10.LOEONARDO A. PAAT Vs.

COURT OF APPEALS 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. 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. On 1 June 22, 1989, 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 2 Baggayan, which was, however, denied in a subsequent order of July 12, 1989. Subsequently, the case was brought by the petitioners to the Secretary of DENR pursuant to private respondents' statement in their letter dated June 28, 1989 that in case 3 their letter for reconsideration would be denied then "this letter should be considered as an appeal to the Secretary." Pending resolution however of the appeal, a suit for replevin, docketed as Civil Case 4031, was filed by the private respondents against 4 5 petitioner Layugan and Executive Director Baggayan with the Regional Trial Court, Branch 2 of Cagayan, which issued a writ 6 ordering the return of the truck to private respondents. Petitioner Layugan and Executive Director Baggayan filed a motion to dismiss with the trial court contending, inter alia, that private respondents had no cause of action for their failure to exhaust 7 administrative remedies. The trial court denied the motion to dismiss in an order dated December 28, 1989. Their motion for reconsideration having been likewise denied, a petition for certiorari was filed by the petitioners with the respondent Court of 8 Appeals which sustained the trial court's order ruling that the question involved is purely a legal question. Hence, this present 9 petition, with prayer for temporary restraining order and/or preliminary injunction, seeking to reverse the decision of the respondent Court of Appeals was filed by the petitioners on September 9, 1993. By virtue of the Resolution dated September 10 27, 1993, the prayer for the issuance of temporary restraining order of petitioners was granted by this Court. Issue: Whether or not the sevretary of DENR and his representatives are empowered to confiscate and forfeit conveyances used in transporting illegal forest product in favor of the government. Held: 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, which is quoted herein below: Sec. 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. (Emphasis 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." In the 33 construction of statutes, it must be read in such a way as to give effect to the purpose projected in the statute. Statutes should be construed in the light of the object to be achieved and the evil or mischief to be suppressed, and they should be 34 given such construction as will advance the object, suppress the mischief, and secure the benefits intended. In this wise, the observation of the Solicitor General is significant, thus:

But precisely because of the need to make forestry laws "more responsive to present situations and realities" and in view of the "urgency to conserve the remaining resources of the country," that the government opted to add Section 68-A. This amendatory provision is an administrative remedy totally separate and distinct from criminal proceedings. More than anything else, it is intended to supplant the inadequacies that characterize enforcement of forestry laws through criminal actions. The preamble of EO 277-the law that added Section 68-A to PD 705-is most revealing: "WHEREAS, there is an urgency to conserve the remaining forest resources of the country for the benefit and welfare of the present and future generations of Filipinos; WHEREAS, our forest resources may be effectively conserved and protected through the vigilant enforcement and implementation of our forestry laws, rules and regulations; WHEREAS, the implementation of our forestry laws suffers from technical difficulties, due to certain inadequacies in the penal provisions of the Revised Forestry Code of the Philippines; and WHEREAS, to overcome this difficulties, there is a need to penalize certain acts more responsive to present situations and realities;"

11. SEPA CARINO, plaintiff-appellee, vs. THE INSULAR GOVERNMENT, defendant-appellant. G.R. No. 2540 | 1906-04-16

On the 23d of February, 1904, Sepa Cario presented a petition to the Court of Land Registration asking that she be inscribed as the owner of a tract of land of 79,227.80 square meters, situated in the Government reservation of Baguio, in the Province of Benguet. The Solicitor-General appeared in the court below and opposed the inscription on the ground that the land described in the petition was public land. The court below ordered the inscription; the Solicitor-General moved for a new trial, which was denied, and he has brought the case here by bill of exceptions. The land described in the petition in this case is a part of the land described in the petition in the case of Cristobal Ramos 1 (4 Off. Gaz., 391). All the questions of law presented in this case hare already been decided in the cases of Jones vs. The Insular Government, 2 No. 2506, and Vicente Balpiedad vs. The Insular Government, 3 No. 2539, it being noted, however, that it was proved in this case that Sepa Cario was a native of the Islands. The only question that remains to be considered is whether there was proof of possession for ten years. The evidence in all these cases is practically the same. Sepa Cario, the petitioner in this case, is a sister of Sioco Cario, the grantor of the petitioner Jones, in case No. 2506. In this particular case it was proved that the land in question was given to the petitioner by her father, Mateo Cario; that it had previously been in the possession of her grandfather, Ortega; that the respective owners had lived upon and cultivated the land and that it had been inclosed. There was no evidence of any adverse occupation or possession by anyone. The question as to the effect of the survey made at the instance of Ramos is considered in the case of Vicente Balpiedad, No. 2539, just decided.

The judgment of the court below is affirmed, with the costs of this instance against the appellant. After the expiration of twenty days let final judgment be entered in accordance herewith and ten days thereafter let the cause be remanded to the court of its origin for proper procedure. So ordered.

12. REPUBLIC OF THE PHILIPPINES, Represented by the DIRECTOR OF LANDS, petitioner, vs. HON. PEDRO SAMSON ANIMAS, in his capacity as Judge of CFI South Cotabato, Branch I, General Santos City, ISAGANI DU TIMBOL and the REGISTER OF DEEDS OF GENERAL SANTOS CITY, G.R. No. L-37682 | 1974-03-29

DECISION ESGUERRA, J: Petition to review the order of the Court of First Instance of South Cotabato, Branch I, General Santos City, dated June 22, 1973, dismissing the complaint in its Civil Case No. 1253, entitled "Republic of the Philippines, Plaintiff, vs. Isagani Du Timbol and the Register of Deeds of General Santos City, Defendants", instituted by the plaintiff to declare null and void Free Patent No. V-466102 and Original Certificate of Title (O.C.T.) No. P-2508 based thereon issued in the name of defendant Isagani Du Timbol; to order the aforesaid defendant to surrender the owner's duplicate of O.C.T. No. P-2508 and the defendant Register of Deeds to cancel the same; to decree the reversion of the land in question to the mass of public domain, and granting such further relief as may be just and equitable in the premises. The land covered by the free patent and title in question was originally applied for by Precila Soria, who on February 23, 1966, transferred her rights to the land and its improvements to defendant Isagani Du Timbol who filed his application therefor on February 3, 1969, as a transferee from Precila Soria. On December 12, 1969, free Patent No. V-466102 was issued by the President of the Philippines for the land in question, and on July 20, 1970, after transmittal of the patent to the Register of Deeds of General Santos City, Original Certificate of Title (O.C.T.) No. P-2508 was issued in the name of defendant Isagani Du Timbol. On August 5, 1971, the Republic of the Philippines, at the instance of the Bureau of Forestry, filed a complaint in the Court of First Instance of Cotabato, Branch I, General Santos City (Civil Case No. 1253), to declare free patent No. V-466102 and OriginalCertificate of Title No. P-2508 in the name of defendant Isagani Du Timbol null and void ab initio and to order

the reversion of the land in question to the mass of public domain. The action is based on the ground that the land covered thereby is a forest or timber land which is not disposable under the Public Land Act; that in a reclassification of the public lands in the vicinity where the land in question is situated made by the Bureau of Forestry on March 7, 1958, the said land was plotted on Bureau of Forestry map L.C. 700 to be inside the area which was reverted to the category of public forest, whereas the application for free patent by Isagani Du Timbol was filed on June 3, 1969, or more than eleven years thereafter; that the said patent and title were obtained fraudulently as private respondent Isagani Du Timbol never occupied and cultivated the land applied for. Invoking the case of Ramirez vs. Court of Appeals (G.R. No. L-28591, 30 SCRA 207-301), holding that a certificate of title fraudulently secured is not null and void ab initio, unless the fraud consisted in misrepresenting that the land covered by the application is part of the public domain when it is not, the respondent court dismissed the complaint on the ground that said Certificate of Title based on the patent had became indefeasible in view of the lapse of the one-year period prescribed under Section 38 of the Land Registration Act for review of a decree of title on the ground of fraud. From this order of June 22, 1973, dismissing the complaint, plaintiff Republic of the Philippines has appealed to this Court for review. After careful deliberation, this Court grants the petition on the ground that the area covered by the patent and title is notdisposable public land, it being a part of the forest zone and, hence, the patent and title thereto are null and void. The defense of indefeasibility of a certificate of title issued pursuant to a free patent does not lie against the state in an action for reversion of the land covered thereby when such land is a part of a public forest or of a forest reservation. As a general rule, timber or forest lands are not alienable or disposable under either the Constitution of 1935 or the Constitution of 1973. Although the Director of Lands has jurisdiction over public lands classified as agricultural under the constitution, or alienable or disposable under the Public Land Act, and is charged with the administration of all laws relative thereto, mineral and timber lands are beyond his jurisdiction. It is the Bureau of Forestry that has jurisdiction and authority over the demarcation, protection, management, reproduction, occupancy and use of all public forests and forest reservations and over the granting of licenses for the taking of products therefrom, including stone and earth (Section 1816 of the Revised Administrative Code). That the area in question is a forest or timber land is clearly established by the certification made by the Bureau of Forest Development that it is within the portion of the area which was reverted to the category of forest land, approved by the President on March 7, 1958. When the defendant Isagani Du Timbol filed his application for free patent over the land in question on June 3, 1969, the area in question was not a disposable or alienable public land but a public forest. Titles issued to private parties by the Bureau of Lands when the land covered thereby is not disposable public land but forest land are void ab initio. In Gatchalian vs. Pavilen, et al., L-17619, Oct. 31, 1962, 6 SCRA p. 508, 512, this Court said: "And if it be true that the Bureau of Lands had no jurisdiction to issue a patent because the land involved was still inalienable forest land when granted, then It may be plausibly contended that the patent title would be ab initio void, subject to attack at any time by any party adversely affected." (Gatchalian vs. Pavilen, et al., L-17619, Oct. 31, 1962, supra, citing Civil Code Arts. 1409 and 1421; Vao vs. Insular Gov't, 41 Phil. 161; Aderable vs. Director of Forestry, L-13663, March 25, 1960)." A patent is void at law if the officer who issued the patent had no authority to do so (Knight vs. Land Ass., 142 U.S. 161, 12 Sup. Ct., 258, 35L ED. 974; italics supplied). If a person obtains a title under the Public Land Act which includes, by mistake or oversight, lands which cannot be registered under the Torrens System, or when the Director of Lands did not have jurisdiction over the same because it is a public forest, the grantee does not, by virtue of said certificate of title alone, become the owner of the land illegally included. (See Ledesma vs. Municipality of Iloilo, 49 Phil. 769)

The case of Ramirez vs. Court of Appeals, G. R. No. L-28591, Oct. 31, 1969, 30 SCRA 297, relied upon by respondent Court in dismissing this case, is not controlling. In that case no forest land was involved but agricultural public land which was first covered by a patent issued to one party and later registered under the Torrens System by the other party. The litigation was between private parties where the party who registered it under Act No. 496 sought the nullity of the title of the patentee under the Public Land Act. In the case at bar the party seeking the nullity of the title and reversion of the land is the state itself which is specifically authorized under Section 101 of the Public Land Act to initiate such proceedings as an attribute of sovereignty, a remedy not available to a private individual. The complaint alleges in its paragraph 8 that applicant Isagani Du Timbol was never in possession of the property prior to his filing the application, contrary to the provisions of law that the applicant must have been in possession or cultivation thereof for at least 30 years; that the applicant, after diligent search by the Acting Chief of the Survey-Party, Francisco R. Alcones, in South Cotabato, could not be contacted because he is a resident of Davao City; that there are no existing signs of improvements found in the area in question as it is not under cultivation but covered with grasses, bushes and small trees; that it is being used as ranch for grazing cows by the heirs of Hermogenes Chilsot; that no monuments were placed on the area surveyed which goes to show that there was no actual survey thereof; that the property in question is inside the ranch of the heirs of Hermogenes Chilsot under Pasture Lease Agreement No. 1244 and, therefore, inside the forest zone; and that saidranch has a fence around it to show that other persons could not enter and cultivate the same, and that the signature of then Acting District Land Officer Elias de Castro of South Cotabato has been forged to facilitate the issuance of patent in favor of Isagani Du Timbol. The above alleged circumstances are indicative of fraud in the filing of the application and obtaining title to the land, and if proven would override respondent Judge's order dismissing the case without hearing. The misrepresentations of the applicant that he had been occupying and cultivating the land and residing thereon are sufficient grounds to nullify the grant of the patent and title under Section 91 of the Public Land Law which provides as follows: "That statements made in the application shall be considered as essential conditions or parts of any concession, title or permit issued on the basis of such application, and any false statement thereon or omission of facts, changing, or modifying the consideration of the facts set forth in such statement, and any subsequent modification, alteration, or change of the material facts set forth in the application shall ipso facto produce the cancellation of the concession, title or permit granted. . . ." A certificate of title that is void may be ordered cancelled. A title will be considered void if it is procured through fraud, as when a person applies for registration of the land under his name although the property belongs to another. In the case of disposable public lands, failure on the part of the grantee to comply with the conditions imposed by law is a ground for holdingsuch title void (Director of Lands vs. Court of Appeals, et al., G. R. No. L-17696, May 19, 1966, 17 SCRA, 71, 79-80; italics supplied). The lapse of the one year period within which a decree of title may be reopened for fraud would not prevent the cancellation thereof, for to hold that a title may become indefeasible by registration, even if such title had been securedthrough fraud or in violation of the law, would be the height of absurdity. Registration should not be a shield of fraud in securing title. (J. M. Tuason & Co., Inc. vs. Macalindog, L-15398, December 29, 1962, 6 SCRA 938, page 38). Considering that it is the state is seeking the cancellation of the title of respondent Isagani Du Timbol, said title has not become indefeasible for prescription cannot be invoked against the state. A title founded on fraud may be cancelled, notwithstanding the lapse of one year from the issuance thereof, through a petition filed in court by the Solicitor General, (Sumail v. Court of

First Instance of Cotabato, 51 O.G. p. 2414 Phil. L-8278, 96 Phil. 946; Eugenio, et al., vs. Perdido, et al., G. R. No. L-7083, May 19, 1955; De los Santos vs. Roman Catholic Church of Midsayap, G.R. No. L-6088, Feb. 24, 1954, 94 Phil. 405). Public land fraudulently included in patents or certificates of title may be recovered or reverted to the state in accordance with Section 101 of the Public Land Act (Director of Lands vs. Jugado, et al., G. R. No. L-14707, May 23, 1961). Prescription does not lie against the state in such cases for the Statute of Limitations does not run against the state (Article 1108, paragraph 4 of the New Civil Codel. The right of reversion or reconveyance to the state is not barred by prescription (Republic of the Philippines vs. Ramona Ruiz, et al. G. R. No. L-23712, April 29, 1968, 23 SCRA 348: People vs. Ramos, G. R. No. L-15481, Jan. 31, 1963, 17 SCRA 12; Government of the Philippines vs. Monte de Piedad 35 Phil. 728; 751-753). Even granting that the title of private respondent Isagani Du Timbol can no longer be reopened under the Land Registration Act, the land covered thereby may be reconveyed to the state in an action for reconveyance under Section 101 of Commonwealth Act 141 (Public Land Act), for the remedy of reconveyance is adequately covered by the prayer of the complaint for the grant of such other relief as may be just and equitable in the premises. FOR ALL THE FOREGOING, the order of the respondent court, dated June 22, 1973, dismissing the complaint, and that of September 29, 1973, denying the motion for its reconsideration, both issued in Civil Case No. 1253 of the respondent court, are hereby annulled and set aside. The respondent court shall proceed to hear said Civil Case and render judgment thereon accordingly. Costs against respondent Isagani Du Timbol.

13. G.R. Nos. L-31666, L-31667 and L-31668 April 30, 1979 LEPANTO CONSOLIDATED MINING COMPANY, petitioner, vs. MANUEL DUMYUNG, THE REGISTER OF DEEDS OF BAGUIO CITY, and the COURT OF FIRST INSTANCE OF BAGUIO CITY (BRANCH I), respondents. LEPANTO CONSOLIDATED MINING COMPANY, petitioner, vs. FORTUNATO DUMYUNG, THE REGISTER OF DEEDS OF BAGUIO CITY , and the COURT OF FIRST INSTANCE OF BAGUIO CITY (BRANCH I), respondents. LEPANTO CONSOLIDATED MINING COMPANY, petitioner, vs. DUMYUNG BONAYAN, THE REGISTER OF DEEDS OF BAGUIO CITY, and the COURT OF FIRST INSTANCE OF BAGUIO CITY (BRANCH I), respondents. Sycip, Salazar, Luna, Manalo & Feliciano, Jesus B. Santos and Hill & Associates for petitioner. Floro B. Bugnosen for private respondents.

FERNANDEZ, J.: This is a petition to review the order of the Court of First Instance of Baguio City, Branch I, dismissing the three complaints for annulment of titles in Civil Cases Nos. 1068, 1069 and 1070 entitled "Republic of the Philippines,Plaintiff, 1 versus, Manuel Dumyung, et al., Defendants, Lepanto Consolidated Mining Company, Intervenor" for being without merit. The Republic of the Philippines, represented by the Director of Lands, commenced in the Court of First Instance of Baguio City Civil Cases Nos. 1068, 1069 and 1070 for annulment of Free Patents Nos. V-152242, V-155050 and V-152243, and of the corresponding Original Certificates of Title Nos. P-208, P-210 and P-209, on the ground of misrepresentation and false data and informations furnished by the defendants, Manuel Dumyung, Fortunate Dumyung and Dumyung Bonayan, respectively. the land embraced in the patents and titles are Identified as Lots 1, 2 and 3 of survey plan Psu-181763 containing a total area of 58.4169 hectares, more or less, and situated in the Municipal District of Mankayan, Sub-province of Benguet, Mountain Province. The Register of Deeds of Baguio City was made a formal party defendant. The complaints in Civil Cases Nos. 1068, 1069 and 1070 are all dated September 22, 196 l. The defendants filed their respective answers.
3 2

The Lepanto Consolidated Mining Company, petitioner herein, filed motions for intervention dated February 5, 1962 in the 4 5 three (3) civil cases which were granted. The complaints in intervention alleged that a portion of the titled lands in question-.ion is within the intervenor's ordinary timber license No. 140-'62 dated July 7, 1961 expiring and up for renewal on June 30, 1962 and another portion of said lands is 6 embraced in its mineral claims. The defendants in the three (3) civil cases filed an amended joint answer with counterclaim to the complaint in 7 8 intervention. The said amended joint answer was admitted in an order dated September 10, 1972. Before the hearing on the merits of the three (3) civil cases, the plaintiff, Republic of the Philippines represented by the Director of Lands, filed in the Court of First Instance of Baguio City three (3) criminal cases for falsification of public document. 9, docketed as Criminal Cases Nos. 2358, 2359 and 2360, against the defendants Manuel Dumyung, Fortunato Dumyung and Dumyung Bonayan, private respondents herein, for allegedly making untrue statements in their applications for free patents over the lands in question. The proceedings on the three (3) civil cases were suspended pending the outcome of the criminal cases. After the presentation of evidence by the prosecution in the three (3) criminal cases, the defense filed a motion to dismiss the same on the ground that the accused had complied with all the legal requirements in the acquisition of their patents which were duly issued by the Director of Lands and that they are not guilty of the alleged falsification of public documents. In an order dated December 6, 1967, the trial court sustained the theory of the defense and dismissed the three (3) criminal 9 cases, with costs de officio, for insufficiency of evidence to sustain the conviction of the three (3) accused. Thereupon, the defendants filed a motion to dismiss dated October 12, 1968 in Civil Cases Nos. 1068, 1069 and 1070 on the following grounds: (1) extinction of the penal action carries with it the extinction of the civil action when the extinction proceeds from a declaration that the fact from which the civil might arise did not exist; (2) the decision of the trial court acquitting the defendants of the crime charged renders these civil cases moot and academic, (3) the trial court has no jurisdiction to order cancellation of the patents issued by the Director of Lands; (4) the certificates of title in question can no 10 longer be assailed; and (5) the intervenor Lepanto has no legal interest in the subject matter in litigation. The Court of First Instance of Baguio, Branch I, dismissed the three (3) civil cases because:

After a careful examination and deliberation of the MOTION TO DISMISS, these civil cases filed by the defendants as well as the two OPPOSITIONS TO MOTION TO DISMISS filed by both plaintiff and intervenor Lepanto Consolidated Mining Company and the of all the three civil cases, it clearly shows that upon the issuance of said Free Patents on November 26, 1960, the same were duly registered with the office of the Register of Deeds of Baguio and Benguet, pursuant to the provisions of Sec. 122 of Act 496, as amended, and consequently, these properties became the private properties of the defendants, under the operation of Sec. 38 of said Act; hence, these titles enjoy the same privileges and safeguards as Torrens titles (Director of Lands vs. Heirs of Ciriaco Carle, G. R. No. L-12485, July 31, 1964). It is therefore clear that OCT Nos. P-208, P-209 and P-210 belonging to the defendants are now indefeasible and this Court has no power to disturb such indefeasibility of said titles, let alone cancel the same. The records of this case further disclose that the defendants are ignorant natives of Benguet Province and are members of the so-called Cultural Minorities of Mountain Province, who are the same persons accused in the dismissed criminal cases, based on the same grounds. It should be noted that these cases fall squarely 11 under Sec. 3 of Rule III of the New Rules of Court. They plaintiff, Republic of the Philippines represented by the Director of Lands, and the intervenor, Lepanto Consolidated Mining Company,, filed separate motions for reconsideration of the order dismissing Civil Cases Nos. 1068, 1069 and 12 13 1070. Both motion for reconsideration were denied by the trial court. Thereupon the intervenor, Lepanto Consolidated Mining Company, filed the instant petition. The petitioner assigns the following errors: I THE LOWER COURT ERRED IN HOLDING THAT THE ORIGINAL CERTIFICATE OF TITLE OF PRIVATE RESPONDENTS WERE 'INDEFEASIBLE' SIMPLY BECAUSE THEY WERE ISSUED PURSUANT TO THE REGISTRATION OF THE FREE PATENTS OF THE PRIVATE RESPONDENTS. II THE LOWER COURT ERRED IN HOLDING THAT THE PRIVATE RESPONDENTS ARE ENTITLED TO THE BENEFITS OF REPUBLIC ACT NO. 3872. III THE LOWER COURT ERRED IN HOLDING THAT THE ACQUITTAL OF THE PRIVATE RESPONDENTS IN THE CRIMINAL CASES FOR FALSIFICATION OF PUBLIC DOCUMENTS BARRED THE CIVIL ACTIONS FOR ANNULMENT OF THE FREE PATENTS AND CANCELLATION OF THE ORIGINAL CERTIFICATES OF TITLE OF 14 THE PRIVATE RESPONDENTS. Timber and mineral lands are not alienable or disposable. The pertinent provisions of the Public Land Act, Commonwealth Act No. 141, provide: Sec. 2. The provisions of this Act shall apply to the lands of the public domain; but timber and mineral lands shag be governed by special laws and nothing in this Act provided shall be understood or construed to change or modify the administration and disposition of the lands commonly called 'friar lands' and those which being privately owned, have reverted to or become the property of the Commonwealth of the Philippines, which administration and disposition shall be governed by the laws at present in force or which may hereafter be enacted. Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Commerce, shall from time to time classify the lands of the public domain into (a) Alienable or disposable,

(b) Timber, and (c) Mineral lands, and may at any time and in a like manner transfer such lands from one class to another, for the purposes of their administration and disposition. The principal factual issue raised by the plaintiff, Republic of the Philippines represented by the Director of Lands, and the intervenor, petitioner herein, is that the lands covered by the patents and certificates of title are timber lands and mineral lands and, therefore, not alienable. Without receiving evidence, the trial court dismissed the three (3) cases on the ground that upon the issuance of the free patents on November 26, 1960, said patents were duly registered in the Office of the Registry of Deeds of Baguio pursuant to Section 122 of Act 496, as amended, and said properties became the private properties of the defendants under the operation of Section 38 of the Land Registration Act. The trial court concluded that these titles enjoy the same privileges and safeguards as the torrens title, and Original Certificates of Title Nos. P-208, P-209 and P-210 of the defendants are now indefeasible. In its order denying the motion for reconsideration the trial court said, On the ground of lack of jurisdiction on the part of the Director of Lands to dispose of the properties since they are within the forest zone, the court finds Republic Act No. 3872, to clear this point. Section 1, amending Section 44 of the Land Act in its second paragraph states: A member of the national cultural, minorities who has continuously occupied and cultivated, either by himself or through his predecessors-in- interest, a tract or tracts ofland, whether disposable or not since July 4, 1955, shall be entitled to the right granted in the preceding paragraph of this section: PROVIDED, that at the time he files his free patent application, he is not the owner of any real property secured or disposable under this provision of the Public Land Law. The 'preceding paragraph' refers to the right of a person to have a free patent issued to him, provided he is qualified, which in this case the Director of Lands has the jurisdiction to dispose, whether the land be disposable or not. This provision of law, certainly, applies to herein defendants. The reason for this law is explicit and could very well be seen from its EXPLANATORY NOTE, which reads: 'Because of the aggresiveness of our more enterprising Christian brothers in Mindanao, Mountain Province, and other places inhabited by members of the National Cultural Minorities, there has be-en an exodus of the poor and less fortunate non-christians from their ancestral homes during the t ten years to the fastnesses of the wilderness where they have settled in peace on portions of agricultural lands, unfortunately, in most cases, within the forest zones. But this is not the end of the tragedy of the national cultural minorities. Because of the grant of pasture leases or permits to the more agressive Christians, these National Cultural Minorities who have settled in the forest zones for the last ten years have been harassed and jailed or threatened with harassment and imprisonment. The thesis behind the additional paragraph to Section 44 of the Public Land Act is to give the national culture, minorities a fair chance to acquire lands of the public domain' ... It is for this reason that is, to give these national cultural minorities who were driven from their ancestral abodes, a fair chance to acquire lands of the public domain that Republic Act 3872 was passed. This is the new government policy on liberation of the free patent provisions of the Public Land Act emphasizing more consideration to and sympathy on the members of the national cultural minorities, which our courts of 15 justice must uphold.

The trial court assumed without any factual basis that the private respondents are entitled to the benefits of Republic Act 3872. The pertinent provision of Republic Act No, 3872 reads: SECTION 1. A new paragraph is hereby added 1--o Section 44 of Commonwealth Act Numbered One Hundred-d forty-one, to read as follows: SEC. 44. Any natural-born citizen of the Philippines who is not the owner of more than twenty-four hectares and who since July fourth, ninth hundred and twenty-six or prior thereto, has continuously occupied and cultivated, either by, himself' or through his predecessors-in-interest. a tract or tracts of agricultural public lands subject to disposition- or who shall have paid the real estate tax thereon while the same has, not been occupied by any person shall be entitled, under the provision of this chapter, to have a free patent issued to him for such tract or tracts of such land not to exceed twenty-four hectares. A member of the national cultural minorities who has continuously occupied and cultivated, either by himself or through his predecessors-in- interest, a tract or tracts of land, whether disposable or not since July 4, 1955, shall be entitled to the right granted in the preceding paragraph of this section: Provided, That at the time he files his free patent application he is not the owner of any real property secured or disposable under this provision of the Public Land Law. There is no evidence that the private respondents are members of the National Cultural Minorities; that they have continously occupied and cultivated either by themselves or through their predecessors-in-interest the lands in question since July 4, 1955; and that they are not the owner of any land secured or disposable under the Public Land Act at the time they filed the free patent applications. These qualifications must be established by evidence. Precisely, the intervenor, petitioner herein, claims that it was in possession of the lands in question when the private respondents applied for free patents thereon. It was premature for the trial court to rule on whether or not the titles based on the patents awarded to the private respondents have become indefeasible. It is well settled that a certificate of title is void when it covers property of public domain classified as forest or timber and mineral lands. Any title issued on non-disposable lots even in the hands of alleged 16 17 innocent purchaser for value, shall be cancelled. In Director of lands vs. Abanzado this Court said: 4. To complete the picture, reference may be made to the learned and scholarly opinion of Justice Sanchez in Director of Forestry v. Muoz, a 1968 decision. After a review of Spanish legislation, he summarized the present state of the law thus: 'If a Spanish title covering forest land is found to be invalid, that land is public forest land, is part of the public domain, and cannot be appropriated. Before private interests have intervened, the government may decide for i what Portions of the public domain shall be set aside and reserved as forest land. Possession of forest lands, however long, cannot ripen into private ownership.' Nor is this all He reiterated the basic state objective on the matter in clear and penetrating language: 'The view this Court takes of the cages at bar is but in adherence to public policy that should be followed with respect to forest lands. many have written much, and many more have spoken, and quite often, above the pressing need for forest preservation, conservation. protection, development and reforestation. Not without justification For, forests constitute a vital segment of any country's natural resources. It is of common knowledge by now that absence of the necessary green cover on our lands produces a number Of adverse or ill effects of serious proportions. Without the trees, watersheds dry up; rivers and lakes which they supply are emptied of their contents. The fish disappears. Denuded areas become dust bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away; geological erosion results. With erosion come the dreaded floods that wreak havoc and destruction to property crops, livestock, houses and highways not to mention precious human lives, ...' The acquittal of the private respondents in the criminal cases for falsification is not a bar to the civil cases to cancel their titles. The only issue in the criminal cases for falsification was whether there was evidence beyond reasonable doubt that the private respondents had committed the acts of falsification alleged in the informations. The factual issues of whether or not the lands in question are timber or mineral lands and whether or not the private respondents are entitled to the benefits of Republic Act No. 3872 were not in issue in the criminal case.

There is need to remand these cases to the trial court for the reception of evidence on (1) whether or not the lands in question are timber and mineral lands; and (2) whether the private respondents belong to the cultural minorities and are qualified under Republic Act 3872 to be issued free patents on said lands. WHEREFORE, the order dismissing Civil Cases Nos. 1968, 1969 and 1970 of the Court of First Instance of Baguio City is hereby set aside and said cases are remanded to the trial court for further proceedings, without pronouncement as to costs. SO ORDERED.

14. ENGRACIA VINZONS-MAGANA, petitioner, vs. HONORABLE CONRADO ESTRELLA IN HIS CAPACITY AS MINISTER OF
AGRARIAN REFORM, SALVADOR PEJO, AS REGIONAL DIRECTOR, MINISTRY OF AGRARIAN REFORM, and JUANA S. VDA. DE PAITAN,respondents. Jose L. Lapak for petitioner.

1.

CONSTITUTIONAL LAW; NATIONAL ECONOMY AND PATRIMONY; LETTER OF INSTRUCTION NO. 474 PURSUANT

TO PRESIDENTIAL DECREE NO. 27; DOES NOT DEPRIVE A PERSON OF PROPERTY WITHOUT DUE PROCESS. The constitutionality of P.D. No. 27 from which Letter of Instructions No. 474 and Memorandum Circular No. 11, Series of 1978 are derived, is now well settled (Chavez v. Zobel, 55 SCRA 26 [1974], Gonzales v. Estrella, 91 SCRA 292 [1979]; Zurbano v. Estrella, 137 SCRA 334, 335 [1985]; Ass. of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 366 [1989]). More specifically, this Court also upheld the validity and constitutionality of Letter of Instructions No. 474 which directed then Secretary of Agrarian Reform Conrado Estrella to "undertake to place under the Land Transfer Program of the government pursuant to Presidential Decree No. 27, all tenanted rice/corn lands with areas of seven hectares or less belonging to landowners who own other agricultural lands of more than seven hectares in aggregate areas or lands used for residential, commercial, industrial or other urban purposes from which they derive adequate income to support themselves and their families". It was held that LOI 474 is neither a class legislation nor does it deprive a person of property without due process of law or just compensation (Zurbano v. Estrella, 137 SCRA 333 [1985]). Moreover, LOI 474 was duly published in the Official Gazette dated November 29, 1976 and has therefore complied with the publication requirement as held by this Court in Taada v. Tuvera (146 SCRA 446 [1986]); Assn. of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform (175 SCRA 369 [1989]). 2. ID.; ID.; COMPREHENSIVE AGRARIAN REFORM PROGRAM; TAKING OF PROPERTY BY VIRTUE THEREOF;

CONSIDERED A VALID EXERCISE OF POLICE POWER. The issue of the constitutionality of the taking of private property under the CARP Law has already been settled by this Court holding that where the measures under challenge merely prescribe the retention limits for landowners, there is an exercise of police power by the government, but where to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the maximum area allowed, then there is definitely a taking under the power of eminent domain for which payment of just compensation is imperative. To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any branch or official of the government (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 373 [1989]). 3. ID.; ID.; ID.; CERTIFICATE OF LAND TRANSFER ISSUED; DOES NOT VEST THE FARMER/GRANTEE OWNERSHIP OF

THE LAND DESCRIBED THEREIN. It must be stressed, however, that the mere issuance of the certificate of land transfer does not vest in the farmer/grantee ownership of the land described therein. At most, the certificate merely evidences the government's recognition of the grantee as the party qualified to avail of the statutory mechanisms for

the acquisition of ownership of the land titled by him as provided under Presidential Decree No. 27. Neither is this recognition permanent nor irrevocable. 4. ID.; ID.; ID.; ID.; CONDITIONS TO ACQUIRE OWNERSHIP. Failure on the part of the farmer/grantee to comply

with his obligation to pay his lease rentals or amortization payments when they fall due for a period of two (2) years to the landowner or agricultural lessor is a ground for forfeiture of his certificate of land transfer (Section 2, P.D. No. 816; Pagtalunan v. Tamayo, G.R. No. 54281, March 9, 1990). This Court has therefore clarified, that it is only compliance with the prescribed conditions which entitles the farmer/grantee to an emancipation patent by which he acquires the vested right of absolute ownership in the landholding a right which has become fixed and established and is no longer open to doubt and controversy. At best the farmer/grantee prior to compliance with these conditions, merely possesses a contingent or expectant right of ownership over the land holding. 5. ID.; ID.; ID.; DETERMINATION OF JUST COMPENSATION; RULE. A reading of Section 16 (d) of the CARP law will

readily show that it does not suffer from arbitrariness which makes it constitutionally objectionable. Although the proceedings are described as summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, such determination of just compensation by the DAR, as earlier stated is by no means final and conclusive upon the landowner or any other interested party for Section 16 (f) clearly provides: "Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation." For obvious reasons, the determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the right to renew with finality the said determination in the exercise of what is admittedly a judicial function (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, supra, pp. 380-382). 6. ADMINISTRATIVE LAW; REGULATIONS AND POLICIES ENACTED BY ADMINISTRATIVE BODIES TO INTERPRET THE

LAW WHICH THEY ARE ENTRUSTED TO ENFORCE; RULE. As to constitutionality of DAR Memo Circular No. 11, it is evident that DAR Memo Circular No. 11 merely implements LOI 474 whose constitutionality has already been established, clarifying for DAR personnel the guidelines set for under said LOI 474 (Rollo, p. 111). Moreover, it is an elementary rule in administrative law that administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law and are entitled to great respect (Rizal Empire Ins. Group and or Corpus, Sergio v. NLRC, et al., G.R. No. 73140, May 29, 1987).

DECISION

PARAS, J p: Petitioner challenges in this petition for prohibition with prayer for restraining order the validity and constitutionality of Letter of Instructions No. 474 and Memorandum Circular No. 11, Series of 1978 enforced by the then Minister and the Regional Director of the Ministry of Agrarian Reform and likewise seeks the cancellation of Certificate of Land Transfer No. 0046145 issued to Domingo Paitan by the deposed President Ferdinand Marcos pursuant to Presidential Decree No. 27. Cdpr The records show that petitioner Magana is the owner of a parcel of riceland situated in the barrio of Talisay, Camarines Norte. The said riceland was tenanted by the late Domingo Paitan, husband of private respondent herein, Juana Vda. de Paitan, under an agricultural leasehold agreement. On October 20, 1977, Magana filed a petition for the termination of the leasehold

agreement allegedly due to (1) non-payment of rentals; (2) inability and failure of Domingo Paitan to do the tilling and cultivation of the riceland due to his long illness; and (3) subleasing of the land holding to third parties (Rollo, p. 2). On June 2, 1978, the former Presiding Judge of the Court of Agrarian Relations, Judge Juan Llaguno, referred the case to the Secretary of the Department of Agrarian Reform for certification as to whether or not it was proper for trial in accordance with Presidential Decree No. 316, (Ibid., pp. 10-11), but said office failed to act upon the request for certification, for a period of more than three (3) years. Instead on July 10, 1980, the riceland was placed under the Land Transfer Program by virtue of Memorandum Circular No. 11, Series of 1978, which implemented Letter of Instructions No. 474, which placed all tenanted ricelands with areas of seven hectares or less belonging to landowners who own agricultural lands of more than seven hectares in aggregate areas under the Land Transfer Program of the government. The prescribed procedures therein were subsequently undertaken and thereafter, on July 10, 1980, a certificate of Land Transfer was finally awarded in favor of Domingo Paitan. As a consequence thereof, the rentals were no longer paid to Magana but were deposited instead with the Land Bank and credited as amortization payments for the riceland. Apparently aggrieved by this turn of events, Magana took the present recourse. As earlier mentioned, the Court is now asked to resolve the constitutionality of Memorandum Circular No. 11, Series of 1978, and Letter of Instructions No. 474. The petition is devoid of merit. The constitutionality of P.D. No. 27 from which Letter of Instructions No. 474 and Memorandum Circular No. 11, Series of 1978 are derived, is now well settled (Chavez v. Zobel, 55 SCRA 26 [1974], Gonzales v. Estrella, 91 SCRA 292 [1979]; Zurbano v. Estrella, 137 SCRA 334, 335 [1985]; Ass. of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 366 [1989]). More specifically, this Court also upheld the validity and constitutionality of Letter of Instructions No. 474 which directed then Secretary of Agrarian Reform Conrado Estrella to "undertake to place under the Land Transfer Program of the government pursuant to Presidential Decree No. 27, all tenanted rice/corn lands with areas of seven hectares or less belonging to landowners who own other agricultural lands of more than seven hectares in aggregate areas or lands used for residential, commercial, industrial or other urban purposes from which they derive adequate income to support themselves and their families". It was held that LOI 474 is neither a class legislation nor does it deprive a person of property without due process of law or just compensation (Zurbano v. Estrella, 137 SCRA 333 [1985]). Moreover, LOI 474 was duly published in the Official Gazette dated November 29, 1976 and has therefore complied with the publication requirement as held by this Court in Taada v. Tuvera (146 SCRA 446 [1986]); Assn. of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform (175 SCRA 369 [1989]). As to the constitutionality of DAR Memo Circular No. 11, it is evident that DAR Memo Circular No. 11 merely implements LOI 474 whose constitutionality has already been established, clarifying for DAR personnel the guidelines set for under said LOI 474 (Rollo, p. 111). Moreover, it is an elementary rule in administrative law that administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law and are entitled to great respect (Rizal Empire Ins. Group and or Corpus, Sergio v. NLRC, et al., G.R. No. 73140, May 29, 1987). The main thrust of this petition is that the issuance of Certificate of Land Transfer to Domingo Paitan without first expropriating said property to pay petitioner landowner the full market value thereof before ceding and transferring the land to Paitan and or heirs, is invalid and unconstitutional as it is confiscatory and violates the due process clause of the Constitution (Rollo, p. 4).

The issue of the constitutionality of the taking of private property under the CARP Law has already been settled by this Court holding that where the measures under challenge merely prescribe the retention limits for landowners, there is an exercise of police power by the government, but where to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the maximum area allowed, then there is definitely a taking under the power of eminent domain for which payment of just compensation is imperative. To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any branch or official of the government (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175 SCRA 373 [1989]). It must be stressed, however, that the mere issuance of the certificate of land transfer does not vest in the farmer/grantee ownership of the land described therein. At most, the certificate merely evidences the government's recognition of the grantee as the party qualified to avail of the statutory mechanisms for the acquisition of ownership of the land titled by him as provided under Presidential Decree No. 27. Neither is this recognition permanent nor irrevocable. Thus, failure on the part of the farmer/grantee to comply with his obligation to pay his lease rentals or amortization payments when they fall due for a period of two (2) years to the landowner or agricultural lessor is a ground for forfeiture of his certificate of land transfer (Section 2, P.D. No. 816; Pagtalunan v. Tamayo, G.R. No. 54281, March 9, 1990). This Court has therefore clarified, that it is only compliance with the prescribed conditions which entitles the farmer/grantee to an emancipation patent by which he acquires the vested right of absolute ownership in the landholding a right which has become fixed and established and is no longer open to doubt and controversy. At best the farmer/grantee prior to compliance with these conditions, merely possesses a contingent or expectant right of ownership over the land holding (Ibid.). Under the foregoing principles, a reading of Section 16 (d) of the CARP law will readily show that it does not suffer from arbitrariness which makes it constitutionally objectionable. Although the proceedings are described as summary, the landowner and other interested parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, such determination of just compensation by the DAR, as earlier stated is by no means final and conclusive upon the landowner or any other interested party for Section 16 (f) clearly provides: "Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation." For obvious reasons, the determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will still have the right to renew with finality the said determination in the exercise of what is admittedly a judicial function (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, supra, pp. 380-382). Indeed, the delay in the preparation of the proper certification by the MAR field office to the Court of Agrarian Relations as to whether or not the case was proper for trial, is unfortunate and the officer concerned is under investigation (Rollo, pp. 4142). It will, however, be observed that from the outset under P.D. No. 27, the tenant-farmer as of October 21, 1972 has already been deemed in a certain sense, to be the owner of a portion of land, subject of course, to certain conditions (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, supra p. 390). In fact, it appears that petitioner Magana was not unaware that the land in question previous to the filing of the CAR case on October 20, 1977, had already been identified as subject of land transfer. It also appears that on September 20, 1976 Paitan had already been identified to be cultivating the land to rice as tenant of petitioner and that his land holding was the subject of land tenure survey and was found to be proper for OLT coverage under Presidential Decree No. 27 (Rollo, pp. 41-42). In any event, as already discussed, the proceedings herein are merely preliminary and petitioner Magana is not without protection. Should she fail to agree on the price of her land as fixed by the DAR, she can bring the matter to the court of proper

jurisdiction. Likewise, failure on the part of the farmer/grantee to pay his lease rentals or amortization payments for a period of two (2) years is a ground for forfeiture of his certificate of land transfer. PREMISES CONSIDERED, the petition is DISMISSED without prejudice to petitioner's filing of the proper action for the determination of just compensation in the proper forum. SO ORDERED.

15. LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, respondent
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry business and together with others in the same business allegedly stands to be adversely affected by the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law. It, however, argued that Congress in enacting the said law has transcended the mandate of the Constitution, in including land devoted to the raising of livestock, poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree farming. Land is not the primary resource in this undertaking and represents no more than five percent (5%) of the total investment of commercial livestock and poultry raisers. Indeed, there are many owners of residential lands all over the country who use available space in their residence for commercial livestock and raising purposes, under "contract-growing arrangements," whereby processing corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands support the buildings and other amenities attendant to the raising of animals and birds. The use of land is incidental to but not the principal factor or consideration in productivity in this industry. Including backyard raisers, about 80% of those in commercial livestock and poultry production occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11). On the other hand, the public respondent argued that livestock and poultry raising is embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b) of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition (1954), defines the following words: "Agriculture the art or science of cultivating the ground and raising and harvesting crops, often, including also, feeding, breeding and management of livestock, tillage, husbandry, farming. It includes farming, horticulture, forestry, dairying, sugarmaking . . . Livestock domestic animals used or raised on a farm, especially for profit. Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp. 82-83). Hence, this petition praying that aforesaid laws, guidelines and rules be declared unconstitutional.

ISSUE: W/N Sections 3(b), 11, 13 and 32 of R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith Unconstitutional.

HELD:

It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage of agrarian reform. (Rollo, p. 21). Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute and implement "production-sharing plans" (pending final redistribution of their landholdings) whereby they are called upon to distribute from three percent (3%) of their gross sales and ten percent (10%) of their net profits to their workers as additional compensation is unreasonable for being confiscatory, and therefore violative of due process (Rollo, p. 21). It has been established that this Court will assume jurisdiction over a constitutional question only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343). However, despite the inhibitions pressing upon the Court when confronted with constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be the Constitution and God as its conscience gives it in the light to probe its meaning and discover its purpose. Personal motives and political considerations are irrelevancies that cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all the awesome power of the Congress and Executive, the Court will not hesitate "to make the hammer fall heavily," where the acts of these departments, or of any official, betray the people's will as expressed in the Constitution (Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777, 14 July 1989). Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary to declare what the other branches of the government had assumed to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n one Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as part of the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]). PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and Guidelines promulgated in accordance therewith, are hereby DECLARED null and void for being unconstitutional and the writ of preliminary injunction issued is hereby MADE permanent.

17. The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay and
his wife and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27. The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia ofseparation of powers, due process, equal protection and the constitutional limitation that no private property shall be taken for public use without just compensation. They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to provide for retention limits for small landowners. Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a valid appropriation. Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner is willing to sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the parties. It is only where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner. Private rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in the case of the police power, that the welfare of the people is the supreme law. ISSUE: Whether or not there was a violation of the equal protection clause. HELD: The SC ruled affirming the Sol-Gen. The argument of the small farmers that they have been denied equal protection because of the absence of retention limits has also become academic under Sec 6 of RA 6657. Significantly, they too have not questioned the area of such limits. There is also the complaint that they should not be made to share the burden of agrarian reform, an objection also made by the sugar planters on the ground that they belong to a particular class with particular interests of their own. However, no evidence has been submitted to the Court that the requisites of a valid classification have been violated. Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each other in these same particulars. To be valid, it must conform to the following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all the members of the class. The Court finds that all these requisites have been met by the measures here challenged as arbitrary and discriminatory. Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and the liabilities imposed. The petitioners have not shown that they belong to a different class and entitled to a different treatment. The argument that not only landowners but also owners of other properties must be made to share the burden of implementing land reform must be rejected. There is a substantial distinction between these two classes of owners that is clearly visible except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of Rights.

18. G.R. No. 98332

January 16, 1995

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. FACTS: Pursuant to Section 6 of Executive Order No. 279, authorizing the DENR Secretary to negotiate and conclude joint venture, coproduction, or production-sharing agreements for the exploration, development and utilization of mineral resources, and prescribing the guidelines for such agreements and those agreements involving technical or financial assistance by foreignowned corporations for large-scale exploration, development, and utilization of minerals, the DENR Secretary issued DENR Administrative Order No. 57, series of 1989, entitled "Guidelines on Mineral Production Sharing Agreement under Executive Order No. 279." Under the transitory provision of said DENR Administrative Order No. 57, embodied in its Article 9, all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. 211, except small scale mining leases and those pertaining to sand and gravel and quarry resources covering an area of twenty (20) hectares or less, shall be converted into production-sharing agreements within one (1) year from the effectivity of these guidelines. The Secretary of the DENR then further issued DENR Administrative Order No. 82, series of 1990, laying down the "Procedural Guidelines on the Award of Mineral Production Sharing Agreement (MPSA) through Negotiation." The issuance and the impending implementation by the DENR of Administrative Order Nos. 57 and 82 after their respective effectivity dates compelled the Miners Association of the Philippines, Inc. to file the instant petition assailing their validity and constitutionality before this Court. Petitioner Miners Association of the Philippines, Inc., mainly contends that the administrative orders do not conform with Executive Order Nos. 211 and 279, petitioner contends that both orders violate the non-impairment of contract provision under Article III, Section 10 of the 1987 Constitution on the ground that Administrative Order No. 57 unduly pre-terminates existing mining leases and other mining agreements and automatically converts them into production-sharing agreements within one (1) year from its effectivity date. On the other hand, Administrative Order No. 82 declares that failure to submit Letters of Intent and Mineral Production-Sharing Agreements within two (2) years from the date of effectivity of said guideline or on July 17, 1991 shall cause the abandonment of their mining, quarry and sand gravel permits. Petitioner argued that Executive Order No. 279 does not contemplate automatic conversion of mining lease agreements into mining production-sharing agreement as provided under Article 9, Administrative Order No. 57 and/or the consequent abandonment of mining claims for failure to submit LOIs and MPSAs under Section 3, Administrative Order No. 82 because Section 1 of said Executive Order No. 279 empowers the DENR Secretary to negotiate and enter into voluntary agreements which must set forth the minimum terms and conditions provided under Section 2 thereof. Moreover, petitioner contends that the power to regulate and enter into mining agreements does not include the power to preterminate existing mining lease agreements. ISSUE: Whether or not DENR Administrative Order Nos. 57 and 82 issued by the DENR Secretary are unconstitutional. HELD: NO. DENR Administrative Order Nos. 57 and 82 are not unconstitutional. The questioned administrative orders are reasonably directed to the accomplishment of the purposes of the law under which they were issued and were intended to secure the paramount interest of the public, their economic growth and welfare. The validity and constitutionality of Administrative Order Nos. 57 and 82 must be sustained, and their force and effect upheld.

Administrative Order No. 57 applies only to all existing mining leases or agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. 211. It bears mention that under the text of Executive Order No. 211, 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 effectivity of the 1987 Constitution, pursuant to Executive Order No. 211, shall be subject to any and all modifications or alterations which Congress may adopt pursuant to Article XII, Section 2 of the 1987 Constitution. Hence, the strictures of the non-impairment of contract clause under Article III, Section 10 of the 1987 Constitution do not apply to the aforesaid mining leases or agreements granted after the effectivity of the 1987 Constitution, pursuant to Executive Order No. 211. They can be amended, modified or altered by a statute passed by Congress to achieve the purposes of Article XII, Section 2 of the 1987 Constitution. Moreover, nowhere in Administrative Order No. 57 is there any provision which would lead us to conclude that the questioned order authorizes the automatic conversion of mining leases and agreements granted after the effectivity of the 1987 Constitution, pursuant to Executive Order No. 211, to production-sharing agreements. The provision in Article 9 of Administrative Order No. 57 that "all such leases or agreements shall be converted into production sharing agreements within one (1) year from the effectivity of these guidelines" could not possibly contemplate a unilateral declaration on the part of the Government that all existing mining leases and agreements are automatically converted into production-sharing agreements. On the contrary, the use of the term "production-sharing agreement" in the same provision implies negotiation between the Government and the applicants, if they are so minded. Negotiation negates compulsion or automatic conversion as suggested by petitioner in the instant petition. A mineral production-sharing agreement (MPSA) requires a meeting of the minds of the parties after negotiations arrived at in good faith and in accordance with the procedure laid down in the subsequent Administrative Order No. 82.

19. PEOPLE VS ROSEMOOR

G.R. No. 149927 March 30, 2004 Ponente: Panganiban

FACTS: Rosemoor Mining And Development Corporation Corporation (Rosemoor), after having been granted permission to prospect for marble deposits in the mountains of Biak-na-Bato, Bulacan, succeeded in discovering marble deposits of high quality and in commercial quantities. They applied with the Bureau of Mines (now Mines and Geosciences Bureau), for the issuance of the corresponding license to exploit said marble deposits, which was issued to them, giving them the right to quarry 330 hectares of land. After Ernesto Maceda was appointed Minister of DENR, he cancelled Rosemoors license. Rosemoor filed for injunctive relief from the RTC, which ruled in their favor. The RTC said that Rosewoods respondents license had already ripened into a property right, which was protected under the due process clause, and such right was supposedly violated when the license was unjustifiably cancelled without notice and hearing. Petitioners aver that the license contravenes PD 463 because it exceeds the maximum area that may be granted to a Licensee for quarrying (100 hectares), which renders the license void. The CA sustained the RTC decision because the license was embraced by four (4) separate applications, and that the 100 hectare limitation was superseded by RA 7942. The CA also said that Proclamation 84, which confirmed the cancellation of the license, impaired the non-impairment clause of contracts, a bill of attainder and an ex post facto law.

ISSUE: W/N Rosemoors license was validly cancelled. YES.

RATIO:

Validity of License PD 463, as amended, pertained to the old system of exploration, development and utilization of natural resources through licenses, concessions or leases, but was omitted in the 1987 Constitution as it was deemed violative of its provisions. This was replaced by RA 7942 or the Philippine Mining Act of 1995 repealed or amended all laws, executive orders, presidential decrees, rules and regulations -- or parts thereof -- that are inconsistent with it. While RA 7942 has expressly repealed provisions of mining laws that are inconsistent with its own, it nonetheless respects previously issued valid and existing licenses. In this case, the terms of Rosemoors license was subject to PD 463, the exist ing law when it was granted. And under such law, it is clear that a license should only cover 100 hectares without exceptions or consideration to the number of applications. The intent of the law would be brazenly circumvented by ruling that a license may cover an area exceeding the maximum by the mere expediency of filing several applications. Such ruling would indirectly permit an act that is directly prohibited by the law.

Validity of Proclamation No. 84 Rosemoors 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. This condition to the license was acknowledged by Rosemoor in its permit. Moreover, granting that Rosemoor license is valid, it can still be validly revoked b y the State in the exercise of police power. The exercise of such power through Proclamation No. 84 is clearly in accord with the regalia doctrine which reserves to the State ownership of all natural resources. Proclamation 84 does not impair the non-impairment clause because the license is not a contract. Even if the license were, it is settled that provisions of existing laws and a reservation of police power are deemed read into it, because it concerns a subject impressed with public welfare. PN 84 is also not a bill of attainder because the declaration that the license was void is not a punishment. It is also not an ex post facto law because the proclamation does not fall under any of the enumerated categories of an ex post facto law. And an ex post facto law is limited in its scope only to matters criminal in nature.

20. LA BUGAL BLAAN TRIBAL ASSOCIATION INC., ET AL. V. RAMOS

G.R. No. 127882 27 January 2004 Ponente: Carpio-Morales

FACTS: On July 25, 1987, then President Corazon C. Aquino issued Executive Order (E.O.) No. 279 authorizing the DENR Secretary to accept, consider and evaluate proposals from foreign-owned corporations or foreign investors for contracts or 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. On March 3, 1995, then President Fidel V. Ramos approved R.A. No. 7942 to "govern the exploration, development, utilization and processing of all mineral resources." R.A. No. 7942 defines the modes of mineral agreements for mining operations, outlines the procedure for their filing and approval, assignment/transfer and withdrawal, and fixes their terms. Similar provisions govern financial or technical assistance agreements. On April 9, 1995, 30 days following its publication on March 10, 1995 in Malaya and Manila Times, two newspapers of general circulation, R.A. No. 7942 took effect. Shortly before the effectivity of R.A. No. 7942, however, or on March 30, 1995, the President entered into an FTAA with WMCP covering 99,387 hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato. On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order (DAO) No. 95-23, s. 1995, otherwise known as the Implementing Rules and Regulations of R.A. No. 7942. This was later repealed by DAO No. 96-40, s. 1996 which was adopted on December 20, 1996.

On January 10, 1997, counsels for petitioners sent a letter to the DENR Secretary demanding that the DENR stop the implementation of R.A. No. 7942 and DAO No. 96-40, giving the DENR fifteen days from receipt to act thereon. The DENR, however, has yet to respond or act on petitioners' letter. Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction. They pray that the Court issue an order: (a) Permanently enjoining respondents from acting on any application for Financial or Technical Assistance Agreements; (b) Declaring the Philippine Mining Act of 1995 or Republic Act No. 7942 as unconstitutional and null and void; (c) Declaring the Implementing Rules and Regulations of the Philippine Mining Act contained in DENR Administrative Order No. 96-40 and all other similar administrative issuances as unconstitutional and null and void; and (d) Cancelling the Financial and Technical Assistance Agreement issued to Western Mining Philippines, Inc. as unconstitutional, illegal and null and void. In January 2001, MMC a publicly listed Australian mining and exploration company sold its whole stake in WMCP to Sagittarius Mines, 60% of which is owned by Filipinos while 40% of which is owned by Indophil Resources, an Australian company. DENR approved the transfer and registration of the FTAA in Sagittarius name but Lepanto Consolidated assailed the same. WMCP contends that the annulment of the FTAA would violate a treaty between the Philippines and Australia which provides for the protection of Australian investments. ISSUE: W/N the Philippine Mining Act is unconstitutional for allowing fully foreign-owned corporations to exploit Philippine mineral resources. YES.

RATIO: RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully foreign owned corporations to exploit Philippine natural resources. Article XII Section 2 of the 1987 Constitution retained the Regalian doctrine which states that All lands of the public domain, waters, minerals, coal, petroleum, and other minerals, coal, petroleum, and other miner al oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. The same section also states that, exploration and development and utilization of natural resources shall be under the full control and supervision of the State. Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitutions authorizing the State to grant licenses, concessions, or leases for the exploration, exploitation, development or utilization of natural resources. Y such omission, the utilization of inalienable lands of public domain through license, concession or lease is no longer allowed under the 1987 Constitution.

Under the concession system, the concessionaire makes a direct equity investment for the purpose of exploiting a particular natural resource within a given area. The concession amounts to complete control by the concessionaire over the countrys natural resource, for it is given exclusive and plenary rights to exploit a particular resource at the point of extraction. The 1987 Constitution, moreover, has deleted the phrase management or other forms of assistance in the 1973 Charter. The present Constitution now allows only technical and financial assistance. The management or operation of mining activities by foreign contractors, the primary feature of service contracts was precisely the evil the drafters of the 1987 Constitution sought to avoid. The constitutional provision allowing the President to enter into FTAAs is an exception to the rule that participation in the nations natural resources is reserved exclusively to Filipinos. Accordingly such provision must be construed strictly against their enjoyment by non-Filipinos. Therefore RA 7942 is invalid insofar as said act authorizes service contracts. Although the statute employs the phrase financial and technical agreements in accordance with the 1987 Constitution, its pertinent provisions actually treat these agreements as service contracts that grant beneficial ownership to foreign contractors contrary to the fundamental law.

The underlying assumption in the provisions of the law is that the foreign contractor manages the mineral resources just like the foreign contractor in a service contract. By allowing foreign contractors to manage or operate all the aspects of the mining operation, RA 7942 has in effect conveyed beneficial ownership over the nations mineral resources to these contractors, leaving the State with nothing but bare title thereto. The same provisions, whether by design or inadvertence, permit a circumvention of the constitutionally ordained 60-40% capitalization requirement for corporations or associations engaged in the exploitation, development and utilization of Philippine natural resources. When parts of a statute are so mutually dependent and connected as conditions, considerations, inducements or compensations for each other as to warrant a belief that the legislature intended them as a whole, then if some parts are unconstitutional, all provisions that are thus dependent, conditional or connected must fall with them. Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited only to merely technical or financial assistance to the State for large scale exploration, development and utilization of minerals, petroleum and other mineral oils.

ISSUE: W/N the FTAA between WMCP and the Pgilippines is a service contract. YES.

The FTAA between WMCP and the Philippine government is likewise unconstitutional since the agreement itself is a device contract. Section 1.3 of the FTAA grants WMCP, a fully foreign owned corporation, the exclusive right to explore, exploit, utilize and dispose of all minerals and by-products that may be produced from the contract area. Section 1.2 of the same agreement provides that WMCP shall provide all financing, technology, management, and personnel necessary for the Mining Operations. These contractual stipulations and related provisions in the FTAA taken together, grant WMCP beneficial ownership over natural resources that properly belong to the State and are intended for the benefit of its citizens. These stipulations are abhorrent to the 1987 Constitution. They are precisely the vices that the fundamental law seeks to avoid, the evils that it aims to suppress. Consequently, the contract from which they spring must be struck down.

20.b LA BUGAL BLAAN TRIBAL ASSOCIATION INC., ET AL. V. RAMOS

G.R. No. 127882. December 1, 2004 Ponente: Panganiban FACTS: In the January Decision, the Court en banc promulgated its Decision, granting the Petition and declaring the unconstitutionality of certain provisions of RA 7942 (Philippine Mining Act), DENR AO 96-40, as well as of the entire FTAA executed between the government and Western Mining Corp. Philippines, an Australian corporation. (WMCP). The Court said RA 7942 or the Philippine Mining Act of 1995 and its implementing rules are unconstitutional for allowing service contracts now prohibited by the 1987 Charter. The Court said FTAA is a service contract that grants control or beneficial ownership over the nations mineral resources to foreign contractors, leaving the State with nothing but bare title thereto. It was also on this ground that the Court struck down as constitutionally infirm the FTAA between the government and WMCP.

ISSUE: Whether or not the phrase Agreements Involving Either Technical or Financial Assistance contained in paragraph 4 of Section 2 of Article XII of the Constitution was properly interpreted in the previous decision to warrant the unconstitutionality of RA 7942 and the FTAA of WMCP. YES.

RATIO: The Proper Interpretation of the Constitutional Phrase Agreements Involving Either Technical or Financial Assistance Section 2 Article XII does not reveal any intention to proscribe foreign involvement in the management or operation of mining activities or to eliminate service contracts, nor does it have express prohibition to this effect. Had the framers intended to prohibit direct participation of an alien corporation in the exploration of the countrys natural resources, they would employed clearly restrictive language barring foreign corporation from directly engaging in the exploration of the countrys natural resources. Foreign corporations may indeed participate in the exploitation, development and use of Philippine natural resources but subject to the full control and supervision of the State. RA 7942, its implementing rules (DAO 96-40) and the FTAA entered into by then Government and WMCP grant the Government full control and supervision over all aspects of planned exploration, development and utilization activities. Sections 7.8 and 7.9 of the FTAA however are objectionable and void for being contrary to public policy. Section 7.8 permits the sum spent by government for the benefit of the contractor to be deductible from the States share in the net mining revenues since it constitutes unjust enrichment on the part of the contractor at the governments expense. Section 7.9, meanwhile, deprives the Government of its share in the net mining revenues in the event the foreign stockholders of a foreign mining company sell 60% or more of their equity to a Filipino citizen or corporation. Thus, with the exception of Sections 7.8 and 7.9 of the subject FTAA, the FTAA, RA 7942 and DAO 96-40 are declared constitutional.

The Meaning of Agreements Involving Either Technical or Financial Assistance A constitutional provision specifically allowing foreign-owned corporation to render financial or technical assistance in respect of mining or any other commercial activity was clearly unnecessary; the provision meant to refer to more than mere financial or technical assistance. The framers of the Constitution, during its deliberation regarding foreign investment in and management of an enterprise for large-scale exploration, development and utilization of minerals spoke about service contracts as the concept was understood in the 1973 Constitution. It is obvious from their discussions that they did not intend to ban or eradicate service contracts. Instead, they were intent on crafting provisions to put in place safeguards that would eliminate the abuses prevalent during the martial law regime. They were going to permit service contracts with foreign corporations as contractors but with safety measures to prevent abuses as an exception to the general norm established in the first paragraph of Section2 of Article XII, which reserves or limits to Filipino citizens and corporations that are at least 60 percent owned by such citizens the exploration, development and utilization of mineral or petroleum resources. This was prompted by the perceived insufficiency of Filipino capital and the felt need for foreign expertise in the EDU of mineral resources. The drafters, by specifying such agreements involving assistance, necessarily gave implied assent to everything that these agreements entailed or that could reasonably be deemed necessary to make them tenable and effective including management authority with respect to the day-to-day operations of the enterprise, and measures for the protection of the interests of the foreign corporation, at least to the extent that they are consistent with Philippine sovereignty over natural resources, the constitutional requirement of State control, and beneficial ownership of natural resources remains vested in the State. It is clear that agreements involving either technical or financial assistance referred to in paragraph 4 are in fact service contracts, but such new service contracts are between foreign corporations acting as contractors on the one hand, and on the other hand government as principal or owner )of the works), whereby the foreign contractor provides the capital, technology and technical know-how, and managerial expertise in the creation and operation of the large-scale mining/extractive

enterprise, and government through its agencies (DENR, MGB) actively exercises full control and supervision over the entire enterprise. Such service contracts may be entered into only with respect to mineral oils. The grant of such service is subject to several safeguards, among them: (1) that the service contract be crafted in accordance with a general law setting standard or uniform terms, conditions and requirements; (2) the President be the signatory for the government; and (3) the President report the executed agreement to Congress within thirty days.

Ultimate Test: Full State Control The primacy of the principle of the States sovereign ownership of all mineral resources, and its full control and supervi sion over all aspects of exploration, development and utilization of natural resources must be upheld. But full control and supervision cannot be taken literally to mean that the State controls and supervises everything down to the minutest details, and makes all required actions, as this would render impossible the legitimate exercise by the contractor of a reasonable degree of management prerogative and authority, indispensable to the proper functioning of the mining enterprise. Also, the government need not micro-manage the mining operations and day-to-day affairs of the enterprise in order to be considered as exercising full control and supervision. The States full control and supervision over mining operations are ensured through the different provisions in RA 7942. The government agencies concerned are empowered to approve or disapprove the various work programs and corresponding minimum expenditure commitments for each of the exploration, development and utilization phases of the enterprise. Once they have been approved, the contractors compliance with its commitments therein will be monitored. The contractor is also mandated to open its books of accounts and records for scrutiny, to enable the State to determine if the government share has been fully paid. The State may likewise compel compliance by the contractor with mandatory requirements on mine safety, health and environmental protection, and the use of anti-pollution technology and facilities. The contractor is also obligated to assist the development of the mining community, and pay royalties to the indigenous peoples concerned. And violation of any of FTAAs terms and conditions, and/or noncompliance with statutes or regulations, may be penalized by cancellation of the FTAA. Such sanction is significant to a contractor who may have yet to recover the tens or hundreds of millions of dollars sunk into a mining project. Overall, the State definitely has a pivotal say in the operation of the individual enterprises, and can set directions and objectives, detect deviations and non-compliance by the contractor; and enforce compliance and impose sanctions should the occasion arise. Hence, RA 7942 and DAO 96-40 vest in government more than a sufficient degree of control and supervision over the conduct of mining operations. Section 3(aq) of RA 7942 was objected to as being unconstitutional for allowing a foreign contractor to apply for and hold an exploration permit. During the exploration phase, the permit grantee (and prospective contractor) is spending and investing heavily in exploration activities without yet being able to extract minerals and generate revenues. The exploration permit issued under Section 3 (aq), 20 and 23 of RA7942, which allows exploration but not extraction, serves to protect the interests and rights of the exploration permit grantee (and would-be contractor), foreign or local. Otherwise, the exploration works already conducted, and expenditures already made, may end up only benefiting claim-jumpers. Thus, Section 3 (aq) of RA 7942 is not unconstitutional. The provisions of the WMCP FTAA, far from constituting a surrender of control and a grant of beneficial ownership of mineral resources to the contractor in question, vest the State with control and supervision over practically all aspects of the operations of the FTAA contractor, including the charging of pre-operating and operating expenses, and the disposition of mineral products. There is likewise no relinquishment of control on account of specific provisions of the WMCP FTAA.

The FTAA provisions do not reduce or abdicate State control: No Surrender of Financial Benefits

The second paragraph of Section 81 of RA7942 has been denounced for allegedly limiting the States share in FTAAs with foreign contractors to just taxes, fees, and duties, and depriving the State of a share in the after-tax income of the enterprise. However, the inclusion of the phrase among other things in the second paragraph of Section81 clearly and unmistakably reveals the legislative intent to have the State collect more than just usual taxes, duties and fees. Thus, DAO 99-56, the Guidelines Establishing the Fiscal Regime of Financial or Technical Assistance Agreements spells out the financial benefits government will receive from an FTAA, as consisting of not only a basic government share, comprised of all direct taxes, fees and royalties, as well as other payments made by the contractor during the term of the FTAA, but also an additional government share, being a share in the earnings or cash flows of the mining enterprise, so as to achieve a fifty-fifty sharing of net benefits from mining between the government and the contractor. The basic government share and the additional government share do not yet take into account the indirect taxes and other financial contributions of mining projects, which are real and actual benefits enjoyed by the Filipino people; if these are taken into account, total government share increases to 60 percent or higher (as much as 77 percent, and 89 percent in one instance) of the net present value of total benefits from the project. The third or last paragraph of Section 81 of RA7942 is slammed for deferring the payment of the government share in FTAAs until after the contractor shall have recovered its pre-operating expenses, exploration and development expenditures. Allegedly, the collection of the States share is rendered uncertain, as there is no time limit in RA 7942 for this grace per iod or recovery period. But although RA7942 did not limit the grace period, the concerned agencies (DENR and MGB) in formulating the 1995 and 1996 Implementing Rules and Regulation provided that the period of recovery, reckoned from the date of commercial operation, shall be for a period not exceeding five years, or until the date of actual recovery, whichever comes earlier. Since RA 7942 allegedly does not require government approval for the pre-operating, exploration and development expenses of the foreign contractors, it is feared that such expenses could be bloated to wipe out mining revenues anticipated for 10 years, with the result that the States share is zero for the first 10 years. The argument is based on incorrect information. Under Section 23 of RA 7942, the applicant for exploration permit is required to submit a proposed work program for exploration, containing a yearly budget of proposed expenditures, which the State passes upon and either approves or rejects; if approved, the same will subsequently be recorded as pre-operating expenses that the contractor will have to recoup over the grace period. The Government is able to know ahead of time the amounts of pre-operating and other expenses to be recovered, and the approximate period of time needed therefore because under Section 24, when an exploration permittee files with the MGB a declaration of mining project feasibility, it must submit a work program for development, with corresponding budget, for approval by the Bureau, before government may grant an FTAA or MPSA or other mineral agreements. The government has the opportunity to approve or reject the proposed work program and budgeted expenditures for development works, which will become the pre-operating and development costs that will have to be recovered. Moreover, there is no concrete basis for the view that, in FTAAs with a foreign contractor, the State must receive at least 60 percent of the after-tax income from the exploitation of its mineral resources, and that such share is the equivalent of the constitutional requirement that at least 60 percent of the capital, and hence 60 percent of the income, of mining companies should remain in Filipino hands. Even if the State is entitled to a 60 percent share from other mineral agreements (CPA, JVA and MPSA), that would not create a parallel or analogous situation for FTAAs. . The Charter did not intend to fix an iron-clad rule of 60 percent share, applicable to all situations, regardless of circumstances. The terms and conditions of petroleum FTAAs cannot serve as standards for mineral mining FTAAs, because the technical and operational requirements, cost structures and investment needs of off-shore petroleum exploration and drilling companies do not have the remotest resemblance to those of on-shore mining companies. To avoid compromising the States full control and supervision over the exploitation of mineral resources, there must be no attempt to impose a minimum 60 percent rule. It is sufficient that the State has the power and means, should it so decide, to get a 60 percent share (or greater); and it is not necessary that the State does so in every case.

21. NUCLEAR FREE PHILIPPINE COALITION, ET AL., petitioners, vs. NATIONAL POWER CORPORATION, ET AL., respondents.
G.R. No. L-68474 | 1986-02-11 I. In G.R. No. 70632, (1) petitioners question the competence of respondent PAEC Commissioners to pass judgment on thesafety of the Philippine Nuclear Power Plant-1 (PNPP-1) in PAEC Licensing Proceedings No. 1-77 without however seeking their ouster from office, although "proven competence" is one of the qualifications prescribed by law for PAEC Commissioners. (2) Petitioners also assail the validity of the motion (application) filed by the National Power Corporation (NPC) for the conversion of its construction permit into an operating license for PNPP-1 on the principal ground that it contained no information regarding the financial qualifications of NPC, its source of nuclear fuel, and insurance coverage for nuclear damage. (3) Petitioners finally charge respondent PAEC Commissioners with bias and prejudgment. 1. The first issue must be resolved against the petitioners. Where the validity of an appointment is not challenged in an appropriate proceeding, the question of competence is not within the field of judicial inquiry. If not considered a qualification the absence of which would vitiate the appointment, competence is a matter of judgment that is addressed solely to the appointing power. 2. As regards the legal sufficiency of the NPC motion for conversion, petitioners contend that the deficiencies they have indicated are jurisdictional infirmities which cannot be cured. The Court believes however that said deficiencies may be remedied and supplied in the course of the hearing before PAEC. For this purpose, respondent-applicant NPC may submit pertinent testimonies and documents when the PAEC hearing is re-opened, subject to controversion and counter-proof of herein petitioners. 3. There is merit in the charge of bias and prejudgment. The PAEC pamphlets ----particularly Annexes "JJ", "KK" and "LL" of the petition (G.R. 70632) ---- clearly indicate the prejudgment that PNPP-1 is safe. Exhibit "JJ" is an official PAEC 1985 pamphlet entitled "The Philippine Nuclear Power Plant-1." It gives an overview specifically of PNPP-1, lauds the safety of nuclear power, and concludes with a statement of the benefits to be derived when the PNPP-1 starts operation. ". . . When the PNPP-1 starts operating, it will generate a power of 620 megawatts enough to supply 15 percent of theelectricity needs in Luzon. This is estimated to result in savings of US$160 million a year, representing the amount of oil displaced. "Aside from being a reliable source of electricity, nuclear power has an excellect safety record and has been found to result in lower occupational and public risks than fossil-fired (coal or oil) stations." (p. 6.) The second pamphlet (Exh. "KK") is entitled "NUCLEAR POWER ---- SAFE CLEAN ECONOMICAL AND AVAILABLE." On the surface, it merely propagates the use of nuclear power in general. But its numerous specific references to the PNPP-1 "which will beoperational in 1985" and its advantages give credence to the charge that Exhibit "KK" was in reality designed to project PNPP-1 as safe, among others. When Exhibit "KK" was published, PNPP-1 was the only nuclear plant under construction in the Philippines. It is the Philippine

nuclear plant specifically mentioned therein that was to be operational in 1985. Therefore, when the pamphlet states that nuclear power is working now in other countries and "it should work for us too" because it is "safe" and "economical", it is logical to conclude that the reference is to no other than the nuclear power to be generated at the PNPP-1. Also worth quoting is the following passage in Exhibit "KK" which sweepingly vouchsafes all nuclear power plants, including the PNPP-1: "No member of the public has ever been injured during the last 25 years that commercial nuclear reactors have been generating electricity. As is to be expected in any complex system as nuclear power plants, there have been failure of equipment and human errors. However in every instance, the safety equipment designed into the nuclear reactor self terminated the accident without injury to the operators or the public. The Three Mile Island Incident, serious as it was, did not result in the loss of life nor did it result in the exposure of anyone beyond permissible limits. "The designers of nuclear plants assume failure to occur and provide multiple safeguards protection against every conceivable malfunction." (p. 7, Emphasis supplied.) The third pamphlet (Exh. "LL") is entitled NUCLEAR POWER PLANT and ENVIRONMENTAL SAFETY. Speaking specifically of the PNPP-1, it categorically states that the Bataan nuclear plant will not adversely affect the public or the flora or fauna in the area. One of the stated reasons in support of the conclusion is "And environmentally, a nuclear power plant emits only insignificant amount of radioactivity to the environment. It does not cause chemical pollution of air or water, it does not emit sulfur dioxide or nitrogen oxides like plants fired by fossil fuels such as coal and oil. Besides, even coal fired plants may emit radioactive particles of uranium and thorium because these may be found naturally associated with coal deposits. "Comparatively therefore, a nuclear power plant is the cleanest and the safest, environmently no other technology in modern times has been developed with so dominant concern for public safety as nuclear power." (p. 8) Respondent PAEC Commissioners cannot escape responsibility for these official pamphlets. Exhibit "JJ" was published in 1985, when respondent Commissioners had already been appointed to their present positions. Exhibits "KK" and "LL" were issued earlier, but the majority of respondent Commissioners even then were already occupying positions of responsibility in the PAEC. Commissioner Manuel Eugenio was Acting Chief of the PAEC Department on Nuclear Technology and Engineering from June, 1980 to July, 1984; Commissioner Quirino Navarro was PAEC Chief Science Research Specialist from May, 1980 to September, 1984; and Commissioner Alejandro Ver Albano was PAEC Deputy Commissioner from March, 1980 to September, 1984. Additionally, the stubborn fact remains unrebutted that Exhibits "JJ", "KK" and "LL" continued to be distributed by PAEC as late as March, 1985. In other words their official distribution continued after the filing of NPC's motion for conversion on June 27, 1984 and even after PAEC had issued its order dated February 26, 1985 formally admitting the said motion for conversion. At any rate, even if it be assumed that there are some doubts regarding the conclusion that there has been a prejudgment of the safety of PNPP-1, the doubts should be resolved in favor of a course of action that will assure an unquestionably objective inquiry, considering the circumstances thereof and the number of people vitally interested therein.

Having thus prejudged the safety of the PNPP-1, respondent PAEC Commissioners would be acting with grave abuse of discretion amounting to lack of jurisdiction were they to sit in judgment upon the safety of the plant, absent the requisite objectivity that must characterize such an important inquiry. The Court therefore Resolved to RESTRAIN respondent PAEC Commissioners from further acting in PAEC Licensing ProceedingsNo. 1-77. II. In G.R. No. 68474, acting on the motion filed therein dated June 8, 1985 to order PAEC to reconsider its orders of May 31 and June 5, 1985, the urgent motion for mandatory injunction and/or restraining order dated August 3, 1985, the second urgent motion for mandatory injunction dated August 12, 1985, and the various pleadings and other documents submitted by the parties relative thereto, and considering the paramount need of a reasonable assurance that the operation of PNPP-1 will not pose an undue risk to the health and safety of the people, which dictates that the conduct of the inquiry into the safety aspects of PNPP-1 be characterized by sufficient latitude, the better to achieve the end in view, unfettered by technical rules of evidence (Republic Act 5207, section 34), and in keeping with the requirements of due process in administrative proceedings, the Court Resolved to ORDER respondent PAEC (once reconstituted) to re-open the hearing on PNPP-1 so as to give petitioners sufficient time to complete their cross-examination of the expert witnesses on quality assurance, to cross-examine the witnesses that petitioners have failed to cross-examine on and after August 9, 1985, and to complete the presentation of their evidence, for which purpose, respondent PAEC shall issue the necessary subpoena and subpoena duces tecum to compel the attendance of relevant witnesses and/or the production of relevant documents. For the said purposes, the PAEC may prescribe a time schedule which shall reasonably assure the parties sufficient latitude to adequately present their case consistently with the requirements of dispatch. It is understood that the PAEC may give NPC the opportunity to correct or supply deficiencies in this application or evidence in support thereof.

22. 1/3CS] CONGRESSMAN ENRIQUE T. GARCIA, petitioner, vs. HON. RENATO C. CORONA, in his capacity as the Executive
Secretary, HON. FRANCISCO VIRAY, in his capacity as the Secretary of Energy, CALTEX PHILIPPINES INC., PILIPINAS SHELL PETROLEUM CORP. and PETRON CORP., respondents. G.R. No. 132451 | 1999-12-17 On November 5, 1997, this Court in Tatad v. Secretary of the Department of Energy and Lagman, et al., v. Hon. Ruben Torres, et al.,1 [281 SCRA 330 (1997).] declared Republic Act No. 8180, entitled "An Act Deregulating the Downstream Oil Industry and For Other Purposes", unconstitutional, and its implementing Executive Order No. 392 void. R.A. 8180 was struck down as invalid because three key provisions intended to promote free competition were shown to achieve the opposite result. More specifically, this Court ruled that its provisions on tariff differential, stocking of inventories, and predatory pricing inhibit fair competition, encourage monopolistic power, and interfere with the free interaction of the market forces. While R.A. 8180 contained a separability clause, it was declared unconstitutional in its entirety since the three (3) offending provisions so permeated the law that they were so intimately the esse of the law. Thus, the whole statute had to be invalidated. As a result of the Tatad decision, Congress enacted Republic Act No. 8479, a new deregulation law without the offending

provisions of the earlier law. Petitioner Enrique T. Garcia, a member of Congress, has now brought this petition seeking to declare Section 19 thereof, which sets the time of full deregulation, unconstitutional. After failing in his attempts to have Congress incorporate in the law the economic theory he espouses, petitioner now asks us, in the name of upholding the Constitution, to undo a violation which he claims Congress has committed. The assailed Section 19 of R.A. 8479 states in full: SEC. 19. Start of Full Deregulation. --- Full deregulation of the Industry shall start five (5) months following the effectivity of this Act: Provided, however, That when the public interest so requires, the President may accelerate the start of full deregulation upon the recommendation of the DOE and the Department of Finance (DOF) when the prices of crude oil and petroleum products in the world market are declining and the value of the peso in relation to the US dollar is stable, taking into account relevant trends and prospects; Provided, further, That the foregoing provision notwithstanding, the five (5)-month Transition Phase shall continue to apply to LPG, regular gasoline and kerosene as socially-sensitive petroleum products and said petroleum products shall be covered by the automatic pricing mechanism during the said period. Upon the implementation of full deregulation as provided herein, the Transition Phase is deemed terminated and the following laws are repealed: a) Republic Act No. 6173, as amended; b) Section 5 of Executive Order No. 172, as amended; c) Letter of Instruction No. 1431, dated October 15, 1984; d) Letter of Instruction No. 1441, dated November 20, 1984, as amended; e) Letter of Instruction No. 1460, dated May 9, 1985; f) Presidential Decree No. 1889; and g) Presidential Decree No. 1956, as amended by Executive Order No. 137: Provided, however, That in case full deregulation is started by the President in the exercise of the authority provided in this Section, the foregoing laws shall continue to be in force and effect with respect to LPG, regular gasoline and kerosene for the rest of the five (5)-month period. Petitioner contends that Section 19 of R.A. 8479, which prescribes the period for the removal of price control on gasoline and other finished products and for the full deregulation of the local downstream oil industry, is patently contrary to public interest and therefore unconstitutional because within the short span of five months, the market is still dominated and controlled by an oligopoly of the three (3) private respondents, namely, Shell, Caltex and Petron. The objective of the petition is deceptively simple. It states that if the constitutional mandate against monopolies and combinations in restraint of trade2 [CONSTITUTION, Article XII, Section 19.] is to be obeyed, there should be indefinite and

open-ended price controls on gasoline and other oil products for as long as necessary. This will allegedly prevent the "Big 3" --Shell, Caltex and Petron --- from price-fixing and overpricing. Petitioner calls the indefinite retention of price controls as "partial deregulation". The grounds relied upon in the petition are: A. SECTION 19 OF R.A. NO. 8479 WHICH PROVIDES FOR FULL DEREGULATION FIVE (5) MONTHS OR EARLIER FOLLOWING THE EFFECTIVITY OF THE LAW, IS GLARINGLY PRO-OLIGOPOLY, ANTI-COMPETITION AND ANTI-PEOPLE, AND IS THEREFORE PATENTLY UNCONSTITUTIONAL FOR BEING IN GROSS AND CYNICAL CONTRAVENTION OF THE CONSTITUTIONAL POLICY AND COMMAND EMBODIED IN ARTCLE XII, SECTION 19 OF THE 1987 CONSTITUTION AGAINST MONOPOLIES AND COMBINATIONS IN RESTRAINT OF TRADE. B. SAID SECTION 19 OF R.A. No. 8479 IS GLARINGLY PRO-OLIGOPOLY, ANTI-COMPETITION AND ANTI-PEOPLE, FOR THE FURTHER REASON THAT IT PALPABLY AND CYNICALLY VIOLATES THE VERY OBJECTIVE AND PURPOSE OF R.A. NO. 8479, WHICH IS TO ENSURE A TRULY COMPETITIVE MARKET UNDER A REGIME OF FAIR PRICES. C. SAID SECTION 19 OF R.A. No. 8479, BEING GLARINGLY PRO-OLIGOPOLY, ANTI-COMPETITION AND ANTI-PEOPLE, BEING PATENTLY UNCONSTITUTIONAL AND BEING PALPABLY VIOLATIVE OF THE LAW'S POLICY AND PURPOSE OF ENSURING A TRULY COMPETITIVE MARKET UNDER A REGIME OF FAIR PRICES, IS A VERY GRAVE AND GRIEVOUS ABUSE OF DISCRETION ON THE PART OF THE LEGISLATIVE AND EXECUTIVE BRANCHES OF GOVERNMENT. D. PREMATURE FULL DEREGULATION UNDER SECTION 19 OF R.A. NO. 8479 MAY AND SHOULD THEREFORE BE DECLARED NULL AND VOID EVEN AS THE REST OF ITS PROVISIONS REMAIN IN FORCE, SUCH AS THE TRANSITION PHASE OR PARTIAL DEREGULATION WITH PRICE CONTROLS THAT ENSURES THE PROTECTION OF THE PUBLIC INTEREST BY PREVENTING THE BIG 3 OLIGOPOLY'S PRICE-FIXING AND OVERPRICING.3 [Rollo, pp. 15-16.] The issues involved in the deregulation of the downstream oil industry are of paramount significance. The ramifications, international and local in scope, are complex. The impact on the nation's economy is pervasive and far-reaching. The amounts involved in the oil business are immense. Fluctuations in the supply and price of oil products have a dramatic effect on economic development and public welfare. As pointed out in the Tatad decision, few cases carry a surpassing importance on the daily life of every Filipino. The issues affect everybody from the poorest wage-earners and their families to the richest entrepreneurs, from industrial giants to humble consumers. Our decision in this case is complicated by the unstable oil prices in the world market. Even as this case is pending, the price of OPEC oil is escalating to record levels. We have to emphasize that our decision has nothing to do with worldwide fluctuations in oil prices and the counter-measures of Government each time a new development takes place. The most important part of deregulation is freedom from price control. Indeed, the free play of market forces through deregulation and when to implement it represent one option to solve the problems of the oil-consuming public. There are other considerations which may be taken into account such as the reduction of taxes on oil products, the reinstitution of an Oil Price Stabilization Fund, the choice between government subsidies taken from the regular taxpaying public on one hand and the increased costs being shouldered only by users of oil products on the other, and most important, the immediate repeal of

the oil deregulation law as wrong policy. Petitioner wants the setting of prices to be done by Government instead of being determined by free market forces. His preference is continued price control with no fixed end in sight. A simple glance at the factors surrounding the present problems besetting the oil industry shows that they are economic in nature. R.A. 8479, the present deregulation law, was enacted to implement Article XII, Section 19 of the Constitution which provides: The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed. This is so because the Government believes that deregulation will eventually prevent monopoly. The simplest form of monopoly exists when there is only one seller or producer of a product or service for which there are no substitutes. In its more complex form, monopoly is defined as the joint acquisition or maintenance by members of a conspiracy, formed for that purpose, of the power to control and dominate trade and commerce in a commodity to such an extent that they are able, as a group, to exclude actual or potential competitors from the field, accompanied with the intention and purpose to exercise such power.4 [American Tobacco Co. v. United States, 328 U.S. 781; 90 L. Ed. 1575.] Where two or three or a few companies act in concert to control market prices and resultant profits, the monopoly is called an oligopoly or cartel. It is a combination in restraint of trade. The perennial shortage of oil supply in the Philippines is exacerbated by the further fact that the importation, refining, and marketing of this precious commodity are in the hands of a cartel, local but made up of foreign-owned corporations. Before the start of deregulation, the three private respondents controlled the entire oil industry in the Philippines. It bears reiterating at the outset that the deregulation of the oil industry is a policy determination of the highest order. It is unquestionably a priority program of Government. The Department of Energy Act of 19925 [Republic Act No. 7638.] expressly mandates that the development and updating of the existing Philippine energy program "shall include a policy direction towards deregulation of the power and energy industry." Be that as it may, we are not concerned with whether or not there should be deregulation. This is outside our jurisdiction. The judgment on the issue is a settled matter and only Congress can reverse it. Rather, the question that we should address here is -- are the method and the manner chosen by Government to accomplish its cherished goal offensive to the Constitution? Is indefinite price control in the manner proposed by petitioner the only feasible and legal way to achieve it? Petitioner has taken upon himself a most challenging task. Unquestionably, the direction towards which the nation's efforts at economic and social upliftment should be addressed is a function of Congress and the President. In the exercise of this function, Congress and the President have obviously determined that speedy deregulation is the answer to the acknowledged dominion by oligopolistic forces of the oil industry. Thus, immediately after R.A. 8180 was declared unconstitutional in the Tatad case, Congress took resolute steps to fashion new legislation towards the objective of the earlier law. Invoking the Constitution, petitioner now wants to slow down the process. While the Court respects the firm resolve displayed by Congress and the President, all departments of Government are equally bound by the sovereign will expressed in the commands of the Constitution. There is a need for utmost care if this Court is to faithfully discharge its duties as arbitral guardian of the Constitution. We cannot encroach on the policy functions of the two

other great departments of Government. But neither can we ignore any overstepping of constitutional limitations. Locating the correct balance between legality and policy, constitutional boundaries and freedom of action, and validity and expedition is this Court's dilemma as it resolves the legitimacy of a Government program aimed at giving every Filipino a more secure, fulfilling and abundant life. Our ruling in Tatad is categorical that the Constitution's Article XII, Section 19, is anti-trust in history and spirit. It espouses competition. We have stated that only competition which is fair can release the creative forces of the market. We ruled that the principle which underlies the constitutional provision is competition. Thus: Section 19, Article XII of our Constitution is anti-trust in history and in spirit. It espouses competition. The desirability of competition is the reason for the prohibition against restraint of trade, the reason for the interdiction of unfair competition, and the reason for regulation of unmitigated monopolies. Competition is thus the underlying principle of section 19, Article XII of our Constitution which cannot be violated by R.A. No. 8180. We subscribe to the observation of Prof. Gellhorn that the objective of anti-trust law is "to assure a competitive economy, based upon the belief that through competition producers will strive to satisfy consumer wants at the lowest price with the sacrifice of the fewest resources. Competition among producers allows consumers to bid for goods and services, and thus matches their desires with society's opportunity costs." He adds with appropriateness that there is a reliance upon "the operation of the 'market' system (free enterprise) to decide what shall be produced, how resources shall be allocated in the production process, and to whom the various products will be distributed. The market system relies on the consumer to decide what and how much shall be produced, and on competition, among producers to determine who will manufacture it."6 [supra., at 358; citing Gellhorn, Anti Trust Law and Economics in a Nutshell, 1986 ed., p. 45.] In his recital of the antecedent circumstances, petitioner repeats in abbreviated form the factual findings and conclusions which led the Court to declare R.A. 8180 unconstitutional. The foreign oligopoly or cartel formed by respondents Shell, Caltex and Petron, their indulging in price-fixing and overpricing, their blockade tactics which effectively obstructed the entry of genuine competitors, the dangers posed by the oil cartel to national security and economic development, and other prevailing sentiments are stated as axiomatic truths. They are repeated in capsulized context as the current background facts of the present petition. The empirical existence of this deplorable situation was precisely the reason why Congress enacted the oil deregulation law. The evils arising from conspiratorial acts of monopoly are recognized as clear and present. But the enumeration of the evils by our Tatad decision was not for the purpose of justifying continued government control, especially price control. The objective was, rather, the opposite. The evils were emphasized to show the need for free competition in a deregulated industry. And to be sure, the measures to address these evils are for Congress to determine, but they have to meet the test of constitutional validity. The Court respects the legislative finding that deregulation is the policy answer to the problems. It bears stressing that R.A. 8180 was declared invalid not because deregulation is unconstitutional. The law was struck down because, as crafted, three key provisions plainly encouraged the continued existence if not the proliferation of the constitutionally proscribed evils of monopoly and restraint of trade. In sharp contrast, the present petition lacks a factual foundation specifically highlighting the need to declare the challenged provision unconstitutional. There is a dearth of relevant, reliable, and substantial evidence to support petitioner's theory that

price control must continue even as Government is trying its best to get out of regulating the oil industry. The facts of the petition are, in the main, a general dissertation on the evils of monopoly. Petitioner overlooks the fact that Congress enacted the deregulation law exactly because of the monopoly evils he mentions in his petition. Congress instituted the lifting of price controls in the belief that free and fair competition was the best remedy against monopoly power. In other words, petitioner's facts are also the reasons why Congress lifted price controls and why the President accelerated the process. The facts adduced in favor of continued and indefinite price control are the same facts which supported what Congress believes is an exercise of wisdom and discretion when it chose the path of speedy deregulation and rejected Congressman Garcia's economic theory. The petition states that it is using the very thoughts and words of the Court in its Tatad decision. Those thoughts and words, however, were directed against the tariff differential, the inventory requirement, and predatory pricing, not against deregulation as a policy and not against the lifting of price controls. A dramatic, at times expansive and grandiloquent, reiteration of the same background circumstances narrated in Tatad does not squarely sustain petitioner's novel thesis that there can be deregulation without lifting price controls. Petitioner may call the industry subject to price controls as deregulated. In enacting the challenged provision, Congress, on the other hand, has declared that any industry whose prices and profits are fixed by government authority remains a highly regulated one. Petitioner, therefore, engages in a legal paradox. He fails to show how there can be deregulation while retaining government price control. Deregulation means the lifting of control, governance and direction through rule or regulation. It means that the regulated industry is freed from the controls, guidance, and restrictions to which it used to be subjected. The use of the word "partial" to qualify deregulation is sugar-coating. Petitioner is really against deregulation at this time. Petitioner states that price control is good. He claims that it was the regulation of the importation of finished oil products which led to the exit of competitors and the consolidation and dominion of the market by an oligopoly, not price control. Congress and the President think otherwise. The argument that price control is not the villain in the intrusion and growth of monopoly appears to be pure theory not validated by experience. There can be no denying the fact that the evils mentioned in the petition arose while there was price control. The dominance of the so-called "Big 3" became entrenched during the regime of price control. More importantly, the ascertainment of the cause and the method of dismantling the oligopoly thus created are a matter of legislative and executive choice. The judicial process is equipped to handle legality but not wisdom of choice and the efficacy of solutions. Petitioner engages in another contradiction when he puts forward what he calls a self-evident truth. He states that a truly competitive market and fair prices cannot be legislated into existence. However, the truly competitive market is not being created or fashioned by the challenged legislation. The market is simply freed from legislative controls and allowed to grow and develop free from government interference. R.A. 8479 actually allows the free play of supply and demand to dictate prices. Petitioner wants a government official or board to continue performing this task. Indefinite and open-ended price control as advocated by petitioner would be to continue a regime of legislated regulation where free competition cannot possibly flourish. Control is the antithesis of competition. To grant the petition would mean that the Government is not keen on allowing a free

market to develop. Petitioner's "self-evident truth" thus supports the validity of the provision of law he opposes. New players in the oil industry intervened in this case. According to them, it is the free market policy and atmosphere of deregulation which attracted and brought the new participants, themselves included, into the market. The intervenors express their fear that this Court would overrule legislative policy and replace it with petitioner's own legislative program. The factual allegations of the intervenors have not been refuted and we see no reason to doubt them. Their argument that the co-existence of many viable rivals create free market conditions induces competition in product quality and performance and makes available to consumers an expanded range of choices cannot be seriously disputed. On the other hand, the pleadings of public and private respondents both put forth the argument that the challenged provision is a policy decision of Congress and that the wisdom of the provision is outside the authority of this Court to consider. We agree. As we have ruled in Morfe v. Mutuc7 [22 SCRA 424, at 450-51 (1968); citations omitted.]: (I)t is well to remember that this Court, in the language of Justice Laurel, "does not pass upon question or wisdom, justice or expediency of legislation." As expressed by Justice Tuason: "It is not the province of the courts to supervise legislation and keep it within the bounds of propriety and common sense. That is primarily and exclusively a legislative concern." There can be no possible objection then to the observation of Justice Montemayor: "As long as laws do not violate any Constitutional provision, the Courts merely interpret and apply them regardless of whether or not they are wise or salutary." For they, according to Justice Labrador, "are not supposed to override legitimate policy and x x x never inquire into the wisdom of the law." It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on Elections, that only congressional power or competence, not the wisdom of the action taken, may be the basis for declaring a statute invalid. This is as it ought to be. The principle of separation of powers has in the main wisely allocated the respective authority of each department and confined its jurisdiction to such a sphere. There would then be intrusion not allowable under the Constitution if on a matter left to the discretion of a coordinate branch, the judiciary would substitute its own. If there be adherence to the rule of law, as there ought to be, the last offender should be the courts of justice, to which rightly litigants submit their controversy precisely to maintain unimpaired the supremacy of legal norms and prescriptions. The attack on the validity of the challenged provision likewise insofar as there may be objections, even if valid and cogent, on its wisdom cannot be sustained. In this petition, Congressman Garcia seeks to revive the long settled issue of the timeliness of full deregulation, which issue he had earlier submitted to this Court by way of a Partial Motion for Reconsideration in the Tatad case. In our Resolution dated December 3, 1997, which has long become final and executory, we stated: We shall first resolve petitioner Garcia's linchpin contention that the full deregulation decreed by R.A. No. 8180 to start at the end of March 1997 is unconstitutional. For prescinding from this premise, petitioner suggests that "we simply go back to the transition period, price control will be revived through the automatic pricing mechanism based on Singapore Posted Prices. The Energy Regulatory Board x x x would play a limited and ministerial role of computing the monthly price ceiling of each and every petroleum fuel product, using the automatic pricing formula. While the OPSF would return, this coverage would be limited to monthly price increases in excess of P0.50 per liter." We are not impressed by petitioner Garcia's submission. Petitioner has no basis in condemning as unconstitutional per se the date fixed by Congress for the beginning of the full deregulation of the downstream oil industry. Our Decision merely faulted

the Executive for factoring the depletion of OPSF in advancing the date of full deregulation to February 1997. Nonetheless, the error of the Executive is now a non-issue for the full deregulation set by Congress itself at the end of March 1997 has already come to pass. March 1997 is not an arbitrary date. By that date, the transition period has ended and it was expected that the people would have adjusted to the role of market forces in shaping the prices of petroleum and its products. The choice of March 1997 as the date of full deregulation is a judgment of Congress and its judgment call cannot be impugned by this Court.8 [Tatad v. Secretary of the Department of Energy, 282 SCRA 337, 353 (1997).] Reduced to its basic arguments, it can be seen that the challenge in this petition is not against the legality of deregulation. Petitioner does not expressly challenge deregulation. The issue, quite simply, is the timeliness or the wisdom of the date when full deregulation should be effective. In this regard, what constitutes reasonable time is not for judicial determination. Reasonable time involves the appraisal of a great variety of relevant conditions, political, social and economic. They are not within the appropriate range of evidence in a court of justice. It would be an extravagant extension of judicial authority to assert judicial notice as the basis for the determination.9 [Coleman v. Miller 307 U.S. 433; 59 S. Ct. 972; 83 L. Ed. 1385 (1939).] We repeat that what petitioner decries as unsuccessful is not a final result. It is only a beginning. The Court is not inclined to stifle deregulation as enacted by Congress from its very start. We leave alone the program of deregulation at this stage. Reasonable time will prove the wisdom or folly of the deregulation program for which Congress and not the Court is accountable. Petitioner argues further that the public interest requires price controls while the oligopoly exists, for that is the only way the public can be protected from monopoly or oligopoly pricing. But is indefinite price control the only feasible and legal way to enforce the constitutional mandate against oligopolies? Article 186 of the Revised Penal Code, as amended, punishes as a felony the creation of monopolies and combinations in restraint of trade. The Solicitor General, on the other hand, cites provisions of R.A. 8479 intended to prevent competition from being corrupted or manipulated. Section 11, entitled "Anti-Trust Safeguards", defines and prohibits cartelization and predatory pricing. It penalizes the persons and officers involved with imprisonment of three (3) to seven (7) years and fines ranging from One million to Two million pesos. For this purpose, a Joint Task Force from the Department of Energy and Department of Justice is created under Section 14 to investigate and order the prosecution of violations. Sections 8 and 9 of the Act, meanwhile, direct the Departments of Foreign Affairs, Trade and Industry, and Energy to undertake strategies, incentives and benefits, including international information campaigns, tax holidays and various other agreements and utilizations, to invite and encourage the entry of new participants. Section 6 provides for uniform tariffs at three percent (3%). Section 13 of the Act provides for "Remedies", under which the filing of actions by government prosecutors and the investigation of private complaints by the Task Force is provided. Sections 14 and 15 provide how the Department of Energy shall monitor and prevent the occurrence of collusive pricing in the industry. It can be seen, therefore, that instead of the price controls advocated by the petitioner, Congress has enacted anti-trust measures which it believes will promote free and fair competition. Upon the other hand, the disciplined, determined,

consistent and faithful execution of the law is the function of the President. As stated by public respondents, the remedy against unreasonable price increases is not the nullification of Section 19 of R.A. 8479 but the setting into motion of its various other provisions. For this Court to declare unconstitutional the key provision around which the law's anti-trust measures are clustered would mean a constitutionally interdicted distrust of the wisdom of Congress and of the determined exercise of executive power. Having decided that deregulation is the policy to follow, Congress and the President have the duty to set up the proper and effective machinery to ensure that it works. This is something which cannot be adjudicated into existence. This Court is only an umpire of last resort whenever the Constitution or a law appears to have been violated. There is no showing of a constitutional violation in this case. WHEREFORE, the petition is DISMISSED.

23. GREATER METROPOLITAN MANILA SOLID WASTE MANAGEMENT COMMITTEE and the METROPOLITAN MANILA
DEVELOPMENT AUTHORITY, Petitioners, versus JANCOM ENVIRONMENTAL CORPORATION and JANCOM INTERNATIONAL DEVELOPMENT PROJECTS PTY. LIMITED OF AUSTRALIA, Respondents. G.R. No. 163663 | 2006-06-30

The present petition for review on certiorari challenges the Decision[1] dated December 19, 2003 and Resolution[2] dated May 11, 2004 of the Court of Appeals (CA)[3] in CA-G.R. SP No. 78752 which denied the petition for certiorari filed by herein petitioners Greater Metropolitan Manila Solid Waste Management Committee (GMMSWMC) and the Metropolitan Manila Development Authority (MMDA) and their Motion for Reconsideration, respectively. In 1994, Presidential Memorandum Order No. 202 was issued by then President Fidel V. Ramos creating an Executive Committee to oversee and develop waste-to-energy projects for the waste disposal sites in San Mateo, Rizal and Carmona, Cavite under the Build-Operate-Transfer (BOT) scheme. Respondent Jancom International Development Projects Pty. Limited of Australia (Jancom International) was one of the bidders for the San Mateo Waste Disposal Site. It subsequently entered into a partnership with Asea Brown Boveri under the firm name JANCOM Environmental Corporation (JANCOM), its co-respondent. On February 12, 1997, the above-said Executive Committee approved the recommendation of the Pre-qualification, Bids and Awards Committee to declare JANCOM as the sole complying bidder for the San Mateo Waste Disposal Site. On December 19, 1997, a Contract for the BOT Implementation of the Solid Waste Management Project for the San Mateo, Rizal Waste Disposal Site[4] (the contract) was entered into by the Republic of the Philippines, represented by the Presidential Task Force on Solid Waste Management through then Department of Environment and Natural Resources Secretary Victor Ramos, then Cabinet Office for Regional Development-National Capital Region Chairman Dionisio dela Serna, and then MMDA Chairman Prospero Oreta on one hand, and JANCOM represented by its Chief Executive Officer Jorge Mora Aisa and its Chairman Jay Alparslan, on the other. On March 5, 1998, the contract was submitted for approval to President Ramos who subsequently endorsed it to

thenincoming President Joseph E. Estrada. Owing to the clamor of the residents of Rizal, the Estrada administration ordered the closure of the San Mateo landfill. Petitioner GMMSWMC thereupon adopted a Resolution not to pursue the contract with JANCOM, citing as reasons therefor the passage of Republic Act 8749, otherwise known as the Clean Air Act of 1999, the non-availability of the San Mateo site, and costly tipping fees.[5] The Board of Directors of Jancom International thereafter adopted on January 4, 2000 a Resolution[6] authorizing Atty. Manuel Molina to act as legal counsel for respondents and "determine and file such legal action as deemed necessary before the Philippine courts in any manner he may deem appropriate" against petitioners. The Board of Directors of JANCOM also adopted a Resolution[7] on February 7, 2000 granting Atty. Molina similar authorization to file legal action as may be necessary to protect its interest with respect to the contract. On March 14, 2000, respondents filed a petition for certiorari[8] with the Regional Trial Court (RTC) of Pasig City where it was docketed as Special Civil Action No. 1955, to declare the GMMSWMC Resolution and the acts of the MMDA calling for bids for and authorizing the forging of a new contract for the Metro Manila waste management as illegal, unconstitutional and void and to enjoin petitioners from implementing the Resolution and making another award in lieu thereof. By Decision[9] of May 29, 2000, Branch 68 of the Pasig City RTC found in favor of respondents.[10] Petitioners thereupon assailed the RTC Decision via petition for certiorari[11] with prayer for a temporary restraining order with the CA, docketed as CA-G.R. SP No. 59021. By Decision[12] of November 13, 2000, the CA denied the petition for lack of merit and affirmed in toto the May 29, 2000 RTC Decision. Petitioners' Motion for Reconsideration was denied, prompting them to file a petition for review before this Court, docketed as G.R. No. 147465. By Decision[13] of January 30, 2002 and Resolution[14] of April 10, 2002, this Court affirmed the November 13, 2001 CA Decision and declared the contract valid and perfected, albeit ineffective and unimplementable pending approval by the President. JANCOM and the MMDA later purportedly entered into negotiations to modify certain provisions of the contract which were embodied in a draft Amended Agreement[15] dated June 2002. The draft Amended Agreement bore no signature of the parties. Respondents, through Atty. Molina, subsequently filed before Branch 68 of the Pasig City RTC an Omnibus Motion[16] dated July 29, 2002 praying that: (1) an alias writ of execution be issued prohibiting and enjoining petitioners and their representatives from calling for, accepting, evaluating, approving, awarding, negotiating or implementing all bids, awards and contracts involving other Metro Manila waste management projects intended to be pursued or which are already being pursued; (2) the MMDA, through its Chairman Bayani F. Fernando, be directed to immediately forward and recommend the approval of the Amended Agreement to President Gloria Macapagal Arroyo; (3) Chairman Fernando be ordered to personally appear before the court and explain his acts and public pronouncements which are in direct violation and gross defiance of the

final and executory May 29, 2000 RTC Decision; (4) the Executive Secretary and the Cabinet Secretaries of the departmentsmembers of the National Solid Waste Management Commission be directed "to submit the contract within 30 days from notice to the President for signature and approval and if the latter chooses not to sign or approve the contract, the Executive Secretary be made to show cause therefor;" and (5) petitioners be directed to comply with and submit their written compliance with their obligations specifically directed under the provisions of Article 18, paragraphs 18.1, 18.1.1 (a), (b), (c) and (d) of the contract within 30 days from notice.[17] To the Omnibus Motion petitioners filed their Opposition[18] which merited JANCOM's Reply[19] filed on August 19, 2002. On August 21, 2002, Atty. Simeon M. Magdamit, on behalf of Jancom International, filed before the RTC an Entry of Special Appearance and Manifestation with Motion to Reject the Pending Omnibus Motion[20] alleging that: (1) the Omnibus Motion was never approved by Jancom International; (2) the Omnibus Motion was initiated by lawyers whose services had already been terminated, hence, were unauthorized to represent it; and (3) the agreed judicial venue for dispute resolution relative to the implementation of the contract is the International Court of Arbitration in the United Kingdom pursuant to Article 16.1[21] of said contract. In the meantime, on November 3, 2002, the MMDA forwarded the contract to the Office of the President for appropriate action,[22] together with MMDA Resolution No. 02-18[23] dated June 26, 2002, "Recommending to her Excellency the President of the Republic of the Philippines to Disapprove the Contract Entered Into by the Executive Committee of the Presidential Task Force on Waste Management with Jancom Environmental Corporation and for Other Purposes." By Order[24] of November 18, 2002, the RTC noted the above-stated Entry of Special Appearance of Atty. Magdamit for Jancom International and denied the Motion to Reject Pending Omnibus Motion for lack of merit. Jancom International filed on December 9, 2002 a Motion for Reconsideration[25] which was denied for lack of merit by Order[26] of January 8, 2003. Petitioners and respondents then filed their Memoranda[27] on May 23, 2003 and May 26, 2003, respectively. By Order[28] of June 11, 2003, the RTC granted respondents' Omnibus Motion in part. The dispositive portion of the Order reads, quoted verbatim: WHEREFORE, in view of the foregoing, let an Alias Writ of Execution immediately issue and the Clerk of Court and Ex-Oficio Sheriff or any o[f] her Deputies is directed to implement the same within sixty (60) days from receipt thereof. Thus, any and all such bids or contracts entered into by respondent MMDA with third parties covering the waste disposal and management within the Metro Manila after August 14, 2000 are hereby declared NULL and VOID. Respondents are henceforth enjoined and prohibited, with a stern warning, from entering into any such contract with any third party whether directly or indirectly, in violation of the contractual rights of petitioner JANCOM under the BOT Contract Award, consistent with the Supreme Court's Decision of January 30, 2002. Respondent MMDA is hereby directed to SUBMIT the Amended Agreement concluded by petitioners with the previous MMDA officials, or in its discretion if it finds [it] more advantageous to the government, to require petitioners to make adjustments in the Contract in accordance with existing environmental laws and other relevant concerns, and thereafter forward the Amended Agreement for signature and approval by the President of the Philippines. The concerned respondents are hereby further

directed to comply fully and in good faith with its institutional obligations or undertakings as provided in Article 18 of the BOT Contract. Let a copy of this Order be furnished the Office of the Clerk of Court and the Commission on Audit for its information and guidance. SO ORDERED.[29] (Emphasis in the original) On June 23, 2003 the RTC issued an Alias Writ of Execution[30] reading: WHEREAS, on May 29, 2000, a Decision was rendered by this Court in the above-entitled case, the pertinent portions of which is [sic] hereunder quoted as follows: WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor of petitioners JANCOM ENVIRONMENTAL CORP and JANCOM INTERNATIONAL DEVELOPMENT PROJECTS PTY., LIMITED OF AUSTRALIAS [sic], and against respondents GREATER METROPOLITAN MANILA SOLID WASTE MANAGEMENT COMM., and HON. ROBERTO N. AVENTAJADO, in his capacity as Chairman of the said Committee, METRO MANILA DEVELOPMENT AUTHORITY and HON. JEJOMAR C. BINAY, in his capacity as Chairman of said Authority, declaring the Resolution of respondent Greater Metropolitan Manila Solid Waste Management Committee disregarding petitioners' BOT Award Contract and calling for bids for and authorizing a new contract for the Metro Manila waste management ILLEGAL an[d] VOID. Moreover, respondents and their agents are hereby PROHIBITED and ENJOINED from implementing the aforesaid Resolution and disregarding petitioners' BOT Award Contract and from making another award in its place. Let it be emphasized that this Court is not preventing or stopping the government from implementing infrastructure projects as it is aware of the proscription under PD 1818. On the contrary, the Court is paving the way for the necessary and modern solution to the perennial garbage problem that has been the major headache of the government and in the process would serve to attract more investors in the country. SO ORDERED. WHEREAS, on August 7, 2000, petitioners through counsel filed a "Motion for Execution" which the Court GRANTED in its Order dated August 14, 2000; WHEREAS, as a consequence thereof, a Writ of Execution was issued on August 14, 2000 and was duly served upon respondents as per Sheriff's Return dated August 27, 2000; WHEREAS, ON July 29, 2002, petitioners through counsel filed an "Omnibus Motion," praying, among others, for the issuance of an Alias Writ of Execution which the Court GRANTED in its Order dated June 11, 2003, the dispositive portion of which reads as follows: WHEREFORE, in view of the foregoing, let an Alias Writ of Execution immediately issue and the Clerk of Court and Ex-Oficio Sheriff or any of her Deputies is directed to implement the same within sixty (60) days from receipt thereof.

Thus, any and all such bids or contracts entered into by respondent MMDA [with] third parties covering the waste disposal and management within the Metro Manila after August 14, 2000 are hereby declared NULL and VOID. Respondents are henceforth enjoined and prohibited, with a stern warning, from entering into any such contract with any third party whether directly or indirectly, in violation of the contractual rights of petitioner Jancom under the BOT Contract Award, consistent with the Supreme Court's Decision of January 30, 2002. Respondent MMDA is hereby directed to SUBMIT the Amended Agreement concluded by petitioners with the previous MMDA officials, or in its discretion if it finds [it] more advantageous to the government, to require petitioners to make adjustments in the Contract in accordance with existing environmental laws and other relevant concerns, and thereafter forward the Amended Agreement for signature and approval by the President of the Philippines. The concerned respondents are hereby further directed to comply fully and in good faith with its institutional obligations or undertakings as provided in Article 18 of the BOT Contract. Let a copy of this Order be furnished the Office of the Clerk of Court and the Commission on Audit for its information and guidance. SO ORDERED. x x x x (Emphasis in the original) By letter[31] of August 15, 2003, Chairman Fernando advised Sheriff Alejandro Q. Loquinario of the Office of the Clerk of Court and Ex-Oficio Sheriff, Pasig City RTC that: 1. MMDA has not entered into a new contract for solid waste management in lieu of JANCOM's Contract. 2. JANCOM's Contract has been referred to the Office of the President for appropriate action. 3. Without the President's approval, JANCOM's Contract cannot be implemented.[32] Petitioners later challenged the RTC June 11, 2003 Order via petition for certiorari[33] with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction before the CA. They subsequently filed an Amended Petition[34] on September 26, 2003. To the Amended Petition JANCOM filed on October 8, 2003 its Comment[35] after which petitioners filed their Reply[36] on November 24, 2003. By the challenged Decision of December 19, 2003, the CA denied the petition and affirmed the June 11, 2003 RTC Order in this wise: The Supreme Court ruled that the Jancom contract has the force of law and the parties must abide in good faith by their respective contractual commitments. It is precisely this pronouncement that the alias writ of execution issued by respondent judge seeks to enforce. x x x

xxxx The fact that the Jancom contract has been declared unimplementable without the President's signature, would not excuse petitioners' failure to comply with their undertakings under Article 18 of the contract. x x x xxxx Petitioners complain that respondent judge focused only on requiring them to perform their supposed obligations under Article 18 of the contract when private respondents are also required thereunder to post a Performance Security acceptable to the Republic in the amount allowed in the BOT Law. Petitioners' complaint is not justified. x x x xxxx It cannot x x x be said that respondent judge had been unfair or one-sided in directing only petitioners to fulfill their own obligations under Article 18 of the Jancom contract. Compliance with private respondents' obligations under the contract had not yet become due. xxxx There is no debate that the trial court's Decision has attained finality. Once a judgment becomes final and executory, the prevailing party can have it executed as a matter of right and the granting of execution becomes a mandatory or ministerial duty of the court. After a judgment has become final and executory, vested rights are acquired by the winning party. Just as the losing party has the right to file an appeal within the prescribed period, so also the winning party has the correlative right to enjoy the finality of the resolution of the case. It is true that the ministerial duty of the court to order the execution of a final and executory judgment admits of exceptions as (a) where it becomes imperative in the higher interest of justice to direct the suspension of its execution; or (b) whenever it is necessary to accomplish the aims of justice; or (c) when certain facts and circumstances transpired after the judgment became final which could render the execution of the judgment unjust. Petitioners have not shown that any of these exceptions exists to prevent the mandatory execution of the trial court's Decision.[37] (Italics in the original) Petitioners' Motion for Reconsideration[38] having been denied by the CA by Resolution of May 11, 2004, the present petition for review[39] was filed on July 12, 2004 positing that: THE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE LOWER COURT AND IN DISREGARDING THE FOLLOWING PROPOSITIONS: I THE SUBJECT CONTRACT IS INEFFECTIVE AND UNIMPLEMENTABLE UNTIL AND UNLESS IT IS APPROVED BY THE PRESIDENT. II

THE SUBJECT CONTRACT ONLY COVERS THE DISPOSITION OF 3,000 TONS OF SOLID WASTE A DAY. III THE ALLEGED AMENDED AGREEMENT IS ONLY A DRAFT OR PROPOSAL SUBMITTED BY RESPONDENTS. IV RESPONDENTS MUST ALSO BE MADE TO COMPLY WITH THEIR CONTRACTUAL COMMITMENTS.[40] (Underscoring supplied) JANCOM filed on September 20, 2004 its Comment[41] on the petition to which petitioners filed their Reply[42] on January 28, 2005. On May 4, 2005, Jancom International filed its Comment,[43] reiterating its position that it did not authorize the filing before the RTC by Atty. Molina of the July 29, 2002 Omnibus Motion that impleaded it as party-movant. On July 7, 2005, petitioners filed their Reply[44] to Jancom International's Comment. Petitioners argue that since the contract remains unsigned by the President, it cannot yet be executed. Ergo, they conclude, the proceedings which resulted in the issuance of an alias writ of execution "ran afoul of the [January 30, 2002] decision of [the Supreme] Court in G.R. No. 147465."[45] Petitioners go on to argue that since the contract covers only 3,000 tons of garbage per day while Metro Manila generates at least 6,000 tons of solid waste a day, MMDA may properly bid out the other 3,000 tons of solid waste to other interested groups or entities. Petitioners moreover argue that the alleged Amended Agreement concluded supposedly between JANCOM and former MMDA Chairman Benjamin Abalos is a mere scrap of paper, a mere draft or proposal submitted by JANCOM to the MMDA, no agreement on which was reached by the parties; and at all events, express authority ought to have first been accorded the MMDA to conclude such an amended agreement with JANCOM, the original contract having been concluded between the Republic of the Philippines and JANCOM. Finally, petitioners argue that respondents should also be required to perform their commitments pursuant to Article 18[46] of the contract. The petition is impressed with merit in light of the following considerations. Section 1, Rule 39 of the Rules of Court provides: SECTION 1. Execution upon judgments or final orders. - Execution shall issue as a matter of right, on motion, upon a judgment or order that disposes of the action or proceeding upon the expiration of the period to appeal therefrom if no appeal has been duly perfected.

If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of origin, on motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or final order or orders sought to be enforced and of the entry thereof, with notice to the adverse party. The appellate court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue the writ of execution. Once a judgment becomes final, it is basic that the prevailing party is entitled as a matter of right to a writ of execution the issuance of which is the trial court's ministerial duty, compellable by mandamus.[47] There are instances, however, when an error may be committed in the course of execution proceedings prejudicial to the rights of a party. These instances call for correction by a superior court, as where: 1) the writ of execution varies the judgment; 2) there has been a change in the situation of the parties making execution inequitable or unjust; 3) execution is sought to be enforced against property exempt from execution; 4) it appears that the controversy has never been submitted to the judgment of the court; 5) the terms of the judgment are not clear enough and there remains room for interpretation thereof; or 6) it appears that the writ of execution has been improvidently issued, or that it is defective in substance, or is issued against the wrong party, or that the judgment debt has been paid or otherwise satisfied, or the writ was issued without authority.[48] (Emphasis and Underscoring supplied) That a writ of execution must conform to the judgment which is to be executed, substantially to every essential particular thereof,[49] it is settled. It may not thus vary the terms of the judgment it seeks to enforce,[50] nor go beyond its terms. Where the execution is not in harmony with the judgment which gives it life and exceeds it, it has no validity.[51] This Court's January 30, 2002 Decision in G.R. No. 147465 held: We, therefore, hold that the Court of Appeals did not err when it declared the existence of a valid and perfected contract between the Republic of the Philippines and JANCOM. There being a perfected contract, MMDA cannot revoke or renounce the same without the consent of the other. From the moment of perfection, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage, and law (Article 1315, Civil Code). The contract has the force of law between the parties and they are expected to abide in good faith by their respective contractual commitments, not weasel out of them. Just as nobody can be forced to enter into a contract, in the same manner, once a contract is entered into, no party can renounce it unilaterally or without the consent of the other. It is a general principle of law that no one may be permitted to change his mind or disavow and go back upon his own acts, or to proceed contrary thereto, to the prejudice of the other party. Nonetheless, it has to be

repeated that although the contract is a perfected one, it is still ineffective or unimplementable until and unless it is approved by the President.[52] (Emphasis and Underscoring supplied) This Court's April 10, 2002 Resolution also in G.R. No. 147465 moreover held: x x x The only question before the Court is whether or not there is a valid and perfected contract between the parties. As to the necessity, expediency, and wisdom of the contract, these are outside the realm of judicial adjudication. These considerations are primarily and exclusively a matter for the President to decide. While the Court recognizes that the garbage problem is a matter of grave public concern, it can only declare that the contract in question is a valid and perfected one between the parties, but the same is still ineffective or unimplementable until and unless it is approved by the President, the contract itself providing that such approval by the President is necessary for its effectivity.[53] (Emphasis and Underscoring supplied) Article 19 of the contract provides: Article 19. Effectivity. - This Contract shall become effective upon approval by the President of the Republic of [the] Philippines pursuant to existing Laws subject to condition precedent in Article 18. This Contract shall remain in full force and effect for twenty five (25) years subject to renewal for another twenty five (25) years from the date of Effectivity. Such renewal will be subject to mutual agreement of the parties and approval by the [P]resident of the Republic of [the] Philippines. (Emphasis and underscoring supplied) In issuing the alias writ of execution, the trial court in effect ordered the enforcement of the contract despite this Court's unequivocal pronouncement that albeit valid and perfected, the contract shall become effective only upon approval by the President. Indubitably, the alias writ of execution varied the tenor of this Court's judgment, went against essential portions and exceeded the terms thereof. x x x a lower court is without supervisory jurisdiction to interpret or to reverse the judgment of the higher court x x x. A judge of a lower court cannot enforce different decrees than those rendered by the superior court. x x x The inferior court is bound by the decree as the law of the case, and must carry it into execution according to the mandate. They cannot vary it, or examine it for any other purpose than execution, or give any other or further relief, or review it upon any matter decided on appeal for error apparent, or intermeddle with it, further than to settle so much as has been remanded. x x x[54] The execution directed by the trial court being out of harmony with the judgment, legal implications cannot save it from being found to be fatally defective.[55] Notably, while the trial court ratiocinated that it issued on June 23, 2003 the alias writ "to set into motion the legal mechanism for Presidential approval and signature,"[56] it failed to take due consideration of the fact that during the pendency of the Omnibus Motion, the contract had earlier been forwarded for appropriate action on November 3, 2002 by Chairman Fernando to the Office of the President, with recommendation for its disapproval, which fact the trial court had been duly informed of through pleadings and open court manifestations.[57]

Additionally, it bears noting that the June 11, 2003 Order of the trial court is likewise indisputably defective in substance for having directed the submission of the draft Amended Agreement to the President. The appellate court, in affirming the June 11, 2003 Order of the trial court, overlooked the fact that the Amended Agreement was unsigned by the parties and it instead speculated and rationalized that the submission thereof to the President would at all events solve the mounting garbage problem in Metro Manila: We find that the submission of the Amended Agreement to the President will break the impasse now existing between the parties which has effectively halted the government's efforts to address Metro Manila's mounting garbage problem. x x x As long as petitioners refuse to deal with private respondents, the Metro Manila garbage problem will only continue to worsen. xxx That the Amended Agreement could have well been negotiated, if not concluded between private respondents and the former MMDA administration, is not far-fetched. Petitioners do not dispute that the President had referred the Jancom contract to then MMDA Chairman Benjamin Abalos for recommendation. Petitioners also do not dispute that private respondents negotiated with the MMDA for the amendment of the contract. Besides, the Amended Agreement does not veer away from the original Jancom contract. x x x[58] The Amended Agreement was, as petitioners correctly allege, merely a draft document containing the proposals of JANCOM, subject to the approval of the MMDA. As earlier stated, it was not signed by the parties.[59] The original contract itself provides in Article 17.6 that it "may not be amended except by a written [c]ontract signed by the parties."[60] It is elementary that, being consensual, a contract is perfected by mere consent.[61] The essence of consent is the conformity of the parties to the terms of the contract, the acceptance by one of the offer made by the other;[62] it is the concurrence of the minds of the parties on the object and the cause which shall constitute the contract.[63] Where there is merely an offer by one party without acceptance by the other, there is no consent and the contract does not come into existence.[64] As distinguished from the original contract in which this Court held in G.R. No. 147465: x x x the signing and execution of the contract by the parties clearly show that, as between the parties, there was concurrence of offer and acceptance with respect to the material details of the contract, thereby giving rise to the perfection of the contract. The execution and signing of the contract is not disputed by the parties x x x,[65] the parties did not, with respect to the Amended Agreement, get past the negotiation stage. No meeting of minds was established. While there was an initial offer made, there was no acceptance. Even JANCOM President Alfonso G. Tuzon conceded, by letter[66] of June 17, 2002 to Chairman Fernando, that the Amended Agreement was a mere proposal:

Apropos to all these, we are seeking an urgent EXECUTIVE SESSION on your best time and venue. We can thresh up major points to establish a common perspective based on data and merit. We are optimistic you shall then consider with confidence the proposed Amended Contract which incorporates the adjustments we committed to as stated and earlier submitted to your Office during the incumbency of your predecessor, for evaluation and appropriate action by NEDA in compliance with the BOT Law and Article 18.1.1 of our contract.[67] While respondents aver that an acceptance was made, they have not proffered any proof. While indeed the MMDA, by a letter[68] issued by then MMDA General Manager Jaime Paz, requested then Secretary of Justice Hernando B. Perez for his legal opinion on the draft Amended Agreement, nowhere in the letter is there any statement indicating that the MMDA, or the Republic of the Philippines for that matter, had approved respondents' proposals embodied in the said draft agreement. The pertinent portions of the letter read: Attention: HON. HERNANDO B. PEREZ Secretary Subject: Request for Opinion Regarding the Compromise Offer of Jancom Environmental Corporation for the Municipal Solid Waste Management of Metro Manila Dear Secretary Perez: This is to respectfully request for an opinion from your Honorable Office regarding the Compromise Proposal offered by JANCOM Environmental Corporation ("JANCOM") in relation to its Contract for the BOT Implementation of the WasteManagement Project for the San Mateo, Rizal Waste Disposal Site dated 19 December 1997 (hereinafter referred to as the BOT Contract for brevity) with the Republic of the Philippines. xxxx x x x this representation is requesting your Honorable Office to render a legal opinion on the following: Does the offer of JANCOM to temporarily set aside the waste-to-energy plant and implement only the other two major components of the BOT Contract amount to a novation of the BOT Contract, and therefore necessitating a re-bidding? If the same does not amount to a novation, by what authority may Jancom set aside temporarily a major component of the BOT Contract? x x x x[69] Only an absolute or unqualified acceptance of a definite offer manifests the consent necessary to perfect a contract.[70] If at all, the MMDA letter only shows that the parties had not gone beyond the preparation stage, which is the period from the start of the negotiations until the moment just before the agreement of the parties.[71] Obviously, other material considerations still

remained before the Amended Agreement could be perfected. At any time prior to the perfection of a contract, unaccepted offers and proposals remain as such and cannot be considered as binding commitments.[72] Respecting petitioners' argument that respondents should be directed to comply with their commitments under Article 18 of the contract, this Court is not convinced. Article 18.2.1 of the contract provides: 18.2.1 The BOT COMPANY hereby undertakes to provide the following within 2 months from execution of this Contract as an effective document: a) sufficient proof of the actual equity contributions from the proposed shareholders of the BOT COMPANY in a total amount not less than PHP 500,000,000 in accordance with the BOT Law and the implementing rules and regulations; b) sufficient proof of financial commitment from a lending institution sufficient to cover total project cost in accordance with the BOT Law and the implementing rules and regulations; c) to support its obligation under this Contract, the BOT COMPANY shall submit a security bond to the CLIENT in accordance with the form and amount required under the BOT Law. (Underscoring supplied) As this Court held in G.R. No. 147465: As clearly stated in Article 18, JANCOM undertook to comply with the stated conditions within 2 months from execution of the Contract as an effective document. Since the President of the Philippines has not yet affixed his signature on the contract, the same has not yet become an effective document. Thus, the two-month period within which JANCOM should comply with the conditions has not yet started to run. x x x[73] (Underscoring supplied) A final point. The argument raised against the authority of Atty. Molina to file respondents' Omnibus Motion before the RTC does not lie. Representation continues until the court dispenses with the services of counsel in accordance with Section 26, Rule 138 of the Rules of Court.[74] No substitution of counsel of record is allowed unless the following essential requisites concur: (1) there must be a written request for substitution; (2) it must be filed with the written consent of the client; (3) it must be with the written consent of the attorney to be substituted; and (4) in case the consent of the attorney to be substituted cannot be obtained, there must be at least a proof of notice that the motion for substitution was served on him in the manner prescribed by the Rules of Court.[75] In the case at bar, there is no showing that there was a valid substitution of counsel at the time Atty. Molina filed the Omnibus Motion on July 29, 2002 before the RTC, nor that he had priorly filed a Withdrawal of Appearance. He thus continued to enjoy the presumption of authority granted to him by respondents. While clients undoubtedly have the right to terminate their relations with their counsel and effect a substitution or change at any stage of the proceedings, the exercise of such right is subject to compliance with the prescribed requirements. Otherwise,

no substitution can be effective and the counsel who last appeared in the case before the substitution became effective shall still be responsible for the conduct of the case.[76] The rule is intended to ensure the orderly disposition of cases.[77] In the absence then of compliance with the essential requirements for valid substitution of the counsel of record, Atty. Molina enjoys the presumption of authority granted to him by respondents. In light of the foregoing disquisition, a discussion of the other matters raised by petitioners has been rendered unnecessary. WHEREFORE, the petition is GRANTED. The Decision dated December 19, 2003 and Resolution dated May 11, 2004 of the Court of Appeals in CA-G.R. SP No. 78752 are REVERSED and SET ASIDE. The June 11, 2003 Order of the Regional Trial Court of Pasig, Branch 68 in SCA No. 1955 is declared NULL and VOID.

24. LT. COL. RODRIGO S. DE GUZMAN and PEOPLE OF THE PHILIPPINES, petitioners, vs. MUNICIPAL CIRCUIT JUDGE
MARCELINO M. ESCALONA, FLORENTINO RODRIGO, and MARIANO DAYDAY, respondents. G.R. No. L-51773 | 1980-05-16

In this original Petition for Certiorari, which was given due course in our Resolution of February 6, 1980, the sole question to be resolved is whether or not respondent Municipal Circuit Court Judge, in Criminal Case No. 2450-D, had jurisdiction to try the offense charged and render judgment although the criminal Complaint which was filed before him was only for preliminary investigation. The Complaint charged the accused Florentino Rodrigo and Mariano Dayday with "Illegal Possession of Explosive locally known as 'dinamita' (P.D. No. 1058)" before the Third Municipal Circuit Court at Daanbantayan, Medellin, Cebu (Crim. Case No. 2450D), and reads as follows: "That on the 20th day of July, 1979 at around 9:00 o'clock in the morning, more or less, at Sitio Suba, Bgy Maya, Municipality of Daanbantayan, Province of Cebu, Philippines, and within the Preliminary Jurisdiction of this Honorable Court, the above-named accused while in the seawaters of the above-mentioned place, confederating and mutually helping with one another, without authority of the law and without proper permit from authorities, did then and there willfully, unlawfully, and feloniously possess, keep an explosive, locally known as 'DINAMITA' in their banca purposely for use of illegal fishing in which case, three (3) bottles of explosives, two (2) paddles, two (2) fishnets locally known as 'SIBOT'' and one (1) banca were recovered from their possession and control, which acts of the above-named accused is a gross violation of PD No. 1058. "All contrary to law." 1 The Complaint was precipitated by the fact, as disclosed by the Sworn Statements of CIC Carlos Dosdos and Sgt. Jose Andales 2 that when they conducted a seaborne patrol along Daanbantayan, Cebu, in the morning of July 20, 1979, they spotted the accused Florentino Rodrigo and Mariano Dayday aboard a banca. As they approached the banca, Rodrigo attempted to light a bottle of dynamite but which they succeeded in stopping. Both accused were arrested and three bottles of dynamite and two fishnets were confiscated from them. Instead of conducting a preliminary investigation, respondent Judge motu proprio treated the Complaint as one for Violation of

Act 3023 3 and, therefore, within its jurisdiction, since the offense charged did not warrant prosecution under Presidential Decree No. 9 relating to crimes against national security. He then proceeded to arraign the accused both of whom pleaded guilty, and rendered judgment on August 6, 1979, quoted in full hereunder: "DECISION "This case was originally filed in violation of Section 2 of PD No. 9, but is prosecuted under Act 3023 upon suggestion of the Court, for under the facts and circumstances of this case the interests of justice require that this offense be prosecuted under Act 3023 inasmuch as the possession is not in connection with subversion or insurrection and that the quantity and quality of the homemade explosive do not come to the level of destructiveness contemplated under PD No. 9 "Upon arraignment, both accused entered a plea of guilty. In view thereof, the Court hereby renders a decision finding anddeclaring above two accused GUILTY beyond reasonable doubt of the offense of Illegal Possession of Explosive at the time and place stated in the complaint, in violation of Act 3023, and they are thereby sentenced to suffer a penalty consisting of imprisonment for four (4) months and fine of P1,000.00 each, in accordance with the penal provisions of said Act, and to pay the costs. "Apprehended explosives contained in two (2) beer bottles are confiscated and ordered turned over to the 342nd PC Company, Bogo, Cebu, for proper disposal. "SO ORDERED." 4 Both the accused have served their sentence. Contesting the course of action taken and the judgment rendered by respondent Judge, herein petitioner Lt. Col. Rodrigo S. De Guzman, PC Provincial Commander Integrated National Police Superintendent at Camp Sotero Cabahug, Cebu City, instituted these Certiorari proceedings alleging mainly that the offense charged was one for possession of explosives intended for illegal fishing under Presidential Decree No. 704, as amended by Presidential Decree No. 1058, and not for violation of Act 3023 which had long been repealed by several laws and decrees; that the penalty provided for by current legislation is one which falls within the exclusive original jurisdiction of the Court of First Instance; and that respondent Judge's Decision has no legal basis. For his part, respondent Judge submits that only possession of explosives in connection with subversion is covered by Presidential Decree No. 9, thus, the old law on illegal possession of explosives, Act 3023, has not been completely repealed; that having found that the possession by the two accused of two bottles of home-made explosives was solely for fishing purposes and had no connection with subversion, the illegal act should fall not under Presidential Decree No. 9 but under Act 3023; that having arrived at said conclusion there was nothing irregular in his assuming original jurisdiction and not merely conducting the second stage of the preliminary investigation, for under Section 87 (c) of the Judiciary Act the Municipal Court has jurisdiction over illegal possession of explosives. Respondent Judge further justifies his course of action as being in the interest of the speedy and inexpensive administration of justice. The accused, Florentino Rodrigo and Mariano Dayday, whom we ordered impleaded as party respondents, filed their Comment on the Petition, stating that they freely and voluntarily entered a plea of guilty with the able assistance of counsel; that before handing down the Decision, respondent Judge made them understand the nature and gravity of their crime; that even the state

prosecutors showed their conformity and appreciation for the wisdom and practicality of the judgment of respondent Judge; and that they appreciated the sentence imposed on them because they did not contemplate to commit so grave an offense, the two bottles of confiscated explosives being adulterated and not of genuine quality, and considering that they are illiterates and ignorant of the destructive use of these explosives. Significantly, the Solicitor General representing the People of the Philippines and whom we likewise ordered impleaded as party petitioner, has joined petitioner De Guzman in assailing the validity of the action taken by respondent Judge in the criminal case before him. We find this Petition, indeed, impressed with merit and that respondent Judge exceeded his jurisdiction when he rendered the questioned Decision of August 6, 1979. The complaint filed against the two accused specifically alleged that they wilfully and unlawfully possessed in their banca explosives locally known as "dinamita" purposely intended for use in illegal fishing in violation of Presidential Decree No. 1058. Presidential Decree No. 1058 is an amendatory decree, which increased the penalties for certain forms of illegal fishing and for other acts made punishable under Presidential Decree No. 704 or the "Fisheries Decree of 1975". The pertinent portion of Section 33 of Presidential Decree No. 704, as amended by Presidential Decree No. 1058 reads: Sec. 33. Illegal fishing; illegal possession of explosives intended for illegal fishing; dealing in illegally caught fish or fishery/aquatic products. - It shall be unlawful for any person to catch, take or gather or cause to be caught taken gathered fish or fishery/aquatic products in Philippine waters with the use of explosives, obnoxious or poisonous substance, or by the use of electricity as defined in paragraphs (1), (m) and (d), respectively, of Section 3 hereof: Provided, that possession of such explosives with intent to use the same for illegal fishing as herein defined shall be punishable as herein after provided: . . ." Section 38, subsection a (1) of Presidential Decree No. 704, as amended by Presidential Decree No. 1058, correspondingly provides: "(1) By the penalty of imprisonment ranging from twelve (12) years to twenty five (25) years in the case of mere possession of explosives intended for illegal fishing; . . . ." As correctly pointed out by the Solicitor General in the Comment he filed for petitioner People of the Philippines, respondent Judge's reference to Presidential Decree No. 9 is misplaced for, indeed, there is no mention at all of, nor any reference to, Presidential Decree No. 9 in the Complaint. Jurisdiction over cases involving illegal possession of explosives intended for illegal fishing and certain other acts prohibited under Presidential Decree No. 704, which was vested by Section 5 of Presidential Decree No. 1058 upon Military Tribunals created under Presidential Decree No. 39, as amended, 5 is now within the exclusive original jurisdiction of Courts of First Instance by virtue of Letter of Instructions No. 772 dated November 27, 1978, issued by the President of the Philippines, 6 and the Rules and Regulations implementing LOI No. 772 promulgated in the Joint Circular, dated April 1, 1979, issued by the

Minister of National Defense 7 , in relation to the Judiciary Act of 1948 as amended, in view of the penalty involved. Since the purpose of preliminary investigation proper is to determine whether or not the accused should be released or held for trial before the competent Court 8 the only jurisdiction of a Municipal Judge at the preliminary investigation proper, where the offense charged does not full within the jurisdiction of the Municipal Court, is either to elevate the case to the proper Court with his findings on preliminary investigation or, in the absence of probable cause to believe an accused guilty, to dismiss the case. He cannot decide the case on the merits and if he does, he acts without jurisdiction. 9 The duty of a Municipal Judge conducting the preliminary investigation when the offense charged does not fall within his Court's jurisdiction is only to determine whether or not the evidence presented support prima facie the allegations of fact contained in the complaint, but he has no legal authority to determine the character of the crime and his declaration upon that point can only be regarded as an expression of opinion in no wise binding on the trial Court." 10 Therefore, it was erroneous for respondent Judge at the preliminary investigation of the criminal complaint filed before him for the specific offense of illegal possession of explosives intended for illegal fishing under Presidential Decree No. 704, as amended by Presidential Decree No. 1058, to have rendered judgment and to have convicted the accused for illegal possession of explosives under Act No. 3023 considering that his Court had no jurisdiction over the offense charged in the Complaint, and, hence, was bereft of authority to deter mine the character of the crime committed. His only jurisdiction was to elevate or dismiss the case. He could not decide the case on the merits. Considering that the Municipal Circuit Court lacked competent jurisdiction over the subject matter of the criminal complaint against the accused respondents, we agree with the Solicitor General that no jeopardy may be deemed to have attached by virtue of the erroneous and void judgment of conviction rendered by respondent Judge as to bar a subsequent indictment and trial of the case in the proper Court with jurisdiction over the offense. WHEREFORE, we hereby set aside the Decision of August 6, 1979 rendered by respondent Judge Marcelino M. Escalona of the Municipal Circuit Court of Medellin, Cebu, and remand this case to him for preliminary investigation in accordance with law and the Rules. Without costs. SO ORDERED.

25. Laguna Lake Development Authority v. CA

G.R. Nos. 120865-71, December 7, 1995 Hermosisima Jr., J.

Facts: RA 4850 was enacted creating the "Laguna Lake Development Authority." This agency was supposed to accelerate the development and balanced growth of the Laguna Lake area and the surrounding provinces, cities and towns, in the act, within the context of the national and regional plans and policies for social and economic development. PD 813 amended certain sections RA 4850 because of the concern for the rapid expansion of Metropolitan Manila, the suburbs and the lakeshore towns of Laguna de Bay, combined with current and prospective uses of the lake for municipalindustrial water supply, irrigation, fisheries, and the like.

To effectively perform the role of the Authority under RA 4850, the Chief Executive issued EO 927 further defined and enlarged the functions and powers of the Authority and named and enumerated the towns, cities and provinces encompassed by the term "Laguna de Bay Region". Also, pertinent to the issues in this case are the following provisions of EO 927 which include in particular the sharing of fees: Sec 2: xxx the Authority shall have exclusive jurisdiction to issue permit for the use of all surface water for any projects or activities in or affecting the said region including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and the like. SEC. 3. Collection of Fees. The Authority is hereby empowered to collect fees for the use of the lake water and its tributaries for all beneficial purposes including but not limited to fisheries, recreation, municipal, industrial, agricultural, navigation, irrigation, and waste disposal purpose; Provided, that the rates of the fees to be collected, and the sharing with other government agencies and political subdivisions, if necessary, shall be subject to the approval of the President of the Philippines upon recommendation of the Authority's Board, except fishpen fee, which will be shared in the following manner: 20 percent of the fee shall go to the lakeshore local governments, 5 percent shall go to the Project Development Fund which shall be administered by a Council and the remaining 75 percent shall constitute the share of LLDA. However, after the implementation within the three-year period of the Laguna Lake Fishery Zoning and Management Plan the sharing will be modified as follows: 35 percent of the fishpen fee goes to the lakeshore local governments, 5 percent goes to the Project Development Fund and the remaining 60 percent shall be retained by LLDA; Provided, however, that the share of LLDA shall form part of its corporate funds and shall not be remitted to the National Treasury as an exception to the provisions of Presidential Decree No. 1234. Then came Republic Act No. 7160. The municipalities in the Laguna Lake Region interpreted the provisions of this law to mean that the newly passed law gave municipal governments the exclusive jurisdiction to issue fishing privileges within their municipal waters because R.A. 7160 provides: Sec. 149. Fishery Rentals; Fees and Charges (a) Municipalities shall have the exclusive authority to grant fishery privileges in the municipal waters and impose rental fees or charges therefor in accordance with the provisions of this Section. Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen permits. Big fishpen operators took advantage of the occasion to establish fishpens and fishcages to the consternation of the Authority. Unregulated fishpens and fishcages occupied almost one-third the entire lake water surface area, increasing the occupation drastically from 7,000 ha in 1990 to almost 21,000 ha in 1995. The Mayor's permit to construct fishpens and fishcages were all undertaken in violation of the policies adopted by the Authority on fishpen zoning and the Laguna Lake carrying capacity. In view of the foregoing circumstances, the Authority served notice to the general public that: 1. All fishpens, fishcages and other aqua-culture structures in the Laguna de Bay Region, which were not registered or to which no application for registration and/or permit has been filed with Laguna Lake Development Authority as of March 31, 1993 are hereby declared outrightly as illegal. All fishpens; fishcages and other aqua-culture structures so declared as illegal shall be subject to demolition which shall be undertaken by the Presidential Task Force for illegal Fishpen and Illegal Fishing. Owners of fishpens, fishcages and other aqua-culture structures declared as illegal shall, without prejudice to demolition of their structures be criminally charged in accordance with Section 39-A of Republic Act 4850 as amended by P.D. 813 for violation of the same laws. Violations of these laws carries a penalty of imprisonment of not exceeding 3 years or a fine not exceeding Five Thousand Pesos or both at the discretion of the court. All operators of fishpens, fishcages and other aqua-culture structures declared as illegal in accordance with the foregoing Notice shall have one (1) month on or before 27 October 1993 to show cause before the LLDA why their said fishpens, fishcages and other aqua-culture structures should not be demolished/dismantled.

2.

3.

One month, thereafter, the Authority sent notices to the concerned owners of the illegally constructed fishpens, fishcages and other aqua-culture structures advising them to dismantle their respective structures within 10 days from receipt thereof, otherwise, demolition shall be effected. The fishpen owners filed injunction cases against the LLDA. The LLDA filed motions to dismiss the cases against it on jurisdictional grounds. The motions to dismiss were denied. Meanwhile, TRO/writs of preliminary mandatory injunction were issued enjoining the LLDA from demolishing the fishpens and similar structures in question. Hence, the present petition for certiorari, prohibition and injunction. The CA dismissed the LLDAs consolidated petitions. It ruled that (A) LLDA is not amo ng those quasi-judicial agencies of government appealable only to the Court of Appeals; (B) the LLDA charter does vest LLDA with quasi-judicial functions insofar as fishpens are concerned; (C) the provisions of the LLDA charter insofar as fishing privileges in Laguna de Bay are concerned had been repealed by the Local Government Code of 1991; (D) in view of the aforesaid repeal, the power to grant permits devolved to respective local government units concerned. Issue: Which agency of the Government - the LLDA or the towns and municipalities comprising the region - should exercise jurisdiction over the Laguna Lake and its environs insofar as the issuance of permits for fishery privileges is concerned? Held: LLDA. Section 4 (k) of RA 4850, the provisions of PD 813, and Section 2 of EO 927, specifically provide that the LLDA shall have exclusive jurisdiction to issue permits for the use or all surface water for any projects or activities in or affecting the said region, including navigation, construction, and operation of fishpens, fish enclosures, fish corrals and the like. On the other hand, RA 7160 has granted to the municipalities the exclusive authority to grant fishery privileges in municipal waters. The Sangguniang Bayan may grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry area within a definite zone of the municipal waters. The provisions of RA7160 do not necessarily repeal the laws creating the LLDA and granting the latter water rights authority over Laguna de Bay and the lake region. The Local Government Code of 1991 does not contain any express provision which categorically expressly repeal the charter of the Authority. It has to be conceded that there was no intent on the part of the legislature to repeal Republic Act No. 4850 and its amendments. The repeal of laws should be made clear and expressed. It has to be conceded that the charter of the LLDA constitutes a special law. RA 7160 is a general law. It is basic is basic in statutory construction that the enactment of a later legislation which is a general law cannot be construed to have repealed a special law. It is a well-settled rule in this jurisdiction that "a special statute, provided for a particular case or class of cases, is not repealed by a subsequent statute, general in its terms, provisions and application, unless the intent to repeal or alter is manifest, although the terms of the general law are broad enough to include the cases embraced in the special law." Where there is a conflict between a general law and a special statute, the special statute should prevail since it evinces the legislative intent more clearly that the general statute. The special law is to be taken as an exception to the general law in the absence of special circumstances forcing a contrary conclusion. This is because implied repeals are not favored and as much as possible, given to all enactments of the legislature. A special law cannot be repealed, amended or altered by a subsequent general law by mere implication. Considering the reasons behind the establishment of the Authority, which are enviromental protection, navigational safety, and sustainable development, there is every indication that the legislative intent is for the Authority to proceed with its mission. We are on all fours with the manifestation of LLDA that "Laguna de Bay, like any other single body of water has its own unique natural ecosystem. The 900 km lake surface water, the 8 major river tributaries and several other smaller rivers that drain into the lake, the 2,920 km2 basin or watershed transcending the boundaries of Laguna and Rizal provinces, constitute one integrated delicate natural ecosystem that needs to be protected with uniform set of policies; if we are to be serious in our aims of attaining sustainable development. This is an exhaustible natural resource-a very limited one-which requires judicious management and optimal utilization to ensure renewability and preserve its ecological integrity and balance. Managing the lake resources would mean the implementation of a national policy geared towards the protection, conservation, balanced growth and sustainable development of the region with due regard to the inter-generational use of its resources by the inhabitants in this part of the earth. The authors of Republic Act 4850 have foreseen this need when they passed this LLDA law-the special law designed to govern the management of our Laguna de Bay lake resources. Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies where lakeshore local government units exercise exclusive

dominion over specific portions of the lake water. The implementation of a cohesive and integrated lake water resource management policy, therefore, is necessary to conserve, protect and sustainably develop Laguna de Bay." The power of the LGUs to issue fishing privileges was clearly granted for revenue purposes. This is evident from the fact that Section 149 of the New Local Government Code empowering local governments to issue fishing permits is embodied in Chapter 2, Book II, of Republic Act No. 7160 under the heading, "Specific Provisions On The Taxing And Other Revenue Raising Power of LGUs. On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other aqua-culture structures is for the purpose of effectively regulating and monitoring activities in the Laguna de Bay region and for lake quality control and management. 6 It does partake of the nature of police power which is the most pervasive, the least limitable and the most demanding of all State powers including the power of taxation. Accordingly the charter of the Authority which embodies a valid exercise of police power should prevail over the Local Government Code of 1991 on matters affecting Laguna de Bay. There should be no quarrel over permit fees for fishpens, fishcages and other aqua-culture structures in the Laguna de Bay area. Section 3 of Executive Order No. 927 provides for the proper sharing of fees collected. In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our holding that, considering the provisions of Section 4 of Republic Act No. 4850 and Section 4 of Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna Lake Development Authority vs. Court of Appeals, there is no question that the Authority has express powers as a regulatory a quasi-judicial body in respect to pollution cases with authority to issue a "cease a desist order" and on matters affecting the construction of illegal fishpens, fishcages and other aqua-culture structures in Laguna de Bay. The Authority's pretense, however, that it is co-equal to the Regional Trial Courts such that all actions against it may only be instituted before the Court of Appeals cannot be sustained. On actions necessitating the resolution of legal questions affecting the powers of the Authority as provided for in its charter, the Regional Trial Courts have jurisdiction. In view of the foregoing, this Court holds that Section 149 of RA 7160, otherwise known as the Local Government Code of 1991, has not repealed the provisions of the charter of the LLDA, Republic Act No. 4850, as amended. Thus, the Authority has the exclusive jurisdiction to issue permits for the enjoyment of fishery privileges in Laguna de Bay to the exclusion of municipalities situated therein and the authority to exercise such powers as are by its charter vested on it.

26.

Writ Of Kalikasan

it is a legal remedy which provides for the protection one's right to 'a balanced and healthful ecology in accord with the rhythm and harmony of nature' as provided for in Section 16, Article II of the 1987 Philippine Constitution. The writ is a remedy available to a natural or juridical person, entity authorized by law, people's organization, nongovernmental organization, or any public interest group accredited by or registered with any government agency, on behalf of persons whose constitutional right to a balanced and healthful ecology is violated, or threatened with violation by an unlawful act or omission of a public official or employee, or private individual or entity, involving environmental damage of such magnitude as to prejudice the life, health or property of inhabitants in two or more cities or provinces. [Section 1, Rule 7 of the Rules of Procedure for Environmental Cases, A.M. No. 09-6-8-SC: effective April 29, 2010] West Tower residents file petition for writ of kalikasan vs FPIC ANDREO CALONZO, GMA NewsNovember 12, 2010 8:15pm (Update 2 - 10:57 p.m.) Residents of the West Tower condominium in Makati on Friday filed a petition for writ of kalikasan (nature) before the Supreme Court (SC) against the officials of the company which owns and operates the pipeline that caused an oil leak near their residential area.

The residents, through lawyer Lorna Kapunan, filed the petition for the writ against 45 officials of the First Philippine Industrial Corp. (FPIC) before the high court at 5:37 Friday.

In the 36-page petition, the residents asked the SC to direct FPIC to permanently shut down and replace the damaged pipeline.

Kapunan explained that the residents wanted the pipeline to be permanently closed because it poses a potential environmental and security threat " not only to the condominiums occupants but also to people living in areas under which the 117-kilometer pipeline runs.

This is going to be extremely dangerous for the West Tower. This is not a question of plugging of the leaks... It has affected not just West Tower residents, but a lot of other cities and provinces as well," she told reporters after filing the petition on Friday.

The residents likewise urged the high court to compel the pipelines operator to rehabilitate and restore the environment" affected by the oil leak, and to open a special trust fund to answer for similar incidents in the future.

We want them *FPIC officials+ to start accepting that they are wrong, and not to fool the media that there were no health and safety violations," Kapunan said.

She added that the FPIC violated a number of environmental laws, including the Clean Air Act and the Clean Water Act, because of its negligence" in operating the damaged pipeline.
WEST TOWER CONDOMINIUM CORPORATION, ON BEHALF OF THE RESIDENTS OF WEST TOWER CONDO., AND IN REPRESENTATION OF BARANGAY BANGKAL, AND OTHERS, INCLUDING MINORS AND GENERATIONS YET UNBORN V. FIRST PHILIPPINE INDUSTRIAL CORPORATION, FIRST GEN CORPORATION AND THEIR RESPECTIVE BOARD OF DIRECTORS AND OFFICERS, JOHN DOES AND RICHARD ROES Sirs/Mesdames: Please take notice that the Court en banc issued a Resolution dated NOVEMBER 22, 2011, which reads as follows:
c ralaw

"G.R. No. 194239 (West Tower Condominium Corporation, on behalf of the Residents of West Tower Condo., and in representation of Barangay Bangkal, and others, including minors and generations yet unborn v. First Philippine Industrial Corporation, First Gen Corporation and their respective Board of Directors and Officers, John Does and Richard Roes) RESOLUTION I On April 15, 2011, the Court conducted an ocular inspection on the two (2) other alleged leaks in the White Oil Pipeline (WOPL) of the First Philippine Industrial Corporation (FPIC) in the vicinity of Gen. Capinpin and Gen. Del Pilar Streets near the West Tower Condo. The representatives of the parties, the University of the Philippines-National Institute of Geological Sciences (UP-NIGS), the UP Institute of Civil Engineering (UPICE) and Department of Energy (DOE) Undersecretary Atty. Jose M. Layug, Jr. participated in said ocular inspection. It was proved in the ocular inspection that there were no additional leaks in the WOPL of FPIC.

opinion or recommendations on the propriety of temporarily lifting the Writ of Kalikasan/Temporary Environment Protection Order (TEPO) to allow FPIC to conduct the pressure controlled leak tests to check the structural integrity of the WOPL for the duration of more or less 24 hours. Consequently, on April 25, 2011, the UP-NIGS submitted its Report recommending, inter alia, that FPIC be allowed to do the pressure controlled leak tests. After asking for and receiving the test protocols undertaken by FPIC and clarification on testing protocols ASME B 31.4 IN Section 437.4.1 (c) and ASME B 31.4 relative to the standard API RP 1110, the UPICE, on October 3, 2011, submitted, in lieu of a Report, a Joint Manifestation with the DOE urging that FPIC be allowed to conduct the pressure controlled leak tests which, they opined, should be conducted in the presence of SGS Philippines, Inc., the certified leak test company commissioned by the DOE. It must be recalled that, on January 3, 2011, respondent FPIC filed an Urgent Motion (to Temporarily Lift Writ of Kalikasan/TEPO) in order to conduct pressure controlled leak tests to check the structural integrity of the pipeline for the duration of more or less 24 hours. The proposed test entails running a scraper pig to eliminate air gaps within the pipeline prior to the conduct of said pressure controlled leak test. The test was recommended by the international technical consultant of the DOE which directed FPIC through a December 20, 2010 letter to conduct said test. On January 24, 2011, petitioners filed their Comment/Opposition (on the Urgent Motion to Temporarily Lift Writ of Kalikasan/TEPO), arguing that the pressure controlled leak test will only determine whether there are existing leaks in the pipeline but does not address the Court-directed determination of the structural integrity of the whole pipeline. Considering the unanimous recommendation of the UP-NIGS, UPICE and DOE, we find the urgent motion of FPIC impressed with merit. The pressure controlled leak test is part and parcel of FPIC's effort to check the structural integrity of its WOPL. This is consonant with the DOE directive embodied in its December 20, 2010 letter to FPIC. Besides, petitioners really have no serious opposition to the conduct of the tests, except their opinion that said tests are not adequate to determine the structural integrity of the WOPL. WHEREFORE, finding the urgent motion to temporarily lift the TEPO on the WOPL to beMERITORIOUS, the TEPO issued on November 19, 2010 is hereby TEMPORARILY LIFTED for theDURATION of NOT MORE THAN 48 HOURS ONLY from the start of the proposed test runs and ONLY FOR THE DURATION OF SAID TESTS in order for FPIC to conduct the tests for purposes of checking the structural integrity of the WOPL. As recommended, the tests should be conducted in the presence of the parties or their representatives, SGS Philippines, Inc., the representatives of the UP-NIGS and the UPICE. Accordingly, FPIC is DIRECTED to COORDINATE with SGS Philippines, Inc., the UP-NIGS and the UPICE on the conduct of the tests. FPIC and First Gen Corporation shall each pay one-half (1/2) of the fees of the experts. FPIC is likewise DIRECTED to INFORM the DOE and other concerned agencies of the government on the conduct of the test runs. SO ORDERED. II The preliminary conference was conducted on March 24, 2011 pursuant to Sec. 11, Rule 7 of the Rules of Procedure for Environmental Cases. In the meantime, pending resolution are the following pleadings: (a) Omnibus Motion filed by petitioners assailing the Court's May 31, 2011 Resolution which clarified that the November 19, 2010 TEPO covers only the White Oil Pipeline (WOPL); (b) Manifestation (Re: Current Developments) with Omnibus Motion also filed by petitioners; and (c) Urgent Motion for Leave (To Undertake "Bangkal Realignment" Project) filed by FPIC. The parties were directed to submit their respective comments on the foregoing incidents.
cra law

In order to expedite the subsequent hearings of the instant case and the resolution of the pending incidents, there is a need to refer the instant petition to the Court of Appeals (CA). The CA shall conduct the subsequent hearings within a 60-day period, require the parties to file their respective memoranda, and submit its report and recommendation within 30 days after the receipt of the memoranda.

WHEREFORE, the CA is DIRECTED to CONDUCT the SUBSEQUENT HEARINGS of the petition pursuant to Rule 7 of the Rules of Procedure for Environmental Cases which shall not exceed 60 days from its initial hearing, and to SUBMIT its REPORT and RECOMMENDATION within 30 days from submission of the memoranda of the parties. It shall likewise resolve the pending incidents after all the parties shall have submitted their respective Comments. III Acting on the Letter dated November 16, 2011 of Christine Glaisa Po of Sycip Salazar Hernandez & Gatmaitan Law Office, SyCip Law Center, 105 Paseo De Roxas, 1226 Makati City, requesting for copies of the material pleadings and court orders in this case, the Court Resolves to DENY the request with respect to pleadings because a non-party is not entitled thereto. Acting on the Letter dated November 21, 2011 of Atty. Ryan V. Romero of Kapunan Garcia & Castillo Law Offices, counsel for West Tower Condominium Corporation, requesting for copies of the following documents, the Court Resolves to (a) GRANT the request, subject to payment of the appropriate fees and (b) ADVISE said counsel to COORDINATE with the Office of the Clerk of Court En Banc on the matter, thus:
cralaw

(1) Report submitted by the UPICE and UP-NIGS pursuant to the ocular inspection conducted on April 15, 2011; and (b) Testing protocols submitted by FPIC pursuant to the Resolution dated May 31, 2011." Carpio, J., no part. Brion, J., on leave. Abad and Villarama, Jr., JJ., no part.

EN BANC [G.R. No. 195482 : June 21, 2011] ELIZA M. HERNANDEZ, ET AL. V. PLACER DOME, INC. "G.R. No. 195482 (ELIZA M. HERNANDEZ, ET AL. v. PLACER DOME, INC.) Nota Bien: If you were to search this case using the above-cited G.R. No., you will see a mere resolution of the Court without any defined statement of facts, issues or ruling. So what I did was to research on the factual antecedents which culminated into this petition. Please, verify it if you cannot understand the following discussions. Antecedent Facts: Placer Dome is the parent corporation of Marcopper Mining Company. It is engaged in the mining operations in Marinduque from 1964 1997. In May 2006, Placer Dome merged with Barrick Gold Corporation, a foreign entity. In March 1996, the disaster came about. A fracture in the drainage tunnel of a large pit containing leftover mine tailings led to a discharge of toxic mine waste into the Makulapnit-Boac river system and caused flash floods in areas along the river. Barangay Hinapulan, was buried in six feet of muddy floodwater, causing damage to people and their families, as well as livestock, marine resources and maritime life. Placer Dome entered into a contract with then President Fidel V. Ramos to rehabilitate the waters of Marinduque. It did not reach fruition. Start of Court Process: In 2011, three residents of Marinduque, Eliza M. Hernandez, Mamerto M. Lanete and Godofredo L. Manoy, represented by Father Joaquin Bernas, filed a petition for writ of kalikasan. In their petition, they argued that said Placer Dome should be held

27.

liable for expelling some 2 million cubic meters of toxic industrial waste into the Boac river when a drainage plug holding toxic mining waste from its operations ruptured. The writ of Kalikasan was granted. In March 2011, the Court issued a resolution which referred the case to the Court of Appeals for hearing, reception of evidence, and rendition of judgment. CA then issued a resolution requiring the petitioners to issue a sub poena against Placer Dome. Issue: After receiving the resolution issued by CA, Barrick Gold, currently the owner of Placer Dome, filed a Clarificatory Manifestation to clarify which court exercises jurisdiction over the case in order to shed light to the procedural paths available to the parties. Supreme Court Resolution Pursuant to Section 3, Rule VII of the Rules of Procedure for Environmental Cases, petitions for the Writ of Kalikasan "shall be filed with the Supreme Court or with any of the stations of the Court of Appeals." It was in consonance with this provision that, on 8 March 2011, the Court issued the Resolution which, after granting the Writ of Kalikasan sought by petitioners, referred the case to the CA for hearing, reception of evidence and rendition of judgment. Considering said referral of the case to the CA, its re-docketing of the petition as CA-G.R. SP No. 00001 and its conduct of proceedings relative thereto, it is imperative that the various motions and incidents filed by the parties, together with the entire records of the case, be likewise referred to said Court in observance of the doctrine of hierarchy of courts and in the interest of the orderly and expeditious conduct of the proceedings in the case.

28. see download 29. see download