TOPIC: Sec.

26 Admissions of a party

NARRA NICKEL v. REDMONT

G.R. No. 195580. April 21, 2014

FACTS:
 Redmont Consolidated Mines Corp. (Redmont) took interest in mining and exploring certain areas of
the province of Palawan. After inquiring with the 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.
 Redmont filed before the Panel of Arbitrators (POA) of the DENR three (3) separate petitions for the
denial of petitioners' applications for MPSA
 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. As such, they are
disqualified from engaging in mining activities through MPSAs, which are reserved only for Filipino
citizens.
 Petitioners averred that they were qualified persons under Section 3 (aq) of Republic Act No. (RA)
7942 or the Philippine Mining Act of 1995. Additionally, they stated that their nationality as
applicants is immaterial because they also applied for Financial or Technical Assistance
Agreements (FTAA) which are granted to foreign-owned corporations.
 POA issued a Resolution disqualifying petitioners from gaining MPSAs. It considered petitioners as
foreign corporations being "effectively controlled" by MBMI, a 100% Canadian company and declared
their MPSAs null and void. Motion for reconsideration was likewise denied.
 Aggrieved, petitioners Narra Nickel et al filed an appeal before the Mines Adjudication Board (MAB),
which issued an order reversing and setting aside the decision of POA in favor of petitioners.
 On petition for review, CA held reversed MAB declaring petitioners as disqualified from acquiring
MPSAs.
 On appeal, petitioners question the CA's use of the exception of the res inter alios acta or the
"admission by co-partner or agent" rule and "admission by privies" under the Rules of Court in the
instant case, by pointing out that statements made by MBMI should not be admitted in this case since
it is not a party to the case and that it is not a "partner" of petitioners. They asserted that before this
particular partnership can be formed, it should have been formally reduced into writing since the
capital involved is more than three thousand pesos (PhP3,000). Being that there is no evidence of
written agreement to form a partnership between petitioners and MBMI, no partnership was created.

ISSUES
 Whether or not the filing of the FTAA application during the pendency of the case is an admission that
indeed the respondent is not Filipino but rather of foreign nationality who is disqualified under the
laws. - YES
 Whether or not the CA erred in applying Sec 29 Rule 130 - Admission by co-partner or agent, such
that the statements made by MBMI should be admitted in this case - NO

HELD
 YES. The filing of the FTAA application conversion which allowed foreign corporation of the earlier
MPSA is an admission that indeed the respondent is not Filipino but rather of foreign nationality who
is disqualified under the laws.
 Also, their final act, wherein MBMI was able to allegedly sell/assign all its shares and interest in the
petitioner "holding companies" to DMCI, only proves that they were in fact not Filipino corporations
from the start
 NO. The partnership is defined as two or more persons who bind themselves to contribute money,
property, or industry to a common fund with the intention of dividing the profits among themselves. On
the other hand, joint ventures have been deemed to be "akin" to partnerships since it is difficult to
distinguish between joint ventures and partnerships. Accordingly, culled from the incidents and
records of this case, it can be assumed that the relationships entered between and among petitioners
and MBMI are no simple "joint venture agreements." As a rule, corporations are prohibited from
entering into partnership agreements; consequently, corporations enter into joint venture agreements
with other corporations or partnerships for certain transactions in order to form "pseudo partnerships."
Obviously, as the intricate web of "ventures" entered into by and among petitioners and MBMI was
executed to circumvent the legal prohibition against corporations entering into partnerships, then the
relationship created should be deemed as "partnerships," and the laws on partnership should be
applied. Thus, a joint venture agreement between and among corporations may be seen as similar to
partnerships since the elements of partnership are present.