THE ESTATE OF PEDRO C. GONZALES and HEIRS OF PEDRO C.
GONZALES, Petitioners, vs. THE HEIRS OF MARCOS PEREZ, Respondents. G.R. No.
169681, November 5, 2009.
“In their first and last assigned errors, petitioners contend
that Marcos, who is respondents' predecessor-in-interest, could not have
legally bought the disputed parcel of land from petitioners'
predecessor-in-interest, Pedro, in September 1966 because, during that time,
Pedro had not yet acquired ownership of the subject lot. Petitioners' assertion
is based on the premise that as of February 29, 1968, the Deed of Sale between
Pedro and the Municipality of Marikina was still subject to approval by the
Provincial Governor of Rizal, as required under Section 2196 of the Revised
Administrative Code. Considering that on the supposed date of sale in favor of
Marcos, the requisite approval of the Provincial Governor was not yet secured,
petitioners conclude that Pedro could not be considered as the owner of the
subject property and, as such, he did not yet possess the right to transfer
ownership thereof and, thus, could not have lawfully sold the same to Marcos.
The Court does not agree.
Section 2196 of the Revised Administrative Code provides:
SECTION 2196. Execution of deeds. – When the government of a
municipality is a party to a deed or an instrument which conveys real property
or any interest therein or which creates a lien upon the same, such deed or
instrument shall be executed on behalf of the municipal government by the
mayor, upon resolution of the council, with the approval of the governor.
In Municipality of Camiling v. Lopez,16 the Court found
occasion to expound on the nature and effect of the provincial governor's power
to approve contracts entered into by a municipal government as provided for
under Section 2196 of the Revised Administrative Code. The Court held, thus:
x x x The approval by the provincial governor of contracts
entered into and executed by a municipal council, as required in [S]ection 2196
of the Revised Administrative Code, is part of the system of supervision that
the provincial government exercises over the municipal governments. It is not a
prohibition against municipal councils entering into contracts regarding
municipal properties subject of municipal administration or control. It does
not deny the power, right or capacity of municipal councils to enter into such
contracts; such power or capacity is recognized. Only the exercise thereof is
subject to supervision by approval or disapproval, i.e., contracts entered in
pursuance of the power would ordinarily be approved if entered into in good
faith and for the best interests of the municipality; they would be denied
approval if found illegal or unfavorable to public or municipal interest. The
absence of the approval, therefore, does not per se make the contracts null and
void.17
This pronouncement was later reiterated in Pechueco Sons
Company v. Provincial Board of Antique,18 where the Court ruled more
emphatically that:
In other words, as regards the municipal transactions
specified in Section 2196 of the Revised Administrative Code, the Provincial
Governor has two courses of action to take – either to approve or disapprove
the same. And since absence of such approval does not necessarily render the
contract entered into by the municipality null and void, the transaction
remains voidable until such time when by subsequent unfavorable action of the
governor, for reasons of public interest, the contract is thereby
invalidated.19
It is clear from the above-quoted pronouncements of the Court
that, pending approval or disapproval by the Provincial Governor of a contract
entered into by a municipality which falls under the provisions of Section 2196
of the Revised Administrative Code, such contract is considered voidable. In
the instant case, there is no showing that the contract of sale entered into
between Pedro and the Municipality of Marikina was ever acted upon by the
Provincial Governor. Hence, consistent with the rulings enunciated above, the
subject contract should be considered voidable. Voidable or annullable
contracts, before they are set aside, are existent, valid, and binding, and are
effective and obligatory between the parties.20
In the present case, since the contract was never annulled or
set aside, it had the effect of transferring ownership of the subject property
to Pedro. Having lawfully acquired ownership of Lots A and C, Pedro, in turn,
had the full capacity to transfer ownership of these parcels of land or parts
thereof, including the subject property which comprises a portion of Lot C.”
