GR. No.

152619-20 & 152870-71 (Case Digest)

by joscan5/04/17 #OraEAT!Labora #beshtEffort

Facts:

- in 1931, the Dav-Agu-Sur Forest Reserve was established consisting of more than 1.9 million hectares of
forest land.
- High grade gold was discovered in one of the area in the forest reserve in the 1980s.
-on November 1983, Camilo Banad filed the first DOL (Declaration of Location) for 6 sites in the gold rush area,
Apex Mining entered into an agreement with Banad. Several applications were filed by other individuals from
1983 to '84.
-MMC (Marcopper Mining Corp) filed 16 DOLs in sites adjacent to Banad's claim which the company later
withdrew when it learned that the area was part of the Dav-Ag-Sur Forest Reserve and instead filed for
prospecting permit before BFD (Bureau of Forest Development).
-on July 19, 1985, MMC was issued Permit to Prospect in an area between Municipalities Cateel and Monkayo
with 4,941 hectares which included areas already claimed by Apex and other mining claimants.
-on March 10, 1986, BMG granted MMC's application for exploration with EP133 (Exploration Permit 133).
MMC then filed Petiion for Cancellation of Mining Claims againts Apex and other claimants arguing that the
area was part of the 1931 Forest Reserve, hence, said companies should have permit to prospect to acquire
mining rights.
-Apex filed a counter motion and on Dec 1986, BMG released a decision dismissing MMC's petition and
declaring EP 133 as null and void. On an appeal by MMC, DENR reversed the BMG's ruling restating MMC's
EP133 as valid and subsisting, said ruling was affirmed by the Office of the President . Apex file a Petition for
Certiorari before the SC (Apex Mining Co v Garcia ) which the Court ruled against the petitioner, stating that
the contested area was within the 1931 forest reserve, hence acquiring mining right is via Permit to Prospect
issued by BFD.
-In December 1991, DENR Secretary issued DAO No. 66 opening 762 hectares within the Forest Reserve for
small scale mining operations.
-In Aug 1993, MISSMA's application for MPSA was denied on grounds that the area was under EP133 of MMC
and that MISSMA was not qualified for MPSA per DAO No. 82, sr. 1990.
-On January 1994, Rosendo Villaflor representing RED Mines file for Petition for Cancellation of EP133 which
was intervened by DUMC and Balite.
-On February 16, 1994, MMC assigned EP133 to SEM, allegedly 100% owned by MMC.
- On June 1994, SEM applied for MPSA for the entire 4.9k hectares covered by EP133 but was denied because
of pendency of RED Mines Case.
-SEM re-applied for MPSA on September 1995 which was accepted by BMG and designated the said
application as MPSA No. 128 (MPSA128), 11 adverse claims were also filed. DENR composed a Panel of
Arbitrators (PA) which later ruled that EP133 as valid and that BMG Director has authority to issue said permits
and renew the same w/o limit. Furthermore, concerning the adverse claims in MPSA 128, the PA scored the
lack of sketch containing technical description of each claims, not following rules and procedures for filing
adverse claims. PA dismissed adverse claimants contention.
-Adverse claimants appealed PA's ruling before the Mines Adjudication Board (MAB) which declared PA's
decision as erroneous for basing its decision on the absence of a sketch plan. On the validity of EP133, MAB
declared it irrelevant because it had long expired for non-renewal, treating SEM's application as entirely new
and distinct. MAB recommended that area designated by DAO 66 shall not be included from MPSA 128.
-Balite et al filed an appeal to SC but case was remanded to CA, in March 2002, CA affirmed in toto PA's
decision and declared MAB's decision as null and void. CA's decision included:
a) EPP 133's transfer to SEM was valid, SEM was an agent of MMC;
2)MMC's exploration right is a property right which did not diminish even with MMC's failure to extract
and utilize minerals;
 3) DAO No. 166 was done beyond powers of the DENR Sec., since President has the power to withdraw
forest reserves;
4) Failure to submit a sketch plan was fatal to their appeal, Villaflor's mining claims cannot stand since
it was based on DAO 166 which was null and void;

-Apex, Balite and MAB separately filed Petition for Review on Certiorari before the SC.
-At the pendency of the petitions, President Arroyo issued Proclamation 297 in November 2002 declaring 8.1k
hectares in Monkayo, Comval as mineral reservation and as environmentally critical area. Subsequently DENR
issued DAO 2002-18 declaring emergency situation in the Diwalwal Gold Rush Area putting stoppage to all
mining operations therein.

Issue:
The SC consolidated the issues raised by petitioners, to wit:

1)Whether or not CA erred in upholding the validity and continuous existence of EP133 as well as its
transfer to SEM;
2) Whether or not the CA erred in declaring that DENR Secretary has no authority to issue DAO 66;
3) Whether or not subsequent acts of the executive department can outweigh Apex and Balite over the
Diwalwal Gold Rush Area;

Held:
Issue # 1

#6 Terms and Condition for EP166 states that :

"Permit shall be for the exclusive use and benefit of the permittee or his duly AUTHORIZED AGENTS and shall
be used for mineral exploration purposes only"

SC opined that: "The burden of proving agency is upon the party who sets forth such allegation. SEM did not
submi t proof that it is designated agent of MMC to represent the latter in its business dealings or
undertakings. SEM is not an authorized agent of MMC, hence transfer of EP is null and void. Concept of agency
is distinct from assignment, wherein in the former, the agent acts on is not his own but on behalf of his
principal, while the in latter, there is total transfer or relinquishment of right by assignor to the assignee". The
language of the DEED of ASSIGNMENT between MMC and SEM clearly indicate that SEM was not an agent of
MMC. The transfer of EP166 from MMC to SEM was done without approval of the DENR Secretary, contrary
to PD 463, thereby making the transfer w/o legal effect.

-in addtion EP 166, per record, had expired since July 6, 1994 and was never renewed afterwards by MMC.
MMC lost any right in the Diwalwal Gold Rush Area ny expiration of its EP.

Issue#2

-SC cited Sec. 8 of PD 463 which no longer requires concurrence by the National Assembly declaration of
President and DENR can only recommend to the President the withdrawal of forest reserves, Court declared
DAO 166 as null and void, since DENR Secretary has no power to convert forest reserves to non-forest
reserves;
Issue#3

-The issue on the priority right over the disputed area is deemed overtaken by the above subsequent
developments particularly with the issuance of Proclamation 297 and DAO No. 2002-18, which is
constitutionally sanctioned. State has the full control on the mining operation of the area, Executive Branch's
prerogative includes either direct operation or enter agreements or award mining operations to entities.