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G.R. No. 92285 March 28, 1994 PROVIDENT TREE FARMS, INC., petitioner, vs. HON. DEMETRIO M.

BATARIO, JR., Presiding Judge Branch 48, Regional Trial Court of Manila, COMMISSIONER OF CUSTOMS and A. J. INTERNATIONAL CORPORATION, respondents. Siguion Reyna, Montecillo & Ongsiako for petitioner. Sumulong, Sumulong, Paras & Abano Law Offices for private respondent.

BELLOSILLO, J.: PETITIONER PROVIDENT TREE FARMS, INC. (PTFI), is a Philippine corporation engaged in industrial tree planting. It grows gubas trees in its plantations in Agusan and Mindoro which it supplies to a local match manufacturer solely for production of matches. In consonance with the state policy to encourage qualified persons to engage in industrial tree plantation, Sec. 36, par. (1), of the Revised Forestry Code 1 confers on entities like PTFI a set of incentives among which is a qualified ban against importation of wood and "wood-derivated" products. On 5 April 1989, private respondent A. J. International Corporation (AJIC) imported four (4) containers of matches from Indonesia, which the Bureau of Customs released on 12 April 1989, and two (2) more containers of matches from Singapore on 19 April 1989. The records do not disclose when the second shipment was released. On 25 April 1989, upon request of PTFI, Secretary Fulgencio S. Factoran, Jr., of the Department of Natural Resources and Environment issued a certification that "there are enough available softwood supply in the Philippines for the match industry at reasonable price." 2 On 5 May 1989, PTFI filed with the Regional Court of Manila a complaint for injunction and damages with prayer for a temporary restraining order against respondents Commissioner of Customs and AJIC to enjoin the latter from importing matches and "wood-derivated" products, and the Collector of Customs from allowing and releasing the importations. It was docketed as Civil Case No. 89-48836 and raffled to respondent Judge Demetrio M. Batario, Jr. PTFI prays for an order directing the Commissioner of Customs to impound the subject importations and the AJIC be directed to pay petitioner P250,000.00 in actual damages, P1,000,000.00 in exemplary damages, and P50,000.00 as attorney's fees. On 14 June 1989, AJIC moved to dismiss the complaint alleging that: (a) The Commissioner of Customs under Sec. 1207 of the Tariff and Customs Code and not the regular court, has "exclusive jurisdiction to determine the legality of an importation or ascertain whether the conditions prescribed by law for an importation have been complied with . . . . (and over cases of) seizure, detention or release of property affected . . . . ;" 3 (b) The release of subject importations had rendered injunction moot and academic; 4 (c) The prayer for damages has no basis as the questioned acts of the Commissioner are in accordance with law and no damages may be awarded based on future acts; 5 and, (d) The complaint for injunction cannot stand it being mainly a provisional relief and not a principal remedy. 6

PTFI opposed the motion to dismiss. On 28 July 1989, AJIC's motion to dismiss was denied. However, on 8 February 1990, on motion for reconsideration by AJIC and despite the opposition of PTFI, the Court reconsidered its 28 July 1989 order and dismissed the case on the ground that it had "no jurisdiction to determine what are legal or illegal importations." 7 In this present recourse, PTFI seeks to set aside the 8 February 1990 order of respondent court and prays for the continuation of the hearing in Civil Case No. 89-48836. PTFI claims that what was brought before the trial court was a civil case for injunction, i.e., "restraining the entry of safety matches into the country . . . for the purpose of securing compliance with Sec. 36 (l) of the Forestry Code" and for damages, "to seek redress of its right which has been clearly violated by the importation of safety matches . . . . (which) is a denial to the petitioner of the protection and incentive granted it by Section 36 (l) of the Forestry Code . . . ." 8 PTFI asserts the inapplicability of the procedures outlined in R.A. No. 1125 relative to incidents before the Court of Tax Appeals because the instant action is not a protest case where the aggrieved party is not an importer. It then argues that since it could not avail of the remedies afforded by the Tariff and Customs Code, resort to the courts is warranted, citing Commissioner of Customs v. Alikpala. 9 On the formal requirements, we hold that the claim of public respondent that the petition was filed late has no basis. The records revealed that PTFI received the assailed order of 8 February 1990 on 20 February 1990, 10 hence, it had until 7 March 1990 to file petition for review on certiorari. On that date, PTFI filed a motion for extension of fifteen (15) days within which to file the petition. 11 On 19 March 1990, this Court granted PTFI a thirty (30)-day non-extendible period to file its petition, 12 thus resetting the new deadline for the petition to 6 April 1990. On that date the petition was filed. Petitioner anchors his complaint on a statutory privilege or incentive granted under Sec. 36, par. (l), of the Revised Forestry Code. The only subject of this incentive is a ban against importation of wood, wood products or wood-derivated products which is to be enforced by the Bureau of Customs since it has, under the Tariff and Customs Code, the exclusive original jurisdiction over seizure and forfeiture cases 13 and, in fact, it is the duty of the Collector of Customs to exercise jurisdiction over prohibited importations. 14 The enforcement of the importation ban under Sec. 36, par. (l), of the Revised Forestry Code is within the exclusive realm of the Bureau of Customs, and direct recourse of petitioner to the Regional Trial Court to compel the Commissioner of Customs to enforce the ban is devoid of any legal basis. To allow the regular court to direct the Commissioner to impound the imported matches, as petitioner would, is clearly an interference with the exclusive jurisdiction of the Bureau of Customs over seizure and forfeiture cases. An order of a judge to impound, seize or forfeit must inevitably be based on his determination and declaration of the invalidity of the importation, hence, an usurpation of the prerogative and an encroachment on the jurisdiction of the Bureau of Customs. In other words, the reliefs directed against the Bureau of Customs 15 as well as the prayer for injunction against importation of matches by private respondent AJIC 16 may not be granted without the court arrogating upon itself the exclusive jurisdiction of the Bureau of Customs. The claim of petitioner that no procedure is outlined for the enforcement of the import ban under the Tariff and Customs Code, if true, does not at all diminish the jurisdiction of the Bureau of Customs over the subject matter. The enforcement of statutory rights is not foreclosed by the absence of a statutory procedure. The Commissioner of Customs has the power to "promulgate all rules and regulations necessary to enforce the provisions of this (Tariff and Customs) Code . . . subject to the approval of the Secretary of Finance." 17 Moreover, it has been held that ". . . . (w)here the statute does not require any particular method of procedure to be followed by an administrative agency, the agency may adopt any reasonable method to carry out its functions." 18

But over and above the foregoing, PTFI's correspondence with the Bureau of Customs 19 contesting the legality of match importations may already take the nature of an administrative proceeding the pendency of which would preclude the court from interfering with it under the doctrine of primary jurisdiction. In Presidential Commission on Good Government v. Pea, 20 we held that . . . . under the "sense-making and expeditious doctrine of primary jurisdiction . . . the courts cannot or will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the purposes of the regulatory statute administered (Pambujan Sur United Mine Workers v. Samar Mining Co., Inc., 94 Phil. 932, 941 [1954].) In this era of clogged court dockets, the need for specialized administrative boards or commissions with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters or essentially factual matters, subject to judicial review in case of grave abuse of discretion, has become well nigh indispensable . . . . Moreover, however cleverly the complaint may be worded, the ultimate relief sought by PTFI is to compel the Bureau of Customs to seize and forfeit the match importations of AJIC. Since the determination to seize or not to seize is discretionary upon the Bureau of Customs, the same cannot be subject of mandamus. But this does not preclude recourse to the courts by way of the extraordinary relief of certiorari under Rule 65 of the Rules of Court if the Bureau of Customs should gravely abuse the exercise of its jurisdiction. Otherwise stated, the court cannot compel an agency to do a particular act or to enjoin such act which is within its prerogative, except when in the exercise of its authority it gravely abuses or exceeds its jurisdiction. In the case at bench, we have no occasion to rule on the issue of grave abuse of discretion or excess of jurisdiction as it is not before us. The petitioner's claim for damages against AJIC being inextricably linked with the legality of the importations, must necessarily rise or fall with the main action to bar the question that "(e)very importation of matches by said defendant is a denial to plaintiff of the protection and incentives granted it by Sec. 36 (l) of the Forestry Code," 21 merely indicates its reliance on the illegality of the importations for its prayer for damages. In other words, if the importations were authorized, there would be no denial of the plaintiff's protection and incentives under the Forestry Code. Necessarily, the claim for damages must await the decision declaring the importations unlawful. In Rosales v. Court of Appeals, we categorized a similar case for damages as premature since "(t)he finality of the administrative case which gives life to petitioners' cause of action has not yet been reached." 22 The pendency of petitioner's request to the Bureau of Customs for the implementation of the ban against the importation of matches under the Forestry Code is impliedly admitted; in fact, it is apparent from the correspondence of counsel for petitioner that the Bureau is inclined to sustain the validity of the importations. 23 Hence, as in Rosales, the order of the trial court granting the dismissal of the civil case must be upheld. WHEREFORE, finding no reversible error in the appealed Order of the Regional Trial Court of Manila in Civil Case No. 89-48836 dated 8 February 1990, the same AFFIRMED and, consequently, the instant petition for review is DENIED.

Davide, Jr., Quiason and Kapunan, JJ., concur. Cruz, J., took no part.

#Footnotes

1 Sec. 36, par. (l), of the Revised Forestry Code of the Philippines, P.D. No. 705, as amended by P.D. No. 1559 of 11 June 1978 provides: ". . . . No wood, wood products or wood-derivated products including pulp, paper and paperboard shall be imported if the same are available in required quantities and reasonable prices, as may be certified by the Department Head, from artificial or man-made forests, or local processing plants manufacturing the same . . . ." 2 Annex "B-1", Petition, Rollo, p. 37. 3 Motion to Dismiss, pp. 2-3, Annex "C", Petition, Rollo, pp. 39-40. 4 Id., p. 6, Rollo, p. 43. 5 Id., pp. 6-7, Rollo, pp. 43-44. 6 Id., p. 7, Rollo, p. 44.. 7 Order of 8 February 1990, Annex "A", Petition Rollo, p. 28-29. 8 Petition, pp. 6-9, Rollo, pp. 19-22. 9 No. L-32542, 26 November 1970, 36 SCRA 208. 10 Motion for Extension of Time to File Petition for Review on Certiorari, p. 1; Rollo, p. 2. 11 Id. 12 Rollo, p. 4-A. 13 Sec. 602 (g), of the Tariff and Customs Code provides: "The general duties, powers and jurisdiction of the bureau shall include . . . . Exercise exclusive original jurisdiction over seizure and forfeiture cases under the tariff and customs laws." 14 Sec. 1207, of the Tariff and Customs Code provides: "Where articles are of prohibited importation or subject to importation only upon conditions prescribed by law, it shall be the duty of the Collector to exercise such jurisdiction in respect thereto as will prevent importation or otherwise secure compliance with all legal requirements." 15 ". . . . A temporary restraining injunction/writ of preliminary injunction be issued against . . . . (d)efendant Commissioner of Customs, commanding and ordering said

defendant from allowing the importation of matches and other derivated products, or if such importations have been made and are in his custody, from releasing the same, as such importations is prohibited by law, i. e., Forestry Code, Section 36 . . . . After hearing, that said injunction be made permanent . . . . That defendant Commissioner of Customs be ordered to impound the shipments complained of . . . . " (Complaint, pp. 5-6, Rollo, pp. 34-35.) 16 ". . . . A temporary restraining injunction/writ of preliminary injunction be issued against . . . . (d)efendant A. J. International Corporation, commanding and/or ordering said defendant to cease and desist from importing matches and/or wood derivated products in violation of the Forestry Code . . . . After hearing, that said injunction be made permanent . . . ." (Complaint, pp. 5-6, Rollo, pp. 34-35.) 17 Sec. 608, Tariff and Customs Code. 18 2 Am Jur 2d 340, pp. 155-156, citing Douglas County v. State Bd. of Equalization and Assessment, 158 Neb 325, 63 NW 2d 449; State ex rel. York v. Walla Walla County, 28 Wash 2d 891, 184 P 2d 577, 172 ALR 1001. 19 Annex "A", Memorandum for Private Respondent, Rollo, p. 138-139. In part the letter of Siguion Reyna, Montecillo and Ongsiako in behalf of PTFI to the Bureau of Customs, Collection District II-B, dated 10 January 1990 reads: "We refer to your letter December 7, 1989, which is in reply to our letter of November 4, 1989 requesting for the implementation of Section 36 (l) of the Forestry Code., i.e., prohibition on importation of safety matches. With due respect to the opinion rendered by your office that ". . . there is no law or regulation prohibiting the importation of matches," we wish to reiterate that Section 36 (l) of the Forestry Code clearly prohibits the importation of "wood, wood products or wood derivated products." . . . . With respect to your opinion that "what is being protected is the matchwood timber industry, not the match industry," we wish to emphasize that the survival of thematch wood timber industry depends upon the survival of the local match industry the existence of which is gravely threatened by the importation of matches . . . . " 20 No. L-77663, 12 April 1988, 158 SCRA 556, 567-568. 21 Par. 10, Complaint, Annex "B," Petition, Rollo, p. 32. 22 No. L-47821, 15 September 1988, 165 SCRA 344, 350. 23 See note 19.

G.R. No. L-46772 February 13, 1992 PEOPLE OF THE PHILIPPINES, petitioner, vs. COURT OF FIRST INSTANCE OF QUEZON (BRANCH VII), GODOFREDO ARROZAL AND LUIS FLORES, respondents. Felipe B. Pagkanlungan for private respondents.

MEDIALDEA, J.: This petition seeks the annulment of the order of the Court of First Instance (now Regional Trial Court) of Quezon in Criminal Case No. 1591, entitled "People of the Philippines vs. Godofredo, Arrozal, Luis Flares and twenty other John Does," dismissing the information filed therein. The antecedent facts are as follows: The private respondents were charged with the crime of qualified theft of logs, defined and punished under Section 68 of Presidential Decree No. 705, otherwise known as the Revised Forestry Code of the Philippines, in an information which read: That on or about the 28th, 29th and 30th days of July 1976, at Barangay Mahabang Lalim, Municipality of General Nakar, Province of Quezon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, Godofredo Arrozal and Luis Flores, together with twenty (20) other John Does whose identities are still unknown, the first-named accused being the administrator of the Infanta Logging Corporation, with intent to gain, conspiring and confederating together and mutually helping one another, did then and there willfully, unlawfully and feloniously enter the privately-owned land of one Felicitacion Pujalte, titled in the name of her deceased father, Macario Prudente, under Original Certificate of Title No. 6026, and once inside, illegally cut, gather, take, steal and carry away therefrom, without the consent of the said owner and without any authority under a license agreement, lease license or permit, sixty (60) logs of different species, consisting of about 541.48 cubic meters, with total value of FIFTY THOUSAND TWO HUNDRED FIVE PESOS and FIFTY TWO CENTAVOS (P50,205.52) including government charges, to the damage and prejudice of the said owner in the aforesaid amount. Contrary to Law. Lucena City, 7 January 1977. (p.17, Rollo). On March 23, 1977, the named accused filed a motion to quash the information on two (2) grounds, to wit: (1) that the facts charged do not constitute an offense; and, (2) that the information does not conform substantially to the prescribed form. On April 13, 1977, the trial court dismissed the information on the grounds invoked (pp. 32-42, Rollo), The reconsideration sought was denied on August 9, 1977 (p.42, Rollo).

On October 15, 1977, this petition was filed directly with this Court, raising the following questions of law: (1) whether or not the information charged an offense; and (2) whether or not the trial court had jurisdiction over the case. On the first issue, the People alleged that, contrary to the allegation of the private respondents and the opinion of the trial court, the information substantially alleged all the elements of the crime of qualified theft of logs as described in Section 68 of P.D. 705. While it was admitted that the information did not precisely allege that the taking of the logs in question was "without the consent of the state," nevertheless, said information expressly stated that the accused "illegally cut, gather, take, steal and carry away therefrom, without the consent of said owner and without any authority under a license agreement, lease, lease, license or permit, sixty (60) logs of different species. . . ." Since only the state can grant the lease, license, license agreement or permit for utilization of forest resources, including timber, then the allegation in the information that the asportation of the logs was "without any authority" under a license agreement, lease, license or permit, is tantamount to alleging that the taking of the logs was without the consent of the state. We agree with the petitioner. Sec. 68. Cutting, gathering and/or collecting timber or other products without license. Any person who shall cut, gather, collect or remove timber or other forest products from any forest land, or timber from alienable or disposable public lands, or from private lands, without any authority under a license agreement, lease, license or permit, shall be guilty of qualified theft as defined and punished under Articles 309 and 310 of the Revised Penal Code. . . . When an accused invokes in a motion to quash the ground that the facts charged do not constitute an offense (Rule 117, Sec. 2 [a] Rules of Court), the sufficiency of the Information hinges on the question of whether the facts alleged, if hypothetically admitted, meet the essential elements of the offense defined in the law (People v. Segovia, 103 Phil. 1162 [1958]; People v. Abad, L-55132, August 30, 1988, 165 SCRA 57). The elements of the crime of qualified theft of logs are: 1) That the accused cut, gathered, collected or removed timber or other forest products; 2) that the timber or other forest products cut, gathered, collected or removed belongs to the government or to any private individual; and 3) that the cutting, gathering, collecting or removing was without authority under a license agreement, lease, license, or permit granted by the state. The Order dismissing the complaint concluded that the information was defective because: . . ., it is noted that the Information alleges that the cutting, gathering and carrying away of the logs were done without the consent of the owner of the land. While the prosecution admits that timber is a forest product that belongs to the state, the information, however, fails to allege that the taking was without the consent of the latter, for which reason the Information is patently defective. (p. 39, Rollo) The failure of the information to allege that the logs taken were owned by the state is not fatal. It should be noted that the logs subject of the complaint were taken not from a public forest but from a private woodland registered in the name of complainant's deceased father, Macario Prudente. The fact that only the state can grant a license agreement, license or lease does not make the state the owner of all the logs and timber products produced in the Philippines including those produced in private woodlands. The case of Santiago v. Basilan Company, G.R. No. L-15532, October 31, 1963, 9 SCRA 349, clarified the matter on ownership of timber in private lands. This Court held therein:

The defendant has appealed, claiming that it should not be held liable to the plaintiff because the timber which it cut and gathered on the land in question belongs to the government and not to the plaintiff, the latter having failed to comply with a requirement of the law with respect to his property. The provision of law referred to by appellant is a section of the Revised Administrative Code, as amended, which reads; "Sec. 1829. Registration of title to private forest land. Every private owner of land containing timber, firewood and other minor forest products shall register his title to the same with the Director of Forestry. A list of such owners, with a statement of the boundaries of their property, shall be furnished by said Director to the Collector of Internal Revenue, and the same shall be supplemented from time to time as occasion may require. Upon application of the Director of Forestry the fiscal of the province in which any such land lies shall render assistance in the examination of the title thereof with a view to its registration in the Bureau of Forestry." In the above provision of law, there is no statement to the effect that non-compliance with the requirement would divest the owner of the land of his rights thereof and that said rights of ownership would be transferred to the government. Of course, the land which had been registered and titled in the name of the plaintiff under that Land Registration Act could no longer be the object of a forester license issued by the Director of Forestry because ownership of said land includes also ownership of everything found on its surface (Art. 437, New Civil Code). Obviously, the purpose of the registration required in section 1829 of the Administrative Code is to exempt the title owner of the land from the payment of forestry charges as provided for under Section 266 of the National Internal Revenue Code, to wit: "Charges collective on forest products cut, gathered and removed from unregistered private lands. The charges above prescribed shall be collected on all forest products cut, gathered and removed from any private land the title to which is not registered with the Director of Forestry as required by the Forest Law; Provided, however, That in the absence of such registration, the owner who desires to cut, gather and remove timber and other forest products from such land shall secure a license from the Director of Forestry Law and Regulations. The cutting, gathering and removing of timber and the other forest products from said private lands without license shall be considered as unlawful cutting, gathering and removing of forest products from public forests and shall be subject to the charges prescribed in such cases in this chapter. xxx xxx xxx On the other hand, while it is admitted that the plaintiff has failed to register the timber in his land as a private woodland in accordance with the oft-repeated

provision of the Revised Administrative Code, he still retained his rights of ownership, among which are his rights to the fruits of the land and to exclude any person from the enjoyment and disposal thereof (Art. 429, New Civil Code) the very rights violated by the defendant Basilan Lumber Company. While it is only the state which can grant a license or authority to cut, gather, collect or remove forest products it does not follow that all forest products belong to the state. In the just cited case, private ownership of forest products grown in private lands is retained under the principle in civil law that ownership of the land includes everything found on its surface. Ownership is not an essential element of the offense as defined in Section 60 of P.D. No. 705. Thus, the failure of the information to allege the true owner of the forest products is not material; it was sufficient that it alleged that the taking was without any authority or license from the government. Anent the second issue raised, Section 80 of Presidential Decree 705, provides: Sec. 80. Arrest; Institution of Criminal Actions. A forest officer or employee of the Bureau shall arrest even without warrant any person who has committed or is committing in his presence any of the offenses defined in this Chapter. He shall also seize and confiscate, in favor of the Government, the tools and equipment used in committing the offense, and the forest products cut, gathered or taken by the offender in the process of committing the offense. The arresting forest officer or employee shall thereafter deliver within six (6) hours from the time of arrest and seizure, the offender and the confiscated forest products, tools and equipment to, and file the proper complaint with, the appropriate official designated by law to conduct preliminary investigations and file informations in court. If the arrest and seizure are made in the forests, far from the authorities designated by law to conduct preliminary investigations, the delivery to, and filing of the complaint with, the latter shall be done within a reasonable time sufficient for ordinary travel from the place of arrest to the place of delivery. The seized products, materials and equipment shall be immediately disposed of in accordance with forestry administrative orders promulgated by the Department Head. The Department Head may deputize any member or unit of the Philippine Constabulary, police agency, barangay or barrio official, or any qualified person to protect the forest and exercise the power or authority provided for in the preceding paragraph. Reports and complaints regarding the commission of any of the offenses defined in this Chapter, not committed in the presence of any forest officer or employee, or any of the deputized officers or officials, shall immediately be investigated by the forest officer assigned in the area where the offense was allegedly committed, who shall thereupon receive the evidence supporting the report or complaint. If there is a prima facie evidence to support the complaint or report, the investigating forest officer shall file the necessary complaint with the appropriate official authorized by law to conduct a preliminary investigation of criminal cases and file an information in Court. The above cited provision covers two (2) specific instances when a forest officer may commence a prosecution for the violation of the Revised Forestry Code of the Philippines. The first authorizes a

forest officer or employee of the Bureau of Forestry to arrest without a warrant, any person who has committed or is committing, in his presence, any of the offenses described in the decree. The second covers a situation when an offense described in the decree is not committed in the presence of the forest officer or employee and the commission is brought to his attention by a report or a complaint. In both cases, however, the forest officer or employee shall investigate the offender and file a complaint with the appropriate official authorized by law to conduct a preliminary investigation and file the necessary informations in court. The circumstances in the instant case do not fall under any of the situations covered by Section 80 of P.D. 705. The alleged offense was committed not in the presence of a forest officer and neither was the alleged commission reported to any forest officer. The offense was committed in a private land and the complaint was brought by a private offended party to the fiscal. The trial court erred in dismissing the case on the ground of lack of jurisdiction over the subject matter because the information was filed not pursuant to the complaint of any forest officer as prescribed in Section 80 of P.D. 705. We agree with the observation of the Solicitor General that: . . ., the authority given to the forest officer to investigate reports and complaints regarding the commission of offenses defined in P.D. No. 705 by the said last and penultimate paragraphs of Section 80 may be considered as covering only such reports and complaints as might be brought to the forest officer assigned to the area by other forest officers or employees of the Bureau of Forest Development, or any of the deputized officers or officials, for violations of forest laws not committed in their presence. Such interpretation becomes cogent when we consider that the whole of Section 80 deals precisely with the authority of forest officers or employees to make arrests and institute criminal actions involving offenses defined in the Decree. (p. 26, Rollo). Likewise, the Solicitor General was correct in insisting that P.D. 705 did not repeal Section 1687 of the Administrative Code giving authority to the fiscal to conduct investigation into the matter of any crime or misdemeanor and have the necessary information or complaint prepared or made against persons charged with the commission of the crime. Sec. 1687. Authority of fiscal to conduct investigation in criminal matter. A provincial fiscal shall have authority, if he deems it wise, to conduct an investigation into the matter of any crime or misdemeanor. To this end, he may summon reputed witnesses and require them to appear and testify upon oath before him. . . . With the exception of the so-called "private crimes" 1 and in election offenses, 2 prosecutions in Courts of First Instance may be commenced by an information signed by a fiscal after conducting a preliminary investigation. Section 80 of P.D. 705 did not divest the fiscals of this general authority. Neither did the said decree grant forest officers the right of preliminary investigations. In both cases under said Sec. 80 namely, 1) after a forest officer had made the arrest (for offenses committed in his presence); or 2) after conducting an investigation of reports or complaints of violations of the decree (for violations not committed in his presence) he is still required to file the proper complaint with the appropriate official designated by law to conduct preliminary investigations in court. Said section should not be interpreted to vest exclusive authority upon forest officers to conduct investigations regarding offenses described in the decree rather, it should be construed as granting forest officers and employees special authority to arrest and investigate offenses described in P.D. 705, to reinforce the exercise of such authority by those upon whom it is vested by general law.

ACCORDINGLY, the petition is GRANTED. The questioned order of the trial court dismissing the information is SET ASIDE. Criminal Cases No. 1591 is reinstated. SO ORDERED. Narvasa, C.J., Cruz and Grio-Aquino, JJ., concur.

Footnotes 1 Concubinage, adultery, seduction, abduction, rape, acts of lasciviousness and defamation imputing any of the aforesaid offenses where the rule provides that these crimes shall not be prosecuted except upon a complaint filed by the offended party. 2 In People v. Inting, G.R. No. 88919, July 25, 1990, 187 SCRA 788, We hold that the Comelec has the exclusive power to conduct preliminary investigations in cases involving election offenses and to prosecute such offenses. However, if the Comelec fails to act on any complaint within two (2) months from filing, the complainant may file the complaint with the office of the Fiscal or with the Department of Justice for preliminary investigation and prosecution, if warranted.

G.R. No. L-44649 April 15, 1988 DAYLINDA A. LAGUA, MANUEL P. LAGUA, HONORATO ACHANZAR and RESTITUTO DONGA, petitioners, vs. HONORABLE VICENTE N. CUSI, JR., in his capacity as Presiding Judge of the Court of First Instance of Davao City, Branch I, CONSTANCIO MAGLANA and the EASTCOAST DEVELOPMENT ENTERPRISES,respondents. Wilfred D. Asis for petitioner. Carlos A. Carbonilla for respondents.

GUTIERREZ, JR., J.: This petition for mandamus originated from a complaint for damages which was instituted by the petitioners against the private respondents for closing a logging road without authority. In their complaint, the petitioners, alleged, among others: In Paragraph 5(a): a) On 1 January 1976, Atty. Ernesto Nombrado, legal counsel for defendants, issued a memorandum to the Chief Security Guard of Defendant Eastcoast directing the latter to prevent the passage of Plaintiff Laguas' hauling trucks loaded with logs for the Japanese vessel (there were no other trucks hauling logs at that time) on the national highway loading towards where the vessel was berthed. In compliance with this directive, the security force of Defendant Eastcoast closed the road to the use by plaintiffs trucks and other equipments and effectively prevented their passage thereof while the vehicles and trucks of other people were curiously not disturbed and were allowed passess on the same road. It resulted that the loading of logs on the M/S "Kyofuku Maru" was discontinued. A xeroxed copy of this Nombrado memorandum, the original of which is however in the possession of defendants, is hereto attached as Annex "C" and made an integral part hereof. In Paragraph 5(b): b) Upon representations made to Indalecio L. Aspiras, Acting Station Officer-inCharge, BFD Lambajon Forest Station, and in response to plaintiff Laguas' complaint, a letter dated 2 January 1976 was addressed by Aspiras to the Resident Manager of Defendant Eastcoast with instructions to open and allow Plaintiff Laguas' trucks and machineries to pass that road closed to them (but not to others) by Defendant Eastcoast. A xeroxed copy of this letter is hereto attached as Annex "D" and made a part hereof. Accordingly, Sagrado Constantino, Resident Manager of Defendant Eastcoast, issued an order to their Chief Security Guard for the latter to comply with the Aspiras letter. These events, however, took the whole day of 2 January 1976 so that notwithstanding the lifting of the road closure no hauling of logs could be made by Plaintiff Laguas on that day.

In Paragraph 5(c): c) When Plaintiffs Laguas were already resuming the hauling operations of their logs towards the Japanese Vessel on 3 January 1976, again that same road, only the day before ordered by the BFD to be opened for use and passage by plaintiffs, was closed to them by Defendant Eastcoast's security men upon a radio message order of Defendant Maglana. Even the vessel M/S "Kyofuku Maruwas" ordered by Defendant Maglana to untie her anchor contrary to existing laws, rules and regulations of the Bureau of Customs and the Philippine Coastguard. A xeroxed copy of the Maglana message, the original of which is in the possession of the defendants, is hereto attached as Annex "E" and made an integral part hereof. And in paragraph 5(d): d) Given no recourse in the face of the blatant and illegal closure of the road in defiance of BFD orders to the contrary by the Defendant Eastcoast through the order of Defendant Maglana, Plaintiff Laguas had to depart postpaste to Mati, Davao Oriental, from Baganga where the shipment and the road closure were made, to seek the assistance of the PC thereat. Thus on 5 January 1976, Provincial Commander Alfonso Lumebao issued a directive to the PC Detachment Commander at Baganga to lift the illegal checkpoint made by defendants. A xeroxed copy of this directive is hereto attached as Annex "F" and made a part hereof. (Rollo, pp. 57-58) The private respondents filed a motion to dismiss on two grounds, namely: (1) lack of jurisdiction, and (2) lack of cause of action. The private respondents extended that as the acts complained of by the petitioners arose out of the legitimate exercise of respondent Eastcoast Development Enterprises, Inc., rights as a timber licensee, more particularly in the use of its logging roads, therefore, the resolution of this question is properly and legally within the Bureau of Forest Development, citing as authority Presidential Decree (P.D.) No. 705. The private respondents also argued that petitioner Daylinda Laguas has no capacity to sue as her name was not registered as an "agent" or "dealer" of logs in the Bureau of Forestry. On August 3, 1976, the trial court issued the questioned order dismissing the petitioners' complaint on the basis of the abovementioned grounds. It ruled: The Court agrees with the defendants that under the law, the Bureau of Forest Development has the exclusive power to regulate the use of logging road and to determine whether their use is in violation of laws. Since the damages claimed to have been sustained by the plaintiffs arose from the alleged illegal closure of a logging road in the language of the defendants on page 3 of their motion to dismiss. The simple fact is there was an illegal closure of the national highway affecting the private rights of the plaintiffs who sustained damages and losses as a consequence thereof the question whether or not the road was illegally closed must first be determined by the Bureau of Forest Development. If the said Bureau finds that the road was legally closed, an action for damages may be filed in Court. Otherwise, no civil action would prosper, for there would be no tortious act. (Rollo, pp. 58-69). xxx xxx xxx

After the logging road was closed for the first time, more so after the second time, by the defendant Eastcoast Development Enterprises, Inc., the plaintiffs should have asked the Bureau of Forest Development to determine the legality or illegality of the closure since they wanted to file, as they did file, an action for damages based on the alleged illegal closure. The fact that the letter of January 2, 1976, directed defendant Eastcoast Development Enterprises, Inc. to open the road does not necessarily mean that the Bureau of Forest Development had found that the closure was illegal. There must be a positive finding that the closure was illegal. ... (Rollo, p. 60) xxx xxx xxx As an attorney-in-fact, Daylinda A. Lagua is not entitled to, and cannot cannot claim, damages in her personal capacity. For she could not have sustained damages as a result of the alleged illegal closure of the road in her personal capacity while acting in her representative capacity. So if she and her husband sustained damages, it must have been because their legal rights were violated by a tortious act committed by the defendants other than the alleged illegal closure of the road. But as stated elsewhere in this order, even the plaintiffs admit that the damages they claimed to have sustained arose from the alleged illegal closure of the logging road. Assuming, however, that another tortious act violated the legal rights of the Laguas, still they could not joint Achanzar and Donga in this complaint for there would be misjoinder of parties. (Rollo, pp. 61-62) Hence, this petition for mandamus which we will treat as a petition for certiorari in the interest of justice. The petitioners maintain that since their action is for damages, the regular courts have jurisdiction over the same. According to them, the respondent court had no basis for holding that the Bureau of Forestry Development must first determine that the closure of a logging road is illegal before an action for damages can be instituted. We agree. P.D. No. 705 upon which the respondent court based its order does not vest any power in the Bureau of Forest Development to determine whether or not the closure of a logging road is legal or illegal and to make such determination a pre-requisite before an action for damages may be maintained. Moreover, the complaint instituted by the petitioners is clearly for damages based on the alleged illegal closure of the logging road. Whether or not such closure was illegal is a matter to be established on the part of the petitioners and a matter to be disproved by the private respondents. This should appropriately be threshed out in a judicial proceeding. It is beyond the power and authority of the Bureau of Forest Development to determine the unlawful closure of a passage way, much less award or deny the payment of damages based on such closure. Not every activity inside a forest area is subject to the jurisdiction of the Bureau of Forest Development. As we have held in Ateneo de Manila University v. Court of appeals (145 SCRA 100, 110): The issue in this court was whether or not the private respondents can recover damages as a result of the of their son from the petitioner university. This is a purely legal question and nothing of an a administrative nature is to or can be done (Gonzales v. Hechanova, 9 SCRA 230; Tapales v. University of the Philippines, 7 SCRA 533; Limoico v. Board of Administrators. (PJA) 133 SCRA 43; Malabanan v. Ramonte, 129 SCRA 359). The case was brought pursuant to the law on damages provided in the Civil Code. The jurisdiction to try the case belongs to the civil courts.

The private respondents, in their memorandum filed with the respondent court, alleged that the logs of petitioner Achanzar were cut down and removed outside of the area granted to the latter under his Private Timber License No. 2 and therefore inside the concession area of respondent company's Timber License Agreement. This, apparently, was the reason why the respondent company denied to the petitioners the use of the logging road. If we hold the respondents to their contention that the Bureau of Forest Development has the power and authority not only to regulate the use or blockade of logging roads but also to exclusively determine the legality of a closure of such roads, why then did they take it upon themselves to initially close the disputed logging road before taking up the matter with the Bureau and why did they close it again notwithstanding the Bureau's order to open it after the petitioners had duly informed the said Bureau of the closure? To use the Bureau's authority which the respondents ignored to now defeat the court's jurisdiction would be totally unacceptable. We, therefore, find that the trial court committed grave abuse of discretion in dismissing the complaint on the ground of lack of jurisdiction over the subject matter. Anent the legal capacity to sue of the petitioners, spouses Laguas, we affirm the trial court's ruling that since they were mere agents of petitioners Achanzar and Donga and were suing in their own behalf, they did not have the capacity to sue for damages. They are not the real parties in interest. However, the complaint can still be maintained. It cannot be dismissed because the real parties in interest, Achanzar and Donga were also plaintiffs. Thus, the trial court should have ordered only the dropping of the names of the spouses Laguas pursuant to Section 11, Rule 3 of the Revised Rules of Court but not the dismissal of the complaint. WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The questioned order of the respondent court is SET ASIDE and this case is ordered remanded to the court of origin for trial on the merits SO ORDERED. Fernan, (Chairman), Feliciano, Bidin and Cortes, JJ., concur.

G.R. No. 165448

July 27, 2009

ERNESTO AQUINO, Petitioner, vs. PEOPLE OF THE PHILIPPINES, Respondent. DECISION CARPIO, J.: The Case Before the Court is a petition for review1 assailing the 5 June 1997 Decision2 and 24 September 2004 Resolution3of the Court of Appeals in CA-G.R. CR No. 17534. The Antecedent Facts On behalf of Teachers Camp, Sergio Guzman filed with the Department of Environment and Natural Resources (DENR) an application to cut down 14 dead Benguet pine trees within the Teachers Camp in Baguio City. The trees, which had a total volume of 13.37 cubic meters, were to be used for the repairs of Teachers Camp. On 19 May 1993, before the issuance of the permit, a team composed of members from the Community Environment and Natural Resources Office (CENRO) and Michael Cuteng (Cuteng), a forest ranger of the Forest Section of the Office of the City Architect and Parks Superintendent of Baguio City, conducted an inspection of the trees to be cut. Thereafter, Sabado T. Batcagan, Executive Director of the DENR, issued a permit allowing the cutting of 14 trees under the following terms and conditions: 2. That the cut timber shall be utilized as lumber and fuel-wood by the permittee; 3. As replacement, the permittee shall plant one hundred forty (140) pine seedlings in an appropriate place within the area. In the absence of plantable area in the property, the same is required to plant within forest area duly designated by CENRO concerned which shall be properly maintained and protected to ensure/enhance growth and development of the planted seedlings; 4. Violation of any of the conditions set hereof is punishable under Section 68 of PD 705 as amended by E.O. No. 277, Series of 1987; and 5. That non-compliance with any of the above conditions or violations of forestry laws and regulations shall render this permit null and void without prejudice to the imposition of penalties in accordance with existing laws and regulations. This PERMIT is non-transferable and shall expire ten (10) days from issuance hereof or as soon as the herein authorized volume is exhausted whichever comes first.4 On 23 July 1993, Forest Rangers Ramil Windo, Moises Sobrepea, Daniel Salamo, Pablo Guinawan, Antonio Abellera, and Forester Paul Apilis received information that pine trees were being cut at Teachers Camp without proper authority. They proceeded to the site where they found

Ernesto Aquino (petitioner), a forest ranger from CENRO, and Cuteng supervising the cutting of the trees. They also found sawyers Benedicto Santiago (Santiago) and Mike Masing (Masing) on the site, together with Clemente Salinas (Salinas) and Andrew Nacatab (Nacatab), who were also supervising the cutting of the trees. The forest rangers found 23 tree stumps, out of which only 12 were covered by the permit. The volume of the trees cut with permit was 13.58 cubic meters while the volume of the trees cut without permit was 16.55 cubic meters. The market value of the trees cut without permit wasP182,447.20, and the forest charges were P11,833.25. An Information for violation of Section 68 of Presidential Decree No. 7055 (PD 705) was filed against petitioner, Cuteng, Nacatab, Masing, and Santiago, as follows: That on or about the 23rd day of July, 1993, and subsequent thereto, in the City of Baguio, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating and mutually aiding one another, and without any authority, license or permit, did then and there willfully, unlawfully and feloniously cut nine (9) pine trees with a total volume and market price as P182,447.20 (Volume 16.55 M3 424 bd. ft./M3 and unit price P26.00 bd. ft.) and with a total forest charge of P11,833.25 or having a total sum of P194,280.45 at Teachers Camp, Baguio City, without the legal documents as required under existing forest laws and regulations, particularly the Department of Environment and Natural Resources Circular No. 05, Series of 1989, in violation of the aforecited law.6
lawphil

Masing alleged that he was not aware of the limitations on the permit as he was not given a copy of the permit. Masing stated that he cut 10 pine trees under the supervision of petitioner who claimed to be in possession of the necessary permit. He stated that three of the trees were stumps about four or five feet high and were not fit for lumber. He stated that while he was cutting trees, petitioner and Salinas were present. Santiago testified that he cut trees under petitioners supervision. He stated that petitioner was in possession of the permit. He stated that he cut 10 trees, six of which were cut into lumber while two were stumps and two were rotten. Salinas testified that Masing and Santiago were merely hired as sawyers and they merely followed petitioners instructions. Cuteng testified that he was part of the team that inspected the trees to be cut before the permit was issued. He stated that the trees cut by Santiago were covered by the permit. Nacatab testified that he only went to Teachers Camp on 13 July 1993 and he saw Santiago and Masing cutting down the trees in petitioners presence. Petitioner alleged that he was sent to supervise the cutting of trees at Teachers Camp. He allegedly informed his superior, Paul Apilis, that he was not aware of the trees covered by the permit. However, he still supervised the cutting of trees without procuring a copy of the vicinity map used in the inspection of the trees to be cut. He claimed that he could not prevent the overcutting of trees because he was just alone while Cuteng and Santiago were accompanied by three other men. The Decision of the Trial Court In its 26 May 1994 Decision,7 the Regional Trial Court of Baguio City, Branch 5 (trial court), ruled as follows:

WHEREFORE, the Court finds and declares the accused ERNESTO AQUINO y ESTIPULAR, MICHAEL CUTENG y LESCAO and BENEDICTO SANTIAGO y DOCLES guilty beyond reasonable doubt of the crime charged and hereby sentences EACH of them to suffer an indeterminate penalty of SIX (6) YEARS of prision correccional, as minimum, to TWENTY (20) YEARS of reclusion temporal, as maximum; to indemnify, jointly and severally, the Government in the amounts of P182,477.20 and P11,833.25, representing the market value of and forest charges on the Benguet pine trees cut without permit; and to pay their proportionate shares in the costs. The chainsaw confiscated from the accused Santiago is hereby declared forfeited in favor of the Government. On the other hand, the accused ANDREW NACATAB y DODOY and MIKE MASING y GANAS are acquitted on reasonable doubt, with costs de oficio, and the cash bonds they deposited for their provisional liberty in the amount of P7,500.00 each under O.R. Nos. 139605 and 139646, dated February 4, 1996 and February 23, 1994, respectively, are ordered released to them upon proper receipt therefor. SO ORDERED.8 The trial court ruled that the trees cut exceeded the allowed number of the trees authorized to be cut. The trial court further ruled that the cutting of trees went beyond the period stated in the permit. Petitioner, Cuteng and Santiago appealed from the trial courts Decision. The Decision of the Court of Appeals In its 5 June 1997 Decision, the Court of Appeals modified the trial courts Decision as follows: WHEREFORE, the decision of the court a quo is MODIFIED. The accused-appellants Benedicto Santiago and Michael Cuteng are hereby acquitted on reasonable doubt. The appellant Ernesto Aquino is found guilty, and is hereby sentenced to suffer the indeterminate penalty of six (6) years and one (1) day of prision mayor as minimum, to fourteen (14) years, eight (8) months, and one (1) day of reclusion temporal, as maximum. The award of damages is deleted. No costs. SO ORDERED.9 The Court of Appeals ruled that as a forest guard or ranger of the CENRO, DENR, petitioner had the duty to supervise the cutting of trees and to ensure that the sawyers complied with the terms of the permit which only he possessed. The Court of Appeals ruled that while it was Teachers Camp which hired the sawyers, petitioner had control over their acts. The Court of Appeals rejected petitioners claim that he was restrained from taking a bolder action by his fear of Santiago because petitioner could have informed his superiors but he did not do so. The Court of Appeals further rejected petitioners contention that the law contemplated cutting of trees without permit, while in this case there was a permit for cutting down the trees. The Court of Appeals ruled that the trees which were cut by the sawyers were not covered by the permit. The Court of Appeals ruled that conspiracy was not sufficiently proven. As such, the Court of Appeals found that the prosecution failed to prove Cutengs guilt beyond reasonable doubt. The Court of Appeals likewise acquitted Santiago because he was only following orders as to which trees to cut and he did not have a copy of the permit.

Petitioner filed a motion for reconsideration. In its 24 September 2004 Resolution, the Court of Appeals denied the motion for lack of merit. Hence, the petition before this Court. The Issue The only issue in this case is whether petitioner is guilty beyond reasonable doubt of violation of Section 68 of PD 705. The Ruling of this Court The petition has merit. The Solicitor General alleges that the petition should be denied because petitioner only raises questions of facts and not questions of law. We do not agree. A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts.10 For questions to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants.11The resolution of the issue must rest solely on what the law provides on the given set of circumstances.12 In this case, petitioner challenges his conviction under Section 68 of PD 705. Section 68 of PD 705 provides: Section 68. Cutting, Gathering and/or Collecting Timber or Other Forest Products Without License.Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land, without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code: Provided, that in the case of partnerships, associations, or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable, and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation. There are two distinct and separate offenses punished under Section 68 of PD 705, to wit: (1) Cutting, gathering, collecting and removing timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land without any authority; and (2) Possession of timber or other forest products without the legal documents required under existing forest laws and regulations.13 The provision clearly punishes anyone who shall cut, gather, collect or remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land, without any authority. In this case, petitioner was charged by CENRO to supervise the implementation of the permit. He was not the one who cut, gathered, collected or removed the pine trees within the contemplation of Section 68 of PD 705. He was not in possession of the cut trees because the lumber was used by Teachers Camp for repairs. Petitioner could not likewise be

convicted of conspiracy to commit the offense because all his co-accused were acquitted of the charges against them. Petitioner may have been remiss in his duties when he failed to restrain the sawyers from cutting trees more than what was covered by the permit. As the Court of Appeals ruled, petitioner could have informed his superiors if he was really intimidated by Santiago. If at all, this could only make petitioner administratively liable for his acts. It is not enough to convict him under Section 68 of PD 705. Neither could petitioner be liable under the last paragraph of Section 68 of PD 705 as he is not an officer of a partnership, association, or corporation who ordered the cutting, gathering, or collection, or is in possession of the pine trees. WHEREFORE, we GRANT the petition. We SET ASIDE the 5 June 1997 Decision and 24 September 2004 Resolution of the Court of Appeals in CA-G.R. CR No. 17534. Petitioner Ernesto Aquino is ACQUITTED of the charge of violation of Section 68 of Presidential Decree No. 705. Costs de officio. SO ORDERED. ANTONIO T. CARPIO Associate Justice WE CONCUR: REYNATO S. PUNO Chief Justice Chairperson RENATO C. CORONA Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice

LUCAS P. BERSAMIN Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. REYNATO S. PUNO Chief Justice

Footnotes
1

Under Rule 45 of the 1997 Rules of Civil Procedure.

Rollo, pp. 16-31. Penned by Associate Justice Eubulo G. Verzola with Associate Justices Minerva P. Gonzaga-Reyes and Hilarion L. Aquino, concurring.
3

Id. at 33-35. Penned by Associate Justice Eubulo G. Verzola with Associate Justices Jose L. Sabio, Jr. and Monina Arevalo-Zenarosa, concurring.
4

Records, p. 190. Revised Forestry Code. Rollo, p. 20. CA rollo, pp. 11-18. Penned by Judge Salvador J. Valdez, Jr. Id. at 17-18. Rollo, pp. 30-31. Republic v. Heirs of Fabio, G.R. No. 159589, 23 December 2008. Id. Id. Revaldo v. People, G.R. No. 170589, 16 April 2009.

10

11

12

13

[G.R. No. 104988. June 18, 1996]

MUSTANG LUMBER, INC., petitioner, vs. HON. COURT OF APPEALS, HON. FULGENCIO S. FACTORAN, JR., Secretary, Department of Environment and Natural Resources (DENR), and ATTY. VINCENT A. ROBLES, Chief, Special Actions and Investigation Division, DENR, respondents.

[G.R. No. 106424. June 18, 1996]

PEOPLE OF THE PHILIPPINES, petitioner, vs. HON. TERESITA DIZONCAPULONG, in her capacity as the Presiding Judge, Regional Trial Court National Capital Judicial Region, Branch 172, Valenzuela, Metro Manila, and RI CHUY PO, respondents.

[G.R. No. 123784. June 18, 1996]

MUSTANG LUMBER, INC., petitioner, vs. HON. COURT OF APPEALS, ATTY. VINCENT A. ROBLES, Chief, Special Actions and Investigation Division, Department of Environment and Natural Resources (DENR), ATTY. NESTOR V. GAPUSAN, TIRSO P. PARIAN, JR., and FELIPE H. CALLORINA, JR., respondents. DECISION
DAVIDE, JR., J.:

The first and third cases, G.R. No. 104988 and G.R. No. 123784, were originally assigned to the Second and Third Divisions of the Court, respectively. They were subsequently consolidated with the second, a case of the Court en banc. Petitioner, a domestic corporation with principal office at Nos. 1350-1352 Juan Luna Street, Tondo, Manila, and with a lumberyard at Fortune Street, Fortune Village, Paseo de Blas, Valenzuela, Metro Manila, was duly registered as a lumber dealer with the Bureau of Forest Development (BFD) under Certificate of Registration No. NRD-4092590-0469. Its permit as such was to expire on 25 September 1990.

Respondent Secretary Fulgencio S. Factoran, Jr., and respondent Atty. Vincent A. Robles were, during all the time material to these cases, the Secretary of the Department of Environment and Natural Resources (DENR) and the Chief of the Special Actions and Investigation Division (SAID) of the DENR, respectively. The material operative facts are as follows: On 1 April 1990, acting on an information that a huge stockpile of narra flitches, shorts, and slabs were seen inside the lumberyard of the petitioner in Valenzuela, Metro Manila, the SAID organized a team of foresters and policemen and sent it to conduct surveillance at the said lumberyard. In the course thereof, the team members saw coming out from the lumberyard the petitioner's truck, with Plate No. CCK-322, loaded with lauan and almaciga lumber of assorted sizes and dimensions. Since the driver could not produce the required invoices and transport documents, the team seized the truck together with its cargo and impounded them at the DENR compound at Visayas Avenue, Quezon City.[1]The team was not able to gain entry into the premises because of the refusal of the owner.[2] On 3 April 1990, the team was able to secure a search warrant from Executive Judge Adriano R. Osorio of the Regional Trial Court (RTC) of Valenzuela, Metro Manila. By virtue thereof, the team seized on that date from the petitioners lumberyard four truckloads of narra shorts, trimmings, and slabs; a negligible number of narra lumber; and approximately 200,000 board feet of lumber and shorts of various species including almaciga and supa.[3] On 4 April 1990, the team returned to the premises of the petitioner 's lumberyard in Valenzuela and placed under administrative seizure the remaining stockpile of almaciga, supa, and lauan lumber with a total volume of 311,000 board feet because the petitioner failed to produce upon demand the corresponding certificate of lumber origin, auxiliary invoices, tally sheets, and delivery receipts from the source of the invoices covering the lumber to prove the legitimacy of their source and origin.[4] Parenthetically, it may be stated that under an administrative seizure the owner retains the physical possession of the seized articles. Only an inventory of the articles is taken and signed by the owner or his representative. The owner is prohibited from disposing them until further orders.[5] On 10 April 1990, counsel for the petitioner sent a letter to Robles requesting an extension of fifteen days from 14 April 1990 to produce the required documents covering the seized articles because some of them, particularly the certificate of lumber origin, were allegedly in the Province of Quirino. Robles denied the motion on the ground that the documents being required from the petitioner must accompany the lumber or forest products placed under seizure.[6] On 11 April 1990, Robles submitted his memorandum-report recommending to Secretary Factoran the following:
1. Suspension and subsequent cancellation of the lumber Dealer's Permit of Mustang Lumber, Inc. for operating an unregistered lumberyard and resaw mill and possession of Almaciga Lumber (a banned specie) without the required documents;

2. Confiscation of the lumber seized at the Mustang Lumberyard including the truck with Plate No. CCK-322 and the lumber loaded herein [sic] now at the DENR compound in the event its owner fails to submit documents showing legitimacy of the source of said lumber within ten days from date of seizure; 3. Filing of criminal charges against Mr. Ri Chuy Po, owner of Mustang Lumber Inc. and Mr. Ruiz, or if the circumstances warrant for illegal possession of narra and almaciga lumber and shorts if and when recommendation no. 2 pushes through; 4. Confiscation of Trucks with Plate No. CCS-639 and CDV-458 as well as the lumber loaded therein for transport lumber using recycled documents.[7]

On 23 April 1990, Secretary Factoran issued an order suspending immediately the petitioner's lumber-dealer's permit No. NRD-4-092590-0469 and directing the petitioner to explain in writing within fifteen days why its lumber-dealer's permit should not be cancelled. On the same date, counsel for the petitioner sent another letter to Robles informing the latter that the petitioner had already secured the required documents and was ready to submit them. None, however, was submitted.[8] On 3 May 1990, Secretary Factoran issued another order wherein, after reciting the events which took place on 1 April and 3 April 1990, he ordered CONFISCATED in favor of the government to be disposed of in accordance with law the approximately 311,000 board feet of lauan, supa, and almaciga lumber, shorts, and sticks found inside the petitioner's lumberyard.[9] On 11 July 1990, the petitioner filed with the RTC of Manila a petition for certiorari and prohibition with a prayer for a restraining order or preliminary injunction against Secretary Fulgencio S. Factoran, Jr., and Atty. Vincent A. Robles. The case (hereinafter, the FIRST CIVIL CASE) was docketed as Civil Case No. 90-53648 and assigned to Branch 35 o the said court. The petitioner questioned therein (a) the seizure on 1 April 1990, without any search and seizure order issued by a judge, of its truck with Plate No. CCK-322 and its cargo of assorted lumber consisting of apitong, tanguile, and lauan of different sizes and dimensions with a total value of P38,000.00; and (b) the orders of Secretary Factoran of 23 April 1990 for lack of prior notice and hearing and of 3 May 1990 for violation of Section 2, Article III of the Constitution. On 17 September 1990, in response to reports that violations of P.D. No. 705 (The Revised Forestry Code of the Philippines), as amended, were committed and acting upon instruction of Robles and under Special Order No. 897, series of 1990, a team of DENR agents went to the business premises of the petitioner located at No. 1352 Juan Luna Street, Tondo, Manila. The team caught the petitioner operating as a lumber dealer although its lumber-dealer's permit had already been suspended on 23 April 1990. Since the gate of the petitioner's lumberyard was open, the team went inside and saw an owner-type jeep with a trailer loaded with lumber. Upon investigation, the team was informed that the lumber loaded on the trailer was to be delivered to the petitioner's customer. It also came upon the sales invoice covering the transaction. The members of the team then introduced themselves to the caretaker, one Ms. Chua, who turned out to be the wife of the petitioner's president and general manager, Mr. Ri Chuy Po, who

was then out of town. The team's photographer was able to take photographs of the stockpiles of lumber including newly cut ones, fresh dust around sawing or cutting machineries and equipment, and the transport vehicles loaded with lumber. The team thereupon effected a constructive seizure of approximately 20,000 board feet of lauan lumber in assorted sizes stockpiled in the premises by issuing a receipt therefor.[10] As a consequence of this 17 September 1990 incident, the petitioner filed with the RTC of Manila a petition for certiorari and prohibition. The case (hereinafter, the SECOND CIVIL CASE) was docketed as Civil Case No. 90-54610 and assigned to Branch 24 of the said court. In the meantime, Robles filed with the Department of Justice (DOJ) a complaint against the petitioner's president and general manager, Ri Chuy Po, for violation of Section 68 of P.D. No. 705, as amended by E.O. No. 277. After appropriate preliminary investigation, the investigating prosecutor, Claro Arellano, handed down a resolution[11] whose dispositive portion reads:

WHEREFORE, premises considered, it is hereby recommended that an information be filed against respondent Ri Chuy Po for illegal possession of approximately 200,000 bd. ft. of lumber consisting of almaciga and supa and for illegal shipment of almaciga and lauan in violation of Sec. 68 of PD 705 as amended by E.O. 277, series of 1987. It is further recommended that the 30,000 bd. ft. of narra shorts, trimmings and slabs covered by legal documents be released to the rightful owner, Malupa.
[12]

This resolution was approved by Undersecretary of Justice Silvestre H. Bello, III, who served as Chairman of the Task Force on Illegal Logging.[13] On the basis of that resolution, an information was filed on 5 June 1991 by the DOJ with Branch 172 of the RTC of Valenzuela, charging Ri Chuy Po with the violation of Section 68 of P.D. No. 705, as amended, which was docketed as Criminal Case No. 324-V-91 (hereinafter, theCRIMINAL CASE). The accusatory portion of the information reads as follows:
That on or about the 3rd day of April 1990, or prior to or subsequent thereto, within the premises and vicinity of Mustang Lumber, Inc. in Fortune Village, Valenzuela, Metro Manila, and within the jurisdiction of this Honorable Court, the above-named accused, did then and there wilfully, feloniously and unlawfully, have in his possession truckloads of almaciga and lauan and approximately 200,000 bd. ft. of lumber and shorts of various species including almaciga and supa, without the legal documents as required under existing forest laws and regulations.[14]

On 7 June 1991, Branch 35 of the RTC of Manila rendered its decision [15] in the FIRST CIVIL CASE, the dispositive portion of which reads:

WHEREFORE, judgment in this case is rendered as follows:

1. The Order of Respondent Secretary of the DENR, the Honorable Fulgencio S. Factoran, Jr., dated 3 May 1990 ordering the confiscation in favor of the Government the approximately 311,000 board feet of lauan, supa, and almaciga lumber, shorts and sticks, found inside and seized from the lumberyard of the petitioner at Fortune Drive, Fortune Village, Paseo de Blas, Valenzuela, Metro Manila, on April 4, 1990 (Exhibit 10), is hereby set aside and vacated, and instead the respondents are required to report and bring to the Hon. Adriano Osorio, Executive Judge, Regional Trial Court, NCJR, Valenzuela, Metro Manila, the said 311,000 board feet of Lauan, supa and almaciga Lumber, shorts and sticks, to be dealt with as directed by law; 2. The respondents are required to initiate and prosecute the appropriate action before the proper court regarding the lauan and almaciga lumber of assorted sizes and dimensions loaded in petitioner's truck bearing Plate No. CCK-322 which were seized on April 1, 1990; 3. The Writ of Preliminary Injunction issued by the Court on August 2, 1990 shall be rendered functus oficio upon compliance by the respondents with paragraphs 1 and 2 of this judgment; 4. Action on the prayer of the petitioner that the lauan, supa and almaciga lumber, shorts and sticks mentioned above in paragraphs 1 and 2 of this judgment be returned to said petitioner, is withheld in this case until after the proper court has taken cognizance and determined how those lumber, shorts and sticks should be disposed of; and 5. The petitioner is ordered to pay the costs.

SO ORDERED.
In resolving the said case, the trial court held that the warrantless search and seizure on 1 April 1990 of the petitioner's truck, which was moving out from the petitioner's lumberyard in Valenzuela, Metro Manila, loaded with large volumes of lumber without covering document showing the legitimacy of its source or origin did not offend the constitutional mandate that search and seizure must be supported by a valid warrant. The situation fell under one of the settled and accepted exceptions where warrantless search and seizure is justified, viz., a search of a moving vehicle.[16] As to the seizure of a large volume of almaciga, supa, and lauan lumber and shorts effected on 4 April 1990, the trial court ruled that the said seizure was a continuation of that made the previous day and was still pursuant to or by virtue of the search warrant issued by Executive Judge Osorio whose validity the petitioner did not even question. [17] And, although the search warrant did not specifically mention almaciga, supa, and lauan lumber and shorts, their seizure was valid because it is settled that the executing officer is not required to ignore contrabands observed during the conduct of the search.[18] The trial court, however, set aside Secretary Factoran's order of 3 May 1990 ordering the confiscation of the seized articles in favor of the Government for the reason that since the articles were seized pursuant to the search warrant issued by Executive Judge Osorio they should have been returned to him in compliance with the directive in the warrant.

As to the propriety of the 23 April 1990 order of Secretary Factoran, the trial court ruled that the same had been rendered moot and academic by the expiration of the petitioner's lumber-dealer's permit on 25 September 1990, a fact the petitioner admitted in its memorandum. The petitioner forthwith appealed from the decision in the FIRST CIVIL CASE to the Court of Appeals, which docketed the appeal as CA-G.R. SP No. 25510. On 7 July 1991, accused Ri Chuy Po filed in the CRIMINAL CASE a Motion to Quash and/or to Suspend Proceedings based on the following grounds: (a) the information does not charge an offense, for possession of lumber, as opposed to timber, is not penalized in Section 68 of P.D. No. 705, as amended, and even granting arguendo that lumber falls within the purview of the said section, the same may not be used in evidence against him for they were taken by virtue of an illegal seizure; and (b) Civil Case No. 90-53648 of Branch 35 of the RTC of Manila, the FIRST CIVIL CASE, then pending before the Court of Appeals, which involves the legality of the seizure, raises a prejudicial question.[19] The prosecution opposed the motion alleging that lumber is included in Section 68 of P.D. No. 705, as amended, and possession thereof without the required legal documents is penalized therein. It referred to Section 3.2 of DENR Administrative Order No. 19, series of 1989, for the definitions of timber and lumber, and then argued that exclusion of lumber from Section 68 would defeat the very purpose of the law, i.e., to minimize, if not halt, illegal logging that has resulted in the rapid denudation of our forest resources.[20] In her order of 16 August 1991 in the CRIMINAL CASE, [21] respondent Judge Teresita Dizon-Capulong granted the motion to quash and dismissed the case on the ground that "possession of lumber without the legal documents required by forest laws and regulations is not a crime."[22] Its motion for reconsideration having been denied in the order of 18 October 1991,[23] the People filed a petition for certiorari with this Courtin G.R. No. 106424, wherein it contends that the respondent Judge acted with grave abuse of discretion in granting the motion to quash and in dismissing the case. On 29 November 1991, the Court of Appeals rendered a decision [24] in CA-G.R. SP No. 25510 dismissing for lack of merit the petitioner's appeal from the decision in the FIRST CIVIL CASE and affirming the trial court's rulings on the issues raised. As to the claim that the truck was not carrying contraband articles since there is no law punishing the possession of lumber, and that lumber is not timber whose possession without the required legal documents is unlawful under P.D. No. 705, as amended, the Court of Appeals held: This undue emphasis on lumber or the commercial nature of the forest product involved has always been foisted by those who claim to be engaged in the legitimate business of lumber dealership. But what is important to consider is that when appellant was required to present the valid documents showing its acquisition and lawful possession of the lumber in question, it failed to present any despite the period of extension granted to it.[25]

The petitioner's motion to reconsider the said decision was denied by the Court of Appeals in its resolution of 3 March 1992.[26] Hence, the petitioner came to this Court by way of a petition for review on certiorari in G.R. No. 104988, which was filed on 2 May 1992.[27] On 24 September 1992, Branch 24 of the RTC of Manila handed down a decision in the SECOND CIVIL CASE dismissing the petition forcertiorari and prohibition because (a) the petitioner did not exhaust administrative remedies; (b) when the seizure was made on 17 September 1990 the petitioner could not lawfully sell lumber, as its license was still under suspension; (c) the seizure was valid under Section 68-A of P.D. No. 705, as amended; and (d) the seizure was justified as a warrantless search and seizure under Section 80 of P.D. No. 705, as amended. The petitioner appealed from the decision to the Court of Appeals, which docketed the appeal as CA-G.R. SP No. 33778. In its decision[28] of 31 July 1995, the Court of Appeals dismissed the petitioner's appeal in CA-G.R. SP No. 33778 for lack of merit and sustained the grounds relied upon by the trial court in dismissing the SECOND CIVIL CASE. Relying on the definition of "lumber" by Webster,viz., "timber or logs, especially after being prepared for the market," and by the Random House Dictionary of the English Language, viz., "wood, esp. when suitable or adapted for various building purposes," the respondent Court held that since wood is included in the definition of forest product in Section 3(q) of P.D. No. 705, as amended, lumber is necessarily included in Section 68 under the term forest product. The Court of Appeals further emphasized that a forest officer or employee can seize the forest product involved in a violation of Section 68 of P.D. No. 705 pursuant to Section 80 thereof, as amended by P.D. No. 1775, which provides in part as follows:

SEC. 80. Arrest, Institution of Criminal Actions. A forest officer or employee of the Bureau or any personnel of the Philippine Constabulary/Integrated National Police shall arrest even without warrant any person who has committed or is committing in his presence any of the offenses defined in this chapter. He shall also seize and confiscate, in favor of the Government, the tools and equipment used in committing the offense, or the forest products cut, gathered or taken by the offender in the process of committing the offense.
Among the offenses punished in the chapter referred to in said Section 80 are the cutting, gathering, collection, or removal of timber or other forest products or possession of timber or other forest products without the required legal documents. Its motion to reconsider the decision having been denied by the Court of Appeals in the resolution of 6 February 1996, the petitioner filed with this Court on 27 February 1996 a petition for review on certiorari in G.R. No. 123784. We shall now resolve these three cases starting with G.R. 106424 with which the other two were consolidated.

G.R. No. 106424 The petitioner had moved to quash the information in Criminal Case No. 324-V-91 on the ground that it does not charge an offense. Respondent Judge Dizon-Capulong granted the motion reasoning that the subject matter of the information in the CRIMINAL CASE is LUMBER, which is neither "timber" nor "other forest product" under Section 68 of P.D. No. 705, as amended, and hence, possession thereof without the required legal documents is not prohibited and penalized under the said section. Under paragraph (a), Section 3, Rule 117 of the Rules of Court, an information may be quashed on the ground that the facts alleged therein do not constitute an offense. It has been said that "the test for the correctness of this ground is the sufficiency of the averments in the information, that is, whether the facts alleged, if hypothetically admitted, constitute the elements of the offense,[29] and matters aliunde will not be considered." Anent the sufficiency of the information, Section 6, Rule 110 of the Rules of Court requires, inter alia, that the information state the acts or omissions complained of as constituting the offense. Respondent Ri Chuy Po is charged with the violation of Section 68 of P.D. No. 705, as amended by E.O. No. 277, which provides:

SEC. 68. Cutting, Gathering and/or collecting Timber, or Other Forest Products Without License. Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land, without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships, associations, or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable, and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation.
The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found. Punished then in this section are (1) the cutting, gathering, collection, or removal of timber or other forest products from the places therein mentioned without any authority; and (b) possession of timber or other forest products without the legal documents as required under existing forest laws and regulations. Indeed, the word lumber does not appear in Section 68. But conceding ex gratia that this omission amounts to an exclusion of lumber from the section's coverage,

do the facts averred in the information in the CRIMINAL CASE validly charge a violation of the said section? A cursory reading of the information readily leads us to an infallible conclusion that lumber is not solely its subject matter. It is evident therefrom that what are alleged to be in the possession of the private respondent, without the required legal documents, are truckloads of
(1) almaciga and lauan; and (2) approximately 200,000 bd. ft. of lumber and shorts of various species including almaciga and supa.

The almaciga and lauan specifically mentioned in no. (1) are not described as lumber. They cannot refer to the lumber in no. (2) because they are separated by the words approximately 200,000 bd. ft. with the conjunction and, and not with the preposition of. They must then be raw forest products or, more specifically, timbers under Section 3(q) of P.D. No. 705, as amended, which reads:

SEC. 3.

Definitions.
xxx xxx xxx

(q) Forest product means timber, pulpwood, firewood, bark, tree top, resin, gum, wood, oil, honey, beeswax, nipa, rattan, or other forest growth such as grass, shrub, and flowering plant, the associated water, fish, game, scenic, historical, recreational and geological resources in forest lands.
It follows then that lumber is only one of the items covered by the information. The public and the private respondents obviously miscomprehended the averments in the information. Accordingly, even if lumber is not included in Section 68, the other items therein as noted above fall within the ambit of the said section, and as to them, the information validly charges an offense. Our respected brother, Mr. Justice Jose C. Vitug, suggests in his dissenting opinion that this Court go beyond the four corners of the information for enlightenment as to whether the information exclusively refers to lumber. With the aid of the pleadings and the annexes thereto, he arrives at the conclusion that only lumber has been envisioned in the indictment. The majority is unable to subscribe to his view. First, his proposition violates the rule that only the facts alleged in the information vis-a-visthe law violated must be considered in determining whether an information charges an offense. Second, the pleadings and annexes he resorted to are insufficient to justify his conclusion. On the contrary, the Joint Affidavit of Melencio Jalova, Jr., and Araman Belleng, which is one of the annexes he referred to,[30] cannot lead one to infer that what the team seized was alllumber. Paragraph 8 thereof expressly states:

8. That when inside the compound, the team found approximately four (4) truckloads of narra shorts, trimmings and slabs and a negligible amount of narra lumber, and approximately 200,000 bd. ft. of lumber and shorts of various species including almaciga and supa which are classified as prohibited wood species. (Italics supplied) In the same vein, the dispositive portion of the resolution[31] of the investigating prosecutor, which served as the basis for the filing of the information, does not limit itself to lumber; thus:

WHEREFORE, premises considered, it is hereby recommended that an information be filed against respondent Ri Chuy Po for illegal possession of 200,000 bd. ft. of lumber consisting of almaciga and supa and for illegal shipment of almaciga and lauan in violation of Sec. 63 of PD 705 as amended by E.O. 277, series of 1987. (Italics supplied)
The foregoing disquisitions should not, in any manner, be construed as an affirmance of the respondent Judge's conclusion that lumber is excluded from the coverage of Section 68 of P.D. No. 705, as amended, and thus possession thereof without the required legal documents is not a crime. On the contrary, this Court rules that such possession is penalized in the said section because lumber is included in the termtimber. The Revised Forestry Code contains no definition of either timber or lumber. While the former is included in forest products as defined in paragraph (q) of Section 3, the latter is found in paragraph (aa) of the same section in the definition of Processing plant; which reads:

(aa) Processing plant is any mechanical set-up, machine or combination of machine used for the processing of logs and other forest raw materials into lumber, veneer, plywood, wallboard, block-board, paper board, pulp, paper or other finished wood products.
This simply means that lumber is a processed log or processed forest raw material. Clearly, the Code uses the term lumber in its ordinary or common usage. In the 1993 copyright edition of Webster's Third New International Dictionary, lumber is defined, inter alia, as timber or logs after being prepared for the market. [32] Simply put, lumber is a processed log or timber. It is settled that in the absence of legislative intent to the contrary, words and phrases used in a statute should be given their plain, ordinary, and common usage meaning.[33] And insofar as possession of timber without the required legal documents is concerned, Section 68 of P.D. No. 705, as amended, makes no distinction between raw or processed timber. Neither should we. Ubi lex non distanguit nec nos distinguere debemus.

Indisputably, respondent Judge Teresita Dizon-Capulong of Branch 172 of the RTC of Valenzuela, Metro Manila, committed grave abuse of discretion in granting the motion to quash the information in the CRIMINAL CASE and in dismissing the said case.

G.R. No. 104988 We find this petition to be without merit. The petitioner has miserably failed to show that the Court of Appeals committed any reversible error in its assailed decision of 29 November 1991. It was duly established that on 1 April 1990, the petitioner's truck with Plate No. CCK-322 was coming out from the petitioner's lumberyard loaded with lauan and almaciga lumber of different sizes and dimensions which were not accompanied with the required invoices and transport documents. The seizure of such truck and its cargo was a valid exercise of the power vested upon a forest officer or employee by Section 80 of P.D. No. 705, as amended by P.D. No. 1775. Then, too, as correctly held by the trial court and the Court of Appeals in the FIRST CIVIL CASE, the search was conducted on a moving vehicle. Such a search could be lawfully conducted without a search warrant. Search of a moving vehicle is one of the five doctrinally accepted exceptions to the constitutional mandate[34] that no search or seizure shall be made except by virtue of a warrant issued by a judge after personally determining the existence of probable cause. The other exceptions are (1) search as an incident to a lawful arrest, (2) seizure of evidence in plain view, (3) customs searches, and (4) consented warrantless search.[35] We also affirm the rulings of both the trial court and the Court of Appeals that the search on 4 April 1990 was a continuation of the search on 3 April 1990 done under and by virtue of the search warrant issued on 3 April 1990 by Executive Judge Osorio. Under Section 9, Rule 126 of the Rules of Court, a search warrant has a lifetime of ten days. Hence, it could be served at any time within the said period, and if its object or purpose cannot be accomplished in one day, the same may be continued the following day or days until completed. Thus, when the search under a warrant on one day was interrupted, it may be continued under the same warrant the following day, provided it is still within the ten-day period.[36] As to the final plea of the petitioner that the search was illegal because possession of lumber without the required legal documents is not illegal under Section 68 of P.D. No. 705, as amended, since lumber is neither specified therein nor included in the term forest product, the same hardly merits further discussion in view of our ruling in G.R. No. 106424.

G.R. No. 123784

The allegations and arguments set forth in the petition in this case palpably fail to show prima facie that a reversible error has been committed by the Court of Appeals in its challenged decision of 31 July 1995 and resolution of 6 February 1996 in CA-G.R. SP No. 33778. We must, forthwith, deny it for utter want of merit. There is no need to require the respondents to comment on the petition. The Court of Appeals correctly dismissed the petitioner's appeal from the judgment of the trial court in the SECOND CIVIL CASE. The petitioner never disputed the fact that its lumber-dealer's license or permit had been suspended by Secretary Factoran on 23 April 1990. The suspension was never lifted, and since the license had only a lifetime of up to 25 September 1990, the petitioner has absolutely no right to possess, sell, or otherwise dispose of lumber. Accordingly, Secretary Factoran or his authorized representative had the authority to seize the lumber pursuant to Section 68-A of P.D. No. 705, as amended, which provides as follows:

Section 68-A. Administrative Authority of the Department Head or his Duly Authorized Representative to Order Confiscation. In all cases of violations of this Code or other forest laws, rules and regulations, the Department Head or his duly authorized representative may order the confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned. . . .
The petitioner's insistence that possession or sale of lumber is not penalized must also fail in view of our disquisition and ruling on the same issue in G.R. No. 106424. Besides, the issue is totally irrelevant in the SECOND CIVIL CASE which involves administrative seizure as a consequence of the violation of the suspension of the petitioner's license as lumber dealer. All told then, G.R. No. 104988 and G.R. No. 123784 are nothing more than rituals to cover up blatant violations of the Revised Forestry Code of the Philippines (P.D. No. 705), as amended. They are presumably trifling attempts to block the serious efforts of the DENR to enforce the decree, efforts which deserve the commendation of the public in light of the urgent need to take firm and decisive action against despoilers of our forests whose continuous destruction only ensures to the generations to come, if not the present, an inheritance of parched earth incapable of sustaining life. The Government must not tire in its vigilance to protect the environment by prosecuting without fear or favor any person who dares to violate our laws for the utilization and protection of our forests. WHEREFORE, judgment is hereby rendered
1. (a) GRANTING the petition in G.R. No. 106424; (b) SETTING ASIDE and ANNULLING, for having been rendered with grave abuse of discretion, the challenged orders of 16 August 1991 and 18 October 1991 of respondent Judge Teresita Dizon-Capulong, Branch 172, Regional Trial Court of Valenzuela, Metro Manila, in Criminal Case No. 324-V-91, entitled People of the Philippines vs. Ri Chuy Po; (c) REINSTATING the information in the said criminal case; and (d) DIRECTING the respondent Judge on her successor to hear and decide the case with purposeful dispatch; and

2. DENYING the petitions in G.R. No. 104988 and in G. R. No. 123784 for utter failure of the petitioner to show that the respondent Court of Appeals committed any reversible error in the challenged decisions of 29 November 1991 in CA-G.R. SP No. 25510 in the FIRST CIVIL CASE and of 31 July 1995 in CA-G.R. SP No. 33778 in the SECOND CIVIL CASE.

Costs against the petitioner in each of these three cases. SO ORDERED. Narvasa, C.J., Padilla, Regalado, Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco, Hermosisima, Jr., Panganiban, andTorres, Jr., JJ., concur.

[1]

Rollo, G.R. No. 10493, 37-38. Id., 40. Rollo, G.R. No. 106424, 6. Id., G.R. No. 104988, 38. Id. Id., 39. Rollo, G.R. No. 104988, 39. Id., 40. Rollo, G.R. 104988, 40-41. Rollo, G.R. No. 123784, 26-27. Id., G.R. No. 106424, 50-55 (Annex "I" of Petition). Rollo, G.R. No. 106424, 54. Id., 14. Id., 32. Id., G.R. No. 104988, 62. Per Judge Ramon P. Makasiar. Citing People vs. Lo Ho Wing, 193 SCRA 122 [1991]. Citing Johnson vs. state, 146 Miss. 593. Citing VARON, Searches, Seizures and Immunities, vol. I, 2nd ed., 563-565, 568-570, which gave the example that a search warrant authorizing the search for and seizure of a gun includes the seizure of live shells found within the premises to be searched although not specifically mentioned in the warrant; in other words, a departure from the command of the search warrant describing what property may be seized thereunder is justified where there is a direct relation of the additional articles seized to the primary purpose of the search. Rollo, G.R. No. 106424, 33-35. Id., 35. Rollo, G.R. No. 106424, 32-39 (annex "A" of Petition).

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

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Id., 39. Id., 40 (Annex "B" of Petition). Id., G.R. No. 104988, 36. Per Chua, S., J., with Kapunan, S., and Victor L., JJ., concurring. Id., 43.25 Rollo, G.R. No. 104988, 45. Id., 10. Id., G.R. No. 123784, 26. Per Carpio-Morales, C., J., with Garcia C., and Callejo, R., JJ., concurring. FLORENZ D. REGALADO, Remedial Law Compendium, vol. 2, Seventh Revised ed. [1995], 392, citing People vs. Supnad, 7 SCRA 603 [1963]. See also VICENTE J. FRANCISCO, The Revised Rules of Court (Criminal Procedure), 2nd, ed. [1969] 579; MANUEL V. MORAN, Comments of the Rules of Court, vol. 4. [1980], 222. Rollo, G.R. No. 106424, 41-42 (Annex "C" of Petition). Id., 50-55 (Annex "I" of Petition). Page 1345. RUBEN E. AGPALO, Statutory Construction, Second ed. [1990], 131. Section 2, Article III of the Constitution, which reads:

[23]

[24]

[25]

[26]

[27]

[28]

[29]

[30]

[31]

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[34]

The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses, he may produce, and particularly describing the place to be searched and the persons or things to be seized.
[35]

People vs. Fernandez, 239 SCRA 174 [1994]. In this book on Remedial Law, vol. 4 (Criminal Procedure), 1992 ed., 669, retired Justice Oscar M. Herrera of the Court of Appeals mentions a sixth exception, viz., search based on probable cause under extraordinary circumstances, citing People vs. Posadas, 188 SCRA 288 [1990]; Valmonte vs. De Villa, 178 SCRA 211 [1989]; People vs. Maspil, 188 SCRA 751 [1990]; People vs. Sucro, 195 SCRA 388 [1991]; People vs. Malmstedt, 198 SCRA 401 [1991]. FLORENZ D. REGALADO, Remedial Law Compendium, vol. 2, Seventh Revised Ed. [1995], 526, citing Uy Kheytin vs. Villareal 42 Phil. 886 [1920].

[36]

G.R. No. 115507 May 19, 1998 ALEJANDRO TAN, ISMAEL RAMILO and FRED MORENO, petitioners, vs. THE PEOPLE OF THE PHILIPPINES and THE COURT OF APPEALS, respondents.

PANGANIBAN, J.: In denying this petition, the Court reiterates that the gathering, collection and/or possession, without license, of lumber, which is considered timber or forest product, are prohibited and penalized under the Forestry Reform Code, as amended. The Case In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners seek to set aside the Decision 1 of the Court of Appeals 2 in CA-GR No. CR-12815 promulgated on July 30, 1993, and its Resolution 3promugated on April 28, 1994. The assailed Decision affirmed the judgment 4 of the Regional Trial Court of Romblon, Branch 81, 5 which, in the complaint against petitioners for violation of Section 68, PD 705 (Forestry Reform Code) as amended, disposed as follows: WHEREFORE, this court finds: a) the accused ALEJANDRO TAN, ISMAEL RAMILO and FRED MORENO GUILTY beyond reasonable doubt of the crime of illegal possession of lumber under the Information, dated March 16, 1990, under Section 68, P.D. No. 705, as amended by Executive Order No. 277, and sentences each of them to an indeterminate sentence of SIX (6) MONTHS, as minimum, to FOUR (4) YEARS and TWO (2) MONTHS, as maximum, with the accessory penalties of the law, and to pay the costs, and b) the accused ALEJANDRO TAN, ISMAEL RAMILO and CRISPIN CABUDOL GUILTY beyond reasonable doubt of the crime of illegal possession of lumber under the Information, dated March 16, 1990, under Section 68, P.D. No. 705, as amended by Executive Order No. 277, and sentences each of them to an indeterminate sentence of SIX (6) MONTHS, as minimum, to FOUR (4) YEARS and TWO (2) MONTHS, as maximum, with the accessory penalties of the law, and to pay the costs. The two (2) terms of imprisonment of each of the accused shall be served successively under Article 70, RPC. The preventive imprisonment which any of the accused may have suffered is credited in his favor to its full extent. The Court further orders the confiscation of the lumber described in the aforesaid Informations in favor of the government.

SO ORDERED. The Facts On October 26, 1989, about 6:30 p.m., in the town proper of Cajidiocan, Sibuyan Island, Romblon, Forest Guards Joseph Panadero and Eduardo Rabino intercepted a dump truck loaded with narra and white lauan lumber. The truck was driven by Petitioner Fred Moreno, an employee of A & E Construction. Again, about 8:00 p.m. on October 30, 1989, this time in Barangay Cambajao, Forest Guards Panadero and Rabino apprehended another dump truck with Plate No. DEK-646 loaded with tanguile lumber. Said truck was driven by Crispin Cabudol, also an employee of A & E Construction. Both motor vehicles, as well as the construction firm, were owned by Petitioner Alejandro Tan. In both instances, no documents showing legal possession of the lumber were, upon demand, presented to the forest guards; thus, the pieces of lumber were confiscated. On March 16, 1990, Tan and Moreno, together with Ismael Ramilo, caretaker and time keeper of A & E Construction, were charged by First Assistant Provincial Prosecutor Felix R. Rocero with violation of Section 68, 6PD No. 705, as amended by EO No. 277, in an Information 7 which reads: That on or about the 26th day of October, 1989, at around 6:30 o'clock in the Poblacion, municipality of Cajidiocan, province of Romblon, Philippines, and within the jurisdiction of this Honorable Court, the said accused, conspiring, confederating and mutually helping one another, with intent of gain and without the legal documents as required under existing forest laws and regulations, did then and there willfully, unlawfully and feloniously have in their possession and under their custody and control 13 pieces narra lumber about 171 board feet and 41 pieces tanguile lumber about 834 board feet valued at P8,724.00, Philippine currency, to the damage and prejudice of the government in the aforestated amount. In another Information, 8 Tan and Ramilo, together with Crispin Cabudol, were also charged for the same violation in connection with the October 30, 1989 incident. On April 26, 1990, all the accused, assisted by counsel, were arraigned on the basis of the aforementioned Informations; each pleaded not guilty. 9 The cases were thence jointly tried, pursuant to Section 14, Rule 119 of the Rules of Court. 10 During the trial, the defense did not contest the above factual circumstances except to deny that the forest guards demanded, on either of the two occasions, papers or documents showing legal possession of the lumber. Additionally, Prisco Marin, who claimed to have been the officer-in-charge (OIC) of the Bureau of Forest Development of Sibuyan, testified that the seized pieces of lumber were bought by Tan's Cajidiocan Trading, one of the licensed lumber dealers in the island, from Matzhou Development Corporation ("Matzhou") which thus delivered to the former Auxiliary Invoice No. 763850 11 dated March 19, 1987 issued by the Bureau of Internal Revenue office in Romblon. According to Marin, the director of forestry had granted Matzhou a Tree Recovery Permit covering the entire island of Sibuyan. He added that he had inspected the lumber in question in the compound of A & E Construction or Cajidiocan Trading, where he was shown the auxiliary invoice covering the subject. 12 Ruling of the Trial Court The trial court brushed aside the version of the defense and ruled that the confiscated pieces of lumber which were admittedly owned by Accused Tan were not legitimate deliveries but aborted nocturnal hauling. It convicted all the accused as charged, for their failure to comply with the

Forestry Reform Code, which requires the following legal documents: (1) an auxiliary invoice, (2) a certificate of origin, (3) a sales invoice, (4) scale/tally sheets and (5) a lumber dealer permit. Ruling of Respondent Court of Appeals On appeal, the accused assigned to the trial court these ten errors: (1) holding them liable under Section 68 of EO 277; (2) ruling that their possession of the lumber were unauthorized or illegal; (3) retroactively applying E.O. 277; (4) ruling that the accused did not have the necessary documents to make their possession legal; (5) convicting them despite the absence of the corpus delicti; (6) admitting in evidence the alleged seizure receipts or, assuming their admissibility, considering them as evidence of corpus delicti; (7) finding that the deliveries were aborted nocturnal hauling; (8) convicting Alejandro Tan on the ground of conspiracy; (9) ruling that the guilt of the accused was proved beyond reasonable doubt; and (10) sustaining the constitutionality of EO 277. 13 As regards the first assigned error, the Court of Appeals held petitioners' "artful distinction between timber andlumber" "to be fallacious and utterly unmeritorious." It thereby upheld the solicitor general's manifestation that "forest products" include "wood" which is defined by Webster's Dictionary as "the hard fibrous substance beneath the back of trees and shrubs." Respondent Court succinctly ruled that to construe "sawn lumber" as not covered by "sawn timber" would defeat the evident intent and purpose of the law, for "what would prevent an illegal logger [from bringing] with him a portable saw and having the timber illegally cut/gathered [and] sawn right on the spot, thus gaining immunity for himself[?]" 14 As to the next three assigned errors which relied heavily on Prisco Marin's testimony, Respondent Court dismissed the said witness' account as "anything but credible." It added that Marin's testimony largely focused on a certification he made stating that, five years ago, he inspected the same confiscated lumber which were to be used for the repair of school building by A & E Construction in Sibuyan. But during the cross-examination, he admitted that he made the inspection in December 1989. The appellate tribunal noted that, by then, he had already been relieved of his position as OIC of the Bureau of Forest Development in Romblon; hence, he had no business inspecting the lumberyard of Petitioner Tan. In fact, he admitted that in December 1989, it was Romulae Gadaoni who was already the highest forest officer in the island. 15 As to the fifth and sixth alleged errors, Respondent Court ruled that corpus delicti does not refer literally to the object of the crime in this case, the forest products possessed without the required legal documents. The fact that the crimes charged were perpetrated by the petitioners was credibly and amply proven by the detailed testomonies of the prosecution witnesses, including the admission of Defense Witness Ismael Ramilo. The seizure receipts merely served to corroborate their testimonies. 16 The seventh and ninth assigned errors were deemed answered in the foregoing discussions. As to the eighth, no other than the admission of his caretaker or katiwala, Co-Accused Ramilo, proved that Tan was involved in the conspiracy. Ramilo testified that the deliveries of lumber on the subject dates (October 26 and 30, 1989) were made pursuant to the instruction of Tan; and that the latter owned said lumber, the trucks and the construction firm. The two accused truck drivers who were caught in flagrante delicto were mere employees of Tan. 17 The last assigned error was set aside by Respondent Court as unnecessary. Absolutely of no concern to the petitioners, who were caught in possession of lumber without the required legal documents, was the alleged unconstitutionality of the inclusion of "firewood, bark, honey, beeswax, and even grass, shrub, 'the associated water' or fish" in EO 277. There being other grounds to resolve the case, the constitutionality of said phrase was not passed upon. 18

In their motion for reconsideration, petitioners raised these additional grounds: (1) the Forestry Reform Code and the laws and regulations of the Department of Environment and Natural Resources (DENR) distinguish between timber and lumber and between lumber and other forest products; (2) the Informations alleged and the facts proved that lumber is not covered by the provision supposedly violated; (3) judicial interpretation or construction may not be resorted to in order to fill a gap or clear an ambiguity in penal statutes and, assuming the propriety thereof, construction should be in favor of the accused; (4) lack of documents for possession of lumber is not punishable under the law; and (5) the perceived weakness in the testimony of Defense Witness Prisco Marin should not strengthen the case for the prosecution. In its April 28, 1994 Resolution, Respondent Court found "no cogent reason for the reversal or modification" of its Decision. Hence, this petition. 19 The Issues Petitioners now ask this Court to likewise pass upon their foregoing submissions. Many of the errors raised, however, involve factual questions, the review of which is not within the ambit of this Court's functions, particularly in this case where the findings of the trial court were affirmed by the appellate court and where petitioners failed to show any misappreciation of the evidence presented. 20 We shall therefore limit our review only to questions of law. Accordingly, we shall rule on the following legal issues: (1) the constitutionality of Section 68 of EO 277, (2) the treatment by the lower court of lumber as timber and/or forest product within the contemplation of PD 705, as amended, and (3) the alleged retroactive application of EO 277. The Court's Ruling The petition is not meritorious. Preliminary Issue: Constitutionality of Sec. 68, E.O. 277 The impugned legal provision reads: Sec. 68. Cutting, Gathering and/or Collecting Timber, or other Forest Products Without License. Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships, associations or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceeding on the part of the Commission on Immigration and Deportation. The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found.

Petitioners aver that the above provision is violative of substantive due process, because it requires the possession of certain legal documents to justify "mere possession" of forest products which, under Section 3(q) of PD 705, includes, among others, "firewood, bark, honey, beeswax, and even grass, shrub, flowering plant, 'the associated water' or fish" and penalizes failure to present such required documents. One of the essential requisites for a successful judicial inquiry into the constitutionality of a law is the existence of an actual case or controversy involving a conflict of legal rights susceptible of judicial determination. 21 As Respondent Court of Appeals correctly pointed out, petitioners were not "charged with the [unlawful] possession of firewood, bark, honey, beeswax, and even grass, shrub, 'the associated water' or fish"; thus, the inclusion of any of these enumerated items in EO 277 "is absolutely of no concern" to petitioners. They are not asserting a legal right for which they are entitled to a judicial determination at this time. Besides, they did not present any convincing evidence of a clear and unequivocal breach of the Constitution that would justify the nullification of said provision. 22 A statute is always presumed to be constitutional, and one who attacks it on the ground of unconstitutionality must convincingly prove its invalidity. 23 Main Issue: Under PD 705 and EO 277, Is Lumber Considered Timber or Forest Product? Petitioners contend that possession of manufactured lumber is not punishable under the Forestry Reform Code, as amended. As explicitly provided in Section 68 of both PD 705 and EO 277 (the law that amended the former), only the cutting, gathering, collecting and/or possession, without license, of timber and other forest products are prohibited. As expressly defined under Section 3(q) of PD 705, lumber is not timber or a forest product. It is only in Section 79 of the same law where the sale of lumber, without compliance with established grading rules and standards, is prohibited. Petitioners submit that the forest laws and regulations sufficiently differentiate between timber and lumber; therefore, court should not construe lumber as timber. The question of whether lumber is excluded from the coverage of Section 68 of PD 705, as amended, has been settled in Mustang Lumber, Inc. vs. Court of Appeals, 24 in which this Court expressly ruled that "lumber is included in the term timber." 25 We quote at length the Court's discussion: The Revised Forestry Code contains no definition of either timber of lumber. While the former is included in forest products as defined in paragraph (q) of Section 3, the latter is found in paragraph (aa) of the same section in the definition of "Processing plant," which reads: (aa) Processing plant is any mechanical set-up, machine or combination of machine used for the processing of logs and other forest raw materials into lumber, veneer, plywood, wallboard, blackboard, paper board, pulp, paper or other finished wood products. This simply means that lumber is a processed log or processed forest raw material. Clearly, the Code uses the term lumber in its ordinary or common usage. In the 1993 copyright edition of Webster's Third New International Dictionary, lumber is defined, inter alia, as "timber or logs after being prepared for the market." Simply put, lumber is a processed log or timber.

It is settled that in the absence of legislative intent to the contrary, words and phrases used in a statute should be given their plain, ordinary, and common usage meaning. And insofar as possession of timber without the required legal documents is concerned, Section 68 of P.D. No. 705, as amended, makes no distinction between raw or processed timber. Neither do we. Ubi lex non distinguit nec nos distinguire debemus. 26

Mustang was recently reiterated in Lalican vs. Vergara, 27 where we also said that "'[t]o exclude possession of 'lumber' from the acts penalized in Sec. 68 would certainly emasculate the law itself. . . . After all, the phrase 'forest product' is broad enough to encompass lumber which, to reiterate, is manufactured timber" Indeed, to mention lumber in the aforesaid section would simply result in tautology. In addition, under American jurisprudence, lumber has been legally accepted as a term referring to the manufactured product of logs 28 or to timber sawed or split into marketable form, especially for use in buildings. 29 Consistent with Mustang, we find no error in the holding of both lower courts. Clearly, petitioners are liable for violation of Section 68 of the Forestry Reform Code, as amended. Corollary Issue: No Retroactive Application of EO 277 Petitioners insist that EO 277 is not applicable to them, because the seized lumber had been lawfully possessed by Cajidiocan Trading since March 1987, while the amendatory law was issued only on July 25, 1987, and took effect fifteen days after publication. This strained reasoning deserves scant consideration. First, at no time during the apprehensions did petitioners claim that the lumber belonged to Cajidiocan Trading. In fact, Petitioner Ramilo and the drivers openly claimed that the lumber and the trucks belonged to A & E Construction which was, in turn, owned by Petitioner Tan. It was only during the course of the trial, through the testimony of Prisco Marin (characterized by the appellate court as "anything but credible"), that the alleged ownership thereof by Cajidiocan Trading was brought out. Second, the supposed sale of the subject lumber by Matzhou to Cajidiocan Trading, as evidenced by the auxiliary invoice, occurred in March 1987, or more than two and a half years prior to the apprehension and seizure that gave rise to this case. It is highly doubtful if the lumber bought at the earlier date was the very same lumber confiscated in October 1989. No evidence was presented to overcome this veritable doubt. Third and most important, assuming that indeed they were the very same lumber, forest laws and regulations also require the following documents: (1) certificate of lumber origin, (2) sales invoice, (3) delivery receipt, (4) tally sheet, and (5) certificate of transport agreement. 30 None of these documents were proffered in court or elsewhere. Petitioners' unlawful possession of the subject lumber occurred in October 1989. EO 277, which specifically included "possession" of timber and other forest products within the contemplation of PD 705, had already been issued and in effect more than two years previous thereto. Nothing will prevent the indictment of petitioners for violation of EO 277 at the time they were caught by the forest guards in flagrante delicto. The prohibited act is a malum prohibitum, and absence of malice or criminal intent will not save the day for them. 31 WHEREFORE, the petition is DENIED for utter lack of merit. The questioned Decision of the Court of Appeals is hereby AFFIRMED. Costs against petitioners. SO ORDERED. Davide, Jr., Bellosillo and Quisumbing, JJ., concur.

Vitug, J., I reiterate my separate opinion in Mustang Lumber, Inc. v. CA Footnotes 1 Rollo, pp. 49-66. 2 Twelfth Division composed of JJ. Serafin V.C. Guingona, ponente; Antonio M. Martinez, chairman and now a member of this Court; and Eubulo G. Verzola, concurring. 3 Rollo, p. 98. 4 Ibid., pp. 67-78. 5 Preside by Judge Placido C. Marquez. 6 "Sec. 68. Cutting, Gathering and/or Collecting Timber, or other Forest Products Without License. Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships, associations or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation. The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found." 7 Docketed as Crim. Case No.1745; records for Crim. Case No. 1745, p. 1. 8 Docketed as Crim. Case No. 1746; records for Crim. Case No. 1746, p. 1. 9 Records for Crim. Case No. 1745, p. 17, and for Crim. Case No. 1746, p. 14. 10 RTC Decision, pp. 2-3; rollo, pp. 68-69. 11 Exh. "1"; records for Crim. Case No. 1745, p. 116. 12 RTC decision, p. 7; rollo p. 73. 13 Assailed Decision, p. 5; rollo, p. 53. 14 Ibid., p. 6; ibid., p. 54. 15 Assiled Decision, pp. 8,10, 11 & 13.

16 Ibid., pp. 13-14. 17 Ibid., p. 15. 18 Ibid., pp. 16-17. 19 This case was deemed submitted for resolution on April 27, 1998 when the Court noted the letter dated December 12, 1997 of Sheriff Nowell Lim, RTC of Romblon, Branch 88, stating that the accused are residing in Cajidiocan, Romblon and that their bail bonds are current. 20 Gobonseng Jr. vs. Court of Appeals, 246 SCRA 472, July 17, 1995; Fernandez vs. Court of Appeals, 230 SCRA 119, February 16, 1994. 21 Macasiano vs. National Housing Authority, 224 SCRA 236, July 1, 1993. 22 Dimaporo vs. Mitra Jr., 202 SCRA 779, October 15, 1991. 23 National Pres Club vs. Commission on Elections, 207 SCRA 1, March 5, 1992; Caleon vs. Agus Development Corporation, 207 SCRA 748, April 7, 1992. 24 257 SCRA 430, June 18, 1996, per Davide Jr., J. 25 At p. 448. 26 At pp. 448-449. 27 GR No. 108619, July 31, 1997, per Romero, J. 28 54 C.J.S. 1, citing White's Case, 128 A. 739, 124 Me. 343. Also in McKinney vs. Matthews, 82 S.E. 1036, 1037, 166 N.C. 576, cited in Words & Phrases, Vol. 41A, p. 327; Craddock Mfg. Co. vs. Faison, 123 S.E. 535, 536, 138 Va. 665, 39 A.L.R. 1039, cited in Words & Phrases, Vol. 25A, p. 519. 29 Ibid., p. 673, citing American Tie & Timber Co. vs. Kansas City Southern R. Co, Texas, 175 F. 28, 99 C.C.A. 44. 30 Primer on Illegal Logging, Legal Affairs Office, Department of Environment and Natural Resources, pp. 13-14; CA Rollo, pp. 162-163. 31 Lim vs. Court of Appeals, 222 SCRA 279, May 18, 1993; People vs. De Gracia, 233 SCRA 716, July 6, 1994.

G.R. No. 184098

November 25, 2008

AMADO TAOPA, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent. RESOLUTION CORONA, J.: On April 2, 1996, the Community Environment and Natural Resources Office of Virac, Catanduanes seized a truck loaded with illegally-cut lumber and arrested its driver, Placido Cuison. The lumber was covered with bundles of abaca fiber to prevent detection. On investigation, Cuison pointed to petitioner Amado Taopa and a certain Rufino Ogalesco as the owners of the seized lumber. Taopa, Ogalesco and Cuison were thereafter charged with violating Section 68 of Presidential Decree (PD) No. 705,1 as amended, in the Regional Trial Court (RTC) of Virac, Catanduanes. The information against them read: That on or about the 2nd day of April 1996 at around 9:00 o'clock in the morning at Barangay Capilihan, Municipality of Virac, Province of Catanduanes, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, with intent to possess, conspiring, confederating and helping one another, did then and there, willfully, unlawfully, criminally possess, transport in a truck bearing Plate No. EAS 839 and have in their control forest products, particularly one hundred thirteen (113) pieces of lumber of Philippine Mahogany Group and Apitong species with an aggregate net volume of One Thousand Six Hundred Eighty Four (1,684) board feet with an approximate value of Ninety-Nine Thousand One Hundred Twenty (Php99,120.00) Pesos, Philippine Currency, without any authority and/or legal documents as required under existing forest laws and regulations, prejudicial to the public interest. ACTS CONTRARY TO LAW.2 Taopa, Ogalesco and Cuison pleaded not guilty on arraignment. After trial on the merits, the RTC found them guilty as charged beyond reasonable doubt.3

Only Taopa and Cuison appealed the RTC decision to the Court of Appeals (CA). Cuison was acquitted but Taopa's conviction was affirmed.4 The dispositive portion of the CA decision read: WHEREFORE, the Decision appealed from is REVERSED with respect to accused-appellant Placido Cuison, who is ACQUITTED of the crime charged on reasonable doubt, and MODIFIEDwith respect to accusedappellants Amado Taopa and Rufino Ogalesco by reducing the penalty imposed on them to four (4) years, nine (9) months and eleven (11) days of prision correccional, as minimum, to ten (10) years of prision mayor, as maximum. SO ORDERED.5 In this petition,6 Taopa seeks his acquittal from the charges against him. He alleges that the prosecution failed to prove that he was one of the owners of the seized lumber as he was not in the truck when the lumber was seized. We deny the petition. Both the RTC and the CA gave scant consideration to Taopa's alibi because Cuison's testimony proved Taopa's active participation in the transport of the seized lumber. In particular, the RTC and the CA found that the truck was loaded with the cargo in front of Taopa's house and that Taopa and Ogalesco were accompanying the truck driven by Cuison up to where the truck and lumber were seized. These facts proved Taopa's (and Ogalesco's) exercise of dominion and control over the lumber loaded in the truck. The acts of Taopa (and of his co-accused Ogalesco) constituted possession of timber or other forest products without the required legal documents. Moreover, the fact that Taopa and Ogalesco ran away at the mere sight of the police was likewise largely indicative of guilt. We are thus convinced that Taopa and Ogalesco were owners of the seized lumber. However, we disagree with both the RTC and CA as to the penalty imposed on Taopa. Section 68 of PD 705, as amended,7 refers to Articles 309 and 310 of the Revised Penal Code (RPC) for the penalties to be imposed on violators. Violation of Section 68 of PD 705, as amended, is punished as qualified theft.8 The law treats cutting, gathering, collecting and possessing timber or other forest products without license as an offense as grave as and equivalent to the felony of qualified theft.

Articles 309 and 310 read: Art. 309. Penalties. - Any person guilty of theft shall be punished by: 1. The penalty of prision mayor in its minimum and medium periods, if the value of the thing stolen is more 12,000 pesos but does not exceed 22,000 pesos; but if the value of the thing stolen exceeds the latter amount, the penalty shall be the maximum period of the one prescribed in this paragraph, and one year for each additional ten thousand pesos, but the total of the penalty which may be imposed shall not exceed twenty years. In such cases, and in connection with the accessory penalties which may be imposed and for the purpose of the other provisions of this Code, the penalty shall be termed prision mayor orreclusion temporal, as the case may be. (emphasis supplied) 2. xxx Art. 310. Qualified theft. - The crime of theft shall be punished by the penalties next higher by two degrees than those respectively specified in the next preceding articles xxx (emphasis supplied). The actual market value of the 113 pieces of seized lumber was P67,630.9 Following Article 310 in relation to Article 309, the imposable penalty should be reclusion temporal in its medium and maximum periods or a period ranging from 14 years, eight months and one day to 20 years plus an additional period of four years for the excess of P47,630. The minimum term of the indeterminate sentence10 imposable on Taopa shall be the penalty next lower to that prescribed in the RPC. In this case, the minimum term shall be anywhere between 10 years and one day to 14 years and eight months or prision mayor in its maximum period to reclusion temporal in its minimum period. The maximum term shall be the sum of the additional four years and the medium period11 of reclusion temporal in its medium and maximum periods or 16 years, five months and 11 days to 18 years, two months and 21 days of reclusion temporal. The maximum term therefore may be anywhere between 16 years, five months and 11 days of reclusion temporal to 22 years, two months and 21 days of reclusion perpetua.

WHEREFORE, the petition is hereby DENIED. The January 31, 2008 decision and July 28, 2008 resolution of the Court of Appeals in CA-G.R. CR No. 30380 are AFFIRMED with MODIFICATION.Petitioner Amado Taopa is hereby found GUILTY beyond reasonable doubt for violation of Section 68 of PD No. 705, as amended, and sentenced to suffer the indeterminate penalty of imprisonment from 10 years and one day of prision mayor, as minimum, to 20 years of reclusion temporal as maximum, with the accessory penalties provided for by law. SO ORDERED. RENATO C. CORONA Associate Justice

WE CONCUR:

REYNATO S. PUNO Chief Justice Chairperson ANTONIO T. CARPIO Associate Justice


*

ADOLFO S. AZCUNA Associate Justice DANTE O. TINGA Associate Justice

CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. REYNATO S. PUNO Chief Justice

Footnotes
*

As replacement of Justice Teresita J. Leonardo-De Castro who is on official leave per Special Order No. 539.
1 2 3

Revised Forestry Code. Rollo, p. 27. Rollo, pp. 30-31. The dispositive portion of the RTC decision read: WHEREFORE, In view of the foregoing, this Court finds: Accused Amado Taopa and Rufino Ogalesco GUILTY beyond reasonable doubt as principal of the crime charged and applying Articles 309 and 310 of the Revised Penal Code and the Indeterminate Sentence Law, hereby sentences both of them to suffer imprisonment from ten (10) years and one (1) day as minimum to twenty (20) years as maximum. Accused Placido Cuison GUILTY beyond reasonable doubt as accessory to the crime by transporting the lumber materials in his truck covered by bundles of abaca fiber, which is akin to concealing the body of the crime in order to prevent its discovery, and hereby sentences him to suffer an imprisonment, the maximum period of which is two (2) degrees lower than that of the principal and the minimum period of which is one (1) degree lower, applying the Indeterminate Sentence Law, hence, from two (2) years four (4) months and one (1) day as minimum to eight (8) years eight (8) months and one (1) day as maximum. The lumber materials are likewise confiscated in favor of the government to be disposed of through public auction sale to be conducted by the Clerk of Court and Ex-Officio Provincial Sheriff of the Regional Trial Court of Virac, Catanduanes. The truck, which was included in the Seizure Receipt is ordered released to its owner inasmuch as the evidence proved that it was hired purposely for the transport of abaca fibers and not lumber materials.

SO ORDERED.
4

Despite Ogalesco's failure to appeal, the CA held that the modification of the penalty will benefit him pursuant to Section 11 (a), Rule 122 of the Revised Rules of Criminal Procedure. Rollo, p. 14.
5

Decision dated January 31, 2008 in CA-G.R. CR No. 30380. Penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices Rosmari D. Carandang and Mariflor P. Punzalan Castillo of the Third Division of the Court of Appeals. Rollo, pp. 26-40. The motion for reconsideration thereto was denied in a Resolution dated July 28, 2008. Rollo, pp. 56-58.
6 7

Under Rule 45 of the Rules of Court.

Section 68 provides: "Sec. 68. Cutting, Gathering and/or Collecting Timber, or Other Forest Products without License. - Any person who shall xxx possess timber or other forest products without the legal documents as required under existing forest laws and regulations shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code."
8

Merida v. People, G.R. No. 158182, 12 June 2008 citing People v. Dator, 398 Phil. 109, 124 (2000).
9

The CA did not contest the correctness of the value as stated in the information. However, the CA clarified that the value of the lumber pegged at P99,120 was inclusive of surcharges and forest charges. The CA thus provided a breakdown of the values for a more correct computation of the penalties to be imposed on the accused. The relevant portion of the CA decision reads: "The Statement of Lumber Apprehended, which was prepared by Forest Ranger Jose San Roque, states that the market value of the 113 pieces of lumber is only P67,630. It appears that that the amount of P99,120 was arrived at by adding regular forest charges in the amount of P7,940 and 300% surcharges in the amount of P23,820 to the market value of the lumber pegged at P67,[63]0."Rollo, p. 39.
10

Section 1 of the Indeterminate Sentence Law (RA 4103) provides: "SECTION 1. Hereafter, in imposing a prison sentence for an offense punished by the Revised Penal Code, or its amendments, the court shall sentence the accused to an indeterminate sentence the maximum

term of which shall be that which, in view of the attending circumstances, could be properly imposed under the rules of the said Code, and the minimum which shall be within the range of the penalty next lower to that prescribed by the Code for the offense. xxx"
11

The medium period is imposed following Article 64 of the RPC which states: "When there is neither aggravating nor mitigating circumstances, they shall impose the penalty prescribed by law in its medium period." Although PD No. 705 is a special law, the penalties therein were taken from the RPC. Hence, the rules in the RPC for graduating by degrees or determining the period should be applied. This is pursuant to People v. Simon, G.R. No. 93028, 29 July 1994, 234 SCRA 555.

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G.R. No. 170308 March 7, 2008

GALO MONGE, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent. RESOLUTION TINGA, J.: This is a Petition for Review1 under Rule 45 of the Rules of Court whereby petitioner Galo Monge (petitioner) assails the Decision2 of the Court of Appeals dated 28 June 2005 which affirmed his conviction as well as the discharge of accused Edgar Potencio (Potencio) as a state witness. The factual antecedents follow. On 20 July 1994, petitioner and Potencio were found by barangay tanods Serdan and Molina in possession of and transporting three (3) pieces of mahogany lumber in Barangay Santo Domingo, Iriga City. Right there and then, the tanods demanded that they be shown the requisite permit and/or authority from the Department of Environment and Natural Resources (DENR) but neither petitioner nor Potencio was able to produce any.3 Petitioner fled the scene in that instant whereas Potencio was brought to the police station for interrogation, and thereafter, to the DENR-Community Environment and Natural Resources Office (DENR-CENRO).4 The DENRCENRO issued a seizure receipt for the three pieces of lumber indicating that the items, totaling 77 board feet of mahogany valued at P1,925.00, had been seized from Potencio.5 Later on, petitioner was arrested, but Potencios whereabouts had been unknown since the time of the seizure6 until he surfaced on 3 January 1998.7 An information was filed with the Regional Trial Court of Iriga City, Branch 35 charging petitioner and Potencio with violation of Section 688 of Presidential Decree (P.D.) No. 705,9 as amended by Executive Order (E.O.) No. 277, series of 1997. The inculpatory portion of the information reads:

That on or about the 20th day of [July 1994], at about 9:30 oclock in the morning, in Barangay Sto. Domingo, Iriga City, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating with each other, without any authority of law, nor armed with necessary permit/license or other documents, with intent to gain, did then and there willfully, unlawfully and feloniously, transport and have in their possession three (3) pieces of Mahogany of assorted [dimension] with a[n] appropriate volume of seventy-seven (77) board feet or point eighteen (0.18) cubic meter with a total market value of P1,925.00, Philippine currency, to the damage and prejudice of the DENR in the aforesaid amount. CONTRARY TO LAW.10 At the 26 November 1996 arraignment, petitioner entered a negative plea.11 Trial ensued. On 17 June 1997, Serdan testified on the circumstances of the apprehension but for failing to appear in court for cross examination, his testimony was stricken out.12 On 16 January 1998, Potencio was discharged to be used as a state witness on motion of the prosecutor.13 Accordingly, he testified on the circumstances of the arrest but claimed that for a promised fee he was merely requested by petitioner, the owner of the log, to assist him in hauling the same down from the mountain. Potencios testimony was materially corroborated by Molina.14 Petitioner did not contest the allegations, except that it was not he but Potencio who owned the lumber. He lamented that contrary to what Potencio had stated in court, it was the latter who hired him to bring the log from the site to the sawmill where the same was to be sawn into pieces.15 The trial court found petitioner guilty as charged. Petitioner was imposed nine (9) years, four (4) months and one (1) day to ten (10) years and eight (8) months of prision mayor in its medium and maximum periods and ordered to pay the costs.16 Aggrieved, petitioner elevated the case to the Court of Appeals where he challenged the discharge of Potencio as a state witness on the ground that the latter was not the least guilty of the offense and that there was no absolute necessity for his testimony.17 The appellate court dismissed this challenge and affirmed the findings of the trial court. However, it modified the penalty to an indeterminate prison sentence of six (6) years of prision correccionalas minimum to ten (10) years and eight (8) months of prision mayor as maximum.18 His motion for reconsideration was denied, hence the present appeal whereby petitioner reiterates his challenge against the discharge of Potencio. The petition is utterly unmeritorious. Petitioner and Potencio were caught in flagrante delicto transporting, and thus in possession of, processed mahogany lumber without proper authority from the DENR. Petitioner has never denied this fact. But in his attempt to exonerate himself from liability, he claims that it was Potencio, the owner of the lumber, who requested his assistance in hauling the log down from the mountain and in transporting the same to the sawmill for processing. The contention is unavailing. Section 68 of P.D. No. 705, as amended by E.O. No. 277, criminalizes two distinct and separate offenses, namely: (a) the cutting, gathering, collecting and removing of timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land without any authority; and (b) the possession of timber or other forest products without the legal documents required under existing laws and regulations.19 DENR Administrative Order No. 59 series of 1993 specifies the documents required for the transport of timber and other forest products. Section 3 thereof materially requires that the transport of lumber be accompanied by a certificate of

lumber origin duly issued by the DENR-CENRO. In the first offense, the legality of the acts of cutting, gathering, collecting or removing timber or other forest products may be proven by the authorization duly issued by the DENR. In the second offense, however, it is immaterial whether or not the cutting, gathering, collecting and removal of forest products are legal precisely because mere possession of forest products without the requisite documents consummates the crime.20 It is thus clear that the fact of possession by petitioner and Potencio of the subject mahogany lumber and their subsequent failure to produce the requisite legal documents, taken together, has already given rise to criminal liability under Section 68 of P.D. No. 705, particularly the second act punished thereunder. The direct and affirmative testimony of Molina and Potencio as a state witness on the circumstances surrounding the apprehension well establishes petitioners liability. Petitioner cannot take refuge in his denial of ownership over the pieces of lumber found in his possession nor in his claim that his help was merely solicited by Potencio to provide the latter assistance in transporting the said lumber. P.D. No. 705 is a special penal statute that punishes acts essentially malum prohibitum. As such, in prosecutions under its provisions, claims of good faith are by no means reliable as defenses because the offense is complete and criminal liability attaches once the prohibited acts are committed.21 In other words, mere possession of timber or other forest products without the proper legal documents, even absent malice or criminal intent, is illegal.22 It would therefore make no difference at all whether it was petitioner himself or Potencio who owned the subject pieces of lumber. Considering the overwhelming body of evidence pointing to nothing less than petitioners guilt of the offense charged, there is no cogent reason to reverse his conviction. Petitioners challenge against Potencios discharge as a state witness must also fail. Not a few cases established the doctrine that the discharge of an accused so he may turn state witness is left to the exercise of the trial courts sound discretion23 limited only by the requirements set forth in Section 17,24 Rule 119 of the Rules of Court. Thus, whether the accused offered to be discharged appears to be the least guilty and whether there is objectively an absolute necessity for his testimony are questions that lie within the domain of the trial court, it being competent to resolve issues of fact. The discretionary judgment of the trial court with respect this highly factual issue is not to be interfered with by the appellate courts except in case of grave abuse of discretion.25 No such grave abuse is present in this case. Suffice it to say that issues relative to the discharge of an accused must be raised in the trial court as they cannot be addressed for the first time on appeal.26 Moreover and more importantly, an order discharging an accused from the information in order that he may testify for the prosecution has the effect of an acquittal.27 Once the discharge is ordered by the trial court, any future development showing that any or all of the conditions provided in Section 17, Rule 119 have not actually been fulfilled will not affect the legal consequence of an acquittal.28 Any witting or unwitting error of the prosecution, therefore, in moving for the discharge and of the court in granting the motionno question of jurisdiction being involvedwill not deprive the discharged accused of the benefit of acquittal and of his right against double jeopardy. A contrary rule would certainly be unfair to the discharged accused because he would then be faulted for a failure attributable to the prosecutor. It is inconceivable that the rule has adopted the abhorrent legal policy of placing the fate of the discharged accused at the mercy of anyone who may handle the prosecution.29 Indeed, the only instance where the testimony of a discharged accused may be disregarded is when he deliberately fails to testify truthfully in court in accordance with his commitment,30 as provided for in Section 18, Rule 119. Potencio lived up to his commitment and for that reason, petitioners challenge against his discharge must be dismissed. WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals is AFFIRMED.

SO ORDERED. Carpio, Acting Chairperson, Carpio-Morales, Azcuna, Velasco, Jr., JJ., concur.

Footnotes
*

As replacement of Justice Leonardo A. Quisumbing who is on official leave per Administrative Circular No. 84-2007.
1

Rollo, pp. 10-25.

Docketed as CA-G.R. CR No. 25249. The decision was penned by Associate Justice Edgardo F. Sundiam and concurred in by Associate Justices Renato C. Dacudao and Japar B. Dimaampao, id. at 65-77.
3

TSN, 23 July 1999, pp. 4-5, 12-14. Rollo, p. 67. Records, p. 157.

The warrant of arrest against Potencio dated 10 March 1997 was returned unserved. The sheriffs return stated that Potencio "has escaped from custody and was in Manila,"id. at 48.
7

TSN, 30 January 1998, p. 16.

SEC. 68. Cutting, gathering and/or collecting timber or other products without license Any person who shall cut, gather, collect or remove timber or other forest products from any forest land, or timber from alienable or disposable public land or from private land whose title has no limitation on the disposition of forest products found therein, without any authority under a license agreement, lease license or permit shall be punished with the penalty imposed under Arts. 309 and 310 of the Revised Penal Code : Provided, That in the case of partnership, association or corporation, the officers who ordered the cutting, gathering or collecting shall be liable, and if such officers are aliens, they shall in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation.
8

The Court shall further order the confiscation in favor of the government of the timber or forest products so cut, gathered, collected or removed as well as the machinery, equipment, implements and tools used therein and the forfeiture of his improvements in the area: Provided, That the timber or forest products cut, gathered, collected or removed from a license area shall be delivered to the licensee, lessee or permitee in whose area the forest products were cut, gathered, collected or removed, free from claims of the illegal cutter, but subject to the payment of the corresponding forest charges. Should the licensee refuse to accept the products, the same may be confiscated in favor of the government to be disposed in accordance with law, regulation or policy on the matter.

REVISING PRESIDENTIAL DECREE NO. 389, OTHERWISE KNOWN AS THE FORESTRY REFORM CODE OF THE PHILIPPINES.
10

Records, p. 1.

11

Id. at 24-25. The decision of the Court of Appeals stated that accused Edgar Potencio had been arraigned, contrary to what is kept in the records as the Certificate of Arraignment and the Order of Arraignment indicate that only petitioner Galo Monge had been arraigned.
12

Id. at 215. Id. at 76. Id. at 215-217. Id. at 217-218. Id. at 220-221. CA rollo, p. 40. Id. at 108. People v. Que, 333 Phil. 582, 594 (1996). Id. People v. Dator, 398 Phil. 109, 121 (2000). Id.; Tan v. People, 352 Phil. 724, 738 (1998); People v. Que, 333 Phil. 582, 594 (1996).

13

14

15

16

17

18

19

20

21

22

23

Yu v. Presiding Judge, RTC of Tagaytay City, Br. 18, G.R. No. 142848, 30 June 2006, 494 SCRA 101, 116; People v. Armada, Jr., G.R. No. 100592, 26 August 1993, 225 SCRA 644, 647; Flores v. Sandiganbayan, 209 Phil. 89, 84 (1983). Sec. 17. Discharge of accused to be state witness. When two or more persons are jointly charged with the commission of any offense, upon motion of the prosecution before resting its case, the court may direct one or more of the accused to be discharged with their consent so that they may be witnesses for the state when, after requiring the prosecution to present evidence and the sworn statement of each proposed state witness at a hearing in support of the discharge, the court is satisfied that: (a) There is absolute necessity for the testimony of the accused whose discharge is requested; (b) There is no other direct evidence available for the proper prosecution of the offense committed, except the testimony of said accused; (c) The testimony of said accused can be substantially corroborated in its material points; (d) Said accused does not appear to be the most guilty; and (e) Said accused has not at any time been convicted of any offense involving moral turpitude.
24

Evidence adduced in support of the discharge shall automatically form part of the trial. If the court denies the motion for discharge of the accused as state witness, his sworn statement shall be inadmissible in evidence.

25

Yu v. The Honorable Presiding Judge, supra note 23, 116; People v. Sison, 371 Phil. 713, 724 (1999).
26

People v. Sison, supra citing U.S. v. Inductivo, 40 Phil 84 (1919). Rules of Court, Rule 119, Sec. 18 states: Sec. 18. Discharge of accused operates as acquittal.The order indicated in the preceding section shall amount to an acquittal of the discharged accused and shall be a bar to future prosecution for the same offense, unless the accused fails or refuses to testify against his co-accused in accordance with his sworn statement constituting the basis for his discharge.

27

28

Rosales v. Court of Appeals, G.R. Nos. 80418-19, 23 October 1992, 215 SCRA 102, 108. People v. Mendiola, 82 Phil. 740, 746 (1949).

29

30

Bogo-Medellin Milling Co., Inc. v. Son, G.R. No. 80268, 27 May 1992, 209 SCRA 329; People v. Tabayoyong, No. L-31084, 29 May 1981, 104 SCRA 724, 739; United States v. De Guzman, 30 Phil. 416, 425 (1915).

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RODOLFO TIGOY, Petitioner,

G.R. No. 144640 Present:

versus

PUNO, J., Chairperson, SANDOVAL-GUTIERREZ, CORONA, AZCUNA, and GARCIA, JJ. Promulgated: June 26, 2006

COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES, Respondents.

x ---------------------------------------------------------------------------------------- x

DECISION
AZCUNA, J.:
This is a petition for review under Rule 45 of the Rules of Court assailing the decision and resolution, dated March 6, 2000 and August 23, 2000, respectively, of the Court of Appeals in CA-G.R. CR No. 20864 entitled People of the Philippines v. Nestor Ong and Rodolfo Tigoy, acquitting Nestor Ong for insufficiency of evidence, while convicting Rodolfo Tigoy for violating Section 68 of Presidential Decree (P.D.) No. 705 or the Revised Forestry Code of the Philippines, as amended by Executive Order (E.O.) No. 277, Series of 1987, in relation to Articles 309 and 310 of the Revised Penal Code. The facts of the case are as follows: On August 3, 1993, Nestor Ong, who had been engaged in the trucking business in Iligan City since 1986, was allegedly introduced by his friend Gamad Muntod to Lolong Bertodazo who signified his intent to rent the trucks of Ong to transport construction materials from Larapan, Lanao del Norte to Dipolog City. A Contract to Transport was supposedly entered into between Ong and Bertodazo, the salient portions of which state:
1. That the party of the First Part is an owner of Cargo Trucks with place of business at Iligan City; That the party of the Second Part is a businessman dealing in buy and sell of General Merchandise, dry goods and construction materials; That the party of the Second Part will engage the services of the two (2) cargo trucks of the party of the First Part; That the services agreed upon should be rendered by the party of the First Part on August 3, 1993 from Larapan, Linamon, Lanao

2.

3.

4.

del Norte to Dipolog City for an agreed amount of TEN THOUSAND (P10,000.00) Pesos per truck or a total of TWENTY THOUSAND (P20,000.00) Pesos, Philippine Currency for the carriage of cement and other merchandise owned by the party of the Second Part; 5. That any legal controversy involving the cargo or of and when the cargo trucks are not actually used for the purpose herein stipulated, it is agreed that the same is the sole responsibility of the party of the Second Part without any liability of the party of the First Part.[1]

In the evening of October 3, 1993, Ong allegedly ordered Nestor Sumagang and petitioner Rodolfo Tigoy who had been employed by him as truck drivers for two (2) years and ten (10) years, respectively, to bring the two trucks to Lolong Bertodazo in Larapan, Lanao del Norte which is about fifteen (15) minutes away from Iligan City. He instructed the two drivers to leave the trucks in Larapan for the loading of the construction materials by Lolong Bertodazo, and to go back at dawn for the trip to Dipolog City. Thus, after meeting with Bertodazo, Sumagang and petitioner Tigoy allegedly went home to return to Larapan at four oclock in the morning the next day. When they arrived, the trucks had been laden with bags of cement and were half-covered with canvas.[2]Before departing, they allegedly checked the motor oil, water, engine and tires of the trucks to determine if the same were in good condition. That same morning of October 4, 1993, Senior Inspector Rico Lacay Tome (then Deputy Chief of Police of Ozamis City), while escorting Provincial Director Dionisio Coloma at the ICC Arts Center in Ozamis City, along with the members of the Special Operation Group, received a dispatch from the 466 th PNP Company situated at Barangay Bongbong, Ozamis City, informing him that two trucks, a blue and green loaded with cement, that were going towards Ozamis City did not stop at the checkpoint. Upon receiving the report, Tome, along with PO2 Peter Paul Nuqui and PO3 Bienvenido Real, boarded their patrol vehicle, a mini cruiser jeep, to intercept the two trucks at Lilian Terminal, Ozamis City.[3] At the Lilian Terminal, PO2 Nuqui, who was the only one in uniform among the police officers, flagged down the two trucks but the same just sped away and

proceeded towards the direction of Oroquieta City. Aboard their patrol vehicle, they chased the trucks and overtook the same at Barangay Manabay. They blocked the road with their vehicle causing the two trucks to stop. According to Senior Inspector Tome, he asked the driver who had alighted from the green truck why he did not stop at the checkpoint but the latter did not answer. When he inquired what was loaded in the truck, the driver replied that there is S.O.P, which means grease money in street parlance. [4] This raised the suspicion of Tome that the trucks were loaded with hot items. Meanwhile, the blue truck which had been speeding behind the green truck and was being driven by Sumagang was intercepted by PO3 Real. Upon inspection, the police officers discovered piles of sawn lumber beneath the cement bags in both trucks. Tome inquired if the drivers had a permit for the lumber but the latter could not produce any. The drivers were brought and turned over to the investigator at the City Hall in Ozamis City. The truckmen, namely, Felix Arante and Doro Lopez, and another passenger whom Tigoy identified as Lolong Bertodazo, who were riding with them in the trucks, were not investigated. According to Nuqui, they did not notice that the group had left. It was later learned that they were instructed by Sumagang to inform Nestor Ong of the incident. Afterwards, the group of Tome proceeded back to the ICC Arts Center and informed the Provincial Director of the apprehension. Meanwhile, the drivers, Tigoy and Sumagang, were detained at the Ozamis City Police Station while Arante and Lopez were released.[5] Meanwhile, Ermelo delos Santos, Chief of the Department of Environment and Natural Resources Community and Environment and Natural Resources Office (DENR-CENRO),[6] after receiving a call from the Ozamis City Police Station that two trucks were apprehended transporting sawn lumber without a permit and were brought to the City Hall, sent Rolando Dingal, Forester of the DENR, together with Teodoro Echavez, Juanito Taruc and Lucio Penaroya, to investigate.

Petitioner Tigoy and Sumagang presented to Dingal the registration papers of the two trucks and appearing therein was the name of Nestor Ong as the owner. After ascertaining that the sawn lumber loaded on the two trucks did not have supporting documents, Dingal and his companions scaled the subject lumber and prepared a tally sheet. Loaded in the blue Nissan ten-wheeler truck were 229 pieces of lumber with a total volume of 6,232.46 board feet; and, in the green Isuzu eight-wheeler truck, 333 pieces of lumber with a total volume of 5,095.5 board feet.[7] Consequently, the lumber and the vehicles were seized upon the order of the DENR Regional Executive Director.[8] On October 6, 1993, an Information was filed against Nestor Ong, Sumagang, Lolong Bertodazo and petitioner Tigoy for possession of forest products without legal permit, thus:
That on or about the 4th day of August, 1993 at Barangay Catadman, Ozamiz City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring and confederating together and mutually helping each other, for a common design, did then and there willfully, unlawfully, feloniously and illegally possess and transport without the necessary legal documents nor permit from the lawful authorities, sawn dipterocarp lumbers (Philippine Mahogany), in the following manner, to wit: accused Nestor Ong, being the owner of 2 ten wheeler trucks with Plate Nos. GDA-279 and PNH364 facilitated and allowed the use and transport of above-stated sawn [lumber] from Larapan, Lanao del Norte, but intercepted by the PNP authorities in Ozamiz City; while the accused Lolong Bertodazo facilitated the loading and transport of said sawn lumbers, while accused Nestor Sumagang y Lacson drove the Nissan 10 wheeler cargo truck bearing Plate No. GDA-279 which was loaded with 333 pieces of said sawn dipterocarp lumbers (Philippine Mahogany) of assorted sizes equivalent [to] 5,095.5 board feet which was concealed under piled bags of cement, which lumbers [were] valued at P134, 242.36; while accused Rodolfo Tigoy drove the 8 wheeler Isuzu truck bearing Plate No. ONH364, which was loaded and transported with 229 pieces of sawn dipterocarp lumbers (Philippine Mahogany) of assorted sizes equivalent to 6,232.46 board feet which was concealed under piled bags of cement which lumbers [were] valued at P92,316.77 or total value of P226,559.13, without, however, causing damage to the government, inasmuch as the aforestated lumbers were recovered.

CONTRARY to Section 68 of Presidential Decree 705, as amended by Executive Order No. 277, Series of 1987, in relation to Article 309 and 310 of the Revised Penal Code.[9]

Ong and petitioner Tigoy entered pleas of not guilty during the arraignment. Sumagang died after the case was filed while the other co-accused, Lolong Bertodazo, was not arrested and has remained at large. On October 11, 1996, the Regional Trial Court rendered its Decision, the dispositive portion of which reads:
WHEREFORE, finding accused Nestor Ong and Rodolfo Tigoy [GUILTY] beyond reasonable doubt of possession of dipterocarp lumber [VALUED] at more than P22,000.00 without the legal documents as required by existing laws and regulations, penalized as qualified theft, this Court sentences them to an indeterminate penalty of ten (10) years and one (1) day of prision mayor to eighteen (18) years and three (3) months of reclusion temporal. The lumber and the conveyances used are forfeited in favor of the government. With costs. The DENR is ordered to sell/dispose of the lumber and conveyances in accordance with the existing laws, WITHOUT DELAY. Let the Court of Appeals, Fourteenth Division, before which accused Ongs appeal of this Courts denial of his action for replevin relative to his trucks is pending, be furnished with a copy of this judgment. With costs. SO ORDERED.[10]

Declaring that constructive possession of unlicensed lumber is not within the contemplation of Section 68 of P.D. No. 705, and for failure by the prosecution to prove the complicity of Ong, the Court of Appeals

rendered its decision on March 6, 2000 modifying the ruling of the lower court, thus:

WHEREFORE, the judgment appealed from is hereby MODIFIED in that accused-appellant Nestor Ong is acquitted for insufficiency of evidence and his two (2) trucks are ordered returned to him. The conviction of Rodolfo Tigoy is upheld and the decision dated October 11, 1996 is AFFIRMED in all respects. SO ORDERED.[11]

On March 24, 2000, petitioner filed with the Court of Appeals a Motion for Reconsideration praying for his acquittal but the same was denied on August 23, 2000. Hence, this petition, with the following assignment of errors:
I THE COURT OF APPEALS ERRED IN FINDING COLLUSION BETWEEN LOLONG BERTODAZO AND PETITIONER TIGOY; II THE COURT OF APPEALS ERRED IN COMPLETELY DISREGARDING THE AFFIDAVIT OF LOLONG BERTODAZO AGAINST HIS PENAL INTEREST; III THE COURT OF APPEALS ERRED IN FINDING PETITIONER TIGOY TO HAVE KNOWLEDGE OF THE LUMBER HE WAS TRANSPORTING; AND, IV THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONER TIGOY HAD ACTUAL AND PHYSICAL POSSESSION OF THE UNDOCUMENTED LUMBER.[12]

Stated otherwise, the core issue presented is whether or not petitioner Tigoy is guilty of conspiracy in possessing or transporting lumber without the necessary permit in violation of the Revised Forestry Code of the Philippines.

Section 68 of P.D. No. 705, as amended by E.O. No. 277, otherwise known as the Revised Forestry Code of the Philippines, provides:
Section 68. Cutting, Gathering and/or Collecting Timber or Other Forest Products Without License. Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land, without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code. . . .

There are two ways of violating Section 68 of the above Code: 1) by cutting, gathering and/or collecting timber or other forest products without a license; and, 2) by possessing timber or other forest products without the required legal documents. Petitioner was charged with and convicted of transporting lumber without a permit which is punishable under Section 68 of the Code. He, Sumagang and the rest of their companions were apprehended by the police officers in flagrante delicto as they were transporting the subject lumber from Larapan to Dipolog City. Petitioner maintains that he could not have conspired with Lolong Bertodazo as he did not know about the unlicensed lumber in the trucks. He believed that what he was transporting were bags of cement in view of the contract between Ong and Bertodazo. Also, he was not around when Bertodazo loaded the trucks with the lumber hidden under the bags of cement. This contention by petitioner, however, was not believed by the lower court. In declaring that petitioner connived with Bertodazo in transporting the subject lumber, the court a quo noted:
x x x The evidence of the prosecution established that the two drivers of accused Ong refused to stop at a checkpoint, a fact admitted by both in their affidavit, Exhs. E and E-2. Likewise, the two drivers refused to stop on the national highway near a bus terminal when

required by a uniformed policeman. When finally accosted, one of the drivers, whom witness Tome identified as the driver of the green truck, Sumagang, but who actually was Tigoy (as he was the driver of the green truck and who came to the road block first, being the lead driver) offered S.O.P. which to witness Tome meant that the trucks were carrying hot items. Why would the drivers refuse to stop when required? Did they fear inspection of their cargo? Why would S.O.P. (wh ich in street parlance is grease money) be offered to facilitate the passage of the trucks? The only logical answer to all these questions is that the drivers knew that they were carrying contraband lumber. This Court believes that the drivers had knowledge of the fact that they were transporting and were in possession of undocumented lumber in violation of law.[13]

In offenses considered as mala prohibita or when the doing of an act is prohibited by a special law such as in the present case, the commission of the prohibited act is the crime itself. It is sufficient that the offender has the intent to perpetrate the act prohibited by the special law, and that it is done knowingly and consciously.[14] Direct proof of previous agreement to commit an offense is not necessary to prove conspiracy.[15] Conspiracy may be proven by circumstantial evidence.[16] It may be deduced from the mode, method and manner by which the offense is perpetrated, or inferred from the acts of the accused when such acts point to a joint purpose and design, concerted action and community of interest.[17] It is not even required that the participants have an agreement for an appreciable period to commence it.[18] Petitioners actions adequately show that he intentionally participated in the commission of the offense for which he had been charged and found guilty by both the trial court and the Court of Appeals. Finding that petitioners conviction was reached without arbitrariness and with sufficient basis, this Court upholds the same. The Court accords high respect to the findings of facts of the trial court, its calibration of the collective testimonies of the witnesses, its assessment of the probative weight of the evidence of the

parties as well as its conclusions[19] especially when these are in agreement with those of the Court of Appeals, which is the case here. As a matter of fact, factual findings of the trial court, when adopted and confirmed by the Court of Appeals, are generally final and conclusive.[20] WHEREFORE, the petition is DENIED and the Decision and Resolution, dated March 6, 2000 and August 23, 2000, respectively, of the Court of Appeals in CA-G.R. CR No. 20864 are hereby AFFIRMED.

Costs against petitioner.


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G.R. No. 131270 March 17, 2000

PERFECTO PALLADA, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent. MENDOZA, J.: This is a petition for review of the decision 1 of the Court of Appeals affirming petitioner's conviction of illegal possession of lumber in violation of 68 2 of the Revised Forestry Code 3 (P.D. No. 705, as amended) by the Regional Trial Court, Branch 8, Malaybalay, Bukidnon. The facts are as follows: Sometime in the latter part of 1992, the Department of Environment and Natural Resources (DENR) office in Bukidnon received reports that illegally cut lumber was being delivered to the warehouse of the Valencia Golden Harvest Corporation in Valencia, Bukidnon. The company is engaged in rice milling and trading. DENR officers, assisted by elements of the Philippine National Police, raided the company's warehouse in Poblacion, Valencia on the strength of a warrant issued by the Regional Trial Court, Branch 8, Malaybalay, Bukidnon and found a large stockpile of lumber of varying sizes cut by a chain saw. As proof that the company had acquired the lumber by purchase, petitioner produced two receipts issued by R.L. Rivero Lumberyard of Maramag, Bukidnon, dated March 6 and 17, 1992. The DENR officers did not, however, give credit to the receipt considering that R. L. Rivero Lumberyard's permit to operate had long been suspended. What is more, the pieces of lumber were cut by chain saw and thus could not have come from a licensed sawmill operator. The team made an inventory of the seized lumber which, all in all, constituted 29,299.25 board feet, worth P488,334.45 in total. The following day, September 29, 1992, the first batch of lumber, consisting of 162 pieces measuring 1,954.66 board feet, was taken and impounded at the FORE stockyard in Sumpong; Malaybalay, Bukidnon. The seizure order 4 was served on petitioner Perfecto Pallada as general manager of the company, but he refused to acknowledge it. On October 1, 1992, raiding team returned for the remaining lumber. Company president Francisco Tankiko and a certain Isaias Valdehueza, who represented himself to be a lawyer, asked for a suspension of the operations to enable them to seek a lifting of the warrant. The motion was filed with the court which issued the warrant but, on October 5, 1992, the motion was denied. 5 Accordingly, the remaining lumber was confiscated. By October 9, 1992, all the lumber in the warehouse had been seized. As before, however, petitioner Pallada refused to sign for the seizure orders issued by the DENR officers (Exhs. E, F & G). On February 23, 1993, petitioner, as general manager, together with Noel Sy, as assistant operations manager, and Francisco Tankiko, as president of the Valencia Golden Harvest Corporation, and Isaias Valdehueza, were charged with violation of 68 of P.D. No. 705, as amended. The Information alleged: 6

That on or about the 1st day of October, 1992, and prior thereto at the Valencia Golden Harvest Corporation Compound, municipality of Valencia, province of Bukidnon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating and mutually helping one another, with intent of gain, did then and there willfully, unlawfully and criminally possess 2,115 pieces [of] lumber of different dimensions in the total volume of 29,299.25 board feet or equivalent to 69.10 cubic meters with an estimated value of FOUR HUNDRED EIGHTY EIGHT THOUSAND THREE HUNDRED THIRTY FOUR PESOS AND 45/100 (P488,334.45) Philippine Currency, without any authority, license or legal documents from the government, to the damage and prejudice of the government in the amount of P488,334.45. Contrary to and in violation of Section 68, P.D. 705 as amended by E.O. 277. As all the accused pleaded not guilty, trial ensued. Then on July 27, 1994, judgment was rendered as follows: 7 WHEREFORE, judgment is hereby rendered finding accused Perfecto Pallada and Francisco Tankiko guilty beyond reasonable doubt of having in their possession timber products worth of P488,334.45 without the legal documents as charged in the information in violation of Section 68 of Presidential Decree 705, as amended and are, therefore, each sentenced to suffer imprisonment of TEN (10) YEARS of prision mayoras minimum to TWENTY (20) YEARS of reclusion temporal as maximum. The lumber subject of the crime are confiscated in favor of the government. Accused Isaias Valdehueza and Noel Sy are ACQUITTED for lack of evidence against them. Petitioner and Francisco Tankiko appealed to the Court of Appeals, which, on October 31, 1997, affirmed petitioner's conviction but acquitted Tankiko for lack of proof of his participation in the purchase or acquisition of the seized lumber. 8 Hence this petition which raises the following issues: 9 I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS WAS CORRECT IN UPHOLDING THE RULING OF THE TRIAL COURT THAT THE PROSECUTION HAD PROVED BEYOND REASONABLE DOUBT THE GUILT OF THE ACCUSED-PETITIONER PALLADA. II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS WAS CORRECT IN UPHOLDING THE DECISION OF THE TRIAL COURT THAT THE CERTIFICATE OF TIMBER ORIGIN WAS NOT THE PROPER DOCUMENT TO JUSTIFY PETITIONER'S POSSESSION OF THE SQUARED TIMBER OR FLITCHES. III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS WAS CORRECT IN UPHOLDING THE RULING OF THE TRIAL COURT THAT THE PRESENCE OF ERASURES IN THE CERTIFICATE OF TIMBER ORIGIN RENDER THEM VALUELESS AS EVIDENCE. First. During the trial, the defense presented the following documents, as summarized by the trial court, to establish that Valencia Golden Harvest Corporation's possession of the seized lumber was legal: 10

1. Exh. 6 Certificate of Timber Origin (CTO for short), dated December 15, 1991, for 56 pieces of flitches equivalent to 12.23 cubic meters, transported from Bombaran, Lanao del Sur of the Autonomous Region of Muslim Mindanao. Taken from the forest area of Wahab and H.D. Pangcoga. Exh. 6-A Auxiliary Invoice Exh. 6-B Certificate of Transport Agreement (CTA, for short) Exh. 6-C Tally Sheet, dated December 14, 1992, for 463 pieces of lumber equivalent to 5,056.94 board feet Exh. 6-D Delivery Receipt, dated December 16, 1991, from WHP Enterprises of Maguing, Lanao del Sur, to the Corporation for the lumber mentioned in Exh. "6-C" Exh. 6-F Cash Voucher for P58,832.45 in payment to WHP Enterprises, dated December 16, 1992, for the 5,056.94 board feet of lumber Exh. 6-D-1 [C]arbon copy of Exh. "6-D" above 2. Exh. 7 CTO, (undated), for 961 pieces of log equivalent to 25.4 cubic meter[s] taken from the forest area of a certain Somira M. Ampuan in Lama Lico, Bombaran of the ARMM. Exh. 7-A Auxiliary Invoice Exh. 7-B CTA Exh. 7-C Tally Sheet, dated February 6, 1992, for 961 pieces of lumber equal to 10,758.2 board feet Exh. 7-D Delivery Receipt to Golden Harvest Corporation issued by SMA Trading Company, dated February 6, 1992 Exh. 7-E Official Receipt for environmental fee issued to Somira N. Ampuan, dated August 9, 1991 Exh. 7-F Cash Voucher for P126,562.05 issued by the Corporation in payment to SMA Trading Company for 10,758.02 board feet of lumber, dated February 6, 1992 3. Exh. 8 CTO for 678 pieces of chain-sawn lumber with an equivalent volume of 18.93 cubic meter from the forest area of Wahab Pangcoga and H.D. Pangcoga, dated February 25, 1992 Exh. 8-A Auxiliary Invoice Exh. 8-B CTA. Exh. 8-C Tally Sheet for the 678 pieces of lumber.

Exh. 8-D Delivery Receipt to Golden Harvest Corporation issued by WHP Enterprises, Exh. 8-E Official Receipt for environmental fee Exh. 8-F Cash Voucher for P93,614.50 in payment for 8,024.99 board feet of lumber issued by the Corporation payable to WHP Enterprises 4. Exh. 9 CTO for 426 pieces of logs (?) with an equivalent volume of 12.24 cubic meters from licensee Somira M. Ampuan of Lama Lico, Bombaran, Lanao del Sur, consigned to the Corporation, (undated). Stamped "Release 3/2/92" Exh. 9-A Auxiliary Invoice Exh. 9-B CTA, dated March 20, 1992 Exh. 9-C Tally Sheet, dated March 20, 1992 Exh. 9-D Delivery Receipt issued by SMA Trading Company to the Corporation, dated March 20, 1992 Exh. 9-E Official Receipt for environmental fee Exh. 9-F Cash Voucher, for P64,299.50 to pay [for] 5,189 board feet of lumber Exh. 9-D-1 Xerox copy of Exh. "9-D" The trial court acted correctly in not giving credence to the Certificates of Timber Origin presented by petitioner since the lumber held by the company should be covered by Certificates of Lumber Origin. 11 For indeed, as BFD Circular No. 10-83 12 states in pertinent parts: In order to provide an effective mechanism to pinpoint accountability and responsibility for shipment of lumber . . . and to have uniformity in documenting the origin thereof, the attached Certificate of Lumber Origin (CLO) . . . which form[s] part of this circular [is] hereby adopted as accountable forms for official use by authorized BFD officers . . . . 5. Lumber . . . transported/shipped without the necessary Certificate of Lumber Origin (CLO) . . . as herein required shall be considered as proceeding from illegal sources and as such, shall be subject to confiscation and disposition in accordance with LOI 1020 and BFD implementing guidelines. Petitioner contends that the term "timber" includes lumber and, therefore, the Certificates of Timber Origin and their attachments should have been considered in establishing the legality of the company's possession of the lumber. 13 In support of his contention, petitioner invokes our ruling in Mustang Lumber, Inc. v. Court of Appeals.14 The contention has no, merit. The statement in Mustang Lumber that lumber is merely processed timber and, therefore, the word "timber" embraces lumber, was made in answer to the lower court's ruling in that case that the phrase "posses timber or other forest products" in 68 of P.D. No. 705 means that only those who possess timber and forest products without the documents required by law are criminally liable, while those who possess lumber are not liable. On the other hand, the

question in this case is whether separate certificates of origin should be issued for lumber and timber. Indeed, different certificates of origin are required for timber, lumber and non-timber forest products. 15 As already noted, the opening paragraph of BFD Circular No. 10-83 expressly states that the issuance of a separate certificate of origin for lumber is required in order to "pinpoint accountability and responsibility for shipment of lumber . . . and to have uniformity in documenting the origin thereof." Even assuming that a Certificate of Timber Origin could serve as a substitute for Certificate of Lumber Origin, the trial court and the Court of Appeals were justified in convicting petitioner, considering the numerous irregularities and defects found in the documents presented by the latter. According to the trial court: 16 Although the CTO marked Exh. "6" mentions 56 pieces of flitches, the supporting documents, like the Tally Sheet, the Delivery Receipt from the lumber dealer and the Cash Voucher describe 463 pieces of lumber. . . . In like manner, Exh. "7" and Exh. "9" mention 961 and 420 pieces of log, respectively. But the supporting documents describe the forest product[s] as lumber. The CTO marked Exh. "[8]" reveals a half-truth: it mentions 678 pieces of hand-sawn lumber. Its Auxiliary Invoice also states the same load of lumber. Someone may have noticed the "mistake" of mentioning lumber in the Auxiliary Invoice and so the words "flitches 87 pieces" were written down and enclosed in parenthesis. The said exhibits also appear to be questionable, [t]hus[:] The CTO marked Exh. "6" is consigned to "any buyer (sic) Cagayan de Oro", but its Auxiliary Invoice (Exh. "6-A") mentions Valencia Golden Harvest Corporation as the consignee. Moreover, the CTO states (at the back page) that the same is covered by Auxiliary Invoice No. 00491; in fact, the Auxiliary Invoice (Exh. 6-A) has invoice number 000488. In the CTO marked Exhibit "7", the original typewritten name of the consignee was clearly erased and changed to "Valencia, Golden Harvest Corporation, Valencia, Bukidnon". In the Auxiliary Invoice (Exh. "7-A") the blank space for the name and address of the consignee was smudged with a typewriter correction fluid (the better to erase what was originally typewritten in it?) and changed to "Valencia Golden Harvest Corporation, Valencia, Bukidnon". The CTO marked Exh. "9" and its Auxiliary Invoice marked Exh. "9-A" [were] "doctored" in the same manner as Exh. "[7]" and Exh. "[7-A]". 17 Additionally, all the Auxiliary Invoice were not properly accomplished: the data required to be filled are left in blank. Indeed, aside from the fact that the Certificate of Timber Origin in Exh. 7 bears no date, the dorsal side bears the certification that the logs were "scaled on August 7, 1991," while the receipt attached to that Certificate is dated February 6, 1992. Moreover, the four delivery receipts list in sizes and volume of the lumber sold, indicating that the company purchased cut lumber from the dealers, thus belying the testimony of petitioner that when the company bought the forest products, they were still in the form of flitches and logs, and they were cut into lumber by the company. 18

These irregularities and discrepancies make the documents in which they are found not only questionable but invalid and, thus, justified the trial court in giving no credence to the same. 19 It is argued that the irregularities in the documentary exhibits should not be taken against petitioner because the documents came from lumber dealers. In addition, it is contended that the CTOs and Auxiliary Receipts, being public documents, should be accorded the presumption of regularity in their execution. 20 This contention is untenable. What render these documents without legal effect are the patent irregularities found on their faces. That petitioner may not have any responsibility for such irregularity is immaterial. In any case, as the corporate officer in charge of the purchase of the lumber, petitioner should have noticed such obvious irregularities, and he should have taken steps to have them corrected. He cannot now feign ignorance and assert that, as far as he is concerned, the documents are regular and complete. 21 The presence of such glaring irregularities negates the presumption that the CTOs were regularly executed by the DENR officials concerned. The presumption invoked by petitioner applies only when the public accomplished.22documents are, on their faces, regular and properly accomplished. 22 Second. The penalty imposed should be modified. Art. 309 of the Revised Penal Code, made applicable to the offense by P.D. No. 705, 68, provides: Art. 309. Penalties. Any person guilty of theft shall be punished by: 1. The penalty of prision mayor in its minimum and medium; periods, if the value of the thing stolen is more than P12,000 pesos but does not exceed P22,000 pesos; but if the value of the thing stolen exceeds the latter amount, the penalty shall be the maximum period of the one prescribed in this paragraph, and one year for each additional ten thousand pesos, but the total of the penalty which may be imposed shall not exceed twenty years. In such cases, and in connection with the accessory penalties which may be imposed and for the purpose of the other provisions of this Code, the penalty shall be termed prision mayor orreclusion temporal, as the Case may be. . . . As the lumber involved in this case is worth P488,334.45, and applying the Indeterminate Sentence Law, 23 the penalty to be imposed should be six (6) years of prision correccional to twenty (20) years of reclusion temporal. WHEREFORE the decision of the Court of Appeals, dated October 31, 1997, is AFFIRMED with the MODIFICATION that petitioner is sentenced to six (6) years of prision correccional, as minimum, to twenty (20) years of reclusion temporal, as maximum. SO ORDERED. Bellosillo, Quisumbing, Buena and De Leon, Jr., JJ., concur.

Footnotes

Per Justice Minerva P. Gonzaga-Reyes (now Associate Justice of this Court), concurred in by Justices B.A. Adefuin-Dela Cruz and Demetrio G. Demetria.
2

Renumbered 78 by Republic Act No. 7161.

Cutting, Gathering and/or Collecting Timber, or Other Forest Products Without License. Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land, without any authority or possess timber or other forest products without the legal documents as required under existing forest law and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships, associations, or corporations, the officers who ordered the cutting, gathering collection or possession shall be liable, and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation.
3

The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found. (As amended by PD No. 1559, and by EO No. 277, prom. July 21, 1987, emphasis added ).
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Records, p. 28.

G.R. No. 120365 December 17, 1996 PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. WILSON B. QUE, accused-appellant

PUNO, J.:p Accused-appellant Wilson B. Que appeals from his conviction for violation of Section 68 of Presidential Decree (P.D.) 705 1 as amended by Executive Order (E.O.) 277. 2 The facts show that two weeks before March 8, 1994, SPO1 Dexter Corpuz, a member of the Provincial Task Force on Illegal Logging, received an information that a ten-wheeler truck bearing plate number PAD-548 loaded with illegally cut lumber will pass through Ilocos Norte. Acting on said information, members of the Provincial Task Force went on patrol several times within the vicinity of General Segundo Avenue in Laoag City. 3 On March 8, 1994, SPO1 Corpuz, together with SPO1 Zaldy Asuncion and SPO1 Elmer Patoc went on patrol around the area. At about 1:00 in the morning, they posted themselves at the corner of General Segundo Avenue and Rizal Street. Thirty minutes later, they saw a ten-wheeler truck with plate number PAD-548 pass by. They followed the truck and apprehended it at the Marcos Bridge. 4 There were three persons on board the truck: driver Wilfredo Cacao, accused-appellant Wilson Que, and an unnamed person. The driver identified accused- appellant as the owner of the truck and the cargo. 5 SPO1 Corpuz checked the cargo and found that it contained coconut slabs. When interviewed, accused-appellant told SPO1 Corpuz that there were sawn lumber inserted in between the coconut slabs. 6 SPO1 Corpuz asked accused-appellant for the cargo's supporting documents, specifically: (1) certificate of lumber origin, (2) certificate of transport agreement, (3) auxiliary invoice, (4) receipt from the DENR, and (5) certification from the forest ranger regarding the origin of the coconut slabs. Accused-appellant failed to present any of these documents . All he could show was a certification 7 from the Community Environment and Natural Resources Office (CENRO), Sanchez Mira, Cagayan that he legally acquired the coconut slabs. The certification was issued to facilitate transport of the slabs from Sanchez Mira, Cagayan to San Vicente, Urdaneta, Pangasinan. 7 SPO1 Corpuz brought accused-appellant to the office of the Provincial Task Force at the provincial capitol. Again, accused-appellant admitted to the members of the Provincial Task Force that there were sawn lumber under the coconut slabs. 9

At 10:00 o'clock in the morning, the members of the Provincial Task Force, together with three CENRO personnel examined the cargo. The examination confirmed that the cargo consisted of coconut slabs and sawn tanguile lumber. The coconut slabs were piled at the sides of the truck, concealing the tanguile lumber. 10 When the CENRO personnel inventoried and scaled the seized forest products, they counted two hundred fifty eight (258) pieces of tanguile lumber with a total volume of 3,729.3 board feet (8.79 cubic meters) and total assessed value of P93,232.50. 11 On June 23, 1994, accused-appellant was charged before the Regional Trial Court of Laoag with violation of Section 68 of P.D. 705 as amended by E.O. 277. The Information alleged: That on or about the 8th day of March, 1994, in the City of Laoag, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, being then the owner of an I(s)uzu Ten wheeler Truck bearing Plate No. PAD-548, with intent of gain, did then and there willfully, unlawfully and feloniously have in possession, control and custody 258 pieces of various sizes of Forest Products chainsawn lumber (species of Tanguile) with a total volume of 3,729.3 bd. ft. or equivalent to 8.79 cubic meters valued in the total amount of P93,232.50 at P25.00/bd. ft., necessary permit, license or authority to do so from the proper authorities, thus violating the aforecited provision of the law, to the damage and prejudice of the government.
CONTRARY TO LAW. 12

Accused-appellant denied the charge against him. He claimed that he acquired the 258 pieces of tanguile lumber from a legal source. During the trial, he presented the private land timber permits (PLTP) issued by the Department of Environment and Natural Resources (DENR) to Enrica Cayosa 13 and Elpidio Sabal. 14 The PLTP authorizes its holder to cut, gather and dispose timber from the forest area covered by the permit. He alleged that the tanguile lumber came from the forest area covered by the PLTP's of Cayosa and Sabal and that they were given to him by Cayosa and Sabal as payment for his hauling services. 15 Accused-appellant also objected to the admission of the 258 pieces of lumber as evidence against him. He contended that they were fruits of an illegal search and seizure and of an uncounselled extrajudicial admission. The trial court found accused-appellant guilty and sentenced him to reclusion perpetua. It also ordered the confiscation of the seized lumber and the ten-wheeler truck owned by accusedappellant. The dispositive portion of the Decision 16 states: WHEREFORE, judgment is hereby rendered declaring accused Wilson B. Que guilty beyond reasonable doubt of the violation of Section 68 of PD 705, as amended by Executive Order No. 277 and he is hereby sentenced to suffer the penalty of RECLUSION PERPETUA, plus all the accessory penalties provided by law. The bail bond filed for the provisional liberty of the accused is CANCELLED. The two hundred fifty-eight (258) pieces of lumber (tanguile specie) and the tenwheeler truck bearing plate No. PAD-548 which was used in the commission of the crime are hereby ordered confiscated in favor of the government to be disposed of in accordance with law. Costs against the accused.

SO ORDERED. 17

Appellant now comes before us with the following assignment of errors: 18 1. It was error for the Court to convict accused under Section 68, PD 705 as amended by EO 277 for possessing timber or other forest products without the legal documents as required under existing forest laws and regulations on the ground that since it is only in EO No. 277 where for the first time mere possession of timber was criminalized, there are no existing forest laws and regulations which required certain legal documents for possession of timber and other forest products. 2. The Court erred in allowing evidence secured in violation of the constitutional rights of accused against unlawful searches and seizures. 3. The Court erred in allowing evidence secured in violation of the constitutional rights of accused under custodial investigation. On the first assignment of error, appellant argues that he cannot be convicted for violation of Section 68 of P.D. 705 because E.O. 277 which amended Section 68 to penalize the possession of timber or other forest products without the proper legal documents did not indicate the particular documents necessary to make the possession legal. Neither did the other forest laws and regulations existing at the time of its enactment. Appellant's argument deserves scant consideration. Section 68 of P.D. 705 provides: Sec. 68. Cutting, Gathering and/or Collecting Timber, or other Forest Products Without License. Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships, associations, or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation. The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found. (emphasis supplied). Appellant interprets the phrase "existing forest laws and regulations" to refer to those laws and regulations which were already in effect at the time of the enactment of E.O. 277. The suggested interpretation is strained and would render the law inutile. Statutory construction should not kill but give life to the law. The phrase should be construed to refer to laws and regulations existing at the time of possession of timber or other forest products. DENR Administrative Order No. 59 series of 1993 specifies the documents required for the transport of timber and other forest products. Section 3 of the Administrative Order provides: Section 3. Documents Required.

Consistent with the policy stated above, the movement of logs, lumber, plywood, veneer, non-timber forest products and wood-based or nonwood-based products/commodities shall be covered with appropriate Certificates of Origin, issued by authorized DENR officials, as specified in the succeeding sections. xxx xxx xxx 3.3 Lumber. Unless otherwise herein provided, the transport of lumber shall be accompanied by a CERTIFICATE OF LUMBER ORIGIN (CLO) issued by the CENRO or his duly authorized representative which has jurisdiction over the processing plant producing the said lumber or the lumber firm authorized to deal in such commodities. In order to be valid, the CLO must be supported by the company tally sheet or delivery receipt, and in case of sale, a lumber sales invoice. xxx xxx xxx When apprehended on March 8, 1994, accused-appellant failed to present any certificate of origin of the 258 pieces of tanguile lumber. The trial court found: xxx xxx xxx . . . When apprehended by the police officers, the accused admittedly could not present a single document to justify his possession of the subject lumber. . . . Significantly, at the time the accused was apprehended by the police offices, he readily showed documents to justify his possession of the coconut slabs. Thus, he showed a certification issued by Remigio B. Rosario, Forest Ranger, of the DENR, CENRO, Sanchez Mira, Cagayan (Exhibit "E") and a xerox copy of the original certificate of title covering the parcel of land where the coconut slabs were cut.(Exhibit "F"). It is worthy to note that the certification dated March 7, 1994 states: THIS IS TO CERTIFY that the one (1) truckload of coconut slabs to be transported by Mr. Wilson Que on board truck bearing Plate No. PAD 548 were derived from matured coconut palms gathered inside the private land of Miss Bonifacia Collado under OCT No. P11614(8) located at Nagrangtayan, Sanchez Mira, Cagayan. This certification is being issued upon the request of Mr. Wilson Que for the purpose of facilitating the transportation of said coconut slabs from Sanchez Mira, Cagayan to San Vicente, Urdaneta, Pangasinan and is valid up to March 11, 1994 or upon discharge of its cargoes at its final destination, whichever comes first. It is crystal clear, therefore, that the accused was given permit by the DENR to transport one (1) truckload of coconut slabs only between March 7 to 11, 1994. The accused was apprehended onMarch 8, 1994 aboard his truck bearing plate number PAD-548 which was loaded not only with coconut slabs but with chainsawn lumber as well. Admittedly, the lumber could not be seen from the outside. The lumber were

placed in the middle and not visible unless the coconut slabs which were placed on the top, sides and rear of the truck were removed. Under these circumstances, the Court has no doubt that the accused was very much aware that he needed documents to possess and transport the lumber (b)ut could not secure one and, therefore, concealed the lumber by placing the same in such a manner that they could not be seen by police authorities by merely looking at the cargo. In this regard, the Court cannot give credence to his alleged letter dated March 3, 1994 addressed to the OIC CENRO Officer, CENRO, Sanchez Mira, Cagayan informing the CENRO that he would be transporting the subject lumber on March 7, 1994 from Sanchez Mira, Cagayan to Sto. Domingo, Ilocos Sur but was returned to him for the reason that he did not need a permit to transport the subject lumber. (Exhibits "8", "8-A"). While it is true that the letter indicates that it was received by CENRO on March 4, 1994, the Court has doubts that this was duly filed with the concerned office. According to the accused, he filed the letter in the morning of March 4 and returned in the afternoon of the same day. He was then informed by an employee of the CENRO whom he did not identify that he did not need a permit to transport the lumber because the lumber would be for personal used (sic) and ". . . came from PLTP." (Ibid) The letter-request was returned to him. The fact that the letter-request was returned to him creates doubts on the stance of the accused. Documents or other papers, i.e., letter-request of this kind filed with a government agency are not returned. Hence, when a person files or submits any document to a government agency, the agency gets the original copy. The filer only gets a duplicate copy to show that he has filed such document with the agency. Moreover, his avoidance as regards the identity of the employee of the CENRO who allegedly returned the letter-request to him also creates doubts on his stance. Thus, on cross-examination, the accused, when asked about the identity of the employee of the CENRO who returned the letter-request to him answered that he could recognize the person ". . . but they were already reshuffled." (TSN, February 8, 1995, p. 104) At one point, the accused also said that he did not know if that person was an employee of the DENR. (Ibid, p. 105) Be that as it may, the Court finds significance in the last paragraph of this letterrequest, to wit: xxx xxx xxx Please consider this as my Certificate of Transport Agreement in view of the fact that I am hauling and transporting my own lumber for my own needs. Thus, the accused through this letter considered the same as his certificate of transport agreement. Why then, if he was telling the truth, did he not take this letter with him when he transported the lumber on March 7, 1994?
All these circumstances clearly show that the letter comes from a polluted source.
19

xxx xxx xxx Accused-appellant's possession of the subject lumber without any documentation clearly constitutes an offense under Section 68 of P.D. 705. We also reject appellant's argument that the law only penalizes possession of illegal forest products and that the possessor cannot be held liable if he proves that the cutting, gathering, collecting or removal of such forest products is legal. There are two (2) distinct and separate offenses punished under Section 68 of P.D. 705, to wit: (1) Cutting, gathering, collecting and removing timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land without any authority; and (2) Possession of timber or other forest products without the legal documents required under existing forest laws and regulations. In the first offense, one can raise as a defense the legality of the acts of cutting, gathering, collecting or removing timber or other forest products by presenting the authorization issued by the DENR. In the second offense, however, it is immaterial whether the cutting, gathering, collecting and removal of the forest products is legal or not. Mere possession of forest products without the proper documents consummates the crime. Whether or not the lumber comes from a legal source is immaterial because E.O 277 considers the mere possession of timber or other forest products without the proper legal documents as malum prohibitum. On the second and third assignment of error, appellant contends that the seized lumber are inadmissible in evidence for being "fruits of a poisonous tree". Appellant avers that these pieces of lumber were obtained in violation of his constitutional right against unlawful searches and seizures as well as his right to counsel. We do not agree. The rule on warrantless search and seizure of a moving vehicle was summarized by this court in People vs.Bagista, 20 thus: The general rule regarding searches and seizures can be stated in this manner: no person shall be subjected to a search of his person, personal effects or belongings, or his residence except by virtue of a search warrant or on the occasion of a lawful arrest. The basis for the rule can be found in Article III, Section 2 of the 1987 Constitution, which states: The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose, shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and witnesses he may produce, and particularly describing the place to be searched, and the person or things to be seized.

Article III, Section 3 (2) further ordains that any evidence obtained in violation of the aforementioned right shall, among others, "be inadmissible for any purpose in any proceeding." The constitutional proscription against warrantless searches and seizures admits of certain exceptions. Aside from a search incident to a lawful arrest, a warrantless search had been upheld in cases of moving vehicles, and the seizure of evidence in plain view. With regard to the search of moving vehicles, this had been justified on the ground that the mobility of motor vehicles makes it possible for the vehicle to be searched to move out of the locality or jurisdiction in which the warrant must be sought. This in no way, however, gives the police officers unlimited discretion to conduct warrantless searches of automobiles in the absence of probable cause. When a vehicle is stopped and subjected to an extensive search, such a warrantless search has been held to be valid as long as the officers conducting the search have reasonable or probable cause to believe before search that they will find the instrumentality or evidence pertaining to a crime, in the vehicle to be searched. (citations omitted; emphasis supplied) As in Bagista, the police officers in the case at bar had probable cause to search appellant's truck. A member of the Provincial Task Force on Illegal Logging received a reliable information that a tenwheeler truck bearing plate number PAD-548 loaded with illegal lumber would pass through Ilocos Norte. Two weeks later, while members of the Provincial Task Force were patrolling along General Segundo Avenue, they saw the ten-wheeler truck described by the informant. When they apprehended it at the Marcos Bridge, accused-appellant, the owner of the truck and the cargo, admitted that there were sawn lumber in between the coconut slabs. When the police officers asked for the lumber's supporting documents, accused-appellant could not present any. The foregoing circumstances are sufficient to prove the existence of probable cause which justified the extensive search of appellant's truck even without a warrant. Thus, the 258 pieces of tanguile lumber were lawfully seized and were thus properly admitted as evidence to prove the guilt of accused-appellant. The foregoing disquisition renders unnecessary the issue of whether appellant's right to counsel under custodial investigation was violated. The Resolution of the issue will not affect the finding of guilt of appellant. IN VIEW WHEREOF, the instant appeal is DISMISSED. The Decision appealed from is AFFIRMED. Costs against appellant. SO ORDERED. Regalado, Romero, Mendoza and Torres, Jr., JJ., concur.

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EN BANC A.M. No. RTJ-06-2017 June 19, 2008

LT. GEN. ALFONSO P. DAGUDAG (Ret.), complainant, vs. JUDGE MAXIMO G.W. PADERANGA, Regional Trial Court, Branch 38, Cagayan de Oro City, respondent. DECISION PER CURIAM, J.: This is a complaint for gross ignorance of the law and conduct unbecoming a judge filed by retired Lt. Gen. Alfonso P. Dagudag (Gen. Dagudag), Head of Task Force Sagip Kalikasan, against Judge Maximo G. W. Paderanga (Judge Paderanga), Presiding Judge of the Regional Trial Court, Branch 38, Cagayan de Oro City. On or about 30 January 2005, the Region VII Philippine National Police Regional Maritime Group (PNPRMG) received information that MV General Ricarte of NMC Container Lines, Inc. was shipping container vans containing illegal forest products from Cagayan de Oro to Cebu. The shipments were falsely declared as cassava meal and corn grains to avoid inspection by the Department of Environment and Natural Resources (DENR).1 On 30 and 31 January 2005, a team composed of representatives from the PNPRMG, DENR, and the Philippine Coast Guard inspected the container vans at a port in Mandaue City, Cebu. The team discovered the undocumented forest products and the names of the shippers and consignees: Container Van No. NCLU 2000492-22GI IEAU 2521845-2210 NOLU 2000682-22GI INBU 3125757-BB2210 NCLU 20001591-22GI GSTU 339074-US2210 CRXU 2167567 NCLU 2001570-22GI Shipper Polaris Chua Polaris Chua Rowena Balangot Rowena Balangot Jovan Gomez Jovan Gomez Raffy Enriquez Raffy Enriquez Consignee Polaris Chua Polaris Chua Rowena Balangot Rowena Balangot Jovan Gomez Jovan Gomez Raffy Enriquez Raffy Enriquez

The crew of MV General Ricarte failed to produce the certificate of origin forms and other pertinent transport documents covering the forest products, as required by DENR Administrative Order No. 07-94. Gen. Dagudag alleged that, since nobody claimed the forest products within a reasonable period of time, the DENR considered them as abandoned and, on 31 January 2005, the Provincial Environment and Natural Resources Office (PENRO) Officer-in-Charge (OIC), Richard N. Abella, issued a seizure receipt to NMC Container Lines, Inc.2 On 1 February 2005, Community Environment and Natural Resources Office (CENRO) OIC Loreto A. Rivac (Rivac) sent a notice to NMC Container Lines, Inc. asking for explanation why the government should not confiscate the forest products.3 In an affidavit4 dated 9 February 2005, NMC Container Lines, Inc.s Branch Manager Alex Conrad M. Seno stated that he did not see any reason why the government should not confiscate the forest products and that NMC Container Lines, Inc. had no knowledge of the actual content of the container vans.

On 2, 9, and 15 February 2005, DENR Forest Protection Officer Lucio S. Canete, Jr. posted notices on the CENRO and PENRO bulletin boards and at the NMC Container Lines, Inc. building informing the unknown owner about the administrative adjudication scheduled on 18 February 2005 at the Cebu City CENRO. Nobody appeared during the adjudication.5 In a resolution6 dated 10 March 2005, Rivac, acting as adjudication officer, recommended to DENR Regional Executive Director Clarence L. Baguilat that the forest products be confiscated in favor of the government. In a complaint7 dated 16 March 2005 and filed before Judge Paderanga, a certain Roger C. Edma (Edma) prayed that a writ of replevin be issued ordering the defendants DENR, CENRO, Gen. Dagudag, and others to deliver the forest products to him and that judgment be rendered ordering the defendants to pay him moral damages, attorneys fees, and litigation expenses. On 29 March 2005, Judge Paderanga issued a writ of replevin8 ordering Sheriff Reynaldo L. Salceda to take possession of the forest products. In a motion to quash the writ of replevin,9 the defendants DENR, CENRO, and Gen. Dagudag prayed that the writ of replevin be set aside: (1) Edmas bond was insufficient; (2) the forest products were falsely declared as cassava meal and corn grains; (3) Edma was not a party-in-interest; (4) the forest products were not covered by any legal document; (5) nobody claimed the forest products within a reasonable period of time; (6) the forest products were already considered abandoned; (7) the forest products were lawfully seized under the Revised Forestry Code of the Philippines; (8) replevin was not proper; (9) courts could not take cognizance of cases pending before the DENR; (10) Edma failed to exhaust administrative remedies; and (11) the DENR was the agency responsible for the enforcement of forestry laws. In a motion to dismiss ad cautelam10 dated 12 April 2005, the defendants prayed that the complaint for replevin and damages be dismissed: (1) the real defendant is the Republic of the Philippines; (2) Edma failed to exhaust administrative remedies; (3) the State cannot be sued without its consent; and (4) Edma failed to allege that he is the owner or is entitled to the possession of the forest products. In an order11 dated 14 April 2005, Judge Paderanga denied the motion to quash the writ of replevin for lack of merit. Gen. Dagudag filed with the Office of the Court Administrator (OCA) an affidavit-complaint12 dated 8 July 2005 charging Judge Paderanga with gross ignorance of the law and conduct unbecoming a judge. Gen. Dagudag stated that: During the x x x hearing, [Judge Paderanga] showed manifest partiality in favor of x x x Edma. DENRs counsel was lambasted, cajoled and intimidated by [Judge Paderanga] using words such as "SHUT UP" and "THATS BALONEY." xxxx Edma in the replevin case cannot seek to recover the wood shipment from the DENR since he had not sought administrative remedies available to him. The prudent thing for [Judge Paderanga] to have done was to dismiss the replevin suit outright. xxxx [Judge Paderangas] act[s] of taking cognizance of the x x x replevin suit, issuing the writ of replevin and the subsequent denial of the motion to quash clearly demonstrates [sic] ignorance of the law.

In its 1st Indorsement13 dated 1 August 2005, the OCA directed Judge Paderanga to comment on the affidavit-complaint. In his comment14 dated 6 September 2005, Judge Paderanga stated that he exercised judicial discretion in issuing the writ of replevin and that he could not delve into the issues raised by Gen. Dagudag because they were related to a case pending before him. In its Report15 dated 10 July 2006, the OCA found that Judge Paderanga (1) violated the doctrine of exhaustion of administrative remedies; (2) violated the doctrine of primary jurisdiction; and (3) used inappropriate language in court. The OCA recommended that the case be re-docketed as a regular administrative matter; that Judge Paderanga be held liable for gross ignorance of the law and for violation of Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary;16 and that he be fined P30,000. In its Resolution17 dated 16 August 2006, the Court re-docketed the case as a regular administrative matter and required the parties to manifest whether they were willing to submit the case for decision based on the pleadings already filed. Judge Paderanga manifested his willingness to submit the case for decision based on the pleadings already filed.18 Since Gen. Dagudag did not file any manifestation, the Court considered him to have waived his compliance with the 16 August 2006 Resolution.19 The Court finds Judge Paderanga liable for gross ignorance of the law and for conduct unbecoming a judge. The DENR is the agency responsible for the enforcement of forestry laws. Section 4 of Executive Order No. 192 states that the DENR shall be the primary agency responsible for the conservation, management, development, and proper use of the countrys natural resources. Section 68 of Presidential Decree No. 705, as amended by Executive Order No. 277, states that possessing forest products without the required legal documents is punishable. Section 68-A states that the DENR Secretary or his duly authorized representatives may order the confiscation of any forest product illegally cut, gathered, removed, possessed, or abandoned. In the instant case, the forest products were possessed by NMC Container Lines, Inc. without the required legal documents and were abandoned by the unknown owner. Consequently, the DENR seized the forest products. Judge Paderanga should have dismissed the replevin suit outright for three reasons. First, under the doctrine of exhaustion of administrative remedies, courts cannot take cognizance of cases pending before administrative agencies. In Factoran, Jr. v. Court of Appeals,20 the Court held that: The doctrine of exhaustion of administrative remedies is basic. Courts, for reasons of law, comity and convenience, should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given an appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative forum. (Emphasis ours) In Dy v. Court of Appeals,21 the Court held that a party must exhaust all administrative remedies before he can resort to the courts. In Paat v. Court of Appeals,22 the Court held that: This Court in a long line of cases has consistently held that before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer

concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy should be exhausted first before courts judicial power can be sought. The premature invocation of courts intervention is fatal to ones cause of action. Accordingly, absent any finding of waiver or estoppel the case is susceptible of dismissal for lack of cause of action. (Emphasis ours) In the instant case, Edma did not resort to, or avail of, any administrative remedy. He went straight to court and filed a complaint for replevin and damages. Section 8 of Presidential Decree No. 705, as amended, states that (1) all actions and decisions of the Bureau of Forest Development Director are subject to review by the DENR Secretary; (2) the decisions of the DENR Secretary are appealable to the President; and (3) courts cannot review the decisions of the DENR Secretary except through a special civil action for certiorari or prohibition. In Dy,23 the Court held that all actions seeking to recover forest products in the custody of the DENR shall be directed to that agency not the courts. In Paat,24 the Court held that: Dismissal of the replevin suit for lack of cause of action in view of the private respondents failure to exhaust administrative remedies should have been the proper course of action by the lower court instead of assuming jurisdiction over the case and consequently issuing the writ [of replevin]. Exhaustion of the remedies in the administrative forum, being a condition precedent prior to ones recourse to the courts and more importantly, being an element of private respondents right of action, is too significant to be waylaid by the lower court. xxxx Moreover, the suit for replevin is never intended as a procedural tool to question the orders of confiscation and forfeiture issued by the DENR in pursuance to the authority given under P.D. 705, as amended. Section 8 of the said law is explicit that actions taken by the Director of the Bureau of Forest Development concerning the enforcement of the provisions of the said law are subject to review by the Secretary of DENR and that courts may not review the decisions of the Secretary except through a special civil action for certiorari or prohibition. (Emphasis ours) Second, under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative agencies of special competence. The DENR is the agency responsible for the enforcement of forestry laws. The complaint for replevin itself stated that members of DENRs Task Force Sagip Kalikasan took over the forest products and brought them to the DENR Community Environment and Natural Resources Office. This should have alerted Judge Paderanga that the DENR had custody of the forest products, that administrative proceedings may have been commenced, and that the replevin suit had to be dismissed outright. In Tabao v. Judge Lilagan25 a case with a similar set of facts as the instant case the Court held that: The complaint for replevin itself states that the shipment x x x [was] seized by the NBI for verification of supporting documents. It also states that the NBI turned over the seized items to the DENR "for official disposition and appropriate action." x x x To our mind, these allegations [should] have been sufficient to alert respondent judge that the DENR has custody of the seized items and that administrative proceedings may have already been commenced concerning the shipment. Under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative

agencies of special competence. x x x The prudent thing for respondent judge to have done was to dismiss the replevin suit outright. (Emphasis ours) In Paat,26 the Court held that: [T]he enforcement of forestry laws, rules and regulations and the protection, development and management of forest lands fall within the primary and special responsibilities of the Department of Environment and Natural Resources. By the very nature of its function, the DENR should be given a free hand unperturbed by judicial intrusion to determine a controversy which is well within its jurisdiction. The assumption by the trial court, therefore, of the replevin suit filed by private respondents constitutes an unjustified encroachment into the domain of the administrative agencys prerogative. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. (Emphasis ours) Third, the forest products are already in custodia legis and thus cannot be the subject of replevin. There was a violation of the Revised Forestry Code and the DENR seized the forest products in accordance with law. In Calub v. Court of Appeals,27 the Court held that properties lawfully seized by the DENR cannot be the subject of replevin: Since there was a violation of the Revised Forestry Code and the seizure was in accordance with law, in our view the [properties seized] were validly deemed in custodia legis. [They] could not be subject to an action for replevin. For it is property lawfully taken by virtue of legal process and considered in the custody of the law, and not otherwise. (Emphasis ours) Judge Paderangas acts of taking cognizance of the replevin suit and of issuing the writ of replevin constitute gross ignorance of the law. In Tabao,28 the Court held that: Under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative of special competence. x x x [T]he plaintiff in the replevin suit who [sought] to recover the shipment from the DENR had not exhausted the administrative remedies available to him. The prudent thing for respondent judge to have done was to dismiss the replevin suit outright. Under Section 78-A of the Revised Forestry Code, the DENR secretary or his authorized representatives may order the confiscation of forest products illegally cut, gathered, removed, or possessed or abandoned. xxxx Respondent judges act of taking cognizance of the x x x replevin suit clearly demonstrates ignorance of the law. x x x [J]udges are expected to keep abreast of all laws and prevailing jurisprudence. Judges are duty bound to have more than just a cursory acquaintance with laws and jurisprudence. Failure to follow basic legal commands constitutes gross ignorance of the law from which no one may be excused, not even a judge. (Emphasis ours)

Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary states that competence is a prerequisite to the due performance of judicial office. Section 3 of Canon 6 states that judges shall take reasonable steps to maintain and enhance their knowledge necessary for the proper performance of judicial duties. Judges should keep themselves abreast with legal developments and show acquaintance with laws.29 The rule that courts cannot prematurely take cognizance of cases pending before administrative agencies is basic. There was no reason for Judge Paderanga to make an exception to this rule. The forest products were in the custody of the DENR and Edma had not availed of any administrative remedy. Judge Paderanga should have dismissed the replevin suit outright. In Espaol v. ToledoMupas,30 the Court held that: Being among the judicial front-liners who have direct contact with the litigants, a wanton display of utter lack of familiarity with the rules by the judge inevitably erodes the confidence of the public in the competence of our courts to render justice. It subjects the judiciary to embarrassment. Worse, it could raise the specter of corruption. When the gross inefficiency springs from a failure to consider so basic and elemental a rule, a law, or a principle in the discharge of his or her duties, a judge is either too incompetent and undeserving of the exalted position and title he or she holds, or the oversight or omission was deliberately done in bad faith and in grave abuse of judicial authority. The OCA found Judge Paderanga liable for using inappropriate language in court: "We x x x find respondents intemperate use of "Shut up!" and "Baloney!" well nigh inappropriate in court proceedings. The utterances are uncalled for."31 Indeed, the 14 and 22 April 2005 transcripts of stenographic notes show that Judge Paderanga was impatient, discourteous, and undignified in court: Atty. Luego: Your Honor, we want to have this motion because that is... Judge Paderanga: I am asking you why did you not make any rejoinder[?] xxxx Atty. Luego: I apologize, Your Honor. We are ready to... Judge Paderanga: Ready to what? Proceed. Atty. Luego: Yes, Your Honor. We filed this motion to quash replevin, Your Honor, on the grounds, first and foremost, it is our contention, Your Honor, with all due respect of [sic] this Honorable Court, that the writ of replevin dated March 29, 2005 was improper, Your Honor, for the reasons that the lumber, subject matter of this case, were apprehended in accordance with... Judge Paderanga: Where is your proof that it was apprehended? Where is your proof? Is that apprehension proven by a seizure receipt? Where is your seizure receipt? Atty. Luego: Under the rules...

Judge Paderanga: Where is your seizure receipt? You read your rules. What does [sic] the rules say? Where in your rules does it say that it does not need any seizure receipt? You look at your rules. You point out the rules. You take out your rules and then you point out. Do you have the rules? xxxx Atty. Luego: Your Honor, there was no seizure receipt, but during the apprehension, Your Honor, there was no claimant. Judge Paderanga: Answer me. Is there a seizure receipt? Atty. Luego: But during the apprehension, Your Honor, no owner has [sic] appeared. xxxx Atty. Luego: According to [the] rules, Your Honor, if there is no... Judge Paderanga: Whom are you seizing it from? To [sic] whom are you taking it from? Atty. Luego: From the shipping company, Your Honor. xxxx Atty. Luego: Your Honor please, the shipping company denied the ownership of that lumber. xxxx Atty. Luego: But the shipping company, Your Honor,... Judge Paderanga: Shut up. Thats baloney. You are seizing it from nobody. Then how can you seize it from the shipping company. Are you not? You are a lawyer. Who is in possession of the property? The shipping company. Why did you not issue [a] seizure receipt to the shipping company? Atty. Luego: But the... May I continue, Your Honor? xxxx Judge Paderanga: Stop talking about the shipping company. Still you did not issue a seizure receipt here. Well, Im telling you you should have issued [a] seizure receipt to the shipping company. xxxx Judge Paderanga: You are a lawyer. You should know how to write pleadings. You write the pleadings the way it should be, not the way you think it should be. Atty. Luego: Im sorry, Your Honor.

Judge Paderanga: You are an officer of the court. You should be careful with your language. You say that I am wrong. Its you who are [sic] wrong because you do not read the law. xxxx Judge Paderanga: Then you read the law. How dare you say that the Court is wrong. xxxx Judge Paderanga: Are you not representing [the DENR]? Atty. Luego: Yes, in this case, Your Honor. Judge Paderanga: Then you are representing them. They are your clients. What kind of a lawyer are you?32 xxxx Atty. Tiamson: Specifically it was stated in the [Factoran] versus Court of Appeals [case] that the Court should not interfere, Your Honor. Judge Paderanga: No. xxxx Judge Paderanga: The problem with you people is you do not use your heads. Atty. Tiamson: We use our heads, your Honor. xxxx Atty. Tiamson: Your Honor, we would like to put on record that we use our heads, your Honor.33 (Emphasis ours) Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary states that judges shall be patient, dignified, and courteous in relation to lawyers. Rule 3.04, Canon 3 of the Code of Judicial Conduct states that judges should be patient and courteous to lawyers, especially the inexperienced. They should avoid the attitude that the litigants are made for the courts, instead of the courts for the litigants. Judicial decorum requires judges to be temperate in their language at all times. They must refrain from inflammatory, excessively rhetoric, or vile language.34 They should (1) be dignified in demeanor and refined in speech; (2) exhibit that temperament of utmost sobriety and self-restraint; and (3) be considerate, courteous, and civil to all persons who come to their court.35 In Juan de la Cruz v. Carretas,36 the Court held that: A judge who is inconsiderate, discourteous or uncivil to lawyers x x x who appear in his sala commits an impropriety and fails in his duty to reaffirm the peoples faith in the judiciary. He

also violates Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary. xxxx It is reprehensible for a judge to humiliate a lawyer x x x. The act betrays lack of patience, prudence and restraint. Thus, a judge must at all times be temperate in his language. He must choose his words x x x with utmost care and sufficient control. The wise and just man is esteemed for his discernment. Pleasing speech increases his persuasiveness. Equanimity and judiciousness should be the constant marks of a dispenser of justice. A judge should always keep his passion guarded. He can never allow it to run loose and overcome his reason. He descends to the level of a sharp-tongued, ill-mannered petty tyrant when he utters harsh words x x x. As a result, he degrades the judicial office and erodes public confidence in the judiciary. Judge Paderangas refusal to consider the motion to quash the writ of replevin, repeated interruption of the lawyers, and utterance of "shut up," "thats baloney," "how dare you say that the court is wrong," "what kind of a lawyer are you?," and "the problem with you people is you do not use your heads" are undignified and very unbecoming a judge. In Office of the Court Administrator v. Paderanga,37 the Court already reprimanded Judge Paderanga for repeatedly saying "shut up," being arrogant, and declaring that he had "absolute power" in court. He has not changed. Section 8, Rule 140 of the Rules of Court classifies gross ignorance of the law as a serious offense. It is punishable by (1) dismissal from the service, forfeiture of benefits, and disqualification from reinstatement to any public office; (2) suspension from office without salary and other benefits for more than three months but not exceeding six months; or (3) a fine of more than P20,000 but not exceeding P40,000.38 Section 10 of Rule 140 classifies conduct unbecoming a judge as a light offense. It is punishable by (1) a fine of not less than P1,000 but not exceeding P10,000; (2) censure; (3) reprimand; or (4) admonition with warning.39 The Court notes that this is Judge Paderangas third offense. In Office of the Court Administrator v. Paderanga,40the Court held him liable for grave abuse of authority and simple misconduct for unceremoniously citing a lawyer in contempt while declaring himself as having "absolute power" and for repeatedly telling a lawyer to "shut up." InBeltran, Jr. v. Paderanga,41 the Court held him liable for undue delay in rendering an order for the delay of nine months in resolving an amended formal offer of exhibits. In both cases, the Court sternly warned Judge Paderanga that the commission of another offense shall be dealt with more severely. The instant case and the two cases decided against him demonstrate Judge Paderangas arrogance, incorrigibility, and unfitness to become a judge. Judge Paderanga has two other administrative cases pending against him one42 for gross ignorance of the law, knowingly rendering an unjust judgment, and grave abuse of authority, and the other43 for gross misconduct, grave abuse of authority, and gross ignorance of the law. The Court will not hesitate to impose the ultimate penalty on those who have fallen short of their accountabilities. It will not tolerate any conduct that violates the norms of public accountability and diminishes the faith of the people in the judicial system.44 WHEREFORE, the Court finds Judge Maximo G.W. Paderanga, Regional Trial Court, Branch 38, Cagayan de Oro City, GUILTY of GROSS IGNORANCE OF THE LAW and UNBECOMING CONDUCT. Accordingly, the CourtDISMISSES him from the service, with forfeiture of all retirement

benefits, except accrued leave credits, and with prejudice to reinstatement or appointment to any public office, including government-owned or controlled corporations. SO ORDERED.

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SECOND DIVISION

[A.M. No. RTJ-01-1651. September 4, 2001]

PROSECUTOR LEO C. TABAO, Regional Chairman, Special Task Force on Environment and Natural Resources (STF-ENR) of Region 8, Tacloban City, complainant, vs. JUDGE FRISCO T. LILAGAN, Presiding Judge, Regional Trial Court, Leyte, Branch 34, and SHERIFF IV LEONARDO V. AGUILAR, Office of the Clerk of Court, Regional Trial Court, Tacloban City, respondents. DECISION
QUISUMBING, J.:

This is an administrative complaint filed by Atty. Leo C. Tabao, Assistant City Prosecutor of Tacloban, in his capacity as Regional Chairman of the Region 8 Special Task Force on Environment and Natural Resources, against (1) Judge Frisco T. Lilagan, presiding judge of the Leyte Regional Trial Court, Branch 34, for gross ignorance of the law, gross abuse of judicial authority, and willful disobedience to settled jurisprudence; and (2) Sheriff IV Leonardo V. Aguilar of the Leyte RTC, Office of the Clerk of Court, for gross irregularity in the performance of official duties, giving unwarranted benefits to a private individual, violation of Section 1(b) and (c) of P.D. No. 1829, and conduct prejudicial to the best interest of the service. The records of this case reveal the following facts. On February 24, 1998, a water craft registered under the name M/L Hadija, from Bongao, Tawi-tawi, was docked at the port area of Tacloban City with a load of around 100 tons of tanbark. Due to previous irregular and illegal shipments of tanbark from Bongao, agents of the National Bureau of Investigation in Region 8 (NBI-EVRO #8) decided to verify the shipments accompanying documents as the M/L Hadija was unloading its cargo to its consignee, a certain Robert Hernandez. The NBI agents found the documents irregular and incomplete, and consequently they ordered the unloading of the cargo stopped. The tanbark, the boat M/L Hadija, and three cargo trucks were seized and impounded.

On March 5, 1998, NBI-EVRO #8 Regional Director Carlos S. Caabay filed a criminal complaint for violation of Section 68 (now Section 78) of P.D. No. 705,[1] the Forestry Reform Code of the Philippines (as amended), against the captain and crew of the M/L Hadija, Robert Hernandez, Tandico Chion, Alejandro K. Bautista, and Marcial A. Dalimot. Bautista was a forester while Dalimot was a Community Environment and Natural Resources Officer (CENRO) of the Department of Environment and Natural Resources (DENR) office in Tacloban City. Bautista and Dalimot were, thus, also charged with violation of Section 3(e) of R.A. No. 3019 or the Anti-Graft and Corrupt Practices Act,[2] along with Habi A. Alih and Khonrad V. Mohammad of the CENRO-Bongao, Tawi-tawi. The complaint was docketed as I.S. No. 98-296 at the Prosecutors Office of Tacloban City. In an order dated March 6, 1998,[3] complainant directed the seizure by the DENR of the M/L Hadija, its cargo, and the three trucks pending preliminary investigation of the case. DENR thus took possession of the aforesaid items on March 10, 1998, with notice to the consignee Robert Hernandez and the NBI Regional Director. On March 11, 1998, Hernandez filed in the Regional Trial Court of Leyte a case for replevin to recover the items seized by the DENR. The case was raffled off to Branch 34 of said court and docketed as Civil Case No. 98-03-42. On March 16, 1998, subpoenas were issued to the respondents in I.S. No. 98-296. On March 17, 1998, confiscation proceedings were conducted by the Provincial Environment and Natural Resources Office (PENRO)-Leyte, with both Hernandez and his counsel present. On March 19, 1998, herein respondent Judge Frisco T. Lilagan issued a writ of replevin and directed respondent Sheriff IV Leonardo V. Aguilar to take possession of the items seized by the DENR and to deliver them to Hernandez after the expiration of five days.[4] Respondent sheriff served a copy of the writ to the Philippine Coast Guard station in Tacloban City at around 5:45 p.m. of March 19, 1998. Thus, the filing of this administrative complaint against respondents via a letter addressed to the Chief Justice and dated April 13, 1998, by Atty. Tabao. Complainant avers that replevin is not available where the properties sought to be recovered are involved in criminal proceedings for illegal logging. He points out that this is a well-settled issue and cites several decisions[5] of this Court and the Court of Appeals on the matter. He argues that respondent judge should have known of the existing jurisprudence on this issue, particularly since they are subject to mandatory judicial notice per Section 1, Rule 129 of the Revised Rules of Court. Complainant submits that respondent judge is either grossly ignorant of the law and jurisprudence or purposely disregarded them. But he avers that it is respondent judges duty to keep abreast of developments in law and jurisprudence. Complainant claims that respondent judge cannot claim ignorance of the proceedings in I.S. No. 98-296 for the following reasons: (1) the defendants in the replevin case were all DENR officers, which should have alerted respondent judge to the possibility that the items sought to be recovered were being held by the defendants in their official capacities; and (2) the complaint for replevin itself states that the items were intercepted by the NBI for verification of supporting

documents, which should have made respondent judge suspect that the same were being held by authority of law. As regards respondent sheriff Leonardo V. Aguilar, complainant states that it was incumbent upon Aguilar to safeguard the M/L Hadija and prevent it from leaving the port of Tacloban City, after he had served a writ of seizure therefor on the Philippine Coast Guard. However, on March 19, 1998, the vessel left the port of Tacloban City, either through respondent sheriffs gross negligence or his direct connivance with interested parties, according to complainant. As of the time of the filing of the complaint, according to complainant, the whereabouts of the vessel and its crew were unknown. Moreover, complainant points out that respondent sheriff released the seized tanbark to Hernandez on March 20 and 21, 1998, or within the five-day period that he was supposed to keep it under the terms of the writ. Complainant argues that the tanbark formed part of the peoples evidence in the criminal complaint against Hernandez and the others. By his act, respondent sheriff effectively altered, suppressed, concealed, or destroyed the integrity of said evidence. For this act, complainant contends that respondent sheriff may be held liable under Section 1(b) of P.D. 1829, Penalizing Obstruction of Apprehension and Prosecution of Criminal Offenders.[6] Respondent sheriffs acts also constitute gross irregularity in the performance of his duty as a court employee. Complainant notes that respondent sheriff was absent from his office from March 20 to March 24, 1998. This period included the dates he was supposed to have released the tanbark to Hernandez. Complainant contends that respondent sheriff not only unlawfully released the tanbark, he also made it appear that he was not physically present when such act was done. In separate indorsements dated September 9, 1998, then Court Administrator Alfredo L. Benipayo referred this administrative matter to both respondents for comment. In his comment dated October 12, 1998,[7] respondent judge calls the attention of the Office of the Court Administrator to a pending motion to dismiss filed by the defendants in the replevin case that effectively prevented him from commenting on the issue. The discussions that would have to be included in the comment, he says, would also resolve the pending motion to dismiss. Respondent judge contends that complainant should have been prudent enough to wait for the resolution of the motion to dismiss before filing the instant administrative case. Respondent judge claims that he was unaware of the existence of I.S. No. 98-296. He only learned of the criminal case from an urgent manifestation dated March 20, 1998, filed by complainant. He argues that he issued an order dated March 25, 1998, suspending the transfer to Hernandez of possession of the subject items, pending resolution of the urgent manifestation. Respondent judge stresses that the writ of replevin was issued in strict compliance with the requirements laid down in Rule 60 of the Revised Rules of Court. He also points out that said writ was issued provisionally and was not intended to be the final disposition of the replevin case. Respondent judge avers that the charge of gross ignorance of the law is premature since he has not made a ruling yet on the motion to dismiss filed in the replevin case. He contends that it was too much to ask from him to take note of the fact that the defendants in said case were officials of DENR and make assumptions based on such fact. Moreover, respondent judge

submits that while the complaint alleged that the cargo of tanbark was intercepted by the NBI, it also alleged that the consignee thereof produced documents to prove that the shipment was legal. In conclusion, respondent judge points out that no apprehension report was issued by the NBI regarding the shipment. Neither did the DENR issue a seizure report. Respondent judge contends that the validity of the seizure of the subject items by the DENR is a matter that will have to be resolved in relation to the motion to dismiss. For his part, respondent sheriff submits[8] that he served the writ of replevin on the Coast Guard precisely to prevent the departure of the subject vessel, since he does not have the means to physically prevent said vessel from sailing. The Coast Guard commander should have examined the vessel and its crew after being served the writ, to determine whether or not they were engaged in any illegal activity. Respondent sheriff narrates that no cargo was on board the vessel when he served the writ on the Coast Guard. He verified the cargos status with DENR, which furnished him a copy of a fax transmission stating that the tanbark came from legitimate sources except that the shipment documents were not in order.[9] Respondent sheriff contends that it was his ministerial duty to serve the writ of replevin, absent any instruction to the contrary. He argues further that since the items subject of the writ are in the custody of the court and could be disposed of only through court order, there could not be any unwarranted benefit to a private individual as claimed by complainant. Noting that the questioned shipment of tanbark was not covered by either an NBI apprehension report or a DENR seizure report, respondent sheriff contends that complainant should have taken steps to protect the integrity of the shipment instead of heaping blame upon others for his own negligence. Respondent sheriff avers that it was not his intention to obstruct the apprehension and prosecution of criminal offenders, contrary to complainants claim. Respondent sheriff refutes complainants claim that he was absent from his office from March 20 to March 24, 1998, and alleges that it was complainant who was absent from court hearings on several occasions, in violation of his duty as a prosecutor. Respondent submitted two supplemental comments dated October 30, 1998,[10] and May 3, 1999,[11] (1) reiterating his contention that the tanbark seized by the DENR and subject of the replevin case had been found to come from a legitimate source, per an order signed by the Regional Director (Region 8) of the DENR,[12] and (2) informing the OCA that the main replevin case was dismissed per an order of respondent judge dated November 27, 1998.[13] As required by resolution of the Court dated January 24, 2001, the parties herein separately manifested that they are willing to have the present case resolved based on the record on hand. We note that in its report dated April 8, 1999, the OCA, after reviewing the case, recommended that respondent judge be fined in the amount of P15,000.00 for gross ignorance of the law. At the same time, the OCA recommended that the charges against respondent sheriff be dismissed for lack of merit. The recommendation of the OCA is well taken, except for the amount of the fine to be imposed on said respondent judge.

The complaint for replevin itself states that the shipment of tanbark as well as the vessel on which it was loaded were seized by the NBI for verification of supporting documents. [14] It also states that the NBI turned over the seized items to the DENR for official disposition and appropriate action.[15] A copy of the document evidencing the turnover to DENR was attached to the complaint as Annex D.[16] To our mind, these allegations would have been sufficient to alert respondent judge that the DENR has custody of the seized items and that administrative proceedings may have already been commenced concerning the shipment. Under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative agencies of special competence.[17] Note, too, that the plaintiff in the replevin suit who seeks to recover the shipment from the DENR had not exhausted the administrative remedies available to him.[18] The prudent thing for respondent judge to have done was to dismiss the replevin suit outright. Under Section 78-A of the Revised Forestry Code, the DENR secretary or his authorized representatives may order the confiscation of forest products illegally cut, gathered, removed, or possessed or abandoned, including the conveyances used in the commission of the offense. In this regard, we declared in Paat v. Court of Appeals:

the enforcement of forestry laws, rules and regulations and the protection, development and management of forest lands fall within the primary and special responsibilities of the Department of Environment and Natural Resources. By the very nature of its function, the DENR should be given a free hand unperturbed by judicial intrusion to determine a controversy which is well within its jurisdiction. The assumption by the trial court, therefore, of the replevin suit filed by private respondents constitutes an unjustified encroachment into the domain of the administrative agencys prerogative. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. xxx
[19]

Respondent judges act of taking cognizance of the subject replevin suit clearly demonstrates ignorance of the law. He has fallen short of the standard set forth in Canon 1, Rule 1.01 of the Code of Judicial Conduct, that a judge must be the embodiment of competence, integrity, and independence. To measure up to this standard, judges are expected to keep abreast of all laws and prevailing jurisprudence.[20] Judges are duty bound to have more than just a cursory acquaintance with laws and jurisprudence. Failure to follow basic legal commands constitutes gross ignorance of the law from which no one may be excused, not even a judge.[21] We find, however, that respondent judge had already vacated the Writ of Seizure he issued on March 19, 1998, in a subsequent Order dated November 27, 1998, dismissing the Civil Complaint for replevin filed by Robert Hernandez against the Regional Director of the DENR and other officers. He also directed in said order the sheriff to return to CENRO, Tacloban City, all the chattels confiscated by virtue of the Writ of Seizure.[22]

Further, we find that Sheriff Aguilar in his Final Return of the Writ, dated December 15, 1998, had already delivered to CENRO the 102 tons and 120 kilos of tanbark duly receipted by CENRO representative Marcial A. Dalimot on the same date.[23] The OCA recommends that respondent judge be fined in the amount of P15,000.00. Under the circumstances, considering that this is the first complaint against him, we deem a fine of P10,000.00 to be sufficient. Regarding the charges against respondent sheriff, we agree with the OCA that they should be dismissed. Respondent sheriff merely complied with his ministerial duty to serve the writ with reasonable celerity and to execute it promptly in accordance with its mandates.[24] WHEREFORE, respondent Judge Frisco T. Lilagan is hereby found liable for gross ignorance of the law and is accordingly ordered to pay a FINE of P10,000.00, with a WARNING that a repetition of the same or a similar offense will be dealt with more severely. The complaint against respondent Sheriff IV Leonardo V. Aguilar is DISMISSED for lack of merit. SO ORDERED. Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.

[1]

SEC. 78. Cutting, Gathering and/or Collecting Timber or Other Forestry Products Without License. -- Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land, without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships, associations, or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable, and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation. The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found.
[2]

SEC. 3. Corrupt practices of public officers. -- In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful: xxx (e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and employees of offices or government corporations charged with the grant of licenses or permits or other concessions. xxx
[3]

Rollo, p. 58. Id. at 74-75.

[4]

[5]

Paat v. Court of Appeals, 266 SCRA 167 (1997); Dapula, et al. v. Encinas, CA-G.R. No. 37055, October 28, 1996; Sampaga, et al. v. Espina, CA-G.R. No. 28404, April 20, 1994.

[6]

Sec. 1. The penalty of prision correccional in its maximum period, or a fine ranging from 1,000 to 6,000 pesos, or both, shall be imposed upon any person who knowingly or willfully obstructs, impedes, frustrates or delays the apprehension of suspects and the investigation and prosecution of criminal cases by committing any of the following acts: xxx (b) Altering, destroying, suppressing or concealing any paper, record, document, or object with intent to impair its verity, authenticity, legibility, availability, or admissibility as evidence in any investigation of or official proceedings in criminal cases, or to be used in the investigation of, or official proceedings in, criminal cases. xxx
[7]

Rollo, pp. 81-94. See Comment dated October 11, 1998, rollo, pp. 197-206. Rollo, pp. 216-228. See in particular p. 227. Id. at 244-246. Id. at 264-265. Id. at 247-253. Id. at 266-268. Id. at 96. Id. at 98. Id. at 117.

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

Paat v. Court of Appeals, 266 SCRA 167, 178 (1997); Machete v. Court of Appeals, 250 SCRA 176, 182 (1995); Vidad v. RTC of Negros Oriental, Br. 42, 227 SCRA 271, 276 (1993).
[18]

Paat v. Court of Appeals, supra, at 184, reiterated in Dy v. Court of Appeals, 304 SCRA 331, 337 (1999). Paat v. Court of Appeals, supra, at 177-178. Cortes v. Agcaoili, 294 SCRA 423, 456 (1998). De Austria v. Beltran, 313 SCRA 443, 452 (1999). Rollo, pp. 266-268. Id. at 268-269. Onquit v. Binamira-Parcia, 297 SCRA 354, 364 (1998).

[19]

[20]

[21]

[22]

[23]

[24]

G.R. No. 115634

April 27, 2000

FELIPE CALUB and RICARDO VALENCIA, DEPARTMENT of ENVIRONMENT and NATURAL RESOURCES (DENR), CATBALOGAN, SAMAR, petitioners, vs. COURT OF APPEALS, MANUELA T. BABALCON, and CONSTANCIO ABUGANDA, respondents.

QUISUMBING, J.: For review is the decision1 dated May 27, 1994, of the Court of Appeals in CA-G.R. SP No. 29191, denying the petition filed by herein petitioners for certiorari, prohibition and mandamus, in order to annul the Order dated May 27, 1992, by the Regional Trial Court of Catbalogan, Samar. Said Order had denied petitioners' (a) Motion to Dismiss the replevin case filed by herein private respondents, as well as (b) petitioners Motion for Reconsideration of the Order of said trial court dated April 24, 1992, granting an application for a Writ of replevin.2 The pertinent facts of the case, borne by the records, are as follows: On January 28, 1992, the Forest Protection and Law Enforcement Team of the Community Environment and Natural Resources Office (CENRO) of the DENR apprehended two (2) motor vehicles, described as follows: 1. Motor Vehicle with Plate No. HAK-733 loaded with one thousand and twenty six (1,026) board feet of illegally sourced lumber valued at P8,544.75, being driven by one Pio Gabon and owned by [a certain] Jose Vargas. 2. Motor Vehicle with Plate No. FCN-143 loaded with one thousand two hundred twenty four and ninety seven (1,224.97) board feet of illegally-sourced lumber valued at P9,187.27, being driven by one Constancio Abuganda and owned by [a certain] Manuela Babalcon. . . .3 Constancio Abuganda and Pio Gabon, the drivers of the vehicles, failed to present proper documents and/or licenses. Thus, the apprehending team seized and impounded the vehicles and its load of lumber at the DENR-PENR (Department of Environment and Natural ResourcesProvincial Environment and Natural Resources) Office in Catbalogan.4 Seizure receipts were issued but the drivers refused to accept the receipts.5 Felipe Calub, Provincial Environment and Natural Resources Officer, then filed before the Provincial Prosecutor's Office in Samar, a criminal complaint against Abuganda, in Criminal Case No. 3795, for violation of Section 68 [78], Presidential Decree 705 as amended by Executive Order 277, otherwise known as the Revised Forestry Code.6 On January 31, 1992, the impounded vehicles were forcibly taken by Gabon and Abuganda from the custody of the DENR, prompting DENR Officer Calub this time to file a criminal complaint for grave coercion against Gabon and Abuganda. The complaint was, however, dismissed by the Public Prosecutor.7

On February 11, 1992, one of the two vehicles, with plate number FCN 143, was again apprehended by a composite team of DENR-CENR in Catbalogan and Philippine Army elements of the 802nd Infantry Brigade at Barangay Buray, Paranas, Samar. It was again loaded with forest products with an equivalent volume of 1,005.47 board feet, valued at P10,054.70. Calub duly filed a criminal complaint against Constancio Abuganda, a certain Abegonia, and several John Does, in Criminal Case No. 3625, for violation of Section 68 [78], Presidential Decree 705 as amended by Executive Order 277, otherwise known as the Revised Forestry Code.8 In Criminal Cases Nos. 3795 and 3625, however, Abegonia and Abuganda were acquitted on the ground of reasonable doubt. But note the trial court ordered that a copy of the decision be furnished the Secretary of Justice, in order that the necessary criminal action may be filed against Noe Pagarao and all other persons responsible for violation of the Revised Forestry Code. For it appeared that it was Pagarao who chartered the subject vehicle and ordered that cut timber be loaded on it.9 Subsequently, herein private respondents Manuela Babalcon, the vehicle owner, and Constancio Abuganda, the driver, filed a complaint for the recovery of possession of the two (2) impounded vehicles with an application for replevin against herein petitioners before the RTC of Catbalogan. The trial court granted the application for replevin and issued the corresponding writ in an Order dated April 24, 1992. 10 Petitioners filed a motion to dismiss which was denied by the trial court. 11 Thus, on June 15, 1992, petitioners filed with the Supreme Court the present Petition for Certiorari, Prohibition andMandamus with application for Preliminary Injunction and/or a Temporary Restraining Order. The Court issued a TRO, enjoining respondent RTC judge from conducting further proceedings in the civil case for replevin; and enjoining private respondents from taking or attempting to take the motor vehicles and forest products seized from the custody of the petitioners. The Court further instructed the petitioners to see to it that the motor vehicles and other forest products seized are kept in a secured place and protected from deterioration, said property being incustodia legis and subject to the direct order of the Supreme Court. 12 In a Resolution issued on September 28, 1992, the Court referred said petition to respondent appellate court for appropriate disposition. 13 On May 27, 1994, the Court of Appeals denied said petition for lack of merit. It ruled that the mere seizure of a motor vehicle pursuant to the authority granted by Section 68 [78] of P.D. No. 705 as amended by E.O. No. 277 does not automatically place said conveyance in custodia legis. According to the appellate court, such authority of the Department Head of the DENR or his duly authorized representative to order the confiscation and disposition of illegally obtained forest products and the conveyance used for that purpose is not absolute and unqualified. It is subject to pertinent laws, regulations, or policies on that matter, added the appellate court. The DENR Administrative Order No. 59, series of 1990, is one such regulation, the appellate court said. For it prescribes the guidelines in the confiscation, forfeiture and disposition of conveyances used in the commission of offenses penalized under Section 68 [78] of P.D. No. 705 as amended by E.O. No. 277. 14 Additionally, respondent Court of Appeals noted that the petitioners failed to observe the procedure outlined in DENR Administrative Order No. 59, series of 1990. They were unable to submit a report of the seizure to the DENR Secretary, to give a written notice to the owner of the vehicle, and to render a report of their findings and recommendations to the Secretary. Moreover, petitioners' failure to comply with the procedure laid down by DENR Administrative Order No. 59, series of 1990, was confirmed by the admission of petitioners' counsel that no confiscation order has been issued prior to the seizure of the vehicle and the filing of the replevin suit. Therefore, in failing to follow such

procedure, according to the appellate court, the subject vehicles could not be considered in custodia legis. 15 Respondent Court of Appeals also found no merit in petitioners' claim that private respondents' complaint for replevin is a suit against the State. Accordingly, petitioners could not shield themselves under the principle of state immunity as the property sought to be recovered in the instant suit had not yet been lawfully adjudged forfeited in favor of the government. Moreover, according to respondent appellate court, there could be no pecuniary liability nor loss of property that could ensue against the government. It reasoned that a suit against a public officer who acted illegally or beyond the scope of his authority could not be considered a suit against the State; and that a public officer might be sued for illegally seizing or withholding the possession of the property of another. 16 Respondent court brushed aside other grounds raised by petitioners based on the claim that the subject vehicles were validly seized and held in custody because they were contradicted by its own findings. 17 Their petition was found without merit. 18 Now, before us, the petitioners assign the following errors: 19 (1) THE COURT OF APPEALS ERRED IN HOLDING THAT MERE SEIZURE OF A CONVEYANCE PURSUANT TO SECTION 68-A [78-A] OF P.D. NO. 705 AS AMENDED BY EXECUTIVE ORDER 277 DOES NOT PLACE SAID CONVEYANCE IN CUSTODIA LEGIS; (2) THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE OPERATIVE ACT GIVING RISE FOR THE SUBJECT CONVEYANCE TO BE IN CUSTODIA LEGIS IS ITS LAWFUL SEIZURE BY THE DENR PURSUANT TO SECTION 68-A [78-A] OF P.D. NO. 705, AS AMENDED BY E.O. NO. 277; AND (3) THE COURT OF APPEALS ERRED IN HOLDING THAT THE COMPLAINT FOR REPLEVIN AGAINST THE PETITIONERS IS NOT A SUIT AGAINST THE STATE. In brief, the pertinent issues for our consideration are: (1) Whether or not the DENR-seized motor vehicle, with plate number FCN 143, is in custodia legis. (2) Whether or not the complaint for the recovery of possession of impounded vehicles, with an application for replevin, is a suit against the State. We will now resolve both issues. The Revised Forestry Code authorizes the DENR to seize all conveyances used in the commission of an offense in violation of Section 78. Section 78 states: Sec. 78. Cutting, Gathering, and/or Collecting Timber, or Other Forest Products without License. Any person who shall cut, gather, collect, remove timber or other forest products from any forestland, or timber from alienable or disposable public land, or from private land, without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code. . .

The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found. This provision makes mere possession of timber or other forest products without the accompanying legal documents unlawful and punishable with the penalties imposed for the crime of theft, as prescribed in Articles 309-310 of the Revised Penal Code. In the present case, the subject vehicles were loaded with forest products at the time of the seizure. But admittedly no permit evidencing authority to possess and transport said load of forest products was duly presented. These products, in turn, were deemed illegally sourced. Thus there was a prima facie violation of Section 68 [78] of the Revised Forestry Code, although as found by the trial court, the persons responsible for said violation were not the ones charged by the public prosecutor. The corresponding authority of the DENR to seize all conveyances used in the commission of an offense in violation of Section 78 of the Revised Forestry Code is pursuant to Sections 78-A and 89 of the same Code. They read as follows: Sec. 78-A. Administrative Authority of the Department Head or His Duly Authorized Representative to Order Confiscation. In all cases of violation of this Code or other forest laws, rules and regulations, the Department Head or his duly authorized representative, may order the confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned, and all conveyances used either by land, water or air in the commission of the offense and to dispose of the same in accordance with pertinent laws, regulations or policies on the matter. Sec. 89. Arrest; Institution of criminal actions. A forest officer or employee of the Bureau [Department] or any personnel of the Philippine Constabulary/Philippine National Police shall arrest even without warrant any person who has committed or is committing in his presence any of the offenses defined in this Chapter. He shall also seize and confiscate, in favor of the Government, the tools and equipment used in committing the offense. . . [Emphasis supplied.] Note that DENR Administrative Order No. 59, series of 1990, implements Sections 78-A and 89 of the Forestry Code, as follows: Sec. 2. Conveyances Subject to Confiscation and Forfeiture. All conveyances used in the transport of any forest product obtained or gathered illegally whether or not covered with transport documents, found spurious or irregular in accordance with Sec. 68-A [78-A] of P.D. No. 705, shall be confiscated in favor of the government or disposed of in accordance with pertinent laws, regulations or policies on the matter. Sec. 4. Who are Authorized to Seize Conveyance. The Secretary or his duly authorized representative such as the forest officers and/or natural resources officers, or deputized officers of the DENR areauthorized to seize said conveyances subject to policies and guidelines pertinent thereto. Deputized military personnel and officials of other agencies apprehending illegal logs and other forest products and their conveyances shall notify the nearest DENR field offices, and turn oversaid forest products and conveyances for proper action and disposition. In case where the apprehension is made by DENR field officer, the conveyance shall be deposited with the nearest CENRO/PENRO/RED Office as the case may be, for safekeeping wherever it is most convenient and secured. [Emphasis supplied.]

Upon apprehension of the illegally-cut timber while being transported without pertinent documents that could evidence title to or right to possession of said timber, a warrantless seizure of the involved vehicles and their load was allowed under Section 78 and 89 of the Revised Forestry Code. Note further that petitioners' failure to observe the procedure outlined in DENR Administrative Order No. 59, series of 1990 was justifiably explained. Petitioners did not submit a report of the seizure to the Secretary nor give a written notice to the owner of the vehicle because on the 3rd day following the seizure, Gabon and Abuganda, drivers of the seized vehicles, forcibly took the impounded vehicles from the custody of the DENR. Then again, when one of the motor vehicles was apprehended and impounded for the second time, the petitioners, again were not able to report the seizure to the DENR Secretary nor give a written notice to the owner of the vehicle because private respondents immediately went to court and applied for a writ of replevin. The seizure of the vehicles and their load was done upon their apprehension for a violation of the Revised Forestry Code. It would be absurd to require a confiscation order or notice and hearing before said seizure could be effected under the circumstances. Since there was a violation of the Revised Forestry Code and the seizure was in accordance with law, in our view the subject vehicles were validly deemed in custodia legis. It could not be subject to an action for replevin. For it is property lawfully taken by virtue of legal process and considered in the custody of the law, and not otherwise. 20 In Mamanteo, et. al. v. Deputy Sheriff Magumun, A.M. No. P-98-1264, promulgated on July 28, 1999, the case involves property to be seized by a Deputy Sheriff in a replevin suit. But said property were already impounded by the DENR due to violation of forestry laws and, in fact, already forfeited in favor of the government by order of the DENR. We said that such property was deemed in custodia legis. The sheriff could not insist on seizing the property already subject of a prior warrant of seizure. The appropriate action should be for the sheriff to inform the trial court of the situation by way of partial Sheriff's Return, and wait for the judge's instructions on the proper procedure to be observed. Note that property that is validly deposited in custodia legis cannot be the subject of a replevin suit. In Mamanteo v. Deputy Sheriff Magumun, we elucidated further: . . . the writ of replevin has been repeatedly used by unscrupulous plaintiffs to retrieve their chattel earlier taken for violation of the Tariff and Customs Code, tax assessment, attachment or execution. Officers of the court, from the presiding judge to the sheriff, are implored to be vigilant in their execution of the law otherwise, as in this case, valid seizure and forfeiture proceedings could easily be undermined by the simple devise of a writ of replevin. . . 21 On the second issue, is the complaint for the recovery of possession of the two impounded vehicles, with an application for replevin, a suit against the State? Well established is the doctrine that the State may not be sued without its consent. 22 And a suit against a public officer for his official acts is, in effect, a suit against the State if its purpose is to hold the State ultimately liable. 23However, the protection afforded to public officers by this doctrine generally applies only to activities within the scope of their authority in good faith and without willfulness, malice or corruption. 24 In the present case, the acts for which the petitioners are being called to account were performed by them in the discharge of their official duties. The acts in question are clearly official in nature. 25 In implementing and enforcing Sections 78-A and 89 of the Forestry Code through the seizure carried out, petitioners were performing their duties and functions as officers of the DENR, and did so within the limits of their authority. There was no malice nor bad

faith on their part. Hence, a suit against the petitioners who represent the DENR is a suit against the State. It cannot prosper without the State's consent. Given the circumstances in this case, we need not pursue the Office of the Solicitor General's line for the defense of petitioners concerning exhaustion of administrative remedies. We ought only to recall that exhaustion must be raised at the earliest time possible, even before filing the answer to the complaint or pleading asserting a claim, by a motion to dismiss. 26 If not invoked at the proper time, this ground for dismissal could be deemed waived and the court could take cognizance of the case and try it. 27 ACCORDINGLY, the Petition is GRANTED, and the assailed Decision of the Court of Appeals in CA-G.R. SP No. 29191 is SET ASIDE. Consequently, the Order issued by the Regional Trial Court of Catbalogan, dated May 27, 1992, and the Writ of replevin issued in the Order dated April 24, 1992, are ANNULLED. The Sheriff of the Regional Trial Court of Catbalogan, Branch 29, is directed to take possession of the subject motor vehicle, with plate number FCN 143, for delivery to the custody of and appropriate disposition by petitioners. Let a copy of this decision be provided the Honorable Secretary of Justice for his appropriate action, against any and all persons responsible for the abovecited violation of the Revised Forestry Code.
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Costs against private respondents. SO ORDERED.

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Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.

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G.R. No. 93540 December 13, 1999 FULGENCIO S. FACTORAN, JR., Secretary, Department of Environment and Natural Resources, VICENTE A. ROBLES and NESTOR GAPUZAN, petitioners, vs. COURT OF APPEALS (Third Division), Hon. BENIGNO T. DAYAW, as, Judge, Regional Trial Court of Quezon City, Branch 80, JESUS SY and LILY FRANCISCO UY, respondents.

DE LEON, JR., J.: Before us is a petition for review on certiorari of the Decision and Resolution of the Court of Appeals dated March 30, 1990 and May 18, 1990, respectively, dismissing petitioners' charge that Honorable Benigno T. Dayaw, Presiding Judge of Branch 80 of the Regional Trial Court (RTC) of Quezon City, committed grave abuse of discretion in ordering them to deliver to private respondents the sixwheeler truck and its cargo, some 4,000 board feet of narra lumber which were confiscated by the Department of Environment and Natural Resources (DENR) and forfeited in favor of the government. 1 The antecedent facts: On August 9, 1988, two (2) police officers of the Marikina Police Station, Sub-Station III, intercepted a six-wheeler truck, with Plate No. NJT-881, carrying 4,000 board feet of narra lumber as it was

cruising along the Marcos Highway. They apprehended the truck driver, private respondent Jesus Sy, and brought the truck and its cargo to the Personnel Investigation Committee/Special Actions and Investigation Division (PIC/SAID) of the DENR Office in Quezon City. There, petitioner Atty. Vecente Robies of the PIC/SAID investigated them, and discovered the following discrepancies in the documentaion of the narra lumber: 2 a. What were declared in the documents (Certificate of Timber Origin, Auxiliary Invoices and various Certifications) were narra flitches, while the cargo of the truck consisted of narra lumber; b. As appearing in the documents, the Plate Numbers of the truck supposed to carry the forest products bear the numbers BAX-404, PEC-492 OR NSN-267, while the Plate Number of the truck apprehended is NVT-881; c. Considering that the cargo is lumber, the transport should have been accompanied by a Certificate of Lumber Origin, scale sheet of said lumber and not by a Certificate of Timber Origin, which merely covers only transport of logs and flitches;
d. The log Sale Purchase Agreement presented is between DSM Golden Cup International as the seller and Bonamy Enterprises as the buyer/consignee and not with Lily Francisco Lumber and Hardware. 3

which are in violation of Bureau of Forestry Development (BFD) Circular No. 10. The said BFD Circular requires possession or transportation of lumber to be supported by the following documents: (1) Certificate of Lumber Origin (CLO) which shall be issued only be the District Forester, or in his absence, the Assistant District Forester; (2) Sales Invoice; (3) Delivery Receipt; and (4) Tally Sheets. 4 Such omission is punishable under Sec. 68 of Presidential Decree (P.D.) No. 705 otherwise known as the Revised Forestry Code. 5 Thus, petitioner Atty. Robles issued a temporary seizure order and seizure receipt for the narra lumber and the six-wheeler truck. 6 On January 20, 1989, petitioner Fulgencio S. Factoran, then Secretary of Environment and Natural Resources (hereinafter referred to as petitioner Secretary) issued an order for the confiscation of the narra lumber and the six- wheeler truck. 7 Private respondents neither asked for reconsideration of nor appealed, the said order to the Office of the President. Consequently, the confiscated narra lumber and six-wheeler truck were forfeited in favor of the government. They were subsequently advertised to be sold at public auction on March 20, 1989. 8 On March 17, 1989, private respondents filed a complaint with prayer for the issuance of writs of replevin and preliminary injunction and/or temporary restraining order for the recovery of the confiscated lumber and six-wheeler truck, and to enjoin the planned auction sale of the subject narra lumber, respectively. 9 Said complaint was docketed as Civil Case No. Q-89-2045 and raffled to Branch 80 of the RTC of Quezon City. On the same day, the trial court issued an Order directing petitioners to desist from proceeding with the planned auction sale and setting the hearing for the issuance of the writ of preliminary injunction on March 27, 1989. 10 On March 20, 1989, the scheduled date of the auction sale, private respondents filed an ExParte Motion for Release and Return of Goods and Documents (Replevin) supported by an Affidavit for Issuance of Writ of Replevin and Preliminary Injunction and a Replevin Bond in the amount of

P180,000.00. 11 The trial court granted the writ of replevin on the same day and directed the petitioners "to deliver the . . . [n]arra lumber, original documents and truck with plate no. NJT 881 to the custody of the plaintiffs and/or their representative . . . . 12 On March 22, 1989, the trial court issued a writ of seizure. However, petitioners refused to comply therewith. 13David G. Brodett, Sheriff of Branch 80 of the RTC of Quezon City (hereinafter referred to as the Sheriff) reported that petitioners prevented him from removing the subject properties from the DENR Compound and transferring them to the Mobil Unit Compound of the Quezon City Police Force. To avoid any unwarranted confrontation between them, he just agreed to a constructive possession of the properties in question. 14 In the afternoon of the same day, petitioners filed a Manifestation stating their intention to file a counterbond under Rule 60 of the Rules of Court to stay the execution of the writ of seizure and to post a cash bond in the amount of P180,000.00. But the trial court did not oblige petitioners for they failed to serve a copy of the Manifestation on private respondents. Petitioners then immediately made the required service and tendered the cash counterbond in the amount of P180,000.00, but it was refused, petitioners' Manifestation having already been set for hearing on March 30, 1989. 15 On March 27, 1989, petitioners made another attempt to post a counterbond which was, however, denied for the same reason. 16 On the same day, private respondents filed a motion to declare petitioners in contempt for disobeying the writ of seizure. 17 The trial court gave petitioners twenty-four (24) hours to answer the motion. Hearing thereon was scheduled on March 30, 1989. However, on March 29, 1989, petitioners filed with the Court of Appeals a Petition for Certiorari, Prohibition and/or Mandamus to annul the Orders of the trial court dated March 20, 1989 and March 27, 1989. 18 On March 30, 1989, the Court of Appeals granted petitioners temporary relief in the form of a temporary restraining order (TRO). On September 11, 1989, the Court of Appeals converted the TRO into a writ of preliminary injunction upon filing by petitioners of a bond in the amount of P180,000.00. 19 However, on March 30, 1990, the Court of Appeals lifted the writ of preliminary injunction and dismissed the petition. It declared that as the complaint for replevin filed by private respondents complied with the requirements of an affidavit and bond under Secs. 1 and 2 of Rule 60 of the Revised Rules of court, issuance of the writ of replevin was mandatory. 20 As for the contempt charges against petitioners, the Court of Appeals believed the same were sufficiently based on a written charge by private respondents and the report submitted by the Sheriff. 21 On April 25, 1990, petitioners filed a motion for reconsideration of the foregoing decision. However, that motion was denied by the Court of Appeals in its Resolution dated May 18, 1990. 22 Hence this petition. On the one hand, petitioners contend, thus:

(1) Confiscated lumber cannot be subject of replevin. 23 (2) Petitioners not compelled to criminally prosecute private respondents but may opt only to confiscate lumber. 24 (3) Private respondent charged criminally in court.
25

and

(4) Writ of Replevin issued in contravention of PD #605. 26

On the other hand, private respondents argue that:


(1) The respondent Judge had jurisdiction to take cognizance of the complaint for recovery of personal property and, therefore, had jurisdiction to issue the necessary orders in connection therewith. 27 (2) The issuance of the order for the delivery of personal property upon application, affidavit and filing of replevin bond by the plaintiff is mandatory and not discretionary, hence, no abuse of discretion can be committed by the trial court in the issuance thereof. 28 (3) The Order of March 20, 1989 was in accordance with Section 4, Rule 60 of the Rules of Court and is, therefore, valid. 29 (4) The private respondents have not been proven to have violated Section 68 of the Revised Forestry Code. 30 (5) The petitioners do not have the authority to keep private respondents' property for an indefinite period, more so, to dispose of the same without notice and hearing or without due process. 31 (6) Contrary to the allegation of petitioners, no formal investigation was conducted by the PIC with respect to the subject lumber in this case. 32 (7) The alleged Order dated January 20, 1989 of the petitioner Secretary Fulgencio Factoran, Jr. of the DENR is not valid and does not make the issuance of the order of replevin illegal. 33 and (8) The subject properties were not in custody of the law and may be replevied. 34

At the outset we observe that herein respondents never appealed the confiscation order of petitioner Secretary to the Office of the President as provided for in Sec. 8 of P.D. No. 705 which reads: All actions and decisions of the Director are subject to review, motu propio or upon appeal of any person aggrieved thereby, by the Department Head whose decision shall be final and executory after the lapse of thirty (30) days from receipt by the aggrieved party of said decision unless appealed to the President . . . . The decision of the Department Head may not be reviewed by the courts except through a special civil action for certiorari and prohibition.

The doctrine of exhaustion of administrative remedies is basic. Courts, for reasons of law, comity and convenience, should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given an appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative forum. 35 As to the application of this doctrine in cases involving violations of P.D. No. 705, our ruling in Paat v. Court of Appeals, is apropos: Moreover, it is important to point out that the enforcement of forestry laws, rules and regulations and the protection, development and management of forest lands fall within the primary and special responsibilities of the Department of Environment and Natural Resources. By the very nature of its function, the DENR should be given a free hand unperturbed by judicial intrusion to determine a controversy which is well within its jurisdiction. The assumption by the trial court, therefore, of the replevin suit filed by the private respondents constitutes an encroachment into the domain of the administrative agency's prerogative. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary, which was reiterated in the recent case of Concerned Officials of MWSS vs. Vasquez, this Court held:
Thus, while the administration grapples with the complex and multifarious problems caused by unbridled exploitation of these resources, the judiciary will stand clear. A long line of cases establish the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies. 36

However, petitioners did not file a motion to dismiss based on the ground of non-exhaustion of administrative remedies. Thus, it is deemed waived. 37 Nonetheless, the petition is impressed with merit. First. A writ of replevin does not just issue as a matter of course upon the applicant's filing of a bond and affidavit, as the Court of Appeals has wrongly put it. The mere filing of an affidavit, sans allegations therein that satisfy the requirements of Sec. 2, Rule 60 of the Revised Rules of Court, cannot justify the issuance of a writ of replevin. Said provision reads: Affidavit and bond. Upon applying for such order the plaintiff must show by his own affidavit or that of some other person who personally knows the facts: (a) That the plaintiff is the owner of the property claimed, particularly describing it, or entitled to the possession thereof; (b) That the property is wrongfully detained by the defendant, alleging the cause of detention thereof to his best knowledge, information, and belief; (c) That it has not been taken for a tax assessment or fine pursuant to law, or seized under an execution, or an attachment against the property of the plaintiff, or, if so seized, that it is exempt from such seizure; and

(d) The actual value of the property. xxx xxx xxx Wrongful detention by the defendant of the properties sought in an action for replevin must be satisfactorily established. If only a mechanistic averment thereof is offered, the writ should not be issued. In the case at bar, the subject narra lumber and six-wheeler truck were confiscated by petitioner Secretary pursuant to Section 68-A of P.D. No. 705, as amended by Executive Order (E.O.) No. 277, to wit:
Sec. 68-A. Administrative Authority of the Department Head or His Duly Authorized Representative to Order Confiscation. In all cases of violations of this Code or other forest laws, rules and regulations, the Department Head or his duly authorized representative, may order the confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned, and all conveyances used either by land, water,or air in the commission of the offense and to dispose of the same in accordance with pertinent laws, regulations or policies on the matter. 38

As the petitioner Secretary's administrative authority to confiscate is clearly provided by law, the taking of the subject properties is not wrongful and does not warrant the issuance of a writ of replevin prayed for by private respondents. Second. Issuance of the confiscation order by petitioner Secretary was a valid exercise of his power under Sec. 68-A of P.D. No. 705. By virtue of said order, the narra lumber and six-wheeler truck of private respondents were held in custodia legis and hence, beyond the reach of replevin. Property lawfully taken by virtue of legal process is deemed to be in custodia legis. 39 When a thing is in official custody of a judicial or executive officer in pursuance of his execution of a legal writ, replevin will not lie to recover it. 40 Otherwise, there would be interference with the possession before the function of law had been performed as to the process under which the property was taken. 41 So basic is this doctrine that it found inclusion in the 1997 amendments introduced to the Rules of Civil Procedure. Thus, Sec. 2(c), Rule 60 of the 1997 Rules of Civil Procedure provides that: Affidavit and bond. Upon applying for such order the plaintiff must show by his own affidavit or that of some other person who personally knows the facts: xxx xxx xxx (c) That the property has not been distrained or taken for a tax assessment or fine pursuant to law, or seized under a writ of execution, or preliminary attachment or otherwise placed under custodia legis, or if so seized, that it is exempt from such seizure or custody; . . .
xxx xxx xxx. 42

Third. Petitioner Secretary's authority to confiscate forest products under Sec. 68-A of P.D. No. 705 is distinct from and independent of the confiscation of forest products in a criminal action provided for in Section 68 of P.D. No. 705. Thus, in Paat, we held that:

. . . precisely because of the need to make forestry laws "more responsive to present situations and realities" and in view of the "urgency to conserve the remaining resources of the country," that the government opted to add Section 68-A. This amendatory provision is an administrative remedy totally separate and distinct from criminal proceedings. . . . . The preamble of EO 277 that added Section 68-A to PD 705- is most revealing: WHEREAS, there is an urgency to conserve the remaining forest resources of the country for the benefit and welfare of the present and future generations of Filipinos; WHEREAS, our forest resources may be effectively conserved and protected through the vigilant enforcement and implementation of our forestry laws, rules and regulations; WHEREAS, the implementation of our forestry laws suffers from technical difficulties, due to certain inadequacies in the Penal provisions of the Revised Forestry Code of the Philippines; and WHEREAS, to overcome this [sic] difficulties, there is a need to penalize certain acts more responsive to present situations and realities;
It is interesting to note that Section 68-A is a new provision authorizing the DENR to confiscate, not only "conveyances" but forest products as well. On the other hand, confiscation of forest products by the "court" in a criminal action has long been provided for in Section 68. If as private respondents insist, the power of confiscation cannot be exercised except only through the court under Section 68, then Section 68-A would have no purpose at all. Simply put, Section 68-A would not have provided any solution to the problem perceived in EO 277, . . . . 43

Sec. 68-A was added precisely to supplant the inadequacies and supplement criminal enforcement of forestry laws. Fourth. Sec. 80 of P.D. No. 705 which requires delivery of the seized forest products within six (6) hours from the time of the seizure to the appropriate official designated by law to conduct preliminary investigations applies only to criminal prosecutions provided for in Sec. 68, and not to administrative confiscation provided for in Section 68-A. Sec. 80 of P.D. No. 705 provides: Sec. 80. Arrest; Institution of criminal actions. A forest officer or employee of the Bureau shall arrest even without a warrant any person who has committed or is committing in his presence any of the offenses defined in this Chapter. He shall also seize and confiscate, in favor of the Government, the tools and equipment used in committing the offense, and the forest products cut, gathered or taken by the offender in the process of committing the offense. The arresting officer or employee shall thereafter deliver within six (6) hours from the time of arrest and seizure, the offender and the confiscated forest products, tools and equipment to, and file the proper complaint with, the appropriate official designated by law to conduct preliminary investigations and file informations in court.

xxx xxx xxx The title of Sec. 80 "Arrest; Institution of Criminal Actions" bespeaks this intendment of the law. The fact, too, that Secs. 68 and 80 were co-existing prior to the introduction of Sec. 68-A, proves that Sec. 80 applies to the criminal prosecutions subject of Sec. 68 and not to the administrative confiscation subject of Sec. 68-A. Sec. 68-A, therefore, should not be interpreted in relation to Sec. 80 as to require that criminal charges be filed with and seized forest products be immediately delivered to, the fiscal in case of administrative confiscation, for this renders nugatory the purpose sought to be achieved thereby. Statutes should always be construed in the light of the object to be achieved and the evil or mischief to be suppressed, and they should be given such interpretation as will advance the object, suppress the mischief, and secure the benefits intended. 44 Fifth. Nothing in the records supports private respondents' allegation that their right to due process was violated as no investigation was conducted prior to the confiscation of their properties. On the contrary, by private respondents' own admission, private respondent Sy who drove the sixwheeler truck was properly investigated by petitioner Atty. Robles at the PIC/SAID Office of the DENR. Thereafter, private respondent Sy and his witnesses were given full opportunity to explain the deficiencies in the documents. 45Private respondents categorically stated that they made a "continuous and almost daily follow-up and plea . . . with the PIC for the return of the truck and lumber . . . ." 46 Finally in a letter dated December 30, 1989, private respondent Lily Francisco Uy requested petitioner Secretary for "immediate resolution and release of the impounded narra sawn lumber." 47 Undoubtedly, private respondents were afforded an opportunity to be heard before the order of confiscation was issued. There was no formal or trial type hearing but the same is not, in all instances, essential in administrative proceedings. It is settled that due process is satisfied when the parties are afforded fair and reasonable opportunity to explain their side of the controversy or an opportunity to move for a reconsideration of the action or ruling complained of. 48 Moreover, respondents claim that the order of confiscation was antedated and not the product of the investigation supposedly conducted by the PIC of the DENR. However, they proffer no proof to support that allegation. On the other hand, there is the legal presumption that official duty has been regularly performed. The presumption of regularity in the performance of official duties is even particularly strong with respect to administrative agencies like the DENR which are vested with quasi-judicial powers in enforcing the laws affecting their respective fields of activity, the proper regulation of which requires of them such technical mastery of all relevant conditions obtaining in the nation. 49 Finally. The writ of seizure and the writ of replevin were issued by the trial court in grave abuse of its discretion. Thus, disobedience thereto cannot constitute indirect contempt of court which presupposes that the court order thereby violated was valid and legal. Without a lawful order having been issued, no contempt of court could be committed. 50 WHEREFORE, the instant petition is hereby GRANTED. The Decision of the Court of Appeals dated March 30, 1990 and its Resolution dated May 18, 1990 in CA-G.R. SP No. 17194 are hereby SET ASIDE and REVERSED. Respondent Presiding Judge Benigno T. Dayaw, of the Regional Trial Court of Quezon City, is PERMANENTLY ENJOINED from enforcing the Orders dated March 20, 1989 and March 22, 1989 in Civil Case No. Q-89-2045, or if said orders have already been enforced, the said respondent Judge is directed to render judgment of forfeiture on the replevin bond filed by

private respondents. Finally, the said respondent Judge is PERMANENTLY ENJOINED from further acting on the Motion for Contempt filed by private respondents against the petitioners. Costs against private respondents. SO ORDERED. Bellosillo, Mendoza, Quisumbing and Buena, JJ., concur. Footnotes 1 Petitioners' Memorandum, p. 1; Rollo, p. 276. 2 Petition, pp. 4-5; Rollo, pp. 9-10. 3 Annex "A" of Petition; Rollo, p. 35. 2 Petition, pp. 4-5; Rollo, pp. 9-10. 3 Annex "A" of Petition; Rollo, p. 35. 4 See note 2, supra, p. 16; Rollo, p. 21. 5 Sec. 68. Cutting, Gathering and/or collecting Timber or Other Forest Products Without License. Any person who shall cut, gather, collect, remove timber and other forest products from any forest land, or timber from alienable or disposable public land, or from private land, without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Article 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships, associations, or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable, and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation. The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found. 6 Annex "1" of Comment, Rollo, p. 165. 7 See note 3, supra. 8 See note 1, supra, pp. 5-6; Rollo, pp. 280-281. 9 Annex "4" of Comment; Rollo, pp. 170-171. 10 Annex "5" of Comment; Rollo, 179-180. 11 Annex "M" of Petition, p. 3; Rollo, p. 105.

12 Annex "7-A" of Comment; Rollo, p. 191. 13 See note 11, supra, p. 4; Rollo, p. 106. 14 Annex "9-B" of Comment, pp. 2-3; Rollo, pp. 195-196. 15 Annex "I" of the Petition, pp. 7-8; Rollo, pp. 57-58. 16 Annex "12" of Comment; Rollo, p. 199. 17 Private Respondents' Memorandum, pp. 11-12; Rollo, pp. 312-313. 18 Id., p. 12, Rollo, p. 313. 19 See note 11, supra, pp. 4-5; Rollo, pp. 106-107. 20 Id., pp. 5-7, Rollo, pp. 107-109. 21 Id., pp. 7-9; Rollo, pp. 109-111. 22 See note 2, supra, pp. 22, 25; Rollo, pp. 27, 30. 23 See note 1, supra, p. 10; Rollo, p. 285. 24 Id., p. 15; Rollo, p. 290. 25 Id., p. 17; Rollo, p. 292. 26 Id., p. 18; Rollo, p. 293. 27 See note 17, supra, pp. 13-14; Rollo, pp. 314-315. 28 Id., pp. 14-15; Rollo, pp. 315-316. 29 Id., p. 18; Rollo, p. 319. 30 Id., p. 19; Rollo, p. 320. 31 Id., p. 22; Rollo, p. 323. 32 Id., p. 24; Rollo, p. 325. 33 Id., p. 25; Rollo, p. 326. 34 Id., p. 29; Rollo, p. 330. 35 University of the Philippines et al. vs. Hon. Elpidio M. Catungal, Jr. etc., et al., 272 SCRA 221, 240 (1997); Hon. Bartolome Carale vs. Hon. Pampio A. Abarintos, et al., 269 SCRA 132, 141 (1997).

36 Paat vs. Court of Appeals, 266 SCRA 167, 181 (1997); Soledad Dy vs. Court of Appeals, et al., G.R. No. 121587, March 9, 1999. 37 Soto vs. Jareno, 144 SCRA 116, 119 (1986); C.N. Hodges vs. Municipal Board of Iloilo, 19 SCRA 28, 34 (1967). 38 Emphasis provided. 39 Chua vs. Court of Appeals, 222 SCRA 85, 89 (1993); Bagalihog vs. Fernandez, 198 SCRA 614; 621 (1991); Auyong Hian vs. Court of Tax Appeals, 59 SCRA 110, 134 (1974). 40 Chua vs. Court of Appeals, supra. 41 Ibid. 42 Emphasis provided. 43 Paat vs. Court of Appeals, supra, pp. 181-182. 44 Ibid. 45 Annex "I" of Petition, pp. 5-6; Rollo, pp. 72-73. 46 Id., p. 6; Rollo, p. 73. 47 Annex "3" of Comment; Rollo, p. 167. 48 Paat vs. Court of Appeals, supra, p. 179, Navarro vs. Damasco, 246 SCRA 260, 265 (1995); Stayfast Philippines Corp. vs. NLRC, 218 SCRA 596, 601 (1993). 49 Beautifont, Inc. vs. Court of Appeals, et al., 157 SCRA 481, 493 (1988). 50 Francisco, The Revised Rules of Court in the Philippines, Annotated and Commented, Vol. IV-B, Part II (1973), p. 305; Angel Jose Realty Corporation vs. Galao, 76 Phil. 201, 204205 (1946); Weigall vs. Shuster, 11 Phil. 340, 345 (1908); Chanco vs. Madrilejos, 9 Phil. 356, 361 (1908).

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SYLLABI/SYNOPSIS

SECOND DIVISION

[A.M. No. P-98-1264. July 28, 1999]

BASILIO P. MAMANTEO, FLORENTINO B. TRINIDAD, BONIFACIO MANGANIP and EDGAR S. SALLIDAO,complainants, vs. DEPUTY SHERIFF MANUEL M. MAGUMUN,[1] respondent. DECISION
BELLOSILLO, J.:

What should the sheriff do when he is informed by the defendant in a replevin that the property to be seized is in custodia legis and in fact already forfeited in favor of the government by order of another government agency? This question assumes importance in light of the charges of grave misconduct filed by complainants Basilio P. Mamanteo, Provincial Environment and Natural Resources (PENR) Officer; Florentino B. Trinidad, Community Environment and Natural Resources (CENR) Officer; and Bonifacio Manganip and Edgar S. Sallidao, both DENR forestry employees stationed in Tabuk, Kalinga, against Deputy Sheriff Manuel M. Magumun of the Regional Trial Court, Br. 4, Tuguegarao, Cagayan. On 12 April 1996 forestry employees of the DENR, Cordillera Administrative Region, Tabuk, Kalinga, tasked with the enforcement of forestry laws, intercepted a San Miguel Corporation van with Plate No. PJC-321 loaded with narra flitches wrapped in nylon sacks and covered with empty beer bottles and cartons. Confronted by the forestry employees, Villamor Martinez, driver of the van, could not produce any legal permit authorizing him to transport the narra lumber. Hence, after issuing seizure receipts, the vehicle and its load of narra flitches were confiscated by the DENR forestry employees. On 24 May 1996 a criminal complaint against driver Villamor Martinez was filed before the Provincial Prosecutors Office of Tabuk, Kalinga, for violation of Sec. 78 of P.D. 705 [2] as amended, and implemented by DENR Administrative Order 59.[3] On 24 July 1996, after due notice and opportunity to be heard, an order of forfeiture of the vehicle and its load was issued by the DENR Regional Office pursuant to its quasi-judicial authority to administratively order the confiscation and forfeiture of lumber possessed without permit including its conveyance. Thereafter, San Miguel Corporation, the owner of the vehicle, through its agent Aimardo V. Interior, filed a case for recovery of personal property and damages with application for writ of replevin with the Regional Trial Court, Br. 4, Tuguegarao, Cagayan, against herein complainants. The trial court issued a warrant of seizure of personal property directing its sheriff to take hold of the van and its contents. On 1 August 1996 Deputy Sheriff Manuel M. Magumun, escorted by Sheriff Jacinto Contapay of RTC-Br. 1, Tabuk, Kalinga, and agents of the Philippine National Police, went to the office of the DENR in Tabuk, Kalinga, to enforce the warrant issued by the trial court but the forestry employees and officials refused to release the van on the ground that it had already been forfeited in favor of the government and was now in custodia legis. Despite this explanation, on 7 August 1996, Deputy Sheriff Magumun accompanied this time by Sheriff John Dongui-is Jr. of the Office of the Clerk of Court of Tabuk, Kalinga, and twenty (20) other persons, took the van without permission of the employees and officials of the DENR. On 13 August 1996, after the

lapse of the five-day period prescribed by law for filing an opposition to the writ, the vehicle was delivered to Aimardo V. Interior, agent of SMC. In his comment, Deputy Sheriff Magumun explained that it was his ministerial duty to execute the warrant in accordance with its mandate and his duties as sheriff under the Rules of Court and the Manual for Clerks of Court.[4] He conceded that he was informed by the forestry employees and officials of the forfeiture of the vehicle subject of the warrant of seizure but he reasoned that it was not within his discretion to withhold the implementation of the warrant.[5] The execution of a warrant of seizure on a vehicle allegedly forfeited in favor of the government was a question of law too technical for him to resolve[6] and faced with such a dilemma he opted to follow the order of the court and execute the warrant in accordance with its mandate. On 20 October 1997 the complaint was referred to the Office of the Court Administrator (OCA) for evaluation, report and recommendation. The OCA observed that Deputy Sheriff Magumun made a very literal interpretation of Sec. 4, Rule 60, of the Rules of Court as amended.[7] The OCA noted that while Rule 60 was silent on what should be done when the sheriff is informed by the defendant in the replevin that the personal property to be seized has been forfeited in favor of the government and is already in custodia legis, Deputy Sheriff Magumun should not have insisted on seizing the property subject of the warrant of seizure.[8] The appropriate action should have been for respondent to inform his judge of the situation by way of partial Sheriffs Return and wait for instructions on the proper procedure to be observed.[9] For such ignorance of proper procedure the OCA recommended that Sheriff Magumun be penalized in the amount of P5,000.00 at the very least.[10] We agree. Respondent was placed in a difficult situation where the vehicle subject of the warrant of seizure had already been confiscated by another government agency and forfeited in favor of the government. However, the novelty of his predicament did not call for him to use his discretion and justify his insistence on taking the property subject of the warrant without waiting for instructions from his judge. A sheriffs prerogative does not give him the liberty to determine who among the parties is entitled to the possession of the attached property,[11] much less does he have any discretion to decide which agency has primary jurisdiction and authority over the matter at hand. When a writ is placed in the hands of a sheriff, it is his duty, in the absence of any instructions to the contrary, to proceed with reasonable celerity and promptness to execute it according to its mandate.[12] However, the prompt implementation of a warrant of seizure is called for only in instances where there is no question regarding the right of the plaintiff to the property. Where the plaintiff has shown by his own affidavit that he is entitled to the possession of the property; that the property is wrongfully detained by the defendant; that the same has not been taken for tax assessment or seized under execution or attachment, or if so seized, that it is exempt from such seizure,[13] then the executing officer has no other recourse but to execute the warrant or writ expeditiously. In the instant case, Deputy Sheriff Magumun has been informed that the property had been impounded due to violation of forestry laws and an order for its forfeiture had already been issued by the DENR. Moreover, he was advised that the proper remedy for SMC, owner of the vehicle, was to appeal the order of forfeiture to the Secretary of the DENR. [14] The prudent recourse then for respondent was to desist from executing the warrant and convey the

information to his judge and to the plaintiff. Instead, Deputy Sheriff Magumun carried out the implementation of the warrant of seizure with undue haste as evidenced by the mere 6-day lapse from the time he first served the warrant of seizure on the DENR officials to the time of his precipitate seizure of the van. A warrant could be returned within a period of not less than ten (10) days nor more than sixty (60) days after its receipt by the executing officer.[15] Within this time frame, Deputy Sheriff Magumun should have conferred with his judge and thereafter execute the warrant judiciously and with more certainty. True, sheriffs must comply with their mandated ministerial duty to implement writs promptly and expeditiously, but equally true is the principle that sheriffs by the nature of their functions must at all times conduct themselves with propriety and decorum and act above suspicion.[16] There must be no room for anyone to conjecture that sheriffs and deputy sheriffs as officers of the court have conspired with any of the parties to a case to obtain a favorable judgment or immediate execution. The sheriff is the front line representative of the judiciary and by his act he may build or destroy the institution. As observed by the OCA, the writ of replevin has been repeatedly used by unscrupulous plaintiffs to retrieve their chattel earlier taken for violation of the Tariff and Customs Code,[17] tax assessment, attachment or execution. Officers of the court, from the presiding judge to the sheriff, are implored to be vigilant in their execution of the law otherwise, as in this case, valid seizure and forfeiture proceedings could easily be undermined by the simple devise of a writ of replevin. Hence, sheriffs and deputy sheriffs, as agents of the law, are called upon to discharge their duties with due care and utmost diligence because in serving the courts writs and processes and implementing the orders of the court, they cannot afford to err without affecting the integrity of their office and the efficient administration of justice.[18] WHEREFORE, respondent Deputy Sheriff Manuel M. Magumun is found guilty of grave misconduct and, as recommended, is fined P5,000.00 for arbitrarily implementing the warrant of seizure of personal property and for ignorance of the proper procedure in serving writs of replevin in cases where the personal property to be recovered has already been seized and forfeited in favor of the government for violation of forestry laws. Respondent is warned that a repetition of the same or similar act will merit a more severe sanction. SO ORDERED. Puno, Mendoza, Quisumbing, and Buena, JJ., concur.

[1]

Respondent Deputy Sheriff Manuel M. Magumun was referred to as Deputy Sheriff M. Magiimun in the affidavit-complaints submitted by complainants, although in his answer to the complaint as well as in his Sheriff 's Report he gave his family name as "Magumun."
[2]

Sec. 78. Cutting, gathering and/or collecting timber or other products without license. - Any person who shall cut, gather, collect, or remove timber or other forest products from any forest land, or timber from alienable and disposable public land, or from private land, without any authority or possess timber or other forest products without the legal documents required under existing laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code; Provided, That in the case of partnerships, associations or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable, and if such

officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation. The court shall further order the confiscation in favor of the government of the timber or forest products cut, gathered, collected, removed, or possessed as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found. (Revised Forestry Code, P.D.705 as amended by P.D.1559, and by E.O. No. 277, promulgated 25 July 1987, 83 OG No. 31, 3 August 1987).
[3] [4] [5] [6] [7]

Guidelines for the Confiscation, Forfeiture and Disposition of Conveyance used in the commission of offenses. Rollo, p. 21. Id., p. 22. Ibid.

Sec. 4. Duty of the sheriff. Upon receiving such order, the sheriff must serve a copy thereof on the adverse party, together with a copy of the application, affidavit and bond, and must forthwith take the property, if it be in the possession of the adverse party, or his agent, and retain it in his custody. If the property or any part thereof be concealed in a building or enclosure, the sheriff must demand its delivery, and if it be not delivered, he must cause the building or enclosure to be broken open and take the property into his possession. After the sheriff has taken possession of the property as herein provided, he must keep it in a secure place and shall be responsible for its delivery to the party entitled thereto upon receiving his fees and necessary expenses for taking and keeping the same.
[8] [9] [10] [11] [12] [13] [14] [15] [16]

Rollo, p. 36. Id., p. 39. Ibid. NBI v. Tuliao, A.M. No. P-96-1184, 24 March 1997, 270 SCRA 351. See Note 7; Balantes v. Buena, A.M. No. P-94-1013, 14 March 1995, 242 SCRA 327. Paat v. CA, G.R. No. 111107, 10 January 1997, 266 SCRA 167. Rollo, p. 5. Chua v. Gonzales, A.M. No. P-94-1060, 17 December 1996, 265 SCRA 662.

Vda. de Tisado v. Tablizo, A.M. No. P-94-1025, 20 February 1996, 253 SCRA 646; Flores v. Caniya, A.M. No. P-95-1133, 256 SCRA 518; Lepanto Consolidated Mining Co. v. Melgar, A.M. No. P-92-725, 30 April 1996, 256 SCRA 600.
[17] [18]

Pacis v. Hon. Averia, No. L-22526, 29 November 1966, 18 SCRA 907. Bernasal Jr. v. Montes, A.M. No. P-97-1250, 6 October 1997, 280 SCRA 181.

SECOND DIVISION

[G.R. No. 111107. January 10, 1997]

LEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC), Regional Executive Director (RED), Region 2 and JOVITO LAYUGAN, JR., in his capacity as Community Environment and Natural Resources Officer (CENRO), both of the Department of Environment and Natural Resources (DENR), petitioners, vs. COURT OF APPEALS, HON. RICARDO A. BACULI in his capacity as Presiding Judge of Branch 2, Regional Trial Court at Tuguegarao, Cagayan, and SPOUSES BIENVENIDO and VICTORIA DE GUZMAN, respondents. DECISION
TORRES, JR., J.:

Without violating the principle of exhaustion of administrative remedies, may an action for replevin prosper to recover a movable property which is the subject matter of an administrative forfeiture proceeding in the Department of Environment and Natural Resources pursuant to Section 68-A of P. D. 705, as amended, entitled The Revised Forestry Code of the Philippines? Are the Secretary of DENR and his representatives empowered to confiscate and forfeit conveyances used in transporting illegal forest products in favor of the government? These are two fundamental questions presented before us for our resolution. The controversy on hand had its incipiency on May 19, 1989 when the truck of private respondent Victoria de Guzman while on its way to Bulacan from San Jose, Baggao, Cagayan, was seized by the Department of

Environment and Natural Resources (DENR, for brevity) personnel in Aritao, Nueva Vizcaya because the driver could not produce the required documents for the forest products found concealed in the truck. Petitioner Jovito Layugan, the Community Environment and Natural Resources Officer (CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order of confiscation of the truck and gave the owner thereof fifteen (15) days within which to submit an explanation why the truck should not be forfeited. Private respondents, however, failed to submit the required explanation. On June 22, 1989, Regional Executive Director Rogelio Baggayan of DENR sustained petitioner Layugans action of confiscation and ordered the forfeiture of the truck invoking Section 68-A of Presidential Decree No. 705 as amended by Executive Order No. 277. Private respondents filed a letter of reconsideration dated June 28, 1989 of the June 22, 1989 order of Executive Director Baggayan, which was, however, denied in a subsequent order of July 12, 1989. Subsequently, the case was brought by the petitioners to the Secretary of DENR pursuant to private respondents statement in their letter dated June 28, 1989 that in case their letter for reconsideration would be denied then this letter should be considered as an appeal to the Secretary. Pending resolution however of the appeal, a suit for replevin, docketed as Civil Case 4031, was filed by the private respondents against petitioner Layugan and Executive Director Baggayan with the Regional Trial Court, Branch 2 of Cagayan, which issued a writ ordering the return of the truck to private respondents. Petitioner Layugan and Executive Director Baggayan filed a motion to dismiss with the trial court contending, inter alia, that private respondents had no cause of action for their failure to exhaust administrative remedies. The trial court denied the motion to dismiss in an order dated December 28, 1989. Their motion for reconsideration having been likewise denied, a petition forcertiorari was filed by the petitioners with the respondent Court of Appeals which sustained the trial courts order ruling that the question involved is purely a legal question. Hence, this present petition, with prayer for temporary restraining order and/or preliminary injunction, seeking to reverse the decision of the respondent Court of Appeals was filed by the petitioners on September 9, 1993. By virtue of the Resolution dated September 27, 1993, the prayer for the issuance of temporary restraining order of petitioners was granted by this Court.
[1] [2] [3] [4] [5] [6] [7] [8] [9] [10]

Invoking the doctrine of exhaustion of administrative remedies, petitioners aver that the trial court could not legally entertain the suit for replevin because the truck was under administrative seizure proceedings pursuant to Section 68-A of P.D. 705, as amended by E.O. 277. Private respondents, on the other hand, would seek to avoid the operation of this principle asserting that the instant case falls within the exception of the doctrine upon the justification that

(1) due process was violated because they were not given the chance to be heard, and (2) the seizure and forfeiture was unlawful on the grounds: (a) that the Secretary of DENR and his representatives have no authority to confiscate and forfeit conveyances utilized in transporting illegal forest products, and (b) that the truck as admitted by petitioners was not used in the commission of the crime. Upon a thorough and delicate scrutiny of the records and relevant jurisprudence on the matter, we are of the opinion that the plea of petitioners for reversal is in order. This Court in a long line of cases has consistently held that before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy should be exhausted first before courts judicial power can be sought. The premature invocation of courts intervention is fatal to ones cause of action. Accordingly, absent any finding of waiver or estoppel the case is susceptible of dismissal for lack of cause of action. This doctrine of exhaustion of administrative remedies was not without its practical and legal reasons, for one thing, availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies. It is no less true to state that the courts of justice for reasons of comity and convenience will shy away from a dispute until the system of administrative redress has been completed and complied with so as to give the administrative agency concerned every opportunity to correct its error and to dispose of the case. However, we are not amiss to reiterate that the principle of exhaustion of administrative remedies as tested by a battery of cases is not an ironclad rule. This doctrine is a relative one and its flexibility is called upon by the peculiarity and uniqueness of the factual and circumstantial settings of a case. Hence, it is disregarded (1) when there is a violation of due process, (2) when the issue involved is purely a legal question, (3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction, (4) when there is estoppel on the part of the administrative agency concerned, (5) when there is irreparable injury, (6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter, (7) when to require exhaustion of administrative remedies would be unreasonable, (8) when it would amount to a nullification of a claim, (9) when the subject matter is a private land in land case proceedings, (10) when the rule does
[11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21]

not provide a plain, speedy and adequate remedy, and (11) when there are circumstances indicating the urgency of judicial intervention.
[22]

In the case at bar, there is no question that the controversy was pending before the Secretary of DENR when it was forwarded to him following the denial by the petitioners of the motion for reconsideration of private respondents through the order of July 12, 1989. In their letter of reconsideration dated June 28, 1989, private respondents clearly recognize the presence of an administrative forum to which they seek to avail, as they did avail, in the resolution of their case. The letter, reads, thus:
[23]

xxx If this motion for reconsideration does not merit your favorable action, then this letter should be considered as an appeal to the Secretary.
[24]

It was easy to perceive then that the private respondents looked up to the Secretary for the review and disposition of their case. By appealing to him, they acknowledged the existence of an adequate and plain remedy still available and open to them in the ordinary course of the law. Thus, they cannot now, without violating the principle of exhaustion of administrative remedies, seek courts intervention by filing an action for replevin for the grant of their relief during the pendency of an administrative proceedings. Moreover, it is important to point out that the enforcement of forestry laws, rules and regulations and the protection, development and management of forest lands fall within the primary and special responsibilities of the Department of Environment and Natural Resources. By the very nature of its function, the DENR should be given a free hand unperturbed by judicial intrusion to determine a controversy which is well within its jurisdiction. The assumption by the trial court, therefore, of the replevin suit filed by private respondents constitutes an unjustified encroachment into the domain of the administrative agencys prerogative. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with an administrative body of special competence. In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary, which was reiterated in the recent case of Concerned Officials of MWSS vs. Vasquez, this Court held:
[25] [26] [27]

Thus, while the administration grapples with the complex and multifarious problems caused by unbriddled exploitation of these resources, the judiciary will stand clear. A long line of cases establish the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the

regulation of activities coming under the special technical knowledge and training of such agencies. To sustain the claim of private respondents would in effect bring the instant controversy beyond the pale of the principle of exhaustion of administrative remedies and fall within the ambit of excepted cases heretofore stated. However, considering the circumstances prevailing in this case, we can not but rule out these assertions of private respondents to be without merit. First, they argued that there was violation of due process because they did not receive the May 23, 1989 order of confiscation of petitioner Layugan. This contention has no leg to stand on. Due process does not necessarily mean or require a hearing, but simply an opportunity or right to be heard. One may be heard , not solely by verbal presentation but also, and perhaps many times more creditably and practicable than oral argument, through pleadings. In administrative proceedings moreover, technical rules of procedure and evidence are not strictly applied; administrative process cannot be fully equated with due process in its strict judicial sense. Indeed, deprivation of due process cannot be successfully invoked where a party was given the chance to be heard on his motion for reconsideration, as in the instant case, when private respondents were undisputedly given the opportunity to present their side when they filed a letter of reconsideration dated June 28, 1989 which was, however, denied in an order of July 12, 1989 of Executive Director Baggayan. In Navarro III vs. Damasco, we ruled that :
[28] [29] [30] [31] [32]

The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial type hearing is not at all times and in all instances essential. The requirements are satisfied when the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is the absolute lack of notice or hearing. Second, private respondents imputed the patent illegality of seizure and forfeiture of the truck because the administrative officers of the DENR allegedly have no power to perform these acts under the law. They insisted that only the court is authorized to confiscate and forfeit conveyances used in transporting illegal forest products as can be gleaned from the second paragraph of Section 68 of P.D. 705, as amended by E.O. 277. The pertinent provision reads as follows: SECTION 68. xxx

xxx The court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipments, implements and tools illegaly [sic] used in the area where the timber or forest products are found. (Underline ours) A reading, however, of the law persuades us not to go along with private respondents thinking not only because the aforequoted provision apparently does not mention nor include conveyances that can be the subject of confiscation by the courts, but to a large extent, due to the fact that private respondents interpretation of the subject provision unduly restricts the clear intention of the law and inevitably reduces the other provision of Section 68A , which is quoted herein below: SECTION 68-A. Administrative Authority of the Department or His Duly Authorized Representative To Order Confiscation. In all cases of violation of this Code or other forest laws, rules and regulations, the Department Head or his duly authorized representative, may order the confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned, and all conveyances used either by land, water or air in the commission of the offense and to dispose of the same in accordance with pertinent laws, regulations and policies on the matter. (Underline ours) It is, thus, clear from the foregoing provision that the Secretary and his duly authorized representatives are given the authority to confiscate and forfeit any conveyances utilized in violating the Code or other forest laws, rules and regulations. The phrase to dispose of the same is broad enough to cover the act of forfeiting conveyances in favor of the government. The only limitation is that it should be made in accordance with pertinent laws, regulations or policies on the matter. In the construction of statutes, it must be read in such a way as to give effect to the purpose projected in the statute. Statutes should be construed in the light of the object to be achieved and the evil or mischief to be suppressed, and they should be given such construction as will advance the object, suppress the mischief, and secure the benefits intended. In this wise, the observation of the Solicitor General is significant, thus:
[33] [34]

But precisely because of the need to make forestry laws more responsive to present situations and realities and in view of the urgency to conserve the remaining resources of the country, that the government opted to add Section 68-A. This amendatory provision is an administrative remedy totally separate and distinct from

criminal proceedings. More than anything else, it is intended to supplant the inadequacies that characterize enforcement of forestry laws through criminal actions. The preamble of EO 277-the law that added Section 68-A to PD 705-is most revealing: WHEREAS, there is an urgency to conserve the remaining forest resources of the country for the benefit and welfare of the present and future generations of Filipinos; WHEREAS, our forest resources may be effectively conserved and protected through the vigilant enforcement and implementation of our forestry laws, rules and regulations; WHEREAS, the implementation of our forestry laws suffers from technical difficulties, due to certain inadequacies in the penal provisions of the Revised Forestry Code of the Philippines; and WHEREAS, to overcome this difficulties, there is a need to penalize certain acts more responsive to present situations and realities; It is interesting to note that Section 68-A is a new provision authorizing the DENR to confiscate, not only conveyances, but forest products as well. On the other hand, confiscation of forest products by the court in a criminal action has long been provided for in Section 68. If as private respondents insist, the power on confiscation cannot be exercised except only through the court under Section 68, then Section 68A would have no purpose at all. Simply put, Section 68-A would not have provided any solution to the problem perceived in EO 277, supra.
[35]

Private respondents, likewise, contend that the seizure was illegal because the petitioners themselves admitted in the Order dated July 12, 1989 of Executive Director Baggayan that the truck of private respondents was not used in the commission of the crime. This order, a copy of which was given to and received by the counsel of private respondents, reads in part , viz. : xxx while it is true that the truck of your client was not used by her in the commission of the crime, we uphold your claim that the truck owner is not liable for the crime and in no case could a criminal case be filed against her as provided under Article 309 and 310 of the Revised Penal Code. xxx
[36]

We observed that private respondents misread the content of the aforestated order and obviously misinterpreted the intention of petitioners. What is contemplated by the petitioners when they stated that the truck "was not used in the commission of the crime" is that it was not used in the

commission of the crime of theft, hence, in no case can a criminal action be filed against the owner thereof for violation of Article 309 and 310 of the Revised Penal Code. Petitioners did not eliminate the possibility that the truck was being used in the commission of another crime, that is, the breach of Section 68 of P.D.705 as amended by E.O. 277. In the same order of July 12, 1989, petitioners pointed out: xxx However, under Section 68 of P.D.705 as amended and further amended by Executive Order No.277 specifically provides for the confiscation of the conveyance used in the transport of forest products not covered by the required legal documents. She may not have been involved in the cutting and gathering of the product in question but the fact that she accepted the goods for a fee or fare the same is therefor liable. xxx
[37]

Private respondents, however, contended that there is no crime defined and punishable under Section 68 other than qualified theft, so that, when petitioners admitted in the July 12, 1989 order that private respondents could not be charged for theft as provided for under Articles 309 and 310 of the Revised Penal Code, then necessarily private respondents could not have committed an act constituting a crime under Section 68. We disagree. For clarity, the provision of Section 68 of P.D. 705 before its amendment by E.O. 277 and the provision of Section 1 of E.O. No.277 amending the aforementioned Section 68 are reproduced herein, thus: SECTION 68. Cutting, gathering and/or collecting timber or other products without license. - Any person who shall cut , gather , collect , or remove timber or other forest products from any forest land, or timber from alienable and disposable public lands, or from private lands, without any authority under a license agreement, lease, license or permit, shall be guilty of qualified theft as defined and punished under Articles 309 and 310 of the Revised Penal Code xxx.(Underscoring ours; Section 68, P.D.705 before its amendment by E.O.277 ) SECTION 1. Section 68 of Presidential Decree No.705, as amended, is hereby amended to read as follows: Section 68. Cutting, gathering and/or collecting timber or other forest products without license. -Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land, without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310

of the Revised Penal Code xxx." (Underscoring ours; Section 1, E.O No. 277 amending Section 68, P.D. 705 as amended) With the introduction of Executive Order No. 277 amending Section 68 of P.D. 705, the act of cutting, gathering, collecting, removing, or possessing forest products without authority constitutes a distinct offense independent now from the crime of theft under Articles 309 and 310 of the Revised Penal Code, but the penalty to be imposed is that provided for under Article 309 and 310 of the Revised Penal Code. This is clear from the language of Executive Order No. 277 when it eliminated the phrase shall be guilty of qualified theft as defined and punished under Articles 309 and 310 of the Revised Penal Code and inserted the words shall be punished with the penalties imposed under Article 309 and 310 of the Revised Penal Code . When the statute is clear and explicit, there is hardly room for any extended court ratiocination or rationalization of the law.
[38]

From the foregoing disquisition, it is clear that a suit for replevin can not be sustained against the petitioners for the subject truck taken and retained by them for administrative forfeiture proceedings in pursuant to Section 68-A of the P. D. 705, as amended. Dismissal of the replevin suit for lack of cause of action in view of the private respondents failure to exhaust administrative remedies should have been the proper course of action by the lower court instead of assuming jurisdiction over the case and consequently issuing the writ ordering the return of the truck. Exhaustion of the remedies in the administrative forum, being a condition precedent prior to ones recourse to the courts and more importantly, being an element of private respondents right of action, is too significant to be waylaid by the lower court. It is worth stressing at this point, that a suit for replevin is founded solely on the claim that the defendant wrongfully withholds the property sought to be recovered. It lies to recover possession of personal chattels that are unlawfully detained. To detain is defined as to mean to hold or keep in custody, and it has been held that there is tortuous taking whenever there is an unlawful meddling with the property, or an exercise or claim of dominion over it, without any pretense of authority or right; this, without manual seizing of the property is sufficient. Under the Rules of Court, it is indispensable in replevin proceedings, that the plaintiff must show by his own affidavit that he is entitled to the possession of property, that the property is wrongfully detained by the defendant, alleging the cause of detention, that the same has not been taken for tax assessment, or seized under execution, or attachment, or if so seized, that it is exempt from such seizure, and the actual value of the property. Private respondents miserably failed to convince this Court that a
[39] [40] [41] [42]

wrongful detention of the subject truck obtains in the instant case. It should be noted that the truck was seized by the petitioners because it was transporting forest products with out the required permit of the DENR in manifest contravention of Section 68 of P.D. 705 as amended by E.O 277. Section 68-A of P.D. 705, as amended, unquestionably warrants the confiscation as well as the disposition by the Secretary of DENR or his duly authorized representatives of the conveyances used in violating the provision of forestry laws. Evidently, the continued possession or detention of the truck by the petitioners for administrative forfeiture proceeding is legally permissible, hence , no wrongful detention exists in the case at bar. Moreover, the suit for replevin is never intended as a procedural tool to question the orders of confiscation and forfeiture issued by the DENR in pursuance to the authority given under P.D.705, as amended. Section 8 of the said law is explicit that actions taken by the Director of the Bureau of Forest Development concerning the enforcement of the provisions of the said law are subject to review by the Secretary of DENR and that courts may not review the decisions of the Secretary except through a special civil action for certiorari or prohibition. It reads : SECTION 8 . REVIEW - All actions and decisions of the Director are subject to review, motu propio or upon appeal of any person aggrieved thereby, by the Department Head whose decision shall be final and executory after the lapse of thirty (30) days from the receipt of the aggrieved party of said decision, unless appealed to the President in accordance with Executive Order No. 19, Series of 1966. The Decision of the Department Head may not be reviewed by the courts except through a special civil action for certiorari or prohibition. WHEREFORE, the Petition is GRANTED; the Decision of the respondent Court of Appeals dated October 16, 1991

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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 162243 November 29, 2006

HON. HEHERSON ALVAREZ substituted by HON. ELISEA G. GOZUN, in her capacity as Secretary of the Department of Environment and Natural Resources, Petitioner, vs. PICOP RESOURCES, INC., Respondent. x - - - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 164516 November 29, 2006

PICOP RESOURCES, INC., Petitioner, vs. HON. HEHERSON ALVAREZ substituted by HON. ELISEA G. GOZUN, in her capacity as Secretary of the Department of Environment and Natural Resources Respondent. x-----------------------x

G.R. No. 171875

November 29, 2006

THE HON. ANGELO T. REYES (formerly Hon. Elisea G. Gozun), in his capacity as Secretary of the Department of Environment and Natural Resources (DENR), Petitioner, vs. PAPER INDUSTRIES CORP. OF THE PHILIPPINES (PICOP), Respondent. DECISION CHICO-NAZARIO, J.: On the line are three consolidated Petitions, all arising from the 11 October 2002 Quezon City Regional Trial Court (RTC) Decision1 granting the Petition for Mandamus filed by Paper Industries Corporation of the Philippines (PICOP). The Court of Appeals affirmed the 11 October 2002 RTC Decision, with modification, in a 19 February 2004 Decision.2 In G.R. No. 162243, then Department of Environment and Natural Resources (DENR) Secretary Heherson T. Alvarez, who was later successively substituted by subsequent DENR Secretaries Elisea G. Gozun and Angelo T. Reyes, assails the 19 February 2004 Decision insofar as it granted the Petition for Mandamus. In G.R. No. 164516, PICOP assails the same Decision insofar as it deleted the imposition of damages against then Secretary Alvarez. Secretary Reyes filed a third Petition docketed as G.R. No. 171875, assailing the 16 December 2004 Amended Decision3 of the Court of Appeals lifting the Writ of Preliminary Injunction that enjoined the enforcement of the 11 October 2002 Decision and 10 February 2003 Orders of the RTC. FACTS The facts, culled from the records of the three consolidated petitions, are as follows: On 24 May 1952, PICOPs predecessor, Bislig Bay Lumber Co., Inc. (BBLCI) was granted Timber License Agreement (TLA) No. 43.4 The TLA was amended on 26 April 1953 and 4 March 1959. As amended, TLA No. 43 covers an area of 75,545 hectares in Surigao del Sur, Agusan del Sur, Compostela Valley, and Davao Oriental. Allegedly sometime in 1969, the late President Ferdinand E. Marcos issued a presidential warranty to BBLCI, confirming that TLA No. 43 "definitely establishes the boundary lines of [BBLCIs] concession area."5 TLA No. 43, as amended, expired on 26 April 1977. It was renewed on 7 October 1977 for another 25 years to "terminate on April 25, 2002."6 On 23 December 1999, then DENR Secretary Antonio H. Cerilles promulgated DENR Administrative Order (DAO) No. 99-53 which had for its subject, the "Regulations Governing the Integrated Forest Management Program (IFMP)."7 In a 28 August 2000 letter to the Community Environment and Natural Resources Office (CENRO), DENR-Region XIII-D4, Bislig, Surigao del Sur, PICOP signified its intention to convert its TLA No. 43 into an Integrated Forest Management Agreement (IFMA) invoking the provisions of Section 9, Chapter III of DAO No. 99-53.8 Acting on the said letter, Forester III Trifino M. Peregrino, In-Charge, Office of the CENRO, wrote a letter dated 1 September 2000 to PICOPs resident manager in Tabon, Bislig, Surigao del Sur, informing PICOP "that we will consider said letter as an advance notice considering that it is yet premature to act on your request since we are yet in CY 2000."9 In a 24 January 2001 letter, Neolito Frondozo, Group Manager, Forest Operations Manager of PICOP, requested for a favorable indorsement of their letter of intent from the CENRO of the DENR, Region XIII-D4 in Bislig City. This was followed up by another letter dated 25 January 2001 of Wilfredo D. Fuentes, Vice President and Resident Manager of PICOP, to the Regional Executive Director (RED), DENR, Caraga Region XIII in Ambago, Butuan City, likewise, requesting for a favorable indorsement of their

letter of intent to the DENR Secretary.10 The Officer-In-Charge (OIC), Regional Executive Director Constantino A. Paye, Jr., in a 6 March 2001 Memorandum, forwarded PICOPs letter of intent dated 28 August 2000 to the DENR Secretary informing the latter that the DENR Caraga Region XIII in Ambago, Butuan City, had created a team tasked to conduct a performance evaluation on PICOP on the said TLA pursuant to DAO No. 99-53.11 Subsequently, Elias R. Seraspi, Jr., RED, DENR, Caraga Region XIII in Ambago, Butuan City, submitted a 31 July 2001 Memorandum to the DENR Secretary on the performance evaluation of PICOP on its TLA No. 43. Paragraph 11 of the same Memorandum reads: Hence, it is imperative to chart a good forest policy direction for the management, development and protection of TLA No. 43 after it expires on April 26, 2002 for the purpose of sustainable forest management of the area in support of national development. With this vision, the proper evaluation to consider the request for automatic conversion of TLA No. 43 to IFMA pursuant to Section 9, DENR A.O. No. 99-53, upon its expiration on April 26, 2002 is hereby recommended.12 Attached to said Memorandum, inter alia, were the 11 July 2001 Report and 27 July 2001 Supplemental Report of the Performance Evaluation Team created to conduct such performance evaluation indicating violations by PICOP of existing DENR Rules and Regulations governing TLA No. 43, such as the non-submission of its five-year forest protection plan and seven-year reforestation plan as required by the DENR rules and regulations. The said 31 July 2001 Memorandum was forwarded to the Forest Management Bureau (FMB) for appropriate action and recommendation.13 Sometime in September 2001, the DENR Secretary was furnished a copy of Forest Management Specialist II (FMS II) Teofila L. Orlanes 24 September 2001 Memorandum concerning alleged unpaid and overdue forest charges of respondent on TLA No. 43. Attached thereto was a 19 September 2001 Memorandum of Amelia D. Arayan, Bill Collector of the DENR R13-14, Bislig City, likewise indicating purported unpaid and overdue forest charges by PICOP on its TLA No. 43.14 Said Memorandum was referred to FMB Director Romeo T. Acosta, who directed FMB Senior Forest Management Specialist (SFMS) Ignacio Evangelista to proceed to Region 13 to gather forestry-related data and validate the report contained in the respective Memoranda of Orlanes and Arayan.15 SFMS Evangelista found that the 8 May 2001 to 7 July 2001 forest charges adverted to in the Orlanes and Arayan Memoranda was belatedly filed. He also found that PICOP had not paid its regular forest charges covering the period of 22 September 2001 to 26 April 2002 in the total amount of P15,056,054.05.16 Moreso, he discovered that from 1996 to 30 August 2002, PICOP was late in paying some of its forest charges in 1996, and was consistently late in paying all its forestry charges from 1997 onwards.17 The overdue and unpaid forest charges (including penalties, interests and surcharges) of PICOP totalP150,169,485.02. Its silvicultural fees amount to P2,366,901.00 from 1996 up to 30 August 2002. In all, PICOP has an outstanding and overdue total obligation on its forest charges in the amount of P167,592,440.90 as of 30 August 2002.18 Thus, FMB Director Acosta submitted a 5 October 2001 Memorandum to the DENR Secretary concerning PICOPs application for conversion of its TLA No. 43 into an IFMA, viz: RECOMMENDATION The conversion of the TLA into IFMA is primarily aimed at sustaining the raw materials for the continuous operation of the integrated wood processing plant of the company. However, the very complex issues presented cannot just be ignored and have to be fully addressed to before further appropriate action is taken on the application for conversion. In the absence of categorical comments and recommendation of the regional office to resolve the issue, it is recommended that a transition team composed of the following be created: x x x.19 In lieu of a transition team, the DENR Secretary constituted a negotiating team by virtue of Special Order No. 2001-698 dated 23

October 2001 composed of Undersecretary Ramon J.P. Paje as chairman, with the following as members: Undersecretary Gregorio V. Cabantac and FMB Assistant Director Neria A. Andin. The team was authorized to negotiate for such terms and conditions as are advantageous to the Government.20 The DENR Secretary sent a 25 October 2001 letter to PICOP, through its president, requesting him to designate its representative/s to discuss with the DENR negotiating team "the conditions and details of the said IFMA including the production sharing arrangement between PICOP and the government."21 Since PICOP failed to send a representative, and considering that TLA No. 43 was about to expire, DENR Undersecretary Paje called for a meeting on 21 March 2002. It was only then, or almost five months from the receipt of the 25 October 2001 letter from the DENR Secretary, that PICOP sent its representatives to the DENR.22 On 9 April 2002, the DENR Negotiating Team issued Resolution No. 1, series of 2002, creating a Technical Working Committee (TWC) to provide technical assistance to the negotiating team composed of representatives from both DENR and PICOP.23 On 10 April 2002, the members of the TWC met and discussed the findings of the Performance Evaluation Team that PICOP has neither submitted its Five-Year Forest Protection Plan nor presented its Seven-Year Reforestation Plan, both being required by DENR rules and regulations. In the same meeting, PICOP agreed to secure and submit a clearance from the National Commission on Indigenous Peoples (NCIP) as required by Section 59 of the Indigenous Peoples Rights Act (IPRA).24 On 15 April 2002, another TWC meeting was conducted, wherein the proposed validation of PICOPs overall performance "as part of the evaluation process for the conversion of the TLA into an IFMA" was discussed with PICOP representatives being given copies of the performance evaluation of PICOP on its TLA No. 43.25 PICOPs representatives were subsequently requested to prepare a map showing by categories the area planted with trees in compliance with PICOPs reforestation requirements.26 In the next TWC meeting on 19 April 2002, PICOPs representatives were asked of their compliance with their agreement during the 10 April 2002 meeting that they should have submitted a list of stockholders on 15 April 2002. The PICOP representatives did not submit such list and instead inquired on the TWCs interpretation of the 25 October 2001 letter of the DENR Secretary to PICOP, which provides in full, thus: 25 October 2001 MR. TEODORO G. BERNARDINO President PICOP Resources Incorporated 2nd Flr, Moredel Building 2280 Pasong Tamo Extension Makati City Dear Mr. Bernardino: Consistent with our attached Memorandum to Her Excellency, the President, dated 17 October 2001 and in response to your Letter of Intent dated 25 February 2001, we wish to inform you that, pursuant to DENR Administrative Order No. 99-53, we have cleared the conversion of PICOPs Timber License Agreement (TLA) No. 43 to Integrated Forest Management Agreement (IFMA) effective from the expiration of said TLA on April 26, 2002. In this regard, you are hereby requested to designate PICOPs representative(s) to discuss with the DENR Team, created under

Special Order No. 2001-638, the conditions and details of the said IFMA, including the production sharing agreement between PICOP and the government. For your information and guidance. Very truly yours, (sgd) HEHERSON T. ALVAREZ Secretary27 It was the position of the DENR members of the TWC that PICOPs application for the IFMA conversion should undergo the process as provided in DAO No. 99-53. PICOP representative Atty. Caingat, however, claimed that "the TLA has been converted" and suggested the suspension of the meeting as they would submit a written position on the matter the following day.28 On 22 April 2002, the TWC members of the DENR received a letter from PICOP dated 18 April 2002 insisting that "the conversion of TLA No. 43 into IFMA has already been completed" and indicated that they had "no choice except to decline participation in the ongoing meeting and bring our issues to the proper public and legal forum."29 On 24 April 2002, the TWC submitted a Memorandum dated 22 April 2002 to the Undersecretary for Operations and Undersecretary for Legal, Lands and International Affairs of the DENR, enumerating the salient points taken up during the TWC meetings. This includes the performance evaluation report of the DENR Regional Office covering the period from 24 June 1999 to 23 June 2000. The report states that PICOP has not submitted its 5-Year Forest Protection Plan and 7-Year Reforestation Plan; that it has unpaid and overdue forest charges; and its failure to secure a clearance from the Regional Office of the NCIP considering the presence of Indigenous Peoples (IPs) in the area and Certificate of Ancestral Domain Claims issued within the area. The DENR Secretary instructed the RED, Caraga Region, to coordinate with PICOP and reiterate the requirements for conversion of TLA No. 43 into IFMA. Thereafter, the FMB Director received a letter dated 6 August 2002 from NCIP Chairperson Atty. Evelyn S. Dunuan informing him that, based on their records, no certification has been issued to PICOP concerning its application for conversion of its TLA No. 43 into IFMA, "as there has never been an application or endorsement of such application to our office."30 On 12 August 2002, a meeting was held at the Office of the President of the Philippines presided by Undersecretary Jose Tale and Undersecretary Jake Lagonera of the Office of the Executive Secretary. PICOPs representatives committed to submit the following, to wit: 1. Certificate of Filing of Amended Articles of Incorporation issued on 12 August 2002 that extended PICOPs corporate term for another fifty (50) years; 2. Proof of Payment of forest charges; 3. Proof of Payment of Reforestation Deposit; 4. Response to social issues, particularly clearance from the NCIP; and 5. Map showing reforestation activities on an annual basis.31 PICOP submitted its purported compliance with aforesaid undertaking through a letter dated 21 August 2002 to the DENR

Secretary. Upon evaluation of the documents submitted by PICOP, the TWC noted that: a) PICOP did not submit the required NCIP clearance; b) The proof of payments for forest charges covers only the production period from 1 July 2001 to 21 September 2001; c) The proof of payment of reforestation deposits covers only the period from the first quarter of CY 1999 to the second quarter of CY 2001; d) The map of the areas planted through supplemental planting and social forestry is not sufficient compliance per Performance Evaluation Teams 11 July 2001 report on PICOPs performance on its TLA No. 43, pursuant to Section 6.6 of DAO 79-87; and e) PICOP failed to respond completely to all the social issues raised.32 Accordingly, the Secretary of DENR claims that further processing of PICOPs application for the conversion of TLA No. 43 cannot proceed until PICOP complies with the requirements. Insisting that the conversion of its TLA No. 43 had been completed, PICOP filed a Petition for Mandamus against then DENR Secretary Heherson T. Alvarez before the RTC of Quezon City, which was raffled to Branch 220, presided by Hon. Jose G. Paneda. The petition was docketed as Civil Case No. Q-02-47764 (hereinafter referred to as the MANDAMUS CASE). On 11 October 2002, the RTC rendered a Decision granting PICOPs Petition for Mandamus, thus: WHEREFORE, premises considered, the Petition for Mandamus is hereby GRANTED. The Respondent DENR Secretary Hon. Heherson Alvarez is hereby ordered: 1. to sign, execute and deliver the IFMA contract and/or documents to PICOP and issue the corresponding IFMA assignment number on the area covered by the IFMA, formerly TLA No. 43, as amended; 2. to issue the necessary permit allowing petitioner to act and harvest timber from the said area of TLA No. 43, sufficient to meet the raw material requirements of petitioners pulp and paper mills in accordance with the warranty and agreement of July 29, 1969 between the government and PICOPs predecessor-in-interest; and 3. to honor and respect the Government Warranties and contractual obligations to PICOP strictly in accordance with the warranty and agreement dated July 29, 1999 (sic) between the government and PICOPs predecessorin-interest (Exhibits "H", "H-1" to "H-5", particularly the following: a) the area coverage of TLA No. 43, which forms part and parcel of the government warranties; b) PICOP tenure over the said area of TLA No. 43 and exclusive right to cut, collect and remove sawtimber and pulpwood for the period ending on April 26, 1977; and said period to be renewable for [an]other 25 years subject to compliance with constitutional and statutory requirements as well as with existing policy on timber concessions; and c) The peaceful and adequate enjoyment by PICOP of the area as described and specified in the aforesaid amended Timber License Agreement No. 43.

The Respondent Secretary Alvarez is likewise ordered to pay petitioner the sum of P10 million a month beginning May 2002 until the conversion of TLA No. 43, as amended, to IFMA is formally effected and the harvesting from the said area is granted.33 On 25 October 2002, the DENR Secretary filed a Motion for Reconsideration.34 PICOP filed an Urgent Motion for Issuance of Writ of Mandamus and/or Writ of Mandatory Injunction.35 On 12 November 2002, then DENR Secretary Alvarez filed a Motion to Inhibit Hon. Jose G. Paneda from further trying the case, attaching to said motion an administrative complaint against the latter which was filed by the former before the Office of the Court Administrator.36 The Motion was denied in an Order dated 10 December 2002. On 19 December 2002, PICOP filed a Manifestation and Motion to Implead Hon. Elisea Gozun as respondent,37which was granted. Elisea Gozun was, thus, substituted as respondent in her official capacity as the new DENR Secretary.38 On 6 November 2002, then NCIP Chairperson Atty. Evelyn S. Dunuan sent a letter to the DENR (1) informing the DENR Secretary that after validation by the NCIP, it was found out that the area of 47,420 hectares covered by PICOPs TLA No. 43 conflicts with the ancestral domains of the Manobos; and (2) reiterating the information that no NCIP certification was sought by PICOP to certify that the area covered by TLA No. 43, subject of its IFMA conversion, does not overlap with any ancestral domain. Accordingly, she "strongly urge[d] the revocation of the one-year permit granted to PICOP until the full provisions of [the] IPRA are followed and the rights of our Indigenous Peoples over their ancestral land claims are respected."39 On 25 November 2002, President Gloria Macapagal-Arroyo issued Proclamation No. 297, "EXCLUDING A CERTAIN AREA FROM THE OPERATION OF PROCLAMATION NO. 369 DATED FEBRUARY 27, 1931, AND DECLARING THE SAME AS MINERAL RESERVATION AND AS ENVIRONMENTALLY CRITICAL AREA." The excluded area consists of 8,100 hectares, more or less, which formed part of PICOPs expired TLA No. 43, subject of its application for IFMA conversion.40 On 21 January 2003, PICOP filed a Petition for the Declaration of Nullity of the aforesaid presidential proclamation as well as its implementing DENR Administrative Order No. 2002-35 (DAO No. 2002-35) which was raffled to Branch 78 of the RTC in Quezon City. The Petition was docketed as Special Civil Action No. Q-03-48648 (hereinafter referred to as the NULLITY CASE). In said NULLITY CASE, the RTC issued a Temporary Restraining Order (TRO) enjoining respondents therein41from implementing the questioned issuances. The DENR Secretary and her co-respondents in said case filed on 6 February 2003 an Omnibus Motion (1) To Dissolve the Temporary Restraining Order dated 3 February 2003; and (2) To Dismiss (With Opposition to the Issuance of a Writ of Preliminary Injunction).42 The trial court issued a Resolution dated 19 February 2003 granting the Motion to Dismiss on the ground that the Petition does not state a cause of action.43 PICOP filed a Motion for Reconsideration as well as a Motion to Inhibit. On 24 March 2003, the presiding judge of Branch 78 inhibited himself from hearing the case.44 Accordingly, the NULLITY CASE was re-raffled to Branch 221 of the RTC of Quezon City, which granted PICOPs Motion for Reconsideration by setting for hearing PICOPs application for preliminary injunction. Meanwhile, in the MANDAMUS CASE, the RTC denied the DENR Secretarys Motion for Reconsideration and granted the Motion for the Issuance of Writ of Mandamus and/or Writ of Mandatory Injunction via a 10 February 2003 Order.45 The fallo of the 11 October 2002 Decision was practically copied in the 10 February 2003 Order, although there was no mention of the damages imposed against then Secretary Alvarez.46 The DENR Secretary filed a Notice of Appeal47 from the 11 October 2002 Decision and the 10 February 2003 Order. On 28 February 2003, the DENR Secretary filed before the Court of Appeals, a Petition for Certiorari With a Most Urgent Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction insofar as the trial court ordered the execution of its 11 October 2002 Decision pending appeal. The petition (hereinafter referred to as the INJUNCTION CASE) was docketed as CA-G.R. SP No. 75698, which was assigned to the Special 13th Division thereof.

On 11 March 2003, the Court of Appeals issued a 60-day TRO48 enjoining the enforcement of the 11 October 2002 Decision and the 10 February 2003 Order of the RTC. On 30 April 2003, the Court of Appeals issued a Writ of Preliminary Injunction.49 On 30 October 2003, the Court of Appeals rendered its Decision50 in the INJUNCTION CASE granting the Petition and annulling the Writ of Mandamus and/or Writ of Mandatory Injunction issued by the trial court. PICOP filed a Motion for Reconsideration.51 On 19 February 2004, the Seventh Division of the Court of Appeals rendered a Decision52 on the MANDAMUS CASE, affirming the Decision of the RTC, to wit: WHEREFORE, the appealed Decision is AFFIRMED with modification that the order directing then DENR Secretary Alvarez "to pay petitioner-appellee the sum of P10 million a month beginning May, 2002 until the conversion to IFMA of TLA No. 43, as amended, is formally effected and the harvesting from the said area is granted" is hereby deleted. 53 PICOP filed a Motion for Partial Reconsideration54 of this Decision, which was denied by the Court of Appeals in a 20 July 2004 Resolution.55 Meanwhile, in a 22 March 2004 Resolution,56 the Special Thirteenth Division of the Court of Appeals held in abeyance the ruling on the Motion for Reconsideration of the INJUNCTION CASE pending the Seventh Divisions resolution of the Motion for Reconsideration of the 19 February 2004 Decision in the MANDAMUS CASE. The DENR Secretary and PICOP filed with this Court separate Petitions for Review on the 19 February 2004 Court of Appeals Decision in the MANDAMUS CASE. These Petitions were docketed as G.R. No. 162243 and 164516, respectively. On 16 December 2004, the Special Thirteenth Division of the Court of Appeals rendered an Amended Decision57on the INJUNCTION CASE lifting the Writ of Preliminary Injunction it had previously issued, to wit: WHEREFORE, the Resolution dated March 22, 2004 holding in abeyance the resolution of the motion for reconsideration of Our October 30, 2003 decision is set aside and the Decision dated October 30, 2003 reconsidered. The Writ of Preliminary Injunction dated 30 April 2003 is hereby lifted and dissolved and the Order dated 10 February 2003 allowing execution pending appeal and authorizing the issuance of the writ of mandamus and/or writ of mandatory injunction is hereby affirmed. The Petition dated February 27, 2003 is herewith dismissed.58 Upon denial of its Motion for Reconsideration in a 9 March 2006 Resolution,59 the DENR Secretary filed with this Court, a Petition for Review60 of the INJUNCTION CASE. The Petition was docketed as G.R. No. 171875. On 5 July 2006, this Court resolved61 to consolidate G.R. No. 162243, 164516, and 171875. ISSUES In G.R. No. 162243, the DENR Secretary brought forth the following issues for our consideration: I WHETHER THE PRESIDENTIAL WARRANTY IS A CONTRACT WHICH CONSTITUTES A LEGAL BAR TO THE EXERCISE BY THE STATE OF ITS FULL CONTROL AND SUPERVISION REGARDING THE EXPLORATION DEVELOPMENT AND UTILIZATION OF ITS NATURAL RESOURCES. II

WHETHER [PICOP] HAD ACQUIRED A VESTED RIGHT OVER ITS FOREST CONCESSION AREA BY VIRTUE OF THE AFORESAID PRESIDENTIAL WARRANTY. III WHETHER THE TRIAL COURT HAD JURISDICTION TO TAKE COGNIZANCE OF THIS CASE BECAUSE THE SUBJECT MATTER THEREOF PERTAINS TO THE EXCLUSIVE ADMINISTRATIVE DOMAIN OF [THE DENR SECRETARY]. IV WHETHER [PICOPS] PETITION FOR MANDAMUS SHOULD HAVE BEEN DISMISSED (1) FOR LACK OF CAUSE OF ACTION; AND (2) BECAUSE THE SUBJECT MATTER THEREOF IS NOT CONTROLLABLE BY CERTIORARI. V WHETHER [PICOP] HAS FAITHFULLY COMPLIED WITH ALL THE ADMINISTRATIVE AND OTHER STATUTORY REQUIREMENTS ENTITLING IT TO AN IFMA CONVERSION. VI WHETHER [PRESIDENTIAL DECREE NO. 605]62 HAS BEEN PARTLY REPEALED BY [REPUBLIC ACT NO. 8975].63 In G.R. No. 164516, PICOP submits the sole issue: WHETHER THE COURT OF APPEALS PROPERLY DELETED THE AWARD OF DAMAGES TO PETITIONER BY THE TRIAL COURT.64 Finally, in G.R. No. 171875, the DENR Secretary submits the following arguments: A. [PICOP] DID NOT ACTUALLY FILE A MOTION FOR EXECUTION PENDING APPEAL. B. THERE ARE NO GOOD REASONS FOR THE GRANT OF EXECUTION PENDING APPEAL.65 THIS COURTS RULING Whether or not outright dismissal was proper Since the third, fourth and sixth issues raised by the DENR Secretary, if determined in favor of the DENR Secretary, would have warranted an outright dismissal of the MANDAMUS CASE as early as the trial court level, it is proper to resolve these issues first. The DENR Secretary alleges that the jurisdiction over the subject matter of the MANDAMUS CASE pertains to the exclusive administrative domain of the DENR, and therefore, the RTC had been in error in taking cognizance thereof. The DENR Secretary adds that, assuming arguendo that the RTC properly took cognizance of the MANDAMUS CASE, it committed a reversible error in not dismissing the same (1) for lack of cause of action; and (2) because the subject matter thereof is not controllable by mandamus. The Petition filed before the trial court was one for mandamus with prayer for the issuance of a writ of preliminary prohibitory and mandatory injunction with damages. Specifically, it sought to compel the DENR Secretary to: (1) sign, execute and deliver the IFMA documents to PICOP; (2) issue the corresponding IFMA number assignment; and (3) approve the harvesting of timber by PICOP from the area of TLA No. 43. The DENR Secretary contends that these acts relate to the licensing regulation and

management of forest resources, which task belongs exclusively to the DENR66 as conveyed in its mandate: SECTION 4. Mandate. The Department shall be the primary government agency responsible for the conservation, management, development and proper use of the countrys environment and natural resources, specifically forest and grazing lands, mineral resources, including those in reservation and watershed areas, and lands of the public domain, as well as the licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the present and future generations of Filipinos.67 The Court of Appeals ruled: The contention does not hold water. In its petition for mandamus, [PICOP] asserted that "DENR Secretary Alvarez acted with grave abuse of discretion or in excess of his jurisdiction in refusing to perform his ministerial duty to sign, execute and deliver the IFMA contract and to issue the corresponding IFMA number to it." The cited jurisdiction of the DENR on licencing regulation and management of our environment and natural resources is not disputed. In fact, the petition seeks to compel it to properly perform its said functions in relation to [PICOP]. What is at stake is not the scope of the DENR jurisdiction but the manner by which it exercises or refuses to exercise that jurisdiction. The courts have the duty and power to strike down any official act or omission tainted with grave abuse of discretion. The 1987 Constitution is explicit in providing that judicial power includes not only the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, but also to determine whether or not there has been grave abuse of discretion amounting to lack or in excess of jurisdiction on the part of any branch or instrumentality of the government.68 The Court of Appeals is correct. Since PICOP alleges grave abuse of discretion on the part of the DENR Secretary, it behooves the court to determine the same. An outright dismissal of the case would have prevented such determination. For the same reason, the MANDAMUS CASE could not have been dismissed outright for lack of cause of action. A motion to dismiss based on lack of cause of action hypothetically admits the truth of the allegations in the complaint.69 In ruling upon the DENR Secretarys Motion to Dismiss, PICOPs allegation that it has a contract with the government should, thus, be hypothetically admitted. Necessarily, the DENR Secretarys argument that there was no such contract should be considered in the trial of the case and should be disregarded at this stage of the proceedings. The DENR Secretary, however, counters that he/she has not yet exercised his/her exclusive jurisdiction over the subject matter of the case, i.e., either to approve or disapprove PICOPs application for IFMA conversion. Hence, it is argued that PICOPs immediate resort to the trial court was precipitate based on the doctrine of exhaustion of administrative remedies.70 The Court of Appeals ruled that the doctrine of exhaustion of administrative remedies is disregarded when there are circumstances indicating the urgency of judicial intervention,71 which are averred to be extant in this case, citing PICOPs employment of a sizable number of workers and its payment of millions in taxes to the government.72 The Court of Appeals appends: Moreover, contrary to [the DENR Secretarys] claim, the approval of an application for IFMA conversion is not purely discretionary on the part of the DENR Secretary since the approval of an IFMA conversion depends upon compliance with the requirements provided under DAO No. 99-53. Of course, as earlier intimated, even assuming, arguendo, that the approval of an IFMA conversion involves the exercise of discretion by the DENR Secretary, the writ of mandamus may be issued to compel the proper exercise of that discretion where it is shown that there was grave abuse of discretion, manifest injustice, or palpable excess of authority.73 While the Court of Appeals is correct in making such rulings, such accuracy applies only insofar as the RTC assessment that the MANDAMUS CASE should not have been subjected to outright dismissal. The issue of whether there was indeed an urgency of

judicial intervention (as to warrant the issuance of a writ of mandamus despite the exclusive jurisdiction of the DENR) is ultimately connected to the truth of PICOPs assertions, which were hypothetically admitted in the motion to dismiss stage. In other words, it all boils down to whether the DENR Secretary committed grave abuse of discretion in not executing the IFMA documents and in not approving PICOPs harvesting of timber from the area of TLA No. 43. The sixth issue raised by the DENR Secretary concerns Section 1 of Presidential Decree No. 605 which, according to the Court of Appeals had been partly repealed by Republic Act No. 8975. Section 1 of Presidential Decree No. 605 provides: SECTION 1. No court of the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or preliminary mandatory injunction in any case involving or growing out of the issuance, approval or disapproval, revocation or suspension of, or any action whatsoever by the proper administrative official or body on concessions, licenses, permits, patents, or public grants of any kind in connection with the disposition, exploitation, utilization, exploration and/or development of the natural resources of the Philippines. According to the Court of Appeals, Section 1 of PD 605 has been partly repealed by RA No. 8975, enacted on November 7, 2002. Section 3 of the said law limits the prohibition on the issuance of restraining orders and injunctions to the following: "(a) Acquisition, clearance and development of the right-of-way and/or site of location of any national government project; "(b) Bidding or awarding of contract/project of the national government as defined under Section 2 hereof; "(c) Commencement, prosecution, execution, implementation, operation of any such contract or project; "(d) Termination or rescission of any such contract/project; and "(e) The undertaking or authorization of any other lawful activity necessary for such contract/project." Noticeably, the subject coverage on concessions, licenses and the like contemplated in Section 1 of PD 605 is notreproduced in the foregoing enumeration under Section 3 of R.A. 8975. The effect of the non-reenactment is a partial repeal of Section 1 of PD 605. It is a rule of legal hermenuetics (sic) that an act which purports to set out in full all that it intends to contain operates as a repeal of anything omitted which was contained in the old act and not included in the act as revised. As the repealing clause of R.A. 8975 states: "Sec. 9. Repealing Clause All laws, decrees including Presidential Decree Nos. 605, 1818 and Republic Act No. 7160, as amended, orders, rules and regulations or parts thereof inconsistent with this act are hereby repealed or amended accordingly."74 The DENR Secretary claims that since Republic Act No. 8975 simply declares that Presidential Decree No. 605 or parts thereof "inconsistent with this Act are hereby repealed or amended accordingly," then, there should be an inconsistency between Presidential Decree No. 605 and Republic Act No. 8975 before there can be a partial repeal of Presidential Decree No. 605. We agree with the DENR Secretary. Republic Act No. 8975 was not intended to set out in full all laws concerning the prohibition against temporary restraining orders, preliminary injunctions and preliminary mandatory injunctions. Republic Act No. 8975 prohibits lower courts from issuing such orders in connection with the implementation of government infrastructure projects, while Presidential Decree No. 605 prohibits the issuance of the same, in any case involving licenses, concessions and the like, in connection with the natural resources of the Philippines. This can be further seen from the respective titles of these two laws, which, of course, should express the subjects thereof:75 REPUBLIC ACT NO. 8975 AN ACT TO ENSURE THE EXPEDITIOUS IMPLEMENTATION AND COMPLETION OF GOVERNMENT INFRASTRUCTURE

PROJECTS BY PROHIBITING LOWER COURTS FROM ISSUING TEMPORARY RESTRAINING ORDERS, PRELIMINARY INJUNCTIONS OR PRELIMINARY MANDATORY INJUNCTIONS, PROVIDING PENALTIES FOR VIOLATIONS THEREOF, AND FOR OTHER PURPOSES. PRESIDENTIAL DECREE NO. 605 BANNING THE ISSUANCE BY COURTS OF PRELIMINARY INJUNCTIONS IN CASES INVOLVING CONCESSIONS, LICENSES, AND OTHER PERMITS ISSUED BY PUBLIC ADMINISTRATIVE OFFICIALS OR BODIES FOR THE EXPLOITATION OF NATURAL RESOURCES. However, when the licenses, concessions and the like also entail government infrastructure projects, the provisions of Republic Act No. 8975 should be deemed to apply,76 and, thus, Presidential Decree No. 605 had been modified in this sense. Nevertheless, despite the fact that Presidential Decree No. 605 subsists, the DENR Secretary must have missed our ruling in Datiles and Co. v. Sucaldito,77 wherein we held that the prohibition in Presidential Decree No. 605 "pertains to the issuance of injunctions or restraining orders by courts against administrative acts in controversies involving facts or the exercise of discretion in technical cases, because to allow courts to judge these matters could disturb the smooth functioning of the administrative machinery. But on issues definitely outside of this dimension and involving questions of law, courts are not prevented by Presidential Decree No. 605 from exercising their power to restrain or prohibit administrative acts." While there are indeed questions of facts in the present Petitions, the overriding controversy involved herein is one of law: whether the Presidential Warranty issued by former President Marcos are contracts within the purview of the Constitutions NonImpairment Clause. Accordingly, the prohibition in Presidential Decree No. 605 against the issuance of preliminary injunction in cases involving permits for the exploitation of natural resources does not apply in this case. Moreover, as we held in Republic v. Nolasco,78 statutes such as Presidential Decree No. 605, Presidential Decree No. 1818 and Republic Act No. 8975 merely proscribe the issuance of temporary restraining orders and writs of preliminary injunction and preliminary mandatory injunction. They cannot, under pain of violating the Constitution, deprive the courts of authority to take cognizance of the issues raised in the principal action, as long as such action and the relief sought are within their jurisdiction. We further held in Nolasco: However, it must be clarified that Republic Act No. 8975 does not ordinarily warrant the outright dismissal of any complaint or petition before the lower courts seeking permanent injunctive relief from the implementation of national government infrastructure projects. What is expressly prohibited by the statute is the issuance of the provisional reliefs of temporary restraining orders, preliminary injunctions, and preliminary mandatory injunctions. It does not preclude the lower courts from assuming jurisdiction over complaints or petitions that seek as ultimate relief the nullification or implementation of a national government infrastructure project. A statute such as Republic Act No. 8975 cannot diminish the constitutionally mandated judicial power to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of government. x x x.79 As the disposition of these consolidated Petitions will be dispositions of the principal actions, any applicability of the prohibitions in Presidential Decree No. 605 will be mooted. Whether or not the presidential warranty was a contract PICOPs ground for the issuance of a writ of mandamus is the supposed contract entered into by the government in the form of a Presidential Warranty, dated 29 July 1969 issued by then President Ferdinand E. Marcos to PICOP. The DENR Secretary refutes this claim, and alleges that the RTC and the Court of Appeals erred in declaring the Presidential Warranty a valid and subsisting contract under the Constitutions Non-Impairment Clause. The Court of Appeals has this brief statement concerning the main issue of the MANDAMUS CASE:

The questioned warranty is a valid contract. It was freely entered into by the government and [PICOP]. Mutual considerations were taken into account in the execution of that contract. [PICOP] invested billions of pesos in its concession areas. In return, the government assured [PICOP] of its tenurial rights over TLA No. 43, as amended, as well as its exclusive right to cut, collect and saw timber and pulpwood therein. The DENR must perforce honor and respect the warranty by maintaining the area alloted (sic) to [PICOP] under TLA No. 43, as amended.80 We are constrained to disagree. In unequivocal terms, we have consistently held that such licenses concerning the harvesting of timber in the countrys forests cannot be considered contracts that would bind the Government regardless of changes in policy and the demands of public interest and welfare.81 Such unswerving verdict is synthesized in Oposa v. Factoran, Jr.,82 where we held: In the first place, the respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted with utmost infidelity to the Government by providing undue and unwarranted benefits and advantages to the timber license holders because he would have forever bound the Government to strictly respect the said licenses according to their terms and conditions regardless of changes in policy and the demands of public interest and welfare. He was aware that as correctly pointed out by petitioners, into every timber license must be read Section 20 of the Forestry Reform Code (P.D. No. 705) which provides: "x x x Provided, that when the national interest so requires, the President may amend, modify, replace or rescind any contract, concession, permit, licenses or any other form of privilege granted herein x x x." Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protected by the due process clause of the constitution. In Tan vs. Director of Forestry, [125 SCRA 302, 325 (1983)] this Court held: "x x x A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in this case. "A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it property or a property right, nor does it create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights, neither is it property or property rights. (People vs. Ong Tin, 54 O.G. 7576). x x x" We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary [190 SCRA 673, 684 (1990)]: "x x x Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L24548, October 27, 1983, 125 SCRA 302]." Since timber licenses are not contracts, the non-impairment clause, which reads: "SEC. 10. No law impairing, the obligation of contracts shall be passed." cannot be invoked. PICOP, however, argues that these rulings laid down in Tan v. Director of Forestry,83 Felipe Ysmael, Jr. & Co., Inc. v. Deputy

Executive Secretary84 and Oposa do not find application in the present case allegedly because the issue here is the unlawful refusal of then DENR Secretary Alvarez to issue an IFMA to PICOP and not the matter of a timber license being merely a license or privilege.85 We are not persuaded. PICOP filed the MANDAMUS CASE against then DENR Secretary Alvarez on the ground that Secretary Alvarezs refusal to issue an IFMA in its favor allegedly violated its vested right over the area covered by its TLA No. 43 and presidential warranty, and impaired the obligation of contract under said agreement and warranty.86 The argument that the Presidential Warranty is a contract on the ground that there were mutual considerations taken into account consisting in investments on PICOPs part is preposterous. All licensees put up investments in pursuing their businesses. To construe these investments as consideration in a contract would be to stealthily render ineffective the settled jurisprudence that "a license or a permit is not a contract between the sovereignty and the licensee or permittee, and is not a property in the constitutional sense, as to which the constitutional proscription against the impairment of contracts may extend."87 Neither shall we allow a circumvention of such doctrine by terming such permit as a "warranty." Whether or not there was compliance with the requirements for the conversion of TLA No. 43 as amended into an IFMA DAO No. 99-53 enumerates the requirements for the grant of the IFMA conversion: Sec. 9. Qualifications of Applicants. The applicants for IFMA shall be: (a) A Filipino citizen of legal age; or (b) Partnership, cooperative or corporation whether public or private, duly registered under Philippine laws. However, in the case of application for conversion of TLA into IFMA, an automatic conversion after proper evaluation shall be allowed, provided the TLA holder shall have signified such intention prior to the expiry of the TLA, PROVIDED further, the TLA holder has shown satisfactory performance and have complied with the terms and conditions of the TLA and pertinent rules and regulations. Therefore, the following are the requisites for the automatic conversion of the TLA into an IFMA, to wit: 1. The TLA holder had signified its intent to convert its TLA into an IFMA prior to the expiration of its TLA; 2. Proper evaluation was conducted on the application; and 3. The TLA holder has satisfactorily performed and complied with the terms and conditions of the TLA and the pertinent rules and regulations. The Court of Appeals held: From the foregoing provision, it can be gleaned that as long as an applicant-corporation has signified its intention to convert its TLA into an IFMA prior to the expiration of its TLA, has shown satisfactory performance as a TLA holder and has complied with the terms and conditions of the TLA and pertinent rules and regulations, conversion follows as a matter of course. It becomes automatic. [PICOP] has complied with the administrative requirements. In its letter dated August 28, 2000 to the Community Environment and Natural Resources Office (CENRO) for DENR-RXIII-D4, Bislig, Surigao del Sur, it signified its intention to convert its TLA into an IFMA. It has also shown satisfactory performance as a TLA holder as evidenced by the July 31, 2001 Report of Director Elias Seraspi, Jr. The said report states that [PICOP] was able to hold on its management and protection of its concession areas.

xxxx Apparently, [the DENR Secretary] refuses to sign the documents on the grounds that [PICOP] has not secured and submitted a clearance from the National Commission on Indigenous Peoples (NCIP) showing that its TLA areas do not overlap with existing ancestral domains: and that [PICOP] has outstanding and overdue obligation in forest charges. The two reasons last cited by the Secretary for refusing to sign and deliver the IFMA documents are not real nor valid. Section 59 of RA 8371, which requires prior certification from the NCIP that the areas affected do not overlap with any ancestral domain before any IFMA can be entered into by the government, should be read in conjunction with Sections 3 (a) and 56 of the same law. Section 3 (a) of RA 8371 describes ancestral domains as "areas generally belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural resources therein, held under a claim of ownership, occupied or possessed by ICCs/IPs, by themselves or through their ancestors, communally or individually since time immemorial, continuously to the present xxx." On the other hand, Section 56 of the same law provides: "Sec. 56. Existing Property Rights Regimes. Property rights within the ancestral domains already existing and/or vested upon effectivity of this Act, shall be recognized and respected." It can thus be deduced that Section 59 can only be interpreted to refer to ancestral domains which have been duly established as such (i.e., the concerned indigenous people must have been in continuous possession or occupation of the area concerned since time immemorial up to the present). Too, existing property rights over the areas sought to be declared as part of an ancestral domain must be recognized and respected. [PICOP] has already acquired property rights over its concession areas. It has been in exclusive, continuous and uninterrupted possession and occupation of TLA No. 43 areas since 1952 to present. From the time it managed and operated TLA No. 43, it has made huge investments on its concession areas. These include the planting of millions of trees and the scientific silvicultural treatment of the forest to make it more productive. Having acquired property rights over TLA No. 43 areas, [PICOP] need not be required to secure clearance from the NCIP pursuant to Section 59 of RA 8371. [The DENR Secretarys] claim that [PICOP] failed to settle its outstanding obligations to the government in the form of unpaid forest charges do not inspire belief. Under Sec. 3 (3.5) of DENR Memorandum Circular No. 96-04 dated March 14, before an Integrated Annual Operations Plan (IAOP) can be issued, it is a condition precedent that the licensee has no pending forestry accounts. If it were true that [PICOP] had unpaid forest charges, why was it issued IAOP for calendar year 2001-2002 by Secretary Alvarez himself?88 Upon close scrutiny of the records, this Court observes that these findings of compliance by PICOP are negated by the very evidence on which they are supposedly moored. As clearly shown by the 31 July 2001 Memorandum of Regional Executive Director Elias D. Seraspi, Jr., DENR Caraga Region, RED Seraspi neither made a categorical finding of PICOPs satisfactory performance on its TLA No. 43 nor favorably recommended approval of PICOPs application for IFMA conversion. Rather, RED Seraspi recommended the proper evaluation of PICOPs request for the automatic conversion of TLA No. 43 into an IFMA: Hence, it is imperative to chart a good forest policy direction for the management, development and protection of TLA No. 43 after it expires on April 26, 2002 for the purpose of sustainable forest management of the area in support of national development. With this vision, the proper evaluation to consider the request for automatic conversion of TLA No. 43 to IFMA pursuant to Section 9, DENR A.O. No. 99-53, upon its expiration on April 26, 2002 is hereby recommended.89 Administrative Requirements

There was actually no way by which RED Seraspi could have come up with a satisfactory performance finding since the very Performance Evaluation Team tasked to make the evaluation found PICOP to have violated existing DENR rules and regulations. According to the 11 July 2002 Memorandum Report of the Performance Evaluation Team, PICOP has not submitted its FiveYear Forest Protection Plan and its Seven-Year Reforestation Plan.90 Forest charges are, on the other hand, due and payable within 30 days from removal of the forest products from the cutting area when timber and other forest products are removed for domestic sales pursuant to Sections 6 and 6.2 of DAO No. 80, series of 1987. Thus: Section 6. Payment of Forest Charges. x x x In such a case, the forest charges shall be due and payable as follows: 6.1 When timber and other forest products are intended for export. x x x x 6.2 When timber and other forest products are to be removed for domestic sales. The forest charges shall be due and payable within thirty (30) days from removal thereof at the cutting area, or where the forest products are gathered; Provided, that such date of removal shall in no case be beyond thirty (30) days when the products are cut, gathered and removed. As testified to by FMB SFMS Ignacio M. Evangelista, PICOP failed to pay its regular forest charges covering the period from 22 September 2001 to 26 April 2002 in the total amount of P15,056,054.05.91 PICOP was also late in paying most of its forest charges from 1996 onwards for which it is liable for a surcharge of 25% per annum on the tax due and interest of 20% per annum which now amounts to P150,169,485.02.92 Likewise, it has overdue and unpaid silvicultural fees in the amount of P2,366,901.00 as of 30 August 2002.93 In all, PICOP has unpaid and overdue forest charges in the sum of P167,592,440.90 as of 10 August 2002.94 PICOPs failure to pay its regular forest charges, interests, penalties and surcharges and silvicultural fees amounting to P167,592,440.90 as of 30 August 2002 is further evidenced by the collection letters sent to PICOP and the absence of official receipts in the DENR records in Bislig City evidencing payment of the overdue amounts stated in the said collection letters.95 As can be gleaned from SFMS Evangelistas tabulation, all the official receipts evidencing payments of PICOP with their corresponding periods are indicated. However, there are no similar official receipts for the period covering 22 September 2001 to 26 April 2002, which indicate that no payment has been made for the same period. With the DENR Secretarys presentation of its positive and categorical evidence showing PICOPs failure to pay its fores t charges amounting to P167,592,440.90 as of 10 August 2002, the burden of evidence has been shifted to PICOP to prove otherwise. PICOP should have, thus, presented official receipts as proof of their payment of such forest charges, but failed to do so. Despite the foregoing evidence, the Court of Appeals declared that if it were true that PICOP has unpaid forest charges, it should not have been issued an IAOP for the year 2001-2002 by Secretary Alvarez himself.96 In doing so, the Court of Appeals disregarded the part of the very evidence presented by PICOP itself, which shows that the IAOP was approved subject to several conditions, not the least of which was the submission of proof of updated payment of forest charges from April 2001 to June 2001.97 Neither was this the only evidence presented by PICOP which showed that it has unpaid forest charges. PICOP presented the certification of CENRO Calunsag which refers only to its alleged payment of regular forest charges covering the period from 14 September 2001 to 15 May 2002.98 The certification does not mention similar payment of the penalties, surcharges and interests which it incurred in paying late several forest charges, which fact it did not rebut. The 27 May 2002 Certification by CENRO Calunsag, on the other hand, specified only the period covering 14 September 2001 to 15 May 2002 and the amount of P53,603,719.85 paid by PICOP without indicating the corresponding volume and date of production of the logs. This is in contrast to the findings of SFMS Evangelista which cover the period from CY 1996 to 30 August 2002 which includes penalties, interests, and surcharges for late payment pursuant to DAO 80, series of 1987.

Per request of PICOP, a certification dated 21 August 2002 was issued by Bill Collector Amelia D. Arayan, and attested to by CENRO Calunsag, showing that PICOP paid only regular forest charges of its log production covering 1 July 2001 to 21 September 2001. However, there being log productions after 21 September 2001, PICOP failed to pay the corresponding regular forest charges amounting to P15,056,054.05.99 The same certification also shows delayed payment of forest charges, thereby corroborating the testimony of SFMS Evangelista and substantiating the imposition of penalties and surcharges. Finally, even if we consider for the sake of argument that the IAOP should not have been issued if PICOP had existing forestry accounts, the issuance of the IAOP cannot be considered proof that PICOP has paid the same. Firstly, the best evidence of payment is the receipt thereof. PICOP has not presented any evidence that such receipts had been lost or destroyed or cannot be produced in court.100 Secondly, it is a well known and settled rule in our jurisdiction that the Republic, or its government, is usually not estopped by mistake or error on the part of its officials or agents.101 If PICOP had been issued an IAOP in violation of the law allegedly because it may not be issued if PICOP had existing forestry accounts, the government cannot be estopped from collecting such amounts and providing the necessary sanctions therefor, including the withholding of the IFMA until such amounts are paid. Statutory Requirements To recap, the Court of Appeals had relied on RED Seraspis certification in concluding that there was satisfactory performance on the part of PICOP as a TLA holder, despite said certification showing non-compliance with the required Five-Year Forest Protection Plan and Seven-Year Reforestation Plan. The Court of Appeals also declared that PICOP has paid its outstanding obligations based on an inference that the IAOP would not have been issued if PICOP had unpaid forest charges, contrary to the conditions laid down in the IAOP itself, and in violation of the Best Evidence Rule and the doctrine disallowing the estoppel of the government from the acts of its officers. On the statutory requirement of procuring a clearance from the NCIP, the Court of Appeals held that PICOP need not comply with the same at all. As quoted above, the Court of Appeals held that Section 59 of Republic Act No. 8371, which requires prior certification from the NCIP that the areas affected do not overlap with any ancestral domain before any IFMA can be entered into by government, should be interpreted to refer to ancestral domains which have been duly established as such by the continuous possession and occupation of the area concerned by indigenous peoples since time immemorial up to the present. According to the Court of Appeals, PICOP has acquired property rights over the TLA No. 43 areas, being in exclusive, continuous and uninterrupted possession and occupation of TLA No. 43 areas since 1952 up to the present. This ruling defies the settled jurisprudence we have mentioned earlier, including that of Oposa and Tan which held that "[a] license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal, state or municipal, granting it and the person to whom it is granted; neither is it property or a property right, nor does it create a vested right; x x x."102 The Court of Appeals resort to statutory construction is, in itself, misplaced. Section 59 of Republic Act No. 8371 is clear and unambiguous: SEC. 59. Certification Precondition. All departments and other governmental agencies shall henceforth be strictly enjoined from issuing, renewing or granting any concession, license or lease, or entering into any production-sharing agreement, without prior certification from the NCIP that the area affected does not overlap with any ancestral domain. Such certification shall only be issued after a field-based investigation is conducted by the Ancestral Domains Office of the area concerned: Provided, That no certification shall be issued by the NCIP without the free and prior informed and written consent of the ICCs/IPs concerned: Provided, further, That no department, government agency or government-owned or controlled corporation may issue new concession, license, lease, or production sharing agreement while there is a pending application for a CADT: Provided, finally, That the ICCs/IPs shall have the right to stop or suspend, in accordance with this Act, any project that has not satisfied the requirement of this consultation process. The court may not construe a statute that is clear and free from doubt. Time and again, it has been repeatedly declared by this Court that where the law speaks in clear and categorical language, there is no room for interpretation. There is only room for

application.103 PICOPs intent to put a cloud of ambiguity in Section 59 of Republic Act No. 8371 by invoking Section 3(a) thereof fails miserably. Section 3(a) of Republic Act No. 8371 defines ancestral domain as follows: a) Ancestral domains Subject to Section 56 hereof, refers to all areas generally belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural resources therein, held under a claim of ownership, occupied or possessed by ICCs/IPs, by themselves or through their ancestors, communally or individually since time immemorial, continuously to the present except when interrupted by war, force majeure or displacement by force, deceit, stealth or as a consequence of government projects or any other voluntary dealings entered into by government and private individuals/corporations, and which are necessary to ensure their economic, social and cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, and other lands individually owned whether alienable and disposable or otherwise, hunting grounds, burial grounds, worship areas, bodies of water, mineral and other natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs but from which they traditionally had access to for their subsistence and traditional activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting cultivators; Ancestral domains remain as such even when possession or occupation of the area has been interrupted by causes provided under the law such as voluntary dealings entered into by the government and private individuals/corporation. Therefore, the issuance of TLA No. 43 in 1952 did not cause the Indigenous Cultural Communities or Indigenous Peoples to lose their possession or occupation over the area covered by TLA No. 43. The issuance of a Certificate of Ancestral Domain Title is merely a formal recognition of the ICCs/IPs rights of possession and ownership over their ancestral domain identified and delineated in accordance with the Indigenous Peoples Rights Act,104 and therefore, cannot be considered a condition precedent for the need for an NCIP certification. In the first place, it is manifestly absurd to claim that the subject lands must first be proven to be part of ancestral domains before a certification that they are not part of ancestral domains can be required. In Cruz v. Secretary of DENR,105 where no single member of the Court penned a majority opinion (since the petition to declare Republic Act No. 8371 unconstitutional was dismissed for the reason that the votes were equally divided), Mr. Justice Reynato Puno, who voted to dismiss the petition, wrote in his separate opinion: As its subtitle suggests, [Section 59 of R.A. No. 8371] requires as a precondition for the issuance of any concession, license or agreement over natural resources, that a certification be issued by the NCIP that the area subject of the agreement does not lie with any ancestral domain. The provision does not vest the NCIP with power over the other agencies of the State as to determine whether to grant or deny any concession or license or agreement. It merely gives the NCIP the authority to ensure that the ICCs/IPs have been informed of the agreement and that their consent thereto has been obtained. Note that the certification applies to agreements over natural resources that do not necessarily lie within the ancestral domains. For those that are found within the said domains, Sections 7(b) and 57 of the IPRA apply. Another requirement determined by the Court of Appeals to have been complied with by PICOP, albeit impliedly this time by not mentioning it at all, is the requirement posed by Sections 26 and 27 of the Local Government Code: SEC. 26. Duty of National Government Agencies in the Maintenance of Ecological Balance. It shall be the duty of every national agency or government-owned or controlled corporation authorizing or involved in the planning and implementation of any project or program that may cause pollution, climatic change, depletion of non-renewable resources, loss of crop land, rangeland, or forest cover, and extinction of animal or plant species, to consult with the local government units, nongovernmental organizations, and other sectors concerned and explain the goals and objectives of the project or program, its impact upon the people and the community in terms of environmental or ecological balance, and the measures that will be undertaken to prevent or minimize the adverse effects thereof. SEC. 27. Prior Consultation Required. No project or program shall be implemented by government authorities unless the consultations mentioned in Sections 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian concerned is obtained: Provided, That occupants in areas where such projects are to be implemented shall not be evicted unless appropriate relocation sites have been provided, in accordance with the provisions of the Constitution. These provisions are clear: the prior approval of local government units affected by the proposed conversion of a TLA into an

IFMA is necessary before any project or program can be implemented by the government authorities that may cause "depletion of non-renewable resources, loss of crop land, rangeland or forest cover, and extinction of animal or plant species." The common evidence of the DENR Secretary and PICOP, namely the 31 July 2001 Memorandum of RED Seraspi, enumerates the local government units and other groups which had expressed their opposition to PICOPs application for IFMA conversion: 7. During the conduct of the performance evaluation of TLA No. 43 issues/complaints against PRI were submitted thru Resolutions and letters. It is important that these are included in this report for assessment of what are their worth, viz: xxxx 7.2 Joint Resolution (unnumbered), dated March 19, 2001 of the Barangay Council and Barangay Tribal Council of Simulao, Boston, Davao Oriental (ANNEX F) opposing the conversion of TLA No. 43 into IFMA over the 17,112 hectares allegedly covered with CADC No. 095. 7.3 Resolution Nos. 10, s-2001 and 05, s-2001 (ANNEXES G & H) of the Bunawan Tribal Council of Elders (BBMTCE) strongly demanding none renewal of PICOP TLA. They claim to be the rightful owner of the area it being their alleged ancestral land. 7.4 Resolution No. 4, S-2001 of Sitio Linao, San Jose, Bislig City (ANNEX I) requesting not to renew TLA 43 over the 900 hectares occupied by them. 7.5 Resolution No. 22, S-2001 (ANNEX J) of the Sanguniang Bayan, Lingig, Surigao del Sur not to grant the conversion of TLA 43 citing the plight of former employees of PRI who were forced to enter and farm portion of TLA No. 43, after they were laid off. 7.6 SP Resolution No. 2001-113 and CDC Resolution Nos. 09-2001 of the Sanguniang Panglungsod of Bislig City (ANNEXES K & L) requesting to exclude the area of TLA No. 43 for watershed purposes. 7.7 Resolution No. 2001-164, dated June 01, 2001 (ANNEX M) Sanguniang Panglungsod of Bislig City opposing the conversion of TLA 43 to IFMA for the reason that IFMA do not give revenue benefits to the City.106 As stated in RED Seraspis 31 July 2001 Memorandum,107 several indigenous groups and some affected local government units have expressly opposed PICOPs application for IFMA conversion of its TLA No. 43. PICOP merely submitted a purported resolution108 of the Province of Surigao del Sur indorsing the approval of PICOPs application for IFMA conversion. But Surigao del Sur is not the only province affected by the area covered by the proposed IFMA. As even the Court of Appeals found, PICOPs TLA No. 43 traverses the length and breadth not only of Surigao del Sur but also Agusan del Sur, Compostela Valley and Davao Oriental.109 How then can PICOP claim that it complied with the Local Government Code requirement of obtaining prior approval of the Sangunian concerned when only one out of the four affected local government units has purportedly signified its concurrence to the proposed IFMA conversion? Finally, the DENR, by withholding the conversion of PICOPs TLA No. 43 into an IFMA, has made a factual finding that PICOP has not yet complied with the requirements for such a conversion. Findings of facts of administrative agencies are generally accorded great respect, if not finality, by the courts because of the special knowledge and expertise over matters falling under their jurisdiction.110 Such finality of the DENRs factual finding, supported as it is by substantial evidence, can only be overcome by grave abuse of discretion amounting to lack or excess in jurisdiction, which is even more pronounced in a Petition for Mandamus. Whether or not there has already been a conversion of TLA No. 43 into an IFMA The Court of Appeals declared that there exists no legal impediment to the conversion of respondents TLA No. 43 into an IFMA as evidenced by petitioners letters dated 26 October 2002 and 26 April 2002:

Moreover, [the DENR Secretarys] own letters to [PICOP] confirm that it has established a clear right to the automatic conversion of TLA No. 43 to IFMA. Thus, on October 26, 2002, [the DENR Secretary] stated in his letter to [PICOP] "that pursuant to DAO99-53, we have cleared the conversion on PICOPs TLA No. 43 to IFMA effective from the expiration of said TLA on April 26, 2002." Too, in its April 24, 2002 letter to [PICOP], [the DENR Secretary] granted PICOPs TDMP "[p]ending the formal approval of [its] IFMA xxx." It could thus be deduced that there exists no legal impediment to the conversion of PICOPs TLA 43 to IFMA. Its approval remains a formality. We disagree. Then DENR Secretary Alvarezs 25 October 2001 letter is reproduced herein for reference: Dear Mr. Bernardino: Consistent with your attached Memorandum to her Excellency, the President, dated 17 October 2001 and in response to your Letter of Intent dated 25 January 2001, we wish to inform you that, pursuant to DENR Administrative Order No. 99-53, we have cleared the conversion of PICOPs Timber License Agreement (TLA) No. 43 to Integrated Forest Management Agreement (IFMA) effective from the expiration of said TLA on April 26, 2002. In this regard, you are hereby requested to designate PICOPs representative(s) to discuss with the DENR Team, created under Special Order No. 2001-638, the conditions and details of the said IFMA, including the production sharing arrangement between PICOP and the government.111 By giving this clearance for the conversion of PICOPs TLA into an IFMA, the DENR Secretary cannot, by any stretch of imagination, be claimed to have granted the conversion itself. The letter is clear that the "conversion" could not be final since its conditions and details still have to be discussed as stated in the second paragraph of said letter; hence, the same letter could not have reduced to a mere formality the approval of the conversion of PICOPs TLA No. 43 into an IFMA. Likewise, then DENR Secretary Alvarezs 26 April 2002 letter approving PICOPs Transition Development and Management Plan (TDMP) cannot be considered as an approval of PICOPs application for IFMA conversion. Again, the aforesaid letter is quoted in full: April 24, 2002 MR. WILFREDO D. FUENTES Vice President Resident Manager PICOP Resources, Incorporated 2nd Floor, Moredel Building 2280 Pasong Tamo Extension Makati City Dear Mr. Fuentes: This refers to your request for approval of the submitted Two-year Transition Development and Management Plan of PICOP Resources, Inc. (PRI) for the areas under TLA No. 43 which expires on April 26, 2002. Pending the formal approval of your IFMA and consistent with our letter to the PRI President dated 25 October 2002, we hereby grant your Transition Development and Management Plan (TDMP) for a period of one (1) year, effective 26 April 2002.

Within such period we expect PRI to submit/comply with all the necessary requisites for the final conversion of TLA 43 into IFMA, as provided for under DENR Administrative Order No. 99-53, including the settlement of certain obligations such as taxes, if any, and submission of plans and programs for evaluation and approval of item number 1 of your proposal contained in your letter dated February 4, 2002. All other proposed activities in your TDMP, particularly items 2 7 of your letter dated February 4, 2002, are hereby approved. For your information and guidance. Very truly yours, (sgd) HEHERSON T. ALVAREZ Secretary Cc: Mr. Teodoro G. Bernardino President The Director, FMB The aforesaid letter speaks for itself. PICOPs application for IFMA conversion is still pending approval. Indeed, there coul d have been no approval of PICOPs application for IFMA conversion because DAO No. 99-53 (which governs application for IFMA conversion) requires full and complete compliance with the requirements for conversion before it may be approved. As stated in the letter itself of then DENR Secretary Alvarez, PICOP has yet to "submit/comply with all the necessary requisites for final conversion of TLA No. 43 into IFMA." Even assuming, however, that the IFMA has already been converted, this is all purely academic because of the above-discussed settled jurisprudence that logging permits are not contracts within the Non-Impairment Clause and thus, can be amended, modified, replaced or rescinded when the national interest so requires. If the DENR Secretary, therefore, finds that the IFMA would be in violation of statutes, rules and regulations, particularly those protecting the rights of the local governments and the indigenous peoples within the IFMA area, then it behooves the DENR Secretary to revoke such IFMA. These same statutes, rules and regulations are the very same requirements mentioned above for the conversion of the TLA No. 43 into an IFMA. Whether or not it is proper to determine the constitutionality of Proclamation No. 297 in these consolidated petitions Another reason why the DENR Secretary wishes to further withhold the conversion of PICOPs TLA No. 43 into an IFMA is the 25 November 2002 Proclamation No. 297 excluding an area of 8,100 hectares, more or less, from the coverage of TLA No. 43, as amended, and which declared the same as a mineral reservation and as an environmentally critical area. The DENR Secretary claims that said Presidential Proclamation is rendered nugatory by the Court of Appeals disposition that the DENR should hon or and respect the area allotted to PICOP under TLA No. 43.112 PICOP claims that Proclamation No. 297 is a new matter which the DENR Secretary cannot raise before this Court without offending the basic rules of fair play, justice and due process.113 The DENR Secretary counters that it did not take up the issue of Proclamation No. 297 before the trial court precisely because said proclamation was issued more than one month after the trial court rendered its 11 October 2002 Decision. The DENR Secretary claims that PICOP cannot claim a violation of its right to due process because it raised the issue before the Court of Appeals in its Memorandum. While not giving in to the DENR Secretarys argument, PICOP claims that Proclamation No. 297 is violative of the Constitution and an encroachment on the legislative powers of Congress.114

We agree with PICOP that this constitutional issue cannot be decided upon in this case. This Court will not touch the issue of unconstitutionality unless it is the very lis mota. It is a well-established rule that a court should not pass upon a constitutional question and decide a law to be unconstitutional or invalid, unless such question is raised by the parties and that when it is raised, if the record also presents some other ground upon which the court may raise its judgment, that course will be adopted and the constitutional question will be left for consideration until such question will be unavoidable.115 The constitutional question presented by PICOP is not the very lis mota in these consolidated cases, as the preceding discussions very well give us adequate grounds to grant the Petition in G.R. No. 162243, deny the Petition in G.R. No. 164516, and dismiss the Petition in G.R. No. 171875. Moreover, PICOP has filed a separate petition for the declaration of nullity of Proclamation No. 297, wherein the issue of the constitutionality of Proclamation No. 297 is properly ventilated. Consequently, all actions and reliefs sought by either PICOP or the DENR Secretary which has Proclamation No. 297 as its ground or subject should be ventilated either in the pending petition for the declaration of its nullity, or in another proper suit instituted for that matter. EPILOGUE AND DISPOSITION In sum, the DENR Secretary has adequately proven that PICOP has, at this time, failed to comply with the administrative and statutory requirements for the conversion of TLA No. 43 into an IFMA. The Petition in G.R. No. 162243 should therefore be granted. On the other hand, as PICOP is not yet entitled to such conversion, then Secretary Alvarez had been correct in withholding the same and thus cannot be held liable for damages therefor. Thus, the Petition in G.R. No. 164516 should be dismissed. Finally, the DENR Secretarys Petition in G.R. No. 171875, assailing the lifting by the Court of Appeals of the Preliminary Injunction in its favor, is now mooted. PICOPs noncompliance with the requirements for the conversion of their TLA is so glaring, that we almost see a reluctance to uphold the law in light of PICOPs sizeable investments in its business, a fact repeatedly stressed by PICOP in its pleadings. In applying the judicial policy of nurturing prosperity, consideration should also be given to the long-term effects of the judicial evaluations involved, particularly to our nations greatest wealth, our vast natural resources.
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Our country has been blessed with rich, lush and verdant rain forests in which varied, rare and unique species of flora and fauna may be found.116 The legislative policy has been to preserve and nourish these natural resources as they are not only for our benefit but more so for the countless future generations to which we are likewise responsible. It has also been legislative policy to let the citizens of this country reap their benefits, foremost the citizens in close proximity to such resources, through the local governments and the NCIP. In working for the legislative policy of environmental preservation, the requirements of a five-year forest protection plan and seven-year reforestation plan had been laid down, together with the levy of forest charges for the regulation of forestry activities. In pursuing, on the other hand, the benefit distribution policy, the Local Government Code requires prior Sanggunian approval to ensure that local communities partake in the fruits of their own backyard, while R.A. No. 8371 provides for the rights of the indigenous peoples, who have been living in, managing, and nourishing these forests since time immemorial. PICOP has been fortunate to have been awarded an enormous concession area and thus, a huge chunk of the benefits of this countrys natural resources. Attached to this fortune is the responsibility to comply with the laws and regulations implementing the stated legislative policies of environmental preservation and benefit distribution. These laws and regulations should not be ignored, and the courts should not condone such blatant disregard by those who believe they are above the law because of their sizable investments and significant number of workers employed. PICOP has only itself to blame for the withholding of the conversion of its TLA. But while this disposition confers another chance to comply with the foregoing requirements, the DENR Secretary can rightfully grow weary if the persistence on noncompliance will continue. The judicial policy of nurturing prosperity would be better served by granting such concessions to someone who will abide by the law.

WHEREFORE, the Petition in G.R. No. 162243 is GRANTED. The Decision of the Court of Appeals insofar as it affirmed the RTC Decision granting the Petition for Mandamus filed by Paper Industries Corporation of the Philippines (PICOP) is hereby REVERSED and SET ASIDE. The Petition in G.R. No. 164516 seeking the reversal of the same Decision insofar as it nullified the award of damages in favor of PICOP is DENIED for lack of merit. The Petition in G.R. No. 171875, assailing the lifting of the Preliminary Injunction in favor of the Secretary of Environment and Natural Resources is DISMISSED on the ground of mootness. SO ORDERED. MINITA V. CHICO-NAZARIO Associate Justice WE CONCUR: ARTEMIO V. PANGANIBAN Chief Justice Chairperson CONSUELO YNARES-SANTIAGO Associate Justice MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

ROMEO J. CALLEJO, SR. Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Resolution were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. ARTEMIO V. PANGANIBAN Chief Justice

Footnotes
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Penned by Judge Jose G. Pineda, Quezon City RTC, Branch 220.

Penned by Associate Justice Ruben T. Reyes with Associate Justices Edgardo P. Cruz and Noel G. Tijam concurring; rollo of G.R. No. 162243, pp. 229-258.
3

Penned by Associate Justice Juan Q. Enriquez, Jr. with Associate Justices Hakim S. Abdulwahid and Vicente Q. Roxas concurring; rollo of G.R. No. 171875, pp. 67-78.
4

CA rollo, pp. 176-183. CA rollo, p. 321. Folder of Exhibits, Exhibit G-25, p. 114; Records, Vol. 1.

Records, Vol. 1, pp. 41-55. Folder of Exhibits, Exhibit 7-B, Records, Vol. 1, p. 82; Records, Vol. 3, p. 469. Records, Vol. 1, p. 83; Folder of Exhibits, Exhibit 7-C, Vol. 3, p. 470. Records, Vol. 1, pp. 84-85; Folder of Exhibits, Exhibits 7-D and 7-E, pp. 471 and 472; Records, Vol. 3. Folder of Exhibits, Exhibit 7-F, Records, Vol. 3, p. 473. Rollo of G.R. No. 162243, pp. 361-363. Rollo of G.R. No. 162243, pp. 364-392. Rollo of G.R. No. 162243, pp. 393-395. Rollo of G.R. No. 162243, p. 396. Records, pp. 433-434. Id. at 433-439. Id. at 440. Rollo of G.R. No. 162243, p. 421. Id. at 425. Id. at 426. Id. at 427-428. Id. at 429-430. Id. at 431-435. Id. at 436. Id. at 437-439. Folder of Exhibits, Exhibit 9, p. 512; RTC records, Vol. 3. Rollo of G.R. No. 162243, pp. 440-441. Id. at 442-443. Id. at 452. Folder of Exhibits, Exhibit 7, Vol. 3, pp. 466-467.

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Id. at 467-468. Rollo of G.R. No. 162243, pp. 221-222. Records, Vol. 2, pp. 393-456. Id. at 459. Id. at 481-503. Id. at 566. Id. at 573. Rollo of G.R. No. 162243, pp. 470-472. Id. at 473-475.

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The respondents in this case are the following: Alberto G. Romulo, as Executive Secretary, and Elisea Gozun, as Secretary of the Department of Environment and Natural Resources.
42

Records, Vol. 5, p. 1892. Id. at 1970. The 24 March 2003 Resolution reads in full: For the Courts resolution are petitioners twin motions, "Motion for Reconsideration" and "Motion for Inhibition" dated February 27, 2003. Anent the Motion for Inhibition, while the Court refutes the grounds relied upon by the petitioner in support of said move, for the peace of mind of the petitioner, the Court deems it proper to inhibit itself from taking cognizance of this case. For reason of propriety, the merits or demerits of petitioners "Motion for Reconsideration" will not be ruled upon and shall be left to be dealt with by the next Court. Accordingly, this Court INHIBITS, and let the expediente of this case be transmitted to the Executive Judge, through the Office of the Clerk of Court, RTC, QC, for re-raffle.

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45

Records, Vol. 4, pp. 1349-1575. The dispositive portion of the 10 February 2003 Order, reads: WHEREFORE, premises considered, the Motion for Reconsideration dated October 25, 2002 is hereby DENIED for utter lack of merit while the Motion for the Issuance of Writ of Mandamus and/or Writ of Mandatory Injunction is GRANTED. Accordingly, respondent DENR Secretary Heherson Alvarez, now substituted by Secretary Elisea Gozun, is hereby ordered: 1. to sign, execute and deliver the IFMA contract and/or documents to PICOP and issue the

46

corresponding IFMA assignment number on the area covered by the IFMA, formerly TLA No. 43, as amended; 2. to issue the necessary permit allowing petitioner to act and harvest timber from the said area of TLA No. 43, sufficient to meet the raw material requirements of petitioners pulp and paper mills in accordance with the warranty and agreement of July 29, 1969 between the government and PICOPs predecessor-ininterest; and 3. to honor and respect the Government Warranties and contractual obligations to PICOP strictly in accordance with the warranty and agreement dated July 29, 1999 (sic) between the government and PICOPs predecessor-in-interest (Exhibits "H", "H-1" to "H-5", particularly the following: a) The area coverage of TLA No. 43, which forms part and parcel of the government warranties; b) PICOP tenure over the said area of TLA No. 43 and exclusive right to cut, collect and remove sawtimber and pulpwood for the period ending on April 26, 1977; and said period renewable for [an]other 25 years subject to compliance with constitutional and statutory requirements as well as with existing policy on timber concessions; and c) The peaceful and adequate enjoyment by PICOP of the area as described and specified in the aforesaid amended Timber License Agreement No. 43. (Records, Vol. 4, pp. 1374-1375.)
47

Records, Vol. 2, p. 611. Rollo of G.R. No. 171875, pp. 272-275. Id. at 276-282. Id. at 294-298. Id. at 299-339. Rollo of G.R. No. 162243, pp. 229-258. Id. at 257. Rollo of G.R. No. 164516, pp. 107-119. Id. at 121-122. Rollo of G.R. No. 171875, pp. 340-341. Id. at 67-72. Id. at 72. Id. at 73-78. Id. at 8-66.

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Id. at 344.

The DENR Secretarys statement of the issues in its G.R. No. 162243 Memorandum mistakenly interchanged the two laws:
62

"WHETHER REPUBLIC ACT NO. 8975 HAS BEEN PARTLY REPEALED BY PRESIDENTIAL DECREE NO. 605"
63

Rollo of G.R. No. 162243, pp. 1013-1015. Rollo of G.R. No. 164516, p. 646. Rollo of G.R. No. 171875, pp. 42 and 46. DENR Secretarys Memorandum, rollo of G.R. No. 162243, p. 54.

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Executive Order No. 192, otherwise known as the "Reorganization Act of the Department of Environment and Natural Resources," Section 4.
68

Rollo of G.R. No. 162243, pp. 243-244. Sta. Clara Homeowners Association v. Spouses Gaston, 425 Phil. 221, 227 (2002). DENR Secretarys Memorandum, rollo of G.R. No. 162243, p. 61.

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The Court of Appeals cites Aquino-Sarmiento v. Morato, G.R. No. 92541, 13 November 1991, 203 SCRA 515, 520-521; Pagara v. Court of Appeals, 325 Phil. 66, 81 (1996).
72

Rollo of G.R. No. 162243, pp. 245-246. Id. at 246-247. Id. at 255-256.

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Phil. Const. Section 26(1), Art. VI: "Every bill passed by Congress shall embrace only one subject which shall be expressed in the title thereof."
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Consequently, in these cases, the prohibition against temporary restraining orders, preliminary injunctions and preliminary mandatory injunctions apply in cases instituted by a private party. The prohibition shall not apply when the matter is of extreme urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable injury will arise. The applicant should then file a bond, in an amount to be fixed by the court, which bond shall accrue in favor of the government if the court should finally decide that the applicant was not entitled to the relief sought (Republic Act No. 8975, Section 3, par. 2).
77

G.R. No. 42380, 22 June 1990, 186 SCRA 704, 712. G.R. No. 155108, 27 April 2005, 457 SCRA 400, 420-421. Republic v. Nolasco, id. at 420-421.

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Rollo of G.R. No. 162243, pp. 253-254. Oposa v. Factoran, Jr., G.R. No. 101083, 30 July 1993, 224 SCRA 792, 811. Id. at 811-812. 210 Phil. 244 (1983). G.R. No. 79538, 18 October 1990, 190 SCRA 673, 684. PICOPs Comment, pp. 3-4, rollo of G.R. No. 162243. PICOPs Petition for Mandamus, pp. 1-38. Gonzalo Sy Trading v. Central Bank, G.R. No. L-41480, 30 April 1976, 70 SCRA 570, 580. Rollo of G.R. No. 162243, pp. 248-252. Exhibit O-2-D, Folder of Exhibits, Volume 2, p. 177; Exhibit 7-g-1-a, Folder of Exhibits, Vol. 3, p. 476. Exhibit 7-g-2, Folder of Exhibits, Vol. 3, pp. 480-482. Folder of Exhibits, Vol. 3, pp. 433-434. Exhibit 6, Folder of Exhibits, Vol. 3, p. 440. Id. Id. TSN, 1 October 2002, pp. 13-14. Rollo of G.R. No. 162243, p. 252. Folder of Exhibits, Vol. 2, pp. 398-399. Exhibit NN, Folder of Exhibits, Vol. 2, p. 349. Records, Vol. 2, pp. 457-458. See Rules of Court, Rule 130, Section 3(a). Luciano v. Estrella, 145 Phil. 454, 461 (1970). Oposa v. Factoran, Jr., supra note 81 at 812; Tan v. Director of Forestry, supra note 83 at 325. Cebu Portland Cement Co. v. Municipality of Naga, 133 Phil. 695, 699 (1968). Republic Act No. 8371, Section 3(c):

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G.R. No. 135385, 6 December 2000, 347 SCRA 129, 238, Separate Opinion of Justice Reynato Puno. Folder of Exhibits, Exhibit O-1, Vol. 2, p. 176; Exhibit 7-g, Vol. 3, p. 475. Id., Exhibit 7-g, Vol. 3, p. 474. Id., Exhibit OO, Vol. 2, p. 351. Rollo of G.R. No. 162243, p. 230.

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107

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JMM Promotions and Management v. Court of Appeals, 439 Phil. 1, 10-11 (2002); Calvo v. Bernardito, 423 Phil. 939, 947 (2001).
111

Rollo of G.R. No. 162243, p. 426. Id. at 1018. Id. at 599. Id. at 1246. Sotto v. Commission on Elections, 76 Phil. 516, 522 (1946). Petition in Oposa v. Factoran, Jr., supra note 81.

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The Lawphil Project - Arellano Law Foundation

G.R. No. 162243

December 3, 2009

HON. HEHERSON ALVAREZ substituted by HON. ELISEA G. GOZUN, in her capacity as Secretary of the Department of Environment and Natural Resources, Petitioner, vs. PICOP RESOURCES, INC., Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 164516 PICOP RESOURCES, INC., Petitioner, vs. HON. HEHERSON ALVAREZ substituted by HON. ELISEA G. GOZUN, in her capacity as Secretary of the Department of Environment and Natural Resources Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 171875 THE HON. ANGELO T. REYES (formerly Hon. Elisea G. Gozun), in his capacity as Secretary of the Department of Environment and Natural Resources (DENR), Petitioner, vs. PAPER INDUSTRIES CORP. OF THE PHILIPPINES (PICOP), Respondent. RESOLUTION CHICO-NAZARIO, J.: The cause of action of PICOP Resources, Inc. (PICOP) in its Petition for Mandamus with the trial court is clear: the government is bound by contract, a 1969 Document signed by then President Ferdinand Marcos, to enter into an Integrated Forest Management Agreement (IFMA) with PICOP. Since the remedy of mandamus lies only to compel an officer to perform a ministerial duty, and since the 1969 Document itself has a proviso requiring compliance with the laws and the Constitution, the issues in this Motion for Reconsideration are the following: (1) firstly, is the 1969 Document a contract enforceable under the Non-Impairment Clause of the Constitution, so as to make the signing of the IFMA a ministerial duty? (2) secondly, did PICOP comply with all the legal and constitutional requirements for the issuance of an IFMA? To recall, PICOP filed with the Department of Environment and Natural Resources (DENR) an application to have its Timber License Agreement (TLA) No. 43 converted into an IFMA. In the middle of the processing of PICOPs application, however, PICOP refused to attend further meetings with the DENR. Instead, on 2 September 2002, PICOP filed before the Regional Trial Court (RTC) of Quezon City a Petition for Mandamus1 against then DENR Secretary Heherson T. Alvarez. PICOP seeks the issuance of a privileged writ of mandamus to compel the DENR Secretary to sign, execute and deliver an IFMA to PICOP, as well as to [I]ssue the corresponding IFMA assignment number on the area covered by the IFMA, formerly TLA No. 43, as amended; b) to issue the necessary permit allowing petitioner to act and harvest timber

from the said area of TLA No. 43, sufficient to meet the raw material requirements of petitioners pulp and paper mills in accordance with the warranty and agreement of July 29, 1969 between the government and PICOPs predecessor-in-interest; and c) to honor and respect the Government Warranties and contractual obligations to PICOP strictly in accordance with the warranty and agreement dated July 29, [1969] between the government and PICOPs predecessor-in-interest. x x x.2 On 11 October 2002, the RTC rendered a Decision granting PICOPs Petition for Mandamus, thus: WHEREFORE, premises considered, the Petition for Mandamus is hereby GRANTED. The Respondent DENR Secretary Hon. Heherson Alvarez is hereby ordered: 1. to sign, execute and deliver the IFMA contract and/or documents to PICOP and issue the corresponding IFMA assignment number on the area covered by the IFMA, formerly TLA No. 43, as amended; 2. to issue the necessary permit allowing petitioner to act and harvest timber from the said area of TLA No. 43, sufficient to meet the raw material requirements of petitioners pulp and paper mills in accordance with the warranty and agreement of July 29, 1969 between the government and PICOPs predecessor-in-interest; and 3. to honor and respect the Government Warranties and contractual obligations to PICOP strictly in accordance with the warranty and agreement dated July 29, 1999 (sic) between the government and PICOPs predecessor-in-interest (Exhibits "H", "H-1" to "H-5", particularly the following: a) the area coverage of TLA No. 43, which forms part and parcel of the government warranties; b) PICOP tenure over the said area of TLA No. 43 and exclusive right to cut, collect and remove sawtimber and pulpwood for the period ending on April 26, 1977; and said period to be renewable for [an]other 25 years subject to compliance with constitutional and statutory requirements as well as with existing policy on timber concessions; and c) The peaceful and adequate enjoyment by PICOP of the area as described and specified in the aforesaid amended Timber License Agreement No. 43. The Respondent Secretary Alvarez is likewise ordered to pay petitioner the sum of P10 million a month beginning May 2002 until the conversion of TLA No. 43, as amended, to IFMA is formally effected and the harvesting from the said area is granted.3 On 25 October 2002, the DENR Secretary filed a Motion for Reconsideration.4 In a 10 February 2003 Order, the RTC denied the DENR Secretarys Motion for Reconsideration and granted PICOPs Motion for the Issuance of Writ of Mandamus and/or Writ of Mandatory Injunction.5 The fallo of the 11 October 2002 Decision was practically copied in the 10 February 2003 Order, although there was no mention of the damages imposed against then DENR Secretary Alvarez.6 The DENR Secretary filed a Notice of Appeal7 from the 11 October 2002 Decision and the 10 February 2003 Order.

On 19 February 2004, the Seventh Division of the Court of Appeals affirmed8 the Decision of the RTC, to wit: WHEREFORE, the appealed Decision is hereby AFFIRMED with modification that the order directing then DENR Secretary Alvarez "to pay petitioner-appellee the sum of P10 million a month beginning May, 2002 until the conversion to IFMA of TLA No. 43, as amended, is formally effected and the harvesting from the said area is granted" is hereby deleted. 9 Challenging the deletion of the damages awarded to it, PICOP filed a Motion for Partial Reconsideration10 of this Decision, which was denied by the Court of Appeals in a 20 July 2004 Resolution.11 The DENR Secretary and PICOP filed with this Court separate Petitions for Review of the 19 February 2004 Court of Appeals Decision. These Petitions were docketed as G.R. No. 162243 and No. 164516, respectively. These cases were consolidated with G.R. No. 171875, which relates to the lifting of a Writ of Preliminary Injunction enjoining the execution pending appeal of the foregoing Decision. On 29 November 2006, this Court rendered the assailed Decision on the Consolidated Petitions: WHEREFORE, the Petition in G.R. No. 162243 is GRANTED. The Decision of the Court of Appeals insofar as it affirmed the RTC Decision granting the Petition for Mandamus filed by Paper Industries Corp. of the Philippines (PICOP) is hereby REVERSED and SET ASIDE. The Petition in G.R. No. 164516 seeking the reversal of the same Decision insofar as it nullified the award of damages in favor of PICOP is DENIED for lack of merit. The Petition in G.R. No. 171875, assailing the lifting of the Preliminary Mandatory Injunction in favor of the Secretary of Environment and Natural Resources is DISMISSED on the ground of mootness.12 On 18 January 2006, PICOP filed the instant Motion for Reconsideration, based on the following grounds: I. THE HONORABLE COURT ERRED IN HOLDING THAT THE CONTRACT WITH PRESIDENTIAL WARRANTY SIGNED BY THE PRESIDENT OF THE REPUBLIC ON 29 JUNE 1969 ISSUED TO PICOP IS A MERE PERMIT OR LICENSE AND IS NOT A CONTRACT, PROPERTY OR PROPERTY RIGHT PROTECTED BY THE DUE PROCESS CLAUSE OF THE CONSTITUTION II. THE EVALUATION OF PICOPS MANAGEMENT OF THE TLA 43 NATURAL FOREST CLEARLY SHOWED SATISFACTORY PERFORMANCE FOR KEEPING THE NATURAL FOREST GENERALLY INTACT AFTER 50 YEARS OF FOREST OPERATIONS. THIS COMPLETES THE REQUIREMENT FOR AUTOMATIC CONVERSION UNDER SECTION 9 OF DAO 99-53. III. WITH DUE RESPECT, THE HONORABLE COURT, IN REVERSING THE FINDINGS OF FACTS OF THE TRIAL COURT AND THE COURT OF APPEALS, MISAPPRECIATED THE EVIDENCE, TESTIMONIAL AND DOCUMENTARY, WHEN IT RULED THAT:

i. PICOP FAILED TO SUBMIT A FIVE-YEAR FOREST PROTECTION PLAN AND A SEVEN-YEAR REFORESTATION PLAN FOR THE YEARS UNDER REVIEW. ii. PICOP FAILED TO COMPLY WITH THE PAYMENT OF FOREST CHARGES. iii. PICOP DID NOT COMPLY WITH THE REQUIREMENT FOR A CERTIFICATION FROM THE NCIP THAT THE AREA OF TLA 43 DOES NOT OVERLAP WITH ANY ANCESTRAL DOMAIN. iv. PICOP FAILED TO HAVE PRIOR CONSULTATION WITH AND APPROVAL FROM THE SANGUNIAN CONCERNED, AS REQUIRED BY SECTION 27 OF THE REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991. v. PCIOP FAILED TO SECURE SOCIAL ACCEPTABILITY UNDER PRESIDENTIAL DECREE NO. 1586. IV THE MOTIVATION OF ALVAREZ IN RECALLING THE CLEARANCE FOR AUTOMATIC CONVERSION HE ISSUED ON 25 OCTOBER 2001 WAS NOT DUE TO ANY SHORTCOMING FROM PICOP BUT DUE TO HIS DETERMINATION TO EXCLUDE 28,125 HECTARES FROM THE CONVERSION AND OTHER THINGS. On 15 December 2008, on Motion by PICOP, the Third Division of this Court resolved to refer the consolidated cases at bar to the Court en banc. On 16 December 2008, this Court sitting en banc resolved to accept the said cases and set them for oral arguments. Oral arguments were conducted on 10 February 2009. PICOPs Cause of Action: Matters PICOP Should Have Proven to Be Entitled to a Writ of Mandamus In seeking a writ of mandamus to compel the issuance of an IFMA in its favor, PICOP relied on a 29 July 1969 Document, the so-called Presidential Warranty approved by then President Ferdinand E. Marcos in favor of PICOPs predecessor-in-interest, Bislig Bay Lumber Company, Inc. (BBLCI). PICOPs cause of action is summarized in paragraphs 1.6 and 4.19 of its Petition for Mandamus: 1.6 Respondent Secretary impaired the obligation of contract under the said Warranty and Agreement of 29 July 1969 by refusing to respect the tenure; and its renewal for another twenty five (25) years, of PICOP over the area covered by the said Agreement which consists of permanent forest lands with an aggregate area of 121,587 hectares and alienable and disposable lands with an aggregate area of approximately 21,580 hectares, and petitioners exclusive right to cut, collect and remove sawtimber and pulpwood therein and the peaceful and adequate enjoyment of the said area

as described and specified in petitioners Timber License Agreement (TLA) No. 43 guaranteed by the Government, under the Warranty and Agreement of 29 July 1969.13 4.19 Respondent is in violation of the Constitution and has impaired the obligation of contract by his refusal to respect: a) the tenurial rights of PICOP over the forest area covered by TLA No. 43, as amended and its renewal for another twenty five (25) years; b) the exclusive right of PICOP to cut, collect and remove sawtimber and pulpwood therein; and c) PICOPs peaceful and adequate enjoyment of the said area which the government guaranteed under the Warranty and Agreement of 29 July 1969.14 The grounds submitted by PICOP in its Petition for Mandamus are as follows: I Respondent secretary has unlawfully refused and/or neglected to sign and execute the IFMA contract of PICOP even as the latter has complied with all the legal requirements for the automatic conversion of TLA No. 43, as amended, into an IFMA. II Respondent Secretary acted with grave abuse of discretion and/or in excess of jurisdiction in refusing to sign and execute PICOPs IFMA contract, notwithstanding that PICOP had complied with all the requirements for Automatic Conversion under DAO 99-53, as in fact Automatic Conversion was already cleared in October, 2001, and was a completed process. III Respondent Secretary has impaired the obligation of contract under a valid and binding warranty and agreement of 29 July 1969 between the government and PICOPs predecessor-in-interest, by refusing to respect: a) the tenure of PICOP, and its renewal for another twenty five (25) years, over the TLA No.43 area covered by said agreement; b) the exclusive right to cut, collect and remove sawtimber and pulpwood timber; and c) the peaceful and adequate enjoyment of the said area. IV As a result of respondent Secretarys unlawful refusal and/or neglect to sign and deliver the IFMA contract, and violation of the constitutional rights of PICOP against non-impairment of the obligation of contract (Sec. 10, Art. III, 1997 [sic] Constitution), PICOP suffered grave and irreparable damages.15 Petitions for Mandamus are governed by Rule 65 of the Rules of Court, Section 3 of which provides: SEC. 3. Petition for mandamus.When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent. (Emphasis supplied.)

PICOP is thus asking this Court to conclude that the DENR Secretary is specifically enjoined by law to issue an IFMA in its favor. An IFMA, as defined by DENR Administrative Order (DAO) No. 9953,16 is [A] production-sharing contract entered into by and between the DENR and a qualified applicant wherein the DENR grants to the latter the exclusive right to develop, manage, protect and utilize a specified area of forestland and forest resource therein for a period of 25 years and may be renewed for another 25-year period, consistent with the principle of sustainable development and in accordance with an approved CDMP, and under which both parties share in its produce.17 PICOP stresses the word "automatic" in Section 9 of this DAO No. 99-53: Sec. 9. Qualifications of Applicants. The applicants for IFMA shall be: (a) A Filipino citizen of legal age; or, (b) Partnership, cooperative or corporation whether public or private, duly registered under Philippine laws. However, in the case of application for conversion of TLA into IFMA, an automatic conversion after proper evaluation shall be allowed, provided the TLA holder shall have signified such intention prior to the expiry of the TLA, PROVIDED further, that the TLA holder has showed satisfactory performance and have complied in the terms of condition of the TLA and pertinent rules and regulations. (Emphasis supplied.)18 This administrative regulation provision allowing automatic conversion after proper evaluation can hardly qualify as a law, much less a law specifically enjoining the execution of a contract. To enjoin is "to order or direct with urgency; to instruct with authority; to command."19 "Enjoin is a mandatory word, in legal parlance, always; in common parlance, usually."20 The word "allow," on the other hand, is not equivalent to the word "must," and is in no sense a command.21 As an extraordinary writ, the remedy of mandamus lies only to compel an officer to perform a ministerial duty, not a discretionary one; mandamus will not issue to control the exercise of discretion of a public officer where the law imposes upon him the duty to exercise his judgment in reference to any manner in which he is required to act, because it is his judgment that is to be exercised and not that of the court.22 The execution of agreements, in itself, involves the exercise of discretion. Agreements are products of negotiations and mutual concessions, necessitating evaluation of their provisions on the part of both parties. In the case of the IFMA, the evaluation on the part of the government is specifically mandated in the afore-quoted Section 3 of DAO No. 99-53. This evaluation necessarily involves the exercise of discretion and judgment on the part of the DENR Secretary, who is tasked not only to negotiate the sharing of the profit arising from the IFMA, but also to evaluate the compliance with the requirements on the part of the applicant. Furthermore, as shall be discussed later, the period of an IFMA that was merely automatically converted from a TLA in accordance with Section 9, paragraph 2 of DAO No. 99-53 would only be for the remaining period of the TLA. Since the TLA of PICOP expired on 26 April 2002, the IFMA that could have been granted to PICOP via the automatic conversion provision in DAO No. 99-53 would have expired on the same date, 26 April 2002, and the PICOPs Petition for Mandamus would have become moot.

This is where the 1969 Document, the purported Presidential Warranty, comes into play. When PICOPs application was brought to a standstill upon the evaluation that PICOP had yet to comply with the requirements for such conversion, PICOP refused to attend further meetings with the DENR and instead filed a Petition for Mandamus, insisting that the DENR Secretary had impaired the obligation of contract by his refusal to respect: a) the tenurial rights of PICOP over the forest area covered by TLA No. 43, as amended, and its renewal for another twenty-five (25) years; b) the exclusive right of PICOP to cut, collect and remove sawtimber and pulpwood therein; and c) PICOPs peaceful and adequate enjoyment of the said area which the government guaranteed under the Warranty and Agreement of 29 July 1969. 23 PICOP is, thus, insisting that the government is obligated by contract to issue an IFMA in its favor because of the 1969 Document. A contract, being the law between the parties, can indeed, with respect to the State when it is a party to such contract, qualify as a law specifically enjoining the performance of an act. Hence, it is possible that a writ of mandamus may be issued to PICOP, but only if it proves both of the following: 1) That the 1969 Document is a contract recognized under the non-impairment clause; and 2) That the 1969 Document specifically enjoins the government to issue the IFMA. If PICOP fails to prove any of these two matters, the grant of a privileged writ of mandamus is not warranted. This was why we pronounced in the assailed Decision that the overriding controversy involved in the Petition was one of law.24 If PICOP fails to prove any of these two matters, more significantly its assertion that the 1969 Document is a contract, PICOP fails to prove its cause of action.25 Not even the satisfactory compliance with all legal and administrative requirements for an IFMA would save PICOPs Petition for Mandamus. The reverse, however, is not true. The 1969 Document expressly states that the warranty as to the tenure of PICOP is "subject to compliance with constitutional and statutory requirements as well as with existing policy on timber concessions." Thus, if PICOP proves the two above-mentioned matters, it still has to prove compliance with statutory and administrative requirements for the conversion of its TLA into an IFMA. Exhaustion of Administrative Remedies PICOP uses the same argument that the government is bound by contract to issue the IFMA in its refusal to exhaust all administrative remedies by not appealing the alleged illegal non-issuance of the IFMA to the Office of the President. PICOP claimed in its Petition for Mandamus with the trial court that: 1.10 This petition falls as an exception to the exhaustion of administrative remedies. The acts of respondent DENR Secretary complained of in this petition are patently illegal; in derogation of the constitutional rights of petitioner against non-impairment of the obligation of contracts; without jurisdiction, or in excess of jurisdiction or so capriciously as to constitute an abuse of discretion amounting to excess or lack of jurisdiction; and moreover, the failure or refusal of a high government official such as a Department head from whom relief is brought to act on the matter was considered equivalent to exhaustion of administrative remedies (Sanoy v. Tantuico, 50 SCRA 455 [1973]), and there are compelling and urgent reasons for judicial intervention (Bagatsing v. Ramirez, 74 SCRA 306 [1976]).

Thus, if there has been no impairment of the obligation of contracts in the DENR Secretarys nonissuance of the IFMA, the proper remedy of PICOP in claiming that it has complied with all statutory and administrative requirements for the issuance of the IFMA should have been with the Office of the President. This makes the issue of the enforceability of the 1969 Document as a contract even more significant. The Nature and Effects of the Purported 29 July 1969 Presidential Warranty Base Metals Case PICOP challenges our ruling that the 1969 Document is not a contract. Before we review this finding, however, it must be pointed out that one week after the assailed Decision, another division of this Court promulgated a Decision concerning the very same 1969 Document. Thus, in PICOP Resources, Inc. v. Base Metals Mineral Resources Corporation,26 five other Justices who were still unaware of this Divisions Decision,27 came up with the same conclusion as regards the same issue of whether former President Marcoss Presidential Warranty is a contract: Finally, we do not subscribe to PICOPs argument that the Presidential Warranty dated September 25, 1968 is a contract protected by the non-impairment clause of the 1987 Constitution. An examination of the Presidential Warranty at once reveals that it simply reassures PICOP of the governments commitment to uphold the terms and conditions of its timber license and guarantees PICOPs 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 be considered a contract distinct from PTLA No. 47 and FMA No. 35. We agree with the OSGs position that it is merely a collateral undertaking which cannot amplify PICOPs rights under its timber license. Our definitive ruling in Oposa v. Factoran that a timber license is not a contract within the purview of the non-impairment clause is edifying. We declared: Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protected by the due process clause of the Constitution. In Tan vs. Director of Forestry, this Court held: "x x x A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is only a license or a privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in this case. A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it a property or a property right, nor does it create a vested right; nor is it taxation' (C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights, neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576). x x x" We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: "x x x Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources to the end that public welfare is

promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302]." Since timber licenses are not contracts, the non-impairment clause, which reads: "SEC. 10. No law impairing 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 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.28 The Motion for Reconsideration was denied with finality on 14 February 2007. A Second Motion for Reconsideration filed by PICOP was denied on 23 May 2007. PICOP insists that the pronouncement in Base Metals is a mere obiter dictum, which would not bind this Court in resolving this Motion for Reconsideration. In the oral arguments, however, upon questioning from the ponente himself of Base Metals, it was agreed that the issue of whether the 1969 Document is a contract was necessary in the resolution of Base Metals: JUSTICE TINGA: And do you confirm that one of the very issues raised by PICOP in that case [PICOP Resources Inc. v. Base Metal Mineral Resources Corporation] revolves around its claim that a Presidential Warranty is protected by the non-impairment c[l]ause of the Constitution. ATTY. AGABIN: Yes, I believe that statement was made by the Court, your Honor. JUSTICE TINGA: Yes. And that claim on the part of PICOP necessarily implies that the Presidential Warranty according to PICOP is a contract protected by the non-impairment clause. ATTY. AGABIN: Yes, Your Honor. JUSTICE TINGA: Essentially, the PICOP raised the issue of whether the Presidential Warranty is a contract or not.

ATTY. AGABIN: Yes, Your Honor. JUSTICE TINGA: And therefore any ruling on the part of the Court on that issue could not be an obiter dictum. ATTY. AGABIN: Your Honor, actually we believe that the basic issue in that case was whether or not Base Metals could conduct mining activities underneath the forest reserve allotted to PICOP and the Honorable Court ruled that the Mining Act of 1995 as well as the Department Order of DENR does not disallow mining activity under a forest reserve. JUSTICE TINGA: But it was PICOP itself which raised the claim that a Presidential Warranty is a contract. And therefore be, should be protected on the under the non-impairment clause of the Constitution. ATTY. AGABIN: Yes, Your Honor. Except that JUSTICE TINGA: So, how can you say now that the Court merely uttered, declared, laid down an obiter dictum in saying that the Presidential Warranty is not a contract, and it is not being a contract, it is not prohibited by the non-impairment clause. ATTY. AGABIN: This Honorable Court could have just ruled, held that the mining law allows mining activities under a forest reserve without deciding on that issue that was raised by PICOP, your Honor, and therefore we believe. JUSTICE TINGA: It could have been better if PICOP has not raised that issue and had not claimed that the Presidential Warranty is not a contract. ATTY. AGABIN: Well, that is correct, your Honor except that the Court could have just avoided that question. Because JUSTICE TINGA: Why[?]

ATTY. AGABIN: It already settled the issue, the basic issue. JUSTICE TINGA: Yes, because the Court in saying that merely reiterated a number of rulings to the effect that the Presidential Warranty, a Timber License for that matter is not a contract protected by the nonimpairment laws. ATTY. AGABIN: Well, it is our submission, your Honor, that it is obiter because, that issue even a phrase by PICOP was not really fully argued by the parties for the Honorable Court and it seems from my reading at least it was just an aside given by the Honorable Court to decide on that issue raised by PICOP but it was not necessary to the decision of the court. JUSTICE TINGA: It was not necessary[?] ATTY. AGABIN: To the decision of the Court. JUSTICE TINGA: It was. ATTY. AGABIN: It was not necessary. JUSTICE TINGA: It was. ATTY. AGABIN: Yes. JUSTICE TINGA: And PICOP devoted quite a number of pages in [its] memorandum to that issue and so did the Court [in its Decision]. ATTY. AGABIN: Anyway, your Honor, we beg the Court to revisit, not to29

Interpretation of the 1969 Document That Would Be in Harmony with the Constitution To remove any doubts as to the contents of the 1969 Document, the purported Presidential Warranty, below is a complete text thereof: Republic of the Philippines Department of Agriculture and Natural Resources OFFICE OF THE SECRETARY Diliman, Quezon City D-53, Licenses (T.L.A. No. 43) Bislig Bay Lumber Co., Inc. (Bislig, Surigao) July 29, 1969 Bislig Bay Lumber Co., Inc. [unreadable word] Bldg. Makati, Rizal S i r s: This has reference to the request of the Board of Investments through its Chairman in a letter dated July 16, 1969 for a warranty on the boundaries of your concession area under Timber License Agreement No. 43, as amended. We are made to understand that your company is committed to support the first large scale integrated wood processing complex hereinafter called: "The Project") and that such support will be provided not only in the form of the supply of pulpwood and other wood materials from your concession but also by making available funds generated out of your own operations, to supplement PICOPs operational sources of funds and other financial arrangements made by him . In order that your company may provide such support effectively, it is understood that you will call upon your stockholders to take such steps as may be necessary to effect a unification of managerial, technical, economic and manpower resources between your company and PICOP. It is in the public interest to promote industries that will enhance the proper conservation of our forest resources as well as insure the maximum utilization thereof to the benefit of the national economy. The administration feels that the PICOP project is one such industry which should enjoy priority over the usual logging operations hitherto practiced by ordinary timber licensees: For this reason, we are pleased to consider favorably the request. We confirm that your Timber License Agreement No. 43, as amended (copy of which is attached as Annex "A" hereof which shall form part and parcel of this warranty) definitely establishes the boundary lines of your concession area which consists of permanent forest lands with an aggregate area of 121,587 hectares and alienable or disposable lands with an aggregate area of approximately 21,580 hectares. We further confirm that your tenure over the area and exclusive right to cut, collect and remove sawtimber and pulpwood shall be for the period ending on April 26, 1977; said period to be renewable for other 25 years subject to compliance with constitutional and statutory requirements as well as with existing policy on timber concessions.

The peaceful and adequate enjoyment by you of your area as described and specified in your aforesaid amended Timber License Agreement No. 43 is hereby warranted provided that pertinent laws, regulations and the terms and conditions of your license agreement are observed. Very truly yours, (Sgd.) FERNANDO LOPEZ Secretary of Agriculture and Natural Resources Encl.: RECOMMENDED BY: (Sgd.) JOSE VIADO Acting Director of Forestry APPROVED: (Sgd.) FERDINAND E. MARCOS President of the Philippines ACCEPTED: BISLIG BAY LBR. CO., INC. By: (Sgd.) JOSE E. SORIANO President PICOP interprets this document in the following manner: 6.1 It is clear that the thrust of the government warranty is to establish a particular area defined by boundary lines of TLA No. 43 for the PICOP Project. In consideration for PICOPs commitment to pursue and establish the project requiring huge investment/funding from stockholders and lending institutions, the government provided a warranty that ensures the continued and exclusive right of PICOP to source its raw materials needs from the forest and renewable trees within the areas established. 6.2 As a long-term support, the warranty covers the initial twenty five (25) year period and is renewable for periods of twenty five (25) years provided the project continues to exist and operate. Very notably, the wording of the Presidential Warranty connotes that for as long as the holder complies with all the legal requirements, the term of the warranty is not limited to fifty (50) years but other twenty five (25) years. 6.3 Note must be made that the government warranted that PICOPs tenure over the area and exclusive right to cut, collect and remove saw timber and pulpwood shall be for the period ending on 26 April 1977 and said period to be renewable for other 25 years subject to "compliance with constitutional and statutory requirements as well as existing policy on timber requirements". It is clear that the renewal for other 25 years, not necessarily for another 25 years is guaranteed. This

explains why on 07 October 1977, TLA No. 43, as amended, was automatically renewed for another period of twenty five (25) years to expire on 26 April 2002.30 PICOPs interpretation of the 1969 Document cannot be sustained. PICOPs claim that the term of the warranty is not limited to fifty years, but that it extends to other fifty years, perpetually, violates Section 2, Article XII of the Constitution which provides: 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. Mr. Justice Dante O. Tingas interpretation of the 1969 Document is much more in accord with the laws and the Constitution. What one cannot do directly, he cannot do indirectly. Forest lands cannot be alienated in favor of private entities. Granting to private entities, via a contract, a permanent, irrevocable, and exclusive possession of and right over forest lands is tantamount to granting ownership thereof. PICOP, it should be noted, claims nothing less than having exclusive, continuous and uninterrupted possession of its concession areas,31 where all other entrants are illegal,32 and where so-called "illegal settlers and squatters" are apprehended.33 IFMAs are production-sharing agreements concerning the development and utilization of natural resources. As such, these 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." Any superior "contract" requiring the State to issue TLAs and IFMAs whenever they expire clearly circumvents Section 2, Article XII of the Constitution, which provides for the only permissible schemes wherein the full control and supervision of the State are not derogated: coproduction, joint venture, or production-sharing agreements within the time limit of twenty-five years, renewable for another twenty-five years. On its face, the 1969 Document was meant to expire on 26 April 2002, upon the expiration of the expected extension of the original TLA period ending on 26 April 1977: We further confirm that your tenure over the area and exclusive right to cut, collect and remove sawtimber and pulpwood shall be for the period ending on April 26, 1977; said period to be renewable for other 25 years subject to compliance with constitutional and statutory requirements as well as with existing policy on timber concessions.
1avvphi 1

Any interpretation extending the application of the 1969 Document beyond 26 April 2002 and any concession that may be granted to PICOP beyond the said date would violate the Constitution, and no amount of legal hermeneutics can change that. Attempts of PICOP to explain its way out of this Constitutional provision only led to absurdities, as exemplified in the following excerpt from the oral arguments: JUSTICE CARPIO:

The maximum trend of agreement to develop and utilize natural resources like forest products is 25 years plus another 25 years or a total of 50 years correct? ATTY. AGABIN Yes, Your Honor. JUSTICE CARPIO: That is true for the 1987, 1973, 1935 Constitution, correct? ATTY. AGABIN: Yes, Your Honor. JUSTICE CARPIO: The TLA here, TLA 43, expired, the first 25 years expired in 1977, correct? ATTY. AGABIN: Yes, Your Honor. JUSTICE CARPIO: And it was renewed for another 25 years until 2002, the 50th year? ATTY. AGABIN: Yes, Your Honor. JUSTICE CARPIO: Now, could PICOP before the end of the 50th year lets say in 2001, one year before the expiration, could it have asked for an extension of another 25 years of its TLA agreement[?] ATTY. AGABIN: I believe so, Your Honor. JUSTICE CARPIO: But the Constitution says, maximum of fifty years. How could you ask for another 25 years of its TLA. ATTY. AGABIN: Well, your Honor, we believe on a question like this, this Honorable Court should balance the interest.

JUSTICE CARPIO: The Constitution is very clear, you have only a maximum of 50 years, 25 plus another 25. PICOP could never have applied for an extension, for a third 25-year term whether under the 1935 Constitution, the 1973 Constitution and the 1987 Constitution, correct? ATTY. AGABIN: Your Honor, except that we are invoking the warranty, the terms of the warranty. JUSTICE CARPIO: Can the warranty prevail over the Constitution? ATTY. AGABIN: Well, it is a vested right, your Honor. JUSTICE CARPIO: Yes, but whatever it is, can it prevail over the Constitution? ATTY. AGABIN: The Constitution itself provides that vested rights should be . JUSTICE CARPIO: If it is not in violation of specific provision of the Constitution. The Constitution says, 25 years plus another 25 years, thats the end of it. You mean to say that a President of the Philippines can give somebody 1,000 years license? ATTY. AGABIN: Well, that is not our position, Your Honor. Because our position is that . JUSTICE CARPIO: My question is, what is the maximum term, you said 50 years. So, my next question is, can PICOP apply for an extension of another 25 years after 2002, the 50th year? ATTY. AGABIN: Yes, based on the contract of warranty, Your Honor, because the contract of warranty. JUSTICE CARPIO: But in the PICOP license it is very clear, it says here, provision 28, it says the license agreement is for a total of 50 years. I mean it is very simple, the President or even Congress cannot pass a law

extending the license, whatever kind of license to utilize natural resources for more than fifty year[s]. I mean even the law cannot do that. It cannot prevail over the Constitution. Is that correct, Counsel? ATTY. AGABIN: It is correct, Your Honor, except that in this case, what is actually our application is that the law provides for the conversion of existing TLA into IFMA. JUSTICE CARPIO: So, they file the petition for conversion before the end of the 50th year for IFMA. ATTY. AGABIN: Yes, Your Honor. JUSTICE CARPIO: But IFMA is the same, it is based on Section 2, Article 12 of the Constitution, develop and utilize natural resources because as you said when the new constitution took effect we did away with the old licensing regime, we have now co-production, a production sharing, joint venture, direct undertaking but still the same developing and utilizing the natural resources, still comes from section 2, Art. 12 of the Constitution. It is still a license but different format now. ATTY. AGABIN: It is correct, Your Honor, except that the regimes of joint venture, co-production and production sharing are what is referred to in the constitution, Your Honor, and still covered JUSTICE CARPIO: Yes, but it is covered by same 25 year[s], you mean to say people now can circumvent the 50 year maximum term by calling their TLA as IFMA and after fifty years calling it ISMA, after another 50 years call it MAMA. ATTY. AGABIN: Yes, Your Honor. Because JUSTICE CARPIO: It can be done. ATTY. AGABIN: That is provided for by the department itself.34 PICOP is, in effect, arguing that the DENR issued DAO No. 99-53 in order to provide a way to circumvent the provisions of the Constitution limiting agreements for the utilization of natural

resources to a maximum period of fifty years. Official duties are, however, disputably considered to be regularly performed,35 and good faith is always presumed. DAO No. 99-53 was issued to change the means by which the government enters into an agreement with private entities for the utilization of forest products. DAO No. 99-53 is a late response to the change in the constitutional provisions on natural resources from the 1973 Constitution, which allowed the granting of licenses to private entities,36 to the present Constitution, which provides for co-production, joint venture, or production-sharing agreements as the permissible schemes wherein private entities may participate in the utilization of forest products. Since the granting of timber licenses ceased to be a permissible scheme for the participation of private entities under the present Constitution, their operations should have ceased upon the issuance of DAO No. 99-53, the rule regulating the schemes under the present Constitution. This would be iniquitous to those with existing TLAs that would not have expired yet as of the issuance of DAO No. 99-53, especially those with new TLAs that were originally set to expire after 10 or even 20 or more years. The DENR thus inserted a provision in DAO No. 99-53 allowing these TLA holders to finish the period of their TLAs, but this time as IFMAs, without the rigors of going through a new application, which they have probably just gone through a few years ago. Such an interpretation would not only make DAO No. 99-53 consistent with the provisions of the Constitution, but would also prevent possible discrimination against new IFMA applicants: ASSOCIATE JUSTICE DE CASTRO: I ask this question because of your interpretation that the period of the IFMA, if your TLA is converted into IFMA, would cover a new a fresh period of twenty-five years renewable by another period of twenty-five years. DEAN AGABIN: Yes, Your Honor. ASSOCIATE JUSTICE DE CASTRO: Dont you think that will, in effect, be invidious discrimination with respect to other applicants if you are granted a fresh period of twenty-five years extendible to another twenty-five years? DEAN AGABIN: I dont think it would be, Your Honor, considering that the IFMA is different regime from the TLA. And not only that, there are considerations of public health and ecology which should come into play in this case, and which we had explained in our opening statement and, therefore the provision of the Constitution on the twenty-five limits for renewal of co-production, joint venture and production sharing agreements, should be balanced with other values stated in the Constitution, like the value of balanced ecology, which should be in harmony with the rhythm of nature, or the policy of forest preservation in Article XII, Section 14 of the Constitution. These are all important policy considerations which should be balanced against the term limits in Article II of the Constitution. ASSOCIATE JUSTICE DE CASTRO: The provision of this Administrative Order regarding automatic conversion may be reasonable, if, I want to know if you agree with me, if we limit this automatic conversion to the remaining period of

the TLA, because in that case there will be a valid ground to make a distinction between those with existing TLA and those who are applying for the first time for IFMA? DEAN AGABIN: Well, Your Honor, we beg to disagree, because as I said TLAs are completely different from IFMA. The TLA has no production sharing or co-production agreement or condition. All that the licensee has to do is, to pay forest charges, taxes and other impositions from the local and national government. On the other hand, the IFMAs contained terms and conditions which are completely different, and that they either impose co-production, production sharing or joint venture terms. So its a completely different regime, Your Honor. ASSOCIATE JUSTICE DE CASTRO: Precisely, that is the reason why there should be an evaluation of what you mentioned earlier of the development plan. DEAN AGABIN: Yes, Your Honor. ASSOCIATE JUSTICE DE CASTRO: So it will be reasonable to convert a TLA into an IFMA without considering the development plan submitted by other applicants or the development plan itself of one seeking conversion into IFMA if it will only be limited to the period, the original period of the TLA. But once you go beyond the period of the TLA, then you will be, the DENR is I think should evaluate the different proposals of the applicants if we are thinking of a fresh period of twenty-five years, and which is renewable under the Constitution by another twenty-five years. So the development plan will be important in this case, the submission of the development plan of the different applicants must be considered. So I dont understand why you mentioned earlier that the development plan will later on be a subject matter of negotiation between the IFMA grantee and the government. So it seems that it will be too late in the day to discuss that if you have already converted the TLA into IFMA or if the government has already granted the IFMA, and then it will later on study the development plan, whether it is viable or not, or it is sustainable or not, and whether the development plan of the different applicants are, are, which of the development plan of the different applicants is better or more advantageous to the government.37 PICOP insists that the alleged Presidential Warranty, having been signed on 29 July 1969, could not have possibly considered the limitations yet to be imposed by future issuances, such as the 1987 Constitution. However, Section 3, Article XVIII of said Constitution, provides: Section 3. All existing laws, decrees, executive orders, proclamations, letters of instructions, and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed, or revoked. In the recent case Sabio v. Gordon,38 we ruled that "(t)he clear import of this provision is that all existing laws, executive orders, proclamations, letters of instructions and other executive issuances inconsistent or repugnant to the Constitution are repealed."

When a provision is susceptible of two interpretations, "the one that will render them operative and effective and harmonious with other provisions of law"39 should be adopted. As the interpretations in the assailed Decision and in Mr. Justice Tingas ponencia are the ones that would not make the subject Presidential Warranty unconstitutional, these are what we shall adopt. Purpose of the 1969 Document: Assurance That the Boundaries of Its Concession Area Would Not Be Altered Despite the Provision in the TLA that the DENR Secretary Can Amend Said Boundaries In the assailed Decision, we ruled that the 1969 Document cannot be considered a contract that would bind the government regardless of changes in policy and the demands of public interest and social welfare. PICOP claims this conclusion "did not take into consideration that PICOP already had a valid and current TLA before the contract with warranty was signed in 1969."40 PICOP goes on: "The TLA is a license that equips any TLA holder in the country for harvesting of timber. A TLA is signed by the Secretary of the DANR now DENR. The Court ignored the significance of the need for another contract with the Secretary of the DANR but this time with the approval of the President of the Republic."41 PICOP then asks us: "If PICOP/BBLCI was only an ordinary TLA holder, why will it go through the extra step of securing another contract just to harvest timber when the same can be served by the TLA signed only by the Secretary and not requiring the approval of the President of the Republic(?)"42 The answer to this query is found in TLA No. 43 itself wherein, immediately after the boundary lines of TLA No. 43 were established, the following conditions were given: This license is granted to the said party of the second part upon the following express conditions: I. That authority is granted hereunder to the party of the second part43 to cut, collect or remove firewood or other minor forest products from the area embraced in this license agreement except as hereinafter provided. II. That the party of the first part44 may amend or alter the description of the boundaries of the area covered by this license agreement to conform with official surveys and that the decision of the party of the first part as to the exact location of the said boundaries shall be final. III. That if the party of the first part deems it necessary to establish on the ground the boundary lines of the area granted under this license agreement, the party of the second part shall furnish to the party of the first part or its representatives as many laborers as it needs and all the expenses to be incurred on the work including the wages of such laborers shall be paid by the party of the second part.45 Thus, BBLCI needed an assurance that the boundaries of its concession area, as established in TLA No. 43, as amended, would not be altered despite this provision. Hence, BBLCI endeavored to obtain the 1969 Document, which provides: We confirm that your Timber License Agreement No. 43, as amended (copy of which is attached as Annex "A" hereof which shall form part and parcel of this warranty) definitely establishes the boundary lines of your concession area which consists of permanent forest lands with an aggregate area of 121,587 hectares and alienable or disposable lands with an aggregate area of approximately 21,580 hectares. We further confirm that your tenure over the area and exclusive right to cut, collect and remove sawtimber and pulpwood shall be for the period ending on April 26, 1977; said period to be

renewable for other 25 years subject to compliance with constitutional and statutory requirements as well as with existing policy on timber concessions. The peaceful and adequate enjoyment by you of your area as described and specified in your aforesaid amended Timber License Agreement No. 43 is hereby warranted provided that pertinent laws, regulations and the terms and conditions of your license agreement are observed.46 In Koa v. Court of Appeals,47 we ruled that a warranty is a collateral undertaking and is merely part of a contract. As a collateral undertaking, it follows the principal wherever it goes. When this was pointed out by the Solicitor General, PICOP changed its designation of the 1969 Document from "Presidential Warranty" or "government warranty" in all its pleadings prior to our Decision, to "contract with warranty" in its Motion for Reconsideration. This, however, is belied by the statements in the 29 July 1969 Document, which refers to itself as "this warranty." Re: Allegation That There Were Mutual Contract Considerations Had the 29 July 1969 Document been intended as a contract, it could have easily said so. More importantly, it could have clearly defined the mutual considerations of the parties thereto. It could have also easily provided for the sanctions for the breach of the mutual considerations specified therein. PICOP had vigorously argued that the 1969 Document was a contract because of these mutual considerations, apparently referring to the following paragraph of the 1969 Document: We are made to understand that your company is committed to support the first large scale integrated wood processing complex hereinafter called: "The Project") and that such support will be provided not only in the form of the supply of pulpwood and other wood materials from your concession but also by making available funds generated out of your own operations, to supplement PICOPs operational surces (sic) of funds and other financial arrangements made by him. In order that your company may provide such support effectively, it is understood that you will call upon your stockholders to take such steps as may be necessary to effect a unification of managerial, technical, economic and manpower resources between your company and PICOP.
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This provision hardly evinces a contract consideration (which, in PICOPs interpretation, is in exchange for the exclusive and perpetual tenure over 121,587 hectares of forest land and 21,580 hectares of alienable and disposable lands). As elucidated by PICOP itself in bringing up the Investment Incentives Act which we shall discuss later, and as shown by the tenor of the 1969 Document, the latter document was more of a conferment of an incentive for BBLCIs investment rather than a contract creating mutual obligations on the part of the government, on one hand, and BBLCI, on the other. There was no stipulation providing for sanctions for breach if BBLCIs being "committed to support the first large scale integrated wood processing complex" remains a commitment. Neither did the 1969 Document give BBLCI a period within which to pursue this commitment. According to Article 1350 of the Civil Code, "(i)n onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other."48 Private investments for ones businesses, while indeed eventually beneficial to the country and deserving to be given incentives, are still principally and predominantly for the benefit of the investors. Thus, the "mutual" contract considerations by both parties to this alleged contract would be both for the benefit of one of the parties thereto, BBLCI, which is not obligated by the 1969 Document to surrender a share in its proceeds any more than it is already required by its TLA and by the tax laws. PICOPs argument that its investments can be considered as contract consideration derogates the rule that "a license or a permit is not a contract between the sovereignty and the licensee or

permittee, and is not a property in the constitutional sense, as to which the constitutional proscription against the impairment of contracts may extend." All licensees obviously put up investments, whether they are as small as a tricycle unit or as big as those put up by multi-billion-peso corporations. To construe these investments as contract considerations would be to abandon the foregoing rule, which would mean that the State would be bound to all licensees, and lose its power to revoke or amend these licenses when public interest so dictates. The power to issue licenses springs from the States police power, known as "the most essential, insistent and least limitable of powers, extending as it does to all the great public needs."49 Businesses affecting the public interest, such as the operation of public utilities and those involving the exploitation of natural resources, are mandated by law to acquire licenses. This is so in order that the State can regulate their operations and thereby protect the public interest. Thus, while these licenses come in the form of "agreements," e.g., "Timber License Agreements," they cannot be considered contracts under the non-impairment clause.50 PICOP found this argument "lame," arguing, thus: 43. It is respectfully submitted that the aforesaid pronouncement in the Decision is an egregious and monumental error. 44. The Decision could not dismiss as "preposterous" the mutual covenants in the Presidential Warranty which calls for a huge investment of Php500 million at that time in 1969 out of which Php268,440,000 raised from domestic foreign lending institution to establish the first large scale integrated wood processing complex in the Philippines. 45. The Decision puts up a lame explanation that "all licensees put up investments in pursuing their business" 46. Now there are about a hundred timber licenses issued by the Government thru the DENR, but these are ordinary timber licenses which involve the mere cutting of timber in the concession area, and nothing else. Records in the DENR shows that no timber licensee has put up an integrated large wood processing complex in the Philippines except PICOP.51 PICOP thus argues on the basis of quantity, and wants us to distinguish between the investment of the tricycle driver and that of the multi-billion corporation. However, not even billions of pesos in investment can change the fact that natural resources and, therefore, public interest are involved in PICOPs venture, consequently necessitating the full control and supervision by the State as mandated by the Constitution. Not even billions of pesos in investment can buy forest lands, which is practically what PICOP is asking for by interpreting the 1969 Document as a contract giving it perpetual and exclusive possession over such lands. Among all TLA holders in the Philippines, PICOP has, by far, the largest concession area at 143,167 hectares, a land area more than the size of two Metro Manilas.52 How can it not expect to also have the largest investment? Investment Incentives Act PICOP then claims that the contractual nature of the 1969 Document was brought about by its issuance in accordance with and pursuant to the Investment Incentives Act. According to PICOP: The conclusion in the Decision that to construe PICOPs investments as a consideration in a contract would be to stealthily render ineffective the principle that a license is not a contract between the sovereignty and the licensee is so flawed since the contract with the warranty dated 29 July 1969

was issued by the Government in accordance with and pursuant to Republic Act No. 5186, otherwise known as "The Investment Incentives Act."53 PICOP then proceeds to cite Sections 2 and 4(d) and (e) of said act: Section 2. Declaration of Policy To accelerate the sound development of the national economy in consonance with the principles and objectives of economic nationalism, and in pursuance of a planned, economically feasible and practicable dispersal of industries, under conditions which will encourage competition and discharge monopolies, it is hereby declared to be the policy of the state to encourage Filipino and foreign investments, as hereinafter set out, in projects to develop agricultural, mining and manufacturing industries which increase national income most at the least cost, increase exports, bring about greater economic stability, provide more opportunities for employment, raise the standards of living of the people, and provide for an equitable distribution of wealth. It is further declared to be the policy of the state to welcome and encourage foreign capital to establish pioneer enterprises that are capital intensive and would utilize a substantial amount of domestic raw materials, in joint venture with substantial Filipino capital, whenever available. Section 4. Basic Rights and Guarantees. All investors and enterprises are entitled to the basic rights and guarantees provided in the constitution. Among other rights recognized by the Government of the Philippines are the following: xxxx d) Freedom from Expropriation. There shall be no expropriation by the government of the property represented by investments or of the property of enterprises except for public use or in the interest of national welfare and defense and upon payment of just compensation. x x x. e) Requisition of Investment. There shall be no requisition of the property represented by the investment or of the property of enterprises, except in the event of war or national emergency and only for the duration thereof. Just compensation shall be determined and paid either at the time of requisition or immediately after cessation of the state of war or national emergency. Payments received as compensation for the requisitioned property may be remitted in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance, subject to the provisions of Section seventy-four of republic Act Numbered Two hundred sixty-five. Section 2 speaks of the policy of the State to encourage Filipino and foreign investments. It does not speak of how this policy can be implemented. Implementation of this policy is tackled in Sections 5 to 12 of the same law,54which PICOP failed to mention, and for a good reason. None of the 24 incentives enumerated therein relates to, or even remotely suggests that, PICOPs proposition that the 1969 Document is a contract. PICOP could indeed argue that the enumeration is not exclusive. Certainly, granting incentives to investors, whether included in the enumeration or not, would be an implementation of this policy. However, it is presumed that whatever incentives may be given to investors should be within the bounds of the laws and the Constitution. The declaration of policy in Section 2 cannot, by any stretch of the imagination, be read to provide an exception to either the laws or, heaven forbid, the Constitution. Exceptions are never presumed and should be convincingly proven. Section 2 of the Investment Incentives Act cannot be read as exempting investors from the Constitutional provisions (1) prohibiting private ownership of forest lands; (2) providing for the complete control and supervision by the State of exploitation activities; or (3) limiting exploitation agreements to twentyfive years, renewable for another twenty-five years.

Section 4(d) and (e), on the other hand, is a recognition of rights already guaranteed under the Constitution. Freedom from expropriation is granted under Section 9 of Article III55 of the Constitution, while the provision on requisition is a negative restatement of Section 6, Article XII.56 Refusal to grant perpetual and exclusive possession to PICOP of its concession area would not result in the expropriation or requisition of PICOPs property, as these forest lands belong to the State, and not to PICOP. This is not changed by PICOPs allegation that: Since it takes 35 years before the company can go back and harvest their residuals in a logged-over area, it must be assured of tenure in order to provide an inducement for the company to manage and preserve the residuals during their growth period. This is a commitment of resources over a span of 35 years for each plot for each cycle. No company will undertake the responsibility and cost involved in policing, preserving and managing residual forest areas until it were sure that it had firm title to the timber.57 The requirement for logging companies to preserve and maintain forest areas, including the reforestation thereof, is one of the prices a logging company must pay for the exploitation thereof. Forest lands are meant to be enjoyed by countless future generations of Filipinos, and not just by one logging company. The requirements of reforestation and preservation of the concession areas are meant to protect them, the future generations, and not PICOP. Reforestation and preservation of the concession areas are not required of logging companies so that they would have something to cut again, but so that the forest would remain intact after their operations. That PICOP would not accept the responsibility to preserve its concession area if it is not assured of tenure thereto does not speak well of its corporate policies. Conclusion In sum, PICOP was not able to prove either of the two things it needed to prove to be entitled to a Writ of Mandamus against the DENR Secretary. The 1969 Document is not a contract recognized under the non-impairment clause and, even if we assume for the sake of argument that it is, it did not enjoin the government to issue an IFMA in 2002 either. These are the essential elements in PICOPs cause of action, and the failure to prove the same warrants a dismissal of PICOPs Petition for Mandamus, as not even PICOPs compliance with all the administrative and statutory requirements can save its Petition now. Whether PICOP Has Complied with the Statutory and Administrative Requirements for the Conversion of the TLA to an IFMA In the assailed Decision, our ruling was based on two distinct grounds, each one being sufficient in itself for us to rule that PICOP was not entitled to a Writ of Mandamus: (1) the 1969 Document, on which PICOP hinges its right to compel the issuance of an IFMA, is not a contract; and (2) PICOP has not complied with all administrative and statutory requirements for the issuance of an IFMA. When a court bases its decision on two or more grounds, each is as authoritative as the other and neither is obiter dictum.58 Thus, both grounds on which we based our ruling in the assailed Decision would become judicial dictum, and would affect the rights and interests of the parties to this case unless corrected in this Resolution on PICOPs Motion for Reconsideration. Therefore, although PICOP would not be entitled to a Writ of Mandamus even if the second issue is resolved in its favor, we should nonetheless resolve the same and determine whether PICOP has indeed complied with all administrative and statutory requirements for the issuance of an IFMA.

While the first issue (on the nature of the 1969 Document) is entirely legal, this second issue (on PICOPs compliance with administrative and statutory requirements for the issuance of an IFMA) has both legal and factual sub-issues. Legal sub-issues include whether PICOP is legally required to (1) consult with and acquire an approval from the Sanggunian concerned under Sections 26 and 27 of the Local Government Code; and (2) acquire a Certification from the National Commission on Indigenous Peoples (NCIP) that the concession area does not overlap with any ancestral domain. Factual sub-issues include whether, at the time it filed its Petition for Mandamus, PICOP had submitted the required Five-Year Forest Protection Plan and Seven-Year Reforestation Plan and whether PICOP had paid all forest charges. For the factual sub-issues, PICOP invokes the doctrine that factual findings of the trial court, especially when upheld by the Court of Appeals, deserve great weight. However, deserving of even greater weight are the factual findings of administrative agencies that have the expertise in the area of concern. The contentious facts in this case relate to the licensing, regulation and management of forest resources, the determination of which belongs exclusively to the DENR: SECTION 4. Mandate. The Department shall be the primary government agency responsible for the conservation, management, development and proper use of the countrys environment and natural resources, specifically forest and grazing lands, mineral resources, including those in reservation and watershed areas, and lands of the public domain, as well as the licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the present and future generations of Filipinos.59 When parties file a Petition for Certiorari against judgments of administrative agencies tasked with overseeing the implementation of laws, the findings of such administrative agencies are entitled to great weight. In the case at bar, PICOP could not have filed a Petition for Certiorari, as the DENR Secretary had not yet even determined whether PICOP should be issued an IFMA. As previously mentioned, when PICOPs application was brought to a standstill upon the evaluation that PICOP had yet to comply with the requirements for the issuance of an IFMA, PICOP refused to attend further meetings with the DENR and instead filed a Petition for Mandamus against the latter. By jumping the gun, PICOP did not diminish the weight of the DENR Secretarys initial determination. Forest Protection and Reforestation Plans The Performance Evaluation Team tasked to appraise PICOPs performance on its TLA No. 43 found that PICOP had not submitted its Five-Year Forest Protection Plan and its Seven-Year Reforestation Plan.60 In its Motion for Reconsideration, PICOP asserts that, in its Letter of Intent dated 28 August 2000 and marked as Exhibit L in the trial court, there was a reference to a Ten-Year Sustainable Forest Management Plan (SFMP), in which a Five-Year Forest Protection Plan and a Seven-Year Reforestation Plan were allegedly incorporated. PICOP submitted a machine copy of a certified photocopy of pages 50-67 and 104-110 of this SFMP in its Motion for Reconsideration. PICOP claims that the existence of this SFMP was repeatedly asserted during the IFMA application process.61 Upon examination of the portions of the SFMP submitted to us, we cannot help but notice that PICOPs concept of forest protection is the security of the area against "illegal" entrants and settlers. There is no mention of the protection of the wildlife therein, as the focus of the discussion of the silvicultural treatments and the SFMP itself is on the protection and generation of future timber harvests. We are particularly disturbed by the portions stating that trees of undesirable quality shall be removed.

However, when we required the DENR Secretary to comment on PICOPs Motion for Reconsideration, the DENR Secretary did not dispute the existence of this SFMP, or question PICOPs assertion that a Ten-Year Forest Protection Plan and a Ten-Year Reforestation Plan are already incorporated therein. Hence, since the agency tasked to determine compliance with IFMA administrative requirements chose to remain silent in the face of allegations of compliance, we are constrained to withdraw our pronouncement in the assailed Decision that PICOP had not submitted a Five-Year Forest Protection Plan and a Seven-Year Reforestation Plan for its TLA No. 43. As previously mentioned, the licensing, regulation and management of forest resources are the primary responsibilities of the DENR.62 The compliance discussed above is, of course, only for the purpose of determining PICOPs satisfactory performance as a TLA holder, and covers a period within the subsistence of PICOPs TLA No. 43. This determination, therefore, cannot prohibit the DENR from requiring PICOP, in the future, to submit proper forest protection and reforestation plans covering the period of the proposed IFMA. Forest Charges In determining that PICOP did not have unpaid forest charges, the Court of Appeals relied on the assumption that if it were true that PICOP had unpaid forest charges, it should not have been issued an approved Integrated Annual Operation Plan (IAOP) for the year 2001-2002 by Secretary Alvarez himself.63 In the assailed Decision, we held that the Court of Appeals had been selective in its evaluation of the IAOP, as it disregarded the part thereof that shows that the IAOP was approved subject to several conditions, not the least of which was the submission of proof of the updated payment of forest charges from April 2001 to June 2001.64 We also held that even if we considered for the sake of argument that the IAOP should not have been issued if PICOP had existing forestry accounts, the issuance of the IAOP could not be considered proof that PICOP had paid the same. Firstly, the best evidence of payment is the receipt thereof. PICOP has not presented any evidence that such receipts were lost or destroyed or could not be produced in court.65 Secondly, the government cannot be estopped by the acts of its officers. If PICOP has been issued an IAOP in violation of the law, allegedly because it may not be issued if PICOP had existing forestry accounts, the government cannot be estopped from collecting such amounts and providing the necessary sanctions therefor, including the withholding of the IFMA until such amounts are paid. We therefore found that, as opposed to the Court of Appeals findings, which were based merely on estoppel of government officers, the positive and categorical evidence presented by the DENR Secretary was more convincing with respect to the issue of payment of forestry charges: 1. Forest Management Bureau (FMB) Senior Forest Management Specialist (SFMS) Ignacio M. Evangelista testified that PICOP had failed to pay its regular forest charges covering the period from 22 September 2001 to 26 April 2002 in the total amount of P15,056,054.0566 PICOP also allegedly paid late most of its forest charges from 1996 onwards, by reason of which, PICOP is liable for a surcharge of 25% per annum on the tax due and interest of 20% per annum which now amounts to P150,169,485.02.67 Likewise, PICOP allegedly had overdue and unpaid silvicultural fees in the amount of P2,366,901.00 as of 30 August 2002.68Summing up the testimony, therefore, it was alleged that PICOP had unpaid and overdue forest charges in the sum of P167,592,440.90 as of 10 August 2002.69 2. Collection letters were sent to PICOP, but no official receipts are extant in the DENR record in Bislig City evidencing payment of the overdue amount stated in the said collection

letters.70 There were no official receipts for the period covering 22 September 2001 to 26 April 2002. We also considered these pieces of evidence more convincing than the other ones presented by PICOP: 1. PICOP presented the certification of Community Environment and Natural Resources Office (CENRO) Officer Philip A. Calunsag, which refers only to PICOPs alleged payment of regular forest charges covering the period from 14 September 2001 to 15 May 2002.71 We noted that it does not mention similar payment of the penalties, surcharges and interests that PICOP incurred in paying late several forest charges, which fact was not rebutted by PICOP. 2. The 27 May 2002 Certification by CENRO Calunsag specified only the period covering 14 September 2001 to 15 May 2002 and the amount of P53,603,719.85 paid by PICOP without indicating the corresponding volume and date of production of the logs. This is in contrast to the findings of SFMS Evangelista, which cover the period from CY 1996 to 30 August 2002 and includes penalties, interests, and surcharges for late payment pursuant to DAO 80, series of 1987. 3. The 21 August 2002 PICOP-requested certification issued by Bill Collector Amelia D. Arayan, and attested to by CENRO Calunsag himself, shows that PICOP paid only regular forest charges for its log production covering 1 July 2001 to 21 September 2001. However, there were log productions after 21 September 2001, the regular forest charges for which have not been paid, amounting to P15,056,054.05.72The same certification shows delayed payment of forest charges, thereby corroborating the testimony of SFMS Evangelista and substantiating the imposition of penalties and surcharges. In its Motion for Reconsideration, PICOP claims that SFMS Evangelista is assigned to an office that has nothing to do with the collection of forest charges, and that he based his testimony on the Memoranda of Forest Management Specialist II (FMS II) Teofila Orlanes and DENR, Bislig City Bill Collector Amelia D. Arayan, neither of whom was presented to testify on his or her Memorandum. PICOP also submitted an Addendum to Motion for Reconsideration, wherein it appended certified true copies of CENRO Summaries with attached Official Receipts tending to show that PICOP had paid a total of P81,184,747.70 in forest charges for 10 January 2001 to 20 December 2002, including the period during which SFMS Evangelista claims PICOP did not pay forest charges (22 September 2001 to 26 April 2002). Before proceeding any further, it is necessary for us to point out that, as with our ruling on the forest protection and reforestation plans, this determination of compliance with the payment of forest charges is exclusively for the purpose of determining PICOPs satisfactory performance on its TLA No. 43. This cannot bind either party in a possible collection case that may ensue. An evaluation of the DENR Secretarys position on this matter shows a heavy reliance on the testimony of SFMS Evangelista, making it imperative for us to strictly scrutinize the same with respect to its contents and admissibility. PICOP claims that SFMS Evangelistas office has nothing to do with the collection of forest charges. According to PICOP, the entity having administrative jurisdiction over it is CENRO, Bislig City by virtue of DENR Administrative Order No. 96-36, dated 20 November 1996, which states: 1. In order for the DENR to be able to exercise closer and more effective supervision, management and control over the forest resources within the areas covered by TLA No. 43, PTLA No. 47 and

IFMA No. 35 of the PICOP Resources, Inc., (PRI) and, at the same time, provide greater facility in the delivery of DENR services to various publics, the aforesaid forest holdings of PRI are hereby placed under the exclusive jurisdiction of DENR Region No. XIII with the CENR Office at Bislig, Surigao del Sur, as directly responsible thereto. x x x. We disagree. Evangelista is an SFMS assigned at the Natural Forest Management Division of the FMB, DENR. In Evangelistas aforementioned affidavit submitted as part of his direct examination, Evangelista enumerated his duties and functions as SFMS: 1. As SFMS, I have the following duties and functions: a) To evaluate and act on cases pertaining to forest management referred to in the Natural forest Management Division; b) To monitor, verify and validate forest management and related activities by timber licences as to their compliance to approved plans and programs; c) To conduct investigation and verification of compliance by timber licenses/permittees to existing DENR rules and regulations; d) To gather field data and information to be used in the formulation of forest policies and regulations; and e) To perform other duties and responsibilities as may be directed by superiors.73 PICOP also alleges that the testimony of SFMS Evangelista was based on the aforementioned Memoranda of Orlanes and Arayan and that, since neither Orlanes nor Arayan was presented as a witness, SFMS Evangelistas testimony should be deemed hearsay. SFMS Evangelistas 1 October 2002 Affidavit,74 which was offered as part of his testimony, provides: 2. Sometime in September, 2001 the DENR Secretary was furnished a copy of forest Management Specialist II (FMS II) Teofila L. Orlanes Memorandum dated September 24, 2001 concerning unopaid forest charges of PICOP. Attached to the said Memorandum was a Memorandum dated September 19, 2001 of Amelia D. Arayan, Bill collector of the DENR R13-14, Bislig City. Copies of the said Memoranda are attached as Annexes 1 and 2, respectively. 3. The said Memoranda were referred to the FMB Director for appropriate action. 4. Thus, on August 5, 2002, I was directed by the FMB Director to proceed to Region 13 to gather forestry-related data and validate the report contained in the Memoranda of Ms. Orlanes and Arayan. 5. On August 6, 2002, I proceeded to DENR Region 13 in Bislig City. A copy of my Travel Order is attached as Annex 3. 6. Upon my arrival at CENRO, Bislig, surigao del Sur, I coordinated with CENRO Officer Philip A. Calunsag and requested him to make available to me the records regarding the forest products assessments of PICOP.

7. After I was provided with the requested records, I evaluated and collected the data. 8. After the evaluation, I found that the unpaid forest charges adverted to in the Memoranda of Mr. Orlanes and Arayan covering the period from May 8, 2001 to July 7, 2001 had already been paid but late. I further found out that PICOP had not paid its forest charges covering the period from September 22, 2001 to April 26, 2002 in the total amount of P15,056,054.05. 9. I also discovered that from 1996 up to august 30, 2002, PICOP paid late some of its forest charges in 1996 and consistently failed to pay late its forest charges from 1997 up to the present time. 10. Under Section 7.4 of DAO No. 80 Series of 197\87 and Paragraph (4a), Section 10 of BIR revenue Regulations No. 2-81 dated November 18, 1980, PICOP is mandated to pay a surcharge of 25% per annum of the tax due and interest of 20% per annum for late payment of forest charges. 11. The overdue unpaid forest charges of PICOP as shown in the attached tabulation marked as Annex 4 hereof is P150,169,485.02. Likewise, PICOP has overdue and unpaid silvicultural fees in the amount ofP2,366,901.00 from 1996 to the present. 12. In all, PICOP has an outstanding and overdue total obligation of P167,592,440.90 as of August 30, 2002 based on the attached tabulation which is marked as Annex 5 hereof.75 Clearly, SFMS Evangelista had not relied on the Memoranda of Orlanes and Arayan. On the contrary, he traveled to Surigao del Sur in order to verify the contents of these Memoranda. SFMS Evangelista, in fact, revised the findings therein, as he discovered that certain forest charges adverted to as unpaid had already been paid. This does not mean, however, that SFMS Evangelistas testimony was not hearsay. A witness may testify only on facts of which he has personal knowledge; that is, those derived from his perception, except in certain circumstances allowed by the Rules.76 Otherwise, such testimony is considered hearsay and, hence, inadmissible in evidence.77 SFMS Evangelista, while not relying on the Memoranda of Orlanes and Arayan, nevertheless relied on records, the preparation of which he did not participate in.78 These records and the persons who prepared them were not presented in court, either. As such, SFMS Evangelistas testimony, insofar as he relied on these records, was on matters not derived from his own perception, and was, therefore, hearsay. Section 44, Rule 130 of the Rules of Court, which speaks of entries in official records as an exception to the hearsay rule, cannot excuse the testimony of SFMS Evangelista. Section 44 provides: SEC. 44. Entries in official records. Entries in official records made in the performance of his duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein stated. In Africa v. Caltex,79 we enumerated the following requisites for the admission of entries in official records as an exception to the hearsay rule: (1) the entries were made by a public officer or a private person in the performance of a duty; (2) the performance of the duty is especially enjoined by law;

(3) the public officer or the private person had sufficient knowledge of the facts stated by him, which must have been acquired by him personally or through official information. The presentation of the records themselves would, therefore, have been admissible as an exception to the hearsay rule even if the public officer/s who prepared them was/were not presented in court, provided the above requisites could be adequately proven. In the case at bar, however, neither the records nor the persons who prepared them were presented in court. Thus, the above requisites cannot be sufficiently proven. Also, since SFMS Evangelista merely testified based on what those records contained, his testimony was hearsay evidence twice removed, which was one step too many to be covered by the official-records exception to the hearsay rule. SFMS Evangelistas testimony of nonpayment of forest charges was, furthermore, based on his failure to find official receipts corresponding to billings sent to PICOP. As stated above, PICOP attached official receipts in its Addendum to Motion for Reconsideration to this Court. While this course of action is normally irregular in judicial proceedings, we merely stated in the assailed Decision that "the DENR Secretary has adequately proven that PICOP has, at this time, failed to comply with administrative and statutory requirements for the conversion of TLA No. 43 into an IFMA,"80 and that "this disposition confers another chance to comply with the foregoing requirements."81 In view of the foregoing, we withdraw our pronouncement that PICOP has unpaid forestry charges, at least for the purpose of determining compliance with the IFMA requirements. NCIP Certification The Court of Appeals held that PICOP need not comply with Section 59 of Republic Act No. 8371, which requires prior certification from the NCIP that the areas affected do not overlap with any ancestral domain before any IFMA can be entered into by the government. According to the Court of Appeals, Section 59 should be interpreted to refer to ancestral domains that have been duly established as such by the continuous possession and occupation of the area concerned by indigenous peoples since time immemorial up to the present. The Court of Appeals held that PICOP had acquired property rights over TLA No. 43 areas, being in exclusive, continuous and uninterrupted possession and occupation of these areas since 1952 up to the present. In the assailed Decision, we reversed the findings of the Court of Appeals. Firstly, the Court of Appeals ruling defies the settled jurisprudence we have mentioned earlier, that a TLA is neither a property nor a property right, and that it does not create a vested right.82 Secondly, the Court of Appeals resort to statutory construction is misplaced, as Section 59 of Republic Act No. 8379 is clear and unambiguous: SEC. 59. Certification Precondition. All departments and other governmental agencies shall henceforth be strictly enjoined from issuing, renewing or granting any concession, license or lease, or entering into any production-sharing agreement, without prior certification from the NCIP that the area affected does not overlap with any ancestral domain. Such certification shall only be issued after a field-based investigation is conducted by the Ancestral Domains Office of the area concerned: Provided, That no certification shall be issued by the NCIP without the free and prior informed and written consent of the ICCs/IPs concerned: Provided, further, That no department, government agency or government-owned or controlled corporation may issue new concession, license, lease, or production sharing agreement while there is a pending application for a CADT: Provided, finally, That the ICCs/IPs shall have the right to stop or suspend, in accordance with this Act, any project that has not satisfied the requirement of this consultation process.

PICOP had tried to put a cloud of ambiguity over Section 59 of Republic Act No. 8371 by invoking the definition of Ancestral Domains in Section 3(a) thereof, wherein the possesssion by Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) must have been continuous to the present. However, we noted the exception found in the very same sentence invoked by PICOP: a) Ancestral domains Subject to Section 56 hereof, refers to all areas generally belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural resources therein, held under a claim of ownership, occupied or possessed by ICCs/IPs, by themselves or through their ancestors, communally or individually since time immemorial, continuously to the present except when interrupted by war, force majeure or displacement by force, deceit, stealth or as a consequence of government projects or any other voluntary dealings entered into by government and private individuals/corporations, and which are necessary to ensure their economic, social and cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, and other lands individually owned whether alienable and disposable or otherwise, hunting grounds, burial grounds, worship areas, bodies of water, mineral and other natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs but from which they traditionally had access to for their subsistence and traditional activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting cultivators; Ancestral domains, therefore, remain as such even when possession or occupation of these areas has been interrupted by causes provided under the law, such as voluntary dealings entered into by the government and private individuals/corporations. Consequently, the issuance of TLA No. 43 in 1952 did not cause the ICCs/IPs to lose their possession or occupation over the area covered by TLA No. 43. Thirdly, we held that it was manifestly absurd to claim that the subject lands must first be proven to be part of ancestral domains before a certification that the lands are not part of ancestral domains can be required, and invoked the separate opinion of now Chief Justice Reynato Puno in Cruz v. Secretary of DENR83: As its subtitle suggests, [Section 59 of R.A. No. 8371] requires as a precondition for the issuance of any concession, license or agreement over natural resources, that a certification be issued by the NCIP that the area subject of the agreement does not lie within any ancestral domain. The provision does not vest the NCIP with power over the other agencies of the State as to determine whether to grant or deny any concession or license or agreement. It merely gives the NCIP the authority to ensure that the ICCs/IPs have been informed of the agreement and that their consent thereto has been obtained. Note that the certification applies to agreements over natural resources that do not necessarily lie within the ancestral domains. For those that are found within the said domains, Sections 7(b) and 57 of the IPRA apply. PICOP rejects the entire disposition of this Court on the matter, relying on the following theory: 84. It is quite clear that Section 59 of R.A. 8371 does not apply to the automatic conversion of TLA 43 to IFMA. First, the automatic conversion of TLA 43 to an IFMA is not a new project. It is a mere continuation of the harvesting process in an area that PICOP had been managing, conserving and reforesting for the last 50 years since 1952. Hence any pending application for a CADT within the area, cannot affect much less hold back the automatic conversion. That the government now wishes to change the tenurial system to an IFMA could not change the PICOP project, in existence and operating for the last 30 (sic) years, into a new one.84

PICOPs position is anything but clear. What is clearly provided for in Section 59 is that it covers "issuing, renewing or granting (of) any concession, license or lease, or entering into any production sharing agreement." PICOP is implying that, when the government changed the tenurial system to an IFMA, PICOPs existing TLA would just be upgraded or modified, but would be the very same agreement, hence, dodging the inclusion in the word "renewing." However, PICOP is conveniently leaving out the fact that its TLA expired in 2002. If PICOP really intends to pursue the argument that the conversion of the TLA into an IFMA would not create a new agreement, but would only be a modification of the old one, then it should be willing to concede that the IFMA expired as well in 2002. An automatic modification would not alter the terms and conditions of the TLA except when they are inconsistent with the terms and conditions of an IFMA. Consequently, PICOPs concession period under the renewed TLA No. 43, which is from the year 1977 to 2002, would remain the same. PICOP cannot rely on a theory of the case whenever such theory is beneficial to it, but refute the same whenever the theory is damaging to it. In the same way, PICOP cannot claim that the alleged Presidential Warranty is "renewable for other 25 years" and later on claim that what it is asking for is not a renewal. Extensions of agreements must necessarily be included in the term renewal. Otherwise, the inclusion of "renewing" in Section 59 would be rendered inoperative. PICOP further claims: 85. Verily, in interpreting the term "held under claim of ownership," the Supreme Court could not have meant to include claims that had just been filed and not yet recognized under the provisions of DENR Administrative Order No. 2 Series of 1993, nor to any other community / ancestral domain program prior to R.A. 8371. xxxx 87. One can not imagine the terrible damage and chaos to the country, its economy, its people and its future if a mere claim filed for the issuance of a CADC or CADT will already provide those who filed the application, the authority or right to stop the renewal or issuance of any concession, license or lease or any production-sharing agreement. The same interpretation will give such applicants through a mere application the right to stop or suspend any project that they can cite for not satisfying the requirements of the consultation process of R.A. 8371. If such interpretation gets enshrined in the statures of the land, the unscrupulous and the extortionists can put any ongoing or future project or activity to a stop in any part of the country citing their right from having filed an application for issuance of a CADC or CADT claim and the legal doctrine established by the Supreme Court in this PICOP case.85 We are not sure whether PICOPs counsels are deliberately trying to mislead us, or are just plainly ignorant of basic precepts of law. The term "claim" in the phrase "claim of ownership" is not a document of any sort. It is an attitude towards something. The phrase "claim of ownership" means "the possession of a piece of property with the intention of claiming it in hostility to the true owner."86 It is also defined as "a partys manifest intention to take over land, regardless of title or right."87 Other than in Republic Act No. 8371, the phrase "claim of ownership" is thoroughly discussed in issues relating to acquisitive prescription in Civil Law. Before PICOPs counsels could attribute to us an assertion that a mere attitude or intention would stop the renewal or issuance of any concession, license or lease or any production-sharing agreement, we should stress beforehand that this attitude or intention must be clearly shown by overt acts and, as required by Section 3(a), should have been in existence "since time immemorial, continuously to the present except when interrupted by war, force majeure or displacement by force,

deceit, stealth or as a consequence of government projects or any other voluntary dealings entered into by government and private individuals/corporations." Another argument of PICOP involves the claim itself that there was no overlapping: Second, there could be no overlapping with any Ancestral Domain as proven by the evidence presented and testimonies rendered during the hearings in the Regional Trial Court. x x x. x x x x. 88. The DENR issued a total of 73 CADCs as of December 11, 1996. The DENR Undersecretary for Field Operations had recommended another 11 applications for issuance of CADCs. None of the CADCs overlap the TLA 43 area. 89. However former DENR Secretary Alvarez, in a memorandum dated 13 September, 2002 addressed to PGMA, insisted that PICOP had to comply with the requirement to secure a Free and Prior Informed Concent because CADC 095 was issued covering 17,112 hectares of TLA 43. 90. This CADC 095 is a fake CADC and was not validly released by the DENR. While the Legal Department of the DENR was still in the process of receiving the filings for applicants and the oppositors to the CADC application, PICOP came across filed copies of a CADC 095 with the PENRO of Davao Oriental as part of their application for a Community Based Forest Management Agreement (CBFMA). Further research came across the same group filing copies of the alleged CADC 095 with the Mines and Geosciences Bureau in Davao City for a mining agreement application. The two applications had two different versions of the CADCs second page. One had Mr. Romeo T. Acosta signing as the Social reform Agenda Technical Action Officer, while the other had him signing as the Head, Community-Based Forest Management Office. One had the word "Eight" crossed out and "Seven" written to make it appear that the CADC was issued on September 25, 1997, the other made it appear that there were no alterations and the date was supposed to be originally 25 September 1997. What is required in Section 59 of Republic Act No. 8379 is a Certification from the NCIP that there was no overlapping with any Ancestral Domain. PICOP cannot claim that the DENR gravely abused its discretion for requiring this Certification, on the ground that there was no overlapping. We reiterate that it is manifestly absurd to claim that the subject lands must first be proven to be part of ancestral domains before a certification that they are not can be required. As discussed in the assailed Decision, PICOP did not even seek any certification from the NCIP that the area covered by TLA No. 43, subject of its IFMA conversion, did not overlap with any ancestral domain.88 Sanggunian Consultation and Approval While PICOP did not seek any certification from the NCIP that the formers concession area did not overlap with any ancestral domain, PICOP initially sought to comply with the requirement under Sections 26 and 27 of the Local Government Code to procure prior approval of the Sanggunians concerned. However, only one of the many provinces affected approved the issuance of an IFMA to PICOP. Undaunted, PICOP nevertheless submitted to the DENR the purported resolution89 of the Province of Surigao del Sur indorsing the approval of PICOPs application for IFMA conversion, apparently hoping either that the disapproval of the other provinces would go unnoticed, or that the Surigao del Sur approval would be treated as sufficient compliance. Surprisingly, the disapproval by the other provinces did go unnoticed before the RTC and the Court of Appeals, despite the repeated assertions thereof by the Solicitor General. When we pointed out in

the assailed Decision that the approval must be by all the Sanggunians concerned and not by only one of them, PICOP changed its theory of the case in its Motion for Reconsideration, this time claiming that they are not required at all to procure Sanggunian approval. Sections 2(c), 26 and 27 of the Local Government Code provide: SEC. 2. x x x. xxxx (c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with appropriate local government units, nongovernmental and peoples organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions. SEC. 26. Duty of National Government Agencies in the Maintenance of Ecological Balance. It shall be the duty of every national agency or government-owned or controlled corporation authorizing or involved in the planning and implementation of any project or program that may cause pollution, climatic change, depletion of non-renewable resources, loss of crop land, rangeland, or forest cover, and extinction of animal or plant species, to consult with the local government units, nongovernmental organizations, and other sectors concerned and explain the goals and objectives of the project or program, its impact upon the people and the community in terms of environmental or ecological balance, and the measures that will be undertaken to prevent or minimize the adverse effects thereof. SEC. 27. Prior Consultations Required. No project or program shall be implemented by government authorities unless the consultations mentioned in Sections 2(c) and 26 hereof are complied with, and prior approval of the sanggunian concerned is obtained: Provided, That occupants in areas where such projects are to be implemented shall not be evicted unless appropriate relocation sites have been provided, in accordance with the provisions of the Constitution. As stated in the assailed Decision, the common evidence of the DENR Secretary and PICOP, namely, the 31 July 2001 Memorandum of Regional Executive Director (RED) Elias D. Seraspi, Jr., enumerated the local government units and other groups which had expressed their opposition to PICOPs application for IFMA conversion: 7. During the conduct of the performance evaluation of TLA No. 43 issues complaints against PRI were submitted thru Resolutions and letters. It is important that these are included in this report for assessment of what are their worth, viz: xxxx 7.2 Joint Resolution (unnumbered), dated March 19, 2001 of the Barangay Council and Barangay Tribal Council of Simulao, Boston, Davao Oriental (ANNEX F) opposing the conversion of TLA No. 43 into IFMA over the 17,112 hectares allegedly covered with CADC No. 095. 7.3 Resolution Nos. 10, s-2001 and 05, s-2001 (ANNEXES G & H) of the Bunawan Tribal Council of Elders (BBMTCE) strongly demanding none renewal of PICOP TLA. They claim to be the rightful owner of the area it being their alleged ancestral land.

7.4 Resolution No. 4, S-2001 of Sitio Linao, San Jose, Bislig City (ANNEX I) requesting not to renew TLA 43 over the 900 hectares occupied by them. 7.5 Resolution No. 22, S-2001 (ANNEX J) of the Sanguniang Bayan, Lingig, Surigao del Sur not to grant the conversion of TLA 43 citing the plight of former employees of PRI who were forced to enter and farm portion of TLA No. 43, after they were laid off. 7.6 SP Resolution No. 2001-113 and CDC Resolution Nos. 09-2001 of the Sanguniang Panglungsod of Bislig City (ANNEXES K & L) requesting to exclude the area of TLA No. 43 for watershed purposes. 7.7 Resolution No. 2001-164, dated June 01, 2001 (ANNEX M) Sanguniang Panglungsod of Bislig City opposing the conversion of TLA 43 to IFMA for the reason that IFMA do not give revenue benefits to the City.90 PICOP had claimed that it complied with the Local Government Code requirement of obtaining prior approval of the Sanggunian concerned by submitting a purported resolution91 of the Province of Surigao del Sur indorsing the approval of PICOPs application for IFMA conversion. We ruled that this cannot be deemed sufficient compliance with the foregoing provision. Surigao del Sur is not the only province affected by the area covered by the proposed IFMA. As even the Court of Appeals found, PICOPs TLA No. 43 traverses the length and breadth not only of Surigao del Sur but also of Agusan del Sur, Compostela Valley and Davao Oriental.92 On Motion for Reconsideration, PICOP now argues that the requirement under Sections 26 and 27 does not apply to it: 97. PICOP is not a national agency. Neither is PICOP government owned or controlled. Thus Section 26 does not apply to PICOP. 98. It is very clear that Section 27 refers to projects or programs to be implemented by government authorities or government-owned and controlled corporations. PICOPs project or the automatic conversion is a purely private endevour. First the PICOP project has been implemented since 1969. Second, the project was being implemented by private investors and financial institutions. 99. The primary government participation is to warrant and ensure that the PICOP project shall have peaceful tenure in the permanent forest allocated to provide raw materials for the project. To rule now that a project whose foundations were commenced as early as 1969 shall now be subjected to a 1991 law is to apply the law retrospectively in violation of Article 4 of the Civil Code that laws shall not be applied retroactively. 100. In addition, under DAO 30, Series of 1992, TLA and IFMA operations were not among those devolved function from the National Government / DENR to the local government unit. Under its Section 03, the devolved function cover only: a) Community Based forestry projects. b) Communal forests of less than 5000 hectares c) Small watershed areas which are sources of local water supply.93 We have to remind PICOP again of the contents of Section 2, Article XII of the Constitution:

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. All projects relating to the exploration, development and utilization of natural resources are projects of the State. While the State 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 these citizens, such as PICOP, the projects nevertheless remain as State projects and can never be purely private endeavors. Also, despite entering into co-production, joint venture, or production-sharing agreements, the State remains in full control and supervision over such projects. PICOP, thus, cannot limit government participation in the project to being merely its bouncer, whose primary participation is only to "warrant and ensure that the PICOP project shall have peaceful tenure in the permanent forest allocated to provide raw materials for the project." PICOP is indeed neither a national agency nor a government-owned or controlled corporation. The DENR, however, is a national agency and is the national agency prohibited by Section 27 from issuing an IFMA without the prior approval of the Sanggunian concerned. As previously discussed, PICOPs Petition for Mandamus can only be granted if the DENR Secretary is required by law to issue an IFMA. We, however, see here the exact opposite: the DENR Secretary was actually prohibited by law from issuing an IFMA, as there had been no prior approval by all the other Sanggunians concerned. As regards PICOPs assertion that the application to them of a 1991 law is in violation of the prohibition against the non-retroactivity provision in Article 4 of the Civil Code, we have to remind PICOP that it is applying for an IFMA with a term of 2002 to 2027. Section 2, Article XII of the Constitution allows exploitation agreements to last only "for a period not exceeding twenty-five years, renewable for not more than twenty-five years." PICOP, thus, cannot legally claim that the projects term started in 1952 and extends all the way to the present. Finally, the devolution of the project to local government units is not required before Sections 26 and 27 would be applicable. Neither Section 26 nor 27 mentions such a requirement. Moreover, it is not only the letter, but more importantly the spirit of Sections 26 and 27, that shows that the devolution of the project is not required. The approval of the Sanggunian concerned is required by law, not because the local government has control over such project, but because the local government has the duty to protect its constituents and their stake in the implementation of the project. Again, Section 26 states that it applies to projects that "may cause pollution, climatic change, depletion of non-renewable resources, loss of crop land, rangeland, or forest cover, and extinction of animal or plant species." The local government should thus represent the communities in such area, the very people who will be affected by flooding, landslides or even climatic change if the project is not properly regulated, and who likewise have a stake in the resources in the area, and deserve to be adequately compensated when these resources are exploited.

Indeed, it would be absurd to claim that the project must first be devolved to the local government before the requirement of the national government seeking approval from the local government can be applied. If a project has been devolved to the local government, the local government itself would be implementing the project. That the local government would need its own approval before implementing its own project is patently silly. EPILOGUE AND DISPOSITION PICOPc cause of action consists in the allegation that the DENR Secretary, in not issuing an IFMA, violated its constitutional right against non-impairment of contracts. We have ruled, however, that the 1969 Document is not a contract recognized under the non-impairment clause, much less a contract specifically enjoining the DENR Secretary to issue the IFMA. The conclusion that the 1969 Document is not a contract recognized under the non-impairment clause has even been disposed of in another case decided by another division of this Court, PICOP Resources, Inc. v. Base Metals Mineral Resources Corporation,94 the Decision in which case has become final and executory. PICOPs Petition for Mandamus should, therefore, fail. Furthermore, even if we assume for the sake of argument that the 1969 Document is a contract recognized under the non-impairment clause, and even if we assume for the sake of argument that the same is a contract specifically enjoining the DENR Secretary to issue an IFMA, PICOPs Petition for Mandamus must still fail. The 1969 Document expressly states that the warranty as to the tenure of PICOP is "subject to compliance with constitutional and statutory requirements as well as with existing policy on timber concessions." Thus, if PICOP proves the two above-mentioned matters, it still has to prove compliance with statutory and administrative requirements for the conversion of its TLA into an IFMA. While we have withdrawn our pronouncements in the assailed Decision that (1) PICOP had not submitted the required forest protection and reforestation plans, and that (2) PICOP had unpaid forestry charges, thus effectively ruling in favor of PICOP on all factual issues in this case, PICOP still insists that the requirements of an NCIP certification and Sanggunian consultation and approval do not apply to it. To affirm PICOPs position on these matters would entail nothing less than rewriting the Indigenous Peoples Rights Act and the Local Government Code, an act simply beyond our jurisdiction. WHEREFORE, the Motion for Reconsideration of PICOP Resources, Inc. is DENIED. SO ORDERED.

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G.R. No. 98310 October 24, 1996 MATUGUINA INTEGRATED WOOD PRODUCTS, INC., petitioner, vs. The HON. COURT OF APPEALS, DAVAO ENTERPRISES CORPORATION, The HON. MINISTER, (NOW SECRETARY) of NATURAL RESOURCES AND PHILLIP CO, respondents.

TORRES, JR., J.:p

Matuguina Integrated Wood Products Inc. (MIWPI, for brevity) filed this action for Prohibition, Damages and Injunction, in order to prevent the respondent Minister (now Secretary) of Natural Resources from enforcing its Order of Execution against it, for liability arising from an alleged encroachment of the petitioner over the timber concession of respondent DAVENCOR located in Mati, Davao Oriental. The Regional Trial Court, Branch 17, Davao City, ruled in favor of the petitioner, but on appeal, was reversed by the respondent Court of Appeals in its decision dated February 25, 1991, which found MIWPI, as an alter ego of Milagros Matuguina and/or Matuguina Logging Enterprises (MLE), to be liable to DAVENCOR for the illegal encroachment. The following are the antecedent facts: On June 28, 1973, the Acting Director of the Bureau of Forest Development issued Provisional Timber License (PTL) No. 30, covering an area of 5,400 hectares to Ms. Milagros Matuguina who was then doing business under the name of MLE, a sole proprietorship venture. A portion, covering 1,900 hectares, of the said area was located within the territorial boundary of Gov. Generoso in Mati, Davao Oriental, and adjoined the timber concession of Davao Enterprises Corporation (DAVENCOR), the private respondent in this case. On July 10, 1974, petitioner Matuguina Integrated Wood Products, Inc. (MIWPI), was incorporated, having an authorized capital stock of Ten Million Pesos (P10,000,000.00). 1 The incorporators/stockholders of MIWPI, and their stock subscriptions were as follows: Name No. Of Shares Amount of Capital Subscribed Stock Subscribed 1. Henry Wee 1,160,000 1,160,000.00 2. Ma. Milagros Matuguina 400,000 400,000.00 3. Alejandro Chua Chun 200,000 200,000.00 4. Bernadita Chua 120,000 120,000.00 5. Domingo Herrera 40,000 40,000.00 6. Manuel Hernaez 40,000 40,000.00 7. Luis Valderama 40,000 40,000.00 2,000,000 2,000,000.00 ======== ========= Milagros Matuguina became the majority stockholder of MIWPI on September 24, 1974, when the latter's Board of Directors approved by Resolution the transfer of 1,000,000 shares from Henry Wee to Milagros Matuguina, thus giving her seventy percent (70%) stock ownership of MIWPI. In an undated letter 2 to the Director of Forest Development (BFD) on November 26, 1974, Milagros Matuguina requested the Director for a change of name and transfer of management of PTL No. 30 from a single proprietorship under her name, to that of MIWPI. This request was favorably endorsed on December 2, 1974 3 by the BFD's Acting Director, Jose Viado to respondent Secretary of Natural Resources, who approved the same on September 5, 1975. 4

On July 17, 1975, Milagros Matuguina and petitioner MIWPI executed a Deed of Transfer 5 transferring all of the former's rights, interests, ownership and participation in Provincial Timber License No. 30 to the latter for and in consideration of 148,000 shares of stocks in MIWPI. A copy of said deed was submitted to the Director of Forest Development and petitioner MIWPI had since been acting as holder and licensee of PTL No. 30 On July 28, 1975, pending approval of the request to transfer the PTL to MIWPI, DAVENCOR, through its Assistant General Manager, complained to the District Forester at Mati, Davao Oriental that Milagros Matuguina/MLE had encroached into and was conducting logging operations in DAVENCOR's timber concession. After investigation of DAVENCOR's complaint, the Investigating Committee which looked into DAVENCOR's complaint submitted its report to the Director, finding that MLE had encroached on the concession area of DAVENCOR. In line with this, the Director of Forest Development issued an Order 6 on July 15, 1981, finding and declaring MLE to have encroached upon, and conducted illegal logging operations within the licensed or concession area of DAVENCOR. MLE appealed the Order to the Ministry of Natural Resources, which appeal was docketed as MNR CASE No. 6540. During the pendency of the appealed case with the Minister of Natural Resources, Ma. Milagros Matuguina disposed of her shares in petitioner MIWPI, thereby ceasing to be a stockholder of the petitioner as of March 16, 1986. 7 On October 1, 1986, The Minister of Natural Resources, Hon. Ernesto M. Maceda rendered his Decision, 8affirming the aforesaid order of the Director of Foreign Development, stating thus: DECISION For our Resolution is the appeal by MATUGUINA LOGGING ENTERPRISES (MLR, for short) of the Order dated 15 July 1991 of the Director of Forest Development finding and declaring MLE to have encroached upon, and conducted illegal logging operations within the license or concession area of DAVAO ENTERPRISES CORPORATION. The aforesaid Order dispositively states: Wherefore, there being a clear and convincing proof that Matuguina Conducted illegal operation within the license area of DAVENCOR, above named respondent is hereby ordered to pay to the complainant the equivalent value in pesos of 2,352.04 cubic meters of timber based on the market price obtaining, at the logpond of the respondent at the time of cutting, minus the cost of production, or to restitute to the complainant equal volume of 2,352.04 cubic meters of logs owned by respondent to be taken at respondent's logpond. The respondent is hereby directed to comply with this Order within a period of ninety (90) days from receipt of this Order and after the lapse of the said period, no compliance has been made by the respondent, its logging operations shall ipso facto become automatically suspended until respondent shall have complied as directed. The Regional Director of Region II, Davao City is hereby instructed to implement this Order and to submit his compliance report within ten

(10) days after the lapse of the ninety (90) days period within which the respondent is directed to comply with this Order. And that the dispositive portion of the said decision states: WHEREFORE, the Order dated 15 July 1981 of the Director of Forest Development is hereby AFFIRMED. When the Decision of the Minister of Natural Resources became final and executory, Philip Co and DAVENCOR requested the respondent Minister on October 30, 1986 to issue immediately a writ of execution against MLE and/or MIWPI. 9 The Order of Execution 10 was issued on January 6, 1987 by the Minister through the latter's Assistant on Legal Affairs. The said Order directed the issuance of a writ of execution, not only against MLE, but likewise against MIWPI. The dispositive portion of the order provides: WHEREFORE, let a Writ of Execution be issued against Matuguina Logging Enterprises and/or Matuguina Integrated Wood Products, Inc. For the satisfaction of the Decision of the Bureau of Forest Development dated 15 July 1981, and the Order of this office dated 1 October 1986. SO ORDERED. Subsequently, a writ of execution 11 dated January 8, 1987 was issued in favor of the respondent DAVENCOR, which states: The City/Provincial Sheriff Davao City GREETINGS: You are hereby directed to enforce, implement and execute the Order of Execution dated 06 June 1987 of this Office in the above-entitled case against Matuguina Logging Enterprises and/or Matuguina Integrated Wood Products, Inc. Its officers or any person or corporation in its behalf and conformably with the Order dated 15 July 1981 of the Director of Forest Development, stating dispositively. xxx xxx xxx You are hereby requested to submit your return to this Office within the period of sixty (60) days from your receipt hereof as to action taken hereon. SO ORDERED. On February 11, 1987, MIWPI filed the instant complaint 12 for prohibition, damages and injunction, with prayer for restraining order, which case was docketed as Civil Case No. 18,457-87 in the Regional Trial Court Davao City, Branch 17. MIWPI stated its primary cause of action, the relevant portion of which reads, viz.: 5. That plaintiff which has a distinct and separate personality of its own under the law, and was never a party to the case between DAVENCOR and MLE, suddenly

became a party to the case after the decision became final and executory with the issuance of Annex "B" hereof for reasons known to the defendants alone: 6. That the issuance of Annex "B" hereof (the order of execution) by the defendant Minister has been made not only without or in excess of his authority but that the same was issued patently without any factual or legal basis, hence, a gross violation of plaintiff's constitutional rights under the due process clause; 7. That plaintiff, in the face of the order (Annex "B") complained of, there being no appeal or any plain, speedy, and adequate remedy in the ordinary course of law, does not have any alternative but to ventilate the present recourse; 8. That defendant Minister is doing, threatens or is about to do, or is procuring or suffering to be done, some act which definitely is in violation of the plaintiff's rights respecting the subject matter of the action, and unless said act or acts are restrained or prohibited at least during the pendency of this case, said act or acts would probably work not only injustice to plaintiff but would tend to render the judgment of this Honorable Court ineffectual; 9. That the commission or continuance of the acts complained of during the present litigation would not only cause great and irreparable injury, but will also work injustice to the plaintiff, and would complicate, aggravate and multiply the issues in this case; 10. That the plaintiff is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the acts complained of, or in the performance of acts, either for a limited period or perpetually; 11. That great and irreparable injury would inevitably result to the plaintiff before the matter can be heard on notice, hence, immediate issuance of a restraining order is necessary and proper; 12. That the plaintiff is willing and able to file the necessary bond executed to the defendants, in an amount to be fixed by the court, to the effect that the plaintiff will pay to the defendants all damages which they may sustain by reason of the injunction if the court should finally decide that the plaintiff was not entitled thereto. MIWPI, likewise, alleges that in wantonly and imprudently procuring the Writ of Execution against it, which DAVENCOR and Philip Co seek to enforce a 2.5 Million Peso liability of plaintiff, the latter has been constrained to bring the present action, thereby incurring damages in the sum of P500,000.00 in concept of actual and compensatory damages, and P250,000.00 in attorney's fees, which amount petitioner now seeks to recover. The trial court issued a temporary restraining order the next day, February 12, 1987, restraining and/or enjoining the private respondents and the Hon. Secretary of Natural Resources from enforcing, implementing and/or carrying into effect, the decision of the respondent Secretary dated October 1, 1986, as well as the order of execution dated January 6, 1987. On February 17, 1987, private respondents filed a Motion to Dismiss 13 alleging that the trial court had no jurisdiction over the case under Presidential Decree No. 705, to which Motion to Dismiss, petitioner filed an Opposition 14 dated February 1987. On March 9, 1987, the trial court issued an order 15 denying private respondent's Motion to Dismiss. Hence, private respondents filed their Answer 16 dated March 13, 1987 and an Amended Answer 17 dated July 16, 1987.

In the latter pleading, private respondents raised the following special and affirmative defenses: 7. That neither Milagros Matuguina nor Matuguina Integrated Wood Products, Inc. advised defendant Davencor of the change of name, and transfer of management of PTL No. 30 from Milagros Matuguina to Matuguina Integrated Wood Products, Inc., during the pendency of MNR Case No. 6540 before the Bureau of Forest Development and the Ministry of Natural Resources, notwithstanding that the lawyer of Matuguina Integrated Wood Products, Inc., who was also a stockholder thereof, had appeared for Milagros Matuguina in said administrative case. 8. That plaintiff has acted in bad faith and is now in estoppel from questioning the Writ of Execution issued against Milagros Matuguina (now Matuguina Integrated Wood Products, Inc.) to satisfy the judgment in MNR Case No. 6540. 9. This Honorable Court has no jurisdiction over the nature and subject matter of this action, especially because: (a) The plaintiff has not exhausted administrative remedies available to it before initiating this action; (b) In the guise of entertaining an action for damages, this Court is being misled by the plaintiff into deciding questions properly for the Department of Natural Resources to decide exclusively in the lawful exercise of its regulatory jurisdiction; (c) The plaintiff is now precluded and estopped from filing this action. 10. The plaintiff has no cause of action against the defendants and has not stated any in its complaint, especially because: (a) Having failed to exhaust administrative remedies, plaintiff is without a ripe cause of action that can be pleaded before this Honorable Court; (b) In substance, there is no justiciable question raised under the facts and circumstances of this case. Meanwhile, on June 2, 1987, the trial court issued on order 18 granting the petitioner's prayer for the issuance of a writ of preliminary injunction against the private respondents and the Secretary of Natural Resources, ordering them to desist, refrain and prevent from enforcing respondent Secretary's Decision dated October 1, 1986 as well as the writ of execution dated January 8, 1987. On May 10, 1989, the trial court rendered its Decision 19 in favor of the petitioner, disposing of the action as follows: WHEREFORE, in view of the foregoing, finding the evidence of plaintiff, Matuguina Integrated Wood Products, Inc. sufficient to sustain a preponderance of evidence, showing that the order of execution dated January 6, 1987, issued by the Minister of Natural Resources, through Alexander C. Castro, Assistant Minister for Legal Affairs, included therein, plaintiff Matuguina Integrated Wood Products, Inc., despite noninclusion of plaintiff in the decision of the then Minister of Natural Resources, dated October 1, 1986, already final and executory before the issuance of the order and

execution, said order or execution is hereby declared null and void and without any legal effect. As a consequence thereof, the writ of preliminary injunction issued by this court, dated June 2, 1987 is hereby made permanent. Moreover, as a result of the filing of this case, defendant Philip Co and Davencor Corporation, are ordered to jointly and severally pay the amount of P100,000.00 as actual and compensatory damages, along with another amount of P20,000.00 as attorney's fees and costs of this action, in favor of plaintiff Matuguina Integrated Wood Products, Inc. SO ORDERED. Private respondents appealed the trial court's decision on May 19, 1989. Their notice of appeal was approved by the trial court. The appealed case was docketed with respondent Honorable Court of Appeals as CA-G.R. SP No. 19887. On February 25, 1991, the respondent Court rendered its Decision, 20 reversing the lower court's pronouncement. The dispositive portion of the Decision reads: WHEREFORE, premises considered, the decision appealed from is reversed and set aside and the Order of Execution issued by the Minister of Natural Resources dated January 6, 1987 is affirmed. Without pronouncement as to costs. SO ORDERED. In due time, petitioner filed a motion for reconsideration. 21 Private respondents filed their opposition 22 to the same on April 2, 1991. In a Resolution 23 dated April 12, 1991, the motion was denied by the respondent Court. Not content with the court's pronouncement, petitioner is now before us on a Petition for Review on Certiorari, 24alleging that the respondent court acted with grave abuse of discretion in rendering the questioned decision and its companion resolution, denying the motion for reconsideration. The reasons relied upon by the Petitioner in filing its petition are hereby restated: I PETITIONER WAS DENIED DUE PROCESS OF LAW WHEN IT WAS MADE LIABLE BY RESPONDENT SECRETARY OF NATURAL RESOURCES IN HIS ORDER OF EXECUTION DATED 06 JANUARY 1987 (EXHIBIT "B" OF ATTACHMENT "O") ISSUED IN MNR CASE NO. 6540 DESPITE THE FACT THAT PETITIONER WAS NEVER A PARTY NOR A PARTICIPANT IN THE SAID CASE: IN FACT, PETITIONER NEVER HAD NOTICE OF THE PROCEEDINGS IN MNR CASE NO. 6540. II THE FAILURE TO AFFORD PETITIONER THE OPPORTUNITY TO BE HEARD IN THE ADMINISTRATIVE LEVEL (MNR CASE NO. 6540) COULD NOT HAVE BEEN

CURED BY THE INSTITUTION OF THE ACTION FOR PROHIBITION IN THE TRIAL COURT BECAUSE SAID COURT HAD NO JURISDICTION TO DETERMINE WHETHER PETITIONER WAS GUILTY OF ENCROACHMENT ON PRIVATE RESPONDENT DAVENCOR'S TIMBER CONCESSION; FURTHERMORE, THE QUESTION ON WHETHER PETITIONER WAS GUILTY OF ENCROACHMENT WAS NEVER PUT IN ISSUE IN THE CASE BEFORE THE TRIAL COURT. III THE LIABILITY OF MILAGROS/MLE AS FOUND BY RESPONDENT SECRETARY IN ITS DECISION DATED 01 OCTOBER 1986 (EXHIBIT "A" OF THE ATTACHMENT "0") CANNOT BE IMPUTED AGAINST PETITIONER SINCE THE LATTER IS A CORPORATION HAVING A PERSONALITY SEPARATE AND DISTINCT FROM MILAGROS/MLE. IV PETITIONER CANNOT BE MADE LIABLE TO PRIVATE RESPONDENTS UNDER THE DEED OF TRANSFER DATED 18 JULY 1975 (EXHIBIT "3" OF ATTACHMENT "P") AND SECTION 61 OF THE REVISED FORESTRY CODE OF THE PHILIPPINES (P.D. 705, AS AMENDED): A. THE ALLEGED TRANSFER OF PTL NO. 30 FROM MILAGROS/MLE TO PETITIONER NEVER BECAME BINDING AND EFFECTIVE SINCE PTL NO. 30 REMAINED IN THE NAME OF MILAGROS/MLE UNTIL ITS EXPIRATION ON 30 JUNE 1977: THIS IS DUE TO THE FACT THAT SAID TRANSFER WAS NEVER APPROVED BY THE SECRETARY OF NATURAL RESOURCES. B. GRANTING ARGUENDO THAT THERE WAS AN EFFECTIVE TRANSFER OF PTL NO. 30 FROM MILAGROS/MLE TO PETITIONER, THE TRANSFER COULD NOT MAKE PETITIONER LIABLE FOR THE ALLEGED ENCROACHMENT OF PRIVATE RESPONDENT DAVENCOR'S TIMBER CONCESSION, SINCE: 1. SAID TRANSFER WAS EXECUTED PRIOR TO THE COMMISSION OF THE ALLEGED ENCROACHMENT AND THE FILING THE ADMINISTRATIVE COMPLAINT FOR ENCROACHMENT DATED 28 JULY 1975; THUS, PETITIONER CANNOT BE MADE LIABLE FOR OBLIGATIONS OF MILAGROS/MLE WHICH WERE INCURRED AFTER THE DATE OF THE SAID TRANSFER.
2. SAID TRANSFER COVERED ONLY FORESTRY CHARGES AND OTHER GOVERNMENT FEES, AND DID NOT INCLUDE THE PERSONAL LIABILITY OF MILAGROS/MLE THAT AROSE FROM THE ENCROACHMENT OF THE TIMBER CONCESSION OF RESPONDENT DAVENCOR. 25

Private Respondents DAVENCOR and the public respondent Hon. Minister (now Secretary) of Natural Resources filed separate Comments 26 on September 5, 1991 and June 8, 1992 respectively. The essential issues of the present controversy boil down to the following:

Was the Petitioner denied due process when it was adjudged liable with MLE for encroaching upon the timber concession of DAVENCOR in the respondent Minister's Order of Execution? Is the petitioner a transferee of MLE's interest, as to make it liable for the latter's illegal logging operations in DAVENCOR's timber concession, or more specially, is it possible to pierce the veil of MIWPI's corporate existence, making it a mere conduit or successor of MLE? Generally accepted is the principle that no man shall be affected by any proceeding to which he is a stranger, and strangers to a case not bound by judgment rendered by the court. In the same manner an execution can be issued only against a party and not against one who did not have his day in court. In Lorenzo vs. Cayetano, 78 SCRA 485 [1987], this Court held that only real parties in interest in an action are bound by judgment therein and by writs of execution and demolition issued pursuant thereto. 27 Indeed a judgment cannot bind persons who are not parties to the action. 28 It is elementary that strangers to a case are not bound by the judgment rendered by the court and such judgment is not available as an adjudication either against or in favor of such other person. A decision of a court will not operate to divest the rights of a person who has not and has never been a party to a litigation, either as plaintiff or as defendant. Execution of a judgment can only be issued against one who is a party to the action, and not against one who, not being a party in the action has not yet had his day in court. 29 The writ of execution must conform to the judgment which is to be executed, as it may not vary the terms of the judgment it seeks to enforce. 30 Nor may it go beyond the terms of the judgment sought to be executed. Where the execution is not in harmony with the judgment which gives it life and exceeds it, it has pro tanto no validity. To maintain otherwise would be to ignore the constitutional provision against depriving a person of his property without due process of law. 31 The writ of execution issued by the Secretary of Natural Resources on January 8, 1987 clearly varies the term of his Decision of October 1, 1986, inasmuch as the Writ includes the MIWPI as party liable whereas the Decision only mentions Milagros Matuguina/MLE. There is no basis for the issuance of the Order of Execution against the petitioner. The same was issued without giving the petitioner an opportunity to defend itself and oppose the request of DAVENCOR for the issuance of a writ of execution against it. In fact, it does not appear that petitioner was at all furnished with a copy of DAVENCOR's letter requesting for the Execution of the Honorable Secretary's decision against it. Petitioner was suddenly made liable upon the order of execution by the respondent Secretary's expedient conclusions that MLE and MIWPI are one and the same, apparently on the basis merely of DAVENCOR's letter requesting for the Order, and without hearing or impleading MIWPI. Until the issuance of the Order of execution, petitioner was not included or mentioned in the proceedings as having any participation in the encroachment in DAVENCOR's timber concession. This action of the respondent Secretary disregards the most basis tenets of due process and elementary fairness. The liberal atmosphere which pervades the procedure in administrative proceedings does not empower the presiding officer to make conclusions of fact before hearing all the parties concerned. 32 In Police Commission vs.Hon. Judge Lood, 33 we held that the formalities usually attendant in court hearings need not be present in an administrative investigation, provided that the parties are heard given the opportunity to adduce their evidence. The right to notice and hearing is essential to due process and its non-observance will, as a rule, invalidate the administrative proceedings.

As observed by the appellate court, to writ:


the appellant should have filed a Motion with the Minister with Notice to the appellee to include the latter as party liable for the judgment in order to afford the appellee an opportunity to be heard on its liability for the judgment rendered against Ma. Milagros Matuguina doing business under the name Matuguina Logging Enterprises. 34

Continuing, the said court stated further that: Nevertheless, the failure to comply with the procedure in order to satisfy the requirements of due process was cured by the present action for prohibition where the liability of appellee has been ventilated. We do not agree. Essential, Prohibition is a remedy to prevent inferior courts, corporations, boards or persons from usurping or exercising a jurisdiction or power with which they have not been vested by law 35 As we have held in Mafinco Trading Corporation vs. Ople, et al, 36 in a certiorari or prohibition case, only issues affecting the jurisdiction of the tribunal, board and offices involved may be resolved on the basis of undisputed facts. The issue of whether or not petitioner is an alter ego of Milagros Matuguina/MLE, is one of fact, and which should have been threshed out in the administrative proceedings, and not in the prohibition proceedings in the trial court, where it is precisely the failure of the respondent Minister of Natural Resources to proceed as mandated by law in the execution of its order which is under scrutiny. Assuming, arguendo, that prohibition is the proper remedy for determining the propriety of piercing the separate personality of petitioner with its stockholders, the evidence presented at said trial does not warrant such action. It is settled that a corporation is clothed with personality separate and distinct from that of the persons composing it. It may not generally be held liable for that of the persons composing it. It may not be held liable for the personal indebtedness of its stockholders or those of the entities connected with it. Conversely, a stockholder cannot be made to answer for any of its financial obligations even if he should be its president. 37 But when the juridical personality of the corporation is used to defeat public convenience, justify wrong, protect fraud or defend crime, the corporation shall be considered as a mere association of persons (Koppel, Inc. vs. Yatco, 77 Phil 496, Palay, Inc. vs. Clave, G.R. No. 56076, September 21, 1983, 124 SCRA 638), and its responsible officers and/or stockholders shall be individually liable (Namarco vs. Associated Finance Co., Inc., G.R. No. L-20886, April 27, 1967, 19 SCRA 962). For the same reasons, a corporation shall be liable for the obligations of a stockholder (Palacio vs. Fely Transportation Co., G.R No. L-15121, August 31, 1963, 5 SCRA 1011), or a corporation and its successor-in-interest shall be considered as one and the liability of the former shall attach to the latter. 38 But for the separate juridical personality of a corporation to be disregarded, the wrongdoing must be clearly and convincingly established. It cannot be presumed. 39 In the case at bar, there is, insufficient basis for the appellate court's ruling that MIWPI is the same as Matuguina. The trial court's observation is enlightening. Despite apparently opposing evidence of both parties, the Court gathered and finds, that defendant's attempt to pierce the veil of corporate personality of plaintiff corporation, as to consider plaintiff corporations merely an adjunct or alter ego of

Maria Milagros Matuguina Logging Enterprises, to justify defendant's claim against plaintiff corporation, suffers heavily from insufficiency of evidence. It is the vehement contention of defendants, to bolster its claim, that plaintiff corporation is the alter ego of Maria Milagros Matuguina Logging Enterprises, because when Milagros Matuguina became the Chairman of the Board of Directors of plaintiff corporation, she requested for the change of name and transfer of management of PTL No. 30, from her single proprietorship, to plaintiff corporation. Secondly, when Milagros Matuguina executed the deed of transfer, transferring her forest concession under PTL No. 30, together with all the structures and improvements therein, to plaintiff corporation, for a consideration of P14,800.00 representing 148,000 shares of stocks of plaintiff corporation actually all existing shares of stocks of Milagros Matuguina, in plaintiff corporation represents 77.4% therein; suffice to say that plaintiff corporation practically became an alter ego of Milagros Matuguina. Defendant's arguments on this peripheral aspect of corporate existence, do not at all indicate that such a legal fiction, was granted. In the first place, the alleged control of plaintiff corporation was not evident in any particular corporate acts of plaintiff corporation, wherein Maria Milagros Matuguina Logging Enterprises using plaintiff corporation, executed acts or powers directly involving plaintiff corporation. Neither was there any evidence of defendants, that Maria Milagros Matuguina Logging Enterprises, using the facilities and resources of plaintiff corporation, involved itself in transaction using both single proprietorship and plaintiff corporation in such particular line of business undertakings. As stated by this court in resolving plaintiff's prayer for issuance of a writ or preliminary injunction, said: There is actually, no evidence presented by defendant, showing that sometime on March 15, 1986, to January 1987, during which period, the subject decision of Hon. Secretary of Natural Resources and corresponding writ of execution, Maria Milagros Matuguina was a stockholder of plaintiff corporation in such amount or was she an officer of plaintiff corporation in whatever capacity. The above circumstances is relevant and significant to assume any such justification of including plaintiff corporation in the subject writ of execution, otherwise, as maintained by defendants, what matters most was the control of Milagros Matuguina Logging Enterprises of plaintiff corporation in 1974 and 1975, when the administrative case was pending, this circumstance alone without formally including plaintiff corporation in said case, will not create any valid and sufficient justification for plaintiff corporation, to have been supposedly included in the suit against defendants and Maria Milagros Matuguina Logging Enterprises, in the administrative case. Yet, granting as claimed by defendants, that in 1974 or in 1975, Maria Milagros Matuguina became the controlling stockholder of plaintiff corporation, on account of

the change of name and transfer of management of PTL No. 30, this circumstance, we repeat, does not of itself prove that plaintiff corporation was the alter ego of Maria Milagros Matuguina Logging Enterprises, as enunciated in various decisions of this Court, to writ: It is important to bear in mind that mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stocks of the corporation, is not itself a sufficient warrant for disregarding the fiction of separate personality (Liddel and Co. vs. Collector of Internal Revenue, G.R. No. 9687, June 30, 1961). It is recognized as lawful to obtain a corporation charter, even with a single substantial stockholder, to engage in specific activity and such activity may co-exist with other private activities of the stockholder.
If the corporation is substantial one, conducted lawfully; without fraud on another, its separate identity is to be respected. 40

In this jurisdiction, it is a settled rule that conclusions and findings of fact by the trial court are entitled to great weight on appeal and should not be disturbed unless for strong and cogent reasons because the trial court is in a better position to examine real evidence, as well as to observe the demeanor of the witnesses while testifying in the case. 41 It is likewise improper to state that the MIWPI is the privy or the successor-in-interest of MLE, as the liability for the encroachment over DAVENCOR's timber concession is concerned, by reason of the transfer of interest in PTL No. 30 from MLE to MIWPI. First of all, it does not appear indubitable that the said transfer ever became effective, since PTL No. 30 remained in the name of Milagros Matuguina/MLE until it expired on June 30, 1977. 42 More importantly, even if it is deemed that there was a valid change of name and transfer of interest in the PTL No. 30, this only signifies a transfer of authority, from MLE to MIWPI, to conduct logging operations in the area covered by PTL No. 30. It does not show indubitable proof that MIWPI was a mere conduit or successor of Milagros Matuguina/MLE, as far the latter's liability for the encroachment upon DAVENCOR's concession is concerned. This is the only conclusion which we can discern from the language of Section 61 of P.D. 750, 43 and the letters of the Acting Minister of Natural Resources to Milagros Matuguina/MLE and to MIWPI, on September 16, 1975. 44 InSoriano vs. Court of Appeals, this Court stated in clear language, that It is the general rule that the protective mantle of a corporation's separate and distinct personality could only be pierced and liability attached directly to its officers and/or members stockholders, when the same is used for fraudulent, unfair, or illegal purpose. In the case at bar, there is no showing that the Association entered into the transaction with the private respondent for the purpose of defrauding the latter of his goods or the payment thereof. . . . Therefore, the general rule on corporate liability, not the exception, should be applied in resolving this case. (G.R. No. 49834, June 22, 1989) The respondents cite Section 61 of P.D. 705 to establish MIWPI's succession to the liability of Milagros Matuguina/MLE:

Sec. 61. Transfers. Unless authorized by the Department Head, no licensee, lessee, or permittee may transfer, exchange, sell, or convey his license agreement, license, lease or permit, or any of his rights or interests therein, or any of his assets used in connection therewith. The licensee, lessee, or permittee shall be allowed to transfer or convey his license agreement, license, lease, or permit only if he has not violated any forestry law, rule or regulation; has been faithfully complying with the terms and conditions of the license agreement, license, lease or permit; the transferee has all the qualifications and none of the disqualifications to hold a license agreement, license, lease or permit; there is no evidence that such transfer or conveyance is being made for purposes of speculation; and the transferee shall assume all the obligations of the transferor. The transferor shall forever be barred from acquiring another license agreement, license, lease or permit. Even if it is mandated in the abovestated provision that "the transferee shall assume all the obligations of the transferor" this does not mean that all obligations are assumed, indiscriminately. Invariably, it is not the letter, but the spirit of the law and intent of the legislature that is important. When the interpretation of a statute according to the exact and literal import of its words would lead to absurdity, it should be construed according to the spirit and reason, disregarding if necessary the letter of the law. 45 In construing statutes, the terms used therein are generally to be given their ordinary meaning, that is, such meaning which is ascribed to them when they are commonly used, to the end that absurdity in the law must be avoided. 46 The term "obligations" as used in the final clause of the second paragraph of Section 61 of P.D. 705 is construed to mean those obligations incurred by the transferor in the ordinary course of business. It cannot be construed to mean those obligations or liabilities incurred by the transferor as a result of transgressions of the law, as these are personal obligations of the transferor, and could not have been included in the term "obligations" absent any modifying provision to that effect. In the September 16, 1975 letters of Acting Director of the Bureau of Forest Development of Milagros Matuguina and MIWPI informing them of the approval of Matuguina's request for the change of name and transfer of management of PTL No. 30, the following statements were made by the Acting Director:
In view hereof, (Matuguina Integrated Wood Products, Inc.) shall assume the responsibility of paying whatever pending liabilities and/or accounts remaining unsettled, if any, by the former licensee, Milagros Matuguina, with the government. (Emphasis ours) 47

Accordingly, the letter's language implies that the obligations which MIWPI are to assume as transferee of Milagros Matuguina/MLE are those obligations in favor of the government only, and not to any other entity. Thus this would include Forestry Charges, Taxes, Fees, and similar accountabilities. In sum, the Court makes the following pronouncements:

(a) The respondent Honorable Minister of Natural Resources gravely abused its discretion when it issued its Order of Execution on January 6, 1987, including therein as one of the parties liable the petitioner Matuguina Integrated Wood Products, Inc., which was never a party to the assailed proceeding resulting in the issuance of such Order and, without affording the same an opportunity to be heard before it was adjudged liable. (b) The petitioner is a corporate entity separate and distinct from Milagros Matuguina/Matuguina Logging Enterprises, there being no clear basis for considering it as a mere conduit or alter ego of Matuguina/MLE, and therefore, cannot be made liable for the obligations of the same for encroachment over the timber concession of private respondent DAVENCOR. IN VIEW OF THE FOREGOING, the Petition is hereby GRANTED, and the Decision dated February 25, 1991, is SET ASIDE. The decision of the Regional Trial Court is hereby REINSTATED, and correspondingly, Order of Execution of the respondent Secretary of Natural Resources is declared NULL and VOID and without effect. No pronouncement as to costs. SO ORDERED. Regalado, Romero, Puno and Mendoza, JJ., concur.

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G.R. No. 163509 December 6, 2006

PICOP RESOURCES, INC., petitioner, vs. BASE METALS MINERAL RESOURCES CORPORATION, and THE MINES ADJUDICATION BOARD,respondents.

DECISION

TINGA, J.: PICOP Resources, Inc. (PICOP) assails the Decision1 of the Court of Appeals dated November 28, 2003 and its Resolution2 dated May 5, 2004, which respectively denied its petition for review and motion for reconsideration. The undisputed facts quoted from the appellate court's Decision are as follows: In 1987, the Central Mindanao Mining and Development Corporation (CMMCI for brevity) entered into a Mines Operating Agreement (Agreement for brevity) with Banahaw Mining and Development Corporation (Banahaw Mining for brevity) whereby the latter agreed to act as

Mine Operator for the exploration, development, and eventual commercial operation of CMMCI's eighteen (18) mining claims located in Agusan del Sur. 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. Upon its expiration, the temporary permit was subsequently renewed thrice by the Bureau of Mines, the last being on June 28, 1991. 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. In 1991, Banahaw Mining converted its mining claims to applications for Mineral Production Sharing Agreements (MPSA for brevity). While the MPSA were pending, Banahaw Mining, on December 18, 1996, decided to sell/assign its rights and interests over thirty-seven (37) 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 March 10, 1997, private respondent Base Metals amended Banahaw Mining's pending MPSA applications with the Bureau of Mines to substitute itself as applicant and to submit additional documents in support of the application. Area clearances from the DENR Regional Director and Superintendent of the Agusan Marsh and Wildlife Sanctuary were submitted, as required. On October 7, 1997, private respondent Base Metals' amended MPSA applications were published in accordance with the requirements of the Mining Act of 1995. 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. II. THE APPROVAL OF THE APPLICATION WILL DEFEAT THE RIGHTS OF THE HEREIN ADVERSE CLAIMANT AND/OR OPPOSITOR. In its Answer to the Adverse Claim and/or Opposition, private respondent Base Metals alleged that:

a) the Adverse Claim was filed out of time; b) petitioner PICOP has no rights over the mineral resources on their concession area. PICOP is asserting a privilege which is not protected by the non-impairment clause of the Constitution; c) the grant of the MPSA will not impair the rights of PICOP nor create confusion, chaos or conflict. Petitioner PICOP's Reply to the Answer alleged that: a) the Adverse Claim was filed within the reglementary period; b) the grant of MPSA will impair the existing rights of petitioner PICOP; c) the MOA between PICOP and Banahaw Mining provides for recognition by Banahaw Mining of the Presidential Warranty awarded in favor of PICOP for the exclusive possession and enjoyment of said areas. As a Rejoinder, private respondent Base Metals stated that: 1. it is seeking the right to extract the mineral resources in the applied areas. It is not applying for any right to the forest resources within the concession areas of PICOP; 2. timber or forest lands are open to Mining Applications; 3. the grant of the MPSA will not violate the so called "presidential fiat"; 4. the MPSA application of Base Metals does not require the consent of PICOP; and 5. it signified its willingness to enter into a voluntary agreement with PICOP on the matter of compensation for damages. In the absence of such agreement, the matter will be brought to the Panel of Arbitration in accordance with law. In refutation thereto, petitioner PICOP alleged in its Rejoinder that: a) the Adverse Claim filed thru registered mail was sent on time and as prescribed by existing mining laws and rules and regulations; b) the right sought by private respondent Base Metals is not absolute but is subject to existing rights, such as those which the adverse claimant had, that have to be recognized and respected in a manner provided and prescribed by existing laws as will be expounded fully later; c) as a general rule, mining applications within timber or forest lands are subject to existing rights as provided in Section 18 of RA 7942 or the Philippine Mining Act of 1995 and it is an admitted fact by the private respondent that petitioner PICOP had forest rights as per Presidential Warranty;

d) while the Presidential Warranty did not expressly state exclusivity, P.D. 705 strengthened the right of occupation, possession and control over the concession area; e) the provisions of Section 19 of the Act and Section 15 of IRR expressly require the written consent of the forest right holder, PICOP. After the submission of their respective position paper, the Panel Arbitrator issued an Order dated December 21, 1998, the dispositive portion of which reads as: WHEREFORE, premises considered, Mineral Production Sharing Agreement Application Nos. (XIII) 010, 011, 012 of Base Metal Resources Corporation should be set aside. The disapproval of private respondent Base Metals' MPSA was due to the following reasons: Anent the first issue the Panel find (sic) and so hold (sic) that the adverse claim was filed on time, it being mailed on November 19, 1997, at Metro Manila as evidenced by Registry Receipt No. 26714. Under the law (sic) the date of mailing is considered the date of filing. As to whether or not an MPSA application can be granted on area subject of an IFMA3 or PTLA4which is covered by a Presidential Warranty, the panel believes it can not, unless the grantee consents thereto. Without the grantee's consent, the area is considered closed to mining location (sec. 19) (b) (No. 2), DAO No. 96-40). The Panel believe (sic) that mining location in forest or timberland is allowed only if such forest or timberland is not leased by the government to a qualified person or entity. If it is leased the consent of the lessor is necessary, in addition to the area clearance to be issued by the agency concerned before it is subjected to mining operation. Plantation is considered closed to mining locations because it is off tangent to mining. Both are extremes. They can not exist at the same time. The other must necessarily stop before the other operate. On the other hand, Base Metals Mineral Resources Corporation can not insist the MPSA application as assignee of Banahaw. PICOP did not consent to the assignment as embodied in the agreement. Neither did it ratify the Deed of Assignment. Accordingly, it has no force and effect. Thus, for lack of consent, the MPSA must fall. On January 11, 1999, private respondent Base Metals filed a Notice of Appeal with public respondent MAB and alleged in its Appeal Memorandum the following arguments: 1. THE CONSENT OF PICOP IS NOT NECESSARY FOR THE APPROVAL OF BASE METALS' MPSA APPLICATION. 2. EVEN ASSUMING SUCH CONSENT IS NECESSARY, PICOP HAD CONSENTED TO BASE METALS' MPSA APPLICATION. In Answer thereto, petitioner PICOP alleged that:

1. Consent is necessary for the approval of private respondent's MPSA application; 2. Provisions of Memorandum Order No. 98-03 and IFMA 35 are not applicable to the instant case; 3. Provisions of PD 7055 connotes exclusivity for timber license holders; and 4. MOA between private respondent's assignor and adverse claimant provided for the recognition of the latter's rightful claim over the disputed areas. Private respondent Base Metals claimed in its Reply that: 1. The withholding of consent by PICOP derogates the State's power to supervise and control the exploration, utilization and development of all natural resources; 2. Memorandum Order No, 98-03, not being a statute but a mere guideline imposed by the Secretary of the Department of Environment and Natural Resources (DENR), can be applied retroactively to MPSA applications which have not yet been finally resolved; 3. Even assuming that the consent of adverse claimant is necessary for the approval of Base Metals' application (which is denied), such consent had already been given; and 4. The Memorandum of Agreement between adverse claimant and Banahaw Mining proves that the Agusan-Surigao area had been used in the past both for logging and mining operations. After the filing of petitioner PICOP's Reply Memorandum, public respondent rendered the assailed decision setting aside the Panel Arbitrator's order. Accordingly, private respondent Base Metals' MPSA's were reinstated and given due course subject to compliance with the pertinent requirements of the existing rules and regulations.6 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. On PICOP's contention that its consent is necessary for the grant of Base Metals' MPSA, the appellate court ruled that the amendment to PTLA No. 47 refers to the grant of gratuitous permits, which the MPSA subject of this case is not. Further, the amendment pertains to the cutting and extraction of timber for mining purposes and not to the act of mining itself, the intention of the amendment being to protect the timber found in PICOP's concession areas.

The Court of Appeals noted that the reinstatement of the MPSA does not ipso facto revoke, amend, rescind or impair PICOP's timber license. Base Metals still has to comply with the requirements for the grant of a mining permit. The fact, however, that Base Metals had already secured the necessary Area Status and Clearance from the DENR means that the areas applied for are not closed to mining operations. In its Resolution7 dated May 5, 2004, the appellate court denied PICOP's Motion for Reconsideration. It ruled that PICOP failed to substantiate its allegation that the area applied for is a forest reserve and is therefore closed to mining operations because it did not identify the particular law which set aside the contested area as one where mining is prohibited pursuant to applicable laws. The case is now before us for review. In its Memorandum8 dated April 6, 2005, PICOP presents the following issues: (1) the 2,756 hectares subject of Base Metals' MPSA are closed to mining operations except upon PICOP's written consent pursuant to existing laws, rules and regulations and by virtue of the Presidential Warranty; (2) its Presidential Warranty is protected by the non-impairment clause of the Constitution; and (3) it does not raise new issues in its petition. PICOP asserts that its concession areas are closed to mining operations as these are within the Agusan-Surigao-Davao forest reserve established under Proclamation No. 369 of then Gov. Gen. Dwight Davis. The area is allegedly also part of permanent forest established under Republic Act No. 3092 (RA 3092),9 and overlaps the wilderness area where mining applications are expressly prohibited under RA 7586.10 Hence, the area is closed to mining operations under Sec. 19(f) of RA 7942.11 PICOP further asserts that to allow mining over a forest or forest reserve would allegedly be tantamount to changing the classification of the land from forest to mineral land in violation of Sec. 4, Art. XII of the Constitution and Sec. 1 of RA 3092. According to PICOP, in 1962 and 1963, blocks A, B and C within the Agusan-Surigao-Davao forest reserve under Proclamation No. 369 were surveyed as permanent forest blocks in accordance with RA 3092. These areas cover PICOP's PTLA No. 47, part of which later became IFMA No. 35. In turn, the areas set aside as wilderness as in PTLA No. 47 became the initial components of the NIPAS under Sec. 5(a) of RA 7586. When RA 7942 was signed into law, the areas covered by the NIPAS were expressly determined as areas where mineral agreements or financial or technical assistance agreement applications shall not be allowed. PICOP concludes that since there is no evidence that the permanent forest areas within PTLA No. 47 and IFMA No. 35 have been set aside for mining purposes, the MAB and the Court of Appeals gravely erred in reinstating Base Metals' MPSA and, in effect, allowing mining exploration and mining-related activities in the protected areas. PICOP further argues that under DENR Administrative Order (DAO) No. 96-40 implementing RA 7942, an exploration permit must be secured before mining operations in government reservations may be undertaken. There being no exploration permit issued to Banahaw Mining or appended to its MPSA, the MAB and the Court of Appeals should not have reinstated its application. PICOP brings to the Court's attention the case of PICOP Resources, Inc. v. Hon. Heherson T. Alvarez,12 wherein the Court of Appeals ruled that the Presidential Warranty issued to PICOP for its TLA No. 43 dated July 29, 1969, a TLA distinct from PTLA No. 47 involved in this case, is a valid contract involving mutual prestations on the part of the Government and PICOP.

The Presidential Warranty in this case is allegedly not a mere confirmation of PICOP's timber license but a commitment on the part of the Government that in consideration of PICOP's investment in the wood-processing business, the Government will assure the availability of the supply of raw materials at levels adequate to meet projected utilization requirements. The guarantee that PICOP will have peaceful and adequate possession and enjoyment of its concession areas is impaired by the reinstatement of Base Metals' MPSA in that the latter's mining activities underneath the area in dispute will surely undermine PICOP's supply of raw materials on the surface. Base Metals' obtention of area status and clearance from the DENR is allegedly immaterial, even misleading. The findings of the DENR Regional Disrector and the superintendent of the Agusan Marsh and Wildlife Sanctuary are allegedly misplaced because the area applied for is not inside the Agusan Marsh but in a permanent forest. Moreover, the remarks in the area status itself should have been considered by the MAB and the appellate court as they point out that the application encroaches on surveyed timberland projects declared as permanent forests/forest reserves. Finally, PICOP insists that it has always maintained that the forest areas of PTLA No. 47 and IFMA No. 35 are closed to mining operations. The grounds relied upon in this petition are thus not new issues but merely amplifications, clarifications and detailed expositions of the relevant constitutional provisions and statutes regulating the use and preservation of forest reserves, permanent forest, and protected wilderness areas given that the areas subject of the MPSA are within and overlap PICOP's PTLA No. 47 and IFMA No. 35 which have been classified and blocked not only as permanent forest but also as protected wilderness area forming an integral part of the Agusan-Davao-Surigao Forest Reserve. In its undated Memorandum,13 Base Metals contends that PICOP never made any reference to land classification or the exclusion of the contested area from exploration and mining activities except in the motion for reconsideration it filed with the Court of Appeals. PICOP's object to the MPSA was allegedly based exclusively on the ground that the application, if allowed to proceed, would constitute a violation of the constitutional proscription against impairment of the obligation of contracts. It was upon this issue that the appellate court hinged its Decision in favor of Base Metals, ruling that the Presidential Warranty merely confirmed PICOP's timber license. The instant petition, which raises new issues and invokes RA 3092 and RA 7586, is an unwarranted departure from the settled rule that only issues raised in the proceedings a quo may be elevated on appeal. Base Metals notes that RA 7586 expressly requires that there be a prior presidential decree, presidential proclamation, or executive order issued by the President of the Philippines, expressly proclaiming, designating, and setting aside the wilderness area before the same may be considered part of the NIPAS as a protected area. Allegedly, PICOP has not shown that such an express presidential proclamation exists setting aside the subject area as a forest reserve, and excluding the same from the commerce of man. PICOP also allegedly misquoted Sec. 19 of RA 7942 by placing a comma between the words "watershed" and "forest" thereby giving an altogether different and misleading interpretation of the cited provision. The cited provision, in fact, states that for an area to be closed to mining applications, the same must be a watershed forest reserve duly identified and proclaimed by the President of the Philippines. In this case, no presidential proclamation exists setting aside the contested area as such. Moreover, the Memorandum of Agreement between Banahaw Mining and PICOP is allegedly a clear and tacit recognition by the latter that the area is open and available for mining activities and that Banahaw Mining has a right to enter and explore the areas covered by its mining claims.

Base Metals reiterates that the non-impairment clause is a limit on the exercise of legislative power and not of judicial or quasi-judicial power. The Constitution prohibits the passage of a law which enlarges, abridges or in any manner changes the intention of the contracting parties. The decision of the MAB and the Court of Appeals are not legislative acts within the purview of the constitutional proscription. Besides, the Presidential Warranty is not a contract that may be impaired by the reinstatement of the MPSA. It is a mere confirmation of PICOP's timber license and draws its life from PTLA No. 47. Furthermore, PICOP fails to show how the reinstatement of the MPSA will impair its timber license. Following the regalian doctrine, Base Metals avers that the State may opt to enter into contractual arrangements for the exploration, development, and extraction of minerals even it the same should mean amending, revising, or even revoking PICOP's timber license. To require the State to secure PICOP's prior consent before it can enter into such contracts allegedly constitutes an undue delegation of sovereign power. Base Metals further notes that Presidential Decree No. 705 (PD 705), under which PTLA No. 47, IFMA No. 35 and the Presidential Warranty were issued, requires notice to PICOP rather than consent before any mining activity can be commenced in the latter's concession areas. The Office of the Solicitor General (OSG) filed a Memorandum14 dated April 21, 2005 on behalf of the MAB, contending that PICOP's attempt to raise new issues, such as its argument that the contested area is classified as a permanent forest and hence, closed to mining activities, is offensive to due process and should not be allowed. The OSG argues that a timber license is not a contract within the purview of the due process and non-impairment clauses. The Presidential Warranty merely guarantees PICOP's tenure over its concession area and covers only the right to cut, collect and remove timber therein. It is a mere collateral undertaking and cannot amplify PICOP's rights under its PTLA No. 47 and IFMA No. 35. To hold that the Presidential Warranty is a contract separate from PICOP's timber license effectively gives the latter PICOP an exclusive, perpetual and irrevocable right over its concession area and impairs the State's sovereign exercise of its power over the exploration, development, and utilization of natural resources. The case of PICOP Resources, Inc. v. Hon. Heherson T. Alvarez, supra, cited by PICOP cannot be relied upon to buttress the latter's claim that a presidential warranty is a valid and subsisting contract between PICOP and the Government because the decision of the appellate court in that case is still pending review before the Court's Second Division. The OSG further asserts that mining operations are legally permissible over PICOP's concession areas. Allegedly, what is closed to mining applications under RA 7942 are areas proclaimed as watershed forest reserves. The law does not totally prohibit mining operations over forest reserves. On the contrary, Sec. 18 of RA 7942 permits mining over forest lands subject to existing rights and reservations, and PD 705 allows mining over forest lands and forest reservations subject to State regulation and mining laws. Sec. 19(a) of RA 7942 also provides that mineral activities may be allowed even over military and other government reservations as long as there is a prior written clearance by the government agency concerned. The area status clearances obtained by Base Metals also allegedly show that the area covered by the MPSA is within timberland, unclassified public forest, and alienable and disposable land. Moreover, PICOP allegedly chose to cite portions of Apex Mining Corporation v. Garcia,15 to make it appear that the Court in that case ruled that mining is absolutely prohibited in the Agusan-SurigaoDavao Forest Reserve. In fact, the Court held that the area is not open to mining location because

the proper procedure is to file an application for a permit to prospect with the Bureau of Forest and Development. In addition, PICOP's claimed wilderness area has not been designated as a protected area that would operate to bar mining operations therein. PICOP failed to prove that the alleged wilderness area has been designated as an initial component of the NIPAS pursuant to a law, presidential decree, presidential proclamation or executive order. Hence, it cannot correctly claim that the same falls within the coverage of the restrictive provisions of RA 7586. The OSG points out that the Administrative Code of 1917 which RA 3092 amended has been completely repealed by the Administrative Code of 1978. Sec. 4, Art. XII of the 1987 Constitution, on the other hand, provides that Congress shall determine the specific limits of forest lands and national parks, marking clearly their boundaries on the ground. Once this is done, the area thus covered by said forest lands and national parks may not be expanded or reduced except also by congressional legislation. Since Congress has yet to enact a law determining the specific limits of the forest lands covered by Proclamation No. 369 and marking clearly its boundaries on the ground, there can be no occasion that could give rise to a violation of the constitutional provision. Moreover, Clauses 10 and 14 of PICOP's IFMA No. 35 specifically provides that the area covered by the agreement is open for mining if public interest so requires. Likewise, PTLA No. 47 provides that the area covered by the license agreement may be opened for mining purposes. Finally, the OSG maintains that pursuant to the State's policy of multiple land use, R.A. No. 7942 provides for appropriate measures for a harmonized utilization of the forest resources and compensation for whatever damage done to the property of the surface owner or concessionaire as a consequence of mining operations. Multiple land use is best demonstrated by the Memorandum of Agreement between PICOP and Banahaw Mining. First, the procedural question of whether PICOP is raising new issues in the instant petition. It is the contention of the OSG and Base Metals that PICOP's argument that the area covered by the MPSA is classified as permanent forest and therefore closed to mining activities was raised for the first time in PICOP's motion for reconsideration with the Court of Appeals. Our own perusal of the records of this case reveals that this is not entirely true. In its Adverse Claim and/or Opposition16 dated November 19, 1997 filed with the MGB Panel of Arbitrators, PICOP already raised the argument that the area applied for by Base Metals is classified as a permanent forest determined to be needed for forest purposes pursuant to par. 6, Sec. 3 of PD 705, as amended. PICOP then proceeded to claim that the area should remain forest land if the purpose of the presidential fiat were to be followed. It stated: Technically, the areas applied for by Base Metals are classified as a permanent forest being land of the public domain determined to be needed for forest purposes (Paragraph 6, Section 3 of Presidential Decree No. 705, as amended) If these areas then are classified and determined to be needed for forest purpose then they should be developed and should remain as forest lands. Identifying, delineating and declaring them for other use or uses defeats the purpose of the aforecited presidential fiats. Again, if these areas would be delineated from Oppositor's forest concession, the forest therein would be destroyed and be lost beyond recovery.17

Base Metals met this argument head on in its Answer18 dated December 1, 1997, in which it contended that PD 705 does not exclude mining operations in forest lands but merely requires that there be proper notice to the licensees of the area. Again in its Petition19 dated January 25, 2003 assailing the reinstatement of Base Metals' MPSA, PICOP argued that RA 7942 expressly prohibits mining operations in plantation areas such as PICOP's concession area. Hence, it posited that the MGB Panel of Arbitrators did not commit grave abuse of discretion when it ruled that without PICOP's consent, the area is closed to mining location. It is true though that PICOP expounded on the applicability of RA 3092, RA 7586, and RA 7942 for the first time in its motion for reconsideration of the appellate court's Decision. It was only in its motion for reconsideration that PICOP argued that the area covered by PTLA No. 47 and IFMA No. 35 are permanent forest lands covered by RA 7586 which cannot be entered for mining purposes, and shall remain indefinitely as such for forest uses and cannot be excluded or diverted for other uses except after reclassification through a law enacted by Congress. Even so, we hold that that the so-called new issues raised by PICOP are well within the issues framed by the parties in the proceedings a quo. Thus, they are not, strictly speaking, being raised for the first time on appeal.20Besides, Base Metals and the OSG have been given ample opportunity, by way of the pleadings filed with this Court, to respond to PICOP's arguments. It is in the best interest of justice that we settle the crucial question of whether the concession area in dispute is open to mining activities. We should state at this juncture that the policy of multiple land use is enshrined in our laws towards the end that the country's natural resources may be rationally explored, developed, utilized and conserved. The Whereas clauses and declaration of policies of PD 705 state: WHEREAS, proper classification, management and utilization of the lands of the public domain to maximize their productivity to meet the demands of our increasing population is urgently needed; WHEREAS, to achieve the above purpose, it is necessary to reassess the multiple uses of forest lands and resources before allowing any utilization thereof to optimize the benefits that can be derived therefrom; Sec. 2. Policies.The State hereby adopts the following policies: a) The multiple uses of forest lands shall be oriented to the development and progress requirements of the country, the advancement of science and technology, and the public welfare; In like manner, RA 7942, recognizing the equiponderance between mining and timber rights, gives a mining contractor the right to enter a timber concession and cut timber therein provided that the surface owner or concessionaire shall be properly compensated for any damage done to the property as a consequence of mining operations. The pertinent provisions on auxiliary mining rights state: Sec. 72. Timber Rights.Any provision of law to the contrary notwithstanding, a contractor may be granted a right to cut trees or timber within his mining areas as may be necessary for

his mining operations subject to forestry laws, rules and regulations: Provided, That if the land covered by the mining area is already covered by existing timber concessions, the volume of timber needed and the manner of cutting and removal thereof shall be determined by the mines regional director, upon consultation with the contractor, the timber concessionair/permittee and the Forest Management Bureau of the Department: Provided, further, That in case of disagreement between the contractor and the timber concessionaire, the matter shall be submitted to the Secretary whose decision shall be final. The contractor shall perform reforestation work within his mining area in accordance with forestry laws, rules and regulations. Sec. 76. Entry into Private Lands and Concession Areas.Subject to prior notification, holders of mining rights shall not be prevented from entry into private lands and concession areas by surface owners, occupants, or concessionaires when conducting mining operations therein: Provided, That any damage done to the property of the surface owner, occupant, or concessionaire as a consequence of such operations shall be properly compensated as may be provided for in the implementing rules and regulations: Provided, further, That to guarantee such compensation, the person authorized to conduct mining operation shall, prior thereto, post a bond with the regional director based on the type of properties, the prevailing prices in and around the area where the mining operations are to be conducted, with surety or sureties satisfactory to the regional director. With the foregoing predicates, we shall now proceed to analyze PICOP's averments. PICOP contends that its concession area is within the Agusan-Surigao-Davao Forest Reserve established under Proclamation No. 369 and is closed to mining application citing several paragraphs of Sec. 19 of RA 7942. The cited provision states: Sec. 19 Areas Closed to Mining Applications.Mineral agreement or financial or technical assistance agreement applications shall not be allowed: (a) In military and other government reservations, except upon prior written clearance by the government agency concerned; (d) In areas expressly prohibited by law; (f) Old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas, mangrove forests, mossy forests, national parks, provincial/municipal forests, parks, greenbelts, game refuge and bird sanctuaries as defined by law in areas expressly prohibited under the National Ingrated Protected Areas System (NIPAS) under Republic Act No. 7586, Department Administrative Order No. 25, series of 1992 and other laws. [emphasis supplied] We analyzed each of the categories under which PICOP claims that its concession area is closed to mining activities and conclude that PICOP's contention must fail.

Firstly, assuming that the area covered by Base Metals' MPSA is a government reservation, defined as proclaimed reserved lands for specific purposes other than mineral reservations,21 such does not necessarily preclude mining activities in the area. Sec. 15(b) of DAO 96-40 provides that government reservations may be opened for mining applications upon prior written clearance by the government agency having jurisdiction over such reservation. Sec. 6 of RA 7942 also provides that mining operations in reserved lands other than mineral reservations may be undertaken by the DENR, subject to certain limitations. It provides: Sec. 6. Other Reservations.Mining operations in reserved lands other than mineral reservations may be undertaken by the Department, subject to limitations as herein provided. In the event that the Department cannot undertake such activities, they may be undertaken by a qualified person in accordance with the rules and regulations promulgated by the Secretary. The right to develop and utilize the minerals found therein shall be awarded by the President under such terms and conditions as recommended by the Director and approved by the Secretary: Provided, That the party who undertook the exploration of said reservations shall be given priority. The mineral land so awarded shall be automatically excluded from the reservation during the term of the agreement: Provided, further, That the right of the lessee of a valid mining contract existing within the reservation at the time of its establishment shall not be prejudiced or impaired. Secondly, RA 7942 does not disallow mining applications in all forest reserves but only those proclaimed aswatershed forest reserves. There is no evidence in this case that the area covered by Base Metals' MPSA has been proclaimed as watershed forest reserves. Even granting that the area covered by the MPSA is part of the Agusan-Davao-Surigao Forest Reserve, such does not necessarily signify that the area is absolutely closed to mining activities. Contrary to PICOP's obvious misreading of our decision in Apex Mining Co., Inc. v. Garcia, supra, to the effect that mineral agreements are not allowed in the forest reserve established under Proclamation 369, the Court in that case actually ruled that pursuant to PD 463 as amended by PD 1385, one can acquire mining rights within forest reserves, such as the Agusan-Davao-Surigao Forest Reserve, by initially applying for a permit to prospect with the Bureau of Forest and Development and subsequently for a permit to explore with the Bureau of Mines and Geosciences. Moreover, Sec. 18 RA 7942 allows mining even in timberland or forestty subject to existing rights and reservations. It provides: Sec. 18. Areas Open to Mining Operations.Subject to any existing rights or reservations and prior agreements of all parties, all mineral resources in public or private lands, including timber or forestlands as defined in existing laws, shall be open to mineral agreements or financial or technical assistance agreement applications. Any conflict that may arise under this provision shall be heard and resolved by the panel of arbitrators. Similarly, Sec. 47 of PD 705 permits mining operations in forest lands which include the public forest, the permanent forest or forest reserves, and forest reservations.22 It states: Sec. 47. Mining Operations.Mining operations in forest lands shall be regulated and conducted with due regard to protection, development and utilization of other surface resources. Location, prospecting, exploration, utilization or exploitation of mineral resources in forest reservations shall be governed by mining laws, rules and regulations. No location, prospecting, exploration, utilization, or exploitation of mineral resources inside forest

concessions shall be allowed unless proper notice has been served upon the licensees thereof and the prior approval of the Director, secured. Significantly, the above-quoted provision does not require that the consent of existing licensees be obtained but that they be notified before mining activities may be commenced inside forest concessions. DENR Memorandum Order No. 03-98, which provides the guidelines in the issuance of area status and clearance or consent for mining applications pursuant to RA 7942, provides that timber or forest lands, military and other government reservations, forest reservations, forest reserves other than critical watershed forest reserves, and existing DENR Project Areas within timber or forest lands, reservations and reserves, among others, are open to mining applications subject to area status and clearance. To this end, area status clearances or land status certifications have been issued to Base Metals relative to its mining right application, to wit: II. MPSA No. 010 1. Portion colored green is the area covered by the aforestated Timberland Project No. 31-E, Block A and Project No. 59-C, Block A, L.C. Map No. 2466 certified as such on June 30, 1961; and 2. Shaded brown represent CADC claim.23 III. MPSA No. 011 1. The area applied covers the Timberland, portion of Project No. 31-E, Block-E, L.C. Map No. 2468 and Project No. 36-A Block II, Alienable and Disposable Land, L.C. Map No. 1822, certified as such on June 30, 1961 and January 1, 1955, respectively; 2. The green shade is the remaining portion of Timber Land Project; 3. The portion colored brown is an applied and CADC areas; 4. Red shade denotes alienable and disposable land.24 IV. MPSA No. 012 Respectfully returned herewith is the folder of Base Metals Mineral Resources Corporation, applied under Mineral Production Sharing Agreement (MPSA (XIII) 012), referred to this office per memorandum dated August 5, 1997 for Land status certification and the findings based on available references file this office, the site is within the unclassified Public Forest of the LGU, Rosario, Agusan del Sur. The shaded portion is the wilderness area of PICOP Resources Incorporated (PRI), Timber License Agreement.25 V. MPSA No. 013

1. The area status shaded green falls within Timber Land, portion of Project No. 31E, Block-A, Project No. 59-C, Block-A, L.C. Map No. 2468 certified as such on June 30, 1961; 2. Colored brown denotes a portion claimed as CADC areas; 3. Violet shade represent a part of reforestation project of PRI concession; and 4. The yellow color is identical to unclassified Public Forest of said LGU and the area inclosed in Red is the wilderness area of PICOP Resources, Inc. (PRI), Timber License Agreement.26 Thirdly, PICOP failed to present any evidence that the area covered by the MPSA is a protected wilderness area designated as an initial component of the NIPAS pursuant to a law, presidential decree, presidential proclamation or executive order as required by RA 7586. Sec. 5(a) of RA 7586 provides: Sec. 5. Establishment and Extent of the System.The establishment and operationalization of the System shall involve the following: (a) All areas or islands in the Philippines proclaimed, designated or set aside, pursuant to a law, presidential decree, presidential proclamation or executive order as national park, game refuge, bird and wildlife sanctuary, wilderness area, strict nature reserve, watershed, mangrove reserve, fish sanctuary, natural and historical landmark, protected and managed landscape/seascape as well as identified virgin forests before the effectivity of this Act are hereby designated as initial components of the System. The initial components of the System shall be governed by existing laws, rules and regulations, not inconsistent with this Act. Although the above-cited area status and clearances, particularly those pertaining to MPSA Nos. 012 and 013, state that portions thereof are within the wilderness area of PICOP, there is no showing that this supposed wilderness area has been proclaimed, designated or set aside as such, pursuant to a law, presidential decree, presidential proclamation or executive order. It should be emphasized that it is only when this area has been so designated that Sec. 20 of RA 7586, which prohibits mineral locating within protected areas, becomes operational. From the foregoing, there is clearly no merit to PICOP's contention that the area covered by Base Metals' MPSA is, by law, closed to mining activities. Finally, we do not subscribe to PICOP's argument that the Presidential Warranty dated September 25, 1968 is a contract protected by the non-impairment clause of the 1987 Constitution. 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 be considered a contract distinct from PTLA No. 47 and IFMA No. 35. We agree with the OSG's position that it is merely a collateral undertaking which cannot amplify PICOP's rights under its timber license. Our definitive ruling in Oposa v. Factoran27 that a timber license is not a contract within the purview of the non-impairment clause is edifying. We declared: Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protected by the due process clause of the Constitution. In Tan vs. Director of Forestry, this Court held: "x x x A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is only a license or a privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in this case. 'A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it a property or a property right, nor does it create a vested right; nor is it taxation' (C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights, neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576). x x x" We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: "x x x Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302]." Since timber licenses are not contracts, the non-impairment clause, which reads: "Sec. 10. No law impairing the obligation of contracts shall be passed." cannot be invoked.28 [emphasis supplied] 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. In closing, we should lay emphasis on the fact that the reinstatement of Base Metals' MPSA does not automatically result in its approval. Base Metals still has to comply with the requirements outlined

in DAO 96-40, including the publication/posting/radio announcement of its mineral agreement application. IN VIEW OF THE FOREGOING, the instant petition is DENIED. The Decision of the Court of Appeals November 28, 2003 is AFFIRMED. No pronouncement as to costs. SO ORDERED. Quisumbing, J., Chairperson, Carpio, Carpio Morales, and Velasco, Jr., JJ., concur.

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G.R. No. L-41958 July 20, 1982 DONALD MEAD, petitioner, vs. HON. MANUEL A. ARGEL in his capacity as Presiding Judge in the Court of First Instance of Rizal, Branch XXXV and the PEOPLE OF THE PHILIPPINES, respondents. Ozaeta, Romulo, De Leon & Reyes & Associates for petitioner. Solicitor General Estelito P. Mendoza, Acting Solicitor General Hugo Gutierrez, Jr., Asst. Solicitor General Octavio R. Ramirez and Solicitor Mariano M. Martinez for respondents.

VASQUEZ, J.: The issue posed for determination in this case is whether or not a Provincial Fiscal has the authority to file an information for a violation of Republic Act No. 3931, entitled "An Act Creating a National Water and Air Pollution Control Commission." On March 11, 1975, petitioner Donald Mead and a certain Isaac Arivas were charged by the Provincial Fiscal of Rizal with a violation of Section 9, in relation to Section 10 of Republic Act No. 3931, under an information reading as follows: That on or about the 23rd day of August, 1972, and for some time prior and subsequent thereto, in the municipality of Malabon, province of Rizal, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, being then the president and the general manager, respectively, of the Insular Oil Refinery Co. (INSOIL) a corporation duly organized in accordance with existing laws, conspiring and confederating together and mutually helping and aiding one another, did then and there willfully, unlawfully and feloniously drain or otherwise dispose into the highway canal and/or cause, permit, suffer to be drained or allow to seep into such waterway the industrial and other waste matters discharged due to the operation of the said Insular Oil Refinery Co. so managed and operated by them, thereby causing pollution of such waterway with the resulting damage and/or destruction to the living plants in the vicinity and providing hazard to health and property in the same vicinity.

The case was docketed as Criminal Case No. C-5984-75 and it was subsequently assigned to Branch XXXV of the Court of First Instance of Rizal (Caloocan City) presided over by the respondent Judge. On August 11, 1975, petitioner Donald Mead, one of the accused in the criminal case, filed a motion to quash on the grounds that the trial court has no jurisdiction and that the Provincial Fiscal of Rizal has no legal personality to file the above-quoted information. The motion to quash was denied by the respondent Judge in an Order dated September 5, 1975. A Motion For Reconsideration filed by the petitioner was also denied by the respondent Judge in his Order of November 10, 1965. Hence, this petition for certiorari with preliminary injunction to annul the said orders of the respondent Judge who allegedly acted in excess of or without jurisdiction in issuing the same. In Our Resolution dated November 28, 1975, the respondents were required to comment on the petition and a temporary restraining order was issued to enjoin the respondent Judge from enforcing his questioned orders until otherwise directed by this Court. It is the principal contention of the petitioner that the National Water and Air Pollution Control Commission (hereinafter referred to as the "Commission") as created under Republic Act No. 3931 has the exclusive authority to determine the existence of "pollution" before a criminal case can be filed for a violation of the said law; and that it has the exclusive authority to prosecute violations of the same. Petitioner further avers that the Commission not having finally ruled that the petitioner has violated Republic Act No. 3931, the Provincial Fiscal of Rizal lacks the authority to prosecute the petitioner for a violation of said law. The respondents, on the other hand, maintain that while Republic Act No. 3931 grants the power and duty to the Commission to investigate and prosecute violations of Republic Act No. 3931, such grant of power and authority is not exclusive, and does not deprive fiscals and other public prosecutors of their authority to investigate and prosecute violations of the said law committed within their respective jurisdictions. Before discussing the main issue on its merits, We deem it necessary to resolve a procedural question raised by the respondents in support of their prayer that the instant petition should not be entertained. Respondents advert to the rule that when a motion to quash filed by an accused in a criminal case shall be denied, the remedy of the accused- movant is not to file a petition for certiorari or mandamus or prohibition, the proper recourse being to go to trial, without prejudice to his right to reiterate the grounds invoked in his motion to quash if an adverse judgment is rendered against him, in the appeal that he may take therefrom in the manner authorized by law. (Mill vs. People, et al., 101 Phil. 599; Echarol us. Purisima, et al, 13 SCRA 309.) There is no disputing the validity and wisdom of the rule invoked by the respondents. However, it is also recognized that, under certain situations, recourse to the extraordinary legal remedies of certiorari, prohibition or mandamus to question the denial of a motion to quash is considered proper in the interest of "more enlightened and substantial justice", as was so declared in "Yap vs. Lutero", G.R. No. L-12669, April 30, 1969, 105 Phil. 3007: However, were we to require adherence to this pretense, the case at bar would have to be dismissed and petitioner required to go through the inconvenience, not to say the mental agony and torture, of submitting himself to trial on the merits in Case No. 16443, apart from the expenses incidental thereto, despite the fact that his trial and conviction therein would violate one of this constitutional rights, and that, an appeal to this Court, we would, therefore, have to set aside the judgment of conviction of the lower court. This would, obviously, be most unfair and unjust. Under the

circumstances obtaining in the present case, the flaw in the procedure followed by petitioner herein may be overlooked, in the interest of a more enlightened and substantial justice. To the same effect is the pronouncement in "Pineda and Ampil Manufacturing Co., vs. Bartolome, et al.," 95 Phil., 930938, expressed as follows: While a denial of a motion to dismiss for lack of jurisdiction was held not to be a proper basis for a petition for certiorari [Nico vs. Blanco, 46 Off. Gaz., Supp. (1) 88; 81 Phil., 2131, or an appeal not certiorari is the proper remedy for correcting an error which a lower court may commit in denying a motion to set aside a judgment, or in setting aside an order of dismissal, [Rios vs. Ros et al., 45 Off. Gaz. (No. 3), 1265; 79 Phil. 243; Santos vs. Pecson, 45 Off. Gaz. (No. 3), 1278; 79 Phil.754] however, in some instances, the Supreme Court has departed from the general rule and has entertained the writ notwithstanding the existence of an appeal. Thus, in one case the Supreme Court took cognizance of a petition for certiorari notwithstanding the fact that the accused could have appealed in due time when it found that the action was necessary to promote public welfare and public policy (People vs. Zulueta, 89 Phil. 880). In another case, a petition for certiorari to annul an order of the trial judge admitting an amended information was entertained although the accused had an adequate remedy by appeal "inasmuch as the Surplus Property cases have attracted nationwide attention, making it essential to proceed with dispatch in the consideration thereof. (People vs, Zulueta, supra. Citing Arevalo vs. Nepomuceno, 63 Phil., 627.) And still in another case, the writ was entertained where the appeal was found not to be adequate remedy, as where the order which is sought to be reviewed is merely of interlocutory or peremptory character, and the appeal therefrom can be interposed only after final judgment and may therefore be of no avail. (Rocha vs. Crossfield, 6 Phil., 355; Leung Ben vs. O'Brien, 38 Phil., 182. See also Mendoza vs. Parungao, 49 Phil., 271; Dais vs. Court of First Instance, 51 Phil., 36). For analogous reasons it may be said that the petition for certiorari interposed by the accused against the order of the court a quo denying the motion to quash may be entertained, not only because it was rendered in a criminal case, but because it was rendered, as claimed, with grave abuse of discretion, as found by the Court of Appeals, it would be indeed unfair and unjust, if not derogatory of their constitutional right, to force the accused to go to trial under an information which, in their opinion, as was found, accuses them of multiple offenses in contravention of law. And so, in our opinion, the respondent court did not err in entertaining the petition for certiorari instead of dismissing it, as claimed. The motion to quash filed by the accused in Yap vs. Lutero was on the ground of double jeopardy. In Pineda vs. Bartolome, the ground invoked was duplicity of offenses charged in the information. In the case at bar, the petitioner assails the very jurisdiction of the court wherein the criminal case was filed, Certainly, there is a more compelling reason that such issue be resolved soonest, in order to avoid the court's spending precious time and energy unnecessarily in trying and deciding the case, and to spare the accused from the inconvenience, anxiety and embarrassment, let alone the expenditure of effort and money, in undergoing trial for a case the proceedings in which could possibly be annuled for want of jurisdiction. Even in civil actions, We have counselled that when the court's jurisdiction is attacked in a motion to dismiss, it is the duty of the court to resolve the same as soon as possible in order to avoid the unwholesome consequences mentioned above.

It is also advanced that the present petition is premature, since respondent court has not definitely ruled on the motion to dismiss, nor held that it has jurisdiction, but only argument is untenable. The motion to dismiss was predicated on the respondent court's lack of jurisdiction to entertain the action, and the rulings of this Court are that writs of certiorari or prohibition, or both, may issue in case of a denial or deferment of action on such a motion to dismiss for lack of jurisdiction. If the question of jurisdiction were not the main ground for this petition for review by certiorari, it would be premature because it seeks to have a review of an interlocutory order. But as it would be useless and futile to go ahead with the proceedings if the court below had no jurisdiction this petition was given due course.' (San Beda vs. CIA 51 O.G. 6636, 5638). While it is true that action on a motion to dismiss may be deferred until the trial and an order to that effect is interlocutory, still where it clearly appears that the trial judge or court is proceeding in excess or outside of its jurisdiction, the remedy of prohibition would lie since it would be useless and a waste of time to go ahead with the proceedings. (Philippine International Fair, Inc., et al., vs. Ibanez, et al,50 Off. Gaz. 1036; Enrique vs. Macadaeg, et all 47 Off. Gaz. 1207; see also San Beda College vs. CIR, 51 Off. Gaz. 5636.) (University of Sto. Tomas vs. Villanueva, L-13748, 30 October 1959.) (Time, Inc. vs. Reyes, 39 SCRA, pp. 315-316.) An additional factor that induced Us to entertain the instant petition is the obvious merit We find in the same. Our reading of the provisions of Republic Act No. 3931 has convinced Us that the clear legislative intention is to vest in the Commission the exclusive authority to determine the existence of "pollution" penalized thereunder and to prosecute violations of said law. The information filed against the herein petitioner charges him with a violation of Section 9, in relation to Section 10 of Republic Act No. 3931. More specifically, it alleges that the petitioner, with his co-accused Isaac Arivas, "willfully, unlawfully and feloniously drain or otherwise dispose into the highway canal and/or cause, permit, suffer to be drained or allow to seep into such waterway the industrial and other waste matters discharged due to the operation of the said Insular Oil Refinery Co. so managed and operated by them, thereby causing pollution of such waterway with the resulting damage and/or destruction to the arriving plants in the vicinity and providing hazard to health and property in the same vicinity." Section 9 in its first paragraph, supposedly the criminal act being imputed to the petitioner, reads as follows: SEC. 9. Prohibitions. No person shall throw, run, drain, or otherwise dispose into any of the water and/or atmospheric air of the Philippines, or cause, permit, suffer to be thrown, run, drain, allow to see or otherwise dispose into such waters or atmospheric air, any organic or inorganic matter or any substance in gaseous or liquid form that shall cause pollution of such waters or atmospheric air. It will be noted from the above-quoted provision that the prohibited act is to throw, run, drain or otherwise dispose into any of the water and/or atmospheric air of the Philippines, any organic or inorganic matter or substance "that shall cause pollution of such waters or atmospheric air." Stated in simpler terms, the offense allegedly committed by the petitioner was the act of causing pollution of a waterway (highway canal).

The term "pollution" as used in the law is not to be taken in its ordinary signification. In Section 2, paragraph (a), of Republic Act No. 3931, "pollution" is defined in these words: (a) Pollution' means such alteration of the physical, chemical and/or biological properties of any water and/or atmospheric air of the Philippines, or any such discharge of any liquid, gaseous or solid substance into any of the waters and/or atmospheric air of the country as will or is likely to create or render such waters and/or atmospheric air harmful or detrimental or injurious to public health, safety or welfare, or to domestic, commercial, industrial, agricultural, recreational or other legitimate uses, or to livestock, wild animals, birds, fish or of her aquatic life. The power to determine the existence of pollution is vested by the law in the Commission. Section 6, among others, gives the Commission the authority to "determine whether a pollution exists in any of the waters and/or atmospheric air of the Philippines." (Section 6(a), No. 1); to "hold public hearings, ... make findings of facts and determinations all with respect to the violations of this Act or orders issued by the Commission." (Ibid., No. 3); to "institute or cause to be instituted in the court of competent jurisdiction legal proceedings to compel compliance with the provisions of this Act" (Ibid, No. 5); and, "after due notice and hearing, revoke, suspend or modify any permit issued under this Act whenever modifications are necessary to prevent or abate pollution of any water and/or atmospheric air of the Philippines." (Ibid., No. 7.) Section 8 contains explicit provisions as to the authority of the Commission to determine the existence of pollution and to take appropriate court actions to abate or prevent the same. It provides: SEC. 8. Proceedings before the Commission . The Commission may, on its own motion, or upon the request of any person, investigate or may inquire, in a manner to be determined by it, as to any alleged act of pollution or the omission or failure to comply with any provisions of this Act or any order of this Commission. Whenever it appears to the Commission, after investigation, that there has been a violation of any of the provisions of this Act or any order of the Commission, it may order whoever causes such violation to show cause before said Commission why such discharge of industrial wastes or any waste should not be discontinued. A notice shall be served on the offending party directing him or it to show cause before the Commission, on a date specified in such notice, why an order should not be made directing the discontinuance of such violation. Such notice shall specify the time and the place where a public hearing will be held by the Commission or its authorized representatives, and notice of such hearing shall be served personally or by registered mail, at least ten days before said hearing; and in the case of a municipality or corporation such notice shall be served upon the major or president thereof. The Commission shall take evidence with reference to said matter and may issue an order to the party responsible for such violation, directing that within a specified period of time thereafter, such violation be discontinued unless adequate sewage works or industrial wastes disposal system be properly operated to prevent further damage or pollution. No investigation being conducted or ruling made by the Commission shall prejudice any action which may be filed in court by any person in accordance with the provisions of the New Civil Code on nuisance. On matters, however, not related to nuisance, no court action shall be initiated until the Commission shall have finally ruled thereon and no order of the Commission discontinuing the discharge of waste shall be stayed by the filing of said court action, unless the court issues an injunction as provided for in the Rules of Court.

The last paragraph of the above-quoted provision delineates the authority to be exercised by the Commission and by the ordinary courts in respect of preventing or remedying the pollution of the waters or atmospheric air of the Philippines. The provision excludes from the authority of the Commission only the determination of and the filing of court actions involving violations of the New Civil Code on nuisance. It is expressly directed that on matters not related to nuisance "no court action shall be initiated until the Commission shall have finally ruled thereon." This provision leaves little room for doubt that a court action involving the determination of the existence of pollution may not be initiated until and unless the Commission has so determined the existence of what in the law is considered pollution. It may not be argued that the above-cited provision refers only to the filing of civil actions, and not to criminal cases as is the one herein involved, there being no basis either in the context in law nor from a consideration of the purpose behind the enactment of the same upon which such a distinction may be made. Indeed, respondents do not seriously question that the court action contemplated in the last paragraph of Section 8 includes criminal proceedings. Respondents merely aver that the aforementioned grant of authority to the Commission is not exclusive of the power of Fiscals to file criminal actions for a violation of the provisions of Republic Act No. 3931. We are likewise not in accord with the view that the law intended to give concurrent authority to the Commission and Fiscals to prosecute violations of Republic Act No. 3931. It is true that there is no provision expressly declaring that the authority vested in the Commission to prosecute violations of Republic Act No. 3931 is exclusive. Using the same logic, there is neither a provision declaring such authority to be concurrent or may be exercised jointly with Fiscals. The absence of an explicit declaration as to the exclusive authority of the Commission to prosecute violations of the subject law does not detract from the clear intention to make it so, as gathered from the philosophy of the law itself and as gleaned from several provisions of the same. It is clearly deducible from the provision of Section 8 expressly declaring that no court action shall be initiated, except those related to nuisance, until the Commission shall have finally ruled on the alleged act of pollution; and also from Section 6(a), No. 5, which authorizes the Commission to "initiate or cause to be instituted in a court of competent jurisdiction legal proceedings to compel compliance with the provisions of this Act." As may be seen from the law, the determination of the existence of pollution requires investigation, public hearings and the collection of various information relating to water and atmospheric pollution. (Sections 6, 7, and 8.) The definition of the term "pollution" in itself connotes that the determination of its existence requires specialized knowledge of technical and scientific matters which are not ordinarily within the competence of Fiscals or of those sitting in a court of justice. It is undoubtedly in recognition of this fact that in Section 4 of the law, it is provided that "the basic personnel necessary to carry out the provisions of this Act shall be engineers, chemists, biochemists, physicists, and other technicians"; and required in Section 3 that the Chairman of the Commission shall be the Chairman of the National Science Development Board, one of the part-time commissioners shall be a recommendee of the Philippine Council of Science and Technology, and one of the two full-time commissioner shall be a sanitary engineer. The vesting of authority in an administrative body to determine when to institute a criminal action for a violation of the law entrusted to it for administration or enforcement, to the exclusion of the regular prosecution service of the government, is not new in this jurisdiction. It is recognized in Yao Lit vs. Geraldez et al., 106 Phil. 545 which upheld the exclusive authority of the Commissioner of Immigration' to investigate and impose administrative fines upon violators of the provisions of Republic Act No. 751 for the reason that said official "has better facilities than the prosecuting officials to carry out the provisions of the said Act, the former official being the keeper of the records pertaining to aliens." The same principle has been recognized with respect to the prosecutions of violations of the Anti-Dummy Law (Republic Act No. 1131.) In holding that the City Fiscal of Manila has no authority to prosecute such violations independently of the Anti-Dummy Board, it was said:

Were the city fiscal or the provincial fiscals who have the power or right to prosecute violations of all laws and ordinances allowed to prosecute violations of the AntiDummy Board, there would be no order, concert, cooperation, and coordination between the said agencies of the government. The function of coordination which is entrusted to the Anti-Dummy Board is evident from all the above-quoted provisions of Republic Act No. 1130. There can be no coordination as envisioned in the law unless the Anti-Dummy Board be given the power to direct and control the city fiscal in the prosecutions of the violations of the Anti-Dummy Law. (Rollo, p. 118; 5 SCRA 428,433.) In R. B. Industrial Development Co., Ltd. vs. Enage (24 SCRA 365) involving the authority of the Bureau of Forestry over the management and use of public forests and the transfer of licenses for the taking of forest products, this Court has made this pronouncement: A doctrine long recognized is that where the law confines in an administrative office the power to determine particular questions or matters, upon the facts to be presented, the jurisdiction of such office shall prevail over the courts. (p. 124, Rollo.) It is our considered view that the Provincial Fiscal of Rizal lacked the authority to file the information charging the petitioner with a violation of the provisions of Republic Act No. 3931 there being no prior finding or determination by the Commission that the act of the petitioner had caused pollution in any water or atmospheric air of the Philippines. It is not to be understood, however, that a fiscal or public prosecutor may not file an information for a violation of the said law at all. He may do so if the Commission had made a finding or determination that the law or any of its orders had been violated. In the criminal case presently considered, there had been no prior determination by the Commission that the supposed acts of the petitioner had caused pollution to any water of the Philippines. The filing of the information for the violation of Section 9 of the law is, therefore, premature and unauthorized. Concommittantly, the respondent Judge is without jurisdiction to take cognizance of the offense charged therein. WHEREFORE, the petition is hereby granted and the questioned Orders of the respondent Judge are hereby annuled and set aside. The respondent Judge is ordered to dismiss Criminal Case No. 5984-75 for lack of jurisdiction. No costs. SO ORDERED. Teehankee (Chairman), Makasiar, Melencio-Herrera, Plana, Relova and Gutierrez, Jr., JJ., concur.

G.R. No. 93891 March 11, 1991 POLLUTION ADJUDICATION BOARD, petitioner vs. COURT OF APPEALS and SOLAR TEXTILE FINISHING CORPORATION, respondents. Oscar A. Pascua and Charemon Clio L. Borre for petitioner. Leonardo A. Aurelio for respondent Solar Textile Finishing Corp.

RESOLUTION

FELICIANO, J.:p Petitioner Pollution Adjudication Board ("Board") asks us to review the Decision and Resolution promulgated on 7 February 1990 and 10 May 1990, respectively, by the Court of Appeals in C.A.-G R. No. SP 18821 entitled "Solar Textile Finishing Corporation v. Pollution Adjudication Board." In that Decision and Resolution, the Court of Appeals reversed an order of the Regional Trial Court, Quezon City, Branch 77, in Civil Case No. Q-89-2287 dismissing private respondent Solar Textile Finishing Corporation's ("Solar") petition for certiorari and remanded the case to the trial court for further proceedings. On 22 September 1988, petitioner Board issued an ex parte Order directing Solar immediately to cease and desist from utilizing its wastewater pollution source installations which were discharging untreated wastewater directly into a canal leading to the adjacent Tullahan-Tinejeros River. The Order signed by Hon. Fulgencio Factoran, Jr., as Board Chairman, reads in full as follows: Respondent, Solar Textile Finishing Corporation with plant and place of business at 999 General Pascual Avenue, Malabon, Metro Manila is involved in bleaching, rinsing and dyeing textiles with wastewater of about 30 gpm. being directly discharged untreated into the sewer. Based on findings in the Inspections conducted on 05 November 1986 and 15 November 1986, the volume of untreated wastewater discharged in the final out fall outside of the plant's compound was even greater. The result of inspection conducted on 06 September 1988 showed that respondent's Wastewater Treatment Plant was noted unoperational and the combined wastewater generated from its operation was about 30 gallons per minute and 80% of the wastewater was being directly discharged into a drainage canal leading to the Tullahan-Tinejeros River by means of a by-pass and the remaining 20% was channelled into the plant's existing Wastewater Treatment Plant (WTP). Result of the analyses of the sample taken from the by-pass showed that the wastewater is highly pollutive in terms of Color units, BOD and Suspended Solids, among others. These acts of respondent in spite of directives to comply with the requirements are clearly in violation of Section 8 of Presidential Decree No. 984 and Section 103 of its Implementing Rules and Regulations and the 1982 Effluent Regulations. WHEREFORE, pursuant to Section 7 of P.D. 984 and Section 38 of its Implementing Rules and Regulations, respondent is hereby ordered to cease and desist from

utilizing its wastewater pollution source installation and discharging its untreated wastewater directly into the canal leading to the Tullahan-Tinejeros River effective immediately upon receipt hereof and until such time when it has fully complied with all the requirements and until further orders from this Board.
SO ORDERED. 1

We note that the above Order was based on findings of several inspections of Solar's plant:
a. inspections conducted on 5 November 1986 and 12 November 1986 by the National Pollution Control Commission ("NPCC"), the predecessor of the Board ; 2 and

b. the inspection conducted on 6 September 1988 by the Department of Environment and Natural Resources ("DENR"). The findings of these two (2) inspections were that Solar's wastewater treatment plant was nonoperational and that its plant generated about 30 gallons per minute of wastewater, 80% of which was being directly discharged into a drainage canal leading to the Tullahan-Tinejeros River. The remaining 20% of the wastewater was being channeled through Solar's non-operational wastewater treatment plant. Chemical analysis of samples of Solar's effluents showed the presence of pollutants on a level in excess of what was permissible under P.D. No. 984 and its Implementing Regulations. A copy of the above Order was received by Solar on 26 September 1988. A Writ of Execution issued by the Board was received by Solar on 31 March 1989. Meantime, Solar filed a motion for reconsideration/appeal with prayer for stay of execution of the Order dated 22 September 1988. Acting on this motion, the Board issued an Order dated 24 April 1989 allowing Solar to operate temporarily, to enable the Board to conduct another inspection and evaluation of Solar's wastewater treatment facilities. In the same Order, the Board directed the Regional Executive Director of the DENR/ NCR to conduct the inspection and evaluation within thirty (30) days. On 21 April 1989, however, Solar went to the Regional Trial Court of Quezon City, Branch 77, on petition for certiorari with preliminary injunction against the Board, the petition being docketed as Civil Case No. Q-89-2287. On 21 July 1989, the Regional Trial Court dismissed Solar's petition upon two (2) grounds, i.e., that appeal and not certiorari from the questioned Order of the Board as well as the Writ of Execution was the proper remedy, and that the Board's subsequent Order allowing Solar to operate temporarily had rendered Solar's petition moot and academic. Dissatisfied, Solar went on appeal to the Court of Appeals which, in the Decision here assailed, reversed the Order of dismissal of the trial court and remanded the case to that court for further proceedings. In addition, the Court of Appeals declared the Writ of Execution null and void. At the same time, the Court of Appeals said in the dispositive portion of its Decision that:
. . .. Still and all, this decision is without prejudice to whatever action the appellee [Board] may take relative to the projected 'inspection and evaluation' of appellant's [Solar's] water treatment facilities. 3

The Court of Appeals, in so ruling, held that certiorari was a proper remedy since the Orders of petitioner Board may result in great and irreparable injury to Solar; and that while the case might be

moot and academic, "larger issues" demanded that the question of due process be settled. Petitioner Board moved for reconsideration, without success. The Board is now before us on a Petition for Review basically arguing that: 1. its ex parte Order dated 22 September 1988 and the Writ of Execution were issued in accordance with law and were not violative of the requirements of due process; and 2. the ex parte Order and the Writ of Execution are not the proper subjects of a petition for certiorari. The only issue before us at this time is whether or not the Court of Appeals erred in reversing the trial court on the ground that Solar had been denied due process by the Board. Petitioner Board claims that under P.D. No. 984, Section 7(a), it has legal authority to issue ex parte orders to suspend the operations of an establishment when there is prima facie evidence that such establishment is discharging effluents or wastewater, the pollution level of which exceeds the maximum permissible standards set by the NPCC (now, the Board). Petitioner Board contends that the reports before it concerning the effluent discharges of Solar into the Tullahan-Tinejeros River provided prima facie evidence of violation by Solar of Section 5 of the 1982 Effluent Code. Solar, on the other hand, contends that under the Board's own rules and regulations, an ex parte order may issue only if the effluents discharged pose an "immediate threat to life, public health, safety or welfare, or to animal and plant life." In the instant case, according to Solar, the inspection reports before the Board made no finding that Solar's wastewater discharged posed such a threat. The Court is not persuaded by Solar's contention. Section 7(a) of P.D. No. 984 authorized petitioner Board to issue ex parte cease and desist orders under the following circumstances: P.D. 984, Section 7, paragraph (a), provides: (a) Public Hearing. . . . Provided, That whenever the Commission finds prima facie evidence that the discharged sewage or wastes are of immediate threat to life, public health, safety or welfare, or to animal or plant life, or exceeds the allowable standards set by the Commission, the Commissioner may issue an ex-parte order directing the discontinuance of the same or the temporary suspension or cessation of operation of the establishment or person generating such sewage or wastes without the necessity of a prior public hearing. The said ex-parte order shall be immediately executory and shall remain in force until said establishment or person prevents or abates the said pollution within the allowable standards or modified or nullified by a competent court. (Emphasis supplied) We note that under the above-quoted portion of Section 7(a) of P.D. No. 984, an ex parte cease and desist order may be issued by the Board (a) whenever the wastes discharged by an establishment pose an "immediate threat to life, public health, safety or welfare, or to animal or plant life," or (b) whenever such discharges or wastes exceed "the allowable standards set by the [NPCC]." On the one hand, it is not essential that the Board prove that an "immediate threat to life, public health, safety or welfare, or to animal or plant life" exists before an ex parte cease and desist order may be issued. It is enough if the Board finds that the wastes discharged do exceed "the allowable standards set by the [NPCC]." In respect of discharges of wastes as to which allowable standards have been set by the Commission, the Board may issue an ex parte cease and desist order when

there is prima facieevidence of an establishment exceeding such allowable standards. Where, however, the effluents or discharges have not yet been the subject matter of allowable standards set by the Commission, then the Board may act on anex parte basis when it finds at least prima facie proof that the wastewater or material involved presents an "immediate threat to life, public health, safety or welfare or to animal or plant life." Since the applicable standards set by the Commission existing at any given time may well not cover every possible or imaginable kind of effluent or waste discharge, the general standard of an "immediate threat to life, public health, safety or welfare, or to animal and plant life" remains necessary. Upon the other hand, the Court must assume that the extant allowable standards have been set by the Commission or Board precisely in order to avoid or neutralize an "immediate threat to life, public health, safety or welfare, or to animal or plant life.'' Section 5 of the Effluent Regulations of 1982 4 sets out the maximum permissible levels of physical and chemical substances which effluents from domestic wastewater treatment plants and industrial plants" must not exceed "when discharged into bodies of water classified as Class A, B, C, D, SB and SC in accordance with the 1978 NPCC Rules and Regulations." The waters of TullahanTinejeros River are classified as inland waters Class D under Section 68 of the 1978 NPCC Rules and Regulations 5 which in part provides that: Sec. 68. Water Usage and Classification. The quality of Philippine waters shall be maintained in a safe and satisfactory condition according to their best usages. For this purpose, all water shall be classified according to the following beneficial usages: (a) Fresh Surface Water Classification Best usage xxx xxx xxx Class D For agriculture, irrigation, livestock watering and industrial cooling and processing. xxx xxx xxx (Emphases supplied) The reports on the inspections carried on Solar's wastewater treatment facilities on 5 and 12 November 1986 and 6 September 1988 set forth the following Identical finding:
a. For legal action in [view of] implementing rules and regulations of P.D. No. 984 and Section 5 of the Effluent Regulations of 1982. 6

Placing the maximum allowable standards set in Section 5 of the Effluent Regulations of 1982 alongside the findings of the November 1986 and September 1988 inspection reports, we get the following results:

"Inland November September Waters 1986 1988 (Class C & D 7 Report 8 Report 9 Station 1 Station 1 a) Color in 100 a) Color units 250 125

platinum (Apparent cobalt Color) b) pH 6-8.5 b) pH 9.3 8.7 c) Tempera- 40 c) Temperature ture in C (C) d) Phenols in 0.1 d) Phenols in mg./1. mg.1 e) Suspended 75 e) Suspended 340 80 solids in solids in mg./1. mg./1. f) BOD in 80 f) BOD (5-day) 1,100 152 mg./1. mg./1 g) oil/Grease 10 g) Oil/Grease h) Detergents 5 h) Detergents 2.93 in mg./1/" mg./1. MBAS i) Dissolved 0 oxygen, mg./1. j) Settleable 0.4 1.5 Matter, mg./1. k) Total Dis 800 610 solved Solids mg./1.

l) Total Solids 1,400 690 mg./1. m) Turbidity NTU / ppm, SiO 3 70 The November 1986 inspections report concluded that: Records of the Commission show that the plant under its previous owner, Fine Touch Finishing Corporation, was issued a Notice of Violation on 20 December 1985 directing same to cease and desist from conducting dyeing operation until such time the waste treatment plant is already completed and operational. The new owner Solar Textile Corporation informed the Commission of the plant acquisition thru its letter dated March 1986 (sic). The new owner was summoned to a hearing held on 13 October 1986 based on the adverse findings during the inspection/water sampling test conducted on 08 August 1986. As per instruction of the Legal Division a re- inspection/sampling text should be conducted first before an appropriate legal action is instituted; hence, this inspection.
Based on the above findings, it is clear that the new owner continuously violates the directive of the Commission by undertaking dyeing operation without completing first and operating its existing WTP. The analysis of results on water samples taken showed that the untreated wastewater from the firm pollutes our water resources. In this connection, it is recommended that appropriate legal action be instituted immediately against the firm. . . . 10

The September 1988 inspection report's conclusions were: 1. The plant was undertaking dyeing, bleaching and rinsing operations during the inspection. The combined wastewater generated from the said operations was estimated at about 30 gallons per minute. About 80% of the wastewater was traced directly discharged into a drainage canal leading to the Tullahan-Tinejeros river by means of a bypass. The remaining 20% was channeled into the plant's existing wastewater treatment plant (WTP). 2. The WTP was noted not yet fully operational- some accessories were not yet installed. Only the sump pit and the holding/collecting tank are functional but appeared seldom used. The wastewater mentioned channeled was noted held indefinitely into the collection tank for primary treatment. There was no effluent discharge [from such collection tank].
3. A sample from the bypass wastewater was collected for laboratory analyses. Result of the analyses show that the bypass wastewater is polluted in terms of color units, BOD and suspended solids, among others. (Please see attached laboratory resul .) 11

From the foregoing reports, it is clear to this Court that there was at least prima facie evidence before the Board that the effluents emanating from Solar's plant exceeded the maximum allowable levels of physical and chemical substances set by the NPCC and that accordingly there was adequate basis supporting the ex parte cease and desist order issued by the Board. It is also well to

note that the previous owner of the plant facility Fine Touch Finishing Corporation had been issued a Notice of Violation on 20 December 1985 directing it to cease and refrain from carrying out dyeing operations until the water treatment plant was completed and operational. Solar, the new owner, informed the NPCC of the acquisition of the plant on March 1986. Solar was summoned by the NPCC to a hearing on 13 October 1986 based on the results of the sampling test conducted by the NPCC on 8 August 1986. Petitioner Board refrained from issuing an ex parte cease and desist order until after the November 1986 and September 1988 re-inspections were conducted and the violation of applicable standards was confirmed. In other words, petitioner Board appears to have been remarkably forbearing in its efforts to enforce the applicable standards vis-a-vis Solar. Solar, on the other hand, seemed very casual about its continued discharge of untreated, pollutive effluents into the Tullahan- Tinerejos River, presumably loath to spend the money necessary to put its Wastewater Treatment Plant ("WTP") in an operating condition. In this connection, we note that in Technology Developers, Inc. v. Court of appeals, et al., 12 the Court very recently upheld the summary closure ordered by the Acting Mayor of Sta. Maria, Bulacan, of a pollution-causing establishment, after finding that the records showed that: 1. No mayor's permit had been secured. While it is true that the matter of determining whether there is a pollution of the environment that requires control if not prohibition of the operation of a business is essentially addressed to the then National Pollution Control Commission of the Ministry of Human Settlements, now the Environmental Management Bureau of the Department of Environment and Natural Resources, it must be recognized that the mayor of a town has as much responsibility to protect its inhabitants from pollution, and by virtue of his police power, he may deny the application for a permit to operate a business or otherwise close the same unless appropriate measures are taken to control and/or avoid injury to the health of the residents of the community from the emission in the operation of the business. 2. The Acting Mayor, in a letter of February l6, 1989, called the attention of petitioner to the pollution emitted by the fumes of its plant whose offensive odor "not only pollute the air in the locality but also affect the health of the residents in the area," so that petitioner was ordered to stop its operation until further orders and it was required to bring the following: xxx xxx xxx (3) Region III-Department of Environment and Natural Resources Anti-Pollution permit. (Annex A-2, petition) 3. This action of the Acting Mayor was in response to the complaint of the residents of Barangay Guyong, Sta. Maria, Bulacan, directed to the Provincial Governor through channels (Annex A-B, petition).. . . 4. The closure order of the Acting Mayor was issued only after an investigation was made by Marivic Guina who in her report of December 8, 1988 observed that the fumes emitted by the plant of petitioner goes directly to the surrounding houses and that no proper air pollution device has been installed. (Annex A-9, petition) xxx xxx xxx 6. While petitioner was able to present a temporary permit to operate by the then National Pollution Control Commission on December 15,1987, the permit was good

only up to May 25,1988 (Annex A-12, petition). Petitioner had not exerted any effort to extend or validate its permit much less to install any device to control the pollution and prevent any hazard to the health of the residents of the community." In the instant case, the ex parte cease and desist Order was issued not by a local government official but by the Pollution Adjudication Board, the very agency of the Government charged with the task of determining whether the effluents of a particular industrial establishment comply with or violate applicable anti-pollution statutory and regulatory provisions. Ex parte cease and desist orders are permitted by law and regulations in situations like that here presented precisely because stopping the continuous discharge of pollutive and untreated effluents into the rivers and other inland waters of the Philippines cannot be made to wait until protracted litigation over the ultimate correctness or propriety of such orders has run its full course, including multiple and sequential appeals such as those which Solar has taken, which of course may take several years. The relevant pollution control statute and implementing regulations were enacted and promulgated in the exercise of that pervasive, sovereign power to protect the safety, health, and general welfare and comfort of the public, as well as the protection of plant and animal life, commonly designated as the police power. It is a constitutional commonplace that the ordinary requirements of procedural due process yield to the necessities of protecting vital public interests like those here involved, through the exercise of police power. The Board's ex parte Order and Writ of Execution would, of course, have compelled Solar temporarily to stop its plant operations, a state of affairs Solar could in any case have avoided by simply absorbing the bother and burden of putting its WTP on an operational basis. Industrial establishments are not constitutionally entitled to reduce their capitals costs and operating expenses and to increase their profits by imposing upon the public threats and risks to its safety, health, general welfare and comfort, by disregarding the requirements of anti- pollution statutes and their implementing regulations. It should perhaps be made clear the Court is not here saying that the correctness of the ex parte Order and Writ of Execution may not be contested by Solar in a hearing before the Board itself. Where the establishment affected by an ex parte cease and desist order contests the correctness of the prima facie findings of the Board, the Board must hold a public hearing where such establishment would have an opportunity to controvert the basis of such ex parte order. That such an opportunity is subsequently available is really all that is required by the due process clause of the Constitution in situations like that we have here. The Board's decision rendered after the public hearing may then be tested judicially by an appeal to the Court of Appeals in accordance with Section 7(c) of P.D. No. 984 and Section 42 of the Implementing Rules and Regulations. A subsequent public hearing is precisely what Solar should have sought instead of going to court to seek nullification of the Board's Order and Writ of Execution and instead of appealing to the Court of Appeals. It will be recalled the at the Board in fact gave Solar authority temporarily to continue operations until still another inspection of its wastewater treatment facilities and then another analysis of effluent samples could be taken and evaluated. Solar claims finally that the petition for certiorari was the proper remedy as the questioned Order and Writ of Execution issued by the Board were patent nullities. Since we have concluded that the Order and Writ of Execution were entirely within the lawful authority of petitioner Board, the trial court did not err when it dismissed Solar's petition for certiorari. It follows that the proper remedy was an appeal from the trial court to the Court of Appeals, as Solar did in fact appeal. ACCORDINGLY, the Petition for Review is given DUE COURSE and the Decision of the Court of Appeals dated 7 February 1990 and its Resolution dated 10 May 1990 in A.C.-G.R. No. SP 18821 are hereby SET ASIDE. The Order of petitioner Board dated 22 September 1988 and the Writ of Execution, as well as the decision of the trial court dated 21 July 1989, are hereby REINSTATED,

without prejudice to the right of Solar to contest the correctness of the basis of the Board's Order and Writ of Execution at a public hearing before the Board. Fernan, C.J., Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.

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G.R. No. 94759 January 21, 1991 TECHNOLOGY DEVELOPERS, INC., petitioner, vs. COURT OF APPEALS, HON. NARCISO T. ATIENZA as Presiding Judge, Bulacan, RTC, and HON. VICENTE CRUZ, Acting Mayor and the MUNICIPALITY OF STA. MARIA, BULACAN, respondents. Diosdado P. Peralta for petitioner.

GANCAYCO, J.:p The authority of the local executive to protect the community from pollution is the center of this controversy. The antecedent facts are related in the appealed decision of the Court of Appeals as follows: Petitioner, a domestic private corporation engaged in the manufacture and export of charcoal briquette, received a letter dated February 16, 1989 from private respondent acting mayor Pablo N. Cruz, ordering the full cessation of the operation of the petitioner's plant located at Guyong, Sta. Maria, Bulacan, until further order. The letter likewise requested Plant Manager Mr. Armando Manese to bring with him to the office of the mayor on February 20, 1989 the following: a) Building permit; b) Mayor's permit; c) Region III-Pollution of Environment and Natural Resources AntiPollution Permit; and of other document. At the requested conference on February 20, 1989, petitioner, through its representative, undertook to comply with respondent's request for the production of the required documents. In compliance with said undertaking, petitioner commenced to secure "Region III-Department of Environmental and Natural Resources AntiPollution Permit," although among the permits previously secured prior to the operation of petitioner's plant was a "Temporary Permit to Operate Air Pollution Installation" issued by the then National Pollution Control Commission (now Environmental Management Bureau) and is now at a stage where the Environmental Management Bureau is trying to determine the correct kind of anti-pollution devise to be installed as part of petitioner's request for the renewal of its permit. Petitioner's attention having been called to its lack of mayor's permit, it sent its representatives to the office of the mayor to secure the same but were not entertained.

On April 6, 1989, without previous and reasonable notice upon petitioner, respondent acting mayor ordered the Municipality's station commander to padlock the premises of petitioner's plant, thus effectively causing the stoppage of its operation. Left with no recourse, petitioner instituted an action for certiorari, prohibition, mandamus with preliminary injunction against private respondent with the court a quo which is presided by the respondent judge. In its prayer for the issuance of a writ of preliminary mandatory injunction, it alleged therein that the closure order was issued in grave abuse of discretion. During the hearing of the application for the issuance of a writ of preliminary injunction on April 14, 1989, herein parties adduced their respective evidences. The respondent judge, April 19, 1989, found that petitioner is entitled to the issuance of the writ of preliminary mandatory injunction, hence, it ordered as follows: In view of the foregoing, upon petitioner's posting of a bond in the amount of P50,000.00 to answer for such damages that respondents may sustain should petitioner eventually be found not entitled to the injunctive relief hereby issued, let a PRELIMINARY MANDATORY INJUNCTION issue ordering the respondent Hon. Pablo N. Cruz, and other person acting in his behalf and stead to immediately revoke his closure order dated April 6, 1989, and allow petitioner to resume its normal business operations until after the instant case shall have been adjudicated on the merits without prejudice to the inherent power of the court to alter, modify or even revoke this order at any given time. SO ORDERED. The writ of preliminary mandatory injunction was issued on April 28, 1989, upon petitioner's posting a bond in the amount of P50,000.00. Private respondent filed his motion for reconsideration dated May 3, 1989. Said motion for reconsideration was heard on May 30, 1989. Petitioner's counsel failed to appear and the hearing proceeded with the Provincial Prosecutor presenting his evidence. The following documents were submitted: a) Exhibit "A", Investigation report on the Technology Developers Inc., prepared by one Marivic Guina, and her conclusion and recommendation read: Due to the manufacturing process and nature of raw materials used, the fumes coming from the factory may contain particulate matters which are hazardous to the health of the people. As such, the company should cease operating until such a time that the proper air pollution device is installed and operational. b) Exhibits "B", "B-1", "B-2", three (3) sheets of coupon bond containing signatures of residents of Barangay Guyong, Sta. Maria, Bulacan; c) Exhibit "B-3", a letter addressed to Hon. Roberto Pagdanganan Governor of the Province of Bulacan, dated November 22, 1988, complaining about the smoke coming out of the chimney of the company while in operation.

Reassessing all the evidence adduced, the lower court, on June 14, 1989, issued an order (a) setting aside the order dated April 28, 1989, which granted a Writ of Preliminary Mandatory Injunction, and (b) dissolving the writ consequently issued. A motion for reconsideration dated July 6, 1989 was filed by petitioner. Said motion drew an opposition dated July 19, 1989 from private respondent.
Resolving the petitioner's motion for reconsideration, the respondent judge issued an order dated August 9, 1989, denying said motion for reconsideration. 1

Hence a petition for certiorari and prohibition with preliminary injunction was filed by petitioner in the Court of Appeals seeking to annul and set aside (a) the order issued by the trial court on June 14, 1989, setting aside the order dated April 28, 1989, and (b) the order of August 9, 1989, denying petitioner's motion for reconsideration of the order of June 14, 1989. In due course the petition was denied for lack of merit by the appellate court in a decision dated January 26, 1990. 2 A motion for reconsideration thereof filed by petitioner was denied on August 10, 1990. Thus, the herein petition for review on certiorari filed with this Court. Six errors are alleged to have been committed by the appellate court which may be synthesized into the singular issue of whether or not the appellate court committed a grave abuse of discretion in rendering its question decision and resolution. The petition is devoid of merit. The well-known rule is that the matter of issuance of a writ of preliminary injunction is addressed to the sound judicial discretion of the trial court and its action shall not be disturbed on appeal unless it is demonstrated that it acted without jurisdiction or in excess of jurisdiction or otherwise, in grave abuse of its discretion. By the same token the court that issued such a preliminary relief may recall or dissolve the writ as the circumstances may warrant. To the mind of the Court the following circumstances militate against the maintenance of the writ of preliminary injunction sought by petitioner: 1. No mayor's permit had been secured. While it is true that the matter of determining whether there is a pollution of the environment that requires control if not prohibition of the operation of a business is essentially addressed to the then National Pollution Control Commission of the Ministry of Human Settlements, now the Environmental Management Bureau of the Department of Environment and Natural Resources, it must be recognized that the mayor of a town has as much responsibility to protect its inhabitants from pollution, and by virture of his police power, he may deny the application for a permit to operate a business or otherwise close the same unless appropriate measures are taken to control and/or avoid injury to the health of the residents of the community from the emissions in the operation of the business. 2. The Acting Mayor, in a letter of February 16, 1989, called the attention of petitioner to the pollution emitted by the fumes of its plant whose offensive odor "not only pollute the air in the locality but also affect the health of the residents in the area," so that petitioner was ordered to stop its operation until further orders and it was required to bring the following: (1) Building permit;

(2) Mayor's permit; and


(3) Region III-Department of Environment and Natural Resources Anti-Pollution permit. 3 3. This action of the Acting Mayor was in response to the complaint of the residents of Barangay Guyong, Sta. Maria, Bulacan, directed to the Provincial Governor through channels. 4 The alleged NBI finding that some of the signatures in the four-page petition were written by one person, 5 appears to be true in some instances, (particularly as among members of the same family), but on the whole the many signatures appear to be written by different persons. The certification of the barrio captain of said barrio that he has not received any complaint on the matter 6 must be because the complaint was sent directly to the Governor through the Acting Mayor. 4. The closure order of the Acting Mayor was issued only after an investigation was made by Marivic Guina who in her report of December 8, 1988 observed that the fumes emitted by the plant of petitioner goes directly to the surrounding houses and that no proper air pollution device has been installed. 7 5. Petitioner failed to produce a building permit from the municipality of Sta. Maria, but instead presented a building permit issued by an official of Makati on March 6,1987. 8 6. While petitioner was able to present a temporary permit to operate by the then National Pollution Control Commission on December 15, 1987, the permit was good only up to May 25, 1988. 9 Petitioner had not exerted any effort to extend or validate its permit much less to install any device to control the pollution and prevent any hazard to the health of the residents of the community.

All these factors justify the dissolution of the writ of preliminary injunction by the trial court and the appellate court correctly upheld the action of the lower court. Petitioner takes note of the plea of petitioner focusing on its huge investment in this dollar-earning industry. It must be stressed however, that concomitant with the need to promote investment and contribute to the growth of the economy is the equally essential imperative of protecting the health, nay the very lives of the people, from the deleterious effect of the pollution of the environment. WHEREFORE, the petition is DENIED, with costs against petitioner. SO ORDERED. Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

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