Masing & Sons Development Corporation (MSDC) v Rogelio (Labor Standards)

Masing & Sons Development Corporation (MSDC) v Rogelio 

GR No. 161787 

April 27, 2011  

FACTS:   

Rogelio is an employee of the Ibajay branch of MSDC, with Lim as Branch Manager. In 1991, he availed himself of the SSS retirement benefits, and in order to facilitate the grant of such benefits, he entered into an internal arrangement with Chan and MSDC to the effect that MSDC would issue a certification of his separation from employment notwithstanding that he would continue working as a laborer in the Ibajay branch but it was only on 1997 that Rogelio was paid his last salary but without retirement benefits, he was 67 years old at that time.  

Rogelio then filed the case for payment of his retirement benefits before the Labor Arbiter. MSDC defense is that they were not engaged in copra buying in Ibajay and they did not ever register in such business in any government agency and that Lim is an independent copra buyer.  

LA: dismissed. no employer-employee relationship between Rogelio & MSDC. NLRC: dismissed. no double retirement in the private sector. CA: granted. Rogelio is an employee of Chan and MSDC, benefits under RA 7641 is apart from the retirement benefits that a qualified employee could claim under the Social Security Law.  

Hence, Masing appealed to the Supreme Court.  

ISSUE:  WON Rogelio had remained the Company's employee from July 6, 1989 up to March 17, 1997; WON Rogelio is entitled to retirement benefits.  

HELD:  YES,  Rogelio is entitled to retirement benefits.  

Even if there is a Certification of Separation from Employment dated August 10, 1991, "... in light of the incontrovertible physical reality that petitioner and his co-workers did go to work day in and day out for such a long period of time, doing the same thing, and in the same place, without apparent discontinuity, except on paper, these documents cannot be taken at their face value."  

In case of doubt, the doubt is resolved in favor of labor, in favor of the safety and decent living for the laborer as mandated by Article 1702 of the Civil Code. The reality of the petitioner's toil speaks louder than words.  

RATIO: 

(1) In any controversy between a laborer and his master, doubts reasonably arising from the evidence are resolved in favor of the laborer. 

(2) The beneficent provisions of Article 287 of the Labor Code, is apart from the retirement benefits that can be claimed by a qualified employee under the social security law. 

(3) The benefits was enacted as a labor protection measure and as a curative statute to respond, in part at least, to the financial well-being of workers during their twilight years soon following their life of labor, can be extended not only from the date of its enactment but retroactively to the time the employment contracts started."  

APPLICABLE LAWS: 

"ART. 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract.  

"In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements:  

Provided, however, That an employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein.  

"In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year."  

"Unless the parties provide for broader inclusions, the term 'one-half (1/2) month salary' shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. "Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision.  

"Violation of this provision is hereby declared unlawful and subject to the penal provisions provided under Article 288 of this Code." 

Calalang v Williams (Labor Standards)

Calalang v Williams 

GR No. 47800 

December 2, 1940  

FACTS:    

Pursuant to the power delegated to it by the Legislature, the Director of Public Works promulgated rules and regulations pertaining to the closure of Rosario Street and Rizal Avenue to traffic of 

animal-drawn vehicles for a year from the date of the opening of the Colgante Bridge to traffic.   

Among others, the petitioner Calalang, concerned citizen, aver that the rules and regulations complained of:  

 infringe upon constitutional precept on the promotion of social justice to insure the well being and economic security of all people; 

 and that it constitutes unlawful interference with legitimate business or trade and abridge the right to personal liberty and freedom of locomotion.  

ISSUE:  Whether or not the rules and regulation promote social justice.  

HELD:  

YES, it still promotes social justice. In enacting the said law, the National Assembly was prompted by considerations of public convenience and welfare.  

The promotion of Social Justice is to be adhered not through a mistaken sympathy towards any given group (e.g. the poor - because social justice is bringing the greatest good to the greatest number, not necessarily just the poor like the drivers of the animal-drawn vehicles).  

Social justice:   

: "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and the equalization of social and economic force by the State so that justice in its rational and objectively secular conception may at least be approximated.      

: the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the     community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex.      

: must be founded on the recognition of the necessity of interdependence among divers and diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount     objective of the state of promoting the health, comfort and quiet of all persons, and of bringing about "the greatest good to the greatest number."  

RATIO: 

(1) Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over authority because then society will fall into anarchy.  

(2)The citizen should achieve the required balance of liberty and authority in his mind through education and personal discipline so that there may be established the resultant equilibrium, which means peace and order and happiness of all. 

Paat v CA (Natural Resources)

PAAT v CA 

G.R. No. 111107 

January 10, 1997  

FACTS: 

On May 19, 1989 when the truck of private respondent Victoria de Guzman while on its way to Bulacan from San Jose, Baggao, Cagayan, was seized by the Department of Environment and Natural Resources (DENR, for brevity) personnel in Aritao, Nueva Vizcaya because the driver could not produce the required documents for the forest products found concealed in the truck.  

LOWER COURTS: 

* CENRO: Petitioner Jovito Layugan, the Community Environment and Natural Resources Officer (CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order of confiscation of the truck and gave the owner thereof fifteen (15) days within which to submit an explanation why the truck should not be forfeited.  Private respondents, however, failed to submit the required explanation.

* RED- DENR: On June 22, 1989,i[1] Regional Executive Director Rogelio Baggayan of DENR sustained petitioner Layugan's action of confiscation and  ordered the  forfeiture of the truck invoking  Section 68-A of Presidential Decree No. 705 as amended by Executive Order No. 277.  Private respondents filed a letter of reconsideration dated June 28, 1989 of the June 22, 1989 order of Executive Director Baggayan, which was, however, denied in a subsequent order of July 12, 1989.ii[2]

* DENR-SECRETARY (Pending resolution)

* RTC (action for replevin): denied motion to dismiss by Paat (DENR-RED)

* CA (review): denied, has legal questions involved.  

ISSUES & RULINGS:  

(1) Without violating the principle of exhaustion of administrative remedies, may an action for replevin prosper to recover a movable property which is the subject matter of an administrative forfeiture proceeding in the Department of Environment and Natural Resources pursuant to Section 68-A of P. D. 705, as amended, entitled The Revised Forestry Code of the Philippines?  

NO, before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him.  Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy should be exhausted first before court's judicial power can be sought. The premature invocation of court's intervention is fatal to one's cause of action.   

(2) Are the Secretary of DENR and his representatives empowered to confiscate and forfeit conveyances used in transporting illegal forest products in favor of the government?  

YES.  

“SECTION 68-A. Administrative Authority of the Department or His Duly Authorized Representative To Order Confiscation. In all cases of violation of this Code or other forest laws, rules and regulations, the Department Head or his duly authorized representative, may order the confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned, and all conveyances used either by land, water or air in the commission of the offense and to dispose of the same in accordance with pertinent laws, regulations and policies on the matter.” (Underline ours)  

It is, thus, clear from the foregoing provision that the Secretary and his duly authorized representatives are given the authority to confiscate and forfeit any  conveyances utilized in violating the Code or other forest laws, rules and regulations. The phrase “to dispose of the same” is broad enough to cover  the act of forfeiting   conveyances in favor of the government. The only limitation is that it should be made “in accordance with pertinent laws, regulations or policies on the matter.”  

“SECTION 68. xxx  

xxx  

The court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipments, implements and tools illegaly [sic] used in the area where the timber or forest products are found.” (Underline ours)  

A reading, however, of the law persuades us not to go along with private respondents' thinking not only because the aforequoted provision apparently does not mention nor include “conveyances” that can be the subject of confiscation by the courts, but to a large extent, due to the fact that private respondents' interpretation of the subject provision unduly restricts the clear intention of the  law and inevitably reduces the other provision of Section  68-A.  

It is interesting to note that Section 68-A is a new provision authorizing the DENR to confiscate, not only ‘conveyances,' but forest products as well. On the other hand, confiscation of forest products by the ‘court' in a criminal action has long been provided for in Section 68. If as private respondents insist, the power on confiscation cannot be exercised except only through the court under Section 68, then Section 68-A would have no purpose at all.  

it is clear that a suit for replevin can not be sustained against the petitioners for the subject truck taken and retained by them for administrative forfeiture proceedings in pursuant to Section 68-A of the P. D. 705, as amended.  

Section 68-A of P.D. 705, as amended, unquestionably warrants the confiscation as well as the disposition by the Secretary of DENR or his duly authorized representatives of the conveyances used in violating the provision of forestry laws. Evidently, the continued possession or detention of the truck by the petitioners for administrative forfeiture proceeding is legally permissible, hence , no wrongful detention exists in the case at bar.  

OBITER DICTA:  

(1) the principle of exhaustion of administrative remedies as tested by a battery of cases is not an ironclad rule. This doctrine  is a relative one and its flexibility is called upon by the  peculiarity and uniqueness of the factual and circumstantial settings of a case.  Hence, it is disregarded  

(1) when there is a violation of due process,
(2) when the issue involved is purely a legal question,
(3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction,
(4) when there is estoppel on the part of the administrative agency concerned,
(5) when there is irreparable injury,
(6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter,
(7) when to require exhaustion of administrative remedies would be unreasonable,
(8) when it would amount to a nullification of a claim,
(9) when the subject matter is a private land in land case proceedings,
(10) when the rule does not provide a plain, speedy and adequate remedy, and
(11) when there are circumstances indicating the urgency of judicial intervention.  

(2) the enforcement of forestry laws, rules and regulations and the protection, development and management of forest lands fall within the primary and special responsibilities of the Department of Environment and Natural Resources.  

(3) “The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side or an opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial type hearing is not at all times and in all instances essential. The requirements are satisfied when the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is the absolute lack of notice or hearing.”

Roldan v Madrona (Natural Resources)

ROLDAN, JR. vs. HON. MADRONA 

G.R. No. 152989 

September 4, 2002 

FACTS: 

Petitioner is the owner of a parcel of land consisting of about 60,000 square meters covered by Transfer Certificate of Title No. TP-331 which he bought from a certain Ildefonso O. Maglasang.  

On August 9, 2001, petitioner applied for a Private Land Timber Permit (PLTP) from the Department of Environment and Natural Resources for him to cut some trees for a proposed road and poultry farm in his property.  

While waiting for the permit to be issued, petitioner was allegedly informed by some employees from the Department of Environment and Natural Resources (DENR) that he could proceed with the cutting of trees even though his application was still awaiting approval.  

Consequently, petitioner proceeded with the cutting of trees and bulldozing of the roadway.He used the cut logs as materials to build his chicken cages.  

About three weeks later, representatives of the Community Environment and Natural Resources Office (CENRO) of the Department of Environment and Natural Resources and personnel from the Intelligence Service, Armed Forces of the Philippines (ISAFP) of Tacloban City raided petitioner's place, allegedly without a search warrant. An inventory of the cut trees was conducted. The logs were not confiscated but were entrusted to a barangay kagawad since there was allegedly no search warrant at that time.  

Several days thereafter, the CENRO group and ISAFP returned, this time armed with a search warrant and proceeded to confiscate 872 pieces of sawn lumber/flitches (8,506 board feet) and three felled timber logs with a total market value of P235,454.68 at P27.00 per board foot.  

Consequently, on September 21, 2001, a complaint for violation of Section 68 of PD 705 as amended was filed against herein petitioner by CENRO before the City Prosecutor of Ormoc City.  

A warrant for the arrest of petitioner was then issued by the court a quo. In view thereof, herein petitioner filed with the trial court a motion for judicial determination of probable cause and the recall of his warrant of arrest.  

DECISION OF LOWER COURTS: * Trial court: denied the motion but reduced the recommended bail of petitioner  

TRIAL STILL IN PROGRESS... ISSUES & RULINGS: 

(1) whether the owner of a private land, the petitioner in this case, is criminally liable under Section 68 of PD 705 for cutting trees within his own property;  

YES, he is still liable. Under Section 68, PD 705 as amended by E.O. 277, it is clear that the violators of the said law are not declared as being guilty of qualified theft. Articles 309 and 310 of the Revised Penal Code were referred to only for the purpose of determining the imposable penalties and not to define acts which constitute qualified theft.  

Section 68 of PD 705, as amended by E.O. 277, otherwise known as the Revised Forestry Code of the Philippines provides:  

SEC. 68. Cutting, Gathering and/or collecting Timber, or Other Forest Products Without License.- Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land, without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code:Provided, That in case of partnerships, associations, or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable, and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation.  

The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found. (Emphasis supplied)  

The said law does not even distinguish whether or not the person who commits the punishable acts under the aforementioned law is the owner of the property, for what is material in determining the culpability of a person is whether or not the person or entity involved or charged with its violation POSSESSES THE REQUIRED PERMIT, LICENSE OR AUTHORIZATION FROM DENR at the time he or it cuts, gathers or collects timber or other forest products.  

(2) whether the owner of the private property is administratively liable under Sec. 14 of DENR Administrative Order No. 2000-21 despite the fact that he did not transport the logs out of his property and just used them for his own agricultural purposes therein and  

The aforementioned administrative order considers the mere act of transporting any wood product or timber without the prescribed documents as an offense which is subject to the penalties provided for by law. As to the defense of petitioner that he never transported the logs out of his property, suffice it to say that such is a factual issue which this Court under Rule 45 cannot determine. We are limited to resolving questions of law.  

Section 14 of Administrative Order No. 2000-21, the "Revised Guidelines in the Issuance of Private Land Timber Permit/Special Private Land Timber Permit," provides:  

SEC. 14. Penal Provisions. - Any log/timber or finished-wood products covered by these regulations which are transported without the prescribed documents shall be considered illegal and, therefore, subject to confiscation in favor of the government and shall be disposed in accordance with laws, rules and regulations governing the matter.  

DENR Officials found issuing defective certificate of origin and other transport documents required in this Order shall be subject to suspension without prejudice to the imposition of other penalties as may be warranted by extant Civil Service Laws, rules and regulations.  

(3) whether the logs confiscated by the DENR should be returned to the petitioner considering that the same were not transported out and merely used for his own agricultural purposes.  

any pronouncement thereon at this point would be premature as the guilt of the petitioner has not been legally established. The records of the case indicate that trial on the merits is still in progress. Hence, this Court is not in a position to speculate on or prescribe the courses of action or remedies the petitioner may avail of under the aforementioned law. Well-entrenched is the rule that this Court is not duty bound to render advisory opinions.

People v CFI Quezon (Natural resources)

PEOPLE V CFI QUEZON 

G.R. No. L-46772 

February 13, 1992  

FACTS: 

on or about the 28th, 29th and 30th days of July 1976, at Barangay Mahabang Lalim, Municipality of General Nakar, Province of Quezon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, Godofredo Arrozal and Luis Flores, together with twenty (20) other John Does whose identities are still unknown, the first-named accused being the administrator of the Infanta Logging Corporation, with intent to gain, conspiring and confederating together and mutually helping one another, did then and there willfully, unlawfully and feloniously enter the privately-owned land of one Felicitacion Pujalte, titled in the name of her deceased father, Macario Prudente, under Original Certificate of Title No. 6026, and once inside, illegally cut, gather, take, steal and carry away therefrom, without the consent of the said owner and without any authority under a license agreement, lease license or permit, sixty (60) logs of different species, consisting of about 541.48 cubic meters, with total value of FIFTY THOUSAND TWO HUNDRED FIVE PESOS and FIFTY TWO CENTAVOS (P50,205.52) including government charges, to the damage and prejudice of the said owner in the aforesaid amount.  

Contrary to Law.  

On March 23, 1977, the named accused filed a motion to quash the information on two (2) grounds, towit: (1) that the facts charged do not constitute an offense; and, (2) that the information does not conform substantially to the prescribed form.  

DECISION OF LOWER COURTS: * Trial court: dismissed the information on the grounds invoked.  

Then, directly to the Supreme Court.  

ISSUES & RULINGS:  

(1) whether or not the information charged an offense; and  

YES.  

Ownership is not an essential element of the offense as defined in Section 60 of P.D. No. 705. Thus, the failure of the information to allege the true owner of the forest products is not material; it was sufficient that it alleged that the taking was without any authority or license from the government.  

The elements of the crime of qualified theft of logs are: 1) That the accused cut, gathered, collected or removed timber or other forest products; 2) that the timber or other forest products cut, gathered, collected or removed belongs to the government or to any private individual; and 3) that the cutting, gathering, collecting or removing was without authority under a license agreement, lease, license, or permit granted by the state.  

The failure of the information to allege that the logs taken were owned by the state is not fatal. It should be noted that the logs subject of the complaint were taken not from a public forest but from a private woodland registered in the name of complainant's deceased father, Macario Prudente. The fact that only the state can grant a license agreement, license or lease does not make the state the owner of all the logs and timber products produced in the Philippines including those produced in private woodlands.  

While it is only the state which can grant a license or authority to cut, gather, collect or remove forest products it does not follow that all forest products belong to the state. In the just cited case, private ownership of forest products grown in private lands is retained under the principle in civil law that ownership of the land includes everything found on its surface.  

(2) whether or not the trial court had jurisdiction over the case.  

YES. [NOTE: This dispositive no longer applicable since the Rules of Procedure for Environmental cases requires complaint to be filed first with the DENR]  

With the exception of the so-called "private crimes" 1 and in election offenses, 2 prosecutions in Courts of First Instance may be commenced by an information signed by a fiscal after conducting a preliminary investigation. Section 80 of P.D. 705 did not divest the fiscals of this general authority. Neither did the said decree grant forest officers the right of preliminary investigations. In both cases under said Sec. 80 namely, 1) after a forest officer had made the arrest (for offenses committed in his presence); or 2) after conducting an investigation of reports or complaints of violations of the decree (for violations not committed in his presence) — he is still required to file the proper complaint with the appropriate official designated by law to conduct preliminary investigations in court. Said section should not be interpreted to vest exclusive authority upon forest officers to conduct investigations regarding offenses described in the decree rather, it should be construed as granting forest officers and employees special authority to arrest and investigate offenses described in P.D. 705, to reinforce the exercise of such authority by those upon whom it is vested by general law.  

Merida v People (Natural Resources)

MERIDA V PEOPLE (DEFINITION OF TIMBER, AUTHORITY OF FOREST OFFICERS) 

G.R. No. 158182 

June 12, 2008  

FACTS:  

on 23 December 1998, Tansiongco learned that petitioner cut a narra tree in the Mayod Property. Tansiongco reported the matter to Florencio Royo (Royo), the punong barangay of Ipil. On 24 December 1998, 7 Royo summoned petitioner to a meeting with Tansiongco. When confronted during the meeting about the felled narra tree, petitioner admitted cutting the tree but claimed that he did so with the permission of one Vicar Calix (Calix) who, according to petitioner, bought the Mayod Property from Tansiongco in October 1987 under a pacto de retro sale. Petitioner showed to Royo Calix's written authorization signed by Calix's wife.  

On 11 January 1999, Tansiongco reported the tree-cutting to the Department of Environment and Natural Resources (DENR) forester Thelmo S. Hernandez (Hernandez) in Sibuyan, Romblon.  

DECISION OF LOWER COURTS: 

* DENR forester: ordered petitioner not to convert the felled tree trunk into lumber.  

On 26 January 1999, Tansiongco informed Hernandez that petitioner had converted the narra trunk into lumber. Hernandez, with other DENR employees and enforcement officers, went to the Mayod Property and saw that the narra tree had been cut into six smaller pieces of lumber. Hernandez took custody of the lumber, 9 deposited them for safekeeping with Royo, and issued an apprehension receipt to petitioner. A larger portion of the felled tree remained at the Mayod Property. The DENR subsequently conducted an investigation on the matter.  

* RTC (upon complaint of Tansiongco): Petitioner was charged in the Regional Trial Court of Romblon, Romblon, Branch 81 (trial court) with violation of Section 68 of PD 705, as amended, for "cut[ting], gather[ing], collect[ing] and remov[ing]" a lone narra tree inside a private land in Mayod, Ipil, Magdiwang, Romblon (Mayod Property) over which private complainant Oscar M. Tansiongco (Tansiongco) claims ownership.  

* CA: affirmed trial court.  

ISSUES & RULINGS:  

1) Whether the trial court acquired jurisdiction over Criminal Case No. 2207 even though it was based on a complaint filed by Tansiongco and not by a DENR forest officer; and  

YES, DENR has jurisdiction. 

[NOTE: This dispositive no longer applicable since the Rules of Procedure for Environmental cases requires complaint to be filed first with the DENR, but the preliminary investigation is done by the prosecutor]  

Section 80 of PD 705 provides in relevant parts:  

SECTION 80. Arrest; Institution of criminal actions. - x x x x  

Reports and complaints regarding the commission of any of the offenses defined in this Chapter, not committed in the presence of any forest officer or employee, or any of the deputized officers or officials, shall immediately be investigated by the forest officer assigned in the area where the offense was allegedly committed, who shall thereupon receive the evidence supporting the report or complaint.  

If there is prima facie evidence to support the complaint or report, the investigating forest officer shall file the necessary complaint with the appropriate official authorized by law to conduct a preliminary investigation of criminal cases and file an information in Court. (Emphasis supplied)  

Here, it was not "forest officers or employees of the Bureau of Forest Development or any of the deputized officers or officials" who reported to Hernandez the tree-cutting in the Mayod Property but Tansiongco, a private citizen who claims ownership over the Mayod Property. Thus, Hernandez cannot be faulted for not conducting an investigation to determine "if there is prima facie evidence to support the complaint or report."  

At any rate, Tansiongco was not precluded, either under Section 80 of PD 705 or the Revised Rules, from filing a complaint before the Provincial Prosecutor for petitioner's alleged violation of Section 68 of PD 705, as amended. For its part, the trial court correctly took cognizance of Criminal Case No. 2207 as the case falls within its exclusive original jurisdiction. 

2) Whether petitioner is liable for violation of Section 68 of PD 705, as amended.  

YES.  

Before his trial, petitioner consistently represented to the authorities that he cut a narra tree in the Mayod Property and that he did so only with Calix's permission. However, when he testified, petitioner denied cutting the tree in question. We sustain the lower courts' rulings that petitioner's extrajudicial admissions bind him.  

3) Is the narra tree timber?  

YES.  

The closest this Court came to defining the term "timber" in Section 68 was to provide that "timber," includes "lumber" or "processed log."  

In other jurisdictions, timber is determined by compliance with specified dimensions or certain "stand age" or "rotation age." In Mustang Lumber, Inc. v. Court of Appeals, this Court was faced with a similar task of having to define a term in Section 68 of PD 705 - "lumber" - to determine whether possession of lumber is punishable under that provision. In ruling in the affirmative, we held that "lumber" should be taken in its ordinary or common usage meaning to refer to "processed log or timber,"  

We see no reason why, as in Mustang, the term "timber" under Section 68 cannot be taken in its common acceptation as referring to "wood used for or suitable for building or for carpentry or joinery." Indeed, tree saplings or tiny tree stems that are too small for use as posts, panelling, beams, tables, or chairs cannot be considered timber.  

Undoubtedly, the narra tree petitioner felled and converted to lumber was "timber" fit "for building or for carpentry or joinery" and thus falls under the ambit of Section 68 of PD 705, as amended.

Santa Rosa Mining Company, Inc. v Leido (Natural Resources)

SANTA ROSA MINING COMPANY, INC. v LEIDO (DENR) 

G.R. No. L-49109 

December 1, 1987  

FACTS:  

Petitioner Santa Rosa Mining Company, Inc. (petitioner, for short) is a mining corporation duly organized and existing under the laws of the Philippines. It alleges that it is the holder of fifty (50) valid mining claims situated in Jose Panganiban, Camarines Norte, acquired under the provisions of the Act of the U.S. Congress dated 1 July 1902 (Philippine Bill of 1902, for short).  

On 14 October 1977, Presidential Decree No. 1214 was issued, requiring holders of subsisting and valid patentable mining claims located under the provisions of the Philippine Bill of 1902 to file a mining lease application within one (1) year from the approval of the Decree. Petitioner accordingly filed a mining lease application, but "under protest," on 13 October 1978, with a reservation annotated on the back of its application that it is not waiving its rights over its mining claims until the validity of Presidential Decree No. 1214 shall have been passed upon by this Court.  

Petitioner avers that its fifty (50) mining claims had already been declared as its own private and exclusive property in final judgments rendered by the Court of First Instance of Camarines Norte (CFI, for short) in land registration proceedings initiated by third persons, such as, a September 1951 land title application by a certain Gervacio Liwanag, where the Director of Mines opposed the grant of said application because herein petitioner, according to him (Director of Mines), had already located and perfected its mining claims over the area applied for.  

ISSUES: (1) Whether Santa Rosa already had a vested right over its mining claims even before Presidential Decree No. 1214, following the rulings in McDaniel v. Apacible and Gold Creek Mining Corp. v. Rodriguez (2) whether or not Presidential Decree No. 1214 is constitutional  

HELD: (1) NO. 

Bonaventure Mining Corporation v VIL Mines (Natural Resources)

BONAVENTURE MINING CORPORATION v V.I.L MINES, INC. 

G.R. No. 174918 

August 13, 2008  

FACTS:  

This case involves a conflict over mining claims between BMC and VMI over a mountainous section that transcends the common boundaries of the provinces of Quezon and Camarines Norte, specifically within the municipal jurisdictions of Tagkawayan and Guinigayangan in Quezon, and Labo and Sta. Elena in Camarines Norte.  

On October 4, 1999, VMI filed a petition for the cancellation of BMC's exploration permit application claiming that it overlaps with its prior and existing application.  The petition was later amended on February 28, 2000, to include the cancellation and confirmation of the nullity of St. Joe Mining Corporation's EPA-IVA-24.  

DECISION OF LOWER COURTS: 

* POA: upholding the validity of VMI's exploration permit application and declaring BMC's and St. Joe Mining Corporation's applications as null and void. * MAB: gave due course to BMC's application for an exploration permit but allowed VMI's application to proceed, sans the areas covered by BMC's application. * CA: reversed and set aside the decision of the MAB and reinstated the decision of the Panel of Arbitrators  

ISSUE & RULING: 

WHETHER THE COURT OF APPEALS COMMITTED A GRAVE AND REVERSIBLE ERROR WHEN IT RULED THAT FAILURE TO COMPLY WITH DENR MEMORANDUM ORDER NO. 97-07 ON RETENTION REQUIREMENTS WOULD CAUSE THE CANCELLATION OF THE FTAA APPLICATION BY OPERATION OF LAW.  

NO, cancellation was proper.  

Section 12 of DMO 97-07 reads:  

SECTION 12. Divestment/Relinquishment of Areas in Excess of Maximum FTAA Contract Area  

All FTAA applications filed prior to the effectivity of the Act which exceed the maximum contract area as set forth in Section 34 of the Act and Section 51 of the IRR must conform to said maximum on or before September 15, 1997. For this purpose, all applicants who have not otherwise relinquished or divested any areas held in excess of the allowable maximum by September 15, 1997 must relinquish/divest said areas on such date in favor of the Government by filing a Declaration of Areas Relinquished/Divested, containing the technical description of such area/s, with the Bureau/ concerned Regional Office. The concerned applications shall be accordingly amended and areas relinquished/divested shall be open for Mining Applications.  

x  x  x  

Failure to relinquish/divest areas in excess of the maximum contract area as provided for in this section will result in the denial or cancellation of the FTAA application after which, the areas covered thereby shall be open for Mining Applications. (Emphasis supplied)  

Section 12 of DMO 97-07 must be read in conjunction with Section 14 which states that the deadlines therein are not subject to extension, viz:  

SECTION 14. No Extension of Periods  

The deadline set at September 15, 1997 pursuant to Section 4 hereof and all other periods prescribed herein shall not be subject to extension. (Emphasis supplied)  

DMO 97-07 was promulgated precisely to set a specific date for all FTAA applicants within which to relinquish all areas in excess of the maximum prescribed by law.  Accordingly, the deadline cannot be extended or changed except by amending DMO 97-07.  OIC-Regional Director Reynulfo Juan had no authority to extend the deadline set by DMO 97-07.  

The language of the memorandum order is plain, precise and unequivocal – the period cannot be extended.  Beyond that, the pending FTAA applications could no longer be officially acted upon as they were deemed to have expired. DMO 97-07 could only be extended by another memorandum order or law specifically amending the deadline set forth therein.  No government officer or employee can do so. 

Didipio v Gozun (Natural resources)

DIDIPIO v GOZUN 

GR No. 157882 

March 30, 2006  

FACTS:  

This petition for prohibition and mandamus under Rule 65 of the Rules of Court assails the constitutionality of Republic Act No. 7942 otherwise known as the Philippine Mining Act of 1995, together with the Implementing Rules and Regulations issued pursuant thereto, Department of Environment and Natural Resources (DENR) Administrative Order No. 96-40, s. 1996 (DAO 96-40) and of the Financial and Technical Assistance Agreement (FTAA) entered into on 20 June 1994 by the Republic of the Philippines and Arimco Mining Corporation (AMC), a corporation established under the laws of Australia and owned by its nationals.  

Subsequently, AMC consolidated with Climax Mining Limited to form a single company that now goes under the new name of Climax-Arimco Mining Corporation (CAMC), the controlling 99% of stockholders of which are Australian nationals.  

on 20 June 1994, President Ramos executed an FTAA with AMC over a total land area of 37,000 hectares covering the provinces of Nueva Vizcaya and Quirino.  Included in this area is Barangay Dipidio, Kasibu, Nueva Vizcaya.  

The CAMC FTAA grants in favor of CAMC the right of possession of the Exploration Contract Area, the full right of ingress and egress and the right to occupy the same.  It also bestows CAMC the right not to be prevented from entry into private lands by surface owners or occupants thereof when prospecting, exploring and exploiting minerals therein.  

Didipio Earth-Savers' Multi-Purpose Association, Inc., an organization of farmers and indigenous peoples organized under Philippine laws, representing a community actually affected by the mining activities of CAMC, as well as other residents of areas affected by the mining activities of CAMC.  

ISSUES & RULINGS:  

I  

WHETHER OR NOT REPUBLIC ACT NO. 7942 AND THE CAMC FTAA ARE VOID BECAUSE THEY ALLOW THE UNJUST AND UNLAWFUL TAKING OF PROPERTY WITHOUT PAYMENT OF JUST COMPENSATION , IN VIOLATION OF SECTION 9, ARTICLE III OF THE CONSTITUTION.  

NO.  

The provision of the FTAA in question lays down the ways and means by which the foreign-owned contractor, disqualified to own land, identifies to the government the specific surface areas within the FTAA contract area to be acquired for the mine infrastructure. The government then acquires ownership of the surface land areas on behalf of the contractor, through a voluntary transaction in order to enable the latter to proceed to fully implement the FTAA.  Eminent domain is not yet called for at this stage since there are still various avenues by which surface rights can be acquired other than expropriation. The FTAA provision under attack merely facilitates the implementation of the FTAA given to CAMC and shields it from violating the Anti-Dummy Law.  

There is also no basis for the claim that the Mining Law and its implementing rules and regulations do not provide for just compensation in expropriating private properties.  Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40 provide for the payment of just compensation.   

II  

WHETHER OR NOT THE MINING ACT AND ITS IMPLEMENTING RULES AND REGULATIONS ARE VOID AND UNCONSTITUTIONAL FOR SANCTIONING AN UNCONSTITUTIONAL ADMINISTRATIVE PROCESS OF DETERMINING JUST COMPENSATION.  

NO.  

there is nothing in the provisions of the assailed law and its implementing rules and regulations that exclude the courts from their jurisdiction to determine just compensation in expropriation proceedings involving mining operations.  

Although Section 105 confers upon the Panel of Arbitrators the authority to decide cases where surface owners, occupants, concessionaires refuse permit holders entry, thus, necessitating involuntary taking, this does not mean that the determination of the just compensation by the Panel of Arbitrators or the Mines Adjudication Board is final and conclusive.  The determination is only preliminary unless accepted by all parties concerned. There is nothing wrong with the grant of primary jurisdiction by the Panel of Arbitrators or the Mines Adjudication Board to determine in a preliminary matter the reasonable compensation due the affected landowners or occupants. The original and exclusive jurisdiction of the courts to decide determination of just compensation remains intact despite the preliminary determination made by the administrative agency.  

III  

WHETHER OR NOT THE STATE, THROUGH REPUBLIC ACT NO. 7942 AND THE CAMC FTAA, ABDICATED ITS PRIMARY RESPONSIBILITY TO THE FULL CONTROL AND SUPERVISION OVER NATURAL RESOURCES.  

RA 7942 provides for the state's control and supervision over mining operations.  The following provisions thereof establish the mechanism of inspection and visitorial rights over mining operations and institute reportorial requirements.  

The setup under RA 7942 and DAO 96-40 hardly relegates the State to the role of a “passive regulator” dependent on submitted plans and reports.  On the contrary, the government agencies concerned are empowered to approve or disapprove -- hence, to influence, direct and change -- the various work programs and the corresponding minimum expenditure commitments for each of the exploration, development and utilization phases of the mining enterprise.   

IV  

WHETHER OR NOT THE RESPONDENTS' INTERPRETATION OF THE ROLE OF WHOLLY FOREIGN AND FOREIGN-OWNED CORPORATIONS IN THEIR INVOLVEMENT IN MINING ENTERPRISES, VIOLATES PARAGRAPH 4, SECTION 2, ARTICLE XII OF THE CONSTITUTION.  

the use of the word “involving” signifies the possibility of the inclusion of other forms of assistance or activities having to do with, otherwise related to or compatible with financial or technical assistance.  

Thus, we come to the inevitable conclusion that there was a conscious and deliberate decision to avoid the use of restrictive wording that bespeaks an intent not to use the expression “agreements x x x involving either technical or financial assistance” in an exclusionary and limiting manner.  

V  

WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS SERVICE CONTRACTS  

NO. The mere fact that the term service contracts found in the 1973 Constitution was not carried over to the present constitution, sans any categorical statement banning service contracts in mining activities, does not mean that service contracts as understood in the 1973 Constitution was eradicated in the 1987 Constitution.  

The 1987 Constitution allows the continued use of service contracts with foreign corporations as contractors who would invest in and operate and manage extractive enterprises, subject to the full control and supervision of the State; this time, however, safety measures were put in place to prevent abuses of the past regime.  

the phrase agreements involving either technical or financial assistance, referred to in paragraph 4, are in fact service contracts.  But unlike those of the 1973 variety, the new ones are between foreign corporations acting as contractors on the one hand; and on the other, the government as principal or “owner” of the works.  In the new service contracts, the foreign contractors provide capital, technology and technical know-how, and managerial expertise in the creation and operation of large-scale mining/extractive enterprises; and the government, through its agencies (DENR, MGB), actively exercises control and supervision over the entire operation.  

OBITER DICTA: ! justiciable controversy: definite and concrete dispute touching on the legal relations of parties having adverse legal interests which may be resolved by a court of law through the application of a law. ! to exercise the power of judicial review, the following must be extant (1) there must be an actual case calling for the exercise of judicial power; - involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute.  

In the instant case, there exists a live controversy involving a clash of legal rights as Rep. Act No. 7942 has been enacted, DAO 96-40 has been approved and an FTAAs have been entered into.  The FTAA holders have already been operating in various provinces of the country.  

(2) the question must be ripe for adjudication; and - A question is considered ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it. (3) the person challenging must have the “standing" - personal or substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged, alleging more than a generalized grievance.  

By the mere enactment of the questioned law or the approval of the challenged act, the dispute is said to have ripened into a judicial controversy even without any other overt act.  Indeed, even a singular violation of the Constitution and/or the law is enough to awaken judicial duty.  

! “taking” under the concept of eminent domain as entering upon private property for more than a momentary period, and, under the warrant or color of legal authority, devoting it to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as to substantially oust the owner and deprive him of all beneficial enjoyment thereof.  

requisites of taking in eminent domain, to wit:  

(1)               the expropriator must enter a private property;  

(2)               the entry must be for more than a momentary period.  

(3)               the entry must be under warrant or color of legal authority;  

(4)               the property must be devoted to public use or otherwise informally appropriated or injuriously affected;  

(5)               the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property.  

! Taking in Eminent Domain Distinguished from Regulation in Police Power 

The power of eminent domain is the inherent right of the state (and of those entities to which the power has been lawfully delegated) to condemn private property to public use upon payment of just compensation.On the other hand, police power is the power of the state to promote public welfare by restraining and regulating the use of liberty and property.  

Although both police power and the power of eminent domain have the general welfare for their object, and recent trends show a mingling of the two with the latter being used as an implement of the former, there are still traditional distinctions between the two.  

Property condemned under police power is usually noxious or intended for a noxious purpose; hence, no compensation shall be paid.  Likewise, in the exercise of police power, property rights of private individuals are subjected to restraints and burdens in order to secure the general comfort, health, and prosperity of the state.  Thus, an ordinance prohibiting theaters from selling tickets in excess of their seating capacity (which would result in the diminution of profits of the theater-owners) was upheld valid as this would promote the comfort, convenience and safety of the customers.  

where a property interest is merely restricted because the continued use thereof would be injurious to public welfare, or where property is destroyed because its continued existence would be injurious to public interest, there is no compensable taking. However, when a property interest is appropriated and applied to some public purpose, there is compensable taking.  

! On different roles and responsibilities: 

* DENR Secretary : accept, consider and evaluate proposals from foreign-owned corporations or foreign investors for contracts of agreements involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, which, upon appropriate recommendation of the Secretary, the President may execute with the foreign proponent. (Executive Order No. 279, 1987)  

! in re: easements and taking 

In Ayala de Roxas v. City of Manila, it was held that the imposition of burden over a private property through easement was considered taking; hence, payment of just compensation is required.  The Court declared:  

And, considering that the easement intended to be established, whatever may be the object thereof, is not merely a real right that will encumber the property, but is one tending to prevent the exclusive use of one portion of the same, by expropriating it for public use which, be it what it may, can not be accomplished unless the owner of the property condemned or seized be previously and duly indemnified, it is proper to protect the appellant by means of the remedy employed in such cases, as it is only adequate remedy when no other legal action can be resorted to, against an intent which is nothing short of an arbitrary restriction imposed by the city by virtue of the coercive power with which the same is invested.  

! in order that one law may operate to repeal another law, the two laws must be inconsistent.The former must be so repugnant as to be irreconciliable with the latter act.

La Bugal-B'laan Tribal Association, Inc. v DENR (Natural Resources)

LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC. v DENR 

G.R. No. 127882 

January 27, 2004  

FACTS: 

The present petition for mandamus and prohibition assails the constitutionality of Republic Act No. 7942, otherwise known as the PHILIPPINE MINING ACT OF 1995, along with the Implementing Rules and Regulations issued pursuant thereto, Department of Environment and Natural Resources (DENR) Administrative Order 96-40, and of the Financial and Technical Assistance Agreement (FTAA) entered into on March 30, 1995 by the Republic of the Philippines and WMC (Philippines), Inc. (WMCP), a corporation organized under Philippine laws.  

ISSUES: 

Did the DENR Secretary acted without or in excess of jurisdiction: (1) x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows fully foreign owned corporations to explore, develop, utilize and exploit mineral resources in a manner contrary to Section 2, paragraph 4, Article XII of the Constitution; (2) x x x in recommending approval of and implementing the Financial and Technical Assistance Agreement between the President of the Republic of the Philippines and Western Mining Corporation Philippines Inc. because the same is illegal and unconstitutional.  

[Rulings for the substantive issues are not included in this digest since already reversed by another case]  

HELD: 

As to procedural issues: * Requisites of judicial review - YES, OKAY.  

When an issue of constitutionality is raised, this Court can exercise its power of judicial review only if the following requisites are present:  

(1) The existence of an actual and appropriate case; - The challenge against the constitutionality of R.A. No. 7942 and DAO No. 96-40 likewise fulfills the requisites of justiciability. Although these laws were not in force when the subject FTAA was entered into, the question as to their validity is ripe for adjudication.  

(2) A personal and substantial interest of the party raising the constitutional question; - petitioners have standing to raise the constitutionality of the questioned FTAA as they allege a personal and substantial injury  

(3) The exercise of judicial review is pleaded at the earliest opportunity; and - WMCP points out that the petition was filed only almost two years after the execution of the FTAA, hence, not raised at the earliest opportunity.mThe third requisite should not be taken to mean that the question of constitutionality must be raised immediately after the execution of the state action complained of. That the question of constitutionality has not been raised before is not a valid reason for refusing to allow it to be raised later. A contrary rule would mean that a law, otherwise unconstitutional, would lapse into constitutionality by the mere failure of the proper party to promptly file a case to challenge the same. 

(4) The constitutional question is the lis mota of the case  

*Propriety of prohibition and mandamus - YES, OKAY.  

The petition for prohibition at bar is thus an appropriate remedy. While the execution of the contract itself may be fait accompli, its implementation is not. Public respondents, in behalf of the Government, have obligations to fulfill under said contract. Petitioners seek to prevent them from fulfilling such obligations on the theory that the contract is unconstitutional and, therefore, void.  

*Hierarchy of courts - YES, OKAY.  

The repercussions of the issues in this case on the Philippine mining industry, if not the national economy, as well as the novelty thereof, constitute exceptional and compelling circumstances to justify resort to this Court in the first instance.  

In all events, this Court has the discretion to take cognizance of a suit which does not satisfy the requirements of an actual case or legal standing when paramount public interest is involved. When the issues raised are of paramount importance to the public, this Court may brush aside technicalities of procedure.  

RATIO: (1) The State may directly undertake such activities or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens.  

Consonant with the State's "full supervision and control" over natural resources, Section 2 offers the State two "options."182 One, the State may directly undertake these activities itself; or two, it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or entities at least 60% of whose capital is owned by such citizens.  

A third option is found in the third paragraph of the same section:  

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fish-workers in rivers, lakes, bays, and lagoons.  

While the second and third options are limited only to Filipino citizens or, in the case of the former, to corporations or associations at least 60% of the capital of which is owned by Filipinos, a fourth allows the participation of foreign-owned corporations. The fourth and fifth paragraphs of Section 2 provide:  

The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country. In such agreements, the State shall promote the development and use of local scientific and technical resources.  

The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution.  

Although Section 2 sanctions the participation of foreign-owned corporations in the exploration, development, and utilization of natural resources, it imposes certain limitations or conditions to agreements with such corporations.  

First, the parties to FTAAs. Only the President, in behalf of the State, may enter into these agreements, and only with corporations. By contrast, under the 1973 Constitution, a Filipino citizen, corporation or association may enter into a service contract with a "foreign person or entity."  

Second, the size of the activities: only large-scale exploration, development, and utilization is allowed. The term "large-scale usually refers to very capital-intensive activities."183  

Third, the natural resources subject of the activities is restricted to minerals, petroleum and other mineral oils, the intent being to limit service contracts to those areas where Filipino capital may not be sufficient.184  

Fourth, consistency with the provisions of statute. The agreements must be in accordance with the terms and conditions provided by law. 

Fifth, Section 2 prescribes certain standards for entering into such agreements. The agreements must be based on real contributions to economic growth and general welfare of the country.  

Sixth, the agreements must contain rudimentary stipulations for the promotion of the development and use of local scientific and technical resources.  

Seventh, the notification requirement. The President shall notify Congress of every financial or technical assistance agreement entered into within thirty days from its execution.  

Finally, the scope of the agreements. While the 1973 Constitution referred to "service contracts for financial, technical, management, or other forms of assistance" the 1987 Constitution provides for "agreements. . . involving either financial or technical assistance." It bears noting that the phrases "service contracts" and "management or other forms of assistance" in the earlier constitution have been omitted.  

(2) KINDS OF MINERAL AGREEMENTS (important)  

The State, being the owner of the natural resources, is accorded the primary power and responsibility in the exploration, development and utilization thereof. As such, it may undertake these activities through four modes:  

The State may directly undertake such activities.  

(2) The State may enter into co-production, joint venture or production-sharing agreements with Filipino citizens or qualified corporations.  

(3) Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens.  

(4) For the large-scale exploration, development and utilization of minerals, petroleum and other mineral oils, the President may enter into agreements with foreign-owned corporations involving technical or financial assistance.  

Except to charge the Mines and Geosciences Bureau of the DENR with performing researches and surveys, and a passing mention of government-owned or controlled corporations,188 R.A. No. 7942 does not specify how the State should go about the first mode. The third mode, on the other hand, is governed by Republic Act No. 7076 (the People's Small-Scale Mining Act of 1991) and other pertinent laws. R.A. No. 7942 primarily concerns itself with the second and fourth modes.  

Mineral production sharing, co-production and joint venture agreements are collectively classified by R.A. No. 7942 as "mineral agreements."  

A. MINERAL PRODUCTION SHARING AGREEMENTS (MPSA)   

The Government participates the least in a mineral production sharing agreement (MPSA). In an MPSA, the Government grants the contractor the exclusive right to conduct mining operations within a contract area and shares in the gross output. The MPSA contractor provides the financing, technology, management and personnel necessary for the agreement's implementation. The total government share in an MPSA is the excise tax on mineral products under Republic Act No. 7729, amending Section 151(a) of the National Internal Revenue Code, as amended.  

B. CO-PRODUCTION AGREEMENT (CA)  

C. JOINT VENTURE AGREEMENT (JVA)  

In a co-production agreement (CA), the Government provides inputs to the mining operations other than the mineral resource, while in a joint venture agreement (JVA), where the Government enjoys the greatest participation, the Government and the JVA contractor organize a company with both parties having equity shares. Aside from earnings in equity, the Government in a JVA is also entitled to a share in the gross output.  

The Government may enter into a CA or JVA with one or more contractors. The Government's share in a CA or JVA is set out in Section 81 of the law:  

The share of the Government in co-production and joint venture agreements shall be negotiated by the Government and the contractor taking into consideration the: (a) capital investment of the project, (b) the risks involved, (c) contribution of the project to the economy, and (d) other factors that will provide for a fair and equitable sharing between the Government and the contractor. The Government shall also be entitled to compensations for its other contributions.

which shall be agreed upon by the parties, and shall consist, among other things, the contractor's income tax, excise tax, special allowance, withholding tax due from the contractor's foreign stockholders arising from dividend or interest payments to the said foreign stockholders, in case of a foreign national and all such other taxes, duties and fees as provided for under existing laws.  

All mineral agreements grant the respective contractors the exclusive right to conduct mining operations and to extract all mineral resources found in the contract area. A "qualified person" may enter into any of the mineral agreements with the Government. A "qualified person" is any citizen of the Philippines with capacity to contract, or a corporation, partnership, association, or cooperative organized or authorized for the purpose of engaging in mining, with technical and financial capability to undertake mineral resources development and duly registered in accordance with law at least sixty per centum (60%) of the capital of which is owned by citizens of the Philippines x x x. 

D. FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENTS 

The fourth mode involves "financial or technical assistance agreements." An FTAA is defined as "a contract involving financial or technical assistance for large-scale exploration, development, and utilization of natural resources."  

Any qualified person with technical and financial capability to undertake large-scale exploration, development, and utilization of natural resources in the Philippines may enter into such agreement directly with the Government through the DENR. For the purpose of granting an FTAA, a legally organized foreign-owned corporation (any corporation, partnership, association, or cooperative duly registered in accordance with law in which less than 50% of the capital is owned by Filipino citizens) is deemed a "qualified person."  

Other than the difference in contractors' qualifications, the principal distinction between mineral agreements and FTAAs is the maximum contract area to which a qualified person may hold or be granted. "Large-scale" under R.A. No. 7942 is determined by the size of the contract area, as opposed to the amount invested (US $50,000,000.00), which was the standard under E.O. 279.  

Like a CA or a JVA, an FTAA is subject to negotiation. The Government's contributions, in the form of taxes, in an FTAA is identical to its contributions in the two mineral agreements, save that in an FTAA: The collection of Government share in financial or technical assistance agreement shall commence after the financial or technical assistance agreement contractor has fully recovered its pre-operating expenses, exploration, and development expenditures, inclusive.  

OBITER DICTA: 

(1) The Regalian doctrine and the American system, therefore, differ in one essential respect. Under the Regalian theory, mineral rights are not included in a grant of land by the state; under the American doctrine, mineral rights are included in a grant of land by the government.

Twin Peaks Mining Association v Navarro (Natural Resourcesj

TWIN PEAKS MINING ASSOCIATION v NAVARRO 

G.R. No. L-49835 

December 18, 1979  

FACTS:  

On September 1, 1978, Philex Mining Corporation filed in the Court of First Instance of Rizal, Pasig Branch 11 a complaint against the Twin Peaks Mining Association and its four partners. It prayed for a judgment declaring as valid and binding on Twin Peaks the two agreements dated May 22, 1970 and June 25, 1971 for the exploration, operation and exploitation of two hundred ninety lode mineral claims located at Tuba, Benguet. The agreements were entered into between Philex and the late geodetic engineer, Andres K. Espiritu, who represented himself to be the general manager of Twin Peaks but who was not a partner thereof.  

The firm and its four partners filed a motion to dismiss on the grounds of lack of jurisdiction and cause of action.  

DECISION OF LOWER COURTS: * Trial court: denied the motion to dismiss. It sustained plaintiff's stand that the validity of the said mining contracts is a justiciable question that should be resolved by the courts and that the complaint states a cause of action against the defendants.  

ISSUE: Is the trial court vested with jurisdiction over the case?  

HELD: NO.  

the trial court has no jurisdiction over the case and that the issue of whether the two contracts are valid falls within the exclusive competence of the Bureau of Mines as clearly indicated in section 7(c) of Presidential Decree No. 1281 which took effect on January 16, 1978.  

That decree revised Commonwealth Act No. 136 (the law creating the Bureau of Mines) for the purpose of making that agency "a more potent and effective arm of the Government in the administration and disposition of our mineral resources and responsive to the needs of the Filipino people, in general, and the mining industry, in particular. "  

And it is noteworthy that the trend is to make the adjudication of mining cases a purely administrative matter. Thus, it cannot escape notice that under section 61 of the Mining Law, Commonwealth Act No. 137, as amended by Republic Acts Nos. 746 and 4388, appeals from the decision of the Secretary of Agriculture and Natural Resources (now 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.

Philex Mining Corporation v Zaldivia (Natural Resources)

PHILEX MINING CORPORATION v ZALDIVIA 

G.R. No. L-29669 

February 29, 1972  

FACTS:  

In a registered deed of assignment, dated 24 September 1955, George T. Scholey, as locator of the aforesaid mining claim, sold, transferred and assigned all his rights, title and interest therein to Milagros Yrastorza; on 7 December 1959, Yrastorza filed Lode Lease Application No. V-4671 covering the said mining claim, but on 15 October 1963, she sold, transferred and conveyed all her rights and interest in the claim to herein respondent Luz Zaldivia. The transfer approved by the Director of Mines on 29 December 1966; hence, Lode Lease Application No. V-4671 was recorded in Zaldivia's name and given due course.  

Upon publication of the lease application, herein petitioner Philex Mining Corporation interposed an adverse claim to the lease application, alleging that it is the beneficial and equitable owner of the mining claim; that it was located on 9 December 1955 by the petitioner corporation's then general manager for the benefit of the corporation; that when Scholey transferred the claim to Yrastorza, Scholey was still the general manager, while Yrastorza was also employed by the company; and that Yrastorza and respondent Zaldivia, who had also been an employee of the corporation, merely acted as agents of Scholey, so that, despite the transfers, petitioner remained the equitable owner.  

Respondent Zaldivia moved to dismiss the adverse claim on three (3) grounds, namely: late filing of the adverse claim, lack of jurisdiction of the Director of Mines to resolve the question of ownership raised by herein petitioner, and the alleged defect of the adverse claim for non-compliance with certain requirements of the Mining Act, as amended. In the course of an oral argument on the motion to dismiss, only the question of jurisdiction was submitted for resolution.  

DECISION OF LOWER COURTS: * Director of Mines: Bureau had no jurisdiction to resolve the question of ownership, because the question was judicial in character and should be ventilated before the courts. * DENR Secretary: affirmed the order of the Director of Mines.  

ISSUE: Is the Director of Mines vested with the jurisdiction over the controverted issues?  

HELD: NO.  

The issue is one to be resolved in conformity with legal rules and standards governing the powers of an agent, and the law's restrictions upon the latter's right to act for his own exclusive benefit while the agency is in force. Decision of such questions involves the interpretation and application of laws and norms of justice established by society and constitutes essentially an exercise of the judicial power under the Constitution is exclusively allocated to the Supreme Court and such courts as the Legislature may establish and one that mining officials are ill-equipped to deal with.  

As already shown, petitioner's adverse claim is not one grounded on overlapping of claims nor is it a mining conflict arising out of mining locations (there being only one involved) but one originating from the alleged fiduciary or contractual relationship between petitioner and locator Scholey and his transferees Yrastorza and respondent Zaldivia. As such, the adverse claim is not within the executive or administrative authority of the mining director solve, but in that of the courts.

Standard Mineral Products Inc. v CA (Natural Resources)

STANDARD MINERAL PRODUCTS, INC. v CA 

G.R. No. L-43277  

April 26, 1990  

FACTS:   

Petitioner-Appellant Standard Mineral Products, Inc. (SMPI, for short) claims that it is the locator of placer mining claims "Celia IV" and "Celia VI" containing limestone in Kaysipot, Antipolo, Rizal, which were duly registered in the Office of the Mining Recorder of Rizal on 1959.   

The Bureau of Mines held SMPI's application in abeyance pending submission of the permission of the surface owners. No agreement having been reached by the parties, on 20 December 1965, SMPI brought an action in the Court of First Instance of Rizal against Respondents-Appellees praying that it be granted surface rights for mining purposes over fifteen (15) hectares of the Landowner's property and a right-of-way over a portion of five (5) hectares leading to and covered by the said mining claims.  

The Landowners traversed the Complaint, by averring that SMPI is not entitled to the relief demanded because the prospecting was accomplished without previously securing the Landowner's written permission as surface owners as required by Section 27 of the Mining Act (Commonwealth Act No. 137, as amended).  

DECISION OF LOWER COURTS: 

*Trial Court: sentenced SMPI to pay to Deeunhong and the Tanjuatcos actual damages in the sum of P50,000.00 each, attorney's fees of P5,000.00 and costs. 

*Appellate Court: affirmed that Decision with the sole modification that temperate or moderate damages (not actual damages) of P25,000.00 each were awarded instead. 

ISSUES & RULING: (1) whether or not SMPI is entitled to surface rights and a right of way to a 15-hectare portion of the Landowners' property covered by SMPI's mining claims for mining purposes.   

NO. SMPI is not entitled to said surface rights as it failed to comply with the requisite of prior written permission by the Landowners before entering the private land in question.  

Section 27 of the Mining Act explicitly provides:  

Section 27. Before entering private lands the prospector shall FIRST APPLY IN WRITING FOR WRITTEN PERMISSION of the private owner, claimant, or holder thereof, and in case of refusal by such private owner, claimant, or holder to grant such permission, or in case of disagreement as to the amount of compensation to be paid for such privilege of prospecting therein, the amount of such compensation shall be fixed by agreement among the prospector, the Director of the Bureau of Mines and the surface owner, and in case of their failure to unanimously agree as to the amount of compensation, all questions at issue shall be determined by the Court of First Instance of the province in which said lands are situated in an action instituted for the purpose by the prospector, or his principal: Provided, however, that the prospector, or his principal upon depositing with the court the sum considered jointly by him and the Director of the Bureau of Mines and the court to be just compensation for the damages resulting from such prospecting, shall be permitted to enter upon, and locate the said land without such written permission pending final adjudication of the amount of such compensation; and in such case the prospector, or his principal, shall have a prior right as against the world, from the date of his application. The court in its final judgment, besides determining the corresponding compensation of the damages which may be caused by the prospecting, shall make a pronouncement as to the value and the reasonable rental for the occupation and utilization thereof for mining purposes in case the prospector decides to locate and exploit the minerals found therein. (Emphasis ours).  

No one can dispute that under the Regalian doctrine, minerals found in one's land belong to the State and not to a private landowner (Section 8, Article XIV, 1973 Constitution; Sections 3 and 4, Mining Act). Nonetheless, a condition sine qua non is that the prospecting, exploration, discovery and location must be done in accordance with the law. As it is, SMPI's rights to use and exploit the mineral resources discovered and located never matured because of its omission to comply with a condition precedent. To allow SMPI its claim for surface rights and right of way would be to countenance illegal trespass into private property.  

(2) A corollary issue raised is whether or not the Trial Court and the Appellate Court had jurisdiction over the proceedings before them in the light of Section 61 of the Mining Act.  

YES.   

Section 61. Conflicts and disputes arising out of mining locations shall be submitted to the Director of Mines for decision; Provided, That the decision or order of the Director of Mines may be appealed to the Secretary of Agriculture and Natural Resources within thirty days from receipt of such decision or order. In case any one of the parties should disagree with the decision or order of the Secretary of Agriculture and Natural Resources, the matter may be taken to the Court of Appeals or the Supreme Court, as the case may be, within thirty days from the receipt of such decision or order, otherwise the said decision or order shall be final and binding upon the parties concerned. Findings of facts in the decision or order of the Director of Mines when affirmed by the Secretary of Agriculture and Natural Resources shall be final and conclusive, and the aggrieved party or parties desiring to appeal from such decision or order shall file in the Supreme Court a petition for review wherein only questions of law may be raised.  

Said provision is inapplicable, however, as it refers to "conflicts and disputes arising out of mining locations," which is not the subject matter in the case at bar. The basic issue herein is SMPI's entitlement to surface rights and right of way. The dispute is not a mining conflict. It is essentially judicial. In SMPI's own words.   

The suit below was not merely for a determination of the amount to be paid for surface rights, as SMPI contends, inasmuch as the very validity of those surface rights was likewise squarely put in issue.  

Of significance, too, is the fact that SMPI filed its action with the Trial Court, actively participated in the hearings therein, but, it was only after a judgment adverse to it was rendered that it raised the issue of jurisdiction. It is now estopped, therefore, from impugning said jurisdiction.

PNOC-ENERGY DEVELOPMENT CORPORATION (PNOC-EDC) v VENERACION (Natural Resources)

PNOC-ENERGY DEVELOPMENT CORPORATION (PNOC-EDC) v VENERACION 

G.R. No. 129820             

November 30, 2006  

FACTS:   

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.  

DECISION OF LOWER COURTS:  

*RED of the DENR Office in Zamboanga City: ruled in favor of VENERACION and ordered the PNOC to amend its Mineral Production Sharing Agreement [MPSA] by excluding therefrom Block 159 *DENR secretary: dismissed the appeal on the ground that petitioner's right to appeal had already prescribed.Section 50 of Presidential Decree No. 463 provides therefore for a five-day reglementary period from the receipt of the order or decision of the Director. *DENR secretary (motion for reconsideration): reversed the Decision, dated 4 October 1994, and gave due course to the MPSA of the petitioner. *DENR secretary (2nd motion for reconsideration): ruled that the Orders issued by the RED have already become final and executory when the petitioner failed to file its appeal five days after it had received the Orders. *MAB (took cognizance pursuant to the Philippine Mining Act): filed its appeal beyond the five-day prescriptive period provided under Presidential Decree No. 463, which was then the governing law on the matter.  

ISSUES:  

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

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

HELD: *On propriety of appeal: The correct mode of appeal would have been to file a petition for review under Rule 43, before the Court of Appeals. Nevertheless, this Court has taken into account the fact that these cases [which provided the doctrine] were promulgated after the petitioner filed this appeal on 4 August 1997, and decided to take cognizance of the present case.  

(1) YES, the right to appeal is lost. 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.  

Nor can petitioner invoke the doctrine that rules of technicality must yield to the broader interest of substantial justice. The right to appeal is not part of due process of law but is a mere statutory privilege to be exercised only in the manner and in accordance with the provisions of the law.  

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) NO, 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.  

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;  

(2) an exploration permit from the BMGS; 

(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; 

(4) granting by the president of the application to exclude the area from the reservation; 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. 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. 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. 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.  

OBITER DICTA: 

(1) 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.  

(2) 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. 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.

BENGUET CORPORATION v DENR-MAB (Natural Resources)

BENGUET CORPORATION v DENR-MAB 

G.R. No. 163101 

February 13, 2008  

FACTS: 

On June 1, 1987, Benguet and J.G. Realty entered into a RAWOP, wherein J.G. Realty was acknowledged as the owner of four mining claims respectively named as Bonito-I, Bonito-II, Bonito-III, and Bonito-IV, with a total area of 288.8656 hectares, situated in Barangay Luklukam, Sitio Bagong Bayan, Municipality of Jose Panganiban, Camarines Norte.  

Thus, on August 9, 1989, the Executive Vice-President of Benguet, Antonio N. Tachuling, issued a letter informing J.G. Realty of its intention to develop the mining claims. However, on February 9, 1999, J.G. Realty, through its President, Johnny L. Tan, then sent a letter to the President of Benguet informing the latter that it was terminating the RAWOP  on the following grounds:   

a.      The fact that your company has failed to perform the obligations set forth in the RAWOP, i.e., to undertake development works within 2 years from the execution of the Agreement;  b.      Violation of the Contract by allowing high graders to operate on our claim.  c.      No stipulation was provided with respect to the term limit of the RAWOP.  d.      Non-payment of the royalties thereon as provided in the RAWOP.  

On June 7, 2000, J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of the RAWOP with the Legaspi City POA, Region V, docketed as DENR Case No. 2000-01 and entitled J.G. Realty v. Benguet.  

DECISION OF LOWER COURTS: *POA: declared the RAWOP cancelled. *MAB: affirmed POA.  

ISSUES: (1) Should the controversy have first been submitted to arbitration before the POA took cognizance of the case?;  (2) Was the cancellation of the RAWOP supported by evidence?; and  (3) Did the cancellation of the RAWOP amount to unjust enrichment of J.G. Realty at the expense of Benguet?  

HELD: On correctness of appeal:  Petitioner having failed to properly appeal to the CA under Rule 43, the decision of the MAB has become final and executory. On this ground alone, the instant petition must be denied.  

(1) YES, the case should have first been brought to voluntary arbitration before the POA.  

Secs. 11.01 and 11.02 of the RAWOP pertinently provide:   

11.01 Arbitration              

Any disputes, differences or disagreements between BENGUET and the OWNER with reference to anything whatsoever pertaining to this Agreement that cannot be amicably settled by them shall not be cause of any action of any kind whatsoever in any court or administrative agency but shall, upon notice of one party to the other, be referred to a Board of Arbitrators consisting of three (3) members, one to be selected by BENGUET, another to be selected by the OWNER and the third to be selected by the aforementioned two arbitrators so appointed.              

x x x x   

11.02  Court Action              

No action shall be instituted in court as to any matter in dispute as hereinabove stated, except to enforce the decision of the majority of the Arbitrators   

A contractual stipulation that requires prior resort to voluntary arbitration before the parties can go directly to court is not illegal and is in fact promoted by the State.  

To reiterate, availment of voluntary arbitration before resort is made to the courts or quasi-judicial agencies of the government is a valid contractual stipulation that must be adhered to by the parties.   

In other words, in the event a case that should properly be the subject of voluntary arbitration is erroneously filed with the courts or quasi-judicial agencies, on motion of the defendant, the court or quasi-judicial agency shall determine whether such contractual provision for arbitration is sufficient and effective. If in affirmative, the court or quasi-judicial agency shall then order the enforcement of said provision.  

In sum, on the issue of whether POA should have referred the case to voluntary arbitration, we find that, indeed, POA has no jurisdiction over the dispute which is governed by RA 876, the arbitration law.  

HOWEVER, ESTOPPEL APPLIES. the Court rules that the jurisdiction of POA and that of MAB can no longer be questioned by Benguet at this late hour. What Benguet should have done was to immediately challenge the POA's jurisdiction by a special civil action for certiorari when POA ruled that it has jurisdiction over the dispute.  To redo the proceedings fully participated in by the parties after the lapse of seven years from date of institution of the original action with the POA would be anathema to the speedy and efficient administration of justice.  

(2) The cancellation of the RAWOP was supported by evidence. 

(3) There is no unjust enrichment in the instant case. There is no unjust enrichment when the person who will benefit has a valid claim to such benefit.  

The principle of unjust enrichment under Article 22 requires two conditions:  (1) that a person is benefited without a valid basis or justification, and  (2) that such benefit is derived at another's expense or damage.  

Clearly, there is no unjust enrichment in the instant case as the cancellation of the RAWOP, which left Benguet without any legal right to participate in further developing the mining claims, was brought about by its violation of the RAWOP. Hence, Benguet has no one to blame but itself for its predicament.  

OBITER DICTA: 

(1) Difference between compulsory & voluntary arbitration --  

In Reformist Union of R.B. Liner, Inc. vs. NLRC, compulsory arbitration has been defined both as “the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties, and as a mode of arbitration where the parties are compelled to accept the resolution of their dispute through arbitration by a third party.” While a voluntary arbitrator is not part of the governmental unit or labor department's personnel, said arbitrator renders arbitration services provided for under labor laws.  

There is a clear distinction between compulsory and voluntary arbitration. The arbitration provided by the POA is compulsory, while the nature of the arbitration provision in the RAWOP is voluntary, not involving any government agency.