Miners Association of the PH v.
Factoran, Sec of DENR
Jan. 16, 1995 | Romero | Police Power
PETITIONERS: Miners of Association of the PH, Inc.
RESPONDENTS: Hon. Fulgencio S. Factoran, Secretary of DENR and Joel D.
Muyco, Director of Mines and Geosciences Bureau
SUMMARY:
Petitioner in the case at bar challenges the validity of Administrative Order Nos.
57 and 82 issued by the Sec. of the DENR to carry out the provisions of certain
Executive Orders issued by the President. The contention of petitioner is that both
Admin Orders violate the constitutional prohibition on non-impairment of
contracts on the ground that Admin Order No. 57 unduly pre-terminates existing
mining leases and other mining agreements, and automatically converts them into
production-sharing agreements w/in one year from its [the admin order’s]
effectivity. Meanwhile, Admin Order No. 82 declares that failure to submit letters
of intent (LOI) and mineral productivity-sharing agreements w/in 2 years from its
[the admin order’s] effectivity shall cause the abandonment of their mining,
quarry, and sand-gravel permits. The issue then is W/N the challenged Admin
Orders violate the constitutional non-impairment of contract provision. The
ruling of the Court was in the negative by saying that mining leases or agreements
granted by the State are subject to alterations through a reasonable exercise of the
State’s police power. It has been previously held in jurisprudence that the
constitutional prohibition against impairing contracts is not an absolute rule and it
is not to be read w/ literal exactness. It does not prevent a proper exercise of police
power. In the case at bar, the State may not be precluded by the same constitutional
restriction on non-impairment of contracts from altering, modifying, and
amending the mining leases or agreements granted pursuant to the EO. Hence, the
petition was properly dismissed.
DOCTRINE:
N/A
FACTS:
1. This petition questions the validity of Administrative Order Nos. 57 and
82 issued by the Sec. of the DENR to carry out the provisions of certain
Executive Orders issued by the President.
2. Petitioner Miners Association contends that both Administrative Orders
violate the non-impairment of contract provision found in the 1987
Constitution on the ground that Admin Order No. 57 unduly pre-
terminates existing mining leases and other mining agreements, and
automatically converts them into production-sharing agreements w/in one
year from its [the admin order’s] effectivity. Meanwhile, Admin Order No.
82 declares that failure to submit letters of intent (LOI) and mineral
productivity-sharing agreements w/in 2 years from its [the admin order’s]
effectivity shall cause the abandonment of their mining, quarry, and sand-
gravel permits.
ISSUES:
1. W/N the challenged Admin Orders violate the constitutional non-
impairment of contract provision - NO
RATIO:
1. The Court held that well-settled is the rule that mining leases or
agreements granted by the State, such as those granted pursuant to
the Executive Order involved in this case, are subject to alterations
through a reasonable exercise of police power of the State. Citing
previous jurisprudence, it has been held that the constitutional
prohibition against impairing contracts is not an absolute rule and it
is not to be read w/ literal exactness. It does not prevent a proper
exercise of the State’s police power.
2. In the case at bar, the State may not be precluded by the same constitutional
restriction on non-impairment of contracts from altering, modifying, and
amending the mining leases or agreements granted pursuant to the EO.
 3. Police power being co-extensive w/ the necessities of the case and the
demands of public interest, extends to all vital public needs.
DISPOSITION:
Wherefore, the Court resolved to DISMISS the petition.