005 Municipality of Paoay vs Manaois.docx

MUNICIPALITY OF PAOAY vs MANAOIS G.R. No. L-3485

June 30, !50

F"#$s: F"#$s: The municipality of Paoay has for many years been leasing fishery lots on municipal waters. These waters have been parceled out in lots and rented after public bidding to the highest bidders. The municipality leased leased 6 fishery lots to Francisco V. Duque for a period of four years. owever! Duque was not able to comply with the terms of the lease lease contract" contract" therefore! therefore! the municipality municipality approved a resolutio resolution n confiscat confiscating ing said fishery lots from Duque and advertised the lease of its fishery lots for public bidding. Teodoro #anaois being the highest bidder for said lots! was awarded the lease. owever! #anaois was not able to e$ercise his right to possession because Duque continued to claim possession over the properties and despite the appeal of #anaois to the #unicipality of Paoay to put him in possession and the efforts of the municipality to oust Duque! Duque succeeded in continuing in his possession and %eeping #anaois and his men out. #anaois brought an action against the #unicipality of Paoay to recover the sum paid by him for the lease of the fishery lots plus damages. e obtained &udgment in his favor in the 'ourt of First (nstance of Pangasinan! which decision has long become final. The writ of e$ecution and the attachment and were issued and effected to enforce the &udgment. The municipality filed a petition for certiorari  with  with the writ of preliminary in&unction! as%ing that the order  of the 'F( be reversed and that the attachment of the properties ) of the municipality be dissolved. Issue: Issue: *+, fishery or municipal waters of the town of Paoay or its usufruct may be levied upon and sub&ect to e$ecution%e&': %e&': ,o. Properties for public use held by municipal corporations are not sub&ect to levy and e$ecution. ven public revenues of municipal corporations destined for the e$penses of the municipality are also e$empt from the e$ecution. The reason behind this is that they are held in trust for the people! intended and used for the accomplishment of the purposes for which municipal corporations are created! and that to sub&ect said properties and public funds to e$ecution would materially impede! even defeat and in some instances destroy said purpose. Property however! which is patrimonial and which is held by municipality in its proprietary capacity is treated as the private asset of the town and may be levied upon and sold under an ordinary e$ecution. The same rule applies to municipal funds derive derived d from from patrim patrimoni onial al proper propertie ties! s! for instan instance! ce! it has been been held held that that shares shares of stoc% stoc%s s held held by munici municipal pal corporations are sub&ect to e$ecution. The fishery or municipal waters of the town of Paoay! (locos ,orte! which had been parceled out or divided into lots and later let out to private persons for fishing purposes at an annual rental are not sub&ect to e$ecution. (n the first place! place! they do not belong belong to the municipali municipality ty.. They may well be regarded regarded as property property of the /tate. *hat the municipality of Paoay hold is merely what may be considered the usufruct or the right to use said municipal waters.

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0epublic of the Philippines SUPR(M( COURT #anila , 12,' G.R. No. L-3485

June 30, !50

T%( MUNICIPALITY OF PAOAY, ILOCOS NORT(,  petitioner! vs. T(O)ORO MANAOIS "n' (ULOGIO F. )( GU*MAN, Ju'+e o $e Cou$ o F/s$ Ins$"n#e o P"n+"s/n"n,respondents. First Assistant Solicitor General Roberto A. Gianzon and Solicitor Pacifico P. de Castro for petitioner. Primicias, Abad, Mencias and Castillo for respondents. MONT(MAYOR,

J.

Teodoro #anaois having obtained a &udgment against the municipality of Paoay! (locos ,orte in civil case ,o. 3456 of the 'ourt of First (nstance of Pangasinan! udge De 7u8man of said province issued a writ of  e$ecution against the defendant municipality. (n compliance with said writ the Provincial /heriff of (locos ,orte levied upon and attached the f ollowing properties: 9) The amount of +ne thousand seven hundred twelve pesos and one centavo 9P)!;)5.4) in the #unicipal Treasury of Paoay! (locos ,orte! representing the rental paid by #r. Demetrio Tabi&e of a fishery lot belonging to the defendant municipality" 95 2bout forty fishery lots leased to thirty=! the Provincial Fiscal of (locos ,orte in representation of the municipality of Paoay! filed a petition in the 'ourt of First (nstance of Pangasinan as%ing for the dissolution of that attachment of levy of the properties above=! denied the petition for the dissolution of the attachment" a motion for reconsideration was also denied. (nstead of appealing from that order the municipality of Paoay has filed the present petition for certiorari  with the writ of preliminary in&unction! as%ing that the order of respondent udge dated +ctober 6! )=>6! be reversed and that the attachment of the properties of the municipality already mentioned be dissolved. The petitioner goes on the theory that the properties attached by the sheriff for purposes of e$ecution are not sub&ect to levy because they are properties for public use. (t is therefore necessary to ascertain the nature and status bac% a fe w years! specifically! to the year )=?;. (t seems that the municipality of Paoay is and for many years has been operating or rather leasing fishery lots on municipal waters. These waters have been parceled out in lots! either singly or in groups and let out or  rented after public bidding to the highest bidders! ordinarily! for a year! but sometimes! for a longer period of  time. +n 2pril >! )=?;! the municipality of Paoay entered into a contract with one Francisco V. Duque for the lease of fishery lots ?! >! @! 6! ;! and 3 at a rental of P)!5)3.;= per annum! for a period of four years from anuary )! )=?; to December ?)! )=>4. (n )=?3! the municipal council of Paoay approved a resolution confiscating said fishery lots on the ground that Duque had failed to comply with the terms of the lease contract. Thereafter! the municipality advertised the lease of its fishery lots for public bidding! including the lots above mentioned. Teodoro #anaois being the highest bidder f or said lots ? to 3! was awarded the lease t hereof 

as per resolution of the municipality council of Paoay of December )! )=?3. +n anuary )! )=?=! #anaois paid P5!45@ as rental for the said lots for the year )=?=. owever! when #anaois and his men tried to enter the property in order to e$ercise his rights as lessee and to catch fish! particularly bañgos fry! he found therein Duque and his men who claimed that he 9Duque was still the lessee! and despite the appeal of #anaois to the #unicipality of Paoay to put him in possession and the efforts of the municipality to oust Duque! the latter  succeeded in continuing in his possession and %eeping #anaois and his men out. #anaois brought an action against the #unicipality of Paoay to recover not only the sum paid by him for the lease of the fishery lots but also damages. e obtained &udgment in his favor in une! )=>4 in the 'ourt of First (nstance of Pangasinan! civil case ,o. 3456! which decision has long become final. The writ of e$ecution and the attachment and levy mentioned at the beginning of this decision were issued and effected to enforce the &udgment &ust mentioned. There can be no question that properties for public use held by municipal corporation are not sub&ect to levy and e$ecution. The authorities are unanimous on this point. This 'ourt in the case of Viuda de antoco !s. Municipal Council of "loilo 9>= Phil.! @5 after citing #anresa! the wor%s of #cAuillin and Dillon on #unicipal 'orporations! and 'orpus uris! held that properties for public use li%e truc%s used for sprin%ling the streets! police patrol wagons! police stations! public mar%ets! together with the land on which they stand are e$empt from e$ecution. ven public revenues of municipal corporations destined for the e$penses of the municipality are also e$empt from the e$ecution. The reason behind this e$emption e$tended to properties for public use! and public municipal revenues is that they are held in trust for the people! intended and used for the accomplishment of the purposes for which municipal corporations are created! and that to sub&ect said properties and public funds to e$ecution would materially impede! even defeat and in some instances destroy said purpose. Property however! which is patrimonial and which is held by municipality in its proprietary capacity is treated by great weight of authority as the private asset of the town and may be levied upon and sold under an ordinary e$ecution. The same rule applies to municipal funds derived from patrimonial properties! for instance! it has been held that shares of stoc%s held by municipal corporations are sub&ect to e$ecution. (f this is true! with more reason should income or revenue coming from these shares of stoc%! in the form of interest or dividends! be sub&ect to e$ecution- 9#cAuillin on #unicipal 'orporations! Vol. ?! par. ))64. The fishery or municipal waters of the town of Paoay! (locos ,orte! which had been parceled out or divided into lots and later let out to private persons for fishing purposes at an annual rental are clearly not sub&ect to e$ecution. (n the first place! they do not belong to the municipality. They may well be regarded as property of  /tate. *hat the municipality of Paoay hold is merely what may be considered the usufruct or the right to use said municipal waters! granted to it by section 5?5) of the 0evised 2dministrative 'ode which reads as f ollows: ). /'. 5?5). Grant of fis#er$ . B 2 municipal council shall have authority! for purposes of profit! to grant the e$clusive privileges of fishery or right to conduct a fish