Asaphil Construction and Development Corp. vs Vicente Tuason, Jr., Induplex Inc.

and Mines Adjudication Board

G.R. No. 134030 April 25, 2006

Facts:

Tuazon entered into a Contract to Sell (1st contract) with Induplex wheren Induplex agreed to buy all
the Perlite Ore that can be found and mined in Tuason's mining claim and in return, Induplex will assist
Tuason to secure his rights over the mining claim. Then, Tuason executed an Agreement to Operate
Mining Claims (2nd Contract) in favor of Asaphil. Tuason thereafter filed with the Bureau of Mines-DENR
against Induplex and Asaphil for the nullity of the two contracts alleging that the stockholders of
Induplex created Ibalon Mineral Resources Inc. and then extracted in Ibalon's mining claim and
thereafter entered into a joint Venture with Grefco, Inc. which would violate their agreement.

Issue:

Whether or not DENR has jurisdiction over the case.

Ruling:

No, Section 7 of P.D. 1281 provides:

"Section 7. In addition to its regulatory and adjudicative functions over companies, partnerships or
persons engaged in mining exploration, development and exploitation, development and exploitation,
the Bureau of Mines shall have original and exclusive jurisdiction to hear and decide cases involving:

(a) a mining property subject of different agreements entered into by the claim holder thereof with
several mining operators;

(b) complaints from claimowners that the mining property subject of an operating agreement has not
been placed into actual operations within the period stipulated therein; and

(c) cancellation and/or enforcement of mining contracts due to the refusal of the claimowner/operator
to abide by the terms and conditions thereof."
Tuason's case based on its facts is not a mining dispute. the 2nd contract although a mining contract
does not make a mining dispute, the resolution of its nullity is not based on Asaphil's violation of the
conditions but due to Induplex's alleged violation in entering into a joint venture with Grefco Ltd. which
is a judicial question. The nullity shall be determined by regular courts. "A judicial question is raised
when the determination of the question involves the exercise of judicial function, which involves the
determination of what the law is all about and what are the legal rights of the parties"

Didipio Earth Savers Multipurpose Association et al vs DENR Sec Elisea

Gozun et al
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

Republic vs. RosemoorRepublic of the Philippines vs. Rosemoor Mining and

DevelopmentCorporation, et al.G.R. No. 149927 March 30, 2004
Panganiban, J.:

Facts:

Petitioner Rosemoor Mining and Development Corporation after having beengranted permission to
prospect for marble deposits in the mountains of Biak-na-Bato, San Miguel, Bulacan, succeeded
in discovering marble deposits of high qualityand in commercial quantities in Mount Mabio which forms
part of the Biak-na-Batomountain range. The petitioner then applied with the Bureau of Mines, now
Mines and GeosciencesBureau, for the issuance of the corresponding license to exploit said
marbledeposits.License No. 33 was issued by the Bureau of Mines in favor of the herein
petitioners.Shortly thereafter, Respondent Ernesto Maceda cancelled the petitioners licensestating that
their license had illegally been issued, because it violated Section 69 of PD 463; and that there was no
more public interest served by the continuedexistence or renewal of the license. The latter reason was
confirmed by thelanguage of Proclamation No. 84. According to this law, public interest would beserved
by reverting the parcel of land that was excluded by Proclamation No. 2204to the former status of
that land as part of the Biak-na-Bato national park.

Issue:

Whether or not Presidential Proclamation No. 84 is valid.

Held:

Yes. We cannot sustain the argument that Proclamation No. 84 is a bill of attainder; that is, a legislative
act which inflicts punishment without judicial trial.Its declaration that QLP No. 33 is a patent nullity is
certainly not a declaration of guilt. Neither is the cancellation of the license a punishment within the
purview of the constitutional proscription against bills of attainder. Too, there is no merit in the
argument that the proclamation is an ex post facto law.It is settled that an ex post facto law is limited in
its scope only to matters criminalin nature. Proclamation 84, which merely restored the area excluded
from the Biak-na-Bato national park by canceling respondents license, is clearly not penal
incharacter.Also at the time President Aquino issued Proclamation No. 84 on March 9, 1987, shewas still
validly exercising legislative powers under the Provisional Constitution of 1986. Section 1 of Article II of
Proclamation No. 3, which promulgated theProvisional Constitution, granted her legislative power
until a legislature is electedand convened under a new Constitution. The grant of such power is
also explicitlyrecognized and provided for in Section 6 of Article XVII of the 1987 Constitution.

LA BUGAL BLAAN TRIBAL ASSOCIATION INC., et. al. v. VICTOR O. RAMOS, Secretary
Department of Environment and Natural Resources; HORACIO RAMOS, Director, Mines and
Geosciences Bureau (MGB-DENR); RUBEN TORRES, Executive Secretary; and WMC
(PHILIPPINES) INC.
G.R. No. 127882, 27 January 2004, En Banc (Carpio-Morales, J.)

The constitutional provision allowing the President to enter into FTAA is a exception to the
rule that participation in the nations natural resources is reserved exclusively to Filipinos.
Provision must be construed strictly against their enjoyment by non-Filipinos.

FACTS: 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 countrys 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 nations 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 nations 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.

Dec 1 2004

Facts: The Petition for Prohibition and Mandamus before the Court challenges the
constitutionality of (1) Republic Act 7942 (The Philippine Mining Act of 1995); (2) its
Implementing Rules and Regulations (DENR Administrative Order [DAO] 96-40); and (3)
the Financial and Technical Assistance Agreement (FTAA) dated 30 March 1995, executed
by the government with Western Mining Corporation (Philippines), Inc. (WMCP).
On 27 January 2004, the Court en banc promulgated its Decision, granting the Petition and
declaring the unconstitutionality of certain provisions of RA 7942, DAO 96-40, as well as of
the entire FTAA executed between the government and WMCP, mainly on the finding that
FTAAs are service contracts prohibited by the 1987 Constitution. The Decision struck down
the subject FTAA for being similar to service contracts which, though permitted under the
1973 Constitution, were subsequently denounced for being antithetical to the principle of
sovereignty over our natural resources, because they allowed foreign control over the
exploitation of our natural resources, to the prejudice of the Filipino nation.
Pursuant to Section 2 Article XII of the Constitution it effectively banned such service
contracts. Subsequently, 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 the WMC (Philippines) Inc. filed separate
Motions for Reconsideration.

Issue: Whether or not the Court has a role in the exercise of the power of control over the
exploration, development and utilization (EDU) of our natural resources?
Decision: In contrast to express mandate of the President and Congress in the EDU of
natural resources, Article XII of the Constitution is silent on the role of the judiciary.
However, should the President and/or Congress gravely abuse their discretion in this regard,
the courts may exercise their residual duty under Article VIII. Under the doctrine of
separation of powers and due respect for co-equal and coordinate branches of government,
the Court must restrain itself from intruding into policy matters and must allow the
President and Congress maximum discretion in using the resources of our country and in
securing the assistance of foreign groups to eradicate poverty and answer employment
opportunities in the country.
The Court believes that it is not unconstitutional to allow a wide degree of discretion to the
Chief Executive in order to preserve and enhance our countrys competitiveness in world
markets. On the basis of this control standard, the Court upholds the constitutionality of the
Philippine Mining Law, its Implementing Rules and Regulations insofar as they relate to
financial and technical agreements as well as the subject FTAA.

LEPANTO CONSOLIDATED MINING COMPANY, petitioner, vs. WMC

RESOURCES INTERNATIONAL PTY. LTD., WMC (PHILIPPINES),
INC., SOUTHCOT MINING CORPORATION, TAMPAKAN MINING
CORPORATION and SAGITTARIUS MINES, INC., respondents.

DECISION
CARPIO-MORALES, J.:

Elevated to this Court are twin petitions for review on certiorari under Rule
45 of the Rules of Court which involve substantially the same parties and the
same subject matter, hence, have been consolidated.
The first case, G. R. No. 153885, is an appeal from the Court of
Appeals Decision of February 22, 2002 in CA-G.R. Sp No. 65496, WMC
Resources Intl. Pty. Ltd., and WMC (Philippines), Inc. v. Hon. Francisco B.
Ibay, in his capacity as Presiding Judge, Regional Trial Court of Makati City,
Branch 135 and Lepanto Consolidated Mining Company, and Resolution of
June 6, 2002 denying reconsideration of said decision.
The second case, G. R. No. 156214, is an appeal from the Regional Trial
Court (RTC) of Makati City, Branch 135 Orders dated September 9, 2002 and
November 22, 2002 dismissing Civil Case No. 01-087, Lepanto Consolidated
Mining Company v. WMC Resources Intl. Pty. Ltd., and WMC (Philippines),
Inc., Southcot Mining Corporation, Tampakan Mining Corporation and
Sagittarius Mines, Inc.
The antecedents of the cases are as follows:
In a contract denominated as Tampakan Option Agreement dated April 25,
1991, WMC Resources International Pty. Ltd. (WMC), a wholly owned
[1]

subsidiary of Western Mining Corporation Holdings Limited, a publicly listed

major Australian mining and exploration company, through its local subsidiary
Western Mining Corporation (Philippines), Inc. (WMCP), a corporation
organized under Philippine laws, acquired the mining claims in Tampakan,
South Cotabato of Southcot Mining Corporation, Tampakan Mining
Corporation, and Sagittarius Mines, Inc. (Tampakan Companies).
The Tampakan Option Agreement was amended by subsequent
agreements including Amendatory Agreement dated July 15, 1994 under [2]

which the Tampakan Companies were given preferential option to acquire the
shares of WMC in WMCP and Hillcrest Inc. in the event it (WMC) decided to
sell them.
On March 22, 1995, then President Ramos on behalf of the Republic of
the Philippines, entered into a Financial and Technical Assistance Agreement
(FTAA) with WMCP for the large scale exploration, development and
[3]

commercial exploitation of mineral resources in 99,387 hectares of lands in

South Cotabato, Sultan Kudarat, Davao Del Sur and North Kotabato.
On July 12, 2000, WMC, by a Sale and Purchase Agreement, sold to [4]

herein petitioner Lepanto Consolidated Mining Company its shares of stock in

WMCP and Hillcrest, Inc. for $10,000,000.00. The sale was subject to certain
conditions including the Tampakan Companies failure to accept WMCPs offer
to sell the same shares, under the companies right of first refusal provided for
in the Tampakan Option Agreement and its amendments.
By letter of July 13, 2000, WMCP tendered to the Tampakan Companies
[5]

its offer for the latter to purchase WMCs shares of stock in it (WMCP) and
Hillcrest, Inc.
 In the meantime or by letter of August 28, 2000, petitioner requested the
[6]

approval by the Department of Environment and Natural Resources (DENR)

Secretary of the transfer to and acquisition by it of WMCPs FTAA on account
of its (petitioners) purchase of WMCs shares of stock in WMCP, which
approval of transfer was required in the FTAA agreement forged between then
President Ramos and WMCP.
As the Tampakan Companies later availed of their preferential right under
the Tampakan Option Agreement, a Sale and Purchase Agreement was
[7] [8]

concluded on October 6, 2000 between WMC and the Tampakan Companies

over the same shares of stock priorly purchased by petitioner.
On October 12, 2000, the Tampakan Companies notified the Director of
the Mines and Geosciences Bureau (MGB) of the DENR of the exercise of
their preemptive right to buy WMCs equity in WMCP and Hillcrest, Inc.,
seeking at the same time the MGB Directors formal expression of support for
the stock transfer transaction.
[9]

Petitioner, getting wind of the Sale and Purchase Agreement between

WMC and Tampakan Companies, wrote, by letter of October 13, 2000, the [10]

DENR Secretary about the invalidity of said agreement and reiterated its
request for the approval of its acquisition of the disputed shares. The MGB
accordingly informed the Tampakan Companies of petitioners position on the
matter and required the submission of a comment thereto. [11]

WMCP and WMC, respondents herein, by letters to the MGB, proffered

their side. Several other letters or position papers were filed by the parties
with the MGB or the DENR.
The Tampakan Companies later opted to acquire the disputed shares of
stock through Sagittarius Mines, Inc. WMC and Tampakan Companies thus
entered into a Sale and Purchase Agreement dated January 10, 2001 which[12]

paved the way for the forging of two deeds of absolute sale of the shares of
stock, those of WMC in WMCP and in Hillcrest, Inc., both in favor of
Sagittarius Mines, Inc.
[13]

On January 22, 2001, petitioner filed before the Makati RTC a complaint
against herein respondents WMC, WMCP, and the three corporations
comprising the Tampakan Companies, for specific performance, annulment of
contracts, contractual interference and injunction (Civil Case No. 01-087). The
suit principally sought the enforcement of the July 12, 2000 Sale and
Purchase Agreement between petitioner and WMC and the consequent
nullification of the latters agreements with the Tampakan Companies.
 Therein defendants-herein respondents filed before the Makati RTC a
Joint Motion to Dismiss petitioners complaint on the ground that the court
[14]

was without jurisdiction over the subject matter of the case; that petitioners
complaint had no cause of action; that petitioner was guilty of forum shopping
due to the pendency of its claim with the MGB; and that petitioner also failed
to exhaust administrative remedies.
Branch 135 of the Makati RTC denied herein respondents Motion to
Dismiss as it did respondents Motion for Reconsideration. Hence, [15]

respondents lodged on July 6, 2001 a special civil action for certiorari and
prohibition (CA-G.R. SP No. 65496) with the Court of Appeals which was
[16]

granted by February 22, 2002 Decision, the dispositive part of which reads:
[17]

WHEREFORE, the petition for certiorari is hereby GRANTED. The assailed Order
dated March 21, 2001 and May 2, 2001 are hereby declared null and void and SET
ASIDE. Respondent court is directed to desist from proceeding with Civil Case No.
01-087 and to dismiss the same on ground of forum shopping committed by private
respondent. (Underscoring supplied)

Petitioners motion for reconsideration of the appellate courts judgment

was denied by Resolution of June 6, 2002, hence, it filed on June 28, 2002 a
[18]

petition for review on certiorari before this Court (G.R. No. 153885), the first
[19]

case subject of the present decision.

In the meantime, Branch 135 of the Makati RTC, upon receipt of the
above-said February 22, 2002 Decision of the Court of Appeals, dismissed
petitioners complaint-Civil Case No. 01-087 by Order of March 1, 2002. On [20]

petitioners motion, the trial court, by Order of April 23, 2002, suspended the
[21]

effectivity of its March 1, 2002 Order in light of the pendency of petitioners

motion for reconsideration of the decision of the Court of Appeals.
The appellate court subsequently, as reflected above, denied petitioners
motion for reconsideration by Resolution of June 6, 2002 following which the
trial court issued its Order of September 9, 2002 dismissing Civil Case No.
[22]

02-087, it holding that petitioners appeal from the appellate court decision
before this Court (G.R. No. 153885, the first case) does not interrupt the
course of said civil case unless a temporary restraining order or a writ of
preliminary injunction is issued against it, citing Section 7 of Rule 65, Rules of
Court.
Petitioner filed a motion for reconsideration of the September 9, 2002
Order of the trial court which it denied by Order of November 22, 2002, it [23]

holding that the dismissal of petitioners complaint was merely in compliance

with the Court of Appeals ruling and is deemed final until set aside by the
Supreme Court. From these Orders, petitioner appealed to this Court by
petition for review on certiorari (G.R. No. 156214), the second case subject
[24]

of the present decision.

Petitioners appeal in the first case is premised on the following grounds:

I. THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT

PETITIONER WAS GUILTY OF FORUM SHOPPING. THE
ELEMENTS OF FORUM SHOPPING ARE NOT PRESENT IN THE
CASE AT BAR.

II. THE COURT OF APPEALS GRAVELY ERRED IN NOT DISMISSING

THE PETITION FOR CERTIORARI FOR LACK OF PROPER
VERIFICATION.

Petitioner claims that the issues/matters raised before the RTC of Makati
and those before the MGB are not dependent on each other. It argues that in
bringing its July 12, 2000 Sale and Purchase Agreement with WMC to the
knowledge of the DENR, it was merely requesting for the consent of the
Secretary to the transfer of WMCPs FTAA to it, it not having raised any
contentious issues before said office; and that the request merely called for
MGB to review the respective financial and technical qualifications of both
petitioner and respondent Tampakan Companies to determine who between
them is fit to become the transferee of the FTAA.
With respect to the case before the RTC, petitioner asserts that what are
principally raised therein are the non-performance by respondent WMC of its
obligations to petitioner under their contract of sale and the validity of WMCs
subsequent agreements with the Tampakan Companies.
Petitioner adds that the MGB is not being made to exercise quasi-judicial
power or function but only recommendatory or administrative functions in
contrast to what the RTC is being called upon to do.
Petitioner thus concludes that there could be no forum shopping in light of
the difference in the nature of the proceedings before the two fora.
Finally, petitioner underscores that the petition brought by respondents
before the Court of Appeals should have been dismissed for not having been
properly verified by WMC.
Petitioners ratiocinations do not persuade. It is clear from the proceedings
before the DENR, specifically before the MGB, that the issue of which
between petitioner and respondent Tampakan Companies possesses the
better right to acquire the mining rights, claims and interests held by WMC
through its local subsidiary WMCP, especially with respect to the 1995 FTAA,
had been brought to the fore. The MGB cannot just assess the qualifications
of petitioner and of the Tampakan Companies as potential transferee or
assignee of the rights and obligations of WMCP under the FTAA without also
resolving the issue of which has priority of right to become one.
True, the questioned agreements of sale between petitioner and WMC on
one hand and between WMC and the Tampakan Companies on the other
pertain to transfer of shares of stock from one entity to another. But said
shares of stock represent ownership of mining rights or interest in mining
agreements. Hence, the power of the MGB to rule on the validity of the
questioned agreements of sale, which was raised by petitioner before the
DENR, is inextricably linked to the very nature of such agreements over which
the MGB has jurisdiction under the law. Unavoidably, there is identity of reliefs
that petitioner seeks from both the MGB and the RTC.
Forum shopping exists when both actions involve the same transactions,
same essential facts and circumstances and raise identical causes of actions,
subject matter, and issues. Such elements are evidently present in both the
[25]

proceedings before the MGB and before the trial court.The case instituted with
the RTC was thus correctly ordered dismissed by the appellate court on the
ground of forum shopping. Besides, not only did petitioner commit forum
shopping but it also failed to exhaust administrative remedies by opting to go
ahead in seeking reliefs from the court even while those same reliefs were
appropriately awaiting resolution by the MGB.
As for petitioners assailing of respondents petition for certiorari before the
Court of Appeals for not being properly verified by WMC, the same fails. The
verification and certification against forum shopping of the petition was signed
by a duly authorized officer of WMC in the person of Terence Gardner,
Chairman of the Board and President of WMCP, who was the signing
representative of WMC in the July 12, 2000 Sale and Purchase Agreement
with petitioner.
With respect to the second case (G.R. No. 156214), this Court sets aside
the appealed Orders of the trial court dismissing Civil Case No. 01-087. The
orders are patently erroneous for the appellate courts decision directing the
dismissal of the said civil case had not yet become final and executory, the
appeal therefrom by petitioner to this Court-subject of the herein first case
having been duly perfected.
WHEREFORE, judgment is hereby rendered in 1) G.R. No.
153885 AFFIRMING the assailed Decision of the Court of Appeals, and 2)
G.R. No. 156214 SETTING ASIDE the assailed Orders of Branch 135 of the
Makati Regional Trial Court.
SO ORDERED.
BENGUET CORPORATION v DENR-MAB (Natural Resources)
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.

xxxx

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.

Province of Rizal vs. Executive Secretary; consultation to LGU

regarding national projects

G.R. No. 129546 December 13, 2005

Facts:
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, 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.

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 [President Ramos], through
Proclamation No. 635, for use as a sanitary landfill and similar waste disposal applications.

The petioners opposed the implementation of said order since the creation of dump site under
the territorial jurisdiction would compromise the health of their constutents. Moreso, the the dump
site is to be constructed in Watershed reservation.

Through their concerted efforts of the officials and residents of Province of Rizal and Municipality
of San Mateo, the dump site was closed. However, during the term of President Estrada in 2003, the
dumpsite was re-opened.

A temporary restraining order was then filed. Although petitioners did not raised the question that
the project was not consulted and approved by their appropriate Sanggunian, the court take it into
consideration since a mere MOA does not guarantee the dump sites permanent closure.

Issue:
Whether or not the consultation and approval of the Province of Rizal and municipality of San
Mateo is needed before the implementation of the project..

Ruling:
The court reiterated again that "the earth belongs in usufruct to the living."

Yes, as lucidly explained by the court: 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 consultation with appropriate local government units, non-
governmental and people's organization, and other concerned sectors of the community before any
project or program is implemented in their respective jurisdiction." Likewise Section 27 requires prior
consultations before a program shall be implemented by government authorities ans the prior
approval of the Sanggunian is obtained." Corollarily as held in Lina , Jr. v. Pao, 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.

Relative to the case, 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, the ambivalence of his
reply was brought to the fore when at the height of the protest rally and barricade made by the
residents of petitioners 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.

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)]

Briefly stated, under the Local Government Code, two requisites must be met before a national
project that affects the environmental and ecological balance of local communities can be
implemented:
(1) prior consultation with the affected local communities, and
(2)prior approval of the project by the appropriate sanggunian.

Absent either of these mandatory requirements, the projects implementation is illegal.

CASE: Social Justice Society (SJS) Officers v. Mayor Alfredo S. Lim (G.R. Nos. 187836

and 187916)

DATE: 25 November 2014

PONENTE: J. Perez

FACTS

On 12 October 2001, a Memorandum of Agreement was entered into by oil companies

(Chevron, Petron and Shell) and Department of Energy for the creation of a Master Plan
to address and minimize the potential risks and hazards posed by the proximity of

communities, business and offices to Pandacan oil terminals without affecting security

and reliability of supply and distribution of petroleum products.

On 20 November 2001, the Sangguniang Panlungsod (SP) enacted Ordinance No. 8027

which reclassifies the land use of Pandacan, Sta. Ana, and its adjoining areas from

Industrial II to Commercial I.

Owners and operators of the businesses affected by the reclassification were given six (6)

months from the date of effectivity to stop the operation of their businesses. It was later

extended until 30 April 2003.

On 4 December 2002, a petition for mandamus was filed before the Supreme Court (SC)

to enforce Ordinance No. 8027.

Unknown to the SC, the oil companies filed before the Regional Trial Court of Manila an

action to annul Ordinance No. 8027 with application for writs of preliminary prohibitory

injunction and preliminary mandatory injunction. The same was issued in favor of

Chevron and Shell. Petron, on the other hand, obtained a status quo on 4 August 2004.

On 16 June 2006, Mayor Jose Atienza, Jr. approved Ordinance No. 8119 entitled An

Ordinance Adopting the Manila Comprehensive Land Use Plan and Zoning Regulations

of 2006 and Providing for the Administration, Enforcement and Amendment thereto.

This designates Pandacan oil depot area as a Planned Unit Development/Overlay Zone.

On 7 March 2007, the SC granted the petition for mandamus and directed Mayor Atienza

to immediately enforce Ordinance No. 8027. It declared that the objective of the

ordinance is to protect the residents of manila from the catastrophic devastation that will

surely occur in case of a terrorist attack on the Pandacan Terminals.

The oil companies filed a Motion for Reconsideration (MR) on the 7 March 2007

Decision. The SC later resolved that Ordinance No. 8027 is constitutional and that it was
not impliedly repealed by Ordinance No. 8119 as there is no irreconcilable conflict

between them.

SC later on denied with finality the second MR of the oil companies.

On 14 May 2009, during the incumbency of Mayor Alfredo Lim (Mayor Lim), the SP

enacted Ordinance No. 8187. The Industrial Zone under Ordinance No. 8119 was limited

to Light Industrial Zone, Ordinance No. 8187 appended to the list a Medium and a Heavy

Industrial Zone where petroleum refineries and oil depots are expressly allowed.

Petitioners Social Justice Society Officers, Mayor Atienza, et.al. filed a petition for

certiorari under Rule 65 assailing the validity of Ordinance No. 8187. Their contentions

are as follows:

- It is an invalid exercise of police power because it does not promote the general

welfare of the people

- It is violative of Section 15 and 16, Article II of the 1987 Constitution as well as

health and environment related municipal laws and international conventions and

treaties, such as: Clean Air Act; Environment Code; Toxic and Hazardous Wastes

Law; Civil Code provisions on nuisance and human relations; Universal

Declaration of Human Rights; and Convention on the Rights of the Child

- The title of Ordinance No. 8187 purports to amend or repeal Ordinance No. 8119

when it actually intends to repeal Ordinance No. 8027

On the other hand, the respondents Mayor Lim, et.al. and the intervenors oil companies

contend that:

- The petitioners have no legal standing to sue whether as citizens, taxpayers or

legislators. They further failed to show that they have suffered any injury or threat

of injury as a result of the act complained of

- The petition should be dismissed outright for failure to properly apply the related
provisions of the Constitution, the Rules of Court, and/or the Rules of Procedure

for Environmental Cases relative to the appropriate remedy available

- The principle of the hierarchy of courts is violated because the SC only exercises

appellate jurisdiction over cases involving the constitutionality or validity of an

ordinance under Section 5, Article VIII of the 1987 Constitution

- It is the function of the SP to enact zoning ordinance without prior referral to the

Manila Zoning Board of Adjustment and Appeals; thus, it may repeal all or part

of zoning ordinance sought to be modified

- There is a valid exercise of police power

On 28 August 2012, the SP enacted Ordinance No. 8283 which essentially amended the

assailed Ordinance to exclude the area where petroleum refineries and oil depots are

located from the Industrial Zone. The same was vetoed by Mayor Lim.

ISSUES

1. WON there are violations of environmental laws

2. WON the principle of hierarchy of courts is violated

3. WON the petitioners have legal standing to sue

4. WON Ordinance No. 8187 is unconstitutional in relation to the Pandacan Terminals

RULING

1. None. The scope of the Rules of Procedure for Environmental Cases is embodied in

Section 2, Part I, Rule I thereof. It states that the Rules shall govern the procedure in

civil, criminal and special civil actions before the MeTCs, MTCCs, MTCs and MCTCs,

and the RTCs involving the enforcement or violations of environmental and other related

laws, rules and regulations such as but not limited to: R.A. No. 6969, Toxic Substances

and Hazardous Waste Act; R.A. No. 8749, Clean Air Act; Provisions in C.A. No. 141;

SJS V Atienza G.R. No. 156052 March 7, 2007

J. Corona
Facts:

On November 20, 2001, the Sangguniang Panlungsod of Manila enacted Ordinance No. 8027 and
Atienza passed it the following day. Ordinance No. 8027 reclassified the area described therein from
industrial to commercial and directed the owners and operators of businesses disallowed under
Section 1 to cease and desist from operating their businesses within six months from the date of
effectivity of the ordinance. These were the Pandacan oil depots of Shell and Caltex.

But the city of Manila and the DOE entered into an MOU which only scaled down the property
covered by the depots and did not stop their operations. In the same resolution, the Sanggunian
declared that the MOU was effective only for a period of six months starting July 25, 2002. It was
extended to 2003.

Petitioners filed for mandamus in SC urging the city to implement Ordinance 8027. Respondents
defense is that Ordinance No. 8027 has been superseded by the MOU and the resolutions and that
the MOU was more of a guideline to 8027.

Issues:

1. Whether respondent has the mandatory legal duty to enforce Ordinance No. 8027 and order the
removal of the Pandacan Terminals, and

2. Whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal Ordinance
No. 8027

Held: Yes to both, Petition granted

Ratio:

1. Rule 65, Section 316 of the Rules of Court- mandamus may be filed when any tribunal,
corporation, board, officer or person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust or station. The petitioner should have a
well-defined, clear and certain legal right to the performance of the act and it must be the clear and
imperative duty of respondent to do the act required to be done.

Mandamus will not issue to enforce a right, or to compel compliance with a duty, which is
questionable or over which a substantial doubt exists. Unless the right to the relief sought is
unclouded, mandamus will not issue. When a mandamus proceeding concerns a public right
and its object is to compel a public duty, the people who are interested in the execution of the
laws are regarded as the real parties in interest and they need not show any specific interest.
Petitioners are citizens of manila and thus have a direct interest in the ordinances.
On the other hand, the Local Government Code imposes upon respondent the duty, as city mayor,
to "enforce all laws and ordinances relative to the governance of the city. "One of these is Ordinance
No. 8027. As the chief executive of the city, he has the duty to enforce Ordinance No. 8027 as long
as it has not been repealed by the Sanggunian or annulled by the courts. He has no other choice. It
is his ministerial duty to do so.

These officers cannot refuse to perform their duty on the ground of an alleged invalidity of the statute
imposing the duty. The reason for this is obvious. It might seriously hinder the transaction of
public business if these officers were to be permitted in all cases to question the constitutionality of
statutes and ordinances imposing duties upon them and which have not judicially been declared
unconstitutional. Officers of the government from the highest to the lowest are creatures of the
law and are bound to obey it.

2. Need not resolve this issue. Assuming that the terms of the MOU were inconsistent with
Ordinance No. 8027, the resolutions which ratified it and made it binding on the City of Manila
expressly gave it full force and effect only until April 30, 2003.

METRO ILOILO WATER DISTRICT, petitioner, vs. HON. COURT OF

APPEALS, Former SECOND DIVISION, Manila, HON. SEVERINO
C. AGUILAR, Presiding Judge, Branch 35, RTC, Iloilo, EMMA
NAVA, RUFINO SITACA, JR., REXES URSUA, CARMEN
PANGANTIHON, BENITO GO, REBECCA BERLIN, and / or CHIT
BERLIN, LUIS CARREON, CHARLES KANA-AN and GERRY
LUZURIAGA, respondents.

DECISION
TINGA, J.:

Before this Court is a Petition[1] dated November 9, 1995 filed by the Metro
Iloilo Water District assailing the Decision[2] of the Court of appeals dated June
19, 1995 which affirmed the trial courts Order[3] dismissing the petitions for
injunction filed by petitioner against private respondents.
Petitioner is a water district organized under the provisions of Presidential
Decree No. 198 (P.D. 198), as amended. It was granted by the Local Water
Utilities Administration Conditional Certificate of Conformance No. 71[4] on
January 12, 1979. Its service areas encompass the entire territorial areas of
Iloilo City and the Municipalities of Ma-asin, Cabanatuan, Santa Barbara and
Pavia.
Sometime between April and May of 1993, petitioner filed nine (9)
individual yet identical petitions for injunction with prayer for preliminary
injunction and / or temporary restraining order[5] against herein private
respondents the pertinent portions of which read:

4. That pursuant to the provisions of section 31 (a) of P.D. 198, as amended, the
petitioner as a Water District was authorized to adopt laws and regulations governing
the drilling, maintenance and operation of wells within its boundaries for purposes
other than single family domestic use on overlying land, with then provision that any
well operated in violation of such regulations shall be deemed an interference with the
waters of the district;

5. That by virtue of said authorization, the Board of Directors for the petitioner
promulgated its Rules Governing Ground Water Pumping and spring Development
Within the Territorial Jurisdiction of the Metro Iloilo Water District, Section 3 of
which provides as follows:

Ground Water Pumping and Spring Development. Except when the use of water is
for single family domestic use, no person, natural or juridical shall abstract or
withdraw ground water and appropriate the waters from springs within the jurisdiction
of the District without first securing a water permit from the Council and no person
shall engage in the business of drilling wells either as test wells or production wells
for the purpose of abstracting or withdrawing ground water without first registering as
well as driller with the Council; Provided, that the person drilling his own well or
through the services of a qualified well driller shall comply with the standards and
requirements established herein in addition to those established by the Council for the
exploitation of ground water resources.

6. That the respondent has abstracted or withdrawn ground water within the territorial
jurisdiction of the petitioner at _________________________ Iloilo City, without
first securing a Water Permit from the National Water Resources Council nor had its
well driller registered as such with said council, and sold said water so extracted to
commercial and other consumers in Iloilo City, within petitioners service area;

7. That the unauthorized extraction or withdrawal of ground water by the respondent

without the necessary permit therefore is in violation of the rules and regulations
prescribed by the Board of Directors of the petitioner as above-mentioned duly
approved by the National Water Resources Council and constitutes interference with
or deterioration of water quality or the natural flow of surface or ground water supply
which maybe used or useful for any purpose of the petitioner for which the petitioner
as a Water District may commence, maintain, intervene in, defend and compromise
actions or proceedings under Section 31 (a) of P.D. 198, as amended;
8. That the act of the respondent in continuing to extract or withdraw ground water
without a Water Permit therefor, is in violation of Art. XIII of P.D. 1067 of the Water
Code of the Philippines, and unless such act is restrained, will definitely cause great
loss upon the petitioner as a Water District.[6]

In their respective answers, private respondents uniformly invoked the lack

of jurisdiction of the trial court, contending that the cases were within the
original and exclusive jurisdiction of the National Water Resources Council
(Water Council) under Presidential Decree No. 1067, otherwise known as the
Water Code of the Philippines (Water Code). In addition, private respondents
Emma Nava[7] and Rebecca Berlin[8]denied having extracted or withdrawn
water from the ground, much less sold the same.[9] Private respondent
Carmen Pangantihon likewise denied having constructed any waterworks
system in her area but admitted that she had constructed her own deep well,
unaware that she needed to get a permit to do the same.[10] Private
respondent Rufino Sitaca maintained the petitioners source of water are
reservoirs from rivers and are thus not affected by his well. Moreover, he
claimed that his water permit application was deemed approved, and thus he
is entitled to use the water from his well.[11]
Private respondent Benito Go admitted that he extracted water from the
ground, which he claimed to be his private property, and used the water for
his lumberyard and domestic purposes.[12] Additionally, he alleged the
petitioners rules and regulations were not published in the Official Gazette and
hence petitioner had no cause of action.[13] Private respondent Charles Kana-
an asserted that he had complied with the requirements for the approval of his
water permit application. He claimed that he was extracting and selling water
with petitioners knowledge, and without damage and injury to the
latter.[14] Meanwhile, private respondent Gerry Luzuriaga claimed that he was
not the real party in interest, but Shoemart, Inc. which has the control and
possession of the property where the alleged withdrawal of ground water was
taking place.[15]
The trial court dismissed the petitions in its Order[16] dated March 17, 1994,
ruling that the controversy was within the original jurisdiction of the Water
Council, involving, as it did, the appropriation, exploitation, and utilization of
water, and factual issues which were within the Water Councils competence.
In addition, the trial court held that petitioner failed to exhaust administrative
remedies under the doctrine of primary administrative jurisdiction.
Petitioners Motion for Reconsideration[17] was thereafter denied on April 29,
1994.[18]
 A petition[19] dated May 27, 1994 seeking a review of the trial courts order
of dismissal was filed before this Court but the same was referred to the Court
of Appeals for consideration and adjudication on the merits in
the Resolution[20] dated July 11, 1994.
Petitioner sought the review of the order of the trial court dismissing the
petitions and denying its motion for reconsideration, on the ground that the
trial court failed to adhere to this Courts rulings in Amistoso v.
Ong[21] and Santos v. Court of Appeals,[22] which upheld the regular courts
jurisdiction over disputes which involve not the settlement of water rights but
the enjoyment of the right to water use for which a permit had already been
granted.
The Court of Appeals denied the petition, holding that the trial court did not
err in dismissing the case for want of jurisdiction as it was the Water Council
which had jurisdiction over the case. The appellate court ratiocinated:

The controversy in this case arose from the fact that the petitioner Iloilo Water District
was granted water rights in Iloilo City and the respondents also extracted or withdrew
ground water within the same jurisdiction.

While at first impression this case involves a violation of the petitioners enjoyment of
a right to water use, the fact is that it actually involves also a dispute over the
appropriation, utilization, exploitation development, control, conversation and
protection of waters because the respondents have allegedly engaged in the extraction
or withdrawal of ground water without a permit from the NWRC within the territorial
jurisdiction of the petitioner. Therefore, Art. 88 of P.D. No. 1067 giving the NWRC
original jurisdiction over the cases is applicable.

The NWRC has jurisdiction to hear and decide disputes relating to appropriation,
utilization and control of water while the Regional Trial Court only has appellate
jurisdiction over the case. This was the ruling of the Supreme Court in Abe-abe vs.
Manta, 90 SCRA 524 which was reiterated in Tanjay Water District vs. Gabanton,
172 SCRA 253.

The cases of Santos v. Court of Appeals, 214 SCRA 170 and Amistoso vs. Ong,
130 SCRA 288 are not applicable to the case at bar for here, what is involved is not
only the alleged violation of the grantees right but a question of whether or not the
respondents have equal right to the appropriation, utilization and exploitation of water
rights.[23]
 The Court of Appeals denied petitioners Motion for
Reconsideration[24] dated July 11, 1995 in its Resolution of September 29,
1995.[25]
Petitioner now contends that the extraction or withdrawal of ground water
as well as the sale thereof within its territorial jurisdiction is a violation of its
rights as a water district.[26] Being a violation thereof, the regular courts have
jurisdiction over the dispute. On the other hand, private respondents
unanimously maintain that it is the Water Council which has jurisdiction over
the subject matter of this case. Thus, the sole issue in this petition, as
presented by petitioner, is:

DID THE REGIONAL TRIAL COURT OF ILOILO HAVE JURISDICTION OVER

THE SUBJECT MATTER OF THE PETITIONS?[27]

Petitioner anchors its claim on Section 31 (now 32) of PD 198, as

amended, which reads:

Sec. 32. Protection of waters and Facilities of District. A district shall have the right
to :

(a) Commence, maintain, intervene in, defend and compromise actions or

proceedings to prevent interference with or deterioration of water quality or the
natural flow of any surface, stream or ground water supply which may be used or
useful for any purpose of the district or be a common benefit to the lands or its
inhabitants. The ground water within a district is necessary to the performance of the
districts powers and such districts hereby authorized to adopt rules and regulations
subject to the approval of the National Water Resources Council governing the
drilling, maintenance and operation of wells within its boundaries for purposes other
than a singled family domestic use on overlying land. Any well operated on violation
of such regulations shall be deemed in interference with the waters of the district.

(c) Prohibit any person, firm or corporation from vending, selling, or otherwise
disposing of water for public purposes within the service area of the district where
district facilities are available to provide such service, or fix terms and conditions by
permit for such sale or disposition of water.

By virtue of the above provisions, petitioner states that as a water district,

it has the right to prevent interference with the water of the district; and to
enforce such right, it is given remedies of commencing, maintaining, or
intervening in, defending or entering into appropriate actions or proceedings.
 In asserting the jurisdiction of the regular courts over its petitions and the
propriety of its filing of the petitions before the trial court, petitioner invokes the
ruling of the Court in Amistoso v. Ong,[28] as reiterated in Santos v. Court of
Appeals,[29] that where the issue involved is not the settlement of a water
rights dispute, but the enjoyment of a right to water use for which a permit was
already granted, the regular court has jurisdiction and not the Water Council.
Petitioner insists that there is no occasion to invoke the original jurisdiction
of the Water Council in this case since there is no question of appropriation,
exploitation, utilization, development, control, conservation, and protection of
water. The only dispute, according to petitioner, pertains to the act of private
respondents in extracting ground water from the territory of petitioner as a
water district and selling the same within its service area, or more succinctly,
private respondents interference with the granted right of petitioner over
ground water within its territorial jurisdiction.[30]
Private respondents, for their part, staunchly invoke Article 88 of the Water
Code, which grants original jurisdiction over all disputes relating to the
appropriation, utilization, exploitation, development, control, conservation and
protection of waters to the Water Council.[31]
Relying on the cases of Abe-abe v. Manta[32] and Tanjay Water District v.
Gabaton,[33] private respondents maintain that the Water Council is exclusively
vested with original jurisdiction to settle water disputes under the Water Code.
They claim that the Amistoso and Santoscases do not apply to the instant
case since in Amistoso, the issue was the prevention of the flow of water
through an irrigation canal, and in Santos, the issue referred to the prevention
of the enjoyment of a water right. In contrast, the issue in the instant case is
the right to appropriate water which petitioner and some of the private
respondents profess to have.
We find merit in the petition.
The petitions file before the trial court were for the issuance of an
injunction order for respondents to cease and desist from extracting or
withdrawing water from petitioners well and from selling the same within its
service areas.[34] The petitions contained factual allegations in support of the
prayer for injunction, to wit:
1. the grant to petitioner of a Conditional Certificate of Conformance by the Local Water
Utilities Administration over areas from which water was allegedly extracted or
withdrawn by private respondents, by virtue of which its Board of Directors
promulgated rules governing ground water pumping within its service areas;
2. abstraction or withdrawal of water within the territorial jurisdiction of petitioner by
private respondents without first securing a permit from the Water Council, or
 registering their well drillers, and sale of said water so extracted to commercial and
other consumers within petitioners service areas;
3. that the unauthorized extraction or withdrawal of ground water by private
respondents without the necessary permit was in violation of petitioners prescribed
rules, and constitutes interference for which petitioner may commence, maintain,
intervene in, defend and compromise actions or proceedings under Sec. 31 of P.D.
No. 198;
4. that the extraction or withdrawal of ground water without the corresponding permit
was a violation of Art. 13 of the Water Code; and
5. that great damage and prejudice will be suffered by petitioner if private respondents
extraction and withdrawal of ground water, as well as the selling thereof be allowed
to continue.

In essence, the petitions focus on the violations incurred by private

respondents by virtue of their alleged unauthorized extraction and withdrawal
of ground water within petitioners service area, visa-a-vis petitioners vested
rights as a water district. At issue is whether or not private respondents
extraction and sale of ground water within petitioners service area violated
petitioners rights as a water district. It is at once obvious that the petitions
raise a judicial question.
A judicial question is raised when the determination of the questions
involves the exercise of a judicial function, i.e., the question involves the
determination of what the law is and what the legal rights of the parties are
with respect to the matter in controversy. As opposed to a moot question or
one properly decided by the executive or legislative branch, a judicial question
is properly addressed to the courts.[35]
The instant case certainly calls for the application and interpretation of
pertinent laws and jurisprudence in order to determine whether private
respondents actions violate petitioners rights as a water district and justify an
injunction. This issue does not so much provide occasion to invoke the special
knowledge and expertise of the Water Council as it necessitates judicial
intervention. While initially it may appear that there is a dimension to the
petitions which pertains to the sphere of the Water Council, i.e., the
appropriation of water which the Water Code defines as the acquisition of
rights over the use of waters or the taking or diverting of waters from a natural
source in the manner and for any purpose allowed by law, in reality the matter
is at most merely collateral to the main thrust of the petitions.
The petitions having raised a judicial question, it follows that the doctrine
of exhaustion of administrative remedies, on the basis of which the petitions
were dismissed by the trial court and the Court of Appeals, does not even
come to play.[36]
 Notably too, private respondents themselves do not dispute petitioners
rights as a water district. The cases of Abe-Abe v. Manta[37] and Tanjay Water
District v. Gabaton[38] invoked by private respondents are thus inapplicable. In
Abe-Abe v. Manta, both petitioners and respondent had no established right
emanating from any grant by any governmental agency to the use,
appropriation and exploitation of water, while in Tanjay Water District v.
Gabaton, petitioner Tanjay sought to enjoin the Municipality of Pamplona and
its officials from interfering in the management of the Tanjay Waterworks
System.
On the other hand, in the analogous case of Amistoso v. Ong[39], petitioner
had an approved Water Rights Grant from the Department of Public Works,
Transportation and Communications. The trial court was not asked to grant
petitioner the right to use but to compel private respondents to recognize that
right. Thus, we declared that the trial courts jurisdiction must be upheld where
the issue involved is not the settlement of a water rights dispute, but the
enjoyment of a right to water use for which a permit was already granted.[40]
In like manner, the present petition calls for the issuance of an injunction
order to prevent private respondents from extracting and selling ground water
within petitioners service area in violation of the latters water permit. There is
no dispute regarding petitioners right to ground water within its service area. It
is petitioners enjoyment of its rights as a water district which it seeks to assert
against private respondents.
WHEREFORE, the Decision of the Court of Appeals dated June 19, 1995
is SET ASIDE and the case is ordered REMANDED to the trial court for
further proceedings, with costs against respondents.
SO ORDERED.