FIRST DIVISION

Petitioners got hold of published articles and studies linking the incidence of a fecund of
illnesses to exposure to electromagnetic fields. These illnesses range from cancer to leukemia.

[G.R. NO. 145328 March 23, 2006]

EDUARDO F. HERNANDEZ, MA. ENCARBACION R. LEGASPI, JAIME BLANCO, JR.,
ENRIQUE BELO, CARLOS VIAPLANA, CARL FURER, VIVENCIO TINIO, MICHAEL BRIGGS,
ROSA CARAM, FAUSTO PREYSLER, ROBERT KUA, GEORGE LEE, GUILLERMO
LUCHANGCO, PETER DEE, LUISA MARQUEZ, ANGELITA LILLES, JUAN CARLOS,
HOMER GO, AMADEO VALENZUELA, EMILIO CHING, ANTONIO CHAN, MURLI SABNANI,
MARCOS ROCES, RAYMUNDO FELICIANO, NORMA GAFFUD, ALF HOLST, LOURDES P.
ROQUE, MANUEL DY, RAUL FERNANDEZ, VICTORIA TENGCO, CHI MO CHENG,
BARANGAY DASMARIAS, and HON. FRANCISCO B. IBAY,Petitioners v. NATIONAL
POWER CORPORATION, Respondent.
DECISION
CHICO-NAZARIO, J.:
Although Presidential Decree No. 1818 prohibits any court from issuing injunctions in cases
involving infrastructure projects, the prohibition extends only to the issuance of injunctions or
restraining orders against administrative acts in controversies involving facts or the exercise of
discretion in technical cases. On issues clearly outside this dimension and involving questions of
law, this Court declared that courts could not be prevented from exercising their power to
restrain or prohibit administrative acts.1 In such cases, let the hammer fall and let it fall hard.
With health risks linked to exposure to electromagnetic radiation as their battle cry, petitioners,
all residents of Dasmarias Village, are clamoring for the reversal of the decision 2 dated 3 May
2000 of the Court of Appeals in CA-G.R. SP No. 57849 as well as the resolution dated 27
September 2000, denying their motion for reconsideration.
The assailed decision3 of the Court of Appeals reversed the order of the Regional Trial Court of
Makati, issuing a writ of preliminary injunction against respondent National Power Corporation
(NAPOCOR) to stay the latter from energizing and transmitting high voltage electric current
through its cables erected from Sucat, Paraaque to Araneta Ave., Quezon City.

Petitioners left no stones unturned to address their malady. They aired this growing concern to
the NAPOCOR, which conducted a series of meetings with them.
NAPOCOR received flak from Representative Francis Joseph G. Escudero, who in his Privilege
Speech dated 10 May 1999, denounced the cavalier manner with which Napocor ignored safety
and consultation requirements in the questioned project.
Petitioners brought their woes to the attention of Rep. Arnulfo Fuentebella, Chairman of the
House Committee on Energy, wherein NAPOCOR was asked to shed light on the petitioners'
problem. In a letter dated 8 November 1999, Napocor President Federico Puno stated that
NAPOCOR was still in the process of coming up with a "win-win" solution to the concerns of the
Dasmarias Village and Forbes Park residents.4
In a letter dated 10 August 1999 addressed to Congressman Arnulfo P. Fuentebella,
NAPOCOR's President wrote:
We have discussed the matter with the Dasmarias and Forbes residents and we have come
up with four (4) options on how to address the problem, to wit:
Option Cost
Option 1: Transfer the line to Lawton Avenue P 111.84 million
(proposal of Dasmarias/Forbes)
Option 2: Maintain 12 meters distance along P 77.60 million the village
Option 3: Construct an underground line P 482.00 million
Option 4: Reroute along C-5 and South Luzon P 1,018.83 million
Expressway (combination of overhead and underground)5

But, first, the facts:

Sometime in 1996, NAPOCOR began the construction of 29 decagon-shaped steel poles or
towers with a height of 53.4 meters to support overhead high tension cables in connection with
its 230 Kilovolt Sucat-Araneta-Balintawak Power Transmission Project. Said transmission line
passes through the Sergio Osmea, Sr. Highway (South Superhighway), the perimeter of Fort
Bonifacio, and Dasmarias Village proximate to Tamarind Road, where petitioners' homes are.
Said project later proved to be petitioners' bane of existence.
Alarmed by the sight of the towering steel towers, petitioners scoured the internet on the
possible adverse effects that such a structure could cause to their health and well-being.

Negotiations between petitioners and the NAPOCOR reached an impass, with petitioners vying
for the relocation of the transmission lines to Fort Bonifacio on one hand, and the NAPOCOR
insisting on a 12-meter easement widening, on the other.6
Thus, petitioners, on 9 March 2000 filed a Complaint7 for Damages with Prayer for the Issuance
of a Temporary Restraining Order and/or a Writ of Preliminary Injunction against NAPOCOR.
Harping on the hazardous effects of exposure to electromagnetic radiation to the health and
safety to themselves and their families, petitioners, through the instant case, sought what they
had failed to achieve through amicable means with NAPOCOR and prayed, inter alia, for
damages and the relocation of the transmission lines to Lawton Avenue, Fort Bonifacio.

On 13 March 2000, Judge Francisco B. Ibay issued an order8 in Civil Case No. 00-352, which
temporarily restrained the respondent from energizing and transmitting high voltage electric
current through the said project. The pertinent portion of the said order reads:

In light of the foregoing order of the trial court, the petition which NAPOCOR filed with the Court
of Appeals was later amended to include the prayer for the nullification and injunction of the
Order dated 3 April 2000 of the trial court.

Acting on the plaintiffs' "Urgent Omnibus Motion," it appearing that the subject area will be
energized by midnight tonight based on a report taken from Representative Joker P. Arroyo by
plaintiffs' counsel, so as not to render moot and academic the instant case, as prayed for,
defendant National Power Corporation is ordered to maintain the status quo and/or be enjoined
from energizing and transmitting high voltage electric current through its cables for forty eight
(48) hours starting 4 o'clock in the afternoon today and ending 4 o'clock in the afternoon of 15
March 2000.9

In the challenged decision of 3 May 2000, the Court of Appeals reversed the trial court's order,
with the following fallo:

By order10 of 15 March 2000, the trial court extended the restraining order for 18 more days.
NAPOCOR filed a Petition for Certiorari with Prayer for Temporary Restraining Order and
Preliminary Injunction with the Court of Appeals assailing the above order by the trial court.
Alluding to Presidential Decree No. 1818 (1981), "Prohibiting Courts from Issuing Restraining
Orders or Preliminary Injunctions in Cases Involving Infrastructure and Natural Resource
Development Projects of, and Public Utilities Operated by, the Government," particularly Sec. 1,
NAPOCOR stalwartly sought the dismissal of the case on the ground of lack jurisdiction.
Presidential Decree No. 1818 provides:
Section 1. No Court in the Philippines shall have jurisdiction to issue any restraining order,
preliminary injunction or preliminary mandatory injunction in any case, dispute, or controversy
involving an infrastructure project, or a mining, fishery, forest or other natural resource
development project of the government, or any public utility operated by the government,
including among other public utilities for transport of the goods or commodities, stevedoring and
arrastre contracts, to prohibit any person or persons, entity or government official from
proceeding with or continuing the execution or implementation of any such project, or the
operation of such public utility or pursuing any lawful activity necessary for such execution,
implementation or operation.
In the interregnum, by order dated 3 April 2000, the trial court ordered the issuance of a writ of
preliminary injunction against NAPOCOR.11 The trial court articulated that an injunction was
necessary to stay respondent NAPOCOR's activation of its power lines due to the possible
health risks posed to the petitioners. Asserting its jurisdiction over the case, the trial court was of
the view that Presidential Decree No. 1818 and jurisprudence proscribing injunctions against
infrastructure projects do not find application in the case at bar because of the health risks
involved.
The trial court, thus, enjoined the NAPOCOR from further preparing and installing high voltage
cables to the steel pylons erected near petitioners' homes and from energizing and transmitting
high voltage electric current through said cables while the case is pending final adjudication,
upon posting of the bond amounting to P5,000,000.00 executed to the effect that petitioners will
pay all the damages the NAPOCOR may sustain by reason of the injunction if the Court should
finally decide that the petitioners are not entitled thereto.12

WHEREFORE, premises considered, the instant petition for certiorari is hereby GRANTED. The
assailed orders of the respondent court, dated March 13, 2000 and April 3, 2000, are hereby
REVERSED and SET ASIDE.13
In the Court of Appeals' rationale, the proscription on injunctions against infrastructure projects
of the government is clearly mandated by the above-quoted Section 1 of Presidential Decree
No. 1818, as reiterated by the Supreme Court in its Circulars No. 2-91 and No. 13-93, dated 15
March 1991 and 5 March 1993, respectively.
As their motion for reconsideration was met with similar lack of success, petitioners, in a last
attempt at vindication, filed the present Petition for Review on the following arguments:
I.
Temporary restraining orders and preliminary injunctions were purposely designed to address
matters of extreme urgency where there is probability of grave injustice and irreparable injury.14
II.
The rule on preliminary injunction merely requires that unless restrained, the act complained of
will probably work injustice to the applicant or probably violate his rights and tends to render the
judgment ineffectual.15 (Emphasis in the original.)
Fundamental to the resolution of the instant petition is the issue of whether or not the trial court
may issue a temporary restraining order and preliminary injunction to enjoin the construction and
operation of the 29 decagon-shaped steel poles or towers by the NAPOCOR, notwithstanding
Presidential Decree No. 1818.
Petitioners clutch on their stand that Presidential Decree No. 1818 could not be construed to
apply to cases of extreme urgency as in the present case when no less than the rights of the
petitioners to health and safety hangs on the balance.
We find the petition to be imbued with merit.
Presidential Decree No. 1818 was issued on 16 January 1981, prohibiting judges from issuing
restraining orders against government infrastructure projects. In part, the decree says, "No court
in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or
preliminary order, preliminary mandatory injunction in any case, dispute or controversy involving
an infrastructure project." Realizing the importance of this decree, this Tribunal had issued
different circulars to implement this particular law.

Presidential Decree No. 181816 prohibits courts from issuing injunctions against government
infrastructure projects. In Garcia v. Burgos,17 Presidential Decree No. 1818 was held to prohibit
courts from issuing an injunction against any infrastructure project in order not to disrupt or
hamper the pursuit of essential government projects or frustrate the economic development
effort of the nation.
While its sole provision would appear to encompass all cases involving the implementation of
projects and contracts on infrastructure, natural resource development and public utilities, this
rule, however, is not absolute as there are actually instances when Presidential Decree No.
1818 should not find application. In a spate of cases, this Court declared that although
Presidential Decree No. 1818 prohibits any court from issuing injunctions in cases involving
infrastructure projects, the prohibition extends only to the issuance of injunctions or restraining
orders against administrative acts in controversies involving facts or the exercise of discretion in
technical cases. On issues clearly outside this dimension and involving questions of law, this
Court declared that courts could not be prevented from exercising their power to restrain or
prohibit administrative acts.18
In the case at bar, petitioners sought the issuance of a preliminary injunction on the ground that
the NAPOCOR Project impinged on their right to health as enshrined in Article II, Section 15 of
the 1987 Constitution, which provides:
Sec. 15. The State shall protect and promote the right to health of the people and instill
consciousness among them.
To boot, petitioners, moreover, harp on respondent's failure to conduct prior consultation with
them, as the community affected by the project, in stark violation of Section 27 of the Local
Government Code which provides: "no project or program shall be implemented by government
authorities unless the consultations mentioned are complied with, and prior approval of
the Sanggunian concerned is observed."
From the foregoing, whether there is a violation of petitioners' constitutionally protected right to
health and whether respondent NAPOCOR had indeed violated the Local Government Code
provision on prior consultation with the affected communities are veritable questions of law that
invested the trial court with jurisdiction to issue a TRO and subsequently, a preliminary
injunction. As such, these questions of law divest the case from the protective mantle of
Presidential Decree No. 1818.
Moreover, the issuance by the trial court of a preliminary injunction finds legal support in Section
3 of Rule 58 of the Rules of Court which provides:
Sec. 3. Grounds for issuance of preliminary injunction. - A preliminary injunction may be granted
when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief
consists in restraining the commission or continuance of the act or acts complained of, or in
requiring the performance of an act or acts, either for a limited period or perpetually;

(b) That the commission, continuance or non-performance of the act or acts complained of
during the litigation would probably work injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding, and tending to render the judgment
ineffectual. (3a) (Emphasis supplied.)
The rule on preliminary injunction merely requires that unless restrained, the act complained of
will probably violate his rights and tend to render the judgment ineffectual.
Here, there is adequate evidence on record to justify the conclusion that the project of
NAPOCOR probably imperils the health and safety of the petitioners so as to justify the issuance
by the trial court of a writ of preliminary injunction.
Petitioners adduced in evidence copies of studies linking the incidence of illnesses such as
cancer and leukemia to exposure to electromagnetic fields. The records bear out, to boot, a copy
of a brochure of NAPOCOR regarding its Quezon Power Project from which will be supplying
NAPOCOR with the power which will pass through the towers subject of the controversy. The
NAPOCOR brochure provides that because of the danger concomitant with high voltage power,
Philippine laws mandate that the power lines should be located within safe distances from
residences. And the Quezon Power Project mandates an easement of 20 meters to the right and
20 meters to the left which falls short of the 12-meter easement that NAPOCOR was proposing
to petitioners.
Likewise on record, are copies of letters of Napocor President Federico Puno to Rep. Arnulfo
Fuentebella, Chairman of the House Committee on Energy, stating updates on the negotiations
being undertaken by the NAPOCOR and the Dasmarias Village and Forbes Park residents.
Also on file is the Privilege Speech dated 10 May 1999 of Representative Francis Joseph G.
Escudero, who denounced the cavalier manner with which Napocor ignored safety and
consultation requirements in the questioned project.
With a member of Congress denouncing the subject project of NAPOCOR because of the very
same health and safety ills that petitioners now hew to in this petition, and with documents on
record to show that NAPOCOR made representations to petitioners that they are looking into the
possibility of relocating the project, added to the fact that there had been series of negotiations
and meetings between petitioners and NAPOCOR as well as related agencies, there is ample
indicia to suggest to the mind of the court that the health concerns of the petitioners are, at the
very least, far from imaginary.
Indeed, if there is no cause for concern, NAPOCOR would not have been stirred to come up
with options to address the woes of petitioners, nor would Congressman Escudero have fired
away those strong words of censure, assailing what to Congressman Escudero smacks of a
"cavalier manner by which the NAPOCOR has responded to earnest pleas for a review of its
practice of installing massive pylons supporting high tension cables in densely populated
areas."19

True, the issue of whether or not the transmission lines are safe is essentially evidentiary in
nature, and pertains to the very merits of the action below. In fact, petitioners recognize that the
conclusiveness of their life, health and safety concerns still needs to be proved in the main case
below and they are prepared to do so especially in the light of some studies cited by respondent
that yield contrary results in a disputed subject. Despite the parties' conflicting results of studies
made on the issue, the possibility that the exposure to electromagnetic radiation causes cancer
and other disorders is still, indeed, within the realm of scientific scale of probability.
Equally important, we take judicial notice that the area alluded to as location of the NAPOCOR
project is a fragile zone being proximate to local earthquake faults, particularly the Marikina fault,
among other zones. This is not to mention the risks of falling structures caused by killer
tornadoes and super typhoons, the Philippines, especially Central Luzon, being situated along
the typhoon belt.
Moreover, the Local Government Code, requires conference with the affected communities of a
government project. NAPOCOR, palpably, made a shortcut to this requirement. In fact, there
appears a lack of exhaustive feasibility studies on NAPOCOR's part before making a go with the
project on hand; otherwise, it should have anticipated the legal labyrinth it is now caught in.
These are facts, which the trial court could not ignore, and form as sufficient basis to engender
the cloud of doubt that the NAPOCOR project could, indeed, endanger the lives of the
petitioners. A preliminary injunction is likewise justified prior to a final determination of the issues
of whether or not NAPOCOR ignored safety and consultation requirements in the questioned
project. Indeed, the court could, nay should, grant the writ of preliminary injunction if the
purpose of the other party is to shield a wrongdoing. A ruling to the contrary would amount to an
erosion of judicial discretion.
After all, for a writ of preliminary injunction to be issued, the Rules do not require that the act
complained of be in violation of the rights of the applicant. Indeed, what the Rules require is that
the act complained of be probably in violation of the rights of the applicant. Under the Rules of
Court, probability is enough basis for injunction to issue as a provisional remedy, which is
different from injunction as a main action where one needs to establish absolute certainty as
basis for a final and permanent injunction.
Pending the final determination of the trial court on the main case for damages, of whether or
not the NAPOCOR Project infringes on petitioners' substantive right to health and pending
determination of the question of whether there was non-observance of the prior-consultation
proviso under the Local Government Code, it is prudent to preserve the status quo. In Phil. Ports
Authority v. Cipres Stevedoring & Arrastre, Inc.,20 we held:
A preliminary injunction is an order granted at any stage of an action prior to judgment of final
order, requiring a party, court, agency, or person to refrain from a particular act or acts. It is a
preservative remedy to ensure the protection of a party's substantive rights or interests pending
the final judgment in the principal action. A plea for an injunctive writ lies upon the existence of a
claimed emergency or extraordinary situation which should be avoided for otherwise, the
outcome of a litigation would be useless as far as the party applying for the writ is concerned.
At times referred to as the "Strong Arm of Equity," we have consistently ruled that there is no
power the exercise of which is more delicate and which calls for greater circumspection than the

issuance of an injunction. It should only be extended in cases of great injury where courts of law
cannot afford an adequate or commensurate remedy in damages; "in cases of extreme urgency;
where the right is very clear; where considerations of relative inconvenience bear strongly in
complainant's favor; where there is a willful and unlawful invasion of plaintiff's right against his
protest and remonstrance, the injury being a continuing one, and where the effect of the
mandatory injunction is rather to reestablish and maintain a preexisting continuing relation
between the parties, recently and arbitrarily interrupted by the defendant, than to establish a new
relation." (Emphasis supplied.)
What is more, contrary to respondents' assertion, there is not a single syllable in the circulars
issued by this Court enjoining the observance of Presidential Decree No. 1818, which altogether
and absolutely, ties the hands of the courts from issuing a writ of preliminary injunction. What
Circular 2-9121 dated 15 March 1991 seeks to enjoin is the indiscriminate issuance of court
injunctions. The same holds for Circular 13-9322 dated 5 March 1993 and Circular 68-94.23 And,
in Circular No. 7-99, judges are enjoined to observe utmost caution, prudence and judiciousness
in the issuance of temporary restraining order and in the grant of writs of preliminary injunction to
avoid any suspicion that its issuance or grant was for consideration other than the strict merits of
the case.24
There is not a hint from the foregoing circulars suggesting an unbridled prohibition against the
issuance of temporary restraining orders or preliminary injunctions.
In sum, what Presidential Decree No. 1818 aims to avert is the untimely frustration of
government infrastructure projects, particularly by provisional remedies, to the detriment of the
greater good by disrupting the pursuit of essential government projects or frustrate the economic
development effort of the nation. Presidential Decree No. 1818, however, was not meant to be a
blanket prohibition so as to disregard the fundamental right to health, safety and well-being of a
community guaranteed by the fundamental law of the land.25
Lest we be misconstrued, this decision does not undermine the purpose of the NAPOCOR
project which is aimed towards the common good of the people. But, is the promotion of the
general welfare at loggerheads with the preservation of the rule of law? We submit that it is not.26
In the present case, the far-reaching irreversible effects to human safety should be the
primordial concerns over presumed economic benefits per se as alleged by the NAPOCOR.
Not too long ago, the Court, in Metropolitan Manila Development Authority (MMDA) v. Bel-Air
Village Association, Inc.,27 upheld the validity of the writ of preliminary injunction issued by the
Court of Appeals enjoining the implementation of the Metropolitan Manila Development
Authority's proposed action of opening of the Neptune Street to public vehicular traffic. We were
categorical Not infrequently, the government is tempted to take legal shortcuts to solve urgent problems of
the people. But even when government is armed with the best of intention, we cannot allow it to
run roughshod over the rule of law. Again, we let the hammer fall and fall hard on the illegal
attempt of the MMDA to open for public use a private road in a private subdivision. While we
hold that the general welfare should be promoted, we stress that it should not be achieved at the
expense of the rule of law.28

In hindsight, if, after trial, it turns out that the health-related fears that petitioners cleave on to
have adequate confirmation in fact and in law, the questioned project of NAPOCOR then suffers
from a paucity of purpose, no matter how noble the purpose may be. For what use will
modernization serve if it proves to be a scourge on an individual's fundamental right, not just to
health and safety, but, ostensibly, to life preservation itself, in all of its desired quality?
cralawlibrary
WHEREFORE, the petition is granted. The decision dated 3 May 2000 of the Court of Appeals in
CA-G.R. SP No. 57849 is REVERSED as well as the resolution dated 27 September 2000. The
Order dated 3 April 2000 of the Regional Trial Court of Makati in Civil Case No. 00-352 is hereby
REINSTATED. No pronouncement as to costs
SO ORDERED.

FIRST DIVISION
[G.R. No. L-41958. July 20, 1982.]
DONALD MEAD, Petitioner, v. 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.
SYNOPSIS
Petitioner and Isaac Arivas, President and General Manager, respectively, of the Insular Oil
Refinery Co., were charged by the Provincial Fiscal of Rizal before respondent court with
violation of Republic Act No. 3931 prohibiting the pollution of waterway due to the discharge of
industrial and waste matters from the operation of said refinery. Petitioner filed a motion to quash
the information on the ground that the trial court has no jurisdiction and that the Provincial Fiscal
has no legal personality to file said information but said motion was denied. Petitioners motion
for reconsideration having been denied, he filed the instant petition with the Supreme Court
seeking to annul the orders of the respondent judge.
The Supreme Court held that the filing of the information in question by the Provincial Fiscal is
premature and unauthorized, there being no prior finding or determination by the National Water
and Air Pollution Control Commission that the act of the petitioner had caused pollution of the
waterway and, therefore, the respondent judge is without jurisdiction to take cognizance of the
offense

Questioned orders annulled and set aside.

SYLLABUS

1. REMEDIAL LAW; CRIMINAL PROCEDURE; MOTION TO QUASH; DENIAL; RECOURSE TO

EXTRAORDINARY LEGAL REMEDIES CONSIDERED PROPER IN CERTAIN SITUATIONS;
CASE AT BAR. While there is no disputing the validity and wisdom of 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, it is also
recognized that, under certain situations, recourse to the said extraordinary legal remedies 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 v. Lutero" G.R. No. L-12669,
April 30, 1959, 105 Phil. 3007, where the motion to quash filed by the accused was on the
ground of double jeopardy and in "Pineda and Ampil Manufacturing Co. v. Bartolome Et. Al." 95
Phil. 930938 where the ground invoked was duplicity of offenses charged in the information. In
the case at bar, as the petitioner assails the very jurisdiction of the court wherein the criminal
case was filed, there is a more compelling reason that such issue be resolved soonest, in order
to avoid the courts 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 annulled for want of jurisdiction.
2. ID.; CIVIL PROCEDURES; MOTION TO DISMISS ON GROUND OF LACK OF
JURISDICTION; DUTY OF THE COURT TO RESOLVE THE SAME AS SOON AS POSSIBLE.
Even in civil actions, when the courts 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 unwholesome
consequences.
3. STATUTORY CONSTRUCTION; REPUBLIC ACT NO. 3931; LEGISLATIVE INTENT
DETERMINED FROM THE CONTEXT OF THE STATUTE; NATIONAL WATER AND AIR
POLLUTION COMMISSION, CLEARLY VESTED WITH EXCLUSIVE AUTHORITY TO
PROSECUTE VIOLATION THEREOF. The clear legislative intention in Republic Act No. 3931
is to vest the Commission the exclusive authority to determine the existence of "pollution"
penalized thereunder and to prosecute violations of said law. The last paragraph of Sec. 8 of
said law 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.
4. ID.; ID.; ID.; ID.; FILING OF COURT ACTION BEFORE DETERMINATION BY THE
COMMISSION OF VIOLATION THEREOF; PREMATURE; CASE AT BAR. Under Section 8 of
Republic Act No. 3931, 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. Hence; in the case at bar, the Provincial Fiscal of Rizal
lacked the authority to file the information charging the Petitioner with a violation of the provision
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.
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 charge therein.
5. ID.; ID.; ID.; ID.; NO BASIS FOR ALLEGED DISTINCTION IN THE NATURE OF CASES
FILED, EVEN UPON CONSIDERATION OF THE PURPOSE OF THE LAW. 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.
6. ID.; ID.; ID,; ID.; ABSENCE OF EXPLICIT DECLARATION IMMATERIAL WHEN
LEGISLATIVE INTENT IS CLEAR FROM THE PROVISIONS AND THE PHILOSOPHY OF THE
LAW. 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 deductible 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."cralaw virtua1aw library
7. ID.; ID.; ID.; ID.; VESTING OF AUTHORITY DEDUCED FROM THE SPECIALIZED
KNOWLEDGE REQUIRED OF THE COMMISSION AS PROVIDED FOR IN THE LAW. 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 parttime commissioners shall be a recommendee of the Philippine Council of Science and
Technology, and one of the full time commissioner shall be a sanitary engineer.
8. ID.; ID.; ID.; ID.; VESTING OF AUTHORITY IN AN ADMINISTRATIVE BODY TO
DETERMINE WHEN TO INSTITUTE A CRIMINAL ACTION, NOT NEW IN THIS
JURISDICTION. 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 v. 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) and R. B. Industrial Development Co., Ltd. v. 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.

DECISION

No. 3931, under an information reading as follows:jgc:chanrobles.com.ph

"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."cralaw virtua1aw library
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.chanrobles virtual
lawlibrary
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.

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."cralaw virtua1aw library

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 certiorarior 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 v. People, Et. Al. 101 Phil. 599; Echarol v. Purisima, Et Al., 13 SCRA
309.)

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

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

VASQUEZ, J.:

ofcertiorari, 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 v.
Lutero", G.R. No. L-12669, April 30, 1969, 105 Phil. 3007:jgc:chanrobles.com.ph
"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."cralaw virtua1aw library
To the same effect is the pronouncement in "Pineda and Ampil Manufacturing Co., v. Bartolome,
Et. Al." 95 Phil., 930-938, expressed as follows:jgc:chanrobles.com.ph
"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 v. Blanco, 46 Off Gaz., Supp. (1) 88; 81 Phil., 213], or an appeal
notcertiorari 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 v. Ros,
Et Al., 45 Off. Gaz. (No. 3), 1265; 79 Phil. 243; Santos v. 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 v. 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 v. Zulueta, supra. Citing Arevalo v. 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 v. Crossfield, 6 Phil., 355; Leung Ben v. OBrien, 38
Phil., 182. See also Mendoza v. Parugao, 49 Phil., 271; Dais v. Court of First Instance, 51 Phil.,
36).chanrobles.com:cralaw:red
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 v. Lutero was on the ground of double jeopardy.
In Pineda v. 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 courts 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 annulled for want of jurisdiction. Even in civil actions, We
have counselled that when the courts 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.chanroblesvirtualawlibrary

"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 courts 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 v. CIR, 51 O.G. 5636, 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. v. Ibaez, Et Al., 50 Off. Gaz. 1036; Enrique v. Macadaeg Et. Al., 47 Off. Gaz. 1207;
see also San Beda College v. CIR, 51 Off. Gaz. 5636.) (University of Sto. Tomas v. Villanueva,
L-13748, 30 October 1959.)" (Time, Inc. v. 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 living plants in the vicinity and
providing hazard to health and property in the same vicinity."cralaw virtua1aw library
Section 9 in its first paragraph, supposedly the criminal act being imputed to the petitioner, reads
as follows:jgc:chanrobles.com.ph
"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."cralaw virtua1aw library
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).chanrobles virtual lawlibrary
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:jgc:chanrobles.com.ph
"(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 other aquatic life."cralaw virtua1aw
library

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.

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:jgc:chanrobles.com.ph

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 provision of this Act."cralaw virtua1aw library

"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.chanroblesvirtualawlibrary
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."cralaw virtua1aw library
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

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.chanrobles.com.ph : virtual law library
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 v. 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 AntiDummy Board, it was said:jgc:chanrobles.com.ph
"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 Anti-Dummy 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. v. 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:jgc:chanrobles.com.ph
"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. Concommitantly, the respondent Judge is
without jurisdiction to take cognizance of the offense charged therein.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
WHEREFORE, the petition is hereby granted and the questioned Orders of the respondent
Judge are hereby annulled and set aside. The respondent Judge is ordered to dismiss Criminal
Case No. 5984-75 for lack of jurisdiction. No costs.
SO ORDERED.

THIRD DIVISION
[G.R. No. 93891. March 11, 1991.]
POLLUTION ADJUDICATION BOARD, Petitioner, v. COURT OF APPEALS and SOLAR
TEXTILE FINISHING CORPORATION, Respondents.

2. POLITICAL LAW; POLICE POWER; ENACTMENT OF POLLUTION CONTROL STATUTES

AND IMPLEMENTING REGULATIONS, AN EXERCISE THEREOF. The relevant pollution
control statute and implementing regulations were enacted and promulgated in the exercise of
that persuasive, 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.
3. CONSTITUTIONAL LAW; DUE PROCESS; YIELDS TO THE EXERCISE OF POLICE
POWER. It is a constitutional common place 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.
4. ADMINISTRATIVE LAW; POLLUTION ADJUDICATION BOARD; DUE PROCESS; HOLDING
OF PUBLIC HEARING AFTER EX-PARTE ISSUANCE OF A CEASE AND DESIS ORDER,
SUFFICIENT COMPLIANCE WITH DUE PROCESS CLAUSE. 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.
5. REMEDIAL LAW; ACTIONS; APPEAL; PROPER REMEDY WHERE QUESTIONED ORDER
AND WRIT OF EXECUTION WHERE LAWFUL. 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 Order and Writ of Execution were
entirely within the lawful authority of petitioner Board, the trial court did not err when it dismissed
Solars 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.

Oscar A. Pascua and Charemon Clio L. Borre for Petitioner.

Leonardo A. Aurelio for respondent Solar Textile Finishing Corp.

SYLLABUS

1. ADMINISTRATIVE LAW; POLLUTION ADJUDICATION BOARD; MAY ISSUE CEASE AND

DESIST ORDERS EX-PARTE; BASIS. Section 7(a) of P.D. No. 984 authorized petitioner
Board to issue ex parte cease and desist orders. 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 facie evidence 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 an ex 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.

RESOLUTION

FELICIANO, J.:

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 Corporations ("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:jgc:chanrobles.com.ph
"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 outfall outside of the plants
compound was even greater. The result of inspection conducted on 06 September 1988 showed

that respondents 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 TullahanTinejeros River by means of a by-pass and the remaining 20% was channeled into the plants
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 installations 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 Solars
plant:chanrob1es virtual 1aw library
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 Solars 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 Solars nonoperational wastewater treatment plant. Chemical analysis of samples of Solars 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 Solars 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 Solars 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 Boards subsequent Order allowing Solar to
operate temporarily had rendered Solars 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:jgc:chanrobles.com.ph

". . . Still and all, this decision is without prejudice to whatever action the appellee [Board] may
take relative to the projected inspection and evaluation of appellants [Solars] 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.chanrobles.com : virtual law library
The Board is now before us on a Petition for Review basically arguing that:chanrob1es virtual
1aw library
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.chanrobles.com:cralaw:red
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 o of the
1982 Effluent Code.
Solar, on the other hand, contends that under the Boards 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 Solars wastewater discharged posed
such a threat.
The Court is not persuaded by Solars contention. Section 7(a) of P.D. No. 984 authorized
petitioner Board to issue ex parte cease and desist orders under the following
circumstances:jgc:chanrobles.com.ph
"P.D. 984, Section 7, paragraph (a), provides:chanrob1es virtual 1aw library
(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 facie evidence 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 an ex 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.chanrobles virtual lawlibrary

alongside the findings of the November 1986 and September 1988 inspection reports, we get
the following results:jgc:chanrobles.com.ph

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."cralaw virtua1aw library

platinum (Apparent

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 Tullahan - Tinejeros River are classified as inland waters Class D under Section 68 of the
1978 NPCC Rules and Regulations, 5 which in part provides that:jgc:chanrobles.com.ph

units

"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

cobalt Color)

b) p H 6-8.5 b) pH 9.3 8.7

c) Tempera- 40 c) Temperature
ture in C (C)

"Section 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:chanrob1es virtual 1aw
library

d) Phenols in 0.1 d) Phenols in

mg./l. mg./l.

(a) Fresh Surface Water.

e) Suspended 75 e) Suspended 340 80

Classification Best usage

solids in solids in
x

mg./l. mg./l.
f) BOD in 80 f) BOD (5-day) 1,100 152

Class D For agriculture, irrigation,

mg./l mg./l.

live stock watering and

g) oil/Grease 10 g) Oil/Grease

industrial cooling and

in mg./l. mg./l.

processing

h) Detergents 5 h) Detergents 2.93

x

(Emphasis supplied)
The reports on the inspections carried on Solars wastewater treatment facilities on 5 and 12
November 1986 and 6 September 1988 set forth the following identical
finding:jgc:chanrobles.com.ph
"a. For legal action in [view of] violation of Section 103 of the 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

in mg./l." mg./l. MBAS

i) Dissolved 0
Oxygen, mg./l.
j) Settleable 0.4 1.5
Matter, mg./l.
k) Total Dis- 800 610
solved Solids

mg./l.
l) Total Solids 1,400 690
mg./l.
m) Turbidity
NTU/ppm. SiO3 70

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-Tinejeros
River, presumably loath to spend the money necessary to put its Wastewater Treatment Plant
("WTP") in an operating condition.chanrobles virtual lawlibrary
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:jgc:chanrobles.com.ph

The November 1986 inspections report concluded that:jgc:chanrobles.com.ph

"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

"1. No mayors 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 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:chanrob1es virtual
1aw library
x

The September 1988 inspection reports conclusions were:jgc:chanrobles.com.ph

"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 plants 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 result)." 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 Solars 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

(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).
x

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."cralaw virtua1aw library
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 persuasive, 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 common place 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 Boards 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.chanroblesvirtualawlibrary
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 Boards 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 Boards Order and Writ of Execution and
instead of appealing to the Court of Appeals. It will be recalled that 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
Order and Writ of Execution were entirely within the lawful authority of petitioner Board, the trial
court did not err when it dismissed Solars 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 Boards Order and Writ of Execution at a public hearing before the Board.
FIRST DIVISION

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 IIIPollution of Environment and Natural Resources Anti-Pollution 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 Anti-Pollution 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.

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;

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.

(2) Mayor's permit; and

(3) Region III-Department of Environment and Natural Resources AntiPollution 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 dollarearning 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.

AGAPITO MAGBANUA, INENIAS MARTIZANO, CARLITO HERRERA, SR., PAQUITO

LOPEZ, AND FRANCISCO HERRERA, petitioners,
vs.
HON. INTERMEDIATE APPELLATE COURT (SECOND SPECIAL CASES DIVISION),
EDUARDO, BUTCH, DIEGO AND NENA All Surnamed PEREZ, respondents.
Romulo A. Deles for petitioner.
Jose Valmayor for respondents.

ABAD SANTOS, J.:

A joint decision was rendered in CAR Case Nos. 827, 828 and 829 of the defunct Court of
Agrarian Relations stationed in San Carlos City (Negros Occidental) because the six plaintiffs
who are the petitioners at bar all alleged that they are share tenants of the defendants; that the
defendants diverted the free flow of water from their farm lots which caused portions of their
landholdings to dry up to their great damage and prejudice: and that they were told by the
defendants' overseer to vacate their respective areas for they could not plant palay any longer
due to lack of water. They prayed that they be declared as leasehold tenants and that the
defendants be ordered to pay attorney's fees and different kinds of damages.
The trial court rendered judgment in favor of the plaintiffs as follows:
WHEREFORE, coherent with the foregoing, this Court, in judgment, hereby:
1) Declares all the plaintiffs in the above-entitled cases to be maintained as
agricultural lessees in peaceful cultivation in their respective landholdings;
2) Prohibits defendants from closing and/or disrupting the free flow of water
supplying plaintiffs' landholdings;
3) Declares the Writ of Preliminary Injunction issued on February 23, 1982
to be permanent;
4) Orders plaintiffs to seek the assistance of the Ministry of Agrarian
Reforms in the fixing of their lease rentals;
5) Orders the defendants to pay all the six plaintiffs in the above-entitled
cases individually moral and exemplary damages in the sum of TEN
THOUSAND (P10,000.00) PESOS, each;

SO ORDERED.
Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

6) Orders the defendants to pay the attorney's fees in the amount of

P5,000.00; and
SECOND DIVISION
G.R. Nos. L-66870-72 June 29, 1985

7) Dismiss all other claims and counterclaims of the parties for lack of merit
(Rollo, pp. 28-29.)

The defendants appealed to the Intermediate Appellate Court which in turn rendered the
following judgment:
WHEREFORE, with the modification above indicated, deleting the award of
moral and exemplary damages and attorney's fees, the decision appealed
from is hereby AFFIRMED in all other respects, with costs against
appellants. (Rollo, pp. 37-38.)

Plaintiffs have all their legal rights to protect their interests under the law in
filing these cases, for what the defendants have done to them, and as such
they are entitled attorney's fees. (Rollo, pp. 27-28.)
Upon the other hand, in deleting the questioned award the Intermediate Appellate Court said:
However, We are not inclined to sustain the award of moral and exemplary
damages, as well as attorney's fees. There is no evidence showing that, in
dealing with plaintiffs, defendants acted fraudulently or in bad faith. There is
no showing either that attorney's fees are recoverable under Art: 2208, Civil
Code. (Rollo, P. 37.)

In this petition, the prayer is for the reinstatement of the moral and exemplary damages and the
attorney's fees which had been awarded by the trial court on the ground that the Intermediate
Appellate Court committed a grave abuse of discretion in eliminating them.
In awarding damages and attorney's fees, the trial court said:
This Court has likewise noted the manifestation submitted by plaintiffs on
June 3, 1982 wherein they have attached photographs of their dried-up
landholdings and wilted palay crops. The allegations in this pleading and the
accompanying pictures were never rebutted by the defendants.
In view of this circumstances, this Court holds the opinion that between the
period of the inspection by the PC Team on February 24, 1982 and June 13,
1982 when plaintiffs' manifestation was filed, there has been complete
closure of water supplying plaintiffs' landholdings which resulted to the
drying up of the same that greatly hampered the healthy growth of the palay
crop. This Court does not believe that the disruption of the water supply
which led to the very poor harvest is due to the fault/negligence of the
plaintiffs.
Under the law, the landowner has an obligation to keep the tenant in the
peaceful and continuous cultivation of his landholding. A disturbance of
possession, such as the act complained of, is violative of the law.

Under the facts of the case, the plaintiffs (now petitioners) are entitled to a measure of moral
damages. Article 2219 of the Civil Code permits the award of moral damages for acts mentioned
in Article 21 of the same code and the latter stipulates that: "Any person who wilfully causes loss
or injury to another in a manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage."
It appears that the petitioners were denied irrigation water for their farm lots in order to make
them vacate their landholdings. The defendants violated the plaintiffs' rights and caused
prejudice to the latter by the unjustified diversion of the water.
The petitioners are also entitled to exemplary damages because the defendants acted in an
oppressive manner. (See Art. 2232. Civil Code.)
It follows from the foregoing that the petitioners are also entitled to attorney's fees but the size of
the fees as well as the damages is subject to the sound discretion of the court.
WHEREFORE, the petition is granted; the decision under review is modified and each of the
plaintiffs is entitled to the following to be paid by the defendants jointly and severally:
Moral damages P1,000.00

The Honorable Court of Appeals, thru Associate Justice Porfirio V. Sison, in

June 23, 1982, promulgated a decision in the case of Buenaventura Garcia,
plaintiff-appellant, vs. Eduardo Jalandoni, Salud Garcia and Chester Garcia,
defendant-appellees, which ruling is relevant to the above-entitled cases
when the said Honorable Court state:
The law forbids the use of tenants like balls on a pool
table, whacked and volleyed and pocketed at the whim
and caprice of the player, or their positions placed on
the auction block like slaves to be sold to the highest
bidder. Such a calamitous situation erode wholehearted
dedication to the soil; it is destructive of the system
itself, as such an attitude takes away the freedom the
emancipated tenants won under the aegis of the New
Republic.
The plaintiff-appellant is entitled to moral damages in
the sum of P5,000.00 and exemplary damages in the
further sum of P5,000.00 to be paid by defendant
Eduardo Jalandoni. Let this be a warning to those who
flout the lofty purpose of the agrarian reform program.

Exemplarly damages 500.00

Attorney's fees 1,000.00
P2,500.00
The costs shall be assessed against the private respondents.
SO ORDERED.
Makasiar (Chairman) Aquino, Concepcion, Jr., Escolin and Cuevas JJ., concur.

SECOND DIVISION
G.R. No. 74816 March 17, 1987

ERNESTO R. RODRIGUEZ, JR., ERNESTO LL. RODRIGUEZ III, SACHA DEL ROSARIO,
JOSE P. GENITO, ZENAIDA Z. RODRIGUEZ, and ENECERIO MONDIA, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and DAYTONA CONSTRUCTION & DEVELOPMENT
CORPORATION, respondents.
Pelaez, Adriano & Gregorio Law Office for petitioners.
Balgos & Perez Law Office for respondents.

2. Ordering the defendant to pay plaintiff Ernesto Rodriguez, Jr. the amount
of P250,000.00 as moral damages and the amount of P5,000.00 as nominal
damages;
3. Ordering the defendant to pay plaintiff Ernesto LL. Rodriguez III the
amount of P200,000.00 as actual damages, the amount of P500,000.00 as
moral damages and the amount of P5,000.00 as nominal damages;
4. Ordering the defendant to pay plaintiff SACHA del Rosario the amount of
P20,000.00 as actual damages, the amount of P50,000.00 as moral
damages and the amount of P5,000.00 as nominal damages;
5. Ordering the defendant to pay plaintiff Zenaida Z. Rodriguez the amount
of P100,000.00 as actual damages, the amount of P100,000.00 as moral
damages and the amount of P5,000.00 as nominal damages; and

PARAS, J.:
Before Us is a petition to review by certiorari 1) respondent court's decision which sets aside the
order of default rendered by the trial court and 2) respondent court's resolution dated April 18,
1986 denying petitioners' (plaintiffs-appellees' therein) motion for extension of time to file motion
for reconsideration of its decision. 1
The antecedent facts of the case are as follows:
Plaintiffs (petitioners herein) filed on December 16, 1980, an action for abatement of a public
nuisance with damages against defendant (private respondent herein). After being granted four
(4) extensions of time to file an answer, defendant moved to dismiss the complaint on February
27, 1981 upon the ground that the lower court has no jurisdiction to hear the instant case and for
lack of cause of action. However, the motion was denied by the court on April 3, 1981, a copy of
which decision was received by the defendant on April 23, 1981. On May 5, 1981 defendant filed
a motion for reconsideration which motion was denied on July 7, 1981.
Instead of filing an answer, petitioner filed with Us in G.R. No. 57593, Daytona Construction &
Development Corporation vs. Rodriguez, et al. a motion for extension of time to file a petition for
review, but it never filed one, prompting Us to issue a resolution dated October 5, 1981 informing
the parties and the trial court that no petition for review was filed within the period that expired
on August 15, 1981.
Upon motion of plaintiffs, the court declared the defendant in default on November 4, 1981, and
authorized the plaintiffs to present evidence ex-parte. Upon learning of the said order, the
defendant on November 9, 1981 filed a motion to set aside the order of default and a motion to
admit answer with counterclaim which motions were denied by the lower court in an order dated
November 23, 1981.
On June 30, 1982, the court a quo rendered judgment for the plaintiffs and against defendant, its
dispositive portion reading as follows:

6. Ordering the defendant to pay the plaintiffs the amount of P50,000.00 as

attorney's fees, plus the costs of suit.
SO ORDERED. (pp. 63-64, Record on Appeal)
In an order dated July 9, 1982, the trial court upon motion of plaintiffs granted execution pending
appeal it indeed appearing as alleged in the motion that the continued operation of the cement
batching plant of the defendant poses a "great menace to the neighborhood, both in point of
health and property."
On July 23, 1982, defendant filed a petition for relief which was however denied by the lower
court. On July 29, 1982, defendant filed a petition for injunction with the Intermediate Appellate
Court which found the petition unmeritorious. 2 The appellate court promulgated on October 5,
1983, a decision denying due course to defendant's petition.
Its motion for reconsideration having been denied by the Appellate Court, defendant went on
appeal by certiorari to the Supreme Court (G.R. No. 66097) which, after the submission of
plaintiffs' comment and defendant's reply thereto, denied its petition for lack of merit.
The petition for injunction having been denied by both the IAC and this Court, defendant
pursued the remedy of appeal in respondent IAC, assigning the following errors.
I. THE TRIAL COURT ERRED WHEN IT DECLARED APPELLANT IN
DEFAULT DESPITE THE FACT THAT ITS FAILURE TO FILE ITS ANSWER
ON TIME WAS DUE SOLELY TO THE NEGLIGENCE OF ITS COUNSEL
AND DESPITE THE FACT THAT THE MOTION TO DISMISS THAT IT HAD
FILED COULD HAVE VERY WELL STOOD AS THE ANSWER OF THE
APPELLANT.

WHEREFORE, judgment is hereby rendered as follows:

1. Declaring the operation of the cement hatching plant of the defendant
corporation as a nuisance and ordering its permanent closure;

II. THE TRIAL COURT ERRED WHEN IT ASSUMED JURISDICTION

OVER THE CASE AND WHEN IT RENDERED JUDGMENT BY DEFAULT
AGAINST THE APPELLANT ON GROUNDS AND/OR BASIS NOT
ALLEGED IN THE COMPLAINT FILED AGAINST THE APPELLANT.

III. THE TRIAL COURT ERRED WHEN IT DID NOT ALLOW RELIEF FROM
JUDGMENT IN THE FACE OF THE REASONS PRESENTED TO IT AS
BASIS FOR SUCH RELIEF.
IV. THE TRIAL COURT ERRED WHEN DESPITE THE APPEAL HAVING
BEEN DULY PERFECTED, IT DETAINED THE CASE WITH IT AND
THEREAFTER, ISSUED AN ALIAS WRIT OF EXECUTION PENDING
APPEAL WITHOUT APPROPRIATE PRIOR NOTICE TO THE APPELLANT.
(pp. 1-2, Appellant's Brief)
On March 21, 1986, respondent court promulgated its decision, the decretal portion of which is
as follows:
WHEREFORE, the Decision appealed from is hereby reversed and set
aside and another one entered, remanding the case to the court of origin for
further proceedings and thereafter, to render judgment accordingly.
No pronouncement as to costs.
Notice of respondent Court's decision was received by plaintiffs-appellees thru counsel on April
3, 1986. Plaintiffs filed on April 15, 1986 a motion for extension of 30 days from April 18, 1986 or
up to May 18, 1986 to file a motion for reconsideration. However, on May 10, 1986, they filed a
24-page motion for reconsideration.
Meanwhile, on April 23, 1986, defendant's opposition to the motion for extension and countermotion to enter final judgment were received by plaintiffs. Plaintiffs countered with a reply filed
April 29, 1986. (Annex "C-2") Plaintiffs' counsel was surprised to receive on April 24, 1986,
respondent Court's resolution dated April 18, 1986, denying the motion for extension. Plaintiffs
requested respondent Court to treat their aforesaid reply filed on April 29, 1986 as a motion for
reconsideration of the said resolution of April 18, 1986, received by them on April 21, 1986, the
request being contained in their opposition dated May 22, 1986, to defendant-appellant's motion
to strike out the said opposition attached thereto as Annex C-3 " Neither the motion for
reconsideration (converted from the reply filed on April 29, 1986) nor the motion for
reconsideration of the decision itself was acted upon by respondent court.
Hence this petition to review, petitioners alleging that "Respondent court's challenged resolution
purporting to deny appellees' motion for extension of time to file a motion for reconsideration is a
nullity because the decision inHabaluyas v. Japson case, 3 solely relied on by the said resolution
has been made by the Supreme Court to operate prospectively and thereby rendered
inapplicable to parties situated as petitioners are, in order precisely to spare them from unfair
and unjust deprivation of their right to appeal."
In Our resolution, promulgated May 30, 1986 in the Habaluyas case itself (G.R. No. 70895), We
set aside the original judgment therein, thus:
However, the law and the Rules of Court do not expressly prohibit the filing
of a motion for extension of time to file a motion for reconsideration of a final
order or judgment.
In the case of Gibbs vs. Court of First Instance (80 Phil. 160), the Court
dismissed the petition for certiorari and ruled that the failure of defendant's
attorney to file the petition to set aside the judgment within the reglementary
period was due to excusable neglect, and, consequently, the record on

appeal was allowed. The Court did not rule that the motion for extension of
time to file a motion for new trial or reconsideration could not be granted.
In the case of Roque vs. Gunigundo (Administrative Case No. 1684, March
30, 1979, 89 SCRA 178), a division of the Court cited the Gibbs decision to
support a statement that a motion to extend the reglementary period for
filing the motion for reconsideration is not authorized or is not in order.
The Intermediate Appellate Court 4 is sharply divided on this issue. Appeals
have been dismissed on the basis of the original decision in this case.
After considering the able arguments of counsels for petitioners and
respondents, the Court resolved that the interest of justice would be better
served if the ruling in the original decision were applied prospectively from
the time herein stated The reason is that it would be unfair to deprive
parties of their fight to appeal simply because they availed themselves of a
procedure which was not expressly prohibited or allowed by the law or the
Rules. ... (pp. 3-4; Resolution dated May 30, 1986 in G.R. No. 70895;
emphasis supplied)
This Court further elucidated:
1). Beginning one month after the promulgation of this Resolution, the rule
shall be strictly enforced that no motion for extension of time to file a motion
petition for new trial or reconsideration may be filed with the Metropolitan or
Municipal Trial Courts, the Regional Trial Courts, and the Intermediate
Appellate Court. Such a motion may be filed only in cases pending with the
Supreme Court as the court of last resort, which may in its sound discretion
either grant or deny the extension requested. (p. 4, emphasis supplied)
The above new rules are made effective no earlier than June 30, 1986. In the instant case,
respondent Court's decision was received by plaintiffs on April 3, 1986. Plaintiffs or petitioners
herein filed on April 15, 1986 a motion for extension of 30 days from April 18, 1986 or up to May
18, 1986 to file a motion for reconsideration. On May 10, 1986, plaintiffs filed their motion for
reconsideration. Plaintiffs' motion for extension of time was not intended for delay but upon
showing of good cause, to wit: "for lack of material time due to heavy pressure of work on the
part of petitioners' counsel presently taking charge thereof, what is more the counsel handling
this case was doing so for the first time in substitution of Atty. Emmanuel Pelaez, who was
recently appointed Philippine Ambassador to the U.S"
It is clear therefore that petitioners' motion was based on good cause and was filed opportunely
making the act of respondent Court unwarranted in denying petitioners' motion for extension of
time to file its motion for reconsideration.
Another important issue raised by the petitioners is that the "subject decision which purports to
set aside the order of default rendered by the trial court is a nullity because respondent court
arbitrarily ignored in grave abuse of discretion amounting to lack of jurisdiction 1) the conclusive
effect of the trial court's final and unappealed order denying defendant's motion to set aside the
default order," and 2) the res judicata effect of the appellate court's final judgment in the
injunction case aforementioned upholding the trial court's order granting execution of its
Judgment pending appeal and, necessarily, the default order as well 3) the law of the case effect
of the appellate court's express ruling in the said injunction case sustaining the default order.
Petitioners' contentions merit our consideration.

It has been Our consistent ruling that a default order, being interlocutory, is not appealable but
an order denying a motion or petition to set aside an order of default is not merely interlocutory
but final and therefore immediately appealable. 5
Since the trial court's order of November 13, 1981, denying defendant's motion to set aside the
order of default was appealable but was not appealed by defendant, the necessary conclusion is
that the default order became final. Clearly therefore, respondent Court committed a grave
abuse of discretion in disregarding the finality of the default order.
The validity and finality of the default order was upheld by the judgment of the Appellate Court in
the injunction case (which passed upon the merits of the issuance of an order of execution
pending appeal) by virtue of the principle of res judicata and the doctrine re the law of the case.
There is no question that there were good reasons for the trial court to issue the order of
execution pending appeal. The order categorically stated that there was a need for the closure
and stoppage of the operation of defendant's (Daytona Construction) cement batching plant
because it posed "a great menace to the neighborhood both in point of health and property." The
trial court thus stated:
From the uncontroverted evidence presented by the plaintiffs, there is hardly
any question that the cement dust coming from the batching plant of the
defendant corporation is injurious to the health of the plaintiffs and other
residents in the area. The noise, the vibration, the smoke and the odor
generated by the day and night operation of the plant must indeed be
causing them serious discomfort and untold miseries. Its operation therefore
violates certain rights of the plaintiffs and causes them damage. It is thus a
nuisance and its abatement justified. (Decision, p. 5; p. 90, Rollo)
after taking into consideration evidence presented by plaintiffs (petitioners herein) as follows:
The evidence shows that the defendant is a domestic corporation duly
organized and existing under the laws of the Philippines with business
address of 252 Don Mariano Marcos Avenue (actually South Zuzuarregui
Avenue), Quezon City. It was issued by the Quezon City government a
business permit (Exhibit B) for the manufacture of road and building
concrete materials such as concrete aggregates, with cement batching
plant. Among the conditions set forth in the permit are that the said batching
plant shall (1) institute measures to prevent dust emission during the
manual charging of cement from bags to the receiving hopper of the bucket
elevator of the batching plant; (2) remove all sediment deposit in the settling
of tank for process water and proper maintenance should be observed at all
times. While the original permit issued to the defendant stated that its
operation at the place shall "not (be) beyond Dec. 31, 1979" (Exhibit B-2), it
was somehow allowed to operate way beyond said period.
Plaintiff Ernesto LL. Rodriguez Ill testified that he has three parcels of
residential lots adjacent to the Daytona compound. He informed the Court
that his property, with an area of 8,892 square meters has been over-run by
effluence from the cement batching plant of the defendant. The sediment
settled on the lots and all forms of vegetation have died as a result, and the
land tremendously diminished in value. His three lots are located in a prime
residential zone and each square meter in the area is easily valued at
P500.00. While he would like to sell at least a part of his property, he finds
no buyer because of its condition. It would cost him no less than
P250,000.00 to be able to repair the damage done to his property, and since

its present condition has been existing during the five years, he claimed that
the interest on his loss would be about P5,000.00. He has agreed to his
counsel's fee of P200,000.00. Zenaida Rodriguez testified that she owns a
lot with an area of 1,500 square meters. Two thirds of this area has been
damaged by the cement dust, emanating from the defendant's cement
batching plant. The continous flow of cement dust into her property affected
her deep well, their source of drinking water, and most of their fruit-bearing
and ornamental trees dried up. She also said that she has had sleepless
nights and became nervous as a result of the batching plant operation.
Even her previous pedigreed poodles have been afflicted by all sorts of
illnesses, many of them dying in the process. She claimed to have
sustained damages amounting to P370,000.00.
SACHA del Rosario testified that her house has to close its windows most of
the time because of the dust pollution and her precious plants have been
destroyed by the cement powder coming from the constant traffic of trucks
and other vehicles carrying the product of the batching plant passing
through her area. She claims damages amounting to more than
P100,000.00.
A chemical engineer, Alexander Cruz, said that the effluence deposited on
the properties of Ernesto LL. Rodriguez III and Zenaida Rodriguez has a
very high PH 11.8, and the soil is highly alkaline and cannot support plant
life; that pollution coming from the batching plant can cause stomach
disorder and skin problems; that the place of Ernesto LL. Rodriguez III is
bare of grass and the trees are dying, (Exhibits J, J-1 and J-2 and that there
is also a high degree of calcium on the property in question.
Witness Guido L. Quiban a civil engineer, testified that on the basis of his
examination of the property of Rodriguez I I I affected by the pollution, it
would cost at least P250,000.00 for the excavation filling, concreting of
canal and rental of equipment to repair it or restore it to its status quo ante.
Lawyer Ernesto R. Rodriguez, Jr., the 70-year old father of both Ernesto Ill
and Zenaida Z. Rodriguez, submitted a medical certificate that he had
recently been taken ill with acute bronchial asthma, hypertension and
atherosclerotic heart disease. (Exhibits L, L-1 to L-4). His physician, a
specialist graduate from the University of London and connected with
various hospitals in Manila, advised him against exposure to environmental
allegens, specifically cement dust and pollution. He also submitted as
exhibits various newspaper clippings (Exhibit M and excerpts from a book
(Exhibits N and N-1 showing that pollution can irritate the eye, sear lungs
and destroy vegetation, raise blood pressure, increase cholesterol levels,
interfere with sleep, cause ulcer, trigger heart attacks and the like; that it is
the common denominator of respiratory diseases, especially asthma chronic
bronchitis, bronchial asthma and emphysema and that polluted air can
develop abnormalities in lung function.
Dr. Raul I. del Rosario, a neighboring physician, testified that he had treated
several patients who traced their sickness to the pollution caused by
defendant Daytona batching plant. He said that cement dust produces
broncho-pulmonary obstructive diseases, broncho fibriotic lesions which
may produce cardio pulmonary complications, and the people living in the
neighborhood of the batching plant are the most susceptible to these
diseases. He reported many cases of bronchial asthma in both children and
adult who live in the vicinity of the cement batching plant and these cases

have been intermittently admitted and discharged from the Quirino Labor
Hospital where he presently works as a resident physician. He had intended
to open a medical clinic at his residence but he could not do so because the
washings from the cement mixers are dumped on the access road in front of
his house and when these washings are dried up they pollute the
neighborhood, rendering his intended medical clinic unfit and impractical for
the treatment of patients, particularly those suffering from respiratory
ailments.

We agree with Justice Luis A. Javellana in his concurring opinion in the injunction case before
the appellate court, thus:
Petitioner's conduct here appears to me to be tainted with fraud and
intended simply to delay the disposition of the case. When its motion to
dismiss the complaint was denied, and its motion for reconsideration of that
denial was, Unwise denied, it manifested its intention to elevate these
orders to the Supreme Court on a petition for review. Yet, it did nothing to
this end. The purpose of the ploy is obvious. Once it had announced its
intention to go to the Supreme Court, it effectively suspended the
proceedings in the trial court, or, at least, that was the effect. This enabled it
to continue with its operations and it would have done so indefinitely if it had
not been declared in-default and private respondents allowed to present
their evidence. It is quite apparent that petitioner really had no intention of
elevating the case to the Supreme Court otherwise, it would not have
allowed the extended period given to it by the Supreme Court to lapse
without filing the petition. Or, if it was in good faith, there it should have
informed the trial court that it was no longer pursuing its remedy in the
Supreme Court after it had decided that it is no longer availing of such
remedy. Instead, it concealed this fact from the trial court and the adverse
party, and allowed matters to take their course. It was not until it received
the adverse decision that it frantically sought to set things right I do not think
that petitioner deserves any consideration for trifling with the administration
of justice.(pp. 3-4; emphasis supplied)

Another lawyer, Eliseo Alampay, Jr., who likewise resides a few meters
away from the site of the Daytona batching plant, testified that the said plant
is certainly injurious to the health; that the cement dust are agents of lung
ailments, impair the growth of plants and even kill the birds in their cages;
that it is a demonstrable nuisance because its uncontrolled engine noise
and night long pounding prevent the neighborhood from being able to sleep
soundly and peacefully. He told the court that there was a time when he felt
like organizing the whole neighborhood into a demolition team to forcibly
dismantle the entire Daytona plant because "the authorities concerned
apparently have chosen to close their eyes and leave us to our miserable
plight." He said that the homes in the community all look dirty and dusty
because of the pollution that the batching plant of the defendant causes.
(Decision in Injunction Case, AC-G.R. No. 14602-SP, pp. 10-14)
Anent the default order, the appellate court in the injunction case said:
From the foregoing, it appears that petitioner was recreant in failing to file
an answer after respondent judge denied its motion to dismiss the
complaint. The motion to dismiss was denied in the order of the lower court
under date of April 3, 1981, a copy of which was received by petitioner on
April 23, 1981. A motion for reconsideration of the order of denial filed by
petitioner on May 7, 1981 was denied by said court on July 7, 1981. Instead
of filing an answer promptly, petitioner filed with the Supreme Court a
motion for extension of time to file a petition for review, but it never filed
one, prompting the Supreme Court to issue a resolution dated October 5,
1981 informing the parties that no petition for review was filed within the
period that expired on August 15, 1981. Inspite of the Supreme Court's
resolution, petitioner still failed to file any answer or pleading to arrest the
running of the prescriptive period. It was only on July 23, 1982, when
petitioner filed its Petition for Relief which was nine (9) months after the
Supreme Court's resolution was issued. Petitioner's assertion in its Petition
for Relief that the failure to file the answer was caused by "the unforseen
sickness of its corporate secretary who has custody of the records
necessary for the preparation of its defense" cannot be taken without much
doubt and hesitation. Petitioner did not even point out who was the
supposed corporate secretary or explain why the records were in the
possession of the corporate secretary instead of the counsel handling the
case. (Decision in Injunction case, p. 16; emphasis supplied)
With reference to defendant's allegation that it thought that the period within which to answer
(after its motion to dismiss had been denied) had been suspended by its having filed a petition
for review before the Supreme Court, same is without merit. The circumstances of the case point
to a deliberate desire to delay: the corporation, governed as it is by knowledgeable business
executives, should have taken steps to prevent its being declared in default. The corporation
waited six (6) months before verifying the status of the case: in the meantime it had been
declared in default, a judgment by default had been rendered against it, execution was already
pending before it woke up to file the case at hand.

WHEREFORE, the assailed decision and resolution are hereby SET ASIDE, and a new
judgment is hereby rendered REINSTATING the decision of the trial court with the modification
that all awards for nominal damages are hereby eliminated. Costs against private respondent.
SO ORDERED.
Fernan (Chairman), Padilla and Cortes, JJ., concur.

THIRD DIVISION
G.R. No. 79538 October 18, 1990
FELIPE YSMAEL, JR. & CO., INC., petitioner,
vs.
THE DEPUTY EXECUTIVE SECRETARY, THE SECRETARY OF ENVIRONMENT AND
NATURAL RESOURCES, THE DIRECTOR OF THE BUREAU OF FOREST DEVELOPMENT
and TWIN PEAKS DEVELOPMENT AND REALTY CORPORATION, respondents.
Taada, Vivo & Tan for petitioner.
Antonio E. Escober and Jurado Law Office for respondent Twin Peaks Development
Corporation.

COURTS, J.:
Soon after the change of government in February 1986, petitioner sent a letter dated March 17,
1986 to the Office of the President, and another letter dated April 2, 1986 to Minister Ernesto
Maceda of the Ministry of Natural Resources [MNR], seeking: (1) the reinstatement of its timber
license agreement which was cancelled in August 1983 during the Marcos administration; (2) the
revocation of TLA No. 356 which was issued to Twin Peaks Development and Realty
Corporation without public bidding and in violation of forestry laws, rules and regulations; and,
(3) the issuance of an order allowing petitioner to take possession of all logs found in the
concession area [Annexes "6" and "7" of the Petition; Rollo, pp. 54-63].
Petitioner made the following allegations:
(a) That on October 12, 1965, it entered into a timber license agreement designated as TLA No.
87 with the Department of Agriculture and Natural Resources, represented by then Secretary
Jose Feliciano, wherein it was issued an exclusive license to cut, collect and remove timber
except prohibited species within a specified portion of public forest land with an area of 54,920
hectares located in the municipality of Maddela, province of Nueva Vizcaya * from October 12,
1965 until June 30, 1990;
(b) That on August 18, 1983, the Director of the Bureau of Forest Development [hereinafter
referred to as "Bureau"], Director Edmundo Cortes, issued a memorandum order stopping all
logging operations in Nueva Vizcaya and Quirino provinces, and cancelling the logging
concession of petitioner and nine other forest concessionaires, pursuant to presidential
instructions and a memorandum order of the Minister of Natural Resources Teodoro Pena
[Annex "5" of the Petition; Rollo, p. 49];

license was not a contract within the due process clause of the Constitution, but only a privilege
which could be withdrawn whenever public interest or welfare so demands, and that petitioner
was not discriminated against in view of the fact that it was among ten concessionaires whose
licenses were revoked in 1983. Moreover, emphasis was made of the total ban of logging
operations in the provinces of Nueva Ecija, Nueva Vizcaya, Quirino and Ifugao imposed on April
2, 1986, thus:
xxx xxx xxx
It should be recalled that [petitioner's] earlier request for reinstatement has
been denied in view of the total ban of all logging operations in the
provinces of Nueva Ecija, Nueva Vizcaya, Quirino and Ifugao which was
imposed for reasons of conservation and national security.
The Ministry imposed the ban because it realizes the great responsibility it
bear [sic] in respect to forest t considers itself the trustee thereof. This being
the case, it has to ensure the availability of forest resources not only for the
present, but also for the future generations of Filipinos.
On the other hand, the activities of the insurgents in these parts of the
country are well documented. Their financial demands on logging
concessionaires are well known. The government, therefore, is well within
its right to deprive its enemy of sources of funds in order to preserve itself,
its established institutions and the liberty and democratic way of life of its
people.
xxx xxx xxx

(c) that on August 25, 1983, petitioner received a telegram from the Bureau, the contents of
which were as follows:
PURSUANT TO THE INSTRUCTIONS OF THE PRESIDENT YOU ARE
REQUESTED TO STOP ALL LOGGING OPERATIONS TO CONSERVE
REMAINING FORESTS PLEASE CONDUCT THE ORDERLY PULL-OUT
OF LOGGING MACHINERIES AND EQUIPMENT AND COORDINATE
WITH THE RESPECTIVE DISTRICT FORESTERS FOR THE INVENTORY
OF LOGS CUT PRIOR TO THIS ORDER THE SUBMISSION OF A
COMPLIANCE REPORT WITHIN THIRTY DAYS SHALL BE
APPRECIATED [Annex "4" of the Petition; Rollo, p. 48];
(d) That after the cancellation of its timber license agreement, it immediately sent a letter
addressed to then President Ferdinand Marcos which sought reconsideration of the Bureau's
directive, citing in support thereof its contributions to alleging that it was not given the forest
conservation and opportunity to be heard prior to the cancellation of its logging 531, but no
operations (Annex "6" of the Petition; Rollo, pp. 50 favorable action was taken on this letter;
(e) That barely one year thereafter, approximately one-half or 26,000 hectares of the area
formerly covered by TLA No. 87 was re-awarded to Twin Peaks Development and Reality
Corporation under TLA No. 356 which was set to expire on July 31, 2009, while the other half
was allowed to be logged by Filipinas Loggers, Inc. without the benefit of a formal award or
license; and,
(f) That the latter entities were controlled or owned by relatives or cronies of deposed President
Ferdinand Marcos. Acting on petitioner's letter, the MNR through then Minister Ernesto Maceda
issued an order dated July 22, 1986 denying petitioner's request. The Ministry ruled that a timber

[Annex "9" of the Petition, pp. 2-4; Rollo, pp. 65-67.]

Petitioner moved for reconsideration of the aforestated order reiterating, among others. its
request that TLA No. 356 issued to private respondent be declared null and void. The MNR
however denied this motion in an order dated September 15, 1986. stating in part:
xxx xxx xxx
Regarding [petitioner's] request that the award of a 26,000 hectare portion
of TLA No. 87 to Twin Peaks Realty Development Corporation under TLA
No. 356 be declared null and void, suffice it to say that the Ministry is now in
the process of reviewing all contracts, permits or other form of privileges for
the exploration, development, exploitation, or utilization of natural resources
entered into, granted, issued or acquired before the issuance of
Proclamation No. 3, otherwise known as the Freedom Constitution for the
purpose of amending, modifying or revoking them when the national interest
so requires.
xxx xxx xxx
The Ministry, through the Bureau of Forest Development, has jurisdiction
and authority over all forest lands. On the basis of this authority, the Ministry
issued the order banning all logging operations/activities in Quirino province,
among others, where movant's former concession area is located.

Therefore, the issuance of an order disallowing any person or entity from

removing cut or uncut logs from the portion of TLA No. 87, now under TLA
No. 356, would constitute an unnecessary or superfluous act on the part of
the Ministry.
xxx xxx xxx
[Annex "11" of the Petition, pp. 3-4; Rollo, pp. 77-78.]
On November 26, 1986, petitioner's supplemental motion for reconsideration was likewise
denied. Meanwhile, per MNR Administrative Order No. 54, series of 1986, issued on November
26, 1986, the logging ban in the province of Quirino was lifted.
Petitioner subsequently appealed from the orders of the MNR to the Office of the President. In a
resolution dated July 6, 1987, the Office of the President, acting through then Deputy Executive
Secretary Catalino Macaraig, denied petitioner's appeal for lack of merit. The Office of the
President ruled that the appeal of petitioner was prematurely filed, the matter not having been
terminated in the MNR. Petitioner's motion for reconsideration was denied on August 14, 1987.
Hence, petitioner filed directly with this Court a petition for certiorari, with prayer for the issuance
of a restraining order or writ of preliminary injunction, on August 27, 1987. On October 13, 1987,
it filed a supplement to its petition for certiorari. Thereafter, public and private respondents
submitted their respective comments, and petitioner filed its consolidated reply thereto. In a
resolution dated May 22, 1989, the Court resolved to give due course to the petition.
After a careful study of the circumstances in the case at bar, the Court finds several factors
which militate against the issuance of a writ of certiorari in favor of petitioner.
1. Firstly, the refusal of public respondents herein to reverse final and executory administrative
orders does not constitute grave abuse of discretion amounting to lack or excess of jurisdiction.
It is an established doctrine in this jurisdiction that the decisions and orders of administrative
agencies have upon their finality, the force and binding effect of a final judgment within the
purview of the doctrine of res judicata. These decisions and orders are as conclusive upon the
rights of the affected parties as though the same had been rendered by a court of general
jurisdiction. The rule of res judicata thus forbids the reopening of a matter once determined by
competent authority acting within their exclusive jurisdiction [See Brillantes v. Castro, 99 Phil.
497 (1956); Ipekdjian Merchandising Co., Inc. v. Court of Tax Appeals, G.R. No. L-15430,
September 30, 1963, 9 SCRA 72; San Luis v. Court of Appeals, G.R. No. 80160, June 26, 1989].
In the case at bar, petitioner's letters to the Office of the President and the MNR [now the
Department of Environment and Natural Resources (DENR) dated March 17, 1986 and April 2,
1986, respectively, sought the reconsideration of a memorandum order issued by the Bureau of
Forest Development which cancelled its timber license agreement in 1983, as well as the
revocation of TLA No. 356 subsequently issued by the Bureau to private respondents in 1984.
But as gleaned from the record, petitioner did not avail of its remedies under the law, i.e. Section
8 of Pres. Dec. No. 705 as amended, for attacking the validity of these administrative actions
until after 1986. By the time petitioner sent its letter dated April 2, 1986 to the newly appointed
Minister of the MNR requesting reconsideration of the above Bureau actions, these were already
settled matters as far as petitioner was concerned [See Rueda v. Court of Agrarian Relations,
106 Phil. 300 (1959); Danan v. Aspillera G.R. No. L-17305, November 28, 1962, 6 SCRA 609;
Ocampo v. Arboleda G.R. No. L-48190, August 31, 1987, 153 SCRA 374].

No particular significance can be attached to petitioner's letter dated September 19, 1983 which
petitioner claimed to have sent to then President Marcos [Annex "6" of Petition, Rollo, pp. 5053], seeking the reconsideration of the 1983 order issued by Director Cortes of the Bureau. It
must be pointed out that the averments in this letter are entirely different from the charges of
fraud against officials under the previous regime made by petitioner in its letters to public
respondents herein. In the letter to then President Marcos, petitioner simply contested its
inclusion in the list of concessionaires, whose licenses were cancelled, by defending its record
of selective logging and reforestation practices in the subject concession area. Yet, no other
administrative steps appear to have been taken by petitioner until 1986, despite the fact that the
alleged fraudulent scheme became apparent in 1984 as evidenced by the awarding of the
subject timber concession area to other entities in that year.
2. Moreover, petitioner is precluded from availing of the benefits of a writ of certiorari in the
present case because he failed to file his petition within a reasonable period.
The principal issue ostensibly presented for resolution in the instant petition is whether or not
public respondents herein acted with grave abuse of discretion amounting to lack or excess of
jurisdiction in refusing to overturn administrative orders issued by their predecessors in the past
regime. Yet, what the petition ultimately seeks is the nullification of the Bureau orders cancelling
TLA No. 87 and granting TLA No. 356 to private respondent, which were issued way back in
1983 and 1984, respectively.
Once again, the fact that petitioner failed to seasonably take judicial recourse to have the earlier
administrative actions reviewed by the courts through a petition for certiorari is prejudicial to its
cause. For although no specific time frame is fixed for the institution of a special civil action for
certiorari under Rule 65 of the Revised Rules of Court, the same must nevertheless be done
within a "reasonable time". The yardstick to measure the timeliness of a petition for certiorari is
the "reasonableness of the length of time that had expired from the commission of the acts
complained of up to the institution of the proceeding to annul the same" [Toledo v. Pardo, G.R.
No. 56761, November 19, 1982, 118 SCRA 566, 571]. And failure to file the petition for certiorari
within a reasonable period of time renders the petitioner susceptible to the adverse legal
consequences of laches [Municipality of Carcar v. Court of First Instance of Cebu, G.R. No. L31628, December 27, 1982, 119 SCRA 392).
Laches is defined as the failure or neglect for an unreasonable and unexplained length of time to
do that which by exercising due diligence, could or should have been done earlier, or to assert a
right within a reasonable time, warranting a presumption that the party entitled thereto has either
abandoned it or declined to assert it [Tijam v. Sibonghanoy, G.R. No. L-21450, April 15, 1968, 23
SCRA 29; Seno v. Mangubat, G.R. No. L-44339, December 2, 1987, 156 SCRA 113]. The rule is
that unreasonable delay on the part of a plaintiff in seeking to enforce an alleged right may,
depending upon the circumstances, be destructive of the right itself. Verily, the laws aid those
who are vigilant, not those who sleep upon their rights (Vigilantibus et non dormientibus jura
subveniunt) [See Buenaventura v. David, 37 Phil. 435 (1918)].
In the case at bar, petitioner waited for at least three years before it finally filed a petition for
certiorari with the Court attacking the validity of the assailed Bureau actions in 1983 and 1984.
Considering that petitioner, throughout the period of its inaction, was not deprived of the
opportunity to seek relief from the courts which were normally operating at the time, its delay
constitutes unreasonable and inexcusable neglect, tantamount to laches. Accordingly, the writ of
certiorari requiring the reversal of these orders will not lie.
3. Finally, there is a more significant factor which bars the issuance of a writ of certiorari in favor
of petitioner and against public respondents herein. It is precisely this for which prevents the
Court from departing from the general application of the rules enunciated above.

A cursory reading of the assailed orders issued by public respondent Minister Maceda of the
MNR which were ed by the Office of the President, will disclose public policy consideration which
effectively forestall judicial interference in the case at bar,
Public respondents herein, upon whose shoulders rests the task of implementing the policy to
develop and conserve the country's natural resources, have indicated an ongoing department
evaluation of all timber license agreements entered into, and permits or licenses issued, under
the previous dispensation. In fact, both the executive and legislative departments of the
incumbent administration are presently taking stock of its environmental policies with regard to
the utilization of timber lands and developing an agenda for future programs for their
conservation and rehabilitation.
The ongoing administrative reassessment is apparently in response to the renewed and growing
global concern over the despoliation of forest lands and the utter disregard of their crucial role in
sustaining a balanced ecological system. The legitimacy of such concern can hardly be
disputed, most especially in this country. The Court takes judicial notice of the profligate waste of
the country's forest resources which has not only resulted in the irreversible loss of flora and
fauna peculiar to the region, but has produced even more disastrous and lasting economic and
social effects. The delicate balance of nature having been upset, a vicious cycle of floods and
droughts has been triggered and the supply of food and energy resources required by the
people seriously depleted.
While there is a desire to harness natural resources to amass profit and to meet the country's
immediate financial requirements, the more essential need to ensure future generations of
Filipinos of their survival in a viable environment demands effective and circumspect action from
the government to check further denudation of whatever remains of the forest lands. Nothing
less is expected of the government, in view of the clear constitutional command to maintain a
balanced and healthful ecology. Section 16 of Article II of the 1987 Constitution provides:
SEC. 16. The State shall protect and promote the right of the people to a
balanced and healthful ecology in accord with the rhythm and harmony of
nature.

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].
In fine, the legal precepts highlighted in the foregoing discussion more than suffice to justify the
Court's refusal to interfere in the DENR evaluation of timber licenses and permits issued under
the previous regime, or to pre-empt the adoption of appropriate corrective measures by the
department.
Nevertheless, the Court cannot help but express its concern regarding alleged irregularities in
the issuance of timber license agreements to a number of logging concessionaires.
The grant of licenses or permits to exploit the country's timber resources, if done in
contravention of the procedure outlined in the law, or as a result of fraud and undue influence
exerted on department officials, is indicative of an arbitrary and whimsical exercise of the State's
power to regulate the use and exploitation of forest resources. The alleged practice of bestowing
"special favors" to preferred individuals, regardless of merit, would be an abuse of this power.
And this Court will not be a party to a flagrant mockery of the avowed public policy of
conservation enshrined in the 1987 Constitution. Therefore, should the appropriate case be
brought showing a clear grave abuse of discretion on the part of officials in the DENR and
related bureaus with respect to the implementation of this public policy, the Court win not
hesitate to step in and wield its authority, when invoked, in the exercise of judicial powers under
the Constitution [Section 1, Article VIII].
However, petitioner having failed to make out a case showing grave abuse of discretion on the
part of public respondents herein, the Court finds no basis to issue a writ of certiorari and to
grant any of the affirmative reliefs sought.
WHEREFORE, the present petition is DISMISSED.
SO ORDERED.

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 [See Espinosa v. Makalintal, 79
Phil. 134 (1947); Coloso v. Board of Accountancy, 92 Phil. 938 (1953); Pajo v. Ago, 108 Phil. 905
(1960); Suarez v. Reyes, G.R. No. L-19828, February 28, 1963, 7 SCRA 461; Ganitano v.
Secretary of Agriculture and Natural Resources, G. R. No. L-21167, March 31, 1966, 16 SCRA
543; Villegas v. Auditor General, G.R. No. L-21352, November 29, 1966, 18 SCRA 877; Manuel
v. Villena, G.R. No. L-28218, February 27, 1971, 37 SCRA 745; Lacuesta v. Herrera, G.R. No. L33646, January 28, 1975, 62 SCRA 115; Lianga Bay Logging Co., Inc. v. Enage, G.R. No. L30637, July 16, 1987, 152 SCRA 80]. More so where, as in the present case, the interests of a
private logging company are pitted against that of the public at large on the pressing public
policy issue of forest conservation. For this Court recognizes the wide latitude of discretion
possessed by the government in determining the appropriate actions to be taken to preserve
and manage natural resources, and the proper parties who should enjoy the privilege of utilizing
these resources [Director of Forestry v. Munoz, G.R. No. L-24796, June 28, 1968, 23 SCRA
1183; Lim, Sr. v. The Secretary of Agriculture and Natural Resources, G.R. No. L-26990, August
31, 1970, 34 SCRA 751]. 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

Fernan, C.J., Gutierrez Jr. and Bidin, JJ., concur.

EN BANC

G.R. No. 101083 July 30, 1993

JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors,
and represented by their parents ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE
SADIUA, minor, represented by her parents CALVIN and ROBERTA SADIUA, CARLO,
AMANDA SALUD and PATRISHA, all surnamed FLORES, minors and represented by their
parents ENRICO and NIDA FLORES, GIANINA DITA R. FORTUN, minor, represented by her
parents SIGRID and DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all
surnamed MISA, minors and represented by their parents GEORGE and MYRA MISA,
BENJAMIN ALAN V. PESIGAN, minor, represented by his parents ANTONIO and ALICE
PESIGAN, JOVIE MARIE ALFARO, minor, represented by her parents JOSE and MARIA

VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor, represented by her parents

FREDENIL and JANE CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN
T. NARVASA, minor, represented by his parents GREGORIO II and CRISTINE CHARITY
NARVASA, MA. MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE GABRIELLE, all
surnamed SAENZ, minors, represented by their parents ROBERTO and AURORA SAENZ,
KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING,
minors, represented by their parents MARIO and HAYDEE KING, DAVID, FRANCISCO and
THERESE VICTORIA, all surnamed ENDRIGA, minors, represented by their parents
BALTAZAR and TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA,
minors, represented by their parents ANTONIO and MARICA ABAYA, MARILIN, MARIO,
JR. and MARIETTE, all surnamed CARDAMA, minors, represented by their parents MARIO
and LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all surnamed
OPOSA, minors and represented by their parents RICARDO and MARISSA OPOSA,
PHILIP JOSEPH, STEPHEN JOHN and ISAIAH JAMES, all surnamed QUIPIT, minors,
represented by their parents JOSE MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO,
ANNA, DANIEL and FRANCISCO, all surnamed BIBAL, minors, represented by their
parents FRANCISCO, JR. and MILAGROS BIBAL, and THE PHILIPPINE ECOLOGICAL
NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the
Department of Environment and Natural Resources, and THE HONORABLE ERIBERTO U.
ROSARIO, Presiding Judge of the RTC, Makati, Branch 66, respondents.
Oposa Law Office for petitioners.
The Solicitor General for respondents.

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful
ecology which the petitioners dramatically associate with the twin concepts of "inter-generational
responsibility" and "inter-generational justice." Specifically, it touches on the issue of whether the
said petitioners have a cause of action to "prevent the misappropriation or impairment" of
Philippine rainforests and "arrest the unabated hemorrhage of the country's vital life support
systems and continued rape of Mother Earth."
The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66
(Makati, Metro Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The
principal plaintiffs therein, now the principal petitioners, are all minors duly represented and
joined by their respective parents. Impleaded as an additional plaintiff is the Philippine Ecological
Network, Inc. (PENI), a domestic, non-stock and non-profit corporation organized for the
purpose of, inter alia, engaging in concerted action geared for the protection of our environment
and natural resources. The original defendant was the Honorable Fulgencio S. Factoran, Jr.,
then Secretary of the Department of Environment and Natural Resources (DENR). His
substitution in this petition by the new Secretary, the Honorable Angel C. Alcala, was
subsequently ordered upon proper motion by the petitioners. 1 The complaint 2 was instituted as
a taxpayers' class suit 3 and alleges that the plaintiffs "are all citizens of the Republic of the
Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of the natural resource
treasure that is the country's virgin tropical forests." The same was filed for themselves and
others who are equally concerned about the preservation of said resource but are "so numerous
that it is impracticable to bring them all before the Court." The minors further asseverate that

they "represent their generation as well as generations yet unborn." 4 Consequently, it is prayed
for that judgment be rendered:
. . . ordering defendant, his agents, representatives and other persons
acting in his behalf to
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing, renewing or
approving new timber license agreements.
and granting the plaintiffs ". . . such other reliefs just and equitable under the premises." 5
The complaint starts off with the general averments that the Philippine archipelago of 7,100
islands has a land area of thirty million (30,000,000) hectares and is endowed with rich, lush and
verdant rainforests in which varied, rare and unique species of flora and fauna may be found;
these rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are
also the habitat of indigenous Philippine cultures which have existed, endured and flourished
since time immemorial; scientific evidence reveals that in order to maintain a balanced and
healthful ecology, the country's land area should be utilized on the basis of a ratio of fifty-four per
cent (54%) for forest cover and forty-six per cent (46%) for agricultural, residential, industrial,
commercial and other uses; the distortion and disturbance of this balance as a consequence of
deforestation have resulted in a host of environmental tragedies, such as (a) water shortages
resulting from drying up of the water table, otherwise known as the "aquifer," as well as of rivers,
brooks and streams, (b) salinization of the water table as a result of the intrusion therein of salt
water, incontrovertible examples of which may be found in the island of Cebu and the
Municipality of Bacoor, Cavite, (c) massive erosion and the consequential loss of soil fertility and
agricultural productivity, with the volume of soil eroded estimated at one billion (1,000,000,000)
cubic meters per annum approximately the size of the entire island of Catanduanes, (d) the
endangering and extinction of the country's unique, rare and varied flora and fauna, (e) the
disturbance and dislocation of cultural communities, including the disappearance of the Filipino's
indigenous cultures, (f) the siltation of rivers and seabeds and consequential destruction of
corals and other aquatic life leading to a critical reduction in marine resource productivity, (g)
recurrent spells of drought as is presently experienced by the entire country, (h) increasing
velocity of typhoon winds which result from the absence of windbreakers, (i) the floodings of
lowlands and agricultural plains arising from the absence of the absorbent mechanism of forests,
(j) the siltation and shortening of the lifespan of multi-billion peso dams constructed and
operated for the purpose of supplying water for domestic uses, irrigation and the generation of
electric power, and (k) the reduction of the earth's capacity to process carbon dioxide gases
which has led to perplexing and catastrophic climatic changes such as the phenomenon of
global warming, otherwise known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental consequences of continued and
deforestation are so capable of unquestionable demonstration that the same may be submitted
as a matter of judicial notice. This notwithstanding, they expressed their intention to present
expert witnesses as well as documentary, photographic and film evidence in the course of the
trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million
hectares of rainforests constituting roughly 53% of the country's land mass.

17. Defendant, however, fails and refuses to cancel the existing TLA's to the
continuing serious damage and extreme prejudice of plaintiffs.

9. Satellite images taken in 1987 reveal that there remained no more than
1.2 million hectares of said rainforests or four per cent (4.0%) of the
country's land area.

18. The continued failure and refusal by defendant to cancel the TLA's is an
act violative of the rights of plaintiffs, especially plaintiff minors who may be
left with a country that is desertified (sic), bare, barren and devoid of the
wonderful flora, fauna and indigenous cultures which the Philippines had
been abundantly blessed with.

10. More recent surveys reveal that a mere 850,000 hectares of virgin oldgrowth rainforests are left, barely 2.8% of the entire land mass of the
Philippine archipelago and about 3.0 million hectares of immature and
uneconomical secondary growth forests.

19. Defendant's refusal to cancel the aforementioned TLA's is manifestly

contrary to the public policy enunciated in the Philippine Environmental
Policy which, in pertinent part, states that it is the policy of the State

11. Public records reveal that the defendant's, predecessors have granted
timber license agreements ('TLA's') to various corporations to cut the
aggregate area of 3.89 million hectares for commercial logging purposes.

(a) to create, develop, maintain and improve conditions under which man
and nature can thrive in productive and enjoyable harmony with each other;

A copy of the TLA holders and the corresponding areas covered is hereto
attached as Annex "A".

(b) to fulfill the social, economic and other requirements of present and
future generations of Filipinos and;

12. At the present rate of deforestation, i.e. about 200,000 hectares per
annum or 25 hectares per hour nighttime, Saturdays, Sundays and
holidays included the Philippines will be bereft of forest resources after
the end of this ensuing decade, if not earlier.

(c) to ensure the attainment of an environmental quality that is conductive to

a life of dignity and well-being. (P.D. 1151, 6 June 1977)

13. The adverse effects, disastrous consequences, serious injury and

irreparable damage of this continued trend of deforestation to the plaintiff
minor's generation and to generations yet unborn are evident and
incontrovertible. As a matter of fact, the environmental damages
enumerated in paragraph 6 hereof are already being felt, experienced and
suffered by the generation of plaintiff adults.
14. The continued allowance by defendant of TLA holders to cut and
deforest the remaining forest stands will work great damage and irreparable
injury to plaintiffs especially plaintiff minors and their successors who
may never see, use, benefit from and enjoy this rare and unique natural
resource treasure.
This act of defendant constitutes a misappropriation and/or impairment of
the natural resource property he holds in trust for the benefit of plaintiff
minors and succeeding generations.
15. Plaintiffs have a clear and constitutional right to a balanced and healthful
ecology and are entitled to protection by the State in its capacity as
the parens patriae.
16. Plaintiff have exhausted all administrative remedies with the defendant's
office. On March 2, 1990, plaintiffs served upon defendant a final demand to
cancel all logging permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as
Annex "B".

20. Furthermore, defendant's continued refusal to cancel the

aforementioned TLA's is contradictory to the Constitutional policy of the
State to
a. effect "a more equitable distribution of opportunities, income and wealth"
and "make full and efficient use of natural resources (sic)." (Section 1,
Article XII of the Constitution);
b. "protect the nation's marine wealth." (Section 2, ibid);
c. "conserve and promote the nation's cultural heritage and resources (sic)"
(Section 14, Article XIV,id.);
d. "protect and advance the right of the people to a balanced and healthful
ecology in accord with the rhythm and harmony of nature." (Section 16,
Article II, id.)
21. Finally, defendant's act is contrary to the highest law of humankind
the natural law and violative of plaintiffs' right to self-preservation and
perpetuation.
22. There is no other plain, speedy and adequate remedy in law other than
the instant action to arrest the unabated hemorrhage of the country's vital
life support systems and continued rape of Mother Earth. 6
On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the
complaint based on two (2) grounds, namely: (1) the plaintiffs have no cause of action against
him and (2) the issue raised by the plaintiffs is a political question which properly pertains to the
legislative or executive branches of Government. In their 12 July 1990 Opposition to the Motion,

the petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action,
(2) the motion is dilatory and (3) the action presents a justiciable question as it involves the
defendant's abuse of discretion.

violated the terms of the agreement or other forestry laws and regulations. Petitioners'
proposition to have all the TLAs indiscriminately cancelled without the requisite hearing would be
violative of the requirements of due process.

On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to
dismiss. 7 In the said order, not only was the defendant's claim that the complaint states no
cause of action against him and that it raises a political question sustained, the respondent
Judge further ruled that the granting of the relief prayed for would result in the impairment of
contracts which is prohibited by the fundamental law of the land.

Before going any further, We must first focus on some procedural matters. Petitioners instituted
Civil Case No. 90-777 as a class suit. The original defendant and the present respondents did
not take issue with this matter. Nevertheless, We hereby rule that the said civil case is indeed a
class suit. The subject matter of the complaint is of common and general interest not just to
several, but to all citizens of the Philippines. Consequently, since the parties are so numerous, it,
becomes impracticable, if not totally impossible, to bring all of them before the court. We likewise
declare that the plaintiffs therein are numerous and representative enough to ensure the full
protection of all concerned interests. Hence, all the requisites for the filing of a valid class suit
under Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil case
and in the instant petition, the latter being but an incident to the former.

Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised
Rules of Court and ask this Court to rescind and set aside the dismissal order on the ground that
the respondent Judge gravely abused his discretion in dismissing the action. Again, the parents
of the plaintiffs-minors not only represent their children, but have also joined the latter in this
case. 8
On 14 May 1992, We resolved to give due course to the petition and required the parties to
submit their respective Memoranda after the Office of the Solicitor General (OSG) filed a
Comment in behalf of the respondents and the petitioners filed a reply thereto.
Petitioners contend that the complaint clearly and unmistakably states a cause of action as it
contains sufficient allegations concerning their right to a sound environment based on Articles
19, 20 and 21 of the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192
creating the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental
Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the people to a
balanced and healthful ecology, the concept of generational genocide in Criminal Law and the
concept of man's inalienable right to self-preservation and self-perpetuation embodied in natural
law. Petitioners likewise rely on the respondent's correlative obligation per Section 4 of E.O. No.
192, to safeguard the people's right to a healthful environment.
It is further claimed that the issue of the respondent Secretary's alleged grave abuse of
discretion in granting Timber License Agreements (TLAs) to cover more areas for logging than
what is available involves a judicial question.
Anent the invocation by the respondent Judge of the Constitution's non-impairment clause,
petitioners maintain that the same does not apply in this case because TLAs are not contracts.
They likewise submit that even if TLAs may be considered protected by the said clause, it is well
settled that they may still be revoked by the State when the public interest so requires.
On the other hand, the respondents aver that the petitioners failed to allege in their complaint a
specific legal right violated by the respondent Secretary for which any relief is provided by law.
They see nothing in the complaint but vague and nebulous allegations concerning an
"environmental right" which supposedly entitles the petitioners to the "protection by the state in
its capacity as parens patriae." Such allegations, according to them, do not reveal a valid cause
of action. They then reiterate the theory that the question of whether logging should be permitted
in the country is a political question which should be properly addressed to the executive or
legislative branches of Government. They therefore assert that the petitioners' resources is not
to file an action to court, but to lobby before Congress for the passage of a bill that would ban
logging totally.
As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be
done by the State without due process of law. Once issued, a TLA remains effective for a certain
period of time usually for twenty-five (25) years. During its effectivity, the same can neither be
revised nor cancelled unless the holder has been found, after due notice and hearing, to have

This case, however, has a special and novel element. Petitioners minors assert that they
represent their generation as well as generations yet unborn. We find no difficulty in ruling that
they can, for themselves, for others of their generation and for the succeeding generations, file a
class suit. Their personality to sue in behalf of the succeeding generations can only be based on
the concept of intergenerational responsibility insofar as the right to a balanced and healthful
ecology is concerned. Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety. 9 Such
rhythm and harmony indispensably include, inter alia, the judicious disposition, utilization,
management, renewal and conservation of the country's forest, mineral, land, waters, fisheries,
wildlife, off-shore areas and other natural resources to the end that their exploration,
development and utilization be equitably accessible to the present as well as future
generations. 10 Needless to say, every generation has a responsibility to the next to preserve that
rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little
differently, the minors' assertion of their right to a sound environment constitutes, at the same
time, the performance of their obligation to ensure the protection of that right for the generations
to come.
The locus standi of the petitioners having thus been addressed, We shall now proceed to the
merits of the petition.
After a careful perusal of the complaint in question and a meticulous consideration and
evaluation of the issues raised and arguments adduced by the parties, We do not hesitate to find
for the petitioners and rule against the respondent Judge's challenged order for having been
issued with grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions of
the said order reads as follows:
xxx xxx xxx
After a careful and circumspect evaluation of the Complaint, the Court
cannot help but agree with the defendant. For although we believe that
plaintiffs have but the noblest of all intentions, it (sic) fell short of alleging,
with sufficient definiteness, a specific legal right they are seeking to enforce
and protect, or a specific legal wrong they are seeking to prevent and
redress (Sec. 1, Rule 2, RRC). Furthermore, the Court notes that the
Complaint is replete with vague assumptions and vague conclusions based
on unverified data. In fine, plaintiffs fail to state a cause of action in its
Complaint against the herein defendant.
Furthermore, the Court firmly believes that the matter before it, being
impressed with political color and involving a matter of public policy, may not

be taken cognizance of by this Court without doing violence to the sacred

principle of "Separation of Powers" of the three (3) co-equal branches of the
Government.

Does this section mandate the State to provide

sanctions against all forms of pollution air, water and
noise pollution?

The Court is likewise of the impression that it cannot, no matter how we

stretch our jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to
cancel all existing timber license agreements in the country and to cease
and desist from receiving, accepting, processing, renewing or approving
new timber license agreements. For to do otherwise would amount to
"impairment of contracts" abhored (sic) by the fundamental law. 11

MR. AZCUNA:

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient
definiteness a specific legal right involved or a specific legal wrong committed, and that the
complaint is replete with vague assumptions and conclusions based on unverified data. A
reading of the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal right the right to a balanced and
healthful ecology which, for the first time in our nation's constitutional history, is solemnly
incorporated in the fundamental law. Section 16, Article II of the 1987 Constitution explicitly
provides:
Sec. 16. The State shall protect and advance the right of the people to a
balanced and healthful ecology in accord with the rhythm and harmony of
nature.
This right unites with the right to health which is provided for in the
preceding section of the same article:
Sec. 15. The State shall protect and promote the right to health of the
people and instill health consciousness among them.
While the right to a balanced and healthful ecology is to be found under the Declaration of
Principles and State Policies and not under the Bill of Rights, it does not follow that it is less
important than any of the civil and political rights enumerated in the latter. Such a right belongs
to a different category of rights altogether for it concerns nothing less than self-preservation and
self-perpetuation aptly and fittingly stressed by the petitioners the advancement of which
may even be said to predate all governments and constitutions. As a matter of fact, these basic
rights need not even be written in the Constitution for they are assumed to exist from the
inception of humankind. If they are now explicitly mentioned in the fundamental charter, it is
because of the well-founded fear of its framers that unless the rights to a balanced and healthful
ecology and to health are mandated as state policies by the Constitution itself, thereby
highlighting their continuing importance and imposing upon the state a solemn obligation to
preserve the first and protect and advance the second, the day would not be too far when all
else would be lost not only for the present generation, but also for those to come generations
which stand to inherit nothing but parched earth incapable of sustaining life.
The right to a balanced and healthful ecology carries with it the correlative duty to refrain from
impairing the environment. During the debates on this right in one of the plenary sessions of the
1986 Constitutional Commission, the following exchange transpired between Commissioner
Wilfrido Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question:
MR. VILLACORTA:

Yes, Madam President. The right to healthful (sic)

environment necessarily carries with it the correlative
duty of not impairing the same and, therefore, sanctions
may be provided for impairment of environmental
balance. 12
The said right implies, among many other things, the judicious management and conservation of
the country's forests.
Without such forests, the ecological or environmental balance would be irreversiby
disrupted.
Conformably with the enunciated right to a balanced and healthful ecology and the right to
health, as well as the other related provisions of the Constitution concerning the conservation,
development and utilization of the country's natural resources, 13 then President Corazon C.
Aquino promulgated on 10 June 1987 E.O. No. 192, 14 Section 4 of which expressly mandates
that the Department of Environment and Natural Resources "shall be the primary government
agency responsible for the conservation, management, development and proper use of the
country's 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." Section 3 thereof makes the following statement of policy:
Sec. 3. Declaration of Policy. It is hereby declared the policy of the State
to ensure the sustainable use, development, management, renewal, and
conservation of the country's forest, mineral, land, off-shore areas and other
natural resources, including the protection and enhancement of the quality
of the environment, and equitable access of the different segments of the
population to the development and the use of the country's natural
resources, not only for the present generation but for future generations as
well. It is also the policy of the state to recognize and apply a true value
system including social and environmental cost implications relative to their
utilization, development and conservation of our natural resources.
This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of
1987, 15specifically in Section 1 thereof which reads:
Sec. 1. Declaration of Policy. (1) The State shall ensure, for the benefit of
the Filipino people, the full exploration and development as well as the
judicious disposition, utilization, management, renewal and conservation of
the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas
and other natural resources, consistent with the necessity of maintaining a
sound ecological balance and protecting and enhancing the quality of the
environment and the objective of making the exploration, development and
utilization of such natural resources equitably accessible to the different
segments of the present as well as future generations.

(2) The State shall likewise recognize and apply a true value system that
takes into account social and environmental cost implications relative to the
utilization, development and conservation of our natural resources.
The above provision stresses "the necessity of maintaining a sound ecological balance and
protecting and enhancing the quality of the environment." Section 2 of the same Title, on the
other hand, specifically speaks of the mandate of the DENR; however, it makes particular
reference to the fact of the agency's being subject to law and higher authority. Said section
provides:
Sec. 2. Mandate. (1) The Department of Environment and Natural
Resources shall be primarily responsible for the implementation of the
foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out
the State's constitutional mandate to control and supervise the exploration,
development, utilization, and conservation of the country's natural
resources.
Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve
as the bases for policy formulation, and have defined the powers and functions of the DENR.
It may, however, be recalled that even before the ratification of the 1987 Constitution, specific
statutes already paid special attention to the "environmental right" of the present and future
generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152
(Philippine Environment Code) were issued. The former "declared a continuing policy of the
State (a) to create, develop, maintain and improve conditions under which man and nature can
thrive in productive and enjoyable harmony with each other, (b) to fulfill the social, economic and
other requirements of present and future generations of Filipinos, and (c) to insure the
attainment of an environmental quality that is conducive to a life of dignity and well-being." 16 As
its goal, it speaks of the "responsibilities of each generation as trustee and guardian of the
environment for succeeding generations." 17 The latter statute, on the other hand, gave flesh to
the said policy.
Thus, the right of the petitioners (and all those they represent) to a balanced and healthful
ecology is as clear as the DENR's duty under its mandate and by virtue of its powers and
functions under E.O. No. 192 and the Administrative Code of 1987 to protect and advance the
said right.
A denial or violation of that right by the other who has the corelative duty or obligation to respect
or protect the same gives rise to a cause of action. Petitioners maintain that the granting of the
TLAs, which they claim was done with grave abuse of discretion, violated their right to a
balanced and healthful ecology; hence, the full protection thereof requires that no further TLAs
should be renewed or granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the legal right or rights of
the other; and its essential elements are legal right of the plaintiff, correlative
obligation of the defendant, and act or omission of the defendant in violation
of said legal right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint
fails to state a cause of action, 19 the question submitted to the court for resolution involves the
sufficiency of the facts alleged in the complaint itself. No other matter should be considered;
furthermore, the truth of falsity of the said allegations is beside the point for the truth thereof is
deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such
alleged facts to be true, may the court render a valid judgment in accordance with the prayer in
the complaint? 20 In Militante vs. Edrosolano, 21 this Court laid down the rule that the judiciary
should "exercise the utmost care and circumspection in passing upon a motion to dismiss on the
ground of the absence thereof [cause of action] lest, by its failure to manifest a correct
appreciation of the facts alleged and deemed hypothetically admitted, what the law grants or
recognizes is effectively nullified. If that happens, there is a blot on the legal order. The law itself
stands in disrepute."
After careful examination of the petitioners' complaint, We find the statements under the
introductory affirmative allegations, as well as the specific averments under the sub-heading
CAUSE OF ACTION, to be adequate enough to show, prima facie, the claimed violation of their
rights. On the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It
bears stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the
need to implead, as party defendants, the grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy
formulation or determination by the executive or legislative branches of Government is not
squarely put in issue. What is principally involved is the enforcement of a right vis-a-vis policies
already formulated and expressed in legislation. It must, nonetheless, be emphasized that the
political question doctrine is no longer, the insurmountable obstacle to the exercise of judicial
power or the impenetrable shield that protects executive and legislative actions from judicial
inquiry or review. The second paragraph of section 1, Article VIII of the Constitution states that:
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and
enforceable, and 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 the Government.
Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz,
a distinguished member of this Court, says:
The first part of the authority represents the traditional concept of judicial
power, involving the settlement of conflicting rights as conferred as law. The
second part of the authority represents a broadening of judicial power to
enable the courts of justice to review what was before forbidden territory, to
wit, the discretion of the political departments of the government.
As worded, the new provision vests in the judiciary, and particularly the
Supreme Court, the power to rule upon even the wisdom of the decisions of
the executive and the legislature and to declare their acts invalid for lack or
excess of jurisdiction because tainted with grave abuse of discretion. The
catch, of course, is the meaning of "grave abuse of discretion," which is a
very elastic phrase that can expand or contract according to the disposition
of the judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:

In the case now before us, the jurisdictional objection becomes even less
tenable and decisive. The reason is that, even if we were to assume that the
issue presented before us was political in nature, we would still not be
precluded from revolving it under the expanded jurisdiction conferred upon
us that now covers, in proper cases, even the political question. Article VII,
Section 1, of the Constitution clearly provides: . . .
The last ground invoked by the trial court in dismissing the complaint is the non-impairment of
contracts clause found in the Constitution. The court a quo declared that:
The Court is likewise of the impression that it cannot, no matter how we
stretch our jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to
cancel all existing timber license agreements in the country and to cease
and desist from receiving, accepting, processing, renewing or approving
new timber license agreements. For to do otherwise would amount to
"impairment of contracts" abhored (sic) by the fundamental law. 24

. . . 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.

27

cannot be invoked.
We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a
sweeping pronouncement. 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 the petitioners, into every timber license must be read Section 20
of the Forestry Reform Code (P.D. No. 705) which provides:
. . . 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 . . .
Needless to say, all licenses may thus be revoked or rescinded by executive action. It
is not a contract, property or a property right protested by the due process clause of
the Constitution. In Tan vs. Director of Forestry, 25 this Court held:
. . . 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).
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive
Secretary: 26

In the second place, even if it is to be assumed that the same are contracts, the instant case
does not involve a law or even an executive issuance declaring the cancellation or modification
of existing timber licenses. Hence, the non-impairment clause cannot as yet be invoked.
Nevertheless, granting further that a law has actually been passed mandating cancellations or
modifications, the same cannot still be stigmatized as a violation of the non-impairment clause.
This is because by its very nature and purpose, such as law could have only been passed in the
exercise of the police power of the state for the purpose of advancing the right of the people to a
balanced and healthful ecology, promoting their health and enhancing the general welfare.
In Abe vs. Foster Wheeler
Corp. 28 this Court stated:
The freedom of contract, under our system of government, is not meant to
be absolute. The same is understood to be subject to reasonable legislative
regulation aimed at the promotion of public health, moral, safety and
welfare. In other words, the constitutional guaranty of non-impairment of
obligations of contract is limited by the exercise of the police power of the
State, in the interest of public health, safety, moral and general welfare.
The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine
American Life Insurance Co. vs. Auditor General, 30 to wit:
Under our form of government the use of property and the making of
contracts are normally matters of private and not of public concern. The
general rule is that both shall be free of governmental interference. But
neither property rights nor contract rights are absolute; for government
cannot exist if the citizen may at will use his property to the detriment of his
fellows, or exercise his freedom of contract to work them harm. Equally
fundamental with the private right is that of the public to regulate it in the
common interest.
In short, the non-impairment clause must yield to the police power of the state.

31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply
with respect to the prayer to enjoin the respondent Secretary from receiving, accepting,
processing, renewing or approving new timber licenses for, save in cases of renewal, no

contract would have as of yet existed in the other instances. Moreover, with respect to renewal,
the holder is not entitled to it as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the
challenged Order of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is
hereby set aside. The petitioners may therefore amend their complaint to implead as defendants
the holders or grantees of the questioned timber license agreements.
No pronouncement as to costs.
SO ORDERED.
Cruz, Padilla, Bidin, Grio-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ.,
concur.

EN BANC
[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 DIZON-CAPULONG, 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-4-092590-0469. 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,
the CRIMINAL 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.

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]

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

Its motion for reconsideration having been denied in the order of 18 October 1991, [23] the
People filed a petition for certiorari with this Court in 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 thatlumber 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 for certiorari 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.

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.

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.

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.

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.

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?

We shall now resolve these three cases starting with G.R. 106424 with which the other
two were consolidated.

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

G.R. No. 106424

(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-vis the 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 all lumber. 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 term timber.
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, blockboard, 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.

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.

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]

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.

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.

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

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.

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 CAG.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.

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 lumberdealer'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:

SO ORDERED.

SECOND DIVISION
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

[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,[1] 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. [2] 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.[3] 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[4] with the Regional Trial Court, Branch 2 of Cagayan, [5] which issued a writ
ordering the return of the truck to private respondents.[6] 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. [7] Their motion for
reconsideration having been likewise denied, a petition for certiorari 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.[8] Hence, this present petition,[9] 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,[10] the prayer for the issuance of temporary restraining
order of petitioners was granted by this Court.

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. [11] Accordingly, absent any finding of waiver
or estoppel the case is susceptible of dismissal for lack of cause of action. [12] 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, [13] (2) when the issue involved is purely
a legal question,[14] (3) when the administrative action is patently illegal amounting to lack or
excess of jurisdiction,[15] (4) when there is estoppel on the part of the administrative agency
concerned,[16] (5) when there is irreparable injury,[17] (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,[18] (7) when to require exhaustion of administrative remedies would be
unreasonable,[19] (8) when it would amount to a nullification of a claim, [20] (9) when the subject
matter is a private land in land case proceedings, [21] (10) when the rule does 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, [23] 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:
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]

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.

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.

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:

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.[25] In Felipe Ismael, Jr. and Co. vs. Deputy Executive Secretary, [26] which was
reiterated in the recent case of Concerned Officials of MWSS vs. Vasquez,[27] this Court held:

SECTION 68. xxx

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.[28] One may be heard , not solely by verbal presentation but also, and perhaps
many times more creditably and practicable than oral argument, through pleadings. [29] 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.[30] Indeed, deprivation of due process cannot be successfully invoked where a party was
given the chance to be heard on his motion for reconsideration, [31] 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,[32] we ruled that :
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

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 toolsillegaly [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 68-A , 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, theDepartment 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. [33] 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.
[34]
In this wise, the observation of the Solicitor General is significant, thus:
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 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, 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. [39] To detain is defined as to mean
to hold or keep in custody, [40] 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.
[41]
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. [42] Private respondents
miserably failed to convince this Court that a 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 and its Resolution dated July 14, 1992 are hereby SET ASIDE AND
REVERSED; the Restraining Order promulgated on September 27, 1993 is hereby made
permanent; and the Secretary of DENR is directed to resolve the controversy with utmost
dispatch.
SO ORDERED.

EN BANC

G.R. No. 2869

March 25, 1907

MATEO CARIO, petitioner-appellant,

vs.
THE INSULAR GOVERNMENT, respondent-appellee.
Coudert Brothers for appellant.
Office of the Solicitor-General Araneta for appellee.
ARELLANO, C.J.:
Mateo Cario, the appellant herein, on the 23d of February, 1904, filed his petition in the Court of
Land Registration praying that there be granted to him title to a parcel of land consisting of 40
hectares, 1 are, and 13 centares, and situated in the town of Baguio, Province of Benguet,
together with a house erected thereon and constructed of wood and roofed with rimo, and
bounded as follows: On the north, in lines running 1,048 metes and 20 decimeters with the lands
of Sepa Cario, H. Phelps Whitmarsh, and Calsi; on the east, in lines running 991 meters and
50 decimeters with the land of Kuidno, Esteban Gonzales, and of the Civil Government; on the
south, in lines of 115 meters and 60 decimeters, with the lands of Talaca; and on the west, in
lines running 982 meters and 20 decimeters, with the lands of Sisco Cario and Mayengmeng.
By order of the court the hearing of this petition, No. 561, and that of Antonio Rebollo and
Vicente Valpiedad filed under No. 834, were heard together for the reason that the latter petition
claimed a small portion of land included in the parcel set out in the former petition.
The Insular Government opposed the granting of these petitions, alleging that the whole parcel
of land is public property of the Government and that the same was never acquired in any
manner or through any title of egresionfrom the State.
After trial, and the hearing of documentary and oral proof, the court of Land Registration
rendered its judgment in these terms:
Therefore the court finds that Cario and his predecessors have not possessed
exclusively and adversely any part of the said property prior to the date on which
Cario constructed the house now there that is to say, for the years 1897 and 1898,
and Cario held possession for some years afterwards of but a part of the property to
which he claims title. Both petitions are dismissed and the property in question is
adjudged to be public land. (Bill of exceptions, p. 15.)
The conclusions arrived at the set forth in definite terms in the decision of the court below are
the following:
From the testimony given by Cario as well as from that of several of the witnesses for
the Government it is deduced, that in or about the year 1884 Cario erected and
utilized as a domicile a house on the property situated to the north of that property
now in question, property which, according to the plan attached toexpediente No. 561,
appears to be property belonging to Donaldson Sim; that during the year 1893 Cario
sold said house to one Cristobal Ramos, who in turn sold the same to Donaldson Sim,
moving to and living on the adjoining property, which appears on the plan aforesaid to
be the property of H. Phelps Whitmarsh, a place where the father and the grandfather
of his wife, that is to say, Ortega and Minse, had lived . . ..

In or about the years 1898 Cario abandoned the property of Whitmarsh and located
on the property described in the plan attached to expediente No. 561, having
constructed a house thereon in which he now lives, and which house is situated in the
center of the property, as is indicated on the plan; and since which time he has
undoubtedly occupied some portion of the property now claimed by him. (Bill of
exceptions, pp. 11 and 12.)
1. Therefore it is evident that this court can not decree the registration of all of the superficial
extension of the land described in the petition and as appears on the plan filed herein, such
extension containing 40 hectares, 1 are, and 13 centares, inasmuch as the documentary
evidence accompanying the petition is conclusive proof against the petitioners; this documentary
proof consists of a possessory information under date of March 7, 1901, and registered on the
11th day of the same month and year; and, according to such possessory information, the land
therein described contains an extension of only 28 hectares limited by "the country road to the
barrio of Pias," a road appearing on the plan now presented and cutting the land, as might be
said, in half, or running through its center from north to south, a considerable extension of land
remaining on the other side of the said road, the west side, and which could not have been
included in the possessory information mentioned.
2. As has been shown during the trial of this case, this land, of which mention is made in said
possessory information, and upon which is situated the house now actually occupied by the
petitioner, all of which is set forth as argument as to the possession in the judgment, is "used for
pasture and sowing," and belongs to the class called public lands.
3. Under the express provisions of law, a parcel of land, being of common origin, presumptively
belonged to the State during its sovereignty, and, in order to perfect the legitimate acquisition of
such land by private persons, it was necessary that the possession of the same pass from the
State. And there is no evidence or proof of title ofegresion of this land from the domain of the
Spanish Government, nor is there any possessory information equivalent to title
by composicion or under agreement. 4, The possessory information filed herein is not the title to
property authorized in substitution for that of adjustment by the royal decree of February 13,
1894, this being the last law or legal disposition of the former sovereignty applicable to the
present subject-matter of common lands: First, for the reason that the land referred to herein is
not covered nor does it come within any one of the three conditions required by article 19 of the
said royal decree, to wit, that the land has been in an uninterrupted state of cultivation during a
period of six years last past; or that the same has been possessed without interruption during a
period of twelve years and has been in a state of cultivation up to the date of the information and
during the three years immediately preceding such information; or that such land had been
possessed openly without interruption during a period of thirty or more years, notwithstanding
the land had not been cultivated; nor is it necessary to refer to the testimony given by the two
witnesses to the possessory information for the following reason: Second, because the
possessory information authorized by said royal decree or last legal disposition of the Spanish
Government, as title or for the purpose of acquiring actual proprietary right, equivalent to that of
adjustment with the Spanish Government and required and necessary at all times until the
publication of said royal decree was limited in time to one year, in accordance with article 21,
which is as follows: " A period of one year, not to be extended, is allowed to verify the
possessory informations which are referred to in articles 19 and 20. After the expiration of this
period of the right of the cultivators and persons in possession to obtain gratuitous title thereto
lapses and the land together with full possession reverts to the state, or, as the case may be, to
the community, and the said possessors and cultivators or their assigns would simply have rights
under universal or general title of average in the event that the land is sold within a period of five
years immediately following the cancellation. The possessors not included under this chapter
can only acquire by time the ownership and title to unappropriated or royal lands in accordance
with common law."

5. In accordance with the preceding provisions, the right that remained to Cario, if it be certain
that he was the true possessor of the land in question, was the right of average in case the
Government or State could have sold the same within the period of five years immediately
following for example, if the denouncement of purchase had been carried out by Felipe Zafra or
any other person, as appears from the record of the trial of the case. Aside from this right, in
such event, his possession as attested in the possessory information herein could not, in
accordance with common law, go to show any right of ownership until after the expiration of
twenty years from the expiration of twenty years from the verification and registry of the same in
conformity with the provisions of article 393 of the Mortgage Law and other conditions prescribe
by this law.
6. The right of possession in accordance with common law that is to say, civil law remains
at all times subordinate to the Spanish administrative law, inasmuch as it could only be of force
when pertaining to royaltransferable or alienable lands, which condition and the determination
thereof is reversed to the government, which classified and designated the royal alienable lands
for the purpose of distinguishing them from those lands strictly public, and from forestry lands
which could at no time pass to private ownership nor be acquired through time even after the
said royal decree of February 13, 1894.
7. The advent of the new sovereignty necessarily brought a new method of dealing with lands
and particularly as to the classification and manner of transfer and acquisition of royal or
common lands then appropriated, which were thenceforth merely called public lands, the
alienation of which was reserved to the Government, in accordance with section 12 and 13 of
the act of Congress of July 1, 1902,1 and in conformity with other laws enacted under this act of
Congress by the Philippine Commission prescribing rules for the execution thereof, one of which
is Act No. 648,2 herein mentioned by the petitioner, in connection with Act No. 627,3 which
appears to be the law upon which the petition herein is founded.
8. Section 6 of Act No. 627 admits prescription, in accordance with the provisions contained in
Act No. 190, as a basis for obtaining the right of ownership. "The petitioners claims title under
the period of prescription of ten years established by that act, as well as by reason of his
occupancy and use thereof from time immemorial." (Allegation 1.) But said act admits such
prescription for the purpose of obtaining title and ownership to lands "not exceeding more
that sixteen hectares in extent." (Sec. 6 of said act.) The land claimed by Cario is 40 hectares
in extent, if we take into consideration his petition, or an extension of 28 hectares, according to
the possessory information, the only thing that can be considered. Therefore, it follows that the
judgment denying the petition herein and now appealed from was strictly in accordance with the
law invoked herein.
9. And of the 28 hectares of land as set out in the possessory information, one part of same,
according to the testimony of Cario, belongs to Vicente Valpiedad, the extent of which is not
determined. From all of which it follows that the precise extent has not been determined in the
trial of this case on which judgment might be based in the event that the judgment and title be
declared in favor of the petitioner, Mateo Cario. And we should not lose sight of the fact that,
considering the intention of Congress in granting ownership and title to 16 hectares, that Mateo
Cario and his children have already exceeded such amount in various acquirements of lands,
all of which is shown in different cases decided by the said Court of Land Registration, donations
or gifts of land that could only have been made efficacious as to the conveyance thereof with the
assistance of these new laws.
By reason of the findings set forth it is clearly seen that the court below did not err:
1. In finding that Mateo Cario and those from whom he claims his right had not
possessed and claimed as owners the lands in question since time immemorial;

2. In finding that the land in question did not belong to the petitioner, but that, on the
contrary, it was the property of the Government. (Allegation 21.)
Wherefore, the judgment appealed from is affirmed with the costs of this instance against the
appellant. After the expiration of twenty days from the notification of this decision let judgment be
entered in accordance herewith, and ten days thereafter let the case be remanded to the court
from whence it came for proper action
. So ordered.

EN BANC
G.R. No. 2869

March 25, 1907

MATEO CARIO, petitioner-appellant,

vs.
THE INSULAR GOVERNMENT, respondent-appellee.
Coudert Brothers for appellant.
Office of the Solicitor-General Araneta for appellee.
ARELLANO, C.J.:
Mateo Cario, the appellant herein, on the 23d of February, 1904, filed his petition in the Court of
Land Registration praying that there be granted to him title to a parcel of land consisting of 40
hectares, 1 are, and 13 centares, and situated in the town of Baguio, Province of Benguet,
together with a house erected thereon and constructed of wood and roofed with rimo, and
bounded as follows: On the north, in lines running 1,048 metes and 20 decimeters with the lands
of Sepa Cario, H. Phelps Whitmarsh, and Calsi; on the east, in lines running 991 meters and
50 decimeters with the land of Kuidno, Esteban Gonzales, and of the Civil Government; on the
south, in lines of 115 meters and 60 decimeters, with the lands of Talaca; and on the west, in
lines running 982 meters and 20 decimeters, with the lands of Sisco Cario and Mayengmeng.
By order of the court the hearing of this petition, No. 561, and that of Antonio Rebollo and
Vicente Valpiedad filed under No. 834, were heard together for the reason that the latter petition
claimed a small portion of land included in the parcel set out in the former petition.
The Insular Government opposed the granting of these petitions, alleging that the whole parcel
of land is public property of the Government and that the same was never acquired in any
manner or through any title of egresionfrom the State.
After trial, and the hearing of documentary and oral proof, the court of Land Registration
rendered its judgment in these terms:
Therefore the court finds that Cario and his predecessors have not possessed
exclusively and adversely any part of the said property prior to the date on which
Cario constructed the house now there that is to say, for the years 1897 and 1898,
and Cario held possession for some years afterwards of but a part of the property to

which he claims title. Both petitions are dismissed and the property in question is
adjudged to be public land. (Bill of exceptions, p. 15.)
The conclusions arrived at the set forth in definite terms in the decision of the court below are
the following:
From the testimony given by Cario as well as from that of several of the witnesses for
the Government it is deduced, that in or about the year 1884 Cario erected and
utilized as a domicile a house on the property situated to the north of that property
now in question, property which, according to the plan attached toexpediente No. 561,
appears to be property belonging to Donaldson Sim; that during the year 1893 Cario
sold said house to one Cristobal Ramos, who in turn sold the same to Donaldson Sim,
moving to and living on the adjoining property, which appears on the plan aforesaid to
be the property of H. Phelps Whitmarsh, a place where the father and the grandfather
of his wife, that is to say, Ortega and Minse, had lived . . ..
In or about the years 1898 Cario abandoned the property of Whitmarsh and located
on the property described in the plan attached to expediente No. 561, having
constructed a house thereon in which he now lives, and which house is situated in the
center of the property, as is indicated on the plan; and since which time he has
undoubtedly occupied some portion of the property now claimed by him. (Bill of
exceptions, pp. 11 and 12.)
1. Therefore it is evident that this court can not decree the registration of all of the superficial
extension of the land described in the petition and as appears on the plan filed herein, such
extension containing 40 hectares, 1 are, and 13 centares, inasmuch as the documentary
evidence accompanying the petition is conclusive proof against the petitioners; this documentary
proof consists of a possessory information under date of March 7, 1901, and registered on the
11th day of the same month and year; and, according to such possessory information, the land
therein described contains an extension of only 28 hectares limited by "the country road to the
barrio of Pias," a road appearing on the plan now presented and cutting the land, as might be
said, in half, or running through its center from north to south, a considerable extension of land
remaining on the other side of the said road, the west side, and which could not have been
included in the possessory information mentioned.
2. As has been shown during the trial of this case, this land, of which mention is made in said
possessory information, and upon which is situated the house now actually occupied by the
petitioner, all of which is set forth as argument as to the possession in the judgment, is "used for
pasture and sowing," and belongs to the class called public lands.
3. Under the express provisions of law, a parcel of land, being of common origin, presumptively
belonged to the State during its sovereignty, and, in order to perfect the legitimate acquisition of
such land by private persons, it was necessary that the possession of the same pass from the
State. And there is no evidence or proof of title ofegresion of this land from the domain of the
Spanish Government, nor is there any possessory information equivalent to title
by composicion or under agreement. 4, The possessory information filed herein is not the title to
property authorized in substitution for that of adjustment by the royal decree of February 13,
1894, this being the last law or legal disposition of the former sovereignty applicable to the
present subject-matter of common lands: First, for the reason that the land referred to herein is
not covered nor does it come within any one of the three conditions required by article 19 of the
said royal decree, to wit, that the land has been in an uninterrupted state of cultivation during a
period of six years last past; or that the same has been possessed without interruption during a
period of twelve years and has been in a state of cultivation up to the date of the information and
during the three years immediately preceding such information; or that such land had been
possessed openly without interruption during a period of thirty or more years, notwithstanding

the land had not been cultivated; nor is it necessary to refer to the testimony given by the two
witnesses to the possessory information for the following reason: Second, because the
possessory information authorized by said royal decree or last legal disposition of the Spanish
Government, as title or for the purpose of acquiring actual proprietary right, equivalent to that of
adjustment with the Spanish Government and required and necessary at all times until the
publication of said royal decree was limited in time to one year, in accordance with article 21,
which is as follows: " A period of one year, not to be extended, is allowed to verify the
possessory informations which are referred to in articles 19 and 20. After the expiration of this
period of the right of the cultivators and persons in possession to obtain gratuitous title thereto
lapses and the land together with full possession reverts to the state, or, as the case may be, to
the community, and the said possessors and cultivators or their assigns would simply have rights
under universal or general title of average in the event that the land is sold within a period of five
years immediately following the cancellation. The possessors not included under this chapter
can only acquire by time the ownership and title to unappropriated or royal lands in accordance
with common law."
5. In accordance with the preceding provisions, the right that remained to Cario, if it be certain
that he was the true possessor of the land in question, was the right of average in case the
Government or State could have sold the same within the period of five years immediately
following for example, if the denouncement of purchase had been carried out by Felipe Zafra or
any other person, as appears from the record of the trial of the case. Aside from this right, in
such event, his possession as attested in the possessory information herein could not, in
accordance with common law, go to show any right of ownership until after the expiration of
twenty years from the expiration of twenty years from the verification and registry of the same in
conformity with the provisions of article 393 of the Mortgage Law and other conditions prescribe
by this law.
6. The right of possession in accordance with common law that is to say, civil law remains
at all times subordinate to the Spanish administrative law, inasmuch as it could only be of force
when pertaining to royaltransferable or alienable lands, which condition and the determination
thereof is reversed to the government, which classified and designated the royal alienable lands
for the purpose of distinguishing them from those lands strictly public, and from forestry lands
which could at no time pass to private ownership nor be acquired through time even after the
said royal decree of February 13, 1894.
7. The advent of the new sovereignty necessarily brought a new method of dealing with lands
and particularly as to the classification and manner of transfer and acquisition of royal or
common lands then appropriated, which were thenceforth merely called public lands, the
alienation of which was reserved to the Government, in accordance with section 12 and 13 of
the act of Congress of July 1, 1902,1 and in conformity with other laws enacted under this act of
Congress by the Philippine Commission prescribing rules for the execution thereof, one of which
is Act No. 648,2 herein mentioned by the petitioner, in connection with Act No. 627,3 which
appears to be the law upon which the petition herein is founded.
8. Section 6 of Act No. 627 admits prescription, in accordance with the provisions contained in
Act No. 190, as a basis for obtaining the right of ownership. "The petitioners claims title under
the period of prescription of ten years established by that act, as well as by reason of his
occupancy and use thereof from time immemorial." (Allegation 1.) But said act admits such
prescription for the purpose of obtaining title and ownership to lands "not exceeding more
that sixteen hectares in extent." (Sec. 6 of said act.) The land claimed by Cario is 40 hectares
in extent, if we take into consideration his petition, or an extension of 28 hectares, according to
the possessory information, the only thing that can be considered. Therefore, it follows that the
judgment denying the petition herein and now appealed from was strictly in accordance with the
law invoked herein.

9. And of the 28 hectares of land as set out in the possessory information, one part of same,
according to the testimony of Cario, belongs to Vicente Valpiedad, the extent of which is not
determined. From all of which it follows that the precise extent has not been determined in the
trial of this case on which judgment might be based in the event that the judgment and title be
declared in favor of the petitioner, Mateo Cario. And we should not lose sight of the fact that,
considering the intention of Congress in granting ownership and title to 16 hectares, that Mateo
Cario and his children have already exceeded such amount in various acquirements of lands,
all of which is shown in different cases decided by the said Court of Land Registration, donations
or gifts of land that could only have been made efficacious as to the conveyance thereof with the
assistance of these new laws.
By reason of the findings set forth it is clearly seen that the court below did not err:
1. In finding that Mateo Cario and those from whom he claims his right had not
possessed and claimed as owners the lands in question since time immemorial;
2. In finding that the land in question did not belong to the petitioner, but that, on the
contrary, it was the property of the Government. (Allegation 21.)
Wherefore, the judgment appealed from is affirmed with the costs of this instance against the
appellant. After the expiration of twenty days from the notification of this decision let judgment be
entered in accordance herewith, and ten days thereafter let the case be remanded to the court
from whence it came for proper action. So ordered.

FIRST DIVISION

G.R. No. L-37682 March 29, 1974

REPUBLIC OF THE PHILIPPINES, Represented by the DIRECTOR OF LANDS, petitioner,
vs.
HON. PEDRO SAMSON ANIMAS, in his capacity as Judge of CFI South Cotabato, Branch
I, General Santos City, ISAGANI DU TIMBOL and the REGISTER OF DEEDS OF GENERAL
SANTOS CITY,respondent.
Office of the Solicitor General Estelito P. Mendoza, Assistant Solicitor General Santiago M.
Kapunan and Solicitor Patricio M. Patajo for petitioner.
Quitain Law Office for private respondent.

ESGUERRA, J.:p
Petition to review the order of the Court of First Instance of South Cotabato, Branch I, General
Santos City, dated June 22, 1973, dismissing the complaint in its Civil Case No. 1253, entitled
"Republic of the Philippines, Plaintiff, vs. Isagani Du Timbol and the Register of Deeds of
General Santos City, Defendants", instituted by the plaintiff to declare null and void Free Patent

No. V-466102 and Original Certificate of Title (O.C.T.) No. P-2508 based thereon issued in the
name of defendant Isagani Du Timbol; to order the aforesaid defendant to surrender the owner's
duplicate of O.C.T. No. P-2508 and the defendant Register of Deeds to cancel the same; to
decree the reversion of the land in question to the mass of public domain, and granting such
further relief as may be just and equitable in the premises.
The land covered by the free patent and title in question was originally applied for by Precila
Soria, who on February 23, 1966, transferred her rights to the land and its improvements to
defendant Isagani Du Timbol who filed his application therefor on February 3, 1969, as a
transferee from Precila Soria.
On December 12, 1969, free Patent No. V-466102 was issued by the President of the
Philippines for the land in question, and on July 20, 1970, after transmittal of the patent to the
Register of Deeds of General Santos City, Original Certificate of Title (O.C.T.) No. P-2508 was
issued in the name of defendant Isagani Du Timbol.
On August 5, 1971, the Republic of the Philippines, at the instance of the Bureau of Forestry,
filed a complaint in the Court of First Instance of Cotabato, Branch I, General Santos City (Civil
Case No. 1253), to declare free patent No. V-466102 and Original Certificate of Title No. P-2508
in the name of defendant Isagani Du Timbol null and void ab initio and to order the reversion of
the land in question to the mass of public domain. The action is based on the ground that the
land covered thereby is a forest or timber land which is not disposable under the Public Land
Act; that in a reclassification of the public lands in the vicinity where the land in question is
situated made by the Bureau of Forestry on March 7, 1958, the said land was plotted on Bureau
of Forestry map L.C. 700 to be inside the area which was reverted to the category of public
forest, whereas the application for free patent by Isagani Du Timbol was filed on June 3, 1969,
or more than eleven years thereafter; that the said patent and title were obtained fraudulently as
private respondent Isagani Du Timbol never occupied and cultivated the land applied for.
Invoking the case of Ramirez vs. Court of Appeals (G.R. No. L-28591, 30 SCRA 207-301),
holding that a certificate of title fraudulently secured is not null and void ab initio, unless the
fraud consisted in misrepresenting that the land covered by the application is part of the public
domain when it is not, the respondent court dismissed the complaint on the ground that
Certificate of Title based on the patent had became indefeasible in view of the lapse of the oneyear period prescribed under Section 38 of the Land Registration Act for review of a decree of
title on the ground of fraud. From this order of June 22, 1973, dismissing the complaint, plaintiff
Republic of the Philippines has appealed to this Court for review.
After careful deliberation, this Court grants the petition on the ground that the area covered by
the patent and title is not disposable public land, it being a part of the forest zone and, hence the
patent and title thereto are null and void.
The defense of indefeasibility of a certificate of title issued pursuant to a free patent does not lie
against the state in an action for reversion of the land covered thereby when such land is a part
of a public forest or of a forest reservation. As a general rule, timber or forest lands are not
alienable or disposable under either the Constitution of 1935 or the Constitution of 1973.
Although the Director of Lands has jurisdiction over public lands classified as agricultural under
the constitution, or alienable or disposable under the Public Land Act, and is charged with the
administration of all laws relative thereto, mineral and timber lands are beyond his jurisdiction. It
is the Bureau of Forestry that has jurisdiction and authority over the demarcation, protection,
management, reproduction, occupancy and use of all public forests and forest reservations and
over the granting of licenses for the taking of products therefrom, including stone and earth
(Section 1816 of the Revised Administrative Code). That the area in question is a forest or
timber land is clearly established by the certification made by the Bureau of Forest Development
that it is within the portion of the area which was reverted to the category of forest land,

approved by the President on March 7, 1958. When the defendant Isagani Du Timbol filed his
application for free patent over the land in question on June 3, 1969, the area in question was
not a disposable or alienable public land but a public forest. Titles issued to private parties by the
Bureau of Lands when the land covered thereby is not disposable public land but forest land are
void ab initio. In Gatchalian vs. Pavilen, et al., L-17619, Oct. 31, 1962, 6 SCRA p. 508, 512, this
Court said:
And if it be true that the Bureau of Lands had no jurisdiction to issue a
patent because the land involved was still inalienable forest land when
granted, then it may be plausibly contended that the patent title would be ab
initio void, subject to attack at any time by any party adversely affected.
(Gatchalian vs. Pavilen, et al., L-17619, Oct. 31, 1962, supra, citing Civil
Code Arts. 1409 and 1421; Vao vs. Insular Gov't., 41 Phil. 161; Aderable
vs. Director of Forestry, L-13663, March 25, 1960).
A patent is void at law if the officer who issued the patent had no authority to do so (Knight vs.
Land Ass., 142 U.S. 161, 12 Sup. Ct., 258, 35L ED. 974; emphasis supplied). If a person obtains
a title under the Public Land Act which includes, by mistake or oversight, lands which cannot be
registered under the Torrens System, or when the Director of Lands did not have jurisdiction
over the same because it is a public forest, the grantee does not, by virtue of said certificate of
title alone, become the owner of the land illegally included. (See Ledesma vs. Municipality of
Iloilo, 49 Phil. 769)
The case of Ramirez vs. Court of Appeals, G. R. No. L-28591, Oct. 31, 1969, 30 SCRA 297,
relied upon by respondent Court in dismissing this case, is not controlling. In that case no forest
land was involved but agricultural public land which was first covered by a patent issued to one
party and later registered under the Torrens System by the other party. The litigation was
between private parties where the party who registered it under Act No. 496 sought the nullity of
the title of the patentee under the Public Land Act. In the case at bar the party seeking the nullity
of the title and reversion of the land is the state itself which is specifically authorized under
Section 101 of the Public Land Act to initiate such proceedings as an attribute of sovereignty, a
remedy not available to a private individual.
The complaint alleges in its paragraph 8 that applicant Isagani Du Timbol was never in
possession of the property prior to his filing the application, contrary to the provisions of law that
the applicant must have been in possession or cultivation thereof for at least 30 years; that the
applicant, after diligent search by the Acting Chief of the Survey-Party, Francisco R. Alcones, in
South Cotabato, could not be contacted because he is a resident of Davao City; that there are
no existing signs of improvements found in the area in question as it is not under cultivation but
covered with grasses, bushes and small trees; that it is being used as ranch for grazing cows by
the heirs of Hermogenes Chilsot; that no monuments were placed on the area surveyed which
goes to show that there was no actual survey thereof; that the property in question is inside the
ranch of the heirs of Hermogenes Chilsot under Pasture Lease Agreement No. 1244 and,
therefore, inside the forest zone; and that said ranch has a fence around it to show that other
persons could not enter and cultivate the same, and that the signature of then Acting District
Land Officer Elias de Castro of South Cotabato has been forged to facilitate the issuance of
patent in favor of Isagani Du Timbol.
The above alleged circumstances are indicative of fraud in the filing of the application and
obtaining title to the land, and if proven would override respondent Judge's order dismissing the
case without hearing. The misrepresentations of the applicant that he had been occupying and
cultivating the land and residing thereon are sufficient grounds to nullify the grant of the patent
and title under Section 91 of the Public Land Law which provides as follows:

That statements made in the application shall be considered as essential

conditions or parts of any concession, title or permit issued on the basis of
such application, and any false statement thereon or omission of facts,
changing, or modifying the consideration of the facts set forth in such
statement, and any subsequent modification, alteration, or change of the
material facts set forth in the application shall ipso facto produce the
cancellation of the concession, title or permit granted. ...
A certificate of title that is void may be ordered cancelled. A title will be considered void if it is
procured through fraud, as when a person applies for registration of the land under his name
although the property belongs to another. In the case of disposable public lands, failure on the
part of the grantee to comply with the conditions imposed by law is a ground for holding such
title void (Director of Lands vs. Court of Appeals, et al., G.R. No. L-17696, May 19, 1966, 17
SCRA, 71, 79-80; emphasis supplied). The lapse of the one year period within which a decree of
title may be reopened for fraud would not prevent the cancellation thereof, for to hold that a title
may become indefeasible by registration, even if such title had been secured through fraud or in
violation of the law, would be the height of absurdity. Registration should not be a shield of fraud
in securing title. (J. M. Tuason & Co., Inc. vs. Macalindog, L-15398, December 29, 1962, 6
SCRA 938, page 38).
Considering that it is the state is seeking the cancellation of the title of respondent Isagani Du
Timbol, said title has not become indefeasible for prescription cannot be invoked against the
state. A title founded on fraud may be cancelled, notwithstanding the lapse of one year from the
issuance thereof, through a petition filed in court by the Solicitor General, (Sumail vs. Court of
First Instance of Cotabato, 51 O.G. p. 2414 Phil. L-8278. 96 Phil. 946: Eugenio, et al., vs.
Perdido, et al., G. R. No. L-7083, May 19, 1955; De los Santos vs. Roman Catholic Church of
Midsayap G.R. No. L-6088, Feb. 24, 1954, 94 Phil. 405).
Public land fraudulently included in patents or certificates of title may be recovered or reverted to
the state in accordance with Section 101 of the Public Land Act (Director of Lands vs. Jugado et
al., G.R. No. L-14707, May 23, 1961). Prescription does not lie against the state in such cases
for the Statute of Limitations does not run against the state (Article 1108, paragraph 4 of the New
Civil Code). The right of reversion or reconveyance to the state is not barred prescription
(Republic of the Philippines vs. Ramona Ruiz, et al., G.R. No. L-23712, April 29, 1968, 23 SCRA
348. People vs. Ramos, G.R. No. L-15484, Jan. 31, 1963, 47 SCRA 12; Government of the
Philippines vs. Monte de Piedad 35 Phil. 728; 751-753).
Even granting that the title of private respondent Isagani Du Timbol can no longer be reopened
under the Land Registration Act, the land covered thereby may be reconveyed to the state in an
action for reconveyance under Section 101 of Commonwealth Act 141 (Public Land Act), for the
remedy of reconveyance is adequately covered by the prayer of the complaint for the grant of
such other relief as may be just and equitable in the premises.
FOR ALL THE FOREGOING, the order of the respondent court, dated June 22, 1973,
dismissing the complaint, and that of September 29, 1973, denying the motion for its
reconsideration, both issued in Civil Case No. 1253 of the respondent court, are hereby annulled
and set aside. The respondent court shall proceed to hear said Civil Case and render judgment
thereon accordingly.
Costs against respondent Isagani Du Timbol.
Makalintal, C.J., Castro, Makasiar, Muoz Palma, JJ., concur.

FIRST DIVISION
G.R. Nos. L-31666, L-31667 and L-31668 April 30, 1979
LEPANTO CONSOLIDATED MINING COMPANY, petitioner,
vs.
MANUEL DUMYUNG, THE REGISTER OF DEEDS OF BAGUIO CITY, and the COURT OF
FIRST INSTANCE OF BAGUIO CITY (BRANCH I), respondents.
LEPANTO CONSOLIDATED MINING COMPANY, petitioner,
vs.
FORTUNATO DUMYUNG, THE REGISTER OF DEEDS OF BAGUIO CITY , and the COURT
OF FIRST INSTANCE OF BAGUIO CITY (BRANCH I), respondents.
LEPANTO CONSOLIDATED MINING COMPANY, petitioner,
vs.
DUMYUNG BONAYAN, THE REGISTER OF DEEDS OF BAGUIO CITY, and the COURT OF
FIRST INSTANCE OF BAGUIO CITY (BRANCH I), respondents.
Sycip, Salazar, Luna, Manalo & Feliciano, Jesus B. Santos and Hill & Associates for petitioner.
Floro B. Bugnosen for private respondents.

FERNANDEZ, J.:
This is a petition to review the order of the Court of First Instance of Baguio City, Branch I,
dismissing the three complaints for annulment of titles in Civil Cases Nos. 1068, 1069 and 1070
entitled "Republic of the Philippines, Plaintiff, versus, Manuel Dumyung, et al., Defendants,
Lepanto Consolidated Mining Company, Intervenor" for being without merit. 1
The Republic of the Philippines, represented by the Director of Lands, commenced in the Court
of First Instance of Baguio City Civil Cases Nos. 1068, 1069 and 1070 for annulment of Free
Patents Nos. V-152242, V-155050 and V-152243, and of the corresponding Original Certificates
of Title Nos. P-208, P-210 and P-209, on the ground of misrepresentation and false data and
informations furnished by the defendants, Manuel Dumyung, Fortunate Dumyung and Dumyung
Bonayan, respectively. the land embraced in the patents and titles are Identified as Lots 1, 2 and
3 of survey plan Psu-181763 containing a total area of 58.4169 hectares, more or less, and
situated in the Municipal District of Mankayan, Sub-province of Benguet, Mountain Province. The
Register of Deeds of Baguio City was made a formal party defendant.
The complaints in Civil Cases Nos. 1068, 1069 and 1070 are all dated September 22, 196 l.
The defendants filed their respective answers. 3
The Lepanto Consolidated Mining Company, petitioner herein, filed motions for intervention
dated February 5, 1962 in the three (3) civil cases 4 which were granted. 5

The complaints in intervention alleged that a portion of the titled lands in question-.ion is within
the intervenor's ordinary timber license No. 140-'62 dated July 7, 1961 expiring and up for
renewal on June 30, 1962 and another portion of said lands is embraced in its mineral claims. 6
The defendants in the three (3) civil cases filed an amended joint answer with counterclaim to
the complaint in intervention. 7 The said amended joint answer was admitted in an order dated
September 10, 1972. 8
Before the hearing on the merits of the three (3) civil cases, the plaintiff, Republic of the
Philippines represented by the Director of Lands, filed in the Court of First Instance of Baguio
City three (3) criminal cases for falsification of public document. 9, docketed as Criminal Cases
Nos. 2358, 2359 and 2360, against the defendants Manuel Dumyung, Fortunato Dumyung and
Dumyung Bonayan, private respondents herein, for allegedly making untrue statements in their
applications for free patents over the lands in question. The proceedings on the three (3) civil
cases were suspended pending the outcome of the criminal cases.
After the presentation of evidence by the prosecution in the three (3) criminal cases, the defense
filed a motion to dismiss the same on the ground that the accused had complied with all the
legal requirements in the acquisition of their patents which were duly issued by the Director of
Lands and that they are not guilty of the alleged falsification of public documents.
In an order dated December 6, 1967, the trial court sustained the theory of the defense and
dismissed the three (3) criminal cases, with costs de officio, for insufficiency of evidence to
sustain the conviction of the three (3) accused. 9
Thereupon, the defendants filed a motion to dismiss dated October 12, 1968 in Civil Cases Nos.
1068, 1069 and 1070 on the following grounds: (1) extinction of the penal action carries with it
the extinction of the civil action when the extinction proceeds from a declaration that the fact
from which the civil might arise did not exist; (2) the decision of the trial court acquitting the
defendants of the crime charged renders these civil cases moot and academic, (3) the trial court
has no jurisdiction to order cancellation of the patents issued by the Director of Lands; (4) the
certificates of title in question can no longer be assailed; and (5) the intervenor Lepanto has no
legal interest in the subject matter in litigation. 10
The Court of First Instance of Baguio, Branch I, dismissed the three (3) civil cases because:
After a careful examination and deliberation of the MOTION TO DISMISS,
these civil cases filed by the defendants as well as the two OPPOSITIONS
TO MOTION TO DISMISS filed by both plaintiff and intervenor Lepanto
Consolidated Mining Company and the of all the three civil cases, it clearly
shows that upon the issuance of said Free Patents on November 26, 1960,
the same were duly registered with the office of the Register of Deeds of
Baguio and Benguet, pursuant to the provisions of Sec. 122 of Act 496, as
amended, and consequently, these properties became the private properties
of the defendants, under the operation of Sec. 38 of said Act; hence, these
titles enjoy the same privileges and safeguards as Torrens titles (Director of
Lands vs. Heirs of Ciriaco Carle, G. R. No. L-12485, July 31, 1964). It is
therefore clear that OCT Nos. P-208, P-209 and P-210 belonging to the
defendants are now indefeasible and this Court has no power to disturb
such indefeasibility of said titles, let alone cancel the same.
The records of this case further disclose that the defendants are ignorant
natives of Benguet Province and are members of the so-called Cultural
Minorities of Mountain Province, who are the same persons accused in the

dismissed criminal cases, based on the same grounds. It should be noted

that these cases fall squarely under Sec. 3 of Rule III of the New Rules of
Court. 11
They plaintiff, Republic of the Philippines represented by the Director of Lands, and the
intervenor, Lepanto Consolidated Mining Company,, filed separate motions for reconsideration of
the order dismissing Civil Cases Nos. 1068, 1069 and 1070. 12 Both motion for reconsideration
were denied by the trial court. 13 Thereupon the intervenor, Lepanto Consolidated Mining
Company, filed the instant petition.
The petitioner assigns the following errors:
I
THE LOWER COURT ERRED IN HOLDING THAT THE ORIGINAL
CERTIFICATE OF TITLE OF PRIVATE RESPONDENTS WERE
'INDEFEASIBLE' SIMPLY BECAUSE THEY WERE ISSUED PURSUANT
TO THE REGISTRATION OF THE FREE PATENTS OF THE PRIVATE
RESPONDENTS.
II
THE LOWER COURT ERRED IN HOLDING THAT THE PRIVATE
RESPONDENTS ARE ENTITLED TO THE BENEFITS OF REPUBLIC ACT
NO. 3872.
III
THE LOWER COURT ERRED IN HOLDING THAT THE ACQUITTAL OF
THE PRIVATE RESPONDENTS IN THE CRIMINAL CASES FOR
FALSIFICATION OF PUBLIC DOCUMENTS BARRED THE CIVIL ACTIONS
FOR ANNULMENT OF THE FREE PATENTS AND CANCELLATION OF
THE ORIGINAL CERTIFICATES OF TITLE OF THE PRIVATE
RESPONDENTS. 14
Timber and mineral lands are not alienable or disposable. The pertinent provisions of the Public
Land Act, Commonwealth Act No. 141, provide:
Sec. 2. The provisions of this Act shall apply to the lands of the public
domain; but timber and mineral lands shag be governed by special laws and
nothing in this Act provided shall be understood or construed to change or
modify the administration and disposition of the lands commonly called 'friar
lands' and those which being privately owned, have reverted to or become
the property of the Commonwealth of the Philippines, which administration
and disposition shall be governed by the laws at present in force or which
may hereafter be enacted.
Sec. 6. The President, upon the recommendation of the Secretary of
Agriculture and Commerce, shall from time to time classify the lands of the
public domain into
(a) Alienable or disposable,

(b) Timber, and

Minorities who have settled in the forest zones for the

last ten years have been harassed and jailed or
threatened with harassment and imprisonment.

(c) Mineral lands,

and may at any time and in a like manner transfer such lands from one
class to another, for the purposes of their administration and disposition.
The principal factual issue raised by the plaintiff, Republic of the Philippines represented by the
Director of Lands, and the intervenor, petitioner herein, is that the lands covered by the patents
and certificates of title are timber lands and mineral lands and, therefore, not alienable. Without
receiving evidence, the trial court dismissed the three (3) cases on the ground that upon the
issuance of the free patents on November 26, 1960, said patents were duly registered in the
Office of the Registry of Deeds of Baguio pursuant to Section 122 of Act 496, as amended, and
said properties became the private properties of the defendants under the operation of Section
38 of the Land Registration Act. The trial court concluded that these titles enjoy the same
privileges and safeguards as the torrens title, and Original Certificates of Title Nos. P-208, P-209
and P-210 of the defendants are now indefeasible.

The thesis behind the additional paragraph to Section

44 of the Public Land Act is to give the national culture,
minorities a fair chance to acquire lands of the public
domain' ...
It is for this reason that is, to give these national cultural minorities who
were driven from their ancestral abodes, a fair chance to acquire lands of
the public domain that Republic Act 3872 was passed. This is the new
government policy on liberation of the free patent provisions of the Public
Land Act emphasizing more consideration to and sympathy on the members
of the national cultural minorities, which our courts of justice must uphold. 15
The trial court assumed without any factual basis that the private respondents are entitled to the
benefits of Republic Act 3872. The pertinent provision of Republic Act No, 3872 reads:

In its order denying the motion for reconsideration the trial court said,
On the ground of lack of jurisdiction on the part of the Director of Lands to
dispose of the properties since they are within the forest zone, the court
finds Republic Act No. 3872, to clear this point. Section 1, amending Section
44 of the Land Act in its second paragraph states:
A member of the national cultural, minorities who has
continuously occupied and cultivated, either by himself
or through his predecessors-in- interest, a tract or tracts
of land, whether disposable or not since July 4, 1955,
shall be entitled to the right granted in the preceding
paragraph of this section: PROVIDED, that at the time
he files his free patent application, he is not the owner
of any real property secured or disposable under this
provision of the Public Land Law.
The 'preceding paragraph' refers to the right of a person to have a free
patent issued to him, provided he is qualified, which in this case the Director
of Lands has the jurisdiction to dispose, whether the land be disposable or
not. This provision of law, certainly, applies to herein defendants. The
reason for this law is explicit and could very well be seen from its
EXPLANATORY NOTE, which reads:
'Because of the aggresiveness of our more enterprising
Christian brothers in Mindanao, Mountain Province, and
other places inhabited by members of the National
Cultural Minorities, there has be-en an exodus of the
poor and less fortunate non-christians from their
ancestral homes during the t ten years to the
fastnesses of the wilderness where they have settled in
peace on portions of agricultural lands, unfortunately, in
most cases, within the forest zones. But this is not the
end of the tragedy of the national cultural minorities.
Because of the grant of pasture leases or permits to the
more agressive Christians, these National Cultural

SECTION 1. A new paragraph is hereby added 1--o Section 44 of

Commonwealth Act Numbered One Hundred-d forty-one, to read as follows:
SEC. 44. Any natural-born citizen of the Philippines who is not the owner of
more than twenty-four hectares and who since July fourth, ninth hundred
and twenty-six or prior thereto, has continuously occupied and cultivated,
either by, himself' or through his predecessors-in-interest. a tract or tracts of
agricultural public lands subject to disposition- or who shall have paid the
real estate tax thereon while the same has, not been occupied by any
person shall be entitled, under the provision of this chapter, to have a free
patent issued to him for such tract or tracts of such land not to exceed
twenty-four hectares.
A member of the national cultural minorities who has continuously occupied
and cultivated, either by himself or through his predecessors-in- interest, a
tract or tracts of land, whether disposable or not since July 4, 1955, shall be
entitled to the right granted in the preceding paragraph of this section:
Provided, That at the time he files his free patent application he is not the
owner of any real property secured or disposable under this provision of the
Public Land Law.
There is no evidence that the private respondents are members of the National Cultural
Minorities; that they have continously occupied and cultivated either by themselves or through
their predecessors-in-interest the lands in question since July 4, 1955; and that they are not the
owner of any land secured or disposable under the Public Land Act at the time they filed the free
patent applications. These qualifications must be established by evidence. Precisely, the
intervenor, petitioner herein, claims that it was in possession of the lands in question when the
private respondents applied for free patents thereon.
It was premature for the trial court to rule on whether or not the titles based on the patents
awarded to the private respondents have become indefeasible. It is well settled that a certificate
of title is void when it covers property of public domain classified as forest or timber and mineral
lands. Any title issued on non-disposable lots even in the hands of alleged innocent purchaser
for value, shall be cancelled. 16 In Director of lands vs. Abanzado 17 this Court said:

4. To complete the picture, reference may be made to the learned and

scholarly opinion of Justice Sanchez in Director of Forestry v. Muoz, a
1968 decision. After a review of Spanish legislation, he summarized the
present state of the law thus: 'If a Spanish title covering forest land is found
to be invalid, that land is public forest land, is part of the public domain, and
cannot be appropriated. Before private interests have intervened, the
government may decide for i what Portions of the public domain shall be set
aside and reserved as forest land. Possession of forest lands, however
long, cannot ripen into private ownership.' Nor is this all He reiterated the
basic state objective on the matter in clear and penetrating language: 'The
view this Court takes of the cages at bar is but in adherence to public policy
that should be followed with respect to forest lands. many have written
much, and many more have spoken, and quite often, above the pressing
need for forest preservation, conservation. protection, development and
reforestation. Not without justification For, forests constitute a vital segment
of any country's natural resources. It is of common knowledge by now that
absence of the necessary green cover on our lands produces a number Of
adverse or ill effects of serious proportions. Without the trees, watersheds
dry up; rivers and lakes which they supply are emptied of their contents. The
fish disappears. Denuded areas become dust bowls. As waterfalls cease to
function, so will hydroelectric plants. With the rains, the fertile topsoil is
washed away; geological erosion results. With erosion come the dreaded
floods that wreak havoc and destruction to property crops, livestock,
houses and highways not to mention precious human lives, ...'
The acquittal of the private respondents in the criminal cases for falsification is not a bar to the
civil cases to cancel their titles. The only issue in the criminal cases for falsification was whether
there was evidence beyond reasonable doubt that the private respondents had committed the
acts of falsification alleged in the informations. The factual issues of whether or not the lands in
question are timber or mineral lands and whether or not the private respondents are entitled to
the benefits of Republic Act No. 3872 were not in issue in the criminal case.
There is need to remand these cases to the trial court for the reception of evidence on (1)
whether or not the lands in question are timber and mineral lands; and (2) whether the private
respondents belong to the cultural minorities and are qualified under Republic Act 3872 to be
issued free patents on said lands.
WHEREFORE, the order dismissing Civil Cases Nos. 1968, 1969 and 1970 of the Court of First
Instance of Baguio City is hereby set aside and said cases are remanded to the trial court for
further proceedings, without pronouncement as to costs.
SO ORDERED.

ENGRACIA VINZONS-MAGANA, petitioner,

vs.
HONORABLE CONRADO ESTRELLA IN HIS CAPACITY AS MINISTER OF AGRARIAN
REFORM, SALVADOR PEJO, AS REGIONAL DIRECTOR, MINISTRY OF AGRARIAN
REFORM, and JUANA S. VDA. DE PAITAN, respondents.
Jose L. Lapak for petitioner.

PARAS, J:p
Petitioner challenges in this petition for prohibition with prayer for restraining order the validity
and constitutionality of Letter of Instructions No. 474 and Memorandum Circular No. 11, Series
of 1978 enforced by the then Minister and the Regional Director of the Ministry of Agrarian
Reform and likewise seeks the cancellation of Certificate of Land Transfer No. 0046145 issued
to Domingo Paitan by the deposed President Ferdinand Marcos pursuant to Presidential Decree
No. 27.
The records show that petitioner Magana is the owner of a parcel of riceland situated in the
barrio of Talisay, Camarines Norte. The said riceland was tenanted by the late Domingo Paitan,
husband of private respondent herein, Juana Vda. de Paitan, under an agricultural leasehold
agreement. On October 20, 1977, Magana filed a petition for the termination of the leasehold
agreement allegedly due to (1) non-payment of rentals; (2) inability and failure of Domingo
Paitan to do the tilling and cultivation of the riceland due to his long illness; and (3) subleasing of
the landholding to third parties (Rollo, p. 2). On June 2, 1978, the former Presiding Judge of the
Court of Agrarian Relations, Judge Juan Llaguno, referred the case to the Secretary of the
Department of Agrarian Reform for certification as to whether or not it was proper for trial in
accordance with Presidential Decree No. 316, (Ibid., pp. 10-11), but said office failed to act upon
the request for certification, for a period of more than three (3) years. Instead on July 10, 1980,
the riceland was placed under the Land Transfer Program by virtue of Memorandum Circular No.
11, Series of 1978, which implemented Letter of Instructions No. 474, which placed all tenanted
ricelands with areas of seven hectares or less belonging to landowners who own agricultural
lands of more than seven hectares in aggregate areas under the Land Transfer Program of the
government. The prescribed procedures therein were subsequently undertaken and thereafter,
on July 10, 1980, a certificate of Land Transfer was finally awarded in favor of Domingo Paitan.
As a consequence thereof, the rentals were no longer paid to Magana but were deposited
instead with the Land Bank and credited as amortization payments for the riceland. Apparently
aggrieved by this turn of events, Magana took the present recourse.
As earlier mentioned, the Court is now asked to resolve the constitutionality of Memorandum
Circular No. 11, Series of 1978, and Letter of Instructions No. 474.

Teehankee (Chairman), Makasiar, Guerrero, De Castro and Melencio-Herrera, JJ., concur.

The petition is devoid of merit.

EN BANC
G.R. No. L-60269 September 13, 1991

The constitutionality of P.D. No. 27 from which Letter of Instructions No. 474 and Memorandum
Circular No. 11, Series of 1978 are derived, is now well settled (Chavez v. Zobel, 55 SCRA 26
[1974]; Gonzales v. Estrella, 91 SCRA 292 [1979]; Zurbano v. Estrella, 137 SCRA 334, 335
[1985]; Ass. of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175
SCRA 366 [1989]).
More specifically, this Court also upheld the validity and constitutionality of Letter of Instructions
No. 474 which directed then Secretary of Agrarian Reform Conrado Estrella to "undertake to
place under the Land Transfer Program of the government pursuant to Presidential Decree No.

27, all tenanted rice/ corn lands with areas of seven hectares or less belonging to landowners
who own other agricultural lands of more than seven hectares in aggregate areas or lands used
for residential, commercial, industrial or other urban purposes from which they derive adequate
income to support themselves and their families". It was held that LOI 474 is neither a class
legislation nor does it deprive a person of property without due process of law or just
compensation (Zurbano v. Estrella, 137 SCRA 333 [1985]). Moreover, LOI 474 was duly
published in the Official Gazette dated November 29, 1976 and has therefore complied with the
publication requirement as held by this Court in Tanada v. Tuvera(146 SCRA 446 [1986]); Assn.
of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform (175 SCRA 369
[1989]).

proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But
more importantly, such determination of just compensation by the DAR, as earlier stated is by no
means final and conclusive upon the landowner or any other interested party for Section 16 (f)
clearly provides: "Any party who disagrees with the decision may bring the matter to the court of
proper jurisdiction for final determination of just compensation." For obvious reasons, the
determination made by the DAR is only preliminary unless accepted by all parties concerned.
Otherwise, the courts of justice will still have the right to review with finality the said
determination in the exercise of what is admittedly a judicial function (Association of Small
Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, supra, pp. 380-382).

As to the constitutionality of DAR Memo Circular No. 11, it is evident that DAR Memo Circular
No. 11 merely implements LOI 474 whose constitutionality has already been established,
clarifying for DAR personnel the guidelines set for under said LOI 474 (Rollo, p. 111). Moreover,
it is an elementary rule in administrative law that administrative regulations and policies enacted
by administrative bodies to interpret the law which they are entrusted to enforce, have the force
of law and are entitled to great respect (Rizal Empire Ins. Group and/or Corpus, Sergio v. NLRC,
et al., G.R. No. 73140, May 29, 1987).

Indeed, the delay in the preparation of the proper certification by the MAR field office to the
Court of Agrarian Relations as to whether or not the case was proper for trial, is unfortunate and
the officer concerned is under investigation (Rollo, pp. 4142). It will, however, be observed that
from the outset under P.D. No. 27, the tenant-farmer as of October 21, 1972 has already been
deemed in a certain sense, to be the owner of a portion of land, subject of course, to certain
conditions (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform, supra p. 390). In fact, it appears that petitioner Magana was not unaware that the land
in question previous to the filing of the CAR case on October 20, 1977, had already been
identified as subject of land transfer. It also appears that on September 20, 1976 Paitan had
already been identified to be cultivating the land to rice as tenant of petitioner and that his
landholding was the subject of land tenure survey and was found to be proper for OLT coverage
under Presidential Decree No. 27 (Rollo, pp. 41-42).

The main thrust of this petition is that the issuance of Certificate of Land Transfer to Domingo
Paitan without first expropriating said property to pay petitioner landowner the full market value
thereof before ceding and transferring the land to Paitan and/or heirs, is invalid and
unconstitutional as it is confiscatory and violates the due process clause of the Constitution
(Rollo, p. 4).
The issue of the constitutionality of the taking of private property under the CARP Law has
already been settled by this Court holding that where the measures under challenge merely
prescribe the retention limits for landowners, there is an exercise of police power by the
government, but where to carry out such regulation, it becomes necessary to deprive such
owners of whatever lands they may own in excess of the maximum area allowed, then there is
definitely a taking under the power of eminent domain for which payment of just compensation is
imperative. To be sure, the determination of just compensation is a function addressed to the
courts of justice and may not be usurped by any branch or official of the government
(Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, 175
SCRA 373 [1989]).

In any event, as already discussed, the proceedings herein are merely preliminary and petitioner
Magana is not without protection. Should she fail to agree on the price of her land as fixed by the
DAR, she can bring the matter to the court of proper jurisdiction. Likewise, failure on the part of
the farmer/grantee to pay his lease rentals or amortization payments for a period of two (2)
years is a ground for forfeiture of his certificate of land transfer.
PREMISES CONSIDERED, the petition is DISMISSED without prejudice to petitioner's filing of
the proper action for the determination of just compensation in the proper forum.
SO ORDERED.

It must be stressed, however, that the mere issuance of the certificate of land transfer does not
vest in the farmer/grantee ownership of the land described therein. At most, the certificate
merely evidences the government's recognition of the grantee as the party qualified to avail of
the statutory mechanisms for the acquisition of ownership of the land titled by him as provided
under Presidential Decree No. 27. Neither is this recognition permanent nor irrevocable. Thus,
failure on the part of the farmer/grantee to comply with his obligation to pay his lease rentals or
amortization payments when they fall due for a period of two (2) years to the landowner or
agricultural lessor is a ground for forfeiture of his certificate of land transfer (Section 2, P.D. No.
816; Pagtalunan v. Tamayo, G.R. No. 54281, March 19, 1990).
This Court has therefore clarified, that it is only compliance with the prescribed conditions which
entitles the farmer/grantee to an emancipation patent by which he acquires the vested right of
absolute ownership in the landholding a right which has become fixed and established and is
no longer open to doubt and controversy. At best the farmer/grantee prior to compliance with
these conditions, merely possesses a contingent or expectant right of ownership over the
landholding (Ibid.).

EN BANC

[G.R. No. 86889. December 4, 1990.]

LUZ FARMS, petitioner, vs. THE HONORABLE SECRETARY OF THE DEPARTMENT OF

AGRARIAN REFORM, respondent.

Under the foregoing principles, a reading of Section 16 (d) of the CARP law will readily show that
it does not suffer from arbitrariness which makes it constitutionally objectionable. Although the

Enrique M. Belo for petitioner.

order be issued enjoining public respondents from enforcing the same, insofar as they are made
to apply to Luz Farms and other livestock and poultry raisers.

DECISION

This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz Farms'
prayer for the issuance of a preliminary injunction in its Manifestation dated May 26, and 31,
1989. (Rollo, p. 98).

PARAS, J p:
This is a petition for prohibition with prayer for restraining order and/or preliminary and
permanent injunction against the Honorable Secretary of the Department of Agrarian Reform for
acting without jurisdiction in enforcing the assailed provisions of R.A. No. 6657, otherwise known

Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant said
Motion for Reconsideration regarding the injunctive relief, after the filing and approval by this
Court of an injunction bond in the amount of P100,000.00. This Court also gave due course to
the petition and required the parties to file their respective memoranda (Rollo, p. 119).

as the Comprehensive Agrarian Reform Law of 1988 and in promulgating the Guidelines and

The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).

Procedure Implementing Production and Profit Sharing under R.A. No. 6657, insofar as the
same apply to herein petitioner, and further from performing an act in violation of the
constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:

On December 22, 1989, the Solicitor General adopted his Comment to the petition as his
Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to
apply to it:

On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which includes
the raising of livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and

(a)

Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of

"Agricultural, Agricultural Enterprise or Agricultural Activity."

Procedures Implementing Production and Profit Sharing as embodied in Sections 13 and 32 of

(b)

Section 11 which defines "commercial farms" as "private agricultural lands devoted to

R.A. No. 6657 (Rollo, p. 80).

commercial, livestock, poultry and swine raising . . ."

On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and

(c)

Section 13 which calls upon petitioner to execute a production-sharing plan.

Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p. 81).

(d)

Section 16(d) and 17 which vest on the Department of Agrarian Reform the authority to

Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry

summarily determine the just compensation to be paid for lands covered by the Comprehensive

business and together with others in the same business allegedly stands to be adversely

Agrarian Reform Law.

affected by the enforcement of Section 3(b), Section 11, Section 13, Section 16(d) and 17 and

(e)

Section 32 of R.A. No. 6657 otherwise known as Comprehensive Agrarian Reform Law and of
the Guidelines and Procedures Implementing Production and Profit Sharing under R.A. No.

Section 32 which spells out the production-sharing plan mentioned in Section 13

". . . (W)hereby three percent (3%) of the gross sales from the

6657 promulgated on January 2, 1989 and the Rules and Regulations Implementing Section 11

production of such lands are distributed within sixty (60) days of the end

thereof as promulgated by the DAR on January 9, 1989 (Rollo, pp. 2-36).

of the fiscal year as compensation to regular and other farmworkers in

Hence, this petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or restraining

such lands over and above the compensation they currently receive:
Provided, That these individuals or entities realize gross sales in excess

of five million pesos per annum unless the DAR, upon proper application,

coverage (Rollo, p. 131). Livestock or poultry raising is not similar to crop or tree farming. Land
is not the primary resource in this undertaking and represents no more than five percent (5%) of

determine a lower ceiling.

the total investment of commercial livestock and poultry raisers. Indeed, there are many owners

In the event that the individual or entity realizes a profit, an

of residential lands all over the country who use available space in their residence for

additional ten (10%) of the net profit after tax shall be distributed to said

commercial livestock and raising purposes, under "contract-growing arrangements," whereby

regular and other farmworkers within ninety (90) days of the end of the

processing corporations and other commercial livestock and poultry raisers (Rollo, p. 10). Lands
support the buildings and other amenities attendant to the raising of animals and birds. The use

fiscal year . . ."

of land is incidental to but not the principal factor or consideration in productivity in this industry.

The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of R.A.
No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said law includes
the raising of livestock, poultry and swine in its coverage as well as the Implementing Rules and
Guidelines promulgated in accordance therewith.

Including backyard raisers, about 80% of those in commercial livestock and poultry production
occupy five hectares or less. The remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is
embraced in the term "agriculture" and the inclusion of such enterprise under Section 3(b) of

The constitutional provision under consideration reads as follows:

R.A. 6657 is proper. He cited that Webster's International Dictionary, Second Edition (1954),
defines the following words:

ARTICLE XIII
xxx

xxx

xxx

often, including also, feeding, breeding and management of livestock, tillage, husbandry,

AGRARIAN AND NATURAL RESOURCES REFORM

Section 4.

"Agriculture the art or science of cultivating the ground and raising and harvesting crops,

The State shall, by law, undertake an agrarian reform program founded on the

right of farmers and regular farmworkers, who are landless, to own directly or collectively the
lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To
this end, the State shall encourage and undertake the just distribution of all agricultural lands,
subject to such priorities and reasonable retention limits as the Congress may prescribe, taking

farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for profit.
Farm a plot or tract of land devoted to the raising of domestic or other animals." (Rollo, pp.
82-83).

into account ecological, developmental, or equity considerations, and subject to the payment of

The petition is impressed with merit.

just compensation. In determining retention limits, the State shall respect the rights of small

The question raised is one of constitutional construction. The primary task in constitutional

landowners. The State shall further provide incentives for voluntary land-sharing.
xxx

xxx

xxx"

construction is to ascertain and thereafter assure the realization of the purpose of the framers in
the adoption of the Constitution (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA
413 [1970]).

Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety. In
fact, it acknowledges the correctness of the decision of this Court in the case of the Association
of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform (G.R. 78742, 14
July 1989) affirming the constitutionality of the Comprehensive Agrarian Reform Law. It,
however, argued that Congress in enacting the said law has transcended the mandate of the
Constitution, in including land devoted to the raising of livestock, poultry and swine in its

Ascertainment of the meaning of the provision of Constitution begins with the language of
the document itself. The words used in the Constitution are to be given their ordinary meaning
except where technical terms are employed in which case the significance thus attached to them
prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31 SCRA 413 [1970]).

It is generally held that, in construing constitutional provisions which are ambiguous or of

doubtful meaning, the courts may consider the debates in the constitutional convention as
throwing light on the intent of the framers of the Constitution. It is true that the intent of the

I was wondering whether I am wrong in my appreciation that if somebody puts up a piggery or a

poultry project and for that purpose hires farmworkers therein, these farmworkers will

convention is not controlling by itself, but as its proceeding was preliminary to the adoption by

automatically have the right to own eventually, directly or ultimately or collectively, the land on

the people of the Constitution the understanding of the convention as to what was meant by the

which the piggeries and poultry projects were constructed. (Record, CONCOM, August 2, 1986,

terms of the constitutional provision which was the subject of the deliberation, goes a long way

p. 618).

toward explaining the understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59

xxx

SCRA 183 [1974]).

Tadeo, quoted as follows:

the Constitution to include livestock and poultry industry in the coverage of the constitutionally-

xxx

mandated agrarian reform program of the Government.

The Committee adopted the definition of "agricultural land" as defined under Section 166 of
R.A. 3844, as laud devoted to any growth, including but not limited to crop lands, saltbeds,
fishponds, idle and abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture."
Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of

xxx

The questions were answered and explained in the statement of then Commissioner

The transcripts of the deliberations of the Constitutional Commission of 1986 on the

meaning of the word "agricultural," clearly show that it was never the intention of the framers of

xxx

xxx

xxx

"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan. Ipinaaalam ko kay
Commissioner Regalado na hindi namin inilagay ang agricultural worker sa kadahilanang
kasama rito ang piggery, poultry at livestock workers. Ang inilagay namin dito ay farm worker
kaya hindi kasama ang piggery, poultry at livestock workers (Record, CONCOM, August 2, 1986,
Vol. II, p. 621).

agricultural land from such lands as commercial and industrial lands and residential properties
because all of them fall under the general classification of the word "agricultural". This proposal,

It is evident from the foregoing discussion that Section II of R.A. 6657 which includes

however, was not considered because the Committee contemplated that agricultural lands are

"private agricultural lands devoted to commercial livestock, poultry and swine raising" in the

limited to arable and suitable agricultural lands and therefore, do not include commercial,

definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial

industrial and residential lands (Record, CONCOM, August 7, 1986, Vol. III, p. 30).

activities are made to be covered by the agrarian reform program of the State. There is simply

In the interpellation, then Commissioner Regalado (now a Supreme Court Justice), posed
several questions, among others, quoted as follows:

no reason to include livestock and poultry lands in the coverage of agrarian reform. (Rollo, p.
21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and 32 of

xxx

xxx

xxx

R.A. 6657 directing "corporate farms" which include livestock and poultry raisers to execute and

"Line 19 refers to genuine reform program founded on the primary right of farmers and

implement "production-sharing plans" (pending final redistribution of their landholdings) whereby

farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under this

they are called upon to distribute from three percent (3%) of their gross sales and ten percent

provision because it speaks of the primary right of farmers and farmworkers to own directly or

(10%) of their net profits to their workers as additional compensation is unreasonable for being
confiscatory, and therefore violative of due process (Rollo, p. 21).

collectively the lands they till. As also mentioned by Commissioner Tadeo, farmworkers include
those who work in piggeries and poultry projects.

It has been established that this Court will assume jurisdiction over a constitutional question
only if it is shown that the essential requisites of a judicial inquiry into such a question are first
satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights

susceptible of judicial determination, the constitutional question must have been opportunely
raised by the proper party, and the resolution of the question is unavoidably necessary to the

G.R. No. L-61293 February 15, 1990

decision of the case itself (Association of Small Landowners of the Philippines, Inc. v. Secretary
of Agrarian Reform, G.R. 78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744;
Manaay v. Juico, G.R. 79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with
constitutional issues, it will not hesitate to declare a law or act invalid when it is convinced that
this must be done. In arriving at this conclusion, its only criterion will be the Constitution and God

DOMINGO B. MADDUMBA and ANITA C. MADDUMBA, petitioners,

vs.
GOVERNMENT SERVICE INSURANCE SYSTEM, Represented by its Chairman, Board of
Trustees, HONORABLE LEONILO OCAMPO, respondent.
Vicente P. Leus for petitioners.
The Government Corporate Counsel for GSIS.

as its conscience gives it in the light to probe its meaning and discover its purpose. Personal
motives and political considerations are irrelevancies that cannot influence its decisions.
Blandishment is as ineffectual as intimidation, for all the awesome power of the Congress and

REGALADO, J.:

Executive, the Court will not hesitate "to make the hammer fall heavily," where the acts of these
departments, or of any official, betray the people's will as expressed in the Constitution
(Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R.
78742; Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R. 79777,
14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional powers, it
becomes the duty of the judiciary to declare what the other branches of the government had
assumed to do, as void. This is the essence of judicial power conferred by the Constitution "(I)n
one Supreme Court and in such lower courts as may be established by law" (Art. VIII, Section 1
of the 1935 Constitution; Article X, Section I of the 1973 Constitution and which was adopted as
part of the Freedom Constitution, and Article VIII, Section 1 of the 1987 Constitution) and which

This petition for mandamus seeks to compel respondent Government Service Insurance System
(GSIS) to accept Land Bank bonds at their face value as installments payments for a preexisting obligation.
The records disclose that on December 10, 1980, respondent GSIS conducted a public bidding
of several foreclosed properties. Included in the properties offered to the public was a house and
lot situated at 3377 New Panaderos Street, Sta. Ana, Manila, covered by Transfer Certificate of
Title No. 4749 of the Register of Deeds of Manila.
Petitioner Domingo B. Maddumba participated in the public bidding and submitted his sealed bid
in the amount of P98,000.00 in Philippine currency. The bid was subject to the condition that
there should be a down payment of 35% of the amount thereof, the 10% constituting the
proposal bond with the remaining 25% to be paid after the receipt of the notice of award or
acceptance of the bid. Accordingly, petitioner enclosed with his sealed bid a manager's check in
the amount of P9,500.00 and cash in the amount of P300.00 to complete the P9,800.00
proposal bond.

power this Court has exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b), 11, 13
and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock, poultry and swine in
its coverage as well as the Implementing Rules and Guidelines promulgated in accordance
therewith, are hereby DECLARED null and void for being unconstitutional and the writ of
preliminary injunction issued is hereby MADE permanent.
SO ORDERED.

SECOND DIVISION

Upon the receipt of the notice of award, petitioner offered to pay the additional 25% in Land
Bank bonds at their face value. These bonds were issued to petitioner as payment for his
riceland consisting of twenty-six hectares located in Cordon, Isabela acquired by the
Government from him under Presidential Decree No. 27. However, the GSIS rejected the offer,
hence it was withdrawn by petitioner. Petitioner then offered to pay in cash the remaining 25%
down payment "and all future installments." 1 Thereafter, on November 16, 1981, petitioner paid
in cash the balance of the required down payment.
A "Deed of Conditional Sale" was executed by the parties on November 19, 1981, where the
petitioner as vendee agreed to pay the vendor GSIS "the balance of the purchase price of
SIXTY THREE THOUSAND SEVEN HUNDRED FIVE & 50/100 (P63,705.50) PESOS,
Philippine currency, in SIXTY (60) monthly installments of ONE THOUSAND FOUR HUNDRED
SIXTEEN & 69/100 (P1,416.69) PESOS, Philippine currency, at twelve (12%) percent interest
per annum, compounded monthly, beginning December 1, 1981." 2
The first installment in the amount of P1,416.00 was paid by petitioner on December 3, 1981.
When the second monthly installment became due, petitioner sent a letter dated January 5,
1982, to the GSIS Board of Trustees requesting that he be allowed to pay the monthly

amortizations with his Land Bank bonds commencing in January, 1982 until the exhaustion of
the said bonds. 3 Petitioner invoked the provisions of Secton 85 of Republic Act No. 3844, as
amended by Presidential Decree No. 251.

be preferred, provided that the various bids be equal in every respect in the
medium of payment.
xxx xxx xxx

The GSIS Board of Trustees, in its Resolution No. 91 adopted on January 22, 1982, denied
petitioner's offer. The board "resolved to reiterate the policy that Land Bank bonds shall be
accepted as payment only at a discounted rate to yield the System 18% at maturity. 4
In a letter dated February 12, 1982, petitioner asked the Board of Trustees to reconsider
Resolution No. 91. 5Petitioner reiterated his reliance on Section 85 of Republic Act No. 3844, as
amended, and further supported his position with the contention that the policy of the GSIS
contravenes the ruling in the case of Gonzales, et al. vs. The Government Insurance System,
etc., et al. 6 Likng in the case of ewise, petitioner submitted an opinion of the Ministry of Agrarian
Reform, dated February 12, 1982, wherein it was stated,a inter alia, that "if the GSIS accepts the
Land Bank bonds as payment thereof, it must accept the same at par or face value. To accept
said bonds at a discounted rate would lessen the credibility of the bonds as instruments of
indebtedness." 7

It is not disputed that under the above quoted provisions, a government-owned or controlled
corporation, like the GSIS, is compelled to accept Land Bank bonds as payment for the
purchase of its assets. As a matter of fact, the bidder who offers to pay in bonds of the Land
Bank is entitled to preference. What respondent GSIS is resisting, however, is its being
compelled to accept said bonds at their face value. Respondent, in support of its stance that it
can discount the bonds, avers that "(a) PD 251 has amended Section 85 of RA 3844 by deleting
and eliminating the original provision that Land Bank bonds shall be accepted 'in the amount of
their face value'; and (b) to accept the said bonds at their face value will impair the actuarial
solvency of the GSIS and thoroughly prejudice its capacity to pay death, retirement, insurance,
dividends and other benefits and claims to its more than a million members, the majority of
whom are low salaried government employees and workers." 8
We cannot agree with respondent.

In a letter dated May 31, 1982, petitioner was advised by the Manager, Acquired Assets
Department, GSIS that Resolution No. 415 was adopted on May 18, 1982 by the GSIS Board of
Trustees denying the request of petitioner. Hence, on August 5, 1982, the instant original action
for mandamus was filed by petitioner.
The issue posed by this petition is whether or not under the provisions of Section 85 of Republic
Act No. 3844, as amended by Presidential Decree No. 251 effective July 21, 1973, the GSIS
may be compelled to accept Land Bank bonds at their face value in payment for a residential
house and lot purchased by the bondholder from the GSIS.
The aforesaid provision of law provides:
Sec. 85. Use of Bonds. The bonds issued by the Bank may be used by
the holder thereof and shall be accepted for any of the following:

Respondent's arguments disregard the fact that the provisions of Section 85 are primarily
designed to cushion the impact of dispossession. Not only would there be inconvenience
resulting from dispossession itself, but also from the modes of payment in financing the
acquisition of farm lots. Acceptance of Land Bank bonds, instead of money, undoubtedly
involves a certain degree of sacrifice for the landowner. This, of course, is in addition to the fact
that, in case of expropriation of land covered by land reform, the landowner will seldom get the
compensation he desires. Thus, discounting the Land Banks bonds, and thereby reducing their
effective value, entails and imposes an additional burden on his part. It is, in fact, in
consideration of this sacrifice that we extended the rule on liberality in the interpretation of the
provisions of Republic Act No. 3844, then known as the Agricultural Land Reform Code, in favor
not only of the actual tillers but the landowners as well. Ita semper fiat relatio ut valeat dispositio.
The interpretation must always be such that the disposition may prevail.
The nature of a Land Bank bond itself fortifies our view that the respondent may be compelled to
accept those bonds at their face value. As explained in an earlier case:

xxx xxx xxx

2. Payment for the purchase of shares of stock or assets of governmentowned or controlled corporations.
Upon offer by the bondholders, the corporation owned or controlled by the
Government shall, through its Board of Directors, negotiate with such
bondholder with respect to the price and other terms and conditions of the
sale. In case there are various bondholders making the offer, the one willing
to purchase under the terms and conditions most favorable to the
corporation shall be preferred. If no price is acceptable to the corporation,
the same shall be determined by the Committee of Appraisers composed of
three members, one to be appointed by the corporation, another by the
bondholder making the highest or only offer, and the third by the members
so chosen. The expense of appraisal shall be borne equally by the
corporation and the successful purchaser.
Should the Government offer for sale to the public any or all the shares of
stock or the assets of any of the Government-owned or controlled
corporations, the bidder who offers to pay in bonds of the Land Bank shall

True, the statute does not explicitly provide that Land Bank bonds shall be
accepted at their face value. There can be no question, however, that such
is the intendment of the law particularly in the absence of any provision
expressly permitting discounting, as differentiated from Republic Act No.
304, or the Backpay Law, as amended by Republic Acts Nos. 800 and 897,
which expressly allows it.
Land Bank bonds are certificates of indebtedness, approved by the
Monetary Board of the Central Bank, fully tax-exempt both as to principal
and income, and bear interest at the rate of 6% per annum redeemable at
the option of the Land Bank at or before maturity, which in no case shall
exceed 25 years. They are fully negotiable and unconditionally guaranteed
by the Government of the Republic of the Philippines.
These bonds are deemed contracts and the obligations resulting therefrom
fall within the purview of the non-impairment clause of the Constitution, and
any impairment thereof may take any encroachment in any respect upon
the obligation and cannot be permitted. Thus, the value of these bonds
cannot be diminished by any direct or indirect act, particularly, since said

bonds are fully guaranteed by the Government of the Philippines. They are
issued not in the open market nor for the primary purpose of raising funds or
pooling financial resources but in the captive market of landowners and to
facilitate the speedy transfer of lands to the tenant-farmers in support of the
land reform program of the Government. They are not ordinary commercial
paper in that sense subject to discounting (Emphasis supplied). 9

Suffice it to mention that the petitioner is a government lending institution

and as such, it has the obligation to support unequivocably government
programs already on stream and not to introduce its own interpretative
policies which may thwart such programs or modify them to nothingness.
This is specially compelling with regard to land reform, the great venture of
the government.

We are aware that the above cited cases primarily involved Section 80 of the law as applied to
cases where government financial institutions were compelled to accept Land Bank bonds at
their face value for the discharge of existing encumbrances on parcels of land given as security
even if not an the lands covered by the mortgage were acquired by the Land Bank under
Presidential Decree No. 27. Evidently, however, the variance in the factual setting would not
change the very nature of said bonds by reason of which payment of pre-existing obligations to
government financial institutions at their face or par value is justified and authorized. It would be
hermeneutically unjustified to adopt a tenuous theory which would subject the parity of Land
Bank bonds to qualifications and distinctions when the law itself does not so provide.
The deed of conditional sale which was executed by the parties herein is subject to the
obligation of and guaranteed by the Government under said bonds. Their agreement for the
payment of installments in Philippine currency cannot in any way be construed as an alteration,
nor should it detract from the essence and compulsion, of said obligation While, in one instance,
petitioner offered to pay his future installments in cash, that offer was obviously not voluntarily
made but was exacted from him because of the refusal of respondent to accept the Land Bank
bonds. That incident should not prevent petitioner from making, and allow respondent to refuse,
an alternative mode of payment authorized by law and under the conditions laid down by this
Court.

The preamble of PD 251 eloquently articulates government intent to

implement the state policy of 'diverting landlord capital in agriculture to
industrial development' by 'mobilization and harnessing properly all
available government resources for the realization of the desired agrarian
reform program.' For agrarian reform cannot be fully realized without the
intervention of the governmentparticularly in the payment of just
compensation. Surely, the tenant by himself does not have and cannot
afford the wherewithal to defray the cost of the land tranferred to him. It is
only with the full support and active assistance of the government principally
through its financial institutions that payment of just compensation to the
landowner may be realized. ... (Emphasis supplied).
WHEREFORE, the writ of mandamus prayed for is hereby GRANTED. Respondent Government
Service Insurance System is ordered to accept the bonds issued by the Land Bank of the
Philippines at their par or face value.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.

Respondent cannot rely on the deletion by Presidential Decree No. 251 of the provision in
Section 85 that the bonds shall be accepted in the amount of their face value, and wrest
therefrom an interpretation in support of its thesis. Implied repeals are frowned upon in this
jurisdiction. They are not favored in law and will not be so declared unless the intent of the
legislature is manifest. In the present case, no such intention to effect changes in the law exists
nor is it even apparent. On the contrary, it can be said that when amendments were made to
Section 85, the legislators were fully aware of the nature of Land Bank bonds, which would
necessarily be concordant with the analysis and explanation subsequently made by the Court in
the cases hereinbefore cited. If the legislature had really been minded to make changes in the
policy on the acceptance value of said bonds, they could have expressly so provided with facility
and ease. Thus, although such amendment by deletion was effected in 1973 and the cases
which clarified this point were decided in 1986 and 1987 on factual situations subsequent to
1973, this argument now posited by respondent based on such amendment was not taken into
account by the Court in laying down its aforequoted doctrinal rulings.

G.R. No. 78742 July 14, 1989

Neither can the respondent complain that the acceptance of said bonds at their face value will
impair its actuarial solvency. We are constrained to quote from Gonzales again, that "(w)hatever
unfavorable results the acceptance may have on its finances, the effects must be deemed to
have been intended by Presidential Decree No. 251, particularly, when it provided for the
payment in bonds to government lending institutions their 'existing charters to the contrary
notwithstanding.' If iniquitous to said institutions, it remains now with the legislative branch to
make the necessary revisions if desired. The traditional role assigned to the Judiciary is to
implement and not to thwart fundamental policy goals."

G.R. No. 79310 July 14, 1989

It is apropos to recall, all this juncture, our reminder in the aforecited case of Philippine National
Bank vs. Amores, et al., which applies with equal force to herein respondent and the present
case:

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D.

GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE,
CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA,
REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B.
MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO,
CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S.
FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA,

HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC.,
Victorias Mill District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

grandiose but undoubtedly sincere provisions for the uplift of the common people. These include
a call in the following words for the adoption by the State of an agrarian reform program:

INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM,
HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT,
and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCENA and
ROBERTO TAAY, respondents.

SEC. 4. The State shall, by law, undertake an agrarian reform program

founded on the right of farmers and regular farmworkers, who are landless,
to own directly or collectively the lands they till or, in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end, the
State shall encourage and undertake the just distribution of all agricultural
lands, subject to such priorities and reasonable retention limits as the
Congress may prescribe, taking into account ecological, developmental, or
equity considerations and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary landsharing.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES,respondents.

CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his
life on his way to Mycenae after performing his eleventh labor. The two wrestled mightily and
Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules' increasing amazement. Finally,
as they continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and could
never die as long as any part of his body was touching his Mother Earth. Thus forewarned,
Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed
him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the
powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental
forces of life and death, of men and women who, like Antaeus need the sustaining strength of
the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of
this precious resource among our people. But it is more than a slogan. Through the brooding
centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure
the well-being and economic security of all the people," 1 especially the less privileged. In 1973,
the new Constitution affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse
property ownership and profits." 2 Significantly, there was also the specific injunction to
"formulate and implement an agrarian reform program aimed at emancipating the tenant from
the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also
adopted one whole and separate Article XIII on Social Justice and Human Rights, containing

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had
already been enacted by the Congress of the Philippines on August 8, 1963, in line with the
above-stated principles. This was substantially superseded almost a decade later by P.D. No.
27, which was promulgated on October 21, 1972, along with martial law, to provide for the
compulsory acquisition of private lands for distribution among tenant-farmers and to specify
maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the thrust for
agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228,
declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the
valuation of still unvalued lands covered by the decree as well as the manner of their payment.
This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for
its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took over
legislative power from the President and started its own deliberations, including extensive public
hearings, on the improvement of the interests of farmers. The result, after almost a year of
spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988. This law, while
considerably changing the earlier mentioned enactments, nevertheless gives them suppletory
effect insofar as they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve common legal
questions, including serious challenges to the constitutionality of the several measures
mentioned above. They will be the subject of one common discussion and resolution, The
different antecedents of each case will require separate treatment, however, and will first be
explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and
R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by
petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and
owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands
by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of
separation of powers, due process, equal protection and the constitutional limitation that no
private property shall be taken for public use without just compensation.

in the basic amended petition that the above- mentioned enactments have been impliedly
repealed by R.A. No. 6657.
G.R. No. 79310

They contend that President Aquino usurped legislative power when she promulgated E.O. No.
228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution,
for failure to provide for retention limits for small landowners. Moreover, it does not conform to
Article VI, Section 25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners argue that the same
may be made only by a court of justice and not by the President of the Philippines. They invoke
the recent cases of EPZA v. Dulay 5and Manotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in cash and not in the
form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also deprives
the petitioners of their property rights as protected by due process. The equal protection clause
is also violated because the order places the burden of solving the agrarian problems on the
owners only of agricultural lands. No similar obligation is imposed on the owners of other
properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the
owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so
violated due process. Worse, the measure would not solve the agrarian problem because even
the small farmers are deprived of their lands and the retention rights guaranteed by the
Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the
earlier cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn
Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The determination of
just compensation by the executive authorities conformably to the formula prescribed under the
questioned order is at best initial or preliminary only. It does not foreclose judicial intervention
whenever sought or warranted. At any rate, the challenge to the order is premature because no
valuation of their property has as yet been made by the Department of Agrarian Reform. The
petitioners are also not proper parties because the lands owned by them do not exceed the
maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for
retention limits on tenanted lands and that in any event their petition is a class suit brought in
behalf of landowners with landholdings below 24 hectares. They maintain that the determination
of just compensation by the administrative authorities is a final ascertainment. As for the cases
invoked by the public respondent, the constitutionality of P.D. No. 27 was merely assumed
in Chavez, while what was decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos.
228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657.
Nevertheless, this statute should itself also be declared unconstitutional because it suffers from
substantially the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of
a 1. 83- hectare land, who complained that the DAR was insisting on the implementation of P.D.
No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant on
the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations

The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias,
Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of
1,400 planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and
E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program
as decreed by the Constitution belongs to Congress and not the President. Although they agree
that the President could exercise legislative power until the Congress was convened, she could
do so only to enact emergency measures during the transition period. At that, even assuming
that the interim legislative power of the President was properly exercised, Proc. No. 131 and
E.O. No. 229 would still have to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian
Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the
estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall
be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and
Receipts of sale of ill-gotten wealth received through the Presidential Commission on Good
Government and such other sources as government may deem appropriate. The amounts
collected and accruing to this special fund shall be considered automatically appropriated for the
purpose authorized in this Proclamation the amount appropriated is in futuro, not in esse. The
money needed to cover the cost of the contemplated expropriation has yet to be raised and
cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just compensation
as it is traditionally understood, i.e., with money and in full, but no such payment is contemplated
in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank
of the Philippines "shall compensate the landowner in an amount to be established by the
government, which shall be based on the owner's declaration of current fair market value as
provided in Section 4 hereof, but subject to certain controls to be defined and promulgated by
the Presidential Agrarian Reform Council." This compensation may not be paid fully in money
but in any of several modes that may consist of part cash and part bond, with interest, maturing
periodically, or direct payment in cash or bond as may be mutually agreed upon by the
beneficiary and the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was made to make
a careful study of the sugar planters' situation. There is no tenancy problem in the sugar areas
that can justify the application of the CARP to them. To the extent that the sugar planters have
been lumped in the same legislation with other farmers, although they are a separate group with
problems exclusively their own, their right to equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane
Planters (NASP) which claims a membership of at least 20,000 individual sugar planters all over
the country. On September 10, 1987, another motion for intervention was filed, this time by
Manuel Barcelona, et al., representing coconut and riceland owners. Both motions were granted
by the Court.

NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and
that, in any event, the appropriation is invalid because of uncertainty in the amount appropriated.
Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum
authorized amount. This is not allowed. Furthermore, the stated initial amount has not been
certified to by the National Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and
convincing evidence the necessity for the exercise of the powers of eminent domain, and the
violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the expropriation
of the said land for an amount equal to the government assessor's valuation of the land for tax
purposes. On the other hand, if the landowner declares his own valuation he is unjustly required
to immediately pay the corresponding taxes on the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the
expropriation as explained in the "whereas" clauses of the Proclamation and submits that,
contrary to the petitioner's contention, a pilot project to determine the feasibility of CARP and a
general survey on the people's opinion thereon are not indispensable prerequisites to its
promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to show
that they belong to a different class and should be differently treated. The Comment also
suggests the possibility of Congress first distributing public agricultural lands and scheduling the
expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition
would be premature.
The public respondent also points out that the constitutional prohibition is against the payment of
public money without the corresponding appropriation. There is no rule that only money already
in existence can be the subject of an appropriation law. Finally, the earmarking of fifty billion
pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually the
maximum sum appropriated. The word "initial" simply means that additional amounts may be
appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf,
assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised,
Serrano contends that the measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not expressed in
the title;
(3) The power of the President to legislate was terminated on July 2, 1987;
and
(4) The appropriation of a P50 billion special fund from the National
Treasury did not originate from the House of Representatives.
G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of
due process and the requirement for just compensation, placed his landholding under the
coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to
the private respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding
under Operation Land transfer and asked for the recall and cancellation of the Certificates of
Land Transfer in the name of the private respondents. He claims that on December 24, 1986, his
petition was denied without hearing. On February 17, 1987, he filed a motion for reconsideration,
which had not been acted upon when E.O. Nos. 228 and 229 were issued. These orders
rendered his motion moot and academic because they directly effected the transfer of his land to
the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the
Philippines.
(2) The said executive orders are violative of the constitutional provision that
no private property shall be taken without due process or just compensation.
(3) The petitioner is denied the right of maximum retention provided for
under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress
convened is anomalous and arbitrary, besides violating the doctrine of separation of powers. The
legislative power granted to the President under the Transitory Provisions refers only to
emergency measures that may be promulgated in the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due process of
law and to the retention of his small parcels of riceholding as guaranteed under Article XIII,
Section 4 of the Constitution. He likewise argues that, besides denying him just compensation
for his land, the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after October
21, 1972 shall be considered as advance payment for the land.
is an unconstitutional taking of a vested property right. It is also his contention that the inclusion
of even small landowners in the program along with other landowners with lands consisting of
seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because the motion
for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity
of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section
6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first Congress is
convened.
On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on
October 21. 1972, the tenant-farmer of agricultural land was deemed the owner of the land he

was tilling. The leasehold rentals paid after that date should therefore be considered
amortization payments.

Court in Tanada v. Tuvera. 10 As for LOI 474, the same is ineffective for the additional reason that
a mere letter of instruction could not have repealed the presidential decree.

In his Reply to the public respondents, the petitioner maintains that the motion he filed was
resolved on December 14, 1987. An appeal to the Office of the President would be useless with
the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public
respondent's acts.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice
and corn lands not exceeding seven hectares as long as they are cultivating or intend to
cultivate the same. Their respective lands do not exceed the statutory limit but are occupied by
tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn
shall be ejected or removed from his farmholding until such time as the
respective rights of the tenant- farmers and the landowner shall have been
determined in accordance with the rules and regulations implementing P.D.
No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of
retention because the Department of Agrarian Reform has so far not issued the implementing
rules required under the above-quoted decree. They therefore ask the Court for a writ of
mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474
removing any right of retention from persons who own other agricultural lands of more than 7
hectares in aggregate area or lands used for residential, commercial, industrial or other
purposes from which they derive adequate income for their family. And even assuming that the
petitioners do not fall under its terms, the regulations implementing P.D. No. 27 have already
been issued, to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by
Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No.
11 dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No.
18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and
Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985 (Providing
for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their
Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the
corresponding applications for retention under these measures, the petitioners are now barred
from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the
issuance of the implementing rules, assuming this has not yet been done, involves the exercise
of discretion which cannot be controlled through the writ of mandamus. This is especially true if
this function is entrusted, as in this case, to a separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to them
because they do not own more than seven hectares of agricultural land. Moreover, assuming
arguendo that the rules were intended to cover them also, the said measures are nevertheless
not in force because they have not been published as required by law and the ruling of this

Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to annul the
acts of either the legislative or the executive or of both when not conformable to the fundamental
law. This is the reason for what some quarters call the doctrine of judicial supremacy. Even so,
this power is not lightly assumed or readily exercised. The doctrine of separation of powers
imposes upon the courts a proper restraint, born of the nature of their functions and of their
respect for the other departments, in striking down the acts of the legislative and the executive
as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain.
The theory is that before the act was done or the law was enacted, earnest studies were made
by Congress or the President, or both, to insure that the Constitution would not be breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of the
Supreme Court who took part in the deliberations and voted on the issue during their session en
banc. 11 And as established by judge made doctrine, the Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a judicial inquiry into
such a question are first satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the constitutional question must have
been opportunely raised by the proper party, and the resolution of the question is unavoidably
necessary to the decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases before us, we
hold that the same is satisfied by the petitioners and intervenors because each of them has
sustained or is in danger of sustaining an immediate injury as a result of the acts or measures
complained of. 13 And even if, strictly speaking, they are not covered by the definition, it is still
within the wide discretion of the Court to waive the requirement and so remove the impediment
to its addressing and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino although
they were invoking only an indirect and general interest shared in common with the public. The
Court dismissed the objection that they were not proper parties and ruled that "the
transcendental importance to the public of these cases demands that they be settled promptly
and definitely, brushing aside, if we must, technicalities of procedure." We have since then
applied this exception in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid
when it is convinced that this must be done. In arriving at this conclusion, its only criterion will be
the Constitution as God and its conscience give it the light to probe its meaning and discover its
purpose. Personal motives and political considerations are irrelevancies that cannot influence its
decision. Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not hesitate to
"make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of
these departments, or of any public official, betray the people's will as expressed in the
Constitution.

It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional boundaries, it does
not assert any superiority over the other departments; it does not in reality
nullify or invalidate an act of the Legislature, but only asserts the solemn
and sacred obligation assigned to it by the Constitution to determine
conflicting claims of authority under the Constitution and to establish for the
parties in an actual controversy the rights which that instrument secures and
guarantees to them. This is in truth all that is involved in what is termed
"judicial supremacy" which properly is the power of judicial review under the
Constitution. 16
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial
law has already been sustained in Gonzales v. Estrella and we find no reason to modify or
reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and
E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of
the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the Congress
of the Philippines was formally convened and took over legislative power from her. They are not
"midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued on
July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued
on July 22, 1987. Neither is it correct to say that these measures ceased to be valid when she
lost her legislative power for, like any statute, they continue to be in force unless modified or
repealed by subsequent law or declared invalid by the courts. A statute does not ipso
facto become inoperative simply because of the dissolution of the legislature that enacted it. By
the same token, President Aquino's loss of legislative power did not have the effect of
invalidating all the measures enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they shall be
suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed, some
portions of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No.
131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the CARP
Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not conform to
the requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc.
No. 131 is not an appropriation measure even if it does provide for the creation of said fund, for
that is not its principal purpose. An appropriation law is one the primary and specific purpose of
which is to authorize the release of public funds from the treasury.19 The creation of the fund is
only incidental to the main objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section
25(4) of Article VI, are not applicable. With particular reference to Section 24, this obviously
could not have been complied with for the simple reason that the House of Representatives,

which now has the exclusive power to initiate appropriation measures, had not yet been
convened when the proclamation was issued. The legislative power was then solely vested in
the President of the Philippines, who embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be
invalidated because they do not provide for retention limits as required by Article XIII, Section 4
of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in
Section 6 of the law, which in fact is one of its most controversial provisions. This section
declares:
Retention Limits. Except as otherwise provided in this Act, no person
may own or retain, directly or indirectly, any public or private agricultural
land, the size of which shall vary according to factors governing a viable
family-sized farm, such as commodity produced, terrain, infrastructure, and
soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner
exceed five (5) hectares. Three (3) hectares may be awarded to each child
of the landowner, subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is actually tilling the land or directly
managing the farm; Provided, That landowners whose lands have been
covered by Presidential Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder, further, That original homestead
grantees or direct compulsory heirs who still own the original homestead at
the time of the approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only
one subject, to be expressed in its title, deserves only short attention. It is settled that the title of
the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in
the text are relevant to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance, by
whatever name it was called, had the force and effect of law because it came from President
Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R.
No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a
letter of instruction. The important thing is that it was issued by President Marcos, whose word
was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to comply
with the requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless
published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not
have any force and effect if they were among those enactments successfully challenged in that
case. LOI 474 was published, though, in the Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of
mandamus cannot issue to compel the performance of a discretionary act, especially by a
specific department of the government. That is true as a general proposition but is subject to one
important qualification. Correctly and categorically stated, the rule is that mandamus will lie to
compel the discharge of the discretionary duty itself but not to control the discretion to be
exercised. In other words, mandamus can issue to require action only but not specific action.
Whenever a duty is imposed upon a public official and an unnecessary and
unreasonable delay in the exercise of such duty occurs, if it is a clear duty
imposed by law, the courts will intervene by the extraordinary legal remedy
of mandamus to compel action. If the duty is purely ministerial, the courts

will require specific action. If the duty is purely discretionary, the courts
by mandamus will require action only. For example, if an inferior court,
public official, or board should, for an unreasonable length of time, fail to
decide a particular question to the great detriment of all parties concerned,
or a court should refuse to take jurisdiction of a cause when the law clearly
gave it jurisdiction mandamus will issue, in the first case to require a
decision, and in the second to require that jurisdiction be taken of the
cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy
and adequate remedy available from the administrative authorities, resort to the courts may still
be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent domain
that logically preclude the application of both powers at the same time on the same subject. In
the case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all
municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value,
the Court held that the power being exercised was eminent domain because the property
involved was wholesome and intended for a public use. Property condemned under the police
power is noxious or intended for a noxious purpose, such as a building on the verge of collapse,
which should be demolished for the public safety, or obscene materials, which should be
destroyed in the interest of public morals. The confiscation of such property is not compensable,
unlike the taking of property under the power of expropriation, which requires the payment of just
compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the
police power in a famous aphorism: "The general rule at least is that while property may be
regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The
regulation that went "too far" was a law prohibiting mining which might cause the subsidence of
structures for human habitation constructed on the land surface. This was resisted by a coal
company which had earlier granted a deed to the land over its mine but reserved all mining
rights thereunder, with the grantee assuming all risks and waiving any damage claim. The Court
held the law could not be sustained without compensating the grantor. Justice Brandeis filed a
lone dissent in which he argued that there was a valid exercise of the police power. He said:
Every restriction upon the use of property imposed in the exercise of the
police power deprives the owner of some right theretofore enjoyed, and is,
in that sense, an abridgment by the State of rights in property without
making compensation. But restriction imposed to protect the public health,
safety or morals from dangers threatened is not a taking. The restriction
here in question is merely the prohibition of a noxious use. The property so
restricted remains in the possession of its owner. The state does not
appropriate it or make any use of it. The state merely prevents the owner
from making a use which interferes with paramount rights of the public.
Whenever the use prohibited ceases to be noxious as it may because of
further changes in local or social conditions the restriction will have to be
removed and the owner will again be free to enjoy his property as
heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police power and
the power of eminent domain, with the latter being used as an implement of the former like the
power of taxation. The employment of the taxing power to achieve a police purpose has long
been accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University of

Illinois College of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365,
which sustained a zoning law under the police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the Police and
eminent domain powers on different planets. Generally speaking, they
viewed eminent domain as encompassing public acquisition of private
property for improvements that would be available for public use," literally
construed. To the police power, on the other hand, they assigned the less
intrusive task of preventing harmful externalities a point reflected in the
Euclid opinion's reliance on an analogy to nuisance law to bolster its support
of zoning. So long as suppression of a privately authored harm bore a
plausible relation to some legitimate "public purpose," the pertinent measure
need have afforded no compensation whatever. With the progressive growth
of government's involvement in land use, the distance between the two
powers has contracted considerably. Today government often employs
eminent domain interchangeably with or as a useful complement to the
police power-- a trend expressly approved in the Supreme Court's 1954
decision in Berman v. Parker, which broadened the reach of eminent
domain's "public use" test to match that of the police power's standard of
"public purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted areas in
the District of Columbia as a proper exercise of the police power. On the role of eminent domain
in the attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's Capital
should be beautiful as well as sanitary, there is nothing in the Fifth
Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it
through the exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S
Supreme Court sustained the respondent's Landmarks Preservation Law under which the
owners of the Grand Central Terminal had not been allowed to construct a multi-story office
building over the Terminal, which had been designated a historic landmark. Preservation of the
landmark was held to be a valid objective of the police power. The problem, however, was that
the owners of the Terminal would be deprived of the right to use the airspace above it although
other landowners in the area could do so over their respective properties. While insisting that
there was here no taking, the Court nonetheless recognized certain compensatory rights
accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused
by the regulation. This "fair compensation," as he called it, was explained by Prof. Costonis in
this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central was
authorized to transfer to neighboring properties the authorized but unused rights accruing to the
site prior to the Terminal's designation as a landmark the rights which would have been
exhausted by the 59-story building that the city refused to countenance atop the Terminal.
Prevailing bulk restrictions on neighboring sites were proportionately relaxed, theoretically
enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to
others the right to construct larger, hence more profitable buildings on the transferee sites. 30

The cases before us present no knotty complication insofar as the question of compensable
taking is concerned. To the extent that the measures under challenge merely prescribe retention
limits for landowners, there is an exercise of the police power for the regulation of private
property in accordance with the Constitution. But where, to carry out such regulation, it becomes
necessary to deprive such owners of whatever lands they may own in excess of the maximum
area allowed, there is definitely a taking under the power of eminent domain for which payment
of just compensation is imperative. The taking contemplated is not a mere limitation of the use of
the land. What is required is the surrender of the title to and the physical possession of the said
excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is
definitely an exercise not of the police power but of the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the several
measures before us are challenged as violative of the due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits
are prescribed has already been discussed and dismissed. It is noted that although they excited
many bitter exchanges during the deliberation of the CARP Law in Congress, the retention limits
finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore
do not discuss them here. The Court will come to the other claimed violations of due process in
connection with our examination of the adequacy of just compensation as required under the
power of expropriation.
The argument of the small farmers that they have been denied equal protection because of the
absence of retention limits has also become academic under Section 6 of R.A. No. 6657.
Significantly, they too have not questioned the area of such limits. There is also the complaint
that they should not be made to share the burden of agrarian reform, an objection also made by
the sugar planters on the ground that they belong to a particular class with particular interests of
their own. However, no evidence has been submitted to the Court that the requisites of a valid
classification have been violated.
Classification has been defined as the grouping of persons or things similar to each other in
certain particulars and different from each other in these same particulars. 31 To be valid, it must
conform to the following requirements: (1) it must be based on substantial distinctions; (2) it
must be germane to the purposes of the law; (3) it must not be limited to existing conditions only;
and (4) it must apply equally to all the members of the class. 32 The Court finds that all these
requisites have been met by the measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be treated alike
both as to the rights conferred and the liabilities imposed. 33 The petitioners have not shown that
they belong to a different class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the burden of
implementing land reform must be rejected. There is a substantial distinction between these two
classes of owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect by the courts of justice
except only where its discretion is abused to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police power only
if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests
of the public generally as distinguished from those of a particular class require the interference
of the State and, no less important, the means employed are reasonably necessary for the
attainment of the purpose sought to be achieved and not unduly oppressive upon
individuals. 34 As the subject and purpose of agrarian reform have been laid down by the
Constitution itself, we may say that the first requirement has been satisfied. What remains to be
examined is the validity of the method employed to achieve the constitutional goal.

One of the basic principles of the democratic system is that where the rights of the individual are
concerned, the end does not justify the means. It is not enough that there be a valid objective; it
is also necessary that the means employed to pursue it be in keeping with the Constitution.
Mere expediency will not excuse constitutional shortcuts. There is no question that not even the
strongest moral conviction or the most urgent public need, subject only to a few notable
exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a,
person invoking a right guaranteed under Article III of the Constitution is a majority of one even
as against the rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of Article III of the
Constitution. With regard to his property, the owner enjoys the added protection of Section 9,
which reaffirms the familiar rule that private property shall not be taken for public use without just
compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to forcibly
acquire private lands intended for public use upon payment of just
compensation to the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also acceptable to the
purchaser, in which case an ordinary deed of sale may be agreed upon by
the parties. 35 It is only where the owner is unwilling to sell, or cannot accept
the price or other conditions offered by the vendee, that the power of
eminent domain will come into play to assert the paramount authority of the
State over the interests of the property owner. Private rights must then yield
to the irresistible demands of the public interest on the time-honored
justification, as in the case of the police power, that the welfare of the
people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute (as
indeed no power is absolute). The limitation is found in the constitutional injunction that "private
property shall not be taken for public use without just compensation" and in the abundant
jurisprudence that has evolved from the interpretation of this principle. Basically, the
requirements for a proper exercise of the power are: (1) public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State
should first distribute public agricultural lands in the pursuit of agrarian reform instead of
immediately disturbing property rights by forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural lands." In any event, the
decision to redistribute private agricultural lands in the manner prescribed by the CARP was
made by the legislative and executive departments in the exercise of their discretion. We are not
justified in reviewing that discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political departments when
they decide what is known as the political question. As explained by Chief Justice Concepcion in
the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary parlance,
namely, a question of policy. It refers to "those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity; or
in regard to which full discretionary authority has been delegated to the

legislative or executive branch of the government." It is concerned with

issues dependent upon the wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted with the enlargement of
judicial power, which now includes the authority of the courts "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 the Government." 37 Even so, this should not be construed as a
license for us to reverse the other departments simply because their views may not coincide with
ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first
provided for, while also continuing apace under the Public Land Act and other cognate laws).
The Court sees no justification to interpose its authority, which we may assert only if we believe
that the political decision is not unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3,1909 that the
entire St. Mary's river between the American bank and the international line,
as well as all of the upland north of the present ship canal, throughout its
entire length, was "necessary for the purpose of navigation of said waters,
and the waters connected therewith," that determination is conclusive in
condemnation proceedings instituted by the United States under that Act,
and there is no room for judicial review of the judgment of Congress ... .
As earlier observed, the requirement for public use has already been settled for us by the
Constitution itself No less than the 1987 Charter calls for agrarian reform, which is the reason
why private agricultural lands are to be taken from their owners, subject to the prescribed
maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No.
6657 are only an elaboration of the constitutional injunction that the State adopt the necessary
measures "to encourage and undertake the just distribution of all agricultural lands to enable
farmers who are landless to own directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and more
thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from its owner
by the expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the
taker's gain but the owner's loss. 40 The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the property to be
taken shall be real, substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions contemplate more than a
mere regulation of the use of private lands under the police power. We deal here with an actual
taking of private agricultural lands that has dispossessed the owners of their property and
deprived them of all its beneficial use and enjoyment, to entitle them to the just compensation
mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the
following conditions concur: (1) the expropriator must enter a private property; (2) the entry must
be for more than a momentary period; (3) the entry must be under warrant or color of legal
authority; (4) the property must be devoted to public use or otherwise informally appropriated or

injuriously affected; and (5) the utilization of the property for public use must be in such a way as
to oust the owner and deprive him of beneficial enjoyment of the property. All these requisites
are envisioned in the measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its
taking possession of the condemned property, as "the compensation is a public charge, the
good faith of the public is pledged for its payment, and all the resources of taxation may be
employed in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in case of
rejection or no response from the landowner, upon the deposit with an
accessible bank designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to
issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the redistribution of the
land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is
entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference
is made to Section 16(d), which provides that in case of the rejection or disregard by the owner
of the offer of the government to buy his land... the DAR shall conduct summary administrative proceedings to determine
the compensation for the land by requiring the landowner, the LBP and
other interested parties to submit evidence as to the just compensation for
the land, within fifteen (15) days from the receipt of the notice. After the
expiration of the above period, the matter is deemed submitted for decision.
The DAR shall decide the case within thirty (30) days after it is submitted for
decision.
To be sure, the determination of just compensation is a function addressed to the courts of
justice and may not be usurped by any other branch or official of the government. EPZA v.
Dulay 44 resolved a challenge to several decrees promulgated by President Marcos providing
that the just compensation for property under expropriation should be either the assessment of
the property by the government or the sworn valuation thereof by the owner, whichever was
lower. In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E.
Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited decrees
constitutes impermissible encroachment on judicial prerogatives. It tends to
render this Court inutile in a matter which under this Constitution is reserved
to it for final determination.
Thus, although in an expropriation proceeding the court technically would
still have the power to determine the just compensation for the property,
following the applicable decrees, its task would be relegated to simply
stating the lower value of the property as declared either by the owner or
the assessor. As a necessary consequence, it would be useless for the
court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of private
property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the strict
application of the decrees during the proceedings would be nothing short of
a mere formality or charade as the court has only to choose between the

valuation of the owner and that of the assessor, and its choice is always
limited to the lower of the two. The court cannot exercise its discretion or
independence in determining what is just or fair. Even a grade school pupil
could substitute for the judge insofar as the determination of constitutional
just compensation is concerned.
xxx
In the present petition, we are once again confronted with the same
question of whether the courts under P.D. No. 1533, which contains the
same provision on just compensation as its predecessor decrees, still have
the power and authority to determine just compensation, independent of
what is stated by the decree and to this effect, to appoint commissioners for
such purpose.

as may be finally determined by the court, as the just compensation for the
land.
The compensation shall be paid in one of the following modes, at the option
of the landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50)
hectares, insofar as the excess
hectarage is concerned Twentyfive percent (25%) cash, the
balance to be paid in government
financial instruments negotiable at
any time.

This time, we answer in the affirmative.

xxx
It is violative of due process to deny the owner the opportunity to prove that
the valuation in the tax documents is unfair or wrong. And it is repulsive to
the basic concepts of justice and fairness to allow the haphazard work of a
minor bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the
property, after evidence and arguments pro and con have been presented,
and after all factors and considerations essential to a fair and just
determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from the
arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the
proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But
more importantly, the determination of the just compensation by the DAR is not by any means
final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly
provides:
Any party who disagrees with the decision may bring the matter to the court
of proper jurisdiction for final determination of just compensation.
The determination made by the DAR is only preliminary unless accepted by all parties
concerned. Otherwise, the courts of justice will still have the right to review with finality the said
determination in the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not as easily
resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall
compensate the landowner in such amount as may be agreed upon by the
landowner and the DAR and the LBP, in accordance with the criteria
provided for in Sections 16 and 17, and other pertinent provisions hereof, or

(b) For lands above twenty-four

(24) hectares and up to fifty (50)
hectares Thirty percent (30%)
cash, the balance to be paid in
government financial instruments
negotiable at any time.
(c) For lands twenty-four (24)
hectares and below Thirty-five
percent (35%) cash, the balance to
be paid in government financial
instruments negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP
preferred shares, physical assets or other qualified investments in
accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned
with 91-day treasury bill rates. Ten
percent (10%) of the face value of
the bonds shall mature every year
from the date of issuance until the
tenth (10th) year: Provided, That
should the landowner choose to
forego the cash portion, whether in
full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability.
Such LBP bonds may be used by
the landowner, his successors-ininterest or his assigns, up to the

amount of their face value, for any

of the following:
(i) Acquisition of land or other real
properties of the government,
including assets under the Asset
Privatization Program and other
assets foreclosed by government
financial institutions in the same
province or region where the lands
for which the bonds were paid are
situated;
(ii) Acquisition of shares of stock of
government-owned or controlled
corporations or shares of stock
owned by the government in
private corporations;
(iii) Substitution for surety or bail
bonds for the provisional release of
accused persons, or for
performance bonds;
(iv) Security for loans with any
government financial institution,
provided the proceeds of the loans
shall be invested in an economic
enterprise, preferably in a small
and medium- scale industry, in the
same province or region as the
land for which the bonds are paid;
(v) Payment for various taxes and
fees to government: Provided, That
the use of these bonds for these
purposes will be limited to a certain
percentage of the outstanding
balance of the financial
instruments; Provided, further, That
the PARC shall determine the
percentages mentioned above;
(vi) Payment for tuition fees of the
immediate family of the original
bondholder in government
universities, colleges, trade
schools, and other institutions;
(vii) Payment for fees of the
immediate family of the original
bondholder in government
hospitals; and

(viii) Such other uses as the PARC

may from time to time allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional
insofar as it requires the owners of the expropriated properties to accept just compensation
therefor in less than money, which is the only medium of payment allowed. In support of this
contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the
property expropriated is entitled to a just compensation, which should be
neither more nor less, whenever it is possible to make the assessment, than
the money equivalent of said property. Just compensation has always been
understood to be the just and complete equivalent of the loss which the
owner of the thing expropriated has to suffer by reason of the
expropriation . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:
It is well-settled that just compensation means the equivalent for the value
of the property at the time of its taking. Anything beyond that is more, and
anything short of that is less, than just compensation. It means a fair and full
equivalent for the loss sustained, which is the measure of the indemnity, not
whatever gain would accrue to the expropriating entity. The market value of
the land taken is the just compensation to which the owner of condemned
property is entitled, the market value being that sum of money which a
person desirous, but not compelled to buy, and an owner, willing, but not
compelled to sell, would agree on as a price to be given and received for
such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been derived, the
weight of authority is also to the effect that just compensation for property expropriated is
payable only in money and not otherwise. Thus
The medium of payment of compensation is ready money or cash. The
condemnor cannot compel the owner to accept anything but money, nor can
the owner compel or require the condemnor to pay him on any other basis
than the value of the property in money at the time and in the manner
prescribed by the Constitution and the statutes. When the power of eminent
domain is resorted to, there must be a standard medium of payment,
binding upon both parties, and the law has fixed that standard as money in
cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature of
things, be regarded as a reliable and constant standard of compensation.

48

"Just compensation" for property taken by condemnation means a fair

equivalent in money, which must be paid at least within a reasonable time
after the taking, and it is not within the power of the Legislature to substitute
for such payment future obligations, bonds, or other valuable
advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been paid in
the past solely in that medium. However, we do not deal here with the traditional excercise of the

power of eminent domain. This is not an ordinary expropriation where only a specific property of
relatively limited area is sought to be taken by the State from its owner for a specific and
perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of whatever
kind as long as they are in excess of the maximum retention limits allowed their owners. This
kind of expropriation is intended for the benefit not only of a particular community or of a small
segment of the population but of the entire Filipino nation, from all levels of our society, from the
impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole
territory of this country but goes beyond in time to the foreseeable future, which it hopes to
secure and edify with the vision and the sacrifice of the present generation of Filipinos.
Generations yet to come are as involved in this program as we are today, although hopefully
only as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow
through our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the
Constitution itself that has ordained this revolution in the farms, calling for "a just distribution"
among the farmers of lands that have heretofore been the prison of their dreams but can now
become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us, we
estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of
P50 billion initially appropriated, which is already staggering as it is by our present standards.
Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they called for
agrarian reform as a top priority project of the government. It is a part of this assumption that
when they envisioned the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less conventional if more
practical method. There can be no doubt that they were aware of the financial limitations of the
government and had no illusions that there would be enough money to pay in cash and in full for
the lands they wanted to be distributed among the farmers. We may therefore assume that their
intention was to allow such manner of payment as is now provided for by the CARP Law,
particularly the payment of the balance (if the owner cannot be paid fully with money), or indeed
of the entire amount of the just compensation, with other things of value. We may also suppose
that what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27,
which was the law in force at the time they deliberated on the new Charter and with which they
presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any categorical
agreement among the members regarding the meaning to be given the concept of just
compensation as applied to the comprehensive agrarian reform program being contemplated.
There was the suggestion to "fine tune" the requirement to suit the demands of the project even
as it was also felt that they should "leave it to Congress" to determine how payment should be
made to the landowner and reimbursement required from the farmer-beneficiaries. Such
innovations as "progressive compensation" and "State-subsidized compensation" were also
proposed. In the end, however, no special definition of the just compensation for the lands to be
expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the assumptions
we are making of the general sentiments and intention of the members on the content and
manner of the payment to be made to the landowner in the light of the magnitude of the
expenditure and the limitations of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just
compensation provided for in the afore- quoted Section 18 of the CARP Law is not violative of
the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced
our decision on this issue, but after all this Court is not a cloistered institution removed from the
realities and demands of society or oblivious to the need for its enhancement. The Court is as
acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after
the frustrations and deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization and resurrecting the
spectre of discontent and dissent in the restless countryside. That is not in our view the intention
of the Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to be made
fully in money, we find further that the proportion of cash payment to the other things of value
constituting the total payment, as determined on the basis of the areas of the lands expropriated,
is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the
payment in money, primarily because the small landowner will be needing it more than the big
landowners, who can afford a bigger balance in bonds and other things of value. No less
importantly, the government financial instruments making up the balance of the payment are
"negotiable at any time." The other modes, which are likewise available to the landowner at his
option, are also not unreasonable because payment is made in shares of stock, LBP bonds,
other properties or assets, tax credits, and other things of value equivalent to the amount of just
compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and small,
not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is
devoutly hoped that these countrymen of ours, conscious as we know they are of the need for
their forebearance and even sacrifice, will not begrudge us their indispensable share in the
attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like
the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229 does not
seem to be viable any more as it appears that Section 4 of the said Order has been superseded
by Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the
earlier measure but does not provide, as the latter did, that in case of failure or refusal to register
the land, the valuation thereof shall be that given by the provincial or city assessor for tax
purposes. On the contrary, the CARP Law says that the just compensation shall be ascertained
on the basis of the factors mentioned in its Section 17 and in the manner provided for in Section
16.
The last major challenge to CARP is that the landowner is divested of his property even before
actual payment to him in full of just compensation, in contravention of a well- accepted principle
of eminent domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from the owner
to the expropriator only upon full payment of the just compensation. Jurisprudence on this
settled principle is consistent both here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the condemnor
until the judgment fixing just compensation is entered and paid, but the condemnor's title relates
back to the date on which the petition under the Eminent Domain Act, or the commissioner's
report under the Local Improvement Act, is filed. 51

... although the right to appropriate and use land taken for a canal is complete at the time of
entry, title to the property taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to
property does not pass to the condemnor until just compensation had actually been made. In
fact, the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v.
McLure, 54 it was held that "actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the State" albeit "not to the
appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York said
that the construction upon the statutes was that the fee did not vest in the State until the
payment of the compensation although the authority to enter upon and appropriate the land was
complete prior to the payment. Kennedy further said that "both on principle and authority the rule
is ... that the right to enter on and use the property is complete, as soon as the property is
actually appropriated under the authority of law for a public use, but that the title does not pass
from the owner without his consent, until just compensation has been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford absolute reassurance that no
piece of land can be finally and irrevocably taken from an unwilling owner
until compensation is paid ... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21,
1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a
family-sized farm except that "no title to the land owned by him was to be actually issued to him
unless and until he had become a full-fledged member of a duly recognized farmers'
cooperative." It was understood, however, that full payment of the just compensation also had to
be made first, conformably to the constitutional requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of October
21, 1972 of the land they acquired by virtue of Presidential Decree No. 27.
(Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said decree, after proof of
full-fledged membership in the farmers' cooperatives and full payment of just compensation.
Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease
rentals paid to the landowner by the farmer- beneficiary after October 21, 1972 (pending transfer
of ownership after full payment of just compensation), shall be considered as advance payment
for the land."

It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27,
as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This
should counter-balance the express provision in Section 6 of the said law that "the landowners
whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal
filed by the petitioners with the Office of the President has already been resolved. Although we
have said that the doctrine of exhaustion of administrative remedies need not preclude
immediate resort to judicial action, there are factual issues that have yet to be examined on the
administrative level, especially the claim that the petitioners are not covered by LOI 474 because
they do not own other agricultural lands than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners
have not yet exercised their retention rights, if any, under P.D. No. 27, the Court holds that they
are entitled to the new retention rights provided for by R.A. No. 6657, which in fact are on the
whole more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have been the subject of
bitter attack from those who point to the shortcomings of these measures and ask that they be
scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be
continuously re-examined and rehoned, that they may be sharper instruments for the better
protection of the farmer's rights. But we have to start somewhere. In the pursuit of agrarian
reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and expected
difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to
use Justice Holmes's words, "it is an experiment, as all life is an experiment," and so we learn as
we venture forward, and, if necessary, by our own mistakes. We cannot expect perfection
although we should strive for it by all means. Meantime, we struggle as best we can in freeing
the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to
the soil.
By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform
program are removed, to clear the way for the true freedom of the farmer. We may now glimpse
the day he will be released not only from want but also from the exploitation and disdain of the
past and from his own feelings of inadequacy and helplessness. At last his servitude will be
ended forever. At last the farm on which he toils will be his farm. It will be his portion of the
Mother Earth that will give him not only the staff of life but also the joy of living. And where once
it bred for him only deep despair, now can he see in it the fruition of his hopes for a more fulfilling
future. Now at last can he banish from his small plot of earth his insecurities and dark
resentments and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to
the government on receipt by the landowner of the corresponding payment or the deposit by the
DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also
remains with the landowner. 57 No outright change of ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily transferring
title before the land is fully paid for must also be rejected.

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229
are SUSTAINED against all the constitutional objections raised in the herein
petitions.
2. Title to all expropriated properties shall be transferred to the State only
upon full payment of compensation to their respective owners.

3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are
retained and recognized.
4. Landowners who were unable to exercise their rights of retention under
P.D. No. 27 shall enjoy the retention rights granted by R.A. No. 6657 under
the conditions therein prescribed.
5. Subject to the above-mentioned rulings all the petitions are DISMISSED,
without pronouncement as to costs.
SO ORDERED.

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 product-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 twentyfive 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.
xxx xxx xxx

G.R. No. 98332 January 16, 1995

MINERS ASSOCIATION OF THE PHILIPPINES, INC., petitioner,
vs.
HON. FULGENCIO S. FACTORAN, JR., Secretary of Environment and Natural Resources,
and JOEL D. MUYCO, Director of Mines and Geosciences Bureau, respondents.

The President may enter into agreements with foreign-owned corporations

involving either technical or financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by law, based on
real contributions to the economic growth and general welfare of the
country. In such agreements, the State shall promote the development and
use of local scientific and technical resources.
The President shall notify the Congress of every contract entered into in
accordance with this provision, within thirty days from its execution.
(Emphasis supplied)

ROMERO, J.:
The instant petition seeks a ruling from this Court on the validity of two Administrative Orders
issued by the Secretary of the Department of Environment and Natural Resources to carry out
the provisions of certain Executive Orders promulgated by the President in the lawful exercise of
legislative powers.
Herein controversy was precipitated by the change introduced by Article XII, Section 2 of the
1987 Constitution on the system of exploration, development and utilization of the country's
natural resources. No longer is the utilization of inalienable lands of public domain through
"license, concession or lease" under the 1935 and 1973 Constitutions 1 allowed under the 1987
Constitution.
The adoption of the concept of jura regalia 2 that all natural resources are owned by the State
embodied in the 1935, 1973 and 1987 Constitutions, as well as the recognition of the importance
of the country's natural resources, not only for national economic development, but also for its
security and national
defense, 3 ushered in the adoption of the constitutional policy of "full control and supervision by
the State" in the exploration, development and utilization of the country's natural resources. The
options open to the State are through direct undertaking or by entering into co-production, joint
venture; or production-sharing agreements, or by entering into agreement with foreign-owned
corporations for large-scale exploration, development and utilization.
Article XII, Section 2 of the 1987 Constitution provides:
Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum,
and other mineral oils, all forces of potential energy, fisheries, forests or

Pursuant to the mandate of the above-quoted provision, legislative acts 4 were successively
issued by the President in the exercise of her legislative
power. 5
To implement said legislative acts, the Secretary of the Department of Environment and Natural
Resources (DENR) in turn promulgated Administrative Order Nos. 57 and 82, the validity and
constitutionality of which are being challenged in this petition.
On July 10, 1987, President Corazon C. Aquino, in the exercise of her then legislative powers
under Article II, Section 1 of the Provisional Constitution and Article XIII, Section 6 of the 1987
Constitution, promulgated Executive Order No. 211 prescribing the interim procedures in the
processing and approval of applications for the exploration, development and utilization of
minerals pursuant to the 1987 Constitution in order to ensure the continuity of mining operations
and activities and to hasten the development of mineral resources. The pertinent provisions read
as follows:
Sec. 1. Existing mining permits, licenses, leases and other mining grants
issued by the Department of Environment and Natural Resources and
Bureau of Mines and Geo-Sciences, including existing operating
agreements and mining service contracts, shall continue and remain in full
force and effect, subject to the same terms and conditions as originally
granted and/or approved.
Sec. 2. Applications for the exploration, development and utilization of
mineral resources, including renewal applications for approval of operating
agreements and mining service contracts, shall be accepted and processed

and may be approved; concomitantly thereto, declarations of locations and

all other kinds of mining applications shall be accepted and registered by
the Bureau of Mines and Geo-Sciences.
Sec. 3. The processing, evaluation and approval of all mining applications,
declarations of locations, operating agreements and service contracts as
provided for in Section 2 above, shall be governed by Presidential Decree
No. 463, as amended, other existing mining laws and their implementing
rules and regulations: Provided, however, that the privileges granted, as
well as the terms and conditions thereof shall be subject to any and all
modifications or alterations which Congress may adopt pursuant to Section
2, Article XII of the 1987 Constitution.
On July 25, 1987, President Aquino likewise promulgated Executive Order No. 279 authorizing
the DENR Secretary to negotiate and conclude joint venture, co-production, or productionsharing agreements for the exploration, development and utilization of mineral resources, and
prescribing the guidelines for such agreements and those agreements involving technical or
financial assistance by foreign-owned corporations for large-scale exploration, development, and
utilization of minerals. The pertinent provisions relevant to this petition are as follows:
Sec. 1. The Secretary of the Department of Environment and Natural
Resources (hereinafter referred to as "the Secretary") is hereby authorized
to negotiate and enter into, for and in behalf of the Government, joint
venture, co-production, or production-sharing agreements for the
exploration, development, and utilization of mineral resources with any
Filipino citizens, or corporation or association at least sixty percent (60%) of
whose capital is owned by Filipino citizens. Such joint venture, coproduction, or production-sharing agreements may be for a period not
exceeding twenty-five years, renewable for not more than twenty-five years,
and shall include the minimum terms and conditions prescribed in Section 2
hereof. In the execution of a joint venture, co-production or production
agreements, the contracting parties, including the Government, may
consolidate two or more contiguous or geologically related mining claims
or leases and consider them as one contract area for purposes of
determining the subject of the joint venture, co-production, or productionsharing agreement.
xxx xxx xxx
Sec. 6. The Secretary shall promulgate such supplementary rules and
regulations as may be necessary to effectively implement the provisions of
this Executive Order.
Sec. 7. All provisions of Presidential Decree No. 463, as amended, other
existing mining laws, and their implementing rules and regulations, or parts
thereof, which are not inconsistent with the provisions of this Executive
Order, shall continue in force and effect.
Pursuant to Section 6 of Executive Order No. 279, the DENR Secretary issued on June 23, 1989
DENR Administrative Order No. 57, series of 1989, captioned "Guidelines of Mineral Production
Sharing Agreement under Executive Order No. 279." 6 Under the transitory provision of said
DENR Administrative Order No. 57, embodied in its Article 9, all existing mining leases or
agreements which were granted after the effectivity of the 1987 Constitution pursuant to
Executive Order No. 211, except small scale mining leases and those pertaining to sand and

gravel and quarry resources covering an area of twenty (20) hectares or less, shall be converted
into production-sharing agreements within one (1) year from the effectivity of these guidelines.
On November 20, 1980, the Secretary of the DENR Administrative Order No. 82, series of 1990,
laying down the "Procedural Guidelines on the Award of Mineral Production Sharing Agreement
(MPSA) through Negotiation." 7
Section 3 of the aforementioned DENR Administrative Order No. 82 enumerates the persons or
entities required to submit Letter of Intent (LOIs) and Mineral Production Sharing Agreement
(MPSAs) within two (2) years from the effectivity of DENR Administrative Order No. 57 or until
July 17, 1991. Failure to do so within the prescribed period shall cause the abandonment of
mining, quarry and sand and gravel claims. Section 3 of DENR Administrative Order No. 82
provides:
Sec. 3. Submission of Letter of Intent (LOIs) and MPSAs). The following
shall submit their LOIs and MPSAs within two (2) years from the effectivity
of DENR A.O. 57 or until July 17, 1991.
i. Declaration of Location (DOL) holders, mining lease applicants,
exploration permitees, quarry applicants and other mining applicants whose
mining/quarry applications have not been perfected prior to the effectivity of
DENR Administrative Order No. 57.
ii. All holders of DOL acquired after the effectivity of DENR A.O. No. 57.
iii. Holders of mining leases or similar agreements which were granted after
(the) effectivity of 1987 Constitution.
Failure to submit letters of intent and MPSA applications/proposals within
the prescribed period shall cause the abandonment of mining, quarry and
sand and gravel claims.
The issuance and the impeding implementation by the DENR of Administrative Order Nos. 57
and 82 after their respective effectivity dates compelled the Miners Association of the
Philippines, Inc. 8 to file the instant petition assailing their validity and constitutionality before this
Court.
In this petition for certiorari, petitioner Miners Association of the Philippines, Inc. mainly contends
that respondent Secretary of DENR issued both Administrative Order Nos. 57 and 82 in excess
of his rule-making power under Section 6 of Executive Order No. 279. On the assumption that
the questioned administrative orders do not conform with Executive Order Nos. 211 and 279,
petitioner contends that both orders violate the
non-impairment of contract provision under Article III, Section 10 of the 1987 Constitution on the
ground that Administrative Order No. 57 unduly pre-terminates existing mining agreements and
automatically converts them into production-sharing agreements within one (1) year from its
effectivity date. On the other hand, Administrative Order No. 82 declares that failure to submit
Letters of Intent and Mineral Production-Sharing Agreements within two (2) years from the date
of effectivity of said guideline or on July 17, 1991 shall cause the abandonment of their mining,
quarry and sand gravel permits.
On July 2, 1991, the Court, acting on petitioner's urgent ex-parte petition for issuance of a
restraining order/preliminary injunction, issued a Temporary Restraining Order, upon posting of a

P500,000.00 bond, enjoining the enforcement and implementation of DENR Administrative

Order Nos. 57 and 82, as amended, Series of 1989 and 1990, respectively. 9

General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660;

Deluao v. Casteel, L-21906, August 29, 1969, 29 SCRA 350).

On November 13, 1991, Continental Marble Corporation, 10 thru its President, Felipe A. David,
sought to intervene 11 in this case alleging that because of the temporary order issued by the
Court , the DENR, Regional Office No. 3 in San Fernando, Pampanga refused to renew its
Mines Temporary Permit after it expired on July 31, 1991. Claiming that its rights and interests
are prejudicially affected by the implementation of DENR Administrative Order Nos. 57 and 82, it
joined petitioner herein in seeking to annul Administrative Order Nos. 57 and 82 and prayed that
the DENR, Regional Office No. 3 be ordered to issue a Mines Temporary Permit in its favor to
enable it to operate during the pendency of the suit.

The rule-making power must be confined to details for regulating the mode
or proceeding to carry into effect the law as it has been enacted. The power
cannot be extended to amending or expanding the statutory requirements or
to embrace matters not covered by the statute. Rules that subvert the
statute cannot be sanctioned (University of Santo Tomas v. Board of Tax
Appeals, 93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations,
see Collector of Internal Revenue v. Villaflor, 69 Phil. 319; Wise & Co. v.
Meer, 78 Phil. 655, 676; Del Mar v. Phil. Veterans Administration, L-27299,
June 27, 1973, 51 SCRA 340, 349).

Public respondents were acquired to comment on the Continental Marble Corporation's petition
for intervention in the resolution of November 28, 1991. 12
Now to the main petition. If its argued that Administrative Order Nos. 57 and 82 have the effect
of repealing or abrogating existing mining laws 13 which are not inconsistent with the provisions
of Executive Order No. 279. Invoking Section 7 of said Executive Order No. 279, 14 petitioner
maintains that respondent DENR Secretary cannot provide guidelines such as Administrative
Order Nos. 57 and 82 which are inconsistent with the provisions of Executive Order No. 279
because both Executive Order Nos. 211 and 279 merely reiterated the acceptance and
registration of declarations of location and all other kinds of mining applications by the Bureau of
Mines and Geo-Sciences under the provisions of Presidential Decree No. 463, as amended,
until Congress opts to modify or alter the same.
In other words, petitioner would have us rule that DENR Administrative Order Nos. 57 and 82
issued by the DENR Secretary in the exercise of his rule-making power are tainted with invalidity
inasmuch as both contravene or subvert the provisions of Executive Order Nos. 211 and 279 or
embrace matters not covered, nor intended to be covered, by the aforesaid laws.
We disagree.
We reiterate the principle that the power of administrative officials to promulgate rules and
regulations in the implementation of a statute is necessarily limited only to carrying into effect
what is provided in the legislative enactment. The principle was enunciated as early as 1908 in
the case of United States v. Barrias. 15 The scope of the exercise of such rule-making power was
clearly expressed in the case of United States v. Tupasi Molina, 16 decided in 1914, thus: "Of
course, the regulations adopted under legislative authority by a particular department must be in
harmony with the provisions of the law, and for the sole purpose of carrying into effect its general
provisions. By such regulations, of course, the law itself can not be extended. So long, however,
as the regulations relate solely to carrying into effect its general provisions. By such regulations,
of course, the law itself can not be extended. So long, however, as the regulations relate solely
to carrying into effect the provision of the law, they are valid."
Recently, the case of People v. Maceren 17 gave a brief delienation of the scope of said power of
administrative officials:
Administrative regulations adopted under legislative authority by a particular
department must be in harmony with the provisions of the law, and should
be for the sole purpose of carrying into effect its general provision. By such
regulations, of course, the law itself cannot be extended (U.S. v. Tupasi
Molina, supra). An administrative agency cannot amend an act of Congress
(Santos vs. Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the Board
of Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs.

xxx xxx xxx

. . . The rule or regulation should be within the scope of the statutory
authority granted by the legislature to the administrative agency (Davis,
Administrative Law, p. 194, 197, cited in Victorias Milling Co., Inc. v. Social
Security Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule or regulation
issued to implement said law, the basic prevails because said rule or
regulations cannot go beyond the terms and provisions of the basic law
(People v. Lim, 108 Phil. 1091).
Considering that administrative rules draw life from the statute which they seek to implement, it
is obvious that the spring cannot rise higher than its source. We now examine petitioner's
argument that DENR Administrative Order Nos. 57 and 82 contravene Executive Order Nos. 211
and 279 as both operate to repeal or abrogate Presidential Decree No. 463, as amended, and
other mining laws allegedly acknowledged as the principal law under Executive Order Nos. 211
and 279.
Petitioner's insistence on the application of Presidential Decree No. 463, as amended, as the
governing law on the acceptance and approval of declarations of location and all other kinds of
applications for the exploration, development, and utilization of mineral resources pursuant to
Executive Order No. 211, is erroneous. Presidential Decree No. 463, as amended, pertains to
the old system of exploration, development and utilization of natural resources through "license,
concession or lease" which, however, has been disallowed by Article XII, Section 2 of the 1987
Constitution. By virtue of the said constitutional mandate and its implementing law, Executive
Order No. 279 which superseded Executive Order No. 211, the provisions dealing on "license,
concession or lease" of mineral resources under Presidential Decree No. 463, as amended, and
other existing mining laws are deemed repealed and, therefore, ceased to operate as the
governing law. In other words, in all other areas of administration and management of mineral
lands, the provisions of Presidential Decree No. 463, as amended, and other existing mining
laws, still govern. Section 7 of Executive Order No. 279 provides, thus:
Sec. 7. All provisions of Presidential Decree No. 463, as amended, other
existing mining laws, and their implementing rules and regulations, or parts
thereof, which are not inconsistent with the provisions of this Executive
Order, shall continue in force and effect.
Specifically, the provisions of Presidential Decree No. 463, as amended, on lease of mining
claims under Chapter VIII, quarry permits on privately-owned lands of quarry license on public
lands under Chapter XIII and other related provisions on lease, license and permits are not only

inconsistent with the raison d'etre for which Executive Order No. 279 was passed, but
contravene the express mandate of Article XII, Section 2 of the 1987 Constitution. It force and
effectivity is thus foreclosed.

natural resources cannot be alienated and in respect to

[alienable] lands of the public domain, private
corporations with the required ownership by Filipino
citizens can only lease the same. Necessarily, insofar
as other natural resources are concerned, it would only
be the State which can exploit, develop, explore and
utilize the same. However, the State may enter into a
joint venture, co-production or production-sharing. Is
that not correct?

Upon the effectivity of the 1987 Constitution on February 2, 1987, 18 the State assumed a more
dynamic role in the exploration, development and utilization of the natural resources of the
country. Article XII, Section 2 of the said Charter explicitly ordains that the exploration,
development and utilization of natural resources shall be under the full control and supervision of
the State. Consonant therewith, the exploration, development and utilization of natural resources
may be undertaken by means of direct act of the State, or it may opt to enter into co-production,
joint venture, or production-sharing agreements, or it may enter into agreements with foreignowned corporations involving either technical or financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum, and other mineral oils according to the
general terms and conditions provided by law, based on real contributions to the economic
growth and general welfare of the country.

MR. VILLEGAS: Yes.

MR. DAVIDE: Consequently, henceforth upon, the
approval of this Constitution, no timber or forest
concession, permits or authorization can be exclusively
granted to any citizen of the Philippines nor to any
corporation qualified to acquire lands of the public
domain?

Given these considerations, there is no clear showing that respondent DENR Secretary has
transcended the bounds demarcated by Executive Order No. 279 for the exercise of his rulemaking power tantamount to a grave abuse of discretion. Section 6 of Executive Order No. 279
specifically authorizes said official to promulgate such supplementary rules and regulations as
may be necessary to effectively implement the provisions thereof. Moreover, the subject sought
to be governed and regulated by the questioned orders is germane to the objects and purposes
of Executive Order No. 279 specifically issued to carry out the mandate of Article XII, Section 2
of the 1987 Constitution.

MR. VILLEGAS: Would Commissioner Monsod like to

comment on that? I think his answer is "yes."
MR. DAVIDE: So, what will happen now license or
concessions earlier granted by the Philippine
government to private corporations or to Filipino
citizens? Would they be deemed repealed?

Petitioner likewise maintains that Administrative Order No. 57, in relation to Administrative Order
No. 82, impairs vested rights as to violate the non-impairment of contract doctrine guaranteed
under Article III, Section 10 of the 1987 Constitution because Article 9 of Administrative Order
No. 57 unduly pre-terminates and automatically converts mining leases and other mining
agreements into production-sharing agreements within one (1) year from effectivity of said
guideline, while Section 3 of Administrative Order No. 82, declares that failure to submit Letters
of Intent (LOIs) and MPSAs within two (2) years from the effectivity of Administrative Order No.
57 or until July 17, 1991 shall cause the abandonment of mining, quarry, and sand gravel
permits.

MR. VILLEGAS: This is not applied retroactively. They

will be respected.
MR. DAVIDE: In effect, they will be deemed repealed?
MR. VILLEGAS: No. (Emphasis supplied)

In Support of the above contention, it is argued by petitioner that Executive Order No. 279 does
not contemplate automatic conversion of mining lease agreements into mining productionsharing agreement as provided under Article 9, Administrative Order No. 57 and/or the
consequent abandonment of mining claims for failure to submit LOIs and MPSAs under Section
3, Administrative Order No. 82 because Section 1 of said Executive Order No. 279 empowers
the DENR Secretary to negotiate and enter into voluntary agreements which must set forth the
minimum terms and conditions provided under Section 2 thereof. Moreover, petitioner contends
that the power to regulate and enter into mining agreements does not include the power to
preterminate existing mining lease agreements.
To begin with, we dispel the impression created by petitioner's argument that the questioned
administrative orders unduly preterminate existing mining leases in general. A distinction which
spells a real difference must be drawn. Article XII, Section 2 of the 1987 Constitution does not
apply retroactively to "license, concession or lease" granted by the government under the 1973
Constitution or before the effectivity of the 1987 Constitution on February 2, 1987. The intent to
apply prospectively said constitutional provision was stressed during the deliberations in the
Constitutional Commission, 19 thus:
MR. DAVIDE: Under the proposal, I notice that except
for the [inalienable] lands of the public domain, all other

During the transition period or after the effectivity of the 1987 Constitution on February 2, 1987
until the first Congress under said Constitution was convened on July 27, 1987, two (2)
successive laws, Executive Order Nos. 211 and 279, were promulgated to govern the
processing and approval of applications for the exploration, development and utilization of
minerals. To carry out the purposes of said laws, the questioned Administrative Order Nos. 57
and 82, now being assailed, were issued by the DENR Secretary.
Article 9 of Administrative Order No. 57 provides:
ARTICLE 9
TRANSITORY PROVISION
9.1. All existing mining leases or agreements which were granted after the
effectivity of the 1987 Constitution pursuant to Executive Order No. 211,
except small scale mining leases and those pertaining to sand and gravel
and quarry resources covering an area of twenty (20) hectares or less shall
be subject to these guidelines. All such leases or agreements shall be

converted into production sharing agreement within one (1) year from the
effectivity of these guidelines. However, any minimum firm which has
established mining rights under Presidential Decree 463 or other laws may
avail of the provisions of EO 279 by following the procedures set down in
this document.
It is clear from the aforestated provision that Administrative Order No. 57 applies only to all
existing mining leases or agreements which were granted after the effectivity of the 1987
Constitution pursuant to Executive Order No. 211. It bears mention that under the text of
Executive Order No. 211, there is a reservation clause which provides that the privileges as well
as the terms and conditions of all existing mining leases or agreements granted after the
effectivity of the 1987 Constitution pursuant to Executive Order No. 211, shall be subject to any
and all modifications or alterations which Congress may adopt pursuant to Article XII, Section 2
of the 1987 Constitution. Hence, the strictures of the
non-impairment of contract clause under Article III, Section 10 of the 1987 Constitution 20 do not
apply to the aforesaid leases or agreements granted after the effectivity of the 1987 Constitution,
pursuant to Executive Order No. 211. They can be amended, modified or altered by a statute
passed by Congress to achieve the purposes of Article XII, Section 2 of the 1987 Constitution.
Clearly, Executive Order No. 279 issued on July 25, 1987 by President Corazon C. Aquino in the
exercise of her legislative power has the force and effect of a statute or law passed by
Congress. As such, it validly modified or altered the privileges granted, as well as the terms and
conditions of mining leases and agreements under Executive Order No. 211 after the effectivity
of the 1987 Constitution by authorizing the DENR Secretary to negotiate and conclude joint
venture, co-production, or production-sharing agreements for the exploration, development and
utilization of mineral resources and prescribing the guidelines for such agreements and those
agreements involving technical or financial assistance by foreign-owned corporations for largescale exploration, development, and utilization of minerals.
Well -settled is the rule, however, that regardless of the reservation clause, mining leases or
agreements granted by the State, such as those granted pursuant to Executive Order No. 211
referred to this petition, are subject to alterations through a reasonable exercise of the police
power of the State. In the 1950 case of Ongsiako v. Gamboa, 21 where the constitutionality of
Republic Act No. 34 changing the 50-50 sharecropping system in existing agricultural tenancy
contracts to 55-45 in favor of tenants was challenged, the Court, upholding the constitutionality
of the law, emphasized the superiority of the police power of the State over the sanctity of this
contract:
The prohibition contained in constitutional provisions against: impairing the obligation of
contracts is not an absolute one and it is not to be read with literal exactness like a mathematical
formula. Such provisions are restricted to contracts which respect property, or some object or
value, and confer rights which may be asserted in a court of justice, and have no application to
statute relating to public subjects within the domain of the general legislative powers of the
State, and involving the public rights and public welfare of the entire community affected by it.
They do not prevent a proper exercise by the State of its police powers. By enacting regulations
reasonably necessary to secure the health, safety, morals, comfort, or general welfare of the
community, even the contracts may thereby be affected; for such matter can not be placed by
contract beyond the power of the State shall regulates and control them. 22
In Ramas v. CAR and Ramos 23 where the constitutionality of Section 14 of Republic Act No.
1199 authorizing the tenants to charge from share to leasehold tenancy was challenged on the
ground that it impairs the obligation of contracts, the Court ruled that obligations of contracts
must yield to a proper exercise of the police power when such power is exercised to preserve
the security of the State and the means adopted are reasonably adapted to the accomplishment
of that end and are, therefore, not arbitrary or oppressive.

The economic policy on the exploration, development and utilization of the country's natural
resources under Article XII, Section 2 of the 1987 Constitution could not be any clearer. As
enunciated in Article XII, Section 1 of the 1987 Constitution, the exploration, development and
utilization of natural resources under the new system mandated in Section 2, is geared towards
a more equitable distribution of opportunities, income, and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the people; and an
expanding productivity as the key to raising the quality of life for all, especially the
underprivileged.
The exploration, development and utilization of the country's natural resources are matters vital
to the public interest and the general welfare of the people. The recognition of the importance of
the country's natural resources was expressed as early as the 1984 Constitutional Convention.
In connection therewith, the 1986 U.P. Constitution Project observed: "The 1984 Constitutional
Convention recognized the importance of our natural resources not only for its security and
national defense. Our natural resources which constitute the exclusive heritage of the Filipino
nation, should be preserved for those under the sovereign authority of that nation and for their
prosperity. This will ensure the country's survival as a viable and sovereign republic."
Accordingly, the State, in the exercise of its police power in this regard, may not be precluded by
the constitutional restriction on non-impairment of contract from altering, modifying and
amending the mining leases or agreements granted under Presidential Decree No. 463, as
amended, pursuant to Executive Order No. 211. Police Power, being co-extensive with the
necessities of the case and the demands of public interest; extends to all the vital public needs.
The passage of Executive Order No. 279 which superseded Executive Order No. 211 provided
legal basis for the DENR Secretary to carry into effect the mandate of Article XII, Section 2 of the
1987 Constitution.
Nowhere in Administrative Order No. 57 is there any provision which would lead us to conclude
that the questioned order authorizes the automatic conversion of mining leases and agreements
granted after the effectivity of the 1987 Constitution, pursuant to Executive Order No. 211, to
production-sharing agreements. The provision in Article 9 of Administrative Order No. 57 that "all
such leases or agreements shall be converted into production sharing agreements within one (1)
year from the effectivity of these guidelines" could not possibility contemplate a unilateral
declaration on the part of the Government that all existing mining leases and agreements are
automatically converted into
production-sharing agreements. On the contrary, the use of the term "production-sharing
agreement" if they are so minded. Negotiation negates compulsion or automatic conversion as
suggested by petitioner in the instant petition. A mineral production-sharing agreement (MPSA)
requires a meeting of the minds of the parties after negotiations arrived at in good faith and in
accordance with the procedure laid down in the subsequent Administrative Order No. 82.
We, therefore, rule that the questioned administrative orders are reasonably directed to the
accomplishment of the purposes of the law under which they were issued and were intended to
secure the paramount interest of the public, their economic growth and welfare. The validity and
constitutionality of Administrative Order Nos. 57 and 82 must be sustained, and their force and
effect upheld.
We now, proceed to the petition-in-intervention. Under Section 2, Rule 12 of the Revised Rules
of Court, an intervention in a case is proper when the intervenor has a "legal interest in the
matter in litigation, or in the success of either of the parties, or an interest against both, or when
he is so situated as to be adversely affected by a distribution or other disposition of property in
the custody of the court or of an officer thereof. "Continental Marble Corporation has not
sufficiently shown that it falls under any of the categories mentioned above. The refusal of the
DENR, Regional Office No. 3, San Fernando, Pampanga to renew its Mines Temporary Permit
does not justify such an intervention by Continental Marble Corporation for the purpose of
obtaining a directive from this Court for the issuance of said permit. Whether or not Continental

Marble matter best addressed to the appropriate government body but certainly, not through this
Court. Intervention is hereby DENIED.
WHEREFORE, the petition is DISMISSED for lack of merit. The Temporary Restraining Order
issued on July 2, 1991 is hereby LIFTED.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Bellosillo, Melo, Quiason, Puno,
Vitug, Kapunan and Mendoza, JJ., concur.

WHEREFORE, judgment is hereby rendered as follows:

1. Declaring that the cancellation of License No. 33 was done without jurisdiction and
in gross violation of the Constitutional right of the petitioners against deprivation of
their property rights without due process of law and is hereby set aside.
2. Declaring that the petitioners right to continue the exploitation of the marble
deposits in the area covered by License No. 33 is maintained for the duration of the
period of its life of twenty-five (25) years, less three (3) years of continuous operation
before License No. 33 was cancelled, unless sooner terminated for violation of any of
the conditions specified therein, with due process.
3. Making the Writ of preliminary injunction and the Writ of Preliminary Mandatory
Injunction issued as permanent.

[G.R. No. 149927. March 30, 2004]

4. Ordering the cancellation of the bond filed by the Petitioners in the sum of 1 Million.

REPUBLIC OF THE PHILIPPINES, Represented by the Department of Environment and

Natural Resources (DENR) Under then Minister ERNESTO R. MACEDA; and
Former Government Officials CATALINO MACARAIG, FULGENCIO S.
FACTORAN, ANGEL C. ALCALA, BEN MALAYANG, ROBERTO PAGDANGANAN,
MARIANO Z. VALERA and ROMULO SAN JUAN, petitioners, vs. ROSEMOOR
MINING AND DEVELOPMENT CORPORATION, PEDRO DEL CONCHA,
and ALEJANDRO and RUFO DE GUZMAN, respondents.
DECISION

5. Allowing the petitioners to present evidence in support of the damages they claim
to have suffered from, as a consequence of the summary cancellation of License No.
33 pursuant to the agreement of the parties on such dates as maybe set by the Court;
and
6. Denying for lack of merit the motions for contempt, it appearing that actuations of
the respondents were not contumacious and intended to delay the proceedings or
undermine the integrity of the Court.
No pronouncement yet as to costs.[5]

PANGANIBAN, J.:
A mining license that contravenes a mandatory provision of the law under which it is
granted is void. Being a mere privilege, a license does not vest absolute rights in the
holder. Thus, without offending the due process and the non-impairment clauses of the
Constitution, it can be revoked by the State in the public interest.
The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to nullify
the May 29, 2001 Decision [2] and the September 6, 2001 Resolution [3] of the Court of Appeals
(CA) in CA-GR SP No. 46878. The CA disposed as follows:
WHEREFORE, premises considered, the appealed Decision is hereby AFFIRMED in toto.

[4]

The questioned Resolution denied petitioners Motion for Reconsideration.

On the other hand, trial courts Decision, which was affirmed by the CA, had disposed as
follows:

The Facts
The CA narrated the facts as follows:
The four (4) petitioners, namely, Dr. Lourdes S. Pascual, Dr. Pedro De la Concha, Alejandro De
La Concha, and Rufo De Guzman, after having been granted permission to prospect for marble
deposits in the mountains of Biak-na-Bato, San Miguel, Bulacan, succeeded in discovering
marble deposits of high quality and in commercial quantities in Mount Mabio which forms part of
the Biak-na-Bato mountain range.
Having succeeded in discovering said marble deposits, and as a result of their tedious efforts
and substantial expenses, the petitioners applied with the Bureau of Mines, now Mines and
Geosciences Bureau, for the issuance of the corresponding license to exploit said marble
deposits.
xxx

xxx

xxx

After compliance with numerous required conditions, License No. 33 was issued by the Bureau
of Mines in favor of the herein petitioners.

xxx

xxx

xxx

Shortly after Respondent Ernesto R. Maceda was appointed Minister of the Department of
Energy and Natural Resources (DENR), petitioners License No. 33 was cancelled by him
through his letter to ROSEMOOR MINING AND DEVELOPMENT CORPORATION dated
September 6, 1986 for the reasons stated therein. Because of the aforesaid cancellation, the
original petition was filed and later substituted by the petitioners AMENDED PETITION dated
August 21, 1991 to assail the same.
Also after due hearing, the prayer for injunctive relief was granted in the Order of this Court
dated February 28, 1992. Accordingly, the corresponding preliminary writs were issued after the
petitioners filed their injunction bond in the amount of ONE MILLION PESOS (P1,000,000.00).
xxx

xxx

xxx

On September 27, 1996, the trial court rendered the herein questioned decision.[6]
The trial court ruled that the privilege granted under respondents license had already
ripened into a property right, which was protected under the due process clause of the
Constitution. Such right was supposedly violated when the license was cancelled without notice
and hearing. The cancellation was said to be unjustified, because the area that could be
covered by the four separate applications of respondents was 400 hectares. Finally, according
to the RTC, Proclamation No. 84, which confirmed the cancellation of the license, was an ex
post facto law; as such, it violated Section 3 of Article XVIII of the 1987 Constitution.
On appeal to the Court of Appeals, herein petitioners asked whether PD 463 or the
Mineral Resources Development Decree of 1974 had been violated by the award of the
330.3062 hectares to respondents in accordance with Proclamation No. 2204. They also
questioned the validity of the cancellation of respondents Quarry License/Permit (QLP) No. 33.
Ruling of the Court of Appeals
Sustaining the trial court in toto, the CA held that the grant of the quarry license covering
330.3062 hectares to respondents was authorized by law, because the license was embraced
by four (4) separate applications -- each for an area of 81 hectares. Moreover, it held that the
limitation under Presidential Decree No. 463 -- that a quarry license should cover not more than
100 hectares in any given province -- was supplanted by Republic Act No. 7942, [7] which
increased the mining areas allowed under PD 463.
It also ruled that the cancellation of respondents license without notice and hearing was
tantamount to a deprivation of property without due process of law. It added that under the
clause in the Constitution dealing with the non-impairment of obligations and contracts,
respondents license must be respected by the State.
Hence, this Petition.[8]
Issues

Petitioners submit the following issues for the Courts consideration:

(1) [W]hether or not QLP No. 33 was issued in blatant contravention of Section 69, P.D. No.
463; and (2) whether or not Proclamation No. 84 issued by then President Corazon Aquino is
valid. The corollary issue is whether or not the Constitutional prohibition against ex post facto
law applies to Proclamation No. 84[9]
The Courts Ruling
The Petition has merit.
First Issue:
Validity of License
Respondents contend that the Petition has no legal basis, because PD 463 has already
been repealed.[10] In effect, they ask for the dismissal of the Petition on the ground of mootness.
PD 463, as amended, pertained to the old system of exploration, development and
utilization of natural resources through licenses, concessions or leases. [11] While these
arrangements were provided under the 1935[12] and the 1973[13] Constitutions, they have been
omitted by Section 2 of Article XII of the 1987 Constitution.[14]
With the shift of constitutional policy toward full control and supervision of the State over
natural resources, the Court in Miners Association of the Philippines v. Factoran Jr. [15] declared
the provisions of PD 463 as contrary to or violative of the express mandate of the 1987
Constitution. The said provisions dealt with the lease of mining claims; quarry permits or
licenses covering privately owned or public lands; and other related provisions on lease, licenses
and permits.
RA 7942 or the Philippine Mining Act of 1995 embodies the new constitutional mandate. It
has repealed or amended all laws, executive orders, presidential decrees, rules and regulations
-- or parts thereof -- that are inconsistent with any of its provisions.[16]
It is relevant to state, however, that Section 2 of Article XII of the 1987 Constitution does
not apply retroactively to a license, concession or lease granted by the government under the
1973 Constitution or before the effectivity of the 1987 Constitution on February 2, 1987. [17] As
noted in Miners Association of the Philippines v. Factoran Jr., the deliberations of the
Constitutional Commission[18] emphasized the intent to apply the said constitutional provision
prospectively.
While RA 7942 has expressly repealed provisions of mining laws that are inconsistent with
its own, it nonetheless respects previously issued valid and existing licenses, as follows:
SECTION 5.
Mineral Reservations. When the national interest so requires, such as
when there is a need to preserve strategic raw materials for industries critical to national
development, or certain minerals for scientific, cultural or ecological value, the President may

establish mineral reservations upon the recommendation of the Director through the
Secretary. Mining operations in existing mineral reservations and such other reservations as
may thereafter be established, shall be undertaken by the Department or through a contractor:
Provided, That a small scale-mining cooperative covered by Republic Act No. 7076 shall be
given preferential right to apply for a small-scale mining agreement for a maximum aggregate
area of twenty-five percent (25%) of such mineral reservation, subject to valid existing
mining/quarrying rights as provided under Section 112 Chapter XX hereof. All submerged lands
within the contiguous zone and in the exclusive economic zone of the Philippines are hereby
declared to be mineral reservations.
x x x

xxx

xxx

SECTION 7.
Periodic Review of Existing Mineral Reservations. The Secretary shall
periodically review existing mineral reservations for the purpose of determining whether their
continued existence is consistent with the national interest, and upon his recommendation, the
President may, by proclamation, alter or modify the boundaries thereof or revert the same to the
public domain without prejudice to prior existing rights.
SECTION 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.
SECTION 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;
(b)
Near or under public or private buildings, cemeteries, archeological and historic sites,
bridges, highways, waterways, railroads, reservoirs, dams or other infrastructure projects, public
or private works including plantations or valuable crops, except upon written consent of the
government agency or private entity concerned;
(c)

In areas covered by valid and existing mining rights;

(d)

In areas expressly prohibited by law;

(e)
In areas covered by small-scale miners as defined by law unless with prior consent of
the small-scale miners, in which case a royalty payment upon the utilization of minerals shall be
agreed upon by the parties, said royalty forming a trust fund for the socioeconomic development
of the community concerned; and

National Integrated Protected Areas System (NIPAS) under Republic Act No. 7586, Department
Administrative Order No. 25, series of 1992 and other laws.
SECTION 112.
Non-impairment of Existing Mining/ Quarrying Rights. All valid and
existing mining lease contracts, permits/licenses, leases pending renewal, mineral productionsharing agreements granted under Executive Order No. 279, at the date of effectivity of this Act,
shall remain valid, shall not be impaired, and shall be recognized by the Government: Provided,
That the provisions of Chapter XIV on government share in mineral production-sharing
agreement and of Chapter XVI on incentives of this Act shall immediately govern and apply to a
mining lessee or contractor unless the mining lessee or contractor indicates his intention to the
secretary, in writing, not to avail of said provisions: Provided, further, That no renewal of mining
lease contracts shall be made after the expiration of its term: Provided, finally, That such leases,
production-sharing agreements, financial or technical assistance agreements shall comply with
the applicable provisions of this Act and its implementing rules and regulations.
SECTION 113.
Recognition of Valid and Existing Mining Claims and Lease/Quarry
Application. Holders of valid and existing mining claims, lease/quarry applications shall be
given preferential rights to enter into any mode of mineral agreement with the government within
two (2) years from the promulgation of the rules and regulations implementing this
Act. (Underscoring supplied)
Section 3(p) of RA 7942 defines an existing mining/quarrying right as a valid and
subsisting mining claim or permit or quarry permit or any mining lease contract or agreement
covering a mineralized area granted/issued under pertinent mining laws. Consequently,
determining whether the license of respondents falls under this definition would be relevant to
fixing their entitlement to the rights and/or preferences under RA 7942. Hence, the present
Petition has not been mooted.
Petitioners submit that the license clearly contravenes Section 69 of PD 463, because it
exceeds the maximum area that may be granted. This incipient violation, according to them,
renders the license void ab initio.
Respondents, on the other hand, argue that the license was validly granted, because it
was covered by four separate applications for areas of 81 hectares each.
The license in question, QLP No. 33,[19] is dated August 3, 1982, and it was issued in the
name of Rosemoor Mining Development Corporation. The terms of the license allowed the
corporation to extract and dispose of marbleized limestone from a 330.3062-hectare land in San
Miguel, Bulacan. The license is, however, subject to the terms and conditions of PD 463, the
governing law at the time it was granted; as well as to the rules and regulations promulgated
thereunder.[20] By the same token, Proclamation No. 2204 -- which awarded to Rosemoor the
right of development, exploitation, and utilization of the mineral site -- expressly cautioned that
the grant was subject to existing policies, laws, rules and regulations.[21]
The license was thus subject to Section 69 of PD 463, which reads:

(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 and in areas expressly prohibited under the

Section 69. Maximum Area of Quarry License Notwithstanding the provisions of Section 14
hereof, a quarry license shall cover an area of not more than one hundred (100) hectares in any

one province and not more than one thousand (1,000) hectares in the entire Philippines. (Italics
supplied)

reverting the parcel of land that was excluded by Proclamation No. 2204 to the former status of
that land as part of the Biak-na-Bato national park.

The language of PD 463 is clear. It states in categorical and mandatory terms that a
quarry license, like that of respondents, should cover a maximum of 100 hectares in any given
province. This law neither provides any exception nor makes any reference to the number of
applications for a license. Section 69 of PD 463 must be taken to mean exactly what it
says. Where the law is clear, plain, and free from ambiguity, it must be given its literal meaning
and applied without attempted interpretation.[22]

They also contend that Section 74 of PD 463 would not apply, because Minister Macedas
letter did not cancel or revoke QLP No. 33, but merely declared the latters nullity. They further
argue that respondents waived notice and hearing in their application for the license.

Moreover, the lower courts ruling is evidently inconsistent with the fact that QLP No. 33
was issued solely in the name of Rosemoor Mining and Development Corporation, rather than in
the names of the four individual stockholders who are respondents herein. It likewise brushes
aside a basic postulate that a corporation has a separate personality from that of its
stockholders.[23]
The interpretation adopted by the lower courts is contrary to the purpose of Section 69 of
PD 463. Such intent to limit, without qualification, the area of a quarry license strictly to 100
hectares in any one province is shown by the opening proviso that reads: Notwithstanding the
provisions of Section 14 hereof x x x. The mandatory nature of the provision is also
underscored by the use of the word shall. Hence, in the application of the 100-hectare-perprovince limit, no regard is given to the size or the number of mining claims under Section 14,
which we quote:
SECTION 14.
Size of Mining Claim. -- For purposes of registration of a mining claim under
this Decree, the Philippine territory and its shelf are hereby divided into meridional blocks or
quadrangles of one-half minute (1/2) of latitude and longitude, each block or quadrangle
containing area of eighty-one (81) hectares, more or less.
A mining claim shall cover one such block although a lesser area may be allowed if warranted
by attendant circumstances, such as geographical and other justifiable considerations as may
be determined by the Director: Provided, That in no case shall the locator be allowed to register
twice the area allowed for lease under Section 43 hereof. (Italics supplied)
Clearly, the intent of the law would be brazenly circumvented by ruling that a license may
cover an area exceeding the maximum by the mere expediency of filing several
applications. Such ruling would indirectly permit an act that is directly prohibited by the law.
Second Issue:
Validity of Proclamation No. 84
Petitioners also argue that the license was validly declared a nullity and consequently
withdrawn or terminated. In a letter dated September 15, 1986, respondents were informed by
then Minister Ernesto M. Maceda that their license had illegally been issued, because it violated
Section 69 of PD 463; and that there was no more public interest served by the continued
existence or renewal of the license. The latter reason, they added, was confirmed by the
language of Proclamation No. 84. According to this law, public interest would be served by

On the other hand, respondents submit that, as provided for in Section 74 of PD 463, their
right to due process was violated when their license was cancelled without notice and
hearing. They likewise contend that Proclamation No. 84 is not valid for the following
reasons: 1) it violates the clause on the non-impairment of contracts; 2) it is an ex post facto law
and/or a bill of attainder; and 3) it was issued by the President after the effectivity of the 1987
Constitution.
This Court ruled on the nature of a natural resource exploration permit, which was akin to
the present respondents license, in Southeast Mindanao Gold Mining Corporation v. Balite
Portal Mining Cooperative,[24] which held:
x x x. As correctly held by the Court of Appeals in its challenged decision, EP No. 133 merely
evidences a privilege granted by the State, which may be amended, modified or rescinded when
the national interest so requires. This is necessarily so since the exploration, development and
utilization of the countrys natural mineral resources are matters impressed with great public
interest. Like timber permits, mining exploration permits do not vest in the grantee any
permanent or irrevocable right within the purview of the non-impairment of contract and due
process clauses of the Constitution, since the State, under its all-encompassing police power,
may alter, modify or amend the same, in accordance with the demands of the general
welfare.[25]
This same ruling had been made earlier in Tan v. Director of Forestry[26] with regard to a
timber license, a pronouncement that was reiterated in Ysmael v. Deputy Executive Secretary,
[27]
the pertinent portion of which reads:
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].[28] (Italics supplied)
In line with the foregoing jurisprudence, respondents license may be revoked or rescinded
by executive action when the national interest so requires, because it is not a contract, property
or a property right protected by the due process clause of the Constitution. [29] Respondents
themselves acknowledge this condition of the grant under paragraph 7 of QLP No. 33, which we
quote:

7. This permit/license may be revoked or cancelled at any time by the Director of Mines and
Geo-Sciences when, in his opinion public interests so require or, upon failure of the
permittee/licensee to comply with the provisions of Presidential Decree No. 463, as amended,
and the rules and regulations promulgated thereunder, as well as with the terms and conditions
specified herein; Provided, That if a permit/license is cancelled, or otherwise terminated, the
permittee/licensee shall be liable for all unpaid rentals and royalties due up to the time of the
termination or cancellation of the permit/license[.][30] (Italics supplied)

protection to which he or she become entitled, such as the protection of a former conviction or
an acquittal or the proclamation of an amnesty.[40] Proclamation No. 84 does not fall under any of
the enumerated categories; hence, it is not an ex post facto law.

The determination of what is in the public interest is necessarily vested in the State as
owner of all mineral resources. That determination was based on policy considerations formally
enunciated in the letter dated September 15, 1986, issued by then Minister Maceda and,
subsequently, by the President through Proclamation No. 84. As to the exercise of prerogative
by Maceda, suffice it to say that while the cancellation or revocation of the license is vested in
the director of mines and geo-sciences, the latter is subject to the formers control as the
department head. We also stress the clear prerogative of the Executive Department in the
evaluation and the consequent cancellation of licenses in the process of its formulation of
policies with regard to their utilization. Courts will not interfere with the exercise of that
discretion without any clear showing of grave abuse of discretion. [31]

Finally, it is stressed that at the time President Aquino issued Proclamation No. 84 on
March 9, 1987, she was still validly exercising legislative powers under the Provisional
Constitution of 1986.[42] Section 1 of Article II of Proclamation No. 3, which promulgated the
Provisional Constitution, granted her legislative power until a legislature is elected and
convened under a new Constitution. The grant of such power is also explicitly recognized and
provided for in Section 6 of Article XVII of the 1987 Constitution.[43]

Moreover, granting that respondents license is valid, it can still be validly revoked by the
State in the exercise of police power.[32] The exercise of such power through Proclamation No.
84 is clearly in accord with jura regalia, which reserves to the State ownership of all natural
resources.[33] This Regalian doctrine is an exercise of its sovereign power as owner of lands of
the public domain and of the patrimony of the nation, the mineral deposits of which are a
valuable asset.[34]
Proclamation No. 84 cannot be stigmatized as a violation of the non-impairment
clause. As pointed out earlier, respondents license is not a contract to which the protection
accorded by the non-impairment clause may extend. [35] Even if the license were, it is settled that
provisions of existing laws and a reservation of police power are deemed read into it, because it
concerns a subject impressed with public welfare. [36] As it is, the non-impairment clause must
yield to the police power of the state.[37]
We cannot sustain the argument that Proclamation No. 84 is a bill of attainder; that is, a
legislative act which inflicts punishment without judicial trial. [38] Its declaration that QLP No. 33
is a patent nullity[39] is certainly not a declaration of guilt. Neither is the cancellation of the
license a punishment within the purview of the constitutional proscription against bills of
attainder.
Too, there is no merit in the argument that the proclamation is an ex post facto law. There
are six recognized instances when a law is considered as such: 1) it criminalizes and punishes
an action that was done before the passing of the law and that was innocent when it was done;
2) it aggravates a crime or makes it greater than it was when it was committed; 3) it changes the
punishment and inflicts one that is greater than that imposed by the law annexed to the crime
when it was committed; 4) it alters the legal rules of evidence and authorizes conviction upon a
less or different testimony than that required by the law at the time of the commission of the
offense; 5) it assumes the regulation of civil rights and remedies only, but in effect imposes
a penalty or a deprivation of a right as a consequence of something that was considered
lawful when it was done; and 6) it deprives a person accused of a crime of some lawful

It is settled that an ex post facto law is limited in its scope only to matters criminal in
nature.[41] Proclamation 84, which merely restored the area excluded from the Biak-na-Bato
national park by canceling respondents license, is clearly not penal in character.

WHEREFORE, this Petition is hereby GRANTED and the appealed Decision of the Court
of Appeals SET ASIDE. No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

EN BANC
G.R. No. 127882

January 27, 2004

LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC., represented by its Chairman F'LONG

MIGUEL M. LUMAYONG, WIGBERTO E. TAADA, PONCIANO BENNAGEN, JAIME TADEO,
RENATO R. CONSTANTINO, JR., F'LONG AGUSTIN M. DABIE, ROBERTO P. AMLOY,
RAQIM L. DABIE, SIMEON H. DOLOJO, IMELDA M. GANDON, LENY B. GUSANAN,
MARCELO L. GUSANAN, QUINTOL A. LABUAYAN, LOMINGGES D. LAWAY, BENITA P.
TACUAYAN, minors JOLY L. BUGOY, represented by his father UNDERO D. BUGOY,
ROGER M. DADING, represented by his father ANTONIO L. DADING, ROMY M. LAGARO,
represented by his father TOTING A. LAGARO, MIKENY JONG B. LUMAYONG,
represented by his father MIGUEL M. LUMAYONG, RENE T. MIGUEL, represented by his
mother EDITHA T. MIGUEL, ALDEMAR L. SAL, represented by his father DANNY M. SAL,
DAISY RECARSE, represented by her mother LYDIA S. SANTOS, EDWARD M. EMUY,
ALAN P. MAMPARAIR, MARIO L. MANGCAL, ALDEN S. TUSAN, AMPARO S. YAP,
VIRGILIO CULAR, MARVIC M.V.F. LEONEN, JULIA REGINA CULAR, GIAN CARLO CULAR,
VIRGILIO CULAR, JR., represented by their father VIRGILIO CULAR, PAUL ANTONIO P.
VILLAMOR, represented by his parents JOSE VILLAMOR and ELIZABETH PUAVILLAMOR, ANA GININA R. TALJA, represented by her father MARIO JOSE B. TALJA,
SHARMAINE R. CUNANAN, represented by her father ALFREDO M. CUNANAN, ANTONIO
JOSE A. VITUG III, represented by his mother ANNALIZA A. VITUG, LEAN D. NARVADEZ,
represented by his father MANUEL E. NARVADEZ, JR., ROSERIO MARALAG LINGATING,
represented by her father RIO OLIMPIO A. LINGATING, MARIO JOSE B. TALJA, DAVID E.
DE VERA, MARIA MILAGROS L. SAN JOSE, SR., SUSAN O. BOLANIO, OND, LOLITA G.
DEMONTEVERDE, BENJIE L. NEQUINTO,1 ROSE LILIA S. ROMANO, ROBERTO S.

VERZOLA, EDUARDO AURELIO C. REYES, LEAN LOUEL A. PERIA, represented by his

father ELPIDIO V. PERIA,2GREEN FORUM PHILIPPINES, GREEN FORUM WESTERN
VISAYAS, (GF-WV), ENVIRONMETAL LEGAL ASSISTANCE CENTER (ELAC), PHILIPPINE
KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN
(KAISAHAN),3 KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG
PANSAKAHAN (KAISAHAN), PARTNERSHIP FOR AGRARIAN REFORM and RURAL
DEVELOPMENT SERVICES, INC. (PARRDS), PHILIPPINE PART`NERSHIP FOR THE
DEVELOPMENT OF HUMAN RESOURCES IN THE RURAL AREAS, INC. (PHILDHRRA),
WOMEN'S LEGAL BUREAU (WLB), CENTER FOR ALTERNATIVE DEVELOPMENT
INITIATIVES, INC. (CADI), UPLAND DEVELOPMENT INSTITUTE (UDI), KINAIYAHAN
FOUNDATION, INC., SENTRO NG ALTERNATIBONG LINGAP PANLIGAL (SALIGAN),
LEGAL RIGHTS AND NATURAL RESOURCES CENTER, INC. (LRC), petitioners,
vs.
VICTOR O. RAMOS, SECRETARY, DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES (DENR), HORACIO RAMOS, DIRECTOR, MINES AND GEOSCIENCES
BUREAU (MGB-DENR), RUBEN TORRES, EXECUTIVE SECRETARY, and WMC
(PHILIPPINES), INC.4 respondents.
DECISION
CARPIO-MORALES, J.:
The present petition for mandamus and prohibition assails the constitutionality of Republic Act
No. 7942,5otherwise known as the PHILIPPINE MINING ACT OF 1995, along with the
Implementing Rules and Regulations issued pursuant thereto, Department of Environment and
Natural Resources (DENR) Administrative Order 96-40, and of the Financial and Technical
Assistance Agreement (FTAA) entered into on March 30, 1995 by the Republic of the Philippines
and WMC (Philippines), Inc. (WMCP), a corporation organized under Philippine laws.
On July 25, 1987, then President Corazon C. Aquino issued Executive Order (E.O.) No.
2796 authorizing the DENR Secretary to accept, consider and evaluate proposals from foreignowned corporations or foreign investors for contracts or agreements involving either technical or
financial assistance for large-scale exploration, development, and utilization of minerals, which,
upon appropriate recommendation of the Secretary, the President may execute with the foreign
proponent. In entering into such proposals, the President shall consider the real contributions to
the economic growth and general welfare of the country that will be realized, as well as the
development and use of local scientific and technical resources that will be promoted by the
proposed contract or agreement. Until Congress shall determine otherwise, large-scale mining,
for purpose of this Section, shall mean those proposals for contracts or agreements for mineral
resources exploration, development, and utilization involving a committed capital investment in a
single mining unit project of at least Fifty Million Dollars in United States Currency (US
$50,000,000.00).7
On March 3, 1995, then President Fidel V. Ramos approved R.A. No. 7942 to "govern the
exploration, development, utilization and processing of all mineral resources."8 R.A. No. 7942
defines the modes of mineral agreements for mining operations,9 outlines the procedure for their
filing and approval,10 assignment/transfer11and withdrawal,12 and fixes their terms.13 Similar
provisions govern financial or technical assistance agreements.14

The Act restricts the conditions for exploration,22 quarry23 and other24 permits. It regulates the
transport, sale and processing of minerals,25 and promotes the development of mining
communities, science and mining technology,26 and safety and environmental protection.27
The government's share in the agreements is spelled out and allocated,28 taxes and fees are
imposed,29incentives granted.30 Aside from penalizing certain acts,31 the law likewise specifies
grounds for the cancellation, revocation and termination of agreements and permits.32
On April 9, 1995, 30 days following its publication on March 10, 1995 in Malaya and Manila
Times, two newspapers of general circulation, R.A. No. 7942 took effect. 33 Shortly before the
effectivity of R.A. No. 7942, however, or on March 30, 1995, the President entered into an FTAA
with WMCP covering 99,387 hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur
and North Cotabato.34
On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order
(DAO) No. 95-23, s. 1995, otherwise known as the Implementing Rules and Regulations of R.A.
No. 7942. This was later repealed by DAO No. 96-40, s. 1996 which was adopted on December
20, 1996.
On January 10, 1997, counsels for petitioners sent a letter to the DENR Secretary demanding
that the DENR stop the implementation of R.A. No. 7942 and DAO No. 96-40,35 giving the DENR
fifteen days from receipt36 to act thereon. The DENR, however, has yet to respond or act on
petitioners' letter.37
Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a
temporary restraining order. They allege that at the time of the filing of the petition, 100 FTAA
applications had already been filed, covering an area of 8.4 million hectares,38 64 of which
applications are by fully foreign-owned corporations covering a total of 5.8 million hectares, and
at least one by a fully foreign-owned mining company over offshore areas.39
Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction:
I
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Act No. 7942, the latter being unconstitutional in that it allows fully foreign owned corporations to
explore, develop, utilize and exploit mineral resources in a manner contrary to Section 2,
paragraph 4, Article XII of the Constitution;
II
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Act No. 7942, the latter being unconstitutional in that it allows the taking of private property
without the determination of public use and for just compensation;
III

The law prescribes the qualifications of contractors15 and grants them certain rights, including
timber,16 water17and easement18 rights, and the right to possess explosives.19 Surface owners,
occupants, or concessionaires are forbidden from preventing holders of mining rights from
entering private lands and concession areas.20 A procedure for the settlement of conflicts is
likewise provided for.21

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Act No. 7942, the latter being unconstitutional in that it violates Sec. 1, Art. III of the Constitution;
IV

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Act No. 7942, the latter being unconstitutional in that it allows enjoyment by foreign citizens as
well as fully foreign owned corporations of the nation's marine wealth contrary to Section 2,
paragraph 2 of Article XII of the Constitution;

and mandamus. Additionally, respondent WMCP argues that there has been a violation of the
rule on hierarchy of courts.
After petitioners filed their reply, this Court granted due course to the petition. The parties have
since filed their respective memoranda.

V
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Act No. 7942, the latter being unconstitutional in that it allows priority to foreign and fully foreign
owned corporations in the exploration, development and utilization of mineral resources contrary
to Article XII of the Constitution;
VI
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic
Act No. 7942, the latter being unconstitutional in that it allows the inequitable sharing of wealth
contrary to Sections [sic] 1, paragraph 1, and Section 2, paragraph 4[,] [Article XII] of the
Constitution;
VII
x x x in recommending approval of and implementing the Financial and Technical Assistance
Agreement between the President of the Republic of the Philippines and Western Mining
Corporation Philippines Inc. because the same is illegal and unconstitutional.40
They pray that the Court issue an order:
(a) Permanently enjoining respondents from acting on any application for Financial or
Technical Assistance Agreements;

WMCP subsequently filed a Manifestation dated September 25, 2002 alleging that on January
23, 2001, WMC sold all its shares in WMCP to Sagittarius Mines, Inc. (Sagittarius), a corporation
organized under Philippine laws.44 WMCP was subsequently renamed "Tampakan Mineral
Resources Corporation."45 WMCP claims that at least 60% of the equity of Sagittarius is owned
by Filipinos and/or Filipino-owned corporations while about 40% is owned by Indophil Resources
NL, an Australian company.46 It further claims that by such sale and transfer of shares, "WMCP
has ceased to be connected in any way with WMC."47
By virtue of such sale and transfer, the DENR Secretary, by Order of December 18,
2001,48 approved the transfer and registration of the subject FTAA from WMCP to Sagittarius.
Said Order, however, was appealed by Lepanto Consolidated Mining Co. (Lepanto) to the Office
of the President which upheld it by Decision of July 23, 2002.49 Its motion for reconsideration
having been denied by the Office of the President by Resolution of November 12,
2002,50 Lepanto filed a petition for review51 before the Court of Appeals. Incidentally, two other
petitions for review related to the approval of the transfer and registration of the FTAA to
Sagittarius were recently resolved by this Court.52
It bears stressing that this case has not been rendered moot either by the transfer and
registration of the FTAA to a Filipino-owned corporation or by the non-issuance of a temporary
restraining order or a preliminary injunction to stay the above-said July 23, 2002 decision of the
Office of the President.53 The validity of the transfer remains in dispute and awaits final judicial
determination. This assumes, of course, that such transfer cures the FTAA's alleged
unconstitutionality, on which question judgment is reserved.

(c) Declaring the Implementing Rules and Regulations of the Philippine Mining Act
contained in DENR Administrative Order No. 96-40 and all other similar administrative
issuances as unconstitutional and null and void; and

WMCP also points out that the original claimowners of the major mineralized areas included in
the WMCP FTAA, namely, Sagittarius, Tampakan Mining Corporation, and Southcot Mining
Corporation, are all Filipino-owned corporations,54 each of which was a holder of an approved
Mineral Production Sharing Agreement awarded in 1994, albeit their respective mineral claims
were subsumed in the WMCP FTAA;55 and that these three companies are the same companies
that consolidated their interests in Sagittarius to whom WMC sold its 100% equity in
WMCP.56 WMCP concludes that in the event that the FTAA is invalidated, the MPSAs of the
three corporations would be revived and the mineral claims would revert to their original
claimants.57

(d) Cancelling the Financial and Technical Assistance Agreement issued to Western
Mining Philippines, Inc. as unconstitutional, illegal and null and void.41

These circumstances, while informative, are hardly significant in the resolution of this case, it
involving the validity of the FTAA, not the possible consequences of its invalidation.

(b) Declaring the Philippine Mining Act of 1995 or Republic Act No. 7942 as
unconstitutional and null and void;

Impleaded as public respondents are Ruben Torres, the then Executive Secretary, Victor O.
Ramos, the then DENR Secretary, and Horacio Ramos, Director of the Mines and Geosciences
Bureau of the DENR. Also impleaded is private respondent WMCP, which entered into the
assailed FTAA with the Philippine Government. WMCP is owned by WMC Resources
International Pty., Ltd. (WMC), "a wholly owned subsidiary of Western Mining Corporation
Holdings Limited, a publicly listed major Australian mining and exploration company." 42 By
WMCP's information, "it is a 100% owned subsidiary of WMC LIMITED." 43

Of the above-enumerated seven grounds cited by petitioners, as will be shown later, only the
first and the last need be delved into; in the latter, the discussion shall dwell only insofar as it
questions the effectivity of E. O. No. 279 by virtue of which order the questioned FTAA was
forged.

Respondents, aside from meeting petitioners' contentions, argue that the requisites for judicial
inquiry have not been met and that the petition does not comply with the criteria for prohibition

Before going into the substantive issues, the procedural questions posed by respondents shall
first be tackled.

REQUISITES FOR JUDICIAL REVIEW

When an issue of constitutionality is raised, this Court can exercise its power of judicial review
only if the following requisites are present:

Public respondents' contention fails. The present action is not merely one for annulment of
contract but for prohibition and mandamus. Petitioners allege that public respondents acted
without or in excess of jurisdiction in implementing the FTAA, which they submit is
unconstitutional. As the case involves constitutional questions, this Court is not concerned with
whether petitioners are real parties in interest, but with whether they have legal standing. As
held in Kilosbayan v. Morato:72

(1) The existence of an actual and appropriate case;

(2) A personal and substantial interest of the party raising the constitutional question;
(3) The exercise of judicial review is pleaded at the earliest opportunity; and
(4) The constitutional question is the lis mota of the case.

58

Respondents claim that the first three requisites are not present.
Section 1, Article VIII of the Constitution states that "(j)udicial power includes the duty of the
courts of justice to settle actual controversies involving rights which are legally demandable and
enforceable." The power of judicial review, therefore, is limited to the determination of actual
cases and controversies.59
An actual case or controversy means an existing case or controversy that is appropriate or ripe
for determination, not conjectural or anticipatory,60 lest the decision of the court would amount to
an advisory opinion.61 The power does not extend to hypothetical questions62 since any attempt
at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions
unrelated to actualities.63
"Legal standing" or locus standi has been defined as a personal and substantial interest in the
case such that the party has sustained or will sustain direct injury as a result of the
governmental act that is being challenged,64alleging more than a generalized grievance.65 The
gist of the question of standing is whether a party alleges "such personal stake in the outcome of
the controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court depends for illumination of difficult constitutional questions." 66Unless
a person is injuriously affected in any of his constitutional rights by the operation of statute or
ordinance, he has no standing.67
Petitioners traverse a wide range of sectors. Among them are La Bugal B'laan Tribal Association,
Inc., a farmers and indigenous people's cooperative organized under Philippine laws
representing a community actually affected by the mining activities of WMCP, members of said
cooperative,68 as well as other residents of areas also affected by the mining activities of
WMCP.69 These petitioners have standing to raise the constitutionality of the questioned FTAA as
they allege a personal and substantial injury. They claim that they would suffer "irremediable
displacement"70 as a result of the implementation of the FTAA allowing WMCP to conduct mining
activities in their area of residence. They thus meet the appropriate case requirement as they
assert an interest adverse to that of respondents who, on the other hand, insist on the FTAA's
validity.
In view of the alleged impending injury, petitioners also have standing to assail the validity of
E.O. No. 279, by authority of which the FTAA was executed.
Public respondents maintain that petitioners, being strangers to the FTAA, cannot sue either or
both contracting parties to annul it.71 In other words, they contend that petitioners are not real
parties in interest in an action for the annulment of contract.

x x x. "It is important to note . . . that standing because of its constitutional and public policy
underpinnings, is very different from questions relating to whether a particular plaintiff is the real
party in interest or has capacity to sue. Although all three requirements are directed towards
ensuring that only certain parties can maintain an action, standing restrictions require a partial
consideration of the merits, as well as broader policy concerns relating to the proper role of the
judiciary in certain areas.["] (FRIEDENTHAL, KANE AND MILLER, CIVIL PROCEDURE 328
[1985])
Standing is a special concern in constitutional law because in some cases suits are brought not
by parties who have been personally injured by the operation of a law or by official action taken,
but by concerned citizens, taxpayers or voters who actually sue in the public interest. Hence, the
question in standing is whether such parties have "alleged such a personal stake in the outcome
of the controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court so largely depends for illumination of difficult constitutional
questions." (Baker v. Carr, 369 U.S. 186, 7 L.Ed.2d 633 [1962].)
As earlier stated, petitioners meet this requirement.
The challenge against the constitutionality of R.A. No. 7942 and DAO No. 96-40 likewise fulfills
the requisites of justiciability. Although these laws were not in force when the subject FTAA was
entered into, the question as to their validity is ripe for adjudication.
The WMCP FTAA provides:
14.3 Future Legislation
Any term and condition more favourable to Financial &Technical Assistance Agreement
contractors resulting from repeal or amendment of any existing law or regulation or from the
enactment of a law, regulation or administrative order shall be considered a part of this
Agreement.
It is undisputed that R.A. No. 7942 and DAO No. 96-40 contain provisions that are more
favorable to WMCP, hence, these laws, to the extent that they are favorable to WMCP, govern
the FTAA.
In addition, R.A. No. 7942 explicitly makes certain provisions apply to pre-existing agreements.
SEC. 112. Non-impairment of Existing Mining/Quarrying Rights. x x x That the provisions of
Chapter XIV on government share in mineral production-sharing agreement and of Chapter XVI
on incentives of this Act shall immediately govern and apply to a mining lessee or contractor
unless the mining lessee or contractor indicates his intention to the secretary, in writing, not to
avail of said provisions x x x Provided, finally, That such leases, production-sharing agreements,
financial or technical assistance agreements shall comply with the applicable provisions of this
Act and its implementing rules and regulations.

As there is no suggestion that WMCP has indicated its intention not to avail of the provisions of
Chapter XVI of R.A. No. 7942, it can safely be presumed that they apply to the WMCP FTAA.
Misconstruing the application of the third requisite for judicial review that the exercise of the
review is pleaded at the earliest opportunity WMCP points out that the petition was filed only
almost two years after the execution of the FTAA, hence, not raised at the earliest opportunity.
The third requisite should not be taken to mean that the question of constitutionality must be
raised immediately after the execution of the state action complained of. That the question of
constitutionality has not been raised before is not a valid reason for refusing to allow it to be
raised later.73 A contrary rule would mean that a law, otherwise unconstitutional, would lapse into
constitutionality by the mere failure of the proper party to promptly file a case to challenge the
same.
PROPRIETY OF PROHIBITION AND MANDAMUS
Before the effectivity in July 1997 of the Revised Rules of Civil Procedure, Section 2 of Rule 65
read:
SEC. 2. Petition for prohibition. When the proceedings of any tribunal, corporation, board, or
person, whether exercising functions judicial or ministerial, are without or in excess of its or his
jurisdiction, or with grave abuse of discretion, and there is no appeal or any other plain, speedy,
and adequate remedy in the ordinary course of law, a 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 defendant to desist from further proceeding in the action or matter
specified therein.
74

Prohibition is a preventive remedy. It seeks a judgment ordering the defendant to desist from
continuing with the commission of an act perceived to be illegal.75
The petition for prohibition at bar is thus an appropriate remedy. While the execution of the
contract itself may be fait accompli, its implementation is not. Public respondents, in behalf of
the Government, have obligations to fulfill under said contract. Petitioners seek to prevent them
from fulfilling such obligations on the theory that the contract is unconstitutional and, therefore,
void.
The propriety of a petition for prohibition being upheld, discussion of the propriety of the
mandamus aspect of the petition is rendered unnecessary.
HIERARCHY OF COURTS
The contention that the filing of this petition violated the rule on hierarchy of courts does not
likewise lie. The rule has been explained thus:
Between two courts of concurrent original jurisdiction, it is the lower court that should initially
pass upon the issues of a case. That way, as a particular case goes through the hierarchy of
courts, it is shorn of all but the important legal issues or those of first impression, which are the
proper subject of attention of the appellate court. This is a procedural rule borne of experience
and adopted to improve the administration of justice.
This Court has consistently enjoined litigants to respect the hierarchy of courts. Although this
Court has concurrent jurisdiction with the Regional Trial Courts and the Court of Appeals to issue

writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give a party unrestricted freedom of choice of court forum. The resort to
this Court's primary jurisdiction to issue said writs shall be allowed only where the redress
desired cannot be obtained in the appropriate courts or where exceptional and compelling
circumstances justify such invocation. We held in People v. Cuaresma that:
A becoming regard for judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial
Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme
Court's original jurisdiction to issue these writs should be allowed only where there are special
and important reasons therefor, clearly and specifically set out in the petition. This is established
policy. It is a policy necessary to prevent inordinate demands upon the Court's time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to prevent further
over-crowding of the Court's docket x x x.76 [Emphasis supplied.]
The repercussions of the issues in this case on the Philippine mining industry, if not the national
economy, as well as the novelty thereof, constitute exceptional and compelling circumstances to
justify resort to this Court in the first instance.
In all events, this Court has the discretion to take cognizance of a suit which does not satisfy the
requirements of an actual case or legal standing when paramount public interest is
involved.77 When the issues raised are of paramount importance to the public, this Court may
brush aside technicalities of procedure.78
II
Petitioners contend that E.O. No. 279 did not take effect because its supposed date of effectivity
came after President Aquino had already lost her legislative powers under the Provisional
Constitution.
And they likewise claim that the WMC FTAA, which was entered into pursuant to E.O. No. 279,
violates Section 2, Article XII of the Constitution because, among other reasons:
(1) It allows foreign-owned companies to extend more than mere financial or technical
assistance to the State in the exploitation, development, and utilization of minerals,
petroleum, and other mineral oils, and even permits foreign owned companies to
"operate and manage mining activities."
(2) It allows foreign-owned companies to extend both technical and financial
assistance, instead of "either technical or financial assistance."
To appreciate the import of these issues, a visit to the history of the pertinent constitutional
provision, the concepts contained therein, and the laws enacted pursuant thereto, is in order.
Section 2, Article XII reads in full:
Sec. 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.
The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens,
as well as cooperative fish farming, with priority to subsistence fishermen and fish-workers in
rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large-scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the general terms and conditions
provided by law, based on real contributions to the economic growth and general welfare of the
country. In such agreements, the State shall promote the development and use of local scientific
and technical resources.
The President shall notify the Congress of every contract entered into in accordance with this
provision, within thirty days from its execution.
THE SPANISH REGIME AND THE REGALIAN DOCTRINE
The first sentence of Section 2 embodies the Regalian doctrine or jura regalia. Introduced by
Spain into these Islands, this feudal concept is based on the State's power of dominium, which is
the capacity of the State to own or acquire property.79
In its broad sense, the term "jura regalia" refers to royal rights, or those rights which the King has
by virtue of his prerogatives. In Spanish law, it refers to a right which the sovereign has over
anything in which a subject has a right of property or propriedad. These were rights enjoyed
during feudal times by the king as the sovereign.
The theory of the feudal system was that title to all lands was originally held by the King, and
while the use of lands was granted out to others who were permitted to hold them under certain
conditions, the King theoretically retained the title. By fiction of law, the King was regarded as
the original proprietor of all lands, and the true and only source of title, and from him all lands
were held. The theory of jura regalia was therefore nothing more than a natural fruit of
conquest.80
The Philippines having passed to Spain by virtue of discovery and conquest, 81 earlier Spanish
decrees declared that "all lands were held from the Crown."82
The Regalian doctrine extends not only to land but also to "all natural wealth that may be found
in the bowels of the earth."83 Spain, in particular, recognized the unique value of natural
resources, viewing them, especially minerals, as an abundant source of revenue to finance its
wars against other nations.84 Mining laws during the Spanish regime reflected this perspective.85
THE AMERICAN OCCUPATION AND THE CONCESSION REGIME

By the Treaty of Paris of December 10, 1898, Spain ceded "the archipelago known as the
Philippine Islands" to the United States. The Philippines was hence governed by means of
organic acts that were in the nature of charters serving as a Constitution of the occupied territory
from 1900 to 1935.86 Among the principal organic acts of the Philippines was the Act of
Congress of July 1, 1902, more commonly known as the Philippine Bill of 1902, through which
the United States Congress assumed the administration of the Philippine Islands.87 Section 20 of
said Bill reserved the disposition of mineral lands of the public domain from sale. Section 21
thereof allowed the free and open exploration, occupation and purchase of mineral deposits not
only to citizens of the Philippine Islands but to those of the United States as well:
Sec. 21. That all valuable mineral deposits in public lands in the Philippine Islands, both
surveyed and unsurveyed, are hereby declared to be free and open to exploration, occupation
and purchase, and the land in which they are found, to occupation and purchase, by citizens of
the United States or of said Islands: Provided, That when on any lands in said Islands entered
and occupied as agricultural lands under the provisions of this Act, but not patented, mineral
deposits have been found, the working of such mineral deposits is forbidden until the person,
association, or corporation who or which has entered and is occupying such lands shall have
paid to the Government of said Islands such additional sum or sums as will make the total
amount paid for the mineral claim or claims in which said deposits are located equal to the
amount charged by the Government for the same as mineral claims.
Unlike Spain, the United States considered natural resources as a source of wealth for its
nationals and saw fit to allow both Filipino and American citizens to explore and exploit minerals
in public lands, and to grant patents to private mineral lands.88 A person who acquired ownership
over a parcel of private mineral land pursuant to the laws then prevailing could exclude other
persons, even the State, from exploiting minerals within his property.89Thus, earlier
jurisprudence90 held that:
A valid and subsisting location of mineral land, made and kept up in accordance with the
provisions of the statutes of the United States, has the effect of a grant by the United States of
the present and exclusive possession of the lands located, and this exclusive right of possession
and enjoyment continues during the entire life of the location. x x x.
x x x.
The discovery of minerals in the ground by one who has a valid mineral location perfects his
claim and his location not only against third persons, but also against the Government. x x x.
[Italics in the original.]
The Regalian doctrine and the American system, therefore, differ in one essential respect. Under
the Regalian theory, mineral rights are not included in a grant of land by the state; under the
American doctrine, mineral rights are included in a grant of land by the government.91
Section 21 also made possible the concession (frequently styled "permit", license" or
"lease")92 system.93 This was the traditional regime imposed by the colonial administrators for the
exploitation of natural resources in the extractive sector (petroleum, hard minerals, timber,
etc.).94
Under the concession system, the concessionaire makes a direct equity investment for the
purpose of exploiting a particular natural resource within a given area.95 Thus, the concession
amounts to complete control by the concessionaire over the country's natural resource, for it is
given exclusive and plenary rights to exploit a particular resource at the point of extraction.96 In
consideration for the right to exploit a natural resource, the concessionaire either pays rent or
royalty, which is a fixed percentage of the gross proceeds. 97

Later statutory enactments by the legislative bodies set up in the Philippines adopted the
contractual framework of the concession.98 For instance, Act No. 2932,99 approved on August 31,
1920, which provided for the exploration, location, and lease of lands containing petroleum and
other mineral oils and gas in the Philippines, and Act No. 2719,100 approved on May 14, 1917,
which provided for the leasing and development of coal lands in the Philippines, both utilized the
concession system.101
THE 1935 CONSTITUTION AND THE NATIONALIZATION OF NATURAL RESOURCES
By the Act of United States Congress of March 24, 1934, popularly known as the TydingsMcDuffie Law, the People of the Philippine Islands were authorized to adopt a constitution.102 On
July 30, 1934, the Constitutional Convention met for the purpose of drafting a constitution, and
the Constitution subsequently drafted was approved by the Convention on February 8,
1935.103 The Constitution was submitted to the President of the United States on March 18,
1935.104 On March 23, 1935, the President of the United States certified that the Constitution
conformed substantially with the provisions of the Act of Congress approved on March 24,
1934.105On May 14, 1935, the Constitution was ratified by the Filipino people.106
The 1935 Constitution adopted the Regalian doctrine, declaring all natural resources of the
Philippines, including mineral lands and minerals, to be property belonging to the State.107 As
adopted in a republican system, the medieval concept of jura regalia is stripped of royal
overtones and ownership of the land is vested in the State.108
Section 1, Article XIII, on Conservation and Utilization of Natural Resources, of the 1935
Constitution provided:
SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and
other natural resources of the Philippines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to citizens of the Philippines, or
to corporations or associations at least sixty per centum of the capital of which is
owned by such citizens, subject to any existing right, grant, lease, or concession at the
time of the inauguration of the Government established under this Constitution.
Natural resources, with the exception of public agricultural land, shall not be alienated,
and no license, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial uses other
than the development of water power, in which cases beneficial use may be the
measure and the limit of the grant.

conserving the natural resources of the country. For with the establishment of the principle of
state ownership of the natural resources, it would not be hard to secure the recognition of the
power of the State to control their disposition, exploitation, development or utilization. 110
The nationalization of the natural resources was intended (1) to insure their conservation for
Filipino posterity; (2) to serve as an instrument of national defense, helping prevent the
extension to the country of foreign control through peaceful economic penetration; and (3) to
avoid making the Philippines a source of international conflicts with the consequent danger to its
internal security and independence.111
The same Section 1, Article XIII also adopted the concession system, expressly permitting the
State to grant licenses, concessions, or leases for the exploitation, development, or utilization of
any of the natural resources. Grants, however, were limited to Filipinos or entities at least 60% of
the capital of which is owned by Filipinos.lawph!l.ne+
The swell of nationalism that suffused the 1935 Constitution was radically diluted when on
November 1946, the Parity Amendment, which came in the form of an "Ordinance Appended to
the Constitution," was ratified in a plebiscite.112 The Amendment extended, from July 4, 1946 to
July 3, 1974, the right to utilize and exploit our natural resources to citizens of the United States
and business enterprises owned or controlled, directly or indirectly, by citizens of the United
States:113
Notwithstanding the provision of section one, Article Thirteen, and section eight, Article Fourteen,
of the foregoing Constitution, during the effectivity of the Executive Agreement entered into by
the President of the Philippines with the President of the United States on the fourth of July,
nineteen hundred and forty-six, pursuant to the provisions of Commonwealth Act Numbered
Seven hundred and thirty-three, but in no case to extend beyond the third of July, nineteen
hundred and seventy-four, the disposition, exploitation, development, and utilization of all
agricultural, timber, and mineral lands of the public domain, waters, minerals, coals, petroleum,
and other mineral oils, all forces and sources of potential energy, and other natural resources of
the Philippines, and the operation of public utilities, shall, if open to any person, be open to
citizens of the United States and to all forms of business enterprise owned or controlled, directly
or indirectly, by citizens of the United States in the same manner as to, and under the same
conditions imposed upon, citizens of the Philippines or corporations or associations owned or
controlled by citizens of the Philippines.
The Parity Amendment was subsequently modified by the 1954 Revised Trade Agreement, also
known as the Laurel-Langley Agreement, embodied in Republic Act No. 1355.114
THE PETROLEUM ACT OF 1949 AND THE CONCESSION SYSTEM

The nationalization and conservation of the natural resources of the country was one of the fixed
and dominating objectives of the 1935 Constitutional Convention.109 One delegate relates:
There was an overwhelming sentiment in the Convention in favor of the principle of state
ownership of natural resources and the adoption of the Regalian doctrine. State ownership of
natural resources was seen as a necessary starting point to secure recognition of the state's
power to control their disposition, exploitation, development, or utilization. The delegates of the
Constitutional Convention very well knew that the concept of State ownership of land and natural
resources was introduced by the Spaniards, however, they were not certain whether it was
continued and applied by the Americans. To remove all doubts, the Convention approved the
provision in the Constitution affirming the Regalian doctrine.
The adoption of the principle of state ownership of the natural resources and of the Regalian
doctrine was considered to be a necessary starting point for the plan of nationalizing and

In the meantime, Republic Act No. 387,115 also known as the Petroleum Act of 1949, was
approved on June 18, 1949.
The Petroleum Act of 1949 employed the concession system for the exploitation of the nation's
petroleum resources. Among the kinds of concessions it sanctioned were exploration and
exploitation concessions, which respectively granted to the concessionaire the exclusive right to
explore for116 or develop117 petroleum within specified areas.
Concessions may be granted only to duly qualified persons118 who have sufficient finances,
organization, resources, technical competence, and skills necessary to conduct the operations
to be undertaken.119

Nevertheless, the Government reserved the right to undertake such work itself.120 This
proceeded from the theory that all natural deposits or occurrences of petroleum or natural gas in
public and/or private lands in the Philippines belong to the State. 121 Exploration and exploitation
concessions did not confer upon the concessionaire ownership over the petroleum lands and
petroleum deposits.122 However, they did grant concessionaires the right to explore, develop,
exploit, and utilize them for the period and under the conditions determined by the law.123
Concessions were granted at the complete risk of the concessionaire; the Government did not
guarantee the existence of petroleum or undertake, in any case, title warranty.124
Concessionaires were required to submit information as maybe required by the Secretary of
Agriculture and Natural Resources, including reports of geological and geophysical
examinations, as well as production reports.125 Exploration126 and exploitation127 concessionaires
were also required to submit work programs.lavvphi1.net
Exploitation concessionaires, in particular, were obliged to pay an annual exploitation tax,128 the
object of which is to induce the concessionaire to actually produce petroleum, and not simply to
sit on the concession without developing or exploiting it.129 These concessionaires were also
bound to pay the Government royalty, which was not less than 12% of the petroleum produced
and saved, less that consumed in the operations of the concessionaire.130 Under Article 66, R.A.
No. 387, the exploitation tax may be credited against the royalties so that if the concessionaire
shall be actually producing enough oil, it would not actually be paying the exploitation tax.131
Failure to pay the annual exploitation tax for two consecutive years,132 or the royalty due to the
Government within one year from the date it becomes due,133 constituted grounds for the
cancellation of the concession. In case of delay in the payment of the taxes or royalty imposed
by the law or by the concession, a surcharge of 1% per month is exacted until the same are
paid.134
As a rule, title rights to all equipment and structures that the concessionaire placed on the land
belong to the exploration or exploitation concessionaire.135 Upon termination of such concession,
the concessionaire had a right to remove the same.136
The Secretary of Agriculture and Natural Resources was tasked with carrying out the provisions
of the law, through the Director of Mines, who acted under the Secretary's immediate
supervision and control.137 The Act granted the Secretary the authority to inspect any operation
of the concessionaire and to examine all the books and accounts pertaining to operations or
conditions related to payment of taxes and royalties.138
The same law authorized the Secretary to create an Administration Unit and a Technical
Board.139 The Administration Unit was charged, inter alia, with the enforcement of the provisions
of the law.140 The Technical Board had, among other functions, the duty to check on the
performance of concessionaires and to determine whether the obligations imposed by the Act
and its implementing regulations were being complied with.141
Victorio Mario A. Dimagiba, Chief Legal Officer of the Bureau of Energy Development, analyzed
the benefits and drawbacks of the concession system insofar as it applied to the petroleum
industry:
Advantages of Concession. Whether it emphasizes income tax or royalty, the most positive
aspect of the concession system is that the State's financial involvement is virtually risk free and
administration is simple and comparatively low in cost. Furthermore, if there is a competitive
allocation of the resource leading to substantial bonuses and/or greater royalty coupled with a

relatively high level of taxation, revenue accruing to the State under the concession system may
compare favorably with other financial arrangements.
Disadvantages of Concession. There are, however, major negative aspects to this system.
Because the Government's role in the traditional concession is passive, it is at a distinct
disadvantage in managing and developing policy for the nation's petroleum resource. This is true
for several reasons. First, even though most concession agreements contain covenants
requiring diligence in operations and production, this establishes only an indirect and passive
control of the host country in resource development. Second, and more importantly, the fact that
the host country does not directly participate in resource management decisions inhibits its
ability to train and employ its nationals in petroleum development. This factor could delay or
prevent the country from effectively engaging in the development of its resources. Lastly, a direct
role in management is usually necessary in order to obtain a knowledge of the international
petroleum industry which is important to an appreciation of the host country's resources in
relation to those of other countries.142
Other liabilities of the system have also been noted:
x x x there are functional implications which give the concessionaire great economic power
arising from its exclusive equity holding. This includes, first, appropriation of the returns of the
undertaking, subject to a modest royalty; second, exclusive management of the project; third,
control of production of the natural resource, such as volume of production, expansion, research
and development; and fourth, exclusive responsibility for downstream operations, like
processing, marketing, and distribution. In short, even if nominally, the state is the sovereign and
owner of the natural resource being exploited, it has been shorn of all elements of control over
such natural resource because of the exclusive nature of the contractual regime of the
concession. The concession system, investing as it does ownership of natural resources,
constitutes a consistent inconsistency with the principle embodied in our Constitution that natural
resources belong to the state and shall not be alienated, not to mention the fact that the
concession was the bedrock of the colonial system in the exploitation of natural resources.143
Eventually, the concession system failed for reasons explained by Dimagiba:
Notwithstanding the good intentions of the Petroleum Act of 1949, the concession system could
not have properly spurred sustained oil exploration activities in the country, since it assumed that
such a capital-intensive, high risk venture could be successfully undertaken by a single
individual or a small company. In effect, concessionaires' funds were easily exhausted.
Moreover, since the concession system practically closed its doors to interested foreign
investors, local capital was stretched to the limits. The old system also failed to consider the
highly sophisticated technology and expertise required, which would be available only to
multinational companies.144
A shift to a new regime for the development of natural resources thus seemed imminent.
PRESIDENTIAL DECREE NO. 87, THE 1973 CONSTITUTION AND THE SERVICE
CONTRACT SYSTEM
The promulgation on December 31, 1972 of Presidential Decree No. 87,145 otherwise known as
The Oil Exploration and Development Act of 1972 signaled such a transformation. P.D. No. 87
permitted the government to explore for and produce indigenous petroleum through "service
contracts."146
"Service contracts" is a term that assumes varying meanings to different people, and it has
carried many names in different countries, like "work contracts" in Indonesia, "concession

agreements" in Africa, "production-sharing agreements" in the Middle East, and "participation

agreements" in Latin America.147 A functional definition of "service contracts" in the Philippines is
provided as follows:
A service contract is a contractual arrangement for engaging in the exploitation and development
of petroleum, mineral, energy, land and other natural resources by which a government or its
agency, or a private person granted a right or privilege by the government authorizes the other
party (service contractor) to engage or participate in the exercise of such right or the enjoyment
of the privilege, in that the latter provides financial or technical resources, undertakes the
exploitation or production of a given resource, or directly manages the productive enterprise,
operations of the exploration and exploitation of the resources or the disposition of marketing or
resources.148
In a service contract under P.D. No. 87, service and technology are furnished by the service
contractor for which it shall be entitled to the stipulated service fee.149 The contractor must be
technically competent and financially capable to undertake the operations required in the
contract.150
Financing is supposed to be provided by the Government to which all petroleum produced
belongs.151 In case the Government is unable to finance petroleum exploration operations, the
contractor may furnish services, technology and financing, and the proceeds of sale of the
petroleum produced under the contract shall be the source of funds for payment of the service
fee and the operating expenses due the contractor.152 The contractor shall undertake, manage
and execute petroleum operations, subject to the government overseeing the management of
the operations.153 The contractor provides all necessary services and technology and the
requisite financing, performs the exploration work obligations, and assumes all exploration risks
such that if no petroleum is produced, it will not be entitled to reimbursement. 154 Once petroleum
in commercial quantity is discovered, the contractor shall operate the field on behalf of the
government.155
156

P.D. No. 87 prescribed minimum terms and conditions for every service contract. It also
granted the contractor certain privileges, including exemption from taxes and payment of tariff
duties,157 and permitted the repatriation of capital and retention of profits abroad.158
Ostensibly, the service contract system had certain advantages over the concession regime.159 It
has been opined, though, that, in the Philippines, our concept of a service contract, at least in
the petroleum industry, was basically a concession regime with a production-sharing element. 160
On January 17, 1973, then President Ferdinand E. Marcos proclaimed the ratification of a new
Constitution.161Article XIV on the National Economy and Patrimony contained provisions similar
to the 1935 Constitution with regard to Filipino participation in the nation's natural resources.
Section 8, Article XIV thereof provides:
Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils,
all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines
belong to the State. With the exception of agricultural, industrial or commercial, residential and
resettlement lands of the public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or utilization of any of the
natural resources shall be granted for a period exceeding twenty-five years, renewable for not
more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases beneficial use may be
the measure and the limit of the grant.

While Section 9 of the same Article maintained the Filipino-only policy in the enjoyment of
natural resources, it also allowed Filipinos, upon authority of the Batasang Pambansa, to enter
into service contracts with any person or entity for the exploration or utilization of natural
resources.
Sec. 9. The disposition, exploration, development, exploitation, or utilization of any of the natural
resources of the Philippines shall be limited to citizens, or to corporations or associations at least
sixty per centum of which is owned by such citizens. The Batasang Pambansa, in the national
interest, may allow such citizens, corporations or associations to enter into service contracts for
financial, technical, management, or other forms of assistance with any person or entity for the
exploration, or utilization of any of the natural resources. Existing valid and binding service
contracts for financial, technical, management, or other forms of assistance are hereby
recognized as such. [Emphasis supplied.]
The concept of service contracts, according to one delegate, was borrowed from the methods
followed by India, Pakistan and especially Indonesia in the exploration of petroleum and mineral
oils.162 The provision allowing such contracts, according to another, was intended to "enhance
the proper development of our natural resources since Filipino citizens lack the needed capital
and technical know-how which are essential in the proper exploration, development and
exploitation of the natural resources of the country."163
The original idea was to authorize the government, not private entities, to enter into service
contracts with foreign entities.164 As finally approved, however, a citizen or private entity could be
allowed by the National Assembly to enter into such service contract.165 The prior approval of the
National Assembly was deemed sufficient to protect the national interest. 166 Notably, none of the
laws allowing service contracts were passed by the Batasang Pambansa. Indeed, all of them
were enacted by presidential decree.
On March 13, 1973, shortly after the ratification of the new Constitution, the President
promulgated Presidential Decree No. 151.167 The law allowed Filipino citizens or entities which
have acquired lands of the public domain or which own, hold or control such lands to enter into
service contracts for financial, technical, management or other forms of assistance with any
foreign persons or entity for the exploration, development, exploitation or utilization of said
lands.168
Presidential Decree No. 463,169 also known as The Mineral Resources Development Decree of
1974, was enacted on May 17, 1974. Section 44 of the decree, as amended, provided that a
lessee of a mining claim may enter into a service contract with a qualified domestic or foreign
contractor for the exploration, development and exploitation of his claims and the processing
and marketing of the product thereof.
Presidential Decree No. 704170 (The Fisheries Decree of 1975), approved on May 16, 1975,
allowed Filipinos engaged in commercial fishing to enter into contracts for financial, technical or
other forms of assistance with any foreign person, corporation or entity for the production,
storage, marketing and processing of fish and fishery/aquatic products.171
Presidential Decree No. 705172 (The Revised Forestry Code of the Philippines), approved on
May 19, 1975, allowed "forest products licensees, lessees, or permitees to enter into service
contracts for financial, technical, management, or other forms of assistance . . . with any foreign
person or entity for the exploration, development, exploitation or utilization of the forest
resources."173
Yet another law allowing service contracts, this time for geothermal resources, was Presidential
Decree No. 1442,174 which was signed into law on June 11, 1978. Section 1 thereof authorized

the Government to enter into service contracts for the exploration, exploitation and development
of geothermal resources with a foreign contractor who must be technically and financially
capable of undertaking the operations required in the service contract.
Thus, virtually the entire range of the country's natural resources from petroleum and minerals
to geothermal energy, from public lands and forest resources to fishery products was well
covered by apparent legal authority to engage in the direct participation or involvement of foreign
persons or corporations (otherwise disqualified) in the exploration and utilization of natural
resources through service contracts.175

A third option is found in the third paragraph of the same section:

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens,
as well as cooperative fish farming, with priority to subsistence fishermen and fish-workers in
rivers, lakes, bays, and lagoons.
While the second and third options are limited only to Filipino citizens or, in the case of the
former, to corporations or associations at least 60% of the capital of which is owned by Filipinos,
a fourth allows the participation of foreign-owned corporations. The fourth and fifth paragraphs of
Section 2 provide:

THE 1987 CONSTITUTION AND TECHNICAL OR FINANCIAL ASSISTANCE AGREEMENTS

After the February 1986 Edsa Revolution, Corazon C. Aquino took the reins of power under a
revolutionary government. On March 25, 1986, President Aquino issued Proclamation No.
3,176 promulgating the Provisional Constitution, more popularly referred to as the Freedom
Constitution. By authority of the same Proclamation, the President created a Constitutional
Commission (CONCOM) to draft a new constitution, which took effect on the date of its
ratification on February 2, 1987.177
The 1987 Constitution retained the Regalian doctrine. The first sentence of Section 2, Article XII
states: "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."
Like the 1935 and 1973 Constitutions before it, the 1987 Constitution, in the second sentence of
the same provision, prohibits the alienation of natural resources, except agricultural lands.
The third sentence of the same paragraph is new: "The exploration, development and utilization
of natural resources shall be under the full control and supervision of the State." The
constitutional policy of the State's "full control and supervision" over natural resources proceeds
from the concept of jura regalia, as well as the recognition of the importance of the country's
natural resources, not only for national economic development, but also for its security and
national defense.178 Under this provision, the State assumes "a more dynamic role" in the
exploration, development and utilization of natural resources.179
Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitutions
authorizing the State to grant licenses, concessions, or leases for the exploration, exploitation,
development, or utilization of natural resources. By such omission, the utilization of inalienable
lands of public domain through "license, concession or lease" is no longer allowed under the
1987 Constitution.180
Having omitted the provision on the concession system, Section 2 proceeded to introduce
"unfamiliar language":181
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.
Consonant with the State's "full supervision and control" over natural resources, Section 2 offers
the State two "options."182 One, the State may directly undertake these activities itself; or two, it
may enter into co-production, joint venture, or production-sharing agreements with Filipino
citizens, or entities at least 60% of whose capital is owned by such citizens.

The President may enter into agreements with foreign-owned corporations involving either
technical or financial assistance for large-scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the general terms and conditions
provided by law, based on real contributions to the economic growth and general welfare of the
country. In such agreements, the State shall promote the development and use of local scientific
and technical resources.
The President shall notify the Congress of every contract entered into in accordance with this
provision, within thirty days from its execution.
Although Section 2 sanctions the participation of foreign-owned corporations in the exploration,
development, and utilization of natural resources, it imposes certain limitations or conditions to
agreements with such corporations.
First, the parties to FTAAs. Only the President, in behalf of the State, may enter into
these agreements, and only with corporations. By contrast, under the 1973
Constitution, a Filipino citizen, corporation or association may enter into a service
contract with a "foreign person or entity."
Second, the size of the activities: only large-scale exploration, development, and
utilization is allowed. The term "large-scale usually refers to very capital-intensive
activities."183
Third, the natural resources subject of the activities is restricted to minerals, petroleum
and other mineral oils, the intent being to limit service contracts to those areas where
Filipino capital may not be sufficient.184
Fourth, consistency with the provisions of statute. The agreements must be in
accordance with the terms and conditions provided by law.
Fifth, Section 2 prescribes certain standards for entering into such agreements. The
agreements must be based on real contributions to economic growth and general
welfare of the country.
Sixth, the agreements must contain rudimentary stipulations for the promotion of the
development and use of local scientific and technical resources.
Seventh, the notification requirement. The President shall notify Congress of every
financial or technical assistance agreement entered into within thirty days from its
execution.

Finally, the scope of the agreements. While the 1973 Constitution referred to "service
contracts for financial, technical, management, or other forms of assistance" the 1987
Constitution provides for "agreements. . . involving either financial or technical
assistance." It bears noting that the phrases "service contracts" and "management or
other forms of assistance" in the earlier constitution have been omitted.
By virtue of her legislative powers under the Provisional Constitution,185 President Aquino, on
July 10, 1987, signed into law E.O. No. 211 prescribing the interim procedures in the processing
and approval of applications for the exploration, development and utilization of minerals. The
omission in the 1987 Constitution of the term "service contracts" notwithstanding, the said E.O.
still referred to them in Section 2 thereof:
Sec. 2. Applications for the exploration, development and utilization of mineral resources,
including renewal applications and applications for approval of operating agreements and mining
service contracts, shall be accepted and processed and may be approved x x x. [Emphasis
supplied.]
The same law provided in its Section 3 that the "processing, evaluation and approval of all
mining applications . . . operating agreements and service contracts . . . shall be governed by
Presidential Decree No. 463, as amended, other existing mining laws, and their implementing
rules and regulations. . . ."
As earlier stated, on the 25th also of July 1987, the President issued E.O. No. 279 by authority
of which the subject WMCP FTAA was executed on March 30, 1995.
On March 3, 1995, President Ramos signed into law R.A. No. 7942. Section 15 thereof declares
that the Act "shall govern the exploration, development, utilization, and processing of all mineral
resources." Such declaration notwithstanding, R.A. No. 7942 does not actually cover all the
modes through which the State may undertake the exploration, development, and utilization of
natural resources.
The State, being the owner of the natural resources, is accorded the primary power and
responsibility in the exploration, development and utilization thereof. As such, it may undertake
these activities through four modes:
The State may directly undertake such activities.
(2) The State may enter into co-production, joint venture or production-sharing
agreements with Filipino citizens or qualified corporations.
(3) Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens.
(4) For the large-scale exploration, development and utilization of minerals, petroleum
and other mineral oils, the President may enter into agreements with foreign-owned
corporations involving technical or financial assistance. 186
Except to charge the Mines and Geosciences Bureau of the DENR with performing researches
and surveys,187and a passing mention of government-owned or controlled corporations,188 R.A.
No. 7942 does not specify how the State should go about the first mode. The third mode, on the
other hand, is governed by Republic Act No. 7076189 (the People's Small-Scale Mining Act of

1991) and other pertinent laws.190 R.A. No. 7942 primarily concerns itself with the second and
fourth modes.
Mineral production sharing, co-production and joint venture agreements are collectively
classified by R.A. No. 7942 as "mineral agreements."191 The Government participates the least in
a mineral production sharing agreement (MPSA). In an MPSA, the Government grants the
contractor192 the exclusive right to conduct mining operations within a contract area193 and shares
in the gross output.194 The MPSA contractor provides the financing, technology, management
and personnel necessary for the agreement's implementation.195 The total government share in
an MPSA is the excise tax on mineral products under Republic Act No. 7729,196 amending
Section 151(a) of the National Internal Revenue Code, as amended.197
In a co-production agreement (CA),198 the Government provides inputs to the mining operations
other than the mineral resource,199 while in a joint venture agreement (JVA), where the
Government enjoys the greatest participation, the Government and the JVA contractor organize
a company with both parties having equity shares.200 Aside from earnings in equity, the
Government in a JVA is also entitled to a share in the gross output.201 The Government may
enter into a CA202 or JVA203 with one or more contractors. The Government's share in a CA or
JVA is set out in Section 81 of the law:
The share of the Government in co-production and joint venture agreements shall be negotiated
by the Government and the contractor taking into consideration the: (a) capital investment of the
project, (b) the risks involved, (c) contribution of the project to the economy, and (d) other factors
that will provide for a fair and equitable sharing between the Government and the contractor. The
Government shall also be entitled to compensations for its other contributions which shall be
agreed upon by the parties, and shall consist, among other things, the contractor's income tax,
excise tax, special allowance, withholding tax due from the contractor's foreign stockholders
arising from dividend or interest payments to the said foreign stockholders, in case of a foreign
national and all such other taxes, duties and fees as provided for under existing laws.
All mineral agreements grant the respective contractors the exclusive right to conduct mining
operations and to extract all mineral resources found in the contract area.204 A "qualified person"
may enter into any of the mineral agreements with the Government.205 A "qualified person" is
any citizen of the Philippines with capacity to contract, or a corporation, partnership, association,
or cooperative organized or authorized for the purpose of engaging in mining, with technical and
financial capability to undertake mineral resources development and duly registered in
accordance with law at least sixty per centum (60%) of the capital of which is owned by citizens
of the Philippines x x x.206
The fourth mode involves "financial or technical assistance agreements." An FTAA is defined as
"a contract involving financial or technical assistance for large-scale exploration, development,
and utilization of natural resources."207 Any qualified person with technical and financial
capability to undertake large-scale exploration, development, and utilization of natural resources
in the Philippines may enter into such agreement directly with the Government through the
DENR.208 For the purpose of granting an FTAA, a legally organized foreign-owned corporation
(any corporation, partnership, association, or cooperative duly registered in accordance with law
in which less than 50% of the capital is owned by Filipino citizens) 209 is deemed a "qualified
person."210
Other than the difference in contractors' qualifications, the principal distinction between mineral
agreements and FTAAs is the maximum contract area to which a qualified person may hold or
be granted.211 "Large-scale" under R.A. No. 7942 is determined by the size of the contract area,
as opposed to the amount invested (US $50,000,000.00), which was the standard under E.O.
279.

Like a CA or a JVA, an FTAA is subject to negotiation.212 The Government's contributions, in the

form of taxes, in an FTAA is identical to its contributions in the two mineral agreements, save
that in an FTAA:
The collection of Government share in financial or technical assistance agreement shall
commence after the financial or technical assistance agreement contractor has fully recovered
its pre-operating expenses, exploration, and development expenditures, inclusive.213
III
Having examined the history of the constitutional provision and statutes enacted pursuant
thereto, a consideration of the substantive issues presented by the petition is now in order.
THE EFFECTIVITY OF EXECUTIVE ORDER NO. 279
Petitioners argue that E.O. No. 279, the law in force when the WMC FTAA was executed, did not
come into effect.
E.O. No. 279 was signed into law by then President Aquino on July 25, 1987, two days before
the opening of Congress on July 27, 1987.214 Section 8 of the E.O. states that the same "shall
take effect immediately." This provision, according to petitioners, runs counter to Section 1 of
E.O. No. 200,215 which provides:
SECTION 1. Laws shall take effect after fifteen days following the completion of their publication
either in the Official Gazette or in a newspaper of general circulation in the Philippines, unless it
is otherwise provided.216[Emphasis supplied.]
On that premise, petitioners contend that E.O. No. 279 could have only taken effect fifteen days
after its publication at which time Congress had already convened and the President's power to
legislate had ceased.
Respondents, on the other hand, counter that the validity of E.O. No. 279 was settled in Miners
Association of the Philippines v. Factoran, supra. This is of course incorrect for the issue in
Miners Association was not the validity of E.O. No. 279 but that of DAO Nos. 57 and 82 which
were issued pursuant thereto.
Nevertheless, petitioners' contentions have no merit.
It bears noting that there is nothing in E.O. No. 200 that prevents a law from taking effect on a
date other than even before the 15-day period after its publication. Where a law provides for
its own date of effectivity, such date prevails over that prescribed by E.O. No. 200. Indeed, this is
the very essence of the phrase "unless it is otherwise provided" in Section 1 thereof. Section 1,
E.O. No. 200, therefore, applies only when a statute does not provide for its own date of
effectivity.
What is mandatory under E.O. No. 200, and what due process requires, as this Court held in
Taada v. Tuvera,217 is the publication of the law for without such notice and publication, there
would be no basis for the application of the maxim "ignorantia legis n[eminem] excusat." It would
be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of
which he had no notice whatsoever, not even a constructive one.

While the effectivity clause of E.O. No. 279 does not require its publication, it is not a ground for
its invalidation since the Constitution, being "the fundamental, paramount and supreme law of
the nation," is deemed written in the law.218 Hence, the due process clause,219 which, so Taada
held, mandates the publication of statutes, is read into Section 8 of E.O. No. 279. Additionally,
Section 1 of E.O. No. 200 which provides for publication "either in the Official Gazette or in a
newspaper of general circulation in the Philippines," finds suppletory application. It is significant
to note that E.O. No. 279 was actually published in the Official Gazette 220 on August 3, 1987.
From a reading then of Section 8 of E.O. No. 279, Section 1 of E.O. No. 200, and Taada v.
Tuvera, this Court holds that E.O. No. 279 became effective immediately upon its publication in
the Official Gazette on August 3, 1987.
That such effectivity took place after the convening of the first Congress is irrelevant. At the time
President Aquino issued E.O. No. 279 on July 25, 1987, she was still validly exercising
legislative powers under the Provisional Constitution.221 Article XVIII (Transitory Provisions) of
the 1987 Constitution explicitly states:
Sec. 6. The incumbent President shall continue to exercise legislative powers until the first
Congress is convened.
The convening of the first Congress merely precluded the exercise of legislative powers by
President Aquino; it did not prevent the effectivity of laws she had previously enacted.
There can be no question, therefore, that E.O. No. 279 is an effective, and a validly enacted,
statute.
THE CONSTITUTIONALITY OF THE WMCP FTAA
Petitioners submit that, in accordance with the text of Section 2, Article XII of the Constitution,
FTAAs should be limited to "technical or financial assistance" only. They observe, however, that,
contrary to the language of the Constitution, the WMCP FTAA allows WMCP, a fully foreignowned mining corporation, to extend more than mere financial or technical assistance to the
State, for it permits WMCP to manage and operate every aspect of the mining activity. 222
Petitioners' submission is well-taken. It is a cardinal rule in the interpretation of constitutions that
the instrument must be so construed as to give effect to the intention of the people who adopted
it.223 This intention is to be sought in the constitution itself, and the apparent meaning of the
words is to be taken as expressing it, except in cases where that assumption would lead to
absurdity, ambiguity, or contradiction.224 What the Constitution says according to the text of the
provision, therefore, compels acceptance and negates the power of the courts to alter it, based
on the postulate that the framers and the people mean what they say.225 Accordingly, following
the literal text of the Constitution, assistance accorded by foreign-owned corporations in the
large-scale exploration, development, and utilization of petroleum, minerals and mineral oils
should be limited to "technical" or "financial" assistance only.
WMCP nevertheless submits that the word "technical" in the fourth paragraph of Section 2 of
E.O. No. 279 encompasses a "broad number of possible services," perhaps, "scientific and/or
technological in basis."226 It thus posits that it may also well include "the area of management or
operations . . . so long as such assistance requires specialized knowledge or skills, and are
related to the exploration, development and utilization of mineral resources."227
This Court is not persuaded. As priorly pointed out, the phrase "management or other forms of
assistance" in the 1973 Constitution was deleted in the 1987 Constitution, which allows only

"technical or financial assistance." Casus omisus pro omisso habendus est. A person, object or
thing omitted from an enumeration must be held to have been omitted intentionally.228 As will be
shown later, the management or operation of mining activities by foreign contractors, which is
the primary feature of service contracts, was precisely the evil that the drafters of the 1987
Constitution sought to eradicate.
Respondents insist that "agreements involving technical or financial assistance" is just another
term for service contracts. They contend that the proceedings of the CONCOM indicate "that
although the terminology 'service contract' was avoided [by the Constitution], the concept it
represented was not." They add that "[t]he concept is embodied in the phrase 'agreements
involving financial or technical assistance.'"229 And point out how members of the CONCOM
referred to these agreements as "service contracts." For instance:

MR. NOLLEDO. While there are objectionable provisions in the Article on National
Economy and Patrimony, going over said provisions meticulously, setting aside
prejudice and personalities will reveal that the article contains a balanced set of
provisions. I hope the forthcoming Congress will implement such provisions taking into
account that Filipinos should have real control over our economy and patrimony, and if
foreign equity is permitted, the same must be subordinated to the imperative demands
of the national interest.
x x x.

SR. TAN. Am I correct in thinking that the only difference between these future service
contracts and the past service contracts under Mr. Marcos is the general law to be
enacted by the legislature and the notification of Congress by the President? That is
the only difference, is it not?

It is also my understanding that service contracts involving foreign corporations or

entities are resorted to only when no Filipino enterprise or Filipino-controlled
enterprise could possibly undertake the exploration or exploitation of our natural
resources and that compensation under such contracts cannot and should not equal
what should pertain to ownership of capital. In other words, the service contract
should not be an instrument to circumvent the basic provision, that the exploration and
exploitation of natural resources should be truly for the benefit of Filipinos.

MR. VILLEGAS. That is right.

Thank you, and I vote yes.233 [Emphasis supplied.]

SR. TAN. So those are the safeguards[?]

x x x.

MR. VILLEGAS. Yes. There was no law at all governing service contracts before.

MR. TADEO. Nais ko lamang ipaliwanag ang aking boto.

SR. TAN. Thank you, Madam President.230 [Emphasis supplied.]

MR. GARCIA. Thank you.

Matapos suriin ang kalagayan ng Pilipinas, ang saligang suliranin, pangunahin ang
salitang "imperyalismo." Ang ibig sabihin nito ay ang sistema ng lipunang
pinaghaharian ng iilang monopolyong kapitalista at ang salitang "imperyalismo" ay
buhay na buhay sa National Economy and Patrimony na nating ginawa. Sa
pamamagitan ng salitang "based on," naroroon na ang free trade sapagkat tayo ay
mananatiling tagapagluwas ng hilaw na sangkap at tagaangkat ng yaring produkto.
Pangalawa, naroroon pa rin ang parity rights, ang service contract, ang 60-40 equity
sa natural resources. Habang naghihirap ang sambayanang Pilipino, ginagalugad
naman ng mga dayuhan ang ating likas na yaman. Kailan man ang Article on National
Economy and Patrimony ay hindi nagpaalis sa pagkaalipin ng ating ekonomiya sa
kamay ng mga dayuhan. Ang solusyon sa suliranin ng bansa ay dalawa lamang: ang
pagpapatupad ng tunay na reporma sa lupa at ang national industrialization. Ito ang
tinatawag naming pagsikat ng araw sa Silangan. Ngunit ang mga landlords and big
businessmen at ang mga komprador ay nagsasabi na ang free trade na ito, ang
kahulugan para sa amin, ay ipinipilit sa ating sambayanan na ang araw ay sisikat sa
Kanluran. Kailan man hindi puwedeng sumikat ang araw sa Kanluran. I vote
no.234 [Emphasis supplied.]

I vote no. x x x.

This Court is likewise not persuaded.

WMCP also cites the following statements of Commissioners Gascon, Garcia, Nolledo
and Tadeo who alluded to service contracts as they explained their respective votes in
the approval of the draft Article:
MR. GASCON. Mr. Presiding Officer, I vote no primarily because of two reasons: One,
the provision on service contracts. I felt that if we would constitutionalize any provision
on service contracts, this should always be with the concurrence of Congress and not
guided only by a general law to be promulgated by Congress. x x x.231 [Emphasis
supplied.]
x x x.

Service contracts are given constitutional legitimization in Section 3, even when they
have been proven to be inimical to the interests of the nation, providing as they do the
legal loophole for the exploitation of our natural resources for the benefit of foreign
interests. They constitute a serious negation of Filipino control on the use and
disposition of the nation's natural resources, especially with regard to those which are
nonrenewable.232 [Emphasis supplied.]
xxx

As earlier noted, the phrase "service contracts" has been deleted in the 1987 Constitution's
Article on National Economy and Patrimony. If the CONCOM intended to retain the concept of
service contracts under the 1973 Constitution, it could have simply adopted the old terminology
("service contracts") instead of employing new and unfamiliar terms ("agreements . . . involving
either technical or financial assistance"). Such a difference between the language of a provision
in a revised constitution and that of a similar provision in the preceding constitution is viewed as
indicative of a difference in purpose.235 If, as respondents suggest, the concept of "technical or
financial assistance" agreements is identical to that of "service contracts," the CONCOM would
not have bothered to fit the same dog with a new collar. To uphold respondents' theory would

reduce the first to a mere euphemism for the second and render the change in phraseology
meaningless.

x x x.
MS. QUESADA. Going back to Section 3, the section suggests that:

An examination of the reason behind the change confirms that technical or financial assistance
agreements are not synonymous to service contracts.
[T]he Court in construing a Constitution should bear in mind the object sought to be
accomplished by its adoption, and the evils, if any, sought to be prevented or remedied. A
doubtful provision will be examined in light of the history of the times, and the condition and
circumstances under which the Constitution was framed. The object is to ascertain the reason
which induced the framers of the Constitution to enact the particular provision and the purpose
sought to be accomplished thereby, in order to construe the whole as to make the words
consonant to that reason and calculated to effect that purpose.236
As the following question of Commissioner Quesada and Commissioner Villegas' answer shows
the drafters intended to do away with service contracts which were used to circumvent the
capitalization (60%-40%) requirement:
MS. QUESADA. The 1973 Constitution used the words "service contracts." In this
particular Section 3, is there a safeguard against the possible control of foreign
interests if the Filipinos go into coproduction with them?
MR. VILLEGAS. Yes. In fact, the deletion of the phrase "service contracts" was our
first attempt to avoid some of the abuses in the past regime in the use of service
contracts to go around the 60-40 arrangement. The safeguard that has been
introduced and this, of course can be refined is found in Section 3, lines 25 to 30,
where Congress will have to concur with the President on any agreement entered into
between a foreign-owned corporation and the government involving technical or
financial assistance for large-scale exploration, development and utilization of natural
resources.237 [Emphasis supplied.]
In a subsequent discussion, Commissioner Villegas allayed the fears of Commissioner
Quesada regarding the participation of foreign interests in Philippine natural
resources, which was supposed to be restricted to Filipinos.

The exploration, development, and utilization of natural resources may be directly undertaken
by the State, or it may enter into co-production, joint venture or production-sharing agreement
with . . . corporations or associations at least sixty per cent of whose voting stock or controlling
interest is owned by such citizens.
Lines 25 to 30, on the other hand, suggest that in the large-scale exploration, development and
utilization of natural resources, the President with the concurrence of Congress may enter into
agreements with foreign-owned corporations even for technical or financial assistance.
I wonder if this part of Section 3 contradicts the second part. I am raising this point for fear that
foreign investors will use their enormous capital resources to facilitate the actual exploitation or
exploration, development and effective disposition of our natural resources to the detriment of
Filipino investors. I am not saying that we should not consider borrowing money from foreign
sources. What I refer to is that foreign interest should be allowed to participate only to the extent
that they lend us money and give us technical assistance with the appropriate government
permit. In this way, we can insure the enjoyment of our natural resources by our own people.
MR. VILLEGAS. Actually, the second provision about the President does not permit foreign
investors to participate. It is only technical or financial assistance they do not own anything
but on conditions that have to be determined by law with the concurrence of Congress. So, it is
very restrictive.
If the Commissioner will remember, this removes the possibility for service contracts which we
said yesterday were avenues used in the previous regime to go around the 60-40
requirement.238 [Emphasis supplied.]
The present Chief Justice, then a member of the CONCOM, also referred to this limitation in
scope in proposing an amendment to the 60-40 requirement:
MR. DAVIDE. May I be allowed to explain the proposal?

MS. QUESADA. Another point of clarification is the phrase "and utilization of natural
resources shall be under the full control and supervision of the State." In the 1973
Constitution, this was limited to citizens of the Philippines; but it was removed and
substituted by "shall be under the full control and supervision of the State." Was the
concept changed so that these particular resources would be limited to citizens of the
Philippines? Or would these resources only be under the full control and supervision
of the State; meaning, noncitizens would have access to these natural resources? Is
that the understanding?
MR. VILLEGAS. No, Mr. Vice-President, if the Commissioner reads the next sentence,
it states:
Such activities may be directly undertaken by the State, or it may enter into co-production, joint
venture, production-sharing agreements with Filipino citizens.
So we are still limiting it only to Filipino citizens.

MR. MAAMBONG. Subject to the three-minute rule, Madam President.

MR. DAVIDE. It will not take three minutes.
The Commission had just approved the Preamble. In the Preamble we clearly stated that the
Filipino people are sovereign and that one of the objectives for the creation or establishment of a
government is to conserve and develop the national patrimony. The implication is that the
national patrimony or our natural resources are exclusively reserved for the Filipino people. No
alien must be allowed to enjoy, exploit and develop our natural resources. As a matter of fact,
that principle proceeds from the fact that our natural resources are gifts from God to the Filipino
people and it would be a breach of that special blessing from God if we will allow aliens to
exploit our natural resources.
I voted in favor of the Jamir proposal because it is not really exploitation that we granted to the
alien corporations but only for them to render financial or technical assistance. It is not for them
to enjoy our natural resources. Madam President, our natural resources are depleting; our
population is increasing by leaps and bounds. Fifty years from now, if we will allow these aliens

to exploit our natural resources, there will be no more natural resources for the next generations
of Filipinos. It may last long if we will begin now. Since 1935 the aliens have been allowed to
enjoy to a certain extent the exploitation of our natural resources, and we became victims of
foreign dominance and control. The aliens are interested in coming to the Philippines because
they would like to enjoy the bounty of nature exclusively intended for Filipinos by God.
And so I appeal to all, for the sake of the future generations, that if we have to pray in the
Preamble "to preserve and develop the national patrimony for the sovereign Filipino people and
for the generations to come," we must at this time decide once and for all that our natural
resources must be reserved only to Filipino citizens.
Thank you.239 [Emphasis supplied.]
The opinion of another member of the CONCOM is persuasive240 and leaves no doubt as to the
intention of the framers to eliminate service contracts altogether. He writes:
Paragraph 4 of Section 2 specifies large-scale, capital-intensive, highly technological
undertakings for which the President may enter into contracts with foreign-owned corporations,
and enunciates strict conditions that should govern such contracts. x x x.
This provision balances the need for foreign capital and technology with the need to maintain the
national sovereignty. It recognizes the fact that as long as Filipinos can formulate their own
terms in their own territory, there is no danger of relinquishing sovereignty to foreign interests.
Are service contracts allowed under the new Constitution? No. Under the new Constitution,
foreign investors (fully alien-owned) can NOT participate in Filipino enterprises except to
provide: (1) Technical Assistance for highly technical enterprises; and (2) Financial Assistance
for large-scale enterprises.
The intent of this provision, as well as other provisions on foreign investments, is to prevent the
practice (prevalent in the Marcos government) of skirting the 60/40 equation using the cover of
service contracts.241[Emphasis supplied.]
Furthermore, it appears that Proposed Resolution No. 496,242 which was the draft Article on
National Economy and Patrimony, adopted the concept of "agreements . . . involving either
technical or financial assistance" contained in the "Draft of the 1986 U.P. Law Constitution
Project" (U.P. Law draft) which was taken into consideration during the deliberation of the
CONCOM.243 The former, as well as Article XII, as adopted, employed the same terminology, as
the comparative table below shows:

DRAFT OF THE UP
LAW CONSTITUTION
PROJECT

PROPOSED
RESOLUTION NO.
496 OF THE
CONSTITUTIONAL
COMMISSION

ARTICLE XII OF THE

1987 CONSTITUTION

Sec. 1. All lands of the

public domain, waters,
minerals, coal,
petroleum and other
mineral oils, all forces
of potential energy,
fisheries, flora and
fauna and other natural
resources of the
Philippines 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. Such activities
may be directly
undertaken by the
state, or it may enter
into co-production, joint
venture, production
sharing agreements
with Filipino citizens or
corporations or
associations sixty per
cent of whose voting
stock or controlling
interest is owned by
such citizens for a
period of not more than
twenty-five years,
renewable for not more
than twenty-five years
and under such terms
and conditions as may
be provided by law. In
case as to 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.
The National Assembly

Sec. 3. All lands of the

public domain, waters,
minerals, coal,
petroleum and other
mineral oils, all forces
of potential energy,
fisheries, forests, 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. Such activities
may be directly
undertaken by the
State, or it may enter
into co-production, joint
venture, productionsharing agreements
with Filipino citizens or
corporations or
associations at least
sixty per cent of whose
voting stock or
controlling interest is
owned by such
citizens. Such
agreements shall be for
a period of twenty-five
years, renewable for
not more than twentyfive years, and under
such term 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
for water power,
beneficial use may be
the measure and limit
of the grant.

Sec. 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 coproduction, joint
venture, or productionsharing 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
case 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.
The State shall protect
the nation's marine

may by law allow small

scale utilization of
natural resources by
Filipino citizens.
The National Assembly,
may, by two-thirds vote
of all its members by
special law provide the
terms and conditions
under which a foreignowned corporation may
enter into agreements
with the government
involving either
technical or financial
assistance for largescale exploration,
development, or
utilization of natural
resources. [Emphasis
supplied.]

The Congress may by

law allow small-scale
utilization of natural
resources by Filipino
citizens, as well as
cooperative fish
farming in rivers, lakes,
bays, and lagoons.

wealth in its
archipelagic waters,
territorial sea, and
exclusive economic
zone, and reserve its
use and enjoyment
exclusively to Filipino
citizens.

The President with the

concurrence of
Congress, by special
law, shall provide the
terms and conditions
under which a foreignowned corporation may
enter into agreements
with the government
involving either
technical or financial
assistance for largescale exploration,
development, and
utilization of natural
resources. [Emphasis
supplied.]

The Congress may, by

law, allow small-scale
utilization of natural
resources by Filipino
citizens, as well as
cooperative fish
farming, with priority to
subsistence fishermen
and fish-workers in
rivers, lakes, bays, and
lagoons.

thirty days from its

execution.

The insights of the proponents of the U.P. Law draft are, therefore, instructive in interpreting the
phrase "technical or financial assistance."
In his position paper entitled Service Contracts: Old Wine in New Bottles?, Professor Pacifico A.
Agabin, who was a member of the working group that prepared the U.P. Law draft, criticized
service contracts for they "lodge exclusive management and control of the enterprise to the
service contractor, which is reminiscent of the old concession regime. Thus, notwithstanding the
provision of the Constitution that natural resources belong to the State, and that these shall not
be alienated, the service contract system renders nugatory the constitutional provisions
cited."244 He elaborates:
Looking at the Philippine model, we can discern the following vestiges of the concession regime,
thus:

The President may

enter into agreements
with foreign-owned
corporations
involving either
technical or financial
assistance for largescale exploration,
development, and
utilization of minerals,
petroleum, and other
mineral oils according
to the general terms
and conditions
provided by law, based
on real contributions to
the economic growth
and general welfare of
the country. In such
agreements, the State
shall promote the
development and use
of local scientific and
technical resources.
[Emphasis supplied.]

1. Bidding of a selected area, or leasing the choice of the area to the interested party
and then negotiating the terms and conditions of the contract; (Sec. 5, P.D. 87)

The President shall

notify the Congress of
every contract entered
into in accordance with
this provision, within

In short, our version of the service contract is just a rehash of the old concession regime x x x.
Some people have pulled an old rabbit out of a magician's hat, and foisted it upon us as a new
and different animal.

2. Management of the enterprise vested on the contractor, including operation of the

field if petroleum is discovered; (Sec. 8, P.D. 87)
3. Control of production and other matters such as expansion and development; (Sec.
8)
4. Responsibility for downstream operations marketing, distribution, and processing
may be with the contractor (Sec. 8);
5. Ownership of equipment, machinery, fixed assets, and other properties remain with
contractor (Sec. 12, P.D. 87);
6. Repatriation of capital and retention of profits abroad guaranteed to the contractor
(Sec. 13, P.D. 87); and
7. While title to the petroleum discovered may nominally be in the name of the
government, the contractor has almost unfettered control over its disposition and sale,
and even the domestic requirements of the country is relegated to a pro rata basis
(Sec. 8).

The service contract as we know it here is antithetical to the principle of sovereignty over our
natural resources restated in the same article of the [1973] Constitution containing the provision

for service contracts. If the service contractor happens to be a foreign corporation, the contract
would also run counter to the constitutional provision on nationalization or Filipinization, of the
exploitation of our natural resources.245 [Emphasis supplied. Underscoring in the original.]
Professor Merlin M. Magallona, also a member of the working group, was harsher in his
reproach of the system:
x x x the nationalistic phraseology of the 1935 [Constitution] was retained by the [1973] Charter,
but the essence of nationalism was reduced to hollow rhetoric. The 1973 Charter still provided
that the exploitation or development of the country's natural resources be limited to Filipino
citizens or corporations owned or controlled by them. However, the martial-law Constitution
allowed them, once these resources are in their name, to enter into service contracts with
foreign investors for financial, technical, management, or other forms of assistance. Since
foreign investors have the capital resources, the actual exploitation and development, as well as
the effective disposition, of the country's natural resources, would be under their direction, and
control, relegating the Filipino investors to the role of second-rate partners in joint ventures.
Through the instrumentality of the service contract, the 1973 Constitution had legitimized at the
highest level of state policy that which was prohibited under the 1973 Constitution, namely: the
exploitation of the country's natural resources by foreign nationals. The drastic impact of [this]
constitutional change becomes more pronounced when it is considered that the active party to
any service contract may be a corporation wholly owned by foreign interests. In such a case, the
citizenship requirement is completely set aside, permitting foreign corporations to obtain actual
possession, control, and [enjoyment] of the country's natural resources.246[Emphasis supplied.]
Accordingly, Professor Agabin recommends that:
Recognizing the service contract for what it is, we have to expunge it from the Constitution and
reaffirm ownership over our natural resources. That is the only way we can exercise effective
control over our natural resources.
This should not mean complete isolation of the country's natural resources from foreign
investment. Other contract forms which are less derogatory to our sovereignty and control over
natural resources like technical assistance agreements, financial assistance [agreements], coproduction agreements, joint ventures, production-sharing could still be utilized and adopted
without violating constitutional provisions. In other words, we can adopt contract forms which
recognize and assert our sovereignty and ownership over natural resources, and where the
foreign entity is just a pure contractor instead of the beneficial owner of our economic
resources.247[Emphasis supplied.]
Still another member of the working group, Professor Eduardo Labitag, proposed that:
2. Service contracts as practiced under the 1973 Constitution should be discouraged, instead
the government may be allowed, subject to authorization by special law passed by an
extraordinary majority to enter into either technical or financial assistance. This is justified by the
fact that as presently worded in the 1973 Constitution, a service contract gives full control over
the contract area to the service contractor, for him to work, manage and dispose of the proceeds
or production. It was a subterfuge to get around the nationality requirement of the
constitution.248 [Emphasis supplied.]
In the annotations on the proposed Article on National Economy and Patrimony, the U.P. Law
draft summarized the rationale therefor, thus:

5. The last paragraph is a modification of the service contract provision found in Section 9,
Article XIV of the 1973 Constitution as amended. This 1973 provision shattered the framework of
nationalism in our fundamental law (see Magallona, "Nationalism and its Subversion in the
Constitution"). Through the service contract, the 1973 Constitution had legitimized that which
was prohibited under the 1935 constitutionthe exploitation of the country's natural resources
by foreign nationals. Through the service contract, acts prohibited by the Anti-Dummy Law were
recognized as legitimate arrangements. Service contracts lodge exclusive management and
control of the enterprise to the service contractor, not unlike the old concession regime where
the concessionaire had complete control over the country's natural resources, having been given
exclusive and plenary rights to exploit a particular resource and, in effect, having been assured
of ownership of that resource at the point of extraction (see Agabin, "Service Contracts: Old
Wine in New Bottles"). Service contracts, hence, are antithetical to the principle of sovereignty
over our natural resources, as well as the constitutional provision on nationalization or
Filipinization of the exploitation of our natural resources.
Under the proposed provision, only technical assistance or financial assistance agreements may
be entered into, and only for large-scale activities. These are contract forms which recognize
and assert our sovereignty and ownership over natural resources since the foreign entity is just
a pure contractor and not a beneficial owner of our economic resources. The proposal
recognizes the need for capital and technology to develop our natural resources without
sacrificing our sovereignty and control over such resources by the safeguard of a special law
which requires two-thirds vote of all the members of the Legislature. This will ensure that such
agreements will be debated upon exhaustively and thoroughly in the National Assembly to avert
prejudice to the nation.249[Emphasis supplied.]
The U.P. Law draft proponents viewed service contracts under the 1973 Constitution as grants of
beneficial ownership of the country's natural resources to foreign owned corporations. While, in
theory, the State owns these natural resources and Filipino citizens, their beneficiaries
service contracts actually vested foreigners with the right to dispose, explore for, develop,
exploit, and utilize the same. Foreigners, not Filipinos, became the beneficiaries of Philippine
natural resources. This arrangement is clearly incompatible with the constitutional ideal of
nationalization of natural resources, with the Regalian doctrine, and on a broader perspective,
with Philippine sovereignty.
The proponents nevertheless acknowledged the need for capital and technical know-how in the
large-scale exploitation, development and utilization of natural resources the second
paragraph of the proposed draft itself being an admission of such scarcity. Hence, they
recommended a compromise to reconcile the nationalistic provisions dating back to the 1935
Constitution, which reserved all natural resources exclusively to Filipinos, and the more liberal
1973 Constitution, which allowed foreigners to participate in these resources through service
contracts. Such a compromise called for the adoption of a new system in the exploration,
development, and utilization of natural resources in the form of technical agreements or financial
agreements which, necessarily, are distinct concepts from service contracts.
The replacement of "service contracts" with "agreements involving either technical or financial
assistance," as well as the deletion of the phrase "management or other forms of assistance,"
assumes greater significance when note is taken that the U.P. Law draft proposed other equally
crucial changes that were obviously heeded by the CONCOM. These include the abrogation of
the concession system and the adoption of new "options" for the State in the exploration,
development, and utilization of natural resources. The proponents deemed these changes to be
more consistent with the State's ownership of, and its "full control and supervision" (a phrase
also employed by the framers) over, such resources. The Project explained:
3. In line with the State ownership of natural resources, the State should take a more active role
in the exploration, development, and utilization of natural resources, than the present practice of
granting licenses, concessions, or leases hence the provision that said activities shall be under

the full control and supervision of the State. There are three major schemes by which the State
could undertake these activities: first, directly by itself; second, by virtue of co-production, joint
venture, production sharing agreements with Filipino citizens or corporations or associations
sixty per cent (60%) of the voting stock or controlling interests of which are owned by such
citizens; or third, with a foreign-owned corporation, in cases of large-scale exploration,
development, or utilization of natural resources through agreements involving either technical or
financial assistance only. x x x.
At present, under the licensing concession or lease schemes, the government benefits from
such benefits only through fees, charges, ad valorem taxes and income taxes of the exploiters of
our natural resources. Such benefits are very minimal compared with the enormous profits
reaped by theses licensees, grantees, concessionaires. Moreover, some of them disregard the
conservation of natural resources and do not protect the environment from degradation. The
proposed role of the State will enable it to a greater share in the profits it can also actively
husband its natural resources and engage in developmental programs that will be beneficial to
them.
4. Aside from the three major schemes for the exploration, development, and utilization of our
natural resources, the State may, by law, allow Filipino citizens to explore, develop, utilize
natural resources in small-scale. This is in recognition of the plight of marginal fishermen, forest
dwellers, gold panners, and others similarly situated who exploit our natural resources for their
daily sustenance and survival.250
Professor Agabin, in particular, after taking pains to illustrate the similarities between the two
systems, concluded that the service contract regime was but a "rehash" of the concession
system. "Old wine in new bottles," as he put it. The rejection of the service contract regime,
therefore, is in consonance with the abolition of the concession system.
In light of the deliberations of the CONCOM, the text of the Constitution, and the adoption of
other proposed changes, there is no doubt that the framers considered and shared the intent of
the U.P. Law proponents in employing the phrase "agreements . . . involving either technical or
financial assistance."
While certain commissioners may have mentioned the term "service contracts" during the
CONCOM deliberations, they may not have been necessarily referring to the concept of service
contracts under the 1973 Constitution. As noted earlier, "service contracts" is a term that
assumes different meanings to different people.251 The commissioners may have been using the
term loosely, and not in its technical and legal sense, to refer, in general, to agreements
concerning natural resources entered into by the Government with foreign corporations. These
loose statements do not necessarily translate to the adoption of the 1973 Constitution provision
allowing service contracts.
It is true that, as shown in the earlier quoted portions of the proceedings in CONCOM, in
response to Sr. Tan's question, Commissioner Villegas commented that, other than
congressional notification, the only difference between "future" and "past" "service contracts" is
the requirement of a general law as there were no laws previously authorizing the
same.252 However, such remark is far outweighed by his more categorical statement in his
exchange with Commissioner Quesada that the draft article "does not permit foreign investors to
participate" in the nation's natural resources which was exactly what service contracts did
except to provide "technical or financial assistance."253
In the case of the other commissioners, Commissioner Nolledo himself clarified in his work that
the present charter prohibits service contracts.254 Commissioner Gascon was not totally averse
to foreign participation, but favored stricter restrictions in the form of majority congressional
concurrence.255 On the other hand, Commissioners Garcia and Tadeo may have veered to the

extreme side of the spectrum and their objections may be interpreted as votes against any
foreign participation in our natural resources whatsoever.
WMCP cites Opinion No. 75, s. 1987,256 and Opinion No. 175, s. 1990257 of the Secretary of
Justice, expressing the view that a financial or technical assistance agreement "is no different in
concept" from the service contract allowed under the 1973 Constitution. This Court is not,
however, bound by this interpretation. When an administrative or executive agency renders an
opinion or issues a statement of policy, it merely interprets a pre-existing law; and the
administrative interpretation of the law is at best advisory, for it is the courts that finally determine
what the law means.258
In any case, the constitutional provision allowing the President to enter into FTAAs with foreignowned corporations is an exception to the rule that participation in the nation's natural resources
is reserved exclusively to Filipinos. Accordingly, such provision must be construed strictly against
their enjoyment by non-Filipinos. As Commissioner Villegas emphasized, the provision is "very
restrictive."259 Commissioner Nolledo also remarked that "entering into service contracts is an
exception to the rule on protection of natural resources for the interest of the nation and,
therefore, being an exception, it should be subject, whenever possible, to stringent
rules."260Indeed, exceptions should be strictly but reasonably construed; they extend only so far
as their language fairly warrants and all doubts should be resolved in favor of the general
provision rather than the exception.261
With the foregoing discussion in mind, this Court finds that R.A. No. 7942 is invalid insofar as
said Act authorizes service contracts. Although the statute employs the phrase "financial and
technical agreements" in accordance with the 1987 Constitution, it actually treats these
agreements as service contracts that grant beneficial ownership to foreign contractors contrary
to the fundamental law.
Section 33, which is found under Chapter VI (Financial or Technical Assistance Agreement) of
R.A. No. 7942 states:
SEC. 33. Eligibility.Any qualified person with technical and financial capability to undertake
large-scale exploration, development, and utilization of mineral resources in the Philippines may
enter into a financial or technical assistance agreement directly with the Government through the
Department. [Emphasis supplied.]
"Exploration," as defined by R.A. No. 7942,
means the searching or prospecting for mineral resources by geological, geochemical or
geophysical surveys, remote sensing, test pitting, trending, drilling, shaft sinking, tunneling or
any other means for the purpose of determining the existence, extent, quantity and quality
thereof and the feasibility of mining them for profit.262
A legally organized foreign-owned corporation may be granted an exploration permit, 263 which
vests it with the right to conduct exploration for all minerals in specified areas,264 i.e., to enter,
occupy and explore the same.265Eventually, the foreign-owned corporation, as such permittee,
may apply for a financial and technical assistance agreement.266
"Development" is the work undertaken to explore and prepare an ore body or a mineral deposit
for mining, including the construction of necessary infrastructure and related facilities.267
"Utilization" "means the extraction or disposition of minerals."268 A stipulation that the proponent
shall dispose of the minerals and byproducts produced at the highest price and more

advantageous terms and conditions as provided for under the implementing rules and
regulations is required to be incorporated in every FTAA.269
A foreign-owned/-controlled corporation may likewise be granted a mineral processing
permit.270 "Mineral processing" is the milling, beneficiation or upgrading of ores or minerals and
rocks or by similar means to convert the same into marketable products.271
An FTAA contractor makes a warranty that the mining operations shall be conducted in
accordance with the provisions of R.A. No. 7942 and its implementing rules272 and for work
programs and minimum expenditures and commitments.273 And it obliges itself to furnish the
Government records of geologic, accounting, and other relevant data for its mining operation.274
"Mining operation," as the law defines it, means mining activities involving exploration, feasibility,
development, utilization, and processing.275
The underlying assumption in all these provisions is that the foreign contractor manages the
mineral resources, just like the foreign contractor in a service contract.
Furthermore, Chapter XII of the Act grants foreign contractors in FTAAs the same auxiliary
mining rights that it grants contractors in mineral agreements (MPSA, CA and
JV).276 Parenthetically, Sections 72 to 75 use the term "contractor," without distinguishing
between FTAA and mineral agreement contractors. And so does "holders of mining rights" in
Section 76. A foreign contractor may even convert its FTAA into a mineral agreement if the
economic viability of the contract area is found to be inadequate to justify large-scale mining
operations,277provided that it reduces its equity in the corporation, partnership, association or
cooperative to forty percent (40%).278
Finally, under the Act, an FTAA contractor warrants that it "has or has access to all the financing,
managerial, and technical expertise. . . ."279 This suggests that an FTAA contractor is bound to
provide some management assistance a form of assistance that has been eliminated and,
therefore, proscribed by the present Charter.
By allowing foreign contractors to manage or operate all the aspects of the mining operation, the
above-cited provisions of R.A. No. 7942 have in effect conveyed beneficial ownership over the
nation's mineral resources to these contractors, leaving the State with nothing but bare title
thereto.
Moreover, the same provisions, whether by design or inadvertence, permit a circumvention of
the constitutionally ordained 60%-40% capitalization requirement for corporations or
associations engaged in the exploitation, development and utilization of Philippine natural
resources.
In sum, the Court finds the following provisions of R.A. No. 7942 to be violative of Section 2,
Article XII of the Constitution:
(1) The proviso in Section 3 (aq), which defines "qualified person," to wit:
Provided, That a legally organized foreign-owned corporation shall be deemed a
qualified person for purposes of granting an exploration permit, financial or technical
assistance agreement or mineral processing permit.

(2) Section 23,280 which specifies the rights and obligations of an exploration
permittee, insofar as said section applies to a financial or technical assistance
agreement,
(3) Section 33, which prescribes the eligibility of a contractor in a financial or technical
assistance agreement;
(4) Section 35,281 which enumerates the terms and conditions for every financial or
technical assistance agreement;
(5) Section 39,282 which allows the contractor in a financial and technical assistance
agreement to convert the same into a mineral production-sharing agreement;
(6) Section 56,283 which authorizes the issuance of a mineral processing permit to a
contractor in a financial and technical assistance agreement;
The following provisions of the same Act are likewise void as they are dependent on the
foregoing provisions and cannot stand on their own:
(1) Section 3 (g),284 which defines the term "contractor," insofar as it applies to a
financial or technical assistance agreement.
Section 34,285 which prescribes the maximum contract area in a financial or technical
assistance agreements;
Section 36,286 which allows negotiations for financial or technical assistance
agreements;
Section 37,287 which prescribes the procedure for filing and evaluation of financial or
technical assistance agreement proposals;
Section 38,288 which limits the term of financial or technical assistance agreements;
Section 40,289 which allows the assignment or transfer of financial or technical
assistance agreements;
Section 41,290 which allows the withdrawal of the contractor in an FTAA;
The second and third paragraphs of Section 81,291 which provide for the Government's
share in a financial and technical assistance agreement; and
Section 90,292 which provides for incentives to contractors in FTAAs insofar as it
applies to said contractors;
When the parts of the statute are so mutually dependent and connected as conditions,
considerations, inducements, or compensations for each other, as to warrant a belief that the
legislature intended them as a whole, and that if all could not be carried into effect, the
legislature would not pass the residue independently, then, if some parts are unconstitutional, all
the provisions which are thus dependent, conditional, or connected, must fall with them.293

There can be little doubt that the WMCP FTAA itself is a service contract.
Section 1.3 of the WMCP FTAA grants WMCP "the exclusive right to explore, exploit, utilise[,]
process and dispose of all Minerals products and by-products thereof that may be produced
from the Contract Area."294 The FTAA also imbues WMCP with the following rights:
(b) to extract and carry away any Mineral samples from the Contract area for the
purpose of conducting tests and studies in respect thereof;
(c) to determine the mining and treatment processes to be utilised during the
Development/Operating Period and the project facilities to be constructed during the
Development and Construction Period;
(d) have the right of possession of the Contract Area, with full right of ingress and
egress and the right to occupy the same, subject to the provisions of Presidential
Decree No. 512 (if applicable) and not be prevented from entry into private ands by
surface owners and/or occupants thereof when prospecting, exploring and exploiting
for minerals therein;
xxx
(f) to construct roadways, mining, drainage, power generation and transmission
facilities and all other types of works on the Contract Area;
(g) to erect, install or place any type of improvements, supplies, machinery and other
equipment relating to the Mining Operations and to use, sell or otherwise dispose of,
modify, remove or diminish any and all parts thereof;
(h) enjoy, subject to pertinent laws, rules and regulations and the rights of third
Parties, easement rights and the use of timber, sand, clay, stone, water and other
natural resources in the Contract Area without cost for the purposes of the Mining
Operations;
xxx
(i) have the right to mortgage, charge or encumber all or part of its interest and
obligations under this Agreement, the plant, equipment and infrastructure and the
Minerals produced from the Mining Operations;
x x x. 295
All materials, equipment, plant and other installations erected or placed on the Contract Area
remain the property of WMCP, which has the right to deal with and remove such items within
twelve months from the termination of the FTAA.296
Pursuant to Section 1.2 of the FTAA, WMCP shall provide "[all] financing, technology,
management and personnel necessary for the Mining Operations." The mining company binds
itself to "perform all Mining Operations . . . providing all necessary services, technology and
financing in connection therewith,"297 and to "furnish all materials, labour, equipment and other
installations that may be required for carrying on all Mining Operations." 298> WMCP may make

expansions, improvements and replacements of the mining facilities and may add such new
facilities as it considers necessary for the mining operations. 299
These contractual stipulations, taken together, grant WMCP beneficial ownership over natural
resources that properly belong to the State and are intended for the benefit of its citizens. These
stipulations are abhorrent to the 1987 Constitution. They are precisely the vices that the
fundamental law seeks to avoid, the evils that it aims to suppress. Consequently, the contract
from which they spring must be struck down.
In arguing against the annulment of the FTAA, WMCP invokes the Agreement on the Promotion
and Protection of Investments between the Philippine and Australian Governments, which was
signed in Manila on January 25, 1995 and which entered into force on December 8, 1995.
x x x. Article 2 (1) of said treaty states that it applies to investments whenever made and thus the
fact that [WMCP's] FTAA was entered into prior to the entry into force of the treaty does not
preclude the Philippine Government from protecting [WMCP's] investment in [that] FTAA.
Likewise, Article 3 (1) of the treaty provides that "Each Party shall encourage and promote
investments in its area by investors of the other Party and shall [admit] such investments in
accordance with its Constitution, Laws, regulations and investment policies" and in Article 3 (2),
it states that "Each Party shall ensure that investments are accorded fair and equitable
treatment." The latter stipulation indicates that it was intended to impose an obligation upon a
Party to afford fair and equitable treatment to the investments of the other Party and that a
failure to provide such treatment by or under the laws of the Party may constitute a breach of the
treaty. Simply stated, the Philippines could not, under said treaty, rely upon the inadequacies of
its own laws to deprive an Australian investor (like [WMCP]) of fair and equitable treatment by
invalidating [WMCP's] FTAA without likewise nullifying the service contracts entered into before
the enactment of RA 7942 such as those mentioned in PD 87 or EO 279.
This becomes more significant in the light of the fact that [WMCP's] FTAA was executed not by a
mere Filipino citizen, but by the Philippine Government itself, through its President no less,
which, in entering into said treaty is assumed to be aware of the existing Philippine laws on
service contracts over the exploration, development and utilization of natural resources. The
execution of the FTAA by the Philippine Government assures the Australian Government that the
FTAA is in accordance with existing Philippine laws.300 [Emphasis and italics by private
respondents.]
The invalidation of the subject FTAA, it is argued, would constitute a breach of said treaty which,
in turn, would amount to a violation of Section 3, Article II of the Constitution adopting the
generally accepted principles of international law as part of the law of the land. One of these
generally accepted principles is pacta sunt servanda, which requires the performance in good
faith of treaty obligations.
Even assuming arguendo that WMCP is correct in its interpretation of the treaty and its assertion
that "the Philippines could not . . . deprive an Australian investor (like [WMCP]) of fair and
equitable treatment by invalidating [WMCP's] FTAA without likewise nullifying the service
contracts entered into before the enactment of RA 7942 . . .," the annulment of the FTAA would
not constitute a breach of the treaty invoked. For this decision herein invalidating the subject
FTAA forms part of the legal system of the Philippines.301 The equal protection
clause302 guarantees that such decision shall apply to all contracts belonging to the same class,
hence, upholding rather than violating, the "fair and equitable treatment" stipulation in said treaty.
One other matter requires clarification. Petitioners contend that, consistent with the provisions of
Section 2, Article XII of the Constitution, the President may enter into agreements involving
"either technical or financial assistance" only. The agreement in question, however, is a technical
and financial assistance agreement.

Petitioners' contention does not lie. To adhere to the literal language of the Constitution would
lead to absurd consequences.303 As WMCP correctly put it:
x x x such a theory of petitioners would compel the government (through the President) to enter
into contract with two (2) foreign-owned corporations, one for financial assistance agreement
and with the other, for technical assistance over one and the same mining area or land; or to
execute two (2) contracts with only one foreign-owned corporation which has the capability to
provide both financial and technical assistance, one for financial assistance and another for
technical assistance, over the same mining area. Such an absurd result is definitely not
sanctioned under the canons of constitutional construction.304 [Underscoring in the original.]
Surely, the framers of the 1987 Charter did not contemplate such an absurd result from their use
of "either/or." A constitution is not to be interpreted as demanding the impossible or the
impracticable; and unreasonable or absurd consequences, if possible, should be
avoided.305 Courts are not to give words a meaning that would lead to absurd or unreasonable
consequences and a literal interpretation is to be rejected if it would be unjust or lead to absurd
results.306 That is a strong argument against its adoption.307 Accordingly, petitioners'
interpretation must be rejected.
The foregoing discussion has rendered unnecessary the resolution of the other issues raised by
the petition.

G.R. No. L-68474 February 11, 1986

NUCLEAR FREE PHILIPPINE COALITION, ET AL., petitioners,
vs.
NATIONAL POWER CORPORATION, ET AL., respondents.
G.R. No. 70632 February 11, 1986
LORENZO M. TAADA, ET AL., petitioners,
vs.
PHILIPPINE ATOMIC ENERGY COMMISSION, ET AL., respondents.

WHEREFORE, the petition is GRANTED. The Court hereby declares unconstitutional and void:

RESOLUTION

(1) The following provisions of Republic Act No. 7942:

(a) The proviso in Section 3 (aq),
(b) Section 23,
(c) Section 33 to 41,
(d) Section 56,
(e) The second and third paragraphs of Section 81, and
(f) Section 90.
(2) All provisions of Department of Environment and Natural Resources Administrative
Order 96-40, s. 1996 which are not in conformity with this Decision, and
(3) The Financial and Technical Assistance Agreement between the Government of
the Republic of the Philippines and WMC Philippines, Inc.
SO ORDERED.

PLANA, J.:
I. In G.R. No. 70632, (1) petitioners question the competence of respondent PAEC
Commissioners to pass judgment on the safety of the Philippine Nuclear Power Plant-1 PNPP-1
in PAEC Licensing Proceedings No. 1-77 without however seeking their ouster from office,
although "proven competence" is one of the qualifications prescribed by law for PAEC
Commissioners. (2) Petitioners also assail the validity of the motion (application)filed by the
National Power Corporation (NPC) for the conversion of its construction permit into an operating
license for PNPP-1 on the principal ground that it contained no information regarding the
financial qualifications of NPC, its source of nuclear fuel, and insurance coverage for nuclear
damage. (3) Petitioners finally charge respondent PAEC Commissioners with bias and
prejudgment.
1. The first issue must be resolved against the petitioners. Where the validity of an appointment
is not challenged in an appropriate proceeding, the question of competence is not within the field
of judicial inquiry. If not considered a qualification the absence of which would vitiate the
appointment, competence is a matter of judgment that is addressed solely to the appointing
power.
2. As regards the legal sufficiency of the NPC motion for conversion, petitioners contend that the
deficiencies they have indicated are jurisdictional infirmities which cannot be cured. The Court
believes however that said deficiencies may be remedied and supplied in the course of the
hearing before PAEC. For this purpose, respondent-applicant NPC may submit pertinent
testimonies and documents when the PAEC hearing is re-opened, subject to controversion and
counterproof of herein petitioners.

3. There is merit in the charge of bias and prejudgment. The PAEC pamphlets- particularly
Annexes "JJ", "KK" and "LL" of the petition (G.R. 70632)-clearly indicate the pre-judgment that
PNPP-1 is safe.
Exhibit "JJ" is an official PAEC 1985 pamphlet entitled "The Philippine Nuclear Power Plant-l." It
gives an overview specifically of PNPP-1, lauds the safety of nuclear power, and concludes with
a statement of the benefits to be derived when the PNPP-1 start operation.
. . .When the PNPP-1 starts operating, it will generate a power of 620 megawatts enough to
supply 15 percent of the electricity needs in Luzon. This is estimated to result in savings of US $
160 million a year, representing the amount of oil displaced.
Aside from being a reliable source of electricity, nuclear power has an excellect safety record
and has been found to result in lower occupational and public risks than fossil fired (coal or oil)
stations. (p. 6. Emphasis supplied.)
The second pamphlet (Exh. "KK") is entitled "NUCLEAR POWER-SAFE CLEAN ECONOMICAL
AND AVAILABLE." On the surface, it merely propagates the use of nuclear power in general. But
its numerous specific references to the PNPP-1 "which will be operational in 1985." and its
advantages give credence to the charge that Exhibit "KK" was in reality designed to project
PNPP-1 as safe, among other
When Exhibit "KK" was published, PNPP-1 was the only nuclear plant under construction in the
Philippines. It is the Philippine nuclear plant specifically mentioned therein that was to be
operational in 1985. Therefore, when the pamphlet states that nuclear power is working now in
other countries and "it should work for us too" because it is "safe" and economical", it is logical
to conclude that the reference is to no other than the nuclear power to be generated at the
PNPP-1
Also worth quoting is the following passage in Exhibit "KK" which sweepingly vouch safes all
nuclear power plants, including the PNPP-1:
No member of the public has ever been injured during the last 25 years that
commercial nuclear reactors have been generating electricity. As is to be
expected in any complex system as nuclear power plants, there have been
failure of equipment and human errors. However in every instance, the
safety equipment designed into the nuclear reactor self terminated the
accident without injury to the operators or the public. The Three Mile Island
Incident, serious as it was, did not result in the loss of life nor did it result in
the exposure of anyone beyond permissible limits.
The designers of nuclear plants assume failure to occur, and provide
multiple safeguards protection against every conceivable malfunction (P. 7,
Emphasis supplied.)
The third pamphlet (Exh. "LL") is entitled NUCLEAR POWER PLANT and ENVIRONMENTAL
SAFETY. Speaking specifically of the PNPP-1 it categorically states that the Bataan nuclear
plant will not adversely affect the public or the flora or fauna in the area. One of the stated
reasons in support of the conclusion is
And environmentally, a nuclear power plant emits only insignificant amount of radioactivity to the
environment. It does not cause chemical pollution of air or water, it does not emit sulfur dioxide
or nitrogen oxides like plants fired by fossil fuels such as coal and oil, Besides, even coal fired

plants may emits radioactive particles of uranium and thorium because these may be found
naturally associated with coal deposits.
Comparatively therefore, a nucelar power plant is the cleanest and the safest environmently no
other technology in modern times has been developed with so dominant concern for public
safety as nuclear power. (p. 8)
Respondent PAEC Commissioners cannot escape responsibility for these official pamphlets.
Exhibit "JJ" was published in 1985, when respondent Commissioners had already been
appointed to their present positions. Exhibits "KK" and "LL" were issued earlier, but the majority
of respondent Commissioners even then were already occupying positions of responsibility in
the PAEC. Commissioner Manuel Eugenio was Acting Chief of the PAEC Department on
Nuclear Technology and Engineering from June, 1980 to July, 1984; Commissioner Quirino
Navarro was PAEC Chief Science Research Specialist from May, 1980 to September, 1984-,
and Commissioner Alejandro Ver Albano was PAEC Deputy Commissioner from March, 1980 to
September, 1984. Additionally, the stubborn fact remains unrebutted that Exhibits "J.J." "KK" and
"LL" continued to be distributed by PAEC as late as March, 1985. In other words their official
distribution continued after the filing of NPC's motion for conversion on June 27, 1984 and even
after PAEC had issued its order dated February 26, 1985 formally admitting the said motion for
conversion.
At any rate, even if it be assumed that there are some doubts regarding the conclusion that
there has been a prejudgment of the safety of PNPP-1 the doubts should be resolved in favor of
a course of action that will assure an unquestionably objective inquiry, considering the
circumstances thereof and the number of people vitally interested therein.
Having thus prejudged the safety of the PNPP-1 respondent PAEC Commissioners would be
acting with grave abuse of discretion amounting to lack of jurisdiction were they to sit in
judgment upon the safety of the plant, absent the requisite objectivity that must characterize
such an important inquiry.
The Court therefore Resolved to RESTRAIN respondent PAEC Commissioners from further
acting in PAEC Licensing Proceedings No. 1-77.
II. In G.R. No. 68474, acting on the motion filed therein dated June 8, 1985 to order PAEC to
reconsider its orders of May 31 and June 5, 1985, the urgent motion for mandatory injunction
and/or restraining order dated August 3, 1985, the second urgent motion for mandatory
injunction dated August 12, 1985, and the various pleadings and other documents submitted by
the parties relative thereto, and considering the paramount need of a reasonable assurance that
the operation of PNPP-1 will not pose an undue risk to the health and safety of the people,
which dictates that the conduct of the inquiry into the safety aspects of PNPP-1 be characterized
by sufficient latitude, the better to achieve the end in view, unfettered by technical rules of
evidence (Republic Act 5207, section 34), and in keeping with the requirements of due process
in administrative proceedings, the Court Resolved to ORDER respondent PAEC (once
reconstituted) to re-open the hearing on PNPP-1 so as to give petitioners sufficient time to
complete their cross-examination of the expert witnesses on quality assurance, to crossexamine the witnesses that petitioners have failed to cross-examine on and after August 9,
1985, and to complete the presentation of their evidence, for which purpose, respondent PAEC
shall issue the necessary subpoena and subpoena duces tecum to compel the attendance of
relevant witnesses and/or the production of relevant documents. For the said purposes, the
PAEC may prescribe a time schedule which shall reasonably assure the parties sufficient
latitude to adequately present their case consistently with the requirements of dispatch. lt is
understood that the PAEC may give NPC the opportunity to correct or supply deficiencies in this
application or evidence in support thereof.

Justices Teehankee, Concepcion Jr., Melencio-Herrera, De la Fuente and Cuevas concur.

Justices Escolin and Alampay took no part.

As taxpayers and citizens, they have no legal standing to file the petition. Generally, a citizen
and taxpayer cannot invoke judicial power to determine the validity of an executive or legislative
action (Subido vs. Sarmiento, 108 Phil. 150, 157).
Prohibition is not the same as injunction. Lawyers often make the mistake of confusing
prohibition with injunction. Basically, prohibition is a remedy to stop a tribunal from exercising a
power beyond its jurisdiction. The PAEC has been acting within its jurisdiction. Prohibition does
not lie against it.

Separate Opinions

Prohibition is an extraordinary prerogative writ of a preventive nature, its proper function being to
prevent courts or other tribunals, officers, or persons from usurping or exercising a jurisdiction
with which they are not vested (73 C.J.S. 10).

ABAD SANTOS, J., concurring:

This Court has no original jurisdiction to issue the writ of injunction. Hence, that remedy cannot
be invoked here.

I associate myself with Justice Plana's position. Additionally, I would like to answer the question
posed by Justice Patajo who asks: "Can We compel the President to designate another body to
try the case pending before PAEC or appoint temporary commissioners while respondents are
still holding office?

The matter of the operation of a nuclear plant is a political question. It is a question of policy as
to which the Executive Department has discretional authority (Tanada and Macapagal vs.
Cuenco, 103 Phil. 1051, 1067).

No, this Court cannot compel the President to designate another body or appoint temporary
commissioners. It would be unthinkable for this Court to compel the President of the Philippines
to do anything at anytime. What this Court should do is to restrain the commissioners from
further acting in PAEC Licensing Proceedings No. 1-77. What the President does thereafter is
for him to decide. This Court does not tell him what to do. It cannot because of the separation of
powers and the obvious fact that he is not a party to the proceedings.
AQUINO, C.J., dissenting
I dissent. G.R. No. 68474 is an action filed on September 1, 1984 for mandamus and injunction
wherein the petitioners, as taxpayers and citizens, prayed that the Philippine Atomic Energy
Commission (PAEC) and the National Power Corporation be ordered to give public notice and
hold a public hearing and give the petitioners copies of the contracts with Westinghouse.
This prayer had been granted by the respondents. As noted by the Solicitor General, that case
had been terminated (pp. 370-371, Vol. 11, Rollo of G.R. No. 68474, p. 410 Vol. II, Rollo of G.R.
No. 70632). Therefore, G.R. No. 68474 had become MOOT and ACADEMIC.
G.R. No. 70632 is an action filed on April 27, 1985 by the petitioners, as citizens and
taxpayers, for prohibition and injunction praying that the PAEC be enjoined from hearing the
NPC's motion for a license to operate the Bataan Nuclear Plant.
In its resolution of August 29, 1985 this Court issued a temporary restraining order enjoining the
PAEC from further proceeding in the licensing proceedings. The petitioners had participated in
the hearings on said motion. They used about 153 hours out of the 205 hours consumed in the
course of the hearings (p. 413, Vol. I 1, Rollo of G. R. No. 70632).
The instant case of G.R. No. 70632 should be DISMISSED because the petitioners HAVE NO
CAUSE OF ACTION FOR PROHIBITION AND INJUNCTION (See dissent in G.R. No. 68474
dated May 14,1985,395-B, Vol. 11, Rollo).

No justiciable controversy is involved in the instant case. The great public interest involved in the
dispute does not justify the petitioners in USING THIS COURT TO INTERFERE with the
hearings conducted by the PAEC and with its interlocutory orders.
Its decisions are reviewable by the Appellate Court in accordance with section 9 of the Judiciary
Revamp Law in relation to section 36 of Republic Act No. 5207. The petitioners should not be
allowed to use this Court as an instrument to stop the operation of the nuclear plant. This Court
is not competent, and it has no jurisdiction in this case, to determine its safety. This case cannot
be utilized for making a pronouncement as to its safety.
Secretary Vicente Abad Santos in his opinion dated February 27, 1976 held that the nuclear
plant contract is lawful (p. 1 1 1, Vol. 1, Rollo of G.R. No. 68474).
The matter of safety had been passed upon by a Commission composed of Justices Puno,
Vasquez and Bautista in a 140-page report dated November 13, 1979 and by the International
Atomic Energy Agency in 1984 and in 1985. (See Comment of NPC dated November 20, 1985,
Vol. IV, Rollo of G.R. No. 68474.)
Petitioners should resort to other forums for the articulation of their opposition to the nuclear
plant. It is not wrong to oppose the nuclear plant. What is wrong is to employ this Court without
justification as a weapon for opposing it.
G.R. No. 70632 should be DISMISSED FOR LACK OF MERIT. The restraining order should be
lifted. As already shown, G.R. No. 68474 had become MOOT.
PATAJO, J., dissenting:
I vote for the dismissal of G.R. No. 68474 for being moot and academic joining in this score the
separate opinion of the Chief Justice.

I vote also for the dismissal of G.R. No. 70632, said action being premature. There is no
showing that the competence of PAEC Commissioners to seat on the case had been properly
brought against said Commissioners and the latter had denied said challenge. More importantly
prohibition or injunction is not the proper remedy to question the competence or qualification of
one properly appointed to an office or position. If respondent Commissioners have been validly
appointed as PAEC Commissioners prohibition will not lie to prevent them from performing their
functions on the ground that they do not possess necessary competence or know how to do
their job.
I believe, further, that the pamphlets and articles published by PAEC regarding the safety of
nuclear plants which have not been shown to have been prepared by the Commissioners
themselves can be taken as evidence of bias in favor of granting the license to operate the
nuclear plant in question. I am more inclined to believe that said articles refer to the safety of
nuclear plants per se and not particularly to the Bataan nuclear plant. I trust that respondent
Commissioners can still be objective in their disposition of the petition pending before them and
can decide the same on the basis of the evidence presented during the continuation of the
hearing. From their decision the aggrieved party can appeal to the Intermediate Appellate Court.
Another important consideration that must not be overlooked is that if respondent PAEC
Commissioners are disqualified who will try the case? Can We compel the President to
designate another body to try the case pending before PAEC or appoint temporary
commissioners while respondents are still holding office? Would not such a dilemma result in a
stalemate and further delay? It is no answer to said dilemma as suggested by petitioners that
respondent Commissioners could resign and pave the way for the appointment of their
replacements. For them to resign would be a virtual admission of the claim of petitioners that
they are incompetent.
GUTIERREZ, JR., J., concurring and dissenting:
I concur in the Court's resolution but am registering a dissent insofar as Commissioner Reynaldo
Suarez is concerned. The PAEC exercises both quasi-legislative and quasi-judicial powers.
During the hearings involving tens of billions of pesos of public funds, the immediate resolution
of difficult procedural questions is often necessary. Complex issues calling for the application of
an entirely new field of substantive law are raised before the Commission. Resultant criminal
prosecutions or civil suits are ever present possibilities. I believe that the constitutional
requirement of due process calls for the appointment of a qualified "law member" in the
Commission. Commissioner Suarez, a former Nueva Ecija Regional Trial Court Judge and
prominent practising lawyer of Angeles City is qualified for the position. Regarding the official
pamphlets issued by PAEC, all except one of the pamphlets were issued before Commissioner
Suarez' appointment to the Commission and as for the one exception, there is no showing that
he was involved or had anything to do with its preparation and issuance.
Considering the foregoing, the law member should not be included in the Court's action
regarding the respondent Philippine Atomic Energy Commission.

Separate Opinions
ABAD SANTOS, J., concurring:

I associate myself with Justice Plana's position. Additionally, I would like to answer the question
posed by Justice Patajo who asks: "Can We compel the President to designate another body to
try the case pending before PAEC or appoint temporary commissioners while respondents are
still holding office?
No, this Court cannot compel the President to designate another body or appoint temporary
commissioners. It would be unthinkable for this Court to compel the President of the Philippines
to do anything at anytime. What this Court should do is to restrain the commissioners from
further acting in PAEC Licensing Proceedings No. 1-77. What the President does thereafter is
for him to decide. This Court does not tell him what to do. It cannot because of the separation of
powers and the obvious fact that he is not a party to the proceedings.
AQUINO, C.J., dissenting
I dissent. G.R. No. 68474 is an action filed on September 1, 1984 for mandamus and injunction
wherein the petitioners, as taxpayers and citizens, prayed that the Philippine Atomic Energy
Commission (PAEC) and the National Power Corporation be ordered to give public notice and
hold a public hearing and give the petitioners copies of the contracts with Westinghouse.
This prayer had been granted by the respondents. As noted by the Solicitor General, that case
had been terminated (pp. 370-371, Vol. 11, Rollo of G.R. No. 68474, p. 410 Vol. II, Rollo of G.R.
No. 70632). Therefore, G.R. No. 68474 had become MOOT and ACADEMIC.
G.R. No. 70632 is an action filed on April 27, 1985 by the petitioners, as citizens and
taxpayers, for prohibition and injunction praying that the PAEC be enjoined from hearing the
NPC's motion for a license to operate the Bataan Nuclear Plant.
In its resolution of August 29, 1985 this Court issued a temporary restraining order enjoining the
PAEC from further proceeding in the licensing proceedings. The petitioners had participated in
the hearings on said motion. They used about 153 hours out of the 205 hours consumed in the
course of the hearings (p. 413, Vol. I 1, Rollo of G. R. No. 70632).
The instant case of G.R. No. 70632 should be DISMISSED because the petitioners HAVE NO
CAUSE OF ACTION FOR PROHIBITION AND INJUNCTION (See dissent in G.R. No. 68474
dated May 14,1985,395-B, Vol. 11, Rollo).
As taxpayers and citizens, they have no legal standing to file the petition. Generally, a citizen
and taxpayer cannot invoke judicial power to determine the validity of an executive or legislative
action (Subido vs. Sarmiento, 108 Phil. 150, 157).
Prohibition is not the same as injunction. Lawyers often make the mistake of confusing
prohibition with injunction. Basically, prohibition is a remedy to stop a tribunal from exercising a
power beyond its jurisdiction. The PAEC has been acting within its jurisdiction. Prohibition does
not lie against it.
Prohibition is an extraordinary prerogative writ of a preventive nature, its proper function being to
prevent courts or other tribunals, officers, or persons from usurping or exercising a jurisdiction
with which they are not vested (73 C.J.S. 10).
This Court has no original jurisdiction to issue the writ of injunction. Hence, that remedy cannot
be invoked here.

The matter of the operation of a nuclear plant is a political question. It is a question of policy as
to which the Executive Department has discretional authority (Tanada and Macapagal vs.
Cuenco, 103 Phil. 1051, 1067).
No justiciable controversy is involved in the instant case. The great public interest involved in the
dispute does not justify the petitioners in USING THIS COURT TO INTERFERE with the
hearings conducted by the PAEC and with its interlocutory orders.
Its decisions are reviewable by the Appellate Court in accordance with section 9 of the Judiciary
Revamp Law in relation to section 36 of Republic Act No. 5207. The petitioners should not be
allowed to use this Court as an instrument to stop the operation of the nuclear plant. This Court
is not competent, and it has no jurisdiction in this case, to determine its safety. This case cannot
be utilized for making a pronouncement as to its safety.
Secretary Vicente Abad Santos in his opinion dated February 27, 1976 held that the nuclear
plant contract is lawful (p. 1 1 1, Vol. 1, Rollo of G.R. No. 68474).
The matter of safety had been passed upon by a Commission composed of Justices Puno,
Vasquez and Bautista in a 140-page report dated November 13, 1979 and by the International
Atomic Energy Agency in 1984 and in 1985. (See Comment of NPC dated November 20, 1985,
Vol. IV, Rollo of G.R. No. 68474.)
Petitioners should resort to other forums for the articulation of their opposition to the nuclear
plant. It is not wrong to oppose the nuclear plant. What is wrong is to employ this Court without
justification as a weapon for opposing it.

Another important consideration that must not be overlooked is that if respondent PAEC
Commissioners are disqualified who will try the case? Can We compel the President to
designate another body to try the case pending before PAEC or appoint temporary
commissioners while respondents are still holding office? Would not such a dilemma result in a
stalemate and further delay? It is no answer to said dilemma as suggested by petitioners that
respondent Commissioners could resign and pave the way for the appointment of their
replacements. For them to resign would be a virtual admission of the claim of petitioners that
they are incompetent.
GUTIERREZ, JR., J., concurring and dissenting:
I concur in the Court's resolution but am registering a dissent insofar as Commissioner Reynaldo
Suarez is concerned. The PAEC exercises both quasi-legislative and quasi-judicial powers.
During the hearings involving tens of billions of pesos of public funds, the immediate resolution
of difficult procedural questions is often necessary. Complex issues calling for the application of
an entirely new field of substantive law are raised before the Commission. Resultant criminal
prosecutions or civil suits are ever present possibilities. I believe that the constitutional
requirement of due process calls for the appointment of a qualified "law member" in the
Commission. Commissioner Suarez, a former Nueva Ecija Regional Trial Court Judge and
prominent practising lawyer of Angeles City is qualified for the position. Regarding the official
pamphlets issued by PAEC, all except one of the pamphlets were issued before Commissioner
Suarez' appointment to the Commission and as for the one exception, there is no showing that
he was involved or had anything to do with its preparation and issuance.
Considering the foregoing, the law member should not be included in the Court's action
regarding the respondent Philippine Atomic Energy Commission.

G.R. No. 70632 should be DISMISSED FOR LACK OF MERIT. The restraining order should be
lifted. As already shown, G.R. No. 68474 had become MOOT.
[G.R. No. 132451. December 17, 1999]

PATAJO, J., dissenting:

I vote for the dismissal of G.R. No. 68474 for being moot and academic joining in this score the
separate opinion of the Chief Justice.
I vote also for the dismissal of G.R. No. 70632, said action being premature. There is no
showing that the competence of PAEC Commissioners to seat on the case had been properly
brought against said Commissioners and the latter had denied said challenge. More importantly
prohibition or injunction is not the proper remedy to question the competence or qualification of
one properly appointed to an office or position. If respondent Commissioners have been validly
appointed as PAEC Commissioners prohibition will not lie to prevent them from performing their
functions on the ground that they do not possess necessary competence or know how to do
their job.
I believe, further, that the pamphlets and articles published by PAEC regarding the safety of
nuclear plants which have not been shown to have been prepared by the Commissioners
themselves can be taken as evidence of bias in favor of granting the license to operate the
nuclear plant in question. I am more inclined to believe that said articles refer to the safety of
nuclear plants per se and not particularly to the Bataan nuclear plant. I trust that respondent
Commissioners can still be objective in their disposition of the petition pending before them and
can decide the same on the basis of the evidence presented during the continuation of the
hearing. From their decision the aggrieved party can appeal to the Intermediate Appellate Court.

CONGRESSMAN ENRIQUE T. GARCIA, petitioner, vs. HON. RENATO C. CORONA, in his

capacity as the Executive Secretary, HON. FRANCISCO VIRAY, in his capacity as
the Secretary of Energy, CALTEX PHILIPPINES INC., PILIPINAS SHELL
PETROLEUM CORP. and PETRON CORP., respondents.
DECISION
YNARES-SANTIAGO, J.:
On November 5, 1997, this Court in Tatad v. Secretary of the Department of
Energy and Lagman, et al., v. Hon. Ruben Torres, et al.,[1] declared Republic Act No. 8180,
entitled An Act Deregulating the Downstream Oil Industry and For Other Purposes,
unconstitutional, and its implementing Executive Order No. 392 void.
R.A. 8180 was struck down as invalid because three key provisions intended to promote
free competition were shown to achieve the opposite result. More specifically, this Court ruled
that its provisions on tariff differential, stocking of inventories, and predatory pricing inhibit fair
competition, encourage monopolistic power, and interfere with the free interaction of the market
forces.

While R.A. 8180 contained a separability clause, it was declared unconstitutional in its
entirety since the three (3) offending provisions so permeated the law that they were so
intimately the esse of the law. Thus, the whole statute had to be invalidated.

the local downstream oil industry, is patently contrary to public interest and therefore
unconstitutional because within the short span of five months, the market is still dominated and
controlled by an oligopoly of the three (3) private respondents, namely, Shell, Caltex and Petron.

As a result of the Tatad decision, Congress enacted Republic Act No. 8479, a new
deregulation law without the offending provisions of the earlier law. Petitioner Enrique T. Garcia,
a member of Congress, has now brought this petition seeking to declare Section 19 thereof,
which sets the time of full deregulation, unconstitutional. After failing in his attempts to have
Congress incorporate in the law the economic theory he espouses, petitioner now asks us, in
the name of upholding the Constitution, to undo a violation which he claims Congress has
committed.

The objective of the petition is deceptively simple. It states that if the constitutional
mandate against monopolies and combinations in restraint of trade [2] is to be obeyed, there
should be indefinite and open-ended price controls on gasoline and other oil products for as long
as necessary. This will allegedly prevent the Big 3 --- Shell, Caltex and Petron --- from pricefixing and overpricing. Petitioner calls the indefinite retention of price controls as partial
deregulation.
The grounds relied upon in the petition are:

The assailed Section 19 of R.A. 8479 states in full:

A.
SEC. 19. Start of Full Deregulation. --- Full deregulation of the Industry shall start five (5)
months following the effectivity of this Act: Provided, however, That when the public interest so
requires, the President may accelerate the start of full deregulation upon the recommendation of
the DOE and the Department of Finance (DOF) when the prices of crude oil and petroleum
products in the world market are declining and the value of the peso in relation to the US dollar
is stable, taking into account relevant trends and prospects; Provided, further, That the foregoing
provision notwithstanding, the five (5)-month Transition Phase shall continue to apply to LPG,
regular gasoline and kerosene as socially-sensitive petroleum products and said petroleum
products shall be covered by the automatic pricing mechanism during the said period.
Upon the implementation of full deregulation as provided herein, the Transition Phase is deemed
terminated and the following laws are repealed:
a) Republic Act No. 6173, as amended;

SECTION 19 OF R.A. NO. 8479 WHICH PROVIDES FOR FULL DEREGULATION FIVE (5)
MONTHS OR EARLIER FOLLOWING THE EFFECTIVITY OF THE LAW, IS GLARINGLY PROOLIGOPOLY, ANTI-COMPETITION AND ANTI-PEOPLE, AND IS THEREFORE PATENTLY
UNCONSTITUTIONAL FOR BEING IN GROSS AND CYNICAL CONTRAVENTION OF THE
CONSTITUTIONAL POLICY AND COMMAND EMBODIED IN ARTCLE XII, SECTION 19 OF
THE 1987 CONSTITUTION AGAINST MONOPOLIES AND COMBINATIONS IN RESTRAINT
OF TRADE.
B.
SAID SECTION 19 OF R.A. No. 8479 IS GLARINGLY PRO-OLIGOPOLY, ANTI-COMPETITION
AND ANTI-PEOPLE, FOR THE FURTHER REASON THAT IT PALPABLY AND CYNICALLY
VIOLATES THE VERY OBJECTIVE AND PURPOSE OF R.A. NO. 8479, WHICH IS TO
ENSURE A TRULY COMPETITIVE MARKET UNDER A REGIME OF FAIR PRICES.

b) Section 5 of Executive Order No. 172, as amended;

C.
c) Letter of Instruction No. 1431, dated October 15, 1984;
d) Letter of Instruction No. 1441, dated November 20, 1984, as amended;
e) Letter of Instruction No. 1460, dated May 9, 1985;
f) Presidential Decree No. 1889; and
g) Presidential Decree No. 1956, as amended by Executive Order No. 137:
Provided, however, That in case full deregulation is started by the President in the exercise of
the authority provided in this Section, the foregoing laws shall continue to be in force and effect
with respect to LPG, regular gasoline and kerosene for the rest of the five (5)-month period.
Petitioner contends that Section 19 of R.A. 8479, which prescribes the period for the
removal of price control on gasoline and other finished products and for the full deregulation of

SAID SECTION 19 OF R.A. No. 8479, BEING GLARINGLY PRO-OLIGOPOLY, ANTICOMPETITION AND ANTI-PEOPLE, BEING PATENTLY UNCONSTITUTIONAL AND BEING
PALPABLY VIOLATIVE OF THE LAWS POLICY AND PURPOSE OF ENSURING A TRULY
COMPETITIVE MARKET UNDER A REGIME OF FAIR PRICES, IS A VERY GRAVE AND
GRIEVOUS ABUSE OF DISCRETION ON THE PART OF THE LEGISLATIVE AND EXECUTIVE
BRANCHES OF GOVERNMENT.
D.
PREMATURE FULL DEREGULATION UNDER SECTION 19 OF R.A. NO. 8479 MAY AND
SHOULD THEREFORE BE DECLARED NULL AND VOID EVEN AS THE REST OF ITS
PROVISIONS REMAIN IN FORCE, SUCH AS THE TRANSITION PHASE OR PARTIAL
DEREGULATION WITH PRICE CONTROLS THAT ENSURES THE PROTECTION OF THE
PUBLIC INTEREST BY PREVENTING THE BIG 3 OLIGOPOLYS PRICE-FIXING AND
OVERPRICING.[3]

The issues involved in the deregulation of the downstream oil industry are of paramount
significance. The ramifications, international and local in scope, are complex. The impact on
the nations economy is pervasive and far-reaching. The amounts involved in the oil business
are immense. Fluctuations in the supply and price of oil products have a dramatic effect on
economic development and public welfare. As pointed out in the Tataddecision, few cases carry
a surpassing importance on the daily life of every Filipino. The issues affect everybody from the
poorest wage-earners and their families to the richest entrepreneurs, from industrial giants to
humble consumers.
Our decision in this case is complicated by the unstable oil prices in the world
market. Even as this case is pending, the price of OPEC oil is escalating to record levels. We
have to emphasize that our decision has nothing to do with worldwide fluctuations in oil prices
and the counter-measures of Government each time a new development takes place.
The most important part of deregulation is freedom from price control. Indeed, the free
play of market forces through deregulation and when to implement it represent one option to
solve the problems of the oil-consuming public. There are other considerations which may be
taken into account such as the reduction of taxes on oil products, the reinstitution of an Oil Price
Stabilization Fund, the choice between government subsidies taken from the regular taxpaying
public on one hand and the increased costs being shouldered only by users of oil products on
the other, and most important, the immediate repeal of the oil deregulation law as wrong
policy. Petitioner wants the setting of prices to be done by Government instead of being
determined by free market forces. His preference is continued price control with no fixed end in
sight. A simple glance at the factors surrounding the present problems besetting the oil industry
shows that they are economic in nature.
R.A. 8479, the present deregulation law, was enacted to implement Article XII, Section 19
of the Constitution which provides:
The State shall regulate or prohibit monopolies when the public interest so requires. No
combinations in restraint of trade or unfair competition shall be allowed.
This is so because the Government believes that deregulation will eventually prevent
monopoly. The simplest form of monopoly exists when there is only one seller or producer of a
product or service for which there are no substitutes. In its more complex form, monopoly is
defined as the joint acquisition or maintenance by members of a conspiracy, formed for that
purpose, of the power to control and dominate trade and commerce in a commodity to such an
extent that they are able, as a group, to exclude actual or potential competitors from the field,
accompanied with the intention and purpose to exercise such power.[4]
Where two or three or a few companies act in concert to control market prices and
resultant profits, the monopoly is called an oligopoly or cartel. It is a combination in restraint of
trade.
The perennial shortage of oil supply in the Philippines is exacerbated by the further fact
that the importation, refining, and marketing of this precious commodity are in the hands of a
cartel, local but made up of foreign-owned corporations. Before the start of deregulation, the
three private respondents controlled the entire oil industry in the Philippines.

It bears reiterating at the outset that the deregulation of the oil industry is a policy
determination of the highest order. It is unquestionably a priority program of Government. The
Department of Energy Act of 1992[5]expressly mandates that the development and updating of
the existing Philippine energy program shall include a policy direction towards deregulation of
the power and energy industry.
Be that as it may, we are not concerned with whether or not there should be
deregulation. This is outside our jurisdiction. The judgment on the issue is a settled matter and
only Congress can reverse it. Rather, the question that we should address here is --- are the
method and the manner chosen by Government to accomplish its cherished goal offensive to the
Constitution? Is indefinite price control in the manner proposed by petitioner the only feasible
and legal way to achieve it?
Petitioner has taken upon himself a most challenging task. Unquestionably, the direction
towards which the nations efforts at economic and social upliftment should be addressed is a
function of Congress and the President. In the exercise of this function, Congress and the
President have obviously determined that speedy deregulation is the answer to the
acknowledged dominion by oligopolistic forces of the oil industry. Thus, immediately after R.A.
8180 was declared unconstitutional in the Tatad case, Congress took resolute steps to fashion
new legislation towards the objective of the earlier law. Invoking the Constitution, petitioner now
wants to slow down the process.
While the Court respects the firm resolve displayed by Congress and the President, all
departments of Government are equally bound by the sovereign will expressed in the
commands of the Constitution. There is a need for utmost care if this Court is to faithfully
discharge its duties as arbitral guardian of the Constitution. We cannot encroach on the policy
functions of the two other great departments of Government. But neither can we ignore any
overstepping of constitutional limitations. Locating the correct balance between legality and
policy, constitutional boundaries and freedom of action, and validity and expedition is this Courts
dilemma as it resolves the legitimacy of a Government program aimed at giving every Filipino a
more secure, fulfilling and abundant life.
Our ruling in Tatad is categorical that the Constitutions Article XII, Section 19, is anti-trust
in history and spirit. It espouses competition. We have stated that only competition which is fair
can release the creative forces of the market. We ruled that the principle which underlies the
constitutional provision is competition. Thus:
Section 19, Article XII of our Constitution is anti-trust in history and in spirit. It espouses
competition. The desirability of competition is the reason for the prohibition against restraint of
trade, the reason for the interdiction of unfair competition, and the reason for regulation of
unmitigated monopolies. Competition is thus the underlying principle of section 19, Article XII of
our Constitution which cannot be violated by R.A. No. 8180. We subscribe to the observation of
Prof. Gellhorn that the objective of anti-trust law is to assure a competitive economy, based
upon the belief that through competition producers will strive to satisfy consumer wants at the
lowest price with the sacrifice of the fewest resources. Competition among producers allows
consumers to bid for goods and services, and thus matches their desires with societys
opportunity costs. He adds with appropriateness that there is a reliance upon the operation of
the market system (free enterprise) to decide what shall be produced, how resources shall be
allocated in the production process, and to whom the various products will be distributed. The

market system relies on the consumer to decide what and how much shall be produced, and on
competition, among producers to determine who will manufacture it.[6]
In his recital of the antecedent circumstances, petitioner repeats in abbreviated form the
factual findings and conclusions which led the Court to declare R.A. 8180 unconstitutional. The
foreign oligopoly or cartel formed by respondents Shell, Caltex and Petron, their indulging in
price-fixing and overpricing, their blockade tactics which effectively obstructed the entry of
genuine competitors, the dangers posed by the oil cartel to national security and economic
development, and other prevailing sentiments are stated as axiomatic truths. They are repeated
in capsulized context as the current background facts of the present petition.
The empirical existence of this deplorable situation was precisely the reason why
Congress enacted the oil deregulation law. The evils arising from conspiratorial acts of
monopoly are recognized as clear and present. But the enumeration of the evils by
our Tatad decision was not for the purpose of justifying continued government control, especially
price control. The objective was, rather, the opposite. The evils were emphasized to show the
need for free competition in a deregulated industry. And to be sure, the measures to address
these evils are for Congress to determine, but they have to meet the test of constitutional
validity.
The Court respects the legislative finding that deregulation is the policy answer to the
problems. It bears stressing that R.A. 8180 was declared invalid not because deregulation is
unconstitutional. The law was struck down because, as crafted, three key provisions plainly
encouraged the continued existence if not the proliferation of the constitutionally proscribed evils
of monopoly and restraint of trade.
In sharp contrast, the present petition lacks a factual foundation specifically highlighting
the need to declare the challenged provision unconstitutional. There is a dearth of relevant,
reliable, and substantial evidence to support petitioners theory that price control must continue
even as Government is trying its best to get out of regulating the oil industry. The facts of the
petition are, in the main, a general dissertation on the evils of monopoly.
Petitioner overlooks the fact that Congress enacted the deregulation law exactly because
of the monopoly evils he mentions in his petition. Congress instituted the lifting of price controls
in the belief that free and fair competition was the best remedy against monopoly power. In
other words, petitioners facts are also the reasons why Congress lifted price controls and why
the President accelerated the process. The facts adduced in favor of continued and indefinite
price control are the same facts which supported what Congress believes is an exercise of
wisdom and discretion when it chose the path of speedy deregulation and rejected
Congressman Garcias economic theory.

Petitioner may call the industry subject to price controls as deregulated. In enacting the
challenged provision, Congress, on the other hand, has declared that any industry whose prices
and profits are fixed by government authority remains a highly regulated one.
Petitioner, therefore, engages in a legal paradox. He fails to show how there can be
deregulation while retaining government price control. Deregulation means the lifting of control,
governance and direction through rule or regulation. It means that the regulated industry is
freed from the controls, guidance, and restrictions to which it used to be subjected. The use of
the word partial to qualify deregulation is sugar-coating. Petitioner is really against
deregulation at this time.
Petitioner states that price control is good. He claims that it was the regulation of the
importation of finished oil products which led to the exit of competitors and the consolidation and
dominion of the market by an oligopoly, not price control. Congress and the President think
otherwise.
The argument that price control is not the villain in the intrusion and growth of monopoly
appears to be pure theory not validated by experience. There can be no denying the fact that
the evils mentioned in the petition arose while there was price control. The dominance of the socalled Big 3 became entrenched during the regime of price control. More importantly, the
ascertainment of the cause and the method of dismantling the oligopoly thus created are a
matter of legislative and executive choice. The judicial process is equipped to handle legality
but not wisdom of choice and the efficacy of solutions.
Petitioner engages in another contradiction when he puts forward what he calls a selfevident truth. He states that a truly competitive market and fair prices cannot be legislated into
existence. However, the truly competitive market is not being created or fashioned by the
challenged legislation. The market is simply freed from legislative controls and allowed to grow
and develop free from government interference. R.A. 8479 actually allows the free play of
supply and demand to dictate prices. Petitioner wants a government official or board to continue
performing this task. Indefinite and open-ended price control as advocated by petitioner would
be to continue a regime of legislated regulation where free competition cannot possibly
flourish. Control is the antithesis of competition. To grant the petition would mean that the
Government is not keen on allowing a free market to develop. Petitioners self-evident truth
thus supports the validity of the provision of law he opposes.
New players in the oil industry intervened in this case. According to them, it is the free
market policy and atmosphere of deregulation which attracted and brought the new participants,
themselves included, into the market. The intervenors express their fear that this Court would
overrule legislative policy and replace it with petitioners own legislative program.

The petition states that it is using the very thoughts and words of the Court in
its Tatad decision. Those thoughts and words, however, were directed against the tariff
differential, the inventory requirement, and predatory pricing, not against deregulation as a policy
and not against the lifting of price controls.

The factual allegations of the intervenors have not been refuted and we see no reason to
doubt them. Their argument that the co-existence of many viable rivals create free market
conditions induces competition in product quality and performance and makes available to
consumers an expanded range of choices cannot be seriously disputed.

A dramatic, at times expansive and grandiloquent, reiteration of the same background

circumstances narrated in Tatad does not squarely sustain petitioners novel thesis that there
can be deregulation without lifting price controls.

On the other hand, the pleadings of public and private respondents both put forth the
argument that the challenged provision is a policy decision of Congress and that the wisdom of

the provision is outside the authority of this Court to consider. We agree. As we have ruled
in Morfe v. Mutuc[7]:
(I)t is well to remember that this Court, in the language of Justice Laurel, does not pass upon
question or wisdom, justice or expediency of legislation. As expressed by Justice Tuason: It is
not the province of the courts to supervise legislation and keep it within the bounds of propriety
and common sense. That is primarily and exclusively a legislative concern. There can be no
possible objection then to the observation of Justice Montemayor: As long as laws do not
violate any Constitutional provision, the Courts merely interpret and apply them regardless of
whether or not they are wise or salutary. For they, according to Justice Labrador, are not
supposed to override legitimate policy and x x x never inquire into the wisdom of the law.
It is thus settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on
Elections, that only congressional power or competence, not the wisdom of the action taken,
may be the basis for declaring a statute invalid. This is as it ought to be. The principle of
separation of powers has in the main wisely allocated the respective authority of each
department and confined its jurisdiction to such a sphere. There would then be intrusion not
allowable under the Constitution if on a matter left to the discretion of a coordinate branch, the
judiciary would substitute its own. If there be adherence to the rule of law, as there ought to be,
the last offender should be the courts of justice, to which rightly litigants submit their controversy
precisely to maintain unimpaired the supremacy of legal norms and prescriptions. The attack on
the validity of the challenged provision likewise insofar as there may be objections, even if valid
and cogent, on its wisdom cannot be sustained.
In this petition, Congressman Garcia seeks to revive the long settled issue of the
timeliness of full deregulation, which issue he had earlier submitted to this Court by way of a
Partial Motion for Reconsideration in theTatad case. In our Resolution dated December 3, 1997,
which has long become final and executory, we stated:
We shall first resolve petitioner Garcias linchpin contention that the full deregulation decreed by
R.A. No. 8180 to start at the end of March 1997 is unconstitutional. For prescinding from this
premise, petitioner suggests that we simply go back to the transition period, price control will be
revived through the automatic pricing mechanism based on Singapore Posted Prices. The
Energy Regulatory Board x x x would play a limited and ministerial role of computing the
monthly price ceiling of each and every petroleum fuel product, using the automatic pricing
formula. While the OPSF would return, this coverage would be limited to monthly price
increases in excess of P0.50 per liter.
We are not impressed by petitioner Garcias submission. Petitioner has no basis in condemning
as unconstitutional per se the date fixed by Congress for the beginning of the full deregulation of
the downstream oil industry. Our Decision merely faulted the Executive for factoring the
depletion of OPSF in advancing the date of full deregulation to February 1997. Nonetheless, the
error of the Executive is now a non-issue for the full deregulation set by Congress itself at the
end of March 1997 has already come to pass. March 1997 is not an arbitrary date. By that
date, the transition period has ended and it was expected that the people would have adjusted
to the role of market forces in shaping the prices of petroleum and its products. The choice of
March 1997 as the date of full deregulation is a judgment of Congress and its judgment call
cannot be impugned by this Court.[8]

Reduced to its basic arguments, it can be seen that the challenge in this petition is not
against the legality of deregulation. Petitioner does not expressly challenge deregulation. The
issue, quite simply, is the timeliness or the wisdom of the date when full deregulation should be
effective.
In this regard, what constitutes reasonable time is not for judicial
determination. Reasonable time involves the appraisal of a great variety of relevant conditions,
political, social and economic. They are not within the appropriate range of evidence in a court
of justice. It would be an extravagant extension of judicial authority to assert judicial notice as
the basis for the determination.[9]
We repeat that what petitioner decries as unsuccessful is not a final result. It is only a
beginning. The Court is not inclined to stifle deregulation as enacted by Congress from its very
start. We leave alone the program of deregulation at this stage. Reasonable time will prove the
wisdom or folly of the deregulation program for which Congress and not the Court is
accountable.
Petitioner argues further that the public interest requires price controls while the oligopoly
exists, for that is the only way the public can be protected from monopoly or oligopoly
pricing. But is indefinite price control the only feasible and legal way to enforce the constitutional
mandate against oligopolies?
Article 186 of the Revised Penal Code, as amended, punishes as a felony the creation of
monopolies and combinations in restraint of trade. The Solicitor General, on the other hand,
cites provisions of R.A. 8479 intended to prevent competition from being corrupted or
manipulated. Section 11, entitled Anti-Trust Safeguards, defines and prohibits cartelization and
predatory pricing. It penalizes the persons and officers involved with imprisonment of three (3)
to seven (7) years and fines ranging from One million to Two million pesos. For this purpose, a
Joint Task Force from the Department of Energy and Department of Justice is created under
Section 14 to investigate and order the prosecution of violations.
Sections 8 and 9 of the Act, meanwhile, direct the Departments of Foreign Affairs, Trade
and Industry, and Energy to undertake strategies, incentives and benefits, including international
information campaigns, tax holidays and various other agreements and utilizations, to invite and
encourage the entry of new participants. Section 6 provides for uniform tariffs at three percent
(3%).
Section 13 of the Act provides for Remedies, under which the filing of actions by
government prosecutors and the investigation of private complaints by the Task Force is
provided. Sections 14 and 15 provide how the Department of Energy shall monitor and prevent
the occurrence of collusive pricing in the industry.
It can be seen, therefore, that instead of the price controls advocated by the petitioner,
Congress has enacted anti-trust measures which it believes will promote free and fair
competition. Upon the other hand, the disciplined, determined, consistent and faithful execution
of the law is the function of the President. As stated by public respondents, the remedy against
unreasonable price increases is not the nullification of Section 19 of R.A. 8479 but the setting
into motion of its various other provisions.

For this Court to declare unconstitutional the key provision around which the laws antitrust measures are clustered would mean a constitutionally interdicted distrust of the wisdom of
Congress and of the determined exercise of executive power.

municipal solid waste thermal plants using incineration technology. This type of technology was
selected because of its alleged advantages of greatly reduced waste volume, prolongation of the
service life of the disposal site, and generation of electricity.

Having decided that deregulation is the policy to follow, Congress and the President have
the duty to set up the proper and effective machinery to ensure that it works. This is something
which cannot be adjudicated into existence. This Court is only an umpire of last resort whenever
the Constitution or a law appears to have been violated. There is no showing of a constitutional
violation in this case.

While eleven (11) proponents submitted their pre-qualification documents, most failed to
comply with the requirements under Section 5.4 of the Implementing Rules and Regulations
(IRR) of Republic Act No. 6957, otherwise known as the Build-Operate-Transfer Law. On July
21, 1995, the Pre-qualification, Bids and Awards Committee (PBAC) recommended the prequalification of three proponents, namely: i) JANCOM International Pty. Ltd.; ii) First Philippine
International W-E Managers; and iii) PACTECH Development Corporation. On July 26,
1995, the EXECOM approved the recommendation of the PBAC. On July 27, 1995, MMDA
forwarded to the Investment Coordinating Committee (ICC) Secretariat the pre-feasibility study
on the privatization of the Carmona and San Mateo landfill sites. The project was later
presented to the ICC-Technical Board (ICC-TB) and then endorsed to the ICC-Cabinet
Committee (ICC-CC).

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

On May 2, 1996, the PBAC conducted a pre-bid conference where it required the three
pre-qualified bidders to submit, within ninety (90) days, their bid proposals. On August 2, 1996,
JANCOM and First Philippines requested for an extension of time to submit their
bids. PACTECH, on the other hand, withdrew from the bidding.
[G.R. No. 147465. January 30, 2002]
METROPOLITAN
MANILA
DEVELOPMENT
AUTHORITY, petitioner,
vs. JANCOM
ENVIRONMENTAL
CORPORATION
and
JANCOM
INTERNATIONAL
DEVELOPMENT PROJECTS PTY. LIMITED OF AUSTRALIA, respondents.
DECISION
MELO, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Civil
Procedure filed by petitioner Metropolitan Manila Development Authority (MMDA), seeking to
reverse and set aside the November 13, 2000 decision of the Court of Appeals declaring valid
and perfected the waste management contract entered into by the Republic of the Philippines,
represented by the Secretary of National Resources and the Executive Committee to oversee
the build-operate-transfer implementation of solid waste management projects, and JANCOM
Environmental Corporation.
The pertinent facts are as follows:
In 1994, then President Fidel V. Ramos issued Presidential Memorandum Order No. 202
creating the Executive Committee (EXECOM) to oversee the BOT implementation of solid waste
management projects, headed by the Chairman of the MMDA and the Cabinet Officer for
Regional Development-National Capital Region (CORD-NCR). The EXECOM was to oversee
and develop waste-to-energy projects for the waste disposal sites in San Mateo, Rizal and
Carmona, Cavite under the build-operate-transfer (BOT) scheme. The terms of reference for the
waste-to-energy projects provided that its proponents should have the capability to establish

Subsequently, JANCOM entered into a partnership with Asea Brown Boveri (ABB) to form
JANCOM Environmental Corporation while First Philippines formed a partnership
with OGDEN. Due to the change in the composition of the proponents, particularly in their
technology partners and contractors, the PBAC conducted a post pre-qualification evaluation.
During the second bid conference, the bid proposals of First Philippines for the Carmona
site and JANCOM for the San Mateo site were found to be complete and
responsive. Consequently, on February 12, 1997, JANCOM and First Philippines were declared
the winning bidders, respectively, for the San Mateo and the Carmona projects.
In a letter dated February 27, 1997, then MMDA Chairman Prospero I. Oreta informed
JANCOMs Chief Executive Officer Jay Alparslan that the EXECOM had approved the PBAC
recommendation to award to JANCOM the San Mateo Waste-to-Energy Project on the basis of
the final Evaluation Report declaring JANCOM International Ltd., Pty., together with Asea Brown
Boveri (ABB), as the sole complying (winning) bidder for the San Mateo Waste Disposal site,
subject to negotiation and mutual approval of the terms and conditions of the contract of
award. The letter also notified Alparslan that the EXECOM had created a negotiating team
composed of Secretary General Antonio Hidalgo of the Housing and Urban Development
Coordinating Council, Director Ronald G. Fontamillas, General Manager Roberto Nacianceno of
MMDA, and Atty. Eduardo Torres of the host local government unit to work out and finalize the
contract award. Chairman Oreta requested JANCOM to submit to the EXECOM the composition
of its own negotiating team.
Thereafter, after a series of meetings and consultations between the negotiating teams of
EXECOM and JANCOM, a draft BOT contract was prepared and presented to the Presidential
Task Force on Solid Waste Management.

On December 19, 1997, the BOT Contract for the waste-to-energy project was signed
between JANCOM and the Philippine Government, represented by the Presidential Task Force
on Solid Waste Management through DENR Secretary Victor Ramos, CORD-NCR Chairman
Dionisio dela Serna, and MMDA Chairman Prospero Oreta.
On March 5, 1998, the BOT contract was submitted to President Ramos for approval but
this was too close to the end of his term which expired without him signing the
contract. President Ramos, however, endorsed the contract to incoming President Joseph E.
Estrada.
With the change of administration, the composition of the EXECOM also changed.
Memorandum Order No. 19 appointed the Chairman of the Presidential Committee on Flagship
Programs and Project to be the EXECOM chairman. Too, Republic Act No. 8749, otherwise
known as the Clean Air Act of 1999, was passed by Congress. And due to the clamor of
residents of Rizal province, President Estrada had, in the interim, also ordered the closure of
the San Mateo landfill. Due to these circumstances, the Greater Manila Solid Waste
Management Committee adopted a resolution not to pursue the BOT contract with
JANCOM. Subsequently, in a letter dated November 4, 1999, Roberto Aventajado, Chairman of
the Presidential Committee on Flagship Programs and Project informed Mr. Jay Alparslan,
Chairman of JANCOM, that due to changes in policy and economic environment (Clean Air Act
and non-availability of the San Mateo landfill), the implementation of the BOT contract executed
and signed between JANCOM and the Philippine Government would no longer be pursued. The
letter stated that other alternative implementation arrangements for solid waste management for
Metro Manila would be considered instead.
JANCOM appealed to President Joseph Estrada the position taken by the EXECOM not to
pursue the BOT Contract executed and signed between JANCOM and the Philippine
Government, refuting the cited reasons for non-implementation. Despite the pendency of the
appeal, MMDA, on February 22, 2000, caused the publication in a newspaper of an invitation to
pre-qualify and to submit proposals for solid waste management projects for Metro
Manila. JANCOM thus filed with the Regional Trial Court of Pasig a petition for certiorari to
declare i) the resolution of the Greater Metropolitan Manila Solid Waste Management Committee
disregarding the BOT Contract and ii) the acts of MMDA calling for bids and authorizing a new
contract for Metro Manila waste management, as illegal, unconstitutional, and void; and for
prohibition to enjoin the Greater Metropolitan Manila Solid Waste Management Committee and
MMDA from implementing the assailed resolution and disregarding the Award to, and the BOT
contract with, JANCOM, and from making another award in its place. On May 29, 2000, the trial
court rendered a decision, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor of
petitioners JANCOM ENVIRONMENTAL CORPORATION, and JANCOM INTERNATIONAL
DEVELOPMENT PROJECTS PTY., LIMITED OF AUSTRALIA, and against respondent
GREATER METROPOLITAN MANILA SOLID WASTE MANAGEMENT COMM., and HON.
ROBERTO N. AVENTAJADO, in his Capacity as Chairman of the said Committee, METRO
MANILA DEVELOPMENT AUTHORITY and HON. JEJOMAR C. BINAY, in his capacity as
Chairman of said Authority, declaring the Resolution of respondent Greater Metropolitan Manila
Solid Waste Management Committee disregarding petitioners BOT Award Contract and calling
for bids for and authorizing a new contract for the Metro Manila waste management ILLEGAL
and VOID.

Moreover, respondents and their agents are hereby PROHIBITED and ENJOINED from
implementing the aforesaid Resolution and disregarding petitioners BOT Award Contract and
from making another award in its place.
Let it be emphasized that this Court is not preventing or stopping the government from
implementing infrastructure projects as it is aware of the proscription under PD 1818. On the
contrary, the Court is paving the way for the necessary and modern solution to the perennial
garbage problem that has been the major headache of the government and in the process would
serve to attract more investors in the country.
(Rollo,p. 159.)
Instead of appealing the decision, MMDA filed a special civil action for certiorari with
prayer for a temporary restraining order with the Court of Appeals which was later docketed
therein as CA-G.R. SP No. 59021. The appellate court not only required JANCOM to comment
on the petition, it also granted MMDAs prayer for a temporary restraining order. During the
pendency of the petition for certiorari, JANCOM moved for the execution of the RTC decision,
which was opposed by MMDA. However, the RTC granted the motion for execution on the
ground that its decision had become final since MMDA had not appealed the same to the Court
of Appeals. MMDA moved to declare respondents and the RTC judge in contempt of court,
alleging that the RTCs grant of execution was abuse of and interference with judicial rules and
processes.
On November 13, 2001, the Court of Appeals dismissed the petition in CA-G.R. SP No.
59021 and a companion case, CA-G.R. SP No. 60303.
MMDAs motion for reconsideration of said decision having been denied, MMDA filed the
instant petition, alleging that the Court of Appeals gravely erred in finding that:
1) There is a valid and binding contract between the Republic of the Philippines and
JANCOM given that: a) the contract does not bear the signature of the President
of the Philippines; b) the conditions precedent specified in the contract were not
complied with; and c) there was no valid notice of award.
2) The MMDA had not seasonably appealed the Decision of the lower court via a
petition for certiorari.
Before taking up the substantive issue in question, we shall first dispose of the question as
to whether it is fatal to petitioners cause, that rather than appealing the trial courts decision to
the Court of Appeals, it instead filed a petition for certiorari. While petitioner claims that the trial
courts decision never became final by virtue of its having appealed by certiorari to the Court of
Appeals, the trial court ruled that petitioners failure to file an appeal has made its decision final
and executory. At bottom, the question involves a determination of the propriety of petitioners
choice of the remedy of certiorari in questioning the decision of the trial court.
Section 1, Rule 65 of the 1997 Rules of Civil Procedure provides:

Section 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer,
and granting such incidental reliefs as law and justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order, or resolution
subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a
sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule
46.
Plain it is from a reading of the above provision that certiorari will lie only where a court
has acted without or in excess of jurisdiction or with grave abuse of discretion. If the court has
jurisdiction over the subject matter and of the person, its rulings upon all questions involved are
within its jurisdiction, however irregular or erroneous these may be, they cannot be corrected
bycertiorari. Correction may be obtained only by an appeal from the final decision.
Verily, Section 1, Rule 41 of the 1997 Rules of Civil Procedure provides:
SEC. 1. Subject of appeal. An appeal may be taken from a judgment or final order that
completely disposes of the case or of a particular matter therein when declared by these Rules
to be appealable.
xxx

xxx
xxx

In all the above instances where the judgment or final order is not appealable, the aggrieved
party may file an appropriate special civil action under Rule 65.
There can be no dispute that the trial courts May 29, 2000 decision was a final order or
judgment which MMDA should have appealed, had it been so minded. In its decision, the trial
court disposed of the main controversy by declaring the Resolution of respondent Greater
Metropolitan Manila Solid Waste Management Committee disregarding petitioners BOT Award
Contract and calling for bids for and authorizing a new contract for the Metro Manila waste
management ILLEGAL and VOID. This ruling completely disposed of the controversy between
MMDA and JANCOM. In BA Finance Corporation vs. CA (229 SCRA 5667 [1994]), we held that
a final order or judgment is one which disposes of the whole subject matter or terminates a
particular proceeding or action, leaving nothing to be done but to enforce by execution what has
been determined. An order or judgment is deemed final when it finally disposes of the pending
action so that nothing more can be done with it in the trial court. In other words, a final order is
that which gives an end to the litigation. A final order or judgment finally disposes of,
adjudicates, or determines the rights, or some right or rights of the parties, either on the entire
controversy or on some definite and separate branch thereof, and concludes them until it is
reversed or set aside. Where no issue is left for future consideration, except the fact of
compliance or non-compliance with the terms of the judgment or doer, such judgment or order is
final and appealable (Investments, Inc. vs. Court of Appeals, 147 SCRA 334 [1987]).

However, instead of appealing the decision, MMDA resorted to the extraordinary remedy
of certiorari, as a mode of obtaining reversal of the judgment. This cannot be done. The
judgment was not in any sense null and void ab initio, incapable of producing any legal effects
whatever, which could be resisted at any time and in any court it was attempted. It was a
judgment which could or may have suffered from some substantial error in procedure or in
findings of fact or of law, and on that account, it could have been reversed or modified on
appeal. But since it was not appealed, it became final and has thus gone beyond the reach of
any court to modify in any substantive aspect. The remedy to obtain reversal or modification of
the judgment on the merits is appeal. This is true even if the error, or one of the errors, ascribed
to the court rendering the judgment is its lack of jurisdiction over the subject matter, or the
exercise of power in excess thereof, or grave abuse of discretion in the findings of fact or of law
set out in the decision. The existence and availability of the right of appeal proscribes a resort
to certiorari, because one of the requirements for availment of the latter remedy is precisely that
there should be no appeal (Mercado vs. CA, 162 SCRA 75 [1988]). As incisively observed by
the Court of Appeals:
The special civil action for certiorari is available only when there is no appeal nor any plain,
speedy and adequate remedy in the ordinary course of law (Sec. 1, rule 65, id.)
Admittedly, appeal could have been taken from the assailed RTC decision. However, petitioners
maintain that appeal is not a speedy remedy because the RTC decision prohibiting them from
conducting a bidding for a new waste disposal project has adverse and serious effects on the
citys garbage situation.
Nevertheless, the RTC decision is not immediately executory. Only judgments in actions for
injunction, receivership, accounting and support and such other judgments as are now or may
hereafter be declared to be immediately executory shall be enforced after their rendition and
shall not be stayed by an appeal therefrom, unless otherwise ordered by the trial court (Sec. 4,
rule 39, id.).
Since the RTC decision is not immediately executory, appeal would have stayed its
execution. Consequently, the adverse effects of said decision will not visit upon petitioners
during the appeal. In other words, appeal is a plain, speedy and adequate remedy in the
ordinary course of the law.
But as no appeal was taken within the reglementary period, the RTC decision had become final
and executory. Well-settled is the rule that the special civil action for certiorari may not be
invoked as a substitute for the remedy of appeal (BF Corporation vs. Court of Appeals, 288
SCRA 267). Therefore, the extraordinary remedy of certiorari does not lie.
Moreover, petitioners instituted the instant action without filing a motion for reconsideration of the
RTC decision. Doctrinal is the rule that certiorari will not lie unless a motion for reconsideration
is first filed before the respondent tribunal to allow it an opportunity to correct its errors (Zapanta
vs. NLRC, 292 SCRA 580).
(Rollo, p. 47-48.)

Admittedly, there are instances where the extraordinary remedy of certiorari may be
resorted to despite the availability of an appeal. In Ruiz, Jr. vs. Court of Appeals (220 SCRA 490
[1993]), we held:
Considered extraordinary, [certiorari] is made available only when there is no appeal, nor any
plain, speedy or adequate remedy in the ordinary course of the law (Rule 65, Rules of Court,
Section 1). The long line of decisions denying the petition for certiorari, either before appeal was
availed or specially in instances where the appeal period has lapsed, far outnumbers the
instances when certiorari was given due course. The few significant exceptions were: when
public welfare and the advancement of public policy dictate; or when the broader interests of
justice so require, or when the writs issued are null . . . or when the questioned order amounts to
an oppressive exercise of judicial authority.
In the instant case, however, MMDA has not sufficiently established the existence of any
fact or reason to justify its resort to the extraordinary remedy of certiorari. Neither does the
record show that the instant case, indeed, falls under any of the exceptions aforementioned.
The Court thus holds that the Court of Appeals did not err in declaring that the trial courts
decision has become final due to the failure of MMDA to perfect an appeal within the
reglementary period.
With the foregoing disquisition, it would appear unnecessarily to discuss and resolve the
substantive issue posed before the Court. However, the procedural flaw notwithstanding, the
Court deems it judicious to take cognizance of the substantive question, if only to put petitioners
mind to rest.
In its second assignment of errors, petitioner MMDA contends that there is no valid and
binding contract between the Republic of the Philippines and respondents because: a) the BOT
contract does not bear the signature of the President of the Philippines; b) the conditions
precedent specified in the contract were not complied with; and that c) there was no valid notice
of award.
These contentions hold no water.
Under Article 1305 of the Civil Code, [a] contract is a meeting of minds between two
persons whereby one binds himself, with respect to the other, to give something or to render
some service. A contract undergoes three distinct stages preparation or negotiation, its
perfection, and finally, its consummation. Negotiation begins from the time the prospective
contracting parties manifest their interest in the contract and ends at the moment of agreement
of the parties. The perfection or birth of the contract takes place when the parties agree upon
the essential elements of the contract. The last stage is the consummation of the contract
wherein the parties fulfill or perform the terms agreed upon in the contract, culminating in the
extinguishment thereof(Bugatti vs. CA, 343 SCRA 335 [2000]). Article 1315 of the Civil Code,
provides that a contract is perfected by mere consent. Consent, on the other hand, is
manifested by the meeting of the offer and the acceptance upon the thing and the cause which
are to constitute the contract (See Article 1319, Civil Code). In the case at bar, the signing and
execution of the contract by the parties clearly show that, as between the parties, there was a
concurrence of offer and acceptance with respect to the material details of the contract, thereby

giving rise to the perfection of the contract. The execution and signing of the contract is not
disputed by the parties. As the Court of Appeals aptly held:
[C]ontrary to petitioners insistence that there was no perfected contract, the meeting of the offer
and acceptance upon the thing and the cause, which are to constitute the contract (Arts. 1315
and 1319, New Civil Code), is borne out by the records.
Admittedly, when petitioners accepted private respondents bid proposal (offer), there was, in
effect, a meeting of the minds upon the object (waste management project) and the cause (BOT
scheme). Hence, the perfection of the contract. In City of Cebu vs. Heirs of Candido Rubi (306
SCRA 108), the Supreme Court held that the effect of an unqualified acceptance of the offer or
proposal of the bidder is to perfect a contract, upon notice of the award to the bidder.
(Rollo, p. 48-49.)
In fact, in asserting that there is no valid and binding contract between the parties, MMDA
can only allege that there was no valid notice of award; that the contract does not bear the
signature of the President of the Philippines; and that the conditions precedent specified in the
contract were not complied with.
In asserting that the notice of award to JANCOM is not a proper notice of award, MMDA
points to the Implementing Rules and Regulations of Republic Act No. 6957, otherwise known as
the BOT Law, which require that i) prior to the notice of award, an Investment Coordinating
Committee clearance must first be obtained; and ii) the notice of award indicate the time within
which the awardee shall submit the prescribed performance security, proof of commitment of
equity contributions and indications of financing resources.
Admittedly, the notice of award has not complied with these requirements. However, the
defect was cured by the subsequent execution of the contract entered into and signed by
authorized representatives of the parties; hence, it may not be gainsaid that there is a perfected
contract existing between the parties giving to them certain rights and obligations (conditions
precedents) in accordance with the terms and conditions thereof. We borrow the words of the
Court of Appeals:
Petitioners belabor the point that there was no valid notice of award as to constitute acceptance
of private respondents offer. They maintain that former MMDA Chairman Oretas letter to
JANCOM EC dated February 27, 1997 cannot be considered as a valid notice of award as it
does not comply with the rules implementing Rep. Act No. 6957, as amended. The argument is
untenable.
The fact that Chairman Oretas letter informed JANCOM EC that it was the sole complying
(winning) bidder for the San Mateo project leads to no other conclusion than that the project was
being awarded to it. But assuming that said notice of award did not comply with the legal
requirements, private respondents cannot be faulted therefore as it was the government
representatives duty to issue the proper notice.
In any event, petitioners, as successors of those who previously acted for the government
(Chairman Oreta, et al), are estopped from assailing the validity of the notice of award issued by

the latter. As private respondents correctly observed, in negotiating on the terms and conditions
of the BOT contract and eventually signing said contract, the government had led private
respondents to believe that the notice of award given to them satisfied all the requirement of the
law.
While the government cannot be estopped by the erroneous acts of its agents, nevertheless,
petitioners may not now assail the validity of the subject notice of award to the prejudice of
private respondents. Until the institution of the original action before the RTC, invalidity of the
notice of award was never invoked as a ground for termination of the BOT contract. In fact, the
reasons cited for terminating the San Mateo project, per Chairman Aventajados letter to
JANCOM EC dated November 4, 1999, were its purported non-implementability and non-viability
on account of supervening events, e.g., passage of the Clean Air Act, etc.

As regards the Presidents approval of infrastructure projects required under Section 59 of

Executive Order No. 292, said section does not apply to the BOT contract in question. Sec.
59 should be correlated with Sec. 58 of Exec. Order No. 292. Said sections read:
SECTION 58. Ceiling for Infrastructure Contracts. The following shall be the ceilings for all
civil works, construction and other contracts for infrastructure projects, including supply contracts
for said projects, awarded through public bidding or through negotiation, which may be approved
by the Secretaries of Public Works and Highways, Transportation and Communications, Local
Government with respect to Rural Road improvement Project and governing boards of
government-owned or controlled corporations:
xxx

xxx
xxx

(Rollo, p. 49-50.)
MMDA also points to the absence of the Presidents signature as proof that the same has
not yet been perfected. Not only that, the authority of the signatories to bind the Republic has
even been put to question. Firstly, it is pointed out that Memorandum Order No. 202 creating the
Executive Committee to oversee the BOT implementation of solid waste management projects
only charged the officials thereof with the duty of recommending to the President the specific
project to be implemented under the BOT scheme for both San Mateo and Carmona
sites. Hence, it is concluded that the signatories, CORD-NCR Chairman Dionisio dela Serna
and MMDA Chairman Prospero Oreta, had no authority to enter into any waste management
project for and in behalf of the Government. Secondly, Section 59 of Executive Order No. 292 is
relied upon as authority for the proposition that presidential approval is necessary for the validity
of the contract.
The first argument conveniently overlooks the fact that then Secretary of Environment and
Natural Resources Victor Ramos was likewise a signatory to the contract. While dela Serna and
Oreta may not have had any authority to sign, the Secretary of Environment and Natural
Resources has such an authority. In fact, the authority of the signatories to the contract was not
denied by the Solicitor General. Moreover, as observed by the Court of Appeals, [i]t was not
alleged, much less shown, that those who signed in behalf of the Republic had acted beyond the
scope of their authority.
In truth, the argument raised by MMDA does not focus on the lack of authority of the
signatories, but on the amount involved as placing the contract beyond the authority of the
signatories to approve. Section 59 of Executive Order No. 292 reads:
Section 59. Contracts for Approval by the President. Contracts for infrastructure projects,
including contracts for the supply of materials and equipment to be used in said projects, which
involve amounts above the ceilings provided in the preceding section shall be approved by the
President: Provided, That the President may, when conditions so warrant, and upon
recommendation of the National Economic and Development Authority, revise the aforesaid
ceilings of approving authority.
However, the Court of Appeals trenchantly observed in this connection:

Save as provided for above, the approval ceilings assigned to the departments/agencies
involved in national infrastructure and construction projects shall remain at the levels provided in
existing laws, rules and regulations.
Contrary to petitioners claim that all infrastructure contracts require the Presidents approval
(Petition, p. 16), Sec. 59 provides that such approval is required only in infrastructure contracts
involving amounts exceeding the ceilings set in Sec. 58. Significantly, the infrastructure contracts
treated in Sec. 58 pertain only to those which may be approved by the Secretaries of Public
Works and Highways, Transportation and Communications, Local Government (with respect to
Rural Road Improvement Project) and the governing boards of certain government-owned or
controlled corporations. Consequently, the BOT contract in question, which was approved by the
DENR Secretary and the EXCOM Chairman and Co-Chairman, is not covered by Exec. Order
No. 292.
(Rollo, p. 51-52.)
The provision pertinent to the authority of the Secretary of Environment and Natural
Resources would actually be Section 1 of Executive Order No. 380, Series of 1989 which
provides that The Secretaries of all Departments and Governing Boards of government-owned
or controlled corporations [except the Secretaries of Public Works and Highways, Transportation
and Communication, and Local Government with respect to Rural Road Improvement
projects] can enter into publicly bidded contracts regardless of amount (See also Section
515,Government Accounting and Auditing Manual Volume I). Consequently, MMDA may not
claim that the BOT contract is not valid and binding due to the lack of presidential approval.
Significantly, the contract itself provides that the signature of the President is necessary
only for its effectivity (not perfection), pursuant to Article 19 of the contract, which reads:
This contract shall become effective upon approval by the President of the Republic of
the Philippines pursuant to existing laws subject to the condition, precedent in Article 18. This
contract shall remain in full force and effect for twenty-five (25) years subject to renewal for
another twenty-five (25) years from the date of Effectivity. Such renewal will be subject to
mutual agreement of the parties and approval of the President of the Republic of the Philippines.

(Rollo, p. 94.)
Stated differently, while the twenty-five year effectivity period of the contract has not yet
started to run because of the absence of the Presidents signature, the contract has,
nonetheless, already been perfected.
As to the contention that there is no perfected contract due to JANCOMs failure to comply
with several conditions precedent, the same is, likewise, unmeritorious. Article 18 of the BOT
contract reads:
ARTICLE 18
CONDITIONS PRECEDENT
xxx
18.2.1.
The BOT COMPANY hereby undertakes to provide the following within 2
months from execution of this Contract as an effective document:
a) sufficient proof of the actual equity contributions from the proposed shareholders
of the BOT COMPANY in a total amount not less than PHP500,000,000 in
accordance with the BOT Law and the implementing rules and regulations;
b) sufficient proof of financial commitment from a lending institution sufficient to
cover total project cost in accordance with the BOT Law and the implementing
rules and regulations;
c) to support its obligation under this Contract, the BOT COMPANY shall submit a
security bond to the CLIENT in accordance with the form and amount required
under the BOT Law.
xxx
18.2.3
Completion of Documentary Requirements as per Schedule 4 by the
BOT Company
As clearly stated in Article 18, JANCOM undertook to comply with the stated
conditions within 2 months from execution of the Contract as an effective document. Since the
President of thePhilippines has not yet affixed his signature on the contract, the same has not
yet become an effective document. Thus, the two-month period within which JANCOM should
comply with the conditions has not yet started to run. It cannot thus be said that JANCOM has
already failed to comply with the conditions precedent mandated by the contract. By arguing
that failure [of JANCOM] to comply with the conditions results in the failure of a contract or
prevents the judicial relation from coming into existence, MMDA reads into the contract
something which is not contemplated by the parties. If the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations
shall control (Art. 1370, Civil Code).

We, therefore, hold that the Court of Appeals did not err when it declared the existence of
a valid and perfected contract between the Republic of the Philippines and JANCOM. There
being a perfected contract, MMDA cannot revoke or renounce the same without the consent of
the other. From the moment of perfection, the parties are bound not only to the fulfillment of
what has been expressly stipulated but also to all the consequences which, according to their
nature, may be in keeping with good faith, usage, and law (Article 1315, Civil Code). The
contract has the force of law between the parties and they are expected to abide in good faith by
their respective contractual commitments, not weasel out of them. Just as nobody can be forced
to enter into a contract, in the same manner, once a contract is entered into, no party can
renounce it unilaterally or without the consent of the other. It is a general principle of law that no
one may be permitted to change his mind or disavow and go back upon his own acts, or to
proceed contrary thereto, to the prejudice of the other party. Nonetheless, it has to be repeated
that although the contract is a perfected one, it is still ineffective or unimplementable until and
unless it is approved by the President.
Moreover, if after a perfected and binding contract has been executed between the
parties, it occurs to one of them to allege some defect therein as reason for annulling it, the
alleged defect must be conclusively proven, since the validity and the fulfillment of contracts
cannot be left to the will of one of the contracting parties. In the case at bar, the reasons cited
by MMDA for not pushing through with the subject contract were: 1) the passage of the Clean Air
Act, which allegedly bans incineration; 2) the closure of the San Mateo landfill site; and 3) the
costly tipping fee. These reasons are bereft of merit
Once again, we make reference to the insightful declarations of the Court of Appeals:
Sec. 20 of the Clean Air Act pertinently reads:
SECTION
20.
Ban on Incineration. Incineration, hereby defined as the burning of
municipal, bio-chemical and hazardous wastes, which process emits poisonous and toxic fumes,
is hereby prohibited: x x x.
Section 20 does not absolutely prohibit incineration as a mode of waste disposal; rather only
those burning processes which emit poisonous and toxic fumes are banned.
As regards the projected closure of the San Mateo landfill vis--vis the implementability of the
contract, Art. 2.3 thereof expressly states that [i]n the event the project Site is not delivered x x
x, the Presidential task Force on Solid Waste Management (PTFSWM) and the Client,
shall provide within a reasonable period of time, a suitable alternative acceptable to the BOT
COMPANY.
With respect to the alleged financial non-viability of the project because the MMDA and the local
government units cannot afford the tipping fees under the contract, this circumstance cannot, by
itself, abrogate the entire agreement.
Doctrinal is the rule that neither the law nor the courts will extricate a party from an unwise or
undesirable contract, or stipulation for that matter, he or she entered into with full awareness of
its consequences (Opulencia vs. CA, 293 SCRA 385). Indeed, the terms and conditions of the
subject contract were arrived at after due negotiations between the parties thereto.

(Rollo, p. 54.)
WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of merit
and the decision of the Court of Appeals in CA-G.R. SP No. 59021 dated November 13,
2001AFFIRMED. No costs.
SO ORDERED.

Daanbantayan Cebu, in the morning of July 20, 1979, they spotted the accused Florentino
Rodrigo and Mariano Dayday aboard a banca. As they approached the banca Rodrigo
attempted to light a bottle of dynamite but which the succeeded ill slopping. Both accused were
arrested and three bottles of dynamite and two fishnets were confiscated from them.
Instead of conducting a preliminary investigation, respondent Judge motu proprio treated the
Complaint as one for Violation of Act 3023 3 and, therefore, within its jurisdiction, since the
offense charged did not warrant prosecution under Presidential Decree No. 9 relating to crimes
against national security. He then proceeded to arraign the accused both of whom pleaded
guilty, and rendered judgment on August 6, 1979, quoted in full hereunder: t.hqw
DECISION

G.R. No. L-51773 May 16, 1980

LT. COL. RODRIGO S. DE GUZMAN and PEOPLE OF THE PHILIPPINES, petitioners,
vs.
MUNICIPAL CIRCUIT JUDGE MARCELINO M. ESCALONA, FLORENTINO RODRIGO, and
MARIANO DAYDAY, respondents.

MELENCIO-HERRERA, J.:+.wph!1
In this original Petition for Certiorari, which was given due course in our Resolution of February
6, 1980, the sole question to be resolved is whether or not respondent Municipal Circuit Court
Judge, in Criminal Case No. 2450-D, had jurisdiction to try the offense charged and render
judgment although the criminal Complaint which was filed before him was only for preliminary
investigation.
The Complaint charged the accused Florentino Rodrigo and Mariano Dayday with "Illegal
Possession of Explosive locally known as 'dinamita' (P.D. No. 1058)" before the Third Municipal
Circuit Court at Daanbantayan Medellin, Cebu (Crim. Case No. 2450-D), and reads as
follows: t.hqw

This case was originally filed in violation of Section 2 of PD No. 9, but is

prosecuted under Act 3023 upon suggestion of the Court, for under the facts
and circumstances of this case the interests of justice require that this
offense be prosecuted under Act 3023 inasmuch as the possession is not in
connection with subversion or insurrection and that the quantity and quality
of the homemade explosive do not come to the level of destructiveness
contemplated under PD No. 9.
Upon arraignment, both accused entered a plea of guilty. in view thereof,
the Court hereby renders a decision finding and declaring above two
accused GUILTY beyond reasonable doubt of the offense of Illegal
Possession of Explosive at the time and place stated in the complaint, in
violation of Act 3023, and they are thereby sentenced to suffer a penalty
consisting of imprisonment for four (4) months and fine of P 1,000.00 each,
in accordance with the penal provisions of said Act, and to pay the costs.
Apprehended explosives contained in two (2) beer bottles are confiscated
and ordered turned over to the 342nd PC Company, Bogo, Cebu, for proper
disposal.
SO ORDERED. 4
Both the accused have served their sentence.

That on the 20th day of July, 1979 at around 9:00 o'clock in the morning,
more or less, at Sitio Suba, Bgy. Maya, Municipality of Daanbantayan,
Province of Cebu, Philippines, and within the Preliminary Jurisdiction of this
Honorable Court, the above-named accused while in the seawaters of the
above-mentioned place, confederating and mutually helping with one
another, without authority of the law and without proper permit from
authorities, did then and there willfully, unlawfully, and feloniously possess,
keep an explosive, locally known as 'DINAMITA' in their banca purposely for
use of illegal fishing in which case, three (3) bottles of explosives, two (2)
paddles, two (2) fishnets locally known as "SIBOT" and one (1) banca were
recovered from their possession and control, which acts of the abovenamed accused is a gross violation of PD No. 1058.
All contrary to law. 1 (Emphasis supplied)
The Complaint was precipitated by the fact, as disclosed by the Sworn Statements of CIC Carlos
Dosdos and Sgt. Jose Andales 2 that when they conducted a seaborne patrol along

Contesting the course of action taken and the judgment rendered by respondent Judge, herein
petitioner Lt. Col. Rodrigo S. De Guzman, PC Provincial Commander Integrated National Police
Superintendent at Camp Sotero Cabahug, Cebu City, instituted these certiorari proceedings
alleging mainly that the offense charged was one for possession of explosives intended for
illegal fishing under Presidential Decree No. 704, as amended by Presidential Decree No. 1058,
and not for violation of Act 3023 which had long been repealed by several laws and decrees;
that the penalty provided for by current legislation is one which falls within the exclusive original
jurisdiction of the Court of First Instance; and that respondent Judge's Decision has no legal
basis.
For his part, respondent Judge submits that only possession of explosives in connection with
subversion is covered by Presidential Decree No. 9, thus, the old law on illegal possession of
explosives, Act 3023, has not been completely repealed; that having found that the possession
by the two accused of two bottles of home-made explosives was solely for fishing purposes and
had no connection with subversion, the illegal act should fall not under Presidential Decree No. 9
but under Act 3023; that having arrived at said conclusion there was nothing irregular in his
assuming original jurisdiction and not merely conducting the second stage of the preliminary

investigation, for under Section 87 (c) of the Judiciary Act the Municipal Court has jurisdiction
over illegal possession of explosives. Respondent Judge further justifies his course of action as
being in the interest of the speedy and inexpensive administration of justice.
The accused, Florentino Rodrigo and Mariano Dayday, whom we ordered impleaded as party
respondents, filed their Comment on the Petition, stating that they freely and voluntarily entered
a plea of guilty with the able assistance of counsel; that before handing down the Decision,
respondent Judge made them understand the nature and gravity of their crime; that even the
state prosecutors showed their conformity and appreciation for the wisdom and practicality of the
judgment of respondent Judge; and that they appreciated the sentence imposed on them
because they did not contemplate to commit so grave an offense, the two bottles of confiscated
explosives being adulterated and not of genuine quality, and considering that they are illiterates
and ignorant of the destructive use of these explosives.
Significantly, the Solicitor General representing the People of the Philippines and whom we
likewise ordered impleaded as party petitioner, has joined petitioner De Guzman in assailing the
validity of the action taken by respondent Judge in the criminal case before him.
We find this Petition, indeed, impressed with merit and that respondent Judge exceeded his
jurisdiction when he rendered the questioned Decision of August 6, 1979.
The complaint filed against the two accused specifically alleged that they wilfully and unlawfully
possessed in their banca explosives locally known as "dinamita" purposely intended for use in
illegal fishing in violation of Presidential Decree No. 1058.
Presidential Decree No. 1058 is an amendatory decree, which increased the penalties for
certain forms of illegal fishing and for other acts made punishable under Presidential Decree No.
704 or the "Fisheries Decree of 1975". The pertinent portion of Section 33 of Presidential Decree
No. 704, as amended by Presidential Decree No. 1058 reads: t.hqw
Sec. 33. Illegal fishing; illegal possession of explosives intended for illegal
fishing; dealing in illegally caught fish or fishery/aquatic products. - It shall
be unlawful for any person to catch, take or gather or cause to be caught,
taken gathered fish or fisheries/aquatic products in Philippine waters with
the use of explosives, obnoxious or poisonous substance, or by the use of
electricity as defined in paragraphs (1), (m) and (d), respectively, of Section
3 hereof: Provided, that possession of such explosives with intent to use the
same for illegal fishing as herein defined shall be punishable as hereinafter
provided. ... (Emphasis supplied).
Section 38, subsection a (1) of Presidential Decree No. 704, as amended by Presidential Decree
No. 1058, correspondingly provides t.hqw

Jurisdiction over cases involving illegal possession of explosives intended for illegal fishing and
certain other acts prohibited under Presidential Decree No. 704, which was vested by Section 5
of Presidential Decree No. 1058 upon Military Tribunals created under Presidential Decree No.
39, as amended, 5 is now within the exclusive original jurisdiction of Courts of First Instance by
virtue of Letter of Instructions No. 772 dated November 27, 1978, issued by the President of the
Philippines, 6 and the Rules and Regulations implementing LOI No. 772 promulgated in the Joint
Circular, dated April 1, 1979, issued by the Minister of National Defense 7, in relation to the
Judiciary Act of 1948 as amended, in view of the penalty involved.
Since the purpose of preliminary investigation proper is to determine whether or not the accused
should be released or held for trial before the competent Court 8 the only jurisdiction of a
Municipal Judge at the preliminary investigation proper, where the offense charged does not fall
within the jurisdiction of the Municipal Court, is either to elevate the case to the proper Court with
his findings on preliminary investigation or, in the absence of probable cause to believe an
accused guilty, to dismiss the case. He cannot decide the case on the merits and if he does, he
acts without jurisdiction. 9 The duty of a Municipal Judge conducting the preliminary investigation
when the offense charged does not fall within his Court's jurisdiction is only to determine
whether or not the evidence presented support prima facie the allegations of fact contained in
the complaint, but he has no legal authority to determine the character of the crime and his
declaration upon that point can only be regarded as an expression of opinion in no wise binding
on the trial Court. 10
Therefore, it was erroneous for respondent Judge at the preliminary investigation of the criminal
complaint filed before him for the specific offense of illegal possession of explosives intended for
illegal fishing under Presidential Decree No. 704, as amended by Presidential Decree No. 1058,
to have rendered judgment and to have convicted the accused for illegal possession of
explosives under Act No. 3023 considering that his Court had no jurisdiction over the offense
charged in the Complaint, and, hence, was bereft of authority to determine the character of the
crime committed. His only jurisdiction was to elevate or dismiss the case. He could not decide
the case on the merits.
Considering that the Municipal Circuit Court lacked competent jurisdiction over the subject
matter of the criminal complaint against the accused respondents, we agree with the Solicitor
General that no jeopardy may be deemed to have attached by virtue of the erroneous and void
judgment of conviction rendered by respondent Judge as to bar a subsequent indictment and
trial of the case in the proper Court with jurisdiction over the offense. 11
WHEREFORE, we hereby set aside the Decision of August 6, 1979 rendered by respondent
Judge Marcelino M. Escalona of the Municipal Circuit Court of Medellin, Cebu, and remand this
case to him for preliminary investigation in accordance with law and the Rules.
Without costs.
SO ORDERED.

(1) By the penalty of imprisonment ranging from twelve (12) years to twentyfive (25) years in the case of mere possession of explosives intended for
illegal fishing. ... (Emphasis supplied).
As correctly pointed out by the Solicitor General in the Comment he filed for petitioner People of
the Philippines, respondent Judge's reference to Presidential Decree No. 9 is misplaced for,
indeed, there is no mention at all of, nor any reference to, Presidential Decree No. 9 in the
Complaint.

G.R. Nos. 120865-71 December 7, 1995

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE, BRANCH

70, REGIONAL TRIAL COURT OF BINANGONAN RIZAL; FLEET DEVELOPMENT, INC. and
CARLITO ARROYO; THE MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.

the Laguna Lake or making a clearing in the forest so that he can produce food for his family, to
understand why protecting birds, fish, and trees is more important than protecting him and
keeping his family alive.

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE, BRANCH
163, REGIONAL TRIAL COURT OF PASIG; MANILA MARINE LIFE BUSINESS
RESOURCES, INC. represented by, MR. TOBIAS REYNALD M. TIANGCO; MUNICIPALITY
OF TAGUIG, METRO MANILA and/or MAYOR RICARDO D. PAPA, JR., respondents.

How do we strike a balance between environmental protection, on the one hand, and the
individual personal interests of people, on the other?

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING JUDGE,
BRANCH 79, REGIONAL TRIAL COURT OF MORONG, RIZAL; GREENFIELD VENTURES
INDUSTRIAL DEVELOPMENT CORPORATION and R. J. ORION DEVELOPMENT
CORPORATION; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA
VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE,
BRANCH 162, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; IRMA FISHING &
TRADING CORP.; ARTM FISHING CORP.; BDR CORPORATION, MIRT CORPORATION and
TRIM CORPORATION; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH
78, REGIONAL TRIAL COURT OF MORONG, RIZAL; BLUE LAGOON FISHING CORP. and
ALCRIS CHICKEN GROWERS, INC.; MUNICIPALITY OF JALA-JALA and/or MAYOR
WALFREDO M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH
78, REGIONAL TRIAL COURT OF MORONG, RIZAL; AGP FISH VENTURES, INC.,
represented by its PRESIDENT ALFONSO PUYAT; MUNICIPALITY OF JALA-JALA and/or
MAYOR WALFREDO M. DE LA VEGA,respondents.

Towards environmental protection and ecology, navigational safety, and sustainable

development, Republic Act No. 4850 created the "Laguna Lake Development Authority." This
Government Agency is supposed to carry out and effectuate the aforesaid declared policy, so as
to accelerate the development and balanced growth of the Laguna Lake area and the
surrounding provinces, cities and towns, in the act clearly named, within the context of the
national and regional plans and policies for social and economic development.
Presidential Decree No. 813 of former President Ferdinand E. Marcos amended certain sections
of Republic Act No. 4850 because of the concern for the rapid expansion of Metropolitan Manila,
the suburbs and the lakeshore towns of Laguna de Bay, combined with current and prospective
uses of the lake for municipal-industrial water supply, irrigation, fisheries, and the like. Concern
on the part of the Government and the general public over: the environment impact of
development on the water quality and ecology of the lake and its related river systems; the
inflow of polluted water from the Pasig River, industrial, domestic and agricultural wastes from
developed areas around the lake; the increasing urbanization which induced the deterioration of
the lake, since water quality studies have shown that the lake will deteriorate further if steps are
not taken to check the same; and the floods in Metropolitan Manila area and the lakeshore
towns which will influence the hydraulic system of Laguna de Bay, since any scheme of
controlling the floods will necessarily involve the lake and its river systems, likewise gave
impetus to the creation of the Authority.
Section 1 of Republic Act No. 4850 was amended to read as follows:
Sec. 1. Declaration of Policy. It is hereby declared to be the national policy
to promote, and accelerate the development and balanced growth of the
Laguna Lake area and the surrounding provinces, cities and towns
hereinafter referred to as the region, within the context of the national and
regional plans and policies for social and economic development and to
carry out the development of the Laguna Lake region with due regard and
adequate provisions for environmental management and control,
preservation of the quality of human life and ecological systems, and the
prevention of undue ecological disturbances, deterioration and pollution. 1
Special powers of the Authority, pertinent to the issues in this case, include:

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,

vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING JUDGE,
BRANCH 161, REGIONAL TRIAL COURT OF PASIG, METRO MANILA; SEA MAR TRADING
CO. INC.; EASTERN LAGOON FISHING CORP.; MINAMAR FISHING CORP.; MUNICIPALITY
OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.

Sec. 3. Section 4 of the same Act is hereby further amended by adding

thereto seven new paragraphs to be known as paragraphs (j), (k), (l), (m),
(n), (o), and (p) which shall read as follows:
xxx xxx xxx

HERMOSISIMA, JR., J.:

It is difficult for a man, scavenging on the garbage dump created by affluence and profligate
consumption and extravagance of the rich or fishing in the murky waters of the Pasig River and

(j) The provisions of existing laws to the contrary

notwithstanding, to engage in fish production and other
aqua-culture projects in Laguna de Bay and other
bodies of water within its jurisdiction and in pursuance
thereof to conduct studies and make experiments,
whenever necessary, with the collaboration and

assistance of the Bureau of Fisheries and Aquatic

Resources, with the end in view of improving present
techniques and practices. Provided, that until modified,
altered or amended by the procedure provided in the
following sub-paragraph, the present laws, rules and
permits or authorizations remain in force;
(k) For the purpose of effectively regulating and
monitoring activities in Laguna de Bay,the Authority
shall have exclusive jurisdiction to issue new permit for
the use of the lake waters for any projects or activities
in or affecting the said lake including navigation,
construction, and operation of fishpens, fish
enclosures, fish corrals and the like, and to impose
necessary safeguards for lake quality control and
management and to collect necessary fees for said
activities and projects: Provided, That the fees collected
for fisheries may be shared between the Authority and
other government agencies and political sub-divisions
in such proportion as may be determined by the
President of the Philippines upon recommendation of
the Authority's Board: Provided, further, That the
Authority's Board may determine new areas of fishery
development or activities which it may place under the
supervision of the Bureau of Fisheries and Aquatic
Resources taking into account the overall development
plans and programs for Laguna de Bay and related
bodies of water: Provided, finally, That the Authority
shall subject to the approval of the President of the
Philippines promulgate such rules and regulations
which shall govern fisheries development activities in
Laguna de Bay which shall take into consideration
among others the following: socio-economic
amelioration of bonafide resident fishermen whether
individually or collectively in the form of cooperatives,
lakeshore town development, a master plan for fishpen
construction and operation, communal fishing ground
for lake shore town residents, and preference to lake
shore town residents in hiring laborer for fishery
projects;
(l) To require the cities and municipalities embraced
within the region to pass appropriate zoning ordinances
and other regulatory measures necessary to carry out
the objectives of the Authority and enforce the same
with the assistance of the Authority;
(m) The provisions of existing laws to the contrary
notwithstanding, to exercise water rights over public
waters within the Laguna de Bay region whenever
necessary to carry out the Authority's projects;
(n) To act in coordination with existing governmental
agencies in establishing water quality standards for
industrial, agricultural and municipal waste discharges
into the lake and to cooperate with said existing

agencies of the government of the Philippines in

enforcing such standards, or to separately pursue
enforcement and penalty actions as provided for in
Section 4 (d) and Section 39-A of this Act: Provided,
That in case of conflict on the appropriate water quality
standard to be enforced such conflict shall be resolved
thru the NEDA Board. 2
To more effectively perform the role of the Authority under Republic Act No. 4850, as though
Presidential Decree No. 813 were not thought to be completely effective, the Chief Executive,
feeling that the land and waters of the Laguna Lake Region are limited natural resources
requiring judicious management to their optimal utilization to insure renewability and to preserve
the ecological balance, the competing options for the use of such resources and conflicting
jurisdictions over such uses having created undue constraints on the institutional capabilities of
the Authority in the light of the limited powers vested in it by its charter, Executive Order No. 927
further defined and enlarged the functions and powers of the Authority and named and
enumerated the towns, cities and provinces encompassed by the term "Laguna de Bay Region".
Also, pertinent to the issues in this case are the following provisions of Executive Order No. 927
which include in particular the sharing of fees:
Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water within
the Lake Region: To effectively regulate and monitor activities in the Laguna
de Bay region, the Authority shall have exclusive jurisdiction to issue permit
for the use of all surface water for any projects or activities in or affecting the
said region including navigation, construction, and operation of fishpens,
fish enclosures, fish corrals and the like.
For the purpose of this Executive Order, the term "Laguna de Bay Region"
shall refer to the Provinces of Rizal and Laguna; the Cities of San Pablo,
Pasay, Caloocan, Quezon, Manila and Tagaytay; the towns of Tanauan, Sto.
Tomas and Malvar in Batangas Province; the towns of Silang and Carmona
in Cavite Province; the town of Lucban in Quezon Province; and the towns
of Marikina, Pasig, Taguig, Muntinlupa, and Pateros in Metro Manila.
Sec 3. Collection of Fees. The Authority is hereby empowered to collect
fees for the use of the lake water and its tributaries for all beneficial
purposes including but not limited to fisheries, recreation, municipal,
industrial, agricultural, navigation, irrigation, and waste disposal
purpose; Provided, that the rates of the fees to be collected, and the sharing
with other government agencies and political subdivisions, if necessary,
shall be subject to the approval of the President of the Philippines upon
recommendation of the Authority's Board, except fishpen fee, which will be
shared in the following manner; 20 percent of the fee shall go to the
lakeshore local governments, 5 percent shall go to the Project Development
Fund which shall be administered by a Council and the remaining 75
percent shall constitute the share of LLDA. However, after the
implementation within the three-year period of the Laguna Lake Fishery
Zoning and Management Plan, the sharing will be modified as follows:35
percent of the fishpen fee goes to the lakeshore local governments, 5
percent goes to the Project Development Fund and the remaining 60
percent shall be retained by LLDA; Provided, however, that the share of
LLDA shall form part of its corporate funds and shall not be remitted to the
National Treasury as an exception to the provisions of Presidential Decree
No. 1234. (Emphasis supplied)

It is important to note that Section 29 of Presidential Decree No. 813 defined the term "Laguna
Lake" in this manner:
Sec 41. Definition of Terms.
(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in this
Act, the same shall refer to Laguna de Bay which is that area covered by
the lake water when it is at the average annual maximum lake level of
elevation 12.50 meters, as referred to a datum 10.00 meters below mean
lower low water (M.L.L.W). Lands located at and below such elevation are
public lands which form part of the bed of said lake.
Then came Republic Act No. 7160, the Local Government Code of 1991. The municipalities in
the Laguna Lake Region interpreted the provisions of this law to mean that the newly passed
law gave municipal governments the exclusive jurisdiction to issue fishing privileges within their
municipal waters because R.A. 7160 provides:
Sec. 149. Fishery Rentals, Fees and Charges.
(a) Municipalities shall have the exclusive authority to grant fishery
privileges in the municipal waters and impose rental fees or charges
therefor in accordance with the provisions of this Section.
(b) The Sangguniang Bayan may:
(1) Grant fishing privileges to erect fish corrals, oyster,
mussel or other aquatic beds or bangus fry areas,
within a definite zone of the municipal waters, as
determined by it; . . . .
(2) Grant privilege to gather, take or catch bangus fry,
prawn fry or kawag-kawag or fry of other species and
fish from the municipal waters by nets, traps or other
fishing gears to marginal fishermen free from any rental
fee, charges or any other imposition whatsoever.
xxx xxx xxx
Sec. 447. Power, Duties, Functions and Compensation. . . . .
xxx xxx xxx
(XI) Subject to the provisions of Book II of this Code,
grant exclusive privileges of constructing fish corrals or
fishpens, or the taking or catching of bangus fry, prawn
fry orkawag-kawag or fry of any species or fish within
the municipal waters.
xxx xxx xxx

Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen
permits. Big fishpen operators took advantage of the occasion to establish fishpens and
fishcages to the consternation of the Authority. Unregulated fishpens and fishcages, as of July,
1995, occupied almost one-third of the entire lake water surface area, increasing the occupation
drastically from 7,000 hectares in 1990 to almost 21,000 hectares in 1995. The Mayor's permit to
construct fishpens and fishcages were all undertaken in violation of the policies adopted by the
Authority on fishpen zoning and the Laguna Lake carrying capacity.
To be sure, the implementation by the lakeshore municipalities of separate independent policies
in the operation of fishpens and fishcages within their claimed territorial municipal waters in the
lake and their indiscriminate grant of fishpen permits have already saturated the lake area with
fishpens, thereby aggravating the current environmental problems and ecological stress of
Laguna Lake.
In view of the foregoing circumstances, the Authority served notice to the general public that:
In compliance with the instructions of His Excellency PRESIDENT FIDEL V.
RAMOS given on June 23, 1993 at Pila, Laguna pursuant to Republic Act
4850 as amended by Presidential Decree 813 and Executive Order 927
series of 1983 and in line with the policies and programs of the Presidential
Task Force on Illegal Fishpens and Illegal Fishing, the general public is
hereby notified that:
1. All fishpens, fishcages and other aqua-culture structures in the Laguna de
Bay Region, which were not registered or to which no application for
registration and/or permit has been filed with Laguna Lake Development
Authority as of March 31, 1993 are hereby declared outrightly as illegal.
2. All fishpens, fishcages and other aqua-culture structures so declared as
illegal shall be subject to demolition which shall be undertaken by the
Presidential Task Force for Illegal Fishpen and Illegal Fishing.
3. Owners of fishpens, fishcages and other aqua-culture structures declared
as illegal shall, without prejudice to demolition of their structures be
criminally charged in accordance with Section 39-A of Republic Act 4850 as
amended by P.D. 813 for violation of the same laws. Violations of these laws
carries a penalty of imprisonment of not exceeding 3 years or a fine not
exceeding Five Thousand Pesos or both at the discretion of the court.
All operators of fishpens, fishcages and other aqua-culture structures
declared as illegal in accordance with the foregoing Notice shall have one
(1) month on or before 27 October 1993 to show cause before the LLDA
why their said fishpens, fishcages and other aqua-culture structures should
not be demolished/dismantled.
One month, thereafter, the Authority sent notices to the concerned owners of the illegally
constructed fishpens, fishcages and other aqua-culture structures advising them to dismantle
their respective structures within 10 days from receipt thereof, otherwise, demolition shall be
effected.
Reacting thereto, the affected fishpen owners filed injunction cases against the Authority before
various regional trial courts, to wit: (a) Civil Case No. 759-B, for Prohibition, Injunction and
Damages, Regional Trial Court, Branch 70, Binangonan, Rizal, filed by Fleet Development, Inc.
and Carlito Arroyo; (b) Civil Case No. 64049, for Injunction, Regional Trial Court, Branch 162,

Pasig, filed by IRMA Fishing and Trading Corp., ARTM Fishing Corp., BDR Corp., MIRT Corp.
and TRIM Corp.; (c) Civil Case No. 566, for Declaratory Relief and Injunction, Regional Trial
Court, Branch 163, Pasig, filed by Manila Marine Life Business Resources, Inc. and Tobias
Reynaldo M. Tianco; (d) Civil Case No. 556-M, for Prohibition, Injunction and Damages,
Regional Trial Court, Branch 78, Morong, Rizal, filed by AGP Fishing Ventures, Inc.; (e) Civil
Case No. 522-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78,
Morong, Rizal, filed by Blue Lagoon and Alcris Chicken Growers, Inc.; (f) Civil Case No. 554-,
for Certiorari and Prohibition, Regional Trial Court, Branch 79, Morong, Rizal, filed by
Greenfields Ventures Industrial Corp. and R.J. Orion Development Corp.; and (g) Civil Case No.
64124, for Injunction, Regional Trial Court, Branch 15, Pasig, filed by SEA-MAR Trading Co.,
Inc. and Eastern Lagoon Fishing Corp. and Minamar Fishing Corporation.
The Authority filed motions to dismiss the cases against it on jurisdictional grounds. The motions
to dismiss were invariably denied. Meanwhile, temporary restraining order/writs of preliminary
mandatory injunction were issued in Civil Cases Nos. 64124, 759 and 566 enjoining the
Authority from demolishing the fishpens and similar structures in question.
Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 120865-71, were
filed by the Authority with this court. Impleaded as parties-respondents are concerned regional
trial courts and respective private parties, and the municipalities and/or respective Mayors of
Binangonan, Taguig and Jala-jala, who issued permits for the construction and operation of
fishpens in Laguna de Bay. The Authority sought the following reliefs, viz.:
(A) Nullification of the temporary restraining order/writs of preliminary
injunction issued in Civil Cases Nos. 64125, 759 and 566;
(B) Permanent prohibition against the regional trial courts from exercising
jurisdiction over cases involving the Authority which is a co-equal body;
(C) Judicial pronouncement that R.A. 7610 (Local Government Code of
1991) did not repeal, alter or modify the provisions of R.A. 4850, as
amended, empowering the Authority to issue permits for fishpens, fishcages
and other aqua-culture structures in Laguna de Bay and that, the Authority
the government agency vested with exclusive authority to issue said
permits.
By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were referred to
the Court of Appeals.
In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's consolidated
petitions, the Court of Appeals holding that: (A) LLDA is not among those quasi-judicial agencies
of government whose decision or order are appealable only to the Court of Appeals; (B) the
LLDA charter does vest LLDA with quasi-judicial functions insofar as fishpens are concerned; (C)
the provisions of the LLDA charter insofar as fishing privileges in Laguna de Bay are concerned
had been repealed by the Local Government Code of 1991; (D) in view of the aforesaid repeal,
the power to grant permits devolved to and is now vested with their respective local government
units concerned.
Not satisfied with the Court of Appeals decision, the Authority has returned to this Court charging
the following errors:
1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN
ERROR WHEN IT RULED THAT THE LAGUNA LAKE DEVELOPMENT
AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY.

2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS

ERROR WHEN IT RULED THAT R.A. 4850 AS AMENDED BY P.D. 813
AND E.O. 927 SERIES OF 1983 HAS BEEN REPEALED BY REPUBLIC
ACT 7160. THE SAID RULING IS CONTRARY TO ESTABLISHED
PRINCIPLES AND JURISPRUDENCE OF STATUTORY CONSTRUCTION.
3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERROR WHEN IT RULED THAT THE POWER TO ISSUE FISHPEN
PERMITS IN LAGUNA DE BAY HAS BEEN DEVOLVED TO CONCERNED
(LAKESHORE) LOCAL GOVERNMENT UNITS.
We take a simplistic view of the controversy. Actually, the main and only issue posed is: Which
agency of the Government the Laguna Lake Development Authority or the towns and
municipalities comprising the region should exercise jurisdiction over the Laguna Lake and its
environs insofar as the issuance of permits for fishery privileges is concerned?
Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act No. 4850,
the provisions of Presidential Decree No. 813, and Section 2 of Executive Order No. 927, cited
above, specifically provide that the Laguna Lake Development Authority shall have exclusive
jurisdiction to issue permits for the use of all surface water for any projects or activities in or
affecting the said region, including navigation, construction, and operation of fishpens, fish
enclosures, fish corrals and the like. On the other hand, Republic Act No. 7160, the Local
Government Code of 1991, has granted to the municipalities the exclusive authority to grant
fishery privileges in municipal waters. The Sangguniang Bayan may grant fishery privileges to
erect fish corrals, oyster, mussels or other aquatic beds or bangus fry area within a definite zone
of the municipal waters.
We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the
aforementioned laws creating the Laguna Lake Development Authority and granting the latter
water rights authority over Laguna de Bay and the lake region.
The Local Government Code of 1991 does not contain any express provision which categorically
expressly repeal the charter of the Authority. It has to be conceded that there was no intent on
the part of the legislature to repeal Republic Act No. 4850 and its amendments. The repeal of
laws should be made clear and expressed.
It has to be conceded that the charter of the Laguna Lake Development Authority constitutes a
special law. Republic Act No. 7160, the Local Government Code of 1991, is a general law. It is
basic in statutory construction that the enactment of a later legislation which is a general law
cannot be construed to have repealed a special law. It is a well-settled rule in this jurisdiction
that "a special statute, provided for a particular case or class of cases, is not repealed by a
subsequent statute, general in its terms, provisions and application, unless the intent to repeal or
alter is manifest, although the terms of the general law are broad enough to include the cases
embraced in the special law." 3
Where there is a conflict between a general law and a special statute, the special statute should
prevail since it evinces the legislative intent more clearly than the general statute. The special
law is to be taken as an exception to the general law in the absence of special circumstances
forcing a contrary conclusion. This is because implied repeals are not favored and as much as
possible, effect must be given to all enactments of the legislature. A special law cannot be
repealed, amended or altered by a subsequent general law by mere implication. 4
Thus, it has to be concluded that the charter of the Authority should prevail over the Local
Government Code of 1991.

Considering the reasons behind the establishment of the Authority, which are environmental
protection, navigational safety, and sustainable development, there is every indication that the
legislative intent is for the Authority to proceed with its mission.
We are on all fours with the manifestation of petitioner Laguna Lake Development Authority that
"Laguna de Bay, like any other single body of water has its own unique natural ecosystem. The
900 km lake surface water, the eight (8) major river tributaries and several other smaller rivers
that drain into the lake, the 2,920 km basin or watershed transcending the boundaries of
Laguna and Rizal provinces, greater portion of Metro Manila, parts of Cavite, Batangas, and
Quezon provinces, constitute one integrated delicate natural ecosystem that needs to be
protected with uniform set of policies; if we are to be serious in our aims of attaining sustainable
development. This is an exhaustible natural resource a very limited one which requires
judicious management and optimal utilization to ensure renewability and preserve its ecological
integrity and balance."
"Managing the lake resources would mean the implementation of a national policy geared
towards the protection, conservation, balanced growth and sustainable development of the
region with due regard to the inter-generational use of its resources by the inhabitants in this
part of the earth. The authors of Republic Act 4850 have foreseen this need when they passed
this LLDA law the special law designed to govern the management of our Laguna de Bay lake
resources."
"Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies
where lakeshore local government units exercise exclusive dominion over specific portions of
the lake water. The garbage thrown or sewage discharged into the lake, abstraction of water
therefrom or construction of fishpens by enclosing its certain area, affect not only that specific
portion but the entire 900 km of lake water. The implementation of a cohesive and integrated
lake water resource management policy, therefore, is necessary to conserve, protect and
sustainably develop Laguna de Bay." 5
The power of the local government units to issue fishing privileges was clearly granted for
revenue purposes. This is evident from the fact that Section 149 of the New Local Government
Code empowering local governments to issue fishing permits is embodied in Chapter 2, Book II,
of Republic Act No. 7160 under the heading, "Specific Provisions On The Taxing And Other
Revenue Raising Power Of Local Government Units."
On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other
aqua-culture structures is for the purpose of effectively regulating and monitoring activities in the
Laguna de Bay region (Section 2, Executive Order No. 927) and for lake quality control and
management. 6 It does partake of the nature of police power which is the most pervasive, the
least limitable and the most demanding of all State powers including the power of taxation.
Accordingly, the charter of the Authority which embodies a valid exercise of police power should
prevail over the Local Government Code of 1991 on matters affecting Laguna de Bay.
There should be no quarrel over permit fees for fishpens, fishcages and other aqua-culture
structures in the Laguna de Bay area. Section 3 of Executive Order No. 927 provides for the
proper sharing of fees collected.
In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our
holding that, considering the provisions of Section 4 of Republic Act No. 4850 and Section 4 of
Executive Order No. 927, series of 1983, and the ruling of this Court in Laguna Lake
Development Authority vs. Court of Appeals, 231 SCRA 304, 306, which we quote:
xxx xxx xxx

As a general rule, the adjudication of pollution cases generally pertains to

the Pollution Adjudication Board (PAB), except in cases where the special
law provides for another forum. It must be recognized in this regard that the
LLDA, as a specialized administrative agency, is specifically mandated
under Republic Act No. 4850 and its amendatory laws to carry out and make
effective the declared national policy of promoting and accelerating the
development and balanced growth of the Laguna Lake area and the
surrounding provinces of Rizal and Laguna and the cities of San Pablo,
Manila, Pasay, Quezon and Caloocan with due regard and adequate
provisions for environmental management and control, preservation of the
quality of human life and ecological systems, and the prevention of undue
ecological disturbances, deterioration and pollution. Under such a broad
grant of power and authority, the LLDA, by virtue of its special charter,
obviously has the responsibility to protect the inhabitants of the Laguna
Lake region from the deleterious effects of pollutants emanating from the
discharge of wastes from the surrounding areas. In carrying out the
aforementioned declared policy, the LLDA is mandated, among others, to
pass upon and approve or disapprove all plans, programs, and projects
proposed by local government offices/agencies within the region, public
corporations, and private persons or enterprises where such plans,
programs and/or projects are related to those of the LLDA for the
development of the region.
xxx xxx xxx
. . . . While it is a fundamental rule that an administrative agency has only
such powers as are expressly granted to it by law, it is likewise a settled rule
that an administrative agency has also such powers as are necessarily
implied in the exercise of its express powers. In the exercise, therefore, of
its express powers under its charter, as a regulatory and quasi-judicial body
with respect to pollution cases in the Laguna Lake region, the authority of
the LLDA to issue a "cease and desist order" is, perforce, implied.
Otherwise, it may well be reduced to a "toothless" paper agency.
there is no question that the Authority has express powers as a regulatory and quasijudicial body in respect to pollution cases with authority to issue a "cease and desist
order" and on matters affecting the construction of illegal fishpens, fishcages and
other aqua-culture structures in Laguna de Bay. The Authority's pretense, however,
that it is co-equal to the Regional Trial Courts such that all actions against it may only
be instituted before the Court of Appeals cannot be sustained. On actions
necessitating the resolution of legal questions affecting the powers of the Authority as
provided for in its charter, the Regional Trial Courts have jurisdiction.
In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160, otherwise
known as the Local Government Code of 1991, has not repealed the provisions of the charter of
the Laguna Lake Development Authority, Republic Act No. 4850, as amended. Thus, the
Authority has the exclusive jurisdiction to issue permits for the enjoyment of fishery privileges in
Laguna de Bay to the exclusion of municipalities situated therein and the authority to exercise
such powers as are by its charter vested on it.
Removal from the Authority of the aforesaid licensing authority will render nugatory its avowed
purpose of protecting and developing the Laguna Lake Region. Otherwise stated, the abrogation
of this power would render useless its reason for being and will in effect denigrate, if not abolish,
the Laguna Lake Development Authority. This, the Local Government Code of 1991 had never
intended to do.

WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby granted, insofar
as they relate to the authority of the Laguna Lake Development Authority to grant fishing
privileges within the Laguna Lake Region.

also enable small towns and municipalities in the lake area, like Jala-Jala, to rise to some level
of economic viability.
Separate Opinions

The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC, Branch
78, Morong, Rizal; Judge Herculano Tech, RTC, Branch 70, Binangonan, Rizal; and Judge
Aurelio Trampe, RTC, Branch 163, Pasig, Metro Manila, are hereby declared null and void and
ordered set aside for having been issued with grave abuse of discretion.
The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing permits to
construct and operate fishpens, fishcages and other aqua-culture structures within the Laguna
Lake Region, their previous issuances being declared null and void. Thus, the fishing permits
issued by Mayors Isidro B. Pacis, Municipality of Binangonan; Ricardo D. Papa, Municipality of
Taguig; and Walfredo M. de la Vega, Municipality of Jala-jala, specifically, are likewise declared
null and void and ordered cancelled.
The fishpens, fishcages and other aqua-culture structures put up by operators by virtue of
permits issued by Municipal Mayors within the Laguna Lake Region, specifically, permits issued
to Fleet Development, Inc. and Carlito Arroyo; Manila Marine Life Business Resources, Inc.,
represented by, Mr. Tobias Reynald M. Tiangco; Greenfield Ventures Industrial Development
Corporation and R.J. Orion Development Corporation; IRMA Fishing And Trading Corporation,
ARTM Fishing Corporation, BDR Corporation, Mirt Corporation and Trim Corporation; Blue
Lagoon Fishing Corporation and ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc.,
represented by its President Alfonso Puyat; SEA MAR Trading Co., Inc., Eastern Lagoon Fishing
Corporation, and MINAMAR Fishing Corporation, are hereby declared illegal structures subject
to demolition by the Laguna Lake Development Authority.
SO ORDERED.
Davide, Jr., Bellosillo and Kapunan, JJ., concur.

PADILLA, J., concurring:

I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to
stress what the decision already states, i.e., that the local government units in the Laguna Lake
area are not precluded from imposing permits on fishery operations for revenue raising purposes
of such local government units. In other words, while the exclusive jurisdiction to determine
whether or not projects or activities in the lake area should be allowed, as well as their
regulation, is with the Laguna Lake Development Authority, once the Authority grants a permit,
the permittee may still be subjected to an additional local permit or license for revenue purposes
of the local government units concerned. This approach would clearly harmonize the special law,
Rep. Act No. 4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will
also enable small towns and municipalities in the lake area, like Jala-Jala, to rise to some level
of economic viability.

EN BANC
[G.R. No. 194239 : May 31, 2011]
WEST TOWER CONDOMINIUM CORPORATION, ON BEHALF OF THE RESIDENTS OF
WEST TOWER CONDO., AND IN REPRESENTATION OF BARANGAY BANGKAL, AND
OTHERS, INCLUDING MINORS AND GENERATIONS YET UNBORN V. FIRST PHILIPPINE
INDUSTRIAL CORPORATION, FIRST GEN CORPORATION AND THEIR RESPECTIVE
BOARD OF DIRECTORS AND OFFICERS, JOHN DOES AND RICHARD ROES
Sirs/Mesdames:
Please take notice that the Court en banc issued a Resolution dated May 31, 2011 which reads
as follows:

Separate Opinions

"G.R. No. 194239 (West Tower Condominium Corporation, on behalf of the Residents of West
Tower Condo., and in representation of Barangay Bangkal, and others, including minors and
generations yet unborn v. First Philippine Industrial Corporation, First Gen Corporation and their
respective Board of Directors and Officers, John Does and Richard Roes)
RESOLUTION

PADILLA, J., concurring:

I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to
stress what the decision already states, i.e., that the local government units in the Laguna Lake
area are not precluded from imposing permits on fishery operations for revenue raising purposes
of such local government units. In other words, while the exclusive jurisdiction to determine
whether or not projects or activities in the lake area should be allowed, as well as their
regulation, is with the Laguna Lake Development Authority, once the Authority grants a permit,
the permittee may still be subjected to an additional local permit or license for revenue purposes
of the local government units concerned. This approach would clearly harmonize the special law,
Rep. Act No. 4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will

I
On November 15, 2010, petitioners filed their Petition for Issuance of a Writ of Kalikasan.[1]
On November 19, 2010, Chief Justice Renato C. Corona issued a Writ of Kalikasan[2] with a
Temporary Environmental Protection Order (TEPO), requiring the First Philippine Industrial
Corporation (FPIC) and First Gen Corporation (FGC) to make a Verified Return within a nonextendible period of ten (10) days from receipt thereof pursuant to Section 8, Rule 7 of the Rules
of Procedure for Environmental Cases. The TEPO enjoined FPIC and FGC to: (a) cease and
desist from operating the pipeline until further orders; (b) check the structural integrity of
The whole span of the 117-kilometer pipeline while implementing sufficient measures to

prevent and avert any untoward incidents that may result from any leak of the pipeline; and (c)
make a Report thereon within 60 days from receipt thereof.
Consequent to the Court's issuance of the Writ of Kalikasan and the accompanying TEPO, FPIC
ceased operations on both (a) the White Oil Pipeline System (WOPL System), which extends
117 kilometers from Batangas to Pandacan Terminal in Manila and transports diesel, gasoline,
jet fuel and kerosene; and (b) the Black Oil Pipeline System (BOPL System), which extends
105 kilometers and transports bunker fuel from Batangas to a depot in Sucat, Paraaque City.
Through a letter dated May 9, 2011, Department of Energy (DOE) Undersecretary Atty. Jose M.
Layug, Jr. seeks clarification and confirmation on the coverage of the Writ of Kalikasan and the
accompanying TEPO, i.e., whether they cover both the WOPL and the BOPL.
It is apparent from the Petition for Issuance of a Writ of Kalikasan that what petitioners sought to
stop operating is the WOPL, where the leak was found, affecting the vicinity of West Tower
Condominium. Only the WOPL is covered by the Writ of Kalikasan and the TEPO.

The Court further Resolved to

(a) NOTE the Manifestation with Motion dated April 14, 2011 filed by counsel for petitioners,
relative to the resolution of March 29, 2011;
(b) NOTE the Letter (Report) dated April 21, 2011 of Dr. Carlo A. Arcilla, Director, National
Institute of Geological Sciences, College of Science University of the Philippines, Diliman,
Quezon City, in compliance with the resolution of March 29, 2011; and
(c) NOTE the Letter dated May 24, 2011 of Atty. Justin Christopher C. Mendoza of Poblador
Bautista & Reyes Law Offices, counsel for First Philippine Industrial Corporation,
and GRANT his request for a copy of Dr. Carlo Arcilla's April 21, 2011 Report filed in compliance
with the resolution of March 29, 2011."
Carpio, Abad and Villarama, JJ., no part.
Nachura, J., on leave and no part.
Del Castillo, J., on official leave.

WHEREFORE, the Court hereby clarifies and confirms that what is covered by the November
19, 2010 Writ of Kalikasan and TEPO is only the WOPL System of respondent FPIC.
Consequently, the FPIC can resume operation of its BOPL System.

Very truly yours,

(Sgd.) ENRIQUETA E. VIDAL
Clerk of Court

II
On March 29, 2011, the Court issued a Resolution setting the conduct of an ocular inspection on
April 15, 2011 of the While Oil Pipeline System (WOPL System).
EN BANC

On April 15, 2011, the ocular inspection in the vicinity and basement of West Tower
Condominium was conducted in the presence of counsels of the parties, officers of respondent
First Philippine Industrial Corporation (FP1C), and residents of petitioner West Tower
Condominium, among others.
As required by the Court, representatives of the University of the Philippines-National Institute of
Geological Sciences (UP-NIGS) and the UP Institute of Civil Engineering attended the ocular
inspection. After the ocular inspection, the Court asked the representatives of UP-N1GS and the
UP Institute of Civil Engineering for their opinions and recommendations through a report,
among others, on (1) the issue of whether to grant FPIC's urgent motion to temporarily lift the
Temporary Environmental Protection Order for a period of not more than 48 hours in order to
conduct pressure controlled leak tests to check the structural integrity of the WOPL which entails
running a scraper pig to eliminate air gaps within the pipeline prior to the conduct of said test, as
recommended by the international technical consultant of the Department of Energy; and (2)
testing procedures that may be used by the FPIC regarding the maintenance and checking of
the structural integrity of the WOPL.
On May 10, 2011, the UP Institute of Civil Engineering sent a letter to the Court asking pertinent
documents from FPIC relative to testing protocols undertaken by FPIC and other proposals, and
that it be given one week within which to file its report after receipt of the documents.
WHEREFORE, finding the request of the UP Institute of Civil Engineering to be meritorious,
FPIC is hereby DIRECTED to submit documents regarding testing protocols it has undertaken
to check for leaks and the structural integrity of the WOPL, the results thereof and other related
proposals it has committed to undertake to the UP Institute of: Civil Engineering within five (5)
days from notice. The UP Institute of Civil Engineering is granted one (1) week from receipt of
the requested documents from FPIC within which to file its report.

[G.R. No. 195482 : June 21, 2011]

ELIZA M. HERNANDEZ, ET AL. V. PLACER DOME, INC.
Sirs/Mesdames:
Please take notice that the Court en banc issued a Resolution dated JUNE 21, 2011, which
reads as follows:
"G.R. No. 195482 (ELIZA M. HERNANDEZ, ET AL. v. PLACER DOME, INC.)
RESOLUTION
In the Resolution dated 8 March 2011, the Court granted petitioners' prayer for the issuance of
a Writ of Kalikasan and for the service of said writ as well as the summons issued in the case,
by their counsel and representative, Civic Action Group Ltd./APS International, Ltd. In the same
resolution, the Court likewise ordered respondents Placer Dome, Inc. (PDI) and Barrick Gold
Corporation (BGC) to make a verified return of the same writ and referred the case to the Court
of Appeals (CA) for hearing, reception of evidence and rendition of judgment. On 29 March 2011,
the Court additionally issued a resolution granting petitioners' motion for the inclusion of AI Legal
Service & Training Ltd. andSelect Document Services among those authorized to serve
summons on respondents, on the ground that Civic Action Group Ltd./APS International,
Ltd. had limited their services to the United States of America.

Subsequent to its filing of a 29 March 2011 Urgent Motion to Suspend Filing of Return, BGC filed
a 31 March 2011 Urgent Motion for Ruling on Jurisdiction, questioning the constitutionality of
Rule 7 of theRules of Procedure for Environmental Cases (AMC No. 09-6-8-SC) as well as the
validity of the issuance and service of summons in the case. On 4 April 2011, BGC also filed
a Return Ad Cautelam, accompanied by a Manifestation dated 4 April 2011, undertaking to
submit within a reasonable time the authenticated copies of the sworn statements attached to
said Return in view of time constraints. On 12 April 2011, the Court issued a Resolution noting
the foregoing motions and incidents and requiring petitioners to file their comment to
BGC's Urgent Motion for Ruling on Jurisdiction.

1) In order to attain a judicious determination of the Urgent Motion for Ruling on Jurisdiction, the
petitioners are DIRECTED to submit their COMMENT within ten (10) days from receipt
hereof. Perforce, Our resolution on petitioners' Motion for Production and Inspection of
Documents is held in abeyance;
2) Petitioners are ORDERED to manifest whether or not respondent Placer Dome has been
served with Summons and if none had been served yet, to coordinate with the DTI, through
the OSG, for the implementation thereof.
SO ORDERED."

On 12 April 2011, petitioners also filed an Urgent Motion of even date, seeking leave to serve
summons upon respondents through any of in the means provided under Section 12, Rule 14 of
theRules of Court. As amended by A.M. No. 11-3-6-SC which was issued on 15 March 2011,
said provision allows service of summons through any of the following means to a foreign private
juridical entity not registered in the Philippines or without a resident agent, viz.: (a) by personal
service coursed through the appropriate court in the foreign country with the assistance of the
Department of Foreign Affairs; (b) by publication once in a newspaper of general circulation in
the country where the defendant may be found and by serving a copy of the summons and the
court order by registered mail at the last known address of the defendant; (c) by facsimile or any
recognized electronic means that could generate proof of service; and, (d) by such other means
as the court may in its discretion direct.
On 18 April 2011, petitioners filed a Manifestation and Compliance dated 15 April 2011,
submitting the affidavit executed by Brian Nolan of the Civic Action Group Ltd./APS
International, Ltd. attesting to the 25 March 2011 service of summons on BGC. Without prejudice
to the Urgent Motion for Ruling on Jurisdiction it earlier filed, BGC in turn filed
a Submission dated 19 April 2011, proffering the original authenticated copies of the affidavits
executed by Debra Bilous and James Donald Robertson and reiterating its commitment to
submit within a reasonable time the authenticated copies of the other affidavits attached to
its Return Ad Cautelam. On 6 May 2011, Sycip Salazar Hernandez and Gatmaitan, BGC's
counsel of record, filed a Manifestation dated 5 May 2011 stating, among other matters, that
they have been served with copies of petitioners' Notice of Deposition, Interrogatories and
Motion for Production of Inspection of Documents (Discovery Papers) intended for their client, in
connection with the proceedings pending before the CA as CA-G.R. SP No. 00001; that being
for the limited purpose of raising constitutional and jurisdictional issues, their special appearance
is not of such nature as would authorize them to receive said Discovery Papers for and in behalf
of BCG.
On 12 May 2011, petitioners filed their Manifestation with Reiterated Motion dated 11 May 2011,
alleging that they have received a copy of the 3 May 2011 Manifestation and Motion filed before
the CA by the Office of the Solicitor General (OSG) on behalf of the Department of Trade and
Industry (DTI), praying that petitioners be directed to manifest whether they have already caused
the service of summons upon PDI and, if not, to coordinate with the OSG with respect to the
mode of service as well as the manner of payment thereof; that although it had been served with
copies of their petition and its annexes by registered mail, PDI has yet to be served with
summons; and, that while they are willing to coordinate with the OSG regarding the mode and
manner of payment for the service of summons to PDI, the Court has yet to resolve their
motions for the inclusion of AI Legal Service & Training Ltd. and Select Document
Services among those authorized to serve summons on respondents and for the service of
summons in accordance with Section 12, Rule 15 of the Rules of Court, as amended.
On 17 May 2011, BGC filed a Clarificatory Manifestation dated 16 May 2011, alleging that it
received the Resolution dated 4 May 2011 issued by the CA's First Division in CA-G.R. SP No.
00001, the decretal portion of which states:
"ACTING on the pending incidents, We hereby resolve as follows:

BGC calls the attention of the Court to the fact, among other matters, that the foregoing
resolution is in conflict with our resolution dated 12 April 2011 which required petitioners to file
their comment to itsUrgent Motion for Ruling on Jurisdiction; and, that consequently, there is a
need to clarify which court exercises jurisdiction over the case in order to shed light to the
procedural paths available to the parties. Subsequent to its filing of a Submission dated 18 May
2011 submitting the original of the authenticated affidavit of Geoffrey Marlow, BGC filed
a Manifestation dated 6 June 2011 reiterating the need for said clarification, in view of
petitioners' filing on 2 June 2011 of their Opposition to its Urgent Motion for Ruling on
Jurisdiction.
Pursuant to Section 3, Rule VII of the Rules of Procedure for Environmental Cases, petitions for
theWrit of Kalikasan "shall be filed with the Supreme Court or with any of the stations of the
Court of Appeals." It was in consonance with this provision that, on 8 March 2011, the Court
issued the Resolution which, after granting the Writ of Kalikasan sought by petitioners, referred
the case to the CA for hearing, reception of evidence and rendition of judgment. Considering
said referral of the case to the CA, its re-docketing of the petition as CA-G.R. SP No. 00001 and
its conduct of proceedings relative thereto, it is imperative that the various motions and incidents
filed by the parties, together with the entire records of the case, be likewise referred to said
Court in observance of the doctrine of hierarchy of courts and in the interest of the orderly and
expeditious conduct of the proceedings in the case. With respect to petitioners' Manifestation
with Reiterated Motion dated 11 May 2011, attention is, however, called to the fact that the
motion for the inclusion of AI Legal Service & Training Ltd. andSelect Document Services among
those authorized to serve summons on respondents had already been granted in the Court's 29
March 2011 Resolution.
WHEREFORE, premises considered, the records of the case are REFERRED to the CA, for
appropriate action on the various motions and incidents filed by the parties."
Very truly yours,
(Sgd.) ENRIQUETA E. VIDAL
Clerk of Court

EN BANC
METROPOLITAN MANILA
G.R. Nos. 171947-48
DEVELOPMENT AUTHORITY,
DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES,
Present:
DEPARTMENT OF EDUCATION,

CULTURE AND SPORTS,[1]

PUNO, C.J.,
DEPARTMENT OF HEALTH,
QUISUMBING,
DEPARTMENT OF AGRICULTURE, YNARES-SANTIAGO,
DEPARTMENT OF PUBLIC
CARPIO,
WORKS AND HIGHWAYS,
AUSTRIA-MARTINEZ,
DEPARTMENT OF BUDGET AND CORONA,
MANAGEMENT, PHILIPPINE
CARPIO MORALES,
COAST GUARD, PHILIPPINE
AZCUNA,
NATIONAL POLICE MARITIME
TINGA,
GROUP, and DEPARTMENT OF
CHICO-NAZARIO,
THE INTERIOR AND LOCAL
VELASCO, JR.,
GOVERNMENT,
NACHURA,
Petitioners,
REYES,
LEONARDO-DE CASTRO, and
- versus BRION, JJ.
CONCERNED RESIDENTS OF
MANILA BAY, represented and
joined by DIVINA V. ILAS,
SABINIANO ALBARRACIN,
MANUEL SANTOS, JR., DINAH
DELA PEA, PAUL DENNIS
QUINTERO, MA. VICTORIA
LLENOS, DONNA CALOZA,
FATIMA QUITAIN, VENICE
SEGARRA, FRITZIE TANGKIA,
SARAH JOELLE LINTAG,
HANNIBAL AUGUSTUS BOBIS,
FELIMON SANTIAGUEL, and
Promulgated:
JAIME AGUSTIN R. OPOSA,
Respondents.
December 18, 2008
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:

The need to address environmental pollution, as a cause of climate change, has of

late gained the attention of the international community. Media have finally trained their sights
on the ill effects of pollution, the destruction of forests and other critical habitats, oil spills, and

instance, our internal waters, rivers, shores, and seas polluted by human activities. To most of
these agencies and their official complement, the pollution menace does not seem to carry the
high national priority it deserves, if their track records are to be the norm. Their cavalier attitude
towards solving, if not mitigating, the environmental pollution problem, is a sad commentary on
bureaucratic efficiency and commitment.

At the core of the case is the Manila Bay, a place with a proud historic past, once
brimming with marine life and, for so many decades in the past, a spot for different contact
recreation activities, but now a dirty and slowly dying expanse mainly because of the abject
official indifference of people and institutions that could have otherwise made a difference.

This case started when, on January 29, 1999, respondents Concerned Residents of
Manila Bay filed a complaint before the Regional Trial Court (RTC) in Imus, Cavite against
several government agencies, among them the petitioners, for the cleanup, rehabilitation, and
protection of the Manila Bay. Raffled to Branch 20 and docketed as Civil Case No. 1851-99 of
the RTC, the complaint alleged that the water quality of the Manila Bay had fallen way below the
allowable standards set by law, specifically Presidential Decree No. (PD) 1152 or the Philippine
Environment Code. This environmental aberration, the complaint stated, stemmed from:
x x x [The] reckless, wholesale, accumulated and ongoing acts of
omission or commission [of the defendants] resulting in the clear and
present danger to public health and in the depletion and contamination of
the marine life of Manila Bay, [for which reason] ALL defendants must be
held jointly and/or solidarily liable and be collectively ordered to clean up
Manila Bay and to restore its water quality to class B waters fit for
swimming, skin-diving, and other forms of contact recreation.[3]

the unabated improper disposal of garbage. And rightly so, for the magnitude of environmental
destruction is now on a scale few ever foresaw and the wound no longer simply heals by itself.
[2]

But amidst hard evidence and clear signs of a climate crisis that need bold action, the voice of

cynicism, naysayers, and procrastinators can still be heard.

This case turns on government agencies and their officers who, by the nature of their
respective offices or by direct statutory command, are tasked to protect and preserve, at the first

In their individual causes of action, respondents alleged that the continued neglect of
petitioners in abating the pollution of the Manila Bay constitutes a violation of, among others:
(1)
(2)
(3)
(4)
(5)
(6)

Respondents constitutional right to life, health, and a balanced ecology;

The Environment Code (PD 1152);
The Pollution Control Law (PD 984);
The Water Code (PD 1067);
The Sanitation Code (PD 856);
The Illegal Disposal of Wastes Decree (PD 825);

(7)
(8)
(9)
(10)
(11)
(12)

The Marine Pollution Law (PD 979);

Executive Order No. 192;
The Toxic and Hazardous Wastes Law (Republic Act No. 6969);
Civil Code provisions on nuisance and human relations;
The Trust Doctrine and the Principle of Guardianship; and
International Law

Inter alia, respondents, as plaintiffs a quo, prayed that petitioners be ordered to clean
the Manila Bay and submit to the RTC a concerted concrete plan of action for the purpose.

The trial of the case started off with a hearing at the Manila Yacht Club followed by an
ocular inspection of the Manila Bay. Renato T. Cruz, the Chief of the Water Quality Management
Section, Environmental Management Bureau, Department of Environment and Natural
Resources (DENR), testifying for petitioners, stated that water samples collected from different
beaches around the Manila Bay showed that the amount of fecal coliform content ranged from
50,000 to 80,000 most probable number (MPN)/ml when what DENR Administrative Order No.
34-90 prescribed as a safe level for bathing and other forms of contact recreational activities, or
the SB level, is one not exceeding 200 MPN/100 ml.

[4]

Rebecca de Vera, for Metropolitan Waterworks and Sewerage System (MWSS) and in
behalf of other petitioners, testified about the MWSS efforts to reduce pollution along
the Manila Bay through the Manila Second Sewerage Project. For its part, the Philippine Ports
Authority (PPA) presented, as part of its evidence, its memorandum circulars on the study being
conducted on ship-generated waste treatment and disposal, and its Linis Dagat (Clean the
Ocean) project for the cleaning of wastes accumulated or washed to shore.
The RTC Ordered Petitioners to Clean Up and Rehabilitate Manila Bay

On September 13, 2002, the RTC rendered a Decision [5] in favor of respondents. The
dispositive portion reads:
WHEREFORE, finding merit in the complaint, judgment is hereby
rendered ordering the abovenamed defendant-government agencies, jointly
and solidarily, to clean up and rehabilitate Manila Bay and restore its waters
to SB classification to make it fit for swimming, skin-diving and other forms
of contact recreation. To attain this, defendant-agencies, with defendant

DENR as the lead agency, are directed, within six (6) months from receipt
hereof, to act and perform their respective duties by devising a
consolidated, coordinated and concerted scheme of action for the
rehabilitation and restoration of the bay.
In particular:
Defendant MWSS is directed to install, operate and maintain
adequate [sewerage] treatment facilities in strategic places under its
jurisdiction and increase their capacities.
Defendant LWUA, to see to it that the water districts under its wings,
provide, construct and operate sewage facilities for the proper disposal of
waste.
Defendant DENR, which is the lead agency in cleaning up Manila
Bay, to install, operate and maintain waste facilities to rid the bay of toxic
and hazardous substances.
Defendant PPA, to prevent and also to treat the discharge not only
of ship-generated wastes but also of other solid and liquid wastes from
docking vessels that contribute to the pollution of the bay.
Defendant MMDA, to establish, operate and maintain an adequate
and appropriate sanitary landfill and/or adequate solid waste and liquid
disposal as well as other alternative garbage disposal system such as reuse or recycling of wastes.
Defendant DA, through the Bureau of Fisheries and Aquatic
Resources, to revitalize the marine life in Manila Bay and restock its waters
with indigenous fish and other aquatic animals.
Defendant DBM, to provide and set aside an adequate budget solely
for the purpose of cleaning up and rehabilitation of Manila Bay.
Defendant DPWH, to remove and demolish structures and other
nuisances that obstruct the free flow of waters to the bay. These nuisances
discharge solid and liquid wastes which eventually end up in Manila Bay. As
the construction and engineering arm of the government, DPWH is ordered
to actively participate in removing debris, such as carcass of sunken
vessels, and other non-biodegradable garbage in the bay.
Defendant DOH, to closely supervise and monitor the operations of
septic and sludge companies and require them to have proper facilities for
the treatment and disposal of fecal sludge and sewage coming from septic
tanks.
Defendant DECS, to inculcate in the minds and hearts of the people
through education the importance of preserving and protecting the
environment.
Defendant Philippine Coast Guard and the PNP Maritime Group, to
protect at all costs the Manila Bay from all forms of illegal fishing.
No pronouncement as to damages and costs.
SO ORDERED.

The MWSS, Local Water Utilities Administration (LWUA), and PPA filed before the Court of
Appeals (CA) individual Notices of Appeal which were eventually consolidated and docketed as
CA-G.R. CV No. 76528.

On the other hand, the DENR, Department of Public Works and Highways (DPWH),

I
[SECTIONS] 17 AND 20 OF [PD] 1152 RELATE ONLY TO THE
CLEANING OF SPECIFIC POLLUTION INCIDENTS AND [DO] NOT
COVER CLEANING IN GENERAL
II
THE CLEANING OR REHABILITATION OF THE MANILA BAY IS
NOT A MINISTERIAL ACT OF PETITIONERS THAT CAN BE COMPELLED
BY MANDAMUS.

Metropolitan Manila Development Authority (MMDA), Philippine Coast Guard (PCG), Philippine
National Police (PNP) Maritime Group, and five other executive departments and agencies filed
directly with this Court a petition for review under Rule 45. The Court, in a Resolution
of December 9, 2002, sent the said petition to the CA for consolidation with the consolidated
appeals of MWSS, LWUA, and PPA, docketed as CA-G.R. SP No. 74944.

Petitioners, before the CA, were one in arguing in the main that the pertinent

The issues before us are two-fold. First, do Sections 17 and 20 of PD 1152 under the
headings, Upgrading of Water Quality and Clean-up Operations, envisage a cleanup in general
or are they limited only to the cleanup of specific pollution incidents? And second, can petitioners
be compelled by mandamus to clean up and rehabilitate the ManilaBay?

On August 12, 2008, the Court conducted and heard the parties on oral arguments.

provisions of the Environment Code (PD 1152) relate only to the cleaning of specific pollution
incidents and do not cover cleaning in general. And apart from raising concerns about the lack of

Our Ruling

funds appropriated for cleaning purposes, petitioners also asserted that the cleaning of
the Manila Bay is not a ministerial act which can be compelled by mandamus.

The CA Sustained the RTC

By a Decision[6] of September 28, 2005, the CA denied petitioners appeal and

affirmed the Decision of the RTC in toto, stressing that the trial courts decision did not require
petitioners to do tasks outside of their usual basic functions under existing laws. [7]

We shall first dwell on the propriety of the issuance of mandamus under the premises.
The Cleaning or Rehabilitation of Manila Bay
Can be Compelled by Mandamus

Generally, the writ of mandamus lies to require the execution of a ministerial duty. [8] A
ministerial duty is one that requires neither the exercise of official discretion nor judgment. [9] It
connotes an act in which nothing is left to the discretion of the person executing it. It is a simple,
definite duty arising under conditions admitted or proved to exist and imposed by

Petitioners are now before this Court praying for the allowance of their Rule 45 petition
on the following ground and supporting arguments:
THE [CA] DECIDED A QUESTION OF SUBSTANCE NOT
HERETOFORE PASSED UPON BY THE HONORABLE COURT, I.E., IT
AFFIRMED THE TRIAL COURTS DECISION DECLARING THAT
SECTION 20 OF [PD] 1152 REQUIRES CONCERNED GOVERNMENT
AGENCIES TO REMOVE ALL POLLUTANTS SPILLED AND
DISCHARGED IN THE WATER SUCH AS FECAL COLIFORMS.
ARGUMENTS

law.[10] Mandamus is available to compel action, when refused, on matters involving discretion,
but not to direct the exercise of judgment or discretion one way or the other.

Petitioners maintain that the MMDAs duty to take measures and maintain adequate
solid waste and liquid disposal systems necessarily involves policy evaluation and the exercise
of judgment on the part of the agency concerned. They argue that the MMDA, in carrying out its

mandate, has to make decisions, including choosing where a landfill should be located by

implementation of other alternative programs intended to reduce, reuse and

recycle solid waste. (Emphasis added.)

undertaking feasibility studies and cost estimates, all of which entail the exercise of discretion.
The MMDA is duty-bound to comply with Sec. 41 of the Ecological Solid Waste
Respondents, on the other hand, counter that the statutory command is clear and that

Management Act (RA 9003) which prescribes the minimum criteria for the establishment of

petitioners duty to comply with and act according to the clear mandate of the law does not

sanitary landfills and Sec. 42 which provides the minimum operating requirements that each site

require the exercise of discretion. According to respondents, petitioners, the MMDA in particular,

operator shall maintain in the operation of a sanitary landfill. Complementing Sec. 41 are Secs.

are without discretion, for example, to choose which bodies of water they are to clean up, or

36 and 37 of RA 9003,[12] enjoining the MMDA and local government units, among others, after

which discharge or spill they are to contain. By the same token, respondents maintain that

the effectivity of the law on February 15, 2001, from using and operating open dumps for solid

petitioners are bereft of discretion on whether or not to alleviate the problem of solid and liquid

waste and disallowing, five years after such effectivity, the use of controlled dumps.

waste disposal; in other words, it is the MMDAs ministerial duty to attend to such services.
The MMDAs duty in the area of solid waste disposal, as may be noted, is set forth not
We agree with respondents.

only in the Environment Code (PD 1152) and RA 9003, but in its charter as well. This duty of
putting up a proper waste disposal system cannot be characterized as discretionary, for, as

First off, we wish to state that petitioners obligation to perform their duties as defined

earlier stated, discretion presupposes the power or right given by law to public functionaries to

by law, on one hand, and how they are to carry out such duties, on the other, are two different

act officially according to their judgment or conscience. [13] A discretionary duty is one that

concepts. While the implementation of the MMDAs mandated tasks may entail a decision-

allows a person to exercise judgment and choose to perform or not to perform. [14] Any

making process, the enforcement of the law or the very act of doing what the law exacts to be

suggestion that the MMDA has the option whether or not to perform its solid waste disposal-

done is ministerial in nature and may be compelled by mandamus. We said so in Social Justice

related duties ought to be dismissed for want of legal basis.

Society v. Atienza[11] in which the Court directed the City ofManila to enforce, as a matter of
ministerial duty, its Ordinance No. 8027 directing the three big local oil players to cease and

A perusal of other petitioners respective charters or like enabling statutes and pertinent

desist from operating their business in the so-called Pandacan Terminals within six months

laws would yield this conclusion: these government agencies are enjoined, as a matter of

from the effectivity of the ordinance. But to illustrate with respect to the instant case, the MMDAs

statutory obligation, to perform certain functions relating directly or indirectly to the cleanup,

duty to put up an adequate and appropriate sanitary landfill and solid waste and liquid disposal

rehabilitation, protection, and preservation of the Manila Bay. They are precluded from choosing

as well as other alternative garbage disposal systems is ministerial, its duty being a statutory

not to perform these duties. Consider:

imposition. The MMDAs duty in this regard is spelled out in Sec. 3(c) of Republic Act No. (RA)
7924 creating the MMDA. This section defines and delineates the scope of the MMDAs waste
disposal services to include:
Solid waste disposal and management which include formulation
and implementation of policies, standards, programs and projects for proper
and sanitary waste disposal. It shall likewise include theestablishment and
operation of sanitary land fill and related facilities and the

(1) The DENR, under Executive Order No. (EO) 192, [15] is the primary agency responsible
for the conservation, management, development, and proper use of the countrys environment
and natural resources. Sec. 19 of the Philippine Clean Water Act of 2004 (RA 9275), on the
other hand, designates the DENR as the primary government agency responsible for its

enforcement and implementation, more particularly over all aspects of water quality

comprehensive action plan with estimated budget and time frame, denominated asOperation

management. On water pollution, the DENR, under the Acts Sec. 19(k), exercises jurisdiction

Plan for the Manila Bay Coastal Strategy, for the rehabilitation, restoration, and rehabilitation of

over all aspects of water pollution, determine[s] its location, magnitude, extent, severity, causes

the Manila Bay.

and effects and other pertinent information on pollution, and [takes] measures, using available
methods and technologies, to prevent and abate such pollution.
The DENR, under RA 9275, is also tasked to prepare a National Water Quality Status
Report, an Integrated Water Quality Management Framework, and a 10-year Water Quality

The completion of the said action plan and even the implementation of some of its
phases should more than ever prod the concerned agencies to fast track what are assigned
them under existing laws.

Management Area Action Plan which is nationwide in scope covering the Manila Bay and
adjoining areas. Sec. 19 of RA 9275 provides:

(2) The MWSS, under Sec. 3 of RA 6234,[18] is vested with jurisdiction, supervision,
and control over all waterworks and sewerage systems in the territory comprising what is now

Sec. 19 Lead Agency.The [DENR] shall be the primary

government agency responsible for the implementation and enforcement of
this Act x x x unless otherwise provided herein. As such, it shall have the
following functions, powers and responsibilities:
a)

Prepare a National Water Quality Status report within twenty-four (24)

months from the effectivity of this Act: Provided, That the Department
shall thereafter review or revise and publish annually, or as the need
arises, said report;

b)

Prepare an Integrated Water Quality Management Framework within

twelve (12) months following the completion of the status report;

c)

Prepare a ten (10) year Water Quality Management Area Action Plan
within 12 months following the completion of the framework for each
designated water management area. Such action plan shall be
reviewed by the water quality management area governing board
every five (5) years or as need arises.

the cities of Metro Manila and several towns of the provinces of Rizal and Cavite, and charged
with the duty:
(g)
To construct, maintain, and operate such sanitary sewerages
as may be necessary for the proper sanitation and other uses of the cities
and towns comprising the System; x x x

(3) The LWUA under PD 198 has the power of supervision and control over local water
districts. It can prescribe the minimum standards and regulations for the operations of these
districts and shall monitor and evaluate local water standards. The LWUA can direct these
districts to construct, operate, and furnish facilities and services for the collection, treatment, and
disposal of sewerage, waste, and storm water. Additionally, under RA 9275, the LWUA, as
attached agency of the DPWH, is tasked with providing sewerage and sanitation facilities,

The DENR has prepared the status report for the period 2001 to 2005 and is in the
process of completing the preparation of the Integrated Water Quality Management Framework.
[16]

Within twelve (12) months thereafter, it has to submit a final Water Quality Management Area

Action Plan.[17] Again, like the MMDA, the DENR should be made to accomplish the tasks
assigned to it under RA 9275.

inclusive of the setting up of efficient and safe collection, treatment, and sewage disposal system
in the different parts of the country.[19] In relation to the instant petition, the LWUA is mandated to
provide sewerage and sanitation facilities in Laguna, Cavite, Bulacan, Pampanga, and Bataan to
prevent pollution in theManila Bay.
(4) The Department of Agriculture (DA), pursuant to the Administrative Code of 1987 (EO
292),[20] is designated as the agency tasked to promulgate and enforce all laws and issuances

Parenthetically, during the oral arguments, the DENR Secretary manifested that the
DENR, with the assistance of and in partnership with various government agencies and nongovernment organizations, has completed, as of December 2005, the final draft of a

respecting the conservation and proper utilization of agricultural and fishery resources.
Furthermore, the DA, under the Philippine Fisheries Code of 1998 (RA 8550), is, in coordination
with local government units (LGUs) and other concerned sectors, in charge of establishing a

monitoring, control, and surveillance system to ensure that fisheries and aquatic resources in
Philippine waters are judiciously utilized and managed on a sustainable basis.

[21]

Likewise under

upon consultation with the latter for the effective implementation and enforcement of PD 979. It
shall, under Sec. 4 of the law, apprehend violators who:

RA 9275, the DA is charged with coordinating with the PCG and DENR for the enforcement of
water quality standards in marine waters.

[22]

a. discharge, dump x x x harmful substances from or out of any ship, vessel,

barge, or any other floating craft, or other man-made structures at sea, by
any method, means or manner, into or upon the territorial and inland
navigable waters of the Philippines;

More specifically, its Bureau of Fisheries and

Aquatic Resources (BFAR) under Sec. 22(c) of RA 9275 shall primarily be responsible for the

b. throw, discharge or deposit, dump, or cause, suffer or procure to be

thrown, discharged, or deposited either from or out of any ship, barge, or
other floating craft or vessel of any kind, or from the shore, wharf,
manufacturing establishment, or mill of any kind, any refuse matter of any
kind or description whatever other than that flowing from streets and sewers
and passing therefrom in a liquid state into tributary of any navigable water
from which the same shall float or be washed into such navigable water;
and

prevention and control of water pollution for the development, management, and conservation of
the fisheries and aquatic resources.

(5) The DPWH, as the engineering and construction arm of the national government, is
tasked under EO 292[23] to provide integrated planning, design, and construction services for,

c. deposit x x x material of any kind in any place on the bank of any

navigable water or on the bank of any tributary of any navigable water,
where the same shall be liable to be washed into such navigable water,
either by ordinary or high tides, or by storms or floods, or otherwise,
whereby navigation shall or may be impeded or obstructed or increase the
level of pollution of such water.

among others, flood control and water resource development systems in accordance with
national development objectives and approved government plans and specifications.

In Metro Manila, however, the MMDA is authorized by Sec. 3(d), RA 7924 to perform
(7) When RA 6975 or the Department of the Interior and Local Government (DILG)

metro-wide services relating to flood control and sewerage management which include the
formulation and implementation of policies, standards, programs and projects for an integrated
flood control, drainage and sewerage system.

Act of 1990 was signed into law on December 13, 1990, the PNP Maritime Group was tasked to
perform all police functions over the Philippine territorial waters and rivers. Under Sec. 86, RA
6975, the police functions of the PCG shall be taken over by the PNP when the latter acquires

On July 9, 2002, a Memorandum of Agreement was entered into between the DPWH and
MMDA, whereby MMDA was made the agency primarily responsible for flood control in Metro
Manila. For the rest of the country, DPWH shall remain as the implementing agency for flood
control services. The mandate of the MMDA and DPWH on flood control and drainage services
shall include the removal of structures, constructions, and encroachments built along rivers,
waterways, and esteros (drainages) in violation of RA 7279, PD 1067, and other pertinent laws.

the capability to perform such functions. Since the PNP Maritime Group has not yet attained the
capability to assume and perform the police functions of PCG over marine pollution, the PCG
and PNP Maritime Group shall coordinate with regard to the enforcement of laws, rules, and
regulations governing marine pollution within the territorial waters of the Philippines. This was
made clear in Sec. 124, RA 8550 or the Philippine Fisheries Code of 1998, in which both the
PCG and PNP Maritime Group were authorized to enforce said law and other fishery laws, rules,
and regulations.[25]

(6) The PCG, in accordance with Sec. 5(p) of PD 601, or the Revised Coast Guard
(8) In accordance with Sec. 2 of EO 513, the PPA is mandated to establish, develop,

Law of 1974, and Sec. 6 of PD 979, [24] or the Marine Pollution Decree of 1976, shall have the
primary responsibility of enforcing laws, rules, and regulations governing marine pollution within
the territorial waters of the Philippines. It shall promulgate its own rules and regulations in
accordance with the national rules and policies set by the National Pollution Control Commission

regulate, manage and operate a rationalized national port system in support of trade and
national development.[26] Moreover, Sec. 6-c of EO 513 states that the PPA has police authority
within the

ports administered by it as may be necessary to carry out its powers and

functions and attain its purposes and objectives, without prejudice to the
exercise of the functions of the Bureau of Customs and other law
enforcement bodies within the area. Such police authority shall include the
following:
xxxx
b) To regulate the entry to, exit from, and movement within the port, of
persons and vehicles, as well as movement within the port of watercraft.[27]

Under Sec. 28 of the Urban Development and Housing Act of 1992 (RA 7279), eviction or
demolition may be allowed when persons or entities occupy danger areas such as esteros,
railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and other public places such
as sidewalks, roads, parks and playgrounds. The MMDA, as lead agency, in coordination with
the DPWH, LGUs, and concerned agencies, can dismantle and remove all structures,
constructions, and other encroachments built in breach of RA 7279 and other pertinent laws

Lastly, as a member of the International Marine Organization and a signatory to the

along the rivers, waterways, and esteros in Metro Manila. With respect to rivers, waterways,

International Convention for the Prevention of Pollution from Ships, as amended by MARPOL

and esteros in Bulacan, Bataan, Pampanga, Cavite, and Laguna that discharge wastewater

73/78,[28] the Philippines, through the PPA, must ensure the provision of adequate reception

directly or eventually into the Manila Bay, the DILG shall direct the concerned LGUs to

facilities at ports and terminals for the reception of sewage from the ships docking in Philippine

implement the demolition and removal of such structures, constructions, and other

ports. Thus, the PPA is tasked to adopt such measures as are necessary to prevent the

encroachments built in violation of RA 7279 and other applicable laws in coordination with the

discharge and dumping of solid and liquid wastes and other ship-generated wastes into

DPWH and concerned agencies.

the Manila Bay waters from vessels docked at ports and apprehend the violators. When the
vessels are not docked at ports but within Philippine territorial waters, it is the PCG and PNP
Maritime Group that have jurisdiction over said vessels.

(10) The Department of Health (DOH), under Article 76 of PD 1067 (the Water Code),
is tasked to promulgate rules and regulations for the establishment of waste disposal areas that
affect the source of a water supply or a reservoir for domestic or municipal use. And under Sec.

(9) The MMDA, as earlier indicated, is duty-bound to put up and maintain adequate

8 of RA 9275, the DOH, in coordination with the DENR, DPWH, and other concerned agencies,

sanitary landfill and solid waste and liquid disposal system as well as other alternative garbage

shall formulate guidelines and standards for the collection, treatment, and disposal of sewage

disposal systems. It is primarily responsible for the implementation and enforcement of the

and the establishment and operation of a centralized sewage treatment system. In areas not

provisions of RA 9003, which would necessary include its penal provisions, within its area of

considered as highly urbanized cities, septage or a mix sewerage-septage management system

jurisdiction.[29]

shall be employed.

Among the prohibited acts under Sec. 48, Chapter VI of RA 9003 that are frequently

In accordance with Sec. 72[30] of PD 856, the Code of Sanitation of the Philippines,

violated are dumping of waste matters in public places, such as roads, canals oresteros, open

and Sec. 5.1.1[31] of Chapter XVII of its implementing rules, the DOH is also ordered to ensure

burning of solid waste, squatting in open dumps and landfills, open dumping, burying of

the regulation and monitoring of the proper disposal of wastes by private sludge companies

biodegradable or non- biodegradable materials in flood-prone areas, establishment or operation

through the strict enforcement of the requirement to obtain an environmental sanitation

of open dumps as enjoined in RA 9003, and operation of waste management facilities without an

clearance of sludge collection treatment and disposal before these companies are issued their

environmental compliance certificate.

environmental sanitation permit.

(11) The Department of Education (DepEd), under the Philippine Environment Code

All told, the aforementioned enabling laws and issuances are in themselves clear,

(PD 1152), is mandated to integrate subjects on environmental education in its school curricula

categorical, and complete as to what are the obligations and mandate of each agency/petitioner

at all levels.[32] Under Sec. 118 of RA 8550, the DepEd, in collaboration with the DA,

under the law. We need not belabor the issue that their tasks include the cleanup of

Commission on Higher Education, and Philippine Information Agency, shall launch and pursue a

the Manila Bay.

nationwide educational campaign to promote the development, management, conservation, and

proper use of the environment. Under the Ecological Solid Waste Management Act (RA 9003),
on the other hand, it is directed to strengthen the integration of environmental concerns in school
curricula at all levels, with an emphasis on waste management principles.

Now, as to the crux of the petition. Do Secs. 17 and 20 of the Environment Code
encompass the cleanup of water pollution in general, not just specific pollution incidents?

[33]

Secs. 17 and 20 of the Environment Code

(12) The Department of Budget and Management (DBM) is tasked under Sec. 2, Title XVII

Include Cleaning in General

of the Administrative Code of 1987 to ensure the efficient and sound utilization of government
funds and revenues so as to effectively achieve the countrys development objectives.[34]

One of the countrys development objectives is enshrined in RA 9275 or the Philippine

Clean Water Act of 2004. This law stresses that the State shall pursue a policy of economic
growth in a manner consistent with the protection, preservation, and revival of the quality of our
fresh, brackish, and marine waters. It also provides that it is the policy of the government,
among others, to streamline processes and procedures in the prevention, control, and

The disputed sections are quoted as follows:

Section 17. Upgrading of Water Quality.Where the quality of water has
deteriorated to a degree where its state will adversely affect its best usage,
the government agencies concerned shall take such measures as may be
necessary to upgrade the quality of such water to meet the prescribed water
quality standards.
Section 20. Clean-up Operations.It shall be the responsibility of the
polluter to contain, remove and clean-up water pollution incidents at his own
expense. In case of his failure to do so, the government agencies
concerned shall undertake containment, removal and clean-up operations
and expenses incurred in said operations shall be charged against the
persons and/or entities responsible for such pollution.

abatement of pollution mechanisms for the protection of water resources; to promote

environmental strategies and use of appropriate economic instruments and of control

When the Clean Water Act (RA 9275) took effect, its Sec. 16 on the subject, Cleanup

mechanisms for the protection of water resources; to formulate a holistic national program of

Operations, amended the counterpart provision (Sec. 20) of the Environment Code (PD 1152).

water quality management that recognizes that issues related to this management cannot be

Sec. 17 of PD 1152 continues, however, to be operational.

separated from concerns about water sources and ecological protection, water supply, public
health, and quality of life; and to provide a comprehensive management program for water
pollution focusing on pollution prevention.

Thus, the DBM shall then endeavor to provide an adequate budget to attain the noble
objectives of RA 9275 in line with the countrys development objectives.

The amendatory Sec. 16 of RA 9275 reads:

SEC. 16. Cleanup Operations.Notwithstanding the provisions
of Sections 15 and 26 hereof, any person who causes pollution in or
pollutes water bodies in excess of the applicable and prevailing standards
shall be responsible to contain, remove and clean up any pollution incident
at his own expense to the extent that the same water bodies have been
rendered unfit for utilization and beneficial use: Provided, That in the event
emergency cleanup operations are necessary and the polluter fails to
immediately undertake the same, the [DENR] in coordination with other

government agencies concerned, shall undertake containment, removal and

cleanup operations. Expenses incurred in said operations shall be
reimbursed by the persons found to have caused such pollution under
proper administrative determination x x x. Reimbursements of the cost
incurred shall be made to the Water Quality Management Fund or to such
other funds where said disbursements were sourced.

As a counterpoint, respondents argue that petitioners erroneously read Sec. 62(g) as

delimiting the application of Sec. 20 to the containment, removal, and cleanup operations for
accidental spills only. Contrary to petitioners posture, respondents assert that Sec. 62(g), in fact,
even expanded the coverage of Sec. 20. Respondents explain that without its Sec. 62(g), PD

As may be noted, the amendment to Sec. 20 of the Environment Code is more apparent

1152 may have indeed covered only pollution accumulating from the day-to-day operations of

than real since the amendment, insofar as it is relevant to this case, merely consists in the

businesses around the Manila Bay and other sources of pollution that slowly accumulated in the

designation of the DENR as lead agency in the cleanup operations.

bay. Respondents, however, emphasize that Sec. 62(g), far from being a delimiting provision, in
fact even enlarged the operational scope of Sec. 20, by including accidental spills as among the

Petitioners contend at every turn that Secs. 17 and 20 of the Environment Code

water pollution incidents contemplated in Sec. 17 in relation to Sec. 20 of PD 1152.

concern themselves only with the matter of cleaning up in specific pollution incidents, as
opposed to cleanup in general. They aver that the twin provisions would have to be read

To respondents, petitioners parochial view on environmental issues, coupled with their

alongside the succeeding Sec. 62(g) and (h), which defines the terms cleanup operations and

narrow reading of their respective mandated roles, has contributed to the worsening water

accidental spills, as follows:

quality of the Manila Bay. Assuming, respondents assert, that petitioners are correct in saying

g.
Clean-up Operations [refer] to activities conducted in removing
the
pollutants discharged or spilled in water to restore it to prespill condition.

that the cleanup coverage of Sec. 20 of PD 1152 is constricted by the definition of the phrase

h.

As pointed out, the phrases cleanup operations and accidental spills do not appear in said

Accidental Spills [refer] to spills of oil or other hazardous

substances in water that result from accidents such as collisions
and groundings.

cleanup operations embodied in Sec. 62(g), Sec. 17 is not hobbled by such limiting definition.

Sec. 17, not even in the chapter where said section is found.

Petitioners proffer the argument that Secs. 17 and 20 of PD 1152 merely direct the

Respondents are correct. For one thing, said Sec. 17 does not in any way state that

government agencies concerned to undertake containment, removal, and cleaning operations of

the government agencies concerned ought to confine themselves to the containment, removal,

a specific polluted portion or portions of the body of water concerned. They maintain that the

and cleaning operations when a specific pollution incident occurs. On the contrary, Sec. 17

application of said Sec. 20 is limited only to water pollution incidents, which are situations that

requires them to act even in the absence of a specific pollution incident, as long as water quality

presuppose the occurrence of specific, isolated pollution events requiring the corresponding

has deteriorated to a degree where its state will adversely affect its best usage. This section, to

containment, removal, and cleaning operations. Pushing the point further, they argue that the

stress, commands concerned government agencies, when appropriate, to take such measures

aforequoted Sec. 62(g) requires cleanup operations to restore the body of water to pre-spill

as may be necessary to meet the prescribed water quality standards. In fine, the underlying

condition, which means that there must have been a specific incident of either intentional or

duty to upgrade the quality of water is not conditional on the occurrence of any pollution incident.

accidental spillage of oil or other hazardous substances, as mentioned in Sec. 62(h).

For another, a perusal of Sec. 20 of the Environment Code, as couched, indicates that
it is properly applicable to a specific situation in which the pollution is caused by polluters who
fail to clean up the mess they left behind. In such instance, the concerned government agencies

shall undertake the cleanup work for the polluters account. Petitioners assertion, that they have

the Manila Bay polluters has been few and far between. Hence, practically nobody has been

to perform cleanup operations in the Manila Bay only when there is a water pollution incident

required to contain, remove, or clean up a given water pollution incident. In this kind of setting, it

and the erring polluters do not undertake the containment, removal, and cleanup operations, is

behooves the Government to step in and undertake cleanup operations. Thus, Sec. 16 of RA

quite off mark. As earlier discussed, the complementary Sec. 17 of the Environment Code

9275, previously Sec. 20 of PD 1152, covers for all intents and purposes a general cleanup

comes into play and the specific duties of the agencies to clean up come in even if there are no

situation.

pollution incidents staring at them. Petitioners, thus, cannot plausibly invoke and hide behind
Sec. 20 of PD 1152 or Sec. 16 of RA 9275 on the pretext that their cleanup mandate depends on

The cleanup and/or restoration of the Manila Bay is only an aspect and the initial stage of

the happening of a specific pollution incident. In this regard, what the CA said with respect to

the long-term solution. The preservation of the water quality of the bay after the rehabilitation

the impasse over Secs. 17 and 20 of PD 1152 is at once valid as it is practical. The appellate

process is as important as the cleaning phase. It is imperative then that the wastes and

court wrote: PD 1152 aims to introduce a comprehensive program of environmental protection

contaminants found in the rivers, inland bays, and other bodies of water be stopped from

and management. This is better served by making Secs. 17 & 20 of general application rather

reaching the Manila Bay. Otherwise, any cleanup effort would just be a futile, cosmetic exercise,

than limiting them to specific pollution incidents.

[35]

for, in no time at all, the Manila Bay water quality would again deteriorate below the ideal
minimum standards set by PD 1152, RA 9275, and other relevant laws. It thus behooves the

Granting arguendo that

the

Court to put the heads of the petitioner-department-agencies and the bureaus and offices under

implementation of Sec. 20 is correct, they seem to have overlooked the fact that the pollution of

them on continuing notice about, and to enjoin them to perform, their mandates and duties

theManila Bay is of such magnitude and scope that it is well-nigh impossible to draw the line

towards cleaning up the Manila Bay and preserving the quality of its water to the ideal level.

between a specific and a general pollution incident. And such impossibility extends to pinpointing

Under what other judicial discipline describes as continuing mandamus, [36] the Court may,

with reasonable certainty who the polluters are. We note that Sec. 20 of PD 1152 mentions

under extraordinary circumstances, issue directives with the end in view of ensuring that its

water

of

decision would not be set to naught by administrative inaction or indifference. In India, the

the Manila Bay itself or by polluters in adjoining lands and in water bodies or waterways that

doctrine of continuing mandamus was used to enforce directives of the court to clean up the

empty into the bay. Sec. 16 of RA 9275, on the other hand, specifically adverts to any person

length of the Ganges River from industrial and municipal pollution.[37]

pollution

incidents

petitioners

which

may

be

position

caused

thus

by

described

polluters

in

vis--vis

the

waters

who causes pollution in or pollutes water bodies, which may refer to an individual or an
establishment that pollutes the land mass near the Manila Bay or the waterways, such that the

The Court can take judicial notice of the presence of shanties and other unauthorized

contaminants eventually end up in the bay. In this situation, the water pollution incidents are so

structures which do not have septic tanks along the Pasig-Marikina-San Juan Rivers, the

numerous and involve nameless and faceless polluters that they can validly be categorized as

National Capital Region (NCR) (Paraaque-Zapote, Las Pias) Rivers, the Navotas-Malabon-

beyond the specific pollution incident level.

Tullahan-Tenejeros Rivers, the Meycuayan-Marilao-Obando (Bulacan) Rivers, the Talisay

(Bataan) River, the Imus (Cavite) River, the Laguna De Bay, and other minor rivers and

Not to be ignored of course is the reality that the government agencies concerned are

connecting waterways, river banks, and esteros which discharge their waters, with all the

so undermanned that it would be almost impossible to apprehend the numerous polluters of

accompanying filth, dirt, and garbage, into the major rivers and eventually the Manila Bay. If

the Manila Bay. It may perhaps not be amiss to say that the apprehension, if any, of

there is one factor responsible for the pollution of the major river systems and the Manila Bay,

these unauthorized structures would be on top of the list. And if the issue of illegal or
unauthorized structures is not seriously addressed with sustained resolve, then practically all
efforts to cleanse these important bodies of water would be for naught. The DENR Secretary
said as much.[38]

Giving urgent dimension to the necessity of removing these illegal structures is Art. 51 of
PD 1067 or the Water Code,[39] which prohibits the building of structures within a given length
along banks of rivers and other waterways. Art. 51 reads:
The banks of rivers and streams and the shores of the
seas and lakes throughout their entire length and within a zone of three
(3) meters in urban areas, twenty (20) meters in agricultural areas and
forty (40) meters in forest areas, along their margins, are subject to the
easement of public use in the interest of recreation, navigation,
floatage, fishing and salvage. No person shall be allowed to stay in
this zone longer than what is necessary for recreation, navigation, floatage,
fishing or salvage or to build structures of any kind. (Emphasis added.)

Judicial notice may likewise be taken of factories and other industrial establishments
standing along or near the banks of the Pasig River, other major rivers, and connecting
waterways. But while they may not be treated as unauthorized constructions, some of these

1. As early as 2003, three land-filled dumpsites in Metro Manila the Payatas, Catmon and Rodriquez dumpsites - generate an alarming
quantity of lead and leachate or liquid run-off. Leachate are toxic liquids that
flow along the surface and seep into the earth and poison the surface and
groundwater that are used for drinking, aquatic life, and the environment.
2. The high level of fecal coliform confirms the presence of a large
amount of human waste in the dump sites and surrounding areas, which is
presumably generated by households that lack alternatives to sanitation. To
say that Manila Bay needs rehabilitation is an understatement.
3. Most of the deadly leachate, lead and other dangerous
contaminants and possibly strains of pathogens seeps untreated into
ground water and runs into the Marikina and Pasig River systems
andManila Bay.[40]

Given the above perspective, sufficient sanitary landfills should now more than ever
be established as prescribed by the Ecological Solid Waste Management Act (RA 9003).
Particular note should be taken of the blatant violations by some LGUs and possibly the MMDA
of Sec. 37, reproduced below:
Sec. 37. Prohibition against the Use of Open Dumps for Solid
Waste.No open dumps shall be established and operated, nor any
practice or disposal of solid waste by any person, including LGUs which
[constitute] the use of open dumps for solid waste, be allowed after the
effectivity of this Act: Provided, further that no controlled dumps shall be
allowed (5) years following the effectivity of this Act. (Emphasis added.)

establishments undoubtedly contribute to the pollution of the Pasig River and waterways. The
DILG and the concerned LGUs, have, accordingly, the duty to see to it that non-complying
industrial establishments set up, within a reasonable period, the necessary waste water
treatment facilities and infrastructure to prevent their industrial discharge, including their sewage

RA 9003 took effect on February 15, 2001 and the adverted grace period of five (5)
years which ended on February 21, 2006 has come and gone, but no single sanitary landfill
which strictly complies with the prescribed standards under RA 9003 has yet been set up.

waters, from flowing into the Pasig River, other major rivers, and connecting waterways. After
such period, non-complying establishments shall be shut down or asked to transfer their
operations.

In addition, there are rampant and repeated violations of Sec. 48 of RA 9003, like
littering, dumping of waste matters in roads, canals, esteros, and other public places, operation
of open dumps, open burning of solid waste, and the like. Some sludge companies which do not

At this juncture, and if only to dramatize the urgency of the need for petitioners-agencies
to comply with their statutory tasks, we cite the Asian Development Bank-commissioned study
on the garbage problem in Metro Manila, the results of which are embodied in the The Garbage
Book. As there reported, the garbage crisis in the metropolitan area is as alarming as it is
shocking. Some highlights of the report:

have proper disposal facilities simply discharge sludge into the Metro Manila sewerage system
that ends up in the Manila Bay. Equally unabated are violations of Sec. 27 of RA 9275, which
enjoins the pollution of water bodies, groundwater pollution, disposal of infectious wastes from
vessels, and unauthorized transport or dumping into sea waters of sewage or solid waste and of
Secs. 4 and 102 of RA 8550 which proscribes the introduction by human or machine of

substances to the aquatic environment including dumping/disposal of waste and other marine

provides that the State shall protect and advance the right of the people to a balanced and

litters, discharge of petroleum or residual products of petroleum of carbonaceous

healthful ecology in accord with the rhythm and harmony of nature.

materials/substances [and other] radioactive, noxious or harmful liquid, gaseous or solid

substances, from any water, land or air transport or other human-made structure.

So it was that in Oposa v. Factoran, Jr. the Court stated that the right to a balanced
and healthful ecology need not even be written in the Constitution for it is assumed, like other

In the light of the ongoing environmental degradation, the Court wishes to emphasize

civil and political rights guaranteed in the Bill of Rights, to exist from the inception of mankind

the extreme necessity for all concerned executive departments and agencies to immediately act

and it is an issue of transcendental importance with intergenerational implications. [41] Even

and discharge their respective official duties and obligations. Indeed, time is of the essence;

assuming the absence of a categorical legal provision specifically prodding petitioners to clean

hence, there is a need to set timetables for the performance and completion of the tasks, some

up the bay, they and the men and women representing them cannot escape their obligation to

of them as defined for them by law and the nature of their respective offices and mandates.

future generations of Filipinos to keep the waters of the Manila Bay clean and clear as humanly
as possible. Anything less would be a betrayal of the trust reposed in them.

The importance of the Manila Bay as a sea resource, playground, and as a historical
landmark cannot be over-emphasized. It is not yet too late in the day to restore theManila Bay to

WHEREFORE, the petition is DENIED. The September 28, 2005 Decision of the CA in

its former splendor and bring back the plants and sea life that once thrived in its blue waters. But

CA-G.R. CV No. 76528 and SP No. 74944 and the September 13, 2002 Decision of the RTC in

the tasks ahead, daunting as they may be, could only be accomplished if those mandated, with

Civil Case No. 1851-99 are AFFIRMED but with MODIFICATIONS in view of subsequent

the help and cooperation of all civic-minded individuals, would put their minds to these tasks and

developments or supervening events in the case. The falloof the RTC Decision shall now read:

take responsibility. This means that the State, through petitioners, has to take the lead in the
preservation and protection of the Manila Bay.

The era of delays, procrastination, and ad hoc measures is over. Petitioners must
transcend their limitations, real or imaginary, and buckle down to work before the problem at

WHEREFORE, judgment is hereby rendered ordering the

abovenamed defendant-government agencies to clean up, rehabilitate, and
preserve Manila Bay, and restore and maintain its waters to SB level (Class
B sea waters per Water Classification Tables under DENR Administrative
Order No. 34 [1990]) to make them fit for swimming, skin-diving, and other
forms of contact recreation.
In particular:

hand becomes unmanageable. Thus, we must reiterate that different government agencies and
instrumentalities cannot shirk from their mandates; they must perform their basic functions in

(1) Pursuant to Sec. 4 of EO 192, assigning the DENR as the primary agency responsible

cleaning up and rehabilitating the Manila Bay. We are disturbed by petitioners hiding behind two

for the conservation, management, development, and proper use of the countrys environment

untenable claims: (1) that there ought to be a specific pollution incident before they are required

and natural resources, and Sec. 19 of RA 9275, designating the DENR as the primary

to act; and (2) that the cleanup of the bay is a discretionary duty.

government agency responsible for its enforcement and implementation, the DENR is directed
to fully implement its Operational Plan for the Manila Bay Coastal Strategy for the rehabilitation,

RA 9003 is a sweeping piece of legislation enacted to radically transform and improve

restoration, and conservation of the Manila Bay at the earliest possible time. It is ordered to call

waste management. It implements Sec. 16, Art. II of the 1987 Constitution, which explicitly

regular coordination meetings with concerned government departments and agencies to ensure

the successful implementation of the aforesaid plan of action in accordance with its indicated
(5) Pursuant to Sec. 65 of RA 8550, [45] the DA, through the BFAR, is ordered to improve

completion schedules.

and restore the marine life of the Manila Bay. It is also directed to assist the LGUs in Metro
(2) Pursuant to Title XII (Local Government) of the Administrative Code of 1987 and Sec.
25 of the Local Government Code of 1991,[42] the DILG, in exercising the Presidents power of

Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga, and Bataan in developing, using recognized
methods, the fisheries and aquatic resources in the Manila Bay.

general supervision and its duty to promulgate guidelines in establishing waste management
programs under Sec. 43 of the Philippine Environment Code (PD 1152), shall direct all LGUs in

(6) The PCG, pursuant to Secs. 4 and 6 of PD 979, and the PNP Maritime Group, in

Metro Manila, Rizal, Laguna, Cavite, Bulacan, Pampanga, and Bataan to inspect all factories,

accordance with Sec. 124 of RA 8550, in coordination with each other, shall apprehend violators

commercial establishments, and private homes along the banks of the major river systems in

of PD 979, RA 8550, and other existing laws and regulations designed to prevent marine

their respective areas of jurisdiction, such as but not limited to the Pasig-Marikina-San Juan

pollution in the Manila Bay.

Rivers, the NCR (Paraaque-Zapote, Las Pias) Rivers, the Navotas-Malabon-TullahanTenejeros Rivers, the Meycauayan-Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan) River,

(7) Pursuant to Secs. 2 and 6-c of EO 513 [46] and the International Convention for the

the Imus (Cavite) River, the Laguna De Bay, and other minor rivers and waterways that

Prevention of Pollution from Ships, the PPA is ordered to immediately adopt such measures to

eventually discharge water into the Manila Bay; and the lands abutting the bay, to determine

prevent the discharge and dumping of solid and liquid wastes and other ship-generated wastes

whether they have wastewater treatment facilities or hygienic septic tanks as prescribed by

into the Manila Bay waters from vessels docked at ports and apprehend the violators.

existing laws, ordinances, and rules and regulations. If none be found, these LGUs shall be
ordered to require non-complying establishments and homes to set up said facilities or septic

(8) The MMDA, as the lead agency and implementor of programs and projects for

tanks within a reasonable time to prevent industrial wastes, sewage water, and human wastes

flood control projects and drainage services in Metro Manila, in coordination with the DPWH,

from flowing into these rivers, waterways, esteros, and the Manila Bay, under pain of closure or

DILG, affected LGUs, PNP Maritime Group, Housing and Urban Development Coordinating

imposition of fines and other sanctions.

Council (HUDCC), and other agencies, shall dismantle and remove all structures, constructions,
and other encroachments established or built in violation of RA 7279, and other applicable laws

(3) As mandated by Sec. 8 of RA 9275,

[43]

the MWSS is directed to provide, install,

along the Pasig-Marikina-San Juan Rivers, the NCR (Paraaque-Zapote, Las Pias) Rivers, the

operate, and maintain the necessary adequate waste water treatment facilities in Metro Manila,

Navotas-Malabon-Tullahan-Tenejeros Rivers, and connecting waterways and esteros in Metro

Rizal, and Cavite where needed at the earliest possible time.

Manila. The DPWH, as the principal implementor of programs and projects for flood control
services in the rest of the country more particularly in Bulacan, Bataan, Pampanga, Cavite, and

(4) Pursuant to RA 9275,

[44]

the LWUA, through the local water districts and in

Laguna, in coordination with the DILG, affected LGUs, PNP Maritime Group, HUDCC, and other

coordination with the DENR, is ordered to provide, install, operate, and maintain sewerage and

concerned government agencies, shall remove and demolish all structures, constructions, and

sanitation facilities and the efficient and safe collection, treatment, and disposal of sewage in the

other encroachments built in breach of RA 7279 and other applicable laws along the

provinces of Laguna, Cavite, Bulacan, Pampanga, and Bataan where needed at the earliest

Meycauayan-Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan) River, the Imus (Cavite)

possible time.

River, the Laguna De Bay, and other rivers, connecting waterways, and esteros that discharge
wastewater into the Manila Bay.

(12) The heads of petitioners-agencies MMDA, DENR, DepEd, DOH, DA, DPWH, DBM,
PCG, PNP Maritime Group, DILG, and also of MWSS, LWUA, and PPA, in line with the principle

In addition, the MMDA is ordered to establish, operate, and maintain a sanitary landfill, as
prescribed by RA 9003, within a period of one (1) year from finality of this Decision. On matters

of continuing mandamus, shall, from finality of this Decision, each submit to the Court a
quarterly progressive report of the activities undertaken in accordance with this Decision.

within its territorial jurisdiction and in connection with the discharge of its duties on the
maintenance of sanitary landfills and like undertakings, it is also ordered to cause the

No costs.

apprehension and filing of the appropriate criminal cases against violators of the respective
penal provisions of RA 9003,[47] Sec. 27 of RA 9275 (the Clean Water Act), and other existing
laws on pollution.

(9) The DOH shall, as directed by Art. 76 of PD 1067 and Sec. 8 of RA 9275, within one
(1) year from finality of this Decision, determine if all licensed septic and sludge companies have
the proper facilities for the treatment and disposal of fecal sludge and sewage coming from
septic tanks. The DOH shall give the companies, if found to be non-complying, a reasonable
time within which to set up the necessary facilities under pain of cancellation of its environmental
sanitation clearance.

(10) Pursuant to Sec. 53 of PD 1152, [48] Sec. 118 of RA 8550, and Sec. 56 of RA 9003,
[49]

the DepEd shall integrate lessons on pollution prevention, waste management, environmental

protection, and like subjects in the school curricula of all levels to inculcate in the minds and
hearts of students and, through them, their parents and friends, the importance of their duty
toward achieving and maintaining a balanced and healthful ecosystem in the Manila Bay and the
entire Philippine archipelago.

(11) The DBM shall consider incorporating an adequate budget in the General
Appropriations Act of 2010 and succeeding years to cover the expenses relating to the cleanup,
restoration, and preservation of the water quality of the Manila Bay, in line with the countrys
development objective to attain economic growth in a manner consistent with the protection,
preservation, and revival of our marine waters.

SO ORDERED.

BORACAY FOUNDATION, INC.,

G.R. No. 196870

Petitioner,

DECISION

Present:
LEONARDO-DE CASTRO, J.:
CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,
In resolving this controversy, the Court took into consideration that all the parties involved
BRION,
- versus -

PERALTA,

share common goals in pursuit of certain primordial State policies and principles that are
enshrined in the Constitution and pertinent laws, such as the protection of the environment, the

BERSAMIN,

empowerment of the local government units, the promotion of tourism, and the encouragement

DEL CASTILLO,

of the participation of the private sector. The Court seeks to reconcile the respective roles,

ABAD,

duties and responsibilities of the petitioner and respondents in achieving these shared goals

VILLARAMA, JR.,

within the context of our Constitution, laws and regulations.

PEREZ,
MENDOZA,*
Nature of the Case
SERENO,

THE PROVINCE OF AKLAN, REPRESENTED BY

GOVERNOR CARLITO S. MARQUEZ, THE PHILIPPINE
RECLAMATION AUTHORITY, AND THE DENR-EMB
(REGION VI),

REYES, and
PERLAS-BERNABE, JJ

This is an original petition for the issuance of an Environmental Protection Order in the
nature of a continuing mandamus under A.M. No. 09-6-8-SC, otherwise known as the Rules of
Procedure for Environmental Cases, promulgated on April 29, 2010.

Respondents.

Promulgated:

June 26, 2012

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

The Parties

Petitioner Boracay Foundation, Inc. (petitioner) is a duly registered, non-stock domestic

corporation. Its primary purpose is to foster a united, concerted and environment-conscious

compliance certificates regarding projects that require the environments protection and
management in the region.[5]

development of Boracay Island, thereby preserving and maintaining its culture, natural beauty
and ecological balance, marking the island as the crown jewel of Philippine tourism, a prime
tourist destination in Asia and the whole world. [1] It counts among its members at least sixty (60)

Summary of Antecedent Facts

owners and representatives of resorts, hotels, restaurants, and similar institutions; at least five
community organizations; and several environmentally-conscious residents and advocates.[2]

Boracay Island (Boracay), a tropical paradise located in the Western Visayas region of
Respondent Province of Aklan (respondent Province) is a political subdivision of the
government created pursuant to Republic Act No. 1414, represented by Honorable Carlito S.
Marquez, the Provincial Governor (Governor Marquez).

the Philippines and one of the countrys most popular tourist destinations, was declared a tourist
zone and marine reserve in 1973 under Presidential Proclamation No. 1801. [6] The island
comprises the barangays of Manoc-manoc, Balabag, and Yapak, all within the municipality of
Malay, in the province of Aklan.[7]

Respondent Philippine Reclamation Authority (respondent PRA), formerly called the

Public Estates Authority (PEA), is a government entity created by Presidential Decree No. 1084,
[3]

Petitioner describes Boracay as follows:

which states that one of the purposes for which respondent PRA was created was to reclaim

land, including foreshore and submerged areas. PEA eventually became the lead agency
primarily responsible for all reclamation projects in the country under Executive Order No. 525,
series of 1979. In June 2006, the President of the Philippines issued Executive Order No. 543,
delegating the power to approve reclamation projects to PRA through its governing Board,
subject to compliance with existing laws and rules and further subject to the condition that
reclamation contracts to be executed with any person or entity (must) go through public

Boracay is well-known for its distinctive powdery white-sand

beaches which are the product of the unique ecosystem dynamics of the
area. The island itself is known to come from the uplifted remnants of an
ancient reef platform. Its beaches, the sandy land strip between the water
and the area currently occupied by numerous establishments, is the primary
draw for domestic and international tourists for its color, texture and other
unique characteristics. Needless to state, it is the premier domestic and
international tourist destination in the Philippines.[8]

bidding.[4]

Respondent Department of Environment and Natural Resources Environmental

Management Bureau (DENR-EMB), Regional Office VI (respondent DENR-EMB RVI), is the
government agency in the Western Visayas Region authorized to issue environmental

More than a decade ago, respondent Province built the Caticlan Jetty Port and
Passenger Terminal at Barangay Caticlan to be the main gateway to Boracay. It also built the

corresponding Cagban Jetty Port and Passenger Terminal to be the receiving end for tourists in

application with the DENR for a foreshore lease of areas along the shorelines of Barangay

Boracay. Respondent Province operates both ports to provide structural facilities suited for

Caticlan, and manifesting its strong opposition to said application, as the proposed foreshore

locals, tourists and guests and to provide safety and security measures.[9]

lease practically covered almost all the coastlines of said barangay, thereby technically
diminishing its territorial jurisdiction, once granted, and depriving its constituents of their
statutory right of preference in the development and utilization of the natural resources within its
jurisdiction. The resolution further stated that respondent Province did not conduct any

In 2005, Boracay 2010 Summit was held and participated in by representatives from
national government agencies, local government units (LGUs), and the private sector. Petitioner
was one of the organizers and participants thereto. The Summit aimed to re-establish a

consultations with the Sangguniang Barangay of Caticlan regarding the proposed foreshore
lease, which failure the Sanggunian considered as an act of bad faith on the part of respondent
Province.[15]

common vision of all stakeholders to ensure the conservation, restoration, and preservation of
Boracay Island and to develop an action plan that [would allow] all sectors to work in concert
among and with each other for the long term benefit and sustainability of the island and the
community.[10] The Summit yielded a Terminal Report[11] stating that the participants had shared
their dream of having world-class land, water and air infrastructure, as well as given their
observations that government support was lacking, infrastructure was poor, and, more
importantly, the influx of tourists to Boracay was increasing. The Report showed that there was
a need to expand the port facilities at Caticlan due to congestion in the holding area of the
existing port, caused by inadequate facilities, thus tourists suffered long queues while waiting for
the boat ride going to the island.[12]

On November 20, 2008, the Sangguniang Panlalawigan of respondent Province

approved Resolution No. 2008-369,[16] formally authorizing Governor Marquez to enter into
negotiations towards the possibility of effecting self-liquidating and income-producing
development and livelihood projects to be financed through bonds, debentures, securities,
collaterals, notes or other obligations as provided under Section 299 of the Local Government
Code, with the following priority projects: (a) renovation/rehabilitation of the Caticlan/Cagban
Passenger Terminal Buildings and Jetty Ports; and (b) reclamation of a portion of Caticlan
foreshore for commercial purposes.[17] This step was taken as respondent Provinces existing
jetty port and passenger terminal was funded through bond flotation, which was successfully
redeemed and paid ahead of the target date. This was allegedly cited as one of the LGUs Best

Respondent Province claimed that tourist arrivals to Boracay reached approximately

Practices wherein respondent Province was given the appropriate commendation.[18]

649,559 in 2009 and 779,666 in 2010, and this was expected to reach a record of 1 million
tourist arrivals in the years to come. Thus, respondent Province conceptualized the expansion of
the port facilities at Barangay Caticlan.[13]

Respondent Province included the proposed expansion of the port facilities at

Barangay Caticlan in its 2009 Annual Investment Plan,[19] envisioned as its project site the area
adjacent to the existing jetty port, and identified additional areas along the coastline of Barangay

The Sangguniang Barangay of Caticlan, Malay Municipality, issued Resolution No.

13, s. 2008[14] on April 25, 2008 stating that it had learned that respondent Province had filed an

Caticlan as the site for future project expansion.[20]

Governor Marquez sent a letter to respondent PRA on March 12, 2009 [21] expressing the

on July 22, 2009, manifesting therein that respondent Provinces foreshore lease application was

interest of respondent Province to reclaim about 2.64 hectares of land along the foreshores of

for business enterprise purposes for its benefit, at the expense of the local government of Malay,

Barangay Caticlan, Municipality of Malay, Province of Aklan.

which by statutory provisions was the rightful entity to develop, utilize and reap benefits from
the natural resources found within its jurisdiction.[26]

Sometime in April 2009, respondent Province entered into an agreement with the
Financial Advisor/Consultant that won in the bidding process held a month before, to conduct the

In

August

2009,

Preliminary

Geohazard

Assessment [27] for

the

necessary feasibility study of the proposed project for the Renovation/Rehabilitation of the

enhancement/expansion of the existing Caticlan Jetty Port and Passenger Terminal through

Caticlan Passenger Terminal Building and Jetty Port, Enhancement and Recovery of Old

beach zone restoration and Protective Marina Developments in Caticlan, Malay, Aklan was

Caticlan Coastline, and Reclamation of a Portion of Foreshore for Commercial Purposes (the

completed.

Marina Project), in Malay, Aklan.

[22]

Thereafter, Governor Marquez submitted an Environmental Performance Report

Subsequently, on May 7, 2009, the Sangguniang Panlalawigan of respondent Province

and Monitoring Program (EPRMP)[28] to DENR-EMB RVI, which he had attached to his

issued Resolution No. 2009110,[23] which authorized Governor Marquez to file an

letter[29] dated September 19, 2009, as an initial step for securing an Environmental Compliance

application to reclaim the 2.64 hectares of foreshore area in Caticlan, Malay, Aklan with

Certificate (ECC). The letter reads in part:

respondent PRA.

Sometime in July 2009, the Financial Advisor/Consultant came up with a feasibility study

With the project expected to start its construction

implementation next month, the province hereby assures your good office
that it will give preferential attention to and shall comply with whatever
comments that you may have on this EPRMP.[30] (Emphasis added.)

which focused on the land reclamation of 2.64 hectares by way of beach enhancement and
recovery of the old Caticlan coastline for the rehabilitation and expansion of the existing jetty
port, and for its future plans the construction of commercial building and wellness center. The
financial

component

of

the

said

study

was

Two

Hundred

(P260,000,000.00). Its suggested financing scheme was bond flotation.

Sixty

Million

Pesos

Respondent Province was then authorized to issue Caticlan Super Marina Bonds for

[24]

the purpose of funding the renovation of the Caticlan Jetty Port and Passenger Terminal
Building, and the reclamation of a portion of the foreshore lease area for commercial purposes in
Malay, Aklan through Provincial Ordinance No. 2009-013, approved on September 10,

Meanwhile, the Sangguniang Bayan of the Municipality of Malay expressed its strong
opposition to the intended foreshore lease application, through Resolution No. 044,

[25]

approved

2009. The said ordinance authorized Governor Marquez to negotiate, sign and execute

of the reclamation of the [proposed Beach Zone Restoration and Protection

Marine Development in Barangays Caticlan and Manoc-Manoc] and as a
result of our discussion during the [meeting with the respondent PRA on
October 12, 2009], may we respectfully submit a revised Reclamation
Project Description embodying certain revisions/changes in the size
and location of the areas to be reclaimed. x x x.

agreements in relation to the issuance of the Caticlan Super Marina Bonds in the amount not
exceeding P260,000,000.00.[31]

Subsequently,

the Sangguniang

issued Provincial Ordinance No. 2009-015

Panlalawigan of
[32]

the

Province

of

Aklan

On another note, we are pleased to inform your Office that the

bond flotation we have secured with the Local Government Unit Guarantee
Corporation (LGUGC) has been finally approved last October 14, 2009. This
will pave the way for the implementation of said project. Briefly, the Province
has been recognized by the Bureau of Local Government Finance (BLGF)
for its capability to meet its loan obligations. x x x.

on October 1, 2009, amending Provincial

Ordinance No. 2009-013, authorizing the bond flotation of the Province of Aklan through
Governor Marquez to fund the Marina Project and appropriate the entire proceeds of said bonds
for the project, and further authorizing Governor Marquez to negotiate, sign and execute
contracts or agreements pertinent to the transaction.[33]

With the continued increase of tourists coming to Boracay through

Caticlan, the Province is venturing into such development project with the
end in view of protection and/or restoring certain segments of the shoreline
in Barangays Caticlan (Caticlan side) and Manoc-manoc (Boracay side)
which, as reported by experts, has been experiencing tremendous coastal
erosion.

Within the same month of October 2009, respondent Province deliberated on the
possible expansion from its original proposed reclamation area of 2.64 hectares to forty (40)
hectares in order to maximize the utilization of its resources and as a response to the findings of

For the project to be self-liquidating, however, we will be

developing the reclaimed land for commercial and tourism-related facilities
and for other complementary uses.[35] (Emphasis ours.)

the Preliminary Geohazard Assessment study which showed that the recession and retreat of
the shoreline caused by coastal erosion and scouring should be the first major concern in the
project site and nearby coastal area. The study likewise indicated the vulnerability of the coastal
zone within the proposed project site and the nearby coastal area due to the effects of sea level
rise and climate change which will greatly affect the social, economic, and environmental
situation of Caticlan and nearby Malay coastal communities.[34]

Then, on November 19, 2009, the Sangguniang Panlalawigan enacted Resolution

No. 2009-299[36] authorizing Governor Marquez to enter into a Memorandum of Agreement
(MOA) with respondent PRA in the implementation of the Beach Zone Restoration and
Protection Marina Development Project, which shall reclaim a total of 40 hectares in the

In his letter dated October 22, 2009 addressed to respondent PRA, Governor
Marquez wrote:

areas

adjacent

to

the

jetty

ports

at

Barangay

Caticlan

and

Barangay

Manoc-

manoc. The Sangguniang Panlalawigan approved the terms and conditions of the necessary
agreements for the implementation of the bond flotation of respondent Province to fund the

With our substantial compliance with the requirements under

Administrative Order No. 2007-2 relative to our request to PRA for approval

renovation/rehabilitation of the existing jetty port by way of enhancement and recovery of the Old

The land use development of the reclamation project shall be for

commercial, recreational and institutional and other applicable uses.
[42]
(Emphases supplied.)

Caticlan shoreline through reclamation of an area of 2.64 hectares in the amount

of P260,000,000.00 on December 1, 2009.[37]

It was at this point that respondent Province deemed it necessary to conduct a

series of what it calls information-education campaigns, which provided the venue for
Respondent Province gave an initial presentation of the project with consultation to

interaction and dialogue with the public, particularly the Barangay and Municipal officials of the
Municipality of Malay, the residents of Barangay Caticlan and Boracay, the stakeholders, and the

the Sangguniang Bayan of Malay[38] on December 9, 2009.

non-governmental organizations (NGOs). The details of the campaign are summarized as

follows[43]:
Respondent PRA approved the reclamation project on April 20, 2010 in its
Resolution No. 4094 and authorized its General Manager/Chief Executive Officer (CEO) to

a.

June 17, 2010 at Casa Pilar Beach Resort, Boracay Island, Malay,
Aklan;[44]

b.

July 28, 2010 at Caticlan Jetty Port and Passenger Terminal;[45]

c.

July 31, 2010 at Barangay Caticlan Plaza;[46]

enter into a MOA with respondent Province for the implementation of the reclamation project. [39]

On April 27, 2010, DENR-EMB RVI issued to respondent Province ECC-R6-1003-0967100 (the questioned ECC) for Phase 1 of the Reclamation Project to the extent of 2.64
hectares to be done along the Caticlan side beside the existing jetty port.[40]

On May 17, 2010, respondent Province entered into a MOA

[41]

d.

September 15, 2010 at the Office of the Provincial Governor with

Municipal Mayor of Malay Mayor John P. Yap;[47]

e.

October 12, 2010 at the Office of the Provincial Governor with the
Provincial Development Council Executive Committee;[48] and

f.

October 29, 2010 at the Office of the Provincial Governor with Officials
of LGU-Malay and Petitioner.[49]

with respondent PRA.

Under Article III, the Project was described therein as follows:

The proposed Aklan Beach Zone Restoration and Protection

Marina Development Project involves the reclamation and development of
approximately forty (40) hectares of foreshore and offshore areas of the
Municipality of Malay x x x.

in the area. Petitioner noted that said documents had failed to deal with coastal erosion
Petitioner claims that during the public consultation meeting belatedly called by
respondent Province on June 17, 2010, respondent Province presented the Reclamation Project
and only then detailed the actions that it had already undertaken, particularly: the issuance of

concerns in Boracay. It also noted that respondent Province failed to comply with certain
mandatory provisions of the Local Government Code, particularly, those requiring the project
proponent to conduct consultations with stakeholders.

the Caticlan Super Marina Bonds; the execution of the MOA with respondent PRA; the alleged
conduct of an Environmental Impact Assessment (EIA) study for the reclamation project; and
the expansion of the project to forty (40) hectares from 2.64 hectares.[50]

Petitioner likewise transmitted its Resolution No. 001, Series of 2010, registering its
opposition to the reclamation project to respondent Province, respondent PRA, respondent
DENR-EMB, the National Economic Development Authority Region VI, the Malay Municipality,

In Resolution No. 046, Series of 2010, adopted on June 23, 2010, the Malay

and other concerned entities.[54]

Municipality reiterated its strong opposition to respondent Provinces project and denied its
request for a favorable endorsement of the Marina Project.[51]
Petitioner alleges that despite the Malay Municipalitys denial of respondent Provinces
request for a favorable endorsement, as well as the strong opposition manifested both by
The Malay Municipality subsequently issued Resolution No. 016, Series of 2010,
adopted on August 3, 2010, to request respondent PRA not to grant reclamation permit and

Barangay Caticlan and petitioner as an NGO, respondent Province still continued with the
implementation of the Reclamation Project.[55]

notice to proceed to the Marina Project of the [respondent] Provincial Government of Aklan
located at Caticlan, Malay, Aklan.[52]
On July 26, 2010, the Sangguniang Panlalawigan of respondent Province set aside
Resolution No. 046, s. 2010, of the Municipality of Malay and manifested its support for the
In a letter[53] dated October 12, 2010, petitioner informed respondent PRA of its

implementation of the aforesaid project through its Resolution No. 2010-022.[56]

opposition to the reclamation project, primarily for the reason that, based on the opinion of Dr.
Porfirio M. Alio, an expert from the University of the Philippines Marine Science Institute
(UPMSI), which he rendered based on the documents submitted by respondent Province to

On July 27, 2010, the MOA was confirmed by respondent PRA Board of Directors

obtain the ECC, a full EIA study is required to assess the reclamation projects likelihood of

under its Resolution No. 4130. Respondent PRA wrote to respondent Province on October 19,

rendering critical and lasting effect on Boracay considering the proximity in distance,

2010, informing the latter toproceed with the reclamation and development of phase 1 of

geographical location, current and wind direction, and many other environmental considerations

site 1 of its proposed project. Respondent PRA attached to said letter its Evaluation Report
dated October 18, 2010.

[57]

assistance of, among others, petitioner. The study was conducted in November 2010 by several
marine biologists/experts from the Marine Environmental Resources Foundation (MERF) of the
UPMSI. The study was intended to determine the potential impact of a reclamation project in
the hydrodynamics of the strait and on the coastal erosion patterns in the southern coast of
Boracay Island and along the coast of Caticlan.[60]

Petitioner likewise received a copy of respondent PRAs letter dated October 19, 2010,
which authorized respondent Province to proceed with phase 1 of the reclamation project,
subject to compliance with the requirements of its Evaluation Report. The reclamation project
was described as:

After noting the objections of the respective LGUs of Caticlan and Malay, as well as
the apprehensions of petitioner, respondent Province issued a notice to the contractor on
December 1, 2010 to commence with the construction of the project.[61]

[A] seafront development involving reclamation of an aggregate

area of more or less, forty (40) hectares in two (2) separate sites both in
Malay Municipality, Aklan Province. Site 1 is in Brgy. Caticlan with a total
area of 36.82 hectares and Site 2 in Brgy. Manoc-Manoc, Boracay
Island with a total area of 3.18 hectares. Sites 1 and 2 are on the
opposite sides of Tabon Strait, about 1,200 meters apart. x x
x. [58] (Emphases added.)

On April 4, 2011, the Sangguniang Panlalawigan of Aklan, through its Committee on

Cooperatives, Food, Agriculture, and Environmental Protection and the Committee on Tourism,
Trade, Industry and Commerce, conducted a joint committee hearing wherein the study
undertaken by the MERF-UPMSI was discussed. [62] In attendance were Mr. Ariel Abriam,
President of PCCI-Boracay, representatives from the Provincial Government, and Dr. Cesar
Villanoy, a professor from the UPMSI. Dr. Villanoy said that the subject project, consisting

The Sangguniang
[59]

Panlalawigan of

Aklan,

through Resolution

No.

2010-034,

addressed the apprehensions of petitioner embodied in its Resolution No. 001, s. 2010, and

supported the implementation of the project. Said resolution stated that the apprehensions of
petitioner with regard to the economic, social and political negative impacts of the projects were

of 2.64 hectares, would only have insignificant effect on the hydrodynamics of the strait
traversing the coastline of Barangay Caticlan and Boracay, hence, there was a distant
possibility that it would affect the Boracay coastline, which includes the famous white-sand
beach of the island.[63]

mere perceptions and generalities and were not anchored on definite scientific, social and
political studies.

Thus, on April 6, 2011, the Sangguniang Panlalawigan of Aklan enacted Resolution

No. 2011-065[64] noting the report on the survey of the channel between Caticlan and Boracay
In the meantime, a study was commissioned by the Philippine Chamber of Commerce
and Industry-Boracay (PCCI-Boracay), funded by the Department of Tourism (DOT) with the

conducted by the UPMSI in relation to the effects of the ongoing reclamation to Boracay

beaches, and stating that Dr. Villanoy had admitted that nowhere in their study was it pointed out
that there would be an adverse effect on the white-sand beach of Boracay.

During the First Quarter Regular Meeting of the Regional Development Council,

I.

Region VI (RDC-VI) on April 16, 2011, it approved and supported the subject project (covering
2.64 hectares) through RDC-VI Resolution No. VI-26, series of 2011.[65]

Subsequently, Mr. Abriam sent a letter to Governor Marquez dated April 25, 2011

THE RESPONDENT PROVINCE, PROPONENT OF THE RECLAMATION

PROJECT, FAILED TO COMPLY WITH RELEVANT RULES AND
REGULATIONS IN THE ACQUISITION OF AN ECC.

A.

THE RECLAMATION PROJECT IS CO-LOCATED WITHIN

ENVIRONMENTALLY CRITICAL AREAS REQUIRING THE
PERFORMANCE OF A FULL, OR PROGRAMMATIC,
ENVIRONMENTAL IMPACT ASSESSMENT.

B.

RESPONDENT PROVINCE FAILED TO OBTAIN THE

FAVORABLE ENDORSEMENT OF THE LGU CONCERNED.

C.

RESPONDENT PROVINCE FAILED TO CONDUCT THE

REQUIRED CONSULTATION PROCEDURES AS REQUIRED BY
THE LOCAL GOVERNMENT CODE.

D.

RESPONDENT PROVINCE FAILED TO PERFORM A FULL

ENVIRONMENTAL IMPACT ASSESSMENT AS REQUIRED BY
LAW AND RELEVANT REGULATIONS.

stating that the study conducted by the UPMSI confirms that the water flow across the CaticlanBoracay channel is primarily tide-driven, therefore, the marine scientists believe that the 2.64hectare project of respondent Province would not significantly affect the flow in the channel and
would unlikely impact the Boracay beaches. Based on this, PCCI-Boracay stated that it was not
opposing the 2.64-hectare Caticlan reclamation project on environmental grounds.[66]

On June 1, 2011, petitioner filed the instant Petition for Environmental Protection
Order/Issuance of the Writ of Continuing Mandamus. On June 7, 2011, this Court issued
a Temporary Environmental Protection Order (TEPO) and ordered the respondents to file
their respective comments to the petition.[67]

After receiving a copy of the TEPO on June 9, 2011, respondent Province immediately
issued an order to the Provincial Engineering Office and the concerned contractor to cease and

II.

desist from conducting any construction activities until further orders from this Court.
THE RECLAMATION OF LAND BORDERING THE STRAIT BETWEEN
CATICLAN AND BORACAY SHALL ADVERSELY AFFECT THE FRAIL
ECOLOGICAL BALANCE OF THE AREA.[68]
The petition is premised on the following grounds:

Petitioner objects to respondent Provinces classification of the reclamation project as

Petitioner further alleges that the Revised Procedural Manual (on which the

single instead of co-located, as non-environmentally critical, and as a mere rehabilitation of

classification above is based, which merely requires an Environmental Impact Statement [EIS]

the existing jetty port. Petitioner points out that the reclamation project is on two sites (which are

for Group II projects) is patently ultra vires, and respondent DENR-EMB RVI committed grave

situated on the opposite sides of Tabon Strait, about 1,200 meters apart):

abuse of discretion because the laws on EIS, namely, Presidential Decree Nos. 1151 and 1586,
as well as Presidential Proclamation No. 2146, clearly indicate that projects in environmentally
critical areas are to be immediately considered environmentally critical. Petitioner complains

36.82 hectares Site 1, in Bgy. Caticlan

3.18 hectares Site 2, in Manoc-manoc, Boracay Island[69]

that respondent Province applied for an ECC only for Phase 1; hence, unlawfully

evading the requirement that co-located projects[74] within Environmentally Critical Areas
(ECAs) must submit a PEIS and/or a PEPRMP.

Phase 1, which was started in December 2010 without the necessary permits, [70] is
located on the Caticlan side of a narrow strait separating mainland Aklan from Boracay. In the
implementation of the project, respondent Province obtained only an ECC to conduct Phase 1,
instead of an ECC on the entire 40 hectares. Thus, petitioner argues that respondent Province
abused and exploited the Revised Procedural Manual forDENR Administrative Order No. 30,
Series of 2003 (DENR DAO 2003-30)[71] relating to the acquisition of an ECC by:

Petitioner argues that respondent Province fraudulently classified and misrepresented

the project as a Non-ECP in an ECA, and as a single project instead of a co-located one. The
impact assessment allegedly performed gives a patently erroneous and wrongly-premised
appraisal of the possible environmental impact of the reclamation project. Petitioner contends
that respondent Provinces choice of classification was designed to avoid a comprehensive
impact assessment of the reclamation project.

1.

Declaring the reclamation project under Group II Projects-Non-ECP

(environmentally critical project) in ECA (environmentally critical
area) based on the type and size of the area, and

Petitioner further contends that respondent DENR-EMB RVI willfully and deliberately
disregarded its duty to ensure that the environment is protected from harmful developmental
projects because it allegedly performed only a cursory and superficial review of the documents

2.

Failing to declare the reclamation project as a co-located

application which would have required the Province to
a Programmatic
Environmental Impact
Statement
[72]
orProgrammatic
Environmental
[Performance]
Management Plan (PE[P]RMP).[73] (Emphases ours.)

project
submit
(PEIS)
Report

submitted by the respondent Province for an ECC, failing to note that all the information and
data used by respondent Province in its application for the ECC were all dated and not current,
as data was gathered in the late 1990s for the ECC issued in 1999 for the first jetty port. Thus,

petitioner alleges that respondent DENR-EMB RVI ignored the environmental impact to Boracay,
which involves changes in the structure of the coastline that could contribute to the changes in
Petitioner claims that respondent Province, aided and abetted by respondents PRA

the characteristics of the sand in the beaches of both Caticlan and Boracay.

and DENR-EMB, ignored the spirit and letter of the Revised Procedural Manual, intended to
implement the various regulations governing the Environmental Impact Assessments (EIAs) to
ensure that developmental projects are in line with sustainable development of natural
Petitioner insists that reclamation of land at the Caticlan side will unavoidably

resources. The project was conceptualized without considering alternatives.

adversely affect the Boracay side and notes that the declared objective of the reclamation
project is for the exploitation of Boracays tourist trade, since the project is intended to enhance
support services thereto. But, petitioner argues, the primary reason for Boracays popularity is
Further, as to its allegation that respondent Province failed to perform a full EIA,

its white-sand beaches which will be negatively affected by the project.

petitioner argues that while it is true that as of now, only the Caticlan side has been issued an
ECC, the entire project involves the Boracay side, which should have been considered a colocated project. Petitioner claims that any project involving Boracay requires a full EIA
Petitioner alleges that respondent PRA had required respondent Province to obtain

since it is an ECA. Phase 1 of the project will affect Boracay and Caticlan as they are

the favorable endorsement of the LGUs of Barangay Caticlan and Malay Municipality pursuant

separated only by a narrow strait; thus, it should be considered an ECP. Therefore, the ECC

to the consultation procedures as required by the Local Government Code.

[75]

Petitioner asserts

and permit issued must be invalidated and cancelled.

that the reclamation project is in violation not only of laws on EIS but also of the Local
Government Code as respondent Province failed to enter into proper consultations with the
concerned LGUs. In fact, the Liga ng mga Barangay-Malay Chapter also expressed strong
opposition against the project.[76]

Petitioner contends that a study shows that the flow of the water through a narrower
channel due to the reclamation project will likely divert sand transport off the southwest part of
Boracay, whereas the characteristic coast of the Caticlan side of the strait indicate stronger
sediment transport.[77] The white-sand beaches of Boracay and its surrounding marine

Petitioner cites Sections 26 and 27 of the Local Government Code, which require

environment depend upon the natural flow of the adjacent waters.

consultations if the project or program may cause pollution, climactic change, depletion of nonrenewable resources, etc. According to petitioner, respondent Province ignored the LGUs
opposition expressed as early as 2008. Not only that, respondent Province belatedly called for
public consultation meetings on June 17 and July 28, 2010, after an ECC had already been

Regarding its claim that the reclamation of land bordering the strait between Caticlan

issued and the MOA between respondents PRA and Province had already been executed. As

and Boracay shall adversely affect the frail ecological balance of the area, petitioner submits that

the petitioner saw it, these were not consultations but mere project presentations.

while the study conducted by the MERF-UPMSI only considers the impact of the reclamation

project on the land, it is undeniable that it will also adversely affect the already frail ecological

Respondent Province believes that under Section 5.4.3 of DENR Administrative Order

balance of the area. The effect of the project would have been properly assessed if the proper

No. 2003-30 (DAO 2003-30),[80] the issuance of an ECC[81] is an official decision of DENR-EMB

EIA had been performed prior to any implementation of the project.

RVI on the application of a project proponent. [82] It cites Section 6 of DENR DAO 2003-30,
which provides for a remedy available to the party aggrieved by the final decision on the
proponents ECC applications.

According to petitioner, respondent Provinces intended purposes do not prevail over

its duty and obligation to protect the environment. Petitioner believes that rehabilitation of the
Jetty Port may be done through other means.

Respondent Province argues that the instant petition is anchored on a wrong premise
that results to petitioners unfounded fears and baseless apprehensions. It is respondent
Provinces contention that its 2.64-hectare reclamation project is considered as a stand alone
project, separate and independent from the approved area of 40 hectares. Thus, petitioner

In its Comment[78] dated June 21, 2011, respondent Province claimed that application
for reclamation of 40 hectares is advantageous to the Provincial Government considering that

should have observed the difference between the future development plan of respondent
Province from its actual project being undertaken.[83]

its filing fee would only cost Php20,000.00 plus Value Added Tax (VAT) which is also the
minimum fee as prescribed under Section 4.2 of Administrative Order No. 2007-2.[79]

Respondent Province clearly does not dispute the fact that it revised its original
application to respondent PRA from 2.64 hectares to 40 hectares. However, it claims that such
Respondent Province considers the instant petition to be premature; thus, it must
necessarily fail for lack of cause of action due to the failure of petitioner to fully exhaust the
available administrative remedies even before seeking judicial relief. According to respondent

revision is part of its future plan, and implementation thereof is still subject to availability of
funds, independent scientific environmental study, separate application of ECC and notice to
proceed to be issued by respondent PRA.[84]

Province, the petition primarily assailed the decision of respondent DENR-EMB RVI in granting
the ECC for the subject project consisting of 2.64 hectares and sought the cancellation of the
ECC for alleged failure of respondent Province to submit proper documentation as required for
its issuance. Hence, the grounds relied upon by petitioner can be addressed within the confines
of administrative processes provided by law.

Respondent Province goes on to claim that [p]etitioners version of the Caticlan jetty
port expansion project is a bigger project which is still at the conceptualization stage. Although
this project was described in theNotice to Proceed issued by respondent PRA to have two
phases, 36.82 hectares in Caticlan and 3.18 hectares in Boracay [Island,] it is totally different
from the [ongoing] Caticlan jetty port expansion project.[85]

Province intends to commence the construction on the other component of the 40 hectares, then
it agrees that it is mandated to secure a new ECC.[90]
Respondent Province says that the Accomplishment Report[86] of its Engineering Office
would attest that the actual project consists of 2.64 hectares only, as originally planned and
conceptualized, which was even reduced to 2.2 hectares due to some construction and design
modifications.

Respondent Province admits that it dreamt of a 40-hectare project, even if it had

originally planned and was at present only financially equipped and legally compliant to
undertake 2.64 hectares of the project, and only as an expansion of its old jetty port.[91]

Thus, respondent Province alleges that from its standpoint, its capability to reclaim is
limited to 2.64 hectares only, based on respondent PRAs Evaluation Report[87] dated October
18, 2010, which was in turn the basis of the issuance of the Notice to Proceed dated October 19,

Respondent Province claims that it has complied with all the necessary requirements

2010, because the projects financial component is P260,000,000.00 only. Said Evaluation

for securing an ECC. On the issue that the reclamation project is within an ECA requiring the

Report indicates that the implementation of the other phases of the project including site 2,

performance of a full or programmatic EIA, respondent Province reiterates that the idea of

which consists of the other portions of the 40-hectare area that includes a portion in Boracay, is

expanding the area to 40 hectares is only a future plan. It only secured an ECC for 2.64

still within the 10-year period and will depend largely on the availability of funds of respondent

hectares, based on the limits of its funding and authority. From the beginning, its intention was

Province.[88]

to rehabilitate and expand the existing jetty port terminal to accommodate an increasing
projected traffic. The subject project is specifically classified under DENR DAO 2003-30 on its
Project Grouping Matrix for Determination of EIA Report Type considered as Minor Reclamation
Projects falling under Group II Non ECP in an ECA. Whether 2.64 or 40 hectares in area, the

So, even if respondent PRA approved an area that would total up to 40 hectares, it

subject project falls within this classification.

was divided into phases in order to determine the period of its implementation. Each phase was
separate and independent because the source of funds was also separate. The required
documents and requirements were also specific for each phase. The entire approved area of 40
hectares could be implemented within a period of 10 years but this would depend solely on the
availability of funds.[89]

Consequently, respondent Province claims that petitioner erred in considering the

ongoing reclamation project at Caticlan, Malay, Aklan, as co-located within an ECA.

As far as respondent Province understands it, additional reclamations not covered by

Respondent Province, likewise argues that the 2.64-hectare project is not a

the ECC, which only approved 2.64 hectares, should undergo another EIA. If respondent

component of the approved 40-hectare area as it is originally planned for the expansion site of

the existing Caticlan jetty port. At present, it has no definite conceptual construction plan of the

conceptualization stage. Both respondents PRA and Province are yet to complete studies and

said portion in Boracay and it has no financial allocation to initiate any project on the said

feasibility studies to embark on another project.

Boracay portion.

Respondent Province claims that an ocular survey of the reclamation project revealed
Furthermore, respondent Province contends that the present project is located in

that it had worked within the limits of the ECC.[92]

Caticlan while the alleged component that falls within an ECA is in Boracay. Considering its
geographical location, the two sites cannot be considered as a contiguous area for the reason
that it is separated by a body of water a strait that traverses between the mainland Panay
wherein Caticlan is located and Boracay. Hence, it is erroneous to consider the two sites as a
co-located project within an ECA. Being a stand alone project and an expansion of the existing
jetty port, respondent DENR-EMB RVI had required respondent Province to perform an EPRMP
to secure an ECC as sanctioned by Item No. 8(b), page 7 of DENR DAO 2003-30.

With regard to petitioners allegation that respondent Province failed to get the
favorable endorsement of the concerned LGUs in violation of the Local Government Code,
respondent Province contends that consultation vis--vis the favorable endorsement from the
concerned LGUs as contemplated under the Local Government Code are merely tools to seek
advice and not a power clothed upon the LGUs to unilaterally approve or disapprove any
government projects. Furthermore, such endorsement is not necessary for projects falling under
Category B2 unless required by the DENR-EMB RVI, under Section 5.3 of DENR DAO 2003-30.

Respondent Province contends that even if, granting for the sake of argument, it had
erroneously categorized its project as Non-ECP in an ECA, this was not a final
determination. Respondent DENR-EMB RVI, which was the administrator of the EIS system,
had the final decision on this matter. Under DENR DAO 2003-30, an application for ECC, even
for a Category B2 project where an EPRMP is conducted, shall be subjected to a review
process. Respondent DENR-EMB RVI had the authority to deny said application. Its Regional
Director could either issue an ECC for the project or deny the application. He may also require a
more comprehensive EIA study. The Regional Director issued the ECC based on the EPRMP
submitted by respondent Province and after the same went through the EIA review process.

Moreover, DENR Memorandum Circular No. 08-2007 no longer requires the

issuance of permits and certifications as a pre-requisite for the issuance of an
ECC. Respondent Province claims to have conducted consultative activities with LGUs in
connection with Sections 26 and 27 of the Local Government Code. The vehement and staunch
objections of both the Sangguniang Barangay of Caticlan and the Sangguniang Bayanof Malay,
according to respondent Province, were not rooted on its perceived impact upon the people and
the community in terms of environmental or ecological balance, but due to an alleged conflict
with their principal position to develop, utilize and reap benefits from the natural resources
found within its jurisdiction. [93] Respondent Province argues that these concerns are not within

Thus, respondent Province concludes that petitioners allegation of this being a colocated project is premature if not baseless as the bigger reclamation project is still on the

the purview of the Local Government Code. Furthermore, the Preliminary Geohazard

Assessment Report and EPRMP as well as Sangguniang Panlalawigan Resolution Nos. 2010022 and 2010-034 should address any environmental issue they may raise.

Respondent Province posits that the spirit and intent of Sections 26 and 27 of the

In light of the foregoing premise, it casts serious doubt on

petitioners allegations pertaining to the environmental effects of
Respondent-LGUs 2.64 hectares reclamation project. The alleged
environmental impact of the subject project to the beaches of Boracay
Island remains unconfirmed. Petitioner had unsuccessfully proven that the
project would cause imminent, grave and irreparable injury to the
community.[95]

Local Government Code is to create an avenue for parties, the proponent and the LGU
concerned, to come up with a tool in harmonizing its views and concerns about the project. The
duty to consult does not automatically require adherence to the opinions during the consultation
process. It is allegedly not within the provisions to give the full authority to the LGU concerned
to unilaterally approve or disapprove the project in the guise of requiring the proponent of
securing its favorable endorsement. In this case, petitioner is calling a halt to the project without
providing an alternative resolution to harmonize its position and that of respondent Province.

Respondent Province prayed for the dissolution of the TEPO, claiming that the rules
provide that the TEPO may be dissolved if it appears after hearing that its issuance or
continuance would cause irreparable damage to the party or person enjoined, while the
applicant may be fully compensated for such damages as he may suffer and subject to the
posting of a sufficient bond by the party or person enjoined. Respondent Province contends that
the TEPO would cause irreparable damage in two aspects:

Respondent Province claims that the EPRMP[94] would reveal that:

[T]he area fronting the project site is practically composed of sand. Dead
coral communities may be found along the vicinity. Thus, fish life at the
project site is quite scarce due to the absence of marine support systems
like the sea grass beds and coral reefs.

a.

Financial dislocation and probable bankruptcy; and

b.

Grave and imminent danger to safety and health of inhabitants of immediate

area, including tourists and passengers serviced by the jetty port, brought about
by the abrupt cessation of development works.

x x x [T]here is no coral cover at the existing Caticlan jetty port. [From] the
deepest point of jetty to the shallowest point, there was no more coral patch
and the substrate is sandy. It is of public knowledge that the said foreshore
area is being utilized by the residents ever since as berthing or anchorage
site of their motorized banca. There will be no possibility of any coral
development therein because of its continuous utilization. Likewise, the
activity of the strait that traverses between the main land Caticlan and
Boracay Island would also be a factor of the coral development. Corals
[may] only be formed within the area if there is scientific human intervention,
which is absent up to the present.

As regards financial dislocation, the arguments of respondent Province are

summarized below:

1.

This project is financed by bonds which the respondent Province had

issued to its creditors as the financing scheme in funding the present
project is by way of credit financing through bond flotation.

1.

Non-compliance with the guidelines of the ECC may result to

environmental hazards most especially that reclaimed land if not
properly secured may be eroded into the sea.

2.

The funds are financed by a Guarantee Bank getting payment from

bonds, being sold to investors, which in turn would be paid by the
income that the project would realize or incur upon its completion.

2.

The construction has accomplished 65.26 percent of the project. The

embankment that was deposited on the project has no proper concrete
wave protection that might be washed out in the event that a strong
typhoon or big waves may occur affecting the strait and the properties
along the project site. It is already the rainy season and there is a big
possibility of typhoon occurrence.

3.

While the project is under construction, respondent Province is

appropriating a portion of its Internal Revenue Allotment (IRA) budget
from the 20% development fund to defray the interest and principal
amortization due to the Guarantee Bank.

3.

If said incident occurs, the aggregates of the embankment that had

been washed out might be transferred to the adjoining properties which
could affect its natural environmental state.

4.

It might result to the total alteration of the physical landscape of the

area attributing to environmental disturbance.

4. The respondent Provinces IRA, regular income, and/or such other

revenues or funds, as may be permitted by law, are being used as
security for the payment of the said loan used for the projects
construction.

5. The inability of the subject project to earn revenues as projected upon

completion will compel the Province to shoulder the full amount of the
obligation, starting from year 2012.

5. The lack of proper concrete wave protection or revetment would cause

the total erosion of the embankment that has been dumped on the
accomplished area.[97]

6. Respondent province is mandated to assign its IRA, regular income

and/or such other revenues or funds as permitted by law; if project is
stopped, detriment of the public welfare and its constituents.[96]
Respondent Province claims that petitioner will not stand to suffer immediate, grave
and irreparable injury or damage from the ongoing project. The petitioners perceived fear of
environmental destruction brought about by its erroneous appreciation of available data is
unfounded and does not translate into a matter of extreme urgency. Thus, under the Rules of
As to the second ground for the dissolution of the TEPO, respondent Province argues:

Procedure on Environmental Cases, the TEPO may be dissolved.

Respondent PRA filed its Comment[98] on June 22, 2011. It alleges that on June 24,

Respondent PRA claims that its approval of the Aklan Reclamation Project was in

2006, Executive Order No. 543 delegated the power to approve reclamation projects to

accordance with law and its rules. Indeed, it issued the notice to proceed only after Aklan had

respondent PRA through its governing Board, subject to compliance with existing laws and rules

complied with all the requirements imposed by existing laws and regulations. It further contends

and further subject to the condition that reclamation contracts to be executed with any person or

that the 40 hectares involved in this project remains a plan insofar as respondent PRA is

entity (must) go through public bidding.

concerned. What has been approved for reclamation by respondent PRA thus far is only
the 2.64-hectare reclamation project. Respondent PRA reiterates that it approved this
reclamation project after extensively reviewing the legal, technical, financial, environmental, and
operational aspects of the proposed reclamation.[102]

Section 4 of respondent PRAs Administrative Order No. 2007-2 provides for the
approval

process

and

undertaken. Respondent
[99]

2009

procedures
PRA

prepared

for
an

various

reclamation

Evaluation

Report

projects
on

to

November

be
5,

regarding Aklans proposal to increase its project to 40 hectares.

One of the conditions that respondent PRA Board imposed before approving the Aklan
project was that no reclamation work could be started until respondent PRA has approved the
detailed engineering plans/methodology, design and specifications of the reclamation. Part of
the required submissions to respondent PRA includes the drainage design as approved by the

Respondent PRA contends that it was only after respondent Province had complied
with the requirements under the law that respondent PRA, through its Board of Directors,
approved the proposed project under its Board Resolution No. 4094.[100] In the same
Resolution, respondent PRA Board authorized the General Manager/CEO to execute a MOA
with the Aklan provincial government to implement the reclamation project under certain

Public Works Department and the ECC as issued by the DENR, all of which the Aklan
government must submit to respondent PRA before starting any reclamation works. [103] Under
Article IV(B)(3) of the MOA between respondent PRA and Aklan, the latter is required to submit,
apart from the ECC, the following requirements for respondent PRAs review and approval, as
basis for the issuance of a Notice to Proceed (NTP) for Reclamation Works:

conditions.

(a)
The issue for respondent PRA was whether or not it approved the respondent

Land-form plan with technical description of the metes and

bounds of the same land-form;

Provinces 2.64-hectare reclamation project proposal in willful disregard of alleged numerous

irregularities as claimed by petitioner.[101]

(b)

(c)

Final master development and land use plan for the project;

Detailed engineering studies, detailed engineering design,

plans and specification for reclamation works, reclamation plans
and methodology, plans for the sources of fill materials;

In its August 11, 2010 letter,[106] respondent PRA referred for respondent Provinces
(d)

Drainage plan vis-a-vis the land-form approved by DPWH

Regional Office to include a cost effective and efficient drainage
system as may be required based on the results of the studies;

appropriate action petitioners Resolution 001, series of 2010 and Resolution 46, series of 2010,
of the Sangguniang Bayan of Malay. Governor Marquez wrote respondent PRA[107] on
September 16, 2010 informing it that respondent Province had already met with the different
officials of Malay, furnishing respondent PRA with the copies of the minutes of such

(e)

(f)

Detailed project cost estimates and quantity take-off per items

of work of the rawland reclamation components, e.g. reclamation
containment structures and soil consolidation;

Organizational chart of the construction arm, manning table,

equipment schedule for the project; and,

meetings/presentations. Governor Marquez also assured respondent PRA that it had complied
with the consultation requirements as far as Malay was concerned.

Respondent PRA claims that in evaluating respondent Provinces project and in issuing
the necessary NTP for Phase 1 of Site 1 (2.64 hectares) of the Caticlan Jetty Port expansion
and modernization, respondent PRA gave considerable weight to all pertinent issuances,

(g)

Project timetable (PERT/CPM)

construction period.[104]

for

the

entire

project

especially the ECC issued by DENR-EMB RVI. [108] Respondent PRA stresses that its earlier
approval of the 40-hectare reclamation project under its Resolution No. 4094, series of 2010, still
requires a second level of compliance requirements from the proponent. Respondent Province
could not possibly begin its reclamation works since respondent PRA had yet to issue an NTP in
its favor.

In fact, respondent PRA further required respondent Province under Article IV (B)(24) of
the MOA to strictly comply with all conditions of the DENR-EMB-issued ECC and/or comply with
pertinent local and international commitments of the Republic of the Philippines to ensure
environmental protection.

[105]

Respondent PRA alleges that prior to the issuance of the NTP to respondent Province for
Phase 1 of Site 1, it required the submission of the following pre-construction documents:

(a) Land-Form Plan (with technical description);

(b) Site Development Plan/Land Use Plan including,

(i) sewer and drainage systems and

(ii) waste water treatment;

In its Comment[112] dated July 1, 2011, respondent DENR-EMB RVI asserts that its act of

(c) Engineering Studies and Engineering Design;

issuing the ECC certifies that the project had undergone the proper EIA process by assessing,
among others, the direct and indirect impact of the project on the biophysical and human
(d) Reclamation Methodology;

environment and ensuring that these impacts are addressed by appropriate environmental
protection and enhancement measures, pursuant to Presidential Decree No. 1586, the Revised

(e) Sources of Fill Materials, and,

Procedural Manual for DENR DAO 2003-30, and the existing rules and regulations.[113]

(f) The ECC.[109]

Respondent DENR-EMB RVI stresses that the declaration in 1978 of several islands,
which includes Boracay as tourist zone and marine reserve under Proclamation No. 1801, has
no relevance to the expansion project of Caticlan Jetty Port and Passenger Terminal for the very
Respondent PRA claims that it was only after the evaluation of the above submissions

reason that the project is not located in the Island of Boracay, being located in Barangay

that it issued to respondent Province the NTP, limited to the 2.64-hectare reclamation

Caticlan, Malay, which is not a part of mainland Panay. It admits that the site of the subject jetty

project. Respondent PRA even emphasized in its evaluation report that should respondent

port falls within the ECA under Proclamation No. 2146 (1981), being within the category of a

Province pursue the other phases of its project, it would still require the submission of an ECC

water body. This was why respondent Province had faithfully secured an ECC pursuant to the

for each succeeding phases before the start of any reclamation works.

[110]

Revised Procedural Manual for DENR DAO 2003-30 by submitting the necessary documents as
contained in the EPRMP on March 19, 2010, which were the bases in granting ECC No. R61003-096-7100 (amended) on April 27, 2010 for the expansion of Caticlan Jetty Port and

Respondent PRA, being the national governments arm in regulating and coordinating all

Passenger Terminal, covering 2.64 hectares.[114]

reclamation projects in the Philippines a mandate conferred by law manifests that it is

incumbent upon it, in the exercise of its regulatory functions, to diligently evaluate, based on its
technical competencies, all reclamation projects submitted to it for approval. Once the

Respondent DENR-EMB RVI claims that the issues raised by the LGUs of Caticlan and

reclamation projects requirements set forth by law and related rules have been complied with,

Malay had been considered by the DENR-Provincial Environment and Natural Resources Office

respondent PRA is mandated to approve the same. Respondent PRA claims, [w]ith all the

(PENRO), Aklan in the issuance of the Order[115] dated January 26, 2010, disregarding the claim

foregoing rigorous and detailed requirements submitted and complied with by Aklan, and the

of the Municipality of Malay, Aklan of a portion of the foreshore land in Caticlan covered by the

attendant careful and meticulous technical and legal evaluation by respondent PRA, it cannot be

application of the Province of Aklan; and another Order of Rejection dated February 5, 2010 of

argued that the reclamation permit it issued to Aklan is founded upon numerous irregularities;

the two foreshore applications, namely FLA No. 060412-43A and FLA No. 060412-43B, of the

as recklessly and baselessly imputed by BFI.

[111]

Province of Aklan.[116]

a.

The Observations on the Floor Bottom and its Marine Resources at

the Proposed Jetty Ports at Caticlan and Manok-manok, Boracay,
Aklan, conducted in 1999 by the Bureau of Fisheries Aquatic
Resources (BFAR) Central Office, particularly in Caticlan site, and

b.

The Study conducted by Dr. Ricarte S. Javelosa, Ph. D, Mines and

Geosciences Bureau (MGB), Central Office and Engr. Roger Esto,
Provincial Planning and Development Office (PPDO), Aklan in 2009
entitled Preliminary Geo-hazard Assessment for the Enhancement of
the Existing Caticlan Jetty Port Terminal through Beach Zone
Restoration and Protective Marina Development in Malay, Aklan.

Respondent DENR-EMB RVI contends that the supporting documents attached to the
EPRMP for the issuance of an ECC were merely for the expansion and modernization of the old
jetty port in Barangay Caticlan covering 2.64 hectares, and not the 40-hectare reclamation
project in Barangay Caticlan and Boracay. The previous letter of respondent Province dated
October 14, 2009 addressed to DENR-EMB RVI Regional Executive Director, would show that
the reclamation project will cover approximately 2.6 hectares. [117] This application for ECC was
not officially accepted due to lack of requirements or documents.

Although petitioner insists that the project involves 40 hectares in two sites,
respondent DENR-EMB RVI looked at the documents submitted by respondent Province and

Respondent DENR-EMB RVI claims that the above two scientific studies were enough

saw that the subject area covered by the ECC application and subsequently granted with ECC-

for it to arrive at a best professional judgment to issue an amended ECC for the Aklan Marina

R6-1003-096-7100 consists only of 2.64 hectares; hence, respondent DENR-EMB RVI could not

Project covering 2.64 hectares.[120] Furthermore, to confirm that the 2.64-hectare reclamation

comment on the excess area.[118]

has no significant negative impact with the surrounding environment particularly in Boracay, a
more recent study was conducted, and respondent DENR-EMB RVI alleges that [i]t is very
important to highlight that the input data in the [MERF- UPMSI] study utilized the [40-hectare]
reclamation and [200-meter] width seaward using the tidal and wave modelling. [121] The study

Respondent DENR-EMB RVI admits that as regards the classification of the

2.64-hectare reclamation project under Non ECP in ECA, this does not fall within the

showed that the reclamation of 2.64 hectares had no effect to the hydrodynamics of the strait
between Barangay Caticlan and Boracay.

definition of a co-located project because the subject project is merely an expansion of

the old Caticlan Jetty Port, which had a previously issued ECC (ECC No. 0699-1012-171
on October 12, 1999). Thus, only an EPRMP, not a PEIS or PEPRMP, is required.[119]
Respondent DENR-EMB RVI affirms that no permits and/or clearances from National
Government Agencies (NGAs) and LGUs are required pursuant to the DENR Memorandum
Circular No. 2007-08, entitled Simplifying the Requirements of ECC or CNC Applications; that
Respondent Province submitted to respondent DENR-EMB RVI the following
documents contained in the EPRMP:

the EPRMP was evaluated and processed based on the Revised Procedural Manual for DENR
DAO 2003-30 which resulted to the issuance of ECC-R6-1003-096-7100; and that the ECC is

not a permit per se but a planning tool for LGUs to consider in its decision whether or not to
issue a local permit.[122]

Respondent DENR-EMB RVI concludes that in filing this case, petitioner had

Confirming this in a letter dated 12 August 2011,[126] Governor

Marquez informed respondent PRA that the Province of Aklan is no longer
pursuing the implementation of the succeeding phases of the project with a
total area of 37.4 hectares for our inability to comply with Article IV B.2 (3) of
the MOA; hence, the existing MOA will cover only the project area of 2.64
hectares.

bypassed and deprived the DENR Secretary of the opportunity to review and/or reverse the
decision of his subordinate office, EMB RVI pursuant to the Revised Procedural Manual for
DENR DAO 2003-30. There is no extreme urgency that necessitates the granting of
Mandamus or issuance of TEPO that put to balance between the life and death of the petitioner
or present grave or irreparable damage to environment.[123]

After receiving the above Comments from all the respondents, the Court set the case
for oral arguments on September 13, 2011.

In his reply-letter dated August 22, 2011,[127] [respondent] PRA

General Manager informed Governor Marquez that the [respondent]
PRA Board of Directors has given [respondent] PRA the authority to
confirm the position of the Province of Aklan that the Aklan Beach
Zone Restoration and Protection Marine Development Project will now
be confined to the reclamation and development of the 2.64 hectares,
more or less.

It is undisputed from the start that the coverage of the Project is in

fact limited to 2.64 hectares, as evidenced by the NTP issued by respondent
PRA. The recent exchange of correspondence between respondents
Province of Aklan and [respondent] PRA further confirms the intent of the
parties all along. Hence, the Project subject of the petition, without doubt,
covers only 2.64 and not 40 hectares as feared. This completely changes
the extent of the Project and, consequently, moots the issues and fears
expressed by the petitioner.[128] (Emphasis supplied.)

Meanwhile, on September 8, 2011, respondent Province filed a Manifestation and

Motion[124] praying for the dismissal of the petition, as the province was no longer pursuing the
implementation of the succeeding phases of the project due to its inability to comply with Article
IV B.2(3) of the MOA; hence, the issues and fears expressed by petitioner had become
moot. Respondent Province alleges that the petition is premised on a serious misappreciation
of the real extent of the contested reclamation project as certainly the ECC covered only a total

Based on the above contentions, respondent Province prays that the petition be
dismissed as no further justiciable controversy exists since the feared adverse effect to Boracay
Islands ecology had become academic all together.[129]

of 2,691 square meters located in Barangay Caticlan, Malay, Aklan; and although the MOA
spoke of 40 hectares, respondent Provinces submission of documents to respondent PRA
pertaining to said area was but the first of a two-step process of approval. Respondent Province
claims that its failure to comply with the documentary requirements of respondent PRA within the
period provided, or 120 working days from the effectivity of the MOA, indicated its waiver to
pursue the remainder of the project.[125] Respondent Province further manifested:

The Court heard the parties oral arguments on September 13, 2011 and gave the
latter twenty (20) days thereafter to file their respective memoranda.

Respondent Province filed another Manifestation and Motion,[130] which the Court
received on April 2, 2012 stating that:

Respondent Province claims that its compliance with the requirements of respondents
DENR-EMB RVI and PRA that led to the approval of the reclamation project by the said
government agencies, as well as the recent enactments of the Barangay Council of Caticlan and
the Sangguniang Bayan of the Municipality of Malay favorably endorsing the said project, had

1.

it had submitted the required documents and studies to respondent

DENR-EMB RVI before an ECC was issued in its favor;

2.

2011. Respondent Province prays as follows:

it had substantially complied with the requirements provided under PRA

Administrative Order 2007-2, which compliance caused respondent PRAs
Board to approve the reclamation project; and

3.

categorically addressed all the issues raised by the Petitioner in its Petition dated June 1,

WHEREFORE, premises considered, it is most respectfully

prayed of this Honorable Court that after due proceedings, the following be
rendered:

it had conducted a series of consultative [presentations] relative to the

reclamation project before the LGU of Malay Municipality, the Barangay

1.

The Temporary Environmental Protection Order (TEPO) it

issued on June 7, 2011 be lifted/dissolved.

2.

The instant petition be dismissed for being moot and

academic.

3.

Respondent Province of Aklan prays for such other reliefs

that are just and equitable under the premises. (Emphases
in the original.)

Officials of Caticlan, and stakeholders of Boracay Island.

Respondent Province further manifested that the Barangay Council of Caticlan,

Malay, Aklan enacted on February 13, 2012 Resolution No. 003, series of 2012, entitled
Resolution Favorably Endorsing the 2.6 Hectares Reclamation/MARINA Project of the Aklan
Provincial Government at Caticlan Coastline[131] and that the Sangguniang Bayan of the
ISSUES

Municipality of Malay, Aklan enacted Resolution No. 020, series of 2012, entitled Resolution
Endorsing the 2.6 Hectares Reclamation Project of the Provincial Government of Aklan Located
at Barangay Caticlan, Malay, Aklan.[132]

The Court will now resolve the following issues:

I.

Whether or not the petition should be dismissed for having been

rendered moot and academic

II.

Whether or not the petition is premature because petitioner failed to

exhaust administrative remedies before filing this case

to
III.

Whether or not respondent Province failed to perform a full EIA as required

by laws and regulations based on the scope and classification of the project

be

constructed

shall

be

subject

for barangay endorsement.[133] Clearly,

what

the barangay endorsed was the reclamation only, and not the entire project that includes the
construction of a commercial building and wellness center, and other tourism-related
facilities. Petitioners objections, as may be recalled, pertain not only to the reclamation per se,

IV.

V.

Whether or not respondent Province complied with all the requirements

under the pertinent laws and regulations

Whether or not there was proper, timely, and sufficient public consultation
for the project
DISCUSSION

On the issue of whether or not

the Petition should be dismissed
for having been rendered moot
and academic

Respondent Province claims in its Manifestation and Motion filed on April 2, 2012 that
with the alleged favorable endorsement of the reclamation project by theSangguniang
Barangay of Caticlan and the Sangguniang Bayan of the Municipality of Malay, all the issues
raised by petitioner had already been addressed, and this petition should be dismissed for being
moot and academic.

On the contrary, a close reading of the two LGUs respective resolutions would reveal
that they are not sufficient to render the petition moot and academic, as there are explicit
conditions imposed that must be complied with by respondent Province. In Resolution No. 003,
series of 2012, of the Sangguniang Barangay of Caticlan it is stated thatany vertical structures

but also to the building to be constructed and the entire projects perceived ill effects to the
surrounding environment.

Resolution No. 020, series of 2012, of the Sangguniang Bayan of Malay[134] is even
more specific. It reads in part:

WHEREAS, noble it seems the reclamation project to the effect

that it will generate scores of benefits for the Local Government of Malay in
terms of income and employment for its constituents, but the fact cannot be
denied that the project will take its toll on the environment especially
on the nearby fragile island of Boracay and the fact also remains that
the project will eventually displace the local transportation
operators/cooperatives;

WHEREAS, considering the sensitivity of the project, this

Honorable Body through the Committee where this matter was referred
conducted several consultations/committee hearings with concerned
departments and the private sector specifically Boracay Foundation, Inc.
and they are one in its belief that this Local Government Unit has never
been against development so long as compliance with the law and
proper procedures have been observed and that paramount
consideration have been given to the environment lest we disturb the
balance of nature to the end that progress will be brought to naught;

WHEREAS, time
and
again,
to
ensure
a
healthy
intergovernmental relations, this August Body requires no less than
transparency and faithful commitment from the Provincial Government of
Aklan in the process of going through these improvements in the
Municipality because it once fell prey to infidelities in matters of governance;

WHEREAS, as a condition for the grant of this endorsement

and to address all issues and concerns, this Honorable Council
necessitates a sincere commitment from the Provincial Government of
Aklan to the end that:

reclamation project, which is the heart of the petition before us. Therefore, the contents of the
two resolutions submitted by respondent Province do not support its conclusion that the
subsequent favorable endorsement of the LGUs had already addressed all the issues raised
and rendered the instant petition moot and academic.

1.

To allocate an office space to LGU-Malay within the building in

the reclaimed area;

2.

To convene the Cagban and Caticlan Jetty Port Management

Board before the resumption of the reclamation project;

3.

That the reclamation project shall be limited only to 2.6 hectares

in Barangay Caticlan and not beyond;

On the issue of failure to

exhaust administrative remedies

Respondents, in essence, argue that the present petition should be dismissed for
petitioners failure to exhaust administrative remedies and even to observe the hierarchy of
courts. Furthermore, as the petition questions the issuance of the ECC and the NTP, this
involves factual and technical verification, which are more properly within the expertise of the

4.

That the local transportation operators/cooperatives will not be

displaced; and

5.

The Provincial Government of Aklan conduct a simultaneous

comprehensive study on the environmental impact of the
reclamation project especially during Habagat and Amihan
seasons and put in place as early as possible mitigating
measures on the effect of the project to the environment.

concerned government agencies.

Respondents anchor their argument on Section 6, Article II of DENR DAO 2003-30, which
provides:

Section 6. Appeal
WHEREAS, having presented these stipulations, failure to
comply herewith will leave this August Body no choice but to revoke
this endorsement, hence faithful compliance of the commitment of the
Provincial Government is highly appealed for[.][135] (Emphases added.)

Any party aggrieved by the final decision on the ECC / CNC

applications may, within 15 days from receipt of such decision, file an
appeal on the following grounds:

conditions for

a.

Grave abuse of discretion on the part of the deciding authority, or

respondent Province to comply with on pain of revocation of its endorsement of the project,

b.

Serious errors in the review findings.

The Sangguniang

Bayan of

Malay obviously imposed

explicit

including the need to conduct a comprehensive study on the environmental impact of the

The DENR may adopt alternative conflict/dispute resolution procedures as a

means to settle grievances between proponents and aggrieved parties to
avert unnecessary legal action. Frivolous appeals shall not be
countenanced.

urgency of judicial intervention, - Gonzales vs. Hechanova, L-21897,

October 22, 1963, 9 SCRA 230; Abaya vs. Villegas, L-25641, December 17,
1966, 18 SCRA; Mitra vs. Subido, L-21691, September 15, 1967, 21 SCRA
127.

The proponent or any stakeholder may file an appeal to the following:

Said principle may also be disregarded when it does not

provide a plain, speedy and adequate remedy, (Cipriano vs. Marcelino,
43 SCRA 291), when there is no due process observed (Villanos vs. Subido,
45 SCRA 299), or where the protestant has no other recourse (Sta.
Maria vs. Lopez, 31 SCRA 637).[137] (Emphases supplied.)

Deciding Authority

Where to file the appeal

EMB Regional Office Director

Office of the EMB Director

EMB Central Office Director

Office of the DENR Secretary

DENR Secretary

Office of the President

As petitioner correctly pointed out, the appeal provided for under Section 6 of DENR

(Emphases supplied.)

DAO 2003-30 is only applicable, based on the first sentence thereof, if the person or entity
charged with the duty to exhaust the administrative remedy of appeal to the appropriate
government agency has been a party or has been made a party in the proceedings wherein the

Respondents argue that since there is an administrative appeal provided for, then
petitioner is duty bound to observe the same and may not be granted recourse to the regular
courts for its failure to do so.

decision to be appealed was rendered. It has been established by the facts that petitioner
was never made a party to the proceedings before respondent DENR-EMB RVI. Petitioner
was only informed that the project had already been approved after the ECC was already
granted.[138] Not being a party to the said proceedings, it does not appear that petitioner was
officially furnished a copy of the decision, from which the 15-day period to appeal should be
reckoned, and which would warrant the application of Section 6, Article II of DENR DAO 2003-

We do not agree with respondents appreciation of the applicability of the rule on

30.

exhaustion of administrative remedies in this case. We are reminded of our ruling inPagara v.
Court of Appeals,[136] which summarized our earlier decisions on the procedural requirement of
exhaustion of administrative remedies, to wit:
Although petitioner was not a party to the proceedings where the decision to issue an
ECC was rendered, it stands to be aggrieved by the decision, [139] because it claims that the
The rule regarding exhaustion of administrative remedies is not
a hard and fast rule. It is not applicable (1) where the question in dispute
is purely a legal one, or (2) where the controverted act is patently illegal or
was performed without jurisdiction or in excess of jurisdiction; or (3) where
the respondent is a department secretary, whose acts as an alter ego of the
President bear the implied or assumed approval of the latter, unless actually
disapproved by him, or (4) where there are circumstances indicating the

reclamation of land on the Caticlan side would unavoidably adversely affect the Boracay side,
where petitioners members own establishments engaged in the tourism trade. As noted earlier,
petitioner contends that the declared objective of the reclamation project is to exploit Boracays
tourism trade because the project is intended to enhance support services thereto; however, this
objective would not be achieved since the white-sand beaches for which Boracay is famous

might be negatively affected by the project. Petitioners conclusion is that respondent Province,

reports from the respondent government agencies as well as avail of other means to monitor

aided and abetted by respondents PRA and DENR-EMB RVI, ignored the spirit and letter of our

compliance with its decision.[143]

environmental laws, and should thus be compelled to perform their duties under said laws.

According to petitioner, respondent Province acted pursuant to a MOA with

The new Rules of Procedure for Environmental Cases, A.M. No. 09-6-8-SC, provides

respondent PRA that was conditioned upon, among others, a properly-secured ECC from

a relief for petitioner under the writ of continuing mandamus, which is a special civil action that

respondent DENR-EMB RVI. For this reason, petitioner seeks to compel respondent Province

may be availed of to compel the performance of an act specifically enjoined by law [140] and

to comply with certain environmental laws, rules, and procedures that it claims were either

which provides for the issuance of a TEPO as an auxiliary remedy prior to the issuance of the

circumvented or ignored. Hence, we find that the petition was appropriately filed with this Court

writ itself.[141] The Rationale of the said Rules explains the writ in this wise:

under Rule 8, Section 1, A.M. No. 09-6-8-SC, which reads:

Environmental law highlights the shift in the focal-point from the

initiation of regulation by Congress to the implementation of regulatory
programs by the appropriate government agencies.

Thus, a government agencys inaction, if any, has serious

implications on the future of environmental law enforcement. Private
individuals, to the extent that they seek to change the scope of the
regulatory process, will have to rely on such agencies to take the
initial incentives, which may require a judicial component.
Accordingly, questions regarding the propriety of an agencys action
or inaction will need to be analyzed.

This point is emphasized in the availability of the remedy of the

writ of mandamus, which allows for the enforcement of the conduct of the
tasks to which the writ pertains: the performance of a legal duty.
[142]
(Emphases added.)

The writ of continuing mandamus permits the court to retain jurisdiction after
judgment in order to ensure the successful implementation of the reliefs mandated under the
courts decision and, in order to do this, the court may compel the submission of compliance

SECTION 1. Petition for continuing mandamus.When any

agency or instrumentality of the government or officer thereof unlawfully
neglects the performance of an act which the law specifically enjoins as a
duty resulting from an office, trust or station in connection with the
enforcement or violation of an environmental law rule or regulation or a right
therein, or unlawfully excludes another from the use or enjoyment of such
right 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, attaching thereto
supporting evidence, specifying that the petition concerns an environmental
law, rule or regulation, and praying that judgment be rendered commanding
the respondent to do an act or series of acts until the judgment is fully
satisfied, and to pay damages sustained by the petitioner by reason of the
malicious neglect to perform the duties of the respondent, under the law,
rules or regulations. The petition shall also contain a sworn certification of
non-forum shopping.

SECTION 2. Where to file the petition.The petition shall be filed

with the Regional Trial Court exercising jurisdiction over the territory where
the actionable neglect or omission occurred or with the Court of Appeals or
the Supreme Court.

Petitioner had three options where to file this case under the rule: the Regional Trial
Court exercising jurisdiction over the territory where the actionable neglect or omission occurred,

previous project in 1999 and claiming that the new project is a mere expansion of the previous
one.

the Court of Appeals, or this Court.

As previously discussed, respondent Province filed a Manifestation and Motion stating

Petitioner had no other plain, speedy, or adequate remedy in the ordinary course of

that the ECC issued by respondent DENR-EMB RVI covered an area of 2,691 square meters in

law to determine the questions of unique national and local importance raised here that pertain

Caticlan, and its application for reclamation of 40 hectares with respondent PRA was

to laws and rules for environmental protection, thus it was justified in coming to this Court.

conditioned on its submission of specific documents within 120 days. Respondent Province
claims that its failure to comply with said condition indicated its waiver to pursue the succeeding
phases of the reclamation project and that the subject matter of this case had thus been limited

Having resolved the procedural issue, we now move to the substantive issues.

to 2.64 hectares. Respondent PRA, for its part, declared through its General Manager that the
Aklan Beach Zone Restoration and Protection Marine Development Project will now be
confined to the reclamation and development of the 2.64 hectares, more or less.[144]

On the issues of whether, based

on the scope and classification
of the project, a full EIA is
required
by
laws
and
regulations,
and
whether
respondent Province complied
with all the requirements under
the
pertinent
laws
and
regulations

The Court notes such manifestation of respondent Province. Assuming, however, that
the area involved in the subject reclamation project has been limited to 2.64 hectares, this case
has not become moot and academic, as alleged by respondents, because the Court still has to
check whether respondents had complied with all applicable environmental laws, rules, and
regulations pertaining to the actual reclamation project.

Petitioners arguments on this issue hinges upon its claim that the reclamation project
is misclassified as a single project when in fact it is co-located. Petitioner also questions the
classification made by respondent Province that the reclamation project is merely an expansion
of the existing jetty port, when the project descriptions embodied in the different documents filed
by respondent Province describe commercial establishments to be built, among others, to raise
revenues for the LGU; thus, it should have been classified as a new project. Petitioner likewise
cries foul to the manner by which respondent Province allegedly circumvented the documentary
requirements of the DENR-EMB RVI by the act of connecting the reclamation project with its

We recognize at this point that the DENR is the government agency vested with
delegated powers to review and evaluate all EIA reports, and to grant or deny ECCs to project
proponents.[145] It is the DENR that has the duty to implement the EIS system. It appears,
however, that respondent DENR-EMB RVIs evaluation of this reclamation project was
problematic, based on the valid questions raised by petitioner.

Being the administrator of the EIS System, respondent DENR-EMB RVIs submissions
bear great weight in this case. However, the following are the issues that put in question the

rigorous environmental impact study requested by petitioner, or it is a mere expansion of the

existing jetty port facility.

wisdom of respondent DENR-EMB RVI in issuing the ECC:

The second issue refers to the classification of the project by respondent Province,
1.

Its approval of respondent Provinces classification of the project as a mere

approved by respondent DENR-EMB RVI, as single instead of co-located. Under the Revised

expansion of the existing jetty port in Caticlan, instead of classifying it as

Procedural Manual, the Summary List of Additional Non-Environmentally-Critical Project

a new project;

(NECP) Types in ECAs Classified under Group II (Table I-2) lists buildings, storage facilities
and other structures as a separate item from transport terminal facilities. This creates the

2.

Its classification of the reclamation project as a single instead of a co-

question of whether this project should be considered as consisting of more than one type of

located project;

activity, and should more properly be classified as co-located, under the following definition
from the same Manual, which reads:

3.

The lack of prior public consultations and approval of local government

agencies; and
f)

4.

The lack of comprehensive studies regarding the impact of the reclamation

project to the environment.

The above issues as raised put in question the sufficiency of the evaluation of the

Group IV (Co-located Projects in either ECA or NECA): A colocated project is a group of single projects, under one or
more proponents/locators, which are located in a contiguous
area and managed by one administrator, who is also the ECC
applicant. The co-located project may be an economic zone or
industrial park, or a mix of projects within a catchment, watershed
or river basin, or any other geographical, political or economic unit
of area. Since the location or threshold of specific projects within
the contiguous area will yet be derived from the EIA process
based on the carrying capacity of the project environment, the
nature of the project is called programmatic. (Emphasis added.)

project by respondent DENR-EMB RVI.

Nature of the project

Respondent DENR-EMB RVI should conduct a thorough and detailed evaluation of

the project to address the question of whether this could be deemed as a group of single
projects (transport terminal facility, building, etc.) in a contiguous area managed by respondent
Province, or as a single project.

The first question must be answered by respondent DENR-EMB RVI as the agency
with the expertise and authority to state whether this is a new project, subject to the more

The third item in the above enumeration will be discussed as a separate issue.

The answer to the fourth question depends on the final classification of the project

The expansion project will be constructed at the north side of the

existing jetty port and terminal that will have a total area of 2.64 hectares,
more or less, after reclamation. The Phase 1 of the project construction
costing around P260 million includes the following:

under items 1 and 3 above because the type of EIA study required under the Revised
Procedural Manual depends on such classification.

1.

Reclamation

- 3,000 sq m (expansion of jetty port)

2.

Reclamation

- 13,500 sq m (buildable area)

3.

Terminal annex building

4.

2-storey commercial building 2,500 sq m (1,750 sq m

of leasable space)

5.

Health and wellness center

6.

Access road

7.

Parking, perimeter fences, lighting and water treatment

sewerage system

8.

Rehabilitation of existing jetty port and terminal

The very definition of an EIA points to what was most likely neglected by respondent
Province as project proponent, and what was in turn overlooked by respondent DENR-EMB RVI,

- 250 sq m

for it is defined as follows:

An [EIA] is a process that involves predicting and evaluating the likely

impacts of a project (including cumulative impacts) on the environment during
construction, commissioning, operation and abandonment. It also includes designing
appropriate preventive, mitigating and enhancement measures addressing these
consequences to protect the environment and the communitys welfare.[146] (Emphases
supplied.)

Thus, the EIA process must have been able to predict the likely impact of the
reclamation project to the environment and to prevent any harm that may otherwise be caused.

The project now before us involves reclamation of land that is more than five times
the size of the original reclaimed land. Furthermore, the area prior to construction merely
contained a jetty port, whereas the proposed expansion, as described in the EPRMP submitted
by respondent Province to respondent DENR-EMB RVI involves so much more, and we quote:

xxxx

- 12 m (wide)

The succeeding phases of the project will consist of [further] reclamation,

completion of the commercial center building, bay walk commercial strip,
staff building, ferry terminal, a cable car system and wharf marina. This will
entail an additional estimated cost of P785 million bringing the total
investment requirement to about P1.0 billion.[147] (Emphases added.)

As may be gleaned from the breakdown of the 2.64 hectares as described by respondent

Section 15 of Republic Act 7160, otherwise known as the Local

Government Code, defines a local government unit as a body politic and
corporate endowed with powers to be exercised by it in conformity with
law. As such, it performs dual functions, governmental and proprietary.
Governmental functions are those that concern the health, safety and the
advancement of the public good or welfare as affecting the public generally.
Proprietary functions are those that seek to obtain special corporate benefits
or earn pecuniary profit and intended for private advantage and benefit.
When exercising governmental powers and performing governmental duties,
an LGU is an agency of the national government. When engaged in
corporate activities, it acts as an agent of the community in the
administration of local affairs.

Province above, a significant portion of the reclaimed area would be devoted to the construction
of a commercial building, and the area to be utilized for the expansion of the jetty port consists of
a mere 3,000 square meters (sq. m). To be true to its definition, the EIA report submitted by
respondent Province should at the very least predict the impact that the construction of the new
buildings on the reclaimed land would have on the surrounding environment. These new
constructions and their environmental effects were not covered by the old studies that

Found in Section 16 of the Local Government Code is the

duty of the LGUs to promote the peoples right to a balanced
ecology. Pursuant to this, an LGU, like the City of Davao, can not claim
exemption from the coverage of PD 1586. As a body politic endowed with
governmental functions, an LGU has the duty to ensure the quality of the
environment, which is the very same objective of PD 1586.

respondent Province previously submitted for the construction of the original jetty port in 1999,
and which it re-submitted in its application for ECC in this alleged expansion, instead of
conducting updated and more comprehensive studies.

Any impact on the Boracay side cannot be totally ignored, as Caticlan and Boracay
are separated only by a narrow strait. This becomes more imperative because of the significant
contributions of Boracays white-sand beach to the countrys tourism trade, which requires
respondent Province to proceed with utmost caution in implementing projects within its

xxxx

Section 4 of PD 1586 clearly states that no person, partnership or

corporation shall undertake or operate any such declared environmentally
critical project or area without first securing an Environmental Compliance
Certificate issued by the President or his duly authorized representative.
The Civil Code defines a person as either natural or juridical. The state and
its political subdivisions, i.e., the local government units are juridical
persons. Undoubtedly therefore, local government units are not
excluded from the coverage of PD 1586.

vicinity.

We had occasion to emphasize the duty of local government units to ensure the
quality of the environment under Presidential Decree No. 1586 in Republic of the Philippines v.
The City of Davao,[148] wherein we held:

Lastly, very clear in Section 1 of PD 1586 that said law intends to

implement the policy of the state to achieve a balance between socioeconomic development and environmental protection, which are the twin
goals of sustainable development. The above-quoted first paragraph of the
Whereas clause stresses that this can only be possible if we adopt a
comprehensive
and integrated environmental protection program where
all
the
sectors of the community are involved, i.e., the government and the
private sectors. The local government units, as part of the machinery

of the government, cannot therefore be deemed as outside the scope

of the EIS system.[149] (Emphases supplied.)

national government institution which is tasked with the issuance of the ECC that is a
prerequisite to projects covered by environmental laws such as the one at bar.

This project can be classified as a national project that affects the environmental and
The Court chooses to remand these matters to respondent DENR-EMB RVI for it to
make a proper study, and if it should find necessary, to require respondent Province to address

ecological balance of local communities, and is covered by the requirements found in the Local
Government Code provisions that are quoted below:

these environmental issues raised by petitioner and submit the correct EIA report as required by
the projects specifications. The Court requires respondent DENR-EMB RVI to complete its
study and submit a report within a non-extendible period of three months. Respondent DENR-

Section 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.

EMB RVI should establish to the Court in said report why the ECC it issued for the subject
project should not be canceled.

Lack of prior public consultation

The Local Government Code establishes the duties of national government agencies

Section 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.

in the maintenance of ecological balance, and requires them to secure prior public consultation
and approval of local government units for the projects described therein.

In the case before us, the national agency involved is respondent PRA. Even if the
project proponent is the local government of Aklan, it is respondent PRA which authorized the
reclamation, being the exclusive agency of the government to undertake reclamation
nationwide. Hence, it was necessary for respondent Province to go through respondent PRA
and to execute a MOA, wherein respondent PRAs authority to reclaim was delegated to
respondent Province. Respondent DENR-EMB RVI, regional office of the DENR, is also a

In Lina, Jr. v. Pao,[150] we held that Section 27 of the Local Government Code applies
only to national programs and/or projects which are to be implemented in a particular local
community[151] and that it should be read in conjunction with Section 26. We held further in this
manner:

(1)

Approving ordinances and passing resolutions to protect

the environment and impose appropriate penalties for
acts which endanger the environment, such as
dynamite fishing and other forms of destructive fishing,
illegal logging and smuggling of logs, smuggling of
natural resources products and of endangered species
of flora and fauna, slash and burn farming, and such
other activities which result in pollution, acceleration of
eutrophication of rivers and lakes, or of ecological
imbalance; [Section 447 (1)(vi)]

(2)

Prescribing reasonable limits and restraints on the use of

property
within
the
jurisdiction
of
the
municipality, adopting a comprehensive land use plan
for the municipality, reclassifying land within the
jurisdiction of the city, subject to the pertinent provisions
of this Code, enacting integrated zoning ordinances in
consonance with the approved comprehensive land use
plan, subject to existing laws, rules and regulations;
establishing fire limits or zones, particularly in populous
centers; and regulating the construction, repair or
modification of buildings within said fire limits or zones
in accordance with the provisions of this Code; [Section
447 (2)(vi-ix)]

(3)

Approving ordinances which shall ensure the efficient and

effective delivery of the basic services and facilities as
provided for under Section 17 of this Code, and in
addition to said services and facilities, providing for
the establishment, maintenance, protection, and
conservation of communal forests and watersheds, tree
parks, greenbelts, mangroves, and other similar forest
development projects and, subject to existing laws,
establishing and providing for the maintenance, repair
and operation of an efficient waterworks system to
supply water for the inhabitants and purifying the
source of the water supply; regulating the construction,
maintenance, repair and use of hydrants, pumps,
cisterns and reservoirs; protecting the purity and
quantity of the water supply of the municipality and, for
this purpose, extending the coverage of appropriate
ordinances over all territory within the drainage area of
said water supply and within one hundred (100) meters
of the reservoir, conduit, canal, aqueduct, pumping
station, or watershed used in connection with the water
service; and regulating the consumption, use or
wastage of water. [Section 447 (5)(i) & (vii)]

Thus, the projects and programs mentioned in Section 27 should

be interpreted to mean projects and programs whose effects are among
those enumerated in Section 26 and 27, to wit, those that: (1) may cause
pollution; (2) may bring about climatic change; (3) may cause the depletion
of non-renewable resources; (4) may result in loss of crop land, range-land,
or forest cover; (5) may eradicate certain animal or plant species from the
face of the planet; and (6) other projects or programs that may call for the
eviction of a particular group of people residing in the locality where these
will be implemented. Obviously, none of these effects will be produced by
the introduction of lotto in the province of Laguna.[152] (Emphasis added.)

During the oral arguments held on September 13, 2011, it was established that this
project as described above falls under Section 26 because the commercial establishments to be
built on phase 1, as described in the EPRMP quoted above, could cause pollution as it could
generate garbage, sewage, and possible toxic fuel discharge.[153]

Our ruling in Province of Rizal v. Executive Secretary[154] is instructive:

We reiterated this doctrine in the recent case of Bangus Fry

Fisherfolk v. Lanzanas, where we held that there was no statutory
requirement for the sangguniang bayan of Puerto Galera to approve the
construction of a mooring facility, as Sections 26 and 27 are inapplicable to
projects which are not environmentally critical.

Moreover, Section 447, which enumerates the powers, duties and

functions of the municipality, grants the sangguniang bayan the power to,
among other things, enact ordinances, approve resolutions and appropriate
funds for the general welfare of the municipality and its inhabitants pursuant
to Section 16 of th(e) Code. These include:

Under the Local Government Code, therefore, two requisites

must be met before a national project that affects the environmental
and ecological balance of local communities can be implemented:
prior consultation with the affected local communities, and
prior approval of the project by the appropriate sanggunian. Absent
either of these mandatory requirements, the projects implementation
is illegal.[155] (Emphasis added.)

Based on the above, therefore, prior consultations and prior approval are
required

by

law

to

have

been

conducted

and

secured

by

the

Proponents should initiate public consultations early in order

to ensure that environmentally relevant concerns of
stakeholders are taken into consideration in the EIA study
and the formulation of the management plan. All public
consultations and public hearings conducted during the EIA
process are to be documented. The public hearing/consultation
Process report shall be validated by the EMB/EMB RD and shall
constitute part of the records of the EIA process. (Emphasis
supplied.)

In essence, the above-quoted rule shows that in cases requiring public consultations, the same

respondent

should be initiated early so that concerns of stakeholders could be taken into consideration in

Province. Accordingly, the information dissemination conducted months after the ECC had

the EIA study. In this case, respondent Province had already filed its ECC application before it

already been issued was insufficient to comply with this requirement under the Local

met with the local government units of Malay and Caticlan.

Government Code. Had they been conducted properly, the prior public consultation should have
considered the ecological or environmental concerns of the stakeholders and studied measures
alternative to the project, to avoid or minimize adverse environmental impact or damage. In fact,

The claim of respondent DENR-EMB RVI is that no permits and/or clearances from

respondent Province once tried to obtain the favorable endorsement of theSangguniang

National Government Agencies (NGAs) and LGUs are required pursuant to the DENR

Bayan of Malay, but this was denied by the latter.

Memorandum Circular No. 2007-08. However, we still find that the LGC requirements of
consultation and approval apply in this case. This is because a Memorandum Circular cannot
prevail over the Local Government Code, which is a statute and which enjoys greater weight

Moreover, DENR DAO 2003-30 provides:

5.3

Public Hearing / Consultation Requirements

under our hierarchy of laws.

Subsequent to the information campaign of respondent Province, the Municipality of

Malay and the Liga ng mga Barangay-Malay Chapter still opposed the project. Thus, when

For projects under Category A-1, the conduct of public hearing as

part of the EIS review is mandatory unless otherwise determined
by EMB. For all other undertakings, a public hearing is not
mandatory unless specifically required by EMB.

respondent Province commenced the implementation project, it violated Section 27 of the LGC,
which clearly enunciates that [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.

The lack of prior public consultation and approval is not corrected by the subsequent
endorsement of the reclamation project by the Sangguniang Barangay of Caticlan onFebruary
13, 2012, and the Sangguniang Bayan of the Municipality of Malay on February 28, 2012, which
were both undoubtedly achieved at the urging and insistence of respondent Province. As we
have established above, the respective resolutions issued by the LGUs concerned did not
render this petition moot and academic.

The protection of the environment in accordance with the aforesaid constitutional mandate
is the aim, among others, of Presidential Decree No. 1586, Establishing an Environmental
Impact Statement System, Including Other Environmental Management Related Measures and
For Other Purposes, which declared in its first Section that it is the policy of the State to
attain and maintain a rational and orderly balance between socio-economic growth and
environmental protection.

It is clear that both petitioner and respondent Province are interested in the promotion
of tourism in Boracay and the protection of the environment, lest they kill the proverbial hen that
lays the golden egg. At the beginning of this decision, we mentioned that there are common

The parties undoubtedly too agree as to the importance of promoting tourism,

pursuant to Section 2 of Republic Act No. 9593, or The Tourism Act of 2009, which reads:

goals of national significance that are very apparent from both the petitioners and the
respondents respective pleadings and memoranda.

The parties are evidently in accord in seeking to uphold the mandate found in Article
II, Declaration of Principles and State Policies, of the 1987 Constitution, which we quote below:

SECTION 16. The State shall protect and advance the right of the
people to a balanced and healthful ecology in accord with the rhythm and
harmony of nature.

SECTION 2. Declaration of Policy. The State declares tourism

as an indispensable element of the national economy and an industry
of national interest and importance, which must be harnessed as an
engine of socioeconomic growth and cultural affirmation to generate
investment, foreign exchange and employment, and to continue to mold an
enhanced sense of national pride for all Filipinos. (Emphasis ours.)

The primordial role of local government units under the Constitution and the Local
Government Code of 1991 in the subject matter of this case is also unquestionable. The Local
Government Code of 1991 (Republic Act No. 7160) pertinently provides:

xxxx

SECTION 20. The State recognizes the indispensable role of the

private sector, encourages private enterprise, and provides incentives to
needed investments.

Section 2. Declaration of Policy. - (a) It is hereby declared the

policy of the State that the territorial and political subdivisions of the
State shall enjoy genuine and meaningful local autonomy to enable
them to attain their fullest development as self-reliant communities
and make them more effective partners in the attainment of national
goals. Toward this end, the State shall provide for a more responsive and
accountable local government structure instituted through a system of
decentralization whereby local government units shall be given more

powers, authority, responsibilities, and resources. The process of

decentralization shall proceed from the national government to the local
government units.[156] (Emphases ours.)

2.

Respondent Province of Aklan shall perform the following:

a.

fully cooperate with respondent DENR-EMB RVI in its review of the

reclamation project proposal and submit to the latter the appropriate
report and study; and

As shown by the above provisions of our laws and rules, the speedy and smooth
b.

resolution of these issues would benefit all the parties. Thus, respondent Provinces cooperation

secure approvals from local government units and hold proper

with respondent DENR-EMB RVI in the Court-mandated review of the proper classification and

consultations

with

non-governmental

organizations

and

other

environmental impact of the reclamation project is of utmost importance.

stakeholders and sectors concerned as required by Section 27 in

relation to Section 26 of the Local Government Code.

WHEREFORE,

premises

considered,

the

petition

is

hereby PARTIALLY

3. Respondent Philippine Reclamation Authority shall closely monitor the

GRANTED. The TEPO issued by this Court is hereby converted into a writ of

submission by respondent Province of the requirements to be issued by

continuing mandamus specifically as follows:

respondent DENR-EMB RVI in connection to the environmental concerns

raised by petitioner, and shall coordinate with respondent Province in
modifying the MOA, if necessary, based on the findings of respondent

1.

Respondent

Department

of

Environment

and

Natural

DENR-EMB RVI.

Resources-

Environmental Management Bureau Regional Office VI shall revisit and

review the following matters:

4.

The petitioner Boracay Foundation, Inc. and the respondents The Province
of Aklan, represented by Governor Carlito S. Marquez, The Philippine

a.

b.

its classification of the reclamation project as a single instead of a co-

Reclamation Authority, and The DENR-EMB (Region VI) are mandated to

located project;

submit their respective reports to this Court regarding their compliance

with the requirements set forth in this Decision no later than three (3)

its approval of respondent Provinces classification of the project as a

months from the date of promulgation of this Decision.

mere expansion of the existing jetty port in Caticlan, instead of

classifying it as a new project; and
c.

the impact of the reclamation project to the environment based on

new, updated, and comprehensive studies, which should forthwith be
ordered by respondent DENR-EMB RVI.

5.

In the meantime, the respondents, their concerned contractor/s, and/or

their agents, representatives or persons acting in their place or stead, shall
immediately cease and desist from continuing the implementation of the
project covered by ECC-R6-1003-096-7100 until further orders from this

Court. For this purpose, the respondents shall report within five (5) days to
this Court the status of the project as of their receipt of this Decision, copy
furnished the petitioner.

This Decision is immediately executory.

SO ORDERED.

G.R. No. 137862

November 11, 2004

ALFREDO ESTRADA, RENATO T. CANILANG and MANUEL C. LIM, petitioners,

vs.
COURT OF APPEALS AND BACNOTAN CEMENT CORPORATION (BCC), respondents.

DECISION

AUSTRIA-MARTINEZ, J.:
Before this Court is a petition for review on certiorari of the decision1 of the Court of Appeals in
CA-G.R. SP No. 44324, promulgated on April 6, 1998, and the resolution2 dated February 24,
1999 denying petitioners motion for reconsideration.

WFPI and BCC is a violation of the first lease because the cement plant, which BCC intended to
operate in Wawandue, Subic, Zambales, is not related to the fish port business of WFPI; and
BCCs cement plant is a nuisance because it will cause pollution, endanger the health, life and
limb of the residents and deprive them of the full use and enjoyment of their properties. The
plaintiffs prayed that an order be issued: to restrain and prohibit BCC from opening,
commissioning, or otherwise operating its cement plant; and to require the defendants to jointly
and solidarily pay the plaintiffs P205,000.00 by way of actual, moral and exemplary damages
and attorneys fees.3
Defendants WFPI/Khong Hun and BCC filed separate motions to dismiss, both alleging that the
complaint states no cause of action. BCC, in its motion, added that: the plaintiffs failed to
exhaust administrative remedies before going to court; that the complaint was premature; and
that the RTC has no jurisdiction on the matter. Respondent Serrano of the DENR also filed a
motion to dismiss stating that there was no cause of action insofar as he is concerned since
there was nothing in the complaint that shows any dereliction of duty on his part.4
On December 6, 1996, Judge Eliodoro G. Ubiadas of RTC Olongapo City, Branch 72, issued an
order denying respondents motions to dismiss and granting the prayer for a writ of preliminary
injunction.5 Pertinent portions of the order read as follows:
The Court notes that the powers vested by law under Executive Order 192, Republic
Act 3931 and Presidential Decree 984 are regulatory merely and for the purpose of
determining whether pollution exists.
However, under the laws above-mentioned, the powers granted to the DENR thru the
Pollution Adjudication Board did not expressly exclude the Courts which under the law
are empowered to try both questions of facts and law to determine whether pollution
which maybe nuisance per se or by accidents (sic) exist or likely to exist. Under the
Constitution, the courts are imbued the inherent power of general jurisdiction to
resolve these issues. While it maybe (sic) true that petitioners might have first to seek
relief thru the DENRs Pollution Adjudication Board a resort to the remedy provided
under the Pollution Adjudication Board is rendered useless and ineffective in the light
of the urgency that the said pollution be restrained outright in lieu of the impending risk
described in the petition. It will be noted that the DENR did not have the power either
in Executive Order 192, Republic Act 3931 and Presidential Decree 984 to issue a writ
of injunction. The argument therefore for the exhaustion of administrative remedy and
lack of jurisdiction does not warrant the dismissal of this petition against Bacnotan
Cement Corporation.6

The facts are as follows:

Alfredo Estrada, Renato T. Canilang and Manuel C. Lim, as concerned citizens and taxpayers,
filed on July 31, 1996, before the Regional Trial Court (RTC) of Olongapo City, a complaint for
Injunction and Damages with Prayer for Preliminary Injunction and Temporary Restraining Order
against Bacnotan Cement Corp. (BCC), Wawandue Fishing Port, Inc. (WFPI), Jeffrey Khong
Hun as President of WFPI, Manuel Molina as Mayor of Subic, Zambales, and Ricardo Serrano
as Regional Director of the Department of Environment and Natural Resources (DENR).
The complaint alleges that: WFPI and the Municipality of Subic entered into an illegal lease
contract, which in turn became the basis of a sub-lease in favor of BCC; the sub-lease between

Respondents motions for reconsideration were likewise denied by the trial court in an order
dated May 13, 1997.7
Respondent BCC then went to the Court of Appeals on a petition for certiorari and prohibition
with preliminary injunction and/or temporary restraining order seeking to reverse and set aside
the orders dated December 6, 1996 and May 13, 1997 as well as to lift the writ of preliminary
injunction dated December 11, 1996.
On April 6, 1998, the Court of Appeals rendered its decision, granting BCCs petition, thus:

WHEREFORE, in the light of the foregoing disquisitions, the instant petition for
certiorari is GRANTED. The assailed Orders dated December 6, 1996 and May 13,
1997 are hereby SET ASIDE. The writ of injunction issued by the public respondent
under date of December 11, 1996 is forthwith, LIFTED and the Complaint insofar as
petitioner BCC is concerned is ordered forthwith DISMISSED. No costs.

petitioner BCC, approved by the Sangguniang Bayan of Subic and Sangguniang

Panlalawigan of Zambales and pursuant to the requisite of DENR. Again, it should be
remembered that, at the time, petitioner did not yet have the permit to operate (which
should properly be made only after a factual determination of the levels of pollution by
the DENR). Hence, the injunction issued in this case is premature and should not
have been issued at all by public respondent.

SO ORDERED.8
It reasoned that:
FIRSTLY. We find that the denial of said Motion to Dismiss by the Court a quo, was
a grave abuse of discretion because of the doctrine of Administrative Remedy which
requires that where an administrative remedy is provided by statute, relief must be
sought administratively first before the Court will take action thereon. As ruled by the
Supreme Court in the case of Abe Abe, et al. vs. Manta (90 SCRA 524). "When an
adequate remedy may be had within the Executive Department of the government but
nevertheless a litigant fails or refuses to avail himself of the same, the Judiciary shall
decline to interfere. This traditional attitude of the Court is based not only on respect
for party litigants but also on respect for a co-equal office in the government. In fine,
our Supreme Court has categorically explained in Aquino vs. Mariano (129 SCRA 209)
that whenever, there is an available Administrative Remedy provided by law, no
judicial recourse can be made until such remedy has been availed of and exhausted
for three (3) reasons that: (1) Resort to court maybe unnecessary if administrative
remedy is available; (2) Administrative Agency may be given a chance to correct itself;
and (3) The principle of Amity and Convenience requires that no court can act until
administrative processes are completed. Commissioner of Customs vs. Navarro (77
SCRA 264).
SECONDLY, it is a well-settled rule that the jurisdiction of the Regional Trial Court is
general in character, referring to the existence of nuisance under the provision of
Article 694 of the New Civil Code. On the other hand, the Department of Environment
and Natural Resources, through the Pollution Adjudication Board (PAB) under R.A.
3931 as amended by P.D. 984, prescribes the Abatement of Pollution. In fine, when it
comes to nuisance, the Court has general jurisdiction under the New Civil Code. But
when it comes to pollution which is specific, the administrative body like the DENR has
jurisdiction. Clearly, nuisance is general or broader in concept while pollution is
specific. Following the rule that the specific issue of pollution, which is under the
jurisdiction of DENR prevails over the general issue of nuisance which is under the
jurisdiction of the RTC (Lagman vs. City of Manila, 17 SCRA 579), there is no doubt
that the DENR and not the Court should have jurisdiction. Hence, the motion to
dismiss filed by petitioner should have been GRANTED by the Court a quo. Since it
has no jurisdiction over the subject matter. Its denial by public respondent was
therefore a grave abuse of discretion, which is correctible by certiorari.
THIRDLY. We should not lose sight of the fact that the authority to construct in this
case is necessarily required prior to the actual construction of petitioners cement bulk
terminal while the permit to operate likewise is required before the petitioners cement
bulk terminal commences its operation. In this case, the petitioner, at the time, had
only the authority to construct, pursuant to a valid contract between the WFPI and the

FOURTHLY. The effect of the writ of injunction enjoining petitioner from operating the
cement bulk terminal (Order of December 6, 1996) and the public respondents refusal
to defer the proceedings below, virtually preempt the DENR from making such
determination, nay even the authority to issue the permit to operate is likewise
preempted. How can we therefore enjoin operation before the issuance of the permit
to operate? It is also a settled rule that the remedy of injunction is not proper where an
administrative remedy is available. The permit to operate may not even be issued, at
all, by the DENR (Buayan Cattle Co. Inc., vs. Quintillan, 128 SCRA 276).
Evidently, the writ of injunction issued in this case, as We view it, is premature. In fact,
by issuing the Order of Dec. 6, 1996, the public respondent wrestled the authority from
the DENR to determine whether the cement bulk terminal will cause pollution or not,
or whether the pollution may only be on acceptable level as to justify the issuance of
the permit to operate.
While conceding that prior resort should be made to the DENR, the respondent Judge
proceeded to take the contrary stand, following the private respondents contention
that the doctrine of exhaustion of administrative remedies are [sic] inapplicable, since
it would cause irreparable injury if private respondents should avail of administrative
step before taking Court action.
We do not agree.
The respondents contention is clearly baseless and highly speculative because how
can it possibly produce irreparable injury before the actual operation since petitioner
has not yet been issued permit to operate. Besides, We find no evidence shown in the
complaint or alleged therein that will support the presence of pollution and which could
properly be the subject of injunction.
Finally, it is interesting to note that the complaint filed by the private respondents has
no prayer for preliminary injunction (it was not asked, why then should it be given?).
Furthermore, the Sublease Agreement having been partly executed, it could no longer
be enjoined.
By and large, the lower courts denial of petitioners motion to dismiss is undoubtedly a
grave abuse of discretion amounting to lack of jurisdiction.9
The Court of Appeals denied petitioners motion for reconsideration on February 24,
1999.10 Hence the present petition alleging that:
I

. . . THE HONORABLE COURT OF APPEALS HAD CLEARLY DEPARTED FROM

THE ESTABLISHED JURISPRUDENCE ENUNCIATED BY THIS HONORABLE
COURT WHEN IT RULED THAT THE HEREIN PETITIONERS FAILED TO EXHAUST
ADMINISTRATIVE REMEDIES AVAILABLE TO THEM BEFORE THE DEPARTMENT
OF ENVIRONMENT AND NATURAL RESOURCES (DENR) POLLUTION
ADJUDICATION BOARD (PAB); and that
II
THE COURT OF APPEALS ALSO GROSSLY ERRED IN RULING THAT THE
REGIONAL TRIAL COURT OF OLONGAPO CITY, BRANCH 72 HAS NO
JURISDICTION OVER THE ISSUE OF POLLUTION.11
Petitioners argue that: prior resort to an administrative agency is futile and unnecessary since
great and irreparable injury would ensue if the cement repacking plant is allowed to operate in
Wawandue, Subic, Zambales; only the court can grant them speedy, effective and immediate
relief since the DENR-Pollution Adjudication Board (PAB) has no authority to issue the needed
writ of injunction prayed for by petitioners; E.O. No. 192,12 R.A. No. 393113 or P.D. No.
98414 does not expressly exclude the power and authority of the RTC to try both questions of
fact and of law relative to the determination of the existence of pollution arising from the
operation of respondents cement repacking plant either as a nuisance per se or a nuisance per
accidens; and the lower court under the Constitution is imbued with the inherent power and
jurisdiction to resolve the issue of pollution.15
In its Comment, BCC contends that: the instant petition should be dismissed because it is not
accompanied by a copy of the petition in CA G.R. SP No. 44324, which violates Rule 45, Sec. 4
of the Rules of Court requiring that the petition be accompanied by relevant pleadings;16 the
Court of Appeals correctly held that the jurisdiction to determine the issue of pollution is lodged
primarily with the DENR and not with the RTC; under P.D. No. 984, the task of determining the
existence of pollution was bestowed on the National Pollution Control Commission (NPCC), the
powers of which were assumed by the DENR under E.O. No. 192; the jurisdiction of the trial
courts anent abatement of nuisance in general cannot prevail over the specific, specialized and
technical jurisdiction of the DENR-PAB; under the doctrine of exhaustion of administrative
remedies, where competence to determine the same issue is placed in the trial court and an
administrative body and the issue involves a specialized and technical matter, relief should first
be sought before the administrative body prior to instituting suit before the regular courts; the
relief sought by the petitioners to prevent the supposedly injurious operation of BCCs cement
bulk terminal can be effectively obtained from the DENR, which, under P.D. No. 984, has the
authority to grant, modify and revoke permits, and to issue orders for the abatement of pollution
and impose mandatory pollution control measures for compliance; 17 since the BCC only has an
"authority to construct" and not yet "permit to operate" at the time of the filing of the complaint,
the writ of injunction issued by the trial court preempted the DENR from making the
determination of whether or not BCC should be allowed to operate; the complaint was properly
dismissed since petitioners have no legal capacity to bring a suit for abatement of nuisance; and
the right invoked by petitioners is abstract and is not sufficient to confer locus standi.18

The principal issue that needs to be resolved is whether or not the instant case falls under the
exceptional cases where prior resort to administrative agencies need not be made before going
to court.
We answer in the negative.
The doctrine of exhaustion of administrative remedies requires that resort be first made with the
administrative authorities in the resolution of a controversy falling under their jurisdiction before
the same may be elevated to a court of justice for review.20 If a remedy within the administrative
machinery is still available, with a procedure pursuant to law for an administrative officer to
decide the controversy, a party should first exhaust such remedy before going to court. A
premature invocation of a courts intervention renders the complaint without cause of action and
dismissible on such ground.21
The reason for this is that prior availment of administrative remedy entails lesser expenses and
provides for a speedier disposition of controversies. Comity and convenience also impel courts
of justice to shy away from a dispute until the system of administrative redress has been
completed and complied with.22
As we explained in Gonzales vs. Court of Appeals,23
The thrust of the rule on exhaustion of administrative remedies is that the courts must
allow the administrative agencies to carry out their functions and discharge their
responsibilities within the specialized areas of their respective competence. It is
presumed that an administrative agency, if afforded an opportunity to pass upon a
matter, will decide the same correctly, or correct any previous error committed in its
forum. Furthermore, reasons of law, comity and convenience prevent the courts from
entertaining cases proper for determination by administrative agencies. Hence,
premature resort to the courts necessarily becomes fatal to the cause of action of the
petitioner.24
While the doctrine of exhaustion of administrative remedies is flexible and may be disregarded in
certain instances, such as:
(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,

In their Reply, petitioners reiterated their arguments and added that they have fully complied with
the requirements of Rule 45.19

(6) when the respondent is a department secretary whose acts as an alter ego of the
President bears [sic] 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,

(f) Make, alter or modify orders requiring the discontinuance of pollution

specifying the conditions and the time within which such discontinuance
must be accomplished.

(10) when the rule does not provide a plain, speedy and adequate remedy,

(g) Issue, renew, or deny permits, under such conditions as it may

determine to be reasonable, for the prevention and abatement of pollution,
for the discharge of sewage, industrial waste, or for the installation or
operation of sewage works and industrial disposal system or parts thereof

(11) when there are circumstances indicating the urgency of judicial intervention,

(12) when no administrative review is provided by law,

(j) serve as arbitrator for the determination of reparations, or restitution of

the damages and losses resulting from pollution.

(9) when the subject matter is a private land in land case proceedings,

(13) where the rule of qualified political agency applies, and

we find, however, that the instant case does not fall under any of the recognized exceptional
circumstances.

P.D. No. 984 also empowered the commission to issue ex parte orders directing the
discontinuance or temporary suspension or cessation of operation of an establishment or person
generating sewage or wastes without the necessity of prior public hearing whenever it finds a
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 exceed the allowable standards set by the
commission.27

Petitioners claim that their action before the trial court, without going to the DENR first, is
justified because they are in danger of suffering grave and irreparable injury from the operation
of respondents cement repacking plant and the DENR does not have the power to grant them
the relief they are praying for.

In 1987, Executive Order No. 192 was passed, reorganizing the DENR. It transferred the power
of the NPCC to the Environmental Management Bureau28 and created the PAB, under the Office
of the Secretary, which assumed the powers and functions of the NPCC with respect to the
adjudication of pollution cases under R.A. No. 3931 and P.D. No. 984.29

We do not agree.

In Pollution Adjudication Board vs. Court of Appeals,30 we stated that the PAB is the very agency
of the government with the task of determining whether the effluents of a particular industrial
establishment comply with or violate applicable anti-pollution statutory and regulatory
provisions.31 We also recognized its power to issue, ex parte, cease and desist orders, thus:

(14) when the issue of non-exhaustion of administrative remedies has been rendered
moot.25

Republic Act No. 3931, An Act Creating the National Water and Air Pollution Control
Commission, was passed on June 18, 1964 to maintain reasonable standards of purity for the
waters and air of the country with their utilization for domestic, agricultural, industrial and other
legitimate purposes. It created the NPCC which had the power, to issue, renew, or deny permits,
for the prevention and abatement of pollution.26
In 1976, Presidential Decree No. 984 was enacted to strengthen the NPCC giving it, among
others, the following:
Sec. 6. Powers and Functions . . .
...
(e) Issue orders or decisions to compel compliance with the provisions of
this Decree and its implementing rules and regulations only after proper
notice and hearing.

. . . under . . . Section 7(a) of P.D. No. 984, an ex parte cease and desist order may be
issued by the (PAB) (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]." . . . [I]t 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-facie evidence 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 an ex 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. . . .

...
Ex parte cease and desist orders are permitted by law and regulations in situations
like that here presented precisely because stopping 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. . . .32
In Laguna Lake Development Authority vs. Court of Appeals,33 we also pronounced that:

STERLING SELECTIONS CORPORATION, Petitioner,

vs.
LAGUNA LAKE DEVELOPMENT AUTHORITY (LLDA) and JOAQUIN G. MENDOZA, in his
capacity as General Manager of LLDA, Respondents.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
Petitioner Sterling Selections Corporation (petitioner) is assailing the Decision 1 dated May 30,
2005 and the Resolution2 dated January 31, 2006 of the Court of Appeals (CA) in CA-G.R. SP
No. 79889.
Petitioner is a company engaged in the fabrication of sterling silver jewelry. Its products are
manufactured in the home of its principal stockholders, Asuncion Maria and Juan Luis
Faustmann (Faustmanns), located in Barangay (Brgy.) Mariana, New Manila, Quezon City.3

The matter of determining whether there ispollution of the environment that requires
control, if not prohibition, of the operation of a business establishment is essentially
addressed to the Environmental Management Bureau (EMB) of the DENR which, by
virtue of Section 16 of Executive Order No. 192, series of 1987 has assumed the
powers and functions of the defunct National Pollution Control Commission created
under Republic Act No. 3931. Under said Executive Order, a Pollution Adjudication
Board (PAB) under the Office of the DENR Secretary now assumes the powers and
functions of the National Pollution Control Commission with respect to adjudication of
pollution cases.

Sometime in 1992, one of petitioners neighbors in Brgy. Mariana filed a complaint with the
Office of the Chairman of Brgy. Mariana against petitioner for "creating loud unceasing noise and
emitting toxic fumes," coming from the manufacturing plant of the latters predecessor, Unson,
Faustmann and Company, Inc.4 During conciliation proceedings, petitioners management
undertook to relocate its operations within a month. The parties signed an Agreement to that
effect.5 However, petitioner failed to abide by the undertaking and continued to manufacture its
products in its Brgy. Mariana workshop.

As a general rule, the adjudication of pollution cases generally pertains to the Pollution
Adjudication Board (PAB), except in cases where the special law provides for another
forum.34

On January 16, 1998, Alicia P. Maceda (Maceda), another neighbor of petitioner, wrote a letter to
the Brgy. Chairman to complain about the loud noise and offensive toxic fumes coming from
petitioners manufacturing plant.6 She also filed a formal complaint with the Department of
Environment and Natural Resources (DENR)-National Capital Region office. The complaint was
endorsed by the DENR to one of the agencies under it, respondent Laguna Lake Development
Authority (LLDA), which had territorial and functional jurisdiction over the matter.7

Clearly, the claim of petitioners that their immediate recourse to the regular courts is justified
because the DENR is powerless to grant them proper relief is without basis.
The Court of Appeals correctly found that the petitioners failed to exhaust administrative
remedies before going to court which renders their complaint dismissible on the ground of lack
of cause of action.
WHEREFORE, the petition is denied for lack of merit.
SO ORDERED.

G.R. No. 171427

March 30, 2011

Subsequently, the Monitoring and Enforcement Section-Pollution Control Division of LLDA

conducted an inspection of petitioners premises. According to the LLDA, it was observed that
the wastewater generated by petitioners operations was drained directly to the sewer canal.
However, since the wastewater was not yet for disposal, no sample could be collected during the
inspection.
On November 19, 1998, a Notice of Violation and a Cease and Desist Order (CDO) were served
on petitioner after it was found that it was operating without an LLDA Clearance and Permit, as
required by Republic Act (R.A.) No. 4850.8
Meanwhile, Macedas complaint was endorsed by the LLDA to the Office of the Mayor of
Quezon City. After hearing and investigation, the Office of the Mayor issued a Closure Order
against petitioner after finding that it was operating without the requisite business permit, since it
was running a jewelry manufacturing plant with an "Office Only" permit, and for violation of
Zoning and Environmental Laws.9

Petitioner then filed a petition for mandamus before the Regional Trial Court (RTC), Branch 167,
Pasig City. Contending that, as a cottage industry, its jewelry business is exempt from the
requirement to secure a permit from the LLDA, petitioner asked the court to order the latter to
issue a certificate of exemption in its favor. The RTC denied the petition, ruling that mandamus
does not lie to compel the performance of a discretionary duty. Nonetheless, the RTC allowed
petitioner to file an amended petition for certiorari and mandamus.10
In its amended petition, petitioner averred that its business was classified as a cottage industry.
It argued that under R.A. No. 6977, the law prevailing at the time of its registration with the
Securities and Exchange Commission (SEC) in December 1996, cottage industry was defined
as one with assets worth P50,001.00 toP500,000.00.11 Since, based on its Articles of
Incorporation and Certified Public Accountant (CPA)s Balance Sheet, its total assets when it
was incorporated amounted only to P312,500.00, it qualified as a cottage industry.
Intervenors Maceda, Ma. Corazon G. Logarta (Logarta), and Rosario "Charito" Planas (Planas)
filed a motion for intervention. Their Answer-in-Intervention was subsequently admitted by the
RTC.

Petitioner filed a motion for reconsideration of the RTC decision. The same was denied in an
Order dated May 17, 2002. Hence, it filed a Notice of Appeal. Subsequently, it filed its appeal
with the CA.
In a Decision15 dated May 30, 2005, the CA dismissed the appeal. The CA brushed aside the
issue of whether petitioner qualified as a cottage industry. It said that even if petitioner belonged
to that category, it still needed to prove that its business was exempted by law from the coverage
of LLDA Resolution No. 41, Series of 1997.
Specifically, the CA cited Section 2(30) of said resolution, to wit:
Section 2. Exemptions. The following activities, projects, and installations are exempt from the
above subject requirements:
xxxx
30. Cottage Industries, including

On April 1, 2002, the RTC promulgated a decision12 denying the petition. In rejecting petitioners
claim that it was a cottage industry, the RTC said:
While it is true that plaintiff [petitioner]s economic activity is carried on in a home, which
incidentally gained the ire of the neighbors that culminated in a complaint against the plaintiff, it
was manned not with the members of the family but by at least two hundred employees who
were strangers and not known to the community. Moreso, being an accredited exporter
recognized by the Bureau of Export Trade Promotion, Department of Trade and Industry,
seemed a deviation from the connotation of "small scale."
Worthy to note is the observation of respondent-intervenors that to be considered a cottage
industry, plaintiff should have been registered under the [National Cottage Industries
Development Authority (NACIDA)], Section 12 of R.A. [No.] 3470 substantially provides; (sic)
that the plaintiff corporation who desires to avail of the benefits and assistance of the law should
have registered with the board. In the absence of any indication that affirm the status of the
plaintiff corporation as a cottage industry, proof to the contrary may be reasonably accepted, for
he who alleged the affirmative of the issue has the burden of proof and in this aspect plaintiff
miserably failed.
On the contention that LLDA Resolution No. 41, series of 1997, exempt the plaintiff corporation
from the requirements imposed by the LLDA, the interpretation given by [the] government
agency itself should be given greater probative value. As a regulatory and quasi-judicial body,
the LLDA is mandated to pass upon, approve or disapprove all plans, programs and project[s]
proposed by local government offices/agencies, public corporations and private [corporations]. It
is in the position to construe its own rules and regulation. By implication, plaintiff corporation
arrogates unto itself the privilege bestowed upon a cottage industry. However, there is nothing in
the Resolution that includes jewelry making as included in the term cottage industry.13
Thus, the RTC held that petitioner must subscribe to the rules and regulations of the LLDA
governing clearance.14

- stuffed toys manufacturing

- handicrafts, and
- rattan/furniture manufacturing.16
The CA held that, following the principle of ejusdem generis, the enumeration in the foregoing
provision must be taken to include businesses of the same kind, which were, as averred by the
LLDA, not as environmentally critical as those enumerated.17 Thus, the CA declared that the
LLDA did not contemplate the inclusion of the manufacture of jewelry in the
exemptions.18 Additionally, the CA held that the opinions and rulings of officials of the
government called upon to execute or implement administrative laws command respect and
weight.19 The CA further held that since petitioner was claiming to be within the exemption, it had
the duty to prove that the law intended to include it, or that it is within the contemplation of the
law, to be exempted.20
Petitioner moved for the reconsideration of the Decision, but the CA denied the same in a
Resolution dated January 31, 2006. Hence, petitioner filed this petition for review.
Petitioner argues that the CA committed the following errors:
1. The appellate court erred when it failed or refused to make a definitive
pronouncement as to whether petitioner qualifies as a cottage industry. This, even
after the appellate court (on page 7 of the assailed Decision) scored the trial court for
having "failed to consider the fact that the predicament of Sterling rests primarily on
the determination of its status," i.e., whether petitioner is a cottage industry or not.
2. The appellate court erred when it deliberately ignored the provisions of various
statutes and regulations pertaining to cottage industries, which if the same had been

taken into account and accorded due consideration, would have led the appellate
court to correctly conclude that petitioner is indeed a cottage industry.
3. The appellate court erred when it declared, after misapplying the rules of statutory
construction, that No. 30 of Sec. 2 of LLDA Resolution No. 41, Series of 1997, does
not serve to exempt petitioner from the clearance requirement.21
Petitioner also argues that Section 2(30) of LLDA Resolution No. 41, Series of 1997, contains no
restriction limiting the exemptions to only certain kinds of cottage industries.22 It contends that
the word "including" connotes a sense of "containing" or "comprising," and not a sense of
exclusivity or exclusion. The provision, petitioner points out, is devoid of any restrictive or limiting
words; thus, the LLDA should avoid limiting the kinds or classes of cottage industries exempted
from the clearance requirement.23
Next, petitioner avers that the CA erred when it refused to rule on whether it qualified as a
cottage industry. It claims that the CA deliberately ignored the provisions in various statutes and
regulations pertaining to cottage industries, which would have led to the conclusion that
petitioner was such, and thus would fall within the exemption.24 Petitioner argues that its total
assets were worth only P312,500.00 during its incorporation, which, under R.A. No. 6977, would
qualify it as a cottage industry. Further, petitioner argues that, even with the enactment of R.A.
No. 8502, the Jewelry Industry Development Act of 1998, jewelry-making remains a cottage
industry.25
Finally, petitioner puts in question the factual basis for the issuance of the CDO by the LLDA.
By way of comment, intervenors Maceda, Logarta, and Planas allege that petitioner has been
operating illegally, violating ordinances and laws, operating without the required permits and
clearances, and continuing its operations despite LLDAs issuance of a CDO.26 They further
allege that petitioners business is located in an area classified as "R-1" or low density
residential zone under Quezon City Ordinance SP-918, Series of 2000, and preceding zoning
ordinances. Despite having only an "Office Only" permit, petitioner deliberately uses the
premises to manufacture jewelry.27
Intervenors also refute petitioners claim that it is exempted from obtaining the required LLDA
clearance because it is a cottage industry. First, intervenors allege that petitioner is not
registered with the National Cottage Industries Development Authority (NACIDA). Next,
intervenors point out that, as admitted by petitioner itself, it employs at least 229 employees who
are strangers to the family, and its operations yield annual sales of at leastP25 million.28
Intervenors also aver that, in R.A. No. 8502, there is no provision categorizing jewelry-making as
a cottage industry. Going by the classification of jewelry-making companies in the Implementing
Rules and Regulations of R.A. No. 850229 and petitioners financial statements filed with the
SEC, which state that petitioner had assets amounting to P2,454,459.01 in 1999
and P4,628,900.80 in 1998,30 it cannot be characterized as a micro jewelry enterprise.
Next, intervenors insist that the LLDA has jurisdiction over petitioner. They argue that LLDA
Resolution No. 41, Series of 1997, does not in any manner waive the LLDA jurisdiction even
over those exempted in the list of activities, projects, and installations. Jurisdiction is provided for

by law and cannot be diminished by an act of the agency concerned. In fact, there is no
provision of waiver of jurisdiction contained in the said regulation. Exemption from securing prior
clearance before implementing an activity does not carry with it a waiver of jurisdiction.31
Intevernors also point out that cottage industry, as contemplated under LLDA Resolution No. 41,
Series of 1997, includes only the activities enumerated therein, namely, stuffed toys
manufacturing, handicrafts, and rattan/furniture manufacturing. Further, intervenors aver that,
under existing laws, the term cottage industry no longer exists and has been deleted. Jewelrymaking is now classified as an independent and separate industry under R.A. No. 8502, apart
from the general term cottage industry. Therefore, petitioners activity cannot be included as
among those exempted from obtaining a clearance from the LLDA because jewelry-making is
not at all mentioned as an exception to the general rule, intervenors claim.32
On the other hand, the LLDA and its former General Manager Joaquin G. Mendoza
(respondents) also filed their Comment. Respondents narrated that in 1998, petitioner was found
to be operating its business without clearance and permit from the LLDA. Accordingly, a Notice
of Violation was issued against petitioner. Subsequently, the LLDA conducted a public hearing,
which was attended by petitioner, its company physician, and legal counsels. During the hearing,
petitioner committed to relocate its facilities. Meanwhile, the same would remain padlocked to
erase all doubts of its continued operation despite the Closure Order from the Quezon City
Mayors Office.33 After the public hearing, the LLDA issued the assailed CDO against petitioner.
Thereafter, proceedings before the RTC, then the CA, ensued, resulting in the now-assailed
decision and resolution.
In their Comment, respondents posit that petitioner is not a cottage industry within the
contemplation of the law. They argue that to qualify as such, the conditions in the laws must be
complied with. Thus, while metalcraft activities are considered as cottage industry, asset
requirements and NACIDA registration requirements must also be complied with. 34
Respondents contend that petitioner cannot be considered a cottage industry considering that it
has assets way above the threshold fixed in the law. Respondents aver that what petitioner
claims as its assets amounting toP312,500.00 refer only to the minimum paid-up capital stock
required by law for purposes of incorporation and registration with the SEC. Respondents argue
that petitioner would have other properties contributed and owned for purposes of starting the
enterprise, such as furniture, fixtures, machinery, and equipment. Likewise, respondents point
out that petitioner actually has a capitalization of P5 million, of which P1.25 million had been
subscribed. The amount subscribed minus the paid-up capital is a subscription receivable from
the incorporators and is an asset.35
Next, respondents argue that the CA did not err in ruling that petitioner is not exempted from
securing a clearance from the LLDA. The respondents posit that, under LLDA Resolution No. 41,
Series of 1997, the cottage industries exempted are those of the same nature and category as
those enumerated therein, following the principle of ejusdem generis.36 The activities
enumerated, respondents claim, are those whose operations are basically dry and whose
environmental impact is not so significant.37 Likewise, respondents argue that, following the
principle expressio unius est exclusio alterius, the express mention of the three activities
excluded all other cottage industries. If the LLDA had intended to exempt all types of cottage
industries, it would not have made an enumeration of those exempt activities, respondents
posit.38

In its Reply, petitioner claims that intervenors are illegally suppressing petitioners legitimate
business because it is competing with the jewelry business of intervenor Logartas
cousin.39 Petitioner claims that Logartas cousin also operates his business within the same area
as its facilities. It further claims that there is a total of 34 other businesses, including a
manufacturer of garments, a wholesaler of cement, and a manufacturer of leather bags,
operating in the same supposedly-residential zone where its office is located.40 Petitioner also
accuses intervenors Maceda and Planas of going to court with "unclean hands," considering that
they also run businesses in the same area.41
Petitioner also denies that Mrs. Faustmann, then operating Unson, Faustmann and Company,
Inc., reneged on a promise, made in 1992, to relocate the companys operations. Petitioner
claims that Mrs. Faustmann was pressured into signing the Agreement before the Lupon,
through threats and intimidation. As to the later complaint, petitioner claims that intervenors
succeeded in pressing residents to sign the complaint, but those who signed were in fact from
other streets, further away from its office.42
Petitioner also claims that there was no public hearing conducted before the Quezon City
Mayors Office issued and enforced the CDO.
Petitioner likewise insists that its business qualifies as a cottage industry.43 It maintains that
pertinent laws have identified jewelry-making as a cottage industry. The Cottage Industry
Technology Center (CITC) designates jewelry-making as one of the industries it actively assists.
Petitioner also maintains that its paid-up capital qualifies its business as a cottage industry.44
The petition is unmeritorious; hence, the same is denied.
The main issue to be resolved is whether petitioner is exempted from complying with the
requirement to obtain a clearance from the LLDA to operate its business.
Petitioner insists that it is exempted from complying with the clearance requirements because it
is a cottage industry. In order to resolve this issue, a review of the laws pertinent to cottage
industries is in order.
Section 11 of R.A. No. 3470, approved on June 16, 1962, defined cottage industry as an
"economic activity in a small scale which is carried on mainly in the homes or in other places for
profit and which is mainly done with the help of the members of the family." Among the activities
considered as a cottage industry is "metalcraft such as making of jewelries, knives, boloes (sic),
scissors, razors, silverwares and brassworks (sic)."45
The same law required persons, corporations, partnerships, or associations that wished to avail
of the benefits of the law to register with the NACIDA.46
In 1968, R.A. No. 5326 amended certain sections of R.A. No. 3470. In particular, Section 11 was
amended to read:
SEC. 11. Definition. The term cottage industry as used in this Act shall mean an economic
activity in a small scale carried on mainly in the homes or in other places for profit and mainly
done with the help of the members of the family with capitalization not exceeding fifteen

thousand pesos. The term shall also include economic activities carried on by students of public
and private schools, within school premises, as a cooperative effort, under supervision of a
teacher or other person approved by and acting under the supervision and control of school
authorities, either as part of or in addition to ordinary vocational training, provided all profits shall
accrue to the students working therein. it shall include the following: x x x (5) metal craft such as
making of jewelries, knives, boloes (sic), scissors, razors, silverwares and brassworks (sic); x x x
All cottage industries shall be owned and operated by Filipino citizens, or by a corporation,
partnership or cooperative, at least seventy-five per cent of the capital or investment of which is
owned by Filipino citizens. All members of its Board of Directors shall be Filipino citizens.
The word capitalization as used in this section shall mean the total current assets and fixed
assets, excluding the value of the land and building leased, rented and/or used at least six
months of each year. For purpose of this Act, any and all branches, agencies, outlets or divisions
of a licensed cottage industry shall be collated to determine the capitalization thereof.
R.A. No. 3470 was further amended on October 22, 1975, by Presidential Decree (P.D.) No.
817. The first sentence of Section 11 was amended, to read:
The term "cottage industry" as used in this Act shall mean an economic activity carried on in the
homes or in other places for profit, with a capitalization of not exceeding P100,000 at the time of
registration.
In 1981, then President Ferdinand Marcos issued P.D. No. 1788, the Cottage Industries
Development Decree of 1981, amending and consolidating R.A. Nos. 3470 and 5326, P.D. No.
817, and other related Laws, Decrees, Executive Orders, Letters of Instructions, and Acts
concerning the NACIDA. Section 10 of P.D. No. 1788 states:
Section 10. Cottage Industry The term "cottage industry" shall mean a modest economic
activity for profit using primarily indigenous raw materials in the production of various articles of
the country. Provided, however, that all cottage industries shall be owned and operated by
Filipino citizens, or by corporations, partnerships, or cooperatives at least seventy-five percent
(75%) of the capital investment of which shall be owned by Filipino citizens. Provided, further,
that the total assets of which shall not exceed one hundred thousand pesos (P100,000.00) at
the time of registration with the NACIDA. Provided, finally that the maximum total assets
allowable for cottage industries for purposes of registration may be modified and/or increased
accordingly by the NACIDA Board subject to the approval of the President of the Republic of the
Philippines.
For facility of implementation, coordination and statistical gathering, cottage industries shall be
classified as follows:
xxxx
a) Metalcraft Industry That sector using metals or its alloys as principal raw material
component in producing articles such as brasswares, cutlery items, fabricated tools, implements
and equipment and other items requiring a certain degree of craftsmanship in the making thereof
including the making of jewelry items involving the use metals and/or its alloys in combination
with semiprecious or artificial stones.

Executive Order (E.O.) No. 917, issued on October 15, 1983, amended the definition of cottage
industry by increasing the capitalization requirement to a maximum of P250,000.00, which
amount may be modified or increased accordingly, subject to the approval of the President. 47
In 1986, the National Economic Development Authority (NEDA) redefined cottage, small and
medium scale industries. Considered as cottage industries were enterprises, excluding
agriculture, with total assets after financing of over P500,000.00 but less than P5 million.48
When Corazon Aquino became President, she issued E.O. No. 133, reorganizing the
Department of Trade and Industry (DTI). Section 18 thereof provided that the NACIDA was
reorganized into the CITC, and its functions, other than technology development and training,
were transferred to the Bureau of Small and Medium Business Development and relevant line
operating units of the DTI.
In 1990, Congress enacted R.A. No. 6977, the Magna Carta for Small Enterprises. The
capitalization for a cottage enterprise was changed, viz.:
SEC. 3. Small and Medium Enterprises as Beneficiaries. "Small and medium enterprise" shall
be defined as any business activity or enterprise engaged in industry, agribusiness and/or
services, whether single proprietorship, cooperative, partnership or corporation whose total
assets, inclusive of those arising from loans but exclusive of the land on which the particular
business entitys office, plant, and equipment are situated, must have value falling under the
following categories:
micro : less than P50,000
cottage : P50,001 P500,000
small : P500,001 P5,000,000
medium: P5,000,001 P20,000,000
In a generic sense, all enterprises with total assets of Five million pesos (P5,000,000) and below
shall be called small enterprises.
R.A. No. 6977 was amended by R.A. No. 8289 in 1998. Amending Section 1 of R.A. No. 6977,
the term cottage industry or cottage enterprise was completely eliminated:
SEC. 3. Small and Medium Enterprise as Beneficiaries. "Small and Medium Enterprise" shall
be defined as any business activity or enterprise engaged in industry, agribusiness and/or
services, whether single proprietorship, cooperative, partnership or corporation whose total
assets, inclusive of those arising from loans but exclusive of the land on which the particular
business entitys office, plant, and equipment are situated, must have value falling under the
following categories:
micro : less than P1,500,001

small : P1,500,001 P15,000,000

medium: P15,000,001 P60,000,00
The above definitions shall be subject to review and adjustment by the said Council motu proprio
or upon recommendation of sectoral organization(s) taking into account inflation and other
economic indicators. The Council may use as variables the number of employees, equity capital
and asset size.
Finally, in 1998, Congress enacted R.A. No. 8502, the Jewelry Industry Development Act of
1998, a law to support, promote, and encourage the growth and development of the
predominantly small and medium scale jewelry industries. R.A. No. 8502 did not use the term
cottage industry; instead, it characterized businesses engaged in jewelry-making as:
a) micro jewelry enterprise less than P1,500,001
b) small scale jewelry enterprise P1,500,001 P15,000,000
c) medium jewelry enterprise P15,000,001 P60,000,000
d) large scale jewelry enterprise more than P60,000,000.49
On the other hand, the LLDA was created by R.A. No. 4850 to carry out the development of the
Laguna Lake region with due regard and adequate provisions for environmental management
and control, preservation of the quality of human life and ecological systems, and prevention of
undue ecological disturbances, deterioration, and pollution.50
The LLDA was granted the power to pass upon and approve or disapprove all plans, programs,
and projects proposed by the local government offices/agencies within their regions, by public
corporations, and by private persons or enterprises, where such plans, programs and/or projects
are related to those of the Authority for the development of the region, as well as to issue the
necessary clearance for the approved plans, programs and/or projects.51
Thus, in LLDA Resolution No. 41, Series of 1997, the LLDA specified the development activities,
projects, and installations required to secure a clearance from the LLDA before these can be
constructed, operated, maintained, expanded, modified, or implemented by any government
office/agency or government corporation or private person or enterprise. 52 Section 2 of the LLDA
Resolution then set out the activities exempted from complying with the clearance requirement,
to wit:
Section 2. Exemptions. The following activities, projects, [or] installations are exempted from the
above subject requirements:
xxxx
30. Cottage industries including

- stuffed toys manufacturing

assets, inclusive of those arising from loans but exclusive of the land on which the particular
business entitys office, plant, and equipment are situated, must have value falling under the
following categories:

- handicrafts and

micro : less than P50,000

- rattan/furniture manufacturing.
Contrary to the CAs pronouncement and to respondents claim, the provision did not restrict the
exemption to the three activities therein mentioned.

cottage: P50,001 P500,000

small : P500,001 P5,000,000

The word include means "to take in or comprise as a part of a whole."

53

medium: P5,000,001 P20,000,000

Thus, this Court has previously held that it necessarily conveys the very idea of non-exclusivity
of the enumeration.54 The principle of expressio unius est exclusio alterius does not apply where
other circumstances indicate that the enumeration was not intended to be exclusive, or where
the enumeration is by way of example only.55 The maxim expressio unius est exclusio alterius
does not apply when words are mentioned by way of example.56 Said legal maxim should be
applied only as a means of discovering legislative intent which is not otherwise manifest.57
In another case, the Court said:

In a generic sense, all enterprises with total assets of Five million pesos (P5,000,000) and below
shall be called small enterprises.
Accordingly, it should be considered as a cottage industry, petitioner insists.
However, petitioners contention that its total assets amounts only to P312,500.00 is misleading.

[T]he word "involving," when understood in the sense of "including," as in including technical or
financial assistance, necessarily implies that there are activities other than those that are being
included. In other words, if an agreement includes technical or financial assistance, there is []
apart from such assistance something else already in[,] and covered or may be covered by,
the said agreement.58

The P312,500.00 represents the total amount of the capital stock already subscribed and paid
up by the companys stockholders. It does not, however, represent the totality of its assets, even
at the time of its registration. By the expert opinion of petitioners own consultant, independent
CPA Maximiano P. Sorongon, Jr., it does not mean that the paid-up capital is the only source of
funds of the corporation for it to support its recurring operational requirements, as well as its
increased financial requirements later on, as and when the business grows and expands.59

As the regulation stands, therefore, all cottage industries including, but not limited to, those
enumerated therein are exempted from securing prior clearance from the LLDA. Hence, the CA
erred in ruling that only the three activities enumerated therein are exempted.

In other words, its paid-up capital is not the only asset of the company. Under R.A. No. 6977, the
term total assets was understood to mean "inclusive of those arising from loans but exclusive of
the land on which the particular business entitys office, plant, and equipment are situated."

Next, the Court must determine if petitioner is in fact a cottage industry entitled to claim the
exemption under LLDA Resolution No. 41, Series of 1997.

Assets consist of property of all kinds, real and personal, tangible and intangible, including, inter
alia, for certain purposes, patents and causes of action which belong to any person, including a
corporation and the estate of a decedent.1avvphi1 It is the entire property of a person,
association, corporation, or estate that is applicable or subject to the payment of his, her, or its
debts.60

That jewelry-making is one of the activities considered as a cottage industry is undeniable. The
laws bear this out. However, based on these same laws, the nature of the activity is only one of
several factors to be considered in determining whether the same is a cottage industry.
In view of the emphasis in law after law on the capitalization or asset requirements, it is crystal
clear that the same is a defining element in determining if an enterprise is a cottage industry.

Consider these details as found by the Board of Investments and set forth in a Memorandum
dated June 8, 1999 addressed to the undersecretary of the DENR, listing the basic information
of petitioner as follows:

Petitioner argues that its assets amount to only P312,500.00, representing its paid-up capital at
the time of its SEC registration. The law then in force was R.A. No. 6977, which, to recapitulate,
states:

Name : Sterling Selections Corporation

SEC. 3. Small and Medium Enterprises as Beneficiaries. "Small and medium enterprise" shall
be defined as any business activity or enterprise engaged in industry, agribusiness and/or
services, whether single proprietorship, cooperative, partnership or corporation whose total

Business Activity : Producer of gift items made of silver

Chairman & Managing Director: Asuncion Maria S. de Faustmann

Address : 55-A, 11th St., New Manila, Quezon City

SEC Registration : A 1996-10845 dated December 2, 1996

BOI Accreditation : 98-003 dated August 13, 1998 under R.A. 8502
$1M 5M Max.

P1,000.00

Above $1M 5M Max.

2,000.00

Above $5M 10M Max.

3,000.00

Above $10M 15M Max.

4,000.00

Above $15M

5,000.00

BETP Accreditation : 98-0010 dated July 17, 1998 under R.A. 7844
No. of Employees : 189 (Direct Labor; Salaries & Allowances P16,064,000)
Value of Export Sales : P19,732,692.00
Total Sales : P37,160,340.00 (based on 1998 ITR)61
The same figures are reflected in petitioners own income statement.62 Petitioner cannot insist on
using merely its paid-up capital as basis to determine its assets. The law speaks of total assets.
Petitioners own evidence, i.e., balance sheets prepared by CPAs it commissioned itself, shows
that it has assets other than its paid-up capital. According to the Consolidated Balance Sheet
presented by petitioner, it had assets amounting to P4,628,900.80 by the end of 1998,
and P1,746,328.17 by the end of 1997.63 Obviously, these amounts are over the maximum
prescribed by law for cottage industries.
Thus, the conclusion is that petitioner is not a cottage industry and, hence, is not exempted from
the requirement to secure an LLDA clearance.
Further militating against petitioners claim is the RTCs astute observation that being an
accredited exporter recognized by the Bureau of Export Trade Promotion (BETP) of the DTI
seemed like a deviation from the connotation of "small scale."64
The Court notes that, to be accredited by the BETP as an exporter, there are strict standards
that the enterprise must meet. Under R.A. No. 7844, the Export Development Act of 1994, an
exporter is any person, natural or juridical, licensed to do business in the Philippines, engaged
directly or indirectly in the production, manufacture or trade of products or services, which earns
at least fifty percent (50%) of its normal operating revenues from the sale of its products or
services abroad for foreign currency.65
The same law provides for tax incentives to exporters, with the qualification that the incentives
shall be granted only upon presentation of their BETP certification of the exporters
eligibility.66 Qualified exporters applying for BETP certification must present a report of their
export revenue/sales for the immediately preceding year.67
DTI Administrative Order No. 3, Series of 1995, provides for the mechanisms of accreditation for
exporters vis--vis the tax incentives granted under R.A. No. 7844. Under Procedure for
Accreditation of Exporters, the following schedule of application fees was set forth:
Export Value Per Year

Application Fee

Consequently, an exporter must be able to generate and export enough products, with an export
value of $1 million per year, in order to be accredited by the BETP for tax incentives. Petitioners
accreditation shows that it complied with this requirement.
Based on the foregoing, it is clear that petitioner cannot be considered a cottage industry.
Therefore, it is not exempted from complying with the clearance requirement of the LLDA.
It is a doctrine of long-standing that factual findings of administrative bodies on technical matters
within their area of expertise should be accorded not only respect but even finality if they are
supported by substantial evidence even if they are not overwhelming or preponderant. 69 Courts
will not interfere in matters which are addressed to the sound discretion of the government
agency entrusted with regulation of activities coming under the special and technical training and
knowledge of such agency. The exercise of administrative discretion is a policy decision and a
matter that is best discharged by the government agency concerned and not by the courts.70
The motives of the intervenors for filing the complaint are no longer relevant. Regardless of what
these motives may have been, the fact remains that the LLDA found petitioner to have violated
the pertinent environmental and regulatory laws.1ihpvva1
The Court recognizes the right of petitioner to engage in business and to profit from its industry.
However, the exercise of the right must conform to the laws and regulations laid down by the
competent authorities.
WHEREFORE, the foregoing premises considered, the Petition is DENIED. The Decision dated
May 30, 2005 and the Resolution dated January 31, 2006 of the Court of Appeals in CA-G.R. SP
No. 79889 are AFFIRMED.
SO ORDERED.

UNIVERSAL ROBINA CORP. (CORN DIVISION),

Petitioner,

G.R. No. 191427

Present:

68

- versus LAGUNA LAKE DEVELOPMENT AUTHORITY,

Respondent.

CARPIO MORALES, J., Chairperson,

BRION,
BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.
Promulgated:

May 30, 2011

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION

CARPIO MORALES, J.:

The present petition for review on certiorari assails the Court of Appeals Decision [1] dated

Hearings on petitioners pollution case were thereafter commenced on March 1, 2001.

Despite subsequent compliance monitoring and inspections conducted by the LLDA,

petitioners wastewater failed to conform to the parameters set by the aforementioned DAOs.

In early 2003, petitioner notified LLDA of its plan to upgrade the wastewater treatment
facility (WTF) of its corn oil refinery plant in an effort to comply with environmental laws, an
upgrade that was completed only in 2007.

October 27, 2009 and Resolution dated February 23, 2010 in CA-G. R. SP No. 107449.
On May 9, 2007 on its request, [2] a re-sampling of petitioners wastewater was
Universal Robina Corp. (petitioner) is engaged in, among other things, the manufacture of

conducted which showed that petitioners plant finally complied with government standards.

animal feeds at its plant in Bagong Ilog, Pasig City.

Petitioner soon requested for a reduction of penalties, by Manifestation and Motion [3] filed
Laguna Lake Development Authority (LLDA), respondent, through its Pollution Control
Division Monitoring and Enforcement Section, after conducting on March 14, 2000 a laboratory

on August 24, 2007 to which it attached copies of its Daily Operation Reports and
Certifications[4] to show that accrued daily penalties should only cover a period of 560 days.

analysis of petitioners corn oil refinery plants wastewater, found that it failed to comply with
government standards provided under Department of Environment and Natural Resources
(DENR) Administrative Orders (DAOs) Nos. 34 and 35, series of 1990.

LLDA later issued on May 30, 2000 an Ex-Parte Order requiring petitioner to explain
why no order should be issued for the cessation of its operations due to its discharge of pollutive
effluents into the Pasig River and why it was operating without a clearance/permit from the
LLDA.

Still later, the LLDA, after receiving a phone-in complaint conducted on August 31, 2000,
another analysis of petitioners wastewater, which showed its continued failure to conform to its
effluent standard in terms of Total Suspended Solids (TSS), Biochemical Oxygen Demand
(BOD), Color and Oil/Grease.

After conducting hearings, the LLDA issued its Order to Pay[5] (OP) dated January 21,
2008, the pertinent portion of which reads:
After careful evaluation of the case, respondent is found to be
discharging pollutive wastewater computed in two periods reckoned from
March 14, 2000 the date of initial sampling until November 3, 2003 the
date it requested for a re-sampling covering 932 days in consideration of the
interval of time when subsequent monitoring was conducted after an interval
of more than 2 years and from March 15, 2006 the date when re-sampling
was done until April 17, 2007 covering 448 days[6] for a total of 1,247 days.
WHEREFORE, premises considered, respondent is hereby
ordered to pay within fifteen (15) days from receipt hereof the accumulated
daily penalties amounting to a total of Pesos: One Million Two Hundred
Forty-Seven (Thousand) Pesos Only (PHP 1,247,000.00) prior to dismissal
of the case and without prejudice of filing another case for its subsequent
violations. (emphasis and underscoring supplied)

Petitioner moved to reconsider, praying that it be ordered to pay only accumulated

[7]

daily penalties in the sum of Five Hundred Sixty Thousand (P560,000) Pesos on grounds that

LLDAs order justified such recourse as an exception to the rule requiring exhaustion of
administrative remedies prior to judicial action.

the LLDA erred in first, adopting a straight computation of the periods of violation based on the
flawed assumption that petitioner was operating on a daily basis without excluding, among

By Decision of October 27, 2009 the appellate court affirmed both LLDA orders, which

others, the period during which the LLDA Laboratory underwent rehabilitation work from

it found to be amply supported by substantial evidence, the computation of the accumulated

December 1, 2000 to June 30, 2001 (covering 212 days); andsecond, in disregarding the Daily

daily penalties being in accord with prevailing DENR guidelines. The appellate court held that

Operation Reports and Certifications which petitioner submitted to attest to the actual number of

while petitioner may have offered documentary evidence to support its assertion that the days

its operating days, i.e., 560 days.

when it did not operate must be excluded from the computation, the LLDA has the prerogative to
disregard the same for being unverified, hence, unreliable.

[8]

By Order of July 11, 2008, the LLDA denied petitioners motion for reconsideration
and reiterated its order to pay the aforestated penalties, disposing of the issues thusly:

The appellate court went on to chide petitioners petition for certiorari as premature
since the law provides for an appeal from decisions or orders of the LLDA to the DENR

On the first issue, while it is true that the Authority failed to state in
its OP dated 21 January 2008 the basis for actual computation of the
accumulated daily penalties, the Authority would like to explain that its
computation was based on the following, to wit:
The computation of accumulated daily penalties was reckoned
period [sic] from 14 March 2000 the date of initial sampling to 03
November 2003 the date when its letter request for re-sampling was
received which covers 932 days computed at 6 days per week operation as
reflected in the Reports of Inspection. Since subsequent inspection
conducted after two (2) years and four (4) months, such period was
deducted from the computation. Likewise, the period when the LLDA
Laboratory was rehabilitated from December 1, 2000 to June 30, 2001 was
also deducted with a total of Two Hundred Twelve (212) days.
On the second claim, the same cannot be granted for lack of legal
basis since the documents submitted are self-serving. The period from 15
March 2006 to 17 April 2007 was computed from the date of re-sampling
when it failed to conform to the standards set by law up to the date of
receipt of its letter request for re-sampling prior to its compliance on May 9,
2007. The period covers 342 days.
Hence, respondent is found to be discharging pollutive
wastewater not conforming with the standards set by law computed from
March 14, 2000 November 3, 2003 covering 932 days and from March 15,
2006 April 17, 2007 covering 342 days for a total of 1,274 days.

Secretary or the Office of the President, a remedy which should have first been exhausted
before invoking judicial intervention.[9]

Petitioners motion for reconsideration having been denied by Resolution of February

23, 2010, it filed the present petition.

Petitioner cites deprivation of due process and lack of any plain, speedy or adequate
remedy as grounds which exempted it from complying with the rule on exhaustion of
administrative remedies.

The petition fails.

The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial

system. The thrust of the rule is that courts must allow administrative agencies to carry out their
functions and discharge their responsibilities within the specialized areas of their respective

Petitioner challenged by certiorari the twin orders before the Court of Appeals,

competence.[10] The rationale for this doctrine is obvious. It entails lesser expenses and provides

attributing to LLDA grave abuse of discretion in disregarding its documentary evidence, and

for the speedier resolution of controversies. Comity and convenience also impel courts of justice

maintaining that the lack of any plain, speedy or adequate remedy from the enforcement of

to shy away from a dispute until the system of administrative redress has been completed. [11]

requirements of administrative due process have been complied with

in this case.[14] (emphasis in the original)
Executive Order No. 192[12] (EO 192) was issued on June 10, 1987 for the salutary
purpose of reorganizing the DENR, charging it with the task of promulgating rules and
regulations for the control of water, air and land pollution as well as of promulgating ambient and
effluent standards for water and air quality including the allowable levels of other pollutants and
radiations. EO 192 also created the Pollution Adjudication Board under the Office of the DENR
Secretary which took over the powers and functions of the National Pollution Control
Commission with respect to the adjudication of pollution cases, including the latters role
as arbitrator for determining reparation, or restitution of the damages and losses resulting from
pollution.[13]

In fine, the assailed LLDA orders of January 21, 2008 and July 11, 2008 correctly
reckoned the two periods within which petitioner was found to have continued discharging
pollutive wastewater and applied the penalty as provided for under Article VI, Section 32 of LLDA
Resolution No. 33, Series of 1996.[15] LLDAs explanation that behind its inclusion of certain
days in its computation of the imposable penalties that it had already deducted not just
the period during which the LLDA Laboratory underwent rehabilitation work from December 1,
2000 to June 30, 2001 (covering 212 days) but had also excluded from the computation the
period during which no inspections or compliance monitorings were conducted (a period

Petitioner had thus available administrative remedy of appeal to the DENR

covering two years and four months) is well-taken.

Secretary. Its contrary arguments to show that an appeal to the DENR Secretary would be an
exercise in futility as the latter merely adopts the LLDAs findings is at best, speculative and
presumptuous.

It is noted that during the hearing on June 19, 2007, the LLDA gave petitioner the
opportunity to submit within fifteen (15) days.any valid documents to show proof of its nonoperating dates that would be necessary for the possible reduction of the accumulated daily

As for petitioners invocation of due process, it fails too. The appellate court thus aptly
brushed aside this claim, in this wise:
Due process, as a constitutional precept, does not always and in
all situations require a trial-type proceeding. Due process is satisfied when a
person is notified of the charge against him and given an opportunity to
explain or defend himself. In administrative proceedings, the filing of
charges and giving reasonable opportunity for the person so charged to
answer the accusations against him constitute the minimum requirements of
due process. The essence of due process is simply 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.
. . . Administrative due process cannot be fully equated with
due process in its strict judicial sense for it is enough that the party is
given the chance to be heard before the case against him is decided.
Here, petitioner URC was given ample opportunities to be heard it was
given show cause orders and allowed to participate in hearing to rebut the
allegation against it of discharging pollutive wastewater to the Pasig River, it
was given the chance to present evidences in support of its claims, it was
notified of the assailed Order to Pay, and it was allowed to file a motion for
reconsideration. Given these, we are of the view that the minimum

penalties,[16] but petitioner failed to comply therewith.

As earlier noted, petitioner filed a Manifestation and Motion to which it attached Daily
Operation Reports and Certifications, which voluminous documents were, however,unverified in
derogation of Rule X, Section 2[17] of the 2004 Revised Rules, Regulations and Procedures
Implementing Republic Act No. 4850. Absent such verification, the LLDA may not be faulted for
treating such evidence to be purely self-serving.

Respecting LLDAs decision not to attach any evidentiary weight to the Daily
Operation Reports or Certifications, recall that the LLDA conducted an analysis of petitioners
wastewater discharge on August 31, 2000, upon receiving a phone-in complaint. And it
conducted too an analysis on May 3, 2002 in the course of periodic compliance monitoring. The
Daily Operation Reports for both August 31, 2000[18] and May 3, 2002[19] submitted by petitioner
clearly manifest that the plant did not operate on those dates. On the other hand, LLDAs
Investigation Report and Report of Inspection [20] dated August 31, 2000 and May 3, 2002,

respectively, disclose otherwise. Petitioner never disputed the factual findings reflected in these
reports. Thus spawns doubts on the veracity and accuracy of the Daily Operation Reports.

Petitioner asserts that LLDA had not credited it for undertaking remedial measures to
rehabilitate its wastewater treatment facility, despite the prohibitive costs and at a time when its

YNARES-SANTIAGO, J.:
Before us is a petition for review [1] on certiorari assailing the decision [2] dated May 28, 2001
of the Regional Trial Court of Davao City, Branch 33, which granted the writ of mandamus and
injunction in favor of respondent, the City of Davao, and against petitioner, the Republic,
represented by the Department of Environment and Natural Resources (DENR). The trial court
also directed petitioner to issue a Certificate of Non-Coverage in favor of respondent.

income from the agro-industrial business was already severely affected by a poor business
The antecedent facts of the case are as follows:

climate; and that the enforcement of the assailed LLDA orders amounted to a gross disincentive
to its business.

Without belaboring petitioners assertions, it must be underscored that the protection

of the environment, including bodies of water, is no less urgent or vital than the pressing
concerns of private enterprises, big or small. Everyone must do their share to conserve the
national patrimonys meager resources for the benefit of not only this generation, but of those to
follow. The length of time alone it took petitioner to upgrade its WTF (from 2003 to 2007), a
move arrived at only under threat of continuing sanctions, militates against any genuine concern
for the well-being of the countrys waterways.

WHEREFORE, the petition is DENIED. The October 27, 2009 Decision and the
February

23,

2010

Resolution,

of

the

Court

of

Appeals

in

CA-G.

R.

SP

No.

107449, areAFFIRMED.

On August 11, 2000, respondent filed an application for a Certificate of Non-Coverage

(CNC) for its proposed project, the Davao City Artica Sports Dome, with the Environmental
Management Bureau (EMB), Region XI. Attached to the application were the required
documents for its issuance, namely, a) detailed location map of the project site; b) brief project
description; and c) a certification from the City Planning and Development Office that the project
is not located in an environmentally critical area (ECA). The EMB Region XI denied the
application after finding that the proposed project was within an environmentally critical area and
ruled that, pursuant to Section 2, Presidential Decree No. 1586, otherwise known as the
Environmental Impact Statement System, in relation to Section 4 of Presidential Decree No,
1151, also known as the Philippine Environment Policy, the City of Davao must undergo the
environmental impact assessment (EIA) process to secure an Environmental Compliance
Certificate (ECC), before it can proceed with the construction of its project.
Believing that it was entitled to a Certificate of Non-Coverage, respondent filed a petition
for mandamus and injunction with the Regional Trial Court of Davao, docketed as Civil Case No.
28,133-2000. It alleged that its proposed project was neither an environmentally critical project
nor within an environmentally critical area; thus it was outside the scope of the EIS
system. Hence, it was the ministerial duty of the DENR, through the EMB-Region XI, to issue a
CNC in favor of respondent upon submission of the required documents.
The Regional Trial Court rendered judgment in favor of respondent, the dispositive portion
of which reads as follows:

SO ORDERED.

[G.R. No. 148622. September 12, 2002]

REPUBLIC OF THE PHILIPPINES, represented by HON. HEHERSON T. ALVAREZ, in his
capacity as Secretary of the DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES (DENR), CLARENCE L. BAGUILAT, in his capacity as the Regional
Executive Director of DENR-Region XI and ENGR. BIENVENIDO L. LIPAYON, in
his capacity as the Regional Director of the DENR-ENVIRONMENTAL
MANAGEMENT BUREAU (DENR-EMB), Region XI, petitioners, vs. THE CITY OF
DAVAO, represented by BENJAMIN C. DE GUZMAN, City Mayor, respondent.
DECISION

WHEREFORE, finding the petition to be meritorious, judgment granting the writ of mandamus
and injunction is hereby rendered in favor of the petitioner City of Davao and against
respondents Department of Environment and Natural Resources and the other respondents by:
1)
directing the respondents to issue in favor of the petitioner City of Davao a Certificate
of Non-Coverage, pursuant to Presidential Decree No. 1586 and related laws, in connection with
the construction by the City of Davao of the Artica Sports Dome;
2)

making the preliminary injunction issued on December 12, 2000 permanent.

Costs de oficio.
SO ORDERED.[3]

The trial court ratiocinated that there is nothing in PD 1586, in relation to PD 1151 and
Letter of Instruction No. 1179 (prescribing guidelines for compliance with the EIA system), which
requires local government units (LGUs) to comply with the EIS law. Only agencies and
instrumentalities of the national government, including government owned or controlled
corporations, as well as private corporations, firms and entities are mandated to go through the
EIA process for their proposed projects which have significant effect on the quality of the
environment. A local government unit, not being an agency or instrumentality of the National
Government, is deemed excluded under the principle of expressio unius est exclusio alterius.
The trial court also declared, based on the certifications of the DENR-Community
Environment and Natural Resources Office (CENRO)-West, and the data gathered from the
Philippine Institute of Volcanology and Seismology (PHIVOLCS), that the site for the Artica
Sports Dome was not within an environmentally critical area. Neither was the project an
environmentally critical one. It therefore becomes mandatory for the DENR, through the EMB
Region XI, to approve respondents application for CNC after it has satisfied all the requirements
for its issuance. Accordingly, petitioner can be compelled by a writ of mandamus to issue the
CNC, if it refuses to do so.
Petitioner filed a motion for reconsideration, however, the same was denied. Hence, the
instant petition for review.
With the supervening change of administration, respondent, in lieu of a comment, filed a
manifestation expressing its agreement with petitioner that, indeed, it needs to secure an ECC
for its proposed project. It thus rendered the instant petition moot and academic. However, for
the guidance of the implementors of the EIS law and pursuant to our symbolic function to
educate the bench and bar,[4] we are inclined to address the issue raised in this petition.

WHEREAS, the pursuit of a comprehensive and integrated environmental protection program

necessitates the establishment and institutionalization of a system whereby the exigencies of
socio-economic undertakings can be reconciled with the requirements of environmental quality;
x x x.
Section 1. Policy. It is hereby declared the policy of the State to attain and maintain a rational
and orderly balance between socio-economic growth and environmental protection.
xxx

xxx

xxx

Section 4. Presidential Proclamation of Environmentally Critical Areas and Projects. The

President of the Philippines may, on his own initiative or upon recommendation of the National
Environmental Protection Council, by proclamation declare certain projects, undertakings or
areas in the country as environmentally critical. No person, partnership or corporation shall
undertake or operate any such declared environmentally critical project or area without first
securing an Environmental Compliance Certificate issued by the President or his duly authorized
representative. For the proper management of said critical project or area, the President may by
his proclamation reorganize such government offices, agencies, institutions, corporations or
instrumentalities including the realignment of government personnel, and their specific functions
and responsibilities.
Section 4 of PD 1586 clearly states that no person, partnership or corporation shall
undertake or operate any such declared environmentally critical project or area without first
securing an Environmental Compliance Certificate issued by the President or his duly authorized
representative.[13] The Civil Code defines a person as either natural or juridical. The state and its
political subdivisions, i.e., the local government units[14] are juridical persons.[15] Undoubtedly
therefore, local government units are not excluded from the coverage of PD 1586.

Section 15 of Republic Act 7160,[5] otherwise known as the Local Government Code,
defines a local government unit as a body politic and corporate endowed with powers to be
exercised by it in conformity with law. As such, it performs dual functions, governmental and
proprietary. Governmental functions are those that concern the health, safety and the
advancement of the public good or welfare as affecting the public generally. [6] Proprietary
functions are those that seek to obtain special corporate benefits or earn pecuniary profit and
intended for private advantage and benefit. [7] When exercising governmental powers and
performing governmental duties, an LGU is an agency of the national government. [8] When
engaged in corporate activities, it acts as an agent of the community in the administration of
local affairs.[9]

Lastly, very clear in Section 1 of PD 1586 that said law intends to implement the policy of
the state to achieve a balance between socio-economic development and environmental
protection, which are the twin goals of sustainable development. The above-quoted first
paragraph of the Whereas clause stresses that this can only be possible if we adopt a
comprehensive and integrated environmental protection program where all the sectors of the
community are involved, i.e., the government and the private sectors. The local government
units, as part of the machinery of the government, cannot therefore be deemed as outside the
scope of the EIS system.[16]

Found in Section 16 of the Local Government Code is the duty of the LGUs to promote the
peoples right to a balanced ecology.[10] Pursuant to this, an LGU, like the City of Davao, can not
claim exemption from the coverage of PD 1586. As a body politic endowed with governmental
functions, an LGU has the duty to ensure the quality of the environment, which is the very same
objective of PD 1586.

The foregoing arguments, however, presuppose that a project, for which an Environmental
Compliance Certificate is necessary, is environmentally critical or within an environmentally
critical area. In the case at bar, respondent has sufficiently shown that the Artica Sports Dome
will not have a significant negative environmental impact because it is not an environmentally
critical project and it is not located in an environmentally critical area. In support of this
contention, respondent submitted the following:

Further, it is a rule of statutory construction that every part of a statute must be interpreted
with reference to the context, i.e., that every part must be considered with other parts, and kept
subservient to the general intent of the enactment. [11] The trial court, in declaring local
government units as exempt from the coverage of the EIS law, failed to relate Section 2 of PD
1586[12] to the following provisions of the same law:

1.
Certification from the City Planning and Development Office that the project is not located
in an environmentally critical area;

2.
Certification from the Community Environment and Natural Resources Office (CENROWest) that the project area is within the 18-30% slope, is outside the scope of the NIPAS (R.A.
7586), and not within a declared watershed area; and

(b)
any adverse environmental effect which cannot be avoided should the proposal be
implemented
(c)

3.
Certification from PHILVOCS that the project site is thirty-seven (37) kilometers southeast
of the southernmost extension of the Davao River Fault and forty-five (45) kilometers west of the
Eastern Mindanao Fault; and is outside the required minimum buffer zone of five (5) meters from
a fault zone.
The trial court, after a consideration of the evidence, found that the Artica Sports Dome is
not within an environmentally critical area. Neither is it an environmentally critical project. It is
axiomatic that factual findings of the trial court, when fully supported by the evidence on record,
are binding upon this Court and will not be disturbed on appeal. [17] This Court is not a trier of
facts.[18]
There are exceptional instances when this Court may disregard factual findings of the trial
court, namely: a) when the conclusion is a finding grounded entirely on speculations, surmises,
or conjectures; b) when the inference made is manifestly mistaken, absurd, or impossible; c)
where there is a grave abuse of discretion; d) when the judgment is based on a
misapprehension of facts; e) when the findings of fact are conflicting; f) when the Court of
Appeals, in making its findings, went beyond the issues of the case and the same are contrary to
the admissions of both appellant and appellee; g) when the findings of the Court of Appeals are
contrary to those of the trial court; h) when the findings of fact are conclusions without citation of
specific evidence on which they are based; i) when the finding of fact of the Court of Appeals is
premised on the supposed absence of evidence but is contradicted by the evidence on record;
and j) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the
parties and which, if properly considered, would justify a different conclusion. [19] None of these
exceptions, however, obtain in this case.
The Environmental Impact Statement System, which ensures environmental protection
and regulates certain government activities affecting the environment, was established by
Presidential Decree No. 1586. Section 2 thereof states:

alternative to the proposed action

(d)
a determination that the short-term uses of the resources of the environment are
consistent with the maintenance and enhancement of the long-term productivity of the same;
and
(e)
whenever a proposal involves the use of depletable or nonrenewable resources, a
finding must be made that such use and commitment are warranted.
Before an environmental impact statement is issued by a lead agency, all agencies having
jurisdiction over, or special expertise on, the subject matter involved shall comment on the draft
environmental impact statement made by the lead agency within thirty (30) days from receipt of
the same.
Under Article II, Section 1, of the Rules and Regulations Implementing PD 1586, the
declaration of certain projects or areas as environmentally critical, and which shall fall within the
scope of the Environmental Impact Statement System, shall be by Presidential Proclamation, in
accordance with Section 4 of PD 1586 quoted above.
Pursuant thereto, Proclamation No. 2146 was issued on December 14, 1981, proclaiming
the following areas and types of projects as environmentally critical and within the scope of the
Environmental Impact Statement System established under PD 1586:
A.

Environmentally Critical Projects

I.

Heavy Industries

There is hereby established an Environmental Impact Statement System founded and based on
the environmental impact statement required under Section 4 of Presidential Decree No. 1151,
of all agencies and instrumentalities of the national government, including government-owned or
controlled corporations, as well as private corporations, firms and entities, for every proposed
project and undertaking which significantly affect the quality of the environment.
d.

a.

Non-ferrous metal industries

b.

Iron and steel mills

c.

Petroleum and petro-chemical industries including oil and gas

Smelting plants

Section 4 of PD 1151, on the other hand, provides:

II.
Environmental Impact Statements. Pursuant to the above enunciated policies and goals, all
agencies and instrumentalities of the national government, including government-owned or
controlled corporations, as well as private corporations, firms and entities shall prepare, file and
include in every action, project or undertaking which significantly affects the quality of the
environment a detailed statement on
(a)

the environmental impact of the proposed action, project or undertaking

Resource Extractive Industries

a.

b.

Major mining and quarrying projects

Forestry projects
1.

Logging

2.

Major wood processing projects

3. Introduction of fauna (exotic-animals) in public/private

forests
10.
4.

Forest occupancy

5.

Extraction of mangrove products

8.

Areas classified as prime agricultural lands;

9.

Recharged areas of aquifers;

Water bodies characterized by one or any combination of the following conditions;

a.

tapped for domestic purposes

b.

6.

Grazing

c.
1.
III.

Fishery Projects

c.

Dikes for/and fishpond development projects

11.

Infrastructure Projects
a.

Major dams
b.

c.
d.

Major power plants (fossil-fueled, nuclear fueled,

hydroelectric or geothermal)

which support wildlife and fishery activities

Mangrove areas characterized by one or any combination of the following conditions:
a.

with primary pristine and dense young growth;

b.

adjoining mouth of major river systems;

c.
near or adjacent to traditional productive fry or fishing
grounds;

Major reclamation projects

d.

which act as natural buffers against shore erosion,

strong winds and storm floods;

Major roads and bridges

e.

B.

within the controlled and/or protected areas declared by

appropriate authorities

on which people are dependent for their livelihood.

Environmentally Critical Areas

12.
1.

2.

All areas declared by law as national parks, watershed reserves, wildlife

preserves and sanctuaries;

Areas set aside as aesthetic potential tourist spots;

3.

Areas which constitute the habitat for any endangered or threatened

species of indigenous Philippine Wildlife (flora and fauna);

c.

Coral reefs, characterized by one or any combinations of the following conditions:

a.

with 50% and above live coralline cover;

b.

spawning and nursery grounds for fish;

which act as natural breakwater of coastlines.

In this connection, Section 5 of PD 1586 expressly states:

4.

Areas of unique historic, archaeological, or scientific interests;

5.

Areas which are traditionally occupied by cultural communities or tribes;

6.

7.

Areas frequently visited and/or hard-hit by natural calamities (geologic

hazards, floods, typhoons, volcanic activity, etc.);

Areas with critical slopes;

Environmentally Non-Critical Projects. All other projects, undertakings and areas not declared
by the President as environmentally critical shall be considered as non-critical and shall not be
required to submit an environmental impact statement. The National Environmental Protection
Council, thru the Ministry of Human Settlements may however require non-critical projects and
undertakings to provide additional environmental safeguards as it may deem necessary.
The Artica Sports Dome in Langub does not come close to any of the projects or areas
enumerated above. Neither is it analogous to any of them. It is clear, therefore, that the said

project is not classified as environmentally critical, or within an environmentally critical

area. Consequently, the DENR has no choice but to issue the Certificate of Non-Coverage. It
becomes its ministerial duty, the performance of which can be compelled by writ of mandamus,
such as that issued by the trial court in the case at bar.
WHEREFORE, in view of the foregoing, the instant petition is DENIED. The decision of
the Regional Trial Court of Davao City, Branch 33, in Civil Case No. 28,133-2000, granting the
writ of mandamus and directing the Department of Environment and Natural Resources to issue
in favor of the City of Davao a Certificate of Non-Coverage, pursuant to Presidential Decree No.
1586 and related laws, in connection with the construction of the Artica Sports Dome, is
AFFIRMED.
SO ORDERED.

[G.R. No. 137174. July 10, 2000]

REPUBLIC OF THE PHILIPPINES, Represented by the POLLUTION ADJUDICATION
BOARD
(DENR), petitioner,
vs. MARCOPPER
MINING
CORPORATION, respondent.
DECISION
GONZAGA-REYES, J.:
In this petition for review on certiorari, petitioner REPUBLIC OF THE PHILIPPINES
through the Pollution Adjudication Board of the Department of Environment and Natural
Resources seeks to annul the Decision [1] of the Court of Appeals[2] in CA-G.R. SP No. 44656
setting aside the Order[3] of the Pollution Adjudication Board[4] in DENR-PAB Case No. 04-0059796; as well as the Resolution[5] denying reconsideration of said Decision.
The following antecedent facts are undisputed:

Respondent Marcopper Mining Corporation (MMC) was issued a temporary permit to

operate a tailings[6] sea disposal system under TPO No. POW-85-454-EJ for the period October
31, 1985 to October 21, 1986. Before it expired, MMC filed an application for the renewal thereof
with the National Pollution Control Commission (NPCC). On September 20, 1986, MMC
received a telegraphic order from the NPCC directing the former to (i)mmediately cease and
desist from discharging mine tailings into Calancan Bay. The directive was brought about
through the efforts of certain religious groups which had been protesting MMCs tailings sea
disposal system. MMC requested the NPCC to refrain from implementing the aforesaid directive
until its adoption of an alternative tailings disposal system. The NPCC granted MMCs request
and called a conference to discuss possible alternative disposal systems. Consequently, an
Environmental Technical Committee, composed of representatives from the NPCC, the Bureau
of Mines and Geo-Sciences, and MMC was created to study the feasibility of various tailings
disposal systems that may be appropriate for utilization by MMC and to submit its findings and
recommendations thereon.
Meanwhile, after the expiration of MMCs TPO No. POW-85-454-EJ on October 21, 1986,
the NPCC issued to MMC a new temporary permit, TPO No. POW-86-454-EJ dated November
11, 1986, to expire on February 10, 1987, with the condition that [t]he tailings disposal system
shall be transferred to San Antonio Pond within two (2) months from the date of this
permit. MMC moved for the deletion of the condition stating that it needed to develop and mine
the ore deposits underneath the San Antonio pond for it to continue its mining operations. In
a letter-manifestation dated February 5, 1987, MMC requested the NPCC for an extension of
TPO No. POW-86-454-EJ and the indefinite suspension of the condition in said permit until such
time that the NPCC shall have finally resolved the NPCC case entitled Msgr. Rolly Oliverio, et
al. vs. Marcopper Mining Corporation.
In the meantime, the NPCC was abolished by Executive Order No. 192 [7] dated June 10,
1987, and its powers and functions were integrated into the Environmental Management Bureau
and into the Pollution Adjudication Board (PAB).[8]
On April 11, 1988, the Secretary of Environment and Natural Resources, in his capacity as
Chairman of the PAB, issued an Order directing MMC to cease and desist from discharging
mine tailings into Calancan Bay. The order reads:
The Temporary Permit to Operate issued to Marcopper Mining Corporation expired on February
10, 1987.
Section 96 of the National Pollution Control Commission (NPCC) Rules and Regulations, which
were adopted by the Board, provides that in no case can a permit be valid for more than one (1)
year.
Records show that Marcopper Mining Corporation has not filed any application for renewal of the
permit.
Marcopper Mining Corporation is hereby ordered to cease and desist from discharging mine
tailings into Calancan Bay immediately upon receipt of this Order.
SO ORDERED.[9]

Immediately thereafter, the DENR Undersecretary for Environment and Research issued a
telegraphic order dated April 15, 1988, enjoining immediate compliance by MMC of the cease
and desist order of April 11, 1988.
MMC appealed the above orders of April 11, 1988 and April 15, 1988 to the Office of the
President, docketed as O.P. Case No. 3802. In an Order dated May 2, 1988, the Office of the
President denied MMCs requests for issuance of restraining orders against the orders of the
PAB. Consequently, MMC filed an Urgent Ex-Parte Partial Motion for Reconsideration dated
May 6, 1988, seeking the reconsideration of the above Order. In an Order dated May 13, 1988,
the Office of the President granted the above partial motion for reconsideration, thus:

This brings to the fore the primordial issue of whether or not the Secretary of Environment and
Natural Resources gravely erred in declaring the TPO No. POW-86-454-EJ issued to
respondent-appellant MMC expired on February 10, 1987, and in ordering the latter to cease
and desist from discharging mine tailings into Calancan Bay.
Respondent-appellant argues that the cease and desist orders were issued by the PAB ex-parte,
in violation of its procedural and substantive rights provided for under Section 7 (a) of P.D. No.
984 requiring a public hearing before any order or decision for the discontinuance of discharge
of a sewage or industrial wastes into the water, air or land could be issued by the PAB.
We are not persuaded.

WHEREFORE, the instant Urgent Ex-Parte Motion for Reconsideration is hereby GRANTED,
and the Order of this Office, dated May 2, 1988, is hereby set aside insofar as it denies
respondent-appellants requests for issuance of restraining orders.
Accordingly, the Pollution Adjudication Board, its agents, deputies or representatives are hereby
enjoined from enforcing its cease and desist order of April 15, 1988 pending resolution by this
Office of respondent-appellants appeal from said orders.
It is further directed that the status quo obtaining prior to the issuance of said cease and desist
order be maintained until further orders from this Office.
It is understood, however, that during the efficacy of this restraining order, respondent-appellant
shall immediately undertake, at a cost of not less than P30,000.00 a day, the building of artificial
reefs and planting of sea grass, mangroves and vegetation on the causeway of Calancan Bay
under the supervision of the Pollution Adjudication Board and subject to such guidelines as the
Board may impose.
SO ORDERED.[10]
In line with the directive from the Office of the President, the Calancan Bay Rehabilitation
Project (CBRP) was created, and MMC remitted the amount of P30,000.00 a day, starting from
May 13, 1988 to the Ecology Trust Fund (ETF) thereof. However, on June 30, 1991, MMC
stopped discharging its tailings in the Bay, hence, it likewise ceased from making further
deposits to the ETF.
From the issuance of the Order on May 13, 1988 until the cessation of the tailings disposal
on June 30, 1991, MMC made its contribution to the ETF in the total amount of Thirty-Two
Million Nine Hundred and Seventy-Five Thousand Pesos (P32,975,000.00). Thereafter, MMC
filed a Motion dated July 9, 1991 manifesting that it would discontinue its
contributions/deposits to the ETF since it had stopped dumping tailings in the Bay. MMC
prayed that the Order issued by the Office of the President on May 13, 1988 be lifted.
On February 5, 1993, the Office of the President rendered a decision in O.P. Case No.
3802 dismissing the appeal; affirming the cease and desist Order issued by the PAB; and lifting
the TRO dated May 13, 1988. The Office of the President resolved the appeal in this wise:

Section 7(a) of P.D. No. 984, reads in part:

Sec. 7(a) Public Hearing. Public hearing shall be conducted by the Commissioner, Deputy
Commissioner or any senior official duly designated by the Commissioner prior to issuance or
promulgation of any order or decision by the Commissioner requiring the discontinuance of
discharge of sewage, industrial wastes and other wastes into the water, air or land resources of
the Philippines as provided in the Decree: provided, that whenever the Commission finds
a 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. x x x . (underscoring supplied).
Clearly then, it is self-indulgent nonsense to assume that the DENR Secretary, acting as PAB
Chairman, is absolutely without authority to issue an ex-parte order requiring the discontinuance
of discharge of sewage or other industrial wastes without public hearing. As can be gleaned
from the afroequoted proviso, this authority to issue an ex-parte order suspending the discharge
of industrial wastes is postulated upon his finding of prima-facie evidence of an imminent threat
to life, public health, safety or welfare, to animal or plant life or exceeds the allowable standards
set by the Commission.[11]
In a letter dated January 22, 1997[12], Municipal Mayor Wilfredo A. Red of Sta. Cruz,
Marinduque informed the PAB that MMC stopped remitting the amount of 30,000.00 per day as
of July 1, 1991 to the ETF of the CBRP. This letter-complaint of Mayor Red was docketed as
DENR-PAB Case No. 04-00597-96, for violation of P.D. 984 [13] and its implementing Rules and
Regulations.
In an order dated April 23, 1997, the PAB ruled that the obligation of MMC to deposit
P30,000.00 per day to the ETF of the CBRP subsists, as provided for in the Order of the Office
of the President dated May 13, 1988, during the efficacy of said order restraining the PAB from
enforcing its cease and desist order against MMC. Since the Order was lifted only on February
5, 1993, the obligation of MMC to remit was likewise extinguished only on said date and not
earlier as contended by MMC from the time it ceased dumping tailings into the Bay on July 1,
1991. We quote in part:

The issue before this Board is whether Marcopper Mining Corporation is still obliged to remit
the amount of P30,000.00 to the CBRP. The answer by the Order from the Office of the
President dated 13 May 1988, which states that the obligation on the part of Marcopper Mining
to pay the amount of P30,000.00 per day for the rehabilitation of Calancan Bay is binding only
during the efficacy of the said Order.

In view of the foregoing, the instant petition is hereby GRANTED and, accordingly, the
questioned Order of respondent Pollution Adjudication Board dated 23 April 1997 is hereby SET
ASIDE. Respondents are ordered to REFRAIN and DESIST from enforcing aforesaid
Order. The injunctive bond filed by the petitioner in the amount of Five Hundred Thousand
(P500,000.00) is hereby RELEASED.

The record further shows that on 05 February 1993, the Office of the President lifted its Order
dated 13 May 1988. This means that as of the date of the lifting, Marcopper Mining Corporation
no longer had any obligation to remit the amount of P30,000.00 to the CBRP. Thus,
Marcoppers obligation only runs from 13 May 1988 to 05 February 1993. Beyond the cut-off
date of 05 February 1993, Marcopper is no longer obligated to remit the amount of P30,000.00
per day to the CBRP.

The motion for reconsideration of the above decision was denied in a Resolution dated
January 13, 1999 of the Court of Appeals.

It does not matter whether Marcopper was no longer dumping its tail minings into the sea even
before the cut-off date of 05 February 1993. The obligation of Marcopper to pay the amount of
P30,000.00 to the CBRP arises from the Office of the President Order dated 13 May 1988, not
from it dumping of mine tailings.
WHEREFORE, Marcopper Mining Corporation is hereby ordered to pay the CBRP the amount of
P30,000.00 per day, computed from the date Marcopper Mining Corporation stopped paying on
01 July 1991, up to the formal lifting of the subject Order from the Office of the President on 05
February 1993.
SO ORDERED.

[14]

MMC assailed the aforequoted Order dated April 23, 1997 of the PAB as null and void for
having been issued without jurisdiction or with grave abuse of discretion in a petition for
Certiorari and Prohibition (with prayer for temporary restraining order and preliminary injunction)
before the Court of Appeals which was docketed as CA-G.R. No. SP-44656. In a Resolution
dated July 15, 1997, the Court of Appeals required the PAB and its members to comment on
said petition.
On November 19, 1997, the Office of the Solicitor General, on behalf of the PAB and its
members, filed with the Court of Appeals the required comment.
On September 15, 1997, for purposes of determining whether or not to grant MMCs
prayer for a temporary restraining order and preliminary injunction, the Court of Appeals
conducted a hearing where counsel for the parties were heard on oral arguments.
In a Resolution dated September 19, 1997, the Court of Appeals issued a writ of
preliminary injunction, conditioned upon the filing of a bond by MMC in the amount of
P500,000.00 enjoining the PAB and its members to cease and desist from enforcing the assailed
Order dated April 23, 1997, until it had made a full determination on the merits of the case.
On January 7, 1998, the Court of Appeals promulgated a Decision in CA-G.R. SP No.
44656, the dispositive portion of which reads:

Hence, the instant petition on the following grounds:

I
The Court of Appeals erred in ruling that Republic Act No. 7942 (otherwise known as the
Philippine Mining Act of 1995) repealed the provisions of Republic Act No. 3931, as amended by
Presidential Decree No. 984, (otherwise known as the National Pollution Control Decree of
1976), with respect to the power and function of petitioner Pollution Adjudication Board to issue,
renew or deny permits for the discharge of the mine tailings.
II
Respondent Marcopper Mining Corporation bound itself to pay the amount of P30,000.00 a day
for the duration of the period starting May 13, 1988 up to February 5, 1993.
III
Respondent Marcopper Mining Corporation was not deprived of due process of law when
petitioner Pollution Adjudication Board directed it to comply with its long-existing P30,000.00 per
day obligation under the Order of the Office of the President dated May 13, 1988.[15]
In setting aside the Order of the PAB dated April 23, 1997, requiring MMC to pay its
arrears in deposits, the Court of Appeals ruled that the PAB exceeded its power and authority in
issuing the subject Order for the following reasons:
The applicable and governing law in this petition is Republic Act No. 7942 otherwise known as
the Philippine Mining Act of 1995 (Mining Act, approved on March 3, 1995).
Chapter XI of the Mining Act contains a series of provisions relating to safety and environmental
protection on mining and quarrying operations. More specifically, Section 67 of the Mining Act in
essence, grants the mines regional director the power to issue orders or to take appropriate
measures to remedy any practice connected with mining or quarrying operations which is not in
accordance with safety and anti-pollution laws and regulations.
From a reading of that provision, it would appear therefore that prior to the passage of
the Mining Act, the Pollution Adjudication Board had jurisdiction to act on pollution-related
matters in the mining business. With the effectivity of the Mining Act and in congruence with its
Sec. 115 (i.e., Repealing and Amending Clause), the power to impose measures against

violations of environmental policies by mining operators is now vested on the mines regional
director. Be that as it may, we are constrained to enunciate that the PAB had no authority to
issue the challenged Order dated 23 April 1997. More so, respondent PAB as petitioner
argued and We note, had remained perplexingly silent on the matter for almost six (6) years
from July 1991 when MMC ceased to make its deposits up to April 1997 when respondent PAB
precipitately issued the Order requiring MMC to pay its arrears in deposits to the ETF. And PAB,
apparently oblivious to MMCs economic quandary had issued said Order ex-parte without
hearing or notice.
x x x
As a general rule, the adjudication of pollution cases pertains to the Pollution Adjudication Board
(PAB), except in cases where the special law, expressly or impliedly, provides for another forum,
as in the instant petition.
Thus under Republic Act No. 7942 and its implementing rules and regulations, the mines
regional director, in consultation with the Environmental Management Bureau (italics ours), is
specifically mandated to carry out and make effective the declared national policy that the State
shall promote the rational exploration, development, utilization and conservation of all mineral
resources in public and private lands within the territory and exclusive economic zone of the
Republic of the Philippines, through the combined efforts of government and the private sector in
order to enhance national growth and protect the rights of affected communities. (Sec. 2, R.A.
7942).
Under this expansive authority, the Mines Regional Director, by virtue of this special law, has the
primary responsibility to protect the communities surrounding a mining site from the deleterious
effects of pollutants emanating from the dumping of tailing wastes from the surrounding
areas. Thus, in the exercise of its express powers under this special law, the authority of the
Mines Regional Director to impose appropriate protective and/or preventive measures with
respect to pollution cases within mining operations is perforce, implied. Otherwise, the special
law granting this authority may well be relegated to a mere paper tiger talking protection but
allowing pollution.
It bears mention that the Pollution Adjudication Board has the power to issue an ex-parte order
when there is prima facie evidence of an establishment exceeding the allowable standards set
by the anti-pollution laws of the country. (Pollution Adjudication Board v. Court of Appeals, et al.,
195 SCRA 112). However, with the passage of R.A. 7942, insofar as the regulation, monitoring
and enforcement of anti-pollution laws are concerned with respect to mining establishments, the
Mines Regional Director has a broad grant of power and authority. Clearly, pollution-related
issues in mining operations are addressed to the Mines Regional Director, not the Pollution
Adjudication Board.
This being the case, the questioned Order dated 23 April 1997 requiring MMC to pay its arrears
in deposits was beyond the power and authority of the Pollution Adjudication Board to issue and
as such, petitioner may seek appropriate injunctive relief from the court. Thus, certiorari lies
against public respondent PAB.[16]

The Court of Appeals likewise ruled that the obligation of MMC to contribute to the ETF of
the CBRP ceased inasmuch as the latter discontinued dumping tailings into the Bay and the
actual funds in the ETF are sufficient to rehabilitate the Bay. It ratiocinated thus:
In the instant case, it is of record that petitioner MMC undertakes its obligation to provide for
the rehabilitation of the Bay waters. This obligation, through its monetary contribution to the
ETF, is however anchored on its continuing disposal of the mines tailings waste into the
Bay. Hence, since it ceased its mining operations in the affected area as of July 1991 and had
not been discharging any tailings wastes since then, its consequent duty to rehabilitate the
polluted waters, if any, no longer exists.
x x x
Be that as it may, this Court observes that out of the approximate sum of thirty-two (32) million
pesos contributed by the petitioner to the ETF there is admittedly an existing estimated balance
of fourteen (14) million pesos in the Fund. For its part, petitioner does not renege on its
obligation to rehabilitate and in fact undertakes to continue the rehabilitation process until its
completion within two (2) years time and which would only cost six (6) million pesos. Thus, as
petitioner convincingly argued and which respondent unsatisfactorily rebuked, the existing
fourteen (14) million pesos in the ETF is more than enough to complete the rehabilitation
project. (TSN, Hearing dated 15 September 1997, at pp. 56 to 62, Rollo).
xxx. Without much ado, the Court concurs with the finding that to demand a daily deposit of
thirty thousand (P30, 000.00) pesos even if the root of the obligation, that is, the dumping of
tailings waste, had ceased to exist, is indubitably of a herculean and onerous burden on the part
of petitioner amounting to a deprivation of its property and a denial of its right to due process. [17]
Unsatisfied, the OSG argues that the Philippine Mining Act of 1995 did not amend or
repeal the provisions of Republic Act No. 3931, as amended by Presidential Decree No. 984
(otherwise known as the National Pollution Control Decree of 1976); that the Mines Regional
Director has no power over areas outside mining installations and over areas which are not part
of the mining or quarrying operations such as Calancan Bay; that the powers of the Mines
Regional Director cannot be exercised to the exclusion of other government agencies; that the
jurisdiction of a Mines Regional Director with respect to anti-pollution laws is limited to practices
committed within the confines of a mining or quarrying installation; that the dumping of mine
tailings into Calancan Bay occurred long before the effectivity of the Philippine Mining Act and
that MMC cannot hide under cover of this new law. The OSG further argues that the portion of
the Order of May 13, 1988, setting the period of time within which MMC shall pay P30,000.00
per day, which is during the efficacy of the restraining order was never questioned or appealed
by MMC. Finally, the OSG argues that PAB did not violate MMCs right to due process by the
issuance of the Order dated April 23, 1988 without notice and hearing as it was simply requiring
MMC to comply with an obligation in an Order which has long become final and executory.
In the context of the established facts, the issue that actually emerges is: Has the PAB
under RA 3931 as amended by PD 984 (National Pollution Control Decree of 1976) been
divested of its authority to try and hear pollution cases connected with mining operations by
virtue of the subsequent enactment of RA 7942 (Philippine Mining Act of 1995)? As mentioned
earlier, the PAB took cognizance and ruled on the letter-complaint (for violation of PD 984 and its
implementing rules and regulations) filed against MMC by Marinduque Mayor Wilfredo Red. In

the subject Order dated April 23, 1997, the PAB ruled that MMC should pay its arrears in
deposits to the ETF of the CBRP computed from the day it stopped dumping and paying on July
1, 1991 up to the lifting of the Order of the Office of the President dated May 13, 1988 on
February 5, 1993.
The answer is in the negative. We agree with the Solicitor General that the Court of
Appeals committed reversible error in ruling that the PAB had no authority to issue the Order
dated April 23, 1997.
Republic Act No. 3931 (An Act Creating The National Water And Air Pollution Control
Commission) was passed in June 18, 1964 to maintain reasonable standards of purity for the
waters and air of the country with their utilization for domestic, agricultural, industrial and other
legitimate purposes. Said law was revised in 1976 by Presidential Decree No. 984 (Providing
For The Revision Of Republic Act No. 3931, Commonly Known As The Pollution Control Law,
And For Other Purposes) to strengthen the National Pollution Control Commission to best
protect the people from the growing menace of environmental pollution. Subsequently,
Executive Order No. 192, s. 1987 (The Reorganization Act of the DENR) was passed. The
internal structure, organization and description of the functions of the new DENR, particularly
the Mines and Geosciences Bureau, reveals no provision pertaining to the resolution of cases
involving violations of the pollution laws.[18] The Mines and Geo-Sciences Bureau was created
under the said EO 192 to absorb the functions of the abolished Bureau of Mines and GeoSciences, Mineral Reservations Development Board and the Gold Mining Industry Development
Board to, among others, recommend policies, regulations and programs pertaining to mineral
resources development; assist in the monitoring and evaluation of the Bureaus programs and
projects; and to develop and promulgate standards and operating procedures on mineral
resources development.[19]
On the other hand, the PAB was created and granted under the same EO 192 broad
powers to adjudicate pollution cases in general. Thus,

(f) Make, alter or modify orders requiring the discontinuance of pollution specifying
the conditions and the time within which such discontinuance must be
accomplished.
(g) Issue, renew, or deny permits, under such conditions as it may determine to be
reasonable, for the prevention and abatement of pollution, for the discharge of
sewage, industrial waste, or for the installation or operation of sewage works
and industrial disposal system or parts thereof: Provided, however, That the
Commission, by rules and regulations, may require subdivisions, condominium,
hospitals, public buildings and other similar human settlements to put up
appropriate central sewerage system and sewage treatment works, except that
no permits shall be required to any sewage works or changes to or extensions
of existing works that discharge only domestic or sanitary wastes from a singles
residential building provided with septic tanks or their equivalent. The
Commission may impose reasonable fees and charges for the issuance or
renewal of all permits required herein.
(h)
(i)
(j) Serve as arbitrator for the determination of reparations, or restitution of the
damages and losses resulting from pollution.
(k) Deputize in writing or request assistance of appropriate government agencies or
instrumentalities for the purpose of enforcing this Decree and its implementing
rules and regulations and the orders and decisions of the Commission.
(l)

SEC. 19. Pollution Adjudication Board. There is hereby created a Pollution Adjudication Board
under the Office of the Secretary. The Board shall be composed of the Secretary as Chairman,
two (2) Undersecretaries as may be designated by the Secretary, the Director of Environmental
management, and three (3) others to be designated by the Secretary as members. The Board
shall assume the powers and functions of the Commission/Commissioners of the National
Pollution Control Commission with respect to the adjudication of pollution cases under Republic
Act 3931 and Presidential Decree 984, particularly with respect to Section 6 letters e, f, g, j, k,
and p of P.D. 984. The Environmental Management Bureau shall serve as the Secretariat of the
Board. These powers and functions may be delegated to the regional offices of the Department
in accordance with rules and regulations to be promulgated by the Board. [20]
Section 6 letters e, f, g, j, k, and p of PD 984 referred to above are quoted as follows:
SEC. 6. Powers and Functions. The Commission shall have the following powers and
functions:
(e) Issue orders or decision to compel compliance with the provisions of this Decree
and its implementing rules and regulations only after proper notice and hearing.

(m)
(n)
(o)
(p) Exercise such powers and perform such other functions as may be necessary to
carry out its duties and responsibilities under this Decree.
Section 7(a) of P.D. No. 984 further provides in part:
Sec. 7(a) Public Hearing. Public hearing shall be conducted by the Commissioner, Deputy
Commissioner or any senior official duly designated by the Commissioner prior to issuance or
promulgation of any order or decision by the Commissioner requiring the discontinuance of
discharge of sewage, industrial wastes and other wastes into the water, air or land resources of
the Philippines as provided in the Decree: provided, that whenever the Commission finds
a 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 and 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. x x x . (underscoring supplied).
The ruling of the Court of Appeals that the PAB has been divested of authority to act on
pollution-related matters in mining operations is anchored on the following provisions of RA
7942 (Philippine Mining Act of 1995):
SEC. 67. Power to Issue Orders. The mines regional director shall, in consultation with the
Environmental Management Bureau, forthwith or within such time as specified in his order,
require the contractor to remedy any practice connected with mining or quarrying operations,
which is not in accordance with safety and anti-pollution laws and regulations. In case of
imminent danger to life or property, the mines regional director may summarily suspend the
mining or quarrying operations until the danger is removed, or appropriate measures are taken
by the contractor or permittee.
And
SEC. 115. Repealing and Amending Clause. All laws, executive orders, presidential decrees,
rules and regulations, or parts thereof which are inconsistent with any of the provisions of this
Act are hereby repealed or amended accordingly.
The other provisions in Chapter XI on Safety and Environmental Protection found in RA 7942
promote the safe and sanitary upkeep of mining areas to achieve waste-free and efficient mine
development with particular concern for the physical and social rehabilitation of areas and
communities affected by mining activities[21], without however, arrogating unto the mines regional
director any adjudicative responsibility.
From a careful reading of the foregoing provisions of law, we hold that the provisions
of RA 7942 do not necessarily repeal RA 3931, as amended by PD 984 and EO 192. RA 7942
does not contain any provision which categorically and expressly repeals the provisions of the
Pollution Control Law. Neither could there be an implied repeal. It is well-settled that repeals of
laws by implication are not favored and that courts must generally assume their congruent
application. Thus, it has been held:
The two laws must be absolutely incompatible, and a clear finding thereof must surface, before
the inference of implied repeal may be drawn. The rule is expressed in the maxim, interpretare
et concordare leqibus est optimus interpretendi, i.e., every statute must be so interpreted and
brought into accord with other laws aas to form a uniform system of jurisprudence. The
fundament is that the legislature should be presumed to have known the existing laws on the
subject and not have enacted conflicting statutes. Hence, all doubts must be resolved against
any implied repeal, and all efforts should be exerted in order to harmonize and give effect to all
laws on the subject.[22]
There is no irreconcilable conflict between the two laws. Section 19 of EO 192 vested the
PAB with the specific power to adjudicate pollution cases in general. Sec. 2, par. (a) of PD 984

defines the term pollution as referring to any alteration of the physical, chemical and biological
properties of any water, air and/or land resources of the Philippines , or any discharge thereto of
any liquid, gaseous or solid wastes as will or is likely to create or to render such water, air and
land resources harmful, detrimental or injurious to public health, safety or welfare or which will
adversely affect their utilization for domestic, commercial, industrial, agricultural, recreational or
other legitimate purposes.
On the other hand, the authority of the mines regional director is complementary to that of
the PAB. Section 66 of RA 7942 gives the mines regional director exclusive jurisdiction over the
safety inspection of all installations, surface or underground in mining operations. Section 67
thereof vests upon the regional director power to issue orders requiring a contractor to remedy
any practice connected with mining or quarrying operations which is not in accordance with
safety and anti-pollution laws and regulations; and to summarily suspend mining or quarrying
operations in case of imminent danger to life or property. The law likewise requires every
contractor to undertake an environmental protection and enhancement program which shall be
incorporated in the work program which the contractor shall submit as an accompanying
document to the application for a mineral agreement or permit. In addition, an environmental
clearance certificate is required based on an environment impact assessment. The law also
requires contractors and permittees to rehabilitate the mined-out areas, and set up a mine
rehabilitation fund. Significantly, the law allows and encourages peoples organizations and nongovernmental organizations to participate in ensuring that contractors/permittees shall observe
all the requirements of environmental protection.
From the foregoing, it readily appears that the power of the mines regional director does
not foreclose PABs authority to determine and act on complaints filed before it. The power
granted to the mines regional director to issue orders requiring the contractor to remedy any
practice connected with mining or quarrying operations or to summarily suspend the same in
cases of violation of pollution laws is for purposes of effectively regulating and monitoring
activities within mining operations and installations pursuant to the environmental protection and
enhancement program undertaken by contractors and permittees in procuring their mining
permit. While the mines regional director has express administrative and regulatory powers over
mining operations and installations, it has no adjudicative powers over complaints for violation of
pollution control statutes and regulations.
True, in Laguna Lake Development Authority vs. Court of Appeals,[23] this Court held that
adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB)
except where the special law provides for another forum. However, contrary to the ruling of the
Court of Appeals, RA 7942 does not provide for another forum inasmuch as RA 7942 does not
vest quasi-judicial powers in the Mines Regional Director. The authority is vested and remains
with the PAB.
Neither was such authority conferred upon the Panel of Arbitrators and the Mines
Adjudication Board which were created by the said law. The provisions creating the Panel of
Arbitrators for the settlement of conflicts refers to disputes involving rights to mining areas,
mineral agreements or permits and those involving surface owners, occupants and claimholders/concessionaires.[24] The scope of authority of the Panel of Arbitrators and the Mines
Adjudication Board conferred by RA 7942 clearly exclude adjudicative responsibility over
pollution cases. Nowhere is there vested any authority to adjudicate cases involving violations
of pollution laws and regulations in general.

Thus, there is no genuine conflict between RA 7942 and RA 3931 as amended by PD 984
that precludes their co-existence. Moreover, it has to be conceded that there was no intent on
the part of the legislature to repeal the said law. There is nothing in the sponsorship speech [25] of
the laws proponent, Representative Renato Yap, and the deliberations that followed thereafter,
to indicate a legislative intent to repeal the pollution law. Instead, it appears that the legislature
intended to maximize the exploration, development and utilization of the countrys mineral
resources to contribute to the achievement of national economic and social development with
due regard to the social and environmental cost implications relative thereto. The law intends to
increase the productivity of the countrys mineral resources while at the same time assuring its
sustainability through judicious use and systematic rehabilitation. Henceforth, the Department of
Environment and Natural Resources as the primary government agency responsible for the
conservation, management, development, and proper use of the States mineral resources,
through its Secretary, has the authority to enter into mineral agreements on behalf of the
Government upon the recommendation of the Director, and to promulgate such rules and
regulations as may be necessary to carry out the provisions of RA 7942. [26] The PAB and the
Mines Regional Director, with their complementary functions and through their combined efforts,
serve to accomplish the mandate of RA 3931 (National Pollution Control Decree of 1976) as
amended by PD 984 and EO 192 and that of RA 7942 (Philippine Mining Act of 1995).
That matter settled, we now go to the issue of whether the appellate court erred in ruling
that there is no basis for further payments by MMC to the Ecology Trust Fund of the Calancan
Bay Rehabilitation Project considering that MMC convincingly argued and which respondent
unsatisfactorily rebuked, the existing fourteen (14) million pesos in the ETF is more than enough
to complete the rehabilitation project. Indeed, the records reveal that witness for PAB, Mr. Edel
Genato, who is the Technical Resource person of the PAB for the project admitted that the
funds in the ETF amounting to about Fourteen Million Pesos are more than sufficient to cover
the costs of rehabilitation. Hereunder are excerpts from the transcript of stenographic notes
taken during the hearing held on September 15, 1997:
ATTY. HERNANDEZ:[27]
I would like your Honor, if the court will allow, our witness from the EBRB Your Honor
would attest to that . . .
JUSTICE JACINTO:
Is it not being taken from the 14 million?
ATTY. HERNANDEZ:
Yes, Your Honor.
JUSTICE RASUL:
What is his role?
ATTY. HERNANDEZ:

He is our Technical Resource person Your Honor, of the project.

JUSTICE RASUL:
In other words, he has participated in the . . (inaudible)?
ATTY. HERNANDEZ:
Yes, Your Honor.
JUSTICE RASUL:
Do you agree with him?
MR. EDEL GENATO:
Yes, Your Honor, that the Calancan rehabilitation program is being funded by Marcopper
through the Ecology Trust Fund.
JUSTICE RASUL:
Will the construction be finished in two years time?
MR. EDEL GENATO:
Presently, under the Steering Committee of the Calancan Bay Rehabilitation, there is
another phase that is being proposed. Actually the two years time will definitely cover
the other phase of the . . (inaudible)
JUSTICE RASUL:
Never mind that. Will the amount be sufficient to the end of the construction?
MR. EDEL GENATO:
Yes, Sir.
JUSTICE RASUL:
Enough?
MR. EDEL GENATO:
Yes, Sir.

JUSTICE RASUL:
There is no more need for collecting the 30 thousand a day? . . . Do not . . . I
will hold you for contempt . . .

Your Honor. . .
JUSTICE AMIN:
Categorical answer.

ATTY. HERNANDEZ:
JUSTICE RASUL:
Im sorry Your Honor.
You just answer, is it enough, in your own honest way, on your honor?
JUSTICE RASUL:
MR. EDEL GENATO:
Again.
I think so Your Honor.[28]
MR. EDEL GENATO:
Well Your Honor, I cannot comment on the amount Your Honor.
JUSTICE RASUL:
You have already made your comment, but you received some signal from your lawyer.
ATTY. HERNANDEZ:
Your Honor . . .

We must sustain the appellate court on this point on account of the testimony of Mr. Edel
Genato. Further, we note that the Office of the President never objected nor ruled on
the manifestation dated July 9, 1991 filed by MMC that it would stop paying since it already
ceased dumping mine tailings into the bay. Still further, the order of the OP directing MMC to
rehabilitate at a cost of P30,000.00 a day during the efficacy of the restraining order had
become functus officio since MMC voluntarily stopped dumping mine tailings into the bay.
To sum up, PAB has jurisdiction to act and rule on the letter-complaint of Mayor Wilfredo
Red of Marinduque for violation of PD 984 and its implementing rules and regulations which
jurisdiction was not lost upon the passage of RA 7942 (the Philippine Mining Act of
1995). Nevertheless, MMC must be declared not to have arrears in deposits as admittedly, the
ETF already has more than sufficient funds to undertake the rehabilitation of Calancan Bay.

MR. EDEL GENATO:

No, no Your Honor. . .
JUSTICE RASUL:
My question is, do you agree with him that the 14 million fund will be enough to sustain
the construction up to the end?

WHEREFORE, the petition is hereby partially GRANTED. The assailed Decision is

REVERSED insofar as the jurisdiction of the PAB to act on the complaint is concerned; but
AFFIRMED insofar as Marcopper Mining Corporation has no arrears in deposits with the
Ecology Trust Fund of the Calancan Bay Rehabilitation Project.
SO ORDERED.

MR. EDEL GENATO:

*Agham Case*
Two years?
JUSTICE RASUL:
Yes.
MR. EDEL GENATO:

G.R. No. 199199

August 27, 2013

MARICRIS D. DOLOT, CHAIRMAN OF THE BAGONG ALYANSANG MAKABAYANSORSOGON, PETITIONER

vs.
HON. RAMON PAJE, IN HIS CAPACITY AS THE SECRETARY OF THE DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES, REYNULFO A. JUAN, REGIONAL

DIRECTOR, MINES AND GEOSCIENCES BUREAU, DENR, HON. RAUL R. LEE,

GOVERNOR, PROVINCE OF SORSOGON, ANTONIO C. OCAMPO, JR., VICTORIA A.
AJERO, ALFREDO M. AGUILAR, AND JUAN M. AGUILAR, ANTONES ENTERPRISES,
GLOBAL SUMMIT MINES DEV'T CORP., AND TR ORE, RESPONDENTS.

mandamus; (2) the case was prematurely filed as the petitioners therein failed to exhaust their
administrative remedies; and (3) they also failed to attach judicial affidavits and furnish a copy of
the complaint to the government or appropriate agency, as required by the rules.12
Petitioner Dolot went straight to this Court on pure questions of law.

DECISION
Issues
REYES, J.:
This is a petition for review on certiorari1 under Rule 45 of the Rules of Court assailing the
Order2 dated September 16, 2011 and Resolution3 dated October 18, 2011 issued by the
Regional Trial Court (RTC) of Sorsogon, Branch 53. The assailed issuances dismissed Civil
Case No. 2011-8338 for Continuing Mandamus, Damages and Attorneys Fees with Prayer for
the Issuance of a Temporary Environment Protection Order.

The main issue in this case is whether the RTC-Branch 53 has jurisdiction to resolve Civil Case
No. 2011-8338. The other issue is whether the petition is dismissible on the grounds that: (1)
there is no final court decree, order or decision that the public officials allegedly failed to act on;
(2) the case was prematurely filed for failure to exhaust administrative remedies; and (3) the
petitioners failed to attach judicial affidavits and furnish a copy of the complaint to the
government or appropriate agency.

Antecedent Facts
On September 15, 2011, petitioner Maricris D. Dolot (Dolot), together with the parish priest of the
Holy Infant Jesus Parish and the officers of Alyansa Laban sa Mina sa Matnog (petitioners), filed
a petition for continuing mandamus, damages and attorneys fees with the RTC of Sorsogon,
docketed as Civil Case No. 2011-8338.4 The petition contained the following pertinent
allegations: (1) sometime in 2009, they protested the iron ore mining operations being
conducted by Antones Enterprises, Global Summit Mines Development Corporation and TR Ore
in Barangays Balocawe and Bon-ot Daco, located in the Municipality of Matnog, to no avail; (2)
Matnog is located in the southern tip of Luzon and there is a need to protect, preserve and
maintain the geological foundation of the municipality; (3) Matnog is susceptible to flooding and
landslides, and confronted with the environmental dangers of flood hazard, liquefaction, ground
settlement, ground subsidence and landslide hazard; (4) after investigation, they learned that the
mining operators did not have the required permit to operate; (5) Sorsogon Governor Raul Lee
and his predecessor Sally Lee issued to the operators a small-scale mining permit, which they
did not have authority to issue; (6) the representatives of the Presidential Management Staff and
the Department of Environment and Natural Resources (DENR), despite knowledge, did not do
anything to protect the interest of the people of Matnog;5 and (7) the respondents violated
Republic Act (R.A.) No. 7076 or the Peoples Small-Scale Mining Act of 1991, R.A. No. 7942 or
the Philippine Mining Act of 1995, and the Local Government Code.6 Thus, they prayed for the
following reliefs: (1) the issuance of a writ commanding the respondents to immediately stop the
mining operations in the Municipality of Matnog; (2) the issuance of a temporary environment
protection order or TEPO; (3) the creation of an inter-agency group to undertake the
rehabilitation of the mining site; (4) award of damages; and (5) return of the iron ore, among
others.7

Ruling of the Court

Jurisdiction and Venue
In dismissing the petition for lack of jurisdiction, the RTC, in its Order dated September 16, 2011,
apparently relied on SC Administrative Order (A.O.) No. 7 defining the territorial areas of the
Regional Trial Courts in Regions 1 to 12, and Administrative Circular (Admin. Circular) No. 232008,13 designating the environmental courts "to try and decide violations of environmental laws
x x x committed within their respective territorial jurisdictions." 14 Thus, it ruled that its territorial
jurisdiction was limited within the boundaries of Sorsogon City and the neighboring
municipalities of Donsol, Pilar, Castilla, Casiguran and Juban and that it was "bereft of
jurisdiction to entertain, hear and decide [the] case, as such authority rests before another coequal court."15
Such reasoning is plainly erroneous. The RTC cannot solely rely on SC A.O. No. 7 and Admin.
Circular No. 23-2008 and confine itself within its four corners in determining whether it had
jurisdiction over the action filed by the petitioners.
None is more well-settled than the rule that jurisdiction, which is the power and authority of the
court to hear, try and decide a case, is conferred by law.16 It may either be over the nature of the
action, over the subject matter, over the person of the defendants or over the issues framed in
the pleadings.17 By virtue of Batas Pambansa (B.P.) Blg. 129 or the Judiciary Reorganization Act
of 1980, jurisdiction over special civil actions for certiorari, prohibition and mandamus is vested
in the RTC. Particularly, Section 21(1) thereof provides that the RTCs shall exercise original
jurisdiction

The case was referred by the Executive Judge to the RTC of Sorsogon, Branch 53 being the
designated environmental court.8 In the Order9 dated September 16, 2011, the case was
summarily dismissed for lack of jurisdiction.

in the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction which may be enforced in any part of their respective regions. (Emphasis ours)

The petitioners filed a motion for reconsideration but it was denied in the Resolution 10 dated
October 18, 2011. Aside from sustaining the dismissal of the case for lack of jurisdiction, the
RTC11 further ruled that: (1) there was no final court decree, order or decision yet that the public
officials allegedly failed to act on, which is a condition for the issuance of the writ of continuing

A.O. No. 7 and Admin. Circular No. 23-2008 was issued pursuant to Section 18 of B.P. Blg. 129,
which gave the Court authority to define the territory over which a branch of the RTC shall
exercise its authority. These administrative orders and circulars issued by the Court merely
provide for the venue where an action may be filed. The Court does not have the power to

confer jurisdiction on any court or tribunal as the allocation of jurisdiction is lodged solely in
Congress.18 It also cannot be delegated to another office or agency of the Government.19Section
18 of B.P. Blg. 129, in fact, explicitly states that the territory thus defined shall be deemed to be
the territorial area of the branch concerned for purposes of determining the venue of all suits,
proceedings or actions. It was also clarified in Office of the Court Administrator v. Judge
Matas20 that
Administrative Order No. 3 [defining the territorial jurisdiction of the Regional Trial Courts in the
National Capital Judicial Region] and, in like manner, Circular Nos. 13 and 19, did not per se
confer jurisdiction on the covered regional trial courts or its branches, such that non-observance
thereof would nullify their judicial acts. The administrative order merely defines the limits of the
administrative area within which a branch of the court may exercise its authority pursuant to the
jurisdiction conferred by Batas Pambansa Blg. 129.21
The RTC need not be reminded that venue relates only to the place of trial or the geographical
location in which an action or proceeding should be brought and does not equate to the
jurisdiction of the court. It is intended to accord convenience to the parties, as it relates to the
place of trial, and does not restrict their access to the courts.22 Consequently, the RTCs motu
proprio dismissal of Civil Case No. 2011-8338 on the ground of lack of jurisdiction is patently
incorrect.
At most, the error committed by the petitioners in filing the case with the RTC of Sorsogon was
that of improper venue. A.M. No. 09-6-8-SC or the Rules of Procedure for Environmental Cases
(Rules) specifically states that a special civil action for continuing mandamus shall be filed with
the "[RTC] exercising jurisdiction over the territory where the actionable neglect or omission
occurred x x x."23 In this case, it appears that the alleged actionable neglect or omission
occurred in the Municipality of Matnog and as such, the petition should have been filed in the
RTC of Irosin.24 But even then, it does not warrant the outright dismissal of the petition by the
RTC as venue may be waived.25 Moreover, the action filed by the petitioners is not criminal in
nature where venue is an essential element of jurisdiction.26 In Gomez-Castillo v. Commission on
Elections,27 the Court even expressed that what the RTC should have done under the
circumstances was to transfer the case (an election protest) to the proper branch. Similarly, it
would serve the higher interest of justice28 if the Court orders the transfer of Civil Case No. 2011
8338 to the RTC of Irosin for proper and speedy resolution, with the RTC applying the Rules in
its disposition of the case.
At this juncture, the Court affirms the continuing applicability of Admin. Circular No. 23-2008
constituting the different "green courts" in the country and setting the administrative guidelines in
the raffle and disposition of environmental cases. While the designation and guidelines were
made in 2008, the same should operate in conjunction with the Rules.
A.M. No. 09-6-8-SC: Rules of Procedure for Environmental Cases
In its Resolution dated October 18, 2011, which resolved the petitioners motion for
reconsideration of the order of dismissal, the RTC further ruled that the petition was dismissible
on the following grounds: (1) there is no final court decree, order or decision yet that the public
officials allegedly failed to act on; (2) the case was prematurely filed for failure to exhaust
administrative remedies; and (3) there was failure to attach judicial affidavits and furnish a copy
of the complaint to the government or appropriate agency.29 The respondents, and even the

Office of the Solicitor General, in behalf of the public respondents, all concur with the view of the
RTC.
The concept of continuing mandamus was first introduced in Metropolitan Manila Development
Authority v. Concerned Residents of Manila Bay.30 Now cast in stone under Rule 8 of the Rules,
the writ of continuing mandamus enjoys a distinct procedure than that of ordinary civil actions for
the enforcement/violation of environmental laws, which are covered by Part II (Civil Procedure).
Similar to the procedure under Rule 65 of the Rules of Court for special civil actions for
certiorari, prohibition and mandamus, Section 4, Rule 8 of the Rules requires that the petition
filed should be sufficient in form and substance before a court may take further action;
otherwise, the court may dismiss the petition outright. Courts must be cautioned, however, that
the determination to give due course to the petition or dismiss it outright is an exercise of
discretion that must be applied in a reasonable manner in consonance with the spirit of the law
and always with the view in mind of seeing to it that justice is served.31
Sufficiency in form and substance refers to the contents of the petition filed under Rule 8,
Section 1:
When any agency or instrumentality of the government or officer thereof unlawfully neglects the
performance of an act which the law specifically enjoins as a duty resulting from an office, trust
or station in connection with the enforcement or violation of an environmental law rule or
regulation or a right therein, or unlawfully excludes another from the use or enjoyment of such
right 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, attaching thereto supporting evidence, specifying that the petition concerns an
environmental law, rule or regulation, and praying that judgment be rendered commanding the
respondent to do an act or series of acts until the judgment is fully satisfied, and to pay damages
sustained by the petitioner by reason of the malicious neglect to perform the duties of the
respondent, under the law, rules or regulations. The petition shall also contain a sworn
certification of non-forum shopping.1wphi1
On matters of form, the petition must be verified and must contain supporting evidence as well
as a sworn certification of non-forum shopping. It is also necessary that the petitioner must be
one who is aggrieved by an act or omission of the government agency, instrumentality or its
officer concerned. Sufficiency of substance, on the other hand, necessitates that the petition
must contain substantive allegations specifically constituting an actionable neglect or omission
and must establish, at the very least, a prima facie basis for the issuance of the writ, viz: (1) an
agency or instrumentality of government or its officer unlawfully neglects the performance of an
act or unlawfully excludes another from the use or enjoyment of a right; (2) the act to be
performed by the government agency, instrumentality or its officer is specifically enjoined by law
as a duty; (3) such duty results from an office, trust or station in connection with the enforcement
or violation of an environmental law, rule or regulation or a right therein; and (4) there is no other
plain, speedy and adequate remedy in the course of law.32
The writ of continuing mandamus is a special civil action that may be availed of "to compel the
performance of an act specifically enjoined by law."33 The petition should mainly involve an
environmental and other related law, rule or regulation or a right therein. The RTCs mistaken
notion on the need for a final judgment, decree or order is apparently based on the definition of
the writ of continuing mandamus under Section 4, Rule 1 of the Rules, to wit:

(c) Continuing mandamus is a writ issued by a court in an environmental case directing any
agency or instrumentality of the government or officer thereof to perform an act or series of acts
decreed by final judgment which shall remain effective until judgment is fully satisfied. (Emphasis
ours)
The final court decree, order or decision erroneously alluded to by the RTC actually pertains to
the judgment or decree that a court would eventually render in an environmental case for
continuing mandamus and which judgment or decree shall subsequently become final.
Under the Rules, after the court has rendered a judgment in conformity with Rule 8, Section 7
and such judgment has become final, the issuing court still retains jurisdiction over the case to
ensure that the government agency concerned is performing its tasks as mandated by law and
to monitor the effective performance of said tasks. It is only upon full satisfaction of the final
judgment, order or decision that a final return of the writ shall be made to the court and if the
court finds that the judgment has been fully implemented, the satisfaction of judgment shall be
entered in the court docket.34 A writ of continuing mandamus is, in essence, a command of
continuing compliance with a final judgment as it "permits the court to retain jurisdiction after
judgment in order to ensure the successful implementation of the reliefs mandated under the
courts decision."35
The Court, likewise, cannot sustain the argument that the petitioners should have first filed a
case with the Panel of Arbitrators (Panel), which has jurisdiction over mining disputes under R.A.
No. 7942.
Indeed, as pointed out by the respondents, the Panel has jurisdiction over mining disputes. 36 But
the petition filed below does not involve a mining dispute. What was being protested are the
alleged negative environmental impact of the small-scale mining operation being conducted by
Antones Enterprises, Global Summit Mines Development Corporation and TR Ore in the
Municipality of Matnog; the authority of the Governor of Sorsogon to issue mining permits in
favor of these entities; and the perceived indifference of the DENR and local government
officials over the issue. Resolution of these matters does not entail the technical knowledge and
expertise of the members of the Panel but requires an exercise of judicial function. Thus, in
Olympic Mines and Development Corp. v. Platinum Group Metals Corporation,37 the Court stated

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.38 (Emphasis supplied in the former and
ours in the latter)
Consequently, resort to the Panel would be completely useless and unnecessary.
The Court also finds that the RTC erred in ruling that the petition is infirm for failure to attach
judicial affidavits. As previously stated, Rule 8 requires that the petition should be verified,
contain supporting evidence and must be accompanied by a sworn certification of non-forum
shopping. There is nothing in Rule 8 that compels the inclusion of judicial affidavits, albeit not
prohibited. It is only if the evidence of the petitioner would consist of testimony of witnesses that
it would be the time that judicial affidavits (affidavits of witnesses in the question and answer
form) must be attached to the petition/complaint.39
Finally, failure to furnish a copy of the petition to the respondents is not a fatal defect such that
the case should be dismissed. The RTC could have just required the petitioners to furnish a
copy of the petition to the respondents. It should be remembered that "courts are not enslaved
by technicalities, and they have the prerogative to relax compliance with procedural rules of
even the most mandatory character, mindful of the duty to reconcile both the need to speedily
put an end to litigation and the parties right to an opportunity to be heard." 40
WHEREFORE, the petition is GRANTED. The Order dated September 16, 2011 and Resolution
dated October 18, 2011 issued by the Regional Trial Court of Sorsogon, Branch 53, dismissing
Civil Case No. 2011-8338 are NULLIFIED AND SET ASIDE. The Executive Judge of the
Regional Trial Court of Sorsogon is DIRECTED to transfer the case to the Regional Trial Court of
Irosin, Branch 55, for further proceedings with dispatch. Petitioner Maricris D. Dolot is also
ORDERED to furnish the respondents with a copy of the petition and its annexes within ten (10)
days from receipt of this Decision and to submit its Compliance with the RTC of Irosin.
SO ORDERED.

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