GR L 793; (April, 1949) (Digest)
March 10, 2026GR L 2027; (October, 1950) (Digest)
March 10, 2026G.R. No. L-493; April 19, 1949
SANTIAGO BANAAG, petitioner-appellee, vs. VICENTE SINGSON ENCARNACION, in his capacity as Secretary of Agriculture and Commerce, and THE MUNICIPALITIES OF TAAL AND LEMERY, respondents-appellants.
FACTS
Petitioner Santiago Banaag was granted a five-year lease (June 3, 1943, to June 30, 1948) by the Director of Forestry and Fishery under the Japanese-sponsored Philippine Executive Commission for the exclusive privilege to erect a fish corral in the Pansipit River, which belongs to the municipalities of Taal and Lemery, Batangas. After liberation, the Secretary of Agriculture and Commerce and the municipalities sought to terminate the lease. Banaag filed a petition for declaratory judgment to uphold the lease’s validity for its full term. The parties submitted the case on stipulated facts, including that the Executive Commission was a de facto government, and that Banaag had incurred expenses and possessed the fisheries.
ISSUE
Whether the lease contract executed by the Japanese-sponsored Philippine Executive Commission remains valid and enforceable after the liberation of the Philippines.
RULING
No. The lease is declared cancelled and without effect. The Court ruled that the Philippine Executive Commission, as a de facto government of the belligerent occupant (Japan), acted as an administrator and usufructuary of public property. Under the Hague Convention of 1907, the occupant’s authority to administer public immovable property, including fisheries, ceases upon termination of occupation. Since the fisheries belong to the municipalities of Taal and Lemery, they are considered private property for purposes of the Hague Regulations, which the occupant could not permanently alienate. Furthermore, the lease itself provided it could be “suspended or cancelled at any time as the circumstances demand,” and the municipalities had demanded its return. Therefore, the lease terminated upon the liberation of Batangas, or at the latest, upon the municipalities’ demand on August 17, 1945. The appealed decision was reversed.
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