LONEY vs.

PEOPLE

482 SCRA 195

February 10, 2006

FACTS:

Marcopper had been storing tailings from its operations in a pit in Mt. Tapian, Marinduque. At the base of the pit ran a
drainage tunnel leading to the Boac and Makalupnit rivers. It appears that Marcopper had placed a concrete plug at
the tunnel’s end which caused the tailings to gushed out of or near the tunnel’s end. In a few days, the Mt. Tapian pit
had discharged millions of tons of tailings into the Boac and Makalupnit rivers. 

The DOJ separately charged petitioners with violation of Water Code of the Philippines (PD 1067), National Pollution
Control Decree of 1976 (PD 984),  Philippine Mining Act of 1995 (RA 7942), and Article 365 of the RPC for reckless
imprudence resulting in damage to property. 

Petitioners moved to quash the Informations on the following grounds: (1) the Informations were "duplicitous" as the
DOJ charged more than one offense for a single act.

ISSUE: 

Whether all the charges filed against petitioners except one should be quashed for duplicity of charges and only the
charge for Reckless Imprudence Resulting in Damage to Property should stand (NO) 

HELD: 

NO. There is no duplicity of charges in the present case. Duplicity of charges simply means a single complaint or
information charges more than one offense. A complaint or information must charge but one offense, except only in
those cases in which existing laws prescribe a single punishment for various offenses (Sec. 13, Rule 110). There is
duplicity (or multiplicity) of charges when a single Information charges more than one offense.

Here, however, the prosecution charged each petitioner with four offenses, with each Information charging only one
offense.

The filing of several charges is proper. A single act or incident might offend against two or more entirely distinct
and unrelated provisions of law thus justifying the prosecution of the accused for more than one offense. The only
limit to this rule is the Constitutional prohibition that no person shall be twice put in jeopardy of punishment for "the
same offense." Here, double jeopardy is not at issue because not all of its elements are present.

On petitioners’ claim that the charge for violation of Article 365 of the RPC "absorbs" the charges for violation of PD
1067, PD 984, and RA 7942, suffice it to say that a mala in se felony (such as Reckless Imprudence Resulting in
Damage to Property) cannot absorb mala prohibita crimes (such as those violating PD 1067, PD 984, and RA
7942). What makes the former a felony is criminal intent (dolo) or negligence (culpa); what makes the latter crimes
are the special laws enacting them.
Didipio Earth Savers Multipurpose Association et al vs DENR Sec Elisea Gozun et al
G.R. No. 157882

In 1987, Cory rolled out EO 279 w/c empowered DENR to stipulate with foreign companies when it comes to either
technical or financial large scale exploration or mining. In 1995, Ramos signed into law RA 7942 or the Philippine
Mining Act. In 1994, Ramos already signed an FTAA with Arimco Mining Co, an Australian company. The FTAA
authorized AMC (later CAMC) to explore 37,000 ha of land in Quirino and N. Vizcaya including Brgy Didipio. After the
passage of the law, DENR rolled out its implementing RRs. Didipio petitioned to have the law and the RR to be
annulled as it is unconstitutional and it constitutes unlawful taking of property. In seeking to nullify Rep. Act No. 7942
and its implementing rules DAO 96-40 as unconstitutional, petitioners set their sight on Section 76 of Rep. Act No.
7942 and Section 107 of DAO 96-40 which they claim allow the unlawful and unjust “taking” of private property for
private purpose in contradiction with Section 9, Article III of the 1987 Constitution mandating that private property
shall not be taken except for public use and the corresponding payment of just compensation. They assert that public
respondent DENR, through the Mining Act and its Implementing Rules and Regulations, cannot, on its own, permit
entry into a private property and allow taking of land without payment of just compensation.

Traversing petitioners’ assertion, public respondents argue that Section 76 is not a taking provision but a valid
exercise of the police power and by virtue of which, the state may prescribe regulations to promote the health,
morals, peace, education, good order, safety and general welfare of the people.  This government regulation involves
the adjustment of rights for the public good and that this adjustment curtails some potential for the use or economic
exploitation of private property.  Public respondents concluded that “to require compensation in all such
circumstances would compel the government to regulate by purchase.”

ISSUE: Whether or not RA 7942 and the DENR RRs are valid.

HELD: The SC ruled against Didipio. The SC noted the requisites of eminent domain. They are:

(1)  the expropriator must enter a private property;

(2)  the entry must be for more than a momentary period.
(3)  the entry must be under warrant or color of legal authority;
(4)  the property must be devoted to public use or otherwise informally appropriated or injuriously affected;
(5)  the utilization of the property for public use must be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property.

In the case at bar, Didipio failed to show that the law is invalid. Indeed there is taking involved but it is not w/o just
compensation. Sec 76 of RA 7942 provides for just compensation as well as section 107 of the DENR RR. To wit,

Section 76. xxx Provided, that any damage to the property of the surface owner, occupant, or concessionaire as a
consequence of such operations shall be properly compensated as may be provided for in the implementing rules
and regulations.

Section 107. Compensation of the Surface Owner and Occupant- Any damage done to the property of the surface
owners, occupant, or concessionaire thereof as a consequence of the mining operations or as a result of the
construction or installation of the infrastructure mentioned in 104 above shall be properly and justly compensated.

Further, mining is a public policy and the government can invoke eminent domain to exercise entry, acquisition and
use of private lands.
BENGUET CORPORATION v DENR-MAB 
G.R. No. 163101 
February 13, 2008  

FACTS: 

On June 1, 1987, Benguet and J.G. Realty entered into a RAWOP, wherein J.G. Realty was acknowledged as the
owner of four mining claims respectively named as Bonito-I, Bonito-II, Bonito-III, and Bonito-IV, with a total area of
288.8656 hectares, situated in Barangay Luklukam, Sitio Bagong Bayan, Municipality of Jose Panganiban,
Camarines Norte.  

Thus, on August 9, 1989, the Executive Vice-President of Benguet, Antonio N. Tachuling, issued a letter informing
J.G. Realty of its intention to develop the mining claims. However, on February 9, 1999, J.G. Realty, through its
President, Johnny L. Tan, then sent a letter to the President of Benguet informing the latter that it was terminating the
RAWOP  on the following grounds:   

a.      The fact that your company has failed to perform the obligations set forth in the RAWOP, i.e., to
undertake development works within 2 years from the execution of the Agreement;  b.      Violation of the Contract by
allowing high graders to operate on our claim.  c.      No stipulation was provided with respect to the term limit of the
RAWOP.  d.      Non-payment of the royalties thereon as provided in the RAWOP.  

On June 7, 2000, J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of the RAWOP with the Legaspi
City POA, Region V, docketed as DENR Case No. 2000-01 and entitled J.G. Realty v. Benguet.  

DECISION OF LOWER COURTS: *POA: declared the RAWOP cancelled. *MAB: affirmed POA.  

ISSUES: (1) Should the controversy have first been submitted to arbitration before the POA took cognizance of the
case?;  (2) Was the cancellation of the RAWOP supported by evidence?; and  (3) Did the cancellation of the RAWOP
amount to unjust enrichment of J.G. Realty at the expense of Benguet?  

HELD: On correctness of appeal:  Petitioner having failed to properly appeal to the CA under Rule 43, the decision of
the MAB has become final and executory. On this ground alone, the instant petition must be denied.  

(1) YES, the case should have first been brought to voluntary arbitration before the POA.  

Secs. 11.01 and 11.02 of the RAWOP pertinently provide:   

11.01 Arbitration              

Any disputes, differences or disagreements between BENGUET and the OWNER with reference to anything
whatsoever pertaining to this Agreement that cannot be amicably settled by them shall not be cause of any action of
any kind whatsoever in any court or administrative agency but shall, upon notice of one party to the other, be referred
to a Board of Arbitrators consisting of three (3) members, one to be selected by BENGUET, another to be selected by
the OWNER and the third to be selected by the aforementioned two arbitrators so appointed.              

x x x x   

11.02  Court Action              

No action shall be instituted in court as to any matter in dispute as hereinabove stated, except to enforce the decision
of the majority of the Arbitrators   

A contractual stipulation that requires prior resort to voluntary arbitration before the parties can go directly to court is
not illegal and is in fact promoted by the State.  

To reiterate, availment of voluntary arbitration before resort is made to the courts or quasi-judicial agencies of the
government is a valid contractual stipulation that must be adhered to by the parties.   
In other words, in the event a case that should properly be the subject of voluntary arbitration is erroneously filed with
the courts or quasi-judicial agencies, on motion of the defendant, the court or quasi-judicial agency shall determine
whether such contractual provision for arbitration is sufficient and effective. If in affirmative, the court or quasi-judicial
agency shall then order the enforcement of said provision.  

In sum, on the issue of whether POA should have referred the case to voluntary arbitration, we find that, indeed, POA
has no jurisdiction over the dispute which is governed by RA 876, the arbitration law.  

HOWEVER, ESTOPPEL APPLIES. the Court rules that the jurisdiction of POA and that of MAB can no longer be
questioned by Benguet at this late hour. What Benguet should have done was to immediately challenge the POA's
jurisdiction by a special civil action for certiorari when POA ruled that it has jurisdiction over the dispute.  To redo the
proceedings fully participated in by the parties after the lapse of seven years from date of institution of the original
action with the POA would be anathema to the speedy and efficient administration of justice.  

(2) The cancellation of the RAWOP was supported by evidence. 

(3) There is no unjust enrichment in the instant case. There is no unjust enrichment when the person who will benefit
has a valid claim to such benefit.  

The principle of unjust enrichment under Article 22 requires two conditions:  (1) that a person is benefited without a
valid basis or justification, and  (2) that such benefit is derived at another's expense or damage.  

Clearly, there is no unjust enrichment in the instant case as the cancellation of the RAWOP, which left Benguet
without any legal right to participate in further developing the mining claims, was brought about by its violation of the
RAWOP. Hence, Benguet has no one to blame but itself for its predicament.  

OBITER DICTA: 
(1) Difference between compulsory & voluntary arbitration --  

In Reformist Union of R.B. Liner, Inc. vs. NLRC, compulsory arbitration has been defined both as “the process of
settlement of labor disputes by a government agency which has the authority to investigate and to make an award
which is binding on all the parties, and as a mode of arbitration where the parties are compelled to accept the
resolution of their dispute through arbitration by a third party.” While a voluntary arbitrator is not part of the
governmental unit or labor department's personnel, said arbitrator renders arbitration services provided for under
labor laws.  

There is a clear distinction between compulsory and voluntary arbitration. The arbitration provided by the POA is
compulsory, while the nature of the arbitration provision in the RAWOP is voluntary, not involving any government
agency. 
LEPANTO CONSOLIDATED MINING CO. v. WMC RESOURCES INT'L. PTY. LTD., GR NO. 162331, 2006-11-20

Facts:
the Philippine Government and WMC Philippines, the local wholly-owned subsidiary of WMC Resources International
Pty. Ltd. (WMC Resources) executed a Financial and Technical Assistance Agreement, denominated as the Columbio
FTAA... for... the purpose of large scale exploration, development, and commercial exploration of possible mineral
resources in an initial contract area of 99,387 hectares located in the provinces of South Cotabato, Sultan Kudarat,
Davao del Sur, and North Cotabato in accordance with Executive
Order No. 279 and Department Administrative Order No. 63, Series of 1991.

WMC Resources subsequently divested itself of its rights and interests in the Columbio FTAA, and on 12 July 2000
executed a Sale and Purchase Agreement with petitioner Lepanto over its entire shareholdings in WMC Philippines,
subject to the exercise of the Tampakan Companies'... exercise of their right of first refusal to purchase the subject
shares

In an Agreement dated 6 October 2000, however, the Tampakan Companies sought to exercise its right of first
refusal. Thus, in a letter dated 13 October 2000, petitioner assailed the Tampakan Companies' exercise of its right of
first refusal,... on 10 January 2001,... WMC Resources and the Tampakan Companies executed another Sale and
Purchase Agreement, where Sagittarius Mines, Inc. was designated assignee and corporate vehicle which would
acquire the shareholdings and undertake the Columbio FTAA activities.

After due consideration and evaluation of the financial and technical qualifications of Sagittarius Mines, Inc., the
DENR Secretary approved the transfer of the Columbio FTAA from WMC Philippines to Sagittarius Mines, Inc. in the
assailed Order

Aggrieved by the transfer of the Columbio FTAA in favor of Sagittarius Mines, Inc., petitioner filed a Petition for
Review of the Order of the DENR Secretary with the Office of the President

Issues:
the propriety of the application to the Columbio FTAA of Republic Act No. 7942 or the Philippine Mining Act of 1995,
particularly Section 40 thereof requiring the approval of the President of the assignment or transfer of... financial or
technical assistance agreements

Ruling:
Columbio FTAA was entered into by the Philippine Government and WMC Philippines on 22 March 1995,
undoubtedly before the Philippine Mining Act of 1995 took effect on 14 April 1995.
it... is undisputed that said FTAA was granted in accordance with Executive Order No. 279 and Department
Administrative Order No. 63, Series of 1991, which does not contain any similar condition on the transfer or
assignment of financial or technical assistance agreements.

what petitioner would want this Court to espouse is the retroactive application of the Philippine Mining Act of 1995 to
the Columbio FTAA, a valid agreement concluded prior to the naissance of said piece of legislation.

This posture of petitioner would clearly contradict the established legal doctrine that statutes are to be construed as
having only a prospective operation unless the contrary is expressly stated or necessarily implied from the language
used in the law.

Article 4 of the Civil Code provides that: "Laws shall not have a retroactive effect unless therein otherwise provided."
In the case at bar, there is an absence of either an express declaration or an implication in the Philippine Mining Act
of 1995 that the provisions of said law shall be made to apply retroactively, therefore, any section of said law must be
made to apply only prospectively,...

Be that as it may, assuming for the sake of argument that We are to apply the Philippine Mining Act of 1995
retrospectively to the Columbio FTAA, the lack of presidential approval will not be fatal as to render the transfer
illegal, especially since, as in the instant case, the... alleged lack of presidential approval has been remedied when
petitioner appealed the matter to the Office of the President which approved the Order of the DENR Secretary... in the
La Bugal-B'Laan Tribal Association, Inc. v. Ramos[15] case, involving the same FTAA subject of the instant case:...
when the transferee of an FTAA is another foreign corporation, there is a logical application of the requirement of prior
approval by the President of the Republic and notification to Congress in the event of assignment or transfer of an
FTAA

On the other hand, when the transferee of the FTAA happens to be a Filipino corporation, the need for such
safeguard is not critical

It is engrained in jurisprudence that the constitutional prohibition on the impairment of the obligation of contract does
not prohibit every change in existing laws... and to fall within the prohibition, the change must not only impair the
obligation of... the existing contract, but the impairment must be substantial

Section 40 of the Philippine Mining Act of 1995 requiring the approval of the President with respect to assignment or
transfer of FTAAs, if made applicable retroactively to the Columbio FTAA, would be tantamount to an... impairment of
the obligations under said contract as it would effectively restrict the right of the parties thereto to assign or transfer
their interests in the said FTAA.

imposing a new condition apart from those already contained in the agreement, before the parties to the Columbio
FTAA may assign or transfer its rights and interest in the said agreement, Section 40 of the Philippine Mining Act of
1995, if made to apply to the Columbio FTAA,... will effectively modify the terms of the original contract and thus
impair the obligations of the parties

WHEREFORE, premises considered, the instant petition is hereby DENIED

Principles:
It is engrained in jurisprudence that the constitutional prohibition on the impairment of the obligation of contract does
not prohibit every change in existing laws... and to fall within the prohibition, the change must not only impair the
obligation of... the existing contract, but the impairment must be substantial... a... law which changes the terms of a
legal contract between parties, either in the time or mode of performance, or imposes new conditions, or dispenses
with those expressed, or authorizes for its satisfaction something different from that provided in its terms, is law which
impairs... the obligation of a contract and is therefore null and void.
LA BUGAL B’LAAN TRIBAL ASSOCIATION INC., et. al. v. V. O. RAMOS, Secretary Department of Environment
and Natural Resources; H. RAMOS, Director, Mines and Geosciences Bureau (MGB-DENR); R. TORRES,
Executive Secretary; and WMC (PHILIPPINES) INC. 
The constitutional provision allowing the President to enter into FTAA is a exception to the rule that participation in the
nation’s natural resources is reserved exclusively to Filipinos. Provision must be construed strictly against their
enjoyment by non-Filipinos.

RA 7942 (The Philippine Mining Act) took effect on April 9, 1995. Before the effectivity of RA 7942, or on March 30,
1995, the President signed a Financial and Technical Assistance Agreement (FTAA) with WMCP, a corporation
organized under Philippine laws, covering close to 100,000 hectares of land in South Cotabato, Sultan Kudarat,
Davao del Sur and North Cotabato. On August 15, 1995, the Environment Secretary Victor Ramos issued DENR
Administrative Order 95-23, which was later repealed by DENR Administrative Order 96-40, adopted on December
20, 1996.

Petitioners prayed that RA 7942, its implementing rules, and the FTAA between the government and WMCP be
declared unconstitutional on ground that they allow fully foreign owned corporations like WMCP to exploit, explore
and develop Philippine mineral resources in contravention of Article XII Section 2 paragraphs 2 and 4 of the Charter.
In January 2001, WMC – a publicly listed Australian mining and exploration company – sold its whole stake in WMCP
to Sagittarius Mines, 60% of which is owned by Filipinos while 40% of which is owned by Indophil Resources, an
Australian company. DENR approved the transfer and registration of the FTAA in Sagittarius‘ name but Lepanto
Consolidated assailed the same. The latter case is still pending before the Court of Appeals.

EO 279, issued by former President Aquino on July 25, 1987, authorizes the DENR to accept, consider and evaluate
proposals from foreign owned corporations or foreign investors for contracts or agreements involving wither technical
or financial assistance for large scale exploration, development and utilization of minerals which upon appropriate
recommendation of the (DENR) Secretary, the President may execute with the foreign proponent. WMCP likewise
contended that the annulment of the FTAA would violate a treaty between the Philippines and Australia which
provides for the protection of Australian investments.

ISSUES:
1. Whether or not the Philippine Mining Act is unconstitutional for allowing fully foreign-owned corporations to exploit
the Philippine mineral resources. 2. Whether or not the FTAA between the government and WMCP is a ―service
contract that permits fully foreign owned companies to exploit the Philippine mineral resources.

HELD:
First Issue: RA 7942 is Unconstitutional
RA 7942 or the Philippine Mining Act of 1995 is unconstitutional for permitting fully foreign owned corporations to
exploit the Philippine natural resources.

Article XII Section 2 of the 1987 Constitution retained the Regalian Doctrine which states that ―All lands of the public
domain, waters, minerals, coal, petroleum, and other 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. The same section also states that, ―the exploration and development and utilization of natural resources shall
be under the full control and supervision of the State.

Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitution 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 the public domain through license, concession or lease is no
longer allowed under the 1987 Constitution.

Under the concession system, the concessionaire makes a direct equity investment for the purpose of exploiting a
particular natural resource within a given area. The concession amounts to complete control by the concessionaire
over the country‘s natural resource, for it is given exclusive and plenary rights to exploit a particular resource at the
point of extraction.

The 1987 Constitution, moreover, has deleted the phrase ―management or other forms of assistance in the 1973
Charter. The present Constitution now allows only ―technical and financial assistance. The management and the
operation of the mining activities by foreign contractors, the primary feature of the service contracts was precisely the
evil the drafters of the 1987 Constitution sought to avoid.

The constitutional provision allowing the President to enter into FTAAs is an exception to the rule that participation in
the nation‘s natural resources is reserved exclusively to Filipinos. Accordingly, such provision must be construed
strictly against their enjoyment by non-Filipinos. Therefore, RA 7942 is invalid insofar as the said act authorizes
service contracts. Although the statute employs the phrase ―financial and technical agreements in accordance with
the 1987 Constitution, its pertinent provisions actually treat these agreements as service contracts that grant
beneficial ownership to foreign contractors contrary to the fundamental law.

The underlying assumption in the provisions of the law is that the foreign contractor manages the mineral resources
just like the foreign contractor in a service contract. By allowing foreign contractors to manage or operate all the
aspects of the mining operation, RA 7942 has, in effect, conveyed beneficial ownership over the nation‘s mineral
resources to these contractors, leaving the State with nothing but bare title thereto.

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.

When parts of a 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, then if some parts
are unconstitutional, all provisions that are thus dependent, conditional or connected, must fail with them.
Under Article XII Section 2 of the 1987 Charter, foreign owned corporations are limited only to merely technical or
financial assistance to the State for large scale exploration, development and utilization of minerals, petroleum and
other mineral oils.

Second Issue: RP Government-WMCP FTAA is a Service Contract

The FTAA between he WMCP and the Philippine government is likewise unconstitutional since the agreement itself is
a service contract.

Section 1.3 of the FTAA grants WMCP a fully foreign owned corporation, the exclusive right to explore, exploit, utilize
and dispose of all minerals and by-products that may be produced from the contract area. Section 1.2 of the same
agreement provides that EMCP shall provide all financing, technology, management, and personnel necessary for the
Mining Operations.

These contractual stipulations and related provisions in the FTAA 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.