GR 162331

CASE DIGEST: LEPANTO CONSOLIDATED MINING COMPANY V. WMC RESOURCES INTERNATIONAL

PTY. LTD. AND WMC (PHILIPPINES), INC.
Published by symba on September 6, 2013 | Leave a response
LEPANTO CONSOLIDATED MINING COMPANY v. WMC RESOURCES INTERNATIONAL PTY. LTD. and
WMC (PHILIPPINES), INC.

412 SCRA 101 (2003), THIRD DIVISION

In a contract denominated as “Tampakan Option Agreement”, respondent WMC Resources International Pty. Ltd.
(WMC), through its local subsidiary Western Mining Corporation (Philippines), Inc. (WMCP), acquired the mining
claims in Tampakan, South Cotabato of the Tampakan Companies. The “Tampakan Option Agreement” was amended by
subsequent agreements under which the Tampakan Companies were given preferential option to acquire the shares of
WMC in WMCP and Hillcrest Inc. in the event WMC decided to sell them. WMC, by a Sale and Purchase Agreement,
sold to Lepanto Consolidated Mining Company (Lepanto) its shares of stock. As the Tampakan Companies later availed
of their preferential right under the “Tampakan Option Agreement,” a Sale and Purchase Agreement was concluded
between WMC and the Tampakan Companies over the same shares of stock priorly purchased by Lepanto.

The Tampakan Companies notified the Director of the Mines and Geosciences Bureau (MGB) of the DENR of the
exercise of their preemptive right to buy WMC‘s equity in WMCP and Hillcrest, Inc. Lepanto wrote the DENR Secretary
about the invalidity of said agreement and reiterated its request for the approval of its acquisition of the disputed shares.

Lepanto subsequently filed before the Regional Trial Court (RTC) of Makati a complaint against WMC, WMCP,
Tampakan Companies. WMC et al. filed before the RTC a Joint Motion to Dismiss on the ground of forum shopping. The
RTC denied WCM et al.‘s Motion to Dismiss. On appeal, the CA granted the petition of respondents ruling that Lepanto
is guilty of forum shopping. Petitioners filed a motion for reconsideration with the CA. The CA denied said motion.

ISSUE:

Whether or not Lepanto is guilty of forum shopping

HELD:

It is clear from the proceedings before the DENR, specifically before the MGB, that the issue of which –– between
petitioner and respondent Tampakan Companies –– possesses the better right to acquire the mining rights, claims and
interests held by WMC through its local subsidiary WMCP, especially with respect to the 1995 FTAA, had been brought
to the fore. The MGB cannot just assess the qualifications of petitioner and of the Tampakan Companies as potential
transferee or assignee of the rights and obligations of WMCP under the FTAA without also resolving the issue of which
has priority of right to become one.

True, the questioned agreements of sale between Lepanto and WMC on one hand and between WMC and the Tampakan
Companies on the other pertain to transfer of shares of stock from one entity to another. But said shares of stock represent
ownership of mining rights or interest in mining agreements. Hence, the power of the MGB to rule on the validity of the
questioned agreements of sale, which was raised by Lepanti before the DENR, is inextricably linked to the very nature of
such agreements over which the MGB has jurisdiction under the law. Unavoidably, there is identity of reliefs that Lepanto
seeks from both the MGB and the RTC.

Forum shopping exists when both actions involve the same transactions, same essential facts and circumstances and raise
identical causes of actions, subject matter, and issues. Such elements are evidently present in both the proceedings before
the MGB and before the trial court. The case instituted with the RTC was thus correctly ordered dismissed by the
appellate court on the ground of forum shopping. Besides, not only did Lepanto commit forum shopping but it also failed
to exhaust administrative remedies by opting to go ahead in seeking reliefs from the court even while those same reliefs
were appropriately awaiting resolution by the MGB.
G.R. No. 190004
FACTS: Respondent was the registered owner of an agricultural land in Butuan City with an area of 25.2160 hectares
and which was placed by DAR under compulsory acquisition of CARP as reflected in the Notice of Coverage.
Petitioner LBP offered ₱192,782.59 as compensation for the land, but Dalauta rejected such valuation for being too low.
The case was referred to the DAR Adjudication Board (DARAB) through the Provincial Agrarian Reform
Adjudicator (PARAD) of Butuan City, who affirmed the valuation made by LBP, after a summary administrative
proceeding was conducted.
Respondent filed a petition for determination of just compensation with the RTC, sitting as SAC. He alleged that LBP’s
valuation of the land was inconsistent with the rules and regulations prescribed in DAR Administrative Order (A.O.) No.
06, series of 1992, for determining the just compensation of lands covered by CARP’s compulsory acquisition scheme.
The Board of Commissioners constituted by SAC inspected the land and recommended that the value of the land be
pegged at ₱100,000.00 per hectare in which both parties objected.

ISSUE: Whether or not respondent is considered the trial court correctly computed the just compensation of the
subject property.
RULING: Upon an assiduous assessment of the different valuations arrived at by the DAR, the SAC and the CA, the
Court agrees with the position of Justice Francis Jardeleza that just compensation for respondent Dalauta’s land
should be computed based on the formula provided under DAR-LBP Joint Memorandum Circular No. 11, series
of 2003 (JMC No. 11 (2003)). This Memorandum Circular, which provides for the specific guidelines for properties with
standing commercial trees, explains:
The Capitalized Net Income (CNI) approach to land valuation assumes that there would be uniform streams of future
income that would be realized in perpetuity from the seasonal/permanent crops planted to the land. In the case of
commercial trees (hardwood and soft wood species), however, only a one-time income is realized when the trees are
due for harvest. The regular CNI approach in the valuation of lands planted to commercial trees would therefore not
apply. (Emphasis and underscoring supplied.)
Dalauta’s sale of falcata trees indeed appears to be a one-time transaction. He did not claim to have derived any other
income from the property prior to receiving the Notice of Coverage from the DAR in February 1994. For this reason, his
property would be more appropriately covered by the formula provided under JMC No. 11 (2003).
Dalauta alleges to have sold all the falcata trees in the property to Fonacier in 1993. After Fonacier finished harvesting in
January 1994, he claims that, per advice of his lawyer, he immediately caused the date of effectivity of this Joint
Memorandum Circular x x x.” It is submitted, however, that applying the above formula to compute just compensation
for respondent’s land would be the most equitable course of action under the circumstances. Without JMC No. 11 (2003),
Dalauta’s property would have to be valued using the formula for idle lands, the CNI and CS factors not being applicable.
Following this formula, just compensation for Dalauta’s property would only amount to ₱225,300.00, computed as
follows:
LV = MVx2
Where: LV = Land Value; MV = Market Value per Tax Declaration*
 For the area planted to corn, ₱7,740.00/hectare
 For idle/pasture land, ₱3,890/hectare
Thus:
For the 4 hectares planted to corn: LV = (P7, 7 40/hectare x 4 hectares) x 2 = ₱61,920.00
For the 21 hectares of idle/pasture land: LV = (₱3,890/hectare x 21) x 2 = ₱163,380.00
Total Land Value = P61,920.00 + Pl63,380.00 = P225,300.00
GR 186487

PRIMARY JURISDICTION OVER PUBLIC LAND OWNERSHIP BELONGS TO DENR, NOT TO REGULAR
COURTS.

In BAGUNU VS. SPS. AGGABAO, G.R. NO. 186487, AUGUST 15, 2011, the question as to who between the DENR
and the regular courts has primary jurisdiction over matters of land ownership was clarified. Primary jurisdiction over
matters of public land ownership belongs to the Director of Lands, subject to review by the DENR Secretary. On the other
hand, jurisdiction over matters of private land ownership is exclusively vested with the regular courts.

The pertinent portions of the pronouncement are quoted as follows:

The petitioner insists that under the law actions incapable of pecuniary estimation, to which a suit for reformation of
contracts belong, and those involving ownership of real property fall within the exclusive jurisdiction of the Regional
Trial Court. Since these actions are already pending before the RTC, the DENR Secretary overstepped his authority in
excluding Lot 322 from the petitioner’s free patent application and ordering the respondents to apply for a free
patent over the same lot.

In an action for reformation of contract, the court determines whether the parties’ written agreement reflects their true
intention. In the present case, this intention refers to the identity of the land covered by the second and third sale. On the
other hand, in a reivindicatory action, the court resolves the issue of ownership of real property and the plaintiff’s
entitlement to recover its full possession. In this action, the plaintiff is required to prove not only his ownership, but also
the identity of the real property he seeks to recover.

While these actions ordinarily fall within the exclusive jurisdiction of the RTC, the court’s jurisdiction to resolve
controversies involving ownership of real property extends only to private lands. In the present case, neither party
has asserted private ownership over Lot 322. The respondents acknowledged the public character of Lot 322 by mainly
relying on the administrative findings of the DENR in their complaint-in-intervention, instead of asserting their own
private ownership of the property. For his part, the petitioner’s act of applying for a free patent with the Bureau
of Lands is an acknowledgment that the land covered by his application is a public land whose management and
disposition belong to the DENR Secretary, with the assistance of the Bureau of Lands.

Xxxx
The resolution of conflicting claims of ownership over real property is within the regular courts’ area of
competence and, concededly, this issue is judicial in character. However, regular courts would have no power to
conclusively resolve this issue of ownership given the public character of the land, since under C.A. No. 141, in
relation to Executive Order No. 192, the disposition and management of public lands fall within the exclusive
jurisdiction of the Director of Lands, subject to review by the DENR Secretary.
Xxxx

With this clarification, it should now be clear that jurisdiction on questions of land ownership is determined by the
nature of the land involved. If the land is still a public land, then the DENR has primary jurisdiction. If the subject land is
already a private land, the authority to adjudicate matters of ownership belongs with the regular courts.