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G.R. No.

L-24670 December 14, 1979


ORTIGAS & CO., LIMITED PARTNERSHIP, plaintiff-appellant,
vs.
FEATI BANK AND TRUST CO., defendant-appellee.
Ramirez & Ortigas for appellant.
Taada, Teehankee & Carreon for appellee.

SANTOS, J .:
An appeal interposed on June 23, 1965 by plaintiff-appellant, Ortigas & Co., Limited Partnership, from the decision of the Court
of First Instance of Rizal, Branch VI, at Pasig, Hon. Andres Reyes presiding, which dismissed its complaint in Civil Case No.
7706, entitled, "Ortigas & Company, Limited Partnership, plaintiff, v. Feati Bank and Trust Company, defendant," for lack of
merit.
The following facts a reproduction of the lower court's findings, which, in turn, are based on a stipulation of facts entered into
by the parties are not disputed. Plaintiff (formerly known as "Ortigas, Madrigal y Cia") is a limited partnership and defendant
Feati Bank and Trust Co., is a corporation duly organized and existing in accordance with the laws of the Philippines. Plaintiff is
engaged in real estate business, developing and selling lots to the public, particularly the Highway Hills Subdivision along
Epifanio de los Santos Avenue, Mandaluyong, Rizal.
1

On March 4, 1952, plaintiff, as vendor, and Augusto Padilla y Angeles and Natividad Angeles, as vendees, entered into separate
agreements of sale on installments over two parcels of land, known as Lots Nos. 5 and 6, Block 31, of the Highway Hills
Subdivision, situated at Mandaluyong, Rizal. On July 19, 1962, the said vendees transferred their rights and interests over the
aforesaid lots in favor of one Emma Chavez. Upon completion of payment of the purchase price, the plaintiff executed the
corresponding deeds of sale in favor of Emma Chavez. Both the agreements (of sale on installment) and the deeds of sale
contained the stipulations or restrictions that:
1. The parcel of land subject of this deed of sale shall be used the Buyer exclusively for residential purposes,
and she shall not be entitled to take or remove soil, stones or gravel from it or any other lots belonging to the
Seller.
2. All buildings and other improvements (except the fence) which may be constructed at any time in said lot
must be, (a) of strong materials and properly painted, (b) provided with modern sanitary installations connected
either to the public sewer or to an approved septic tank, and (c) shall not be at a distance of less than two (2)
meters from its boundary lines.
2

The above restrictions were later annotated in TCT Nos. 101509 and 101511 of the Register of Deeds of Rizal, covering the said
lots and issued in the name of Emma Chavez.
3

Eventually, defendant-appellee acquired Lots Nos. 5 and 6, with TCT Nos. 101613 and 106092 issued in its name, respectively
and the building restrictions were also annotated therein.
4
Defendant-appellee bought Lot No. 5 directly from Emma Chavez,
"free from all liens and encumbrances as stated in Annex 'D',
5
while Lot No. 6 was acquired from Republic Flour Mills through a
"Deed of Exchange," Annex "E".
6
TCT No. 101719 in the name of Republic Flour Mills likewise contained the same restrictions,
although defendant-appellee claims that Republic Flour Mills purchased the said Lot No. 6 "in good faith. free from all liens and
encumbrances," as stated in the Deed of Sale, Annex "F"
7
between it and Emma Chavez.
Plaintiff-appellant claims that the restrictions annotated on TCT Nos. 101509, 101511, 101719, 101613, and 106092 were
imposed as part of its general building scheme designed for the beautification and development of the Highway Hills Subdivision
which forms part of the big landed estate of plaintiff-appellant where commercial and industrial sites are also designated or
established.
8

Defendant-appellee, upon the other hand, maintains that the area along the western part of Epifanio de los Santos Avenue
(EDSA) from Shaw Boulevard to Pasig River, has been declared a commercial and industrial zone, per Resolution No. 27, dated
February 4, 1960 of the Municipal Council of Mandaluyong, Rizal.
9
It alleges that plaintiff-appellant 'completely sold and
transferred to third persons all lots in said subdivision facing Epifanio de los Santos Avenue"
10
and the subject lots thereunder
were acquired by it "only on July 23, 1962 or more than two (2) years after the area ... had been declared a commercial and
industrial zone ...
11

On or about May 5, 1963, defendant-appellee began laying the foundation and commenced the construction of a building on
Lots Nos. 5 and 6, to be devoted to banking purposes, but which defendant-appellee claims could also be devoted to, and used
exclusively for, residential purposes. The following day, plaintiff-appellant demanded in writing that defendant-appellee stop the
construction of the commerical building on the said lots. The latter refused to comply with the demand, contending that the
building was being constructed in accordance with the zoning regulations, defendant-appellee having filed building and planning
permit applications with the Municipality of Mandaluyong, and it had accordingly obtained building and planning permits to
proceed with the construction.
12

On the basis of the foregoing facts, Civil Case No. 7706, supra, was submitted in the lower court for decision. The complaint
sought, among other things, the issuance of "a writ of preliminary injunction ... restraining and enjoining defendant, its agents,
assigns, and those acting on its or their behalf from continuing or completing the construction of a commercial bank building in
the premises ... involved, with the view to commanding the defendant to observe and comply with the building restrictions
annotated in the defendant's transfer certificate of title."
In deciding the said case, the trial court considered, as the fundamental issue, whether or not the resolution of the Municipal
Council of Mandaluyong declaring Lots Nos. 5 and 6, among others, as part of the commercial and industrial zone of the
municipality, prevailed over the building restrictions imposed by plaintiff-appellant on the lots in question.
13
The records do not
show that a writ of preliminary injunction was issued.
The trial court upheld the defendant-appellee and dismissed the complaint, holding that the subject restrictions were subordinate
to Municipal Resolution No. 27, supra. It predicated its conclusion on the exercise of police power of the said municipality, and
stressed that private interest should "bow down to general interest and welfare. " In short, it upheld the classification by the
Municipal Council of the area along Epifanio de los Santos Avenue as a commercial and industrial zone, and held that the same
rendered "ineffective and unenforceable" the restrictions in question as against defendant-appellee.
14
The trial court decision
further emphasized that it "assumes said resolution to be valid, considering that there is no issue raised by either of the parties
as to whether the same is null and void.
15

On March 2, 1965, plaintiff-appellant filed a motion for reconsideration of the above decision,
16
which motion was opposed by
defendant-appellee on March 17, 1965.
17
It averred, among others, in the motion for reconsideration that defendant- appellee
"was duty bound to comply with the conditions of the contract of sale in its favor, which conditions were duly annotated in the
Transfer Certificates of Title issued in her (Emma Chavez) favor." It also invited the trial court's attention to its claim that the
Municipal Council had (no) power to nullify the contractual obligations assumed by the defendant corporation."
18

The trial court denied the motion for reconsideration in its order of March 26, 1965.
19

On April 2, 1965 plaintiff-appellant filed its notice of appeal from the decision dismissing the complaint and from the order of
March 26, 1965 denying the motion for reconsideration, its record on appeal, and a cash appeal bond."
20
On April 14, the appeal
was given due course
21
and the records of the case were elevated directly to this Court, since only questions of law are
raised.
22

Plaintiff-appellant alleges in its brief that the trial court erred
I. When it sustained the view that Resolution No. 27, series of 1960 of the Municipal Council of Mandaluyong,
Rizal declaring Lots Nos. 5 and 6, among others, as part of the commercial and industrial zone, is valid because
it did so in the exercise of its police power; and
II. When it failed to consider whether or not the Municipal Council had the power to nullify the contractual
obligations assumed by defendant-appellee and when it did not make a finding that the building was erected
along the property line, when it should have been erected two meters away from said property line.
23

The defendant-appellee submitted its counter-assignment of errors. In this connection, We already had occasion to hold
in Relativo v. Castro
24
that "(I)t is not incumbent on the appellee, who occupies a purely defensive position, and is seeking no
affirmative relief, to make assignments of error, "
The only issues to be resolved, therefore, are: (1) whether Resolution No. 27 s-1960 is a valid exercise of police power; and (2)
whether the said Resolution can nullify or supersede the contractual obligations assumed by defendant-appellee.
1. The contention that the trial court erred in sustaining the validity of Resolution No. 27 as an exercise of police power is without
merit. In the first place, the validity of the said resolution was never questioned before it. The rule is that the question of law or of
fact which may be included in the appellant's assignment of errors must be those which have been raised in the court below, and
are within the issues framed by the parties.
25
The object of requiring the parties to present all questions and issues to the lower
court before they can be presented to the appellate court is to enable the lower court to pass thereon, so that the appellate court
upon appeal may determine whether or not such ruling was erroneous. The requirement is in furtherance of justice in that the
other party may not be taken by surprise.
26
The rule against the practice of blowing "hot and cold" by assuming one position in
the trial court and another on appeal will, in the words of Elliot, prevent deception.
27
For it is well-settled that issues or defenses
not raised
28
or properly litigated
29
or pleaded
30
in the Court below cannot be raised or entertained on appeal.
In this particular case, the validity of the resolution was admitted at least impliedly, in the stipulation of facts below. when plaintiff-
appellant did not dispute the same. The only controversy then as stated by the trial court was whether or not the resolution of the
Municipal Council of Mandaluyong ... which declared lots Nos. 4 and 5 among others, as a part of the commercial and industrial
zone of the municipality, prevails over the restrictions constituting as encumbrances on the lots in question.
31
Having admitted
the validity of the subject resolution below, even if impliedly, plaintiff-appellant cannot now change its position on appeal.
But, assuming arguendo that it is not yet too late in the day for plaintiff-appellant to raise the issue of the invalidity of the
municipal resolution in question, We are of the opinion that its posture is unsustainable. Section 3 of R.A. No. 2264, otherwise
known as the Local Autonomy Act,"
32
empowers a Municipal Council "to adopt zoning and subdivision ordinances
or regulations";
33
for the municipality. Clearly, the law does not restrict the exercise of the power through an ordinance.
Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is a regulatory measure within the intendment or ambit
of the word "regulation" under the provision. As a matter of fact the same section declares that the power exists "(A)ny provision
of law to the contrary notwithstanding ... "
An examination of Section 12 of the same law
34
which prescribes the rules for its interpretation likewise reveals that the implied
power of a municipality should be "liberally construed in its favor" and that "(A)ny fair and reasonable doubt as to the existence
of the power should be interpreted in favor of the local government and it shall be presumed to exist." The same section further
mandates that the general welfare clause be liberally interpreted in case of doubt, so as to give more power to local
governments in promoting the economic conditions, social welfare and material progress of the people in the community. The
only exceptions under Section 12 are existing vested rights arising out of a contract between "a province, city or municipality on
one hand and a third party on the other," in which case the original terms and provisions of the contract should govern. The
exceptions, clearly, do not apply in the case at bar.
2. With regard to the contention that said resolution cannot nullify the contractual obligations assumed by the defendant-appellee
referring to the restrictions incorporated in the deeds of sale and later in the corresponding Transfer Certificates of Title issued
to defendant-appellee it should be stressed, that while non-impairment of contracts is constitutionally guaranteed, the rule is
not absolute, since it has to be reconciled with the legitimate exercise of police power, i.e., "the power to prescribe regulations to
promote the health, morals, peace, education, good order or safety and general welfare of the people.
35
Invariably described as
"the most essential, insistent, and illimitable of powers"
36
and "in a sense, the greatest and most powerful attribute of
government,
37
the exercise of the power may be judicially inquired into and corrected only if it is capricious, 'whimsical, unjust or
unreasonable, there having been a denial of due process or a violation of any other applicable constitutional guarantee.
38
As
this Court held through Justice Jose P. Bengzon in Philippine Long Distance Company vs. City of Davao, et al.
39
police power
"is elastic and must be responsive to various social conditions; it is not, confined within narrow circumscriptions of precedents
resting on past conditions; it must follow the legal progress of a democratic way of life." We were even more emphatic in Vda. de
Genuino vs. The Court of Agrarian Relations, et al.,
40
when We declared: "We do not see why public welfare when clashing with
the individual right to property should not be made to prevail through the state's exercise of its police power.
Resolution No. 27, s-1960 declaring the western part of highway 54, now E. de los Santos Avenue (EDSA, for short) from Shaw
Boulevard to the Pasig River as an industrial and commercial zone, was obviously passed by the Municipal Council of
Mandaluyong, Rizal in the exercise of police power to safeguard or promote the health, safety, peace, good order and general
welfare of the people in the locality, Judicial notice may be taken of the conditions prevailing in the area, especially where lots
Nos. 5 and 6 are located. The lots themselves not only front the highway; industrial and commercial complexes have flourished
about the place. EDSA, a main traffic artery which runs through several cities and municipalities in the Metro Manila area,
supports an endless stream of traffic and the resulting activity, noise and pollution are hardly conducive to the health, safety or
welfare of the residents in its route. Having been expressly granted the power to adopt zoning and subdivision ordinances or
regulations, the municipality of Mandaluyong, through its Municipal 'council, was reasonably, if not perfectly, justified under the
circumstances, in passing the subject resolution.
The scope of police power keeps expanding as civilization advances, stressed this Court, speaking thru Justice Laurel in the
leading case of Calalang v. Williams et al.,
41
Thus-
As was said in the case of Dobbins v. Los Angeles (195 US 223, 238 49 L. ed. 169), 'the right to exercise the
police power is a continuing one, and a business lawful today may in the future, because of changed situation,
the growth of population or other causes, become a menace to the public health and welfare, and be required to
yield to the public good.' And in People v. Pomar (46 Phil. 440), it was observed that 'advancing civilization is
bringing within the scope of police power of the state today things which were not thought of as being with in
such power yesterday. The development of civilization), the rapidly increasing population, the growth of public
opinion, with an increasing desire on the part of the masses and of the government to look after and care for the
interests of the individuals of the state, have brought within the police power many questions for regulation
which formerly were not so considered.
42
(Emphasis, supplied.)
Thus, the state, in order to promote the general welfare, may interfere with personal liberty, with property, and with business and
occupations. Persons may be subjected to all kinds of restraints and burdens, in order to secure the general comfort health and
prosperity of the state
43
and to this fundamental aim of our Government, the rights of the individual are subordinated.
44

The need for reconciling the non-impairment clause of the Constitution and the valid exercise of police power may also be
gleaned from Helvering v. Davis
45
wherein Mr. Justice Cardozo, speaking for the Court, resolved the conflict "between one
welfare and another, between particular and general, thus
Nor is the concept of the general welfare static. Needs that were narrow or parochial a century ago may be
interwoven in our day with the well-being of the nation What is critical or urgent changes with the times.
46

The motives behind the passage of the questioned resolution being reasonable, and it being a " legitimate response to a felt
public need,"
47
not whimsical or oppressive, the non-impairment of contracts clause of the Constitution will not bar the
municipality's proper exercise of the power. Now Chief Justice Fernando puts it aptly when he declared: "Police power legislation
then is not likely to succumb to the challenge that thereby contractual rights are rendered nugatory."
48

Furthermore, We restated in Philippine American Life Ins. Co. v. Auditor General
49
that laws and reservation of essential
attributes of sovereign power are read into contracts agreed upon by the parties. Thus
Not only are existing laws read into contracts in order to fix obligations as between the parties, but the
reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order.
The policy of protecting contracts against impairments presupposes the maintenance of a government by virtue
of which contractual relations are worthwhile a government which retains adequate authority to secure the
peace and good order of society.
Again, We held in Liberation Steamship Co., Inc. v. Court of Industrial Relations,
50
through Justice J.B.L. Reyes, that ... the law
forms part of, and is read into, every contract, unless clearly excluded therefrom in those cases where such exclusion is
allowed." The decision in Maritime Company of the Philippines v. Reparations Commission,
51
written for the Court by Justice
Fernando, now Chief Justice, restates the rule.
One last observation. Appellant has placed unqualified reliance on American jurisprudence and authorities
52
to bolster its theory
that the municipal resolution in question cannot nullify or supersede the agreement of the parties embodied in the sales contract,
as that, it claims, would impair the obligation of contracts in violation of the Constitution. Such reliance is misplaced.
In the first place, the views set forth in American decisions and authorities are not per se controlling in the Philippines, the laws
of which must necessarily be construed in accordance with the intention of its own lawmakers and such intent may be deduced
from the language of each law and the context of other local legislation related thereto.
53
and Burgess, et al v. Magarian, et
al.,
55
two Of the cases cited by plaintiff-appellant, lend support to the conclusion reached by the trial court, i.e. that the municipal
resolution supersedes/supervenes over the contractual undertaking between the parties. Dolan v. Brown, states that "Equity will
not, as a rule, enforce a restriction upon the use of property by injunction where the property has so changed in character and
environment as to make it unfit or unprofitable for use should the restriction be enforced, but will, in such a case, leave the
complainant to whatever remedy he may have at law.
56
(Emphasis supplied.) Hence, the remedy of injunction in Dolan vs.
Brown was denied on the specific holding that "A grantor may lawfully insert in his deed conditions or restrictions which are not
against public policy and do not materially impair the beneficial enjoyment of the estate.
57
Applying the principle just stated to
the present controversy, We can say that since it is now unprofitable, nay a hazard to the health and comfort, to use Lots Nos. 5
and 6 for strictly residential purposes, defendants- appellees should be permitted, on the strength of the resolution promulgated
under the police power of the municipality, to use the same for commercial purposes. In Burgess v. Magarian et al. it was, held
that "restrictive covenants running with the land are binding on all subsequent purchasers ... " However, Section 23 of the zoning
ordinance involved therein contained a proviso expressly declaring that the ordinance was not intended "to interfere with or
abrogate or annul any easements, covenants or other agreement between parties."
58
In the case at bar, no such proviso is
found in the subject resolution.
It is, therefore, clear that even if the subject building restrictions were assumed by the defendant-appellee as vendee of Lots
Nos. 5 and 6, in the corresponding deeds of sale, and later, in Transfer Certificates of Title Nos. 101613 and 106092, the
contractual obligations so assumed cannot prevail over Resolution No. 27, of the Municipality of Mandaluyong, which has validly
exercised its police power through the said resolution. Accordingly, the building restrictions, which declare Lots Nos. 5 and 6 as
residential, cannot be enforced.
IN VIEW OF THE FOREGOING, the decision appealed from, dismissing the complaint, is hereby AFFIRMED. "without
pronouncement as to costs.
SO ORDERED.

Makasiar, Antonio, Concepcion, Jr., Fernandez, Guerrero, De Castro and Melencio-Herrera, JJ., concur.
Teehankee * and Aquino,JJ., took no part.
Separate Opinions

BARREDO, J ., concurring:
I hold it is a matter of public knowledge that the place in question is commercial. It would be worse if the same were to be left as
residential and all around are already commercial.
FERNANDO, C.J ., concurring:
The exhaustive and lucid opinion of the Court penned by Justice Guillermo S. Santos commends itself for approval. I feel no
hesitancy, therefore, in yielding concurrence, The observation, however, in the dissent of Justice Vicente Abad Santos relati ve to
restrictive covenants calls, to my mind, for further reflection as to the respect to which they are entitled whenever police power
legislation, whether on the national or local level, is assailed. Before doing so, however, it may not be amiss to consider further
the effect of such all-embracing attribute on existing contracts.
1. Reference was made in the opinion of the Court to Philippine American Life Insurance Company v. Auditor
General.
1
The ponente in that case was Justice Sanchez. A concurrence came from me. It contained this qualification: "It
cannot be said, without rendering nugatory the constitutional guarantee of non-impairment, and for that matter both the equal
protection and due process clauses which equally serve to protect property rights, that at the mere invocation of the police
power, the objection on non-impairment grounds automatically loses force. Here, as in other cases where governmental
authority may trench upon property rights, the process of balancing, adjustment or harmonization is called for.
2
After referring to
three leading United States Supreme Court decisions, Home Building and Loan Association v. Blaisdell,
3
Nebbia v. New
York,
4
and Norman v. Baltimore and Ohio Railroad Co.,
5
I stated: "All of the above decisions reflect the view that an enactment
of a police power measure does not per se call for the overruling of objections based on either due process or non-impairment
based on either due process or non-impairment grounds. There must be that balancing, or adjustment, or harmonization of the
conflicting claims posed by an exercise of state regulatory power on the one hand and assertion of rights to property, whether of
natural or of juridical persons, on the other. 'That is the only way by which the constitutional guarantees may serve the high ends
that call for their inclusion in the Constitution and thus effectively preclude ally abusive exercise of governmental authority."
6
Nor
did my concurrence stop there: "In the opinion of the Blaisdell case, penned by the then Chief Justice Hughes, there was this
understandable stress on balancing or harmonizing, which is called for in litigations of this character: 'The policy of protecting
contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are
worthwhile a government which retains adequate authority to secure the peace and good order of society. This principle of
harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the
decisions of this Court.' Also to the same effect: 'Undoubtedly, whatever is reserved of state power must be consistent with the
fair intent of the constitutional limitation of that power. The reserve power cannot be construed so as to destroy the limitation, nor
is the limitation to be construed to destroy the reserved power in its essential aspects. 'They must be construed in harmony with
each other. This principle precludes a construction which would permit the State to adopt as its policy the repudiation of debts or
the destruction of contracts or the denial of means to enforce them. But it does not follow that conditions may not arise in which
a temporary restraint of enforcement may be consistent with the spirit and purpose of the constitutional provision and thus be
found to be within the range of the reserved power of the State to protect the vital interests of the community.' Further on, Chief
Justice Hughes likewise stated: 'It is manifest from this review of our decisions that there has been a growing appreciation of
public needs and of the necessity of finding ground for a rational compromise between individual rights and public welfare.
"
7
This is the concluding paragraph of my concurrence in the Philippine American Life Insurance Co. case: "If emphasis be
therefore laid, as this concurring opinion does, on the pressing and inescapable need for such an approach whenever a possibl e
collision between state authority and an assertion of constitutional right to property may exist, it is not to depart from what sound
constitutional orthodoxy dictates. It is rather to abide by what is compels. In litigations of this character then, perhaps much more
so than in other disputes, where there is a reliance on a constitutional provision, the judiciary cannot escape what Holmes fitly
referred to as the sovereign prerogative of choice, the exercise of which might possibly be impugned if there be no attempt,
however slight, at such an effort of adjusting or reconciling the respective claims of state regulatory power and constitutionally
protected rights."
8

I adhere to such a view. This is not to say that there is a departure therefrom in the able and scholarly opinion of Justice Santos.
It is merely to stress what to my mind is a fundamental postulate of our Constitution. The only point I would wish to add is that in
the process of such balancing and adjustment, the present Constitution, the Philippine American Life Insurance Co. decision
having been promulgated under the 1935 Charter, leaves no doubt that the claim to property rights based on the non-impairment
clause has a lesser weight. For as explicitly provided by our present fundamental law: "The State shall promote social Justice to
ensure the dignity, welfare, and security of all the people. Towards this end, the
State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse
property ownership and profits.
9

2. Now as to restrictive convenants, accurately included by Hart and Sacks under the category of "private directive
arrangements. "
10
Through them people are enable to agree on how to order their affairs. They could be utilized to govern their
affairs. They could be utilized to govern their future conduct. It is a well-known fact that the common law relies to a great extent
on such private directive arrangements to attain a desirable social condition. More specifically, such covenants are an important
means of ordering one aspect of property relationships. Through them, there could be delimitation of land use rights. It is quite
understandable why the law should ordinarily accord them deference, It does so, it has been said, both on grounds of morality
and utility. Nonetheless, there are limits to the literal enforcement of their terms. To the extent that they ignore technological or
economic progress, they are not automatically entitled to judicial protection. Clearly, they must "speak from one point of time to
another."
11
The parties, like all mortal, do not have the power of predicting the future with unfailing certainty. In cases therefore
where societal welfare calls for police power legislation, the parties adversely affected should realize that arrangements dealing
with property rights are not impressed with sanctity. That approach, in my view, was the guiding principle of the opinion of the
Court. f fence my full and entire concurrence.
ABAD SANTOS, J :, dissenting:
Although Resolution No. 27, series of 1960, of the Municipal Council of Mandaluyong, Rizal, is valid until otherwise declared, I
do not believe that its enactment was by virtue of the police power of that municipality. I do not here dispute the concept of police
power as stated in Primicias vs. Fugoso, 80 Phil. 77 (1948) for as a matter of fact I accept it. And I agree also that it is elastic
and must be responsive to various social conditions, etc. as ruled in PLDT vs. City of Davao, L-23080, Oct. 26, 1965, 15 SCRA
244. But Resolution No. 27, cannot be described as promotive of the health, morals, peace, education, good order or safety and
general welfare of the people of Mandaluyong. On the contrary, its effect is the opposite. For the serenity, peace and quite of a
residential section would by the resolution be replaced by the chaos, turmoil and frenzy of commerce and industry. Where there
would be no industrial and noise pollution these bane of so-called progress would now pervade and suffocate the environment to
the detriment of the ecology. To characterize the ordinance as an exercise of police power would be retrogressive. It will set
back all the efforts of the Ministry of Human Settlements to improve the quality of life especially in Metro Manila. It will make
Metro Manila, not the city of man as envisioned by its Governor but a city of commerce and industry.
Considering, therefore, that Resolution No, 2-1 was not enacted in the legitimate exercise of police power, it cannot impair the
restrictive covenants which go with the lands that were sold by the plaintiff-appellant. I vote for the reversal of the appealed
decision.

# Separate Opinions
BARREDO, J ., concurring:
I hold it is a matter of public knowledge that the place in question is commercial. It would be worse if the same were to be left as
residential and all around are already commercial.
FERNANDO, C.J ., concurring:
The exhaustive and lucid opinion of the Court penned by Justice Guillermo S. Santos commends itself for approval. I feel no
hesitancy, therefore, in yielding concurrence, The observation, however, in the dissent of Justice Vicente Abad Santos relative to
restrictive covenants calls, to my mind, for further reflection as to the respect to which they are entitled whenever police power
legislation, whether on the national or local level, is assailed. Before doing so, however, it may not be amiss to consider further
the effect of such all-embracing attribute on existing contracts.
1. Reference was made in the opinion of the Court to Philippine American Life Insurance Company v. Auditor
General.
1
The ponente in that case was Justice Sanchez. A concurrence came from me. It contained this qualification: "It
cannot be said, without rendering nugatory the constitutional guarantee of non-impairment, and for that matter both the equal
protection and due process clauses which equally serve to protect property rights, that at the mere invocation of the police
power, the objection on non-impairment grounds automatically loses force. Here, as in other cases where governmental
authority may trench upon property rights, the process of balancing, adjustment or harmonization is called for.
2
After referring to
three leading United States Supreme Court decisions, Home Building and Loan Association v. Blaisdell,
3
Nebbia v. New
York,
4
and Norman v. Baltimore and Ohio Railroad Co.,
5
I stated: "All of the above decisions reflect the view that an enactment
of a police power measure does not per se call for the overruling of objections based on either due process or non-impairment
based on either due process or non-impairment grounds. There must be that balancing, or adjustment, or harmonization of the
conflicting claims posed by an exercise of state regulatory power on the one hand and assertion of rights to property, whether of
natural or of juridical persons, on the other. 'That is the only way by which the constitutional guarantees may serve the high ends
that call for their inclusion in the Constitution and thus effectively preclude ally abusive exercise of governmental authority."
6
Nor
did my concurrence stop there: "In the opinion of the Blaisdell case, penned by the then Chief Justice Hughes, there was this
understandable stress on balancing or harmonizing, which is called for in litigations of this character: 'The policy of protecting
contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are
worthwhile a government which retains adequate authority to secure the peace and good order of society. This principle of
harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the
decisions of this Court.' Also to the same effect: 'Undoubtedly, whatever is reserved of state power must be consistent with the
fair intent of the constitutional limitation of that power. The reserve power cannot be construed so as to destroy the limitation, nor
is the limitation to be construed to destroy the reserved power in its essential aspects. 'They must be construed in harmony with
each other. This principle precludes a construction which would permit the State to adopt as its policy the repudiation of debts or
the destruction of contracts or the denial of means to enforce them. But it does not follow that conditions may not arise in which
a temporary restraint of enforcement may be consistent with the spirit and purpose of the constitutional provision and thus be
found to be within the range of the reserved power of the State to protect the vital interests of the community.' Further on, Chief
Justice Hughes likewise stated: 'It is manifest from this review of our decisions that there has been a growing appreciation of
public needs and of the necessity of finding ground for a rational compromise between individual rights and public welfare.
"
7
This is the concluding paragraph of my concurrence in the Philippine American Life Insurance Co. case: "If emphasis be
therefore laid, as this concurring opinion does, on the pressing and inescapable need for such an approach whenever a possibl e
collision between state authority and an assertion of constitutional right to property may exist, it is not to depart from what sound
constitutional orthodoxy dictates. It is rather to abide by what is compels. In litigations of this character then, perhaps much more
so than in other disputes, where there is a reliance on a constitutional provision, the judiciary cannot escape what Holmes fitly
referred to as the sovereign prerogative of choice, the exercise of which might possibly be impugned if there be no attempt,
however slight, at such an effort of adjusting or reconciling the respective claims of state regulatory power and constitutionally
protected rights."
8

I adhere to such a view. This is not to say that there is a departure therefrom in the able and scholarly opinion of Justice Santos.
It is merely to stress what to my mind is a fundamental postulate of our Constitution. The only point I would wish to add is that in
the process of such balancing and adjustment, the present Constitution, the Philippine American Life Insurance Co. decision
having been promulgated under the 1935 Charter, leaves no doubt that the claim to property rights based on the non-impairment
clause has a lesser weight. For as explicitly provided by our present fundamental law: "The State shall promote social Justice to
ensure the dignity, welfare, and security of all the people. Towards this end, the
State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse
property ownership and profits.
9

2. Now as to restrictive convenants, accurately included by Hart and Sacks under the category of "private directive
arrangements. "
10
Through them people are enable to agree on how to order their affairs. They could be utilized to govern their
affairs. They could be utilized to govern their future conduct. It is a well-known fact that the common law relies to a great extent
on such private directive arrangements to attain a desirable social condition. More specifically, such covenants are an important
means of ordering one aspect of property relationships. Through them, there could be delimitation of land use rights. It is quite
understandable why the law should ordinarily accord them deference, It does so, it has been said, both on grounds of morality
and utility. Nonetheless, there are limits to the literal enforcement of their terms. To the extent that they ignore technological or
economic progress, they are not automatically entitled to judicial protection. Clearly, they must "speak from one point of time to
another."
11
The parties, like all mortal, do not have the power of predicting the future with unfailing certainty. In cases therefore
where societal welfare calls for police power legislation, the parties adversely affected should realize that arrangements dealing
with property rights are not impressed with sanctity. That approach, in my view, was the guiding principle of the opinion of the
Court. f fence my full and entire concurrence.
ABAD SANTOS, J :, dissenting:
Although Resolution No. 27, series of 1960, of the Municipal Council of Mandaluyong, Rizal, is valid until otherwise declared, I
do not believe that its enactment was by virtue of the police power of that municipality. I do not here dispute the concept of police
power as stated in Primicias vs. Fugoso, 80 Phil. 77 (1948) for as a matter of fact I accept it. And I agree also that it is elastic
and must be responsive to various social conditions, etc. as ruled in PLDT vs. City of Davao, L-23080, Oct. 26, 1965, 15 SCRA
244. But Resolution No. 27, cannot be described as promotive of the health, morals, peace, education, good order or safety and
general welfare of the people of Mandaluyong. On the contrary, its effect is the opposite. For the serenity, peace and quite of a
residential section would by the resolution be replaced by the chaos, turmoil and frenzy of commerce and industry. Where there
would be no industrial and noise pollution these bane of so-called progress would now pervade and suffocate the environment to
the detriment of the ecology. To characterize the ordinance as an exercise of police power would be retrogressive. It will set
back all the efforts of the Ministry of Human Settlements to improve the quality of life especially in Metro Manila. It will make
Metro Manila, not the city of man as envisioned by its Governor but a city of commerce and industry.
Considering, therefore, that Resolution No, 2-1 was not enacted in the legitimate exercise of police power, it cannot impair the
restrictive covenants which go with the lands that were sold by the plaintiff-appellant. I vote for the reversal of the appealed
decision.

G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and represented by their parents
ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor, represented by her parents CALVIN and
ROBERTA SADIUA, CARLO, AMANDA SALUD and PATRISHA, all surnamed FLORES, minors and represented by their
parents ENRICO and NIDA FLORES, GIANINA DITA R. FORTUN, minor, represented by her parents SIGRID and
DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and represented by their parents
GEORGE and MYRA MISA, BENJAMIN ALAN V. PESIGAN, minor, represented by his parents ANTONIO and ALICE
PESIGAN, JOVIE MARIE ALFARO, minor, represented by her parents JOSE and MARIA VIOLETA ALFARO, MARIA
CONCEPCION T. CASTRO, minor, represented by her parents FREDENIL and JANE CASTRO, JOHANNA
DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor,
represented by his parents GREGORIO II and CRISTINE CHARITY NARVASA, MA. MARGARITA, JESUS IGNACIO, MA.
ANGELA and MARIE GABRIELLE, all surnamed SAENZ, minors, represented by their parents ROBERTO and AURORA
SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING, minors, represented by
their parents MARIO and HAYDEE KING, DAVID, FRANCISCO and THERESE VICTORIA, all surnamed ENDRIGA,
minors, represented by their parents BALTAZAR and TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed
ABAYA, minors, represented by their parents ANTONIO and MARICA ABAYA, MARILIN, MARIO, JR. and MARIETTE, all
surnamed CARDAMA, minors, represented by their parents MARIO and LINA CARDAMA, CLARISSA, ANN MARIE,
NAGEL, and IMEE LYN, all surnamed OPOSA, minors and represented by their parents RICARDO and MARISSA
OPOSA, PHILIP JOSEPH, STEPHEN JOHN and ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their
parents JOSE MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and FRANCISCO, all surnamed
BIBAL, minors, represented by their parents FRANCISCO, JR. and MILAGROS BIBAL, and THE PHILIPPINE
ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the Department of Environment
and Natural Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of the RTC, Makati, Branch
66, respondents.
Oposa Law Office for petitioners.
The Solicitor General for respondents.

DAVIDE, JR., J .:
In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the petitioners
dramatically associate with the twin concepts of "inter-generational responsibility" and "inter-generational justice." Specifically, it
touches on the issue of whether the said petitioners have a cause of action to "prevent the misappropriation or impairment" of
Philippine rainforests and "arrest the unabated hemorrhage of the country's vital life support systems and continued rape of
Mother Earth."
The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro Manila) of the Regional
Trial Court (RTC),
National
Capital Judicial Region. The principal plaintiffs therein, now the principal petitioners, are all minors duly represented and joined
by their respective parents. Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic,
non-stock and non-profit corporation organized for the purpose of, inter alia, engaging in concerted action geared for the
protection of our environment and natural resources. The original defendant was the Honorable Fulgencio S. Factoran, Jr., then
Secretary of the Department of Environment and Natural Resources (DENR). His substitution in this petition by the new
Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion by the petitioners.
1
The
complaint
2
was instituted as a taxpayers' class suit
3
and alleges that the plaintiffs "are all citizens of the Republic of the
Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of the natural resource treasure that is the country's
virgin tropical forests." The same was filed for themselves and others who are equally concerned about the preservation of said
resource but are "so numerous that it is impracticable to bring them all before the Court." The minors further asseverate that they
"represent their generation as well as generations yet unborn."
4
Consequently, it is prayed for that judgment be rendered:
. . . ordering defendant, his agents, representatives and other persons acting in his behalf to
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements.
and granting the plaintiffs ". . . such other reliefs just and equitable under the premises."
5

The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area of thirty
million (30,000,000) hectares and is endowed with rich, lush and verdant rainforests in which varied, rare and unique species of
flora and fauna may be found; these rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are
also the habitat of indigenous Philippine cultures which have existed, endured and flourished since time immemorial; scientific
evidence reveals that in order to maintain a balanced and healthful ecology, the country's land area should be utilized on the
basis of a ratio of fifty-four per cent (54%) for forest cover and forty-six per cent (46%) for agricultural, residential, industrial,
commercial and other uses; the distortion and disturbance of this balance as a consequence of deforestation have resulted in a
host of environmental tragedies, such as (a) water shortages resulting from drying up of the water table, otherwise known as the
"aquifer," as well as of rivers, brooks and streams, (b) salinization of the water table as a result of the intrusion therein of salt
water, incontrovertible examples of which may be found in the island of Cebu and the Municipality of Bacoor, Cavite, (c) massive
erosion and the consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded estimated at one
billion (1,000,000,000) cubic meters per annum approximately the size of the entire island of Catanduanes, (d) the
endangering and extinction of the country's unique, rare and varied flora and fauna, (e) the disturbance and dislocation of
cultural communities, including the disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds and
consequential destruction of corals and other aquatic life leading to a critical reduction in marine resource productivity, (g)
recurrent spells of drought as is presently experienced by the entire country, (h) increasing velocity of typhoon winds which
result from the absence of windbreakers, (i) the floodings of lowlands and agricultural plains arising from the absence of the
absorbent mechanism of forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams constructed and
operated for the purpose of supplying water for domestic uses, irrigation and the generation of electric power, and (k) the
reduction of the earth's capacity to process carbon dioxide gases which has led to perplexing and catastrophic climatic changes
such as the phenomenon of global warming, otherwise known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation are so capable of
unquestionable demonstration that the same may be submitted as a matter of judicial notice. This notwithstanding, they
expressed their intention to present expert witnesses as well as documentary, photographic and film evidence in the course of
the trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing allegations.
8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests constituting
roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of said rainforests
or four per cent (4.0%) of the country's land area.
10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left, barely
2.8% of the entire land mass of the Philippine archipelago and about 3.0 million hectares of immature and
uneconomical secondary growth forests.
11. Public records reveal that the defendant's, predecessors have granted timber license agreements ('TLA's') to
various corporations to cut the aggregate area of 3.89 million hectares for commercial logging purposes.
A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A".
12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per hour
nighttime, Saturdays, Sundays and holidays included the Philippines will be bereft of forest resources after
the end of this ensuing decade, if not earlier.
13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this continued
trend of deforestation to the plaintiff minor's generation and to generations yet unborn are evident and
incontrovertible. As a matter of fact, the environmental damages enumerated in paragraph 6 hereof are already
being felt, experienced and suffered by the generation of plaintiff adults.
14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest stands will
work great damage and irreparable injury to plaintiffs especially plaintiff minors and their successors who
may never see, use, benefit from and enjoy this rare and unique natural resource treasure.
This act of defendant constitutes a misappropriation and/or impairment of the natural resource property he holds
in trust for the benefit of plaintiff minors and succeeding generations.
15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are entitled to
protection by the State in its capacity as the parens patriae.
16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2, 1990, plaintiffs
served upon defendant a final demand to cancel all logging permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".
17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious damage and
extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights of
plaintiffs, especially plaintiff minors who may be left with a country that is desertified (sic), bare, barren and
devoid of the wonderful flora, fauna and indigenous cultures which the Philippines had been abundantly blessed
with.
19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy enunciated
in the Philippine Environmental Policy which, in pertinent part, states that it is the policy of the State
(a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive
and enjoyable harmony with each other;
(b) to fulfill the social, economic and other requirements of present and future generations of Filipinos and;
(c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and well-being.
(P.D. 1151, 6 June 1977)
20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory to the
Constitutional policy of the State to
a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and efficient use of
natural resources (sic)." (Section 1, Article XII of the Constitution);
b. "protect the nation's marine wealth." (Section 2, ibid);
c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article XIV,id.);
d. "protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm
and harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of humankind the natural law and violative of
plaintiffs' right to self-preservation and perpetuation.
22. There is no other plain, speedy and adequate remedy in law other than the instant action to arrest the
unabated hemorrhage of the country's vital life support systems and continued rape of Mother Earth.
6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint based on two (2)
grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue raised by the plaintiffs is a political
question which properly pertains to the legislative or executive branches of Government. In their 12 July 1990 Opposition to the
Motion, the petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action, (2) the motion is dilatory
and (3) the action presents a justiciable question as it involves the defendant's abuse of discretion.
On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss.
7
In the said order, not only
was the defendant's claim that the complaint states no cause of action against him and that it raises a political question
sustained, the respondent Judge further ruled that the granting of the relief prayed for would result in the impairment of contracts
which is prohibited by the fundamental law of the land.
Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and ask this Court to
rescind and set aside the dismissal order on the ground that the respondent Judge gravely abused his discretion in dismissing
the action. Again, the parents of the plaintiffs-minors not only represent their children, but have also joined the latter in this
case.
8

On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their respective Memoranda
after the Office of the Solicitor General (OSG) filed a Comment in behalf of the respondents and the petitioners filed a repl y
thereto.
Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient allegations
concerning their right to a sound environment based on Articles 19, 20 and 21 of the Civil Code (Human Relations), Section 4 of
Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental
Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the people to a balanced and healthful ecology, the
concept of generational genocide in Criminal Law and the concept of man's inalienable right to self-preservation and self-
perpetuation embodied in natural law. Petitioners likewise rely on the respondent's correlative obligation per Section 4 of E.O.
No. 192, to safeguard the people's right to a healthful environment.
It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting Timber License
Agreements (TLAs) to cover more areas for logging than what is available involves a judicial question.
Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain that the same
does not apply in this case because TLAs are not contracts. They likewise submit that even if TLAs may be considered
protected by the said clause, it is well settled that they may still be revoked by the State when the public interest so requires.
On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific legal right violated by the
respondent Secretary for which any relief is provided by law. They see nothing in the complaint but vague and nebulous
allegations concerning an "environmental right" which supposedly entitles the petitioners to the "protection by the state in its
capacity as parens patriae." Such allegations, according to them, do not reveal a valid cause of action. They then reiterate the
theory that the question of whether logging should be permitted in the country is a political question which should be properly
addressed to the executive or legislative branches of Government. They therefore assert that the petitioners' resources is not to
file an action to court, but to lobby before Congress for the passage of a bill that would ban logging totally.
As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the State without due
process of law. Once issued, a TLA remains effective for a certain period of time usually for twenty-five (25) years. During its
effectivity, the same can neither be revised nor cancelled unless the holder has been found, after due notice and hearing, to
have violated the terms of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative of the requirements of due process.
Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No. 90-777 as a class
suit. The original defendant and the present respondents did not take issue with this matter. Nevertheless, We hereby rule that
the said civil case is indeed a class suit. The subject matter of the complaint is of common and general interest not just to
several, but to all citizens of the Philippines. Consequently, since the parties are so numerous, it, becomes impracticable, if not
totally impossible, to bring all of them before the court. We likewise declare that the plaintiffs therein are numerous and
representative enough to ensure the full protection of all concerned interests. Hence, all the requisites for the filing of a valid
class suit under Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil case and in the instant
petition, the latter being but an incident to the former.
This case, however, has a special and novel element. Petitioners minors assert that they represent their generation as well as
generations yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their generation and for the
succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be based on
the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right,
as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety.
9
Such rhythm and harmony indispensably
include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the country's forest, mineral,
land, waters, fisheries, wildlife, off-shore areas and other natural resources to the end that their exploration, development and
utilization be equitably accessible to the present as well as future generations.
10
Needless to say, every generation has a
responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a
little differently, the minors' assertion of their right to a sound environment constitutes, at the same time, the performance of their
obligation to ensure the protection of that right for the generations to come.
The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the petition.
After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the issues raised and
arguments adduced by the parties, We do not hesitate to find for the petitioners and rule against the respondent Judge's
challenged order for having been issued with grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions
of the said order reads as follows:
xxx xxx xxx
After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with the defendant.
For although we believe that plaintiffs have but the noblest of all intentions, it (sic) fell short of alleging, with
sufficient definiteness, a specific legal right they are seeking to enforce and protect, or a specific legal wrong
they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court notes that the Complaint
is replete with vague assumptions and vague conclusions based on unverified data. In fine, plaintiffs fail to state
a cause of action in its Complaint against the herein defendant.
Furthermore, the Court firmly believes that the matter before it, being impressed with political color and involving
a matter of public policy, may not be taken cognizance of by this Court without doing violence to the sacred
principle of "Separation of Powers" of the three (3) co-equal branches of the Government.
The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and
desist from receiving, accepting, processing, renewing or approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts" abhored (sic) by the fundamental law.
11

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient definiteness a specific legal
right involved or a specific legal wrong committed, and that the complaint is replete with vague assumptions and conclusions
based on unverified data. A reading of the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal right the right to a balanced and healthful ecology which, for the first
time in our nation's constitutional history, is solemnly incorporated in the fundamental law. Section 16, Article II of the 1987
Constitution explicitly provides:
Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature.
This right unites with the right to health which is provided for in the preceding section of the same article:
Sec. 15. The State shall protect and promote the right to health of the people and instill health consciousness
among them.
While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies and not
under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated in the latter.
Such a right belongs to a different category of rights altogether for it concerns nothing less than self-preservation and self-
perpetuation aptly and fittingly stressed by the petitioners the advancement of which may even be said to predate all
governments and constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for they are
assumed to exist from the inception of humankind. If they are now explicitly mentioned in the fundamental charter, it is because
of the well-founded fear of its framers 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 else would be lost not
only for the present generation, but also for those to come generations which stand to inherit nothing but parched earth
incapable of sustaining life.
The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment. During
the debates on this right in one of the plenary sessions of the 1986 Constitutional Commission, the following exchange
transpired between Commissioner Wilfrido Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question:
MR. VILLACORTA:
Does this section mandate the State to provide sanctions against all forms of pollution air,
water and noise pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic) environment necessarily carries with it the
correlative duty of not impairing the same and, therefore, sanctions may be provided for
impairment of environmental balance.
12

The said right implies, among many other things, the judicious management and conservation of the country's forests.
Without such forests, the ecological or environmental balance would be irreversiby disrupted.
Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the other related
provisions of the Constitution concerning the conservation, development and utilization of the country's natural resources,
13
then
President Corazon C. Aquino promulgated on 10 June 1987 E.O. No. 192,
14
Section 4 of which expressly mandates that the
Department of Environment and Natural Resources "shall be the primary government agency responsible for the conservation,
management, development and proper use of the country's environment and natural resources, specifically forest and grazing
lands, mineral, resources, including those in reservation and watershed areas, and lands of the public domain, as well as the
licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the
benefits derived therefrom for the welfare of the present and future generations of Filipinos." Section 3 thereof makes the
following statement of policy:
Sec. 3. Declaration of Policy. It is hereby declared the policy of the State to ensure the sustainable use,
development, management, renewal, and conservation of the country's forest, mineral, land, off-shore areas and
other natural resources, including the protection and enhancement of the quality of the environment, and
equitable access of the different segments of the population to the development and the use of the country's
natural resources, not only for the present generation but for future generations as well. It is also the policy of
the state to recognize and apply a true value system including social and environmental cost implications
relative to their utilization, development and conservation of our natural resources.
This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987,
15
specifically in Section
1 thereof which reads:
Sec. 1. Declaration of Policy. (1) The State shall ensure, for the benefit of the Filipino people, the full
exploration and development as well as the judicious disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural
resources, consistent with the necessity of maintaining a sound ecological balance and protecting and
enhancing the quality of the environment and the objective of making the exploration, development and
utilization of such natural resources equitably accessible to the different segments of the present as well as
future generations.
(2) The State shall likewise recognize and apply a true value system that takes into account social and
environmental cost implications relative to the utilization, development and conservation of our natural
resources.
The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and enhancing the quality
of the environment." Section 2 of the same Title, on the other hand, specifically speaks of the mandate of the DENR; however, it
makes particular reference to the fact of the agency's being subject to law and higher authority. Said section provides:
Sec. 2. Mandate. (1) The Department of Environment and Natural Resources shall be primarily responsible
for the implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional mandate to
control and supervise the exploration, development, utilization, and conservation of the country's natural
resources.
Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases for policy
formulation, and have defined the powers and functions of the DENR.
It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid special
attention to the "environmental right" of the present and future generations. On 6 June 1977, P.D. No. 1151 (Philippine
Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued. The former "declared a continuing policy
of the State (a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and
enjoyable harmony with each other, (b) to fulfill the social, economic and other requirements of present and future generations of
Filipinos, and (c) to insure the attainment of an environmental quality that is conducive to a life of dignity and well-being."
16
As
its goal, it speaks of the "responsibilities of each generation as trustee and guardian of the environment for succeeding
generations."
17
The latter statute, on the other hand, gave flesh to the said policy.
Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear as the DENR's
duty under its mandate and by virtue of its powers and functions under E.O. No. 192 and the Administrative Code of 1987
to protect and advance the said right.
A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the same gives rise to
a cause of action. Petitioners maintain that the granting of the TLAs, which they claim was done with grave abuse of discretion,
violated their right to a balanced and healthful ecology; hence, the full protection thereof requires that no further TLAs should be
renewed or granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the legal right or rights of the other; and its essential elements
are legal right of the plaintiff, correlative obligation of the defendant, and act or omission of the defendant in
violation of said legal right.
18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a cause of
action,
19
the question submitted to the court for resolution involves the sufficiency of the facts alleged in the complaint itself. No
other matter should be considered; furthermore, the truth of falsity of the said allegations is beside the point for the truth thereof
is deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such alleged facts to be true, may
the court render a valid judgment in accordance with the prayer in the complaint?
20
In Militante vs. Edrosolano,
21
this Court laid
down the rule that the judiciary should "exercise the utmost care and circumspection in passing upon a motion to dismiss on the
ground of the absence thereof [cause of action] lest, by its failure to manifest a correct appreciation of the facts alleged and
deemed hypothetically admitted, what the law grants or recognizes is effectively nullified. If that happens, there is a blot on the
legal order. The law itself stands in disrepute."
After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative allegations, as
well as the specific averments under the sub-heading CAUSE OF ACTION, to be adequate enough to show, prima facie, the
claimed violation of their rights. On the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears
stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as party defendants,
the grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or determination by the
executive or legislative branches of Government is not squarely put in issue. What is principally involved is the enforcement of a
right vis-a-vis policies already formulated and expressed in legislation. It must, nonetheless, be emphasized that the political
question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the impenetrable shield that
protects executive and legislative actions from judicial inquiry or review. The second paragraph of section 1, Article VIII of the
Constitution states that:
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.
Commenting on this provision in his book, Philippine Political Law,
22
Mr. Justice Isagani A. Cruz, a distinguished member of this
Court, says:
The first part of the authority represents the traditional concept of judicial power, involving the settlement of
conflicting rights as conferred as law. The second part of the authority represents a broadening of judicial power
to enable the courts of justice to review what was before forbidden territory, to wit, the discretion of the political
departments of the government.
As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule upon
even the wisdom of the decisions of the executive and the legislature and to declare their acts invalid for lack or
excess of jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the meaning of
"grave abuse of discretion," which is a very elastic phrase that can expand or contract according to the
disposition of the judiciary.
In Daza vs. Singson,
23
Mr. Justice Cruz, now speaking for this Court, noted:
In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is
that, even if we were to assume that the issue presented before us was political in nature, we would still not be
precluded from revolving it under the expanded jurisdiction conferred upon us that now covers, in proper cases,
even the political question. Article VII, Section 1, of the Constitution clearly provides: . . .
The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause found in the
Constitution. The court a quo declared that:
The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs
prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and
desist from receiving, accepting, processing, renewing or approving new timber license agreements. For to do
otherwise would amount to "impairment of contracts" abhored (sic) by the fundamental law.
24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement. In the first
place, the respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-impairment clause. If
he had done so, he would have acted with utmost infidelity to the Government by providing undue and unwarranted benefits and
advantages to the timber license holders because he would have forever bound the Government to strictly respect the said
licenses according to their terms and conditions regardless of changes in policy and the demands of public interest and welfare.
He was aware that as correctly pointed out by the petitioners, into every timber license must be read Section 20 of the Forestry
Reform Code (P.D. No. 705) which provides:
. . . Provided, That when the national interest so requires, the President may amend, modify, replace or rescind
any contract, concession, permit, licenses or any other form of privilege granted herein . . .
Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a
property right protested by the due process clause of the Constitution. In Tan vs. Director of Forestry,
25
this Court held:
. . . A timber license is an instrument by which the State regulates the utilization and disposition of forest
resources to the end that public welfare is promoted. A timber license is not a contract within the purview of the
due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by public
interest or public welfare as in this case.
A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between
the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it property
or a property right, nor does it create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the
granting of license does not create irrevocable rights, neither is it property or property rights (People vs. Ong
Tin, 54 O.G. 7576).
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary:
26

. . . Timber licenses, permits and license agreements are the principal instruments by which the State regulates
the utilization and disposition of forest resources to the end that public welfare is promoted. And it can hardly be
gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the
latter a permanent or irrevocable right to the particular concession area and the forest products therein. They
may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests so
require. Thus, they are not deemed contracts within the purview of the due process of law clause [See Sections
3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548,
October 27, 1983, 125 SCRA 302].
Since timber licenses are not contracts, the non-impairment clause, which reads:
Sec. 10. No law impairing, the obligation of contracts shall be passed.
27

cannot be invoked.
In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or even an
executive issuance declaring the cancellation or modification of existing timber licenses. Hence, the non-impairment clause
cannot as yet be invoked. Nevertheless, granting further that a law has actually been passed mandating cancellations or
modifications, the same cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very
nature and purpose, such as law could have only been passed in the exercise of the police power of the state for the purpose of
advancing the right of the people to a balanced and healthful ecology, promoting their health and enhancing the general welfare.
In Abe vs. Foster Wheeler
Corp.
28
this Court stated:
The freedom of contract, under our system of government, is not meant to be absolute. The same is understood
to be subject to reasonable legislative regulation aimed at the promotion of public health, moral, safety and
welfare. In other words, the constitutional guaranty of non-impairment of obligations of contract is limited by the
exercise of the police power of the State, in the interest of public health, safety, moral and general welfare.
The reason for this is emphatically set forth in Nebia vs. New York,
29
quoted in Philippine American Life Insurance Co. vs.
Auditor General,
30
to wit:
Under our form of government the use of property and the making of contracts are normally matters of private
and not of public concern. The general rule is that both shall be free of governmental interference. But neither
property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his
property to the detriment of his fellows, or exercise his freedom of contract to work them harm. Equally
fundamental with the private right is that of the public to regulate it in the common interest.
In short, the non-impairment clause must yield to the police power of the state.
31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer to
enjoin the respondent Secretary from receiving, accepting, processing, renewing or approving new timber licenses for, save in
cases of renewal, no contract would have as of yet existed in the other instances. Moreover, with respect to renewal, the holder
is not entitled to it as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of respondent
Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may therefore amend their
complaint to implead as defendants the holders or grantees of the questioned timber license agreements.
No pronouncement as to costs.
SO ORDERED.
Cruz, Padilla, Bidin, Grio-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ., concur.
Narvasa, C.J., Puno and Vitug, JJ., took no part.

Separate Opinions
FELICIANO, J ., concurring
I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is one of the
most important cases decided by this Court in the last few years. The seminal principles laid down in this decision are likely to
influence profoundly the direction and course of the protection and management of the environment, which of course embraces
the utilization of all the natural resources in the territorial base of our polity. I have therefore sought to clarify, basically to myself,
what the Court appears to be saying.
The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance of this suit
(Decision, pp. 11-12). Locus standi is not a function of petitioners' claim that their suit is properly regarded as a class suit. I
understand locus standi to refer to the legal interest which a plaintiff must have in the subject matter of the suit. Because of the
very broadness of the concept of "class" here involved membership in this "class" appears to embrace everyone living in the
country whether now or in the
future it appears to me that everyone who may be expected to benefit from the course of action petitioners seek to require
public respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to be recognizing
a beneficiaries' right of action in the field of environmental protection, as against both the public administrative agency directly
concerned and the private persons or entities operating in the field or sector of activity involved. Whether such beneficiari es'
right of action may be found under any and all circumstances, or whether some failure to act, in the first instance, on the part of
the governmental agency concerned must be shown ("prior exhaustion of administrative remedies"), is not discussed in the
decision and presumably is left for future determination in an appropriate case.
The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right the right
to a balanced and healthful ecology" (Decision, p. 14). There is no question that "the right to a balanced and healthful ecology" is
"fundamental" and that, accordingly, it has been "constitutionalized." But although it is fundamental in character, I suggest, with
very great respect, that it cannot be characterized as "specific," without doing excessive violence to language. It is in fact very
difficult to fashion language more comprehensive in scope and generalized in character than a right to "a balanced and healthful
ecology." The list of particular claims which can be subsumed under this rubic appears to be entirely open-ended: prevention
and control of emission of toxic fumes and smoke from factories and motor vehicles; of discharge of oil, chemical effluents,
garbage and raw sewage into rivers, inland and coastal waters by vessels, oil rigs, factories, mines and whole communities; of
dumping of organic and inorganic wastes on open land, streets and thoroughfares; failure to rehabilitate land after strip-mining or
open-pit mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other living sea resources through
the use of dynamite or cyanide and other chemicals; contamination of ground water resources; loss of certain species of fauna
and flora; and so on. The other statements pointed out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987;
Section 1, Title XIV, Book IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 all appear to be
formulations of policy, as general and abstract as the constitutional statements of basic policy in Article II, Section 16 ("the right
to a balanced and healthful ecology") and 15 ("the right to health").
P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a compendious
collection of more "specific environment management policies" and "environment quality standards" (fourth "Whereas" clause,
Preamble) relating to an extremely wide range of topics:
(a) air quality management;
(b) water quality management;
(c) land use management;
(d) natural resources management and conservation embracing:
(i) fisheries and aquatic resources;
(ii) wild life;
(iii) forestry and soil conservation;
(iv) flood control and natural calamities;
(v) energy development;
(vi) conservation and utilization of surface and ground water
(vii) mineral resources
Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the particular provision
or provisions (if any) of the Philippine Environment Code which give rise to a specific legal right which petitioners are seeking to
enforce. Secondly, the Philippine Environment Code identifies with notable care the particular government agency charged with
the formulation and implementation of guidelines and programs dealing with each of the headings and sub-headings mentioned
above. The Philippine Environment Code does not, in other words, appear to contemplate action on the part of private
persons who are beneficiaries of implementation of that Code.
As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the constitutional
statements above noted, the Court is in effect saying that Section 15 (and Section 16) of Article II of the Constitution are self-
executing and judicially enforceable even in their present form. The implications of this doctrine will have to be explored in future
cases; those implications are too large and far-reaching in nature even to be hinted at here.
My suggestion is simply that petitioners must, before the trial court, show a more specific legal right a right cast in language of
a significantly lower order of generality than Article II (15) of the Constitution that is or may be violated by the actions, or
failures to act, imputed to the public respondent by petitioners so that the trial court can validly render judgment granting all or
part of the relief prayed for. To my mind, the Court should be understood as simply saying that such a more specific legal right or
rights may well exist in our corpus of law, considering the general policy principles found in the Constitution and the existence of
the Philippine Environment Code, and that the trial court should have given petitioners an effective opportunity so to
demonstrate, instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal
right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless the legal right claimed to
have been violated or disregarded is given specification in operational terms, defendants may well be unable to defend
themselves intelligently and effectively; in other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration where a specific violation of law or applicable regulation is not alleged or
proved, petitioners can be expected to fall back on the expanded conception of judicial power in the second paragraph of
Section 1 of Article VIII of the Constitution which reads:
Section 1. . . .
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there has been agrave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government. (Emphasis supplied)
When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are
combined with remedial standards as broad ranging as "a grave abuse of discretion amounting to lack or excess of
jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area of environmental protection and management, our courts
have no claim to special technical competence and experience and professional qualification. Where no specific,
operable norms and standards are shown to exist, then the policy making departments the legislative and executive
departments must be given a real and effective opportunity to fashion and promulgate those norms and standards,
and to implement them before the courts should intervene.
My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's petitioners
demand public respondents should cancel, must be impleaded in the proceedings below. It might be asked that, if petitioners'
entitlement to the relief demanded is not dependent upon proof of breach by the timber companies of one or more of the specific
terms and conditions of their concession agreements (and this, petitioners implicitly assume), what will those companies litigate
about? The answer I suggest is that they may seek to dispute the existence of the specific legal right petitioners should allege,
as well as the reality of the claimed factual nexus between petitioners' specific legal rights and the claimed wrongful acts or
failures to act of public respondent administrative agency. They may also controvert the appropriateness of the remedy or
remedies demanded by petitioners, under all the circumstances which exist.
I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our territory, is of
extreme importance for the country. The doctrines set out in the Court's decision issued today should, however, be subjected to
closer examination.

# Separate Opinions
FELICIANO, J ., concurring
I join in the result reached by my distinguished brother in the Court, Davide, Jr., J., in this case which, to my mind, is one of the
most important cases decided by this Court in the last few years. The seminal principles laid down in this decision are likely to
influence profoundly the direction and course of the protection and management of the environment, which of course embraces
the utilization of all the natural resources in the territorial base of our polity. I have therefore sought to clarify, basically to myself,
what the Court appears to be saying.
The Court explicitly states that petitioners have the locus standi necessary to sustain the bringing and, maintenance of this suit
(Decision, pp. 11-12). Locus standi is not a function of petitioners' claim that their suit is properly regarded as a class suit. I
understand locus standi to refer to the legal interest which a plaintiff must have in the subject matter of the suit. Because of the
very broadness of the concept of "class" here involved membership in this "class" appears to embrace everyone living in the
country whether now or in the
future it appears to me that everyone who may be expected to benefit from the course of action petitioners seek to require
public respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to be recognizing
a beneficiaries' right of action in the field of environmental protection, as against both the public administrative agency directly
concerned and the private persons or entities operating in the field or sector of activity involved. Whether such beneficiari es'
right of action may be found under any and all circumstances, or whether some failure to act, in the first instance, on the part of
the governmental agency concerned must be shown ("prior exhaustion of administrative remedies"), is not discussed in the
decision and presumably is left for future determination in an appropriate case.
The Court has also declared that the complaint has alleged and focused upon "one specific fundamental legal right the right
to a balanced and healthful ecology" (Decision, p. 14). There is no question that "the right to a balanced and healthful ecology" is
"fundamental" and that, accordingly, it has been "constitutionalized." But although it is fundamental in character, I suggest, with
very great respect, that it cannot be characterized as "specific," without doing excessive violence to language. It is in fact very
difficult to fashion language more comprehensive in scope and generalized in character than a right to "a balanced and healthful
ecology." The list of particular claims which can be subsumed under this rubic appears to be entirely open-ended: prevention
and control of emission of toxic fumes and smoke from factories and motor vehicles; of discharge of oil, chemical effluents,
garbage and raw sewage into rivers, inland and coastal waters by vessels, oil rigs, factories, mines and whole communities; of
dumping of organic and inorganic wastes on open land, streets and thoroughfares; failure to rehabilitate land after strip-mining or
open-pit mining; kaingin or slash-and-burn farming; destruction of fisheries, coral reefs and other living sea resources through
the use of dynamite or cyanide and other chemicals; contamination of ground water resources; loss of certain species of fauna
and flora; and so on. The other statements pointed out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987;
Section 1, Title XIV, Book IV of the 1987 Administrative Code; and P.D. No. 1151, dated 6 June 1977 all appear to be
formulations of policy, as general and abstract as the constitutional statements of basic policy in Article II, Section 16 ("the right
to a balanced and healthful ecology") and 15 ("the right to health").
P.D. No. 1152, also dated 6 June 1977, entitled "The Philippine Environment Code," is, upon the other hand, a compendious
collection of more "specific environment management policies" and "environment quality standards" (fourth "Whereas" clause,
Preamble) relating to an extremely wide range of topics:
(a) air quality management;
(b) water quality management;
(c) land use management;
(d) natural resources management and conservation embracing:
(i) fisheries and aquatic resources;
(ii) wild life;
(iii) forestry and soil conservation;
(iv) flood control and natural calamities;
(v) energy development;
(vi) conservation and utilization of surface and ground water
(vii) mineral resources
Two (2) points are worth making in this connection. Firstly, neither petitioners nor the Court has identified the particular provision
or provisions (if any) of the Philippine Environment Code which give rise to a specific legal right which petitioners are seeking to
enforce. Secondly, the Philippine Environment Code identifies with notable care the particular government agency charged with
the formulation and implementation of guidelines and programs dealing with each of the headings and sub-headings mentioned
above. The Philippine Environment Code does not, in other words, appear to contemplate action on the part of private
persons who are beneficiaries of implementation of that Code.
As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the constitutional
statements above noted, the Court is in effect saying that Section 15 (and Section 16) of Article II of the Constitution are self-
executing and judicially enforceable even in their present form. The implications of this doctrine will have to be explored in future
cases; those implications are too large and far-reaching in nature even to be hinted at here.
My suggestion is simply that petitioners must, before the trial court, show a more specific legal right a right cast in language of
a significantly lower order of generality than Article II (15) of the Constitution that is or may be violated by the actions, or
failures to act, imputed to the public respondent by petitioners so that the trial court can validly render judgment granting all or
part of the relief prayed for. To my mind, the Court should be understood as simply saying that such a more specific legal right or
rights may well exist in our corpus of law, considering the general policy principles found in the Constitution and the existence of
the Philippine Environment Code, and that the trial court should have given petitioners an effective opportunity so to
demonstrate, instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal
right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless the legal right claimed to
have been violated or disregarded is given specification in operational terms, defendants may well be unable to defend
themselves intelligently and effectively; in other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration where a specific violation of law or applicable regulation is not alleged or
proved, petitioners can be expected to fall back on the expanded conception of judicial power in the second paragraph of
Section 1 of Article VIII of the Constitution which reads:
Section 1. . . .
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there has been agrave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government. (Emphasis supplied)
When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are
combined with remedial standards as broad ranging as "a grave abuse of discretion amounting to lack or excess of
jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area of environmental protection and management, our courts
have no claim to special technical competence and experience and professional qualification. Where no specific,
operable norms and standards are shown to exist, then the policy making departments the legislative and executive
departments must be given a real and effective opportunity to fashion and promulgate those norms and standards,
and to implement them before the courts should intervene.
My learned brother Davide, Jr., J., rightly insists that the timber companies, whose concession agreements or TLA's petitioners
demand public respondents should cancel, must be impleaded in the proceedings below. It might be asked that, if petitioners'
entitlement to the relief demanded is not dependent upon proof of breach by the timber companies of one or more of the specific
terms and conditions of their concession agreements (and this, petitioners implicitly assume), what will those companies litigate
about? The answer I suggest is that they may seek to dispute the existence of the specific legal right petitioners should allege,
as well as the reality of the claimed factual nexus between petitioners' specific legal rights and the claimed wrongful acts or
failures to act of public respondent administrative agency. They may also controvert the appropriateness of the remedy or
remedies demanded by petitioners, under all the circumstances which exist.
I vote to grant the Petition for Certiorari because the protection of the environment, including the forest cover of our territory, is of
extreme importance for the country. The doctrines set out in the Court's decision issued today should, however, be subjected to
closer examination.
[G.R. No. 110249. August 21, 1997]
ALFREDO TANO, BALDOMERO TANO, DANILO TANO, ROMUALDO TANO, TEOCENES MIDELLO, ANGEL DE MESA,
EULOGIO TREMOCHA, FELIPE ONGONION, JR., ANDRES LINIJAN, ROBERT LIM, VIRGINIA LIM, FELIMON DE
MESA, GENEROSO ARAGON, TEODORICO ANDRE, ROMULO DEL ROSARIO, CHOLITO ANDRE, ERICK
MONTANO, ANDRES OLIVA, VITTORIO SALVADOR, LEOPOLDO ARAGON, RAFAEL RIBA, ALEJANDRO
LEONILA, JOSE DAMACINTO, RAMIRO MANAEG, RUBEN MARGATE, ROBERTO REYES, DANILO
PANGARUTAN, NOE GOLPAN,ESTANISLAO ROMERO, NICANOR DOMINGO, ROLDAN TABANG, PANGANIBAN,
ADRIANO TABANG, FREDDIE SACAMAY, MIGUEL TRIMOCHA, PACENCIO LABABIT, PABLO H. OMPAD,
CELESTINO A. ABANO, ALLAN ALMODAL, BILLY D. BARTOLAY, ALBINO D. LIQUE, MELCHOR J. LAYSON,
MELANI AMANTE, CLARO E. YATOC, MERGELDO B. BALDEO, EDGAR M. ALMASET A., JOSELITO MANAEG,
LIBERATO ANDRADA, JR., ROBERTO BERRY, RONALD VILLANUEVA, EDUARDO VALMORIA, WILDREDO
MENDOZA, NAPOLEON BABANGA, ROBERTO TADEPA, RUBEN ASINGUA, SILVERIO GABO, JERRY ROMERO,
DAVID PANGAGARUTAN, DANIEL PANGGARUTAN, ROMEO AGAWIN, FERNANDO EQUIZ, DITO LEQUIZ,
RONILO ODERABLE, BENEDICTO TORRES, ROSITO A. VALDEZ, CRESENCIO A. SAYANG, NICOMEDES S.
ACOSTA, ERENEO A. SEGARINO, JR., WILDREDO A. RAUTO, DIOSDADO A. ACOSTA, BONIFACIO G. SISMO,
TACIO ALUBA, DANIEL B. BATERZAL, ELISEO YBAEZ, DIOSDADO E. HANCHIC, EDDIE ESCALICAS,
ELEAZAR B. BATERZAL, DOMINADOR HALICHIC, ROOSEVELT RISMO-AN, ROBERT C. MERCADER, TIRSO
ARESGADO, DANIEL CHAVEZ, DANILO CHAVEZ, VICTOR VILLAROEL, ERNESTO C. YABANEZ, ARMANDO T.
SANTILLAN, RUDY S. SANTILLAN, JODJEN ILUSTRISIMO, NESTOR SALANGRON, ALBERTO SALANGRON,
ROGER L. ROXAS, FRANCISCO T. ANTICANO, PASTOR SALANGRON, BIENVENIDO SANTILLAN, GILBUENA
LADDY, FIDEL BENJAMIN JOVELITO BELGANO, HONEY PARIOL, ANTONIO SALANGRON, NICASIO
SALANGRON, & AIRLINE SHIPPERS ASSOCIATION OF PALAWAN, petitioners, vs. GOV. SALVADOR P.
SOCRATES, MEMBERS OF SANGGUNIAN PANLALAWIGAN OF PALAWAN, namely, VICE-GOVERNOR JOEL T.
REYES, JOSE D. ZABALA, ROSALINO R. ACOSTA, JOSELITO A. CADLAON, ANDRES R. BAACO, NELSON P.
PENEYRA, CIPRIANO C. BARROMA, CLARO E. ORDINARIO, ERNESTO A. LLACUN, RODOLFO C. FLORDELIZA,
GILBERT S. BAACO, WINSTON G. ARZAGA, NAPOLEON F. ORDONEZ and GIL P. ACOSTA, CITY MAYOR
EDWARD HAGEDORN, MEMBERS OF SANGGUNIANG PANLUNGSOD NG PUERTO PRINCESA, ALL MEMBERS
OF BANTAY DAGAT, MEMBERS OF PHILIPPINE NATIONAL POLICE OF PALAWAN, PROVINCIAL AND CITY
PROSECUTORS OF PALAWAN and PUERTO PRINCESA CITY, and ALL JUDGES OF PALAWAN, REGIONAL,
MUNICIPAL AND METROPOLITAN, respondents.
D E C I S I O N
DAVIDE, JR., J .:
Petitioners caption their petition as one for Certiorari, Injunction With Preliminary Mandatory Injunction,with Prayer for
Temporary Restraining Order and pray that this Court: (1) declare as unconstitutional: (a) Ordinance No. 15-92, dated 15
December 1992, of the Sangguniang Panlungsod of Puerto Princesa; (b) Office Order No. 23, Series of 1993, dated 22 January
1993, issued by Acting City Mayor Amado L. Lucero of Puerto Princesa City; and (c) Resolution No. 33, Ordinance No. 2, Series
of 1993, dated 19 February 1993, of theSangguniang Panlalawigan of Palawan; (2) enjoin the enforcement thereof; and (3)
restrain respondents Provincial and City Prosecutors of Palawan and Puerto Princesa City and Judges of Regional Trial Courts,
Metropolitan Trial Courts
[1]
and Municipal Circuit Trial Courts in Palawan from assuming jurisdiction over and hearing cases
concerning the violation of the Ordinances and of the Office Order.
More appropriately, the petition is, and shall be treated as, a special civil action for certiorari and prohibition.
The following is petitioners summary of the factual antecedents giving rise to the petition:
1. On December 15, 1992, the Sangguniang Panlungsod ng Puerto Princesa City enacted Ordinance No. 15-92 which took
effect on January 1, 1993 entitled: AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH AND LOBSTER OUTSIDE
PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING EXEMPTIONS, PENALTIES
AND FOR OTHER PURPOSES THEREOF, the full text of which reads as follows:
Section 1. Title of the Ordinance. - This Ordinance is entitled: AN ORDINANCE BANNING THE SHIPMENT OF ALL LIVE FISH
AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998 AND PROVIDING
EXEMPTIONS, PENALTIES AND FOR OTHER PURPOSES THEREOF.
Section 2. Purpose, Scope and Coverage. - To effectively free our City Sea Waters from Cyanide and other Obnoxious
substance, and shall cover all persons and/or entities operating within and outside the City of Puerto Princesa who is are [sic]
directly or indirectly in the business or shipment of live fish and lobster outside the City.
Section 3. Definition of terms. - For purpose of this Ordinance the following are hereby defined:
A. SEA BASS - A kind of fish under the family of Centropomidae, better known as APAHAP;
B. CATFISH - A kind of fish under the family of Plotosidae, better known as HITO-HITO;
C. MUDFISH - A kind of fish under the family of Orphicaphalisae better known as DALAG
D. ALL LIVE FISH - All alive, breathing not necessarily moving of all specie[s] use for food and for aquarium purposes.
E. LIVE LOBSTER - Several relatively, large marine crustaceans of the genus Homarus that are alive and breathing not
necessarily moving.
Section 4. It shall be unlawful [for] any person or any business enterprise or company to ship out from Puerto Princesa City to
any point of destination either via aircraft or seacraft of any live fish and lobster except SEA BASS, CATFISH, MUDFISH, AND
MILKFISH FRIES.
Section 5. Penalty Clause. - Any person/s and or business entity violating this Ordinance shall be penalized with a fine of not
more than P5,000.00 or imprisonment of not more than twelve (12) months, cancellation of their permit to do business in the City
of Puerto Princesa or all of the herein stated penalties, upon the discretion of the court.
Section 6. If the owner and/or operator of the establishment found vilating the provisions of this ordinance is a corporation or a
partnership, the penalty prescribed in Section 5 hereof shall be imposed upon its president and/or General Manager or
Managing Partner and/or Manager, as the case maybe [sic].
Section 7. Any existing ordinance or any provision of any ordinance inconsistent to [sic] this ordinance is deemed repealed.
Section 8. This Ordinance shall take effect on January 1, 1993.
SO ORDAINED.
xxx
2. To implement said city ordinance, then Acting City Mayor Amado L. Lucero issued Office Order No. 23, Series of 1993
dated January 22, 1993 which reads as follows:
In the interest of public service and for purposes of City Ordinance No. PD426-14-74, otherwise known as AN ORDINANCE
REQUIRING ANY PERSON ENGAGED OR INTENDING TO ENGAGE IN ANY BUSINESS, TRADE, OCCUPATION, CALLING
OR PROFESSION OR HAVING IN HIS POSSESSION ANY OF THE ARTICLES FOR WHICH A PERMIT IS REQUIRED TO BE
HAD, TO OBTAIN FIRST A MAYORS PERMIT and City Ordinance No. 15-92, AN ORDINANCE BANNING THE SHIPMENT
OF ALL LIVE FISH AND LOBSTER OUTSIDE PUERTO PRINCESA CITY FROM JANUARY 1, 1993 TO JANUARY 1, 1998,
you are hereby authorized and directed to check or conduct necessary inspections on cargoes containing live fish and lobster
being shipped out from the Puerto Princesa Airport, Puerto Princesa Wharf or at any port within the jurisdiction of the City to any
point of destinations [sic] either via aircraft or seacraft.
The purpose of the inspection is to ascertain whether the shipper possessed the required Mayors Permit issued by this Office
and the shipment is covered by invoice or clearance issued by the local office of the Bureau of Fisheries and Aquatic Resources
and as to compliance with all other existing rules and regulations on the matter.
Any cargo containing live fish and lobster without the required documents as stated herein must be held for proper disposition.
In the pursuit of this Order, you are hereby authorized to coordinate with the PAL Manager, the PPA Manager, the local PNP
Station and other offices concerned for the needed support and cooperation. Further, that the usual courtesy and diplomacy
must be observed at all times in the conduct of the inspection.
Please be guided accordingly.
xxx
3. On February 19, 1993, the Sangguniang Panlalawigan, Provincial Government of Palawan enacted Resolution No. 33
entitled: A RESOLUTION PROHIBITING THE CATCHING, GATHERING, POSSESSING, BUYING, SELLING AND SHIPMENT
OF LIVE MARINE CORAL DWELLING AQUATIC ORGANISMS, TO WIT: FAMILY: SCARIDAE (MAMENG), EPINE PHELUS
FASCIATUS(SUNO). CROMILEPTES ALTIVELIS (PANTHER OR SENORITA), LOBSTER BELOW 200 GRAMS AND
SPAWNING, TRADACNA GIGAS (TAKLOBO), PINCTADA MARGARITEFERA(MOTHER PEARL, OYSTERS, GIANT CLAMS
AND OTHER SPECIES), PENAEUS MONODON (TIGER PRAWN-BREEDER SIZE OR MOTHER), EPINEPHELUS
SUILLUS (LOBA OR GREEN GROUPER) AND FAMILY: BALISTIDAE (TROPICAL AQUARIUM FISHES) FOR A PERIOD FIVE
(5) YEARS IN AND COMING FROM PALAWAN WATERS, the full text of which reads as follows:
WHEREAS, scientific and factual researches [sic] and studies disclose that only five (5) percent of the corals of our province
remain to be in excellent condition as [a] habitat of marine coral dwelling aquatic organisms;
WHEREAS, it cannot be gainsaid that the destruction and devastation of the corals of our province were principally due to illegal
fishing activities like dynamite fishing, sodium cyanide fishing, use of other obnoxious substances and other related activities;
WHEREAS, there is an imperative and urgent need to protect and preserve the existence of the remaining excellent corals and
allow the devastated ones to reinvigorate and regenerate themselves into vitality within the span of five (5) years;
WHEREAS, Sec. 468, Par. 1, Sub-Par. VI of the [sic] R.A. 7160 otherwise known as the Local Government Code of 1991
empowers the Sangguniang Panlalawigan to protect the environment and impose appropriate penalties [upon] acts which
endanger the environment such as dynamite fishing and other forms of destructive fishing, among others.
NOW, THEREFORE, on motion by Kagawad Nelson P. Peneyra and upon unanimous decision of all the members present;
Be it resolved as it is hereby resolved, to approve Resolution No. 33, Series of 1993 of the Sangguniang Panlalawigan and to
enact Ordinance No. 2 for the purpose, to wit:
ORDINANCE NO. 2
Series of 1993
BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN IN SESSION ASSEMBLED:
Section 1. TITLE - This Ordinance shall be known as an Ordinance Prohibiting the catching, gathering, possessing, buying,
selling and shipment of live marine coral dwelling aquatic organisms, to wit: 1. Family: Scaridae (Mameng), 2. Epinephelus
Fasciatus (Suno), 3. Cromileptes altivelis (Panther or Senorita), lobster below 200 grams and spawning), 4. Tridacna Gigas
(Taklobo), 5. Pinctada Margaretefera (Mother Pearl, Oysters, Giant Clams and other species), 6. Penaeus Monodon (Tiger
Prawn-breeder size or mother), 7. Epinephelus Suillus (Loba or Green Grouper) and 8. Family: Balistidae (Topical Aquarium
Fishes) for a period of five (5) years in and coming from Palawan Waters.
Section II. PRELIMINARY CONSIDERATIONS
1. Sec. 2-A (Rep. Act 7160). It is hereby declared, the policy of the state that the territorial and political subdivisions of the State
shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self reliant communities
and make them more effective partners in the attainment of national goals. Toward this end, the State shall provide for [a] more
responsive and accountable local government structure instituted through a system of decentralization whereby local
government units shall be given more powers, authority, responsibilities and resources.
2. Sec. 5-A (R.A. 7160). Any provision on a power of [a] local Government Unit shall be liberaly interpreted in its favor, and in
case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower government units. Any
fair and reasonable doubts as to the existence of the power shall be interpreted in favor of the Local Government Unit
concerned.
3. Sec. 5-C (R.A. 7160). The general welfare provisions in this Code shall be liberally interpreted to give more powers to local
government units in accelerating economic development and upgrading the quality of life for the people in the community.
4. Sec. 16 (R.A. 7160). General Welfare. - Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance;
and those which are essential to the promotion of the general welfare.
Section III. DECLARATION OF POLICY. - It is hereby declared to be the policy of the Province of Palawan to protect and
conserve the marine resources of Palawan not only for the greatest good of the majority of the present generation but with [the]
proper perspective and consideration of [sic] their prosperity, and to attain this end, the Sangguniang Panlalawigan henceforth
declares that is [sic] shall be unlawful for any person or any business entity to engage in catching, gathering, possessing,
buying, selling and shipment of live marine coral dwelling aquatic organisms as enumerated in Section 1 hereof in and coming
out of Palawan Waters for a period of five (5) years;
Section IV. PENALTY CLAUSE. - Any person and/or business entity violating this Ordinance shall be penalized with a fine of
not more than Five Thousand Pesos (P5,000.00), Philippine Currency, and/or imprisonment of six (6) months to twelve (12)
months and confiscation and forfeiture of paraphernalias [sic] and equipment in favor of the government at the discretion of the
Court;
Section V. SEPARABILITY CLAUSE. - If for any reason, a Section or provision of this Ordinance shall be held as unconditional
[sic] or invalid, it shall not affect the other provisions hereof.
Section VI. REPEALING CLAUSE. - Any existing Ordinance or a provision of any ordinance inconsistent herewith is deemed
modified, amended or repealed.
Section VII. EFFECTIVITY. - This Ordinance shall take effect ten (10) days after its publication.
SO ORDAINED.
xxx
4. The respondents implemented the said ordinances, Annexes A and C hereof thereby depriving all the fishermen of the
whole province of Palawan and the City of Puerto Princesa of their only means of livelihood and the petitioners Airline Shippers
Association of Palawan and other marine merchants from performing their lawful occupation and trade;
5. Petitioners Alfredo Tano, Baldomero Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, and Felipe Ongonion,
Jr. were even charged criminally under criminal case no. 93-05-C in the 1st Municipal Circuit Trial Court of Cuyo-Agutaya-
Magsaysay, an original carbon copy of the criminal complaint dated April 12, 1993 is hereto attached as Annex D; while xerox
copies are attached as Annex D to the copies of the petition;
6. Petitioners Robert Lim and Virginia Lim, on the other hand, were charged by the respondent PNP with the respondent City
Prosecutor of Puerto Princesa City, a xerox copy of the complaint is hereto attached as Annex E;
Without seeking redress from the concerned local government units, prosecutors office and courts, petitioners directly
invoked our original jurisdiction by filing this petition on 4 June 1993. In sum, petitioners contend that:
First, the Ordinances deprived them of due process of law, their livelihood, and unduly restricted them from the practice of
their trade, in violation of Section 2, Article XII and Sections 2 and 7 of Article XIII of the 1987 Constitution.
Second, Office Order No. 23 contained no regulation nor condition under which the Mayors permit could be granted or
denied; in other words, the Mayor had the absolute authority to determine whether or not to issue permit.
Third, as Ordinance No. 2 of the Province of Palawan altogether prohibited the catching, gathering, possession, buying,
selling and shipping of live marine coral dwelling organisms, without any distinction whether it was caught or gathered through
lawful fishing method, the Ordinance took away the right of petitioners-fishermen to earn their livelihood in lawful ways; and
insofar as petitioners-members of Airline Shippers Association are concerned, they were unduly prevented from pursuing their
vocation and entering into contracts which are proper, necessary, and essential to carry out their business endeavors to a
successful conclusion.
Finally, as Ordinance No. 2 of the Sangguniang Panlalawigan is null and void, the criminal cases based thereon against
petitioners Tano and the others have to be dismissed.
In the Resolution of 15 June 1993 we required respondents to comment on the petition, and furnished the Office of the
Solicitor General with a copy thereof.
In their comment filed on 13 August 1993, public respondents Governor Socrates and Members of the Sangguniang
Panlalawigan of Palawan defended the validity of Ordinance No.2, Series of 1993, as a valid exercise of the Provincial
Governments power under the general welfare clause (Section 16 of the Local Government Code of 1991 [hereafter, LGC]), and
its specific power to protect the environment and impose appropriate penalties for acts which endanger the environment, such
as dynamite fishing and other forms of destructive fishing under Section 447 (a) (1) (vi), Section 458 (a) (1) (vi), and Sect ion 468
(a) (1) (vi), of the LGC. They claimed that in the exercise of such powers, the Province of Palawan had the right and
responsibilty to insure that the remaining coral reefs, where fish dwells [sic], within its territory remain healthy for the future
generation. The Ordinance, they further asserted, covered onlylive marine coral dwelling aquatic organisms which were
enumerated in the ordinance and excluded other kinds of live marine aquatic organisms not dwelling in coral reefs; besides the
prohibition was for only five (5) years to protect and preserve the pristine coral and allow those damaged to regenerate.
Aforementioned respondents likewise maintained that there was no violation of due process and equal protection clauses of
the Constitution. As to the former, public hearings were conducted before the enactment of the Ordinance which, undoubtedly,
had a lawful purpose and employed reasonable means; while as to the latter, a substantial distinction existed between a
fisherman who catches live fish with the intention of selling it live, and a fisherman who catches live fish with no intention at all of
selling it live, i.e., the former uses sodium cyanide while the latter does not. Further, the Ordinance applied equally to all those
belonging to one class.
On 25 October 1993 petitioners filed an Urgent Plea for the Immediate Issuance of a Temporary Restraining Order claiming
that despite the pendency of this case, Branch 50 of the Regional Trial Court of Palawan was bent on proceeding with Criminal
Case No. 11223 against petitioners Danilo Tano, Alfredo Tano, Eulogio Tremocha, Romualdo Tano, Baldomero Tano, Andres
Lemihan and Angel de Mesa for violation of Ordinance No. 2 of the Sangguniang Panlalawigan of Palawan. Acting on said plea,
we issued on 11 November 1993 a temporary restraining order directing Judge Angel Miclat of said court to cease and desist
from proceeding with the arraignment and pre-trial of Criminal Case No. 11223.
On 12 July 1994, we excused the Office of the Solicitor General from filing a comment, considering that as claimed by said
office in its Manifestation of 28 June 1994, respondents were already represented by counsel.
The rest of the respondents did not file any comment on the petition.
In the resolution of 15 September 1994, we resolved to consider the comment on the petition as the Answer, gave due
course to the petition and required the parties to submit their respective memoranda.
[2]

On 22 April 1997 we ordered impleaded as party respondents the Department of Agriculture and the Bureau of Fisheries
and Aquatic Resources and required the Office of the Solicitor General to comment on their behalf. But in light of the latters
motion of 9 July 1997 for an extension of time to file the comment which would only result in further delay, we dispensed with
said comment.
After due deliberation on the pleadings filed, we resolved to dismiss this petition for want of merit, on 22 July 1997, and
assigned it to the ponente for the writing of the opinion of the Court.
I
There are actually two sets of petitioners in this case. The first is composed of Alfredo Tano, Baldomero Tano, Danilo
Tano, Romualdo Tano, Teocenes Midello, Angel de Mesa, Eulogio Tremocha, Felipe Ongonion, Jr., Andres Linijan, and Felimon
de Mesa, who were criminally charged with violating Sangguniang Panlalawigan Resolution No. 33 and Ordinance No. 2, Series
of 1993, of the Province of Palawan, in Criminal Case No. 93-05-C of the 1
st
Municipal Circuit Trial Court (MCTC) of
Palawan;
[3]
and Robert Lim and Virginia Lim who were charged with violating City Ordinance No. 15-92 of Puerto Princesa City
and Ordinance No. 2, Series of 1993, of the Province of Palawan before the Office of the City Prosecutor of Puerto
Princesa.
[4]
All of them, with the exception of Teocenes Midello, Felipe Ongonion, Jr., Felimon de Mesa, Robert Lim and Virginia
Lim, are likewise the accused in Criminal Case No. 11223 for the violation of Ordinance No. 2 of the Sangguniang
Panlalawigan of Palawan, pending before Branch 50 of the Regional Trial Court of Palawan.
[5]

The second set of petitioners is composed of the rest of the petitioners numbering seventy-seven (77), all of whom, except
the Airline Shippers Association of Palawan -- an alleged private association of several marine merchants -- are natural persons
who claim to be fishermen.
The primary interest of the first set of petitioners is, of course, to prevent the prosecution, trial and determination of the
criminal cases until the constitutionality or legality of the Ordinances they allegedly violated shall have been resolved. The
second set of petitioners merely claim that they being fishermen or marine merchants, they would be adversely affected by the
ordinances.
As to the first set of petitioners, this special civil for certiorari must fail on the ground of prematurity amounting to a lack of
cause of action. There is no showing that the said petitioners, as the accused in the criminal cases, have filed motions to quash
the informations therein and that the same were denied. The ground available for such motions is that the facts charged therein
do not constitute an offense because the ordinances in question are unconstitutional.
[6]
It cannot then be said that the lower
courts acted without or in excess of jurisdiction or with grave abuse of discretion to justify recourse to the extraordinary remedy
of certiorari or prohibition. It must further be stressed that even if the petitioners did file motions to quash, the denial thereof
would not forthwith give rise to a cause of action under Rule 65 of the Rules of Court. The general rule is that where a motion to
quash is denied, the remedy therefrom is notcertiorari, but for the party aggrieved thereby to go to trial without prejudice to
reiterating special defenses involved in said motion, and if, after trial on the merits of adverse decision is rendered, to appeal
therefrom in the manner authorized by law.
[7]
And , even where in an exceptional circumstance such denial may be the subject of
a special civil action for certiorari, a motion for reconsideration must have to be filed to allow the court concerned an opportunity
to correct its errors, unless such motion may be dispensed with because of existing exceptional circumstances.
[8]
Finally, even if
a motion for reconsideration has been filed and denied, the remedy under Rule 65 is still unavailable absent any showing of the
grounds provided for in Section 1 thereof.
[9]
For obvious reasons, the petition at bar does not, and could not have , alleged any of
such grounds.
As to the second set of petitioners, the instant petition is obviously one for DECLARATORY RELIEF, i.e., for a declaration
that the Ordinances in question are a nullity ... for being unconstitutional.
[10]
As such, their petition must likewise fail, as this
Court is not possessed of original jurisdiction over petitions for declaratory relief even if only questions of law are invol ved,
[11]
it
being settled that the Court merely exercises appellate jurisdiction over such petitions.
[12]

II
Even granting arguendo that the first set of petitioners have a cause of action ripe for the extraordinary writ of certiorari,
there is here a clear disregard of the hierarchy of courts, and no special and important reason or exceptional or compelling
circumstance has been adduced why direct recourse to us should be allowed. While we have concurrent jurisdiction with
Regional Trial courts and with the Court of Appeals to issue writs of certiorari, prohibition, mandamus, quo warranto, habeas
corpus and injunction, such concurrence gives petitioners no unrestricted freedom of choice of court forum, so we held in
People v. Cuaresma:
[13]

This concurrence of jurisdiction is not to be taken as according to parties seeking any of the writs an absolute unrestrained
freedom of choice of the court to which application therefor will be directed. There is after all hierarchy of courts. That hierarchy
is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions
for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level (inferior) courts should be filed with the Regional Trial Court, and those against the latter,
with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed
only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established
policy. It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to
those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket.
The Court feels the need to reaffirm that policy at this time, and to enjoin strict adherence thereto in the light of what it perceives
to be a growing tendency on the part of litigants and lawyers to have their applications for the so-called extraordinary writs, and
sometimes even their appeals, passed upon and adjudicated directly and immediately by the highest tribunal of the land.
In Santiago v. Vasquez,
[14]
this Court forcefully expressed that the propensity of litigants and lawyers to disregard the
hierarchy of courts must be put to a halt, not only because of the imposition upon the precious time of this Court, but also
because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be
remanded or referred to the lower court, the proper forum under the rules of procedure, or as better equipped to resolve the
issues since this Court is not a trier of facts. We reiterated the judicial policy that this Court will not entertain direct resort to it
unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances
justify availment of a remedy within and calling for the exercise of [its] primary jurisdiction.
III
Notwithstanding the foregoing procedural obstacles against the first set of petitioners, we opt to resolve this case on its
merits considering that the lifetime of the challenged Ordinances is about to end. Ordinance No. 15-92 of the City of Puerto
Princesa is effective only up to 1 January 1998, while Ordinance No. 2 of the Province of Palawan, enacted on 19 February
1993, is effective for only five (5) years. Besides, these Ordinances were undoubtedly enacted in the exercise of powers under
the new LGC relative to the protection and preservation of the environment and are thus novel and of paramount importance. No
further delay then may be allowed in the resolution of the issues raised.
It is of course settled that laws (including ordinances enacted by local government units) enjoy the presumption of
constitutionality.
[15]
To overthrow this presumption, there must be a clear and unequivocal breach of the Constitution, not merely
a doubtful or argumentative contradiction. In short, the conflict with the Constitution must be shown beyond reasonable
doubt.
[16]
Where doubt exists, even if well founded, there can be no finding of unconstitutionality. To doubt is to sustain.
[17]

After a scrunity of the challenged Ordinances and the provisions of the Constitution petitioners claim to have been
violated, we find petitioners contentions baseless and so hold that the former do not suffer from any infirmity, both under the
Constitution and applicable laws.
Petitioners specifically point to Section 2, Article XII and Sections 2 and 7, Article XIII of the Constitution as having been
transgressed by the Ordinances.
The pertinent portion of Section 2 of Article XII reads:
SEC. 2. x x x
The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and
reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish
farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons.
Sections 2 and 7 of Article XIII provide:
Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of
initiative and self-reliance.
xxx
SEC. 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of
the communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through
appropriate technology and research, adequate financial, production, and marketing assistance, and other services. The State
shall also protect, develop, and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence
fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing
resources.
There is absolutely no showing that any of the petitioners qualifies as a subsistence or marginal fisherman. In their petition,
petitioner Airline Shippers Association of Palawan is described as a private association composed of Marine Merchants;
petitioners Robert Lim and Virginia Lim, as merchants; while the rest of the petitioners claim to be fishermen, without any
qualification, however, as to their status.
Since the Constitution does not specifically provide a definition of the terms subsistence or marginal fishermen,
[18]
they
should be construed in their general and ordinary sense. Amarginal fisherman is an individual engaged in fishing whose margin
of return or reward in his harvest of fish as measured by existing price levels is barely sufficient to yield a profit or cover the cost
of gathering the fish,
[19]
while a subsistence fisherman is one whose catch yields but the irreducible minimum for his
livelihood.
[20]
Section 131(p) of the LGC (R.A. No. 7160) defines a marginal farmer or fisherman as an individual engaged in
subsistence farming or fishing which shall be limited to the sale, barter or exchange of agricultural or marine products produced
by himself and his immediate family. It bears repeating that nothing in the record supports a finding that any petitioner falls
within these definitions.
Besides, Section 2 of Article XII aims primarily not to bestow any right to subsistence fishermen, but to lay stress on the
duty of the State to protect the nations marine wealth. What the provision merely recognizes is that the State may allow, by law,
cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays, and lagoons. Our survey of
the statute books reveals that the only provision of law which speaks of the preferential right of marginal fishermen is Section
149 of the LGC of 1991 which pertinently provides:
SEC. 149. Fishery Rentals, Fees and Charges. -- x x x
(b) The sangguniang bayan may:
(1) Grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry areas, within a definite
zone of the municipal waters, as determined by it: Provided, however, That duly registered organizations and cooperatives of
marginal fishermen shall have preferential right to such fishery privileges ....
In a Joint Administrative Order No. 3, dated 25 April 1996, the Secretary of the Department of Agriculture and the Secretary of
the Department of Interior and Local Government prescribed the guidelines on the preferential treatment of small fisherfolk
relative to the fishery right mentioned in Section 149. This case, however, does not involve such fishery right.
Anent Section 7 of Article XIII, it speaks not only of the use of communal marine and fishing resources, but of their
protection, development, and conservation. As hereafter shown, the ordinances in question are meant precisely to protect and
conserve our marine resources to the end that their enjoyment by the people may be guaranteed not only for the present
generation, but also for the generations to come.
The so-called preferential right of subsistence or marginal fishermen to the use of marine resources is not at all
absolute. In accordance with the Regalian Doctrine, marine resources belong to the State, and, pursuant to the first paragraph
of Section 2, Article XII of the Constitution, their exploration, development and utilization ... shall be under the full control and
supervision of the State. Moreover, their mandated protection, development, and conservation as necessarily recognized by
the framers of the Constitution, imply certain restrictions on whatever right of enjoyment there may be in favor of anyone. Thus,
as to the curtailment of the preferential treatment of marginal fisherman, the following exchange between Commissioner
Francisco Rodrigo and Commissioner Jose F.S. Bengzon, Jr., took place at the plenary session of the Constitutional
Commission:
MR. RODRIGO:
Let us discuss the implementation of this because I would not raise the hopes of our people, and afterwards fail in the
implementation. How will this be implemented? Will there be a licensing or giving of permits so that government
officials will know that one is really a marginal fisherman? Or if policeman say that a person is not a marginal
fisherman, he can show his permit, to prove that indeed he is one.
MR. BENGZON:
Certainly, there will be some mode of licensing insofar as this is concerned and this particular question could be
tackled when we discuss the Article on Local Governments -- whether we will leave to the local governments or to
Congress on how these things will be implemented. But certainly, I think our Congressmen and our local officials will
not be bereft of ideas on how to implement this mandate.
x x x
MR. RODRIGO:
So, once one is licensed as a marginal fisherman, he can go anywhere in the Philippines and fish in any fishing
grounds.
MR. BENGZON:
Subject to whatever rules and regulations and local laws that may be passed, may be existing or will be
passed.
[21]
(underscoring supplied for emphasis).
What must likewise be borne in mind is the state policy enshrined in the Constitution regarding the duty of the State to
protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of
nature.
[22]
On this score, in Oposa v. Factoran,
[23]
this Court declared:
While the right to balanced and healthful ecology is to be found under the Declaration of Principles the State Policies and not
under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated in the latter.
Such a right belongs to a different category of rights altogether for it concerns nothing less than self-preservation and self-
perpetuation - aptly and fittingly stressed by the petitioners - the advancement of which may even be said to predate all
governments and constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for they are
assumed to exist from the inception of humankind. If they are now explicitly mentioned in the fundamental charter, it is because
of the well-founded fear of its framers 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 else would be lost not
only for the present generation, but also for those to come - generations which stand to inherit nothing but parched earth
incapable of sustaining life.
The right to a balanced and healthful ecology carries with it a correlative duty to refrain from impairing the environment ...
The LGC provisions invoked by private respondents merely seek to give flesh and blood to the right of the people to a
balanced and healthful ecology. In fact, the General Welfare Clause, expressly mentions this right:
SEC. 16. General Welfare.-- Every local government unit shall exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall
ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the
right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. (underscoring
supplied).
Moreover, Section 5(c) of the LGC explicitly mandates that the general welfare provisions of the LGC shall be liberally
interpreted to give more powers to the local government units in accelerating economic development and upgrading the quality
of life for the people of the community.
The LGC vests municipalities with the power to grant fishery privileges in municipal waters and to impose rentals, fees or
charges therefor; to penalize, by appropriate ordinances, the use of explosives, noxious or poisonous substances,
electricity, muro-ami, and other deleterious methods of fishing; and to prosecute any violation of the provisions of applicable
fishery laws.
[24]
Further, the sangguniang bayan, the sangguniang panlungsod and the sangguniang panlalawigan are directed to
enact ordinances for the general welfare of the municipality and its inhabitants, which shall include, inter alia, ordinances that
[p]rotect the environment and impose appropriate penalties for acts which endanger the environment such as dynamite fishing
and other forms of destructive fishing ... and such other activities which result in pollution, acceleration of eutrophication of rivers
and lakes or of ecological imbalance.
[25]

Finally, the centerpiece of LGC is the system of decentralization
[26]
as expressly mandated by the
Constitution.
[27]
Indispensable thereto is devolution and the LGC expressly provides that [a]ny provision on a power of a local
government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of
devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power
shall be interpreted in favor of the local government unit concerned,
[28]
Devolution refers to the act by which the National
Government confers power and authority upon the various local government units to perform specific functions and
responsibilities.
[29]

One of the devolved powers enumerated in the section of the LGC on devolution is the enforcement of fishery laws in
municipal waters including the conservation of mangroves.
[30]
This necessarily includes enactment of ordinances to effectively
carry out such fishery laws within the municipal waters.
The term municipal waters, in turn, include not only streams, lakes, and tidal waters within the municipality, not being the
subject of private ownership and not comprised within the national parks, public forest, timber lands, forest reserves, or fishery
reserves, but also marine waters included between two lines drawn perpendicularly to the general coastline from points where
the boundary lines of the municipality or city touch the sea at low tide and a third line parallel with the general coastline and
fifteen kilometers from it.
[31]
Under P.D. No. 704, the marine waters included in municipal waters is limited to three nautical miles
from the general coastline using the above perpendicular lines and a third parallel line.
These fishery laws which local government units may enforce under Section 17(b), (2), (i) in municipal waters include: (1)
P.D. No. 704; (2) P.D. No. 1015 which, inter alia, authorizes the establishment of a closed season in any Philippine water if
necessary for conservation or ecological purposes; (3) P.D. No. 1219 which provides for the exploration, exploitation, utilization,
and conservation of coral resources; (4) R.A. No. 5474, as amended by B.P. Blg. 58, which makes it unlawful for any person,
association, or corporation to catch or cause to be caught, sell, offer to sell, purchase, or have in possession any of the fish
specie called gobiidae or ipon during closed season; and (5) R.A. No. 6451 which prohibits and punishes electrofishing, as well
as various issuances of the BFAR.
To those specifically devolved insofar as the control and regulation of fishing in municipal waters and the protection of its
marine environment are concerned, must be added the following:
1. Issuance of permits to construct fish cages within municipal waters;
2. Issuance of permits to gather aquarium fishes within municipal waters;
3. Issuance of permits to gather kapis shells within municipal waters;
4. Issuance of permits to gather/culture shelled mollusks within municipal waters;
5. Issuance of licenses to establish seaweed farms within municipal waters;
6. Issuance of licenses to establish culture pearls within municipal waters;
7. Issuance of auxiliary invoice to transport fish and fishery products; and
8. Establishment of closed season in municipal waters.
These functions are covered in the Memorandum of Agreement of 5 April 1994 between the Department of Agriculture and the
Department of Interior and Local Government.
In light then of the principles of decentralization and devolution enshrined in the LGC and the powers granted to local
government units under Section 16 (the General Welfare Clause), and under Sections 149, 447 (a) (1) (vi), 458 (a) (1) (vi) and
468 (a) (1) (vi), which unquestionably involve the exercise of police power, the validity of the questioned Ordinances cannot be
doubted.
Parenthetically, we wish to add that these Ordinances find full support under R.A. No. 7611, otherwise known as the
Strategic Environmental Plan (SEP) for Palawan Act, approved on 19 July 1992. This statute adopts a comprehensive
framework for the sustainable development of Palawan compatible with protecting and enhancing the natural resources and
endangered environment of the province, which shall serve to guide the local government of Palawan and the government
agencies concerned in the formulation and implementation of plans, programs and projects affecting said province.
[32]

At this time then, it would be appropriate to determine the relation between the assailed Ordinances and the aforesaid
powers of the Sangguniang Panlungsod of the City of Puerto Princesa and the Sangguniang Panlalawigan of the Province of
Palawan to protect the environment. To begin, we ascertain the purpose of the Ordinances as set forth in the statement of
purposes or declaration of policies quoted earlier.
It is clear to the Court that both Ordinances have two principal objectives or purposes: (1) to establish a closed season for
the species of fish or aquatic animals covered therein for a period of five years, and (2) to protect the corals of the marine waters
of the City of Puerto Princesa and the Province of Palawan from further destruction due to illegal fishing activities.
The accomplishment of the first objective is well within the devolved power to enforce fishery laws in municipal waters, such
as P.D. No. 1015, which allows the establishment of closed seasons. The devolution of such power has been expressly
confirmed in the Memorandum of Agreement of 5 April 1994 between the Department of Agriculture and the Department of
Interior and Local Government.
The realization of the second objective falls within both the general welfare clause of the LGC and the express mandate
thereunder to cities and provinces to protect the environment and impose appropriate penalties for acts which endanger the
environment.
[33]

The destruction of the coral reefs results in serious, if not irreparable, ecological imbalance, for coral reefs are among the
natures life-support systems.
[34]
They collect, retain, and recycle nutrients for adjacent nearshore areas such as mangroves,
seagrass beds, and reef flats; provide food for marine plants and animals; and serve as a protective shelter for aquatic
organisms.
[35]
It is said that [e]cologically, the reefs are to the oceans what forests are to continents: they are shelter and
breeding grounds for fish and plant species that will disappear without them.
[36]

The prohibition against catching live fish stems, in part, from the modern phenomenon of live-fish trade which entails the
catching of so-called exotic tropical species of fish not only for aquarium use in the West, but also for the market for live
banquet fish [which] is virtually insatiable in ever more affluent Asia.
[37]
These exotic species are coral-dwellers, and fishermen
catch them by diving in shallow water with corraline habitats and squirting sodium cyanide poison at passing fish directly or onto
coral crevices; once affected the fish are immobilized [merely stunned] and then scooped by hand.
[38]
The diver then surfaces
and dumps his catch into a submerged net attached to the skiff . Twenty minutes later, the fish can swim normally. Back on
shore, they are placed in holding pens, and within a few weeks, they expel the cyanide from their system and are ready to be
hauled. Then they are placed in saltwater tanks or packaged in plastic bags filled with seawater for shipment by air freight to
major markets for live food fish.
[39]
While the fish are meant to survive, the opposite holds true for their former home as [a]fter
the fisherman squirts the cyanide, the first thing to perish is the reef algae, on which fish feed. Days later, the living coral starts
to expire. Soon the reef loses its function as habitat for the fish, which eat both the algae and invertebrates that cling to the
coral. The reef becomes an underwater graveyard, its skeletal remains brittle, bleached of all color and vulnerabl e to erosion
from the pounding of the waves.
[40]
It has been found that cyanide fishing kills most hard and soft corals within three months of
repeated application.
[41]

The nexus then between the activities barred by Ordinance No. 15-92 of the City of Puerto Princesa and the
prohibited acts provided in Ordinance No. 2, Series of 1993 of the Province of Palawan, on one hand, and the use of sodium
cyanide, on the other, is painfully obvious. In sum, the public purpose and reasonableness of the Ordinances may not then be
controverted.
As to Office Order No. 23, Series of 1993, issued by Acting City Mayor Amado L. Lucero of the City of Puerto Princesa, we
find nothing therein violative of any constitutional or statutory provision. The Order refers to the implementation of the challenged
ordinance and is not the Mayors Permit.
The dissenting opinion of Mr. Justice Josue N. Bellosillo relies upon the lack of authority on the part of the Sangguniang
Panlungsod of Puerto Princesa to enact Ordinance No. 15, Series of 1992, on the theory that the subject thereof is within the
jurisdiction and responsibility of the Bureau of Fisheries and Aquatic Resources (BFAR) under P.D. No. 704, otherwise known as
the Fisheries Decree of 1975; and that, in any event, the Ordinance is unenforceable for lack of approval by the Secretary of the
Department of Natural Resources (DNR), likewise in accordance with P.D. No. 704.
The majority is unable to accommodate this view. The jurisdiction and responsibility of the BFAR under P. D. no. 704, over
the management, conservation, development, protection, utilization and disposition of all fishery and aquatic resources of the
country is not all-encompassing. First, Section 4 thereof excludes from such jurisdiction and responsibility municipal waters,
which shall be under the municipal or city government concerned, except insofar as fishpens and seaweed culture in municipal
in municipal centers are concerned. This section provides, however, that all municipal or city ordinances and resolutions
affecting fishing and fisheries and any disposition thereunder shall be submitted to the Secretary of the Department of Natural
Resources for appropriate action and shall have full force and effect only upon his approval.
[42]

Second, it must at once be pointed out that the BFAR is no longer under the Department of Natural Resources (now
Department of Environment and Natural Resources). Executive Order No. 967 of 30 June 1984 transferred the BFAR from the
control and supervision of the Minister (formerly Secretary) of Natural Resources to the Ministry of Agriculture and Food (MAF)
and converted it into a mere staff agency thereof, integrating its functions with the regional offices of the MAF.
In Executive Order No. 116 of 30 January 1987, which reorganized the MAF, the BFAR was retained as an attached
agency of the MAF. And under the Administrative Code of 1987,
[43]
the BFAR is placed under the Title concerning the
Department of Agriculture.
[44]

Therefore, it is incorrect to say that the challenged Ordinance of the City of Puerto Princesa is invalid or unenforceable
because it was not approved by the Secretary of the DENR. If at all, the approval that should be sought would be that of the
Secretary of the Department of Agriculture (not DENR) of municipal ordinances affecting fishing and fisheries in municipal
waters has been dispensed with in view of the following reasons:
(1) Section 534 (Repealing Clause) of the LGC expressly repeals or amends Section 16 and 29 of P.D. No.
704
[45]
insofar that they are inconsistent with the provisions of the LGC.
(2) As discussed earlier, under the general welfare clause of the LGC, local government units have the power, inter
alia, to enact ordinances to enhance the right of the people to a balanced ecology. It likewise specifically vests municipalities
with the power to grant fishery privileges in municipal waters, and impose rentals, fees or charges therefor; to penali ze, by
appropriate ordinances, the use of explosives, noxious or poisonous substances, electricity, muro-ami, and other deleterious
methods of fishing; and to prosecute other methods of fishing; and to prosecute any violation of the provisions of applicabl e
fishing laws.
[46]
Finally, it imposes upon the sangguniang bayan, the sangguniang panlungsod, and the sangguniang
panlalawigan the duty to enact ordinances to [p]rotect the environment and impose appropriate penalties for acts which
endanger the environment such as dynamite fishing and other forms of destructive fishing and such other activities which
result in pollution, acceleration of eutrophication of rivers and lakes or of ecological imbalance.
[47]

In closing, we commend the Sangguniang Panlungsod of the City of Puerto Princesa and Sangguniang Panlalawigan of the
Province of Palawan for exercising the requisite political will to enact urgently needed legislation to protect and enhance the
marine environment, thereby sharing in the herculean task of arresting the tide of ecological destruction. We hope that other
local government units shall now be roused from their lethargy and adopt a more vigilant stand in the battle against the
decimation of our legacy to future generations. At this time, the repercussions of any further delay in their response may prove
disastrous, if not, irreversible.
WHEREFORE, the instant petition is DISMISSED for lack of merit and the temporary restraining order issued on 11
November 1993 is LIFTED.
No pronouncement as to costs.
SO ORDERED.
Narvasa, C.J., Padilla, Vitug, Panganiban, and Torres, Jr., JJ., concur.
Romero, Melo, Puno, and Francisco, JJ., joined the ponencias of Justices Davide and Mendoza.
Bellosillo, J., see dissenting opinion.
Kapunan and Hermosisima, Jr., JJ., join Justice Bellosillo in his dissenting opinion.
Mendoza, see concurring opinion.
Regalado, J., on official leave.

[G.R. No. 127882. January 27, 2004]
LA BUGAL-BLAAN TRIBAL ASSOCIATION, INC., represented by its Chairman FLONG MIGUEL M. LUMAYONG,
WIGBERTO E. TAADA, PONCIANO BENNAGEN, JAIME TADEO, RENATO R. CONSTANTINO, JR., FLONG
AGUSTIN M. DABIE, ROBERTO P. AMLOY, RAQIM L. DABIE, SIMEON H. DOLOJO, IMELDA M. GANDON, LENY
B. GUSANAN, MARCELO L. GUSANAN, QUINTOL A. LABUAYAN, LOMINGGES D. LAWAY, BENITA P.
TACUAYAN, minors JOLY L. BUGOY, represented by his father UNDERO D. BUGOY, ROGER M. DADING,
represented by his father ANTONIO L. DADING, ROMY M. LAGARO, represented by his father TOTING A.
LAGARO, MIKENY JONG B. LUMAYONG, represented by his father MIGUEL M. LUMAYONG, RENE T. MIGUEL,
represented by his mother EDITHA T. MIGUEL, ALDEMAR L. SAL, represented by his father DANNY M. SAL,
DAISY RECARSE, represented by her mother LYDIA S. SANTOS, EDWARD M. EMUY, ALAN P. MAMPARAIR,
MARIO L. MANGCAL, ALDEN S. TUSAN, AMPARO S. YAP, VIRGILIO CULAR, MARVIC M.V.F. LEONEN, JULIA
REGINA CULAR, GIAN CARLO CULAR, VIRGILIO CULAR, JR., represented by their father VIRGILIO CULAR,
PAUL ANTONIO P. VILLAMOR, represented by his parents JOSE VILLAMOR and ELIZABETH PUA-VILLAMOR,
ANA GININA R. TALJA, represented by her father MARIO JOSE B. TALJA, SHARMAINE R. CUNANAN,
represented by her father ALFREDO M. CUNANAN, ANTONIO JOSE A. VITUG III, represented by his mother
ANNALIZA A. VITUG, LEAN D. NARVADEZ, represented by his father MANUEL E. NARVADEZ, JR., ROSERIO
MARALAG LINGATING, represented by her father RIO OLIMPIO A. LINGATING, MARIO JOSE B. TALJA, DAVID
E. DE VERA, MARIA MILAGROS L. SAN JOSE, SR., SUSAN O. BOLANIO, OND, LOLITA G. DEMONTEVERDE,
BENJIE L. NEQUINTO,
[1]
ROSE LILIA S. ROMANO, ROBERTO S. VERZOLA, EDUARDO AURELIO C. REYES,
LEAN LOUEL A. PERIA, represented by his father ELPIDIO V. PERIA,
[2]
GREEN FORUM PHILIPPINES, GREEN
FORUM WESTERN VISAYAS, (GF-WV), ENVIRONMETAL LEGAL ASSISTANCE CENTER (ELAC), PHILIPPINE
KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN
(KAISAHAN),
[3]
KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN
(KAISAHAN), PARTNERSHIP FOR AGRARIAN REFORM and RURAL DEVELOPMENT SERVICES, INC.
(PARRDS), PHILIPPINE PART`NERSHIP FOR THE DEVELOPMENT OF HUMAN RESOURCES IN THE RURAL
AREAS, INC. (PHILDHRRA), WOMENS LEGAL BUREAU (WLB), CENTER FOR ALTERNATIVE DEVELOPMENT
INITIATIVES, INC. (CADI), UPLAND DEVELOPMENT INSTITUTE (UDI), KINAIYAHAN FOUNDATION, INC.,
SENTRO NG ALTERNATIBONG LINGAP PANLIGAL (SALIGAN), LEGAL RIGHTS AND NATURAL RESOURCES
CENTER, INC. (LRC), petitioners, vs. VICTOR O. RAMOS, SECRETARY, DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES (DENR), HORACIO RAMOS, DIRECTOR, MINES AND GEOSCIENCES BUREAU (MGB-
DENR), RUBEN TORRES, EXECUTIVE SECRETARY, and WMC (PHILIPPINES), INC.
[4]
respondents.
D E C I S I O N
CARPIO-MORALES, J .:
The present petition for mandamus and prohibition assails the constitutionality of Republic Act No. 7942,
[5]
otherwise known
as the PHILIPPINE MINING ACT OF 1995, along with the Implementing Rules and Regulations issued pursuant thereto,
Department of Environment and Natural Resources (DENR) Administrative Order 96-40, and of the Financial and Technical
Assistance Agreement (FTAA) entered into on March 30, 1995 by the Republic of the Philippines and WMC (Philippines), Inc.
(WMCP), a corporation organized under Philippine laws.
On July 25, 1987, then President Corazon C. Aquino issued Executive Order (E.O.) No. 279
[6]
authorizing the DENR
Secretary to
accept, consider and evaluate proposals from foreign-owned corporations or foreign investors for contracts or 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. In entering into such
proposals, the President shall consider the real contributions to the economic growth and general welfare of the country that will
be realized, as well as the development and use of local scientific and technical resources that will be promoted by the proposed
contract or agreement. Until Congress shall determine otherwise, large-scale mining, for purpose of this Section, shall mean
those proposals for contracts or agreements for mineral resources exploration, development, and utilization involving a
committed capital investment in a single mining unit project of at least Fifty Million Dollars in United States Currency (US
$50,000,000.00).
[7]

On March 3, 1995, then President Fidel V. Ramos approved R.A. No. 7942 to govern the exploration, development,
utilization and processing of all mineral resources.
[8]
R.A. No. 7942 defines the modes of mineral agreements for mining
operations,
[9]
outlines the procedure for their filing and approval,
[10]
assignment/transfer
[11]
and withdrawal,
[12]
and fixes their
terms.
[13]
Similar provisions govern financial or technical assistance agreements.
[14]

The law prescribes the qualifications of contractors
[15]
and grants them certain rights, including timber,
[16]
water
[17]
and
easement
[18]
rights, and the right to possess explosives.
[19]
Surface owners, occupants, or concessionaires are forbidden from
preventing holders of mining rights from entering private lands and concession areas.
[20]
A procedure for the settlement of
conflicts is likewise provided for.
[21]

The Act restricts the conditions for exploration,
[22]
quarry
[23]
and other
[24]
permits. It regulates the transport, sale and
processing of minerals,
[25]
and promotes the development of mining communities, science and mining technology,
[26]
and safety
and environmental protection.
[27]

The governments share in the agreements is spelled out and allocated,
[28]
taxes and fees are imposed,
[29]
incentives
granted.
[30]
Aside from penalizing certain acts,
[31]
the law likewise specifies grounds for the cancellation, revocation and
termination of agreements and permits.
[32]

On April 9, 1995, 30 days following its publication on March 10, 1995 in Malaya and Manila Times, two newspapers of
general circulation, R.A. No. 7942 took effect.
[33]

Shortly before the effectivity of R.A. No. 7942, however, or on March 30, 1995, the President entered into an FTAA with
WMCP covering 99,387 hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato.
[34]

On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order (DAO) No. 95-23, s. 1995,
otherwise known as the Implementing Rules and Regulations of R.A. No. 7942. This was later repealed by DAO No. 96-40, s.
1996 which was adopted on December 20, 1996.
On January 10, 1997, counsels for petitioners sent a letter to the DENR Secretary demanding that the DENR stop the
implementation of R.A. No. 7942 and DAO No. 96-40,
[35]
giving the DENR fifteen days from receipt
[36]
to act thereon. The
DENR, however, has yet to respond or act on petitioners letter.
[37]

Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a temporary restraining
order. They allege that at the time of the filing of the petition, 100 FTAA applications had already been filed, covering an area of
8.4 million hectares,
[38]
64 of which applications are by fully foreign-owned corporations covering a total of 5.8 million hectares,
and at least one by a fully foreign-owned mining company over offshore areas.
[39]

Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction:
I
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows fully foreign owned corporations to explore, develop, utilize and exploit mineral resources in a
manner contrary to Section 2, paragraph 4, Article XII of the Constitution;
II
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows the taking of private property without the determination of public use and for just compensation;
III
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it violates Sec. 1, Art. III of the Constitution;
IV
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows enjoyment by foreign citizens as well as fully foreign owned corporations of the nations marine
wealth contrary to Section 2, paragraph 2 of Article XII of the Constitution;
V
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows priority to foreign and fully foreign owned corporations in the exploration, development and
utilization of mineral resources contrary to Article XII of the Constitution;
VI
x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No. 7942, the latter being
unconstitutional in that it allows the inequitable sharing of wealth contrary to Sections [sic] 1, paragraph 1, and Section 2,
paragraph 4[,] [Article XII] of the Constitution;
VII
x x x in recommending approval of and implementing the Financial and Technical Assistance Agreement between the President
of the Republic of the Philippines and Western Mining Corporation Philippines Inc. because the same is illegal and
unconstitutional.
[40]

They pray that the Court issue an order:
(a) Permanently enjoining respondents from acting on any application for Financial or Technical Assistance Agreements;
(b) Declaring the Philippine Mining Act of 1995 or Republic Act No. 7942 as unconstitutional and null and void;
(c) Declaring the Implementing Rules and Regulations of the Philippine Mining Act contained in DENR Administrative Order
No. 96-40 and all other similar administrative issuances as unconstitutional and null and void; and
(d) Cancelling the Financial and Technical Assistance Agreement issued to Western Mining Philippines, Inc. as
unconstitutional, illegal and null and void.
[41]

Impleaded as public respondents are Ruben Torres, the then Executive Secretary, Victor O. Ramos, the then DENR
Secretary, and Horacio Ramos, Director of the Mines and Geosciences Bureau of the DENR. Also impleaded is private
respondent WMCP, which entered into the assailed FTAA with the Philippine Government. WMCP is owned by WMC
Resources International Pty., Ltd. (WMC), a wholly owned subsidiary of Western Mining Corporation Holdings Limited, a
publicly listed major Australian mining and exploration company.
[42]
By WMCPs information, it is a 100% owned subsidiary
of WMC LIMITED.
[43]

Respondents, aside from meeting petitioners contentions, argue that the requisites for judicial inquiry have not been met
and that the petition does not comply with the criteria for prohibition and mandamus. Additionally, respondent WMCP argues
that there has been a violation of the rule on hierarchy of courts.
After petitioners filed their reply, this Court granted due course to the petition. The parties have since filed their respective
memoranda.
WMCP subsequently filed a Manifestation dated September 25, 2002 alleging that on January 23, 2001, WMC sold all its
shares in WMCP to Sagittarius Mines, Inc. (Sagittarius), a corporation organized under Philippine laws.
[44]
WMCP was
subsequently renamed Tampakan Mineral Resources Corporation.
[45]
WMCP claims that at least 60% of the equity of
Sagittarius is owned by Filipinos and/or Filipino-owned corporations while about 40% is owned by Indophil Resources NL, an
Australian company.
[46]
It further claims that by such sale and transfer of shares, WMCP has ceased to be connected in any
way with WMC.
[47]

By virtue of such sale and transfer, the DENR Secretary, by Order of December 18, 2001,
[48]
approved the transfer and
registration of the subject FTAA from WMCP to Sagittarius. Said Order, however, was appealed by Lepanto Consolidated
Mining Co. (Lepanto) to the Office of the President which upheld it by Decision of July 23, 2002.
[49]
Its motion for reconsideration
having been denied by the Office of the President by Resolution of November 12, 2002,
[50]
Lepanto filed a petition for
review
[51]
before the Court of Appeals. Incidentally, two other petitions for review related to the approval of the transfer and
registration of the FTAA to Sagittarius were recently resolved by this Court.
[52]

It bears stressing that this case has not been rendered moot either by the transfer and registration of the FTAA to a Filipino-
owned corporation or by the non-issuance of a temporary restraining order or a preliminary injunction to stay the above-said July
23, 2002 decision of the Office of the President.
[53]
The validity of the transfer remains in dispute and awaits final judicial
determination. This assumes, of course, that such transfer cures the FTAAs alleged unconstitutionality, on which question
judgment is reserved.
WMCP also points out that the original claimowners of the major mineralized areas included in the WMCP FTAA, namely,
Sagittarius, Tampakan Mining Corporation, and Southcot Mining Corporation, are all Filipino-owned corporations,
[54]
each of
which was a holder of an approved Mineral Production Sharing Agreement awarded in 1994, albeit their respective mineral
claims were subsumed in the WMCP FTAA;
[55]
and that these three companies are the same companies that consolidated their
interests in Sagittarius to whom WMC sold its 100% equity in WMCP.
[56]
WMCP concludes that in the event that the FTAA is
invalidated, the MPSAs of the three corporations would be revived and the mineral claims would revert to their original
claimants.
[57]

These circumstances, while informative, are hardly significant in the resolution of this case, it involving the validity of the
FTAA, not the possible consequences of its invalidation.
Of the above-enumerated seven grounds cited by petitioners, as will be shown later, only the first and the last need be
delved into; in the latter, the discussion shall dwell only insofar as it questions the effectivity of E. O. No. 279 by virtue of which
order the questioned FTAA was forged.
I
Before going into the substantive issues, the procedural questions posed by respondents shall first be tackled.
REQUISITES FOR JUDICIAL REVIEW
When an issue of constitutionality is raised, this Court can exercise its power of judicial review only if the following
requisites are present:
(1) The existence of an actual and appropriate case;
(2) A personal and substantial interest of the party raising the constitutional question;
(3) The exercise of judicial review is pleaded at the earliest opportunity; and
(4) The constitutional question is the lis mota of the case.
[58]

Respondents claim that the first three requisites are not present.
Section 1, Article VIII of the Constitution states that (j)udicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable. The power of judicial review, therefore, is limited
to the determination of actual cases and controversies.
[59]

An actual case or controversy means an existing case or controversy that is appropriate or ripe for determination, not
conjectural or anticipatory,
[60]
lest the decision of the court would amount to an advisory opinion.
[61]
The power does not extend to
hypothetical questions
[62]
since any attempt at abstraction could only lead to dialectics and barren legal questions and to sterile
conclusions unrelated to actualities.
[63]

Legal standing or locus standi has been defined as a personal and 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,
[64]
alleging more than a
generalized grievance.
[65]
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.
[66]
Unless a person is injuriously affected in any of his constitutional
rights by the operation of statute or ordinance, he has no standing.
[67]

Petitioners traverse a wide range of sectors. Among them are La Bugal Blaan Tribal Association, Inc., a farmers and
indigenous peoples cooperative organized under Philippine laws representing a community actually affected by the mining
activities of WMCP, members of said cooperative,
[68]
as well as other residents of areas also affected by the mining activities of
WMCP.
[69]
These petitioners have standing to raise the constitutionality of the questioned FTAA as they allege a personal and
substantial injury. They claim that they would suffer irremediable displacement
[70]
as a result of the implementation of the
FTAA allowing WMCP to conduct mining activities in their area of residence. They thus meet the appropriate case requirement
as they assert an interest adverse to that of respondents who, on the other hand, insist on the FTAAs validity.
In view of the alleged impending injury, petitioners also have standing to assail the validity of E.O. No. 279, by authority of
which the FTAA was executed.
Public respondents maintain that petitioners, being strangers to the FTAA, cannot sue either or both contracting parties to
annul it.
[71]
In other words, they contend that petitioners are not real parties in interest in an action for the annulment of contract.
Public respondents contention fails. The present action is not merely one for annulment of contract but for prohibition and
mandamus. Petitioners allege that public respondents acted without or in excess of jurisdiction in implementing the FTAA, which
they submit is unconstitutional. As the case involves constitutional questions, this Court is not concerned with whether
petitioners are real parties in interest, but with whether they have legal standing. As held in Kilosbayan v. Morato:
[72]

x x x. It is important to note . . . that standing because of its constitutional and public policy underpinnings, is very different from
questions relating to whether a particular plaintiff is the real party in interest or has capacity to sue. Although all three
requirements are directed towards ensuring that only certain parties can maintain an action, standing restrictions require a partial
consideration of the merits, as well as broader policy concerns relating to the proper role of the judiciary in certain
areas.[] (FRIEDENTHAL, KANE AND MILLER, CIVIL PROCEDURE 328 [1985])
Standing is a special concern in constitutional law because in some cases suits are brought not by parties who have been
personally injured by the operation of a law or by official action taken, but by concerned citizens, taxpayers or voters who
actually sue in the public interest. Hence, the question in standing is whether such parties have alleged such a personal stake
in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which
the court so largely depends for illumination of difficult constitutional questions. (Baker v. Carr, 369 U.S. 186, 7 L.Ed.2d 633
[1962].)
As earlier stated, petitioners meet this requirement.
The challenge against the constitutionality of R.A. No. 7942 and DAO No. 96-40 likewise fulfills the requisites of
justiciability. Although these laws were not in force when the subject FTAA was entered into, the question as to their validity is
ripe for adjudication.
The WMCP FTAA provides:
14.3 Future Legislation
Any term and condition more favourable to Financial &Technical Assistance Agreement contractors resulting
from repeal or amendment of any existing law or regulation or from the enactment of a law, regulation or
administrative order shall be considered a part of this Agreement.
It is undisputed that R.A. No. 7942 and DAO No. 96-40 contain provisions that are more favorable to WMCP, hence, these laws,
to the extent that they are favorable to WMCP, govern the FTAA.
In addition, R.A. No. 7942 explicitly makes certain provisions apply to pre-existing agreements.
SEC. 112. Non-impairment of Existing Mining/Quarrying Rights. x x x That the provisions of Chapter XIV on government
share in mineral production-sharing agreement and of Chapter XVI on incentives of this Act shall immediately govern and apply
to a mining lessee or contractor unless the mining lessee or contractor indicates his intention to the secretary, in writing, not to
avail of said provisions x x x Provided, finally, That such leases, production-sharing agreements, financial or technical
assistance agreements shall comply with the applicable provisions of this Act and its implementing rules and regulations.
As there is no suggestion that WMCP has indicated its intention not to avail of the provisions of Chapter XVI of R.A. No. 7942, it
can safely be presumed that they apply to the WMCP FTAA.
Misconstruing the application of the third requisite for judicial review that the exercise of the review is pleaded at the
earliest opportunity WMCP points out that the petition was filed only almost two years after the execution of the FTAA, hence,
not raised at the earliest opportunity.
The third requisite should not be taken to mean that the question of constitutionality must be raised immediately after the
execution of the state action complained of. That the question of constitutionality has not been raised before is not a valid
reason for refusing to allow it to be raised later.
[73]
A contrary rule would mean that a law, otherwise unconstitutional, would lapse
into constitutionality by the mere failure of the proper party to promptly file a case to challenge the same.
PROPRIETY OF PROHIBITION
AND MANDAMUS
Before the effectivity in July 1997 of the Revised Rules of Civil Procedure, Section 2 of Rule 65 read:
SEC. 2. Petition for prohibition. When the proceedings of any tribunal, corporation, board, or person, whether exercising
functions judicial or ministerial, are without or in excess of its or his jurisdiction, or with grave abuse of discretion, and there is no
appeal or any other 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 commanding the
defendant to desist from further proceeding in the action or matter specified therein.
Prohibition is a preventive remedy.
[74]
It seeks a judgment ordering the defendant to desist from continuing with the
commission of an act perceived to be illegal.
[75]

The petition for prohibition at bar is thus an appropriate remedy. While the execution of the contract itself may be fait
accompli, its implementation is not. Public respondents, in behalf of the Government, have obligations to fulfill under said
contract. Petitioners seek to prevent them from fulfilling such obligations on the theory that the contract is unconstitutional and,
therefore, void.
The propriety of a petition for prohibition being upheld, discussion of the propriety of the mandamus aspect of the petition is
rendered unnecessary.
HIERARCHY OF COURTS
The contention that the filing of this petition violated the rule on hierarchy of courts does not likewise lie. The rule has been
explained thus:
Between two courts of concurrent original jurisdiction, it is the lower court that should initially pass upon the issues of a
case. That way, as a particular case goes through the hierarchy of courts, it is shorn of all but the important legal issues or
those of first impression, which are the proper subject of attention of the appellate court. This is a procedural rule borne of
experience and adopted to improve the administration of justice.
This Court has consistently enjoined litigants to respect the hierarchy of courts. Although this Court has concurrent jurisdiction
with the Regional Trial Courts and the Court of Appeals to issue writs ofcertiorari, prohibition, mandamus, quo warranto, habeas
corpus and injunction, such concurrence does not give a party unrestricted freedom of choice of court forum. The resort to this
Courts primary jurisdiction to issue said writs shall be allowed only where the redress desired cannot be obtained in the
appropriate courts or where exceptional and compelling circumstances justify such invocation. We held in People v.
Cuaresma that:
A becoming regard for judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first
level (inferior) courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A
direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only where there
are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a
policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters
within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket x x x.
[76]
[Emphasis supplied.]
The repercussions of the issues in this case on the Philippine mining industry, if not the national economy, as well as the
novelty thereof, constitute exceptional and compelling circumstances to justify resort to this Court in the first instance.
In all events, this Court has the discretion to take cognizance of a suit which does not satisfy the requirements of an actual
case or legal standing when paramount public interest is involved.
[77]
When the issues raised are of paramount importance to the
public, this Court may brush aside technicalities of procedure.
[78]

II
Petitioners contend that E.O. No. 279 did not take effect because its supposed date of effectivity came after President
Aquino had already lost her legislative powers under the Provisional Constitution.
And they likewise claim that the WMC FTAA, which was entered into pursuant to E.O. No. 279, violates Section 2, Article
XII of the Constitution because, among other reasons:
(1) It allows foreign-owned companies to extend more than mere financial or technical assistance to the State in the
exploitation, development, and utilization of minerals, petroleum, and other mineral oils, and even permits foreign owned
companies to operate and manage mining activities.
(2) It allows foreign-owned companies to extend both technical and financial assistance, instead of
either technical or financial assistance.
To appreciate the import of these issues, a visit to the history of the pertinent constitutional provision, the concepts
contained therein, and the laws enacted pursuant thereto, is in order.
Section 2, Article XII reads in full:
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.
The State shall protect the nations marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and
reserve its use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish
farming, with priority to subsistence fishermen and fish-workers in rivers, lakes, bays, and lagoons.
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. In
such agreements, the State shall promote the development and use of local scientific and technical resources.
The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its
execution.
THE SPANISH REGIME
AND THE REGALIAN DOCTRINE
The first sentence of Section 2 embodies the Regalian doctrine or jura regalia. Introduced by Spain into these Islands, this
feudal concept is based on the States power of dominium, which is the capacity of the State to own or acquire property.
[79]

In its broad sense, the term jura regalia refers to royal rights, or those rights which the King has by virtue of his prerogatives. In
Spanish law, it refers to a right which the sovereign has over anything in which a subject has a right of property
or propriedad. These were rights enjoyed during feudal times by the king as the sovereign.
The theory of the feudal system was that title to all lands was originally held by the King, and while the use of lands was granted
out to others who were permitted to hold them under certain conditions, the King theoretically retained the title. By fiction of law,
the King was regarded as the original proprietor of all lands, and the true and only source of title, and from him all lands were
held. The theory of jura regalia was therefore nothing more than a natural fruit of conquest.
[80]

The Philippines having passed to Spain by virtue of discovery and conquest,
[81]
earlier Spanish decrees declared that all
lands were held from the Crown.
[82]

The Regalian doctrine extends not only to land but also to all natural wealth that may be found in the bowels of the
earth.
[83]
Spain, in particular, recognized the unique value of natural resources, viewing them, especially minerals, as an
abundant source of revenue to finance its wars against other nations.
[84]
Mining laws during the Spanish regime reflected this
perspective.
[85]

THE AMERICAN OCCUPATION AND
THE CONCESSION REGIME
By the Treaty of Paris of December 10, 1898, Spain ceded the archipelago known as the Philippine Islands to the United
States. The Philippines was hence governed by means of organic acts that were in the nature of charters serving as a
Constitution of the occupied territory from 1900 to 1935.
[86]
Among the principal organic acts of the Philippines was the Act of
Congress of July 1, 1902, more commonly known as the Philippine Bill of 1902, through which the United States Congress
assumed the administration of the Philippine Islands.
[87]
Section 20 of said Bill reserved the disposition of mineral lands of the
public domain from sale. Section 21 thereof allowed the free and open exploration, occupation and purchase of mineral deposits
not only to citizens of the Philippine Islands but to those of the United States as well:
Sec. 21. That all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and unsurveyed, are hereby
declared to be free and open to exploration, occupation and purchase, and the land in which they are found, to occupation and
purchase, by citizens of the United States or of said Islands: Provided, That when on any lands in said Islands entered and
occupied as agricultural lands under the provisions of this Act, but not patented, mineral deposits have been found, the working
of such mineral deposits is forbidden until the person, association, or corporation who or which has entered and is occupying
such lands shall have paid to the Government of said Islands such additional sum or sums as will make the total amount paid for
the mineral claim or claims in which said deposits are located equal to the amount charged by the Government for the same as
mineral claims.
Unlike Spain, the United States considered natural resources as a source of wealth for its nationals and saw fit to allow both
Filipino and American citizens to explore and exploit minerals in public lands, and to grant patents to private mineral lands.
[88]
A
person who acquired ownership over a parcel of private mineral land pursuant to the laws then prevailing could exclude other
persons, even the State, from exploiting minerals within his property.
[89]
Thus, earlier jurisprudence
[90]
held that:
A valid and subsisting location of mineral land, made and kept up in accordance with the provisions of the statutes of the United
States, has the effect of a grant by the United States of the present and exclusive possession of the lands located, and this
exclusive right of possession and enjoyment continues during the entire life of the location. x x x.
x x x.
The discovery of minerals in the ground by one who has a valid mineral location perfects his claim and his location not only
against third persons, but also against the Government. x x x. [Italics in the original.]
The Regalian doctrine and the American system, therefore, differ in one essential respect. Under the Regalian theory,
mineral rights are not included in a grant of land by the state; under the American doctrine, mineral rights are included in a grant
of land by the government.
[91]

Section 21 also made possible the concession (frequently styled permit, license or lease)
[92]
system.
[93]
This was the
traditional regime imposed by the colonial administrators for the exploitation of natural resources in the extractive sector
(petroleum, hard minerals, timber, etc.).
[94]

Under the concession system, the concessionaire makes a direct equity investment for the purpose of exploiting a particular
natural resource within a given area.
[95]
Thus, the concession amounts to complete control by the concessionaire over the
countrys natural resource, for it is given exclusive and plenary rights to exploit a particular resource at the point of
extraction.
[96]
In consideration for the right to exploit a natural resource, the concessionaire either pays rent or royalty, which is a
fixed percentage of the gross proceeds.
[97]

Later statutory enactments by the legislative bodies set up in the Philippines adopted the contractual framework of the
concession.
[98]
For instance, Act No. 2932,
[99]
approved on August 31, 1920, which provided for the exploration, location, and
lease of lands containing petroleum and other mineral oils and gas in the Philippines, and Act No. 2719,
[100]
approved on May
14, 1917, which provided for the leasing and development of coal lands in the Philippines, both utilized the concession
system.
[101]

THE 1935 CONSTITUTION AND THE
NATIONALIZATION OF NATURAL RESOURCES
By the Act of United States Congress of March 24, 1934, popularly known as the Tydings-McDuffie Law, the People of the
Philippine Islands were authorized to adopt a constitution.
[102]
On July 30, 1934, the Constitutional Convention met for the
purpose of drafting a constitution, and the Constitution subsequently drafted was approved by the Convention on February 8,
1935.
[103]
The Constitution was submitted to the President of the United States on March 18, 1935.
[104]
On March 23, 1935, the
President of the United States certified that the Constitution conformed substantially with the provisions of the Act of Congress
approved on March 24, 1934.
[105]
On May 14, 1935, the Constitution was ratified by the Filipino people.
[106]

The 1935 Constitution adopted the Regalian doctrine, declaring all natural resources of the Philippines, including mineral
lands and minerals, to be property belonging to the State.
[107]
As adopted in a republican system, the medieval concept of jura
regalia is stripped of royal overtones and ownership of the land is vested in the State.
[108]

Section 1, Article XIII, on Conservation and Utilization of Natural Resources, of the 1935 Constitution provided:
SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral
oils, all forces of potential energy, and other natural resources of the Philippines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to citizens of the Philippines, or to corporations or associations at least
sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the
time of the inauguration of the Government established under this Constitution. Natural resources, with the exception of public
agricultural land, shall not be alienated, and no license, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twenty-five years, except as to water rights for irrigation,
water supply, fisheries, or industrial uses other than the development of water power, in which cases beneficial use may be the
measure and the limit of the grant.
The nationalization and conservation of the natural resources of the country was one of the fixed and dominating objectives
of the 1935 Constitutional Convention.
[109]
One delegate relates:
There was an overwhelming sentiment in the Convention in favor of the principle of state ownership of natural resources and the
adoption of the Regalian doctrine. State ownership of natural resources was seen as a necessary starting point to secure
recognition of the states power to control their disposition, exploitation, development, or utilization. The delegates of the
Constitutional Convention very well knew that the concept of State ownership of land and natural resources was introduced by
the Spaniards, however, they were not certain whether it was continued and applied by the Americans. To remove all doubts,
the Convention approved the provision in the Constitution affirming the Regalian doctrine.
The adoption of the principle of state ownership of the natural resources and of the Regalian doctrine was considered to be a
necessary starting point for the plan of nationalizing and conserving the natural resources of the country. For with the
establishment of the principle of state ownership of the natural resources, it would not be hard to secure the recognition of the
power of the State to control their disposition, exploitation, development or utilization.
[110]

The nationalization of the natural resources was intended (1) to insure their conservation for Filipino posterity; (2) to serve
as an instrument of national defense, helping prevent the extension to the country of foreign control through peaceful economic
penetration; and (3) to avoid making the Philippines a source of international conflicts with the consequent danger to its internal
security and independence.
[111]

The same Section 1, Article XIII also adopted the concession system, expressly permitting the State to grant licenses,
concessions, or leases for the exploitation, development, or utilization of any of the natural resources. Grants, however, were
limited to Filipinos or entities at least 60% of the capital of which is owned by Filipinos.
The swell of nationalism that suffused the 1935 Constitution was radically diluted when on November 1946, the Parity
Amendment, which came in the form of an Ordinance Appended to the Constitution, was ratified in a plebiscite.
[112]
The
Amendment extended, from July 4, 1946 to July 3, 1974, the right to utilize and exploit our natural resources to citizens of the
United States and business enterprises owned or controlled, directly or indirectly, by citizens of the United States:
[113]

Notwithstanding the provision of section one, Article Thirteen, and section eight, Article Fourteen, of the foregoing Constitution,
during the effectivity of the Executive Agreement entered into by the President of the Philippines with the President of the United
States on the fourth of July, nineteen hundred and forty-six, pursuant to the provisions of Commonwealth Act Numbered Seven
hundred and thirty-three, but in no case to extend beyond the third of July, nineteen hundred and seventy-four, the disposition,
exploitation, development, and utilization of all agricultural, timber, and mineral lands of the public domain, waters, minerals,
coals, petroleum, and other mineral oils, all forces and sources of potential energy, and other natural resources of the
Philippines, and the operation of public utilities, shall, if open to any person, be open to citizens of the United States and to all
forms of business enterprise owned or controlled, directly or indirectly, by citizens of the United States in the same manner as to,
and under the same conditions imposed upon, citizens of the Philippines or corporations or associations owned or controlled by
citizens of the Philippines.
The Parity Amendment was subsequently modified by the 1954 Revised Trade Agreement, also known as the Laurel-
Langley Agreement, embodied in Republic Act No. 1355.
[114]

THE PETROLEUM ACT OF 1949
AND THE CONCESSION SYSTEM
In the meantime, Republic Act No. 387,
[115]
also known as the Petroleum Act of 1949, was approved on June 18, 1949.
The Petroleum Act of 1949 employed the concession system for the exploitation of the nations petroleum
resources. Among the kinds of concessions it sanctioned were exploration and exploitation concessions, which respectively
granted to the concessionaire the exclusive right to explore for
[116]
or develop
[117]
petroleum within specified areas.
Concessions may be granted only to duly qualified persons
[118]
who have sufficient finances, organization, resources,
technical competence, and skills necessary to conduct the operations to be undertaken.
[119]

Nevertheless, the Government reserved the right to undertake such work itself.
[120]
This proceeded from the theory that all
natural deposits or occurrences of petroleum or natural gas in public and/or private lands in the Philippines belong to the
State.
[121]
Exploration and exploitation concessions did not confer upon the concessionaire ownership over the petroleum lands
and petroleum deposits.
[122]
However, they did grant concessionaires the right to explore, develop, exploit, and utilize them for
the period and under the conditions determined by the law.
[123]

Concessions were granted at the complete risk of the concessionaire; the Government did not guarantee the existence of
petroleum or undertake, in any case, title warranty.
[124]

Concessionaires were required to submit information as maybe required by the Secretary of Agriculture and Natural
Resources, including reports of geological and geophysical examinations, as well as production reports.
[125]
Exploration
[126]
and
exploitation
[127]
concessionaires were also required to submit work programs.
Exploitation concessionaires, in particular, were obliged to pay an annual exploitation tax,
[128]
the object of which is to
induce the concessionaire to actually produce petroleum, and not simply to sit on the concession without developing or
exploiting it.
[129]
These concessionaires were also bound to pay the Government royalty, which was not less than 12% of the
petroleum produced and saved, less that consumed in the operations of the concessionaire.
[130]
Under Article 66, R.A. No. 387,
the exploitation tax may be credited against the royalties so that if the concessionaire shall be actually producing enough oil, it
would not actually be paying the exploitation tax.
[131]

Failure to pay the annual exploitation tax for two consecutive years,
[132]
or the royalty due to the Government within one
year from the date it becomes due,
[133]
constituted grounds for the cancellation of the concession. In case of delay in the
payment of the taxes or royalty imposed by the law or by the concession, a surcharge of 1% per month is exacted until the same
are paid.
[134]

As a rule, title rights to all equipment and structures that the concessionaire placed on the land belong to the exploration or
exploitation concessionaire.
[135]
Upon termination of such concession, the concessionaire had a right to remove the same.
[136]

The Secretary of Agriculture and Natural Resources was tasked with carrying out the provisions of the law, through the
Director of Mines, who acted under the Secretarys immediate supervision and control.
[137]
The Act granted the Secretary the
authority to inspect any operation of the concessionaire and to examine all the books and accounts pertaining to operations or
conditions related to payment of taxes and royalties.
[138]

The same law authorized the Secretary to create an Administration Unit and a Technical Board.
[139]
The Administration Unit
was charged, inter alia, with the enforcement of the provisions of the law.
[140]
The Technical Board had, among other functions,
the duty to check on the performance of concessionaires and to determine whether the obligations imposed by the Act and its
implementing regulations were being complied with.
[141]

Victorio Mario A. Dimagiba, Chief Legal Officer of the Bureau of Energy Development, analyzed the benefits and drawbacks
of the concession system insofar as it applied to the petroleum industry:
Advantages of Concession. Whether it emphasizes income tax or royalty, the most positive aspect of the concession system is
that the States financial involvement is virtually risk free and administration is simple and comparatively low in
cost. Furthermore, if there is a competitive allocation of the resource leading to substantial bonuses and/or greater royalty
coupled with a relatively high level of taxation, revenue accruing to the State under the concession system may compare
favorably with other financial arrangements.
Disadvantages of Concession. There are, however, major negative aspects to this system. Because the Governments role in
the traditional concession is passive, it is at a distinct disadvantage in managing and developing policy for the nations petroleum
resource. This is true for several reasons. First, even though most concession agreements contain covenants requiring
diligence in operations and production, this establishes only an indirect and passive control of the host country in resource
development. Second, and more importantly, the fact that the host country does not directly participate in resource management
decisions inhibits its ability to train and employ its nationals in petroleum development. This factor could delay or prevent the
country from effectively engaging in the development of its resources. Lastly, a direct role in management is usually necessary
in order to obtain a knowledge of the international petroleum industry which is important to an appreciation of the host countrys
resources in relation to those of other countries.
[142]

Other liabilities of the system have also been noted:
x x x there are functional implications which give the concessionaire great economic power arising from its exclusive equity
holding. This includes, first, appropriation of the returns of the undertaking, subject to a modest royalty; second, exclusive
management of the project; third, control of production of the natural resource, such as volume of production, expansion,
research and development; and fourth, exclusive responsibility for downstream operations, like processing, marketing, and
distribution. In short, even if nominally, the state is the sovereign and owner of the natural resource being exploited, it has been
shorn of all elements of control over such natural resource because of the exclusive nature of the contractual regime of the
concession. The concession system, investing as it does ownership of natural resources, constitutes a consistent inconsistency
with the principle embodied in our Constitution that natural resources belong to the state and shall not be alienated, not to
mention the fact that the concession was the bedrock of the colonial system in the exploitation of natural resources.
[143]

Eventually, the concession system failed for reasons explained by Dimagiba:
Notwithstanding the good intentions of the Petroleum Act of 1949, the concession system could not have properly spurred
sustained oil exploration activities in the country, since it assumed that such a capital-intensive, high risk venture could be
successfully undertaken by a single individual or a small company. In effect, concessionaires funds were easily
exhausted. Moreover, since the concession system practically closed its doors to interested foreign investors, local capital was
stretched to the limits. The old system also failed to consider the highly sophisticated technology and expertise required, which
would be available only to multinational companies.
[144]

A shift to a new regime for the development of natural resources thus seemed imminent.
PRESIDENTIAL DECREE NO. 87, THE 1973
CONSTITUTION AND THE SERVICE CONTRACT SYSTEM
The promulgation on December 31, 1972 of Presidential Decree No. 87,
[145]
otherwise known as THE OIL EXPLORATION
AND DEVELOPMENT ACT OF 1972 signaled such a transformation. P.D. No. 87 permitted the government to explore for and
produce indigenous petroleum through service contracts.
[146]

Service contracts is a term that assumes varying meanings to different people, and it has carried many names in different
countries, like work contracts in Indonesia, concession agreements in Africa, production-sharing agreements in the Middle
East, and participation agreements in Latin America.
[147]
A functional definition of service contracts in the Philippines is
provided as follows:
A service contract is a contractual arrangement for engaging in the exploitation and development of petroleum, mineral, energy,
land and other natural resources by which a government or its agency, or a private person granted a right or privilege by the
government authorizes the other party (service contractor) to engage or participate in the exercise of such right or the enjoyment
of the privilege, in that the latter provides financial or technical resources, undertakes the exploitation or production of a given
resource, or directly manages the productive enterprise, operations of the exploration and exploitation of the resources or the
disposition of marketing or resources.
[148]

In a service contract under P.D. No. 87, service and technology are furnished by the service contractor for which it shall be
entitled to the stipulated service fee.
[149]
The contractor must be technically competent and financially capable to undertake the
operations required in the contract.
[150]

Financing is supposed to be provided by the Government to which all petroleum produced belongs.
[151]
In case the
Government is unable to finance petroleum exploration operations, the contractor may furnish services, technology and
financing, and the proceeds of sale of the petroleum produced under the contract shall be the source of funds for payment of the
service fee and the operating expenses due the contractor.
[152]
The contractor shall undertake, manage and execute petroleum
operations, subject to the government overseeing the management of the operations.
[153]
The contractor provides all necessary
services and technology and the requisite financing, performs the exploration work obligations, and assumes all exploration risks
such that if no petroleum is produced, it will not be entitled to reimbursement.
[154]
Once petroleum in commercial quantity is
discovered, the contractor shall operate the field on behalf of the government.
[155]

P.D. No. 87 prescribed minimum terms and conditions for every service contract.
[156]
It also granted the contractor certain
privileges, including exemption from taxes and payment of tariff duties,
[157]
and permitted the repatriation of capital and retention
of profits abroad.
[158]

Ostensibly, the service contract system had certain advantages over the concession regime.
[159]
It has been opined, though,
that, in the Philippines, our concept of a service contract, at least in the petroleum industry, was basically a concession regime
with a production-sharing element.
[160]

On January 17, 1973, then President Ferdinand E. Marcos proclaimed the ratification of a new Constitution.
[161]
Article
XIV on the National Economy and Patrimony contained provisions similar to the 1935 Constitution with regard to Filipino
participation in the nations natural resources. Section 8, Article XIV thereof provides:
SEC. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy,
fisheries, wildlife, and other natural resources of the Philippines belong to the State. With the exception of agricultural, industrial
or commercial, residential and resettlement lands of the public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or utilization of any of the natural resources shall be granted
for a period exceeding twenty-five years, renewable for not more than twenty-five years, except as to water rights for irrigation,
water supply, fisheries, or industrial uses other than the development of water power, in which cases beneficial use may be the
measure and the limit of the grant.
While Section 9 of the same Article maintained the Filipino-only policy in the enjoyment of natural resources, it also allowed
Filipinos, upon authority of the Batasang Pambansa, to enter into service contracts with any person or entity for the exploration
or utilization of natural resources.
SEC. 9. The disposition, exploration, development, exploitation, or utilization of any of the natural resources of the Philippines
shall be limited to citizens, or to corporations or associations at least sixty per centum of which is owned by such citizens. The
Batasang Pambansa, in the national interest, may allow such citizens, corporations or associations to enter into
service contracts for financial, technical, management, or other forms of assistance with any person or entity for the
exploration, or utilization of any of the natural resources. Existing valid and binding service contracts for financial, technical,
management, or other forms of assistance are hereby recognized as such. [Emphasis supplied.]
The concept of service contracts, according to one delegate, was borrowed from the methods followed by India, Pakistan
and especially Indonesia in the exploration of petroleum and mineral oils.
[162]
The provision allowing such contracts, according to
another, was intended to enhance the proper development of our natural resources since Filipino citizens lack the needed
capital and technical know-how which are essential in the proper exploration, development and exploitation of the natural
resources of the country.
[163]

The original idea was to authorize the government, not private entities, to enter into service contracts with foreign
entities.
[164]
As finally approved, however, a citizen or private entity could be allowed by the National Assembly to enter into such
service contract.
[165]
The prior approval of the National Assembly was deemed sufficient to protect the national
interest.
[166]
Notably, none of the laws allowing service contracts were passed by the Batasang Pambansa. Indeed, all of them
were enacted by presidential decree.
On March 13, 1973, shortly after the ratification of the new Constitution, the President promulgated Presidential Decree No.
151.
[167]
The law allowed Filipino citizens or entities which have acquired lands of the public domain or which own, hold or
control such lands to enter into service contracts for financial, technical, management or other forms of assistance with any
foreign persons or entity for the exploration, development, exploitation or utilization of said lands.
[168]

Presidential Decree No. 463,
[169]
also known as THE MINERAL RESOURCES DEVELOPMENT DECREE OF 1974, was
enacted on May 17, 1974. Section 44 of the decree, as amended, provided that a lessee of a mining claim may enter into a
service contract with a qualified domestic or foreign contractor for the exploration, development and exploitation of his claims
and the processing and marketing of the product thereof.
Presidential Decree No. 704
[170]
(THE FISHERIES DECREE OF 1975), approved on May 16, 1975, allowed Filipinos
engaged in commercial fishing to enter into contracts for financial, technical or other forms of assistance with any foreign person,
corporation or entity for the production, storage, marketing and processing of fish and fishery/aquatic products.
[171]

Presidential Decree No. 705
[172]
(THE REVISED FORESTRY CODE OF THE PHILIPPINES), approved on May 19, 1975,
allowed forest products licensees, lessees, or permitees to enter into service contracts for financial, technical, management, or
other forms of assistance . . . with any foreign person or entity for the exploration, development, exploitation or utilization of the
forest resources.
[173]

Yet another law allowing service contracts, this time for geothermal resources, was Presidential Decree No. 1442,
[174]
which
was signed into law on June 11, 1978. Section 1 thereof authorized the Government to enter into service contracts for the
exploration, exploitation and development of geothermal resources with a foreign contractor who must be technically and
financially capable of undertaking the operations required in the service contract.
Thus, virtually the entire range of the countrys natural resources from petroleum and minerals to geothermal energy, from
public lands and forest resources to fishery products was well covered by apparent legal authority to engage in the direct
participation or involvement of foreign persons or corporations (otherwise disqualified) in the exploration and utilization of natural
resources through service contracts.
[175]

THE 1987 CONSTITUTION AND TECHNICAL
OR FINANCIAL ASSISTANCE AGREEMENTS
After the February 1986 Edsa Revolution, Corazon C. Aquino took the reins of power under a revolutionary
government. On March 25, 1986, President Aquino issued Proclamation No. 3,
[176]
promulgating the Provisional Constitution,
more popularly referred to as the Freedom Constitution. By authority of the same Proclamation, the President created a
Constitutional Commission (CONCOM) to draft a new constitution, which took effect on the date of its ratification on February 2,
1987.
[177]

The 1987 Constitution retained the Regalian doctrine. The first sentence of Section 2, Article XII states: 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.
Like the 1935 and 1973 Constitutions before it, the 1987 Constitution, in the second sentence of the same provision,
prohibits the alienation of natural resources, except agricultural lands.
The third sentence of the same paragraph is new: The exploration, development and utilization of natural resources shall
be under the full control and supervision of the State. The constitutional policy of the States full control and supervision
over natural resources proceeds from the concept of jura regalia, as well as the recognition of the importance of the countrys
natural resources, not only for national economic development, but also for its security and national defense.
[178]
Under this
provision, the State assumes a more dynamic role in the exploration, development and utilization of natural resources.
[179]

Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitutions authorizing the State to grant
licenses, concessions, or leases for the exploration, exploitation, development, or utilization of natural resources. By such
omission, the utilization of inalienable lands of public domain through license, concession or lease is no longer allowed under
the 1987 Constitution.
[180]

Having omitted the provision on the concession system, Section 2 proceeded to introduce unfamiliar language:
[181]

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.
Consonant with the States full supervision and control over natural resources, Section 2 offers the State two
options.
[182]
One, the State may directly undertake these activities itself; or two, it may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or entities at least 60% of whose capital is owned by such citizens.
A third option is found in the third paragraph of the same section:
The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as cooperative fish
farming, with priority to subsistence fishermen and fish-workers in rivers, lakes, bays, and lagoons.
While the second and third options are limited only to Filipino citizens or, in the case of the former, to corporations or
associations at least 60% of the capital of which is owned by Filipinos, a fourth allows the participation of foreign-owned
corporations. The fourth and fifth paragraphs of Section 2 provide:
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. In
such agreements, the State shall promote the development and use of local scientific and technical resources.
The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its
execution.
Although Section 2 sanctions the participation of foreign-owned corporations in the exploration, development, and utilization
of natural resources, it imposes certain limitations or conditions to agreements with such corporations.
First, the parties to FTAAs. Only the President, in behalf of the State, may enter into these agreements, and only
with corporations. By contrast, under the 1973 Constitution, a Filipino citizen, corporation or association may enter into a service
contract with a foreign person or entity.
Second, the size of the activities: only large-scale exploration, development, and utilization is allowed. The term large-
scale usually refers to very capital-intensive activities.
[183]

Third, the natural resources subject of the activities is restricted to minerals, petroleum and other mineral oils, the intent
being to limit service contracts to those areas where Filipino capital may not be sufficient.
[184]

Fourth, consistency with the provisions of statute. The agreements must be in accordance with the terms and
conditions provided by law.
Fifth, Section 2 prescribes certain standards for entering into such agreements. The agreements must be based on real
contributions to economic growth and general welfare of the country.
Sixth, the agreements must contain rudimentary stipulations for the promotion of the development and use of local
scientific and technical resources.
Seventh, the notification requirement. The President shall notify Congress of every financial or technical assistance
agreement entered into within thirty days from its execution.
Finally, the scope of the agreements. While the 1973 Constitution referred to service contracts for financial, technical,
management, or other forms of assistance the 1987 Constitution provides for agreements. . . involving either financial or
technical assistance. It bears noting that the phrases service contracts and management or other forms of assistance in the
earlier constitution have been omitted.
By virtue of her legislative powers under the Provisional Constitution,
[185]
President Aquino, on July 10, 1987, signed into
law E.O. No. 211 prescribing the interim procedures in the processing and approval of applications for the exploration,
development and utilization of minerals. The omission in the 1987 Constitution of the term service contracts notwithstanding,
the said E.O. still referred to them in Section 2 thereof:
SEC. 2. Applications for the exploration, development and utilization of mineral resources, including renewal applications and
applications for approval of operating agreements and mining service contracts, shall be accepted and processed and may be
approved x x x. [Emphasis supplied.]
The same law provided in its Section 3 that the processing, evaluation and approval of all mining applications . . . operating
agreements and service contracts . . . shall be governed by Presidential Decree No. 463, as amended, other existing mining
laws, and their implementing rules and regulations. . . .
As earlier stated, on the 25
th
also of July 1987, the President issued E.O. No. 279 by authority of which the subject WMCP
FTAA was executed on March 30, 1995.
On March 3, 1995, President Ramos signed into law R.A. No. 7942. Section 15 thereof declares that the Act shall govern
the exploration, development, utilization, and processing of all mineral resources. Such declaration notwithstanding, R.A. No.
7942 does not actually cover all the modes through which the State may undertake the exploration, development, and utilization
of natural resources.
The State, being the owner of the natural resources, is accorded the primary power and responsibility in the exploration,
development and utilization thereof. As such, it may undertake these activities through four modes:
The State may directly undertake such activities.
(2) The State may enter into co-production, joint venture or production-sharing agreements with Filipino citizens or
qualified corporations.
(3) Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens.
(4) For the large-scale exploration, development and utilization of minerals, petroleum and other mineral oils, the
President may enter into agreements with foreign-owned corporations involving technical or financial assistance.
[186]

Except to charge the Mines and Geosciences Bureau of the DENR with performing researches and surveys,
[187]
and a
passing mention of government-owned or controlled corporations,
[188]
R.A. No. 7942 does not specify how the State should go
about the first mode. The third mode, on the other hand, is governed by Republic Act No. 7076
[189]
(the Peoples Small-Scale
Mining Act of 1991) and other pertinent laws.
[190]
R.A. No. 7942 primarily concerns itself with the second and fourth modes.
Mineral production sharing, co-production and joint venture agreements are collectively classified by R.A. No. 7942 as
mineral agreements.
[191]
The Government participates the least in a mineral production sharing agreement (MPSA). In an
MPSA, the Government grants the contractor
[192]
the exclusive right to conduct mining operations within a contract area
[193]
and
shares in the gross output.
[194]
The MPSA contractor provides the financing, technology, management and personnel necessary
for the agreements implementation.
[195]
The total government share in an MPSA is the excise tax on mineral products under
Republic Act No. 7729,
[196]
amending Section 151(a) of the National Internal Revenue Code, as amended.
[197]

In a co-production agreement (CA),
[198]
the Government provides inputs to the mining operations other than the mineral
resource,
[199]
while in a joint venture agreement (JVA), where the Government enjoys the greatest participation, the Government
and the JVA contractor organize a company with both parties having equity shares.
[200]
Aside from earnings in equity, the
Government in a JVA is also entitled to a share in the gross output.
[201]
The Government may enter into a CA
[202]
or JVA
[203]
with
one or more contractors. The Governments share in a CA or JVA is set out in Section 81 of the law:
The share of the Government in co-production and joint venture agreements shall be negotiated by the Government and the
contractor taking into consideration the: (a) capital investment of the project, (b) the risks involved, (c) contribution of the project
to the economy, and (d) other factors that will provide for a fair and equitable sharing between the Government and the
contractor. The Government shall also be entitled to compensations for its other contributions which shall be agreed upon by
the parties, and shall consist, among other things, the contractors income tax, excise tax, special allowance, withholding tax due
from the contractors foreign stockholders arising from dividend or interest payments to the said foreign stockholders, in case of
a foreign national and all such other taxes, duties and fees as provided for under existing laws.
All mineral agreements grant the respective contractors the exclusive right to conduct mining operations and to extract all
mineral resources found in the contract area.
[204]
A qualified person may enter into any of the mineral agreements with the
Government.
[205]
A qualified person is
any citizen of the Philippines with capacity to contract, or a corporation, partnership, association, or cooperative organized or
authorized for the purpose of engaging in mining, with technical and financial capability to undertake mineral resources
development and duly registered in accordance with law at least sixty per centum (60%) of the capital of which is owned by
citizens of the Philippines x x x.
[206]

The fourth mode involves financial or technical assistance agreements. An FTAA is defined as a contract involving
financial or technical assistance for large-scale exploration, development, and utilization of natural resources.
[207]
Any qualified
person with technical and financial capability to undertake large-scale exploration, development, and utilization of natural
resources in the Philippines may enter into such agreement directly with the Government through the DENR.
[208]
For the purpose
of granting an FTAA, a legally organized foreign-owned corporation (any corporation, partnership, association, or cooperative
duly registered in accordance with law in which less than 50% of the capital is owned by Filipino citizens)
[209]
is deemed a
qualified person.
[210]

Other than the difference in contractors qualifications, the principal distinction between mineral agreements and FTAAs is
the maximum contract area to which a qualified person may hold or be granted.
[211]
Large-scale under R.A. No. 7942 is
determined by the size of the contract area, as opposed to the amount invested (US $50,000,000.00), which was the standard
under E.O. 279.
Like a CA or a JVA, an FTAA is subject to negotiation.
[212]
The Governments contributions, in the form of taxes, in an
FTAA is identical to its contributions in the two mineral agreements, save that in an FTAA:
The collection of Government share in financial or technical assistance agreement shall commence after the financial or
technical assistance agreement contractor has fully recovered its pre-operating expenses, exploration, and development
expenditures, inclusive.
[213]

III
Having examined the history of the constitutional provision and statutes enacted pursuant thereto, a consideration of the
substantive issues presented by the petition is now in order.
THE EFFECTIVITY OF
EXECUTIVE ORDER NO. 279
Petitioners argue that E.O. No. 279, the law in force when the WMC FTAA was executed, did not come into effect.
E.O. No. 279 was signed into law by then President Aquino on July 25, 1987, two days before the opening of Congress on
July 27, 1987.
[214]
Section 8 of the E.O. states that the same shall take effect immediately. This provision, according to
petitioners, runs counter to Section 1 of E.O. No. 200,
[215]
which provides:
SECTION 1. Laws shall take effect after fifteen days following the completion of their publication either in the Official
Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise provided.
[216]
[Emphasis supplied.]
On that premise, petitioners contend that E.O. No. 279 could have only taken effect fifteen days after its publication at
which time Congress had already convened and the Presidents power to legislate had ceased.
Respondents, on the other hand, counter that the validity of E.O. No. 279 was settled in Miners Association of the
Philippines v. Factoran, supra. This is of course incorrect for the issue in Miners Association was not the validity of E.O. No. 279
but that of DAO Nos. 57 and 82 which were issued pursuant thereto.
Nevertheless, petitioners contentions have no merit.
It bears noting that there is nothing in E.O. No. 200 that prevents a law from taking effect on a date other than even
before the 15-day period after its publication. Where a law provides for its own date of effectivity, such date prevails over that
prescribed by E.O. No. 200. Indeed, this is the very essence of the phrase unless it is otherwise provided in Section 1
thereof. Section 1, E.O. No. 200, therefore, applies only when a statute does not provide for its own date of effectivity.
What is mandatory under E.O. No. 200, and what due process requires, as this Court held in Taada v. Tuvera,
[217]
is the
publication of the law for
without such notice and publication, there would be no basis for the application of the maxim ignorantia legis n[eminem]
excusat. It would be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of which he
had no notice whatsoever, not even a constructive one.
While the effectivity clause of E.O. No. 279 does not require its publication, it is not a ground for its invalidation since the
Constitution, being the fundamental, paramount and supreme law of the nation, is deemed written in the law.
[218]
Hence, the
due process clause,
[219]
which, so Taada held, mandates the publication of statutes, is read into Section 8 of E.O. No.
279. Additionally, Section 1 of E.O. No. 200 which provides for publication either in the Official Gazette or in a newspaper of
general circulation in the Philippines, finds suppletory application. It is significant to note that E.O. No. 279 was actually
published in the Official Gazette
[220]
on August 3, 1987.
From a reading then of Section 8 of E.O. No. 279, Section 1 of E.O. No. 200, and Taada v. Tuvera, this Court holds that
E.O. No. 279 became effective immediately upon its publication in the Official Gazette on August 3, 1987.
That such effectivity took place after the convening of the first Congress is irrelevant. At the time President Aquino issued
E.O. No. 279 on July 25, 1987, she was still validly exercising legislative powers under the Provisional Constitution.
[221]
Article
XVIII (Transitory Provisions) of the 1987 Constitution explicitly states:
SEC. 6. The incumbent President shall continue to exercise legislative powers until the first Congress is convened.
The convening of the first Congress merely precluded the exercise of legislative powers by President Aquino; it did not prevent
the effectivity of laws she had previously enacted.
There can be no question, therefore, that E.O. No. 279 is an effective, and a validly enacted, statute.
THE CONSTITUTIONALITY
OF THE WMCP FTAA
Petitioners submit that, in accordance with the text of Section 2, Article XII of the Constitution, FTAAs should be limited to
technical or financial assistance only. They observe, however, that, contrary to the language of the Constitution, the WMCP
FTAA allows WMCP, a fully foreign-owned mining corporation, to extend more than mere financial or technical assistance to the
State, for it permits WMCP to manage and operate every aspect of the mining activity.
[222]

Petitioners submission is well-taken. It is a cardinal rule in the interpretation of constitutions that the instrument must be so
construed as to give effect to the intention of the people who adopted it.
[223]
This intention is to be sought in the constitution itself,
and the apparent meaning of the words is to be taken as expressing it, except in cases where that assumption would lead to
absurdity, ambiguity, or contradiction.
[224]
What the Constitution says according to the text of the provision, therefore, compels
acceptance and negates the power of the courts to alter it, based on the postulate that the framers and the people mean what
they say.
[225]
Accordingly, following the literal text of the Constitution, assistance accorded by foreign-owned corporations in the
large-scale exploration, development, and utilization of petroleum, minerals and mineral oils should be limited to technical or
financial assistance only.
WMCP nevertheless submits that the word technical in the fourth paragraph of Section 2 of E.O. No. 279 encompasses a
broad number of possible services, perhaps, scientific and/or technological in basis.
[226]
It thus posits that it may also well
include the area of management or operations . . . so long as such assistance requires specialized knowledge or skills, and
are related to the exploration, development and utilization of mineral resources.
[227]

This Court is not persuaded. As priorly pointed out, the phrase management or other forms of assistance in the 1973
Constitution was deleted in the 1987 Constitution, which allows only technical or financial assistance. Casus omisus pro
omisso habendus est. A person, object or thing omitted from an enumeration must be held to have been omitted
intentionally.
[228]
As will be shown later, 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.
Respondents insist that agreements involving technical or financial assistance is just another term for service
contracts. They contend that the proceedings of the CONCOM indicate that although the terminology service contract was
avoided [by the Constitution], the concept it represented was not. They add that [t]he concept is embodied in the phrase
agreements involving financial or technical assistance.
[229]
And point out how members of the CONCOM referred to these
agreements as service contracts. For instance:
SR. TAN. Am I correct in thinking that the only difference between these future service contracts and the past service
contracts under Mr. Marcos is the general law to be enacted by the legislature and the notification of Congress by the
President? That is the only difference, is it not?
MR. VILLEGAS. That is right.
SR. TAN. So those are the safeguards[?]
MR. VILLEGAS. Yes. There was no law at all governing service contracts before.
SR. TAN. Thank you, Madam President.
[230]
[Emphasis supplied.]
WMCP also cites the following statements of Commissioners Gascon, Garcia, Nolledo and Tadeo who alluded to service
contracts as they explained their respective votes in the approval of the draft Article:
MR. GASCON. Mr. Presiding Officer, I vote no primarily because of two reasons: One, the provision on service contracts. 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. x x x.
[231]
[Emphasis supplied.]
x x x.
MR. GARCIA. Thank you.
I vote no. x x x.
Service contracts are given constitutional legitimization in Section 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. They constitute a serious negation of Filipino control on the use and disposition of the nations
natural resources, especially with regard to those which are nonrenewable.
[232]
[Emphasis supplied.]
x x x
MR. NOLLEDO. While there are objectionable provisions in the Article on National Economy and Patrimony, going over said
provisions meticulously, setting aside prejudice and personalities will reveal that the article contains a balanced set of
provisions. I hope the forthcoming Congress will implement such provisions taking into account that Filipinos should have real
control over our economy and patrimony, and if foreign equity is permitted, the same must be subordinated to the imperative
demands of the national interest.
x x x.
It is also my understanding that service contracts involving foreign corporations or entities are resorted to only when
no Filipino enterprise or Filipino-controlled enterprise could possibly undertake the exploration or exploitation of our
natural resources and that compensation under such contracts cannot and should not equal what should pertain to
ownership of capital. In other words, the service contract should not be an instrument to circumvent the basic
provision, that the exploration and exploitation of natural resources should be truly for the benefit of Filipinos.
Thank you, and I vote yes.
[233]
[Emphasis supplied.]
x x x.
MR. TADEO. Nais ko lamang ipaliwanag ang aking boto.
Matapos suriin ang kalagayan ng Pilipinas, ang saligang suliranin, pangunahin ang salitang imperyalismo. Ang ibig sabihin
nito ay ang sistema ng lipunang pinaghaharian ng iilang monopolyong kapitalista at ang salitang imperyalismo ay buhay na
buhay sa National Economy and Patrimony na nating ginawa. Sa pamamagitan ng salitang based on, naroroon na ang free
trade sapagkat tayo ay mananatiling tagapagluwas ng hilaw na sangkap at tagaangkat ng yaring
produkto. Pangalawa, naroroon pa rin ang parity rights, ang service contract, ang 60-40 equity sa natural resources. Habang
naghihirap ang sambayanang Pilipino, ginagalugad naman ng mga dayuhan ang ating likas na yaman. Kailan man ang
Article on National Economy and Patrimony ay hindi nagpaalis sa pagkaalipin ng ating ekonomiya sa kamay ng mga
dayuhan. Ang solusyon sa suliranin ng bansa ay dalawa lamang: ang pagpapatupad ng tunay na reporma sa lupa at ang
national industrialization. Ito ang tinatawag naming pagsikat ng araw sa Silangan. Ngunit ang mga landlords and big
businessmen at ang mga komprador ay nagsasabi na ang free trade na ito, ang kahulugan para sa amin, ay ipinipilit sa ating
sambayanan na ang araw ay sisikat sa Kanluran. Kailan man hindi puwedeng sumikat ang araw sa Kanluran. I vote
no.
[234]
[Emphasis supplied.]
This Court is likewise not persuaded.
As earlier noted, the phrase service contracts has been deleted in the 1987 Constitutions Article on National Economy
and Patrimony. If the CONCOM intended to retain the concept of service contracts under the 1973 Constitution, it could have
simply adopted the old terminology (service contracts) instead of employing new and unfamiliar terms (agreements . . .
involving either technical or financial assistance). Such a difference between the language of a provision in a revised
constitution and that of a similar provision in the preceding constitution is viewed as indicative of a difference in purpose.
[235]
If,
as respondents suggest, the concept of technical or financial assistance agreements is identical to that of service contracts,
the CONCOM would not have bothered to fit the same dog with a new collar. To uphold respondents theory would reduce the
first to a mere euphemism for the second and render the change in phraseology meaningless.
An examination of the reason behind the change confirms that technical or financial assistance agreements are not
synonymous to service contracts.
[T]he Court in construing a Constitution should bear in mind the object sought to be accomplished by its adoption, and the evils,
if any, sought to be prevented or remedied. A doubtful provision will be examined in light of the history of the times, and the
condition and circumstances under which the Constitution was framed. The object is to ascertain the reason which induced the
framers of the Constitution to enact the particular provision and the purpose sought to be accomplished thereby, in order to
construe the whole as to make the words consonant to that reason and calculated to effect that purpose.
[236]

As the following question of Commissioner Quesada and Commissioner Villegas answer shows the drafters intended to do
away with service contracts which were used to circumvent the capitalization (60%-40%) requirement:
MS. QUESADA. The 1973 Constitution used the words service contracts. In this particular Section 3, is there a safeguard
against the possible control of foreign interests if the Filipinos go into coproduction with them?
MR. VILLEGAS. Yes. In fact, the deletion of the phrase service contracts was our first attempt to avoid some of the
abuses in the past regime in the use of service contracts to go around the 60-40 arrangement. The safeguard that has
been introduced and this, of course can be refined is found in Section 3, lines 25 to 30, where Congress will have to concur
with the President on any agreement entered into between a foreign-owned corporation and the government involving technical
or financial assistance for large-scale exploration, development and utilization of natural resources.
[237]
[Emphasis supplied.]
In a subsequent discussion, Commissioner Villegas allayed the fears of Commissioner Quesada regarding the participation
of foreign interests in Philippine natural resources, which was supposed to be restricted to Filipinos.
MS. QUESADA. Another point of clarification is the phrase and utilization of natural resources shall be under the full control
and supervision of the State. In the 1973 Constitution, this was limited to citizens of the Philippines; but it was removed and
substituted by shall be under the full control and supervision of the State. Was the concept changed so that these particular
resources would be limited to citizens of the Philippines? Or would these resources only be under the full control and
supervision of the State; meaning, noncitizens would have access to these natural resources? Is that the understanding?
MR. VILLEGAS. No, Mr. Vice-President, if the Commissioner reads the next sentence, it states:
Such activities may be directly undertaken by the State, or it may enter into co-production, joint venture, production-sharing
agreements with Filipino citizens.
So we are still limiting it only to Filipino citizens.
x x x.
MS. QUESADA. Going back to Section 3, the section suggests that:
The exploration, development, and utilization of natural resources may be directly undertaken by the State, or it may enter into
co-production, joint venture or production-sharing agreement with . . . corporations or associations at least sixty per cent of
whose voting stock or controlling interest is owned by such citizens.
Lines 25 to 30, on the other hand, suggest that in the large-scale exploration, development and utilization of natural resources,
the President with the concurrence of Congress may enter into agreements with foreign-owned corporations even for technical
or financial assistance.
I wonder if this part of Section 3 contradicts the second part. I am raising this point for fear that foreign investors will use their
enormous capital resources to facilitate the actual exploitation or exploration, development and effective disposition of our
natural resources to the detriment of Filipino investors. I am not saying that we should not consider borrowing money from
foreign sources. What I refer to is that foreign interest should be allowed to participate only to the extent that they lend us
money and give us technical assistance with the appropriate government permit. In this way, we can insure the enjoyment of
our natural resources by our own people.
MR. VILLEGAS. Actually, the second provision about the President does not permit foreign investors to participate. It
is only technical or financial assistance they do not own anything but on conditions that have to be determined by
law with the concurrence of Congress. So, it is very restrictive.
If the Commissioner will remember, this removes the possibility for service contracts which we said yesterday were
avenues used in the previous regime to go around the 60-40 requirement.
[238]
[Emphasis supplied.]
The present Chief Justice, then a member of the CONCOM, also referred to this limitation in scope in proposing an
amendment to the 60-40 requirement:
MR. DAVIDE. May I be allowed to explain the proposal?
MR. MAAMBONG. Subject to the three-minute rule, Madam President.
MR. DAVIDE. It will not take three minutes.
The Commission had just approved the Preamble. In the Preamble we clearly stated that the Filipino people are sovereign
and that one of the objectives for the creation or establishment of a government is to conserve and develop the
national patrimony. The implication is that the national patrimony or our natural resources are exclusively reserved for
the Filipino people. No alien must be allowed to enjoy, exploit and develop our natural resources. As a matter of fact,
that principle proceeds from the fact that our natural resources are gifts from God to the Filipino people and it would be
a breach of that special blessing from God if we will allow aliens to exploit our natural resources.
I voted in favor of the Jamir proposal because it is not really exploitation that we granted to the alien corporations but only
for them to render financial or technical assistance. It is not for them to enjoy our natural resources. Madam President,
our natural resources are depleting; our population is increasing by leaps and bounds. Fifty years from now, if we will allow
these aliens to exploit our natural resources, there will be no more natural resources for the next generations of Filipinos. It may
last long if we will begin now. Since 1935 the aliens have been allowed to enjoy to a certain extent the exploitation of our natural
resources, and we became victims of foreign dominance and control. The aliens are interested in coming to the Philippines
because they would like to enjoy the bounty of nature exclusively intended for Filipinos by God.
And so I appeal to all, for the sake of the future generations, that if we have to pray in the Preamble to preserve and develop the
national patrimony for the sovereign Filipino people and for the generations to come, we must at this time decide once and for
all that our natural resources must be reserved only to Filipino citizens.
Thank you.
[239]
[Emphasis supplied.]
The opinion of another member of the CONCOM is persuasive
[240]
and leaves no doubt as to the intention of the framers to
eliminate service contracts altogether. He writes:
Paragraph 4 of Section 2 specifies large-scale, capital-intensive, highly technological undertakings for which the President may
enter into contracts with foreign-owned corporations, and enunciates strict conditions that should govern such contracts. x x x.
This provision balances the need for foreign capital and technology with the need to maintain the national sovereignty. It
recognizes the fact that as long as Filipinos can formulate their own terms in their own territory, there is no danger of
relinquishing sovereignty to foreign interests.
Are service contracts allowed under the new Constitution? No. Under the new Constitution, foreign investors (fully
alien-owned) can NOT participate in Filipino enterprises except to provide: (1) Technical Assistance for highly technical
enterprises; and (2) Financial Assistance for large-scale enterprises.
The intent of this provision, as well as other provisions on foreign investments, is to prevent the practice (prevalent in
the Marcos government) of skirting the 60/40 equation using the cover of service contracts.
[241]
[Emphasis supplied.]
Furthermore, it appears that Proposed Resolution No. 496,
[242]
which was the draft Article on National Economy and
Patrimony, adopted the concept of agreements . . . involving either technical or financial assistance contained in the Draft of
the 1986 U.P. Law Constitution Project (U.P. Law draft) which was taken into consideration during the deliberation of the
CONCOM.
[243]
The former, as well as Article XII, as adopted, employed the same terminology, as the comparative table below
shows:


DRAFT OF THE UP LAW
CONSTITUTION PROJECT
PROPOSED RESOLUTION
NO. 496 OF THE
CONSTITUTIONAL
COMMISSION
ARTICLE XII OF THE 1987
CONSTITUTION
SEC. 1. All lands of the public
domain, waters, minerals,
coal, petroleum and other
mineral oils, all forces of
potential energy, fisheries,
flora and fauna and other
natural resources of the
Philippines are owned by the
State. With the exception of
agricultural lands, all other
SEC. 3. All lands of the public
domain, waters, minerals,
coal, petroleum and other
mineral oils, all forces of
potential energy, fisheries,
forests, flora and fauna, and
other natural resources are
owned by the State. With the
exception of agricultural lands,
all other natural resources
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. Such
activities may be directly
undertaken by the state, or it
may enter into co-production,
joint venture, production
sharing agreements with
Filipino citizens or
corporations or associations
sixty per cent of whose voting
stock or controlling interest is
owned by such citizens for a
period of not more than
twenty-five years, renewable
for not more than twenty-five
years and under such terms
and conditions as may be
provided by law. In case as to
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.

shall not be alienated. The
exploration, development, and
utilization of natural resources
shall be under the full control
and supervision of the
State. Such activities may be
directly undertaken by the
State, or it may enter into co-
production, joint venture,
production-sharing
agreements with Filipino
citizens or corporations or
associations at least sixty per
cent of whose voting stock or
controlling interest is owned by
such citizens. Such
agreements shall be for a
period of twenty-five years,
renewable for not more than
twenty-five years, and under
such term 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 for
water power, beneficial use
may be the measure and limit
of the grant.

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 case 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.

The State shall protect the
nations marine wealth in its
archipelagic waters, territorial
sea, and exclusive economic
zone, and reserve its use and
enjoyment exclusively to
Filipino citizens.

The National Assembly may
by law allow small scale
utilization of natural resources
by Filipino citizens.
The Congress may by law
allow small-scale utilization of
natural resources by Filipino
citizens, as well as
cooperative fish farming in
rivers, lakes, bays, and
lagoons.
The Congress may, by law,
allow small-scale utilization of
natural resources by Filipino
citizens, as well as
cooperative fish farming, with
priority to subsistence
fishermen and fish-workers in
rivers, lakes, bays, and
lagoons.

The National Assembly, may,
by two-thirds vote of all its
members by special law
provide the terms and
conditions under which a
The President with the
concurrence of Congress, by
special law, shall provide the
terms and conditions under
which a foreign-owned
The President may enter into
agreements with foreign-
owned corporations
involvingeither technical or
financial assistance for
foreign-owned corporation
may enter into agreements
with the government
involving either technical or
financial assistance for
large-scale exploration,
development, or utilization of
natural resources. [Emphasis
supplied.]

corporation may enter into
agreements with the
government involving either
technical or financial
assistance for large-scale
exploration, development, and
utilization of natural
resources. [Emphasis
supplied.]

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. In such
agreements, the State shall
promote the development and
use of local scientific and
technical
resources. [Emphasis
supplied.]
The President shall notify the
Congress of every contract
entered into in accordance
with this provision, within thirty
days from its execution.

The insights of the proponents of the U.P. Law draft are, therefore, instructive in interpreting the phrase technical or
financial assistance.
In his position paper entitled Service Contracts: Old Wine in New Bottles?, Professor Pacifico A. Agabin, who was a
member of the working group that prepared the U.P. Law draft, criticized service contracts for they lodge exclusive
management and control of the enterprise to the service contractor, which is reminiscent of the old concession regime. Thus,
notwithstanding the provision of the Constitution that natural resources belong to the State, and that these shall not be ali enated,
the service contract system renders nugatory the constitutional provisions cited.
[244]
He elaborates:
Looking at the Philippine model, we can discern the following vestiges of the concession regime, thus:
1. Bidding of a selected area, or leasing the choice of the area to the interested party and then negotiating the terms and
conditions of the contract; (Sec. 5, P.D. 87)
2. Management of the enterprise vested on the contractor, including operation of the field if petroleum is
discovered; (Sec. 8, P.D. 87)
3. Control of production and other matters such as expansion and development; (Sec. 8)
4. Responsibility for downstream operations marketing, distribution, and processing may be with the
contractor (Sec. 8);
5. Ownership of equipment, machinery, fixed assets, and other properties remain with contractor (Sec. 12, P.D. 87);
6. Repatriation of capital and retention of profits abroad guaranteed to the contractor (Sec. 13, P.D. 87); and
7. While title to the petroleum discovered may nominally be in the name of the government, the contractor has
almost unfettered control over its disposition and sale, and even the domestic requirements of the country is relegated to
a pro rata basis (Sec. 8).
In short, our version of the service contract is just a rehash of the old concession regime x x x. Some people have pulled an old
rabbit out of a magicians hat, and foisted it upon us as a new and different animal.
The service contract as we know it here is antithetical to the principle of sovereignty over our natural resources
restated in the same article of the [1973] Constitution containing the provision for service contracts. If the service
contractor happens to be a foreign corporation, the contract would also run counter to the constitutional provision on
nationalization or Filipinization, of the exploitation of our natural resources.
[245]
[Emphasis supplied. Underscoring in the
original.]
Professor Merlin M. Magallona, also a member of the working group, was harsher in his reproach of the system:
x x x the nationalistic phraseology of the 1935 [Constitution] was retained by the [1973] Charter, but the essence of nationalism
was reduced to hollow rhetoric. The 1973 Charter still provided that the exploitation or development of the countrys natural
resources be limited to Filipino citizens or corporations owned or controlled by them. However, the martial-law Constitution
allowed them, once these resources are in their name, to enter into service contracts with foreign investors for financial,
technical, management, or other forms of assistance. Since foreign investors have the capital resources, the actual exploitation
and development, as well as the effective disposition, of the countrys natural resources, would be under their direction, and
control, relegating the Filipino investors to the role of second-rate partners in joint ventures.
Through the instrumentality of the service contract, the 1973 Constitution had legitimized at the highest level of state
policy that which was prohibited under the 1973 Constitution, namely: the exploitation of the countrys natural
resources by foreign nationals. The drastic impact of [this] constitutional change becomes more pronounced when it
is considered that the active party to any service contract may be a corporation wholly owned by foreign interests. In
such a case, the citizenship requirement is completely set aside, permitting foreign corporations to obtain actual
possession, control, and [enjoyment] of the countrys natural resources.
[246]
[Emphasis supplied.]
Accordingly, Professor Agabin recommends that:
Recognizing the service contract for what it is, we have to expunge it from the Constitution and reaffirm ownership
over our natural resources. That is the only way we can exercise effective control over our natural resources.
This should not mean complete isolation of the countrys natural resources from foreign investment. Other contract forms
which are less derogatory to our sovereignty and control over natural resources like technical assistance
agreements, financial assistance [agreements], co-production agreements, joint ventures, production-sharing could
still be utilized and adopted without violating constitutional provisions. In other words, we can adopt contract forms
which recognize and assert our sovereignty and ownership over natural resources, and where the foreign entity is just
a pure contractor instead of the beneficial owner of our economic resources.
[247]
[Emphasis supplied.]
Still another member of the working group, Professor Eduardo Labitag, proposed that:
2. Service contracts as practiced under the 1973 Constitution should be discouraged, instead the government may
be allowed, subject to authorization by special law passed by an extraordinary majority to enter into either technical or
financial assistance. This is justified by the fact that as presently worded in the 1973 Constitution, a service contract gives full
control over the contract area to the service contractor, for him to work, manage and dispose of the proceeds or production. It
was a subterfuge to get around the nationality requirement of the constitution.
[248]
[Emphasis supplied.]
In the annotations on the proposed Article on National Economy and Patrimony, the U.P. Law draft summarized the
rationale therefor, thus:
5. The last paragraph is a modification of the service contract provision found in Section 9, Article XIV of the 1973
Constitution as amended. This 1973 provision shattered the framework of nationalism in our fundamental law (see Magallona,
Nationalism and its Subversion in the Constitution). Through the service contract, the 1973 Constitution had legitimized that
which was prohibited under the 1935 constitutionthe exploitation of the countrys natural resources by foreign
nationals. Through the service contract, acts prohibited by the Anti-Dummy Law were recognized as legitimate
arrangements. Service contracts lodge exclusive management and control of the enterprise to the service contractor,
not unlike the old concession regime where the concessionaire had complete control over the countrys natural
resources, having been given exclusive and plenary rights to exploit a particular resource and, in effect, having been
assured of ownership of that resource at the point of extraction (see Agabin, Service Contracts: Old Wine in New
Bottles). Service contracts, hence, are antithetical to the principle of sovereignty over our natural resources, as well as the
constitutional provision on nationalization or Filipinization of the exploitation of our natural resources.
Under the proposed provision, only technical assistance or financial assistance agreements may be entered into, and
only for large-scale activities. These are contract forms which recognize and assert our sovereignty and ownership
over natural resources since the foreign entity is just a pure contractor and not a beneficial owner of our economic
resources. The proposal recognizes the need for capital and technology to develop our natural resources without
sacrificing our sovereignty and control over such resources by the safeguard of a special law which requires two-
thirds vote of all the members of the Legislature. This will ensure that such agreements will be debated upon exhaustively
and thoroughly in the National Assembly to avert prejudice to the nation.
[249]
[Emphasis supplied.]
The U.P. Law draft proponents viewed service contracts under the 1973 Constitution as grants of beneficial ownership of
the countrys natural resources to foreign owned corporations. While, in theory, the State owns these natural resources and
Filipino citizens, their beneficiaries service contracts actually vested foreigners with the right to dispose, explore for, develop,
exploit, and utilize the same. Foreigners, not Filipinos, became the beneficiaries of Philippine natural resources. This
arrangement is clearly incompatible with the constitutional ideal of nationalization of natural resources, with the Regalian
doctrine, and on a broader perspective, with Philippine sovereignty.
The proponents nevertheless acknowledged the need for capital and technical know-how in the large-scale exploitation,
development and utilization of natural resources the second paragraph of the proposed draft itself being an admission of such
scarcity. Hence, they recommended a compromise to reconcile the nationalistic provisions dating back to the 1935 Constitution,
which reserved all natural resources exclusively to Filipinos, and the more liberal 1973 Constitution, which allowed foreigners to
participate in these resources through service contracts. Such a compromise called for the adoption of a new system in the
exploration, development, and utilization of natural resources in the form of technical agreements or financial agreements which,
necessarily, are distinct concepts from service contracts.
The replacement of service contracts with agreements involving either technical or financial assistance, as well as the
deletion of the phrase management or other forms of assistance, assumes greater significance when note is taken that the
U.P. Law draft proposed other equally crucial changes that were obviously heeded by the CONCOM. These include the
abrogation of the concession system and the adoption of new options for the State in the exploration, development, and
utilization of natural resources. The proponents deemed these changes to be more consistent with the States ownership of, and
its full control and supervision (a phrase also employed by the framers) over, such resources. The Project explained:
3. In line with the State ownership of natural resources, the State should take a more active role in the exploration,
development, and utilization of natural resources, than the present practice of granting licenses, concessions, or leases hence
the provision that said activities shall be under the full control and supervision of the State. There are three major schemes by
which the State could undertake these activities: first, directly by itself; second, by virtue of co-production, joint venture,
production sharing agreements with Filipino citizens or corporations or associations sixty per cent (60%) of the voting stock or
controlling interests of which are owned by such citizens; or third, with a foreign-owned corporation, in cases of large-scale
exploration, development, or utilization of natural resources through agreements involving either technical or financial assistance
only. x x x.
At present, under the licensing concession or lease schemes, the government benefits from such benefits only through fees,
charges, ad valorem taxes and income taxes of the exploiters of our natural resources. Such benefits are very minimal
compared with the enormous profits reaped by theses licensees, grantees, concessionaires. Moreover, some of them disregard
the conservation of natural resources and do not protect the environment from degradation. The proposed role of the State will
enable it to a greater share in the profits it can also actively husband its natural resources and engage in developmental
programs that will be beneficial to them.
4. Aside from the three major schemes for the exploration, development, and utilization of our natural resources, the State
may, by law, allow Filipino citizens to explore, develop, utilize natural resources in small-scale. This is in recognition of the plight
of marginal fishermen, forest dwellers, gold panners, and others similarly situated who exploit our natural resources for their
daily sustenance and survival.
[250]

Professor Agabin, in particular, after taking pains to illustrate the similarities between the two systems, concluded that the
service contract regime was but a rehash of the concession system. Old wine in new bottles, as he put it. The rejection of
the service contract regime, therefore, is in consonance with the abolition of the concession system.
In light of the deliberations of the CONCOM, the text of the Constitution, and the adoption of other proposed changes, there
is no doubt that the framers considered and shared the intent of the U.P. Law proponents in employing the phrase agreements .
. . involving either technical or financial assistance.
While certain commissioners may have mentioned the term service contracts during the CONCOM deliberations, they
may not have been necessarily referring to the concept of service contracts under the 1973 Constitution. As noted earlier,
service contracts is a term that assumes different meanings to different people.
[251]
The commissioners may have been using
the term loosely, and not in its technical and legal sense, to refer, in general, to agreements concerning natural resources
entered into by the Government with foreign corporations. These loose statements do not necessarily translate to the adoption of
the 1973 Constitution provision allowing service contracts.
It is true that, as shown in the earlier quoted portions of the proceedings in CONCOM, in response to Sr. Tans question,
Commissioner Villegas commented that, other than congressional notification, the only difference between future and past
service contracts is the requirement of a general law as there were no laws previously authorizing the same.
[252]
However, such
remark is far outweighed by his more categorical statement in his exchange with Commissioner Quesada that the draft article
does not permit foreign investors to participate in the nations natural resources which was exactly what service contracts did
except to provide technical or financial assistance.
[253]

In the case of the other commissioners, Commissioner Nolledo himself clarified in his work that the present charter prohibits
service contracts.
[254]
Commissioner Gascon was not totally averse to foreign participation, but favored stricter restrictions in the
form of majority congressional concurrence.
[255]
On the other hand, Commissioners Garcia and Tadeo may have veered to the
extreme side of the spectrum and their objections may be interpreted as votes against any foreign participation in our natural
resources whatsoever.
WMCP cites Opinion No. 75, s. 1987,
[256]
and Opinion No. 175, s. 1990
[257]
of the Secretary of Justice, expressing the view
that a financial or technical assistance agreement is no different in concept from the service contract allowed under the 1973
Constitution. This Court is not, however, bound by this interpretation. When an administrative or executive agency renders an
opinion or issues a statement of policy, it merely interprets a pre-existing law; and the administrative interpretation of the law is
at best advisory, for it is the courts that finally determine what the law means.
[258]

In any case, the constitutional provision allowing the President to enter into FTAAs with foreign-owned corporations is an
exception to the rule that participation in the nations natural resources is reserved exclusively to Filipinos. Accordingly, such
provision must be construed strictly against their enjoyment by non-Filipinos. As Commissioner Villegas emphasized, the
provision is very restrictive.
[259]
Commissioner Nolledo also remarked that entering into service contracts is an exception to the
rule on protection of natural resources for the interest of the nation and, therefore, being an exception, it should be subject,
whenever possible, to stringent rules.
[260]
Indeed, exceptions should be strictly but reasonably construed; they extend only so
far as their language fairly warrants and all doubts should be resolved in favor of the general provision rather than the
exception.
[261]

With the foregoing discussion in mind, this Court finds that R.A. No. 7942 is invalid insofar as said Act authorizes service
contracts. Although the statute employs the phrase financial and technical agreements in accordance with the 1987
Constitution, it actually treats these agreements as service contracts that grant beneficial ownership to foreign contractors
contrary to the fundamental law.
Section 33, which is found under Chapter VI (Financial or Technical Assistance Agreement) of R.A. No. 7942 states:
SEC. 33. Eligibility.Any qualified person with technical and financial capability to undertake large-scale exploration,
development, and utilization of mineral resources in the Philippines may enter into a financial or technical assistance
agreement directly with the Government through the Department. [Emphasis supplied.]
Exploration, as defined by R.A. No. 7942,
means the searching or prospecting for mineral resources by geological, geochemical or geophysical surveys, remote sensing,
test pitting, trending, drilling, shaft sinking, tunneling or any other means for the purpose of determining the existence, extent,
quantity and quality thereof and the feasibility of mining them for profit.
[262]

A legally organized foreign-owned corporation may be granted an exploration permit,
[263]
which vests it with the right to conduct
exploration for all minerals in specified areas,
[264]
i.e., to enter, occupy and explore the same.
[265]
Eventually, the foreign-owned
corporation, as such permittee, may apply for a financial and technical assistance agreement.
[266]

Development is
the work undertaken to explore and prepare an ore body or a mineral deposit for mining, including the construction of necessary
infrastructure and related facilities.
[267]

Utilization means the extraction or disposition of minerals.
[268]
A stipulation that the proponent shall dispose of the
minerals and byproducts produced at the highest price and more advantageous terms and conditions as provided for under the
implementing rules and regulations is required to be incorporated in every FTAA.
[269]

A foreign-owned/-controlled corporation may likewise be granted a mineral processing permit.
[270]
Mineral processing is
the milling, beneficiation or upgrading of ores or minerals and rocks or by similar means to convert the same into marketable
products.
[271]

An FTAA contractor makes a warranty that the mining operations shall be conducted in accordance with the provisions of
R.A. No. 7942 and its implementing rules
[272]
and for work programs and minimum expenditures and commitments.
[273]
And it
obliges itself to furnish the Government records of geologic, accounting, and other relevant data for its mining operation.
[274]

Mining operation, as the law defines it, means mining activities involving exploration, feasibility, development,
utilization, and processing.
[275]

The underlying assumption in all these provisions is that the foreign contractor manages the mineral resources, just like the
foreign contractor in a service contract.
Furthermore, Chapter XII of the Act grants foreign contractors in FTAAs the same auxiliary mining rights that it grants
contractors in mineral agreements (MPSA, CA and JV).
[276]
Parenthetically, Sections 72 to 75 use the term contractor, without
distinguishing between FTAA and mineral agreement contractors. And so does holders of mining rights in Section 76. A
foreign contractor may even convert its FTAA into a mineral agreement if the economic viability of the contract area is found to
be inadequate to justify large-scale mining operations,
[277]
provided that it reduces its equity in the corporation, partnership,
association or cooperative to forty percent (40%).
[278]

Finally, under the Act, an FTAA contractor warrants that it has or has access to all the financing, managerial, and
technical expertise. . . .
[279]
This suggests that an FTAA contractor is bound to provide some management assistance a form
of assistance that has been eliminated and, therefore, proscribed by the present Charter.
By allowing foreign contractors to manage or operate all the aspects of the mining operation, the above-cited provisions of
R.A. No. 7942 have in effect conveyed beneficial ownership over the nations mineral resources to these contractors, leaving the
State with nothing but bare title thereto.
Moreover, the same provisions, whether by design or inadvertence, permit a circumvention of the constitutionally ordained
60%-40% capitalization requirement for corporations or associations engaged in the exploitation, development and utilization of
Philippine natural resources.
In sum, the Court finds the following provisions of R.A. No. 7942 to be violative of Section 2, Article XII of the Constitution:
(1) The proviso in Section 3 (aq), which defines qualified person, to wit:
Provided, That a legally organized foreign-owned corporation shall be deemed a qualified person for purposes of granting an
exploration permit, financial or technical assistance agreement or mineral processing permit.
(2) Section 23,
[280]
which specifies the rights and obligations of an exploration permittee, insofar as said section
applies to a financial or technical assistance agreement,
(3) Section 33, which prescribes the eligibility of a contractor in a financial or technical assistance agreement;
(4) Section 35,
[281]
which enumerates the terms and conditions for every financial or technical assistance agreement;
(5) Section 39,
[282]
which allows the contractor in a financial and technical assistance agreement to convert the same
into a mineral production-sharing agreement;
(6) Section 56,
[283]
which authorizes the issuance of a mineral processing permit to a contractor in a financial and
technical assistance agreement;
The following provisions of the same Act are likewise void as they are dependent on the foregoing provisions and cannot
stand on their own:
(1) Section 3 (g),
[284]
which defines the term contractor, insofar as it applies to a financial or technical assistance
agreement.
Section 34,
[285]
which prescribes the maximum contract area in a financial or technical assistance agreements;
Section 36,
[286]
which allows negotiations for financial or technical assistance agreements;
Section 37,
[287]
which prescribes the procedure for filing and evaluation of financial or technical assistance agreement
proposals;
Section 38,
[288]
which limits the term of financial or technical assistance agreements;
Section 40,
[289]
which allows the assignment or transfer of financial or technical assistance agreements;
Section 41,
[290]
which allows the withdrawal of the contractor in an FTAA;
The second and third paragraphs of Section 81,
[291]
which provide for the Governments share in a financial and technical
assistance agreement; and
Section 90,
[292]
which provides for incentives to contractors in FTAAs insofar as it applies to said contractors;
When the parts of the statute are so mutually dependent and connected as conditions, considerations, inducements, or
compensations for each other, as to warrant a belief that the legislature intended them as a whole, and that if all could not be
carried into effect, the legislature would not pass the residue independently, then, if some parts are unconstitutional, all the
provisions which are thus dependent, conditional, or connected, must fall with them.
[293]

There can be little doubt that the WMCP FTAA itself is a service contract.
Section 1.3 of the WMCP FTAA grants WMCP the exclusive right to explore, exploit, utilise[,] process and dispose of all
Minerals products and by-products thereof that may be produced from the Contract Area.
[294]
The FTAA also imbues WMCP
with the following rights:
(b) to extract and carry away any Mineral samples from the Contract area for the purpose of conducting tests and studies in
respect thereof;
(c) to determine the mining and treatment processes to be utilised during the Development/Operating Period and the project
facilities to be constructed during the Development and Construction Period;
(d) have the right of possession of the Contract Area, with full right of ingress and egress and the right to occupy the same,
subject to the provisions of Presidential Decree No. 512 (if applicable) and not be prevented from entry into private ands by
surface owners and/or occupants thereof when prospecting, exploring and exploiting for minerals therein;
x x x
(f) to construct roadways, mining, drainage, power generation and transmission facilities and all other types of works on the
Contract Area;
(g) to erect, install or place any type of improvements, supplies, machinery and other equipment relating to the Mining
Operations and to use, sell or otherwise dispose of, modify, remove or diminish any and all parts thereof;
(h) enjoy, subject to pertinent laws, rules and regulations and the rights of third Parties, easement rights and the use of timber,
sand, clay, stone, water and other natural resources in the Contract Area without cost for the purposes of the Mining Operations;
x x x
(l) have the right to mortgage, charge or encumber all or part of its interest and obligations under this Agreement, the plant,
equipment and infrastructure and the Minerals produced from the Mining Operations;
x x x.
[295]

All materials, equipment, plant and other installations erected or placed on the Contract Area remain the property of WMCP,
which has the right to deal with and remove such items within twelve months from the termination of the FTAA.
[296]

Pursuant to Section 1.2 of the FTAA, WMCP shall provide [all] financing, technology, management and personnel
necessary for the Mining Operations. The mining company binds itself to perform all Mining Operations . . . providing all
necessary services, technology and financing in connection therewith,
[297]
and to furnish all materials, labour, equipment and
other installations that may be required for carrying on all Mining Operations.
[298]
WMCP may make expansions, improvements
and replacements of the mining facilities and may add such new facilities as it considers necessary for the mining operations.
[299]

These contractual stipulations, taken together, grant WMCP beneficial ownership over natural resources that properly
belong to the State and are intended for the benefit of its citizens. These stipulations are abhorrent to the 1987
Constitution. They are precisely the vices that the fundamental law seeks to avoid, the evils that it aims to suppress.
Consequently, the contract from which they spring must be struck down.
In arguing against the annulment of the FTAA, WMCP invokes the Agreement on the Promotion and Protection of
Investments between the Philippine and Australian Governments, which was signed in Manila on January 25, 1995 and which
entered into force on December 8, 1995.
x x x. Article 2 (1) of said treaty states that it applies to investments whenever made and thus the fact that [WMCPs] FTAA was
entered into prior to the entry into force of the treaty does not preclude the Philippine Government from protecting [WMCPs]
investment in [that] FTAA. Likewise, Article 3 (1) of the treaty provides that Each Party shall encourage and promote
investments in its area by investors of the other Party and shall [admit] such investments in accordance with its
Constitution, Laws, regulations and investment policies and in Article 3 (2), it states that Each Party shall ensure that
investments are accorded fair and equitable treatment. The latter stipulation indicates that it was intended to impose an
obligation upon a Party to afford fair and equitable treatment to the investments of the other Party and that a failure to provide
such treatment by or under the laws of the Party may constitute a breach of the treaty. Simply stated, the Philippines could not,
under said treaty, rely upon the inadequacies of its own laws to deprive an Australian investor (like [WMCP]) of fair and equitable
treatment by invalidating [WMCPs] FTAA without likewise nullifying the service contracts entered into before the enactment of
RA 7942 such as those mentioned in PD 87 or EO 279.
This becomes more significant in the light of the fact that [WMCPs] FTAA was executed not by a mere Filipino citizen, but by the
Philippine Government itself, through its President no less, which, in entering into said treaty is assumed to be aware of the
existing Philippine laws on service contracts over the exploration, development and utilization of natural resources. The
execution of the FTAA by the Philippine Government assures the Australian Government that the FTAA is in accordance with
existing Philippine laws.
[300]
[Emphasis and italics by private respondents.]
The invalidation of the subject FTAA, it is argued, would constitute a breach of said treaty which, in turn, would amount to a
violation of Section 3, Article II of the Constitution adopting the generally accepted principles of international law as part of the
law of the land. One of these generally accepted principles is pacta sunt servanda, which requires the performance in good faith
of treaty obligations.
Even assuming arguendo that WMCP is correct in its interpretation of the treaty and its assertion that the Philippines could
not . . . deprive an Australian investor (like [WMCP]) of fair and equitable treatment by invalidating [WMCPs] FTAA without
likewise nullifying the service contracts entered into before the enactment of RA 7942 . . ., the annulment of the FTAA would
not constitute a breach of the treaty invoked. For this decision herein invalidating the subject FTAA forms part of the legal
system of the Philippines.
[301]
The equal protection clause
[302]
guarantees that such decision shall apply to all contracts belonging
to the same class, hence, upholding rather than violating, the fair and equitable treatment stipulation in said treaty.
One other matter requires clarification. Petitioners contend that, consistent with the provisions of Section 2, Article XII of
the Constitution, the President may enter into agreements involving either technical or financial assistance only. The
agreement in question, however, is a technical and financial assistance agreement.
Petitioners contention does not lie. To adhere to the literal language of the Constitution would lead to absurd
consequences.
[303]
As WMCP correctly put it:
x x x such a theory of petitioners would compel the government (through the President) to enter into contract with two (2)
foreign-owned corporations, one for financial assistance agreement and with the other, for technical assistance over one and the
same mining area or land; or to execute two (2) contracts with only one foreign-owned corporation which has the capability to
provide both financial and technical assistance, one for financial assistance and another for technical assistance, over the same
mining area. Such an absurd result is definitely not sanctioned under the canons of constitutional
construction.
[304]
[Underscoring in the original.]
Surely, the framers of the 1987 Charter did not contemplate such an absurd result from their use of either/or. A
constitution is not to be interpreted as demanding the impossible or the impracticable; and unreasonable or absurd
consequences, if possible, should be avoided.
[305]
Courts are not to give words a meaning that would lead to absurd or
unreasonable consequences and a literal interpretation is to be rejected if it would be unjust or lead to absurd results.
[306]
That is
a strong argument against its adoption.
[307]
Accordingly, petitioners interpretation must be rejected.
The foregoing discussion has rendered unnecessary the resolution of the other issues raised by the petition.
WHEREFORE, the petition is GRANTED. The Court hereby declares unconstitutional and void:
(1) The following provisions of Republic Act No. 7942:
(a) The proviso in Section 3 (aq),
(b) Section 23,
(c) Section 33 to 41,
(d) Section 56,
(e) The second and third paragraphs of Section 81, and
(f) Section 90.
(2) All provisions of Department of Environment and Natural Resources Administrative Order 96-40, s. 1996 which are not
in conformity with this Decision, and
(3) The Financial and Technical Assistance Agreement between the Government of the Republic of the Philippines and
WMC Philippines, Inc.
SO ORDERED.
Davide, Jr., C.J., Puno, Quisumbing, Carpio, Corona, Callejo, Sr., and Tinga. JJ., concur.
Vitug, J., see Separate Opinion.
Panganiban, J., see Separate Opinion.
Ynares-Santiago, Sandoval-Gutierrez and Austria-Martinez, JJ., joins J. Panganibans separate opinion.
Azcuna, no part, one of the parties was a client.




[G.R. No. L-27873. November 29, 1983.]

HEIRS OF JOSE AMUNATEGUI, Petitioners, v. DIRECTOR OF FORESTRY, Respondent.

[G.R. No. L-30035. November 29, 1983.]

ROQUE BORRE and ENCARNACION DELFIN, Petitioners, v. ANGEL ALPASAN, HEIRS OF MELQUIADES BORRE,
EMETERIO BEREBER and HEIRS OF JOSE AMUNATEGUI and THE CAPIZ COURT OF FIRST INSTANCE, Respondents.


SYLLABUS


1. CIVIL LAW; PUBLIC LAND ACT; FOREST LAND; CLASSIFICATION NOT LOST EVEN IF IT HAS BEEN STRIPPED OF
FOREST COVER; UNLESS RELEASED IN AN OFFICIAL PROCLAMATION AS DISPOSABLE LANDS, RULES ON
CONFIRMATION OF IMPERFECT TITLE DO NOT APPLY. A forested area classified as forest land of the public domain
does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. Parcels of land
classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. "Forest
lands" do not have to be on mountains or in out of the way places. Swampy areas covered by mangrove trees, nipa palms, and
other tress growing in brackish or sea water may also be classified as forest land. The classification is descriptive of its legal
nature or status and does not have to be descriptive of what the land actually looks like. Unless and until the land classified as
"forest" is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the
public domain, the rules on confirmation of imperfect title do not apply.

2. ID.; ID.; FOREST LANDS; ACQUISITIVE OWNERSHIP NOT ACQUIRED. This Court ruled in the leading case of Director
of Forestry v. Muoz (23 SCRA 1184) that possession of forest lands, no matter how long, cannot ripen into private ownership.
And in Republic v. Animas (56 SCRA 499), we granted the petition on the ground that the ares covered by the patent and title
was not disposable public land, it being a part of the forest zone and any patent and title to said area is void ab initio. It bears
emphasizing that a positive act of Government is needed to declassify land which is classified as forest and to convert it into
alienable or disposable land for agricultural or other purposes.

3. ID.; ID.; CONFIRMATION, OF IMPERFECT TITLE CASES; BURDEN OF PROVING THAT THE REQUIREMENTS OF THE
LAW HAVE BEEN MET, RESTS ON THE APPLICANT. In confirmation of imperfect title cases, the applicant shoulders the
burden of proving that he meets the requirements of Section 48, Commonwealth Act No. 141, as amended by Republic Act No.
1942. He must overcome the presumption that the land he is applying for is part of the public domain but that he has an interest
therein sufficient to warrant registration in his name because of an imperfect title such as those derived from old Spanish grants
or that he has had continuous, open, and notorious possession and occupation of agricultural lands of the public domain under a
bona fide claim of acquisition of ownership for at least thirty (30) years preceding the filing of his application.


D E C I S I O N


GUTIERREZ, JR., J .:


The two petitions for review on certiorari before us question the decision of the Court of Appeals which declared the disputed
property as forest land, not subject to titling in favor of private persons.

These two petitions have their genesis in an application for confirmation of imperfect title and its registration filed with the Court
of First Instance of Capiz. The parcel of land sought to be registered is known as Lot No. 885 of the Cadastral Survey of Pilar,
Capiz, and has an area of 645,703 square meters.cralawnad

Roque Borre, petitioner in G.R. No, L-30035, and Melquiades Borre, filed the application for registration. In due time, the heirs of
Jose Amunategui, petitioners in G.R. No. L-27873 filed an opposition to the application of Roque and Melquiades Borre. At the
same time, they prayed that the title to a portion of Lot No. 885 of Pilar Cadastre containing 527,747 square meters be confirmed
and registered in the names of said Heirs of Jose Amunategui.

The Director of Forestry, through the Provincial Fiscal of Capiz, also filed an opposition to the application for registration of title
claiming that the land was mangrove swamp which was still classified as forest land and part of the public domain.

Another oppositor, Emeterio Bereber filed his opposition insofar as a portion of Lot No. 885 containing 117,956 square meters
was concerned and prayed that title to said portion be confirmed and registered in his name.

During the progress of the trial, applicant-petitioner Roque Borre sold whatever rights and interests he may have on Lot No. 885
to Angel Alpasan. The latter also filed an opposition, claiming that he is entitled to have said lot registered in his name.

After trial, the Court of First Instance of Capiz adjudicated 117,956 square meters to Emeterio Bereber and the rest of the land
containing 527,747 square meters was adjudicated in the proportion of 5/6 share to Angel Alpasan and 1/6 share to Melquiades
Borre.

Only the Heirs of Jose Amunategui and the Director of Forestry filed their respective appeals with the Court of Appeals, The
case was docketed as CA-G.R. No. 34190-R.

In its decision, the Court of Appeals held:jgc:chanrobles.
com
.ph

". . . the conclusion so far must have to be that as to the private litigants that have been shown to have a better right over Lot
885 are, as to the northeastern portion of a little less than 117,956 square meters, it was Emeterio Bereber and as to the rest of
527,747 square meters, it was the heirs of Jose Amunategui; but the last question that must have to be considered is whether
after all, the title that these two (2) private litigants have shown did not amount to a registerable one in view of the opposition and
evidence of the Director of Forestry; . . .

". . . turning back the clock thirty (30) years from 1955 when the application was filed which would place it at 1925, the fact must
have to be accepted that during that period, the land was a classified forest land so much so that timber licenses had to be
issued to certain licensee before 1926 and after that; that even Jose Amunategui himself took the trouble to ask for a license to
cut timber within the area; and this can only mean that the Bureau of Forestry had stood and maintained its ground that it was a
forest land as indeed the testimonial evidence referred to above persuasively indicates, and the only time when the property was
converted into a fishpond was sometime after 1950; or a bare five (5) years before the filing of the application; but only after
there had been a previous warning by the District Forester that that could not be done because it was classified as a public
forest; so that having these in mind and remembering that even under Republic Act 1942 which came into effect in 1957, two (2)
years after this case had already been filed in the lower Court, in order for applicant to be able to demonstrate a registerable title
he must have shown.

"open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain under a bona
fide claim of acquisition of ownership for at least thirty (30) years, preceding the filing of the application;

the foregoing details cannot but justify the conclusion that not one of the applicants or oppositors had shown that during the
required period of thirty (30) years prescribed by Republic Act 1942 in order for him to have shown a registerable title for the
entire period of thirty (30) years before filing of the application, he had been in

"open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain,

it is evident that the Bureau of Forestry had insisted on its claim all throughout that period of thirty (30) years and even before
and applicants and their predecessors had made implicit recognition of that; the result must be to deny all these applications;
this Court stating that it had felt impelled notwithstanding, just the same to resolve the conflicting positions of the private litigants
among themselves as to who of them had demonstrated a better right to possess because this Court foresees that this litigation
will go all the way to the Supreme Court and it is always better that the findings be as complete as possible to enable the
Highest Court to pass final judgment;

"IN VIEW WHEREOF, the decision must have to be as it is hereby reversed; the application as well as all the oppositions with
the exception of that of the Director of Forestry which is hereby sustained are dismissed; no more pronouncement as to
costs."cralaw virtua1aw library

A petition for review on certiorari was filed by the Heirs of Jose Amunategui contending that the disputed lot had been in the
possession of private persons for over thirty years and therefore in accordance with Republic Act No. 1942, said lot could still be
the subject of registration and confirmation of title in the name of a private person in accordance with Act No. 496 known as the
Land Registration Act. On the other hand, another petition for review on certiorari was filed by Roque Borre and Encarnacion
Delfin, contending that the trial court committed grave abuse of discretion in dismissing their complaint against the Heirs of Jose
Amunategui. The Borre complaint was for the annulment of the deed of absolute sale of Lot No. 885 executed by them in favor
of the Heirs of Amunategui. The complaint was dismissed on the basis of the Court of Appeals decision that the disputed lot is
part of the public domain. The petitioners also question the jurisdiction of the Court of Appeals in passing upon the relative rights
of the parties over the disputed lot when its final decision after all is to declare said lot a part of the public domain classified as
forest land.chanrobles law library : red

The need for resolving the questions raised by Roque Borre and Encarnacion Delfin in their petition depends on the issue raised
by the Heirs of Jose Amunategui, that is, whether or not Lot No. 885 is public forest land, not capable of registration in the
names of the private applicants.

The Heirs of Jose Amunategui maintain that Lot No. 885 cannot be classified as forest land because it is not thickly forested but
is a "mangrove swamp." Although conceding that a "mangrove swamp" is included in the classification of forest land in
accordance with Section 1820 of the Revised Administrative Code, the petitioners argue that no big trees classified in Section
1821 of said Code as first, second and third groups are found on the land in question. Furthermore, they contend that Lot 885,
even if it is a mangrove swamp, is still subject to land registration proceedings because the property had been in actual
possession of private persons for many years, and therefore, said land was already "private land" better adapted and more
valuable for agricultural than for forest purposes and not required by the public interests to be kept under forest classification.

The petition is without merit.

A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers
may have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted to
crops by kaingin cultivators or other farmers. "Forest lands" do not have to be on mountains or in out of the way places. Swampy
areas covered by mangrove trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest
land. The classification is descriptive of its legal nature or status and does not have to be descriptive of what the land actually
looks like. Unless and until the land classified as "forest" is released in an official proclamation to that effect so that it may form
part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply.

This Court ruled in the leading case of Director of Forestry v. Muoz (23 SCRA 1184) that possession of forest lands, no matter
how long, cannot ripen into private ownership. And in Republic v. Animas (56 SCRA 499), we granted the petition on the ground
that the area covered by the patent and title was not disposable public land, it being a part of the forest zone and any patent and
title to said area is void ab initio. It bears emphasizing that a positive act of Government is needed to declassify land which is
classified as forest and to convert it into alienable or disposable land for agricultural or other purposes.

The findings of the Court of Appeals are particularly well-grounded in the instant petition.

The fact that no trees enumerated in Section 1821 of the Revised Administrative Code are found in Lot No. 885 does not divest
such land of its being classified as forest land, much less as land of the public domain. The appellate court found that in 1912,
the land must have been a virgin forest as stated by Emeterio Berebers witness Deogracias Gavacao, and that as late as 1926,
it must have been a thickly forested area as testified by Jaime Bertolde. The opposition of the Director of Forestry was
strengthened by the appellate courts finding that timber licenses had to be issued to certain licensees and even Jose
Amunategui himself took the trouble to ask for a license to cut timber within the area. It was only sometime in 1950 that the
property was converted into fishpond but only after a previous warning from the District Forester that the same could not be
done because it was classified as "public forest." chanrobles.com:cralaw:red

In confirmation of imperfect title cases, the applicant shoulders the burden of proving that he meets the requirements of Section
48, Commonwealth Act No. 141, as amended by Republic Act No. 1942. He must overcome the presumption that the land he is
applying for is part of the public domain but that he has an interest therein sufficient to warrant registration in his name because
of an imperfect title such as those derived from old Spanish grants or that he has had continuous, open, and notorious
possession and occupation of agricultural lands of the public domain under a bona fide claim of acquisition of ownership for at
least thirty (30) years preceding the filing of his application.

The decision of the appellate court is not based merely on the presumptions implicit in Commonwealth Act No. 141 as amended.
The records show that Lot No. 88S never ceased to be classified as forest land of the public domain.

In Republic v. Gonong (118 SCRA 729) we ruled:jgc:chanrobles.com.ph

"As held in Oh Cho v. Director of Lands, 75 Phil. 890, all lands that were not acquired from the Government, either by purchase
or by grant, belong to the public domain. An exception to the rule would be any land that should have been in the possession of
an occupant and of his predecessors in-interests since time immemorial, for such possession would justify the presumption that
the land had never been part of the public domain or that it had been a private property even before the Spanish
conquest."cralaw virtua1aw library

In the instant petitions, the exception in the Oh Cho case does not apply. The evidence is clear that Lot No. 885 had always
been public land classified as forest.

Similarly, in Republic v. Vera (120 SCRA 210), we ruled:jgc:chanrobles.com.ph

". . . The possession of public land however long the period thereof may have extended, never confers title thereto upon the
possessor because the statute of limitations with regard to public land does not operate against the State, unless the occupant
can prove possession and occupation of the same under claim of ownership for the required number of years to constitute a
grant from the State. (Director of Lands v. Reyes, 68 SCRA 177, 195)."cralaw virtua1aw library

We, therefore, affirm the finding that the disputed property Lot No. 885 is part of the public domain, classified as public forest
land. There is no need for us to pass upon the other issues raised by petitioners Roque Borre and Encarnacion Delfin, as such
issues are rendered moot by this finding.chanrobles virtual lawlibrary

WHEREFORE, the petitions in G. R. No. L-30035 and G. R. No. L-27873 are DISMISSED for lack of merit. Costs against the
petitioners.

SO ORDERED.

Melencio-Herrera, Plana and Relova, JJ., concur.

Teehankee, J., concurs in the result.



EN BANC

PROVINCE OF RIZAL, MUNICIPALITY OF
SAN MATEO, PINTONG BOCAUE
MULTIPURPOSE COOPERATIVE,
CONCERNED CITIZENS OF RIZAL, INC.,
ROLANDO E. VILLACORTE, BERNARDO
HIDALGO, ANANIAS EBUENGA, VILMA T.
MONTAJES, FEDERICO MUNAR, JR.,
ROLANDO BEAS, SR., ET AL., and
KILOSBAYAN, INC.,
P e t i t i o n e r s,


- versus -


EXECUTIVE SECRETARY, SECRETARY OF
ENVIRONMENT & NATURAL RESOURCES,
LAGUNA LAKE DEVELOPMENT
AUTHORITY, SECRETARY OF PUBLIC
WORKS & HIGHWAYS, SECRETARY OF
BUDGET & MANAGEMENT, METRO MANILA
DEVELOPMENT AUTHORITY and THE
HONORABLE COURT OF APPEALS,
R e s p o n d e n t s.
G.R. No. 129546


Present:

DAVIDE, JR., C. J.,
PUNO,
PANGANIBAN,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
MARTINEZ,
CORONA,
CARPIO MORALES,
CALLEJO, SR.,
AZCUNA,
TINGA,
CHICO-NAZARIO, and
GARCIA, JJ.





Promulgated:


December 13, 2005
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

D E C I S I O N


CHICO-NAZARIO, J .:



The earth belongs in usufruct to the living.
[1]


At the height of the garbage crisis plaguing Metro Manila and its environs, parts of the Marikina Watershed Reservation
were set aside by the Office of the President, through Proclamation No. 635 dated 28 August 1995, for use as a sanitary landf ill
and similar waste disposal applications. In fact, this site, extending to more or less 18 hectares, had already been in operation
since 19 February 1990
[2]
for the solid wastes of Quezon City, Marikina, San Juan, Mandaluyong, Pateros, Pasig, and Taguig.
[3]


This is a petition filed by the Province of Rizal, the municipality of San Mateo, and various concerned citizens for review
on certiorari of the Decision of the Court of Appeals in CA-G.R. SP No. 41330, denying, for lack of cause of action, the petition
for certiorari, prohibition and mandamus with application for a temporary restraining order/writ of preliminary injunction assailing
the legality and constitutionality of Proclamation No. 635.

The facts are documented in painstaking detail.

On 17 November 1988, the respondent Secretaries of the Department of Public Works and Highways (DPWH) and the
Department of Environment and Natural Resources (DENR) and the Governor of the Metropolitan Manila Commission (MMC)
entered into a Memorandum of Agreement (MOA),
[4]
which provides in part:
1. The DENR agrees to immediately allow the utilization by the Metropolitan
Manila Commission of its land property located at Pintong Bocaue in San Mateo, Rizal as a sanitary
landfill site, subject to whatever restrictions that the government impact assessment might require.

2. Upon signing of this Agreement, the DPWH shall commence the
construction/development of said dumpsite.

3. The MMC shall: a) take charge of the relocation of the families within and
around the site; b) oversee the development of the areas as a sanitary landfill; c) coordinate/monitor the
construction of infrastructure facilities by the DPWH in the said site; and d) ensure that the necessary
civil works are properly undertaken to safeguard against any negative environmental impact in the area.



On 7, 8 and 10 February 1989, the Sangguniang Bayan of San Mateo wrote Gov. Elfren Cruz of the MMC, Sec. Fiorello
Estuar of the DPWH, the Presidential Task Force on Solid Waste Management, Executive Secretary Catalino Macaraig, and
Sec. Fulgencio Factoran, Jr., pointing out that it had recently passed a Resolution banning the creation of dumpsites for Metro
Manila garbage within its jurisdiction, asking that their side be heard, and that the addressees suspend and temporarily hol d in
abeyance all and any part of your operations with respect to the San Mateo Landfill Dumpsite. No action was taken on these
letters.

It turns out that the land subject of the MOA of 17 November 1988 and owned by the DENR was part of the Marikina
Watershed Reservation Area. Thus, on 31 May 1989, forest officers of the Forest Engineering and Infrastructure Unit of the
Community Environment and Natural Resource Office, (CENRO) DENR-IV, Rizal Province, submitted a Memorandum
[5]
on the
On-going Dumping Site Operation of the MMC inside (the) Upper Portion of Marikina Watershed Reservation, located at
Barangay Pintong Bocaue, San Mateo, Rizal, and nearby localities. Said Memorandum reads in part:
Observations:

3.1 The subject area is arable and agricultural in nature;
3.2 Soil type and its topography are favorable for agricultural and forestry productions;

. . .

3.5 Said Dumping Site is observed to be confined within the said Watershed Reservation,
bearing in the northeastern part of Lungsod Silangan Townsite Reservation. Such illegal
Dumping Site operation inside (the) Watershed Reservation is in violation of P.D. 705,
otherwise known as the Revised Forestry Code, as amended. . .

Recommendations:

5.1 The MMC Dumping Site Inside Marikina Watershed Reservation, particularly at Brgy. Pintong
Bocaue, San Mateo, Rizal and at Bo. Pinugay, Baras/Antipolo, Rizal which are the present
garbage zones must totally be stopped and discouraged without any political intervention
and delay in order to save our healthy ecosystems found therein, to avoid much
destruction, useless efforts and lost (sic) of millions of public funds over the land in
question; (Emphasis ours)



On 19 June 1989, the CENRO submitted another Investigation Report
[6]
to the Regional Executive Director which states
in part that:
1. About two (2) hectares had been excavated by bulldozers and garbage dumping operations are going
on.

2. The dumping site is without the concurrence of the Provincial Governor, Rizal Province and without any
permit from DENR who has functional jurisdiction over the Watershed Reservation; and

3. About 1,192 families residing and cultivating areas covered by four (4) Barangays surrounding the
dumping site will adversely be affected by the dumping operations of MMC including their sources of
domestic water supply. x x x x


On 22 January 1990, the CENRO submitted still another Investigation Report
[7]
to the Regional Executive Director
which states that:
Findings show that the areas used as Dumping Site of the MMC are found to be within the Marikina
Watershed which are part of the Integrated Social Forestry Project (ISF) as per recorded inventory of Forest
Occupancy of this office.

It also appears that as per record, there was no permit issued to the MMC to utilize these portions of
land for dumping purposes.

It is further observed that the use of the areas as dumping site greatly affects the ecological balance
and environmental factors in this community.


On 19 February 1990, the DENR Environmental Management Bureau, through Undersecretary for Environment and
Research Celso R. Roque, granted the Metro Manila Authority (MMA [formerly MMC]) an Environmental Compliance Certificate
(ECC) for the operation of a two-and-a-half-hectare garbage dumpsite.

The ECC was sought and granted to comply with the requirement of Presidential Decree No. 1586 Establishing an
Environmental Impact Statement System, Section 4 of which states in part that, No persons, partnership or corporation shall
undertake or operate any such declared environmentally critical project or area without first securing an Environmental
Compliance Certificate. Proclamation No. 2146, passed on 14 December 1981, designates all areas declared by law as
national parks, watershed reserves, wildlife preserves, and sanctuaries as Environmentally Critical Areas.

On 09 March 1990, respondent Laguna Lake Development Authority (LLDA), through its Acting General Manager, sent
a letter
[8]
to the MMA, which reads in part:
Through this letter we would like to convey our reservation on the choice of the sites for solid waste
disposal inside the watershed of Laguna Lake. As you may already know, the Metropolitan Waterworks and
Sewerage System (MWSS) has scheduled the abstraction of water from the lake to serve the needs of
about 1.2 million residents of Muntinlupa, Paranaque, Las Pinas and Bacoor, Cavite by
1992. Accordingly, the Laguna Lake Development Authority (LLDA) is accelerating itsenvironmental
management program to upgrade the water quality of the lake in order to make it suitable as a source of
domestic water supply the whole year round. The said program regards dumpsites as incompatible within
the watershed because of the heavy pollution, including the risk of diseases, generated by such
activities which would negate the governments efforts to upgrade the water quality of the
lake. Consequently, please consider our objection to the proposed location of the dumpsites within the
watershed. (Emphasis supplied by petitioners)



On 31 July 1990, less than six months after the issuance of the ECC, Undersecretary Roque suspended the ECC in a
letter
[9]
addressed to the respondent Secretary of DPWH, stating in part that:
Upon site investigation conducted by Environmental Management Bureau staff on development
activities at the San Mateo Landfill Site, it was ascertained that ground slumping and erosion have resulted
from improper development of the site. We believe that this will adversely affect the environmental quality in
the area if the proper remedial measures are not instituted in the design of the landfill site. This is therefore
contradictory to statements made in the Environmental Impact Statement (EIS) submitted that above
occurrences will be properly mitigated.

In view of this, we are forced to suspend the Environmental Compliance Certificate (ECC) issued until
appropriate modified plans are submitted and approved by this Office for implementation. (Emphasis ours)


On 21 June 1993, the Acting Mayor of San Mateo, Enrique Rodriguez, Jr., Barangay Captain Dominador Vergara, and
petitioner Rolando E. Villacorte, Chairman of the Pintong Bocaue Multipurpose Cooperative (PBMC) wrote
[10]
then President
Fidel V. Ramos expressing their objections to the continued operation of the MMA dumpsite for causing unabated pollution and
degradation of the Marikina Watershed Reservation.

On 14 July 1993, another Investigation Report
[11]
submitted by the Regional Technical Director to the DENR
Undersecretary for Environment and Research contained the following findings and recommendations:
Remarks and Findings:

. . . .

5. Interview with Mr. Dayrit, whose lot is now being endangered because soil erosion have (sic)
caused severe siltation and sedimentation of the Dayrit Creek which water is greatly polluted by the dumping of
soil bulldozed to the creek;

6. Also interview with Mrs. Vilma Montajes, the multi-grade teacher of Pintong Bocaue Primary
School which is located only about 100 meters from the landfill site. She disclosed that bad odor have (sic)
greatly affected the pupils who are sometimes sick with respiratory illnesses. These odors show that MMA have
(sic) not instituted/sprayed any disinfectant chemicals to prevent air pollution in the area. Besides large flies
(Bangaw) are swarming all over the playground of the school. The teacher also informed the undersigned that
plastic debris are being blown whenever the wind blows in their direction.

7. As per investigation report there are now 15 hectares being used as landfill disposal sites by
the MMA. The MMA is intending to expand its operation within the 50 hectares.

8. Lots occupied within 50 hectares are fully planted with fruit bearing trees like Mangoes, Santol,
Jackfruit, Kasoy, Guyabano, Kalamansi and Citrus which are now bearing fruits and being harvested and
marketed to nearby San Mateo Market and Masinag Market in Antipolo.

. . . .

Recommendations:

1. As previously recommended, the undersigned also strongly recommend(s) that the MMA be
made to relocate the landfill site because the area is within the Marikina Watershed Reservation and Lungsod
Silangan. The leachate treatment plant ha(s) been eroded twice already and contaminated the nearby creeks
which is the source of potable water of the residents. The contaminated water also flows to Wawa Dam and
Boso-boso River which also flows to Laguna de Bay.

2. The proposed Integrated Social Forestry Project be pushed through or be approved. ISF project
will not only uplift the socio-economic conditions of the participants but will enhance the rehabilitation of the
Watershed considering that fruit bearing trees are vigorously growing in the area. Some timber producing
species are also planted like Mahogany and Gmelina Arboiea. There are also portions where dipterocarp
residuals abound in the area.

3. The sanitary landfill should be relocated to some other area, in order to avoid any conflict with
the local government of San Mateo and the nearby affected residents who have been in the area for almost 10-
20 years.



On 16 November 1993, DENR Secretary Angel C. Alcala sent MMA Chairman Ismael A. Mathay, Jr. a letter
[12]
stating
that after a series of investigations by field officials of the DENR, the agency realized that the MOA entered into on 17
November 1988 is a very costly error because the area agreed to be a garbage dumpsite is inside the Marikina Watershed
Reservation. He then strongly recommended that all facilities and infrastructure in the garbage dumpsite in Pintong Bocaue be
dismantled, and the garbage disposal operations be transferred to another area outside the Marikina Watershed Reservation to
protect the health and general welfare of the residents of San Mateo in particular and the residents of Metro Manila in general.

On 06 June 1995, petitioner Villacorte, Chairman of the PBMC, wrote
[13]
President Ramos, through the Executive
Secretary, informing the President of the issues involved, that the dumpsite is located near three public elementary schools, the
closest of which is only fifty meters away, and that its location violates the municipal zoning ordinance of San Mateo and, in
truth, the Housing and Land Use Regulatory Board had denied the then MMA chairmans application for a locational clearance
on this ground.

On 21 August 1995, the Sangguniang Bayan of San Mateo issued a Resolution
[14]
expressing a strong objection to the
planned expansion of the landfill operation in Pintong Bocaue and requesting President Ramos to disapprove the draft
Presidential Proclamation segregating 71.6 Hectares from Marikina Watershed Reservation for the landfill site in Pintong
Bocaue, San Mateo, Rizal.

Despite the various objections and recommendations raised by the government agencies aforementioned, the Office of
the President, through Executive Secretary Ruben Torres, signed and issued Proclamation No. 635 on 28 August 1995,
Excluding from the Marikina Watershed Reservation Certain Parcels of Land Embraced Therein for Use as Sanitary Landfill
Sites and Similar Waste Disposal Under the Administration of the Metropolitan Manila Development Authority. The pertinent
portions thereof state:
WHEREAS, to cope with the requirements of the growing population in Metro Manila and the adjoining
provinces and municipalities, certain developed and open portions of the Marikina Watershed Reservation, upon
the recommendation of the Secretary of the Department of Environment and Natural Resources should now be
excluded form the scope of the reservation;

WHEREAS, while the areas delineated as part of the Watershed Reservations are intended primarily for
use in projects and/or activities designed to contain and preserve the underground water supply, other
peripheral areas had been included within the scope of the reservation to provide for such space as may be
needed for the construction of the necessary structures, other related facilities, as well as other priority projects
of government as may be eventually determined;

WHEREAS, there is now an urgent need to provide for, and develop, the necessary facilities for the
disposal of the waste generated by the population of Metro Manila and the adjoining provinces and
municipalities, to ensure their sanitary and /or hygienic disposal;

WHEREAS, to cope with the requirements for the development of the waste disposal facilities that may
be used, portions of the peripheral areas of the Marikina Watershed Reservation, after due consideration and
study, have now been identified as suitable sites that may be used for the purpose;

WHEREAS, the Secretary of the Department of Environment and Natural Resources has recommended
the exclusion of these areas that have been so identified from the Marikina Watershed Reservation so that they
may then be developed for the purpose;

NOW, THEREFORE, for and in consideration of the aforecited premises, I, Fidel V. Ramos, President of
the Philippines, by virtue of the powers vested in me by law, do hereby ordain:

Section 1. General That certain parcels of land, embraced by the Marikina Watershed Reservation,
were found needed for use in the solid waste disposal program of the government in Metropolitan Manila, are
hereby excluded from that which is held in reserve and are now made available for use as sanitary landfill and
such other related waste disposal applications.

Section 2. Purpose The areas being excluded from the Marikina Watershed Reservation are hereby
placed under the administration of the Metropolitan Manila Development Authority, for development as Sanitary
Landfill, and/or for use in the development of such other related waste disposal facilities that may be used by the
cities and municipalities of Metro Manila and the adjoining province of Rizal and its municipalities.

Section 3. Technical Description Specifically, the areas being hereby excluded from the Marikina
Watershed Reservation consist of two (2) parcels, with an aggregate area of approximately ONE MILLION
SIXTY THOUSAND FIVE HUNDRED TWENTY NINE (1,060,529) square meters more or less, as follows: x x x
x

Section 4. Reservations The development, construction, use and/or operation of any facility that may
be established within the parcel of land herein excluded from the Marikina Watershed Reservation shall be
governed by existing laws, rules and regulations pertaining to environmental control and management. When
no longer needed for sanitary landfill purposes or the related waste disposal activities, the parcels of land
subject of this proclamation shall revert back as part of the Marikina Watershed Reservation, unless otherwise
authorized.



On 06 September 1995, Director Wilfrido S. Pollisco of the Protected Areas and Wildlife Bureau wrote the DENR
Secretary to express the bureaus stand against the dumpsite at Pintong Bocaue, and that it is our view . . . that the mere
presence of a garbage dumpsite inside a watershed reservation is definitely not compatible with the very purpose and objectives
for which the reservation was established.

On 24 November 1995, the petitioners Municipality of San Mateo and the residents of Pintong Bocaue, represented by
former Senator Jovito Salonga, sent a letter to President Ramos requesting him to reconsider Proclamation No. 635. Receiving
no reply, they sent another letter on 02 January 1996 reiterating their previous request.

On 04 March 1996, then chairman of the Metro Manila Development Authority (MMDA [formerly MMA]) Prospero I.
Oreta addressed a letter to Senator Salonga, stating in part that:
.

2. Considering the circumstances under which we are pursuing the project, we are certain you will agree
that, unless we are prepared with a better alternative, the project simply has to be pursued in the best
interest of the greater majority of the population, particularly their health and welfare.

2.1 The San Mateo Sanitary Landfill services, at least, 38% of the waste disposal site requirements of
Metro Manila where an estimated 9 million population reside.

2.2 Metro Manila is presently estimated to be generating, at least, 15,700 cubic meters of household or
municipal waste, a 1.57 hectare of land area will be filled in a months time with a pile 31 meters high
of garbage, or in a year, the accumulated volume will require 18.2 hectares.

. . . .

4. The sanitary landfill projects are now on their fifth year of implementation. The amount of effort and money
already invested in the project by the government cannot easily be disregarded, much more set aside in
favor of the few settlers/squatters who chose to ignore the earlier notice given to them that the area would
be used precisely for the development of waste disposal sites, and are now attempting to arouse
opposition to the project.

4.2 There is no place within the jurisdiction of Metro Manila, with an area big enough to accommodate at
least 3 to 5 years of waste disposal requirements. x x x x

4.21 The present site at San Mateo was selected because, at the time consideration was being made, and
up to the present, it is found to have the attributes that positively respond to the criteria established:

4.21.1 The site was a government property and would not require any outlay for it to be acquired.

4.21.2 It is far from any sizeable community/settlements that could be affected by the development that
would be introduced and yet, was within economic hauling distance from the areas they are
designed to serve.

4.21.21 At the time it was originally decided to locate the landfills at the present site, there
were not more that fifteen (15) settlers in the area and they had hardly established
themselves. The community settlements were located far from the site.

4.21.22 The area was hardly accessible, especially to any public transport. The area was
being served by a public utility jeep that usually made only two (2) trips daily. During
the rainy season, it could only be reached by equipping the vehicle with tire chains to
traverse the slippery muddy trail roads.

4.21.3 There was, at least, seventy-three (73) hectares available at the site.

4.3 While the site was within the Marikina Watershed Reservation under the administration of the DENR, the site
was located at the lower periphery of the buffer zone; was evaluated to be least likely to affect the
underground water supply; and could, in fact, be excluded from the reservation.

4.31 It was determined to be far from the main water containment area for it to pose any immediate danger of
contaminating the underground water, in case of a failure in any of the mitigating measures that would
be installed.

4.32 It was likewise too far from the nearest body of water, the Laguna Lake, and the distance, plus the
increasing accumulation of water from other tributaries toward the lake, would serve to dilute and
mitigate any contamination it may emit, in case one happened.

4.33 To resolve the recurring issue regarding its being located within the Marikina Watershed
Reservation, the site had been recommended by the DENR, and approved by the President, to already
be excluded from the Marikina Watershed reservation and placed under the administration of MMDA,
since the site was deemed to form part of the land resource reserve then commonly referred to as buffer
zone.

5. Contrary to the impression that you had been given, relocating the site at this point and time would not be easy,
if not impracticable, because aside from the investments that had been made in locating the present site, further
investments have been incurred in:

5.1 The conduct of the technical studies for the development being implemented. Through a grant-in-aid from
the World Bank, US$600,000 was initially spent for the conduct of the necessary studies on the area and the
design of the landfill. This was augmented by, at least, another P1.5 million from the government for the
studies to be completed, or a total cost at the time (1990) of approximately P20 million.

5.2. Additionally, the government has spent approximately P33 million in improving on the roadway to make the
site accessible from the main road/highway.

5.3 To achieve the necessary economies in the development of the site, the utilities had been planned so that
their use could be maximized. These include the access roads, the drainage system, the leacheate collection
system, the gas collection system, and the waste water treatment system. Their construction are designed so
that instead of having to construct independent units for each area, the use of existing facilities can be
maximized through a system of interconnection. On the average, the government is spending P14.8 million to
develop a hectare of sanitary landfill area.

6. Despite the preparations and the investments that are now being made on the project, it is estimated that the
total available area, at an accelerated rate of disposal, assuming that all open dump sites were to be closed, will
only last for 39 months.

6.1 We are still hard pressed to achieve advanced development on the sites to assure against any possible crisis
in garbage from again being experienced in Metro Manila, aside from having to look for the additional sites
that may be used after the capacities shall have been exhausted.

6.2 Faced with the prospects of having the 15,700 cubic meters of garbage generated daily strewn all over Metro
Manila, we are certain you will agree that it would be futile to even as much as consider a suspension of the
waste disposal operations at the sanitary landfills.



On 22 July 1996, the petitioners filed before the Court of Appeals a civil action for certiorari, prohibition
and mandamus with application for a temporary restraining order/writ of preliminary injunction. The hearing on the prayer for
preliminary injunction was held on 14 August 1996.

On 13 June 1997, the court a quo rendered a Decision,
[15]
the dispositive part of which reads:
WHEREFORE, the petition for certiorari, prohibition and mandamus with application for a temporary
restraining order/writ of preliminary injunction for lack of cause of action, is hereby DENIED.
[16]




Hence, this petition for review on certiorari of the above decision on the following grounds:

I

THE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION IN DELIBERATELY IGNORING THE
SIGNIFICANT FACT THAT PRESIDENTIAL PROCLAMATION NO. 635 WAS BASED ON A BRAZEN
FORGERY IT WAS SUPPOSEDLY ISSUED, AS STATED IN THE PROCLAMATION ITSELF AND
REPEATEDLY ASSERTED BY RESPONDENTS IN THEIR COMMENT, ON THE BASIS OF THE ALLEGED
RECOMMENDATION OF THE DENR SECRETARY DATED JUNE 26, 1995 BUT WHICH ASSERTION WAS
DENOUNCED BY THE THEN SECRETARY ANGEL C. ALCALA HIMSELF IN A SWORN STATEMENT
DATED SEPTEMBER 18, 1996 AND AGAIN DURING THE SPECIAL HEARING OF THE CASE IN THE
COURT OF APPEALS ON NOVEMBER 13, 1996 AS A FORGERY SINCE HIS SIGNATURE ON THE
ALLEGED RECOMMENDATION HAD BEEN FALSIFIED, AS NOW ADMITTED BY RESPONDENTS
THEMSELVES IN THEIR COMMENT FILED WITH THE COURT OF APPEALS, THROUGH THE OFFICE OF
THE SOLICITOR GENERAL.

II

THE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION IN COMPLETELY IGNORING THE
SIGNIFICANT FACT THAT THE RESPONDENTS ARE OPERATING THE LANDFILL BASED ON A
SPURIOUS ENVIRONMENTAL COMPLIANCE CERTIFICATE.

III

THE COURT OF APPEALS ERRED IN RULING THAT THE RESPONDENTS DID NOT VIOLATE R.A. 7586
WHEN THEY ISSUED AND IMPLEMENTED PROCLAMATION NO. 635 CONSIDERING THAT THE
WITHDRAWAL OR DISESTABLISHMENT OF A PROTECTED AREA OR THE MODIFICATION OF THE
MARIKINA WATERSHED CAN ONLY BE DONE BY AN ACT OF CONGRESS.

IV

THE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION WHEN IT DELIBERATELY AND
WILLFULLY BRUSHED ASIDE THE UNANIMOUS FINDINGS AND ADVERSE RECOMMENDATIONS OF
RESPONSIBLE GOVERNMENT AGENCIES AND NON-PARTISAN OFFICIALS CONCERNED WITH
ENVIRONMENTAL PROTECTION IN FAVOR OF THE SELF-SERVING, GRATUITOUS ASSERTIONS FOUND
IN THE UNSOLICITED, PARTISAN LETTER OF FORMER MALABON MAYOR, NOW CHAIRMAN
PROSPERO ORETA OF THE MMDA WHO IS AN INTERESTED PARTY IN THIS CASE.


V

THE COURT OF APPEALS ERRED WHEN IT READILY SWALLOWED RESPONDENTS ASSERTION THAT
THE SAN MATEO DUMPSITE IS LOCATED IN THE BUFFER ZONE OF THE RESERVATION AND IS
THEREFORE OUTSIDE OF ITS BOUNDARIES, AND EVEN DECLARED IN ITS DECISION THAT IT TOOK
SERIOUS NOTE OF THIS PARTICULAR ARGUMENT.

VI

THE COURT OF APPEALS ERRED AND ABUSED ITS DISCRETION WHEN IT ENCROACHED ON THE
FUNCTION OF CONGRESS BY EXPRESSING ITS UNJUSTIFIED FEAR OF MINI-SMOKEY MOUNTAINS
PROLIFERATING IN METRO MANILA AND JUSTIFYING ITS DECISION IN FAVOR OF AN INTEGRATED
SYSTEM OF SOLID WASTE MANAGEMENT LIKE THE SAN MATEO LANDFILL.



On 05 January 1998, while the appeal was pending, the petitioners filed a Motion for Temporary Restraining
Order,
[17]
pointing out that the effects of the El Niophenomenon would be aggravated by the relentless destruction of the
Marikina Watershed Reservation. They noted that respondent MMDA had, in the meantime, continued to expand the area of the
dumpsite inside the Marikina Watershed Reservation, cutting down thousands of mature fruit trees and forest trees, and leveli ng
hills and mountains to clear the dumping area. Garbage disposal operations were also being conducted on a 24-hour basis, with
hundreds of metric tons of wastes being dumped daily, including toxic and infectious hospital wastes, intensifying the air, ground
and water pollution.
[18]


The petitioners reiterated their prayer that respondent MMDA be temporarily enjoined from further dumping waste into
the site and from encroaching into the area beyond its existing perimeter fence so as not to render the case moot and academic.

On 28 January 1999, the petitioners filed a Motion for Early Resolution,
[19]
calling attention to the continued expansion of
the dumpsite by the MMDA that caused the people of Antipolo to stage a rally and barricade the Marcos Highway to stop the
dump trucks from reaching the site for five successive days from 16 January 1999. On the second day of the barricade, all the
municipal mayors of the province of Rizal openly declared their full support for the rally, and notified the MMDA that they would
oppose any further attempt to dump garbage in their province.
[20]


As a result, MMDA officials, headed by then Chairman Jejomar Binay, agreed to abandon the dumpsite after six
months. Thus, the municipal mayors of Rizal, particularly the mayors of Antipolo and San Mateo, agreed to the use of the
dumpsite until that period, which would end on 20 July 1999.
[21]


On 13 July 1999, the petitioners filed an Urgent Second Motion for Early Resolution
[22]
in anticipation of violence
between the conflicting parties as the date of the scheduled closure of the dumpsite neared.

On 19 July 1999, then President Joseph E. Estrada, taking cognizance of the gravity of the problems in the affected
areas and the likelihood that violence would erupt among the parties involved, issued a Memorandum ordering the closure of the
dumpsite on 31 December 2000.
[23]
Accordingly, on 20 July 1999, the Presidential Committee on Flagship Programs and
Projects and the MMDA entered into a MOA with the Provincial Government of Rizal, the Municipality of San Mateo, and the City
of Antipolo, wherein the latter agreed to further extend the use of the dumpsite until its permanent closure on 31 December
2000.
[24]


On 11 January 2001, President Estrada directed Department of Interior and Local Government Secretary Alfredo Lim
and MMDA Chairman Binay to reopen the San Mateo dumpsite in view of the emergency situation of uncollected garbage in
Metro Manila, resulting in a critical and imminent health and sanitation epidemic.
[25]


Claiming the above events constituted a clear and present danger of violence erupting in the affected areas, the
petitioners filed an Urgent Petition for Restraining Order
[26]
on 19 January 2001.

On 24 January 2001, this Court issued the Temporary Restraining Order prayed for, effective immediately and until
further orders.
[27]

Meanwhile, on 26 January 2001, Republic Act No. 9003, otherwise known as The Ecological Solid Waste Management
Act of 2000, was signed into law by President Estrada.

Thus, the petitioners raised only two issues in their Memorandum
[28]
of 08 February 2005: 1) whether or not respondent
MMDA agreed to the permanent closure of the San Mateo Landfill as of December 2000, and 2) whether or not the permanent
closure of the San Mateo landfill is mandated by Rep. Act No. 9003.

We hold that the San Mateo Landfill will remain permanently closed.

Although the petitioners may be deemed to have waived or abandoned the issues raised in their previous pleadings but
not included in the memorandum,
[29]
certain events we shall relate below have inclined us to address some of the more pertinent
issues raised in the petition for the guidance of the herein respondents, and pursuant to our symbolic function to educate the
bench and bar.
[30]


The law and the facts indicate that a mere MOA does not guarantee the dumpsites permanent closure.

The rally and barricade staged by the people of Antipolo on 28 January 1999, with the full support of all the mayors of
Rizal Province caused the MMDA to agree that it would abandon the dumpsite after six months. In return, the municipal mayors
allowed the use of the dumpsite until 20 July 1999.

On 20 July 1999, with much fanfare and rhetoric, the Presidential Committee on Flagship Programs and Projects and
the MMDA entered into a MOA with the Provincial Government of Rizal, the Municipality of San Mateo, and the City of Antipolo,
whereby the latter agreed to an extension for the use of the dumpsite until 31 December 2000, at which time it would be
permanently closed.

Despite this agreement, President Estrada directed Department of Interior and Local Government Secretary Alfredo Lim
and MMDA Chairman Binay to reopen the San Mateo dumpsite on 11 January 2001, in view of the emergency situation of
uncollected garbage in Metro Manila, resulting in a critical and imminent health and sanitation epidemic; our issuance of a TRO
on 24 January 2001 prevented the dumpsites reopening.

Were it not for the TRO, then President Estradas instructions would have been lawfully carried out, for as we observed
in Oposa v. Factoran, the freedom of contract is not absolute. Thus:

.. In Abe vs. Foster Wheeler Corp., this Court stated: "The freedom of contract, under our system of
government, is not meant to be absolute. The same is understood to be subject to reasonable legislative
regulation aimed at the promotion of public health, moral, safety and welfare. In other words, the constitutional
guaranty of non-impairment of obligations of contract is limited by the exercise of the police power of the State,
in the interest of public health, safety, moral and general welfare." The reason for this is emphatically set forth
in Nebia vs. New York, quoted in Philippine American Life Insurance Co. vs. Auditor General, to wit: "'Under our
form of government the use of property and the making of contracts are normally matters of private and not of
public concern. The general rule is that both shall be free of governmental interference. But neither property
rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his property to
the detriment of his fellows, or exercise his freedom of contract to work them harm. Equally fundamental with the
private right is that of the public to regulate it in the common interest.'" In short, the non-impairment clause must
yield to the police power of the state. (Citations omitted, emphasis supplied)

We thus feel there is also the added need to reassure the residents of the Province of Rizal that this is indeed a final
resolution of this controversy, for a brief review of the records of this case indicates two self-evident facts. First, the San Mateo
site has adversely affected its environs, and second, sources of water should always be protected.

As to the first point, the adverse effects of the site were reported as early as 19 June 1989, when the Investigation
Report of the Community Environment and Natural Resources Officer of DENR-IV-1 stated that the sources of domestic water
supply of over one thousand families would be adversely affected by the dumping operations.
[31]
The succeeding report included
the observation that the use of the areas as dumping site greatly affected the ecological balance and environmental factors of
the community.
[32]
Respondent LLDA in fact informed the MMA that the heavy pollution and risk of disease generated by
dumpsites rendered the location of a dumpsite within the Marikina Watershed Reservation incompatible with its program of
upgrading the water quality of the Laguna Lake.
[33]


The DENR suspended the sites ECC after investigations revealed ground slumping and erosion had resulted from
improper development of the site.
[34]
Another Investigation Report
[35]
submitted by the Regional Technical Director to the DENR
reported respiratory illnesses among pupils of a primary school located approximately 100 meters from the site, as well as the
constant presence of large flies and windblown debris all over the schools playground. It further reiterated reports that the
leachate treatment plant had been eroded twice already, contaminating the nearby creeks that were sources of potable water for
the residents. The contaminated water was also found to flow to the Wawa Dam and Boso-boso River, which in turn
empties into Laguna de Bay.

This brings us to the second self-evident point. Water is life, and must be saved at all costs. In Collado v. Court of
Appeals,
[36]
we had occasion to reaffirm our previous discussion in Sta. Rosa Realty Development Corporation v. Court of
Appeals,
[37]
on the primordial importance of watershed areas, thus: The most important product of a watershed is water, which
is one of the most important human necessities. The protection of watersheds ensures an adequate supply of water for future
generations and the control of flashfloods that not only damage property but also cause loss of lives. Protection of watersheds is
an intergenerational responsibility that needs to be answered now.
[38]


Three short months before Proclamation No. 635 was passed to avert the garbage crisis, Congress had enacted the
National Water Crisis Act
[39]
to adopt urgent and effective measures to address the nationwide water crisis which adversely
affects the health and well-being of the population, food production, and industrialization process. One of the issues the law
sought to address was the protection and conservation of watersheds.
[40]


In other words, while respondents were blandly declaring that the reason for the creation of the Marikina Watershed
Reservation, i.e., to protect Marikina River as the source of water supply of the City of Manila, no longer exists, the rest of the
country was gripped by a shortage of potable water so serious, it necessitated its own legislation.

Respondents actions in the face of such grave environmental consequences defy all logic. The petitioners rightly noted
that instead of providing solutions, they have, with unmitigated callousness, worsened the problem. It is this readiness to wreak
irrevocable damage on our natural heritage in pursuit of what is expedient that has compelled us to rule at length on this
issue. We ignore the unrelenting depletion of our natural heritage at our peril.

I.

THE REORGANIZATION ACT OF THE DENR DEFINES AND
LIMITS ITS POWERS OVER THE COUNTRYS NATURAL RESOURCES



The respondents next point out that the Marikina Watershed Reservation, and thus the San Mateo Site, is located in the
public domain. They allege that as such, neither the Province of Rizal nor the municipality of San Mateo has the power to
control or regulate its use since properties of this nature belong to the national, and not to the local governments.

It is ironic that the respondents should pursue this line of reasoning.

In Cruz v. Secretary of Environment and Natural Resources,
[41]
we had occasion to observe that (o)ne of the fixed and
dominating objectives of the 1935 Constitutional Convention was the nationalization and conservation of the natural resources of
the country. There was an overwhelming sentiment in the convention in favor of the principle of state ownership of natural
resources and the adoption of the Regalian doctrine. State ownership of natural resources was seen as a necessary starting
point to secure recognition of the states power to control their disposition, exploitation, development, or utilization.
[42]


The Regalian doctrine was embodied in the 1935 Constitution, in Section 1 of Article XIII on Conservation and
Utilization of Natural Resources. This was reiterated in the 1973 Constitution under Article XIV on the National Economy and
the Patrimony of the Nation, and reaffirmed in the 1987 Constitution in Section 2 of Article XII on National Economy and
Patrimony, to wit:
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.
[43]




Clearly, the state is, and always has been, zealous in preserving as much of our natural and national heritage as it can,
enshrining as it did the obligation to preserve and protect the same within the text of our fundamental law.

It was with this objective in mind that the respondent DENR was mandated by then President Corazon C. Aquino, under
Section 4 of Executive Order No. 192,
[44]
otherwise known as The Reorganization Act of the Department of Environment and
Natural Resources, to be the primary government agency responsible for the conservation, management, development and
proper use of the countrys environment and natural resources, specifically forest and grazing lands, mineral
resources, including those in reservation and watershed areas, and lands of the public domain. It is also responsible for the
licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the
benefits derived therefrom for the welfare of the present and future generations of Filipinos.

We expounded on this matter in the landmark case of Oposa v. Factoran,
[45]
where we held that the right to a balanced
and healthful ecology is a fundamental legal right that carries with it the correlative duty to refrain from impairing the
environment. This right implies, among other things, the judicious management and conservation of the countrys resources,
which duty is reposed in the DENR under the aforequoted Section 4 of Executive Order No. 192. Moreover:
Section 3 (of E. O. No. 192) makes the following statement of policy:

SEC. 3. Declaration of Policy. - It is hereby declared the policy of the State to ensure
the sustainable use, development, management, renewal, and conservation of the
country's forest, mineral, land, off-shore areas and other natural resources, including the
protection and enhancement of the quality of the environment, and equitable access of the
different segments of the population to the development and use of the country's natural
resources, not only for the present generation but for future generations as well. It is also
the policy of the state to recognize and apply a true value system including social and
environmental cost implications relative to their utilization; development and conservation of our
natural resources. (Emphasis ours)

This policy declaration is substantially re-stated in Title XIV, Book IV of the Administrative Code of 1987,
specifically in Section 1 thereof which reads:

SEC. 1. Declaration of Policy. - (1) The State shall ensure, for the benefit of the Filipino
people, the full exploration and development as well as thejudicious disposition, utilization,
management, renewal and conservation of the country's forest, mineral, land, waters,
fisheries, wildlife, off-shore areas and other natural resources, consistent with the necessity
of maintaining a sound ecological balance and protecting and enhancing the quality of
the environment and the objective of making the exploration, development and utilization of
such natural resources equitably accessible to the different segments of the present as well as
future generations.

(2) The State shall likewise recognize and apply a true value system that takes into
account social and environmental cost implications relative to the utilization, development and
conservation of our natural resources.

The above provision stresses the necessity of maintaining a sound ecological balance and protecting
and enhancing the quality of the environment.
[46]
(Emphasis ours.)



In sum, the Administrative Code of 1987 and Executive Order No. 192 entrust the DENR with
the guardianship and safekeeping of the Marikina Watershed Reservation and our other natural treasures. However, although
the DENR, an agency of the government, owns the Marikina Reserve and has jurisdiction over the same, this power is not
absolute, but is defined by the declared policies of the state, and is subject to the law and higher authority. Section 2, Title XIV,
Book IV of the Administrative Code of 1987, while specifically referring to the mandate of the DENR, makes particular reference
to the agencys being subject to law and higher authority, thus:

SEC. 2. Mandate. - (1) The Department of Environment and Natural Resources shall be primarily
responsible for the implementation of the foregoing policy.

(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional
mandate to control and supervise the exploration, development, utilization, and conservation of the country's
natural resources.



With great power comes great responsibility. It is the height of irony that the public respondents have vigorously
arrogated to themselves the power to control the San Mateo site, but have deftly ignored their corresponding responsibility as
guardians and protectors of this tormented piece of land.


II.

THE LOCAL GOVERNMENT CODE GIVES TO LOCAL GOVERNMENT UNITS ALL THE NECESSARY POWERS TO
PROMOTE THE GENERAL WELFARE OF THEIR INHABITANTS


The circumstances under which Proclamation No. 635 was passed also violates Rep. Act No. 7160, or the Local
Government Code.

Contrary to the averment of the respondents, Proclamation No. 635, which was passed on 28 August 1995, is subject to
the provisions of the Local Government Code, which was approved four years earlier, on 10 October 1991.

Section 2(c) of the said law declares that it is the policy of the state to require all national agencies and offices to
conduct periodic consultations with appropriate local government units, non-governmental and people's organizations, and other
concerned sectors of the community before any project or program is implemented in their respective jurisdictions. Likewise,
Section 27 requires prior consultations before a program shall be implemented by government authorities and the prior approval
of the sanggunian is obtained.

During the oral arguments at the hearing for the temporary restraining order, Director Uranza of the MMDA Solid Waste
Management Task Force declared before the Court of Appeals that they had conducted the required consultations. However, he
added that (t)his is the problem, sir, the officials we may have been talking with at the time this was established may no l onger
be incumbent and this is our difficulty now. That is what we are trying to do now, a continuing dialogue.
[47]


The ambivalent reply of Director Uranza was brought to the fore when, at the height of the protest rally and barricade
along Marcos Highway to stop dump trucks from reaching the site, all the municipal mayors of the province of Rizal openly
declared their full support for the rally and notified the MMDA that they would oppose any further attempt to dump garbage in
their province.
[48]


The municipal mayors acted within the scope of their powers, and were in fact fulfilling their mandate, when they did
this. Section 16 allows every local government unit to exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are
essential to the promotion of the general welfare, which involve, among other things, promot(ing) health and safety,
enhance(ing) the right of the people to a balanced ecology, and preserv(ing) the comfort and convenience of their
inhabitants.

In Lina , J r. v. Pao,
[49]
we held that Section 2 (c), requiring consultations with the appropriate local government units,
should apply to national government projects affecting the environmental or ecological balance of the particular community
implementing the project. Rejecting the petitioners contention that Sections 2(c) and 27 of the Local Government Code applied
mandatorily in the setting up of lotto outlets around the country, we held that:
From a careful reading of said provisions, we find that these apply only to national programs and/or
projects which are to be implemented in a particular local community. Lotto is neither a program nor a project of
the national government, but of a charitable institution, the PCSO. Though sanctioned by the national
government, it is far fetched to say that lotto falls within the contemplation of Sections 2 (c) and 27 of the Local
Government Code.

Section 27 of the Code should be read in conjunction with Section 26 thereof. Section 26 reads:

SECTION 26. Duty of National Government Agencies in the Maintenance of Ecological Balance. It
shall be the duty of every national agency or government-owned or controlled corporation authorizing or
involved in the planning and implementation of any project or program that may cause pollution, climatic
change, depletion of non-renewable resources, loss of crop land, range-land, or forest cover, and
extinction of animal or plant species, to consult with the local government units, nongovernmental
organizations, and other sectors concerned and explain the goals and objectives of the project or
program, its impact upon the people and the community in terms of environmental or ecological
balance, and the measures that will be undertaken to prevent or minimize the adverse effects thereof.

Thus, the projects and programs mentioned in Section 27 should be interpreted to mean projects
and programs whose effects are among those enumerated in Section 26 and 27, to wit, those that: (1)
may cause pollution; (2) may bring about climatic change; (3) may cause the depletion of non-renewable
resources; (4) may result in loss of crop land, range-land, or forest cover; (5) may eradicate certain
animal or plant species from the face of the planet; and (6) other projects or programs that may call for
the eviction of a particular group of people residing in the locality where these will be implemented.
Obviously, none of these effects will be produced by the introduction of lotto in the province of
Laguna. (emphasis supplied)

We reiterated this doctrine in the recent case of Bangus Fry Fisherfolk v. Lanzanas,
[50]
where we held that there was no
statutory requirement for the sangguniang bayanof Puerto Galera to approve the construction of a mooring facility, as Sections
26 and 27 are inapplicable to projects which are not environmentally critical.

Moreover, Section 447, which enumerates the powers, duties and functions of the municipality, grants the sangguniang
bayan the power to, among other things, enact ordinances, approve resolutions and appropriate funds for the general welfare of
the municipality and its inhabitants pursuant to Section 16 of th(e) Code. These include:
(1) Approving ordinances and passing resolutions to protect the environment and impose appropriate
penalties for acts which endanger the environment, such as dynamite fishing and other forms of
destructive fishing, illegal logging and smuggling of logs, smuggling of natural resources products and of
endangered species of flora and fauna, slash and burn farming, and such other activities which
result in pollution, acceleration of eutrophication of rivers and lakes, or of ecological imbalance;
[Section 447 (1)(vi)]
(2) Prescribing reasonable limits and restraints on the use of property within the jurisdiction of the
municipality, adopting a comprehensive land use plan for the municipality, reclassifying land within the
jurisdiction of the city, subject to the pertinent provisions of this Code, enacting integrated zoning
ordinances in consonance with the approved comprehensive land use plan, subject to existing laws,
rules and regulations; establishing fire limits or zones, particularly in populous centers; and regulating
the construction, repair or modification of buildings within said fire limits or zones in accordance with the
provisions of this Code; [Section 447 (2)(vi-ix)]

(3) Approving ordinances which shall ensure the efficient and effective delivery of the basic services and
facilities as provided for under Section 17 of this Code, and in addition to said services and facilities,
providing for the establishment, maintenance, protection, and conservation of communal
forests and watersheds, tree parks, greenbelts, mangroves, and other similar forest
development projects .and, subject to existing laws, establishing and providing for the maintenance,
repair and operation of an efficient waterworks system to supply water for the inhabitants and purifying
the source of the water supply; regulating the construction, maintenance, repair and use of hydrants,
pumps, cisterns and reservoirs; protecting the purity and quantity of the water supply of the
municipality and, for this purpose, extending the coverage of appropriate ordinances over all
territory within the drainage area of said water supply and within one hundred (100) meters of
the reservoir, conduit, canal, aqueduct, pumping station, or watershed used in connection with
the water service; and regulating the consumption, use or wastage of water. [Section 447 (5)(i) & (vii)]



Under the Local Government Code, therefore, two requisites must be met before a national project that affects the
environmental and ecological balance of local communities can be implemented: prior consultation with the affected local
communities, and prior approval of the project by the appropriate sanggunian. Absent either of these mandatory requirements,
the projects implementation is illegal.

III.

WASTE DISPOSAL IS REGULATED BY THE ECOLOGICAL
SOLID WASTE MANAGEMENT ACT OF 2000



The respondents would have us overlook all the abovecited laws because the San Mateo site is a very expensive - and
necessary - fait accompli. The respondents cite the millions of pesos and hundreds of thousands of dollars the government has
already expended in its development and construction, and the lack of any viable alternative sites.

The Court of Appeals agreed, thus:
During the hearing on the injunction, questions were also asked. What will happen if the San Mateo
Sanitary Landfill is closed? Where will the daily collections of garbage be disposed of and dumped? Atty.
Mendoza, one of the lawyers of the petitioners, answered that each city/municipality must take care of its
own. Reflecting on that answer, we are troubled: will not the proliferation of separate open dumpsites be a
more serious health hazard (which ha(s) to be addressed) to the residents of the community? What with the
galloping population growth and the constricting available land area in Metro Manila? There could be a mini-
Smokey Mountain in each of the ten citiescomprising Metro Manila, placing in danger the health and safety of
more people. Damage to the environment could be aggravated by the increase in number of open
dumpsites. An integrated system of solid waste management, like the San Mateo Sanitary Landfill, appears
advisable to a populous metropolis like the Greater Metro Manila Area absent access to better technology.
[51]



We acknowledge that these are valid concerns. Nevertheless, the lower court should have been mindful of the legal
truism that it is the legislature, by its very nature, which is the primary judge of the necessity, adequacy, wisdom,
reasonableness and expediency of any law.
[52]


Moreover, these concerns are addressed by Rep. Act No. 9003. Approved on 26 January 2001, The Ecological Solid
Waste Management Act of 2000 was enacted pursuant to the declared policy of the state to adopt a systematic,
comprehensive and ecological solid waste management system which shall ensure the protection of public health and
environment, and utilize environmentally sound methods that maximize the utilization of valuable resources and encourage
resource conservation and recovery.
[53]
It requires the adherence to a Local Government Solid Waste Management Plan with
regard to the collection and transfer, processing, source reduction, recycling, composting and final disposal of solid wastes, the
handling and disposal of special wastes, education and public information, and the funding of solid waste management projects.

The said law mandates the formulation of a National Solid Waste Management Framework, which should include,
among other things, the method and procedure for the phaseout and the eventual closure within eighteen months from effectivit y
of the Act in case of existing open dumps and/or sanitary landfills located within an aquifer, groundwater reservoir or
watershed area.
[54]
Any landfills subsequently developed must comply with the minimum requirements laid down in Section 40,
specifically that the site selected must be consistent with the overall land use plan of the local government unit, and
that the site must be located in an area where the landfills operation will not detrimentally affect environmentally
sensitive resources such as aquifers, groundwater reservoirs or watershed areas.
[55]


This writes finis to any remaining aspirations respondents may have of reopening the San Mateo Site. Having declared
Proclamation No. 635 illegal, we see no compelling need to tackle the remaining issues raised in the petition and the parties
respective memoranda.

A final word. Laws pertaining to the protection of the environment were not drafted in a vacuum. Congress passed these
laws fully aware of the perilous state of both our economic and natural wealth. It was precisely to minimize the adverse impact
humanitys actions on all aspects of the natural world, at the same time maintaining and ensuring an environment under which
man and nature can thrive in productive and enjoyable harmony with each other, that these legal safeguards were put in
place. They should thus not be so lightly cast aside in the face of what is easy and expedient.


WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 41330, dated 13
June 1997, is REVERSED and SET ASIDE. The temporary restraining order issued by the Court on 24 January 2001 is
hereby made permanent.

SO ORDERED.


A.M. No. RTJ-06-2017 June 19, 2008
LT. GEN. ALFONSO P. DAGUDAG (Ret.), complainant,
vs.
JUDGE MAXIMO G.W. PADERANGA, Regional Trial Court, Branch 38, Cagayan de Oro City, respondent.
D E C I S I O N
PER CURIAM, J .:
This is a complaint for gross ignorance of the law and conduct unbecoming a judge filed by retired Lt. Gen. Alfonso P. Dagudag
(Gen. Dagudag), Head of Task Force Sagip Kalikasan, against Judge Maximo G. W. Paderanga (Judge Paderanga), Presiding
Judge of the Regional Trial Court, Branch 38, Cagayan de Oro City.
On or about 30 January 2005, the Region VII Philippine
National
Police Regional Maritime Group (PNPRMG) received information that MV General Ricarte of NMC Container Lines, Inc. was
shipping container vans containing illegal forest products from Cagayan de Oro to Cebu. The shipments were falsely declared as
cassava meal and corn grains to avoid inspection by the Department of Environment and Natural Resources (DENR).
1

On 30 and 31 January 2005, a team composed of representatives from the PNPRMG, DENR, and the Philippine Coast Guard
inspected the container vans at a port in Mandaue City, Cebu. The team discovered the undocumented forest products and the
names of the shippers and consignees:
Container Van No. Shipper Consignee
NCLU 2000492-22GI Polaris Chua Polaris Chua
IEAU 2521845-2210 Polaris Chua Polaris Chua
NOLU 2000682-22GI Rowena Balangot Rowena Balangot
INBU 3125757-BB2210 Rowena Balangot Rowena Balangot
NCLU 20001591-22GI Jovan Gomez Jovan Gomez
GSTU 339074-US2210 Jovan Gomez Jovan Gomez
CRXU 2167567 Raffy Enriquez Raffy Enriquez
NCLU 2001570-22GI Raffy Enriquez Raffy Enriquez
The crew of MV General Ricarte failed to produce the certificate of origin forms and other pertinent transport documents
covering the forest products, as required by DENR Administrative Order No. 07-94. Gen. Dagudag alleged that, since nobody
claimed the forest products within a reasonable period of time, the DENR considered them as abandoned and, on 31 January
2005, the Provincial Environment and Natural Resources Office (PENRO) Officer-in-Charge (OIC), Richard N. Abella, issued a
seizure receipt to NMC Container Lines, Inc.
2

On 1 February 2005, Community Environment and Natural Resources Office (CENRO) OIC Loreto A. Rivac (Rivac) sent a
notice to NMC Container Lines, Inc. asking for explanation why the government should not confiscate the forest products.
3
In an
affidavit
4
dated 9 February 2005, NMC Container Lines, Inc.s Branch Manager Alex Conrad M. Seno stated that he did not see
any reason why the government should not confiscate the forest products and that NMC Container Lines, Inc. had no knowledge
of the actual content of the container vans.
On 2, 9, and 15 February 2005, DENR Forest Protection Officer Lucio S. Canete, Jr. posted notices on the CENRO and PENRO
bulletin boards and at the NMC Container Lines, Inc. building informing the unknown owner about the administrative adjudication
scheduled on 18 February 2005 at the Cebu City CENRO. Nobody appeared during the adjudication.
5
In a resolution
6
dated 10
March 2005, Rivac, acting as adjudication officer, recommended to DENR Regional Executive Director Clarence L. Baguilat that
the forest products be confiscated in favor of the government.
In a complaint
7
dated 16 March 2005 and filed before Judge Paderanga, a certain Roger C. Edma (Edma) prayed that a writ of
replevin be issued ordering the defendants DENR, CENRO, Gen. Dagudag, and others to deliver the forest products to him and
that judgment be rendered ordering the defendants to pay him moral damages, attorneys fees, and litigation expenses. On 29
March 2005, Judge Paderanga issued a writ of replevin
8
ordering Sheriff Reynaldo L. Salceda to take possession of the forest
products.
In a motion to quash the writ of replevin,
9
the defendants DENR, CENRO, and Gen. Dagudag prayed that the writ of replevin be
set aside: (1) Edmas bond was insufficient; (2) the forest products were falsely declared as cassava meal and corn grains; (3)
Edma was not a party-in-interest; (4) the forest products were not covered by any legal document; (5) nobody claimed the forest
products within a reasonable period of time; (6) the forest products were already considered abandoned; (7) the forest products
were lawfully seized under the Revised Forestry Code of the Philippines; (8) replevin was not proper; (9) courts could not take
cognizance of cases pending before the DENR; (10) Edma failed to exhaust administrative remedies; and (11) the DENR was
the agency responsible for the enforcement of forestry laws. In a motion to dismiss ad cautelam
10
dated 12 April 2005, the
defendants prayed that the complaint for replevin and damages be dismissed: (1) the real defendant is the Republic of the
Philippines; (2) Edma failed to exhaust administrative remedies; (3) the State cannot be sued without its consent; and (4) Edma
failed to allege that he is the owner or is entitled to the possession of the forest products.
In an order
11
dated 14 April 2005, Judge Paderanga denied the motion to quash the writ of replevin for lack of merit.
Gen. Dagudag filed with the Office of the Court Administrator (OCA) an affidavit-complaint
12
dated 8 July 2005 charging Judge
Paderanga with gross ignorance of the law and conduct unbecoming a judge. Gen. Dagudag stated that:
During the x x x hearing, [Judge Paderanga] showed manifest partiality in favor of x x x Edma. DENRs counsel was
lambasted, cajoled and intimidated by [Judge Paderanga] using words such as "SHUT UP" and "THATS BALONEY."
x x x x
Edma in the replevin case cannot seek to recover the wood shipment from the DENR since he had not sought
administrative remedies available to him. The prudent thing for [Judge Paderanga] to have done was to dismiss the
replevin suit outright.
x x x x
[Judge Paderangas] act[s] of taking cognizance of the x x x replevin suit, issuing the writ of replevin and the subsequent
denial of the motion to quash clearly demonstrates [sic] ignorance of the law.
In its 1
st
Indorsement
13
dated 1 August 2005, the OCA directed Judge Paderanga to comment on the affidavit-complaint. In his
comment
14
dated 6 September 2005, Judge Paderanga stated that he exercised judicial discretion in issuing the writ of replevin
and that he could not delve into the issues raised by Gen. Dagudag because they were related to a case pending before him.
In its Report
15
dated 10 July 2006, the OCA found that Judge Paderanga (1) violated the doctrine of exhaustion of administrative
remedies; (2) violated the doctrine of primary jurisdiction; and (3) used inappropriate language in court. The OCA recommended
that the case be re-docketed as a regular administrative matter; that Judge Paderanga be held liable for gross ignorance of the
law and for violation of Section 6,
Canon
6 of the New Code of Judicial Conduct for the Philippine Judiciary;
16
and that he be fined P30,000.
In its Resolution
17
dated 16 August 2006, the Court re-docketed the case as a regular administrative matter and required the
parties to manifest whether they were willing to submit the case for decision based on the pleadings already filed. Judge
Paderanga manifested his willingness to submit the case for decision based on the pleadings already filed.
18
Since Gen.
Dagudag did not file any manifestation, the Court considered him to have waived his compliance with the 16 August 2006
Resolution.
19

The Court finds Judge Paderanga liable for gross ignorance of the law and for conduct unbecoming a judge.
The DENR is the agency responsible for the enforcement of forestry laws. Section 4 of Executive Order No. 192 states that the
DENR shall be the primary agency responsible for the conservation, management, development, and proper use of the countrys
natural resources.
Section 68 of Presidential Decree No. 705, as amended by Executive Order No. 277, states that possessing forest products
without the required legal documents is punishable. Section 68-A states that the DENR Secretary or his duly authorized
representatives may order the confiscation of any forest product illegally cut, gathered, removed, possessed, or abandoned.
In the instant case, the forest products were possessed by NMC Container Lines, Inc. without the required legal documents and
were abandoned by the unknown owner. Consequently, the DENR seized the forest products.
Judge Paderanga should have dismissed the replevin suit outright for three reasons. First, under the doctrine of exhaustion of
administrative remedies, courts cannot take cognizance of cases pending before administrative agencies. In Factoran, Jr. v.
Court of Appeals,
20
the Court held that:
The doctrine of exhaustion of administrative remedies is basic. Courts, for reasons of law, comity and
convenience, should not entertain suits unless the available administrative remedies have first been resorted to
and the proper authorities have been given an appropriate opportunity to act and correct their alleged errors, if
any, committed in the administrative forum. (Emphasis ours)
In Dy v. Court of Appeals,
21
the Court held that a party must exhaust all administrative remedies before he can resort to the
courts. In Paat v. Court of Appeals,
22
the Court held that:
This Court in a long line of cases has consistently held that before a party is allowed to seek the intervention of the
court, it is a pre-condition that he should have availed of all the means of administrative processes afforded
him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative
officer concerned every opportunity to decide on a matter that comes within his jurisdiction then such remedy should
be exhausted first before courts judicial power can be sought. The premature invocation of courts intervention
is fatal to ones cause of action. Accordingly, absent any finding of waiver or estoppel the case is susceptible of
dismissal for lack of cause of action. (Emphasis ours)
In the instant case, Edma did not resort to, or avail of, any administrative remedy. He went straight to court and filed a complaint
for replevin and damages. Section 8 of Presidential Decree No. 705, as amended, states that (1) all actions and decisions of the
Bureau of Forest Development Director are subject to review by the DENR Secretary; (2) the decisions of the DENR Secretary
are appealable to the President; and (3) courts cannot review the decisions of the DENR Secretary except through a special civil
action for certiorari or prohibition. In Dy,
23
the Court held that all actions seeking to recover forest products in the custody of the
DENR shall be directed to that agency not the courts. In Paat,
24
the Court held that:
Dismissal of the replevin suit for lack of cause of action in view of the private respondents failure to exhaust
administrative remedies should have been the proper course of action by the lower court instead of assuming
jurisdiction over the case and consequently issuing the writ [of replevin].Exhaustion of the remedies in the
administrative forum, being a condition precedent prior to ones recourse to the courts and more importantly, being an
element of private respondents right of action, is too significant to be waylaid by the lower court.
x x x x
Moreover, the suit for replevin is never intended as a procedural tool to question the orders of confiscation and
forfeiture issued by the DENR in pursuance to the authority given under P.D. 705, as amended. Section 8 of the said
law is explicit that actions taken by the
Director of the Bureau of Forest Development concerning the enforcement of the provisions of the said law are
subject to review by the Secretary of DENR and that courts may not review the decisions of the Secretary
except through a special civil action for certiorari or prohibition. (Emphasis ours)
Second, under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative
agencies of special competence. The DENR is the agency responsible for the enforcement of forestry laws. The complaint for
replevin itself stated that members of DENRs Task Force Sagip Kalikasan took over the forest products and brought them to
the DENR Community Environment and Natural Resources Office. This should have alerted Judge Paderanga that the DENR
had custody of the forest products, that administrative proceedings may have been commenced, and that the replevin suit had to
be dismissed outright. In Tabao v. Judge Lilagan
25
a case with a similar set of facts as the instant case the Court held that:
The complaint for replevin itself states that the shipment x x x [was] seized by the NBI for verification of supporting
documents. It also states that the NBI turned over the seized items to the DENR "for official disposition and appropriate
action." x x x To our mind, these allegations [should] have been sufficient to alert respondent judge that the DENR
has custody of the seized items and that administrative proceedings may have already been commenced
concerning the shipment. Under the doctrine of primary jurisdiction, courts cannot take cognizance of cases
pending before administrative agencies of special competence. x x x The prudent thing for respondent judge to
have done was to dismiss the replevin suit outright. (Emphasis ours)
In Paat,
26
the Court held that:
[T]he enforcement of forestry laws, rules and regulations and the protection, development and management of forest
lands fall within the primary and special responsibilities of the Department of Environment and
Natural Resources. By the very nature of its function, the DENR should be given a free hand unperturbed by judicial
intrusion to determine a controversy which is well within its jurisdiction. The assumption by the trial court,
therefore, of the replevin suit filed by private respondents constitutes an unjustified encroachment into the
domain of the administrative agencys prerogative. The doctrine of primary jurisdiction does not warrant a court
to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially lodged with
an administrative body of special competence. (Emphasis ours)
Third, the forest products are already in custodia legis and thus cannot be the subject of replevin. There was a violation of the
Revised Forestry Code and the DENR seized the forest products in accordance with law. In Calub v. Court of Appeals,
27
the
Court held that properties lawfully seized by the DENR cannot be the subject of replevin:
Since there was a violation of the Revised Forestry Code and the seizure was in accordance with law, in our
view the [properties seized] were validly deemed in custodia legis. [They] could not be subject to an action for
replevin. For it is property lawfully taken by virtue of legal process and considered in the custody of the law, and not
otherwise. (Emphasis ours)
Judge Paderangas acts of taking cognizance of the replevin suit and of issuing the writ of replevin constitute gross ignorance of
the law. In Tabao,
28
the Court held that:
Under the doctrine of primary jurisdiction, courts cannot take cognizance of cases pending before administrative of
special competence. x x x [T]he plaintiff in the replevin suit who [sought] to recover the shipment from the DENR
had not exhausted the administrative remedies available to him. The prudent thing for respondent judge to have
done was to dismiss the replevin suit outright.
Under Section 78-A of the Revised Forestry Code, the DENR secretary or his authorized representatives may order the
confiscation of forest products illegally cut, gathered, removed, or possessed or abandoned.
x x x x
Respondent judges act of taking cognizance of the x x x replevin suit clearly demonstrates ignorance of the
law. x x x [J]udges are expected to keep abreast of all laws and prevailing jurisprudence. Judges are duty bound to have
more than just a cursory acquaintance with laws and jurisprudence. Failure to follow basic legal commands
constitutes gross ignorance of the law from which no one may be excused, not even a judge. (Emphasis ours)
Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary states that competence is a prerequisite to the due
performance of judicial office. Section 3 of Canon 6 states that judges shall take reasonable steps to maintain and enhance their
knowledge necessary for the proper performance of judicial duties. Judges should keep themselves abreast with legal
developments and show acquaintance with laws.
29

The rule that courts cannot prematurely take cognizance of cases pending before administrative agencies is basic. There was no
reason for Judge Paderanga to make an exception to this rule. The forest products were in the custody of the DENR and Edma
had not availed of any administrative remedy. Judge Paderanga should have dismissed the replevin suit outright. In Espaol v.
Toledo-Mupas,
30
the Court held that:
Being among the judicial front-liners who have direct contact with the litigants, a wanton display of utter lack of familiarity
with the rules by the judge inevitably erodes the confidence of the public in the competence of our courts to render
justice. It subjects the judiciary to embarrassment. Worse, it could raise the specter of corruption.
When the gross inefficiency springs from a failure to consider so basic and elemental a rule, a law, or a principle in the
discharge of his or her duties, a judge is either too incompetent and undeserving of the exalted position and title he or
she holds, or the oversight or omission was deliberately done in bad faith and in grave abuse of judicial authority.
The OCA found Judge Paderanga liable for using inappropriate language in court: "We x x x find respondents intemperate use
of "Shut up!" and "Baloney!" well nigh inappropriate in court proceedings. The utterances are uncalled for."
31

Indeed, the 14 and 22 April 2005 transcripts of stenographic notes show that Judge Paderanga was impatient, discourteous, and
undignified in court:
Atty. Luego: Your Honor, we want to have this motion because that is...
Judge Paderanga: I am asking you why did you not make any rejoinder[?]
x x x x
Atty. Luego: I apologize, Your Honor. We are ready to...
Judge Paderanga: Ready to what? Proceed.
Atty. Luego: Yes, Your Honor. We filed this motion to quash replevin, Your Honor, on the grounds, first and foremost, it
is our contention, Your Honor, with all due respect of [sic] this Honorable Court, that the writ of replevin dated March 29,
2005 was improper, Your Honor, for the reasons that the lumber, subject matter of this case, were apprehended in
accordance with...
Judge Paderanga: Where is your proof that it was apprehended? Where is your proof? Is that apprehension proven by a
seizure receipt? Where is your seizure receipt?
Atty. Luego: Under the rules...
Judge Paderanga: Where is your seizure receipt? You read your rules. What does [sic] the rules say? Where in your
rules does it say that it does not need any seizure receipt? You look at your rules. You point out the rules. You take out
your rules and then you point out. Do you have the rules?
x x x x
Atty. Luego: Your Honor, there was no seizure receipt, but during the apprehension, Your Honor, there was no claimant.
Judge Paderanga: Answer me. Is there a seizure receipt?
Atty. Luego: But during the apprehension, Your Honor, no owner has [sic] appeared.
x x x x
Atty. Luego: According to [the] rules, Your Honor, if there is no...
Judge Paderanga: Whom are you seizing it from? To [sic] whom are you taking it from?
Atty. Luego: From the shipping company, Your Honor.
x x x x
Atty. Luego: Your Honor please, the shipping company denied the ownership of that lumber.
x x x x
Atty. Luego: But the shipping company, Your Honor,...
Judge Paderanga: Shut up. Thats baloney. You are seizing it from nobody. Then how can you seize it from the
shipping company. Are you not? You are a lawyer. Who is in possession of the property? The shipping company. Why
did you not issue [a] seizure receipt to the shipping company?
Atty. Luego: But the... May I continue, Your Honor?
x x x x
Judge Paderanga: Stop talking about the shipping company. Still you did not issue a seizure receipt here. Well, Im
telling you you should have issued [a] seizure receipt to the shipping company.
x x x x
Judge Paderanga: You are a lawyer. You should know how to write pleadings. You write the pleadings the way it
should be, not the way you think it should be.
Atty. Luego: Im sorry, Your Honor.
Judge Paderanga: You are an officer of the court. You should be careful with your language. You say that I am
wrong. Its you who are [sic] wrong because you do not read the law.
x x x x
Judge Paderanga: Then you read the law. How dare you say that the Court is wrong.
x x x x
Judge Paderanga: Are you not representing [the DENR]?
Atty. Luego: Yes, in this case, Your Honor.
Judge Paderanga: Then you are representing them. They are your clients. What kind of a lawyer are you?
32

x x x x
Atty. Tiamson: Specifically it was stated in the [Factoran] versus Court of Appeals [case] that the Court should not
interfere, Your Honor.
Judge Paderanga: No.
x x x x
Judge Paderanga: The problem with you people is you do not use your heads.
Atty. Tiamson: We use our heads, your Honor.
x x x x
Atty. Tiamson: Your Honor, we would like to put on record that we use our heads, your Honor.
33
(Emphasis ours)
Section 6, Canon 6 of the New Code of Judicial Conduct for the Philippine Judiciary states that judges shall be patient, dignified,
and courteous in relation to lawyers. Rule 3.04, Canon 3 of the Code of Judicial Conduct states that judges should be patient
and courteous to lawyers, especially the inexperienced. They should avoid the attitude that the litigants are made for the courts,
instead of the courts for the litigants.
Judicial decorum requires judges to be temperate in their language at all times. They must refrain from inflammatory,
excessively rhetoric, or vile language.
34
They should (1) be dignified in demeanor and refined in speech; (2) exhibit that
temperament of utmost sobriety and self-restraint; and (3) be considerate, courteous, and civil to all persons who come to their
court.
35
In Juan de la Cruz v. Carretas,
36
the Court held that:
A judge who is inconsiderate, discourteous or uncivil to lawyers x x x who appear in his sala commits an impropriety and
fails in his duty to reaffirm the peoples faith in the judiciary. He also violates Section 6, Canon 6 of the New Code of
Judicial Conduct for the Philippine Judiciary.
x x x x
It is reprehensible for a judge to humiliate a lawyer x x x. The act betrays lack of patience, prudence and restraint. Thus,
a judge must at all times be temperate in his language. He must choose his words x x x with utmost care and sufficient
control. The wise and just man is esteemed for his discernment. Pleasing speech increases his persuasiveness.
Equanimity and judiciousness should be the constant marks of a dispenser of justice. A judge should always keep his
passion guarded. He can never allow it to run loose and overcome his reason. He descends to the level of a sharp-
tongued, ill-mannered petty tyrant when he utters harsh words x x x. As a result, he degrades the judicial office and
erodes public confidence in the judiciary.
Judge Paderangas refusal to consider the motion to quash the writ of replevin, repeated interruption of the lawyers, and
utterance of "shut up," "thats baloney," "how dare you say that the court is wrong," "what kind of a lawyer are you?," and "the
problem with you people is you do not use your heads" are undignified and very unbecoming a judge. In Office of the Court
Administrator v. Paderanga,
37
the Court already reprimanded Judge Paderanga for repeatedly saying "shut up," being arrogant,
and declaring that he had "absolute power" in court. He has not changed.
Section 8, Rule 140 of the Rules of Court classifies gross ignorance of the law as a serious offense. It is punishable by (1)
dismissal from the service, forfeiture of benefits, and disqualification from reinstatement to any public office; (2) suspension from
office without salary and other benefits for more than three months but not exceeding six months; or (3) a fine of more
than P20,000 but not exceeding P40,000.
38
Section 10 of Rule 140 classifies conduct unbecoming a judge as a light offense. It is
punishable by (1) a fine of not less than P1,000 but not exceedingP10,000; (2) censure; (3) reprimand; or (4) admonition with
warning.
39

The Court notes that this is Judge Paderangas third offense. In Office of the Court Administrator v. Paderanga,
40
the Court held
him liable for grave abuse of authority and simple misconduct for unceremoniously citing a lawyer in contempt while declaring
himself as having "absolute power" and for repeatedly telling a lawyer to "shut up." InBeltran, Jr. v. Paderanga,
41
the Court held
him liable for undue delay in rendering an order for the delay of nine months in resolving an amended formal offer of exhibits. In
both cases, the Court sternly warned Judge Paderanga that the commission of another offense shall be dealt with more
severely. The instant case and the two cases decided against him demonstrate Judge Paderangas arrogance, incorrigibility,
and unfitness to become a judge.
Judge Paderanga has two other administrative cases pending against him one
42
for gross ignorance of the law, knowingly
rendering an unjust judgment, and grave abuse of authority, and the other
43
for gross misconduct, grave abuse of authority, and
gross ignorance of the law.
The Court will not hesitate to impose the ultimate penalty on those who have fallen short of their accountabilities. It will not
tolerate any conduct that violates the norms of public accountability and diminishes the faith of the people in the judicial
system.
44

WHEREFORE, the Court finds Judge Maximo G.W. Paderanga, Regional Trial Court, Branch 38, Cagayan de Oro
City, GUILTY of GROSS IGNORANCE OF THE LAW and UNBECOMING CONDUCT. Accordingly, the CourtDISMISSES him
from the service, with forfeiture of all retirement benefits, except accrued leave credits, and with prejudice to reinstatement or
appointment to any public office, including government-owned or controlled corporations.
SO ORDERED.

G.R. No. 158182 June 12, 2008
SESINANDO MERIDA, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
D E C I S I O N
CARPIO, J .:
The Case
This is a petition for review
1
of the Decision
2
dated 28 June 2002 and the Resolution dated 14 May 2003 of the Court of Appeals.
The 28 June 2002 Decision affirmed the conviction of petitioner Sesinando Merida (petitioner) for violation of Section
68,
3
Presidential Decree No. 705 (PD 705),
4
as amended by Executive Order No. 277. The Resolution dated 14 May 2003
denied admission of petitioner's motion for reconsideration.
5

The Facts
Petitioner was charged in the Regional Trial Court of Romblon, Romblon, Branch 81 (trial court) with violation of Section 68 of
PD 705, as amended, for "cut[ting], gather[ing], collect[ing] and remov[ing]" a lone narra tree inside a private land in Mayod, Ipil,
Magdiwang, Romblon (Mayod Property) over which private complainant Oscar M. Tansiongco (Tansiongco) claims ownership.
6

The prosecution evidence showed that on 23 December 1998, Tansiongco learned that petitioner cut a narra tree in the Mayod
Property. Tansiongco reported the matter to Florencio Royo (Royo), the punong barangay of Ipil. On 24 December 1998,
7
Royo
summoned petitioner to a meeting with Tansiongco. When confronted during the meeting about the felled narra tree, petitioner
admitted cutting the tree but claimed that he did so with the permission of one Vicar Calix (Calix) who, according to petitioner,
bought the Mayod Property from Tansiongco in October 1987 under a pacto de retro sale. Petitioner showed to Royo Calix's
written authorization signed by Calix's wife.
8

On 11 January 1999, Tansiongco reported the tree-cutting to the Department of Environment and Natural Resources (DENR)
forester Thelmo S. Hernandez (Hernandez) in Sibuyan, Romblon. When Hernandez confronted petitioner about the felled tree,
petitioner reiterated his earlier claim to Royo that he cut the tree with Calix's permission. Hernandez ordered petitioner not to
convert the felled tree trunk into lumber.
On 26 January 1999, Tansiongco informed Hernandez that petitioner had converted the narra trunk into lumber. Hernandez, with
other DENR employees and enforcement officers, went to the Mayod Property and saw that the narra tree had been cut into six
smaller pieces of lumber. Hernandez took custody of the lumber,
9
deposited them for safekeeping with Royo, and issued an
apprehension receipt to petitioner. A larger portion of the felled tree remained at the Mayod Property. The DENR subsequently
conducted an investigation on the matter.
10

Tansiongco filed a complaint with the Office of the Provincial Prosecutor of Romblon (Provincial Prosecutor) charging petitioner
with violation of Section 68 of PD 705, as amended. During the preliminary investigation, petitioner submitted a counter-affidavit
reiterating his claim that he cut the narra tree with Calix's permission. The Provincial Prosecutor
11
found probable cause to indict
petitioner and filed the Information with the trial court (docketed as Criminal Case No. 2207).
During the trial, the prosecution presented six witnesses including Tansiongco, Royo, and Hernandez who testified on the events
leading to the discovery of and investigation on the tree-cutting. Petitioner testified as the lone defense witness and claimed, for
the first time, that he had no part in the tree-cutting.
The Ruling of the Trial Court
In its Decision dated 24 November 2000, the trial court found petitioner guilty as charged, sentenced him to fourteen (14) years,
eight (8) months and one (1) day to twenty (20) years of reclusion temporal and ordered the seizedlumber forfeited in
Tansiongco's favor.
12
The trial court dismissed petitioner's defense of denial in view of his repeated extrajudicial admissions that
he cut the narra tree in the Mayod Property with Calix's permission. With this finding and petitioner's lack of DENR permit to cut
the tree, the trial court held petitioner liable for violation of Section 68 of PD 705, as amended.
Petitioner appealed to the Court of Appeals reiterating his defense of denial. Petitioner also contended that (1) the trial court did
not acquire jurisdiction over the case because it was based on a complaint filed by Tansiongco and not by a forest officer as
provided under Section 80 of PD 705 and (2) the penalty imposed by the trial court is excessive.
The Ruling of the Court of Appeals
In its Decision dated 28 June 2002, the Court of Appeals affirmed the trial court's ruling but ordered the seized lumber
confiscated in the government's favor.
13
The Court of Appeals sustained the trial court's finding that petitioner is bound by his
extrajudicial admissions of cutting the narra tree in the Mayod Property without any DENR permit. The Court of Appeals also
found nothing irregular in the filing of the complaint by Tansiongco instead of a DENR forest officer considering that the case
underwent preliminary investigation by the proper officer who filed the Information with the trial court.
On the imposable penalty, the Court of Appeals, in the dispositive portion of its ruling, sentenced petitioner to 14 years, 8 months
and 1 day to 17 years of reclusion temporal. However, in the body of its ruling, the Court of Appeals held that "the penalty to be
imposed on [petitioner] should be (14) years, eight (8) months and one (1) day to twenty (20) years of reclusion temporal,"
14
the
same penalty the trial court imposed.
Petitioner sought reconsideration but the Court of Appeals, in its Resolution dated 14 May 2003, did not admit his motion for
having been filed late.
15

Hence, this petition. Petitioner raises the following issues:
I. WHETHER x x x SECTION 68 OF P.D. 705 AS AMENDED PROHIBITING THE CUTTING, GATHERING,
COLLECTING AND REMOVING TIMBER OR OTHER FOREST PRODUCTS FROM ANY FOREST LAND APPLIES
TO PETITIONER.
II. WHETHER x x x POSSESSION OF THE NARRA TREE CUT IN PRIVATE LAND CONTESTED BY VICAR CALIX
AND PRIVATE-COMPLAINANT OSCAR TANSIONGCO IS COVERED BY SECTION 80 OF P.D. 705 AS AMENDED.
III. WHETHER PRIVATE-COMPLAINANT CAN INITIATE THE CHARGE EVEN WITHOUT THE STANDING
AUTHORITY COMING FROM THE INVESTIGATING FOREST OFFICER OF THE DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES AS MANDATED BY SECTION 80 OF P.D. 705 AS AMENDED.
[IV.] WHETHER x x x THE TRIAL COURT ERRED IN TAKING COGNIZANCE OF THE CASE FILED BY PRIVATE-
COMPLAINANT BECAUSE IT WAS NOT THE INVESTIGATING OFFICER AS REQUIRED BY SECTION 80 OF P.D.
705 AS AMENDED WHO MUST BE THE ONE TO INSTITUTE THE FILING OF THE SAME.
16

In its Comment to the petition, the Office of the Solicitor General (OSG) countered that (1) the trial court acquired jurisdiction
over the case even though Tansiongco, and not a DENR forest officer, filed the complaint against petitioner and (2) petitioner is
liable for violation of Section 68 of PD 705, as amended.
The Issues
The petition raises the following issues:
17

1) Whether the trial court acquired jurisdiction over Criminal Case No. 2207 even though it was based on a complaint
filed by Tansiongco and not by a DENR forest officer; and
2) Whether petitioner is liable for violation of Section 68 of PD 705, as amended.
The Ruling of the Court
The petition has no merit.
The Trial Court Acquired J urisdiction Over
Criminal Case No. 2207
We sustain the OSG's claim that the trial court acquired jurisdiction over Criminal Case No. 2207. The Revised Rules of Criminal
Procedure (Revised Rules) list the cases which must be initiated by a complaint filed by specified individuals,
18
non-compliance
of which ousts the trial court of jurisdiction from trying such cases.
19
However, these cases concern only defamation and other
crimes against chastity
20
and not to cases concerning Section 68 of PD 705, as amended. Further, Section 80 of PD 705 does
not prohibit an interested person from filing a complaint before any qualified officer for violation of Section 68 of PD 705, as
amended. Section 80 of PD 705 provides in relevant parts:
SECTION 80. Arrest; Institution of criminal actions. - x x x x
Reports and complaints regarding the commission of any of the offenses defined in this Chapter, not committed
in the presence of any forest officer or employee, or any of the deputized officers or officials, shall immediately be
investigated by the forest officer assigned in the area where the offense was allegedly committed, who shall
thereupon receive the evidence supporting the report or complaint.
If there is prima facie evidence to support the complaint or report, the investigating forest officer shall file the
necessary complaint with the appropriate official authorized by law to conduct a preliminary investigation of
criminal cases and file an information in Court. (Emphasis supplied)
We held in People v. CFI of Quezon
21
that the phrase "reports and complaints" in Section 80 refers to "reports and complaints as
might be brought to the forest officer assigned to the area by other forest officers or employees of the Bureau of Forest
Development or any of the deputized officers or officials, for violations of forest laws not committed in their presence."
22

Here, it was not "forest officers or employees of the Bureau of Forest Development or any of the deputized officers or officials"
who reported to Hernandez the tree-cutting in the Mayod Property but Tansiongco, a private citizen who claims ownership over
the Mayod Property. Thus, Hernandez cannot be faulted for not conducting an investigation to determine "if there is prima facie
evidence to support the complaint or report."
23
At any rate, Tansiongco was not precluded, either under Section 80 of PD 705 or
the Revised Rules, from filing a complaint before the Provincial Prosecutor for petitioner's alleged violation of Section 68 of PD
705, as amended. For its part, the trial court correctly took cognizance of Criminal Case No. 2207 as the case falls within its
exclusive original jurisdiction.
24

Petitioner is Liable for Cutting Timber in Private
Property Without Permit
Section 68, as amended, one of the 12 acts
25
penalized under PD 705, provides:
SECTION 68. Cutting, Gathering and/or Collecting Timber, or Other Forest Products Without License. - Any person who
shall cut, gather, collect, remove timber or other forest products from any forest land, or timberfrom alienable or
disposable public land, or from private land, without any authority, or possess timber or other forest products without
the legal documents as required under existing forest laws and regulations, shall be punished with the penalties
imposed under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships,
associations, or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable,
and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part
of the Commission on Immigration and Deportation.
The court shall further order the confiscation in favor of the government of the timber or any forest products cut,
gathered, collected, removed, or possessed as well as the machinery, equipment, implements and tools illegally used in
the area where the timber or forest products are found. (Emphasis supplied)
Section 68 penalizes three categories of acts: (1) the cutting, gathering, collecting, or removing of timber or other forest products
from any forest land without any authority; (2) the cutting, gathering, collecting, or removing of timber from alienable or
disposable public land, or from private land without any authority;
26
and (3) the possession of timber or other forest products
without the legal documents as required under existing forest laws and regulations.
27
Petitioner stands charged of having "cut,
gathered, collected and removed timber or other forest products from a private land
28
without x x x the necessary permit x x x "
thus his liablity, if ever, should be limited only for "cut[ting], gather[ing], collect[ing] and remov[ing] timber," under the second
category. Further, the prosecution evidence showed that petitioner did not perform any acts of "gathering, collecting, or
removing" but only the act of "cutting" a lone narra tree. Hence, this case hinges on the question of whether petitioner "cut x x
xtimber" in the Mayod Property without a DENR permit.
29

We answer in the affirmative and thus affirm the lower courts' rulings.
On the question of whether petitioner cut a narra tree in the Mayod Property without a DENR permit, petitioner adopted
conflicting positions. Before his trial, petitioner consistently represented to the authorities that he cut a narra tree in the Mayod
Property and that he did so only with Calix's permission. However, when he testified, petitioner denied cutting the tree in
question. We sustain the lower courts' rulings that petitioner's extrajudicial admissions bind him.
30
Petitioner does not explain
why Royo and Hernandez, public officials who testified under oath in their official capacities, would lie on the stand to implicate
petitioner in a serious criminal offense, not to mention that the acts of these public officers enjoy the presumption of regularity.
Further, petitioner does not deny presenting Calix's authorization to Royo and Hernandez as his basis for cutting the narra tree
in the Mayod Property. Petitioner has no use of Calix's authorization if, as he claimed during the trial, he did not cut any tree in
the Mayod Property.
We further hold that the lone narre tree petitioner cut from the Mayod Property constitutes "timber" under Section 68 of PD 705,
as amended. PD 705 does not define "timber," only "forest product" (which circuitously includes "timber.")
31
Does the narra tree
in question constitute "timber" under Section 68? The closest this Court came to defining the term "timber" in Section 68 was to
provide that "timber," includes "lumber" or "processed log."
32
In other jurisdictions, timber is determined by compliance with
specified dimensions
33
or certain "stand age" or "rotation age."
34
In Mustang Lumber, Inc. v. Court of Appeals,
35
this Court was
faced with a similar task of having to define a term in Section 68 of PD 705 - "lumber" - to determine whether possession of
lumber is punishable under that provision. In ruling in the affirmative, we held that "lumber" should be taken in its ordinary or
common usage meaning to refer to "processed log or timber," thus:
The Revised Forestry Code contains no definition of either timber or lumber. While the former is included in forest
products as defined in paragraph (q) of Section 3, the latter is found in paragraph (aa) of the same section in the
definition of "Processing plant," which reads:
(aa) Processing plant is any mechanical set-up, machine or combination of machine used for the processing of
logs and other forest raw materials into lumber, veneer, plywood, wallboard, blackboard, paper board, pulp,
paper or other finished wood products.
This simply means that lumber is a processed log or processed forest raw material. Clearly, the Code uses the
term lumber in its ordinary or common usage. In the 1993 copyright edition of Webster's Third New International
Dictionary, lumber is defined, inter alia, as "timber or logs after being prepared for the market." Simply put, lumber is
a processed log or timber.
It is settled that in the absence of legislative intent to the contrary, words and phrases used in a statute should
be given their plain, ordinary, and common usage meaning. And in so far as possession of timber without the
required legal documents is concerned, Section 68 of PD No. 705, as amended, makes no distinction between raw and
procesed timber. Neither should we.
36
x x x x (Italicization in the original; boldfacing supplied)
We see no reason why, as in Mustang, the term "timber" under Section 68 cannot be taken in its common acceptation as
referring to "wood used for or suitable for building or for carpentry or joinery."
37
Indeed, tree saplings or tiny tree stems that are
too small for use as posts, panelling, beams, tables, or chairs cannot be considered timber.
38

Here, petitioner was charged with having felled a narra tree and converted the same into "several pieces of sawn lumber, about
three (3) pcs. 2x16x6 and three (3) pcs. 2x18x7 x x x consisting of 111 board feet x x x." These measurements were indicated in
the apprehension receipt Hernandez issued to petitioner on 26 January 1999 which the prosecution introduced in
evidence.
39
Further, Hernandez testified that the larger portion of the felled log left in the Mayod Property "measured 76
something centimeters [at the big end] while the smaller end measured 65 centimeters and the length was 2.8
meters."
40
Undoubtedly, the narra tree petitioner felled and converted to lumber was "timber" fit "for building or for carpentry or
joinery" and thus falls under the ambit of Section 68 of PD 705, as amended.
The Penalty Imposable on Petitioner
Violation of Section 68 of PD 705, as amended, is punishable as Qualified Theft under Article 310 in relation to Article 309 of the
Revised Penal Code (RPC), thus:
Art. 310. Qualified theft. - The crime of qualified theft shall be punished by the penalties next higher by two degrees than
those respectively specified in the next preceding article x x x.
Art. 309. Penalties. - Any person guilty of theft shall be punished by:
1. The penalty of prisin mayor in its minimum and medium periods, if the value of the thing stolen is more than
12,000 pesos but does not exceed 22,000 pesos; but if the value of the thing stolen exceeds the latter amount,
the penalty shall be the maximum period of the one prescribed in this paragraph, and one year for each
additional ten thousand pesos, but the total of the penalty which may be imposed shall not exceed twenty years.
In such cases, and in connection with the accessory penalties which may be imposed and for the purpose of the
other provisions of this Code, the penalty shall be termed prisin mayor or reclusin temporal, as the case may
be.
2. The penalty of prisin correccional in its medium and maximum periods, if the value of the thing stolen is
more than 6,000 pesos but does not exceed 12,000 pesos.
3. The penalty of prisin correccional in its minimum and medium periods, if the value of the property stolen is
more than 200 pesos but does not exceed 6,000 pesos.
4. Arresto mayor in its medium period to prisin correccional in its minimum period, if the value of the property
stolen is over 50 pesos but does not exceed 200 pesos.
5. Arresto mayor to its full extent, if such value is over 5 pesos but does not exceed 50 pesos.
6. Arresto mayor in its minimum and medium periods, if such value does not exceed 5 pesos.
7. Arresto menor or a fine not exceeding 200 pesos, if the theft is committed under the circumstances
enumerated in paragraph 3 of the next preceding article and the value of the thing stolen does not exceed 5
pesos. If such value exceeds said amount, the provisions of any of the five preceding subdivisions shall be
made applicable.
.
8. Arresto menor in its minimum period or a fine not exceeding 50 pesos, when the value of the thing stolen is
not over 5 pesos, and the offender shall have acted under the impulse of hunger, poverty, or the difficulty of
earning a livelihood for the support of himself or his family.
The Information filed against petitioner alleged that the six pieces of lumber measuring 111 board feet were valued at P3,330.
However, if the value of the log left at the Mayod Property is included, the amount increases toP20,930.40. To prove this
allegation, the prosecution relied on Hernandez's testimony that these amounts, as stated in the apprehension receipt he issued,
are his "estimates" based on "prevailing local price."
41

This evidence does not suffice. To prove the amount of the property taken for fixing the penalty imposable against the accused
under Article 309 of the RPC, the prosecution must present more than a mere uncorroborated "estimate" of such fact.
42
In the
absence of independent and reliable corroboration of such estimate, courts may either apply the minimum penalty under Article
309 or fix the value of the property taken based on the attendant circumstances of the case.
43
In People v. Dator
44
where, as
here, the accused was charged with violation of Section 68 of PD 705, as amended, for possession of lumber without permit, the
prosecution's evidence for the lumber's value consisted of an estimate made by the apprehending authorities whose apparent
lack of corroboration was compounded by the fact that the transmittal letter for the estimate was not presented in evidence.
Accordingly, we imposed on the accused the minimum penalty under Article 309(6)
45
of the RPC.
46

Applying Dator in relation to Article 310 of the RPC and taking into account the Indeterminate Sentence Law, we find it proper to
impose on petitioner, under the circumstances obtaining here, the penalty of four (4) months and one (1) day of arresto mayor,
as minimum, to three (3) years, four (4) months and twenty-one (21) days of prision correcional, as maximum.
WHEREFORE, we AFFIRM the Decision dated 28 June 2002 and the Resolution dated 14 May 2003 of the Court of Appeals
with the modification that petitioner Sesinando Merida is sentenced to four (4) months and one (1) day ofarresto mayor, as
minimum, to three (3) years, four (4) months and twenty-one (21) days of prision correcional, as maximum.
SO ORDERED.
Puno, C.J., Chairperson, Corona, Azcuna, Leonardo-de Castro, JJ., concur.

[G.R. No. 135385. December 6, 2000]
ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES,
SECRETARY OF BUDGET AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL
COMMISSION ON INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI MANSAYANGAN, BASILIO
WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO CARPIANO, LIBERATO A. GABIN, MATERNIDAD M.
COLAS, NARCISA M. DALUPINES, BAI KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU
BALITUNGTUNG-ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO SABASALES, DATU
EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN, TIMUAY JOSE ANOY, TIMUAY MACARIO D.
SALACAO, TIMUAY EDWIN B. ENDING, DATU SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI
NANAPNAY-LIZA SAWAY, BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN,
DATU MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY, LOURDES D.
AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA GRACE L. GIRON, ROSEMARIE
G. PE, BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE CARANTES-VIVAL, LANGLEY SEGUNDO,
SATUR S. BUGNAY, CARLING DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO CAYETANO,
CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ, RODOLFO C. AGUILAR, MAURO VALONES,
PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B. GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR
DALUNHAY, RICO O. SULATAN, RAFFY MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H.
MANGKULINTAS, SAMIE SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO S. LIESES,
FILIPE G. SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY, JIMMY UGYUB, SALVADOR
TIONGSON, VENANCIO APANG, MADION MALID, SUKIM MALID, NENENG MALID, MANGKATADONG AUGUSTO
DIANO, JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELAY DIAMILING, SALOME P. SARZA,
FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSAGONOS, ROMEO SALIGA,
SR., JERSON P. GERADA, RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M. GERARDA, ELIZABETH
L. MENDI, MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL MALID, represented by her father
CORNELIO MALID, MARCELINO M. LADRA, represented by her father MONICO D. LADRA, JENNYLYN MALID,
represented by her father TONY MALID, ARIEL M. EVANGELISTA, represented by her mother LINAY
BALBUENA, EDWARD M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO BLAAN TRIBAL FARMERS
ASSOCIATION, INTER-PEOPLES EXCHANGE, INC. and GREEN FORUM-WESTERN VISAYAS, intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE CONSERVATION OF NATURAL RESOURCES,
INC., intervenor.
R E S O L U T I O N
PER CURIAM:
Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as citizens and taxpayers,
assailing the constitutionality of certain provisions of Republic Act No. 8371 (R.A. 8371), otherwise known as the Indigenous
Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and Regulations (Implementing Rules).
In its resolution of September 29, 1998, the Court required respondents to comment.
[1]
In compliance, respondents
Chairperson and Commissioners of the National Commission on Indigenous Peoples (NCIP), the government agency created
under the IPRA to implement its provisions, filed on October 13, 1998 their Comment to the Petition, in which they defend the
constitutionality of the IPRA and pray that the petition be dismissed for lack of merit.
On October 19, 1998, respondents Secretary of the Department of Environment and Natural Resources (DENR) and
Secretary of the Department of Budget and Management (DBM) filed through the Solicitor General a consolidated
Comment. The Solicitor General is of the view that the IPRA is partly unconstitutional on the ground that it grants ownership
over natural resources to indigenous peoples and prays that the petition be granted in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the authors of the IPRA, Mr.
Ponciano Bennagen, a member of the 1986 Constitutional Commission, and the leaders and members of 112 groups of
indigenous peoples (Flavier, et. al), filed their Motion for Leave to Intervene. They join the NCIP in defending the
constitutionality of IPRA and praying for the dismissal of the petition.
On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to Intervene and/or to Appear as
Amicus Curiae. The CHR asserts that IPRA is an expression of the principle of parens patriae and that the State has the
responsibility to protect and guarantee the rights of those who are at a serious disadvantage like indigenous peoples. For this
reason it prays that the petition be dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the Haribon Foundation for the
Conservation of Natural Resources, Inc. (Haribon, et al.), filed a motion to Intervene with attached Comment-in-
Intervention. They agree with the NCIP and Flavier, et al. that IPRA is consistent with the Constitution and pray that the petition
for prohibition and mandamus be dismissed.
The motions for intervention of the aforesaid groups and organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their respective memoranda in
which they reiterate the arguments adduced in their earlier pleadings and during the hearing.
Petitioners assail the constitutionality of the following provisions of the IPRA and its Implementing Rules on the ground that
they amount to an unlawful deprivation of the States ownership over lands of the public domain as well as minerals and other
natural resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII of the Constitution:
(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b) which, in turn, defines
ancestral lands;
(2) Section 5, in relation to section 3(a), which provides that ancestral domains including inalienable public lands,
bodies of water, mineral and other resources found within ancestral domains are private but community property of
the indigenous peoples;
(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral domains and ancestral
lands;
(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the ancestral domains;
(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the ancestral lands;
(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting, extraction, development or
exploration of minerals and other natural resources within the areas claimed to be their ancestral domains, and the
right to enter into agreements with nonindigenous peoples for the development and utilization of natural resources
therein for a period not exceeding 25 years, renewable for not more than 25 years; and
(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop, protect and conserve the
ancestral domains and portions thereof which are found to be necessary for critical watersheds, mangroves, wildlife
sanctuaries, wilderness, protected areas, forest cover or reforestation.
[2]

Petitioners also content that, by providing for an all-encompassing definition of ancestral domains and ancestral lands
which might even include private lands found within said areas, Sections 3(a) and 3(b) violate the rights of private landowners.
[3]

In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of the NCIP and making
customary law applicable to the settlement of disputes involving ancestral domains and ancestral lands on the ground that these
provisions violate the due process clause of the Constitution.
[4]

These provisions are:
(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of ancestral domains and which
vest on the NCIP the sole authority to delineate ancestral domains and ancestral lands;
(2) Section 52[i] which provides that upon certification by the NCIP that a particular area is an ancestral domain and
upon notification to the following officials, namely, the Secretary of Environment and Natural Resources, Secretary
of Interior and Local Governments, Secretary of Justice and Commissioner of the National Development
Corporation, the jurisdiction of said officials over said area terminates;
(3) Section 63 which provides the customary law, traditions and practices of indigenous peoples shall be applied first
with respect to property rights, claims of ownership, hereditary succession and settlement of land disputes, and that
any doubt or ambiguity in the interpretation thereof shall be resolved in favor of the indigenous peoples;
(4) Section 65 which states that customary laws and practices shall be used to resolve disputes involving indigenous
peoples; and
(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes involving rights of the indigenous
peoples.
[5]

Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative Order No. 1, series of 1998,
which provides that the administrative relationship of the NCIP to the Office of the President is characterized as a lateral but
autonomous relationship for purposes of policy and program coordination. They contend that said Rule infringes upon the
Presidents power of control over executive departments under Section 17, Article VII of the Constitution.
[6]

Petitioners pray for the following:
(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related provisions of R.A. 8371
are unconstitutional and invalid;
(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the NCIP to cease and desist
from implementing the assailed provisions of R.A. 8371 and its Implementing Rules;
(3) The issuance of a writ of prohibition directing the Secretary of the Department of Environment and Natural
Resources to cease and desist from implementing Department of Environment and Natural Resources Circular No.
2, series of 1998;
(4) The issuance of a writ of prohibition directing the Secretary of Budget and Management to cease and desist from
disbursing public funds for the implementation of the assailed provisions of R.A. 8371; and
(5) The issuance of a writ of mandamus commanding the Secretary of Environment and Natural Resources to comply
with his duty of carrying out the States constitutional mandate to control and supervise the exploration,
development, utilization and conservation of Philippine natural resources.
[7]

After due deliberation on the petition, the members of the Court voted as follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice and Justices Bellosillo,
Quisumbing, and Santiago join, sustaining the validity of the challenged provisions of R.A. 8371. Justice Puno also filed a
separate opinion sustaining all challenged provisions of the law with the exception of Section 1, Part II, Rule III of NCIP
Administrative Order No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57 of the IPRA
which he contends should be interpreted as dealing with the large-scale exploitation of natural resources and should be read in
conjunction with Section 2, Article XII of the 1987 Constitution. On the other hand, Justice Mendoza voted to dismiss the petition
solely on the ground that it does not raise a justiciable controversy and petitioners do not have standing to question the
constitutionality of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a separate opinion expressing
the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are unconstitutional. He reserves judgment
on the constitutionality of Sections 58, 59, 65, and 66 of the law, which he believes must await the filing of specific cases by
those whose rights may have been violated by the IPRA. Justice Vitug also filed a separate opinion expressing the view that
Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in
the separate opinions of Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated
upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of
Civil Procedure, the petition is DISMISSED.
Attached hereto and made integral parts thereof are the separate opinions of Justices Puno, Vitug, Kapunan, Mendoza, and
Panganiban.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Melo, Quisumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr.,
JJ., concur.
Puno, Vitug, Kapunan, Mendoza and Panganiban JJ., see separate opinion
[G.R. No. 125797. February 15, 2002]
DEPARTMENT OF ENVIRONMENT and NATURAL RESOURCES (DENR), Region VIII, Tacloban City, Represented by
Regional Executive Director Israel C. Gaddi, petitioner, vs. GREGORIO DARAMAN, NARCISO LUCENECIO and
Hon. CLEMENTE C. ROSALES, Presiding Judge, Regional Trial Court, Branch 32, Calbayog City, respondents.
D E C I S I O N
PANGANIBAN, J .:
Under the Revised Forestry Code of the Philippines, particularly Section 68-A, the Department of Environment and Natural
Resources secretary or a duly authorized representative may order the confiscation in favor of the government of, among others,
the vehicles used in the commission of offenses punishable by the said Code.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the December 6, 1995
Decision
[1]
and the June 3, 1996 Order
[2]
of the Regional Trial Court (RTC) of Calbayog City (Branch 32) in Criminal Case No.
1958. The assailed Decision disposed as follows:
WHEREFORE, for insufficiency of evidence, the Court hereby declares accused GREGORIO DARAMAN and NARCISO
LUCENECIO acquitted of the crime charged, with costs de [o]ficio.
The bond of the accused is hereby cancelled.
The court hereby orders the CENR Officer of Samar, or any DENR employee who is taking custody of the Holy Cross Funeral
Services vehicle St. Jude, with Plate No. HAJ-848, to return the said vehicle to the owner thereof.
[3]

The assailed Order denied the Motion for Reconsideration challenging the last paragraph of the Decision regarding the
return of the subject vehicle to herein respondents.
The Facts
In the assailed Decision, the trial court summarized the facts of this case as follows:
The accused herein Gregorio Daraman and Narciso Lucenecio are charged [with] violation of Section 68 of Presidential Decree
No. 705 as amended by Executive Order No. 277 in an information which is quoted herein below:
That on or about the 30th day of November, 1993, at about 1:00 oclock in the afternoon, at Barangay Bulao, Municipality of San
Jorge, Province of Samar, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring,
confederating together and mutually helping one another, did then and there wilfully, unlawfully and feloniously gather, collect
and possess seventy two (72) pieces of assorted sizes of lumber, with a total volume of 72.93 board feet valued at SEVEN
HUNDRED TWENTY NINE PESOS (P729.30) and THIRTY CENTAVOS, without first securing and obtaining any permit or
license therefor from the proper authorities, thus Violating Section 68 of Presidential Decree No. 705, as amended and further
Amended by Executive Order No. 277, series of 1989.
CONTRARY TO LAW.
Assisted by their counsels, the accused were arraigned and they entered the plea of not guilty.
Thereafter trial was conducted.
The prosecution presented Pablo Opinion who testified as follows:
That he is an employee of the Department of Environment and Natural Resources as a Forest Ranger. On November 30,
1993 at about 1:00 oclock in the afternoon, while he was in his house in Brgy. Bulao, San Jorge, Samar, a vehicle named St.
Jude with Plate No. HAJ-848 coming from barangay Blanca Aurora passed by. He stopped the said vehicle and found some
lumber of assorted sizes [and] wood shavings inside. The lumber consisted of 62 pieces of 1 x 2 x 4, 16 pieces of 1 x 24 x
2.3 and 1 piece of 1 x 2 x 4. In his estimate at the price of P10.00 per board foot the total value of the lumber would
be P729.30. He asked the driver for [the] owner of the lumber and he was informed that it was a certain Asan of Brgy. Blanca
Aurora. The driver also informed him that the vehicle was owned by his employer, Narciso Lucenecio of the Holy Cross Funeral
Services in Calbayog City. He then took hold of the vehicle and the assorted lumber and, thereafter, he issued a Seizure Receipt
marked as Exhs. B and series. He also took photographs of the lumber which are now marked as Exhs. C and series.
Besides, he signed a Joint Affidavit with Oligario Mabansag, also a Forest Ranger. When he asked the driver
Gregorio Daraman for some papers for the assorted lumber, the latter replied that he had none because they were not
his. Daraman further told him that [they] went to Brgy. Blanca Aurora to secure some wood shavings from the furniture shop
owned by Asan and Asan merely asked him a favor of loading his assorted lumbers in the vehicle of the Holy Cross Funeral
Services to be brought to his (Asans) house in Barangay Abrero, Calbayog City.
The prosecution has still another witness in the person of Oligario Mabansag, but both the prosecution and the defense agreed
to dispense with his testimony considering that the case would be merely corroborative [of] those already offered by Pablo
Opinion. The prosecution rested its case with the admission of Exhs. A and B and their series. Its Exhs. C and series were
rejected because the photographer who took them did not testify to identify [them].
For the defense, only accused Gregorio Daraman testified because his co-accused would merely offer corroborative testimony.
From his testimony, the following facts have been established:
That on November 30, 1993 in the afternoon his employer Baby Lucenecio instructed him to procure some wood shavings
(sinapyo) in San Jorge, Samar. He used the service vehicle of the Holy Cross Funeral Services. His companion[s]
were Melio Bedoya, Fanny Fiel and Ragi Mabutol. They went to barangay Blanca Aurora, San Jorge, Samar and thereat, they
got some wood shavings from the furniture shop owned by a certain Asan Abing. They loaded 20 sacks of wood shavings, each
sack measuring 22 inches in height by 32 1/2 inches in circumference as he demonstrated in court. The wood shavings [were]
being used by the Holy Cross Funeral Services as cushions in the coffin. After the 20 sacks of wood shavings were
loaded, Asan Abing asked him a favor to bring his (Asan) assorted lumber to his house in Brgy. Obrero, Calbayog City where the
Holy Cross Funeral Services [was] also located. Asan himself personally loaded his assorted lumber into the vehicle. The
subject assorted lumber were already in the furniture shop where they got the wood shavings. On their way home as they
passed by Brgy. Bulao, Pablo Opinion stopped him and took the wood shavings. Opinion also inquired about the assorted
lumber and he told him that they were owned by Asan, owner of the furniture shop in Brgy. Blanca Aurora, who loaded them in
his vehicle to be brought to his (Asans) house in Barangay Obrero, CalbayogCity. He told Opinion also that Asan advised him
that if somebody would [ask] about his lumber, just to tell the person that Asan had the papers for the lumber with him in his
furniture shop at Brgy. Blanca Aurora, San Jorge, Samar. Pablo Opinion, however, did not take his word and he instead
impounded the vehicle together with the assorted lumber. At about 5:00 oclock in the afternoon, the vehicle was still not
returned to him and so Gregorio Daraman left and returned to his employer at Brgy. Obrero, Calbayog City and told the latter
about what happened.
[4]

After trial, the RTC acquitted both accused and ordered the return of the disputed vehicle to Lucenecio.
Prior to these court proceedings, the Department of Environment and Natural Resources-Community and Environment and
Natural Resources Office (DENR-CENRO) of Catbalogan,Samar conducted administrative confiscation proceedings on the
seized lumber and vehicle in the presence of private respondents.
[5]
The two failed to present documents to show the legality of
their possession and transportation of the lumber seized. Hence, CENRO Officer Marciano T. Talavera recommended to the
Regional Executive Director (RED) the final confiscation of the seized lumber and conveyance.
[6]
Atty. Pastor C. Salazar filed a
Memorandum dated January 26, 1994, concurring with the recommendation to forfeit the lumber and the vehicle seized from
private respondents. The Memorandum was approved by RED Augustus L. Momongan and Arty. Fiel I. Marmita, chief of the
Legal Division of the DENR, Region VIII,Tacloban City.
[7]

Atty. Rogelio G. Bato Jr. of DENR, Region 8, Tacloban City, moved for the reconsideration of the assailed Decision, only
insofar as it ordered the return of the said vehicle to the owner thereof.
[8]
He contended that the vehicle had already been
administratively confiscated by the DENR on December 2, 1993, and that the RED approved its forfeiture on January 26,
1994.
[9]
He further claimed that the DENR had exclusive jurisdiction over the conveyance, which had been used in violation of the
Revised Forestry Code pursuant to Section 68-A of PD 705, as amended by EO 277.
The trial court denied the Motion via the assailed Order.
Ruling of the Trial Court
The trial court acquitted private respondents for insufficiency of evidence. The unrebutted testimony of
Respondent Daraman was that, in exchange for the wood shavings from Asan, the former agreed to take the lumber to the
latters house in Calbayog City, where the Holy Cross Funeral Services office was also located. Asan advised Daraman to reply,
when asked, that the papers showing the authorization for the lumber were in the formers shop in Barangay Blanca Aurora.
Finding the evidence against Respondent Lucenecio to be likewise insufficient, the RTC considered the vehicle as an effect of
the crime and ordered its delivery to him.
In the challenged Order, the trial court ruled that the Motion for Reconsideration was untenable on procedural and
substantive grounds. Since Assistant Provincial Prosecutor Feliciano Aguilar did not sign the Motion, the RTC deemed his
silence a sign of his disapproval of the Motion.
Substantively, the trial court ruled:
x x x [T]he Court finds the motion still wanting in merits considering that as found by the Court the owner of the vehicle in
question, St. Jude, which is the Holy Cross Funeral Parlor owned by accusedNarciso Lucenecio, did not commit any violation of
P.D. 705. Likewise, the prosecution failed to sufficiently establish that accused Gregorio Daraman had taken or kept control of
the lumber subject of the motion which would thereby demonstrate that he had x x x possession of the subject forest products.
Instead, as established by the evidence it was a certain Asan who owned the subject lumber. xxx.
xxx xxx xxx
The decision of the Court has never been brought on appeal, thereby the same has long become final and executory.
Again, as shown by the evidence in the alleged confiscation proceedings conducted by the OIC DENR
Officer Marciano Talavera of Samar on December 2, 1992, the lumber in question [was] found to be owned by Asan Abing. But
notwithstanding this fact, for reasons not known to the Court, the said Asan Abing was never made an accused in the present
case.
Sec. 68-1 of P.D. 705 contemplates a situation where the owner of the vehicle is himself a violator of P.D. 705 or has been
found to have conspired with any other persons who committed the violation of Sec. 68 of P.D. 705 or consented to the use of
his vehicle in violating the said law. In the present case as shown by the evidence, neither the Holy Cross Funeral Parlor or its
owner accused Narciso Luceneciohas committed a violation of P.D. 705 as already declared by the Court in its decision
of December 6, 1995 nor the driver, accused Gregorio Daraman. In fact both were declared acquitted of the violation charged,
and the decision has not been appealed.
[10]

Hence, this Petition.
[11]

Issues
In its Memorandum, petitioner raises the following issues for the Courts consideration:
(A) Regional Trial Courts have no jurisdiction and/or authority to order x x x the return of property already owned by
the government.
(B) Respondent judge utterly disregarded and/or misinterpreted the provisions of Presidential Decree No. 705, as
amended by Executive Order No. 277, otherwise known as the Revised Forestry Code of the Philippines.
(C) The government is not estopped from protecting its interest by reason of mistake, error or failure of its officers to
perform their duties.
[12]

Stated simply, the issues are: (1) whether the RTC had jurisdiction to release the confiscated vehicle; (2) whether the trial
court misconstrued PD 705, as amended; and (3) whether, as a result of its filing of the criminal action, petitioner
is estopped from confiscating the vehicle administratively.
The Courts Ruling
The Petition is meritorious.
First Issue:
J urisdiction to Order Return of Vehicle
Petitioner contends that the RTC overstepped its jurisdiction when it ordered the return of the disputed vehicle, because the
vehicle had already become government property by virtue of the forfeiture Order issued by DENR on January 26, 1994. The
DENR secretary or his duly authorized representative, under Section 68-A of PD 705 as amended by EO 277, may order the
confiscation and disposition of all conveyances -- by land, water or air -- used in illegally cutting, gathering, removing,
possessing or abandoning forest products.
We agree. Jurisdiction is conferred by substantive law.
[13]
A comparison of the provisions of the two relevant sections of PD
705, as amended, shows that the jurisdiction of the RTC covers the confiscation of the timber or forest products as well as the
machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found; it is the
DENR that has jurisdiction over the confiscation of forest products and, to stress, all conveyances used in the commission of the
offense. Section 68 reads:
Section 68. Cutting, Gathering and/or Collecting Timber, or Other Forest Products Without License. -- Any person who shall cut,
gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or
from private land, without any authority, or possess timber or other forest products without the legal documents as required
under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the
Revised Penal Code: x x x.
The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered,
collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where
the timber or forest products are found.
[14]

Section 68-A, in contrast, provides:
SEC. 68-A. Administrative Authority of the Department Head or His Duly Authorized Representative to Order Confiscation. -- In
all cases of violations of this Code or other forest laws rules and regulations, the Department Head or his duly authorized
representative, may order the confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned,
and all conveyances used either by land, water or air in the commission of the offense and to dispose of the same in accordance
with pertinent laws, regulations or policies on the matter.
[15]

If a statute is clear, plain and free from ambiguity, it must be understood in its literal meaning and applied without resort to
interpretation, on the presumption that its wording correctly expresses its intent or will. The courts may not construe it
differently.
[16]

Machinery is a collective term for machines and appliances used in the industrial arts;
[17]
equipment covers physical
facilities available for production, including buildings, machineries and tools;
[18]
and implements pertains to whatever may supply
a want, especially an instrument, tool or utensil.
[19]
These terms do not include conveyances that are specifically covered by
Section 68-A. The implementing guidelines of Section 68-A define conveyance in a manner that includes any type or class of
vehicle, craft, whether motorized or not, used either in land, water or air, or a combination thereof or any mode of transport used
in the movement of any forest product.
[20]

Hence, the original and exclusive jurisdiction over the confiscation of all conveyances used either by land, water or air in
the commission of the offense and to dispose of the same is vested in the Department of Environment and Natural Resources
(DENR) secretary or a duly authorized representative. The DENR secretary has supervision and control over the enforcement of
forestry, reforestation, parks, game and wildlife laws, rules and regulations.
[21]

To implement Section 68-A, DENR promulgated Administrative Order (AO) No. 54-93, amending Department
Administrative Order (DAO) No. 59-90. AO 54-93 provides the guidelines for the confiscation, forfeiture and disposition of
conveyances used in violation of forestry laws, rules and regulations.
Even the Information filed in Criminal Case No. 1958 limited the acts attributed to private respondents to willfully, unlawfully
and feloniously gather, collect and possess seventy two (72) pieces of assorted sizes of lumber, x x x without first securing and
obtaining any permit or license therefor from the proper authorities, x x x. The Information did not contain any allegation
pertaining to the transportation or conveyance of illegally cut, gathered, possessed or abandoned lumber in violation of Section
68-A of PD 705, as amended.
Confiscation Without Due Process
Private respondents main defense is that the Order of Forfeiture (Annex C) is a false, falsified and perjurious document.
The Order was attached to and made part of the record only when petitioner filed its Motion for Reconsideration dated February
6, 1996, or only after the trial court rendered the assailed Decision. Petitioner made it appear, according to the private
respondents, that RED Momongan had approved the Memorandum on January 26, 1994. This does not appear to be true
because Atty. Marmita, officer-in-charge (OIC) of the DENR Legal Division of Tacloban City, signed the Memorandum
recommending approval only on January 31, 1994.
Further, on April 6, 1995, Judge Rosales of the RTC of Calbayog City (Branch 32) ordered the provincial environment and
natural resources officer to transfer the confiscated vehicle and pieces of lumber in connection with the prosecution of Criminal
Case 1958.
[22]
Reynaldo R. Villafuerte, OIC of the Provincial Environment and Natural Resources Office (PENRO), replied that
his office could not deliver the vehicle because it was not in running condition.
[23]

We are not persuaded. The validity and legality of the Order of Forfeiture falls outside the ambit of the review of the
assailed Decision and Order. The basis for the assailed Order to release the vehicle was private respondents acquittal of the
charge of violating Section 68. On the other hand, the forfeiture Order issued by the DENR was based on Section 68-A, which
involved a distinct and separate matter cognizable by it. Petitioner is questioning only the RTCs jurisdiction over the assailed
Order to release the confiscated vehicle. Private respondents have not appealed the DENRs Order of Forfeiture, the validity of
which can thus be presumed.
[24]
The genuineness of the Order and its proper service upon them are factual issues that will not
be dwelt upon by this Court, which is not a trier of facts.
[25]

The jurisdiction of this Court, under Rule 45 of the 1997 Rules of Court, is in the main limited to reviewing legal errors
committed by a lower court.
[26]
Under PD 705, the actions and the decisions of the DENR are reviewable by the courts only
through special civil actions for certiorari or prohibition.
[27]

Second Issue:
Construing PD 705, as Amended
Petitioner alleges that the RTC misinterpreted the law when it held that Section 68-A, PD 705 contemplated a situation in
which the very owner of the vehicle was the violator or was a conspirator with other violators of that law. Department Order No.
54, Series of 1993, provides that the proceedings for the confiscation and the forfeiture of the conveyance shall be directed
against its owner, and that lack of knowledge of its illegal use shall not bar its forfeiture.
In the present Petition, the trial court ruled in the assailed Order that Section 68-A of PD 705 contemplated a situation in
which the very owner of the vehicle violated this law or conspired with other persons who violated it or consented to the use of
his or her vehicle in violating it. Respondents Lucenecio and Daraman were not shown to have violated PD 705, and their
acquittals were not appealed.
We side with petitioner. The guilt or the innocence of the accused in the criminal case is immaterial, because what is
punished under Section 68 is the transportation, movement or conveyance of forest products without legal documents. The
DENR secretary or the authorized representatives do not possess criminal jurisdiction; thus, they are not capable of making
such a ruling, which is properly a function of the courts. Even Section 68-A of PD 705, as amended, does not clothe petitioner
with that authority.
Conversely, the same law takes out of the general jurisdiction of the regional trial courts the confiscation of conveyances
used in violation of forestry laws. Hence, we cannot expect the DENR to rule on the criminal liability of the accused before it
impounds such vehicles. Section 68-A covers only the movement of lumber or forest products without proper documents. Where
the language of a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation is
resorted to only where a literal interpretation would lead to either an absurdity or an injustice.
[28]

We also uphold petitioners argument that the release of the vehicle to private respondents would defeat the purpose and
undermine the implementation of forestry laws. The preamble of the amendment in EO 277 underscores the urgency to
conserve the remaining forest resources of the country for the benefit of the present and future generations. Our forest
resources may be effectively conserved and protected only through the vigilant enforcement and implementation of our forestry
laws.
[29]
Strong paramount public policy should not be degraded by narrow constructions of the law that frustrate its clear intent
or unreasonably restrict its scope.
[30]

Third Issue:
Estoppel
In view of the foregoing, it becomes unnecessary for this Court to resolve petitioners third issue. It is no longer material to
rule on whether it was erroneous for the RTC to hold that the assistant provincial prosecutors failure to comment on petitioners
Motion for Reconsideration was an implied disapproval thereof. The public prosecutors disapproval does not vest in the trial
court the jurisdiction or authority to release the vehicle to private respondents.
WHEREFORE, the Petition is GRANTED and the assailed Decision and Order are REVERSED and SET ASIDE. No costs.
SO ORDERED.
Melo, (Chairman), Vitug, Sandoval-Gutierrez, and Carpio, JJ., concur.


[G.R. No. 111107. January 10, 1997]
LEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC), Regional Executive Director (RED), Region 2 and
JOVITO LAYUGAN, JR., in his capacity as Community Environment and Natural Resources Officer (CENRO),
both of the Department of Environment and Natural Resources (DENR), petitioners, vs. COURT OF APPEALS,
HON. RICARDO A. BACULI in his capacity as Presiding Judge of Branch 2, Regional Trial Court at Tuguegarao,
Cagayan, and SPOUSES BIENVENIDO and VICTORIA DE GUZMAN, respondents.
D E C I S I O N
TORRES, JR., J .:
Without violating the principle of exhaustion of administrative remedies, may an action for replevin prosper to recover a
movable property which is the subject matter of an administrative forfeiture proceeding in the Department of Environment and
Natural Resources pursuant to Section 68-A of P. D. 705, as amended, entitled The Revised Forestry Code of the Philippines?
Are the Secretary of DENR and his representatives empowered to confiscate and forfeit conveyances used in transporting
illegal forest products in favor of the government?
These are two fundamental questions presented before us for our resolution.
The controversy on hand had its incipiency on May 19, 1989 when the truck of private respondent Victoria de Guzman
while on its way to Bulacan from San Jose, Baggao, Cagayan, was seized by the Department of Environment and Natural
Resources (DENR, for brevity) personnel in Aritao, Nueva Vizcaya because the driver could not produce the required documents
for the forest products found concealed in the truck. Petitioner Jovito Layugan, the Community Environment and Natural
Resources Officer (CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order of confiscation of the truck and gave the
owner thereof fifteen (15) days within which to submit an explanation why the truck should not be forfeited. Private respondents,
however, failed to submit the required explanation. On June 22, 1989,
[1]
Regional Executive Director Rogelio Baggayan of
DENR sustained petitioner Layugans action of confiscation and ordered the forfeiture of the truck invoking Section 68-A of
Presidential Decree No. 705 as amended by Executive Order No. 277. Private respondents filed a letter of reconsideration
dated June 28, 1989 of the June 22, 1989 order of Executive Director Baggayan, which was, however, denied in a subsequent
order of July 12, 1989.
[2]
Subsequently, the case was brought by the petitioners to the Secretary of DENR pursuant to private
respondents statement in their letter dated June 28, 1989 that in case their letter for reconsideration would be denied then this
letter should be considered as an appeal to the Secretary.
[3]
Pending resolution however of the appeal, a suit for replevin,
docketed as Civil Case 4031, was filed by the private respondents against petitioner Layugan and Executive Director
Baggayan
[4]
with the Regional Trial Court, Branch 2 of Cagayan,
[5]
which issued a writ ordering the return of the truck to private
respondents.
[6]
Petitioner Layugan and Executive Director Baggayan filed a motion to dismiss with the trial court
contending, inter alia, that private respondents had no cause of action for their failure to exhaust administrative remedies. The
trial court denied the motion to dismiss in an order dated December 28, 1989.
[7]
Their motion for reconsideration having been
likewise denied, a petition for certiorari was filed by the petitioners with the respondent Court of Appeals which sustained the trial
courts order ruling that the question involved is purely a legal question.
[8]
Hence, this present petition,
[9]
with prayer for
temporary restraining order and/or preliminary injunction, seeking to reverse the decision of the respondent Court of Appeals
was filed by the petitioners on September 9, 1993. By virtue of the Resolution dated September 27, 1993,
[10]
the prayer for the
issuance of temporary restraining order of petitioners was granted by this Court.
Invoking the doctrine of exhaustion of administrative remedies, petitioners aver that the trial court could not legally entertain
the suit for replevin because the truck was under administrative seizure proceedings pursuant to Section 68-A of P.D. 705, as
amended by E.O. 277. Private respondents, on the other hand, would seek to avoid the operation of this principle asserting that
the instant case falls within the exception of the doctrine upon the justification that (1) due process was violated because they
were not given the chance to be heard, and (2) the seizure and forfeiture was unlawful on the grounds: (a) that the Secretary of
DENR and his representatives have no authority to confiscate and forfeit conveyances utilized in transporting illegal forest
products, and (b) that the truck as admitted by petitioners was not used in the commission of the crime.
Upon a thorough and delicate scrutiny of the records and relevant jurisprudence on the matter, we are of the opinion that
the plea of petitioners for reversal is in order.
This Court in a long line of cases has consistently held that before a party is allowed to seek the intervention of the court , it
is a pre-condition that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy
within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to
decide on a matter that comes within his jurisdiction then such remedy should be exhausted first before courts judicial power
can be sought. The premature invocation of courts intervention is fatal to ones cause of action.
[11]
Accordingly, absent any
finding of waiver or estoppel the case is susceptible of dismissal for lack of cause of action.
[12]
This doctrine of exhaustion of
administrative remedies was not without its practical and legal reasons, for one thing, availment of administrative remedy entails
lesser expenses and provides for a speedier disposition of controversies. It is no less true to state that the courts of justice for
reasons of comity and convenience will shy away from a dispute until the system of administrative redress has been completed
and complied with so as to give the administrative agency concerned every opportunity to correct its error and to dispose of the
case. However, we are not amiss to reiterate that the principle of exhaustion of administrative remedies as tested by a battery of
cases is not an ironclad rule. This doctrine is a relative one and its flexibility is called upon by the peculiarity and uniqueness of
the factual and circumstantial settings of a case. Hence, it is disregarded (1) when there is a violation of due process,
[13]
(2)
when the issue involved is purely a legal question,
[14]
(3) when the administrative action is patently illegal amounting to lack or
excess of jurisdiction,
[15]
(4) when there is estoppel on the part of the administrative agency concerned,
[16]
(5) when there is
irreparable injury,
[17]
(6) when the respondent is a department secretary whose acts as an alter ego of the President bears the
implied and assumed approval of the latter,
[18]
(7) when to require exhaustion of administrative remedies would be
unreasonable,
[19]
(8) when it would amount to a nullification of a claim,
[20]
(9) when the subject matter is a private land in land
case proceedings,
[21]
(10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are
circumstances indicating the urgency of judicial intervention.
[22]

In the case at bar, there is no question that the controversy was pending before the Secretary of DENR when it was
forwarded to him following the denial by the petitioners of the motion for reconsideration of private respondents through the order
of July 12, 1989. In their letter of reconsideration dated June 28, 1989,
[23]
private respondents clearly recognize the presence of
an administrative forum to which they seek to avail, as they did avail, in the resolution of their case. The letter, reads, thus:
xxx
If this motion for reconsideration does not merit your favorable action, then this letter should be considered as an appeal to the
Secretary.
[24]

It was easy to perceive then that the private respondents looked up to the Secretary for the review and disposition of their
case. By appealing to him, they acknowledged the existence of an adequate and plain remedy still available and open to them
in the ordinary course of the law. Thus, they cannot now, without violating the principle of exhaustion of administrative remedies,
seek courts intervention by filing an action for replevin for the grant of their relief during the pendency of an administrative
proceedings.
Moreover, it is important to point out that the enforcement of forestry laws, rules and regulations and the protection,
development and management of forest lands fall within the primary and special responsibilities of the Department of
Environment and Natural Resources. By the very nature of its function, the DENR should be given a free hand unperturbed by
judicial intrusion to determine a controversy which is well within its jurisdiction. The assumption by the trial court, therefore, of
the replevin suit filed by private respondents constitutes an unjustified encroachment into the domain of the administrative
agencys prerogative. The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to resolve
a controversy the jurisdiction over which is initially lodged with an administrative body of special competence.
[25]
In Felipe Ismael,
Jr. and Co. vs. Deputy Executive Secretary,
[26]
which was reiterated in the recent case of Concerned Officials of MWSS vs.
Vasquez,
[27]
this Court held:
Thus, while the administration grapples with the complex and multifarious problems caused by unbriddled exploitation of these
resources, the judiciary will stand clear. A long line of cases establish the basic rule that the courts will not interfere in matters
which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the
special technical knowledge and training of such agencies.
To sustain the claim of private respondents would in effect bring the instant controversy beyond the pale of the principle of
exhaustion of administrative remedies and fall within the ambit of excepted cases heretofore stated. However, considering the
circumstances prevailing in this case, we can not but rule out these assertions of private respondents to be without merit. First,
they argued that there was violation of due process because they did not receive the May 23, 1989 order of confiscation of
petitioner Layugan. This contention has no leg to stand on. Due process does not necessarily mean or require a hearing, but
simply an opportunity or right to be heard.
[28]
One may be heard , not solely by verbal presentation but also, and perhaps many
times more creditably and practicable than oral argument, through pleadings.
[29]
In administrative proceedings moreover,
technical rules of procedure and evidence are not strictly applied; administrative process cannot be fully equated with due
process in its strict judicial sense.
[30]
Indeed, deprivation of due process cannot be successfully invoked where a party was given
the chance to be heard on his motion for reconsideration,
[31]
as in the instant case, when private respondents were undisputedly
given the opportunity to present their side when they filed a letter of reconsideration dated June 28, 1989 which was, however,
denied in an order of July 12, 1989 of Executive Director Baggayan. In Navarro III vs. Damasco,
[32]
we ruled that :
The essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to
explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial type hearing
is not at all times and in all instances essential. The requirements are satisfied when the parties are afforded fair and reasonable
opportunity to explain their side of the controversy at hand. What is frowned upon is the absolute lack of notice or hearing.
Second, private respondents imputed the patent illegality of seizure and forfeiture of the truck because the administrative
officers of the DENR allegedly have no power to perform these acts under the law. They insisted that only the court is authorized
to confiscate and forfeit conveyances used in transporting illegal forest products as can be gleaned from the second paragraph
of Section 68 of P.D. 705, as amended by E.O. 277. The pertinent provision reads as follows:
SECTION 68. xxx
xxx
The court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered,
collected, removed, or possessed, as well as the machinery, equipments, implements and tools illegaly [sic] used in the area
where the timber or forest products are found. (Underline ours)
A reading, however, of the law persuades us not to go along with private respondents thinking not only because the
aforequoted provision apparently does not mention nor include conveyances that can be the subject of confiscation by the
courts, but to a large extent, due to the fact that private respondents interpretation of the subject provision unduly restricts the
clear intention of the law and inevitably reduces the other provision of Section 68-A , which is quoted herein below:
SECTION 68-A. Administrative Authority of the Department or His Duly Authorized Representative To Order Confiscation. In all
cases of violation of this Code or other forest laws, rules and regulations, the Department Head or his duly authorized
representative, may order the confiscation of any forest products illegally cut, gathered, removed, or possessed or abandoned,
and all conveyances used either by land, water or air in the commission of the offense and to dispose of the same in accordance
with pertinent laws, regulations and policies on the matter. (Underline ours)
It is, thus, clear from the foregoing provision that the Secretary and his duly authorized representatives are given the
authority to confiscate and forfeit any conveyances utilized in violating the Code or other forest laws, rules and regulations. The
phrase to dispose of the same is broad enough to cover the act of forfeiting conveyances in favor of the government. The
only limitation is that it should be made in accordance with pertinent laws, regulations or policies on the matter. In the
construction of statutes, it must be read in such a way as to give effect to the purpose projected in the statute.
[33]
Statutes should
be construed in the light of the object to be achieved and the evil or mischief to be suppressed, and they should be given such
construction as will advance the object, suppress the mischief, and secure the benefits intended.
[34]
In this wise, the observation
of the Solicitor General is significant, thus:
But precisely because of the need to make forestry laws more responsive to present situations and realities and in view of the
urgency to conserve the remaining resources of the country, that the government opted to add Section 68-A. This amendatory
provision is an administrative remedy totally separate and distinct from criminal proceedings. More than anything else, it is
intended to supplant the inadequacies that characterize enforcement of forestry laws through criminal actions. The preamble of
EO 277-the law that added Section 68-A to PD 705-is most revealing:
WHEREAS, there is an urgency to conserve the remaining forest resources of the country for the benefit and welfare of the
present and future generations of Filipinos;
WHEREAS, our forest resources may be effectively conserved and protected through the vigilant enforcement and
implementation of our forestry laws, rules and regulations;
WHEREAS, the implementation of our forestry laws suffers from technical difficulties, due to certain inadequacies in the penal
provisions of the Revised Forestry Code of the Philippines; and
WHEREAS, to overcome this difficulties, there is a need to penalize certain acts more responsive to present situations and
realities;
It is interesting to note that Section 68-A is a new provision authorizing the DENR to confiscate, not only conveyances, but
forest products as well. On the other hand, confiscation of forest products by the court in a criminal action has long been
provided for in Section 68. If as private respondents insist, the power on confiscation cannot be exercised except only through
the court under Section 68, then Section 68-A would have no purpose at all. Simply put, Section 68-A would not have provided
any solution to the problem perceived in EO 277, supra.
[35]

Private respondents, likewise, contend that the seizure was illegal because the petitioners themselves admitted in the Order
dated July 12, 1989 of Executive Director Baggayan that the truck of private respondents was not used in the commission of the
crime. This order, a copy of which was given to and received by the counsel of private respondents, reads in part ,viz. :
xxx while it is true that the truck of your client was not used by her in the commission of the crime, we uphold your claim that the
truck owner is not liable for the crime and in no case could a criminal case be filed against her as provided under Article 309 and
310 of the Revised Penal Code. xxx
[36]

We observed that private respondents misread the content of the aforestated order and obviously misinterpreted the
intention of petitioners. What is contemplated by the petitioners when they stated that the truck "was not used in the commission
of the crime" is that it was not used in the commission of the crime of theft, hence, in no case can a criminal action be filed
against the owner thereof for violation of Article 309 and 310 of the Revised Penal Code. Petitioners did not eliminate the
possibility that the truck was being used in the commission of another crime, that is, the breach of Section 68 of P.D.705 as
amended by E.O. 277. In the same order of July 12, 1989, petitioners pointed out:
xxx However, under Section 68 of P.D.705 as amended and further amended by Executive Order No.277 specifically provides
for the confiscation of the conveyance used in the transport of forest products not covered by the required legal documents. She
may not have been involved in the cutting and gathering of the product in question but the fact that she accepted the goods for a
fee or fare the same is therefor liable. xxx
[37]

Private respondents, however, contended that there is no crime defined and punishable under Section 68 other than
qualified theft, so that, when petitioners admitted in the July 12, 1989 order that private respondents could not be charged for
theft as provided for under Articles 309 and 310 of the Revised Penal Code, then necessarily private respondents could not have
committed an act constituting a crime under Section 68. We disagree. For clarity, the provision of Section 68 of P.D. 705 before
its amendment by E.O. 277 and the provision of Section 1 of E.O. No.277 amending the aforementioned Section 68 are
reproduced herein, thus:
SECTION 68. Cutting, gathering and/or collecting timber or other products without license. - Any person who shall cut , gather ,
collect , or remove timber or other forest products from any forest land, or timber from alienable and disposable public lands, or
from private lands, without any authority under a license agreement, lease, license or permit, shall be guilty of qualified theft as
defined and punished under Articles 309 and 310 of the Revised Penal Code xxx. (Underscoring ours; Section 68, P.D.705
before its amendment by E.O.277 )
SECTION 1. Section 68 of Presidential Decree No.705, as amended, is hereby amended to read as follows:
Section 68. Cutting, gathering and/or collecting timber or other forest products without license. -Any person who shall cut,
gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or
from private land, without any authority, or possess timber or other forest products without the legal documents as required
under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the
Revised Penal Code xxx." (Underscoring ours; Section 1, E.O No. 277 amending Section 68, P.D. 705 as amended)
With the introduction of Executive Order No. 277 amending Section 68 of P.D. 705, the act of cutting, gathering, collecting,
removing, or possessing forest products without authority constitutes a distinct offense independent now from the crime of theft
under Articles 309 and 310 of the Revised Penal Code, but the penalty to be imposed is that provided for under Article 309 and
310 of the Revised Penal Code. This is clear from the language of Executive Order No. 277 when it eliminated the phrase
shall be guilty of qualified theft as defined and punished under Articles 309 and 310 of the Revised Penal Code and inserted
the words shall be punished with the penalties imposed under Article 309 and 310 of the Revised Penal Code . When the
statute is clear and explicit, there is hardly room for any extended court ratiocination or rationalization of the law.
[38]

From the foregoing disquisition, it is clear that a suit for replevin can not be sustained against the petitioners for the subject
truck taken and retained by them for administrative forfeiture proceedings in pursuant to Section 68-A of the P. D. 705, as
amended. Dismissal of the replevin suit for lack of cause of action in view of the private respondents failure to exhaust
administrative remedies should have been the proper course of action by the lower court instead of assuming jurisdiction over
the case and consequently issuing the writ ordering the return of the truck. Exhaustion of the remedies in the administrative
forum, being a condition precedent prior to ones recourse to the courts and more importantly, being an element of private
respondents right of action, is too significant to be waylaid by the lower court.
It is worth stressing at this point, that a suit for replevin is founded solely on the claim that the defendant wrongfully
withholds the property sought to be recovered. It lies to recover possession of personal chattels that are unlawfully
detained.
[39]
To detain is defined as to mean to hold or keep in custody,
[40]
and it has been held that there is tortuous taking
whenever there is an unlawful meddling with the property, or an exercise or claim of dominion over it, without any pretense of
authority or right; this, without manual seizing of the property is sufficient.
[41]
Under the Rules of Court, it is indispensable in
replevin proceedings, that the plaintiff must show by his own affidavit that he is entitled to the possession of property, that the
property is wrongfully detained by the defendant, alleging the cause of detention, that the same has not been taken for tax
assessment, or seized under execution, or attachment, or if so seized, that it is exempt from such seizure, and the actual value
of the property.
[42]
Private respondents miserably failed to convince this Court that a wrongful detention of the subject truck
obtains in the instant case. It should be noted that the truck was seized by the petitioners because it was transporting forest
products with out the required permit of the DENR in manifest contravention of Section 68 of P.D. 705 as amended by E.O
277. Section 68-A of P.D. 705, as amended, unquestionably warrants the confiscation as well as the disposition by the
Secretary of DENR or his duly authorized representatives of the conveyances used in violating the provision of forestry laws.
Evidently, the continued possession or detention of the truck by the petitioners for administrative forfeiture proceeding is legally
permissible, hence , no wrongful detention exists in the case at bar.
Moreover, the suit for replevin is never intended as a procedural tool to question the orders of confiscation and forfeiture
issued by the DENR in pursuance to the authority given under P.D.705, as amended. Section 8 of the said law is explicit that
actions taken by the Director of the Bureau of Forest Development concerning the enforcement of the provisions of the said law
are subject to review by the Secretary of DENR and that courts may not review the decisions of the Secretary except through a
special civil action for certiorari or prohibition. It reads :
SECTION 8 . REVIEW - All actions and decisions of the Director are subject to review, motu propio or upon appeal of any
person aggrieved thereby, by the Department Head whose decision shall be final and executory after the lapse of thirty (30)
days from the receipt of the aggrieved party of said decision, unless appealed to the President in accordance with Executive
Order No. 19, Series of 1966. The Decision of the Department Head may not be reviewed by the courts except through a special
civil action for certiorari or prohibition.
WHEREFORE, the Petition is GRANTED; the Decision of the respondent Court of Appeals dated October 16, 1991 and its
Resolution dated July 14, 1992 are hereby SET ASIDE AND REVERSED; the Restraining Order promulgated on September 27,
1993 is hereby made permanent; and the Secretary of DENR is directed to resolve the controversy with utmost dispatch.
SO ORDERED.
Regalado, (Chairman), Romero, Puno, and Mendoza, JJ., concur.