The Municipality of Gasan v. Miguel Marasigan

Summary

The Municipality of Gasan sued to collect P3,780 in license fees from Miguel Marasigan for whitefish spawn gathering privileges in 1931. The municipality had rejected a higher bid and awarded the privilege to Marasigan through Resolution No. 161. The provincial board and Executive Bureau declared this resolution invalid, stating the privilege should go to the highest bidder. The Supreme Court found that while the original contract was cancelled due to these administrative decisions, a tacit contract existed from April-July 1931 when Marasigan actually exercised the privilege and made payments. The Court absolved the sureties since the original obligation they guaranteed was cancelled, and ruled Marasigan owed only P140 after crediting his deposits. This case demonstrates the hierarchy of administrative oversight and the principle that suretyship cannot exist without a valid underlying obligation.