applying the doctrine  of  exhaustion of  administrative remedies.

The findings of  the Court of Appeals are,  as follows:

"It appears that Lot No. 10, Block No. 2 of  the Tambobong Estate in the Municipality of Malabon, Province of Rizal, Phlippine Islands, was formerly leased  by the  Archbishop of  Manila to  one  Matea Suarez.  The lot contains  an aggregate area of 480 meters.

On September 11, 1906,  Matea Suarez sold her leasehold interest in the land for the  sum of P20O.0O to Anacleto Lauchang, father of  the   plaintiff-appellee  and  appellant  Faustina  Lauchang. When Anacleto died  in  1923,  his daughter, the  plaintiff, took over and since then has been  occupying  said property paying rents therefor to the Roman Catholic Archbishop  of Manila  up to  August 31, 1927 when further payment of rents was suspended because the Archbishop of Manila sold  the Tambobong Estate  to the Government  of the   Commonwealth of the  Philippines.

The  evidence  further  shows  that   Asuncion Hizon  had been occupying  82 square  meters  of the lot in question  in  the north-western portion since 1929;  Jaeinto Tiangco, 91 square meters  in the  southwestern  portion since 1938; and  Jose Lazaro,  113 square meters  in  the northeastern  portion since  1940.  Plaintiff   appellee and appellant is occupying the southwestern part of the lot containing an area of 194  square meters.  All of the  claimants-occupants have their respective  houses on the lot in question.

We entertain no doubt  that Asuncion  Hizon is a sub-lessee  of Faustina Lauchang, the  plaintiff (Exhs. D-2 and D-3). The finding of the  trial court  in this  regard is correct.

With respect to Jacinto, the evidence shows that at first  he used to pay Faustina Lauchang P1.00 per month until he connected plain- tiff's water pipe with his main water pipe in the middle of the year 1938.  Since  then Tiangco has not been paying any rental to the plaintiff.

As to Jose Lazaro, his testimony is to the effect  that he had been occupying the portion of 113 square meters  upon an annual  rent of P12.00.

We cannot give credence to plaintiff's testimony that  she merely tolerated the stay of Hizon, Tiangco and Lazaro out of  charity for she is not in a position so to act.  We conclude that all of the three are  sub-lessees of the plaintiff Faustina Lauchang, Now, under the law  do the parties  before us  have preferential rights to  purchase the portion which they respectively occupy?

*              *              *

*  * * Subsequent  study has revealed that both awards  are  violative of  the legislative intent and the  decision  of our Honorable Court in  the case of Fernando  Santiago,  et al.,  vs. Realeza Cruz, et al., G.R. Nos. L-8271-8272, promulgated on  December 29,  1955, which case is  on all fours with  the   instant case.

*              *              *

And, in the case of Santiago, et al., vs. Realeza Cruz, et al., supra, our  Hon. Supreme  Court said:

"The lots  herein litigated  are  portions of the  Tambobong Estate  situated in the municipality of  Malabon,  province of Rizal.  They  were  originally  leased  to Mrs.  Elisa E. Cayco up to January  14, 1944 when, for valuable  consideration, she sold her leasehold  rights over the lots  to Realeza Cruz. Prior to  this  transfer  Fernando  Santiago  already had his house erected on a portion of Lot No. 1, Block No.  19, while Francisco Samonte had  his   house erected on another portion of Lot 19, Block  No. 16,  and both were sub-lessees   of  Mrs.  Cayco to whom they had been paying nominal rentals.   After the transfer, both sub-lessees kept on paying the rentals to Realeza Cruz, except Fernando Santiago who stopped paying when the Government acquired  the  Tambobong  Estate.

*             *               *

 The next  question to be determined  refers  to the preference that  should be  observed in the allocation  of the lots in dispute among  their different   claimants  which  constitutes  the  root cause of the present controversy.   In approaching this  problem the first thing  to  be  considered  is   the meaning and  scope of the law  which  governs the administration  and   disposition  of the Tambobong Estate in favor of those whom the law contemplates to extend its beneficent provisions.  This law is Commonwealth Act No. 539. Section 1 of this Act provides that the home lots  into which the  lands acquired thereunder are to  be subdivided  to promote its objective shall be resold at reasonable prices  and under  such   terms and conditions as  may  be fixed 'to  their bona fide  tenants  or  occupants  or  private  individuals who will work the  lands themselves and who are  qualified  to acquire and own lands  in the Philippines. An analysis of this provision would at  once reveal that the intendment  of the law is to award the lots to  those who  may apply in the  order mentioned.  This enumeration denotes the preferential  rights the law wishes to accord to them.  Thus,  the first choice   is given to the  bona fide 'tenants', the second to the  'occupants' and the last to 'private  individuals'. And this enumeration  undoubtedly has been adopted considering the existing  social problem and the different situations  in which  the   claimants may be  found. This is the  order  of preference  followed by the  Director  of Lands  in awarding  the  lots to appellant whose status as a bona fide tenant is not disputed, and since this action is in accordance with the intendment and purpose of the law,  we see no plausible reason for disturbing it as we are now urged by the appellees.

The  foregoing interpretation  is further justified  by  a comparison of  the  provisions of Commonwealth Act No.  539, under which  the  Tambobong  Estate was  acquired, with those  of Commonwealth Act No. 20, which provided  for  the resale  of home sites acquired thereunder  at the time   of the approval  of the former Act.  Note  that while under  Commonwealth   Act No. 20 the  home lots are to be resold only to bona fide occupants, the Act   that had  superseded it,  Commonwealth  Act No.  539, modified  this provision  by  providing  three  groups  of  persons who may purchase  the  lots is  indicative of  the clear intent  of Congress with regard to the preferential rights  to be  accorded to tenants,  occupants and private individuals."  (Italic supplied.)

*             *               *

IN  VIEW OF  ALL  THE FOREGOING, we find ourselves constrained to modify  the   decision  appealed  from  by  (1)  declaring plaintiff-appellee and appellant Faustina Lauchang to have the  preferential right  to buy the whole  of Lot No. 10  of Black  No.  2 of the Tambobong Estate  and  (2) ordering the  Division  of Landed  Estates of the Bureau  of Lands, successor of the   Rural Progress Administration which was abolished by Executive  Order No.  376, the Land Tenure Administration, or  the agency or  instrumentality  of the Government concerned  to sell said lot to her."

The question raised by the parties was correctly decided by the Court of Appeals in its amended decision or judgment sought to be reviewed wherein the pertinent parts of the opinion of this  Court rendered in Santiago, et al., vs. Cruz, et al., supra are quoted.

The proposition advanced  by the petitioners that this Court should depart from the strict application of the order of preference laid down in the cases decided by it can not be sustained, because unlike in this case  where  the  respondent owns no  other realty  except an  inchoate right over the lot in litigation,  in the case of  Gutierrez  vs. Santos, supra the lessee had four (4)   lots the total area of which was 3,279 square meters,  aside from the then litigated lot, which was  more than sufficient to answer for the needs of the lessee and his family.   Furthermore, the 480 square meters lot being inadequate for the needs of an already growing family  of the  respondent (consisting of 7 children  all of  age and 7 grandchildren),  petitioners Lazaro and Tiangco bought or became co-owners of lots in Malabon, Rizal, as evidenced by TCT  No. 58148 and 61615, issued by the Register  of Deeds in and for   the province of Rizal.

The contention of the petitioners that the action brought in the   Court of First Instance of Rizal (Civil Case No. 911)  should have  been dismissed for  lack of cause of action, in view of  respondent's failure to exhaust  all   administrative remedies is untenable.   It is well to recall that the  lot, subject of  the litigation, is not a part of the public domain, but of private ownership acquired  by  the Government  for  resale to private persons, and for  that reason any aggrieved party  may bring an  action in court without the need of exhausting all administrative remedies.^[1]

The amended decision or judgment under review is affirmed, without pronouncement  as  to costs.

Bengzon, C. J., Bautista  Angelo, Labrador,  Concepcion, Paredes, Dizon, Regala, and Makalintal, JJ., concur.

 

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^[1] Santiago, et al. vs. Cruz, et al., 98 Phil. 168.