G.R. No. 108338 - Sanado vs. Court of Appeals

October 28, 1969: Philippine Fisheries Commission issues Ordinary Fishpond Permit No. F-5810-X to Calixto Sañado covering 50 hectares in Monching, Siay, Zamboanga del Sur.
January 6, 1972: Sañado executes a deed of quitclaim of 20 hectares of the original 50 hectares in favor of his uncle and brother.

July 16, 1973: Sañado (First Party) and Simeon G. Nepomuceno (Second Party) enter into a “Contract of Fishpond Development and Financing” over 30 hectares:

Nepomuceno to undertake all development expenses, recover investments from pond products;
After cost recovery, to share net harvest for four years at 35% (Sañado) and 65% (Nepomuceno), renewable for another four years at Nepomuceno’s option.

July 18, 1973: Parties execute a handwritten modification excluding 10 hectares already developed by Sañado and requiring mutual agreement for any renewal.

September 28, 1979: Director of Fisheries and Aquatic Resources recommends conversion of Permit No. F-5810-X into a 25-year Fishpond Lease Agreement No. 3090 covering 26.7450 hectares.
October 8, 1979: Lease Agreement No. 3090 is issued to Sañado.
March 20, 1980: Nepomuceno waives his rights and interest in the fishpond area in favor of Edgar J. Chu.
March 28, 1980: Nepomuceno notifies the Bureau of Fisheries and Aquatic Resources of the financing/development contract and the extent of his development expenses.

July 17, 1981: Sañado files Civil Case No. 2085 for recovery of possession and damages, alleging:

Nepomuceno fully recovered investment by February 19, 1975 with pond earnings of ₱98,106.35 and excess cash of ₱10,701.10;
Failure to account or share net harvest (₱250,000 estimated) for the four-year sharing period (Feb. 19, 1975–Feb. 19, 1979).

January 28, 1985: Minister of Agriculture Salvador H. Escudero III orders cancellation of Lease No. 3090 and forfeiture of improvements; May 14, 1985 order gives Nepomuceno priority to apply and spares his improvements from forfeiture.
June 19, 1989: RTC renders judgment in favor of Sañado:

Orders restoration of possession;
Declares waivers null and void;
Orders payment of ₱168,000 (share, 1975–1979), rentals at ₱25,000 per annum (1979 onward), ₱100,000 attorney’s fees, and costs.

July 31, 1989: Office of the President (Deputy Executive Secretary Magdangal B. Elma) dismisses Sañado’s appeal, upholds cancellation of Lease No. 3090 for unauthorized transfers/subleases and failure to develop the required area under FAO No. 125.
September 11, 1992: Court of Appeals in CA-G.R. CV No. 23165 modifies the RTC decision, upholds monetary awards but reverses the order restoring possession, citing the Malacañang decision.

Whether the Court of Appeals erred in applying the July 31, 1989 quasi-judicial decision of the Office of the President in the pendency of Civil Case No. 2085.
Whether the July 31, 1989 administrative cancellation of Fishpond Lease Agreement No. 3090 constitutes a supervening event that precludes restoration of possession to Sañado.