Professional Documents
Culture Documents
DOCTRINE
The Presidential Warranty cannot, in any manner, be construed as a contractual undertaking assuring
PICOP of exclusive possession and enjoyment of its concession areas. Such an interpretation would
result in the complete abdication by the State in favor of PICOP of the sovereign power to control and
supervise the exploration, development and utilization of the natural resources in the area.
FACTS
Central Mindanao Mining and Development Corporation entered into a Mines Operating Agreement with
Banahaw Mining and Development Corporation
Pursuant to the terms of the Agreement, Banahaw Mining filed applications for Mining Lease Contracts
over the mining claims with the Bureau of Mines. On April 29, 1988, Banahaw Mining was issued a Mines
Temporary Permit authorizing it to extract and dispose of precious minerals found within its mining claims
Since a portion of Banahaw Mining's mining claims was located in petitioner PICOP's logging concession
in Agusan del Sur, Banahaw Mining and petitioner PICOP entered into a Memorandum of Agreement,
whereby, in mutual recognition of each other's right to the area concerned, petitioner PICOP allowed
Banahaw Mining an access/right of way to its mining claims
Banahaw Mining thereafter converted its mining claims to applications for Mineral Production Sharing
Agreements.
While the MPSA were pending, Banahaw Mining, on December 18, 1996, decided to sell/assign its rights
and interests over thirty-seven mining claims in favor of private respondent Base Metals Mineral
Resources Corporation (Base Metals for brevity). The transfer included mining claims held by Banahaw
Mining in its own right as claim owner, as well as those covered by its mining operating agreement with
CMMCI.
Upon being informed of the development, CMMCI, as claim owner, immediately approved the assignment
made by Banahaw Mining in favor of private respondent Base Metals, thereby recognizing private
respondent Base Metals as the new operator of its claims
On November 18, 1997, petitioner PICOP filed with the Mines Geo-Sciences Bureau (MGB), Caraga
Regional Office No. XIII an Adverse Claim and/or Opposition to private respondent Base Metals'
application on the following grounds:
I. THE APPROVAL OF THE APPLICATION AND ISSUANCE OF THE MPSA OF BASE METALS
WILL VIOLATE THE CONSTITUTIONAL MANDATE AGAINST IMPAIRMENT OF OBLIGATION
IN A CONTRACT
The Court of Appeals upheld the decision of the MAB, ruling that the Presidential Warranty of September
25, 1968 issued by then President Ferdinand E. Marcos merely confirmed the timber license granted to
PICOP and warranted the latter's peaceful and adequate possession and enjoyment of its concession
areas. It was only given upon the request of the Board of Investments to establish the boundaries of
PICOP's timber license agreement. The Presidential Warranty did not convert PICOP's timber license into
a contract because it did not create any obligation on the part of the government in favor of PICOP. Thus,
the non-impairment clause finds no application.
Neither did the Presidential Warranty grant PICOP the exclusive possession, occupation and exploration
of the concession areas covered. If that were so, the government would have effectively surrendered its
police power to control and supervise the exploration, development and utilization of the country's natural
resources.
ISSUE:
w/n the impairment of contracts apply?
HELD
No.
The guaranty is merely a collateral inducement
An examination of the Presidential Warranty at once reveals that it simply reassures PICOP of the
government's commitment to uphold the terms and conditions of its timber license and guarantees
PICOP's peaceful and adequate possession and enjoyment of the areas which are the basic sources of
raw materials for its wood processing complex. The warranty covers only the right to cut, collect, and
remove timber in its concession area, and does not extend to the utilization of other resources, such as
mineral resources, occurring within the concession.
The Presidential Warranty cannot, in any manner, be construed as a contractual undertaking assuring
PICOP of exclusive possession and enjoyment of its concession areas. Such an interpretation would
result in the complete abdication by the State in favor of PICOP of the sovereign power to control and
supervise the exploration, development and utilization of the natural resources in the area.
Asaphil vs Tuason
DOCTRINE
The allegations in Tuasons complaint do not make out a case for a mining dispute or controversy within
the jurisdiction of the DENR. The controversy falls squarely in the cognizance of the courts
FACTS
Respondent Vicente Tuason, Jr. entered into a Contract for Sale and Purchase of Perlite Ore with
Induplex, Inc., wherein Induplex agreed to buy all the perlite ore that may be found and mined in Tuasons
mining claim located in Taysa, Daraga, Albay. In exchange, Induplex will assist Tuason in securing and
perfecting his right over the mining claim.
Thereafter, Tuason executed on May 29, 1976, an Agreement to Operate Mining Claims in favor of
petitioner Asaphil Construction and Development Corporation.
Later on, Tuason filed with the Bureau of Mines, Department of Environment and Natural Resources
(DENR), a complaint against Asaphil and Induplex for declaration of nullity of the two contracts, namely,
the Contract for Sale and Purchase of Perlite Ore, and the Agreement to Operate Mining Claims. Tuason
alleged in his complaint that the stockholders of Induplex formed and organized Ibalon Mineral
Resources, Inc. (Ibalon), an entity whose purpose is to mine any and all kinds of minerals, and has in fact
been mining, extracting and utilizing the perlite ore in Ibalons mining claim; that this is in violation of the
condition imposed by the Board of Investments (BOI) on Induplex in its Joint Venture Agreement
The DENR, through the Regional Executive Director, found merit in Induplexs arguments and dismissed
the complaint.
ISSUE:
Does the DENR have jurisdiction to rule on the claim?
HELD
With regard to the issue of jurisdiction, the DENR Regional Executive Director opined that the DENR does
not have jurisdiction over the case, while the MAB ruled that the DENR has jurisdiction.
The Court upholds the finding of the DENR Regional Executive Director that the DENR does not have
jurisdiction over Tuasons complaint.
At the time of the filing of the complaint, the jurisdiction of the DENR over mining disputes and
controversies is governed by P.D. No. 1281, entitled "Revising Commonwealth Act No. 136, Creating the
Bureau of Mines, and for Other Purposes." Particularly, P.D. No. 1281 vests the Bureau of Minesof the
DENR with jurisdictional supervision and control over all holders of mining claims or applicants for and/or
grantees of mining licenses, permits, leases and/or operators thereof, including mining service contracts
and service contractors insofar as their mining activities are concerned. Under Section 7 of P.D. No. 1281,
the Bureau of Mines also has quasi-judicial powers over cases involving the following:
(a) a mining property subject of different agreements entered into by the claim holder thereof with
several mining operators;
(b) complaints from claimowners that the mining property subject of an operating agreement has
not been placed into actual operations within the period stipulated therein; and
(c) cancellation and/or enforcement of mining contracts due to the refusal of the
claimowner/operator to abide by the terms and conditions thereof.
The allegations in Tuasons complaint do not make out a case for a mining dispute or controversy within
the jurisdiction of the DENR. While the Agreement to Operate Mining Claims is a mining contract, the
ground upon which the contract is sought to be annulled is not due to Asaphils refusal to abide by the
terms and conditions of the agreement, but due to Induplexs alleged violation of the condition imposed by
the BOI in its Joint Venture Agreement with Grefco, Inc. Also, Tuason sought the nullity of the Contract for
Sale and Purchase of Perlite Ore, based on the same alleged violation. Obviously, this raises a judicial
question, which is proper for determination by the regular courts. A judicial question is raised when the
determination of the question involves the exercise of a judicial function; that is, the question involves the
determination of what the law is and what the legal rights of the parties are with respect to the matter in
controversy
Were it not for the TRO, then President Estradas instructions would have been lawfully carried out, for as
we observed in Oposa v. Factoran, the freedom of contract is not absolute.
power of judicial review to actual cases and controversies defines the role assigned to the judiciary in a
tripartite allocation of power, to assure that the courts will not intrude into areas committed to the other
branches of government.
As the petitions involve constitutional issues which are of paramount public interest or of transcendental
importance, the Court grants the petitioners, petitioners-in-intervention and intervening respondents the
requisite locus standi in keeping with the liberal stance adopted in David v. Macapagal-Arroyo.
That the subject of the information sought in the present cases is a matter of public concern faces no
serious challenge. In fact, respondents admit that the MOA-AD is indeed of public concern. In previous
cases, the Court found that the regularity of real estate transactions entered in the Register of Deeds, the
need for adequate notice to the public of the various laws, the civil service eligibility of a public employee,
the proper management of GSIS funds allegedly used to grant loans to public officials, the recovery of the
Marcoses' alleged ill-gotten wealth, and the identity of party-list nominees, among others, are matters of
public concern. Undoubtedly, the MOA-AD subject of the present cases is of public concern, involving as
it does the sovereignty and territorial integrity of the State, which directly affects the lives of the public at
large.
In sum, the Presidential Adviser on the Peace Process committed grave abuse of discretion when he
failed to carry out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No. 7160,
and Republic Act No. 8371. The furtive process by which the MOA-AD was designed and crafted runs
contrary to and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive,
arbitrary and despotic exercise thereof. It illustrates a gross evasion of positive duty and a virtual refusal
to perform the duty enjoined.
The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific provisions
but the very concept underlying them, namely, the associative relationship envisioned between the GRP
and the BJE, are unconstitutional, for the concept presupposes that the associated entity is a state and
implies that the same is on its way to independence.
The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli Agreement on
Peace of 2001 is declared contrary to law and the Constitution.