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G.R. No. 134030 April 25, 2006

Tuazon entered into a Contract to Sell (1st contract) with Induplex wheren Induplex agreed
to buy all the Perlite Ore that can be found and mined in Tuason's mining claim and in
return, Induplex will assist Tuason to secure his rights over the mining claim. Then, Tuason
executed an Agreement to Operate Mining Claims (2nd Contract) in favor of Asaphil.
Tuason thereafter filed with the Bureau of Mines-DENR against Induplex and Asaphil for the
nullity of the two contracts alleging that the stockholders of Induplex created Ibalon Mineral
Resources Inc. and then extracted in Ibalon's mining claim and thereafter entered into a
joint Venture with Grefco, Inc. which would violate their agreement.

Whether or not DENR has jurisdiction over the case.

No, Section 7 of P.D. 1281 provides:
"Section 7. In addition to its regulatory and adjudicative functions over companies,
partnerships or persons engaged in mining exploration, development and exploitation,
development and exploitation, the Bureau of Mines shall have original and exclusive
jurisdiction to hear and decide cases involving:
(a) a mining property subject of different agreements entered into by the claim holder
thereof with several mining operators;
(b) complaints from claimowners that the mining property subject of an operating
agreement has not been placed into actual operations within the period stipulated therein;
(c) cancellation and/or enforcement of mining contracts due to the refusal of the
claimowner/operator to abide by the terms and conditions thereof."
Tuason's case based on its facts is not a mining dispute. the 2nd contract although a mining
contract does not make a mining dispute, the resolution of its nullity is not based on
Asaphil's violation of the conditions but due to Induplex's alleged violation in entering into a
joint venture with Grefco Ltd. which is a judicial question. The nullity shall be determined by
regular courts. "A judicial question is raised when the determination of the question involves
the exercise of judicial function, which involves the determination of what the law is all about
and what are the legal rights of the parties.
GR 151882 March 3, 2006
Police Power Eminent Domain
In 1987, Cory rolled out EO 279 w/c empowered DENR to stipulate with foreign companies
when it comes to either technical or financial large scale exploration or mining. In 1995, Ramos
signed into law RA 7942 or the Philippine Mining Act. In 1994, Ramos already signed an FTAA
with Arimco Mining Co, an Australian company. The FTAA authorized AMC (later CAMC) to
explore 37,000 ha of land in Quirino and N. Vizcaya including Brgy Didipio. After the passage
of the law, DENR rolled out its implementing RRs. Didipio petitioned to have the law and the
RR to be annulled as it is unconstitutional and it constitutes unlawful taking of property. In
seeking to nullify Rep. Act No. 7942 and its implementing rules DAO 96-40 as unconstitutional,
petitioners set their sight on Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40
which they claim allow the unlawful and unjust taking of private property for private purpose
in contradiction with Section 9, Article III of the 1987 Constitution mandating that private
property shall not be taken except for public use and the corresponding payment of just
compensation. They assert that public respondent DENR, through the Mining Act and its
Implementing Rules and Regulations, cannot, on its own, permit entry into a private property and
allow taking of land without payment of just compensation.
Traversing petitioners assertion, public respondents argue that Section 76 is not a taking
provision but a valid exercise of the police power and by virtue of which, the state may prescribe
regulations to promote the health, morals, peace, education, good order, safety and general
welfare of the people. This government regulation involves the adjustment of rights for the
public good and that this adjustment curtails some potential for the use or economic exploitation
of private property. Public respondents concluded that to require compensation in all such
circumstances would compel the government to regulate by purchase.
ISSUE: Whether or not RA 7942 and the DENR RRs are valid.
HELD: The SC ruled against Didipio. The SC noted the requisites of eminent domain. They are;
(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;
(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.
In the case at bar, Didipio failed to show that the law is invalid. Indeed there is taking involved
but it is not w/o just compensation. Sec 76 of RA 7942 provides for just compensation as well as
section 107 of the DENR RR. To wit,
Section 76. xxx Provided, that any damage to the property of the surface owner, occupant, or
concessionaire as a consequence of such operations shall be properly compensated as may be
provided for in the implementing rules and regulations.
Section 107. Compensation of the Surface Owner and Occupant- Any damage done to the
property of the surface owners, occupant, or concessionaire thereof as a consequence of the
mining operations or as a result of the construction or installation of the infrastructure mentioned
in 104 above shall be properly and justly compensated.
Further, mining is a public policy and the government can invoke eminent domain to exercise
entry, acquisition and use of private lands.
G.R. NO. 149927 MARCH 30, 2004PANGANIBAN, J.

Petitioner Rosemoor Mining and Development Corporation after having beengranted 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.The petitioner then applied with the
Bureau of Mines, now Mines and Geosciences Bureau, for the issuance of the corresponding
license to exploit said marbledeposits.License No. 33 was issued by the Bureau ofMines in favor
of the herein petitioners. Shortly thereafter, Respondent Ernesto Maceda cancelled the
petitioners license stating that their license had illegally been issued, because it violated Section
69 of PD463; and that there was no more public interest served by the continued existence or
renewal of the license. The latter reason was confirmed by the language of Proclamation No. 84.
According to this law, public interest would be served by 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.
Whether or not Presidential Proclamation No. 84 is valid.
Yes. 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. Its declaration that QLP No. 33 is
a patent nullity 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. It is settled that an
ex post facto law is limited in its scope only to matters criminal in nature. 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. Also 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. 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.


G.R. No. 127882; January 27, 2004

This petition for prohibition and mandamus challenges the constitutionality of Republic Act No.
7942 (The Philippine Mining Act of 1995), its implementing rules and regulations and the
Financial and Technical Assistance Agreement (FTAA) dated March 30, 1995 by the
government with Western Mining Corporation(Philippines) Inc. (WMCP).
Accordingly, the FTAA violated the 1987 Constitution in that it is a service contract and is
antithetical to the principle of sovereignty over our natural resources, because they allowed
foreign control over the exploitation of our natural resources, to the prejudice of the Filipino
What is the proper interpretation of the phrase Agreements involving Either Technical or
Financial Assistance contained in paragraph 4, Section 2, Article XII of the Constitution.
The Supreme Court upheld the constitutionality of the Philippine Mining Law, its implementing
rules and regulations insofar as they relate to financial and technical agreements as well as the
subject Financial and Technical Assistance Agreement.

Full control is not anathematic to day-to-day management by the contractor, provided that the
State retains the power to direct overall strategy; and to set aside, reverse or modify plans and
actions of the contractor. The idea of full control is similar to that which is exercised by the
board of directors of a private corporation, the performance of managerial, operational, financial,
marketing and other functions may be delegated to subordinate officers or given to contractual
entities, but the board retains full residual control of the business.


GR No. 127882 December 1, 2004

Facts: The Petition for Prohibition and Mandamus before the Court challenges the
constitutionality of (1) Republic Act No. [RA] 7942 (The Philippine Mining Act of 1995); (2) its
Implementing Rules and Regulations (DENR Administrative Order No. [DAO] 96-40); and (3)
the FTAA dated March 30, 1995,6 executed by the government with Western Mining
Corporation (Philippines), Inc. (WMCP). On January 27, 2004, the Court en banc promulgated
its Decision granting the Petition and declaring the unconstitutionality of certain provisions of
RA 7942, DAO 96-40, as well as of the entire FTAA executed between the government and
WMCP, mainly on the finding that FTAAs are service contracts prohibited by the 1987
Constitution. The Decision struck down the subject FTAA for being similar to service contracts,
which, though permitted under the 1973 Constitution, were subsequently denounced for being
antithetical to the principle of sovereignty over our natural resources, because they allowed
foreign control over the exploitation of our natural resources, to the prejudice of the Filipino
nation. The Decision quoted several legal scholars and authors who had criticized service
contracts for, inter alia, vesting in the foreign contractor exclusive management and control of
the enterprise, including operation of the field in the event petroleum was discovered; control of
production, expansion and development; nearly unfettered control over the disposition and sale
of the products discovered/extracted; effective ownership of the natural resource at the point of
extraction; and beneficial ownership of our economic resources. According to the Decision, the
1987 Constitution (Section 2 of Article XII) effectively banned such service contracts.
Subsequently, respondents filed separate Motions for Reconsideration. In a Resolution dated
March 9, 2004, the Court required petitioners to comment thereon. In the Resolution of June 8,
2004, it set the case for Oral Argument on June 29, 2004.

Issue: Whether or not the FTAA issued were valid.

Held: Yes. The notion that the deliberations reflect only the views of those members who spoke
out and not the views of the majority who remained silent should be clarified. We must never
forget that those who spoke out were heard by those who remained silent and did not react. If the
latter were silent because they happened not to be present at the time, they are presumed to have
read the minutes and kept abreast of the deliberations. By remaining silent, they are deemed to
have signified their assent to and/or conformity with at least some of the views propounded or
their lack of objections thereto. It was incumbent upon them, as representatives of the entire
Filipino people, to follow the deliberations closely and to speak their minds on the matter if they
did not see eye to eye with the proponents of the draft provisions.
In any event, each and every one of the commissioners had the opportunity to speak out and to
vote on the matter. Moreover, the individual explanations of votes are on record, and they show
where each delegate stood on the issues. In sum, we cannot completely denigrate the value or
usefulness of the record of the ConCom, simply because certain members chose not to speak out.
However, it is of common knowledge, and of judicial notice as well, that the government is and
has for many many years been financially strapped, to the point that even the most essential
services have suffered serious curtailments education and health care, for instance, not to
mention judicial services have had to make do with inadequate budgetary allocations. Thus,
government has had to resort to build-operate-transfer and similar arrangements with the private
sector, in order to get vital infrastructure projects built without any governmental outlay.
The drafters whose ranks included many academicians, economists, businessmen, lawyers,
politicians and government officials were not unfamiliar with the practices of foreign
corporations and multinationals.
Neither were they so nave as to believe that these entities would provide assistance without
conditionalities or some quid pro quo. Definitely, as business persons well know and as a matter
of judicial notice, this matter is not just a question of signing a promissory note or executing a
technology transfer agreement. Foreign corporations usually require that they be given a say in
the management, for instance, of day-to-day operations of the joint venture. They would demand
the appointment of their own men as, for example, operations managers, technical experts,
quality control heads, internal auditors or comptrollers. Furthermore, they would probably
require seats on the Board of Directors all these to ensure the success of the enterprise and the
repayment of the loans and other financial assistance and to make certain that the funding and the
technology they supply would not go to waste. Ultimately, they would also want to protect their
business reputation and bottom lines.



Philippine Government and WMC Philippines, the local wholly-owned subsidiary of WMC
Resources International Pty. Ltd. (WMC Resources) executed a Financial and Technical
Assistance Agreement, denominated as the Columbio FTAA No. 02-95-XI (Columbio FTAA)
for the purpose of large scale exploration, development, and commercial exploration of possible
mineral resources in an initial contract area of 99,387 hectares located in the provinces of South
Cotabato, Sultan Kudarat, Davao del Sur, and North Cotabato in accordance with Executive
Order No. 279 and Department Administrative Order No. 63, Series of 1991.
The Columbio FTAA is covered in part by 156 mining claims held under various Mineral
Production Sharing Agreements (MPSA) by Southcot Mining Corporation, Tampakan Mining
Corporation, and Sagittarius Mines, Inc. (collectively called the Tampakan Companies), in
accordance with the Tampakan Option Agreement entered into by WMC Philippines and the
Tampakan Companies on 25 April 1991, as amended by Amendatory Agreement dated 15 July
1994, for purposes of exploration of the mining claims in Tampakan, South Cotabato. The
Option Agreement, among other things, provides for the grant of the right of first refusal to the
Tampakan Companies in case WMC Philippines desires to dispose of its rights and interests in
the mining claims covering the area subject of the agreement.
WMC Resources subsequently divested itself of its rights and interests in the ColumbioFTAA,
and on 12 July 2000 executed a Sale and Purchase Agreement with petitioner Lepanto over its
entire shareholdings in WMC Philippines, subject to the exercise of the Tampakan Companies
exercise of their right of first refusal to purchase the subject shares. On 28 August 2000,
petitioner sought the approval of the 12 July 2000 Agreement from the DENR Secretary.
In the interim, on 10 January 2001, contending that the 12 July Agreement between petitioner
and WMC Philippines had expired due to failure to meet the necessary preconditions for its
validity, WMC Resources and the Tampakan Companies executed another Sale and Purchase
Agreement, where Sagittarius Mines, Inc. was designated assignee and corporate vehicle which
would acquire the shareholdings and undertake the Columbio FTAA activities. On 15 January
2001, Sagittarius Mines, Inc. increased its authorized capitalization to P250 million.
Subsequently, WMC Resources and Sagittarius Mines, Inc. executed a Deed of Absolute Sale of
Shares of Stocks on 23 January 2001.
After due consideration and evaluation of the financial and technical qualifications of Sagittarius
Mines, Inc., the DENR Secretary approved the transfer of the Columbio FTAA from WMC
Philippines to Sagittarius Mines, Inc. in the assailed Order. According to said Order, pursuant to
Section 66 of Department Administrative Order No. 96-40, as amended, Sagittarius Mines, Inc.
meets the qualification requirements as Contractor-Transferee of FTAA No. 02-95-XI, and that
the application for transfer of said FTAA went thru the procedure and other requirements set
forth under the law.
Aggrieved by the transfer of the Columbio FTAA in favor of Sagittarius Mines, Inc., petitioner
filed a Petition for Review of the Order of the DENR Secretary with the Office of the President.
Petitioner assails the validity of the 18 December 2001 Order of the Secretary of the Department
of Environment and Natural Resources (DENR) approving the application for and the
consequent registration of FTAA No. 02-95-XI from WMC Philippines to Sagittarius Mines,
Inc.on the ground that: 1) it violates the constitutional right of Lepanto to due process; 2) it
preempts the resolution of very crucial legal issues pending with the regular courts; and 3) it
blatantly violates Section 40 of the Mining Act.
In a Decision dated 23 July 2002, the Office of the President dismissed the petition.


WHETHER OR NOT the Philippine Mining Act of 1995, particularly Section 40 thereof
requiring the approval of the President of the assignment or transfer of financial or technical
assistance agreements should have a retroactive application to the Columbio FTAA.

NO. Applying the above-cited law retroactively would contradict the established legal doctrine
that statutes are to be construed as having only a prospective operation unless the contrary is
expressly stated or necessarily implied from the language used in the law.
In the case at bar, there is an absence of either an express declaration or an implication in the
Philippine Mining Act of 1995 that the provisions of said law shall be made to apply
retroactively, therefore, any section of said law must be made to apply only prospectively, in
view of the rule that a statute ought not to receive a construction making it act retroactively,
unless the words used are so clear, strong, and imperative that no other meaning can be annexed
to them, or unless the intention of the legislature cannot be otherwise satisfied.

7. G.R. No. 163101



Benguet and J.G. Realty entered into a Royalty Agreement with Option to Purchase (RAWOP) ,
wherein J.G. Realty was acknowledged as the owner of four mining claims with a total area of
288.8656 hectares. The parties also executed a Supplemental Agreement.The mining claims were
covered by Mineral Production Sharing Agreement (MPSA) Application No. APSA-V-0009
jointly filed by J.G. Realty as claim-owner and Benguet as operator.
After some time, the Executive Vice-President of Benguet, Antonio N. Tachuling, issued a letter
informing J.G. Realty of its intention to develop the mining claims. However, J.G. Realty,
through its President, Johnny L. Tan, then sent a letter to the President of Benguet informing the
latter that it was terminating the RAWOP. The latter alleged that petitioner violated some of the
provisions of the RAWOP, specifically on non-payment of royalties and non-fulfillment of
obligations stipulated therein.
J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of the RAWOP. POA issued a
Decision, cancelling the RAWOP and its Supplemental Agreement. BENGUET was
subsequently excluded from the joint MPSA Application over the mineral claims. Subsequent
MR was denied. Said decision was upheld by DENR-MAB.
Hence this instant petition.


Whether or not the filing of the petition with the Supreme Court is proper.


NO. the instant petition can be denied outright as Benguet resorted to an improper Remedy.
The last paragraph of Section 79 of Republic Act No. (RA) 7942 or the Philippine Mining Act
of 1995 states, A petition for review by certiorari and question of law may be filed by the
aggrieved party with the Supreme Court within thirty (30) days from receipt of the order or
decision of the [MAB].
The Revised Rules of Civil Procedure included Rule 43 to provide a uniform rule on appeals
from quasi-judicial agencies. Under the rule, appeals from their judgments and final orders are
now required to be brought to the CA on a verified petition for review. A quasi-judicial agency
or body has been defined as an organ of government, other than a court or legislature, which
affects the rights of private parties through either adjudication or rule-making. MAB falls under
this definition; hence, it is no different from the other quasi-judicial bodies enumerated under
Rule 43. Besides, the introductory words in Section 1 of Circular No. 1-91among these
agencies areindicate that the enumeration is not exclusive or conclusive and acknowledge the
existence of other quasi-judicial agencies which, though not expressly listed, should be deemed
included therein.
The judicial policy of observing the hierarchy of courts dictates that direct resort from
administrative agencies to this Court will not be entertained, unless the redress desired cannot be
obtained from the appropriate lower tribunals, or unless exceptional and compelling
circumstances justify availment of a remedy falling within and calling for the exercise of our
primary jurisdiction.
Thus Benguet should have filed the appeal with the CA.
Petitioner having failed to properly appeal to the CA under Rule 43, the decision of the MAB has
become final and executory. On this ground alone, the instant petition must be denied.

7. Atok Big Wedge Mutual Benefit Association v Atok Big Wedge Mining Co. Inc.
GR No. L-7349
July 19, 1955

On September 4, 1950, a demand was submitted to petitioner by respondent union through its
officers for various concessions, among which were:
(a) An increase of P0.50 in wages;
(b) Commutation of sick and vacation leave if not enjoyed during the year;
(c) Various privileges, such as free medical care, medicine, and hospitalization;
(d) Right to a closed shop, check off etc.;
(e) No dismissal without prior just cause and with a prior investigation, etc.

Some of the demands were granted by petitioner and the others were rejected. Hearings were
held in the Court of Industrial Relations. After the hearing, the respondent court rendered a
decision fixing the minimum wage for the laborers at P3.20 without rice ration and 2.65 a day
with rice ration, declaring that additional compensation representing efficiency bonus should not
be included as part of the wage, and making the award effective from September 4, 1950 (the
date of the presentation of the original demand, instead of from April 5, 1951, the date of the
amended demand).

Atok Company asked the Court for authority to stop operations & lay off employees and
laborers, for the reason that due to the heavy losses, increased taxes, high cost of materials,
negligible quantity of ore deports, and the enforcement of the Minimum Wage Law, the
continued operation of the company and the consequent lay-off of hundreds of laborers and
The parties reached an agreement on October 29, 1952 after the SC decision which states
agreement that the following facilities heretofore given or actually being given by petitioner to
its workers and laborers, and which constitute as part of their wages, be valued as follows:

Rice ration P.55 per day

Housing facility 40 per day
All other facilities at least 85 per day

It is understood that the said amount of facilities valued at the above mentioned prices, may be
charged in full or partially by the Company against laborer or employee, as they may see fit
pursuant to the exigencies of its operation.

This was approved by the Court on December 26, 1952.

Later, another case was decided involving the 2 parties giving the employees minimum cash
wage of 3.45 a day with rice ration or 4.00 without rice ration.


(1) Which of the two decisions would prevail? The agreement or the subsequent decision giving
employees minimum case wage?, and;
WON the Agreement of October 29, 1952 from the minimum daily wage of P4 would be a
waiver of the minimum wage fixed by the law and hence null and void, since RA 602 sec. 20
provides that no agreement or contract, oral or written, to accept a lower wage or less than any
other under this Act, shall be valid.

(2) WON additional compensation should be paid by the Company to its workers for work
rendered on Sundays and holidays which should be based on the minimum wage of 4.00 and not
on the cash portion which is 2.20. [Currently the company pays additional compensation of 50%
based on the 2.20 wage]


(1) The Agreement subsists.

An agreement to deduct certain facilities received by the laborers from their employer is not a
waiver of the minimum wage fixed by the law. Wage includes the fair and reasonable value as
determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished
by the employer to the employee (Sec 2 of RA 602).

Thus, the law permits the deduction of such facilities from the laborers minimum wage of P4, as
long as their value is fair and reasonable

(2) NO. The Company is correct.

Section 4 of the Commonwealth Act No. 444 (Eight Hour Labor Law) provides:
No person, firm, or corporations... shall compel an employee or laborer to work during Sundays
and holidays, unless he is paid an additional sum of at least 25% of his regular remuneration.
Thus, the Company even pays the laborers higher wage than the minimum. Thus, no law is


(1) Supplements, defined extra remuneration or special privileges or benefits given to or
received by the laborers over and above their ordinary earnings or wages [vacation and holidays
not worked; paid sick leave or maternity leave; overtime rate in excess of what is required by
law; sick, pension, retirement and death benefits; profit sharing; family allowances; Christmas,
war risk and cost of living bonuses or other bonuses other than those paid as a reward for extra
output or time spent on the job].
(2) Facilities, defined items of expense necessary for laborers and his familys existence and
subsistence, so that by express provision of the law, they form part of the wage and when
furnished by the employer are deductible therefrom since if they are not so furnished, the laborer
would spend and pay for them just the same.


GR # L-49109 December 1, 1987

Presidential Decree No.1214 was issued requiring holders of subsisting and valid patentable
mining claims located under the provisions of the Philippine Bill of 1902 to file a mining lease of
application within one (1) year from the approval of the Decree. To protect its rights, petitioner
Santa Rosa Mining Company files a special civil action for certiorari and prohibition confronting
the said Decree as unconstitutional in that it amounts to a deprivation of property without due
process of law. Subsequently, three (3) days after, petitioner filed a mining lease application, but
under protest, with a reservation that it is not waiving its rights over its mining claims until the
validity of the Decree shall have been passed upon by the Court.
The respondents allege that petitioner has no standing to file the instant petition and question the
Decree as it failed to fully exhaust administrative remedies.

Whether or not Presidential Decree No. 1214 is constitutional.

Yes, Presidential Decree No. 1214 is constitutional, even assuming arguendo that petitioners was
not bound to exhaust administrative remedies for its mining claims to be valid in the outset. It is
a valid exercise of the sovereign power of the State, as owner, over the lands of the public
domain, of which petitioners mining claims still form a part. Moreover, Presidential Decree No.
1214 is in accord with Sec. 8, Art XIV of the 1937 Constitution.
160 SCRA 228, G.R. NO. L-43938 APRIL 15, 1988

FACTS: The case is about a parcel of land whose ownership is disputed by four parties: the dela
Rosas, Benguet Consolidated Inc (BCI), Atok Corp, and the Bureau of Forestry Development
(BFD). In 1965, Jose de la Rosa on his and on his three childrens behalf, applied to
register a parcel of land divided into 9 lots in Benguet. According to the children, they
acquired the land by virtue of prescription. As evidence they produced tax declarations and
realty tax receipts. Benguet Consolidated Inc (BCI) opposed their application, claiming
that half the lots were covered by mineral claim sold to it in 1934. Since 1934, BCI had been
in actual, continuous and exclusive possession of the land in concept of owner. As evidence BCI
presented geological mappings, payment of taxes, and construction on the land. Atok Corps
claim is similar to BCI, that a mineral claim covering the lots had been sold to it in 1931. Their
evidence is similar to BCI: construction and tax payments.he BFD also objected, saying that the
land was covered by the Central Cordillera Forest Reserve (CCFR) under Proc. No. 217, dated
1929. As it was forest land, it was not subject to alienation as stated in the 1935 and 1973
Constitutions. In the end, the CA affirmed the BFDs rights on the surface of the land, while
reaffirming the rights to the underground to both BCI and Atok. In other words, the CA ruled
that the surface was to be agricultural on the surface, and mineral underneath.

a. Who has the best claim over the land? BCI and Atok Corp
b. WON land can be agricultural and mineral at the same time. NO

HELD: BCI and Atok have vested rights over the land. The Court found that the mineral claims
sold to both BCI and Atok have been perfected prior to the approval of the 1935 Constitution.
The court had earlier declared the legal effects of a valid mineral claim: it segregates the area
from the public domain and confers to the locator the beneficial ownership pf the claim. As of
1935, they were removed from the public domain and had become private properties of BCI and
Atok. Even if the land was included in the CCFR, it did not impair the rights vested in both
mining companies. The claim of the dela Rosas were utterly disregarded for weak
evidence, and even so, they could not have acquired the land through prescription as the same
had already been converted to mineral land. Land cannot be half agri and half mineral. The SC
said the classification of land must be categorical. In this case, while the land was intiailly
classified as forest land, it ceased to be so and became completely mineral when the mining
claims were perfected. Even if the surface was being tilled, it is still to be considered mineral
land. Jura regalia. The SC discussed jura regalia in Sections 3-6 of Commonwealth Act No.
137. The Regalian doctrine is intended for the benefit of the State, and not of private persons.
Example, if a person is the owner of agricultural land and minerals are discovered underneath,
his ownership pf the land does not give him the right to extract or utilize the minerals without
the permission of the State, to which the minerals belong. To further expound, once
minerals are discovered in the land, the State can discontinue the surface tilling so as to not
impede the mining undertaken therein.
POLICY: The classification of land must be categorical, it cannot be half and half. The
perfection of mining claims convert land to mineral land even if they were previously classified
as forest land.
10. Narra Nickel Mining and Development Corp. vs Redmont Consolidated Mines
G.R. No. 195580 April 21, 2014

Facts: Sometime in December 2006, respondent Redmont Consolidated Mines Corp. (Redmont),
a domestic corporation organized and existing under Philippine laws, took interest in mining and
exploring certain areas of the province of Palawan. After inquiring with the Department of
Environment and Natural Resources (DENR), it learned that the areas where it wanted to
undertake exploration and mining activities where already covered by Mineral Production
Sharing Agreement (MPSA) applications of petitioners Narra, Tesoro and McArthur. Petitioner
McArthur, through its predecessor-in-interest Sara Marie Mining, Inc. (SMMI), filed an
application for an MPSA and Exploration Permit (EP) with the Mines and Geo-Sciences Bureau
(MGB), Region IV-B, Office of the Department of Environment and Natural Resources (DENR).
Subsequently, SMMI was issued MPSA-AMA-IVB-153 covering an area of over 1,782 hectares
in Barangay Sumbiling, Municipality of Bataraza, Province of Palawan and EPA-IVB-44 which
includes an area of 3,720 hectares in Barangay Malatagao, Bataraza, Palawan. The MPSA and
EP were then transferred to Madridejos Mining Corporation (MMC) and, on November 6, 2006,
assigned to petitioner McArthur. Petitioner Narra acquired its MPSA from Alpha Resources and
Development Corporation and Patricia Louise Mining & Development Corporation (PLMDC)
which previously filed an application for an MPSA with the MGB, Region IV-B, DENR on
January 6, 1992. Through the said application, the DENR issued MPSA-IV-1-12 covering an
area of 3.277 hectares in barangays Calategas and San Isidro, Municipality of Narra, Palawan.
Subsequently, PLMDC conveyed, transferred and/or assigned its rights and interests over the
MPSA application in favor of Narra. Another MPSA application of SMMI was filed with the
DENR Region IV-B, labeled as MPSA-AMA-IVB-154 (formerly EPA-IVB-47) over 3,402
hectares in Barangays Malinao and Princesa Urduja, Municipality of Narra, Province of
Palawan. SMMI subsequently conveyed, transferred and assigned its rights and interest over the
said MPSA application to Tesoro. On January 2, 2007, Redmont filed before the Panel of
Arbitrators (POA) of the DENR three (3) separate petitions for the denial of petitioners
applications for MPSA designated as AMA-IVB-153, AMA-IVB-154 and MPSA IV-1-12. In the
petitions, Redmont alleged that at least 60% of the capital stock of McArthur, Tesoro and Narra
are owned and controlled by MBMI Resources, Inc. (MBMI), a 100% Canadian corporation.
Redmont reasoned that since MBMI is a considerable stockholder of petitioners, it was the
driving force behind petitioners filing of the MPSAs over the areas covered by applications
since it knows that it can only participate in mining activities through corporations which are
deemed Filipino citizens. Redmont argued that given that petitioners capital stocks were mostly
owned by MBMI, they were likewise disqualified from engaging in mining activities through
MPSAs, which are reserved only for Filipino citizens.
Issue: Whether or not the petitioner corporations are Filipino and can validly be issued MPSA
and EP.
Held: No. The SEC Rules provide for the manner of calculating the Filipino interest in a
corporation for purposes, among others, of determining compliance with nationality
requirements (the Investee Corporation). Such manner of computation is necessary since the
shares in the Investee Corporation may be owned both by individual stockholders (Investing
Individuals) and by corporations and partnerships (Investing Corporation). The said rules thus
provide for the determination of nationality depending on the ownership of the Investee
Corporation and, in certain instances, the Investing Corporation.

Under the SEC Rules, there are two cases in determining the nationality of the Investee
Corporation. The first case is the liberal rule, later coined by the SEC as the Control Test in its
30 May 1990 Opinion, and pertains to the portion in said Paragraph 7 of the 1967 SEC Rules
which states, (s)hares belonging to corporations or partnerships at least 60% of the capital of
which is owned by Filipino citizens shall be considered as of Philippine nationality. Under the
liberal Control Test, there is no need to further trace the ownership of the 60% (or more) Filipino
stockholdings of the Investing Corporation since a corporation which is at least 60% Filipino-
owned is considered as Filipino.

The second case is the Strict Rule or the Grandfather Rule Proper and pertains to the portion in
said Paragraph 7 of the 1967 SEC Rules which states, but if the percentage of Filipino
ownership in the corporation or partnership is less than 60%, only the number of shares
corresponding to such percentage shall be counted as of Philippine nationality. Under the Strict
Rule or Grandfather Rule Proper, the combined totals in the Investing Corporation and the
Investee Corporation must be traced (i.e., grandfathered) to determine the total percentage of
Filipino ownership. Moreover, the ultimate Filipino ownership of the shares must first be traced
to the level of the Investing Corporation and added to the shares directly owned in the Investee

In other words, based on the said SEC Rule and DOJ Opinion, the Grandfather Rule or the
second part of the SEC Rule applies only when the 60-40 Filipino-foreign equity ownership is in
doubt (i.e., in cases where the joint venture corporation with Filipino and foreign stockholders
with less than 60% Filipino stockholdings [or 59%] invests in other joint venture corporation
which is either 60-40% Filipino-alien or the 59% less Filipino). Stated differently, where the 60-
40 Filipino- foreign equity ownership is not in doubt, the Grandfather Rule will not apply.