MUNICIPALITY OF PAOAY v. MANAOIS
G.R. No. L-3485, June
30, 1950
Facts:
The
municipality of Paoay leased 6 fishery lots to Francisco V. Duque for a period
of four years. However, Duque was not able to comply with the terms of the
lease contract; hence, the municipality approved a resolution confiscating said
fishery lots and advertised its lease for public bidding.
TeodoroManaois,
being the highest bidder, was awarded the lease. However, Manaois was not able
to exercise his right to possession because Duque continued to claim possession
over the properties and despite the appeal of Manaois to the Municipality of
Paoay to put him in possession and the efforts of the municipality to oust
Duque, Duque succeeded in continuing in his possession and keeping Manaois and
his men out.
Manaois
brought an action against the Municipality of Paoay to recover the sum paid by
him for the lease of the fishery lots plus damages. Court of First Instance of
Pangasinan ruled in his favor. A writ of execution and attachment were issued
to enforce the judgment. The municipality filed a petition asking for the
dissolution of that attachment of levy of the properties which was denied by
the CFI.
The
municipality filed a petition for certiorari with the writ of preliminary injunction,
asking that the order of the CFI be reversed and that the attachment of the
properties of the municipality be dissolved. The municipality contended that the properties attached by the sheriff for purposes of
execution are not subject to levy because they are properties for public use.
Issue:
WON
fishery or municipal waters of the town of Paoay or its usufruct may be levied
upon and subject to execution?
Held:
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 execution. The same rule applies to municipal
funds derived from patrimonial properties, for instance, it has been held
that shares of stocks held by municipal corporations are subject to execution.
If this is true, with more reason should income or revenue coming from these
shares of stock, in the form of interest or dividends, be subject to execution.
The fishery or municipal waters of the town of Paoay,
Ilocos Norte, 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
subject to execution. In the first place, they do not belong to the
municipality. They may well be regarded as property of State. What 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 2321
of the Revised Administrative Code.
Now, is this particular usufruct of the
municipality of Paoay over its municipal waters, subject to execution to
enforce a judgment against the town? No. First, it is not a usufruct based on
or derived from an inherent right of the town. It is based merely on a grant
made by the Legislature. These marine waters are ordinarily for public
use, open to navigation and fishing by the people. The municipality of
Paoay is not holding this usufruct or right of fishery in a permanent or
absolute manner so as to enable it to dispose of it or to allow it to be taken
away from it as its property through execution. The Legislature thru section
2321 of the Administrative Code, as already stated, saw fit to grant the
usufruct of said marine waters for fishery purpose, to the towns bordering said
waters. Said towns have no visited right over said marine waters. The
Legislature, for reasons it may deem valid or as a matter of public policy, may
at any time, repeal or modify said section 2321 and revoke this grant to
coastal towns and open these marine waters to the public. Or the Legislature
may grant the usufruct or right of fishery to the provinces concerned so that
said provinces may operate or administer them by leasing them to private
parties.All this only goes to prove that the municipality of Paoay is not
holding this usufruct or right of fishery in a permanent or absolute manner
so as to enable it to dispose of it or to allow it to be taken away from it as
its property through execution.
Second,
if this were to be allowed and this right sold on execution, the buyer would
immediately step into the shoes of the judgment-debtor municipality. Such buyer
presumably buys only the right of the municipality. He does not buy the fishery
itself nor the municipal waters because that belongs to the State. All that the
buyer might do would be to let out or rent to private individuals the fishery
rights over the lots into which the municipal waters had been parceled out or
divided, and that is, after public bidding. Then,
we shall have a situation rather anomalous to be sure, of a private individual
conducting public bidding, renting to the highest bidders fishery lots over
municipal waters which are property of the State, and appropriating the results
to his own private use. The
impropriety, if not illegality, of such a contingency is readily apparent. The
situation imagined implies the deprivation of the municipal corporation of a
source of a substantial income, expressly provide by law. Because of all this,
we hold that the right or usufruct of the town of Paoay over its municipal
waters is not subject to execution.
But we hold that the revenue or income coming from the
renting of these fishery lots is certainly subject to execution. It may be
profitable, if not necessary, to distinguish this kind of revenue from that
derived from taxes, municipal licenses and market fees are provided for and
imposed by the law, they are intended primarily and exclusively for the purpose
of financing the governmental activities and functions of municipal
corporations. Not so with the income derived from fisheries. In the first
place, the usufruct over municipal waters was granted by the Legislature merely
to help or bolster up the economy of municipal government. This kind of revenue
is not indispensable for the performance of governmental functions. In
the second place, the amount of this income is far from definite or fixed. It
depends upon the amounts which prospective bidders or lessees are willing to
pay. In other words, too many municipalities engaged in this business of
letting out municipal waters for fishing purposes, it is a sort of sideline,
so that even without it the municipality may still continue functioning and
perform its essential duties as such municipal corporations.
We
call this activity of municipalities in renting municipal waters for fishing
purposes as a business for the reasons that the law itself allowed said
municipalities to engage in it for profit. And it is but just that a town so
engaged should pay and liquidate obligations contracted in connection with said
fishing business, with the income derived therefrom.
In
conclusion, we hold that the fishery lots numbering about forty in the
municipality of Paoay, mentioned at the beginning of this decision are not
subject to execution. For this reason, the levy and attachment made by the
Provincial Sheriff of Ilocos Norte of theses fishery lots is void and the order
of the Court of First Instance of Pangasinan insofar as it failed to dissolve
the attachment made on these lots is reversed. However, the amount of P1,712.01
in the municipal treasury of Paoay representing the rental paid by Demetrio
Tabije on fishery lots let out by the municipality of Paoay is a proper subject
of levy, and the attachment made thereon by the Sheriff is valid.
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