Facts:

• Ilvino Agalo-os and Gregorio Agalo-os are the plaintiffs-appellants.
• Respondents-appellees include the Intermediate Appellate Court, the Development Bank of the Philippines (DBP), and Julio Geroche.
• Consuelo Gonzales Agalo-os, the predecessor of the petitioners, was granted leasehold rights over a public land fishpond (Lot No. 2-1360 pt.) in Escalante, Negros Occidental.
• The lease was formalized under Fishpond Lease Application No. 719, which expired on December 31, 1965.
• Vicente and Consuelo Agalo-os secured a loan of P20,000.00 from the Rehabilitation Finance Corporation (now DBP) on November 11, 1955, to be repaid by August 23, 1965, with a 6% interest rate.
• The loan was documented through a promissory note, secured by an assignment of the leasehold rights, approved by the Secretary of Agriculture and Natural Resources.
• DBP deferred its right to take possession despite the loan maturing without payment.
• After the deaths of Vicente and Consuelo Agalo-os, Ilvino Agalo-os entered into a "Supplemental Agreement" with Julio Geroche on November 4, 1966, leasing the fishpond for ten years at an annual rental of P4,500.00, payable to DBP.
• Payments made by Geroche were insufficient to cover the outstanding obligation.
• On March 2, 1972, DBP took possession of the fishpond based on the assignment of leasehold rights.
• The petitioners filed a complaint against DBP and Geroche for reformation of the instrument and damages on May 23, 1972.
• The lower court dismissed the complaint, ruling that the lease had expired and that there was no cause of action.
• The Intermediate Appellate Court affirmed this decision, prompting the petitioners to appeal to the Supreme Court.

Issue:

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Ruling:

• The Supreme Court affirmed the decision of the Intermediate Appellate Court.
• The Court ruled that the leasehold rights had expired on December 31, 1965, and that the petitioners had no cause of action against the respondents.
• The Court upheld the lower court's finding that the ...(Unlock)

Ratio:

• The Supreme Court's decision was based on the factual findings that the leasehold rights had expired, as acknowledged by both parties in their stipulation of facts.
• The expiration of Fishpond Lease...continue reading