G.R. No. L-19309 - San Buenaventura vs. Municipality of San Jose

This case arises from an appeal in Civil Case No. 4860 in the Court of First Instance of Camarines Sur.
The petitioner-appellee, Vicente San Buenaventura, challenged the validity of certain municipal resolutions affecting the lease of fishery zones A, B, and C in the municipal waters of San Jose, Camarines Sur.

On August 7, 1959, the Municipal Council of San Jose conducted a public bidding for the lease of fishery zones designated for catching “bangus” fry.
Maximino Abragan was declared the highest bidder based on his bid of P550.00 and was consequently awarded the lease for the designated fishing zones.
Maximino Abragan immediately began exercising the rights as lessee of the fishery zones.

On September 10, 1959, Maximino Abragan submitted a letter requesting an extension of his lease, which was originally set to expire on December 31, 1959.
Acting upon this request, on November 17, 1959, the Municipal Council adopted Resolution No. 75, extending the lease from December 31, 1959, to June 30, 1960.

Following his election as municipal vice-mayor, Maximino Abragan assigned his extended lease rights to Stanley Pena on December 15, 1959 for a consideration of P550.00.
On the same day, the Municipal Council:

Passed Resolution No. 79, approving the assignment of lease rights from Maximino Abragan to Stanley Pena.
Adopted Resolution No. 80, which extended the lease granted to the new lessee (Stanley Pena) for a period of five years beginning on July 1, 1960, at a yearly rental of P550.00.

Later on December 28, 1959, the Provincial Board of Camarines Sur approved Resolutions Nos. 79 and 80.

Vicente San Buenaventura, a resident and an interested party desiring to acquire the lease rights through a public bidding, filed a petition for declaratory relief.
The petitioner contended that:

Resolution No. 75 was illegal because it extended the lease without a public bidding.
Resolution No. 79 was void as it approved an assignment arising from an illegal extension.
Resolution No. 80 was null for extending the lease for five years without a public bidding and without the required prior authority from the Provincial Board.

Resolution No. 75 merely fixed the term of the lease to a period not exceeding one year.
Resolution No. 79 confirmed the valid assignment of the lease rights.
Resolution No. 80 was a permissible extension of the lease already granted under Resolution No. 75 and was duly approved by the Provincial Board.
All actions fell within the powers of the Municipal Council in issuing such resolutions.

The Court of First Instance applied Sections 2321, 2323, and 2319 of the Revised Administrative Code of 1917 (as amended) and declared Resolutions Nos. 75 and 80 null and void.
The lower court reasoned that by extending the lease without a subsequent public bidding, the Municipal Council violated statutory requirements governing the modification and extension of fishery leases.
The invalidity of Resolution No. 75 automatically rendered Resolution No. 79 of no legal effect.

Respondents-appellants contended that the petitioner’s failure to notify the Provincial Fiscal pursuant to Rule 66, Section 5 of the Rules of Court should have led to the dismissal of the petition.
This contention was raised for the first time on appeal and was not acted on by the lower court.

Whether the Municipal Council of San Jose had the legal authority to extend the lease of fishery zones A, B, and C without holding a new public bidding.

Specifically, whether Resolution No. 75, which extended the lease to June 30, 1960, was valid given that the lease was originally awarded for a term ending December 31, 1959.

Whether the subsequent resolutions (Resolution No. 79 approving the assignment and Resolution No. 80 extending the lease for five years) are valid or rendered null by virtue of the illegal extension in Resolution No. 75.

Whether the assignment of lease rights from Maximino Abragan to Stanley Pena was legal in view of the preceding illegal extension.
Whether the five-year extension granted in Resolution No. 80 complied with statutory requirements, including the need for public bidding.

Whether the petitioner’s failure to notify the Provincial Fiscal in compliance with Rule 66, Section 5 of the Rules of Court (now Section 4 of Rule 64 of the Revised Rules of Court) should render his petition jurisdictionally defective and subject to dismissal.