GR 34021; (March, 1932) (Digest)
G.R. No. 34021 ; March 3, 1932
RICARDO PARDO Y PUJOL, plaintiff-appellant, vs. THE MUNICIPALITY OF GUINOBATAN, defendant-appellee.
FACTS
On August 4, 1888, Ricardo Pardo y Cabanas obtained a 40-year administrative franchise to build and operate a public market on his land in Guinobatan, Albay, after which the market and lot would become municipal property. The market opened on July 30, 1888. It was destroyed by fire on January 2, 1912. The municipality then granted a lease to another party and later built its own public market elsewhere. The plaintiff, Ricardo Pardo y Pujol (son of the original grantee), rebuilt the market on the original site in 1917-1918. The municipality initially interfered but later, in 1921, passed a resolution allowing the plaintiff to operate the rebuilt market and complete the full 40-year term of his franchise, which would extend his privilege for an additional period of 6 years, 7 months, and 16 days beyond the original expiration date of July 30, 1928. When the original term expired, the municipality sought to take over the market. The plaintiff filed an action seeking to enforce his right to the additional period and to enjoin the municipality from depriving him of the market’s income.
ISSUE
Whether the municipal resolution granting the plaintiff an extension of his franchise for 6 years, 7 months, and 16 days beyond its original expiration date is valid and enforceable.
RULING
No. The Supreme Court affirmed the dismissal of the plaintiff’s complaint. The Court held that the plaintiff’s original 40-year franchise expired on July 30, 1928. Upon expiration, the market building and lot became the exclusive property of the municipality under the terms of the original grant. The municipality’s subsequent resolution granting an extension was effectively the creation of a new franchise. Under Section 2319 of the Administrative Code, a municipal market owned by the municipality must be let to the highest bidder, with approval of the provincial board and for a period not exceeding five years. Since the “extension” was granted without public bidding and for a period exceeding five years, it was null and void. The plaintiff, therefore, had no right to continue operating the market after July 30, 1928.
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