Case Digest (G.R. No. L-14834)
Facts:
The case involves Tomas Alvarez and Francisco Basilio as plaintiffs and the Board of Liquidators, represented by Filomeno Kintanar (Chairman), Bartolome Fernandez, and Eladio Fernandez as defendants. The events leading to the case began with a sale executed by the National Abaca and Other Fibers Corporation (NAFCO) in favor of Tomas Alvarez for Lot No. 52 of the Daliaon Plantation. On September 19, 1956, the Board of Liquidators issued a resolution canceling this sale and declaring the lot forfeited, awarding a portion to another individual, Zacarias Alfafara, and declaring the remaining portion vacant for disposal. The plaintiffs filed a complaint in the Court of First Instance of Davao, presided over by Hon. Wenceslao L. Fernan, seeking to annul the Board's resolution. They argued that the Board lacked the authority to cancel the sale and that the administrative investigation conducted was biased and denied them due process. The defendants moved to dismiss the case, cla...
Case Digest (G.R. No. L-14834)
Facts:
Background of the Case
- The case involves a dispute over the sale of Lot No. 52 of the Daliaon Plantation, which was originally sold by the National Abaca and Other Fibers Corporation (NAFCO) to Tomas Alvarez.
- The Board of Liquidators, tasked with disposing of NAFCO lands, cancelled the sale to Alvarez and ordered the forfeiture of his payments. The Board also awarded a portion of the lot to Zacarias Alfafara and declared the remaining portion vacant and disposable by lottery.
Administrative Investigation
- A protest was filed against the sale to Alvarez, leading to an administrative investigation conducted by the Board of Liquidators.
- Alvarez and Francisco Basilio (his attorney-in-fact) objected to the investigation, claiming partiality of the investigator, Atty. Anacleto K. Bajenting, and requested deferment pending the resolution of a related civil case (Civil Case No. 1303).
- Despite their objections, the Board proceeded with the investigation ex parte (without Alvarez's participation) and found that Alvarez was never in possession of the land and was acting as a dummy for Basilio, who was disqualified from acquiring another lot.
Stipulation of Facts
- The parties submitted a stipulation of facts, which included:
- Notice of the protest was given to Alvarez and Basilio.
- Alvarez and Basilio refused to participate in the investigation, citing the pending civil case.
- The Board proceeded with the investigation and recommended the cancellation of the sale to Alvarez.
- Alvarez had only paid the first two installments of the purchase price and defaulted on subsequent payments.
Trial Court Decision
- The Court of First Instance of Davao ruled in favor of Alvarez and Basilio, declaring that the Board of Liquidators had no authority to cancel the sale and that the cancellation violated Alvarez's right to due process.
Issue:
- Whether the Court of First Instance had jurisdiction to try the case and issue an enforceable order against the Board of Liquidators.
- Whether the plaintiffs had exhausted all available administrative remedies before filing the action.
- Whether the Board of Liquidators had the authority to cancel the sale to Alvarez.
- Whether the sale to Alvarez should be cancelled for breach of contract.
- Whether the complaint should be dismissed.
Ruling:
- The Supreme Court reversed the decision of the Court of First Instance and dismissed the action. The Court held:
- The Court of First Instance lacked jurisdiction to directly annul the Board of Liquidators' decision. The proper remedy would have been a special civil action (certiorari or prohibition) if there was an allegation of abuse of discretion or lack of jurisdiction.
- The plaintiffs failed to exhaust administrative remedies before filing the action.
- The Board of Liquidators had the authority to cancel the sale to Alvarez, as the "contract of sale" was merely an application subject to revocation if the applicant failed to meet the qualifications.
- The Board's cancellation of the sale was justified, as Alvarez was found to be a dummy for Basilio, who was disqualified from acquiring another lot.
Ratio:
- Jurisdiction of Courts Over Administrative Decisions: Courts cannot directly review or annul decisions of administrative bodies like the Board of Liquidators unless there is an allegation of abuse of discretion or lack of jurisdiction. The proper remedy is a special civil action (certiorari or prohibition).
- Exhaustion of Administrative Remedies: Plaintiffs must exhaust all available administrative remedies before seeking judicial intervention.
- Authority of the Board of Liquidators: The Board has the authority to cancel sales or applications if the applicant fails to meet the qualifications or comply with the law. The "contract of sale" in this case was not a final sale but an application subject to investigation and revocation.
- Due Process in Administrative Proceedings: While due process must be observed in administrative proceedings, the Board's decision to proceed with the investigation ex parte was justified, as Alvarez and Basilio refused to participate despite being given multiple opportunities.