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[G.R. No. 127882. January 27, 2004] LA BUGAL-BLAAN TRIBAL ASSOCIATION, INC., represented by its Chairman FLONG MIGUEL M. LUMAYONG, petitioners, vs. VICTOR O. RAMOS, SECRETARY, DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR), HORACIO RAMOS, DIRECTOR, MINES AND GEOSCIENCES BUREAU (MGB-DENR), [4] RUBEN TORRES, EXECUTIVE SECRETARY, and WMC (PHILIPPINES), INC. respondents. DECISION CARPIO-MORALES, J.: The present petition for mandamus and prohibition assails the constitutionality of Republic Act No. 7942, otherwise known as the PHILIPPINE MINING ACT OF 1995, along with the Implementing Rules and Regulations issued pursuant thereto, Department of Environment and Natural Resources (DENR) Administrative Order 96-40, and of the Financial and Technical Assistance Agreement (FTAA) entered into on March 30, 1995 by the Republic of the Philippines and WMC (Philippines), Inc. (WMCP), a corporation organized under Philippine laws. On July 25, 1987, then President Corazon C. Aquino issued Executive Order (E.O.) No. 279 Secretary to
[6] [5]

authorizing the DENR

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. In entering into such proposals, the President shall consider the real contributions to the economic growth and general welfare of the country that will be realized, as well as the development and use of local scientific and technical resources that will be promoted by the proposed contract or agreement. Until Congress shall determine otherwise, large-scale mining, for purpose of this Section, shall mean those proposals for contracts or agreements for mineral resources exploration, development, and utilization involving a committed capital investment in a single mining unit project of at least Fifty Million Dollars in United States Currency (US $50,000,000.00). [7] On March 3, 1995, then President Fidel V. Ramos approved R.A. No. 7942 to govern the exploration, development, [8] utilization and processing of all mineral resources. R.A. No. 7942 defines the modes of mineral agreements for mining [9] [10] [11] [12] operations, outlines the procedure for their filing and approval, assignment/transfer and withdrawal, and fixes [13] [14] their terms. Similar provisions govern financial or technical assistance agreements. The law prescribes the qualifications of contractors and grants them certain rights, including timber, water and [18] [19] easement rights, and the right to possess explosives. Surface owners, occupants, or concessionaires are forbidden [20] from preventing holders of mining rights from entering private lands and concession areas. A procedure for the [21] settlement of conflicts is likewise provided for. The Act restricts the conditions for exploration, quarry and other permits. It regulates the transport, sale and [25] [26] processing of minerals, and promotes the development of mining communities, science and mining technology, and [27] safety and environmental protection. The governments share in the agreements is spelled out and allocated, taxes and fees are imposed, incentives [30] [31] granted. Aside from penalizing certain acts, the law likewise specifies grounds for the cancellation, revocation and [32] termination of agreements and permits. On April 9, 1995, 30 days following its publication on March 10, 1995 in Malaya and Manila Times, two newspapers [33] 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 [34] 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 [35] [36] the implementation of R.A. No. 7942 and DAO No. 96-40, giving the DENR fifteen days from receipt to act [37] thereon. The DENR, however, has yet to respond or act on petitioners letter. Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a temporary restraining order. They allege that at the time of the filing of the petition, 100 FTAA applications had already been filed, covering an [38] area of 8.4 million hectares, 64 of which applications are by fully foreign-owned corporations covering a total of 5.8 [39] million hectares, and at least one by a fully foreign-owned mining company over offshore areas.
[28] [29] [22] [23] [24] [15] [16] [17]

Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction: I x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows fully foreign owned corporations to explore, develop, utilize and exploit mineral resources in a manner contrary to Section 2, paragraph 4, Article XII of the Constitution; II x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows the taking of private property without the determination of public use and for just compensation; III x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it violates Sec. 1, Art. III of the Constitution; IV x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows enjoyment by foreign citizens as well as fully foreign owned corporations of the nations marine wealth contrary to Section 2, paragraph 2 of Article XII of the Constitution; V x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows priority to foreign and fully foreign owned corporations in the exploration, development and utilization of mineral resources contrary to Article XII of the Constitution; VI x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being unconstitutional in that it allows the inequitable sharing of wealth contrary to Sections [ sic] 1, paragraph 1, and Section 2, paragraph 4[,] [Article XII] of the Constitution; VII x x x in recommending approval of and implementing the Financial and Technical Assistance Agreement between the President of the Republic of the Philippines and Western Mining Corporation Philippines Inc. because the same is illegal and unconstitutional. [40] They pray that the Court issue an order: (a) (b) Permanently enjoining respondents from acting on any application for Financial or Technical Assistance Agreements; 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.[41] Impleaded as public respondents are Ruben Torres, the then Executive Secretary, Victor O. Ramos, the then DENR Secretary, and Horacio Ramos, Director of the Mines and Geosciences Bureau of the DENR. Also impleaded is private respondent WMCP, which entered into the assailed FTAA with the Philippine Government. WMCP is owned by WMC

Resources International Pty., Ltd. (WMC), a wholly owned subsidiary of Western Mining Corporation Holdings Limited, a [42] publicly listed major Australian mining and exploration company. By WMCPs information, it is a 100% owned [43] subsidiary of WMC LIMITED. Respondents, aside from meeting petitioners contentions, argue that the requisites for judicial inquiry have not been met and that the petition does not comply with the criteria for prohibition and mandamus. Additionally, respondent WMCP argues that there has been a violation of the rule on hierarchy of courts. After petitioners filed their reply, this Court granted due course to the petition. The parties have since filed their respective memoranda. WMCP subsequently filed a Manifestation dated September 25, 2002 alleging that on January 23, 2001, WMC sold [44] all its shares in WMCP to Sagittarius Mines, Inc. (Sagittarius), a corporation organized under Philippine laws. WMCP [45] was subsequently renamed Tampakan Mineral Resources Corporation. WMCP claims that at least 60% of the equity of Sagittarius is owned by Filipinos and/or Filipino-owned corporations while about 40% is owned by Indophil Resources [46] NL, an Australian company. It further claims that by such sale and transfer of shares, WMCP has ceased to be [47] connected in any way with WMC. By virtue of such sale and transfer, the DENR Secretary, by Order of December 18, 2001, approved the transfer and registration of the subject FTAA from WMCP to Sagittarius. Said Order, however, was appealed by Lepanto [49] Consolidated Mining Co. (Lepanto) to the Office of the President which upheld it by Decision of July 23, 2002. Its motion for reconsideration having been denied by the Office of the President by Resolution of November 12, [50] [51] 2002, Lepanto filed a petition for review before the Court of Appeals. Incidentally, two other petitions for review [52] related to the approval of the transfer and registration of the FTAA to Sagittarius were recently resolved by this Court. It bears stressing that this case has not been rendered moot either by the transfer and registration of the FTAA to a Filipino-owned corporation or by the non-issuance of a temporary restraining order or a preliminary injunction to stay the [53] above-said July 23, 2002 decision of the Office of the President. The validity of the transfer remains in dispute and awaits final judicial determination. This assumes, of course, that such transfer cures the FTAAs alleged unconstitutionality, on which question judgment is reserved. WMCP also points out that the original claimowners of the major mineralized areas included in the WMCP FTAA, namely, Sagittarius, Tampakan Mining Corporation, and Southcot Mining Corporation, are all Filipino-owned [54] corporations, each of which was a holder of an approved Mineral Production Sharing Agreement awarded in 1994, [55] albeit their respective mineral claims were subsumed in the WMCP FTAA; and that these three companies are the [56] same companies that consolidated their interests in Sagittarius to whom WMC sold its 100% equity in WMCP. WMCP concludes that in the event that the FTAA is invalidated, the MPSAs of the three corporations would be revived and the [57] mineral claims would revert to their original claimants. These circumstances, while informative, are hardly significant in the resolution of this case, it involving the validity of the FTAA, not the possible consequences of its invalidation. Of the above-enumerated seven grounds cited by petitioners, as will be shown later, only the first and the last need be delved into; in the latter, the discussion shall dwell only insofar as it questions the effectivity of E. O. No. 279 by virtue of which order the questioned FTAA was forged.

[G.R. No. 144302. May 27, 2004] PHILIPPINE GEOTHERMAL INC., petitioner, vs. NATIONAL POWER CORPORATION, respondent. RESOLUTION CARPIO-MORALES, J.: Before this Court is a petition for review on certiorari seeking to set aside and nullify the March 24, 2000 Decision and August 2, 2000 Resolution of the Court of Appeals in CA-G.R. SP No. 43853, Philippine Geothermal Incorporated v. Hon. Teodoro P. Regino as Presiding Judge of the Regional Trial Court of Quezon City, Branch 84, and the National Power Corp .

The antecedent facts of the case are as follows: On September 10, 1971, the National Power Corporation (NPC) entered into a service contract with Philippine Geothermal, Inc. (PGI), a corporation organized and existing under the laws of California, United States of America, for the exploration and exploitation of geothermal resources covering the Tiwi and Mak-Ban Geothermal Fields. Section 3.1 of said contract provides: Section 3 Term 3.1 The term of this contract shall be twenty-five (25) years renewable for another twenty-five (25) years upon the option of PGI under the same terms and conditions set forth herein. Albeit the service contract was to expire in 1996, the negotiations for its renewal started as early as 1994. NPC, however, was doubtful whether a renewal would be constitutional in light of Section 2, Article XII of the 1987 Constitution reading: SECTION 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the state. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the state . The state may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant. x x x (Emphasis supplied) As the service contract contained an arbitral clause, PGI filed on July 8, 1996 a request for arbitration with the International Court of Arbitration (ICA) of the International Chamber of Commerce (ICC). On August 21, 1996, the NPC filed before the Regional Trial Court (RTC) of Quezon City a petition for declaratory relief against PGI praying for the determination of the constitutionality of Section 3 of the service contract, specifically the above-quoted provision thereof on the renewal of the contract at the option of PGI. On October 2, 1996, PGI filed a motion to dismiss the petition for declaratory relief alleging, among other things, that the trial court has no jurisdiction over it in light of the pending arbitration proceedings it instituted. By Order of December 3, 1996, Branch 84 of the Quezon City RTC denied the motion to dismiss on the ground that the legality or constitutionality of the renewal of the service contract is an issue which only a regular court of justice may resolve or settle. PGI filed a motion for reconsideration which was denied by Order of March 6, 1997. PGI thus assailed the denial by the trial court of its motion to dismiss by certiorari and prohibition before the Court of Appeals, alleging that: I. RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF ITS JURISDICTION IN NOT GRANTING THE MOTION TO DISMISS RESPONDENT NPCS PETITION FOR DECLARATORY RELIEF FILED BY PGI FOR THE REASONS THAT: (A) BY ESTABLISHED JURISPRUDENCE, THE CASE BELOW SHOULD BE DISMISSED IN VIEW OF THE PENDING ARBITRATION PROCEEDING OVER THE SAME SUBJECT MATTER BECAUSE (i) RESPONDENT JUDGE DOES NOT HAVE JURISDICTION TO TAKE COGNIZANCE OF THE CASE; (ii) THERE IS ANOTHER ACTION PENDING BETWEEN THE PARTIES FOR THE SAME CAUSE; AND (iii) THE PETITION BELOW STATES NO CAUSE OF ACTION. CONSTITUTIONAL AND PUBLIC POLICY ISSUES, IF ANY, SHOULD BE RAISED FIRST IN THE ARBITRATION PROCEEDING, AND SUBSEQUENTLY, IF WARRANTED, IN THE PROCEEDING FOR THE ENFORCEMENT OF THE ARBITRAL AWARD.
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II. RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION IN DENYING PETITIONER ITS RIGHT TO PROCEDURAL DUE PROCESS AND IN BEING BIASED IN FAVOR OF NPC TO SERIOUS PREJUDICE OF PGI. Pending decision of the petition by the Court of Appeals, PGI and NPC filed on July 10, 1998 a joint motion to suspend [9] proceedings as the parties were exploring the possibility of amicable settlement. Without resolving the joint motion to suspend, the Court of Appeals rendered a Decision petition. Hence, the instant petition raising the following arguments: I. THE COURT OF APPEALS HAD NO JURISDICTION TO RENDER THE DECISION IN THE LIGHT OF A PENDING JOINT MOTION TO SUSPEND FILED BY THE PARTIES. II. THE PETITION FOR DECLARATORY RELIEF SHOULD HAVE BEEN DISMISSED BY THE REGIONAL TRIAL COURT AS WELL AS BY THE COURT OF APPEALS IN VIEW OF THE PENDING ARBITRATION PROCEEDINGS OVER THE SAME SUBJECT MATTER IN VIEW OF A BREACH OF THE CONTRACT SUBJECT OF THE PETITION. III. THE DECISIONS OF THE COURT OF APPEALS AND OF THE REGIONAL TRIAL COURT ARE NULL AND VOID FOR BEING MATERIALLY [11] INFECTED, CONSCIOUSLY OR UNCONSCIOUSLY, WITH OBVIOUS BADGES OF BIAS AND PREJUDICE. During the pendency of the instant petition, PGI and the NPC filed several joint motions to suspend proceedings [13] ground that they were negotiating for the settlement of the case. The motions were granted by this Court.
[12] [10]

of March 24, 2000 dismissing PGIs

upon the

On December 22, 2003, PGI and NPC filed a Joint Motion to Approve Compromise Agreement and to Dismiss based on Compromise Agreement alleging that, among others things: xxx 33. The fact that the Compromise Agreement and its amendment went through such exhaustive review by different agencies of government and that the same passed thorough scrutiny attests to the validity and soundness of the terms of compromise contained therein. It must be pointed out that this agreement was studied and examined by agencies of government directly dealing with the subject of the agreement and who are in the best position, by their skill and technical expertise, to assess the validity of the terms and the benefit accruing to the state. xxx 36. x x x The Compromise Agreement is not contrary to law because it in fact directly addressed to the very heart of the constitutional issues involved in this controversy. Thus [PGI] and [NPC] have agreed to terminate the Service Contract subject matter of the dispute, in favor of a new Geothermal Sales Contract and a PD 1442 Geothermal Service Contract, and PGI has committed to form a Philippine company for the development and operation of the Tiwi and Mak-Ban steamfields (Sec. 6.1 thereof) on a going-forward basis, thereby effectively erasing any doubt as to the legality of the compromise .

xxx 38. x x x [The] Compromise Agreement is not contrary to morals. The arrangement is commercially advantageous to the Government of the Philippines, NPC, PSALM and the consuming public. As above-stated, no less than the NEDA has confirmed that the government stands to gain over US $256 Million by entering into this compromise. x x x 39. x x x [The] Compromise Agreement is not contrary to public policy. It has been categorically declared by the state that private sector participation and privatization of state-owned enterprises and their assets is encouraged in order to accelerate economic progress and development as evidenced by various laws and issuances[.] x x x (Emphasis supplied) The assailed decision of the Court of Appeals dwells on the issue of jurisdiction of the RTC over the NPC petition for declaratory relief on the constitutionality of the service contract. Since only the issue of jurisdiction over the constitutionality of a contract was elevated to this Court, it is beyond its jurisdiction to pass upon and approve the Compromise Agreement of the parties, who have, as therein stated, agreed to terminate the service contract subject of the dispute, in favor of a series of agreements that start with Provisional, followed by Interim, then Transition, and finally Geothermal Resources Sales Contract (GRSC), the forging of which agreements is intended to effectively erase any doubt as to the legality of the compromise. In light of the foregoing development, while this Court denies the parties Joint Motion to Approve the Compromise Agreement, it finds the Motion to Dismiss well-taken. WHEREFORE, the Motion to Dismiss the instant petition is hereby GRANTED. SO ORDERED.

[G.R. No. 151212. September 10, 2003] TEN FORTY REALTY AND DEVELOPMENT CORP., Represented by its President, VERONICA G. LORENZANA, petitioner, vs. MARINA CRUZ, respondent. DECISION PANGANIBAN, J.: In an ejectment suit, the question of ownership may be provisionally ruled upon for the sole purpose of determining who is entitled to possession de facto. In the present case, both parties base their alleged right to possess on their right to own. Hence, the Court of Appeals did not err in passing upon the question of ownership to be able to decide who was entitled to physical possession of the disputed land.

The Case Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to nullify the August 31, 2001 Decision and [3] December 19, 2001 Resolution of the Court of Appeals (CA) in CA- GR SP No. 64861. The dispositive portion of the assailed Decision is as follows: WHEREFORE, premises considered, the petition is hereby DISMISSED and the Decision dated May 4, 2001 is hereby AFFIRMED. The assailed Resolution denied petitioner's Motion for Reconsideration.
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The Facts The facts of the case are narrated by the CA as follows:

A complaint for ejectment was filed by *Petitioner Ten Forty Realty and Development Corporation+ against x x x [Respondent Marina Cruz] before the Municipal Trial Court in Cities (MTCC) of Olongapo City, docketed as Civil Case 4269, which alleged that: petitioner is the true and absolute owner of a parcel of lot and residential house situated in #71 18th Street, E.B.B. Olongapo City, particularly described as: A parcel of residential house and lot situated in the above-mentioned address containing an area of 324 square meters more or less bounded on the Northeast by 041 (Lot 255, Ts-308); on the Southeast by 044 (Lot 255, Ts-308); on the Southwest by 043 (Lot 226-A & 18th street) and on the Northwest by 045 (Lot 227, Ts-308) and declared for taxation purposes in the name of [petitioner] under T.D. No. 002-4595-R and 002-4596. having acquired the same on December 5, 1996 from Barbara Galino by virtue of a Deed of Absolute Sale; the sale was acknowledged by said Barbara Galino through a 'Katunayan'; payment of the capital gains tax for the transfer of the property was evidenced by a Certification Authorizing Registration issued by the Bureau of Internal Revenue; petitioner came to know that Barbara Galino sold the same property on April 24, 1998 to Cruz, who immediately occupied the property and which occupation was merely tolerated by petitioner; on October 16, 1998, a complaint for ejectment was filed with the Barangay East Bajac-Bajac, Olongapo City but for failure to arrive at an amicable settlement, a Certificate to File Action was issued; on April 12, 1999 a demand letter was sent to [respondent] to vacate and pay reasonable amount for the use and occupation of the same, but was ignored by the latter; and due to the refusal of [respondent] to vacate the premises, petitioner was constrained to secure the services of a counsel for an agreed fee of P5,000.00 as attorneys fee and P500.00 as appearance fee and incurred an expense of P5,000.00 for litigation. In respondents Answer with Counterclaim, it was alleged that: petitioner is not qualified to own the residential lot in dis pute, being a public land; according to Barbara Galino, she did not sell her house and lot to petitioner but merely obtained a loan from Veronica Lorenzana; the payment of the capital gains tax does not necessarily show that the Deed of Absolute Sale was at that time already in existence; the court has no jurisdiction over the subject matter because the complaint was filed beyond the one (1) year period after the alleged unlawful deprivation of possession; there is no allegation that petitioner had been in prior possession of the premises and the same was lost thru force, stealth or violence; evidence will show that it was Barbara Galino who was in possession at the time of the sale and vacated the property in favor of respondent; never was there an occasion when petitioner occupied a portion of the premises, before respondent occupied the lot in April 1998, she caused the cancellation of the tax declaration in the name of Barbara Galino and a new one issued in respondents name; petitioner obtained its tax declaration over the same property on November 3, 1998, seven (7) months [after] the respondent [obtained hers]; at the time the house and lot [were] bought by respondent, the house was not habitable, the power and water connections were disconnected; being a public land, respondent filed a miscellaneous sales application with the Community Environment and Natural Resources Office in Olongapo City; and the action for ejectment cannot succeed where it appears that respondent had been in possession of the property prior to the [5] petitioner. In a Decision dated October 30, 2000, the Municipal Trial Court in Cities (MTCC) ordered respondent to vacate the property and surrender to petitioner possession thereof. It also directed her to pay, as damages for its continued unlawful use, P500 a month from April 24, 1999 until the property was vacated, P5,000 as attorneys fees, and the costs of the suit. On appeal, the Regional Trial Court (RTC) of Olongapo City (Branch 72) reversed the MTCC. The RTC ruled as follows: 1) respondents entry into the property was not by mere tolerance of petitioner, but by virtue of a Waiver and Transfer of Possess ory Rights and Deed of Sale in her favor; 2) the execution of the Deed of Sale without actual transfer of the physical possession did not have the effect of making petitioner the owner of the property, because there was no delivery of the object of the sale as provided for in Article 1428 of the Civil Code; and 3) being a corporation, petitioner was disqualified from acquiring the property, which was public land.
[7] [6]

Ruling of the Court of Appeals Sustaining the RTC, the CA held that petitioner had failed to make a case for unlawful detainer, because no contract -- express or implied -- had been entered into by the parties with regard to possession of the property. It ruled that the action should have been for forcible entry, in which prior physical possession was indispensable -- a circumstance petitioner had not shown either. The appellate court also held that petitioner had challenged the RTCs ruling on the question of ownership for the purpose of compensating for the latters failure to counter such ruling. The RTC had held that, as a corporation, petitioner had no right to acquire the property which was alienable public land.

Hence, this Petition.

Issues Petitioner submits the following issues for our consideration: 1. The Honorable Court of Appeals had clearly erred in not holding th at *r+espondents occupation or possession of the property in question was merely through the tolerance or permission of the herein [p]etitioner;

*2.+ The Honorable Court of Appeals had likewise erred in holding that the ejectment case should have been a forcible entry case where prior physical possession is indispensable; and *3.+ The Honorable Court of Appeals had also erred when it ruled that the herein *r+espondents possession or occupation of the said property is in the nature of an exercise of ownership which should put the herein [9] *p+etitioner on guard.

The Courts Ruling The Petition has no merit.

First Issue: Alleged Occupation by Tolerance Petitioner faults the CA for not holding that the former merely tolerated respondents occupation of the subject property. By raising this issue, petitioner is in effect asking this Court to reassess factual findings. As a general rule, this kind of reassessment cannot be done through a petition for review on certiorari under Rule 45 of the Rules of Court, because this Court is not a trier of [10] facts; it reviews only questions of law. Petitioner has not given us ample reasons to depart from the general rule. On the basis of the facts found by the CA and the RTC, we find that petitioner failed to substantiate its case for unlawful detainer. Admittedly, no express contract existed between the parties. Not shown either was the corporations alleged tolerance of respondents possession. While possession by tolerance may initially be lawful, it ceases to be so upon the owners demand that the possessor by [11] tolerance vacate the property. To justify an action for unlawful detainer, the permission or tolerance must have been present at [12] the beginning of the possession. Otherwise, if the possession was unlawful from the start, an action for unlawful detainer would [13] be an improper remedy. Sarona v. Villegas elucidates thus: A close assessment of the law and the concept of the word tolerance confirms our view heretofore expressed that such toler ance must be present right from the start of possession sought to be recovered, to categorize a cause of action as one of unlawful detainer not of forcible entry. Indeed, to hold otherwise would espouse a dangerous doctrine. And for two reasons. First. Forcible entry into the land is an open challenge to the right of the possessor. Violation of that right authorizes the speedy redress in the inferior court provided for in the rules. If one year from the forcible entry is allowed to lapse before suit is filed, then the remedy ceases to be speedy; and the possessor is deemed to have waived his right to seek relief in the inferior court. Second, if a forcible entry action in the inferior court is allowed after the lapse of a number of years, then the result may well be that no action for forcible entry can really prescribe. No matter how long such defendant is in physical possession, plaintiff will merely make a demand, bring suit in the inferior court upon a plea of tolerance to prevent prescription to set in and summarily throw him out of the land. Such a conclusion is unreasonable. Especially if we bear in mind the postulates that proceedings of forcible entry and unlawful detainer are summary in nature, and that the one year time bar to suit is but in pursuance of the summary nature of the [14] action. In this case, the Complaint and the other pleadings do not recite any averment of fact that would substantiate the claim of petitioner that it permitted or tolerated the occupation of the property by Respondent Cruz. The Complaint contains only bare allegations that 1) respondent immediately occupied the subject property after its sale to her, an action merely tolerated by [15] [16] petitioner; and 2) her allegedly illegal occupation of the premises was by mere tolerance.

These allegations contradict, rather than support, petitioners theory that its cause of action is for unlawful detainer. First, these arguments advance the view that respondents occupation of the property was unlawful at its inception. Second, they counter the essential requirement in unlawful detainer cases that petitioners supposed act of sufferance or tolerance must be presen t right [17] from the start of a possession that is later sought to be recovered. As the bare allegation of petitioners tolerance of respondents occupation of the premises has not been proven, the possession should be deemed illegal from the beginning. Thus, the CA correctly ruled that the ejectment case should have been for forcible entry -- an action that had already prescribed, however, when the Complaint was filed on May 12, 1999. The prescriptive period of one year for forcible entry cases is reckon ed from the date of respondents actual entry into the land, which in this case was on April 24, 1998.

Second Issue: Nature of the Case Much of the difficulty in the present controversy stems from the legal characterization of the ejectment Complaint filed by petitioner. Specifically, was it for unlawful detainer or for forcible entry? The answer is given in Section 1 of Rule 70 of the Rules of Court, which we reproduce as follows: SECTION 1. Who may institute proceedings, and when. - Subject to the provisions of the next succeeding section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs. While both causes of action deal only with the sole issue of physical or de facto possession, and distinct, as explained below:

the two cases are really separate

x x x. In forcible entry, one is deprived of physical possession of land or building by means of force, intimidation, threat, strategy, or stealth. In unlawful detainer, one unlawfully withholds possession thereof after the expiration or termination of his right to hold possession under any contract, express or implied. In forcible entry, the possession is illegal from the beginning and the basic inquiry centers on who has the prior possession de facto. In unlawful detainer, the possession was originally lawful but became unlawful by the expiration or termination of the right to possess, hence the issue of rightful possession is decisive for, in such action, the defendant is in actual possession and the plaintiffs cause of action is the termination of the defendants right to continue in possession. What determines the cause of action is the nature of defendants entry into the land. If the entry is illegal, then the action which may be filed against the intruder within one year therefrom is forcible entry. If, on the other hand, the entry is legal but the possession thereafter became illegal, the case is one of unlawful detainer which must be filed within one year from the date of the [19] last demand. It is axiomatic that what determines the nature of an action as well as which court has jurisdiction over it are the allegations in [20] [21] the complaint and the character of the relief sought. In its Complaint, petitioner alleged that, having acquired the subject property from Barbara Galino on December 5, 1996, it [23] [24] was the true and absolute owner thereof; that Galino had sold the property to Respondent Cruz on April 24, 1998; that after the [25] sale, the latter immediately occupied the property, an action that was merely tolerated by petitioner; and that, in a letter given to [26] respondent on April 12, 1999, petitioner had demanded that the former vacate the property, but that she refused to do [27] so. Petitioner thereupon prayed for judgment ordering her to vacate the property and to pay reasonable rentals for the use of the [28] premises, attorneys fees and the costs of the suit. The above allegations appeared to show the elements of unlawful detainer. They also conferred initiatory jurisdiction on the MTCC, because the case was filed a month after the last demand to vacate -- hence, within the one-year prescriptive period.

However, what was actually proven by petitioner was that possession by respondent had been illegal from the beginning. While the Complaint was crafted to be an unlawful detai ner suit, petitioners real cause of action was for forcible entry, which had already prescribed. Consequently, the MTCC had no more jurisdiction over the action. The appellate court, therefore, did not err when it ruled that petitioners Complaint for un lawful detainer was a mere subterfuge or a disguised substitute action for forcible entry, which had already prescribed. To repeat, to maintain a viable action [29] for forcible entry, plaintiff must have been in prior physical possession of the property; this is an essential element of the suit.

Third Issue: Alleged Acts of Ownership Petitioner next questions the CAs pronouncement that respondents occupation of the property was an exercise of a right flowing from a claim of ownership. It submits that the appellate court should not have passed upon the issue of ownership, because the only question for resolution in an ejectment suit is that of possession de facto. Clearly, each of the parties claimed the right to possess the disputed property because of alleged ownership of it. Hence, no error could have been imputed to the appellate court when it passed upon the issue of ownership only for the purpose of resolving [30] the issue of possession de facto. The CAs holding is moreover in accord with jurisprudence and the law.

Execution of a Deed of Sale Not Sufficient as Delivery In a contract of sale, the buyer acquires the thing sold only upon its delivery in any of the ways specified in Articles 149 7 to [31] 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee . With respect to incorporeal property, Article 1498 lays down the general rule: the execution of a public instrument shall be equivalent to the delivery of the thing that is the object of the contract if, from the deed, the contrary does not appear or cannot be clearly inferred. However, ownership is transferred not by contract but by tradition or delivery. Nowhere in the Civil Code is it provided that [33] the execution of a Deed of Sale is a conclusive presumption of delivery of possession of a piece of real estate. This Court has held that the execution of a public instrument gives rise only to a prima facie presumption of delivery. Such [34] [35] presumption is destroyed when the delivery is not effected because of a legal impediment. Pasagui v. Villablanca had earlier ruled that such constructive or symbolic delivery, being merely presumptive, was deemed negated by the failure of the vendee to take actual possession of the land sold. It is undisputed that petitioner did not occupy the property from the time it was allegedly sold to it on December 5, 1996 or at any time thereafter. Nonetheless, it maintains that Galinos continued stay in the premises from the time of the sale up to t he time respondents occupation of the same on April 24, 199 8, was possession held on its behalf and had the effect of delivery under the [36] law. Both the RTC and the CA disagreed. According to the RTC, petitioner did not gain control and possession of the property, because Galino had continued to exercise ownership rights over the realty. That is, she had remained in possession, continued to declare it as her property for tax purposes and sold it to respondent in 1998. For its part, the CA found it highly unbelievable that petitioner -- which claims to be the owner of the disputed property -would tolerate possession of the property by respondent from April 24, 1998 up to October 16, 1998. How could it have been so tolerant despite its knowledge that the property had been sold to her, and that it was by virtue of that sale that she had undertaken major repairs and improvements on it? Petitioner should have likewise been put on guard by respondents declaration of the pro perty for tax purposes on April 23, [37] [38] 1998, as annotated in the tax certificate filed seven months later. Verily, the tax declaration represented an adverse claim over the unregistered property and was inimical to the right of petitioner. Indeed, the above circumstances derogated its claim of control and possession of the property.

Order of Preference in Double

Sale of Immovable Property The ownership of immovable property sold to two different buyers at different times is governed by Article 1544 of the Civil Code, which reads as follows: Article 1544. x x x Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it i n the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. Galino allegedly sold the property in question to petitioner on December 5, 1996 and, subsequently, to respondent on April 24, 1998. Petitioner thus argues that being the first buyer, it has a better right to own the realty. However, it has not been able to [39] establish that its Deed of Sale was recorded in the Registry of Deeds of Olongapo City. Its claim of an unattested and unverified [40] notation on its Deed of Absolute Sale is not equivalent to registration. It admits that, indeed, the sale has not been recorded in [41] the Registry of Deeds. In the absence of the required inscription, the law gives preferential right to the buyer who in good faith is first in possession. In determining the question of who is first in possession, certain basic parameters have been established by jurisprudence. First, the possession mentioned in Article 1544 includes not only material but also symbolic possession. Second, possessors [43] in good faith are those who are not aware of any flaw in their title or mode of acquisition. Third, buyers of real property that is in [44] the possession of persons other than the seller must be wary -- they must investigate the rights of the possessors. Fourth, good [45] faith is always presumed; upon those who allege bad faith on the part of the possessors rests the burden of proof. Earlier, we ruled that the subject property had not been delivered to petitioner; hence, it did not acquire possession either materially or symbolically. As between the two buyers, therefore, respondent was first in actual possession of the property. Petitioner has not proven that respondent was aware that her mode of acquiring the property was defective at the time she acquired it from Galino. At the time, the property -- which was public land -- had not been registered in the name of Galino; thus, respondent relied on the tax declarations thereon. As shown, the formers name appeared on the tax declarations for the property until its sale to the latter in 1998. Galino was in fact occupying the realty when respondent took over possession. Thus, there was no circumstance that could have placed the latter upon inquiry or required her to further investigate petitioners right of o wnership.

Disqualification from Ownership of Alienable Public Land Private corporations are disqualified from acquiring lands of the public domain, as provided under Section 3 of Article XII of the Constitution, which we quote: Sec. 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. 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, for a period not exceeding twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may not lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant. x x x. (Italics supplied) While corporations cannot acquire land of the public domain, they can however acquire private land. Hence, the next issue that needs to be resolved is the determination of whether the disputed property is private land or of the public domain. According to the certification by the City Planning and Development Office of Olongapo City, the contested property in this [47] case is alienable and disposable public land. It was for this reason that respondent filed a miscellaneous sales application to [48] acquire it.

On the other hand, petitioner has not presented proof that, at the time it purchased the property from Galino, the property had ceased to be of the public domain and was already private land. The established rule is that alienable and disposable land of the public domain held and occupied by a possessor -- personally or through predecessors-in-interest, openly, continuously, and [49] exclusively for 30 years -- is ipso jure converted to private property by the mere lapse of time. In view of the foregoing, we affirm the appellate courts ruling that respondent is entitled to possession de facto. This [50] determination, however, is only provisional in nature. Well-settled is the rule that an award of possession de facto over a piece of [51] property does not constitute res judicata as to the issue of its ownership. WHEREFORE, this Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner. SO ORDERED. JG Summit Holdings Inc. vs. CA G.R. No. 124293, November 20, 2000 FACTS: The National Investment and Development Corporation (NIDC), a government corporation, entered into a Joint Venture Agreement (JVA) with Kawasaki Heavy Industries, Ltd. for the construction, operation and management of the Subic National Shipyard, Inc., later became the Philippine Shipyard and Engineering Corporation (PHILSECO). Under the JVA, NIDC and Kawasaki would maintain a shareholding proportion of 60%-40% and that the parties have the right of first refusal in case of a sale. Through a series of transfe rs, NIDCs rights, title and interest in PHILSECO eventually went to the National Government. In the interest of national economy, it was decided that PHILSECO should be privatized by selling 87.67% of its total outstanding capital stock to private entitie s. After negotiations, it was agreed that Kawasakis right of first refusal under the JVA be exchanged for the right to top by five percent the highest bid for said shares. Kawasaki that Philyards Holdings, Inc. (PHI), in which it was a stockholder, would exercise this right in its stead. During bidding, Kawasaki/PHI Consortium is the losing bidder. Even so, because of the right to top by 5% percent the highest bid, it was able to top JG Summits bid. JG Summit protested, contending that PHILSECO, as a s hipyard is a public utility and, hence, must observe the 60%-40% Filipino-foreign capitalization. By buying 87.67% of PHILSECOs capital stock at bidding, Kawasaki/PHI in effect now owns more than 40% of the stock. ISSUE: Whether or not PHILSECO is a public utility Whether or not Kawasaki/PHI can purchase beyond 40% of PHILSECOs stocks

HELD: In arguing that PHILSECO, as a shipyard, was a public utility, JG Summit relied on sec. 13, CA No. 146. On the other hand, Kawasaki/PHI argued that PD No. 666 expli citly stated that a shipyard was not a public utility. But the SC stated that sec. 1 of PD No. 666 was expressly repealed by sec. 20, BP Blg. 391 and when BP Blg. 391 was subsequently repealed by EO 226, the latter law did not revive sec. 1 of PD No. 666. Therefore, the law that states that a shipyard is a public utility still stands. A shipyard such as PHILSECO being a public utility as provided by law is therefore required to comply with the 60%-40% capitalization under the Constitution. Likewise, the JVA between NIDC and Kawasaki manifests an intention of the parties to abide by this constitutional mandate. Thus, under the JVA, should the NIDC opt to sell its shares of stock to a third party, Kawasaki could only exercise its right of first refusal to the extent that its total shares of stock would not exceed 40% of the entire shares of stock. The NIDC, on the other hand, may purchase even beyond 60% of the total shares. As a government corporation and necessarily a 100% Filipino-owned corporation, there is nothing to prevent its purchase of stocks even beyond 60% of the capitalization as the Constitution clearly limits only foreign capitalization. Kawasaki was bound by its contractual obligation under the JVA that limits its right of first refusal to 40% of the total

capitalization of PHILSECO. Thus, Kawasaki cannot purchase beyond 40% of the capitalization of the joint venture on account of both constitutional and contractual proscriptions. [G.R. No. 149717. October 7, 2003] EASTERN ASSURANCE & SURETY CORPORATION (EASCO), petitioner, vs. LAND TRANSPORTATION FRANCHISING and REGULATORY BOARD (LTFRB), respondent. DECISION PANGANIBAN, J.: The operation of monopolies is not totally banned by the Constitution. However, the State shall regulate them when public interest so requires. In the present case, the two consortia of insurance companies that have been authorized to issue passenger insurance policies are adequately regulated by the Land Transportation Franchising and Regulatory Board (LTFRB) to protect the riding public. While individual insurance companies may somehow be adversely affected by this scheme, the paramount public interest involved must be upheld. In any event, all legitimate insurance companies are allowed to become members of the consortia. Thus, there is no restraint of trade or unfair competition involved. The Case [1] [2] Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to set aside the August 20, 2001 Decision of [3] the Court of Appeals (CA) in CA-GR SP No. 63149. The dispositive portion of the assailed Decision reads as follows: [4] WHEREFORE, in view of the foregoing premises, the Petition is hereby DISMISSED for lack of merit. No costs. The Facts The factual antecedents of the case are summarized by the CA as follows: *I+n its desire to improve public service and its assistance to the victims of road accidents involving PUVs *pub lic utility vehicles], the [Land Transportation Franchising and Regulatory] Board conducted a thorough investigation on the sufficiency of existing insurance policies for PUVs. In the course of its investigation, the Board discovered that insurance coverage of PUVs was only P50,000.00 for the entire vehicle regardless of the number of passengers or persons killed or injured. The Board, then, undertook x x x nationwide consultations among the transport operators and insurance companies and held meetings with the officials of the Insurance Commission. Thereafter, the Board issued Memorandum Circular No. 99-011 fixing the insurance coverage of PUVs on the basis of the number of persons that may be killed or injured instead of the entire vehicle alone. The coverage is denominated as Passenger Accident Insurance Coverage (PAIC), which fixes the coverage of P50,000.00 per passenger. During the effectivity of Memorandum Circular No. 99-011, the Board received several complaints from various transport organizations such as the Federation of Jeepney Operators and Drivers Association of the Philippines (FEJODAP), Pagkakaisa ng mga Samahan ng Tsuper at Operator Nationwide (PISTON), and the Philippine Confederation of Drivers Organization, Alliance of Concerned Transport Operators (PCDO-ACTO). The thrust of their complaints are: (1) the proliferation of fake insurance policies; (2) the predatory pricing among competing insurance firms; (3) the proliferation of fixers in the premises of the LTFRB endorsing certain insurance companies; and (4) the moonlighting by personnel of the LTFRB who induced operators to secure their policies from favored companies. To address these complaints, the Board held a series of meetings with the officers of various transport groups co mposed of operators of bus, jeepney and taxi as well as representatives of several insurance companies and officials of the Insurance Commission. In a meeting held on 12 December 2000, where herein petitioner Eastern Assurance & Surety Corporation (EASCO, for brevity) was represented by a certain Dante Baronia, the transport groups proposed the creation of *a+ two-group system and of [a] blacklisting scheme. In a letter dated 19 January 2001, the aforesaid proposal was then referred by the Board to the Insurance Commission for confirmation, to wit: 1. The Commission interposes no objection to, there being no legal obstacle to the same, x x x the suggestion of various ins urance groups to allow only two (2) groups to participate in the Passenger Accident Insurance Program (PAIP) of the LTFRB. It is understood that all insurance companies accredited by the Commission may participate in the program by joining any of the groups. 2. The Commission interposes no objection, there being no legal obstacle to the same, to the suggestion of the various transport groups to create an accreditation and de-listing criteria to be used in the implementation of the PAIP, x x x and 3. The Commission also is of the position that the LTFRB may, on its own set up, require and implement the two groups system and/or the accreditation and de-listing criteria without need of prior approval from the Commission. x x x On 30 January 2001, Insurance Commissioner Eduardo Malinis wrote LTFRB Chairman Dante M. Lantin, the whole tex t of which, reads: We hereby confirm the points enumerated in your letter of January 19, 2001 regarding the implementation of the Passenger Personal Accident Insurance Program (PAIP) of the LTFRB, as the same aim to achieve a simple and systematic implementation of said program.

Thus, on 1 February 2001, public respondent LTFRB issued the herein assailed Memorandum Circular No. 2001-001 that reads, as follows: MEMORANDUM CIRCULAR NO. 2001-001 SUBJECT: Amending Memorandum Circular No. 99-011 (Passenger Accident Insurance Requirement of PUV Operators) I. PREFATORY STATEMENT In response to numerous complaints from passenger accident victims involving public utility vehicles, the Board passed Memorandum Circular No. 99-011 dated June 22, 1999 requiring all public utility vehicles to secure a no fault passenger accident insurance. This circular was further refined with the passage of Memorandum Circular No. 2000-010 dated March 27, 2000. After a year of implementation, the Board now has received nu merous complaints coming from various transport groups and from its regional offices. These complaints [range] from non-payment or late payment of claims, fake certificates of cover, predatory pricing, non-payment or under payment of taxes, graft and corruption, and the non implementation of the computerized data bank of all public utility vehicles. In addressing these concerns, the different transport groups proposed the creation of a two (2) group system whereby all ins urance companies who would like to participate in the passenger accident insurance program of the LTFRB must join any of the two groups, and that the passenger insurance requirement of the PUV operators be divided between these two groups on the basis of the number of their respective LTO license plates. The transport group argue that through this scheme the following objectives will be attained: 1. Fake certificates of cover will be minimized, if not eradicated, due to better monitoring of operations as there would only be two kinds of certificates that would be circulating. 2. Payment of the proper taxes can be assured. 3. Graft and corruption will be minimized, if not eliminated, since discretion as to which insurance company to patronize will be removed. 4. Payment of claims will be prompt due to better monitoring. 5. The proposed computerized data bank of all PUV[,] nationwide will be attained without a single cost to government. It must be noted that the passenger accident insurance program of the LTFRB was implemen ted after numerous dialogues with all the transport organizations nationwide, and only after all issues raised have been sufficiently addressed. More importantly, this program is without any cost to the government. The added insurance expense is shouldered by the PUV operators. In pursuing this proposal further, the Board conducted meetings and conferences with the transport operators and with the insurance companies. It also met [with] the Insurance Commission where the latter, in its letter dated January 30, 2001, confirmed that it has no objection to the proposal of the various transport groups, there being no legal impediment to the same. II. AMENDMENTS AMENDMENTS TO M.C. NO. 99-011 IN VIEW OF THE FOREGOING PREMISES, and upon the clamor of the transport operators who are the ones paying the added insurance cost, paragraph seven (7) of Memorandum Circular No. 99-011 is hereby amended to read as follows: In order to make sure that future claims of PUV operators and passenger accident victims are paid within the required time, and in order to minimize, if not eliminate, fake certificates of cover and graft and corruption, as well as to ensure the payment of the proper taxes much needed by the government, as well as to create a computerized data bank without any cost to the government which is necessary for transport planning[,] the Board will only accept, as proof of compliance of this program, insurance polic[i]es/certificates of cover duly approved by the Insurance Commission specifically for this project, and issued by any of the two groups as authorized by the Board. CREATION OF THE TWO GROUP SYSTEM Accordingly, as there is already one group duly authorized by the Board to participate in this program in the person of the Passenger Accident Managers, Inc. (PAMI for brevity), THERE IS A NEED TO FORM ANOTHER GROUP IN ORDER TO FULLY IMPLEMENT THE PROGRAM. All other insurance companies who wish to continue participating in the program, therefore, are hereby required to either join PAMI or form a second group. In order to maintain their good standing with the Board, each group must maintain and present to the Board proof of complian ce with the following minimum requirements: 1. Membership of at least ten (10) insurance companies with valid and subsisting license issued by the Insurance Commission; 2. Aggregate paid-up capitalization of P500 Million; 3. Compliance with the computerized dat[a] as required by the Board; 4. Payment of all claims within seven (7) calendar days from submission of all documents; 5. Issuance of one (1) certificate of cover with the standard form and contents duly approved by the Insurance Commission and the Board; and

6. Submission and compliance with all other reports x x x and requirements of the Boar d. ODD-EVEN SYSTEM In order to address the issue of graft and corruption, there is a need to remove discretion on the part of government offici als. Accordingly, the Board supports the proposal of the transport groups and hereby adopts the following system: All PUVs covered by this program whose LTO license plate, as per latest LTO Official Receipt, has an even middle number mus t have an insurance policy/certificate cover coming from the first insurance group (in its case PAMI), while those with an odd middle number must have a policy/cover coming from the second group. This odd-even system shall be interchanged on a year to year basis in order to ensure equality and fairness in distribution. Accordingly, the Board will not accept, as proof of compliance with this program, any insurance policy/cover that does not comply with this odd-even scheme, except in the following cases where the operator may choose the insurance group of its choice provided if is one of the two authorized by the Board, to wit: 1. Where the operator or franchise holder has 50 or more operating units registered in its name; 2. Where the operator files a verified petition with the Board justifying his preference over the other group. In this case, the Board may allow a switch if it can be shown that there are more benefits to be attained [from] the insurance group of his choice, and provided further that these benefits are legal and do not result to any form of predatory pricing, such as x x x unjustified commissio ns and discounts. Other than *for+ these reasons*,+ no switch may be allowed by any officer of the LTFRB unless otherwise duly approved by the Board en banc. EFFECTIVITY OF THE TWO GROUP SYSTEM The effectivity of the two group system will take place on March 1, 2001, unless otherwise extended by the Board en banc. III. INTERIM GUIDELINES In the meantime, in order to immediately address the concerns of the transport groups, the following should be strictly comp lied with: 1. No insurance company, its agents and employees shall resort to predatory pricing[,] which means selling or offering to sell any product at a price unreasonably below the industry average cost so as to attract customers to the detriment of competitors. 2. The amount of commission/discount which a company will offer in the market should be in writing and duly approved by the LTFRB, who, in turn, will coordinate the same with the Insurance Commission. Any violation of the declared commission/discount shall be subject to the penalties provided for herein. 3. Only branch offices duly identified by the company, together with the designated officer-in-charge, and submitted in writing to the LTFRB shall issue, distribute, market or release the required policy/certificate of cover. 4. Payment of all claims should be made within seven (7) calendar days from submission of all the required x x x documents. Accordingly, the company shall provide the LTFRB with the list of required documents. Any insurance company found to have violated any of the above prohibitions shall, after notice and hearing, be banned permanently from participating in the program either directly or indirectly, including its principal stockholders, key officers and successors-in-interest if evidence warrants. The Board, may, in the interest of the public, issue a cease and desist order enjoining a company from participating in the program for not more than thirty (30) days pending full investigation. All insurance companies who are blacklisted in a ny government agency or instrumentality including court and other quasijudicial agencies are automatically disallowed to participate in this program. Accordingly, no policy or certificate of cover shall be accepted from these companies as proof of compliance with this program. The Board shall issue from time to time the list of the blacklisted or suspended companies. All insurance policies*/+certificates of cover issued by their insurance companies in their individual capacities prior to t he effectivity of the Two Group System shall remain in full force and effect until its expiration, and said companies shall be primarily l iable for the payment of claims subject of said policies/certificates of cover. xxx xxx xxx For the dissemination and implementation of the aforequoted Memorandum, the LTFRB made a one month nationwide information campaign on the nature of the two-group system and of the blacklisting scheme. And in a meeting with the different insurance companies, including the representative of petitioner EASCO, the Insurance Commission representative [read] before the participants the insurance firms blacklisted by the Regional Trial Court of Quezon City which includes petitioner EASCO. The purpose [5] of this information is to afford the blacklisted firms an opportunity to clear their records and settle the claims against th em. Claiming that Memorandum Circular No. 2001-001 and the implementing Circulars had deprived it of its right to engage in the passenger accident insurance business, Eastern Assurance & Surety Corporation (EASCO) filed a Petition for Certiorari and Prohibition with the CA questioning the validity of those issuances. Ruling of the Court of Appeals

The CA ruled that Memorandum Circular No. 2001-001 had not been issued ultra vires by the LTFRB and constituted a valid exercise of police power. Hence, the appellate court ruled: x x x *T+he Board has the power to require as a condition for the issuance of certificate of public convenience an insurance policy or certificate provided by a member of one of the two accredited groups. The clear purpose of the condition is to ensure the benefit of the riding public and pedestrians who may become victims of accidents involving PUVs. For this purpose, the Board may, as it did, coordinate with the Insurance Commission, the governmental agency regulating the insurance business, for the adoption of the two-group and blacklisting system to enhance the insurance coverage of passengers and persons who become victims of accident for their benefit or of their heirs. Without doubt, the imposition of the requirements is germane to the powers, functions and purpose of the Board as a regulatory [6] body in charge of administering public utilities. x x x. Moreover, the CA found that the Circular had not violated the provisions of the Constitution on free enterprise, equal protection and substantive due process. The appellate court explained that PAIC II and PAMI merely serve as service arms of their respective members. In other words, these two (2) groups, strictly speaking, are not engaged in insurance business. Moreover, the two-group / consortium scheme under the Memorandum Circular No. 2001-001 is open to all insurance firms [that] want to join any of the two groups. It does not vest any privilege or advantage to any single firm or group to carry out the business of providing the insurance coverage under the program. The fact that the program is open to all insurance firms including petitioner negates its pretense of exclusivity. No firm is discriminated against since the two consortia cannot refuse membership in their respective groups [7] to any interested firm *that+ wants and is qualified to join. [8] Hence, this Petition. The Issues In its Memorandum, petitioner raises the following issues for our consideration: a) the assailed LTFRB circulars with [their] implementing circulars violat[e] the constitutional proscription against monopoly, combination in restraint of trade and unfair competition[;] b) there is a violation of [the] equal protection clause; c) LTFRB exceeded its legal mandate because it exercised administrative control/jurisdiction over insurance companies which properly and exclusively belongs to the Insurance Commission[;] d) EASCO, petitioner, was disenfranchise[d] of its legitimate insurance business; x x x e) the Court of Appeals erred in ruling that the [P]etition for [C]ertiorari which raises purely legal issues is not exempt from the rule on exhaustion of administrative remedies, contrary to existing jurisprudence on the matter[; f)] the Court of Appeals committed grave abuse in completely disregarding vital facts borne by the records and admissions by the parties; and x x x [g)] x x x noted the assailed [9] LTFRB memorandum circular did not comply with publication requirements for its validity. The main issue in the case before us, as in the Court of Appeals, is the validity of Memorandum Circular Nos. 2001-001 and 2001-010. The Courts Ruling The Petition has no merit. Main Issue: Validity of the LTFRB Memorandum Circulars Petitioner contends that Memorandum Circular No. 2001-001 and the subsequent implementing Circulars violate the constitutional proscription against monopoly as well as unfair competition and combination in restraint of trade. Petitioner further argues that these were issued with grave abuse of discretion and without jurisdiction on the part of the LTFRB. Monopoly The constitutional provision on monopolies is found in Article XII as follows: Sec. 19. 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. While embracing free enterprise as an economic creed, the Constitution does not totally prohibit the operation of [10] monopolies. However, it mandates the State to regulate them when public interest so requires. Intense competition has led insurance companies/agents offering insurance policies for public utility vehicles to resort to ruinous tactics to sell their services. Notorious agents of these companies have engaged in predatory pricing -- selling the compulsory insurance coverage at an unbelievable discount of sixty to eighty percent (60 to 80%) off the market rate. The huge coverage and liability under the no-fault clause of the passenger accident insurance are grossly disproportionate to the small premiums actually being paid. Moreover, different persons or operators were issued certificates of cover (COC) or policies bearing the same number. Thus, claims under these policies were not paid, or payments were unreasonably delayed, resulting in prejudice to the riding public. The present case shows a clear public necessity to regulate the proliferation of such insurance companies. Because of the PUV operators complaints, the LTFRB thus assessed the situation. It found that in order to protect the interests of the riding p ublic and to resolve problems involving the passenger insurance coverage of PUVs, it had to issue Memorandum Circular No. 2001-001 authorizing the two-group system. Subsequently, it promulgated Memorandum Circular No. 2001-010 accrediting PAMI and PAIC II as the two groups allowed to participate in the program.

Memorandum Circular No. 2001-010 required that *a+ll public utility vehicles whose LTO license plate, as per latest LTO Official Receipt, with an EVEN middle number (0, 2, 4, 6 and 8) shall be insured with UCPB insurance (PAMI), while those with an ODD [11] middle number (1, 3, 5, 7 and 9) shall be insured with Great Domestic Insurance (PAIC 2) x x x. Undoubtedly, Memorandum Circular No. 2001-010 authorized and regulated two separate monopolies. In Garcia v. [12] Corona, the Court stated: The simplest form of monopoly exists when there is only one seller or producer of a product or service for which there are no substitute. 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 or purpose to exercise [13] such power. [14] It should be stressed that PUVs, as common carriers, are engaged in a business affected with public interest. Under Article 1756 of the Civil Code, in cases of death or injuries to passengers, common carriers are presumed to be at fault and are required to compensate the victims, unless they observed extraordinary diligence. To assure this compensation, PUVs are required to obtain [15] insurance policies. Even with this insurance requirement, the riding public remains at risk of inadequate cover, because many insurance companies are individually incapable of meeting the compensation standards. Worse, the pernicious competition and fraudulent practices described above have resulted in failure to meet the compensation requirements of the law. Indeed, in authorizing and regulating the two insurance monopolies, the LTFRB acted within its prerogatives in promoting public interest and protecting the riding public. After all, the consortia are open to all insurance companies, including petitioner. There is no discrimination against any legitimate insurer. On the whole, the public is given protection without unfair competition or undue restraint of trade. As the Court of Appeals pointed out, the two consortia are not engaged in the insurance business; they merely serve as service arms of their respective members. At bottom, the subject Memorandum Circulars were issued for the stated purpose of promoting public interest; and of protecting the riding public and PUV operators from being defrauded by fake, undervalued or misrepresented insurance policies. Grave Abuse of Discretion In alleging grave abuse of discretion on the part of the LTFRB, petitioner describes at length potential disasters to the insuring public that may result from the two-group system authorized by the assailed Circulars. Petitioner calls into question the wisdom of those Circulars by projecting scenarios which, however, cannot be properly addressed and resolved in the present case. Litigations are limited to resolving actual, not hypothetical, controversies. Doubts on the capability of the assailed Circulars to provide an adequate long-term solution to PUV operators insurance problems are not legally sufficient to strike down those Circulars. In our form of government, courts cannot inquire into the wisdom or the expediency of the acts of the executive or the legislative branches of government, unless there is a clear showing that those acts are constitutionally infirm or have been committed with grave abuse of discretion amounting to lack or excess of jurisdiction. In Angara v. Electoral Commission, Justice Laurel made it clear that the judiciary does not pass upon questions of wisdom, justice or expediency of legislation. And fittingly so for in the exercise of judicial power, we are allowed only to settle actual controversies involving rights which are legally demandable and enforceable, and may not annul an act of the political departments simply because we feel it is unwise or impractical. It is true that, under the expanded concept of the political question, we may now also determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any [16] branch or instrumentality of the Government. By grave abuse of discretion is meant such capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It must be grave, as when it is exercised arbitrarily or despotically by reason of passion or personal hostility; and such abuse must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal [17] to perform the duty enjoined or to act at all in contemplation of law. The jurisprudential elements of arbitrariness, despotism, passion and hostility have not been shown to exist under the present circumstances. Further, petitioner argues that the LTFRBs haste in accrediting PAMI and PAIC II is an indication of grave abuse of discretion. However, since the two-group system was to take effect starting March 1, 2001, accrediting the two groups on February 28, 2001 was not unreasonable. In the absence of contrary evidence, we must uphold the presumption of regularity in the performance of [18] duties by public officers. Authority and Jurisdiction Petitioner contends that in issuing the assailed Circulars, the LTFRB effectively delimited, regulated and controlled the business of passenger accident insurance. It argues that the Board acted without jurisdiction and usurped the exclusive jurisdiction of the Insurance Commission. [19] Executive Order No. 202, which created the LTFRB, conferred the following powers on the Board: SEC. 5. Powers and Functions of the Land Transportation Franchising and Regulatory Board. The Board shall have the following powers and functions: xxx xxx xxx

b. To issue, amend, revise, suspend or cancel Certificates of P ublic Convenience or permits authorizing the operation of public land transportation services provided by motorized vehicles, and to prescribe the appropriate terms and conditions therefore; xxx xxx xxx k. To formulate, promulgate, administer, implement and enforce rules and regulations on land transportation public utilities , standards of measurements and/or design, and rules and regulations requiring operators of any public land transportation service to equip, install and provide in their utilities and in their stations such devices, equipment facilities and operating procedures and techniques as may promote safety, protection, comfort and convenience to persons and property in their charges as well as the safety of persons and property within their areas of operations; l. To coordinate and cooperate with other government agencies and entities concerned with any aspect involving public land transportation services with the end in view of effecting continuing improvement of such services; and m. To perform such other functions and duties as may be provided by law, or as may be necessary, or proper or incidental to the purposes and objectives of this Executive Order. (Italics supplied) Paragraph b gives the LTFRB the power to prescribe appropriate terms and conditions for the issuance, amendment, revision, and suspension or cancellation of certificates of public convenience (CPC) or of permits authorizing the operation of public land transportation services. Under this paragraph, the Board has the prerogative to require, as a condition for the issuance of CPCs, that an applicant get insurance coverage from a particular group of insurance companies. Corollary to this power must necessarily be construed the authority of the LTFRB to require insurance companies to group themselves for the purpose of providing passenger accident insurance coverage. Paragraph m directly authorizes it to perfor m such other functions as may be necessary or incidental to the purposes and objectives of EO 202. By providing passenger accident insurance policies to operators of PUVs, insurance companies and their businesses directly affect public land transportation. By limiting its regulation of such companies to the segment of their business that directly affects public land transportation, the LTFRB has acted within its jurisdiction in issuing the assailed Circulars. Administrative bodies like the LTFRB have expertise in specific matters within the purview of their respective jurisdictions. Thus, the law concedes to them the power to promulgate rules and regulations to implement the policies of a given statute -provided such rules and regulations conform to the terms and standards prescribed by that statute and purport to carry its general [20] policies into effect. It should also be pointed out that before issuing the Circulars, the LTFRB made proper representation and coordination with the Insurance Commission, which had no objection to the two-consortia scheme. EASCOs Business Since petitioner has failed to show any cogent reason to strike down the assailed Circulars, their implementation cannot be restrained. They may indeed adversely affect its business, but the protection of the general welfare is of paramount importance. Petitioners individual business interests must be subordinated to the benefit of the greater number. Salus populi est suprema lex. [21] Sic utere tuo ut alienum non laedas. Publication Petitioner raises for the first time in its Memorandum the issue of the alleged noncompliance with the publication requirement, which must first be met before the assailed Circulars can be deemed valid. This argument is improper at this stage. Points of law, theories, issues and arguments not adequately brought to the attention of the lower court need not be -- and [22] ordinarily will not be -- considered by a reviewing court, as they cannot be raised for the first time on appeal. Indeed, it is settled jurisprudence that an issue that was neither raised in the complaint or in the court below cannot be raised for the first time on [23] appeal, as to do so would be offensive to the basic rules of fair play, justice, and due process. WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner. SO ORDERED.

19 G.R. No. 135385. December 6, 2000 ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL COMMISSION ON INDIGENOUS PEOPLES, respondents. PER CURIAM: Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and Regulations (Implementing Rules). Petitioners assail the constitutionality of the following provisions of the IPRA and its Implementing Rules on the ground that they amount to an unlawful deprivation of the State's ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution. Petitioners also content that, by providing for an all-encompassing definition of "ancestral domains" and "ancestral lands" which might even include private lands found within said areas, Sections 3(a) and 3(b) violate the rights of private landowners. ISSUE: Whether or not said PD is infact, violative of the constitution. HELD: After due deliberation on the petition, the members of the Court voted as follows: Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged provisions of R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged provisions of the law with the exception of Section 1, Part II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57 of the IPRA which he contends should be interpreted as dealing with the large-scale exploitation of natural resources and should be read in conjunction with Section 2, Article XII of the 1987 Constitution. On the other hand, Justice Mendoza voted to dismiss the petition solely on the ground that it does not raise a justiciable controversy and petitioners do not have standing to question the constitutionality of R.A. 8371. Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are unconstitutional. He reserves judgment on the constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases by those whose rights may have been violated by the IPRA. Justice Vitug also filed a separate opinion expressing the view that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the separate opinions of Justices Panganiban and Vitug. As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated upon. However, after redeliberation, thevoting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.