1. MARCOS B. COMILANG vs. HON. GENEROSO A.

BUENDIA

G.R. No. L-24757 October 25, 1967

Facts:

 Nicolas Comilang staked a mining claim known as the "Bua Fraction Mineral Claim" over a
parcel of land in Tuding, Benguet, Mountain Province, with an area of 76,809 square meters,
more or less. He stopped the exploration but continue to live in the house built on a portion of
the land with his wife and other relatives. In 1918, Macario Comilang and his relatives also
settled on a portion of the land with an area of about one (1) hectare, for residential and
agricultural purposes.
 Surface rights over the area embraced in the original Bua Fraction Mineral Claim of Nicolas
Comilang soon became the subject of litigation in an action to quiet title filed in RTC of Baguio
by the other heirs against Macario claiming that they bought the rights and interest of Nicolas
Comilang in the old mining claim.

 The court dismissed both claims of ownership of petitioner and respondent declaring the area
as a public land, but recognized the possession of Macario Comilang over 1½ hectares which
was declared for taxation purposes but later on levied and sold at a public auction to satisfy a
money judgment obtained by spouses Jose Coloma and Eugenia Rumbaoa against Macario
filed in the RTC of Baguio. The spouses were the purchasers in the auction and the certificate
of sale was issued in favor of them.

 In the meantime, an application for lode patent covering the Bua Fraction Mineral Claim was
filed with the Bureau of Mines. Abdon Delenela and his co-heirs filed their opposition to the
application. Pending application, Delenela filed an action for the determination of their rights
on the land in the RTC of Baguio to which the said court awarded one-half in undivided share
in the mineral claim in favor of Marcos and the other half also in undivided share in favor of
Abdon Delenela and co-heirs. Delenela, with the knowledge and conformity of Marcos
Comilang, redeemed and bought from the Coloma spouses, the latter's rights, title, interest
and claim to the 1-1/2 hectares of land acquired under the certificate of sale. A writ of
possession was issued in their favor.

 In a petition for certiorari with PI filed in the RTC of Baguio, the wife of Marcos questioned the
power of municipal court to issue said writ of possession on two grounds (1) that conjugal
property had been levied upon and sold in the execution sale, and her share therein is
affected; and (2) that there can be no severance of surface rights over a mineral claim located
under the Philippine Bill of 1902, and petitioner argued that the sheriff could not have validly
sold the surface rights in the execution sale of June 1, 1957. The court rendered a decision in
said case, holding that the writ of possession issued by the respondent Municipal Judge was
within his competence and jurisdiction. On appeal, the decision became final.

 For a second time, a petition for certiorari and mandamus with PI was instituted by Marcos
Comilang in the RTC of Baguio City seeking the annulment of the order granting the alias writ
of possession in favor of Delenela and Perez, and again the Court of First Instance of Baguio
threw out the petition in its order dated October 22, 1964. Hence the petition.

Issue: whether or not the final certificate of sale conveying the land described in Tax Declaration No.
4771 to the purchasers in the execution sale is not a valid disposition of a portion of the public
domain, and specially in view of the subsequent issuance of a mineral lode patent over the Bua
Mineral Claim by the Director of Mines (Patent issued on November 7, 1966) whereby full ownership
not only of the minerals therein but also of the surface ground have been conveyed to the patentee
thereof, and, therefore, the Municipal Court of Baguio City may no longer eject them from the land.
Held: No. The 1-½ hectares portions of the Bua Fraction Mineral Claim described in Tax Declaration
No. 4771 in the name of herein appellant was levied upon and sold at public auction to satisfy the
money judgment against him in Civil Case No. 1433 of the Municipal Court of Baguio City, and the
corresponding certificate of sale was issued in favor of the judgment creditors. Interest acquired under
like certificates of sale alone has been described as more than a lien on the property, more than an
equitable estate, an inchoate legal title to the property.

The validity of that sale was questioned when the Municipal Court ordered the eviction of appellant
from the land sold on execution, and the Supreme Court declared in L-18897 that the sale was valid.
The sale operated to divest appellant of his rights to the land which vested in the purchasers at the
auction sale. The parties herein subsequently litigated their rights to the mineral claim in Civil Case
No. 735 of the Court of First Instance of Baguio City, and on the basis of their amicable agreement
(appellant was a party in the case), the court declared the Bua Mineral Claim co-ownership property of
the parties thereto "except the improvements existing thereon".

There is no room for doubt, therefore, that the right to possess or own the surface ground is separate
and distinct from the mineral rights over the same land. And when the application for lode patent to
the mineral claim was prosecuted in the Bureau of Mines, the said application could not have legally
included the surface ground sold to another in the execution sale. Consequently, We have to declare
that the patent procured thereunder, at least with respect to the 1-½ hectares sold in execution
pertains only to the mineral right and does not include the surface ground of the land in question.

2. APEX MINING CO., INC. V. SOUTHEAST MINDANAO GOLD MINING CORP. (2006)

Facts: The case involves the “Diwalwal Gold Rush Area” (Diwalwal), a rich tract of mineral land
located inside the Agusan-Davao-Surigao Forest Reserve in Davao del Norte and Davao Oriental. Since
the early 1980s, Diwalwal has been stormed by conflicts brought about by numerous mining claims
over it. On March 10, 1986, Marcopper Mining Corporation (MMC) was granted an Exploration Permit
(EP 133) by the Bureau of Mines and Geo-Sciences (BMG). A long battle ensued between Apex and
MMC with the latter seeking the cancellation of the mining claims of Apex on the ground that such
mining claims were within a forest reservation (Agusan-Davao-Surigao Forest Reserve) and thus the
acquisition on mining rights should have been through an application for a permit to prospect with the
BFD and not through registration of a DOL with the BMG. When it reached the SC in 1991, the Court
ruled against Apex holding that the area is a forest reserve and thus it should have applied for a
permit to prospect with the BFD. On February 16 1994, MMC assigned all its rights to EP 133 to
Southeast Mindanao Gold Mining Corporation (SEM), a domestic corporation which is alleged to be a
100%-owned subsidiary of MMC. Subsequently, BMG registered SEM’s Mineral Production Sharing
Agreement (MPSA) application and the Deed of Assignment. Several oppositions were filed. The Panel
of Arbitrators created by the DENR upheld the validity of EP 133. During the pendency of the case,
DENR AO No. 2002-18 was issued declaring an emergency situation in the Diwalwal Gold Rush Area
and ordering the stoppage of all mining operations therein.

Issues:

1. W/N EP 133 and its subsequent transfer to SEM is valid.

2. W/N the DENR Secretary has authority to issue DAO 66 declaring 729 hectares of the areas covered
by the Agusan-Davao-Surigao Forest Reserve as non-forest lands and open to smallscale mining
purposes.

3. Who (among petitioners Apex and Balite) has priority right over Diwalwal?

Held/Ratio:
1. INVALID. One of the terms and conditions of EP 133 is: “That this permit shall be for the exclusive
use and benefit of the permittee or his duly authorized agents and shall be used for mineral
exploration purposes only and for no other purpose.” While it may be true that SEM is a 100%
subsidiary corporation of MMC, there is no showing that the former is the duly authorized agent of the
latter. As such, the assignment is null and void as it directly contravenes the terms and conditions of
the grant of EP 133. a. The Deed of Assignment was a total abdication of MMC’s rights over the
permit. It is not a mere grant of authority to SEM as agent. b. Reason for the stipulation. Exploration
permits are strictly granted to entities or individuals possessing the resources and capability to
undertake mining operations. Without such a condition, non-qualified entities or individuals could
circumvent the strict requirements under the law by the simple expediency of acquiring the permit
from the original permittee. c. Separate personality. The fact that SEM is a 100% subsidiary of MMC
does not automatically make it an agent of MMC. A corporation is an artificial being invested by law
with a personality separate and distinct from persons composing it as well as from that of any other
legal entity to which it may be related. Absent any clear proof to the contrary, SEM is a separate and
distinct entity from MMC. d. Doctrine of piercing the corporate veil inapplicable. Only in cases where
the corporate fiction was used as a shield for fraud, illegality or inequity may the veil be pierced and
removed. The doctrine of piercing the corporate veil cannot therefore be used as a vehicle to commit
prohibited acts. The assignment of the permit in favor of SEM is utilized to circumvent the condition of
nontransferability of the exploration permit. To allow SEM to avail itself of this doctrine and to approve
the validity of the assignment is tantamount to sanctioning an illegal act which is what the doctrine
precisely seeks to forestall. e. PD 463 requires approval of Secretary of DENR. Also, PD 463 (Mineral
Resources Development Decree), which is the governing law when the assignment was executed,
explicitly requires that the transfer or assignment of mining rights, including the right to explore a
mining area, must be with the prior approval of the Secretary of DENR. Such is not present in this
case. f. EP 133 expired by non-renewal. Although EP 133 was extended for 12 months until July 6,
1994, MMC never renewed its permit prior and after its expiration. With the expiration of EP 133 on
July 6, 1994, MMC lost any right to the Diwalwal Gold Rush Area. SEM, on the other hand, has not
acquired any right to the said area because the transfer of EP 133 in its favor is invalid. Hence, both
MMC and SEM have not acquired any vested right over the area covered by EP 133.

2. NO. The DENR Secretary has no power to convert forest reserves into non-forest reserves. Such
power is vested with the President. The DENR Secretary may only recommend to the President which
forest reservations are to be withdrawn from the coverage thereof. Thus, DAO No. 66 is null and void
for having been issued in excess of the DENR Secretary’s authority.

3. (Since it’s been held that neither MMC nor SEM has any right over Diwalwal, it is thus necessary to
make a determination of the existing right of the remaining claimants, petitioners Apex and Balite, in
the dispute.) The issue on who has priority right over Diwalwal is deemed overtaken by the issuance
of Proclamation 297 and DAO No. 2002-18, both being constitutionally-sanctioned acts of the
Executive Branch. Mining operations in the Diwalwal Mineral Reservation are now, therefore, within
the full control of the State through the executive branch. Pursuant to Sec. 5 of RA 7942, the State
can either: (1) directly undertake the exploration, development and utilization of the area or (2) opt to
award mining operations in the mineral reservation to private entities including petitioners Apex and
Balite, if it wishes. The exercise of this prerogative lies with the Executive Department over which
courts will not interfere.

3. SOUTHEAST MINDANAO GOLD MINING CORPORATION v. BALITE PORTAL MINING

COOPERATIVE

G.R. No. 135190 April 3, 2002

FACTS:
The instant case involves a rich tract of mineral land situated in the Agusan-Davao-Surigao Forest
Reserve known as the “Diwalwal Gold Rush Area.” Located at Mt. Diwata in the municipalities of
Monkayo and Cateel in Davao Del Norte, the land has been embroiled in controversy since the mid-
80’s due to the scramble over gold deposits found within its bowels.

On March 10, 1988, Marcopper Mining Corporation (Marcopper) was granted Exploration Permit No.
133 (EP No. 133) over 4,491 hectares of land, which included the hotly-contested Diwalwal area.

Not long thereafter, Congress enacted on June 27, 1991 Republic Act No. 7076, or the People’s Small-
Scale Mining Act. The law established a People’s Small-Scale Mining Program to be implemented by
the Secretary of the DENR and created the Provincial Mining Regulatory Board (PMRB) under the DENR
Secretary’s direct supervision and control. The statute also authorized the PMRB to declare and set
aside small-scale mining areas subject to review by the DENR Secretary and award mining contracts
to small-scale miners under certain conditions.

DENR Secretary Fulgencio S. Factoran issued Department Administrative Order (DAO) No. 66,
declaring 729 hectares of the Diwalwal area as non-forest land open to small-scale mining. The
issuance was made pursuant to the powers vested in the DENR Secretary by Proclamation No. 369,
which established the Agusan-Davao-Surigao Forest Reserve.

On April 1, 1997, Provincial Mining Regulatory Board of Davao passed Resolution No. 26, Series of
1997, authorizing the issuance of ore transport permits (OTPs) to small-scale miners operating in the
Diwalwal mines.

Thus, on May 30, 1997, petitioner filed a complaint for damages before the Regional Trial Court of
Makati City, Branch 61, against the DENR Secretary and PMRB-Davao. SEM alleged that the illegal
issuance of the OTPs allowed the extraction and hauling of P60,000.00 worth of gold ore per truckload
from SEM's mining claim.

Petitioner then filed a special civil action for certiorari, prohibition and mandamus before the Court of
Appeals against PMRB-Davao, the DENR Secretary and Balite Communal Portal Mining Cooperative
(BCPMC), which represented all the OTP grantees. It prayed for the nullification of the above-quoted
Memorandum Order No. 97-03 on the ground that the “direct state utilization” espoused therein would
effectively impair its vested rights under EP No. 133.

The Court of Appeals dismissed the petition. It ruled that the DENR Secretary did not abuse his
discretion in issuing Memorandum Order No. 97-03 since the same was merely a directive to conduct
studies on the various options available to the government for solving the Diwalwal conflict.

ISSUE: Whether or not the Court of Appeals erred when it concluded that the assailed memorandum
order did not adopt the “direct state utilization scheme” in resolving the Diwalwal dispute.

RULING:

No. The challenged MO 97-03 did not conclusively adopt "direct state utilization" as a policy in
resolving the Diwalwal dispute. The terms of the memorandum clearly indicate that what was directed
thereunder was merely a study of this option and nothing else. Contrary to petitioner's contention, it
did not grant any management/operating or profit-sharing agreement to small-scale miners or to any
party, for that matter, but simply instructed the DENR officials concerned to undertake studies to
determine its feasibility.

Further, there is no merit in petitioner's assertion that MO 97-03 sanctions violation of mining laws by
allowing illegal miners to enter into mining agreements with the State, and it must likewise be pointed
out that under no circumstances may petitioner's rights under EP No. 133 be regarded as total and
absolute.

Petitioner's first assigned error is baseless and premised on tentative assumptions. Petitioner cannot
claim any absolute right to the Diwalwal mines pending resolution of the Consolidated Mines cases,
much less ask us to assume, at this point, that respondent BCMC and the other mining firms are
illegal miners. These factual issues are to be properly threshed out in CA G.R. SP Nos. 61215 and
61216, which have yet to be decided by the Court of Appeals. Any objection raised against MO 97-03
is likewise premature at this point, inasmuch as it merely ordered a study of an option which the State
is authorized by law to undertake.

There is no need to rule on the matter of the OTPs, considering that the grounds invoked by petitioner
for invalidating the same are inextricably linked to the issues raised in the Consolidated Mines cases.

4. MINERS ASSOCIATION OF THE PHILIPPINES, INC., petitioner, vs.

HON. FULGENCIO S. FACTORAN, JR., Secretary of Environment and Natural Resources, and
JOEL D. MUYCO, Director of Mines and Geosciences Bureau, respondents

G.R. No. 98332 January 16, 1995 ROMERO, J.:

Facts:

Former President Cory Aquino, exercising legislative power, issued EO211 prescribing the interim
procedures in the processing and approval of exploration, development and utilization of minerals. To
implement the act, Secretary of DENR promulgated AO No. 57 and 82. On 25 July 1987 the then
President Aquino issued EO279 authorizing the DENR SECRETARY to negotiate and conclude joint
venture, co-production, production sharing, development and those agreements involving technical or
financial assistance by foreign owned corporations for large scale EDU.

Pursuant to Sec 6 of EO 279, the DENR issued AO No.57 which provides that all existing mining leases
or agreements which were granted AFTER the affectivity of the 1987 Constitution, except small scale
mining leases and those pertaining to sand and gravel and quarry resources covering an area of 20
hectares or less, shall be converted into production sharing agreement within one year from the
effectivity of the guidelines.

On 20 November 1990, Sec of DENR issued EO No. 82 laying down the Procedural Guidelines on the
award of mineral Production sharing agreement. This order provides the person or entities required to
submit a LETTER OF INTENT and MINERAL PRODUCTION SHARING AGREEMENT within 2 years from
the effectivity of AO No.57 or until 17 July 1991. Failure to do so within the prescribed period shall
cause the abandonment of mining, quarry, gravel and sand.

The Miners Association Inc assailed the validity of the above-mentioned issuances and alleged the
following:

1. Sec of DENR issued both AO57 and 82 in excess of their rule-making power under Section 6 of
EO279.

2. The orders violate the non-impairment of contracts provision under the bill of rights on the ground
the AO57 unduly pre-terminates existing mining leases and other mining agreements and
automatically converts them into production-sharing agreements within one year from its effectivity
date.

3. AO No.82 declares that failure to submit the LETTER OF INTENT and Mineral Production Sharing
Agreement within 2 years from the date of effectivity of said guidelines shall cause an abandonment of
their mining, quarry, sand and gravel permits.

On 13 November 1991, Continental Marble Corp sought to intervene in the cases alleging that the TRO
issued by the Court, the DENR Regional Office in San Fernando Pampanga refused to renew its Mines
Temporary Permit and claimed further that its rights and interest are prejudicially affected by AO
No.57 and 82.
Issue:

1. Whether AO57 and 82 have the effect of abrogating the existing mining laws and unduly
preterminate the existing mining leases and agreements.

Held: No.

PD No. 463, as amended, pertains to the old system of EDU of natural resources through license,
concession or lease which has been disallowed by Article XII, Sec 2 of the 1987 Philippine
Constitution. By virtue of this constitutional mandate and its implementing laws, the provisions dealing
with license, concession or leases ceased to operate as the governing laws. In other words, in all areas
of administration and management of mineral lands, the provision of PD463, as amended and other
existing laws still govern.

Upon the effectivity of the 1987 Consti on 2 February 1987, the State assumed a more dynamic role in
EDU. Article XII, Section 2 explicitly ordains that EDU shall under the full control and supervision of
the State. Given these considerations, there is no clear showing that the DENR Sec has transcended
the bounds demarcated in the EO279 for the exercise of his rule-making power.

Article XII, Sec 2 of the 1987 Consti does not apply retroactively to license, concession or lease
granted by the government under the 1973 Consti or before the effectivity of the present Constitution.
The intent to apply prospectively was stressed during the deliberations in the Constitutional
Commission.

AO No. 57 applies only to all existing mining leases or agreements which were granted after the
effectivity of the 1987 Consti pursuant to EO No. 211. It bears to mention that under the text of
EO211, there is a reservation clause which provides that the privileges as well as the terms and
conditions of all existing mining leases or agreements granted after the effectiviyt of the present
constitution shall be subject to any and all modification or alterations which the Congress may adopt.
Hence, the strictures of the non-impairment of contract clause do not apply to the aforesaid mining
leased or agreements after the effectivity of the 1987 Consti.

The State in the exercise of police power may not be precluded by the constitutional restriction on
non-impairment of contracts. Police power being co-extensive with the necessities of the case and the
demands of public interest.

5. REPUBLIC V. ROSEMOOR MINING

FACTS:

Four respondents were granted permission to look for marble deposits in the mountains of Biak-na-
Bato. When they discovered marble deposits in Mount Mabio, they applied for license to exploit said
marble deposits and they were issued such license. However, in a letter, Ernest o Maceda (newly-
appointed Minister of the Department of Energy and Natural Resources) cancelled their license.
Prclamation No. 84 was then issued, confirming the cancellation of the license.

RULING OF THE TRIAL COURT:

The privilege granted under respondents’ license already became a property right, which is protected
unde the due process clause. License cancellation, without notice and hearing was unjust. Moreover,
the proclamation, which confirmed the cancellation of the license was an ex post facto law.

RULING OF THE COURT OF APPEALS:

CA affirmed the decision of the Trial Court.

It adds that the Constitution provides for the non-impairment of obligations and contracts, which
implies that the license of the respondents must be respected.

ISSUES:

1. WON the license was valid.

Petitioners: License was issued in violation of PD 463 – a quarry license should cover not
more than 100 hectares in any given province. The license was issued to Rosemoor Mining and
Development Corporation and covered a 330-hectare land.

Respondents: The license was embraced by 4 separate applications, each for an aread of 81
hectares. Also, the issue has been mooted because PD 463 has already been repealed by RA
7942 or the Philippine Mining Act of 1995.

2. WON Proclamation No. 84 – which confirmed the cancellation of the license, is valid.

Petitioners: The license was validly declared a nullity and terminated. Maceda’sletter did not cancel or
revoke the license, but merely declared its nullity. Also, the respondents waived their right to notice
and hearing in their license application.

Respondents: Their right to due process was violated because there was no notice and hearing.
Proclamation No. 84 is not valid because it violates the clause on non-impairment of contracts, it is an
ex post facto law and/or a bill of attainder, and it was issued by the President after the effectivity of
the 1987 Constitution.

RULING OF THE SUPREME COURT:

Tbe Petition is GRANTED.

SC set aside the decision of the CA and TC.

1. THE LICENSE IS NOT VALID.

The issue has not been mooted because while RA 7942 has expressly repealed provisions of mining
laws that are inconsistent with its own, it respects previously issued valid and existing licenses.

When the license was issued, the governing law was PD 463. Thus, it was subject to the terms and
conditions of PD 463, including the part where it says that the quarry license shall cover an area of not
more than 100 hectares in any one province and not more than 1000 hectares in the entire
Philippines. The license in question was issued in the name of Rosemoor Mining Development
Corporation and not the 4 individual stockholders. It clearly violates PD 463 because the license
covered an area of 330-hectares.

2. PROCLAMATION NO. 84, CONFIRMING THE CANCELLATION OF THE LICENSE, IS VALID.

Respondents’ license may be revoked or rescinded by executive action when the national interest so
requires because it is not a contract, property or a property right protected by the due process clause
of the Constitution. The license itself provides such condition. The license can also be validly revoked
by the State in the exercise of police power, in accordance with the Regalian doctrine.

Also, since the license is not a contract, the non-impairment clause may not be invoked. Even if it
were, the non-impairment clause must yield to the police power of the State.
The proclamation cannot also be said to be a bill-of-attainder, which is a legislative act which inflicts
punishment without judicial trial. The proclamation only declares the nullity of the license. It does not
declare guilt or impose punishment.

The proclamation can also be said to be an ex post facto law because it does not fall under any of the
six recognized instances when a law is considered as such. It is not even criminal or penal in nature.

Lastly, when President Aquino issued Proclamation No. 84, she was still validly exercising legislative
powers under the Provisional Constitution of 1986.

6. YINLU BICOL MINING CORPORATION, Petitioner, v. TRANS-ASIA OIL AND ENERGY

DEVELOPMENT CORPORATION, Respondent.

[G.R. No. 207942, January 12, 2015, BERSAMIN, J.:]

TOPIC: PERSONS – EFFECT AND APPLICATION OF LAWS – REPEAL OF LAWS

DOCTRINE: Rights pertaining to mining patents issued pursuant to the Philippine Bill of 1902 and
existing prior to November 15, 1935 are vested rights that cannot be impaired.

FACTS:

1. This case involves 13 mining claims over the area located in Barrio Larap, Municipality of Jose
Panganiban, Camarines Norte, a portion of which was owned and mined by Philippine Iron
Mines, Inc. (PIMI), which ceased operations in 1975 due to financial losses.
a. PIMI’s portion (known as the PIMI Larap Mines) was sold in a foreclosure sale to the
Manila Banking Corporation (MBC) and Philippine Commercial and Industrial Bank
(PCIB, later Banco De Oro, or BDO).
2. The Government then opened the area for exploration.
a. Trans-Asia Oil and Energy Development Corporation (Trans-Asia) then explored the
area from 1986 onwards.
i. In 1996, it entered into an operating agreement with Philex Mining Corporation
over the area, their agreement being duly registered by the Mining Recorder
Section of Regional Office No. V of the Department of Environment and Natural
Resources (DENR).
3. 1997: Trans-Asia filed an application for the approval of Mineral Production Sharing Agreement
(MPSA) over the area in that Regional Office of the DENR, through the Mines and Geosciences
Bureau (MGB), in Daraga, Albay.
a. The application, which was amended in 1999, was granted on July 28, 2007 under
MPSA No. 252-2007-V, by which Trans-Asia was given the exclusive right to
explore, develop and utilize the mineral deposits in the portion of the mineral
lands.
4. August 31 2007: Yinlu Bicol Mining Corporation (Yinlu) informed the DENR by letter
that it had acquired the mining patents of PIMI from MBC/BDO by way of a deed of
absolute sale, stating that the areas covered by its mining patents were within the
areas of Trans-Asia’s MPSA
5. September 14, 2007: Trans-Asia informed Yinlu by letter that it would commence exploration
works in Yinlu’s areas pursuant to the MPSA, and requested Yinlu to allow its personnel to
access the areas for the works to be undertaken.
a. Yinlu replied that Trans-Asia could proceed with its exploration works on its own
private property in the Calambayungan area, not in the areas covered by its (Yinlu)
mining patents.
6. TransAsia found out that the registration of its MPSA had been put on hold because
of Yinlu’s request to register the deed of absolute sale in its favor.
7. DENR Secretary directed MGB Regional Office V to verify the validity of the mining patents of
Yinlu.
 a. MGB Regional Office V informed the Office of the DENR Secretary that there was no
record on file showing the existence of the mining patents of Yinlu. Accordingly, the
parties were required to submit their respective position papers
8. DENR Sec Atienza ordered the amendment of Trans-Asia’s MPSA by excluding therefrom the
mineral lands covered by Yinlu’s mining patents
a. DENR Sec. Jose L. Atienza, Jr in his order found that the mining patents had been
issued to PIMI in 1930 as evidenced by and indicated in PIMI’s certificates of title
submitted by Yinlu; and that the patents were validly transferred to and were now
owned by Yinlu.
b. He rejected Trans-Asia’s argument that Yinlu’s patents had no effect and were deemed
abandoned because Yinlu had failed to register them pursuant to Section 101 of
Presidential Decree No. 463, as amended.
c. He refuted Trans-Asia’s contention that there was a continuing requirement
under the Philippine Bill of 1902 for the mining patent holder to undertake
improvements in order to have the patents subsist, and that Yinlu failed to
perform its obligation to register and to undertake the improvement,
observing that the requirement was not an absolute imposition.
i. He noted that the suspension of PIMI’s operation in 1974 due to financial
losses and the foreclosure of its mortgaged properties by the creditor banks
(MBC/PCIB) constituted force majeure that justified PIMI’s failure in 1974 to
comply with the registration requirement under P.D. No. 463;
ii. that the Philippine Bill of 1902, which was the basis for issuing the patents,
allowed the private ownership of minerals, rendering the minerals covered by
the patents to be segregated from the public domain and be considered
private property; and
iii. that the Regalian doctrine, under which the State owned all natural resources,
was adopted only by the 1935, 1973 and 1987 Constitutions
9. Office of the President affirmed the DENR Sec’s Order.
a. Under the Philippine Constitution, there is an absolute prohibition against alienation of
natural resources. Mining locations may only be subject to concession or lease.
i. The only exception is where a location of a mining claim was perfected prior to
November 15, 1935, when the government under the 1935 Constitution was
inaugurated, and according to the laws existing at that time a valid location of
a mining claim segregated the area from the public domain, and the locator is
entitled to a grant of the beneficial ownership of the claim and the right to a
patent therefore.
b. The right of the locator to the mining patent is a vested right, and the
Constitution recognizes such right as an exception to the prohibition against
alienation of natural resources.
i. The right of the appellee as the beneficial owner of the subject mining patents
in this case, therefore, is superior to the claims of appellant
ii. The existence of the TCT’s in the name of appellee further bolsters the
existence of the mining patents. Under PD 1529, also known as the Property
Registration Decree, once a title is cleared of all claims or where none exists,
the ownership over the real property covered by the Torrens title becomes
conclusive and indefeasible even as against the government.
10. CA: It agreed with the DENR Secretary and the OP that Yinlu held mining patents over the
disputed mining areas, but ruled that Yinlu was required to register the patents under
PD No. 463 in order for the patents to be recognized in its favor.
a. It found that Yinlu and its predecessors-in-interest did not register the patents
pursuant to PD No. 463; hence, the patents lapsed and had no more effect
11. Yinlu asserts the following:
a. The mining patents of Yinlu were registered pursuant to Act No. 496 (Land
Registration Act of 1902) in relation to the Philippine Bill of 1902 (Act of Congress of
July 1 , 1902), the governing law on the registration of mineral patents, were valid,
existing and indefeasible.
i. Section 21 of the Philippine Bill of 1902: allowed citizens of the United
States and of the Philippine Islands to explore, occupy and purchase mineral
lands
 ii. Section 27 of the Philippine Bill of 1902: after the exploration and claim of
the mineral land, the owner of the claim and of the mineral patents was
entitled to all the minerals found in the area subject of the claim
iii. its registered mineral patents, being valid and existing, could not be defeated
by adverse, open and notorious possession and prescription;
b. substantive rights over mineral claims perfected under the Philippine Bill of
1902 subsisted despite the changes of the Philippine Constitution and of the
mining laws
i. Constitution could not impair vested rights;
ii. Section 100 and Section 101 of PD No. 463 would impair its vested
rights under its mineral patents if said provisions were applied to it;
iii. Section 99 of PD No. 463 expressly prohibited the application of
Section 100 and Section 101 to vested rights.

ISSUE: Whether Yinlu’s mining patents constitute vested rights and could not be disregarded.

HELD: YES

1. A mining patent pertains to a title granted by the government for the said mining claim.
2. Under the 1935 Constitution, which took effect on November 15 1935, the alienation of
natural resources, with the exception of public agricultural land, was expressly prohibited.
a. The natural resources being referred therein included mineral lands of public domain,
but not mineral lands that at the time the 1935 Constitution took effect no longer
formed part of the public domain.
b. Prohibition against the alienation of natural resources did not apply to a
mining claim or patent existing prior to November 15, 1935.
c. McDaniel v. Apacible: A mining claim perfected under the law is property in the
highest sense, which may be sold and conveyed and will pass by descent. It has the
effect of a grant (patent) by the United States of the right of present and exclusive
possession of the lands located.
d. The owner of a perfected valid appropriation of public mineral lands is entitled to the
exclusive possession and enjoyment against everyone, including the Government
itself. Where there is a valid and perfected location of a mining claim, the area
becomes segregated from the public domain and the property of the locator.
e. A valid and subsisting location of mineral land, made and kept up in accordance with
the provisions of the statutes of the United States, has the effect of a grant by the
United States of the present and exclusive possession of the lands located, and this
exclusive right of possession and enjoyment continues during the entire life of the
location. There is no provision for, nor suggestion of, a prior termination thereof.
2. Even without a patent, the possessory right of a qualified locator after discovery of minerals
upon the claim is a property right in the fullest sense, unaffected by the fact that the
paramount title to the land is in the Government, and it is capable of transfer by conveyance,
inheritance, or devise.
a. the mining claim under consideration no longer formed part of the public
domain when the provisions of Article XII of the Constitution became
effective, it does not come within the prohibition against the alienation of
natural resources; and the petitioner has the right to a patent therefor upon
compliance with the terms and conditions prescribed by law.
3. Although Section 100 and Section 101 of PD No. 463 require registration and annual work
obligations, Section 99 of PD No. 463 nevertheless expressly provides that the provisions of
PD No. 463 shall not apply if their application will impair vested rights under other mining laws
Section 99. Non-impairment of Vested or Acquired Substantive Rights. Changes made and new
provisions and rules laid down by this Decree which may prejudice or impair vested or acquired rights
in accordance with order mining laws previously in force shall have no retroactive effect. Provided,
That the provisions of this Decree which are procedural in nature shall prevail.
 a. A right is vested when the right to enjoyment has become the property of some
particular person or persons as a present interest.
i. It is “the privilege to enjoy property legally vested, to enforce contracts, and
enjoy the rights of property conferred by existing law” or “some right or
interest in property which has become fixed and established and is no longer
open to doubt or controversy”
b. The due process clause prohibits the annihilation of vested rights. ‘A state may not impair
vested rights by legislative enactment, by the enactment or by the subsequent repeal of a
municipal ordinance, or by a change in the constitution of the State, except in a legitimate
exercise of the police power’
c. It has been observed that, generally, the term “vested right” expresses the concept of
present fixed interest, which in right reason and natural justice should be protected
against arbitrary State action, or an innately just an imperative right which an
enlightened free society, sensitive to inherent and irrefragable individual rights, cannot
deny
d. Republic v. Court of Appeals: that mining rights acquired under the Philippine Bill of 1902
and prior to the effectivity of the 1935 Constitution were vested rights that could not be
impaired even by the Government.
e. In the present case: the mining patents of Yinlu were issued pursuant to the
Philippine Bill of 1902 and were subsisting prior to the effectivity of the 1935
Constitution. Consequently, Yinlu and its predecessors-in-interest had acquired vested
rights in the disputed mineral lands that could not and should not be impaired even in light
of their past failure to comply with the requirement of registration and annual work
obligations.

G.R. No. L-49143 August 21, 1989

7. ZAMBALES CHROMITE MINING COMPANY, INC., petitioner,

vs.
HON. MINISTER OF NATURAL RESOURCES JOSE J. LEIDO JR. and DIRECTOR OF MINES
JUANITO C. FERNANDEZ, respondents. PHILEX MINING CORPORATION and REGALIAN
MINING EXPLORATION CORPORATION, intervenors.

This is a petition for certiorari and prohibition with preliminary injunction seeking to enjoin the Minister
(now Secretary) of Natural Resources and the Director of Mines from enforcing Presidential Decree No.
1214 dated October 14,1977 requiring all locators under the Act of Congress of July 1, 1902, as
amended, to apply for mining lease contracts under the provision of Presidential Decree No. 463 better
known as the Mineral Development Resources Decree of 1974 and to declare Presidential Decree No.
1214 unconstitutional since its enforcement would deprive petitioners of its property without due
process and without just compensation.

Petitioner Zambales Chromite Mining Company, Inc. is a mining corporation duly organized and
existing under and by virtue of the laws of the Philippines.

Petitioner claims that it is the owner and holder of sixty (60) mineral claims which it acquired through
purchase in good faith and for value 43 years ago. Said claims situated at the Municipality of Sta.
Cruz, Zambales, were located and registered in 1934 under the Act of U.S. Congress of July 1, 1902
(known as the Philippine Bill of 1902). (Petition, p. 2; Rollo, p. 3); that from 1934 to 1977 it has to its
credit a total investment of over Pl,222,640.00 for the mining exploration, development and operation
of its said sixty mining claims (Petition, p. 3; Rollo, p. 4); that on June 14, 1977 it actually and duly
flied its application for patent for each claim of said sixty (60) mineral claims (Petition, p. 4; Rollo, p.
5); that respondent Director of Mines issued an order dated July 13,1977 approving the application of
petitioner for availment of rights on said claims under Presidential Decree No. 463 (Petition, p. 5;
Rollo, p. 6); that the aforesaid sixty (60) lode mineral claims are already private property of
petitioner, following the doctrinal rule laid down in McDaniel v. Apacible and Cuisia (42 Phil. 749; 753-
754) andGold Creek Mining Corporation v. Rodriguez, et al. (66 Phil. 259) which had already been
segregated from the public domain to which petitioner is entitled to the exclusive possession and
enjoyment against everyone; that the issuance of Presidential Decree No. 1214 on October 14, 1977
which declared open to lease subsisting and valid patentable mining claims, lode or placer, located
under the provisions of the Act of U.S. Congress of July 1, 1902, as amended, already segregated
from the public domain and owned and held by it for over 43 years and requiring it without fail and
against their will to file a mining lease application with the Mines Regional Office concerned within a
period of one year from October 14, 1977 is a deprivation of petitioner's rights to the ownership of
said claims without due process of law nor or just compensation and therefore, unconstitutional.

The Court in its resolution dated November 3,1978, gave due course to the petition and required
respondents to comment (Rollo, p. 33).lâwphî1.ñèt The Solicitor General as counsel for public
respondent, flied his comment on March 26,1979 (Rollo, pp. 58-71-A).

On May 10, 1979, petitioner filed a reply (Rollo, p. 83) to the comment in compliance with the
resolution of April 10, 1979. But on May 9, 1979, Baguio Gold Mining Company, Philex Mining and
Regalian Mining Corporation filed with the Court two separate motions for leave to intervene (Rollo, p.
120).

On February 10, 1981, Baguio Gold Mining Company, Philex Mining Company and Regalian Mining
Corporation filed with the court a Joint Petition for Intervention (Rollo, p. 171) raising the same issues
brought up by petitioner Zambales Chromite Mining Company regarding the constitutionality of P.D.
No. 1214 based on the doctrinal mandates of the ruling cases of McDaniel v. Apacible, 42 Phil. 749
[1922] and Gold Creek Mining Corporation v. Rodriguez, 66 Phil. 259 (1939); Salazar Mining Co. v.
Rodriguez, et al., 67 Phil. 97, insofar as it invests inter alia, private ownership in patentable mining
claims to have survived to date due to a faithful compliance with the various requirements of
applicable mining laws to include the land surface of said mining claims. Petitionees memorandum was
adopted by intervenors as to the factual and legal showing of the unconstitutionality of Presidential
Decree No. 1214 (Rollo, pp. 455-456).

The Solicitor General as counsel for public respondent submitted his memorandum on February
12,1982 (Rollo, pp. 468499) while petitioner filed its reply to said memorandum on April 3, 1982
(Rollo, pp. 505-560).

Counsel for petitioner on August 20, 1982 filed a motion to refer this case to the Court En Bane for
action and decision (Rollo, p. 536) and on September 8,1982, the Court resolved to issue a temporary
restraining order, effective as of said date and continuing until otherwise ordered by the Court (Rollo,
p. 562).

On February 11, 1988 the Court acting on the motion for intervention filed by counsel for intervenor
Francisco N. Calinisan dated January 6,1988, and considering that this case has long been submitted
for decision, resolved to deny the aforesaid motion for having been filed late (Reno, p. 597).

The principal issue raised by the petitioner and by the erstwhile intervenors, is: whether or not under
the provision of P.D. No. 1214 there was deprivation of property without due process of law and just
compensation which makes said decree unconstitutional.

Their contention that a perfected and valid appropriation of public mineral lands operates as a
withdrawal of the tract of land from the public domain and is deemed to be already private property, is
without basis in fact and in law (Comment, Rollo, p. 61)

This issue has been resolved in a recent decision of this Court in Sta. Rosa Mining Co., Inc. vs. Leido
Jr. (156 SCRA 1 [1987]) where it was held that while rulings in McDaniel v. Apacible (42 Phil. 749
[1922]). and Gold Creek Mining Corp. v. Rodriguez (66 Phil. 259 [1938]) cited by the petitioner, true
enough, recognize the right of a locator of a mining claim as a property right; such right is not
absolute. It is merely a possessory right more so if petitioner's claims are still unpatented. It can be
lost through abandonment or forfeiture or they may be revoked on valid legal grounds.

In the case at bar, there is no showing that petitioner has complied with all the terms and conditions
prescribed by law prior to November 1, 1935; that there should be not only a valid and subsisting
location of the mineral land but that there should be, thereafter, continuous compliance with all the
requirements of law such as the performance of annual assessment works and payment of real estate
taxes. In fact, petitioner filed its application only in 1977 for a patent, or 43 years after it allegedly
located and registered the mining claims (Rollo, p. 63).lâwphî1.ñèt

As to the issue of constitutionality, the Court categorically stated that P.D. No. 1214 is constitutional.
The Court ruled:

...It is a valid exercise of the sovereign power of the State, as owner, over lands of the public domain,
of which petitioner's mining claims still form a part, and over the patrimony of the nation, of which
mineral deposits are a valuable asset. It may be underscored, in this connection, that the Decree does
not cover all mining claims located under the Phil. Bill of 1902, but only those claims over which their
locators had failed to obtain a patent. And even then, such locators may still avail of the renewable
twenty-five year (25) lease prescribed by Pres. Decree No. 463, the Mineral Development Resources
Decree of 1974.

Mere location does not mean absolute ownership over the affected land or the mining claim. It merely
segregates the located land or area from the public domain by barring other would be locators from
locating the same and appropriate for themselves the minerals found therein. To rule otherwise would
imply that location is all that is needed to acquire and maintain rights over a located mining claim.
This, we cannot approve or sanction because it is contrary to the intention of the lawmaker that the
locator should faithfully and consistently comply with the requirements for annual work and
improvements in the located mining claim. (Santa Rosa Mining Co., Inc. vs. Leido Jr., supra, pp. 8-9)

P.D. No. 1214 is in accord with Section 8, Article XIV of the 1973 Constitution and presently in Section
2, Article XII of the 1987 Constitution where the same constitutional mandate is restated.

On June 2,1988, the Court granted a motion filed by counsel for petitioner dated May 20,1988 to
admit a manifestation and motion wherein petitioner prayed that the "Court allow the petitioner to
change the original prayer in its petition dated October 10, 1978 with a new prayer directing public
respondents to dispose of petitioner's application on its own merit unaffected and without regard to
the provision of P.D. 1214 . . ." (p. 631, Rollo)

Records show that petitioner Zambales Chromite filed its patent application over its 60 mining claims
on June 14,1977 and to order such disposal of said "application on its own merit" is not within the
scope of the jurisdiction of the Court. For, even assuming claimant to be a holder of a subsisting and
valid patentable mining claim, this Court has held that it can no longer proceed with the acquisition of
a mining patent in view of P.D. No. 1214, issued on October 14, 1977, directing holder of subsisting
and patentable mining claims, lode or placer, located under the provisions of the Act of Congress on
July 1, 1902, as amended, to file a mining lease application . . . within one year from the approval of
the Decree and upon the filing thereof, holders of said claims shall be considered to have waived their
rights to the issuance of mining patents therefor: Provided, however, that the non-filing of the
application for mining lease by the holders thereby within the period herein prescribed shall cause the
forfeiture of all his rights to the claim." (Director of Lands v. Kalahi Investments, Inc., G.R. No. L-
48066, January 31, 1989). (Emphasis supplied)

PREMISES CONSIDERED, the instant petition is DENIED for lack of merit.

SO ORDERED
8. PNOC-ENERGY DEVELOPMENT CORPORATION (PNOC-EDC), Petitioner, vs. EMILIANO G.
VENERACION, JR., Respondent.

DECISION

CHICO-NAZARIO, J.:

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

FACTS

On 31 January 1989, respondent applied with the Mines and Geo-Sciences Development Services,
DENR, Region IX, Zamboanga City for a Declaration of Location (DOL) over Block 159 of the Malangas
Coal Reservation, situated at Barangays Payongan and Kauswagan, Alicia, Zamboanga del Sur. On 18
May 1989, the Office of the Regional Executive Director (RED) of the DENR informed the respondent
that his DOL cannot be registered since Block 159 was part of the Malangas Coal Reservation, as
provided under Proclamation No. 284, issued by the President on 19 July 1938. With the endorsement
of the Office of Energy Affairs (OEA) and the DENR Secretary, the respondent petitioned the Office of
the President for the withdrawal of Block 159 from the coal reservation and its conversion into a
mineral reservation.

The petitioner applied for a mineral prospecting permit over Block 159 (and Blocks 120 and 160) with
the OEA, which the latter granted on 4 September 1989. The Malangas Coal Reservation was, at that
time, under the administration of the OEA. When it had initially applied for a mineral prospecting
permit over lands within the Malangas Coal Reservation, the OEA advised it to obtain the permission of
the Bureau of Mines and GeoSciences (BMGS). On 18 October 1991, petitioner submitted to the
DENR an application/proposal for a Mineral Production Sharing Agreement (MPSA) over Blocks 120,
159 and 160 of the Malangas Coal Reservation. On 21 February 1992, the Officer-In-Charge Regional
Technical Director Dario R. Miñoza of the Mines and Geo-Sciences Developmental Service (MGDS)
advised the petitioner to amend its

application for MPSA by excluding Block 159 as the same is covered by the application of the
respondent. Nevertheless, the petitioner did not exclude Block 159 from its MPSA. Records also show
that it had not applied for nor was it able to obtain an Exploration Permit from the BMGS over Block
159.

On 13 April 1992, Presidential Proclamation No. 890 was issued, which effectively excluded Block 159
from the operation of Proclamation No. 284, and declared Block No. 159 as government mineral
reservation open for disposition to qualified mining applicants, pursuant to Executive Order No. 279.
On 26 May 1992, petitioner’s application for MPSA covering Coal Block Nos. 120, 159 and 160 was
accepted for filing. Respondent immediately filed, on 28 May 1992, a protest to the petitioner’s
inclusion of Block 159 in its application for MPSA before the RED of the DENR Office in Zamboanga
City. After the parties were heard, the RED, in an Order, dated 12 April 1993, ruled in favor of the
respondent and ordered the petitioner to amend its MPSA by excluding therefrom Block 159. On 18
May 1993, petitioner filed a Motion for Reconsideration of the Order dated 12 April 1993, which the
RED denied in an Order dated 5 July 1993. On 30 July 1993, petitioner filed an appeal with the DENR
Secretary questioning the Orders issued by the RED.
While the case was pending, respondent applied for a MPSA. On 31 July 1992, he paid the processing
fee for a MPSA covering Block 159 and was able to comply with all other requirements of the MPSA
application. On 4 October 1994, the Office of the 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.
Petitioner received its copy of the assailed Order dated 12 April 1993 on 7 May 1993, but filed its
Motion for Reconsideration only on 18 May 1993, or eleven days after its receipt thereof. Thereafter,
petitioner received a copy of the Order dated 5 July 1993 on 16 July 1993, but filed its appeal only on
30 July 1993 or nine days after the allowable period to appeal.

On 25 October 1994, petitioner, through a letter addressed to the DENR Secretary, sought the
reconsideration of the Decision, dated 4 October 1994. In a Resolution, dated 21 December 1994, the
then DENR Secretary Angel C. Alcala reversed the Decision, dated 4 October 1994, and gave due
course to the MPSA of the petitioner.

On 1 February 1995, respondent filed a Motion for Reconsideration of the Resolution, dated 21
December 1994. The now DENR Secretary Victor O. Ramos issued an Order, dated 5 August 1996,
reversing the Resolution, dated 21 December 1994 and reinstating the Decision, dated 4 October
1994. It 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. As a result, the DENR
Secretary no longer had the jurisdiction to issue the assailed Resolution, dated 21 December 1994. It
added that after looking into the merits of the case, the Orders of the RED were in accordance with
the evidence on record and the pertinent laws on the matter. On 20 August 1996, petitioner filed a
Motion for Reconsideration of the Order, dated 5 August 1996. On 21 May 1997, the MAB resolved the
motion in favor of the respondent and affirmed the assailed Order, dated 5 August 1996. It took
cognizance of the appeal filed by petitioner, in accordance with Section 78 of Republic Act No 7942,
otherwise known as The Philippine Mining Act of 1995. The MAB ruled that the petitioner filed its
appeal beyond the five-day prescriptive period provided under Presidential Decree No. 463, which was
then the governing law on the matter.

The MAB also decreed that the respondent had preferential mining rights over Block 159. It ruled that
the proper procedure with respect to the mining rights application over Block 159 when it was still part
of the Malangas Coal Reservation required the following: (1) application for prospecting permit with
the OEA or other office having jurisdiction over said reservation; (2) application for exploration permit;
(3) application for exclusion of the land from such reservation; (4) Presidential Declaration on
exclusion as recommended by the Secretary; and (5) application for Lease thereof with priority given
to holder of exploration Permit.

The MAB noted that petitioner did not file for an exploration permit nor applied for the exclusion of
Block 159. Moreover, petitioner filed a MPSA on

18 October 1991, or almost six (6) months prior to the issuance of Proclamation No. 890 excluding
Block 159 from the Malangas Coal Reservation and allowing its disposition. Thus, the application for a
MPSA over Block 159, while it was still part of a government reservation other than a mineral
reservation, was erroneous and improper and could not have been legally accepted. And, since the
records show that only one MPSA was filed after the issuance of Proclamation 890 – that of the
respondent’s, the preferential right over Block 159 was acquired by the respondent. The MAB,
nevertheless, pointed out that the said preferential right does not necessarily lead to the granting of
the respondent’s MPSA, but merely consists of the right to have his application evaluated and the
prohibition against accepting other mining applications over Block 159 pending the processing of his
MPSA.
ISSUES:

There are two main issues that need to be resolved in this case: (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: (kopyahon ko na lang ang sa SCRA)

Administrative Law; Appeals; Appeals from judgments and final orders of quasi-judicial bodies are
required to be brought to the CA, under the requirements and conditions set forth in Rule 43 of the
Rules of CivPro. With the enactment of Republic Act No. 7902, this Court issued Circular No. 1-95
dated 16 May 1995 governing appeals from all quasi-judicial bodies to the Court of Appeals by petition
for review, regardless of the nature of the question raised. Said circular was incorporated in Rule 43 of
the Rules of Civil Procedure. In addition, this Court held in a line of cases that appeals from judgments
and final orders of quasi-judicial bodies are required to be brought to the Court of Appeals, under the
requirements and conditions set forth in Rule 43 of the Rules of Civil Procedure. Nevertheless, this
Court has taken into account the fact that these cases were promulgated after the petitioner filed this
appeal on 4 August 1997, and decided to take cognizance of the present case.

Natural resurces; mines, by providing a five-day period within which to file an appeal on the decisions
of the Dir. Of Mines and Geo-Sciences, PD 463 unquestionably repealed Section 61 of CA 137 - When
Presidential Decree No. 463 was enacted in 1974, Section 50 of the law had clearly intended to repeal
the corresponding provision found in Section 61 of Commonwealth Act No. 137, and to shorten the
30-day period within which to file an appeal from the Decision of the Director of Mines and Geo-
Sciences to five days. Section 61 of Commonwealth Act No. 137, as amended, provides that: SEC. 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 from 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. x x x. Section 50 of
Presidential Decree No. 463 reads: Sec. 50. Appeals. - Any party not satisfied with the decision or
order of the Director, may, within five (5) days from receipt thereof, appeal to the Minister [now
Secretary]. Decisions of the Minister [now Secretary] are likewise appealable within five (5) days from
receipt thereof by the affected party to the President whose decision shall be final and executory.

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 GeoSciences, Presidential
Decree No. 463 unquestionably repealed Section 61 of Commonwealth Act No. 137.

Rules of Procedure must be faithfully followed except only when for persuasive reasons, they may be
relaxed to relieve a litigant of an injustice not commensurate with his failure to comply with the
prescribed procedure - Petitioner invokes the judicial policy of allowing appeals, although filed late,
when the interest of justice so requires. Procedural law has its own rationale in the orderly
administration of justice, namely, to ensure the effective enforcement of substantive rights by
providing for a system that
obviates arbitrariness, caprice, despotism, or whimsicality in the settlement of disputes. Hence, rules
of procedure must be faithfully followed except only when for persuasive reasons, they may be relaxed
to relieve a litigant of an injustice not commensurate with his failure to comply with the prescribed
procedure. Concomitant to a liberal application of the rules of procedure should be an effort on the
part of the party invoking liberality to explain his failure to abide by the rules.30 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.

Natural resources, mines: as a general rule, prospecting and exploration of minerals in a government
reservation is prohibited under Sec. 13 of PD 463 - However, the same rule provides an exception
involving instances when the government agency concerned allows it. Section 13. Areas Closed to
Mining Location. – No prospecting and exploration shall be allowed: (a) In military, and other
Government reservations except when authorized by the proper Government agency concerned.
Section 8 of Presidential Decree No. 463 reiterates the rule and clarifies it further by stating that
prospecting, exploration and exploitation of minerals on reserved lands other than mineral
reservations may be undertaken by the proper government agency. As an exception to this rule,
qualified persons may undertake the said prospecting, exploration and exploitation when the said
agencies cannot undertake them.

Petition denied!

G.R. No. 195580 April 21, 2014

9. NARRA NICKEL MINING AND DEVELOPMENT CORP., TESORO MINING AND

DEVELOPMENT, INC., and MCARTHUR MINING, INC., Petitioners, vs.REDMONT
CONSOLIDATED MINES CORP., Respondent.

FACTS:

Sometime in December 2006, respondent Redmont Consolidated Mines Corp. (Redmont), a domestic
corporation organized and existing under Philippine laws, took interest in mining and exploring certain
areas of the province of Palawan. After inquiring with the Department of Environment and Natural
Resources (DENR), it learned that the areas where it wanted to undertake exploration and mining
activities where already covered by Mineral Production Sharing Agreement (MPSA) applications of
petitioners Narra, Tesoro and McArthur.

Petitioner McArthur Narra and Tesoro, filed an application for an MPSA and Exploration Permit (EP)
which was subsequently issued.

On January 2, 2007, Redmont filed before the Panel of Arbitrators (POA) of the DENR three (3)
separate petitions for the denial of petitioners’ applications for MPSA.

Redmont alleged that at least 60% of the capital stock of McArthur, Tesoro and Narra are owned and
controlled by MBMI Resources, Inc. (MBMI), a 100% Canadian corporation. Redmont reasoned that
since MBMI is a considerable stockholder of petitioners, it was the driving force behind petitioners’
filing of the MPSAs over the areas covered by applications since it knows that it can only participate in
mining activities through corporations which are deemed Filipino citizens. Redmont argued that given
that petitioners’ capital stocks were mostly owned by MBMI, they were likewise disqualified from
engaging in mining activities through MPSAs, which are reserved only for Filipino citizens.
Petitioners averred that they were qualified persons under Section 3(aq) of Republic Act No. (RA)
7942 or the Philippine Mining Act of 1995. They stated that their nationality as applicants is immaterial
because they also applied for Financial or Technical Assistance Agreements (FTAA) denominated as
AFTA-IVB-09 for McArthur, AFTA-IVB-08 for Tesoro and AFTA-IVB-07 for Narra, which are granted to
foreign-owned corporations. Nevertheless, they claimed that the issue on nationality should not be
raised since McArthur, Tesoro and Narra are in fact Philippine Nationals as 60% of their capital is
owned by citizens of the Philippines.

On December 14, 2007, the POA issued a Resolution disqualifying petitioners from gaining MPSAs. The
POA considered petitioners as foreign corporations being "effectively controlled" by MBMI, a 100%
Canadian company and declared their MPSAs null and void.

Pending the resolution of the appeal filed by petitioners with the MAB, Redmont filed a Complaint with
the Securities and Exchange Commission (SEC), seeking the revocation of the certificates for
registration of petitioners on the ground that they are foreign-owned or controlled corporations
engaged in mining in violation of Philippine laws.

CA found that there was doubt as to the nationality of petitioners when it realized that petitioners had
a common major investor, MBMI, a corporation composed of 100% Canadians. Pursuant to the first
sentence of paragraph 7 of Department of Justice (DOJ) Opinion No. 020, Series of 2005, adopting the
1967 SEC Rules which implemented the requirement of the Constitution and other laws pertaining to
the exploitation of natural resources, the CA used the "grandfather rule" to determine the nationality
of petitioners.

In determining the nationality of petitioners, the CA looked into their corporate structures and their
corresponding common shareholders. Using the grandfather rule, the CA discovered that MBMI
in effect owned majority of the common stocks of the petitioners as well as at least 60%
equity interest of other majority shareholders of petitioners through joint venture
agreements. The CA found that through a "web of corporate layering, it is clear that one
common controlling investor in all mining corporations involved x x x is MBMI." Thus, it
concluded that petitioners McArthur, Tesoro and Narra are also in partnership with, or
privies-in-interest of, MBMI.

ISSUE:

Whether or not the Court of Appeals’ ruling that Narra, Tesoro and McArthur are foreign corporations
based on the "Grandfather Rule" is contrary to law, particularly the express mandate of the Foreign
Investments Act of 1991, as amended, and the FIA Rules.

HELD:

No. There are two acknowledged tests in determining the nationality of a corporation: the control
test and the grandfather rule. Paragraph 7 of DOJ Opinion No. 020, Series of 2005, adopting the
1967 SEC Rules which implemented the requirement of the Constitution and other laws pertaining to
the controlling interests in enterprises engaged in the exploitation of natural resources owned by
Filipino citizens, provides:

Shares belonging to corporations or partnerships at least 60% of the capital of which

is owned by Filipino citizens shall be considered as of Philippine nationality (CONTROL TEST),
but if the percentage of Filipino ownership in the corporation or partnership is less than 60%,
only the number of shares corresponding to such percentage shall be counted as of Philippine
nationality (GRANDFATHER RULE). Thus, if 100,000 shares are registered in the name of a
 corporation or partnership at least 60% of the capital stock or capital, respectively, of which
belong to Filipino citizens, all of the shares shall be recorded as owned by Filipinos. But if less
than 60%, or say, 50% of the capital stock or capital of the corporation or partnership,
respectively, belongs to Filipino citizens, only 50,000 shares shall be counted as owned by
Filipinos and the other 50,000 shall be recorded as belonging to aliens.

The grandfather rule, petitioners reasoned, has no leg to stand on in the instant case since the
definition of a "Philippine National" under Sec. 3 of the FIA does not provide for it. They further claim
that the grandfather rule "has been abandoned and is no longer the applicable rule." They also opined
that the last portion of Sec. 3 of the FIA admits the application of a "corporate layering" scheme of
corporations. Petitioners claim that the clear and unambiguous wordings of the statute preclude the
court from construing it and prevent the court’s use of discretion in applying the law. They said that
the plain, literal meaning of the statute meant the application of the control test is obligatory.

SC disagreed. "Corporate layering" is admittedly allowed by the FIA; but if it is used to circumvent the
Constitution and pertinent laws, then it becomes illegal. Further, the pronouncement of petitioners
that the grandfather rule has already been abandoned must be discredited for lack of basis.

Petitioners McArthur, Tesoro and Narra are not Filipino since MBMI, a 100% Canadian corporation,
owns 60% or more of their equity interests. Such conclusion is derived from grandfathering
petitioners’ corporate owners, namely: MMI, SMMI and PLMDC. The "control test" is still the prevailing
mode of determining whether or not a corporation is a Filipino corporation, within the ambit of Sec. 2,
Art. II of the 1987 Constitution, entitled to undertake the exploration, development and utilization of
the natural resources of the Philippines. When in the mind of the Court there is doubt, based on the
attendant facts and circumstances of the case, in the 60-40 Filipino-equity ownership in the
corporation, then it may apply the "grandfather rule."

10. DIDIPIO V. GOZUN:*

Constitutionality of the Mining Act:

The Facts
On June 20, 1994, before the passage of Republic Act 7042 (The Philippine Mining Act of 1995),
President Fidel V. Ramos executed a Financial and Technical Assistance Agreement (FTAA) with Arimco
Mining Corporation (AMC), over a total land area of 37,000 hectares covering the provinces of Nueva
Vizcaya and Quirino. Included in that area was Barangay Didipio, Kasibu, Nueva Vizcaya.

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

On September 7, 2001, counsels for petitioners filed a demand letter addressed to then Secretary
Heherson Alvarez of the Department of Environment and Natural Resources (DENR), seeking
cancellation of the CAMC FTAA for the primary reason that Republic Act 7942 and its Implementing
Rules and Regulations (IRR)-Department Administrative Order (DAO) No. 96-40 were
unconstitutional. This letter was referred to the panel of arbitrators of the Mines and Geosciences
Bureau (MGB), Regional Office No. 2, Tuguegarao, Cagayan, for further action. The MGB eventually
rejected the demand.

Petitioners thus filed the present Petition for Prohibition and Mandamus. They prayed that the Court
issue an order (1) enjoining public respondent from acting on any application for an FTAA; (2)
declaring the Philippine Mining Act of 1995 and its IRR unconstitutional; and (3) canceling the FTAA
issued to CAMC.

The Issues
 The parties raised two sets of issues. The first was procedural: Was the issue of eminent
domain a justiciable controversy? Did petitioners have a legal standing to file the case?

The second set of issues was substantive in character: Did Section 76 of Republic Act 7942
allow the unlawful taking of private property for private purpose? Did the assailed law and its IRR
encroach on the power of the trial courts to determine just compensation, inasmuch as that
determination was cognizable only by the panel of arbitrators? Did the Mining Act make it possible for
FTAA contracts to cede over to a fully foreign-owned corporation full control and management of
mining enterprises, resulting in the alleged reduction of the State to a passive regulator, dependent on
submitted plans and reports and having only weak review and audit powers? Were foreign
corporations barred from making decisions on the conduct of operations and the management of the
mining project? Were service contracts prohibited?

The Court’s Decision, penned by Justice Minita V. Chico-Nazario, [1] brushed aside the procedural
objections and answered all the substantive questions in the negative.

Procedural Issues

Respondents maintained that the issue of eminent domain was not ripe for adjudication,
because petitioners failed to allege that the latter’s properties had actually been taken by CAMC.
Neither did petitioners allege that their property rights had been endangered or were in danger on
account of the corporation’s FTAA. Dismissing this issue, the Court held that there was a live
controversy involving a clash of legal rights, because Republic Act 7942 had been enacted, DAO 96-40
approved, and FTAAs entered into.

The FTAA holders were already operating in various provinces of the country. Among them was
CAMC, which operated in various provinces of Nueva Vizcaya and Quirino. As a result of the CAMC
FTAA in those places, numerous individuals, including petitioners, were in danger of being ousted from
their landholdings. In this light, the Court could not await the adverse consequences of the law in
order to consider the controversy actual and ripe for judicial intervention. Actual eviction of the
landowners and occupants did not have to happen for this Court to intervene.

Also affirmed by the Court was the legal standing of petitioners to raise the constitutionality of the
questioned FTAA, as they had alleged personal and substantial injury from the mining activities of
CAMC. Likewise, they were under an imminent threat of being displaced from their landholdings as a
result of the implementation of the questioned FTAA.

Substantive Issues

Validity of Section 76 of
Republic Act 7942 and DAO 96-40

Petitioners claimed that Section 76 of Republic Act 7942 and DAO 96-40 were unconstitutional
for allowing the unlawful and unjust taking of private property for a private purpose. The Court,
however, rejected that claim. Underscoring the history of mining laws, it explained that their
evolution gave a positive indication that mining operators who were qualified to own lands were
granted the authority to exercise eminent domain for the entry, acquisition, and use of private lands in
areas open to mining operations.

Considering that Section 1 of PD 512 granted qualified mining operators that authority, which was
deemed incorporated in Section 76 of Republic Act 7942, the inescapable conclusion was that the
latter was a “taking” provision.

By this conclusion, the Court did not mean, though, that Section 76 was unconstitutional for allowing
the taking of private property without a determination of public use and the payment of just
compensation. Concededly, for a taking to be valid, it must be for public use. The mining industry
was deemed to play a pivotal role in the economic development of the country and to be a vital tool in
the government’s emphasis on accelerated recovery. It was therefore an industry that yielded public
benefit.
The Court rejected petitioners’ claim that the State’s discretion to decide when to take private
property had been contractually reduced by the CAMC FTAA. Moreover, it held that the assailed
agreement had laid down the ways and means by which a foreign contractor, disqualified from owning
land, could identify for the government which specific surface areas within the FTAA contract area
were to be acquired for the mine infrastructure. Through a voluntary transaction, the government
would acquire ownership of those areas on behalf of the contractor, which would then be able to
proceed with the full implementation of the agreement.

Eminent domain was not yet called for at this stage, since there were still various avenues by which
surface rights could be acquired other than expropriation. The FTAA provision under attack merely
facilitated the implementation of the provision in question and thus shielded CAMC from a charge of
violating the Anti-Dummy Law. Also, the Mining Law and its implementing rules provided for the
payment of just compensation for private properties to be expropriated.

The Power of Courts to

Determine Just Compensation

It was contended that the assailed law and order encroached on the power of the trial courts to
determine just compensation in eminent domain cases, inasmuch as that determination was
cognizable only by a panel of arbitrators.

The Mining Act did not prevent the courts from taking cognizance of expropriation cases. The
disagreement in Section 107 that petitioner referred to did not involve any exercise of eminent
domain. Rather, it contemplated a situation in which the permit holders were allowed entry into the
lands of surface owners, and in which disagreement ensued as regards the proper compensation for
the permitted entry and use of the private lands. Noticeably, the provision pointed to a voluntary, not
to an involuntary, sale or transaction.

The law conferred upon a panel of arbitrators the authority to decide cases in which permit holders
were refused entry by owners, occupants, and concessionaires, thus necessitating an involuntary
taking. The grant of authority did not imply, though, that the determination of just compensation by
the arbitrators or the mines adjudication board was final and conclusive; the determination was only
preliminary, unless accepted by all the parties concerned. There was nothing wrong with this
procedure, because the original and exclusive jurisdiction of the courts to determine just
compensation remained intact, despite the preliminary determination made by the administrative
agency.

Sufficient State Control

Over Mining Operations

Petitioners asserted that the law, the implementing regulations, and the CAMC FTAA had ceded
beneficial ownership of mineral resources to the foreign contractor. Holding that this matter had
already been settled in La Bugal-B’laan Tribal Association v. Ramos,[2] the Court emphasized that the
FTAA contractor was not free to do whatever it pleased and get away with it; on the contrary, the
contractor would have to follow the government line if it wanted to stay in the enterprise. The law
and its IRR had vested in the government more than a sufficient degree of control and supervision
over the conduct of mining operations.

Proper Interpretation of
“Agreements Involving Either
Technical or Financial Assistance”

Petitioners maintained that the Constitution barred aliens and foreign-owned corporations from
entering into direct arrangements with the government. Such arrangements included agreements
involving co-production, joint venture, and production sharing. Moreover, the participation of foreign-
owned corporations in large-scale exploration was limited to agreements for either financial or
technical assistance only.
 In discrediting this argument, the Court again cited La Bugal B’laan. The use of the word
“involving” in the phrase “agreements involving either technical or financial assistance” implied that
the agreements with foreign corporations were not limited to mere financial and technical assistance.
If the real intention of the drafters was to confine foreign corporations to financial or technical
assistance and nothing more, their language would have certainly been so unmistakably restrictive
and stringent as to leave no doubt in anyone’s mind about their true intent. Evidently, there was a
conscious and deliberate decision on their part to avoid the use of restrictive wording that bespoke an
intent not to use the questioned expression in an exclusionary and limiting manner.

Service Contracts Not Prohibited

Petitioner contended that the service contract regime under the previous Constitution was
expressly prohibited under the present one. “Service contracts,” the term found in the 1973
Constitution, was later deleted to avoid the circumvention of constitutional prohibitions prevalent in
the 1987 Charter.

The Court brushed aside this contention. The term used earlier had not been carried over to the
1987 Constitution, which bore no categorical statement banning service contracts from mining
activities. This mere fact did not mean that service contracts, as understood in the 1973 Charter,
were eradicated from the present Constitution. The latter still allowed the continued use of these
contracts with foreign corporations that would invest in and operate and manage extractive
enterprises, subject to the full control of the State. This time however, safety measures would be put
in place to prevent the abuses of the past regime. At bottom, the Court reiterated the doctrinal
pronouncements in La Bugal.