G.R. No. L-21906 August 29, 1969
INOCENCIA DELUAO and FELIPE DELUAO, plaintiffs-appellees, vs. NICANOR CASTEEL and JUAN DEPRA, defendants, NICANOR CASTEEL, defendant-appellant.

FACTS

The appellees, Inocencia and Felipe Deluao, filed a motion for reconsideration of the Supreme Court’s decision dated December 24, 1968. The dispute involves a fishpond area. The appellant, Nicanor Casteel, had a fishpond application (Fp. A. No. 1711) for an area in Barrio Palili, Padada, Davao, which was previously covered by applications of other individuals. The Secretary of Agriculture and Natural Resources (DANR) issued decisions in DANR Cases Nos. 353 and 353-B on September 15, 1950, which adjudicated or awarded the area to Casteel. These decisions were ordered executed on August 4, 1955, and various subsequent orders and memoranda from DANR officials directed the execution of these decisions to place Casteel in possession, with the issuance of permits to follow later. The appellees filed protests against the execution, which were dismissed by the Acting Commissioner of Fisheries and the DANR Secretary, who considered the matter a closed case. The appellees argue that the contract between the parties should be given effect, while the Court’s decision held that the contract of service (Exh. A) was contrary to law and null and void.

ISSUE

The primary issue is whether the appellees’ motion for reconsideration should be granted, which hinges on several propositions: (1) the validity of Fisheries Administrative Order 14, sec. 7 (prohibiting transfer or sub-letting of fishponds without approval) in relation to the Fisheries Act (Act 4003); (2) the application of this prohibition to Casteel before the issuance of a permit or lease; (3) the accuracy of the Court’s statement that Casteel became the legal permittee after the DANR Secretary’s approval; (4) the effect of the DANR Secretary’s decisions; (5) the dissolution of the partnership between the parties; (6) Casteel’s liability for one-half of the fishpond; and (7) whether giving effect to the parties’ intention serves equity and justice.

RULING

The Supreme Court denied the appellees’ motion for reconsideration. The Court held:
1. Fisheries Administrative Order 14, sec. 7, which prohibits the transfer or sub-letting of fishponds without approval, is valid and consistent with the Fisheries Act (Act 4003). Section 63 of the Act implies that only holders of permits or leases issued by the DANR Secretary can lawfully enter and operate fishponds on public land. The administrative order implements this legislative intent and is a valid exercise of the DANR Secretary’s authority under Section 4 of the Act.
2. The prohibition applies even before the issuance of a formal permit or lease. The appellees’ theory that it was permissible for Casteel to violate the order because no permit had been issued yet is rejected, as it would undermine the legislative intent to restrict the privilege to bona fide permittees or lessees.
3. The Court’s statement that Casteel became the legal permittee after the DANR Secretary’s approval is accurate. The decisions in DANR cases 353 and 353-B did not merely reinstate Casteel’s application but approved it, granting him occupancy rights. Various official communications confirm that the decisions awarded the area to Casteel and were to be executed.
4. The DANR Secretary’s decisions in cases 353 and 353-B are final and executory. The appellees’ subsequent protests were properly dismissed, and the matter is considered closed.
5. The contract of partnership between the parties for the joint administration and division of the fishpond was dissolved. The Deluaos, in a letter dated October 25, 1950, unequivocally expressed their decision not to share the fishpond with Casteel, which dissolved the partnership. Additionally, the partnership was automatically dissolved for being contrary to law, as it involved a fishpond on public domain.
6. Casteel is not liable to the Deluaos for one-half of the fishpond or its value because the Deluaos also caused the dissolution of the partnership. The beneficial right to a fishpond is not “specific partnership property” under Article 1811 of the Civil Code, as it is an intangible right, and the fishpond itself cannot be partnership property since it is public domain.
7. The contract of service (Exh. A) is null and void for being contrary to law and cannot be considered the law between the parties. Therefore, giving effect to the parties’ intention does not serve equity and justice in this case.