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HON. HEHERSON T. ALVAREZ v. PICOP RESOURCES, INC.G.R. No.

162243, December 3, 2009


Chico-Nazario, J.:
Doctrine:
A timber license is not a contract within the purview of the non-impairment clause.
Facts:
PICOP filed with the DENR an application to have its Timber License Agreement (TLA) No. 43converted
into an IFMA.PICOP filed before the (RTC) City a Petition for Mandamus
against then DENR Sec Alvarez for unlawfully refusing and/or neglecting to sign and execute the IFMA
contract of PICOP even as thelatter has complied with all the legal requirements for the automatic
conversion of TLA No. 43, asamended, into an IFMA.The cause of action of PICOP Resources, Inc.
(PICOP) in its Petition for Mandamus with the trialcourt is clear: the government is bound by contract, a
1969 Document signed by then PresidentFerdinand Marcos, to enter into an Integrated Forest
Management Agreement (IFMA) with PICOP.
Issue:
Whether the 1969 Document is a contract recognized under the non-impairment clause by which
thegovernment may be bound (for the issuance of the IFMA)
Held:
NO. Our definitive ruling in Oposa v. Factoran that a timber license is not a contract within the
purviewof the non-impairment clause is edifying. We declared:
Needless to say, all licenses may thus berevoked or rescinded by executive action. It is not a contract,
property or a property right protected bythe due process clause of the Constitution.
Since timber licenses are not contracts, the non-impairment clause, which reads: "SEC. 10. No
lawimpairing the obligation of contracts shall be passed." cannot be invoked.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 wouldresult in the
complete abdication by the State in favor of PICOP of the sovereign power to control
andsupervise the exploration, development and utilization of the natural resources in the area.

I n s t e a d , o n 2 S e p t e m b e r 2 0 0 2 , P I C O P fi l e d b e f o r e t h e Regional Trial Court (RTC) of


Q uezon Ci ty a Pe ti ti on for Mandamus against then DENR Secretary Heherson T. Alvarez to compel
the DENRSecretary to sign, execute and deliver an IFMA to PICOP, as well as to
Issue the corresponding IFMA assignment number on the area coveredb y t h e I F M A , f o r m e r l y
T L A N o . 4 3 , a s a m e n d e d ; b ) t o i s s u e t h e necessary permit allowing petitioner to act
and harvest timber fromt h e s a i d a r e a o f T L A N o . 4 3 , s u ffi c i e n t t o m e e t t h e r a w
m a t e r i a l requirements of petitioners pulp and paper mills in accordance with the warranty and
agreement of July 29, 1969 between the governmentand PICOPs predecessor-in-interest; and c) to
honor and respect theGovernment Warranties and contractual obligations to PICOP strictly
inaccordance with the warranty and agreement dated July 29, [1969] between the government
and PICOPs predecessor-in-interest. x xPICOP had tried to put a cloud of ambiguity over Section 59 of
RepublicAct No. 8371:a) Ancestral domains Subject to Section 56 hereof, refers to all areas g e n e r a l l y
b e l o n g i n g t o I C C s / I P s c o m p r i s i n g l a n d s , i n l a n d w a t e r s , coastal are as, and natural
resource s therei n, held under a claim of o w n e r s h i p , o c c u p i e d o r p o s s e s s e d b y
ICCs/IPs, by themselves orthrough their ancestors, communally or individually
s i n c e t i m e immemorial, continuously to the present except when interrupted bywar, force
majeure or displacement by force, deceit, stealth or as aconsequence of government projects
or
any
other
voluntary
dealingsentered
into
by
government
and
private
individuals/corporations, andw hi ch are ne cessary to e nsure the ir economi c, soci al and
cul tural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, and
other lands individually owned whether alienable anddi sposabl e or othe rw ise, hunti ng grounds,
burial grounds, w orship areas, bodies of water, mineral and other natural resources, and
landsw hi ch may no l onge r be excl usivel y occupie d by ICC s/IPs but from w h i c h t h e y
t r a d i t i o n a l l y h a d a c c e s s t o f o r t h e i r s u b s i s t e n c e a n d traditional activities, particularly the
home ranges of ICCs/IPs who arestill nomadic and/or shifting cultivators;Verily, in interpreting the

term "held under claim of ownership," theSupreme Court could not have meant to include
claims that had just

CHAVEZ V. PUBLIC ESTATE AUTHORITY


FACTS:
From the time of Marcos until Estrada, portions of Manila Bay were being reclaimed. A law was passed
creating the Public Estate Authority which was granted with the power to transfer reclaimed lands. Now in
this case, PEA entered into a Joint Venture Agreement with AMARI, a private corporation. Under the Joint
Venture Agreement between AMARI and PEA, several hectares of reclaimed lands comprising the Freedom
Islands and several portions of submerged areas of Manila Bay were going to be transferred to AMARI.
ISSUE:
Whether or not the stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed or to be
reclaimed, violate the Constitution

RULING: YES!

Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable and
disposable lands of the public domain Section 3 of the Constitution: Alienable lands of the public domain
shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands
of the public domain except by lease The 157.84 hectares of reclaimed lands comprising the Freedom
Islands, now covered by certificates of title in the name of PEA, are alienable lands of the public domain.
PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to
private
corporations.
PEA
may
only
sell
these
lands
to
Philippine
citizens, subject to the ownership limitations in the 1987 Constitution and existing laws. Clearly, the
Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409 of
the Civil Code, contracts whose object or purpose is contrary to law, or whose object is outside the
commerce of men, are inexistent and void from the beginning. The Court must perform its duty to defend
and uphold the Constitution, and therefore declares the Amended JVA null and void ab initio.

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