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...

Facts:

Background of the Case

• The action arose from a decision by the Court of First Instance of Davao declaring the Board of Liquidators (consisting of Filomeno Kintanar as Chairman, Bartolome Fernandez, and Eladio Fernandez as members) had no authority to cancel a sale executed by the National Abaca and Other Fibers Corporation (NAFCO) in favor of Tomas Alvarez.
• The Board had issued Resolution No. 8104, dated September 19, 1956, which cancelled the sale and ordered the disposition of a lot (Lot No. 52 of the Daliaon Plantation, noted as Lot B in Tinio’s Plan Z) in favor of other persons.
• The cancellation further involved the forfeiture of payments and improvements made by Alvarez, awarding a portion of the lot to Zacarias Alfafara, and declaring a remaining portion vacant and subject to disposal by lottery.

Proceedings and Pleadings

• The plaintiffs (Tomas Alvarez and Francisco Basilio) initiated an action in the Court of First Instance seeking annulment of the Board’s resolution, alleging that the administrative investigation was conducted by a partial investigator and in contravention of due process.
• The defendants moved to dismiss the action on several grounds, arguing that the court did not have jurisdiction over the subject matter, that proper administrative remedies had not been exhausted, and that the complaint did not state a cause of action.
• Despite the dismissal motion, the suit continued, with the parties submitting a long stipulation of facts containing detailed information about the transaction, subsequent administrative proceedings, and the conduct of investigations.

Stipulated Facts and Evidence

• Several key documents and exhibits were tendered by both parties:
• Protest against the sale to Alvarez (Exhibits 1, 1-A).
• Resolution by the Board annulling the sale (Exhibit 2/9-A).
• Various notices, letters, and investigative reports covering events from September 1954 to September 1956 (Exhibits 3-B, 3-C, 3-D, 4, 5, 6, 7, E, F, G, H, J, 10, K).
• The facts acknowledged that:
• The plaintiffs were duly notified of the protest and subsequent administrative investigation.
• The plaintiffs, especially Alvarez, objected to the investigation on the grounds of partiality of the investigating officer, Atty. Anacleto K. Bajenting.
• Alvarez had defaulted on subsequent installment payments and was not in possession of the contested lot at the time of the sale.
• The investigation, conducted in his absence, revealed that Alvarez was essentially a dummy for Francisco Basilio and that he was ineligible for acquiring more than one lot from the Board.

Procedural History and Contentions

• The trial court rendered a decision setting aside the resolution of the Board and dismissing the suit, holding that the Board of Liquidators had no jurisdiction to cancel the sale executed by NAFCO in favor of Alvarez.
• The decision emphasized that procedural due process was violated when the investigation was conducted ex parte without affording Alvarez the opportunity to present his side.
• The defendants later appealed on multiple issues concerning jurisdiction, exhaustion of remedies, the scope of the Board’s power, and errors in the trial court’s ruling.

Issue:

Jurisdiction over the Subject Matter

• Whether the court had the power to issue an order enforceable against the Board of Liquidators regarding the cancellation of the sale.
• Whether the court should entertain a case involving the disposition of lands administered by the Board.

Exhaustion of Administrative Remedies

• Whether the plaintiffs had exhausted all available administrative remedies before instituting the action.
• Whether the proper remedy should have been an action for certiorari or prohibition rather than a direct civil action.

Scope of the Board’s Powers

• Whether the Board of Liquidators possessed the authority under Republic Act No. 477 to cancel the contract of sale.
• Whether the earlier decision to cancel the sale, including the forfeiture of payments and dispossession of the lot, was valid given the procedural and substantive requirements.

Due Process Concerns

• Whether the administrative investigation, particularly the appointment and actions of Atty. Anacleto K. Bajenting, violated the due process rights of the plaintiff, Tomas Alvarez.
• Whether conducting the investigation in the absence of Alvarez deprived him of the opportunity to be heard prior to the cancellation of the sale.

Other Related Contentions

• Errors alleged by the defendants regarding the trial court’s powers and the appropriate remedy when dealing with administrative actions of the Board.
• The impact of Alvarez’s failure to fully pay the installments and the contention that his purchase was merely an application subject to qualification and investigation.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)