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SECOND DIVISION

[G.R. No. 161957. February 28, 2005]
JORGE GONZALES and PANEL OF ARBITRATORS, petitioners, vs. CLIMAX MINING
LTD., CLIMAX-ARIMCO MINING CORP., and AUSTRALASIAN PHILIPPINES
MINING INC., respondents.
D E C I S I O N
TINGA, J.:
Petitioner Jorge Gonzales, as claimowner of mineral deposits located within the Addendum Area of
Influence in Didipio, in the provinces of Quirino and Nueva Vizcaya, entered into a co-production,
joint venture and/or production-sharing letter-agreement designated as the May 14, 1987 Letter of
Intent with Geophilippines, Inc, and Inmex Ltd. Under the agreement, petitioner, as claimowner,
granted to Geophilippines, Inc. and Inmex Ltd. collectively, the exclusive right to explore and survey
the mining claims for a period of thirty-six (36) months within which the latter could decide to take
an operating agreement on the mining claims and/or develop, operate, mine and otherwise exploit
the mining claims and market any and all minerals that may be derived therefrom.

On 28 February 1989, the parties to the May 14, 1987 Letter of Intent renegotiated the same into
the February 28, 1989 Agreement whereby the exploration of the mining claims was extended for
another period of three years.

On 9 March 1991, petitioner Gonzales, Arimco Mining Corporation, Geophilippines Inc., Inmex
Ltd., and Aumex Philippines, Inc. signed a document designated as the Addendum to the May 14, 1987
Letter of Intent and February 28, 1989 Agreement with Express Adhesion Thereto (hereafter, the Addendum
Contract).
[1]
Under the Addendum Contract, Arimco Mining Corporation would apply to the
Government of the Philippines for permission to mine the claims as the Government’s contractor
under a Financial and Technical Assistance Agreement (FTAA). On 20 June 1994, Arimco Mining
Corporation obtained the FTAA
[2]
and carried out work under the FTAA.

Respondents executed the Operating and Financial Accommodation Contract
[3]
(between Climax-Arimco
Mining Corporation and Climax Mining Ltd., as first parties, and Australasian Philippines Mining
Inc., as second party) dated 23 December 1996 and Assignment, Accession Agreement
[4]
(between
Climax-Arimco Mining Corporation and Australasian Philippines Mining Inc.) dated 3 December
1996. Respondent Climax Mining Corporation (Climax) and respondent Australasian Philippines
Mining Inc. (APMI) entered into a Memorandum of Agreement
[5]
dated 1 June 1991 whereby the former
transferred its FTAA to the latter.

On 8 November 1999, petitioner Gonzales filed before the Panel of Arbitrators, Region II, Mines
and Geosciences Bureau of the Department of Environment and Natural Resources, against
respondents Climax-Arimco Mining Corporation (Climax-Arimco), Climax, and
APMI,
[6]
a Complaint
[7]
seeking the declaration of nullity or termination of the Addendum Contract, the
FTAA, theOperating and Financial Accommodation Contract, the Assignment, Accession Agreement, and
the Memorandum of Agreement. Petitioner Gonzales prayed for an unspecified amount of actual and
exemplary damages plus attorney’s fees and for the issuance of a temporary restraining order and/or
writ of preliminary injunction to restrain or enjoin respondents from further implementing the
questioned agreements. He sought said releifs on the grounds of “FRAUD, OPPRESSION and/or
VIOLATION of Section 2, Article XII of the CONSTITUTION perpetrated by these foreign
RESPONDENTS, conspiring and confederating with one another and with each other….”
[8]

On 21 February 2001, the Panel of Arbitrators dismissed the Complaint for lack of
jurisdiction. Petitioner moved for reconsideration and this was granted on 18 October 2001, the
Panel believing that the case involved a dispute involving rights to mining areas and a dispute
involving surface owners, occupants and claim owners/concessionaires. According to the Panel,
although the issue raised in the Complaint appeared to be purely civil in nature and should be within
the jurisdiction of the regular courts, a ruling on the validity of the assailed contracts would result to
the grant or denial of mining rights over the properties; therefore, the question on the validity of the
contract amounts to a mining conflict or dispute. Hence, the Panel granted the Motion for
Reconsideration with regard to the issues of nullity, termination, withdrawal or damages, but with
regard to the constitutionality of the Addendum Agreement and FTAA, it held that it had no
jurisdiction.
[9]


Respondents filed their motion for reconsideration but this was denied on 25 June 2002. The Panel
of Arbitrators maintained that there was a mining dispute between the parties since the subject
matter of the Complaint arose from contracts between the parties which involve the exploration and
exploitation of minerals over the disputed area.
[10]

Respondents assailed the orders of the Panel of Arbitrators via a petition for certiorari before the
Court of Appeals.

On 30 July 2003, the Court of Appeals granted the petition, declaring that the Panel of Arbitrators
did not have jurisdiction over the complaint filed by petitioner.
[11]
The jurisdiction of the Panel of
Arbitrators, said the Court of Appeals, is limited only to the resolution of mining disputes, defined
as those which raise a question of fact or matter requiring the technical knowledge and experience of
mining authorities. It was found that the complaint alleged fraud, oppression and violation of the
Constitution, which called for the interpretation and application of laws, and did not involve any
mining dispute. The Court of Appeals also observed that there were no averments relating to
particular acts constituting fraud and oppression. It added that since the Addendum Contract was
executed in 1991, the action to annul it should have been brought not later than 1995, as the
prescriptive period for an action for annulment is four years from the time of the discovery of the
fraud.
[12]
When petitioner filed his complaint before the Panel in 1999, his action had already
prescribed. Also, the Court of Appeals noted that fraud and duress only make a contract
voidable,
[13]
not inexistent, hence the contract remains valid until annulled. The Court of Appeals
was of the opinion that the petition should have been settled through arbitration under Republic Act
No. 876 (The Arbitration Law) as stated in Clause 19.1 of the Addendum Contract. The Court of
Appeals therefore declared as invalid the orders dated 18 October 2001 and 25 June 2002 issued by
the Panel of Arbitrators. On 28 January 2004, the Court of Appeals denied petitioner’s motion for
reconsideration for lack of merit.
[14]


Petitioner filed on 22 March 2004 this Petition for Review on Certiorari Under Rule 45 assailing the
decision and resolution of the Court of Appeals. Petitioner raises the following issues:

A.
PROCEDURAL GROUND
THE HONORABLE COURT OF APPEALS SHOULD HAVE SUMMARILY DISMISSED
RESPONDENTS’ PETITION A QUO FOR FAILURE TO COMPLY WITH PROCEDURAL
REQUIREMENTS.


i.
WHETHER THE HONORABLE COURT OF APPEALS DEPARTED FROM THE RULES
AND ESTABLISHED JURISPRUDENCE WHEN IT DID NOT DISMISS THE PETITION A
QUO DESPITE RESPONDENTS’ FAILURE TO COMPLY WITH THE RULES ON
DISCLOSURE IN THE “VERIFICATION AND CERTIFICATION” PORTION OF THEIR
PETITION A QUO.
ii.
WHETHER THE HONORABLE COURT OF APPEALS DEPARTED FROM THE RULES
AND ESTABLISHED JURISPRUDENCE WHEN IT DID NOT DISMISS THE PETITION A
QUO FILED BY RESPONDENT CLIMAX DESPITE THE LACK OF THE REQUISITE
AUTHORITY TO FILE THE PETITION A QUO.
B.
SUBSTANTIVE GROUND
THE HONORABLE COURT OF APPEALS ERRED IN GRANTING THE PETITION A
QUO FILED BY RESPONDENTS AND IN DENYING MOTION FOR
RECONSIDERATION FILED BY PETITIONER FOR UTTER LACK OF BASIS IN FACT
AND IN LAW.
i.
WHETHER THE HONORABLE COURT OF APPEALS DEPARTED FROM THE RULES
AND ESTABLISHED JURISPRUDENCE WHEN IT HELD THAT PETITIONER CEDED
HIS CLAIMS OVER THE MINERAL DEPOSITS LOCATED WITHIN THE ADDENDUM
AREA OF INFLUENCE.
ii.
WHETHER THE HONORABLE COURT OF APPEALS DEPARTED FROM THE RULES
AND ESTABLISHED JURISPRUDENCE WHEN IT HELD THAT THE PANEL OF
ARBITRATORS IS BEREFT OF JURISDICTION OVER THE SUBJECT MATTER OF CASE
NO. 058.
iii.
WHETHER THE HONORABLE COURT OF APPEALS DEPARTED FROM THE RULES
AND ESTABLISHED JURISPRUDENCE WHEN IT HELD THAT THE COMPLAINT
FILED BY THE PETITIONER FAILED TO ALLEGE ULTIMATE FACTS OR
PARTICULARS OF FRAUD.
iv.
WHETHER THE HONORABLE COURT OF APPEALS DEPARTED FROM THE RULES
AND ESTABLISHED JURISPRUDENCE WHEN IT HELD THAT PETITIONER AND
RESPONDENTS SHOULD SUBMIT TO ARBITRATION UNDER R.A. 876.
v.
WHETHER THE HONORABLE COURT OF APPEALS DEPARTED FROM THE RULES
AND ESTABLISHED JURISPRUDENCE WHEN IT HELD THAT THE ACTION TO
DECLARE THE NULLITY OF THE ADDENDUM CONTRACT, FTAA, OFAC AND AAAA
ON THE GROUND OF FRAUD HAS PRESCRIBED.

The issues for resolution in this petition for review are:
(a) Whether there was forum-shopping on the part of respondents for their failure to disclose
to this Court their filing of a Petition to Compel for Arbitration before the Regional Trial Court of
Makati City, Branch 148, which is currently pending.
(b) Whether counsel for respondent Climax had authority to file the petition for certiorari
before the Court of Appeals considering that the signor of the petition for certiorari’s Verification
and Certification of Non-forum Shopping was not authorized to sign the same in behalf of
respondent Climax.
(c) Whether the complaint filed by petitioner raises a mining dispute over which the Panel of
Arbitrators has jurisdiction, or a judicial question which should properly be brought before the
regular courts.
(d) Whether the dispute between the parties should be brought for arbitration under Rep. Act
No. 876.
Let us deal first with procedural matters.
Petitioner claims that respondents are guilty of forum-shopping for failing to disclose before this
Court that they had filed a Petition to Compel for Arbitration before the RTC of Makati City. However,
it cannot be determined from petitioner’s mere allegations in the Petition that the Petition to Compel for
Arbitration instituted by respondent Climax-Arimco, involves related causes of action and the grant
of the same or substantially the same reliefs as those involved in the instant case. Petitioner did not
attach copies of the Petition to Compel for Arbitration or any order or resolution of the RTC of Makati
City related to that case.
Furthermore, it can be gleaned from the nature of the two actions that the issues in the case before
the RTC of Makati City and in the petition for certiorari before the Court of Appeals are
different. A petition for certiorari raises the issue of whether or not there was grave abuse of
discretion, while the Petition to Compel for Arbitration seeks the implementation of the arbitration
clause in the agreement between the parties.
Petitioner next alleges that there was no authority granted by respondent Climax to the law firm of
Sycip Salazar Hernandez & Gatmaitan to file the petition before the Court of Appeals. There is
allegedly no Secretary’s Certificate from respondent Climax attached to the petition. The
Verification and Certification only contains a statement made by one Marianne M. Manzanas that
she is “also the authorized representative of [respondent Climax]” without presenting further proof
of such authority. Hence, it is argued that as to respondent Climax, the petition filed before the
Court of Appeals is an unauthorized act and the assailed orders of the Panel of Arbitrators have
become final.

Under Section 3, Rule 46 of the Rules of Court, a petitioner is required to submit, together with the
petition, a sworn certification of non-forum shopping, and failure to comply with this requirement is
sufficient ground for dismissal of the petition. The requirement that petitioner should sign the
certificate of non-forum shopping applies even to corporations, the Rules of Court making no
distinction between natural and juridical persons. The signatory in the case of the corporation
should be “a duly authorized director or officer of the corporation” who has knowledge of the
matter being certified.
[15]
If, as in this case, the petitioner is a corporation, a board resolution
authorizing a corporate officer to execute the certification against forum-shopping is necessary. A
certification not signed by a duly authorized person renders the petition subject to dismissal.
[16]

On this point, we have to agree with petitioner. There appears to be no subsequent compliance
with the requirement to attach a board resolution authorizing the signor Marianne M. Manzanas to
file the petition in behalf of respondent Climax. Respondent also failed to refute this in
its Comment.
[17]
However, this latter issue becomes irrelevant in the light of our decision to deny this
petition for review for lack of jurisdiction by the Panel of Arbitrators over the complaint filed by
petitioner, as will be discussed below.
We now come to the meat of the case which revolves mainly around the question of jurisdiction by
the Panel of Arbitrators: Does the Panel of Arbitrators have jurisdiction over the complaint for
declaration of nullity and/or termination of the subject contracts on the ground of fraud, oppression
and violation of the Constitution? This issue may be distilled into the more basic question of
whether the Complaint raises a mining dispute or a judicial question.
A judicial question is a question that is proper for determination by the courts, as opposed to a moot
question or one properly decided by the executive or legislative branch.
[18]
A judicial question is
raised when the determination of the question involves the exercise of a judicial function; that is, the
question involves the determination of what the law is and what the legal rights of the parties are
with respect to the matter in controversy.
[19]

On the other hand, a mining dispute is a dispute involving (a) rights to mining areas, (b) mineral
agreements, FTAAs, or permits, and (c) surface owners, occupants and
claimholders/concessionaires.
[20]
Under Republic Act No. 7942 (otherwise known as the Philippine
Mining Act of 1995), the Panel of Arbitrators has exclusive and original jurisdiction to hear and
decide these mining disputes.
[21]
The Court of Appeals, in its questioned decision, correctly stated
that the Panel’s jurisdiction is limited only to those mining disputes which raise questions of fact or
matters requiring the application of technological knowledge and experience.
[22]

In Pearson v. Intermediate Appellate Court,
[23]
this Court observed that the trend has been to make the
adjudication of mining cases a purely administrative matter.
[24]
Decisions
[25]
of the Supreme Court on
mining disputes have recognized a distinction between (1) the primary powers granted by pertinent
provisions of law to the then Secretary of Agriculture and Natural Resources (and the bureau
directors) of an executive or administrative nature, such as granting of license, permits, lease and
contracts, or approving, rejecting, reinstating or canceling applications, or deciding conflicting
applications, and (2) controversies or disagreements of civil or contractual nature between litigants
which are questions of a judicial nature that may be adjudicated only by the courts of justice. This
distinction is carried on even in Rep. Act No. 7942.

The Complaint charged respondents with disregarding and ignoring the provisions of the Addendum
Contract, violating the purpose and spirit of the May 14, 1987 Letter of Intent andFebruary 28, 1989
Agreement, and acting in a fraudulent and oppressive manner against petitioner and practicing fraud
and deception against the Government.
[26]
Petitioner alleged in hisComplaint that under the original
agreements (the May 14, 1987 Letter of Intent and February 28, 1989 Agreement) respondent Climax-
Arimco had committed to complete the Bankable Feasibility Study by 28 February 1992, but the
same was not accomplished. Instead, respondent Climax-Arimco, through false and insidious
representations and machinations by alleging technical and financial capacity, induced petitioner to
enter into the Addendum Contract and the FTAA in order to repeatedly extend the option period
within which to conduct the feasibility study. In essence, petitioner alleges that respondents,
conspiring and confederating with one another, misrepresented under the Addendum Contract and
FTAA that respondent Climax-Arimco possessed financial and technical capacity to put the project
into commercial production, when in truth it had no such qualification whatsoever to do so. By so
doing, respondents have allegedly caused damage not only to petitioner but also to the Republic of
the Philippines.
[27]


It is apparent that the Panel of Arbitrators is bereft of jurisdiction over the Complaint filed by
petitioner. The basic issue in petitioner’s Complaint is the presence of fraud or misrepresentation
allegedly attendant to the execution of the Addendum Contract and the other contracts emanating
from it, such that the contracts are rendered invalid and not binding upon the parties. It avers that
petitioner was misled by respondents into agreeing to the Addendum Contract. This constitutes fraud
which vitiated petitioner’s consent, and under Article 1390 of the Civil Code, is one of the grounds
for the annulment of a voidable contract. Voidable or annullable contracts, before they are set aside,
are existent, valid, and binding, and are effective and obligatory between the parties.
[28]
They can be
ratified.
[29]

Petitioner insists that the Complaint is actually one for the declaration of nullity of void contracts. He
argues that respondents, by their lack of financial and technical competence to carry out the mining
project, do not qualify to enter into a co-production, joint venture or production sharing agreement
with the Government, in circumvention of and in patent violation of the spirit and purpose of the
Constitution, particularly Section 2, Article XII thereof. Petitioner relies on the Civil Code for
support:
[30]

Art. 1409. The following contracts are inexistent and void from the beginning:
(1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or
public policy;
. . . .
(7) Those expressly prohibited or declared void by law.
. . . .
Petitioner asserts that for circumventing and being in patent violation of the Constitution,
the Addendum Contract, the FTAA and the other contracts are void contracts. As such, they do not
produce any effect and cannot be ratified.
However, whether the case involves void or voidable contracts is still a judicial question. It may, in
some instances, involve questions of fact especially with regard to the determination of the
circumstances of the execution of the contracts. But the resolution of the validity or voidness of the
contracts remains a legal or judicial question as it requires the exercise of judicial function. It
requires the ascertainment of what laws are applicable to the dispute, the interpretation and
application of those laws, and the rendering of a judgment based thereon. Clearly, the dispute is not
a mining conflict. It is essentially judicial. The complaint was not merely for the determination of
rights under the mining contracts since the very validity of those contracts is put in issue.
The Complaint is not about a dispute involving rights to mining areas, nor is it a dispute involving
claimholders or concessionaires. The main question raised was the validity of theAddendum Contract,
the FTAA and the subsequent contracts. The question as to the rights of petitioner or respondents
to the mining area pursuant to these contracts, as well as the question of whether or not petitioner
had ceded his mining claims in favor of respondents by way of execution of the questioned
contracts, is merely corollary to the main issue, and may not be resolved without first determining
the main issue.

The Complaint is also not what is contemplated by Rep. Act No. 7942 when it says the dispute should
involve FTAAs. The Complaint is not exclusively within the jurisdiction of the Panel of Arbitrators
just because, or for as long as, the dispute involves an FTAA. The Complaint raised the issue of the
constitutionality of the FTAA, which is definitely a judicial question. The question of
constitutionality is exclusively within the jurisdiction of the courts to resolve as this would clearly
involve the exercise of judicial power. The Panel of Arbitrators does not have jurisdiction over such
an issue since it does not involve the application of technical knowledge and expertise relating to
mining. This the Panel of Arbitrators has even conceded in its Orders dated 18 October 2001 and
25 June 2002. At this juncture, it is worthy of note that in a case,
[31]
which was resolved only on 1
December 2004, this Court upheld the validity of the FTAA entered into by the Republic of the
Philippines and WMC (Philippines), Inc. and constitutionality of Rep. Act No. 7942 and DENR
Administrative Order 96-40.
[32]
In fact, the Court took the case on an original petition, recognizing
“the exceptional character of the situation and the paramount public interest involved, as well as the
necessity for a ruling to put an end to the uncertainties plaguing the mining industry and the affected
communities as a result of doubts case upon the constitutionality and validity of the Mining Act, the
subject FTAA and future FTAAs, and the need to avert a multiplicity of suits.”
[33]

Arbitration before the Panel of Arbitrators is proper only when there is a disagreement between the
parties as to some provisions of the contract between them, which needs the interpretation and the
application of that particular knowledge and expertise possessed by members of that Panel. It is not
proper when one of the parties repudiates the existence or validity of such contract or agreement on
the ground of fraud or oppression as in this case. The validity of the contract cannot be subject of
arbitration proceedings. Allegations of fraud and duress in the execution of a contract are matters
within the jurisdiction of the ordinary courts of law. These questions are legal in nature and require
the application and interpretation of laws and jurisprudence which is necessarily a judicial function.
Petitioner also disagrees with the Court of Appeals’ ruling that the case should be brought for
arbitration under Rep. Act 876, pursuant to the arbitration clause in the Addendum Contractwhich
states that “[a]ll disputes arising out of or in connection with the Contract, which cannot be settled
amicably among the Parties, shall finally be settled under R.A. 876.” He points out that respondents
Climax and APMI are not parties to the Addendum Contract and are thus not bound by the arbitration
clause in said contract.

We agree that the case should not be brought under the ambit of the Arbitration Law, but for a
different reason. The question of validity of the contract containing the agreement to submit to
arbitration will affect the applicability of the arbitration clause itself. A party cannot rely on the
contract and claim rights or obligations under it and at the same time impugn its existence or
validity. Indeed, litigants are enjoined from taking inconsistent positions. As previously discussed,
the complaint should have been filed before the regular courts as it involved issues which are judicial
in nature.

WHEREFORE, in view of the foregoing, the Petition for Review on Certiorari Under Rule 45 is
DENIED. The Orders dated 18 October 2001 and 25 June 2002 of the Panel of Arbitrators are
SET ASIDE. Costs against petitioner Jorge Gonzales.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.


















REepublic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 92605 July 16, 1991
APEX MINING CO., INC., MT., DIWATA EXPLORATION AND MINING CORPORATION, CAMILO
BANAD, PRUDENCIO SUAREZ, AURORA SUAREZ, RODOLFO BOLO, LEONILA VILLAFLOR,
MAURICIA AMACIO, ANITA BITAGAN, APOLINARIO CANETE, ORLANDO CASTILLO, PAUL
GALICIA, and ROSARY V. GALICIA,petitioners,
vs.
HONORABLE CANCIO C. GARCIA ASSISTANT EXECUTIVE SECRETARY, OFFICE OF THE
PRESIDENT, HON. FULGENCIO S. FACTORAN, JR., SECRETARY OF ENVIRONMENT AND
NATURAL RESOURCES, and MARCOPPER MINING CORPORATION, respondents.
Martin T. Lu for petitioner-intervenor.
Gozon, Fernandez, Defensor & Parel for Marcopper Mining Corp.

PARAS, J.:p
This is a petition for certiorari with prayer for the issuance of a wit of preliminary injunction and/or restraining order
seeking to nullify and set aside the July 27, 1989 decision of the Office of the President * in O.P. Case No. 3728
dismissing the appeal of Apex Mining Co., Inc. and affirming the April 15, 1987 decision and January 14, 1988 order of
the Department of Environment and Natural Resources (DENR), respectively, declaring that the respective mining claims
of Apex Mining Co., Inc., et al., as well as Small Scale Mining Permits Nos. (X-1) 04 (X-1), 05, are null and void and/or
inoperative and the Permit to Explore No. 133 of Marcopper Mining Corporation as valid and subsisting; and denying the
motion for reconsideration.
The controversy in this case involves conflicting mining claims between herein petitioners Apex Mining Co., Inc., et al.
(Apex for short) and private respondent Marcopper Mining Corporation (MARCOPPER for short). The disputed area is
inside a timberland area located at Moncayo, Davao del Norte and Cateel, Davao Oriental, consisting of 4,941.0 hectares
(Rollo, p. 64).
MARCOPPER was one of the first mining claimants in the disputed area, having registered its 16 claims on January 19
and 20, 1984 through the filing of declarations of location pursuant to Presidential Decree No. 463, otherwise known as
the Mineral Resources Development Decree. MARCOPPER, allegedly, after registering its mining claim, learned from the
central office of the Bureau of Forest Development (BFD) that the disputed area is within an existing forest reservation
known as the "Agusan-Davao-Surigao Forest Reserve" established by Proclamation No. 369 on February 27, 1931 by then
Governor General Dwight F. Davis, and realizing the invalidity of its mining claims for having availed of a wrong
procedure, abandoned its 16 mining claims and applied for a prospecting permit instead with the BFD on April 11, 1984.
The area covered by its application consisted of 4,941.0 hectares overlapping its abandoned mining claims. On July 1,
1985, the BFD issued to it a Permit to Prospect No. 755-123185. Discovering strong evidence of mineral deposits in the
area, it applied for a permit to explore with the then Bureau of Mines and Geo-Sciences (BMGS). On March 10, 1986, it
was issued Permit to Explore No. 133. However, upon verification from the records of the BMGS, Davao City Mineral
District Office, it found that the area covered by its Permit to Explore No. 133 is also the subject of several
claims/declarations of APEX. Thus, on August 11, 1986, MARCOPPER filed with the BMGS a "Petition for Cancellation
of Mining Claims and/or Small Scale Mining Permits" against APEX, alleging, among others and in substance, that the
area covered by its Permit to Explore No. 133 and the declarations of locations/mining claims belonging to APEX are
within an established and existing forest reservation (Agusan-Davao-Surigao Forest Reserve) under Proclamation No. 369,
dated February 27, 1931, that the said mining claims/declarations of location of APEX are invalid for being violative of
Presidential Decree No. 463 and its implementing rules and regulations since the acquisition of mining rights within a
forest reserve is through the filing of application for a permit to prospect with the BFD and not through registration of
declarations of location with the BMGS (Rollo, p. 65; O.P. Decision, p. 2).
On September 23, 1986, APEX filed a Motion to Dismiss Marcopper's petition, alleging, in substance, that their mining
claims are not within any established or proclaimed forest reserve, and as such, the acquisition of mining lights thereto
must be undertaken through the registration of declaration of location with the BMGS and not through the filing of an
application for permit to prospect with the BFD; and that the permit to prospect and permit to explore issued to
MARCOPPER are inoperative and of no legal force and effect (Ibid., pp. 587-588).
On December 9, 1986, after COPPER filed its reply, the BMGS issued an order, the dispositive portion of which reads:
VIEWED IN THE LIGHT OF THE FOREGOING, the motion to dismiss should be, as hereby
it is GRANTED. Accordingly, the Permit to Explore No. 133 of the MMC is hereby declared null
and void. (Rollo, P. 110).
MARCOPPER appealed the said order, and the DENR after due hearing, rendered the appealed decision on April 15,
1987, the dispositive portion of which reads:
WHEREFORE, the Order dated 9 December 1986 of the Director, Bureau of Mines and Geo-
Sciences, is hereby REVERSED or SET ASIDE. Accordingly Permit to Explore No. 133 of
appellant Marcopper Mining Corporation is hereby declared valid and subsisting. The respective
mining claims of appellees Apex Mining Corporation, et al., as well as Small Scale Mining Permit
Nos. (X-1), 04 and (X-1), 05, are hereby declared null and void and/or inoperative. The Director,
Bureau of Mines and Geo-Sciences, is hereby directed to cancel the registered mining claims and to
revoke Small Scale Mining Permit Nos. (X-1) 04 (X-1), 05 of Apex Mining Co., et al. (Ibid., p. 100).
The motion for reconsideration of said decision having been denied by the DENR on January 4, 1988, APEX appealed
the case to the Office of the President (Ibid., p. 591), which on July 27, 1989, through the Assistant Executive Secretary for
Legal Affairs, Cancio C. Garcia, rendered a decision, the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, the instant appeal is hereby dismissed for lack of merit and
the appealed DENR decision and order, dated April 15, 1987 and January 4, 1988, respectively, are
hereby AFFIRMED, The stay-order issued by this Office on February 11, 1988 is accordingly
LIFTED.
Further the Petition to Intervene As Party filed by Minfed dated May 21, 1988, is hereby
DENIED. (Ibid., pp. 74-75; O.P. Decision, pp. 11-12)
APEX filed a motion for reconsideration, but the same was denied on November 16, 1989. Hence, this petition.
This Court, after the parties had submitted the required pleadings, in its resolution of August 7, 1990 (Ibid., p. 637),
resolved to give due course to the petition.
The instant petition is devoid of merit.
The main issue in this case is whether or not the disputed area is within an established and existing forest reservation.
The answer is in the affirmative.
The thrust of the petitioners' argument is that the subject area is not situated within a forest reserve and that Proclamation
No. 369 did not establish a forest reservation. The said proclamation merely withdrew from settlement or disposition
certain tracts of land described therein situated in the Province of Davao, Agusan and Surigao. It did so on the basis of
Section 8 of Act No. 2874, otherwise known as "the Public Land Act" which was promulgated on November 29, 1919
(Rollo, pp. 654657). Proclamation No. 369 could not have, as a matter of law, established a forest reserve for the simple
reason that it was issued not on the basis of Chapter XII, Title V of Act No. 2874 nor on the basis of Section 1826 of Act
2711 (the Revised Administrative Code which took effect on June 15, 1939), but on the basis of Section 8 of Act 2874
which empowers the Governor-General only to reclassify lands of the public domain. In confirmation, Proclamation No.
369 does not even use the word "reserve" or "forest reserve" (Ibid., p. 24; Petition, p. 17).
Section 8 of Act No. 2874, the former Public Land Act, the basis of Proclamation No. 369, provides —
Section 8. Only those lands shall be declared open to disposition or concession which have been
officially delimited and classified and, when practicable, surveyed, and which have not been
reserved for public or quasi-public uses, nor appropriated by the Governor, nor in any manner
become private property, not those on which a private right authorized and recognized by this Act
or any other valid law may be claimed, or which, having been reserved or appropriated, have ceased
to do so. However, the Governor-General may, for reasons of public interest, declare lands of the
public domain open to disposition before the same have had their boundaries established or been
surveyed, or may, for the same reasons, suspend their concession or disposition by proclamation
duly published or by Act of Legislature. (Rollo, pp. 745-746).
From the above-quoted provision, the Governor-General was specifically empowered not only to declare lands of public
domain open to disposition but also to suspend their concession or disposition. Accordingly, withdrawal of a certain area
to establish a forest reserve is, without question, within the power of the Governor-General. The then Governor-General
Dwight F. Davis, in issuing Proclamation No. 369, withdrew from settlement or disposition the tracts of land described
therein to establish a forest reserve. The intention can be gleaned from the last paragraph of Proclamation No. 369, which
reads:
From this reserve shall be considered automatically excluded all areas which had already been
certified and which in the future may be proclaimed as classified and certified by the Director of
Forestry as non-forest lands and approved by the Secretary of Agriculture and Natural Resources.
(Rollo, P. 768).
Moreover, then President Carlos P. Garcia confirmed that Proclamation No. 369 did establish a forest reserve when he
issued on May 8, 1959 Proclamation No. 583 entitled "Excluding From the Operation of Proclamation No. 369, Dated
February 27, 1931, Which Established The Agusan-Davao-Surigao Forest Reserve, Certain Parcels of Land Embraced Therein,
And Declaring the Same Open to Disposition Under the Provisions of the Mining Act." (Emphasis supplied). This
proclamation was concurred in by the Congress of the Philippines on May 21, 1959 through Concurrent Resolution No.
17 entitled "Concurrent Resolution Concurring in Proclamation Numbered Five Hundred Eighty-Three of the President
of the Philippines, Dated May Eight, Nineteen Hundred Fifty Nine, Excluding From the Operation of Proclamation
Numbered Three Hundred Sixty-Nine, which Established the Agusan-Davao-Surigao Forest Reserve, Certain Parcels of Land
Embraced Therein, and Declaring the Same Open to Disposition Under the Provisions of the Mining Act." (Emphasis
supplied).
In this connection, it should be stated that the findings of government agencies with respect to the construction of statutes
the implementation of which has been reposed in them, are controlling on the Court (Greenhills Mining Company v.
Office of the President, 163 SCRA 350 [1988]).
The disputed areas, being clearly within a forest reserve, are not open to mining location. Sections 8 and 13 of P.D. No.
463, as amended by P.D. No. 1385, provide:
Sec. 8. Prospecting, Exploration and Exploitation of Minerals in Reserved Lands. Prospecting, exploration
and exploitation of minerals in reserved lands other than mineral reservations may be undertaken
by the proper Government agencies. In the event that said agencies Cannot undertake the
prospecting, exploration and exploitation of mineral in reserved lands, qualified persons may be
permitted to undertake such prospecting, exploration and exploitation in accordance with the rules
and regulations promulgated by the Secretary. The right to exploit the minerals found therein shag
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 prospecting, exploration
and exploitation of said area shall be given priority.
Notwithstanding the provisions of the preceding paragraph, a special permit may be issued by the
Director to the exploration permittee to extract, remove and dispose of minerals in limited
quantities as verified by the Bureau of Mines.
Sec. 13. Areas Closed to Mining Location. No prospecting and exploration shall be allowed:
a) In military, or other Government reservations except when authorized by the
proper Government agency concerned;
xxx xxx xxx
Pursuant to P.D. No. 463, as amended, one can acquire mining rights within forest reserves by initially applying for a
permit to prospect with the Bureau of Forest and Development (BFD) and subsequently for a permit to explore with the
Bureau of Mines and Geo-Sciences (BMGS). Such procedural requisites were complied with and undertaken by
MARCOPPER after it had ascertained that its mining claims were found to be within the Agusan-Davao-Surigao Forest
Reserve. On the other hand, the mining claims and SSMPs of APEX being located within said forest reserve, are in
violation of the law and therefore result in a failure to validly acquire mining rights.
Finally, invariable is the rule that in reviewing administrative decisions of the Executive Branch of the government, the
findings of fact made therein must be respected, as long as they are supported by substantial evidence, even if not
overwhelming or preponderant. It is not for the reviewing court to weigh the conflicting evidence, determine the
credibility of the witnesses, or otherwise substitute its own judgment for that of the administrative agency on the
sufficiency of the evidence. The administrative decision in matters within the executive jurisdiction can only be set aside
on proof of gross abuse of discretion, fraud or error of law (Assistant Executive Secretary for Legal Affairs of the Office
of the President v. Court of Appeals, 169 SCRA 27 [1989]).
PREMISES CONSIDERED, the appealed decision of the Office of the President is AFFIRMED and the petition
forcertiorari is DISMISSED.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Sarmiento, Griño-Aquino, Medialdea, Regalado
and Davide, Jr., JJ., concur.
Gancayco, J., is on leave.

Footnotes
* Signed by Assistant Executive Secretary for Legal Affairs Cancio C. Garcia.

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Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-55132 August 30, 1988
PEOPLE OF THE PHILIPPINES, represented by the Office of the Provincial Fiscal Lagawe Ifugao,petitioner,
vs.
HON. FRANCISCO MEN ABAD, Judge of the Court of First Instance of Ifugao, Lagawe, Ifugao, JULIUS ROBLES,
EDUARDO BANDAO, MARCOS OYAGON, DAGYO UYANG, UDULON LATTOD, BUCCAHAN
MUNDIGUING, JUNIOR MUNDIGUING, PIWIT TUNDAGUI, GUINOMON CHONGA-AP, FERNANDO
TID-ONG, JULIO BALLOGAN, FERNAN GAGGO, CARMEN GAGGO AND BALBINA POCYA, respondents.
The Solicitor General for petitioner.
Delano V. Europa for respondents.

MELENCIO-HERRERA, J.:
We annul the Order of respondent Judge of the Court of First Instance of Ifugao, Lagawe Ifugao, dismissing the
Information for "Theft of Minerals" filed against private respondents Julius Robles and thirteen (13) others on the ground
that the facts charged do not constitute an offense.
The antecedental facts may be briefly recited thus:
1. Prior to 27 March 1978, the Director of Mines issued a commercial lease permit to one Felix de Castro granting him the
exclusive right to quarry, extract and carry away sand and gravel from the Sumigar Quarry located at Banawe, Ifugao.
2. On complaint by Felix de Castro, an Information was filed in the Court of First Instance of Ifugao (Criminal Case No.
316), presided over by respondent Judge, charging private respondents with the crime of "Theft of Minerals" defined and
penalized under Section 78 of Presidential Decree No. 483, as amended by Presidential Decree No. 1385.
3. The Information particularized the offense as follows:
That on or about March 27, 1978, continuing thru April, May and June of 1978, thence to July, August and September of
the same year, ... and within the jurisdiction of this honorable Court, the above-named accused, all residents of Banawe,
Ifugao, conspiring, confederating, confabulating and mutually helping one another with evident premeditation, and with
intent of gain, without the knowledge or consent of the said Permitted as well as against the latter's prohibition and
protestations, and without any permit of their own pursuant to law, did then and there wilfully, unlawfully, and feloniously
extract, gather, remove, take and/or dispose of the minerals or material aggregates like sand, gravel, stones, and boulders;
by the use of force, threat and intimidations against the Permittee and his laborers for the purpose of driving them away
from the Quarry Site, and by accused extracting, gathering, taking and hauling said material aggregates or minerals
therefrom, and disposing of the same for gain, as in fact they did gain from the disposition of all said minerals or
aggregates so extracted, gathered, and removed, pursuant to FOUR (4) Contracts with the Ministry of Public Highways,
Ifugao Engineering District, Lagawe Province of Ifugao, and ONE (1) Contract with the DIVISION (Manila), Inc.,
stationed at Banawe, Ifugao, to the prejudice of said FELIX DE CASTRO, as permittee in terms of the value of the
minerals and material aggregates thus gathered, extracted, removed., and disposed of, to the extent of FORTY
THOUSAND FIVE HUNDRED AND NINETY TWO PESOS and THIRTY EIGHT CENTAVOS (P 40,592.38) in
addition to the royalty and the damage caused thereby.
ALL CONTRARY TO LAW. (Annex "A," Petition, pp. 10-11, Rollo)
4. Respondents-accused filed a Motion to Quash on the ground that the facts charged do not constitute an offense
inasmuch as they had paid "sand and gravel tax," as shown by three official receipts dated February 2, 1978, April 13,
1978, and April 27, 1978, respectively, to the Municipal Treasurer of Banawe, Ifugao, for the quarrying of sand and gravel.
The taking, therefore, according to private respondents, was with the consent of the government. They also invoked LOI
No. 243, which allows persons to extract sand and gravel even within the leased area for use in government
infrastructures.
5. Petitioner opposed the quashal arguing that it is error to imply that consent was given by the Government through the
Municipal Treasurer inasmuch as the taxes paid to the Municipal Government are not the fees required by the Bureau of
Mines, which is the government entity empowered to approve permits and licenses and to regulate the exploitation of
mineral resources. Further, LOI 243, as implemented by Mines Administrative Order No. MRD-16 Series of 1977, grants
to government entities only the right to extract sand and gravel for infrastructure projects and not to any private person or
entity.
6. On 28 January 1980, respondent Judge issued the assailed Order quashing the Information on the ground that violation
of P.D. No. 463 is limited to an administrative violation and that the crime of Theft under the Revised Penal Code (Article
308) has not been committed since malice, which is an essential element in the commission of a crime, is lacking.
7. The reconsideration prayed for by petitioner was denied by respondent on 18 July 1980. Hence, this certiorari Petition
alleging grave abuse of discretion on the part of respondent Judge.
The crucial issue for resolution is whether or not the facts charged in the Information constitute an offense.
It is basic that since respondents-accused invoked the ground "that the facts charged do not constitute an offense" (Rule 1
17, 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 as defined in the law (People vs. Segovia 103 Phil. 1162
[1958]).
The Information, filed on 31 May 1979, charged private respondents with the crime of "Theft of Minerals" defined and
penalized under Section 78 of P.D. No. 463, as amended by Section 23 of P.D. No. 1385, effective 25 May 1978,
providing:
Section 78. Theft of Minerals. Any person who, without a mining lease or a temporary permit or, any other permit granted
by the Secretary or the Director under existing mining decrees, laws and regulations to mine, shall extract, remove and/or
dispose of minerals belonging to the Government or from a mining claim or claims leased, held or owned by other
persons, shall be deemed to have stolen the ores or the products thereof from the mines or mills. He shall, upon
conviction, be imprisoned from six (6) months to six (6) years or pay a fine from one hundred pesos (Pl00.00) to ten
thousand pesos (P10,000.00) or both, in the discretion of the court, besides paying compensation for the minerals
removed, extracted and disposed of, the royalty and the damage caused thereby.
The elements of the offense, therefore, are that : (1) the accused extracted, removed and/or disposed of minerals; (2) these
minerals belong to the Government or have been taken from a mining claim or claims leased, held or owned by other
persons; and (3) the accused did not possess a mining lease or a temporary permit or any other permit to mine granted by
the Secretary or the Director under existing mining decrees, laws and regulations.
Evidently, the Information filed in the Court below includes all the foregoing elements. Thus, it alleged (1) that the
accused, conspiring and mutually helping one another, wilfully and feloniously extracted, removed and/or disposed of
minerals or material aggregates like sand and gravel; (2) the minerals were taken from the Sumigar Quarry, Banawe, Ifugao,
which is covered by a commercial permit issued by the Bureau of Mines, Baguio City, in favor of complaining witness
Felix de Castro; and (3) the extracting was done without any mining lease or permit of their own pursuant to law.
It will have to be held, therefore, that based upon the facts alleged in the Information, the essential requisites of the
Offense of "Theft of Minerals," as specified by substantive law, are present. Thus, respondent Judge, in considering as
evidence the three receipts of tax payments issued by the Municipal Treasurer of Banawe, Ifugao, exceeded his jurisdiction
amounting to grave abuse of discretion when he considered matters of defense extrinsic to the allegations in the
Information and which should be substantiated during the trial. Moreover, said receipts merely show payment of taxes
pursuant to Provincial Ordinance No. 14 and not the authority to extract, remove, and/or dispose of minerals from the
Sumigar Quarry as required by P.D. No. 463. Those receipts are insufficient evidence to prove that the proper
Government office had, in effect, granted the required permit to extract minerals from said quarry.
The rationalization by respondent Judge that the taking away of sand and gravel was without malice because it was done
with the knowledge and participation of the Government since private respondents had paid taxes on the sand and gravel
extracted is not well-taken. In crimes punished by special laws, the act alone, irrespective of its motives, constitutes the
offense.
WHEREFORE, the Petition is granted; the Orders, dated 28 January 1980 and 18 July 1980, of respondent Judge are
annulled and set aside; and Criminal Case No. 316 of the Court a quo is ordered reinstated for further proceedings in
accordance with law.
SO ORDERED.
Paras, Padilla, Sarmiento and Regalado, JJ., concur.

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