G.R. No. 163509 December 6, 2006
XIII an
PICOP RESOURCES, INC., petitioner,
vs.
BASE METALS MINERAL RESOURCES
CORPORATION, and THE MINES
ADJUDICATION BOARD,respondents.
DECISION
TINGA, J.:
PICOP Resources, Inc. (PICOP) assails the
Decision1 of the Court of Appeals dated November
28, 2003 and its Resolution2 dated May 5, 2004,
which respectively denied its petition for review and
motion for reconsideration.
The undisputed facts quoted from the appellate
court's Decision are as follows:
In 1987, the Central Mindanao Mining and
Development Corporation (CMMCI for
brevity) entered into a Mines Operating
Agreement (Agreement for brevity) with
Banahaw Mining and Development
Corporation (Banahaw Mining for brevity)
whereby the latter agreed to act as Mine
Operator for the exploration, development,
and eventual commercial operation of
CMMCI's eighteen (18) mining claims
located in Agusan del Sur.
Pursuant to the terms of the Agreement,
Banahaw Mining filed applications for
Mining Lease Contracts over the mining
claims with the Bureau of Mines. On April
29, 1988, Banahaw Mining was issued a
Mines Temporary Permit authorizing it to
extract and dispose of precious minerals
found within its mining claims. Upon its
expiration, the temporary permit was
subsequently renewed thrice by the Bureau
of Mines, the last being on June 28, 1991.
Since a portion of Banahaw Mining's mining
claims was located in petitioner PICOP's
logging concession in Agusan del Sur,
Banahaw Mining and petitioner PICOP
entered into a Memorandum of Agreement,
whereby, in mutual recognition of each
other's right to the area concerned,
petitioner PICOP allowed Banahaw Mining
an access/right of way to its mining claims.
In 1991, Banahaw Mining converted its
mining claims to applications for Mineral
Production Sharing Agreements (MPSA for
brevity).
While the MPSA were pending, Banahaw
Mining, on December 18, 1996, decided to
sell/assign its rights and interests over
thirty-seven (37) mining claims in favor of
private respondent Base Metals Mineral
Resources Corporation (Base Metals for
brevity). The transfer included mining
claims held by Banahaw Mining in its own
right as claim owner, as well as those
covered by its mining operating agreement
with CMMCI.
Upon being informed of the development,
CMMCI, as claim owner, immediately
approved the assignment made by
Banahaw Mining in favor of private
respondent Base Metals, thereby
recognizing private respondent Base Metals
as the new operator of its claims.
On March 10, 1997, private respondent
Base Metals amended Banahaw Mining's
pending MPSA applications with the Bureau
of Mines to substitute itself as applicant and
to submit additional documents in support
of the application. Area clearances from the
DENR Regional Director
Superintendent of the Agusan Marsh and
Wildlife Sanctuary were submitted, as
required.
On October 7, 1997, private respondent
Base Metals' amended MPSA applications
were published in accordance with the
requirements of the Mining Act of 1995.
On November 18, 1997, petitioner PICOP
filed with the Mines Geo-Sciences Bureau
(MGB), Caraga Regional Office No.
Adverse Claim and/or Opposition to private
respondent Base Metals' application on the
following grounds:
I. THE APPROVAL OF THE
APPLICATION AND ISSUANCE
OF THE MPSA OF BASE METALS
WILL VIOLATE THE
CONSTITUTIONAL MANDATE
AGAINST IMPAIRMENT OF
OBLIGATION IN A CONTRACT.
II. THE APPROVAL OF THE
APPLICATION WILL DEFEAT THE
RIGHTS OF THE HEREIN
ADVERSE CLAIMANT AND/OR
OPPOSITOR.
In its Answer to the Adverse Claim and/or
Opposition, private respondent Base Metals
alleged that:
a) the Adverse Claim was filed out
of time;
b) petitioner PICOP has no rights
over the mineral resources on their
concession area. PICOP is
asserting a privilege which is not
protected by the non-impairment
clause of the Constitution;
c) the grant of the MPSA will not
impair the rights of PICOP nor
create confusion, chaos or conflict.
and
Petitioner PICOP's Reply to the Answer
alleged that:
a) the Adverse Claim was filed
within the reglementary period;
b) the grant of MPSA will impair the
existing rights of petitioner PICOP;
c) the MOA between PICOP and
Banahaw Mining provides for
 recognition by Banahaw Mining of
the Presidential Warranty awarded
in favor of PICOP for the exclusive
possession and enjoyment of said
areas.
As a Rejoinder, private respondent Base
Metals stated that:
1. it is seeking the right to extract
the mineral resources in the applied
areas. It is not applying for any right
to the forest resources within the
concession areas of PICOP;
2. timber or forest lands are open to
Mining Applications;
3. the grant of the MPSA will not
violate the so called "presidential
fiat";
4. the MPSA application of Base
Metals does not require the
consent of PICOP; and
5. it signified its willingness to enter
into a voluntary agreement with
PICOP on the matter of
compensation for damages. In the
absence of such agreement, the
matter will be brought to the Panel
of Arbitration in accordance with
law.
In refutation thereto, petitioner PICOP
alleged in its Rejoinder that:
a) the Adverse Claim filed thru
registered mail was sent on time
and as prescribed by existing
mining laws and rules and
regulations;
b) the right sought by private
respondent Base Metals is not
absolute but is subject to existing
rights, such as those which the
adverse claimant had, that have to
be recognized and respected in a
manner provided and prescribed by
existing laws as will be expounded
fully later;
c) as a general rule, mining
applications within timber or forest
lands are subject to existing rights
as provided in Section 18 of RA
7942 or the Philippine Mining Act of
1995 and it is an admitted fact by
the private respondent that
petitioner PICOP had forest rights
as per Presidential Warranty;
d) while the Presidential Warranty
did not expressly state exclusivity,
P.D. 705 strengthened the right of
occupation, possession and control
over the concession area;
e) the provisions of Section 19 of
the Act and Section 15 of IRR
expressly require the written
consent of the forest right holder,
PICOP.
After the submission of their respective
position paper, the Panel Arbitrator issued
an Order dated December 21, 1998, the
dispositive portion of which reads as:
WHEREFORE, premises
considered, Mineral Production
Sharing Agreement Application
Nos. (XIII) 010, 011, 012 of Base
Metal Resources Corporation
should be set aside.
The disapproval of private respondent Base
Metals' MPSA was due to the following
reasons:
Anent the first issue the Panel find
(sic) and so hold (sic) that the
adverse claim was filed on time, it
being mailed on November 19,
1997, at Metro Manila as evidenced
by Registry Receipt No. 26714.
Under the law (sic) the date of
mailing is considered the date of
filing.
As to whether or not an MPSA
application can be granted on area
subject of an IFMA3 or PTLA4 which
is covered by a Presidential
Warranty, the panel believes it can
not, unless the grantee consents
thereto. Without the grantee's
consent, the area is considered
closed to mining location (sec. 19)
(b) (No. 2), DAO No. 96-40). The
Panel believe (sic) that mining
location in forest or timberland is
allowed only if such forest or
timberland is not leased by the
government to a qualified person or
entity. If it is leased the consent of
the lessor is necessary, in addition
to the area clearance to be issued
by the agency concerned before it
is subjected to mining operation.
Plantation is considered closed to
mining locations because it is off
tangent to mining. Both are
extremes. They can not exist at the
same time. The other must
necessarily stop before the other
operate.
On the other hand, Base Metals
Mineral Resources Corporation can
not insist the MPSA application as
assignee of Banahaw. PICOP did
not consent to the assignment as
embodied in the agreement.
Neither did it ratify the Deed of
Assignment. Accordingly, it has no
force and effect. Thus, for lack of
consent, the MPSA must fall.
On January 11, 1999, private respondent
Base Metals filed a Notice of Appeal with
public respondent MAB and alleged in its
Appeal Memorandum the following of the Department of Environment surrendered its police power to control and
arguments: and Natural Resources (DENR), supervise the exploration, development and
can be applied retroactively to utilization of the country's natural resources.
1. THE CONSENT OF PICOP IS MPSA applications which have not
NOT NECESSARY FOR THE yet been finally resolved; On PICOP's contention that its consent is
APPROVAL OF BASE METALS' necessary for the grant of Base Metals' MPSA, the
MPSA APPLICATION. 3. Even assuming that the consent appellate court ruled that the amendment to PTLA
of adverse claimant is necessary No. 47 refers to the grant of gratuitous permits,
2. EVEN ASSUMING SUCH for the approval of Base Metals' which the MPSA subject of this case is not. Further,
CONSENT IS NECESSARY, application (which is denied), such the amendment pertains to the cutting and
PICOP HAD CONSENTED TO consent had already been given; extraction of timber for mining purposes and not to
BASE METALS' MPSA and the act of mining itself, the intention of the
APPLICATION. amendment being to protect the timber found in
4. The Memorandum of Agreement PICOP's concession areas.
In Answer thereto, petitioner PICOP alleged between adverse claimant and
that: Banahaw Mining proves that the The Court of Appeals noted that the reinstatement
Agusan-Surigao area had been of the MPSA does not ipso facto revoke, amend,
used in the past both for logging rescind or impair PICOP's timber license. Base
1. Consent is necessary for the
and mining operations. Metals still has to comply with the requirements for
approval of private respondent's
MPSA application; the grant of a mining permit. The fact, however, that
After the filing of petitioner PICOP's Reply Base Metals had already secured the necessary
Memorandum, public respondent rendered Area Status and Clearance from the DENR means
2. Provisions of Memorandum that the areas applied for are not closed to mining
the assailed decision setting aside the
Order No. 98-03 and IFMA 35 are operations.
Panel Arbitrator's order. Accordingly,
not applicable to the instant case;
private respondent Base Metals' MPSA's
were reinstated and given due course In its Resolution7 dated May 5, 2004, the appellate
3. Provisions of PD 7055 connotes subject to compliance with the pertinent court denied PICOP's Motion for Reconsideration. It
exclusivity for timber license requirements of the existing rules and ruled that PICOP failed to substantiate its allegation
holders; and regulations.6 that the area applied for is a forest reserve and is
therefore closed to mining operations because it did
4. MOA between private The Court of Appeals upheld the decision of the not identify the particular law which set aside the
respondent's assignor and adverse MAB, ruling that the Presidential Warranty of contested area as one where mining is prohibited
claimant provided for the September 25, 1968 issued by then President pursuant to applicable laws.
recognition of the latter's rightful Ferdinand E. Marcos merely confirmed the timber
claim over the disputed areas. license granted to PICOP and warranted the latter's The case is now before us for review.
peaceful and adequate possession and enjoyment
Private respondent Base Metals claimed in of its concession areas. It was only given upon the In its Memorandum 8 dated April 6, 2005, PICOP
its Reply that: request of the Board of Investments to establish the presents the following issues: (1) the 2,756
boundaries of PICOP's timber license agreement. hectares subject of Base Metals' MPSA are closed
1. The withholding of consent by The Presidential Warranty did not convert PICOP's to mining operations except upon PICOP's written
PICOP derogates the State's power timber license into a contract because it did not consent pursuant to existing laws, rules and
to supervise and control the create any obligation on the part of the government regulations and by virtue of the Presidential
exploration, utilization and in favor of PICOP. Thus, the non-impairment clause Warranty; (2) its Presidential Warranty is protected
development of all natural finds no application. by the non-impairment clause of the Constitution;
resources; and (3) it does not raise new issues in its petition.
Neither did the Presidential Warranty grant PICOP
2. Memorandum Order No, 98-03, the exclusive possession, occupation and PICOP asserts that its concession areas are closed
not being a statute but a mere exploration of the concession areas covered. If that to mining operations as these are within the
guideline imposed by the Secretary were so, the government would have effectively Agusan-Surigao-Davao forest reserve established
under Proclamation No. 369 of then Gov. Gen.
Dwight Davis. The area is allegedly also part of
permanent forest established under Republic Act
No. 3092 (RA 3092),9 and overlaps the wilderness
area where mining applications are expressly
prohibited under RA 7586.10 Hence, the area is
closed to mining operations under Sec. 19(f) of RA
7942.11
PICOP further asserts that to allow mining over a
forest or forest reserve would allegedly be
tantamount to changing the classification of the land
from forest to mineral land in violation of Sec. 4, Art.
XII of the Constitution and Sec. 1 of RA 3092.
According to PICOP, in 1962 and 1963, blocks A, B
and C within the Agusan-Surigao-Davao forest
reserve under Proclamation No. 369 were surveyed
as permanent forest blocks in accordance with RA
3092. These areas cover PICOP's PTLA No. 47,
part of which later became IFMA No. 35. In turn, the
areas set aside as wilderness as in PTLA No. 47
became the initial components of the NIPAS under
Sec. 5(a) of RA 7586. When RA 7942 was signed
into law, the areas covered by the NIPAS were
expressly determined as areas where mineral
agreements or financial or technical assistance
agreement applications shall not be allowed. PICOP
concludes that since there is no evidence that the
permanent forest areas within PTLA No. 47 and
IFMA No. 35 have been set aside for mining
purposes, the MAB and the Court of Appeals
gravely erred in reinstating Base Metals' MPSA
and, in effect, allowing mining exploration and
mining-related activities in the protected areas.
PICOP further argues that under DENR
Administrative Order (DAO) No. 96-40
implementing RA 7942, an exploration permit must
be secured before mining operations in government
reservations may be undertaken. There being no
exploration permit issued to Banahaw Mining or
appended to its MPSA, the MAB and the Court of
Appeals should not have reinstated its application.
PICOP brings to the Court's attention the case
of PICOP Resources, Inc. v. Hon. Heherson T.
Alvarez,12 wherein the Court of Appeals ruled that
the Presidential Warranty issued to PICOP for its
TLA No. 43 dated July 29, 1969, a TLA distinct from
PTLA No. 47 involved in this case, is a valid
contract involving mutual prestations on the part of
the Government and PICOP.
The Presidential Warranty in this case is allegedly
not a mere confirmation of PICOP's timber license
but a commitment on the part of the Government
that in consideration of PICOP's investment in the
wood-processing business, the Government will
assure the availability of the supply of raw materials
at levels adequate to meet projected utilization
requirements. The guarantee that PICOP will have
peaceful and adequate possession and enjoyment
of its concession areas is impaired by the
reinstatement of Base Metals' MPSA in that the
latter's mining activities underneath the area in
dispute will surely undermine PICOP's supply of raw
materials on the surface.
Base Metals' obtention of area status and clearance
from the DENR is allegedly immaterial, even
misleading. The findings of the DENR Regional
Disrector and the superintendent of the Agusan
Marsh and Wildlife Sanctuary are allegedly
misplaced because the area applied for is not inside
the Agusan Marsh but in a permanent forest.
Moreover, the remarks in the area status itself
should have been considered by the MAB and the
appellate court as they point out that the application
encroaches on surveyed timberland projects
declared as permanent forests/forest reserves.
Finally, PICOP insists that it has always maintained
that the forest areas of PTLA No. 47 and IFMA No.
35 are closed to mining operations. The grounds
relied upon in this petition are thus not new issues
but merely amplifications, clarifications and detailed
expositions of the relevant constitutional provisions
and statutes regulating the use and preservation of
forest reserves, permanent forest, and protected
wilderness areas given that the areas subject of the
MPSA are within and overlap PICOP's PTLA No. 47
and IFMA No. 35 which have been classified and
blocked not only as permanent forest but also as
protected wilderness area forming an integral part
of the Agusan-Davao-Surigao Forest Reserve.
In its undated Memorandum,13 Base Metals
contends that PICOP never made any reference to
land classification or the exclusion of the contested
area from exploration and mining activities except in
the motion for reconsideration it filed with the Court
of Appeals. PICOP's object to the MPSA was
allegedly based exclusively on the ground that the
application, if allowed to proceed, would constitute a
violation of the constitutional proscription against
impairment of the obligation of contracts. It was
upon this issue that the appellate court hinged its
Decision in favor of Base Metals, ruling that the
Presidential Warranty merely confirmed PICOP's
timber license. The instant petition, which raises
new issues and invokes RA 3092 and RA 7586, is
an unwarranted departure from the settled rule that
only issues raised in the proceedings a quo may be
elevated on appeal.
Base Metals notes that RA 7586 expressly requires
that there be a prior presidential decree,
presidential proclamation, or executive order issued
by the President of the Philippines, expressly
proclaiming, designating, and setting aside the
wilderness area before the same may be
considered part of the NIPAS as a protected area.
Allegedly, PICOP has not shown that such an
express presidential proclamation exists setting
aside the subject area as a forest reserve, and
excluding the same from the commerce of man.
PICOP also allegedly misquoted Sec. 19 of RA
7942 by placing a comma between the words
"watershed" and "forest" thereby giving an
altogether different and misleading interpretation of
the cited provision. The cited provision, in fact,
states that for an area to be closed to mining
applications, the same must be a watershed forest
reserve duly identified and proclaimed by the
President of the Philippines. In this case, no
presidential proclamation exists setting aside the
contested area as such.
Moreover, the Memorandum of Agreement between
Banahaw Mining and PICOP is allegedly a clear
and tacit recognition by the latter that the area is
open and available for mining activities and that
Banahaw Mining has a right to enter and explore
the areas covered by its mining claims.
Base Metals reiterates that the non-impairment
clause is a limit on the exercise of legislative power
and not of judicial or quasi-judicial power. The
Constitution prohibits the passage of a law which
enlarges, abridges or in any manner changes the
intention of the contracting parties. The decision of
the MAB and the Court of Appeals are not
legislative acts within the purview of the
constitutional proscription. Besides, the Presidential
Warranty is not a contract that may be impaired by
the reinstatement of the MPSA. It is a mere
confirmation of PICOP's timber license and draws
its life from PTLA No. 47. Furthermore, PICOP fails
to show how the reinstatement of the MPSA will
impair its timber license.
Following the regalian doctrine, Base Metals avers
that the State may opt to enter into contractual
arrangements for the exploration, development, and
extraction of minerals even it the same should
mean amending, revising, or even revoking
PICOP's timber license. To require the State to
secure PICOP's prior consent before it can enter
into such contracts allegedly constitutes an undue
delegation of sovereign power.
Base Metals further notes that Presidential Decree
No. 705 (PD 705), under which PTLA No. 47, IFMA
No. 35 and the Presidential Warranty were issued,
requires notice to PICOP rather than consent before
any mining activity can be commenced in the
latter's concession areas.
The Office of the Solicitor General (OSG) filed a
Memorandum14 dated April 21, 2005 on behalf of
the MAB, contending that PICOP's attempt to raise
new issues, such as its argument that the contested
area is classified as a permanent forest and hence,
closed to mining activities, is offensive to due
process and should not be allowed.
The OSG argues that a timber license is not a
contract within the purview of the due process and
non-impairment clauses. The Presidential Warranty
merely guarantees PICOP's tenure over its
concession area and covers only the right to cut,
collect and remove timber therein. It is a mere
collateral undertaking and cannot amplify PICOP's
rights under its PTLA No. 47 and IFMA No. 35. To
hold that the Presidential Warranty is a contract
separate from PICOP's timber license effectively
gives the latter PICOP an exclusive, perpetual and
irrevocable right over its concession area and
impairs the State's sovereign exercise of its power
over the exploration, development, and utilization of
natural resources.
The case of PICOP Resources, Inc. v. Hon.
Heherson T. Alvarez, supra, cited by PICOP cannot
be relied upon to buttress the latter's claim that a
presidential warranty is a valid and subsisting
contract between PICOP and the Government
because the decision of the appellate court in that
case is still pending review before the Court's
Second Division.
The OSG further asserts that mining operations are
legally permissible over PICOP's concession areas.
Allegedly, what is closed to mining applications
under RA 7942 are areas proclaimed as watershed
forest reserves. The law does not totally prohibit
mining operations over forest reserves. On the
contrary, Sec. 18 of RA 7942 permits mining over
forest lands subject to existing rights and
reservations, and PD 705 allows mining over forest
lands and forest reservations subject to State
regulation and mining laws. Sec. 19(a) of RA 7942
also provides that mineral activities may be allowed
even over military and other government
reservations as long as there is a prior written
clearance by the government agency concerned.
The area status clearances obtained by Base
Metals also allegedly show that the area covered by
the MPSA is within timberland, unclassified public
forest, and alienable and disposable land.
Moreover, PICOP allegedly chose to cite portions
of Apex Mining Corporation v. Garcia,15 to make it
appear that the Court in that case ruled that mining
is absolutely prohibited in the Agusan-Surigao-
Davao Forest Reserve. In fact, the Court held that
the area is not open to mining location because the
proper procedure is to file an application for a
permit to prospect with the Bureau of Forest and
Development.
In addition, PICOP's claimed wilderness area has
not been designated as a protected area that would
operate to bar mining operations therein. PICOP
failed to prove that the alleged wilderness area has
been designated as an initial component of the
NIPAS pursuant to a law, presidential decree,
presidential proclamation or executive order.
Hence, it cannot correctly claim that the same falls
within the coverage of the restrictive provisions of
RA 7586.
The OSG points out that the Administrative Code of
1917 which RA 3092 amended has been
completely repealed by the Administrative Code of
1978. Sec. 4, Art. XII of the 1987 Constitution, on
the other hand, provides that Congress shall
determine the specific limits of forest lands and
national parks, marking clearly their boundaries on
the ground. Once this is done, the area thus
covered by said forest lands and national parks may
not be expanded or reduced except also by
congressional legislation. Since Congress has yet
to enact a law determining the specific limits of the
forest lands covered by Proclamation No. 369 and
marking clearly its boundaries on the ground, there
can be no occasion that could give rise to a
violation of the constitutional provision.
Moreover, Clauses 10 and 14 of PICOP's IFMA No.
35 specifically provides that the area covered by the
agreement is open for mining if public interest so
requires. Likewise, PTLA No. 47 provides that the
area covered by the license agreement may be
opened for mining purposes.
Finally, the OSG maintains that pursuant to the
State's policy of multiple land use, R.A. No. 7942
provides for appropriate measures for a harmonized
utilization of the forest resources and compensation
for whatever damage done to the property of the
surface owner or concessionaire as a consequence
of mining operations. Multiple land use is best
demonstrated by the Memorandum of Agreement
between PICOP and Banahaw Mining.
First, the procedural question of whether PICOP is
raising new issues in the instant petition. It is the
contention of the OSG and Base Metals that
PICOP's argument that the area covered by the
MPSA is classified as permanent forest and
therefore closed to mining activities was raised for
the first time in PICOP's motion for reconsideration
with the Court of Appeals.
Our own perusal of the records of this case reveals
that this is not entirely true.
In its Adverse Claim and/or Opposition16 dated
November 19, 1997 filed with the MGB Panel of
Arbitrators, PICOP already raised the argument that
the area applied for by Base Metals is classified as
a permanent forest determined to be needed for
forest purposes pursuant to par. 6, Sec. 3 of PD
705, as amended. PICOP then proceeded to claim
that the area should remain forest land if the
purpose of the presidential fiat were to be followed.
It stated:
Technically, the areas applied for by Base
Metals are classified as a permanent forest
being land of the public domain determined
to be needed for forest purposes
(Paragraph 6, Section 3 of Presidential
Decree No. 705, as amended) If these
areas then are classified and determined to
be needed for forest purpose then they
should be developed and should remain as
forest lands. Identifying, delineating and
declaring them for other use or uses
defeats the purpose of the aforecited
presidential fiats. Again, if these areas
would be delineated from Oppositor's forest
concession, the forest therein would be
destroyed and be lost beyond recovery. 17
Base Metals met this argument head on in its
Answer18 dated December 1, 1997, in which it
contended that PD 705 does not exclude mining
operations in forest lands but merely requires that
there be proper notice to the licensees of the area.
Again in its Petition19 dated January 25, 2003
assailing the reinstatement of Base Metals' MPSA,
PICOP argued that RA 7942 expressly prohibits
mining operations in plantation areas such as
PICOP's concession area. Hence, it posited that the
MGB Panel of Arbitrators did not commit grave
abuse of discretion when it ruled that without
PICOP's consent, the area is closed to mining
location.
It is true though that PICOP expounded on the
applicability of RA 3092, RA 7586, and RA 7942 for
the first time in its motion for reconsideration of the
appellate court's Decision. It was only in its motion
for reconsideration that PICOP argued that the area
covered by PTLA No. 47 and IFMA No. 35 are
permanent forest lands covered by RA 7586 which
cannot be entered for mining purposes, and shall
remain indefinitely as such for forest uses and
cannot be excluded or diverted for other uses
except after reclassification through a law enacted
by Congress.
Even so, we hold that that the so-called new
issues raised by PICOP are well within the issues
framed by the parties in the proceedings a
quo. Thus, they are not, strictly speaking, being
raised for the first time on appeal.20 Besides, Base
Metals and the OSG have been given ample
opportunity, by way of the pleadings filed with this
Court, to respond to PICOP's arguments. It is in the
best interest of justice that we settle the crucial
question of whether the concession area in dispute
is open to mining activities.
We should state at this juncture that the policy of
multiple land use is enshrined in our laws towards
the end that the country's natural resources may be
rationally explored, developed, utilized and
conserved. The Whereas clauses and declaration of
policies of PD 705 state:
WHEREAS, proper classification,
management and utilization of the lands of
the public domain to maximize their
productivity to meet the demands of our
increasing population is urgently needed;
WHEREAS, to achieve the above purpose,
it is necessary to reassess the multiple
uses of forest lands and resources before
allowing any utilization thereof to optimize
the benefits that can be derived therefrom;
… notification, holders of mining rights shall
Sec. 2. Policies.—The State hereby adopts
the following policies:
a) The multiple uses of forest lands
shall be oriented to the
development and progress
requirements of the country, the
advancement of science and
technology, and the public welfare;
In like manner, RA 7942, recognizing the
equiponderance between mining and timber rights,
gives a mining contractor the right to enter a timber
concession and cut timber therein provided that the
surface owner or concessionaire shall be properly
compensated for any damage done to the property
as a consequence of mining operations. The
pertinent provisions on auxiliary mining rights state:
Sec. 72. Timber Rights.—Any provision of
law to the contrary notwithstanding, a
contractor may be granted a right to cut
trees or timber within his mining areas as
may be necessary for his mining operations
subject to forestry laws, rules and
regulations: Provided, That if the land
covered by the mining area is already
covered by existing timber concessions, the
volume of timber needed and the manner of
cutting and removal thereof shall be
determined by the mines regional director,
upon consultation with the contractor, the
timber concessionair/permittee and the
Forest Management Bureau of the
Department: Provided, further, That in case
of disagreement between the contractor
and the timber concessionaire, the matter
shall be submitted to the Secretary whose
decision shall be final. The contractor shall
perform reforestation work within his mining
area in accordance with forestry laws, rules
and regulations.
…
Sec. 76. Entry into Private Lands and
Concession Areas.—Subject to prior
not be prevented from entry into private
lands and concession areas by surface
owners, occupants, or concessionaires
when conducting mining operations
 therein: Provided, That any damage done
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: Provided, further, That to
guarantee such compensation, the person
authorized to conduct mining operation
shall, prior thereto, post a bond with the
regional director based on the type of
properties, the prevailing prices in and
around the area where the mining
operations are to be conducted, with surety
or sureties satisfactory to the regional
director.
With the foregoing predicates, we shall now
proceed to analyze PICOP's averments.
PICOP contends that its concession area is within
the Agusan-Surigao-Davao Forest Reserve
established under Proclamation No. 369 and is
closed to mining application citing several
paragraphs of Sec. 19 of RA 7942.
The cited provision states:
Sec. 19 Areas Closed to Mining
Applications.—Mineral agreement or
financial or technical assistance agreement
applications shall not be allowed:
(a) In military and other government
reservations, except upon prior written
clearance by the government agency
concerned;
…
(d) In areas expressly prohibited by law;
… undertook
(f) Old growth or virgin forests, proclaimed
watershed forest reserves, wilderness
areas, mangrove forests, mossy forests,
national parks, provincial/municipal forests,
parks, greenbelts, game refuge and bird
sanctuaries as defined by law in areas
expressly prohibited under the National
Ingrated Protected Areas System (NIPAS)
under Republic Act No. 7586, Department
Administrative Order No. 25, series of 1992
and other laws. [emphasis supplied]
We analyzed each of the categories under which
PICOP claims that its concession area is closed to
mining activities and conclude that PICOP's
contention must fail.
Firstly, assuming that the area covered by Base
Metals' MPSA is a government reservation, defined
as proclaimed reserved lands for specific purposes
other than mineral reservations,21 such does not
necessarily preclude mining activities in the area.
Sec. 15(b) of DAO 96-40 provides that government
reservations may be opened for mining applications
upon prior written clearance by the government
agency having jurisdiction over such reservation.
Sec. 6 of RA 7942 also provides that mining
operations in reserved lands other than mineral
reservations may be undertaken by the DENR,
subject to certain limitations. It provides:
Sec. 6. Other Reservations.—Mining
operations in reserved lands other than
mineral reservations may be undertaken by
the Department, subject to limitations as
herein provided. In the event that the
Department cannot undertake such
activities, they may be undertaken by a
qualified person in accordance with the
rules and regulations promulgated by the
Secretary. The right to develop and utilize
the minerals found therein shall be awarded
by the President under such terms and
conditions as recommended by the Director
and approved by the
Secretary: Provided, That the party who
the exploration of said
reservations shall be given priority. The
mineral land so awarded shall be
automatically excluded from the reservation
during the term of the agreement: Provided,
further, That the right of the lessee of a
valid mining contract existing within the
reservation at the time of its establishment
shall not be prejudiced or impaired.
Secondly, RA 7942 does not disallow mining
applications in all forest reserves but only
those proclaimed aswatershed forest reserves.
There is no evidence in this case that the area
covered by Base Metals' MPSA has been
proclaimed as watershed forest reserves.
Even granting that the area covered by the MPSA is
part of the Agusan-Davao-Surigao Forest Reserve,
such does not necessarily signify that the area is
absolutely closed to mining activities. Contrary to
PICOP's obvious misreading of our decision
in Apex Mining Co., Inc. v. Garcia, supra, to the
effect that mineral agreements are not allowed in
the forest reserve established under Proclamation
369, the Court in that case actually ruled that
pursuant to PD 463 as amended by PD 1385, one
can acquire mining rights within forest reserves,
such as the Agusan-Davao-Surigao Forest
Reserve, by initially applying for a permit to
prospect with the Bureau of Forest and
Development and subsequently for a permit to
explore with the Bureau of Mines and Geosciences.
Moreover, Sec. 18 RA 7942 allows mining even in
timberland or forestty subject to existing rights and
reservations. It provides:
Sec. 18. Areas Open to Mining
Operations.—Subject to any existing rights
or reservations and prior agreements of all
parties, all mineral resources in public or
private lands, including timber or
forestlands as defined in existing laws, shall
be open to mineral agreements or financial
or technical assistance agreement
applications. Any conflict that may arise
under this provision shall be heard and
resolved by the panel of arbitrators.
Similarly, Sec. 47 of PD 705 permits mining
operations in forest lands which include the public
forest, the permanent forest or forest reserves, and
forest reservations.22 It states:
 Sec. 47. Mining Operations.—Mining
operations in forest lands shall be regulated
and conducted with due regard to
protection, development and utilization of
other surface resources. Location,
prospecting, exploration, utilization or
exploitation of mineral resources in forest
reservations shall be governed by mining
laws, rules and regulations. No location,
prospecting, exploration, utilization, or
exploitation of mineral resources inside
forest concessions shall be allowed unless
proper notice has been served upon the
licensees thereof and the prior approval of
the Director, secured.
…
Significantly, the above-quoted provision does not
require that the consent of existing licensees be
obtained but that they be notified before mining
activities may be commenced inside forest
concessions.
DENR Memorandum Order No. 03-98, which
provides the guidelines in the issuance of area
status and clearance or consent for mining
applications pursuant to RA 7942, provides that
timber or forest lands, military and other
government reservations, forest reservations, forest
reserves other than critical watershed forest
reserves, and existing DENR Project Areas within
timber or forest lands, reservations and reserves,
among others, are open to mining applications
subject to area status and clearance.
To this end, area status clearances or land status
certifications have been issued to Base Metals
relative to its mining right application, to wit:
II. MPSA No. 010
1. Portion colored green is the area
covered by the aforestated
Timberland Project No. 31-E, Block
A and Project No. 59-C, Block A,
L.C. Map No. 2466 certified as
such on June 30, 1961; and
2. Shaded brown represent CADC
claim.23
III. MPSA No. 011
1. The area applied covers the
Timberland, portion of Project No.
31-E, Block-E, L.C. Map No. 2468
and Project No. 36-A Block II,
Alienable and Disposable Land,
L.C. Map No. 1822, certified as
such on June 30, 1961 and
January 1, 1955, respectively;
2. The green shade is the
remaining portion of Timber Land
Project;
3. The portion colored brown is an
applied and CADC areas;
4. Red shade denotes alienable
and disposable land.24
IV. MPSA No. 012
Respectfully returned herewith is
the folder of Base Metals Mineral
Resources Corporation, applied
under Mineral Production Sharing
Agreement (MPSA (XIII) 012),
referred to this office per
memorandum dated August 5,
1997 for Land status certification
and the findings based on available
references file this office, the site is
within the unclassified Public Forest
of the LGU, Rosario, Agusan del
Sur. The shaded portion is the
wilderness area of PICOP
Resources Incorporated (PRI),
Timber License Agreement.25
V. MPSA No. 013
1. The area status shaded green
falls within Timber Land, portion of
Project No. 31-E, Block-A, Project
No. 59-C, Block-A, L.C. Map No.
2468 certified as such on June 30,
1961;
2. Colored brown denotes a portion
claimed as CADC areas;
3. Violet shade represent a part of
reforestation project of PRI
concession; and
4. The yellow color is identical to
unclassified Public Forest of said
LGU and the area inclosed in Red
is the wilderness area of PICOP
Resources, Inc. (PRI), Timber
License Agreement.26
Thirdly, PICOP failed to present any evidence that
the area covered by the MPSA is a protected
wilderness area designated as an initial component
of the NIPAS pursuant to a law, presidential decree,
presidential proclamation or executive order as
required by RA 7586.
Sec. 5(a) of RA 7586 provides:
Sec. 5. Establishment and Extent of the
System.—The establishment and
operationalization of the System shall
involve the following:
(a) All areas or islands in the
Philippines proclaimed, designated or set
aside, pursuant to a law, presidential
decree, presidential proclamation or
executive order as national park, game
refuge, bird and wildlife
sanctuary, wilderness area, strict nature
reserve, watershed, mangrove reserve, fish
sanctuary, natural and historical landmark,
protected and managed
landscape/seascape as well as identified
virgin forests before the effectivity of this
Act are hereby designated as initial
components of the System. The initial
components of the System shall be
governed by existing laws, rules and
regulations, not inconsistent with this Act.
Although the above-cited area status and Constitution. In Tan vs. Director
clearances, particularly those pertaining to MPSA Forestry, this Court held:
Nos. 012 and 013, state that portions thereof are
within the wilderness area of PICOP, there is no "x x x A timber license is an
showing that this supposed wilderness area has instrument by which the State
been proclaimed, designated or set aside as such, regulates the utilization and
pursuant to a law, presidential decree, presidential disposition of forest resources to
proclamation or executive order. It should be the end that public welfare is
emphasized that it is only when this area has been promoted. A timber license is not
so designated that Sec. 20 of RA 7586, which a contract within the purview of
prohibits mineral locating within protected areas, the due process clause; it is only
becomes operational. a license or a privilege, which
can be validly withdrawn
From the foregoing, there is clearly no merit to whenever dictated by public
PICOP's contention that the area covered by Base interest or public welfare as in
Metals' MPSA is, by law, closed to mining activities. this case.
Finally, we do not subscribe to PICOP's argument 'A license is merely a
that the Presidential Warranty dated September 25, permit or privilege to do
1968 is a contract protected by the non-impairment what otherwise would be
clause of the 1987 Constitution. unlawful, and is not a
contract between the
An examination of the Presidential Warranty at once authority, federal, state, or
reveals that it simply reassures PICOP of the municipal, granting it and
government's commitment to uphold the terms and the person to whom it is
conditions of its timber license and guarantees granted; neither is it a
PICOP's peaceful and adequate possession and property or a property right,
enjoyment of the areas which are the basic sources nor does it create a vested
of raw materials for its wood processing complex. right; nor is it taxation' (C.J.
The warranty covers only the right to cut, collect, 168). Thus, this Court held
and remove timber in its concession area, and does that the granting of license
not extend to the utilization of other resources, such does not create irrevocable
as mineral resources, occurring within the rights, neither is it property
concession. or property rights (People
vs. Ong Tin, 54 O.G. 7576).
x x x"
The Presidential Warranty cannot be considered a
contract distinct from PTLA No. 47 and IFMA No.
35. We agree with the OSG's position that it is We reiterated this pronouncement in Felipe
merely a collateral undertaking which cannot Ysmael, Jr. & Co., Inc. vs. Deputy
amplify PICOP's rights under its timber license. Our Executive Secretary:
definitive ruling in Oposa v. Factoran27 that a timber
license is not a contract within the purview of the "x x x Timber licenses, permits and
non-impairment clause is edifying. We declared: license agreements are the
principal instruments by which the
Needless to say, all licenses may thus be State regulates the utilization and
revoked or rescinded by executive action. It disposition of forest resources to
is not a contract, property or a property right the end that public welfare is
protected by the due process clause of the promoted. And it can hardly be
gainsaid that they merely
of evidence a privilege granted by
the State to qualified entities,
and do not vest in the latter a
permanent or irrevocable right to
the particular concession area
and the forest products therein.
They may be validly amended,
modified, replaced or rescinded
by the Chief Executive when
national interests so
require. Thus, they are not
deemed contracts within the
purview of the due process of law
clause [See Sections 3(ee) and 20
of Pres. Decree No. 705, as
amended. Also, Tan v. Director of
Forestry, G.R. No. L-24548,
October 27, 1983, 125 SCRA 302]."
Since timber licenses are not contracts,
the non-impairment clause, which reads:
"Sec. 10. No law impairing the
obligation of contracts shall be
passed."
cannot be invoked.28 [emphasis supplied]
The Presidential Warranty cannot, in any manner,
be construed as a contractual undertaking assuring
PICOP of exclusive possession and enjoyment of
its concession areas. Such an interpretation would
result in the complete abdication by the State in
favor of PICOP of the sovereign power to control
and supervise the exploration, development and
utilization of the natural resources in the area.
In closing, we should lay emphasis on the fact that
the reinstatement of Base Metals' MPSA does not
automatically result in its approval. Base Metals still
has to comply with the requirements outlined in
DAO 96-40, including the publication/posting/radio
announcement of its mineral agreement application.
IN VIEW OF THE FOREGOING, the instant petition
is DENIED. The Decision of the Court of Appeals
November 28, 2003 is AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
G.R. No. 104988 June 18, 1996 the Bureau of Forest Development (BFD) under corresponding certificate of lumber origin, auxiliary
Certificate of Registration No. NRD-4-092590-0469. invoices, tally sheets, and delivery receipts from the
MUSTANG LUMBER, INC., petitioner, Its permit as such was to expire on 25 September source of the invoices covering the lumber to prove
vs. 1990. the legitimacy of their source and origin.4
HON. COURT OF APPEALS, HON. FULGENCIO
S. FACTORAN, JR., Secretary, Department of Respondent Secretary Fulgencio S. Factoran, Jr., Parenthetically, it may be stated that under an
Environment and Natural Resources (DENR), and respondent Atty. Vincent A. Robles were, administrative seizure the owner retains the
and ATTY. VINCENT A. ROBLES, Chief, Special during all the time material to these cases, the physical possession of the seized articles. Only an
Actions and Investigations Division, Secretary of the Department of Environment and inventory of the articles is taken and signed by the
DENR, respondents. Natural Resources (DENR) and the Chief of the owner or his representative. The owner is prohibited
Special Actions and Investigation Division (SAID) of from disposing them until further orders.5
G.R. No. 106424 June 18, 1996 the DENR, respectively.
On 10 April 1990, counsel for the petitioner sent a
PEOPLE OF THE PHILIPPINES, petitioner, The material operative facts are as follows: letter to Robles requesting an extension of fifteen
vs. days from 14 April 1990 to produce the required
HON. TERESITA DIZON-CAPULONG, in her On 1 April 1990, acting on an information that a documents covering the seized articles because
capacity as the Presiding Judge, Regional Trial huge stockpile of narra flitches, shorts, and slabs some of them, particularly the certificate of lumber
Court, National Capital Judicial Region, Branch were seen inside the lumberyard of the petitioner in origin, were allegedly in the Province of Quirino
172, Valenzuela, Metro Manila, and RI CHUY Valenzuela, Metro Manila, the SAID organized a Robles denied the motion on the ground that the
PO, respondents. team of foresters and policemen and sent it to documents being required from the petitioner must
conduct surveillance at the said lumberyard. In the accompany the lumber or forest products placed
G.R. No. 123784 June 18, 1996 course thereof, the team members saw coming out under seizure.6
from the lumberyard the petitioner's truck, with Plate
MUSTANG LUMBER, INC., petitioner, No. CCK-322, loaded with lauan and almaciga On 11 April 1990, Robles submitted his
vs. lumber of assorted sizes and dimensions. Since the memorandum-report recommending to Secretary
HON. COURT OF APPEALS, ATTY. VINCENT A. driver could not produce the required invoices and Factoran the following:
ROBLES, Chief, Special Actions and transport documents, the team seized the truck
Investigation Division, Department of together with its cargo and impounded them at the 1. Suspension and subsequent
Environment and Natural Resources (DENR), DENR compound at Visayas Avenue, Quezon cancellation of the lumber Dealer's
ATTY. NESTOR V. GAPUSAN, TIRSO P. PARIAN, City.1 The team was not able to gain entry into the Permit of Mustang Lumber, Inc. for
JR., and FELIPE H. CALLORINA, premises because of the refusal of the owner.2 operating an unregistered
JR., respondents. lumberyard and resaw mill and
On 3 April 1990, the team was able to secure a possession of Almaciga Lumber (a
search warrant from Executive Judge Adriano R. banned specie) without the
Osorio of the Regional Trial Court (RTC) of required documents;
Valenzuela, Metro Manila. By virtue thereof, the
DAVIDE, JR., J.:p team seized on that date from the petitioner's 2. Confiscation of the lumber
lumberyard four truckloads of narra shorts, seized at the Mustang Lumberyard
The first and third case, G.R. No. 104988 and G.R. trimmings, and slabs; a negligible number of narra including the truck with Plate No.
No. 123784, were originally assigned to the Second lumber; and approximately 200,000 board feet of CCK-322 and the lumber loaded
and Third Divisions of the Court, respectively. They lumber and shorts of various species including herein [sic] now at the DENR
were subsequently consolidated with the second, a almaciga and supa.3 compound in the event its owner
case of the Court en banc. fails to submit documents showing
On 4 April 1990, the team returned to the premises legitimacy of the source of said
Petitioner, a domestic corporation with principal of the petitioner's lumberyard in Valenzuela and lumber within ten days from date of
office at Nos. 1350-1352 Juan Luna Street, Tondo, placed under administrative seizure the remaining seizure;
Manila, and with a Lumberyard at Fortune Street, stockpile of almaciga, supa, and lauan lumber with
Fortune Village, Paseo de Blas, Valenzuela, Metro a total volume of 311,000 board feet because the 3. Filing of criminal charges against
Manila, was duly registered as a lumber dealer with petitioner failed to produce upon demand the Mr. Ri Chuy Po, owner of Mustang
 Lumber Inc. and Mr. Ruiz, or if the
circumstances warrant for illegal
possession of narra and almaciga
lumber and shorts if and when
recommendation no. 2 pushes
through;
4. Confiscation of Trucks with Plate
No. CCS-639 and CDV. 458 as well
as the lumber loaded therein for
transport lumber using "recycled"
documents.7
On 23 April 1990, Secretary Factoran issued an
order suspending immediately the petitioner's
lumber-dealer's permit No. NRD-4-092590-0469
and directing the petitioner to explain in writing
within fifteen days why its lumber-dealer's permit
should not be cancelled.
On the same date, counsel for the petitioner sent
another letter to Robles informing the latter that the
petitioner had already secured the required
documents and was ready to submit them. None,
however, was submitted.8
On 3 May 1990, Secretary Factoran issued another
order wherein, after reciting the events which took
place on 1 April and 3 April 1990, he ordered
"CONFISCATED in favor of the government to be
disposed of in accordance with law" the
approximately 311,000 board feet of lauan, supa,
and almaciga lumber, shorts, and sticks found
inside the petitioner's lumberyard.9
On 11 July 1990, the petitioner filed with the RTC of
Manila a petition for certiorari and prohibition with a
prayer for a restraining order or preliminary
injunction against Secretary Fulgencio S. Factoran,
Jr., and Atty. Vincent A. Robles. The case
(hereinafter, the FIRST CIVIL CASE) was docketed
as Civil Case No. 90-53648 and assigned to Branch
35 of the said court. The petitioner questioned
therein (a) the seizure on 1 April 1990, without any
search and seizure order issued by a judge, of its
truck with Plate No. CCK-322 and its cargo of
assorted lumber consisting of apitong, tanguile, and
lauan of different sizes and dimensions with a total
value of P38,000.00; and (b) the orders of Secretary
Factoran of 23 April 1990 for lack of prior notice and
hearing and of 3 May 1990 for violation of Section
2, Article III of the Constitution.
On 17 September 1990, in response to reports that
violations of P.D. No. 705 (The Revised Forestry
Code of the Philippines), as amended, were
committed and acting upon instruction of Robles
and under Special Order No. 897, series of 1990, a
team of DENR agents went to the business
premises of the petitioner located at No. 1352 Juan
Luna Street, Tondo, Manila. The team caught the
petitioner operating as a lumber dealer although its
lumber-dealer's permit had already been
suspended or 23 April 1990. Since the gate of the
petitioner's lumberyard was open, the team went
inside and saw an owner-type jeep with a trailer
loaded with lumber. Upon investigation, the team
was informed that the lumber loaded on the trailer
was to be delivered to the petitioner's customer. It
also came upon the sales invoice covering the
transaction. The members of the team then
introduced themselves to the caretaker, one Ms.
Chua, who turned out to be the wife of the
petitioner's president and general manager, Mr. Ri
Chuy Po, who was then out of town. The team's
photographer was able to take photographs of the
stockpiles of lumber including newly cut ones, fresh
dust around sawing or cutting machineries and
equipment, and the transport vehicles loaded with
lumber. The team thereupon effected a constructive
seizure of approximately 20,000 board feet of lauan
lumber in assorted sizes stockpiled in the premises
by issuing a receipt
therefor. 10
As a consequence of this 17 September 1990
incident, the petitioner filed with the RTC of Manila
a petition for certiorari and prohibition. The case
(hereinafter, the SECOND CIVIL CASE) was
docketed as Civil Case No. 90-54610 and assigned
to Branch 24 of the said court.
In the meantime, Robles filed with the Department
of Justice (DOJ) a complaint against the petitioner's
president and general manager, Ri Chuy Po, for
violation of Section 68 of P.D. No. 705, as amended
by E.O. No. 277. After appropriate preliminary
investigation, the investigating prosecutor, Claro
Arellano, handed down a resolution 11whose
dispositive portion reads:
WHEREFORE, premises
considered, it is hereby
recommended that an information
be filed against respondent Ri Chuy
Po for illegal possession of
approximately 200,000 bd. ft. of
lumber consisting of almaciga and
supa and for illegal shipment of
almaciga and lauan in violation of
Sec. 68 of PD 705 as amended by
E.O. 277, series of 1987.
It is further recommended that the
30,000 bd. ft. of narra shorts,
trimmings and slabs covered by
legal documents be released to the
rightful owner, Malupa. 12
This resolution was approved by Undersecretary of
Justice Silvestre H. Bello III, who served as
Chairman of the Task Force on Illegal Logging." 13
On the basis of that resolution, an information was
filed on 5 June 1991 by the DOJ with Branch 172 of
the RTC of Valenzuela, charging Ri Chuy Po with
the violation of Section 58 of P.D. No. 705, as
amended, which was docketed as Criminal Case
No. 324-V-91 (hereinafter, the CRIMINAL CASE).
The accusatory portion of the information reads as
follows:
That on or about the 3rd day of
April 1990, or prior to or
subsequent thereto, within the
premises and vicinity of Mustang
Lumber, Inc. in Fortune Village,
Valenzuela, Metro Manila, and
within the jurisdiction of this
Honorable Court, the above-named
accused, did then and there wilfully,
feloniously and unlawfully have in
his possession truckloads of
almaciga and lauan and
approximately 200,000 bd. ft. of
lumber and shorts of various
species including almaciga and
 supa, without the legal documents
as required under existing forest
laws and
regulations. 14
On 7 June 1991, Branch 35 of the RTC of Manila
rendered its decision 15 in the FIRST CIVIL CASE,
the dispositive portion of which reads:
WHEREFORE, judgment in this
case is rendered as follows:
1. The Order of Respondent
Secretary of the DENR, the
Honorable Fulgencio S. Factoran,
Jr., dated 3 May 1990 ordering the
confiscation in favor of the
Government the approximately
311,000 board feet of Lauan, supa,
end almaciga Lumber, shorts and
sticks, found inside and seized from
the Lumberyard of the petitioner at
Fortune Drive, Fortune Village,
Paseo de Blas, Valenzuela, Metro
Manila, on April 4, 1990 (Exhibit
10), is hereby set aside and
vacated, and instead the
respondents are required to report
and bring to the Hon. Adriano
Osorio, Executive Judge, Regional
Trial Court, NCR, Valenzuela,
Metro Manila, the said 311,000
board feet of Lauan, supa and
almaciga Lumber, shorts and
sticks, to be dealt with as directed
by Law;
2. The respondents are required to
initiate and prosecute the
appropriate action before the
proper court regarding the Lauan
and almaciga lumber of assorted
sizes and dimensions Loaded in
petitioner's truck bearing Plate No.
CCK-322 which were seized on
April 1, 1990;
3. The Writ of Preliminary Injunction
issued by the Court on August 2,
1990 shall be rendered functus
oficio upon compliance by the
respondents with paragraphs 1 and
2 of this judgment;.
4. Action on the prayer of the
petitioner that the Lauan, supa and
almaciga lumber, shorts and sticks
mentioned above in paragraphs 1
and 2 of this judgment be returned
to said petitioner is withheld in this
case until after the proper court has
taken cognizance and determined
how those Lumber, shorts and
sticks should be disposed of; and
5. The petitioner is ordered to pay
the costs.
SO ORDERED.
In resolving the said case, the trial court held that
the warrantless search and seizure on 1 April 1990
of the petitioner's truck, which was moving out from
the petitioner's lumberyard in Valenzuela, Metro
Manila, loaded with large volumes of lumber without
covering document showing the legitimacy of its
source or origin did not offend the constitutional
mandate that search and seizure must be
supported by a valid warrant. The situation fell
under one of the settled and accepted exceptions
where warrantless search and seizure is
justified, viz., a search of a moving vehicle. 16 As to
the seizure of a large volume of almaciga, supa,
and lauan lumber and shorts effected on 4 April
1990, the trial court ruled that the said seizure was
a continuation of that made the previous day and
was still pursuant to or by virtue of the search
warrant issued by Executive Judge Osorio whose
validity the petitioner did not even question. 17 And,
although the search warrant did not specifically
mention almaciga, supa, and lauan lumber and
shorts, their seizure was valid because it is settled
that the executing officer is not required to ignore
contrabands observed during the conduct of the
search.18
The trial court, however, set aside Secretary
Factoran's order of 3 May 1990 ordering the
confiscation of the seized articles in favor of the
Government for the reason that since the articles
were seized pursuant to the search warrant issued
by Executive Judge Osorio they should have been
returned to him in compliance with the directive in
the warrant.
As to the propriety of the 23 April 1990 order of
Secretary Factoran, the trial court ruled that the
same had been rendered moot and academic by
the expiration of the petitioner's lumber dealer's
permit on 25 September 1990, a fact the petitioner
admitted in its memorandum.
The petitioner forthwith appealed from the decision
in the FIRST CIVIL CASE to the Court of Appeals,
which docketed the appeal as CA-G.R. SP No.
25510.
On 7 July 1991, accused Ri Chuy Po filed in the
CRIMINAL CASE a Motion to Quash and/or to
Suspend Proceedings based on the following
grounds: (a) the information does not charge an
offense, for possession of lumber, as opposed
to timber, is not penalized in Section 68 of P.D. No.
705, as amended, and even
grantingarguendo that lumber falls within the
purview of the said section, the same may not be
used in evidence against him for they were taken by
virtue of an illegal seizure; and (b) Civil Case No.
90-53648 of Branch 35 of the RTC of Manila, the
FIRST CIVIL CASE, then pending before the Court
of Appeals, which involves the legality of the
seizure, raises a prejudicial question. 19
The prosecution opposed the motion alleging
that lumber is included in Section 68 of P.D. No.
705, as amended, and possession thereof without
the required legal documents is penalized therein. It
referred to Section 3.2 of DENR Administrative
Order No. 19, series of 1989, for the definitions
of timber and lumber, and then argued that
exclusion of lumber from Section 68 would defeat
the very purpose of the law, i.e., to minimize, if not
halt, illegal logging that has resulted in the rapid
denudation of our forest resources. 20
In her order of 16 August 1991 in the CRIMINAL
CASE, 21 respondent Judge Teresita Dizon-
Capulong granted the motion to quash and
dismissed the case on the ground that "possession
of lumber without the legal documents required by
forest laws and regulations is not a crime. 22
Its motion for reconsideration having been denied in
the order of 18 October 1991, 23 the People filed a
petition for certiorari with this Court in G.R. No.
106424, wherein it contends that the respondent
Judge acted with grave abuse of discretion in
granting the motion to quash and in dismissing the
case.
On 29 November 1991, the Court of Appeals
rendered a decision 24 in CA-G.R. SP
No. 25510 dismissing for lack of merit the
petitioner's appeal from the decision in the FIRST
CIVIL CASE and affirming the trial court's rulings on
the issues raised. As to the claim that the truck was
not carrying contraband articles since there is no
law punishing the possession of lumber, and
that lumber is not timber whose possession without
the required legal documents is unlawful under P.D.
No. 705, as amended, the Court of Appeals held:
This undue emphasis on lumber or
the commercial nature of the forest
product involved has always been
foisted by those who claim to be
engaged in the legitimate business
of lumber dealership. But what is
important to consider is that when
appellant was required to present
the valid documents showing its
acquisition and lawful possession
of the lumber in question, it failed to
present any despite the period of
extension granted to it. 25
The petitioner's motion to reconsider the said
decision was denied by the Court of Appeals in its
resolution of 3 March 1992. 26 Hence, the petitioner
came to this Court by way of a petition for review
on certiorari in G.R. No. 104988, which was filed on
2 May 1992. 27
On 24 September 1992, Branch 24 of the RTC of
Manila handed down a decision in the SECOND
CIVIL CASE dismissing the petition
for certiorari and prohibition because (a) the
petitioner did not exhaust administrative remedies;
(b) when the seizure was made on 17 September
1990 the petitioner could not lawfully sell lumber, as
its license was still under suspension; (c) the
seizure was valid under Section 68-A of P.D. No.
705, as amended; and (d) the seizure was justified
as a warrantless search and seizure under Section
80 of P.D. No. 705, as amended.
The petitioner appealed from the decision to the
Court of Appeals, which docketed the appeal
as CA-G.R. SP No.33778.
In its decision 28 of 31 July 1995, the Court of
Appeals dismissed the petitioner's appeal in CA-
G.R. SP No. 33778 for lack of merit and sustained
the grounds relied upon by the trial court in
dismissing the SECOND CIVIL CASE. Relying on
the definition of "lumber" by Webster, viz., "timber or
logs, especially after being prepared for the
market," and by the Random House Dictionary of
the English Language, viz., "wood, esp. when
suitable or adapted for various building purposes,"
the respondent Court held that since wood is
included in the definition of forest product in Section
3(q) of P.D. No. 705, as amended, lumber is
necessarily included in Section 68 under the
term forest product.
The Court of Appeals further emphasized that a
forest officer or employee can seize the forest
product involved in a violation of Section 68 of P.D.
No. 705 pursuant to Section 80 thereof, as
amended by P.D. No. 1775, which provides in part
as follows:
Sec. 80. Arrest, Institution of
Criminal Actions. -- A forest officer
or employee of the Bureau or any
personnel of the Philippine
Constabulary/Integrated National
Police shall arrest even without
warrant any person who has
committed or is committing in his
presence any of the offenses
defined in this chapter. He shall
also seize and confiscate, in favor
of the Government, the tools and
equipment used in committing the
offense, or the forest products cut,
gathered or taken by the offender in
the process of committing the
offense.
Among the offenses punished in the chapter
referred to in said Section 80 are the cutting,
gathering, collection, or removal of timber or other
forest products or possession of timber or other
forest products without the required legal
documents.
Its motion to reconsider the decision having been
denied by the Court of Appeals in the resolution of 6
February 1996, the petitioner filed with this Court on
27 February 1996 a petition for review
on certiorari in G.R. No. 123784.
We shall now resolve these three cases starting
with G.R. No. 106424 with which the other two were
consolidated.
G.R. No. 106424
The petitioner had moved to quash the information
in Criminal Case No. 324-V-91 on the ground that it
does not charge an offense. Respondent Judge
Dizon-Capulong granted the motion reasoning that
the subject matter of the information in the
CRIMINAL CASE is LUMBER, which is neither
"timber" nor "other forest product" under Section 68
of P.D. No. 705, as amended, and hence,
possession thereof without the required legal
documents is not prohibited and penalized under
the said section.
Under paragraph (a), Section 3, Rule 117 of the
Rules of Court, an information may be quashed on
the ground that the facts alleged therein do not
constitute an offense. It has been said that "the test
for the correctness of this ground is the sufficiency
of the averments in the information, that is, whether
the facts alleged, if hypothetically admitted,
constitute the elements of the
offense, 29 and matters aliunde will not be
considered." Anent the sufficiency of the
information, Section 6, Rule 110 of the Rules of
Court requires, inter alia, that the information state
the acts or omissions complained of as constituting
the offense.
Respondent Ri Chuy Po is charged with the
violation of Section 68 of P.D. No. 705, as amended
by E.O. No. 277, which provides:
Sec. 68. Cutting, Gathering and/or
collecting Timber, or Other Forest
Products Without License. -- Any
person who shall cut, gather,
collect, remove timber or other
forest products from any forest
land, or timber from alienable or
disposable public land, or from
private land, without any authority,
or possess timber or other forest
products without the legal
documents as required under
existing forest laws and regulations,
shall be punished with the penalties
imposed under Articles 309 and
310 of the Revised Penal
Code: Provided, That in the case of
partnerships, associations, or
corporations, the officers who
ordered the cutting, gathering,
collection or possession shall be
liable, and if such officers are
aliens, they shall, in addition to the
penalty, be deported without further
proceedings on the part of the
Commission on Immigration and
Deportation.
The Court shall further order the
confiscation in favor of the
government of the timber or any
forest products cut, gathered,
collected, removed, or possessed,
as well as the machinery,
equipment, implements and tools
illegally used in the area where the
timber or forest products are found.
Punished then in this section are (1)
the cutting, gathering, collection,
or removal of timber or other forest
products from the places therein mentioned
without any authority; and (b) possession of beeswax, nipa,
timber forest products without the legal rattan, or other
documents as required under existing forest forest plant, the
laws and regulations. associated water,
fish game, scenic,
Indeed, the word lumber does not appear in Section historical,
68. But conceding ex gratia that this omission recreational and
amounts to an exclusion of lumber from the geological
section's coverage, do the facts averred in the resources in forest
information in the CRIMINAL CASE validly charge a lands.
violation of the said section?
It follows then that lumber is only one of the items
A cursory reading of the information readily leads us covered by the information. The public and the
to an infallible conclusion that lumber is not solely private respondents obviously miscomprehended
its subject matter. It is evident therefrom that what the averments in the information. Accordingly, even
are alleged to be in the possession of the private if lumber is not included in Section 68, the other
respondent, without the required legal documents, items therein as noted above fall within the ambit of
are truckloads of the said section, and as to them, the information
validly charges an offense.
(1) almaciga and
lauan; and Our respected brother, Mr. Justice Jose C. Vitug,
suggests in his dissenting opinion that this Court go
beyond the four corners of the information for
(2) approximately
enlightenment as to whether the information
200,000 bd. ft.
exclusively refers to lumber. With the aid of the
of lumber and
shorts of various pleadings and the annexes thereto, he arrives at the
conclusion that "only lumber has been envisioned in
species including
the indictment."
almaciga and supa.
The majority is unable to subscribe to his view.
The "almaciga and lauan" specifically
mentioned in no. (1) are not described as First, his proposition violates the rule that only the
facts alleged in the information vis-a-vis the law
"lumber." They cannot refer to the "lumber"
violated must be considered in determining whether
in no. (2) because they are separated by
an information charges an offense.
the words "approximately 200,000 bd. ft."
with the conjunction "and," and not with the
preposition "of." They must then be raw Second, the pleadings and annexes he resorted to
forest products or, more are insufficient to justify his conclusion. On the
specifically, timbers under Section 3(q) of contrary, the Joint Affidavit of Melencio Jalova, Jr.,
and Araman Belleng, which is one of the annexes
P.D. No. 705, as amended, which reads:
he referred to, 30 cannot lead one to infer that what
the team seized was all lumber. Paragraph 8
Sec. 3. Definitions. --
thereof expressly states:
xxx xxx xxx
8. That when inside
the compound, the
(q) Forest product team found
means timber, approximately four
firewood, bark, tree (4) truckloads
top, resin, gum, of narra shorts,
wood, oil, honey,
 trimmings and slab
s and a negligible
amount of narra
lumber, and
approximately
200,000 bd. ft. of
lumber and shorts
of various species
including almaciga
and supa which are
classified as
prohibited wood
species. (emphasis
supplied)
In the same vein, the dispositive portion of
the resolution31 of the investigating
prosecutor, which served as the basis for
the filing of the information, does not limit
itself to lumber; thus:
WHEREFORE, premises
considered, it is hereby
recommended that an information
be filed against respondent Ri Chuy
Po for illegal possession of 200,000
bd. ft. of lumber consisting of
almaciga and supa and for illegal
shipment of almaciga and lauan in
violation of Sec. 63 of PD 705 as
amended by E.O. 277, series of
1987. (emphasis supplied)
The foregoing disquisitions should not, in any
manner, be construed as an affirmance of the
respondent Judge's conclusion that lumber is
excluded from the coverage of Section 68 of P.D.
No. 705, as amended, and thus possession thereof
without the required legal documents is not a crime.
On the contrary, this Court rules that such
possession is penalized in the said section
because lumber is included in the term timber.
The Revised Forestry Code contains no definition of
either timber or lumber. While the former is included
in forest products as defined in paragraph (q) of
Section 3, the latter is found in paragraph (aa) of
the same section in the definition of "Processing
plant," which reads:
(aa) Processing We find this petition to be without merit. The
plant is any petitioner has miserably failed to show that the
mechanical set-up, Court of Appeals committed any reversible error in
machine or its assailed decision of 29 November 1991.
combination of
machine used for It was duly established that on 1 April 1990, the
the processing of petitioner's truck with Plate No. CCK-322 was
logs and other coming out from the petitioner's lumberyard loaded
forest raw with lauan and almaciga lumber of different sizes
materials and dimensions which were not accompanied with
into lumber, the required invoices and transport documents. The
veneer, plywood, seizure of such truck and its cargo was a valid
wallbond, exercise of the power vested upon a forest officer or
blockboard, paper employee by Section 80 of P.D. No. 705, as
board, pulp, paper amended by P.D. No. 1775. Then, too, as correctly
or other finished held by the trial court and the Court of Appeals in
wood products. the FIRST CIVIL CASE, the search was conducted
on a moving vehicle. Such a search could be
This simply means that lumber is a lawfully conducted without a search warrant.
processed log or processed forest raw
material. Clearly, the Code uses the Search of a moving vehicle is one of the five
term lumber in its ordinary or common doctrinally accepted exceptions to the constitutional
usage. In the 1993 copyright edition of mandate 34 that no search or seizure shall be made
Webster's Third New International except by virtue of a warrant issued by a judge after
Dictionary, lumber is defined, inter alia, as personally determining the existence of probable
"timber or logs after being prepared for the cause. The other exceptions are (3) search as an
market." 32Simply put, lumber is incident to a lawful arrest, (2) seizure of evidence in
a processed log or timber. plain view, (3) customs searches, and (4)
consented warrantless search. 35
It is settled that in the absence of legislative intent
to the contrary, words and phrases used in a statute We also affirm the rulings of both the trial court and
should be given their plain, ordinary, and common the Court of Appeals that the search on 4 April 1990
usage meaning. 33 And insofar as possession was a continuation of the search on 3 April 1990
of timber without the required legal documents is done under and by virtue of the search warrant
concerned, Section 68 of P.D. No. 705, as issued on 3 April 1990 by Executive Judge Osorio.
amended, makes no distinction between raw or Under Section 9, Rule 126 of the Rules of Court, a
processed timber. Neither should we. Ubi lex non search warrant has a lifetime of ten days. Hence, it
distinguere debemus. could be served at any time within the said period,
and if its object or purpose cannot be accomplished
Indisputably, respondent Judge Teresita Dizon- in one day, the same may be continued the
Capulong of Branch 172 of the RTC of Valenzuela, following day or days until completed. Thus, when
Metro Manila, committed grave abuse of discretion the search under a warrant on one day was
in granting the motion to quash the information in interrupted, it may be continued under the same
the CRIMINAL CASE and in dismissing the said warrant the following day, provided it is still within
case. the ten-day period. 36
G.R. No. 104988 As to the final plea of the petitioner that the search
was illegal because possession of lumber without
the required legal documents is not illegal under
Section 68 of P.D. No. 705, as amended,
since lumber is neither specified therein nor
included in the term forest product, the same hardly
merits further discussion in view of our ruling in
G.R. No. 106424.
G.R. No. 123784
The allegations and arguments set forth in the
petition in this case palpally fail to shaw prima
facie that a reversible error has been committed by
the Court of Appeals in its challenged decision of 31
July 1995 and resolution of 6 February 1996 in CA-
G.R. SP No. 33778. We must, forthwith, deny it for
utter want of merit. There is no need to require the
respondents to comment on the petition.
The Court of Appeals correctly dismissed the
petitioner's appeal from the judgment of the trial
court in the SECOND CIVIL CASE. The petitioner
never disputed the fact that its lumber-dealer's
license or permit had been suspended by Secretary
Factoran on 23 April 1990. The suspension was
never lifted, and since the license had only a
lifetime of up to 25 September 1990, the petitioner
has absolutely no right to possess, sell, or
otherwise dispose of lumber. Accordingly, Secretary
Factoran or his authorized representative had the
authority to seize the Lumber pursuant to Section
68-A of P.D. No. 705, as amended, which provides
as follows:
Sec. 68-A Administrative Authority
of the Department Head or his Duly
Authorized Representative to Order
Confiscation. -- In all cases of
violations of this Code or other
forest laws, rules and regulations,
the Department Head or his duly
authorized representative may
order the confiscation of any forest
products illegally cut, gathered,
removed, or possessed or
abandoned. . . .
The petitioner's insistence that possession or sale
of lumber is not penalized must also fail view of our
disquisition and ruling on the same issue in G.R.
No. 106424. Besides, the issue is totally irrelevant
in the SECOND CIVIL CASE which involves committed any reversible error in
administrative seizure as a consequence of the the challenged decisions of 29
violation of the suspension of the petitioner's license November 1991 in CA-G.R. SP No.
as lumber dealer. 25510 in the FIRST CIVIL CASE
and of 31 July 1995 in CA-G.R. SP
All told then, G.R. No. 104988 and G.R. No. 123784 No. 33778 on the SECOND CIVIL
are nothing more than rituals to cover up blatant CASE.
violations of the Revised Forestry Code of the
Philippines (P.D. No. 705), as amended. They are Costs against the petitioner in each
presumably trifling attempts to block the serious of these three cases.
efforts of the DENR to enforce the decree, efforts
which deserve the commendation of the public in SO ORDERED.
light of the urgent need to take firm and decisive
action against despoilers of our forests whose
continuous destruction only ensures to the
generations to come, if not the present, an
inheritance of parched earth incapable of sustaining
life. The Government must not tire in its vigilance to
protect the environment by prosecuting without fear
or favor any person who dares to violate our laws
for the utilization and protection of our forests.
WHEREFORE, judgment is hereby
rendered
1. (a) GRANTING the petition in
G.R. No. 106424; (b) SETTING
ASIDE and ANNULLING, for
having been rendered with grave
abuse of discretion, the challenged
orders of 16 August 1991 and 18
October 1991 of respondent Judge
Teresita Dizon-Capulong, Branch
172, Regional Trial Court of
Valenzuela, Metro Manila, in
Criminal Case No. 324-V-91,
entitled "People of the Philippines
vs. Ri Chuy Po"; (c) REINSTATING
the information in the said criminal
case; and (d) DIRECTING the
respondent Judge or her successor
to hear and decide the case with
purposeful dispatch; and
2. DENYING the petitions in G.R.
No. 104988 and in G. R. No.
123784 for utter failure of the
petitioner to show that the
respondent Court of Appeals
G.R. No. 131270 March 17, 2000
PERFECTO PALLADA, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
MENDOZA, J.:
This is a petition for review of the decision 1 of the
Court of Appeals affirming petitioner's conviction of
illegal possession of lumber in violation of §68 2 of
the Revised Forestry Code 3 (P.D. No. 705, as
amended) by the Regional Trial Court, Branch 8,
Malaybalay, Bukidnon.
The facts are as follows:
Sometime in the latter part of 1992, the Department
of Environment and Natural Resources (DENR)
office in Bukidnon received reports that illegally cut
lumber was being delivered to the warehouse of the
Valencia Golden Harvest Corporation in Valencia,
Bukidnon. The company is engaged in rice milling
and trading.
DENR officers, assisted by elements of the
Philippine National Police, raided the company's
warehouse in Poblacion, Valencia on the strength of
a warrant issued by the Regional Trial Court,
Branch 8, Malaybalay, Bukidnon and found a large
stockpile of lumber of varying sizes cut by a chain
saw. As proof that the company had acquired the
lumber by purchase, petitioner produced two
receipts issued by R.L. Rivero Lumberyard of
Maramag, Bukidnon, dated March 6 and 17, 1992.
The DENR officers did not, however, give credit to
the receipt considering that R. L. Rivero
Lumberyard's permit to operate had long been
suspended. What is more, the pieces of lumber
were cut by chain saw and thus could not have
come from a licensed sawmill operator.
The team made an inventory of the seized lumber
which, all in all, constituted 29,299.25 board feet,
worth P488,334.45 in total. The following day,
September 29, 1992, the first batch of lumber,
consisting of 162 pieces measuring 1,954.66 board
feet, was taken and impounded at the FORE
stockyard in Sumpong; Malaybalay, Bukidnon. The
seizure order 4 was served on petitioner Perfecto
Pallada as general manager of the company, but he
refused to acknowledge it.
On October 1, 1992, raiding team returned for the
remaining lumber. Company president Francisco
Tankiko and a certain Isaias Valdehueza, who
represented himself to be a lawyer, asked for a
suspension of the operations to enable them to
seek a lifting of the warrant. The motion was filed
with the court which issued the warrant but, on
October 5, 1992, the motion was
denied. 5 Accordingly, the remaining lumber was
confiscated. By October 9, 1992, all the lumber in
the warehouse had been seized. As before,
however, petitioner Pallada refused to sign for the
seizure orders issued by the DENR officers (Exhs.
E, F & G).
On February 23, 1993, petitioner, as general
manager, together with Noel Sy, as assistant
operations manager, and Francisco Tankiko, as
president of the Valencia Golden Harvest
Corporation, and Isaias Valdehueza, were charged
with violation of §68 of P.D. No. 705, as amended.
The Information alleged: 6
That on or about the 1st day of October,
1992, and prior thereto at the Valencia
Golden Harvest Corporation Compound,
municipality of Valencia, province of
Bukidnon, Philippines, and within the
jurisdiction of this Honorable Court, the
above-named accused, conspiring,
confederating and mutually helping one
another, with intent of gain, did then and
there willfully, unlawfully and criminally
possess 2,115 pieces [of] lumber of
different dimensions in the total volume of
29,299.25 board feet or equivalent to 69.10
cubic meters with an estimated value of
FOUR HUNDRED EIGHTY EIGHT
THOUSAND THREE HUNDRED THIRTY
FOUR PESOS AND 45/100 (P488,334.45)
Philippine Currency, without any authority,
license or legal documents from the
government, to the damage and prejudice
of the government in the amount of
P488,334.45.
Contrary to and in violation of Section 68,
P.D. 705 as amended by E.O. 277.
As all the accused pleaded not guilty, trial ensued.
Then on July 27, 1994, judgment was rendered as
follows: 7
WHEREFORE, judgment is hereby
rendered finding accused Perfecto Pallada
and Francisco Tankiko guilty beyond
reasonable doubt of having in their
possession timber products worth of
P488,334.45 without the legal documents
as charged in the information in violation of
Section 68 of Presidential Decree 705, as
amended and are, therefore, each
sentenced to suffer imprisonment of TEN
(10) YEARS of prision mayor as minimum
to TWENTY (20) YEARS of reclusion
temporal as maximum. The lumber subject
of the crime are confiscated in favor of the
government.
Accused Isaias Valdehueza and Noel Sy
are ACQUITTED for lack of evidence
against them.
Petitioner and Francisco Tankiko appealed to the
Court of Appeals, which, on October 31, 1997,
affirmed petitioner's conviction but acquitted
Tankiko for lack of proof of his participation in the
purchase or acquisition of the seized lumber. 8
Hence this petition which raises the following
issues: 9
I. WHETHER OR NOT THE HONORABLE
COURT OF APPEALS WAS CORRECT IN
UPHOLDING THE RULING OF THE TRIAL
COURT THAT THE PROSECUTION HAD
PROVED BEYOND REASONABLE
DOUBT THE GUILT OF THE ACCUSED-
PETITIONER PALLADA.
II. WHETHER OR NOT THE HONORABLE
COURT OF APPEALS WAS CORRECT IN
UPHOLDING THE DECISION OF THE
TRIAL COURT THAT THE CERTIFICATE
OF TIMBER ORIGIN WAS NOT THE
 PROPER DOCUMENT TO JUSTIFY
PETITIONER'S POSSESSION OF THE
SQUARED TIMBER OR FLITCHES.
III. WHETHER OR NOT THE HONORABLE
COURT OF APPEALS WAS CORRECT IN
UPHOLDING THE RULING OF THE TRIAL
COURT THAT THE PRESENCE OF
ERASURES IN THE CERTIFICATE OF
TIMBER ORIGIN RENDER THEM
VALUELESS AS EVIDENCE.
First. During the trial, the defense presented the
following documents, as summarized by the trial
court, to establish that Valencia Golden Harvest
Corporation's possession of the seized lumber was
legal: 10
1. Exh. 6 — Certificate of Timber Origin
(CTO for short), dated December 15, 1991,
for 56 pieces of flitches equivalent to 12.23
cubic meters, transported from Bombaran,
Lanao del Sur of the Autonomous Region of
Muslim Mindanao. Taken from the forest
area of Wahab and H.D. Pangcoga.
Exh. 6-A — Auxiliary Invoice
Exh. 6-B — Certificate of Transport
Agreement (CTA, for short)
Exh. 6-C — Tally Sheet, dated
December 14, 1992, for 463 pieces
of lumber equivalent to 5,056.94
board feet
Exh. 6-D — Delivery Receipt, dated
December 16, 1991, from WHP
Enterprises of Maguing, Lanao del
Sur, to the Corporation for the
lumber mentioned in Exh. "6-C"
Exh. 6-F — Cash Voucher for
P58,832.45 in payment to WHP
Enterprises, dated December 16,
1992, for the 5,056.94 board feet of
lumber
Exh. 6-D-1 — [C]arbon copy of
Exh. "6-D" above
2. Exh. 7 — CTO, (undated), for 961 pieces
of log equivalent to 25.4 cubic meter[s]
taken from the forest area of a certain
Somira M. Ampuan in Lama Lico,
Bombaran of the ARMM.
Exh. 7-A — Auxiliary Invoice
Exh. 7-B — CTA
Exh. 7-C — Tally Sheet, dated
February 6, 1992, for 961 pieces of
lumber equal to 10,758.2 board feet
Exh. 7-D — Delivery Receipt to
Golden Harvest Corporation issued
by SMA Trading Company, dated
February 6, 1992
Exh. 7-E — Official Receipt for
environmental fee issued to Somira
N. Ampuan, dated August 9, 1991
Exh. 7-F — Cash Voucher for
P126,562.05 issued by the
Corporation in payment to SMA
Trading Company for 10,758.02
board feet of lumber, dated
February 6, 1992
3. Exh. 8 — CTO for 678 pieces of chain-
sawn lumber with an equivalent volume of
18.93 cubic meter from the forest area of
Wahab Pangcoga and H.D. Pangcoga,
dated February 25, 1992
Exh. 8-A — Auxiliary Invoice
Exh. 8-B — CTA.
Exh. 8-C — Tally Sheet for the 678
pieces of lumber.
Exh. 8-D — Delivery Receipt to
Golden Harvest Corporation issued
by WHP Enterprises,
Exh. 8-E — Official Receipt for
environmental fee
Exh. 8-F — Cash Voucher for
P93,614.50 in payment for
8,024.99 board feet of lumber
issued by the Corporation payable
to WHP Enterprises
4. Exh. 9 — CTO for 426 pieces of logs (?)
with an equivalent volume of 12.24 cubic
meters from licensee Somira M. Ampuan of
Lama Lico, Bombaran, Lanao del Sur,
consigned to the Corporation, (undated).
Stamped "Release 3/2/92"
Exh. 9-A — Auxiliary Invoice
Exh. 9-B — CTA, dated March 20,
1992
Exh. 9-C — Tally Sheet, dated
March 20, 1992
Exh. 9-D — Delivery Receipt
issued by SMA Trading Company
to the Corporation, dated March 20,
1992
Exh. 9-E — Official Receipt for
environmental fee
Exh. 9-F — Cash Voucher, for
P64,299.50 to pay [for] 5,189 board
feet of lumber
Exh. 9-D-1 — Xerox copy of Exh.
"9-D"
The trial court acted correctly in not giving credence
to the Certificates of Timber Origin presented by
petitioner since the lumber held by the company
should be covered by Certificates of Lumber
Origin. 11 For indeed, as BFD Circular No. 10-
83 12 states in pertinent parts:
In order to provide an effective mechanism
to pinpoint accountability and responsibility
for shipment of lumber . . . and to have
uniformity in documenting the origin thereof,
the attached Certificate of Lumber Origin
(CLO) . . . which form[s] part of this circular
[is] hereby adopted as accountable forms
for official use by authorized BFD officers . .
..
5. Lumber . . . transported/shipped without
the necessary Certificate of Lumber Origin
(CLO) . . . as herein required shall be
considered as proceeding from illegal
sources and as such, shall be subject to
confiscation and disposition in accordance
with LOI 1020 and BFD implementing
guidelines.
Petitioner contends that the term "timber" includes
lumber and, therefore, the Certificates of Timber
Origin and their attachments should have been
considered in establishing the legality of the
company's possession of the lumber. 13In support of
his contention, petitioner invokes our ruling
in Mustang Lumber, Inc. v. Court of Appeals. 14
The contention has no, merit. The statement in
Mustang Lumber that lumber is merely processed
timber and, therefore, the word "timber" embraces
lumber, was made in answer to the lower court's
ruling in that case that the phrase "posses timber or
other forest products" in §68 of P.D. No. 705 means
that only those who possess timber and forest
products without the documents required by law are
criminally liable, while those who possess lumber
are not liable. On the other hand, the question in
this case is whether separate certificates of origin
should be issued for lumber and timber. Indeed,
different certificates of origin are required for timber,
lumber and non-timber forest products. 15 As
already noted, the opening paragraph of BFD
Circular No. 10-83 expressly states that the
issuance of a separate certificate of origin for
lumber is required in order to "pinpoint
accountability and responsibility for shipment of
lumber . . . and to have uniformity in documenting
the origin thereof."
Even assuming that a Certificate of Timber Origin
could serve as a substitute for Certificate of Lumber
Origin, the trial court and the Court of Appeals were
justified in convicting petitioner, considering the
numerous irregularities and defects found in the
documents presented by the latter. According to the
trial court: 16
Although the CTO marked Exh. "6"
mentions 56 pieces of flitches, the
supporting documents, like the Tally Sheet,
the Delivery Receipt from the lumber dealer
and the Cash Voucher describe 463 pieces
of lumber. . . .
In like manner, Exh. "7" and Exh. "9"
mention 961 and 420 pieces of log,
respectively. But the supporting documents
describe the forest product[s] as lumber.
The CTO marked Exh. "[8]" reveals a half-
truth: it mentions 678 pieces of hand-sawn
lumber. Its Auxiliary Invoice also states the
same load of lumber. Someone may have
noticed the "mistake" of mentioning lumber
in the Auxiliary Invoice and so the words
"flitches 87 pieces" were written down and
enclosed in parenthesis.
The said exhibits also appear to be
questionable, [t]hus[:]
The CTO marked Exh. "6" is consigned to
"any buyer (sic) Cagayan de Oro", but its
Auxiliary Invoice (Exh. "6-A") mentions
Valencia Golden Harvest Corporation as
the consignee. Moreover, the CTO states
(at the back page) that the same is covered
by Auxiliary Invoice No. 00491; in fact, the
Auxiliary Invoice (Exh. 6-A) has invoice
number 000488.
In the CTO marked Exhibit "7", the original
typewritten name of the consignee was
clearly erased and changed to "Valencia,
Golden Harvest Corporation, Valencia,
Bukidnon". In the Auxiliary Invoice (Exh. "7-
A") the blank space for the name and
address of the consignee was smudged
with a typewriter correction fluid (the better
to erase what was originally typewritten in
it?) and changed to "Valencia Golden
Harvest Corporation, Valencia, Bukidnon".
The CTO marked Exh. "9" and its Auxiliary
Invoice marked Exh. "9-A" [were] "doctored"
in the same manner as Exh. "[7]" and Exh.
"[7-A]". 17
Additionally, all the Auxiliary Invoice were
not properly accomplished: the data
required to be filled are left in blank.
Indeed, aside from the fact that the Certificate of
Timber Origin in Exh. 7 bears no date, the dorsal
side bears the certification that the logs were
"scaled on August 7, 1991," while the receipt
attached to that Certificate is dated February 6,
1992. Moreover, the four delivery receipts list in
sizes and volume of the lumber sold, indicating that
the company purchased cut lumber from the
dealers, thus belying the testimony of petitioner that
when the company bought the forest products, they
were still in the form of flitches and logs, and they
were cut into lumber by the company. 18
These irregularities and discrepancies make the
documents in which they are found not only
questionable but invalid and, thus, justified the trial
court in giving no credence to the same. 19
It is argued that the irregularities in the documentary
exhibits should not be taken against petitioner
because the documents came from lumber dealers.
In addition, it is contended that the CTOs and
Auxiliary Receipts, being public documents, should
be accorded the presumption of regularity in their
execution. 20
This contention is untenable. What render these
documents without legal effect are the patent
irregularities found on their faces. That petitioner
may not have any responsibility for such irregularity
is immaterial. In any case, as the corporate officer
in charge of the purchase of the lumber, petitioner
should have noticed such obvious irregularities, and twenty (20) years of reclusion temporal, as
he should have taken steps to have them corrected. maximum.
He cannot now feign ignorance and assert that, as
far as he is concerned, the documents are regular SO ORDERED.
and complete. 21

The presence of such glaring irregularities negates

the presumption that the CTOs were regularly
executed by the DENR officials concerned. The
presumption invoked by petitioner applies only
when the public accomplished.22documents are, on
their faces, regular and properly accomplished. 22

Second. The penalty imposed should be modified.

Art. 309 of the Revised Penal Code, made
applicable to the offense by P.D. No. 705, §68,
provides:

Art. 309. Penalties. — Any person guilty of

theft shall be punished by:

1. The penalty of prision mayor in its

minimum and medium; periods, if the value
of the thing stolen is more than P12,000
pesos but does not exceed P22,000 pesos;
but if the value of the thing stolen exceeds
the latter amount, the penalty shall be the
maximum period of the one prescribed in
this paragraph, and one year for each
additional ten thousand pesos, but the total
of the penalty which may be imposed shall
not exceed twenty years. In such cases,
and in connection with the accessory
penalties which may be imposed and for
the purpose of the other provisions of this
Code, the penalty shall be termed prision
mayor or reclusion temporal, as the Case
may be. . . .

As the lumber involved in this case is worth

P488,334.45, and applying the Indeterminate
Sentence Law, 23 the penalty to be imposed should
be six (6) years of prision correccional to twenty
(20) years of reclusion temporal.

WHEREFORE the decision of the Court of Appeals,

dated October 31, 1997, is AFFIRMED with the
MODIFICATION that petitioner is sentenced to six
(6) years of prision correccional, as minimum, to