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Jun 5, 2008

356 SCRA 546

  • Legal effect of a decision rendered by an administrative body in a case filed in the regular courts


Sanado was issued by the now defunct Philippine Fisheries Commission an Ordinary Fishpond Permit covering an area of 50 hectares. On July 16, 1973, Sanado executed a contract with Nepomuceno wherein the latter agreed to develop 30 hectares of the 50 hectares covered by Sanado’s fishpond permit. Two days later, the parties modified this earlier agreement by excluding the area of 10 hectares already cultivated and fully developed and providing that the contract is renewable on terms acceptable to both of them.

Sept. 28, 1979

Director of Fisheries and Aquatic Resources recommended to the then Ministry of Natural Resources the conversion of Sanado’s fishpond permit into a 25-year fishpond loan agreement which covered a reduced area of 26.745 hectares. Accordingly, a Fishpond Lease Agreement was issued.

July 17, 1981

Sanado filed a complaint against Nepomuceno with the RTC for recovery of possession and damages, alleging that Nepomuceno failed to deliver Sanado’s share of the net harvest among other things. While this case was pending, the then Minister of Agriculture and Food canceled the Fishpond Lease Agreement, forfeiting the improvements thereon in favor of government. Later, said order was reconsidered to the extent that Nepomuceno was given priority to apply for the area and that his improvements thereon were not considered forfeited in favor of the government.

Sanado elevated the matter to the Office of the President but appeal was dimissed. Meanwhile, the trial court rendered a decision over Sanado’s complaint for recovery of possession in his favor.


  • Whether or not the decision of the Office of the President has any legal effect on the civil case for recovery of possession
  • Whether or not the judgment of the trial court has attained finality


What is the nature of the July 31, 1989 MalacaƱang decision and what is its effect on the resolution of Civil Case No. 2085?

The action of an administrative agency in granting or denying, or in suspending or revoking, a license, permit, franchise, or certificate of public convenience and necessity is administrative or quasi-judicial. The act is not purely administrative but quasi-judicial or adjudicatory since it is dependent upon the ascertainment of facts by the administrative agency, upon which a decision is to be made and rights and liabilities determined. As such, the July 31, 1989 decision of the Office of the President is explicitly an official act of and an exercise of quasi-judicial power by the Executive Department headed by the highest officer of the land. It thus squarely falls under matters relative to the executive department which courts are mandatorily tasked to take judicial notice of under Section 1, Rule 129 of the Rules of Court. Judicial notice must be taken of the organization of the Executive Department, its principal officers, elected or appointed, such as the President, his powers and duties.

The rendition of the subject July 31, 1989 MalacaƱang decision is premised on the essential function of the executive department — which is to enforce the law. In this instance, what is being enforced is Presidential Decree No. 704 which consolidated and revised all laws and decrees affecting fishing and fisheries. Such enforcement must be true to the policy behind such laws which is "to accelerate and promote the integrated development of the fishery industry and to keep the fishery resources of the country in optimum productive condition through proper conservation and protection" (Section 2, P.D. No. 704).

Further, the issue of whether or not petitioner is still entitled to possession of the subject fishpond area is underpinned by an ascertainment of facts. And such task belongs to the administrative body which has jurisdiction over the matter — the Ministry of Agriculture and Food. The policy of the courts as regards such factual findings is not to interfere with actions of the executive branch on administrative matters addressed to the sound discretion of government agencies. This policy is specially applicable in the grant of licenses, permits, and leases, or the approval, rejection, or revocation of applications therefor (Manuel vs. Villena, 37 SCRA 745 [1971]). Such respect is based on the time-honored doctrine of separation of powers and on the fact that these bodies are considered co-equal and coordinate rank as courts. The only exception is when there is a clear showing of capricious and whimsical exercise of judgment or grave abuse of discretion, which we find absent in the case at bar.

The reasons given by the Office of the President in dismissing petitioner's appeal are quite clear. Transferring or subletting the fishpond granted to a licensee without the consent or approval of the administrative body concerned, as well as the failure to develop the area required by the fisheries rules, are definitely solid and logical grounds for the cancellation of one's license. Withal, if petitioner disagrees with the decision of the Office of the President, he should have elevated the matter by petition for review before the Court of Appeals for the latter's exercise of judicial review. Nowhere in the record do we find such action on petitioner's part.

Understandably, to restore petitioner to the possession of the fishpond area is to totally disregard the July 31, 1989 decision of the Office of the President which can hardly be described as an unrelated matter, considering its patent implications in the result of both Civil Case No. 2085 and CA-G.R. CV No. 23165. For how could the appellate court award possession to the very same party whose license has been cancelled by the executive or administrative officer tasked to exercise licensing power as regards the development of fishpond areas, and which cancellation has been sustained by the Office of the President? Petitioner must remember the essence of the grant of a license. It is not a vested right given by the government but a privilege with corresponding obligations and is subject to governmental regulation. Hence, to allow petitioner to possess the subject area is to run counter to the execution and enforcement of the July 31, 1989 decision which would easily lose its "teeth" or force if petitioner were restored in possession.

The trial court’s decision did not attain finality. It was appealed within the reglementary period. If the court could modify or alter a judgment even after the same has become executory whenever circumstances transpire rendering its decision unjust and inequitable, as where certain facts and circumstances justifying or requiring such modification or alteration transpired after the judgment has become final and executory (David vs. Court of Appeals, 316 SCRA 710 [1999]) and when it becomes imperative in the higher interest of justice or when supervening events warrant it (People vs. Gallo, 315 SCRA 461 [1999]), what more if the judgment has not yet attained finality?

It is thus plain in the case at bar that the July 31, 1989 decision of the Office of the President is a substantial supervening event which drastically changed the circumstances of the parties to the subject fishpond lease agreement. For to award possession to petitioner is futile since he has lost the fishpond license.

In point is our ruling in Baluyot vs. Guiao (315 SCRA 396 [1997]) where we held that judgment is not confined to what appears on the face of the decision, but also covers those necessarily included therein or necessary thereto. For example, where the ownership of a parcel of land is decreed in the judgment, the delivery of the possession of the land should be considered included in the decision, it appearing that the defeated party's claim to the possession thereof is based on his claim of ownership.

By analogy, the July 31, 1989 decision, is not confined to the validity of the cancellation by the Ministry of Agriculture and Food of petitioner's Fishpond Lease Agreement No. 3090 for violation of the terms thereof and/or the fisheries rules. The right to possess the subject fishpond area is necessarily included in the decision. The cancellation or revocation of petitioner's license necessarily eliminated his right to possess the same since the new licensee would then be the one to enjoy this right.


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