Municipality of Paoay v. Manaois
REITERATIONFacts
The Antecedents: Teodoro Manaois obtained a judgment against the Municipality of Paoay, Ilocos Norte, in Civil Case No. 8026 of the Court of First Instance of Pangasinan. This judgment stemmed from a dispute where Manaois was awarded the lease of certain fishery lots belonging to the municipality, but was prevented from taking possession by a prior lessee. The municipality failed to place Manaois in possession and did not return the rental payments made by Manaois. Procedural History: Following the finality of the judgment in Civil Case No. 8026, the respondent Judge Teodoro Manaois issued a writ of execution. The Provincial Sheriff of Ilocos Norte levied upon and attached two types of properties belonging to the Municipality of Paoay: funds in the municipal treasury representing rental payments for fishery lots, and approximately forty fishery lots themselves. The Municipality of Paoay, through its Provincial Fiscal, filed a petition in the Court of First Instance of Pangasinan seeking to dissolve this attachment. The respondent Judge denied this petition and a subsequent motion for reconsideration. The Petition: Instead of filing an appeal from the denial of its petition to dissolve the attachment, the Municipality of Paoay filed the present petition for certiorari with a writ of preliminary injunction. The municipality argues that the attached properties, specifically the fishery lots, are properties for public use and therefore exempt from execution. The petition seeks to reverse the respondent Judge's order and dissolve the attachment on these municipal properties, contending that the usufruct over municipal waters granted by the Legislature is not subject to execution as it is not held in a permanent or absolute capacity and its seizure would impede the municipality's functions and revenue generation.
Issue(s)
Whether the fishery lots owned by the Municipality of Paoay are subject to levy and execution. Whether the income derived from the lease of said fishery lots is subject to levy and execution.
Ruling
The Supreme Court reversed the order of the respondent Judge insofar as it failed to dissolve the attachment of the forty odd fishery lots. In all other respects, the order was affirmed. The levy and attachment made by the Provincial Sheriff of Ilocos Norte on the fishery lots were declared void, but the attachment on the P1,712.01 in the municipal treasury representing rental was declared valid.
Ratio Decidendi
On the issue of whether fishery lots are subject to execution: The Court held that the fishery lots, which are municipal waters granted by the Legislature for fishery purposes, are not subject to execution. These waters are considered property of the State, and the municipality merely holds a usufruct or the right to use them, granted by Section 2321 of the Revised Administrative Code. This right is not permanent or absolute, as it is a grant from the Legislature which can be repealed or modified. Furthermore, allowing a private individual to conduct public bidding and lease these State properties would be anomalous and would deprive the municipality of a source of income. The Court emphasized that properties for public use held by municipal corporations are not subject to levy and execution, citing Viuda de Tantoco vs. Municipal Council of Iloilo. The Court distinguished between properties for public use and patrimonial properties, stating that only the latter are subject to execution. On the issue of whether income from fishery lots is subject to execution: The Court ruled that the revenue or income derived from the renting of these fishery lots is subject to execution. The Court distinguished this income from revenues derived from taxes, municipal licenses, and market fees, which are essential for governmental functions. The income from fisheries, on the other hand, was characterized as a business activity engaged in for profit, as allowed by Section 2321 of the Administrative Code. The Court reasoned that a municipality engaged in such a business should liquidate obligations contracted in connection therewith using the income derived therefrom. This income is not indispensable for the performance of essential governmental duties and its amount is not fixed or definite, depending on bids. Therefore, it is a proper subject of execution to satisfy a judgment against the municipality.
Main Doctrine
While municipal fishery lots (municipal waters granted for fishery purposes) are not subject to execution because they are considered property of the State and the municipality only holds a usufruct granted by the Legislature, the income or revenue derived from the lease of these fishery lots is subject to execution to satisfy a judgment against the municipality, as this income is considered a business revenue and not essential for governmental functions.