G.R. No. L-5265

ALFREDO CHANCO, plaintiff-appellant, vs. THE MUNICIPALITY OF ROMBLON ET AL., defendants-appellees.

January 26, 1910

FACTS:
On July 6, 1907, Alfredo Chanco applied to the Municipality of Romblon to purchase a 469 square meter parcel of land for P1.00 per square meter. On July 8, 1907, the municipal council of Romblon resolved to sell him the land at that price. On July 12, 1907, the provincial governor of Romblon authorized the sale but at a modified price of P1.20 per square meter, reflecting the land’s assessed value. Both the municipal council and Chanco accepted this new price, and on July 15, 1907, the council agreed to execute the bill of sale. On July 31, 1907, the council formally resolved to authorize the municipal president to execute the deed of sale to Chanco for P1.20 per square meter.

The day after this resolution, several residents of Romblon protested the sale to the provincial board of Capiz. On August 5, 1907, the provincial board of Capiz (which had jurisdiction over Romblon at that time) resolved to annul the municipal council’s July 8, 1907 resolution concerning the sale. This annulment was transmitted to the municipal council, which subsequently, on August 12, 15, and 30, 1907, resolved to annul its own July 8, 1907 resolution.

Chanco then filed an action to compel specific performance of the alleged contract of sale. The trial court dismissed the complaint, citing Section 1 of Act No. 676 , which amended Section 41 of the Municipal Code. Chanco appealed, arguing that the contract was valid and binding.

ISSUE:
Whether the provincial board had the authority under Section 41 of the Municipal Code, as amended by Act No. 676 , to annul a resolution of the municipal council concerning a contract of sale of municipal land, thereby rendering the alleged contract unenforceable.

RULING:
The Supreme Court affirmed the dismissal of the complaint, ruling that the contract was not valid and binding due to the provincial board’s annulment of the municipal council’s resolution.

The Court held that Section 41 of the Municipal Code, as amended by Act No. 676 , empowers provincial boards to declare null and void “all acts, ordinances, and resolutions of municipal councils, and executive orders of municipal presidents, of every kind and character whatsoever.” This authority is not limited to legislative or administrative acts but extends to resolutions of a contractual nature.

The Court clarified that any agreement by a municipality, such as the resolution to sell land, is adopted subject to the invalidating action of the provincial board. Persons dealing with the municipal council are deemed to have knowledge of this statutory condition. Consequently, the municipality’s agreement to sell the land to Chanco was subject to the implied condition that it could be invalidated if the provincial board annulled the resolution before the agreement was actually executed.

Since the provincial board did annul the resolution before the deed of sale was executed, Chanco’s claim for specific performance cannot be maintained. The provincial board’s action, taken in conformity with the law, effectively annulled the resolution. While the law provided for an appeal by the municipal council to the Civil Governor if it was dissatisfied with the provincial board’s decision, no such appeal was made; in fact, the municipal council itself later annulled its own resolution. The provincial board’s conclusion regarding the municipal council’s powers, and its subsequent annulment, was binding.