Case Digest REPUBLIC OF THE PHILIPPINES v. ROSEMOOR MINING AND DEVELOPMENT CORPORATION G.R. No. 149927 March 30, 2004

REPUBLIC OF THE PHILIPPINES, Represented by the Department of Environment and Natural Resources (DENR) Under then Minister ERNESTO R. MACEDA; and Former Government Officials CATALINO MACARAIG, FULGENCIO S. FACTORAN, ANGEL C. ALCALA, BEN MALAYANG, ROBERTO PAGDANGANAN, MARIANO Z. VALERA and ROMULO SAN JUAN,vs.ROSEMOOR MINING AND DEVELOPMENT CORPORATION, PEDRO DEL CONCHA, and ALEJANDRO and RUFO DE GUZMAN,

G.R. No. 149927             March 30, 2004

Case Digest

"The four (4) petitioners, after having been granted permission to prospect for marble deposits in the mountains of Biak-na-Bato, San Miguel, Bulacan, succeeded in discovering marble deposits of high quality and in commercial quantities in Mount Mabio which forms part of the Biak-na-Bato mountain range.After compliance with numerous required conditions, License No. 33 was issued by the Bureau of Mines in favor of the herein petitioners."Shortly after Respondent Ernesto R. Maceda was appointed Minister of the Department of Energy and Natural Resources (DENR), petitioners’ License No. 33 was cancelled by him through his letter to ROSEMOOR MINING AND DEVELOPMENT CORPORATION

The trial court ruled that the privilege granted under respondents’ license had already ripened into a property right, which was protected under the due process clause of the Constitution. Such right was supposedly violated when the license was cancelled without notice and hearing. The cancellation was said to be unjustified, because the area that could be covered by the four separate applications of respondents was 400 hectares. Finally, according to the RTC, Proclamation No. 84, which confirmed the cancellation of the license, was an ex post facto law; as such, it violated Section 3 of Article XVIII of the 1987 Constitution.

the CA held that the grant of the quarry license covering 330.3062 hectares to respondents was authorized by law, because the license was embraced by four (4) separate applications -- each for an area of 81 hectares. Moreover, it held that the limitation under Presidential Decree No. 463 -- that a quarry license should cover not more than 100 hectares in any given province -- was supplanted by Republic Act No. 7942,⁷ which increased the mining areas allowed under PD 463.

Issues

"(1) [W]hether or not QLP No. 33 was issued in blatant contravention of Section 69, P.D. No. 463;

Held: It is relevant to state, however, that Section 2 of Article XII of the 1987 Constitution does not apply retroactively to a "license, concession or lease" granted by the government under the 1973 Constitution or before the effectivity of the 1987 Constitution on February 2, 1987.¹⁷ As noted in Miners Association of the Philippines v. Factoran Jr., the deliberations of the Constitutional Commission¹⁸ emphasized the intent to apply the said constitutional provision prospectively.

"SECTION 112. Non-impairment of Existing Mining/ Quarrying Rights. — All valid and existing mining lease contracts, permits/licenses, leases pending renewal, mineral production-sharing agreements granted under Executive Order No. 279, at the date of effectivity of this Act, shall remain valid, shall not be impaired, and shall be recognized by the Government: Provided, That the provisions of Chapter XIV on government share in mineral production-sharing agreement and of Chapter XVI on incentives of this Act shall immediately govern and apply to a mining lessee or contractor unless the mining lessee or contractor indicates his intention to the secretary, in writing, not to avail of said provisions: Provided, further, That no renewal of mining lease contracts shall be made after the expiration of its term: Provided, finally, That such leases, production-sharing agreements, financial or technical assistance agreements shall comply with the applicable provisions of this Act and its implementing rules and regulations.

"SECTION 113. Recognition of Valid and Existing Mining Claims and Lease/Quarry Application. — Holders of valid and existing mining claims, lease/quarry applications shall be given preferential rights to enter into any mode of mineral agreement with the government within two (2) years from the promulgation of the rules and regulations implementing this Act." (Underscoring supplied)

Section 3(p) of RA 7942 defines an existing mining/quarrying right as "a valid and subsisting mining claim or permit or quarry permit or any mining lease contract or agreement covering a mineralized area granted/issued under pertinent mining laws." Consequently, determining whether the license of respondents falls under this definition would be relevant to fixing their entitlement to the rights and/or preferences under RA 7942. Hence, the present Petition has not been mooted.

Petitioners submit that the license clearly contravenes Section 69 of PD 463, because it exceeds the maximum area that may be granted. This incipient violation, according to them, renders the license void ab initio.

Respondents, on the other hand, argue that the license was validly granted, because it was covered by four separate applications for areas of 81 hectares each.

The license in question, QLP No. 33,¹⁹ is dated August 3, 1982, and it was issued in the name of Rosemoor Mining Development Corporation. The terms of the license allowed the corporation to extract and dispose of marbleized limestone from a 330.3062-hectare land in San Miguel, Bulacan. The license is, however, subject to the terms and conditions of PD 463, the governing law at the time it was granted; as well as to the rules and regulations promulgated thereunder.²⁰ By the same token, Proclamation No. 2204 -- which awarded to Rosemoor the right of development, exploitation, and utilization of the mineral site -- expressly cautioned that the grant was subject to "existing policies, laws, rules and regulations."²¹

The license was thus subject to Section 69 of PD 463, which reads:

"Section 69. Maximum Area of Quarry License – Notwithstanding the provisions of Section 14 hereof, a quarry license shall cover an area of not more than one hundred (100) hectares in any one province and not more than one thousand (1,000) hectares in the entire Philippines." (Italics supplied)

The language of PD 463 is clear. It states in categorical and mandatory terms that a quarry license, like that of respondents, should cover a maximum of 100 hectares in any given province. This law neither provides any exception nor makes any reference to the number of applications for a license. Section 69 of PD 463 must be taken to mean exactly what it says. Where the law is clear, plain, and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation.²²

Moreover, the lower courts’ ruling is evidently inconsistent with the fact that QLP No. 33 was issued solely in the name of Rosemoor Mining and Development Corporation, rather than in the names of the four individual stockholders who are respondents herein. It likewise brushes aside a basic postulate that a corporation has a separate personality from that of its stockholders.²³

The interpretation adopted by the lower courts is contrary to the purpose of Section 69 of PD 463. Such intent to limit, without qualification, the area of a quarry license strictly to 100 hectares in any one province is shown by the opening proviso that reads: "Notwithstanding the provisions of Section 14 hereof x x x." The mandatory nature of the provision is also underscored by the use of the word shall. Hence, in the application of the 100-hectare-per-province limit, no regard is given to the size or the number of mining claims under Section 14, which we quote:

"SECTION 14. Size of Mining Claim. -- For purposes of registration of a mining claim under this Decree, the Philippine territory and its shelf are hereby divided into meridional blocks or quadrangles of one-half minute (1/2) of latitude and longitude, each block or quadrangle containing area of eighty-one (81) hectares, more or less.

"A mining claim shall cover one such block although a lesser area may be allowed if warranted by attendant circumstances, such as geographical and other justifiable considerations as may be determined by the Director: Provided, That in no case shall the locator be allowed to register twice the area allowed for lease under Section 43 hereof." (Italics supplied)

Clearly, the intent of the law would be brazenly circumvented by ruling that a license may cover an area exceeding the maximum by the mere expediency of filing several applications. Such ruling would indirectly permit an act that is directly prohibited by the law.

 (2) whether or not Proclamation No. 84 issued by then President Corazon Aquino is valid. The corollary issue is whether or not the Constitutional prohibition against ex post facto law applies to Proclamation No. 84"⁹

In line with the foregoing jurisprudence, respondents’ license may be revoked or rescinded by executive action when the national interest so requires, because it is not a contract, property or a property right protected by the due process clause of the Constitution.²⁹ Respondents themselves acknowledge this condition of the grant under paragraph 7 of QLP No. 33, which we quote:

"7. This permit/license may be revoked or cancelled at any time by the Director of Mines and Geo-Sciences when, in his opinion public interests so require or, upon failure of the permittee/licensee to comply with the provisions of Presidential Decree No. 463, as amended, and the rules and regulations promulgated thereunder, as well as with the terms and conditions specified herein; Provided, That if a permit/license is cancelled, or otherwise terminated, the permittee/licensee shall be liable for all unpaid rentals and royalties due up to the time of the termination or cancellation of the permit/license[.]"³⁰ (Italics supplied)

The determination of what is in the public interest is necessarily vested in the State as owner of all mineral resources. That determination was based on policy considerations formally enunciated in the letter dated September 15, 1986, issued by then Minister Maceda and, subsequently, by the President through Proclamation No. 84. As to the exercise of prerogative by Maceda, suffice it to say that while the cancellation or revocation of the license is vested in the director of mines and geo-sciences, the latter is subject to the former’s control as the department head. We also stress the clear prerogative of the Executive Department in the evaluation and the consequent cancellation of licenses in the process of its formulation of policies with regard to their utilization. Courts will not interfere with the exercise of that discretion without any clear showing of grave abuse of discretion.³¹

Moreover, granting that respondents’ license is valid, it can still be validly revoked by the State in the exercise of police power.³² The exercise of such power through Proclamation No. 84 is clearly in accord with jura regalia, which reserves to the State ownership of all natural resources.³³ This Regalian doctrine is an exercise of its sovereign power as owner of lands of the public domain and of the patrimony of the nation, the mineral deposits of which are a valuable asset.³⁴

Proclamation No. 84 cannot be stigmatized as a violation of the non-impairment clause. As pointed out earlier, respondents’ license is not a contract to which the protection accorded by the non-impairment clause may extend.³⁵Even if the license were, it is settled that provisions of existing laws and a reservation of police power are deemed read into it, because it concerns a subject impressed with public welfare.³⁶ As it is, the non-impairment clause must yield to the police power of the state.³⁷

We cannot sustain the argument that Proclamation No. 84 is a bill of attainder; that is, a "legislative act which inflicts punishment without judicial trial."³⁸ Its declaration that QLP No. 33 is a patent nullity³⁹ is certainly not a declaration of guilt. Neither is the cancellation of the license a punishment within the purview of the constitutional proscription against bills of attainder.

Too, there is no merit in the argument that the proclamation is an ex post facto law. There are six recognized instances when a law is considered as such: 1) it criminalizes and punishes an action that was done before the passing of the law and that was innocent when it was done; 2) it aggravates a crime or makes it greater than it was when it was committed; 3) it changes the punishment and inflicts one that is greater than that imposed by the law annexed to the crime when it was committed; 4) it alters the legal rules of evidence and authorizes conviction upon a less or different testimony than that required by the law at the time of the commission of the offense; 5) it assumes the regulation of civil rights and remedies only, but in effect imposes a penalty or a deprivation of a right as a consequence of something that was considered lawful when it was done; and 6) it deprives a person accused of a crime of some lawful protection to which he or she become entitled, such as the protection of a former conviction or an acquittal or the proclamation of an amnesty.⁴⁰ Proclamation No. 84 does not fall under any of the enumerated categories; hence, it is not an ex post facto law.

It is settled that an ex post facto law is limited in its scope only to matters criminal in nature.⁴¹ Proclamation 84, which merely restored the area excluded from the Biak-na-Bato national park by canceling respondents’ license, is clearly not penal in character.

Finally, it is stressed that at the time President Aquino issued Proclamation No. 84 on March 9, 1987, she was still validly exercising legislative powers under the Provisional Constitution of 1986.⁴² Section 1 of Article II of Proclamation No. 3, which promulgated the Provisional Constitution, granted her legislative power "until a legislature is elected and convened under a new Constitution." The grant of such power is also explicitly recognized and provided for in Section 6 of Article XVII of the 1987 Constitution.⁴³

WHEREFORE, this Petition is hereby GRANTED and the appealed Decision of the Court of Appeals SET ASIDE. No costs.

Case Digest GONZALES vs.CLIMAX MINING LTD G.R. No. 161957 February 28, 2005

. JORGE GONZALES and PANEL OF ARBITRATORS, vs.CLIMAX MINING LTD., CLIMAX-ARIMCO MINING CORP., and AUSTRALASIAN PHILIPPINES MINING INC.,

G.R. No. 161957             February 28, 2005

Petitioner Jorge Gonzales, as claimowner of mineral deposits located within the Addendum Area of Influence in Didipio, in the provinces of Quirino and Nueva Vizcaya, entered into a co-production, joint venture and/or production-sharing letter-agreement designated as the May 14, 1987 Letter of Intent with Geophilippines, Inc, and Inmex Ltd. Under the agreement, petitioner, as claimowner, granted to Geophilippines, Inc. and Inmex Ltd. collectively, the exclusive right to explore and survey the mining claims for a period of thirty-six (36) months within which the latter could decide to take an operating agreement on the mining claims and/or develop, operate, mine and otherwise exploit the mining claims and market any and all minerals that may be derived therefrom.

On 28 February 1989, the parties to the May 14, 1987 Letter of Intent renegotiated the same into the February 28, 1989 Agreement whereby the exploration of the mining claims was extended for another period of three years.

On 9 March 1991, petitioner Gonzales, Arimco Mining Corporation, Geophilippines Inc., Inmex Ltd., and Aumex Philippines, Inc. signed a document designated as the Addendum to the May 14, 1987 Letter of Intent and February 28, 1989 Agreement with Express Adhesion Thereto (hereafter, the Addendum Contract).¹ Under the Addendum Contract, Arimco Mining Corporation would apply to the Government of the Philippines for permission to mine the claims as the Government’s contractor under a Financial and Technical Assistance Agreement (FTAA). On 20 June 1994, Arimco Mining Corporation obtained the FTAA² and carried out work under the FTAA.

Respondents executed the Operating and Financial Accommodation Contract³ (between Climax-Arimco Mining Corporation and Climax Mining Ltd., as first parties, and Australasian Philippines Mining Inc., as second party) dated 23 December 1996 and Assignment, Accession Agreement⁴ (between Climax-Arimco Mining Corporation and Australasian Philippines Mining Inc.) dated 3 December 1996. Respondent Climax Mining Corporation (Climax) and respondent Australasian Philippines Mining Inc. (APMI) entered into a Memorandum of Agreement⁵ dated 1 June 1991 whereby the former transferred its FTAA to the latter.

On 8 November 1999, petitioner Gonzales filed before the Panel of Arbitrators, Region II, Mines and Geosciences Bureau of the Department of Environment and Natural Resources, against respondents Climax-Arimco Mining Corporation (Climax-Arimco), Climax, and APMI,⁶ a Complaint⁷ seeking the declaration of nullity or termination of the Addendum Contract, the FTAA, the Operating and Financial Accommodation Contract, the Assignment, Accession Agreement, and the Memorandum of Agreement. Petitioner Gonzales prayed for an unspecified amount of actual and exemplary damages plus attorney’s fees and for the issuance of a temporary restraining order and/or writ of preliminary injunction to restrain or enjoin respondents from further implementing the questioned agreements. He sought said releifs on the grounds of "FRAUD, OPPRESSION and/or VIOLATION of Section 2, Article XII of the CONSTITUTION perpetrated by these foreign RESPONDENTS, conspiring and confederating with one another and with each other…."⁸

Issues:

(c) Whether the complaint filed by petitioner raises a mining dispute over which the Panel of Arbitrators has jurisdiction, or a judicial question which should properly be brought before the regular courts.

(d) Whether the dispute between the parties should be brought for arbitration under Rep. Act No. 876.

Ruling:

A judicial question is a question that is proper for determination by the courts, as opposed to a moot question or one properly decided by the executive or legislative branch.¹⁸ A judicial question is raised when the determination of the question involves the exercise of a judicial function; that is, the question involves the determination of what the law is and what the legal rights of the parties are with respect to the matter in controversy.¹⁹ 

On the other hand, a mining dispute is a dispute involving (a) rights to mining areas, (b) mineral agreements, FTAAs, or permits, and (c) surface owners, occupants and claimholders/concessionaires.²⁰ Under Republic Act No. 7942 (otherwise known as the Philippine Mining Act of 1995), the Panel of Arbitrators has exclusive and original jurisdiction to hear and decide these mining disputes.²¹ The Court of Appeals, in its questioned decision, correctly stated that the Panel’s jurisdiction is limited only to those mining disputes which raise questions of fact or matters requiring the application of technological knowledge and experience.²²

In Pearson v. Intermediate Appellate Court,²³ this Court observed that the trend has been to make the adjudication of mining cases a purely administrative matter.²⁴ Decisions²⁵ of the Supreme Court on mining disputes have recognized a distinction between (1) the primary powers granted by pertinent provisions of law to the then Secretary of Agriculture and Natural Resources (and the bureau directors) of an executive or administrative nature, such as granting of license, permits, lease and contracts, or approving, rejecting, reinstating or canceling applications, or deciding conflicting applications, and (2) controversies or disagreements of civil or contractual nature between litigants which are questions of a judicial nature that may be adjudicated only by the courts of justice. This distinction is carried on even in Rep. Act No. 7942.

The Complaint charged respondents with disregarding and ignoring the provisions of the Addendum Contract, violating the purpose and spirit of the May 14, 1987 Letter of Intent and February 28, 1989 Agreement, and acting in a fraudulent and oppressive manner against petitioner and practicing fraud and deception against the Government.²⁶ Petitioner alleged in his Complaint that under the original agreements (the May 14, 1987 Letter of Intent and February 28, 1989 Agreement) respondent Climax-Arimco had committed to complete the Bankable Feasibility Study by 28 February 1992, but the same was not accomplished. Instead, respondent Climax-Arimco, through false and insidious representations and machinations by alleging technical and financial capacity, induced petitioner to enter into the Addendum Contract and the FTAA in order to repeatedly extend the option period within which to conduct the feasibility study. In essence, petitioner alleges that respondents, conspiring and confederating with one another, misrepresented under the Addendum Contract and FTAA that respondent Climax-Arimco possessed financial and technical capacity to put the project into commercial production, when in truth it had no such qualification whatsoever to do so. By so doing, respondents have allegedly caused damage not only to petitioner but also to the Republic of the Philippines.²⁷

It is apparent that the Panel of Arbitrators is bereft of jurisdiction over the Complaint filed by petitioner. The basic issue in petitioner’s Complaint is the presence of fraud or misrepresentation allegedly attendant to the execution of the Addendum Contract and the other contracts emanating from it, such that the contracts are rendered invalid and not binding upon the parties. It avers that petitioner was misled by respondents into agreeing to the Addendum Contract. This constitutes fraud which vitiated petitioner’s consent, and under Article 1390 of the Civil Code, is one of the grounds for the annulment of a voidable contract. Voidable or annullable contracts, before they are set aside, are existent, valid, and binding, and are effective and obligatory between the parties.²⁸ They can be ratified.²⁹

-whether the case involves void or voidable contracts is still a judicial question. It may, in some instances, involve questions of fact especially with regard to the determination of the circumstances of the execution of the contracts. But the resolution of the validity or voidness of the contracts remains a legal or judicial question as it requires the exercise of judicial function. It requires the ascertainment of what laws are applicable to the dispute, the interpretation and application of those laws, and the rendering of a judgment based thereon. Clearly, the dispute is not a mining conflict. It is essentially judicial. The complaint was not merely for the determination of rights under the mining contracts since the very validity of those contracts is put in issue.

The Complaint is not about a dispute involving rights to mining areas, nor is it a dispute involving claimholders or concessionaires. The main question raised was the validity of the Addendum Contract, the FTAA and the subsequent contracts. The question as to the rights of petitioner or respondents to the mining area pursuant to these contracts, as well as the question of whether or not petitioner had ceded his mining claims in favor of respondents by way of execution of the questioned contracts, is merely corollary to the main issue, and may not be resolved without first determining the main issue.

The Complaint is also not what is contemplated by Rep. Act No. 7942 when it says the dispute should involve FTAAs. The Complaint is not exclusively within the jurisdiction of the Panel of Arbitrators just because, or for as long as, the dispute involves an FTAA. The Complaint raised the issue of the constitutionality of the FTAA, which is definitely a judicial question. The question of constitutionality is exclusively within the jurisdiction of the courts to resolve as this would clearly involve the exercise of judicial power. The Panel of Arbitrators does not have jurisdiction over such an issue since it does not involve the application of technical knowledge and expertise relating to mining. This the Panel of Arbitrators has even conceded in its Orders dated 18 October 2001 and 25 June 2002. At this juncture, it is worthy of note that in a case,³¹ which was resolved only on 1 December 2004, this Court upheld the validity of the FTAA entered into by the Republic of the Philippines and WMC (Philippines), Inc. and constitutionality of Rep. Act No. 7942 and DENR Administrative Order 96-40.³² In fact, the Court took the case on an original petition, recognizing "the exceptional character of the situation and the paramount public interest involved, as well as the necessity for a ruling to put an end to the uncertainties plaguing the mining industry and the affected communities as a result of doubts case upon the constitutionality and validity of the Mining Act, the subject FTAA and future FTAAs, and the need to avert a multiplicity of suits."³³

Arbitration before the Panel of Arbitrators is proper only when there is a disagreement between the parties as to some provisions of the contract between them, which needs the interpretation and the application of that particular knowledge and expertise possessed by members of that Panel. It is not proper when one of the parties repudiates the existence or validity of such contract or agreement on the ground of fraud or oppression as in this case. The validity of the contract cannot be subject of arbitration proceedings. Allegations of fraud and duress in the execution of a contract are matters within the jurisdiction of the ordinary courts of law. These questions are legal in nature and require the application and interpretation of laws and jurisprudence which is necessarily a judicial function.

-We agree that the case should not be brought under the ambit of the Arbitration Law, but for a different reason. The question of validity of the contract containing the agreement to submit to arbitration will affect the applicability of the arbitration clause itself. A party cannot rely on the contract and claim rights or obligations under it and at the same time impugn its existence or validity. Indeed, litigants are enjoined from taking inconsistent positions. As previously discussed, the complaint should have been filed before the regular courts as it involved issues which are judicial in nature.

WHEREFORE, in view of the foregoing, the Petition for Review on Certiorari Under Rule 45 is DENIED. The Orders dated 18 October 2001 and 25 June 2002 of the Panel of Arbitrators are SET ASIDE. Costs against petitioner Jorge Gonzales.

Case Digest PEARSON vs.INTERMEDIATE APPELLATE COURT, G.R. No. 74454 September 3, 1998

.ALFRED PEARSON, for himself and as the attorney-in-fact of his co-heirs/co-successors-in-interest, namely: ELSIE PEARSON-FUENTES, HENRY PEARSON, WILLIAM PEARSON, JR., ROBERT PEARSON, EDUARD PEARSON, CHARLES PEARSON, FREDRIECH PEARSON and HARRY F. GASSER, vs.INTERMEDIATE APPELLATE COURT, Hon. REGIONAL TRIAL COURT, Branch 155, Pasig, Metro Manila, Hon. Presidential Executive Assistant; Hon. Minister of Natural Resources; Hon. Director of Mines; DIAMOND MINING CORPORATION, ROSARIO MINING DEVELOPMENT CORPORATION, and A. SORIANO CORPORATION, respondents.

G.R. No. 74454 September 3, 1998

 Case Digest

Director of Mines in Mines Administrative Case Nos. V-817 and V-818, upholding the preferential rights of private respondents to lease, possess, explore and develop their respective "DIAMOND" and "MARTIN" mining claims in question;

In his decision, the Director held that appellants (petitioners) failed to establish the existence of the conflict among the placer claims involved; that the "BAROBO" placer claims are null and void because their tie points, as described in the affidavits to reconstitute the declarations of location therefor, are not the natural objects of permanent monuments prescribed under the law and their geographical positions cannot be accurately determined; that, even if said "BAROBO" claims were validly located, the same have been abandoned due to the failure of the original locators thereof to perform assessment works therein, to file the corresponding affidavits of annual work obligations, and to pay the real estate taxes thereon; and that appellants (petitioners) are not the successors-in-interest of the Tambis Gold Dredging Co., Inc., hence they have no legal personality to institute the adverse claims. ⁸

In a Decision dated August 31, 1981, the Office of the President revoked the order allowing ocular inspection, dismissed the appeal for lack of merit, and released all monies that might have been deposited by the Mining Companies

Issues:

1.Whether or not respondent IAC committed reversible error in assuming jurisdiction over the private respondents' petition for certiorari assailing the trial court's interlocutory orders?

We find the petition entirely devoid of merit. Thus we see, in regard to the first principal issue, no reversible error committed by the IAC when it assumed jurisdiction over private respondents' petition for certiorari involving interlocutory orders of the trial court.

we find that respondent appellate court correctly assumed jurisdiction over CA-G.R. No. 15439.

It has also been emphasized in a number of cases ²⁸ that while this Court has concurrent jurisdiction with the Court of Appeals and the Regional Trial Courts (for writs enforceable within their respective regions), to issue writs of mandamus, prohibition or certiorari, the litigants are well advised against taking a direct recourse to this Court. Instead, they should initially seek the proper relief from the lower courts. As a court of last resort, this Court should not be burdened with the task of dealing with causes in the first instance. Where the issuance of an extraordinary writ is concurrently within the competence of the CA or RTC, litigants must observe the principle of hierarchy of courts. This Court's original jurisdiction to issue extraordinary writs should be exercised only where absolutely necessary, or where serious and important reasons therefor exist.

Secondly, petitioner's contention that the lower court's orders of October 15, 1982 and December 21, 1982, being merely interlocutory, are not correctible by certiorari, ignores this Court's consistent ruling, to wit:

On the procedural issues raised, we hold that where an interlocutory order was allegedly issued with grave abuse of discretion amounting to lack or excess of jurisdiction, such order may be questioned before the Court on a petition for certiorari under Rule 65 of the Revised Rules of Court. To delay the review of the order until the appeal from the decision of the main case would not afford the party adversely affected by the said order a speedy, plain and adequate remedy. ²⁹

In Marcelo vs. De Guzman, ³⁰ we held that although, as a general rule, an interlocutory order is not appealable until after the rendition of the judgment on the merits, an exception is made where the remedy of appeal cannot afford an adequate and expeditious relief. Does the controversy at hand fall under the exception where interlocutory orders may be the subject of a petition for certiorari in the IAC? In our view, it does. For the trial court clearly acted outside of its jurisdiction when it issued the assailed orders creating the Ad Hoc Committee and scheduling the ocular inspection.

To begin with the lower court did not have jurisdiction over the mining dispute. With the issuance of Presidential Decree Nos. 99-A, 309, and 463, ³³ the procedure of adjudicating conflicting mining claims has been made completely administrative in character, with the President as the final appeal authority. ³⁴ Section 50 of P.D. 463, providing for a modernized system of administration and disposition of mineral lands, to promote and encourage the development and exploitation thereof, mandates on the matter of "Protests, Adverse Claims and Appeals," the following procedure:

Appeals — Any party not satisfied with the decision or order of the Director may, within five (5) days from receipt there of appeal to the Secretary. Decisions of the Secretary are likewise appealable within five (5) days from receipt thereof by the affected party to the President of the Philippines whose decision shall be final and executory.

It should be noted that before its amendment, the Mining Law (C.A. No. 137) required that after the filing of adverse claim with the Bureau of Mines, the adverse claimant had to go to a court of competent jurisdiction for the settlement of the claim. With the amendment seeking to expedite the resolution of mining conflicts, the Director of Mines became the mandatory adjudicator of adverse claims, instead of the Court of First instance. ³⁵ Thus, it cannot escape notice that under Section 61 of the Mining Law, as amended by Republic Act Nos. 746 and 4388, appeals from the decision of the Secretary of Agriculture and Natural Resources (then Minister of Natural Resources) on conflicts and disputes arising out of mining locations may be made to the Court of Appeals or the Supreme Court as the case may be. In contrast, under the decrees issued at the onset of martial law, it has been expressly provided that the decisions of the same Secretary in mining cases are appealable to the President of the Philippines under Section 50 of the Mineral Resources Development Decree of 1974 (P.D. No. 463) and Section 7 of P.D. No. 1281 in relation to P.D. No. 309. ³⁶

The trend at present is to make the adjudication of mining cases a purely administrative matter. ³⁷ This does not mean that administrative bodies have complete rein over mining disputes. The very terms of Section 73 of the Mining Law, as amended by R.A. No. 4388, in requiring that the adverse claim must "state in full detail the nature, boundaries and extent of the adverse claim" show that the conflicts to be decided by reason of such adverse claim refer primarily to questions of fact. The controversies to be submitted and resolved by the Director of Mines under the sections referred only to the overlapping of claims and administrative matters incidental thereto. ³⁸ Questions and controversies that are judicial, not administrative, in nature can be resolved only by the regular courts in whom is vested the judicial power to resolve and adjudicate such civil disputes and controversies between litigants in accordance with the established norms of law and justice. ³⁹ Decisions of the Supreme Court on mining disputes have recognized a distinction between (1) the primary powers granted by pertinent provisions of law to the then Secretary of Agriculture and Natural Resources (and the bureau directors) of an executive or administrative nature, such as "granting of license, permits, lease and contracts, or approving, rejecting, reinstating or cancelling applications, or deciding conflicting applications," and (2) controversies or disagreements of civil or contractual nature between litigants which are questions of a judicial nature that may be adjudicated only by the courts of justice. ⁴⁰

This distinction is carried on even under the present law. ⁴¹ Findings of fact by the Mines Adjudication Board, which exercises appellate jurisdiction over decisions or orders of the panel of arbitrators, shall be conclusive and binding on the parties, and its decision or order shall be final and executory. ⁴² But resort to the appropriate court, through a petition for review by certiorari, involving questions of law, may be made within thirty days from the receipt of the order or decision of the Mines Adjudication Board. ⁴³

2. Assuming the IAC had validly assumed jurisdiction, whether or not it committed reversible errors of law in its decision now before us?

As found by the IAC:

It will not be amiss to state here that the basis of abandonment of the Pearsons of their mining claims is well established by the evidence already presented to the Bureau of Mines and to the Ministry of Natural Resources. We need only to refer to the following reasons found in the decision of the Ministry of Natural Resources, dated October 29, 1975, to wit:

. . . assuming, in gratia argumentis, that the "BAROBO" placer claims were validly located, said claims have been abandoned for failure of the claim owners thereof to conduct works therein, to file the affidavits of annual work obligations, and to pay the real estate taxes.

The evidence indicate that affidavits of annual assessment works have been filed for the "BAROBO-2" to "BAROBO-5" placer claims from 1946 to 1951. However, the affidavits for the years 1957 to 1974, respectively were all filed only on April 8, 1975. Thus, during the latter years, no proof was submitted to show compliance with the annual assessment works. So, at the time the "DIAMOND" and "MARTIN" placer claims were located and registered, the "BAROBO" claims had already been deemed abandoned and the areas covered thereby open to relocation."

Said decision also took into account Executive Order No. 141, dated August 1, 1968, which provides:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the vested in me by law, do hereby declare unpatented mining claims which were located more than thirty years ago under the provisions of the Philippine Bill of 1902, as amended, and which had not complied with the annual assessment requirement, as abandoned and their declaration of location cancelled. ⁴⁴

Well established is the rule that findings of fact made in the decision of the Minister of Natural Resources (then Secretary of Agriculture and Natural Resources) appealed from will not be reviewed by this Court unless there has been a grave abuse of discretion in making said findings by reason of the total absence of competent evidence in support thereof. ⁴⁵ As shown above, the public officials' judgments are well supported by substantial evidence. Moreover, by the Pearsons' own admission, they failed to file the affidavit of annual assessment works and to pay the real estate taxes from 1957-1974, which were filed and paid only later in 1974. ⁴⁶

In Santa Rosa Mining Co. vs. Hon Minister of Natural Resources Jose Leido, Jr. and Director of Mines Juanito Fernandez ⁴⁷, this Court held that while it is recognized that the right of a locator of a mining claim is a property right, such right is not absolute. It is merely a possessory right, more so where petitioner's claims are still unpatented. Mere location does not mean absolute ownership over the affected land or located claim. It merely segregates the located land or area from the public domain by barring other would-be locators from locating the same and appropriating for themselves the minerals found therein. To rule otherwise would imply the location is all that is needed to acquire and maintain rights over a located mining claim. This cannot be approved or sanctioned because it is contrary to the intention of the lawmaker that the locator should faithfully and consistently comply with the requirement for annual works and improvements in the located mining claims. ⁴⁸ Not only should there be a valid and subsisting location of the mineral land but also there should be, thereafter, continuous compliance with all the requirements of law such as the performance of annual assessment works and payment of real estate taxes. ⁴⁹

While it is understandable that petitioners would want this Court to reassess the evidence presented before the mining officials to support their plea of not having abandoned the mining claim involved, this cannot be done now in this proceeding, for this Court is not a trier of facts. Moreover, we find no cogent, much less compelling, reason to depart from established practice and precedents. For where, as in the case at bar, there is no showing that there was fraud, collusion, arbitrariness, illegality, imposition or mistake on the part of the Office of the President or a department head in rendering a questioned decision; nor a total lack of substantial evidence to support their administrative decisions, their factual findings and conclusions are entitled to great weight and respect, and will not be interfered with. ⁵⁰

WHEREFORE, the instant petition is DENIED, and the assailed Orders and Decisions, particularly the Decision of the Intermediate Appellate Court in AC-G.R. No. 15439, including the Order of dismissal of Civil Case No. 45053, are hereby AFFIRMED.

Case Digest REPUBLIC v. vs. MARCOPPER MINING CORPORATION,. G.R. No. 137174 July 10, 2000

REPUBLIC OF THE PHILIPPINES, Represented by the POLLUTION ADJUDICATION BOARD (DENR),petitioner, vs. MARCOPPER MINING CORPORATION, respondent.

G.R. No. 137174               July 10, 2000

case digest

Respondent Marcopper Mining Corporation (MMC) was issued a temporary permit to operate a tailings⁶ sea disposal system under TPO No. POW-85-454-EJ for the period October 31, 1985 to October 21, 1986. Before it expired, MMC filed an application for the renewal thereof with the National Pollution Control Commission (NPCC). On September 20, 1986, MMC received a telegraphic order from the NPCC directing the former to "(i)mmediately cease and desist from discharging mine tailings into Calancan Bay." The directive was brought about through the efforts of certain religious groups which had been protesting MMC’s tailings sea disposal system. MMC requested the NPCC to refrain from implementing the aforesaid directive until its adoption of an alternative tailings disposal system

It is understood, however, that during the efficacy of this restraining order, respondent-appellant shall immediately undertake, at a cost of not less than P30,000.00 a day, the building of artificial reefs and planting of sea grass, mangroves and vegetation on the causeway of Calancan Bay under the supervision of the Pollution Adjudication Board and subject to such guidelines as the Board may impose.

SO ORDERED."¹⁰

In line with the directive from the Office of the President, the Calancan Bay Rehabilitation Project (CBRP) was created, and MMC remitted the amount of P30,000.00 a day, starting from May 13, 1988 to the Ecology Trust Fund (ETF) thereof. However, on June 30, 1991, MMC stopped discharging its tailings in the Bay, hence, it likewise ceased from making further deposits to the ETF.

From the issuance of the Order on May 13, 1988 until the cessation of the tailings disposal on June 30, 1991, MMC made its contribution to the ETF in the total amount of Thirty-Two Million Nine Hundred and Seventy-Five Thousand Pesos (P32,975,000.00). Thereafter, MMC filed a Motion dated July 9, 1991 manifesting that it would discontinue its contributions/deposits to the ETF since it had stopped dumping tailings in the Bay. MMC prayed that the Order issued by the Office of the President on May 13, 1988 be lifted.

On February 5, 1993, the Office of the President rendered a decision in O.P. Case No. 3802 dismissing the appeal; affirming the cease and desist Order issued by the PAB; and lifting the TRO dated May 13, 1988. The Office of the President resolved the appeal in this wise:

"This brings to the fore the primordial issue of whether or not the Secretary of Environment and Natural Resources gravely erred in declaring the TPO No. POW-86-454-EJ issued to respondent-appellant MMC expired on February 10, 1987, and in ordering the latter to cease and desist from discharging mine tailings into Calancan Bay.

Respondent-appellant argues that the cease and desist orders were issued by the PAB ex-parte, in violation of its procedural and substantive rights provided for under Section 7 (a) of P.D. No. 984 requiring a public hearing before any order or decision for the discontinuance of discharge of a sewage or industrial wastes into the water, air or land could be issued by the PAB.

We are not persuaded.

Section 7(a) of P.D. No. 984, reads in part:

"Sec. 7(a) Public Hearing. – Public hearing shall be conducted by the Commissioner, Deputy Commissioner or any senior official duly designated by the Commissioner prior to issuance or promulgation of any order or decision by the Commissioner requiring the discontinuance of discharge of sewage, industrial wastes and other wastes into the water, air or land resources of the Philippines as provided in the Decree: provided, that whenever the Commission finds a prima facie evidence that the discharged sewage or wastes are of immediate threat to life, public health, safety or welfare, or to animal or plant life, or exceeds the allowable standards set by the Commission, the Commissioner may issue an ex-parteorder directing the discontinuance of the same or the temporary suspension or cessation of operation of the establishment or person generating such sewage or wastes without the necessity of a prior public hearing. x x x . (underscoring supplied).

p then, it is self-indulgent nonsense to assume that the DENR Secretary, acting as PAB Chairman, is absolutely without authority to issue an ex-parte order requiring the discontinuance of discharge of sewage or other industrial wastes without public hearing. As can be gleaned from the afroequoted proviso, this authority to issue an ex-parte order suspending the discharge of industrial wastes is postulated upon his finding of prima-facieevidence of an imminent "threat to life, public health, safety or welfare, to animal or plant life or exceeds the allowable standards set by the Commission

"The issue before this Board is whether Marcopper Mining Corporation is still obliged to remit the amount of P30,000.00 to the CBRP. The answer by the Order from the Office of the President dated 13 May 1988, which states that the obligation on the part of Marcopper Mining to pay the amount of P30,000.00 per day for the rehabilitation of Calancan Bay is binding only during the efficacy of the said Order.

The record further shows that on 05 February 1993, the Office of the President lifted its Order dated 13 May 1988. This means that as of the date of the lifting, Marcopper Mining Corporation no longer had any obligation to remit the amount of P30,000.00 to the CBRP. Thus, Marcopper’s obligation only runs from 13 May 1988 to 05 February 1993. Beyond the cut-off date of 05 February 1993, Marcopper is no longer obligated to remit the amount of P30,000.00 per day to the CBRP.

It does not matter whether Marcopper was no longer dumping its tail minings into the sea even before the cut-off date of 05 February 1993. The obligation of Marcopper to pay the amount of P30,000.00 to the CBRP arises from the Office of the President Order dated 13 May 1988, not from it dumping of mine tailings.

WHEREFORE, Marcopper Mining Corporation is hereby ordered to pay the CBRP the amount of P30,000.00 per day, computed from the date Marcopper Mining Corporation stopped paying on 01 July 1991, up to the formal lifting of the subject Order from the Office of the President on 05 February 1993.

SO ORDERED."¹⁴

Issues:

I

The Court of Appeals erred in ruling that Republic Act No. 7942 (otherwise known as the Philippine Mining Act of 1995) repealed the provisions of Republic Act No. 3931, as amended by Presidential Decree No. 984, (otherwise known as the National Pollution Control Decree of 1976), with respect to the power and function of petitioner Pollution Adjudication Board to issue, renew or deny permits for the discharge of the mine tailings.

From the foregoing, it readily appears that the power of the mines regional director does not foreclose PAB’s authority to determine and act on complaints filed before it. The power granted to the mines regional director to issue orders requiring the contractor to remedy any practice connected with mining or quarrying operations or to summarily suspend the same in cases of violation of pollution laws is for purposes of effectively regulating and monitoring activities within mining operations and installations pursuant to the environmental protection and enhancement program undertaken by contractors and permittees in procuring their mining permit. While the mines regional director has express administrative and regulatory powers over mining operations and installations, it has no adjudicative powers over complaints for violation of pollution control statutes and regulations.

True, in Laguna Lake Development Authority vs. Court of Appeals,²³ this Court held that adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB) except where the special law provides for another forum. However, contrary to the ruling of the Court of Appeals, RA 7942 does not provide for another forum inasmuch as RA 7942 does not vest quasi-judicial powers in the Mines Regional Director. The authority is vested and remains with the PAB.

Instead, it appears that the legislature intended to maximize the exploration, development and utilization of the country’s mineral resources to contribute to the achievement of national economic and social development with due regard to the social and environmental cost implications relative thereto. The law intends to increase the productivity of the country’s mineral resources while at the same time assuring its sustainability through judicious use and systematic rehabilitation. Henceforth, the Department of Environment and Natural Resources as the primary government agency responsible for the conservation, management, development, and proper use of the State’s mineral resources, through its Secretary, has the authority to enter into mineral agreements on behalf of the Government upon the recommendation of the Director, and to promulgate such rules and regulations as may be necessary to carry out the provisions of RA 7942.²⁶ The PAB and the Mines Regional Director, with their complementary functions and through their combined efforts, serve to accomplish the mandate of RA 3931 (National Pollution Control Decree of 1976) as amended by PD 984 and EO 192 and that of RA 7942 (Philippine Mining Act of 1995).

We must sustain the appellate court on this point on account of the testimony of Mr. Edel Genato.1âwphi1 Further, we note that the Office of the President never objected nor ruled on the manifestation dated July 9, 1991 filed by MMC that it would stop paying since it already ceased dumping mine tailings into the bay. Still further, the order of the OP directing MMC to rehabilitate at a cost of P30,000.00 a day "during the efficacy of the restraining order" had become functus officio since MMC voluntarily stopped dumping mine tailings into the bay.

II

Respondent Marcopper Mining Corporation bound itself to pay the amount of P30,000.00 a day for the duration of the period starting May 13, 1988 up to February 5, 1993.

we now go to the issue of whether the appellate court erred in ruling that there is no basis for further payments by MMC to the Ecology Trust Fund of the Calancan Bay Rehabilitation Project considering that MMC "convincingly argued and which respondent unsatisfactorily rebuked, the existing fourteen (14) million pesos in the ETF is more than enough to complete the rehabilitation project." Indeed, the records reveal that witness for PAB, Mr. Edel Genato, who is the Technical Resource person of the PAB for the project admitted that the funds in the ETF amounting to about Fourteen Million Pesos are more than sufficient to cover the costs of rehabilitation. 

III

Respondent Marcopper Mining Corporation was not deprived of due process of law when petitioner Pollution Adjudication Board directed it to comply with its long-existing P30,000.00 per day obligation under the Order of the Office of the President dated May 13, 1988.¹⁵

We must sustain the appellate court on this point on account of the testimony of Mr. Edel Genato.1âwphi1 Further, we note that the Office of the President never objected nor ruled on the manifestation dated July 9, 1991 filed by MMC that it would stop paying since it already ceased dumping mine tailings into the bay. Still further, the order of the OP directing MMC to rehabilitate at a cost of P30,000.00 a day "during the efficacy of the restraining order" had become functus officio since MMC voluntarily stopped dumping mine tailings into the bay.

Case Digest PNOC-ENERGY DEVELOPMENT CORPORATION (PNOC-EDC),vs.EMILIANO G. VENERACION, JR., G.R. No. 129820 November 30, 2006

PNOC-ENERGY DEVELOPMENT CORPORATION (PNOC-EDC),vs.EMILIANO G. VENERACION, JR.,

G.R. No. 129820             November 30, 2006

This case involves the conflicting claims of the petitioner Philippine National Oil Corporation-Energy Development Corporation and the respondent over the mining rights over Block 159 of the Malangas Coal Reservation, Alicia, Zamboanga del Sur.

On 31 January 1989, respondent applied with the Mines and Geo-Sciences Development Services, DENR, Region IX, Zamboanga City for a Declaration of Location (DOL) over Block 159 of the Malangas Coal Reservation, situated at Barangays Payongan and Kauswagan, Alicia, Zamboanga del Sur. On 18 May 1989, the Office of the Regional Executive Director (RED) of the DENR informed the respondent that his DOL cannot be registered since Block 159 was part of the Malangas Coal Reservation, as provided under Proclamation No. 284, issued by the President on 19 July 1938.² With the endorsement of the Office of Energy Affairs (OEA) and the DENR Secretary, the respondent petitioned the Office of the President for the withdrawal of Block 159 from the coal reservation and its conversion into a mineral reservation.³

The petitioner applied for a mineral prospecting permit over Block 159 (and Blocks 120 and 160) with the OEA, which the latter granted on 4 September 1989. The Malangas Coal Reservation was, at that time, under the administration of the OEA.⁴ When it had initially applied for a mineral prospecting permit over lands within the Malangas Coal Reservation, the OEA advised it to obtain the permission of the Bureau of Mines and Geo-Sciences (BMGS).⁵

On 18 October 1991, petitioner submitted to the DENR an application/proposal for a Mineral Production Sharing Agreement (MPSA) over Blocks 120, 159 and 160 of the Malangas Coal Reservation.⁶

On 21 February 1992, the Officer-In-Charge Regional Technical Director Dario R. Miñoza of the Mines and Geo-Sciences Developmental Service (MGDS) advised the petitioner to amend its application for MPSA by excluding Block 159 as the same is covered by the application of the respondent.⁷ Nevertheless, the petitioner did not exclude Block 159 from its MPSA. Records also show that it had not applied for nor was it able to obtain an Exploration Permit from the BMGS over Block 159.

The MAB noted that petitioner did not file for an exploration permit nor applied for the exclusion of Block 159. Moreover, petitioner filed a MPSA on 18 October 1991, or almost six (6) months prior to the issuance of Proclamation No. 890 excluding Block 159 from the Malangas Coal Reservation and allowing its disposition. Thus, the application for a MPSA over Block 159, while it was still part of a government reservation other than a mineral reservation, was erroneous and improper and could not have been legally accepted. And, since the records show that only one MPSA was filed after the issuance of Proclamation 890 – that of the respondent’s, the preferential right over Block 159 was acquired by the respondent. The MAB, nevertheless, pointed out that the said preferential right does not necessarily lead to the granting of the respondent’s MPSA, but merely consists of the right to have his application evaluated and the prohibition against accepting other mining applications over Block 159 pending the processing of his MPSA.

Issues

 (1) whether or not the petitioner has already lost its right to appeal the RED’s Order dated 12 April 1993;

This Court finds no merit in this Petition. Petitioner’s insistence that the 30-day reglementary period provided by Section 61 of Commonwealth Act No. 137, as amended, applies, cannot be sustained by this Court. By providing a five-day period within which to file an appeal on the decisions of the Director of Mines and Geo-Sciences, Presidential Decree No. 463 unquestionably repealed Section 61 of Commonwealth Act No. 137.

 In the instant case, petitioner failed to state any compelling reason for not filing its appeal within the mandated period. Instead, the records show that after failing to comply with the period within which to file their motion for reconsideration on time, they again failed to file their appeal before the Office of the DENR Secretary within the time provided by law.

 (2) whether or not the petitioner acquired a preferential right on mining rights over Block 159.

Even if petitioner had not lost its right to appeal, it cannot claim any mining rights over Block 159 for failure to comply with the legal requirements. Petitioner applied for an MPSA with the DENR on 18 October 1991, prior to the release of Block 159 from the Malangas Coal Reservation under Proclamation No. 890 on 13 April 1992. Thus, the provisions on the acquisition of mining rights within a government reservation other than a mineral reservation under Presidential Decree No. 463 and the Consolidated Mines Administrative Order (CMAO) should apply.

As a general rule, prospecting and exploration of minerals in a government reservation is prohibited under Section 13 of Presidential Decree No. 463. However, the same rule provides an exception involving instances when the government agency concerned allows it.

Section 13. Areas Closed to Mining Location. – No prospecting and exploration shall be allowed:

(a) In military, and other Government reservations except when authorized by the proper Government agency concerned.

Section 8 of Presidential Decree No. 463 reiterates the rule and clarifies it further by stating that prospecting, exploration and exploitation of minerals on reserved lands other than mineral reservations may be undertaken by the proper government agency. As an exception to this rule, qualified persons may undertake the said prospecting, exploration and exploitation when the said agencies cannot undertake them.

Section 8. Prospecting, Exploration and Exploitation of Minerals in Reserved Lands. – Prospecting, exploration and exploitation of minerals in reserved lands other than mineral reservations may be undertaken by the proper government agency. In the event that the said agencies cannot undertake the prospecting, exploration and exploitation of minerals in reserved lands, qualified persons may be permitted to undertake such prospecting, exploration and exploitation in accordance with the rules and regulations promulgated by the Secretary [Minister]. The right to exploit the minerals found therein shall be awarded by the President under such terms and conditions as recommended by the Director and approved by the Secretary [Minister]: Provided, That the party who undertook prospecting, exploration and exploitation of said are shall be given priority.

Notwithstanding the provisions of the preceding paragraph, a special permit may be issued by the Director to the exploration permitee to extract, remove and dispose of minerals in limited quantities as verified by the Bureau of Mines [Director of Mines and Geo-Sciences].

Section 15 of the CMAO is more straightforward when it states that government reserved lands are open for prospecting, subject to the rules and regulations provided therein.

SEC. 15. Government Reserved Land. – Lands reserved by the Government for purposes other than mining are open to prospecting. Any interested party may file an application therefore with the head of the agency administering said land, subject always to compliance with pertinent laws and rules and regulations covering such reserved land. Such application shall be acted upon within thirty (30) days. In such cases, the compensation due the surface owner shall accrue equally to the agency administering the reserved land and the Bureau of Mines.

The law enumerates the following requirements: (1) a prospecting permit from the agency that has jurisdiction over the area, in this case, the OEA;³¹ (2) an exploration permit from the BMGS;³² (3) if the exploration reveals the presence of commercial deposit, the permitee applies before the BMGS for the exclusion of the area from the reservation;³³ (4) granting by the president of the application to exclude the area from the reservation;³⁴ and (5) a mining agreement approved by the DENR Secretary.

In this case, petitioner complied with the first requirement and obtained a prospecting permit from the OEA.1âwphi1 In its correspondence with the petitioner, the OEA, however, advised the petitioner on two separate occasions to obtain a "prospecting permit" from the BMGS, although the OEA was probably referring to an exploration permit.³⁵ The petitioner did not apply for an exploration permit with the BMGS, nor would the BMGS have granted petitioner an exploration permit because when petitioner wrote to the BMGS informing the latter of its intention to enter into an MPSA with the DENR over Block 159, the BMGS informed the petitioner that the respondent’s claim over Block 159 had already preceded that of the petitioner.³⁶ The advice given by the BMGS was justified since at that time, the respondent already had a pending application for the exclusion of Block 159 from the Malangas Coal Reservation. Thereafter, the petitioner filed his MPSA application, without complying with the second, third and fourth requisites. Since it ignored the sound advice of the OEA and the BMGS, the government agencies concerned, and stubbornly insisted on its incorrect procedure, petitioner cannot complain now that its MPSA was revoked for failure to comply with the legal requirements.

In contrast, the respondent applied for a DOL as early as 30 January 1989. The DENR Regional Office refused to register the respondent’s DOL since Block 159 was still part of the Malangas Coal Reservation and advised the respondent to apply for the exclusion of the area from the reservation. The respondent followed this advice. The BMGS then treated the respondent’s application for a DOL as an application for an exploration permit and caused a verification report of the area applied for, as provided under Section 99 of the CMAO.³⁷ Upon the application of the respondent, the OEA and thereafter the DENR Secretary endorsed the respondent’s application for the exclusion of the area from the reservation.³⁸ This application was granted by the President, through Proclamation No. 890, which provided that the mining rights to Block 159 will be disposed of in accordance with Executive Order No. 279. On 30 July 1992, respondent filed his MPSA.³⁹ On 12 April 1993, the RED of Zamboanga City ordered that the respondent’s MPSA be given due course.⁴⁰ Although the respondent’s applications may not follow the strict letter of the law, there was substantial compliance with the requirements of the law. Hence, the respondent was able to acquire a preferential right on the mining claims over Block 159, as provided under Section 101 of the CMAO.

Even if it were to be assumed that the respondent failed to comply with these requirements, this would not be fatal to his cause since he filed his MPSA on 31 July 1992, after the issuance of Proclamation No. 890; therefore, the provisions on the application of mining rights over government reservations would no longer apply to him because Block 159 was already converted into a mineral reservation, wherein a different set of rules would apply. The only effect of his failure to comply with the requirements CMAO on government reservations is that he loses the preferential right over the area involved. In this case, the respondent was the only applicant to the mining rights over Block 159, apart from the petitioner who was not qualified for failure to comply with the legal requirements. Proclamation No. 890 specifically provides that Executive Order No. 279 should be applied. Records indicate that the provisions of Executive Order No. 279 have been complied with.⁴¹

IN VIEW OF THE FOREGOING, the instant Petition is DENIED. The assailed Decision of the Mines Adjudication Board is hereby AFFIRMED. No costs.