G.R. No. L-9217; November 29, 1957
NICOLAS DIEGO, petitioner, vs. THE COURT OF APPEALS and FAUSTO C. MENESES, ET AL., respondents.

FACTS

The case involves a review of the Court of Appeals’ decision affirming the Pangasinan court’s judgment annulling a fishpond permit. The permit was issued by the Director of Fisheries and the Secretary of Agriculture and Natural Resources in favor of Nicolas Diego and his predecessor-in-interest, Benedicta G. Ramos, for an area in Binmaley, Pangasinan. The annulment was based on the finding that the permit covered portions of the navigable Sisilien River. The respondents, Fausto C. Meneses, Josefa Llamas, and others, filed a complaint alleging abuse of power in the grant of the permit. The municipality of Binmaley intervened. The Supreme Court, in two prior cases ( G.R. No. 24461 , Ferrer vs. Sison, and G.L.R.C. No. 38509), had declared the Sisilien River as a navigable stream. Based on these rulings, the Director of Lands had previously rejected Meneses’ sales and lease applications for the same area, deeming it non-disposable public land. Despite protests from respondents, who owned adjoining fishponds, the Bureau of Fisheries issued the permit to Ramos in 1944, which was later transferred to Diego. The Secretary of Agriculture and Natural Resources initially revoked Diego’s permit but later reinstated it after an investigation, finding the area was public domain, not used for navigation, and topographically similar to adjoining fishponds. The lower courts annulled the permit, holding it covered a navigable river as previously established by the Supreme Court.

ISSUE

The primary issue is whether the fishpond permit issued by administrative officials covering an area declared by the Supreme Court to be part of a navigable river is valid and can be annulled by the courts.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, upholding the annulment of the fishpond permit. The Court held that the area in question was part of the navigable Sisilien River, as conclusively established by its prior judgments in Ferrer vs. Sison and the related registration case. These prior decisions constituted res judicata on the nature of the land. The Secretary of Agriculture’s finding that the area was not navigable and was public domain was erroneous and beyond his authority, as he cannot overturn a final judicial declaration. The Court rejected Diego’s arguments: (1) that respondents failed to exhaust administrative remedies by not appealing to the President, noting this defense was not raised in the trial court and is not mandatory in ordinary civil actions; and (2) that the Secretary’s factual findings are not reviewable, ruling that courts can review such decisions when they contradict final judicial pronouncements. The Court also denied Diego’s claim for reimbursement for improvements, as he filed no counterclaim for it, and the respondents, who consistently opposed the permit, were not responsible for inducing the construction. The annulment was proper as the permit prejudiced the respondents’ proprietary interests in their adjoining fishponds, which depended on the river’s water and fish supply.