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.