Law on NatRes (73-83 1
DIDIPIO EARTH-SAVERS MULTI-PURPOSE
ASSOCIATION, INCORPORATED (DESAMA), MANUEL
BUTIC, CESAR MARIANO, LAURO ABANCE, BEN
TAYABAN, ANTONIO DINGCOG, TEDDY B.
KIMAYONG, ALONZO ANANAYO, ANTONIO MALAN-
UYA, JOSE BAHAG, ANDRES INLAB, RUFINO
LICYAYO, ALFREDO CULHI, CATALILNA INABYUHAN,
GUAY DUMMANG, GINA PULIDO, EDWIN ANSIBEY,
CORAZON SICUAN, LOPEZ DUMULAG, FREDDIE
AYDINON, VILMA JOSE, FLORENTINA MADDAWAT,
LINDA DINGCOG, ELMER SICUAN, GARY ANSIBEY,
JIMMY MADDAWAT, JIMMY GUAY, ALFREDO CUT-
ING, ANGELINA UDAN, OSCAR INLAB, JUANITA CUT-
ING, ALBERT PINKIHAN, CECILIA TAYABAN, CRISTA
BINWAK, PEDRO DUGAY, SR., EDUARDO ANANAYO,
ROBIN INLAB, JR., LORENZO PULIDO, TOMAS
BINWAG, EVELYN BUYA, JAIME DINGCOG, DINAOAN
CUT-ING, PEDRO DONATO, MYRNA GUAY, FLORA
ANSIBEY, GRACE DINAMLING, EDUARDO MENCIAS,
ROSENDA JACOB, SIONITA DINGCOG, GLORIA
JACOB, MAXIMA GUAY, RODRIGO PAGGADUT,
MARINA ANSIBEY, TOLENTINO INLAB, RUBEN
DULNUAN, GERONIMO LICYAYO, LEONCIO CUMTI,
MARY DULNUAN, FELISA BALANBAN, MYRNA
DUYAN, MARY MALAN-UYA, PRUDENCIO ANSIBEY,
GUILLERMO GUAY, MARGARITA CULHI, ALADIN
ANSIBEY, PABLO DUYAN, PEDRO PUGUON, JULIAN
INLAB, JOSEPH NACULON, ROGER BAJITA, DINAON
GUAY, JAIME ANANAYO, MARY ANSIBEY, LINA
ANANAYO, MAURA DUYAPAT, ARTEMEO ANANAYO,
MARY BABLING, NORA ANSIBEY, DAVID DULNUAN,
AVELINO PUGUON, LUCAS GUMAWI, LUISA ABBAC,
CATHRIN GUWAY, CLARITA TAYABAN, FLORA
JAVERA, RANDY SICOAN, FELIZA PUTAKI, CORAZON
P. DULNUAN, NENA D. BULLONG, ERMELYN GUWAY,
GILBERT BUTALE, JOSEPH B. BULLONG,
FRANCISCO PATNAAN, JR., SHERWIN DUGAY, TIRSO
GULLINGAY, BENEDICT T. NABALLIN, RAMON PUN-
ADWAN, ALFONSO DULNUAN, CARMEN D. BUTALE,
LOLITA ANSIBEY, ABRAHAM DULNUAN, ARLYNDA
BUTALE, MODESTO A. ANSIBEY, EDUARDO LUGAY,
ANTONIO HUMIWAT, ALFREDO PUMIHIC, MIKE TINO,
TONY CABARROGUIS, BASILIO TAMLIWOK, JR.,
NESTOR TANGID, ALEJO TUGUINAY, BENITO
LORENZO, RUDY BAHIWAG, ANALIZA BUTALE,
NALLEM LUBYOC, JOSEPH DUHAYON, RAFAEL
CAMPOL, MANUEL PUMALO, DELFIN AGALOOS,
PABLO CAYANGA, PERFECTO SISON, ELIAS
NATAMA, LITO PUMALO, SEVERINA DUGAY,
GABRIEL PAKAYAO, JEOFFREY SINDAP, FELIX
TICUAN, MARIANO S. MADDELA, MENZI TICAWA,
DOMINGA DUGAY, JOE BOLINEY, JASON ASANG,
TOMMY ATENYAYO, ALEJO AGMALIW, DIZON
AGMALIW, EDDIE ATOS, FELIMON BLANCO, DARRIL
DIGOY, LUCAS BUAY, ARTEMIO BRAZIL, NICANOR
MODI, LUIS REDULFIN, NESTOR JUSTINO, JAIME
CUMILA, BENEDICT GUINID, EDITHA ANIN, INOH-
YABAN BANDAO, LUIS BAYWONG, FELIPE
DUHALNGON, PETER BENNEL, JOSEPH T.
BUNGGALAN, JIMMY B. KIMAYONG, HENRY
PUGUON, PEDRO BUHONG, BUGAN NADIAHAN, SR.,
MARIA EDEN ORLINO, SPC, PERLA VISSORO, and
BISHOP RAMON VILLENA, Petitioners, vs. ELISEA
GOZUN, in her capacity as SECRETARY of the
DEPARTMENT OF ENVIRONMENT and NATURAL
RESOURCES (DENR), HORACIO RAMOS, in his
capacity as Director of the Mines and Geosciences
Bureau (MGB-DENR), ALBERTO ROMULO, in his
capacity as the Executive Secretary of the Office of
the President, RICHARD N. FERRER, in his capacity as
Acting Undersecretary of the Office of the President,
IAN HEATH SANDERCOCK, in his capacity as
President of CLIMAX-ARIMCO Mining Corporation.
Respondents; G.R. No. 157882 March 30, 2006
This petition for prohibition and mandamus under Rule 65
of the Rules of Court assails the constitutionality of
Republic Act No. 7942 otherwise known as the Philippine
Mining Act of 1995, together with the Implementing Rules
and Regulations issued pursuant thereto, Department of
Environment and Natural Resources (DENR)
Administrative Order No. 96-40, s. 1996 (DAO 96-40) and
of the Financial and Technical Assistance Agreement
(FTAA) entered into on 20 June 1994 by the Republic of
the Philippines and Arimco Mining Corporation (AMC), a
corporation established under the laws of Australia and
owned by its nationals.
On 25 July 1987, then President Corazon C. Aquino
promulgated Executive Order No. 279 which authorized
the DENR Secretary to accept, consider and evaluate
proposals from foreign-owned corporations or foreign
investors for contracts of 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.
On 3 March 1995, then President Fidel V. Ramos signed
into law Rep. Act No. 7942 entitled, "An Act Instituting A
New System of Mineral Resources Exploration,
Development, Utilization and Conservation," otherwise
known as the Philippine Mining Act of 1995.
On 15 August 1995, then DENR Secretary Victor O.
Ramos issued DENR Administrative Order (DAO) No. 23,
Series of 1995, containing the implementing guidelines of
Rep. Act No. 7942. This was soon superseded by DAO
No. 96-40, s. 1996, which took effect on 23 January 1997
after due publication.
Previously, however, or specifically on 20 June 1994,
President Ramos executed an FTAA with AMC over a total
land area of 37,000 hectares covering the provinces of
Nueva Vizcaya and Quirino. Included in this area is
Barangay Dipidio, Kasibu, Nueva Vizcaya.

Subsequently, AMC consolidated with Climax Mining
Limited to form a single company that now goes under the
new name of Climax-Arimco Mining Corporation (CAMC),
the controlling 99% of stockholders of which are Australian
nationals.
On 7 September 2001, counsels for petitioners filed a
demand letter addressed to then DENR Secretary
Heherson Alvarez, for the cancellation of the CAMC FTAA
for the primary reason that Rep. Act No. 7942 and its
Implementing Rules and Regulations DAO 96-40 are
unconstitutional. The Office of the Executive Secretary
was also furnished a copy of the said letter. There being
no response to both letters, another letter of the same
content dated 17 June 2002 was sent to President Gloria
Macapagal Arroyo. This letter was indorsed to the DENR
Secretary and eventually referred to the Panel of
Arbitrators of the Mines and Geosciences Bureau (MGB),
Regional Office No. 02, Tuguegarao, Cagayan, for further
action.
On 12 November 2002, counsels for petitioners received a
letter from the Panel of Arbitrators of the MGB requiring
the petitioners to comply with the Rules of the Panel of
Arbitrators before the letter may be acted upon.
Yet again, counsels for petitioners sent President Arroyo
another demand letter dated 8 November 2002. Said letter
was again forwarded to the DENR Secretary who referred
the same to the MGB, Quezon City.
In a letter dated 19 February 2003, the MGB rejected the
demand of counsels for petitioners for the cancellation of
the CAMC FTAA.1avvphil.net
Petitioners thus filed the present petition for prohibition
and mandamus, with a prayer for a temporary restraining
order. They pray that the Court issue an order:
1. enjoining public respondents from acting on any
application for FTAA;
2. declaring unconstitutional the Philippine Mining Act of
1995 and its Implementing Rules and Regulations;
3. canceling the FTAA issued to CAMC.
In their memorandum petitioners pose the following
issues:
I courts to exercise the power of judicial review, the
Whether or not Republic Act No. 7942 and the CAMC
FTAA are void because they allow the unjust and unlawful
taking of property without payment of just compensation ,
in violation of Section 9, Article III of the Constitution.
Law on NatRes (73-83 2
II
Whether or not the Mining Act and its Implementing Rules
and Regulations are void and unconstitutional for
sanctioning an unconstitutional administrative process of
determining just compensation.
III
Whether or not the State, through Republic Act No. 7942
and the CAMC FTAA, abdicated its primary responsibility
to the full control and supervision over natural resources.
IV
Whether or not the respondents interpretation of the role
of wholly foreign and foreign-owned corporations in their
involvement in mining enterprises, violates paragraph 4,
section 2, Article XII of the Constitution.
V
WHETHER OR NOT THE 1987 CONSTITUTION
PROHIBITS SERVICE CONTRACTS.1
Before going to the substantive issues, the procedural
question raised by public respondents shall first be dealt
with. Public respondents are of the view that petitioners
eminent domain claim is not ripe for adjudication as they
fail to allege that CAMC has actually taken their properties
nor do they allege that their property rights have been
endangered or are in danger on account of CAMCs FTAA.
In effect, public respondents insist that the issue of
eminent domain is not a justiciable controversy which this
Court can take cognizance of.
A justiciable controversy is defined as a definite and
concrete dispute touching on the legal relations of parties
having adverse legal interests which may be resolved by a
court of law through the application of a law.2 Thus, courts
have no judicial power to review cases involving political
questions and as a rule, will desist from taking cognizance
of speculative or hypothetical cases, advisory opinions and
cases that have become moot.3 The Constitution is quite
explicit on this matter.4 It provides that judicial power
includes the duty of the courts of justice to settle actual
controversies involving rights which are legally
demandable and enforceable. Pursuant to this
constitutional mandate, courts, through the power of
judicial review, are to entertain only real disputes between
conflicting parties through the application of law. For the
following must be extant (1) there must be an actual case
calling for the exercise of judicial power; (2) the question
must be ripe for adjudication; and (3) the person
challenging must have the "standing."5

An actual case or controversy involves a conflict of legal
rights, an assertion of opposite legal claims, susceptible of
judicial resolution as distinguished from a hypothetical or
abstract difference or dispute.6 There must be a
contrariety of legal rights that can be interpreted and
enforced on the basis of existing law and jurisprudence.
Closely related to the second requisite is that the question
must be ripe for adjudication. A question is considered ripe
for adjudication when the act being challenged has had a
direct adverse effect on the individual challenging it.7
The third requisite is legal standing or locus standi. It is
defined as a personal or 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, alleging more than a generalized grievance.8
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."9 Unless a person is injuriously affected in any
of his constitutional rights by the operation of statute or
ordinance, he has no standing.
In the instant case, there exists a live controversy involving
a clash of legal rights as Rep. Act No. 7942 has been
enacted, DAO 96-40 has been approved and an FTAAs
have been entered into. The FTAA holders have already
been operating in various provinces of the country. Among
them is CAMC which operates in the provinces of Nueva
Vizcaya and Quirino where numerous individuals including
the petitioners are imperiled of being ousted from their
landholdings in view of the CAMC FTAA. In light of this,
the court cannot await the adverse consequences of the
law in order to consider the controversy actual and ripe for
judicial intervention. Actual eviction of the land owners and
occupants need not happen for this Court to intervene. As
held in Pimentel, Jr. v. Hon. Aguirre:
By the mere enactment of the questioned law or the
approval of the challenged act, the dispute is said to have
ripened into a judicial controversy even without any other
overt act. Indeed, even a singular violation of the
Constitution and/or the law is enough to awaken judicial
duty.
Petitioners embrace various segments of the society.
These include Didipio Earth-Savers Multi-Purpose
Association, Inc., an organization of farmers and
indigenous peoples organized under Philippine laws,
representing a community actually affected by the mining
activities of CAMC, as well as other residents of areas
affected by the mining activities of CAMC. These
petitioners have the standing to raise the constitutionality
of the questioned FTAA as they allege a personal and
substantial injury.14 They assert that they are affected by
Law on NatRes (73-83 3
the mining activities of CAMC. Likewise, they are under
imminent threat of being displaced from their landholdings
as a result of the implementation of the questioned FTAA.
They thus meet the appropriate case requirement as they
assert an interest adverse to that of respondents who, on
the other hand, claim the validity of the assailed statute
and the FTAA of CAMC.
Besides, the transcendental importance of the issues
raised and the magnitude of the public interest involved
will have a bearing on the countrys economy which is to a
greater extent dependent upon the mining industry. Also
affected by the resolution of this case are the proprietary
rights of numerous residents in the mining contract areas
as well as the social existence of indigenous peoples
which are threatened. Based on these considerations, this
Court deems it proper to take cognizance of the instant
petition.
Having resolved the procedural question, the
constitutionality of the law under attack must be addressed
squarely.
First Substantive Issue: Validity of Section 76 of Rep. Act
No. 7942 and DAO 96-40
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.
Interpreting Section 76 of Rep. Act No. 7942 and Section
107 of DAO 96-40, juxtaposed with the concept of taking
of property for purposes of eminent domain in the case of
Republic v. Vda. de Castellvi,15 petitioners assert that
there is indeed a "taking" upon entry into private lands and
concession areas.
Republic v. Vda. de Castellvi defines "taking" under the
concept of eminent domain as entering upon private
property for more than a momentary period, and, under
the warrant or color of legal authority, devoting it to a
public use, or otherwise informally appropriating or
injuriously affecting it in such a way as to substantially oust
the owner and deprive him of all beneficial enjoyment
thereof.
From the criteria set forth in the cited case, petitioners
claim that the entry into a private property by CAMC,

pursuant to its FTAA, is for more than a momentary
period, i.e., for 25 years, and renewable for another 25
years; that the entry into the property is under the warrant
or color of legal authority pursuant to the FTAA executed
between the government and CAMC; and that the entry
substantially ousts the owner or possessor and deprives
him of all beneficial enjoyment of the property. These
facts, according to the petitioners, amount to taking. As
such, petitioners question the exercise of the power of
eminent domain as unwarranted because respondents
failed to prove that the entry into private property is
devoted for public use.
Petitioners also stress that even without the doctrine in the
Castellvi case, the nature of the mining activity, the extent
of the land area covered by the CAMC FTAA and the
various rights granted to the proponent or the FTAA
holder, such as (a) the right of possession of the
Exploration Contract Area, with full right of ingress and
egress and the right to occupy the same; (b) the right not
to be prevented from entry into private lands by surface
owners and/or occupants thereof when prospecting,
exploring and exploiting for minerals therein; (c) the right
to enjoy easement rights, the use of timber, water and
other natural resources in the Exploration Contract Area;
(d) the right of possession of the Mining Area, with full right
of ingress and egress and the right to occupy the same;
and (e) the right to enjoy easement rights, water and other
natural resources in the Mining Area, result in a taking of
private property.
Petitioners quickly add that even assuming arguendo that
there is no absolute, physical taking, at the very least,
Section 76 establishes a legal easement upon the surface
owners, occupants and concessionaires of a mining
contract area sufficient to deprive them of enjoyment and
use of the property and that such burden imposed by the
legal easement falls within the purview of eminent domain.
To further bolster their claim that the legal easement
established is equivalent to taking, petitioners cite the case
of National Power Corporation v. Gutierrez16 holding that
the easement of right-of-way imposed against the use of
the land for an indefinite period is a taking under the power
of eminent domain.
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."
Law on NatRes (73-83 4
Public respondents are inclined to believe that by entering
private lands and concession areas, FTAA holders do not
oust the owners thereof nor deprive them of all beneficial
enjoyment of their properties as the said entry merely
establishes a legal easement upon surface owners,
occupants and concessionaires of a mining contract area.
Taking in Eminent Domain Distinguished from Regulation
in Police Power
The power of eminent domain is the inherent right of the
state (and of those entities to which the power has been
lawfully delegated) to condemn private property to public
use upon payment of just compensation.17 On the other
hand, police power is the power of the state to promote
public welfare by restraining and regulating the use of
liberty and property.18 Although both police power and the
power of eminent domain have the general welfare for
their object, and recent trends show a mingling19 of the
two with the latter being used as an implement of the
former, there are still traditional distinctions between the
two.
Property condemned under police power is usually
noxious or intended for a noxious purpose; hence, no
compensation shall be paid.20 Likewise, in the exercise of
police power, property rights of private individuals are
subjected to restraints and burdens in order to secure the
general comfort, health, and prosperity of the state. Thus,
an ordinance prohibiting theaters from selling tickets in
excess of their seating capacity (which would result in the
diminution of profits of the theater-owners) was upheld
valid as this would promote the comfort, convenience and
safety of the customers.21 In U.S. v. Toribio,22 the court
upheld the provisions of Act No. 1147, a statute regulating
the slaughter of carabao for the purpose of conserving an
adequate supply of draft animals, as a valid exercise of
police power, notwithstanding the property rights
impairment that the ordinance imposed on cattle owners.
A zoning ordinance prohibiting the operation of a lumber
yard within certain areas was assailed as unconstitutional
in that it was an invasion of the property rights of the
lumber yard owners in People v. de Guzman.23 The Court
nonetheless ruled that the regulation was a valid exercise
of police power. A similar ruling was arrived at in Seng
Kee S Co. v. Earnshaw and Piatt24 where an ordinance
divided the City of Manila into industrial and residential
areas.
A thorough scrutiny of the extant jurisprudence leads to a
cogent deduction that where a property interest is merely
restricted because the continued use thereof would be
injurious to public welfare, or where property is destroyed
because its continued existence would be injurious to
public interest, there is no compensable taking.25
However, when a property interest is appropriated and

applied to some public purpose, there is compensable
taking.26
According to noted constitutionalist, Fr. Joaquin Bernas,
SJ, in the exercise of its police power regulation, the state
restricts the use of private property, but none of the
property interests in the bundle of rights which constitute
ownership is appropriated for use by or for the benefit of
the public.27 Use of the property by the owner was limited,
but no aspect of the property is used by or for the
public.28 The deprivation of use can in fact be total and it
will not constitute compensable taking if nobody else
acquires use of the property or any interest therein.29
If, however, in the regulation of the use of the property,
somebody else acquires the use or interest thereof, such
restriction constitutes compensable taking. Thus, in City
Government of Quezon City v. Ericta,30 it was argued by
the local government that an ordinance requiring private
cemeteries to reserve 6% of their total areas for the burial
of paupers was a valid exercise of the police power under
the general welfare clause. This court did not agree in the
contention, ruling that property taken under the police
power is sought to be destroyed and not, as in this case,
to be devoted to a public use. It further declared that the
ordinance in question was actually a taking of private
property without just compensation of a certain area from
a private cemetery to benefit paupers who are charges of
the local government. Being an exercise of eminent
domain without provision for the payment of just
compensation, the same was rendered invalid as it
violated the principles governing eminent domain.
In People v. Fajardo,31 the municipal mayor refused
Fajardo permission to build a house on his own land on
the ground that the proposed structure would destroy the
view or beauty of the public plaza. The ordinance relied
upon by the mayor prohibited the construction of any
building that would destroy the view of the plaza from the
highway. The court ruled that the municipal ordinance
under the guise of police power permanently divest
owners of the beneficial use of their property for the
benefit of the public; hence, considered as a taking under
the power of eminent domain that could not be
countenanced without payment of just compensation to
the affected owners. In this case, what the municipality
wanted was to impose an easement on the property in
order to preserve the view or beauty of the public plaza,
which was a form of utilization of Fajardos property for
public benefit.32
While the power of eminent domain often results in the
appropriation of title to or possession of property, it need
not always be the case. Taking may include trespass
without actual eviction of the owner, material impairment of
the value of the property or prevention of the ordinary uses
for which the property was intended such as the
establishment of an easement.33 In Ayala de Roxas v.
Law on NatRes (73-83 5
City of Manila,34 it was held that the imposition of burden
over a private property through easement was considered
taking; hence, payment of just compensation is required.
The Court declared:
And, considering that the easement intended to be
established, whatever may be the object thereof, is not
merely a real right that will encumber the property, but is
one tending to prevent the exclusive use of one portion of
the same, by expropriating it for public use which, be it
what it may, can not be accomplished unless the owner of
the property condemned or seized be previously and duly
indemnified, it is proper to protect the appellant by means
of the remedy employed in such cases, as it is only
adequate remedy when no other legal action can be
resorted to, against an intent which is nothing short of an
arbitrary restriction imposed by the city by virtue of the
coercive power with which the same is invested.
And in the case of National Power Corporation v.
Gutierrez,35 despite the NPCs protestation that the
owners were not totally deprived of the use of the land and
could still plant the same crops as long as they did not
come into contact with the wires, the Court nevertheless
held that the easement of right-of-way was a taking under
the power of eminent domain. The Court said:
In the case at bar, the easement of right-of-way is
definitely a taking under the power of eminent domain.
Considering the nature and effect of the installation of 230
KV Mexico-Limay transmission lines, the limitation
imposed by NPC against the use of the land for an
indefinite period deprives private respondents of its
ordinary use.
A case exemplifying an instance of compensable taking
which does not entail transfer of title is Republic v.
Philippine Long Distance Telephone Co.36 Here, the
Bureau of Telecommunications, a government
instrumentality, had contracted with the PLDT for the
interconnection between the Government Telephone
System and that of the PLDT, so that the former could
make use of the lines and facilities of the PLDT. In its
desire to expand services to government offices, the
Bureau of Telecommunications demanded to expand its
use of the PLDT lines. Disagreement ensued on the terms
of the contract for the use of the PLDT facilities. The Court
ruminated:
Normally, of course, the power of eminent domain results
in the taking or appropriation of title to, and possession of,
the expropriated property; but no cogent reason appears
why said power may not be availed of to impose only a
burden upon the owner of the condemned property,
without loss of title and possession. It is unquestionable
that real property may, through expropriation, be subjected
to an easement right of way.37

In Republic v. Castellvi,38 this Court had the occasion to
spell out the requisites of taking in eminent domain, to wit:
(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.
As shown by the foregoing jurisprudence, a regulation
which substantially deprives the owner of his proprietary
rights and restricts the beneficial use and enjoyment for
public use amounts to compensable taking. In the case
under consideration, the entry referred to in Section 76
and the easement rights under Section 75 of Rep. Act No.
7942 as well as the various rights to CAMC under its
FTAA are no different from the deprivation of proprietary
rights in the cases discussed which this Court considered
as taking. Section 75 of the law in question reads:
Easement Rights. - When mining areas are so situated
that for purposes of more convenient mining operations it
is necessary to build, construct or install on the mining
areas or lands owned, occupied or leased by other
persons, such infrastructure as roads, railroads, mills,
waste dump sites, tailing ponds, warehouses, staging or
storage areas and port facilities, tramways, runways,
airports, electric transmission, telephone or telegraph
lines, dams and their normal flood and catchment areas,
sites for water wells, ditches, canals, new river beds,
pipelines, flumes, cuts, shafts, tunnels, or mills, the
contractor, upon payment of just compensation, shall be
entitled to enter and occupy said mining areas or lands.
Section 76 provides:
Entry into private lands and concession areas Subject to
prior notification, holders of mining rights shall not be
prevented from entry into private lands and concession
areas by surface owners, occupants, or concessionaires
when conducting mining operations therein.
The CAMC FTAA grants in favor of CAMC the right of
possession of the Exploration Contract Area, the full right
of ingress and egress and the right to occupy the same. It
also bestows CAMC the right not to be prevented from
entry into private lands by surface owners or occupants
thereof when prospecting, exploring and exploiting
minerals therein.
Law on NatRes (73-83 6
The entry referred to in Section 76 is not just a simple
right-of-way which is ordinarily allowed under the
provisions of the Civil Code. Here, the holders of mining
rights enter private lands for purposes of conducting
mining activities such as exploration, extraction and
processing of minerals. Mining right holders build mine
infrastructure, dig mine shafts and connecting tunnels,
prepare tailing ponds, storage areas and vehicle depots,
install their machinery, equipment and sewer systems. On
top of this, under Section 75, easement rights are
accorded to them where they may build warehouses, port
facilities, electric transmission, railroads and other
infrastructures necessary for mining operations. All these
will definitely oust the owners or occupants of the affected
areas the beneficial ownership of their lands. Without a
doubt, taking occurs once mining operations commence.
Section 76 of Rep. Act No. 7942 is a Taking Provision
Moreover, it would not be amiss to revisit the history of
mining laws of this country which would help us
understand Section 76 of Rep. Act No. 7942.
This provision is first found in Section 27 of
Commonwealth Act No. 137 which took effect on 7
November 1936, viz:
Before entering private lands the prospector shall first
apply in writing for written permission of the private owner,
claimant, or holder thereof, and in case of refusal by such
private owner, claimant, or holder to grant such
permission, or in case of disagreement as to the amount of
compensation to be paid for such privilege of prospecting
therein, the amount of such compensation shall be fixed
by agreement among the prospector, the Director of the
Bureau of Mines and the surface owner, and in case of
their failure to unanimously agree as to the amount of
compensation, all questions at issue shall be determined
by the Court of First Instance.
Similarly, the pertinent provision of Presidential Decree
No. 463, otherwise known as "The Mineral Resources
Development Decree of 1974," provides:
SECTION 12. Entry to Public and Private Lands. A
person who desires to conduct prospecting or other mining
operations within public lands covered by concessions or
rights other than mining shall first obtain the written
permission of the government official concerned before
entering such lands. In the case of private lands, the
written permission of the owner or possessor of the land
must be obtained before entering such lands. In either
case, if said permission is denied, the Director, at the
request of the interested person may intercede with the
owner or possessor of the land. If the intercession fails,
the interested person may bring suit in the Court of First
Instance of the province where the land is situated. If the
court finds the request justified, it shall issue an order

granting the permission after fixing the amount of
compensation and/or rental due the owner or possessor:
Provided, That pending final adjudication of such amount,
the court shall upon recommendation of the Director
permit the interested person to enter, prospect and/or
undertake other mining operations on the disputed land
upon posting by such interested person of a bond with the
court which the latter shall consider adequate to answer
for any damage to the owner or possessor of the land
resulting from such entry, prospecting or any other mining
operations.
Hampered by the difficulties and delays in securing
surface rights for the entry into private lands for purposes
of mining operations, Presidential Decree No. 512 dated
19 July 1974 was passed into law in order to achieve full
and accelerated mineral resources development. Thus,
Presidential Decree No. 512 provides for a new system of
surface rights acquisition by mining prospectors and
claimants. Whereas in Commonwealth Act No. 137 and
Presidential Decree No. 463 eminent domain may only be
exercised in order that the mining claimants can build,
construct or install roads, railroads, mills, warehouses and
other facilities, this time, the power of eminent domain may
now be invoked by mining operators for the entry,
acquisition and use of private lands, viz:
SECTION 1. Mineral prospecting, location, exploration,
development and exploitation is hereby declared of public
use and benefit, and for which the power of eminent
domain may be invoked and exercised for the entry,
acquisition and use of private lands. x x x.
The evolution of mining laws gives positive indication that
mining operators who are qualified to own lands were
granted the authority to exercise eminent domain for the
entry, acquisition, and use of private lands in areas open
for mining operations. This grant of authority extant in
Section 1 of Presidential Decree No. 512 is not expressly
repealed by Section 76 of Rep. Act No. 7942; and neither
are the former statutes impliedly repealed by the former.
These two provisions can stand together even if Section
76 of Rep. Act No. 7942 does not spell out the grant of the
privilege to exercise eminent domain which was present in
the old law.
It is an established rule in statutory construction that in
order that one law may operate to repeal another law, the
two laws must be inconsistent.39 The former must be so
repugnant as to be irreconciliable with the latter act.
Simply because a latter enactment may relate to the same
subject matter as that of an earlier statute is not of itself
sufficient to cause an implied repeal of the latter, since the
new law may be cumulative or a continuation of the old
one. As has been the ruled, repeals by implication are not
favored, and will not be decreed unless it is manifest that
the legislature so intended.40 As laws are presumed to be
passed with deliberation and with full knowledge of all
Law on NatRes (73-83 7
existing ones on the subject, it is but reasonable to
conclude that in passing a statute it was not intended to
interfere with or abrogate any former law relating to the
same matter, unless the repugnancy between the two is
not only irreconcilable, but also clear and convincing, and
flowing necessarily from the language used, unless the
later act fully embraces the subject matter of the earlier, or
unless the reason for the earlier act is beyond
peradventure removed.41 Hence, every effort must be
used to make all acts stand and if, by any reasonable
construction, they can be reconciled, the latter act will not
operate as a repeal of the earlier.
Considering that Section 1 of Presidential Decree No. 512
granted the qualified mining operators the authority to
exercise eminent domain and since this grant of authority
is deemed incorporated in Section 76 of Rep. Act No.
7942, the inescapable conclusion is that the latter
provision is a taking provision.
While this Court declares that the assailed provision is a
taking provision, this does not mean that it is
unconstitutional on the ground that it allows taking of
private property without the determination of public use
and the payment of just compensation.
The taking to be valid must be for public use.42 Public use
as a requirement for the valid exercise of the power of
eminent domain is now synonymous with public interest,
public benefit, public welfare and public convenience.43 It
includes the broader notion of indirect public benefit or
advantage. Public use as traditionally understood as
"actual use by the public" has already been abandoned.44
Mining industry plays a pivotal role in the economic
development of the country and is a vital tool in the
governments thrust of accelerated recovery.45 The
importance of the mining industry for national development
is expressed in Presidential Decree No. 463:
WHEREAS, mineral production is a major support of the
national economy, and therefore the intensified discovery,
exploration, development and wise utilization of the
countrys mineral resources are urgently needed for
national development.
Irrefragably, mining is an industry which is of public
benefit.
That public use is negated by the fact that the state would
be taking private properties for the benefit of private
mining firms or mining contractors is not at all true. In
Heirs of Juancho Ardona v. Reyes,46 petitioners therein
contended that the promotion of tourism is not for public
use because private concessionaires would be allowed to
maintain various facilities such as restaurants, hotels,
stores, etc., inside the tourist area. The Court thus
contemplated:

The rule in Berman v. Parker [348 U.S. 25; 99 L. ed. 27] of
deference to legislative policy even if such policy might
mean taking from one private person and conferring on
another private person applies as well in the Philippines.
". . . Once the object is within the authority of Congress,
the means by which it will be attained is also for Congress
to determine. Here one of the means chosen is the use of
private enterprise for redevelopment of the area.
Appellants argue that this makes the project a taking from
one businessman for the benefit of another businessman.
But the means of executing the project are for Congress
and Congress alone to determine, once the public purpose
has been established. x x x"47
Petitioners further maintain that the states discretion to
decide when to take private property is reduced
contractually by Section 13.5 of the CAMC FTAA, which
reads:
If the CONTRACTOR so requests at its option, the
GOVERNMENT shall use its offices and legal powers to
assist in the acquisition at reasonable cost of any surface
areas or rights required by the CONTRACTOR at the
CONTRACTORs cost to carry out the Mineral Exploration
and the Mining Operations herein.
All obligations, payments and expenses arising from, or
incident to, such agreements or acquisition of right shall be
for the account of the CONTRACTOR and shall be
recoverable as Operating Expense.
According to petitioners, the government is reduced to a
sub-contractor upon the request of the private respondent,
and on account of the foregoing provision, the contractor
can compel the government to exercise its power of
eminent domain thereby derogating the latters power to
expropriate property.
The provision of the FTAA in question lays down the ways
and means by which the foreign-owned contractor,
disqualified to own land, identifies to the government the
specific surface areas within the FTAA contract area to be
acquired for the mine infrastructure.48 The government
then acquires ownership of the surface land areas on
behalf of the contractor, through a voluntary transaction in
order to enable the latter to proceed to fully implement the
FTAA. Eminent domain is not yet called for at this stage
since there are still various avenues by which surface
rights can be acquired other than expropriation. The FTAA
provision under attack merely facilitates the
implementation of the FTAA given to CAMC and shields it
from violating the Anti-Dummy Law. Hence, when
confronted with the same question in La Bugal-BLaan
Tribal Association, Inc. v. Ramos,49 the Court answered:
Law on NatRes (73-83 8
Clearly, petitioners have needlessly jumped to
unwarranted conclusions, without being aware of the
rationale for the said provision. That provision does not
call for the exercise of the power of eminent domain -- and
determination of just compensation is not an issue -- as
much as it calls for a qualified party to acquire the surface
rights on behalf of a foreign-owned contractor.
Rather than having the foreign contractor act through a
dummy corporation, having the State do the purchasing is
a better alternative. This will at least cause the
government to be aware of such transaction/s and foster
transparency in the contractors dealings with the local
property owners. The government, then, will not act as a
subcontractor of the contractor; rather, it will facilitate the
transaction and enable the parties to avoid a technical
violation of the Anti-Dummy Law.
There is also no basis for the claim that the Mining Law
and its implementing rules and regulations do not provide
for just compensation in expropriating private properties.
Section 76 of Rep. Act No. 7942 and Section 107 of DAO
96-40 provide for the payment of just compensation:
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.
Such compensation shall be based on the agreement
entered into between the holder of mining rights and the
surface owner, occupant or concessionaire thereof, where
appropriate, in accordance with P.D. No. 512. (Emphasis
supplied.)
Second Substantive Issue: Power of Courts to Determine
Just Compensation
Closely-knit to the issue of taking is the determination of
just compensation. It is contended that Rep. Act No. 7942
and Section 107 of DAO 96-40 encroach on the power of
the trial courts to determine just compensation in eminent
domain cases inasmuch as the same determination of
proper compensation are cognizable only by the Panel of
Arbitrators.
The question on the judicial determination of just
compensation has been settled in the case of Export
Processing Zone Authority v. Dulay50 wherein the court
declared that the determination of just compensation in

eminent domain cases is a judicial function. Even as the
executive department or the legislature may make the
initial determinations, the same cannot prevail over the
courts findings.
Implementing Section 76 of Rep. Act No. 7942, Section
105 of DAO 96-40 states that holder(s) of mining right(s)
shall not be prevented from entry into its/their
contract/mining areas for the purpose of exploration,
development, and/or utilization. That in cases where
surface owners of the lands, occupants or concessionaires
refuse to allow the permit holder or contractor entry, the
latter shall bring the matter before the Panel of Arbitrators
for proper disposition. Section 106 states that voluntary
agreements between the two parties permitting the mining
right holders to enter and use the surface owners lands
shall be registered with the Regional Office of the MGB. In
connection with Section 106, Section 107 provides that the
compensation for the damage done to the surface owner,
occupant or concessionaire as a consequence of mining
operations or as a result of the construction or installation
of the infrastructure shall be properly and justly
compensated and that such compensation shall be based
on the agreement between the holder of mining rights and
surface owner, occupant or concessionaire, or where
appropriate, in accordance with Presidential Decree No.
512. In cases where there is disagreement to the
compensation or where there is no agreement, the matter
shall be brought before the Panel of Arbitrators. Section
206 of the implementing rules and regulations provides an
aggrieved party the remedy to appeal the decision of the
Panel of Arbitrators to the Mines Adjudication Board, and
the latters decision may be reviewed by the Supreme
Court by filing a petition for review on certiorari.51
An examination of the foregoing provisions gives no
indication that the courts are excluded from taking
cognizance of expropriation cases under the mining law.
The disagreement referred to in Section 107 does not
involve the exercise of eminent domain, rather it
contemplates of a situation wherein the permit holders are
allowed by the surface owners entry into the latters lands
and disagreement ensues as regarding the proper
compensation for the allowed entry and use of the private
lands. Noticeably, the provision points to a voluntary sale
or transaction, but not to an involuntary sale.
The legislature, in enacting the mining act, is presumed to
have deliberated with full knowledge of all existing laws
and jurisprudence on the subject. Thus, it is but
reasonable to conclude that in passing such statute it was
in accord with the existing laws and jurisprudence on the
jurisdiction of courts in the determination of just
compensation and that it was not intended to interfere with
or abrogate any former law relating to the same matter.
Indeed, there is nothing in the provisions of the assailed
law and its implementing rules and regulations that
exclude the courts from their jurisdiction to determine just
Law on NatRes (73-83 9
compensation in expropriation proceedings involving
mining operations. Although Section 105 confers upon the
Panel of Arbitrators the authority to decide cases where
surface owners, occupants, concessionaires refuse permit
holders entry, thus, necessitating involuntary taking, this
does not mean that the determination of the just
compensation by the Panel of Arbitrators or the Mines
Adjudication Board is final and conclusive. The
determination is only preliminary unless accepted by all
parties concerned. There is nothing wrong with the grant
of primary jurisdiction by the Panel of Arbitrators or the
Mines Adjudication Board to determine in a preliminary
matter the reasonable compensation due the affected
landowners or occupants.52 The original and exclusive
jurisdiction of the courts to decide determination of just
compensation remains intact despite the preliminary
determination made by the administrative agency. As held
in Philippine Veterans Bank v. Court of Appeals53:
The jurisdiction of the Regional Trial Courts is not any less
"original and exclusive" because the question is first
passed upon by the DAR, as the judicial proceedings are
not a continuation of the administrative determination.
Third Substantive Issue: Sufficient Control by the State
Over Mining Operations
Anent the third issue, petitioners charge that Rep. Act No.
7942, as well as its Implementing Rules and Regulations,
makes it possible for FTAA contracts to cede over to a
fully foreign-owned corporation full control and
management of mining enterprises, with the result that the
State is allegedly reduced to a passive regulator
dependent on submitted plans and reports, with weak
review and audit powers. The State is not acting as the
supposed owner of the natural resources for and on behalf
of the Filipino people; it practically has little effective say in
the decisions made by the enterprise. In effect, petitioners
asserted that the law, the implementing regulations, and
the CAMC FTAA cede beneficial ownership of the mineral
resources to the foreign contractor.
It must be noted that this argument was already raised in
La Bugal-BLaan Tribal Association, Inc. v. Ramos,54
where the Court answered in the following manner:
RA 7942 provides for the states control and supervision
over mining operations. The following provisions thereof
establish the mechanism of inspection and visitorial rights
over mining operations and institute reportorial
requirements in this manner:
1. Sec. 8 which provides for the DENRs power of over-all
supervision and periodic review for "the conservation,
management, development and proper use of the States
mineral resources";

2. Sec. 9 which authorizes the Mines and Geosciences
Bureau (MGB) under the DENR to exercise "direct charge
in the administration and disposition of mineral resources",
and empowers the MGB to "monitor the compliance by the
contractor of the terms and conditions of the mineral
agreements", "confiscate surety and performance bonds",
and deputize whenever necessary any member or unit of
the Phil. National Police, barangay, duly registered non-
governmental organization (NGO) or any qualified person
to police mining activities;
3. Sec. 66 which vests in the Regional Director "exclusive
jurisdiction over safety inspections of all installations,
whether surface or underground", utilized in mining
operations.
4. Sec. 35, which incorporates into all FTAAs the following
terms, conditions and warranties:
"(g) Mining operations shall be conducted in accordance
with the provisions of the Act and its IRR.
"(h) Work programs and minimum expenditures
commitments.
xxxx
"(k) Requiring proponent to effectively use appropriate
anti-pollution technology and facilities to protect the
environment and restore or rehabilitate mined-out areas.
"(l) The contractors shall furnish the Government records
of geologic, accounting and other relevant data for its
mining operation, and that books of accounts and records
shall be open for inspection by the government. x x x.
"(m) Requiring the proponent to dispose of the minerals at
the highest price and more advantageous terms and
conditions.
xxxx
"(o) Such other terms and conditions consistent with the
Constitution and with this Act as the Secretary may deem
to be for the best interest of the State and the welfare of
the Filipino people."
The foregoing provisions of Section 35 of RA 7942 are
also reflected and implemented in Section 56 (g), (h), (l),
(m) and (n) of the Implementing Rules, DAO 96-40.
Moreover, RA 7942 and DAO 96-40 also provide various
stipulations confirming the governments control over
mining enterprises:
The contractor is to relinquish to the government those
portions of the contract area not needed for mining
operations and not covered by any declaration of mining
Law on NatRes (73-83 10
feasibility (Section 35-e, RA 7942; Section 60, DAO 96-
40).
The contractor must comply with the provisions pertaining
to mine safety, health and environmental protection
(Chapter XI, RA 7942; Chapters XV and XVI, DAO 96-40).
For violation of any of its terms and conditions,
government may cancel an FTAA. (Chapter XVII, RA
7942; Chapter XXIV, DAO 96-40).
An FTAA contractor is obliged to open its books of
accounts and records for 0inspection by the government
(Section 56-m, DAO 96-40).
An FTAA contractor has to dispose of the minerals and by-
products at the highest market price and register with the
MGB a copy of the sales agreement (Section 56-n, DAO
96-40).
MGB is mandated to monitor the contractors compliance
with the terms and conditions of the FTAA; and to
deputize, when necessary, any member or unit of the
Philippine National Police, the barangay or a DENR-
accredited nongovernmental organization to police mining
activities (Section 7-d and -f, DAO 96-40).
An FTAA cannot be transferred or assigned without prior
approval by the President (Section 40, RA 7942; Section
66, DAO 96-40).
A mining project under an FTAA cannot proceed to the
construction/development/utilization stage, unless its
Declaration of Mining Project Feasibility has been
approved by government (Section 24, RA 7942).
The Declaration of Mining Project Feasibility filed by the
contractor cannot be approved without submission of the
following documents:
1. Approved mining project feasibility study (Section 53-d,
DAO 96-40)
2. Approved three-year work program (Section 53-a-4,
DAO 96-40)
3. Environmental compliance certificate (Section 70, RA
7942)
4. Approved environmental protection and enhancement
program (Section 69, RA 7942)
5. Approval by the Sangguniang
Panlalawigan/Bayan/Barangay (Section 70, RA 7942;
Section 27, RA 7160)
6. Free and prior informed consent by the indigenous
peoples concerned, including payment of royalties through

a Memorandum of Agreement (Section 16, RA 7942;
Section 59, RA 8371)
The FTAA contractor is obliged to assist in the
development of its mining community, promotion of the
general welfare of its inhabitants, and development of
science and mining technology (Section 57, RA 7942).
The FTAA contractor is obliged to submit reports (on
quarterly, semi-annual or annual basis as the case may
be; per Section 270, DAO 96-40), pertaining to the
following:
1. Exploration
2. Drilling
3. Mineral resources and reserves
4. Energy consumption
5. Production
6. Sales and marketing
7. Employment
8. Payment of taxes, royalties, fees and other Government
Shares
9. Mine safety, health and environment
10. Land use
11. Social development
12. Explosives consumption
An FTAA pertaining to areas within government
reservations cannot be granted without a written clearance
from the government agencies concerned (Section 19, RA
7942; Section 54, DAO 96-40).
An FTAA contractor is required to post a financial
guarantee bond in favor of the government in an amount
equivalent to its expenditures obligations for any particular
year. This requirement is apart from the representations
and warranties of the contractor that it has access to all
the financing, managerial and technical expertise and
technology necessary to carry out the objectives of the
FTAA (Section 35-b, -e, and -f, RA 7942).
Other reports to be submitted by the contractor, as
required under DAO 96-40, are as follows: an
environmental report on the rehabilitation of the mined-out
area and/or mine waste/tailing covered area, and anti-
pollution measures undertaken (Section 35-a-2); annual
reports of the mining operations and records of geologic
Law on NatRes (73-83 11
accounting (Section 56-m); annual progress reports and
final report of exploration activities (Section 56-2).
Other programs required to be submitted by the
contractor, pursuant to DAO 96-40, are the following: a
safety and health program (Section 144); an
environmental work program (Section 168); an annual
environmental protection and enhancement program
(Section 171).
The foregoing gamut of requirements, regulations,
restrictions and limitations imposed upon the FTAA
contractor by the statute and regulations easily overturns
petitioners contention. The setup under RA 7942 and
DAO 96-40 hardly relegates the State to the role of a
"passive regulator" dependent on submitted plans and
reports. On the contrary, the government agencies
concerned are empowered to approve or disapprove --
hence, to influence, direct and change -- the various work
programs and the corresponding minimum expenditure
commitments for each of the exploration, development and
utilization phases of the mining enterprise.
Once these plans and reports are approved, the contractor
is bound to comply with its commitments therein. Figures
for mineral production and sales are regularly monitored
and subjected to government review, in order to ensure
that the products and by-products are disposed of at the
best prices possible; even copies of sales agreements
have to be submitted to and registered with MGB. And the
contractor is mandated to open its books of accounts and
records for scrutiny, so as to enable the State to determine
if the government share has been fully paid.
The State may likewise compel the contractors
compliance with mandatory requirements on mine safety,
health and environmental protection, and the use of anti-
pollution technology and facilities. Moreover, the
contractor is also obligated to assist in the development of
the mining community and to pay royalties to the
indigenous peoples concerned.
Cancellation of the FTAA may be the penalty for violation
of any of its terms and conditions and/or noncompliance
with statutes or regulations. This general, all-around,
multipurpose sanction is no trifling matter, especially to a
contractor who may have yet to recover the tens or
hundreds of millions of dollars sunk into a mining project.
Overall, considering the provisions of the statute and the
regulations just discussed, we believe that the State
definitely possesses the means by which it can have the
ultimate word in the operation of the enterprise, set
directions and objectives, and detect deviations and
noncompliance by the contractor; likewise, it has the
capability to enforce compliance and to impose sanctions,
should the occasion therefor arise.

In other words, the FTAA contractor is not free to do
whatever it pleases and get away with it; on the contrary, it
will have to follow the government line if it wants to stay in
the enterprise. Ineluctably then, RA 7942 and DAO 96-40
vest in the government more than a sufficient degree of
control and supervision over the conduct of mining
operations.
Fourth Substantive Issue: The Proper Interpretation of the
Constitutional Phrase "Agreements Involving Either
Technical or Financial Assistance
In interpreting the first and fourth paragraphs of Section 2,
Article XII of the Constitution, petitioners set forth the
argument that foreign corporations are barred from making
decisions on the conduct of operations and the
management of the mining project. The first paragraph of
Section 2, Article XII reads:
x x x 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
percentum 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 x x x.
The fourth paragraph of Section 2, Article XII provides:
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 x x x.
Petitioners maintain that the first paragraph bars aliens
and foreign-owned corporations from entering into any
direct arrangement with the government including those
which involve co-production, joint venture or production
sharing agreements. They likewise insist that the fourth
paragraph allows foreign-owned corporations to participate
in the large-scale exploration, development and utilization
of natural resources, but such participation, however, is
merely limited to an agreement for either financial or
technical assistance only.
Again, this issue has already been succinctly passed upon
by this Court in La Bugal-BLaan Tribal Association, Inc. v.
Ramos.55 In discrediting such argument, the Court
ratiocinated:
Law on NatRes (73-83 12
Petitioners claim that the phrase "agreements x x x
involving either technical or financial assistance" simply
means technical assistance or financial assistance
agreements, nothing more and nothing else. They insist
that there is no ambiguity in the phrase, and that a plain
reading of paragraph 4 quoted above leads to the
inescapable conclusion that what a foreign-owned
corporation may enter into with the government is merely
an agreement for either financial or technical assistance
only, for the large-scale exploration, development and
utilization of minerals, petroleum and other mineral oils;
such a limitation, they argue, excludes foreign
management and operation of a mining enterprise.
This restrictive interpretation, petitioners believe, is in line
with the general policy enunciated by the Constitution
reserving to Filipino citizens and corporations the use and
enjoyment of the countrys natural resources. They
maintain that this Courts Decision of January 27, 2004
correctly declared the WMCP FTAA, along with pertinent
provisions of RA 7942, void for allowing a foreign
contractor to have direct and exclusive management of a
mining enterprise. Allowing such a privilege not only runs
counter to the "full control and supervision" that the State
is constitutionally mandated to exercise over the
exploration, development and utilization of the countrys
natural resources; doing so also vests in the foreign
company "beneficial ownership" of our mineral resources.
It will be recalled that the Decision of January 27, 2004
zeroed in on "management or other forms of assistance"
or other activities associated with the "service contracts" of
the martial law regime, since "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."
xxxx
We do not see how applying a strictly literal or verba legis
interpretation of paragraph 4 could inexorably lead to the
conclusions arrived at in the ponencia. First, the drafters
choice of words -- their use of the phrase agreements x x x
involving either technical or financial assistance -- does
not indicate the intent to exclude other modes of
assistance. The drafters opted to use involving when they
could have simply said agreements for financial or
technical assistance, if that was their intention to begin
with. In this case, the limitation would be very clear and no
further debate would ensue.
In contrast, the use of the word "involving" signifies the
possibility of the inclusion of other forms of assistance or
activities having to do with, otherwise related to or
compatible with financial or technical assistance. The word
"involving" as used in this context has three connotations
that can be differentiated thus: one, the sense of
"concerning," "having to do with," or "affecting"; two,

"entailing," "requiring," "implying" or "necessitating"; and
three, "including," "containing" or "comprising."
Plainly, none of the three connotations convey a sense of
exclusivity. Moreover, the 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.
In short, it allows for the possibility that matters, other than
those explicitly mentioned, could be made part of the
agreement. Thus, we are now led to the conclusion that
the use of the word "involving" implies that these
agreements with foreign corporations are not limited to
mere financial or technical assistance. The difference in
sense becomes very apparent when we juxtapose
"agreements for technical or financial assistance" against
"agreements including technical or financial assistance."
This much is unalterably clear in a verba legis approach.
Second, if the real intention of the drafters was to confine
foreign corporations to financial or technical assistance
and nothing more, their language would have certainly
been so unmistakably restrictive and stringent as to leave
no doubt in anyones mind about their true intent. For
example, they would have used the sentence foreign
corporations are absolutely prohibited from involvement in
the management or operation of mining or similar ventures
or words of similar import. A search for such stringent
wording yields negative results. Thus, we come to the
inevitable conclusion that there was a conscious and
deliberate decision to avoid the use of restrictive wording
that bespeaks an intent not to use the expression
"agreements x x x involving either technical or financial
assistance" in an exclusionary and limiting manner.
Fifth Substantive Issue: Service Contracts Not
Deconstitutionalized
Lastly, petitioners stress that the service contract regime
under the 1973 Constitution is expressly prohibited under
the 1987 Constitution as the term service contracts found
in the former was deleted in the latter to avoid the
circumvention of constitutional prohibitions that were
prevalent in the 1987 Constitution. According to them, the
framers of the 1987 Constitution only intended for foreign-
owned corporations to provide either technical assistance
or financial assistance. Upon perusal of the CAMC FTAA,
petitioners are of the opinion that the same is a replica of
the service contract agreements that the present
constitution allegedly prohibit.
Again, this contention is not well-taken. The mere fact that
the term service contracts found in the 1973 Constitution
Law on NatRes (73-83 13
was not carried over to the present constitution, sans any
categorical statement banning service contracts in mining
activities, does not mean that service contracts as
understood in the 1973 Constitution was eradicated in the
1987 Constitution.56 The 1987 Constitution allows the
continued use of service contracts with foreign
corporations as contractors who would invest in and
operate and manage extractive enterprises, subject to the
full control and supervision of the State; this time,
however, safety measures were put in place to prevent
abuses of the past regime.57 We ruled, thus:
To our mind, however, such intent cannot be definitively
and conclusively established from the mere failure to carry
the same expression or term over to the new Constitution,
absent a more specific, explicit and unequivocal statement
to that effect. What petitioners seek (a complete ban on
foreign participation in the management of mining
operations, as previously allowed by the earlier
Constitutions) is nothing short of bringing about a
momentous sea change in the economic and
developmental policies; and the fundamentally capitalist,
free-enterprise philosophy of our government. We cannot
imagine such a radical shift being undertaken by our
government, to the great prejudice of the mining sector in
particular and our economy in general, merely on the basis
of the omission of the terms service contract from or the
failure to carry them over to the new Constitution. There
has to be a much more definite and even unarguable basis
for such a drastic reversal of policies.
xxxx
The foregoing are mere fragments of the framers lengthy
discussions of the provision dealing with agreements x x x
involving either technical or financial assistance, which
ultimately became paragraph 4 of Section 2 of Article XII
of the Constitution. Beyond any doubt, the members of the
ConCom were actually debating about the martial-law-era
service contracts for which they were crafting appropriate
safeguards.
In the voting that led to the approval of Article XII by the
ConCom, the explanations given by Commissioners
Gascon, Garcia and Tadeo indicated that they had voted
to reject this provision on account of their objections to the
"constitutionalization" of the "service contract" concept.
Mr. Gascon said, "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." Mr. Garcia
explained, "Service contracts are given constitutional
legitimization in Sec. 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."
Likewise, Mr. Tadeo cited inter alia the fact that service

contracts continued to subsist, enabling foreign interests to
benefit from our natural resources. It was hardly likely that
these gentlemen would have objected so strenuously, had
the provision called for mere technical or financial
assistance and nothing more.
The deliberations of the ConCom and some
commissioners explanation of their votes leave no room
for doubt that the service contract concept precisely
underpinned the commissioners understanding of the
"agreements involving either technical or financial
assistance."
xxxx
From the foregoing, we are impelled to conclude that the
phrase agreements involving either technical or financial
assistance, referred to in paragraph 4, are in fact service
contracts. But unlike those of the 1973 variety, the new
ones are between foreign corporations acting as
contractors on the one hand; and on the other, the
government as principal or "owner" of the works. In the
new service contracts, the foreign contractors provide
capital, technology and technical know-how, and
managerial expertise in the creation and operation of
large-scale mining/extractive enterprises; and the
government, through its agencies (DENR, MGB), actively
exercises control and supervision over the entire
operation.
xxxx
It is therefore reasonable and unavoidable to make the
following conclusion, based on the above arguments. As
written by the framers and ratified and adopted by the
people, the Constitution allows the continued use of
service contracts with foreign corporations -- as
contractors who would invest in and operate and manage
extractive enterprises, subject to the full control and
supervision of the State -- sans the abuses of the past
regime. The purpose is clear: to develop and utilize our
mineral, petroleum and other resources on a large scale
for the immediate and tangible benefit of the Filipino
people.58
WHEREFORE, the instant petition for prohibition and
mandamus is hereby DISMISSED. Section 76 of Republic
Act No. 7942 and Section 107 of DAO 96-40; Republic Act
No. 7942 and its Implementing Rules and Regulations
contained in DAO 96-40 insofar as they relate to
financial and technical assistance agreements referred to
in paragraph 4 of Section 2 of Article XII of the Constitution
are NOT UNCONSTITUTIONAL. SO ORDERED.
SOUTHEAST MINDANAO GOLD MINING
CORPORATION, petitioner, vs. BALITE PORTAL
MINING COOPERATIVE and others similarly situated;
and THE HONORABLE ANTONIO CERILLES, in his
capacity as Secretary of the Department of
Law on NatRes (73-83 14
Environment and Natural Resources (DENR),
PROVINCIAL MINING REGULATORY BOARD OF
DAVAO (PMRB-Davao), respondents.; G.R. No. 135190
April 3, 2002
This is a petition for review of the March 19, 1998 decision
of the Court of Appeals in CA-G.R. SP No. 44693,
dismissing the special civil action for certiorari, prohibition
and mandamus, and the resolution dated August 19, 1998
denying petitioner's motion for reconsideration.
The instant case involves a rich tract of mineral land
situated in the Agusan-Davao-Surigao Forest Reserve
known as the "Diwalwal Gold Rush Area." Located at Mt.
Diwata in the municipalities of Monkayo and Cateel in
Davao Del Norte, the land has been embroiled in
controversy since the mid-80's due to the scramble over
gold deposits found within its bowels.
From 1985 to 1991, thousands of people flocked to
Diwalwal to stake their respective claims. Peace and order
deteriorated rapidly, with hundreds of people perishing in
mine accidents, man-made or otherwise, brought about by
unregulated mining activities. The multifarious problems
spawned by the gold rush assumed gargantuan
proportions, such that finding a "win-win" solution became
a veritable needle in a haystack.
On March 10, 1988, Marcopper Mining Corporation
(Marcopper) was granted Exploration Permit No. 133 (EP
No. 133) over 4,491 hectares of land, which included the
hotly-contested Diwalwal area.1 Marcopper's acquisition of
mining rights over Diwalwal under its EP No. 133 was
subsequently challenged before this Court in "Apex Mining
Co., Inc., et al. v. Hon. Cancio C. Garcia, et al.,"2 where
Marcopper's claim was sustained over that of another
mining firm, Apex Mining Corporation (Apex). The Court
found that Apex did not comply with the procedural
requisites for acquiring mining rights within forest reserves.
Not long thereafter, Congress enacted on June 27, 1991
Republic Act No. 7076, or the People's Small-Scale Mining
Act. The law established a People's Small-Scale Mining
Program to be implemented by the Secretary of the
DENR3 and created the Provincial Mining Regulatory
Board (PMRB) under the DENR Secretary's direct
supervision and control.4 The statute also authorized the
PMRB to declare and set aside small-scale mining areas
subject to review by the DENR Secretary5 and award
mining contracts to small-scale miners under certain
conditions.6
On December 21, 1991, DENR Secretary Fulgencio S.
Factoran issued Department Administrative Order (DAO)
No. 66, declaring 729 hectares of the Diwalwal area as
non-forest land open to small-scale mining.7 The issuance
was made pursuant to the powers vested in the DENR

Secretary by Proclamation No. 369, which established the
Agusan-Davao-Surigao Forest Reserve.
Subsequently, a petition for the cancellation of EP No. 133
and the admission of a Mineral Production Sharing
Arrangement (MPSA) proposal over Diwalwal was filed
before the DENR Regional Executive Director, docketed
as RED Mines Case No. 8-8-94 entitled, "Rosendo
Villaflor, et al. v. Marcopper Mining Corporation."
On February 16, 1994, while the RED Mines case was
pending, Marcopper assigned its EP No. 133 to petitioner
Southeast Mindanao Gold Mining Corporation (SEM),8
which in turn applied for an integrated MPSA over the land
covered by the permit.
In due time, the Mines and Geosciences Bureau Regional
Office No. XI in Davao City (MGB-XI) accepted and
registered the integrated MPSA application of petitioner.
After publication of the application, the following filed their
oppositions:
a) MAC Case No. 004(XI) - JB Management Mining
Corporation;
b) MAC Case No. 005(XI) - Davao United Miners
Cooperative;
c) MAC Case No. 006(XI) - Balite Integrated Small Scale
Miner's Cooperative;
d) MAC Case No. 007(XI) - Monkayo Integrated Small
Scale Miner's Association, Inc.;
e) MAC Case No. 008(XI) - Paper Industries Corporation
of the Philippines;
f) MAC Case No. 009(XI) - Rosendo Villaflor, et al.;
g) MAC Case No. 010(XI) - Antonio Dacudao;
h) MAC Case No. 011(XI) - Atty. Jose T. Amacio;
i) MAC Case No. 012(XI) - Puting-Bato Gold Miners
Cooperative;
j) MAC Case No. 016(XI) - Balite Communal Portal Mining
Cooperative; and
k) MAC Case No. 97-01(XI) - Romeo Altamera, et al.
In the meantime, on March 3, 1995, Republic Act No.
7942, the Philippine Mining Act, was enacted. Pursuant to
this statute, the above-enumerated MAC cases were
referred to a Regional Panel of Arbitrators (RPA) tasked to
resolve disputes involving conflicting mining rights. The
RPA subsequently took cognizance of the RED Mines
case, which was consolidated with the MAC cases.
Law on NatRes (73-83 15
On April 1, 1997, Provincial Mining Regulatory Board of
Davao passed Resolution No. 26, Series of 1997,
authorizing the issuance of ore transport permits (OTPs) to
small-scale miners operating in the Diwalwal mines.
Thus, on May 30, 1997, petitioner filed a complaint for
damages before the Regional Trial Court of Makati City,
Branch 61, against the DENR Secretary and PMRB-
Davao. SEM alleged that the illegal issuance of the OTPs
allowed the extraction and hauling of P60,000.00 worth of
gold ore per truckload from SEM's mining claim.
Meanwhile, on June 13, 1997, the RPA resolved the
Consolidated Mines cases and decreed in an Omnibus
Resolution as follows:
VIEWED IN THE LIGHT OF THE FOREGOING, the
validity of Exploration Permit No. 133 is hereby reiterated
and all the adverse claims against MPSAA No. 128 are
DISMISSED.9
On June 24, 1997, the DENR Secretary issued
Memorandum Order No. 97-0310 which provided, among
others, that:
1. The DENR shall study thoroughly and exhaustively the
option of direct state utilization of the mineral resources in
the Diwalwal Gold-Rush Area. Such study shall include,
but shall not be limited to, studying and weighing the
feasibility of entering into management agreements or
operating agreements, or both, with the appropriate
government instrumentalities or private entities, or both, in
carrying out the declared policy of rationalizing the mining
operations in the Diwalwal Gold Rush Area; such
agreements shall include provisions for profit-sharing
between the state and the said parties, including profit-
sharing arrangements with small-scale miners, as well as
the payment of royalties to indigenous cultural
communities, among others. The Undersecretary for Field
Operations, as well as the Undersecretary for Legal and
Legislative Affairs and Attached Agencies, and the
Director of the Mines and Geo-sciences Bureau are
hereby ordered to undertake such studies. x x x11
On July 16, 1997, petitioner filed a special civil action for
certiorari, prohibition and mandamus before the Court of
Appeals against PMRB-Davao, the DENR Secretary and
Balite Communal Portal Mining Cooperative (BCPMC),
which represented all the OTP grantees. It prayed for the
nullification of the above-quoted Memorandum Order No.
97-03 on the ground that the "direct state utilization"
espoused therein would effectively impair its vested rights
under EP No. 133; that the DENR Secretary unduly
usurped and interfered with the jurisdiction of the RPA
which had dismissed all adverse claims against SEM in
the Consolidated Mines cases; and that the memorandum
order arbitrarily imposed the unwarranted condition that

certain studies be conducted before mining and
environmental laws are enforced by the DENR.
Meanwhile, on January 6, 1998, the MAB rendered a
decision in the Consolidated Mines cases, setting aside
the judgment of the RPA.12 This MAB decision was then
elevated to this Court by way of a consolidated petition,
docketed as G.R. Nos. 132475 and 132528.1wphi1.nt
On March 19, 1998, the Court of Appeals, through a
division of five members voting 3-2,13 dismissed the
petition in CA-G.R. SP No. 44693. It ruled that the DENR
Secretary did not abuse his discretion in issuing
Memorandum Order No. 97-03 since the same was merely
a directive to conduct studies on the various options
available to the government for solving the Diwalwal
conflict. The assailed memorandum did not conclusively
adopt "direct state utilization" as official government policy
on the matter, but was simply a manifestation of the
DENR's intent to consider it as one of its options, after
determining its feasibility through studies. MO 97-03 was
only the initial step in the ladder of administrative process
and did not, as yet, fix any obligation, legal relationship or
right. It was thus premature for petitioner to claim that its
"constitutionally-protected rights" under EP No. 133 have
been encroached upon, much less, violated by its
issuance.
Additionally, the appellate court pointed out that
petitioner's rights under EP No. 133 are not inviolable,
sacrosanct or immutable. Being in the nature of a privilege
granted by the State, the permit can be revoked, amended
or modified by the Chief Executive when the national
interest so requires. The Court of Appeals, however,
declined to rule on the validity of the OTPs, reasoning that
said issue was within the exclusive jurisdiction of the RPA.
Petitioner filed a motion for reconsideration of the above
decision, which was denied for lack of merit on August 19,
1998.14
Hence this petition, raising the following errors:
I. THE COURT OF APPEALS COMMITTED GRAVE AND
REVERSIBLE ERROR, AND HAS DECIDED A
QUESTION OF SUBSTANCE NOT THERETOFORE
DETERMINED BY THIS HONORABLE SUPREME
COURT, OR HAS DECIDED IT IN A WAY PROBABLY
NOT IN ACCORD WITH LAW OR WITH APPLICABLE
DECISIONS OF THIS HONORABLE COURT IN
UPHOLDING THE QUESTIONED ACTS OF
RESPONDENT DENR SECRETARY WHICH ARE IN
VIOLATION OF MINING LAWS AND IN DEROGATION
OF PETITIONER'S VESTED RIGHTS OVER THE AREA
COVERED BY ITS EP NO. 133;
II. THE COURT OF APPEALS COMMITTED GRAVE AND
REVERSIBLE ERROR IN HOLDING THAT AN ACTION
Law on NatRes (73-83 16
ON THE VALIDITY OF ORE TRANSPORT PERMIT
(OTP) IS VESTED IN THE REGIONAL PANEL OF
ARBITRATORS.15
In a resolution dated September 11, 2000, the appealed
Consolidated Mines cases, docketed as G.R. Nos. 132475
and 132528, were referred to the Court of Appeals for
proper disposition pursuant to Rule 43 of the 1997 Rules
of Civil Procedure.16 These cases, which were docketed
as CA-G.R. SP Nos. 61215 and 61216, are still pending
before the Court of Appeals.
In the first assigned error, petitioner insists that the Court
of Appeals erred when it concluded that the assailed
memorandum order did not adopt the "direct state
utilization scheme" in resolving the Diwalwal dispute. On
the contrary, petitioner submits, said memorandum order
dictated the said recourse and, in effect, granted
management or operating agreements as well as provided
for profit sharing arrangements to illegal small-scale
miners.
According to petitioner, MO 97-03 was issued to preempt
the resolution of the Consolidated Mines cases. The
"direct state utilization scheme" espoused in the
challenged memorandum is nothing but a legal shortcut,
designed to divest petitioner of its vested right to the gold
rush area under its EP No. 133.
We are not persuaded.
We agree with the Court of Appeals' ruling that the
challenged MO 97-03 did not conclusively adopt "direct
state utilization" as a policy in resolving the Diwalwal
dispute. The terms of the memorandum clearly indicate
that what was directed thereunder was merely a study of
this option and nothing else. Contrary to petitioner's
contention, it did not grant any management/operating or
profit-sharing agreement to small-scale miners or to any
party, for that matter, but simply instructed the DENR
officials concerned to undertake studies to determine its
feasibility. As the Court of Appeals extensively discussed
in its decision:
x x x under the Memorandum Order, the State still had to
study prudently and exhaustively the various options
available to it in rationalizing the explosive and ever
perilous situation in the area, the debilitating adverse
effects of mining in the community and at the same time,
preserve and enhance the safety of the mining operations
and ensure revenues due to the government from the
development of the mineral resources and the exploitation
thereof. The government was still in earnest search of
better options that would be fair and just to all parties
concerned, including, notably, the Petitioner. The direct
state utilization of the mineral resources in the area was
only one of the options of the State. Indeed, it is too plain
to see, x x x that before the State will settle on an option, x

x x an extensive and intensive study of all the facets of a
direct state exploitation was directed by the Public
Respondent DENR Secretary. And even if direct state
exploitation was opted by the government, the DENR still
had to promulgate rules and regulations to implement the
same x x x, in coordination with the other concerned
agencies of the government.17
Consequently, the petition was premature. The said
memorandum order did not impose any obligation on the
claimants or fix any legal relation whatsoever between and
among the parties to the dispute. At this stage, petitioner
can show no more than a mere apprehension that the
State, through the DENR, would directly take over the
mines after studies point to its viability. But until the DENR
actually does so and petitioner's fears turn into reality, no
valid objection can be entertained against MO 97-03 on
grounds which are purely speculative and anticipatory.18
With respect to the alleged "vested rights" claimed by
petitioner, it is well to note that the same is invariably
based on EP No. 133, whose validity is still being disputed
in the Consolidated Mines cases. A reading of the
appealed MAB decision reveals that the continued efficacy
of EP No. 133 is one of the issues raised in said cases,
with respondents therein asserting that Marcopper cannot
legally assign the permit which purportedly had expired. In
other words, whether or not petitioner actually has a
vested right over Diwalwal under EP No. 133 is still an
indefinite and unsettled matter. And until a positive
pronouncement is made by the appellate court in the
Consolidated Mines cases, EP No. 133 cannot be deemed
as a source of any conclusive rights that can be impaired
by the issuance of MO 97-03.
Similarly, there is no merit in petitioner's assertion that MO
97-03 sanctions violation of mining laws by allowing illegal
miners to enter into mining agreements with the State.
Again, whether or not respondent BCMC and the other
mining entities it represents are conducting illegal mining
activities is a factual matter that has yet to be finally
determined in the Consolidated Mines cases. We cannot
rightfully conclude at this point that respondent BCMC and
the other mining firms are illegitimate mining operators.
Otherwise, we would be preempting the resolution of the
cases which are still pending before the Court of
Appeals.19
Petitioner's reliance on the Apex Mining case to justify its
rights under E.P. No. 133 is misplaced. For one, the said
case was litigated solely between Marcopper and Apex
Mining Corporation and cannot thus be deemed binding
and conclusive on respondent BCMC and the other mining
entities presently involved. While petitioner may be
regarded as Marcopper's successor to EP No. 133 and
therefore bound by the judgment rendered in the Apex
Mining case, the same cannot be said of respondent
Law on NatRes (73-83 17
BCMC and the other oppositor mining firms, who were not
impleaded as parties therein.
Neither can the Apex Mining case foreclose any question
pertaining to the continuing validity of EP No. 133 on
grounds which arose after the judgment in said case was
promulgated. While it is true that the Apex Mining case
settled the issue of who between Apex and Marcopper
validly acquired mining rights over the disputed area by
availing of the proper procedural requisites mandated by
law, it certainly did not deal with the question raised by the
oppositors in the Consolidated Mines cases, i.e. whether
EP No. 133 had already expired and remained valid
subsequent to its transfer by Marcopper to petitioner.
Besides, as clarified in our decision in the Apex Mining
case:
x x x is conclusive only between the parties with respect to
the particular issue herein raised and under the set of
circumstances herein prevailing. In no case should the
decision be considered as a precedent to resolve or settle
claims of persons/entities not parties hereto. Neither is it
intended to unsettle rights of persons/entities which have
been acquired or which may have accrued upon reliance
on laws passed by appropriate agencies.20
Clearly then, the Apex Mining case did not invest petitioner
with any definite right to the Diwalwal mines which it could
now set up against respondent BCMC and the other
mining groups.
Incidentally, it must likewise be pointed out that under no
circumstances may petitioner's rights under EP No. 133 be
regarded as total and absolute. 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 country's
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,21 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.22
Additionally, there can be no valid opposition raised
against a mere study of an alternative which the State,
through the DENR, is authorized to undertake in the first
place. Worth noting is Article XII, Section 2, of the 1987
Constitution, which specifically 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 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.
(Underscoring ours)
Likewise, Section 4, Chapter II of the Philippine Mining Act
of 1995 states:
SEC. 4. Ownership of Mineral Resources. - Mineral
Resources are owned by the State and the exploration,
development, utilization, and processing thereof shall be
under its full control and supervision. The State may
directly undertake such activities or it may enter into
mineral agreements with contractors. (Underscoring ours)
Thus, the State may pursue the constitutional policy of full
control and supervision of the exploration, development
and utilization of the country's natural mineral resources,
by either directly undertaking the same or by entering into
agreements with qualified entities. The DENR Secretary
acted within his authority when he ordered a study of the
first option, which may be undertaken consistently in
accordance with the constitutional policy enunciated
above. Obviously, the State may not be precluded from
considering a direct takeover of the mines, if it is the only
plausible remedy in sight to the gnawing complexities
generated by the gold rush. As implied earlier, the State
need be guided only by the demands of public interest in
settling for this option, as well as its material and logistic
feasibility.
In this regard, petitioner's imputation of bad faith on the
part of the DENR Secretary when the latter issued MO 97-
03 is not well-taken. The avowed rationale of the
memorandum order is clearly and plainly stated in its
"whereas" clauses.23 In the absence of any concrete
evidence that the DENR Secretary violated the law or
abused his discretion, as in this case, he is presumed to
have regularly issued the memorandum with a lawful intent
and pursuant to his official functions.1wphi1.nt
Given these considerations, petitioner's first assigned error
is baseless and premised on tentative assumptions.
Petitioner cannot claim any absolute right to the Diwalwal
mines pending resolution of the Consolidated Mines
cases, much less ask us to assume, at this point, that
Law on NatRes (73-83 18
respondent BCMC and the other mining firms are illegal
miners. These factual issues are to be properly threshed
out in CA G.R. SP Nos. 61215 and 61216, which have yet
to be decided by the Court of Appeals. Any objection
raised against MO 97-03 is likewise premature at this
point, inasmuch as it merely ordered a study of an option
which the State is authorized by law to undertake.
We see no need to rule on the matter of the OTPs,
considering that the grounds invoked by petitioner for
invalidating the same are inextricably linked to the issues
raised in the Consolidated Mines cases.
WHEREFORE, in view of the foregoing, the instant petition
is DENIED. The decision of the Court of Appeals in CA-
G.R. SP No. 44693 is AFFIRMED. SO ORDERED.
STA. ROSA REALTY DEVELOPMENT CORPORATION,
petitioner, vs. COURT OF APPEALS, JUAN B.
AMANTE, FRANCISCO L. ANDAL, LUCIA ANDAL,
ANDREA P. AYENDE, LETICIA P. BALAT, FILOMENA
B. BATINO, ANICETO A. BURGOS, JAIME A. BURGOS,
FLORENCIA CANUBAS, LORETO A. CANUBAS,
MAXIMO A. CANUBAS, REYNALDO CARINGAL,
QUIRINO C. CASALME, BENIGNO A. CRUZAT, ELINO
A. CRUZAT, GREGORIO F. CRUZAT, RUFINO C.
CRUZAT, SERGIO CRUZAT, SEVERINO F. CRUZAT,
VICTORIA DE SAGUN, SEVERINO DE SAGUN,
FELICISIMO A. GONZALES, FRANCISCO A.
GONZALES, GREGORIO GONZALES, LEODEGARIO N.
GONZALES, PASCUAL P. GONZALES, ROLANDO A.
GONZALES, FRANCISCO A. JUANGCO, GERVACIO A.
JUANGCO, LOURDES U. LUNA, ANSELMO M.
MANDANAS, CRISANTO MANDANAS, EMILIO M.
MANDANAS, GREGORIO A. MANDANAS, MARIO G.
MANDANAS, TEODORO MANDANAS, CONSTANCIO
B. MARQUEZ, EUGENIO B. MARQUEZ, ARMANDO P.
MATIENZO, DANIEL D. MATIENZO, MAXIMINO
MATIENZO, PACENCIA P. MATIENZO, DOROTEA L.
PANGANIBAN, JUANITO T. PEREZ, MARIANITO T.
PEREZ, SEVERO M. PEREZ, INOCENCIA S.
PASQUIZA, BIENVENIDO F. PETATE, IGNACIO F.
PETATE, JUANITO PETATE, PABLO A. PLATON,
PRECILLO V. PLATON, AQUILINO B. SUBOL,
CASIANO T. VILLA, DOMINGO VILLA, JUAN T. VILLA,
MARIO C. VILLA, NATIVIDAD A. VILLA, JACINTA S.
ALVARADO, RODOLFO ANGELES, DOMINGO A.
CANUBAS, EDGARDO L. CASALME, QUIRINO DE
LEON, LEONILO M. ENRIQUEZ, CLAUDIA P.
GONZALES, FELISA R. LANGUE, QUINTILLANO
LANGUE, REYNALDO LANGUE, ROMEO S. LANGUE,
BONIFACIO VILLA, ROGELIO AYENDE, ANTONIO B.
FERNANDEZ, ZACARIAS HERRERA, ZACARIAS
HERRERA, REYNARIO U. LAZO, AGAPITO MATIENZO,
DIONISIO F. PETATE, LITO G. REYES, JOSE M.
SUBOL, CELESTINO G. TOPI NO, ROSA C. AMANTE,
SOTERA CASALME, REMIGIO M. SILVERIO, THE
SECRETARY OF AGRARIAN REFORM, DEPARTMENT
OF AGRARIAN REFORM ADJUDICATION BOARD,

LAND BANK OF THE PHILIPPINES, REGISTER OF
DEEDS OF LAGUNA, DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES
REGIONAL EXECUTIVE DIRECTOR FOR REGION IV,
and REGIONAL AGRARIAN REFORM OFFICER FOR
REGION IV, respondents; G.R. No. 112526
October 12, 2001
The case before the Court is a petition for review on
certiorari of the decision of the Court of Appeals1 affirming
the decision of the Department of Agrarian Reform
Adjudication Board2 (hereafter DARAB) ordering the
compulsory acquisition of petitioner's property under the
Comprehensive Agrarian Reform Program (CARP).
Petitioner Sta. Rosa Realty Development Corporation
(hereafter, SRRDC) was the registered owner of two
parcels of land, situated at Barangay Casile, Cabuyao,
Laguna covered by TCT Nos. 81949 and 84891, with a
total area of 254.6 hectares. According to petitioner, the
parcels of land are watersheds, which provide clean
potable water to the Canlubang community, and that
ninety (90) light industries are now located in the area.3
Petitioner alleged that respondents usurped its rights over
the property, thereby destroying the ecosystem. Sometime
in December 1985, respondents filed a civil case4 with the
Regional Trial Court, Laguna, seeking an easement of a
right of way to and from Barangay Casile. By way of
counterclaim, however, petitioner sought the ejectment of
private respondents.
In October 1986 to August 1987, petitioner filed with the
Municipal Trial Court, Cabuyao, Laguna separate
complaints for forcible entry against respondents.5
After the filing of the ejectment cases, respondents
petitioned the Department of Agrarian Reform (DAR) for
the compulsory acquisition of the SRRDC property under
the CARP.
On August 11, 1989, the Municipal Agrarian Reform
Officer (MARO) of Cabuyao, Laguna issued a notice of
coverage to petitioner and invited its officials or
representatives to a conference on August 18, 1989.6
During the meeting, the following were present:
representatives of petitioner, the Land Bank of the
Philippines, PARCCOM, PARO of Laguna, MARO of
Laguna, the BARC Chairman of Barangay Casile and
some potential farmer beneficiaries, who are residents of
Barangay Casile, Cabuyao, Laguna. It was the consensus
and recommendation of the assembly that the landholding
of SRRDC be placed under compulsory acquisition.
On August 17, 1989, petitioner filed with the Municipal
Agrarian Reform Office (MARO), Cabuyao, Laguna a
"Protest and Objection" to the compulsory acquisition of
the property on the ground that the area was not
Law on NatRes (73-83 19
appropriate for agricultural purposes. The area was
rugged in terrain with slopes of 18% and above and that
the occupants of the land were squatters, who were not
entitled to any land as beneficiaries.7
On August 29, 1989, the farmer beneficiaries together with
the BARC chairman answered the protest and objection
stating that the slope of the land is not 18% but only 5-
10% and that the land is suitable and economically viable
for agricultural purposes, as evidenced by the Certification
of the Department of Agriculture, municipality of Cabuyao,
Laguna.
On September 8, 1989, MARO Belen dela Torre made a
summary investigation report and forwarded the
Compulsory Acquisition Folder Indorsement (CAFI) to the
Provincial Agrarian Reform Officer (hereafter, PARO).9
On September 21, 1989, PARO Durante Ubeda forwarded
his endorsement of the compulsory acquisition to the
Secretary of Agrarian Reform.
On November 23, 1989, Acting Director Eduardo C.
Visperas of the Bureau of Land Acquisition and
Development, DAR forwarded two (2) Compulsory
Acquisition Claim Folders covering the landholding of
SRRDC, covered by TCT Nos. T-81949 and T-84891 to
the President, Land Bank of the Philippines for further
review and evaluation.10
On December 12, 1989, Secretary of Agrarian Reform
Miriam Defensor Santiago sent two (2) notices of
acquisition11 to petitioner, stating that petitioner's
landholdings covered by TCT Nos. 81949 and 84891,
containing an area of 188.2858 and 58.5800 hectares,
valued at P4,417,735.65 and P1,220,229.93, respectively,
had been placed under the Comprehensive Agrarian
Reform Program.
On February 6, 1990, petitioner SRRDC in two letters12
separately addressed to Secretary Florencio B. Abad and
the Director, Bureau of Land Acquisition and Distribution,
sent its formal protest, protesting not only the amount of
compensation offered by DAR for the property but also the
two (2) notices of acquisition.
On March 17, 1990, Secretary Abad referred the case to
the DARAB for summary proceedings to determine just
compensation under R. A. No. 6657, Section 16.
On March 23, 1990, the LBP returned the two (2) claim
folders previously referred for review and evaluation to the
Director of BLAD mentioning its inability to value the
SRRDC landholding due to some deficiencies.
On March 28, 1990, Executive Director Emmanuel S.
Galvez wrote Land Bank President Deogracias Vistan to
forward the two (2) claim folders involving the property of

SRRDC to the DARAB for it to conduct summary
proceedings to determine the just compensation for the
land.
On April 6, 1990, petitioner sent a letter to the Land Bank
of the Philippines stating that its property under the
aforesaid land titles were exempt from CARP coverage
because they had been classified as watershed area and
were the subject of a pending petition for land conversion.
On May 10, 1990, Director Narciso Villapando of BLAD
turned over the two (2) claim folders (CACF's) to the
Executive Director of the DAR Adjudication Board for
proper administrative valuation. Acting on the CACF's, on
September 10, 1990, the Board promulgated a resolution
asking the office of the Secretary of Agrarian Reform
(DAR) to first resolve two (2) issues before it proceeds
with the summary land valuation proceedings.13
The issues that need to be threshed out were as follows:
(1) whether the subject parcels of land fall within the
coverage of the Compulsory Acquisition Program of the
CARP; and (2) whether the petition for land conversion of
the parcels of land may be granted.
On December 7, 1990, the Office of the Secretary, DAR,
through the Undersecretary for Operations (Assistant
Secretary for Luzon Operations) and the Regional Director
of Region IV, submitted a report answering the two issues
raised. According to them, firstly, by virtue of the issuance
of the notice of coverage on August 11, 1989, and notice
of acquisition on December 12, 1989, the property is
covered under compulsory acquisition. Secondly,
Administrative Order No. 1, Series of 1990, Section IV D
also supports the DAR position on the coverage of the
said property. During the consideration of the case by the
Board, there was no pending petition for land conversion
specifically concerning the parcels of land in question.
On February 19, 1991, the Board sent a notice of hearing
to all the parties interested, setting the hearing for the
administrative valuation of the subject parcels of land on
March 6, 1991. However, on February 22, 1991, Atty. Ma.
Elena P. Hernandez-Cueva, counsel for SRRDC, wrote
the Board requesting for its assistance in the
reconstruction of the records of the case because the
records could not be found as her co-counsel, Atty.
Ricardo Blancaflor, who originally handled the case for
SRRDC and had possession of all the records of the case
was on indefinite leave and could not be contacted. The
Board granted counsel's request and moved the hearing to
April 4, 1991.
On March 18, 1991, SRRDC submitted a petition to the
Board for the latter to resolve SRRDC's petition for
exemption from CARP coverage before any administrative
valuation of their landholding could be had by the Board.
Law on NatRes (73-83 20
On April 4, 1991, the initial DARAB hearing of the case
was held and subsequently, different dates of hearing
were set without objection from counsel of SRRDC. During
the April 15, 1991 hearing, the subdivision plan of subject
property at Casile, Cabuyao, Laguna was submitted and
marked as Exhibit "5" for SRRDC. At the hearing on April
23, 1991, the Land Bank asked for a period of one month
to value the land in dispute.
At the hearing on April 23, 1991, certification from Deputy
Zoning Administrator Generoso B. Opina was presented.
The certification issued on September 8, 1989, stated that
the parcels of land subject of the case were classified as
"industrial Park" per Sanguniang Bayan Resolution No.
45-89 dated March 29, 1989.14
To avert any opportunity that the DARAB might distribute
the lands to the farmer beneficiaries, on April 30, 1991,
petitioner filed a petition15 with DARAB to disqualify
private respondents as beneficiaries. However, DARAB
refused to address the issue of beneficiaries.
In the meantime, on January 20, 1992, the Regional Trial
Court, Laguna, Branch 24, rendered a decision,16 finding
that private respondents illegally entered the SRRDC
property, and ordered them evicted.
On July 11, 1991, DAR Secretary Benjamin T. Leong
issued a memorandum directing the Land Bank of the
Philippines to open a trust account in favor of SRRDC, for
P5,637,965.55, as valuation for the SRRDC property.
On December 19, 1991, DARAB promulgated a decision,
the decretal portion of which reads:
"WHEREFORE, based on the foregoing premises, the
Board hereby orders:
"1. The dismissal for lack of merit of the protest against the
compulsory coverage of the landholdings of Sta. Rosa
Realty Development Corporation (Transfer Certificates of
Title Nos. 81949 and 84891 with an area of 254.766
hectares) in Barangay Casile, Municipality of Cabuyao,
Province of Laguna under the Comprehensive Agrarian
Reform Program is hereby affirmed;
"2. The Land Bank of the Philippines (LBP) to pay Sta.
Rosa Realty Development Corporation the amount of
Seven Million Eight Hundred Forty-One Thousand, Nine
Hundred Ninety Seven Pesos and Sixty-Four centavos
(P7,841,997.64) for its landholdings covered by the two (2)
Transfer Certificates of Title mentioned above. Should
there be a rejection of the payment tendered, to open, if
none has yet been made, a trust account for said amount
in the name of Sta. Rosa Realty Development
Corporation;

"3. The Register of Deeds of the Province of Laguna to
cancel with dispatch Transfer certificate of Title Nos.
84891 and 81949 and new one be issued in the name of
the Republic of the Philippines, free from liens and
encumbrances;
"4 The Department of Environment and Natural Resources
either through its Provincial Office in Laguna or the
Regional Office, Region IV, to conduct a final segregation
survey on the lands covered by Transfer certificate of Title
Nos. 84891 and 81949 so the same can be transferred by
the Register of Deeds to the name of the Republic of the
Philippines;
"5. The Regional Office of the Department of Agrarian
Reform through its Municipal and Provincial Agrarian
Reform Office to take immediate possession on the said
landholding after Title shall have been transferred to the
name of the Republic of the Philippines, and distribute the
same to the immediate issuance of Emancipation Patents
to the farmer-beneficiaries as determined by the Municipal
Agrarian Reform Office of Cabuyao, Laguna."17
On January 20, 1992, the Regional Trial Court, Laguna,
Branch 24, rendered a decision in Civil Case No. B-
233318 ruling that respondents were builders in bad faith.
On February 6, 1992, petitioner filed with the Court of
Appeals a petition for review of the DARAB decision.19 On
November 5, 1993, the Court of Appeals promulgated a
decision affirming the decision of DARAB. The decretal
portion of the Court of Appeals decision reads:
"WHEREFORE, premises considered, the DARAB
decision dated September 19, 1991 is AFFIRMED, without
prejudice to petitioner Sta. Rosa Realty Development
Corporation ventilating its case with the Special Agrarian
Court on the issue of just compensation."20Hence, this
petition.21
On December 15, 1993, the Court issued a Resolution
which reads:
"G. R. Nos. 112526 (Sta. Rosa Realty Development
Corporation vs. Court of Appeals, et. al.) Considering the
compliance, dated December 13, 1993, filed by counsel
for petitioner, with the resolution of December 8, 1993
which required petitioner to post a cash bond or surety
bond in the amount of P1,500,000.00 Pesos before issuing
a temporary restraining order prayed for, manifesting that
it has posted a CASH BOND in the same amount with the
Cashier of the Court as evidenced by the attached official
receipt no. 315519, the Court resolved to ISSUE the
Temporary Retraining Order prayed for.
"The Court therefore, resolved to restrain: (a) the
Department of Agrarian Reform Adjudication Board from
enforcing its decision dated December 19, 1991 in DARAB
Law on NatRes (73-83 21
Case No. JC-R-IV-LAG-0001, which was affirmed by the
Court of Appeals in a Decision dated November 5, 1993,
and which ordered, among others, the Regional Office of
the Department of Agrarian Reform through its Municipal
and Provincial Reform Office to take immediate
possession of the landholding in dispute after title shall
have been transferred to the name of the Republic of the
Philippines and to distribute the same through the
immediate issuance of Emancipation Patents to the
farmer-beneficiaries as determined by the Municipal
Agrarian Officer of Cabuyao, Laguna, (b) The Department
of Agrarian Reform and/or the Department of Agrarian
Reform Adjudication Board, and all persons acting for and
in their behalf and under their authority from entering the
properties involved in this case and from introducing
permanent infrastructures thereon; and (c) the private
respondents from further clearing the said properties of
their green cover by the cutting or burning of trees and
other vegetation, effective today until further orders from
this Court."22
The main issue raised is whether the property in question
is covered by CARP despite the fact that the entire
property formed part of a watershed area prior to the
enactment of R. A. No. 6657.
Under Republic Act No. 6657, there are two modes of
acquisition of private land: compulsory and voluntary. In
the case at bar, the Department of Agrarian Reform
sought the compulsory acquisition of subject property
under R. A. No. 6657, Section 16, to wit:
"Sec. 16. Procedure for Acquisition of Private Lands. For
purposes of acquisition of private lands, the following
procedures shall be followed:
a.) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the
land to the owners thereof, by personal delivery or
registered mail, and post the same in a conspicuous place
in the municipal building and barangay hall of the place
where the property is located. Said notice shall contain the
offer of the DAR to pay corresponding value in accordance
with the valuation set forth in Sections 17, 18, and other
pertinent provisions hereof.
b.) Within thirty (30) days from the date of the receipt of
written notice by personal delivery or registered mail, the
landowner, his administrator or representative shall inform
the DAR of his acceptance or rejection of the offer.
c.) If the landowner accepts the offer of the DAR, the LBP
shall pay the landowner the purchase price of the land
within thirty (30) days after he executes and delivers a
deed of transfer in favor of the government and other
muniments of title.

d.) In case of rejection or failure to reply, the DAR shall
conduct summary administrative proceedings to determine
the compensation for the land requiring the landowner, the
LBP and other interested parties to submit fifteen (15)
days from 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.
e.) 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
make immediate possession of the land and shall request
the proper Register of Deeds to issue Transfer Certificate
of Titles (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.
f.) Any party who disagrees with the decision may bring
the matter to the court23 of proper jurisdiction for final
determination of just compensation.
In compulsory acquisition of private lands, the landholding,
the landowners and farmer beneficiaries must first be
identified. After identification, the DAR shall send a notice
of acquisition to the landowner, by personal delivery or
registered mail, and post it in a conspicuous place in the
municipal building and barangay hall of the place where
the property is located.
Within thirty (30) days from receipt of the notice of
acquisition, the landowner, his administrator or
representative shall inform the DAR of his acceptance or
rejection of the offer.
If the landowner accepts, he executes and delivers a deed
of transfer in favor of the government and surrenders the
certificate of title. Within thirty (30) days from the execution
of the deed of transfer, the Land Bank of the Philippines
(LBP) pays the owner the purchase price. If the landowner
accepts, he executes and delivers a deed of transfer in
favor of the government and surrenders the certificate of
title. Within thirty days from the execution of the deed of
transfer, the Land Bank of the Philippines (LBP) pays the
owner the purchase price. If the landowner rejects the
DAR's offer or fails to make a reply, the DAR conducts
summary administrative proceedings to determine just
compensation for the land. The landowner, the LBP
representative and other interested parties may submit
evidence on just compensation within fifteen days from
notice. Within thirty days from submission, the DAR shall
decide the case and inform the owner of its decision and
the amount of just compensation.
Upon receipt by the owner of the corresponding payment,
or, in case of rejection or lack of response from the latter,
Law on NatRes (73-83 22
the DAR shall deposit the compensation in cash or in LBP
bonds with an accessible bank. The DAR shall
immediately take possession of the land and cause the
issuance of a transfer certificate of title in the name of the
Republic of the Philippines. The land shall then be
redistributed to the farmer beneficiaries. Any party may
question the decision of the DAR in the special agrarian
courts (provisionally the Supreme Court designated
branches of the regional trial court as special agrarian
courts) for final determination of just compensation.
The DAR has made compulsory acquisition the priority
mode of land acquisition to hasten the implementation of
the Comprehensive Agrarian Reform Program (CARP).
Under Sec. 16 of the CARL, the first step in compulsory
acquisition is the identification of the land, the landowners
and the farmer beneficiaries. However, the law is silent on
how the identification process shall be made. To fill this
gap, on July 26, 1989, the DAR issued Administrative
Order No. 12, series of 1989, which set the operating
procedure in the identification of such lands. The
procedure is as follows:
A. The Municipal Agrarian Reform Officer (MARO), with
the assistance of the pertinent Barangay Agrarian Reform
Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered
under the CARP in his area of responsibility; the masterlist
should include such information as required under the
attached CARP masterlist form which shall include the
name of the landowner, landholding area, TCT/OCT
number, and tax declaration number.
2. Prepare the Compulsory Acquisition Case Folder
(CACF) for each title (OCT/TCT) or landholding covered
under Phase I and II of the CARP except those for which
the landowners have already filed applications to avail of
other modes of land acquisition. A case folder shall
contain the following duly accomplished forms:
a) CARP CA Form 1MARO investigation report
b) CARP CA Form No 2 Summary investigation report
findings and evaluation
c) CARP CA Form 3Applicant's Information sheet
d) CARP CA Form 4 Beneficiaries undertaking
e) CARP CA Form 5 Transmittal report to the PARO
The MARO/BARC shall certify that all information
contained in the above-mentioned forms have been
examined and verified by him and that the same are true
and correct.

3. Send notice of coverage and a letter of invitation to a
conference/meeting to the landowner covered by the
Compulsory Case Acquisition Folder. Invitations to the
said conference meeting shall also be sent to the
prospective farmer-beneficiaries, the BARC
representatives, the Land Bank of the Philippines (LBP)
representative, and the other interested parties to discuss
the inputs to the valuation of the property.
He shall discuss the MARO/BARC investigation report and
solicit the views, objection, agreements or suggestions of
the participants thereon. The landowner shall also ask to
indicate his retention area. The minutes of the meeting
shall be signed by all participants in the conference and
shall form an integral part of the CACF.
4. Submit all completed case folders to the Provincial
Agrarian Reform Officer (PARO).
B. The PARO shall:
1. Ensure the individual case folders are forwarded to him
by his MAROs.
2. Immediately upon receipt of a case folder, compute the
valuation of the land in accordance with A.O. No. 6, series
of 1988. The valuation worksheet and the related CACF
valuation forms shall be duly certified correct by the PARO
and all the personnel who participated in the
accomplishment of these forms.
3. In all cases, the PARO may validate the report of the
MARO through ocular inspection and verification of the
property. This ocular inspection and verification shall be
mandatory when the computed value exceeds P500,000
per estate.
4. Upon determination of the valuation, forward the case
folder, together with the duly accomplished valuation forms
and his recommendations, to the Central Office.
The LBP representative and the MARO concerned shall
be furnished a copy each of his report.
C. DAR Central Office, specifically through the Bureau of
Land Acquisition and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from
the PARO, review, evaluate and determine the final land
valuation of the property covered by the case folder. A
summary review and evaluation report shall be prepared
and duly certified by the BLAD Director and the personnel
directly participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly
authorized representative, a notice of acquisition (CARP
Form 8) for the subject property. Serve the notice to the
landowner personally or through registered mail within
Law on NatRes (73-83 23
three days from its approval. The notice shall include
among others, the area subject of compulsory acquisition,
and the amount of just compensation offered by DAR.
3. Should the landowner accept the DAR's offered value,
the BLAD shall prepare and submit to the Secretary for
approval the order of acquisition. However, in case of
rejection or non-reply, the DAR Adjudication Board
(DARAB) shall conduct a summary administrative hearing
to determine just compensation, in accordance with the
procedures provided under Administrative Order No. 13,
series of 1989. Immediately upon receipt of the DARAB's
decision on just compensation, the BLAD shall prepare
and submit to the Secretary for approval the required order
of acquisition.
4. Upon the landowner's receipt of payment, in case of
acceptance, or upon deposit of payment in the designated
bank, in case of rejection or non-response, the Secretary
shall immediately direct the pertinent Register of Deeds to
issue the corresponding Transfer Certificate of Title (TCT)
in the name of the Republic of the Philippines. Once the
property is transferred, the DAR, through the PARO, shall
take possession of the land for redistribution to qualified
beneficiaries."
Administrative Order No. 12, Series of 1989 requires that
the Municipal Agrarian Reform Officer (MARO) keep an
updated master list of all agricultural lands under the
CARP in his area of responsibility containing all the
required information. The MARO prepares a Compulsory
Acquisition Case Folder (CACF) for each title covered by
CARP. The MARO then sends the landowner a "Notice of
Coverage" and a "letter of invitation" to a "conference/
meeting" over the land covered by the CACF. He also
sends invitations to the prospective farmer-beneficiaries,
the representatives of the Barangay Agrarian Reform
Committee (BARC), the Land Bank of the Philippines
(LBP) and other interested parties to discuss the inputs to
the valuation of the property and solicit views,
suggestions, objections or agreements of the parties. At
the meeting, the landowner is asked to indicate his
retention area.
The MARO shall make a report of the case to the
Provincial Agrarian Reform Officer (PARO) who shall
complete the valuation of the land. Ocular inspection and
verification of the property by the PARO shall be
mandatory when the computed value of the estate
exceeds P500,000.00. Upon determination of the
valuation, the PARO shall forward all papers together with
his recommendation to the Central Office of the DAR. The
DAR Central Office, specifically, the Bureau of Land
Acquisition and Distribution (BLAD) shall prepare, on the
signature of the Secretary or his duly authorized
representative, a notice of acquisition of the subject
property. From this point, the provisions of R. A. No. 6657,
Section 16 shall apply.

For a valid implementation of the CARP Program, two
notices are required: (1) the notice of coverage and letter
of invitation to a preliminary conference sent to the
landowner, the representative of the BARC, LBP, farmer
beneficiaries and other interested parties pursuant to DAR
A. O. No. 12, series of 1989; and (2) the notice of
acquisition sent to the landowner under Section 16 of the
CARL.
The importance of the first notice, that is, the notice of
coverage and the letter of invitation to a conference, and
its actual conduct cannot be understated. They are steps
designed to comply with the requirements of administrative
due process. The implementation of the CARL is an
exercise of the State's police power and the power of
eminent domain. To the extent that the CARL prescribes
retention limits to the landowners, there is an exercise of
police power for the regulation of private property in
accordance with the Constitution. But where, to carry out
such regulation, the owners are deprived of lands they
own in excess of the maximum area allowed, there is also
a taking under the power of eminent domain. The taking
contemplated is not mere limitation of the use of the land.
What is required is the surrender of the title to and
physical possession of the excess and all beneficial rights
accruing to the owner in favor of the farmer beneficiary.
In the case at bar, DAR has executed the taking of the
property in question. However, payment of just
compensation was not in accordance with the procedural
requirement. The law required payment in cash or LBP
bonds, not by trust account as was done by DAR.
In Association of Small Landowners in the Philippines v.
Secretary of Agrarian Reform, we held that "The CARP
Law, for its part, conditions the transfer of possession and
ownership of the land to the government on receipt of 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. No outright change of ownership is
contemplated either."24
Consequently, petitioner questioned before the Court of
Appeals DARAB's decision ordering the compulsory
acquisition of petitioner's property.25 Here, petitioner
pressed the question of whether the property was a
watershed, not covered by CARP.
Article 67 of the Water Code of the Philippines (P. D. No.
1067) provides:
"Art. 67. Any watershed or any area of land adjacent to
any surface water or overlying any ground water may be
declared by the Department of Natural resources as a
protected area. Rules and Regulations may be
promulgated by such Department to prohibit or control
Law on NatRes (73-83 24
such activities by the owners or occupants thereof within
the protected area which may damage or cause the
deterioration of the surface water or ground water or
interfere with the investigation, use, control, protection,
management or administration of such waters."
Watersheds may be defined as "an area drained by a river
and its tributaries and enclosed by a boundary or divide
which separates it from adjacent watersheds." Watersheds
generally are outside the commerce of man, so why was
the Casile property titled in the name of SRRDC? The
answer is simple. At the time of the titling, the Department
of Agriculture and Natural Resources had not declared the
property as watershed area. The parcels of land in
Barangay Casile were declared as "PARK" by a Zoning
Ordinance adopted by the municipality of Cabuyao in
1979, as certified by the Housing and Land Use
Regulatory Board. On January 5, 1994, the Sangguniang
Bayan of Cabuyao, Laguna issued a Resolution26 voiding
the zoning classification of the land at Barangay Casile as
Park and declaring that the land is now classified as
agricultural land.
The authority of the municipality of Cabuyao, Laguna to
issue zoning classification is an exercise of its police
power, not the power of eminent domain. "A zoning
ordinance is defined as a local city or municipal legislation
which logically arranges, prescribes, defines and
apportions a given political subdivision into specific land
uses as present and future projection of needs."27
In Natalia Realty, Inc. v. Department of Agrarian Reform28
we held that lands classified as non-agricultural prior to the
effectivity of the CARL may not be compulsorily acquired
for distribution to farmer beneficiaries.
However, more than the classification of the subject land
as PARK is the fact that subsequent studies and survey
showed that the parcels of land in question form a vital
part of a watershed area.29
Now, petitioner has offered to prove that the land in
dispute is a "watershed or part of the protected area for
watershed purposes." Ecological balances and
environmental disasters in our day and age seem to be
interconnected. Property developers and tillers of the land
must be aware of this deadly combination. In the case at
bar, DAR included the disputed parcels of land for
compulsory acquisition simply because the land was
allegedly devoted to agriculture and was titled to SRRDC,
hence, private and alienable land that may be subject to
CARP.
However, the scenario has changed, after an in-depth
study, survey and reassessment. We cannot ignore the
fact that the disputed parcels of land form a vital part of an
area that need to be protected for watershed purposes. In
a report of the Ecosystems Research and Development

Bureau (ERDB), a research arm of the DENR, regarding
the environmental assessment of the Casile and Kabanga-
an river watersheds, they concluded that:
"The Casile barangay covered by CLOA in question is
situated in the heartland of both watersheds. Considering
the barangays proximity to the Matangtubig waterworks,
the activities of the farmers which are in conflict with
proper soil and water conservation practices jeopardize
and endanger the vital waterworks. Degradation of the
land would have double edge detrimental effects. On the
Casile side this would mean direct siltation of the
Mangumit river which drains to the water impounding
reservoir below. On the Kabanga-an side, this would mean
destruction of forest covers which acts as recharged areas
of the Matang Tubig springs. Considering that the people
have little if no direct interest in the protection of the
Matang Tubig structures they couldn't care less even if it
would be destroyed.
The Casile and Kabanga-an watersheds can be
considered a most vital life support system to thousands of
inhabitants directly and indirectly affected by it. From these
watersheds come the natural God-given precious resource
water. x x x x x
Clearing and tilling of the lands are totally inconsistent with
sound watershed management. More so, the introduction
of earth disturbing activities like road building and erection
of permanent infrastructures. Unless the pernicious
agricultural activities of the Casile farmers are immediately
stopped, it would not be long before these watersheds
would cease to be of value. The impact of watershed
degredation threatens the livelihood of thousands of
people dependent upon it. Toward this, we hope that an
acceptable comprehensive watershed development policy
and program be immediately formulated and implemented
before the irreversible damage finally happens.
Hence, the following are recommended:
7.2 The Casile farmers should be relocated and given
financial assistance.
7.3 Declaration of the two watersheds as critical and in
need of immediate rehabilitation.
7.4 A comprehensive and detailed watershed
management plan and program be formulated and
implemented by the Canlubang Estate in coordination with
pertinent government agencies."30
The ERDB report was prepared by a composite team
headed by Dr. Emilio Rosario, the ERDB Director, who
holds a doctorate degree in water resources from U.P. Los
Banos in 1987; Dr. Medel Limsuan, who obtained his
doctorate degree in watershed management from
Colorado University (US) in 1989; and Dr. Antonio M.
Law on NatRes (73-83 25
Dano, who obtained his doctorate degree in Soil and
Water management Conservation from U.P. Los Banos in
1993.
Also, DENR Secretary Angel Alcala submitted a
Memorandum for the President dated September 7, 1993
(Subject: PFVR HWI Ref.: 933103 Presidential Instructions
on the Protection of Watersheds of the Canlubang Estates
at Barrio Casile, Cabuyao, Laguna) which reads:
"It is the opinion of this office that the area in question
must be maintained for watershed purposes for ecological
and environmental considerations, among others.
Although the 88 families who are the proposed CARP
beneficiaries will be affected, it is important that a larger
view of the situation be taken as one should also consider
the adverse effect on thousands of residents downstream
if the watershed will not be protected and maintained for
watershed purposes.
"The foregoing considered, it is recommended that if
possible, an alternate area be allocated for the affected
farmers, and that the Canlubang Estates be mandated to
protect and maintain the area in question as a permanent
watershed reserved."31
The definition does not exactly depict the complexities of a
watershed. The most important product of a watershed is
water which is one of the most important human necessity.
The protection of watersheds ensures an adequate supply
of water for future generations and the control of
flashfloods that not only damage property but cause loss
of lives. Protection of watersheds is an "intergenerational
responsibility" that needs to be answered now.
Another factor that needs to be mentioned is the fact that
during the DARAB hearing, petitioner presented proof that
the Casile property has slopes of 18% and over, which
exempted the land from the coverage of CARL. R. A. No.
6657, Section 10, provides:
"Section 10. Exemptions and Exclusions. Lands actually,
directly and exclusively used and found to be necessary
for parks, wildlife, forest reserves, reforestration, fish
sanctuaries and breeding grounds, watersheds and
mangroves, national defense, school sites and campuses
including experimental farm stations operated by public or
private schools for educational purposes, seeds and
seedlings research and pilot production centers, church
sites and convents appurtenent thereto, communal burial
grounds and cemeteries, penal colonies and penal farms
actually worked by the inmates, government and private
research and quarantine centers, and all lands with
eighteen percent (18%) slope and over, except those
already developed shall be exempt from coverage of this
Act."

Hence, during the hearing at DARAB, there was proof
showing that the disputed parcels of land may be excluded
from the compulsory acquisition coverage of CARP
because of its very high slopes.
To resolve the issue as to the true nature of the parcels of
land involved in the case at bar, the Court directs the
DARAB to conduct a re-evaluation of the issue.
IN VIEW WHEREOF, the Court SETS ASIDE the decision
of the Court of Appeals in CA-G. R. SP No. 27234.
In lieu thereof, the Court REMANDS the case to the
DARAB for re-evaluation and determination of the nature
of the parcels of land involved to resolve the issue of its
coverage by the Comprehensive Land Reform Program.
In the meantime, the effects of the CLOAs issued by the
DAR to supposed farmer beneficiaries shall continue to be
stayed by the temporary restraining order issued on
December 15, 1993, which shall remain in effect until final
decision on the case. No costs. SO ORDERED.
NATIONAL WATER RESOURCES BOARD (NWRB),
Petitioner, vs. A. L. ANG NETWORK, INC.,
Respondent.; G.R. No. 186450 April 14, 2010
In issue is whether Regional Trial Courts have jurisdiction
over appeals from decisions, resolutions or orders of the
National Water Resources Board (petitioner).
A.L. Ang Network (respondent) filed on January 23, 2003
an application for a Certificate of Public Convenience
(CPC) with petitioner to operate and maintain a water
service system in Alijis, Bacolod City.
Bacolod City Water District (BACIWA) opposed
respondents application on the ground that it is the only
government agency authorized to operate a water service
system within the city.1
By Decision of August 20, 2003, petitioner granted
respondents CPC application. BACIWA moved to have
the decision reconsidered, contending that its right to due
process was violated when it was not allowed to present
evidence in support of its opposition.2
Petitioner reconsidered its Decision and allowed BACIWA
to present evidence,3 drawing respondent to file a petition
for certiorari with the Regional Trial Court (RTC) of
Bacolod City against petitioner and BACIWA. Petitioner
moved to dismiss the petition, arguing that the proper
recourse of respondent was to the Court of Appeals, citing
Rule 43 of the Rules of Court.
The RTC, by Order of April 15, 2005,4 dismissed
respondents petition for lack of jurisdiction, holding that it
is the Court of Appeals which has "exclusive appellate
Law on NatRes (73-83 26
jurisdiction over all final judgments, decisions, resolutions,
order[s] or awards of . . . quasi-judicial agencies,
instrumentalities, boards or commission[s] . . . except
those within the appellate jurisdiction of the Supreme
Court . . . ." Thus the RTC explained:
Art. 89 of P.D. 1067 having been long repealed by BP 129,
as amended, which has effectively and explicitly removed
the Regional Trial Courts appellate jurisdiction over the
decisions, resolutions, order[s] or awards of quasi-judicial
agencies such as [petitioner] NWRB, and vested with the
Court of Appeals, very clearly now, this Court has no
jurisdiction over this instant petition.
Its motion for reconsideration having been denied,
respondent filed a petition for certiorari at the Court of
Appeals, which, by Decision of January 25, 2008,5
annulled and set aside the RTC April 15, 2005, holding
that it is the RTC which has jurisdiction over appeals from
petitioners decisions. Thus the appellate court discoursed.
In the analogous case of BF Northwest Homeowners
Association, Inc. vs. Intermediate Appellate Court[,] the
Supreme Court . . . categorically pronounced the RTCs
jurisdiction over appeals from the decisions of the NWRB
consistent with Article 89 of P.D. No. 1067 and
ratiocinated in this wise:
x x x x.
The logical conclusion, therefore, is that jurisdiction over
actions for annulment of NWRC decisions lies with the
Regional Trial Courts, particularly, when we take note of
the fact that the appellate jurisdiction of the Regional Trial
Court over NWRC decisions covers such broad and all
embracing grounds as grave abuse of discretion,
questions of law, and questions of fact and law (Art. 89,
P.D. No. 1067). This conclusion is also in keeping with the
Judiciary Reorganization Act of 1980, which vests
Regional Trial Courts with original jurisdiction to issue writs
of certiorari, prohibition, mandamus, etc. (Sec. 21 [1], B.P.
Blg. 129) relating to acts or omissions of an inferior court
(Sec. 4, Rule 65, Rules of Court).
x x x x.
Similarly, in Tanjay Water District vs. Pedro Gabaton, the
Supreme Court conformably ruled, viz:
"Inasmuch as Civil Case No. 8144 involves the
appropriation, utilization and control of water, We hold that
the jurisdiction to hear and decide the dispute in the first
instance, pertains to the Water Resources Council as
provided in PD No. 1067 which is the special law on the
subject. The Court of First Instance (now Regional Trial
Court) has only appellate jurisdiction over the case."

Based on the foregoing jurisprudence, there is no doubt
that [petitioner] NWRB is mistaken in its assertion. As no
repeal is expressly made, Article 89 of P.D. No. 1067 is
certainly meant to be an exception to the jurisdiction of the
Court of Appeals over appeals or petitions for certiorari of
the decisions of quasi-judicial bodies. This finds harmony
with Paragraph 2, Section 4, Rule 65 of the Rules of Court
wherein it is stated that, "If it involves the acts of a quasi-
judicial agency, unless otherwise provided by law or these
rules, the petition shall be filed in and cognizable only by
the Court of Appeals." Evidently, not all petitions for
certiorari under Rule 65 involving the decisions of quasi-
judicial agencies must be filed with the Court of Appeals.
The rule admits of some exceptions as plainly provided by
the phrase "unless otherwise provided by law or these
rules" and Article 89 of P.D. No. 1067 is verily an example
of these exceptions. (italics and emphasis partly in the
original; underscoring supplied)
Petitioners motion for reconsideration having been denied
by the appellate court by Resolution of February 9, 2009,6
petitioner filed the present petition for review, contending
that:
THE REGIONAL TRIAL COURT HAS NO CERTIORARI
JURISDICTION OVER THE [PETITIONER] SINCE
SECTION 89, PD NO. 1067, REGARDING APPEALS,
HAS BEEN SUPERSEDED AND REPEALED BY [BATAS
PAMBANSA BILANG] 129 AND THE RULES OF COURT.
FURTHERMORE, PD 1067 ITSELF DOES NOT
CONTEMPLATE THAT THE REGIONAL TRIAL COURT
SHOULD HAVE CERTIORARI JURISDICTION OVER
THE [PETITIONER].7 (underscoring supplied)
Petitioner maintains that the RTC does not have
jurisdiction over a petition for certiorari and prohibition to
annul or modify its acts or omissions as a quasi-judicial
agency. Citing Section 4 of Rule 65 of the Rules of Court,
petitioner contends that there is no law or rule which
requires the filing of a petition for certiorari over its acts or
omissions in any other court or tribunal other than the
Court of Appeals.8
Petitioner goes on to fault the appellate court in holding
that Batas Pambansa Bilang 129 (BP 129) or the Judiciary
Reorganization Act did not expressly repeal Article 89 of
Presidential Decree No. 1067 (PD 1067) otherwise known
as the Water Code of the Philippines.9
Respondent, on the other hand, maintains the correctness
of the assailed decision of the appellate court.
The petition is impressed with merit.
Section 9 (1) of BP 129 granted the Court of Appeals (then
known as the Intermediate Appellate Court) original
jurisdiction to issue writs of mandamus, prohibition,
certiorari, habeas corpus and quo warranto, and auxiliary
Law on NatRes (73-83 27
writs or processes, whether or not in aid of its appellate
jurisdiction.10
Since the appellate court has exclusive appellate
jurisdiction over quasi-judicial agencies under Rule 4311
of the Rules of Court, petitions for writs of certiorari,
prohibition or mandamus against the acts and omissions
of quasi-judicial agencies, like petitioner, should be filed
with it. This is what Rule 65 of the Rules imposes for
procedural uniformity. The only exception to this
instruction is when the law or the Rules itself directs
otherwise, as cited in Section 4, Rule 65.12 The appellate
courts construction that Article 89 of PD 1067, which
reads:
ART. 89. The decisions of the [NWRB] on water rights
controversies may be appealed to the [RTC] of the
province where the subject matter of the controversy is
situated within fifteen (15) days from the date the party
appealing receives a copy of the decision, on any of the
following grounds: (1) grave abuse of discretion; (2)
question of law; and (3) questions of fact and law
(emphasis and underscoring supplied), is such an
exception, is erroneous.
Article 89 of PD 1067 had long been rendered inoperative
by the passage of BP 129. Aside from delineating the
jurisdictions of the Court of Appeals and the RTCs,
Section 47 of BP 129 repealed or modified:
x x x. [t]he provisions of Republic Act No. 296, otherwise
known as the Judiciary Act of 1948, as amended, of
Republic Act No. 5179, as amended, of the Rules of Court,
and of all other statutes, letters of instructions and general
orders or parts thereof, inconsistent with the provisions of
this Act x x x. (emphasis and underscoring supplied)
The general repealing clause under Section 47 "predicates
the intended repeal under the condition that a substantial
conflict must be found in existing and prior acts."13
In enacting BP 129, the Batasang Pambansa was
presumed to have knowledge of the provision of Article 89
of P.D. No. 1067 and to have intended to change it.14 The
legislative intent to repeal Article 89 is clear and manifest
given the scope and purpose of BP 129, one of which is to
provide a homogeneous procedure for the review of
adjudications of quasi-judicial entities to the Court of
Appeals.
More importantly, what Article 89 of PD 1067 conferred to
the RTC was the power of review on appeal the decisions
of petitioner. It appears that the appellate court gave
significant consideration to the ground of "grave abuse of
discretion" to thus hold that the RTC has certiorari
jurisdiction over petitioners decisions. A reading of said
Article 89 shows, however, that it only made "grave abuse
of discretion" as another ground to invoke in an ordinary

appeal to the RTC. Indeed, the provision was unique to
the Water Code at the time of its application in 1976.
The issuance of BP 129, specifically Section 9
(Jurisdiction of the Court of Appeals, then known as
Intermediate Appellate Court), and the subsequent
formulation of the Rules, clarified and delineated the
appellate and certiorari jurisdictions of the Court of
Appeals over adjudications of quasi-judicial bodies. Grave
abuse of discretion may be invoked before the appellate
court as a ground for an error of jurisdiction.
It bears noting that, in the present case, respondent
assailed petitioners order via certiorari before the RTC,
invoking grave abuse of discretion amounting to lack or
excess of jurisdiction as ground-basis thereof. In other
words, it invoked such ground not for an error of judgment.
While Section 9 (3) of BP 12915 and Section 1 of Rule 43
of the Rules of Court16 does not list petitioner as "among"
the quasi-judicial agencies whose final judgments, orders,
resolutions or awards are appealable to the appellate
court, it is non sequitur to hold that the Court of Appeals
has no appellate jurisdiction over petitioners judgments,
orders, resolutions or awards. It is settled that the list of
quasi-judicial agencies specifically mentioned in Rule 43 is
not meant to be exclusive.17 The employment of the word
"among" clearly instructs so.1avvphi1
BF Northwest Homeowners Association v. Intermediate
Appellate Court,18 a 1987 case cited by the appellate
court to support its ruling that RTCs have jurisdiction over
judgments, orders, resolutions or awards of petitioner, is
no longer controlling in light of the definitive instruction of
Rule 43 of the Revised Rules of Court.
Tanjay Water District v. Gabaton19 is not in point either as
the issue raised therein was which between the RTC and
the then National Water Resources Council had
jurisdiction over disputes in the appropriation, utilization
and control of water.
In fine, certiorari and appellate jurisdiction over
adjudications of petitioner properly belongs to the Court of
Appeals.
WHEREFORE, the challenged Decision and Resolution of
the Court of Appeals are REVERSED and SET ASIDE.
The April 15, 2005 Order of the Regional Trial Court of
Bacolod City dismissing petitioners petition for lack of
jurisdiction is UPHELD. SO ORDERED.
METROPOLITAN MANILA DEVELOPMENT
AUTHORITY, DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, DEPARTMENT OF
EDUCATION, CULTURE AND SPORTS,1
DEPARTMENT OF HEALTH, DEPARTMENT OF
AGRICULTURE, DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS, DEPARTMENT OF BUDGET AND
Law on NatRes (73-83 28
MANAGEMENT, PHILIPPINE COAST GUARD,
PHILIPPINE NATIONAL POLICE MARITIME GROUP,
and DEPARTMENT OF THE INTERIOR AND LOCAL
GOVERNMENT, Petitioners, vs. 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 JAIME AGUSTIN R. OPOSA,
Respondents; G.R. Nos. 171947-48 February
15, 2011
On December 18, 2008, this Court rendered a Decision in
G.R. Nos. 171947-48 ordering petitioners to clean up,
rehabilitate and preserve Manila Bay in their different
capacities. The fallo reads:
WHEREFORE, the petition is DENIED. The September
28, 2005 Decision of the CA in CA-G.R. CV No. 76528
and SP No. 74944 and the September 13, 2002 Decision
of the RTC in Civil Case No. 1851-99 are AFFIRMED but
with MODIFICATIONS in view of subsequent
developments or supervening events in the case. The fallo
of the RTC Decision shall now read:
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:
(1) Pursuant to Sec. 4 of EO 192, assigning the DENR as
the primary agency responsible for the conservation,
management, development, and proper use of the
countrys environment and natural resources, and Sec. 19
of RA 9275, designating the DENR as the primary
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, restoration, and conservation of the
Manila Bay at the earliest possible time. It is ordered to
call 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 completion schedules.
(2) Pursuant to Title XII (Local Government) of the
Administrative Code of 1987 and Sec. 25 of the Local
Government Code of 1991, the DILG, in exercising the
Presidents power of 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 Metro Manila,
Rizal, Laguna, Cavite, Bulacan, Pampanga, and Bataan to
inspect all factories, commercial establishments, and
private homes along the banks of the major river systems
in their respective areas of jurisdiction, such as but not
limited to the Pasig-Marikina-San Juan Rivers, the NCR
(Paraaque-Zapote, Las Pias) Rivers, the Navotas-
Malabon-Tullahan-Tenejeros Rivers, the Meycauayan-
Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan)
River, the Imus (Cavite) River, the Laguna De Bay, and
other minor rivers and waterways that eventually
discharge water into the Manila Bay; and the lands
abutting the bay, to determine whether they have
wastewater treatment facilities or hygienic septic tanks as
prescribed by 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 tanks within a reasonable time to
prevent industrial wastes, sewage water, and human
wastes from flowing into these rivers, waterways, esteros,
and the Manila Bay, under pain of closure or imposition of
fines and other sanctions.
(3) As mandated by Sec. 8 of RA 9275, the MWSS is
directed to provide, install, operate, and maintain the
necessary adequate waste water treatment facilities in
Metro Manila, Rizal, and Cavite where needed at the
earliest possible time.
(4) Pursuant to RA 9275, the LWUA, through the local
water districts and in coordination with the DENR, is
ordered to provide, install, operate, and maintain
sewerage and sanitation facilities and the efficient and
safe collection, treatment, and disposal of sewage in the
provinces of Laguna, Cavite, Bulacan, Pampanga, and
Bataan where needed at the earliest possible time.
(5) Pursuant to Sec. 65 of RA 8550, the DA, through the
BFAR, is ordered to improve and restore the marine life of
the Manila Bay. It is also directed to assist the LGUs in
Metro Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga,
and Bataan in developing, using recognized methods, the
fisheries and aquatic resources in the Manila Bay.
(6) The PCG, pursuant to Secs. 4 and 6 of PD 979, and
the PNP Maritime Group, in accordance with Sec. 124 of
RA 8550, in coordination with each other, shall apprehend
violators of PD 979, RA 8550, and other existing laws and
regulations designed to prevent marine pollution in the
Manila Bay.
(7) Pursuant to Secs. 2 and 6-c of EO 513 and the
International Convention for the Prevention of Pollution
from Ships, the PPA is ordered to immediately adopt such
measures to prevent the discharge and dumping of solid
and liquid wastes and other ship-generated wastes into
Law on NatRes (73-83 29
the Manila Bay waters from vessels docked at ports and
apprehend the violators.
(8) The MMDA, as the lead agency and implementor of
programs and projects for flood control projects and
drainage services in Metro Manila, in coordination with the
DPWH, DILG, affected LGUs, PNP Maritime Group,
Housing and Urban Development Coordinating 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 along the Pasig-Marikina-San
Juan Rivers, the NCR (Paraaque-Zapote, Las Pias)
Rivers, the Navotas-Malabon-Tullahan-Tenejeros Rivers,
and connecting waterways and esteros in Metro 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 Laguna, in coordination with the DILG, affected LGUs,
PNP Maritime Group, HUDCC, and other concerned
government agencies, shall remove and demolish all
structures, constructions, and other encroachments built in
breach of RA 7279 and other applicable laws along the
Meycauayan-Marilao-Obando (Bulacan) Rivers, the
Talisay (Bataan) River, the Imus (Cavite) River, the
Laguna De Bay, and other rivers, connecting waterways,
and esteros that discharge wastewater into the Manila
Bay.
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 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 apprehension and filing of the
appropriate criminal cases against violators of the
respective penal provisions of RA 9003, 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, Sec. 118 of RA
8550, and Sec. 56 of RA 9003, 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.
(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 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.
SO ORDERED.
The government agencies did not file any motion for
reconsideration and the Decision became final in January
2009.
The case is now in the execution phase of the final and
executory December 18, 2008 Decision. The Manila Bay
Advisory Committee was created to receive and evaluate
the quarterly progressive reports on the activities
undertaken by the agencies in accordance with said
decision and to monitor the execution phase.
In the absence of specific completion periods, the
Committee recommended that time frames be set for the
agencies to perform their assigned tasks. This may be
viewed as an encroachment over the powers and
functions of the Executive Branch headed by the President
of the Philippines.
This view is misplaced.
The issuance of subsequent resolutions by the Court is
simply an exercise of judicial power under Art. VIII of the
Constitution, because the execution of the Decision is but
an integral part of the adjudicative function of the Court.
None of the agencies ever questioned the power of the
Court to implement the December 18, 2008 Decision nor
has any of them raised the alleged encroachment by the
Court over executive functions.
While additional activities are required of the agencies like
submission of plans of action, data or status reports, these
directives are but part and parcel of the execution stage of
a final decision under Rule 39 of the Rules of Court.
Section 47 of Rule 39 reads:
Law on NatRes (73-83 30
Section 47. Effect of judgments or final orders.The
effect of a judgment or final order rendered by a court of
the Philippines, having jurisdiction to pronounce the
judgment or final order, may be as follows:
xxxx
(c) In any other litigation between the same parties of their
successors in interest, that only is deemed to have been
adjudged in a former judgment or final order which
appears upon its face to have been so adjudged, or which
was actually and necessarily included therein or necessary
thereto. (Emphasis supplied.)
It is clear that the final judgment includes not only what
appears upon its face to have been so adjudged but also
those matters "actually and necessarily included therein or
necessary thereto." Certainly, any activity that is needed to
fully implement a final judgment is necessarily
encompassed by said judgment.
Moreover, the submission of periodic reports is sanctioned
by Secs. 7 and 8, Rule 8 of the Rules of Procedure for
Environmental cases:
Sec. 7. Judgment.If warranted, the court shall grant the
privilege of the writ of continuing mandamus requiring
respondent to perform an act or series of acts until the
judgment is fully satisfied and to grant such other reliefs as
may be warranted resulting from the wrongful or illegal
acts of the respondent. The court shall require the
respondent to submit periodic reports detailing the
progress and execution of the judgment, and the court
may, by itself or through a commissioner or the
appropriate government agency, evaluate and monitor
compliance. The petitioner may submit its comments or
observations on the execution of the judgment.
Sec. 8. Return of the writ.The periodic reports submitted
by the respondent detailing compliance with the judgment
shall be contained in partial returns of the writ. Upon full
satisfaction of the judgment, a final return of the writ shall
be made to the court by the respondent. If the court finds
that the judgment has been fully implemented, the
satisfaction of judgment shall be entered in the court
docket. (Emphasis supplied.)
With the final and executory judgment in MMDA, the writ of
continuing mandamus issued in MMDA means that until
petitioner-agencies have shown full compliance with the
Courts orders, the Court exercises continuing jurisdiction
over them until full execution of the judgment.
There being no encroachment over executive functions to
speak of, We shall now proceed to the recommendation of
the Manila Bay Advisory Committee.

Several problems were encountered by the Manila Bay
Advisory Committee.2 An evaluation of the quarterly
progressive reports has shown that (1) there are
voluminous quarterly progressive reports that are being
submitted; (2) petitioner-agencies do not have a uniform
manner of reporting their cleanup, rehabilitation and
preservation activities; (3) as yet no definite deadlines
have been set by petitioner DENR as to petitioner-
agencies timeframe for their respective duties; (4) as of
June 2010 there has been a change in leadership in both
the national and local levels; and (5) some agencies have
encountered difficulties in complying with the Courts
directives.
In order to implement the afore-quoted Decision, certain
directives have to be issued by the Court to address the
said concerns.
Acting on the recommendation of the Manila Bay Advisory
Committee, the Court hereby resolves to ORDER the
following:
(1) The Department of Environment and Natural
Resources (DENR), as lead agency in the Philippine
Clean Water Act of 2004, shall submit to the Court on or
before June 30, 2011 the updated Operational Plan for the
Manila Bay Coastal Strategy.
The DENR is ordered to submit summarized data on the
overall quality of Manila Bay waters for all four quarters of
2010 on or before June 30, 2011.
The DENR is further ordered to submit the names and
addresses of persons and companies in Metro Manila,
Rizal, Laguna, Cavite, Bulacan, Pampanga and Bataan
that generate toxic and hazardous waste on or before
September 30, 2011.
(2) On or before June 30, 2011, the Department of the
Interior and Local Government (DILG) shall order the
Mayors of all cities in Metro Manila; the Governors of
Rizal, Laguna, Cavite, Bulacan, Pampanga and Bataan;
and the Mayors of all the cities and towns in said
provinces to inspect all factories, commercial
establishments and private homes along the banks of the
major river systemssuch as but not limited to the Pasig-
Marikina-San Juan Rivers, the National Capital Region
(Paranaque-Zapote, Las Pinas) Rivers, the Navotas-
Malabon-Tullahan-Tenejeros Rivers, the Meycauayan-
Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan)
River, the Imus (Cavite) River, and the Laguna De Bay
and other minor rivers and waterways within their
jurisdiction that eventually discharge water into the Manila
Bay and the lands abutting it, to determine if they have
wastewater treatment facilities and/or hygienic septic
tanks, as prescribed by existing laws, ordinances, rules
and regulations. Said local government unit (LGU) officials
Law on NatRes (73-83 31
are given up to September 30, 2011 to finish the
inspection of said establishments and houses.
In case of non-compliance, the LGU officials shall take
appropriate action to ensure compliance by non-complying
factories, commercial establishments and private homes
with said law, rules and regulations requiring the
construction or installment of wastewater treatment
facilities or hygienic septic tanks.
The aforementioned governors and mayors shall submit to
the DILG on or before December 31, 2011 their respective
compliance reports which will contain the names and
addresses or offices of the owners of all the non-
complying factories, commercial establishments and
private homes, copy furnished the concerned
environmental agency, be it the local DENR office or the
Laguna Lake Development Authority.
The DILG is required to submit a five-year plan of action
that will contain measures intended to ensure compliance
of all non-complying factories, commercial establishments,
and private homes.
On or before June 30, 2011, the DILG and the mayors of
all cities in Metro Manila shall consider providing land for
the wastewater facilities of the Metropolitan Waterworks
and Sewerage System (MWSS) or its concessionaires
(Maynilad and Manila Water, Inc.) within their respective
jurisdictions.
(3) The MWSS shall submit to the Court on or before June
30, 2011 the list of areas in Metro Manila, Rizal and Cavite
that do not have the necessary wastewater treatment
facilities. Within the same period, the concessionaires of
the MWSS shall submit their plans and projects for the
construction of wastewater treatment facilities in all the
aforesaid areas and the completion period for said
facilities, which shall not go beyond 2037.
On or before June 30, 2011, the MWSS is further required
to have its two concessionaires submit a report on the
amount collected as sewerage fees in their respective
areas of operation as of December 31, 2010.
(4) The Local Water Utilities Administration is ordered to
submit on or before September 30, 2011 its plan to
provide, install, operate and maintain sewerage and
sanitation facilities in said cities and towns and the
completion period for said works, which shall be fully
implemented by December 31, 2020.
(5) The Department of Agriculture (DA), through the
Bureau of Fisheries and Aquatic Resources, shall submit
to the Court on or before June 30, 2011 a report on areas
in Manila Bay where marine life has to be restored or
improved and the assistance it has extended to the LGUs
in Metro Manila, Rizal, Cavite, Laguna, Bulacan,

Pampanga and Bataan in developing the fisheries and
aquatic resources in Manila Bay. The report shall contain
monitoring data on the marine life in said areas. Within the
same period, it shall submit its five-year plan to restore
and improve the marine life in Manila Bay, its future
activities to assist the aforementioned LGUs for that
purpose, and the completion period for said undertakings.
The DA shall submit to the Court on or before September
30, 2011 the baseline data as of September 30, 2010 on
the pollution loading into the Manila Bay system from
agricultural and livestock sources.
(6) The Philippine Ports Authority (PPA) shall incorporate
in its quarterly reports the list of violators it has
apprehended and the status of their cases. The PPA is
further ordered to include in its report the names, make
and capacity of the ships that dock in PPA ports. The PPA
shall submit to the Court on or before June 30, 2011 the
measures it intends to undertake to implement its
compliance with paragraph 7 of the dispositive portion of
the MMDA Decision and the completion dates of such
measures.
The PPA should include in its report the activities of its
concessionaire that collects and disposes of the solid and
liquid wastes and other ship-generated wastes, which shall
state the names, make and capacity of the ships serviced
by it since August 2003 up to the present date, the dates
the ships docked at PPA ports, the number of days the
ship was at sea with the corresponding number of
passengers and crew per trip, the volume of solid, liquid
and other wastes collected from said ships, the treatment
undertaken and the disposal site for said wastes.
(7) The Philippine National Police (PNP) Maritime Group
shall submit on or before June 30, 2011 its five-year plan
of action on the measures and activities it intends to
undertake to apprehend the violators of Republic Act No.
(RA) 8550 or the Philippine Fisheries Code of 1998 and
other pertinent laws, ordinances and regulations to prevent
marine pollution in Manila Bay and to ensure the
successful prosecution of violators.
The Philippine Coast Guard shall likewise submit on or
before June 30, 2011 its five-year plan of action on the
measures and activities they intend to undertake to
apprehend the violators of Presidential Decree No. 979 or
the Marine Pollution Decree of 1976 and RA 9993 or the
Philippine Coast Guard Law of 2009 and other pertinent
laws and regulations to prevent marine pollution in Manila
Bay and to ensure the successful prosecution of violators.
(8) The Metropolitan Manila Development Authority
(MMDA) shall submit to the Court on or before June 30,
2011 the names and addresses of the informal settlers in
Metro Manila who, as of December 31, 2010, own and
occupy houses, structures, constructions and other
Law on NatRes (73-83 32
encroachments established or built along the Pasig-
Marikina-San Juan Rivers, the NCR (Paraaque-Zapote,
Las Pias) Rivers, the Navotas-Malabon-Tullahan-
Tenejeros Rivers, and connecting waterways and esteros,
in violation of RA 7279 and other applicable laws. On or
before June 30, 2011, the MMDA shall submit its plan for
the removal of said informal settlers and the demolition of
the aforesaid houses, structures, constructions and
encroachments, as well as the completion dates for said
activities, which shall be fully implemented not later than
December 31, 2015.
The MMDA is ordered to submit a status report, within
thirty (30) days from receipt of this Resolution, on the
establishment of a sanitary landfill facility for Metro Manila
in compliance with the standards under RA 9003 or the
Ecological Solid Waste Management Act.
On or before June 30, 2011, the MMDA shall submit a
report of the location of open and controlled dumps in
Metro Manila whose operations are illegal after February
21, 2006,3 pursuant to Secs. 36 and 37 of RA 9003, and
its plan for the closure of these open and controlled dumps
to be accomplished not later than December 31, 2012.
Also, on or before June 30, 2011, the DENR Secretary, as
Chairperson of the National Solid Waste Management
Commission (NSWMC), shall submit a report on the
location of all open and controlled dumps in Rizal, Cavite,
Laguna, Bulacan, Pampanga and Bataan.
On or before June 30, 2011, the DENR Secretary, in his
capacity as NSWMC Chairperson, shall submit a report on
whether or not the following landfills strictly comply with
Secs. 41 and 42 of RA 9003 on the establishment and
operation of sanitary landfills, to wit:
National Capital Region
1. Navotas SLF (PhilEco), Brgy. Tanza (New Site),
Navotas City
2. Payatas Controlled Dumpsite, Barangay Payatas,
Quezon City
Region III
3. Sitio Coral, Brgy. Matictic, Norzagaray, Bulacan
4. Sitio Tiakad, Brgy. San Mateo, Norzagaray, Bulacan
5. Brgy. Minuyan, San Jose del Monte City, Bulacan
6. Brgy. Mapalad, Santa Rosa, Nueva Ecija
7. Sub-zone Kalangitan, Clark Capas, Tarlac Special
Economic Zone
Region IV-A
8. Kalayaan (Longos), Laguna
9. Brgy. Sto. Nino, San Pablo City, Laguna
10. Brgy. San Antonio (Pilotage SLF), San Pedro, Laguna
11. Morong, Rizal
12. Sitio Lukutan, Brgy. San Isidro, Rodriguez
(Montalban), Rizal (ISWIMS)
13. Brgy. Pintong Bukawe, San Mateo, Rizal (SMSLFDC)
On or before June 30, 2011, the MMDA and the seventeen
(17) LGUs in Metro Manila are ordered to jointly submit a

report on the average amount of garbage collected
monthly per district in all the cities in Metro Manila from
January 2009 up to December 31, 2010 vis--vis the
average amount of garbage disposed monthly in landfills
and dumpsites. In its quarterly report for the last quarter of
2010 and thereafter, MMDA shall report on the
apprehensions for violations of the penal provisions of RA
9003, RA 9275 and other laws on pollution for the said
period.
On or before June 30, 2011, the DPWH and the LGUs in
Rizal, Laguna, Cavite, Bulacan, Pampanga, and Bataan
shall submit the names and addresses of the informal
settlers in their respective areas who, as of September 30,
2010, own or occupy houses, structures, constructions,
and other encroachments built along the Meycauayan-
Marilao-Obando (Bulacan) Rivers, the Talisay (Bataan)
River, the Imus (Cavite) River, the Laguna de Bay, and
other rivers, connecting waterways and esteros that
discharge wastewater into the Manila Bay, in breach of RA
7279 and other applicable laws. On or before June 30,
2011, the DPWH and the aforesaid LGUs shall jointly
submit their plan for the removal of said informal settlers
and the demolition of the aforesaid structures,
constructions and encroachments, as well as the
completion dates for such activities which shall be
implemented not later than December 31, 2012.
(9) The Department of Health (DOH) shall submit to the
Court on or before June 30, 2011 the names and
addresses of the owners of septic and sludge companies
including those that do not have the proper facilities for the
treatment and disposal of fecal sludge and sewage coming
from septic tanks.
The DOH shall implement rules and regulations on
Environmental Sanitation Clearances and shall require
companies to procure a license to operate from the DOH.
The DOH and DENR-Environmental Management Bureau
shall develop a toxic and hazardous waste management
system by June 30, 2011 which will implement segregation
of hospital/toxic/hazardous wastes and prevent mixing with
municipal solid waste.
On or before June 30, 2011, the DOH shall submit a plan
of action to ensure that the said companies have proper
disposal facilities and the completion dates of
compliance.1avvphi1
(10) The Department of Education (DepEd) shall submit to
the Court on or before May 31, 2011 a report on the
specific subjects on pollution prevention, waste
management, environmental protection, environmental
laws and the like that it has integrated into the school
curricula in all levels for the school year 2011-2012.
Law on NatRes (73-83 33
On or before June 30, 2011, the DepEd shall also submit
its plan of action to ensure compliance of all the schools
under its supervision with respect to the integration of the
aforementioned subjects in the school curricula which shall
be fully implemented by June 30, 2012.
(11) All the agencies are required to submit their quarterly
reports electronically using the forms below. The agencies
may add other key performance indicators that they have
identified. SO ORDERED.
METROPOLITAN MANILA DEVELOPMENT
AUTHORITY, petitioner, vs. JANCOM
ENVIRONMENTAL CORPORATION and JANCOM
INTERNATIONAL DEVELOPMENT PROJECTS PTY.
LIMITED OF AUSTRALIA, respondents; G.R. No.
147465 January 30, 2002
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 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.
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 pre-qualification 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).
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.
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.
Law on NatRes (73-83 34
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.
Law on NatRes (73-83 35
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 by certiorari. 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
Law on NatRes (73-83 36
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
Law on NatRes (73-83 37
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.
(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
Law on NatRes (73-83 38
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:
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
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.
Law on NatRes (73-83 39
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 the Philippines 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
Law on NatRes (73-83 40
circumstance cannot, by itself, abrogate the entire
agreement.1wphi1
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, 2001 AFFIRMED. No costs.SO ORDERED.
DONALD MEAD, petitioner, vs. HON. MANUEL A.
ARGEL in his capacity as Presiding Judge in the Court
of First Instance of Rizal, Branch XXXV and the
PEOPLE OF THE PHILIPPINES, respondents.; G.R. No.
L-41958 July 20, 1982
The issue posed for determination in this case is whether
or not a Provincial Fiscal has the authority to file an
information for a violation of Republic Act No. 3931,
entitled "An Act Creating a National Water and Air
Pollution Control Commission."
On March 11, 1975, petitioner Donald Mead and a certain
Isaac Arivas were charged by the Provincial Fiscal of Rizal
with a violation of Section 9, in relation to Section 10 of
Republic Act No. 3931, under an information reading as
follows:
That on or about the 23rd day of August, 1972, and for
some time prior and subsequent thereto, in the
municipality of Malabon, province of Rizal, Philippines and
within the jurisdiction of this Honorable Court, the above-
named accused, being then the president and the general
manager, respectively, of the Insular Oil Refinery Co.
(INSOIL) a corporation duly organized in accordance with
existing laws, conspiring and confederating together and
mutually helping and aiding one another, did then and
there willfully, unlawfully and feloniously drain or otherwise
dispose into the highway canal and/or cause, permit,
suffer to be drained or allow to seep into such waterway
the industrial and other waste matters discharged due to
the operation of the said Insular Oil Refinery Co. so
managed and operated by them, thereby causing pollution
of such waterway with the resulting damage and/or
destruction to the living plants in the vicinity and providing
hazard to health and property in the same vicinity.
The case was docketed as Criminal Case No. C-5984-75
and it was subsequently assigned to Branch XXXV of the
Court of First Instance of Rizal (Caloocan City) presided
over by the respondent Judge.

On August 11, 1975, petitioner Donald Mead, one of the
accused in the criminal case, filed a motion to quash on
the grounds that the trial court has no jurisdiction and that
the Provincial Fiscal of Rizal has no legal personality to file
the above-quoted information. The motion to quash was
denied by the respondent Judge in an Order dated
September 5, 1975. A Motion For Reconsideration filed by
the petitioner was also denied by the respondent Judge in
his Order of November 10, 1965. Hence, this petition for
certiorari with preliminary injunction to annul the said
orders of the respondent Judge who allegedly acted in
excess of or without jurisdiction in issuing the same.
In Our Resolution dated November 28, 1975, the
respondents were required to comment on the petition and
a temporary restraining order was issued to enjoin the
respondent Judge from enforcing his questioned orders
until otherwise directed by this Court.
It is the principal contention of the petitioner that the
National Water and Air Pollution Control Commission
(hereinafter referred to as the "Commission") as created
under Republic Act No. 3931 has the exclusive authority to
determine the existence of "pollution" before a criminal
case can be filed for a violation of the said law; and that it
has the exclusive authority to prosecute violations of the
same. Petitioner further avers that the Commission not
having finally ruled that the petitioner has violated
Republic Act No. 3931, the Provincial Fiscal of Rizal lacks
the authority to prosecute the petitioner for a violation of
said law.
The respondents, on the other hand, maintain that while
Republic Act No. 3931 grants the power and duty to the
Commission to investigate and prosecute violations of
Republic Act No. 3931, such grant of power and authority
is not exclusive, and does not deprive fiscals and other
public prosecutors of their authority to investigate and
prosecute violations of the said law committed within their
respective jurisdictions.
Before discussing the main issue on its merits, We deem it
necessary to resolve a procedural question raised by the
respondents in support of their prayer that the instant
petition should not be entertained. Respondents advert to
the rule that when a motion to quash filed by an accused
in a criminal case shall be denied, the remedy of the
accused- movant is not to file a petition for certiorari or
mandamus or prohibition, the proper recourse being to go
to trial, without prejudice to his right to reiterate the
grounds invoked in his motion to quash if an adverse
judgment is rendered against him, in the appeal that he
may take therefrom in the manner authorized by law. (Mill
vs. People, et al., 101 Phil. 599; Echarol us. Purisima, et
al, 13 SCRA 309.)
Law on NatRes (73-83 41
There is no disputing the validity and wisdom of the rule
invoked by the respondents. However, it is also
recognized that, under certain situations, recourse to the
extraordinary legal remedies of certiorari, prohibition or
mandamus to question the denial of a motion to quash is
considered proper in the interest of "more enlightened and
substantial justice", as was so declared in "Yap vs.
Lutero", G.R. No. L-12669, April 30, 1969, 105 Phil. 3007:
However, were we to require adherence to this pretense,
the case at bar would have to be dismissed and petitioner
required to go through the inconvenience, not to say the
mental agony and torture, of submitting himself to trial on
the merits in Case No. 16443, apart from the expenses
incidental thereto, despite the fact that his trial and
conviction therein would violate one of this constitutional
rights, and that, an appeal to this Court, we would,
therefore, have to set aside the judgment of conviction of
the lower court. This would, obviously, be most unfair and
unjust. Under the circumstances obtaining in the present
case, the flaw in the procedure followed by petitioner
herein may be overlooked, in the interest of a more
enlightened and substantial justice.
To the same effect is the pronouncement in "Pineda and
Ampil Manufacturing Co., vs. Bartolome, et al.," 95 Phil.,
930938, expressed as follows:
While a denial of a motion to dismiss for lack of jurisdiction
was held not to be a proper basis for a petition for
certiorari [Nico vs. Blanco, 46 Off. Gaz., Supp. (1) 88; 81
Phil., 2131, or an appeal not certiorari is the proper
remedy for correcting an error which a lower court may
commit in denying a motion to set aside a judgment, or in
setting aside an order of dismissal, [Rios vs. Ros et al., 45
Off. Gaz. (No. 3), 1265; 79 Phil. 243; Santos vs. Pecson,
45 Off. Gaz. (No. 3), 1278; 79 Phil.754] however, in some
instances, the Supreme Court has departed from the
general rule and has entertained the writ notwithstanding
the existence of an appeal. Thus, in one case the
Supreme Court took cognizance of a petition for certiorari
notwithstanding the fact that the accused could have
appealed in due time when it found that the action was
necessary to promote public welfare and public policy
(People vs. Zulueta, 89 Phil. 880). In another case, a
petition for certiorari to annul an order of the trial judge
admitting an amended information was entertained
although the accused had an adequate remedy by appeal
"inasmuch as the Surplus Property cases have attracted
nationwide attention, making it essential to proceed with
dispatch in the consideration thereof. (People vs, Zulueta,
supra. Citing Arevalo vs. Nepomuceno, 63 Phil., 627.) And
still in another case, the writ was entertained where the
appeal was found not to be adequate remedy, as where
the order which is sought to be reviewed is merely of
interlocutory or peremptory character, and the appeal
therefrom can be interposed only after final judgment and
may therefore be of no avail. (Rocha vs. Crossfield, 6

Phil., 355; Leung Ben vs. O'Brien, 38 Phil., 182. See also
Mendoza vs. Parungao, 49 Phil., 271; Dais vs. Court of
First Instance, 51 Phil., 36).
For analogous reasons it may be said that the petition for
certiorari interposed by the accused against the order of
the court a quo denying the motion to quash may be
entertained, not only because it was rendered in a criminal
case, but because it was rendered, as claimed, with grave
abuse of discretion, as found by the Court of Appeals, it
would be indeed unfair and unjust, if not derogatory of
their constitutional right, to force the accused to go to trial
under an information which, in their opinion, as was found,
accuses them of multiple offenses in contravention of law.
And so, in our opinion, the respondent court did not err in
entertaining the petition for certiorari instead of dismissing
it, as claimed.
The motion to quash filed by the accused in Yap vs. Lutero
was on the ground of double jeopardy. In Pineda vs.
Bartolome, the ground invoked was duplicity of offenses
charged in the information. In the case at bar, the
petitioner assails the very jurisdiction of the court wherein
the criminal case was filed, Certainly, there is a more
compelling reason that such issue be resolved soonest, in
order to avoid the court's spending precious time and
energy unnecessarily in trying and deciding the case, and
to spare the accused from the inconvenience, anxiety and
embarrassment, let alone the expenditure of effort and
money, in undergoing trial for a case the proceedings in
which could possibly be annuled for want of jurisdiction.
Even in civil actions, We have counselled that when the
court's jurisdiction is attacked in a motion to dismiss, it is
the duty of the court to resolve the same as soon as
possible in order to avoid the unwholesome consequences
mentioned above.
It is also advanced that the present petition is premature,
since respondent court has not definitely ruled on the
motion to dismiss, nor held that it has jurisdiction, but only
argument is untenable. The motion to dismiss was
predicated on the respondent court's lack of jurisdiction to
entertain the action, and the rulings of this Court are that
writs of certiorari or prohibition, or both, may issue in case
of a denial or deferment of action on such a motion to
dismiss for lack of jurisdiction.
If the question of jurisdiction were not the main ground for
this petition for review by certiorari, it would be premature
because it seeks to have a review of an interlocutory
order. But as it would be useless and futile to go ahead
with the proceedings if the court below had no jurisdiction
this petition was given due course.' (San Beda vs. CIA 51
O.G. 6636, 5638).
While it is true that action on a motion to dismiss may be
deferred until the trial and an order to that effect is
interlocutory, still where it clearly appears that the trial
Law on NatRes (73-83 42
judge or court is proceeding in excess or outside of its
jurisdiction, the remedy of prohibition would lie since it
would be useless and a waste of time to go ahead with the
proceedings. (Philippine International Fair, Inc., et al., vs.
Ibanez, et al, 50 Off. Gaz. 1036; Enrique vs. Macadaeg, et
all 47 Off. Gaz. 1207; see also San Beda College vs. CIR,
51 Off. Gaz. 5636.) (University of Sto. Tomas vs.
Villanueva, L-13748, 30 October 1959.) (Time, Inc. vs.
Reyes, 39 SCRA, pp. 315-316.)
An additional factor that induced Us to entertain the instant
petition is the obvious merit We find in the same. Our
reading of the provisions of Republic Act No. 3931 has
convinced Us that the clear legislative intention is to vest
in the Commission the exclusive authority to determine the
existence of "pollution" penalized thereunder and to
prosecute violations of said law.
The information filed against the herein petitioner charges
him with a violation of Section 9, in relation to Section 10
of Republic Act No. 3931. More specifically, it alleges that
the petitioner, with his co-accused Isaac Arivas, "willfully,
unlawfully and feloniously drain or otherwise dispose into
the highway canal and/or cause, permit, suffer to be
drained or allow to seep into such waterway the industrial
and other waste matters discharged due to the operation
of the said Insular Oil Refinery Co. so managed and
operated by them, thereby causing pollution of such
waterway with the resulting damage and/or destruction to
the arriving plants in the vicinity and providing hazard to
health and property in the same vicinity."
Section 9 in its first paragraph, supposedly the criminal act
being imputed to the petitioner, reads as follows:
SEC. 9. Prohibitions. No person shall throw, run, drain,
or otherwise dispose into any of the water and/or
atmospheric air of the Philippines, or cause, permit, suffer
to be thrown, run, drain, allow to see or otherwise dispose
into such waters or atmospheric air, any organic or
inorganic matter or any substance in gaseous or liquid
form that shall cause pollution of such waters or
atmospheric air.
It will be noted from the above-quoted provision that the
prohibited act is to throw, run, drain or otherwise dispose
into any of the water and/or atmospheric air of the
Philippines, any organic or inorganic matter or substance
"that shall cause pollution of such waters or atmospheric
air." Stated in simpler terms, the offense allegedly
committed by the petitioner was the act of causing
pollution of a waterway (highway canal).
The term "pollution" as used in the law is not to be taken in
its ordinary signification. In Section 2, paragraph (a), of
Republic Act No. 3931, "pollution" is defined in these
words:

(a) Pollution' means such alteration of the physical,
chemical and/or biological properties of any water and/or
atmospheric air of the Philippines, or any such discharge
of any liquid, gaseous or solid substance into any of the
waters and/or atmospheric air of the country as will or is
likely to create or render such waters and/or atmospheric
air harmful or detrimental or injurious to public health,
safety or welfare, or to domestic, commercial, industrial,
agricultural, recreational or other legitimate uses, or to
livestock, wild animals, birds, fish or of her aquatic life.
The power to determine the existence of pollution is
vested by the law in the Commission. Section 6, among
others, gives the Commission the authority to "determine
whether a pollution exists in any of the waters and/or
atmospheric air of the Philippines." (Section 6(a), No. 1); to
"hold public hearings, ... make findings of facts and
determinations all with respect to the violations of this Act
or orders issued by the Commission." (Ibid., No. 3); to
"institute or cause to be instituted in the court of competent
jurisdiction legal proceedings to compel compliance with
the provisions of this Act" (Ibid, No. 5); and, "after due
notice and hearing, revoke, suspend or modify any permit
issued under this Act whenever modifications are
necessary to prevent or abate pollution of any water
and/or atmospheric air of the Philippines." (Ibid., No. 7.)
Section 8 contains explicit provisions as to the authority of
the Commission to determine the existence of pollution
and to take appropriate court actions to abate or prevent
the same. It provides:
SEC. 8. Proceedings before the Commission . The
Commission may, on its own motion, or upon the request
of any person, investigate or may inquire, in a manner to
be determined by it, as to any alleged act of pollution or
the omission or failure to comply with any provisions of this
Act or any order of this Commission.
Whenever it appears to the Commission, after
investigation, that there has been a violation of any of the
provisions of this Act or any order of the Commission, it
may order whoever causes such violation to show cause
before said Commission why such discharge of industrial
wastes or any waste should not be discontinued. A notice
shall be served on the offending party directing him or it to
show cause before the Commission, on a date specified in
such notice, why an order should not be made directing
the discontinuance of such violation. Such notice shall
specify the time and the place where a public hearing will
be held by the Commission or its authorized
representatives, and notice of such hearing shall be
served personally or by registered mail, at least ten days
before said hearing; and in the case of a municipality or
corporation such notice shall be served upon the major or
president thereof. The Commission shall take evidence
with reference to said matter and may issue an order to
the party responsible for such violation, directing that
within a specified period of time thereafter, such violation
Law on NatRes (73-83 43
be discontinued unless adequate sewage works or
industrial wastes disposal system be properly operated to
prevent further damage or pollution.
No investigation being conducted or ruling made by the
Commission shall prejudice any action which may be filed
in court by any person in accordance with the provisions of
the New Civil Code on nuisance. On matters, however, not
related to nuisance, no court action shall be initiated until
the Commission shall have finally ruled thereon and no
order of the Commission discontinuing the discharge of
waste shall be stayed by the filing of said court action,
unless the court issues an injunction as provided for in the
Rules of Court.
The last paragraph of the above-quoted provision
delineates the authority to be exercised by the
Commission and by the ordinary courts in respect of
preventing or remedying the pollution of the waters or
atmospheric air of the Philippines. The provision excludes
from the authority of the Commission only the
determination of and the filing of court actions involving
violations of the New Civil Code on nuisance. It is
expressly directed that on matters not related to nuisance
"no court action shall be initiated until the Commission
shall have finally ruled thereon." This provision leaves little
room for doubt that a court action involving the
determination of the existence of pollution may not be
initiated until and unless the Commission has so
determined the existence of what in the law is considered
pollution.
It may not be argued that the above-cited provision refers
only to the filing of civil actions, and not to criminal cases
as is the one herein involved, there being no basis either
in the context in law nor from a consideration of the
purpose behind the enactment of the same upon which
such a distinction may be made. Indeed, respondents do
not seriously question that the court action contemplated
in the last paragraph of Section 8 includes criminal
proceedings. Respondents merely aver that the
aforementioned grant of authority to the Commission is not
exclusive of the power of Fiscals to file criminal actions for
a violation of the provisions of Republic Act No. 3931.
We are likewise not in accord with the view that the law
intended to give concurrent authority to the Commission
and Fiscals to prosecute violations of Republic Act No.
3931. It is true that there is no provision expressly
declaring that the authority vested in the Commission to
prosecute violations of Republic Act No. 3931 is exclusive.
Using the same logic, there is neither a provision declaring
such authority to be concurrent or may be exercised jointly
with Fiscals. The absence of an explicit declaration as to
the exclusive authority of the Commission to prosecute
violations of the subject law does not detract from the clear
intention to make it so, as gathered from the philosophy of
the law itself and as gleaned from several provisions of the

same. It is clearly deducible from the provision of Section
8 expressly declaring that no court action shall be initiated,
except those related to nuisance, until the Commission
shall have finally ruled on the alleged act of pollution; and
also from Section 6(a), No. 5, which authorizes the
Commission to "initiate or cause to be instituted in a court
of competent jurisdiction legal proceedings to compel
compliance with the provisions of this Act."
As may be seen from the law, the determination of the
existence of pollution requires investigation, public
hearings and the collection of various information relating
to water and atmospheric pollution. (Sections 6, 7, and 8.)
The definition of the term "pollution" in itself connotes that
the determination of its existence requires specialized
knowledge of technical and scientific matters which are not
ordinarily within the competence of Fiscals or of those
sitting in a court of justice. It is undoubtedly in recognition
of this fact that in Section 4 of the law, it is provided that
"the basic personnel necessary to carry out the provisions
of this Act shall be engineers, chemists, biochemists,
physicists, and other technicians"; and required in Section
3 that the Chairman of the Commission shall be the
Chairman of the National Science Development Board,
one of the part-time commissioners shall be a
recommendee of the Philippine Council of Science and
Technology, and one of the two full-time commissioner
shall be a sanitary engineer.
The vesting of authority in an administrative body to
determine when to institute a criminal action for a violation
of the law entrusted to it for administration or enforcement,
to the exclusion of the regular prosecution service of the
government, is not new in this jurisdiction. It is recognized
in Yao Lit vs. Geraldez et al., 106 Phil. 545 which upheld
the exclusive authority of the Commissioner of
Immigration' to investigate and impose administrative fines
upon violators of the provisions of Republic Act No. 751 for
the reason that said official "has better facilities than the
prosecuting officials to carry out the provisions of the said
Act, the former official being the keeper of the records
pertaining to aliens." The same principle has been
recognized with respect to the prosecutions of violations of
the Anti-Dummy Law (Republic Act No. 1131.) In holding
that the City Fiscal of Manila has no authority to prosecute
such violations independently of the Anti-Dummy Board, it
was said:
Were the city fiscal or the provincial fiscals who have the
power or right to prosecute violations of all laws and
ordinances allowed to prosecute violations of the 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
Law on NatRes (73-83 44
control the city fiscal in the prosecutions of the violations of
the Anti-Dummy Law. (Rollo, p. 118; 5 SCRA 428,433.)
In R. B. Industrial Development Co., Ltd. vs. Enage (24
SCRA 365) involving the authority of the Bureau of
Forestry over the management and use of public forests
and the transfer of licenses for the taking of forest
products, this Court has made this pronouncement:
A doctrine long recognized is that where the law confines
in an administrative office the power to determine
particular questions or matters, upon the facts to be
presented, the jurisdiction of such office shall prevail over
the courts. (p. 124, Rollo.)
It is our considered view that the Provincial Fiscal of Rizal
lacked the authority to file the information charging the
petitioner with a violation of the provisions of Republic Act
No. 3931 there being no prior finding or determination by
the Commission that the act of the petitioner had caused
pollution in any water or atmospheric air of the Philippines.
It is not to be understood, however, that a fiscal or public
prosecutor may not file an information for a violation of the
said law at all. He may do so if the Commission had made
a finding or determination that the law or any of its orders
had been violated. In the criminal case presently
considered, there had been no prior determination by the
Commission that the supposed acts of the petitioner had
caused pollution to any water of the Philippines. The filing
of the information for the violation of Section 9 of the law
is, therefore, premature and unauthorized.
Concommittantly, the respondent Judge is without
jurisdiction to take cognizance of the offense charged
therein.
WHEREFORE, the petition is hereby granted and the
questioned Orders of the respondent Judge are hereby
annuled and set aside. The respondent Judge is ordered
to dismiss Criminal Case No. 5984-75 for lack of
jurisdiction. No costs. SO ORDERED.
POLLUTION ADJUDICATION BOARD, petitioner vs.
COURT OF APPEALS and SOLAR TEXTILE FINISHING
CORPORATION, respondents.; G.R. No. 93891
March 11, 1991
Petitioner Pollution Adjudication Board ("Board") asks us
to review the Decision and Resolution promulgated on 7
February 1990 and 10 May 1990, respectively, by the
Court of Appeals in C.A.-G R. No. SP 18821 entitled
"Solar Textile Finishing Corporation v. Pollution
Adjudication Board." In that Decision and Resolution, the
Court of Appeals reversed an order of the Regional Trial
Court, Quezon City, Branch 77, in Civil Case No. Q-89-
2287 dismissing private respondent Solar Textile Finishing
Corporation's ("Solar") petition for certiorari and remanded
the case to the trial court for further proceedings.

On 22 September 1988, petitioner Board issued an ex
parte Order directing Solar immediately to cease and
desist from utilizing its wastewater pollution source
installations which were discharging untreated wastewater
directly into a canal leading to the adjacent Tullahan-
Tinejeros River. The Order signed by Hon. Fulgencio
Factoran, Jr., as Board Chairman, reads in full as follows:
Respondent, Solar Textile Finishing Corporation with plant
and place of business at 999 General Pascual Avenue,
Malabon, Metro Manila is involved in bleaching, rinsing
and dyeing textiles with wastewater of about 30 gpm.
being directly discharged untreated into the sewer. Based
on findings in the Inspections conducted on 05 November
1986 and 15 November 1986, the volume of untreated
wastewater discharged in the final out fall outside of the
plant's compound was even greater. The result of
inspection conducted on 06 September 1988 showed that
respondent's Wastewater Treatment Plant was noted
unoperational and the combined wastewater generated
from its operation was about 30 gallons per minute and
80% of the wastewater was being directly discharged into
a drainage canal leading to the Tullahan-Tinejeros River
by means of a by-pass and the remaining 20% was
channelled into the plant's existing Wastewater Treatment
Plant (WTP). Result of the analyses of the sample taken
from the by-pass showed that the wastewater is highly
pollutive in terms of Color units, BOD and Suspended
Solids, among others. These acts of respondent in spite of
directives to comply with the requirements are clearly in
violation of Section 8 of Presidential Decree No. 984 and
Section 103 of its Implementing Rules and Regulations
and the 1982 Effluent Regulations.
WHEREFORE, pursuant to Section 7 of P.D. 984 and
Section 38 of its Implementing Rules and Regulations,
respondent is hereby ordered to cease and desist from
utilizing its wastewater pollution source installation and
discharging its untreated wastewater directly into the canal
leading to the Tullahan-Tinejeros River effective
immediately upon receipt hereof and until such time when
it has fully complied with all the requirements and until
further orders from this Board.
SO ORDERED.1
We note that the above Order was based on findings of
several inspections of Solar's plant:
a. inspections conducted on 5 November 1986 and
12 November 1986 by the National Pollution Control
Commission ("NPCC"), the predecessor of the Board ;2
and
b. the inspection conducted on 6 September 1988
by the Department of Environment and Natural Resources
("DENR").
Law on NatRes (73-83 45
The findings of these two (2) inspections were that Solar's
wastewater treatment plant was non-operational and that
its plant generated about 30 gallons per minute of
wastewater, 80% of which was being directly discharged
into a drainage canal leading to the Tullahan-Tinejeros
River. The remaining 20% of the wastewater was being
channeled through Solar's non-operational wastewater
treatment plant. Chemical analysis of samples of Solar's
effluents showed the presence of pollutants on a level in
excess of what was permissible under P.D. No. 984 and
its Implementing Regulations.
A copy of the above Order was received by Solar on 26
September 1988. A Writ of Execution issued by the Board
was received by Solar on 31 March 1989.
Meantime, Solar filed a motion for reconsideration/appeal
with prayer for stay of execution of the Order dated 22
September 1988. Acting on this motion, the Board issued
an Order dated 24 April 1989 allowing Solar to operate
temporarily, to enable the Board to conduct another
inspection and evaluation of Solar's wastewater treatment
facilities. In the same Order, the Board directed the
Regional Executive Director of the DENR/ NCR to conduct
the inspection and evaluation within thirty (30) days.
On 21 April 1989, however, Solar went to the Regional
Trial Court of Quezon City, Branch 77, on petition for
certiorari with preliminary injunction against the Board, the
petition being docketed as Civil Case No. Q-89-2287.
On 21 July 1989, the Regional Trial Court dismissed
Solar's petition upon two (2) grounds, i.e., that appeal and
not certiorari from the questioned Order of the Board as
well as the Writ of Execution was the proper remedy, and
that the Board's subsequent Order allowing Solar to
operate temporarily had rendered Solar's petition moot
and academic.
Dissatisfied, Solar went on appeal to the Court of Appeals
which, in the Decision here assailed, reversed the Order of
dismissal of the trial court and remanded the case to that
court for further proceedings. In addition, the Court of
Appeals declared the Writ of Execution null and void. At
the same time, the Court of Appeals said in the dispositive
portion of its Decision that:
. . .. Still and all, this decision is without prejudice to
whatever action the appellee [Board] may take relative to
the projected 'inspection and evaluation' of appellant's
[Solar's] water treatment facilities. 3
The Court of Appeals, in so ruling, held that certiorari was
a proper remedy since the Orders of petitioner Board may
result in great and irreparable injury to Solar; and that
while the case might be moot and academic, "larger
issues" demanded that the question of due process be

settled. Petitioner Board moved for reconsideration,
without success.
The Board is now before us on a Petition for Review
basically arguing that:
1. its ex parte Order dated 22 September 1988 and
the Writ of Execution were issued in accordance with law
and were not violative of the requirements of due process;
and
2. the ex parte Order and the Writ of Execution are
not the proper subjects of a petition for certiorari.
The only issue before us at this time is whether or not the
Court of Appeals erred in reversing the trial court on the
ground that Solar had been denied due process by the
Board.
Petitioner Board claims that under P.D. No. 984, Section
7(a), it has legal authority to issue ex parte orders to
suspend the operations of an establishment when there is
prima facie evidence that such establishment is
discharging effluents or wastewater, the pollution level of
which exceeds the maximum permissible standards set by
the NPCC (now, the Board). Petitioner Board contends
that the reports before it concerning the effluent
discharges of Solar into the Tullahan-Tinejeros River
provided prima facie evidence of violation by Solar of
Section 5 of the 1982 Effluent Code.
Solar, on the other hand, contends that under the Board's
own rules and regulations, an ex parte order may issue
only if the effluents discharged pose an "immediate threat
to life, public health, safety or welfare, or to animal and
plant life." In the instant case, according to Solar, the
inspection reports before the Board made no finding that
Solar's wastewater discharged posed such a threat.
The Court is not persuaded by Solar's contention. Section
7(a) of P.D. No. 984 authorized petitioner Board to issue
ex parte cease and desist orders under the following
circumstances:
P.D. 984, Section 7, paragraph (a), provides:
(a) Public Hearing. . . . Provided, That whenever the
Commission finds prima facie evidence that the
discharged sewage or wastes are of immediate threat to
life, public health, safety or welfare, or to animal or plant
life, or exceeds the allowable standards set by the
Commission, the Commissioner may issue an ex-parte
order directing the discontinuance of the same or the
temporary suspension or cessation of operation of the
establishment or person generating such sewage or
wastes without the necessity of a prior public hearing. The
said ex-parte order shall be immediately executory and
shall remain in force until said establishment or person
Law on NatRes (73-83 46
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.
Upon the other hand, the Court must assume that the
extant allowable standards have been set by the
Commission or Board precisely in order to avoid or
neutralize an "immediate threat to life, public health, safety
or welfare, or to animal or plant life.''
Section 5 of the Effluent Regulations of 1982 4 sets out
the maximum permissible levels of physical and chemical
substances which effluents from domestic wastewater
treatment plants and industrial plants" must not exceed
"when discharged into bodies of water classified as Class
A, B, C, D, SB and SC in accordance with the 1978 NPCC
Rules and Regulations." The waters of 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:
Sec. 68. Water Usage and Classification. The quality of
Philippine waters shall be maintained in a safe and
satisfactory condition according to their best usages. For
this purpose, all water shall be classified according to the
following beneficial usages:
(a) Fresh Surface Water
 Law on NatRes (73-83 47

Classification g) oil/Grease
xxx xxx xxx in mg./1. 10 g) Oil/Grease
mg./1.
Best usage h) Detergents
Class D mg./1." 5 h) Detergents
For agriculture, irrigation, livestock watering and industrial mg./1. MBAS 2.93
cooling and processing. i) Dissolved
oxygen, mg./1. 0
xxx xxx xxx j) Settleable
Matter, mg./1. 0.4 1.5
(Emphases supplied) k) Total Dis
solved Solids
The reports on the inspections carried on Solar's mg./1. 800 610
wastewater treatment facilities on 5 and 12 November l) Total Solids 1,400 690
1986 and 6 September 1988 set forth the following m) Turbidity NTU / ppm, SiO3 70
Identical finding: The November 1986 inspections report concluded that:

a. For legal action in [view of] implementing rules
and regulations of P.D. No. 984 and Section 5 of the
Effluent Regulations of 1982. 6
Placing the maximum allowable standards set in Section 5
of the Effluent Regulations of 1982 alongside the findings
of the November 1986 and September 1988 inspection
reports, we get the following results:
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).

"Inland The new owner was summoned to a hearing held on 13

Waters October 1986 based on the adverse findings during the
(Class C & D7 inspection/water sampling test conducted on 08 August
1986. As per instruction of the Legal Division a re-
November inspection/sampling text should be conducted first before
1986 an appropriate legal action is instituted; hence, this
Report8 inspection.
Station 1 September
1988 Based on the above findings, it is clear that the new owner
Report9 continuously violates the directive of the Commission by
Station 1 undertaking dyeing operation without completing first and
a) Color in operating its existing WTP. The analysis of results on
platinum water samples taken showed that the untreated
cobalt wastewater from the firm pollutes our water resources. In
units 100 a) Color units this connection, it is recommended that appropriate legal
(Apparent action be instituted immediately against the firm. . . .10
Color) 250 125
b) pH 6-8.5 b) pH 9.3 8.7 The September 1988 inspection report's conclusions were:
c) Tempera-
ture in C 40 c) Temperature 1. The plant was undertaking dyeing, bleaching and
(C) rinsing operations during the inspection. The combined
d) Phenols in wastewater generated from the said operations was
mg.1 0.1 d) Phenols in estimated at about 30 gallons per minute. About 80% of
mg./1. the wastewater was traced directly discharged into a
e) Suspended drainage canal leading to the Tullahan-Tinejeros river by
solids in means of a bypass. The remaining 20% was channeled
mg./1. 75 e) Suspended into the plant's existing wastewater treatment plant (WTP).
solids in
mg./1. 340 80 2. The WTP was noted not yet fully operational-
f) BOD in some accessories were not yet installed.1wphi1 Only the
mg./1. 80 f) BOD (5-day) sump pit and the holding/collecting tank are functional but
mg./1 1,100 152 appeared seldom used. The wastewater mentioned

channeled was noted held indefinitely into the collection
tank for primary treatment. There was no effluent
discharge [from such collection tank].
3. A sample from the bypass wastewater was
collected for laboratory analyses. Result of the analyses
show that the bypass wastewater is polluted in terms of
color units, BOD and suspended solids, among others.
(Please see attached laboratory resul .)11
From the foregoing reports, it is clear to this Court that
there was at least prima facie evidence before the Board
that the effluents emanating from Solar's plant exceeded
the maximum allowable levels of physical and chemical
substances set by the NPCC and that accordingly there
was adequate basis supporting the ex parte cease and
desist order issued by the Board. It is also well to note that
the previous owner of the plant facility Fine Touch
Finishing Corporation had been issued a Notice of
Violation on 20 December 1985 directing it to cease and
refrain from carrying out dyeing operations until the water
treatment plant was completed and operational. Solar, the
new owner, informed the NPCC of the acquisition of the
plant on March 1986. Solar was summoned by the NPCC
to a hearing on 13 October 1986 based on the results of
the sampling test conducted by the NPCC on 8 August
1986. Petitioner Board refrained from issuing an ex parte
cease and desist order until after the November 1986 and
September 1988 re-inspections were conducted and the
violation of applicable standards was confirmed. In other
words, petitioner Board appears to have been remarkably
forbearing in its efforts to enforce the applicable standards
vis-a-vis Solar. Solar, on the other hand, seemed very
casual about its continued discharge of untreated, pollutive
effluents into the Tullahan- Tinerejos River, presumably
loath to spend the money necessary to put its Wastewater
Treatment Plant ("WTP") in an operating condition.
In this connection, we note that in Technology Developers,
Inc. v. Court of appeals, et al.,12 the Court very recently
upheld the summary closure ordered by the Acting Mayor
of Sta. Maria, Bulacan, of a pollution-causing
establishment, after finding that the records showed that:
1. No mayor's permit had been secured. While it is
true that the matter of determining whether there is a
pollution of the environment that requires control if not
prohibition of the operation of a business is essentially
addressed to the then National Pollution Control
Commission of the Ministry of Human Settlements, now
the Environmental Management Bureau of the Department
of Environment and Natural Resources, it must be
recognized that the mayor of a town has as much
responsibility to protect its inhabitants from pollution, and
by virtue of his police power, he may deny the application
for a permit to operate a business or otherwise close the
same unless appropriate measures are taken to control
and/or avoid injury to the health of the residents of the
Law on NatRes (73-83 48
community from the emission in the operation of the
business.
2. The Acting Mayor, in a letter of February l6, 1989,
called the attention of petitioner to the pollution emitted by
the fumes of its plant whose offensive odor "not only
pollute the air in the locality but also affect the health of the
residents in the area," so that petitioner was ordered to
stop its operation until further orders and it was required to
bring the following:
xxx xxx xxx
(3) Region III-Department of Environment and
Natural Resources Anti-Pollution permit. (Annex A-2,
petition)
3. This action of the Acting Mayor was in response
to the complaint of the residents of Barangay Guyong, Sta.
Maria, Bulacan, directed to the Provincial Governor
through channels (Annex A-B, petition).. . .
4. The closure order of the Acting Mayor was issued
only after an investigation was made by Marivic Guina who
in her report of December 8, 1988 observed that the fumes
emitted by the plant of petitioner goes directly to the
surrounding houses and that no proper air pollution device
has been installed. (Annex A-9, petition)
xxx xxx xxx
6. While petitioner was able to present a temporary
permit to operate by the then National Pollution Control
Commission on December 15,1987, the permit was good
only up to May 25,1988 (Annex A-12, petition). Petitioner
had not exerted any effort to extend or validate its permit
much less to install any device to control the pollution and
prevent any hazard to the health of the residents of the
community."
In the instant case, the ex parte cease and desist Order
was issued not by a local government official but by the
Pollution Adjudication Board, the very agency of the
Government charged with the task of determining whether
the effluents of a particular industrial establishment comply
with or violate applicable anti-pollution statutory and
regulatory provisions.
Ex parte cease and desist orders are permitted by law and
regulations in situations like that here presented precisely
because stopping the continuous discharge of pollutive
and untreated effluents into the rivers and other inland
waters of the Philippines cannot be made to wait until
protracted litigation over the ultimate correctness or
propriety of such orders has run its full course, including
multiple and sequential appeals such as those which Solar
has taken, which of course may take several years. The
relevant pollution control statute and implementing

regulations were enacted and promulgated in the exercise
of that pervasive, sovereign power to protect the safety,
health, and general welfare and comfort of the public, as
well as the protection of plant and animal life, commonly
designated as the police power. It is a constitutional
commonplace that the ordinary requirements of procedural
due process yield to the necessities of protecting vital
public interests like those here involved, through the
exercise of police power. The Board's ex parte Order and
Writ of Execution would, of course, have compelled Solar
temporarily to stop its plant operations, a state of affairs
Solar could in any case have avoided by simply absorbing
the bother and burden of putting its WTP on an operational
basis. Industrial establishments are not constitutionally
entitled to reduce their capitals costs and operating
expenses and to increase their profits by imposing upon
the public threats and risks to its safety, health, general
welfare and comfort, by disregarding the requirements of
anti- pollution statutes and their implementing regulations.
It should perhaps be made clear the Court is not here
saying that the correctness of the ex parte Order and Writ
of Execution may not be contested by Solar in a hearing
before the Board itself. Where the establishment affected
by an ex parte cease and desist order contests the
correctness of the prima facie findings of the Board, the
Board must hold a public hearing where such
establishment would have an opportunity to controvert the
basis of such ex parte order. That such an opportunity is
subsequently available is really all that is required by the
due process clause of the Constitution in situations like
that we have here. The Board's decision rendered after
the public hearing may then be tested judicially by an
appeal to the Court of Appeals in accordance with Section
7(c) of P.D. No. 984 and Section 42 of the Implementing
Rules and Regulations. A subsequent public hearing is
precisely what Solar should have sought instead of going
to court to seek nullification of the Board's Order and Writ
of Execution and instead of appealing to the Court of
Appeals. It will be recalled the at the Board in fact gave
Solar authority temporarily to continue operations until still
another inspection of its wastewater treatment facilities
and then another analysis of effluent samples could be
taken and evaluated.
Solar claims finally that the petition for certiorari was the
proper remedy as the questioned Order and Writ of
Execution issued by the Board were patent nullities. Since
we have concluded that the Order and Writ of Execution
were entirely within the lawful authority of petitioner Board,
the trial court did not err when it dismissed Solar's petition
for certiorari. It follows that the proper remedy was an
appeal from the trial court to the Court of Appeals, as
Solar did in fact appeal.
ACCORDINGLY, the Petition for Review is given DUE
COURSE and the Decision of the Court of Appeals dated
7 February 1990 and its Resolution dated 10 May 1990 in
Law on NatRes (73-83 49
A.C.-G.R. No. SP 18821 are hereby SET ASIDE. The
Order of petitioner Board dated 22 September 1988 and
the Writ of Execution, as well as the decision of the trial
court dated 21 July 1989, are hereby REINSTATED,
without prejudice to the right of Solar to contest the
correctness of the basis of the Board's Order and Writ of
Execution at a public hearing before the Board.
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.; G.R. No. 94759
January 21, 1991
The authority of the local executive to protect the
community from pollution is the center of this controversy.
The antecedent facts are related in the appealed decision
of the Court of Appeals as follows:
Petitioner, a domestic private corporation engaged in the
manufacture and export of charcoal briquette, received a
letter dated February 16, 1989 from private respondent
acting mayor Pablo N. Cruz, ordering the full cessation of
the operation of the petitioner's plant located at Guyong,
Sta. Maria, Bulacan, until further order. The letter likewise
requested Plant Manager Mr. Armando Manese to bring
with him to the office of the mayor on February 20, 1989
the following: a) Building permit; b) Mayor's permit; c)
Region III-Pollution of Environment and Natural Resources
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;
Law on NatRes (73-83 50
c) Exhibit "B-3", a letter addressed to Hon. Roberto
Pagdanganan Governor of the Province of Bulacan, dated
November 22, 1988, complaining about the smoke coming
out of the chimney of the company while in operation.
Reassessing all the evidence adduced, the lower court, on
June 14, 1989, issued an order (a) setting aside the order
dated April 28, 1989, which granted a Writ of Preliminary
Mandatory Injunction, and (b) dissolving the writ
consequently issued.
A motion for reconsideration dated July 6, 1989 was filed
by petitioner. Said motion drew an opposition dated July
19, 1989 from private respondent.
Resolving the petitioner's motion for reconsideration, the
respondent judge issued an order dated August 9, 1989,
denying said motion for reconsideration.1
Hence a petition for certiorari and prohibition with
preliminary injunction was filed by petitioner in the Court of
Appeals seeking to annul and set aside (a) the order
issued by the trial court on June 14, 1989, setting aside
the order dated April 28, 1989, and (b) the order of August
9, 1989, denying petitioner's motion for reconsideration of
the order of June 14, 1989. In due course the petition was
denied for lack of merit by the appellate court in a decision
dated January 26, 1990. 2 A motion for reconsideration
thereof filed by petitioner was denied on August 10, 1990.
Thus, the herein petition for review on certiorari filed with
this Court. Six errors are alleged to have been committed
by the appellate court which may be synthesized into the
singular issue of whether or not the appellate court
committed a grave abuse of discretion in rendering its
question decision and resolution.
The petition is devoid of merit.
The well-known rule is that the matter of issuance of a writ
of preliminary injunction is addressed to the sound judicial
discretion of the trial court and its action shall not be
disturbed on appeal unless it is demonstrated that it acted
without jurisdiction or in excess of jurisdiction or otherwise,
in grave abuse of its discretion. By the same token the
court that issued such a preliminary relief may recall or
dissolve the writ as the circumstances may warrant.
To the mind of the Court the following circumstances
militate against the maintenance of the writ of preliminary
injunction sought by petitioner:
1. No mayor's permit had been secured. While it is
true that the matter of determining whether there is a
pollution of the environment that requires control if not
prohibition of the operation of a business is essentially
addressed to the then National Pollution Control
Commission of the Ministry of Human Settlements, now

the Environmental Management Bureau of the Department
of Environment and Natural Resources, it must be
recognized that the mayor of a town has as much
responsibility to protect its inhabitants from pollution, and
by virture of his police power, he may deny the application
for a permit to operate a business or otherwise close the
same unless appropriate measures are taken to control
and/or avoid injury to the health of the residents of the
community from the emissions in the operation of the
business.
2. The Acting Mayor, in a letter of February 16,
1989, called the attention of petitioner to the pollution
emitted by the fumes of its plant whose offensive odor "not
only pollute the air in the locality but also affect the health
of the residents in the area," so that petitioner was ordered
to stop its operation until further orders and it was required
to bring the following:
(1) Building permit;
(2) Mayor's permit; and
(3) Region III-Department of Environment and
Natural Resources Anti-Pollution permit. 3
3. This action of the Acting Mayor was in response
to the complaint of the residents of Barangay Guyong, Sta.
Maria, Bulacan, directed to the Provincial Governor
through channels.4 The alleged NBI finding that some of
the signatures in the four-page petition were written by one
person, 5 appears to be true in some instances,
(particularly as among members of the same family), but
on the whole the many signatures appear to be written by
different persons. The certification of the barrio captain of
said barrio that he has not received any complaint on the
matter 6 must be because the complaint was sent directly
to the Governor through the Acting Mayor.
4. The closure order of the Acting Mayor was issued
only after an investigation was made by Marivic Guina who
in her report of December 8, 1988 observed that the fumes
emitted by the plant of petitioner goes directly to the
surrounding houses and that no proper air pollution device
has been installed.7
5. Petitioner failed to produce a building permit from
the municipality of Sta. Maria, but instead presented a
building permit issued by an official of Makati on March
6,1987.8
6. While petitioner was able to present a temporary
permit to operate by the then National Pollution Control
Commission on December 15, 1987, the permit was good
only up to May 25, 1988.9 Petitioner had not exerted any
effort to extend or validate its permit much less to install
any device to control the pollution and prevent any hazard
to the health of the residents of the community.
Law on NatRes (73-83 51
All these factors justify the dissolution of the writ of
preliminary injunction by the trial court and the appellate
court correctly upheld the action of the lower court.
Petitioner takes note of the plea of petitioner focusing on
its huge investment in this dollar-earning industry.1wphi1
It must be stressed however, that concomitant with the
need to promote investment and contribute to the growth
of the economy is the equally essential imperative of
protecting the health, nay the very lives of the people, from
the deleterious effect of the pollution of the environment.
WHEREFORE, the petition is DENIED, with costs against
petitioner. SO ORDERED.
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.; G.R.
No. 74816 March 17, 1987
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:
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;
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
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
Law on NatRes (73-83 52
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.
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 counter-motion 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
in Habaluyas 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
Law on NatRes (73-83 53
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
Law on NatRes (73-83 54
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.
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
Law on NatRes (73-83 55
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.
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)
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.
HILARION M. HENARES, JR., VICTOR C. AGUSTIN,
ALFREDO L. HENARES, DANIEL L. HENARES,
ENRIQUE BELO HENARES, and CRISTINA BELO
HENARES, petitioners, vs. LAND TRANSPORTATION
FRANCHISING AND REGULATORY BOARD and
DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS, respondents.; G.R. No. 158290
October 23, 2006
Petitioners challenge this Court to issue a writ of
mandamus commanding respondents Land Transportation
Franchising and Regulatory Board (LTFRB) and the
Department of Transportation and Communications
(DOTC) to require public utility vehicles (PUVs) to use
compressed natural gas (CNG) as alternative fuel.
Citing statistics from the Metro Manila Transportation and
Traffic Situation Study of 1996,1 the Environmental
Management Bureau (EMB) of the National Capital
Region,2 a study of the Asian Development Bank,3 the
Manila Observatory4 and the Department of Environment
and Natural Resources5 (DENR) on the high growth and
low turnover in vehicle ownership in the Philippines,
including diesel-powered vehicles, two-stroke engine
powered motorcycles and their concomitant emission of air
pollutants, petitioners attempt to present a compelling
case for judicial action against the bane of air pollution and
related environmental hazards.
Law on NatRes (73-83 56
Petitioners allege that the particulate matters (PM)
complex mixtures of dust, dirt, smoke, and liquid droplets,
varying in sizes and compositions emitted into the air from
various engine combustions have caused detrimental
effects on health, productivity, infrastructure and the
overall quality of life. Petitioners particularly cite the effects
of certain fuel emissions from engine combustion when
these react to other pollutants. For instance, petitioners
aver, with hydrocarbons, oxide of nitrogen (NOx) creates
smog; with sulfur dioxide, it creates acid rain; and with
ammonia, moisture and other compounds, it reacts to form
nitric acid and harmful nitrates. Fuel emissions also cause
retardation and leaf bleaching in plants. According to
petitioner, another emission, carbon monoxide (CO), when
not completely burned but emitted into the atmosphere
and then inhaled can disrupt the necessary oxygen in
blood. With prolonged exposure, CO affects the nervous
system and can be lethal to people with weak hearts.6
Petitioners add that although much of the new power
generated in the country will use natural gas while a
number of oil and coal-fired fuel stations are being
phased-out, still with the projected doubling of power
generation over the next 10 years, and with the continuing
high demand for motor vehicles, the energy and transport
sectors are likely to remain the major sources of harmful
emissions. Petitioners refer us to the study of the
Philippine Environment Monitor 20027, stating that in four
of the country's major cities, Metro Manila, Davao, Cebu
and Baguio, the exposure to PM10, a finer PM which can
penetrate deep into the lungs causing serious health
problems, is estimated at over US$430 million.8 The study
also reports that the emissions of PMs have caused the
following:
Over 2,000 people die prematurely. This loss is valued at
about US$140 million.
Over 9,000 people suffer from chronic bronchitis, which
is valued at about US$120 million.
Nearly 51 million cases of respiratory symptom days in
Metro Manila (averaging twice a year in Davao and Cebu,
and five to six times in Metro Manila and Baguio), costs
about US$170 million. This is a 70 percent increase, over
a decade, when compared with the findings of a similar
study done in 1992 for Metro Manila, which reported 33
million cases.9
Petitioners likewise cite the University of the Philippines'
studies in 1990-91 and 1994 showing that vehicular
emissions in Metro Manila have resulted to the prevalence
of chronic obstructive pulmonary diseases (COPD); that
pulmonary tuberculosis is highest among jeepney drivers;
and there is a 4.8 to 27.5 percent prevalence of respiratory
symptoms among school children and 15.8 to 40.6 percent
among child vendors. The studies also revealed that the

children in Metro Manila showed more compromised
pulmonary function than their rural counterparts.
Petitioners infer that these are mostly due to the emissions
of PUVs.
To counter the aforementioned detrimental effects of
emissions from PUVs, petitioners propose the use of
CNG. According to petitioners, CNG is a natural gas
comprised mostly of methane which although containing
small amounts of propane and butane,10 is colorless and
odorless and considered the cleanest fossil fuel because it
produces much less pollutants than coal and petroleum;
produces up to 90 percent less CO compared to gasoline
and diesel fuel; reduces NOx emissions by 50 percent and
cuts hydrocarbon emissions by half; emits 60 percent less
PMs; and releases virtually no sulfur dioxide. Although,
according to petitioners, the only drawback of CNG is that
it produces more methane, one of the gases blamed for
global warming.11
Asserting their right to clean air, petitioners contend that
the bases for their petition for a writ of mandamus to order
the LTFRB to require PUVs to use CNG as an alternative
fuel, lie in Section 16,12 Article II of the 1987 Constitution,
our ruling in Oposa v. Factoran, Jr.,13 and Section 414 of
Republic Act No. 8749 otherwise known as the "Philippine
Clean Air Act of 1999."
Meantime, following a subsequent motion, the Court
granted petitioners' motion to implead the Department of
Transportation and Communications (DOTC) as additional
respondent.
In his Comment for respondents LTFRB and DOTC, the
Solicitor General, cites Section 3, Rule 65 of the Revised
Rules of Court and explains that the writ of mandamus is
not the correct remedy since the writ may be issued only
to command a tribunal, corporation, board or person to do
an act that is required to be done, when he or it unlawfully
neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust
or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is
entitled, there being no other plain, speedy and adequate
remedy in the ordinary course of law.15 Further citing
existing jurisprudence, the Solicitor General explains that
in contrast to a discretionary act, a ministerial act, which a
mandamus is, is one in which an officer or tribunal
performs in a given state of facts, in a prescribed manner,
in obedience to a mandate of legal authority, without
regard to or the exercise of his own judgment upon the
propriety or impropriety of an act done.
The Solicitor General also notes that nothing in Rep. Act
No. 8749 that petitioners invoke, prohibits the use of
gasoline and diesel by owners of motor vehicles. Sadly
too, according to the Solicitor General, Rep. Act No. 8749
does not even mention the existence of CNG as
Law on NatRes (73-83 57
alternative fuel and avers that unless this law is amended
to provide CNG as alternative fuel for PUVs, the
respondents cannot propose that PUVs use CNG as
alternative fuel.
The Solicitor General also adds that it is the DENR that is
tasked to implement Rep. Act No. 8749 and not the
LTFRB nor the DOTC. Moreover, he says, it is the
Department of Energy (DOE), under Section 2616 of Rep.
Act No. 8749, that is required to set the specifications for
all types of fuel and fuel-related products to improve fuel
compositions for improved efficiency and reduced
emissions. He adds that under Section 2117 of the cited
Republic Act, the DOTC is limited to implementing the
emission standards for motor vehicles, and the herein
respondents cannot alter, change or modify the emission
standards. The Solicitor General opines that the Court
should declare the instant petition for mandamus without
merit.
Petitioners, in their Reply, insist that the respondents
possess the administrative and regulatory powers to
implement measures in accordance with the policies and
principles mandated by Rep. Act No. 8749, specifically
Section 218 and Section 21.19 Petitioners state that under
these laws and with all the available information provided
by the DOE on the benefits of CNG, respondents cannot
ignore the existence of CNG, and their failure to recognize
CNG and compel its use by PUVs as alternative fuel while
air pollution brought about by the emissions of gasoline
and diesel endanger the environment and the people, is
tantamount to neglect in the performance of a duty which
the law enjoins.
Lastly, petitioners aver that other than the writ applied for,
they have no other plain, speedy and adequate remedy in
the ordinary course of law. Petitioners insist that the writ in
fact should be issued pursuant to the very same Section 3,
Rule 65 of the Revised Rules of Court that the Solicitor
General invokes.
In their Memorandum, petitioners phrase the issues before
us as follows:
I. WHETHER OR NOT THE PETITIONERS HAVE THE
PERSONALITY TO BRING THE PRESENT ACTION
II. WHETHER OR NOT THE PRESENT ACTION IS
SUPPORTED BY LAW
III. WHETHER OR NOT THE RESPONDENT IS THE
AGENCY RESPONSIBLE TO IMPLEMENT THE
SUGGESTED ALTERNATIVE OF REQUIRING PUBLIC
UTILITY VEHICLES TO USE COMPRESSED NATURAL
GAS (CNG)
IV. WHETHER OR NOT THE RESPONDENT CAN BE
COMPELLED TO REQUIRE PUBLIC UTILITY VEHICLES

TO USE COMPRESSED NATURAL GAS THROUGH A
WRIT OF MANDAMUS20
Briefly put, the issues are two-fold. First, Do petitioners
have legal personality to bring this petition before us?
Second, Should mandamus issue against respondents to
compel PUVs to use CNG as alternative fuel?
According to petitioners, Section 16,21 Article II of the
1987 Constitution is the policy statement that bestows on
the people the right to breathe clean air in a healthy
environment. This policy is enunciated in Oposa.22 The
implementation of this policy is articulated in Rep. Act No.
8749. These, according to petitioners, are the bases for
their standing to file the instant petition. They aver that
when there is an omission by the government to safeguard
a right, in this case their right to clean air, then, the citizens
can resort to and exhaust all remedies to challenge this
omission by the government. This, they say, is embodied
in Section 423 of Rep. Act No. 8749.
Petitioners insist that since it is the LTFRB and the DOTC
that are the government agencies clothed with power to
regulate and control motor vehicles, particularly PUVs, and
with the same agencies' awareness and knowledge that
the PUVs emit dangerous levels of air pollutants, then, the
responsibility to see that these are curbed falls under
respondents' functions and a writ of mandamus should
issue against them.
The Solicitor General, for his part, reiterates his position
that the respondent government agencies, the DOTC and
the LTFRB, are not in a position to compel the PUVs to
use CNG as alternative fuel. The Solicitor General
explains that the function of the DOTC is limited to
implementing the emission standards set forth in Rep. Act
No. 8749 and the said law only goes as far as setting the
maximum limit for the emission of vehicles, but it does not
recognize CNG as alternative engine fuel. The Solicitor
General avers that the petition should be addressed to
Congress for it to come up with a policy that would compel
the use of CNG as alternative fuel.
Patently, this Court is being asked to resolve issues that
are not only procedural. Petitioners challenge this Court to
decide if what petitioners propose could be done through a
less circuitous, speedy and unchartered course in an issue
that Chief Justice Hilario G. Davide, Jr. in his ponencia in
the Oposa case,24 describes as "inter-generational
responsibility" and "inter-generational justice."
Now, as to petitioners' standing. There is no dispute that
petitioners have standing to bring their case before this
Court. Even respondents do not question their standing.
This petition focuses on one fundamental legal right of
petitioners, their right to clean air. Moreover, as held
previously, a party's standing before this Court is a
procedural technicality which may, in the exercise of the
Law on NatRes (73-83 58
Court's discretion, be set aside in view of the importance
of the issue raised. We brush aside this issue of
technicality under the principle of the transcendental
importance to the public, especially so if these cases
demand that they be settled promptly.
Undeniably, the right to clean air not only is an issue of
paramount importance to petitioners for it concerns the air
they breathe, but it is also impressed with public interest.
The consequences of the counter-productive and
retrogressive effects of a neglected environment due to
emissions of motor vehicles immeasurably affect the well-
being of petitioners. On these considerations, the legal
standing of the petitioners deserves recognition.
Our next concern is whether the writ of mandamus is the
proper remedy, and if the writ could issue against
respondents.
Under Section 3, Rule 65 of the Rules of Court,
mandamus lies under any of the following cases: (1)
against any tribunal which unlawfully neglects the
performance of an act which the law specifically enjoins as
a duty; (2) in case any corporation, board or person
unlawfully neglects the performance of an act which the
law enjoins as a duty resulting from an office, trust, or
station; and (3) in case any tribunal, corporation, board or
person unlawfully excludes another from the use and
enjoyment of a right or office to which such other is legally
entitled; and there is no other plain, speedy, and adequate
remedy in the ordinary course of law.
In University of San Agustin, Inc. v. Court of Appeals,25
we said,
It is settled that mandamus is employed to compel the
performance, when refused, of a ministerial duty, this
being its main objective. It does not lie to require anyone
to fulfill contractual obligations or to compel a course of
conduct, nor to control or review the exercise of discretion.
On the part of the petitioner, it is essential to the issuance
of a writ of mandamus that he should have a clear legal
right to the thing demanded and it must be the imperative
duty of the respondent to perform the act required. It never
issues in doubtful cases. While it may not be necessary
that the duty be absolutely expressed, it must however, be
clear. The writ will not issue to compel an official to do
anything which is not his duty to do or which is his duty not
to do, or give to the applicant anything to which he is not
entitled by law. The writ neither confers powers nor
imposes duties. It is simply a command to exercise a
power already possessed and to perform a duty already
imposed. (Emphasis supplied.)
In this petition the legal right which is sought to be
recognized and enforced hinges on a constitutional and a
statutory policy already articulated in operational terms,
e.g. in Rep. Act No. 8749, the Philippine Clean Air Act of

1999. Paragraph (a), Section 21 of the Act specifically
provides that when PUVs are concerned, the responsibility
of implementing the policy falls on respondent DOTC. It
provides as follows:
SEC 21. Pollution from Motor Vehicles. - a) The DOTC
shall implement the emission standards for motor vehicles
set pursuant to and as provided in this Act. To further
improve the emission standards, the Department [DENR]
shall review, revise and publish the standards every two
(2) years, or as the need arises. It shall consider the
maximum limits for all major pollutants to ensure
substantial improvement in air quality for the health, safety
and welfare of the general public.
Paragraph (b) states:
b) The Department [DENR] in collaboration with the
DOTC, DTI and LGUs, shall develop an action plan for the
control and management of air pollution from motor
vehicles consistent with the Integrated Air Quality
Framework . . . . (Emphasis supplied.)
There is no dispute that under the Clean Air Act it is the
DENR that is tasked to set the emission standards for fuel
use and the task of developing an action plan. As far as
motor vehicles are concerned, it devolves upon the DOTC
and the line agency whose mandate is to oversee that
motor vehicles prepare an action plan and implement the
emission standards for motor vehicles, namely the LTFRB.
In Oposa26 we said, the right to a balanced and healthful
ecology carries with it the correlative duty to refrain from
impairing the environment. We also said, it is clearly the
duty of the responsible government agencies to advance
the said right.
Petitioners invoke the provisions of the Constitution and
the Clean Air Act in their prayer for issuance of a writ of
mandamus commanding the respondents to require PUVs
to use CNG as an alternative fuel. Although both are
general mandates that do not specifically enjoin the use of
any kind of fuel, particularly the use of CNG, there is an
executive order implementing a program on the use of
CNG by public vehicles. Executive Order No. 290, entitled
Implementing the Natural Gas Vehicle Program for Public
Transport (NGVPPT), took effect on February 24, 2004.
The program recognized, among others, natural gas as a
clean burning alternative fuel for vehicle which has the
potential to produce substantially lower pollutants; and the
Malampaya Gas-to-Power Project as representing the
beginning of the natural gas industry of the Philippines.
Paragraph 1.2, Section 1 of E.O. No. 290 cites as one of
its objectives, the use of CNG as a clean alternative fuel
for transport. Furthermore, one of the components of the
program is the development of CNG refueling stations and
all related facilities in strategic locations in the country to
serve the needs of CNG-powered PUVs. Section 3 of E.O.
Law on NatRes (73-83 59
No. 290, consistent with E.O. No. 66, series of 2002,
designated the DOE as the lead agency (a) in developing
the natural gas industry of the country with the DENR,
through the EMB and (b) in formulating emission
standards for CNG. Most significantly, par. 4.5, Section 4
tasks the DOTC, working with the DOE, to develop an
implementation plan for "a gradual shift to CNG fuel
utilization in PUVs and promote NGVs [natural gas
vehicles] in Metro Manila and Luzon through the issuance
of directives/orders providing preferential franchises in
present day major routes and exclusive franchises to
NGVs in newly opened routes" A thorough reading of
the executive order assures us that implementation for a
cleaner environment is being addressed. To a certain
extent, the instant petition had been mooted by the
issuance of E.O. No. 290.
Regrettably, however, the plain, speedy and adequate
remedy herein sought by petitioners, i.e., a writ of
mandamus commanding the respondents to require PUVs
to use CNG, is unavailing. Mandamus is available only to
compel the doing of an act specifically enjoined by law as
a duty. Here, there is no law that mandates the
respondents LTFRB and the DOTC to order owners of
motor vehicles to use CNG. At most the LTFRB has been
tasked by E.O. No. 290 in par. 4.5 (ii), Section 4 "to grant
preferential and exclusive Certificates of Public
Convenience (CPC) or franchises to operators of NGVs
based on the results of the DOTC surveys."
Further, mandamus will not generally lie from one branch
of government to a coordinate branch, for the obvious
reason that neither is inferior to the other.27 The need for
future changes in both legislation and its implementation
cannot be preempted by orders from this Court, especially
when what is prayed for is procedurally infirm. Besides,
comity with and courtesy to a coequal branch dictate that
we give sufficient time and leeway for the coequal
branches to address by themselves the environmental
problems raised in this petition.
In the same manner that we have associated the
fundamental right to a balanced and healthful ecology with
the twin concepts of "inter-generational responsibility" and
"inter-generational justice" in Oposa,28 where we upheld
the right of future Filipinos to prevent the destruction of the
rainforests, so do we recognize, in this petition, the right of
petitioners and the future generation to clean air. In Oposa
we said that if the right to a balanced and healthful ecology
is now explicitly found in the Constitution even if the right
is "assumed to exist from the inception of humankind, it
is because of the well-founded fear of its framers [of the
Constitution] 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
 Law on NatRes (73-83 60

else would be lost not only for the present generation, but
also for those to come. . ."29

It is the firm belief of this Court that in this case, it is timely

to reaffirm the premium we have placed on the protection
of the environment in the landmark case of Oposa. Yet, as
serious as the statistics are on air pollution, with the
present fuels deemed toxic as they are to the environment,
as fatal as these pollutants are to the health of the citizens,
and urgently requiring resort to drastic measures to reduce
air pollutants emitted by motor vehicles, we must admit in
particular that petitioners are unable to pinpoint the law
that imposes an indubitable legal duty on respondents that
will justify a grant of the writ of mandamus compelling the
use of CNG for public utility vehicles. It appears to us that
more properly, the legislature should provide first the
specific statutory remedy to the complex environmental
problems bared by herein petitioners before any judicial
recourse by mandamus is taken.

WHEREFORE, the petition for the issuance of a writ of

mandamus is DISMISSED for lack of merit.

SO ORDERED.