20. Terrado vs.

CA

Facts: Pangasinan (which was once a public land) to the municipality of the Bayambang to be used or
disposed of in accordance with the general municipal law relative to the letting of fisheries in municipal
waters. On 1974, the municipality of Bayambang enacted Ordinance No. 8, establishing the Bayambang
Fishery and Hunting Park and Municipal Water Shed. Also in the said ordinance, the municipality appointed
and constituted private respondent Lacuesta as Manager-Administrator of the watershed for a period of 25
years, renewable for another 25 years. This is under the condition that said respondent shall pay the
municipality the sum equivalent to 10% of the annual gross income that may be derived from the forest
products, wild game and fish. Such ordinance was approved by the Provincial Board of Pangasinan but was
disapproved by the Secretary of Agriculture and Natural Resources as it “grants fishery privileges to
respondent Lacuesta without the benefit of competitive public hearing in contravention to law.” The
municipality then informed Lacuesta of the disapproval of the ordinance and directed him to refrain and
desist from acting as Manager-Administrator. However, Lacuesta refused and insisted on retaining
possession of the fisheries. Despite such refusal, the municipality of Bayambang passed another resolution
resolving to advertise for public bidding the said fishery area. Among the winning bidders are herein
petitioners.

There was a long line of petitions/motions filed in the RTC, CA, and SC filed by both parties. The judge of
said court sided with Lacuesta. As such, despite the fact that Lacuesta died, she still ordered the restoration
of the possession of all fisheries and areas covered by the contract to Lacuesta and his party.

Issues:
(1) Whether or not the Management Administration contract between the municipality and Lacuesta was
valid
(2) Whether or not the Management-Administration contract still stands even if Lacuesta already died

Ruling:
(1) NO. The Management-Administration contract entered into by Lacuesta and the municipalty was void
as it lacked a vital procedural aspect (public bidding) necessary for the validity of the contract. Moreover,
the Supreme Court held that the municipality had no power to grant exclusive privileges of fishing for more
than 5 years.

(2) NO. Lacuesta’s death is an irreversible fact that throws an entirely new bearing on the legal controversy
at hand. For essentially, the contract of management and administration between the Municipality and
Lacuesta is one of agency whereby a person binds himself to render some service or to do something in
representation or on behalf of another, with the consent or authority of the latter. Lacuesta bound himself
as Manager-Administrator of the Bayambang Fishing and Hunting Park and Municipal Watershed to render
service or perform duties and responsibilities in representation or on behalf of the Municipality of
Bayambang, with the consent or authority of the latter. Under Art. 1919 of the Civil Code, agency is
extinguished by the death of the agent. His rights and obligations arising from the contract are not
transmittable to his heirs or predecessors-in-interest.